Here four vector databases are created

One using the fine tuned BERT with cls pooling via Annoy

One using the fine tuned BERT with cls pooling via FAISS

One using the pretrained BERT with cls pooling via Annoy

One using the pretrained BERT with cls pooling via FAISS

The fine tuned BERT FAISS database performed best so we visualized the embedding space via PCA dimensionality reduction.

# Imports

from lxml import etree

from langchain.text_splitter import RecursiveCharacterTextSplitter
from langchain.docstore.document import Document

from sentence_transformers import SentenceTransformer, models
from langchain_huggingface import HuggingFaceEmbeddings
from langchain.vectorstores import Annoy, FAISS
from typing import List
from langchain.vectorstores.base import VectorStore


import numpy as np
import matplotlib.pyplot as plt
from sklearn.decomposition import PCA


# Namespace Spec (for lxml)
NS = {'uslm': 'http://xml.house.gov/schemas/uslm/1.0',
      'xhtml': 'http://www.w3.org/1999/xhtml'}

Parse tax law

def get_ancestor_heading_text(section, tag, ns):
    ancestor = section.getparent()
    while ancestor is not None:
        if ancestor.tag == f"{{{ns['uslm']}}}{tag}":
            heading = ancestor.find('uslm:heading', namespaces=ns)
            return heading.text.strip() if heading is not None else ""
        ancestor = ancestor.getparent()
    return ""

def parse_sections_with_metadata(file_path):
    with open(file_path, 'rb') as f:
        tree = etree.parse(f)
    
    sections = tree.findall('.//uslm:section', namespaces=NS)
    parsed = []

    for section in sections:
        # Get all paragraphs (and any nested elements)
        content_texts = []
        for p in section.findall('.//uslm:p', namespaces=NS):
            text = ' '.join(p.itertext()).strip()
            if text:
                content_texts.append(text)

        if len(content_texts) == 0:
            continue

        # Get ancestors: subtitle, chapter, part
        subtitle = get_ancestor_heading_text(section, 'subtitle', NS)
        chapter = get_ancestor_heading_text(section, 'chapter', NS)
        part = get_ancestor_heading_text(section, 'part', NS)

        parsed.append({
            "metadata": {
                "subtitle": subtitle,
                "chapter": chapter,
                "part": part
                },
            "content": "\n".join(content_texts)
        })

    return parsed

data_dict = parse_sections_with_metadata("/DL-data/usc26.xml")
data_dict

[{'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON INDIVIDUALS'},
  'content': 'There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $29,600 15% of taxable income. \n Over $29,600 but not over $76,400 $4,440, plus 28% of the excess over $29,600. \n Over $76,400 but not over $127,500 $17,544, plus 31% of the excess over $76,400. \n Over $127,500 but not over $250,000 $33,385, plus 36% of the excess over $127,500. \n Over $250,000 $77,485, plus 39.6% of the excess over $250,000.\nThere is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $22,100 15% of taxable income. \n Over $22,100 but not over $53,500 $3,315, plus 28% of the excess over $22,100. \n Over $53,500 but not over $115,000 $12,107, plus 31% of the excess over $53,500. \n Over $115,000 but not over $250,000 $31,172, plus 36% of the excess over $115,000. \n Over $250,000 $79,772, plus 39.6% of the excess over $250,000.\nThere is hereby imposed on the taxable income of every married individual (as defined in section 7703) who does not make a single return jointly with his spouse under section 6013, a tax determined in accordance with the following table: \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $18,450 15% of taxable income. \n Over $18,450 but not over $44,575 $2,767.50, plus 28% of the excess over $18,450. \n Over $44,575 but not over $70,000 $10,082.50, plus 31% of the excess over $44,575. \n Over $70,000 but not over $125,000 $17,964.25, plus 36% of the excess over $70,000. \n Over $125,000 $37,764.25, plus 39.6% of the excess over $125,000.\nNot later than December 15 of 1993, and each subsequent calendar year, the Secretary shall prescribe tables which shall apply in lieu of the tables contained in subsections (a), (b), (c), (d), and (e) with respect to taxable years beginning in the succeeding calendar year.\nFor purposes of any provision of this title which provides for the substitution of a year after 2016 for “2016” in subparagraph (A)(ii), subparagraph (A) shall be applied by substituting “the C-CPI-U for calendar year 2016” for “the CPI for calendar year 2016” and all that follows in clause (ii) thereof.\nFor purposes of paragraph (3), the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year.\nFor purposes of paragraph (4), the term “Consumer Price Index” means the last Consumer Price Index for all-urban consumers published by the Department of Labor. For purposes of the preceding sentence, the revision of the Consumer Price Index which is most consistent with the Consumer Price Index for calendar year 1986 shall be used.\nThe term “C-CPI-U” means the Chained Consumer Price Index for All Urban Consumers (as published by the Bureau of Labor Statistics of the Department of Labor). The values of the Chained Consumer Price Index for All Urban Consumers taken into account for purposes of determining the cost-of-living adjustment for any calendar year under this subsection shall be the latest values so published as of the date on which such Bureau publishes the initial value of the Chained Consumer Price Index for All Urban Consumers for the month of August for the preceding calendar year.\nThe C-CPI-U for any calendar year is the average of the C-CPI-U as of the close of the 12-month period ending on August 31 of such calendar year.\nIf any increase determined under paragraph (2)(A), section 63(c)(4), section 68(b)(2) or section 151(d)(4) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.\nIn the case of a married individual filing a separate return, subparagraph (A) (other than with respect to sections 63(c)(4) and 151(d)(4)(A)) shall be applied by substituting “$25” for “$50” each place it appears.\nA child’s share of any allocable parental tax of a parent shall be equal to an amount which bears the same ratio to the total allocable parental tax as the child’s net unearned income bears to the aggregate net unearned income of all children of such parent to whom this subsection applies.\nExcept as provided in regulations, if the parent does not have the same taxable year as the child, the allocable parental tax shall be determined on the basis of the taxable year of the parent ending in the child’s taxable year.\nThe amount of the net unearned income for any taxable year shall not exceed the individual’s taxable income for such taxable year.\nFor purposes of this subsection, in the case of any child who is a beneficiary of a qualified disability trust (as defined in section 642(b)(2)(C)(ii)), any amount included in the income of such child under sections 652 and 662 during a taxable year shall be considered earned income of such child for such taxable year.\nThe parent of any child to whom this subsection applies for any taxable year shall provide the TIN of such parent to such child and such child shall include such TIN on the child’s return of tax imposed by this section for such taxable year.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph.\nFor purposes of this subsection, the net capital gain for any taxable year shall be reduced (but not below zero) by the amount which the taxpayer takes into account as investment income under section 163(d)(4)(B)(iii).\nThe terms “collectibles gain” and “collectibles loss” mean gain or loss (respectively) from the sale or exchange of a collectible (as defined in section 408(m) without regard to paragraph (3) thereof) which is a capital asset held for more than 1 year but only to the extent such gain is taken into account in computing gross income and such loss is taken into account in computing taxable income.\nFor purposes of subparagraph (A), any gain from the sale of an interest in a partnership, S corporation, or trust which is attributable to unrealized appreciation in the value of collectibles shall be treated as gain from the sale or exchange of a collectible. Rules similar to the rules of section 751 shall apply for purposes of the preceding sentence.\nThe amount described in subparagraph (A)(i) from sales, exchanges, and conversions described in section 1231(a)(3)(A) for any taxable year shall not exceed the net section 1231 gain (as defined in section 1231(c)(3)) for such year.\nIf any amount is treated as ordinary income under section 1231(c), such amount shall be allocated among the separate categories of net section 1231 gain (as defined in section 1231(c)(3)) in such manner as the Secretary may by forms or regulations prescribe.\nThe Secretary may prescribe such regulations as are appropriate (including regulations requiring reporting) to apply this subsection in the case of sales and exchanges by pass-thru entities and of interests in such entities.\nFor purposes of this subsection, the term “net capital gain” means net capital gain (determined without regard to this paragraph) increased by qualified dividend income.\nA foreign corporation not otherwise treated as a qualified foreign corporation under clause (i) shall be so treated with respect to any dividend paid by such corporation if the stock with respect to which such dividend is paid is readily tradable on an established securities market in the United States.\nRules similar to the rules of section 904(b)(2)(B) shall apply with respect to the dividend rate differential under this paragraph.\nQualified dividend income shall not include any amount which the taxpayer takes into account as investment income under section 163(d)(4)(B).\nIf a taxpayer to whom this section applies receives, with respect to any share of stock, qualified dividend income from 1 or more dividends which are extraordinary dividends (within the meaning of section 1059(c)), any loss on the sale or exchange of such share shall, to the extent of such dividends, be treated as long-term capital loss.\nA dividend received from a regulated investment company or a real estate investment trust shall be subject to the limitations prescribed in sections 854 and 857.\nFor purposes of this paragraph, with respect to taxable years beginning in calendar years after 2013, each of the dollar amounts under clauses (i), (ii), and (iii) of subparagraph (B) shall be adjusted in the same manner as under paragraph (1)(C)(i), except that subsection (f)(3)(A)(ii) shall be applied by substituting “2012” for “2016”.\nThe Secretary shall adjust the tables prescribed under subsection (f) to carry out this subsection.\nThe following table shall be applied in lieu of the table contained in subsection (a): \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $19,050 10% of taxable income. \n Over $19,050 but not over $77,400 $1,905, plus 12% of the excess over $19,050. \n Over $77,400 but not over $165,000 $8,907, plus 22% of the excess over $77,400. \n Over $165,000 but not over $315,000 $28,179, plus 24% of the excess over $165,000. \n Over $315,000 but not over $400,000 $64,179, plus 32% of the excess over $315,000. \n Over $400,000 but not over $600,000 $91,379, plus 35% of the excess over $400,000. \n Over $600,000 $161,379, plus 37% of the excess over $600,000.\nThe following table shall be applied in lieu of the table contained in subsection (b): \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $13,600 10% of taxable income. \n Over $13,600 but not over $51,800 $1,360, plus 12% of the excess over $13,600. \n Over $51,800 but not over $82,500 $5,944, plus 22% of the excess over $51,800. \n Over $82,500 but not over $157,500 $12,698, plus 24% of the excess over $82,500. \n Over $157,500 but not over $200,000 $30,698, plus 32% of the excess over $157,500. \n Over $200,000 but not over $500,000 $44,298, plus 35% of the excess over $200,000. \n Over $500,000 $149,298, plus 37% of the excess over $500,000.\nThe following table shall be applied in lieu of the table contained in subsection (c): \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $9,525 10% of taxable income. \n Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525. \n Over $38,700 but not over $82,500 $4,453.50, plus 22% of the excess over $38,700. \n Over $82,500 but not over $157,500 $14,089.50, plus 24% of the excess over $82,500. \n Over $157,500 but not over $200,000 $32,089.50, plus 32% of the excess over $157,500. \n Over $200,000 but not over $500,000 $45,689.50, plus 35% of the excess over $200,000. \n Over $500,000 $150,689.50, plus 37% of the excess over $500,000.\nThe following table shall be applied in lieu of the table contained in subsection (d): \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $9,525 10% of taxable income. \n Over $9,525 but not over $38,700 $952.50, plus 12% of the excess over $9,525. \n Over $38,700 but not over $82,500 $4,453.50, plus 22% of the excess over $38,700. \n Over $82,500 but not over $157,500 $14,089.50, plus 24% of the excess over $82,500. \n Over $157,500 but not over $200,000 $32,089.50, plus 32% of the excess over $157,500. \n Over $200,000 but not over $300,000 $45,689.50, plus 35% of the excess over $200,000. \n Over $300,000 $80,689.50, plus 37% of the excess over $300,000.\nThe following table shall be applied in lieu of the table contained in subsection (e): \n \n \n \n \n \n \n If taxable income is: The tax is: \n \n \n Not over $2,550 10% of taxable income. \n Over $2,550 but not over $9,150 $255, plus 24% of the excess over $2,550. \n Over $9,150 but not over $12,500 $1,839, plus 35% of the excess over $9,150. \n Over $12,500 $3,011.50, plus 37% of the excess over $12,500.\nAny reference in this title to a rate of tax under subsection (c) shall be treated as a reference to the corresponding rate bracket under subparagraph (C) of this paragraph, except that the reference in section 3402(q)(1) to the third lowest rate of tax applicable under subsection (c) shall be treated as a reference to the fourth lowest rate of tax under subparagraph (C).\nThe tables contained in paragraph (2) shall apply without adjustment for taxable years beginning after  December 31, 2017 , and before  January 1, 2019 .\nSection 15 shall not apply to any change in a rate of tax by reason of this subsection.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table below.\nThe date of the enactment of this subclause, referred to in subsec. (h)(11)(C)(iii)(II), is the date of enactment of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 .\n2019—Subsec. (j)(4).  Pub. L. 116–94  struck out par. (4) which related to special rules for certain children with unearned income.\n2017—Subsec. (f)(2)(A).  Pub. L. 115–97, §\u202f11002(c)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “except as provided in paragraph (8), by increasing the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed under such table by the cost-of-living adjustment for such calendar year,”.\nSubsec. (f)(3).  Pub. L. 115–97, §\u202f11002(a) , added par. (3) and struck out former par. (3). Prior to amendment, text read as follows: “For purposes of paragraph (2), the cost-of-living adjustment for any calendar year is the percentage (if any) by which—\n“(A) the CPI for the preceding calendar year, exceeds\n“(B) the CPI for the calendar year 1992.”\nSubsec. (f)(6), (7).  Pub. L. 115–97, §\u202f11002(b) , added par. (6), redesignated former par. (6) as (7), and struck out former par. (7). Prior to amendment, text of par. (7) read as follows: “In prescribing tables under paragraph (1) which apply to taxable years beginning in a calendar year after 1994, the cost-of-living adjustment used in making adjustments to the dollar amounts at which the 36 percent rate bracket begins or at which the 39.6 percent rate bracket begins shall be determined under paragraph (3) by substituting ‘1993’ for ‘1992’.”\nSubsec. (h)(11)(C)(iii).  Pub. L. 115–97, §\u202f14223(a) , substituted “shall not include—” for “shall not include”, inserted subcl. (I) designation before “any foreign corporation”, and added subcl. (II).\nSubsec. (i)(1)(C)(i).  Pub. L. 115–97, §\u202f11002(c)(2)(A) , substituted “for ‘2016’ in subparagraph (A)(ii)” for “for ‘1992’ in subparagraph (B)”.\nSubsec. (i)(3)(C).  Pub. L. 115–97, §\u202f11002(c)(2)(B) , substituted “subsection (f)(3)(A)(ii) shall be applied by substituting ‘2012’ for ‘2016’\u202f” for “subsection (f)(3)(B) shall be applied by substituting ‘2012’ for ‘1992’\u202f”.\nSubsec. (j).  Pub. L. 115–97, §\u202f11001(a) , added subsec. (j).\n2014—Subsec. (f)(7).  Pub. L. 113–295  amended par. (7) generally. Prior to amendment, text read as follows:\n“(A)  Calendar year 1994 .—In prescribing the tables under paragraph (1) which apply with respect to taxable years beginning in calendar year 1994, the Secretary shall make no adjustment to the dollar amounts at which the 36 percent rate bracket begins or at which the 39.6 percent rate begins under any table contained in subsection (a), (b), (c), (d), or (e).\n“(B)  Later calendar years .—In prescribing tables under paragraph (1) which apply with respect to taxable years beginning in a calendar year after 1994, the cost-of-living adjustment used in making adjustments to the dollar amounts referred to in subparagraph (A) shall be determined under paragraph (3) by substituting ‘1993’ for ‘1992’.”\n2013—Subsec. (h)(1)(B).  Pub. L. 112–240, §\u202f102(c)(2) , substituted “0 percent” for “5 percent (0 percent in the case of taxable years beginning after 2007)” in introductory provisions.\nSubsec. (h)(1)(C) to (F).  Pub. L. 112–240, §\u202f102(b)(1) , added subpars. (C) and (D), redesignated former subpars. (D) and (E) as (E) and (F), respectively, and struck out former subpar. (C) which read as follows: “15 percent of the adjusted net capital gain (or, if less, taxable income) in excess of the amount on which a tax is determined under subparagraph (B);”.\nSubsec. (i)(2).  Pub. L. 112–240, §\u202f101(b)(1)(A) , amended par. (2) generally. Prior to amendment, par. (2) related to reductions in rates after  June 30, 2001 .\nSubsec. (i)(3), (4).  Pub. L. 112–240, §\u202f101(b)(1)(B) , added par. (3) and redesignated former par. (3) as (4).\n2008—Subsec. (i)(1)(D).  Pub. L. 110–185  struck out heading and text of subpar. (D). Text read as follows: “This paragraph shall not apply to any taxable year to which section 6428 applies.”\n2007—Subsec. (g).  Pub. L. 110–28, §\u202f8241(b) , struck out “minor” before “children” in heading.\nSubsec. (g)(2)(A).  Pub. L. 110–28, §\u202f8241(a) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “such child has not attained age 18 before the close of the taxable year,”.\n2006—Subsec. (g)(2)(A).  Pub. L. 109–222, §\u202f510(a) , substituted “age 18” for “age 14”.\nSubsec. (g)(2)(C).  Pub. L. 109–222, §\u202f510(c) , added subpar. (C).\nSubsec. (g)(4)(C).  Pub. L. 109–222, §\u202f510(b) , added subpar. (C).\n2004—Subsec. (f)(8).  Pub. L. 108–311, §\u202f101(c) , amended par. (8) generally, substituting provisions relating to elimination of marriage penalty in 15-percent bracket for provisions relating to phaseout of marriage penalty in 15-percent bracket.\nSubsec. (g)(7)(B)(ii)(II).  Pub. L. 108–311, §\u202f408(a)(1) , substituted “10 percent” for “10 percent.”\nSubsec. (h)(1)(D)(i).  Pub. L. 108–311, §\u202f402(a)(1) , inserted “(determined without regard to paragraph (11))” after “net capital gain”.\nSubsec. (h)(6)(A)(ii)(I).  Pub. L. 108–311, §\u202f408(a)(2)(A) , substituted “(4)(B)” for “(5)(B)”.\nSubsec. (h)(6)(A)(ii)(II).  Pub. L. 108–311, §\u202f408(a)(2)(B) , substituted “(4)(A)” for “(5)(A)”.\nSubsec. (h)(10)(F) to (H).  Pub. L. 108–357, §\u202f413(c)(1)(A) , inserted “and” at end of subpar. (F), redesignated subpar. (H) as (G), and struck out former subpar. (G) which read as follows: “a foreign investment company which is described in section 1246(b)(1) and for which an election is in effect under section 1247; and”.\nSubsec. (h)(11)(B)(iii)(I).  Pub. L. 108–311, §\u202f402(a)(2) , substituted “substituting in section 246(c)” for “substituting in section 246(c)(1)”, “121-day period” for “120-day period”, and “91-day period” for “90-day period”.\nSubsec. (h)(11)(C)(iii).  Pub. L. 108–357, §\u202f413(c)(1)(B) , struck out “a foreign personal holding company (as defined in section 552), a foreign investment company (as defined in section 1246(b)), or” before “a passive foreign investment”.\nSubsec. (h)(11)(D)(ii).  Pub. L. 108–311, §\u202f402(a)(3) , substituted “a taxpayer to whom this section applies” for “an individual”.\nSubsec. (i)(1)(B)(i).  Pub. L. 108–311, §\u202f101(d)(1) , struck out “($12,000 in the case of taxable years beginning after  December 31, 2004 , and before  January 1, 2008 )” after “$14,000”.\nSubsec. (i)(1)(C).  Pub. L. 108–311, §\u202f101(d)(2) , reenacted heading without change and amended text generally, substituting provisions relating to inflation adjustment in calendar years after 2003 for such provisions in calendar years after 2000.\n2003—Subsec. (f)(8)(A).  Pub. L. 108–27, §\u202f102(b)(1) , substituted “2002” for “2004”.\nSubsec. (f)(8)(B).  Pub. L. 108–27, §\u202f102(a) , inserted table item relating to years 2003 and 2004.\nSubsec. (h)(1)(B).  Pub. L. 108–27, §\u202f301(a)(1) , substituted “5 percent (0 percent in the case of taxable years beginning after 2007)” for “10 percent”.\nSubsec. (h)(1)(C).  Pub. L. 108–27, §\u202f301(a)(2)(A) , substituted “15 percent” for “20 percent”.\nSubsec. (h)(2).  Pub. L. 108–27, §\u202f301(b)(1)(A) , (B), redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows:\n“(A)  Reduction in 10-percent rate .—In the case of any taxable year beginning after  December 31, 2000 , the rate under paragraph (1)(B) shall be 8 percent with respect to so much of the amount to which the 10-percent rate would otherwise apply as does not exceed qualified 5-year gain, and 10 percent with respect to the remainder of such amount.\n“(B)  Reduction in 20-percent rate .—The rate under paragraph (1)(C) shall be 18 percent with respect to so much of the amount to which the 20-percent rate would otherwise apply as does not exceed the lesser of—\n“(i) the excess of qualified 5-year gain over the amount of such gain taken into account under subparagraph (A) of this paragraph; or\n“(ii) the amount of qualified 5-year gain (determined by taking into account only property the holding period for which begins after  December 31, 2000 ),\nand 20 percent with respect to the remainder of such amount. For purposes of determining under the preceding sentence whether the holding period of property begins after  December 31, 2000 , the holding period of property acquired pursuant to the exercise of an option (or other right or obligation to acquire property) shall include the period such option (or other right or obligation) was held.”\nSubsec. (h)(3).  Pub. L. 108–27, §\u202f302(e)(1) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘adjusted net capital gain’ means net capital gain reduced (but not below zero) by the sum of—\n“(A) unrecaptured section 1250 gain; and\n“(B) 28-percent rate gain.”\nPub. L. 108–27, §\u202f301(b)(1)(B) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nSubsec. (h)(4) to (7).  Pub. L. 108–27, §\u202f301(b)(1)(B) , redesignated pars. (5) to (8) as (4) to (7), respectively. Former par. (4) redesignated (3).\nSubsec. (h)(8).  Pub. L. 108–27, §\u202f301(b)(1)(C) , redesignated par. (10) as (8). Former par. (8) redesignated (7).\nSubsec. (h)(9).  Pub. L. 108–27, §\u202f301(b)(1)(A) , (C), redesignated par. (11) as (9) and struck out heading and text of former par. (9). Text read as follows: “For purposes of this subsection, the term ‘qualified 5-year gain’ means the aggregate long-term capital gain from property held for more than 5 years. The determination under the preceding sentence shall be made without regard to collectibles gain, gain described in paragraph (7)(A)(i), and section 1202 gain.”\nSubsec. (h)(10).  Pub. L. 108–27, §\u202f301(b)(1)(C) , redesignated par. (12) as (10). Former par. (10) redesignated (8).\nSubsec. (h)(11).  Pub. L. 108–27, §\u202f302(a) , added par. (11).\nPub. L. 108–27, §\u202f301(b)(1)(C) , redesignated par. (11) as (9).\nSubsec. (h)(12).  Pub. L. 108–27, §\u202f301(b)(1)(C) , redesignated par. (12) as (10).\nSubsec. (i)(1)(B)(i).  Pub. L. 108–27, §\u202f104(a) , substituted “($12,000 in the case of taxable years beginning after  December 31, 2004 , and before  January 1, 2008 )” for “($12,000 in the case of taxable years beginning before  January 1, 2008 )”.\nSubsec. (i)(1)(C).  Pub. L. 108–27, §\u202f104(b) , amended heading and text of subpar. (C) generally. Text read as follows: “In prescribing the tables under subsection (f) which apply with respect to taxable years beginning in calendar years after 2000—\n“(i) the Secretary shall make no adjustment to the initial bracket amount for any taxable year beginning before  January 1, 2009 ,\n“(ii) the cost-of-living adjustment used in making adjustments to the initial bracket amount for any taxable year beginning after  December 31, 2008 , shall be determined under subsection (f)(3) by substituting ‘2007’ for ‘1992’ in subparagraph (B) thereof, and\n“(iii) such adjustment shall not apply to the amount referred to in subparagraph (B)(iii).\nIf any amount after adjustment under the preceding sentence is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.”\nSubsec. (i)(2).  Pub. L. 108–27, §\u202f105(a) , amended table generally. Prior to amendment, table read as follows:\n2001—Subsec. (f).  Pub. L. 107–16, §\u202f302(b)(2) , substituted “Phaseout of marriage penalty in 15-percent bracket; adjustments” for “Adjustments” in heading.\nSubsec. (f)(2)(A).  Pub. L. 107–16, §\u202f302(b)(1) , inserted “except as provided in paragraph (8),” before “by increasing”.\nSubsec. (f)(6)(B).  Pub. L. 107–16, §\u202f301(c)(1) , substituted “(other than with respect to sections 63(c)(4) and 151(d)(4)(A)) shall be applied” for “(other than with respect to subsection (c)(4) of section 63 (as it applies to subsections (c)(5)(A) and (f) of such section) and section 151(d)(4)(A)) shall be applied”.\nSubsec. (f)(8).  Pub. L. 107–16, §\u202f302(a) , added par. (8).\nSubsec. (g)(7)(B)(ii)(II).  Pub. L. 107–16, §\u202f101(c)(1) , substituted “10 percent.” for “15 percent”.\nSubsec. (h)(1)(A)(ii)(I), (B)(i).  Pub. L. 107–16, §\u202f101(c)(2)(A) , substituted “25 percent” for “28 percent”.\nSubsec. (h)(13).  Pub. L. 107–16, §\u202f101(c)(2)(B) , struck out par. (13), which set out special rules for determination of 28-percent rate gain, unrecaptured section 1250 gain, pass-thru entities, and charitable remainder trusts.\nSubsec. (i).  Pub. L. 107–16, §\u202f101(a) , added subsec. (i).\n2000—Subsec.(h)(8).  Pub. L. 106–554  substituted “means the excess of—” and subpars. (A) and (B) for “means an amount equal to the gain excluded from gross income under section 1202(a).”\n1998—Subsec. (g)(3)(C), (D).  Pub. L. 105–206, §\u202f6007(f)(1) , redesignated subpar. (D) as (C) and struck out heading and text of former subpar. (C). Text read as follows: “If tax is imposed under section 644(a)(1) with respect to the sale or exchange of any property of which the parent was the transferor, for purposes of applying subparagraph (A) to the taxable year of the parent in which such sale or exchange occurs—\n“(i) taxable income of the parent shall be increased by the amount treated as included in gross income under section 644(a)(2)(A)(i), and\n“(ii) the amount described in subparagraph (A)(ii) shall be increased by the amount of the excess referred to in section 644(a)(2)(A).”\nSubsec. (h).  Pub. L. 105–206, §\u202f6005(d)(1) , reenacted subsec. heading without change and amended text of subsec. (h) generally, substituting present provisions comprising pars. (1) to (13) for former similar provisions comprising pars. (1) to (11).\nSubsec. (h)(5).  Pub. L. 105–206, §\u202f5001(a)(1) , amended par. (5) generally. Prior to amendment, par. (5) read as follows:\n“(5) 28- percent rate gain .—For purposes of this subsection—\n“(A)  In general .—The term ‘28-percent rate gain’ means the excess (if any) of—\n“(i) the sum of—\n“(I) the aggregate long-term capital gain from property held for more than 1 year but not more than 18 months;\n“(II) collectibles gain; and\n“(III) section 1202 gain, over\n“(ii) the sum of—\n“(I) the aggregate long-term capital loss (not described in subclause (IV)) from property referred to in clause (i)(I);\n“(II) collectibles loss;\n“(III) the net short-term capital loss; and\n“(IV) the amount of long-term capital loss carried under section 1212(b)(1)(B) to the taxable year.\n“(B)  Special rules.—\n“(i)  Short sale gains and holding periods .—Rules similar to the rules of section 1233(b) shall apply where the substantially identical property has been held more than 1 year but not more than 18 months; except that, for purposes of such rules—\n“(I) section 1233(b)(1) shall be applied by substituting ‘18 months’ for ‘1 year’ each place it appears; and\n“(II) the holding period of such property shall be treated as being 1 year on the day before the earlier of the date of the closing of the short sale or the date such property is disposed of.\n“(ii)  Long-term losses .—Section 1233(d) shall be applied separately by substituting ‘18 months’ for ‘1 year’ each place it appears.\n“(iii)  Options .—A rule similar to the rule of section 1092(f) shall apply where the stock was held for more than 18 months.\n“(iv)  Section 1256 contracts .—Amounts treated as long-term capital gain or loss under section 1256(a)(3) shall be treated as attributable to property held for more than 18 months.”\nSubsec. (h)(6)(A).  Pub. L. 105–206, §\u202f5001(a)(2) , substituted “1 year” for “18 months”.\nSubsec. (h)(7)(A)(i), (ii).  Pub. L. 105–206, §\u202f5001(a)(3) , amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) read as follows:\n“(i) the amount of long-term capital gain (not otherwise treated as ordinary income) which would be treated as ordinary income if—\n“(I) section 1250(b)(1) included all depreciation and the applicable percentage under section 1250(a) were 100 percent, and\n“(II) only gain from property held for more than 18 months were taken into account, over\n“(ii) the excess (if any) of—\n“(I) the amount described in paragraph (5)(A)(ii), over\n“(II) the amount described in paragraph (5)(A)(i).”\nSubsec. (h)(13).  Pub. L. 105–206, §\u202f5001(a)(4) , struck out “for periods during 1997” after “Special rules” in par. heading and amended headings and text of subpars. (A) and (B) generally. Prior to amendment, subpars. (A) and (B) read as follows:\n“(A)  Determination of 28-percent rate gain .—In applying paragraph (5)—\n“(i) the amount determined under subclause (I) of paragraph (5)(A)(i) shall include long-term capital gain (not otherwise described in paragraph (5)(A)(i)) which is properly taken into account for the portion of the taxable year before  May 7, 1997 ;\n“(ii) the amounts determined under subclause (I) of paragraph (5)(A)(ii) shall include long-term capital loss (not otherwise described in paragraph (5)(A)(ii)) which is properly taken into account for the portion of the taxable year before  May 7, 1997 ; and\n“(iii) clauses (i)(I) and (ii)(I) of paragraph (5)(A) shall be applied by not taking into account any gain and loss on property held for more than 1 year but not more than 18 months which is properly taken into account for the portion of the taxable year after  May 6, 1997 , and before  July 29, 1997 .\n“(B)  Other special rules.—\n“(i)  Determination of unrecaptured section 1250 gain not to include pre- may 7, 1997  gain .—The amount determined under paragraph (7)(A)(i) shall not include gain properly taken into account for the portion of the taxable year before  May 7, 1997 .\n“(ii)  Other transitional rules for 18-month holding period .—Paragraphs (6)(A) and (7)(A)(i)(II) shall be applied by substituting ‘1 year’ for ‘18 months’ with respect to gain properly taken into account for the portion of the taxable year after  May 6, 1997 , and before  July 29, 1997 .”\nSubsec. (h)(13)(B).  Pub. L. 105–277, §\u202f4002(i)(1) , substituted “paragraph (7)(A)(i)” for “paragraph (7)(A)” in introductory provisions.\nSubsec. (h)(13)(D).  Pub. L. 105–277, §\u202f4002(i)(3) , added subpar. (D).\n1997—Subsec. (h).  Pub. L. 105–34  amended heading and text of subsec. (h) generally. Prior to amendment, text read as follows: “If a taxpayer has a net capital gain for any taxable year, then the tax imposed by this section shall not exceed the sum of—\n“(1) a tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of—\n“(A) taxable income reduced by the amount of the net capital gain, or\n“(B) the amount of taxable income taxed at a rate below 28 percent, plus\n“(2) a tax of 28 percent of the amount of taxable income in excess of the amount determined under paragraph (1).\nFor purposes of the preceding sentence, the net capital gain for any taxable year shall be reduced (but not below zero) by the amount which the taxpayer elects to take into account as investment income for the taxable year under section 163(d)(4)(B)(iii).”\n1996—Subsec. (g)(7)(A)(ii).  Pub. L. 104–188, §\u202f1704(m)(1) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “such gross income is more than $500 and less than $5,000,”.\nSubsec. (g)(7)(B)(i).  Pub. L. 104–188, §\u202f1704(m)(2)(A) , substituted “twice the amount described in paragraph (4)(A)(ii)(I)” for “$1,000”.\nSubsec. (g)(7)(B)(ii)(II).  Pub. L. 104–188, §\u202f1704(m)(2)(B) , amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “for each such child, the lesser of $75 or 15 percent of the excess of the gross income of such child over $500, and”.\n1993—Subsecs. (a) to (e).  Pub. L. 103–66 , §§\u202f13201(a), 13202(a), amended subsecs. (a) to (e) generally, substituting five-tiered tax tables for all categories applicable to tax years after  December 31, 1992 , for prior three-tiered tax tables.\nSubsec. (f)(1).  Pub. L. 103–66, §\u202f13201(b)(3)(A)(i) , substituted “1993” for “1990”.\nSubsec. (f)(3)(B).  Pub. L. 103–66, §\u202f13201(b)(3)(A)(ii) , substituted “1992” for “1989”.\nSubsec. (f)(7).  Pub. L. 103–66, §\u202f13201(b)(3)(B) , added par. (7).\nSubsec. (h).  Pub. L. 103–66, §\u202f13206(d)(2) , inserted as concluding provision at end “For purposes of the preceding sentence, the net capital gain for any taxable year shall be reduced (but not below zero) by the amount which the taxpayer elects to take into account as investment income for the taxable year under section 163(d)(4)(B)(iii).”\n1990—Subsecs. (a) to (e).  Pub. L. 101–508, §\u202f11101(a) , amended subsecs. (a) to (e) generally, substituting three-tiered tax tables for all categories applicable to tax years after  Dec. 31, 1990 , for prior two-tiered tax tables.\nSubsec. (f)(1).  Pub. L. 101–508, §\u202f11101(d)(1)(A)(i) , substituted “1990” for “1988”.\nSubsec. (f)(3)(B).  Pub. L. 101–508, §\u202f11101(d)(1)(A)(ii) , substituted “1989” for “1987”.\nSubsec. (f)(6)(A).  Pub. L. 101–508, §\u202f11104(b)(1) , substituted “section 151(d)(4)” for “section 151(d)(3)”.\nPub. L. 101–508, §\u202f11103(c) , inserted reference to section 68(b)(2).\nPub. L. 101–508, §\u202f11101(b)(2) , struck out “subsection (g)(4),” after “paragraph (2)(A),”.\nSubsec. (f)(6)(B).  Pub. L. 101–508, §\u202f11104(b)(2) , substituted “section 151(d)(4)(A)” for “section 151(d)(3)”.\nSubsec. (g).  Pub. L. 101–508, §\u202f11101(d)(2) , redesignated subsec. (i) as (g).\nPub. L. 101–508, §\u202f11101(b)(1) , struck out subsec. (g) which provided for phaseout of 15-percent rate and personal exemptions.\nSubsec. (h).  Pub. L. 101–508, §\u202f11101(d)(2) , redesignated subsec. (j) as (h) and struck out former subsec. (h) which provided tax schedules for taxable years beginning in 1987.\nSubsec. (i).  Pub. L. 101–508, §\u202f11101(d)(2) , redesignated subsec. (i) as (g).\nSubsec. (j).  Pub. L. 101–508, §\u202f11101(d)(2) , redesignated subsec. (j) as (h).\nPub. L. 101–508, §\u202f11101(c) , amended subsec. (j) generally. Prior to amendment, subsec. (j) read as follows:\n“(1)  In general .—If a taxpayer has a net capital gain for any taxable year to which this subsection applies, then the tax imposed by this section shall not exceed the sum of—\n“(A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of—\n“(i) the taxable income reduced by the amount of net capital gain, or\n“(ii) the amount of taxable income taxed at a rate below 28 percent, plus\n“(B) a tax of 28 percent of the amount of taxable income in excess of the amount determined under subparagraph (A), plus\n“(C) the amount of increase determined under subsection (g).\n“(2)  Years to which subsection applies .—This subsection shall apply to—\n“(A) any taxable year beginning in 1987, and\n“(B) any taxable year beginning after 1987 if the highest rate of tax set forth in subsection (a), (b), (c), (d), or (e) (whichever applies) for such taxable year exceeds 28 percent.”\n1989—Subsec. (f)(6)(B).  Pub. L. 101–239, §\u202f7831(a) , substituted “subsection (c)(4) of section 63 (as it applies to subsections (c)(5)(A) and (f) of such section) and section 151(d)(3)” for “section 63(c)(4)”.\nSubsec. (i)(3)(C), (D).  Pub. L. 101–239, §\u202f7811(j)(1) , redesignated subpar. (C), relating to special rule where parent has different taxable year, as (D).\nSubsec. (i)(7)(A).  Pub. L. 101–239, §\u202f7816(b) , inserted “(other than for purposes of this paragraph)” after “shall be treated” in concluding provisions.\n1988—Subsec. (g)(2).  Pub. L. 100–647, §\u202f1001(a)(3) , inserted provision relating to application of subpar. (B) at end of last sentence.\nSubsec. (i)(3)(A).  Pub. L. 100–647, §\u202f1014(e)(2) , substituted “any exclusion, deduction, or credit” for “any deduction or credit”.\nSubsec. (i)(3)(C).  Pub. L. 100–647, §\u202f1014(e)(7) , added subpar. (C) relating to special rule where parent has different taxable year.\nPub. L. 100–647, §\u202f1014(e)(1) , added subpar. (C) relating to coordination with section 644.\nSubsec. (i)(4)(A)(i).  Pub. L. 100–647, §\u202f1014(e)(3)(A) , substituted “adjusted gross income” for “gross income” and inserted “attributable to” after “which is not”.\nSubsec. (i)(4)(A)(ii)(II).  Pub. L. 100–647, §\u202f1014(e)(3)(B) –(D), substituted “his deductions” for “his deduction”, “the itemized deductions allowed” for “the deductions allowed”, and “adjusted gross income” for “gross income”.\nSubsec. (i)(5)(A).  Pub. L. 100–647, §\u202f1014(e)(6) , substituted “custodial parent (within the meaning of section 152(e))” for “custodial parent”.\nSubsec. (i)(7).  Pub. L. 100–647, §\u202f6006(a) , added par. (7).\n1986—Subsecs. (a) to (e).  Pub. L. 99–514, §\u202f101(a) , in amending subsecs. (a) to (e) generally, substituted a general tax table for tax tables (1), (2), and (3) in each subsec. applicable to taxable years beginning in 1982, 1983, and after 1983, respectively.\nSubsec. (f).  Pub. L. 99–514, §\u202f101(a) , in amending subsec. (f) generally, in par. (1) substituted “1988,” for “1984” and struck out “paragraph (3) of” before “subsections”, in par. (2) struck out “paragraph (3) of” before “subsection” in introductory provisions, substituted subpars. (A) to (C) for former subpars. (A) to (C) which read as follows:\n“(A) by increasing—\n“(i) the maximum dollar amount on which no tax is imposed under such table, and\n“(ii) the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed under such table,\nby the cost-of-living adjustment for such calendar year,\n“(B) by not changing the rate applicable to any rate bracket as adjusted under subparagraph (A)(ii), and\n“(C) by adjusting the amounts setting forth the tax to the extent necessary to reflect the adjustments in the rate brackets.”,\nand struck out concluding provisions which read as follows: “If any increase determined under subparagraph (A) is not a multiple of $10, such increase shall be rounded to the nearest multiple of $10 (or if such increase is a multiple of $5, such increase shall be increased to the next highest multiple of $10).”, in par. (3)(B) substituted “1987” for “1983”, in par. (4) substituted “August 31” for “September 30”, in par. (5) inserted requirement that the Consumer Price Index most consistent with such Index for calendar year 1986 be used, and added par. (6).\nSubsecs. (g), (h).  Pub. L. 99–514, §\u202f101(a) , in amending section generally, added subsecs. (g) and (h).\nSubsec. (i).  Pub. L. 99–514, §\u202f1411(a) , added subsec. (i).\nSubsec. (j).  Pub. L. 99–514, §\u202f302(a) , added subsec. (j).\n1982—Subsecs. (d), (e).  Pub. L. 97–448, §\u202f101(a)(3) , set out as a note below, provided for amendment of the tables applying to married individuals filing separately or to estates and trusts so as to correct any figure differing by not more than 50 cents from the correct amount under the formula used in constructing such table. Corrections to the tables in subsecs. (d) and (e) appeared in Announcement 83–50 contained in Internal Revenue Bulletin No. 1983–12 of  Mar. 21, 1983 .\n1981—Subsecs. (a) to (e).  Pub. L. 97–34, §\u202f101(a) , generally revised tax tables downward providing for cumulative across-the-board reductions of 23 percent on a three phase schedule under which different new rates were set for taxable years beginning in 1982, for taxable years beginning in 1983, and for taxable years beginning after 1983.\nSubsec. (f).  Pub. L. 97–34, §\u202f104(a) , added subsec. (f).\n1978—Subsec. (a).  Pub. L. 95–600  generally made a downward revision of tax table for married individuals filing joint returns and surviving spouses resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $3,400 or less was substituted for a bottom bracket imposing no tax on taxable income of $3,200 or less.\nSubsec. (b).  Pub. L. 95–600  generally made a downward revision of tax table for heads of household resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $2,300 or less was substituted for a bottom bracket imposing no tax on taxable income of $2,200 or less.\nSubsec. (c).  Pub. L. 95–600  generally made a downward revision of tax table for unmarried individuals other than surviving spouses and heads of households resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $2,300 or less was substituted for a bottom bracket imposing no tax on taxable income of $2,200 or less.\nSubsec. (d).  Pub. L. 95–600  generally made a downward revision of tax tables for married individuals filing separate returns resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $1,700 or less was substituted for a bottom bracket imposing no tax on taxable income of $1,600 or less.\nSubsec. (e).  Pub. L. 95–600  generally made a downward revision of tax tables for estates and trusts resulting in a table under which, among other changes, a bottom bracket under which a tax of 14% is imposed on taxable income of $1,050 for a bottom bracket under which a tax of 14% was imposed on taxable income of $500 or less.\n1977—Subsec. (a).  Pub. L. 95–30  generally made a downward revision of tax table for married individuals filing joint returns and surviving spouses resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $3,200 or less was substituted for a bottom bracket under which a tax of 14% had been imposed on a taxable income of $1,000 or less.\nSubsec. (b).  Pub. L. 95–30  generally made a downward revision of tax table for heads of households resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $2,200 or less was substituted for a bottom bracket under which a tax of 14% had been imposed on a taxable income of $1,000 or less.\nSubsec. (c).  Pub. L. 95–30  generally made a downward revision of tax table for unmarried individuals other than surviving spouses and heads of households resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $2,200 or less was substituted for a bottom bracket under which a tax of 14% had been imposed on a taxable income of $500 or less.\nSubsec. (d).  Pub. L. 95–30  generally made a downward revision of tax table for married individuals filing separate returns resulting in a table under which, among other changes, a bottom bracket imposing no tax on taxable income of $1,600 or less was substituted for a bottom bracket under which a tax of 14% had been imposed on a taxable income of $500 or less. Provisions making table applicable to estates and trusts were struck out. See subsec. (e).\nSubsec. (e).  Pub. L. 95–30  added subsec. (e) consisting of table formerly contained in subsec. (d) but without any downward revision and limited so as to apply only to estates and trusts.\n1969—Subsec. (a).  Pub. L. 91–172  substituted a table of rates of tax for married individuals filing joint returns and surviving spouses for the tables of rates of tax on individuals. For rates of taxes on unmarried individuals and married persons filing separate returns, see subsecs. (c) and (d) of this section.\nSubsec. (b).  Pub. L. 91–172  generally revised rates of tax of heads of household downwards and struck out provisions defining head of household, determination of status, and limitations. For definition of head of household, determination of status, and limitations, see  section 2(b) of this title .\nSubsec. (c).  Pub. L. 91–172  substituted rates of tax on unmarried individuals (other than surviving spouses and heads of household) for special rules explaining the rates of tax imposed under former subsecs. (a) and (b)(1) and prescribing a maximum limit of 87 percent of the taxable year.\nSubsec. (d).  Pub. L. 91–172  substituted a table of rates of tax for married individuals filing separate returns for provision prescribing the applicability of the rates to non-resident aliens. For applicability of rates of tax to non-resident aliens, see  section 2(d) of this title .\nSubsec. (e).  Pub. L. 91–172  struck out cross reference to section 63. See  section 2(e) of this title .\n1966—Subsecs. (d), (e).  Pub. L. 89–809  added subsec. (d) and redesignated former subsec. (d) as (e).\n1964— Pub. L. 88–272  amended section generally by splitting the former first bracket which started at $2,000 into four new brackets, the 14 percent bracket representing a 30 percent reduction, the 15 percent bracket a 25 percent cut, and the 16 percent bracket a 20 percent cut, and reducing all other brackets by cuts averaging about 20 percent and effectuated these cuts in two steps, one in 1964, and one in 1965.\nPub. L. 116–94, div. O, title V, §\u202f501(c) ,  Dec. 20, 2019 ,  133 Stat. 3181 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2019 . \n \n “(2)   Coordination with alternative minimum tax .— The amendment made by subsection (b) [amending  section 55 of this title ] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(3)   Elective retroactive application .— A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide) for the amendment made by subsection (a) to also apply to taxable years of the taxpayer which begin in 2018, 2019, or both (as specified by the taxpayer in such election).”\nPub. L. 115–97, title I, §\u202f11001(c) ,  Dec. 22, 2017 ,  131 Stat. 2059 , provided that:  “The amendments made by this section [amending this section and  section 6695 of this title ] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f11002(e) ,  Dec. 22, 2017 ,  131 Stat. 2063 , provided that:  “The amendments made by this section [amending this section and sections 23, 25A, 25B, 32, 36B, 41, 42, 45R, 55, 59, 62, 63, 68, 125, 132, 135, 137, 146, 147, 151, 162, 179, 213, 219–221, 223, 280F, 408A, 430, 512, 513, 831, 877A, 911, 1274A, 2010, 2032A, 2503, 4161, 4261, 4980I, 5000A, 6039F, 6323, 6334, 6601, 6651, 6652, 6695, 6698, 6699, 6721, 6722, 7345, 7430, 7872, and 9831 of this title] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f14223(b) ,  Dec. 22, 2017 ,  131 Stat. 2221 , provided that:  “The amendments made by this section [amending this section] shall apply to dividends received after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nPub. L. 113–295, div. A, title II, §\u202f221(b) ,  Dec. 19, 2014 ,  128 Stat. 4055 , provided that: \n “(1)   General rule .— Except as otherwise provided in subsection (a) [see Tables for classification] or paragraph (2) of this subsection, the amendments made by this section [see Tables for classification] shall take effect on the date of enactment of this Act [ Dec. 19, 2014 ]. \n \n “(2)   Savings provision .— If— “(A)  any provision amended or repealed by the amendments made by this section applied to— “(i)  any transaction occurring before the date of the enactment of this Act, \n \n “(ii)  any property acquired before such date of enactment, or \n \n “(iii)  any item of income, loss, deduction, or credit taken into account before such date of enactment, and \n \n \n “(B)  the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after [such] date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”\nPub. L. 112–240, title I, §\u202f101(b)(3) ,  Jan. 2, 2013 ,  126 Stat. 2317 , provided that:  “The amendments made by this subsection [amending this section and sections 68 and 151 of this title] shall apply to taxable years beginning after  December 31, 2012 .”\nPub. L. 112–240, title I, §\u202f102(d) ,  Jan. 2, 2013 ,  126 Stat. 2319 , provided that: \n “(1)   In general .— Except as otherwise provided, the amendments made by subsections (b) and (c) [amending this section, sections 55, 531, 541, 1445, and 7518 of this title, and  section 53511 of Title 46 , Shipping] shall apply to taxable years beginning after  December 31, 2012 . \n \n “(2)   Withholding .— The amendments made by paragraphs (1)(C) and (3) of subsection (c) [amending  section 1445 of this title ] shall apply to amounts paid on or after  January 1, 2013 .”\nPub. L. 111–148, title X, §\u202f10909(c) ,  Mar. 23, 2010 ,  124 Stat. 1023 , as amended by  Pub. L. 111–312, title I, §\u202f101(b)(1) ,  Dec. 17, 2010 ,  124 Stat. 3298 , provided that:  “Each provision of law amended by this section [amending sections 23, 24, 25, 25A, 25B, 26, 30, 30B, 30D, 36C, 137, 904, 1016, 1400C, and 6211 of this title and  section 1324 of Title 31 , Money and Finance, and renumbering  section 23 of this title  as  section 36C of this title ] is amended to read as such provision would read if this section had never been enacted. The amendments made by the preceding sentence shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–148, title X, §\u202f10909(d) ,  Mar. 23, 2010 ,  124 Stat. 1024 , as amended by  Pub. L. 111–312, title I, §\u202f101(b)(2) ,  Dec. 17, 2010 ,  124 Stat. 3298 , provided that:  “Except as provided in subsection (c) [set out as a note above], the amendments made by this section [amending sections 24, 25, 25A, 25B, 26, 30, 30B, 30D, 36C, 137, 904, 1016, 1400C, and 6211 of this title and  section 1324 of Title 31 , Money and Finance, and renumbering  section 23 of this title  as  section 36C of this title ] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 110–28, title VIII, §\u202f8241(c) ,  May 25, 2007 ,  121 Stat. 199 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ May 25, 2007 ].”\nPub. L. 109–222, title V, §\u202f510(d) ,  May 17, 2006 ,  120 Stat. 364 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 108–357, title IV, §\u202f413(d) ,  Oct. 22, 2004 ,  118 Stat. 1510 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 170, 171, 245, 312, 443, 465, 508, 542, 543, 562, 563, 751, 864, 898, 904, 951, 954, 989, 1014, 1016, 1212, 1223, 1248, 1260, 1291, 1294, 4947, 4948, 6103, 6501, and 6679 of this title and repealing sections 551 to 558, 1246, 1247, and 6035 of this title] shall apply to taxable years of foreign corporations beginning after  December 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end. \n \n “(2)   Subsection (c)(27) .— The amendments made by subsection (c)(27) [amending  section 6103 of this title ] shall apply to disclosures of return or return information with respect to taxable years beginning after  December 31, 2004 .”\nPub. L. 108–311, title I, §\u202f101(e) ,  Oct. 4, 2004 ,  118 Stat. 1168 , provided that:  “The amendments made by this section [amending this section and sections 24 and 63 of this title] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 108–311, title I, §\u202f105 ,  Oct. 4, 2004 ,  118 Stat. 1169 , provided that:  “Each amendment made by this title [amending this section and sections 24, 32, 55, and 63 of this title] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note below] to the same extent and in the same manner as the provision of such Act to which such amendment relates.”\nPub. L. 108–311, title IV, §\u202f402(b) ,  Oct. 4, 2004 ,  118 Stat. 1186 , provided that:  “The amendments made by subsection (a) [amending this section and sections 691, 854, and 857 of this title and provisions set out as a note under this section] shall take effect as if included in section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 [ Pub. L. 108–27 ].”\nPub. L. 108–27, title I, §\u202f102(c) ,  May 28, 2003 ,  117 Stat. 754 , provided that:  “The amendments made by this section [amending this section and provisions set out as a note under this section] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 108–27, title I, §\u202f104(c) ,  May 28, 2003 ,  117 Stat. 755 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 . \n \n “(2)   Tables for 2003 .— The Secretary of the Treasury shall modify each table which has been prescribed under section 1(f) of the Internal Revenue Code of 1986 for taxable years beginning in 2003 and which relates to the amendment made by subsection (a) to reflect such amendment.”\nPub. L. 108–27, title I, §\u202f105(b) ,  May 28, 2003 ,  117 Stat. 755 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 108–27, title I, §\u202f107 ,  May 28, 2003 ,  117 Stat. 755 , provided that:  “Each amendment made by this title [enacting  section 6429 of this title , amending this section and sections 24, 55, and 63 of this title, and amending provisions set out as notes under this section] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note below] to the same extent and in the same manner as the provision of such Act to which such amendment relates.”\nPub. L. 108–27, title III, §\u202f301(d) ,  May 28, 2003 ,  117 Stat. 760 , provided that: \n “(1)   In general .— Except as otherwise provided by this subsection, the amendments made by this section [amending this section, sections 55, 57, 1445, and 7518 of this title, and  section 1177 of Title 46 , Appendix, Shipping] shall apply to taxable years ending on or after  May 6, 2003 . \n \n “(2)   Withholding .— The amendment made by subsection (a)(2)(C) [amending  section 1445 of this title ] shall apply to amounts paid after the date of the enactment of this Act [ May 28, 2003 ]. \n \n “(3)   Small business stock .— The amendments made by subsection (b)(3) [amending  section 57 of this title ] shall apply to dispositions on or after  May 6, 2003 .”\nPub. L. 108–27, title III, §\u202f302(f) ,  May 28, 2003 ,  117 Stat. 764 , as amended by  Pub. L. 108–311, title IV, §\u202f402(a)(6) ,  Oct. 4, 2004 ,  118 Stat. 1185 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 163, 301, 306, 338, 467, 531, 541, 584, 702, 854, 857, 1255, and 1257 of this title and repealing  section 341 of this title ] shall apply to taxable years beginning after  December 31, 2002 . \n \n “(2)   Pass-thru entities .— In the case of a pass-thru entity described in subparagraph (A), (B), (C), (D), (E), or (F) of section 1(h)(10) of the Internal Revenue Code of 1986, as amended by this Act, the amendments made by this section shall apply to taxable years ending after  December 31, 2002 ; except that dividends received by such an entity on or before such date shall not be treated as qualified dividend income (as defined in section 1(h)(11)(B) of such Code, as added by this Act).”\nPub. L. 108–27, title III, §\u202f303 ,  May 28, 2003 ,  117 Stat. 764 , as amended by  Pub. L. 109–222, title I, §\u202f102 ,  May 17, 2006 ,  120 Stat. 346 ;  Pub. L. 111–312, title I, §\u202f102(a) ,  Dec. 17, 2010 ,  124 Stat. 3298 , which provided that all provisions of, and amendments made by, title III of  Pub. L. 108–27  would not apply to taxable years beginning after  Dec. 31, 2012 , and that the Internal Revenue Code of 1986 would be applied and administered to such years as if such provisions and amendments had never been enacted, was repealed by  Pub. L. 112–240, title I, §\u202f102(a) ,  Jan. 2, 2013 ,  126 Stat. 2318 .\nPub. L. 111–312, title II, §\u202f201(c) ,  Dec. 17, 2010 ,  124 Stat. 3299 , provided that:  “Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , formerly set out below] (relating to sunset of provisions of such Act) shall not apply to title VII of such Act [ Pub. L. 107–16, §\u202f701 , amending  section 55 of this title  and enacting provisions set out as a note under  section 55 of this title ] (relating to alternative minimum tax).”\nPub. L. 109–280, title VIII, §\u202f811 ,  Aug. 17, 2006 ,  120 Stat. 996 , provided that:  “Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , formerly set out below] shall not apply to the provisions of, and amendments made by, subtitles A through F of title VI of such Act [subtitles A to F [§§\u202f601–666] of title VI of  Pub. L. 107–16 , enacting sections 25B, 45E, 402A, and 4980F of this title, amending sections 24, 25, 25B, 26, 38, 39, 72, 132, 196, 219, 401, 402, 403, 404, 408, 408A, 409, 411, 412, 414 to 416, 457, 501, 505, 664, 861, 904, 1400C, 3401, 3405, 4972, 4973, 4975, 4979A, 6047, and 6051 of this title and sections 1003, 1053, 1054, 1082, 1104, and 1108 of Title 29, Labor, enacting provisions set out as notes under sections 24, 38, 72, 132, 219, 401, 402, 403, 404, 408, 409, 411, 412, 414 to 416, 457, 861, 4972, 4975, 4980F, and 7801 of this title and  section 1107 of Title 29 , and amending provisions set out as notes under  section 414 of this title  and  section 1107 of Title 29 ] (relating to pension and individual retirement arrangement provisions).”\nPub. L. 109–280, title XIII, §\u202f1304(a) ,  Aug. 17, 2006 ,  120 Stat. 1109 , provided that:  “Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 , formerly set out below] (relating to sunset provisions) shall not apply to section 402 of such Act [amending sections 72, 135, 221, 529, 530, 4973, and 6693 of this title and enacting provisions set out as a note under  section 72 of this title ] (relating to modifications to qualified tuition programs).”\nPub. L. 107–16, title I, §\u202f101(d) ,  June 7, 2001 ,  115 Stat. 44 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 6428 of this title  and amending this section and sections 15, 531, 541, 3402, and 3406 of this title] shall apply to taxable years beginning after  December 31, 2000 . \n \n “(2)   Amendments to withholding provisions .— The amendments made by paragraphs (6), (7), (8), (9), (10), and (11) of subsection (c) [amending sections 3402 and 3406 of this title] shall apply to amounts paid after the 60th day after the date of the enactment of this Act [ June 7, 2001 ]. References to income brackets and rates of tax in such paragraphs shall be applied without regard to [former] section 1(i)(1)(D) of the Internal Revenue Code of 1986.”\nPub. L. 107–16, title III, §\u202f301(d) ,  June 7, 2001 ,  115 Stat. 54 , as amended by  Pub. L. 108–27, title I, §\u202f103(b) ,  May 28, 2003 ,  117 Stat. 754 , provided that:  “The amendments made by this section [amending this section and  section 63 of this title ] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 107–16, title III, §\u202f302(c) ,  June 7, 2001 ,  115 Stat. 54 , as amended by  Pub. L. 108–27, title I, §\u202f102(b)(2) ,  May 28, 2003 ,  117 Stat. 754 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 107–16, title IX, §\u202f901 ,  June 7, 2001 ,  115 Stat. 150 , as amended by  Pub. L. 107–358, §\u202f2 ,  Dec. 17, 2002 ,  116 Stat. 3015 ;  Pub. L. 111–312, title I, §\u202f101(a)(1) ,  Dec. 17, 2010 ,  124 Stat. 3298 , which provided that all provisions of, and amendments made by,  Pub. L. 107–16  (except for section 803 thereof (26 U.S.C. note prec. 101)) would not apply to taxable, plan, or limitation years beginning after  Dec. 31, 2012 , or, in the case of title V of  Pub. L. 107–16 , to estates of decedents dying, gifts made, or generation skipping transfers, after  Dec. 31, 2012 , and that the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001  et seq.) would be applied and administered to such years, estates, gifts, and transfers as if such provisions and amendments had never been enacted, was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\n[ Pub. L. 112–240, title I, §\u202f101(a)(3) ,  Jan. 2, 2013 ,  126 Stat. 2316 , provided that:  “The amendments made by this subsection [repealing  section 901 of Pub. L. 107–16 , formerly set out above, and provisions set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title ] shall apply to taxable, plan, or limitation years beginning after  December 31, 2012 , and estates of decedents dying, gifts made, or generation skipping transfers after  December 31, 2012 .” \n]\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f117(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–605, provided that:  “The amendments made by this section [amending this section and  section 1202 of this title ] shall apply to stock acquired after the date of the enactment of this Act [ Dec. 21, 2000 ].”\nPub. L. 105–277, div. J, title IV, §\u202f4002(k) ,  Oct. 21, 1998 ,  112 Stat. 2681–908 , provided that:  “The amendments made by this section [amending this section and sections 408A, 6015, 6103, 6159, 7421, 7443A, and 7491 of this title and amending provisions set out as a note under  section 6601 of this title ] shall take effect as if included in the provisions of the 1998 Act [ Pub. L. 105–206 ] to which they relate.”\nPub. L. 105–206, title V, §\u202f5001(b) ,  July 22, 1998 ,  112 Stat. 788 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1223 and 1235 of this title] shall apply to taxable years ending after  December 31, 1997 . \n \n “(2)   Subsection ( a)( 5) .— The amendments made by subsection (a)(5) [amending sections 1223 and 1235 of this title] shall take effect on  January 1, 1998 .”\nPub. L. 105–206, title VI, §\u202f6024 ,  July 22, 1998 ,  112 Stat. 826 , provided that:  “Except as otherwise provided in this title [see Tables for classification], the amendments made by this title shall take effect as if included in the provisions of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ] to which they relate.”\nPub. L. 105–34, title III, §\u202f311(d) ,  Aug. 5, 1997 ,  111 Stat. 835 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section, sections 55, 57, 904, 1445, and 7518 of this title, and  section 1177 of Title 46 , Appendix, Shipping] shall apply to taxable years ending after  May 6, 1997 . \n \n “(2)   Withholding .— The amendment made by subsection (c)(1) [amending  section 1445 of this title ] shall apply only to amounts paid after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–188, title I, §\u202f1704(m)(4) ,  Aug. 20, 1996 ,  110 Stat. 1883 , provided that:  “The amendments made by this subsection [amending this section and  section 59 of this title ] shall apply to taxable years beginning after  December 31, 1995 .”\nPub. L. 103–66, title XIII, §\u202f13201(c) ,  Aug. 10, 1993 ,  107 Stat. 459 , provided that:  “The amendments made by this section [amending this section and sections 41, 63, 68, 132, 151, 453A, 513, 531, and 541 of this title] shall apply to taxable years beginning after  December 31, 1992 .”\nPub. L. 103–66, title XIII, §\u202f13202(c) ,  Aug. 10, 1993 ,  107 Stat. 461 , provided that:  “The amendments made by this section [amending this section and sections 531 and 541 of this title] shall apply to taxable years beginning after  December 31, 1992 .”\nPub. L. 103–66, title XIII, §\u202f13206(d)(3) ,  Aug. 10, 1993 ,  107 Stat. 467 , provided that:  “The amendments made by this subsection [amending this section and  section 163 of this title ] shall apply to taxable years beginning after  December 31, 1992 .”\nPub. L. 101–508, title XI, §\u202f11101(e) ,  Nov. 5, 1990 ,  104 Stat. 1388–405 , provided that:  “The amendments made by this section [amending this section, sections 32, 41, 59, 63, 135, 151, 513, 691, 904, 6103, and 7518 of this title, and  section 1177 of Title 46 , Appendix, Shipping] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 101–508, title XI, §\u202f11103(e) ,  Nov. 5, 1990 ,  104 Stat. 1388–407 , provided that:  “The amendments made by this section [enacting  section 68 of this title  and amending this section and  section 56 of this title ] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 101–508, title XI, §\u202f11104(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–408 , provided that:  “The amendments made by this section [amending this section and  section 151 of this title ] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 101–239, title VII, §\u202f7817 ,  Dec. 19, 1989 ,  103 Stat. 2423 , provided that:  “Except as otherwise provided in this part [part I (§§\u202f7811–7817) of subtitle H of title VII of  Pub. L. 101–239 , see Tables for classification], any amendment made by this part shall take effect as if included in the provision of the 1988 Act [ Pub. L. 100–647 ] to which such amendment relates.”\nPub. L. 101–239, title VII, §\u202f7831(g) ,  Dec. 19, 1989 ,  103 Stat. 2427 , provided that:  “Any amendment made by this section [amending this section and sections 42, 406, 407, and 1250 of this title and provisions set out as notes under sections 141 and 263A of this title] shall take effect as if included in the provision of the Tax Reform Act of 1986 [ Pub. L. 99–514 ] to which such amendment relates.”\nPub. L. 100–647, title I, §\u202f1019 ,  Nov. 10, 1988 ,  102 Stat. 3593 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this title, any amendment made by this title [see Tables for classification], shall take effect as if included in the provision of the Reform Act [ Pub. L. 99–514 ] to which such amendment relates. \n \n “(b)   Waiver of Estimated Tax Penalties .— No addition to tax shall be made under section 6654 or 6655 of the 1986 Code for any period before  April 16, 1989  ( March 16, 1989  in the case of a taxpayer subject to section 6655 of the 1986 Code) with respect to any underpayment to the extent such underpayment was created or increased by any provision of this title or title II [see Tables for classification].”\nPub. L. 100–647, title VI, §\u202f6006(b) ,  Nov. 10, 1988 ,  102 Stat. 3687 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”\nPub. L. 99–514, title I, §\u202f151 ,  Oct. 22, 1986 ,  100 Stat. 2121 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this title [enacting  section 67 of this title , amending this section, sections 3, 5, 15, 21, 32, 62, 63, 74, 85, 86, 102, 108, 117, 129, 151, 152, 164, 170, 172, 183, 213, 265, 274, 280A, 402, 441, 443, 527, 541, 613A, 642, 667, 861, 862, 901, 904, 1398, 1441, 2032A, 3121, 3231, 3306, 3401, 3402, 3507, 4941, 4945, 6012 to 6014, 6212, 6504, 6511, and 7871 of this title, and  section 409 of Title 42 , The Public Health and Welfare, renumbering  section 223 of this title  as  section 220 of this title , repealing sections 24, 221, 222, and 1301 to 1305 of this title, and enacting provisions set out as a note under  section 32 of this title ] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(b)   Unemployment Compensation .— The amendment made by section 121 [amending  section 85 of this title ] shall apply to amounts received after  December 31, 1986 , in taxable years ending after such date. \n \n “(c)   Prizes and Awards .— The amendments made by section 122 [amending sections 74, 102, 274, 3121, 3231, 3306, 3401, 4941, and 4945 of this title and  section 409 of Title 42 , The Public Health and Welfare] shall apply to prizes and awards granted after  December 31, 1986 . \n \n “(d)   Scholarships .— The amendments made by section 123 [amending sections 74, 117, 1441, and 7871 of this title] shall apply to taxable years beginning after  December 31, 1986 , but only in the case of scholarships and fellowships granted after  August 16, 1986 . \n \n “(e)   Parsonage and Military Housing Allowances .— The amendment made by section 144 [amending  section 265 of this title ] shall apply to taxable years beginning before, on, or after,  December 31, 1986 .”\nPub. L. 99–514, title III, §\u202f302(b) ,  Oct. 22, 1986 ,  100 Stat. 2218 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title XIV, §\u202f1411(c) ,  Oct. 22, 1986 ,  100 Stat. 2716 , provided that:  “The amendments made by this section [amending this section and  section 6103 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 97–448, title I, §\u202f109 ,  Jan. 12, 1983 ,  96 Stat. 2391 , provided that:  “Except as otherwise provided in this title, any amendment made by this title [see Tables for classification] shall take effect as if it had been included in the provision of the Economic Recovery Tax Act of 1981 [ Pub. L. 97–34 ,  Aug. 13, 1981 ,  95 Stat. 172 ] to which such amendment relates.”\nPub. L. 97–34, title I, §\u202f101(f)(1) ,  Aug. 13, 1981 ,  95 Stat. 185 , as amended by  Pub. L. 97–448, title I, §\u202f101(a)(1) ,  Jan. 12, 1983 ,  96 Stat. 2365 , provided that:  “The amendments made by subsections (a), (c), and (d) [amending this section and sections 3, 21, 55, 541, and 1304 of this title and repealing  section 1348 of this title ] shall apply to taxable years beginning after  December 31, 1981 ; except that the amendment made by paragraph (3) of subsection (d) [amending  section 21 of this title ] shall apply to taxable years ending after  December 31, 1981 .”\nPub. L. 97–34, title I, §\u202f104(e) ,  Aug. 13, 1981 ,  95 Stat. 190 , provided that:  “The amendments made by this section [amending this section and sections 63, 151, 6012, and 6013 of this title] shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 95–600, title I, §\u202f101(f)(1) ,  Nov. 6, 1978 ,  92 Stat. 2770 , provided that:  “The amendments made by subsections (a), (b), (c), and (d) [amending sections 63, 402, 1302, and 6012 of this title] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 95–30, title I, §\u202f106(a) ,  May 23, 1977 ,  91 Stat. 141 , provided that:  “The amendments made by sections 101, 102, and 104 [amending this section and sections 3, 21, 42, 57, 63, 143, 161, 172, 211, 402, 441, 443, 511, 584, 613A, 641, 642, 667, 703, 861, 862, 873, 904, 911, 931, 1034, 1211, 1302, 6012, 6014, 6212, 6504, and 6654 of this title and repealing sections 36, 141, 142, 144, and 145 of this title] shall apply to taxable years beginning after  December 31, 1976 .”\nPub. L. 91–172, title VIII, §\u202f803(f) ,  Dec. 30, 1969 ,  83 Stat. 685 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a) [amending this section], (b) [amending  section 2 of this title ], and (d) (other than paragraphs (1) and (8)) [amending sections 5, 511, 632, 641, 1347, and 6015 of this title] shall apply to taxable years beginning after  December 31, 1970 , except that section 2(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [ section 2(c) of this title ], as amended by subsection (b), shall also apply to taxable years beginning after  December 31, 1969 . The amendments made by subsections (c) [amending  section 3 of this title ], (d)(1) [amending  section 6014 of this title ], and (d)(8) [amending  section 1304 of this title ] shall apply to taxable years beginning after  December 31, 1969 ”.\nPub. L. 89–809, title I, §\u202f103(n) ,  Nov. 13, 1966 ,  80 Stat. 1555 , provided that: \n “(1)  The amendments made by this section (other than the amendments made by subsections (h), (i), and (k)) [enacting  section 877 of this title , amending this section and sections 116, 154, 871, 872, 873, 874, 875, 932, 6015, and 7701 of this title, renumbering section 877 as 878, and repealing  section 1493 of this title ] shall apply with respect to taxable years beginning after  December 31, 1966 . \n \n “(2)  The amendments made by subsection (h) [amending  section 1441 of this title ] shall apply with respect to payments made in taxable years of recipients beginning after  December 31, 1966 . \n \n “(3)  The amendments made by subsection (i) [amending  section 1461 of this title ] shall apply with respect to payments occurring after  December 31, 1966 . \n \n “(4)  The amendments made by subsection (k) [amending  section 3401 of this title ] shall apply with respect to remuneration paid after  December 31, 1966 .”\nPub. L. 88–272, title I, §\u202f131 ,  Feb. 26, 1964 ,  78 Stat. 30 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Except for purposes of section 21 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to effect of changes in rates during a taxable year), the amendments made by parts I and II of this title [amending this section and sections 2, 11, 37, 141, 144, 242, 821, 871, 963, 6016, 6074, 6154, 6212, 6504, and 6655 of this title] shall apply with respect to taxable years beginning after  December 31, 1963 .”\nPub. L. 118–168, §\u202f1 ,  Dec. 23, 2024 ,  138 Stat. 2586 , provided that:  “This Act [amending sections 4980H, 6055, 6056, and 6501 of this title and enacting provisions set out as notes under sections 4980H, 6055, and 6501 of this title] may be cited as the ‘Employer Reporting Improvement Act’.”\nPub. L. 118–167, §\u202f1 ,  Dec. 23, 2024 ,  138 Stat. 2584 , provided that:  “This Act [amending sections 6055 and 6056 of this title and enacting provisions set out as a note under  section 6055 of this title ] may be cited as the ‘Paperwork Burden Reduction Act’.”\nPub. L. 118–146, §\u202f1 ,  Dec. 12, 2024 ,  138 Stat. 1673 , provided that:  “This Act [amending  section 170 of this title ] may be cited as the ‘VSO Equal Tax Treatment Act’ or as the ‘VETT Act’.”\nPub. L. 118–60, §\u202f1 ,  May 10, 2024 ,  138 Stat. 1018 , provided that:  “This Act [amending  section 9502 of this title ] may be cited as the ‘Airport and Airway Extension Act of 2024, Part II’.”\nPub. L. 118–41, §\u202f1 ,  Mar. 8, 2024 ,  138 Stat. 20 , provided that:  “This Act [amending sections 4043, 4081, 4083, 4261, 4271, and 9502 of this title,  section 124n of Title 6 , Domestic Security, sections 106, 41742, 41743, 44310, 44803, 44807, 44810, 47104, 47107, 47114, 47115, 47141, 47143, 48101 to 48103, and 48105 of Title 49, Transportation, and  section 50905 of Title 51 , National and Commercial Space Programs, and amending provisions set out as a note preceding  section 42301 of Title 49  and provisions set out as notes under sections 40103, 41705, 41731, 42302, 44810, 47102, 47104, and 47141 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2024’.”\nPub. L. 118–34, §\u202f1(a) ,  Dec. 26, 2023 ,  137 Stat. 1112 , provided that:  “This Act [amending sections 4043, 4081, 4083, 4261, 4271, and 9502 of this title, sections 106, 41742, 41743, 44310, 44803, 44807, 44810, 47104, 47107, 47114, 47115, 47141, 47143, 48101 to 48103, and 48105 of Title 49, Transportation, and  section 50905 of Title 51 , National and Commercial Space Programs, and amending provisions set out as a note preceding  section 42301 of Title 49  and provisions set out as notes under sections 40103, 41705, 41731, 42302, 44810, 47102, 47104, and 47141 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2023, Part II’.”\nPub. L. 117–328, div. T, §\u202f1(a) ,  Dec. 29, 2022 ,  136 Stat. 5275 , provided that:  “This division [see Tables for classification] may be cited as the ‘SECURE 2.0 Act of 2022’.”\nPub. L. 116–260, div. N, title II, §\u202f271(a) ,  Dec. 27, 2020 ,  134 Stat. 1964 , provided that:  “This subtitle [subtitle B (§§\u202f271–288) of title II of div. N of  Pub. L. 116–260 , see Tables for classification] may be cited as the ‘COVID-related Tax Relief Act of 2020’.”\nPub. L. 116–260, div. EE, §\u202f1(a) ,  Dec. 27, 2020 ,  134 Stat. 3038 , provided that:  “This division [see Tables for classification] may be cited as the ‘Taxpayer Certainty and Disaster Tax Relief Act of 2020’.”\nPub. L. 116–94, div. O, §\u202f1(a) ,  Dec. 20, 2019 ,  133 Stat. 3137 , provided that:  “This Act [div. O of  Pub. L. 116–94 , see Tables for classification] may be cited as the ‘Setting Every Community Up for Retirement Enhancement Act of 2019’.”\nPub. L. 116–94, div. P, title XIII, §\u202f1301 ,  Dec. 20, 2019 ,  133 Stat. 3204 , provided that:  “This title [amending  section 4975 of this title  and  section 1108 of Title 29 , Labor, and enacting provisions set out as a note under  section 4975 of this title ] may be cited as the ‘Temporary Relief from Certain ERISA Requirements Act of 2020’.”\nPub. L. 116–94, div. Q, §\u202f1(a) ,  Dec. 20, 2019 ,  133 Stat. 3226 , provided that:  “This division [see Tables for classification] may be cited as the ‘Taxpayer Certainty and Disaster Tax Relief Act of 2019’.”\nPub. L. 116–25, §\u202f1(a) ,  July 1, 2019 ,  133 Stat. 981 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Taxpayer First Act’.”\nPub. L. 115–250, §\u202f1 ,  Sept. 29, 2018 ,  132 Stat. 3164 , provided that:  “This Act [amending  section 9502 of this title ] may be cited as the ‘Airport and Airway Extension Act of 2018, Part II’.”\nPub. L. 115–141, div. M, title I, §\u202f1 ,  Mar. 23, 2018 ,  132 Stat. 1046 , provided that:  “This title [amending sections 4081, 4083, 4261, 4271, and 9502 of this title and sections 106, 41742, 41743, 44506, 47104, 47107, 47115, 47124, 47141, and 48101 to 48103 of Title 49, Transportation, and amending provisions set out as a note preceding  section 42301 of Title 49  and provisions set out as notes under sections 41731 and 47141 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2018’.”\nPub. L. 115–141, div. U, §\u202f1(a) ,  Mar. 23, 2018 ,  132 Stat. 1159 , provided that:  “This division [see Tables for classification] may be cited as the ‘Tax Technical Corrections Act of 2018’.”\nPub. L. 115–63, §\u202f1(a) ,  Sept. 29, 2017 ,  131 Stat. 1168 , provided that:  “This Act [amending sections 4081, 4083, 4261, 4271, and 9502 of this title, sections 254c–3, 256h, 256i, and 1395iii of Title 42, The Public Health and Welfare, and sections 106, 41742, 41743, 47104, 47107, 47114, 47115, 47124, 47141, 48101 to 48103, and 48114 of Title 49, Transportation, and amending provisions set out as a note under section 1395 l  of Title 42, provisions set out as a note preceding  section 42301 of Title 49 , and provisions set out as notes under sections 41731 and 47141 of Title 49] may be cited as the ‘Disaster Tax Relief and Airport and Airway Extension Act of 2017’.”\nPub. L. 114–239, §\u202f1 ,  Oct. 7, 2016 ,  130 Stat. 973 , provided that:  “This Act [amending  section 74 of this title  and enacting provisions set out as a note under  section 74 of this title ] may be cited as the ‘United States Appreciation for Olympians and Paralympians Act of 2016’.”\nPub. L. 114–184, §\u202f1 ,  June 30, 2016 ,  130 Stat. 536 , provided that:  “This Act [amending sections 6103 and 7213 of this title and enacting provisions set out as a note under  section 6103 of this title ] may be cited as the ‘Recovering Missing Children Act’.”\nPub. L. 114–141, §\u202f1(a) ,  Mar. 30, 2016 ,  130 Stat. 322 , provided that:  “This Act [amending sections 4081, 4083, 4261, 4271, and 9502 of this title and sections 106, 41742, 47104, 47107, 47115, 47124, 47141, and 48101 to 48103 of Title 49, Transportation, and amending provisions set out as a note preceding  section 42301 of Title 49  and provisions set out as notes under sections 41731 and 47141 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2016’.”\nPub. L. 114–113, div. Q, §\u202f1(a) ,  Dec. 18, 2015 ,  129 Stat. 3040 , provided that:  “This division [see Tables for classification] may be cited as the ‘Protecting Americans from Tax Hikes Act of 2015’.”\nPub. L. 114–74, §\u202f1(a) ,  Nov. 2, 2015 ,  129 Stat. 584 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Bipartisan Budget Act of 2015’.”\nPub. L. 114–55, §\u202f1(a) ,  Sept. 30, 2015 ,  129 Stat. 522 , provided that:  “This Act [amending sections 4081, 4083, 4261, 4271, and 9502 of this title, sections 106, 41742, 47104, 47107, 47115, 47124, 47141, 48101 to 48103, and 48114 of Title 49, Transportation, and  section 50905 of Title 51 , National and Commercial Space Programs, and amending provisions set out as a note preceding  section 42301 of Title 49  and provisions set out as notes under sections 41731 and 47141 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2015’.”\nPub. L. 114–26, §\u202f1 ,  June 29, 2015 ,  129 Stat. 319 , provided that:  “This Act [probably means sections 1 to 3 of  Pub. L. 114–26 , see Tables for classification] may be cited as the ‘Defending Public Safety Employees’ Retirement Act’.”\nPub. L. 114–14, §\u202f1 ,  May 22, 2015 ,  129 Stat. 198 , provided that:  “This Act [amending  section 104 of this title ] may be cited as the ‘Don’t Tax Our Fallen Public Safety Heroes Act’.”\nPub. L. 113–295, div. A, §\u202f1(a) ,  Dec. 19, 2014 ,  128 Stat. 4010 , provided that:  “This division [see Tables for classification] may be cited as the ‘Tax Increase Prevention Act of 2014’.”\nPub. L. 113–295, div. A, title II, §\u202f201 ,  Dec. 19, 2014 ,  128 Stat. 4024 , provided that:  “This title [see Tables for classification] may be cited as the ‘Tax Technical Corrections Act of 2014’.”\nPub. L. 113–295, div. B, §\u202f1(a) ,  Dec. 19, 2014 ,  128 Stat. 4056 , provided that:  “This division [see Tables for classification] may be cited as the ‘Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014’ or the ‘Stephen Beck, Jr., ABLE Act of 2014’.”\nPub. L. 113–168, §\u202f1 ,  Sept. 26, 2014 ,  128 Stat. 1883 , provided that:  “This Act [enacting  section 139E of this title  and provisions set out as notes under  section 139E of this title ] may be cited as the ‘Tribal General Welfare Exclusion Act of 2014’.”\nPub. L. 113–94, §\u202f1 ,  Apr. 3, 2014 ,  128 Stat. 1085 , provided that:  “This Act [amending sections 9006, 9008, 9009, 9012, and 9037 of this title and sections 282 and 282a of Title 42, The Public Health and Welfare, and enacting provisions set out as a note under  section 282a of Title 42 ] may be cited as the ‘Gabriella Miller Kids First Research Act’.”\nPub. L. 112–240, §\u202f1(a) ,  Jan. 2, 2013 ,  126 Stat. 2313 , provided that:  “This Act [see Tables for classification] may be cited as the ‘American Taxpayer Relief Act of 2012’.”\nPub. L. 112–141, div. D, §\u202f40001 ,  July 6, 2012 ,  126 Stat. 844 , provided that:  “This division [see Tables for classification] may be cited as the ‘Highway Investment, Job Creation, and Economic Growth Act of 2012’.”\nPub. L. 112–96, §\u202f1(a) ,  Feb. 22, 2012 ,  126 Stat. 156 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Middle Class Tax Relief and Job Creation Act of 2012’.”\nPub. L. 112–96, title II, §\u202f2001 ,  Feb. 22, 2012 ,  126 Stat. 159 , provided that:  “This title [enacting sections 505 and 1111 of Title 42, The Public Health and Welfare, amending sections 3304 and 3306 of this title,  section 503 of Title 42 , and  section 352 of Title 45 , Railroads, enacting provisions set out as notes under this section, sections 3304 and 3306 of this title, and sections 503 and 1111 of Title 42, amending provisions set out as notes under  section 3304 of this title , and repealing provisions set out as a note under  section 3304 of this title ] may be cited as the ‘Extended Benefits, Reemployment, and Program Integrity Improvement Act’.”\nPub. L. 112–96, title II, §\u202f2121 ,  Feb. 22, 2012 ,  126 Stat. 163 , provided that:  “This subtitle [subtitle B (§§\u202f2121–2124) of title II of  Pub. L. 112–96 , amending  section 352 of Title 45 , Railroads, and enacting and amending provisions set out as notes under  section 3304 of this title ] may be cited as the ‘Unemployment Benefits Extension Act of 2012’.”\nPub. L. 112–96, title II, §\u202f2160 ,  Feb. 22, 2012 ,  126 Stat. 171 , provided that:  “This subtitle [subtitle D (§§\u202f2160–2166) of title II of  Pub. L. 112–96 , amending sections 3304 and 3306 of this title and  section 503 of Title 42 , The Public Health and Welfare, enacting provisions set out as notes under sections 3304 and 3306 of this title, and repealing provisions set out as a note under  section 3304 of this title ] may be cited as the ‘Layoff Prevention Act of 2012’.”\nPub. L. 112–91, §\u202f1 ,  Jan. 31, 2012 ,  126 Stat. 3 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 41742, 41743, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title, and amending provisions set out as notes under sections 41731 and 47109 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2012’.”\nPub. L. 112–78, §\u202f1(a) ,  Dec. 23, 2011 ,  125 Stat. 1280 , provided that:  “This Act [enacting  section 4547 of Title 12 , Banks and Banking, amending  section 645 of Title 2 , The Congress,  section 1709 of Title 12 , sections 1395 l , 1395m, 1395w–4, 1396a, 1396r–6, and 1396u–3 of Title 42, The Public Health and Welfare, and  section 352 of Title 45 , Railroads, enacting provisions set out as notes under sections 1401 and 3304 of this title,  section 1709 of Title 12 , and  section 1395ww of Title 42 , and amending provisions set out as notes under sections 1401 and 3304 of this title and sections 1395m, 1395w–4, and 1395ww of Title 42] may be cited as the ‘Temporary Payroll Tax Cut Continuation Act of 2011’.”\nPub. L. 112–56, title I, §\u202f101 ,  Nov. 21, 2011 ,  125 Stat. 712 , provided that:  “This title [amending  section 3402 of this title  and enacting provisions set out as a note under  section 3402 of this title ] may be cited as the ‘3% Withholding Repeal and Job Creation Act’.”\nPub. L. 112–30, title II, §\u202f201 ,  Sept. 16, 2011 ,  125 Stat. 357 , provided that:  “This title [amending sections 4081, 4261, 4271 and 9502 of this title and sections 106, 40117, 41742, 41743, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title, and amending provisions set out as notes under section 41731 and 47109 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2011, Part V’.”\nPub. L. 112–27, §\u202f1 ,  Aug. 5, 2011 ,  125 Stat. 270 , provided that:  “This Act [amending sections 4081, 4261, 4271 and 9502 of this title and sections 40117, 41731, 44302, 44303, 47104, 47107, 47115, 47141, 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2011, Part IV’.”\nPub. L. 112–21, §\u202f1 ,  June 29, 2011 ,  125 Stat. 233 , provided that:  “This Act [amending sections 4081, 4261, 4271 and 9502 of this title and sections 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2011, Part III’.”\nPub. L. 112–16, §\u202f1 ,  May 31, 2011 ,  125 Stat. 218 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2011, Part II’.”\nPub. L. 112–9, §\u202f1 ,  Apr. 14, 2011 ,  125 Stat. 36 , provided that:  “This Act [amending sections 36B and 6041 of this title and enacting provisions set out as notes under sections 36B and 6041 of this title] may be cited as the ‘Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011’.”\nPub. L. 112–7, §\u202f1 ,  Mar. 31, 2011 ,  125 Stat. 31 , provided that:  “This Act [amending sections 4081, 4261, 4271 and 9502 of this title and sections 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2011’.”\nPub. L. 111–329, §\u202f1 ,  Dec. 22, 2010 ,  124 Stat. 3566 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2010, Part IV’.”\nPub. L. 111–325, §\u202f1(a) ,  Dec. 22, 2010 ,  124 Stat. 3537 , provided that:  “This Act [amending sections 267, 302, 316, 562, 851, 852, 853, 853A, 854, 855, 860, 871, 1212, and 4982 of this title, repealing  section 6697 of this title , and enacting provisions set out as notes under sections 267, 316, 562, 851, 852, 854, 855, 860, 1212, and 4982 of this title] may be cited as the ‘Regulated Investment Company Modernization Act of 2010’.”\nPub. L. 111–312, §\u202f1(a) ,  Dec. 17, 2010 ,  124 Stat. 3296 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010’.”\nPub. L. 111–249, §\u202f1 ,  Sept. 30, 2010 ,  124 Stat. 2627 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 1135, 40117, 41743, 44302, 44303, 44703, 47104, 47107, 47115, 47141, 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and sections 1135 and 40117 of Title 49, and amending provisions set out as notes under sections 41731, 44701, and 47109 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2010, Part III’.”\nPub. L. 111–240, title II, §\u202f2001 ,  Sept. 27, 2010 ,  124 Stat. 2553 , provided that:  “This title [amending sections 38 to 40, 55, 72, 162, 168, 179, 195, 280F, 402A, 460, 861, 862, 864, 1202, 1374, 1400L, 1400N, 6041, 6330, 6707A, 6721, and 6722 of this title and enacting provisions set out as notes under sections 38 to 40, 72, 162, 168, 179, 195, 280F, 402A, 460, 861, 1202, 1374, 6041, 6330, 6655, 6662A, 6707A, and 6721 of this title] may be cited as the ‘Creating Small Business Jobs Act of 2010’.”\nPub. L. 111–237, §\u202f1 ,  Aug. 16, 2010 ,  124 Stat. 2497 , provided that:  “This Act [amending sections 6201, 6213, 6302, and 6501 of this title and enacting provisions set out as notes under sections 6201, 6302, and 6655 of this title] may be cited as the ‘Firearms Excise Tax Improvement Act of 2010’.”\nPub. L. 111–226, §\u202f1 ,  Aug. 10, 2010 ,  124 Stat. 2389 , provided that:  “This Act [enacting  section 909 of this title , amending sections 32, 304, 861, 864, 871, 901, 904, 960, 2104, 6012, 6051, 6302, and 6501 of this title and  section 1396r–8 of Title 42 , The Public Health and Welfare, repealing  section 3507 of this title , enacting provisions set out as notes under sections 32, 304, 861, 864, 901, 904, 909, 960, and 6501 of this title and  section 1396r–8 of Title 42 , and amending provisions set out as a note under  section 1396d of Title 42 ] may be cited as the ‘____Act of____’. [sic]”\nPub. L. 111–205, §\u202f1 ,  July 22, 2010 ,  124 Stat. 2236 , provided that:  “This Act [enacting and amending provisions set out as notes under  section 3304 of this title ] may be cited as the ‘Unemployment Compensation Extension Act of 2010’.”\nPub. L. 111–198, §\u202f1 ,  July 2, 2010 ,  124 Stat. 1356 , provided that:  “This Act [amending sections 36, 6103, and 6657 of this title,  section 1187 of Title 8 , Aliens and Nationality, and  section 2131 of Title 22 , Foreign Relations and Intercourse, and enacting provisions set out as notes under sections 36, 6103, and 6657 of this title] may be cited as the ‘Homebuyer Assistance and Improvement Act of 2010’.”\nPub. L. 111–197, §\u202f1 ,  July 2, 2010 ,  124 Stat. 1353 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2010, Part II’.”\nPub. L. 111–161, §\u202f1 ,  Apr. 30, 2010 ,  124 Stat. 1126 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Airport and Airway Extension Act of 2010’.”\nPub. L. 111–159, §\u202f1 ,  Apr. 26, 2010 ,  124 Stat. 1123 , provided that:  “This Act [amending  section 5000A of this title  and enacting provisions set out as a note under  section 5000A of this title ] may be cited as the ‘TRICARE Affirmation Act’.”\nPub. L. 111–157, §\u202f1 ,  Apr. 15, 2010 ,  124 Stat. 1116 , provided that:  “This Act [amending  section 119 of Title 17 , Copyrights, sections 1395w–4 and 1396b of Title 42, The Public Health and Welfare, and  section 325 of Title 47 , Telecommunications, enacting provisions set out as notes under sections 3304 and 6432 of this title and  section 1395w–4 of Title 42 , and amending provisions set out as notes under sections 3304 and 6432 of this title and  section 119 of Title 17 ] may be cited as the ‘Continuing Extension Act of 2010’.”\nPub. L. 111–153, §\u202f1 ,  Mar. 31, 2010 ,  124 Stat. 1084 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Federal Aviation Administration Extension Act of 2010’.”\nPub. L. 111–147, §\u202f1(a) ,  Mar. 18, 2010 ,  124 Stat. 71 , provided that:  “This Act [enacting chapter 4 and  section 6038D of this title , amending sections 51, 54F, 149, 163, 165, 179, 643, 679, 864, 871, 881, 1287, 1291, 1298, 3111, 3221, 4701, 6011, 6048, 6229, 6414, 6431, 6501, 6513, 6611, 6662, 6677, 6724, and 9502 to 9504 of this title,  section 777c of Title 16 , Conservation, sections 405 and 410 of Title 23, Highways,  section 3121 of Title 31 , Money and Finance, and sections 5305, 5307, 5309, 5311, 5337, 5338, 31104, and 31144 of Title 49, Transportation, enacting provisions set out as notes under sections 38, 51, 54F, 149, 179, 643, 679, 864, 871, 1291, 6011, 6038D, 6048, 6229, 6431, 6655, 6662, 6677, 9502, and 9503 of this title and  section 101 of Title 23 , and amending provisions set out as notes under  section 901 of Title 2 , The Congress, sections 402, 403, and 405 of Title 23, and sections 5309, 5310, 5338, 14710, 31100, 31301, and 31309 of Title 49] may be cited as the ‘Hiring Incentives to Restore Employment Act’.”\nPub. L. 111–144, §\u202f1 ,  Mar. 2, 2010 ,  124 Stat. 42 , provided that:  “This Act [amending sections 35, 139C, 6432, and 6720C of this title,  section 119 of Title 17 , Copyrights, sections 1395 l  and 1395w–4 of Title 42, The Public Health and Welfare, and  section 325 of Title 47 , Telecommunications, enacting provisions set out as a note under  section 6432 of this title , and amending provisions set out as notes under sections 3304 and 6432 of this title and  section 119 of Title 17 ] may be cited as the ‘Temporary Extension Act of 2010’.”\nPub. L. 111–116, §\u202f1 ,  Dec. 16, 2009 ,  123 Stat. 3031 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Fiscal Year 2010 Federal Aviation Administration Extension Act, Part II’.”\nPub. L. 111–92, §\u202f1 ,  Nov. 6, 2009 ,  123 Stat. 2984 , provided that:  “This Act [amending sections 36, 56, 132, 172, 810, 864, 1400C, 3301, 6011, 6213, 6698, and 6699 of this title,  section 1103 of Title 42 , The Public Health and Welfare, and  section 352 of Title 45 , Railroads, enacting provisions set out as notes under sections 36, 56, 132, 172, 864, 3301, 3304, 6011, 6213, 6655, and 6698 of this title and  section 1103 of Title 42 , and amending provisions set out as a note under  section 3304 of this title ] may be cited as the ‘Worker, Homeownership, and Business Assistance Act of 2009’.”\nPub. L. 111–69, §\u202f1 ,  Oct. 1, 2009 ,  123 Stat. 2054 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 41743, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as notes under sections 41731 and 47109 of Title 49] may be cited as the ‘Fiscal Year 2010 Federal Aviation Administration Extension Act’.”\nPub. L. 111–42, title II, §\u202f201 ,  July 28, 2009 ,  123 Stat. 1964 , provided that:  “This title [enacting provisions set out as a note under  section 6655 of this title ] may be cited as the ‘Corporate Estimated Tax Shift Act of 2009’.”\nPub. L. 111–12, §\u202f1 ,  Mar. 30, 2009 ,  123 Stat. 1457 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Federal Aviation Administration Extension Act of 2009’.”\nPub. L. 111–5, §\u202f1 ,  Feb. 17, 2009 ,  123 Stat. 115 , provided that:  “This Act [see Tables for classification] may be cited as the ‘American Recovery and Reinvestment Act of 2009’.”\nPub. L. 111–5, div. B, title I, §\u202f1000(a) ,  Feb. 17, 2009 ,  123 Stat. 306 , provided that:  “This title [see Tables for classification] may be cited as the ‘American Recovery and Reinvestment Tax Act of 2009’.”\nPub. L. 111–5, div. B, title I, §\u202f1899 ,  Feb. 17, 2009 ,  123 Stat. 423 , provided that:  “This part [part VI (§§\u202f1899–1899L) of subtitle I of title I of div. B of  Pub. L. 111–5 , amending sections 35, 4980B, 7527, and 9801 of this title, sections 1162, 1181, 2918, and 2919 of Title 29, Labor, and sections 300bb–2 and 300gg of Title 42, The Public Health and Welfare, and enacting provisions set out as notes under sections 35, 4980B, 7527, and 9801 of this title] may be cited as the ‘TAA Health Coverage Improvement Act of 2009’.”\nPub. L. 111–5, div. B, title II, §\u202f2000(a) ,  Feb. 17, 2009 ,  123 Stat. 436 , provided that:  “This title [amending sections 603, 604, 607, 1103, 1308, and 1322 of Title 42, The Public Health and Welfare, and  section 352 of Title 45 , Railroads, enacting provisions set out as notes under sections 3304 and 6428 of this title and sections 603, 607, 655, 1103, and 1308 of Title 42, and amending provisions set out as notes under  section 3304 of this title ] may be cited as the ‘Assistance for Unemployed Workers and Struggling Families Act’.”\nPub. L. 110–449, §\u202f1 ,  Nov. 21, 2008 ,  122 Stat. 5014 , provided that:  “This Act [enacting and amending provisions set out as notes under  section 3304 of this title ] may be cited as the ‘Unemployment Compensation Extension Act of 2008’.”\nPub. L. 110–428, §\u202f1 ,  Oct. 15, 2008 ,  122 Stat. 4839 , provided that:  “This Act [amending sections 6103 and 7803 of this title and  section 376 of Title 28 , Judiciary and Judicial Procedure, and enacting provisions set out as notes under sections 6103 and 7207 of this title and  section 376 of Title 28 ] may be cited as the ‘Inmate Tax Fraud Prevention Act of 2008’.”\nPub. L. 110–343, div. B, §\u202f1(a) ,  Oct. 3, 2008 ,  122 Stat. 3807 , provided that:  “This division [see Tables for classification] may be cited as the ‘Energy Improvement and Extension Act of 2008’.”\nPub. L. 110–343, div. C, §\u202f1(a) ,  Oct. 3, 2008 ,  122 Stat. 3861 , provided that:  “This division [see Tables for classification] may be cited as the ‘Tax Extenders and Alternative Minimum Tax Relief Act of 2008’.”\nPub. L. 110–343, div. C, title VII, §\u202f701 ,  Oct. 3, 2008 ,  122 Stat. 3912 , provided that:  “This subtitle [subtitle A (§§\u202f701–704) of title VII of div. C of  Pub. L. 110–343 , amending  section 6033 of this title  and enacting provisions set out as a note under  section 6033 of this title ] may be cited as the ‘Heartland Disaster Tax Relief Act of 2008’.”\nPub. L. 110–330, §\u202f1 ,  Sept. 30, 2008 ,  122 Stat. 3717 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 106, 40117, 41743, 44302, 44303, 47104, 47107, 47115, 47141, 48101 to 48103, and 49108 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 40117 of Title 49 , and amending provisions set out as notes under sections 41731 and 47109 of Title 49] may be cited as the ‘Federal Aviation Administration Extension Act of 2008, Part II’.”\nPub. L. 110–289, div. C, §\u202f3000(a) ,  July 30, 2008 ,  122 Stat. 2877 , provided that:  “This division [see Tables for classification] may be cited as the ‘Housing Assistance Tax Act of 2008’.”\nPub. L. 110–253, §\u202f1 ,  June 30, 2008 ,  122 Stat. 2417 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 40117, 44302, 44303, 47104, 47115, 47141, and 48103 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 47104 of Title 49 , and amending provisions set out as a note under  section 47109 of Title 49 ] may be cited as the ‘Federal Aviation Administration Extension Act of 2008’.”\nPub. L. 110–245, §\u202f1(a) ,  June 17, 2008 ,  122 Stat. 1624 , provided that:  “This Act [enacting chapter 15 and sections 45P and 877A of this title, amending sections 32, 38, 72, 121, 125, 134, 143, 219, 280C, 401, 403, 404, 408A, 414, 457, 530, 877, 3121, 3306, 3401, 6039G, 6103, 6428, 6511, 6651, 7701, and 9812 of this title,  section 1185a of Title 29 , Labor, and sections 300gg–5, 409, 410, 1382a, and 1382b of Title 42, The Public Health and Welfare, and enacting provisions set out as notes under sections 32, 38, 72, 121, 125, 134, 143, 219, 401, 408A, 414, 3121, 3401, 6103, 6428, 6511, and 6651 of this title and  section 1382a of Title 42 ] may be cited as the ‘Heroes Earnings Assistance and Relief Tax Act of 2008’.”\nPub. L. 110–234, title XV, §\u202f15001(a) ,  May 22, 2008 ,  122 Stat. 1484 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15001(a),  June 18, 2008 ,  122 Stat. 1664 , 2246, provided that:  “This title [see Tables for classification] may be cited as the ‘Heartland, Habitat, Harvest, and Horticulture Act of 2008’.”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–190, §\u202f1 ,  Feb. 28, 2008 ,  122 Stat. 643 , provided that:  “This Act [amending sections 4081, 4261, 4271, and 9502 of this title and sections 47104 and 48103 of Title 49, Transportation, enacting provisions set out as notes under sections 4081 and 9502 of this title and  section 41731 of Title 49 , and amending provisions set out as notes under sections 41731 and 47109 of Title 49] may be cited as the ‘Airport and Airway Extension Act of 2008’.”\nPub. L. 110–185, §\u202f1(a) ,  Feb. 13, 2008 ,  122 Stat. 613 , provided that:  “This Act [amending this section, sections 168, 179, 1400L, 1400N, 6211, 6213, and 6428 of this title, and  section 1324 of Title 31 , Money and Finance, and enacting provisions set out as notes under sections 168, 179, and 6428 of this title] may be cited as the ‘Economic Stimulus Act of 2008’.”\nPub. L. 110–172, §\u202f1(a) ,  Dec. 29, 2007 ,  121 Stat. 2473 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Technical Corrections Act of 2007’.”\nPub. L. 110–166, §\u202f1 ,  Dec. 26, 2007 ,  121 Stat. 2461 , provided that:  “This Act [amending sections 26 and 55 of this title and enacting provisions set out as notes under sections 26 and 55 of this title] may be cited as the ‘Tax Increase Prevention Act of 2007’.”\nPub. L. 110–142, §\u202f1 ,  Dec. 20, 2007 ,  121 Stat. 1803 , provided that:  “This Act [enacting sections 139B and 6699 of this title, amending sections 42, 108, 121, 163, 216, 6103, and 6698 of this title, and enacting provisions set out as notes under sections 42, 108, 121, 139B, 163, 216, 6103, 6655, 6698, and 6699 of this title] may be cited as the ‘Mortgage Forgiveness Debt Relief Act of 2007’.”\nPub. L. 110–28, title VIII, §\u202f8201(a) ,  May 25, 2007 ,  121 Stat. 190 , provided that:  “This subtitle [subtitle B (§§\u202f8201–8248) of title VIII of  Pub. L. 110–28 , enacting  section 6676 of this title , amending this section, sections 38, 45B, 51, 179, 641, 761, 1361, 1362, 1368, 1400N, 1402, 6060, 6103, 6107, 6l09, 6330, 6404, 6503, 6657, 6694 to 6696, 7407, 7427, 7528, and 7701 of this title, and  section 411 of Title 42 , The Public Health and Welfare, enacting provisions set out as notes under this section and sections 38, 45B, 51, 179, 641, 761, 1361, 1362, 6060, 6330, 6404, 6657, and 6676 of this title, and amending provisions set out as a note under  section 6655 of this title ] may be cited as the ‘Small Business and Work Opportunity Tax Act of 2007’.”\nPub. L. 109–432, §\u202f1(a) ,  Dec. 20, 2006 ,  120 Stat. 2922 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Relief and Health Care Act of 2006’.”\nPub. L. 109–432, div. A, title III, §\u202f301 ,  Dec. 20, 2006 ,  120 Stat. 2948 , provided that:  “This title [amending sections 106, 223, 408, and 4980G of this title and enacting provisions set out as notes under sections 106, 223, and 4980G of this title] may be cited as the ‘Health Opportunity Patient Empowerment Act of 2006’.”\nPub. L. 109–227, §\u202f1 ,  May 29, 2006 ,  120 Stat. 385 , provided that:  “This Act [amending  section 219 of this title  and enacting provisions set out as notes under  section 219 of this title ] may be cited as the ‘Heroes Earned Retirement Opportunities Act’.”\nPub. L. 109–222, §\u202f1(a) ,  May 17, 2006 ,  120 Stat. 345 , provided that:  “This Act [enacting  section 4965 of this title , amending this section and sections 26, 54, 55, 142 to 144, 148, 149, 163, 167, 170, 179, 199, 355, 408A, 468B, 852, 871, 897, 911, 953, 954, 1221, 1355, 1445, 3402, 6011, 6033, 6049, 6159, 6652, 7122, and 7872 of this title, enacting provisions set out as notes under this section and sections 26, 54 to 56, 142, 143, 163, 167, 170, 199, 355, 408A, 468B, 852, 897, 911, 954, 1355, 3402, 4965, 6049, 6159, and 6655 of this title, and amending provisions set out as notes under this section and sections 56 and 114 of this title] may be cited as the ‘Tax Increase Prevention and Reconciliation Act of 2005’.”\nPub. L. 109–135, §\u202f1(a) ,  Dec. 21, 2005 ,  119 Stat. 2577 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Gulf Opportunity Zone Act of 2005’.”\nPub. L. 109–135, title IV, §\u202f401 ,  Dec. 21, 2005 ,  119 Stat. 2610 , provided that:  “This subtitle [subtitle A (§§\u202f401–413) of title IV of  Pub. L. 109–135 , see Tables for classification] may be cited as the ‘Tax Technical Corrections Act of 2005’.”\nPub. L. 109–73, §\u202f1(a) ,  Sept. 23, 2005 ,  119 Stat. 2016 , provided that:  “This Act [amending sections 170 and 7508 of this title and enacting provisions set out as notes under sections 170 and 7508 of this title] may be cited as the ‘Katrina Emergency Tax Relief Act of 2005’.”\nPub. L. 109–58, title XIII, §\u202f1300(a) ,  Aug. 8, 2005 ,  119 Stat. 986 , provided that:  “This title [see Tables for classification] may be cited as the ‘Energy Tax Incentives Act of 2005’.”\nPub. L. 108–357, §\u202f1(a) ,  Oct. 22, 2004 ,  118 Stat. 1418 , provided that:  “This Act [see Tables for classification] may be cited as the ‘American Jobs Creation Act of 2004’.”\nPub. L. 108–311, §\u202f1(a) ,  Oct. 4, 2004 ,  118 Stat. 1166 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Working Families Tax Relief Act of 2004’.”\nPub. L. 108–121, §\u202f1(a) ,  Nov. 11, 2003 ,  117 Stat. 1335 , provided that:  “This Act [amending sections 5, 62, 101, 121, 132, 134, 162, 501, 530, 692, 2201, 3121, 3306, 3401, 6013, and 7508 of this title,  section 1478 of Title 10 , Armed Forces, and  section 58c of Title 19 , Customs Duties, and enacting provisions set out as notes under sections 5, 62, 101, 121, 132, 134, 501, 530, 2201, and 7508 of this title and  section 1478 of Title 10 ] may be cited as the ‘Military Family Tax Relief Act of 2003’.”\nPub. L. 108–27, §\u202f1(a) ,  May 28, 2003 ,  117 Stat. 752 , provided that:  “This Act [enacting  section 6429 of this title  and  section 801 of Title 42 , The Public Health and Welfare, amending this section, sections 24, 55, 57, 63, 163, 168, 179, 301, 306, 338, 467, 531, 541, 584, 702, 854, 857, 1255, 1257, 1400L, 1445, and 7518 of this title, and  section 1177 of Title 46 , Appendix, Shipping, repealing  section 341 of this title , enacting provisions set out as notes under this section, sections 24, 55, 63, 168, and 179 of this title, and  section 1396d of Title 42 , and amending provisions set out as notes under this section] may be cited as the ‘Jobs and Growth Tax Relief Reconciliation Act of 2003’.”\nPub. L. 108–26, §\u202f1 ,  May 28, 2003 ,  117 Stat. 751 , provided that:  “This Act [enacting and amending provisions set out as notes under  section 3304 of this title ] may be cited as the ‘Unemployment Compensation Amendments of 2003’.”\nPub. L. 107–358, §\u202f1 ,  Dec. 17, 2002 ,  116 Stat. 3015 , provided that:  “This Act [amending provisions set out as a note under this section] may be cited as the ‘Holocaust Restitution Tax Fairness Act of 2002’.”\nPub. L. 107–181, §\u202f1 ,  May 20, 2002 ,  116 Stat. 583 , provided that:  “This Act [amending  section 107 of this title  and enacting provisions set out as a note under  section 107 of this title ] may be cited as the ‘Clergy Housing Allowance Clarification Act of 2002’.”\nPub. L. 107–147, §\u202f1(a) ,  Mar. 9, 2002 ,  116 Stat. 21 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Job Creation and Worker Assistance Act of 2002’.”\nPub. L. 107–134, §\u202f1(a) ,  Jan. 23, 2002 ,  115 Stat. 2427 , provided that: This Act [enacting sections 139 and 5891 of this title and  section 1148 of Title 29 , Labor, amending sections 5, 101, 104, 140, 642, 692, 2011, 2053, 2201, 6013, 6081, 6103, 6105, 6161, 6404, 7213, 7508, and 7508A of this title and  section 1302 of Title 29 , enacting provisions set out as notes under sections 101, 108, 139, 501, 642, 692, 2011, 5891, 6081, and 6103 of this title,  section 401 of Title 42 , The Public Health and Welfare, and  section 40101 of Title 49 , Transportation, and amending provisions set out as a note under  section 40101 of Title 49 ] may be cited as the ‘Victims of Terrorism Tax Relief Act of 2001’.”\nPub. L. 107–16, §\u202f1(a) ,  June 7, 2001 ,  115 Stat. 38 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Economic Growth and Tax Relief Reconciliation Act of 2001’.”\nPub. L. 107–15, §\u202f1 ,  June 5, 2001 ,  115 Stat. 37 , provided that:  “This Act [amending provisions set out as a note under  section 101 of this title ] may be cited as the ‘Fallen Hero Survivor Benefit Fairness Act of 2001’.”\nPub. L. 106–573, §\u202f1 ,  Dec. 28, 2000 ,  114 Stat. 3061 , provided that:  “This Act [amending  section 453 of this title  and enacting provisions set out as a note under  section 453 of this title ] may be cited as the ‘Installment Tax Correction Act of 2000’.”\nPub. L. 106–554, §\u202f1(a)(7) [§\u202f1(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–587, provided that:  “This Act [H.R. 5662, as enacted by  section 1(a)(7) of Pub. L. 106–554 , see Tables for classification] may be cited as the ‘Community Renewal Tax Relief Act of 2000’.”\nPub. L. 106–519, §\u202f1(a) ,  Nov. 15, 2000 ,  114 Stat. 2423 , provided that:  “This Act [enacting sections 114 and 941 to 943 of this title, amending sections 56, 275, 864, 903 and 999 of this title, and repealing sections 921 to 927 of this title] may be cited as the ‘FSC Repeal and Extraterritorial Income Exclusion Act of 2000’.”\nPub. L. 106–476, title IV, §\u202f4001 ,  Nov. 9, 2000 ,  114 Stat. 2176 , provided that:  “This title [enacting sections 1681 to 1681b of Title 19, Customs Duties, amending sections 5704, 5754, and 5761 of this title, and enacting provisions set out as notes under sections 5704 and 5761 of this title and  section 1681 of Title 19 ] may be cited as the ‘Imported Cigarette Compliance Act of 2000’.”\nPub. L. 106–170, title V, §\u202f500 ,  Dec. 17, 1999 ,  113 Stat. 1918 , provided that:  “This title [see Tables for classification] may be cited as the ‘Tax Relief Extension Act of 1999’.”\nPub. L. 105–277, div. J, §\u202f1000(a) ,  Oct. 21, 1998 ,  112 Stat. 2681–886 , provided that:  “This division [§§\u202f1000–5301, see Tables for classification] may be cited as the ‘Tax and Trade Relief Extension Act of 1998’.”\nPub. L. 105–277, div. C, title XV, §\u202f1501 ,  Oct. 21, 1998 ,  112 Stat. 2681–741 , provided that:  “This title [amending sections 4132 and 9510 of this title and  section 300aa–11 of Title 42 , The Public Health and Welfare, and enacting provisions set out as notes under sections 4132 and 9510 of this title] may be cited as the ‘Vaccine Injury Compensation Program Modification Act’.”\nPub. L. 105–206, §\u202f1(a) ,  July 22, 1998 ,  112 Stat. 685 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Internal Revenue Service Restructuring and Reform Act of 1998’.”\nPub. L. 105–206, title III, §\u202f3000 ,  July 22, 1998 ,  112 Stat. 726 , provided that:  “This title [see Tables for classification] may be cited as the ‘Taxpayer Bill of Rights 3’.”\nPub. L. 105–206, title VI, §\u202f6001(a) ,  July 22, 1998 ,  112 Stat. 790 , provided that:  “This title [see Tables for classification] may be cited as the ‘Tax Technical Corrections Act of 1998’.”\nPub. L. 105–178, title IX, §\u202f9001(a) ,  June 9, 1998 ,  112 Stat. 499 , provided that:  “This title [amending sections 40, 132, 4041, 4051, 4071, 4081, 4091, 4221, 4481 to 4483, 6156, 6412, 6421, 6427, 9503, and 9504 of this title and section 460 l –11 of Title 16, Conservation, repealing  section 9511 of this title , enacting provisions set out as notes under sections 40, 132, 172, 4041, 6421, and 9503 of this title, and amending provisions set out as a note under  section 172 of this title ] may be cited as the ‘Surface Transportation Revenue Act of 1998’.”\nPub. L. 105–35, §\u202f1 ,  Aug. 5, 1997 ,  111 Stat. 1104 , provided that:  “This Act [enacting  section 7213A of this title , amending sections 7213 and 7431 of this title, and enacting provisions set out as notes under sections 7213 and 7431 of this title] may be cited as the ‘Taxpayer Browsing Protection Act’.”\nPub. L. 105–34, §\u202f1(a) ,  Aug. 5, 1997 ,  111 Stat. 788 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Taxpayer Relief Act of 1997’.”\nPub. L. 105–2, §\u202f1(a) ,  Feb. 28, 1997 ,  111 Stat. 4 , provided that:  “This Act [amending sections 4041, 4081, 4091, 4261, 4271, and 9502 of this title and enacting provisions set out as notes under sections 4041, 4081, and 4261 of this title] may be cited as the ‘Airport and Airway Trust Fund Tax Reinstatement Act of 1997’.”\nPub. L. 104–188, §\u202f1(a) ,  Aug. 20, 1996 ,  110 Stat. 1755 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Small Business Job Protection Act of 1996’.”\nPub. L. 104–168, §\u202f1(a) ,  July 30, 1996 ,  110 Stat. 1452 , provided that:  “This Act [enacting sections 4958, 7434, 7435, and 7524 of this title, amending sections 501, 4955, 4963, 6013, 6033, 6041 to 6042, 6044, 6045, 6049, 6050B, 6050H to 6050K, 6050N, 6103, 6104, 6159, 6201, 6213, 6323, 6334, 6343, 6404, 6503, 6601, 6651, 6652, 6656, 6672, 6685, 7122, 7213, 7422, 7430, 7433, 7454, 7502, 7608, 7609, 7623, 7802, 7805, and 7811 of this title, renumbering sections 7434 and 7435 as sections 7435 and 7436 of this title, enacting provisions set out as notes under sections 501, 4955, 6013, 6033, 6041, 6103, 6104, 6159, 6201, 6311, 6323, 6334, 6404, 6503, 6601, 6651, 6652, 6656, 6672, 7122, 7430, 7433 to 7435, 7524, 7608, 7609, 7623, 7802, 7803, 7805, and 7811 of this title, and amending provisions set out as a note under  section 7608 of this title ] may be cited as the ‘Taxpayer Bill of Rights 2’.”\nPub. L. 103–465, title VII, §\u202f750 ,  Dec. 8, 1994 ,  108 Stat. 5012 , provided that:  “This subtitle [subtitle F (§§\u202f750–781) of title VII of  Pub. L. 103–465 , enacting sections 1310, 1311, and 1350 of Title 29, Labor, amending sections 401, 404, 411, 412, 415, 417, 4971, and 4972 of this title and sections 1053 to 1056, 1082, 1132, 1301, 1303, 1305, 1306, 1322, 1341, 1342, and 1343 of Title 29, and enacting provisions set out as notes under sections 401, 411, 412, and 4972 of this title and sections 1056, 1082, 1303, 1306, 1310, 1311, 1322, 1341, and 1342 of Title 29] may be cited as the ‘Retirement Protection Act of 1994’.”\nPub. L. 103–387, §\u202f1 ,  Oct. 22, 1994 ,  108 Stat. 4071 , provided that:  “This Act [enacting  section 3510 of this title , amending sections 3102 and 3121 of this title,  section 3701 of Title 31 , Money and Finance, and sections 401, 402, 404, 409, 410, and 1383 of Title 42, The Public Health and Welfare, and enacting provisions set out as notes under sections 3102 and 3510 of this title,  section 3701 of Title 31 , and sections 401, 402, and 1383 of Title 42] may be cited as the ‘Social Security Domestic Employment Reform Act of 1994’.”\nPub. L. 103–152, §\u202f1 ,  Nov. 24, 1993 ,  107 Stat. 1516 , provided that:  “This Act [amending sections 503, 504, 1105, 1108, and 1382j of Title 42, The Public Health and Welfare, enacting provisions set out as notes under  section 3304 of this title  and sections 503 and 1382j of Title 42, amending provisions set out as notes under  section 3304 of this title  and  section 352 of Title 45 , Railroads, and repealing provisions set out as a note under  section 3304 of this title ] may be cited as the ‘Unemployment Compensation Amendments of 1993’.”\nPub. L. 103–66, title XIII, §\u202f13001(a) ,  Aug. 10, 1993 ,  107 Stat. 416 , provided that:  “This chapter [chapter 1 (§§\u202f13001–13444) of title XIII of  Pub. L. 103–66 , see Tables for classification] may be cited as the ‘Revenue Reconciliation Act of 1993’.”\nPub. L. 103–6, §\u202f1 ,  Mar. 4, 1993 ,  107 Stat. 33 , provided that:  “This Act [enacting provisions set out as notes under  section 3304 of this title ,  section 31 of Title 2 , The Congress, and  section 352 of Title 45 , Railroads, and amending provisions set out as notes under  section 3304 of this title  and  section 352 of Title 45 ] may be cited as the ‘Emergency Unemployment Compensation Amendments of 1993’.”\nPub. L. 102–486, title XIX, §\u202f19141 ,  Oct. 24, 1992 ,  106 Stat. 3036 , provided that:  “This subtitle [subtitle C (§§\u202f19141–19143) of title XIX of  Pub. L. 102–486 , enacting sections 9701 to 9722 of this title, amending sections 1231 and 1232 of Title 30, Mineral Lands and Mining, and enacting provisions set out as a note under  section 9701 of this title ] may be cited as the ‘Coal Industry Retiree Health Benefit Act of 1992’.”\nPub. L. 102–318, §\u202f1 ,  July 3, 1992 ,  106 Stat. 290 , provided that:  “This Act [enacting  section 1110 of Title 42 , The Public Health and Welfare, amending sections 55, 62, 72, 151, 219, 401 to 404, 406 to 408, 411, 414, 415, 457, 691, 871, 877, 1441, 3121, 3304, 3306, 3402, 3405, 4973, 4980A, 6047, 6652, 6655, and 7701 of this title,  section 8509 of Title 5 , Government Organization and Employees,  section 2291 of Title 19 , Customs Duties, and sections 502, 503, 1101, 1102, 1104, and 1105 of Title 42, enacting provisions set out as notes under sections 401, 402, 3302, 3304, and 6655 of this title,  section 8509 of Title 5 ,  section 2291 of Title 19 , and sections 502, 666, 1102, and 1108 of Title 42, and amending provisions set out as notes under  section 3304 of this title , sections 502 and 666 of Title 42, and  section 352 of Title 45 , Railroads] may be cited as the ‘Unemployment Compensation Amendments of 1992’.”\nPub. L. 102–240, title VIII, §\u202f8001(a) ,  Dec. 18, 1991 ,  105 Stat. 2203 , provided that:  “This title [enacting  section 9511 of this title , amending sections 4041, 4051, 4071, 4081, 4091, 4221, 4481, 4482, 4483, 6156, 6412, 6420, 6421, 6427, 9503, and 9504 of this title and section 460 l –11 of Title 16, Conservation, and enacting provisions set out as notes under  section 9503 of this title ,  section 101 of Title 23 , Highways, and section 1601 of former Title 49, Transportation] may be cited as the ‘Surface Transportation Revenue Act of 1991’.”\nPub. L. 102–227, §\u202f1(a) ,  Dec. 11, 1991 ,  105 Stat. 1686 , provided that:  “This Act [amending sections 25, 28, 41, 42, 48, 51, 57, 120, 127, 143, 144, 162, 864, and 6655 of this title and enacting provisions set out as notes under sections 25, 28, 42, 51, 120, 127, 143, 144, 162, 864, and 6655 of this title] may be cited as the ‘Tax Extension Act of 1991’.”\nPub. L. 101–508, title XI, §\u202f11001(a) ,  Nov. 5, 1990 ,  104 Stat. 1388–400 , provided that:  “This title [see Tables for classification] may be cited as the ‘Revenue Reconciliation Act of 1990’.”\nPub. L. 101–239, title VII, §\u202f7001(a) ,  Dec. 19, 1989 ,  103 Stat. 2301 , provided that:  “This title [see Tables for classification] may be cited as the ‘Revenue Reconciliation Act of 1989’.”\nPub. L. 101–239, title VII, §\u202f7701 ,  Dec. 19, 1989 ,  103 Stat. 2388 , provided that:  “This subtitle [subtitle G (§§\u202f7701–7743) of title VII of  Pub. L. 101–239 , see Tables for classification] may be cited as the ‘Improved Penalty Administration and Compliance Tax Act’.”\nPub. L. 100–647, §\u202f1(a) ,  Nov. 10, 1988 ,  102 Stat. 3342 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Technical and Miscellaneous Revenue Act of 1988’.”\nPub. L. 100–647, title VI, §\u202f6226 ,  Nov. 10, 1988 ,  102 Stat. 3730 , provided that:  “This subtitle [subtitle J (§§\u202f6226–6247) of title VI of  Pub. L. 100–647 , enacting sections 6159, 6326, 6712, 7430, 7432, 7433, 7520, 7521, and 7811 of this title, amending sections 6213, 6214, 6331, 6332, 6334, 6335, 6343, 6404, 6512, 6601, 6673, 6863, 7216, 7429, 7481, 7482, 7802, and 7805 of this title and  section 504 of Title 5 , Government Organization and Employees, renumbering section 6326 as 6327, 7432 as 7433, and 7433 as 7434 of this title, and enacting provisions set out as notes under this section and sections 6159, 6213, 6214, 6326, 6331, 6404, 6512, 6673, 6712, 6863, 7429, 7430, 7432, 7520, 7521, 7605, 7801 to 7803, 7805, and 7811 of this title] may be cited as the ‘Omnibus Taxpayer Bill of Rights’.”\nPub. L. 100–223, title IV, §\u202f401 ,  Dec. 30, 1987 ,  101 Stat. 1532 , provided that:  “This title [enacting  section 4283 of this title , amending sections 4041, 4261, 4271, 6427, and 9502 of this title, and enacting provisions set out as notes under sections 4041 and 4261 of this title] may be cited as the ‘Airport and Airway Revenue Act of 1987’.”\nPub. L. 100–203, title IX, §\u202f9302(a) ,  Dec. 22, 1987 ,  101 Stat. 1330–333 , provided that:  “This part [part II (§§\u202f9302–9346) of subtitle D of part II of  Pub. L. 100–203 , enacting sections 1085b and 1371 of Title 29, Labor, amending sections 401, 404, 411, 412, 414, and 4971 of this title and sections 1021, 1023, 1024, 1054, 1082 to 1084, 1085a, 1086, 1103, 1107, 1113, 1132, 1201, 1301, 1305 to 1307, 1322, 1341, 1342, 1344, 1349, 1362, 1364, 1367, and 1368 of Title 29, repealing  section 1349 of Title 29 , and enacting provisions set out as notes under sections 401, 404, 412, and 4971 of this title and sections 1054, 1107, 1132, 1301, 1305, 1322, and 1344 of Title 29] may be cited as the ‘Pension Protection Act’.”\nPub. L. 100–203, title X, §\u202f10000(a) ,  Dec. 22, 1987 ,  101 Stat. 1330–382 , provided that:  “This title [see Tables for classification] may be cited as the ‘Revenue Act of 1987’.”\nPub. L. 100–17, title V, §\u202f501 ,  Apr. 2, 1987 ,  101 Stat. 256 , provided that:  “This title [amending sections 4041, 4051, 4052, 4071, 4081, 4221, 4481, 4482, 4483, 6156, 6412, 6420, 6421, 6427, and 9503 of this title and section 460 l –11 of Title 16, Conservation, and enacting provisions set out as notes under sections 4052 and 4481 of this title] may be cited as the ‘Highway Revenue Act of 1987’.”\nPub. L. 99–662, title XIV, §\u202f1401 ,  Nov. 17, 1986 ,  100 Stat. 4266 , provided that:  “This title [enacting sections 4461, 4462, 9505, and 9506 of this title and  section 988a of Title 33 , Navigation and Navigable Waters, amending  section 4042 of this title  and sections 984 and 1804 of Title 33, repealing sections 1801 and 1802 of Title 33, and enacting provisions set out as notes under sections 4042, 4461, 9505, and 9506 of this title and sections 984 and 988 of Title 33] may be cited as the ‘Harbor Maintenance Revenue Act of 1986’.”\nPub. L. 99–514, §\u202f1(a) ,  Oct. 22, 1986 ,  100 Stat. 2085 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Reform Act of 1986’.”\nPub. L. 99–499, title V, §\u202f501 ,  Oct. 17, 1986 ,  100 Stat. 1760 , provided that:  “This title [enacting sections 59A, 4671, 4672, 9507, and 9508 of this title, amending sections 26, 164, 275, 936, 1561, 4041, 4042, 4081, 4221, 4611, 4612, 4661, 4662, 6154, 6416, 6420, 6421, 6425, 6427, 6655, 9502, 9503, and 9506 of this title and  section 9601 of Title 42 , The Public Health and Welfare, repealing sections 4681 and 4682 of this title and sections 9631 to 9633, 9641, and 9653 of Title 42, and enacting provisions set out as notes under this section and sections 26, 4041, 4611, 4661, 4671, 4681, 9507, and 9508 of this title] may be cited as the ‘Superfund Revenue Act of 1986’.”\nPub. L. 98–369, §\u202f1(a) ,  July 18, 1984 ,  98 Stat. 494 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Deficit Reduction Act of 1984’.”\nPub. L. 98–369, div. A  (§§\u202f5–1082), §\u202f5(a),  July 18, 1984 ,  98 Stat. 494 , provided that:  “This division [see Tables for classification] may be cited as the ‘Tax Reform Act of 1984’.”\nPub. L. 98–135, §\u202f1 ,  Oct. 24, 1983 ,  97 Stat. 857 , provided that:  “This Act [amending  section 3306 of this title  and sections 1323 and 1397b of Title 42, The Public Health and Welfare, enacting provisions set out as notes under sections 3304 and 3306 of this title and  section 1323 of Title 42 , and amending provisions set out as notes under  section 3304 of this title ] may be cited as the ‘Federal Supplemental Compensation Amendments of 1983’.”\nPub. L. 98–76, title II, §\u202f201 ,  Aug. 12, 1983 ,  97 Stat. 419 , provided that:  “This title [enacting sections 3321 to 3323 and 6050G of this title, amending sections 72, 86, 105, 3201, 3202, 3211, 3221, 3231, 6157, 6201, 6317, 6513, and 6601 of this title and  section 430 of Title 42 , The Public Health and Welfare, and enacting provisions set out as notes under sections 72, 105, 3201, 3321, and 6302 of this title and  section 231n of Title 45 , Railroads] may be cited as the ‘Railroad Retirement Revenue Act of 1983’.”\nPub. L. 98–67, title I, §\u202f101(a) ,  Aug. 5, 1983 ,  97 Stat. 369 , provided that:  “This title [enacting sections 3406 and 6705 of this title, amending sections 31, 274, 275, 643, 661, 3402, 3403, 3502, 3507, 6011, 6013, 6015, 6042, 6044, 6049, 6051, 6365, 6401, 6413, 6652, 6653, 6654, 6676, 6678, 6682, 7205, 7215, 7431, 7654, and 7701 of this title, repealing sections 3451 to 3456 of this title, enacting provisions set out as notes under sections 31, 3451, and 6011 of this title, and repealing provisions set out as a note under  section 3451 of this title ] may be cited as the ‘Interest and Dividend Tax Compliance Act of 1983’.”\nPub. L. 97–473, title II, §\u202f201 ,  Jan. 14, 1983 ,  96 Stat. 2607 , provided that:  “This title [enacting  section 7871 of this title , amending sections 41, 103, 164, 170, 2055, 2106, 2522, 4227, 4484, 6420, 6421, 6424, 6427, and 7701 of this title, and enacting provisions set out as a note under  section 7871 of this title ] may be cited as the ‘Indian Tribal Governmental Tax Status Act of 1982’.”\nPub. L. 97–448, §\u202f1(a) ,  Jan. 12, 1983 ,  96 Stat. 2365 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Technical Corrections Act of 1982’.”\nPub. L. 97–424, title V, §\u202f501(a) ,  Jan. 6, 1983 ,  96 Stat. 2168 , provided that:  “This title [see Tables for classification] may be cited as the ‘Highway Revenue Act of 1982’.”\nPub. L. 97–362, §\u202f1(a) ,  Oct. 25, 1982 ,  96 Stat. 1726 , provided that:  “This Act [amending sections 8509 and 8521 of Title 5, Government Organization and Employees, sections 48, 172, 4401, 4411, 6051, 7447, 7448, 7456, 7459, and 7463 of this title, and section 601 of former Title 46, Shipping, enacting provisions set out as notes under sections 8509 and 8521 of Title 5 and sections 48, 172, 336, 4401, 4411, 6051, 7448, and 7463 of this title, and amending provisions set out as notes under  section 2291 of Title 19 , Customs Duties, and  section 3306 of this title ] may be cited as the ‘Miscellaneous Revenue Act of 1982’.”\nPub. L. 97–354, §\u202f1(a) ,  Oct. 19, 1982 ,  96 Stat. 1669 , provided that:  “This Act [enacting sections 1361 to 1363, 1366 to 1368, 1371 to 1375, 1377 to 1379, and 6241 to 6245 of this title, amending sections 29, 31, 40, 41, 46, 48, 50A, 50B, 52, 53, 55, 57, 58, 62, 108, 163, 168, 170, 172, 179, 183, 189, 194, 267, 280, 280A, 291, 447, 464, 465, 613A, 992, 1016, 1101, 1212, 1251, 1254, 1256, 3453, 3454, 4992, 4996, 6037, 6042, 6362, and 6661 of this title and  section 1108 of Title 29 , Labor, omitting  section 1376 of this title , and enacting provisions set out as a note under  section 1361 of this title ] may be cited as the ‘Subchapter S Revision Act of 1982’.”\nPub. L. 97–248, §\u202f1(a) ,  Sept. 3, 1982 ,  96 Stat. 324 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Equity and Fiscal Responsibility Act of 1982’.”\nPub. L. 97–248, title IV, §\u202f401 ,  Sept. 3, 1982 ,  96 Stat. 648 , provided that:  “This title [enacting sections 6046A and 6221 to 6232 of this title and  section 1508 of Title 28 , Judiciary and Judicial Procedure, amending sections 702, 6031, 6213, 6216, 6422, 6501, 6504, 6511, 6512, 6515, 6679, 7422, 7451, 7456, 7459, 7482, and 7485 of this title and  section 1346 of Title 28 , and enacting provisions set out as notes under sections 6031, 6046A, 6221, and 6231 of this title] may be cited as the ‘Tax Treatment of Partnership Items Act of 1982’.”\nPub. L. 97–119, title I, §\u202f101(a) ,  Dec. 29, 1981 ,  95 Stat. 1635 , provided that:  “This subtitle [subtitle A (§§\u202f101–104) of title I of  Pub. L. 97–119 , enacting sections 9500, 9501, 9601, and 9602 of this title, amending sections 501 and 4121 of this title and sections 902, 925, 932, and 934 of Title 30, Mineral Lands and Mining, repealing  section 934a of Title 30 , and enacting provisions set out as notes under sections 4121 and 9501 of this title and  section 934 of Title 30 ] may be cited as the ‘Black Lung Benefits Revenue Act of 1981’.”\nPub. L. 97–34, §\u202f1(a) ,  Aug. 13, 1981 ,  95 Stat. 172 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Economic Recovery Tax Act of 1981’.”\nPub. L. 96–605, §\u202f1(a) ,  Dec. 28, 1980 ,  94 Stat. 3521 , provided that:  “This Act [enacting sections 66 and 195 of this title, amending sections 48, 105, 125, 274, 401, 408, 409A, 410, 414, 415, 501, 513, 514, 528, 861, 871, and 2055 of this title, and enacting provisions set out as notes under sections 48, 66, 119, 125, 195, 274, 401, 409A, 414, 415, 501, 513, 514, 528, 861, 871, 2055, 3121, and 7701 of this title] may be cited as the ‘Miscellaneous Revenue Act of 1980’.”\nPub. L. 96–589, §\u202f1(a) ,  Dec. 24, 1980 ,  94 Stat. 3389 , provided that:  “This Act [enacting sections 370, 1398, 1399, 6658, and 7464 of this title, redesignating former  section 7464 of this title  as 7465, amending sections 108, 111, 118, 128, 302, 312, 337, 351, 354, 355, 357, 368, 381, 382, 422, 443, 542, 703, 1017, 1023, 1371, 3302, 6012, 6036, 6103, 6155, 6161, 6212, 6213, 6216, 6326, 6404, 6503, 6512, 6532, 6871, 6872, 6873, 7430, and 7508 of this title, repealing  section 1018 of this title , and enacting provisions set out as a note under  section 108 of this title ] may be cited as the ‘Bankruptcy Tax Act of 1980’.”\nPub. L. 96–510, title II, §\u202f201(a) ,  Dec. 11, 1980 ,  94 Stat. 2796 , provided that:  “This title [enacting chapter 38 of this title, sections 9631 to 9641 of Title 42, The Public Health and Welfare, and provisions set out as a note under  section 4611 of this title ] may be cited as the ‘Hazardous Substance Response Revenue Act of 1980’.”\nPub. L. 96–499, title XI, §\u202f1100 ,  Dec. 5, 1980 ,  94 Stat. 2660 , provided:  “This title [enacting sections 103A, 280D, 897, 6039C, and 6429 of this title, amending sections 103, 861, 871, 882, 3121, 3306, 4251, 6652, and 6655 of this title and  section 409 of Title 42 , The Public Health and Welfare, and enacting provisions set out as notes under sections 1, 103A, 280D, 897, 3121, and 6655 of this title] may be cited as the ‘Revenue Adjustments Act of 1980’.”\nPub. L. 96–499, title XI , subtitle A (§§\u202f1101–1104), §\u202f1101,  Dec. 5, 1980 ,  94 Stat. 2660 , provided:  “This subtitle [enacting  section 103A of this title , amending  section 103 of this title , and enacting provisions set out as a note under  section 103A of this title ] may be cited as the ‘Mortgage Subsidy Bond Tax Act of 1980’.”\nPub. L. 96–499, title XI, §\u202f1121 ,  Dec. 5, 1980 ,  94 Stat. 2682 , provided:  “This subtitle [subtitle C (§§\u202f1121–1125) of title XI of  Pub. L. 96–499 , enacting sections 897 and 6039C of this title, amending sections 861, 871, 882, and 6652 of this title, and enacting provisions set out as notes under  section 897 of this title ] may be cited as the ‘Foreign Investment in Real Property Tax Act of 1980’.”\nPub. L. 96–471, §\u202f1(a) ,  Oct. 19, 1980 ,  94 Stat. 2247 , provided:  “This Act [enacting sections 453 to 453B of this title, amending sections 311, 336, 337, 381, former section 453, sections 453B, 481, 644, 691, 1038, 1239, and 1255 of this title, and enacting provisions set out as notes under sections 453, 691, and 1038 of this title] may be cited as the ‘Installment Sales Revision Act of 1980’.”\nPub. L. 96–283, title IV, §\u202f401 ,  June 28, 1980 ,  94 Stat. 582 , provided that:  “This title [enacting sections 4495 to 4498 of this title and sections 1472, 1473 of Title 30, Mineral Lands and Mining, and enacting provision set out as a note under  section 4495 of this title ] may be cited as the ‘Deep Seabed Hard Mineral Removal Tax Act of 1979’.”\nPub. L. 96–223, §\u202f1(a)   Apr. 2, 1980 ,  94 Stat. 229 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Crude Oil Windfall Profit Tax Act of 1980’.”\nPub. L. 96–222, §\u202f1(a) ,  Apr. 1, 1980 ,  94 Stat. 194 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Technical Corrections Act of 1979’.”\nPub. L. 96–39, title VIII, §\u202f801(a) ,  July 26, 1979 ,  93 Stat. 273 , provided that:  “This subtitle [subtitle A (§§\u202f801–810) of title VIII of  Pub. L. 96–39 , amending sections 5001, 5002 to 5008, 5043, 5061, 5064, 5066, 5116, 5171 to 5173, 5175 to 5178, 5180, 5181, 5201 to 5205, 5207, 5211 to 5215, 5221 to 5223, 5231, 5232, 5235, 5241, 5273, 5291, 5301, 5352, 5361 to 5363, 5365, 5381, 5391, 5551, 5601, 5604, 5610, 5612, 5615, 5663, 5681, 5682, and 5691 of this title, repealing sections 5009, 5021 to 5026, 5081 to 5084, 5174, 5233, 5234, 5251, 5252, 5364, and 5521 to 5523 of this title, and enacting provisions set out as notes under sections 5001, 5061, 5171, and 5173 of this title] may be cited as the ‘Distilled Spirits Tax Revision Act of 1979’.”\nPub. L. 95–618, §\u202f1(a) ,  Nov. 9, 1978 ,  92 Stat. 3174 , provided that:  “This Act [enacting sections 44C, 124, and 4064 of this title, amending sections 39, 46 to 48, 56, 57, 167, 263, 465, 613, 613A, 614, 751, 1016, 1254, 4041, 4063, 4081, 4092, 4093, 4217, 4221, 4222, 4293, 4483, 6096, 6401, 6412, 6416, 6421, 6424, 6427, 6504, and 6675 of this title, redesignating  section 124 of this title  as section 125, enacting provisions set out as notes under sections 39, 44C, 48, 124, 167, 263, 613, 613A, 4041, 4063, 4064, 4081, 4093, and 4221 of this title, and amending provisions set out as notes under  section 57 of this title  and  section 120 of Title 23 , Highways] may be cited as the ‘Energy Tax Act of 1978’.”\nPub. L. 95–615, §\u202f1 ,  Nov. 8, 1978 ,  92 Stat. 3097 , provided that:  “This Act [probably meaning sections 1 to 8 of  Pub. L. 95–615 , amending  section 167 of this title , enacting provisions set out as notes under sections 61, 62, and 911 of this title, and amending provisions set out as notes under sections 117, 167, 382, 401, and 911 of this title] may be cited as the ‘Tax Treatment Extension Act of 1977’.”\nPub. L. 95–615, §\u202f201(a) ,  Nov. 8, 1978 ,  92 Stat. 3098 , provided that:  “This Act [probably meaning sections 201 to 210 of  Pub. L. 95–615 , enacting  section 913 of this title , amending sections 43, 62, 119, 217, 911, 1034, 1302, 1304, 1402, 3401, 6011, 6012, and 6091 of this title, and enacting provisions set out as notes under sections 61, 401, and 911 of this title] may be cited as the ‘Foreign Earned Income Act of 1978’.”\nPub. L. 95–600, §\u202f1(a) ,  Nov. 6, 1978 ,  92 Stat. 2763 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Revenue Act of 1978’.”\nPub. L. 95–502, title II, §\u202f201 ,  Oct. 21, 1978 ,  92 Stat. 1696 , provided that:  “This title [enacting  section 4042 of this title  and sections 1801 to 1804 of Title 33, Navigation and Navigable Waters, amending  section 4293 of this title , and enacting provisions set out as notes under  section 4042 of this title ] may be cited as the ‘Inland Waterways Revenue Act of 1978’.”\nPub. L. 95–227, §\u202f1 ,  Feb. 10, 1978 ,  92 Stat. 11 , provided that:  “This Act [enacting sections 192, 4121, and 4951 to 4953 of this title and  section 934a of Title 30 , Mineral Lands and Mining, amended sections 501, 4218, 4221, 4293, 4946, 6104, 6213, 6405, 6416, 6501, 6503, and 7454 of this title and  section 934 of Title 30  and enacted provisions set out as notes under sections 192 and 4121 of this title and  section 934 of Title 30 ] may be cited as the ‘Black Lung Benefits Revenue Act of 1977’.”\nPub. L. 95–30, §\u202f1(a) ,  May 23, 1977 ,  91 Stat. 126 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Reduction and Simplification Act of 1977’.”\nPub. L. 95–19, §\u202f1 ,  Apr. 12, 1977 ,  91 Stat. 39 , provided that:  “This Act [amending  section 3304 of this title , enacting provisions set out as notes under sections 3302, 3304, and 3309 of this title, and amending provisions set out as notes under sections 3302, 3304, and 3309 of this title and sections 359 and 360 of Title 2, The Congress] may be cited as the ‘Emergency Unemployment Compensation Extension Act of 1977’.”\nPub. L. 94–455, title I, §\u202f101 ,  Oct. 4, 1976 ,  90 Stat. 1525 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Reform Act of 1976’.”\nPub. L. 94–452, §\u202f1 ,  Oct. 2, 1976 ,  90 Stat. 1503 , provided that:  “This Act [enacting  section 6158 of this title , amending sections 311, 1101, 1102, 1103, 6151, 6503, and 6601 of this title, and enacting provisions set out as notes under sections 311, 1101, and 6158 of this title] may be cited as the ‘Bank Holding Company Tax Act of 1976’.”\nPub. L. 94–164, §\u202f1 ,  Dec. 23, 1975 ,  89 Stat. 970 , provided that:  “This Act [amending sections 11, 21, 42, 43, 103, 141, 883, 962, 1561, 3402, 6012, 6153, and 6154 of this title and provisions set out as notes under sections 42, 43, and 3402 of this title, and enacting provisions set out as notes under this section and sections 3, 11, 43, 103, and 883 of this title] may be cited as the ‘Revenue Adjustment Act of 1975’.”\nPub. L. 94–12, §\u202f1(a) ,  Mar. 29, 1975 ,  89 Stat. 26 , provided that:  “This Act [enacting sections, 42, 43, 44, 613A, 907, 955, and 6428 of this title, amending sections 3, 11, 12, 21, 46, 47, 48, 50A, 50B, 56, 141, 214, 535, 613, 703, 851, 901, 902, 951, 954, 962, 993, 1034, 1561, 3304 note, 3402, 6012, 6096, 6201, and 6401 of this title, repealing sections 955 and 963 of this title, and enacting provisions set out as notes under sections 3, 11, 43, 44, 46, 48, 50A, 214, 410, 535, 613A, 907, 955, 993, 3304, 3402, 6428, and 6611 of this title and  section 402 of Title 42 , The Public Health and Welfare] may be cited as the ‘Tax Reduction Act of 1975’.”\nPub. L. 93–69, title I, §\u202f110 ,  July 10, 1973 ,  87 Stat. 166 , provided that:  “This title [amending sections 3201, 3202, 3211, and 3221 of this title and sections 228b, 228c, and 228e of Title 45, Railroads, enacting provisions set out as notes under  section 3201 of this title  and sections 228b, 228c, 228f, and 228 o  of Title 45, and amending provisions set out as notes under  section 228c of Title 45 ] may be cited as the ‘Railroad Retirement Amendments of 1973’.”\nFor short title of  Pub. L. 93–17  as the “Interest Equalization Tax Extension Act of 1973”, see  section 1(a) of Pub. L. 93–17 , set out as a note under  section 2104 of this title .\nPub. L. 92–512, title II, §\u202f201 ,  Oct. 20, 1972 ,  86 Stat. 936 , provided that:  “This title [enacting sections 6361 to 6363 of this title, amending sections 6405 and 7463 of this title, and enacting provisions set out as a note under  section 7463 of this title ] may be cited as the ‘Federal-State Tax Collection Act of 1972’.”\nPub. L. 92–178, §\u202f1(a) ,  Dec. 10, 1971 ,  85 Stat. 497 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Revenue Act of 1971’.”\nFor short title of  Pub. L. 92–9  as the “Interest Equalization Tax Extension Act of 1971”, see  section 1(a) of Pub. L. 92–9 , set out as a note under  section 861 of this title .\nFor short title of  Pub. L. 91–614  as the “Excise, Estate, and Gift Tax Adjustment Act of 1970”, see  section 1 of Pub. L. 91–614 , set out as a Short Title note under  section 2001 of this title .\nPub. L. 91–172, §\u202f1(a) ,  Dec. 30, 1969 ,  83 Stat. 487 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Tax Reform Act of 1969’.”\nFor short title of  Pub. L. 91–128  as the “Interest Equalization Tax Extension Act of 1969”, see  section 1(a) of Pub. L. 91–128 , set out as a note under  section 4182 of this title .\nPub. L. 90–364, §\u202f1(a) ,  June 28, 1968 ,  82 Stat. 251 , provided that:  “This Act [enacting sections 51 and 6425 of this title, amending sections 103, 243, 276, 501, 963, 3402, 4061, 4251, 6020, 6154, 6412, 6651, 6655, 7203, 7502, and 7701 of this title and sections 603, 607, and 1396b of Title 42, The Public Health and Welfare, repealing sections 6016, 6074, and 4251 to 4254 of this title, enacting provisions set out as notes under sections 51, 103, 276, 501, 4061, 6154, and 7502 of this title,  section 3101 of Title 5 , Government Organization and Employees, sections 11 and 757b of former Title 31, Money and Finance, and  section 1396b of Title 42 , and amending notes under  section 1396b of Title 42 ,] may be cited as the ‘Revenue and Expenditure Control Act of 1968’.”\nFor short title of  Pub. L. 90–59  as the “Interest Equalization Tax Extension Act of 1967”, see  section 1(a) of Pub. L. 90–59 , set out as a note under  section 6011 of this title .\nFor short title of title I of  Pub. L. 89–809  as the “Foreign Investors Tax Act of 1966”, see  section 101 of Pub. L. 89–809 , set out as a note under  section 861 of this title .\nFor short title of title III of  Pub. L. 89–809  as the “Presidential Election Campaign Fund Act of 1966”, see  section 301 of Pub. L. 89–809 , set out as a Short Title note under  section 6096 of this title .\nFor short title of  Pub. L. 89–719  as the “Federal Tax Lien Act of 1966”, see  section 1(a) of Pub. L. 89–719 , set out as a Short Title note under  section 6321 of this title .\nPub. L. 89–44, §\u202f1(a) ,  June 21, 1965 ,  79 Stat. 136 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Excise Tax Reduction Act of 1965’.”\nPub. L. 88–348, §\u202f1 ,  June 30, 1964 ,  78 Stat. 237 , provided:  “That this Act [amending sections 165, 4061, 4251, 4261, 5001, 5022, 5041, 5051, 5063, 5701, 5707, and 6412 of this title, and provisions set out as notes under sections 165, 4261, and 5701 of this title] may be cited as the ‘Excise-Tax Rate Extension Act of 1964’.”\nPub. L. 88–272, §\u202f2(a) ,  Feb. 26, 1964 , 78 Stat 19, provided that:  “This Act [see Tables for classification] may be cited as the ‘Revenue Act of 1964’.”\nPub. L. 88–52, §\u202f1 ,  June 29, 1963 ,  77 Stat. 72 , provided:  “That this Act [amending sections 11, 821, 4061, 4251, 4261, 5001, 5022, 5041, 5051, 5063, 5701, 5707, 6412 of this title and provisions set out as notes under sections 4261 and 5701 of this title] may be cited as the ‘Tax Rate Extension Act of 1963’.”\nPub. L. 87–834, §\u202f1(a) ,  Oct. 16, 1962 ,  76 Stat. 960 , provided that:  “This Act [see Tables for classification] may be cited as the ‘Revenue Act of 1962’.”\nFor short title of  Pub. L. 87–792  as the “Self-Employed Individuals Tax Retirement Act of 1962”, see  section 1 of Pub. L. 87–792 , set out as a note under  section 401 of this title .\nPub. L. 87–508, §\u202f1 ,  June 28, 1962 ,  76 Stat. 114 , provided:  “That this Act [amending sections 11, 821, 4061, 4251 to 4253, 4261 to 4264, 5001, 5002, 5041, 5051, 5063, 5701, 6707, 6412, 6416, and 6421 of this title, enacting provisions set out as notes under section 4261, 6416, and 6421 of this title, and amending provisions set out as a note under  section 5701 of this title ] may be cited as the ‘Tax Rate Extension Act of 1962’.”\nPub. L. 87–72, §\u202f1 ,  June 30, 1961 ,  75 Stat. 193 , provided:  “That this Act [amending sections 11, 821, 4061, 4251, 4261, 5001, 5022, 5041, 5051, 5063, 5701, 5707, and 6412 of this title and provisions set out as a note under  section 5701 of this title ] may be cited as the ‘Tax Rate Extension Act of 1961’.”\nPub. L. 86–75, §\u202f1 ,  June 30, 1959 ,  73 Stat. 157 , provided:  “That this Act [amending sections 11, 821, 4061, 4251, 4261, 5001, 5022, 5041, 5051, 5063, 5701, 5707 and 6412 of this title and provisions set out as a note under  section 5701 of this title ] may be cited as the ‘Tax Rate Extension Act of 1959’.”\nPub. L. 86–69, §\u202f1 ,  June 25, 1959 ,  73 Stat. 112 , provided that:  “This Act [amending former part I of subchapter L of this chapter and sections 116, 381, 841, 842, 891, 1016, 1201, 1232, 1504, 4371, and 6501 of this title and enacting provisions set out as notes under sections 801, 6072, and 6655 of this title] may be cited as the ‘Life Insurance Company Income Tax Act of 1959’.”\nPub. L. 85–866, title I, §\u202f1(a) ,  Sept. 2, 1958 ,  72 Stat. 1606 , provided that:  “This title [see Tables for classification] may be cited as the ‘Technical Amendments Act of 1958’.”\nPub. L. 85–866, title II, §\u202f201 ,  Sept. 2, 1958 ,  72 Stat. 1676 , provided that:  “This title [amending sections 165, 172, 179, 535, 1244, 1551, 6161, 6166, 6503, and 6601 of this title and enacting provisions set out as notes under sections 172, 179, 535, 6161 of this title] may be cited as the ‘Small Business Tax Revision Act of 1958’.”\nFor short title of  Pub. L. 85–859  as the “Excise Tax Technical Changes Act of 1958”, see  section 1(a) of Pub. L. 85–859 , set out as a Short Title note under  section 5001 of this title .\nPub. L. 85–475, §\u202f1 ,  June 30, 1958 ,  72 Stat. 259 , provided:  “That this Act [amending sections 11, 821, 4061, 4292, 5001, 5022, 5041, 5051, 5063, 5134, 5701, 5707, 6412, 6415, 6416, 7012, and 7272 of this title and repealing sections 4271 to 4273 and 4281 to 4283 of this title] may be cited as the ‘Tax Rate Extension Act of 1958’.”\nPub. L. 85–12, §\u202f1 ,  Mar. 29, 1957 ,  71 Stat. 9 , provided:  “That this Act [amending sections 11, 821, 4061, 5001, 5022, 5041, 5051, 5063, 5134, 5701, 5707, and 6412 of this title] may be cited as the ‘Tax Rate Extension Act of 1957’.”\nFor short title of title II of act  June 29, 1956  as the “Highway Revenue Act of 1956”, see section 201(a) of act  June 29, 1956 , set out as a note under  section 4041 of this title .\nFor short title of act  Mar. 29, 1956  as the “Tax Rate Extension Act of 1956”, see section 1 of act  Mar. 29, 1956 , set out as a note under  section 4041 of this title .\nAct Mar. 13, 1956, ch. 83, §\u202f1 ,  70 Stat. 36 , provided:  “That this Act [enacting  section 843 of this title  and amending sections 316, 501, 594, 801 to 805, 811 to 813, 816 to 818, 821, 822, 832, 841, 842, 891, 1201, 1504, and 4371 of this title] be cited as the ‘Life Insurance Company Tax Act for 1955’.”\nFor short title of act  Mar. 30, 1955  as the “Tax Rate Extension Act of 1955”, see section 1 of act  Mar. 30, 1955 , set out as a note under  section 4041 of this title .\nPub. L. 111–5, §\u202f3 ,  Feb. 17, 2009 ,  123 Stat. 115 , provided that: \n “(a)   Statement of Purposes .— The purposes of this Act [see Tables for classification] include the following: “(1)  To preserve and create jobs and promote economic recovery. \n \n “(2)  To assist those most impacted by the recession. \n \n “(3)  To provide investments needed to increase economic efficiency by spurring technological advances in science and health. \n \n “(4)  To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits. \n \n “(5)  To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. \n \n \n “(b)   General Principles Concerning Use of Funds .— The President and the heads of Federal departments and agencies shall manage and expend the funds made available in this Act so as to achieve the purposes specified in subsection (a), including commencing expenditures and activities as quickly as possible consistent with prudent management.”\nPub. L. 108–27, title III, §\u202f301(c) ,  May 28, 2003 ,  117 Stat. 759 , provided that:  \n “For purposes of applying section 1(h) of the Internal Revenue Code of 1986 in the case of a taxable year which includes  May 6, 2003 — \n “(1)  The amount of tax determined under subparagraph (B) of section 1(h)(1) of such Code shall be the sum of— “(A)  5 percent of the lesser of— “(i)  the net capital gain determined by taking into account only gain or loss properly taken into account for the portion of the taxable year on or after  May 6, 2003  (determined without regard to collectibles gain or loss, gain described in section 1(h)(6)(A)(i) of such Code, and section 1202 gain), or \n \n “(ii)  the amount on which a tax is determined under such subparagraph (without regard to this subsection), \n \n \n “(B)  8 percent of the lesser of— “(i)  the qualified 5-year gain (as defined in section 1(h)(9) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of this Act [ May 28, 2003 ]) properly taken into account for the portion of the taxable year before  May 6, 2003 , or \n \n “(ii)  the excess (if any) of— \u2001\u2001\u2001\u2001\u2001“(I)  the amount on which a tax is determined under such subparagraph (without regard to this subsection), over \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the amount on which a tax is determined under subparagraph (A), plus \n \n \n \n “(C)  10 percent of the excess (if any) of— “(i)  the amount on which a tax is determined under such subparagraph (without regard to this subsection), over \n \n “(ii)  the sum of the amounts on which a tax is determined under subparagraphs (A) and (B). \n \n \n \n “(2)  The amount of tax determined under [former] subparagraph (C) of section (1)(h)(1) of such Code shall be the sum of— “(A)  15 percent of the lesser of— “(i)  the excess (if any) of the amount of net capital gain determined under subparagraph (A)(i) of paragraph (1) of this subsection over the amount on which a tax is determined under subparagraph (A) of paragraph (1) of this subsection, or \n \n “(ii)  the amount on which a tax is determined under such subparagraph (C) (without regard to this subsection), plus \n \n \n “(B)  20 percent of the excess (if any) of— “(i)  the amount on which a tax is determined under such subparagraph (C) (without regard to this subsection), over \n \n “(ii)  the amount on which a tax is determined under subparagraph (A) of this paragraph. \n \n \n \n “(3)  For purposes of applying section 55(b)(3) of such Code, rules similar to the rules of paragraphs (1) and (2) of this subsection shall apply. \n \n “(4)  In applying this subsection with respect to any pass-thru entity, the determination of when gains and losses are properly taken into account shall be made at the entity level. \n \n “(5)  For purposes of applying section 1(h)(11) of such Code, as added by section 302 of this Act, to this subsection, dividends which are qualified dividend income shall be treated as gain properly taken into account for the portion of the taxable year on or after  May 6, 2003 . \n \n “(6)  Terms used in this subsection which are also used in section 1(h) of such Code shall have the respective meanings that such terms have in such section.”\nPub. L. 105–277, div. J, title IV, §\u202f4001(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–906 , provided that:  “For purposes of applying the amendments made by any title of this division [§§\u202f1000–5301, see Tables for classification] other than this title [see Definitions note set out below for classification], the provisions of this title shall be treated as having been enacted immediately before the provisions of such other titles.”\nPub. L. 105–206, title VI, §\u202f6001(b) ,  July 22, 1998 ,  112 Stat. 790 , provided that:  “For purposes of applying the amendments made by any title of this Act other than this title, the provisions of this title [see Tables for classification] shall be treated as having been enacted immediately before the provisions of such other titles.”\nPub. L. 105–34, title XVI, §\u202f1600 ,  Aug. 5, 1997 ,  111 Stat. 1086 , provided that:  “For purposes of applying the amendments made by any title of this Act other than this title, the provisions of this title [see Tables for classification] shall be treated as having been enacted immediately before the provisions of such other titles.”\nPub. L. 104–188, title I, §\u202f1701 ,  Aug. 20, 1996 ,  110 Stat. 1868 , provided that:  “For purposes of applying the amendments made by any subtitle [subtitle A to F (§§\u202f1111–1621) and H to J (§§\u202f1801–1954) of title I of  Pub. L. 104–188 , see Tables for classification] of this title other than this subtitle [subtitle G (§§\u202f1701–1704) of title I of  Pub. L. 104–188 , see Tables for classification], the provisions of this subtitle shall be treated as having been enacted immediately before the provisions of such other subtitles.”\nPub. L. 101–508, title XI, §\u202f11700 ,  Nov. 5, 1990 ,  104 Stat. 1388–505 , provided that:  “For purposes of applying the amendments made by any subtitle [subtitles A to F (§§\u202f11101–11622) and H and I (§§\u202f11801–11901) of title XI of  Pub. L. 101–508 , see Tables for classification] of this title other than this subtitle [subtitle G (§§\u202f11700–11704) of title XI of  Pub. L. 101–508 , see Tables for classification], the provisions of this subtitle shall be treated as having been enacted immediately before the provisions of such other subtitles.”\nPub. L. 101–239, title VII, §\u202f7801(b) ,  Dec. 19, 1989 ,  103 Stat. 2406 , provided that:  “For purposes of applying the amendments made by any subtitle [subtitles A to G (§§\u202f7101–7743) of title VII of  Pub. L. 101–239 , see Tables for classification] of this title other than this subtitle [subtitle H (§§\u202f7801–7894) of title VII of  Pub. L. 101–239 , see Tables for classification], the provisions of this subtitle shall be treated as having been enacted immediately before the provisions of such other subtitles.”\nPub. L. 99–514, title XVIII, §\u202f1800 ,  Oct. 22, 1986 ,  100 Stat. 2784 , provided that:  “For purposes of applying the amendments made by any title of this Act other than this title, the provisions of this title [see Tables for classification] shall be treated as having been enacted immediately before the provisions of such other titles.”\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f308] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–636, provided that: \n “(a)   Determinations by  OMB.— As soon as practicable after the date of the enactment of this Act [ Dec. 21, 2000 ], the Director of the Office of Management and Budget shall determine with respect to each applicable Federal benefit program whether the CPI computation error for 1999 has or will result in a shortfall in payments to beneficiaries under such program (as compared to payments that would have been made if the error had not occurred). As soon as practicable after the date of the enactment of this Act, but not later than 60 days after such date, the Director shall direct the head of the Federal agency which administers such program to make a payment or payments that, insofar as the Director finds practicable and feasible— “(1)  are targeted to the amount of the shortfall experienced by individual beneficiaries, and \n \n “(2)  compensate for the shortfall. \n \n \n “(b)   Coordination with Federal Agencies .— As soon as practicable after the date of the enactment of this Act [ Dec. 21, 2000 ], each Federal agency that administers an applicable Federal benefit program shall, in accordance with such guidelines as are issued by the Director pursuant to this section, make an initial determination of whether, and the extent to which, the CPI computation error for 1999 has or will result in a shortfall in payments to beneficiaries of an applicable Federal benefit program administered by such agency. Not later than 30 days after such date, the head of such agency shall submit a report to the Director and to each House of the Congress of such determination, together with a complete description of the nature of the shortfall. \n \n “(c)   Implementation Pursuant to Agency Reports .— Upon receipt of the report submitted by a Federal agency pursuant to subsection (b), the Director shall review the initial determination of the agency, the agency’s description of the nature of the shortfall, and the compensation payments proposed by the agency. Prior to directing payment of such payments pursuant to subsection (a), the Director shall make appropriate adjustments (if any) in the compensation payments proposed by the agency that the Director determines are necessary to comply with the requirements of subsection (a) and transmit to the agency a summary report of the review, indicating any adjustments made by the Director. The agency shall make the compensation payments as directed by the Director pursuant to subsection (a) in accordance with the Director’s summary report. \n \n “(d)   Income Disregard Under Federal Means-Tested Benefit Programs .— A payment made under this section to compensate for a shortfall in benefits shall, in accordance with guidelines issued by the Director pursuant to this section, be disregarded in determining income under title VIII of the Social Security Act [ 42 U.S.C. 1001  et seq.] or any applicable Federal benefit program that is means-tested. \n \n “(e)   Funding .— Funds otherwise available under each applicable Federal benefit program for making benefit payments under such program are hereby made available for making compensation payments under this section in connection with such program. \n \n “(f)   No Judicial Review .— No action taken pursuant to this section shall be subject to judicial review. \n \n “(g)   Director’s Report .— Not later than  April 1, 2001 , the Director shall submit to each House of the Congress a report on the activities performed by the Director pursuant to this section. \n \n “(h)   Definitions .— For purposes of this section: “(1)   Applicable federal benefit program .— The term ‘applicable Federal benefit program’ means any program of the Government of the United States providing for regular or periodic payments or cash assistance paid directly to individual beneficiaries, as determined by the Director of the Office of Management and Budget. \n \n “(2)   Federal agency .— The term ‘Federal agency’ means a department, agency, or instrumentality of the Government of the United States. \n \n “(3)  CPI  computation error for  1999.— The term ‘CPI computation error for 1999’ means the error in the computation of the Consumer Price Index announced by the Bureau of Labor Statistics on  September 28, 2000 . \n \n \n “(i)   Tax Provisions .— In the case of taxable years (and other periods) beginning after  December 31, 2000 , if any Consumer Price Index (as defined in section 1(f)(5) of the Internal Revenue Code of 1986) reflects the CPI computation error for 1999— “(1)  the correct amount of such Index shall (in such manner and to such extent as the Secretary of the Treasury determines to be appropriate) be taken into account for purposes of such Code, and \n \n “(2)  tables prescribed under section 1(f) of such Code to reflect such correct amount shall apply in lieu of any tables that were prescribed based on the erroneous amount.”\nPub. L. 105–277, div. J, title IV, §\u202f4002(i)(2) ,  Oct. 21, 1998 ,  112 Stat. 2681–907 , provided that: \n “(2) (A)  Subparagraphs (A)(i)(II), (A)(ii)(II), and (B)(ii) of section 1(h)(13) of the 1986 Code shall not apply to any distribution after  December 31, 1997 , by a regulated investment company or a real estate investment trust with respect to— “(i)  gains and losses recognized directly by such company or trust, and \n \n “(ii)  amounts properly taken into account by such company or trust by reason of holding (directly or indirectly) an interest in another such company or trust to the extent that such subparagraphs did not apply to such other company or trust with respect to such amounts. \n \n \n “(B)  Subparagraph (A) shall not apply to any distribution which is treated under section 852(b)(7) or 857(b)(8) of the 1986 Code as received on  December 31, 1997 . \n \n “(C)  For purposes of subparagraph (A), any amount which is includible in gross income of its shareholders under section 852(b)(3)(D) or 857(b)(3)(D) of the 1986 Code after  December 31, 1997 , shall be treated as distributed after such date. \n \n “(D) (i)  For purposes of subparagraph (A), in the case of a qualified partnership with respect to which a regulated investment company meets the holding requirement of clause (iii)— “(I)  the subparagraphs referred to in subparagraph (A) shall not apply to gains and losses recognized directly by such partnership for purposes of determining such company’s distributive share of such gains and losses, and \n \n “(II)  such company’s distributive share of such gains and losses (as so determined) shall be treated as recognized directly by such company. \n \n\n The preceding sentence shall apply only if the qualified partnership provides the company with written documentation of such distributive share as so determined. \n \n “(ii)  For purposes of clause (i), the term ‘qualified partnership’ means, with respect to a regulated investment company, any partnership if— “(I)  the partnership is an investment company registered under the Investment Company Act of 1940 [ 15 U.S.C. 80a–1  et seq.], \n \n “(II)  the regulated investment company is permitted to invest in such partnership by reason of section 12(d)(1)(E) of such Act [ 15 U.S.C. 80a–12(d)(1)(E) ] or an exemptive order of the Securities and Exchange Commission under such section, and \n \n “(III)  the regulated investment company and the partnership have the same taxable year. \n \n \n “(iii)  A regulated investment company meets the holding requirement of this clause with respect to a qualified partnership if (as of  January 1, 1998 )— “(I)  the value of the interests of the regulated investment company in such partnership is 35 percent or more of the value of such company’s total assets, or \n \n “(II)  the value of the interests of the regulated investment company in such partnership and all other qualified partnerships is 90 percent or more of the value of such company’s total assets.”\nPub. L. 105–277, div. J, title IV, §\u202f4003(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–909 , as amended by  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f312(b)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–640, provided that:  “In the case of any capital gain distribution made after 1997 by a trust to which section 664 of the 1986 Code applies with respect to amounts properly taken into account by such trust during 1997, paragraphs (5)(A)(i)(I), (5)(A)(ii)(I), (7)(A)(i)(II), and (13)(A) of section 1(h) of the 1986 Code (as in effect for taxable years ending on  December 31, 1997 ) shall not apply.”\nPub. L. 105–34, title III, §\u202f311(e) ,  Aug. 5, 1997 ,  111 Stat. 835 , as amended by  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f314(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–643;  Pub. L. 107–147, title IV, §\u202f414(a) ,  Mar. 9, 2002 ,  116 Stat. 54 , provided that:  \n “For purposes of the Internal Revenue Code of 1986— \n “(1)   In general .— A taxpayer other than a corporation may elect to treat— “(A)  any readily tradable stock (which is a capital asset) held by such taxpayer on  January 1, 2001 , and not sold before the next business day after such date, as having been sold on such next business day for an amount equal to its closing market price on such next business day (and as having been reacquired on such next business day for an amount equal to such closing market price), and \n \n “(B)  any other capital asset or property used in the trade or business (as defined in section 1231(b) of the Internal Revenue Code of 1986) held by the taxpayer on  January 1, 2001 , as having been sold on such date for an amount equal to its fair market value on such date (and as having been reacquired on such date for an amount equal to such fair market value). \n \n \n “(2)   Treatment of gain or loss.— “(A)  Any gain resulting from an election under paragraph (1) shall be treated as received or accrued on the date the asset is treated as sold under paragraph (1) and shall be included in gross income notwithstanding any provision of the Internal Revenue Code of 1986. \n \n “(B)  Any loss resulting from an election under paragraph (1) shall not be allowed for any taxable year. \n \n \n “(3)   Election .— An election under paragraph (1) shall be made in such manner as the Secretary of the Treasury or his delegate may prescribe and shall specify the assets for which such election is made. Such an election, once made with respect to any asset, shall be irrevocable. Such an election shall not apply to any asset which is disposed of (in a transaction in which gain or loss is recognized in whole or in part) before the close of the 1-year period beginning on the date that the asset would have been treated as sold under such election. \n \n “(4)   Readily tradable stock .— For purposes of this subsection, the term ‘readily tradable stock’ means any stock which, as of  January 1, 2001 , is readily tradable on an established securities market or otherwise. \n \n “(5)   Disposition of interest in passive activity .— Section 469(g)(1)(A) of the Internal Revenue Code of 1986 shall not apply by reason of an election made under paragraph (1).”\n[ Pub. L. 107–147, title IV, §\u202f414(b) ,  Mar. 9, 2002 ,  116 Stat. 54 , provided that:  “The amendments made by this section [amending  section 311(e) of Pub. L. 105–34 , set out above] shall take effect as if included in section 311 of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ].” \n]\nPub. L. 103–66, title XIII, §\u202f13201(d) ,  Aug. 10, 1993 ,  107 Stat. 459 , provided that: \n “(1)   In general .— At the election of the taxpayer, the additional 1993 taxes may be paid in 3 equal installments. \n \n “(2)   Dates for paying installments .— In the case of any tax payable in installments by reason of paragraph (1)— “(A)  the first installment shall be paid on or before the due date for the taxpayer’s taxable year beginning in calendar year 1993, \n \n “(B)  the second installment shall be paid on or before the date 1 year after the date determined under subparagraph (A), and \n \n “(C)  the third installment shall be paid on or before the date 2 years after the date determined under subparagraph (A). \n \n\n For purposes of the preceding sentence, the term ‘due date’ means the date prescribed for filing the taxpayer’s return determined without regard to extensions. \n \n “(3)   Extension without interest .— For purposes of section 6601 of the Internal Revenue Code of 1986, the date prescribed for the payment of any tax payable in installments under paragraph (1) shall be determined with regard to the extension under paragraph (1). \n \n “(4)   Additional  1993  taxes.— “(A)   In general .— For purposes of this subsection, the term ‘additional 1993 taxes’ means the excess of— “(i)  the taxpayer’s net chapter 1 liability as shown on the taxpayer’s return for the taxpayer’s taxable year beginning in calendar year 1993, over \n \n “(ii)  the amount which would have been the taxpayer’s net chapter 1 liability for such taxable year if such liability had been determined using the rates which would have been in effect under section 1 of the Internal Revenue Code of 1986 for taxable years beginning in calendar year 1993 but for the amendments made by this section [amending this section and sections 41, 63, 68, 132, 151, 453A, 513, 531, and 541 of this title] and section 13202 [amending this section and sections 531 and 541 of this title] and such liability had otherwise been determined on the basis of the amounts shown on the taxpayer’s return. \n \n \n “(B)   Net chapter 1 liability .— For purposes of subparagraph (A), the term ‘net chapter 1 liability’ means the liability for tax under chapter 1 of the Internal Revenue Code of 1986 determined— “(i)  after the application of any credit against such tax other than the credits under sections 31 and 34, and \n \n “(ii)  before crediting any payment of estimated tax for the taxable year. \n \n \n \n “(5)   Acceleration of payments .— If the taxpayer does not pay any installment under this section on or before the date prescribed for its payment or if the Secretary of the Treasury or his delegate believes that the collection of any amount payable in installments under this section is in jeopardy, the Secretary shall immediately terminate the extension under paragraph (1) and the whole of the unpaid tax shall be paid on notice and demand from the Secretary. \n \n “(6)   Election on return .— An election under paragraph (1) shall be made on the taxpayer’s return for the taxpayer’s taxable year beginning in calendar year 1993. \n \n “(7)   Exception for estates and trusts .— This subsection shall not apply in the case of an estate or trust.”\nPub. L. 99–514, title III, §\u202f302(c) ,  Oct. 22, 1986 ,  100 Stat. 2218 , which related to long-term capital gain on rights to royalties paid under particular leases and assignments, was repealed by  Pub. L. 100–647, title I, §\u202f1003(b)(1) ,  Nov. 10, 1988 ,  102 Stat. 3382 .\nPub. L. 99–509, title VIII, §\u202f8081 ,  Oct. 21, 1986 ,  100 Stat. 1965 , provided that:  \n “Nothing in any provision of this Act [see Tables for classifications] (other than this title) shall be construed as— \n “(1)  imposing any tax (or exempting any person or property from any tax), \n \n “(2)  establishing any trust fund, or \n \n “(3)  authorizing amounts to be expended from any trust fund.”\n[S.Con.Res. 174, agreed to  Oct. 18, 1986 , provided: “That, in the enrollment of the bill (H.R. 5300) to provide for reconciliation pursuant to section 2 of the concurrent resolution on the budget for fiscal year 1987, the Clerk of the House of Representatives shall insert at the end of section 8081 of the bill the following: Paragraph (3) shall not apply to any authorization made by title IX of this Act.” As a result of clerical error, the sentence was inserted at the end of section 8101 of the bill, and appears at the end of  section 8101 of Pub. L. 99–509 ,  100 Stat. 1967 .]\nPub. L. 99–499, title V, §\u202f531 ,  Oct. 17, 1986 ,  100 Stat. 1782 , provided that:  \n “Notwithstanding any provision of this Act [see Tables for classifications] not contained in this title [see Short Title of 1986 Amendment note above], any provision of this Act (not contained in this title) which— “(1)  imposes any tax, premium, or fee, \n \n “(2)  establishes any trust fund, or \n \n “(3)  authorizes amounts to be expended from any trust fund, \n \n\n shall have no force or effect.”\nPub. L. 97–448, title I, §\u202f101(a)(3) ,  Jan. 12, 1983 ,  96 Stat. 2366 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If any figure in any table— “(A)  which is set forth in section 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 101 of the Economic Recovery Tax Act of 1981 [ Pub. L. 97–34, title I, §\u202f101 ,  Aug. 13, 1981 ,  95 Stat. 176 ], and \n \n “(B)  which applies to married individuals filing separately or to estates and trusts, \n \n\n differs by not more than 50 cents from the correct amount under the formula used in constructing such table, such figure is hereby corrected to the correct amount.” [See 1982 Amendment note above.]\nPub. L. 95–600, §\u202f3 ,  Nov. 6, 1978 ,  92 Stat. 2767 , provided that:  “As a matter of national policy the rate of growth in Federal outlays, adjusted for inflation, should not exceed 1 percent per year between fiscal year 1979 and fiscal year 1983; Federal outlays as a percentage of gross national product should decline to below 21 percent in fiscal year 1980, 20.5 percent in fiscal year 1981, 20 percent in fiscal year 1982 and 19.5 percent in fiscal year 1983; and the Federal budget should be balanced in fiscal years 1982 and 1983. If these conditions are met, it is the intention that the tax-writing committees of Congress will report legislation providing significant tax reductions for individuals to the extent that these tax reductions are justified in the light of prevailing and expected economic conditions.”\nPub. L. 94–455, title XIX, §\u202f1908 ,  Oct. 4, 1976 ,  90 Stat. 1836 , provided that:  \n “For purposes of any amendment made by any provision of this Act [see Tables for classification] (other than this title)— “(1)  which contains a term the meaning of which is defined in or modified by any provision of this title, and \n \n “(2)  which has an effective date earlier than the effective date of the provision of this title defining or modifying such term, \n \n\n that definition or modification shall be considered to take effect as of such earlier effective date.”\nPub. L. 94–164, §\u202f1A ,  Dec. 23, 1975 ,  89 Stat. 970 , provided that: \n “(a)  Congress is determined to continue the tax reduction for the first 6 months of 1976 in order to assure continued economic recovery. \n \n “(b)  Congress is also determined to continue to control spending levels in order to reduce the national deficit. \n \n “(c)  Congress reaffirms its commitments to the procedures established by the Congressional Budget and Impoundment Control Act of 1974 [see Tables for classification of  Pub. L. 93–344 ,  July 12, 1974 ,  88 Stat. 297 ] under which it has already established a binding spending ceiling for the fiscal year 1976. \n \n “(d)  If the Congress adopts a continuation of the tax reduction provided by this Act [see Short Title of 1975 Amendment note above] beyond  June 30, 1976 , and if economic conditions warrant doing so, Congress shall provide, through the procedures in the Budget Act [ Pub. L. 93–344 ], for reductions in the level of spending in the fiscal year 1977 below what would otherwise occur, equal to any additional reduction in taxes (from the 1974 tax rate levels) provided for the fiscal year 1977:  Provided, however , That nothing shall preclude the right of the Congress to pass a budget resolution containing a higher or lower expenditure figure if the Congress concludes that this is warranted by economic conditions or unforeseen circumstances.”\nPub. L. 88–272, §\u202f1 ,  Feb. 26, 1964 ,  78 Stat. 19 , provided that:  “It is the sense of Congress that the tax reduction provided by this Act [see Short Title of 1964 Amendment note above] through stimulation of the economy, will, after a brief transitional period, raise (rather than lower) revenues and that such revenue increases should first be used to eliminate the deficits in the administrative budgets and then to reduce the public debt. To further the objective of obtaining balanced budgets in the near future, Congress by this action, recognizes the importance of taking all reasonable means to restrain Government spending and urges the President to declare his accord with this objective.”\nPub. L. 105–277, div. J, title IV, §\u202f4001(a) ,  Oct. 21, 1998 ,  112 Stat. 2681–906 , provided that:  \n “For purposes of this title [amending this section, sections 51, 56, 67, 68, 86, 135, 137, 163, 172, 219, 221, 264, 351, 368, 408A, 469, 873, 954, 2001, 2031, 6015, 6103, 6159, 6311, 6404, 6693, 7421, 7443A, 7491, 9503, and 9510 of this title, and sections 401 and 407 of Title 42, The Public Health and Welfare, enacting provisions set out as notes under this section, sections 51, 67, 68, 86, 172, 833, 6103, and 9503 of this title, and  section 401 of Title 42 , and amending provisions set out as notes under sections 6601 and 7508A of this title]— \n “(1)  1986  code .— The term ‘1986 Code’ means the Internal Revenue Code of 1986. \n \n “(2)  1998  act .— The term ‘1998 Act’ means the Internal Revenue Service Restructuring and Reform Act of 1998 ( Public Law 105–206 ) [see Tables for classification]. \n \n “(3)  1997  act .— The term ‘1997 Act’ means the Taxpayer Relief Act of 1997 ( Public Law 105–34 ) [see Tables for classification].”\nProvisions relating to inflation adjustment of items in sections 1, 23, 24, 25A, 25B, 32, 36B, 42, 45R, 55, 59, 62, 63, 68, 125, 132, 135, 137, 146, 147, 148, 151, 152, 179, 179D, 199A, 213, 219, 220, 221, 223, 408A, 448, 461, 512, 513, 642, 685, 831, 877, 877A, 911, 1274A, 2010, 2032A, 2503, 2523, 2631, 4001, 4003, 4161, 4261, 5000A, 6012, 6013, 6033, 6039F, 6323, 6334, 6601, 6651, 6652, 6695, 6698, 6699, 6721, 6722, 7345, 7430, 7702B, and 9831 of this title for certain years were contained in the following:\n2023—Revenue Procedure 2022–38.\n2022—Revenue Procedure 2021–45.\n2021—Revenue Procedure 2020–45.\n2020—Revenue Procedure 2019–44.\n2019—Revenue Procedure 2018–57.\n2018—Revenue Procedure 2017–58.\n2017—Revenue Procedure 2016–55.\n2016—Revenue Procedure 2015–53, as modified by Revenue Procedure 2016–11.\n2015—Revenue Procedures 2014–61 and 2016–11.\n2014—Revenue Procedure 2013–35.\n2013—Revenue Procedures 2012–41 and 2013–15.\n2012—Revenue Procedure 2011–52, as modified by Revenue Procedure 2013–15.\n2011—Revenue Procedures 2010–40 and 2011–12.\n2010—Revenue Procedures 2009–50, 2010–24, and 2010–35.\n2009—Revenue Procedure 2008–66.\n2008—Revenue Procedure 2007–66.\n2007—Revenue Procedures 2006–53 and 2007–36.\n2006—Revenue Procedure 2005–70.\n2005—Revenue Procedure 2004–71.\n2004—Revenue Procedure 2003–85.\n2003—Revenue Procedure 2002–70.\n2002—Revenue Procedure 2001–59.\n2001—Revenue Procedure 2001–13.\n2000—Revenue Procedure 99–42.\n1999—Revenue Procedure 98–61.\n1998—Revenue Procedure 97–57.\n1997—Revenue Procedure 96–59.\n1996—Revenue Procedure 95–53.\n1995—Revenue Procedure 94–72.\n1994—Revenue Procedure 93–49.\n1993—Revenue Procedure 92–102.\n1992—Revenue Procedure 91–65.\n1991—Revenue Procedure 90–64.\n1990—Revenue Procedure 90–7.\n1989—Revenue Procedure 88–56.\n1986—Revenue Procedure 85–55.\n1985—Revenue Procedure 84–79.\nEx. Ord. No. 14082,  Sept. 12, 2022 , 87 F.R. 56861, provided:\nBy the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to effectively implement the historic energy and infrastructure provisions in  Public Law 117–169 , commonly referred to as the Inflation Reduction Act of 2022 (the “Act”) [see Tables for classification], and to accelerate United States global leadership in clean energy innovation, manufacturing, and deployment in a way that cuts consumer energy costs, creates well-paying union jobs and sustainable and equitable economic opportunity, advances environmental justice, and addresses the climate crisis, it is hereby ordered as follows:\nSection  1.  Background . The Act is the single largest and most ambitious investment in the ability of the United States to advance clean energy, cut consumer energy costs, confront the climate crisis, promote environmental justice, and strengthen energy security, among other vital provisions that will lower costs for families, reduce the deficit, and grow and strengthen the economy. The Act will:\n(a) build on the once-in-a-generation investment in the infrastructure and competitiveness of the United States set forth in the Infrastructure Investment and Jobs Act ( Public Law 117–58 ) [see Tables for classification] by accelerating the deployment of clean energy technologies, making home energy efficiency and clean energy installations more affordable, and incentivizing the purchase of electric vehicles;\n(b) boost energy security and lower energy costs for families, businesses, and government;\n(c) revitalize American manufacturing by investing in domestic clean energy supply chains and creating well-paying union jobs, including in traditional energy communities;\n(d) improve public health and advance environmental justice and economic opportunity for frontline communities who disproportionately bear the brunt of cumulative exposure to industrial and energy pollution;\n(e) promote climate justice by reducing harmful greenhouse gas emissions in line with the goal of realizing net-zero emissions by no later than 2050;\n(f) harness nature-based solutions—including climate-smart agriculture and forestry—that deliver economic benefits for rural communities, Tribes, farmers, ranchers, and forest landowners;\n(g) expand research and accelerate innovation in the development of clean energy, climate, and related technologies; and\n(h) increase the resilience of our communities in the face of a changing climate.\nAchieving these goals will require effective implementation of the Act by my Administration, as well as by State, local, Tribal, and territorial governments.\nSec.  2.  Implementation Priorities . In implementing the Act, all agencies (as described in  section 3502(1) of title 44 , United States Code, except for the agencies described in  section 3502(5) of title 44 ) shall, as appropriate and to the extent consistent with law, prioritize:\n(a) investing public dollars effectively and efficiently, working to avoid waste, and achieving measurable, demonstrable outcomes for the American people;\n(b) driving progress to achieve the climate goals of the United States to reduce greenhouse gas emissions 50–52 percent below 2005 levels in 2030, achieve a carbon pollution-free electricity sector by 2035, and achieve net-zero emissions by no later than 2050;\n(c) advancing environmental and climate justice through an all-of-government approach, including through the Justice40 Initiative set forth in Executive Order 14008 of  January 27, 2021  (Tackling the Climate Crisis at Home and Abroad) [ 42 U.S.C. 4321  note], to protect and improve the health and well-being of fence-line and frontline communities in the United States;\n(d) promoting construction of clean energy generation, storage, and transmission, and enabling technologies through efficient, effective mechanisms that incorporate community engagement;\n(e) increasing the competitiveness of the United States economy and investment in critical supply chains, including through the Act’s incentives and measures to strengthen domestic manufacturing and supply chains;\n(f) increasing high-quality job opportunities for American workers and improving equitable access to these jobs, including in traditional energy communities, through the timely implementation of the Act’s requirements for prevailing wages and registered apprenticeships and by focusing on high labor standards and the free and fair chance to join a union;\n(g) reducing energy costs for working families, businesses, and governments at all levels while increasing energy security for the benefit of United States economic competitiveness and national security;\n(h) accelerating innovation by directing the scientific and technical expertise of America’s researchers, businesses, and workers toward achieving breakthroughs in clean energy and climate technologies; and\n(i) effectively coordinating with State, local, Tribal, and territorial governments, as well as with private-sector stakeholders and nongovernmental organizations, in implementing the critical investments outlined in this section to build sustainable, resilient communities.\nSec.  3.  White House Office on Clean Energy Innovation and Implementation . There is hereby established the White House Office on Clean Energy Innovation and Implementation within the Executive Office of the President, which shall coordinate the policymaking process with respect to implementing the energy and infrastructure provisions of the Act and other essential initiatives. The White House Office on Clean Energy Innovation and Implementation shall have a staff headed by the Senior Advisor for Clean Energy Innovation and Implementation; shall have such staff and other assistance as may be necessary to carry out the provisions of this order, subject to the availability of appropriations; and may work with established or ad hoc committees and interagency groups.\nSec.  4.  Interagency Coordination . (a) [Amended Ex. Ord. No. 14008, set out as a note under  section 4321 of Title 42 , The Public Health and Welfare.]\n(b) [Amended Ex. Ord. No. 12898, set out as a note under  section 4321 of Title 42 .]\n(c) [Amended Ex. Ord. No. 14052, set out as a note under  section 101 of Title 23 , Highways.]\nSec.  5.  General Provisions . (a) Nothing in this order shall be construed to impair or otherwise affect:\n(i) the authority granted by law to an executive department or agency, or the head thereof; or\n(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.\n(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.\n(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON INDIVIDUALS'},
  'content': 'For purposes of this part, an individual shall be treated as not married at the close of the taxable year if such individual is so treated under the provisions of section 7703(b).\nIn the case of a nonresident alien individual, the taxes imposed by sections 1 and 55 shall apply only as provided by section 871 or 877.\nFor definition of taxable income, see section 63.\n2005—Subsec. (b)(2)(C).  Pub. L. 109–135  substituted “subparagraph (B)” for “subparagraph (C)”.\n2004—Subsec. (a)(1)(B)(i).  Pub. L. 108–311, §\u202f207(1) , inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\nSubsec. (b)(1)(A)(i).  Pub. L. 108–311, §\u202f202(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “a son, stepson, daughter, or stepdaughter of the taxpayer, or a descendant of a son or daughter of the taxpayer, but if such son, stepson, daughter, stepdaughter, or descendant is married at the close of the taxpayer’s taxable year, only if the taxpayer is entitled to a deduction for the taxable year for such person under section 151 (or would be so entitled but for paragraph (2) or (4) of section 152(e)), or”.\nSubsec. (b)(2).  Pub. L. 108–311, §\u202f202(b)(1) , redesignated subpars. (B) to (D) as (A) to (C), respectively, and struck out former subpar. (A) which read as follows: “a legally adopted child of a person shall be considered a child of such person by blood;”.\nSubsec. (b)(3)(B)(i), (ii).  Pub. L. 108–311, §\u202f202(b)(2) , amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) read as follows:\n“(i) paragraph (9) of section 152(a), or\n“(ii) subsection (c) of section 152.”\n1988—Subsec. (d).  Pub. L. 100–647  substituted “the taxes imposed by sections 1 and 55” for “the tax imposed by section 1”.\n1986—Subsec. (a)(3)(B).  Pub. L. 99–514, §\u202f1708(a)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the date which is—\n“(i)  December 31, 1982 , in the case of service in the combat zone designated for purposes of the Vietnam conflict, or\n“(ii) 2 years after the date designated under section 112 as the date of termination of combatant activities in that zone, in the case of any combat zone other than that referred to in clause (i).”\nSubsec. (c).  Pub. L. 99–514, §\u202f1301(j)(10) , substituted “section 7703(b)” for “section 143(b)”.\n1984—Subsec. (b)(1)(A).  Pub. L. 98–369, §\u202f423(c)(2)(A) , substituted “which constitutes for more than one-half of such taxable year” for “which constitutes for such taxable year”.\nSubsec. (b)(1)(A)(i).  Pub. L. 98–369, §\u202f423(c)(2)(B) , inserted “(or would be so entitled but for paragraph (2) or (4) of section 152(e))”.\n1983—Subsec. (a)(3)(B)(i).  Pub. L. 97–448  substituted “ December 31, 1982 ” for “ January 2, 1978 ”.\n1976—Subsec. (a)(3)(B).  Pub. L. 94–569  substituted “the date which is” for “the date which is 2 years after” in provisions preceding cl. (i), substituted “ January 2, 1978 ” for “the date of the enactment of this paragraph” in cl. (i), and substituted “2 years after the date” for “the date” in cl. (ii).\nSubsec. (b)(3)(B)(ii).  Pub. L. 94–455, §\u202f1901(b)(9) , redesignated cl. (iii) as (ii) and struck out former cl. (ii) which provided that an individual who was a dependent solely by reason of par. (10) of section 152(a) would not be considered as a head of a household.\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(1) , substituted “shall be treated as not married at the close of the taxable year” for “shall not be considered as married”.\n1975—Subsec. (a)(3).  Pub. L. 93–597  added par. (3).\n1969—Subsec. (a).  Pub. L. 91–172  redesignated subsec. (b) as (a). See sec. 1(a) of this title.\nSubsec. (b).  Pub. L. 91–172  redesignated provisions of former section 1(b)(2) to (4) of this title as subsec. (b). Former subsec. (b) redesignated (a), with minor changes.\nSubsec. (c).  Pub. L. 91–172  added subsec. (c).\nSubsec. (d).  Pub. L. 91–172  redesignated as subsec. (d) provisions of former section 1(d) with minor changes.\nSubsec. (e).  Pub. L. 91–172  redesignated as subsec. (e) provisions of former section 1(e).\n1964—Subsec. (a).  Pub. L. 88–272  inserted reference to section 141.\nPub. L. 108–311, title II, §\u202f208 ,  Oct. 4, 2004 ,  118 Stat. 1178 , provided that:  “The amendments made by this title [amending this section and sections 21, 24, 25B, 32, 42, 51, 72, 105, 120, 125, 129, 132, 151 to 153, 170, 213, 220, 221, 529, 2032A, 2057, 7701, 7702B, and 7703 of this title] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1301(j)(10) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nPub. L. 99–514, title XVII, §\u202f1708(b) ,  Oct. 22, 1986 ,  100 Stat. 2783 , provided that:  “The amendments made by this section [amending this section and sections 692, 6013, and 7508 of this title] shall apply to taxable years beginning after  December 31, 1982 .”\nPub. L. 98–369, div. A, title IV, §\u202f423(d) ,  July 18, 1984 ,  98 Stat. 801 , provided that:  “The amendments made by this section [amending this section and sections 43, 44A, 105, 143, 152, and 213 of this title] shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 94–455, title XIX, §\u202f1901(d) ,  Oct. 4, 1976 ,  90 Stat. 1803 , provided that:  “Except as otherwise expressly provided in this section, the amendments made by this section [see Tables for classification] shall apply with respect to taxable years beginning after  December 31, 1976 . The amendments made by subsections (a)(29) and (b)(10) shall apply with respect to taxable years ending after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nAmendment by  Pub. L. 93–597  applicable to taxable years ending on or after  Feb. 28, 1961 , see  section 3(c) of Pub. L. 93–597 , set out as a note under  section 6013 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1970 , except that subsec. (c) is applicable to taxable years beginning after  Dec. 31, 1969 , see  section 803(f) of Pub. L. 91–172 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 88–272 , except for purposes of  section 21 of this title , effective with respect to taxable years beginning after  Dec. 31, 1963 , see  section 131 of Pub. L. 88–272 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON INDIVIDUALS'},
  'content': 'For purposes of paragraph (1), the term “ceiling amount” means, with respect to any taxpayer, the amount (not less than $20,000) determined by the Secretary for the tax rate category in which such taxpayer falls.\nThe Secretary may provide that this section shall apply also for any taxable year to individuals who itemize their deductions. Any tables prescribed under the preceding sentence shall be on the basis of taxable income.\nFor purposes of this title, the tax imposed by this section shall be treated as tax imposed by section 1.\nWhenever it is necessary to determine the taxable income of an individual to whom this section applies, the taxable income shall be determined under section 63.\nFor computation of tax by Secretary, see section 6014.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f102(b) , substituted subsec. (a) for former subsec. (a) which read as follows:\n“(1)  In general .—In lieu of the tax imposed by section 1, there is hereby imposed for each taxable year on the tax table income of every individual whose tax table income for such year does not exceed the ceiling amount, a tax determined under tables, applicable to such taxable year, which shall be prescribed by the Secretary and which shall be in such form as he determines appropriate. In the tables so prescribed, the amounts of tax shall be computed on the basis of the rates prescribed by section 1.\n“(2)  Ceiling amount defined .—For purposes of paragraph (1), the term ‘ceiling amount’ means, with respect to any taxpayer, the amount (not less than $20,000) determined by the Secretary for the tax rate category in which such taxpayer falls.\n“(3)  Certain taxpayers with large number of exemptions .—The Secretary may exclude from the application of this section taxpayers in any tax rate category having more than the number of exemptions for that category determined by the Secretary.\n“(4)  Tax table income defined .—For purposes of this section, the term ‘tax table income’ means adjusted gross income—\n“(A) reduced by the sum of—\n“(i) the excess itemized deductions, and\n“(ii) the direct charitable deduction, and\n“(B) increased (in the case of an individual to whom section 63(e) applies) by the unused zero bracket amount.\n“(5)  Section may be applied on the basis of taxable income .—The Secretary may provide that this section shall be applied for any taxable year on the basis of taxable income in lieu of tax table income.”\nSubsec. (b).  Pub. L. 99–514, §\u202f141(b)(1) , struck out par. (1) which read: “an individual to whom section 1301 (relating to income averaging) applies for the taxable year,” and redesignated pars. (2) and (3) as (1) and (2), respectively.\n1981—Subsec. (a)(1).  Pub. L. 97–34, §\u202f101(b)(2)(B) , inserted “and which shall be in such form as he determines appropriate” after “Secretary”.\nSubsec. (a)(4)(A).  Pub. L. 97–34, §\u202f121(c)(3) , substituted “reduced by the sum of (i) the excess itemized deductions, and (ii) the direct charitable deduction” for “reduced by the excess itemized deductions”.\nSubsec. (a)(5).  Pub. L. 97–34, §\u202f101(b)(2)(C) , added par. (5).\nSubsec. (b)(1).  Pub. L. 97–34, §\u202f101(c)(2)(A) , substituted “an individual to whom section 1301 (relating to income averaging) applies for the taxable year” for “an individual to whom (A) section 1301 (relating to income averaging), or (B) section 1348 (relating to maximum rate on personal service income), applies for the taxable year”.\n1980—Subsec. (b)(1).  Pub. L. 96–222, §\u202f108(a)(1)(E) , redesignated subpars. (B) and (C) as (A) and (B), respectively.\nPub. L. 95–615, §\u202f202(f) , as added by  Pub. L. 96–222, §\u202f108(a)(1)(A) , struck out subpar. (A) which related to earned income from sources without the United States under  section 911 of this title .\n1978—Subsec. (b)(1).  Pub. L. 95–600  redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which related to the alternative capital gains tax under  section 1201 of this title .\n1977— Pub. L. 95–30  struck out “having taxable income of less than $20,000” after “individuals” in section catchline.\nSubsec. (a).  Pub. L. 95–30  designated existing provisions as par. (1), substituted “tax table income” for “taxable income” and “does not exceed the ceiling amount” for “does not exceed $20,000”, and added pars. (2) to (4).\nSubsecs. (b) to (e).  Pub. L. 95–30  added subsec. (b), redesignated former subsec. (b) as (c), and added subsecs. (d) and (e).\n1976— Pub. L. 94–455  designated existing provisions as subsec. (a), substituted provision relating to taxable income for such year does not exceed $20,000 for provision relating to adjusted gross income for such year is less than $15,000 and who has elected for such year to pay the tax imposed by this section, struck out “or his delegate” after “Secretary”, “beginning after  Dec. 31, 1969 ” after “each taxable year”, struck out provision requiring computation of taxable income by using standard deduction, and added subsec. (b).\n1975— Pub. L. 94–12  substituted “$15,000” for “$10,000”.\n1969— Pub. L. 91–172  raised the individual gross income limit of $5,000 to $10,000 for exercising the option and substituted provision that the tax has to be determined under tables to be prescribed by the Secretary or his delegate for tables of tax rates for single persons, heads of household, married persons filing joint returns, married persons filing separate returns with 10 per cent standard deduction and married persons filing separate returns with minimum standard deduction.\n1964— Pub. L. 88–272  substituted optional tax tables covering five categories for taxable years beginning on or after  Jan. 1, 1964 , and before  Jan. 1, 1965 , and for years beginning after  Dec. 31, 1964 , for a single general table.\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 101(c)(2)(A) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 101(f)(1) of Pub. L. 97–34 , set out as a note under  section 1 of this title .\nAmendment by  section 121(c)(3) of Pub. L. 97–34  applicable to contributions made after  Dec. 31, 1981 , in taxable years beginning after such date, see  section 121(d) of Pub. L. 97–34 , set out as a note under  section 170 of this title .\nPub. L. 96–222, title I, §\u202f108(a)(2) ,  Apr. 1, 1980 ,  94 Stat. 225 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by paragraph (1) [amending this section and sections 119, 911, and 913 of this title] shall take effect as if included in the Foreign Earned Income Act of 1978 [ Pub. L. 95–615 ]. \n \n “(B)   Paragraph  (1)(E).— The amendment made by paragraph (1)(E) [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 95–600, title IV, §\u202f401(c) ,  Nov. 6, 1978 ,  92 Stat. 2867 , provided that:  “The amendments made by this section [amending this section and sections 5, 871, 911, 1201, and 1304 of this title] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title V, §\u202f508 ,  Oct. 4, 1976 ,  90 Stat. 1569 , provided that:  “Except as otherwise provided, the amendments made by this title [enacting section 44A, amending this section and sections 36, 37, 41, 42, 46, 50A, 104, 144, 213, 217, 904, 1211, 1304, 3402, 6014, and 6096, enacting provisions set out as notes under sections 105, 8022, and repealing sections 4 and 214 of this title] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 94–12, title II, §\u202f209(a) ,  Mar. 29, 1975 ,  89 Stat. 35 , as amended by  Pub. L. 94–164, §\u202f2(e) ,  Dec. 23, 1975 ,  89 Stat. 972 , provided that:  “The amendments made by sections 201, 202(a), and 203 [enacting  section 42 of this title  and amending this section and sections 56, 141, 6012, and 6096 of this title] shall apply to taxable years ending after  December 31, 1974 . The amendments made by sections 201(a) and 202(a) [amending  section 141 of this title ] shall cease to apply to taxable years ending after  December 31, 1975 ; those made by sections 201(b), 201(c), and 203 [enacting  section 42 of this title  and amending this section and sections 56, 6012, and 6096 of this title] shall cease to apply to taxable years ending after  December 31, 1976 .”\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 803(f) of Pub. L. 91–172 , set out as a note under  section 1 of this title .\nPub. L. 88–272, title III, §\u202f301(c) ,  Feb. 26, 1964 ,  78 Stat. 140 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Except for purposes of section 21 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to effect of changes in rates during a taxable year), the amendments made by this section [amending this section and sections 4 and 6014 of this title] shall apply to taxable years beginning after  December 31, 1963 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON INDIVIDUALS'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 10 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f232(f)(1) , title III, §\u202f301(b)(1), (3),  78 Stat. 111 , 140;  Dec. 30, 1969 ,  Pub. L. 91–172, title VIII, §\u202f802(c)(1) –(3),  83 Stat. 677 , 678;  Dec. 10, 1971 ,  Pub. L. 92–178, title III, §\u202f301(b) ,  85 Stat. 520 , related to rules for optional tax.\nRepeal applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 3 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON INDIVIDUALS'},
  'content': '2003—Subsec. (b)(1).  Pub. L. 108–121  inserted “,\u2000astronauts,” after “Forces”.\n2002—Subsec. (b)(1).  Pub. L. 107–134  inserted “and victims of certain terrorist attacks” before “on death”.\n1986—Subsec. (a)(4).  Pub. L. 99–514, §\u202f701(e)(4)(A) , amended par. (4) generally, substituting “alternative minimum tax” for “minimum tax for taxpayers other than corporations”.\nSubsec. (b)(2), (3).  Pub. L. 99–514, §\u202f141(b)(2) , struck out par. (2) which read: “For limitation on tax where an individual chooses the benefits of income averaging, see section 1301.” and redesignated former par. (3) as (2).\n1982—Subsec. (a)(4).  Pub. L. 97–248, §\u202f201(d)(4) , formerly §\u202f201(c)(4), substituted “section 55” for “sections 55 and 56”.\n1980—Subsec. (a)(4).  Pub. L. 96–222  substituted “sections 55 and 56” for “section 55”.\n1978—Subsec. (a)(3).  Pub. L. 95–600, §\u202f401(b)(2) , redesignated par. (4) as (3). Former par. (3), relating to the alternative tax in the case of capital gains, was struck out.\nSubsec. (a)(4), (5).  Pub. L. 95–600 , §§\u202f401(b)(2), 421(e)(1), redesignated par. (5) as (4) and substituted “taxpayers other than corporations, see section 55” for “preferences, see section 56”. Former par. (4) redesignated (3).\n1976—Subsec. (b).  Pub. L. 94–455  redesignated pars. (2), (3), and (4), as (1), (2), (3), respectively, and struck out former par. (1) which referred to section 632 for limitation on tax attributable to sales of oil or gas properties and par. (5) which referred to section 1347 for limitation on tax attributable to claims against the U.S. involving acquisition of property.\n1969—Subsec. (a)(5).  Pub. L. 91–172, §\u202f301(b)(2) , added par. (5).\nSubsec. (b).  Pub. L. 91–172, §\u202f803(d)(6) , substituted “tax” for “surtax” in pars. (1) and (5).\n1964—Subsec. (b).  Pub. L. 88–272  redesignated pars. (2), (3), (4), (7) and (8) as pars. (1) to (5), respectively, substituted “where an individual chooses the benefits of income averaging” for “with respect to compensation for longterm services” in par. (3), and struck out former pars. (1), (5) and (6) which referred to tax attributable to receipt of lump sum under annuity, endowment, or life insurance contract, to income from artistic work or inventions, and to back pay, respectively.\nPub. L. 108–121, title I, §\u202f110(a)(4) ,  Nov. 11, 2003 ,  117 Stat. 1342 , provided that:  “The amendments made by this subsection [amending this section and sections 692 and 6013 of this title] shall apply with respect to any astronaut whose death occurs after  December 31, 2002 .”\nAmendment by  Pub. L. 107–134  applicable to taxable years ending before, on, or after  Sept. 11, 2001 , with provisions relating to waiver of limitations, see  section 101(d) of Pub. L. 107–134 , set out as a note under  section 692 of this title .\nAmendment by  section 141(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 701(e)(4)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 97–248, title II, §\u202f201(e)(1) ,  Sept. 3, 1982 ,  96 Stat. 421 , provided that:  “The amendments made by this section [amending this section and sections 46, 53, 55, 56, 57, 58, 173, 174, 511, 616, 617, 897, 901, 936, 1016, 6015, 6362, 6654, and 7701 of this title] shall apply to taxable years beginning after  December 31, 1982 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 401(b)(2) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 401(c) of Pub. L. 95–600 , set out as a note under  section 3 of this title .\nPub. L. 95–600, title IV, §\u202f421(g) ,  Nov. 6, 1978 ,  92 Stat. 2877 , provided that:  “The amendments made by this section [enacting  section 55 of this title  and amending this section and sections 57, 58, 443, 511, 666, 871, 877, 904, 6015, 6362, and 6654 of this title] shall apply to taxable years beginning after  December 31, 1978 , except that the amendment made by paragraph (1) of subsection (b) [amending  section 57 of this title ] shall apply to sales and exchanges made after  July 26, 1978 , in taxable years ending after such date.”\nPub. L. 91–172, title III, §\u202f301(c) ,  Dec. 30, 1969 ,  83 Stat. 586 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by this section [enacting sections 56 to 58 of this title and amending this section and sections 12, 46, 51, 443, 453, 511, 901, 1373, 1375, 6015, and 6654 of this title] shall apply to taxable years ending after  December 31, 1969 . In the case of a taxable year beginning in 1969 and ending in 1970, the tax imposed by section 56 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall be an amount equal to the tax imposed by such section (determined without regard to this sentence) multiplied by a fraction— \n “(1)  the numerator of which is the number of days in the taxable year occurring after  December 31, 1969 , and \n \n “(2)  the denominator of which is the number of days in the entire taxable year.”\nAmendment by  section 803(d)(6) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1970 , see  section 803(f) of Pub. L. 91–172 , set out as a note under  section 1 of this title .\nPub. L. 88–272, title II, §\u202f232(g) ,  Feb. 26, 1964 ,  78 Stat. 112 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule .— Except as provided in paragraph (2), the amendments made by this section [enacting sections 1301 to 1305, amending this section and sections 4, 72, 144, 402, 403, 6511, and omitting former sections 1301 to 1307 of this title] shall apply with respect to taxable years beginning after  December 31, 1963 . \n \n “(2)   Income from an employment .— If, in a taxable year beginning after  December 31, 1963 , an individual or partnership receives or accrues compensation from an employment (as defined by section 1301(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as in effect immediately before the enactment of this Act [ Feb. 26, 1964 ] and the employment began before  February 6, 1963 , the tax attributable to such compensation may, at the election of the taxpayer, be computed under the provisions of sections 1301 and 1307 of such Code as in effect immediately before the enactment of this Act. If a taxpayer so elects (at such time and in such manner as the Secretary of the Treasury or his delegate by regulations prescribes), he may not choose for such taxable year the benefits provided by part I of subchapter Q of chapter 1 of such Code (relating to income averaging) as amended by this Act and (if he elects to have subsection (e) of such section 1307 apply) section 170(b)(5) of such Code as amended by this Act shall not apply to charitable contributions paid in such taxable year.”\nFor applicability of amendment by  section 701(e)(4)(A) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , see  section 1012(aa)(2) of Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON CORPORATIONS'},
  'content': 'A tax is hereby imposed for each taxable year on the taxable income of every corporation.\nThe amount of the tax imposed by subsection (a) shall be 21 percent of taxable income.\nIn the case of a foreign corporation, the taxes imposed by subsection (a) and section 55 shall apply only as provided by section 882.\n2022—Subsec. (d).  Pub. L. 117–169  substituted “the taxes imposed by subsection (a) and section 55” for “the tax imposed by subsection (a)”.\n2017—Subsec. (b).  Pub. L. 115–97, §\u202f13001(a) , amended subsec. (b) generally. Prior to amendment, text read as follows:\n“(1)  In general .—The amount of the tax imposed by subsection (a) shall be the sum of—\n“(A) 15 percent of so much of the taxable income as does not exceed $50,000,\n“(B) 25 percent of so much of the taxable income as exceeds $50,000 but does not exceed $75,000,\n“(C) 34 percent of so much of the taxable income as exceeds $75,000 but does not exceed $10,000,000, and\n“(D) 35 percent of so much of the taxable income as exceeds $10,000,000.\nIn the case of a corporation which has taxable income in excess of $100,000 for any taxable year, the amount of tax determined under the preceding sentence for such taxable year shall be increased by the lesser of (i) 5 percent of such excess, or (ii) $11,750. In the case of a corporation which has taxable income in excess of $15,000,000, the amount of the tax determined under the foregoing provisions of this paragraph shall be increased by an additional amount equal to the lesser of (i) 3 percent of such excess, or (ii) $100,000.\n“(2)  Certain personal service corporations not eligible for graduated rates .—Notwithstanding paragraph (1), the amount of the tax imposed by subsection (a) on the taxable income of a qualified personal service corporation (as defined in section 448(d)(2)) shall be equal to 35 percent of the taxable income.”\nSubsec. (d).  Pub. L. 115–97, §\u202f12001(b)(11) , substituted “the tax imposed by subsection (a)” for “the taxes imposed by subsection (a) and section 55”.\n1993—Subsec. (b)(1).  Pub. L. 103–66, §\u202f13221(a)(3) , inserted at end of closing provisions “In the case of a corporation which has taxable income in excess of $15,000,000, the amount of the tax determined under the foregoing provisions of this paragraph shall be increased by an additional amount equal to the lesser of (i) 3 percent of such excess, or (ii) $100,000.”\nSubsec. (b)(1)(C), (D).  Pub. L. 103–66, §\u202f13221(a)(1) , (2), added subpars. (C) and (D) and struck out former subpar. (C) which read as follows: “34 percent of so much of the taxable income as exceeds $75,000.”\nSubsec. (b)(2).  Pub. L. 103–66, §\u202f13221(b) , substituted “35 percent” for “34 percent”.\n1988—Subsec. (d).  Pub. L. 100–647  substituted “the taxes imposed by subsection (a) and section 55” for “the tax imposed by subsection (a)”.\n1987—Subsec. (b).  Pub. L. 100–203  amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “The amount of the tax imposed by subsection (a) shall be the sum of—\n“(1) 15 percent of so much of the taxable income as does not exceed $50,000,\n“(2) 25 percent of so much of the taxable income as exceeds $50,000 but does not exceed $75,000, and\n“(3) 34 percent of so much of the taxable income as exceeds $75,000.\nIn the case of a corporation which has taxable income in excess of $100,000 for any taxable year, the amount of tax determined under the preceding sentence for such taxable year shall be increased by the lesser of (A) 5 percent of such excess, or (B) $11,750.”\n1986—Subsec. (b).  Pub. L. 99–514  amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “The amount of the tax imposed by subsection (a) shall be the sum of—\n“(1) 15 percent (16 percent for taxable years beginning in 1982) of so much of the taxable income as does not exceed $25,000;\n“(2) 18 percent (19 percent for taxable years beginning in 1982) of so much of the taxable income as exceeds $25,000 but does not exceed $50,000;\n“(3) 30 percent of so much of the taxable income as exceeds $50,000 but does not exceed $75,000;\n“(4) 40 percent of so much of the taxable income as exceeds $75,000 but does not exceed $100,000; plus\n“(5) 46 percent of so much of the taxable income as exceeds $100,000.\nIn the case of a corporation with taxable income in excess of $1,000,000 for any taxable year, the amount of tax determined under the preceding sentence for such taxable year shall be increased by the lesser of (A) 5 percent of such excess, or (B) $20,250.”\n1984—Subsec. (b).  Pub. L. 98–369  inserted “In the case of a corporation with taxable income in excess of $1,000,000 for any taxable year, the amount of tax determined under the preceding sentence for such taxable year shall be increased by the lesser of (A) 5 percent of such excess, or (B) $20,250.”\n1981—Subsec. (b)(1).  Pub. L. 97–34, §\u202f231(a)(1) , substituted “15 percent (16 percent for taxable years beginning in 1982)” for “17 percent”.\nSubsec. (b)(2).  Pub. L. 97–34, §\u202f231(a)(2) , substituted “18 percent (19 percent for taxable years beginning in 1982)” for “20 percent”.\n1978— Pub. L. 95–600  reduced corporate tax rates by substituting provisions imposing a five-step tax rate structure on corporate taxable income for provisions using a normal tax and surtax approach to the taxation of corporate taxable income.\n1977—Subsec. (b)(1).  Pub. L. 95–30, §\u202f201(1) , substituted “ December 31, 1978 ” for “ December 31, 1977 ”.\nSubsec. (b)(2).  Pub. L. 95–30, §\u202f201(1) , substituted “ January 1, 1979 ” for “ January 1, 1978 ” in provisions preceding subpar. (A).\nSubsec. (d)(1).  Pub. L. 95–30, §\u202f201(2) , substituted “ December 31, 1978 ” for “ December 31, 1977 ”.\nSubsec. (d)(2).  Pub. L. 95–30, §\u202f201(2) , substituted “ January 1, 1979 ” for “ January 1, 1978 ”.\n1976—Subsec. (a).  Pub. L. 94–455  reenacted subsec. (a) without change.\nSubsec. (b).  Pub. L. 94–455 , among other changes, substituted “ December 31, 1977 , 22 percent” for “ December 31, 1976 , 22 percent” and “after  December 31, 1974  and before  January 1, 1978 ” for “after  December 31, 1974  and before  January 1, 1977 ” and struck out provisions relating to the six-month application of the general rule.\nSubsec. (c).  Pub. L. 94–455  struck out provisions relating to the special rule for 1976 for calendar year taxpayers.\nSubsec. (d).  Pub. L. 94–455 , among other changes, substituted provisions relating to surtax exemption of $25,000 for a taxable year ending  Dec. 31, 1977 , or $50,000 for a taxable year ending after  Dec. 31, 1974 , and before  Jan. 1, 1978 , for provisions relating to surtax exemption of $50,000 for any taxable year and struck out provisions relating to six-month application of the general rule.\n1975—Subsec. (b).  Pub. L. 94–164  redesignated existing pars. (1) and (2) as pars. (1)(A) and (1)(B), and in par. (1)(A) as so redesignated substituted “after  December 31, 1976 ” for “before  January 1, 1975  or after  December 31, 1975 ”, and in par. (1)(B) as so redesignated substituted “ January 1, 1977 ” for “ January 1, 1976 ”, and added par. (2).\nPub. L. 94–12, §\u202f303(a) , reduced the normal tax for a taxable year ending after  Dec. 31, 1974 , and before  Jan. 1, 1976 , to 20 percent of so much of the taxable income as does not exceed $25,000 plus 22 percent of so much of the taxable income as exceeds $25,000.\nSubsec. (c).  Pub. L. 94–164  designated existing provisions as par. (1), struck out special percentages for taxable years beginning before  Jan. 1, 1964 , and after  Dec. 31, 1963  and before  Jan. 1, 1965 , and added par. (2).\nSubsec. (d).  Pub. L. 94–164  designated existing provisions as par. (1), substituted “$50,000” for “$25,000”, inserted reference to  section 1564 of this title , and added par. (2).\nPub. L. 94–12, §\u202f303(b) , substituted “$50,000” for “$25,000”.\n1969—Subsec. (d).  Pub. L. 91–172  substituted “section 1561 or 1564” for “section 1561”.\n1966—Subsec. (e)(4).  Pub. L. 89–809, §\u202f104(b)(2)(A) , struck out par. (4) which made reference to section 881(a) (relating to foreign corporations not engaged in business in United States).\nSubsec. (f).  Pub. L. 89–809, §\u202f104(b)(2)(B) , added subsec. (f).\n1964—Subsec. (b).  Pub. L. 88–272  applied the 30 percent tax to years beginning before  Jan. 1, 1964  instead of  July 1, 1964  in par. (1), and in par. (2), reduced the rate from 25 percent to 22 percent, and applied it to years beginning after  Dec. 31, 1963 , instead of  June 30, 1964 .\nSubsec. (c).  Pub. L. 88–272  increased the percentage from 22 to 28 for taxable years beginning after  Dec. 31, 1963 , and before  Jan. 1, 1965 , and to 26 percent for taxable years beginning after  Dec. 31, 1964 . The surtax exemption previously carried in subsec. (c), is now stated in subsec. (d).\nSubsecs. (d), (e).  Pub. L. 88–272  added subsec. (d) and redesignated former subsec. (d) as (e).\n1963—Subsec. (b).  Pub. L. 88–52  substituted “ July 1, 1964 ” for “ July 1, 1963 ” and “ June 30, 1964 ” for “ June 30, 1963 ” wherever appearing.\n1962—Subsec. (b).  Pub. L. 87–508  substituted “ July 1, 1963 ” for “ July 1, 1962 ” and “ June 30, 1963 ” for “ June 30, 1962 ” wherever appearing.\n1961—Subsec. (b).  Pub. L. 87–72  substituted “ July 1, 1962 ” for “ July 1, 1961 ” and “ June 30, 1962 ” for “ June 30, 1961 ” wherever appearing.\n1960—Subsec. (b).  Pub. L. 86–564  substituted “ July 1, 1961 ” for “ July 1, 1960 ” and “ June 30, 1961 ” for “ June 30, 1960 ” wherever appearing.\nSubsec. (d)(3).  Pub. L. 86–779  inserted “and real estate investment trusts” after “regulated investment companies”.\n1959—Subsec. (b).  Pub. L. 86–75  substituted “ July 1, 1960 ” for “ July 1, 1959 ” and “ June 30, 1960 ” for “ June 30, 1959 ” wherever appearing.\n1958—Subsec. (b).  Pub. L. 85–475  substituted “ July 1, 1959 ” for “ July 1, 1958 ” and “ June 30, 1959 ” for “ June 30, 1958 ” wherever appearing.\n1957—Subsec. (b).  Pub. L. 85–12  substituted “ July 1, 1958 ” for “ April 1, 1957 ” and “ June 30, 1958 ” for “ March 31, 1957 ” wherever appearing.\n1956—Subsec. (b). Act  Mar. 29, 1956 , substituted “ April 1, 1957 ” for “ April 1, 1956 ” and “ March 31, 1957 ” for “ March 31, 1956 ” wherever appearing.\n1955—Subsec. (b). Act  Mar. 30, 1955 , substituted “ April 1, 1956 ” for “ April 1, 1955 ” and “ March 31, 1956 ” for “ March 31, 1955 ” wherever appearing.\nPub. L. 117–169, title I, §\u202f10101(f) ,  Aug. 16, 2022 ,  136 Stat. 1828 , provided that:  “The amendments made by this section [enacting  section 56A of this title  and amending this section and sections 12, 38, 53, 55, 59, 860E, 882, 897, 6425, and 6655 of this title] shall apply to taxable years beginning after  December 31, 2022 .”\nPub. L. 115–97, title I, §\u202f12001(c) ,  Dec. 22, 2017 ,  131 Stat. 2094 , provided that:  “The amendments made by this section [amending this section and sections 12, 38, 53, 55, 56, 58, 59, 168, 847, 848, 882, 897, 911, 962, 1561, 6425, and 6655 of this title] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13001(c) ,  Dec. 22, 2017 ,  131 Stat. 2098 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by subsections (a) and (b) [amending this section and sections 12, 280C, 453A, 527, 535, 594, 691, 801, 831, 832, 834, 852, 857, 860E, 882, 904, 1374, 1381, 1445, 1446, 1561, 6425, 6655, 7518, and 7874 of this title and repealing sections 1201 and 1551 of this title] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Withholding .— The amendments made by subsection (b)(3) [amending sections 1445 and 1446 of this title] shall apply to distributions made after  December 31, 2017 . \n \n “(3)   Certain transfers .— The amendments made by subsection (b)(6) [amending  section 1561 of this title ] shall apply to transfers made after  December 31, 2017 .”\nPub. L. 103–66, title XIII, §\u202f13221(d) ,  Aug. 10, 1993 ,  107 Stat. 477 , provided that:  “The amendments made by this section [amending this section and sections 852, 1201, and 1445 of this title] shall apply to taxable years beginning on or after  January 1, 1993 ; except that the amendment made by subsection (c)(3) [amending  section 1445 of this title ] shall take effect on the date of the enactment of this Act [ Aug. 10, 1993 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10224(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–413 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nPub. L. 99–514, title VI, §\u202f601(b) ,  Oct. 22, 1986 ,  100 Stat. 2249 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning on or after  July 1, 1987 . \n \n “(2)   Cross reference.— “For treatment of taxable years which include  July 1, 1987 , see section 15 of the Internal Revenue Code of 1986.”\n“For treatment of taxable years which include  July 1, 1987 , see section 15 of the Internal Revenue Code of 1986.”\nPub. L. 98–369, div. A, title I, §\u202f66(c) ,  July 18, 1984 ,  98 Stat. 585 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1561 of this title ] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Amendments not treated as changed in rate of tax .— The amendments made by this subsection [probably should be “section”] shall not be treated as a change in a rate of tax for purposes of section 21 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nPub. L. 97–34, title II, §\u202f231(c) ,  Aug. 13, 1981 ,  95 Stat. 250 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 95–600, title III, §\u202f301(c) ,  Nov. 6, 1978 ,  92 Stat. 2824 , provided that:  “The amendments made by this section [amending this section and sections 12, 57, 244, 247, 511, 527, 528, 802, 821, 826, 852, 857, 882, 907, 922, 962, 1351, 1551, 1561, 6154, and 6655 of this title] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 94–455, title IX, §\u202f901(d) ,  Oct. 4, 1976 ,  90 Stat. 1607 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect on  December 23, 1975 . The amendments made by subsection (b) [amending  section 821 of this title ] shall apply to taxable years ending after  December 31, 1974 . The amendments made by subsection (c) [amending sections 21, 1561, and 6154 of this title] shall apply to taxable years ending after  December 31, 1975 .”\nPub. L. 94–164, §\u202f4(e) ,  Dec. 23, 1975 ,  89 Stat. 975 , provided that:  “The amendments made by subsections (b), (c), and (d) [amending this section and sections 21, 962, and 1561 of this title] apply to taxable years beginning after  December 31, 1975 . The amendment made by subsection (c) [amending this section] ceases to apply for taxable years beginning after  December 31, 1976 .”\nPub. L. 94–12, title III, §\u202f305(b)(1) ,  Mar. 29, 1975 ,  89 Stat. 45 , provided that:  “The amendments made by section 303 [amending this section and sections 12, 962, and 1561 of this title and enacting provisions set out as a note under this section] shall apply to taxable years ending after  December 31, 1974 . The amendments made by subsections (b) and (c) of such section [amending this section and sections 12, 962, and 1561 of this title and enacting provisions set out as a note under this section] shall cease to apply for taxable years ending after  December 31, 1975 .”\nAmendment by  Pub. L. 91–172  applicable with respect to taxable years beginning after  Dec. 31, 1969 , see  section 401(h)(2) of Pub. L. 91–172 , set out as a note under  section 1561 of this title .\nPub. L. 89–809, title I, §\u202f104(n) ,  Nov. 13, 1966 ,  80 Stat. 1563 , provided that:  “The amendments made by this section (other than subsection (k)) [enacting section 6683 to this title and amending this section and sections 245, 301, 512, 542, 543, 545, 819, 821, 822, 831, 832, 841, 842, 881, 882, 884, 952, 953, 1249, 1442, and 6016 of this title] shall apply with respect to taxable years beginning after  December 31, 1966 . The amendment made by subsection (k) [amending  section 1248(d)(4) of this title ] shall apply with respect to sales or exchanges occurring after  December 31, 1966 .”\nAmendment by  Pub. L. 88–272 , except for purposes of  section 21 of this title , effective with respect to taxable years beginning after  Dec. 31, 1963 , see  section 131 of Pub. L. 88–272 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .\nPub. L. 94–12, title III, §\u202f303(c)(1) ,  Mar. 29, 1975 ,  89 Stat. 44 , provided in part that:  “In applying subsection (b)(2) of section 11 [former subsec. (b)(2) of this section], the first $25,000 of taxable income and the second $25,000 of taxable income shall each be allocated among the component members of a controlled group of corporations in the same manner as the surtax exemption is allocated.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX ON CORPORATIONS'},
  'content': '2022—Par. (5).  Pub. L. 117–169  added par. (5).\n2017—Pars. (4) to (6).  Pub. L. 115–97, §\u202f13001(b)(2)(B) , redesignated par. (5) as (4) and struck out former pars. (4) and (6) which read as follows:\n“(4) For alternative tax in case of capital gains, see section 1201(a).\n“(6) For limitation on benefits of graduated rate schedule provided in section 11(b), see section 1551.”\nPar. (7).  Pub. L. 115–97, §\u202f12001(b)(12) , struck out par. (7) which read as follows: “For alternative minimum tax, see section 55.”\n1986—Par. (7).  Pub. L. 99–514  amended par. (7) generally, substituting “alternative minimum tax” and “55” for “minimum tax for tax preferences” and “56”, respectively.\n1984—Pars. (6) to (8).  Pub. L. 98–369  redesignated pars. (7) and (8) as (6) and (7), respectively. Former par. (6), which referred to section 1451 for withholding of tax on tax-free covenant bonds, was struck out.\n1978—Par. (7).  Pub. L. 95–600  substituted “benefits of graduated rate schedule provided in section 11(b)” for “the $25,000 exemption from surtax provided in section 11(c)”.\n1975—Par. (7).  Pub. L. 94–12  substituted “$50,000” for “$25,000” for a limited period. See Effective and Termination Dates of 1975 Amendment note set out below.\n1969—Par. (8).  Pub. L. 91–172  added par. (8).\n1964—Par. (8).  Pub. L. 88–272  struck out par. (8) which referred to section 1503 for additional tax for corporations filing consolidated returns.\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by  section 12001(b)(12) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13001(b)(2)(B) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  Pub. L. 98–369  not applicable with respect to obligations issued before  Jan. 1, 1984 , see  section 475(b) of Pub. L. 98–369 , set out as a note under  section 33 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years ending after  Dec. 31, 1974 , but to cease to apply for taxable years ending after  Dec. 31, 1975 , see  section 305(b)(1) of Pub. L. 94–12 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 301(c) of Pub. L. 91–172 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 234(c) of Pub. L. 88–272 , set out as a note under  section 1503 of this title .\nFor applicability of amendment by  Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , see  section 1012(aa)(2) of Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CHANGES IN RATES DURING A TAXABLE YEAR'},
  'content': 'This section shall not apply to any change in rates under subsection (f) of section 1 (relating to adjustments in tax tables so that inflation will not result in tax increases).\nIf the change referred to in subsection (a) involves a change in the highest rate of tax imposed by section 1 or 11(b), any reference in this chapter to such highest rate (other than in a provision imposing a tax by reference to such rate) shall be treated as a reference to the weighted average of the highest rates before and after the change determined on the basis of the respective portions of the taxable year before the date of the change and on or after the date of the change.\nThis section shall not apply to any change in rates under subsection (i) of section 1 (relating to rate reductions after 2000).\n2001—Subsec. (f).  Pub. L. 107–16, §\u202f101(c)(3) , added subsec. (f).\n1988—Subsec. (e).  Pub. L. 100–647  added subsec. (e).\n1986—Subsec. (d).  Pub. L. 99–514  amended subsec. (d) generally, substituting “apply to inflation adjustments” for “apply to section 1 rate changes made by Economic Recovery Tax Act of 1981” in heading and struck out “section 1 attributable to the amendments made by section 101 of the Economic Tax Act of 1981 or” before “subsection (f)” in text.\n1984— Pub. L. 98–369  renumbered  section 21 of this title  as this section.\n1981—Subsec. (d).  Pub. L. 97–34  substituted provisions that this section shall not apply to any change in rates under section 1 attributable to the amendments made by section 101 of the Economic Recovery Tax Act of 1981 or subsec. (f) of section 1 for provisions that had related to the changes made by section 303(b) of the Tax Reduction Act of 1975 in the surtax exemption.\nSubsecs. (e), (f).  Pub. L. 97–34  struck out subsecs. (e) and (f) which had related, respectively, to changes made by the Tax Reduction and Simplification Act of 1977 and to changes made by Revenue Act of 1978.\n1978—Subsec. (f).  Pub. L. 95–600  added subsec. (f).\n1977—Subsec. (d).  Pub. L. 95–30, §\u202f101(d)(2)(A) , (B), redesignated subsec. (f) as (d). Former subsec. (d), which directed that, in applying subsec. (a) to a taxable year of an individual which was not a calendar year, each change made by the Tax Reform Act of 1969 in part I or in the application of part IV or V of subchapter B for purposes of the determination of taxable income should be treated as a change in a rate of tax, was struck out.\nSubsec. (e).  Pub. L. 95–30, §\u202f101(d)(2)(A) , (C), added subsec. (e). Former subsec. (e), which directed that, in applying subsec. (a) to a taxable year of an individual which was not a calendar year, each change made by the Revenue Act of 1971 in section 141 (relating to the standard deduction) and section 151 (relating to personal exemptions) should be treated as a change in a rate of tax, was struck out.\nSubsec. (f).  Pub. L. 95–30, §\u202f101(d)(2)(B) , redesignated subsec. (f) as (d).\n1976—Subsec. (f).  Pub. L. 94–455  substituted “in the surtax exemption and any change under section 11(d) in the surtax exemption” for “and the change made by section 3(c) of the Revenue Adjustment Act of 1975 in section 11(d) (relating to corporate surtax exemption)”.\n1975—Subsec. (f).  Pub. L. 94–164  inserted reference to change made by section 3(c) of the Revenue Adjustment Act of 1975.\nPub. L. 94–12  added subsec. (f).\n1971—Subsec. (e).  Pub. L. 92–178  added subsec. (e).\n1969—Subsec. (d).  Pub. L. 91–172  substituted provisions covering changes made by the Tax Reform Act of 1969 in case of individuals for provisions covering changes made by Revenue Act of 1964.\n1964—Subsec. (d).  Pub. L. 88–272  amended subsection generally by substituting provisions relating to changes made by the Revenue Act of 1964, for provisions relating to taxable years beginning before  Jan. 1, 1954 , and ending after  Dec. 31, 1953 .\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2000 , see  section 101(d)(1) of Pub. L. 107–16 , set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 101(f)(1) of Pub. L. 97–34 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years ending after  Dec. 31, 1975 , see  section 901(d) of Pub. L. 94–455 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 94–164  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 4(e) of Pub. L. 94–164 , set out as an Effective and Termination Dates of 1975 Amendments note under  section 11 of this title .\nPub. L. 88–272, title I, §\u202f132 ,  Feb. 26, 1964 ,  78 Stat. 30 , provided that the amendment made by that section is effective with respect to taxable years ending after  Dec. 31, 1963 .\nThis section not to apply to any change in a rate of tax by reason of  section 1(j) of this title , as added by  Pub. L. 115–97 , see  section 1(j)(6) of this title .\nPub. L. 105–34, title I, §\u202f1(c) ,  Aug. 5, 1997 ,  111 Stat. 788 , provided that:  “No amendment made by this Act [see Tables for classification] shall be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.”\nPub. L. 103–66, title XIII, §\u202f13001(c) ,  Aug. 10, 1993 ,  107 Stat. 416 , provided that:  “Except in the case of the amendments made by section 13221 [amending sections 11, 852, 1201, and 1445 of this title] (relating to corporate rate increase), no amendment made by this chapter [chapter 1 (§§\u202f13001–13444) of title XIII of  Pub. L. 103–66 , see Tables for classification] shall be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.”\nPub. L. 101–508, title XI, §\u202f11001(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–400 , provided that:  “Except as otherwise expressly provided in this title, no amendment made by this title [see Tables for classification] shall be treated as a change in a rate of tax for purposes of section 15 of the Internal Revenue Code of 1986.”\nPub. L. 100–203, title X, §\u202f10000(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–382 , provided that:  “No amendment made by this title [see Tables for classification] shall be treated as a change in a rate of tax for purposes [of] section 15 of the Internal Revenue Code of 1986.”\nPub. L. 99–514, §\u202f3(b) ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), for purposes of section 15 of the Internal Revenue Code of 1986, no amendment or repeal made by this Act [see Tables for classification] shall be treated as a change in the rate of a tax imposed by chapter 1 of such Code. \n \n “(2)   Exception .— Paragraph (1) shall not apply to the amendment made by section 601 [amending  section 11 of this title ] (relating to corporate rate reductions).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the employment-related expenses (as defined in subsection (b)(2)) paid by such individual during the taxable year.\nFor purposes of paragraph (1), the term “applicable percentage” means 35 percent reduced (but not below 20 percent) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $15,000.\nAn individual shall not be treated as having the same principal place of abode of the taxpayer if at any time during the taxable year of the taxpayer the relationship between the individual and the taxpayer is in violation of local law.\nIf the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year.\nAn individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.\nThe term “student” means an individual who during each of 5 calendar months during the taxable year is a full-time student at an educational organization.\nThe term “educational organization” means an educational organization described in section 170(b)(1)(A)(ii).\nNo credit shall be allowed under this section with respect to any qualifying individual unless the TIN of such individual is included on the return claiming the credit.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.\nIf the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section 32) for more than one-half of the taxable year, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart).\nSubsection (a)(2) shall be applied by substituting “the phaseout percentage” for “20 percent”.\nThe term “phaseout percentage” means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $400,000.\nThe Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning in or with 2021. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession.\nThe Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of this section with respect to taxable years beginning in or with 2021 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents.\nFor purposes of this subsection, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.\nFor purposes of  section 1324 of title 31 , United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.\nA prior section 21 was renumbered  section 15 of this title .\n2021—Subsec. (g).  Pub. L. 117–2, §\u202f9631(a) , added subsec. (g).\nSubsec. (h).  Pub. L. 117–2, §\u202f9631(b) , added subsec. (h).\n2007—Subsec. (e)(5).  Pub. L. 110–172  substituted “section 152(e)(4)(A)” for “section 152(e)(3)(A)” in concluding provisions.\n2005—Subsec. (b)(1)(B).  Pub. L. 109–135  inserted “(as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B))” after “dependent of the taxpayer”.\n2004—Subsec. (a)(1).  Pub. L. 108–311, §\u202f203(a) , substituted “In the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual” for “In the case of an individual who maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (b)(1))”.\nSubsec. (b)(1).  Pub. L. 108–311, §\u202f203(b) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualifying individual’ means—\n“(A) a dependent of the taxpayer who is under the age of 13 and with respect to whom the taxpayer is entitled to a deduction under section 151(c),\n“(B) a dependent of the taxpayer who is physically or mentally incapable of caring for himself, or\n“(C) the spouse of the taxpayer, if he is physically or mentally incapable of caring for himself.”\nSubsec. (e)(1).  Pub. L. 108–311, §\u202f203(c) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “An individual shall be treated as maintaining a household for any period only if over half the cost of maintaining the household for such period is furnished by such individual (or, if such individual is married during such period, is furnished by such individual and his spouse).”\nSubsec. (e)(5).  Pub. L. 108–311, §\u202f207(2) , struck out “paragraph (2) or (4) of” before “section 152(e)” in subpar. (A) and substituted “as defined in section 152(e)(3)(A)” for “within the meaning of section 152(e)(1)” in concluding provisions.\nSubsec. (e)(6)(B).  Pub. L. 108–311, §\u202f207(3) , substituted “section 152(f)(1)” for “section 151(c)(3)”.\n2002—Subsec. (d)(2)(A).  Pub. L. 107–147, §\u202f418(b)(1) , substituted “$250” for “$200”.\nSubsec. (d)(2)(B).  Pub. L. 107–147, §\u202f418(b)(2) , substituted “$500” for “$400”.\n2001—Subsec. (a)(2).  Pub. L. 107–16, §\u202f204(b) , substituted “35 percent” for “30 percent” and “$15,000” for “$10,000”.\nSubsec. (c)(1).  Pub. L. 107–16, §\u202f204(a)(1) , substituted “$3,000” for “$2,400”.\nSubsec. (c)(2).  Pub. L. 107–16, §\u202f204(a)(2) , substituted “$6,000” for “$4,800”.\n1996—Subsec. (e)(10).  Pub. L. 104–188  added par. (10).\n1988—Subsec. (b)(1)(A).  Pub. L. 100–485, §\u202f703(a) , substituted “age of 13” for “age of 15”.\nSubsec. (c).  Pub. L. 100–485, §\u202f703(b) , inserted at end: “The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.”\nSubsec. (e)(5)(B).  Pub. L. 100–485, §\u202f703(a) , substituted “age of 13” for “age of 15”.\nSubsec. (e)(9).  Pub. L. 100–485, §\u202f703(c)(1) , added par. (9).\n1987—Subsec. (b)(2)(A).  Pub. L. 100–203  inserted at end “Such term shall not include any amount paid for services outside the taxpayer’s household at a camp where the qualifying individual stays overnight.”\n1986—Subsecs. (b)(1)(A), (e)(6)(A).  Pub. L. 99–514, §\u202f104(b)(1)(A) , substituted “section 151(c)” for “section 151(e)”.\nSubsec. (e)(6)(B).  Pub. L. 99–514, §\u202f104(b)(1)(B) , substituted “section 151(c)(3)” for “section 151(e)(3)”.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 44A of this title  as this section.\nSubsec. (a)(1).  Pub. L. 98–369, §\u202f474(c)(2) , (3), substituted “subsection (b)(1)” for “subsection (c)(1)” and “subsection (b)(2)” for “subsection (c)(2)”.\nSubsec. (b).  Pub. L. 98–369, §\u202f474(c)(1) , redesignated subsec. (c) as (b). Former subsec. (b), which provided that the credit allowed by subsec. (a) could not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under sections 33, 37, 38, 40, 41, 42, and 44, was struck out.\nSubsec. (c).  Pub. L. 98–369, §\u202f474(c)(1) , redesignated subsec. (d) as (c). Former subsec. (c) redesignated (b).\nSubsec. (d).  Pub. L. 98–369, §\u202f474(c)(1) , redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f474(c)(4) , substituted “subsection (b)(1)(C)” for “subsection (c)(1)(C)” in introductory provisions.\nSubsec. (d)(2)(A).  Pub. L. 98–369, §\u202f474(c)(5) , substituted “subsection (c)(1)” for “subsection (d)(1)”.\nSubsec. (d)(2)(B).  Pub. L. 98–369, §\u202f474(c)(6) , substituted “subsection (c)(2)” for “subsection (d)(2).\nSubsec. (e).  Pub. L. 98–369, §\u202f474(c)(1) , redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).\nSubsec. (e)(5).  Pub. L. 98–369, §\u202f474(c)(7) , substituted “subsection (b)(1)” for “subsection (c)(1)” in provisions following subpar. (B).\nPub. L. 98–369, §\u202f423(c)(4) , amended par. (5) generally, substituting subpars. (A) and (B) reading:\n“(A) paragraph (2) or (4) of section 152(e) applies to any child with respect to any calendar year, and\n“(B) such child is under the age of 15 or is physically or mentally incapable of caring for himself,”\nfor former provisions:\n“(A) a child (as defined in section 151(e)(3)) who is under the age of 15 or who is physically or mentally incapable of caring for himself receives over half of his support during the calendar year from his parents who are divorced or legally separated under a decree of divorce or separate maintenance or who are separated under a written separation agreement, and\n“(B) such child is in the custody of one or both of his parents for more than one-half of the calendar year.”\nand substituted in concluding text “(whichever is appropriate) with respect to the custodial parent (within the meaning of section 152(e)(1)), and shall not be treated as a qualifying individual with respect to the noncustodial parent” for “,\u2000as the case may be, with respect to that parent who has custody for a longer period during such calendar year than the other parent, and shall not be treated as being a qualifying individual with respect to such other parent.”\nSubsecs. (f), (g).  Pub. L. 98–369, §\u202f474(c)(1) , redesignated subsecs. (f) and (g) as (e) and (f), respectively.\n1983—Subsec. (b)(2).  Pub. L. 98–21  substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f124(a) , designated existing provisions as par. (1), substituted “the applicable percentage” for “20 percent” in par. (1) as so designated, and added par. (2).\nSubsec. (c)(2)(B).  Pub. L. 97–34, §\u202f124(c) , designated existing provisions as cl. (i) and added cl. (ii).\nSubsec. (c)(2)(C), (D).  Pub. L. 97–34, §\u202f124(d) , added subpars. (C) and (D).\nSubsec. (d)(1).  Pub. L. 97–34, §\u202f124(b)(1)(A) , substituted “$2,400” for “$2,000”.\nSubsec. (d)(2).  Pub. L. 97–34, §\u202f124(b)(1)(B) , substituted “$4,800” for “$4,000”.\nSubsec. (e)(2)(A).  Pub. L. 97–34, §\u202f124(b)(2)(A) , substituted “$200” for “$166”.\nSubsec. (e)(2)(B).  Pub. L. 97–34, §\u202f124(b)(2)(B) , substituted “$400” for “$333”.\n1978—Subsec. (f)(6).  Pub. L. 95–600  substituted provision disallowing a credit for any amount paid by a taxpayer to an individual with respect to whom, for the taxable year, a deduction under section 151(e) is allowable either to the taxpayer or his spouse or who is a child of the taxpayer who has not attained the age of 19 at the close of the taxpayer year and defining “taxpayer year” for provision disallowing a credit for any amount paid by the taxpayer to an individual bearing a relationship described in section 152(a)(1) through (8), or a dependent described in section 152(a)(9), except that a credit was allowed for an amount paid by a taxpayer to an individual with respect to whom, for the taxable year of the taxpayer in which the service was performed, neither the taxpayer nor his spouse was entitled to a deduction under section 151(e), provided the service constituted employment within the meaning of section 3121(b).\nPub. L. 117–2, title IX, §\u202f9631(d) ,  Mar. 11, 2021 ,  135 Stat. 160 , provided that:  “The amendments made by this section [amending this section,  section 6211 of this title  and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 109–135, title IV, §\u202f404(d) ,  Dec. 21, 2005 ,  119 Stat. 2634 , provided that:  “The amendments made by this section [amending this section and sections 152 and 223 of this title] shall take effect as if included in the provisions of the Working Families Tax Relief Act of 2004 [ Pub. L. 108–311 ] to which they relate.”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 107–147, title IV, §\u202f418(c) ,  Mar. 9, 2002 ,  116 Stat. 58 , provided that:  “The amendments made by this section [amending this section and sections 23 and 137 of this title] shall take effect as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 ] to which they relate.”\nPub. L. 107–16, title II, §\u202f204(c) ,  June 7, 2001 ,  115 Stat. 50 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 104–188, title I, §\u202f1615(d) ,  Aug. 20, 1996 ,  110 Stat. 1853 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 151, 6109, 6213, and 6724 of this title] shall apply with respect to returns the due date for which (without regard to extensions) is on or after the 30th day after the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Special rule for 1995 and 1996 .— In the case of returns for taxable years beginning in 1995 or 1996, a taxpayer shall not be required by the amendments made by this section to provide a taxpayer identification number for a child who is born after  October 31, 1995 , in the case of a taxable year beginning in 1995 or  November 30, 1996 , in the case of a taxable year beginning in 1996.”\nPub. L. 100–485, title VII, §\u202f703(d) ,  Oct. 13, 1988 ,  102 Stat. 2427 , provided that:  “The amendments made by this section [amending this section and sections 129 and 6109 of this title] shall apply to taxable years beginning after  December 31, 1988 .”\nPub. L. 100–203, title X, §\u202f10101(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–384 , as amended by  Pub. L. 100–647, title II, §\u202f2004(a) ,  Nov. 10, 1988 ,  102 Stat. 3598 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to expenses paid in taxable years beginning after  December 31, 1987 . \n \n “(2)   Special rule for cafeteria plans .— For purposes of section 125 of the Internal Revenue Code of 1986, a plan shall not be treated as failing to be a cafeteria plan solely because under the plan a participant elected before  January 1, 1988 , to receive reimbursement under the plan for dependent care assistance for periods after  December 31, 1987 , and such assistance included reimbursement for expenses at a camp where the dependent stays overnight.”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 423(c)(4) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 423(d) of Pub. L. 98–369 , set out as a note under  section 2 of this title .\nPub. L. 98–369, title IV, §\u202f475(a) ,  July 18, 1984 ,  98 Stat. 847 , provided that:  “The amendments made by this title [probably means subtitle F (§§\u202f471–475) of title IV of  Pub. L. 98–369 , which enacted sections 25, 38, and 39 of this title, amended this section and sections 12, 15, 22 to 24, 27 to 35, 37, 39 to 41, 44A, 44C to 44H, 45 to 48, 51, 52, 55, 56, 86, 87, 103, 108, 129, 168, 196, 213, 280C, 381, 383, 401, 404, 409, 441, 527, 642, 691, 874, 882, 901, 904, 936, 1016, 1033, 1351, 1366, 1374, 1375, 1441, 1442, 1451, 3507, 6013, 6096, 6201, 6211, 6213, 6362, 6401, 6411, 6420, 6421, 6427, 6501, 6511, 7701, 7871, 9502, and 9503 of this title, repealed sections 38, 40, 44, 44B, 50A, 50B, and 53 of this title, and enacted provisions set out as notes under sections 30, 33, 46, and 48 of this title] shall apply to taxable years beginning after  December 31, 1983 , and to carrybacks from such years.”\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under  section 105(d)(6) of this title  as in effect on the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21 , set out as a note under  section 22 of this title .\nPub. L. 97–34, title I, §\u202f124(f) ,  Aug. 13, 1981 ,  95 Stat. 201 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by this section [amending this section and enacting  section 129 of this title ] shall apply to taxable years beginning after  December 31, 1981 . \n \n “(2)  The amendments made by subsection (e)(2) [amending sections 3121, 3306, and 3401 of this title and  section 409 of Title 42 , The Public Health and Welfare] shall apply to remuneration paid after  December 31, 1981 .”\nPub. L. 95–600, title I, §\u202f121(b) ,  Nov. 6, 1978 ,  92 Stat. 2779 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nSection applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 3 of this title .\nPub. L. 101–508, title XI, §\u202f11114 ,  Nov. 5, 1990 ,  104 Stat. 1388–414 , provided that:  “Not later than the first calendar year following the date of the enactment of this subtitle [ Nov. 5, 1990 ], the Secretary of the Treasury, or the Secretary’s delegate, shall establish a taxpayer awareness program to inform the taxpaying public of the availability of the credit for dependent care allowed under section 21 of the Internal Revenue Code of 1986 and the earned income credit and child health insurance under section 32 of such Code. Such public awareness program shall be designed to assure that individuals who may be eligible are informed of the availability of such credit and filing procedures. The Secretary shall use appropriate means of communication to carry out the provisions of this section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of a qualified individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 15 percent of such individual’s section 22 amount for such taxable year.\nAn individual’s section 22 amount for the taxable year shall be the applicable initial amount determined under paragraph (2), reduced as provided in paragraph (3) and in subsection (d).\nIn the case of a qualified individual who has not attained age 65 before the close of the taxable year, except as provided in clause (ii), the initial amount shall not exceed the disability income for the taxable year.\nFor purposes of this subparagraph, the term “disability income” means the aggregate amount includable in the gross income of the individual for the taxable year under section 72 or 105(a) to the extent such amount constitutes wages (or payments in lieu of wages) for the period during which the individual is absent from work on account of permanent and total disability.\nFor purposes of subparagraph (A), any amount treated as a social security benefit under section 86(d)(3) shall be treated as a disability benefit received under title II of the Social Security Act.\nExcept in the case of a husband and wife who live apart at all times during the taxable year, if the taxpayer is married at the close of the taxable year, the credit provided by this section shall be allowed only if the taxpayer and his spouse file a joint return for the taxable year.\nMarital status shall be determined under section 7703.\nAn individual is permanently and totally disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Secretary may require.\nNo credit shall be allowed under this section to any nonresident alien.\nThe Social Security Act, referred to in subsec. (c)(3)(A)(i)(I), (B), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Social Security Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe Railroad Retirement Act of 1974, referred to in subsec. (c)(3)(A)(i)(II), is  act Aug. 29, 1935, ch. 812 , as amended generally by  Pub. L. 93–445, title I, §\u202f101 ,  Oct. 16, 1974 ,  88 Stat. 1305 , which is classified generally to subchapter IV (§\u202f231 et seq.) of chapter 9 of Title 45, Railroads. For further details and complete classification of this Act to the Code, see Codification note set out preceding  section 231 of Title 45 ,  section 231t of Title 45 , and Tables.\n2018—Subsec. (c)(3)(A)(i)(III).  Pub. L. 115–141  substituted “Department of Veterans Affairs” for “Veterans’ Administration”.\n1986—Subsec. (e)(2).  Pub. L. 99–514  substituted “section 7703” for “section 143”.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 37 of this title  as this section.\nSubsec. (a).  Pub. L. 98–369, §\u202f474(d)(1) , substituted “section 22 amount” for “section 37 amount”.\nSubsec. (c).  Pub. L. 98–369, §\u202f474(d)(2) , substituted “Section 22 amount” for “Section 37 amount” in heading.\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f474(d)(1) , substituted “section 22 amount” for “section 37 amount”.\nSubsec. (d).  Pub. L. 98–369, §\u202f474(d)(3) , amended subsec. (d) generally, striking out heading “Limitations” and designation “(1)” before “Adjusted gross income limitation” thereby making existing par. (1) the entire subsec. (d), redesignating existing subpars. (A), (B), and (C) as pars. (1), (2), and (3), respectively, and striking out provisions, formerly comprising par. (2), which had limited the amount of the credit allowed by this section for the taxable year to the amount of the tax imposed by this chapter for such taxable year.\n1983— Pub. L. 98–21  inserted reference to permanently and totally disabled in section catchline.\nSubsec. (a).  Pub. L. 98–21  amended subsec. (a) generally, substituting reference to a qualified individual for reference to an individual who has attained the age of 65 before the close of the taxable year.\nSubsec. (b).  Pub. L. 98–21  in amending section generally added subsec. (b). Former subsec. (b) redesignated (c).\nSubsec. (c).  Pub. L. 98–21  in amending section generally, redesignated former subsec. (b) as (c) and, in (c) as so redesignated, added par. (2) and struck out former (2), which had provided that the initial amount was $2,500 in the case of a single individual, $2,500 in the case of a joint return where only one spouse was eligible for the credit under subsection (a), $3,750 in the case of a joint return where both spouses were eligible for the credit under subsection (a), or $1,875 in the case of a married individual filing a separate return, redesignated existing provisions as par. (3)(A), inserted “benefit” after “disability” therein, struck out former subpars. (A) to (C), which had specified sources of amounts received under title II of the Social Security Act, under the Railroad Retirement Act of 1935 or 1937, or otherwise excluded from gross income, added cls. (i) and (ii), substituted provision that no reduction would be made under cl. (i)(III) for any amount described in section 104(a)(4) for provision that no reduction would be made under former par. (3) for any amount excluded from gross income under section 72 (relating to annuities), 101 (relating to life insurance proceeds), 104 (relating to compensation for injuries or sickness), 105 (relating to amounts received under accident and health plans), 120 (relating to amounts received under qualified group legal services plans), 402 (relating to taxability of beneficiary of employees’ trust), 403 (relating to taxation of employee annuities), or 405 (relating to qualified bond purchase plans), and added subpar. (B). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 98–21  in amending section generally redesignated former subsec. (c) as (d). Former subsec. (d) redesignated (e).\nSubsec. (e).  Pub. L. 98–21  in amending section generally, redesignated former subsec. (d) as (e) and struck out provision that “joint return” meant the joint return of a husband and wife made under section 6013 and inserted provisions defining permanent and total disability. Former subsec. (e), which provided for an election of prior law with respect to public retirement system income, was struck out.\nSubsec. (f).  Pub. L. 98–21  reenacted subsec. (f) without change.\n1981—Subsec. (e)(9)(B).  Pub. L. 97–34  substituted “section 911(d)(2)” for “section 911(b)”.\n1978—Subsec. (e)(2).  Pub. L. 95–600, §\u202f701(a)(1) , inserted “(and whose gross income includes income described in paragraph (4)(B))” after “who has not attained age 65 before the close of the taxable year”.\nSubsec. (e)(4)(B).  Pub. L. 95–600, §\u202f701(a)(2) , (3)(B), as amended by  Pub. L. 96–222, §\u202f107(a)(1)(E)(i) , inserted “and who performed the services giving rise to the pension or annuity (or is the spouse of the individual who performed the services)” after “before the close of the taxable year” and substituted reference to paragraph (9)(A) for reference to paragraph (8)(A).\nSubsec. (e)(5)(B).  Pub. L. 95–600, §\u202f701(a)(3)(C) , as amended by  Pub. L. 96–222, §\u202f107(a)(1)(E)(i) , substituted reference to paragraph (9)(A) for reference to paragraph (8)(A).\nSubsec. (e)(8), (9).  Pub. L. 95–600, §\u202f701(a)(3)(A) , as amended by  Pub. L. 96–222, §\u202f107(a)(1)(E)(i) , added par. (8) and redesignated former par. (8) as (9).\n1976— Pub. L. 94–455, §\u202f503(a) , among other changes, substituted “Credits for the elderly” for “Retirement income” in section catchline and in text substituted provisions permitting taxpayers who have all types of income to be eligible for the tax credit for provisions permitting taxpayers who have only retirement income to be eligible for the tax credit, eliminated provisions requiring taxpayers to earn $600 for the previous ten years for tax credit eligibility and provisions relating variations in treatment of married couples, and inserted provisions broadening coverage of the tax credit relief to low and middle income taxpayers.\nPub. L. 94–455, §\u202f1901(c)(1) , purported to amend subsec. (f) of this section by striking out “a Territory”. The amendment could not be executed in view of the prior general amendment of this section by  section 503(a) of Pub. L. 94–455 . Section 1901(c)(1) was repealed by  section 703(j)(11) of Pub. L. 95–600 .\n1974—Subsec. (c)(1)(E), (F).  Pub. L. 93–406  inserted reference in subpar. (E) to retirement bonds described in section 409 and added subpar. (F).\n1964—Subsec. (a).  Pub. L. 88–272 , §§\u202f113(a), 201(d)(3), substituted “an amount equal to 17 percent, in the case of a taxable year beginning in 1964, or 15 percent, in the case of a taxable year beginning after  December 31, 1964 , of the amount received by such individual as retirement income (as defined in subsection (c) and as limited by subsection (d));” for “an amount equal to the amount received by such individual as retirement income (as defined in subsection (c) and as limited by subsection (d)), multiplied by the rate provided in section 1 for the first $2,000 of taxable income;”, and struck out “section 34 (relating to credit for dividends received by individuals)”, before “and section 35”.\nSubsecs. (i), (j).  Pub. L. 88–272, §\u202f202(a) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1962—Subsec. (c)(1).  Pub. L. 87–792  inserted provisions in subpar. (A) requiring inclusion, in the case of an individual who is, or has been, an employee within the meaning of section 401(c)(1), distributions by a trust described in section 401(a) which is exempt from tax under section 501(a), and added subpar. (E).\nSubsec. (d).  Pub. L. 87–876  increased the limit on retirement income from $1,200 to $1,524, lowered the age requirement in par. (2)(A) from 65 to 62, and substituted provisions in par. (2)(B) which reduce the amount of retirement income for individuals who reach age 62, by one-half the amount of earned income in excess of $1,200 but not in excess of $1,700, and by the amount received over $1,700, for provisions which reduced such income by the amount earned over $1,200 by persons having reached age 65, and which defined income as in subsec. (g) of this section.\n1956—Subsec. (d)(2). Act  Jan. 28, 1956 , reduced from 75 to 72 the age at which there will be no limitation on earned income and increased from $900 to $1,200 the amount that an individual over 65 can earn without reducing the $1,200 on which the retirement credit is computed.\n1955—Subsec. (f). Act  Aug. 9, 1955 , extended the retirement income tax credit to members of the Armed Forces.\nAmendment by  Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 474(d) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–21, title I, §\u202f122(d) ,  Apr. 20, 1983 ,  97 Stat. 87 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending sections 37 [now 22], 41 [now 24], 44A [now 21], 46, 53, 85, 105, 128, 403, 415, 904, and 7871 of this title] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Transitional rule .— If an individual’s annuity starting date was deferred under section 105(d)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this section [ Apr. 20, 1983 ]), such deferral shall end on the first day of such individual’s first taxable year beginning after  December 31, 1983 .”\nAmendment by  Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nPub. L. 95–600, title VII, §\u202f701(a)(4) ,  Nov. 6, 1978 ,  92 Stat. 2898 , provided that: \n “(A)  The amendments made by paragraphs (1) and (2) [amending this section] shall apply to taxable years beginning after  December 31, 1975 . \n \n “(B)  The amendments made by paragraph (3) [amending this section] shall apply to taxable years beginning after  December 31, 1977 .”\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as a note under  section 3 of this title .\nAmendment by  Pub. L. 93–406  effective  Jan. 1, 1974 , see  section 2002(i)(2) of Pub. L. 93–406 , set out as an Effective Date note under  section 4973 of this title .\nAmendment by  section 113(a) of Pub. L. 88–272 , except for purposes of section 21 [now 15] of this title, effective with respect to taxable years beginning after  Dec. 31, 1963 , see  section 131 of Pub. L. 88–272 , set out as a note under  section 1 of this title .\nPub. L. 88–272, title II, §\u202f201(e) ,  Feb. 26, 1964 ,  78 Stat. 32 , provided that:  “The amendments made by subsection (a) [amending  section 34 of this title ] shall apply with respect to taxable years ending after  December 31, 1963 . The amendment made by subsection (b) [repealing  section 34 of this title ] shall apply with respect to taxable years ending after  December 31, 1964 . The amendment made by subsection (c) [amending  section 116 of this title ] shall apply with respect to taxable years beginning after  December 31, 1963 . The amendments made by subsection (d) [amending sections 35, 37 [now 22], 46, 116, 584, 642, 702, 854, 857, 871, 1375, and 6014 of this title] shall apply with respect to dividends received after  December 31, 1964 , in taxable years ending after such date”.\nPub. L. 88–272, title II, §\u202f202(b) ,  Feb. 26, 1964 ,  78 Stat. 33 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1963 .”\nPub. L. 87–876, §\u202f2 ,  Oct. 24, 1962 ,  76 Stat. 1199 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply only to taxable years ending after the date of the enactment of this Act [ Oct. 24, 1962 ].”\nPub. L. 87–792, §\u202f8 ,  Oct. 10, 1962 ,  76 Stat. 831 , provided that:  “The amendments made by this Act [enacting sections 405 and 6047 of this title and amending sections 37 [now 22], 62, 72, 101, 104, 105, 172, 401 to 404, 503, 805, 1361, 2039, 2517, 3306, 3401 and 7207 of this title] shall apply to taxable years beginning after  December 31, 1962 .”\nAct Jan. 28, 1956, ch. 18, §\u202f2 ,  70 Stat. 9 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1955 .”\nAct Aug. 9, 1955, ch. 659, §\u202f2 ,  69 Stat. 591 , provided that:  “The amendment made by this Act [amending this section] shall be applicable to taxable years beginning after  December 31, 1954 .”\nPub. L. 95–30, title IV, §\u202f403 ,  May 23, 1977 ,  91 Stat. 155 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe) to determine the amount of his credit under section 37 [now 22] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for his first taxable year beginning in 1976 under the provisions of such section as they existed before the amendment made by section 503 of the Tax Reform Act of 1976 [ Pub. L. 94–455 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter the amount of the qualified adoption expenses paid or incurred by the taxpayer.\nIn the case of an adoption of a child with special needs which becomes final during a taxable year, the taxpayer shall be treated as having paid during such year qualified adoption expenses with respect to such adoption in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred by the taxpayer with respect to such adoption during such taxable year and all prior taxable years.\nThe aggregate amount of qualified adoption expenses which may be taken into account under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000.\nFor purposes of subparagraph (A), adjusted gross income shall be determined without regard to sections 911, 931, and 933.\nNo credit shall be allowed under subsection (a) for any expense for which a deduction or credit is allowed under any other provision of this chapter.\nNo credit shall be allowed under subsection (a) for any expense to the extent that funds for such expense are received under any Federal, State, or local program.\nIf the credit allowable under subsection (a) for any taxable year exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section and section 25D), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.\nNo credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose. For purposes of the preceding sentence, credits shall be treated as used on a first-in first-out basis.\nRules similar to the rules of paragraphs (2), (3), and (4) of section 21(e) shall apply for purposes of this section.\nNo credit shall be allowed under this section with respect to any eligible child unless the taxpayer includes (if known) the name, age, and TIN of such child on the return of tax for the taxable year.\nThe Secretary may, in lieu of the information referred to in subparagraph (A), require other information meeting the purposes of subparagraph (A), including identification of an agent assisting with the adoption.\nFor purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out this section and section 137, including regulations which treat unmarried individuals who pay or incur qualified adoption expenses with respect to the same child as 1 taxpayer for purposes of applying the dollar amounts in subsections (a)(3) and (b)(1) of this section and in section 137(b)(1).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nA prior section 23, added  Pub. L. 95–618, title I, §\u202f101(a) ,  Nov. 9, 1978 ,  92 Stat. 3175 , §\u202f44C; amended  Pub. L. 96–223, title II , §§\u202f201, 202(a)–(d), 203(a),  Apr. 2, 1980 ,  94 Stat. 256 , 258; renumbered §\u202f23 and amended  Pub. L. 98–369, div. A, title IV , §§\u202f471(c), 474(e), title VI, §\u202f612(e)(2),  July 18, 1984 ,  98 Stat. 826 , 831, 912, related to residential energy credit, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11801(a)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–520 .\n2018—Subsec. (c)(1).  Pub. L. 115–141  substituted “section 25D” for “sections 25D and 1400C”.\n2017—Subsec. (h)(2).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2013—Subsec. (b)(4).  Pub. L. 112–240, §\u202f104(c)(2)(A)(i) , struck out par. (4). Prior to amendment, text read as follows: “In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of—\n“(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over\n“(B) the sum of the credits allowable under this subpart (other than this section and section 25D) and section 27 for the taxable year.”\nSubsec. (c).  Pub. L. 112–240, §\u202f104(c)(2)(A)(ii) , (iii), added par. (1), redesignated par. (3) as (2), and struck out former pars. (1) and (2) which related to rule for years in which all personal credits allowed against regular and alternative minimum tax and rule for other years, respectively.\n2010—Subsec. (a)(3).  Pub. L. 111–148, §\u202f10909(a)(1)(B) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “$13,170” for “$10,000” in heading and text. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (b)(1).  Pub. L. 111–148, §\u202f10909(a)(1)(A) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “$13,170” for “$10,000”. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (b)(4).  Pub. L. 111–148, §\u202f10909(b)(2)(I)(i) , (c), as amended by  Pub. L. 111–312 , temporarily struck out par. (4). Text read as follows: “In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of—\n“(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over\n“(B) the sum of the credits allowable under this subpart (other than this section and section 25D) and section 27 for the taxable year.”\nSee Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (c).  Pub. L. 111–148, §\u202f10909(b)(2)(I)(ii) , (c), as amended by  Pub. L. 111–312 , temporarily struck out subsec. (c) which related to carryforwards of unused credit. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (h).  Pub. L. 111–148, §\u202f10909(a)(1)(C) , (c), as amended by  Pub. L. 111–312 , temporarily amended subsec. (h) generally. Prior to amendment, subsec. (h) related to adjustments for inflation. See Effective and Termination Dates of 2010 Amendment note below.\n2008—Subsec. (b)(4)(B).  Pub. L. 110–343  inserted “and section 25D” after “this section”.\n2005—Subsec. (b)(4).  Pub. L. 109–135, §\u202f402(i)(3)(A)(i) , substituted “In the case of a taxable year to which section 26(a)(2) does not apply, the credit” for “The credit” in introductory provisions.\nSubsec. (c).  Pub. L. 109–135, §\u202f402(i)(3)(A)(ii) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If the credit allowable under subsection (a) for any taxable year exceeds the limitation imposed by subsection (b)(4) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year. No credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose. For purposes of the preceding sentence, credits shall be treated as used on a first-in first-out basis.”\nPub. L. 109–58, §\u202f1335(b)(1) , which directed amendment of subsec. (c) by substituting “this section, section 25D, and section 1400C” for “this section and section 1400C”, was repealed by  Pub. L. 109–135, §\u202f402(i)(4) . See Effective and Termination Dates of 2005 Amendment notes below.\n2002—Subsec. (a)(1).  Pub. L. 107–147, §\u202f411(c)(1)(A) , reenacted heading without change and amended text of par. (1) generally. Prior to amendment, text read as follows: “In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter—\n“(A) in the case of an adoption of a child other than a child with special needs, the amount of the qualified adoption expenses paid or incurred by the taxpayer, and\n“(B) in the case of an adoption of a child with special needs, $10,000.”\nSubsec. (a)(2).  Pub. L. 107–147, §\u202f411(c)(1)(C) , struck out concluding provisions which read as follows: “In the case of the adoption of a child with special needs, the credit allowed under paragraph (1) shall be allowed for the taxable year in which the adoption becomes final.”\nSubsec. (a)(3).  Pub. L. 107–147, §\u202f411(c)(1)(B) , added par. (3).\nSubsec. (b)(1).  Pub. L. 107–147, §\u202f411(c)(1)(D) , substituted “subsection (a)” for “subsection (a)(1)(A)”.\nSubsec. (h).  Pub. L. 107–147, §\u202f418(a)(1) , substituted “subsection (a)(3)” for “subsection (a)(1)(B)” in introductory provisions and inserted concluding provisions.\nSubsec. (i).  Pub. L. 107–147, §\u202f411(c)(1)(E) , substituted “the dollar amounts in subsections (a)(3) and (b)(1)” for “the dollar limitation in subsection (b)(1)”.\n2001—Subsec. (a)(1).  Pub. L. 107–16, §\u202f202(a)(1) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter the amount of the qualified adoption expenses paid or incurred by the taxpayer.”\nSubsec. (a)(2).  Pub. L. 107–16, §\u202f202(c) , inserted concluding provisions.\nSubsec. (b)(1).  Pub. L. 107–16, §\u202f202(b)(1)(A) , substituted “subsection (a)(1)(A)” for “subsection (a)” and “$10,000” for “$5,000” and struck out “($6,000, in the case of a child with special needs)” before period at end.\nSubsec. (b)(2)(A)(i).  Pub. L. 107–16, §\u202f202(b)(2)(A) , substituted “$150,000” for “$75,000”.\nSubsec. (b)(4).  Pub. L. 107–16, §\u202f202(f)(1) , added par. (4).\nSubsec. (c).  Pub. L. 107–16, §\u202f202(f)(2)(A) , substituted “subsection (b)(4)” for “section 26(a)” and struck out “reduced by the sum of the credits allowable under this subpart (other than this section and sections 24 and 1400C)” before “,\u2000such excess”.\nPub. L. 107–16, §\u202f201(b)(2)(E) , substituted “and sections 24 and 1400C” for “and section 1400C”.\nSubsec. (d)(2).  Pub. L. 107–16, §\u202f202(d)(1) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘eligible child’ means any individual—\n“(A) who—\n“(i) has not attained age 18, or\n“(ii) is physically or mentally incapable of caring for himself, and\n“(B) in the case of qualified adoption expenses paid or incurred after  December 31, 2001 , who is a child with special needs.”\nSubsecs. (h), (i).  Pub. L. 107–16, §\u202f202(e)(1) , added subsec. (h) and redesignated former subsec. (h) as (i).\n1998—Subsec. (b)(2)(A).  Pub. L. 105–206, §\u202f6018(f)(1) , inserted “(determined without regard to subsection (c))” after “for any taxable year” in introductory provisions.\nSubsec. (c).  Pub. L. 105–206, §\u202f6008(d)(6) , inserted “and section 1400C” after “other than this section”.\n1997—Subsec. (a)(2).  Pub. L. 105–34, §\u202f1601(h)(2)(A) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The credit under paragraph (1) with respect to any expense shall be allowed—\n“(A) for the taxable year following the taxable year during which such expense is paid or incurred, or\n“(B) in the case of an expense which is paid or incurred during the taxable year in which the adoption becomes final, for such taxable year.”\nSubsec. (b)(2)(B).  Pub. L. 105–34, §\u202f1601(h)(2)(B) , substituted “determined without regard to sections 911, 931, and 933.” for “determined—\n“(i) without regard to sections 911, 931, and 933, and\n“(ii) after the application of sections 86, 135, 137, 219, and 469.”\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title I, §\u202f104(d) ,  Jan. 2, 2013 ,  126 Stat. 2323 , provided that:  “The amendments made by this section [amending this section and sections 24, 25, 25A, 25B, 25D, 26, 30, 30B, 30D, 55, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2011 .”\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nPub. L. 110–343, div. B, title I, §\u202f106(f) ,  Oct. 3, 2008 ,  122 Stat. 3817 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 24, 25B, 25D, 26, and 45 of this title] shall apply to taxable years beginning after  December 31, 2007 . \n \n “(2)   Solar electric property limitation .— The amendments made by subsection (b) [amending  section 25D of this title ] shall apply to taxable years beginning after  December 31, 2008 . \n \n “(3)   Application of egtrra sunset .— The amendments made by subparagraphs (A) and (B) of subsection (e)(2) [amending this section and  section 24 of this title ] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] in the same manner as the provisions of such Act to which such amendments relate.”\nPub. L. 109–135, title IV, §\u202f402(i)(3)(H) ,  Dec. 21, 2005 ,  119 Stat. 2615 , provided that:  “The amendments made by this paragraph [amending this section and sections 24, 25, 25B, 25D, 904, and 1400C of this title] (and each part thereof) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] in the same manner as the provisions of such Act to which such amendment (or part thereof) relates.”\nPub. L. 109–135, title IV, §\u202f402(i)(4) ,  Dec. 21, 2005 ,  119 Stat. 2615 , struck out  Pub. L. 109–58, §\u202f1335(b)(1) –(3), and provided in part that:  “The Internal Revenue Code of 1986 shall be applied and administered as if the amendments made [by] such paragraphs [amending this section and sections 25 and 1400C of this title] had never been enacted.”\nPub. L. 109–135, title IV, §\u202f402(m) ,  Dec. 21, 2005 ,  119 Stat. 2615 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [see Tables for classification] shall take effect as if included in the provisions of the Energy Policy Act of 2005 [ Pub. L. 109–58 ] to which they relate. \n \n “(2)   Repeal of public utility holding company act of 1935 .— The amendments made by subsection (a) [amending sections 121, 246, 247, 1223, 1245, and 1250 of this title and repealing sections 1081 to 1083 of this title] shall not apply with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 [ 15 U.S.C. 79  et seq.] before its repeal. \n \n “(3)   Coordination of personal credits .— The amendments made by subsection (i)(3) [amending this section and sections 24, 25, 25B, 25D, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 109–58, title XIII, §\u202f1335(c) ,  Aug. 8, 2005 ,  119 Stat. 1036 , provided that:  “The amendments made by this section [enacting  section 25D of this title  and amending this section and sections 25, 1016, and 1400C of this title] shall apply to property placed in service after  December 31, 2005 , in taxable years ending after such date.”\nPub. L. 107–147, title IV, §\u202f411(c)(3) ,  Mar. 9, 2002 ,  116 Stat. 46 , provided that:  “The amendments made by this subsection [amending this section and  section 137 of this title ] shall apply to taxable years beginning after  December 31, 2002 ; except that the amendments made by paragraphs (1)(C), (1)(D) [amending this section], and (2)(B) [amending  section 137 of this title ] shall apply to taxable years beginning after  December 31, 2001 .”\nAmendment by  section 418(a)(1) of Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 418(c) of Pub. L. 107–147 , set out as a note under  section 21 of this title .\nPub. L. 108–311, title III, §\u202f312(b)(2) ,  Oct. 4, 2004 ,  118 Stat. 1181 , provided that:  “The amendments made by sections 201(b), 202(f), and 618(b) of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 , amending this section and sections 24, 25, 25B, 26, 904, and 1400C of this title] shall not apply to taxable years beginning during 2004 or 2005.”\nPub. L. 107–147, title VI, §\u202f601(b)(2) ,  Mar. 9, 2002 ,  116 Stat. 59 , provided that:  “The amendments made by sections 201(b), 202(f), and 618(b) of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 , amending this section and sections 24, 25, 25B, 26, 904, and 1400C of this title] shall not apply to taxable years beginning during 2002 and 2003.”\nAmendment by  section 201(b)(2)(E) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 201(e)(2) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nPub. L. 107–16, title II, §\u202f202(g) ,  June 7, 2001 ,  115 Stat. 49 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 24, 26, 137, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2001 . \n \n “(2)   Subsection  (a).— The amendments made by subsection (a) [amending this section and  section 137 of this title ] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 105–206, title VI, §\u202f6018(h) ,  July 22, 1998 ,  112 Stat. 823 , provided that:  “The amendments made by this section [amending this section and sections 219, 408, 414, and 679 of this title and amending provisions set out as notes under sections 167 and 4091 of this title] shall take effect as if included in the provisions of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 ] to which they relate.”\nAmendment by  section 6008(d)(6) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title XVI, §\u202f1601(j) ,  Aug. 5, 1997 ,  111 Stat. 1093 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section, sections 30A, 52, 55, 137, 401, 403, 404, 408, 414, 512, 529, 593, 641, 679, 860L, 956, 1361, 1374, 4001, 4041, 4092, 4261, 6039D, 6048, 6050R, 6501, 6693, 7701, and 9503 of this title,  section 1055 of Title 29 , Labor, and provisions set out as notes under sections 529 and 4091 of this title] shall take effect as if included in the provisions of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 ] to which they relate. \n \n “(2)   Certain administrative requirements with respect to certain pension plans .— The amendment made by subsection (d)(2)(D) [amending  section 401 of this title ] shall apply to calendar years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–188, title I, §\u202f1807(e) ,  Aug. 20, 1996 ,  110 Stat. 1903 , provided that:  “The amendments made by this section [enacting this section and  section 137 of this title , renumbering former  section 137 of this title  as section 138, and amending sections 25, 86, 135, 219, 469, and 1016 of this title] shall apply to taxable years beginning after  December 31, 1996 .”\nAmendment by  Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nPub. L. 115–141, div. U, title IV, §\u202f401(e) ,  Mar. 23, 2018 ,  132 Stat. 1212 , provided that:  \n “If— “(1)  any provision amended or repealed by the amendments made by subsection (b) or (d) [see Tables for classification] applied to— “(A)  any transaction occurring before the date of the enactment of this Act [ Mar. 23, 2018 ], \n \n “(B)  any property acquired before such date of enactment, or \n \n “(C)  any item of income, loss, deduction, or credit taken into account before such date of enactment, and \n \n \n “(2)  the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by such subsection) affect the liability for tax for periods ending after such date of enactment, \n \n\n nothing in the amendments or repeals made by this section [see Tables for classification] shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”\nPub. L. 107–147, title IV, §\u202f411(c)(1)(F) ,  Mar. 9, 2002 ,  116 Stat. 45 , provided that:  “Expenses paid or incurred during any taxable year beginning before  January 1, 2002 , may be taken into account in determining the credit under section 23 of the Internal Revenue Code of 1986 only to the extent the aggregate of such expenses does not exceed the applicable limitation under section 23(b)(1) of such Code as in effect on the day before the date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ June 7, 2001 ].”\nPub. L. 104–188, title I, §\u202f1807(d) ,  Aug. 20, 1996 ,  110 Stat. 1903 , provided that:  “The Secretary of the Treasury shall study the effect on adoptions of the tax credit and gross income exclusion established by the amendments made by this section [enacting this section and  section 137 of this title , renumbering former  section 137 of this title  as section 138, and amending sections 25, 86, 135, 219, 469, and 1016 of this title] and shall submit a report regarding the study to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives not later than  January 1, 2000 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'There shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer for which the taxpayer is allowed a deduction under section 151 an amount equal to $1,000.\nThe amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of the preceding sentence, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.\nThe term “qualifying child” means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17.\nThe term “qualifying child” shall not include any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows “resident of the United States”.\nThe term “social security taxes” shall not include any taxes to the extent the taxpayer is entitled to a special refund of such taxes under section 6413(c).\nAny amounts paid pursuant to an agreement under section 3121( l ) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in subparagraph (A)(i) shall be treated as taxes referred to in such subparagraph.\nParagraph (1) shall not apply to any taxpayer for any taxable year if such taxpayer elects to exclude any amount from gross income under section 911 for such taxable year.\nNo credit shall be allowed under this section to a taxpayer with respect to any qualifying child unless the taxpayer includes the name and taxpayer identification number of such qualifying child on the return of tax for the taxable year and such taxpayer identification number was issued on or before the due date for filing such return.\nNo credit shall be allowed under this section if the taxpayer identification number of the taxpayer was issued after the due date for filing the return for the taxable year.\nExcept in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months.\nNo credit shall be allowed under this section for any taxable year in the disallowance period.\nIn the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit.\nIn the case of a taxable year beginning after  December 31, 2017 , and before  January 1, 2026 , this section shall be applied as provided in paragraphs (2) through (7).\nSubsection (a) shall be applied by substituting “$2,000” for “$1,000”.\nIn lieu of the amount determined under subsection (b)(2), the threshold amount shall be $400,000 in the case of a joint return ($200,000 in any other case).\nThe credit determined under subsection (a) (after the application of paragraph (2)) shall be increased by $500 for each dependent of the taxpayer (as defined in section 152) other than a qualifying child described in subsection (c).\nSubparagraph (A) shall not apply with respect to any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows “resident of the United States”.\nIn the case of any qualifying child with respect to whom a credit is not allowed under this section by reason of paragraph (7), such child shall be treated as a dependent to whom subparagraph (A) applies.\nThe amount determined under subsection (d)(1)(A) with respect to any qualifying child shall not exceed $1,400, and such subsection shall be applied without regard to paragraph (4) of this subsection.\nSubsection (d)(1)(B)(i) shall be applied by substituting “$2,500” for “$3,000”.\nSubsection (h)(2) shall not apply and subsection (a) shall be applied by substituting “$3,000 ($3,600 in the case of a qualifying child who has not attained age 6 as of the close of the calendar year in which the taxable year of the taxpayer begins)” for “$1,000”.\nThe amount of the credit allowable under subsection (a) (determined without regard to subsection (b)) shall be reduced by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income (as defined in subsection (b)) exceeds the applicable threshold amount.\nSubsection (b) shall be applied by substituting “the credit allowable under subsection (a) (determined after the application of subsection (i)(4)(A)” for “the credit allowable under subsection (a)”.\nThe amount of the credit allowed under this section to any taxpayer for any taxable year shall be reduced (but not below zero) by the aggregate amount of payments made under section 7527A to such taxpayer during such taxable year. Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).\nIf the aggregate amount of payments under section 7527A to the taxpayer during the taxable year exceeds the amount of the credit allowed under this section to such taxpayer for such taxable year (determined without regard to paragraph (1)), the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess. Any failure to so increase the tax shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).\nIn the case of a taxpayer whose modified adjusted gross income (as defined in subsection (b)) for the taxable year does not exceed 200 percent of the applicable income threshold, the amount of the increase determined under subparagraph (A) with respect to such taxpayer for such taxable year shall be reduced (but not below zero) by the safe harbor amount.\nIn the case of a taxpayer whose modified adjusted gross income (as defined in subsection (b)) for the taxable year exceeds the applicable income threshold, the safe harbor amount otherwise in effect under clause (i) shall be reduced by the amount which bears the same ratio to such amount as such excess bears to the applicable income threshold.\nThe Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning after 2020. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession.\nNo credit shall be allowed under this section for any taxable year to any individual to whom a credit is allowable against taxes imposed by a possession of the United States with a mirror code tax system by reason of the application of this section in such possession for such taxable year.\nFor purposes of this paragraph, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.\nThe Secretary shall pay to American Samoa amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of American Samoa by reason of the application of this section for taxable years beginning after 2020 if the provisions of this section had been in effect in American Samoa (applied as if American Samoa were the United States and without regard to the application of this section to bona fide residents of Puerto Rico under subsection (i)(1)).\nSubparagraph (A) shall not apply unless American Samoa has a plan, which has been approved by the Secretary, under which American Samoa will promptly distribute such payments to its residents.\nIn the case of a taxable year with respect to which a plan is approved under subparagraph (B), this section (other than this subsection) shall not apply to any individual eligible for a distribution under such plan.\nFor purposes of  section 1324 of title 31 , United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSection 205(c)(2)(B)(i) of the Social Security Act, referred to in subsec. (h)(7)(A), is classified to  section 405(c)(2)(B)(i) of Title 42 , The Public Health and Welfare.\nA prior section 24, added  Pub. L. 92–178, title VII, §\u202f701(a) ,  Dec. 10, 1971 ,  85 Stat. 560 , §\u202f41; amended  Pub. L. 93–625 , §§\u202f11(a)–(c), (e), 12(a),  Jan. 3, 1975 ,  88 Stat. 2119 , 2120;  Pub. L. 94–455, title V, §\u202f503(b)(4) , title XIX, §§\u202f1901(b)(1)(B), (H)(ii), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1562 , 1790, 1791, 1834;  Pub. L. 95–600, title I, §\u202f113(c) ,  Nov. 6, 1978 ,  92 Stat. 2778 ;  Pub. L. 97–473, title II, §\u202f202(b)(1) ,  Jan. 14, 1983 ,  96 Stat. 2609 ;  Pub. L. 98–21, title I, §\u202f122(c)(1) ,  Apr. 20, 1983 ,  97 Stat. 87 ; renumbered §\u202f24 and amended  Pub. L. 98–369, div. A, title IV , §§\u202f471(c), 474(f),  July 18, 1984 ,  98 Stat. 826 , 831, related to contributions to candidates for public office, prior to repeal by  Pub. L. 99–514, title I , §§\u202f112(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2108 , 2121, applicable to taxable years beginning after  Dec. 31, 1986 .\n2021—Subsec. (i).  Pub. L. 117–2, §\u202f9611(a) , added subsec. (i).\nSubsec. (j).  Pub. L. 117–2, §\u202f9611(b)(2) , added subsec. (j).\nSubsec. (k).  Pub. L. 117–2, §\u202f9612(a) , added subsec. (k).\n2018—Subsec. (d)(3), (5).  Pub. L. 115–141, §\u202f401(a)(3) , redesignated par. (5) as (3).\nSubsec. (e)(2).  Pub. L. 115–141, §\u202f101(i)(1) , substituted “taxpayer identification number” for “identifying number”.\n2017—Subsec. (h).  Pub. L. 115–97  added subsec. (h).\n2015—Subsec. (d)(1)(B)(i).  Pub. L. 114–113, §\u202f101(a) , substituted “$3,000” for “$10,000”.\nSubsec. (d)(3), (4).  Pub. L. 114–113, §\u202f101(b) , struck out pars. (3) and (4) which related to inflation adjustment and special rule for certain years, respectively.\nSubsec. (d)(5).  Pub. L. 114–27  added par. (5).\nSubsec. (e).  Pub. L. 114–113, §\u202f205(a) , (b), substituted “requirements” for “requirement” in subsec. heading, designated existing provisions as par. (1), inserted par. heading and “and such taxpayer identification number was issued on or before the due date for filing such return” before period at end, and added par. (2).\nSubsec. (g).  Pub. L. 114–113, §\u202f208(a)(1) , added subsec. (g).\n2014—Subsec. (d)(4).  Pub. L. 113–295  amended par. (4) generally. The amendment was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 ( Pub. L. 111–5, div. B, title I ) to which the amendment related. As amended by  Pub. L. 111–5, §\u202f1003(a) , par. (4) read as follows: “ Special rule for 2009 and 2010 .—Notwithstanding paragraph (3), in the case of any taxable year beginning in 2009 or 2010, the dollar amount in effect for such taxable year under paragraph (1)(B)(i) shall be $3,000.” See 2009 Amendment and Effective Date of 2014 Amendment notes below.\n2013—Subsec. (b)(3).  Pub. L. 112–240, §\u202f104(c)(2)(B)(i) , struck out par. (3). Prior to amendment, text read as follows: “In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of—\n“(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over\n“(B) the sum of the credits allowable under this subpart (other than this section and sections 23, 25A(i), 25B, 25D, 30, 30B, and 30D) and section 27 for the taxable year.”\nSubsec. (d)(1).  Pub. L. 112–240, §\u202f104(c)(2)(B)(ii)(II) , substituted “section 26(a)” for “section 26(a)(2) or subsection (b)(3), as the case may be” in concluding provisions.\nSubsec. (d)(1)(A), (B).  Pub. L. 112–240, §\u202f104(c)(2)(B)(ii)(I) , substituted “section 26(a)” for “section 26(a)(2) or subsection (b)(3), as the case may be,” in subpar. (A) and in introductory provisions in subpar. (B).\nSubsec. (d)(4).  Pub. L. 112–240, §\u202f103(b) , which directed substitution of “for certain years” for “2009, 2010, 2011, and 2012” in heading and “after 2008 and before 2018” for “in 2009, 2010, 2011, or 2012” in text, could not be executed because of the subsequent general amendment of subsec. (d)(4) by  Pub. L. 113–295 , which was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 ( Pub. L. 111–5, div. B, title I ) to which the amendment related. See 2014 Amendment note above and Effective Date of 2014 Amendment note below.\n2010—Subsec. (b)(3)(B).  Pub. L. 111–148, §\u202f10909(b)(2)(A) , (c), as amended by  Pub. L. 111–312, §\u202f101(b)(1) , temporarily struck out “23,” before “25A(i),”. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (d)(4).  Pub. L. 111–312, §\u202f103(b) , which directed substitution of “2009, 2010, 2011, and 2012” for “2009 and 2010” in heading and “,\u20002010, 2011, or 2012” for “or 2010” in text, could not be executed because of the subsequent general amendment of subsec. (d)(4) by  Pub. L. 113–295 , which was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 ( Pub. L. 111–5, div. B, title I ) to which the amendment related. See 2014 Amendment note above and Effective Date of 2014 Amendment note below.\n2009—Subsec. (b)(3)(B).  Pub. L. 111–5, §\u202f1144(b)(1)(A) , inserted “30B,” after “30,”.\nPub. L. 111–5, §\u202f1142(b)(1)(A) , inserted “30,” after “25D,”.\nPub. L. 111–5, §\u202f1004(b)(1) , inserted “25A(i),” after “23,”.\nSubsec. (d)(4).  Pub. L. 111–5, §\u202f1003(a) , amended par. (4) generally. Prior to amendment, text read as follows: “Notwithstanding paragraph (3), in the case of any taxable year beginning in 2008, the dollar amount in effect for such taxable year under paragraph (1)(B)(i) shall be $8,500.” Par. (4) was subsequently generally amended by  Pub. L. 113–295 , effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 ( Pub. L. 111–5, div. B, title I ) to which the amendment related. See 2014 Amendment note above and Effective Date of 2014 Amendment note below.\n2008—Subsec. (a).  Pub. L. 110–351  inserted “for which the taxpayer is allowed a deduction under section 151” after “of the taxpayer”.\nSubsec. (b)(3)(B).  Pub. L. 110–343, §\u202f205(d)(1)(A) , substituted “25D, and 30D” for “and 25D”.\nPub. L. 110–343, §\u202f106(e)(2)(B) , substituted “,\u200025B, and 25D” for “and 25B”.\nSubsec. (d)(4).  Pub. L. 110–343, §\u202f501(a) , added par. (4).\n2007—Subsec. (d)(1)(B).  Pub. L. 110–172, §\u202f11(c)(1)(A) , substituted “the greater of” for “the excess (if any) of” in introductory provisions.\nSubsec. (d)(1)(B)(ii)(II).  Pub. L. 110–172, §\u202f11(c)(1)(B) , substituted “section 32” for “section”.\n2005—Subsec. (b)(3).  Pub. L. 109–135, §\u202f402(i)(3)(B)(i) , substituted “In the case of a taxable year to which section 26(a)(2) does not apply, the credit” for “The credit” in introductory provisions.\nSubsec. (d)(1).  Pub. L. 109–135, §\u202f402(i)(3)(B)(ii) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of—\n“(A) the credit which would be allowed under this section without regard to this subsection and the limitation under subsection (b)(3), or\n“(B) the amount by which the amount of credit allowed by this section (determined without regard to this subsection) would increase if the limitation imposed by subsection (b)(3) were increased by the greater of—\n“(i) 15 percent of so much of the taxpayer’s earned income (within the meaning of section 32) which is taken into account in computing taxable income for the taxable year as exceeds $10,000, or\n“(ii) in the case of a taxpayer with 3 or more qualifying children, the excess (if any) of—\n“(I) the taxpayer’s social security taxes for the taxable year, over\n“(II) the credit allowed under section 32 for the taxable year.\nThe amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a) without regard to subsection (b)(3). For purposes of subparagraph (B), any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.”\n2004—Subsec. (a).  Pub. L. 108–311, §\u202f101(a) , reenacted heading without change and amended text generally, substituting provisions relating to $1,000 per year credit per qualifying child for provisions relating to different credit amounts for calendar years 2003 through 2010 or thereafter.\nSubsec. (c)(1).  Pub. L. 108–311, §\u202f204(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualifying child’ means any individual if—\n“(A) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year,\n“(B) such individual has not attained the age of 17 as of the close of the calendar year in which the taxable year of the taxpayer begins, and\n“(C) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B).”\nSubsec. (c)(2).  Pub. L. 108–311, §\u202f204(b) , substituted “subparagraph (A) of section 152(b)(3)” for “the first sentence of section 152(b)(3)”.\nSubsec. (d)(1).  Pub. L. 108–311, §\u202f104(a) , inserted at end of concluding provisions “For purposes of subparagraph (B), any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.”\nSubsec. (d)(1)(B)(i).  Pub. L. 108–311, §\u202f102(a) , struck out “(10 percent in the case of taxable years beginning before  January 1, 2005 )” after “15 percent”.\nSubsec. (d)(2)(A)(iii).  Pub. L. 108–311, §\u202f408(b)(4) , amended directory language of  Pub. L. 107–90 . See 2001 Amendment note below.\n2003—Subsec. (a)(2).  Pub. L. 108–27  amended table by deleting items relating to calendar years 2001 and 2002 and increasing per child amount from $600 to $1,000 for calendar years 2003 or 2004.\n2002—Subsec. (b)(3)(B).  Pub. L. 107–147, §\u202f417(23)(A) , amended directory language of  Pub. L. 107–16, §\u202f618(b)(2)(A) . See 2001 Amendment note below.\nSubsec. (d)(1)(B).  Pub. L. 107–147, §\u202f411(b) , substituted “aggregate amount of credits allowed by this subpart” for “amount of credit allowed by this section” in introductory provisions.\n2001—Subsec. (a).  Pub. L. 107–16, §\u202f201(a) , amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “There shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer an amount equal to $500 ($400 in the case of taxable years beginning in 1998).”\nSubsec. (b).  Pub. L. 107–16, §\u202f201(b)(2)(A) , amended heading generally, substituting “Limitations” for “Limitation based on adjusted gross income”.\nSubsec. (b)(1).  Pub. L. 107–16, §\u202f201(b)(2)(B) , amended heading generally, substituting “Limitation based on adjusted gross income” for “In general”.\nSubsec. (b)(3).  Pub. L. 107–16, §\u202f201(b)(1) , added par. (3).\nSubsec. (b)(3)(B).  Pub. L. 107–16, §\u202f618(b)(2)(A) , as amended by  Pub. L. 107–147, §\u202f417(23)(A) , substituted “sections 23 and 25B” for “section 23”.\nPub. L. 107–16, §\u202f202(f)(2)(B) , substituted “this section and section 23” for “this section”.\nSubsec. (d).  Pub. L. 107–16, §\u202f201(c)(1) , amended subsec. heading and heading and text of par. (1) generally. Prior to amendment, text read as follows: “In the case of a taxpayer with three or more qualifying children for any taxable year, the aggregate credits allowed under subpart C shall be increased by the lesser of—\n“(A) the credit which would be allowed under this section without regard to this subsection and the limitation under section 26(a); or\n“(B) the amount by which the aggregate amount of credits allowed by this subpart (without regard to this subsection) would increase if the limitation imposed by section 26(a) were increased by the excess (if any) of—\n“(i) the taxpayer’s Social Security taxes for the taxable year, over\n“(ii) the credit allowed under section 32 (determined without regard to subsection (n)) for the taxable year.\nThe amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a) without regard to section 26(a).”\nSubsec. (d)(1).  Pub. L. 107–16, §\u202f201(b)(2)(C)(i) , substituted “subsection (b)(3)” for “section 26(a)” wherever appearing in subsec. (d), as amended by  Pub. L. 107–16, §\u202f201(c) .\nSubsec. (d)(1)(B).  Pub. L. 107–16, §\u202f201(b)(2)(C)(ii) , substituted “amount of credit allowed by this section” for “aggregate amount of credits allowed by this subpart” in subpar. (B) as amended by  Pub. L. 107–16, §\u202f201(c) .\nSubsec. (d)(2).  Pub. L. 107–16, §\u202f201(d) , redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows: “For taxable years beginning after  December 31, 2001 , the credit determined under this subsection for the taxable year shall be reduced by the excess (if any) of—\n“(A) the amount of tax imposed by section 55 (relating to alternative minimum tax) with respect to such taxpayer for such taxable year, over\n“(B) the amount of the reduction under section 32(h) with respect to such taxpayer for such taxable year.”\nSubsec. (d)(2)(A)(iii).  Pub. L. 107–90 , as amended by  Pub. L. 108–311, §\u202f408(b)(4) , substituted “section 3211(a)” for “section 3211(a)(1)”.\nSubsec. (d)(3).  Pub. L. 107–16, §\u202f201(d)(2) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nSubsec. (d)(4).  Pub. L. 107–16, §\u202f201(c)(2) , added par. (4). Former par. (4) redesignated (3).\n1999—Subsec. (d)(2).  Pub. L. 106–170  substituted “2001” for “1998” in introductory provisions.\n1998—Subsec. (d)(1).  Pub. L. 105–206, §\u202f6003(a)(1)(C) , added par. (1) and struck out heading and text of former par. (1). Text read as follows: “In the case of a taxpayer with 3 or more qualifying children for any taxable year, the amount of the credit allowed under this section shall be equal to the greater of—\n“(A) the amount of the credit allowed under this section (without regard to this subsection and after application of the limitation under section 26), or\n“(B) the alternative credit amount determined under paragraph (2).”\nSubsec. (d)(2).  Pub. L. 105–277  substituted “For taxable years beginning after  December 31, 1998 , the credit” for “The credit”.\nPub. L. 105–206, §\u202f6003(a)(1)(C) , added par. (2) and struck out heading and text of former par. (2). Text read as follows: “For purposes of this subsection, the alternative credit amount is the amount of the credit which would be allowed under this section if the limitation under paragraph (3) were applied in lieu of the limitation under section 26.”\nSubsec. (d)(3).  Pub. L. 105–206, §\u202f6003(a)(1)(A) , (B), (2), redesignated par. (5) as (3), substituted “paragraph (1)” for “paragraph (3)” in introductory provisions, and struck out heading and text of former par. (3). Text read as follows: “The limitation under this paragraph for any taxable year is the limitation under section 26 (without regard to this subsection)—\n“(A) increased by the taxpayer’s social security taxes for such taxable year, and\n“(B) reduced by the sum of—\n“(i) the credits allowed under this part other than under subpart C or this section, and\n“(ii) the credit allowed under section 32 without regard to subsection (m) thereof.”\nSubsec. (d)(4).  Pub. L. 105–206, §\u202f6003(a)(1)(A) , struck out heading and text of par. (4). Text read as follows: “If the amount of the credit under paragraph (1)(B) exceeds the amount of the credit under paragraph (1)(A), such excess shall be treated as a credit to which subpart C applies. The rule of section 32(h) shall apply to such excess.”\nSubsec. (d)(5).  Pub. L. 105–206, §\u202f6003(a)(1)(B) , redesignated par. (5) as (3).\nPub. L. 117–2, title IX, §\u202f9611(c)(1) ,  Mar. 11, 2021 ,  135 Stat. 150 , provided that:  “The amendments made by this section [enacting  section 7527A of this title  and amending this section, sections 26, 3402, and 6211 of this title, and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 117–2, title IX, §\u202f9612(b) ,  Mar. 11, 2021 ,  135 Stat. 152 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 115–141, div. U, title I, §\u202f101(s) ,  Mar. 23, 2018 ,  132 Stat. 1169 , provided that:  “The amendments made by this section [see Tables for classification] shall take effect as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015 [ Pub. L. 114–113, div. Q ] to which they relate.”\nPub. L. 115–97, title I, §\u202f11022(b) ,  Dec. 22, 2017 ,  131 Stat. 2074 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f101(c) ,  Dec. 18, 2015 ,  129 Stat. 3044 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title II, §\u202f205(c) ,  Dec. 18, 2015 ,  129 Stat. 3081 , as amended by  Pub. L. 115–141, div. U, title I, §\u202f101(i)(2) ,  Mar. 23, 2018 ,  132 Stat. 1162 , provided that:  “The amendments made by this section [amending this section] shall apply to any return of tax, and any amendment or supplement to any return of tax, which is filed after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title II, §\u202f208(c) ,  Dec. 18, 2015 ,  129 Stat. 3084 , provided that:  “The amendments made by this section [amending this section and sections 25A and 6213 of this title] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–27, title VIII, §\u202f807(b) ,  June 29, 2015 ,  129 Stat. 418 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title II, §\u202f209(k) ,  Dec. 19, 2014 ,  128 Stat. 4031 , provided that:  “The amendments made by this section [amending this section, sections 25A, 30, 30D, 35, 38, 45Q, 48, 48C, 164, 853A, and 1016 of this title, and provisions set out as notes under sections 6428 and 6432 of this title] shall take effect as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 [ Pub. L. 111–5, div. B, title I ] to which they relate.”\nPub. L. 112–240, title I, §\u202f103(e) ,  Jan. 2, 2013 ,  126 Stat. 2320 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 25A, 32, and 6409 of this title and amending provisions set out as a note under  section 25A of this title ] shall apply to taxable years beginning after  December 31, 2012 . \n \n “(2)   Rule regarding disregard of refunds .— The amendment made by subsection (d) [amending  section 6409 of this title ] shall apply to amounts received after  December 31, 2012 .”\nAmendment by  section 104(c)(2)(B) of Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nPub. L. 111–312, title I, §\u202f103(d) ,  Dec. 17, 2010 ,  124 Stat. 3299 , provided that:  “The amendments made by this section [amending this section and sections 25A and 32 of this title and amending provisions set out as a note under  section 25A of this title ] shall apply to taxable years beginning after  December 31, 2010 .”\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1003(b) ,  Feb. 17, 2009 ,  123 Stat. 313 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1004(d) ,  Feb. 17, 2009 ,  123 Stat. 315 , provided that:  “The amendments made by this section [amending this section, sections 25 to 25B, 26, 904, 1400C, and 6211 of this title, and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1004(e) ,  Feb. 17, 2009 ,  123 Stat. 315 , provided that:  “The amendment made by subsection (b)(1) [amending this section] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] in the same manner as the provision of such Act to which such amendment relates.”\nPub. L. 111–5, div. B, title I, §\u202f1142(c) ,  Feb. 17, 2009 ,  123 Stat. 331 , provided that:  “The amendments made by this section [amending this section and sections 25, 25B, 26, 30, 30B, 30C, 53, 55, 904, 1016, 1400C, and 6501 of this title] shall apply to vehicles acquired after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 111–5, div. B, title I, §\u202f1142(e) ,  Feb. 17, 2009 ,  123 Stat. 331 , provided that:  “The amendment made by subsection (b)(1)(A) [amending this section] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] in the same manner as the provision of such Act to which such amendment relates.”\nPub. L. 111–5, div. B, title I, §\u202f1144(c) ,  Feb. 17, 2009 ,  123 Stat. 333 , provided that:  “The amendments made by this section [amending this section and sections 25, 25B, 26, 30B, 30C, 55, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1144(d) ,  Feb. 17, 2009 ,  123 Stat. 333 , provided that:  “The amendment made by subsection (b)(1)(A) [amending this section] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] in the same manner as the provision of such Act to which such amendment relates.”\nPub. L. 110–351, title V, §\u202f501(d) ,  Oct. 7, 2008 ,  122 Stat. 3980 , provided that:  “The amendments made by this section [amending this section and  section 152 of this title ] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  section 106(e)(2)(B) of title I of div. B of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2007 , and subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , in the same manner as the provisions of such Act to which such amendment relates, see section 106(f)(1), (3) of  Pub. L. 110–343 , set out as a note under  section 23 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nPub. L. 110–343, div. B, title II, §\u202f205(e) , (f),  Oct. 3, 2008 ,  122 Stat. 3839 , provided that: \n “(e)   Effective Date .— The amendments made by this section [enacting  section 30D of this title  and amending this section and sections 25, 25B, 26, 30B, 38, 1016, 1400C, and 6501 of this title] shall apply to taxable years beginning after  December 31, 2008 . \n \n “(f)   Application of EGTRRA Sunset .— The amendment made by subsection (d)(1)(A) [amending this section] shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16, §\u202f901 , which was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 , was formerly set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] in the same manner as the provision of such Act to which such amendment relates.”\nPub. L. 110–343, div. C, title V, §\u202f501(b) ,  Oct. 3, 2008 ,  122 Stat. 3876 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 110–172, §\u202f11(c)(2) ,  Dec. 29, 2007 ,  121 Stat. 2489 , provided that:  “The amendments made by this subsection [amending this section] shall take effect as if included in the provisions of the Gulf Opportunity Zone Act of 2005 [ Pub. L. 109–135 ] to which they relate.”\nAmendment by  Pub. L. 109–135  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , in the same manner as the provisions of such Act to which such amendment relates, see  section 402(i)(3)(H) of Pub. L. 109–135 , set out as a note under  section 23 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates and applicable to taxable years beginning after  Dec. 31, 2005 , see  section 402(m) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nAmendment by  section 101(a) of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 101(e) of Pub. L. 108–311 , set out as a note under  section 1 of this title .\nPub. L. 108–311, title I, §\u202f102(b) ,  Oct. 4, 2004 ,  118 Stat. 1168 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 108–311, title I, §\u202f104(c)(1) ,  Oct. 4, 2004 ,  118 Stat. 1169 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nAmendment by title I of  Pub. L. 108–311  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , to the same extent and in the same manner as the provisions of such Act to which such amendments relate, see  section 105 of Pub. L. 108–311 , set out as a note under  section 1 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by  section 204 of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 108–27, title I, §\u202f101(c) ,  May 28, 2003 ,  117 Stat. 754 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 6429 of this title  and amending this section] shall apply to taxable years beginning after  December 31, 2002 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [enacting  section 6429 of this title ] shall take effect on the date of the enactment of this Act [ May 28, 2003 ].”\nAmendments by title I of  Pub. L. 108–27  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , to the same extent and in the same manner as the provisions of such Act to which such amendments relate, see  section 107 of Pub. L. 108–27 , set out as a note under  section 1 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by  section 411(b) of Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by sections 201(b), 202(f), and 618(b) of  Pub. L. 107–16  inapplicable to taxable years beginning during 2004 or 2005, see  section 312(b)(2) of Pub. L. 108–311 , set out as a note under  section 23 of this title .\nAmendment by sections 201(b), 202(f), and 618(b) of  Pub. L. 107–16  inapplicable to taxable years beginning during 2002 and 2003, see  section 601(b)(2) of Pub. L. 107–147 , set out as a note under  section 23 of this title .\nPub. L. 107–90, title II, §\u202f204(f) ,  Dec. 21, 2001 ,  115 Stat. 893 , provided that:  “The amendments made by this section [enacting subchapter E of chapter 22 of this title and amending this section and sections 72, 3201, 3211, 3221, and 3231 of this title] shall apply to calendar years beginning after  December 31, 2001 .”\nPub. L. 107–16, title II, §\u202f201(e) ,  June 7, 2001 ,  115 Stat. 47 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 23, 25, 26, 32, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2000 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section and sections 23, 25, 26, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2001 .”\nAmendment by  section 202(f)(2)(B) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 202(g)(1) of Pub. L. 107–16 , set out as a note under  section 23 of this title .\nPub. L. 107–16, title VI, §\u202f618(d) ,  June 7, 2001 ,  115 Stat. 108 , provided that:  “The amendments made by this section [enacting  section 25B of this title  and amending this section and sections 25, 25B, 26, 904, and 1400C of this title] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 106–170, title V, §\u202f501(c) ,  Dec. 17, 1999 ,  113 Stat. 1919 , provided that:  “The amendments made by this section [amending this section and sections 26 and 904 of this title] shall apply to taxable years beginning after  December 31, 1998 .”\nPub. L. 105–277, div. J, title II, §\u202f2001(c) ,  Oct. 21, 1998 ,  112 Stat. 2681–901 , provided that:  “The amendments made by this section [amending this section and  section 26 of this title ] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title I, §\u202f101(e) ,  Aug. 5, 1997 ,  111 Stat. 799 , provided that:  “The amendments made by this section [enacting this section and amending sections 32, 501, and 6213 of this title and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 107–16, title II, §\u202f203 ,  June 7, 2001 ,  115 Stat. 49 , provided that:  “Any payment considered to have been made to any individual by reason of section 24 of the Internal Revenue Code of 1986, as amended by section 201, shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following month, for purposes of determining the eligibility of such individual or any other individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'If the certificate credit rate exceeds 20 percent, the amount of the credit allowed to the taxpayer under paragraph (1) for any taxable year shall not exceed $2,000.\nIf 2 or more persons hold interests in any residence, the limitation of subparagraph (A) shall be allocated among such persons in proportion to their respective interests in the residence.\nThe term “certificate credit rate” means the rate of the credit allowable by this section which is specified in the mortgage credit certificate.\nThe certificate credit rate specified in any mortgage credit certificate shall not be less than 10 percent or more than 50 percent.\nFor purposes of subparagraph (A), the term “nonissued bond amount” means, with respect to any qualified mortgage credit certificate program, the amount of qualified mortgage bonds which the issuing authority is otherwise authorized to issue and elects not to issue under subsection (c)(2)(A)(ii).\nIf the credit allowable under subsection (a) for any taxable year exceeds the applicable tax limit for such taxable year, such excess shall be a carryover to each of the 3 succeeding taxable years and, subject to the limitations of subparagraph (B), shall be added to the credit allowable by subsection (a) for such succeeding taxable year.\nFor purposes of this paragraph, the term “applicable tax limit” means the limitation imposed by section 26(a) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 23 and 25D).\nSubsection (a) shall not apply to any indebtedness if all the requirements of subsection (c)(1), (d), (e), (f), and (i) of section 143 and clauses (iv), (v), and (vii) of subsection (c)(2)(A), were not in fact met with respect to such indebtedness. Except to the extent provided in regulations, the requirements described in the preceding sentence shall be treated as met if there is a certification, under penalty of perjury, that such requirements are met.\nA certificate shall not apply to any indebtedness which is incurred after the close of the second calendar year following the calendar year for which the issuing authority made the applicable election under subsection (c)(2)(A)(ii).\nAny issuing authority which revokes any mortgage credit certificate shall notify the Secretary of such revocation at such time and in such manner as the Secretary shall prescribe by regulations.\nThe Secretary may prescribe regulations which allow the administrator of a mortgage credit certificate program to reissue a mortgage credit certificate specifying a certified mortgage indebtedness that replaces the outstanding balance of the certified mortgage indebtedness specified on the original certificate to any taxpayer to whom the original certificate was issued, under such terms and conditions as the Secretary determines are necessary to ensure that the amount of the credit allowable under subsection (a) with respect to such reissued certificate is equal to or less than the amount of credit which would be allowable under subsection (a) with respect to the original certificate for any taxable year ending after such reissuance.\nNo credit shall be allowed under subsection (a) for any interest paid or accrued to a person who is a related person to the taxpayer (within the meaning of section 144(a)(3)(A)).\nThe term “principal residence” has the same meaning as when used in section 121.\nThe term “qualified rehabilitation” has the meaning given such term by section 143(k)(5)(B).\nThe term “qualified home improvement” means an alteration, repair, or improvement described in section 143(k)(4).\nThe term “qualified mortgage bond” has the meaning given such term by section 143(a)(1).\nFor purposes of this section, the term “single family residence” includes any manufactured home which has a minimum of 400 square feet of living space and a minimum width in excess of 102 inches and which is of a kind customarily used at a fixed location. Nothing in the preceding sentence shall be construed as providing that such a home will be taken into account in making determinations under section 143.\nIf for any calendar year any mortgage credit certificate program which satisfies procedural requirements with respect to volume limitations prescribed by the Secretary fails to meet the requirements of paragraph (2) of subsection (d), such requirements shall be treated as satisfied with respect to any certified indebtedness of such program, but the applicable State ceiling under subsection (d) of section 146 for the State in which such program operates shall be reduced by 1.25 times the correction amount with respect to such failure. Such reduction shall be applied to such State ceiling for the calendar year following the calendar year in which the Secretary determines the correction amount with respect to such failure.\nFor purposes of paragraph (1), the term “correction amount” means an amount equal to the excess credit amount divided by 0.25.\nFor purposes of clause (i), the term “credit amount” means the sum of the products determined under clauses (i) and (ii) of subsection (d)(2)(A).\nIn the case of a State having one or more constitutional home rule cities (within the meaning of section 146(d)(3)(C)), the reduction in the State ceiling by reason of paragraph (1) shall be allocated to the constitutional home rule city, or to the portion of the State not within such city, whichever caused the reduction.\nThe provisions of this subsection shall not apply in any case in which there is a certification program which is designed to ensure that the requirements of this section are met and which meets such requirements as the Secretary may by regulations prescribe.\nThe Secretary may waive the application of paragraph (1) in any case in which he determines that the failure is due to reasonable cause.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations which may require recipients of mortgage credit certificates to pay a reasonable processing fee to defray the expenses incurred in administering the program.\nThe Secretary is authorized to enter into contracts with any person to provide services in connection with the administration of this section.\nFor provisions increasing the tax imposed by this chapter to recapture a portion of the Federal subsidy from the use of mortgage credit certificates, see section 143(m).\nA prior section 25 was renumbered  section 26 of this title .\n2018—Subsec. (e)(1)(C).  Pub. L. 115–141  substituted “sections 23 and 25D” for “sections 23, 25D, and 1400C”.\n2013—Subsec. (e)(1)(C).  Pub. L. 112–240  amended subpar. (C) generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the term ‘applicable tax limit’ means—\n“(i) in the case of a taxable year to which section 26(a)(2) applies, the limitation imposed by section 26(a)(2) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 23, 25D, and 1400C), and\n“(ii) in the case of a taxable year to which section 26(a)(2) does not apply, the limitation imposed by section 26(a)(1) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 23, 24, 25A(i), 25B, 25D, 30, 30B, 30D, and 1400C).”\n2010—Subsec. (e)(1)(C).  Pub. L. 111–148, §\u202f10909(b)(2)(B) , (c), as amended by  Pub. L. 111–312 , temporarily struck out “23,” after “and sections” in cls. (i) and (ii). See Effective and Termination Dates of 2010 Amendment note below.\n2009—Subsec. (e)(1)(C)(ii).  Pub. L. 111–5, §\u202f1144(b)(1)(B) , inserted “30B,” after “30,”.\nPub. L. 111–5, §\u202f1142(b)(1)(B) , inserted “30,” after “25D,”.\nPub. L. 111–5, §\u202f1004(b)(2) , inserted “25A(i),” after “24,”.\n2008—Subsec. (e)(1)(C)(ii).  Pub. L. 110–343  inserted “30D,” after “25D,”.\n2005—Subsec. (e)(1)(C).  Pub. L. 109–135, §\u202f402(i)(3)(C) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the term ‘applicable tax limit’ means the limitation imposed by section 26(a) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 23, 24, 25B, and 1400C).”\nPub. L. 109–58, §\u202f1335(b)(2) , which directed amendment of subpar. (C) by substituting “other than this section, section 23, section 25D, and section 1400C” for “this section and sections 23 and 1400C”, was repealed by  Pub. L. 109–135, §\u202f402(i)(4) . See Effective and Termination Dates of 2005 Amendments notes below.\n2001—Subsec. (e)(1)(C).  Pub. L. 107–16, §\u202f618(b)(2)(B) , inserted “25B,” after “24,”.\nPub. L. 107–16, §\u202f201(b)(2)(F) , inserted “,\u200024,” after “sections 23”.\n1998—Subsec. (e)(1)(C).  Pub. L. 105–206  substituted “sections 23 and 1400C” for “section 23”.\n1997—Subsec. (e)(7).  Pub. L. 105–34  substituted “section 121” for “section 1034”.\n1996—Subsec. (e)(1)(C).  Pub. L. 104–188  inserted “and section 23” after “other than this section”.\n1993—Subsecs. (h) to (j).  Pub. L. 103–66  redesignated subsecs. (i) and (j) as (h) and (i), respectively, and struck out heading and text of former subsec. (h). Text read as follows: “No election may be made under subsection (c)(2)(A)(ii) for any period after  June 30, 1992 .”\n1991—Subsec. (h).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990—Subsec. (h).  Pub. L. 101–508  substituted “ December 31, 1991 ” for “ September 30, 1990 ”.\n1989—Subsec. (h).  Pub. L. 101–239  substituted “for any period after  September 30, 1990 ” for “for any calendar year after 1989”.\n1988—Subsec. (c)(2)(A)(ii).  Pub. L. 100–647, §\u202f1013(a)(25) , amended  Pub. L. 99–514, §\u202f1301(f)(2)(C)(ii) , see 1986 Amendment note below.\nSubsec. (h).  Pub. L. 100–647, §\u202f4005(a)(2) , substituted “1989” for “1988”.\nPub. L. 100–647, §\u202f1013(a)(26) , substituted “1988” for “1987”.\nSubsec. (j).  Pub. L. 100–647, §\u202f4005(g)(7) , added subsec. (j).\n1986—Subsec. (a)(1)(B).  Pub. L. 99–514, §\u202f1862(d)(1) , substituted “paid or accrued” for “paid or incurred”.\nSubsec. (b)(2)(A)(ii).  Pub. L. 99–514, §\u202f1301(f)(2)(A) , substituted “section 143(k)(4)” for “section 103A( l )(6)”.\nSubsec. (b)(2)(A)(iii).  Pub. L. 99–514, §\u202f1301(f)(2)(B) , substituted “section 143(k)(5)” for “section 103A( l )(7)”.\nSubsec. (c)(2)(A).  Pub. L. 99–514, §\u202f1301(f)(2)(E) , substituted “section 143(a)(2)” for “section 103A(c)(2)” in provision following cl. (vii).\nPub. L. 99–514, §\u202f1862(b) , inserted “Under regulations, rules similar to the rules of subparagraphs (B) and (C) of section 103A(c)(2) shall apply to the requirements of this subparagraph.”\nSubsec. (c)(2)(A)(ii).  Pub. L. 99–514, §\u202f1301(f)(2)(C)(ii) , as amended by  Pub. L. 100–647, §\u202f1013(a)(25) , substituted “private activity bonds which it may otherwise issue during such calendar year under section 146” for “qualified mortgage bonds which it may otherwise issue during such calendar year under section 103A”.\nSubsec. (c)(2)(A)(iii).  Pub. L. 99–514, §\u202f1301(f)(2)(C)(i) , substituted “section 143” for “section 103A” in introductory provisions, added subcls. (I) to (VI), and struck out former subcls. (I) to (V) which read as follows:\n“(I) subsection (d) (relating to residence requirements),\n“(II) subsection (e) (relating to 3-year requirement),\n“(III) subsection (f) (relating to purchase price requirement),\n“(IV) subsection (h) (relating to portion of loans required to be placed in targeted areas), and\n“(V) subsection (j), other than paragraph (2) thereof (relating to other requirements),”.\nSubsec. (c)(2)(A)(iii)(V).  Pub. L. 99–514, §\u202f1862(a) , substituted “subsection (j), other than paragraph (2) thereof” for “paragraph (1) of subsection (j)”.\nSubsec. (c)(2)(B).  Pub. L. 99–514, §\u202f1301(f)(2)(C)(i) , substituted in heading and introductory provisions “section 143” for “section 103A”.\nPub. L. 99–514, §\u202f1301(f)(2)(F) , inserted in introductory provisions reference to subcl. (V), added cl. (iii) and closing provisions, and struck out former cl. (iii) and closing provisions which read as follows:\n“(iii) paragraph (1) of section 103A(e) shall be applied by substituting ‘100 percent’ for ‘90 percent or more’.\nClause (iii) shall not apply if the issuing authority submits a plan to the Secretary for administering the 90-percent requirement of section 103A(e)(1) and the Secretary is satisfied that such requirement will be met under such plan.”\nSubsec. (d)(2)(A).  Pub. L. 99–514, §\u202f1301(f)(1)(A) , substituted “25 percent” for “20 percent” in concluding provisions.\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1301(f)(2)(G) , struck out par. (3) “Additional limit in certain cases” which read as follows: “In the case of a qualified mortgage credit certificate program in a State which—\n“(A) has a State ceiling (as defined in section 103A(g)(4)) for the year an election is made that exceeds 20 percent of the average annual aggregate principal amount of mortgages executed during the immediately preceding 3 calendar years for single family owner-occupied residences located within the jurisdiction of such State, or\n“(B) issued qualified mortgage bonds in an aggregate amount less than $150,000,000 for calendar year 1983,\nthe certificate credit rate for any mortgage credit certificate shall not exceed 20 percent unless the issuing authority submits a plan to the Secretary to ensure that the weighted average of the certificate credit rates in such mortgage credit certificate program does not exceed 20 percent and the Secretary approves such plan.”\nSubsec. (e)(1)(B).  Pub. L. 99–514, §\u202f1862(c) , amended subpar. (B) generally. Prior to amendment, subpar. (B) “Limitations” read as follows: “The amount of the unused credit which may be taken into account under subparagraph (A) for any taxable year shall not exceed the amount by which the applicable tax limit for such taxable year exceeds the sum of the amounts which, by reason of this paragraph, are carried to such taxable year and are attributable to taxable years before the unused credit year.”\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f1301(f)(2)(H) , substituted “subsections (c)(1), (d), (e), (f), and (i) of section 143” for “subsection (d)(1), (e), (f), and (j) of section 103A”.\nSubsec. (e)(6).  Pub. L. 99–514, §\u202f1301(f)(2)(I) , substituted “section 144(a)(3)(A)” for “section 103(b)(6)(C)(i)”.\nSubsec. (e)(8)(A).  Pub. L. 99–514, §\u202f1301(f)(2)(J) , substituted “section 143(k)(5)(B)” for “section 103A( l )(7)(B)”.\nSubsec. (e)(8)(B).  Pub. L. 99–514, §\u202f1301(f)(2)(K) , substituted “section 143(k)(4)” for “section 103A( l )(6)”.\nSubsec. (e)(9).  Pub. L. 99–514, §\u202f1301(f)(2)(L) , substituted “section 143(a)(1)” for “section 103A(c)(1)”.\nSubsec. (e)(10).  Pub. L. 99–514, §\u202f1301(f)(2)(M) , substituted “section 143” for “section 103A”.\nSubsec. (f)(1).  Pub. L. 99–514, §\u202f1301(f)(2)(N) , substituted “subsection (d) of section 146” for “paragraph (4) of section 103A(g)”.\nSubsec. (f)(2)(A).  Pub. L. 99–514, §\u202f1301(f)(1)(B) , substituted “0.25” for “0.20”.\nSubsec. (f)(3).  Pub. L. 99–514, §\u202f1301(f)(2)(O) , substituted “section 146(d)(3)(C)” for “section 103A(g)(5)(C)”.\nSubsec. (f)(4).  Pub. L. 99–514, §\u202f1899A(1) , substituted “ensure” for “insure”.\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  section 1004(b)(2) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1004(d) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1142(b)(1)(B) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1144(b)(1)(B) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nAmendment by  section 402(i)(3)(C) of Pub. L. 109–135  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , in the same manner as the provisions of such Act to which such amendment relates, see  section 402(i)(3)(H) of Pub. L. 109–135 , set out as a note under  section 23 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nThe Internal Revenue Code of 1986 to be applied and administered as if the amendments made by section 1335(b)(1)–(3) of  Pub. L. 109–58  had never been enacted, see  section 402(i)(4) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which they relate, except that amendment by  section 402(i)(3)(C) of Pub. L. 109–135  is applicable to taxable years beginning after  Dec. 31, 2005 , see  section 402(m) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1335(c) of Pub. L. 109–58 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 107–16  inapplicable to taxable years beginning during 2004 or 2005, see  section 312(b)(2) of Pub. L. 108–311 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 107–16  inapplicable to taxable years beginning during 2002 and 2003, see  section 601(b)(2) of Pub. L. 107–147 , set out as a note under  section 23 of this title .\nAmendment by  section 201(b)(2)(F) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 201(e)(2) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nAmendment by  section 618(b)(2)(B) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 618(d) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as an Effective Date note under  section 23 of this title .\nPub. L. 103–66, title XIII, §\u202f13141(f)(2) ,  Aug. 10, 1993 ,  107 Stat. 437 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to elections for periods after  June 30, 1992 .”\nPub. L. 102–227, title I, §\u202f108(c)(2) ,  Dec. 11, 1991 ,  105 Stat. 1688 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to elections for periods after  December 31, 1991 .”\nAmendment by  Pub. L. 101–508  applicable to elections for periods after  Sept. 30, 1990 , see  section 11408(d)(2) of Pub. L. 101–508 , set out as a note under  section 143 of this title .\nAmendment by section 1013(a)(25), (26) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 4005(a)(2) of Pub. L. 100–647  applicable to bonds issued, and nonissued bond amounts elected, after  Dec. 31, 1988 , see  section 4005(h)(1) of Pub. L. 100–647 , set out as a note under  section 143 of this title .\nAmendment by  section 4005(g)(7) of Pub. L. 100–647  applicable to financing provided, and mortgage credit certificates issued, after  Dec. 31, 1990 , with certain exceptions, see  section 4005(h)(3) of Pub. L. 100–647 , set out as a note under  section 143 of this title .\nAmendment by  section 1301(f)(1) of Pub. L. 99–514  applicable to nonissued bond amounts elected after  Aug. 15, 1986 , and amendment by  section 1301(f)(2) of Pub. L. 99–514  applicable to certificates issued with respect to nonissued bond amounts elected after  Aug. 15, 1986 , see  section 1311(b) of Pub. L. 99–514 , as amended, set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by section 1862(a)–(d)(1) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title VI, §\u202f612(g) ,  July 18, 1984 ,  98 Stat. 913 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and  section 6708 of this title , redesignating former section 25 as 26, and amending sections 23, 28 to 30, 38, 55, 103A, 163, 168, and 901 of this title] shall apply to interest paid or accrued after  December 31, 1984 , on indebtedness incurred after  December 31, 1984 . \n \n “(2)   Elections .— The amendments made by this section shall apply to elections under section 25(c)(2)(A)(ii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section) for calendar years after 1983.”\nAmendment by  Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'An election to have this section apply with respect to any eligible student for purposes of the American Opportunity Tax Credit under subsection (a)(1) may not be made for any taxable year if such an election (by the taxpayer or any other individual) is in effect with respect to such student for any 4 prior taxable years.\nThe American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an individual unless such individual is an eligible student for at least one academic period which begins during such year.\nThe American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an eligible student if the student has completed (before the beginning of such taxable year) the first 4 years of postsecondary education at an eligible educational institution.\nThe American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for qualified tuition and related expenses for the enrollment or attendance of a student for any academic period if such student has been convicted of a Federal or State felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within which such period ends.\nNo American Opportunity Tax Credit shall be allowed under this section for any taxable year in the disallowance period.\nIn the case of a taxpayer who is denied the American Opportunity Tax Credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no American Opportunity Tax Credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit.\nThe Lifetime Learning Credit for any taxpayer for any taxable year is an amount equal to 20 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished during any academic period beginning in such taxable year) as does not exceed $10,000.\nThe qualified tuition and related expenses with respect to an individual who is an eligible student for whom a\u202f 1 1 \u202fSo in original. Probably should be “an”.  American Opportunity Tax Credit under subsection (a)(1) is allowed for the taxable year shall not be taken into account under this subsection.\nFor purposes of paragraph (1), qualified tuition and related expenses shall include expenses described in subsection (f)(1) with respect to any course of instruction at an eligible educational institution to acquire or improve job skills of the individual.\nFor purposes of this subsection, the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.\nA taxpayer may elect not to have this section apply with respect to the qualified tuition and related expenses of an individual for any taxable year.\nSuch term does not include expenses with respect to any course or other education involving sports, games, or hobbies, unless such course or other education is part of the individual’s degree program.\nSuch term does not include student activity fees, athletic fees, insurance expenses, or other expenses unrelated to an individual’s academic course of instruction.\nFor purposes of determining the American Opportunity Tax Credit, subparagraph (A) shall be applied by substituting “tuition, fees, and course materials” for “tuition and fees”.\nNo credit shall be allowed under subsection (a) to a taxpayer with respect to the qualified tuition and related expenses of an individual unless the taxpayer includes the name and taxpayer identification number of such individual on the return of tax for the taxable year.\nThe requirements of subparagraph (A) shall not be treated as met with respect to the American Opportunity Tax Credit unless the individual’s taxpayer identification number was issued on or before the due date for filing the return of tax for the taxable year.\nNo American Opportunity Tax Credit shall be allowed under this section if the taxpayer identification number of the taxpayer was issued after the due date for filing the return for the taxable year.\nNo American Opportunity Tax Credit shall be allowed under this section unless the taxpayer includes the employer identification number of any institution to which qualified tuition and related expenses were paid with respect to the individual.\nIf qualified tuition and related expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first 3 months following such taxable year, such academic period shall be treated for purposes of this section as beginning during such taxable year.\nNo credit shall be allowed under this section for any expense for which a deduction is allowed under any other provision of this chapter.\nIf the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.\nIf the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013.\nExcept as otherwise provided by the Secretary, no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section 6050S(d) which contains all of the information required by paragraph (2) thereof.\nForty percent of so much of the credit allowed under subsection (a) as is attributable to the American Opportunity Tax Credit (determined after application of subsection (d) and without regard to this paragraph\u202f 2 2 \u202fSo in original. Probably should be “this subsection”.  and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)). The preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection (g) of section 1 applies for such taxable year.\nThe Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of this section, referred to in subsecs. (b)(3)(A) and (f)(2)(A), is the date of enactment of  Pub. L. 105–34  which was approved  Aug. 5, 1997 .\nThe Higher Education Act of 1965, referred to in subsec. (f)(2)(B), is  Pub. L. 89–329 ,  Nov. 8, 1965 ,  79 Stat. 1219 . Title IV of the Act is classified generally to subchapter IV (§\u202f1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 20  and Tables.\n2020—Subsec. (d).  Pub. L. 116–260, §\u202f104(a)(1) , added par. (1), redesignated par. (3) as (2), and struck out former pars. (1) and (2) which provided income limitations for the American Opportunity Tax Credit and Lifetime Learning Credit, respectively.\nSubsec. (h).  Pub. L. 116–260, §\u202f104(a)(2) , struck out subsec. (h) which related to inflation adjustments for the Lifetime Learning Credit for taxable years beginning after 2001.\n2018— Pub. L. 115–141, §\u202f101 ( l )(14), substituted “American Opportunity Tax Credit” for “Hope Scholarship Credit” wherever appearing in text.\nPub. L. 115–141, §\u202f101 ( l )(9), substituted “American Opportunity” for “Hope” in section catchline.\nSubsec. (b).  Pub. L. 115–141, §\u202f101 ( l )(11), substituted “American Opportunity Tax Credit” for “Hope Scholarship Credit” in heading.\nSubsec. (b)(1)(A).  Pub. L. 115–141, §\u202f101 ( l )(1)(A), substituted “$2,000” for “$1,000”.\nSubsec. (b)(1)(B).  Pub. L. 115–141, §\u202f101 ( l )(1)(B), substituted “25 percent” for “50 percent”, “$2,000” for “$1,000”, and “$4,000” for “the applicable limit”.\nSubsec. (b)(2).  Pub. L. 115–141, §\u202f101 ( l )(12), substituted “American Opportunity Tax Credit” for “Hope Scholarship Credit” in heading.\nSubsec. (b)(2)(A), (C).  Pub. L. 115–141, §\u202f101 ( l )(2), substituted “4” for “2” in heading and text.\nSubsec. (b)(4).  Pub. L. 115–141, §\u202f101 ( l )(3), amended par. (4) generally. Prior to amendment, text read as follows: “For purposes of paragraph (1)(B), the applicable limit for any taxable year is an amount equal to 2 times the dollar amount in effect under paragraph (1)(A) for such taxable year.”\nSubsec. (c)(1).  Pub. L. 115–141, §\u202f401(b)(1) , struck out “($5,000 in the case of taxable years beginning before  January 1, 2003 )” after “$10,000”.\nSubsec. (c)(2)(A).  Pub. L. 115–141, §\u202f101 ( l )(13), substituted “American Opportunity Tax Credit” for “Hope Scholarship” in heading.\nSubsec. (d).  Pub. L. 115–141, §\u202f101 ( l )(4), amended subsec. (d) generally. Prior to amendment, subsec. (d) related to limitation based on modified adjusted gross income.\nSubsec. (f)(1)(D).  Pub. L. 115–141, §\u202f101 ( l )(5), added subpar. (D).\nSubsec. (g)(1).  Pub. L. 115–141, §\u202f101 ( l )(6), designated existing provisions as subpar. (A), inserted heading, and added subpar. (B).\nSubsec. (h).  Pub. L. 115–141, §\u202f101 ( l )(7), amended subsec. (h) generally. Prior to amendment, subsec. (h) related to inflation adjustments.\nSubsec. (i).  Pub. L. 115–141, §\u202f101 ( l )(8), amended subsec. (i) generally. Prior to amendment, subsec. (i) related to the American Opportunity Tax Credit in any taxable year beginning after 2008.\n2017—Subsec. (h)(1)(A)(ii), (2)(A)(ii).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2015—Subsec. (g)(3)(C).  Pub. L. 114–27, §\u202f804(a)(2) , added subpar. (C).\nSubsec. (g)(8).  Pub. L. 114–27, §\u202f804(a)(1) , added par. (8).\nSubsec. (i).  Pub. L. 114–113, §\u202f102(a) , struck out “and before 2018” after “2008” in introductory provisions.\nSubsec. (i)(6).  Pub. L. 114–113, §\u202f206(a)(2) , added par. (6).\nPub. L. 114–113, §\u202f206(a)(1) , struck out par. (6). Text read as follows: “In the case of a taxpayer with respect to whom section 702(a)(1)(B) of the Heartland Disaster Tax Relief Act of 2008 applies for any taxable year, such taxpayer may elect to waive the application of this subsection to such taxpayer for such taxable year.”\nSubsec. (i)(6)(C).  Pub. L. 114–113, §\u202f211(a) , added subpar. (C).\nSubsec. (i)(7).  Pub. L. 114–113, §\u202f208(a)(2) , added par. (7).\n2014—Subsec. (i)(3).  Pub. L. 113–295  substituted “For purposes of determining the Hope Scholarship Credit, subsection (f)(1)(A) shall be applied” for “Subsection (f)(1)(A) shall be applied”.\n2013—Subsec. (i).  Pub. L. 112–240, §\u202f103(a)(1) , substituted “after 2008 and before 2018” for “in 2009, 2010, 2011, or 2012” in introductory provisions.\nSubsec. (i)(5) to (7).  Pub. L. 112–240, §\u202f104(c)(2)(D) , redesignated pars. (6) and (7) as (5) and (6), respectively, substituted “section 26(a)” for “section 26(a)(2) or paragraph (5), as the case may be” in par. (5), and struck out former par. (5) which related to credit allowed against alternative minimum tax.\n2010—Subsec. (i).  Pub. L. 111–312, §\u202f103(a)(1) , substituted “,\u20002010, 2011, or 2012” for “or 2010” in introductory provisions.\nSubsec. (i)(5)(B).  Pub. L. 111–148, §\u202f10909(b)(2)(C) , (c), as amended by  Pub. L. 111–312, §\u202f101(b)(1) , temporarily substituted “25D” for “23, 25D,”. See Effective and Termination Dates of 2010 Amendment note below.\n2009—Subsecs. (i), (j).  Pub. L. 111–5  added subsec. (i) and redesignated former subsec. (i) as (j).\n2001—Subsec. (e).  Pub. L. 107–16, §\u202f401(g)(2)(A) , amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows:\n“(1)  In general .—No credit shall be allowed under subsection (a) for a taxable year with respect to the qualified tuition and related expenses of an individual unless the taxpayer elects to have this section apply with respect to such individual for such year.\n“(2)  Coordination with exclusions .—An election under this subsection shall not take effect with respect to an individual for any taxable year if any portion of any distribution during such taxable year from an education individual retirement account is excluded from gross income under section 530(d)(2).”\nPub. L. 116–260, div. EE, title I, §\u202f104(c) ,  Dec. 27, 2020 ,  134 Stat. 3041 , provided that:  “The amendments made by this section [amending this section and sections 62, 74, 86, 135, 137, 219, 221, and 469 of this title and repealing  section 222 of this title ] shall apply to taxable years beginning after  December 31, 2020 .”\nAmendment by section 101( l )(1) to (9), (11) to (14) of  Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f102(c) ,  Dec. 18, 2015 ,  129 Stat. 3044 , provided that:  “The amendments made by this section [amending this section and provisions set out as a note below] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title II, §\u202f206(b) ,  Dec. 18, 2015 ,  129 Stat. 3082 , as amended by  Pub. L. 115–141, div. U, title I, §\u202f101(j) ,  Mar. 23, 2018 ,  132 Stat. 1162 , provided that: \n “(1)   In general .— The amendment made by subsection (a)(2) [amending this section] shall apply to any return of tax, and any amendment or supplement to any return of tax, which is filed after the date of the enactment of this Act [ Dec. 18, 2015 ]. \n \n “(2)   Repeal of deadwood .— The amendment made by subsection (a)(1) [amending this section] shall take effect on the date of the enactment of this Act.”\nAmendment by  section 208(a)(2) of Pub. L. 114–113  applicable to taxable years beginning after  Dec. 31, 2015 , see  section 208(c) of Pub. L. 114–113 , set out as a note under  section 24 of this title .\nPub. L. 114–113, div. Q, title II, §\u202f211(c)(1) ,  Dec. 18, 2015 ,  129 Stat. 3085 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–27, title VIII, §\u202f804(d) ,  June 29, 2015 ,  129 Stat. 416 , provided that:  “The amendments made by this section [amending this section and sections 222 and 6050S of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ June 29, 2015 ].”\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by  section 103(a)(1) of Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 103(e)(1) of Pub. L. 112–240 , set out as a note under  section 24 of this title .\nAmendment by  section 104(c)(2)(D) of Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nAmendment by  section 103(a)(1) of Pub. L. 111–312  applicable to taxable years beginning after  Dec. 31, 2010 , see  section 103(d) of Pub. L. 111–312 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1004(d) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 107–16, title IV, §\u202f401(h) ,  June 7, 2001 ,  115 Stat. 60 , provided that:  “The amendments made by this section [amending this section and sections 135, 530, and 4973 of this title] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 105–34, title II, §\u202f201(f) ,  Aug. 5, 1997 ,  111 Stat. 806 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and  section 6050S of this title  and amending sections 135, 6213, and 6724 of this title] shall apply to expenses paid after  December 31, 1997  (in taxable years ending after such date), for education furnished in academic periods beginning after such date. \n \n “(2)   Lifetime learning credit .— Section 25A(a)(2) of the Internal Revenue Code of 1986 shall apply to expenses paid after  June 30, 1998  (in taxable years ending after such date), for education furnished in academic periods beginning after such dates.”\nFor provisions that nothing in amendment by  section 401(b)(1) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1004(c) ,  Feb. 17, 2009 ,  123 Stat. 314 , as amended by  Pub. L. 111–312, title I, §\u202f103(a)(2) ,  Dec. 17, 2010 ,  124 Stat. 3299 ;  Pub. L. 112–240, title I, §\u202f103(a)(2) ,  Jan. 2, 2013 ,  126 Stat. 2319 ;  Pub. L. 114–113, div. Q, title I, §\u202f102(b) ,  Dec. 18, 2015 ,  129 Stat. 3044 , provided that: \n “(1)   Payments to possessions.— “(A)   Mirror code possession .— The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of section 25A(i)(6) [now 25A(i)] of the Internal Revenue Code of 1986 (as added by this section) with respect to taxable years beginning after 2008. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. \n \n “(B)   Other possessions .— The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of section 25A(i)(6) [now 25A(i)] of such Code (as so added) for taxable years beginning after 2008 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession. \n \n \n “(2)   Coordination with credit allowed against united states income taxes .— Section 25A(i)(6) [now 25A(i)] of such Code (as added by this section) shall not apply to a bona fide resident of any possession of the United States. \n \n “(3)   Definitions and special rules.— “(A)   Possession of the united states .— For purposes of this subsection, the term ‘possession of the United States’ includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands. \n \n “(B)   Mirror code tax system .— For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(C)   Treatment of payments .— For purposes of  section 1324(b)(2) of title 31 , United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 25A of the Internal Revenue Code of 1986 by reason of subsection (i)(6) [now (i)(5)] of such section (as added by this section).”\n[Amendments by  Pub. L. 112–240, §\u202f103(a)(2) , and  Pub. L. 114–113, §\u202f102(b) , were executed as the probable intent of Congress to section 1004(c)(1) of the American Recovery and Reinvestment Tax Act of 2009, set out above, which act is title I of div. B of  Pub. L. 111–5 , notwithstanding directory language amending section 1004(c)(1) of division B of the American Recovery and Reinvestment Tax Act of 2009.]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the applicable percentage of so much of the qualified retirement savings contributions of the eligible individual for the taxable year as do not exceed $2,000.\nThe term “eligible individual” means any individual if such individual has attained the age of 18 as of the close of the taxable year.\nThe qualified retirement savings contributions determined under paragraph (1) shall be reduced (but not below zero) by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph (1) may be made. The preceding sentence shall not apply to the portion of any distribution which is not includible in gross income by reason of a trustee-to-trustee transfer or a rollover distribution.\nFor purposes of determining distributions received by an individual under subparagraph (A) for any taxable year, any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution.\nFor purposes of this section, adjusted gross income shall be determined without regard to sections 911, 931, and 933.\nNotwithstanding any other provision of law, a qualified retirement savings contribution shall not fail to be included in determining the investment in the contract for purposes of section 72 by reason of the credit under this section.\nPub. L. 117–328, div. T, title I, §\u202f103(e)(1) , (f),  Dec. 29, 2022 ,  136 Stat. 5286 , provided that, applicable to taxable years beginning after  Dec. 31, 2026 , subsection (d)(1) of this section is amended by striking “the sum of—” and all that follows through “the amount of contributions made before  January 1, 2026 ” and inserting “the amount of contributions made before  January 1, 2026 ”. See 2022 Amendment note below.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title  and Revenue Notices listed in a table under  section 401 of this title .\n2022—Subsec. (d)(1).  Pub. L. 117–328  substituted “the amount of contributions made before  January 1, 2026 ” for “the sum of—\n“(A) the amount of the qualified retirement contributions (as defined in section 219(e)) made by the eligible individual,\n“(B) the amount of—\n“(i) any elective deferrals (as defined in section 402(g)(3)) of such individual, and\n“(ii) any elective deferral of compensation by such individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A),\n“(C) the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974(c)), and\n“(D) the amount of contributions made before  January 1, 2026 ”.\n2017—Subsec. (b)(3)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(C) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (d)(1)(D).  Pub. L. 115–97, §\u202f11024(b) , added subpar. (D).\n2013—Subsec. (g).  Pub. L. 112–240  struck out subsec. (g). Text read as follows: “In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for the taxable year shall not exceed the excess of—\n“(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over\n“(2) the sum of the credits allowable under this subpart (other than this section and sections 23, 25A(i), 25D, 30, 30B, and 30D) and section 27 for the taxable year.”\n2010—Subsec. (g)(2).  Pub. L. 111–148, §\u202f10909(b)(2)(D) , (c), as amended by  Pub. L. 111–312 , temporarily struck out “23,” before “25A(i),”. See Effective and Termination Dates of 2010 Amendment note below.\n2009—Subsec. (g)(2).  Pub. L. 111–5, §\u202f1144(b)(1)(C) , inserted “30B,” after “30,”.\nPub. L. 111–5, §\u202f1142(b)(1)(C) , inserted “30,” after “25D,”.\nPub. L. 111–5, §\u202f1004(b)(4) , inserted “25A(i),” after “23,”.\n2008—Subsec. (g)(2).  Pub. L. 110–343, §\u202f205(d)(1)(C) , substituted “,\u200025D, and 30D” for “and 25D”.\nPub. L. 110–343, §\u202f106(e)(2)(C) , substituted “sections 23 and 25D” for “section 23”.\n2006—Subsec. (b).  Pub. L. 109–280, §\u202f833(a) , reenacted heading without change and amended text of subsec. (b) generally, substituting provisions consisting of introductory provisions and pars. (1) to (3) for former provisions consisting of introductory provisions and a table of applicable percentages for amounts of adjusted gross income for a joint return, a head of household, and all other cases.\nSubsec. (h).  Pub. L. 109–280, §\u202f812 , struck out heading and text of subsec. (h). Text read as follows: “This section shall not apply to taxable years beginning after  December 31, 2006 .”\n2005—Subsec. (g).  Pub. L. 109–135  substituted “In the case of a taxable year to which section 26(a)(2) does not apply, the credit” for “The credit” in introductory provisions.\n2004—Subsec. (c)(2)(B).  Pub. L. 108–311  substituted “152(f)(2)” for “151(c)(4)”.\n2002—Subsec. (d)(2)(A).  Pub. L. 107–147, §\u202f411(m) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The qualified retirement savings contributions determined under paragraph (1) shall be reduced (but not below zero) by the sum of—\n“(i) any distribution from a qualified retirement plan (as defined in section 4974(c)), or from an eligible deferred compensation plan (as defined in section 457(b)), received by the individual during the testing period which is includible in gross income, and\n“(ii) any distribution from a Roth IRA or a Roth account received by the individual during the testing period which is not a qualified rollover contribution (as defined in section 408A(e)) to a Roth IRA or a rollover under section 402(c)(8)(B) to a Roth account.”\nSubsecs. (g), (h).  Pub. L. 107–147, §\u202f417(1) , redesignated subsec. (g), relating to termination, as (h).\n2001—Subsec. (g).  Pub. L. 107–16, §\u202f618(b)(1) , added subsec. (g) relating to limitation based on amount of tax.\nAmendment by  Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2026 , see  section 103(f) of Pub. L. 117–328 , set out as an Effective Date note under  section 6433 of this title .\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  section 11002(d)(1)(C) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f11024(c) ,  Dec. 22, 2017 ,  131 Stat. 2076 , provided that:  “The amendments made by this section [amending this section and  section 529A of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nAmendment by  section 1004(b)(4) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1004(d) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1142(b)(1)(C) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1144(b)(1)(C) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 106(e)(2)(C) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2007 , see  section 106(f)(1) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 23 of this title .\nAmendment by  section 205(d)(1)(C) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nPub. L. 109–280, title VIII, §\u202f833(d) ,  Aug. 17, 2006 ,  120 Stat. 1004 , provided that:  “The amendments made by this section [amending this section and sections 219 and 408A of this title] shall apply to taxable years beginning after 2006.”\nAmendment by  Pub. L. 109–135  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , in the same manner as the provisions of such Act to which such amendment relates, see  section 402(i)(3)(H) of Pub. L. 109–135 , set out as a note under  section 23 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates and applicable to taxable years beginning after  Dec. 31, 2005 , see  section 402(m) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 107–147, title IV, §\u202f411(x) ,  Mar. 9, 2002 ,  116 Stat. 53 , provided that:  “Except as provided in subsection (c) [amending sections 23 and 137 of this title and enacting provisions set out as a note under  section 23 of this title ], the amendments made by this section [amending this section, sections 23, 24, 38, 45E, 45F, 63, 137, 401 to 404, 408, 409, 412, 414 to 417, 457, 530, 2016, 2101, 2511, 4980F, and 6428 of this title, sections 1003, 1054, 1055, 1082, and 1104 of Title 29, Labor, and provisions set out as notes under sections 38, 415, and 4980F of this title] shall take effect as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 ] to which they relate.”\nAmendment by  section 618(b)(1) of Pub. L. 107–16  inapplicable to taxable years beginning during 2004 or 2005, see  section 312(b)(2) of Pub. L. 108–311 , set out as an Effective Date of 2001 Amendment note under  section 23 of this title .\nAmendment by  section 618(b)(1) of Pub. L. 107–16  inapplicable to taxable years beginning during 2002 and 2003, see  section 601(b)(2) of Pub. L. 107–147 , set out as an Effective Date of 2001 Amendment note under  section 23 of this title .\nAmendment by  section 618(b)(1) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 618(d) of Pub. L. 107–16 , set out as an Effective Date of 2001 Amendment note under  section 24 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The credit allowed under this section with respect to any taxpayer for any taxable year shall not exceed $1,200.\nThe credit allowed under this section by reason of subsection (a)(2) with respect to any taxpayer for any taxable year shall not exceed, with respect to any item of qualified energy property, $600.\nThe credit allowed under this section by reason of subsection (a)(1) with respect to any taxpayer for any taxable year shall not exceed, in the aggregate with respect to all exterior windows and skylights, $600.\nNotwithstanding paragraphs (1) and (2), the credit allowed under this section by reason of subsection (a)(2) with respect to any taxpayer for any taxable year shall not, in the aggregate, exceed $2,000 with respect to amounts paid or incurred for property described in clauses (i) and (ii) of subsection (d)(2)(A) and in subsection (d)(2)(B).\nThe amount of the credit allowed under this section by reason of subsection (a)(3) shall not exceed $150.\nNo credit shall be allowed under this section by reason of subsection (a)(3) unless the taxpayer includes with the taxpayer’s return of tax such information or documentation as the Secretary may require.\nThe term “dwelling unit” includes a manufactured home which conforms to Federal Manufactured Home Construction and Safety Standards (part 3280 of title 24, Code of Federal Regulations).\nRules similar to the rules under paragraphs (4), (5), (6), (7), and (8) of section 25D(e) shall apply.\nAny expenditure otherwise qualifying as an expenditure under this section shall not be treated as failing to so qualify merely because such expenditure was made with respect to two or more dwelling units.\nIn the case of any expenditure described in subparagraph (A), the amount of the credit allowable under subsection (a) shall (subject to paragraph (1)) be computed separately with respect to the amount of the expenditure made for each dwelling unit.\nFor purposes of determining the amount of expenditures made by any individual with respect to any property, there shall not be taken into account expenditures which are made from subsidized energy financing (as defined in section 48(a)(4)(C)).\nFor purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.\nPub. L. 117–169, title I, §\u202f13704(b)(1) , (c),  Aug. 16, 2022 ,  136 Stat. 2002 , 2003, provided that, applicable to transportation fuel produced after  Dec. 31, 2024 , subsection (d)(3) of this section is amended by striking “and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “,\u2000and”, and by adding at the end the following new subparagraph:\n(C) transportation fuel (as defined in section 45Z(d)(5)).\nSee 2022 Amendment note below.\nPub. L. 117–169, title I, §\u202f13301(g)(1) , (i)(3),  Aug. 16, 2022 ,  136 Stat. 1941 , 1946, provided that, applicable to property placed in service after  Dec. 31, 2024 , this section is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:\n(h) Product identification number requirement\n(1) In general\nNo credit shall be allowed under subsection (a) with respect to any item of specified property placed in service after  December 31, 2024 , unless—\n(A) such item is produced by a qualified manufacturer, and\n(B) the taxpayer includes the qualified product identification number of such item on the return of tax for the taxable year.\n(2) Qualified product identification number\nFor purposes of this section, the term “qualified product identification number” means, with respect to any item of specified property, the product identification number assigned to such item by the qualified manufacturer pursuant to the methodology referred to in paragraph (3).\n(3) Qualified manufacturer\nFor purposes of this section, the term “qualified manufacturer” means any manufacturer of specified property which enters into an agreement with the Secretary which provides that such manufacturer will—\n(A) assign a product identification number to each item of specified property produced by such manufacturer utilizing a methodology that will ensure that such number (including any alphanumeric) is unique to each such item (by utilizing numbers or letters which are unique to such manufacturer or by such other method as the Secretary may provide),\n(B) label such item with such number in such manner as the Secretary may provide, and\n(C) make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) of the product identification numbers so assigned and including such information as the Secretary may require with respect to the item of specified property to which such number was so assigned.\n(4) Specified property\nFor purposes of this subsection, the term “specified property” means any qualified energy property and any property described in subparagraph (B) or (C) of subsection (c)(3).\nSee 2022 Amendment notes below.\nThe date of the enactment of this subsection, referred to in subsec. (e)(2), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\n2022— Pub. L. 117–169, §\u202f13301(h)(1) , substituted “Energy efficient home improvement credit” for “Nonbusiness energy property” in section catchline.\nSubsec. (a).  Pub. L. 117–169, §\u202f13301(b) , amended subsec. (a) generally. Prior to amendment, text read as follows: “In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of—\n“(1) 10 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year, and\n“(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.”\nSubsec. (a)(3).  Pub. L. 117–169, §\u202f13301(f)(1) , added par. (3).\nSubsec. (b).  Pub. L. 117–169, §\u202f13301(c) , amended subsec. (b) generally. Prior to amendment, text read as follows:\n“(1)  Lifetime limitation .—The credit allowed under this section with respect to any taxpayer for any taxable year shall not exceed the excess (if any) of $500 over the aggregate credits allowed under this section with respect to such taxpayer for all prior taxable years ending after  December 31, 2005 .\n“(2)  Windows .—In the case of amounts paid or incurred for components described in subsection (c)(3)(B) by any taxpayer for any taxable year, the credit allowed under this section with respect to such amounts for such year shall not exceed the excess (if any) of $200 over the aggregate credits allowed under this section with respect to such amounts for all prior taxable years ending after  December 31, 2005 .\n“(3)  Limitation on residential energy property expenditures .—The amount of the credit allowed under this section by reason of subsection (a)(2) shall not exceed—\n“(A) $50 for any advanced main air circulating fan,\n“(B) $150 for any qualified natural gas, propane, or oil furnace or hot water boiler, and\n“(C) $300 for any item of energy-efficient building property.”\nSubsec. (b)(6).  Pub. L. 117–169, §\u202f13301(f)(2) , added par. (6).\nSubsec. (c)(2).  Pub. L. 117–169, §\u202f13301(d)(1) , substituted “meets—” and subpars. (A) to (C) for “meets—” and former subpars. (A) to (C) which read as follows:\n“(A) applicable Energy Star program requirements, in the case of a roof or roof products,\n“(B) version 6.0 Energy Star program requirements, in the case of an exterior window, a skylight, or an exterior door, and\n“(C) the prescriptive criteria for such component established by the 2009 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009, in the case of any other component.”\nSubsec. (c)(3)(A).  Pub. L. 117–169, §\u202f13301(d)(3) , inserted “,\u2000including air sealing material or system,” after “material or system”.\nSubsec. (c)(3)(D).  Pub. L. 117–169, §\u202f13301(d)(2) , struck out subpar. (D) which read as follows: “any metal roof or asphalt roof installed on a dwelling unit, but only if such roof has appropriate pigmented coatings or cooling granules which are specifically and primarily designed to reduce the heat gain of such dwelling unit.”\nSubsec. (d).  Pub. L. 117–169, §\u202f13301(e) , amended subsec. (d) generally. Prior to amendment, subsec. (d) related to residential energy property expenditures and defined the terms “residential energy property expenditures”, “qualified energy property” and applicable standards, “energy-efficient building property”, “qualified natural gas, propane, or oil furnace or hot water boiler”, and “advanced main air circulating fan”.\nSubsec. (d)(3)(C).  Pub. L. 117–169, §\u202f13704(b)(1) , added subpar. (C).\nSubsecs. (e) to (g).  Pub. L. 117–169, §\u202f13301(f)(3)(A) , added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively. Former subsec. (g) redesignated (h).\nSubsec. (g)(2).  Pub. L. 117–169, §\u202f13301(a) , substituted “ December 31, 2032 ” for “ December 31, 2021 ”.\nSubsec. (h).  Pub. L. 117–169, §\u202f13301(g)(1) , added subsec. (h). Former subsec. (h) redesignated (i).\nPub. L. 117–169, §\u202f13301(f)(3)(A) , redesignated subsec. (g) as (h).\nSubsec. (i).  Pub. L. 117–169, §\u202f13301(g)(1) , redesignated subsec. (h) as (i).\n2020—Subsec. (d)(3)(E).  Pub. L. 116–260, §\u202f148(b)(3)(A) , struck out subpar. (E) which read as follows: “a stove which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and which has a thermal efficiency rating of at least 75 percent.”\nSubsec. (d)(6).  Pub. L. 116–260, §\u202f148(b)(3)(B) , struck out par. (6). Text read as follows: “The term ‘biomass fuel’ means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.”\nSubsec. (g)(2).  Pub. L. 116–260, §\u202f141(a) , substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (d)(3)(A).  Pub. L. 116–94, §\u202f123(b)(1) , substituted “a Uniform Energy Factor of at least 2.2” for “an energy factor of at least 2.0”.\nSubsec. (d)(3)(D).  Pub. L. 116–94, §\u202f123(b)(2) , substituted “a Uniform Energy Factor” for “an energy factor”.\nSubsec. (g)(2).  Pub. L. 116–94, §\u202f123(a) , substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (b)(2).  Pub. L. 115–141, §\u202f401(a)(4) , substituted “subsection (c)(3)(B)” for “subsection (c)(2)(B)”.\nSubsec. (d)(3)(B).  Pub. L. 115–141, §\u202f401(a)(5)(A) , substituted comma for period at end.\nSubsec. (d)(3)(D).  Pub. L. 115–141, §\u202f401(a)(5)(B) , substituted “,\u2000and” for period at end.\nSubsec. (g)(2).  Pub. L. 115–141, §\u202f401(a)(6) , substituted “2017.” for “2017..”\nPub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (c)(1).  Pub. L. 114–113, §\u202f181(b)(1) , struck out “which meets the prescriptive criteria for such component established by the 2009 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009 (or, in the case of an exterior window, a skylight, an exterior door, a metal roof with appropriate pigmented coatings, or an asphalt roof with appropriate cooling granules, which meet the Energy Star program requirements)” after “envelope component” in introductory provisions.\nSubsec. (c)(2) to (4).  Pub. L. 114–113, §\u202f181(b)(2) , added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.\nSubsec. (g)(2).  Pub. L. 114–113, §\u202f181(a) , substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (g)(2).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (g)(2).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsecs. (a), (b).  Pub. L. 111–312, §\u202f710(b)(1) , amended subsecs. (a) and (b) generally. Prior to amendment, subsecs. (a) and (b) read as follows:\n“(a)  Allowance of credit .—In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 30 percent of the sum of—\n“(1) the amount paid or incurred by the taxpayer during such taxable year for qualified energy efficiency improvements, and\n“(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.\n“(b)  Limitation .—The aggregate amount of the credits allowed under this section for taxable years beginning in 2009 and 2010 with respect to any taxpayer shall not exceed $1,500.”\nSubsec. (c)(1).  Pub. L. 111–312, §\u202f710(b)(2)(D)(ii) , inserted “an exterior window, a skylight, an exterior door,” after “in the case of” in introductory provisions.\nPub. L. 111–312, §\u202f710(b)(2)(A) , in introductory provisions, substituted “2009 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009” for “2000 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of this section”.\nSubsec. (c)(2)(A).  Pub. L. 111–312, §\u202f710(b)(2)(E) , struck out “and meets the prescriptive criteria for such material or system established by the 2009 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009” after “on such dwelling unit”.\nSubsec. (c)(4).  Pub. L. 111–312, §\u202f710(b)(2)(D)(i) , struck out par. (4). Text read as follows: “Such term shall not include any component described in subparagraph (B) or (C) of paragraph (2) unless such component is equal to or below a U factor of 0.30 and SHGC of 0.30.”\nSubsec. (d)(2)(A)(ii).  Pub. L. 111–312, §\u202f710(b)(2)(C)(ii) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “any qualified natural gas furnace, qualified propane furnace, qualified oil furnace, qualified natural gas hot water boiler, qualified propane hot water boiler, or qualified oil hot water boiler, or”.\nSubsec. (d)(3)(E).  Pub. L. 111–312, §\u202f710(b)(2)(B) , struck out “,\u2000as measured using a lower heating value” after “75 percent”.\nSubsec. (d)(4).  Pub. L. 111–312, §\u202f710(b)(2)(C)(i) , amended par. (4) generally. Prior to amendment, par. (4) defined the terms “qualified natural gas furnace”, “qualified natural gas hot water boiler”, “qualified propane furnace”, “qualified propane hot water boiler”, “qualified oil furnace”, and “qualified oil hot water boiler”.\nSubsec. (e)(3).  Pub. L. 111–312, §\u202f710(b)(3) , added par. (3).\nSubsec. (g)(2).  Pub. L. 111–312, §\u202f710(a) , substituted “2011” for “2010”.\n2009—Subsecs. (a), (b).  Pub. L. 111–5, §\u202f1121(a) , added subsecs. (a) and (b) and struck out former subsecs. (a) and (b) which related to credit equal to the sum of 10 percent of the amount paid for qualified energy efficiency improvements and the amount of energy property expenditures and provided limits on credits and expenditures.\nSubsec. (c)(2)(A).  Pub. L. 111–5, §\u202f1121(d)(2) , inserted “and meets the prescriptive criteria for such material or system established by the 2009 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009” after “such dwelling unit”.\nSubsec. (c)(4).  Pub. L. 111–5, §\u202f1121(d)(1) , added par. (4).\nSubsec. (d)(2)(A)(ii).  Pub. L. 111–5, §\u202f1121(c)(2) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “a qualified natural gas, propane, or oil furnace or hot water boiler, or”.\nSubsec. (d)(3)(B).  Pub. L. 111–5, §\u202f1121(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “an electric heat pump which has a heating seasonal performance factor (HSPF) of at least 9, a seasonal energy efficiency ratio (SEER) of at least 15, and an energy efficiency ratio (EER) of at least 13,”.\nSubsec. (d)(3)(C).  Pub. L. 111–5, §\u202f1121(b)(2) , substituted “2009” for “2006”.\nSubsec. (d)(3)(D).  Pub. L. 111–5, §\u202f1121(b)(3) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “a natural gas, propane, or oil water heater which has an energy factor of at least 0.80 or a thermal efficiency of at least 90 percent, and”.\nSubsec. (d)(3)(E).  Pub. L. 111–5, §\u202f1121(b)(4) , inserted “,\u2000as measured using a lower heating value” after “75 percent”.\nSubsec. (d)(4).  Pub. L. 111–5, §\u202f1121(c)(1) , amended par. (4) generally. Prior to amendment, text read as follows: “The term ‘qualified natural gas, propane, or oil furnace or hot water boiler’ means a natural gas, propane, or oil furnace or hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 95.”\nSubsec. (e)(1).  Pub. L. 111–5, §\u202f1103(b)(2)(A) , substituted “and (8)” for “(8), and (9)”.\nSubsec. (g)(2).  Pub. L. 111–5, §\u202f1121(e) , substituted “ December 31, 2010 ” for “ December 31, 2009 ”.\n2008—Subsec. (c)(1).  Pub. L. 110–343, §\u202f302(e)(1) , in introductory provisions, inserted “,\u2000or an asphalt roof with appropriate cooling granules,” before “which meet the Energy Star program requirements”.\nSubsec. (c)(2)(D).  Pub. L. 110–343, §\u202f302(e)(2) , inserted “or asphalt roof” after “metal roof” and “or cooling granules” after “pigmented coatings”.\nSubsec. (d)(2)(C).  Pub. L. 110–343, §\u202f302(d)(2) , amended heading and text of subpar. (C) generally. Prior to amendment, subpar. (C) related to requirements for standards for central air conditioners, electric heat pumps, and geothermal heat pumps.\nSubsec. (d)(3)(C), (D).  Pub. L. 110–343, §\u202f302(d)(1) , redesignated subpars. (D) and (E) as (C) and (D), respectively, and struck out former subpar. (C) which read as follows: “a geothermal heat pump which—\n“(i) in the case of a closed loop product, has an energy efficiency ratio (EER) of at least 14.1 and a heating coefficient of performance (COP) of at least 3.3,\n“(ii) in the case of an open loop product, has an energy efficiency ratio (EER) of at least 16.2 and a heating coefficient of performance (COP) of at least 3.6, and\n“(iii) in the case of a direct expansion (DX) product, has an energy efficiency ratio (EER) of at least 15 and a heating coefficient of performance (COP) of at least 3.5,”.\nSubsec. (d)(3)(E).  Pub. L. 110–343, §\u202f302(d)(1) , redesignated subpar. (F) as (E). Former subpar. (E) redesignated (D).\nPub. L. 110–343, §\u202f302(c) , inserted “or a thermal efficiency of at least 90 percent” after “0.80”.\nSubsec. (d)(3)(F).  Pub. L. 110–343, §\u202f302(d)(1) , redesignated subpar. (F) as (E).\nPub. L. 110–343, §\u202f302(b)(1) , added subpar. (F).\nSubsec. (d)(6).  Pub. L. 110–343, §\u202f302(b)(2) , added par. (6).\nSubsec. (g).  Pub. L. 110–343, §\u202f302(a) , substituted “placed in service—” for “placed in service after  December 31, 2007 ” and added pars. (1) and (2).\n2007—Subsec. (c)(3).  Pub. L. 110–172  substituted “part 3280” for “section 3280”.\n2005—Subsec. (b)(2).  Pub. L. 109–135  substituted “subsection (c)(2)(B)” for “subsection (c)(3)(B)”.\nPub. L. 117–169, title I, §\u202f13301(i) ,  Aug. 16, 2022 ,  136 Stat. 1946 , provided that: \n “(1)   In general .— Except as otherwise provided by this subsection, the amendments made by this section [amending this section and sections 1016 and 6213 of this title] shall apply to property placed in service after  December 31, 2022 . \n \n “(2)   Extension of credit .— The amendments made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2021 . \n \n “(3)   Identification number requirement .— The amendments made by subsection (g) [amending this section and  section 6213 of this title ] shall apply to property placed in service after  December 31, 2024 .”\nAmendment by  section 13704(b)(1) of Pub. L. 117–169  applicable to transportation fuel produced after  Dec. 31, 2024 , see  section 13704(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45Z of this title .\nPub. L. 116–260, div. EE, title I, §\u202f141(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nPub. L. 116–260, div. EE, title I, §\u202f148(c)(2) ,  Dec. 27, 2020 ,  134 Stat. 3056 , provided that:  “The amendments made by subsection (b) [amending this section and  section 25D of this title ] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f123(c) ,  Dec. 20, 2019 ,  133 Stat. 3231 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40401(b) ,  Feb. 9, 2018 ,  132 Stat. 148 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f181(c) ,  Dec. 18, 2015 ,  129 Stat. 3072 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2014 . \n \n “(2)   Modification .— The amendments made by subsection (b) [amending this section] shall apply to property placed in service after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f151(b) ,  Dec. 19, 2014 ,  128 Stat. 4021 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 112–240, title IV, §\u202f401(b) ,  Jan. 2, 2013 ,  126 Stat. 2337 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f710(c) ,  Dec. 17, 2010 ,  124 Stat. 3315 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2010 .”\nPub. L. 111–5, div. B, title I, §\u202f1103(c) ,  Feb. 17, 2009 ,  123 Stat. 321 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by this section [amending this section and sections 25D and 48 to 48B of this title] shall apply to periods after  December 31, 2008 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]). \n \n “(2)   Conforming amendments .— The amendments made by subparagraphs (A) and (B) of subsection (b)(2) [amending this section and  section 25D of this title ] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1121(f) ,  Feb. 17, 2009 ,  123 Stat. 324 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 . \n \n “(2)   Efficiency standards .— The amendments made by paragraphs (1), (2), and (3) of subsection (b) and subsections (c) and (d) shall apply to property placed in service after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 110–343, div. B, title III, §\u202f302(f) ,  Oct. 3, 2008 ,  122 Stat. 3845 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made [by] this section [amending this section] shall apply to expenditures made after  December 31, 2008 . \n \n “(2)   Modification of qualified energy efficiency improvements .— The amendments made by subsection (e) [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 109–58, title XIII, §\u202f1333(c) ,  Aug. 8, 2005 ,  119 Stat. 1030 , provided that:  “The amendments made by this section [enacting this section and amending  section 1016 of this title ] shall apply to property placed in service after  December 31, 2005 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of any qualified fuel cell property expenditure, the credit allowed under subsection (a) (determined without regard to subsection (c)) for any taxable year shall not exceed $500 with respect to each half kilowatt of capacity of the qualified fuel cell property (as defined in section 48(c)(1)) to which such expenditure relates.\nNo credit shall be allowed under this section for an item of property described in subsection (d)(1) unless such property is certified for performance by the non-profit Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed.\nIf the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.\nThe term “qualified solar water heating property expenditure” means an expenditure for property to heat water for use in a dwelling unit located in the United States and used as a residence by the taxpayer if at least half of the energy used by such property for such purpose is derived from the sun.\nThe term “qualified solar electric property expenditure” means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer.\nThe term “qualified fuel cell property expenditure” means an expenditure for qualified fuel cell property (as defined in section 48(c)(1), without regard to subparagraph (D) thereof) installed on or in connection with a dwelling unit located in the United States and used as a principal residence (within the meaning of section 121) by the taxpayer.\nThe term “qualified small wind energy property expenditure” means an expenditure for property which uses a wind turbine to generate electricity for use in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.\nThe term “qualified geothermal heat pump property expenditure” means an expenditure for qualified geothermal heat pump property installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.\nExpenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (d) and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section.\nNo expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (1) or (2) of subsection (d) solely because it constitutes a structural component of the structure on which it is installed.\nExpenditures which are properly allocable to a swimming pool, hot tub, or any other energy storage medium which has a function other than the function of such storage shall not be taken into account for purposes of this section.\nThe maximum amount of such expenditures which may be taken into account under subsection (a) by all such individuals with respect to such dwelling unit during such calendar year shall be $1,667 in the case of each half kilowatt of capacity of qualified fuel cell property (as defined in section 48(c)(1)) with respect to which such expenditures relate.\nIn the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made his tenant-stockholder’s proportionate share (as defined in section 216(b)(3)) of any expenditures of such corporation.\nIn the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual’s proportionate share of any expenditures of such association.\nFor purposes of this paragraph, the term “condominium management association” means an organization which meets the requirements of paragraph (1) of section 528(c) (other than subparagraph (E) thereof) with respect to a condominium project substantially all of the units of which are used as residences.\nIf less than 80 percent of the use of an item is for nonbusiness purposes, only that portion of the expenditures for such item which is properly allocable to use for nonbusiness purposes shall be taken into account.\nExcept as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed.\nIn the case of an expenditure in connection with the construction or reconstruction of a structure, such expenditure shall be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins.\nFor purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.\nThe credit allowed under this section shall not apply to property placed in service after  December 31, 2034 .\n2022— Pub. L. 117–169, §\u202f13302(c)(2) , substituted “clean energy credit” for “energy efficient property” in section catchline.\nSubsec. (a)(6).  Pub. L. 117–169, §\u202f13302(b)(1) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “the qualified biomass fuel property expenditures, and”.\nSubsec. (d)(3).  Pub. L. 117–169, §\u202f13302(c)(1) , inserted “,\u2000without regard to subparagraph (D) thereof” after “section 48(c)(1)”.\nSubsec. (d)(6).  Pub. L. 117–169, §\u202f13302(b)(2) , amended par. (6) generally. Prior to amendment, text read as follows:\n“(A)  In general .—The term ‘qualified biomass fuel property expenditure’ means an expenditure for property—\n“(i) which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and\n“(ii) which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel).\n“(B)  Biomass fuel .—For purposes of this section, the term ‘biomass fuel’ means any plant-derived fuel available on a renewable or recurring basis.”\nSubsec. (g)(2).  Pub. L. 117–169, §\u202f13302(a)(2)(A) , substituted “before  January 1, 2022 , 26 percent,” for “before  January 1, 2023 , 26 percent, and”.\nSubsec. (g)(3) to (5).  Pub. L. 117–169, §\u202f13302(a)(2)(B) , added pars. (3) to (5) and struck out former par. (3) which read as follows: “in the case of property placed in service after  December 31, 2022 , and before  January 1, 2024 , 22 percent.”\nSubsec. (h).  Pub. L. 117–169, §\u202f13302(a)(1) , substituted “ December 31, 2034 ” for “ December 31, 2023 ”.\n2020—Subsec. (a)(6).  Pub. L. 116–260, §\u202f148(b)(1) , added par. (6).\nSubsec. (d)(6).  Pub. L. 116–260, §\u202f148(b)(2) , added par. (6).\nSubsec. (g)(2).  Pub. L. 116–260, §\u202f148(a)(2)(A) , substituted “ January 1, 2023 ” for “ January 1, 2021 ”.\nSubsec. (g)(3).  Pub. L. 116–260, §\u202f148(a)(2)(B) , substituted “after  December 31, 2022 , and before  January 1, 2024 ” for “after  December 31, 2020 , and before  January 1, 2022 ”.\nSubsec. (h).  Pub. L. 116–260, §\u202f148(a)(1) , substituted “ December 31, 2023 ” for “ December 31, 2021 ”.\n2018—Subsec. (a).  Pub. L. 115–123, §\u202f40402(b)(1) , substituted “the sum of the applicable percentages of—”, pars. (1) to (5), and concluding provisions for “the sum of—\n“(1) the applicable percentage of the qualified solar electric property expenditures made by the taxpayer during such year,\n“(2) the applicable percentage of the qualified solar water heating property expenditures made by the taxpayer during such year,\n“(3) 30 percent of the qualified fuel cell property expenditures made by the taxpayer during such year,\n“(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year, and\n“(5) 30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during such year.”\nSubsec. (g).  Pub. L. 115–123, §\u202f40402(b)(2) , struck out “paragraphs (1) and (2) of” before “subsection (a),” in introductory provisions.\nSubsec. (h).  Pub. L. 115–123, §\u202f40402(a) , substituted “ December 31, 2021 .” for “ December 31, 2016  ( December 31, 2021 , in the case of any qualified solar electric property expenditures and qualified solar water heating property expenditures).”\n2015—Subsec. (a)(1), (2).  Pub. L. 114–113, §\u202f304(a)(1) , substituted “the applicable percentage” for “30 percent”.\nSubsec. (g).  Pub. L. 114–113, §\u202f304(a)(4) , added subsec. (g). Former subsec. (g) redesignated (h).\nPub. L. 114–113, §\u202f304(a)(2) , inserted “( December 31, 2021 , in the case of any qualified solar electric property expenditures and qualified solar water heating property expenditures)” before period at end.\nSubsec. (h).  Pub. L. 114–113, §\u202f304(a)(3) , redesignated subsec. (g) as (h).\n2013—Subsec. (c).  Pub. L. 112–240  amended subsec. (c) generally. Prior to amendment, subsec. (c) related to limitation based on amount of tax and carryforward of unused credit.\n2009—Subsec. (b)(1).  Pub. L. 111–5, §\u202f1122(a)(1) , amended par. (1) generally. Prior to amendment, par. (1) related to maximum credit with respect to qualified solar water heating property expenditures, qualified fuel cell property, qualified small wind energy property expenditures, and qualified geothermal heat pump property expenditures.\nSubsec. (e)(4).  Pub. L. 111–5, §\u202f1122(a)(2)(A) , added par. heading and introductory provisions and struck out former heading and introductory provisions. Former introductory provisions read as follows: “In the case of any dwelling unit which is jointly occupied and used during any calendar year as a residence by two or more individuals the following rules shall apply:”.\nSubsec. (e)(4)(A).  Pub. L. 111–5, §\u202f1122(a)(2)(A) , added subpar. (A) and struck out former subpar. (A) which related to maximum amount of expenditures allowed for credit in jointly occupied dwelling units with respect to qualified solar water heating property expenditures, qualified fuel cell property, qualified small wind energy property expenditures, and qualified geothermal heat pump property expenditures.\nSubsec. (e)(4)(C).  Pub. L. 111–5, §\u202f1122(a)(2)(B) , struck out subpar. (C) which read as follows: “Subparagraphs (A) and (B) shall be applied separately with respect to expenditures described in paragraphs (1), (2), and (3) of subsection (d).”\nSubsec. (e)(9).  Pub. L. 111–5, §\u202f1103(b)(2)(B) , struck out par. (9). Text read as follows: “For purposes of determining the amount of expenditures made by any individual with respect to any dwelling unit, there shall not be taken into account expenditures which are made from subsidized energy financing (as defined in section 48(a)(4)(C)).”\n2008—Subsec. (a)(4).  Pub. L. 110–343, §\u202f106(c)(1) , added par. (4).\nSubsec. (a)(5).  Pub. L. 110–343, §\u202f106(d)(1) , added par. (5).\nSubsec. (b)(1).  Pub. L. 110–343, §\u202f106(b)(1) , amended par. (1) as amended by  Pub. L. 110–343, §\u202f106(c)(2)  and (d)(2), by redesignating subpars. (B) to (E) as (A) to (D), respectively, and striking out former subpar. (A) which read as follows: “$2,000 with respect to any qualified solar electric property expenditures,”.\nSubsec. (b)(1)(D).  Pub. L. 110–343, §\u202f106(c)(2) , added subpar. (D).\nSubsec. (b)(1)(E).  Pub. L. 110–343, §\u202f106(d)(2) , added subpar. (E).\nSubsec. (c).  Pub. L. 110–343, §\u202f106(e)(1) , amended heading and text of subsec. (c) generally. Prior to amendment, subsec. (c) related to carryforward of unused credit.\nSubsec. (d)(4).  Pub. L. 110–343, §\u202f106(c)(3)(A) , added par. (4).\nSubsec. (d)(5).  Pub. L. 110–343, §\u202f106(d)(3) , added par. (5).\nSubsec. (e)(4)(A).  Pub. L. 110–343, §\u202f106(b)(2) , amended subpar. (A) as amended by  Pub. L. 110–343, §\u202f106(c)(4)  and (d)(4), by redesignating cls. (ii) to (v) as (i) to (iv), respectively, and striking out former cl. (i) which read as follows: “$6,667 in the case of any qualified solar electric property expenditures,”.\nSubsec. (e)(4)(A)(iv).  Pub. L. 110–343, §\u202f106(c)(4) , added cl. (iv).\nSubsec. (e)(4)(A)(v).  Pub. L. 110–343, §\u202f106(d)(4) , added cl. (v).\nSubsec. (g).  Pub. L. 110–343, §\u202f106(a) , substituted “ December 31, 2016 ” for “ December 31, 2008 ”.\n2006—Subsecs. (a)(1), (b)(1)(A).  Pub. L. 109–432, §\u202f206(b)(1) , substituted “solar electric property expenditures” for “photovoltaic property expenditures”.\nSubsec. (d)(2).  Pub. L. 109–432, §\u202f206(b)(2) , substituted “solar electric property expenditure” for “photovoltaic property expenditure” in heading and text.\nSubsec. (e)(4)(A)(i).  Pub. L. 109–432, §\u202f206(b)(1) , substituted “solar electric property expenditures” for “photovoltaic property expenditures”.\nSubsec. (g).  Pub. L. 109–432, §\u202f206(a) , substituted “2008” for “2007”.\n2005—Subsec. (b)(1).  Pub. L. 109–135, §\u202f402(i)(1) , inserted “(determined without regard to subsection (c))” after “subsection (a)” in introductory provisions.\nSubsec. (c).  Pub. L. 109–135, §\u202f402(i)(3)(E) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.”\nSubsec. (e)(4)(A), (B).  Pub. L. 109–135, §\u202f402(i)(2) , amended subpars. (A) and (B) generally. Prior to amendment, subpars. (A) and (B) read as follows:\n“(A) The amount of the credit allowable, under subsection (a) by reason of expenditures (as the case may be) made during such calendar year by any of such individuals with respect to such dwelling unit shall be determined by treating all of such individuals as 1 taxpayer whose taxable year is such calendar year.\n“(B) There shall be allowable, with respect to such expenditures to each of such individuals, a credit under subsection (a) for the taxable year in which such calendar year ends in an amount which bears the same ratio to the amount determined under subparagraph (A) as the amount of such expenditures made by such individual during such calendar year bears to the aggregate of such expenditures made by all of such individuals during such calendar year.”\nPub. L. 117–169, title I, §\u202f13302(d) ,  Aug. 16, 2022 ,  136 Stat. 1947 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to expenditures made after  December 31, 2021 . \n \n “(2)   Residential clean energy credit for battery storage technology; certain expenditures disallowed .— The amendments made by subsection (b) [amending this section] shall apply to expenditures made after  December 31, 2022 .”\nPub. L. 116–260, div. EE, title I, §\u202f148(c)(1) ,  Dec. 27, 2020 ,  134 Stat. 3056 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nAmendment by  section 148(b) of Pub. L. 116–260  applicable to expenditures paid or incurred in taxable years beginning after  Dec. 31, 2020 , see  section 148(c)(2) of div. EE of Pub. L. 116–260 , set out as a note under  section 25C of this title .\nPub. L. 115–123, div. D, title I, §\u202f40402(c) ,  Feb. 9, 2018 ,  132 Stat. 148 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 114–113, div. P, title III, §\u202f304(b) ,  Dec. 18, 2015 ,  129 Stat. 3040 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2017 .”\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nAmendment by  section 1103(b)(2)(B) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1103(c)(2) of Pub. L. 111–5 , set out as a note under  section 25C of this title .\nPub. L. 111–5, div. B, title I, §\u202f1122(b) ,  Feb. 17, 2009 ,  123 Stat. 324 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2007 , except that amendment by  section 106(b) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see section 106(f)(1), (2) of  Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 23 of this title .\nAmendment by  section 402(i)(3)(E) of Pub. L. 109–135  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , in the same manner as the provisions of such Act to which such amendment relates, see  section 402(i)(3)(H) of Pub. L. 109–135 , set out as a note under  section 23 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which they relate, except that amendment by  section 402(i)(3)(E) of Pub. L. 109–135  is applicable to taxable years beginning after  Dec. 31, 2005 , see  section 402(m) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nSection applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1335(c) of Pub. L. 109–58 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of this subsection, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.\nThe terms “motor vehicle” and “capacity” have the meaning given such terms in paragraphs (2) and (4) of section 30D(d), respectively.\nNo credit shall be allowed under subsection (a) with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.\nFor purposes of this section, rules similar to the rules of section 30D(f) (without regard to paragraph (10) or (11) thereof) shall apply for purposes of this section.\nRules similar to the rules of section 30D(g) shall apply.\nNo credit shall be allowed under this section with respect to any vehicle acquired after  December 31, 2032 .\nThe date of the enactment of this section, referred to in subsec. (c)(2)(C), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\n2022—Subsecs. (f), (g).  Pub. L. 117–169, §\u202f13402(b) , added subsec. (f) and redesignated former subsec. (f) as (g).\nPub. L. 117–169, title I, §\u202f13402(e) ,  Aug. 16, 2022 ,  136 Stat. 1964 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this section and amending this section and  section 6213 of this title ] shall apply to vehicles acquired after  December 31, 2022 . \n \n “(2)   Transfer of credit .— The amendments made by subsection (b) [amending this section] shall apply to vehicles acquired after  December 31, 2023 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The term “regular tax liability” means the tax imposed by this chapter for the taxable year.\nFor purposes of this part, the term “tentative minimum tax” means the amount determined under section 55(b)(1).\n2021—Subsec. (b)(2)(Z).  Pub. L. 117–2  added subpar. (Z).\n2018—Subsec. (a)(1).  Pub. L. 115–141, §\u202f401(d)(1)(D)(ii) , substituted “section 27” for “section 27(a)”.\nSubsec. (b)(2)(P).  Pub. L. 115–141, §\u202f401(b)(2) , struck out subpar. (P) which read as follows: “section 860K (relating to treatment of transfers of high-yield interests to disqualified holders),”.\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97  added subpar. (B).\n2014—Subsec. (b)(2)(B).  Pub. L. 113–295, §\u202f221(a)(12)(B) , struck out subpar. (B) which read as follows: “section 59A (relating to environmental tax),”.\nSubsec. (b)(2)(Y).  Pub. L. 113–295, §\u202f102(e)(1) , added subpar. (Y).\n2013—Subsec. (a).  Pub. L. 112–240  amended subsec. (a) generally. Prior to amendment, subsec. (a) related to limitation based on amount of tax with a special rule for taxable years 2000 through 2011.\n2010—Subsec. (a)(1).  Pub. L. 111–148, §\u202f10909(b)(2)(E) , (c), as amended by  Pub. L. 111–312, §\u202f101(b)(1) , temporarily struck out “23,” before “24,” in introductory provisions. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (a)(2).  Pub. L. 111–312, §\u202f202(a) , substituted “2011” for “2009” in heading and “2009, 2010, or 2011” for “or 2009” in introductory provisions.\n2009—Subsec. (a)(1).  Pub. L. 111–5, §\u202f1144(b)(1)(D) , inserted “30B,” after “30,” in introductory provisions.\nPub. L. 111–5, §\u202f1142(b)(1)(D) , inserted “30,” after “25D,” in introductory provisions.\nPub. L. 111–5, §\u202f1004(b)(3) , inserted “25A(i),” after “24,” in introductory provisions.\nSubsec. (a)(2).  Pub. L. 111–5, §\u202f1011(a) , substituted “2009” for “2008” in heading and “2008, or 2009” for “or 2008” in introductory provisions.\n2008—Subsec. (a)(1).  Pub. L. 110–343, §\u202f205(d)(1)(D) , substituted “25D, and 30D” for “and 25D” in introductory provisions.\nPub. L. 110–343, §\u202f106(e)(2)(D) , substituted “25B, and 25D” for “and 25B” in introductory provisions.\nSubsec. (a)(2).  Pub. L. 110–343, §\u202f101(a) , substituted “2008” for “2007” in heading and “2007, or 2008” for “or 2007” in introductory provisions.\nSubsec. (b)(2)(W).  Pub. L. 110–289  added subpar. (W).\nSubsec. (b)(2)(X).  Pub. L. 110–343, §\u202f801(b) , added subpar. (X).\n2007—Subsec. (a)(2).  Pub. L. 110–166  substituted “2007” for “2006” in heading and “2006, or 2007” for “or 2006” in introductory provisions.\nSubsec. (b)(2)(S) to (V).  Pub. L. 110–172  added subpars. (S) and (T) and redesignated former subpars. (S) and (T) as (U) and (V), respectively.\n2006—Subsec. (a)(2).  Pub. L. 109–222  substituted “2006” for “2005” in heading and “2005, or 2006” for “or 2005” in introductory provisions.\n2005—Subsec. (b)(2)(E).  Pub. L. 109–135, §\u202f412(c) , substituted “section 530(d)(4)” for “section 530(d)(3)”.\nSubsec. (b)(2)(T).  Pub. L. 109–135, §\u202f403(hh)(1) , added subpar. (T).\n2004—Subsec. (a)(2).  Pub. L. 108–311, §\u202f312(a) , substituted “rule for taxable years 2000 through 2005” for “rule for 2000, 2001, 2002, and 2003” in heading and “2003, 2004, or 2005” for “or 2003” in text.\nSubsec. (b)(2)(R).  Pub. L. 108–311, §\u202f408(a)(5)(A) , substituted “Medicare Advantage MSA” for “Medicare+Choice MSA”.\nSubsec. (b)(2)(S).  Pub. L. 108–311, §\u202f401(a)(1) , added subpar. (S).\n2002—Subsec. (a)(1).  Pub. L. 107–147, §\u202f417(23)(B) , amended directory language of  Pub. L. 107–16, §\u202f618(b)(2)(C) . See 2001 Amendment note below.\nSubsec. (a)(2).  Pub. L. 107–147, §\u202f601(a) , substituted “rule for 2000, 2001, 2002, and 2003” for “rule for 2000 and 2001” in heading and “during 2000, 2001, 2002, or 2003,” for “during 2000 or 2001,” in introductory provisions.\nSubsec. (b)(2)(P), (Q).  Pub. L. 107–147, §\u202f415(a) , which directed striking “and” at end of subpar. (P) and substituting “,\u2000and” for the period at the end of subpar. (Q), was executed to subpars. (P) and (Q) as redesignated by  Pub. L. 105–34, §\u202f213(e)(1) , to reflect the probable intent of Congress. See 1997 Amendment notes below.\nSubsec. (b)(2)(R).  Pub. L. 107–147, §\u202f415(a) , added subpar. (R).\n2001—Subsec. (a)(1).  Pub. L. 107–16, §\u202f618(b)(2)(C) , as amended by  Pub. L. 107–147, §\u202f417(23)(B) , substituted “,\u200024, and 25B” for “and 24” in introductory provisions.\nPub. L. 107–16, §\u202f202(f)(2)(C) , substituted “sections 23 and 24” for “section 24” in introductory provisions.\nPub. L. 107–16, §\u202f201(b)(2)(D) , inserted “(other than section 24)” after “this subpart” in introductory provisions.\nSubsec. (b)(2)(E).  Pub. L. 107–22  substituted “Coverdell education savings” for “education individual retirement”.\n2000—Subsec. (b)(2)(Q).  Pub. L. 106–554  substituted “Archer MSA” for “medical savings account”.\n1999—Subsec. (a).  Pub. L. 106–170  reenacted subsec. heading without change and amended text generally. Prior to amendment, text read as follows: “The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the excess (if any) of—\n“(1) the taxpayer’s regular tax liability for the taxable year, over\n“(2) the tentative minimum tax for the taxable year (determined without regard to the alternative minimum tax foreign tax credit).\nFor purposes of paragraph (2), the taxpayer’s tentative minimum tax for any taxable year beginning during 1998 shall be treated as being zero.”\n1998—Subsec. (a).  Pub. L. 105–277  inserted concluding provisions.\n1997—Subsec. (b)(2)(E) to (O).  Pub. L. 105–34, §\u202f213(e)(1) , added subpar. (E) and redesignated former subpars. (E) to (N) as (F) to (O), respectively. Former subpar. (O) redesignated (P).\nSubsec. (b)(2)(P).  Pub. L. 105–34, §\u202f213(e)(1) , redesignated subpar. (P) as (Q).\nPub. L. 105–34, §\u202f1602(a)(1) , added subpar. (P).\nSubsec. (b)(2)(Q).  Pub. L. 105–34, §\u202f213(e)(1) , redesignated subpar. (P) as (Q).\n1996—Subsec. (b)(2)(O).  Pub. L. 104–188  added subpar. (O).\n1989—Subsec. (b)(2)(C), (D).  Pub. L. 101–239, §\u202f7811(c)(1) , amended subpars. (C) and (D) generally. Prior to amendment, subpars. (C) and (D) read as follows:\n“(C) subsection (m)(5)(B) (q), or (v) of section 72 (relating to additional tax on certain distributions),\n“(D) section 72(t) (relating to 10-percent additional tax on early distributions from qualified retirement plans),”.\nSubsec. (b)(2)(K).  Pub. L. 101–239, §\u202f7811(c)(2) , added subpar. (K) and struck out former subpar. (K) which was identical.\nSubsec. (b)(2)(L), (M).  Pub. L. 101–239, §\u202f7811(c)(2) , added subpars. (L) and (M) and struck out former subpars. (L) and (M) which read as follows:\n“(L) section 860E(e) (relating to taxes with respect to certain residual interests), and\n“(L) section 884 (relating to branch profits tax), and\n“(M) section 143(m) (relating to recapture of portion of federal subsidy from use of mortgage bonds and mortgage credit certificates).”\nSubsec. (b)(2)(N).  Pub. L. 101–239, §\u202f7821(a)(4)(A) , which directed amendment of subsec. (b)(2) of this section “as amended by section 11811” by adding subpar. (N), was executed as if it directed amendment of subsec. (b)(2) of this section “as amended by section 7811”, to reflect the probable intent of Congress and the renumbering of section 11811 of H.R. 3299 as section 7811 prior to the enactment of H.R. 3299 into law as  Pub. L. 101–239 .\n1988—Subsec. (b)(2)(C).  Pub. L. 100–647, §\u202f1011A(c)(10)(A) , struck out “,\u2000( o )(2),” after “subsection (m)(5)(B)”.\nPub. L. 100–647, §\u202f5012(b)(2) , substituted “(q), or (v)” for “or (q)”.\nSubsec. (b)(2)(D).  Pub. L. 100–647, §\u202f1011A(c)(10)(B) , substituted “72(t) (relating to 10-percent additional tax on early distributions from qualified retirement plans)” for “408(f) (relating to additional tax on income from certain retirement accounts)”.\nSubsec. (b)(2)(K).  Pub. L. 100–647, §\u202f1007(g)(1) , substituted “corporations).” for “corporations,”.\nSubsec. (b)(2)(L).  Pub. L. 100–647, §\u202f1012(q)(8) , added subpar. (L) relating to branch profits tax.\nPub. L. 100–647, §\u202f1006(t)(16)(C) , added subpar. (L) relating to taxes with respect to certain residual interests.\nSubsec. (b)(2)(M).  Pub. L. 100–647, §\u202f4005(g)(4) , added subpar. (M).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f701(c)(1)(A) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the taxpayer’s tax liability for such taxable year.”\nSubsec. (b).  Pub. L. 99–514, §\u202f701(c)(1)(B)(i) , (v), substituted “Regular tax liability” for “Tax liability” in heading and “this part” for “this section” in introductory provisions.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f701(c)(1)(B)(ii) , substituted “regular tax liability” for “tax liability”.\nSubsec. (b)(2).  Pub. L. 99–499  added subpar. (B) and redesignated former subpars. (B) to (J) as (C) to (K), respectively.\nPub. L. 99–514, §\u202f701(c)(1)(B)(iii) , substituted “section 55 (relating to minimum tax)” for “section 56 (relating to corporate minimum tax)” in subpar. (A).\nPub. L. 99–514, §\u202f632(c)(1) , substituted “certain built-in gains” for “certain capital gains” in subpar. (G).\nPub. L. 99–514, §\u202f261(c) , added subpar. (I).\nPub. L. 99–514, §\u202f701(c)(1)(B)(iv) , added subpar. (J).\nSubsec. (c).  Pub. L. 99–514, §\u202f701(c)(1)(C) , amended subsec. (c) generally, substituting provisions relating to tentative minimum tax for provisions referring to  section 55(c) of this title  for similar rule for alternative minimum tax for taxpayers other than corporations.\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 9611(c)(1) of Pub. L. 117–2 , set out as a note under  section 24 of this title .\nPub. L. 115–97, title I, §\u202f14401(e) ,  Dec. 22, 2017 ,  131 Stat. 2234 , provided that:  “The amendments made by this section [enacting  section 59A of this title  and amending this section and sections 882, 6038A, 6425, and 6655 of this title] shall apply to base erosion payments (as defined in section 59A(d) of the Internal Revenue Code of 1986 [ 26 U.S.C. 59A(d) ], as added by this section) paid or accrued in taxable years beginning after  December 31, 2017 .”\nAmendment by  section 221(a)(12)(B) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of div. A of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 102(e)(1) of Pub. L. 113–295  applicable to taxable years beginning after  Dec. 31, 2014 , see  section 102(f)(1) of div. B of Pub. L. 113–295 , set out as a note under  section 552a of Title 5 , Government Organization and Employees.\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nPub. L. 111–312, title II, §\u202f202(b) ,  Dec. 17, 2010 ,  124 Stat. 3299 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  section 1004(b)(3) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1004(d) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1011(b) ,  Feb. 17, 2009 ,  123 Stat. 319 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  section 1142(b)(1)(D) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1144(b)(1)(D) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 106(e)(2)(D) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2007 , see  section 106(f)(1) of div. B of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 23 of this title .\nAmendment by  section 205(d)(1)(D) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of div. B of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nPub. L. 110–343, div. C, title I, §\u202f101(b) ,  Oct. 3, 2008 ,  122 Stat. 3863 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nAmendment by  section 801(b) of Pub. L. 110–343  applicable to amounts deferred which are attributable to services performed after  Dec. 31, 2008 , with certain exceptions, see  section 801(d) of div. C of Pub. L. 110–343 , set out as an Effective Date note under  section 457A of this title .\nPub. L. 110–289, div. C, title I, §\u202f3011(c) ,  July 30, 2008 ,  122 Stat. 2891 , provided that:  “The amendments made by this section [enacting  section 36 of this title , amending this section and  section 6211 of this title  and  section 1324 of Title 31 , Money and Finance, and renumbering former  section 36 of this title  as  section 37 of this title ] shall apply to residences purchased on or after  April 9, 2008 , in taxable years ending on or after such date.”\nPub. L. 110–166, §\u202f3(b) ,  Dec. 26, 2007 ,  121 Stat. 2461 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–222, title III, §\u202f302(b) ,  May 17, 2006 ,  120 Stat. 353 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 109–135, title IV, §\u202f403(nn) ,  Dec. 21, 2005 ,  119 Stat. 2632 , provided that:  “The amendments made by this section [see Tables for classification] shall take effect as if included in the provisions of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ] to which they relate.”\nPub. L. 108–311, title III, §\u202f312(c) ,  Oct. 4, 2004 ,  118 Stat. 1181 , provided that:  “The amendments made by this section [amending this section and  section 904 of this title ] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 108–311, title IV, §\u202f401(b) ,  Oct. 4, 2004 ,  118 Stat. 1183 , provided that:  “The amendments made by subsection (a) [amending this section and  section 35 of this title ] shall take effect as if included in section 1201 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 [ Pub. L. 108–173 ].”\nPub. L. 107–147, title IV, §\u202f415(b) ,  Mar. 9, 2002 ,  116 Stat. 54 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 4006 of the Balanced Budget Act of 1997 [ Pub. L. 105–33 ].”\nPub. L. 107–147, title VI, §\u202f601(c) ,  Mar. 9, 2002 ,  116 Stat. 59 , provided that:  “The amendments made by this section [amending this section and  section 904 of this title ] shall apply to taxable years beginning after  December 31, 2001 .”\nAmendment by  Pub. L. 107–16  inapplicable to taxable years beginning during 2004 or 2005, see  section 312(b)(2) of Pub. L. 108–311 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 107–16  inapplicable to taxable years beginning during 2002 and 2003, see  section 601(b)(2) of Pub. L. 107–147 , set out as a note under  section 23 of this title .\nPub. L. 107–22, §\u202f1(c) ,  July 26, 2001 ,  115 Stat. 197 , provided that:  “The amendments made by this section [amending this section and sections 72, 135, 529, 530, 4973, 4975, and 6693 of this title] shall take effect on the date of the enactment of this Act [ July 26, 2001 ].”\nAmendment by  section 201(b)(2)(D) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 201(e)(2) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nAmendment by  section 202(f)(2)(C) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 202(g)(1) of Pub. L. 107–16 , set out as a note under  section 23 of this title .\nAmendment by  section 618(b)(2)(C) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 618(d) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 106–170  applicable to taxable years beginning after  Dec. 31, 1998 , see  section 501(c) of Pub. L. 106–170 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 105–277  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 2001(c) of Pub. L. 105–277 , set out as a note under  section 24 of this title .\nPub. L. 105–34, title II, §\u202f213(f) ,  Aug. 5, 1997 ,  111 Stat. 817 , provided that:  “The amendments made by this section [enacting  section 530 of this title  and amending this section and sections 135, 4973, 4975, and 6693 of this title] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title XVI, §\u202f1602(i) ,  Aug. 5, 1997 ,  111 Stat. 1096 , provided that:  “The amendments made by this section [amending this section and sections 162, 220, 264, 877, 2107, 2501, 4975, 6050Q, 6652, 6693, 6724, and 7702B of this title, renumbering  section 6039F of this title  as  section 6039G of this title , and amending provisions set out as a note under  section 264 of this title ] shall take effect as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996 [ Pub. L. 104–191 ] to which such amendments relate.”\nPub. L. 104–188, title I, §\u202f1621(d) ,  Aug. 20, 1996 ,  110 Stat. 1867 , provided that:  “The amendments made by this section [enacting sections 860H to 860L of this title and amending this section and sections 56, 382, 582, 856, 860G, 1202, and 7701 of this title] shall take effect on  September 1, 1997 .”\nAmendment by section 7811(c)(1), (2) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 101–239, title VII, §\u202f7823 ,  Dec. 19, 1989 ,  103 Stat. 2425 , provided that:  “Except as otherwise provided in this part [part II (§§\u202f7821–7823) of subtitle H of title VII of  Pub. L. 101–239 , amending this section and sections 453A, 842, 1503, 6427, 6655, 6863, 7519, 7611, 9502, 9503, and 9508 of this title and enacting provisions set out as notes under sections 56 and 7519 of this title], any amendment made by this part shall take effect as if included in the provision of the 1987 Act [ Pub. L. 100–203, title X ] to which such amendment relates.”\nAmendment by  section 1006(t)(16)(C) of Pub. L. 100–647  applicable, with certain exceptions, to transfers after  Mar. 31, 1988 , and to excess inclusions for periods after  Mar. 31, 1988 , see section 1006(t)(16)(D)(ii)–(iv) of  Pub. L. 100–647 , set out as a note under  section 860E of this title .\nAmendment by sections 1007(g)(1), 1011A(c)(10), and 1012(q)(8) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 4005(g)(4) of Pub. L. 100–647  applicable, with certain exceptions, to financing provided, and mortgage credit certificates issued, after  Dec. 31, 1990 , see  section 4005(h)(3) of Pub. L. 100–647 , set out as a note under  section 143 of this title .\nAmendment by  section 5012(b)(2) of Pub. L. 100–647  applicable to contracts entered into on or after  June 21, 1988 , with special rule where death benefit increases by more than $150,000, certain other material changes taken into account, and certain exchanges permitted, see  section 5012(e) of Pub. L. 100–647 , set out as an Effective Date note under  section 7702A of this title .\nAmendment by  section 261(c) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 261(g) of Pub. L. 99–514 , set out as an Effective Date note under  section 7518 of this title .\nAmendment by  section 632(c)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in cases where the return for the taxable year is filed pursuant to an S election made after  Dec. 31, 1986 , see  section 633(b) of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 632(c)(1) of Pub. L. 99–514  not applicable in the case of certain transactions, see  section 54(d)(3)(D) of Pub. L. 98–369 , as amended, set out as an Effective Date of 1984 Amendment note under  section 311 of this title .\nAmendment by  section 701(c)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 99–499, title V, §\u202f516(c) ,  Oct. 17, 1986 ,  100 Stat. 1772 , provided that:  “The amendments made by this section [enacting  section 59A of this title  and amending this section and sections 164, 275, 936, 1561, 6154, 6425, and 6655 of this title] shall apply to taxable years beginning after  December 31, 1986 .”\nSection applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 21 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor applicability of amendment by  section 701(c)(1) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f491(f)(5) ,  July 18, 1984 ,  98 Stat. 853 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “For purposes of section 26(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this Act), any tax imposed by section 409(c) of such Code (as in effect before its repeal by this section) shall be treated as a tax imposed by section 408(f) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The amount of taxes imposed by foreign countries and possessions of the United States shall be allowed as a credit against the tax imposed by this chapter to the extent provided in section 901\u202f 1 1 \u202fSo in original. Probably should be followed by a period.\n2018— Pub. L. 115–141  amended section generally. Prior to amendment, section consisted of subsecs. (a) and (b) relating to the foreign tax credit under section 901 and the tax credit under section 936, respectively.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 33 of this title  as this section.\n1976— Pub. L. 94–455  designated existing provisions as subsec. (a) and added subsec. (b).\nPub. L. 94–455, title X, §\u202f1051(i) ,  Oct. 4, 1976 ,  90 Stat. 1647 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as provided by paragraph (2), the amendments made by this section [enacting  section 936 of this title  and amending sections 33 [now 27], 48, 116, 243, 246, 861, 901, 904, 931, 1504, and 6091 of this title] shall apply to taxable years beginning after  December 31, 1975 , except that ‘qualified possession source investment income’ as defined in [former] section 936(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall include income from any source outside the United States if the taxpayer establishes to the satisfaction of the Secretary of the Treasury or his delegate that the income from such sources was earned before  October 1, 1976 . \n \n “(2)  The amendment made by subsection (d)(2) [amending  section 901 of this title ] shall not apply to any tax imposed by a possession of the United States with respect to the complete liquidation occurring before  January 1, 1979 , of a corporation to the extent that such tax is attributable to earnings and profits accumulated by such corporation during periods ending before  January 1, 1976 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 102–486, title XIX, §\u202f1913(b)(1) ,  Oct. 24, 1992 ,  106 Stat. 3019 ; amended  Pub. L. 104–188, title I , §§\u202f1205(d)(4), 1704(j)(4)(A),  Aug. 20, 1996 ,  110 Stat. 1776 , 1881;  Pub. L. 107–147, title VI, §\u202f602(a) ,  Mar. 9, 2002 ,  116 Stat. 59 ;  Pub. L. 108–311, title III, §\u202f318(a) ,  Oct. 4, 2004 ,  118 Stat. 1182 ;  Pub. L. 109–58, title XIII, §\u202f1322(a)(3)(A) ,  Aug. 8, 2005 ,  119 Stat. 1011 ;  Pub. L. 111–5, div. B, title I, §\u202f1142(a) ,  Feb. 17, 2009 ,  123 Stat. 328 ;  Pub. L. 111–148, title X, §\u202f10909(b)(2)(F) , (c),  Mar. 23, 2010 ,  124 Stat. 1023 ;  Pub. L. 111–312, title I, §\u202f101(b)(1) ,  Dec. 17, 2010 ,  124 Stat. 3298 ;  Pub. L. 112–240, title I, §\u202f104(c)(2)(G) ,  Jan. 2, 2013 ,  126 Stat. 2322 ;  Pub. L. 113–295, div. A, title II, §\u202f209(f)(2) ,  Dec. 19, 2014 ,  128 Stat. 4028 , related to certain plug-in electric vehicles.\nA prior section 30 was renumbered  section 41 of this title .\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 104–188, title I, §\u202f1601(b)(1) ,  Aug. 20, 1996 ,  110 Stat. 1830 ; amended  Pub. L. 105–34, title XVI, §\u202f1601(f)(1)(A) ,  Aug. 5, 1997 ,  111 Stat. 1090 ;  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f311(a)(2)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–640;  Pub. L. 113–295, div. A, title II, §\u202f221(a)(12)(C) ,  Dec. 19, 2014 ,  128 Stat. 4038 , related to Puerto Rico economic activity credit. Repeal was executed to this section, which is in subpart B of part IV of subchapter A of chapter 1, to reflect the probable intent of Congress, notwithstanding directory language of  Pub. L. 115–141 , which repealed section 30A in subpart C of part IV of subchapter A of chapter 1.\nFor provisions that nothing in repeal by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 109–432, div. A, title I, §\u202f119 ,  Dec. 20, 2006 ,  120 Stat. 2942 , as amended by  Pub. L. 110–343, div. C, title III, §\u202f309(a) ,  Oct. 3, 2008 ,  122 Stat. 3869 ;  Pub. L. 111–312, title VII, §\u202f756(a) ,  Dec. 17, 2010 ,  124 Stat. 3322 ;  Pub. L. 112–240, title III, §\u202f330(a) , (b),  Jan. 2, 2013 ,  126 Stat. 2335 ;  Pub. L. 113–295, div. A, title I, §\u202f141(a) ,  Dec. 19, 2014 ,  128 Stat. 4020 ;  Pub. L. 114–113, div. Q, title I, §\u202f173(a) ,  Dec. 18, 2015 ,  129 Stat. 3071 ;  Pub. L. 115–123, div. D, title I, §\u202f40312(a) ,  Feb. 9, 2018 ,  132 Stat. 147 ;  Pub. L. 116–94, div. Q, title I, §\u202f119(a) , (b),  Dec. 20, 2019 ,  133 Stat. 3230 ;  Pub. L. 116–260, div. EE, title I, §\u202f139(a) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that: \n “(a)   In General .— For purposes of [former] section 30A of the Internal Revenue Code of 1986, a domestic corporation shall be treated as a qualified domestic corporation to which such section applies if— “(1)  in the case of a taxable year beginning before  January 1, 2012 , such corporation— “(A)  is an existing credit claimant with respect to American Samoa, and \n \n “(B)  elected the application of [former] section 936 of the Internal Revenue Code of 1986 for its last taxable year beginning before  January 1, 2006 , and \n \n \n “(2)  in the case of a taxable year beginning after  December 31, 2011 , such corporation meets the requirements of subsection (e). \n \n \n “(b)   Special Rules for Application of Section .— The following rules shall apply in applying [former] section 30A of the Internal Revenue Code of 1986 for purposes of this section: “(1)   Amount of credit .— Notwithstanding section 30A(a)(1) of such Code, the amount of the credit determined under section 30A(a)(1) of such Code for any taxable year shall be the amount determined under section 30A(d) of such Code, except that section 30A(d) shall be applied without regard to paragraph (3) thereof. \n \n “(2)   Separate application .— In applying section 30A(a)(3) of such Code in the case of a corporation treated as a qualified domestic corporation by reason of this section, section [former] 30A of such Code (and so much of [former] section 936 of such Code as relates to such [former] section 30A) shall be applied separately with respect to American Samoa. \n \n “(3)   Foreign tax credit allowed .— Notwithstanding [former] section 30A(e) of such Code, the provisions of [former] section 936(c) of such Code shall not apply with respect to the credit allowed by reason of this section. \n \n \n “(c)   Definitions .— For purposes of this section, any term which is used in this section which is also used in [former] section 30A or 936 of such Code shall have the same meaning given such term by such [former] section 30A or 936. \n \n “(d)   Application of Section .— Notwithstanding [former] section 30A(h) or [former] section 936(j) of such Code, this section (and so much of [former] section 30A and [former] section 936 of such Code as relates to this section) shall apply— “(1)  in the case of a corporation that meets the requirements of subparagraphs (A) and (B) of subsection (a)(1), to the first 16 taxable years of such corporation which begin after  December 31, 2006 , and before  January 1, 2022 , and \n \n “(2)  in the case of a corporation that does not meet the requirements of subparagraphs (A) and (B) of subsection (a)(1), to the first 10 taxable years of such corporation which begin after  December 31, 2011 , and before  January 1, 2022 . \n \n\n In the case of a corporation described in subsection (a)(2), the Internal Revenue Code of 1986 shall be applied and administered without regard to the amendments made by section 401(d)(1) of the Tax Technical Corrections Act of 2018 [div. U of  Pub. L. 115–141 , see Tables for classification]. \n \n “(e)   Qualified Production Activities Income Requirement .— A corporation meets the requirement of this subsection if such corporation has qualified production activities income, as defined in [former] subsection (c) of section 199 of the Internal Revenue Code of 1986 (as in effect before its repeal), determined by substituting ‘American Samoa’ for ‘the United States’ each place it appears in paragraphs (3), (4), and (6) of such subsection (c), for the taxable year. References in this subsection to section 199 of the Internal Revenue Code of 1986 shall be treated as references to such section as in effect before its repeal.”\n[ Pub. L. 116–260, div. EE, title I, §\u202f139(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2020 .” \n]\n[ Pub. L. 116–94, div. Q, title I, §\u202f119(c) ,  Dec. 20, 2019 ,  133 Stat. 3230 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2017 .” \n]\n[ Pub. L. 115–123, div. D, title I, §\u202f40312(b) ,  Feb. 9, 2018 ,  132 Stat. 147 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2016 .” \n]\n[ Pub. L. 114–113, div. Q, title I, §\u202f173(b) ,  Dec. 18, 2015 ,  129 Stat. 3071 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2014 .” \n]\n[ Pub. L. 113–295, div. A, title I, §\u202f141(b) ,  Dec. 19, 2014 ,  128 Stat. 4020 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2013 .” \n]\n[ Pub. L. 112–240, title III, §\u202f330(c) ,  Jan. 2, 2013 ,  126 Stat. 2335 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2011 .” \n]\n[ Pub. L. 111–312, title VII, §\u202f756(b) ,  Dec. 17, 2010 ,  124 Stat. 3322 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2009 .” \n]\n[ Pub. L. 110–343, div. C, title III, §\u202f309(b) ,  Oct. 3, 2008 ,  122 Stat. 3869 , provided that:  “The amendments made by this section [amending  section 119 of Pub. L. 109–432 , set out above] shall apply to taxable years beginning after  December 31, 2007 .” \n]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of subparagraph (B), the term “vehicle inertia weight class” has the same meaning as when defined in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act ( 42 U.S.C. 7521  et seq.).\nFor purposes of subsection (a), the new advanced lean burn technology motor vehicle credit determined under this subsection for the taxable year is the credit amount determined under paragraph (2) with respect to a new advanced lean burn technology motor vehicle placed in service by the taxpayer during the taxable year.\nThe credit amount determined under this paragraph shall be determined in accordance with the following table: \n \n \n \n \n \n \n In the case of a vehicle which achieves \u2000a fuel economy (expressed as a \u2000percentage of the 2002 model year \u2000city fuel economy) of— The credit amount is— \n \n \n At least 125 percent but less than 150 percent $400\u202f\u202f \n At least 150 percent but less than 175 percent $800\u202f\u202f \n At least 175 percent but less than 200 percent $1,200\u202f\u202f \n At least 200 percent but less than 225 percent $1,600\u202f\u202f \n At least 225 percent but less than 250 percent $2,000\u202f\u202f \n At least 250 percent $2,400.\nFor purposes of clause (i), the 2002 model year city fuel economy with respect to a vehicle shall be determined on a gasoline gallon equivalent basis as determined by the Administrator of the Environmental Protection Agency using the tables provided in subsection (b)(2)(B) with respect to such vehicle.\nThe amount determined under subparagraph (A) with respect to a new advanced lean burn technology motor vehicle shall be increased by the conservation credit amount determined in accordance with the following table: \n \n \n \n \n \n \n In the case of a vehicle which achieves \u2000a lifetime fuel savings (expressed in \u2000gallons of gasoline) of— The conservation credit amount is— \n \n \n At least 1,200 but less than 1,800 $250\u202f\u202f \n At least 1,800 but less than 2,400 $500\u202f\u202f \n At least 2,400 but less than 3,000 $750\u202f\u202f \n At least 3,000 $1,000.\nFor purposes of subsection (a), the new qualified hybrid motor vehicle credit determined under this subsection for the taxable year is the credit amount determined under paragraph (2) with respect to a new qualified hybrid motor vehicle placed in service by the taxpayer during the taxable year.\nThe amount determined under this clause is the amount which would be determined under subsection (c)(2)(A) if such vehicle were a vehicle referred to in such subsection.\nThe amount determined under this clause is the amount which would be determined under subsection (c)(2)(B) if such vehicle were a vehicle referred to in such subsection.\nIn the case of any new qualified hybrid motor vehicle to which subparagraph (A) does not apply, the amount determined under this paragraph is the amount equal to the applicable percentage of the qualified incremental hybrid cost of the vehicle as certified under clause (v).\nFor purposes of this subparagraph, the term “comparable vehicle” means, with respect to any new qualified hybrid motor vehicle, any vehicle which is powered solely by a gasoline or diesel internal combustion engine and which is comparable in weight, size, and use to such vehicle.\nA certification described in clause (i) shall be made by the manufacturer and shall be determined in accordance with guidance prescribed by the Secretary. Such guidance shall specify procedures and methods for calculating fuel economy savings and incremental hybrid costs.\nFor purposes of subparagraph (A)(i)(I), the term “consumable fuel” means any solid, liquid, or gaseous matter which releases energy when consumed by an auxiliary power unit.\nIn the case of a vehicle to which paragraph (2)(A) applies, the term “maximum available power” means the maximum power available from the rechargeable energy storage system, during a standard 10 second pulse power or equivalent test, divided by such maximum power and the SAE net power of the heat engine.\nIn the case of a vehicle to which paragraph (2)(B) applies, the term “maximum available power” means the maximum power available from the rechargeable energy storage system, during a standard 10 second pulse power or equivalent test, divided by the vehicle’s total traction power. For purposes of the preceding sentence, the term “total traction power” means the sum of the peak power from the rechargeable energy storage system and the heat engine peak power of the vehicle, except that if such storage system is the sole means by which the vehicle can be driven, the total traction power is the peak power of such storage system.\nAny vehicle with respect to which a credit is allowable under section 30D (determined without regard to subsection (c) thereof) shall not be taken into account under this section.\nExcept as provided in paragraph (5), the new qualified alternative fuel motor vehicle credit determined under this subsection is an amount equal to the applicable percentage of the incremental cost of any new qualified alternative fuel motor vehicle placed in service by the taxpayer during the taxable year.\nThe term “alternative fuel” means compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, and any liquid at least 85 percent of the volume of which consists of methanol.\nFor purposes of this subsection, the term “75/25 mixed-fuel vehicle” means a mixed-fuel vehicle which operates using at least 75 percent alternative fuel and not more than 25 percent petroleum-based fuel.\nFor purposes of this subsection, the term “90/10 mixed-fuel vehicle” means a mixed-fuel vehicle which operates using at least 90 percent alternative fuel and not more than 10 percent petroleum-based fuel.\nIn the case of a qualified vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (c) or (d) shall be allowed.\nFor purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of qualified vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after  December 31, 2005 , is at least 60,000.\nFor purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or ( o ) of section 414 shall be treated as a single manufacturer.\nFor purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.\nFor purposes of this subsection, the term “qualified vehicle” means any new qualified hybrid motor vehicle (described in subsection (d)(2)(A)) and any new advanced lean burn technology motor vehicle.\nSo much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).\nFor purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.\nThe term “motor vehicle” means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.\nThe city fuel economy with respect to any vehicle shall be measured in a manner which is substantially similar to the manner city fuel economy is measured in accordance with procedures under part 600 of subchapter Q of chapter I of title 40, Code of Federal Regulations, as in effect on the date of the enactment of this section.\nThe terms “automobile”, “passenger automobile”, “medium duty passenger vehicle”, “light truck”, and “manufacturer” have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act ( 42 U.S.C. 7521  et seq.).\nFor purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (g)).\nIn the case of a vehicle whose use is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such vehicle to the person or entity using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such vehicle (determined without regard to subsection (g)). For purposes of subsection (g), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.\nNo credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.\nThe Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit (including recapture in the case of a lease period of less than the economic life of a vehicle).\nNo credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.\nExcept as provided in paragraph (2), the Secretary shall promulgate such regulations as necessary to carry out the provisions of this section.\nThe Secretary of the Treasury, in coordination with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether a motor vehicle meets the requirements to be eligible for a credit under this section.\nThe Clean Air Act, referred to in text, is  act July 14, 1955, ch. 360 ,  69 Stat. 322 , which is classified generally to chapter 85 (§\u202f7401 et seq.) of Title 42, The Public Health and Welfare. Title II of the Act, known as the National Emissions Standards Act, is classified generally to subchapter II (§\u202f7521 et seq.) of chapter 85 of Title 42. Sections 202(i), 209(b), and 243(e)(2) of the Act are classified to sections 7521(i), 7543(b), and 7583(e)(2), respectively, of Title 42. For complete classification of this Act to the Code, see Short Title note set out under  section 7401 of Title 42  and Tables.\nThe date of the enactment of this section, referred to in subsecs. (b)(3)(B) and (h)(2), is the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nThe date of the enactment of the Energy Tax Incentives Act of 2005, referred to in subsec. (e)(2), is the date of enactment of title XIII of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\n2022—Subsec. (h)(8).  Pub. L. 117–169, §\u202f13401(i)(2)(A) , struck out “,\u2000except that no benefit shall be recaptured if such property ceases to be eligible for such credit by reason of conversion to a qualified plug-in electric drive motor vehicle” before period at end.\nSubsec. (i).  Pub. L. 117–169, §\u202f13401(i)(2)(B) , struck out subsec. (i) which related to plug-in conversion credit.\n2020—Subsec. (k)(1).  Pub. L. 116–260  substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (k)(1).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (k)(1).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (k)(1).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (h)(5)(B).  Pub. L. 113–295, §\u202f218(a) , inserted “(determined without regard to subsection (g))” before period at end.\nSubsec. (h)(8).  Pub. L. 113–295, §\u202f220(a) , substituted “vehicle), except that” for “vehicle)., except that”.\n2013—Subsec. (g)(2).  Pub. L. 112–240  amended par. (2) generally. Prior to amendment, par. (2) related to personal credit with a limitation based on amount of tax.\n2010—Subsec. (g)(2)(B)(ii).  Pub. L. 111–148, §\u202f10909(b)(2)(G) , (c), as amended by  Pub. L. 111–312 , temporarily struck out “23,” before “25D,”. See Effective and Termination Dates of 2010 Amendment note below.\n2009—Subsec. (a)(5).  Pub. L. 111–5, §\u202f1143(b) , added par. (5).\nSubsec. (d)(3)(D).  Pub. L. 111–5, §\u202f1141(b)(1) , substituted “subsection (c) thereof” for “subsection (d) thereof”.\nSubsec. (g)(2).  Pub. L. 111–5, §\u202f1144(a) , amended par. (2) generally. Prior to amendment, text read as follows: “The credit allowed under subsection (a) (after the application of paragraph (1)) for any taxable year shall not exceed the excess (if any) of—\n“(A) the regular tax liability (as defined in section 26(b)) reduced by the sum of the credits allowable under subpart A and sections 27 and 30, over\n“(B) the tentative minimum tax for the taxable year.”\nSubsec. (h)(1).  Pub. L. 111–5, §\u202f1142(b)(2) , amended par. (1) generally. Prior to amendment, text read as follows: “The term ‘motor vehicle’ has the meaning given such term by section 30(c)(2).”\nSubsec. (h)(8).  Pub. L. 111–5, §\u202f1143(c) , inserted at end “,\u2000except that no benefit shall be recaptured if such property ceases to be eligible for such credit by reason of conversion to a qualified plug-in electric drive motor vehicle.”\nSubsecs. (i) to (k).  Pub. L. 111–5, §\u202f1143(a) , added subsec. (i) and redesignated former subsecs. (i) and (j) as (j) and (k), respectively.\n2008—Subsec. (d)(3)(D).  Pub. L. 110–343  added subpar. (D).\n2005—Subsec. (g)(2)(A).  Pub. L. 109–135, §\u202f412(d) , substituted “regular tax liability (as defined in section 26(b))” for “regular tax”.\nSubsec. (h)(6).  Pub. L. 109–135, §\u202f402(j) , inserted at end “For purposes of subsection (g), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.”\nAmendment by  Pub. L. 117–169  applicable to vehicles placed in service after  Dec. 31, 2022 , see  section 13401(k)(1) of Pub. L. 117–169 , set out in an Effective Date of 2022 Amendment; Transition Rule note under  section 30D of this title .\nPub. L. 116–260, div. EE, title I, §\u202f142(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendment made by this section [amending this section] shall apply to property purchased after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f124(b) ,  Dec. 20, 2019 ,  133 Stat. 3231 , provided that:  “The amendment made by this section [amending this section] shall apply to property purchased after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40403(b) ,  Feb. 9, 2018 ,  132 Stat. 148 , provided that:  “The amendment made by this section [amending this section] shall apply to property purchased after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f193(b) ,  Dec. 18, 2015 ,  129 Stat. 3076 , provided that:  “The amendment made by this section [amending this section] shall apply to property purchased after  December 31, 2014 .”\nPub. L. 113–295, div. A, title II, §\u202f218(c) ,  Dec. 19, 2014 ,  128 Stat. 4035 , provided that:  “The amendments made by this section [amending this section and  section 30C of this title ] shall take effect as if included in the provision of the Energy Tax Incentives Act of 2005 [ Pub. L. 109–58, title XIII ] to which it relates.”\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1141(c) ,  Feb. 17, 2009 ,  123 Stat. 328 , provided that:  “The amendments made by this section [amending this section and sections 30D, 38, 1016, and 6501 of this title] shall apply to vehicles acquired after  December 31, 2009 .”\nAmendment by  section 1142(b)(2) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1143(d) ,  Feb. 17, 2009 ,  123 Stat. 332 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nAmendment by  section 1144(a) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nAmendment by  section 402(j) of Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nPub. L. 109–58, title XIII, §\u202f1341(c) ,  Aug. 8, 2005 ,  119 Stat. 1049 , provided that:  “The amendments made by this section [enacting this section and amending sections 38, 55, 1016, and 6501 of this title] shall apply to property placed in service after  December 31, 2005 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 30 percent (6 percent in the case of property of a character subject to depreciation) of the cost of any qualified alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year.\nProperty shall not be treated as qualified alternative fuel vehicle refueling property unless such property is placed in service in an eligible census tract.\nFor purposes of clause (i)(II), the term “urban area” means a census tract (as defined by the Bureau of the Census) which, according to the most recent decennial census, has been designated as an urban area by the Secretary of Commerce.\nSo much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).\nFor purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (d)).\nIn the case of any qualified alternative fuel vehicle refueling property the use of which is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such property to the person or entity using such property shall be treated as the taxpayer that placed such property in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such property (determined without regard to subsection (d)). For purposes of subsection (d), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.\nNo credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.\nNo credit shall be allowed under subsection (a) for any property if the taxpayer elects not to have this section apply to such property.\nRules similar to the rules of section 179A(e)(4) shall apply.\nFor purposes of this section, any reference to section 179A shall be treated as a reference to such section as in effect immediately before its repeal.\nIn the case of any qualified alternative fuel vehicle refueling project which satisfies the requirements of subparagraph (C), the amount of the credit determined under subsection (a) for any qualified alternative fuel vehicle refueling property of a character subject to an allowance for depreciation which is part of such project shall be equal to such amount (determined without regard to this sentence) multiplied by 5.\nFor purposes of this subsection, the term “qualified alternative fuel vehicle refueling project” means a project consisting of one or more properties that are part of a single project.\nThe requirements described in this subparagraph with respect to any qualified alternative fuel vehicle refueling project are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the construction of any qualified alternative fuel vehicle refueling property which is part of such project shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such project is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nThe Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.\nThis section shall not apply to any property placed in service after  December 31, 2032 .\nPub. L. 117–169, title I, §\u202f13704(b)(2) , (c),  Aug. 16, 2022 ,  136 Stat. 2002 , 2003, provided that, applicable to transportation fuel produced after  Dec. 31, 2024 , subsection (c)(1)(B) of this section is amended by adding at the end the following new clause (iv):\n(iv) Any transportation fuel (as defined in section 45Z(d)(5)).\nSee 2022 Amendment note below.\nSection 179A as in effect immediately before its repeal, referred to in subsec. (e)(6), means  section 179A of this title  as in effect before it was repealed by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(34)(A) , Dec, 19, 2014,  128 Stat. 4042 , effective  Dec. 19, 2014 .\n2022—Subsec. (a).  Pub. L. 117–169, §\u202f13404(b)(1) , inserted “(6 percent in the case of property of a character subject to depreciation)” after “30 percent”.\nSubsec. (b).  Pub. L. 117–169, §\u202f13404(b)(2)(A) , in introductory provisions, substituted “with respect to any single item of” for “with respect to all” and struck out “at a location” after “taxable year”.\nSubsec. (b)(1).  Pub. L. 117–169, §\u202f13404(b)(2)(B) , substituted “$100,000 in the case of any such item of property” for “$30,000 in the case of a property”.\nSubsec. (c).  Pub. L. 117–169, §\u202f13404(b)(3) , amended subsec. (c) generally. Prior to amendment, subsec. (c) related to qualified alternative fuel vehicle refueling property.\nSubsec. (c)(1)(B)(iv).  Pub. L. 117–169, §\u202f13704(b)(2) , added cl. (iv).\nSubsec. (c)(3).  Pub. L. 117–169, §\u202f13404(e) , added par. (3).\nSubsec. (f).  Pub. L. 117–169, §\u202f13404(c) , added subsec. (f). Former subsec. (f) redesignated (g), then (h).\nSubsec. (g).  Pub. L. 117–169, §\u202f13404(d) , added subsec. (g). Former subsec. (g) redesignated (h), then (i).\nPub. L. 117–169, §\u202f13404(a) , substituted “ December 31, 2032 ” for “ December 31, 2021 ”.\nSubsecs. (h), (i).  Pub. L. 117–169, §\u202f13404(c) , (d), successively redesignated subsecs. (f) and (g) as (h) and (i), respectively.\n2020—Subsec. (g).  Pub. L. 116–260  substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (g).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (e)(6), (7).  Pub. L. 115–141  redesignated par. (7) as (6) and struck out former par. (6) which related to special rule for property placed in service during 2009 and 2010.\nSubsec. (g).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (g).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (e)(1).  Pub. L. 113–295, §\u202f218(b) , amended par. (1) generally. Prior to amendment, text read as follows: “The basis of any property shall be reduced by the portion of the cost of such property taken into account under subsection (a).”\nSubsec. (e)(7).  Pub. L. 113–295, §\u202f221(a)(34)(B) , added par. (7).\nSubsec. (g).  Pub. L. 113–295, §\u202f161(a) , substituted “placed in service after  December 31, 2014 .” for “placed in service—\n“(1) in the case of property relating to hydrogen, after  December 31, 2014 , and\n“(2) in the case of any other property, after  December 31, 2013 .”\n2013—Subsec. (g)(2).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 .”.\n2010—Subsec. (g)(2).  Pub. L. 111–312  substituted “ December 31, 2011 .” for “ December 31, 2010 ”.\n2009—Subsec. (d)(2)(A).  Pub. L. 111–5, §\u202f1144(b)(2) , substituted “section 27” for “sections 27 and 30B”.\nPub. L. 111–5, §\u202f1142(b)(3) , struck out “,\u200030,” before “and 30B”.\nSubsec. (e)(6).  Pub. L. 111–5, §\u202f1123(a) , added par. (6).\n2008—Subsec. (c)(2)(C).  Pub. L. 110–343, §\u202f207(b) , added subpar. (C).\nSubsec. (g)(2).  Pub. L. 110–343, §\u202f207(a) , substituted “ December 31, 2010 ” for “ December 31, 2009 ”.\n2007—Subsec. (b).  Pub. L. 110–172, §\u202f6(b)(1) , reenacted heading without change and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “The credit allowed under subsection (a) with respect to any alternative fuel vehicle refueling property shall not exceed—”.\nSubsec. (c).  Pub. L. 110–172, §\u202f6(b)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—Except as provided in paragraph (2), the term ‘qualified alternative fuel vehicle refueling property’ has the meaning given to such term by section 179A(d), but only with respect to any fuel—\n“(A) at least 85 percent of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen, or\n“(B) any mixture of biodiesel (as defined in section 40A(d)(1)) and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene and containing at least 20 percent biodiesel.\n“(2)  Residential property .—In the case of any property installed on property which is used as the principal residence (within the meaning of section 121) of the taxpayer, paragraph (1) of section 179A(d) shall not apply.”\n2005—Subsec. (d)(2)(A).  Pub. L. 109–135, §\u202f412(d) , substituted “regular tax liability (as defined in section 26(b))” for “regular tax”.\nSubsec. (e)(2).  Pub. L. 109–135, §\u202f402(k) , inserted at end “For purposes of subsection (d), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.”\nPub. L. 117–169, title I, §\u202f13404(f) ,  Aug. 16, 2022 ,  136 Stat. 1968 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2022 . \n \n “(2)   Extension .— The amendments made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2021 .”\nAmendment by  section 13704(b)(2) of Pub. L. 117–169  applicable to transportation fuel produced after  Dec. 31, 2024 , see  section 13704(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45Z of this title .\nPub. L. 116–260, div. EE, title I, §\u202f143(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f125(b) ,  Dec. 20, 2019 ,  133 Stat. 3231 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40404(b) ,  Feb. 9, 2018 ,  132 Stat. 148 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f182(b) ,  Dec. 18, 2015 ,  129 Stat. 3072 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f161(b) ,  Dec. 19, 2014 ,  128 Stat. 4023 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nAmendment by  section 218(b) of Pub. L. 113–295  effective as if included in the provision of the Energy Tax Incentives Act of 2005,  Pub. L. 109–58, title XIII , to which such amendment relates, see  section 218(c) of Pub. L. 113–295 , set out as a note under  section 30B of this title .\nAmendment by  section 221(a)(34)(B) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title IV, §\u202f402(b) ,  Jan. 2, 2013 ,  126 Stat. 2337 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f711(b) ,  Dec. 17, 2010 ,  124 Stat. 3315 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2010 .”\nPub. L. 111–5, div. B, title I, §\u202f1123(b) ,  Feb. 17, 2009 ,  123 Stat. 325 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  section 1142(b)(3) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1144(b)(2) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 110–343, div. B, title II, §\u202f207(c) ,  Oct. 3, 2008 ,  122 Stat. 3840 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 3, 2008 ], in taxable years ending after such date.”\nPub. L. 110–172, §\u202f6(e) ,  Dec. 29, 2007 ,  121 Stat. 2481 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 41, 45J, 4041, 4042, 4082, and 6430 of this title, and enacting provisions set out as a note under  section 6430 of this title ] shall take effect as if included in the provisions of the Energy Policy Act of 2005 [ Pub. L. 109–58 ] to which they relate. \n \n “(2)   Nonapplication of exemption for off-highway business use .— The amendment made by subsection (d)(3) [amending  section 4041 of this title ] shall apply to fuel sold for use or used after the date of the enactment of this Act [ Dec. 29, 2007 ]. \n \n “(3)   Amendment made by the safetea–lu .— The amendment made by subsection (d)(2)(C)(ii) [amending  section 4082 of this title ] shall take effect as if included in section 11161 of the SAFETEA–LU [ Pub. L. 109–59 ].”\nAmendment by  section 402(k) of Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nPub. L. 109–58, title XIII, §\u202f1342(c) ,  Aug. 8, 2005 ,  119 Stat. 1051 , provided that:  “The amendments made by this section [enacting this section and amending sections 38, 55, 1016, and 6501 of this title] shall apply to property placed in service after  December 31, 2005 , in taxable years ending after such date.”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each new clean vehicle placed in service by the taxpayer during the taxable year.\nThe amount determined under this subsection with respect to any new clean vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.\nIn the case of a vehicle with respect to which the requirement described in subsection (e)(1)(A) is satisfied, the amount determined under this paragraph is $3,750.\nIn the case of a vehicle with respect to which the requirement described in subsection (e)(2)(A) is satisfied, the amount determined under this paragraph is $3,750.\nSo much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).\nFor purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.\nThe term “motor vehicle” means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.\nThe term “qualified manufacturer” means any manufacturer (within the meaning of the regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act ( 42 U.S.C. 7521  et seq.)) which enters into a written agreement with the Secretary under which such manufacturer agrees to make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) providing vehicle identification numbers and such other information related to each vehicle manufactured by such manufacturer as the Secretary may require.\nThe term “capacity” means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.\nFor purposes of paragraph (1)(G), the term “final assembly” means the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle.\nFor purposes of this section, the term “new clean vehicle” shall include any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) which meets the requirements under subparagraphs (G) and (H) of paragraph (1).\nThe requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the components contained in such battery that were manufactured or assembled in North America is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nNot later than  December 31, 2022 , the Secretary shall issue proposed guidance with respect to the requirements under this subsection.\nFor purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (c)).\nThe amount of any deduction or other credit allowable under this chapter for a vehicle for which a credit is allowable under subsection (a) shall be reduced by the amount of credit allowed under such subsection for such vehicle (determined without regard to subsection (c)).\nNo credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1).\nThe Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.\nNo credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.\nIn the case of any vehicle, the credit described in subsection (a) shall only be allowed once with respect to such vehicle, as determined based upon the vehicle identification number of such vehicle, including any vehicle with respect to which the taxpayer elects the application of subsection (g).\nNo credit shall be allowed under this section with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.\nFor purposes of this paragraph, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.\nNo credit shall be allowed under subsection (a) for a vehicle with a manufacturer’s suggested retail price in excess of the applicable limitation.\nIn the case of a van, $80,000.\nIn the case of a sport utility vehicle, $80,000.\nIn the case of a pickup truck, $80,000.\nIn the case of any other vehicle, $55,000.\nFor purposes of this paragraph, the Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles.\nSubject to such regulations or other guidance as the Secretary determines necessary, if the taxpayer who acquires a new clean vehicle elects the application of this subsection with respect to such vehicle, the credit which would (but for this subsection) be allowed to such taxpayer with respect to such vehicle shall be allowed to the eligible entity specified in such election (and not to such taxpayer).\nAn election described in paragraph (1) shall be made by the taxpayer not later than the date on which the vehicle for which the credit is allowed under subsection (a) is purchased.\nUpon determination by the Secretary that a dealer has failed to comply with the requirements described in paragraph (2), the Secretary may revoke the registration (as described in subparagraph (A) of such paragraph) of such dealer.\nThe Secretary shall establish a program to make advance payments to any eligible entity in an amount equal to the cumulative amount of the credits allowed under subsection (a) with respect to any vehicles sold by such entity for which an election described in paragraph (1) has been made.\nRules similar to the rules of section 6417(d)(6) shall apply for purposes of this paragraph.\nFor purposes of  section 1324 of title 31 , United States Code, the payments under subparagraph (A) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.\nFor purposes of this subsection, the term “dealer” means a person licensed by a State, the District of Columbia, the Commonwealth of Puerto Rico, any other territory or possession of the United States, an Indian tribal government, or any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602(m) )\u202f 1 1 \u202fSo in original. Another closing parenthesis probably should appear.  to engage in the sale of vehicles.\nFor purposes of this subsection, the term “Indian tribal government” means the recognized governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, community, component band, or component reservation, individually identified (including parenthetically) in the list published most recently as of the date of enactment of this subsection pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 ( 25 U.S.C. 5131 ).\nIn the case of any taxpayer who has made an election described in paragraph (1) with respect to a new clean vehicle and received a payment described in paragraph (2)(C) from an eligible entity, if the credit under subsection (a) would otherwise (but for this subsection) not be allowable to such taxpayer pursuant to the application of subsection (f)(10), the tax imposed on such taxpayer under this chapter for the taxable year in which such vehicle was placed in service shall be increased by the amount of the payment received by such taxpayer.\nNo credit shall be allowed under this section with respect to any vehicle placed in service after  December 31, 2032 .\nThe Clean Air Act, referred to in subsecs. (d)(1)(D), (3), (f)(7)(A), is  act July 14, 1955, ch. 360 ,  69 Stat. 322 , which is classified generally to chapter 85 (§\u202f7401 et seq.) of Title 42, The Public Health and Welfare. Title II of the Act, known as the National Emissions Standards Act, is classified generally to subchapter II (§\u202f7521 et seq.) of chapter 85 of Title 42. Section 209(b) of the Act is classified to  section 7543(b) of Title 42 . For complete classification of this Act to the Code, see Short Title note set out under  section 7401 of Title 42  and Tables.\n2022— Pub. L. 117–169, §\u202f13401(i)(1) , substituted “Clean vehicle credit” for “New qualified plug-in electric drive motor vehicles” in section catchline.\nSubsec. (a).  Pub. L. 117–169, §\u202f13401(c)(2)(A) , substituted “new clean vehicle” for “new qualified plug-in electric drive motor vehicle”.\nSubsec. (b)(1).  Pub. L. 117–169, §\u202f13401(c)(2)(B) , substituted “new clean vehicle” for “new qualified plug-in electric drive motor vehicle”.\nSubsec. (b)(2), (3).  Pub. L. 117–169, §\u202f13401(a) , added pars. (2) and (3) and struck out former pars. (2) and (3) which related to base amount and amount based on battery capacity to be used to determine amount of credit.\nSubsec. (d).  Pub. L. 117–169, §\u202f13401(c)(1)(A) , substituted “clean” for “qualified plug-in electric drive motor” in heading.\nSubsec. (d)(1).  Pub. L. 117–169, §\u202f13401(c)(1)(B)(i) , substituted “clean” for “qualified plug-in electric drive motor” in introductory provisions.\nSubsec. (d)(1)(C).  Pub. L. 117–169, §\u202f13401(c)(1)(B)(ii) , inserted “qualified” before “manufacturer”.\nSubsec. (d)(1)(F)(i).  Pub. L. 117–169, §\u202f13401(c)(1)(B)(iii)(I) , substituted “7” for “4”.\nSubsec. (d)(1)(G).  Pub. L. 117–169, §\u202f13401(b)(1) , added subpar. (G).\nSubsec. (d)(1)(H).  Pub. L. 117–169, §\u202f13401(c)(1)(B)(iii)(II) –(v), added subpar. (H).\nSubsec. (d)(1)(H)(vi).  Pub. L. 117–169, §\u202f13401(g)(2)(A) , added cl. (vi).\nSubsec. (d)(3).  Pub. L. 117–169, §\u202f13401(c)(1)(C) , substituted “Qualified manufacturer” for “Manufacturer” in heading and, in text, substituted “The term ‘qualified manufacturer’ means any manufacturer (within the meaning of the” for “The term ‘manufacturer’ has the meaning given such term in” and inserted “)\u2000which enters into a written agreement with the Secretary under which such manufacturer agrees to make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) providing vehicle identification numbers and such other information related to each vehicle manufactured by such manufacturer as the Secretary may require” before period at end.\nSubsec. (d)(5).  Pub. L. 117–169, §\u202f13401(b)(2) , added par. (5).\nSubsec. (d)(6).  Pub. L. 117–169, §\u202f13401(c)(1)(D) , added par. (6).\nSubsec. (d)(7).  Pub. L. 117–169, §\u202f13401(e)(2) , added par. (7).\nSubsec. (e).  Pub. L. 117–169, §\u202f13401(e)(1) , added subsec. (e).\nPub. L. 117–169, §\u202f13401(d) , struck out subsec. (e) which related to limitation on number of new qualified plug-in electric drive motor vehicles eligible for credit.\nSubsec. (f)(3).  Pub. L. 117–169, §\u202f13401(g)(2)(B)(i) , struck out par. (3). Text read as follows: “In the case of a vehicle the use of which is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such vehicle to the person or entity using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such vehicle (determined without regard to subsection (c)). For purposes of subsection (c), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.”\nSubsec. (f)(8).  Pub. L. 117–169, §\u202f13401(g)(2)(B)(ii) , inserted “,\u2000including any vehicle with respect to which the taxpayer elects the application of subsection (g)” before period at end.\nPub. L. 117–169, §\u202f13401(f) , added par. (8).\nSubsec. (f)(9) to (11).  Pub. L. 117–169, §\u202f13401(f) , added pars. (9) to (11).\nSubsec. (g).  Pub. L. 117–169, §\u202f13401(g)(1) , added subsec. (g) and struck out former subsec. (g) which related to credit allowed for 2- and 3-wheeled plug-in electric vehicles.\nSubsec. (h).  Pub. L. 117–169, §\u202f13401(h) , added subsec. (h).\n2020—Subsec. (g)(3)(E)(ii).  Pub. L. 116–260  substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\n2019—Subsec. (g)(3)(E)(ii).  Pub. L. 116–94  substituted “ January 1, 2021 ” for “ January 1, 2018 ”.\n2018—Subsec. (g)(3)(E)(ii).  Pub. L. 115–123  substituted “ January 1, 2018 ” for “ January 1, 2017 ”.\n2015—Subsec. (g)(3)(E).  Pub. L. 114–113  substituted “acquired—” for “acquired after  December 31, 2011 , and before  January 1, 2014 .” and added cls. (i) and (ii).\n2014—Subsec. (f)(1), (2).  Pub. L. 113–295, §\u202f209(e)(1)(A) , (B), inserted “(determined without regard to subsection (c))” before period at end.\nSubsec. (f)(3).  Pub. L. 113–295, §\u202f209(e)(2) , inserted at end “For purposes of subsection (c), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.”\n2013—Subsec. (c)(2).  Pub. L. 112–240, §\u202f104(c)(2)(I) , amended par. (2) generally. Prior to amendment, par. (2) related to personal credit with a limitation based on amount of tax.\nSubsec. (f)(2).  Pub. L. 112–240, §\u202f403(b)(1) , substituted “vehicle for which a credit is allowable under subsection (a)” for “new qualified plug-in electric drive motor vehicle” and “allowed under such subsection” for “allowed under subsection (a)”.\nSubsec. (f)(7).  Pub. L. 112–240, §\u202f403(b)(2) , substituted “A vehicle” for “A motor vehicle” in introductory provisions.\nSubsec. (g).  Pub. L. 112–240, §\u202f403(a) , added subsec. (g).\n2010—Subsec. (c)(2)(B)(ii).  Pub. L. 111–148, §\u202f10909(b)(2)(H) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “section 25D” for “sections 23 and 25D”. See Effective and Termination Dates of 2010 Amendment note below.\n2009— Pub. L. 111–5  amended section generally. Prior to amendment, section provided credit with respect to each new qualified plug-in electric drive motor vehicle placed in service and set forth provisions defining “applicable amount” and “new qualified plug-in electric drive motor vehicle” and stating limitations based on vehicle weight, the number of vehicles eligible for credit, and amount of tax liability.\nPub. L. 117–169, title I, §\u202f13401(k) ,  Aug. 16, 2022 ,  136 Stat. 1961 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by this section [amending this section and sections 30B, 38, 6213, and 6501 of this title] shall apply to vehicles placed in service after  December 31, 2022 . \n \n “(2)   Final assembly .— The amendments made by subsection (b) [amending this section] shall apply to vehicles sold after the date of enactment of this Act [ Aug. 16, 2022 ]. \n \n “(3)   Per vehicle dollar limitation and related requirements .— The amendments made by subsections (a) and (e) [amending this section] shall apply to vehicles placed in service after the date on which the proposed guidance described in paragraph (3)(B) of section 30D(e) of the Internal Revenue Code of 1986 (as added by subsection (e)) is issued by the Secretary of the Treasury (or the Secretary’s delegate) [proposed guidance issued  Apr. 17, 2023 , see 88 F.R. 23370]. \n \n “(4)   Transfer of credit .— The amendments made by subsection (g) [amending this section] shall apply to vehicles placed in service after  December 31, 2023 . \n \n “(5)   Elimination of manufacturer limitation .— The amendment made by subsection (d) [amending this section] shall apply to vehicles sold after  December 31, 2022 .”\nPub. L. 117–169, title I, §\u202f13401 ( l ),  Aug. 16, 2022 ,  136 Stat. 1962 , provided that:  \n “Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that— “(1)  after  December 31, 2021 , and before the date of enactment of this Act [ Aug. 16, 2022 ], purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and \n \n “(2)  placed such vehicle in service on or after the date of enactment of this Act, \n \n\n such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.”\nPub. L. 116–260, div. EE, title I, §\u202f144(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendment made by this section [amending this section] shall apply to vehicles acquired after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f126(b) ,  Dec. 20, 2019 ,  133 Stat. 3231 , provided that:  “The amendment made by this section [amending this section] shall apply to vehicles acquired after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40405(b) ,  Feb. 9, 2018 ,  132 Stat. 148 , provided that:  “The amendment made by this section [amending this section] shall apply to vehicles acquired after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f183(b) ,  Dec. 18, 2015 ,  129 Stat. 3073 , provided that:  “The amendments made by this section [amending this section] shall apply to vehicles acquired after  December 31, 2014 .”\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by  section 104(c)(2)(I) of Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nPub. L. 112–240, title IV, §\u202f403(c) ,  Jan. 2, 2013 ,  126 Stat. 2338 , provided that:  “The amendments made by this section [amending this section] shall apply to vehicles acquired after  December 31, 2011 .”\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–5  applicable to vehicles acquired after  Dec. 31, 2009 , see  section 1141(c) of Pub. L. 111–5 , set out as a note under  section 30B of this title .\nSection applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nPub. L. 117–169, title I, §\u202f13401(j) ,  Aug. 16, 2022 ,  136 Stat. 1961 , provided that:  “Beginning in fiscal year 2023 and each fiscal year thereafter, the portion of any credit allowed to an eligible entity (as defined in section 30D(g)(2) of the Internal Revenue Code of 1986) pursuant to an election made under section 30D(g) of the Internal Revenue Code of 1986 that is direct spending shall be increased by 6.0445 percent.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The amount withheld as tax under chapter 24 shall be allowed to the recipient of the income as a credit against the tax imposed by this subtitle.\nThe amount so withheld during any calendar year shall be allowed as a credit for the taxable year beginning in such calendar year. If more than one taxable year begins in a calendar year, such amount shall be allowed as a credit for the last taxable year so beginning.\nThe Secretary may prescribe regulations providing for the crediting against the tax imposed by this subtitle of the amount determined by the taxpayer or the Secretary to be allowable under section 6413(c) as a special refund of tax imposed on wages. The amount allowed as a credit under such regulations shall, for purposes of this subtitle, be considered an amount withheld at source as tax under section 3402.\nAny amount to which paragraph (1) applies shall be allowed as a credit for the taxable year beginning in the calendar year during which the wages were received. If more than one taxable year begins in the calendar year, such amount shall be allowed as a credit for the last taxable year so beginning.\nAny credit allowed by subsection (a) for any amount withheld under section 3406 shall be allowed for the taxable year of the recipient of the income in which the income is received.\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f714(j)(2) , substituted “as tax under chapter 24” for “under section 3402 as tax on the wages of any individual”.\n1983— Pub. L. 98–67  added subsec. (c) and repealed amendments made by  Pub. L. 97–248 . See 1982 Amendment note below.\nPub. L. 97–448  amended subsec. (d) generally. See 1982 Amendment note below.\n1982— Pub. L. 97–248 , as amended by  Pub. L. 97–354  and  Pub. L. 97–448 , amended section generally, applicable to payments of interest, dividends, and patronage dividends paid or credited after  June 30, 1983 . Section 102(a), (b) of  Pub. L. 98–67, title I ,  Aug. 5, 1983 ,  97 Stat. 369 , repealed subtitle A (§§\u202f301–308) of title III of  Pub. L. 97–248  as of the close of  June 30, 1983 , and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted.\n1976—Subsec. (b)(1).  Pub. L. 94–455  struck out “or his delegate” after “The Secretary” and “(or his delegate)” after “taxpayer or the Secretary”.\nPub. L. 98–369, div. A, title VII, §\u202f715 ,  July 18, 1984 ,  98 Stat. 966 , provided that:  “Any amendment made by this subtitle [subtitle A (§§\u202f711–715) of title VII of  Pub. L. 98–369 , see Tables for classification] shall take effect as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ] to which such amendment relates.”\nPub. L. 98–67, title I, §\u202f110 ,  Aug. 5, 1983 ,  97 Stat. 384 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this title [enacting sections 3406 and 6705 of this title, amending this section and sections 274, 275, 643, 661, 3402, 3403, 3502, 3507, 6011, 6013, 6015, 6042, 6044, 6049, 6051, 6365, 6401, 6413, 6652, 6653, 6654, 6676, 6678, 6682, 7205, 7215, 7431, 7654, and 7701 of this title, repealing sections 3451 to 3456 of this title, enacting provisions set out as notes under sections 1, 3451, and 6011 of this title, and repealing provisions set out as a note under  section 3451 of this title ] shall apply with respect to payments made after  December 31, 1983 . \n \n “(b)   Section  102.— The amendments made by section 102 [amending this section and sections 274, 275, 643, 661, 3403, 3502, 3507, 6013, 6015, 6042, 6044, 6049, 6051, 6365, 6401, 6413, 6654, 6682, 7205, 7215, 7654, and 7701 of this title, repealing sections 3451 to 3456 of this title, enacting provisions set out as a note under  section 3451 of this title , and repealing provisions set out as a note under  section 3451 of this title ] shall take effect as of the close of  June 30, 1983 . \n \n “(c)   Sections  104(b)  and  107.— The amendments made by sections 104(b) and 107 [amending sections 6682, 7205, and 7431 of this title] shall take effect on the date of the enactment of this Act [ Aug. 5, 1983 ].”\nPub. L. 97–448, title III, §\u202f311(d) ,  Jan. 12, 1983 ,  96 Stat. 2412 , provided that:  “The amendments made by section 306 [amending this section and sections 48, 55, 263, 291, 312, 338, 401, 501, 1232, 6038A, 6226, 6228, 6679, and 7701 of this title, enacting provisions set out as notes under sections 338 and 1232 of this title, and amending provisions set out as notes under sections 56, 72, 101, 103, 168, 302, 311, 338, 415, 907, and 5701 of this title] shall take effect as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ] to which such amendments relate.”\nPub. L. 98–369, div. A, title VII, §\u202f701 ,  July 18, 1984 ,  98 Stat. 942 , provided that:  “For purposes of applying the amendments made by any title of this Act [see Tables for classification] other than this title, the provisions of this title shall be treated as having been enacted immediately before the provisions of such other titles.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the credit percentage of so much of the taxpayer’s earned income for the taxable year as does not exceed the earned income amount.\nThe credit percentage and the phaseout percentage shall be determined as follows: \n \n \n \n \n \n \n \n In the case of an eligible individual with: The credit percentage is: The phaseout percentage is: \n \n \n 1 qualifying child 34 15.98 \n 2 qualifying children 40 21.06 \n 3 or more qualifying children 45 21.06 \n No qualifying children 7.65 \u20007.65\nSubject to subparagraph (B), the earned income amount and the phaseout amount shall be determined as follows: \n \n \n \n \n \n \n \n In the case of an eligible individual with: The earned income amount is: The phaseout amount is: \n \n \n 1 qualifying child $6,330 $11,610 \n 2 or more qualifying children $8,890 $11,610 \n No qualifying children $4,220 \u2000$5,280\nIn the case of a joint return filed by an eligible individual and such individual’s spouse, the phaseout amount determined under subparagraph (A) shall be increased by $5,000.\nIf an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall not be treated as an eligible individual for any taxable year of such individual beginning in such calendar year.\nThe term “eligible individual” does not include any individual who claims the benefits of section 911 (relating to citizens or residents living abroad) for the taxable year.\nThe term “eligible individual” shall not include any individual who is a nonresident alien individual for any portion of the taxable year unless such individual is treated for such taxable year as a resident of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013.\nThe term “qualifying child” means a qualifying child of the taxpayer (as defined in section 152(c), determined without regard to paragraph (1)(D) thereof and section 152(e)).\nThe term “qualifying child” shall not include an individual who is married as of the close of the taxpayer’s taxable year unless the taxpayer is entitled to a deduction under section 151 for such taxable year with respect to such individual (or would be so entitled but for section 152(e)).\nFor purposes of subparagraph (A), the requirements of section 152(c)(1)(B) shall be met only if the principal place of abode is in the United States.\nA qualifying child shall not be taken into account under subsection (b) unless the taxpayer includes the name, age, and TIN of the qualifying child on the return of tax for the taxable year.\nThe Secretary may prescribe other methods for providing the information described in clause (i).\nFor purposes of paragraphs (1)(A)(ii)(I) and (3)(C), the principal place of abode of a member of the Armed Forces of the United States shall be treated as in the United States during any period during which such member is stationed outside the United States while serving on extended active duty with the Armed Forces of the United States. For purposes of the preceding sentence, the term “extended active duty” means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.\nIn the case of an individual who is married, this section shall apply only if a joint return is filed for the taxable year under section 6013.\nExcept as provided in subparagraph (B), marital status shall be determined under section 7703(a).\nExcept in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months.\nThe amount of the credit allowed by this section shall be determined under tables prescribed by the Secretary.\nNo credit shall be allowed under subsection (a) for the taxable year if the aggregate amount of disqualified income of the taxpayer for the taxable year exceeds $10,000.\nIf any dollar amount in subsection (b)(2)(A) (after being increased under subparagraph (B) thereof), after being increased under paragraph (1), is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10.\nIf the dollar amount in subsection (i)(1), after being increased under paragraph (1), is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.\nNo credit shall be allowed under this section for any taxable year in the disallowance period.\nIn the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit.\nSolely for purposes of subsections (c)(1)(E) and (c)(3)(D), a taxpayer identification number means a social security number issued to an individual by the Social Security Administration (other than a social security number issued pursuant to clause (II) (or that portion of clause (III) that relates to clause (II)) of section 205(c)(2)(B)(i) of the Social Security Act) on or before the due date for filing the return for the taxable year.\nSubsection (c)(1)(A)(ii)(II) shall be applied by substituting “the applicable minimum age” for “age 25”.\nFor purposes of this paragraph, the term “specified student” means, with respect to any taxable year, an individual who is an eligible student (as defined in section 25A(b)(3)) during at least 5 calendar months during the taxable year.\nFor purposes of this paragraph, the term “qualified homeless youth” means, with respect to any taxable year, an individual who certifies, in a manner as provided by the Secretary, that such individual is either an unaccompanied youth who is a homeless child or youth, or is unaccompanied, at risk of homelessness, and self-supporting.\nSubsection (c)(1)(A)(ii)(II) shall be applied without regard to the phrase “but not attained age 65”.\nThe table contained in subsection (b)(1) shall be applied by substituting “15.3” for “7.65” each place it appears therein.\nSubsection (j) shall not apply to any dollar amount specified in this paragraph.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Social Security Act, referred to in subsecs. (c)(2)(B)(v), (m), and (n)(1)(D), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Parts A, B, and E of title IV of the Act are classified generally to parts A (§\u202f601 et seq.), B (§\u202f620 et seq.), and E (§\u202f670 et seq.), respectively, of subchapter IV of chapter 7 of Title 42, The Public Health and Welfare. Sections 205(c)(2)(B)(i) and 407(d)(4), (7) of the Act are classified to sections 405(c)(2)(B)(i) and 607(d)(4), (7), respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe United States Housing Act of 1937, referred to in subsec. ( l )(1), is  act Sept. 1, 1937, ch. 896 , as revised generally by  Pub. L. 93–383, title II, §\u202f201(a) ,  Aug. 22, 1974 ,  88 Stat. 653 , which is classified generally to chapter 8 (§\u202f1437 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note under  section 1437 of Title 42  and Tables.\nThe Housing Act of 1949, referred to in subsec. ( l )(2), is  act July 15, 1949, ch. 338 ,  63 Stat. 413 . Title V of the Act is classified generally to subchapter III (§\u202f1471 et seq.) of chapter 8A of Title 42. For complete classification of this Act to the Code, see Short Title note set out under  section 1441 of Title 42  and Tables.\nSection 101 of the Housing and Urban Development Act of 1965, referred to in subsec. ( l )(3), is  section 101 of Pub. L. 89–117 , title I,  Aug. 10, 1965 ,  79 Stat. 451 , which enacted  section 1701s of Title 12 , Banks and Banking, and amended sections 1451 and 1465 of Title 42.\nSections 221(d)(3), 235, and 236 of the National Housing Act, referred to in subsec. ( l )(4), are classified to sections 1715 l (d)(3), 1715z, and 1715z–1, respectively, of Title 12.\nThe Food and Nutrition Act of 2008, referred to in subsec. ( l )(5), is  Pub. L. 88–525 ,  Aug. 31, 1964 ,  78 Stat. 703 , which is classified generally to chapter 51 (§\u202f2011 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under  section 2011 of Title 7  and Tables.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nA prior section 32 was renumbered  section 33 of this title .\n2021—Subsec. (c)(1)(A).  Pub. L. 117–2, §\u202f9623(b)(1) , struck out concluding provisions which read as follows: “For purposes of the preceding sentence, marital status shall be determined under section 7703.”\nSubsec. (c)(1)(E)(ii).  Pub. L. 117–2, §\u202f9623(b)(2) , struck out “(within the meaning of section 7703)” after “is married”.\nSubsec. (c)(1)(F).  Pub. L. 117–2, §\u202f9622(a) , struck out heading and text of subpar. (F). Text read as follows: “No credit shall be allowed under this section to any eligible individual who has one or more qualifying children if no qualifying child of such individual is taken into account under subsection (b) by reason of paragraph (3)(D).”\nSubsec. (d).  Pub. L. 117–2, §\u202f9623(a) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsec. (d)(1).  Pub. L. 117–2, §\u202f9623(b)(3) , struck out “(within the meaning of section 7703)” after “is married”.\nSubsec. (i)(1).  Pub. L. 117–2, §\u202f9624(a) , substituted “$10,000” for “$2,200”.\nSubsec. (j)(1).  Pub. L. 117–2, §\u202f9624(b)(1) , inserted “(2021 in the case of the dollar amount in subsection (i)(1))” after “2015” in introductory provisions.\nSubsec. (j)(1)(B)(i).  Pub. L. 117–2, §\u202f9624(b)(2)(A) , substituted “subsection (b)(2)(A)” for “subsections (b)(2)(A) and (i)(1)”.\nSubsec. (j)(1)(B)(iii).  Pub. L. 117–2, §\u202f9624(b)(2)(B) –(4), added cl. (iii).\nSubsec. (n).  Pub. L. 117–2, §\u202f9621(a) , added subsec. (n).\n2018—Subsec. (b)(2)(B).  Pub. L. 115–141, §\u202f101(a)(1) , struck out cl. (i) designation and heading and struck out cls. (ii) and (iii) which related to inflation adjustment for taxable years after 2015 and application of rounding provisions in subsec. (j)(2)(A) of this section, respectively.\nSubsec. (j)(1).  Pub. L. 115–141, §\u202f101(a)(2)(A) , substituted “after 2015” for “after 1996” in introductory provisions.\nSubsec. (j)(1)(B).  Pub. L. 115–141, §\u202f101(a)(2)(B) , inserted “by substituting in subparagraph (A)(ii) thereof” after “,\u2000determined” in introductory provisions.\nSubsec. (j)(1)(B)(i).  Pub. L. 115–141, §\u202f101(a)(2)(C) , struck out “by substituting” after “(i)(1),” and “in subparagraph (A)(ii) thereof” after “\u202f‘calendar year 2016’\u202f”.\nSubsec. (j)(1)(B)(ii).  Pub. L. 115–141, §\u202f101(a)(2)(D) , substituted “$5,000 amount in subsection (b)(2)(B), ‘calendar year 2008’ for ‘calendar year 2016’\u202f” for “$3,000 amount in subsection (b)(2)(B)(iii), by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) of such section 1”.\nSubsec. ( l ).  Pub. L. 115–141, §\u202f401(b)(4) , struck out “,\u2000and any payment made to such individual (or such spouse) by an employer under section 3507,” after “reason of this section” in concluding provisions.\n2017—Subsecs. (b)(2)(B)(ii)(II), (j)(1)(B)(i), (ii).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2015—Subsec. (b)(1).  Pub. L. 114–113, §\u202f103(a) , amended par. (1) generally. Prior to amendment, par. (1) provided credit and phaseout percentages for eligible individuals with 1, 2 or more, or no qualifying children.\nSubsec. (b)(2)(B).  Pub. L. 114–113, §\u202f103(b) , amended subpar. (B) generally. Prior to amendment, text read as follows: “In the case of a joint return filed by an eligible individual and such individual’s spouse, the phaseout amount determined under subparagraph (A) shall be increased by $3,000.”\nSubsec. (b)(3).  Pub. L. 114–113, §\u202f103(c) , struck out par. (3) which provided for increased credit percentage for taxpayers with 3 or more qualifying children and reduction of marriage penalty in taxable years beginning after 2008 and before 2018, with adjustment for inflation.\nSubsec. (m).  Pub. L. 114–113, §\u202f204(a) , inserted “on or before the due date for filing the return for the taxable year” before period at end.\n2014—Subsec. (b)(1).  Pub. L. 113–295, §\u202f221(a)(3)(A) , struck out subpar. (A) designation, heading “In general”, and introductory provisions “In the case of taxable years beginning after 1995:” before the table and struck out subpars. (B) and (C) which related to transitional percentages for 1995 and transitional percentages for 1994, respectively, and realigned margins.\nSubsec. (b)(2)(B).  Pub. L. 113–295, §\u202f221(a)(3)(B) , substituted “increased by $3,000.” for “increased by—\n“(i) $1,000 in the case of taxable years beginning in 2002, 2003, and 2004,\n“(ii) $2,000 in the case of taxable years beginning in 2005, 2006, and 2007, and\n“(iii) $3,000 in the case of taxable years beginning after 2007.”\nSubsec. (b)(3)(B)(ii).  Pub. L. 113–295, §\u202f206(a) , substituted “after 2009” for “in 2010” in introductory provisions.\n2013—Subsec. (b)(3).  Pub. L. 112–240  substituted “for certain years” for “2009, 2010, 2011, and 2012” in heading and “after 2008 and before 2018” for “in 2009, 2010, 2011, or 2012” in introductory provisions.\n2010—Subsec. (b)(3).  Pub. L. 111–312  substituted “2009, 2010, 2011, and 2012” for “2009 and 2010” in heading and “,\u20002010, 2011, or 2012” for “or 2010” in introductory provisions.\nSubsec. (g).  Pub. L. 111–226  struck out subsec. (g). Text read as follows:\n“(1)  Recapture of excess advance payments .—If any payment is made to the individual by an employer under section 3507 during any calendar year, then the tax imposed by this chapter for the individual’s last taxable year beginning in such calendar year shall be increased by the aggregate amount of such payments.\n“(2)  Reconciliation of payments advanced and credit allowed .—Any increase in tax under paragraph (1) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit (other than the credit allowed by subsection (a)) allowable under this part.”\n2009—Subsec. (b)(3).  Pub. L. 111–5  added par. (3).\n2008—Subsec. (c)(2)(B)(vi).  Pub. L. 110–245  amended cl. (vi) generally. Prior to amendment, cl. (vi) read as follows: “in the case of any taxable year ending—\n“(I) after the date of the enactment of this clause, and\n“(II) before  January 1, 2008 ,\na taxpayer may elect to treat amounts excluded from gross income by reason of section 112 as earned income.”\nSubsec. ( l )(5).  Pub. L. 110–246, §\u202f4002(b)(1)(B) , (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977”.\n2006—Subsec. (c)(2)(B)(vi)(II).  Pub. L. 109–432  substituted “2008” for “2007”.\n2005—Subsec. (c)(2)(B)(vi)(II).  Pub. L. 109–135  substituted “2007” for “2006”.\n2004—Subsec. (c)(1)(C) to (G).  Pub. L. 108–311, §\u202f205(b)(1) , redesignated subpars. (D) to (G) as (C) to (F), respectively, and struck out former subpar. (C) which related to 2 or more claiming qualifying child.\nSubsec. (c)(2)(B)(vi).  Pub. L. 108–311, §\u202f104(b) , added cl. (vi).\nSubsec. (c)(3).  Pub. L. 108–311, §\u202f205(a) , amended par. (3) generally, substituting subpars. (A) to (D) for former subpars. (A) to (E), relating to qualifying child in general, relationship test, age requirements, identification requirements, and place of abode requirements.\nSubsec. (c)(4).  Pub. L. 108–311, §\u202f205(b)(2) , substituted “(3)(C)” for “(3)(E)”.\nSubsec. (m).  Pub. L. 108–311, §\u202f205(b)(3) , substituted “(c)(1)(E)” for “(c)(1)(F)”.\n2002—Subsec. (g)(2).  Pub. L. 107–147  substituted “part” for “subpart”.\n2001—Subsec. (a)(2)(B).  Pub. L. 107–16, §\u202f303(d)(1) , struck out “modified” before “adjusted gross income”.\nSubsec. (b)(2).  Pub. L. 107–16, §\u202f303(a)(1) , reenacted par. heading without change, designated existing provisions as subpar. (A), inserted subpar. heading, substituted “Subject to subparagraph (B), the earned” for “The earned”, and added subpar. (B).\nSubsec. (c)(1)(C).  Pub. L. 107–16, §\u202f303(f) , amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “If 2 or more individuals would (but for this subparagraph and after application of subparagraph (B)) be treated as eligible individuals with respect to the same qualifying child for taxable years beginning in the same calendar year, only the individual with the highest modified adjusted gross income for such taxable years shall be treated as an eligible individual with respect to such qualifying child.”\nSubsec. (c)(2)(A)(i).  Pub. L. 107–16, §\u202f303(b) , inserted “,\u2000but only if such amounts are includible in gross income for the taxable year” after “other employee compensation”.\nSubsec. (c)(3)(A)(ii).  Pub. L. 107–16, §\u202f303(e)(2)(B) , struck out “except as provided in subparagraph (B)(iii),” before “who has”.\nSubsec. (c)(3)(B)(i).  Pub. L. 107–16, §\u202f303(e)(1) , reenacted heading, introductory provisions, and subcl. (III) of cl. (i) without change and amended subcls. (I) and (II) generally. Prior to amendment, subcls. (I) and (II) read as follows:\n“(I) a son or daughter of the taxpayer, or a descendant of either,\n“(II) a stepson or stepdaughter of the taxpayer, or.”\nSubsec. (c)(3)(B)(iii).  Pub. L. 107–16, §\u202f303(e)(2)(A) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of clause (i)(III), the term ‘eligible foster child’ means an individual not described in clause (i)(I) or (II) who—\n“(I) is a brother, sister, stepbrother, or stepsister of the taxpayer (or a descendant of any such relative) or is placed with the taxpayer by an authorized placement agency,\n“(II) the taxpayer cares for as the taxpayer’s own child, and\n“(III) has the same principal place of abode as the taxpayer for the taxpayer’s entire taxable year.”\nSubsec. (c)(3)(E).  Pub. L. 107–16, §\u202f303(h) , substituted “subparagraph (A)(ii)” for “subparagraphs (A)(ii) and (B)(iii)(II)”.\nSubsec. (c)(5).  Pub. L. 107–16, §\u202f303(d)(2)(A) , struck out heading and text of par. (5), which defined “modified adjusted gross income” as meaning adjusted gross income without regard to certain described amounts and increased by certain described amounts.\nSubsec. (f)(2)(B).  Pub. L. 107–16, §\u202f303(d)(2)(B) , struck out “modified” before “adjusted gross income” in two places.\nSubsec. (h).  Pub. L. 107–16, §\u202f303(c) , struck out heading and text of subsec. (h). Text read as follows: “The credit allowed under this section for the taxable year shall be reduced by the amount of tax imposed by section 55 (relating to alternative minimum tax) with respect to such taxpayer for such taxable year.”\nSubsec. (j)(1)(B).  Pub. L. 107–16, §\u202f303(a)(2) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 1995’ for ‘calendar year 1992’ in subparagraph (B) thereof.”\nSubsec. (j)(2)(A).  Pub. L. 107–16, §\u202f303(a)(3) , substituted “subsection (b)(2)(A) (after being increased under subparagraph (B) thereof)” for “subsection (b)(2)”.\nSubsec. (n).  Pub. L. 107–16, §\u202f201(c)(3) , struck out heading and text of subsec. (n), which had increased credit allowable under this section in the case of a taxpayer with respect to whom a child tax credit is allowed under section 24(a), described amount of increase, and set forth provisions relating to coordination with other credits allowable under this part.\n1999—Subsec. (c)(3)(B)(iii).  Pub. L. 106–170  added subcl. (I) and redesignated former subcls. (I) and (II) as (II) and (III), respectively.\n1998—Subsec. (c)(1)(F).  Pub. L. 105–206, §\u202f6021(a) , added introductory provisions and struck out former introductory provisions which read as follows: “The term ‘eligible individual’ does not include any individual who does not include on the return of tax for the taxable year—”.\nSubsec. (c)(1)(G).  Pub. L. 105–206, §\u202f6021(b)(2) , added subpar. (G).\nSubsec. (c)(2)(B)(v).  Pub. L. 105–206, §\u202f6010(p)(2) , inserted “shall be taken into account” before “,\u2000but only”.\nSubsec. (c)(3)(A)(ii) to (iv).  Pub. L. 105–206, §\u202f6021(b)(3) , inserted “and” at end of cl. (ii), substituted a period for “,\u2000and” at end of cl. (iii), and struck out cl. (iv) which read as follows: “with respect to whom the taxpayer meets the identification requirements of subparagraph (D)”.\nSubsec. (c)(3)(D)(i).  Pub. L. 105–206, §\u202f6021(b)(1) , reenacted heading without change and amended text of cl. (i) generally. Prior to amendment, text read as follows: “The requirements of this subparagraph are met if the taxpayer includes the name, age, and TIN of each qualifying child (without regard to this subparagraph) on the return of tax for the taxable year.”\nSubsec. (c)(5)(A).  Pub. L. 105–206, §\u202f6010(p)(1)(A) , inserted “and increased by the amounts described in subparagraph (C)” before period at end.\nSubsec. (c)(5)(B).  Pub. L. 105–206, §\u202f6010(p)(1)(B) , (C), inserted “or” at end of cl. (iii) and substituted cl. (iv)(III) and concluding provisions for former cls. (iv)(III), (v), (vi), and concluding provisions which read as follows:\n“(III) other trades or businesses\n“(v) interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, and\n“(vi) amounts received as a pension or annuity, and any distributions or payments received from an individual retirement plan, by the taxpayer during the taxable year to the extent not included in gross income.\nFor purposes of clause (iv), there shall not be taken into account items which are attributable to a trade or business which consists of the performance of services by the taxpayer as an employee. Clause (vi) shall not include any amount which is not includible in gross income by reason of section 402(c), 403(a)(4), 403(b), 408(d)(3), (4), or (5), or 457(e)(10).”\nSubsec. (c)(5)(C).  Pub. L. 105–206, §\u202f6010(p)(1)(C) , added subpar. (C).\nSubsecs. (m), (n).  Pub. L. 105–206, §\u202f6003(b) , redesignated subsec. (m), relating to supplemental child credit, as (n) and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—In the case of a taxpayer with respect to whom a credit is allowed under section 24 for the taxable year, there shall be allowed as a credit under this section an amount equal to the supplemental child credit (if any) determined for such taxpayer for such taxable year under paragraph (2). Such credit shall be in addition to the credit allowed under subsection (a).\n“(2)  Supplemental child credit .—For purposes of this subsection, the supplemental child credit is an amount equal to the excess (if any) of—\n“(A) the amount determined under section 24(d)(1)(A), over\n“(B) the amount determined under section 24(d)(1)(B).\nThe amounts referred to in subparagraphs (A) and (B) shall be determined as if section 24(d) applied to all taxpayers.\n“(3)  Coordination with section 24 .—The amount of the credit under section 24 shall be reduced by the amount of the credit allowed under this subsection.”\n1997—Subsec. (c)(2)(B)(v).  Pub. L. 105–34, §\u202f1085(c) , added cl. (v).\nSubsec. (c)(4).  Pub. L. 105–34, §\u202f312(d)(2) , struck out “(as defined in section 1034(h)(3)” after “serving on extended active duty” and inserted at end “For purposes of the preceding sentence, the term ‘extended active duty’ means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.”\nSubsec. (c)(5)(B).  Pub. L. 105–34, §\u202f1085(d)(4) , inserted at end of concluding provisions “Clause (vi) shall not include any amount which is not includible in gross income by reason of section 402(c), 403(a)(4), 403(b), 408(d)(3), (4), or (5), or 457(e)(10).”\nSubsec. (c)(5)(B)(iv).  Pub. L. 105–34, §\u202f1085(b) , substituted “75 percent” for “50 percent” in introductory provisions.\nSubsec. (c)(5)(B)(v), (vi).  Pub. L. 105–34, §\u202f1085(d)(1) –(3), added cls. (v) and (vi).\nSubsec. (k).  Pub. L. 105–34, §\u202f1085(a)(1) , added subsec. (k). Former subsec. (k) redesignated ( l ).\nSubsec. ( l ).  Pub. L. 105–34, §\u202f1085(a)(1) , redesignated subsec. (k) as ( l ). Former subsec. ( l ) redesignated (m).\nSubsec. (m).  Pub. L. 105–34, §\u202f1085(a)(1) , redesignated subsec. ( l ) as (m) relating to identification numbers.\nPub. L. 105–34, §\u202f101(b) , added subsec. (m) relating to supplemental child credit.\n1996—Subsec. (a)(2)(B).  Pub. L. 104–193, §\u202f910(a) , inserted “modified” before “adjusted gross income”.\nSubsec. (b)(2).  Pub. L. 104–193, §\u202f909(a)(3) , reenacted heading without change and amended text generally. Prior to amendment, text consisted of subpars. (A) and (B) setting out tables for determining the earned income amount for taxable years beginning after 1994 and for taxable years beginning in 1994.\nSubsec. (c)(1)(C).  Pub. L. 104–193, §\u202f910(a) , inserted “modified” before “adjusted gross income”.\nSubsec. (c)(1)(F).  Pub. L. 104–193, §\u202f451(a) , added subpar. (F).\nSubsec. (c)(5).  Pub. L. 104–193, §\u202f910(b) , added par. (5).\nSubsec. (f)(2)(B).  Pub. L. 104–193, §\u202f910(a) , inserted “modified” before “adjusted gross income” in two places.\nSubsec. (i)(1).  Pub. L. 104–193, §\u202f909(a)(1) , substituted “$2,200” for “$2,350”.\nSubsec. (i)(2).  Pub. L. 104–193, §\u202f909(b) , added subpars. (D) and (E) and concluding provisions.\nSubsec. (j).  Pub. L. 104–193, §\u202f909(a)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—In the case of any taxable year beginning after 1994, each dollar amount contained in subsection (b)(2)(A) shall be increased by an amount equal to—\n“(A) such dollar amount, multiplied by\n“(B) the cost-of-living adjustment determined under section 1(f)(3), for the calendar year in which the taxable year begins, by substituting ‘calendar year 1993’ for ‘calendar year 1992’.\n“(2)  Rounding .—If any dollar amount after being increased under paragraph (1) is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10 (or, if such dollar amount is a multiple of $5, such dollar amount shall be increased to the next higher multiple of $10).”\nSubsec. ( l ).  Pub. L. 104–193, §\u202f451(b) , added subsec. ( l ).\n1995—Subsecs. (i) to (k).  Pub. L. 104–7  added subsec. (i) and redesignated former subsecs. (i) and (j) as (j) and (k), respectively.\n1994—Subsec. (c)(1)(E).  Pub. L. 103–465, §\u202f722(a) , added subpar. (E).\nSubsec. (c)(2)(B)(iv).  Pub. L. 103–465, §\u202f723(a) , added cl. (iv).\nSubsec. (c)(3)(D)(i).  Pub. L. 103–465, §\u202f742(a) , amended heading and text of cl. (i) generally. Prior to amendment, text read as follows: “The requirements of this subparagraph are met if—\n“(I) the taxpayer includes the name and age of each qualifying child (without regard to this subparagraph) on the return of tax for the taxable year, and\n“(II) in the case of an individual who has attained the age of 1 year before the close of the taxpayer’s taxable year, the taxpayer includes the taxpayer identification number of such individual on such return of tax for such taxable year.”\nSubsec. (c)(4).  Pub. L. 103–465, §\u202f721(a) , added par. (4).\n1993—Subsec. (a).  Pub. L. 103–66, §\u202f13131(a) , amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the sum of—\n“(1) the basic earned income credit, and\n“(2) the health insurance credit.”\nSubsec. (b).  Pub. L. 103–66, §\u202f13131(a) , substituted “Percentages and amounts” for “Computation of credit” in heading and amended text generally. Prior to amendment, text related to method of computation of both earned income credit and health insurance credit.\nSubsec. (c)(1)(A).  Pub. L. 103–66, §\u202f13131(b) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘eligible individual’ means any individual who has a qualifying child for the taxable year.”\nSubsec. (c)(3)(D)(ii).  Pub. L. 103–66, §\u202f13131(d)(1) , redesignated cl. (iii) as (ii), substituted “clause (i)” for “clause (i) or (ii)”, and struck out heading and text of former cl. (ii). Text read as follows: “In the case of any taxpayer with respect to which the health insurance credit is allowed under subsection (a)(2), the Secretary may require a taxpayer to include an insurance policy number or other adequate evidence of insurance in addition to any information required to be included in clause (i).”\nSubsec. (i)(1).  Pub. L. 103–66, §\u202f13131(c)(1) , added par. (1) and struck out text and heading of former par. (1). Text read as follows: “In the case of any taxable year beginning after the applicable calendar year, each dollar amount referred to in paragraph (2)(B) shall be increased by an amount equal to—\n“(A) such dollar amount, multiplied by\n“(B) the cost-of-living adjustment determined under section 1(f)(3), for the calendar year in which the taxable year begins, by substituting ‘calendar year 1984’ for ‘calendar year 1989’ in subparagraph (B) thereof.”\nSubsec. (i)(2), (3).  Pub. L. 103–66, §\u202f13131(c) , redesignated par. (3) as (2) and struck out former par. (2) which defined terms for purposes of the inflation adjustment in par. (1).\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f11111(a) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “In the case of an eligible individual, there is allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 14 percent of so much of the earned income for the taxable year as does not exceed $5,714.”\nSubsec. (b).  Pub. L. 101–508, §\u202f11111(a) , substituted heading for one which read “Limitation” and amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “The amount of the credit allowable to a taxpayer under subsection (a) for any taxable year shall not exceed the excess (if any) of—\n“(1) the maximum credit allowable under subsection (a) to any taxpayer, over\n“(2) 10 percent of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds $9,000.\nIn the case of any taxable year beginning in 1987, paragraph (2) shall be applied by substituting ‘$6,500’ for ‘$9,000’.”\nSubsec. (c).  Pub. L. 101–508, §\u202f11111(a) , amended subsec. (c) generally, inserting “and special rules” in heading and substituting present provisions for provisions defining “eligible individual” and “earned income”.\nSubsec. (i)(1)(B).  Pub. L. 101–508, §\u202f11101(d)(1)(B) , substituted “1989” for “1987”.\nSubsec. (i)(2)(A).  Pub. L. 101–508, §\u202f11111(e)(1) , (2), substituted “clause (i) of subparagraph (B)” for “clause (i) or (ii) of subparagraph (B)” in cl. (i) and “clause (ii)” for “clause (iii)” in cl. (ii).\nSubsec. (i)(2)(B).  Pub. L. 101–508, §\u202f11111(e)(3) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The dollar amounts referred to in this subparagraph are—\n“(i) the $5,714 amount contained in subsection (a),\n“(ii) the $6,500 amount contained in the last sentence of subsection (b), and\n“(iii) the $9,000 amount contained in subsection (b)(2).”\nSubsec. (j).  Pub. L. 101–508, §\u202f11111(b) , added subsec. (j).\n1988—Subsec. (h).  Pub. L. 100–647, §\u202f1007(g)(12) , struck out “for taxpayers other than corporations” after “alternative minimum tax”.\nSubsec. (i)(3).  Pub. L. 100–647, §\u202f1001(c) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be rounded to the nearest multiple of $10 (or, if such increase is a multiple of $5, such increase shall be increased to the next higher multiple of $10).”\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f111(a) , substituted “14 percent” for “11 percent” and “$5,714” for “$5,000”.\nSubsec. (b).  Pub. L. 99–514, §\u202f111(b) , amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “The amount of the credit allowable to a taxpayer under subsection (a) for any taxable year shall not exceed the excess (if any) of—\n“(1) $550, over\n“(2) 12 2 ⁄ 9  percent of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds $6,500.”\nSubsec. (c)(1)(A)(i).  Pub. L. 99–514, §\u202f1301(j)(8) , substituted “section 7703” for “section 143”.\nPub. L. 99–514, §\u202f104(b)(1)(B) , substituted “section 151(c)(3)” for “section 151(e)(3)”.\nSubsec. (c)(1)(C).  Pub. L. 99–514, §\u202f1272(d)(4) , struck out “or 931” after “911” in heading, and amended text generally. Prior to amendment, text read as follows: “The term ‘eligible individual’ does not include an individual who, for the taxable year, claims the benefits of—\n“(i) section 911 (relating to citizens or residents of the United States living abroad),\n“(ii) section 931 (relating to income from sources within possessions of the United States).”\nSubsec. (d).  Pub. L. 99–514, §\u202f1301(j)(8) , substituted “section 7703” for “section 143”.\nSubsec. (f)(2)(A), (B).  Pub. L. 99–514, §\u202f111(d)(1) , added subpars. (A) and (B) and struck out former subpars. (A) and (B) which read as follows:\n“(A) for earned income between $0 and $11,000, and\n“(B) for adjusted gross income between $6,500 and $11,000.”\nSubsec. (i).  Pub. L. 99–514, §\u202f111(c) , added subsec. (i).\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 43 of this title  as this section.\nSubsec. (a).  Pub. L. 98–369, §\u202f1042(a) , substituted “11 percent” for “10 percent”.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f1042(d)(1) , substituted “$550” for “$500”.\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f1042(b) , substituted “12 2 ⁄ 9  percent” for “12.5 percent” and “$6,500” for “$6,000”.\nSubsec. (c)(1)(A)(i).  Pub. L. 98–369, §\u202f423(c)(3)(A) , inserted “or would be so entitled but for paragraph (2) or (4) of section 152(e)”.\nSubsec. (c)(1)(B).  Pub. L. 98–369, §\u202f423(c)(3)(B) , substituted “as the individual for more than one-half of the taxable year” for “as the individual”.\nSubsec. (f)(2)(A).  Pub. L. 98–369, §\u202f1042(d)(2) , substituted “between $0 and $11,000” for “between $0 and $10,000”.\nSubsec. (f)(2)(B).  Pub. L. 98–369, §\u202f1042(d)(2) , substituted “between $6,500 and $11,000” for “between $6,000 and $10,000”.\nSubsec. (h).  Pub. L. 98–369, §\u202f1042(c) , added subsec. (h).\n1983—Subsec. (c)(2)(A)(ii).  Pub. L. 98–21  inserted before period at end “,\u2000but such net earnings shall be determined with regard to the deduction allowed to the taxpayer by section 164(f)”.\n1981—Subsec. (c)(1)(C).  Pub. L. 97–34  struck out reference to section 913 in heading, substituted “relating to citizens or residents of the United States living abroad” for “relating to income earned by individuals in certain camps outside the United States” in cl. (i), struck out cl. (ii) which made reference to section 913, and redesignated cl. (iii) as (ii).\n1980—Subsec. (c)(1)(C).  Pub. L. 96–222, §\u202f101(a)(1) , in heading substituted “who claims benefit of section 911, 913, or 931” for “entitled to exclude income under section 911” and in text substituted “claims the benefits of” for “is entitled to exclude any amounts from gross income under” and inserted reference to section 913 (relating to deduction for certain expenses of living abroad).\nSubsecs. (g), (h).  Pub. L. 96–222, §\u202f101(a)(2)(E) , redesignated subsec. (h) as (g).\n1978—Subsec. (a).  Pub. L. 95–600, §\u202f104(a) , substituted “subtitle” for “chapter” and “$5,000” for “$4,000”.\nSubsec. (b).  Pub. L. 95–600, §\u202f104(b) , substituted provision limiting the allowable credit to an amount not to exceed the excess of $500 over 12.5 percent of so much of the adjusted gross income for the taxable year as exceeds $6,000 for provision limiting the allowable credit to an amount reduced by 10 percent of so much of the adjusted gross income for the taxable year as exceeds $4,000.\nSubsec. (c)(1).  Pub. L. 95–600, §\u202f104(e) , amended par. (1) generally, substituting in definition of eligible individual one who is married and is entitled to a deduction under section 151 for a child, provided the child has the same principal abode as the individual and the abode is in the United States, is a surviving spouse, or is a head of household, provided the household is in the United States for one who maintains a household in the United States which is the principal abode of that individual and a child of that individual who meets the requirements of section 151(e)(1)(B) or a child of that individual who is disabled within the meaning of section 72(m)(7) and to whom the individual is entitled to claim a deduction under section 151.\nSubsec. (c)(1)(C).  Pub. L. 95–615, §\u202f202(f)(5) , which directed the amendment of subsec. (c)(1)(B) by substituting “(relating to income earned by employees in certain camps)” for “(relating to earned income from sources without the United States)”, was executed to subsec. (c)(1)(C) to reflect the probable intent of Congress and the general amendment of subsec. (c)(1) by  Pub. L. 95–600  which enacted provisions formerly contained in subsec. (c)(1)(B) in subsec. (c)(1)(C).\nSubsec. (c)(2)(B).  Pub. L. 95–600, §\u202f104(d) , redesignated cls. (ii) to (iv) as (i) to (iii), respectively. Former cl. (i), which provided that amounts be taken into account only if includible in the gross income of the taxpayer for the taxable year, was struck out.\nSubsec. (f).  Pub. L. 95–600, §\u202f104(c) , added subsec. (f).\nSubsec. (h).  Pub. L. 95–600, §\u202f105(a) , added subsec. (h).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f401(c)(1)(B) , substituted “is allowed” for “shall be allowed” and struck out provisions relating to the application of the six-month rule.\nSubsec. (b).  Pub. L. 94–455, §\u202f401(c)(1)(B) , struck out provisions relating to the application of the six-month rule.\nSubsec. (c)(1)(A).  Pub. L. 94–455, §\u202f401(c)(2) , among other changes, substituted “section 44A(f)(1)” for “section 214(b)(3)” and “if such child meets the requirements of section 151(e)(1)(B)” for “with respect to whom he is entitled to claim a deduction under section 151(e)(1)(B)” and inserted reference to a child of that individual who is disabled (within the meaning of section 72(m)(7)) and with respect to whom that individual is entitled to claim a deduction under section 151.\n1975—Subsec. (a).  Pub. L. 94–164  designated existing provisions as par. (1) and added par. (2).\nSubsec. (b).  Pub. L. 94–164  designated existing provisions as par. (1) and added par. (2).\nPub. L. 117–2, title IX, §\u202f9621(c) ,  Mar. 11, 2021 ,  135 Stat. 153 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 117–2, title IX, §\u202f9622(b) ,  Mar. 11, 2021 ,  135 Stat. 153 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 117–2, title IX, §\u202f9623(c) ,  Mar. 11, 2021 ,  135 Stat. 154 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 117–2, title IX, §\u202f9624(c) ,  Mar. 11, 2021 ,  135 Stat. 154 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nAmendment by  section 101(a) of Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f103(d) ,  Dec. 18, 2015 ,  129 Stat. 3045 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title II, §\u202f204(b) ,  Dec. 18, 2015 ,  129 Stat. 3081 , as amended by  Pub. L. 115–141, div. U, title I, §\u202f101(h) ,  Mar. 23, 2018 ,  132 Stat. 1162 , provided that:  “The amendment made by this section [amending this section] shall apply to any return of tax, and any amendment or supplement to any return of tax, which is filed after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 113–295, div. A, title II, §\u202f206(d) ,  Dec. 19, 2014 ,  128 Stat. 4027 , provided that:  “The amendments made by this section [amending this section and sections 1397B and 2801 of this title and provisions set out as a note under  section 2001 of this title ] shall take effect as if included in the provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 [ Pub. L. 111–312 ] to which they relate.”\nAmendment by  section 221(a)(3) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 103(e)(1) of Pub. L. 112–240 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 111–312  applicable to taxable years beginning after  Dec. 31, 2010 , see  section 103(d) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 24 of this title .\nPub. L. 111–226, title II, §\u202f219(c) ,  Aug. 10, 2010 ,  124 Stat. 2403 , provided that:  “The repeals and amendments made by this section [amending this section and sections 6012, 6051, and 6302 of this title and repealing  section 3507 of this title ] shall apply to taxable years beginning after  December 31, 2010 .”\nPub. L. 111–5, div. B, title I, §\u202f1002(b) ,  Feb. 17, 2009 ,  123 Stat. 312 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nAmendment by section 4002(b)(1)(B), (2)(O) of  Pub. L. 110–246  effective  Oct. 1, 2008 , see  section 4407 of Pub. L. 110–246 , set out as a note under  section 1161 of Title 2 , The Congress.\nPub. L. 110–245, title I, §\u202f102(d) ,  June 17, 2008 ,  122 Stat. 1625 , provided that:  “The amendments made by this section [amending this section and  section 6428 of this title ] shall apply to taxable years ending after  December 31, 2007 .”\nPub. L. 109–432, div. A, title I, §\u202f106(b) ,  Dec. 20, 2006 ,  120 Stat. 2938 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–135, title III, §\u202f302(b) ,  Dec. 21, 2005 ,  119 Stat. 2608 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 110–245, title I, §\u202f102(c) ,  June 17, 2008 ,  122 Stat. 1625 , provided that:  “Section 105 of the Working Families Tax Relief Act of 2004 [ section 105 of Pub. L. 108–311 , set out as a note under  section 1 of this title ] (relating to application of EGTRRA sunset to this title [probably means title I of  Pub. L. 108–311 , see Tables for classification]) shall not apply to section 104(b) of such Act [amending this section].”\nPub. L. 108–311, title I, §\u202f104(c)(2) ,  Oct. 4, 2004 ,  118 Stat. 1169 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 4, 2004 ].”\nAmendment by  section 205 of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 107–147, title IV, §\u202f416(a)(2) ,  Mar. 9, 2002 ,  116 Stat. 55 , provided that:  “The amendment made by this subsection [amending this section] shall take effect as if included in section 474 of the Tax Reform Act of 1984 [ Pub. L. 98–369 ].”\nAmendment by  section 201(c)(3) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2000 , see  section 201(e)(1) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nPub. L. 107–16, title III, §\u202f303(i) ,  June 7, 2001 ,  115 Stat. 57 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 6213 of this title ] shall apply to taxable years beginning after  December 31, 2001 . \n \n “(2)   Subsection  (g).— The amendment made by subsection (g) [amending  section 6213 of this title ] shall take effect on  January 1, 2004 .”\nPub. L. 106–170, title IV, §\u202f412(b) ,  Dec. 17, 1999 ,  113 Stat. 1917 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1999 .”\nPub. L. 105–206, title VI, §\u202f6021(c) ,  July 22, 1998 ,  112 Stat. 824 , provided that: \n “(1)   Eligible individuals .— The amendment made by subsection (a) [amending this section] shall take effect as if included in the amendments made by section 451 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 [ Pub. L. 104–193 ]. \n \n “(2)   Qualifying children .— The amendments made by subsection (b) [amending this section] shall take effect as if included in the amendments made by section 11111 of Revenue Reconciliation Act of 1990 [ Pub. L. 101–508 ].”\nAmendment by sections 6003(b) and 6010(p)(1), (2) of  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 101(b) of Pub. L. 105–34  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 101(e) of Pub. L. 105–34 , set out as an Effective Date note under  section 24 of this title .\nAmendment by  section 312(d)(2) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nPub. L. 105–34, title X, §\u202f1085(e) ,  Aug. 5, 1997 ,  111 Stat. 957 , provided that: \n “(1)  The amendments made by subsection (a) [amending this section and sections 6213 and 6695 of this title] shall apply to taxable years beginning after  December 31, 1996 . \n \n “(2)  The amendments made by subsections (b), (c), and (d) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 104–193, title IV, §\u202f451(d) ,  Aug. 22, 1996 ,  110 Stat. 2277 , provided that:  “The amendments made by this section [amending this section and  section 6213 of this title ] shall apply with respect to returns the due date for which (without regard to extensions) is more than 30 days after the date of the enactment of this Act [ Aug. 22, 1996 ].”\nPub. L. 104–193, title IX, §\u202f909(c) ,  Aug. 22, 1996 ,  110 Stat. 2352 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1995 . \n \n “(2)   Advance payment individuals .— In the case of any individual who on or before  June 26, 1996 , has in effect an earned income eligibility certificate for the individual’s taxable year beginning in 1996, the amendments made by this section shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–193, title IX, §\u202f910(c) ,  Aug. 22, 1996 ,  110 Stat. 2353 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1995 . \n \n “(2)   Advance payment individuals .— In the case of any individual who on or before  June 26, 1996 , has in effect an earned income eligibility certificate for the individual’s taxable year beginning in 1996, the amendments made by this section shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–7, §\u202f4(b) ,  Apr. 11, 1995 ,  109 Stat. 96 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1995 .”\nPub. L. 103–465, title VII, §\u202f721(d)(1) ,  Dec. 8, 1994 ,  108 Stat. 5002 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1994 .”\nPub. L. 103–465, title VII, §\u202f722(b) ,  Dec. 8, 1994 ,  108 Stat. 5003 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1994 .”\nPub. L. 103–465, title VII, §\u202f723(b) ,  Dec. 8, 1994 ,  108 Stat. 5003 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1993 .”\nPub. L. 103–465, title VII, §\u202f742(c) ,  Dec. 8, 1994 ,  108 Stat. 5010 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 6109 of this title ] shall apply to returns for taxable years beginning after  December 31, 1994 . \n \n “(2)   Exception .— The amendments made by this section shall not apply to— “(A)  returns for taxable years beginning in 1995 with respect to individuals who are born after  October 31, 1995 , and \n \n “(B)  returns for taxable years beginning in 1996 with respect to individuals who are born after  November 30, 1996 .”\nPub. L. 103–66, title XIII, §\u202f13131(e) ,  Aug. 10, 1993 ,  107 Stat. 435 , provided that:  “The amendments made by this section [amending this section and sections 162, 213, and 3507 of this title] shall apply to taxable years beginning after  December 31, 1993 .”\nAmendment by  section 11101(d)(1)(B) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nPub. L. 101–508, title XI, §\u202f11111(f) ,  Nov. 5, 1990 ,  104 Stat. 1388–413 , provided that:  “The amendments made by this section [amending this section and sections 162, 213, and 3507 of this title] shall apply to taxable years beginning after  December 31, 1990 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by sections 104(b)(1)(B) and 111(a)–(d)(1) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1272(d)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by  section 1301(j)(8) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 423(c)(3) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 423(d) of Pub. L. 98–369 , set out as a note under  section 2 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1042(e) ,  July 18, 1984 ,  98 Stat. 1044 , provided that:  “The amendments made by this section [amending sections 32 and 3507 of this title] shall apply to taxable years beginning after  December 31, 1984 .”\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 124(d)(2) of Pub. L. 98–21 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nPub. L. 96–222, title I, §\u202f101(b)(1)(A) ,  Apr. 1, 1980 ,  94 Stat. 205 , provided that:  “The amendment made by subsection (a)(1) [amending this section] shall apply to taxable years beginning after  December 31, 1977 .”\nPub. L. 96–222, title II, §\u202f201 ,  Apr. 1, 1980 ,  94 Stat. 228 , provided that:  “Except as otherwise provided in title I, any amendment made by title I [see Tables for classification] shall take effect as if it had been included in the provision of the Revenue Act of 1978 [ Pub. L. 95–600 , see Tables for classification] to which such amendment relates.”\nPub. L. 95–600, title I, §\u202f104(f) ,  Nov. 6, 1978 ,  92 Stat. 2773 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 95–600, title I, §\u202f105(g)(1) ,  Nov. 6, 1978 ,  92 Stat. 2776 , provided that:  “The amendments made by subsections (a) and (d) [amending this section and  section 6012 of this title ] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by  Pub. L. 95–615  applicable to taxable years beginning after  Dec. 31, 1977 , with provision for election of prior law, see  section 209 of Pub. L. 95–615 , set out as a note under  section 911 of this title .\nPub. L. 94–455, title IV, §\u202f401(e) ,  Oct. 4, 1976 ,  90 Stat. 1558 , as amended by  Pub. L. 95–30, title I, §\u202f103(c) ,  May 23, 1977 ,  91 Stat. 139 ;  Pub. L. 95–600, title I, §\u202f103(b) ,  Nov. 6, 1978 ,  92 Stat. 2771 , provided that:  “The amendments made by subsection (a) [amending sections 43 [now 32] and 6096 of this title] shall apply to taxable years ending after  December 31, 1975 , and shall cease to apply to taxable years ending after  December 31, 1978 . The amendments made by subsection (c) [amending this section] shall apply to taxable years ending after  December 31, 1975 . The amendments made by subsection (b) [amending sections 141 and 6012 of this title] shall apply to taxable years ending after  December 31, 1975 . The amendments made by subsection (d) [amending  section 3402 of this title ] shall apply to wages paid after  September 14, 1976 .”\nPub. L. 94–164, §\u202f2(g) ,  Dec. 23, 1975 ,  89 Stat. 972 , as amended by  Pub. L. 94–455, §\u202f402(b) , provided that:  “The amendments made by this section [amending sections 43 [now 32], 141, 3402, and 6012 of this title and provisions set out as notes under sections 42 and 43 [now 32] of this title] (other than by subsection (d) [enacting provisions set out as a note under this section]) apply to taxable years ending after  December 31, 1975 , and before  January 1, 1978 . Subsection (d) applies to taxable years ending after  December 31, 1975 .”\nPub. L. 94–12, title II, §\u202f209(b) ,  Mar. 29, 1975 ,  89 Stat. 35 , as amended by  Pub. L. 94–164, §\u202f2(f) ,  Dec. 23, 1975 ,  89 Stat. 972 ;  Pub. L. 94–455, title IV, §\u202f401(c)(1)(A) ,  Oct. 4, 1976 ,  90 Stat. 1557 ;  Pub. L. 95–30, title I, §\u202f103(b) ,  May 23, 1977 ,  91 Stat. 139 ;  Pub. L. 95–600, title I, §\u202f103(a) ,  Nov. 6, 1978 ,  92 Stat. 2771 , provided that:  “The amendments made by section 204 [enacting this section and amending sections 6201 and 6401 of this title] shall apply to taxable years beginning after  December 31, 1974 .”\nFor provisions that nothing in amendment by  section 401(b)(4) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 117–2, title IX, §\u202f9621(b) ,  Mar. 11, 2021 ,  135 Stat. 153 , provided that:  “As soon as practicable, the Secretary of the Treasury (or the Secretary’s delegate) shall develop and implement procedures to use information returns under section 6050S (relating to returns relating to higher education tuition and related expenses) to check the status of individuals as specified students for purposes of section 32(n)(1)(B)(ii) of the Internal Revenue Code of 1986 (as added by this section).”\nPub. L. 117–2, title IX, §\u202f9626 ,  Mar. 11, 2021 ,  135 Stat. 157 , provided that: \n “(a)   In General .— If the earned income of the taxpayer for the taxpayer’s first taxable year beginning in 2021 is less than the earned income of the taxpayer for the taxpayer’s first taxable year beginning in 2019, the credit allowed under section 32 of the Internal Revenue Code of 1986 may, at the election of the taxpayer, be determined by substituting— “(1)  such earned income for the taxpayer’s first taxable year beginning in 2019, for \n \n “(2)  such earned income for the taxpayer’s first taxable year beginning in 2021. \n \n \n “(b)   Earned Income.— “(1)   In general .— For purposes of this section, the term ‘earned income’ has the meaning given such term under section 32(c) of the Internal Revenue Code of 1986. \n \n “(2)   Application to joint returns .— For purposes of subsection (a), in the case of a joint return, the earned income of the taxpayer for the first taxable year beginning in 2019 shall be the sum of the earned income of each spouse for such taxable year. \n \n \n “(c)   Special Rules.— “(1)   Errors treated as mathematical errors .— For purposes of section 6213 of the Internal Revenue Code of 1986, an incorrect use on a return of earned income pursuant to subsection (a) shall be treated as a mathematical or clerical error. \n \n “(2)   No effect on determination of gross income, etc .— Except as otherwise provided in this subsection, the Internal Revenue Code of 1986 shall be applied without regard to any substitution under subsection (a). \n \n \n “(d)   Treatment of Certain Possessions.— “(1)   Payments to possessions with mirror code tax systems .— The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section (other than this subsection) with respect to section 32 of the Internal Revenue Code of 1986. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. \n \n “(2)   Payments to other possessions .— The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section (other than this subsection) with respect to section 32 of the Internal Revenue Code of 1986 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents. \n \n “(3)   Mirror code tax system .— For purposes of this section, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(4)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.”\nPub. L. 116–260, div. EE, title II, §\u202f211 ,  Dec. 27, 2020 ,  134 Stat. 3066 , provided that: \n “(a)   In General .— If the earned income of the taxpayer for the taxpayer’s first taxable year beginning in 2020 is less than the earned income of the taxpayer for the preceding taxable year, the credits allowed under sections 24(d) and 32 of the Internal Revenue Code of 1986 may, at the election of the taxpayer, be determined by substituting— “(1)  such earned income for the preceding taxable year, for \n \n “(2)  such earned income for the taxpayer’s first taxable year beginning in 2020. \n \n \n “(b)   Earned Income.— “(1)   In general .— For purposes of this section, the term ‘earned income’ has the meaning given such term under section 32(c) of the Internal Revenue Code of 1986. \n \n “(2)   Application to joint returns .— For purposes of subsection (a), in the case of a joint return, the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year. \n \n \n “(c)   Special Rules.— “(1)   Errors treated as mathematical error .— For purposes of section 6213 of the Internal Revenue Code of 1986, an incorrect use on a return of earned income pursuant to subsection (a) shall be treated as a mathematical or clerical error. \n \n “(2)   No effect on determination of gross income, etc .— Except as otherwise provided in this section, the Internal Revenue Code of 1986 shall be applied without regard to any substitution under subsection (a).”\nPub. L. 108–199, div. F, title II, §\u202f206 ,  Jan. 23, 2004 ,  118 Stat. 319 , provided that: \n “(a)   Study .— The Internal Revenue Service shall conduct a study, as a part of any program that requires certification (including pre-certification) in order to claim the earned income tax credit under section 32 of the Internal Revenue Code of 1986, on the following matters: “(1)  The costs (in time and money) incurred by the participants in the program. \n \n “(2)  The administrative costs incurred by the Internal Revenue Service in operating the program. \n \n “(3)  The percentage of individuals included in the program who were not certified for the credit, including the percentage of individuals who were not certified due to— “(A)  ineligibility for the credit; and \n \n “(B)  failure to complete the requirements for certification. \n \n \n “(4)  The percentage of individuals to whom paragraph (3)(B) applies who were— “(A)  otherwise eligible for the credit; and \n \n “(B)  otherwise ineligible for the credit. \n \n \n “(5)  The percentage of individuals to whom paragraph (3)(B) applies who— “(A)  did not respond to the request for certification; and \n \n “(B)  responded to such request but otherwise failed to complete the requirements for certification. \n \n \n “(6)  The reasons— “(A)  for which individuals described in paragraph (5)(A) did not respond to requests for certification; and \n \n “(B)  for which individuals described in paragraph (5)(B) had difficulty in completing the requirements for certification. \n \n \n “(7)  The characteristics of those individuals who were denied the credit due to— “(A)  failure to complete the requirements for certification; and \n \n “(B)  ineligibility for the credit. \n \n \n “(8)  The impact of the program on non-English speaking participants. \n \n “(9)  The impact of the program on homeless and other highly transient individuals. \n \n \n “(b)   Report.— “(1)   Preliminary report .— Not later than  July 30, 2004 , the Commissioner of the Internal Revenue Service shall submit to Congress a preliminary report on the study conducted under subsection (a). \n \n “(2)   Final report .— Not later than  June 30, 2005 , the Commissioner of the Internal Revenue Service shall submit to Congress a final report detailing the findings of the study conducted under subsection (a).”\nSecretary of the Treasury, or Secretary’s delegate, to establish taxpayer awareness program to inform taxpaying public of availability of earned income credit and child health insurance under this section, see  section 11114 of Pub. L. 101–508 , set out as a note under  section 21 of this title .\nPub. L. 99–514, title I, §\u202f111(e) ,  Oct. 22, 1986 ,  100 Stat. 2108 , provided that:  “The Secretary of the Treasury is directed to require, under regulations, employers to notify any employee who has not had any tax withheld from wages (other than an employee whose wages are exempt from withholding pursuant to section 3402(n) of the Internal Revenue Code of 1986) that such employee may be eligible for a refund because of the earned income credit.”\nPub. L. 94–164, §\u202f2(d) ,  Dec. 23, 1975 ,  89 Stat. 972 , as amended by  Pub. L. 94–455, title IV, §\u202f402(a) ,  Oct. 4, 1976 ,  90 Stat. 1558 ;  Pub. L. 95–600, title I, §\u202f105(f) ,  Nov. 6, 1978 ,  92 Stat. 2776 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Any refund of Federal income taxes made to any individual by reason of section 43 [now 32] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to earned income credit), and any payment made by an employer under [former] section 3507 of such Code (relating to advance payment of earned income credit) shall not be taken into account in any year ending before 1980 as income or receipts for purposes of determining the eligibility, for the month in which such refund is made or any month thereafter of such individual or any other individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds, but only if such individual (or the family unit of which he is a member) is a recipient of benefits or assistance under such a program for the month before the month in which such refund is made.”\n[ Pub. L. 95–600, title I, §\u202f105(g)(3) ,  Nov. 6, 1978 ,  92 Stat. 2776 , provided that:  “Subsection (f) [amending  section 2(d) of Pub. L. 94–164 , set out above] shall take effect on the date of enactment of this Act [ Nov. 6, 1978 ].” \n]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'There shall be allowed as a credit against the tax imposed by this subtitle the amount of tax withheld at source under subchapter A of chapter 3 (relating to withholding of tax on nonresident aliens and on foreign corporations).\nA prior section 33 was renumbered  section 27 of this title .\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 32 of this title  as this section.\nPub. L. 98–369, §\u202f474(j) , amended section generally, striking out “and on tax-free covenant bonds” after “foreign corporations” in section catchline, and, in text, substituting “as a credit against the tax imposed by this subtitle” for “as credits against the tax imposed by this chapter”, and striking out designation “(1)” before “the amount of tax withheld”, and “,\u2000and (2) the amount of tax withheld at source under subchapter B of chapter 3 (relating to interest on tax-free covenant bonds)” after “on foreign corporations)”.\nPub. L. 98–369, div. A, title IV, §\u202f475(b) ,  July 18, 1984 ,  98 Stat. 847 , provided that:  “The amendments made by subsections (j) and (r)(29) [amending this section and sections 12, 164, 1441, 1442, 6049, and 7701 of this title and repealing  section 1451 of this title ] shall not apply with respect to obligations issued before  January 1, 1984 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Credit shall not be allowed under subsection (a) for any amount payable under section 6421 or 6427, if a claim for such amount is timely filed and, under section 6421(i) or 6427(k), is payable under such section.\nA prior section 34, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 13 ;  June 25, 1959 ,  Pub. L. 86–69, §\u202f3(a)(1) ,  73 Stat. 139 ;  Sept. 14, 1960 ,  Pub. L. 86–779, §\u202f10(e) ,  74 Stat. 1009 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f201(a) ,  78 Stat. 31 , related to dividends received by individuals, prior to repeal by  Pub. L. 88–272, title II, §\u202f201(b) ,  Feb. 26, 1964 ,  78 Stat. 31 , effective with respect to dividends received after  Dec. 31, 1964 .\n2007—Subsec. (a)(1).  Pub. L. 110–172, §\u202f11(a)(4)(A) , struck out “with respect to gasoline used during the taxable year on a farm for farming purposes” before “(determined without regard to section 6420(g))”.\nSubsec. (a)(2).  Pub. L. 110–172, §\u202f11(a)(4)(B) , which directed striking out “with respect to gasoline used during the taxable year: (A) otherwise than as a fuel in a highway vehicle; or (B) in vehicles while engaged in furnishing certain public passenger land transportation service”, was executed by striking out “with respect to gasoline used during the taxable year (A) otherwise than as a fuel in a highway vehicle or (B) in vehicles while engaged in furnishing certain public passenger land transportation service” before “(determined without regard to section 6421(i))”, to reflect the probable intent of Congress.\nSubsec. (a)(3).  Pub. L. 110–172, §\u202f11(a)(4)(C) , struck out “with respect to fuels used for nontaxable purposes or resold during the taxable year” before “(determined without regard to section 6427(k))”.\n1998—Subsec. (b).  Pub. L. 105–206  substituted “section 6421(i)” for “section 6421(j)”.\n1996—Subsec. (a)(3).  Pub. L. 104–188  amended par. (3) generally. Prior to amendment, par. (3) read as follows: “under section 6427—\n“(A) with respect to fuels used for nontaxable purposes or resold, or\n“(B) with respect to any qualified diesel-powered highway vehicle purchased (or deemed purchased under section 6427(g)(6)),\nduring the taxable year (determined without regard to section 6427(k)).”\n1988—Subsec. (b).  Pub. L. 100–647  substituted “section 6421(j) or 6427(k)” for “section 6421(i) or 6427(j)”.\n1986—Subsec. (a)(3).  Pub. L. 99–514, §\u202f1877(a) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “under section 6427 with respect to fuels used for nontaxable purposes or resold during the taxable year (determined without regard to section 6427(j)).”\nPub. L. 99–514, §\u202f1703(e)(2)(F) , substituted “6427(k)” for “6427(j)”.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 39 of this title  as this section.\nSubsec. (a)(3).  Pub. L. 98–369, §\u202f911(d)(2)(A) , which directed the amendment of par. (4) by substituting “6427(j)” for “6427(i)” was executed to par. (3) to reflect the probable intent of Congress and the redesignation of par. (4) as (3) by  Pub. L. 97–424 .\nSubsec. (b).  Pub. L. 98–369, §\u202f911(d)(2)(A) , substituted “6427(j)” for “6427(i)”.\n1983— Pub. L. 97–424, §\u202f515(b)(6)(C) , substituted “and special fuels” for “,\u2000special fuels, and lubricating oil” after “gasoline” in section catchline.\nSubsec. (a)(2) to (4).  Pub. L. 97–424, §\u202f515(b)(6)(A) , inserted “and” at end of par. (2), redesignated par. (4) as (3), and struck out former (3) which referred to amounts payable to the taxpayer under section 6424 with respect to lubricating oil used during the taxable year for certain nontaxable purposes (determined without regard to section 6424(f)).\nSubsec. (b).  Pub. L. 97–424, §\u202f515(b)(6)(B)(i) , substituted “6421 or 6427” for “6421, 6424, or 6427” after “amount payable under”.\nPub. L. 97–424, §\u202f515(b)(6)(B)(ii) , substituted “6421(i) or 6427(i)” for “6421(i), 6424(f), or 6427(i)” after “and, under”.\n1980—Subsec. (a)(4).  Pub. L. 96–223  substituted “6427(i)” for “6427(h)”.\nSubsec. (b).  Pub. L. 96–223  substituted “6427(i)” for “6427(h)”.\n1978—Subsec. (a)(3).  Pub. L. 95–618  substituted “for certain nontaxable purposes” for “otherwise than in a highway motor vehicle”.\nSubsec. (a)(4).  Pub. L. 95–599  substituted “6427(h)” for “6427(g)”.\nSubsec. (b).  Pub. L. 95–599  substituted “6427(h)” for “6427(g)”.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1906(b)(8) , substituted “6420(g)” for “6420(h)”.\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f1906(b)(9) , substituted “6424(f)” for “6424(g)”.\nSubsec. (a)(4).  Pub. L. 94–530  substituted “6427(g)” for “6427(f)”.\nSubsec. (b).  Pub. L. 94–530 , which directed the amendment of subsec. (c) by substituting “6427(g)” for “6427(f)”, was executed to subsec. (b) to reflect the probable intent of Congress and the redesignation of subsec. (c) as (b) by  Pub. L. 94–455 .\nPub. L. 94–455, §\u202f1901(a)(3) , redesignated subsec. (c) as (b) and substituted “section 6421(i), 6424(f), or 6427(f), is payable” for “section 6421(i), 6424(g) or 6427(f) is payable”. Former subsec. (b), relating to determination of taxpayers first taxable year with respect to tax credit for certain uses of gasoline and lubricating oil, was struck out.\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(3) , redesignated subsec. (c) as (b).\n1970— Pub. L. 91–258, §\u202f207(c)(1) , inserted reference to special fuels in section catchline.\nSubsec. (a)(4).  Pub. L. 91–258, §\u202f207(c)(2) , added par. (4).\nSubsec. (c).  Pub. L. 91–258, §\u202f207(c)(3) , (4), inserted references to sections 6427 and 6427(f), respectively.\nPub. L. 105–206, title VI, §\u202f6023(32) ,  July 22, 1998 ,  112 Stat. 826 , provided that:  “The amendments made by this section [amending this section and sections 45A, 59, 72, 142, 501, 512, 543, 871, 1017, 1250, 3121, 3401, 4092, 4221, 4222, 4973, 4975, 6039, 6050R, 6103, 6416, 6421, 6427, 6501, 7434, 7702B, 7872, and 9502 of this title] shall take effect on the date of the enactment of this Act [ July 22, 1998 ].”\nPub. L. 104–188, title I, §\u202f1606(c) ,  Aug. 20, 1996 ,  110 Stat. 1839 , provided that:  “The amendments made by this section [amending this section and  section 6427 of this title ] shall apply to vehicles purchased after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1703(e)(2)(F) of Pub. L. 99–514  applicable to gasoline removed (as defined in  section 4082 of this title  as amended by  section 1703 of Pub. L. 99–514 ) after  Dec. 31, 1987 , see  section 1703(h) of Pub. L. 99–514  set out as a note under  section 4081 of this title .\nAmendment by  section 1877(a) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 911(d)(2)(A) of Pub. L. 98–369  effective  Aug. 1, 1984 , see  section 911(e) of Pub. L. 98–369 , set out as a note under  section 6427 of this title .\nPub. L. 97–424, title V, §\u202f515(c) ,  Jan. 6, 1983 ,  96 Stat. 2182 , provided that:  “The amendments made by this section [amending sections 39 [now 34], 874, 882, 4101, 4102, 4221, 4222, 6201, 6206, 6416, 6421, 6504, 6675, 7210, 7603 to 7605, 7609, and 7610 of this title and repealing sections 4091 to 4094 and 6424 of this title] shall apply with respect to articles sold after the date of the enactment of this Act [ Jan. 6, 1983 ].”\nAmendment by  Pub. L. 96–223  effective on  Jan. 1, 1979 , see  section 232(h)(2) of Pub. L. 96–223 , set out as a note under  section 6427 of this title .\nPub. L. 95–618, title II, §\u202f233(d) ,  Nov. 9, 1978 ,  92 Stat. 3192 , provided that:  “The amendments made by this section [amending sections 39 [now 34], 4041, 4221, 4483, 6416, 6421, 6424, 6427, 6504, and 6675 of this title and amending a provision set out as a note under  section 120 of Title 23 , Highways] shall take effect on the first day of the first calendar month which begins more than 10 days after the date of the enactment of this Act [ Nov. 9, 1978 ].”\nAmendment by  Pub. L. 95–599  effective  Jan. 1, 1979 , see  section 505(d) of Pub. L. 95–599 , set out as a note under  section 6427 of this title .\nAmendment by  Pub. L. 94–530  effective on  Oct. 1, 1976 , see  section 1(d) of Pub. L. 94–530 , set out as a note under  section 4041 of this title .\nAmendment by  section 1901(a)(3) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by section 1906(b)(8), (9) of  Pub. L. 94–455 , to take effect on  Feb. 1, 1977 , see  section 1906(d) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nAmendment by  Pub. L. 91–258  applicable with respect to taxable years ending after  June 30, 1970 , see  section 211(b) of Pub. L. 91–258 , set out as a note under  section 4041 of this title .\nSection applicable to taxable years beginning on or after  July 1, 1965 , see  section 809(f) of Pub. L. 89–44 , set out as an Effective Date of 1965 Amendment note under  section 6420 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 72.5 percent of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under qualified health insurance for eligible coverage months beginning in the taxable year.\nIn the case of a joint return, the requirements of paragraph (1)(A) shall be treated as met with respect to any month if at least 1 spouse satisfies such requirements.\nExcept as provided in subparagraph (B), the term “eligible TAA recipient” means, with respect to any month, any individual who is receiving for any day of such month a trade readjustment allowance under chapter 2 of title II of the Trade Act of 1974 or who would be eligible to receive such allowance if section 231 of such Act were applied without regard to subsection (a)(3)(B) of such section. An individual shall continue to be treated as an eligible TAA recipient during the first month that such individual would otherwise cease to be an eligible TAA recipient by reason of the preceding sentence.\nIf section 152(e) applies to any child with respect to any calendar year, in the case of any taxable year beginning in such calendar year, such child shall be treated as described in paragraph (1)(B) with respect to the custodial parent (as defined in section 152(e)(4)(A)) and not with respect to the noncustodial parent.\nEach qualifying individual is guaranteed enrollment if the individual pays the premium for enrollment or provides a qualified health insurance costs credit eligibility certificate described in section 7527 and pays the remainder of such premium.\nNo pre-existing condition limitations are imposed with respect to any qualifying individual.\nThe total premium (as determined without regard to any subsidies) with respect to a qualifying individual may not be greater than the total premium (as so determined) for a similarly situated individual who is not a qualifying individual.\nBenefits under the coverage are the same as (or substantially similar to) the benefits provided to similarly situated individuals who are not qualifying individuals.\nSuch individual is covered under any insurance which constitutes medical care (except insurance substantially all of the coverage of which is of excepted benefits described in section 9832(c)) under any health plan maintained by any employer (or former employer) of the taxpayer or the taxpayer’s spouse and at least 50 percent of the cost of such coverage (determined under section 4980B) is paid or incurred by the employer.\nFor purposes of subparagraphs (A) and (B), the cost of coverage shall be treated as paid or incurred by an employer to the extent the coverage is in lieu of a right to receive cash or other qualified benefits under a cafeteria plan (as defined in section 125(d)).\nWith respect to any taxable year, the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a) shall be reduced (but not below zero) by the aggregate amount paid on behalf of such taxpayer under section 7527 for months beginning in such taxable year.\nAmounts taken into account under subsection (a) shall not be taken into account in determining any deduction allowed under section 162( l ) or 213.\nAmounts distributed from an Archer MSA (as defined in section 220(d)) or from a health savings account (as defined in section 223(d)) shall not be taken into account under subsection (a).\nNo credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.\nRules similar to the rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of this section.\nFor purposes of this section, rules similar to the rules of section 213(d)(6) shall apply with respect to any contract for qualified health insurance under which amounts are payable for coverage of an individual other than the taxpayer and qualifying family members.\nPayments made by the Secretary on behalf of any individual under section 7527 (relating to advance payment of credit for health insurance costs of eligible individuals) shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made.\nPayments made by the taxpayer for eligible coverage months shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made.\nIn the case of an assistance eligible individual who receives premium assistance for continuation coverage under section 9501(a)(1) of the American Rescue Plan Act of 2021 for any month during the taxable year, such individual shall not be treated as an eligible individual, a certified individual, or a qualifying family member for purposes of this section or section 7527 with respect to such month.\nIn the case of any month which would be an eligible coverage month with respect to an eligible individual but for subsection (f)(2)(A), such month shall be treated as an eligible coverage month with respect to such eligible individual solely for purposes of determining the amount of the credit under this section with respect to any qualifying family members of such individual (and any advance payment of such credit under section 7527). This subparagraph shall only apply with respect to the first 24 months after such eligible individual is first entitled to the benefits described in subsection (f)(2)(A).\nIn the case of the finalization of a divorce between an eligible individual and such individual’s spouse, such spouse shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such finalization, except that the only qualifying family members who may be taken into account with respect to such spouse are those individuals who were qualifying family members immediately before such finalization.\nThis section shall not apply to any taxpayer for any eligible coverage month unless such taxpayer elects the application of this section for such month.\nAn eligible coverage month to which the election under paragraph (11) applies shall not be treated as a coverage month (as defined in section 36B(c)(2)) for purposes of section 36B with respect to the taxpayer.\nThe Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, section 6050T, and section 7527.\nThe date of the enactment of the Trade Act of 2002, referred to in subsec. (b)(1)(B), is the date of enactment of  Pub. L. 107–210 , which was approved  Aug. 6, 2002 .\nThe Trade Act of 1974, referred to in subsec. (c)(2), (3), is  Pub. L. 93–618 ,  Jan. 3, 1975 ,  88 Stat. 1978 . Chapter 2 of title II of the Act is classified generally to part 2 (§\u202f2271 et seq.) of subchapter II of chapter 12 of Title 19, Customs Duties. Sections 231, 233, 236, and 246 of the Act are classified to sections 2291, 2293, 2296, and 2318 of Title 19, respectively. For complete classification of this Act to the Code, see  section 2101 of Title 19  and Tables.\nThe date of the enactment of this paragraph, referred to in subsec. (c)(2)(B), probably means the date of enactment of  Pub. L. 111–5 , which amended par. (2) generally and which was approved  Feb. 17, 2009 .\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (c)(4)(B) and (e)(1)(F)(i), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Title IV of the Act is classified principally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29, Labor. Section 3(37) of the Act is classified to  section 1002(37) of Title 29 . For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nSection 2744(c)(2) of the Public Health Service Act, referred to in subsec. (e)(1)(C), is classified to  section 300gg–44(c)(2) of Title 42 , The Public Health and Welfare.\nThe Patient Protection and Affordable Care Act, referred to in subsecs. (e)(1)(J) and (g)(12)(B)(i)(I), is  Pub. L. 111–148 ,  Mar. 23, 2010 ,  124 Stat. 119 . Section 1412 of the Act is classified to  section 18082 of Title 42 , The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 18001 of Title 42  and Tables.\nThe Social Security Act, referred to in subsec. (f)(2), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Parts A and B of title XVIII of the Act are classified generally to parts A (§\u202f1395c et seq.) and B (§\u202f1395j et seq.), respectively, of subchapter XVIII of chapter 7 of Title 42, The Public Health and Welfare. Titles XIX and XXI of the Act are classified generally to subchapters XIX (§\u202f1396 et seq.) and XXI (§\u202f1397aa et seq.), respectively, of chapter 7 of Title 42. Section 1928 of the Act is classified to  section 1396s of Title 42 . For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 9501(a)(1) of the American Rescue Plan Act of 2021, referred to in subsec. (g)(9), is  section 9501(a)(1) of Pub. L. 117–2 , which is set out in a note under  section 4980B of this title .\nA prior section 35 was renumbered  section 37 of this title .\nAnother prior section 35, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 14 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f41(b) ,  72 Stat. 1639 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f201(d)(2) ,  78 Stat. 32 , related to partially tax-exempt interest received by individuals, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1901(a)(2) ,  Oct. 4, 1976 ,  90 Stat. 1764 , effective with respect to taxable years beginning after  Dec. 31, 1976 .\n2021—Subsec. (g)(9).  Pub. L. 117–2  amended par. (9) generally. Prior to amendment, par. (9) related to COBRA premium assistance.\n2020—Subsec. (b)(1)(B).  Pub. L. 116–260  substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\n2019—Subsec. (b)(1)(B).  Pub. L. 116–94  substituted “ January 1, 2021 ” for “ January 1, 2020 ”.\n2015—Subsec. (b)(1)(B).  Pub. L. 114–27, §\u202f407(a) , substituted “before  January 1, 2020 ” for “before  January 1, 2014 ”.\nSubsec. (e)(1)(J).  Pub. L. 114–27, §\u202f407(d)(2) , inserted “(other than coverage enrolled in through an Exchange established under the Patient Protection and Affordable Care Act)” after “under individual health insurance”\nPub. L. 114–27, §\u202f407(d)(1) , substituted “under individual health insurance. For purposes of” for “under individual health insurance if the eligible individual was covered under individual health insurance during the entire 30-day period that ends on the date that such individual became separated from the employment which qualified such individual for—\n“(i) in the case of an eligible TAA recipient, the allowance described in subsection (c)(2),\n“(ii) in the case of an eligible alternative TAA recipient, the benefit described in subsection (c)(3)(B), or\n“(iii) in the case of any eligible PBGC pension recipient, the benefit described in subsection (c)(4)(B).\nFor purposes of”.\nSubsec. (g)(11) to (13).  Pub. L. 114–27, §\u202f407(b) , added pars. (11) and (12) and redesignated former par. (11) as (13).\n2014—Subsec. (g)(9) to (11).  Pub. L. 113–295, §\u202f209(j)(3) , amended directory language of  Pub. L. 111–5, §\u202f3001(a)(14)(A) . See 2009 Amendment notes below.\n2011—Subsec. (a).  Pub. L. 112–40, §\u202f241(b)(1) , substituted “72.5 percent” for “65 percent (80 percent in the case of eligible coverage months beginning before  February 13, 2011 )”.\nSubsec. (b)(1)(B).  Pub. L. 112–40, §\u202f241(a) , inserted “,\u2000and before  January 1, 2014 ” after “2002”.\nSubsec. (c)(2)(B).  Pub. L. 112–40, §\u202f241(b)(3)(A) , struck out “and before  February 13, 2011 ” after “paragraph” in introductory provisions.\nSubsec. (e)(1)(K).  Pub. L. 112–40, §\u202f241(b)(3)(B) , substituted “Coverage” for “In the case of eligible coverage months beginning before  February 13, 2012 , coverage”.\nSubsec. (g)(10).  Pub. L. 112–40, §\u202f241(b)(3)(C) , which directed amendment of par. (9) relating to continued qualification of family members after certain events by striking out “In the case of eligible coverage months beginning before  February 13, 2011 —”, was executed by striking out such introductory provisions in par. (10) to reflect the probable intent of Congress and the redesignation of par. (9) as (10) by  Pub. L. 111–5, §\u202f3001(a)(14)(A) , as amended by  Pub. L. 113–295, §\u202f209(j)(3) . See 2009 Amendment and Effective Date of 2014 Amendment notes below.\n2010—Subsec. (a).  Pub. L. 111–344, §\u202f111(a) , substituted “ February 13, 2011 ” for “ January 1, 2011 ”.\nSubsec. (c)(2)(B).  Pub. L. 111–344, §\u202f113(a) , substituted “ February 13, 2011 ” for “ January 1, 2011 ” in introductory provisions.\nSubsec. (e)(1)(K).  Pub. L. 111–344, §\u202f117(a) , substituted “ February 13, 2012 ” for “ January 1, 2011 ”.\nSubsec. (g)(9).  Pub. L. 111–144  substituted “section 3001(a) of title III of division B of the American Recovery and Reinvestment Act of 2009” for “section 3002(a) of the Health Insurance Assistance for the Unemployed Act of 2009”.\nSubsec. (g)(10).  Pub. L. 111–344, §\u202f115(a) , which directed amendment of par. (9) relating to continued qualification of family members after certain events by substituting “ February 13, 2011 ” for “ January 1, 2011 ”, was executed by making the substitution in introductory provisions of par. (10) to reflect the probable intent of Congress and the redesignation of par. (9) as (10) by  Pub. L. 111–5, §\u202f3001(a)(14)(A) , as amended by  Pub. L. 113–295, §\u202f209(j)(3) . See 2009 Amendment and Effective Date of 2014 Amendment notes below.\n2009—Subsec. (a).  Pub. L. 111–5, §\u202f1899A(a)(1) , inserted “(80 percent in the case of eligible coverage months beginning before  January 1, 2011 )” after “65 percent”.\nSubsec. (c)(2).  Pub. L. 111–5, §\u202f1899C(a) , amended par. (2) generally. Prior to amendment, text read as follows: “The term ‘eligible TAA recipient’ means, with respect to any month, any individual who is receiving for any day of such month a trade readjustment allowance under chapter 2 of title II of the Trade Act of 1974 or who would be eligible to receive such allowance if section 231 of such Act were applied without regard to subsection (a)(3)(B) of such section. An individual shall continue to be treated as an eligible TAA recipient during the first month that such individual would otherwise cease to be an eligible TAA recipient by reason of the preceding sentence.”\nSubsec. (e)(1)(K).  Pub. L. 111–5, §\u202f1899G(a) , added subpar. (K).\nSubsec. (g)(9), (10).  Pub. L. 111–5, §\u202f3001(a)(14)(A) , as amended by  Pub. L. 113–295, §\u202f209(j)(3) , added par. (9) relating to COBRA premium assistance and redesignated former par. (9) relating to continued qualification of family members after certain events as (10). Former par. (10) relating to regulations redesignated (11).\nPub. L. 111–5, §\u202f1899E(a) , added par. (9) relating to continued qualification of family members after certain events and redesignated former par. (9) relating to regulations as (10).\nSubsec. (g)(11).  Pub. L. 111–5, §\u202f3001(a)(14)(A) , as amended by  Pub. L. 113–295, §\u202f209(j)(3) , redesignated par. (10) relating to regulations as (11).\n2007—Subsec. (d)(2).  Pub. L. 110–172  struck out “paragraph (2) or (4) of” before “section 152(e)” and substituted “(as defined in section 152(e)(4)(A))” for “(within the meaning of section 152(e)(1))”.\n2004—Subsec. (g)(3).  Pub. L. 108–311  amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “Amounts distributed from an Archer MSA (as defined in section 220(d)) shall not be taken into account under subsection (a).”\nPub. L. 117–2, title IX, §\u202f9501(b)(3)(B) ,  Mar. 11, 2021 ,  135 Stat. 137 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Mar. 11, 2021 ].”\nPub. L. 116–260, div. EE, title I, §\u202f134(b) ,  Dec. 27, 2020 ,  134 Stat. 3053 , provided that:  “The amendment made by this section [amending this section] shall apply to months beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f146(b) ,  Dec. 20, 2019 ,  133 Stat. 3236 , provided that:  “The amendment made by this section [amending this section] shall apply to months beginning after  December 31, 2019 .”\nPub. L. 114–27, title IV, §\u202f407(f) ,  June 29, 2015 ,  129 Stat. 382 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 6501 and 7527 of this title] shall apply to coverage months in taxable years beginning after  December 31, 2013 . \n \n “(2)   Plans available on individual market for use of tax credit .— The amendment made by subsection (d)(2) [amending this section] shall apply to coverage months in taxable years beginning after  December 31, 2015 . \n \n “(3)   Transition rule .— Notwithstanding section 35(g)(11)(B)(i) of the Internal Revenue Code of 1986 (as added by this title), an election to apply section 35 of such Code to an eligible coverage month (as defined in section 35(b) of such Code) (and not to claim the credit under section 36B of such Code with respect to such month) in a taxable year beginning after  December 31, 2013 , and before the date of the enactment of this Act [ June 29, 2015 ]— “(A)  may be made at any time on or after such date of enactment and before the expiration of the 3-year period of limitation prescribed in section 6511(a) with respect to such taxable year; and \n \n “(B)  may be made on an amended return.”\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nPub. L. 112–40, title II, §\u202f241(c) ,  Oct. 21, 2011 ,  125 Stat. 419 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section,  section 7527 of this title , and former  section 2918 of Title 29 , Labor] shall apply to coverage months beginning after  February 12, 2011 . \n \n “(2)   Advance payment provisions.— “(A)  The amendment made by subsection (b)(2)(B) [amending  section 7527 of this title ] shall apply to certificates issued after the date which is 30 days after the date of the enactment of this Act [ Oct. 21, 2011 ]. \n \n “(B)  The amendment made by subsection (b)(2)(D) [amending  section 7527 of this title ] shall apply to coverage months beginning after the date which is 30 days after the date of the enactment of this Act.”\nPub. L. 111–344, title I, §\u202f111(c) ,  Dec. 29, 2010 ,  124 Stat. 3615 , provided that:  “The amendments made by this section [amending this section and  section 7527 of this title ] shall apply to coverage months beginning after  December 31, 2010 .”\nPub. L. 111–344, title I, §\u202f113(b) ,  Dec. 29, 2010 ,  124 Stat. 3615 , provided that:  “The amendment made by this section [amending this section] shall apply to coverage months beginning after  December 31, 2010 .”\nPub. L. 111–344, title I, §\u202f115(c) ,  Dec. 29, 2010 ,  124 Stat. 3615 , provided that:  “The amendments made by this section [amending this section and former  section 2918 of Title 29 , Labor] shall apply to months beginning after  December 31, 2010 .”\nPub. L. 111–344, title I, §\u202f117(b) ,  Dec. 29, 2010 ,  124 Stat. 3616 , provided that:  “The amendment made by this section [amending this section] shall apply to coverage months beginning after  December 31, 2010 .”\nPub. L. 111–144, §\u202f3(c) ,  Mar. 2, 2010 ,  124 Stat. 45 , provided that:  \n “The amendments made by this section [amending this section, sections 139C, 6432, and 6720C of this title, and provisions set out as a note under  section 6432 of this title ] shall take effect as if included in the provisions of section 3001 of division B of the American Recovery and Reinvestment Act of 2009 [ Pub. L. 111–5 , set out below] to which they relate, except that— \n “(1)  the amendments made by subsection (b)(1) [amending provisions set out as a note under  section 6432 of this title ] shall apply to periods of coverage beginning after the date of the enactment of this Act [ Mar. 2, 2010 ]; \n \n “(2)  the amendments made by subsection (b)(2) [amending provisions set out as a note under  section 6432 of this title ] shall take effect as if included in the amendments made by section 1010 of division B of the Department of Defense Appropriations Act, 2010 [ Pub. L. 111–118 , amending provisions set out a note under this section]; and \n \n “(3)  the amendments made by subsections (b)(3) and (b)(4) [amending provisions set out as a note under  section 6432 of this title ] shall take effect on the date of the enactment of this Act [ Mar. 2, 2010 ].”\nExcept as otherwise provided and subject to certain applicability provisions, amendment by sections 1899A(a)(1), 1899C(a), 1899E(a), and 1899G(a) of  Pub. L. 111–5  effective upon the expiration of the 90-day period beginning on  Feb. 17, 2009 , see  section 1891 of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 2271 of Title 19 , Customs Duties.\nPub. L. 111–5, div. B, title I, §\u202f1899A(b) ,  Feb. 17, 2009 ,  123 Stat. 424 , provided that:  “The amendments made by this section [amending this section and  section 7527 of this title ] shall apply to coverage months beginning on or after the first day of the first month beginning 60 days after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 111–5, div. B, title I, §\u202f1899C(b) ,  Feb. 17, 2009 ,  123 Stat. 425 , provided that:  “The amendment made by this section [amending this section] shall apply to coverage months beginning after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 111–5, div. B, title I, §\u202f1899E(c) ,  Feb. 17, 2009 ,  123 Stat. 428 , provided that:  “The amendments made by this section [amending this section and former  section 2918 of Title 29 , Labor] shall apply to months beginning after  December 31, 2009 .”\nPub. L. 111–5, div. B, title I, §\u202f1899G(b) ,  Feb. 17, 2009 ,  123 Stat. 430 , provided that:  “The amendments made by this section [amending this section] shall apply to coverage months beginning after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 111–5, div. B, title III, §\u202f3001(a)(14)(B) ,  Feb. 17, 2009 ,  123 Stat. 465 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nAmendment by  Pub. L. 108–311  effective as if included in  section 1201 of Pub. L. 108–173 , see  section 401(b) of Pub. L. 108–311 , set out as a note under  section 26 of this title .\nPub. L. 107–210, div. A, title II, §\u202f201(d) ,  Aug. 6, 2002 ,  116 Stat. 960 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this section and  section 300gg–45 of Title 42 , The Public Health and Welfare, amending  section 1324 of Title 31 , Money and Finance, and renumbering former  section 35 of this title  as  section 36 of this title ] shall apply to taxable years beginning after  December 31, 2001 . \n \n “(2)   State high risk pools .— The amendment made by subsection (b) [enacting  section 300gg–45 of Title 42 ] shall take effect on the date of the enactment of this Act [ Aug. 6, 2002 ].”\nPub. L. 107–210, div. A, title II, §\u202f203(f) ,  Aug. 6, 2002 ,  116 Stat. 972 , provided that:  “Nothing in this title [enacting this section and sections 6050T and 7527 of this title, and  section 300gg–45 of Title 42 , The Public Health and Welfare, amending sections 4980B, 6103, 6724, and 7213A of this title, sections 1165, 2862, 2918, and 2919 of Title 29, Labor,  section 1324 of Title 31 , Money and Finance, and  section 300bb–5 of Title 42 , renumbering former  section 35 of this title  as  section 36 of this title , and enacting provisions set out as notes under this section and  section 6050T of this title ] (or the amendments made by this title), other than provisions relating to COBRA continuation coverage and reporting requirements, shall be construed as creating any new mandate on any party regarding health insurance coverage.”\nPub. L. 114–27, title IV, §\u202f407(g) ,  June 29, 2015 ,  129 Stat. 383 , provided that:  “As soon as possible after the date of the enactment of this Act [ June 29, 2015 ], the Secretaries of the Treasury, Health and Human Services, and Labor (or such Secretaries’ delegates) and the Director of the Pension Benefit Guaranty Corporation (or the Director’s delegate) shall carry out programs of public outreach, including on the Internet, to inform potential eligible individuals (as defined in section 35(c)(1) of the Internal Revenue Code of 1986) of the extension of the credit under section 35 of the Internal Revenue Code of 1986 and the availability of the election to claim such credit retroactively for coverage months beginning after  December 31, 2013 .”\nPub. L. 111–5, div. B, title I, §\u202f1899I ,  Feb. 17, 2009 ,  123 Stat. 431 , provided that: \n “(a)   Survey.— “(1)   In general .— The Secretary of the Treasury shall conduct a biennial survey of eligible individuals (as defined in section 35(c) of the Internal Revenue Code of 1986) relating to the health coverage tax credit under section 35 of the Internal Revenue Code of 1986 (hereinafter in this section referred to as the ‘health coverage tax credit’). \n \n “(2)   Information obtained .— The survey conducted under subsection (a) shall obtain the following information: “(A)  HCTC  participants .— In the case of eligible individuals receiving the health coverage tax credit (including individuals participating in the health coverage tax credit program under section 7527 of such Code, hereinafter in this section referred to as the ‘HCTC program’)— “(i)  demographic information of such individuals, including income and education levels, \n \n “(ii)  satisfaction of such individuals with the enrollment process in the HCTC program, \n \n “(iii)  satisfaction of such individuals with available health coverage options under the credit, including level of premiums, benefits, deductibles, cost-sharing requirements, and the adequacy of provider networks, and \n \n “(iv)  any other information that the Secretary determines is appropriate. \n \n \n “(B)   Non-HCTC participants .— In the case of eligible individuals not receiving the health coverage tax credit— “(i)  demographic information of each individual, including income and education levels, \n \n “(ii)  whether the individual was aware of the health coverage tax credit or the HCTC program, \n \n “(iii)  the reasons the individual has not enrolled in the HCTC program, including whether such reasons include the burden of the process of enrollment and the affordability of coverage, \n \n “(iv)  whether the individual has health insurance coverage, and, if so, the source of such coverage, and \n \n “(v)  any other information that the Secretary determines is appropriate. \n \n \n \n “(3)   Report .— Not later than December 31 of each year in which a survey is conducted under paragraph (1) (beginning in 2010), the Secretary of the Treasury shall report to the Committee on Finance and the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Ways and Means, the Committee on Education and Labor [now Committee on Education and the Workforce], and the Committee on Energy and Commerce of the House of Representatives the findings of the most recent survey conducted under paragraph (1). \n \n \n “(b)   Report .— Not later than October 1 of each year (beginning in 2010), the Secretary of the Treasury (after consultation with the Secretary of Health and Human Services, and, in the case of the information required under paragraph (7), the Secretary of Labor) shall report to the Committee on Finance and the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Ways and Means, the Committee on Education and Labor [now Committee on Education and the Workforce], and the Committee on Energy and Commerce of the House of Representatives the following information with respect to the most recent taxable year ending before such date: “(1)  In each State and nationally— “(A)  the total number of eligible individuals (as defined in section 35(c) of the Internal Revenue Code of 1986) and the number of eligible individuals receiving the health coverage tax credit, \n \n “(B)  the total number of such eligible individuals who receive an advance payment of the health coverage tax credit through the HCTC program, \n \n “(C)  the average length of the time period of the participation of eligible individuals in the HCTC program, and \n \n “(D)  the total number of participating eligible individuals in the HCTC program who are enrolled in each category of coverage as described in section 35(e)(1) of such Code, \n \n\n with respect to each category of eligible individuals described in section 35(c)(1) of such Code. \n \n “(2)  In each State and nationally, an analysis of— “(A)  the range of monthly health insurance premiums, for self-only coverage and for family coverage, for individuals receiving the health coverage tax credit, and \n \n “(B)  the average and median monthly health insurance premiums, for self-only coverage and for family coverage, for individuals receiving the health coverage tax credit, \n \n\n with respect to each category of coverage as described in section 35(e)(1) of such Code. \n \n “(3)  In each State and nationally, an analysis of the following information with respect to the health insurance coverage of individuals receiving the health coverage tax credit who are enrolled in coverage described in subparagraphs (B) through (H) of section 35(e)(1) of such Code: “(A)  Deductible amounts. \n \n “(B)  Other out-of-pocket cost-sharing amounts. \n \n “(C)  A description of any annual or lifetime limits on coverage or any other significant limits on coverage services, or benefits. \n \n\n The information required under this paragraph shall be reported with respect to each category of coverage described in such subparagraphs. \n \n “(4)  In each State and nationally, the gender and average age of eligible individuals (as defined in section 35(c) of such Code) who receive the health coverage tax credit, in each category of coverage described in section 35(e)(1) of such Code, with respect to each category of eligible individuals described in such section. \n \n “(5)  The steps taken by the Secretary of the Treasury to increase the participation rates in the HCTC program among eligible individuals, including outreach and enrollment activities. \n \n “(6)  The cost of administering the HCTC program by function, including the cost of subcontractors, and recommendations on ways to reduce administrative costs, including recommended statutory changes. \n \n “(7)  The number of States applying for and receiving national emergency grants under [former] section 173(f) of the Workforce Investment Act of 1998 ([former]  29 U.S.C. 2918(f) ), the activities funded by such grants on a State-by-State basis, and the time necessary for application approval of such grants.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence.\nExcept as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $8,000.\nIn the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting “$4,000” for “$8,000”.\nIf two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $8,000.\nIn the case of a taxpayer to whom a credit under subsection (a) is allowed by reason of subsection (c)(6), subparagraphs (A), (B), and (C) shall be applied by substituting “$6,500” for “$8,000” and “$3,250” for “$4,000”.\nFor purposes of subparagraph (A), the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.\nNo credit shall be allowed under subsection (a) for the purchase of any residence if the purchase price of such residence exceeds $800,000.\nNo credit shall be allowed under subsection (a) with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section 7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer’s spouse meets such age requirement.\nThe term “first-time homebuyer” means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.\nThe term “principal residence” has the same meaning as when used in section 121.\nA residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence.\nThe term “purchase price” means the adjusted basis of the principal residence on the date such residence is purchased.\nA person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants).\nIn the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.\nIf the Secretary requires information reporting under section 6045 by a person described in subsection (e)(2) thereof to verify the eligibility of taxpayers for the credit allowable by this section, the exception provided by section 6045(e) shall not apply.\nExcept as otherwise provided in this subsection, if a credit under subsection (a) is allowed to a taxpayer, the tax imposed by this chapter shall be increased by 6⅔ percent of the amount of such credit for each taxable year in the recapture period.\nIn the case of the sale of the principal residence to a person who is not related to the taxpayer, the increase in tax determined under paragraph (2) shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection (a) to the extent not previously recaptured under paragraph (1).\nParagraphs (1) and (2) shall not apply to any taxable year ending after the date of the taxpayer’s death.\nParagraph (2) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (2). Paragraph (2) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence.\nAny term used in this subparagraph which is also used in paragraph (9) of section 121(d) shall have the same meaning as when used in such paragraph.\nIn the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection.\nIf the tax imposed by this chapter for the taxable year is increased under this subsection, the taxpayer shall, notwithstanding section 6012, be required to file a return with respect to the taxes imposed under this subtitle.\nFor purposes of this subsection, the term “recapture period” means the 15 taxable years beginning with the second taxable year following the taxable year in which the purchase of the principal residence for which a credit is allowed under subsection (a) was made.\nIn the case of a purchase of a principal residence after  December 31, 2008 , a taxpayer may elect to treat such purchase as made on December 31 of the calendar year preceding such purchase for purposes of this section (other than subsections (b)(4), (c), (f)(4)(D), and (h)).\nThis section shall only apply to a principal residence purchased by the taxpayer on or after  April 9, 2008 , and before  May 1, 2010 .\nIn the case of any taxpayer who enters into a written binding contract before  May 1, 2010 , to close on the purchase of a principal residence before  July 1, 2010 , and who purchases such residence before  October 1, 2010 , paragraph (1) shall be applied by substituting “ October 1, 2010 ” for “ May 1, 2010 ”.\nA prior section 36 was renumbered  section 37 of this title .\nAnother prior section 36, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 15 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title V, §\u202f501(b)(2) , title X, §\u202f1011(c), title XIX, §\u202f1901(b)(1)(A),  90 Stat. 1558 , 1611, 1790, directed that credits provided by section 32 not be allowed if an individual elects under section 144 to take standard deduction, prior to repeal by  Pub. L. 95–30, title I , §§\u202f101(d)(3), 106(a),  May 23, 1977 ,  91 Stat. 133 , 141, applicable to taxable years beginning after  Dec. 31, 1976 .\n2010—Subsec. (h)(2).  Pub. L. 111–198, §\u202f2(a) , substituted “and who purchases such residence before  October 1, 2010 , paragraph (1) shall be applied by substituting ‘ October 1, 2010 ’\u202f” for “paragraph (1) shall be applied by substituting ‘ July 1, 2010 ’\u202f”.\nSubsec. (h)(3)(B).  Pub. L. 111–198, §\u202f2(b) , inserted “,\u2000and for ‘ October 1, 2010 ’\u202f” after “for ‘ July 1, 2010 ’\u202f”.\n2009—Subsec. (b)(1)(A).  Pub. L. 111–5, §\u202f1006(b)(1) , substituted “$8,000” for “$7,500”.\nSubsec. (b)(1)(B).  Pub. L. 111–5, §\u202f1006(b) , substituted “$4,000” for “$3,750” and “$8,000” for “$7,500”.\nSubsec. (b)(1)(C).  Pub. L. 111–5, §\u202f1006(b)(1) , substituted “$8,000” for “$7,500”.\nSubsec. (b)(1)(D).  Pub. L. 111–92, §\u202f11(c)(1) , added subpar. (D).\nSubsec. (b)(2)(A)(i)(II).  Pub. L. 111–92, §\u202f11(c)(2) , substituted “$125,000 ($225,000” for “$75,000 ($150,000”.\nSubsec. (b)(3).  Pub. L. 111–92, §\u202f11(d) , added par. (3).\nSubsec. (b)(4).  Pub. L. 111–92, §\u202f12(a)(1) , added par. (4).\nSubsec. (c)(3)(A)(i).  Pub. L. 111–92, §\u202f12(c) , inserted “(or, if married, such individual’s spouse)” after “person acquiring such property”.\nSubsec. (c)(6).  Pub. L. 111–92, §\u202f11(b) , added par. (6).\nSubsec. (d).  Pub. L. 111–5, §\u202f1006(d)(2) , (e), redesignated pars. (3) and (4) as (1) and (2), respectively, and struck out former pars. (1) and (2) which read as follows:\n“(1) a credit under section 1400C (relating to first-time homebuyer in the District of Columbia) is allowable to the taxpayer (or the taxpayer’s spouse) for such taxable year or any prior taxable year,\n“(2) the residence is financed by the proceeds of a qualified mortgage issue the interest on which is exempt from tax under section 103,”.\nSubsec. (d)(3).  Pub. L. 111–92, §\u202f11(g) , added par. (3).\nSubsec. (d)(4).  Pub. L. 111–92, §\u202f12(b) , added par. (4).\nSubsec. (f)(4)(D).  Pub. L. 111–92, §\u202f11(a)(2) , inserted “and 2010” after “2009” in heading and struck out “,\u2000and before  December 1, 2009 ” after “ December 31, 2008 ” in introductory provisions.\nPub. L. 111–5, §\u202f1006(c)(1) , added subpar. (D).\nSubsec. (f)(4)(E).  Pub. L. 111–92, §\u202f11(e) , added subpar. (E).\nSubsec. (g).  Pub. L. 111–92, §\u202f12(a)(2) , inserted “(b)(4),” before “(c)”.\nPub. L. 111–92, §\u202f11(a)(3) , amended subsec. (g) generally. Prior to amendment, text read as follows: “In the case of a purchase of a principal residence after  December 31, 2008 , and before  December 1, 2009 , a taxpayer may elect to treat such purchase as made on  December 31, 2008 , for purposes of this section (other than subsections (c) and (f)(4)(D)).”\nPub. L. 111–5, §\u202f1006(a)(2) , (c)(2), substituted “ December 1, 2009 ” for “ July 1, 2009 ” and “subsections (c) and (f)(4)(D)” for “subsection (c)”.\nSubsec. (h).  Pub. L. 111–92, §\u202f11(a)(1) , substituted “ May 1, 2010 ” for “ December 1, 2009 ”, designated existing provisions as par. (1), inserted heading, and added par. (2).\nPub. L. 111–5, §\u202f1006(a)(1) , substituted “ December 1, 2009 ” for “ July 1, 2009 ”.\nSubsec. (h)(3).  Pub. L. 111–92, §\u202f11(f) , added par. (3).\nPub. L. 111–198, §\u202f2(c) ,  July 2, 2010 ,  124 Stat. 1356 , provided that:  “The amendments made by this section [amending this section] shall apply to residences purchased after  June 30, 2010 .”\nPub. L. 111–92, §\u202f11(j)(1) –(3),  Nov. 6, 2009 ,  123 Stat. 2991 , provided that: \n “(1)   In general .— The amendments made by subsections (b), (c), (d), and (g) [amending this section] shall apply to residences purchased after the date of the enactment of this Act [ Nov. 6, 2009 ]. \n \n “(2)   Extensions .— The amendments made by subsections (a) [amending this section], (f) [amending this section], and (i) [amending  section 1400C of this title ] shall apply to residences purchased after  November 30, 2009 . \n \n “(3)   Waiver of recapture .— The amendment made by subsection (e) [amending this section] shall apply to dispositions and cessations after  December 31, 2008 .”\nPub. L. 111–92, §\u202f12(e) ,  Nov. 6, 2009 ,  123 Stat. 2992 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 6213 of this title ] shall apply to purchases after the date of the enactment of this Act [ Nov. 6, 2009 ]. \n \n “(2)   Documentation requirement .— The amendments made by subsection (b) [amending this section] shall apply to returns for taxable years ending after the date of the enactment of this Act [ Nov. 6, 2009 ]. \n \n “(3)   Treatment as mathematical and clerical errors .— The amendments made by subsection (d) [amending  section 6213 of this title ] shall apply to returns for taxable years ending on or after  April 9, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1006(f) ,  Feb. 17, 2009 ,  123 Stat. 317 , provided that:  “The amendments made by this section [amending this section and  section 1400C of this title ] shall apply to residences purchased after  December 31, 2008 .”\nSection applicable to residences purchased on or after  Apr. 9, 2008 , in taxable years ending on or after such date, see  section 3011(c) of Pub. L. 110–289 , set out as an Effective Date of 2008 Amendment note under  section 26 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 111–5, div. B, title I, §\u202f1001(a) ,  Feb. 17, 2009 ,  123 Stat. 309 , related to making work pay credit.\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1001(b) ,  Feb. 17, 2009 ,  123 Stat. 310 , with respect to taxable years beginning in 2009 and 2010, required the Secretary of the Treasury to pay each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the making work pay credit and to pay certain possessions without a mirror code tax system amounts estimated as being equal to aggregate benefits that would have been provided to its residents, and provided that, for purposes of  section 1324(b)(2) of Title 31 , Money and Finance, such payments to possessions would be treated in the same manner as a refund due from the credit formerly allowed under this section.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.\nThe term “premium assistance credit amount” means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occurring during the taxable year.\nExcept as provided in clause (ii), the applicable percentage for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier: \n \n \n \n \n \n \n \n In the case of household income (expressed as a percent of poverty line) within the following income tier: The initial premium percentage is— The final premium percentage is— \n \n \n Up to 133% 2.0% 2.0% \n 133% up to 150% 3.0% 4.0% \n 150% up to 200% 4.0% 6.3% \n 200% up to 250% 6.3% 8.05% \n 250% up to 300% 8.05% 9.5% \n 300% up to 400% 9.5% 9.5%.\nSubject to subclause (II), in the case of taxable years beginning in any calendar year after 2014, the initial and final applicable percentages under clause (i) (as in effect for the preceding calendar year after application of this clause) shall be adjusted to reflect the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year.\nExcept as provided in subclause (III), in the case of any calendar year after 2018, the percentages described in subclause (I) shall, in addition to the adjustment under subclause (I), be adjusted to reflect the excess (if any) of the rate of premium growth estimated under subclause (I) for the preceding calendar year over the rate of growth in the consumer price index for the preceding calendar year.\nSubclause (II) shall apply for any calendar year only if the aggregate amount of premium tax credits under this section and cost-sharing reductions under section 1402 of the Patient Protection and Affordable Care Act for the preceding calendar year exceeds an amount equal to 0.504 percent of the gross domestic product for the preceding calendar year.\nThe adjusted monthly premium for an applicable second lowest cost silver plan is the monthly premium which would have been charged (for the rating area with respect to which the premiums under paragraph (2)(A) were determined) for the plan if each individual covered under a qualified health plan taken into account under paragraph (2)(A) were covered by such silver plan and the premium was adjusted only for the age of each such individual in the manner allowed under section 2701 of the Public Health Service Act. In the case of a State participating in the wellness discount demonstration project under section 2705(d) of the Public Health Service Act, the adjusted monthly premium shall be determined without regard to any premium discount or rebate under such project.\nFor purposes of determining the amount of any monthly premium, if an individual enrolls in both a qualified health plan and a plan described in section 1311(d)(2)(B)(ii)(I)\u202f 2  of the Patient Protection and Affordable Care Act for any plan year, the portion of the premium for the plan described in such section that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a qualified health plan under section 1302(b)(1)(J) of such Act shall be treated as a premium payable for a qualified health plan.\nThe term “applicable taxpayer” means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.\nIf the taxpayer is married (within the meaning of section 7703) at the close of the taxable year, the taxpayer shall be treated as an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.\nNo credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.\nIn the case of a taxable year beginning after  December 31, 2020 , and before  January 1, 2026 , subparagraph (A) shall be applied without regard to “but does not exceed 400 percent”.\nThe term “coverage month” shall not include any month with respect to an individual if for such month the individual is eligible for minimum essential coverage other than eligibility for coverage described in section 5000A(f)(1)(C) (relating to coverage in the individual market).\nThe term “minimum essential coverage” has the meaning given such term by section 5000A(f).\nExcept as provided in clause (iii), an employee shall not be treated as eligible for minimum essential coverage if such coverage consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) and the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs.\nClauses (i) and (ii) shall not apply if the employee (or any individual described in the last sentence of clause (i)) is covered under the eligible employer-sponsored plan or the grandfathered health plan.\nIn the case of plan years beginning in any calendar year after 2014, the Secretary shall adjust the 9.5 percent under clause (i)(II) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii).\nThe term “qualified health plan” has the meaning given such term by section 1301(a) of the Patient Protection and Affordable Care Act, except that such term shall not include a qualified health plan which is a catastrophic plan described in section 1302(e) of such Act.\nThe term “grandfathered health plan” has the meaning given such term by section 1251 of the Patient Protection and Affordable Care Act.\nThe term “coverage month” shall not include any month with respect to an employee (or any spouse or dependent of such employee) if for such month the employee is provided a qualified small employer health reimbursement arrangement which constitutes affordable coverage.\nIn the case of any employee who is provided a qualified small employer health reimbursement arrangement for any coverage month (determined without regard to subparagraph (A)), the credit otherwise allowable under subsection (a) to the taxpayer for such month shall be reduced (but not below zero) by the amount described in subparagraph (C)(i)(II) for such month.\nFor purposes of this paragraph, the term “qualified small employer health reimbursement arrangement” has the meaning given such term by section 9831(d)(2).\nIn the case of an employee who is provided a qualified small employer health reimbursement arrangement for less than an entire year, subparagraph (C)(i)(II) shall be applied by substituting “the number of months during the year for which such arrangement was provided” for “12”.\nIn the case of plan years beginning in any calendar year after 2014, the Secretary shall adjust the 9.5 percent amount under subparagraph (C)(ii) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii).\nThe family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year.\nThe term “poverty line” has the meaning given that term in section 2110(c)(5) of the Social Security Act ( 42 U.S.C. 1397jj(c)(5) ).\nIn the case of any qualified health plan offered through an Exchange for coverage during a taxable year beginning in a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of the regular enrollment period for coverage during such calendar year.\nFor purposes of this section, an individual shall be treated as lawfully present only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States.\nThe Secretary of Health and Human Services, in consultation with the Secretary, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section.\nThe amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 1412 of the Patient Protection and Affordable Care Act.\nIf the advance payments to a taxpayer under section 1412 of the Patient Protection and Affordable Care Act for a taxable year exceed the credit allowed by this section (determined without regard to paragraph (1)), the tax imposed by this chapter for the taxable year shall be increased by the amount of such excess.\nIn the case of a taxpayer whose household income is less than 400 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed the applicable dollar amount determined in accordance with the following table (one-half of such amount in the case of a taxpayer whose tax is determined under section 1(c)\u202f 2  for the taxable year): \n \n \n \n \n \n \n If the household income (expressed as a percent of poverty line) is: The applicable dollar amount is: \n \n \n Less than 200% $600 \n At least 200% but less than 300% $1,500 \n At least 300% but less than 400% $2,500.\nIn the case of any taxable year beginning in 2020, for any taxpayer who files for such taxable year an income tax return reconciling any advance payment of the credit under this section, the Secretary shall treat subparagraph (A) as not applying.\nFor purposes of this subsection, the term “unemployment compensation” has the meaning given such term in section 85(b).\nFor purposes of this subsection, a taxpayer shall not be treated as having received (or been approved to receive) unemployment compensation for any week unless such taxpayer provides self-attestation of, and such documentation as the Secretary shall prescribe which demonstrates, such receipt or approval.\nParagraph (1)(A) shall not affect the application of subsection (c)(1)(C).\nParagraph (1)(B) shall not apply to any determination of household income for purposes of paragraph (2)(C)(i)(II) or (4)(C)(ii) of subsection (c)\u202f 4 4 \u202fSo in original. Probably should be followed by a period.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSections 1251, 1301, 1302, 1311, 1321, 1402, and 1412 of the Patient Protection and Affordable Care Act, referred to in text, are classified to sections 18011, 18021, 18022, 18031, 18041, 18071, and 18082, respectively, of Title 42, The Public Health and Welfare.\nSection 1(c), referred to in subsecs. (b)(3)(B)(ii)(I)(aa) and (f)(2)(B)(i), to be treated, for purposes of the rate of tax, as a reference to the corresponding rate bracket under  section 1(j)(2)(C) of this title , see  section 1(j)(2)(F) of this title .\nSections 2701 and 2705(d) of the Public Health Service Act, referred to in subsec. (b)(3)(C), are classified to sections 300gg and 300gg–4(d), respectively, of Title 42, The Public Health and Welfare. The reference to section 2705(d) probably should be a reference to section 2705( l ), which relates to wellness program demonstration project and is classified to section 300gg–4( l ) of Title 42.\nSection 1311(d)(2)(B)(ii)(I) of the Patient Protection and Affordable Care Act, referred to in subsec. (b)(3)(E), probably means  section 1311(d)(2)(B)(ii) of Pub. L. 111–148 , which is classified to  section 18031(d)(2)(B)(ii) of Title 42 , The Public Health and Welfare, and which does not contain subclauses.\nThe Social Security Act, referred to in subsec. (c)(1)(B)(ii), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title XIX of the Act is classified generally to subchapter XIX (§\u202f1396 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2022—Subsec. (b)(3)(A)(iii).  Pub. L. 117–169, §\u202f12001(a) , substituted “2021 through 2025” for “2021 and 2022” in heading and “after  December 31, 2020 , and before  January 1, 2026 ” for “in 2021 or 2022” in introductory provisions.\nSubsec. (c)(1)(E).  Pub. L. 117–169, §\u202f12001(b) , substituted “2021 through 2025” for “2021 and 2022” in heading and “after  December 31, 2020 , and before  January 1, 2026 ” for “in 2021 or 2022” in text.\n2021—Subsec. (b)(3)(A)(iii).  Pub. L. 117–2, §\u202f9661(a) , added cl. (iii).\nSubsec. (c)(1)(E).  Pub. L. 117–2, §\u202f9661(b) , added subpar. (E).\nSubsec. (f)(2)(B)(iii).  Pub. L. 117–2, §\u202f9662(a) , added cl. (iii).\nSubsecs. (g), (h).  Pub. L. 117–2, §\u202f9663(a) , added subsec. (g) and redesignated former subsec. (g) as (h).\n2017—Subsec. (f)(2)(B)(ii)(II).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2016—Subsec. (c)(4).  Pub. L. 114–255  added par. (4).\n2011—Subsec. (c)(2)(D).  Pub. L. 112–10  struck out subpar. (D). Prior to amendment, text read as follows: “The term ‘coverage month’ shall not include any month in which such individual has a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act.”\nSubsec. (d)(2)(B)(iii).  Pub. L. 112–56  added cl. (iii).\nSubsec. (f)(2)(B)(i).  Pub. L. 112–9  amended cl. (i) generally. Prior to amendment, cl. (i) consisted of text and a table limiting increase in amount recovered on reconciliation of health insurance tax credit and advance of that credit for households with income below 500 percent of Federal poverty line.\n2010—Subsec. (b)(3)(A)(i).  Pub. L. 111–152, §\u202f1001(a)(1)(A) , substituted “for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier:” for “with respect to any taxpayer for any taxable year is equal to 2.8 percent, increased by the number of percentage points (not greater than 7) which bears the same ratio to 7 percentage points as—” in introductory provisions, inserted table, and struck out subcls. (I) and (II) which read as follows:\n“(I) the taxpayer’s household income for the taxable year in excess of 100 percent of the poverty line for a family of the size involved, bears to\n“(II) an amount equal to 200 percent of the poverty line for a family of the size involved.”\nSubsec. (b)(3)(A)(ii).  Pub. L. 111–152, §\u202f1001(a)(1)(B) , added cl. (ii) and struck out former cl. (ii). Text read as follows: “If a taxpayer’s household income for the taxable year equals or exceeds 100 percent, but not more than 133 percent, of the poverty line for a family of the size involved, the taxpayer’s applicable percentage shall be 2 percent.”\nPub. L. 111–148, §\u202f10105(a) , substituted “equals or exceeds” for “is in excess of”.\nSubsec. (b)(3)(A)(iii).  Pub. L. 111–152, §\u202f1001(a)(1)(B) , struck out cl. (iii). Text read as follows: “In the case of taxable years beginning in any calendar year after 2014, the Secretary shall adjust the initial and final applicable percentages under clause (i), and the 2 percent under clause (ii), for the calendar year to reflect the excess of the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period.”\nSubsec. (c)(1)(A).  Pub. L. 111–148, §\u202f10105(b) , inserted “equals or” before “exceeds”.\nSubsec. (c)(2)(C)(i)(II).  Pub. L. 111–152, §\u202f1001(a)(2)(A) , substituted “9.5 percent” for “9.8 percent”.\nSubsec. (c)(2)(C)(iv).  Pub. L. 111–152, §\u202f1001(a)(2) , substituted “9.5 percent” for “9.8 percent” and “(b)(3)(A)(ii)” for “(b)(3)(A)(iii)”.\nPub. L. 111–148, §\u202f10105(c) , substituted “subsection (b)(3)(A)(iii)” for “subsection (b)(3)(A)(ii)”.\nSubsec. (c)(2)(D).  Pub. L. 111–148, §\u202f10108(h)(1) , added subpar. (D).\nSubsec. (d)(2)(A)(i), (ii).  Pub. L. 111–152, §\u202f1004(a)(1)(A) , substituted “modified adjusted gross” for “modified gross”.\nSubsec. (d)(2)(B).  Pub. L. 111–152, §\u202f1004(a)(2)(A) , amended subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘modified gross income’ means gross income—\n“(i) decreased by the amount of any deduction allowable under paragraph (1), (3), (4), or (10) of section 62(a),\n“(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, and\n“(iii) determined without regard to sections 911, 931, and 933.”\nSubsec. (f)(2)(B).  Pub. L. 111–309, §\u202f208(a) , amended generally subpar. heading and cl. (i). Prior to amendment, text of cl. (i) read as follows: “In the case of an applicable taxpayer whose household income is less than 400 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed $400 ($250 in the case of a taxpayer whose tax is determined under section 1(c) for the taxable year).”\nSubsec. (f)(2)(B)(ii).  Pub. L. 111–309, §\u202f208(b) , inserted “in the table contained” after “each of the dollar amounts” in introductory provisions.\nSubsec. (f)(3).  Pub. L. 111–152, §\u202f1004(c) , added par. (3).\nPub. L. 117–169, title I, §\u202f12001(c) ,  Aug. 16, 2022 ,  136 Stat. 1906 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2022 .”\nPub. L. 117–2, title IX, §\u202f9661(c) ,  Mar. 11, 2021 ,  135 Stat. 183 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 117–2, title IX, §\u202f9662(b) ,  Mar. 11, 2021 ,  135 Stat. 183 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2019 .”\nPub. L. 117–2, title IX, §\u202f9663(b) ,  Mar. 11, 2021 ,  135 Stat. 184 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 114–255, div. C, title XVIII, §\u202f18001(a)(7) ,  Dec. 13, 2016 ,  130 Stat. 1343 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section, sections 106, 4980I, 6051, 6652, and 9831 of this title, and  section 18081 of Title 42 , The Public Health and Welfare] shall apply to years beginning after  December 31, 2016 . \n \n “(B)   Transition relief .— The relief under Treasury Notice 2015–17 shall be treated as applying to any plan year beginning on or before  December 31, 2016 . \n \n “(C)   Coordination with health insurance premium credit .— The amendments made by paragraph (3) [amending this section] shall apply to taxable years beginning after  December 31, 2016 . \n \n “(D)   Employee notice.— “(i)   In general .— The amendments made by paragraph (5) [amending  section 6652 of this title ] shall apply to notices with respect to years beginning after  December 31, 2016 . \n \n “(ii)   Transition relief .— For purposes of section 6652( o ) of the Internal Revenue Code of 1986 (as added by this Act), a person shall not be treated as failing to provide a written notice as required by section 9831(d)(4) of such Code if such notice is so provided not later than 90 days after the date of the enactment of this Act [ Dec. 13, 2016 ]. \n \n \n “(E)   W–2 reporting .— The amendments made by paragraph (6)(A) [amending  section 6051 of this title ] shall apply to calendar years beginning after  December 31, 2016 . \n \n “(F)   Information provided by exchange subsidy applicants.— “(i)   In general .— The amendments made by paragraph (6)(B) [amending  section 18081 of Title 42 ] shall apply to applications for enrollment made after  December 31, 2016 . \n \n “(ii)   Verification .— Verification under section 1411 of the Patient Protection and Affordable Care Act [ 42 U.S.C. 18081 ] of information provided under section 1411(b)(3)(B) of such Act shall apply with respect to months beginning after October 2016. \n \n “(iii)   Transitional relief .— In the case of an application for enrollment under section 1411(b) of the Patient Protection and Affordable Care Act [ 42 U.S.C. 18081(b) ] made before  April 1, 2017 , the requirement of section 1411(b)(3)(B) of such Act shall be treated as met if the information described therein is provided not later than 30 days after the date on which the applicant receives the notice described in section 9831(d)(4) of the Internal Revenue Code of 1986.”\nPub. L. 112–56, title IV, §\u202f401(b) ,  Nov. 21, 2011 ,  125 Stat. 734 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Nov. 21, 2011 ].”\nPub. L. 112–10, div. B, title VIII, §\u202f1858(d) ,  Apr. 15, 2011 ,  125 Stat. 169 , provided that:  “The amendments made by this section [amending this section, sections 162, 4980H, and 6056 of this title, and  section 218b of Title 29 , Labor, and repealing  section 139D of this title  and  section 18101 of Title 42 , The Public Health and Welfare] shall take effect as if included in the provisions of, and the amendments made by, the provisions of the Patient Protection and Affordable Care Act [ Pub. L. 111–148 ] to which they relate.”\nPub. L. 112–9, §\u202f4(b) ,  Apr. 14, 2011 ,  125 Stat. 37 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 2013 .”\nPub. L. 111–309, title II, §\u202f208(c) ,  Dec. 15, 2010 ,  124 Stat. 3292 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 111–148, title X, §\u202f10108(h)(2) ,  Mar. 23, 2010 ,  124 Stat. 914 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 111–148, title I, §\u202f1401(e) ,  Mar. 23, 2010 ,  124 Stat. 220 , provided that:  “The amendments made by this section [enacting this section and amending sections 280C and 6211 of this title and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years ending after  December 31, 2013 .”\nPub. L. 114–255, div. C, title XVIII, §\u202f18001(a)(8) ,  Dec. 13, 2016 ,  130 Stat. 1343 , provided that:  “The Secretary of the Treasury (or his designee) may issue substantiation requirements as necessary to carry out this subsection [amending this section, sections 106, 4980I, 6051, 6652, and 9831 of this title, and  section 18081 of Title 42 , The Public Health and Welfare, and enacting provisions set out as a note under this section].”\nPub. L. 112–56, title IV, §\u202f401(c) ,  Nov. 21, 2011 ,  125 Stat. 734 , provided that: \n “(1)   Estimate of secretary .— The Secretary of the Treasury, or the Secretary’s delegate, shall annually estimate the impact that the amendments made by subsection (a) [amending this section] have on the income and balances of the trust funds established under section 201 of the Social Security Act ( 42 U.S.C. 401 ). \n \n “(2)   Transfer of funds .— If, under paragraph (1), the Secretary of the Treasury or the Secretary’s delegate estimates that such amendments have a negative impact on the income and balances of such trust funds, the Secretary shall transfer, not less frequently than quarterly, from the general fund an amount sufficient so as to ensure that the income and balances of such trust funds are not reduced as a result of such amendments.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For credit against the tax imposed by this subtitle for overpayments of tax, see section 6401.\nA prior section 37 was renumbered  section 22 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of this paragraph, the term “empowerment zone employment credit” means the portion of the credit under subsection (a) which is attributable to the credit determined under section 1396 (relating to empowerment zone employment credit).\nFor purposes of paragraph (4)(B)(ii), any credit determined under section 41 with respect to a partnership or S corporation shall not be treated as a specified credit by any partner or shareholder unless such partner or shareholder meets the gross receipts test under subparagraph (A) for the taxable year in which such credit is treated as a current year business credit.\nIn the case of a husband or wife who files a separate return, the amount specified under subparagraph (B) of paragraph (1) shall be $12,500 in lieu of $25,000. This subparagraph shall not apply if the spouse of the taxpayer has no business credit carryforward or carryback to, and has no current year business credit for, the taxable year of such spouse which ends within or with the taxpayer’s taxable year.\nIn the case of a controlled group, the $25,000 amount specified under subparagraph (B) of paragraph (1) shall be reduced for each component member of such group by apportioning $25,000 among the component members of such group in such manner as the Secretary shall by regulations prescribe. For purposes of the preceding sentence, the term “controlled group” has the meaning given to such term by section 1563(a).\nIn the case of a person described in subparagraph (A) or (B) of section 46(e)(1) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990), the $25,000 amount specified under subparagraph (B) of paragraph (1) shall equal such person’s ratable share (as determined under section 46(e)(2) (as so in effect) of such amount.\nIn the case of an estate or trust, the $25,000 amount specified under subparagraph (B) of paragraph (1) shall be reduced to an amount which bears the same ratio to $25,000 as the portion of the income of the estate or trust which is not allocated to beneficiaries bears to the total income of the estate or trust.\nThe order in which such credits are used shall be determined on the basis of the order in which they are listed in subsection (b) as of the close of the taxable year in which the credit is used.\nThe order in which the credits listed in section 46 are used shall be determined on the basis of the order in which such credits are listed in section 46 as of the close of the taxable year in which the credit is used.\nPub. L. 117–169, title I, §\u202f13701(b)(1) , (c),  Aug. 16, 2022 ,  136 Stat. 1990 , provided that, applicable to facilities placed in service after  Dec. 31, 2024 , subsection (b) of this section is amended by striking “plus” at the end of paragraph (37), striking the period at the end of paragraph (38) and inserting “,\u2000plus”, and adding at the end the following new paragraph:\n(39) the clean electricity production credit determined under section 45Y(a).\nSee 2022 Amendment note below.\nPub. L. 117–169, title I, §\u202f13704(b)(3) , (c),  Aug. 16, 2022 ,  136 Stat. 2002 , 2003, provided that, applicable to transportation fuel produced after  Dec. 31, 2024 , subsection (b) of this section is amended by striking “plus” at the end of paragraph (38), striking the period at the end of paragraph (39) and inserting “,\u2000plus”, and adding at the end the following new paragraph:\n(40) the clean fuel production credit determined under section 45Z(a).\nSee 2022 Amendment note below.\nThe date of the enactment of this paragraph, referred to in subsec. (c)(4)(B)(iv)(I), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (c)(6)(C), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nA prior section 38, added  Pub. L. 87–834, §\u202f2(a) ,  Oct. 16, 1962 ,  76 Stat. 962 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to investment in certain depreciable property, prior to repeal by  Pub. L. 98–369, div. A, title IV, §\u202f474(m)(1) ,  July 18, 1984 ,  98 Stat. 833 .\nAnother prior section 38 was renumbered  section 37 of this title .\n2022—Subsec. (b)(30).  Pub. L. 117–169, §\u202f13401(i)(3) , substituted “clean” for “qualified plug-in electric drive motor”.\nSubsec. (b)(34).  Pub. L. 117–169, §\u202f13105(b)(1) , added par. (34).\nSubsec. (b)(35).  Pub. L. 117–169, §\u202f13203(b) , added par. (35).\nSubsec. (b)(36).  Pub. L. 117–169, §\u202f13204(a)(4)(A) , added par. (36).\nSubsec. (b)(37).  Pub. L. 117–169, §\u202f13403(b)(1) , added par. (37).\nSubsec. (b)(38).  Pub. L. 117–169, §\u202f13502(b)(1) , added par. (38).\nSubsec. (b)(39).  Pub. L. 117–169, §\u202f13701(b)(1) , added par. (39).\nSubsec. (b)(40).  Pub. L. 117–169, §\u202f13704(b)(3) , added par. (40).\nSubsec. (b)(41).  Pub. L. 117–328  added par. (41).\nSubsec. (c)(6)(E).  Pub. L. 117–169, §\u202f10101(d) , amended subpar. (E) generally. Prior to amendment, text read as follows: “In the case of a corporation, this subsection shall be applied by treating the corporation as having a tentative minimum tax of zero.”\n2019—Subsec. (b)(33).  Pub. L. 116–94  added par. (33).\n2018—Subsec. (b)(24), (25).  Pub. L. 115–141, §\u202f401(d)(2)(B) , redesignated pars. (25) and (26) as (24) and (25), respectively, and struck out former par. (24) which read as follows: “the energy efficient appliance credit determined under section 45M(a),”.\nSubsec. (b)(26) to (29).  Pub. L. 115–141, §\u202f401(d)(2)(B) , (6)(B)(i), redesignated pars. (31) to (34) first as (30) to (33), and then as (26) to (29), respectively. Former par. (26) redesignated (25), and former pars. (27) to (29) redesignated (26) to (28), respectively, and then struck out.\nPub. L. 115–141, §\u202f401(d)(2)(B) , (6)(B)(i), redesignated pars. (27) to (30) as (26) to (29), respectively, and then struck them out. Prior to amendment, these four pars. set out credits for the Hurricane Katrina housing credit determined under section 1400P(b), the Hurricane Katrina employee retention credit determined under section 1400R(a), the Hurricane Rita employee retention credit determined under section 1400R(b), and the Hurricane Wilma employee retention credit determined under section 1400R(c).\nSubsec. (b)(30) to (32).  Pub. L. 115–141, §\u202f401(d)(2)(B) , (6)(B)(i), redesignated pars. (35) to (37) first as (34) to (36), and then as (30) to (32), respectively. Former par. (30) redesignated (29) and then struck out, and former pars. (31) and (32) first redesignated (30) and (31), then (26) and (27), respectively.\nSubsec. (b)(33) to (37).  Pub. L. 115–141, §\u202f401(a)(8) , (d)(2)(B), (6)(B)(i), inserted comma at end of par. (34) and subsequently redesignated pars. (33) to (37) first as (32) to (36), and then as (28) to (32), respectively.\nSubsec. (c)(2)(A)(ii)(II).  Pub. L. 115–141, §\u202f401(d)(6)(B)(ii) , struck out “,\u2000the New York Liberty Zone business employee credit,” after “empowerment zone employment credit”.\nPub. L. 115–141, §\u202f401(b)(5)(B) , struck out “the eligible small business credits,” before “and the specified credits”.\nSubsec. (c)(3).  Pub. L. 115–141, §\u202f401(d)(6)(B)(iii) , struck out par. (3) which related to special rules for New York Liberty Zone business employee credit.\nSubsec. (c)(4)(A)(ii)(II).  Pub. L. 115–141, §\u202f401(b)(5)(C) , struck out “the eligible small business credits and” before “the specified credits”.\nSubsec. (c)(4)(B)(ii).  Pub. L. 115–141, §\u202f401(b)(5)(D) , substituted “(as defined in paragraph (5)(A) after application of the rules of paragraph (5)(B))” for “(as defined in paragraph (5)(C), after application of rules similar to the rules of paragraph (5)(D))”.\nSubsec. (c)(5).  Pub. L. 115–141, §\u202f401(b)(5)(A)(i) , substituted “Rules related to eligible small businesses” for “Special rules for eligible small business credits in 2010” in heading.\nSubsec. (c)(5)(A).  Pub. L. 115–141, §\u202f401(b)(5)(A)(i) , (ii), redesignated subpar. (C) as (A) and struck out former subpar. (A) which related to eligible small business credits determined in taxable years beginning in 2010.\nSubsec. (c)(5)(B).  Pub. L. 115–141, §\u202f401(b)(5)(A)(iii) , amended subpar. (B) generally. Prior to amendment, text read as follows: “Credits determined with respect to a partnership or S corporation shall not be treated as eligible small business credits by any partner or shareholder unless such partner or shareholder meets the gross receipts test under subparagraph (C) for the taxable year in which such credits are treated as current year business credits.”\nPub. L. 115–141, §\u202f401(b)(5)(A)(i) , (ii), redesignated subpar. (D) as (B) and struck out former subpar. (B) which defined “eligible small business credits”.\nSubsec. (c)(5)(C), (D).  Pub. L. 115–141, §\u202f401(b)(5)(A)(ii) , redesignated subpars. (C) and (D) as (A) and (B), respectively.\n2017—Subsec. (b)(35) to (37).  Pub. L. 115–97, §\u202f13403(b) , struck out “plus” at end of par. (35), substituted “,\u2000plus” for period at end of par. (36), and added par. (37).\nSubsec. (c)(4)(B)(ix) to (xii).  Pub. L. 115–97, §\u202f13403(c) , added cl. (ix) and redesignated former cls. (ix) to (xi) as (x) to (xii), respectively.\nSubsec. (c)(6)(E).  Pub. L. 115–97, §\u202f12001(b)(1) , added subpar. (E).\n2015—Subsec. (c)(4)(B)(ii) to (iv).  Pub. L. 114–113, §\u202f121(b) , added cl. (ii) and redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively. Former cl. (iv) redesignated (v).\nSubsec. (c)(4)(B)(v) to (x).  Pub. L. 114–113, §\u202f186(d)(1) , added cl. (v) and redesignated former cls. (v) to (ix) as (vi) to (x), respectively. Former cl. (x) redesignated (xi).\nPub. L. 114–113, §\u202f121(b) , redesignated cls. (iv) to (ix) as (v) to (x), respectively.\nSubsec. (c)(4)(B)(xi).  Pub. L. 114–113, §\u202f186(d)(1) , redesignated cl. (x) as (xi).\n2014—Subsec. (b)(35) to (37).  Pub. L. 113–295, §\u202f221(a)(2)(B) , inserted “plus” at end of par. (35), redesignated par. (37) as (36), and struck out former par. (36) which read as follows: “the portion of the qualified plug-in electric vehicle credit to which section 30(c)(1) applies, plus”.\nPub. L. 113–295, §\u202f209(f)(1) , struck out “plus” at end of par. (35), added par. (36), and redesignated former par. (36) as (37). Amendment was executed to subsec. (b) as it appeared after amendment by  Pub. L. 111–148, §\u202f1421(b) , to reflect the probable intent of Congress, despite amendment being effective as if included in the enactment of  Pub. L. 111–5 . See 2010 Amendment and Effective Date of 2014 Amendment notes below.\nSubsec. (c)(2)(A).  Pub. L. 113–295, §\u202f220(b) , substituted “credit” for “credit credit” in introductory provisions.\nSubsec. (d)(3).  Pub. L. 113–295, §\u202f221(a)(6) , struck out par. (3) which related to ordering of credits no longer listed.\n2010—Subsec. (b)(36).  Pub. L. 111–148, §\u202f1421(b) , added par. (36).\nSubsec. (c)(2)(A)(ii)(II).  Pub. L. 111–240, §\u202f2013(c)(1) , inserted “the eligible small business credits,” after “the New York Liberty Zone business employee credit,”.\nSubsec. (c)(3)(A)(ii)(II).  Pub. L. 111–240, §\u202f2013(c)(2) , inserted “,\u2000the eligible small business credits,” after “the New York Liberty Zone business employee credit”.\nSubsec. (c)(4)(A)(ii)(II).  Pub. L. 111–240, §\u202f2013(c)(3) , inserted “the eligible small business credits and” before “the specified credits”.\nSubsec. (c)(4)(B)(vi) to (ix).  Pub. L. 111–148, §\u202f1421(c) , added cl. (vi) and redesignated former cls. (vi) to (viii) as (vii) to (ix), respectively.\nSubsec. (c)(5), (6).  Pub. L. 111–240, §\u202f2013(a) , added par. (5) and redesignated former par. (5) as (6).\n2009—Subsec. (b)(35).  Pub. L. 111–5  substituted “30D(c)(1)” for “30D(d)(1)”.\n2008—Subsec. (b)(32).  Pub. L. 110–246, §\u202f15343(b) , added par. (32).\nSubsec. (b)(33).  Pub. L. 110–245  added par. (33).\nSubsec. (b)(34).  Pub. L. 110–343, §\u202f115(b) , added par. (34).\nSubsec. (b)(35).  Pub. L. 110–343, §\u202f205(c) , added par. (35).\nSubsec. (c)(4)(B)(ii) to (iv).  Pub. L. 110–289, §\u202f3022(b) , added cl. (ii) and redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively. Former cl. (iv) redesignated (v).\nSubsec. (c)(4)(B)(v).  Pub. L. 110–343, §\u202f316(b)(2) , added cl. (v). Former cl. (v) redesignated (vi).\nPub. L. 110–343, §\u202f103(b)(1) , added cl. (v). Former cl. (v) redesignated (vi).\nPub. L. 110–289, §\u202f3022(c) , added cl. (v). Former cl. (v) redesignated (vi).\nPub. L. 110–289, §\u202f3022(b) , redesignated cl. (iv) as (v).\nSubsec. (c)(4)(B)(vi).  Pub. L. 110–343, §\u202f316(b)(1) , redesignated cl. (v) as (vi). Former cl. (vi) redesignated (vii).\nPub. L. 110–343, §\u202f103(b)(2) , substituted “section 46 to the extent that such credit is attributable to the rehabilitation credit under section 47, but only with respect to” for “section 47 to the extent attributable to”.\nPub. L. 110–343, §\u202f103(b)(1) , which directed amendment of subpar. (B) by “redesignating clause (vi) as clause (vi) and (vii), respectively”, was executed by redesignating cls. (v) and (vi) as (vi) and (vii), respectively, to reflect the probable intent of Congress.\nPub. L. 110–289, §\u202f3022(c) , redesignated cl. (v) as (vi).\nSubsec. (c)(4)(B)(vii).  Pub. L. 110–343, §\u202f316(b)(1) , redesignated cl. (vi) as (vii). Former cl. (vii) redesignated (viii).\nPub. L. 110–343, §\u202f103(b)(1) , which directed amendment of subpar. (B) by “redesignating clause (vi) as clause (vi) and (vii), respectively”, was executed by redesignating cls. (v) and (vi) as (vi) and (vii), respectively, to reflect the probable intent of Congress.\nSubsec. (c)(4)(B)(viii).  Pub. L. 110–343, §\u202f316(b)(1) , redesignated cl. (vii) as (viii).\n2007—Subsec. (b)(8), (24).  Pub. L. 110–172, §\u202f11(a)(6)(A) , struck out “and” at end.\nSubsec. (b)(30).  Pub. L. 110–172, §\u202f11(a)(6)(C) , inserted “plus” at end.\nPub. L. 110–172, §\u202f11(a)(6)(B) , struck out “plus” at end.\nSubsec. (c)(4)(B)(iii), (iv).  Pub. L. 110–28  added cls. (iii) and (iv).\n2006—Subsec. (b)(29) to (31).  Pub. L. 109–432  struck out “and” at end of par. (29), substituted “,\u2000plus” for period at end of par. (30), and added par. (31).\n2005—Subsec. (b)(20).  Pub. L. 109–59, §\u202f11126(b) , added par. (20).\nSubsec. (b)(21).  Pub. L. 109–58, §\u202f1306(b) , as amended by  Pub. L. 109–59, §\u202f11151(d)(1) , added par. (21).\nSubsec. (b)(22).  Pub. L. 109–58, §\u202f1322(a)(2) , added par. (22).\nSubsec. (b)(23).  Pub. L. 109–58, §\u202f1332(b) , added par. (23).\nSubsec. (b)(24).  Pub. L. 109–58, §\u202f1342(b)(1) , which directed the striking out of “plus” at end, could not be executed because “plus” did not appear at end.\nPub. L. 109–58, §\u202f1334(b) , added par. (24).\nSubsec. (b)(25).  Pub. L. 109–58, §\u202f1341(b)(1) , added par. (25).\nSubsec. (b)(26).  Pub. L. 109–58, §\u202f1342(b)(1) , added par. (26).\nSubsec. (b)(27).  Pub. L. 109–135, §\u202f103(b)(1) , added par. (27).\nSubsec. (b)(28) to (30).  Pub. L. 109–135, §\u202f201(b)(1) , added pars. (28) to (30).\nSubsec. (c)(2)(A)(ii)(II).  Pub. L. 109–135, §\u202f412(f)(1) , substituted “,\u2000the New York Liberty Zone business employee credit, and the specified credits” for “or the New York Liberty Zone business employee credit or the specified credits”.\nSubsec. (c)(3)(A)(ii)(II).  Pub. L. 109–135, §\u202f412(f)(2) , substituted “and the specified credits” for “or the specified credits”.\nSubsec. (c)(4)(B).  Pub. L. 109–135, §\u202f412(f)(3) , substituted “means” for “includes” in introductory provisions and inserted “and” at end of cl. (i).\n2004—Subsec. (b)(16).  Pub. L. 108–357, §\u202f245(c)(1) , added par. (16).\nSubsec. (b)(17).  Pub. L. 108–357, §\u202f302(b) , added par. (17).\nSubsec. (b)(18).  Pub. L. 108–357, §\u202f339(b) , added par. (18).\nSubsec. (b)(19).  Pub. L. 108–357, §\u202f341(b) , added par. (19).\nSubsec. (c)(2)(A)(ii)(II), (3)(A)(ii)(II).  Pub. L. 108–357, §\u202f711(b) , inserted “or the specified credits” after “employee credit”.\nSubsec. (c)(4), (5).  Pub. L. 108–357, §\u202f711(a) , added par. (4) and redesignated former par. (4) as (5).\n2002—Subsec. (b)(15).  Pub. L. 107–147, §\u202f411(d)(2) , substituted “45F(a)” for “45F”.\nSubsec. (c)(2)(A)(ii)(II).  Pub. L. 107–147, §\u202f301(b)(2) , inserted “or the New York Liberty Zone business employee credit” after “employment credit”.\nSubsec. (c)(3), (4).  Pub. L. 107–147, §\u202f301(b)(1) , added par. (3) and redesignated former par. (3) as (4).\n2001—Subsec. (b)(12).  Pub. L. 107–16, §\u202f619(b) , struck out “plus” at end.\nSubsec. (b)(13).  Pub. L. 107–16, §\u202f619(b) , substituted “,\u2000plus” for period at end.\nPub. L. 107–16, §\u202f205(b)(1) , struck out “plus” at end.\nSubsec. (b)(14).  Pub. L. 107–16, §\u202f619(b) , added par. (14).\nPub. L. 107–16, §\u202f205(b)(1) , substituted “,\u2000plus” for period at end.\nSubsec. (b)(15).  Pub. L. 107–16, §\u202f205(b)(1) , added par. (15).\n2000—Subsec. (b)(13).  Pub. L. 106–554  added par. (13).\n1996—Subsec. (b)(2).  Pub. L. 104–188, §\u202f1201(e)(1) , substituted “work opportunity credit” for “targeted jobs credit”.\nSubsec. (b)(12).  Pub. L. 104–188, §\u202f1205(a)(2) , added par. (12).\nSubsec. (c)(2)(C).  Pub. L. 104–188, §\u202f1702(e)(4) , amended subpar. (C), as in effect on day before date of enactment of the Revenue Reconciliation Act of 1990 (title XI of  Pub. L. 101–508 , approved  Nov. 5, 1990 ), by inserting before period at end of first sentence “and without regard to the deduction under section 56(h)”.\n1993—Subsec. (b)(7).  Pub. L. 103–66, §\u202f13302(a)(1) , struck out “plus” at end.\nSubsec. (b)(8).  Pub. L. 103–66, §\u202f13322(a) , which directed amendment of par. (8) by striking “plus” at end, could not be executed because “plus” did not appear at end.\nPub. L. 103–66, §\u202f13302(a)(1) , substituted “,\u2000and” for period at end.\nSubsec. (b)(9).  Pub. L. 103–66, §\u202f13443(b)(1) , struck out “plus” at end.\nPub. L. 103–66, §\u202f13322(a) , substituted “,\u2000plus” for period at end.\nPub. L. 103–66, §\u202f13302(a)(1) , added par. (9).\nSubsec. (b)(10).  Pub. L. 103–66, §\u202f13443(b)(1) , substituted “,\u2000plus” for period at end.\nPub. L. 103–66, §\u202f13322(a) , added par. (10).\nSubsec. (b)(11).  Pub. L. 103–66, §\u202f13443(b)(1) , added par. (11).\nSubsec. (c)(2), (3).  Pub. L. 103–66, §\u202f13302(c)(1) , added par. (2) and redesignated former par. (2) as (3).\n1992—Subsec. (b)(6) to (8).  Pub. L. 102–486  struck out “plus” at end of par. (6), substituted “;\u2000plus” for period at end of par. (7), and added par. (8).\n1990—Subsec. (b)(1).  Pub. L. 101–508, §\u202f11813(b)(2)(A) , substituted “section 46” for “section 46(a)”.\nSubsec. (b)(4).  Pub. L. 101–508, §\u202f11511(b)(1) , struck out “plus” at end.\nSubsec. (b)(5).  Pub. L. 101–508, §\u202f11611(b)(1) , struck out “plus” at end.\nPub. L. 101–508, §\u202f11511(b)(1) , substituted “,\u2000plus” for period at end.\nSubsec. (b)(6).  Pub. L. 101–508, §\u202f11611(b)(1) , substituted “,\u2000plus” for period at end.\nPub. L. 101–508, §\u202f11511(b)(1) , added par. (6).\nSubsec. (b)(7).  Pub. L. 101–508, §\u202f11611(b)(1) , added par. (7).\nSubsec. (c)(2).  Pub. L. 101–508, §\u202f11813(b)(2)(B) , redesignated par. (3) as (2) and struck out former par. (2) which permitted an offset of regular investment tax credit against 25 percent of minimum tax.\nSubsec. (c)(2)(C).  Pub. L. 101–508, §\u202f11813(b)(2)(C) , inserted “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “46(e)(1)” and “(as so in effect)” after “46(e)(2)”.\nSubsec. (c)(3).  Pub. L. 101–508, §\u202f11813(b)(2)(B) , redesignated par. (3) as (2).\nSubsec. (d).  Pub. L. 101–508, §\u202f11813(b)(2)(D)(i) , substituted “any provision” for “sections 46(f), 47(a), 196(a), and any other provision” in introductory provisions.\nSubsec. (d)(2).  Pub. L. 101–508, §\u202f11813(b)(2)(D)(ii) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The order in which credits attributable to a percentage referred to in section 46(a) are used shall be determined on the basis of the order in which such percentages are listed in section 46(a) as of the close of the taxable year in which the credit is used.”\nSubsec. (d)(3)(B).  Pub. L. 101–508, §\u202f11813(b)(2)(D)(iii) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the employee plan percentage (as defined in section 46(a)(2)(E), as in effect on the day before the date of the enactment of the Tax Reform Act of 1984) shall be treated as referred to after section 46(a)(2).”\n1988—Subsec. (c).  Pub. L. 100–647, §\u202f1007(g)(2) , amended pars. (1) to (3) generally, substituting pars. (1) and (2) for former pars. (1) to (3), redesignating former par. (4) as (3), and substituting “subparagraph (B) of paragraph (1)” for “subparagraphs (A) and (B) of paragraph (1)” in subpars. (A), (B), (C), and (D).\nPub. L. 100–647, §\u202f1007(g)(8) , made technical correction to directory language of  Pub. L. 99–514, §\u202f701(c)(4) , see 1986 Amendment note below.\nSubsec. (d).  Pub. L. 100–647, §\u202f1002(e)(8)(A) , substituted “Ordering rules” for “Special rules for certain regulated companies” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any taxpayer to which section 46(f) applies, for purposes of sections 46(f), 47(a), and 196(a) and any other provision of this title where it is necessary to ascertain the extent to which the credits determined under section 40(a), 41(a), 42(a), 46(a), or 51(a) are used in a taxable year or as a carryback or carryforward, the order in which such credits are used shall be determined on the basis of the order in which they are listed in subsection (b).”\n1986—Subsec. (b)(4).  Pub. L. 99–514, §\u202f231(d)(1) , added par. (4).\nPub. L. 99–514, §\u202f1171(b)(1) , struck out former par. (4) which read as follows: “the employee stock ownership credit determined under section 41(a)”.\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f252(b)(1) , added par. (5).\nSubsec. (c).  Pub. L. 99–514, §\u202f701(c)(4) , as amended by  Pub. L. 100–647, §\u202f1007(g)(8) , added pars. (1) to (3), redesignated former par. (3) as (4), and struck out former par. (1) “In general” which provided: “The credit allowed under subsection (a) for any taxable year shall not exceed the sum of—\n“(A) so much of the taxpayer’s net tax liability for the taxable year as does not exceed $25,000, plus\n“(B) 75 percent of so much of the taxpayer’s net tax liability for the taxable year as exceeds $25,000.”\nand former par. (2) “Net tax liability”, which provided: “For purposes of paragraph (1), the term ‘net tax liability’ means the tax liability (as defined in section 26(b)), reduced by the sum of the credits allowable under subparts A and B of this part.”\nSubsec. (c)(1)(B).  Pub. L. 99–514, §\u202f221(a) , substituted “75 percent” for “85 percent”.\nSubsec. (d).  Pub. L. 99–514, §\u202f252(b)(2) , inserted “42(a),”.\nPub. L. 99–514, §\u202f1171(b)(2) , substituted “and 196(a)” for “196(a), and 404(i)” and struck out “41(a),” after “40(a)”.\nPub. L. 99–514, §\u202f231(d)(3)(B) , inserted “41(a),” after “40(a),”.\n1984—Subsec. (c)(2).  Pub. L. 98–369, §\u202f612(e)(1) , substituted “section 26(b)” for “section 25(b)”.\nPub. L. 117–328, div. T, title I, §\u202f112(e) ,  Dec. 29, 2022 ,  136 Stat. 5295 , provided that:  “The amendments made by this section [enacting  section 45AA of this title  and amending this section and  section 3511 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nAmendment by  section 10101(d) of Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by  section 13105(b)(1) of Pub. L. 117–169  applicable to electricity produced and sold after  Dec. 31, 2023 , in taxable years beginning after such date, see  section 13105(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45U of this title .\nAmendment by  section 13203(b) of Pub. L. 117–169  applicable to fuel sold or used after  Dec. 31, 2022 , see  section 13203(f) of Pub. L. 117–169 , set out as an Effective Date note under  section 40B of this title .\nAmendment by  section 13204(a)(4)(A) of Pub. L. 117–169  applicable to hydrogen produced after  Dec. 31, 2022 , see  section 13204(a)(5)(A) of Pub. L. 117–169 , set out in an Effective Date note under  section 45V of this title .\nAmendment by  section 13401(i)(3) of Pub. L. 117–169  applicable to vehicles placed in service after  Dec. 31, 2022 , see  section 13401(k)(1) of Pub. L. 117–169 , set out in an Effective Date of 2022 Amendment; Transition Rule note under  section 30D of this title .\nAmendment by  section 13403(b)(1) of Pub. L. 117–169  applicable to vehicles acquired after  Dec. 31, 2022 , see  section 13403(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45W of this title .\nAmendment by  section 13502(b)(1) of Pub. L. 117–169  applicable to components produced and sold after  Dec. 31, 2022 , see  section 13502(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45X of this title .\nAmendment by  section 13701(b)(1) of Pub. L. 117–169  applicable to facilities placed in service after  Dec. 31, 2024 , see  section 13701(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45Y of this title .\nAmendment by  section 13704(b)(3) of Pub. L. 117–169  applicable to transportation fuel produced after  Dec. 31, 2024 , see  section 13704(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 45Z of this title .\nPub. L. 116–94, div. O, title I, §\u202f105(d) ,  Dec. 20, 2019 ,  133 Stat. 3148 , provided that:  “The amendments made by this section [enacting  section 45T of this title  and amending this section] shall apply to taxable years beginning after  December 31, 2019 .”\nAmendment by  section 12001(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 115–97, title I, §\u202f13403(e) ,  Dec. 22, 2017 ,  131 Stat. 2138 , provided that:  “The amendments made by this section [enacting  section 45S of this title  and amending this section and sections 280C and 6501 of this title] shall apply to wages paid in taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f121(d) ,  Dec. 18, 2015 ,  129 Stat. 3052 , provided that: \n “(1)   Extension .— The amendments made by subsection (a) [amending sections 41 and 45C of this title] shall apply to shall apply to [sic] amounts paid or incurred after  December 31, 2014 . \n \n “(2)   Credit allowed against alternative minimum tax in case of eligible small business .— The amendments made by subsection (b) [amending this section] shall apply to credits determined for taxable years beginning after  December 31, 2015 . \n \n “(3)   Treatment of research credit for certain startup companies .— The amendments made by subsection (c) [amending sections 41 and 3111 of this title] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title I, §\u202f186(e)(3) ,  Dec. 18, 2015 ,  129 Stat. 3074 , provided that:  “The amendments made by subsection (d) [amending this section and  section 45 of this title ] shall apply to credits determined for taxable years beginning after  December 31, 2015 .”\nAmendment by  section 209(f)(1) of Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by section 221(a)(2)(B), (6) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–240, title II, §\u202f2013(d) ,  Sept. 27, 2010 ,  124 Stat. 2556 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to credits determined in taxable years beginning after  December 31, 2009 , and to carrybacks of such credits.”\nPub. L. 111–148, title I, §\u202f1421(f) , title X, §\u202f10105(e)(4),  Mar. 23, 2010 ,  124 Stat. 242 , 907, provided that: \n “(1)   In general .— The amendments made by this section [enacting  section 45R of this title  and amending this section and sections 196 and 280C of this title] shall apply to amounts paid or incurred in taxable years beginning after  December 31, 2009 . \n \n “(2)   Minimum tax .— The amendments made by subsection (c) [amending this section] shall apply to credits determined under section 45R of the Internal Revenue Code of 1986 in taxable years beginning after  December 31, 2009 , and to carrybacks of such credits.”\nAmendment by  Pub. L. 111–5  applicable to vehicles acquired after  Dec. 31, 2009 , see  section 1141(c) of Pub. L. 111–5 , set out as a note under  section 30B of this title .\nAmendment by  section 103(b) of Pub. L. 110–343  applicable to credits determined under  section 46 of this title  in taxable years beginning after  Oct. 3, 2008 , and to carrybacks of such credits, see section 103(f)(1), (2) of  Pub. L. 110–343 , set out as a note under  section 48 of this title .\nPub. L. 110–343, div. B, title I, §\u202f115(d) ,  Oct. 3, 2008 ,  122 Stat. 3831 , provided that:  “The amendments made by this section [enacting  section 45Q of this title  and amending this section] shall apply to carbon dioxide captured after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nAmendment by  section 205(c) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nPub. L. 110–343, div. C, title III, §\u202f316(c)(2) ,  Oct. 3, 2008 ,  122 Stat. 3873 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to credits determined under section 45G of the Internal Revenue Code of 1986 in taxable years beginning after  December 31, 2007 , and to carrybacks of such credits.”\nPub. L. 110–289, div. C, title I, §\u202f3022(d)(2) , (3),  July 30, 2008 ,  122 Stat. 2894 , provided that: \n “(2)   Low income housing credit .— The amendments made by subsection (b) [amending this section] shall apply to credits determined under section 42 of the Internal Revenue Code of 1986 to the extent attributable to buildings placed in service after  December 31, 2007 . \n \n “(3)   Rehabilitation credit .— The amendments made by subsection (c) [amending this section] shall apply to credits determined under section 47 of the Internal Revenue Code of 1986 to the extent attributable to qualified rehabilitation expenditures properly taken into account for periods after  December 31, 2007 .”\nPub. L. 110–245, title I, §\u202f111(e) ,  June 17, 2008 ,  122 Stat. 1635 , provided that:  “The amendments made by this section [enacting  section 45P of this title  and amending this section and  section 280C of this title ] shall apply to amounts paid after the date of the enactment of this Act [ June 17, 2008 ].”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15343(e) ,  May 22, 2008 ,  122 Stat. 1520 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15343(e),  June 18, 2008 ,  122 Stat. 1664 , 2282, provided that:  “The amendments made by this section [enacting  section 45O of this title  and amending this section and  section 280C of this title ] shall apply to amounts paid or incurred after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–28, title VIII, §\u202f8214(b) ,  May 25, 2007 ,  121 Stat. 193 , provided that:  “The amendments made by this section [amending this section] shall apply to credits determined under sections 45B and 51 of the Internal Revenue Code of 1986 in taxable years beginning after  December 31, 2006 , and to carrybacks of such credits.”\nPub. L. 109–432, div. A, title IV, §\u202f405(e) ,  Dec. 20, 2006 ,  120 Stat. 2958 , provided that:  “The amendments made by this section [enacting  section 45N of this title  and amending this section and  section 280C of this title ] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 109–59, title XI, §\u202f11126(d) ,  Aug. 10, 2005 ,  119 Stat. 1958 , provided that:  “The amendments made by this section [enacting  section 5011 of this title  and amending this section] shall apply to taxable years beginning after  September 30, 2005 .”\nPub. L. 109–59, title XI, §\u202f11151(d)(2) ,  Aug. 10, 2005 ,  119 Stat. 1968 , provided that:  “If the Energy Policy Act of 2005 [ Pub. L. 109–58 , see Tables for classification] is enacted before the date of the enactment of this Act [ Aug. 10, 2005 ], for purposes of executing any amendments made by the Energy Policy Act of 2005 to section 38(b) of the Internal Revenue Code of 1986, the amendments made by section 11126(b) of this Act [amending this section] shall be treated as having been executed before such amendments made by the Energy Policy Act of 2005.”\nPub. L. 109–59, title XI, §\u202f11151(f)(3) ,  Aug. 10, 2005 ,  119 Stat. 1969 , provided that:  “The amendments made by subsections (d)(1) and (e)(2) [amending this section and sections 4041 and 6426 of this title] shall take effect as if included in the provision of the Energy Tax Incentives Act of 2005 [ Pub. L. 109–58, title XIII ] to which they relate.”\nPub. L. 109–58, title XIII, §\u202f1306(d) ,  Aug. 8, 2005 ,  119 Stat. 999 , provided that:  “The amendments made by this section [enacting  section 45J of this title  and amending this section] shall apply to production in taxable years beginning after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nAmendment by  section 1322(a)(2) of Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nPub. L. 109–58, title XIII, §\u202f1332(f) ,  Aug. 8, 2005 ,  119 Stat. 1026 , provided that:  “The amendments made by this section [enacting  section 45L of this title  and amending this section and sections 196 and 1016 of this title] shall apply to qualified new energy efficient homes acquired after  December 31, 2005 , in taxable years ending after such date.”\nPub. L. 109–58, title XIII, §\u202f1334(d) ,  Aug. 8, 2005 ,  119 Stat. 1033 , provided that:  “The amendments made by this section [enacting  section 45M of this title  and amending this section] shall apply to appliances produced after  December 31, 2005 .”\nAmendment by  section 1341(b)(1) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1341(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 30B of this title .\nAmendment by  section 1342(b)(1) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1342(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 30C of this title .\nPub. L. 108–357, title II, §\u202f245(e) ,  Oct. 22, 2004 ,  118 Stat. 1448 , provided that:  “The amendments made by this section [enacting  section 45G of this title  and amending this section and sections 39 and 1016 of this title] shall apply to taxable years beginning after  December 31, 2004 .”\nPub. L. 108–357, title III, §\u202f302(d) ,  Oct. 22, 2004 ,  118 Stat. 1466 , provided that:  “The amendments made by this section [enacting  section 40A of this title  and amending this section and sections 87 and 196 of this title] shall apply to fuel produced, and sold or used, after  December 31, 2004 , in taxable years ending after such date.”\nPub. L. 108–357, title III, §\u202f339(f) ,  Oct. 22, 2004 ,  118 Stat. 1485 , provided that:  “The amendments made by this section [enacting  section 45H of this title  and amending this section and sections 196, 280C, and 1016 of this title] shall apply to expenses paid or incurred after  December 31, 2002 , in taxable years ending after such date.”\nPub. L. 108–357, title III, §\u202f341(e) ,  Oct. 22, 2004 ,  118 Stat. 1487 , provided that:  “The amendments made by this section [enacting  section 45I of this title  and amending this section and  section 39 of this title ] shall apply to production in taxable years beginning after  December 31, 2004 .”\nPub. L. 108–357, title VII, §\u202f711(c) ,  Oct. 22, 2004 ,  118 Stat. 1558 , provided that:  “Except as otherwise provided, the amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 107–147, title III, §\u202f301(b)(3) ,  Mar. 9, 2002 ,  116 Stat. 40 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after  December 31, 2001 .”\nAmendment by  section 411(d)(2) of Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nPub. L. 107–16, title II, §\u202f205(c) ,  June 7, 2001 ,  115 Stat. 53 , provided that:  “The amendments made by this section [enacting  section 45F of this title  and amending this section and  section 1016 of this title ] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f619(d) ,  June 7, 2001 ,  115 Stat. 110 , as amended by  Pub. L. 107–147, title IV, §\u202f411(n)(2) ,  Mar. 9, 2002 ,  116 Stat. 48 , provided that:  “The amendments made by this section [enacting  section 45E of this title  and amending this section and sections 39 and 196 of this title] shall apply to costs paid or incurred in taxable years beginning after  December 31, 2001 , with respect to qualified employer plans first effective after such date.”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f121(e)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–610, provided that:  “The amendments made by this section [enacting  section 45D of this title , amending this section and sections 39 and 196 of this title, and enacting provisions set out as notes under  section 45D of this title ] shall apply to investments made after  December 31, 2000 .”\nPub. L. 104–188, title I, §\u202f1201(g) ,  Aug. 20, 1996 ,  110 Stat. 1772 , provided that:  “The amendments made by this section [amending this section and sections 41, 45A, 51, 196, and 1396 of this title] shall apply to individuals who begin work for the employer after  September 30, 1996 .”\nAmendment by  section 1205(a)(2) of Pub. L. 104–188  applicable to amounts paid or incurred in taxable years ending after  June 30, 1996 , see  section 1205(e) of Pub. L. 104–188 , set out as a note under  section 45K of this title .\nPub. L. 104–188, title I, §\u202f1702(i) ,  Aug. 20, 1996 ,  110 Stat. 1875 , provided that:  “Except as otherwise expressly provided, any amendment made by this section [amending this section, sections 50, 56, 59, 143, 151, 168, 172, 179, 243, 280F, 341, 424, 460, 613A, 805, 832, 861, 897, 1248, 1250, 1367, 1504, 2701, 2702, 2704, 4093, 4975, 5041, 5061, 5354, 6038A, 6302, 6416, 6427, 6501, 6503, 6621, 6724, and 7012 of this title, and provisions set out as a note under  section 42 of this title ] shall take effect as if included in the provision of the Revenue Reconciliation Act of 1990 [ Pub. L. 101–508, title XI ] to which such amendment relates.”\nPub. L. 103–66, title XIII, §\u202f13303 ,  Aug. 10, 1993 ,  107 Stat. 556 , provided that:  “The amendments made by this part [part I (§§\u202f13301–13303) of subchapter C of chapter 1 of title XIII of  Pub. L. 103–66 , enacting sections 1391 to 1394 and 1396 to 1397D of this title and amending this section and sections 39, 51, 196, 280C, and 381 of this title] shall take effect on the date of the enactment of this Act [ Aug. 10, 1993 ].”\nPub. L. 103–66, title XIII, §\u202f13322(f) ,  Aug. 10, 1993 ,  107 Stat. 563 , provided that:  “The amendments made by this section [enacting  section 45A of this title  and amending this section and sections 39, 196, and 280C of this title] shall apply to wages paid or incurred after  December 31, 1993 .”\nPub. L. 103–66, title XIII, §\u202f13443(d) ,  Aug. 10, 1993 ,  107 Stat. 569 , as amended by  Pub. L. 104–188, title I, §\u202f1112(a)(2) ,  Aug. 20, 1996 ,  110 Stat. 1759 , provided that:  “The amendments made by this section [enacting  section 45B of this title  and amending this section and  section 39 of this title ] shall apply with respect to taxes paid after  December 31, 1993 , with respect to services performed before, on, or after such date.”\nPub. L. 102–486, title XIX, §\u202f1914(e) ,  Oct. 24, 1992 ,  106 Stat. 3023 , provided that:  “The amendments made by this section [enacting  section 45 of this title  and amending this section and  section 39 of this title ] shall apply to taxable years ending after  December 31, 1992 .”\nAmendment by  section 11511(b)(1) of Pub. L. 101–508  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 1990 , see  section 11511(d)(1) of Pub. L. 101–508 , set out as an Effective Date note under  section 43 of this title .\nPub. L. 101–508, title XI, §\u202f11611(e) ,  Nov. 5, 1990 ,  104 Stat. 1388–503 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 44 of this title  and amending this section and sections 39 and 190 of this title] shall apply to expenditures paid or incurred after the date of the enactment of this Act [ Nov. 5, 1990 ]. \n \n “(2)   Subsection  (c).— The amendment made by subsection (c) [amending  section 190 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act.”\nAmendment by  section 11813(b)(2) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1002(e)(8)(C) ,  Nov. 10, 1988 ,  102 Stat. 3369 , provided that:  “The amendments made by this paragraph [amending this section and  section 49 of this title ] shall apply to taxable years beginning after  December 31, 1983 , and to carrybacks from such years.”\nAmendment by section 1007(g)(2), (8) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title II, §\u202f221(b) ,  Oct. 22, 1986 ,  100 Stat. 2173 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1985 .”\nAmendment by section 231(d)(1), (3)(B) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nAmendment by  section 252(b) of Pub. L. 99–514  applicable to buildings placed in service after  Dec. 31, 1986 , in taxable years ending after such date, see  section 252(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 42 of this title .\nAmendment by  section 701(c)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 99–514, title XI, §\u202f1171(c) ,  Oct. 22, 1986 ,  100 Stat. 2513 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 56, 108, 401, and 404 of this title and repealing sections 41 and 6699 of this title] shall apply to compensation paid or accrued after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Sections 404( i)  and 6699 to continue to apply to pre-1987 credits .— The provisions of sections 404(i) and 6699 of the Internal Revenue Code of 1986 shall continue to apply with respect to credits under section 41 of such Code attributable to compensation paid or accrued before  January 1, 1987  (or under section 38 of such Code with respect to qualified investment before  January 1, 1983 ).”\nAmendment by  Pub. L. 98–369  applicable to interest paid or accrued after  December 31, 1984 , on indebtedness incurred after  December 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 21 of this title .\nFor provisions that amendment made by section 401(d)(6)(B)(i)–(iii) of  Pub. L. 115–141  not apply, in the case of certain repeals, to various types of wages, bonds, property, or other items before specific dates, see  section 401(d)(6)(C) of Pub. L. 115–141 , set out as a note under former  section 1400L of this title .\nFor provisions that nothing in amendment by section 401(b)(5)(A)–(D), (d)(2)(B), (6)(B)(i)–(iii) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11813(b)(2) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 111–147, title I, §\u202f102 ,  Mar. 18, 2010 ,  124 Stat. 75 , provided that: \n “(a)   In General .— In the case of any taxable year ending after the date of the enactment of this Act [ Mar. 18, 2010 ], the current year business credit determined under section 38(b) of the Internal Revenue Code of 1986 for such taxable year shall be increased, with respect to each retained worker with respect to which subsection (b)(2) is first satisfied during such taxable year, by the lesser of— “(1)  $1,000, or \n \n “(2)  6.2 percent of the wages (as defined in section 3401(a) [probably means section 3401(a) of the Internal Revenue Code of 1986]) paid by the taxpayer to such retained worker during the 52 consecutive week period referred to in subsection (b)(2). \n \n \n “(b)   Retained Worker .— For purposes of this section, the term ‘retained worker’ means any qualified individual (as defined in [former] section 3111(d)(3) or [former] section 3221(c)(3) of the Internal Revenue Code of 1986)— “(1)  who was employed by the taxpayer on any date during the taxable year, \n \n “(2)  who was so employed by the taxpayer for a period of not less than 52 consecutive weeks, and \n \n “(3)  whose wages (as defined in section 3401(a) [probably means section 3401(a) of the Internal Revenue Code of 1986]) for such employment during the last 26 weeks of such period equaled at least 80 percent of such wages for the first 26 weeks of such period. \n \n \n “(c)   Limitation on Carrybacks .— No portion of the unused business credit under section 38 of the Internal Revenue Code of 1986 for any taxable year which is attributable to the increase in the current year business credit under this section may be carried to a taxable year beginning before the date of the enactment of this section [ Mar. 18, 2010 ]. \n \n “(d)   Treatment of Possessions.— “(1)   Payments to possessions.— “(A)   Mirror code possessions .— The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of this section (other than this subsection). Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. \n \n “(B)   Other possessions .— The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of this section (other than this subsection) if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession. \n \n \n “(2)   Coordination with credit allowed against united states income taxes .— No increase in the credit determined under section 38(b) of the Internal Revenue Code of 1986 against United States income taxes for any taxable year determined under subsection (a) shall be taken into account with respect to any person— “(A)  to whom a credit is allowed against taxes imposed by the possession by reason of this section for such taxable year, or \n \n “(B)  who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year. \n \n \n “(3)   Definitions and special rules.— “(A)   Possession of the united states .— For purposes of this subsection, the term ‘possession of the United States’ includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands. \n \n “(B)   Mirror code tax system .— For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(C)   Treatment of payments .— For purposes of  section 1324(b)(2) of title 31 , United States Code, rules similar to the rules of section 1001(b)(3)(C) of the American Recovery and Reinvestment Tax Act of 2009 [ section 1001(b)(3)(C) of Pub. L. 111–5 , formerly set out as a note under  section 36A of this title ] shall apply.”\nPub. L. 103–66, title XIII, §\u202f13311 ,  Aug. 10, 1993 ,  107 Stat. 556 , as amended by  Pub. L. 104–188, title I, §\u202f1703(n)(13) ,  Aug. 20, 1996 ,  110 Stat. 1877 , provided that: \n “(a)   In General .— For purposes of section 38 of the Internal Revenue Code of 1986, the current year business credit shall include the credit determined under this section. \n \n “(b)   Determination of Credit .— The credit determined under this section for each taxable year in the credit period with respect to any qualified CDC contribution made by the taxpayer is an amount equal to 5 percent of such contribution. \n \n “(c)   Credit Period .— For purposes of this section, the credit period with respect to any qualified CDC contribution is the period of 10 taxable years beginning with the taxable year during which such contribution was made. \n \n “(d)   Qualified CDC Contribution .— For purposes of this section— “(1)   In general .— The term ‘qualified CDC contribution’ means any transfer of cash— “(A)  which is made to a selected community development corporation during the 5-year period beginning on the date such corporation was selected for purposes of this section, \n \n “(B)  the amount of which is available for use by such corporation for at least 10 years, \n \n “(C)  which is to be used by such corporation for qualified low-income assistance within its operational area, and \n \n “(D)  which is designated by such corporation for purposes of this section. \n \n \n “(2)   Limitations on amount designated .— The aggregate amount of contributions to a selected community development corporation which may be designated by such corporation shall not exceed $2,000,000. \n \n \n “(e)   Selected Community Development Corporations.— “(1)   In general .— For purposes of this section, the term ‘selected community development corporation’ means any corporation— “(A)  which is described in section 501(c)(3) of such Code and exempt from tax under section 501(a) of such Code, \n \n “(B)  the principal purposes of which include promoting employment of, and business opportunities for, low-income individuals who are residents of the operational area, and \n \n “(C)  which is selected by the Secretary of Housing and Urban Development for purposes of this section. \n \n \n “(2)   Only 20 corporations may be selected .— The Secretary of Housing and Urban Development may select 20 corporations for purposes of this section, subject to the availability of eligible corporations. Such selections may be made only before  July 1, 1994 . At least 8 of the operational areas of the corporations selected must be rural areas (as defined by section 1393(a)(2) of such Code). \n \n “(3)   Operational areas must have certain characteristics .— A corporation may be selected for purposes of this section only if its operational area meets the following criteria: “(A)  The area meets the size requirements under section 1392(a)(3). \n \n “(B)  The unemployment rate (as determined by the appropriate available data) is not less than the national unemployment rate. \n \n “(C)  The median family income of residents of such area does not exceed 80 percent of the median gross income of residents of the jurisdiction of the local government which includes such area. \n \n \n \n “(f)   Qualified Low-Income Assistance .— For purposes of this section, the term ‘qualified low-income assistance’ means assistance— “(1)  which is designed to provide employment of, and business opportunities for, low-income individuals who are residents of the operational area of the community development corporation, and \n \n “(2)  which is approved by the Secretary of Housing and Urban Development.”\nFor applicability of amendment by  section 701(c)(4) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 99–514, title II, §\u202f212 ,  Oct. 22, 1986 ,  100 Stat. 2170 , as amended by  Pub. L. 100–647, title I, §\u202f1002(f) ,  Nov. 10, 1988 ,  102 Stat. 3369 , provided that: \n “(a)   General Rule .— If a qualified corporation makes an election under this section for its 1st taxable year beginning after  December 31, 1986 , with respect to any portion of its existing carryforwards, the amount determined under subsection (b) shall be treated as a payment against the tax imposed by chapter 1 of the Internal Revenue Code of 1986 made by such corporation on the last day prescribed by law (without regard to extensions) for filing its return of tax under chapter 1 of such Code for such 1st taxable year. \n \n “(b)   Amount .— For purposes of subsection (a), the amount determined under this subsection shall be the lesser of— “(1)  50 percent of the portion of the corporation’s existing carryforwards to which the election under subsection (a) applies, or \n \n “(2)  the corporation’s net tax liability for the carryback period. \n \n \n “(c)   Corporation Making Election May Not Use Same Amounts Under Section  38.— In the case of a qualified corporation which makes an election under subsection (a), the portion of such corporation’s existing carryforwards to which such an election applies shall not be taken into account under section 38 of the Internal Revenue Code of 1986 for any taxable year beginning after  December 31, 1986 . \n \n “(d)   Net Tax Liability for Carryback Period .— For purposes of this section— “(1)   In general .— A corporation’s net tax liability for the carryback period is the aggregate of such corporation’s net tax liability for taxable years in the carryback period. \n \n “(2)   Net tax liability .— The term ‘net tax liability’ means, with respect to any taxable year, the amount of the tax imposed by chapter 1 of the Internal Revenue Code of 1954 [now 1986] for such taxable year, reduced by the sum of the credits allowable under part IV of subchapter A of such chapter 1 (other than section 34 thereof). For purposes of the preceding sentence, any tax treated as not imposed by chapter 1 of such Code under section 26(b)(2) of such Code shall not be treated as tax imposed by such chapter 1. \n \n “(3)   Carryback period .— The term ‘carryback period’ means the period— “(A)  which begins with the corporation’s 15th taxable year preceding the 1st taxable year from which there is an unused credit included in such corporation’s existing carryforwards (but in no event shall such period begin before the corporation’s 1st taxable year ending after  December 31, 1961 ), and \n \n “(B)  which ends with the corporation’s last taxable year beginning before  January 1, 1986 . \n \n \n \n “(e)   No Recomputation of Minimum Tax, Etc .— Nothing in this section shall be construed to affect— “(1)  the amount of the tax imposed by section 56 of the Internal Revenue Code of 1986, or \n \n “(2)  the amount of any credit allowable under such Code, \n \n\n for any taxable year in the carryback period. \n \n “(f)   Reinvestment Requirement.— “(1)   In general .— Any amount determined under this section must be committed to reinvestment in, and modernization of the steel industry through investment in modern plant and equipment, research and development, and other appropriate projects, such as working capital for steel operations and programs for the retraining of steel workers. \n \n “(2)   Special rule .— In the case of the LTV Corporation, in lieu of the requirements of paragraph (1)— “(A)  such corporation shall place such refund in a separate account; and \n \n “(B)  amounts in such separate account— “(i)  shall only be used by the corporation— \u2001\u2001\u2001\u2001\u2001“(I)  to purchase an insurance policy which provides that, in the event the corporation becomes involved in a title 11 or similar case (as defined in section 368(a)(3)(A) of the Internal Revenue Code of 1954 [now 1986]), the insurer will provide life and health insurance coverage during the 1-year period beginning on the date when the corporation receives the refund to any individual with respect to whom the corporation would (but for such involvement) have been obligated to provide such coverage the coverage provided by the insurer will be identical to the coverage which the corporation would (but for such involvement) have been obligated to provide, and provides that the payment of insurance premiums will not be required during such 1-year period to keep such policy in force, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  directly in connection with the trade or business of the corporation in the manufacturer or production of steel; and \n \n \n “(ii)  shall be used (or obligated) for purposes described in clause (i) not later than 3 months after the corporation receives the refund. \n \n \n \n “(3)  In the case of a qualified corporation, no offset to any refund under this section may be made by reason of any tax imposed by section 4971 of the Internal Revenue Code of 1986 (or any interest or penalty attributable to any such tax), and the date on which any such refund is to be paid shall be determined without regard to such corporation’s status under title 11, United States Code. \n \n \n “(g)   Definitions .— For purposes of this section— “(1)   Qualified corporation.— “(A)   In general .— The term ‘qualified corporation’ means any corporation which is described in section 806(b) of the Steel Import Stabilization Act [ 19 U.S.C. 2253  note] and a company which was incorporated on  February 11, 1983 , in Michigan. \n \n “(B)   Certain predecessors included .— In the case of any qualified corporation which has carryforward attributable to a predecessor corporation described in such section 806(b), the qualified corporation and the predecessor corporation shall be treated as 1 corporation for purposes of subsections (d) and (e). \n \n \n “(2)   Existing carryforwards .— The term ‘existing carryforward’ means the aggregate of the amounts which— “(A)  are unused business credit carryforwards to the taxpayer’s 1st taxable year beginning after  December 31, 1986  (determined without regard to the limitations of section 38(c) and any reduction under section 49 of the Internal Revenue Code of 1986), and \n \n “(B)  are attributable to the amount of the regular investment credit determined for periods before  January 1, 1986 , under section 46(a)(1) of such Code (relating to regular percentage), or any corresponding provision of prior law, determined on the basis that the regular investment credit was used first. \n \n \n “(3)   Special rule for restructuring .— In the case of any corporation, any restructuring shall not limit, increase, or otherwise affect the benefits which would have been available under this section but for such restructuring. \n \n \n “(h)   Tentative Refunds .— Rules similar to the rules of section 6425 of the Internal Revenue Code of 1986 shall apply to any overpayment resulting from the application of this section.”\nPub. L. 99–514, title II, §\u202f213 ,  Oct. 22, 1986 ,  100 Stat. 2172 , as amended by  Pub. L. 100–647, title I, §\u202f1002(g) ,  Nov. 10, 1988 ,  102 Stat. 3369 , provided that: \n “(a)   General Rule .— If a taxpayer who is a qualified farmer makes an election under this section for its 1st taxable year beginning after  December 31, 1986 , with respect to any portion of its existing carryforwards, the amount determined under subsection (b) shall be treated as a payment against the tax imposed by chapter 1 of the Internal Revenue Code of 1986 made by such taxpayer on the last day prescribed by law (without regard to extensions) for filing its return of tax under chapter 1 of such Code for such 1st taxable year. \n \n “(b)   Amount .— For purposes of subsection (a), the amount determined under this subsection shall be equal to the smallest of— “(1)  50 percent of the portion of the taxpayer’s existing carryforwards to which the election under subsection (a) applies, \n \n “(2)  the taxpayer’s net tax liability for the carryback period (within the meaning of section 212(d) of this Act [set out as a note above]), or \n \n “(3)  $750. \n \n \n “(c)   Taxpayer Making Election May Not Use Same Amounts Under Section  38.— In the case of a qualified farmer who makes an election under subsection (a), the portion of such farmer’s existing carryforwards to which such an election applies shall not be taken into account under section 38 of the Internal Revenue Code of 1986 for any taxable year beginning after  December 31, 1986 . \n \n “(d)   No Recomputation of Minimum Tax, Etc .— Nothing in this section shall be construed to affect— “(1)  the amount of the tax imposed by section 56 of the Internal Revenue Code of 1954 [now 1986], or \n \n “(2)  the amount of any credit allowable under such Code, \n \n\n for any taxable year in the carryback period (within the meaning of section 212(d)(3) of this Act [set out as a note above]). \n \n “(e)   Definitions and Special Rules .— For purposes of this section— “(1)   Qualified farmer .— The term ‘qualified farmer’ means any taxpayer who, during the 3-taxable year period preceding the taxable year for which an election is made under subsection (a), derived 50 percent or more of the taxpayer’s gross income from the trade or business of farming. \n \n “(2)   Existing carryforward .— The term ‘existing carryforward’ means the aggregate of the amounts which— “(A)  are unused business credit carryforwards to the taxpayer’s 1st taxable year beginning after  December 31, 1986  (determined without regard to the limitations of section 38(c) of the Internal Revenue Code of 1986), and \n \n “(B)  are attributable to the amount of the investment credit determined for periods before  January 1, 1986 , under section 46(a) of such Code (or any corresponding provision of prior law) with respect to section 38 property which was used by the taxpayer in the trade or business of farming, determined on the basis that such credit was used first. \n \n \n “(3)   Farming .— The term ‘farming’ has the meaning given such term by section 2032A(e)(4) and (5) of such Code.”\nFor provisions requiring different applications of subsec. (c) of this section to certain public utilities by making substitutions in the percentages of the tentative minimum tax referred to in subsec. (c)(3)(A)(ii), (B), under certain circumstances, see  section 701(f)(6) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XI, §\u202f1177 ,  Oct. 22, 1986 ,  100 Stat. 2520 , as amended by  Pub. L. 100–647, title I, §\u202f1011B ( l )(1), (2),  Nov. 10, 1988 ,  102 Stat. 3493 , provided that: \n “(a)   Section  1171.— The amendments made by section 1171 [amending this section and sections 56, 108, 401, and 404 of this title and repealing sections 41 and 6699 of this title] shall not apply in the case of a tax credit employee stock ownership plan if— “(1)  such plan was favorably approved on  September 23, 1983 , by employees, and \n \n “(2)  not later than  January 11, 1984 , the employer of such employees was 100 percent owned by such plan. \n \n \n “(b)   Subtitle Not To Apply to Certain News\xadpaper .— The amendments made by section 1175 [amending  section 401 of this title ] shall not apply to any daily newspaper— “(1)  which was first published on  December 17, 1855 , and which began publication under its current name in 1954, and \n \n “(2)  which is published in a constitutional home rule city (within the meaning of section 146(d)(3)(C) of the Internal Revenue Code of 1986) which has a population of less than 2,500,000.”\nPub. L. 100–647, title I, §\u202f1011B ( l )(3),  Nov. 10, 1988 ,  102 Stat. 3493 , provided that:  “If any newspaper corporation described in section 1177(b) of the Reform Act [ section 1177(b) of Pub. L. 99–514 , set out above], as amended by this subsection, pays in cash a dividend within 60 days after the date of the enactment of this Act [ Nov. 10, 1988 ] to the corporation’s employee stock ownership plans and if a corporate resolution declaring such dividend was adopted before  November 30, 1987 , and such resolution specifies that such dividend shall be contingent upon passage by the Congress of technical corrections, then such dividend (to the extent the aggregate amount so paid does not exceed $3,500,000) shall be treated as if it had been declared and paid in 1987 for all purposes of the Internal Revenue Code of 1986.”\nPub. L. 92–178, title I, §\u202f101(c) ,  Dec. 10, 1971 ,  85 Stat. 499 , as amended by  Pub. L. 98–369, div. A, title IV, §\u202f450(a) ,  July 18, 1984 ,  98 Stat. 818 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— It was the intent of Congress in enacting, in the Revenue Act of 1962 [see Short Title of 1962 Amendment note set out under  section 1 of this title ], the investment credit allowed by section 38 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and it is the intent of the Congress in restoring that credit in this Act [ section 50 of this title ], to provide an incentive for modernization and growth of private industry. Accordingly, notwithstanding any other provision of law, on and after the date of the enactment of this Act [ Dec. 10, 1971 ]— “(A)  no taxpayer shall be required to use, for purposes of financial reports subject to the jurisdiction of any Federal agency or reports made to any Federal agency, any particular method of accounting for the credit allowed by such section 38 [this section], and \n \n “(B)  a taxpayer shall disclose, in any such report, the method of accounting for such credit used by him for purposes of such report. \n \n \n “(2)   Exceptions.— Paragraph (1) shall not apply to taxpayers who are subject to the provisions of section 46(e) of the Internal Revenue Code of 1986 (as added by section 105(c) of this Act) or to section 203(e) of the Revenue Act of 1964 (as modified by section 105(e) of this Act) [set out as note below].”\n[ Pub. L. 98–369, div. A, title IV, §\u202f450(b) ,  July 18, 1984 ,  98 Stat. 818 , provided that:  “The amendments made by this section [amending this note] shall take effect as if included in the Revenue Act of 1971.” \n]\nPub. L. 88–272, title II, §\u202f203(e) ,  Feb. 26, 1964 ,  78 Stat. 35 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “It was the intent of the Congress in providing an investment credit under section 38 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] and it is the intent of the Congress in repealing the reduction in basis required by section 48(g) of such Code to provide an incentive for modernization and growth of private industry (including that portion thereof which is regulated). Accordingly, Congress does not intend that any agency or instrumentality of the United States having jurisdiction with respect to a taxpayer shall, without the consent of the taxpayer, use— “(1)  in the case of public utility property (as defined in section 46(c)(3)(B) of the Internal Revenue Code of 1986, more than a proportionate part (determined with reference to the average useful life of the property with respect to which the credit was allowed) of the credit against tax allowed for any taxable year by section 38 of such Code, or \n \n “(2)  in the case of any other property, any credit against tax allowed by section 38 of such Code, \n \n\n to reduce such taxpayer’s Federal income taxes for the purpose of establishing the cost of service of the taxpayer or to accomplish a similar result by any other method.”\nSection 203(e) of Pub. L. 88–272 , not applicable to public utility property to which  section 46(e) of this title  applies, see  section 105(e) of Pub. L. 92–178 , set out as a note under  section 46 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The entire amount of the unused credit for an unused credit year shall be carried to the earliest of the 21 taxable years to which (by reason of paragraph (1)) such credit may be carried.\nThe amount of the unused credit for the unused credit year shall be carried to each of the other 20 taxable years to the extent that such unused credit may not be taken into account under section 38(a) for a prior taxable year because of the limitations of subsections (b) and (c).\nThe amount of the unused credit which may be taken into account under section 38(a)(1) for any succeeding taxable year shall not exceed the amount by which the limitation imposed by section 38(c) for such taxable year exceeds the sum of the amounts which, by reason of this section, are carried to such taxable year and are attributable to taxable years preceding the unused credit year.\nNo portion of the unused business credit for any taxable year which is attributable to a credit specified in section 38(b) or any portion thereof may be carried back to any taxable year before the first taxable year for which such specified credit or such portion is allowable (without regard to subsection (a)).\nA prior section 39 was renumbered  section 34 of this title .\nAnother prior section 39 was renumbered  section 37 of this title .\n2022—Subsec. (a)(4).  Pub. L. 117–169  added par. (4).\n2018—Subsec. (a)(3)(A).  Pub. L. 115–141, §\u202f401(b)(5)(F) , struck out “or the eligible small business credits” after “gas well production credit)”.\nSubsec. (a)(4).  Pub. L. 115–141, §\u202f401(b)(5)(E) , struck out par. (4) which related to 5-year carryback for eligible small business credits.\n2010—Subsec. (a)(3)(A).  Pub. L. 111–240, §\u202f2012(b) , inserted “or the eligible small business credits” after “credit)”.\nSubsec. (a)(4).  Pub. L. 111–240, §\u202f2012(a) , added par. (4).\n2005—Subsec. (a)(1)(A).  Pub. L. 109–135, §\u202f412(g)(1) , substituted “the taxable year” for “each of the 1 taxable years”.\nSubsec. (a)(3)(B).  Pub. L. 109–135, §\u202f412(g)(2) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “paragraph (1) shall be applied by substituting ‘5 taxable years’ for ‘1 taxable years’ in subparagraph (A) thereof, and”.\n2004—Subsec. (a)(3).  Pub. L. 108–357, §\u202f341(c) , added par. (3).\nSubsec. (d).  Pub. L. 108–357, §\u202f245(b)(1) , amended heading and text of subsec. (d) generally, substituting provisions prohibiting carryback of the unused business credit attributable to a credit specified in section 38(b) for provisions prohibiting carryback of the enhanced oil recovery credit before 1991, sections 44, 45A, and 45B credits before their enactments, the renewable electricity production credit before its effective date, the empowerment zone employment credit, section 45C credit before  July 1, 1996 , DC Zone credits before their effective date, the new markets tax credit before  Jan. 1, 2001 , and the small employer pension plan startup cost credit before  Jan. 1, 2002 .\n2001—Subsec. (d)(10).  Pub. L. 107–16, §\u202f619(c)(1) , added par. (10).\n2000—Subsec. (d)(9).  Pub. L. 106–554  added par. (9).\n1998—Subsec. (a)(2).  Pub. L. 105–206  amended  Pub. L. 105–34, §\u202f1083(a)(2) . See 1997 Amendment note below.\n1997—Subsec. (a)(1).  Pub. L. 105–34, §\u202f1083(a)(1) , substituted “1-year” for “3-year” and “20-year” for “15-year” in heading, “1 taxable” for “3 taxable” in subpar. (A), and “20 taxable” for “15 taxable” in subpar. (B).\nSubsec. (a)(2).  Pub. L. 105–34, §\u202f1083(a)(2) , as amended by  Pub. L. 105–206, §\u202f6010(n) , in subpar. (A), substituted “21 taxable” for “18 taxable”, and in subpar. (B), substituted “20 years” for “17 years” in heading and “20 taxable” for “17 taxable” in text.\nSubsec. (d)(8).  Pub. L. 105–34, §\u202f701(b)(1) , added par. (8).\n1996—Subsec. (d)(5).  Pub. L. 104–188, §\u202f1703(n)(1)(A) , substituted “45A” for “45” in heading.\nSubsec. (d)(6).  Pub. L. 104–188, §\u202f1703(n)(1)(B) , substituted “45B” for “45” in heading.\nSubsec. (d)(7).  Pub. L. 104–188, §\u202f1205(c) , added par. (7).\n1993—Subsec. (d)(4).  Pub. L. 103–66, §\u202f13302(a)(2) , added par. (4).\nSubsec. (d)(5).  Pub. L. 103–66, §\u202f13322(d) , added par. (5).\nSubsec. (d)(6).  Pub. L. 103–66, §\u202f13443(b)(2) , added par. (6).\n1992—Subsec. (d).  Pub. L. 102–486  redesignated par. (5), relating to carryback of enhanced oil recovery credit, as (1), redesignated par. (5), relating to carryback of section 44 credit, as (2), and added par. (3).\n1990—Subsec. (d)(1) to (4).  Pub. L. 101–508, §\u202f11801(a)(2) , struck out par. (1) which related to carryforwards from an unused credit year which did not expire before first taxable year beginning after  Dec. 31, 1983 , par. (2) which related to carrybacks in determining amount allowable as credit including net tax liability, par. (3) which related to similar rules for research credit under section 30, and par. (4) which provided for no carryback of low-income housing credit before 1987.\nSubsec. (d)(5).  Pub. L. 101–508, §\u202f11611(b)(2) , added par. (5) relating to carryback of section 44 credit.\nPub. L. 101–508, §\u202f11511(b)(2) , added par. (5) relating to carryback of enhanced oil recovery credit.\n1988—Subsec. (d)(4).  Pub. L. 100–647  added par. (4).\n1986—Subsec. (d)(1)(A).  Pub. L. 99–514, §\u202f1846(1) , inserted “(as in effect before the enactment of the Tax Reform Act of 1984)”.\nSubsec. (d)(2)(B).  Pub. L. 99–514, §\u202f1846(2) , substituted “as defined in section 26(b)” for “as so defined in section 25(b)”.\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f231(d)(3)(C)(i) , added par. (3).\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 13801(g) of Pub. L. 117–169 , set out as an Effective Date note under  section 6417 of this title .\nPub. L. 111–240, title II, §\u202f2012(c) ,  Sept. 27, 2010 ,  124 Stat. 2554 , provided that:  “The amendments made by this section [amending this section] shall apply to credits determined in taxable years beginning after  December 31, 2009 .”\nPub. L. 108–357, title II, §\u202f245(b)(2) ,  Oct. 22, 2004 ,  118 Stat. 1448 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply with respect to taxable years ending after  December 31, 2003 .”\nAmendment by  section 245(b) of Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 245(e) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  section 341(c) of Pub. L. 108–357  applicable to production in taxable years beginning after  Dec. 31, 2004 , see  section 341(e) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 107–16  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 2001 , with respect to qualified employer plans first effective after such date, see  section 619(d) of Pub. L. 107–16 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 106–554  applicable to investments made after  Dec. 31, 2000 , see §\u202f1(a)(7) [title I, §\u202f121(e)] of  Pub. L. 106–554 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title VII, §\u202f701(d) ,  Aug. 5, 1997 ,  111 Stat. 869 , provided that:  “Except as provided in subsection (c) [amending table of subchapters for this chapter], the amendments made by this section [enacting subchapter W of this chapter and amending this section and  section 1016 of this title ] shall take effect on the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title X, §\u202f1083(b) ,  Aug. 5, 1997 ,  111 Stat. 951 , provided that:  “The amendments made by this section [amending this section] shall apply to credits arising in taxable years beginning after  December 31, 1997 .”\nAmendment by  section 1205(c) of Pub. L. 104–188  applicable to amounts paid or incurred in taxable years ending after  June 30, 1996 , see  section 1205(e) of Pub. L. 104–188 , set out as a note under  section 45K of this title .\nPub. L. 104–188, title I, §\u202f1703 ( o ),  Aug. 20, 1996 ,  110 Stat. 1878 , provided that:  “Any amendment made by this section [amending this section and sections 40, 59, 108, 117, 135, 143, 163, 904, 956A, 958, 1017, 1044, 1201, 1245, 1297, 1394, 1397B, 1561, 4001, 6033, 6427, 6501, 6655, and 9502 of this title, renumbering  section 6714 of this title  as section 6715, and amending provisions set out as notes under sections 38, 42, 197, and 1258 of this title and  section 401 of Title 42 , The Public Health and Welfare] shall take effect as if included in the provision of the Revenue Reconciliation Act of 1993 [ Pub. L. 103–66, title XIII , ch. I, §§\u202f13001–13444] to which such amendment relates.”\nAmendment by  section 13322(d) of Pub. L. 103–66  applicable to wages paid or incurred after  Dec. 31, 1993 , see  section 13322(f) of Pub. L. 103–66 , set out as a note under  section 38 of this title .\nAmendment by  section 13443(b)(2) of Pub. L. 103–66  applicable with respect to taxes paid after  Dec. 31, 1993 , with respect to services performed before, on, or after such date, see  section 13443(d) of Pub. L. 103–66 , as amended, set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 102–486  applicable to taxable years ending after  Dec. 31, 1992 , see  section 1914(e) of Pub. L. 102–486 , set out as a note under  section 38 of this title .\nAmendment by  section 11511(b)(2) of Pub. L. 101–508  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 1990 , see  section 11511(d)(1) of Pub. L. 101–508 , set out as an Effective Date note under  section 43 of this title .\nAmendment by  section 11611(b)(2) of Pub. L. 101–508  applicable to expenditures paid or incurred after  Nov. 5, 1990 , see  section 11611(e)(1) of Pub. L. 101–508 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 231(d)(3)(C)(i) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nAmendment by  section 1846 of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 21 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11801(a)(2) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The alcohol mixture credit of any taxpayer for any taxable year is 60 cents for each gallon of alcohol used by the taxpayer in the production of a qualified mixture.\nNo credit shall be allowed under this section with respect to any casual off-farm production of a qualified mixture.\nNo credit shall be allowed under subparagraph (A)(i) with respect to any alcohol which was sold in a retail sale described in subparagraph (A)(ii).\nIn the case of any alcohol with a proof which is at least 150 but less than 190, paragraphs (1)(A) and (2)(A) shall be applied by substituting “45 cents” for “60 cents”.\nThe small ethanol producer credit of any eligible small ethanol producer for any taxable year is 10 cents for each gallon of qualified ethanol fuel production of such producer.\nThe qualified ethanol fuel production of any producer for any taxable year shall not exceed 15,000,000 gallons (determined without regard to any qualified second generation biofuel production).\nThe qualified ethanol fuel production of any producer for any taxable year shall not include any alcohol which is purchased by the producer and with respect to which such producer increases the proof of the alcohol by additional distillation.\nThe adding of any denaturant to alcohol shall not be treated as the production of a mixture.\nThe second generation biofuel producer credit of any taxpayer is an amount equal to the applicable amount for each gallon of qualified second generation biofuel production.\nThe term “second generation biofuel” shall not include any alcohol with a proof of less than 150. The determination of the proof of any alcohol shall be made without regard to any added denaturants.\nRules similar to the rules under subsection (g)(6) shall apply for purposes of this paragraph.\nNo credit shall be determined under this paragraph with respect to any taxpayer unless such taxpayer is registered with the Secretary as a producer of second generation biofuel under section 4101.\nThis paragraph shall apply with respect to qualified second generation biofuel production after  December 31, 2008 , and before  January 1, 2025 .\nIf this paragraph ceases to apply for any period by reason of clause (i), rules similar to the rules of subsection (e)(2) shall apply.\nThe amount of the credit determined under this section with respect to any alcohol shall, under regulations prescribed by the Secretary, be properly reduced to take into account any benefit provided with respect to such alcohol solely by reason of the application of section 4041(b)(2), section 6426, or section 6427(e).\nThe determination of the proof of any alcohol shall be made without regard to any added denaturants.\nThe term “special fuel” includes any liquid fuel (other than gasoline) which is suitable for use in an internal combustion engine.\nAll provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A), (B), (C), or (D) as if such tax were imposed by section 4081 and not by this chapter.\nFor purposes of determining under subsection (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall include the volume of any denaturant (including gasoline) which is added under any formulas approved by the Secretary to the extent that such denaturants do not exceed 2 percent of the volume of such alcohol (including denaturants).\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nNo second generation biofuel producer credit shall be determined under subsection (a) with respect to any second generation biofuel unless such second generation biofuel is produced in the United States and used as a fuel in the United States. For purposes of this subsection, the term “United States” includes any possession of the United States.\nNo credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term “United States” includes any possession of the United States.\nIf this section ceases to apply for any period by reason of paragraph (1), no amount attributable to any sale or use before the first day of such period may be carried under section 39 by reason of this section (treating the amount allowed by reason of this section as the first amount allowed by this subpart) to any taxable year beginning after the 3-taxable-year period beginning with the taxable year in which such first day occurs.\nParagraph (1) shall not apply to the portion of the credit allowed under this section by reason of subsection (a)(4).\nA taxpayer may elect to have this section not apply for any taxable year.\nAn election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).\nAn election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe.\nThe term “eligible small ethanol producer” means a person who, at all times during the taxable year, has a productive capacity for alcohol (as defined in subsection (d)(1)(A) without regard to clauses (i) and (ii)) not in excess of 60,000,000 gallons.\nFor purposes of the 15,000,000 gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon limitation under paragraph (1), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.\nIn the case of a partnership, trust, S corporation, or other pass-thru entity, the limitations contained in subsection (b)(4)(C) and paragraph (1) shall be applied at the entity level and at the partner or similar level.\nFor purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.\nIn the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year.\nAn election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).\nThe amount of the credit not apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under subsection (a)(3) for the taxable year of the organization.\nThe amount of the credit apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under such subsection for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.\nFor purposes of paragraph (1), the blender amount and the low-proof blender amount shall be determined in accordance with the following table: \n \n \n \n \n \n \n \n In the case of any sale or use during calendar year: The blender amount is: The low-proof blender amount is: \n \n \n 2001 or 2002 \u200153 cents 39.26 cents\u202f\u202f \n 2003 or 2004 \u200152 cents 38.52 cents\u202f\u202f \n 2005, 2006, 2007, or 2008 \u200151 cents 37.78 cents\u202f\u202f \n 2009 through 2011 \u200145 cents 33.33 cents.\nIn the case of any calendar year beginning after 2008, if the Secretary makes a determination described in subparagraph (B) with respect to all preceding calendar years beginning after 2007, the last row in the table in paragraph (2) shall be applied by substituting “51 cents” for “45 cents”.\nA determination described in this subparagraph with respect to any calendar year is a determination, in consultation with the Administrator of the Environmental Protection Agency, that an amount less than 7,500,000,000 gallons of ethanol (including cellulosic ethanol) has been produced in or imported into the United States in such year.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nA prior section 40, added  Pub. L. 92–178, title VI, §\u202f601(a) ,  Dec. 10, 1971 ,  85 Stat. 553 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to allowance as a credit of expenses of work incentive programs, prior to repeal by  Pub. L. 98–369, div. A, title IV, §\u202f474(m)(1) ,  July 18, 1984 ,  98 Stat. 833 .\nAnother prior section 40 was renumbered  section 37 of this title .\n2022—Subsec. (b)(6)(J)(i).  Pub. L. 117–169  substituted “2025” for “2022”.\n2020—Subsec. (b)(6)(J)(i).  Pub. L. 116–260  substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\n2019—Subsec. (b)(6)(J)(i).  Pub. L. 116–94  substituted “ January 1, 2021 ” for “ January 1, 2018 ”.\n2018—Subsec. (b)(6)(J)(i).  Pub. L. 115–123  substituted “ January 1, 2018 ” for “ January 1, 2017 ”.\nSubsec. (g)(2).  Pub. L. 115–141  substituted “Aggregation” for “Aggregration” in heading.\n2015—Subsec. (b)(6)(J)(i).  Pub. L. 114–113  substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\n2014—Subsec. (b)(6)(J)(i).  Pub. L. 113–295  substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\n2013— Pub. L. 112–240, §\u202f404(b)(3)(A)(i) , substituted “second generation biofuel” for “cellulosic biofuel” wherever appearing in text in subsecs. (a)(4), (b)(4)(C), (6), and (d)(3)(D), (6).\nSubsec. (b)(6).  Pub. L. 112–240, §\u202f404(b)(3)(A)(ii) , substituted “Second generation” for “Cellulosic” in heading.\nSubsec. (b)(6)(C), (D).  Pub. L. 112–240, §\u202f404(b)(3)(A)(iii) , substituted “second generation” for “cellulosic” in heading.\nSubsec. (b)(6)(E).  Pub. L. 112–240, §\u202f404(b)(3)(A)(ii) , substituted “Second generation” for “Cellulosic” in heading.\nSubsec. (b)(6)(E)(i)(I).  Pub. L. 112–240, §\u202f404(b)(1) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, and”.\nSubsec. (b)(6)(E)(ii).  Pub. L. 112–240, §\u202f404(b)(3)(B) , substituted “The term ‘second generation biofuel’ shall not” for “Such term shall not”.\nSubsec. (b)(6)(F), (G).  Pub. L. 112–240, §\u202f404(b)(2) , added subpars. (F) and (G). Former subpars. (F) and (G) redesignated as (H) and (I), respectively.\nSubsec. (b)(6)(H).  Pub. L. 112–240, §\u202f404(b)(3)(A)(iii) , substituted “second generation” for “cellulosic” in heading.\nPub. L. 112–240, §\u202f404(b)(2) , redesignated subpar. (F) as (H). Former subpar. (H) redesignated (J).\nPub. L. 112–240, §\u202f404(a)(1) , amended subpar. (H) generally. Prior to amendment, text read as follows: “This paragraph shall apply with respect to qualified cellulosic biofuel production after  December 31, 2008 , and before  January 1, 2013 .”\nSubsec. (b)(6)(I), (J).  Pub. L. 112–240, §\u202f404(b)(2) , redesignated subpars. (G) and (H) as (I) and (J), respectively.\nSubsec. (d)(3)(D).  Pub. L. 112–240, §\u202f404(b)(3)(A)(ii) , substituted “Second generation” for “Cellulosic” in heading.\nSubsec. (d)(6).  Pub. L. 112–240, §\u202f404(b)(3)(A)(iii) , substituted “second generation” for “cellulosic” in heading.\nSubsec. (e)(2).  Pub. L. 112–240, §\u202f404(a)(2) , struck out “or subsection (b)(6)(H)” after “paragraph (1)”.\nSubsec. (e)(3).  Pub. L. 112–240, §\u202f404(b)(3)(A)(iii) , substituted “second generation” for “cellulosic” in heading.\n2010—Subsec. (b)(6)(E)(iii).  Pub. L. 111–240, §\u202f2121(a)(4) , substituted “certain” for “unprocessed” in heading.\nPub. L. 111–152  added cl. (iii).\nSubsec. (b)(6)(E)(iii)(III).  Pub. L. 111–240, §\u202f2121(a)(1) –(3), added subcl. (III).\nSubsec. (e)(1)(A).  Pub. L. 111–312, §\u202f708(a)(1)(A) , substituted “ December 31, 2011 ” for “ December 31, 2010 ”.\nSubsec. (e)(1)(B).  Pub. L. 111–312, §\u202f708(a)(1)(B) , substituted “ January 1, 2012 ” for “ January 1, 2011 ”.\nSubsec. (h)(1), (2).  Pub. L. 111–312, §\u202f708(a)(2) , substituted “2011” for “2010”.\n2008— Pub. L. 110–246, §\u202f15321(b)(3)(B) , inserted “,\u2000etc.,” after “Alcohol” in section catchline.\nSubsec. (a)(4).  Pub. L. 110–246, §\u202f15321(a) , added par. (4).\nSubsec. (b)(4)(C).  Pub. L. 110–246, §\u202f15321(e) , inserted “(determined without regard to any qualified cellulosic biofuel production)” after “15,000,000 gallons”.\nSubsec. (b)(6).  Pub. L. 110–246, §\u202f15321(b)(1) , added par. (6).\nSubsec. (d)(3)(C).  Pub. L. 110–246, §\u202f15321(c)(2)(A) , substituted “Small ethanol producer” for “Producer” in heading.\nSubsec. (d)(3)(D).  Pub. L. 110–246, §\u202f15321(c)(1) , added subpar. (D). Former subpar. (D) redesignated (E).\nSubsec. (d)(3)(E).  Pub. L. 110–246, §\u202f15321(c)(2)(B) , substituted “(C), or (D)” for “or (C)”.\nPub. L. 110–246, §\u202f15321(c)(1) , redesignated subpar. (D) as (E).\nSubsec. (d)(4).  Pub. L. 110–246, §\u202f15332(a) , substituted “2 percent” for “5 percent”.\nSubsec. (d)(6).  Pub. L. 110–246, §\u202f15321(d) , added par. (6).\nSubsec. (d)(7).  Pub. L. 110–343  added par. (7).\nSubsec. (e)(2).  Pub. L. 110–246, §\u202f15321(b)(2)(A) , inserted “or subsection (b)(6)(H)” after “by reason of paragraph (1)”.\nSubsec. (e)(3).  Pub. L. 110–246, §\u202f15321(b)(2)(B) , added par. (3).\nSubsec. (h)(2).  Pub. L. 110–246, §\u202f15331(a)(1) , in table, substituted “2005, 2006, 2007, or 2008” for “2005 through 2010”, struck out period after “37.78 cents”, and inserted last row reading “2009 through 2010”, “45 cents”, and “33.33 cents.”\nSubsec. (h)(3).  Pub. L. 110–246, §\u202f15331(a)(2) , added par. (3).\n2005—Subsec. (g)(1), (2), (5)(A).  Pub. L. 109–58, §\u202f1347(a) , substituted “60,000,000” for “30,000,000”.\nSubsec. (g)(6)(A)(ii).  Pub. L. 109–58, §\u202f1347(b) , inserted at end “Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).”\n2004—Subsec. (c).  Pub. L. 108–357, §\u202f301(c)(1) , substituted “section 4041(b)(2), section 6426, or section 6427(e)” for “subsection (b)(2), (k), or (m) of section 4041, section 4081(c), or section 4091(c)”.\nSubsec. (d)(4).  Pub. L. 108–357, §\u202f301(c)(2) , reenacted heading without change and amended text of par. (4) generally, substituting provisions relating to determination of the number of gallons of alcohol with respect to which a credit is allowable under subsec. (a) for provisions relating to determination of the number of gallons of alcohol with respect to which a credit is allowable under subsec. (a) or the percentage of any mixture which consists of alcohol under section 4041(k) or 4081(c).\nSubsec. (e)(1)(A).  Pub. L. 108–357, §\u202f301(c)(3)(A) , substituted “2010” for “2007”.\nSubsec. (e)(1)(B).  Pub. L. 108–357, §\u202f301(c)(3)(B) , substituted “2011” for “2008”.\nSubsec. (g)(6).  Pub. L. 108–357, §\u202f313(a) , added par. (6).\nSubsec. (h)(1).  Pub. L. 108–357, §\u202f301(c)(4)(A) , substituted “2010” for “2007” in introductory provisions.\nSubsec. (h)(2).  Pub. L. 108–357, §\u202f301(c)(4)(B) , substituted “through 2010” for “,\u20002006, or 2007” in table.\n1998—Subsec. (e)(1).  Pub. L. 105–178, §\u202f9003(a)(3) , substituted “ December 31, 2007 ” for “ December 31, 2000 ” in subpar. (A) and “ January 1, 2008 ” for “ January 1, 2001 ” in subpar. (B).\nSubsec. (h).  Pub. L. 105–178, §\u202f9003(b)(1) , reenacted heading without change and amended text of subsec. (h) generally. Prior to amendment, text read as follows: “In the case of any alcohol mixture credit or alcohol credit with respect to any alcohol which is ethanol—\n“(1) subsections (b)(1)(A) and (b)(2)(A) shall be applied by substituting ‘54 cents’ for ‘60 cents’;\n“(2) subsection (b)(3) shall be applied by substituting ‘40 cents’ for ‘45 cents’ and ‘54 cents’ for ‘60 cents’; and\n“(3) subparagraphs (A) and (B) of subsection (d)(3) shall be applied by substituting ‘54 cents’ for ‘60 cents’ and ‘40 cents’ for ‘45 cents’.”\n1996—Subsec. (e)(1)(B).  Pub. L. 104–188  amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “for any period before  January 1, 2001 , during which the Highway Trust Fund financing rate under section 4081(a)(2) is not in effect.”\n1990—Subsec. (a)(2).  Pub. L. 101–508, §\u202f11502(a)(1) , substituted “,\u2000plus” for period at end.\nSubsec. (a)(3).  Pub. L. 101–508, §\u202f11502(a)(2) , added par. (3).\nSubsec. (b).  Pub. L. 101–508, §\u202f11502(e)(2) , which directed the insertion of “,\u2000and except as provided in subsection (h)” in introductory provisions without specifying the location of such insertion, was executed after “section” to reflect the probable intent of Congress.\nPub. L. 101–508, §\u202f11502(b)(3) , substituted “,\u2000alcohol credit, and small ethanol producer credit” for “and alcohol credit” in heading.\nSubsec. (b)(4), (5).  Pub. L. 101–508, §\u202f11502(b)(1) , (2), added par. (4) and redesignated former par. (4) as (5).\nSubsec. (d)(3)(C), (D).  Pub. L. 101–508, §\u202f11502(d)(1) , (2), added subpar. (C), redesignated former subpar. (C) as (D), and substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)”.\nSubsec. (e).  Pub. L. 101–508, §\u202f11502(f) , amended subsec. (e) generally, substituting present provisions for provisions prohibiting the applicability of this section to any sale or use after  Dec. 31, 1992 , and prohibiting carryovers to any taxable year beginning after  Dec. 31, 1994 .\nSubsec. (g).  Pub. L. 101–508, §\u202f11502(c) , added subsec. (g).\nSubsec. (h).  Pub. L. 101–508, §\u202f11502(e)(1) , added subsec. (h).\n1987—Subsec. (c).  Pub. L. 100–203  substituted “,\u2000section 4081(c), or section 4091(c)” for “or section 4081(c)”.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 44E of this title  as this section.\nSubsec. (a).  Pub. L. 98–369, §\u202f474(k)(1) , substituted “For purposes of section 38, the alcohol fuels credit determined under this section for the taxable year is an amount equal to the sum of” for “There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of” in introductory provisions.\nSubsec. (b)(1)(A), (2)(A).  Pub. L. 98–369, §\u202f912(c)(1) , substituted “60 cents” for “50 cents”.\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f912(c) , substituted “45 cents” for “37.5 cents” and “60 cents” for “50 cents”.\nSubsec. (c).  Pub. L. 98–369, §\u202f913(b) , substituted “(b)(2), (k), or (m)” for “(b)(2) or (k)”.\nPub. L. 98–369, §\u202f474(k)(2) , substituted “the credit determined under this section” for “the credit allowable under this section”.\nSubsec. (d)(1)(A)(i).  Pub. L. 98–369, §\u202f912(f) , substituted “coal (including peat)” for “coal”.\nSubsec. (d)(3)(A).  Pub. L. 98–369, §\u202f912(c) , substituted “60 cents” for “50 cents” and “45 cents” for “37.5 cents”.\nSubsec. (d)(3)(A)(i).  Pub. L. 98–369, §\u202f474(k)(3) , substituted “credit was determined” for “credit was allowable”.\nSubsec. (d)(3)(B).  Pub. L. 98–369, §\u202f912(c) , substituted “60 cents” for “50 cents” and “45 cents” for “37.5 cents”.\nSubsec. (d)(3)(B)(i).  Pub. L. 98–369, §\u202f474(k)(3) , substituted “credit was determined” for “credit was allowable”.\nSubsec. (e).  Pub. L. 98–369, §\u202f474(k)(4) , redesignated subsec. (f) as (e). Former subsec. (e), which had placed a limitation based on the amount of tax, was struck out.\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f474(k)(5) , substituted “section 39 by reason of this section (treating the amount allowed by reason of this section as the first amount allowed by this subpart)” for “subsection (e)(2)”.\nSubsec. (f).  Pub. L. 98–369, §\u202f474(k)(6) , added subsec. (f). Former subsec. (f) redesignated (e).\n1983—Subsec. (b)(1)(A), (2)(A).  Pub. L. 97–424, §\u202f511(d)(3)(A) , substituted “50 cents” for “40 cents”.\nSubsec. (b)(3).  Pub. L. 97–424, §\u202f511(d)(3) , substituted “50 cents” for “40 cents” and “37.5 cents” for “30 cents”.\nSubsec. (c).  Pub. L. 97–424, §\u202f511(b)(2) , substituted “subsection (b)(2) or (k) of section 4041 or section 4081(c)” for “section 4041(k) or 4081(c)” after “reason of the application of”.\nSubsec. (d)(3)(A), (B).  Pub. L. 97–424, §\u202f511(d)(3) , substituted “50 cents” for “40 cents” and “37.5 cents” for “30 cents”.\n1982—Subsec. (d)(5).  Pub. L. 97–354  substituted “Pass-thru in the case of estates and trusts” for “Pass-through in the case of subchapter S corporations, etc.” in par. heading, and substituted provisions relating to the applicability of rules similar to rules of subsec. (d) of section 52 for provisions relating to the applicability of rules similar to rules of subsecs. (d) and (e) of section 52.\n1981—Subsec. (e)(2)(A).  Pub. L. 97–34  substituted “15” for “7” in two places, and “14” for “6” in one place.\nPub. L. 117–169, title I, §\u202f13202(b) ,  Aug. 16, 2022 ,  136 Stat. 1932 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to qualified second generation biofuel production after  December 31, 2021 .”\nPub. L. 116–260, div. EE, title I, §\u202f140(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendment made by this section [amending this section] shall apply to qualified second generation biofuel production after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f122(b) ,  Dec. 20, 2019 ,  133 Stat. 3231 , provided that:  “The amendment made by this section [amending this section] shall apply to qualified second generation biofuel production after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40406(b) ,  Feb. 9, 2018 ,  132 Stat. 149 , provided that:  “The amendment made by this section [amending this section] shall apply to qualified second generation biofuel production after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f184(b) ,  Dec. 18, 2015 ,  129 Stat. 3073 , provided that:  “The amendment made by this subsection [probably means this section, amending this section] shall apply to qualified second generation biofuel production after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f152(b) ,  Dec. 19, 2014 ,  128 Stat. 4021 , provided that:  “The amendment made by this section [amending this section] shall apply to qualified second generation biofuel production after  December 31, 2013 .”\nPub. L. 112–240, title IV, §\u202f404(a)(3) ,  Jan. 2, 2013 ,  126 Stat. 2338 , provided that:  “The amendments made by this subsection [amending this section] shall take effect as if included in section 15321(b) of the Heartland, Habitat, and Horticulture Act of 2008 [probably should be Heartland, Habitat, Harvest, and Horticulture Act of 2008, title XV of  Pub. L. 110–246 ].”\nPub. L. 112–240, title IV, §\u202f404(b)(4) ,  Jan. 2, 2013 ,  126 Stat. 2339 , provided that:  “The amendments made by this subsection [amending this section and  section 4101 of this title ] shall apply to fuels sold or used after the date of the enactment of this Act [ Jan. 2, 2013 ].”\nPub. L. 111–312, title VII, §\u202f708(a)(3) ,  Dec. 17, 2010 ,  124 Stat. 3312 , provided that:  “The amendments made by this subsection [amending this section] shall apply to periods after  December 31, 2010 .”\nPub. L. 111–240, title II, §\u202f2121(b) ,  Sept. 27, 2010 ,  124 Stat. 2567 , provided that:  “The amendments made by this section [amending this section] shall apply to fuels sold or used on or after  January 1, 2010 .”\nPub. L. 111–152, title I, §\u202f1408(b) ,  Mar. 30, 2010 ,  124 Stat. 1067 , provided that:  “The amendment made by this section [amending this section] shall apply to fuels sold or used on or after  January 1, 2010 .”\nPub. L. 110–343, div. B, title II, §\u202f203(d) ,  Oct. 3, 2008 ,  122 Stat. 3834 , provided that:  “The amendments made by this section [amending this section and sections 40A, 6426, and 6427 of this title] shall apply to claims for credit or payment made on or after  May 15, 2008 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15321(g) ,  May 22, 2008 ,  122 Stat. 1514 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15321(g),  June 18, 2008 ,  122 Stat. 1664 , 2276, provided that:  “The amendments made by this section [amending this section and sections 40A and 4101 of this title] shall apply to fuel produced after  December 31, 2008 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–234, title XV, §\u202f15331(c) ,  May 22, 2008 ,  122 Stat. 1516 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15331(c),  June 18, 2008 ,  122 Stat. 1664 , 2278, provided that:  “The amendments made by this section [amending this section and  section 6426 of this title ] shall take effect on the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–234, title XV, §\u202f15332(c) ,  May 22, 2008 ,  122 Stat. 1516 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15332(c),  June 18, 2008 ,  122 Stat. 1664 , 2278, provided that:  “The amendments made by this section [amending this section and  section 6426 of this title ] shall apply to fuel sold or used after  December 31, 2008 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 109–58, title XIII, §\u202f1347(c) ,  Aug. 8, 2005 ,  119 Stat. 1056 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 108–357, title III, §\u202f301(d) ,  Oct. 22, 2004 ,  118 Stat. 1463 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting  section 6426 of this title  and amending this section and sections 4041, 4081, 4083, 4101, 6427, and 9503 of this title] shall apply to fuel sold or used after  December 31, 2004 . \n \n “(2)   Registration requirement .— The amendment made by subsection (b) [amending  section 4101 of this title ] shall take effect on  April 1, 2005 . \n \n “(3)   Extension of alcohol fuels credit .— The amendments made by paragraphs (3), (4), and (14) of subsection (c) [amending this section] shall take effect on the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(4)   Repeal of general fund retention of certain alcohol fuels taxes .— The amendments made by subsection (c)(12) [amending  section 9503 of this title ] shall apply to fuel sold or used after  September 30, 2004 .”\nPub. L. 108–357, title III, §\u202f313(b) ,  Oct. 22, 2004 ,  118 Stat. 1468 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 105–178, title IX, §\u202f9003(b)(3) ,  June 9, 1998 ,  112 Stat. 503 , provided that:  “The amendments made by this subsection [amending this section and sections 4041, 4081, and 4091 of this title] shall take effect on  January 1, 2001 .”\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nPub. L. 101–508, title XI, §\u202f11502(h) ,  Nov. 5, 1990 ,  104 Stat. 1388–482 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to alcohol produced, and sold or used, in taxable years beginning after  December 31, 1990 . \n \n “(2)  The amendments made by subsection (g) [amending provisions not classified to the Code] shall apply to articles entered or withdrawn from warehouse on or after  January 1, 1991 .”\nPub. L. 100–203, title X, §\u202f10502(e) ,  Dec. 22, 1987 ,  101 Stat. 1330–445 , provided that:  “The amendments made by this section [enacting sections 4091 to 4093 of this title, amending this section and sections 4041, 4081, 4101, 4221, 6206, 6416, 6421, 6427, 6652, 9502, 9503, and 9508 of this title, and enacting provisions set out as notes under sections 4091 and 9502 of this title] shall apply to sales after  March 31, 1988 .”\nAmendment by  section 474(k) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title IX, §\u202f912(g) ,  July 18, 1984 ,  98 Stat. 1008 , provided that:  “The amendments made by this section [amending this section and sections 4041, 4081, and 6427 of this title] shall take effect on  January 1, 1985 .”\nAmendment by  section 913(b) of Pub. L. 98–369  effective  Aug. 1, 1984 , see  section 913(c) of Pub. L. 98–369 , set out as a note under  section 4041 of this title .\nAmendments by section 511(b)(2), (d)(3) of  Pub. L. 97–424  effective  Apr. 1, 1983 , see  section 511(h) of Pub. L. 97–424 , set out as a note under  section 4041 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–34  applicable to unused credit years ending after  Sept. 30, 1980 , see  section 209(c)(2)(C) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nPub. L. 96–223, title II, §\u202f232(h)(1) , (4),  Apr. 2, 1980 ,  94 Stat. 281 , as amended by  Pub. L. 97–448, title II, §\u202f202(e) ,  Jan. 12, 1983 ,  96 Stat. 2396 , provided that: \n “(1)  The amendments made by subsections (b) and (c) [enacting sections 44E [now 40] and 86 of this title and amending sections 55, 381, 383, 4081, and 6096 of this title] shall apply to sales or uses after  September 30, 1980 , in taxable years ending after such date. \n \n “(4)  Notwithstanding paragraph (1), the provisions of section 44E(d)(4)(B) [now 40(d)(4)(B)] of such Code, as added by this section, shall take effect on  April 2, 1980 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The biodiesel mixture credit of any taxpayer for any taxable year is $1.00 for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture.\nNo credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.\nNo credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii).\nNo credit shall be allowed under paragraph (1) or (2) of subsection (a) unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.\nThe small agri-biodiesel producer credit of any eligible small agri-biodiesel producer for any taxable year is 10 cents for each gallon of qualified agri-biodiesel production of such producer.\nThe qualified agri-biodiesel production of any producer for any taxable year shall not exceed 15,000,000 gallons.\nThe amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e).\nThe term “agri-biodiesel” means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats.\nAll provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nNo credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term “United States” includes any possession of the United States.\nThe term “eligible small agri-biodiesel producer” means a person who, at all times during the taxable year, has a productive capacity for agri-biodiesel not in excess of 60,000,000 gallons.\nFor purposes of the 15,000,000 gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon limitation under paragraph (1), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.\nIn the case of a partnership, trust, S corporation, or other pass-thru entity, the limitations contained in subsection (b)(4)(C) and paragraph (1) shall be applied at the entity level and at the partner or similar level.\nFor purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.\nIn the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year.\nAn election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).\nThe amount of the credit not apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under subsection (a)(3) for the taxable year of the organization.\nThe amount of the credit apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under such subsection for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.\nExcept as provided in paragraph (2), renewable diesel shall be treated in the same manner as biodiesel.\nSubsection (b)(4) shall not apply with respect to renewable diesel.\nThis section shall not apply to any sale or use after  December 31, 2024 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2022—Subsec. (d)(1).  Pub. L. 117–169, §\u202f13203(c)(1) , inserted “or 40B” after “determined under section 40” in concluding provisions.\nSubsec. (f)(4).  Pub. L. 117–169, §\u202f13203(c)(2) , struck out par. (4) which defined renewable diesel to include certain aviation fuel.\nSubsec. (g).  Pub. L. 117–169, §\u202f13201(a) , substituted “ December 31, 2024 ” for “ December 31, 2022 ”.\n2019—Subsec. (g).  Pub. L. 116–94  substituted “ December 31, 2022 ” for “ December 31, 2017 ”.\n2018—Subsec. (g).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (g).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (g).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (g).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (g).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (b)(1)(A), (2)(A).  Pub. L. 110–343, §\u202f202(b)(1) , substituted “$1.00” for “50 cents”.\nSubsec. (b)(3) to (5).  Pub. L. 110–343, §\u202f202(b)(3)(A) , redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out heading and text of former par. (3). Text read as follows: “In the case of any biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) shall be applied by substituting ‘$1.00’ for ‘50 cents’.”\nSubsec. (d)(1).  Pub. L. 110–246, §\u202f15321(f)(1) , inserted concluding provisions.\nSubsec. (d)(2).  Pub. L. 110–343, §\u202f202(f) , substituted “mustard seeds, and camelina” for “and mustard seeds”.\nSubsec. (d)(3)(C)(ii).  Pub. L. 110–343, §\u202f202(b)(3)(D) , substituted “subsection (b)(4)(B)” for “subsection (b)(5)(B)”.\nSubsec. (d)(5).  Pub. L. 110–343, §\u202f203(b) , added par. (5).\nSubsec. (e)(2), (3).  Pub. L. 110–343, §\u202f202(b)(3)(C) , substituted “subsection (b)(4)(C)” for “subsection (b)(5)(C)”.\nSubsec. (f)(2).  Pub. L. 110–343, §\u202f202(b)(3)(B) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows:\n“(A)  Rate of credit .—Subsections (b)(1)(A) and (b)(2)(A) shall be applied with respect to renewable diesel by substituting ‘$1.00’ for ‘50 cents’.\n“(B)  Nonapplication of certain credits .—Subsections (b)(3) and (b)(5) shall not apply with respect to renewable diesel.”\nSubsec. (f)(3).  Pub. L. 110–343, §\u202f202(d) , in introductory provisions, struck out “(as defined in section 45K(c)(3))” after “derived from biomass” and, in concluding provisions, inserted at end “Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term ‘biomass’ has the meaning given such term by section 45K(c)(3).”\nPub. L. 110–343, §\u202f202(c)(1) , (2), in introductory provisions, substituted “liquid fuel” for “diesel fuel” and struck out “using a thermal depolymerization process” before “which meets—”.\nPub. L. 110–246, §\u202f15321(f)(2) , inserted concluding provisions.\nSubsec. (f)(3)(B).  Pub. L. 110–343, §\u202f202(c)(3) , inserted “,\u2000or other equivalent standard approved by the Secretary” before period at end.\nSubsec. (f)(4).  Pub. L. 110–343, §\u202f202(e) , added par. (4).\nSubsec. (g).  Pub. L. 110–343, §\u202f202(a) , substituted “ December 31, 2009 ” for “ December 31, 2008 ”.\n2005— Pub. L. 109–58, §\u202f1346(b)(1) , inserted “and renewable diesel” after “Biodiesel” in section catchline.\nSubsec. (a).  Pub. L. 109–58, §\u202f1345(a) , reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, text read as follows: “For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of—\n“(1) the biodiesel mixture credit, plus\n“(2) the biodiesel credit.”\nSubsec. (b).  Pub. L. 109–58, §\u202f1345(d)(2) , substituted “,\u2000biodiesel credit, and small agri-biodiesel producer credit” for “and biodiesel credit” in heading.\nSubsec. (b)(4).  Pub. L. 109–58, §\u202f1345(d)(1) , substituted “paragraph (1) or (2) of subsection (a)” for “this section”.\nSubsec. (b)(5).  Pub. L. 109–58, §\u202f1345(b) , added par. (5).\nSubsec. (b)(5)(B).  Pub. L. 109–135  struck out “(determined without regard to the last sentence of subsection (d)(2))” after “any agri-biodiesel” in introductory provisions.\nSubsec. (d)(3)(C), (D).  Pub. L. 109–58, §\u202f1345(d)(3) , added subpar. (C) and redesignated former subpar. (C) as (D). The words following “subsection (b)(5)(B),” in subpar. (C) are shown as a flush provision notwithstanding directory language showing them as part of cl. (ii), to reflect the probable intent of Congress.\nSubsec. (e).  Pub. L. 109–58, §\u202f1345(c) , added subsec. (e). The words following “subparagraph (A) for the taxable year,” in subsec. (e)(6)(B)(iii) are shown as a flush provision notwithstanding directory language showing them as part of subcl. (II), to reflect the probable intent of Congress. Former subsec. (e) redesignated (f).\nPub. L. 109–58, §\u202f1344(a) , substituted “2008” for “2006”.\nSubsec. (f).  Pub. L. 109–58, §\u202f1346(a) , added subsec. (f). Former subsec. (f) redesignated (g).\nPub. L. 109–58, §\u202f1345(c) , redesignated subsec. (e) as (f).\nSubsec. (g).  Pub. L. 109–58, §\u202f1346(a) , redesignated subsec. (f) as (g).\nPub. L. 117–169, title I, §\u202f13201(f) ,  Aug. 16, 2022 ,  136 Stat. 1932 , provided that:  “The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel sold or used after  December 31, 2021 .”\nAmendment by  section 13203(c) of Pub. L. 117–169  applicable to fuel sold or used after  Dec. 31, 2022 , see  section 13203(f) of Pub. L. 117–169 , set out as an Effective Date note under  section 40B of this title .\nPub. L. 116–94, div. Q, title I, §\u202f121(a)(2) ,  Dec. 20, 2019 ,  133 Stat. 3230 , provided that:  “The amendment made by this subsection [amending this section] shall apply to fuel sold or used after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40407(a)(2) ,  Feb. 9, 2018 ,  132 Stat. 149 , provided that:  “The amendment made by this subsection [amending this section] shall apply to fuel sold or used after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f185(a)(2) ,  Dec. 18, 2015 ,  129 Stat. 3073 , provided that:  “The amendment made by this subsection [amending this section] shall apply to fuel sold or used after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f153(b) ,  Dec. 19, 2014 ,  128 Stat. 4021 , provided that:  “The amendment made by this section [amending this section] shall apply to fuel sold or used after  December 31, 2013 .”\nPub. L. 112–240, title IV, §\u202f405(c) ,  Jan. 2, 2013 ,  126 Stat. 2340 , provided that:  “The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel sold or used after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f701(d) ,  Dec. 17, 2010 ,  124 Stat. 3310 , provided that:  “The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel sold or used after  December 31, 2009 .”\nPub. L. 110–343, div. B, title II, §\u202f202(g) ,  Oct. 3, 2008 ,  122 Stat. 3833 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel produced, and sold or used, after  December 31, 2008 . \n \n “(2)   Coproduction of renewable diesel with petroleum feedstock .— The amendment made by subsection (d) [amending this section] shall apply to fuel produced, and sold or used, after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nAmendment by  section 203(b) of Pub. L. 110–343  applicable to claims for credit or payment made on or after  May 15, 2008 , see  section 203(d) of Pub. L. 110–343 , set out as a note under  section 40 of this title .\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nAmendment by  section 15321(f) of Pub. L. 110–246  applicable to fuel produced after  Dec. 31, 2008 , see  section 15321(g) of Pub. L. 110–246 , set out as a note under  section 40 of this title .\nPub. L. 109–58, title XIII, §\u202f1344(b) ,  Aug. 8, 2005 ,  119 Stat. 1052 , provided that:  “The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall take effect on the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 109–58, title XIII, §\u202f1345(e) ,  Aug. 8, 2005 ,  119 Stat. 1055 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 109–58, title XIII, §\u202f1346(c) ,  Aug. 8, 2005 ,  119 Stat. 1056 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to fuel sold or used after  December 31, 2005 .”\nSection applicable to fuel produced, and sold or used, after  Dec. 31, 2004 , in taxable years ending after such date, see  section 302(d) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of this section, the term “applicable supplementary amount” means, with respect to any sustainable aviation fuel, an amount equal to $0.01 for each percentage point by which the lifecycle greenhouse gas emissions reduction percentage with respect to such fuel exceeds 50 percent. In no event shall the applicable supplementary amount determined under this subsection exceed $0.50.\nThe term “biomass” has the same meaning given such term in section 45K(c)(3).\nThe amount of the credit determined under this section with respect to any sustainable aviation fuel shall, under rules prescribed by the Secretary, be properly reduced to take into account any benefit provided with respect to such sustainable aviation fuel solely by reason of the application of section 6426 or 6427(e).\nThis section shall not apply to any sale or use after  December 31, 2024 .\nThe date of enactment of this section, referred to in subsec. (e)(2), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nPub. L. 117–169, title I, §\u202f13203(f) ,  Aug. 16, 2022 ,  136 Stat. 1935 , provided that:  “The amendments made by this section [enacting this section and amending sections 38, 40A, 87, 4101, 6426, and 6427 of this title] shall apply to fuel sold or used after  December 31, 2022 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The term “wages” has the meaning given such term by section 3401(a).\nIn the case of an employee (within the meaning of section 401(c)(1)), the term “wages” includes the earned income (as defined in section 401(c)(2)) of such employee.\nThe term “wages” shall not include any amount taken into account in determining the work opportunity credit under section 51(a).\nThe term “contract research expenses” means 65 percent of any amount paid or incurred by the taxpayer to any person (other than an employee of the taxpayer) for qualified research.\nIf any contract research expenses paid or incurred during any taxable year are attributable to qualified research to be conducted after the close of such taxable year, such amount shall be treated as paid or incurred during the period during which the qualified research is conducted.\nSubparagraph (A) shall be applied by substituting “75 percent” for “65 percent” with respect to amounts paid or incurred by the taxpayer to a qualified research consortium for qualified research on behalf of the taxpayer and 1 or more unrelated taxpayers. For purposes of the preceding sentence, all persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as related taxpayers.\nThe term “small business” means, with respect to any calendar year, any person if the annual average number of employees employed by such person during either of the 2 preceding calendar years was 500 or fewer. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the person was in existence throughout the year.\nRules similar to the rules of subparagraphs (B) and (D) of section 220(c)(4) shall apply for purposes of this clause.\nFor purposes of this subparagraph, the term “Federal laboratory” has the meaning given such term by section 4(6) of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3703(6) ), as in effect on the date of the enactment of the Energy Tax Incentives Act of 2005.\nIn no event shall the base amount be less than 50 percent of the qualified research expenses for the credit year.\nExcept as otherwise provided in this paragraph, the fixed-base percentage is the percentage which the aggregate qualified research expenses of the taxpayer for taxable years beginning after  December 31, 1983 , and before  January 1, 1989 , is of the aggregate gross receipts of the taxpayer for such taxable years.\nThe Secretary may prescribe regulations providing that de minimis amounts of gross receipts and qualified research expenses shall be disregarded under clauses (i) and (ii).\nIn no event shall the fixed-base percentage exceed 16 percent.\nThe percentages determined under subparagraphs (A) and (B)(ii) shall be rounded to the nearest 1/100th of 1 percent.\nAt the election of the taxpayer, the credit determined under subsection (a)(1) shall be equal to 14 percent of so much of the qualified research expenses for the taxable year as exceeds 50 percent of the average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined.\nThe credit under this paragraph shall be determined under this subparagraph if the taxpayer has no qualified research expenses in any one of the 3 taxable years preceding the taxable year for which the credit is being determined.\nThe credit determined under this subparagraph shall be equal to 6 percent of the qualified research expenses for the taxable year.\nAn election under this paragraph shall apply to the taxable year for which made and all succeeding taxable years unless revoked with the consent of the Secretary.\nNotwithstanding whether the period for filing a claim for credit or refund has expired for any taxable year taken into account in determining the fixed-base percentage, the qualified research expenses taken into account in computing such percentage shall be determined on a basis consistent with the determination of qualified research expenses for the credit year.\nThe Secretary may prescribe regulations to prevent distortions in calculating a taxpayer’s qualified research expenses or gross receipts caused by a change in accounting methods used by such taxpayer between the current year and a year taken into account in computing such taxpayer’s fixed-base percentage.\nFor purposes of this subsection, gross receipts for any taxable year shall be reduced by returns and allowances made during the taxable year. In the case of a foreign corporation, there shall be taken into account only gross receipts which are effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States.\nParagraph (1) shall be applied separately with respect to each business component of the taxpayer.\nAny plant process, machinery, or technique for commercial production of a business component shall be treated as a separate business component (and not as part of the business component being produced).\nResearch shall in no event be treated as conducted for a purpose described in this paragraph if it relates to style, taste, cosmetic, or seasonal design factors.\nAny research conducted after the beginning of commercial production of the business component.\nAny research related to the adaptation of an existing business component to a particular customer’s requirement or need.\nAny research related to the reproduction of an existing business component (in whole or in part) from a physical examination of the business component itself or from plans, blueprints, detailed specifications, or publicly available information with respect to such business component.\nAny research conducted outside the United States, the Commonwealth of Puerto Rico, or any possession of the United States.\nAny research in the social sciences, arts, or humanities.\nAny research to the extent funded by any grant, contract, or otherwise by another person (or governmental entity).\nIn the case of a qualified organization described in subparagraph (C) or (D) of paragraph (6), clause (ii) of subparagraph (A) shall not apply.\nExcept in the case of a taxpayer which was in existence during a taxable year (other than a short taxable year) in the base period, the minimum basic research amount for any base period shall not be less than 50 percent of the basic research payments for the taxable year for which a determination is being made under this subsection.\nThe cost-of-living adjustment for any calendar year is the cost-of-living adjustment for such calendar year determined under section 1(f)(3), by substituting “calendar year 1987” for “calendar year 2016” in subparagraph (A)(ii) thereof.\nIf the base period of any taxpayer does not end in 1983 or 1984, section 1(f)(3)(A)(ii) shall, for purposes of this paragraph, be applied by substituting the calendar year in which such base period ends for 2016. Such substitution shall be in lieu of the substitution under clause (i).\nThe term “base period” means the 3-taxable-year period ending with the taxable year immediately preceding the 1st taxable year of the taxpayer beginning after  December 31, 1983 .\nFor purposes of applying subsection (b)(1) to this subsection, any basic research payments shall be treated as an amount paid in carrying on a trade or business of the taxpayer in the taxable year in which it is paid (without regard to the provisions of subsection (b)(3)(B)).\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nIn the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary.\nIf a person acquires the major portion of either a trade or business or a separate unit of a trade or business (hereinafter in this paragraph referred to as the “acquired business”) of another person (hereinafter in this paragraph referred to as the “predecessor”), then the amount of qualified research expenses paid or incurred by the acquiring person during the measurement period shall be increased by the amount determined under clause (ii), and the gross receipts of the acquiring person for such period shall be increased by the amount determined under clause (iii).\nThe amount determined under this clause is the amount which would be determined under clause (ii) if “the gross receipts of” were substituted for “the qualified research expenses paid or incurred by” each place it appears in clauses (ii) and (iv).\nFor purposes of this subparagraph, the term “measurement period” means, with respect to the taxable year of the acquiring person for which the credit is determined, any period of the acquiring person preceding such taxable year which is taken into account for purposes of determining the credit for such year.\nIn the case of any short taxable year, qualified research expenses and gross receipts shall be annualized in such circumstances and under such methods as the Secretary may prescribe by regulation.\nAll persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as related persons for purposes of subparagraph (A)(iii) and as a single person for purposes of subparagraph (A)(iv).\nFor purposes of subsection (a)(3), amounts paid or incurred for any energy research conducted outside the United States, the Commonwealth of Puerto Rico, or any possession of the United States shall not be taken into account.\nAny amount taken into account under subsection (a)(3) shall not be taken into account under paragraph (1) or (2) of subsection (a).\nThe term “energy research” does not include any research which is not qualified research.\nAt the election of a qualified small business for any taxable year, section 3111(f) shall apply to the payroll tax credit portion of the credit otherwise determined under subsection (a) for the taxable year and such portion shall not be treated (other than for purposes of section 280C) as a credit determined under subsection (a).\nSuch term shall not include an organization which is exempt from taxation under section 501.\nThe amount specified in any election made under this subsection shall not exceed $250,000.\nIn the case of taxable years beginning after  December 31, 2022 , the amount in subclause (I) shall be increased by $250,000.\nA person may not make an election under this subsection if such person (or any other person treated as a single taxpayer with such person under paragraph (5)(A)) has made an election under this subsection for 5 or more preceding taxable years.\nIn the case of a qualified small business which is a partnership or S corporation, the election made under this subsection shall be made at the entity level.\nExcept as provided in subparagraph (B), all persons or entities treated as a single taxpayer under subsection (f)(1) shall be treated as a single taxpayer for purposes of this subsection.\nThe date of the enactment of the Energy Tax Incentives Act of 2005, referred to in subsec. (b)(3)(D)(iv), is the date of enactment of title XIII of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nA prior section 41, added  Pub. L. 97–34, title III, §\u202f331(a) ,  Aug. 13, 1981 ,  95 Stat. 289 , §\u202f44G; amended  Pub. L. 97–448, title I, §\u202f103(g)(1) ,  Jan. 12, 1983 ,  96 Stat. 2379 ; renumbered §\u202f41 and amended  Pub. L. 98–369, div. A, title I, §\u202f14 , title IV, §§\u202f471(c), 474( l ), 491(e)(2), (3),  July 18, 1984 ,  98 Stat. 505 , 826, 833, 852, 853, related to employee stock ownership credit, prior to repeal by  Pub. L. 99–514, title XI, §\u202f1171(a) ,  Oct. 22, 1986 ,  100 Stat. 2513 , applicable to compensation paid or accrued after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 1171(c) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 38 of this title . For transition rules relating to such repeal, see  section 1177 of Pub. L. 99–514 , set out as a Transition Rules note under  section 38 of this title .\nAnother prior section 41 was renumbered  section 24 of this title .\n2022—Subsec. (h)(4)(B)(i).  Pub. L. 117–169, §\u202f13902(a) , designated existing provisions as subcl. (I), inserted heading, and added subcl. (II).\nSubsec. (h)(5)(B)(ii).  Pub. L. 117–169, §\u202f13902(c) , substituted “each of the $250,000 amounts” for “the $250,000 amount”.\n2018—Subsec. (c)(4).  Pub. L. 115–141, §\u202f101(c)(1) , (2), redesignated par. (5) as (4) and struck out former par. (4) which related to election of alternative incremental credit.\nSubsec. (c)(4)(A).  Pub. L. 115–141, §\u202f401(b)(6) , struck out “(12 percent in the case of taxable years ending before  January 1, 2009 )” after “14 percent”.\nSubsec. (c)(4)(C).  Pub. L. 115–141, §\u202f101(c)(3) , struck out at end “An election under this paragraph may not be made for any taxable year to which an election under paragraph (4) applies.”\nSubsec. (c)(5) to (7).  Pub. L. 115–141, §\u202f101(c)(2) , redesignated pars. (5) to (7) as (4) to (6), respectively.\n2017—Subsec. (d)(1)(A).  Pub. L. 115–97, §\u202f13206(d)(1) , substituted “specified research or experimental expenditures under section 174” for “expenses under section 174”.\nSubsec. (e)(5)(C)(i).  Pub. L. 115–97, §\u202f11002(d)(1)(F) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (e)(5)(C)(ii).  Pub. L. 115–97, §\u202f11002(d)(2) , substituted “1(f)(3)(A)(ii)” for “1(f)(3)(B)” and “2016” for “1992”.\n2015—Subsec. (h).  Pub. L. 114–113, §\u202f121(c)(1) , added subsec. (h).\nPub. L. 114–113, §\u202f121(a)(1) , struck out subsec. (h) which provided the termination date for applicability of this section and the alternative incremental credit and provided the computation for taxable year in which credit terminates.\n2014—Subsec. (h)(1).  Pub. L. 113–295  substituted “paid or incurred after  December 31, 2014 .” for “paid or incurred—\n“(A) after  June 30, 1995 , and before  July 1, 1996 , or\n“(B) after  December 31, 2013 .”\n2013—Subsec. (f)(1)(A)(ii).  Pub. L. 112–240, §\u202f301(c)(1) , substituted “shall be determined on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, taken into account by such controlled group for purposes of this section” for “shall be its proportionate shares of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, giving rise to the credit”.\nSubsec. (f)(1)(B)(ii).  Pub. L. 112–240, §\u202f301(c)(2) , substituted “shall be determined on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, taken into account by all such persons under common control for purposes of this section” for “shall be its proportionate shares of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, giving rise to the credit”.\nSubsec. (f)(3)(A).  Pub. L. 112–240, §\u202f301(b)(1) , amended subpar. (A) generally. Prior to amendment, text read as follows: “If, after  December 31, 1983 , a taxpayer acquires the major portion of a trade or business of another person (hereinafter in this paragraph referred to as the ‘predecessor’) or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after such acquisition, the amount of qualified research expenses paid or incurred by the taxpayer during periods before such acquisition shall be increased by so much of such expenses paid or incurred by the predecessor with respect to the acquired trade or business as is attributable to the portion of such trade or business or separate unit acquired by the taxpayer, and the gross receipts of the taxpayer for such periods shall be increased by so much of the gross receipts of such predecessor with respect to the acquired trade or business as is attributable to such portion.”\nSubsec. (f)(3)(B).  Pub. L. 112–240, §\u202f301(b)(2) , amended subpar. (B) generally. Prior to amendment, text read as follows: “If, after  December 31, 1983 —\n“(i) a taxpayer disposes of the major portion of any trade or business or the major portion of a separate unit of a trade or business in a transaction to which subparagraph (A) applies, and\n“(ii) the taxpayer furnished the acquiring person such information as is necessary for the application of subparagraph (A),\nthen, for purposes of applying this section for any taxable year ending after such disposition, the amount of qualified research expenses paid or incurred by the taxpayer during periods before such disposition shall be decreased by so much of such expenses as is attributable to the portion of such trade or business or separate unit disposed of by the taxpayer, and the gross receipts of the taxpayer for such periods shall be decreased by so much of the gross receipts as is attributable to such portion.”\nSubsec. (h)(1)(B).  Pub. L. 112–240, §\u202f301(a)(1) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (h)(1)(B).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (c)(5)(A).  Pub. L. 110–343, §\u202f301(c) , substituted “14 percent (12 percent in the case of taxable years ending before  January 1, 2009 )” for “12 percent”.\nSubsec. (h)(1)(B).  Pub. L. 110–343, §\u202f301(a)(1) , substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\nSubsec. (h)(2).  Pub. L. 110–343, §\u202f301(d) , redesignated par. (3) as (2) related to computation for taxable year in which credit terminates.\nPub. L. 110–343, §\u202f301(b) , added par. (2). Former par. (2) redesignated (3).\nSubsec. (h)(3).  Pub. L. 110–343, §\u202f301(d) , amended par. (3) generally, redesignating it as par. (2) related to computation for taxable year in which credit terminated and amending heading and text generally. Prior to amendment, text read as follows: “In the case of any taxable year with respect to which this section applies to a number of days which is less than the total number of days in such taxable year, the base amount with respect to such taxable year shall be the amount which bears the same ratio to the base amount for such year (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year.”\nPub. L. 110–343, §\u202f301(b) , redesignated par. (2) as (3).\n2007—Subsec. (a)(3).  Pub. L. 110–172, §\u202f6(c)(1) , inserted “for energy research” before period at end.\nSubsec. (f)(1)(A)(ii), (B)(ii).  Pub. L. 110–172, §\u202f11(e)(2) , substituted “qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums,” for “qualified research expenses and basic research payments”.\nSubsec. (f)(6)(E).  Pub. L. 110–172, §\u202f6(c)(2) , added subpar. (E).\n2006—Subsec. (c)(4)(A)(i).  Pub. L. 109–432, §\u202f104(b)(1)(A) , substituted “3 percent” for “2.65 percent”.\nSubsec. (c)(4)(A)(ii).  Pub. L. 109–432, §\u202f104(b)(1)(B) , substituted “4 percent” for “3.2 percent”.\nSubsec. (c)(4)(A)(iii).  Pub. L. 109–432, §\u202f104(b)(1)(C) , substituted “5 percent” for “3.75 percent”.\nSubsec. (c)(5) to (7).  Pub. L. 109–432, §\u202f104(c)(1) , added par. (5) and redesignated former pars. (5) and (6) as (6) and (7), respectively.\nSubsec. (h)(1)(B).  Pub. L. 109–432, §\u202f104(a)(1) , substituted “2007” for “2005”.\n2005—Subsec. (a)(3).  Pub. L. 109–58, §\u202f1351(a)(1) , added par. (3).\nSubsec. (b)(3)(C)(ii).  Pub. L. 109–135, §\u202f402 ( l )(2), struck out “(other than an energy research consortium)” after “organization” in introductory provisions.\nPub. L. 109–58, §\u202f1351(a)(3) , inserted “(other than an energy research consortium)” after “organization” in introductory provisions.\nSubsec. (b)(3)(D).  Pub. L. 109–58, §\u202f1351(b) , added subpar. (D).\nSubsec. (f)(6).  Pub. L. 109–58, §\u202f1351(a)(2) , added par. (6).\nSubsec. (f)(6)(C), (D).  Pub. L. 109–135, §\u202f402 ( l )(1), added subpars. (C) and (D).\n2004—Subsec. (h)(1)(B).  Pub. L. 108–311  substituted “ December 31, 2005 ” for “ June 30, 2004 ”.\n1999—Subsec. (c)(4)(A)(i).  Pub. L. 106–170, §\u202f502(b)(1)(A) , substituted “2.65 percent” for “1.65 percent”.\nSubsec. (c)(4)(A)(ii).  Pub. L. 106–170, §\u202f502(b)(1)(B) , substituted “3.2 percent” for “2.2 percent”.\nSubsec. (c)(4)(A)(iii).  Pub. L. 106–170, §\u202f502(b)(1)(C) , substituted “3.75 percent” for “2.75 percent”.\nSubsecs. (c)(6), (d)(4)(F).  Pub. L. 106–170, §\u202f502(c)(1) , inserted “,\u2000the Commonwealth of Puerto Rico, or any possession of the United States” before period at end.\nSubsec. (h)(1).  Pub. L. 106–170, §\u202f502(a)(1)(B) , struck out concluding provisions which read as follows: “Notwithstanding the preceding sentence, in the case of a taxpayer making an election under subsection (c)(4) for its first taxable year beginning after  June 30, 1996 , and before  July 1, 1997 , this section shall apply to amounts paid or incurred during the 36-month period beginning with the first month of such year. The 36 months referred to in the preceding sentence shall be reduced by the number of full months after June 1996 (and before the first month of such first taxable year) during which the taxpayer paid or incurred any amount which is taken into account in determining the credit under this section.”\nSubsec. (h)(1)(B).  Pub. L. 106–170, §\u202f502(a)(1)(A) , substituted “ June 30, 2004 ” for “ June 30, 1999 ”.\n1998—Subsec. (h)(1).  Pub. L. 105–277  substituted “ June 30, 1999 ” for “ June 30, 1998 ” in subpar. (B) and substituted “36-month” for “24-month” and “36 months” for “24 months” in concluding provisions.\n1997—Subsec. (c)(4)(B).  Pub. L. 105–34, §\u202f601(b)(1) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “An election under this paragraph may be made only for the first taxable year of the taxpayer beginning after  June 30, 1996 . Such an election shall apply to the taxable year for which made and all succeeding taxable years unless revoked with the consent of the Secretary.”\nSubsec. (h)(1).  Pub. L. 105–34, §\u202f601(a) , substituted “ June 30, 1998 ” for “ May 31, 1997 ” in subpar. (B) and “during the 24-month period beginning with the first month of such year. The 24 months referred to in the preceding sentence shall be reduced by the number of full months after June 1996 (and before the first month of such first taxable year) during which the taxpayer paid or incurred any amount which is taken into account in determining the credit under this section.” for “during the first 11 months of such taxable year.” in concluding provisions.\n1996—Subsec. (b)(2)(D)(iii).  Pub. L. 104–188, §\u202f1201(e)(1) , (4), substituted “work opportunity credit” for “targeted jobs credit” in heading and text.\nSubsec. (b)(3)(C).  Pub. L. 104–188, §\u202f1204(d) , added subpar. (C).\nSubsec. (c)(3)(B)(i).  Pub. L. 104–188, §\u202f1204(b) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The fixed-base percentage shall be determined under this subparagraph if there are fewer than 3 taxable years beginning after  December 31, 1983 , and before  January 1, 1989 , in which the taxpayer had both gross receipts and qualified research expenses.”\nSubsec. (c)(4) to (6).  Pub. L. 104–188, §\u202f1204(c) , added par. (4) and redesignated former pars. (4) and (5) as (5) and (6), respectively.\nSubsec. (h).  Pub. L. 104–188, §\u202f1204(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—This section shall not apply to any amount paid or incurred after  June 30, 1995 .\n“(2)  Computation of base amount .—In the case of any taxable year which begins before  July 1, 1995 , and ends after  June 30, 1995 , the base amount with respect to such taxable year shall be the amount which bears the same ratio to the base amount for such year (determined without regard to this paragraph) as the number of days in such taxable year before  July 1, 1995 , bears to the total number of days in such taxable year.”\n1993—Subsec. (c)(3)(B)(ii).  Pub. L. 103–66, §\u202f13112(a) , amended heading and text of cl. (ii) generally. Prior to amendment, text read as follows: “In a case to which this subparagraph applies, the fixed-base percentage is 3 percent.”\nSubsec. (c)(3)(B)(iii).  Pub. L. 103–66, §\u202f13112(b)(1) , substituted “clauses (i) and (ii)” for “clause (i)”.\nSubsec. (c)(3)(D).  Pub. L. 103–66, §\u202f13112(b)(2) , substituted “subparagraphs (A) and (B)(ii)” for “subparagraph (A)”.\nSubsec. (e)(5)(C).  Pub. L. 103–66, §\u202f13201(b)(3)(C) , substituted “1992” for “1989” in cls. (i) and (ii).\nSubsec. (h).  Pub. L. 103–66, §\u202f13111(a)(1) , substituted “ June 30, 1995 ” for “ June 30, 1992 ” in pars. (1) and (2) and “ July 1, 1995 ” for “ July 1, 1992 ” in two places in par. (2).\n1991—Subsec. (h).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ” in pars. (1) and (2), and “ July 1, 1992 ” for “ January 1, 1992 ” in two places in par. (2).\n1990—Subsec. (e)(5)(C)(i).  Pub. L. 101–508, §\u202f11101(d)(1)(C)(i) , inserted before period at end “,\u2000by substituting ‘calendar year 1987’ for ‘calendar year 1989’ in subparagraph (B) thereof”.\nSubsec. (e)(5)(C)(ii).  Pub. L. 101–508, §\u202f11101(d)(1)(C)(ii) , (iii), substituted “1989” for “1987” and inserted at end “Such substitution shall be in lieu of the substitution under clause (i).”\nSubsec. (h).  Pub. L. 101–508, §\u202f11402(a) , substituted “ December 31, 1991 ” for “ December 31, 1990 ” wherever appearing and “ January 1, 1992 ” for “ January 1, 1991 ” wherever appearing.\n1989—Subsec. (a)(1)(B).  Pub. L. 101–239, §\u202f7110(b)(2)(A) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the base period research expenses, and”.\nSubsec. (b)(4).  Pub. L. 101–239, §\u202f7110(b)[(c)] , added par. (4).\nSubsec. (c).  Pub. L. 101–239, §\u202f7110(b)(1) , substituted “Base amount” for “Base period research expenses” in heading and amended text generally, substituting pars. (1) to (5) for former pars. (1) to (3) which defined “base period research expenses” and “base period” and prescribed minimum base period research expenses.\nSubsec. (e)(7)(C)(ii).  Pub. L. 101–239, §\u202f7110(b)(2)(B) , substituted “base amount” for “base period research expenses”.\nSubsec. (f)(1).  Pub. L. 101–239, §\u202f7110(b)(2)(C) , substituted “proportionate shares of the qualified research expenses and basic research payments” for “proportionate share of the increase in qualified research expenses” in subpars. (A)(ii) and (B)(ii).\nSubsec. (f)(3)(A).  Pub. L. 101–239, §\u202f7110(b)(2)(D) , substituted “ December 31, 1983 ” for “ June 30, 1980 ” and inserted before period at end “,\u2000and the gross receipts of the taxpayer for such periods shall be increased by so much of the gross receipts of such predecessor with respect to the acquired trade or business as is attributable to such portion”.\nSubsec. (f)(3)(B).  Pub. L. 101–239, §\u202f7110(b)(2)(E) , substituted “ December 31, 1983 ” for “ June 30, 1980 ” in introductory provisions and inserted before period at end “,\u2000and the gross receipts of the taxpayer for such periods shall be decreased by so much of the gross receipts as is attributable to such portion”.\nSubsec. (f)(3)(C).  Pub. L. 101–239, §\u202f7110(b)(2)(F) , substituted “Certain reimbursements taken into account in determining fixed-base percentage” for “Increase in base period” in heading, “for the taxable years taken into account in computing the fixed-base percentage shall be increased by the lesser of” for “for the base period for such taxable year shall be increased by the lesser of” in introductory provisions, and new cls. (i) and (ii) for former cls. (i) and (ii) which read as follows:\n“(i) the amount of the decrease under subparagraph (B) which is allocable to such base period, or\n“(ii) the product of the number of years in the base period, multiplied by the amount of the reimbursement described in this subparagraph.”\nSubsec. (f)(4).  Pub. L. 101–239, §\u202f7110(b)(2)(G) , inserted “and gross receipts” after “qualified research expenses”.\nSubsec. (h).  Pub. L. 101–239, §\u202f7814(e)(2)(C) , redesignated subsec. (i) as (h) and struck out former subsec. (h) which related to election, time for election, and manner of election by taxpayer to have research credit not apply for a taxable year.\nSubsec. (h)(1).  Pub. L. 101–239, §\u202f7110(a)(1)(A) , substituted “ December 31, 1990 ” for “ December 31, 1989 ”.\nSubsec. (h)(2).  Pub. L. 101–239, §\u202f7110(a)(1) , substituted “ January 1, 1991 ” for “ January 1, 1990 ” in two places and substituted “ December 31, 1990 ” for “ December 31, 1989 ”.\nPub. L. 101–239, §\u202f7110(b)(2)(H) , substituted “base amount” for “base period expenses” in heading and “the base amount with respect to such taxable year shall be the amount which bears the same ratio to the base amount for such year (determined without regard to this paragraph)” for “any amount for any base period with respect to such taxable year shall be the amount which bears the same ratio to such amount for such base period” in text.\nSubsec. (i).  Pub. L. 101–239, §\u202f7814(e)(2)(C) , redesignated subsec. (i) as (h).\n1988—Subsec. (g).  Pub. L. 100–647, §\u202f1002(h)(1) , inserted at end “If the amount determined under subsection (a) for any taxable year exceeds the limitation of the preceding sentence, such amount may be carried to other taxable years under the rules of section 39; except that the limitation of the preceding sentence shall be taken into account in lieu of the limitation of section 38(c) in applying section 39.”\nSubsec. (h).  Pub. L. 100–647, §\u202f4008(b)(1) , added subsec. (h). Former subsec. (h) redesignated (i).\nSubsec. (i).  Pub. L. 100–647, §\u202f4008(b)(1) , redesignated former subsec. (h) as (i).\nPub. L. 100–647, §\u202f4007(a) , substituted “1989” and “1990” for “1988” and “1989”, respectively, wherever appearing in subsec. (h), prior to redesignation as subsec. (i) by  Pub. L. 100–647, §\u202f4008(b)(1) .\n1986— Pub. L. 99–514, §\u202f231(d)(2) , renumbered  section 30 of this title  as this section.\nSubsec. (a).  Pub. L. 99–514, §\u202f231(c)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 25 percent of the excess (if any) of—\n“(1) the qualified research expenses for the taxable year, over\n“(2) the base period research expenses.”\nSubsec. (b)(2)(A)(iii).  Pub. L. 99–514, §\u202f231(e) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “any amount paid or incurred to another person for the right to use personal property in the conduct of qualified research.”\nSubsec. (b)(2)(D)(iii).  Pub. L. 99–514, §\u202f1847(b)(1) , substituted “targeted jobs credit” for “new jobs or WIN credit” in heading.\nSubsec. (d).  Pub. L. 99–514, §\u202f231(b) , inserted “defined” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this section the term ‘qualified research’ has the same meaning as the term research or experimental has under section 174, except that such term shall not include—\n“(1) qualified research conducted outside the United States,\n“(2) qualified research in the social sciences or humanities, and\n“(3) qualified research to the extent funded by any grant, contract, or otherwise by another person (or any governmental entity).”\nSubsec. (e).  Pub. L. 99–514, §\u202f231(c)(2) , amended subsec. (e) generally, substituting “Credit allowable with respect to certain payments to qualified organizations for basic research” for “Credit available with respect to certain basic research by colleges, universities, and certain research organizations” in heading, and restating and expanding provisions of former pars. (1) to (4) into new pars. (1) to (7).\nSubsec. (g).  Pub. L. 99–514, §\u202f231(d)(3)(C)(ii) , amended subsec. (g) generally, substituting provisions relating to special rule for pass-thru of credit for provisions relating to limitation on amount of credit for research based on amount of tax liability.\nSubsec. (h).  Pub. L. 99–514, §\u202f231(a)(1) , added subsec. (h).\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 44F of this title  as this section.\nSubsec. (b)(2)(D)(iii).  Pub. L. 98–369, §\u202f474(i)(1)(A) , substituted “in determining the targeted jobs credit under section 51(a)” for “in computing the credit under section 40 or 44B”.\nSubsec. (g)(1)(A).  Pub. L. 98–369, §\u202f612(e)(1) , substituted “section 26(b)” for “section 25(b)”.\nPub. L. 98–369, §\u202f474(i)(1)(B) , amended subpar. (A) generally, substituting “shall not exceed the taxpayer’s tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits allowable under subpart A and sections 27, 28, and 29” for “shall not exceed the amount of the tax imposed by this chapter reduced by the sum of the credits allowable under a section of this part having a lower number or letter designation than this section, other than the credits allowable by sections 31, 39, and 43. For purposes of the preceding sentence, the term ‘tax imposed by this chapter’ shall not include any tax treated as not imposed by this chapter under the last sentence of section 53(a)”.\n1983—Subsec. (b)(2)(A).  Pub. L. 97–448  inserted provision that cl. (iii) would not apply to any amount to the extent that the taxpayer (or any person with whom the taxpayer must aggregate expenditures under subsection (f)(1)) received or accrued any amount from any other person for the right to use substantially identical personal property.\n1982—Subsec. (f)(2)(A).  Pub. L. 97–354, §\u202f5(a)(3)(A) , substituted “Pass-thru in the case of estates and trusts” for “Pass-through in the case of subchapter S corporations, etc.” in subpar. heading, and substituted provisions relating to the applicability of rules similar to rules of subsec. (d) of section 52 for provisions relating to the applicability of rules similar to rules of subsecs. (d) and (e) of section 52.\nSubsec. (g)(1)(B)(iv).  Pub. L. 97–354, §\u202f5(a)(3)(B) , substituted “an S corporation” for “an electing small business corporation (within the meaning of section 1371(b))”.\nPub. L. 117–169, title I, §\u202f13902(d) ,  Aug. 16, 2022 ,  136 Stat. 2014 , provided that:  “The amendments made by this section [amending this section and  section 3111 of this title ] shall apply to taxable years beginning after  December 31, 2022 .”\nAmendment by  section 101(c) of Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by section 11002(d)(1)(F), (2) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f13206(e) ,  Dec. 22, 2017 ,  131 Stat. 2113 , provided that:  “The amendments made by this section [amending this section and sections 174 and 280C of this title] shall apply to amounts paid or incurred in taxable years beginning after  December 31, 2021 .”\nAmendment by  section 121(a)(1) of Pub. L. 114–113  applicable to amounts paid or incurred after  Dec. 31, 2014 , see  section 121(d)(1) of Pub. L. 114–113 , set out as a note under  section 38 of this title .\nAmendment by  section 121(c)(1) of Pub. L. 114–113  applicable to taxable years beginning after  Dec. 31, 2015 , see  section 121(d)(3) of Pub. L. 114–113 , set out as a note under  section 38 of this title .\nPub. L. 113–295, div. A, title I, §\u202f111(c) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendments made by this section [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f301(d) ,  Jan. 2, 2013 ,  126 Stat. 2328 , provided that: \n “(1)   Extension .— The amendments made by subsection (a) [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  December 31, 2011 . \n \n “(2)   Modifications .— The amendments made by subsections (b) and (c) [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f731(c) ,  Dec. 17, 2010 ,  124 Stat. 3317 , provided that:  “The amendments made by this section [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f301(e) ,  Oct. 3, 2008 ,  122 Stat. 3866 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 45C of this title ] shall apply to taxable years beginning after  December 31, 2007 . \n \n “(2)   Extension .— The amendments made by subsection (a) [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  December 31, 2007 .”\nAmendment by  section 6(c) of Pub. L. 110–172  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 6(e) of Pub. L. 110–172 , set out as a note under  section 30C of this title .\nPub. L. 110–172, §\u202f11(e)(3) ,  Dec. 29, 2007 ,  121 Stat. 2489 , provided that:  “The amendments made by this subsection [amending this section and  section 6427 of this title ] shall take effect as if included in the provisions of the Energy Policy Act of 2005 [ Pub. L. 109–58 ] to which they relate.”\nPub. L. 109–432, div. A, title I, §\u202f104(a)(3) ,  Dec. 20, 2006 ,  120 Stat. 2934 , provided that:  “The amendments made by this subsection [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  December 31, 2005 .”\nPub. L. 109–432, div. A, title I, §\u202f104(b)(2) , (3),  Dec. 20, 2006 ,  120 Stat. 2934 , provided that: \n “(2)   Effective date .— Except as provided in paragraph (3), the amendments made by this subsection [amending this section] shall apply to taxable years ending after  December 31, 2006 . \n \n “(3)   Transition rule.— “(A)   In general .— In the case of a specified transitional taxable year for which an election under section 41(c)(4) of the Internal Revenue Code of 1986 applies, the credit determined under section 41(a)(1) of such Code shall be equal to the sum of— “(i)  the applicable 2006 percentage multiplied by the amount determined under section 41(c)(4)(A) of such Code (as in effect for taxable years ending on  December 31, 2006 ), plus \n \n “(ii)  the applicable 2007 percentage multiplied by the amount determined under section 41(c)(4)(A) of such Code (as in effect for taxable years ending on  January 1, 2007 ). \n \n \n “(B)   Definitions .— For purposes of subparagraph (A)— “(i)   Specified transitional taxable year .— The term ‘specified transitional taxable year’ means any taxable year which ends after  December 31, 2006 , and which includes such date. \n \n “(ii)   Applicable 2006 percentage .— The term ‘applicable 2006 percentage’ means the number of days in the specified transitional taxable year before  January 1, 2007 , divided by the number of days in such taxable year. \n \n “(iii)   Applicable 2007 percentage .— The term ‘applicable 2007 percentage’ means the number of days in the specified transitional taxable year after  December 31, 2006 , divided by the number of days in such taxable year.”\nPub. L. 109–432, div. A, title I, §\u202f104(c)(2) –(4),  Dec. 20, 2006 ,  120 Stat. 2935 , provided that: \n “(2)   Transition rule for deemed revocation of election of alternative incremental credit .— In the case of an election under section 41(c)(4) of the Internal Revenue Code of 1986 which applies to the taxable year which includes  January 1, 2007 , such election shall be treated as revoked with the consent of the Secretary of the Treasury if the taxpayer makes an election under section 41(c)(5) of such Code (as added by this subsection) for such year. \n \n “(3)   Effective date .— Except as provided in paragraph (4), the amendments made by this subsection [amending this section] shall apply to taxable years ending after  December 31, 2006 . \n \n “(4)   Transition rule for noncalendar taxable years.— “(A)   In general .— In the case of a specified transitional taxable year for which an election under section 41(c)(5) of the Internal Revenue Code of 1986 (as added by this subsection) applies, the credit determined under section 41(a)(1) of such Code shall be equal to the sum of— “(i)  the applicable 2006 percentage multiplied by the amount determined under section 41(a)(1) of such Code (as in effect for taxable years ending on  December 31, 2006 ), plus \n \n “(ii)  the applicable 2007 percentage multiplied by the amount determined under section 41(c)(5) of such Code (as in effect for taxable years ending on  January 1, 2007 ). \n \n \n “(B)   Definitions and special rules .— For purposes of subparagraph (A)— “(i)   Definitions .— Terms used in this paragraph which are also used in subsection (b)(3) [set out above] shall have the respective meanings given such terms in such subsection. \n \n “(ii)   Dual elections permitted .— Elections under paragraphs (4) and (5) of section 41(c) of such Code may both apply for the specified transitional taxable year. \n \n “(iii)   Deferral of deemed election revocation .— Any election under section 41(c)(4) of the Internal Revenue Code of 1986 treated as revoked under paragraph (2) shall be treated as revoked for the taxable year after the specified transitional taxable year.”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nPub. L. 109–58, title XIII, §\u202f1351(c) ,  Aug. 8, 2005 ,  119 Stat. 1058 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or incurred after the date of the enactment of this Act [ Aug. 8, 2005 ], in taxable years ending after such date.”\nPub. L. 108–311, title III, §\u202f301(b) ,  Oct. 4, 2004 ,  118 Stat. 1178 , provided that:  “The amendments made by this section [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  June 30, 2004 .”\nPub. L. 106–170, title V, §\u202f502(a)(3) ,  Dec. 17, 1999 ,  113 Stat. 1919 , provided that:  “The amendments made by this subsection [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  June 30, 1999 .”\nPub. L. 106–170, title V, §\u202f502(b)(2) ,  Dec. 17, 1999 ,  113 Stat. 1919 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  June 30, 1999 .”\nPub. L. 106–170, title V, §\u202f502(c)(3) ,  Dec. 17, 1999 ,  113 Stat. 1920 , provided that:  “The amendments made by this subsection [amending this section and  section 280C of this title ] shall apply to amounts paid or incurred after  June 30, 1999 .”\nPub. L. 105–277, div. J, title I, §\u202f1001(c) ,  Oct. 21, 1998 ,  112 Stat. 2681–888 , provided that:  “The amendments made by this section [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  June 30, 1998 .”\nPub. L. 105–34, title VI, §\u202f601(c) ,  Aug. 5, 1997 ,  111 Stat. 862 , provided that:  “The amendments made by this section [amending this section and  section 45C of this title ] shall apply to amounts paid or incurred after  May 31, 1997 .”\nAmendment by section 1201(e)(1), (4) of  Pub. L. 104–188  applicable to individuals who begin work for the employer after  Sept. 30, 1996 , see  section 1201(g) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 104–188, title I, §\u202f1204(f) ,  Aug. 20, 1996 ,  110 Stat. 1775 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and section 28 [now 45C] of this title] shall apply to taxable years ending after  June 30, 1996 . \n \n “(2)   Subsections  (c)  and  (d).— The amendments made by subsections (c) and (d) [amending this section] shall apply to taxable years beginning after  June 30, 1996 . \n \n “(3)   Estimated tax .— The amendments made by this section shall not be taken into account under section 6654 or 6655 of the Internal Revenue Code of 1986 (relating to failure to pay estimated tax) in determining the amount of any installment required to be paid for a taxable year beginning in 1997.”\nAmendment by  section 13111(a)(1) of Pub. L. 103–66  applicable to taxable years ending after  June 30, 1992 , see  section 13111(c) of Pub. L. 103–66 , set out as a note under  section 45C of this title .\nPub. L. 103–66, title XIII, §\u202f13112(c) ,  Aug. 10, 1993 ,  107 Stat. 422 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1993 .”\nAmendment by  section 13201(b)(3)(C) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 102–227  applicable to taxable years ending after  Dec. 31, 1991 , see  section 102(c) of Pub. L. 102–227 , set out as a note under  section 45C of this title .\nAmendment by  section 11101(d)(1)(C) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nAmendment by  section 11402(a) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 11402(c) of Pub. L. 101–508 , set out as a note under  section 45C of this title .\nPub. L. 101–239, title VII, §\u202f7110(e) ,  Dec. 19, 1989 ,  103 Stat. 2326 , provided that:  “The amendments made by this section [amending this section and sections 28, 174, 196, and 280C of this title] (other than subsection (a) [amending this section and  section 28 of this title ]) shall apply to taxable years beginning after  December 31, 1989 .”\nAmendment by  section 7814(e)(2)(C) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 1002(h)(1) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4008(d) ,  Nov. 10, 1988 ,  102 Stat. 3653 , provided that:  “The amendments made by this section [amending this section and sections 28, 196, 280C, and 6501 of this title] shall apply to taxable years beginning after  December 31, 1988 .”\nPub. L. 99–514, title II, §\u202f231(g) ,  Oct. 22, 1986 ,  100 Stat. 2180 , provided that: \n “(1)   In general .— Except as provided in this subsection (2), the amendments made by this section [amending this section and sections 28, 38, 39, 108, 170, 280C, 381, 936, 6411, and 6511 of this title, renumbering former  section 30 of this title  as this section, and enacting and amending provisions set out as notes under this section] shall apply to taxable years beginning after  December 31, 1985 . \n \n “(2)   Subsection  (a).— The amendments made by subsection (a) [amending this section and provisions set out as a note under this section] shall apply to taxable years ending after  December 31, 1985 . \n \n “(3)   Basic research .— Section 41(a)(2) of the Internal Revenue Code of 1986 (as added by this section), and the amendments made by subsection (c)(2) [amending this section], shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1847(b)(1) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 474(i)(1) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 612(e)(1) of Pub. L. 98–369  applicable to interest paid or accrued after  Dec. 31, 1984 , on indebtedness incurred after  Dec. 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nPub. L. 97–448, title I, §\u202f102(h)(2) ,  Jan. 12, 1983 ,  96 Stat. 2372 , provided that the amendment made by that section is effective only with respect to amounts paid or incurred after  March 31, 1982 .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 97–34, title II, §\u202f221(d) ,  Aug. 13, 1981 ,  95 Stat. 241 , as amended by  Pub. L. 99–514, §\u202f2 , title II, §\u202f231(a)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2173, provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 55, 381, 383, 6096, 6411, and 6511 of this title] shall apply to amounts paid or incurred after  June 30, 1981 . \n \n “(2)   Transitional rule.— “(A)   In general .— If, with respect to the first taxable year to which the amendments made by this section apply and which ends in 1981 or 1982, the taxpayer may only take into account qualified research expenses paid or incurred during a portion of such taxable year, the amount of the qualified research expenses taken into account for the base period of such taxable year shall be the amount which bears the same ratio to the total qualified research expenses for such base period as the number of months in such portion of such taxable year bears to the total number of months in such taxable year. \n \n “(B)   Definitions .— For purposes of the preceding sentence, the terms ‘qualified research expenses’ and ‘base period’ have the meanings given to such terms by section 44F [now 41] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section).”\nFor provisions that nothing in amendment by  section 401(b)(6) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 109–432, div. A, title I, §\u202f123 ,  Dec. 20, 2006 ,  120 Stat. 2944 , provided that: \n “(a)   Research Credit Elections .— In the case of any taxable year ending after  December 31, 2005 , and before the date of the enactment of this Act [ Dec. 20, 2006 ], any election under section 41(c)(4) or section 280C(c)(3)(C) [now 280C(c)(2)(C)] of the Internal Revenue Code of 1986 shall be treated as having been timely made for such taxable year if such election is made not later than the later of  April 15, 2007 , or such time as the Secretary of the Treasury, or his designee, may specify. Such election shall be made in the manner prescribed by such Secretary or designee. \n \n “(b)   Other Elections .— Except as otherwise provided by such Secretary or designee, a rule similar to the rule of subsection (a) shall apply with respect to elections under any other expired provision of the Internal Revenue Code of 1986 the applicability of which is extended by reason of the amendments made by this title [amending this section and sections 32, 45A, 45C, 45D, 51, 54, 62, 164, 168, 170, 198, 220, 222, 613A, 1397E, 1400, 1400A to 1400C, 1400F, 1400N, 6103, 7608, 7652, and 9812 of this title,  section 1185a of Title 29 , Labor, and  section 300gg–5 of Title 42 , The Public Health and Welfare, and repealing  section 51A of this title ].”\nPub. L. 106–170, title V, §\u202f502(d) ,  Dec. 17, 1999 ,  113 Stat. 1920 , provided that: \n “(1)   In general .— For purposes of the Internal Revenue Code of 1986, the credit determined under section 41 of such Code which is otherwise allowable under such Code— “(A)  shall not be taken into account prior to  October 1, 2000 , to the extent such credit is attributable to the first suspension period; and \n \n “(B)  shall not be taken into account prior to  October 1, 2001 , to the extent such credit is attributable to the second suspension period. \n \n\n On or after the earliest date that an amount of credit may be taken into account, such amount may be taken into account through the filing of an amended return, an application for expedited refund, an adjustment of estimated taxes, or other means allowed by such Code. \n \n “(2)   Suspension periods .— For purposes of this subsection— “(A)  the first suspension period is the period beginning on  July 1, 1999 , and ending on  September 30, 2000 ; and \n \n “(B)  the second suspension period is the period beginning on  October 1, 2000 , and ending on  September 30, 2001 . \n \n \n “(3)   Expedited refunds.— “(A)   In general .— If there is an overpayment of tax with respect to a taxable year by reason of paragraph (1), the taxpayer may file an application for a tentative refund of such overpayment. Such application shall be in such manner and form, and contain such information, as the Secretary may prescribe. \n \n “(B)   Deadline for applications .— Subparagraph (A) shall apply only to an application filed before the date which is 1 year after the close of the suspension period to which the application relates. \n \n “(C)   Allowance of adjustments .— Not later than 90 days after the date on which an application is filed under this paragraph, the Secretary shall— “(i)  review the application; \n \n “(ii)  determine the amount of the overpayment; and \n \n “(iii)  apply, credit, or refund such overpayment, \n \n\n in a manner similar to the manner provided in section 6411(b) of such Code. \n \n “(D)   Consolidated returns .— The provisions of section 6411(c) of such Code shall apply to an adjustment under this paragraph in such manner as the Secretary may provide. \n \n \n “(4)   Credit attributable to suspension period.— “(A)   In general .— For purposes of this subsection, in the case of a taxable year which includes a portion of the suspension period, the amount of credit determined under section 41 of such Code for such taxable year which is attributable to such period is the amount which bears the same ratio to the amount of credit determined under such section 41 for such taxable year as the number of months in the suspension period which are during such taxable year bears to the number of months in such taxable year. \n \n “(B)   Waiver of estimated tax penalties .— No addition to tax shall be made under section 6654 or 6655 of such Code for any period before  July 1, 1999 , with respect to any underpayment of tax imposed by such Code to the extent such underpayment was created or increased by reason of subparagraph (A). \n \n \n “(5)   Secretary .— For purposes of this subsection, the term ‘Secretary’ means the Secretary of the Treasury (or such Secretary’s delegate).”\nPub. L. 101–239, title VII, §\u202f7110(a)(2) ,  Dec. 19, 1989 ,  103 Stat. 2323 , which set forth the method of determining the amount treated as qualified research expenses for taxable years beginning before  Oct. 1, 1990 , and ending after  Sept. 30, 1990 , was repealed by  Pub. L. 101–508, title XI, §\u202f11402(b)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 .\n[ Pub. L. 104–188, title I, §\u202f1702(d)(1) ,  Aug. 20, 1996 ,  110 Stat. 1870 , provided that:  “Notwithstanding section 11402(c) of the Revenue Reconciliation Act of 1990 [ Pub. L. 101–508 , set out as a note under  section 45C of this title ], the amendment made by section 11402(b)(1) of such Act [repealing  section 7110(a)(2) of Pub. L. 101–239 , formerly set out as a note above] shall apply to taxable years ending after  December 31, 1989 .” \n]\nPub. L. 100–647, title IV, §\u202f4007(b) ,  Nov. 10, 1988 ,  102 Stat. 3652 , directed Comptroller General of United States to conduct a study of credit provided by  26 U.S.C. 41  and submit a report of the study not later than  Dec. 31, 1989 , to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate.\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f474(i)(2) ,  July 18, 1984 ,  98 Stat. 832 , provided that:  \n “For purposes of determining— “(A)  whether any excess credit under old section 44F [now 41] for a taxable year beginning before  January 1, 1984 , is allowable as a carryover under new section 30 [now 41], and \n \n “(B)  the period during which new section 30 [now 41] is in effect, \n \n\n new section 30 [now 41] shall be treated as a continuation of old section 44F (and shall apply only to the extent old section 44F would have applied).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of any new or existing building to which paragraph (2) does not apply and which is placed in service by the taxpayer after  December 31, 2020 , the applicable percentage shall not be less than 4 percent.\nFor purposes of subparagraph (A), the term “applicable fraction” means the smaller of the unit fraction or the floor space fraction.\nThe eligible basis of a new building is its adjusted basis as of the close of the 1st taxable year of the credit period.\nFor purposes of subparagraph (A), the adjusted basis of any building shall not include so much of the basis of such building as is determined by reference to the basis of other property held at any time by the person acquiring the building.\nFor purposes of subparagraph (B)(iii), a person (hereinafter in this subclause referred to as the “related person”) is related to any person if the related person bears a relationship to such person specified in section 267(b) or 707(b)(1), or the related person and such person are engaged in trades or businesses under common control (within the meaning of subsections (a) and (b) of section 52).\nExcept as provided in subparagraph (B), the eligible basis of any building shall be reduced by an amount equal to the portion of the adjusted basis of the building which is attributable to residential rental units in the building which are not low-income units and which are above the average quality standard of the low-income units in the building.\nExcept as provided in subparagraphs (B) and (C), the adjusted basis of any building shall be determined without regard to the adjusted basis of any property which is not residential rental property.\nThe adjusted basis of any building shall be determined by taking into account the adjusted basis of property (of a character subject to the allowance for depreciation) used in common areas or provided as comparable amenities to all residential rental units in such building.\nThe adjusted basis of any building located in a qualified census tract (as defined in paragraph (5)(B)(ii)) shall be determined by taking into account the adjusted basis of property (of a character subject to the allowance for depreciation and not otherwise taken into account) used throughout the taxable year in providing any community service facility.\nFor purposes of this subparagraph, the term “community service facility” means any facility designed to serve primarily individuals whose income is 60 percent or less of area median income (within the meaning of subsection (g)(1)(B)).\nThe adjusted basis of any building shall be determined without regard to paragraphs (2) and (3) of section 1016(a).\nThe eligible basis of a building shall not include any costs financed with the proceeds of a federally funded grant.\nThe term “qualified census tract” means any census tract which is designated by the Secretary of Housing and Urban Development and, for the most recent year for which census data are available on household income in such tract, either in which 50 percent or more of the households have an income which is less than 60 percent of the area median gross income for such year or which has a poverty rate of at least 25 percent. If the Secretary of Housing and Urban Development determines that sufficient data for any period are not available to apply this clause on the basis of census tracts, such Secretary shall apply this clause for such period on the basis of enumeration districts.\nThe portion of a metropolitan statistical area which may be designated for purposes of this subparagraph shall not exceed an area having 20 percent of the population of such metropolitan statistical area.\nFor purposes of this clause, each metropolitan statistical area shall be treated as a separate area and all nonmetropolitan areas in a State shall be treated as 1 area.\nThe term “difficult development areas” means any area designated by the Secretary of Housing and Urban Development as an area which has high construction, land, and utility costs relative to area median gross income.\nThe portions of metropolitan statistical areas which may be designated for purposes of this subparagraph shall not exceed an aggregate area having 20 percent of the population of such metropolitan statistical areas. A comparable rule shall apply to nonmetropolitan areas.\nAny building which is designated by the State housing credit agency as requiring the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified low-income housing project shall be treated for purposes of this subparagraph as located in a difficult development area which is designated for purposes of this subparagraph. The preceding sentence shall not apply to any building if paragraph (1) of subsection (h) does not apply to any portion of the eligible basis of such building by reason of paragraph (4) of such subsection.\nParagraph (2)(B)(ii) shall not apply to any federally- or State-assisted building.\nOn application by the taxpayer, the Secretary may waive paragraph (2)(B)(ii) with respect to any building acquired from an insured depository institution in default (as defined in section 3 of the Federal Deposit Insurance Act) or from a receiver or conservator of such an institution.\nThe term “federally-assisted building” means any building which is substantially assisted, financed, or operated under section 8 of the United States Housing Act of 1937, section 221(d)(3), 221(d)(4), or 236 of the National Housing Act, section 515 of the Housing Act of 1949, or any other housing program administered by the Department of Housing and Urban Development or by the Rural Housing Service of the Department of Agriculture.\nThe term “State-assisted building” means any building which is substantially assisted, financed, or operated under any State law similar in purposes to any of the laws referred to in clause (i).\nRehabilitation expenditures paid or incurred by the taxpayer with respect to any building shall be treated for purposes of this section as a separate new building.\nThe term “rehabilitation expenditures” means amounts chargeable to capital account and incurred for property (or additions or improvements to property) of a character subject to the allowance for depreciation in connection with the rehabilitation of a building.\nSuch term does not include the cost of acquiring any building (or interest therein) or any amount not permitted to be taken into account under paragraph (3) or (4) of subsection (d).\nIn the case of a building acquired by the taxpayer from a governmental unit, at the election of the taxpayer, subparagraph (A)(ii)(I) shall not apply and the credit under this section for such rehabilitation expenditures shall be determined using the percentage applicable under subsection (b)(2)(B)(ii).\nThe determination under subparagraph (A) shall be made as of the close of the 1st taxable year in the credit period with respect to such expenditures.\nRehabilitation expenditures may, at the election of the taxpayer, be taken into account under this subsection or subsection (d)(2)(A)(i) but not under both such subsections.\nThe Secretary may prescribe regulations, consistent with the purposes of this subsection, treating a group of units with respect to which rehabilitation expenditures are incurred as a separate new building.\nAny reduction by reason of subparagraph (A) in the credit allowable (without regard to subparagraph (A)) for the 1st taxable year of the credit period shall be allowable under subsection (a) for the 1st taxable year following the credit period.\nA rule similar to the rule of paragraph (2)(A) shall apply to any increase in qualified basis to which subparagraph (A) applies for the 1st year of such increase.\nIf a building (or an interest therein) is disposed of during any year for which credit is allowable under subsection (a), such credit shall be allocated between the parties on the basis of the number of days during such year the building (or interest) was held by each. In any such case, proper adjustments shall be made in the application of subsection (j).\nThe credit period for an existing building shall not begin before the 1st taxable year of the credit period for rehabilitation expenditures with respect to the building.\nThe project meets the requirements of this subparagraph if 20 percent or more of the residential units in such project are both rent-restricted and occupied by individuals whose income is 50 percent or less of area median gross income.\nThe project meets the requirements of this subparagraph if 40 percent or more of the residential units in such project are both rent-restricted and occupied by individuals whose income is 60 percent or less of area median gross income.\nThe project meets the minimum requirements of this subparagraph if 40 percent or more (25 percent or more in the case of a project described in section 142(d)(6)) of the residential units in such project are both rent-restricted and occupied by individuals whose income does not exceed the imputed income limitation designated by the taxpayer with respect to the respective unit.\nThe taxpayer shall designate the imputed income limitation of each unit taken into account under such clause.\nThe average of the imputed income limitations designated under subclause (I) shall not exceed 60 percent of area median gross income.\nThe designated imputed income limitation of any unit under subclause (I) shall be 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 percent, or 80 percent of area median gross income.\nFor purposes of paragraph (1), a residential unit is rent-restricted if the gross rent with respect to such unit does not exceed 30 percent of the imputed income limitation applicable to such unit. For purposes of the preceding sentence, the amount of the income limitation under paragraph (1) applicable for any period shall not be less than such limitation applicable for the earliest period the building (which contains the unit) was included in the determination of whether the project is a qualified low-income housing project.\nExcept as provided in clauses (ii), (iii), and (iv), notwithstanding an increase in the income of the occupants of a low-income unit above the income limitation applicable under paragraph (1), such unit shall continue to be treated as a low-income unit if the income of such occupants initially met such income limitation and such unit continues to be rent-restricted.\nIn the case of a project with respect to which the taxpayer elects the requirements of subparagraph (A) or (B) of paragraph (1), if the income of the occupants of the unit increases above 140 percent of the income limitation applicable under paragraph (1), clause (i) shall cease to apply to such unit if any residential rental unit in the building (of a size comparable to, or smaller than, such unit) is occupied by a new resident whose income exceeds such income limitation.\nExcept as otherwise provided in this paragraph, a building shall be treated as a qualified low-income building only if the project (of which such building is a part) meets the requirements of paragraph (1) not later than the close of the 1st year of the credit period for such building.\nIn determining whether a building (hereinafter in this subparagraph referred to as the “prior building”) is a qualified low-income building, the taxpayer may take into account 1 or more additional buildings placed in service during the 12-month period described in subparagraph (A) with respect to the prior building only if the taxpayer elects to apply clause (ii) with respect to each additional building taken into account.\nIn the case of a building which the taxpayer elects to take into account under clause (i), the period under subparagraph (A) for such building shall end at the close of the 12-month period applicable to the prior building.\nFor purposes of determining the credit period and the compliance period for the prior building, the prior building shall be treated for purposes of this section as placed in service on the most recent date any additional building elected by the taxpayer (with respect to such prior building) was placed in service.\nFor purposes of this section, a project shall be treated as consisting of only 1 building unless, before the close of the 1st calendar year in the project period (as defined in subsection (h)(1)(F)(ii)), each building which is (or will be) part of such project is identified in such form and manner as the Secretary may provide.\nParagraphs (2) (other than subparagraph (A) thereof), (3), (4), (5), (6), and (7) of section 142(d), and section 6652(j), shall apply for purposes of determining whether any project is a qualified low-income housing project and whether any unit is a low-income unit; except that, in applying such provisions for such purposes, the term “gross rent” shall have the meaning given such term by paragraph (2)(B) of this subsection.\nFor purposes of this section, the taxpayer may elect to treat any building as not part of a qualified low-income housing project for any period beginning after the compliance period for such building.\nBuildings which would (but for their lack of proximity) be treated as a project for purposes of this section shall be so treated if all of the dwelling units in each of the buildings are rent-restricted (within the meaning of paragraph (2)) residential rental units.\nThe amount of the credit determined under this section for any taxable year with respect to any building shall not exceed the housing credit dollar amount allocated to such building under this subsection.\nExcept in the case of an allocation which meets the requirements of subparagraph (C), (D), (E), or (F), an allocation shall be taken into account under subparagraph (A) only if it is made not later than the close of the calendar year in which the building is placed in service.\nAn allocation meets the requirements of this subparagraph if there is a binding commitment (not later than the close of the calendar year in which the building is placed in service) by the housing credit agency to allocate a specified housing credit dollar amount to such building beginning in a specified later taxable year.\nAn allocation meets the requirements of this subparagraph if such allocation is made not later than the close of the calendar year in which ends the taxable year to which it will 1st apply but only to the extent the amount of such allocation does not exceed the limitation under clause (ii).\nNotwithstanding clause (i), the full amount of the allocation shall be taken into account under paragraph (2).\nAn allocation meets the requirements of this subparagraph if such allocation is made with respect to a qualified building which is placed in service not later than the close of the second calendar year following the calendar year in which the allocation is made.\nFor purposes of clause (i), the term “qualified building” means any building which is part of a project if the taxpayer’s basis in such project (as of the date which is 1 year after the date that the allocation was made) is more than 10 percent of the taxpayer’s reasonably expected basis in such project (as of the close of the second calendar year referred to in clause (i)). Such term does not include any existing building unless a credit is allowable under subsection (e) for rehabilitation expenditures paid or incurred by the taxpayer with respect to such building for a taxable year ending during the second calendar year referred to in clause (i) or the prior taxable year.\nThe aggregate housing credit dollar amount which a housing credit agency may allocate for any calendar year is the portion of the State housing credit ceiling allocated under this paragraph for such calendar year to such agency.\nExcept as provided in subparagraphs (D) and (E), the State housing credit ceiling for each calendar year shall be allocated to the housing credit agency of such State. If there is more than 1 housing credit agency of a State, all such agencies shall be treated as a single agency.\nThe unused housing credit carryover of a State for any calendar year shall be assigned to the Secretary for allocation among qualified States for the succeeding calendar year.\nThe amount allocated under this subparagraph to a qualified State for any calendar year shall be the amount determined by the Secretary to bear the same ratio to the aggregate unused housing credit carryovers of all States for the preceding calendar year as such State’s population for the calendar year bears to the population of all qualified States for the calendar year. For purposes of the preceding sentence, population shall be determined in accordance with section 146(j).\nIn the case of any State which contains 1 or more constitutional home rule cities, for purposes of applying this paragraph with respect to housing credit agencies in such State other than constitutional home rule cities, the State housing credit ceiling for any calendar year shall be reduced by the aggregate housing credit dollar amounts determined for such year for all constitutional home rule cities in such State.\nFor purposes of this paragraph, the term “constitutional home rule city” has the meaning given such term by section 146(d)(3)(C).\nRules similar to the rules of section 146(e) (other than paragraph (2)(B) thereof) shall apply for purposes of this paragraph.\nFor purposes of this paragraph, population shall be determined in accordance with section 146(j).\nIn the case of calendar years 2018, 2019, 2020, and 2021, each of the dollar amounts in effect under clauses (I) and (II) of subparagraph (C)(ii) for any calendar year (after any increase under subparagraph (H)) shall be increased by multiplying such dollar amount by 1.125.\nFor purposes of subparagraph (A), if 50 percent or more of the aggregate basis of any building and the land on which the building is located is financed by any obligation described in subparagraph (A), paragraph (1) shall not apply to any portion of the credit allowable under subsection (a) with respect to such building.\nNot more than 90 percent of the State housing credit ceiling for any State for any calendar year shall be allocated to projects other than qualified low-income housing projects described in subparagraph (B).\nFor purposes of subparagraph (A), a qualified low-income housing project is described in this subparagraph if a qualified nonprofit organization is to own an interest in the project (directly or through a partnership) and materially participate (within the meaning of section 469(h)) in the development and operation of the project throughout the compliance period.\nFor purposes of this paragraph, a qualified nonprofit organization shall be treated as satisfying the ownership and material participation test of subparagraph (B) if any qualified corporation in which such organization holds stock satisfies such test.\nFor purposes of clause (i), the term “qualified corporation” means any corporation if 100 percent of the stock of such corporation is held by 1 or more qualified nonprofit organizations at all times during the period such corporation is in existence.\nNothing in subparagraph (F) of paragraph (3) shall be construed to permit a State not to comply with subparagraph (A) of this paragraph.\nNo credit shall be allowed by reason of this section with respect to any building for the taxable year unless an extended low-income housing commitment is in effect as of the end of such taxable year.\nThe housing credit dollar amount allocated to any building may not exceed the amount necessary to support the applicable fraction specified in the extended low-income housing commitment for such building, including any increase in such fraction pursuant to the application of subsection (f)(3) if such increase is reflected in an amended low-income housing commitment.\nIf paragraph (4) applies to any building the amount of credit allowed in any taxable year may not exceed the amount necessary to support the applicable fraction specified in the extended low-income housing commitment for such building. Such commitment may be amended to increase such fraction.\nUnder regulations prescribed by the Secretary, if the C-CPI-U for any calendar year (as defined in section 1(f)(6)) exceeds the C-CPI-U for the preceding calendar year by more than 5 percent, the C-CPI-U for the base calendar year shall be increased such that such excess shall never be taken into account under clause (i). In the case of a base calendar year before 2017, the C-CPI-U for such year shall be determined by multiplying the CPI for such year by the amount determined under section 1(f)(3)(B).\nFor purposes of this subparagraph, the term “base calendar year” means the calendar year with or within which the 1st taxable year of the credit period ends.\nFor purposes of this paragraph, the low-income portion of a building is the portion of such building equal to the applicable fraction specified in the extended low-income housing commitment for the building.\nThe period referred to in this subparagraph is the 1-year period beginning on the date (after the 14th year of the compliance period) the taxpayer submits a written request to the housing credit agency to find a person to acquire the taxpayer’s interest in the low-income portion of the building.\nIf, during a taxable year, there is a determination that an extended low-income housing agreement was not in effect as of the beginning of such year, such determination shall not apply to any period before such year and subparagraph (A) shall be applied without regard to such determination if the failure is corrected within 1 year from the date of the determination.\nThe application of this paragraph to projects which consist of more than 1 building shall be made under regulations prescribed by the Secretary.\nA housing credit agency may allocate its aggregate housing credit dollar amount only to buildings located in the jurisdiction of the governmental unit of which such agency is a part.\nIf the aggregate housing credit dollar amounts allocated by a housing credit agency for any calendar year exceed the portion of the State housing credit ceiling allocated to such agency for such calendar year, the housing credit dollar amounts so allocated shall be reduced (to the extent of such excess) for buildings in the reverse of the order in which the allocations of such amounts were made.\nThe amount of the credit determined under this section with respect to any building shall not exceed the clause (ii) percentage of the amount of the credit which would (but for this subparagraph) be determined under this section with respect to such building.\nIn allocating a housing credit dollar amount to any building, the housing credit agency shall specify the applicable percentage and the maximum qualified basis which may be taken into account under this section with respect to such building. The applicable percentage and maximum qualified basis so specified shall not exceed the applicable percentage and qualified basis determined under this section without regard to this subsection.\nThe term “housing credit agency” means any agency authorized to carry out this subsection.\nThe term “State” includes a possession of the United States.\nThe term “compliance period” means, with respect to any building, the period of 15 taxable years beginning with the 1st taxable year of the credit period with respect thereto.\nExcept as otherwise provided in this paragraph, for purposes of subsection (b)(1), a new building shall be treated as federally subsidized for any taxable year if, at any time during such taxable year or any prior taxable year, there is or was outstanding any obligation the interest on which is exempt from tax under section 103 the proceeds of which\u202f 1 1 \u202fSo in original. See 2008 Amendment note below.  are or were used (directly or indirectly) with respect to such building or the operation thereof.\nA tax-exempt obligation shall not be taken into account under subparagraph (A) if the taxpayer elects to exclude from the eligible basis of the building for purposes of subsection (d) the proceeds of such obligation.\nA unit shall not be treated as a low-income unit unless the unit is suitable for occupancy and used other than on a transient basis.\nFor purposes of clause (i), the suitability of a unit for occupancy shall be determined under regulations prescribed by the Secretary taking into account local health, safety, and building codes.\nFor purposes of clause (i), a single-room occupancy unit shall not be treated as used on a transient basis merely because it is rented on a month-by-month basis.\nSubparagraph (C) shall not apply to the acquisition or rehabilitation of a building pursuant to a development plan of action sponsored by a State or local government or a qualified nonprofit organization (as defined in subsection (h)(5)(C)).\nIn the case of a building to which clause (i) applies, the applicable fraction shall not exceed 80 percent of the unit fraction.\nIn the case of a building to which clause (i) applies, any unit which is not rented for 90 days or more shall be treated as occupied by the owner of the building as of the 1st day it is not rented.\nThe term “new building” means a building the original use of which begins with the taxpayer.\nThe term “existing building” means any building which is not a new building.\nIn the case of an estate or trust, the amount of the credit determined under subsection (a) and any increase in tax under subsection (j) shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.\nNo Federal income tax benefit shall fail to be allowable to the taxpayer with respect to any qualified low-income building merely by reason of a right of 1st refusal held by the tenants (in cooperative form or otherwise) or resident management corporation of such building or by a qualified nonprofit organization (as defined in subsection (h)(5)(C)) or government agency to purchase the property after the close of the compliance period for a price which is not less than the minimum purchase price determined under subparagraph (B).\nFor purposes of this section, in the case of any project for residential rental property located in a rural area (as defined in section 520 of the Housing Act of 1949), any income limitation measured by reference to area median gross income shall be measured by reference to the greater of area median gross income or national non-metropolitan median income. The preceding sentence shall not apply with respect to any building if paragraph (1) of section 42(h) does not apply by reason of paragraph (4) thereof to any portion of the credit determined under this section with respect to such building.\nFor purposes of this section, the amounts described in clauses (i) through (iv) of subsection (h)(3)(C) with respect to any State for 2009 shall each be reduced by so much of such amount as is taken into account in determining the amount of any grant to such State under section 1602 of the American Recovery and Reinvestment Tax Act of 2009.\nBasis of a qualified low-income building shall not be reduced by the amount of any grant described in subparagraph (A).\nThe tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.\nQualified basis shall be taken into account under paragraph (1)(B) only to the extent such basis was taken into account in determining the credit under subsection (a) for the preceding taxable year referred to in such paragraph.\nParagraph (1) shall apply to a decrease in qualified basis only to the extent such decrease exceeds the amount of qualified basis with respect to which a credit was allowable for the taxable year referred to in paragraph (1)(B) by reason of subsection (f)(3).\nAny increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter.\nThe increase in tax under this subsection shall not apply to a reduction in qualified basis by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.\nThis paragraph shall apply to any partnership which has 35 or more partners unless the partnership elects not to have this paragraph apply.\nFor purposes of subparagraph (B)(i), a husband and wife (and their estates) shall be treated as 1 partner.\nAny election under subparagraph (B), once made, shall be irrevocable.\nThe increase in tax under this subsection shall not apply solely by reason of the disposition of a building (or an interest therein) if it is reasonably expected that such building will continue to be operated as a qualified low-income building for the remaining compliance period with respect to such building.\nExcept as otherwise provided in this subsection, rules similar to the rules of section 49(a)(1) (other than subparagraphs (D)(ii)(II) and (D)(iv)(I) thereof), section 49(a)(2), and section 49(b)(1) shall apply in determining the qualified basis of any building in the same manner as such sections apply in determining the credit base of property.\nThe requirements of this subparagraph are met with respect to any financing for any taxable year in the compliance period if, as of the close of such taxable year, not more than 60 percent of the eligible basis of the qualified low-income building is attributable to such financing (reduced by the principal and interest of any governmental financing which is part of a wrap-around mortgage involving such financing).\nIf the rate of interest on any financing described in paragraph (2)(A) is less than the rate which is 1 percentage point below the applicable Federal rate as of the time such financing is incurred, then the qualified basis (to which such financing relates) of the qualified low-income building shall be the present value of the amount of such financing, using as the discount rate such applicable Federal rate. For purposes of the preceding sentence, the rate of interest on any financing shall be determined by treating interest to the extent of government subsidies as not payable.\nFor purposes of subparagraph (A), the term “applicable portion” means the aggregate decrease in the credits allowed to a taxpayer under section 38 for all prior taxable years which would have resulted if the eligible basis of the building were reduced by the amount of financing which does not meet requirements of paragraph (2)(D).\nRules similar to the rules of subparagraphs (A) and (D) of subsection (j)(4) shall apply for purposes of this subsection.\nSubsection (h)(4) shall not apply to any project unless the project satisfies the requirements for allocation of a housing credit dollar amount under the qualified allocation plan applicable to the area in which the project is located.\nThe housing credit dollar amount allocated to a project shall not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the credit period.\nPrior to each determination under clause (i), the taxpayer shall certify to the housing credit agency the full extent of all Federal, State, and local subsidies which apply (or which the taxpayer expects to apply) with respect to the building.\nSubsection (h)(4) shall not apply to any project unless the governmental unit which issued the bonds (or on behalf of which the bonds were issued) makes a determination under rules similar to the rules of subparagraphs (A) and (B).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of this paragraph, referred to in subsec. (b)(2)(A), is the date of enactment of  Pub. L. 110–289 , which was approved  July 30, 2008 .\nSection 201(a) of the Tax Reform Act of 1986, referred to in subsec. (c)(2)(B), is  section 201(a) of Pub. L. 99–514 , which amended  section 168 of this title  generally.\nSection 3 of the Federal Deposit Insurance Act, referred to in subsec. (d)(6)(B), is classified to  section 1813 of Title 12 , Banks and Banking.\nSection 8 of the United States Housing Act of 1937, referred to in subsecs. (d)(6)(C)(i), (g)(2)(B), and (h)(6)(B)(iv), is classified to  section 1437f of Title 42 , The Public Health and Welfare. Section 8(e)(2) of the Act was repealed by  Pub. L. 101–625, title II, §\u202f289(b)(1) ,  Nov. 28, 1990 ,  104 Stat. 4128 , effective  Oct. 1, 1991 , but to remain in effect with respect to single room occupancy dwellings as authorized by subchapter IV (§\u202f11361 et seq.) of chapter 119 of Title 42. See  section 12839(b) of Title 42 .\nSections 221(d)(3), (4) and 236 of the National Housing Act, referred to in subsec. (d)(6)(C)(i), are classified to sections 1715 l (d)(3), (4) and 1715z–1, respectively, of Title 12, Banks and Banking.\nSections 515, 502(c), and 520 of the Housing Act of 1949, referred to in subsecs. (d)(6)(C)(i), (g)(2)(B)(iv), and (i)(8), are classified to sections 1485, 1472(c), and 1490, respectively, of Title 42, The Public Health and Welfare.\nThe date of the enactment of this subparagraph, referred to in subsec. (g)(2)(E), is the date of enactment of  Pub. L. 100–647 , which was approved  Nov. 10, 1988 .\nThe date of the enactment of this clause, referred to in subsec. (i)(3)(B)(iii)(I), is date of enactment of  Pub. L. 101–239 , which was approved  Dec. 19, 1989 .\nThe Social Security Act, referred to in subsec. (i)(3)(D)(i)(I), (II), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title IV of the Act is classified generally to subchapter IV (§\u202f601 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Parts B and E of title IV of the Act are classified generally to parts B (§\u202f620 et seq.) and E (§\u202f670 et seq.), respectively, of subchapter IV of chapter 7 of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe Job Training Partnership Act, referred to in subsec. (i)(3)(D)(i)(III), is  Pub. L. 97–300 ,  Oct. 13, 1982 ,  96 Stat. 1322 , which was classified generally to chapter 19 (§\u202f1501 et seq.) of Title 29, Labor, and was repealed by  Pub. L. 105–220, title I, §\u202f199(b)(2) , (c)(2)(B),  Aug. 7, 1998 ,  112 Stat. 1059 , effective  July 1, 2000 . Pursuant to former  section 2940(b) of Title 29 , references to a provision of the Job Training Partnership Act, effective  Aug. 7, 1998 , were deemed to refer to that provision or the corresponding provision of the Workforce Investment Act of 1998,  Pub. L. 105–220 ,  Aug. 7, 1998 ,  112 Stat. 936 , and, effective  July 1, 2000 , were deemed to refer to the corresponding provision of the Workforce Investment Act of 1998. The Workforce Investment Act of 1998 was repealed by  Pub. L. 113–128, title V, §\u202f511(a) ,  July 22, 2014 ,  128 Stat. 1705 , effective  July 1, 2015 . Pursuant to  section 3361(a) of Title 29 , references to a provision of the Workforce Investment Act of 1998 are deemed to refer to the corresponding provision of the Workforce Innovation and Opportunity Act,  Pub. L. 113–128 ,  July 22, 2014 ,  128 Stat. 1425 , effective  July 1, 2015 . For complete classification of the Job Training Partnership Act and the Workforce Investment Act of 1998 to the Code, see Tables. For complete classification of the Workforce Innovation and Opportunity Act to the Code, see Short Title note set out under  section 3101 of Title 29  and Tables.\nSection 1602 of the American Recovery and Reinvestment Tax Act of 2009, referred to in subsec. (i)(9)(A), is  section 1602 of Pub. L. 111–5 , which is set out as a note below.\nA prior section 42, added  Pub. L. 94–12, title II, §\u202f203(a) ,  Mar. 29, 1975 ,  89 Stat. 29 ; amended  Pub. L. 94–164, §\u202f3(a)(1) ,  Dec. 23, 1975 ,  89 Stat. 972 ;  Pub. L. 94–455, title IV, §\u202f401(a)(2)(A) , (B), title V, §\u202f503(b)(4), title XIX, §\u202f1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1555 , 1562, 1834;  Pub. L. 95–30, title I, §\u202f101(c) ,  May 23, 1977 ,  91 Stat. 132 , which related to general tax credit allowed to individuals in an amount equal to the greater of (1) 2% of taxable income not exceeding $9,000 or (2) $35 multiplied by each exemption the taxpayer was entitled to, expired  Dec. 31, 1978 , pursuant to the terms of: (1)  Pub. L. 94–12, §\u202f209(a)  as amended by  Pub. L. 94–164, §\u202f2(e) , set out as an Effective and Termination Dates of 1975 Amendment note under  section 56 of this title ; (2)  Pub. L. 94–164, §\u202f3(b) , as amended by  Pub. L. 94–455, §\u202f401(a)(1)  and  Pub. L. 95–30, §\u202f103(a) ; and (3)  Pub. L. 94–455, §\u202f401(e) , as amended by  Pub. L. 95–30, §\u202f103(c)  and  Pub. L. 95–600, title I, §\u202f103(b) ,  Nov. 6, 1978 ,  92 Stat. 2771 , set out as an Effective and Termination Dates of 1976 Amendment note under  section 32 of this title .\nAnother prior section 42 was renumbered  section 37 of this title .\n2020—Subsec. (b)(3), (4).  Pub. L. 116–260  added par. (3) and redesignated former par. (3) as (4).\n2018—Subsec. (d)(4)(C)(i).  Pub. L. 115–141, §\u202f401(a)(11)(A) , substituted “as defined in paragraph (5)(B)(ii)” for “as defined in paragraph (5)(C)”.\nSubsec. (e)(2)(B).  Pub. L. 115–141, §\u202f401(a)(10) , substituted “etc.,” for “etc,” in heading.\nSubsec. (f)(5)(B)(ii)(I).  Pub. L. 115–141, §\u202f401(a)(11)(B) , substituted “(d)(6)(B)” for “(d)(6)(C)”.\nSubsec. (g)(1).  Pub. L. 115–141, §\u202f103(a)(1) , substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)” in introductory provisions.\nSubsec. (g)(1)(C).  Pub. L. 115–141, §\u202f103(a)(2) , added subpar. (C).\nSubsec. (g)(2)(D)(i).  Pub. L. 115–141, §\u202f103(b)(1) , substituted “clauses (ii), (iii), and (iv)” for “clause (ii)”.\nSubsec. (g)(2)(D)(ii).  Pub. L. 115–141, §\u202f103(b)(2) , in heading, substituted “Rental of next available unit in case of 20–50 or 40–60 test” for “Next available unit must be rented to low-income tenant if income rises above 140 percent of income limit”, and, in text, substituted “In the case of a project with respect to which the taxpayer elects the requirements of subparagraph (A) or (B) of paragraph (1), if” for “If” and struck out at end “In the case of a project described in section 142(d)(4)(B), the preceding sentence shall be applied by substituting ‘170 percent’ for ‘140 percent’ and by substituting ‘any low-income unit in the building is occupied by a new resident whose income exceeds 40 percent of area median gross income’ for ‘any residential unit in the building (of a size comparable to, or smaller than, such unit) is occupied by a new resident whose income exceeds such income limitation’.”\nSubsec. (g)(2)(D)(iii) to (v).  Pub. L. 115–141, §\u202f103(b)(3) , added cls. (iii) to (v).\nSubsec. (h)(3)(I).  Pub. L. 115–141, §\u202f102(a) , amended subpar. (I) generally. Prior to amendment, subpar. (I) related to the increase in State housing credit ceiling for 2008 and 2009.\nSubsec. (h)(5)(C)(ii).  Pub. L. 115–141, §\u202f401(a)(12) , substituted “,\u2000and” for “;\u2000and”.\nSubsec. (i)(3)(D)(ii)(I).  Pub. L. 115–141, §\u202f401(a)(13) , struck out period at end.\nSubsec. (k)(2)(B).  Pub. L. 115–141, §\u202f401(a)(11)(C)(i) , substituted “(d)(6)(C)” for “(d)(6)(B)” in introductory provisions.\nSubsec. (k)(2)(B)(ii).  Pub. L. 115–141, §\u202f401(a)(11)(C)(ii) , substituted “building.” for “building..”\nSubsec. (m)(1)(B)(ii)(III).  Pub. L. 115–141, §\u202f401(a)(11)(D) , substituted “as defined in subsection (d)(5)(B)(ii)” for “as defined in subsection (d)(5)(C)”.\n2017—Subsecs. (e)(3)(D)(ii), (h)(3)(H)(i)(II).  Pub. L. 115–97, §\u202f11002(d)(1)(G) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (h)(6)(G)(i)(II).  Pub. L. 115–97, §\u202f11002(d)(3)(A) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii) thereof” for “for ‘calendar year 1987’\u202f”.\nSubsec. (h)(6)(G)(ii).  Pub. L. 115–97, §\u202f11002(d)(3)(B) , substituted “if the C-CPI-U for any calendar year (as defined in section 1(f)(6)) exceeds the C-CPI-U for the preceding calendar year by more than 5 percent, the C-CPI-U for the base calendar year shall be increased such that such excess shall never be taken into account under clause (i). In the case of a base calendar year before 2017, the C-CPI-U for such year shall be determined by multiplying the CPI for such year by the amount determined under section 1(f)(3)(B).” for “if the CPI for any calendar year (as defined in section 1(f)(4)) exceeds the CPI for the preceding calendar year by more than 5 percent, the CPI for the base calendar year shall be increased such that such excess shall never be taken into account under clause (i).”\n2015—Subsec. (b)(2).  Pub. L. 114–113, §\u202f131(b) , substituted “Minimum” for “Temporary minimum” in heading.\nSubsec. (b)(2)(A).  Pub. L. 114–113, §\u202f131(a) , struck out “with respect to housing credit dollar amount allocations made before  January 1, 2015 ” after “paragraph”.\n2014—Subsec. (b)(1).  Pub. L. 113–295, §\u202f212(a) , substituted “For purposes of this section—” for “For purposes of this section, the term”, inserted subpar. (A) designation and heading, and inserted “The term” at beginning of subpar. (A).\nSubsec. (b)(2)(A).  Pub. L. 113–295, §\u202f112(a) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (h)(3)(C)(ii)(I).  Pub. L. 113–295, §\u202f221(a)(7) , struck out “($1.50 for 2001)” after “$1.75”.\n2013—Subsec. (b)(2)(A).  Pub. L. 112–240  substituted “with respect to housing credit dollar amount allocations made before  January 1, 2014 ” for “and before  December 31, 2013 ”.\n2009—Subsec. (i).  Pub. L. 111–5  added par. (9).\n2008—Subsec. (b).  Pub. L. 110–289, §\u202f3002(a) , redesignated par. (2) as (1), in heading, substituted “Determination of applicable percentage” for “Buildings placed in service after 1987”, in text, substituted “For purposes of this section, the term ‘applicable percentage’ means, with respect to any building, the appropriate percentage” for “(A)  In general .—In the case of any qualified low-income building placed in service by the taxpayer after 1987, the term ‘applicable percentage’ means the appropriate percentage”, “a new building which is not federally subsidized for the taxable year” for “a building described in paragraph (1)(A)”, and “a building not described in clause (i)” for “a building described in paragraph (1)(B)”, added par. (2), and struck out “For purposes of this section—” after subsec. heading and former par. (1) which related to buildings placed in service during 1987.\nSubsec. (c)(2).  Pub. L. 110–289, §\u202f3004(a) , struck out concluding provisions which read as follows: “Such term does not include any building with respect to which moderate rehabilitation assistance is provided, at any time during the compliance period, under section 8(e)(2) of the United States Housing Act of 1937 (other than assistance under the McKinney-Vento Homeless Assistance Act (as in effect on the date of the enactment of this sentence)).”\nSubsec. (d)(2)(B)(ii).  Pub. L. 110–289, §\u202f3003(g)(1) , substituted “the date the building was last placed in service,” for “the later of—\n“(I) the date the building was last placed in service, or\n“(II) the date of the most recent nonqualified substantial improvement of the building,”.\nSubsec. (d)(2)(D).  Pub. L. 110–289, §\u202f3003(e) , (g)(2), redesignated cls. (ii) and (iii)(II) as (i) and (ii), respectively, in cl. (ii) struck out at end “For purposes of the preceding sentence, in applying section 267(b) or 707(b)(1), ‘10 percent’ shall be substituted for ‘50 percent’.”, and struck out former cls. (i) and (iii)(I) which related to the term “nonqualified substantial improvement” and application of section 179 for purposes of subpar. (B)(i).\nSubsec. (d)(4)(C)(ii).  Pub. L. 110–289, §\u202f3003(c) , substituted “shall not exceed the sum of—” for “shall not exceed 10 percent of the eligible basis of the qualified low-income housing project of which it is a part.” and added subcls. (I) and (II).\nSubsec. (d)(5)(A).  Pub. L. 110–289, §\u202f3003(d) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “If, during any taxable year of the compliance period, a grant is made with respect to any building or the operation thereof and any portion of such grant is funded with Federal funds (whether or not includible in gross income), the eligible basis of such building for such taxable year and all succeeding taxable years shall be reduced by the portion of such grant which is so funded.”\nSubsec. (d)(5)(B), (C).  Pub. L. 110–289, §\u202f3003(g)(3) , redesignated subpar. (C) as (B) and struck out heading and text of former subpar. (B). Text read as follows: “The eligible basis of any building shall not include any portion of its adjusted basis which is attributable to amounts with respect to which an election is made under section 167(k) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).”\nSubsec. (d)(5)(C)(v).  Pub. L. 110–289, §\u202f3003(a) , added cl. (v).\nSubsec. (d)(6).  Pub. L. 110–289, §\u202f3003(f) , amended par. (6) generally. Prior to amendment, par. (6) consisted of subpars. (A) to (E) relating to general rule for waiver of par. (2)(B)(ii) with respect to any federally-assisted building, definition of “federally-assisted building”, waiver for buildings with low-income occupancy, waiver for buildings acquired from insured depository institutions in default, and definition of “appropriate Federal official”.\nSubsec. (e)(3)(A)(ii)(I).  Pub. L. 110–289, §\u202f3003(b)(1)(A) , substituted “20 percent” for “10 percent”.\nSubsec. (e)(3)(A)(ii)(II).  Pub. L. 110–289, §\u202f3003(b)(1)(B) , substituted “$6,000” for “$3,000”.\nSubsec. (e)(3)(D).  Pub. L. 110–289, §\u202f3003(b)(2) , added subpar. (D).\nSubsec. (f)(5)(B)(ii)(II).  Pub. L. 110–289, §\u202f3003(b)(3) , substituted “if the dollar amount in effect under subsection (e)(3)(A)(ii)(II) were two-thirds of such amount.” for “if subsection (e)(3)(A)(ii)(II) were applied by substituting ‘$2,000’ for ‘$3,000’.”\nSubsec. (g)(9).  Pub. L. 110–289, §\u202f3004(g) , added par. (9).\nSubsec. (h)(1)(E)(ii).  Pub. L. 110–289, §\u202f3004(b) , substituted “(as of the date which is 1 year after the date that the allocation was made)” for “(as of the later of the date which is 6 months after the date that the allocation was made or the close of the calendar year in which the allocation is made)”.\nSubsec. (h)(3)(I).  Pub. L. 110–289, §\u202f3001 , added subpar. (I).\nSubsec. (h)(4)(A)(ii).  Pub. L. 110–289, §\u202f3007(b) , inserted “or such financing is refunded as described in section 146(i)(6)” before period at end.\nSubsec. (i)(2)(A).  Pub. L. 110–289, §\u202f3002(b)(1) , struck out “,\u2000or any below market Federal loan,” before “the proceeds of which”.\nSubsec. (i)(2)(B).  Pub. L. 110–289, §\u202f3002(b)(2)(A) , in heading, struck out “balance of loan or” before “proceeds” and in text, struck out “loan or” before “tax-exempt obligation” and substituted “for purposes of subsection (d) the proceeds of such obligation.” for “for purposes of subsection (d)—\n“(i) in the case of a loan, the principal amount of such loan, and\n“(ii) in the case of a tax-exempt obligation, the proceeds of such obligation.”\nSubsec. (i)(2)(C).  Pub. L. 110–289, §\u202f3002(b)(2)(B)(i) , struck out “or below market Federal loan” after “tax-exempt obligation” in introductory provisions.\nSubsec. (i)(2)(C)(i).  Pub. L. 110–289, §\u202f3002(b)(2)(B)(ii) , substituted “(when issued)” for “or loan (when issued or made)” and “the proceeds of such obligation” for “the proceeds of such obligation or loan”.\nSubsec. (i)(2)(C)(ii).  Pub. L. 110–289, §\u202f3002(b)(2)(B)(iii) , struck out “,\u2000and such loan is repaid,” after “redeemed”.\nSubsec. (i)(2)(D), (E).  Pub. L. 110–289, §\u202f3002(b)(2)(C) , struck out subpars. (D) and (E) which related to below market Federal loan and buildings receiving HOME assistance or Native American housing assistance, respectively.\nSubsec. (i)(3)(D)(i)(II), (III).  Pub. L. 110–289, §\u202f3004(e) , added subcl. (II) and redesignated former subcl. (II) as (III).\nSubsec. (i)(8).  Pub. L. 110–289, §\u202f3004(f) , added par. (8).\nSubsec. (j)(6).  Pub. L. 110–289, §\u202f3004(c) , amended par. (6) generally. Prior to amendment, text read as follows: “In the case of a disposition of a building or an interest therein, the taxpayer shall be discharged from liability for any additional tax under this subsection by reason of such disposition if—\n“(A) the taxpayer furnishes to the Secretary a bond in an amount satifactory to the Secretary and for the period required by the Secretary, and\n“(B) it is reasonably expected that such building will continue to be operated as a qualified low-income building for the remaining compliance period with respect to such building.”\nSubsec. (m)(1)(C)(ix), (x).  Pub. L. 110–289, §\u202f3004(d) , added cls. (ix) and (x).\n2007—Subsec. (i)(3)(D)(ii)(I).  Pub. L. 110–142  amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “single parents and their children and such parents and children are not dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of another individual, or”.\n2004—Subsec. (d)(2)(D)(iii)(I).  Pub. L. 108–311, §\u202f408(a)(3) , substituted “section 179(d)(7)” for “section 179(b)(7)”.\nSubsec. (i)(3)(D)(ii)(I).  Pub. L. 108–311, §\u202f207(8) , inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\n2002—Subsec. (h)(3)(C).  Pub. L. 107–147, §\u202f417(2) , substituted “the amounts described in clauses (ii) through (iv) over the aggregate housing credit dollar amount allocated for such year” for “the amounts described in clauses (ii) and (iii) over the aggregate housing credit dollar amount allocated for such year” in concluding provisions.\nSubsec. (m)(1)(B)(ii)(II), (III).  Pub. L. 107–147, §\u202f417(3) , struck out second “and” at end of subcl. (II) and inserted “and” at end of subcl. (III).\n2000—Subsec. (c)(2).  Pub. L. 106–400  substituted “McKinney-Vento Homeless Assistance Act” for “Stewart B. McKinney Homeless Assistance Act” in concluding provisions.\nSubsec. (d)(4)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f134(a)(1)] , substituted “subparagraphs (B) and (C)” for “subparagraph (B)”.\nSubsec. (d)(4)(C), (D).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f134(a)(2), (3)] , added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (d)(5)(C)(ii)(I).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f135(b)] , in first sentence, inserted “either” before “in which 50 percent” and “or which has a poverty rate of at least 25 percent” before period at end.\nSubsec. (h)(1)(E)(ii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f135(a)(1)] , in first sentence, substituted “(as of the later of the date which is 6 months after the date that the allocation was made or the close of the calendar year in which the allocation” for “(as of the close of the calendar year in which the allocation”.\nSubsec. (h)(3)(C).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f136(b)] , which directed the substitution of “clauses (i) through (iv)” for “clauses (i) and (iii)” in the first sentence of concluding provisions, could not be executed because the words “clauses (i) and (iii)” did not appear subsequent to the amendment by  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f131(c)(1)(B)] . See below.\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f135(a)(2)] , in last sentence of concluding provisions, substituted “project which fails to meet the 10 percent test under paragraph (1)(E)(ii) on a date after the close of the calendar year in which the allocation was made or which” for “project which”.\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f131(c)(1)] , in first sentence of concluding provisions, substituted “clause (i)” for “clause (ii)” and “clauses (ii)” for “clauses (i)”.\nSubsec. (h)(3)(C)(i), (ii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f131(a)] , amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) read as follows:\n“(i) $1.25 multiplied by the State population,\n“(ii) the unused State housing credit ceiling (if any) of such State for the preceding calendar year,”.\nSubsec. (h)(3)(D)(ii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f136(a)] , substituted “the excess (if any) of—” for “the excess (if any) of the unused State housing credit ceiling for such year (as defined in subparagraph (C)(i)) over the excess (if any) of—” in introductory provisions, added subcls. (I) and (II), and struck out former subcls. (I) and (II) which read as follows:\n“(I) the aggregate housing credit dollar amount allocated for such year, over\n“(II) the sum of the amounts described in clauses (ii) and (iii) of subparagraph (C).”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f131(c)(2)] , substituted “subparagraph (C)(i)” for “subparagraph (C)(ii)” in introductory provisions and “clauses (ii)” for “clauses (i)” in subcl. (II).\nSubsec. (h)(3)(H).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f131(b)] , added subpar. (H).\nSubsec. (i)(2)(E).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f134(b)(2)] , inserted “or Native American housing assistance” after “HOME assistance” in heading.\nSubsec. (i)(2)(E)(i).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f134(b)(1)] , inserted “or the Native American Housing Assistance and Self-Determination Act of 1996 ( 25 U.S.C. 4101  et seq.) (as in effect on  October 1, 1997 )” after “this subparagraph)”.\nSubsec. (i)(3)(B)(iii)(I).  Pub. L. 106–400  substituted “McKinney-Vento Homeless Assistance Act” for “Stewart B. McKinney Homeless Assistance Act”.\nSubsec. (m)(1)(A)(iii), (iv).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f133(a)] , added cls. (iii) and (iv).\nSubsec. (m)(1)(B)(ii)(III).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f132(b)] , added subcl. (III).\nSubsec. (m)(1)(B)(iii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f133(b)] , inserted “and in monitoring for noncompliance with habitability standards through regular site visits” before period at end.\nSubsec. (m)(1)(C)(iii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f132(a)(1)] , inserted “,\u2000including whether the project includes the use of existing housing as part of a community revitalization plan” before comma at end.\nSubsec. (m)(1)(C)(v) to (viii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f132(a)(2)] , added cls. (v) to (viii) and struck out former cls. (v) to (vii) which read as follows:\n“(v) participation of local tax-exempt organizations,\n“(vi) tenant populations with special housing needs, and\n“(vii) public housing waiting lists.”\n1998—Subsec. (j)(4)(D).  Pub. L. 105–206  substituted “this chapter” for “subpart A, B, D, or G of this part”.\n1996—Subsec. (c)(2).  Pub. L. 104–188, §\u202f1704(t)(64) , struck out “of 1988” after “Homeless Assistance Act”.\nSubsec. (d)(5)(B).  Pub. L. 104–188, §\u202f1704(t)(53) , provided that  section 11812(b)(3) of Pub. L. 101–508  shall be applied by not executing the amendment therein to the heading of subsec. (d)(5)(B) of this section. See 1990 Amendment note below.\n1993—Subsec. (g)(8).  Pub. L. 103–66, §\u202f13142(b)(3) , added par. (8).\nSubsec. (h)(6)(B)(iv) to (vi).  Pub. L. 103–66, §\u202f13142(b)(4) , added cl. (iv) and redesignated former cls. (iv) and (v) as (v) and (vi), respectively.\nSubsec. (i)(2)(E).  Pub. L. 103–66, §\u202f13142(b)(5) , added subpar. (E).\nSubsec. (i)(3)(D).  Pub. L. 103–66, §\u202f13142(b)(2) , amended heading and text of subpar. (D) generally. Prior to amendment, text read as follows: “A unit shall not fail to be treated as a low-income unit merely because it is occupied by an individual who is—\n“(i) a student and receiving assistance under title IV of the Social Security Act, or\n“(ii) enrolled in a job training program receiving assistance under the Job Training Partnership Act or under other similar Federal, State, or local laws.”\nSubsec. (m)(2)(B)(iv).  Pub. L. 103–66, §\u202f13142(b)(1) , added cl. (iv).\nSubsec. ( o ).  Pub. L. 103–66, §\u202f13142(a)(1) , struck out subsec. ( o ) which provided that subsec. (h)(3)(C)(i) would not apply to any amount allocated after  June 30, 1992 , and that subsec. (h)(4) would not apply to any building placed in service after  June 30, 1992 , with an exception for bond-financed buildings in progress.\n1991—Subsec. ( o )(1).  Pub. L. 102–227, §\u202f107(a)(1) , struck out “,\u2000for any calendar year after 1991” after “paragraph (2)” in introductory provisions, inserted “to any amount allocated after  June 30, 1992 ” before comma at end of subpar. (A), and substituted “ June 30, 1992 ” for “1991” in subpar. (B).\nSubsec. ( o )(2).  Pub. L. 102–227, §\u202f107(a)(2) , substituted “ July 1, 1992 ” for “1992” in introductory provisions and subpar. (A), “ June 30, 1992 ” for “ December 31, 1991 ” and “ June 30, 1994 ” for “ December 31, 1993 ” in subpar. (B), and “ July 1, 1994 ” for “ January 1, 1994 ” in subpar. (C).\n1990—Subsec. (b)(1).  Pub. L. 101–508, §\u202f11701(a)(1)(B) , struck out at end “A building shall not be treated as described in subparagraph (B) if, at any time during the credit period, moderate rehabilitation assistance is provided with respect to such building under section 8(e)(2) of the United States Housing Act of 1937.”\nSubsec. (c)(2).  Pub. L. 101–508, §\u202f11701(a)(1)(A) , inserted at end “Such term does not include any building with respect to which moderate rehabilitation assistance is provided, at any time during the compliance period, under section 8(e)(2) of the United States Housing Act of 1937.”\nPub. L. 101–508, §\u202f11407(b)(5)(A) , inserted before period at end of last sentence “(other than assistance under the Stewart B. McKinney Homeless Assistance Act of 1988 (as in effect on the date of the enactment of this sentence))”.\nSubsec. (d)(2)(D)(i)(I).  Pub. L. 101–508, §\u202f11812(b)(3) , inserted “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “section 167(k).”\nSubsec. (d)(2)(D)(ii)(V).  Pub. L. 101–508, §\u202f11407(b)(8) , added subcl. (V).\nSubsec. (d)(5)(B).  Pub. L. 101–508, §\u202f11812(b)(3) , which directed the insertion of “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “section 167(k)”, was executed to the text, and not the heading, of subpar. (B). See 1996 Amendment note above.\nSubsec. (d)(5)(C)(ii)(I).  Pub. L. 101–508, §\u202f11407(b)(4) , inserted at end “If the Secretary of Housing and Urban Development determines that sufficient data for any period are not available to apply this clause on the basis of census tracts, such Secretary shall apply this clause for such period on the basis of enumeration districts.”\nPub. L. 101–508, §\u202f11701(a)(2)(B) , inserted before period at end “for such year”.\nPub. L. 101–508, §\u202f11701(a)(2)(A) , which directed the insertion of “which is designated by the Secretary of Housing and Urban Development and, for the most recent year for which census data are available on household income in such tract,” after “census tract”, was executed by making the insertion after “any census tract” to reflect the probable intent of Congress.\nSubsec. (g)(2)(B)(iv).  Pub. L. 101–508, §\u202f11407(b)(3) , added cl. (iv).\nSubsec. (g)(2)(D)(i).  Pub. L. 101–508, §\u202f11701(a)(3)(A) , inserted before period at end “and such unit continues to be rent-restricted”.\nSubsec. (g)(2)(D)(ii).  Pub. L. 101–508, §\u202f11701(a)(4) , inserted at end “In the case of a project described in section 142(d)(4)(B), the preceding sentence shall be applied by substituting ‘170 percent’ for ‘140 percent’ and by substituting ‘any low-income unit in the building is occupied by a new resident whose income exceeds 40 percent of area median gross income’ for ‘any residential unit in the building (of a size comparable to, or smaller than, such unit) is occupied by a new resident whose income exceeds such income limitation’.”\nSubsec. (g)(3)(A).  Pub. L. 101–508, §\u202f11701(a)(5)(A) , substituted “the 1st year of the credit period for such building” for “the 12-month period beginning on the date the building is placed in service”.\nSubsec. (h)(3)(C).  Pub. L. 101–508, §\u202f11701(a)(6)(A) , substituted “the sum of the amounts described in clauses (i) and (iii)” for “the amount described in clause (i)” in second sentence.\nSubsec. (h)(3)(D)(ii)(II).  Pub. L. 101–508, §\u202f11701(a)(6)(B) , substituted “the sum of the amounts described in clauses (i) and (iii)” for “the amount described in clause (i)”.\nSubsec. (h)(5)(B).  Pub. L. 101–508, §\u202f11407(b)(9)(A) , inserted “own an interest in the project (directly or through a partnership) and” after “nonprofit organization is to”.\nSubsec. (h)(5)(C)(i) to (iii).  Pub. L. 101–508, §\u202f11407(b)(9)(B) , added cl. (ii) and redesignated former cl. (ii) as (iii).\nSubsec. (h)(5)(D)(i).  Pub. L. 101–508, §\u202f11407(b)(9)(C) , inserted “ownership and” before “material participation”.\nSubsec. (h)(6)(B)(i).  Pub. L. 101–508, §\u202f11701(a)(7)(A) , inserted before comma at end “and which prohibits the actions described in subclauses (I) and (II) of subparagraph (E)(ii)”.\nSubsec. (h)(6)(B)(ii).  Pub. L. 101–508, §\u202f11701(a)(7)(B) , substituted “requirement and prohibitions” for “requirement”.\nSubsec. (h)(6)(B)(iii) to (v).  Pub. L. 101–508, §\u202f11701(a)(8)(A) , added cl. (iii) and redesignated former cls. (iii) and (iv) as (iv) and (v), respectively.\nSubsec. (h)(6)(E)(i)(I).  Pub. L. 101–508, §\u202f11701(a)(9) , inserted before comma “unless the Secretary determines that such acquisition is part of an arrangement with the taxpayer a purpose of which is to terminate such period”.\nSubsec. (h)(6)(E)(ii)(II).  Pub. L. 101–508, §\u202f11701(a)(8)(C) , inserted before period at end “not otherwise permitted under this section”.\nSubsec. (h)(6)(F).  Pub. L. 101–508, §\u202f11701(a)(8)(D) , inserted “the nonlow-income portion of the building for fair market value and” before “the low-income portion” in introductory provisions.\nSubsec. (h)(6)(J) to (L).  Pub. L. 101–508, §\u202f11701(a)(8)(B) , redesignated subpars. (K) and (L) as (J) and (K), respectively, and struck out former subpar. (J) which related to sales of less than the low-income portions of a building.\nSubsec. (i)(3)(D).  Pub. L. 101–508, §\u202f11407(b)(6) , substituted “Certain students” for “Students in government-supported job training programs” in heading and amended text generally. Prior to amendment, text read as follows: “A unit shall not fail to be treated as a low-income unit merely because it is occupied by an individual who is enrolled in a job training program receiving assistance under the Job Training Partnership Act or under other similar Federal, State, or local laws.”\nSubsec. (i)(7).  Pub. L. 101–508, §\u202f11701(a)(10) , redesignated par. (8) as (7).\nSubsec. (i)(7)(A).  Pub. L. 101–508, §\u202f11407(b)(1) , substituted “the tenants (in cooperative form or otherwise) or resident management corporation of such building or by a qualified nonprofit organization (as defined in subsection (h)(5)(C)) or government agency” for “the tenants of such building”.\nSubsec. (i)(8).  Pub. L. 101–508, §\u202f11701(a)(10) , redesignated par. (8) as (7).\nSubsec. (k)(1).  Pub. L. 101–508, §\u202f11813(b)(3)(A) , substituted “49(a)(1)” for “46(c)(8)”, “49(a)(2)” for “46(c)(9)”, and “49(b)(1)” for “47(d)(1)”.\nSubsec. (k)(2)(A)(ii), (D).  Pub. L. 101–508, §\u202f11813(b)(3)(B) , substituted “49(a)(1)(D)(iv)(II)” for “46(c)(8)(D)(iv)(II)”.\nSubsec. (m)(1)(B)(ii) to (iv).  Pub. L. 101–508, §\u202f11407(b)(7)(B) , redesignated cls. (iii) and (iv) as (ii) and (iii), respectively, and struck out former cl. (ii) which read as follows: “which gives the highest priority to those projects as to which the highest percentage of the housing credit dollar amount is to be used for project costs other than the cost of intermediaries unless granting such priority would impede the development of projects in hard-to-develop areas,”.\nPub. L. 101–508, §\u202f11407(b)(2) , amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows: “which provides a procedure that the agency will follow in notifying the Internal Revenue Service of noncompliance with the provisions of this section which such agency becomes aware of.”\nSubsec. (m)(2)(B).  Pub. L. 101–508, §\u202f11407(b)(7)(A) , added cl. (iii) and inserted provision that cl. (iii) not be applied so as to impede the development of projects in hard-to-develop areas.\nSubsec. ( o )(1).  Pub. L. 101–508, §\u202f11407(a)(1)(A) , substituted “1991” for “1990” wherever appearing.\nSubsec. ( o )(2).  Pub. L. 101–508, §\u202f11407(a)(1)(B) , added par. (2) and struck out former par. (2) which read as follows: “For purposes of paragraph (1)(B), a building shall be treated as placed in service before 1990 if—\n“(A) the bonds with respect to such building are issued before 1990,\n“(B) such building is constructed, reconstructed, or rehabilitated by the taxpayer,\n“(C) more than 10 percent of the reasonably anticipated cost of such construction, reconstruction, or rehabilitation has been incurred as of  January 1, 1990 , and some of such cost is incurred on or after such date, and\n“(D) such building is placed in service before  January 1, 1992 .”\n1989—Subsec. (b)(1).  Pub. L. 101–239, §\u202f7108(h)(5) , inserted at end “A building shall not be treated as described in subparagraph (B) if, at any time during the credit period, moderate rehabilitation assistance is provided with respect to such building under section 8(e)(2) of the United States Housing Act of 1937.”\nSubsec. (b)(3)(C).  Pub. L. 101–239, §\u202f7108(c)(2) , which directed amendment of subpar. (C) by substituting “subsection (h)(7)” for “subsection (h)(6))”, was executed by substituting “subsection (h)(7)” for “subsection (h)(6)”, as the probable intent of Congress.\nSubsec. (c)(1)(E).  Pub. L. 101–239, §\u202f7108(i)(2) , added subpar. (E).\nSubsec. (d)(1).  Pub. L. 101–239, §\u202f7108 ( l )(1), inserted “as of the close of the 1st taxable year of the credit period” before period at end.\nSubsec. (d)(2)(A).  Pub. L. 101–239, §\u202f7108 ( l )(2), substituted “subparagraph (B), its adjusted basis as of the close of the 1st taxable year of the credit period, and” for “subparagraph (B), the sum of—\n“(I) the portion of its adjusted basis attributable to its acquisition cost, plus\n“(II) amounts chargeable to capital account and incurred by the taxpayer (before the close of the 1st taxable year of the credit period for such building) for property (or additions or improvements to property) of a character subject to the allowance for depreciation, and”.\nSubsec. (d)(2)(B)(iv).  Pub. L. 101–239, §\u202f7108(d)(1) , added cl. (iv).\nSubsec. (d)(2)(C).  Pub. L. 101–239, §\u202f7108 ( l )(3)(A), substituted “Adjusted basis” for “Acquisition cost” in heading and “adjusted basis” for “cost” in text.\nSubsec. (d)(5).  Pub. L. 101–239, §\u202f7108 ( l )(3)(B), substituted “Special rules for determining eligible basis” for “Eligible basis determined when building placed in service” in heading.\nSubsec. (d)(5)(A).  Pub. L. 101–239, §\u202f7108 ( l )(3)(B), redesignated subpar. (B) as (A) and struck out former subpar. (A) which read as follows: “Except as provided in subparagraphs (B) and (C), the eligible basis of any building for the entire compliance period for such building shall be its eligible basis on the date such building is placed in service (increased, in the case of an existing building which meets the requirements of paragraph (2)(B), by the amounts described in paragraph (2)(A)(i)(II)).”\nSubsec. (d)(5)(B).  Pub. L. 101–239, §\u202f7108 ( l )(3)(B), redesignated subpar. (C) as (B). Former subpar. (B) redesignated (A).\nSubsec. (d)(5)(C).  Pub. L. 101–239, §\u202f7108 ( l )(3)(B), redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).\nPub. L. 101–239, §\u202f7811(a)(1) , inserted “section” before “167(k)” in heading.\nSubsec. (d)(5)(D).  Pub. L. 101–239, §\u202f7108 ( l )(3)(B), redesignated subpar. (D) as (C).\nPub. L. 101–239, §\u202f7108(g) , added subpar. (D).\nSubsec. (d)(6)(A)(i).  Pub. L. 101–239, §\u202f7841(d)(13) , substituted “Farmers Home Administration” for “Farmers’ Home Administration”.\nSubsec. (d)(6)(C) to (E).  Pub. L. 101–239, §\u202f7108(f) , added subpars. (C) and (D) and redesignated former subpar. (C) as (E).\nSubsec. (d)(7)(A).  Pub. L. 101–239, §\u202f7831(c)(6) , inserted “(or interest therein)” after “subparagraph (B)” in introductory provisions.\nSubsec. (d)(7)(A)(ii).  Pub. L. 101–239, §\u202f7841(d)(14) , substituted “under subsection (a)” for “under sebsection (a)”.\nSubsec. (e)(2)(A).  Pub. L. 101–239, §\u202f7841(d)(15) , substituted “to capital account” for “to captial account”.\nSubsec. (e)(3).  Pub. L. 101–239, §\u202f7108(d)(3) , substituted “Minimum expenditures to qualify” for “Average of rehabilitation expenditures must be $2,000 or more” in heading, added subpars. (A) and (B), redesignated former subpar. (B) as (C), and struck out former subpar. (A) which read as follows: “Paragraph (1) shall apply to rehabilitation expenditures with respect to any building only if the qualified basis attributable to such expenditures incurred during any 24-month period, when divided by the low-income units in the building, is $2,000 or more.”\nSubsec. (e)(5).  Pub. L. 101–239, §\u202f7108 ( l )(3)(C), substituted “subsection (d)(2)(A)(i)” for “subsection (d)(2)(A)(i)(II)”.\nSubsec. (f)(4).  Pub. L. 101–239, §\u202f7831(c)(4) , added par. (4).\nSubsec. (f)(5).  Pub. L. 101–239, §\u202f7108(d)(2) , added par. (5).\nSubsec. (g)(2)(A).  Pub. L. 101–239, §\u202f7108(e)(2) , inserted at end “For purposes of the preceding sentence, the amount of the income limitation under paragraph (1) applicable for any period shall not be less than such limitation applicable for the earliest period the building (which contains the unit) was included in the determination of whether the project is a qualified low-income housing project.”\nPub. L. 101–239, §\u202f7108(e)(1)(B) , substituted “the imputed income limitation applicable to such unit” for “the income limitation under paragraph (1) applicable to individuals occupying such unit”.\nSubsec. (g)(2)(B).  Pub. L. 101–239, §\u202f7108(h)(2) , added cl. (iii) and concluding provisions which defined “supportive service”.\nSubsec. (g)(2)(C) to (E).  Pub. L. 101–239, §\u202f7108(e)(1)(A) , added subpars. (C) and (D) and redesignated former subpar. (C) as (E).\nSubsec. (g)(3)(D).  Pub. L. 101–239, §\u202f7108(m)(3) , added subpar. (D).\nSubsec. (g)(4).  Pub. L. 101–239, §\u202f7108(n)(2) , struck out “(other than section 142(d)(4)(B)(iii))” after “in applying such provisions”.\nSubsec. (g)(7).  Pub. L. 101–239, §\u202f7108(h)(3) , added par. (7).\nSubsec. (h)(1)(B).  Pub. L. 101–239, §\u202f7108(m)(2) , substituted “(E), or (F)” for “or (E)”.\nSubsec. (h)(1)(F).  Pub. L. 101–239, §\u202f7108(m)(1) , added subpar. (F).\nSubsec. (h)(3)(C) to (G).  Pub. L. 101–239, §\u202f7108(b)(1) , added subpars. (C) and (D), redesignated former subpars. (D) to (F) as (E) to (G), respectively, and struck out former subpar. (C) which read as follows: “The State housing credit ceiling applicable to any State for any calendar year shall be an amount equal to $1.25 multiplied by the State population.”\nSubsec. (h)(4)(B).  Pub. L. 101–239, §\u202f7108(j) , substituted “50 percent” for “70 percent” in heading and in text.\nSubsec. (h)(5)(D)(ii).  Pub. L. 101–239, §\u202f7811(a)(2) , substituted “clause (i)” for “clause (ii)”.\nSubsec. (h)(5)(E).  Pub. L. 101–239, §\u202f7108(b)(2)(A) , substituted “subparagraph (F)” for “subparagraph (E)”.\nSubsec. (h)(6).  Pub. L. 101–239, §\u202f7108(c)(1) , added par. (6). Former par. (6) redesignated (7).\nSubsec. (h)(6)(B) to (E).  Pub. L. 101–239, §\u202f7108(b)(2)(B) , redesignated subpars. (C) to (E) as (B) to (D), respectively, and struck out former subpar. (B) which provided that the housing credit dollar amount could not be carried over to any other calendar year.\nSubsec. (h)(7), (8).  Pub. L. 101–239, §\u202f7108(c)(1) , redesignated pars. (6) and (7) as (7) and (8), respectively.\nSubsec. (i)(2)(D).  Pub. L. 101–239, §\u202f7108(k) , inserted at end “Such term shall not include any loan which would be a below market Federal loan solely by reason of assistance provided under section 106, 107, or 108 of the Housing and Community Development Act of 1974 (as in effect on the date of the enactment of this sentence).”\nSubsec. (i)(3)(B).  Pub. L. 101–239, §\u202f7108(i)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “A unit shall not be treated as a low-income unit unless the unit is suitable for occupancy (as determined under regulations prescribed by the Secretary taking into account local health, safety, and building codes) and used other than on a transient basis. For purposes of the preceding sentence, a single-room occupancy unit shall not be treated as used on a transient basis merely because it is rented on a month-by-month basis.”\nPub. L. 101–239, §\u202f7831(c)(1) , inserted “(as determined under regulations prescribed by the Secretary taking into account local health, safety, and building codes)” after “suitable for occupancy”.\nPub. L. 101–239, §\u202f7108(h)(1) , inserted at end “For purposes of the preceding sentence, a single-room occupancy unit shall not be treated as used on a transient basis merely because it is rented on a month-by-month basis.”\nSubsec. (i)(3)(D).  Pub. L. 101–239, §\u202f7831(c)(2) , added subpar. (D).\nSubsec. (i)(3)(E).  Pub. L. 101–239, §\u202f7108(h)(4) , added subpar. (E).\nSubsec. (i)(6).  Pub. L. 101–239, §\u202f7831(c)(3) , added par. (6).\nSubsec. (i)(8).  Pub. L. 101–239, §\u202f7108(q) , added par. (8).\nSubsec. (k)(2)(D).  Pub. L. 101–239, §\u202f7108 ( o ), added provision at end relating to the applicability of cl. (ii) to qualified nonprofit organizations not described in section 46(c)(8)(D)(iv)(II) with respect to a building.\nSubsec. ( l )(1).  Pub. L. 101–239, §\u202f7108(p) , in introductory provisions, substituted “Following” for “Not later than the 90th day following” and inserted “at such time and” before “in such form”.\nSubsec. (m).  Pub. L. 101–239, §\u202f7108 ( o ), added subsec. (m). Former subsec. (m) redesignated (n).\nSubsec. (m)(4).  Pub. L. 101–239, §\u202f7831(c)(5) , added par. (4).\nSubsec. (n).  Pub. L. 101–239, §\u202f7108 ( o ), redesignated subsec. (m) as (n). Former subsec. (n) redesignated ( o ).\nPub. L. 101–239, §\u202f7108(a)(1) , amended subsec. (n) generally. Prior to amendment, subsec. (n) read as follows: “The State housing credit ceiling under subsection (h) shall be zero for any calendar year after 1989 and subsection (h)(4) shall not apply to any building placed in service after 1989.”\nSubsec. ( o ).  Pub. L. 101–239, §\u202f7108 ( o ), redesignated subsec. (n) as ( o ).\n1988—Subsec. (b)(2)(A).  Pub. L. 100–647, §\u202f1002 ( l )(1)(A), substituted “for the earlier of—” for “for the month in which such building is placed in service” and added cls. (i) and (ii) and concluding provisions.\nSubsec. (b)(2)(C)(ii).  Pub. L. 100–647, §\u202f1002 ( l )(1)(B), substituted “the month applicable under clause (i) or (ii) of subparagraph (A)” for “the month in which the building was placed in service”.\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1002 ( l )(9)(B), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For treatment of certain rehabilitation expenditures as separate new buildings, see subsection (e).”\nSubsec. (c)(2)(A).  Pub. L. 100–647, §\u202f1002 ( l )(2)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which at all times during the compliance period with respect to such building is part of a qualified low-income housing project, and”.\nSubsec. (d)(2)(D)(ii).  Pub. L. 100–647, §\u202f1002 ( l )(3), substituted “Special rules for certain transfers” for “Special rule for nontaxable exchanges” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of determining under subparagraph (B)(ii) when a building was last placed in service, there shall not be taken into account any placement in service in connection with the acquisition of the building in a transaction in which the basis of the building in the hands of the person acquiring it is determined in whole or in part by reference to the adjusted basis of such building in the hands of the person from whom aquired [sic].”\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f1002 ( l )(4), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The eligible basis of any building shall be reduced by an amount equal to the portion of the adjusted basis of the building which is attributable to residential rental units in the building which are not low-income units and which are above the average quality standard of the low-income units in the building.”\nSubsec. (d)(5)(A).  Pub. L. 100–647, §\u202f1002 ( l )(6)(B), substituted “subparagraphs (B) and (C)” for “subparagraph (B)”.\nPub. L. 100–647, §\u202f1002 ( l )(5), inserted “(increased, in the case of an existing building which meets the requirements of paragraph (2)(B), by the amounts described in paragraph (2)(A)(i)(II))” before period at end.\nSubsec. (d)(5)(C).  Pub. L. 100–647, §\u202f1002 ( l )(6)(A), added subpar. (C).\nSubsec. (d)(6)(A)(iii).  Pub. L. 100–647, §\u202f1002 ( l )(7), struck out cl. (iii) which related to other circumstances of financial distress.\nSubsec. (d)(6)(B)(ii).  Pub. L. 100–647, §\u202f1002 ( l )(8), struck out “of 1934” after “Act”.\nSubsec. (f)(1).  Pub. L. 100–647, §\u202f1002 ( l )(2)(B), substituted “beginning with—” for “beginning with” and subpars. (A) and (B) and concluding provisions for “the taxable year in which the building is placed in service or, at the election of the taxpayer, the succeeding taxable year. Such an election, once made, shall be irrevocable.”\nSubsec. (f)(3).  Pub. L. 100–647, §\u202f1002 ( l )(9)(A), amended par. (3) generally. Prior to amendment, par. (3) “Special rule where increase in qualified basis after 1st year of credit period” read as follows:\n“(A)  Credit increased .—If—\n“(i) as of the close of any taxable year in the compliance period (after the 1st year of the credit period) the qualified basis of any building exceeds\n“(ii) the qualified basis of such building as of the close of the 1st year of the credit period,\nthe credit allowable under subsection (a) for the taxable year (determined without regard to this paragraph) shall be increased by an amount equal to the product of such excess and the percentage equal to ⅔ of the applicable percentage for such building.\n“(B) 1 st year computation applies .—A rule similar to the rule of paragraph (2)(A) shall apply to the additional credit allowable by reason of this paragraph for the 1st year in which such additional credit is allowable.”\nSubsec. (g)(2)(B)(i).  Pub. L. 100–647, §\u202f1002 ( l )(10), struck out “Federal” after “comparable”.\nSubsec. (g)(2)(C).  Pub. L. 100–647, §\u202f1002 ( l )(11), added subpar. (C).\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1002 ( l )(12), amended par. (3) generally, substituting subpars. (A) to (C) for former subpars. (A) and (B).\nSubsec. (g)(4).  Pub. L. 100–647, §\u202f1002 ( l )(13), inserted “;\u2000except that, in applying such provisions (other than section 142(d)(4)(B)(iii)) for such purposes, the term ‘gross rent’ shall have the meaning given such term by paragraph (2)(B) of this subsection” before period at end.\nSubsec. (g)(6).  Pub. L. 100–647, §\u202f1002 ( l )(32), added par. (6).\nSubsec. (h)(1).  Pub. L. 100–647, §\u202f1002 ( l )(14)(A), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “No credit shall be allowed by reason of this section for any taxable year with respect to any building in excess of the housing credit dollar amount allocated to such building under this subsection. An allocation shall be taken into account under the preceding sentence only if it occurs not later than the earlier of—\n“(A) the 60th day after the close of the taxable year, or\n“(B) the close of the calendar year in which such taxable year ends.”\nSubsec. (h)(1)(B).  Pub. L. 100–647, §\u202f4003(b)(1) , substituted “(C), (D), or (E)” for “(C) or (D)”.\nSubsec. (h)(1)(E).  Pub. L. 100–647, §\u202f4003(a) , added subpar. (E).\nSubsec. (h)(4)(A).  Pub. L. 100–647, §\u202f1002 ( l )(15), substituted “if—” for “and which is taken into account under section 146” and added cls. (i) and (ii).\nSubsec. (h)(5)(D), (E).  Pub. L. 100–647, §\u202f1002 ( l )(16), added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (h)(6)(B)(ii).  Pub. L. 100–647, §\u202f1002 ( l )(14)(B), struck out cl. (ii) which read as follows:\n“(ii)  Allocation may not be earlier than year in which building placed in service .—A housing credit agency may allocate its housing credit dollar amount for any calendar year only to buildings placed in service before the close of such calendar year.”\nSubsec. (h)(6)(D).  Pub. L. 100–647, §\u202f1002 ( l )(17), amended subpar. (D) generally. Prior to amendment, subpar. (D) “Credit allowable determined without regard to averaging convention, etc.” read as follows: “For purposes of this subsection, the credit allowable under subsection (a) with respect to any building shall be determined—\n“(i) without regard to paragraphs (2)(A) and (3)(B) of subsection (f), and\n“(ii) by applying subsection (f)(3)(A) without regard to ‘the percentage equal to ⅔ of’.”\nSubsec. (h)(6)(E).  Pub. L. 100–647, §\u202f1002 ( l )(18), added subpar. (E).\nSubsec. (i)(2)(A).  Pub. L. 100–647, §\u202f1002 ( l )(19)(A), inserted “or any prior taxable year” after “such taxable year” and substituted “is or was outstanding” for “is outstanding” and “are or were used” for “are used”.\nSubsec. (i)(2)(B).  Pub. L. 100–647, §\u202f1002 ( l )(19)(B), substituted “balance of loan or proceeds of obligations” for “outstanding balance of loan” in heading and amended text generally. Prior to amendment, text read as follows: “A loan shall not be taken into account under subparagraph (A) if the taxpayer elects to exclude an amount equal to the outstanding balance of such loan from the eligible basis of the building for purposes of subsection (d).”\nSubsec. (i)(2)(C).  Pub. L. 100–647, §\u202f1002 ( l )(19)(C), added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (i)(2)(D).  Pub. L. 100–647, §\u202f1002 ( l )(19)(C), (D), redesignated former subpar. (C) as (D) and substituted “this paragraph” for “subparagraph (A)”.\nSubsec. (j)(4)(D).  Pub. L. 100–647, §\u202f1007(g)(3)(B) , substituted “D, or G” for “or D”.\nSubsec. (j)(4)(F).  Pub. L. 100–647, §\u202f1002 ( l )(20), added subpar. (F).\nSubsec. (j)(5)(B).  Pub. L. 100–647, §\u202f4004(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “This paragraph shall apply to any partnership—\n“(i) more than ½ the capital interests, and more than ½ the profit interests, in which are owned by a group of 35 or more partners each of whom is a natural person or an estate, and\n“(ii) which elects the application of this paragraph.”\nSubsec. (j)(5)(B)(i).  Pub. L. 100–647, §\u202f1002 ( l )(21), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “which has 35 or more partners each of whom is a natural person or an estate, and”.\nSubsec. (j)(6).  Pub. L. 100–647, §\u202f1002 ( l )(22), inserted “(or interest therein)” after “disposition of building” in heading, and in text inserted “or an interest therein” after “of a building”.\nSubsec. (k)(2)(B).  Pub. L. 100–647, §\u202f1002 ( l )(23), inserted before period at end “,\u2000except that this subparagraph shall not apply in the case of a federally assisted building described in subsection (d)(6)(B) if—” and cls. (i) and (ii).\nSubsec. ( l ).  Pub. L. 100–647, §\u202f1002 ( l )(24)(B), substituted “Certifications and other reports to Secretary” for “Certifications to Secretary” in heading.\nSubsec. ( l )(2), (3).  Pub. L. 100–647, §\u202f1002 ( l )(24)(A), added par. (2) and redesignated former par. (2) as (3).\nSubsec. (n).  Pub. L. 100–647, §\u202f4003(b)(3) , amended subsec. (n) generally, substituting a single par. for former pars. (1) and (2).\nSubsec. (n)(1).  Pub. L. 100–647, §\u202f1002 ( l )(25), inserted “,\u2000and, except for any building described in paragraph (2)(B), subsection (h)(4) shall not apply to any building placed in service after 1989” after “year after 1989”.\n1986—Subsec. (k)(1).  Pub. L. 99–509  substituted “subparagraphs (D)(ii)(II) and (D)(iv)(I)” for “subparagraph (D)(iv)(I)”.\nPub. L. 116–260, div. EE, title II, §\u202f201(b) ,  Dec. 27, 2020 ,  134 Stat. 3056 , provided that:  \n “The amendments made by this section [amending this section] shall apply to— \n “(1)  any building which receives an allocation of housing credit dollar amount after  December 31, 2020 , and \n \n “(2)  in the case of any building any portion of which is financed with an obligation described in section 42(h)(4)(A), any such building if any such obligation which so finances such building is issued after  December 31, 2020 .”\nPub. L. 115–141, div. T, §\u202f102(b) ,  Mar. 23, 2018 ,  132 Stat. 1157 , provided that:  “The amendment made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2017 .”\nPub. L. 115–141, div. T, §\u202f103(c) ,  Mar. 23, 2018 ,  132 Stat. 1159 , provided that:  “The amendments made by this section [amending this section] shall apply to elections made under section 42(g)(1) of the Internal Revenue Code of 1986 after the date of the enactment of this Act [ Mar. 23, 2018 ].”\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f131(c) ,  Dec. 18, 2015 ,  129 Stat. 3055 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f112(b) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendment made by this section [amending this section] shall take effect on  January 1, 2014 .”\nPub. L. 113–295, div. A, title II, §\u202f212(d) ,  Dec. 19, 2014 ,  128 Stat. 4033 , provided that:  “The amendments made by this section [amending this section and sections 121 and 168 of this title] shall take effect as if included in the provisions of the Housing Assistance Tax Act of 2008 [ Pub. L. 110–289, div. C ] to which they relate.”\nAmendment by  section 221(a)(7) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title III, §\u202f302(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Jan. 2, 2013 ].”\nPub. L. 110–289, div. C, title I, §\u202f3002(c) ,  July 30, 2008 ,  122 Stat. 2880 , provided that:  “The amendments made by this subsection [probably means this section, amending this section] shall apply to buildings placed in service after the date of the enactment of this Act [ July 30, 2008 ].”\nPub. L. 110–289, div. C, title I, §\u202f3003(h) ,  July 30, 2008 ,  122 Stat. 2882 , provided that: \n “(1)   In general .— Except as otherwise provided in paragraph (2), the amendments made by this subsection [probably means this section, amending this section] shall apply to buildings placed in service after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(2)   Rehabilitation requirements.— “(A)   In general .— The amendments made by subsection (b) [amending this section] shall apply to buildings with respect to which housing credit dollar amounts are allocated after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(B)   Buildings not subject to allocation limits .— To the extent paragraph (1) of section 42(h) of the Internal Revenue Code of 1986 does not apply to any building by reason of paragraph (4) thereof, the amendments made by subsection (b) [amending this section] shall apply [to] buildings financed with bonds issued pursuant to allocations made after the date of the enactment of this Act [ July 30, 2008 ].”\nPub. L. 110–289, div. C, title I, §\u202f3004(i) ,  July 30, 2008 ,  122 Stat. 2884 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to buildings placed in service after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(2)   Repeal of bonding requirement on disposition of building .— The amendment made by subsection (c) [amending this section] shall apply to— “(A)  interests in buildings disposed [of] after the date of the enactment of this Act [ July 30, 2008 ], and \n \n “(B)  interests in buildings disposed of on or before such date if— “(i)  it is reasonably expected that such building will continue to be operated as a qualified low-income building (within the meaning of section 42 of the Internal Revenue Code of 1986) for the remaining compliance period (within the meaning of such section) with respect to such building, and \n \n “(ii)  the taxpayer elects the application of this subparagraph with respect to such disposition. \n \n \n \n “(3)   Energy efficiency and historic nature taken into account in making allocations .— The amendments made by subsection (d) [amending this section] shall apply to allocations made after  December 31, 2008 . \n \n “(4)   Continued eligibility for students who received foster care assistance .— The amendments made by subsection (e) [amending this section] shall apply to determinations made after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(5)   Treatment of rural projects .— The amendment made by subsection (f) [amending this section] shall apply to determinations made after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(6)   Clarification of general public use requirement .— The amendment made by subsection (g) [amending this section] shall apply to buildings placed in service before, on, or after the date of the enactment of this Act [ July 30, 2008 ].”\nPub. L. 110–289, div. C, title I, §\u202f3007(c) ,  July 30, 2008 ,  122 Stat. 2886 , provided that:  “The amendments made by this section [amending this section and  section 146 of this title ] shall apply to repayments of loans received after the date of the enactment of this Act [ July 30, 2008 ].”\nPub. L. 110–142, §\u202f6(b) ,  Dec. 20, 2007 ,  121 Stat. 1806 , provided that:  \n “The amendment made by this section [amending this section] shall apply to— \n “(1)  housing credit amounts allocated before, on, or after the date of the enactment of this Act [ Dec. 20, 2007 ], and \n \n “(2)  buildings placed in service before, on, or after such date to the extent paragraph (1) of section 42(h) of the Internal Revenue Code of 1986 does not apply to any building by reason of paragraph (4) thereof.”\nAmendment by  section 207(8) of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title I, subtitle D, §\u202f131(d)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–611, provided that:  “The amendments made by this section [amending this section] shall apply to calendar years after 2000.”\nPub. L. 106–554, §\u202f1(a)(7) [title I, subtitle D, §\u202f137] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–613, provided that:  \n “Except as otherwise provided in this subtitle [amending this section and enacting provisions set out above], the amendments made by this subtitle shall apply to— \n “(1)  housing credit dollar amounts allocated after  December 31, 2000 ; and \n \n “(2)  buildings placed in service after such date to the extent paragraph (1) of section 42(h) of the Internal Revenue Code of 1986 does not apply to any building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date.”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 103–66, title XIII, §\u202f13142(a)(2) ,  Aug. 10, 1993 ,  107 Stat. 438 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to periods ending after  June 30, 1992 .”\nPub. L. 103–66, title XIII, §\u202f13142(b)(6) ,  Aug. 10, 1993 ,  107 Stat. 439 , as amended by  Pub. L. 104–188, title I, §\u202f1703(b) ,  Aug. 20, 1996 ,  110 Stat. 1875 , provided that: \n “(A)   In general .— Except as provided in subparagraphs (B) and (C), the amendments made by this subsection [amending this section] shall apply to— “(i)  determinations under section 42 of the Internal Revenue Code of 1986 with respect to housing credit dollar amounts allocated from State housing credit ceilings after  June 30, 1992 , or \n \n “(ii)  buildings placed in service after  June 30, 1992 , to the extent paragraph (1) of section 42(h) of such Code does not apply to any building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date. \n \n \n “(B)   Full-time students, waiver authority, and prohibited discrimination .— The amendments made by paragraphs (2), (3), and (4) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 10, 1993 ]. \n \n “(C)   HOME assistance .— The amendment made by paragraph (5) [amending this section] shall apply to periods after the date of the enactment of this Act.”\nPub. L. 102–227, title I, §\u202f107(b) ,  Dec. 11, 1991 ,  105 Stat. 1688 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years after 1991.”\nPub. L. 101–508, title XI, §\u202f11407(a)(3) ,  Nov. 5, 1990 ,  104 Stat. 1388–474 , provided that:  “The amendments made by this subsection [amending this section and repealing provisions set out below] shall apply to calendar years after 1989.”\nPub. L. 101–508, title XI, §\u202f11407(b)(10) ,  Nov. 5, 1990 ,  104 Stat. 1388–476 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section] shall apply to— “(i)  determinations under section 42 of the Internal Revenue Code of 1986 with respect to housing credit dollar amounts allocated from State housing credit ceilings for calendar years after 1990, or \n \n “(ii)  buildings placed in service after  December 31, 1990 , to the extent paragraph (1) of section 42(h) of such Code does not apply to any building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date. \n \n \n “(B)   Tenant rights, etc .— The amendments made by paragraphs (1), (6), (8), and (9) [amending this section] shall take effect on the date of the enactment of this Act [ Nov. 5, 1990 ]. \n \n “(C)   Monitoring .— The amendment made by paragraph (2) [amending this section] shall take effect on  January 1, 1992 , and shall apply to buildings placed in service before, on, or after such date. \n \n “(D)   Study .— The Inspector General of the Department of Housing and Urban Development and the Secretary of the Treasury shall jointly conduct a study of the effectiveness of the amendment made by paragraph (5) [amending this section] in carrying out the purposes of section 42 of the Internal Revenue Code of 1986. The report of such study shall be submitted not later than  January 1, 1993 , to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.”\nPub. L. 101–508, title XI, §\u202f11701(a)(3)(B) ,  Nov. 5, 1990 ,  104 Stat. 1388–506 , provided that:  \n “In the case of a building to which (but for this subparagraph) the amendment made by subparagraph (A) [amending this section] does not apply, such amendment shall apply to— \n “(i)  determinations of qualified basis for taxable years beginning after the date of the enactment of this Act [ Nov. 5, 1990 ], and \n \n “(ii)  determinations of qualified basis for taxable years beginning on or before such date except that determinations for such taxable years shall be made without regard to any reduction in gross rent after  August 3, 1990 , for any period before  August 4, 1990 .”\nPub. L. 101–508, title XI, §\u202f11701(n) ,  Nov. 5, 1990 ,  104 Stat. 1388–513 , provided that:  “Except as otherwise provided in this section, any amendment made by this section [amending this section and sections 148, 163, 172, 403, 1031, 1253, 2056, 4682, 4975, 4978B and 6038 of this title, and provisions set out as notes under this section and  section 2040 of this title ] shall take effect as if included in the provision of the Revenue Reconciliation Act of 1989 [ Pub. L. 101–239, title VII ] to which such amendment relates.”\nPub. L. 101–508, title XI, §\u202f11812(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–536 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 56, 167, 168, 312, 381, 404, 460, 642, 1016, 1250, and 7701 of this title] shall apply to property placed in service after the date of the enactment of this Act [ Nov. 5, 1990 ]. \n \n “(2)   Exception .— The amendments made by this section shall not apply to any property to which section 168 of the Internal Revenue Code of 1986 does not apply by reason of subsection (f)(5) thereof. \n \n “(3)   Exception for previously grandfather expenditures .— The amendments made by this section shall not apply to rehabilitation expenditures described in section 252(f)(5) of the Tax Reform Act of 1986 [ Pub. L. 99–514 ] (as added by section 1002( l )(31) of the Technical and Miscellaneous Revenue Act of 1988 [see Transitional Rules note below]).”\nAmendment by  section 11813(b)(3) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 101–239, title VII, §\u202f7108(r) ,  Dec. 19, 1989 ,  103 Stat. 2321 , as amended by  Pub. L. 101–508, title XI, §\u202f11701(a)(11) , (12),  Nov. 5, 1990 ,  104 Stat. 1388–507 ;  Pub. L. 104–188, title I, §\u202f1702(g)(5)(A) ,  Aug. 20, 1996 ,  110 Stat. 1873 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 142 of this title ] shall apply to determinations under section 42 of the Internal Revenue Code of 1986 with respect to housing credit dollar amounts allocated from State housing credit ceilings for calendar years after 1989. \n \n “(2)   Buildings not subject to allocation limits .— Except as otherwise provided in this subsection, to the extent paragraph (1) of section 42(h) of such Code does not apply to any building by reason of paragraph (4) thereof, the amendments made by this section shall apply to buildings placed in service after  December 31, 1989 . \n \n “(3)   One-year carryover of unused credit authority, etc .— The amendments made by subsection (b) [amending this section] shall apply to calendar years after 1989, but clauses (ii), (iii), and (iv) of section 42(h)(3)(C) of such Code (as added by this section) shall be applied without regard to allocations for 1989 or any preceding year. \n \n “(4)   Additional buildings eligible for waiver of 10-year rule .— The amendments made by subsection (f) [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 19, 1989 ]. \n \n “(5)   Certifications with respect to 1st year of credit period .— The amendment made by subsection (p) [amending this section] shall apply to taxable years ending on or after  December 31, 1989 . \n \n “(6)   Certain rules which apply to bonds .— Paragraphs (1)(D) and (2)(D) of section 42(m) of such Code, as added by this section, shall apply to obligations issued after  December 31, 1989 . \n \n “(7)   Clarifications .— The amendments made by the following provisions of this section shall apply as if included in the amendments made by section 252 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , enacting this section and amending sections 38 and 55 of this title]: “(A)  Paragraph (1) of subsection (h) (relating to units rented on a monthly basis) [amending this section]. \n \n “(B)  Subsection ( l ) (relating to eligible basis for new buildings to include expenditures before close of 1st year of credit period) [amending this section]. \n \n \n “(8)   Guidance on difficult development areas and posting of bond to avoid recapture .— Not later than 180 days after the date of the enactment of this Act [ Dec. 19, 1989 ]— “(A)  the Secretary of Housing and Urban Development shall publish initial guidance on the designation of difficult development areas under section 42(d)(5)(C) of such Code, as added by this section, and \n \n “(B)  the Secretary of the Treasury shall publish initial guidance under section 42(j)(6) of such Code (relating to no recapture on disposition of building (or interest therein) where bond posted).”\n[ Pub. L. 104–188, title I, §\u202f1702(g)(5) ,  Aug. 20, 1996 ,  110 Stat. 1873 , provided that:\n[“(A) Paragraph (11) of section 11701(a) of the Revenue Reconciliation Act of 1990 (and the amendment made by such paragraph) [ Pub. L. 101–508 , which amended  section 7108(r)(2) of Pub. L. 101–239 , set out above, by inserting “but only with respect to bonds issued after such date” before the period at the end of such section 7108(r)(2)] are hereby repealed, and section 7108(r)(2) of the Revenue Reconciliation Act of 1989 [ Pub. L. 101–239 ] shall be applied as if such paragraph (and amendment) had never been enacted.\n[“(B) Subparagraph (A) shall not apply to any building if the owner of such building establishes to the satisfaction of the Secretary of the Treasury or his delegate that such owner reasonably relied on the amendment made by such paragraph (11).”]\nAmendment by  section 7811(a) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 7831(c) of Pub. L. 101–239  effective as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 7831(g) of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by sections 1002( l )(1)–(25), (32) and 1007(g)(3)(B) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4003(c) ,  Nov. 10, 1988 ,  102 Stat. 3644 , provided that:  “The amendments made by this section [amending this section and provisions set out as a note under  section 469 of this title ] shall apply to amounts allocated in calendar years after 1987.”\nPub. L. 100–647, title IV, §\u202f4004(b) ,  Nov. 10, 1988 ,  102 Stat. 3644 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall take effect as if included in the amendments made by section 252 of the Reform Act [ section 252 of Pub. L. 99–514 , enacting this section and amending sections 38 and 55 of this title]. \n \n “(2)   Period for election .— The period for electing not to have section 42(j)(5) of the 1986 Code apply to any partnership shall not expire before the date which is 6 months after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 99–509, title VIII, §\u202f8072(b) ,  Oct. 21, 1986 ,  100 Stat. 1964 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect as if included in the amendment made by section 252(a) of the Tax Reform Act of 1986 [enacting this section].”\nPub. L. 99–514, title II, §\u202f252(e) ,  Oct. 22, 1986 ,  100 Stat. 2205 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 38 and 55 of this title] shall apply to buildings placed in service after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Special rule for rehabilitation expenditures .— Subsection (e) of section 42 of the Internal Revenue Code of 1986 (as added by this section) shall apply for purposes of paragraph (1).”\nFor provisions that nothing in amendment by sections 11812(b)(3) and 11813(b)(3) of  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 111–5, div. B, title I, §\u202f1602 ,  Feb. 17, 2009 ,  123 Stat. 362 , provided that: \n “(a)   In General .— The Secretary of the Treasury shall make a grant to the housing credit agency of each State in an amount equal to such State’s low-income housing grant election amount. \n \n “(b)   Low-Income Housing Grant Election Amount .— For purposes of this section, the term ‘low-income housing grant election amount’ means, with respect to any State, such amount as the State may elect which does not exceed 85 percent of the product of— “(1)  the sum of— “(A)  100 percent of the State housing credit ceiling for 2009 which is attributable to amounts described in clauses (i) and (iii) of section 42(h)(3)(C) of the Internal Revenue Code of 1986, and \n \n “(B)  40 percent of the State housing credit ceiling for 2009 which is attributable to amounts described in clauses (ii) and (iv) of such section, multiplied by \n \n \n “(2)  10. \n \n \n “(c)   Subawards for Low-Income Buildings.— “(1)   In general .— A State housing credit agency receiving a grant under this section shall use such grant to make subawards to finance the construction or acquisition and rehabilitation of qualified low-income buildings. A subaward under this section may be made to finance a qualified low-income building with or without an allocation under section 42 of the Internal Revenue Code of 1986, except that a State housing credit agency may make subawards to finance qualified low-income buildings without an allocation only if it makes a determination that such use will increase the total funds available to the State to build and rehabilitate affordable housing. In complying with such determination requirement, a State housing credit agency shall establish a process in which applicants that are allocated credits are required to demonstrate good faith efforts to obtain investment commitments for such credits before the agency makes such subawards. \n \n “(2)   Subawards subject to same requirements as low-income housing credit allocations .— Any such subaward with respect to any qualified low-income building shall be made in the same manner and shall be subject to the same limitations (including rent, income, and use restrictions on such building) as an allocation of housing credit dollar amount allocated by such State housing credit agency under section 42 of the Internal Revenue Code of 1986, except that such subawards shall not be limited by, or otherwise affect (except as provided in subsection (h)(3)(J) of such section [section 42(h)(3) has no subpar. (J)]), the State housing credit ceiling applicable to such agency. \n \n “(3)   Compliance and asset management .— The State housing credit agency shall perform asset management functions to ensure compliance with section 42 of the Internal Revenue Code of 1986 and the long-term viability of buildings funded by any subaward under this section. The State housing credit agency may collect reasonable fees from a subaward recipient to cover expenses associated with the performance of its duties under this paragraph. The State housing credit agency may retain an agent or other private contractor to satisfy the requirements of this paragraph. \n \n “(4)   Recapture .— The State housing credit agency shall impose conditions or restrictions, including a requirement providing for recapture, on any subaward under this section so as to assure that the building with respect to which such subaward is made remains a qualified low-income building during the compliance period. Any such recapture shall be payable to the Secretary of the Treasury for deposit in the general fund of the Treasury and may be enforced by means of liens or such other methods as the Secretary of the Treasury determines appropriate. \n \n \n “(d)   Return of Unused Grant Funds .— Any grant funds not used to make subawards under this section before  January 1, 2011 , shall be returned to the Secretary of the Treasury on such date. Any subawards returned to the State housing credit agency on or after such date shall be promptly returned to the Secretary of the Treasury. Any amounts returned to the Secretary of the Treasury under this subsection shall be deposited in the general fund of the Treasury. \n \n “(e)   Definitions .— Any term used in this section which is also used in section 42 of the Internal Revenue Code of 1986 shall have the same meaning for purposes of this section as when used in such section 42. Any reference in this section to the Secretary of the Treasury shall be treated as including the Secretary’s delegate. \n \n “(f)   Appropriations .— There is hereby appropriated to the Secretary of the Treasury such sums as may be necessary to carry out this section.”\nPub. L. 103–66, title XIII, §\u202f13142(c) ,  Aug. 10, 1993 ,  107 Stat. 439 , provided that: \n “(1)  In the case of a building to which the amendments made by subsection (e)(1) or (n)(2) of section 7108 of the Revenue Reconciliation Act of 1989 [ Pub. L. 101–239 , amending this section] did not apply, the taxpayer may elect to have such amendments apply to such building if the taxpayer has met the requirements of the procedures described in section 42(m)(1)(B)(iii) of the Internal Revenue Code of 1986. \n \n “(2)  In the case of the amendment made by such subsection (e)(1), such election shall apply only with respect to tenants first occupying any unit in the building after the date of the election. \n \n “(3)  In the case of the amendment made by such subsection (n)(2), such election shall apply only if rents of low-income tenants in such building do not increase as a result of such election. \n \n “(4)  An election under this subsection may be made only during the 180-day period beginning on the date of the enactment of this Act [ Aug. 10, 1993 ] and, once made, shall be irrevocable.”\nPub. L. 101–508, title XI, §\u202f11407(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–476 , provided that: \n “(1)   In general .— At the election of an individual, the credit determined under section 42 of the Internal Revenue Code of 1986 for the taxpayer’s first taxable year ending on or after  October 25, 1990 , shall be 150 percent of the amount which would (but for this paragraph) be so allowable with respect to investments held by such individual on or before  October 25, 1990 . \n \n “(2)   Reduction in aggregate credit to reflect increased  1990  credit .— The aggregate credit allowable to any person under section 42 of such Code with respect to any investment for taxable years after the first taxable year referred to in paragraph (1) shall be reduced on a pro rata basis by the amount of the increased credit allowable by reason of paragraph (1) with respect to such first taxable year. The preceding sentence shall not be construed to affect whether any taxable year is part of the credit, compliance, or extended use periods. \n \n “(3)   Election .— The election under paragraph (1) shall be made at the time and in the manner prescribed by the Secretary of the Treasury or his delegate, and, once made, shall be irrevocable. In the case of a partnership, such election shall be made by the partnership.”\nPub. L. 101–508, title XI, §\u202f11701(a)(5)(B) ,  Nov. 5, 1990 ,  104 Stat. 1388–506 , provided that:  “In the case of a building to which the amendment made by subparagraph (A) [amending this section] does not apply, the period specified in section 42(g)(3)(A) of the Internal Revenue Code of 1986 (as in effect before the amendment made by subparagraph (A)) shall not expire before the close of the taxable year following the taxable year in which the building is placed in service.”\nPub. L. 101–239, title VII, §\u202f7108(a)(2) ,  Dec. 19, 1989 ,  103 Stat. 2307 , provided that in the case of calendar year 1990, section 42(h)(3)(C)(i) of the Internal Revenue Code of 1986 be applied by substituting “$.9375” for “$1.25”, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11407(a)(2) , (3),  Nov. 5, 1990 ,  104 Stat. 1388–474 , applicable to calendar years after 1989.\nPub. L. 99–514, title II, §\u202f252(f) ,  Oct. 22, 1986 ,  100 Stat. 2205 , as amended by  Pub. L. 100–647, title I, §\u202f1002 ( l )(28)–(31),  Nov. 10, 1988 ,  102 Stat. 3381 , provided that: \n “(1)   Limitation to non-acrs buildings not to apply to certain buildings, etc.— “(A)   In general .— In the case of a building which is part of a project described in subparagraph (B)— “(i)  section 42(c)(2)(B) of the Internal Revenue Code of 1986 (as added by this section) shall not apply, \n \n “(ii)  such building shall be treated as not federally subsidized for purposes of section 42(b)(1)(A) of such Code, \n \n “(iii)  the eligible basis of such building shall be treated, for purposes of section 42(h)(4)(A) of such Code, as if it were financed by an obligation the interest on which is exempt from tax under section 103 of such Code and which is taken into account under section 146 of such Code, and \n \n “(iv)  the amendments made by section 803 [enacting  section 263A of this title , amending sections 48, 267, 312, 447, 464, and 471 of this title, and repealing sections 189, 278, and 280 of this title] shall not apply. \n \n \n “(B)   Project described .— A project is described in this subparagraph if— “(i)  an urban development action grant application with respect to such project was submitted on  September 13, 1984 , \n \n “(ii)  a zoning commission map amendment related to such project was granted on  July 17, 1985 , and \n \n “(iii)  the number assigned to such project by the Federal Housing Administration is 023–36602. \n \n \n “(C)   Additional units eligible for credit .— In the case of a building to which subparagraph (A) applies and which is part of a project which meets the requirements of subparagraph (D), for each low-income unit in such building which is occupied by individuals whose income is 30 percent or less of area median gross income, one additional unit (not otherwise a low-income unit) in such building shall be treated as a low-income unit for purposes of such section 42. \n \n “(D)   Project described .— A project is described in this subparagraph if— “(i)  rents charged for units in such project are restricted by State regulations, \n \n “(ii)  the annual cash flow of such project is restricted by State law, \n \n “(iii)  the project is located on land owned by or ground leased from a public housing authority, \n \n “(iv)  construction of such project begins on or before  December 31, 1986 , and units within such project are placed in service on or before  June 1, 1990 , and \n \n “(v)  for a 20-year period, 20 percent or more of the residential units in such project are occupied by individuals whose income is 50 percent or less of area median gross income. \n \n \n “(E)   Maximum additional credit .— The maximum present value of additional credits allowable under section 42 of such Code by reason of subparagraph (C) shall not exceed 25 percent of the eligible basis of the building. \n \n \n “(2)   Additional allocation of housing credit ceiling.— “(A)   In general .— There is hereby allocated to each housing credit agency described in subparagraph (B) an additional housing credit dollar amount determined in accordance with the following table: \n \n \n \n \n \n \n \n \n \n \n \u2001 The additional \n “For calendar year: allocation is: \n 1987 $3,900,000\u202f\u202f \n 1988 $7,600,000\u202f\u202f \n 1989 $1,300,000. \n \n \n \n \n “(B)   Housing credit agencies described .— The housing credit agencies described in this subparagraph are: “(i)  A corporate governmental agency constituted as a public benefit corporation and established in 1971 under the provisions of Article XII of the Private Housing Finance Law of the State. \n \n “(ii)  A city department established on  December 20, 1979 , pursuant to chapter XVIII of a municipal code of such city for the purpose of supervising and coordinating the formation and execution of projects and programs affecting housing within such city. \n \n “(iii)  The State housing finance agency referred to in subparagraph (C), but only with respect to projects described in subparagraph (C). \n \n \n “(C)   Project described .— A project is described in this subparagraph if such project is a qualified low-income housing project which— “(i)  receives financing from a State housing finance agency from the proceeds of bonds issued pursuant to chapter 708 of the Acts of 1966 of such State pursuant to loan commitments from such agency made between  May 8, 1984 , and  July 8, 1986 , and \n \n “(ii)  is subject to subsidy commitments issued pursuant to a program established under chapter 574 of the Acts of 1983 of such State having award dates from such agency between  May 31, 1984 , and  June 11, 1985 . \n \n \n “(D)   Special rules.— “(i)  Any building— “(I)  which is allocated any housing credit dollar amount by a housing credit agency described in clause (iii) of subparagraph (B), and \n \n “(II)  which is placed in service after  June 30, 1986 , and before  January 1, 1987 , \n \n\n \u2001\u2001shall be treated for purposes of the amendments made by this section as placed in service on  January 1, 1987 . \n \n “(ii)  Section 42(c)(2)(B) of the Internal Revenue Code of 1986 shall not apply to any building which is allocated any housing credit dollar amount by any agency described in subparagraph (B). \n \n \n “(E)   All units treated as low income units in certain cases .— In the case of any building— “(i)  which is allocated any housing credit dollar amount by any agency described in subparagraph (B), and \n \n “(ii)  which after the application of subparagraph (D)(ii) is a qualified low-income building at all times during any taxable year, \n \n\n such building shall be treated as described in section 42(b)(1)(B) of such Code and having an applicable fraction for such year of 1. The preceding sentence shall apply to any building only to the extent of the portion of the additional housing credit dollar amount (allocated to such agency under subparagraph (A)) allocated to such building. \n \n \n “(3)   Certain projects placed in service before 1987.— “(A)   In general .— In the case of a building which is part of a project described in subparagraph (B)— “(i)  section 42(c)(2)(B) of such Code shall not apply, \n \n “(ii)  such building shall be treated as placed in service during the first calendar year after 1986 and before 1990 in which such building is a qualified low-income building (determined after the application of clause (i)), and \n \n “(iii)  for purposes of section 42(h) of such Code, such building shall be treated as having allocated to it a housing credit dollar amount equal to the dollar amount appearing in the clause of subparagraph (B) in which such building is described. \n \n \n “(B)   Project described .— A project is described in this subparagraph if the code number assigned to such project by the Farmers’ Home Administration appears in the following table: \n \n \n \n \n \n \n \n \n \n \n \u2001 The housing credit \n “The code number is: dollar amount is: \n (i) 49284553664 $16,000\u202f\u202f \n (ii) 4927742022446 $22,000\u202f\u202f \n (iii) 49270742276087 $64,000\u202f\u202f \n (iv) 490270742387293 $48,000\u202f\u202f \n (v) 4927074218234 $32,000\u202f\u202f \n (vi) 49270742274019 $36,000\u202f\u202f \n (vii) 51460742345074 $53,000. \n \n \n \n \n “(C)   Determination of adjusted basis .— The adjusted basis of any building to which this paragraph applies for purposes of section 42 of such Code shall be its adjusted basis as of the close of the taxable year ending before the first taxable year of the credit period for such building. \n \n “(D)   Certain rules to apply .— Rules similar to the rules of subparagraph (E) of paragraph (2) shall apply for purposes of this paragraph. \n \n \n “(4)   Definitions .— For purposes of this subsection, terms used in such subsection which are also used in section 42 of the Internal Revenue Code of 1986 (as added by this section) shall have the meanings given such terms by such section 42. \n \n “(5)   Transitional rule .— In the case of any rehabilitation expenditures incurred with respect to units located in the neighborhood strategy area within the community development block grant program in Ft. Wayne, Indiana— “(A)  the amendments made by this section [enacting this section and amending sections 38 and 55 of this title] shall not apply, and \n \n “(B)  paragraph (1) of section 167(k) of the Internal Revenue Code of 1986, shall be applied as if it did not contain the phrase ‘and before  January 1, 1987 ’. \n \n\n The number of units to which the preceding sentence applies shall not exceed 150.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the enhanced oil recovery credit for any taxable year is an amount equal to 15 percent of the taxpayer’s qualified enhanced oil recovery costs for such taxable year.\nFor purposes of this subsection, the term “reference price” means, with respect to any calendar year, the reference price determined for such calendar year under section 45K(d)(2)(C).\nThe term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990. For purposes of the preceding sentence, the term “GNP implicit price deflator” means the first revision of the implicit price deflator for the gross national product as computed and published by the Secretary of Commerce. Not later than April 1 of any calendar year, the Secretary shall publish the inflation adjustment factor for the preceding calendar year.\nA project shall not be treated as a qualified enhanced oil recovery project unless the operator submits to the Secretary (at such times and in such manner as the Secretary provides) a certification from a petroleum engineer that the project meets (and continues to meet) the requirements of subparagraph (A).\nFor purposes of determining qualified enhanced oil recovery costs, rules similar to the rules of section 49(a)(1), section 49(a)(2), and section 49(b) shall apply.\nFor purposes of this section, immiscible non-hydrocarbon gas displacement shall be treated as a tertiary recovery method under section 193(b)(3).\nThe term “natural gas” has the meaning given such term by section 613A(e)(2).\nAny deduction allowable under this chapter for any costs taken into account in computing the amount of the credit determined under subsection (a) shall be reduced by the amount of such credit attributable to such costs.\nFor purposes of this subtitle, if a credit is determined under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.\nA taxpayer may elect to have this section not apply for any taxable year.\nAn election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).\nAn election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.\nA prior section 43 was renumbered  section 32 of this title .\nAnother prior section 43 was renumbered  section 37 of this title .\n2005—Subsec. (b)(2).  Pub. L. 109–58  substituted “section 45K(d)(2)(C)” for “section 29(d)(2)(C)”.\nSubsec. (c)(5).  Pub. L. 109–135  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of paragraph (1)(D)—\n“(1)  In general .—The term ‘Alaska natural gas’ means natural gas entering the Alaska natural gas pipeline (as defined in section 168(i)(16) (determined without regard to subparagraph (B) thereof)) which is produced from a well—\n“(A) located in the area of the State of Alaska lying north of 64 degrees North latitude, determined by excluding the area of the Alaska National Wildlife Refuge (including the continental shelf thereof within the meaning of section 638(1)), and\n“(B) pursuant to the applicable State and Federal pollution prevention, control, and permit requirements from such area (including the continental shelf thereof within the meaning of section 638(1)).\n“(2)  Natural gas .—The term ‘natural gas’ has the meaning given such term by section 613A(e)(2).”\n2004—Subsec. (c)(1)(D).  Pub. L. 108–357, §\u202f707(a) , added subpar. (D).\nSubsec. (c)(5).  Pub. L. 108–357, §\u202f707(b) , added par. (5).\n2000—Subsec. (c)(1)(C).  Pub. L. 106–554  inserted “(as defined in section 193(b))” after “expenses” and struck out “under section 193” after “allowable”.\nAmendment by  Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nPub. L. 108–357, title VII, §\u202f707(c) ,  Oct. 22, 2004 ,  118 Stat. 1550 , provided that:  “The amendment made by this section [amending this section] shall apply to costs paid or incurred in taxable years beginning after  December 31, 2004 .”\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f317(b)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–645, provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 11511 of the Revenue Reconciliation Act of 1990 [ Pub. L. 101–508 ].”\nPub. L. 101–508, title XI, §\u202f11511(d) ,  Nov. 5, 1990 ,  104 Stat. 1388–485 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 38, 39, 196, and 6501 of this title] shall apply to costs paid or incurred in taxable years beginning after  December 31, 1990 . \n \n “(2)   Special rule for significant expansion of projects .— For purposes of section 43(c)(2)(A)(iii) of the Internal Revenue Code of 1986 (as added by subsection (a)), any significant expansion after  December 31, 1990 , of a project begun before  January 1, 1991 , shall be treated as a project with respect to which the first injection commences after  December 31, 1990 .”\nProvisions relating to inflation adjustment of items in this section for certain years were contained in the following:\n2023—Internal Revenue Notice 2023–57.\n2022—Internal Revenue Notice 2022–19.\n2021—Internal Revenue Notice 2021–47.\n2020—Internal Revenue Notice 2020–31.\n2019—Internal Revenue Notice 2019–36.\n2018—Internal Revenue Notice 2018–49.\n2017—Internal Revenue Notice 2017–25.\n2016—Internal Revenue Notice 2016–44.\n2015—Internal Revenue Notice 2015–64.\n2014—Internal Revenue Notice 2014–64.\n2013—Internal Revenue Notice 2013–50.\n2012—Internal Revenue Notice 2012–49.\n2011—Internal Revenue Notice 2011–57.\n2010—Internal Revenue Notice 2010–72.\n2009—Internal Revenue Notice 2009–73.\n2008—Internal Revenue Notice 2008–72.\n2007—Internal Revenue Notice 2007–64.\n2006—Internal Revenue Notice 2006–62.\n2005—Internal Revenue Notice 2005–56.\n2004—Internal Revenue Notice 2004–49.\n2003—Internal Revenue Notice 2003–43.\n2002—Internal Revenue Notice 2002–53.\n2001—Internal Revenue Notice 2001–54.\n2000—Internal Revenue Notice 2000–51.\n1999—Internal Revenue Notice 99–45.\n1998—Internal Revenue Notice 98–41.\n1997—Internal Revenue Notice 97–39.\n1996—Internal Revenue Notice 96–41.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, in the case of an eligible small business, the amount of the disabled access credit determined under this section for any taxable year shall be an amount equal to 50 percent of so much of the eligible access expenditures for the taxable year as exceed $250 but do not exceed $10,250.\nThe term “eligible access expenditures” means amounts paid or incurred by an eligible small business for the purpose of enabling such eligible small business to comply with applicable requirements under the Americans With Disabilities Act of 1990 (as in effect on the date of the enactment of this section).\nAmounts paid or incurred for the purposes described in paragraph (2) shall include only expenditures which are reasonable and shall not include expenditures which are unnecessary to accomplish such purposes.\nThe term “eligible access expenditures” shall not include amounts described in paragraph (2)(A) which are paid or incurred in connection with any facility first placed in service after the date of the enactment of this section.\nThe term “eligible access expenditures” shall not include any amount unless the taxpayer establishes, to the satisfaction of the Secretary, that the resulting removal of any barrier (or the provision of any services, modifications, materials, or equipment) meets the standards promulgated by the Secretary with the concurrence of the Architectural and Transportation Barriers Compliance Board and set forth in regulations prescribed by the Secretary.\nThe term “disability” has the same meaning as when used in the Americans With Disabilities Act of 1990 (as in effect on the date of the enactment of this section).\nAll members of the same controlled group of corporations (within the meaning of section 52(a)) and all persons under common control (within the meaning of section 52(b)) shall be treated as 1 person for purposes of this section.\nThe Secretary shall apportion the dollar limitation under subsection (a) among the members of any group described in subparagraph (A) in such manner as the Secretary shall by regulations prescribe.\nIn the case of a partnership, the limitation under subsection (a) shall apply with respect to the partnership and each partner. A similar rule shall apply in the case of an S corporation and its shareholders.\nThe Secretary shall prescribe such adjustments as may be appropriate for purposes of paragraph (1) of subsection (b) if the preceding taxable year is a taxable year of less than 12 months.\nGross receipts for any taxable year shall be reduced by returns and allowances made during such year.\nThe reference to any person in paragraph (1) of subsection (b) shall be treated as including a reference to any predecessor.\nThe Secretary shall prescribe regulations necessary to carry out the purposes of this section.\nThe Americans With Disabilities Act of 1990, referred to in subsecs. (c)(1) and (d)(1) is  Pub. L. 101–336 ,  July 26, 1990 ,  104 Stat. 327 , which is classified principally to chapter 126 (§\u202f12101 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 12101 of Title 42  and Tables.\nThe date of the enactment of this section, referred to in subsecs. (c)(1), (4) and (d)(1), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nA prior section 44, added  Pub. L. 94–12, title II, §\u202f208(a) ,  Mar. 29, 1975 ,  89 Stat. 32 ; amended  Pub. L. 94–45, title IV, §\u202f401(a) ,  June 30, 1975 ,  89 Stat. 243 ;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to purchase of new principal residence, prior to repeal by  Pub. L. 98–369, div. A, title IV, §\u202f474(m)(1) ,  July 18, 1984 ,  98 Stat. 833 , applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years.\nAnother prior section 44 was renumbered  section 37 of this title .\nSection applicable to expenditures paid or incurred after  Nov. 5, 1990 , see  section 11611(e)(1) of Pub. L. 101–508 , set out as an Effective Date of 1990 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 95–30, title II, §\u202f202(a) ,  May 23, 1977 ,  91 Stat. 141 ; amended  Pub. L. 95–600, title III, §\u202f321(b)(1) ,  Nov. 6, 1978 ,  92 Stat. 2834 ;  Pub. L. 96–222, title I, §\u202f103(a)(6)(G)(i) , (ii),  Apr. 1, 1980 ,  94 Stat. 210 , related to credit for employment of certain new employees.\nRepeal applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 21 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The 0.3 cent amount in subsection (a), the 8 cent amount in paragraph (1), the $4.375 amount in subsection (e)(8)(A), the $2 amount in subsection (e)(8)(D)(ii)(I), and in subsection (e)(8)(B)(i) the reference price of fuel used as a feedstock (within the meaning of subsection (c)(7)(A)) in 2002 shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. If the 0.3 cent amount as increased under the preceding sentence is not a multiple of 0.05 cent, such amount shall be rounded to the nearest multiple of 0.05 cent. In any other case, if an amount as increased under this paragraph is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.\nIn the case of electricity produced and sold in any calendar year after 2003 at any qualified facility described in paragraph (3), (5), (6), or (7) of subsection (d), the amount in effect under subsection (a)(1) for such calendar year (determined before the application of the last two sentences of paragraph (2) of this subsection) shall be reduced by one-half.\nExcept as provided in clause (ii) or clause (iii), in the case of any facility described in paragraph (3), (4), (5), (6), or (7) of subsection (d), the 5-year period beginning on the date the facility was originally placed in service shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).\nIn the case of any facility described in subsection (d)(3)(A)(ii) placed in service before the date of the enactment of this paragraph, the 5-year period beginning on  January 1, 2005 , shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).\nClause (i) shall not apply to any facility placed in service after the date of the enactment of this clause.\nIn the case of any qualified facility which satisfies the requirements of subparagraph (B), the amount of the credit determined under subsection (a) (determined after the application of paragraphs (1) through (5) and without regard to this paragraph) shall be equal to such amount multiplied by 5.\nSubchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply with respect to the assessment or collection of any penalty imposed by this paragraph.\nPursuant to rules issued by the Secretary, in the case of a final determination by the Secretary with respect to any failure by the taxpayer to satisfy the requirement under subparagraph (A), subparagraph (B)(i) shall not apply unless the payments described in subclauses (I) and (II) of such subparagraph are made by the taxpayer on or before the date which is 180 days after the date of such determination.\nTaxpayers shall ensure that, with respect to the construction of any qualified facility, not less than the applicable percentage of the total labor hours of the construction, alteration, or repair work (including such work performed by any contractor or subcontractor) with respect to such facility shall, subject to subparagraph (B), be performed by qualified apprentices.\nThe requirement under subparagraph (A)(i) shall be subject to any applicable requirements for apprentice-to-journeyworker ratios of the Department of Labor or the applicable State apprenticeship agency.\nEach taxpayer, contractor, or subcontractor who employs 4 or more individuals to perform construction, alteration, or repair work with respect to the construction of a qualified facility shall employ 1 or more qualified apprentices to perform such work.\nIf the Secretary determines that any failure described in subclause (i)(II) is due to intentional disregard of the requirements under subparagraphs (A) and (C), subclause (i)(II) shall be applied by substituting “$500” for “$50” in item (aa) thereof.\nThe term “qualified apprentice” means an individual who is employed by the taxpayer or by any contractor or subcontractor and who is participating in a registered apprenticeship program, as defined in section 3131(e)(3)(B).\nIn the case of any qualified facility which satisfies the requirement under subparagraph (B)(i), the amount of the credit determined under subsection (a) (determined after the application of paragraphs (1) through (8)) shall be increased by an amount equal to 10 percent of the amount so determined.\nThe requirement described in this clause is satisfied with respect to any qualified facility if the taxpayer certifies to the Secretary (at such time, and in such form and manner, as the Secretary may prescribe) that any steel, iron, or manufactured product which is a component of such facility (upon completion of construction) was produced in the United States (as determined under section\u202f 2 2 \u202fSo in original. Probably should be “part”.  661 of title 49, Code of Federal Regulations).\nIn the case of steel or iron, clause (i) shall be applied in a manner consistent with section 661.5 of title 49, Code of Federal Regulations.\nFor purposes of clause (i), the manufactured products which are components of a qualified facility upon completion of construction shall be deemed to have been produced in the United States if not less than the adjusted percentage (as determined under subparagraph (C)) of the total costs of all such manufactured products of such facility are attributable to manufactured products (including components) which are mined, produced, or manufactured in the United States.\nSubject to subclause (ii), for purposes of subparagraph (B)(iii), the adjusted percentage shall be 40 percent.\nFor purposes of subparagraph (B)(iii), in the case of a qualified facility which is an offshore wind facility, the adjusted percentage shall be 20 percent.\nIn any case in which the Secretary provides an exception pursuant to clause (i), the applicable percentage shall be 100 percent.\nIn the case of a qualified facility which is located in an energy community, the credit determined under subsection (a) (determined after the application of paragraphs (1) through (10), without the application of paragraph (9)) shall be increased by an amount equal to 10 percent of the amount so determined.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nThe term “closed-loop biomass” means any organic material from a plant which is planted exclusively for purposes of being used at a qualified facility to produce electricity.\nThe term “agricultural livestock waste nutrients” means agricultural livestock manure and litter, including wood shavings, straw, rice hulls, and other bedding material for the disposition of manure.\nThe term “agricultural livestock” includes bovine, swine, poultry, and sheep.\nThe term “geothermal energy” means energy derived from a geothermal deposit (within the meaning of section 613(e)(2)).\nThe term “municipal solid waste” has the meaning given the term “solid waste” under section 1004(27) of the Solid Waste Disposal Act ( 42 U.S.C. 6903 ), except that such term does not include paper which is commonly recycled and which has been segregated from other solid waste (as so defined).\nThe term “qualified emission reduction” means a reduction of at least 20 percent of the emissions of nitrogen oxide and at least 40 percent of the emissions of either sulfur dioxide or mercury released when burning the refined coal (excluding any dilution caused by materials combined or added during the production process), as compared to the emissions released when burning the feedstock coal or comparable coal predominantly available in the marketplace as of  January 1, 2003 .\nThe term “coal waste sludge” means the tar decanter sludge and related byproducts of the coking process, including such materials that have been stored in ground, in tanks and in lagoons, that have been treated as hazardous wastes under applicable Federal environmental rules absent liquefaction and processing with coal into a feedstock for the manufacture of coke.\nFor purposes of subparagraph (A), incremental hydropower production for any taxable year shall be equal to the percentage of average annual hydropower production at the facility attributable to the efficiency improvements or additions of capacity placed in service after the date of the enactment of this paragraph, determined by using the same water flow information used to determine an historic average annual hydropower production baseline for such facility. Such percentage and baseline shall be certified by the Federal Energy Regulatory Commission.\nFor purposes of clause (i), the determination of incremental hydropower production shall not be based on any operational changes at such facility not directly associated with the efficiency improvements or additions of capacity.\nFor purposes of this paragraph, the term “Indian tribe” has the meaning given such term by section 7871(c)(3)(E)(ii).\nSuch term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.\nIn the case of a facility using wind to produce electricity, the term “qualified facility” means any facility owned by the taxpayer which is originally placed in service after  December 31, 1993 , and the construction of which begins before  January 1, 2025 . Such term shall not include any facility with respect to which any qualified small wind energy property expenditure (as defined in subsection (d)(4) of section 25D) is taken into account in determining the credit under such section.\nSuch term shall include a new unit placed in service after the date of the enactment of this subparagraph in connection with a facility described in subparagraph (A)(i), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.\nSuch term shall include a new unit placed in service after the date of the enactment of this subparagraph in connection with a facility described in subparagraph (A), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.\nIn the case of any facility described in subparagraph (A), if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under subsection (a) shall be the lessee or the operator of such facility.\nIn the case of a facility using geothermal or solar energy to produce electricity, the term “qualified facility” means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of this paragraph and the construction of which begins before  January 1, 2025 . Such term shall not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.\nIn the case of a facility using small irrigation power to produce electricity, the term “qualified facility” means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of this paragraph and before  October 3, 2008 .\nIn the case of a facility producing electricity from gas derived from the biodegradation of municipal solid waste, the term “qualified facility” means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of this paragraph and the construction of which begins before  January 1, 2025 .\nIn the case of a facility (other than a facility described in paragraph (6)) which uses municipal solid waste to produce electricity, the term “qualified facility” means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of this paragraph and the construction of which begins before  January 1, 2025 . Such term shall include a new unit placed in service in connection with a facility placed in service on or before the date of the enactment of this paragraph, but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.\nIn the case of a qualified facility described in subparagraph (A), the 10-year period referred to in subsection (a) shall be treated as beginning on the date the efficiency improvements or additions to capacity are placed in service.\nFor purposes of subparagraph (A)(i), an efficiency improvement or addition to capacity shall be treated as placed in service before  January 1, 2025 , if the construction of such improvement or addition begins before such date.\nThe term “Indian coal production facility” means a facility that produces Indian coal.\nThe Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor and the reference price for such calendar year in accordance with this paragraph.\nThe term “inflation adjustment factor” means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 1992. The term “GDP implicit price deflator” means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the Department of Commerce before March 15 of the calendar year.\nThe term “reference price” means, with respect to a calendar year, the Secretary’s determination of the annual average contract price per kilowatt hour of electricity generated from the same qualified energy resource and sold in the previous year in the United States. For purposes of the preceding sentence, only contracts entered into after  December 31, 1989 , shall be taken into account.\nIn the case of a facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility.\nPersons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling electricity to an unrelated person if such electricity is sold to such a person by another member of such group.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nRules similar to the rules of the subsection (b)(3) and paragraphs (1) through (5) of this subsection shall apply for purposes of determining the amount of any increase under this paragraph.\nSubparagraph (A) shall be applied by substituting “$2 per barrel-of-oil equivalent” for “$4.375 per ton”.\nIn lieu of the 10-year period referred to in clauses (i) and (ii)(II) of subparagraph (A), the credit period shall be the period beginning on the later of the date such facility was originally placed in service, the date the modifications described in clause (iii) were placed in service, or  October 1, 2008 , and ending on the later of  December 31, 2009 , or the date which is 1 year after the date such facility or the modifications described in clause (iii) were placed in service.\nSubparagraph (B) shall not apply.\nThe modifications described in this clause are modifications to an existing facility which allow such facility to produce steel industry fuel.\nFor purposes of this subparagraph, a barrel-of-oil equivalent is the amount of steel industry fuel that has a Btu content of 5,800,000 Btus.\nThe term “qualified facility” shall not include any facility which produces electricity from gas derived from the biodegradation of municipal solid waste if such biodegradation occurred in a facility (within the meaning of section 45K) the production from which is allowed as a credit under section 45K for the taxable year or any prior taxable year.\nThe term “refined coal production facility” shall not include any facility the production from which is allowed as a credit under section 45K for the taxable year or any prior taxable year (or under section 29, 3 3 \u202fSee References in Text note below.  as in effect on the day before the date of enactment of the Energy Tax Incentives Act of 2005, for any prior taxable year).\nIn the case of a facility producing steel industry fuel, clause (i) shall not apply to so much of the refined coal produced at such facility as is steel industry fuel.\nIn the case of any calendar year after 2006, each of the dollar amounts under clause (i) shall be equal to the product of such dollar amount and the inflation adjustment factor determined under paragraph (2)(B) for the calendar year, except that such paragraph shall be applied by substituting “2005” for “1992”.\nRules similar to the rules of the subsection (b)(3) and paragraphs (1), (3), (4), and (5) of this subsection shall apply for purposes of determining the amount of any increase under this paragraph.\nIn the case of an eligible cooperative organization, any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during the taxable year.\nAn election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).\nFor purposes of this section the term “eligible cooperative” means a cooperative organization described in section 1381(a) which is owned more than 50 percent by agricultural producers or by entities owned by agricultural producers. For this purpose an entity owned by an agricultural producer is one that is more than 50 percent owned by agricultural producers.\nThe term “qualified facility” shall not include any facility which produces electricity from gas produced by qualified biogas property (as defined in section 48(c)(7)) if a credit is allowed under section 48 with respect to such property for the taxable year or any prior taxable year.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.\nThe date of the enactment of this paragraph, the date of the enactment of this clause, the date of the enactment of this subclause, and the date of the enactment of the American Jobs Creation Act of 2004, referred to in subsecs. (b)(4)(B)(ii) and (d)(2)(C)(i), (3)(A)(i), (4) to (8), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nThe date of the enactment of this clause and the date of the enactment of this paragraph, referred to in subsecs. (b)(4)(B)(iii), (c)(8), and (d)(9)(A), are the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nThe Federal Power Act, referred to in subsec. (c)(8)(C), is  act June 10, 1920, ch. 285 ,  41 Stat. 1063 . Part I of the Act is classified generally to subchapter I (§\u202f791a et seq.) of chapter 12 of Title 16, Conservation. For complete classification of this Act to the Code, see  section 791a of Title 16  and Tables.\nThe date of the enactment of this subparagraph and the date of the enactment of this paragraph, referred to in subsec. (d)(2)(B), (3)(B), (11), are the date of enactment of  Pub. L. 110–343 , which was approved  Oct. 3, 2008 .\nSection 29, referred to in subsec. (e)(9)(B)(i), was redesignated  section 45K of this title  by  Pub. L. 109–58, title XIII, §\u202f1322(a)(1) ,  Aug. 8, 2005 ,  119 Stat. 1011 .\nThe date of enactment of the Energy Tax Incentives Act of 2005, referred to in subsec. (e)(9)(B)(i), is the date of enactment of title XIII of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nA prior section 45 was renumbered  section 37 of this title .\n2022—Subsec. (a)(1).  Pub. L. 117–169, §\u202f13101(b)(1) , substituted “0.3 cents” for “1.5 cents”.\nSubsec. (b)(2).  Pub. L. 117–169, §\u202f13101(i)(1) , substituted “If the 0.3 cent amount as increased under the preceding sentence is not a multiple of 0.05 cent, such amount shall be rounded to the nearest multiple of 0.05 cent. In any other case, if an amount as increased under this paragraph is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.” for “If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.”\nPub. L. 117–169, §\u202f13101(b)(2) , substituted “The 0.3 cent” for “The 1.5 cent”.\nSubsec. (b)(3).  Pub. L. 117–169, §\u202f13101(h) , amended par. (3) generally. Prior to amendment, par. (3) related to credit reduced for grants, tax-exempt bonds, subsidized energy financing, and other credits.\nSubsec. (b)(4)(A).  Pub. L. 117–169, §\u202f13101(j)(1) , substituted “or (7)” for “(7), (9), or (11)”.\nPub. L. 117–169, §\u202f13101(i)(2) , substituted “last two sentences” for “last sentence”.\nSubsec. (b)(5).  Pub. L. 117–169, §\u202f13101(e)(2)(A) , inserted “which is placed in service before  January 1, 2022 ” after “using wind to produce electricity” in introductory provisions.\nSubsec. (b)(6) to (8).  Pub. L. 117–169, §\u202f13101(f) , added pars. (6) to (8).\nSubsec. (b)(9).  Pub. L. 117–169, §\u202f13101(g)(2) , added par. (9). Former par. (9) (added by section 13101(f), see below) redesignated (12).\nPub. L. 117–169, §\u202f13101(f) , added par. (9), which was subsequently redesignated (12).\nSubsec. (b)(10), (11).  Pub. L. 117–169, §\u202f13101(g)(2) , added pars. (10) and (11).\nSubsec. (b)(12).  Pub. L. 117–169, §\u202f13101(g)(1) , redesignated par. (9) as (12).\nSubsec. (c)(10)(A)(v).  Pub. L. 117–169, §\u202f13101(j)(2)(A) , added cl. (v). Conforming amendment striking “or” in cl. (iii) of subsec. (c)(10)(A) was executed by striking the “or” at the end of the clause, to reflect the probable intent of Congress.\nSubsec. (d)(1).  Pub. L. 117–169, §\u202f13101(e)(1) , substituted “ January 1, 2025 ” for “ January 1, 2022 ”.\nSubsec. (d)(2)(A).  Pub. L. 117–169, §\u202f13101(a)(1) , substituted “ January 1, 2025 ” for “ January 1, 2022 ” wherever appearing.\nSubsec. (d)(3)(A)(i)(I), (ii).  Pub. L. 117–169, §\u202f13101(a)(2) , substituted “ January 1, 2025 ” for “ January 1, 2022 ”.\nSubsec. (d)(4).  Pub. L. 117–169, §\u202f13101(c) , substituted “and the construction of which begins before  January 1, 2025 ” for “and which—\n“(A) in the case of a facility using solar energy, is placed in service before  January 1, 2006 , or\n“(B) in the case of a facility using geothermal energy, the construction of which begins before  January 1, 2022 ”.\nConcluding provisions following former subpar. (B) were joined with the preceding paragraph to reflect the probable intent of Congress.\nSubsec. (d)(6), (7).  Pub. L. 117–169, §\u202f13101(a)(3) , (4), substituted “ January 1, 2025 ” for “ January 1, 2022 ”.\nSubsec. (d)(9)(A)(i), (ii), (C).  Pub. L. 117–169, §\u202f13101(a)(5) , substituted “ January 1, 2025 ” for “ January 1, 2022 ”.\nSubsec. (d)(11)(A).  Pub. L. 117–169, §\u202f13101(j)(2)(B) , substituted “25” for “150”.\nSubsec. (d)(11)(B).  Pub. L. 117–169, §\u202f13101(a)(6) , substituted “ January 1, 2025 ” for “ January 1, 2022 ”.\nSubsec. (e)(12).  Pub. L. 117–169, §\u202f13102(f)(4) , added par. (12).\nSubsec. (e)(13).  Pub. L. 117–169, §\u202f13204(b)(1) , added par. (13).\n2020—Subsec. (b)(5)(D).  Pub. L. 116–260, §\u202f131(c)(1) , substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\nSubsec. (d)(1), (2)(A), (3)(A), (4)(B), (6), (7), (9), (11)(B).  Pub. L. 116–260, §\u202f131(a) , substituted “ January 1, 2022 ” for “ January 1, 2021 ” wherever appearing.\nSubsec. (e)(10)(A).  Pub. L. 116–260, §\u202f145(a) , substituted “16-year period” for “15-year period” in two places.\n2019—Subsec. (b)(5)(D).  Pub. L. 116–94, §\u202f127(c)(2)(A) , added subpar. (D).\nSubsec. (d)(1).  Pub. L. 116–94, §\u202f127(c)(1) , substituted “ January 1, 2021 ” for “ January 1, 2020 ”.\nSubsec. (d)(2)(A), (3)(A), (4)(B), (6), (7), (9), (11)(B).  Pub. L. 116–94, §\u202f127(a) , substituted “ January 1, 2021 ” for “ January 1, 2018 ” wherever appearing.\nSubsec. (e)(10)(A).  Pub. L. 116–94, §\u202f128(a) , substituted “15-year period” for “12-year period” in two places.\n2018—Subsec. (c)(6).  Pub. L. 115–141, §\u202f401(a)(14) , substituted “section 1004(27)” for “section 2(27)”.\nSubsec. (c)(7)(A)(i)(II).  Pub. L. 115–141, §\u202f401(a)(15) , substituted “for the purpose” for “for purpose”.\nSubsec. (c)(7)(A)(i)(III).  Pub. L. 115–141, §\u202f401(a)(16) , substituted “,\u2000or” for period at end.\nSubsec. (d).  Pub. L. 115–123, §\u202f40409(a) , substituted “ January 1, 2018 ” for “ January 1, 2017 ” wherever appearing.\nSubsec. (e)(10)(A)(i), (ii)(II).  Pub. L. 115–123, §\u202f40408(a) , substituted “12-year period” for “11-year period”.\n2015—Subsec. (b)(5).  Pub. L. 114–113, §\u202f301(a)(2) , added par. (5).\nSubsec. (d)(1).  Pub. L. 114–113, §\u202f301(a)(1) , substituted “ January 1, 2020 ” for “ January 1, 2015 ”.\nSubsec. (d)(2)(A).  Pub. L. 114–113, §\u202f187(a)(1) , substituted “ January 1, 2017 ” for “ January 1, 2015 ” wherever appearing.\nSubsec. (d)(3)(A)(i)(I), (ii).  Pub. L. 114–113, §\u202f187(a)(2) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (d)(4)(B).  Pub. L. 114–113, §\u202f187(a)(3) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (d)(6).  Pub. L. 114–113, §\u202f187(a)(4) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (d)(7).  Pub. L. 114–113, §\u202f187(a)(5) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (d)(9)(A)(i), (ii), (C).  Pub. L. 114–113, §\u202f187(a)(6) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (d)(10).  Pub. L. 114–113, §\u202f186(b) , amended par. (10) generally. Prior to amendment, text read as follows: “In the case of a facility that produces Indian coal, the term ‘Indian coal production facility’ means a facility which is placed in service before  January 1, 2009 .”\nSubsec. (d)(11)(B).  Pub. L. 114–113, §\u202f187(a)(7) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (e)(10)(A)(i).  Pub. L. 114–113, §\u202f186(a) , substituted “11-year period” for “9-year period”.\nSubsec. (e)(10)(A)(ii)(I).  Pub. L. 114–113, §\u202f186(c) , inserted “(either directly by the taxpayer or after sale or transfer to one or more related persons)” after “unrelated person”.\nSubsec. (e)(10)(A)(ii)(II).  Pub. L. 114–113, §\u202f186(a) , substituted “11-year period” for “9-year period”.\nSubsec. (e)(10)(D).  Pub. L. 114–113, §\u202f186(d)(2) , struck out subpar. (D). Text read as follows: “The increase in the credit determined under subsection (a) by reason of this paragraph with respect to any facility shall be treated as a specified credit for purposes of section 38(c)(4)(A) during the 4-year period beginning on the later of  January 1, 2006 , or the date on which such facility is placed in service by the taxpayer.”\n2014—Subsec. (b)(2).  Pub. L. 113–295, §\u202f210(g)(1) , substituted “$2 amount” for “$3 amount”.\nSubsec. (d).  Pub. L. 113–295, §\u202f155(a) , substituted “ January 1, 2015 ” for “ January 1, 2014 ” wherever appearing.\nSubsec. (e)(10)(A)(i), (ii)(II).  Pub. L. 113–295, §\u202f154(a) , substituted “9-year period” for “8-year period”.\n2013—Subsec. (c)(6).  Pub. L. 112–240, §\u202f407(a)(2) , inserted “,\u2000except that such term does not include paper which is commonly recycled and which has been segregated from other solid waste (as so defined)” after “( 42 U.S.C. 6903 )”.\nSubsec. (d)(1).  Pub. L. 112–240, §\u202f407(a)(3)(A)(i) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nPub. L. 112–240, §\u202f407(a)(1) , substituted “ January 1, 2014 ” for “ January 1, 2013 ”.\nSubsec. (d)(2)(A).  Pub. L. 112–240, §\u202f407(a)(3)(B) , inserted concluding provisions.\nSubsec. (d)(2)(A)(i).  Pub. L. 112–240, §\u202f407(a)(3)(A)(ii) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nSubsec. (d)(3)(A)(i)(I).  Pub. L. 112–240, §\u202f407(a)(3)(A)(iii) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nSubsec. (d)(3)(A)(ii).  Pub. L. 112–240, §\u202f407(a)(3)(C) , substituted “the construction of which begins” for “is originally placed in service”.\nSubsec. (d)(4).  Pub. L. 112–240, §\u202f407(a)(3)(D)(i) , substituted “and which—”, subpars. (A) and (B), and concluding provisions for “and before  January 1, 2014  ( January 1, 2006 , in the case of a facility using solar energy). Such term shall not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.”\nSubsec. (d)(6).  Pub. L. 112–240, §\u202f407(a)(3)(A)(iv) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nSubsec. (d)(7).  Pub. L. 112–240, §\u202f407(a)(3)(A)(v) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nSubsec. (d)(9).  Pub. L. 112–240, §\u202f407(a)(3)(E) , designated introductory provisions as subpar. (A) and inserted heading, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), realigned margins, added subpar. (C), and redesignated former subpar. (C) as (B).\nSubsec. (d)(9)(B).  Pub. L. 112–240, §\u202f407(a)(3)(A)(vi) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nSubsec. (d)(11)(B).  Pub. L. 112–240, §\u202f407(a)(3)(A)(vii) , substituted “the construction of which begins before  January 1, 2014 ” for “before  January 1, 2014 ”.\nSubsec. (e)(10)(A)(i), (ii)(II).  Pub. L. 112–240, §\u202f406(a) , substituted “8-year period” for “7-year period”.\n2010—Subsec. (d)(8)(B).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\n2009—Subsec. (d)(1).  Pub. L. 111–5, §\u202f1101(a)(1) , substituted “2013” for “2010”.\nSubsec. (d)(2)(A)(i), (ii), (3)(A)(i)(I), (ii), (4).  Pub. L. 111–5, §\u202f1101(a)(2) , substituted “2014” for “2011”.\nSubsec. (d)(5).  Pub. L. 111–5, §\u202f1101(b) , substituted “and before  October 3, 2008 .” for “and before the date of the enactment of paragraph (11).”\nSubsec. (d)(6), (7), (9)(A), (B).  Pub. L. 111–5, §\u202f1101(a)(2) , substituted “2014” for “2011”.\nSubsec. (d)(11)(B).  Pub. L. 111–5, §\u202f1101(a)(3) , substituted “2014” for “2012”.\n2008—Subsec. (b)(2).  Pub. L. 110–343, §\u202f108(b)(2) , inserted “the $3 amount in subsection (e)(8)(D)(ii)(I),” after “subsection (e)(8)(A),”.\nSubsec. (b)(4)(A).  Pub. L. 110–343, §\u202f102(d) , substituted “(9), or (11)” for “or (9)”.\nSubsec. (c)(1)(I).  Pub. L. 110–343, §\u202f102(a) , added subpar. (I).\nSubsec. (c)(7)(A).  Pub. L. 110–343, §\u202f108(a)(1) , reenacted heading without change and amended text generally. Prior to amendment, subpar. (A) defined “refined coal”.\nSubsec. (c)(7)(A)(i).  Pub. L. 110–343, §\u202f101(b)(1) , amended subsec. (c)(7)(A)(i) as amended by  Pub. L. 110–348, §\u202f108(a)(1) , by inserting “and” at end of subcl. (II), substituting period for “,\u2000and” at end of subcl. (III), and striking out subcl. (IV) which read as follows: “is produced in such a manner as to result in an increase of at least 50 percent in the market value of the refined coal (excluding any increase caused by materials combined or added during the production process), as compared to the value of the feedstock coal, or”.\nSubsec. (c)(7)(B).  Pub. L. 110–343, §\u202f101(b)(2) , inserted “at least 40 percent of the emissions of” after “nitrogen oxide and”.\nSubsec. (c)(7)(C).  Pub. L. 110–343, §\u202f108(a)(2) , added subpar. (C).\nSubsec. (c)(8)(C).  Pub. L. 110–343, §\u202f101(e) , reenacted heading without change and amended text generally. Prior to amendment, subpar. (C) described a nonhydroelectric dam facility for purposes of subpar. (A).\nSubsec. (c)(10).  Pub. L. 110–343, §\u202f102(b) , added par. (10).\nSubsec. (d)(1).  Pub. L. 110–343, §\u202f106(c)(3)(B) , inserted at end “Such term shall not include any facility with respect to which any qualified small wind energy property expenditure (as defined in subsection (d)(4) of section 25D) is taken into account in determining the credit under such section.”\nPub. L. 110–343, §\u202f101(a)(1) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\nSubsec. (d)(2)(A).  Pub. L. 110–343, §\u202f101(a)(2)(A) , substituted “ January 1, 2011 ” for “ January 1, 2009 ” in cls. (i) and (ii).\nSubsec. (d)(2)(B), (C).  Pub. L. 110–343, §\u202f101(d)(2) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (d)(3)(A).  Pub. L. 110–343, §\u202f101(a)(2)(B) , substituted “ January 1, 2011 ” for “ January 1, 2009 ” in cls. (i)(I) and (ii).\nSubsec. (d)(3)(B), (C).  Pub. L. 110–343, §\u202f101(d)(1) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (d)(4).  Pub. L. 110–343, §\u202f101(a)(2)(C) , substituted “ January 1, 2011 ” for “ January 1, 2009 ”.\nSubsec. (d)(5).  Pub. L. 110–343, §\u202f102(e) , which directed amendment of par. (5) by substituting “the date of the enactment of paragraph (11)” for “ January 1, 2012 ”, was executed by making the substitution for “ January 1, 2011 ” to reflect the probable intent of Congress. See below.\nPub. L. 110–343, §\u202f101(a)(2)(D) , substituted “ January 1, 2011 ” for “ January 1, 2009 ”.\nSubsec. (d)(6).  Pub. L. 110–343, §\u202f101(a)(2)(E) , substituted “ January 1, 2011 ” for “ January 1, 2009 ”.\nSubsec. (d)(7).  Pub. L. 110–343, §\u202f101(c) , struck out “combustion” before “facilities” in heading and substituted “facility (other than a facility described in paragraph (6)) which uses” for “facility which burns”.\nPub. L. 110–343, §\u202f101(a)(2)(F) , substituted “ January 1, 2011 ” for “ January 1, 2009 ”.\nSubsec. (d)(8).  Pub. L. 110–343, §\u202f108(c) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of a facility that produces refined coal, the term ‘refined coal production facility’ means a facility which is placed in service after the date of the enactment of this paragraph and before  January 1, 2010 .”\nPub. L. 110–343, §\u202f101(a)(1) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\nSubsec. (d)(9)(A), (B).  Pub. L. 110–343, §\u202f101(a)(2)(G) , substituted “ January 1, 2011 ” for “ January 1, 2009 ”.\nSubsec. (d)(11).  Pub. L. 110–343, §\u202f102(c) , added par. (11).\nSubsec. (e)(8)(D).  Pub. L. 110–343, §\u202f108(b)(1) , added subpar. (D).\nSubsec. (e)(9)(B).  Pub. L. 110–343, §\u202f108(d)(1) , designated existing provisions as cl. (i), inserted heading, and added cl. (ii).\n2007—Subsec. (c)(3)(A)(ii).  Pub. L. 110–172, §\u202f7(b)(1) , struck out “which is segregated from other waste materials and” after “lignin material”.\nSubsec. (d)(2)(B)(i) to (iii).  Pub. L. 110–172, §\u202f7(b)(2) , inserted “and” at the end of cl. (i), redesignated cl. (iii) as (ii), and struck out former cl. (ii) which read as follows: “the amount of the credit determined under subsection (a) with respect to the facility shall be an amount equal to the amount determined without regard to this clause multiplied by the ratio of the thermal content of the closed-loop biomass used in such facility to the thermal content of all fuels used in such facility, and”.\nSubsec. (e)(7)(A)(i).  Pub. L. 110–172, §\u202f9(a) , substituted “originally placed in service” for “placed in service by the taxpayer”.\n2006—Subsec. (d)(1) to (7), (9).  Pub. L. 109–432  substituted “ January 1, 2009 ” for “ January 1, 2008 ” wherever appearing.\n2005—Subsec. (b)(4)(A).  Pub. L. 109–58, §\u202f1301(c)(2) , substituted “(7), or (9)” for “or (7)”.\nSubsec. (b)(4)(B)(i).  Pub. L. 109–58, §\u202f1301(b)(1) , inserted “or clause (iii)” after “clause (ii)”.\nSubsec. (b)(4)(B)(ii).  Pub. L. 109–58, §\u202f1301(f)(1) , substituted “ January 1, 2005 ,” for “the date of the enactment of this Act”.\nSubsec. (b)(4)(B)(iii).  Pub. L. 109–58, §\u202f1301(b)(2) , added cl. (iii).\nSubsec. (c).  Pub. L. 109–58, §\u202f1301(d)(4) , substituted “Resources” for “Qualified energy resources and refined coal” in heading.\nSubsec. (c)(1)(H).  Pub. L. 109–58, §\u202f1301(c)(1) , added subpar. (H).\nSubsec. (c)(3)(A)(ii).  Pub. L. 109–135, §\u202f402(b) , substituted “lignin material” for “nonhazardous lignin waste material”.\nPub. L. 109–58, §\u202f1301(f)(2) , inserted “or any nonhazardous lignin waste material” after “cellulosic waste material”.\nSubsec. (c)(7)(A)(i).  Pub. L. 109–135, §\u202f403(t) , struck out “synthetic” after “solid”.\nSubsec. (c)(8).  Pub. L. 109–58, §\u202f1301(c)(3) , added par. (8).\nSubsec. (c)(9).  Pub. L. 109–58, §\u202f1301(d)(2) , added par. (9).\nSubsec. (d)(1) to (3).  Pub. L. 109–58, §\u202f1301(a)(1) , substituted “ January 1, 2008 ” for “ January 1, 2006 ” wherever appearing.\nSubsec. (d)(4).  Pub. L. 109–58, §\u202f1301(a)(2) , substituted “ January 1, 2008  ( January 1, 2006 , in the case of a facility using solar energy)” for “ January 1, 2006 ”.\nSubsec. (d)(5), (6).  Pub. L. 109–58, §\u202f1301(a)(1) , substituted “ January 1, 2008 ” for “ January 1, 2006 ”.\nSubsec. (d)(7).  Pub. L. 109–58, §\u202f1301(e) , inserted at end “Such term shall include a new unit placed in service in connection with a facility placed in service on or before the date of the enactment of this paragraph, but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.”\nPub. L. 109–58, §\u202f1301(a)(1) , substituted “ January 1, 2008 ” for “ January 1, 2006 ”.\nSubsec. (d)(8).  Pub. L. 109–135, §\u202f412(j)(1) , substituted “In the case of a facility that produces refined coal, the term” for “The term”.\nSubsec. (d)(9).  Pub. L. 109–58, §\u202f1301(c)(4) , added par. (9).\nSubsec. (d)(10).  Pub. L. 109–135, §\u202f412(j)(2) , substituted “In the case of a facility that produces Indian coal, the term” for “The term”.\nPub. L. 109–58, §\u202f1301(d)(3) , added par. (10).\nSubsec. (e)(6).  Pub. L. 109–58, §\u202f1301(f)(3) , struck out heading and text of par. (6). Text read as follows: “In the case of a facility using poultry waste to produce electricity and owned by a governmental unit, the person eligible for the credit under subsection (a) is the lessee or the operator of such facility.”\nSubsec. (e)(8)(C).  Pub. L. 109–58, §\u202f1301(f)(4)(B) , struck out “and (9)” after “paragraphs (1) through (5)”.\nSubsec. (e)(9).  Pub. L. 109–58, §\u202f1322(a)(3)(C)(i) , substituted “section 45K” for “section 29” wherever appearing.\nPub. L. 109–58, §\u202f1301(f)(4)(A) , reenacted heading without change and amended text of par. (9) generally. Prior to amendment, text read as follows: “The term ‘qualified facility’ shall not include any facility the production from which is allowed as a credit under section 29 for the taxable year or any prior taxable year.”\nSubsec. (e)(9)(B).  Pub. L. 109–58, §\u202f1322(a)(3)(C)(ii) , inserted “(or under section 29, as in effect on the day before the date of enactment of the Energy Tax Incentives Act of 2005, for any prior taxable year)” before period at end.\nSubsec. (e)(10).  Pub. L. 109–58, §\u202f1301(d)(1) , added par. (10).\nSubsec. (e)(11).  Pub. L. 109–58, §\u202f1302(a) , added par. (11).\n2004— Pub. L. 108–357, §\u202f710(b)(3)(B) , inserted “,\u2000etc” after “resources” in section catchline.\nSubsec. (b)(2).  Pub. L. 108–357, §\u202f710(b)(3)(C) , substituted “The 1.5 cent amount in subsection (a), the 8 cent amount in paragraph (1), the $4.375 amount in subsection (e)(8)(A), and in subsection (e)(8)(B)(i) the reference price of fuel used as a feedstock (within the meaning of subsection (c)(7)(A)) in 2002” for “The 1.5 cent amount in subsection (a) and the 8 cent amount in paragraph (1)”.\nSubsec. (b)(3).  Pub. L. 108–357, §\u202f710(f) , inserted “the lesser of ½ or” before “a fraction” in introductory provisions and “This paragraph shall not apply with respect to any facility described in subsection (d)(2)(A)(ii)” in concluding provisions.\nSubsec. (b)(4).  Pub. L. 108–357, §\u202f710(c) , added par. (4).\nSubsec. (c).  Pub. L. 108–357, §\u202f710(a) , amended heading and text of subsec. (c) generally. Prior to amendment, subsec. (c) defined “qualified energy resources”, “closed-loop biomass”, “qualified facility”, and “poultry waste” for purposes of this section.\nSubsec. (c)(3).  Pub. L. 108–311  substituted “ January 1, 2006 ” for “ January 1, 2004 ” in subpars. (A) to (C).\nSubsec. (d).  Pub. L. 108–357, §\u202f710(b)(1) , added subsec. (d). Former subsec. (d) redesignated (e).\nSubsec. (e).  Pub. L. 108–357, §\u202f710(b)(1) , redesignated subsec. (d) as (e).\nSubsec. (e)(7)(A)(i).  Pub. L. 108–357, §\u202f710(b)(3)(A) , substituted “subsection (d)(1)” for “subsection (c)(3)(A)”.\nSubsec. (e)(8).  Pub. L. 108–357, §\u202f710(b)(2) , added par. (8).\nSubsec. (e)(9).  Pub. L. 108–357, §\u202f710(d) , added par. (9).\n2002—Subsec. (c)(3).  Pub. L. 107–147  substituted “2004” for “2002” in subpars. (A) to (C).\n2000—Subsec. (d)(7)(A)(i).  Pub. L. 106–554  substituted “subsection (c)(3)(A)” for “paragraph (3)(A)”.\n1999—Subsec. (c)(1)(C).  Pub. L. 106–170, §\u202f507(b)(1) , added subpar. (C).\nSubsec. (c)(3).  Pub. L. 106–170, §\u202f507(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualified facility’ means any facility owned by the taxpayer which is originally placed in service after  December 31, 1993  ( December 31, 1992 , in the case of a facility using closed-loop biomass to produce electricity), and before  July 1, 1999 .”\nSubsec. (c)(4).  Pub. L. 106–170, §\u202f507(b)(2) , added par. (4).\nSubsec. (d)(6), (7).  Pub. L. 106–170, §\u202f507(c) , added pars. (6) and (7).\nPub. L. 117–169, title I, §\u202f13101(k) ,  Aug. 16, 2022 ,  136 Stat. 1913 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and  section 48 of this title ] shall apply to facilities placed in service after  December 31, 2021 . \n \n “(2)   Credit reduced for tax-exempt bonds .— The amendment made by subsection (h) [amending this section] shall apply to facilities the construction of which begins after the date of enactment of this Act [ Aug. 16, 2022 ]. \n \n “(3)   Domestic content, phaseout, energy communities, and hydropower .— The amendments made by subsections (g) and (j) [amending this section] shall apply to facilities placed in service after  December 31, 2022 .”\nPub. L. 117–169, title I, §\u202f13102(q) ,  Aug. 16, 2022 ,  136 Stat. 1921 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 48, 50, and 7701 of this title] shall apply to property placed in service after  December 31, 2021 . \n \n “(2)   Other property .— The amendments made by subsections (f), (g), (h), (i), (j), ( l ), (n), and ( o ) [amending this section and sections 48, 50, and 7701 of this title] shall apply to property placed in service after  December 31, 2022 . \n \n “(3)   Special rule for property financed by tax-exempt bonds .— The amendments made by subsection (m) [amending  section 48 of this title ] shall apply to property the construction of which begins after the date of enactment of this Act [ Aug. 16, 2022 ].”\nPub. L. 117–169, title I, §\u202f13204(b)(3) ,  Aug. 16, 2022 ,  136 Stat. 1940 , provided that:  “The amendments made by this subsection [amending this section and  section 45U of this title ] shall apply to electricity produced after  December 31, 2022 .”\nPub. L. 116–260, div. EE, title I, §\u202f131(d) ,  Dec. 27, 2020 ,  134 Stat. 3052 , provided that:  “The amendments made by this section [amending this section and  section 48 of this title ] shall take effect on  January 1, 2021 .”\nPub. L. 116–260, div. EE, title I, §\u202f145(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendments made by this section [amending this section] shall apply to coal produced after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f127(d) ,  Dec. 20, 2019 ,  133 Stat. 3232 , provided that:  “The amendments made by this section [amending this section and  section 48 of this title ] shall take effect on  January 1, 2018 .”\nPub. L. 116–94, div. Q, title I, §\u202f128(b) ,  Dec. 20, 2019 ,  133 Stat. 3232 , provided that:  “The amendment made by this section [amending this section] shall apply to coal produced after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40408(b) ,  Feb. 9, 2018 ,  132 Stat. 149 , provided that:  “The amendment made by this section [amending this section] shall apply to coal produced after  December 31, 2016 .”\nPub. L. 115–123, div. D, title I, §\u202f40409(c) ,  Feb. 9, 2018 ,  132 Stat. 150 , provided that:  “The amendments made by this section [amending this section and  section 48 of this title ] shall take effect on  January 1, 2017 .”\nPub. L. 114–113, div. P, title III, §\u202f301(b) ,  Dec. 18, 2015 ,  129 Stat. 3038 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2015 .”\nPub. L. 114–113, div. Q, title I, §\u202f186(e)(1) , (2),  Dec. 18, 2015 ,  129 Stat. 3074 , provided that: \n “(1)   Extension .— The amendments made by subsection (a) [amending this section] shall apply to coal produced after  December 31, 2014 . \n \n “(2)   Modifications .— The amendments made by subsections (b) and (c) [amending this section] shall apply to coal produced and sold after  December 31, 2015 , in taxable years ending after such date.”\nAmendment by  section 186(d)(2) of Pub. L. 114–113  applicable to credits determined for taxable years beginning after  Dec. 31, 2015 , see  section 186(e)(3) of Pub. L. 114–113 , set out as a note under  section 38 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f187(c) ,  Dec. 18, 2015 ,  129 Stat. 3074 , provided that:  “The amendments made by this section [amending this section and  section 48 of this title ] shall take effect on  January 1, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f154(b) ,  Dec. 19, 2014 ,  128 Stat. 4021 , provided that:  “The amendment made by this section [amending this section] shall apply to coal produced after  December 31, 2013 .”\nPub. L. 113–295, div. A, title I, §\u202f155(c) ,  Dec. 19, 2014 ,  128 Stat. 4021 , provided that:  “The amendments made by this section [amending this section and  section 48 of this title ] shall take effect on  January 1, 2014 .”\nPub. L. 113–295, div. A, title II, §\u202f210(h) ,  Dec. 19, 2014 ,  128 Stat. 4032 , provided that:  “The amendments made by this section [amending this section and sections 45K, 168, 907, 1012, and 6045 of this title and provisions set out as a note under  section 9501 of this title ] shall take effect as if included in the provisions of the Energy Improvement and Extension Act of 2008 [ Pub. L. 110–343, div. B ] to which they relate.”\nPub. L. 112–240, title IV, §\u202f406(b) ,  Jan. 2, 2013 ,  126 Stat. 2340 , provided that:  “The amendment made by this section [amending this section] shall apply to coal produced after  December 31, 2012 .”\nPub. L. 112–240, title IV, §\u202f407(d) ,  Jan. 2, 2013 ,  126 Stat. 2342 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section,  section 48 of this title , and provisions set out as a note under  section 48 of this title ] shall take effect on the date of the enactment of this Act [ Jan. 2, 2013 ]. \n \n “(2)   Modification to definition of municipal solid waste .— The amendments made by subsection (a)(2) [amending this section] shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date. \n \n “(3)   Technical corrections .— The amendments made by subsection (c) [amending  section 48 of this title  and provisions set out as a note under  section 48 of this title ] shall apply as if included in the enactment of the provisions of the American Recovery and Reinvestment Act of 2009 [ Pub. L. 111–5 ] to which they relate.”\nPub. L. 111–312, title VII, §\u202f702(b) ,  Dec. 17, 2010 ,  124 Stat. 3311 , provided that:  “The amendment made by this section [amending this section] shall apply to facilities placed in service after  December 31, 2009 .”\nPub. L. 111–5, div. B, title I, §\u202f1101(c) ,  Feb. 17, 2009 ,  123 Stat. 319 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Feb. 17, 2009 ]. \n \n “(2)   Technical amendment .— The amendment made by subsection (b) [amending this section] shall take effect as if included in section 102 of the Energy Improvement and Extension Act of 2008 [ Pub. L. 110–343 ].”\nPub. L. 110–343, div. B, title I, §\u202f101(f) ,  Oct. 3, 2008 ,  122 Stat. 3810 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to property originally placed in service after  December 31, 2008 . \n \n “(2)   Refined coal .— The amendments made by subsection (b) [amending this section] shall apply to coal produced and sold from facilities placed in service after  December 31, 2008 . \n \n “(3)   Trash facility clarification .— The amendments made by subsection (c) [amending this section] shall apply to electricity produced and sold after the date of the enactment of this Act [ Oct. 3, 2008 ]. \n \n “(4)   Expansion of biomass facilities .— The amendments made by subsection (d) [amending this section] shall apply to property placed in service after the date of the enactment of this Act.”\nPub. L. 110–343, div. B, title I, §\u202f102(f) ,  Oct. 3, 2008 ,  122 Stat. 3811 , provided that:  “The amendments made by this section [amending this section] shall apply to electricity produced and sold after the date of the enactment of this Act [ Oct. 3, 2008 ], in taxable years ending after such date.”\nAmendment by  section 106(c)(3)(B) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2007 , see  section 106(f)(1) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 23 of this title .\nPub. L. 110–343, div. B, title I, §\u202f108(e) ,  Oct. 3, 2008 ,  122 Stat. 3821 , provided that:  “The amendments made by this section [amending this section and  section 45K of this title ] shall apply to fuel produced and sold after  September 30, 2008 .”\nAmendment by  section 7(b) of Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 7(e) of Pub. L. 110–172 , set out as a note under  section 1092 of this title .\nPub. L. 110–172, §\u202f9(c) ,  Dec. 29, 2007 ,  121 Stat. 2484 , provided that:  “The amendments made by this section [amending this section and  section 856 of this title ] shall take effect as if included in the provisions of the Tax Relief Extension Act of 1999 [ Pub. L. 106–170 ] to which they relate.”\nAmendment by  section 402(b) of Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendment by  section 403(t) of Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 109–58, title XIII, §\u202f1301(g) ,  Aug. 8, 2005 ,  119 Stat. 990 , as amended by  Pub. L. 110–172, §\u202f11(a)(45) ,  Dec. 29, 2007 ,  121 Stat. 2488 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 168 of this title  and amending provisions set out as a note under this section] shall take effect on the date of the enactment of this Act [ Aug. 8, 2005 ]. \n \n “(2)   Technical amendments .— The amendments made by subsections (e) and (f) [amending this section and  section 168 of this title  and amending provisions set out as a note under this section] shall take effect as if included in the amendments made by section 710 of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ].”\nPub. L. 109–58, title XIII, §\u202f1302(c) ,  Aug. 8, 2005 ,  119 Stat. 991 , provided that:  “The amendments made by this section [amending this section and  section 55 of this title ] shall apply to taxable years of cooperative organizations ending after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nAmendment by  section 1322(a)(3)(C) of Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nPub. L. 108–357, title VII, §\u202f710(g) ,  Oct. 22, 2004 ,  118 Stat. 1557 , as amended by  Pub. L. 109–58, title XIII, §\u202f1301(f)(6) ,  Aug. 8, 2005 ,  119 Stat. 990 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 48 of this title ] shall apply to electricity produced and sold after the date of the enactment of this Act [ Oct. 22, 2004 ], in taxable years ending after such date. \n \n “(2)   Certain biomass facilities .— With respect to any facility described in section 45(d)(3)(A)(ii) of the Internal Revenue Code of 1986, as added by subsection (b)(1), which is placed in service before the date of the enactment of this Act, the amendments made by this section shall apply to electricity produced and sold after  December 31, 2004 , in taxable years ending after such date. \n \n “(3)   Credit rate and period for new facilities .— The amendments made by subsection (c) [amending this section] shall apply to electricity produced and sold after  December 31, 2004 , in taxable years ending after such date. \n \n “(4)   Nonapplication of amendments to preeffective date poultry waste facilities .— The amendments made by this section shall not apply with respect to any poultry waste facility (within the meaning of section 45(c)(3)(C), as in effect on the day before the date of the enactment of this Act) placed in service before  January 1, 2005 . \n \n “(5)   Refined coal production facilities .— Section 45(e)(8) of the Internal Revenue Code of 1986, as added by this section, shall apply to refined coal produced and sold after the date of the enactment of this Act.”\nPub. L. 108–311, title III, §\u202f313(b) ,  Oct. 4, 2004 ,  118 Stat. 1181 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to facilities placed in service after  December 31, 2003 .”\nPub. L. 107–147, title VI, §\u202f603(b) ,  Mar. 9, 2002 ,  116 Stat. 59 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to facilities placed in service after  December 31, 2001 .”\nPub. L. 106–170, title V, §\u202f507(d) ,  Dec. 17, 1999 ,  113 Stat. 1923 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 17, 1999 ].”\nSection applicable to taxable years ending after  Dec. 31, 1992 , see  section 1914(e) of Pub. L. 102–486 , set out as an Effective Date of 1992 Amendment note under  section 38 of this title .\nProvisions relating to inflation adjustment of items in this section for certain years were contained in the following:\n2023—Internal Revenue Notice 2023–51.\n2022–Internal Revenue Notice 2022–20.\n2021—Internal Revenue Notice 2021–32.\n2020—Internal Revenue Notice 2020–38.\n2019—Internal Revenue Notice 2019–41, Internal Revenue Notice 2020–9.\n2018—Internal Revenue Notice 2018–50, Internal Revenue Notice 2020–9.\n2017—Internal Revenue Notice 2017–33,Internal Revenue Notice 2018–36.\n2016—Internal Revenue Notice 2016–34.\n2015—Internal Revenue Notice 2015–32, Internal Revenue Notice 2016–11.\n2014—Internal Revenue Notice 2014–36.\n2013—Internal Revenue Notice 2013–33.\n2012—Internal Revenue Notice 2012–35.\n2011—Internal Revenue Notice 2011–40.\n2010—Internal Revenue Notice 2010–37.\n2009—Internal Revenue Notice 2009–40.\n2008—Internal Revenue Notice 2008–48.\n2007—Internal Revenue Notice 2007–40.\n2006—Internal Revenue Notice 2006–51.\n2005—Internal Revenue Notice 2005–37.\n2004—Internal Revenue Notice 2004–29.\n2003—Internal Revenue Notice 2003–29.\n2002—Internal Revenue Notice 2002–39.\n2001—Internal Revenue Notice 2001–33.\n2000—Internal Revenue Notice 2000–52.\n1999—Internal Revenue Notice 99–26.\n1998—Internal Revenue Notice 98–27.\n1997—Internal Revenue Notice 97–30.\n1996—Internal Revenue Notice 96–25.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The term “qualified wages” means any wages paid or incurred by an employer for services performed by an employee while such employee is a qualified employee.\nThe term “qualified wages” shall not include wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer if any portion of such wages is taken into account in determining the credit under section 51. If any portion of wages are taken into account under subsection (e)(1)(A) of section 51, the preceding sentence shall be applied by substituting “2-year period” for “1-year period”.\nThe term “qualified employee health insurance costs” means any amount paid or incurred by an employer for health insurance to the extent such amount is attributable to coverage provided to any employee while such employee is a qualified employee.\nNo amount paid or incurred for health insurance pursuant to a salary reduction arrangement shall be taken into account under subparagraph (A).\nThe aggregate amount of qualified wages and qualified employee health insurance costs taken into account with respect to any employee for any taxable year (and for the base period under subsection (a)(2)) shall not exceed $20,000.\nAn employee shall not be treated as a qualified employee for any taxable year of the employer if the total amount of the wages paid or incurred by such employer to such employee during such taxable year (whether or not for services within an Indian reservation) exceeds the amount determined at an annual rate of $30,000.\nThe Secretary shall adjust the $30,000 amount under paragraph (2) for years beginning after 1994 at the same time and in the same manner as under section 415(d), except that the base period taken into account for purposes of such adjustment shall be the calendar quarter beginning  October 1, 1993 .\nAn employee shall be treated as a qualified employee for any taxable year of the employer only if more than 50 percent of the wages paid or incurred by the employer to such employee during such taxable year are for services performed in a trade or business of the employer. Any determination as to whether the preceding sentence applies with respect to any employee for any taxable year shall be made without regard to subsection (e)(2).\nThe term “Indian tribe” means any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska Native village, or regional or village corporation, as defined in, or established pursuant to, the Alaska Native Claims Settlement Act ( 43 U.S.C. 1601  et seq.) which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.\nThe term “Indian reservation” has the meaning given such term by section 168(j)(6).\nIn the case of any termination of employment to which paragraph (1) applies, the carrybacks and carryovers under section 39 shall be properly adjusted.\nThe term “wages” has the same meaning given to such term in section 51.\nRules similar to the rules of section 51(k) and subsections (c), (d), and (e) of section 52 shall apply.\nAny reference in this section to a provision not contained in this title shall be treated for purposes of this section as a reference to such provision as in effect on the date of the enactment of this paragraph.\nFor any taxable year having less than 12 months, the amount determined under subsection (a)(2) shall be multiplied by a fraction, the numerator of which is the number of days in the taxable year and the denominator of which is 365.\nThis section shall not apply to taxable years beginning after  December 31, 2021 .\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nThe Alaska Native Claims Settlement Act, referred to in subsec. (c)(6), is  Pub. L. 92–203 ,  Dec. 18, 1971 ,  85 Stat. 688 , which is classified generally to chapter 33 (§\u202f1601 et seq.) of Title 43, Public Lands. For complete classification of this Act to the Code, see Short Title note set out under  section 1601 of Title 43  and Tables.\nThe date of the enactment of this paragraph, referred to in subsec. (e)(4), is the date of enactment of  Pub. L. 103–66 , which was approved  Aug. 10, 1993 .\n2020—Subsec. (f).  Pub. L. 116–260  substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (f).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (f).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (f).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (b)(1)(B).  Pub. L. 113–295, §\u202f216(a) , inserted at end “If any portion of wages are taken into account under subsection (e)(1)(A) of section 51, the preceding sentence shall be applied by substituting ‘2-year period’ for ‘1-year period’.”\nSubsec. (f).  Pub. L. 113–295, §\u202f114(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (f).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (f).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (f).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2006—Subsec. (f).  Pub. L. 109–432  substituted “2007” for “2005”.\n2004—Subsec. (c)(3).  Pub. L. 108–311, §\u202f404(b)(1) , inserted “,\u2000except that the base period taken into account for purposes of such adjustment shall be the calendar quarter beginning  October 1, 1993 ” before period at end.\nSubsec. (f).  Pub. L. 108–311, §\u202f315 , substituted “ December 31, 2005 ” for “ December 31, 2004 ”.\n2002—Subsec. (f).  Pub. L. 107–147  substituted “ December 31, 2004 ” for “ December 31, 2003 ”.\n1998—Subsec. (b)(1)(B).  Pub. L. 105–206  substituted “work opportunity credit” for “targeted jobs credit” in heading.\n1996—Subsec. (b)(1)(B).  Pub. L. 104–188 , which directed that subsec. (b)(1)(B) of this section be amended in the text by substituting “work opportunity credit” for “targeted jobs credit”, could not be executed because the words “targeted jobs credit” did not appear in the text.\nPub. L. 116–260, div. EE, title I, §\u202f135(b) ,  Dec. 27, 2020 ,  134 Stat. 3053 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f111(b) ,  Dec. 20, 2019 ,  133 Stat. 3228 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40301(b) ,  Feb. 9, 2018 ,  132 Stat. 145 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f161(b) ,  Dec. 18, 2015 ,  129 Stat. 3066 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f114(b) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 113–295, div. A, title II, §\u202f216(b) ,  Dec. 19, 2014 ,  128 Stat. 4034 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the provision of the Tax Relief and Health Care Act of 2006 [ Pub. L. 109–432 ] to which it relates.”\nPub. L. 112–240, title III, §\u202f304(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f732(b) ,  Dec. 17, 2010 ,  124 Stat. 3317 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f314(b) ,  Oct. 3, 2008 ,  122 Stat. 3872 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 109–432, div. A, title I, §\u202f111(b) ,  Dec. 20, 2006 ,  120 Stat. 2940 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 108–311, title IV, §\u202f404(f) ,  Oct. 4, 2004 ,  118 Stat. 1188 , provided that:  “The amendments made by this section [amending this section and sections 403, 408, 415, 530, and 4972 of this title] shall take effect as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 ] to which they relate.”\nAmendment by  Pub. L. 104–188  applicable to individuals who begin work for the employer after  Sept. 30, 1996 , see  section 1201(g) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nSection applicable to wages paid or incurred after  Dec. 31, 1993 , see  section 13322(f) of Pub. L. 103–66 , set out as an Effective Date of 1993 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the employer social security credit determined under this section for the taxable year is an amount equal to the excess employer social security tax paid or incurred by the taxpayer during the taxable year.\nIn applying paragraph (1), there shall be taken into account only tips received from customers in connection with the providing, delivering, or serving of food or beverages for consumption if the tipping of employees delivering or serving food or beverages by customers is customary.\nNo deduction shall be allowed under this chapter for any amount taken into account in determining the credit under this section.\nThis section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.\nSections 3(m) and 6(a)(1) of the Fair Labor Standards Act of 1938, referred to in subsec. (b)(1)(B), are classified to sections 203(m) and 206(a)(1), respectively, of Title 29, Labor.\n2007—Subsec. (b)(1)(B).  Pub. L. 110–28  inserted “as in effect on  January 1, 2007 , and” before “determined without regard to”.\n1996—Subsec. (b)(1)(A).  Pub. L. 104–188, §\u202f1112(a)(1) , inserted “(without regard to whether such tips are reported under section 6053)” after “section 3121(q)”.\nSubsec. (b)(2).  Pub. L. 104–188, §\u202f1112(b)(1) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “ Only tips received at food and beverage establishments taken into account .—In applying paragraph (1), there shall be taken into account only tips received from customers in connection with the provision of food or beverages for consumption on the premises of an establishment with respect to which the tipping of employees serving food or beverages by customers is customary.”\nPub. L. 110–28, title VIII, §\u202f8213(b) ,  May 25, 2007 ,  121 Stat. 193 , provided that:  “The amendment made by this section [amending this section] shall apply to tips received for services performed after  December 31, 2006 .”\nPub. L. 104–188, title I, §\u202f1112(a)(3) ,  Aug. 20, 1996 ,  110 Stat. 1759 , provided that:  “The amendments made by this subsection [amending this section and provisions set out as a note under  section 38 of this title ] shall take effect as if included in the amendments made by, and the provisions of, section 13443 of the Revenue Reconciliation Act of 1993 [ Pub. L. 103–66 ].”\nPub. L. 104–188, title I, §\u202f1112(b)(2) ,  Aug. 20, 1996 ,  110 Stat. 1759 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to tips received for services performed after  December 31, 1996 .”\nSection applicable with respect to taxes paid after  Dec. 31, 1993 , with respect to services performed before, on, or after such date, see  section 13443(d) of Pub. L. 103–66 , as amended, set out as an Effective Date of 1993 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the credit determined under this section for the taxable year is an amount equal to 25 percent of the qualified clinical testing expenses for the taxable year.\nExcept as otherwise provided in this paragraph, the term “qualified clinical testing expenses” means the amounts which are paid or incurred by the taxpayer during the taxable year which would be described in subsection (b) of section 41 if such subsection were applied with the modifications set forth in subparagraph (B).\nThe term “qualified clinical testing expenses” shall not include any amount to the extent such amount is funded by any grant, contract, or otherwise by another person (or any governmental entity).\nHuman clinical testing shall be taken into account under subparagraph (A) only to the extent such testing is related to the use of a drug for the rare disease or condition for which it was designated under section 526 of the Federal Food, Drug, and Cosmetic Act.\nExcept as provided in paragraph (2), any qualified clinical testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section 41 for such taxable year.\nAny qualified clinical testing expenses for any taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.\nRules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply for purposes of this section.\nThis section shall apply to any taxpayer for any taxable year only if such taxpayer elects (at such time and in such manner as the Secretary may by regulations prescribe) to have this section apply for such taxable year.\nSections 505(b), (i) and 526 of the Federal Food, Drug, and Cosmetic Act, referred to in subsecs. (b)(2)(A) and (d)(1), (2)(B), are classified to sections 355(b), (i) and 360bb, respectively, of Title 21, Food and Drugs.\nSection 351 of the Public Health Service Act, referred to in subsec. (b)(2)(A)(ii)(II), is classified to  section 262 of Title 42 , The Public Health and Welfare.\n2018—Subsec. (b)(2)(A)(ii)(II).  Pub. L. 115–141, §\u202f401(a)(17) , substituted “,\u2000and” for “;\u2000and”.\nSubsec. (d)(2).  Pub. L. 115–141, §\u202f401(d)(1)(D)(iii) , struck out subpar. (A) designation and heading, redesignated cls. (i) and (ii) of former subpar. (A) as subpars. (A) and (B), respectively, realigned margins, and struck out former subpar. (B) which related to special limitation for corporations to which former section 936 applied.\n2017—Subsec. (a).  Pub. L. 115–97  substituted “25 percent” for “50 percent”.\n2015—Subsec. (b)(1)(D).  Pub. L. 114–113  struck out subpar. (D). Text read as follows: “If section 41 is not in effect for any period, such section shall be deemed to remain in effect for such period for purposes of this paragraph.”\n2014—Subsec. (b)(1)(D).  Pub. L. 113–295  amended subpar. (D) generally. Prior to amendment, text read as follows: “For purposes of this paragraph, section 41 shall be deemed to remain in effect for periods after  June 30, 1995 , and before  July 1, 1996 , and periods after  December 31, 2013 .”\n2013—Subsec. (b)(1)(D).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (b)(1)(D).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (b)(1)(D).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2006—Subsec. (b)(1)(D).  Pub. L. 109–432  substituted “2007” for “2005”.\n2004—Subsec. (b)(1)(D).  Pub. L. 108–311  substituted “ December 31, 2005 ” for “ June 30, 2004 ”.\n1999—Subsec. (b)(1)(D).  Pub. L. 106–170  substituted “ June 30, 2004 ” for “ June 30, 1999 ”.\n1998—Subsec. (b)(1)(D).  Pub. L. 105–277  substituted “ June 30, 1999 ” for “ June 30, 1998 ”.\n1997—Subsec. (b)(1)(D).  Pub. L. 105–34, §\u202f601(b)(2) , substituted “ June 30, 1998 ” for “ May 31, 1997 ”.\nSubsec. (b)(2)(A)(ii)(II).  Pub. L. 105–115  struck out “or 507” after “505(b)”.\nSubsec. (e).  Pub. L. 105–34, §\u202f604(a) , struck out subsec. (e) which read as follows:\n“(e)  Termination .—This section shall not apply to any amount paid or incurred—\n“(1) after  December 31, 1994 , and before  July 1, 1996 , or\n“(2) after  May 31, 1997 .”\n1996— Pub. L. 104–188, §\u202f1205(a)(1) , renumbered  section 28 of this title  as this section.\nSubsec. (a).  Pub. L. 104–188, §\u202f1205(d)(1) , substituted “For purposes of section 38, the credit determined under this section for the taxable year is” for “There shall be allowed as a credit against the tax imposed by this chapter for the taxable year”.\nSubsec. (b)(1)(D).  Pub. L. 104–188, §\u202f1204(e) , inserted “,\u2000and before  July 1, 1996 , and periods after  May 31, 1997 ” after “ June 30, 1995 ”.\nSubsec. (d)(2) to (5).  Pub. L. 104–188, §\u202f1205(d)(2) , redesignated pars. (3) to (5) as (2) to (4), respectively, and struck out former par. (2) which read as follows: “ Limitation based on amount of tax .—The credit allowed by this section for any taxable year shall not exceed the excess (if any) of—\n“(A) the regular tax (reduced by the sum of the credits allowable under subpart A and section 27), over\n“(B) the tentative minimum tax for the taxable year.”\nSubsec. (e).  Pub. L. 104–188, §\u202f1205(b) , amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “ Termination .—This section shall not apply to any amount paid or incurred after  December 31, 1994 .”\n1993—Subsec. (b)(1)(D).  Pub. L. 103–66, §\u202f13111(a)(2) , substituted “ June 30, 1995 ” for “ June 30, 1992 ”.\nSubsec. (e).  Pub. L. 103–66, §\u202f13111(b) , substituted “ December 31, 1994 ” for “ June 30, 1992 ”.\n1991—Subsec. (b)(1)(D).  Pub. L. 102–227, §\u202f102(b) , substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\nSubsec. (e).  Pub. L. 102–227, §\u202f111(a) , substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990—Subsec. (b)(1)(D).  Pub. L. 101–508, §\u202f11402(b)(2) , substituted “ December 31, 1991 ” for “ December 31, 1990 ”.\nSubsec. (e).  Pub. L. 101–508, §\u202f11411 , substituted “ December 31, 1991 ” for “ December 31, 1990 ”.\n1989—Subsec. (b)(1)(D).  Pub. L. 101–239  substituted “1990” for “1989”.\n1988—Subsec. (b)(1)(D).  Pub. L. 100–647, §\u202f4008(c)(1) , substituted “1989” for “1988”.\nSubsec. (b)(2)(A)(ii)(II).  Pub. L. 100–647, §\u202f1018(q)(1) , amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “before the date on which an application with respect to such drug is approved under section 505(b) of such Act or, if the drug is a biological product, before the date on which a license for such drug is issued under section 351 of the Public Health Services Act, and”.\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f231(d)(3)(A)(i) , (iv), substituted “41” for “30” in subpars. (A), (B), and (D), and substituted “1988” for “1985” in subpar. (D).\nSubsec. (b)(2)(A)(ii)(I).  Pub. L. 99–514, §\u202f1879(b)(1)(A) , substituted “the date such drug” for “the date of such drug”.\nSubsec. (b)(2)(A)(ii)(II).  Pub. L. 99–514, §\u202f1879(b)(1)(B) , inserted “or, if the drug is a biological product, before the date on which a license for such drug is issued under section 351 of the Public Health Services Act”.\nSubsec. (c).  Pub. L. 99–514, §\u202f231(d)(3)(A)(i) , (ii), substituted “41” for “30” in pars. (1) and (2) and “41(b)” for “30(b)” in par. (2).\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1879(b)(2) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “For purposes of this section, the term ‘rare disease or condition’ means any disease or condition which occurs so infrequently in the United States that there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug. Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date such drug is designated under section 526 of the Federal Food, Drug, and Cosmetic Act.”\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f701(c)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The credit allowed by this section for any taxable year shall not exceed the taxpayer’s tax liability for the taxable year (as defined in section 26(b)), reduced by the sum of the credits allowable under subpart A and section 27.”\nSubsec. (d)(3)(B).  Pub. L. 99–514, §\u202f1275(c)(4) , struck out “934(b) or” before “936” in heading and amended text generally. Prior to amendment, text read as follows: “No credit shall be allowed under this section with respect to any clinical testing conducted by a corporation to which section 934(b) applies or to which an election under section 936 applies.”\nSubsec. (d)(4).  Pub. L. 99–514, §\u202f231(d)(3)(A)(iii) , substituted “section 41(f)” for “section 30(f)”.\nSubsec. (e).  Pub. L. 99–514, §\u202f232 , substituted “1990” for “1987”.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 44H of this title  as this section.\nSubsec. (b)(1)(A), (B), (D).  Pub. L. 98–369, §\u202f474(g)(1)(A) , substituted “section 30” for “section 44F”.\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f474(g)(1)(A) , substituted “section 30” for “section 44F”.\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f474(g)(1)(A) , (B), substituted “section 30” for “section 44F” and “section 30(b)” for “section 44F(b)”.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f612(e)(1) , substituted “section 26(b)” for “section 25(b)”.\nPub. L. 98–369, §\u202f474(g)(2) , amended par. (2) generally, substituting “shall not exceed the taxpayer’s tax liability for the taxable year (as defined in section 25(b), reduced by the sum of the credits allowable under subpart A and section 27” for “shall not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under a section of this subpart having a lower number or letter designation than this section, other than the credits allowable by sections 31, 39, and 43. For purposes of the preceding sentence, the term ‘tax imposed by this chapter’ shall not include any tax treated as not imposed by this chapter under the last sentence of section 53(a)”.\nSubsec. (d)(4).  Pub. L. 98–369, §\u202f474(g)(1)(C) , substituted “section 30(f)” for “section 44F(f)”.\nPub. L. 115–97, title I, §\u202f13401(c) ,  Dec. 22, 2017 ,  131 Stat. 2134 , provided that:  “The amendments made by this section [amending this section and  section 280C of this title ] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 114–113  applicable to amounts paid or incurred after  Dec. 31, 2014 , see  section 121(d)(1) of Pub. L. 114–113 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 113–295  applicable to amounts paid or incurred after  Dec. 31, 2013 , see  section 111(c) of Pub. L. 113–295 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 112–240  applicable to amounts paid or incurred after  Dec. 31, 2011 , see  section 301(d)(1) of Pub. L. 112–240 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 111–312  applicable to amounts paid or incurred after  Dec. 31, 2009 , see  section 731(c) of Pub. L. 111–312 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 110–343  applicable to amounts paid or incurred after  Dec. 31, 2007 , see  section 301(e)(2) of Pub. L. 110–343 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 109–432  applicable to amounts paid or incurred after  Dec. 31, 2005 , see  section 104(a)(3) of Pub. L. 109–432 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 108–311  applicable to amounts paid or incurred after  June 30, 2004 , see  section 301(b) of Pub. L. 108–311 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 106–170  applicable to amounts paid or incurred after  June 30, 1999 , see  section 502(a)(3) of Pub. L. 106–170 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 105–277  applicable to amounts paid or incurred after  June 30, 1998 , see  section 1001(c) of Pub. L. 105–277 , set out as a note under  section 41 of this title .\nAmendment by  section 601(b)(2) of Pub. L. 105–34  applicable to amounts paid or incurred after  May 31, 1997 , see  section 601(c) of Pub. L. 105–34 , set out as a note under  section 41 of this title .\nPub. L. 105–34, title VI, §\u202f604(b) ,  Aug. 5, 1997 ,  111 Stat. 863 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts paid or incurred after  May 31, 1997 .”\nAmendment by  section 1204(e) of Pub. L. 104–188  applicable to taxable years ending after  June 30, 1996 , and not to be taken into account under section 6654 or 6655 of this title in determining amount of any installment required to be paid for a taxable year beginning in 1997, see  section 1204(f) of Pub. L. 104–188 , set out as a note under  section 41 of this title .\nAmendment by section 1205(a)(1), (b), (d)(1), (2) of  Pub. L. 104–188  applicable to amounts paid or incurred in taxable years ending after  June 30, 1996 , see  section 1205(e) of Pub. L. 104–188 , set out as a note under  section 45K of this title .\nPub. L. 103–66, title XIII, §\u202f13111(c) ,  Aug. 10, 1993 ,  107 Stat. 421 , provided that:  “The amendments made by this section [amending this section and  section 41 of this title ] shall apply to taxable years ending after  June 30, 1992 .”\nPub. L. 102–227, title I, §\u202f102(c) ,  Dec. 11, 1991 ,  105 Stat. 1686 , provided that:  “The amendments made by this section [amending this section and  section 41 of this title ] shall apply to taxable years ending after  December 31, 1991 .”\nPub. L. 102–227, title I, §\u202f111(b) ,  Dec. 11, 1991 ,  105 Stat. 1689 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 1991 .”\nPub. L. 101–508, title XI, §\u202f11402(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 , provided that:  “The amendments made by this section [amending this section and  section 41 of this title  and repealing provisions set out as a note under  section 41 of this title ] shall apply to taxable years beginning after  December 31, 1989 .”\nAmendment by  section 1018(q)(1) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 4008(c)(1) of Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1988 , see  section 4008(d) of Pub. L. 100–647 , set out as a note under  section 41 of this title .\nAmendment by  section 231(d)(3)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nAmendment by  section 701(c)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 1275(c)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(b)(3) ,  Oct. 22, 1986 ,  100 Stat. 2906 , provided that:  “The amendments made by this subsection [amending this section] shall apply to amounts paid or incurred after  December 31, 1982 , in taxable years ending after such date.”\nAmendment by  section 474(g) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 612(e)(1) of Pub. L. 98–369 , applicable to interest paid or accrued after  December 31, 1984 , on indebtedness incurred after  December 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nPub. L. 97–414, §\u202f4(d) ,  Jan. 4, 1983 ,  96 Stat. 2056 , provided that:  “The amendments made by this section [enacting this section and amending sections 280C and 6096 of this title] shall apply to amounts paid or incurred after  December 31, 1982 , in taxable years ending after such date.”\nFor provisions that nothing in amendment by  section 401(d)(1)(D)(iii) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor applicability of amendment by  section 701(c)(2) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, in the case of a taxpayer who holds a qualified equity investment on a credit allowance date of such investment which occurs during the taxable year, the new markets tax credit determined under this section for such taxable year is an amount equal to the applicable percentage of the amount paid to the qualified community development entity for such investment at its original issue.\nThe maximum amount of equity investments issued by a qualified community development entity which may be designated under paragraph (1)(C) by such entity shall not exceed the portion of the limitation amount allocated under subsection (f) to such entity.\nThe requirement of paragraph (1)(B) shall be treated as met if at least 85 percent of the aggregate gross assets of the qualified community development entity are invested in qualified low-income community investments.\nThe term “qualified equity investment” includes any equity investment which would (but for paragraph (1)(A)) be a qualified equity investment in the hands of the taxpayer if such investment was a qualified equity investment in the hands of a prior holder.\nA rule similar to the rule of section 1202(c)(3) shall apply for purposes of this subsection.\nSuch term shall include any business carried on by an individual as a proprietor if such business would meet the requirements of subparagraph (A) were it incorporated.\nThe term “qualified active low-income community business” includes any trades or businesses which would qualify as a qualified active low-income community business if such trades or businesses were separately incorporated.\nThe Secretary shall prescribe regulations under which 1 or more targeted populations (within the meaning of section 103(20) of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4702(20) )) may be treated as low-income communities. Such regulations shall include procedures for determining which entities are qualified active low-income community businesses with respect to such populations.\nIn the case of an area which is not tracted for population census tracts, the equivalent county divisions (as defined by the Bureau of the Census for purposes of defining poverty areas) shall be used for purposes of determining poverty rates and median family income.\nIn the case of a population census tract located within a high migration rural county, paragraph (1)(B)(i) shall be applied by substituting “85 percent” for “80 percent”.\nFor purposes of this paragraph, the term “high migration rural county” means any county which, during the 20-year period ending with the year in which the most recent census was conducted, has a net out-migration of inhabitants from the county of at least 10 percent of the population of the county at the beginning of such period.\nIf the new markets tax credit limitation for any calendar year exceeds the aggregate amount allocated under paragraph (2) for such year, such limitation for the succeeding calendar year shall be increased by the amount of such excess. No amount may be carried under the preceding sentence to any calendar year after 2030.\nIf, at any time during the 7-year period beginning on the date of the original issue of a qualified equity investment in a qualified community development entity, there is a recapture event with respect to such investment, then the tax imposed by this chapter for the taxable year in which such event occurs shall be increased by the credit recapture amount.\nThe tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.\nAny increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.\nThe basis of any qualified equity investment shall be reduced by the amount of any credit determined under this section with respect to such investment. This subsection shall not apply for purposes of section 1202.\nSection 1044, referred to in subsec. (c)(2)(A), was repealed by  Pub. L. 115–97, title I, §\u202f13313(a) ,  Dec. 22, 2017 ,  131 Stat. 2133 .\n2020—Subsec. (f)(1)(H).  Pub. L. 116–260, §\u202f112(a) , substituted “for each of calendar years 2020 through 2025” for “2020”.\nSubsec. (f)(3).  Pub. L. 116–260, §\u202f112(b) , substituted “2030” for “2025”.\n2019—Subsec. (f)(1)(H).  Pub. L. 116–94, §\u202f141(a) , added subpar. (H).\nSubsec. (f)(3).  Pub. L. 116–94, §\u202f141(b) , substituted “2025” for “2024”.\n2018—Subsec. (f)(1)(F).  Pub. L. 115–141, §\u202f401(a)(18) , inserted “,\u2000and” at end.\nSubsec. (h).  Pub. L. 115–141, §\u202f401(d)(4)(B)(iii) , substituted “section 1202” for “sections 1202, 1400B, and 1400F”.\n2015—Subsec. (f)(1)(G).  Pub. L. 114–113, §\u202f141(a) , substituted “for each of calendar years 2010 through 2019” for “for 2010, 2011, 2012, 2013, and 2014”.\nSubsec. (f)(3).  Pub. L. 114–113, §\u202f141(b) , substituted “2024” for “2019”.\n2014—Subsec. (f)(1)(G).  Pub. L. 113–295, §\u202f115(a) , substituted “2013, and 2014” for “and 2013”.\nSubsec. (f)(3).  Pub. L. 113–295, §\u202f115(b) , substituted “2019” for “2018”.\n2013—Subsec. (f)(1)(G).  Pub. L. 112–240, §\u202f305(a) , substituted “2010, 2011, 2012, and 2013” for “2010 and 2011”.\nSubsec. (f)(3).  Pub. L. 112–240, §\u202f305(b) , substituted “2018” for “2016”.\n2010—Subsec. (f)(1)(G).  Pub. L. 111–312, §\u202f733(a) , added subpar. (G).\nSubsec. (f)(3).  Pub. L. 111–312, §\u202f733(b) , substituted “2016” for “2014”.\n2009—Subsec. (f)(1)(D).  Pub. L. 111–5, §\u202f1403(a)(2) , substituted “and 2007,” for “,\u20002007, 2008, and 2009.”\nSubsec. (f)(1)(E), (F).  Pub. L. 111–5, §\u202f1403(a)(1) , (3), added subpars. (E) and (F).\n2008—Subsec. (f)(1)(D).  Pub. L. 110–343  substituted “2008, and 2009” for “and 2008”.\n2006—Subsec. (f)(1)(D).  Pub. L. 109–432, §\u202f102(a) , substituted “,\u20002007, and 2008” for “and 2007”.\nSubsec. (i)(6).  Pub. L. 109–432, §\u202f102(b) , added par. (6).\n2004—Subsec. (e)(2).  Pub. L. 108–357, §\u202f221(a) , amended heading and text of par. (2) generally, substituting provisions relating to regulations under which 1 or more targeted populations could be treated as low-income communities for provisions authorizing Secretary to designate any area within any census tract as a low-income community if certain conditions were met.\nSubsec. (e)(4).  Pub. L. 108–357, §\u202f221(b) , added par. (4).\nSubsec. (e)(5).  Pub. L. 108–357, §\u202f223(a) , added par. (5).\nPub. L. 116–260, div. EE, title I, §\u202f112(c) ,  Dec. 27, 2020 ,  134 Stat. 3050 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f141(c) ,  Dec. 20, 2019 ,  133 Stat. 3234 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2019 .”\nPub. L. 114–113, div. Q, title I, §\u202f141(c) ,  Dec. 18, 2015 ,  129 Stat. 3056 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f115(c) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f305(c) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f733(c) ,  Dec. 17, 2010 ,  124 Stat. 3318 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after 2009.”\nPub. L. 109–432, div. A, title I, §\u202f102(c) ,  Dec. 20, 2006 ,  120 Stat. 2934 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 20, 2006 ].”\nPub. L. 108–357, title II, §\u202f221(c) ,  Oct. 22, 2004 ,  118 Stat. 1431 , provided that: \n “(1)   Targeted areas .— The amendment made by subsection (a) [amending this section] shall apply to designations made by the Secretary of the Treasury after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(2)   Tracts with low population .— The amendment made by subsection (b) [amending this section] shall apply to investments made after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title II, §\u202f223(b) ,  Oct. 22, 2004 ,  118 Stat. 1432 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendment made by section 121(a) of the Community Renewal Tax Relief Act of 2000 [ Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f121(a)] , enacting this section].”\nSection applicable to investments made after  Dec. 31, 2000 , see §\u202f1(a)(7) [title I, §\u202f121(e)] of  Pub. L. 106–554 , set out as a Effective Date of 2000 Amendment note under  section 38 of this title .\nAmendment by  section 401(d)(4)(B)(iii) of Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nFor provisions that nothing in amendment by  section 401(d)(4)(B)(iii) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1403(b) ,  Feb. 17, 2009 ,  123 Stat. 352 , provided that:  \n “The amount of the increase in the new markets tax credit limitation for calendar year 2008 by reason of the amendments made by subsection (a) [amending this section] shall be allocated in accordance with section 45D(f)(2) of the Internal Revenue Code of 1986 to qualified community development entities (as defined in section 45D(c) of such Code) which— \n “(1)  submitted an allocation application with respect to calendar year 2008, and \n \n “(2) (A)  did not receive an allocation for such calendar year, or \n \n “(B)  received an allocation for such calendar year in an amount less than the amount requested in the allocation application.”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f121(f)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–610, provided that:  \n “Not later than 120 days after the date of the enactment of this Act [ Dec. 21, 2000 ], the Secretary of the Treasury or the Secretary’s delegate shall issue guidance which specifies— \n “(1)  how entities shall apply for an allocation under section 45D(f)(2) of the Internal Revenue Code of 1986, as added by this section; \n \n “(2)  the competitive procedure through which such allocations are made; and \n \n “(3)  the actions that such Secretary or delegate shall take to ensure that such allocations are properly made to appropriate entities.”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f121(g)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–610, provided that:  “Not later than January 31 of 2004, 2007, and 2010, the Comptroller General of the United States shall, pursuant to an audit of the new markets tax credit program established under section 45D of the Internal Revenue Code of 1986 (as added by subsection (a)), report to Congress on such program, including all qualified community development entities that receive an allocation under the new markets credit under such section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, in the case of an eligible employer, the small employer pension plan startup cost credit determined under this section for any taxable year is an amount equal to 50 percent of the qualified startup costs paid or incurred by the taxpayer during the taxable year.\nThe term “eligible employer” has the meaning given such term by section 408(p)(2)(C)(i).\nSuch term shall not include an employer if, during the 3-taxable year period immediately preceding the 1st taxable year for which the credit under this section is otherwise allowable for a qualified employer plan of the employer, the employer or any member of any controlled group including the employer (or any predecessor of either) established or maintained a qualified employer plan with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are in the qualified employer plan.\nSuch term shall not include any expense in connection with a plan that does not have at least 1 employee eligible to participate who is not a highly compensated employee.\nThe term “eligible employer plan” means a qualified employer plan within the meaning of section 4972(d).\nAll persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or ( o ) of section 414, shall be treated as one person. All eligible employer plans shall be treated as 1 eligible employer plan.\nThis section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.\nIn the case of an employer which would be an eligible employer under subsection (c) if section 408(p)(2)(C)(i) was applied by substituting “50 employees” for “100 employees”, subsection (a) shall be applied by substituting “100 percent” for “50 percent”.\nIn the case of an eligible employer, the credit allowed for the taxable year under subsection (a) (determined without regard to this subsection) shall be increased by an amount equal to the applicable percentage of employer contributions (other than any elective deferrals (as defined in section 402(g)(3)) by the employer to an eligible employer plan (other than a defined benefit plan (as defined in section 414(j))).\nThe amount determined under paragraph (1) (before the application of subparagraph (B)) with respect to any employee of the employer shall not exceed $1,000.\nNo contributions with respect to any employee who receives wages from the employer for the taxable year in excess of $100,000 may be taken into account for such taxable year under subparagraph (A).\nFor purposes of the preceding sentence, the term “wages” has the meaning given such term by section 3121(a).\nFor purposes of this section, the applicable percentage for the taxable year during which the eligible employer plan is established with respect to the eligible employer shall be 100 percent, and for taxable years thereafter shall be determined under the following table: \n \n \n \n \n \n \n In the case of the following taxable year beginning after the taxable year during which plan is established with respect to the eligible employer: The applicable percentage shall be: \n \n \n 1st 100% \n 2nd 75% \n 3rd 50% \n 4th 25% \n Any taxable year thereafter 0%\nFor purposes of this subsection, whether an employer is an eligible employer and the number of employees of an employer shall be determined under the rules of subsection (c), except that paragraph (2) thereof shall only apply to the taxable year during which the eligible employer plan to which this section applies is established with respect to the eligible employer.\n2022—Subsec. (d)(3)(A).  Pub. L. 117–328, §\u202f111(a) , substituted “effective with respect to the eligible employer” for “effective”.\nSubsec. (e)(2).  Pub. L. 117–328, §\u202f102(c) , amended par. (2) generally. Prior to amendment, text read as follows: “No deduction shall be allowed for that portion of the qualified startup costs paid or incurred for the taxable year which is equal to the credit determined under subsection (a).”\nSubsec. (e)(4).  Pub. L. 117–328, §\u202f102(a) , added par. (4).\nSubsec. (f).  Pub. L. 117–328, §\u202f102(b) , added subsec. (f).\n2019—Subsec. (b)(1).  Pub. L. 116–94  amended par. (1) generally. Prior to amendment, par. (1) read as follows: “$500 for the first credit year and each of the 2 taxable years immediately following the first credit year, and”.\n2002—Subsec. (e)(1).  Pub. L. 107–147  substituted “subsection (m)” for “subsection (n)”.\nPub. L. 117–328, div. T, title I, §\u202f102(d) ,  Dec. 29, 2022 ,  136 Stat. 5278 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2022 .”\nPub. L. 117–328, div. T, title I, §\u202f111(b) ,  Dec. 29, 2022 ,  136 Stat. 5293 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the enactment of section 104 of the Setting Every Community Up for Retirement Enhancement Act of 2019 [div. O of  Pub. L. 116–94 , see Effective Date of 2019 Amendment note below].”\nPub. L. 116–94, div. O, title I, §\u202f104(b) ,  Dec. 20, 2019 ,  133 Stat. 3147 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2019 .”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nSection applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 2001 , with respect to qualified employer plans first effective after such date, see  section 619(d) of Pub. L. 107–16 , as amended, set out as an Effective Date of 2001 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The credit allowable under subsection (a) for any taxable year shall not exceed $150,000.\nThe term “qualified child care expenditures” shall not include expenses in excess of the fair market value of such care.\nThe term “qualified child care resource and referral expenditure” means any amount paid or incurred under a contract to provide child care resource and referral services to an employee of the taxpayer.\nThe services shall not be treated as qualified unless the provision of such services (or the eligibility to use such services) does not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)).\nFor purposes of this subsection, the applicable recapture percentage shall be determined from the following table: \n \n \n \n \n \n \n \u2001If the recapture event occurs in: The applicable recapture percentage is: \n \n \n Years 1–3 100\u202f\u202f \n Year 4 85\u202f\u202f \n Year 5 70\u202f\u202f \n Year 6 55\u202f\u202f \n Year 7 40\u202f\u202f \n Year 8 25\u202f\u202f \n Years 9 and 10 10\u202f\u202f \n Years 11 and thereafter 0.\nFor purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer.\nThe cessation of the operation of the facility as a qualified child care facility.\nExcept as provided in clause (ii), the disposition of a taxpayer’s interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable.\nClause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership).\nThe tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.\nAny increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.\nThe increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.\nAll persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nIn the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary.\nIf a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined.\nIf, during any taxable year, there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph (A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term “recapture amount” means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d).\nNo deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.\n2002—Subsec. (d)(4)(B).  Pub. L. 107–147  substituted “this chapter or for purposes of section 55” for “subpart A, B, or D of this part”.\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nSection applicable to taxable years beginning after  Dec. 31, 2001 , see  section 205(c) of Pub. L. 107–16 , set out as an Effective Date of 2001 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the railroad track maintenance credit determined under this section for the taxable year is an amount equal to 40 percent (50 percent in the case of any taxable year beginning before  January 1, 2023 ) of the qualified railroad track maintenance expenditures paid or incurred by an eligible taxpayer during the taxable year.\nFor purposes of this section, the term “qualified railroad track maintenance expenditures” means gross expenditures (whether or not otherwise chargeable to capital account) for maintaining railroad track (including roadbed, bridges, and related track structures) owned or leased as of  January 1, 2015 , by a Class II or Class III railroad (determined without regard to any consideration for such expenditures given by the Class II or Class III railroad which made the assignment of such track).\nFor purposes of this section, the terms “Class II railroad” and “Class III railroad” have the respective meanings given such terms by the Surface Transportation Board.\nRules similar to the rules of paragraph (1) of section 41(f) shall apply for purposes of this section.\nFor purposes of this subtitle, if a credit is allowed under this section with respect to any railroad track, the basis of such track shall be reduced by the amount of the credit so allowed.\n2020—Subsec. (a).  Pub. L. 116–260, §\u202f105(b) , substituted “40 percent (50 percent in the case of any taxable year beginning before  January 1, 2023 )” for “50 percent”.\nSubsec. (f).  Pub. L. 116–260, §\u202f105(a) , struck out subsec. (f). Text read as follows: “This section shall apply to qualified railroad track maintenance expenditures paid or incurred during taxable years beginning after  December 31, 2004 , and before  January 1, 2023 .”\n2019—Subsec. (f).  Pub. L. 116–94  substituted “ January 1, 2023 ” for “ January 1, 2018 ”.\n2018—Subsec. (f).  Pub. L. 115–123  substituted “ January 1, 2018 ” for “ January 1, 2017 ”.\n2015—Subsec. (d).  Pub. L. 114–113, §\u202f162(b) , substituted “ January 1, 2015 ” for “ January 1, 2005 ”.\nSubsec. (f).  Pub. L. 114–113, §\u202f162(a) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\n2014—Subsec. (f).  Pub. L. 113–295  substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\n2013—Subsec. (f).  Pub. L. 112–240  substituted “ January 1, 2014 ” for “ January 1, 2012 ”.\n2010—Subsec. (f).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\n2008—Subsec. (f).  Pub. L. 110–343  substituted “ January 1, 2010 ” for “ January 1, 2008 ”.\n2006—Subsec. (d).  Pub. L. 109–432  inserted “gross” after “means” and “(determined without regard to any consideration for such expenditures given by the Class II or Class III railroad which made the assignment of such track)” before period at end.\n2005—Subsec. (b).  Pub. L. 109–135, §\u202f403(f)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The credit allowed under subsection (a) for any taxable year shall not exceed the product of—\n“(1) $3,500, and\n“(2) the number of miles of railroad track owned or leased by the eligible taxpayer as of the close of the taxable year.\nA mile of railroad track may be taken into account by a person other than the owner only if such mile is assigned to such person by the owner for purposes of this subsection. Any mile which is so assigned may not be taken into account by the owner for purposes of this subsection.”\nSubsec. (c)(2).  Pub. L. 109–135, §\u202f403(f)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “any person who transports property using the rail facilities of a person described in paragraph (1) or who furnishes railroad-related property or services to such a person.”\nPub. L. 116–260, div. EE, title I, §\u202f105(c) ,  Dec. 27, 2020 ,  134 Stat. 3041 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Dec. 27, 2020 ].”\nPub. L. 116–94, div. Q, title I, §\u202f112(c) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendment made by this section [amending this section] shall apply to expenditures paid or incurred during taxable years beginning after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40302(b) ,  Feb. 9, 2018 ,  132 Stat. 145 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2016 . \n \n “(2)   Safe harbor assignments .— Assignments, including related expenditures paid or incurred, under paragraph (2) of section 45G(b) of the Internal Revenue Code of 1986 for taxable years ending after  January 1, 2017 , and before  January 1, 2018 , shall be treated as effective as of the close of such taxable year if made pursuant to a written agreement entered into no later than 90 days following the date of the enactment of this Act [ Feb. 9, 2018 ].”\nPub. L. 114–113, div. Q, title I, §\u202f162(c) ,  Dec. 18, 2015 ,  129 Stat. 3066 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2014 . \n \n “(2)   Modification .— The amendment made by subsection (b) [amending this section] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f116(b) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendment made by this section [amending this section] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f306(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending this section] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f734(b) ,  Dec. 17, 2010 ,  124 Stat. 3318 , provided that:  “The amendment made by this section [amending this section] shall apply to expenditures paid or incurred in taxable years beginning after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f316(c)(1) ,  Oct. 3, 2008 ,  122 Stat. 3872 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to expenditures paid or incurred during taxable years beginning after  December 31, 2007 .”\nPub. L. 109–432, div. A, title IV, §\u202f423(b) ,  Dec. 20, 2006 ,  120 Stat. 2973 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendment made by section 245(a) of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 2004 , see  section 245(e) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendment note under  section 38 of this title .\nPub. L. 116–94, div. Q, title I, §\u202f112(b) ,  Dec. 20, 2019 ,  133 Stat. 3228 , provided that:  “Any assignment, including related expenditures paid or incurred, under section 45G(b)(2) of the Internal Revenue Code of 1986 for a taxable year beginning on or after  January 1, 2018 , and ending before  January 1, 2020 , shall be treated as effective as of the close of such taxable year if made pursuant to a written agreement entered into no later than 90 days following the date of the enactment of this Act [ Dec. 20, 2019 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the amount of the low sulfur diesel fuel production credit determined under this section with respect to any facility of a small business refiner is an amount equal to 5 cents for each gallon of low sulfur diesel fuel produced during the taxable year by such small business refiner at such facility.\nIn the case of a small business refiner with average daily domestic refinery runs for the 1-year period ending on  December 31, 2002 , in excess of 155,000 barrels, the number of percentage points described in paragraph (1) shall be reduced (not below zero) by the product of such number (before the application of this paragraph) and the ratio of such excess to 50,000 barrels.\nThe term “qualified costs” means, with respect to any facility, those costs paid or incurred during the applicable period for compliance with the applicable EPA regulations with respect to such facility, including expenditures for the construction of new process operation units or the dismantling and reconstruction of existing process units to be used in the production of low sulfur diesel fuel, associated adjacent or offsite equipment (including tankage, catalyst, and power supply), engineering, construction period interest, and sitework.\nThe term “applicable EPA regulations” means the Highway Diesel Fuel Sulfur Control Requirements of the Environmental Protection Agency.\nThe term “applicable period” means, with respect to any facility, the period beginning on  January 1, 2003 , and ending on the earlier of the date which is 1 year after the date on which the taxpayer must comply with the applicable EPA regulations with respect to such facility or  December 31, 2009 .\nThe term “low sulfur diesel fuel” means diesel fuel with a sulfur content of 15 parts per million or less.\nFor purposes of this section and section 179B(b), in the calculation of average daily domestic refinery run or retained production, only refineries which on  April 1, 2003 , were refineries of the refiner or a related person (within the meaning of section 613A(d)(3)), shall be taken into account.\nNo credit shall be allowed unless, not later than the date which is 30 months after the first day of the first taxable year in which the low sulfur diesel fuel production credit is determined with respect to a facility, the small business refiner obtains certification from the Secretary, after consultation with the Administrator of the Environmental Protection Agency, that the taxpayer’s qualified costs with respect to such facility will result in compliance with the applicable EPA regulations.\nAn application for certification shall include relevant information regarding unit capacities and operating characteristics sufficient for the Secretary, after consultation with the Administrator of the Environmental Protection Agency, to determine that such qualified costs are necessary for compliance with the applicable EPA regulations.\nAny application shall be reviewed and notice of certification, if applicable, shall be made within 60 days of receipt of such application. In the event the Secretary does not notify the taxpayer of the results of such certification within such period, the taxpayer may presume the certification to be issued until so notified.\nIn the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons eligible to share in patronage dividends on the basis of the quantity or value of business done with or for such patrons for the taxable year.\nAn election under subparagraph (A) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.\nThe amount of the credit not apportioned to patrons pursuant to paragraph (1) shall be included in the amount determined under subsection (a) for the taxable year of the organization.\nThe amount of the credit apportioned to patrons pursuant to paragraph (1) shall be included in the amount determined under subsection (a) for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.\nNo credit shall be determined under subsection (a) for the taxable year if the taxpayer elects not to have subsection (a) apply to such taxable year.\n2018—Subsec. (d).  Pub. L. 115–141  substituted “purposes of this” for “purposes this”.\n2007—Subsec. (b)(1)(A).  Pub. L. 110–172, §\u202f7(a)(3)(A) , substituted “qualified costs” for “qualified capital costs”.\nSubsec. (c)(2).  Pub. L. 110–172, §\u202f7(a)(3)(B) , struck out “capital” before “costs” in heading.\nPub. L. 110–172, §\u202f7(a)(3)(A) , substituted “qualified costs” for “qualified capital costs”.\nSubsec. (d).  Pub. L. 110–172, §\u202f7(a)(1)(A) , redesignated subsec. (e) as (d) and struck out heading and text of former subsec. (d). Text read as follows: “For purposes of this subtitle, if a credit is determined under this section for any expenditure with respect to any property, the increase in basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so determined.”\nSubsec. (e).  Pub. L. 110–172, §\u202f7(a)(1)(A) , redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).\nSubsec. (e)(1), (2).  Pub. L. 110–172, §\u202f7(a)(3)(A) , substituted “qualified costs” for “qualified capital costs”.\nSubsec. (f).  Pub. L. 110–172, §\u202f7(a)(1)(A) , redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).\nSubsec. (g).  Pub. L. 110–172, §\u202f7(a)(2)(A) , added subsec. (g). Former subsec. (g) redesignated (f).\nAmendment by  Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 7(e) of Pub. L. 110–172 , set out as a note under  section 1092 of this title .\nSection applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 339(f) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of any taxable year beginning in a calendar year after 2005, each of the dollar amounts contained in subparagraph (A) shall be increased to an amount equal to such dollar amount multiplied by the inflation adjustment factor for such calendar year (determined under section 43(b)(3)(B) by substituting “2004” for “1990”).\nThe terms “qualified crude oil production” and “qualified natural gas production” mean domestic crude oil or natural gas which is produced from a qualified marginal well.\nCrude oil or natural gas produced during any taxable year from any well shall not be treated as qualified crude oil production or qualified natural gas production to the extent production from the well during the taxable year exceeds 1,095 barrels or barrel-of-oil equivalents (as defined in section 45K(d)(5)).\nIn the case of a short taxable year, the limitations under this paragraph shall be proportionately reduced to reflect the ratio which the number of days in such taxable year bears to 365.\nIn the case of a well which is not capable of production during each day of a taxable year, the limitations under this paragraph applicable to the well shall be proportionately reduced to reflect the ratio which the number of days of production bears to the total number of days in the taxable year.\nThe terms “crude oil”, “natural gas”, “domestic”, and “barrel” have the meanings given such terms by section 613A(e).\nIn the case of a qualified marginal well in which there is more than one owner of operating interests in the well and the crude oil or natural gas production exceeds the limitation under subsection (c)(2), qualifying crude oil production or qualifying natural gas production attributable to the taxpayer shall be determined on the basis of the ratio which taxpayer’s revenue interest in the production bears to the aggregate of the revenue interests of all operating interest owners in the production.\nAny credit under this section may be claimed only on production which is attributable to the holder of an operating interest.\nIn the case of production from a qualified marginal well which is eligible for the credit allowed under section 45K for the taxable year, no credit shall be allowable under this section unless the taxpayer elects not to claim the credit under section 45K with respect to the well.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.\n2005—Subsec. (a)(2).  Pub. L. 109–135  substituted “qualified crude oil production” for “qualified credit oil production”.\nSubsec. (b)(2)(C)(i).  Pub. L. 109–58, §\u202f1322(a)(3)(B) , substituted “section 45K(d)(2)(C)” for “section 29(d)(2)(C)”.\nSubsec. (c)(2)(A).  Pub. L. 109–58, §\u202f1322(a)(3)(D)(i) , substituted “section 45K(d)(5))” for “section 29(d)(5))”.\nSubsec. (d)(3).  Pub. L. 109–58, §\u202f1322(a)(3)(D)(ii) , substituted “section 45K” for “section 29” in two places.\nAmendment by  Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nSection applicable to production in taxable years beginning after  Dec. 31, 2004 , see  section 341(e) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendment note under  section 38 of this title .\nProvisions relating to inflation adjustment of items in this section for certain years were contained in the following:\n2023—Internal Revenue Notice 2023–58.\n2022—Internal Revenue Notice 2023–41.\n2021—Internal Revenue Notice 2022–18.\n2020—Internal Revenue Notice 2021–34.\n2019—Internal Revenue Notice 2020–21.\n2018—Internal Revenue Notice 2019–37.\n2017—Internal Revenue Notice 2018–52.\n2016—Internal Revenue Notice 2017–51.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The aggregate amount of national megawatt capacity limitation allocated by the Secretary under paragraph (3) shall not exceed 6,000 megawatts.\nThe Secretary shall allocate the national megawatt capacity limitation in such manner as the Secretary may prescribe.\nNot later than 6 months after the date of the enactment of or any amendment to this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection. Such regulations shall provide a certification process under which the Secretary, after consultation with the Secretary of Energy, shall approve and allocate the national megawatt capacity limitation.\nThe 8 cent amount in subparagraph (A) shall be adjusted by multiplying such amount by the inflation adjustment factor (as defined in section 45(e)(2)(B)) for the calendar year in which the sale occurs. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.\nFor purposes of paragraph (1), the term “advanced nuclear facility” means any nuclear facility the reactor design for which is approved after  December 31, 1993 , by the Nuclear Regulatory Commission (and such design or a substantially similar design of comparable capacity was not approved on or before such date).\nIn the case of any credit (or portion thereof) with respect to which an election is made under paragraph (1), such credit shall be taken into account in the first taxable year of the eligible project partner ending with, or after, the qualified public entity’s taxable year with respect to which the credit was determined.\nFor purposes of section 141(b)(1), any benefit derived by an eligible project partner in connection with an election under this subsection shall not be taken into account as a private business use.\nRules similar to the rules of paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for purposes of this section.\nThe date of the enactment of this section and the date of the enactment of this paragraph, referred to in subsecs. (b)(4) and (d)(1)(B), are the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nThe Rural Electrification Act of 1936, referred to in subsec. (e)(2)(A)(iii), is  act May 20, 1936, ch. 432 ,  49 Stat. 1363 , which is classified generally to chapter 31 (§\u202f901 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see  section 901 of Title 7  and Tables.\n2018—Subsec. (b)(4).  Pub. L. 115–123, §\u202f40501(a)(1) , inserted “or any amendment to” after “enactment of”.\nSubsec. (b)(5).  Pub. L. 115–123, §\u202f40501(a)(2) , added par. (5).\nSubsecs. (e), (f).  Pub. L. 115–123, §\u202f40501(b)(1) , added subsec. (e) and redesignated former subsec. (e) as (f).\n2007—Subsec. (b)(2).  Pub. L. 110–172  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The national megawatt capacity limitation shall be 6,000 megawatts.”\n2005—Subsec. (c)(2).  Pub. L. 109–135, §\u202f402(d)(1) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “Rules similar to the rules of section 45(b)(1) shall apply for purposes of this section.”\nSubsec. (e).  Pub. L. 109–135, §\u202f402(d)(2) , struck out “(2),” after “(1),”.\nPub. L. 115–123, div. D, title I, §\u202f40501(c) ,  Feb. 9, 2018 ,  132 Stat. 154 , provided that: \n “(1)   Treatment of unutilized limitation amounts .— The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [ Feb. 9, 2018 ]. \n \n “(2)   Transfer of credit by certain public entities .— The amendments made by subsection (b) [amending this section and  section 501 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act.”\nAmendment by  Pub. L. 110–172  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 6(e) of Pub. L. 110–172 , set out as a note under  section 30C of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nSection applicable to production in taxable years beginning after  Aug. 8, 2005 , see  section 1306(d) of Pub. L. 109–58 , set out as an Effective Date of 2005 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The $3 amount in subsection (a) and the $23.50 and $6 amounts in paragraph (1) shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. In the case of gas from a tight formation, the $3 amount in subsection (a) shall not be adjusted.\nThe amounts under subparagraph (A) for any taxable year shall be determined as of the close of the taxable year.\nExcept as provided in subparagraph (B), the determination of whether any gas is produced from geopressured brine, Devonian shale, coal seams, or a tight formation shall be made in accordance with section 503 of the Natural Gas Policy Act of 1978 (as in effect before the repeal of such section).\nThe Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor and the reference price for the preceding calendar year in accordance with this paragraph.\nThe term “inflation adjustment factor” means, with respect to a calendar year, a fraction the numerator of which is the GNP implicit price deflator for the calendar year and the denominator of which is the GNP implicit price deflator for calendar year 1979. The term “GNP implicit price deflator” means the first revision of the implicit price deflator for the gross national product as computed and published by the Department of Commerce.\nThe term “reference price” means with respect to a calendar year the Secretary’s estimate of the annual average wellhead price per barrel for all domestic crude oil the price of which is not subject to regulation by the United States.\nIn the case of a property or facility in which more than 1 person has an interest, except to the extent provided in regulations prescribed by the Secretary, production from the property or facility (as the case may be) shall be allocated among such persons in proportion to their respective interests in the gross sales from such property or facility.\nThe amount of the credit allowable under subsection (a) shall be determined without regard to any production attributable to a property from which gas from Devonian shale, coal seams, geopressured brine, or a tight formation was produced in marketable quantities before  January 1, 1980 .\nThe term “barrel-of-oil equivalent” with respect to any fuel means that amount of such fuel which has a Btu content of 5.8 million; except that in the case of qualified fuels described in subparagraph (C) of subsection (c)(1), the Btu content shall be determined without regard to any material from a source not described in such subparagraph.\nThe term “barrel” means 42 United States gallons.\nPersons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling qualified fuels to an unrelated person if such fuels are sold to such a person by another member of such group.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nParagraph (1) shall not apply to any facility which produces coke or coke gas unless the original use of the facility commences with the taxpayer.\nThe amount of qualified fuels sold during any taxable year which may be taken into account by reason of this subsection with respect to any facility shall not exceed an average barrel-of-oil equivalent of 4,000 barrels per day. Days before the date the facility is placed in service shall not be taken into account in determining such average.\nFor purposes of applying subsection (b)(2) to the $3 amount in subsection (a), in the case of fuels sold after 2005, subsection (d)(2)(B) shall be applied by substituting “2004” for “1979”.\nThis subsection shall not apply to any facility producing qualified fuels for which a credit was allowed under this section for the taxable year or any preceding taxable year by reason of subsection (f).\nSubsection (b)(1) shall not apply.\nNo credit shall be allowed with respect to any coke or coke gas which is produced using steel industry fuel (as defined in section 45(c)(7)) as feedstock if a credit is allowed to any taxpayer under section 45 with respect to the production of such steel industry fuel.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.\nSection 503 of the Natural Gas Policy Act of 1978 (as in effect before the repeal of such section), referred to in subsec. (c)(2)(A), was classified to  section 3413 of Title 15 , Commerce and Trade, prior to repeal by  Pub. L. 101–60, §\u202f3(b)(5) ,  July 26, 1989 ,  103 Stat. 159 , effective  Jan. 1, 1993 .\nSection 2(18) of the Natural Gas Policy Act of 1978, referred to in subsec. (c)(2)(B)(i), is classified to  section 3301(18) of Title 15 , Commerce and Trade.\nThe date of the enactment of this clause, and such date of enactment, referred to in subsec. (c)(2)(B), probably mean the date of enactment of  Pub. L. 101–508 , which amended subsec. (c)(2)(B) of this section generally, and which was approved  Nov. 5, 1990 .\n2014—Subsec. (g)(2)(E).  Pub. L. 113–295  amended subpar. (E) generally. Prior to amendment, text read as follows: “No credit shall be allowed with respect to any qualified fuel which is steel industry fuel (as defined in section 45(c)(7)) if a credit is allowed to the taxpayer for such fuel under section 45.”\n2008—Subsec. (g)(2)(E).  Pub. L. 110–343  added subpar. (E).\n2006—Subsec. (g)(1).  Pub. L. 109–432, §\u202f211(b) , inserted “(other than from petroleum based products)” after “producing coke or coke gas” in introductory provisions.\nSubsec. (g)(2)(D).  Pub. L. 109–432, §\u202f211(a) , added subpar. (D).\n2005— Pub. L. 109–58, §\u202f1322(a)(1) , renumbered  section 29 of this title  as this section.\nSubsec. (a).  Pub. L. 109–135, §\u202f402(g) , struck out “if the taxpayer elects to have this section apply,” after “For purposes of section 38,” in introductory provisions.\nPub. L. 109–58, §\u202f1322(a)(3)(E) , substituted “For purposes of section 38, if the taxpayer elects to have this section apply, the nonconventional source production credit determined under this section for the taxable year is” for “There shall be allowed as a credit against the tax imposed by this chapter for the taxable year” in introductory provisions.\nSubsec. (b)(6).  Pub. L. 109–58, §\u202f1322(a)(3)(F) , struck out heading and text of par. (6). Text read as follows: “The credit allowed by subsection (a) for any taxable year shall not exceed the excess (if any) of—\n“(A) the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and section 27, over\n“(B) the tentative minimum tax for the taxable year.”\nSubsec. (c)(2)(A).  Pub. L. 109–58, §\u202f1322(b)(1)(A) , inserted “(as in effect before the repeal of such section)” after “1978”.\nSubsecs. (e), (f).  Pub. L. 109–58, §\u202f1322(b)(1)(B) , redesignated subsecs. (f) and (g) as (e) and (f), respectively, and struck out former subsec. (e), which related to application of section with the Natural Gas Policy Act of 1978.\nSubsec. (g).  Pub. L. 109–135, §\u202f412 ( l )(1), substituted “subsection (e)” for “subsection (f)” in introductory provisions.\nPub. L. 109–58, §\u202f1322(b)(1)(B) , redesignated subsec. (h) as (g).\nSubsec. (g)(1)(A).  Pub. L. 109–58, §\u202f1322(b)(2)(A) , substituted “subsection (e)(1)(B)” for “subsection (f)(1)(B)”.\nSubsec. (g)(1)(B).  Pub. L. 109–58, §\u202f1322(b)(2)(B) , substituted “subsection (e)” for “subsection (f)”.\nSubsec. (g)(2)(C).  Pub. L. 109–135, §\u202f412 ( l )(2), substituted “subsection (f)” for “subsection (g)”.\nSubsec. (h).  Pub. L. 109–58, §\u202f1322(b)(1)(B) , redesignated subsec. (h) as (g).\nPub. L. 109–58, §\u202f1321(a) , added subsec. (h).\n1996—Subsec. (b)(6)(A).  Pub. L. 104–188, §\u202f1205(d)(3) , substituted “section 27” for “sections 27 and 28”.\nSubsec. (g)(1)(A).  Pub. L. 104–188, §\u202f1207(a) , substituted “ July 1, 1998 ” for “ January 1, 1997 ” and “ January 1, 1997 ” for “ January 1, 1996 ”.\n1992—Subsec. (g).  Pub. L. 102–486  added subsec. (g).\n1990—Subsec. (b)(3)(A)(i)(III).  Pub. L. 101–508, §\u202f11813(b)(1)(A) , substituted “section 48(a)(4)(C)” for “section 48( l )(11)(C)”.\nSubsec. (b)(4).  Pub. L. 101–508, §\u202f11813(b)(1)(B) , substituted “section 49(b) or 50(a)” for “section 47” in two places.\nSubsec. (b)(5), (6).  Pub. L. 101–508, §\u202f11501(c)(1) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (c)(1)(B) to (E).  Pub. L. 101–508, §\u202f11816(a) , inserted “and” at end of subpar. (B), substituted a period for a comma at end of subpar. (C), and struck out subpar. (D) which related to qualifying processed wood fuels, and subpar. (E) which related to steam produced from solid agricultural byproducts (not including timber byproducts).\nSubsec. (c)(2)(B).  Pub. L. 101–508, §\u202f11501(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘gas produced from a tight formation’ shall only include—\n“(i) gas the price of which is regulated by the United States, and\n“(ii) gas for which the maximum lawful price applicable under the Natural Gas Policy Act of 1978 is at least 150 percent of the then applicable price under section 103 of such Act.”\nSubsec. (c)(3).  Pub. L. 101–508, §\u202f11813(b)(1)(C) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The term ‘biomass’ means any organic material which is an alternate substance (as defined in section 48( l )(3)(B)) other than coal (including lignite) or any product of such coal.”\nSubsec. (c)(4).  Pub. L. 101–508, §\u202f11816(b)(1) , struck out par. (4) “Qualifying processed wood fuel” which read as follows:\n“(A)  In general .—The term ‘qualifying processed wood fuel’ means any processed solid wood fuel (other than charcoal, fireplace products, or a product used for ornamental or recreational purposes) which has a Btu content per unit of volume or weight, determined without regard to any nonwood elements, which is at least 40 percent greater per unit of volume or weight than the Btu content of the wood from which it is produced (determined immediately before the processing).\n“(B)  Election .—A taxpayer shall elect, at such time and in such manner as the Secretary by regulations may prescribe, as to whether Btu content per unit shall be determined for purposes of this paragraph on a volume or weight basis. Any such election—\n“(i) shall apply to all production from a facility; and\n“(ii) shall be effective for the taxable year with respect to which it is made and for all subsequent taxable years and, once made, may be revoked only with the consent of the Secretary.”\nSubsec. (c)(5).  Pub. L. 101–508, §\u202f11816(b)(1) , struck out par. (5) “Agricultural byproduct steam” which read as follows: “Steam produced from solid agricultural byproducts which is used by the taxpayer in his trade or business shall be treated as having been sold by the taxpayer to an unrelated person on the date on which it is used.”\nSubsec. (d)(4).  Pub. L. 101–508, §\u202f11816(b)(2) , amended par. (4) generally, striking out “Special rules applicable to” before “Gas” in heading, redesignating former subpar. (A) as par. (4), striking out subpar. (B) which related to the reference price and application of phaseout for Devonian shale, and making minor changes in phraseology.\nSubsec. (d)(5), (6).  Pub. L. 101–508, §\u202f11816(b)(3) , (4), redesignated par. (6) as (5), substituted “subparagraph (C)” for “subparagraph (C), (D), or (E)”, and struck out former par. (5) which read as follows: “In the case of a facility for the production of—\n“(A) qualifying processed wood fuel,\nor\n“(B) steam from solid agricultural byproducts,\nparagraph (1) of subsection (b) shall not apply with respect to the amount of the credit allowable under subsection (a) for fuels sold during the 3-year period beginning on the date the facility is placed in service.”\nSubsec. (d)(7) to (9).  Pub. L. 101–508, §\u202f11816(b)(3) , redesignated pars. (7) to (9) as (6) to (8), respectively.\nSubsec. (f).  Pub. L. 101–508, §\u202f11816(b)(5) , amended subsec. (f) generally, redesignating former par. (1) as subsec. (f), making minor changes in phraseology, substituting par. (2) for former par. (1)(B) which read as follows: “which are sold after  December 31, 1979 , and before  January 1, 2003 .”, and striking out former par. (2) which related to special rules applicable to qualified processed wood and solid agricultural byproduct steam.\nSubsec. (f)(1)(A)(i), (ii).  Pub. L. 101–508, §\u202f11501(a)(1) , substituted “1993” for “1991”.\nSubsec. (f)(1)(B).  Pub. L. 101–508, §\u202f11501(a)(2) , substituted “2003” for “2001”.\n1988—Subsec. (f)(1)(A)(i), (ii).  Pub. L. 100–647  substituted “1991” for “1990”.\n1986—Subsec. (b)(5).  Pub. L. 99–514, §\u202f701(c)(3) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “The credit allowed by subsection (a) for a taxable year shall not exceed the taxpayer’s tax liability for the taxable year (as defined in section 26(b)), reduced by the sum of the credits allowable under subpart A and sections 27 and 28.”\nSubsec. (d)(8).  Pub. L. 99–514, §\u202f1879(c)(1) , inserted provision directing that a corporation which is a member of an affiliated group of corporations filing a consolidated return shall be treated as selling qualified fuels to an unrelated person if such fuels are sold to such person by another member of such group.\n1984— Pub. L. 98–369, §\u202f471(c) , renumbered  section 44D of this title  as this section.\nSubsec. (b)(1)(A).  Pub. L. 98–369, §\u202f722(d)(1) , substituted “in which the sale occurs” for “in which the taxable year begins”.\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f722(d)(2) , substituted “in which the sale occurs” for “in which a taxable year begins”.\nSubsec. (b)(5).  Pub. L. 98–369, §\u202f612(e)(1) , substituted “section 26(b)” for “section 25(b)”.\nPub. L. 98–369, §\u202f474(h) , amended par. (5) generally, substituting “shall not exceed the taxpayer’s tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits allowable under subpart A and sections 27 and 28” for “shall not exceed the tax imposed by this chapter for such taxable year, reduced by the sum of the credits allowable under a section of this subpart having a lower number or letter designation than this section, other than the credits allowable by sections 31, 39, and 43. For purposes of the preceding sentence, the term ‘tax imposed by this chapter’ shall not include any tax treated as not imposed by this chapter under the last sentence of section 53(a)”.\n1983—Subsec. (f)(1)(B), (2)(A)(i).  Pub. L. 97–448  substituted “ December 31, 1979 ” for “ December 3, 1979 ”.\n1982—Subsec. (d)(9).  Pub. L. 97–354  substituted “Pass-thru in the case of estates and trusts” for “Pass-through in the case of subchapter S corporations, etc.” in par. heading, and substituted provisions relating to the applicability of rules similar to rules of subsec. (d) of section 52 for provisions relating to the applicability of rules similar to rules of subsecs. (d) and (e) of section 52.\n1981—Subsec. (e).  Pub. L. 97–34  substituted provisions respecting application with the Natural Gas Policy Act of 1978 for prior provision reading “If the taxpayer makes an election under section 107(d) of the Natural Gas Policy Act of 1978 to have subsections (a) and (b) of section 107 of that Act, and subtitle B of title I of that Act, apply with respect to gas described in subsection (c)(1)(B)(i) produced from any well on a property, then the credit allowable by subsection (a) shall not be allowed with respect to any gas produced on that property.”\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the Energy Improvement and Extension Act of 2008,  Pub. L. 110–343, div. B , to which such amendment relates, see  section 210(h) of Pub. L. 113–295 , set out as a note under  section 45 of this title .\nAmendment by  Pub. L. 110–343  applicable to fuel produced and sold after  Sept. 30, 2008 , see  section 108(e) of Pub. L. 110–343 , set out as a note under  section 45 of this title .\nPub. L. 109–432, div. A, title II, §\u202f211(c) ,  Dec. 20, 2006 ,  120 Stat. 2948 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in section 1321 of the Energy Policy Act of 2005 [ Pub. L. 109–58 ].”\nAmendment by  section 402(g) of Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nPub. L. 109–58, title XIII, §\u202f1321(b) ,  Aug. 8, 2005 ,  119 Stat. 1011 , provided that:  “The amendment made by this section [amending this section] shall apply to fuel produced and sold after  December 31, 2005 , in taxable years ending after such date.”\nPub. L. 109–58, title XIII, §\u202f1322(c) ,  Aug. 8, 2005 ,  119 Stat. 1012 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 30, 38, 43, 45, 45I, 53, 55, 613A, and 772 of this title and renumbering  section 29 of this title  as this section] shall apply to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  December 31, 2005 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 104–188, title I, §\u202f1205(e) ,  Aug. 20, 1996 ,  110 Stat. 1776 , provided that:  “The amendments made by this section [amending this section and sections 30, 38, 39, 45C, 53, 55, and 280C of this title] shall apply to amounts paid or incurred in taxable years ending after  June 30, 1996 .”\nPub. L. 104–188, title I, §\u202f1207(b) ,  Aug. 20, 1996 ,  110 Stat. 1776 , provided that:  “The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 101–508, title XI, §\u202f11501(b)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–479 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to gas produced after  December 31, 1990 .”\nPub. L. 101–508, title XI, §\u202f11501(c)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–480 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 101–508, title XI, §\u202f11813(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–555 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 50 of this title  and amending this section and sections 38, 42, 46 to 49, 52, 55, 108, 145, 147, 168, 170, 179, 196, 280F, 312, 465, 469, 861, 865, 1016, 1033, 1245, 1274A, 1371, 1388 and 1503 of this title] shall apply to property placed in service after  December 31, 1990 . \n \n “(2)   Exceptions .— The amendments made by this section shall not apply to— “(A)  any transition property (as defined in section 49(e) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [ Nov. 5, 1990 ]), \n \n “(B)  any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of such Code (as so in effect), and \n \n “(C)  any property described in section 46(b)(2)(C) of such Code (as so in effect).”\nPub. L. 101–508, title XI, §\u202f11821(a) ,  Nov. 5, 1990 ,  104 Stat. 1388–558 , provided that:  “Except as otherwise provided in this part, the amendments made by this part [part I (§§\u202f11801–11821) of subtitle H of title XI of  Pub. L. 101–508 , see Tables for classification] shall take effect on the date of the enactment of this Act [ Nov. 5, 1990 ].”\nAmendment by  section 701(c)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(c)(2) ,  Oct. 22, 1986 ,  100 Stat. 2906 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by  section 231 of Public Law 96–223  [see Effective Date note below].”\nAmendment by  section 474(h) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 612(e)(1) of Pub. L. 98–369  applicable to interest paid or accrued after  Dec. 31, 1984 , on indebtedness incurred after  Dec. 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nPub. L. 98–369, title VII, §\u202f722(d)(3) ,  July 18, 1984 ,  98 Stat. 974 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after  December 31, 1979 .”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980,  Pub. L. 96–223  to which such amendment relates, see  section 203(a) of Pub. L. 97–448 , set out as a note under  section 6652 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 97–34, title VI, §\u202f611(b) ,  Aug. 13, 1981 ,  95 Stat. 339 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 1979 .”\nPub. L. 96–223, title II, §\u202f231(c) ,  Apr. 2, 1980 ,  94 Stat. 272 , provided that:  “The amendments made by this section [enacting this section and amending  section 6096 of this title ] shall apply to taxable years ending after  December 31, 1979 .”\nPub. L. 101–508, title XI, §\u202f11821(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–558 , provided that:  \n “If— “(1)  any provision amended or repealed by this part [part I (§§\u202f11801–11821) of subtitle H of title XI of  Pub. L. 101–508 , see Tables for classification] applied to— “(A)  any transaction occurring before the date of the enactment of this Act [ Nov. 5, 1990 ], \n \n “(B)  any property acquired before such date of enactment, or \n \n “(C)  any item of income, loss, deduction, or credit taken into account before such date of enactment, and \n \n \n “(2)  the treatment of such transaction, property, or item under such provision would (without regard to the amendments made by this part) affect liability for tax for periods ending after such date of enactment, \n \n\n nothing in the amendments made by this part shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”\nFor applicability of amendment by  section 701(c)(3) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nProvisions relating to inflation adjustment of items in this section and reference price for certain years were contained in the following:\n2022—Internal Revenue Notice 2023–49.\n2021—Internal Revenue Notice 2022–17.\n2020—Internal Revenue Notice 2021–29.\n2019—Internal Revenue Notice 2020–28.\n2018—Internal Revenue Notice 2019–28.\n2017—Internal Revenue Notice 2018–32.\n2016—Internal Revenue Notice 2017–24.\n2015—Internal Revenue Notice 2016–43.\n2014—Internal Revenue Notice 2015–45.\n2013—Internal Revenue Notice 2014–25.\n2012—Internal Revenue Notice 2013–25.\n2011—Internal Revenue Notice 2012–30.\n2010—Internal Revenue Notice 2011–30.\n2009—Internal Revenue Notice 2010–31.\n2008—Internal Revenue Notice 2009–32.\n2007—Internal Revenue Notice 2008–44.\n2006—Internal Revenue Notice 2007–38.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The term “construction” includes substantial reconstruction and rehabilitation.\nThe term “acquire” includes purchase.\nA dwelling unit meets the requirements of this subparagraph if such dwelling unit meets the requirements of paragraph (2) or (3) (whichever is applicable).\nA dwelling unit meets the requirements of this subparagraph if such dwelling unit is certified as a zero energy ready home under the zero energy ready home program of the Department of Energy as in effect on  January 1, 2023  (or any successor program determined by the Secretary).\nA certification described in subsection (c) shall be made in accordance with guidance prescribed by the Secretary, after consultation with the Secretary of Energy. Such guidance shall specify procedures and methods for calculating energy and cost savings.\nAny certification described in subsection (c) shall be made in writing in a manner which specifies in readily verifiable fashion the energy efficient building envelope components and energy efficient heating or cooling equipment installed and their respective rated energy efficiency performance.\nFor purposes of this subtitle, if a credit is allowed under this section in connection with any expenditure for any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so determined. This subsection shall not apply for purposes of determining the adjusted basis of any building under section 42.\nFor purposes of this section, expenditures taken into account under section 47 or 48(a) shall not be taken into account under this section.\nThe requirements described in this subparagraph with respect to any qualified residence are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the construction of such residence shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such residence is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nThis section shall not apply to any qualified new energy efficient home acquired after  December 31, 2032 .\nThe date of the enactment of this section, referred to in subsec. (b)(2)(B), is the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\n2022—Subsec. (a)(2).  Pub. L. 117–169, §\u202f13304(b) , amended par. (2) generally. Prior to amendment, par. (2) related to applicable amount for dwelling unit.\nSubsec. (c).  Pub. L. 117–169, §\u202f13304(c) , amended subsec. (c) generally. Prior to amendment, subsec. (c) related to energy saving requirements of dwelling unit.\nSubsec. (e).  Pub. L. 117–169, §\u202f13304(e) , inserted at end “This subsection shall not apply for purposes of determining the adjusted basis of any building under section 42.”\nSubsec. (g).  Pub. L. 117–169, §\u202f13304(d) , added subsec. (g). Former subsec. (g) redesignated (h).\nPub. L. 117–169, §\u202f13304(a) , substituted “ December 31, 2032 ” for “ December 31, 2021 ”.\nSubsec. (h).  Pub. L. 117–169, §\u202f13304(d) , redesignated subsec. (g) as (h).\n2020—Subsec. (g).  Pub. L. 116–260  substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (g).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (g).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (g).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (g).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (c)(1)(A)(i).  Pub. L. 112–240, §\u202f408(b) , substituted “2006 International Energy Conservation Code, as such Code (including supplements) is in effect on  January 1, 2006 ” for “2003 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of this section”.\nSubsec. (g).  Pub. L. 112–240, §\u202f408(a) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (g).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (g).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2008 ”.\n2007—Subsec. (c)(2), (3).  Pub. L. 110–172  substituted “part 3280” for “section 3280” in par. (2) and in introductory provisions of par. (3).\n2006—Subsec. (g).  Pub. L. 109–432  substituted “2008” for “2007”.\nPub. L. 117–169, title I, §\u202f13304(f) ,  Aug. 16, 2022 ,  136 Stat. 1954 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to dwelling units acquired after  December 31, 2022 . \n \n “(2)   Extension of credit .— The amendments made by subsection (a) [amending this section] shall apply to dwelling units acquired after  December 31, 2021 .”\nPub. L. 116–260, div. EE, title I, §\u202f146(b) ,  Dec. 27, 2020 ,  134 Stat. 3055 , provided that:  “The amendment made by this section [amending this section] shall apply to homes acquired after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f129(b) ,  Dec. 20, 2019 ,  133 Stat. 3232 , provided that:  “The amendment made by this section [amending this section] shall apply to homes acquired after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40410(b) ,  Feb. 9, 2018 ,  132 Stat. 150 , provided that:  “The amendment made by this section [amending this section] shall apply to homes acquired after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f188(b) ,  Dec. 18, 2015 ,  129 Stat. 3074 , provided that:  “The amendment made by this section [amending this section] shall apply to homes acquired after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f156(b) ,  Dec. 19, 2014 ,  128 Stat. 4022 , provided that:  “The amendment made by this section [amending this section] shall apply to homes acquired after  December 31, 2013 .”\nPub. L. 112–240, title IV, §\u202f408(c) ,  Jan. 2, 2013 ,  126 Stat. 2342 , provided that:  “The amendments made by this section [amending this section] shall apply to homes acquired after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f703(b) ,  Dec. 17, 2010 ,  124 Stat. 3311 , provided that:  “The amendment made by this section [amending this section] shall apply to homes acquired after  December 31, 2009 .”\nSection applicable to qualified new energy efficient homes acquired after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1332(f) of Pub. L. 109–58 , set out as an Effective Date of 2005 Amendments note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 109–58, title XIII, §\u202f1334(a) ,  Aug. 8, 2005 ,  119 Stat. 1030 ; amended  Pub. L. 110–343, div. B, title III, §\u202f305(a) –(e),  Oct. 3, 2008 ,  122 Stat. 3845–3847 ;  Pub. L. 111–312, title VII, §\u202f709(a) –(d),  Dec. 17, 2010 ,  124 Stat. 3312 , 3313;  Pub. L. 112–240, title IV, §\u202f409(a) , (b),  Jan. 2, 2013 ,  126 Stat. 2342 , provided for an energy efficient appliance credit.\nFor provisions that nothing in repeal by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of this section, the term “eligible employer” means any taxpayer which employs individuals as miners in underground mines in the United States.\nFor purposes of this section, the term “wages” has the meaning given to such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section).\nThis section shall not apply to taxable years beginning after  December 31, 2021 .\n2020—Subsec. (e).  Pub. L. 116–260  substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (e).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (e).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (e).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (e).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (e).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (e).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (e).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2008 ”.\nPub. L. 116–260, div. EE, title I, §\u202f136(b) ,  Dec. 27, 2020 ,  134 Stat. 3053 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f113(b) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40303(b) ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f163(b) ,  Dec. 18, 2015 ,  129 Stat. 3066 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f117(b) ,  Dec. 19, 2014 ,  128 Stat. 4015 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f307(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f735(b) ,  Dec. 17, 2010 ,  124 Stat. 3318 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nSection applicable to taxable years beginning after  Dec. 31, 2005 , see  section 405(e) of Pub. L. 109–432 , set out as an Effective Date of 2006 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, in the case of an eligible agricultural business, the agricultural chemicals security credit determined under this section for the taxable year is 30 percent of the qualified security expenditures for the taxable year.\nThe amount of the credit determined under subsection (a) with respect to any taxpayer for any taxable year shall not exceed $2,000,000.\nRules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply for purposes of this section.\nThis section shall not apply to any amount paid or incurred after  December 31, 2012 .\nSection 302(a)(2) of the Emergency Planning and Community Right-to-Know Act of 1986, referred to in subsec. (f)(1)(A), is classified to  section 11002(a)(2) of Title 42 , The Public Health and Welfare.\nSection 2(u) of the Federal Insecticide, Fungicide, and Rodenticide Act, referred to in subsec. (f)(2), is classified to  section 136(u) of Title 7 , Agriculture.\nPub. L. 110–234  and  Pub. L. 110–246  enacted identical sections.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 .\nEnactment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.\nSection applicable to amounts paid or incurred after  June 18, 2008 , see  section 15343(e) of Pub. L. 110–246 , set out as an Effective Date of 2008 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the differential wage payment credit for any taxable year is an amount equal to 20 percent of the sum of the eligible differential wage payments for each of the qualified employees of the taxpayer during such taxable year.\nThe term “eligible differential wage payments” means, with respect to each qualified employee, so much of the differential wage payments (as defined in section 3401(h)(2)) paid to such employee for the taxable year as does not exceed $20,000.\nThe term “qualified employee” means a person who has been an employee of the taxpayer for the 91-day period immediately preceding the period for which any differential wage payment is made.\nAll persons treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 shall be treated as a single employer.\nThe amount of credit otherwise allowable under this chapter with respect to compensation paid to any employee shall be reduced by the credit determined under this section with respect to such employee.\nFor purposes of this section, rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.\nThe date of the enactment of this section, referred to in subsec. (d)(1), is the date of the enactment of  Pub. L. 110–245 , which was approved  June 17, 2008 .\n2015—Subsec. (a).  Pub. L. 114–113, §\u202f122(b)(1) , struck out “,\u2000in the case of an eligible small business employer” after “section 38”.\nSubsec. (b)(3).  Pub. L. 114–113, §\u202f122(b)(2) , amended par. (3) generally. Prior to amendment, par. (3) defined “eligible small business employer”.\nSubsec. (f).  Pub. L. 114–113, §\u202f122(a) , struck out subsec. (f). Text read as follows: “This section shall not apply to any payments made after  December 31, 2014 .”\n2014—Subsec. (f).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (f).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (f).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nPub. L. 114–113, div. Q, title I, §\u202f122(c) ,  Dec. 18, 2015 ,  129 Stat. 3052 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to payments made after  December 31, 2014 . \n \n “(2)   Modification .— The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f118(b) ,  Dec. 19, 2014 ,  128 Stat. 4015 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f308(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f736(b) ,  Dec. 17, 2010 ,  124 Stat. 3318 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made after  December 31, 2009 .”\nSection applicable to amounts paid after  June 17, 2008 , see  section 111(e) of Pub. L. 110–245 , set out as an Effective Date of 2008 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The applicable dollar amount determined under subparagraph (A), (B), or (C) shall be rounded to the nearest cent.\nFor purposes of determining the carbon oxide sequestration credit under this section, a taxpayer may elect to have the dollar amounts applicable under paragraph (1) or (2) of subsection (a) apply in lieu of the dollar amounts applicable under paragraph (3) or (4) of such subsection for each metric ton of qualified carbon oxide which is captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018.\nThe term “qualified carbon oxide” includes the initial deposit of captured carbon oxide used as a tertiary injectant. Such term does not include carbon oxide that is recaptured, recycled, and re-injected as part of the enhanced oil and natural gas recovery process.\nThe term “applicable electric generating unit” means the principal electric generating unit for which the carbon capture equipment is originally planned and designed.\nThe term “capacity factor” means the ratio (expressed as a percentage) of the actual electric output from the applicable electric generating unit to the potential electric output from such unit.\nSubject to subparagraph (B), the term “direct air capture facility” means any facility which uses carbon capture equipment to capture carbon dioxide directly from the ambient air.\nThe term “qualified enhanced oil or natural gas recovery project” has the meaning given the term “qualified enhanced oil recovery project” by section 43(c)(2), by substituting “crude oil or natural gas” for “crude oil” in subparagraph (A)(i) thereof.\nThe term “tertiary injectant” has the same meaning as when used within section 193(b)(1).\nThe Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determining adequate security measures for the geological storage of qualified carbon oxide under subsection (a) such that the qualified carbon oxide does not escape into the atmosphere. Such term shall include storage at deep saline formations, oil and gas reservoirs, and unminable coal seams under such conditions as the Secretary may determine under such regulations.\nThe Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon oxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.\nFor purposes of clause (i), the term “lifecycle greenhouse gas emissions” has the same meaning given such term under subparagraph (H) of section 211( o )(1) of the Clean Air Act ( 42 U.S.C. 7545 ( o )(1)), as in effect on the date of the enactment of the Bipartisan Budget Act of 2018, except that “product” shall be substituted for “fuel” each place it appears in such subparagraph.\nFor purposes of this section, in the case of an applicable facility, for any taxable year in which such facility captures not less than 500,000 metric tons of qualified carbon oxide during the taxable year, the person described in paragraph (3)(A)(ii) may elect to have such facility, and any carbon capture equipment placed in service at such facility, deemed as having been placed in service on the date of the enactment of the Bipartisan Budget Act of 2018.\nRules similar to the rule under section 45(b)(3) shall apply for purposes of this section.\nIn the case of any qualified facility or any carbon capture equipment which satisfy the requirements of paragraph (2), the amount of the credit determined under subsection (a) shall be equal to such amount (determined without regard to this sentence) multiplied by 5.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.\nThe date of the enactment of the Bipartisan Budget Act of 2018 and the date of the enactment of such Act, referred to in text, is the date of enactment of  Pub. L. 115–123 , which was approved  Feb. 9, 2018 .\n2022—Subsec. (b)(1)(A).  Pub. L. 117–169, §\u202f13104(c)(2)(A) , substituted “Except as provided in subparagraph (B) or (C), the applicable dollar amount” for “The applicable dollar amount” in introductory provisions.\nSubsec. (b)(1)(A)(i)(I).  Pub. L. 117–169, §\u202f13104(b)(1)(A) , substituted “$17” for “the dollar amount established by linear interpolation between $22.66 and $50 for each calendar year during such period”.\nSubsec. (b)(1)(A)(i)(II).  Pub. L. 117–169, §\u202f13104(b)(1)(B) , substituted “$12” for “the dollar amount established by linear interpolation between $12.83 and $35 for each calendar year during such period”.\nSubsec. (b)(1)(A)(ii)(I).  Pub. L. 117–169, §\u202f13104(b)(2)(A) , substituted “$17” for “$50”.\nSubsec. (b)(1)(A)(ii)(II).  Pub. L. 117–169, §\u202f13104(b)(2)(B) , substituted “$12” for “$35”.\nSubsec. (b)(1)(B), (C).  Pub. L. 117–169, §\u202f13104(c)(1)(B) , added subpars. (B) and (C). Former subpar. (B) redesignated (D).\nSubsec. (b)(1)(D).  Pub. L. 117–169, §\u202f13104(c)(2)(B) , substituted “subparagraph (A), (B), or (C)” for “subparagraph (A)”.\nPub. L. 117–169, §\u202f13104(c)(1)(A) , redesignated subpar. (B) as (D).\nSubsec. (d).  Pub. L. 117–169, §\u202f13104(a)(1) , amended subsec. (d) generally. Prior to amendment, subsec. (d) defined qualified facility.\nSubsec. (e).  Pub. L. 117–169, §\u202f13104(a)(2)(A) , added pars. (1) and (2) and redesignated former pars. (1) to (3) as (3) to (5), respectively.\nSubsec. (f)(3).  Pub. L. 117–169, §\u202f13104(e)(1) , struck out par. (3) which had appeared after par. (7) and related to credit reduced for certain tax-exempt bonds.\nSubsec. (f)(8).  Pub. L. 117–169, §\u202f13104(e)(2) , added par. (8).\nSubsec. (f)(9).  Pub. L. 117–169, §\u202f13104(g) , added par. (9).\nSubsec. (g).  Pub. L. 117–169, §\u202f13104(f) , inserted “the earlier of  January 1, 2023 , and” before “the end of the calendar year” in introductory provisions.\nSubsecs. (h), (i).  Pub. L. 117–169, §\u202f13104(d) , added subsec. (h) and redesignated former subsec. (h) as (i).\nSubsec. (i)(3).  Pub. L. 117–169, §\u202f13104(h) , added par. (3).\n2021—Subsec. (f)(3).  Pub. L. 117–58  added par. (3) relating to credit reduced for certain tax-exempt bonds at end of subsec. (f).\n2020—Subsec. (d)(1).  Pub. L. 116–260  substituted “ January 1, 2026 ” for “ January 1, 2024 ” in introductory provisions.\n2018— Pub. L. 115–123  amended section generally. Prior to amendment, section related to credit for carbon dioxide sequestration.\n2014—Subsec. (d)(2).  Pub. L. 113–295  substituted “Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish” for “Administrator of the Environmental Protection Agency the Secretary of Energy, and the Secretary of the Interior,, shall establish”.\n2009—Subsec. (a)(1)(B).  Pub. L. 111–5, §\u202f1131(b)(2) , inserted “and not used by the taxpayer as described in paragraph (2)(B)” after “storage”.\nSubsec. (a)(2)(C).  Pub. L. 111–5, §\u202f1131(a) , added subpar. (C).\nSubsec. (d)(2).  Pub. L. 111–5, §\u202f1131(b)(1) , inserted “the Secretary of Energy, and the Secretary of the Interior,” after “Environmental Protection Agency” and substituted “paragraph (1)(B) or (2)(C) of subsection (a)” for “subsection (a)(1)(B)” and “,\u2000oil and gas reservoirs, and unminable coal seams” for “and unminable coal seems”.\nSubsec. (e).  Pub. L. 111–5, §\u202f1131(b)(3) , substituted “taken into account in accordance with subsection (a)” for “captured and disposed of or used as a tertiary injectant”.\nPub. L. 117–169, title I, §\u202f13104(i) ,  Aug. 16, 2022 ,  136 Stat. 1929 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2), (3), and (4), the amendments made by this section [amending this section and  section 142 of this title ] shall apply to facilities or equipment placed in service after  December 31, 2022 . \n \n “(2)   Modification of carbon oxide capture requirements .— The amendments made by subsection (a) [amending this section and  section 142 of this title ] shall apply to facilities or equipment the construction of which begins after the date of enactment of this Act [ Aug. 16, 2022 ]. \n \n “(3)   Application of section for certain carbon capture equipment .— The amendments made by subsection (f) [amending this section] shall take effect on the date of enactment of this Act. \n \n “(4)   Election .— The amendments made by subsection (g) [amending this section] shall apply to carbon oxide captured and disposed of after  December 31, 2021 .”\nPub. L. 117–58, div. H, title IV, §\u202f80402(f) ,  Nov. 15, 2021 ,  135 Stat. 1334 , provided that:  “The amendments made by this section [amending this section and sections 141, 142, and 146 of this title] shall apply to obligations issued after  December 31, 2021 .”\nPub. L. 115–123, div. D, title II, §\u202f41119(b) ,  Feb. 9, 2018 ,  132 Stat. 168 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1131(c) ,  Feb. 17, 2009 ,  123 Stat. 325 , provided that:  “The amendments made by this section [amending this section] shall apply to carbon dioxide captured after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nSection applicable to carbon dioxide captured after  Oct. 3, 2008 , see  section 115(d) of Pub. L. 110–343 , set out as an Effective Date of 2008 Amendment note under  section 38 of this title .\nProvisions relating to inflation adjustment of items in this section for certain years were contained in the following:\n2023—Internal Revenue Notice 2023–46.\n2022—Internal Revenue Notice 2022–38.\n2021—Internal Revenue Notice 2021–35.\n2020—Internal Revenue Notice 2020–40.\n2019—Internal Revenue Notice 2019–31.\n2018—Internal Revenue Notice 2018–40.\n2017—Internal Revenue Notice 2017–32.\n2016—Internal Revenue Notice 2016–53.\n2015—Internal Revenue Notice 2015–44.\n2014—Internal Revenue Notice 2014–40.\n2013—Internal Revenue Notice 2013–34.\n2012—Internal Revenue Notice 2012—42.\n2011—Internal Revenue Notice 2011–50.\n2010—Internal Revenue Notice 2010–75.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, in the case of an eligible small employer, the small employer health insurance credit determined under this section for any taxable year in the credit period is the amount determined under subsection (b).\nIf an employee works in excess of 2,080 hours of service during any taxable year, such excess shall not be taken into account under subparagraph (A).\nThe Secretary, in consultation with the Secretary of Labor, shall prescribe such regulations, rules, and guidance as may be necessary to determine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis.\nThe dollar amount in effect under this paragraph for taxable years beginning in 2010, 2011, 2012, or 2013 is $25,000.\nIn the case of a taxable year beginning in a calendar year after 2013, the dollar amount in effect under this paragraph shall be equal to $25,000, multiplied by the cost-of-living adjustment under section 1(f)(3) for the calendar year, determined by substituting “calendar year 2012” for “calendar year 2016” in subparagraph (A)(ii) thereof.\nAn arrangement is described in this paragraph if it requires an eligible small employer to make a nonelective contribution on behalf of each employee who enrolls in a qualified health plan offered to employees by the employer through an exchange in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the qualified health plan.\nThe number of hours of service worked by, and wages paid to, a seasonal worker of an employer shall not be taken into account in determining the full-time equivalent employees and average annual wages of the employer unless the worker works for the employer on more than 120 days during the taxable year.\nThe term “seasonal worker” means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including workers covered by section 500.20(s)(1) of title 29, Code of Federal Regulations and retail workers employed exclusively during holiday seasons.\nThe term “employee” shall include a leased employee within the meaning of section 414(n).\nThe term “credit period” means, with respect to any eligible small employer, the 2-consecutive-taxable year period beginning with the 1st taxable year in which the employer (or any predecessor) offers 1 or more qualified health plans to its employees through an Exchange.\nThe term “nonelective contribution” means an employer contribution other than an employer contribution pursuant to a salary reduction arrangement.\nThe term “wages” has the meaning given such term by section 3121(a) (determined without regard to any dollar limitation contained in such section).\nAll employers treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 shall be treated as a single employer for purposes of this section.\nRules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.\nFor purposes of this section, the term “tax-exempt eligible small employer” means an eligible small employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a).\nA rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A).\nThe credit shall be determined without regard to whether the taxable year is in a credit period and for purposes of applying this section to taxable years beginning after 2013, no credit period shall be treated as beginning with a taxable year beginning before 2014.\nAn arrangement shall not fail to meet the requirements of subsection (d)(4) solely because it provides for the offering of insurance outside of an Exchange.\nAny term used in this section which is also used in the Public Health Service Act or subtitle A of title I of the Patient Protection and Affordable Care Act shall have the meaning given such term by such Act or subtitle.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations to prevent the avoidance of the 2-year limit on the credit period through the use of successor entities and the avoidance of the limitations under subsection (c) through the use of multiple entities.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Public Health Service Act, referred to in subsec. (h), is  act July 1, 1944, ch. 373 ,  58 Stat. 682 , which is classified generally to chapter 6A (§ 201 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 201 of Title 42  and Tables.\nThe Patient Protection and Affordable Care Act, referred to in subsec. (h), is  Pub. L. 111–148 ,  Mar. 23, 2010 ,  124 Stat. 119 . Subtitle A (§§\u202f1001 to 1004) of title I of the Act enacted sections 300gg–11 to 300gg–19, 300gg–93, and 300gg–94 of Title 42, The Public Health and Welfare, redesignated sections 300gg–4 to 300gg–7 of Title 42 as sections 300gg–25 to 300gg–28, respectively, of Title 42, and  section 300gg–13 of Title 42  as  section 300gg–9 of Title 42 , amended former sections 300gg–11 and 300gg–12 and sections 300gg–21 to 300gg–23 of Title 42, and enacted provisions set out as a note under  section 300gg–11 of Title 42 . For complete classification of this Act to the Code, see Short Title note set out under  section 18001 of Title 42  and Tables.\n2017—Subsec. (d)(3)(B)(ii).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2010—Subsec. (d)(3)(B).  Pub. L. 111–148, §\u202f10105(e)(1) , amended subpar. (B) generally, including dollar amount for taxable years beginning in 2010 in addition to dollar amounts for taxable years beginning in 2011, 2012, and 2013, and subsequent years.\nSubsec. (g).  Pub. L. 111–148, §\u202f10105(e)(2) , substituted “2010, 2011” for “2011” in heading and in introductory provisions.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 111–148, title X, §\u202f10105(e)(5) ,  Mar. 23, 2010 ,  124 Stat. 907 , provided that:  “The amendments made by this subsection [amending this section,  section 280C of this title , and provisions set out as a note under  section 38 of this title ] shall take effect as if included in the enactment of section 1421 of this Act.”\nSection applicable to amounts paid or incurred in taxable years beginning after  Dec. 31, 2009 , see  section 1421(f)(1) of Pub. L. 111–148 , set out as an Effective Date of 2010 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, in the case of an eligible employer, the paid family and medical leave credit is an amount equal to the applicable percentage of the amount of wages paid to qualifying employees during any period in which such employees are on family and medical leave.\nFor purposes of paragraph (1), the term “applicable percentage” means 12.5 percent increased (but not above 25 percent) by 0.25 percentage points for each percentage point by which the rate of payment (as described under subsection (c)(1)(B)) exceeds 50 percent.\nThe credit allowed under subsection (a) with respect to any employee for any taxable year shall not exceed an amount equal to the product of the normal hourly wage rate of such employee for each hour (or fraction thereof) of actual services performed for the employer and the number of hours (or fraction thereof) for which family and medical leave is taken.\nFor purposes of paragraph (1), in the case of any employee who is not paid on an hourly wage rate, the wages of such employee shall be prorated to an hourly wage rate under regulations established by the Secretary.\nThe amount of family and medical leave that may be taken into account with respect to any employee under subsection (a) for any taxable year shall not exceed 12 weeks.\nThe term “added employee” means a qualifying employee who is not covered by title I of the Family and Medical Leave Act of 1993, as amended.\nThe term “added employer” means an eligible employer (determined without regard to this paragraph), whether or not covered by that title I, who offers paid family and medical leave to added employees.\nAll persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer.\nFor purposes of this section, any leave which is paid by a State or local government or required by State or local law shall not be taken into account in determining the amount of paid family and medical leave provided by the employer.\nNothing in this subsection shall be construed as subjecting an employer to any penalty, liability, or other consequence (other than ineligibility for the credit allowed by reason of subsection (a) or recapturing the benefit of such credit) for failure to comply with the requirements of this subsection.\nExcept as provided in paragraph (2), for purposes of this section, the term “family and medical leave” means leave for any 1 or more of the purposes described under subparagraph (A), (B), (C), (D), or (E) of paragraph (1), or paragraph (3), of section 102(a) of the Family and Medical Leave Act of 1993, as amended, whether the leave is provided under that Act or by a policy of the employer.\nIf an employer provides paid leave as vacation leave, personal leave, or medical or sick leave (other than leave specifically for 1 or more of the purposes referred to in paragraph (1)), that paid leave shall not be considered to be family and medical leave under paragraph (1).\nIn this subsection, the terms “vacation leave”, “personal leave”, and “medical or sick leave” mean those 3 types of leave, within the meaning of section 102(d)(2) of that Act.\nFor purposes of this section, any determination as to whether an employer or an employee satisfies the applicable requirements for an eligible employer (as described in subsection (c)) or qualifying employee (as described in subsection (d)), respectively, shall be made by the Secretary based on such information, to be provided by the employer, as the Secretary determines to be necessary or appropriate.\nFor purposes of this section, the term “wages” has the meaning given such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section). Such term shall not include any amount taken into account for purposes of determining any other credit allowed under this subpart.\nA taxpayer may elect to have this section not apply for any taxable year.\nRules similar to the rules of paragraphs (2) and (3) of section 51(j) shall apply for purposes of this subsection.\nThis section shall not apply to wages paid in taxable years beginning after  December 31, 2025 .\nThe Family and Medical Leave Act of 1993 and that Act, referred to in subsecs. (c)(2)(B) and (e)(1), (3), is  Pub. L. 103–3 ,  Feb. 5, 1993 ,  107 Stat. 6 . Title I of the Act is classified generally to subchapter I (§\u202f2611 et seq.) of chapter 28 of Title 29, Labor. Section 102 of the Act is classified to  section 2612 of Title 29 . For complete classification of this Act to the Code, see Short Title note set out under  section 2601 of Title 29  and Tables.\nSection 3(e) of the Fair Labor Standards Act of 1938, referred to in subsec. (d), is classified to  section 203(e) of Title 29 , Labor.\n2020—Subsec. (i).  Pub. L. 116–260  substituted “ December 31, 2025 ” for “ December 31, 2020 ”.\n2019—Subsec. (i).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2019 ”.\nPub. L. 116–260, div. EE, title I, §\u202f119(b) ,  Dec. 27, 2020 ,  134 Stat. 3051 , provided that:  “The amendment made by this section [amending this section] shall apply to wages paid in taxable years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f142(b) ,  Dec. 20, 2019 ,  133 Stat. 3234 , provided that:  “The amendment made by this section [amending this section] shall apply to wages paid in taxable years beginning after  December 31, 2019 .”\nSection applicable to wages paid in taxable years beginning after  Dec. 31, 2017 , see  section 13403(e) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The credit period with respect to any eligible employer is the 3-taxable-year period beginning with the first taxable year for which the employer includes an eligible automatic contribution arrangement (as defined in section 414(w)(3)) in a qualified employer plan (as defined in section 4972(d)) sponsored by the employer.\nNo taxable year with respect to an employer shall be treated as occurring within the credit period unless the arrangement described in paragraph (1) is included in the plan for such year.\nFor purposes of this section, the term “eligible employer” has the meaning given such term in section 408(p)(2)(C)(i).\nSection applicable to taxable years beginning after  Dec. 31, 2019 , see  section 105(d) of Pub. L. 116–94 , set out as an Effective Date of 2019 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Subject to clause (iii), the amount determined under subparagraph (A)(ii)(I) shall include any amount received by the taxpayer during the taxable year with respect to the qualified nuclear power facility from a zero-emission credit program. For purposes of determining the amount received during such taxable year, the taxpayer shall take into account any reductions required under such program.\nFor purposes of this subparagraph, the term “zero-emission credit program” means any payments with respect to a qualified nuclear power facility as a result of any Federal, State or local government program for, in whole or in part, the zero-emission, zero-carbon, or air quality attributes of any portion of the electricity produced by such facility.\nFor purposes of clause (i), any amount received by the taxpayer from a zero-emission credit program shall be excluded from the amount determined under subparagraph (A)(ii)(I) if the full amount of the credit calculated pursuant to subsection (a) (determined without regard to this subparagraph) is used to reduce payments from such zero-emission credit program.\nFor purposes of this section, the term “electricity” means the energy produced by a qualified nuclear power facility from the conversion of nuclear fuel into electric power.\nThe 0.3 cent amount in subsection (a)(1)(A) and the 2.5 cent amount in subsection (b)(2)(A)(ii)(II)(aa) shall each be adjusted by multiplying such amount by the inflation adjustment factor (as determined under section 45(e)(2), as applied by substituting “calendar year 2023” for “calendar year 1992” in subparagraph (B) thereof) for the calendar year in which the sale occurs. If the 0.3 cent amount as increased under this paragraph is not a multiple of 0.05 cent, such amount shall be rounded to the nearest multiple of 0.05 cent. If the 2.5 cent amount as increased under this paragraph is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.\nRules similar to the rules of paragraphs (1), (3), (4), (5), and (13) of section 45(e) shall apply for purposes of this section.\nIn the case of any qualified nuclear power facility which satisfies the requirements of paragraph (2)(A), the amount of the credit determined under subsection (a) shall be equal to such amount (as determined without regard to this sentence) multiplied by 5.\nThe requirements described in this subparagraph with respect to any qualified nuclear power facility are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the alteration or repair of such facility shall be paid wages at rates not less than the prevailing rates for alteration or repair of a similar character in the locality in which such facility is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nThis section shall not apply to taxable years beginning after  December 31, 2032 .\nThe date of the enactment of this section, referred to in subsec. (b)(1)(C), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\n2022—Subsec. (c)(2).  Pub. L. 117–169, §\u202f13204(b)(2) , substituted “(5), and (13)” for “and (5)”.\nAmendment by  section 13204(b)(2) of Pub. L. 117–169  applicable to electricity produced after  Dec. 31, 2022 , see  section 13204(b)(3) of Pub. L. 117–169 , set out as a note under  section 45 of this title .\nPub. L. 117–169, title I, §\u202f13105(c) ,  Aug. 16, 2022 ,  136 Stat. 1931 , provided that:  “This section [enacting this section and amending  section 38 of this title ] shall apply to electricity produced and sold after  December 31, 2023 , in taxable years beginning after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of subsection (a)(2), the applicable amount shall be an amount equal to the applicable percentage of $0.60. If any amount as determined under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.\nThe $0.60 amount in paragraph (1) shall be adjusted by multiplying such amount by the inflation adjustment factor (as determined under section 45(e)(2), determined by substituting “2022” for “1992” in subparagraph (B) thereof) for the calendar year in which the qualified clean hydrogen is produced. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.\nSubject to subparagraph (B), the term “lifecycle greenhouse gas emissions” has the same meaning given such term under subparagraph (H) of section 211( o )(1) of the Clean Air Act ( 42 U.S.C. 7545 ( o )(1)), as in effect on the date of enactment of this section.\nThe term “lifecycle greenhouse gas emissions” shall only include emissions through the point of production (well-to-gate), as determined under the most recent Greenhouse gases, Regulated Emissions, and Energy use in Transportation model (commonly referred to as the “GREET model”) developed by Argonne National Laboratory, or a successor model (as determined by the Secretary).\nThe term “qualified clean hydrogen” means hydrogen which is produced through a process that results in a lifecycle greenhouse gas emissions rate of not greater than 4 kilograms of CO2e per kilogram of hydrogen.\nIn the case of any hydrogen for which a lifecycle greenhouse gas emissions rate has not been determined for purposes of this section, a taxpayer producing such hydrogen may file a petition with the Secretary for determination of the lifecycle greenhouse gas emissions rate with respect to such hydrogen.\nRules similar to the rules section 45(e)(3) shall apply for purposes of this section.\nNo credit shall be allowed under this section with respect to any qualified clean hydrogen produced at a facility which includes carbon capture equipment for which a credit is allowed to any taxpayer under section 45Q for the taxable year or any prior taxable year.\nRules similar to the rule under section 45(b)(3) shall apply for purposes of this section.\nIn the case of any qualified clean hydrogen production facility which satisfies the requirements of paragraph (2), the amount of the credit determined under subsection (a) with respect to qualified clean hydrogen described in subsection (b)(2) shall be equal to such amount (determined without regard to this sentence) multiplied by 5.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nNot later than 1 year after the date of enactment of this section, the Secretary shall issue regulations or other guidance to carry out the purposes of this section, including regulations or other guidance for determining lifecycle greenhouse gas emissions.\nThe date of enactment of this section, referred to in subsecs. (c)(1)(A) and (f), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\n2022—Subsec. (d)(3).  Pub. L. 117–169, §\u202f13204(a)(2) , added par. (3).\nSubsec. (d)(4).  Pub. L. 117–169, §\u202f13204(a)(3) , added par. (4).\nPub. L. 117–169, title I, §\u202f13204(a)(5) ,  Aug. 16, 2022 ,  136 Stat. 1939 , provided that: \n “(A)   In general .— The amendments made by paragraphs (1) [enacting this section] and (4) [amending  section 38 of this title ] of this subsection shall apply to hydrogen produced after  December 31, 2022 . \n \n “(B)   Credit reduced for tax-exempt bonds .— The amendment made by paragraph (2) [amending this section] shall apply to facilities the construction of which begins after the date of enactment of this Act [ Aug. 16, 2022 ]. \n \n “(C)   Modification of existing facilities .— The amendment made by paragraph (3) [amending this section] shall apply to modifications made after  December 31, 2022 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the qualified commercial clean vehicle credit for any taxable year is an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified commercial clean vehicle placed in service by the taxpayer during the taxable year.\nFor purposes of paragraph (1)(B), the incremental cost of any qualified commercial clean vehicle is an amount equal to the excess of the purchase price for such vehicle over such price of a comparable vehicle.\nFor purposes of this subsection, the term “comparable vehicle” means, with respect to any qualified commercial clean vehicle, any vehicle which is powered solely by a gasoline or diesel internal combustion engine and which is comparable in size and use to such vehicle.\nRules similar to the rules under subsection (f) of section 30D (without regard to paragraph (10) or (11) thereof) shall apply for purposes of this section.\nSubsection (c)(4) shall not apply to any vehicle which is not subject to a lease and which is placed in service by a tax-exempt entity described in clause (i), (ii), or (iv) of section 168(h)(2)(A).\nNo credit shall be allowed under this section with respect to any vehicle for which a credit was allowed under section 30D.\nNo credit shall be determined under subsection (a) with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this section, including regulations or other guidance relating to determination of the incremental cost of any qualified commercial clean vehicle.\nNo credit shall be determined under this section with respect to any vehicle acquired after  December 31, 2032 .\nPub. L. 117–169, title I, §\u202f13403(c) ,  Aug. 16, 2022 ,  136 Stat. 1966 , provided that:  “The amendments made by this section [enacting this section and amending sections 38 and 6213 of this title] shall apply to vehicles acquired after  December 31, 2022 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Any eligible component produced and sold by the taxpayer shall be taken into account only if the production and sale described in paragraph (1) is in a trade or business of the taxpayer.\nFor purposes of this subsection, a taxpayer shall be treated as selling components to an unrelated person if such component is sold to such person by a person related to the taxpayer.\nAt the election of the taxpayer (in such form and manner as the Secretary may prescribe), a sale of components by such taxpayer to a related person shall be deemed to have been made to an unrelated person.\nAs a condition of, and prior to, any election described in clause (i), the Secretary may require such information or registration as the Secretary deems necessary for purposes of preventing duplication, fraud, or any improper or excessive amount determined under paragraph (1).\nFor purposes of determining the amount under this subsection with respect to any applicable critical mineral, this paragraph shall not apply.\nFor purposes of subparagraph (K)(ii) or (L)(ii) of paragraph (1), the capacity determined under either subparagraph with respect to a battery cell or battery module shall not exceed a capacity-to-power ratio of 100:1.\nFor purposes of this paragraph, the term “capacity-to-power ratio” means, with respect to a battery cell or battery module, the ratio of the capacity of such cell or module to the maximum discharge amount of such cell or module.\nThe term “eligible component” shall not include any property which is produced at a facility if the basis of any property which is part of such facility is taken into account for purposes of the credit allowed under section 48C after the date of the enactment of this section.\nThe term “inverter” means an end product which is suitable to convert direct current electricity from 1 or more solar modules or certified distributed wind energy systems into alternating current electricity.\nThe term “central inverter” means an inverter which is suitable for large utility-scale systems and has a capacity which is greater than 1,000 kilowatts (expressed on a per alternating current watt basis).\nThe term “certified distributed wind energy system” means a wind energy system which is certified by an accredited certification agency to meet Standard 9.1-2009 of the American Wind Energy Association (including any subsequent revisions to or modifications of such Standard which have been approved by the American National Standards Institute).\nThe term “photovoltaic cell” means the smallest semiconductor element of a solar module which performs the immediate conversion of light into electricity.\nThe term “polymeric backsheet” means a sheet on the back of a solar module which acts as an electric insulator and protects the inner components of such module from the surrounding environment.\nThe term “solar tracker” means a mechanical system that moves solar modules according to the position of the sun and to increase energy output.\nThe term “blade” means an airfoil-shaped blade which is responsible for converting wind energy to low-speed rotational energy.\nThe term “nacelle” means the assembly of the drivetrain and other tower-top components of a wind turbine (with the exception of the blades and the hub) within their cover housing.\nThe term “related offshore wind vessel” means any vessel which is purpose-built or retrofitted for purposes of the development, transport, installation, operation, or maintenance of offshore wind energy components.\nThe term “tower” means a tubular or lattice structure which supports the nacelle and rotor of a wind turbine.\nThe term “electrode active material” means cathode materials, anode materials, anode foils, and electrochemically active materials, including solvents, additives, and electrolyte salts that contribute to the electrochemical processes necessary for energy storage.\nBarite which is barium sulfate purified to a minimum purity of 80 percent barite by mass.\nGraphite which is purified to a minimum purity of 99.9 percent graphitic carbon by mass.\nTungsten which is converted to ammonium paratungstate or ferrotungsten.\nVanadium which is converted to ferrovanadium or vanadium pentoxide.\nPersons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b).\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nFor purposes of this section, a person shall be treated as having sold an eligible component to an unrelated person if such component is integrated, incorporated, or assembled into another eligible component which is sold to an unrelated person.\nThe date of the enactment of this section, referred to in subsec. (c)(1)(B), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nPub. L. 117–169, title I, §\u202f13502(c) ,  Aug. 16, 2022 ,  136 Stat. 1981 , provided that:  “The amendments made by this section [enacting this section and amending  section 38 of this title ] shall apply to components produced and sold after  December 31, 2022 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Subject to subsection (g)(7), in the case of any qualified facility which is not described in clause (i) or (ii) of subparagraph (B) and does not satisfy the requirements described in clause (iii) of such subparagraph, the applicable amount shall be 0.3 cents.\nFor purposes of this section, a facility shall only be treated as a qualified facility during the 10-year period beginning on the date the facility was originally placed in service.\nThe term “qualified facility” shall not include any facility for which a credit determined under section 45, 45J, 45Q, 45U, 48, 48A, or 48E is allowed under section 38 for the taxable year or any prior taxable year.\nFor purposes of this section, the term “greenhouse gas emissions rate” means the amount of greenhouse gases emitted into the atmosphere by a facility in the production of electricity, expressed as grams of CO 2 e per KWh.\nIn the case of a facility which produces electricity through combustion or gasification, the greenhouse gas emissions rate for such facility shall be equal to the net rate of greenhouse gases emitted into the atmosphere by such facility (taking into account lifecycle greenhouse gas emissions, as described in section 211( o )(1)(H) of the Clean Air Act ( 42 U.S.C. 7545 ( o )(1)(H))) in the production of electricity, expressed as grams of CO 2 e per KWh.\nThe Secretary shall annually publish a table that sets forth the greenhouse gas emissions rates for types or categories of facilities, which a taxpayer shall use for purposes of this section.\nIn the case of any facility for which an emissions rate has not been established by the Secretary, a taxpayer which owns such facility may file a petition with the Secretary for determination of the emissions rate with respect to such facility.\nIn the case of a calendar year beginning after 2024, the 0.3 cent amount in paragraph (2)(A) of subsection (a) and the 1.5 cent amount in paragraph (2)(B) of such subsection shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale, consumption, or storage of the electricity occurs. If the 0.3 cent amount as increased under this paragraph is not a multiple of 0.05 cent, such amount shall be rounded to the nearest multiple of 0.05 cent. If the 1.5 cent amount as increased under this paragraph is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.\nThe Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor for such calendar year in accordance with this subsection.\nThe term “inflation adjustment factor” means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 1992. The term “GDP implicit price deflator” means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the Department of Commerce before March 15 of the calendar year.\nThe term “CO 2 e per KWh” means, with respect to any greenhouse gas, the equivalent carbon dioxide (as determined based on global warming potential) per kilowatt hour of electricity produced.\nThe term “greenhouse gas” has the same meaning given such term under section 211( o )(1)(G) of the Clean Air Act ( 42 U.S.C. 7545 ( o )(1)(G)), as in effect on the date of the enactment of this section.\nNot later than  January 1, 2025 , the Secretary shall issue guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified facilities and determination of clean electricity production credits under this section.\nFor purposes of this paragraph, the term “combined heat and power system property” has the same meaning given such term by section 48(c)(3) (without regard to subparagraphs (A)(iv), (B), and (D) thereof).\nFor purposes of this subparagraph, the term “heat rate” means the amount of energy used by the qualified facility to generate 1 kilowatt hour of electricity, expressed as British thermal units per net kilowatt hour generated.\nIn the case of a qualified facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility.\nPersons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling electricity to an unrelated person if such electricity is sold to such a person by another member of such group.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nIn the case of an eligible cooperative organization, any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during the taxable year.\nAn election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).\nFor purposes of this section, the term “eligible cooperative” means a cooperative organization described in section 1381(a) which is owned more than 50 percent by agricultural producers or by entities owned by agricultural producers. For this purpose an entity owned by an agricultural producer is one that is more than 50 percent owned by agricultural producers.\nIn the case of any qualified facility which is located in an energy community (as defined in section 45(b)(11)(B)), for purposes of determining the amount of the credit under subsection (a) with respect to any electricity produced by the taxpayer at such facility during the taxable year, the applicable amount under paragraph (2) of such subsection shall be increased by an amount equal to 10 percent of the amount otherwise in effect under such paragraph.\nRules similar to the rules of section 45(b)(3) shall apply.\nRules similar to the rules of section 45(b)(7) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nIn the case of any qualified facility which satisfies the requirement under subparagraph (B)(i), the amount of the credit determined under subsection (a) shall be increased by an amount equal to 10 percent of the amount so determined (as determined without application of paragraph (7)).\nThe requirement described in this subclause is satisfied with respect to any qualified facility if the taxpayer certifies to the Secretary (at such time, and in such form and manner, as the Secretary may prescribe) that any steel, iron, or manufactured product which is a component of such facility (upon completion of construction) was produced in the United States (as determined under  section 661 of title 49 , Code of Federal Regulations).\nIn the case of steel or iron, clause (i) shall be applied in a manner consistent with section 661.5 of title 49, Code of Federal Regulations.\nFor purposes of clause (i), the manufactured products which are components of a qualified facility upon completion of construction shall be deemed to have been produced in the United States if not less than the adjusted percentage (as determined under subparagraph (C)) of the total costs of all such manufactured products of such facility are attributable to manufactured products (including components) which are mined, produced, or manufactured in the United States.\nIn any case in which the Secretary provides an exception pursuant to clause (i), the applicable percentage shall be 100 percent.\nThe date of the enactment of this section, referred to in subsec. (e)(2), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nPub. L. 117–169, title I, §\u202f13701(c) ,  Aug. 16, 2022 ,  136 Stat. 1990 , provided that:  “The amendments made by this section [enacting this section and amending  section 38 of this title ] shall apply to facilities placed in service after  December 31, 2024 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of any transportation fuel produced at a qualified facility which does not satisfy the requirements described in subparagraph (B), the applicable amount shall be 20 cents.\nIn the case of any transportation fuel produced at a qualified facility which satisfies the requirements under paragraphs (6) and (7) of subsection (f), the applicable amount shall be $1.00.\nIf any amount determined under paragraph (1) is not a multiple of 1 cent, such amount shall be rounded to the nearest cent.\nSubject to clauses (ii) and (iii), the Secretary shall annually publish a table which sets forth the emissions rate for similar types and categories of transportation fuels based on the amount of lifecycle greenhouse gas emissions (as described in section 211( o )(1)(H) of the Clean Air Act ( 42 U.S.C. 7545 ( o )(1)(H)), as in effect on the date of the enactment of this section) for such fuels, expressed as kilograms of CO 2 e per mmBTU, which a taxpayer shall use for purposes of this section.\nIn the case of any transportation fuel which is not a sustainable aviation fuel, the lifecycle greenhouse gas emissions of such fuel shall be based on the most recent determinations under the Greenhouse gases, Regulated Emissions, and Energy use in Transportation model developed by Argonne National Laboratory, or a successor model (as determined by the Secretary).\nSubject to clause (ii), the Secretary may round the emissions rates under subparagraph (B) to the nearest multiple of 5 kilograms of CO 2 e per mmBTU.\nIn the case of an emissions rate that is between 2.5 kilograms of CO 2 e per mmBTU and -2.5 kilograms of CO 2 e per mmBTU, the Secretary may round such rate to zero.\nIn the case of any transportation fuel for which an emissions rate has not been established under subparagraph (B), a taxpayer producing such fuel may file a petition with the Secretary for determination of the emissions rate with respect to such fuel.\nIf any amount determined under paragraph (1)(A) is not a multiple of 0.1, such amount shall be rounded to the nearest multiple of 0.1.\nIn the case of calendar years beginning after 2024, the 20 cent amount in subsection (a)(2)(A), the $1.00 amount in subsection (a)(2)(B), the 35 cent amount in subsection (a)(3)(A)(i), and the $1.75 amount in subsection (a)(3)(A)(ii) shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale of the transportation fuel occurs. If any amount as increased under the preceding sentence is not a multiple of 1 cent, such amount shall be rounded to the nearest multiple of 1 cent.\nFor purposes of paragraph (1), the inflation adjustment factor shall be the inflation adjustment factor determined and published by the Secretary pursuant to section 45Y(c), determined by substituting “calendar year 2022” for “calendar year 1992” in paragraph (3) thereof.\nThe term “mmBTU” means 1,000,000 British thermal units.\nThe term “CO 2 e” means, with respect to any greenhouse gas, the equivalent carbon dioxide (as determined based on relative global warming potential).\nThe term “greenhouse gas” has the same meaning given that term under section 211( o )(1)(G) of the Clean Air Act ( 42 U.S.C. 7545 ( o )(1)(G)), as in effect on the date of the enactment of this section.\nThe term “biomass” has the same meaning given such term in section 45K(c)(3).\nNot later than  January 1, 2025 , the Secretary shall issue guidance regarding implementation of this section, including calculation of emissions factors for transportation fuel, the table described in subsection (b)(1)(B)(i), and the determination of clean fuel production credits under this section.\nFor purposes of this paragraph, the term “United States” includes any possession of the United States.\nIn the case of a facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility.\nPersons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling fuel to an unrelated person if such fuel is sold to such a person by another member of such group.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\nRules similar to the rules of section 45Y(g)(6) shall apply.\nSubject to subparagraph (B), rules similar to the rules of section 45(b)(7) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nThis section shall not apply to transportation fuel sold after  December 31, 2027 .\nThe date of the enactment of this section, referred to in subsecs. (b)(1)(B)(i), (iii)(II) and (d)(3), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nPub. L. 117–169, title I, §\u202f13704(c) ,  Aug. 16, 2022 ,  136 Stat. 2003 , provided that:  “The amendments made by this section [enacting this section and amending sections 25C, 30C, 38, and 4101 of this title] shall apply to transportation fuel produced after  December 31, 2024 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'An individual shall only be taken into account as a military spouse under subsection (a) for the taxable year which includes the date on which such individual began participating in the eligible defined contribution plan of the employer and the 2 succeeding taxable years.\nFor purposes of this section, the term “eligible small employer” means an eligible employer (as defined in section 408(p)(2)(C)(i)(I). 2 2 \u202fSo in original. Another closing parenthesis probably should precede the period.\nThe term “military spouse” means, with respect to any employer, any individual who is married (within the meaning of section 7703 as of the first date that the employee is employed by the employer) to an individual who is a member of the uniformed services (as defined  section 101(a)(5) of title 10 , United States Code) serving on active duty. For purposes of this section, an employer may rely on an employee’s certification that such employee’s spouse is a member of the uniformed services if such certification provides the name, rank, and service branch of such spouse.\nWith respect to any employer, the term “military spouse” shall not include any individual if such individual is a highly compensated employee of such employer (within the meaning of section 414(q)).\nAll persons treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 shall be treated as one employer for purposes of this section.\nSection applicable to taxable years beginning after  Dec. 29, 2022 , see  section 112(e) of Pub. L. 117–328 , set out as an Effective Date of 2022 Amendment note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Pub. L. 117–169, title I, §\u202f13702(b)(1) , (c),  Aug. 16, 2022 ,  136 Stat. 1996 , 1997, provided that, applicable to property placed in service after  Dec. 31, 2024 , this section is amended by adding at the end the following:\n(7) the clean electricity investment credit.\nSee 2022 Amendment note below.\n2022—Par. (6).  Pub. L. 117–167  amended par. (6) generally. Prior to amendment, text read as follows: “the qualifying therapeutic discovery project credit.”\nPar. (7).  Pub. L. 117–169  added par. (7).\n2014—Par. (4).  Pub. L. 113–295  inserted a comma at end.\n2010—Par. (2).  Pub. L. 111–148, §\u202f9023(b)(1) , inserted a comma at end.\nPar. (6).  Pub. L. 111–148, §\u202f9023(b)(2) , (3), added par. (6).\n2009—Par. (5).  Pub. L. 111–5  added par. (5).\n2005— Pub. L. 109–58  struck out “and” at end of par. (1), struck out period at end of par. (2), and added pars. (3) and (4).\n2004— Pub. L. 108–357  inserted “and” at end of par. (1), substituted a period for “,\u2000and” at end of par. (2), and struck out par. (3) which read as follows: “the reforestation credit.”\n1990— Pub. L. 101–508, §\u202f11813(a) , amended section generally, substituting present provisions for provisions relating to amount of investment credit, determination of percentages, qualified investments and qualified progress expenditures, limitations with respect to certain persons, a limitation in the case of certain regulated companies, a 50 percent credit in the case of certain vessels, and special rule for cooperatives.\nSubsec. (b)(2)(A).  Pub. L. 101–508, §\u202f11406 , substituted “ Dec. 31, 1991 ” for “ Sept. 30, 1990 ” in table items (viii) C. and (ix) B.\n1989—Subsec. (b)(2)(A).  Pub. L. 101–239, §\u202f7106 , substituted “ Sept. 30, 1990 ” for “ Dec. 31, 1989 ” in table items (viii) C., (ix) B., and (x).\nPub. L. 101–239, §\u202f7814(d) , made technical correction to language of  Pub. L. 100–647, §\u202f4006 , see 1988 Amendment note below.\n1988—Subsec. (b)(2)(A).  Pub. L. 100–647, §\u202f4006 , as amended by  Pub. L. 101–239, §\u202f7814(d) , substituted “1989” for “1988” in table items (viii) C., (ix) B., and (x).\nSubsec. (c)(5)(B).  Pub. L. 100–647, §\u202f1013(a)(44) , substituted “private activity bonds” for “industrial development bonds” in heading, and in text substituted “a private activity bond (within the meaning of section 141)” for “an industrial development bond (within the meaning of section 103(b)(2))”.\nSubsec. (c)(7).  Pub. L. 100–647, §\u202f1002(a)(17) , substituted “property to which section 168 applies” for “recovery property” in heading, substituted “property to which section 168 applies” for “recovery property” and “168(e)” for “168(c)” in subpar. (A), substituted “168(e)” for “168(c)” in subpar. (B), and inserted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” after “section 168(f)(3)(B)” in concluding provisions.\nSubsec. (d)(1)(B)(i).  Pub. L. 100–647, §\u202f1002(a)(25)(A) , substituted “property to which section 168 applies” for “recovery property (within the meaning of section 168)”.\nSubsec. (d)(1)(B)(ii).  Pub. L. 100–647, §\u202f1002(a)(25)(B) , substituted “to which section 168 does not apply” for “which is not recovery property (within the meaning of section 168)”.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1002(a)(15) , substituted “property to which section 168 applies” for “recovery property (within the meaning of section 168)”, “class life” for “present class life”, and “168(i)(1)” for “168(g)(2)”.\nSubsec. (e)(4)(B).  Pub. L. 100–647, §\u202f1002(a)(4)(A) , substituted “168(i)(3)” for “168(j)(6)”.\nSubsec. (e)(4)(C).  Pub. L. 100–647, §\u202f1009(a)(1) , inserted provisions at end which provided that any such election shall terminate effective with respect to the 1st taxable year of the organization making such election which begins after 1986, and which defined “regular investment tax credit property”.\nSubsec. (e)(4)(D).  Pub. L. 100–647, §\u202f1002(a)(4)(B) , substituted “paragraphs (5) and (6) of section 168(h)” for “paragraphs (8) and (9) of section 168(j)”.\nSubsec. (e)(4)(E).  Pub. L. 100–647, §\u202f1002(a)(4)(C) , (D), substituted “168(h)” for “168(j)” and “168(h)(2)” for “168(j)(4)”.\n1986—Subsec. (b)(2)(A).  Pub. L. 99–514, §\u202f1847(b)(11) , substituted “48( l )(3)(A)(viii)” for “48( l )(3)(A)(vii)” in table item (ii).\nPub. L. 99–514, §\u202f421(a) , inserted table items (viii) to (xi).\nSubsec. (b)(2)(E).  Pub. L. 99–514, §\u202f421(b) , added subpar. (E).\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f251(a) , in amending par. (4) generally, substituted in subpar. (A) definition of “rehabilitation percentage” for former table specifying specific rehabilitation percentages, reenacted subpar. (B), and struck out subpar. (C) which related to definitions.\nSubsec. (c)(8)(D)(v).  Pub. L. 99–514, §\u202f1844(a) , substituted “this subparagraph” for “clause (i)”.\nPub. L. 99–514, §\u202f201(d)(7)(B) , substituted “section 465(b)(3)(C)” for “section 168(e)(4)”.\nSubsec. (c)(9)(A).  Pub. L. 99–514, §\u202f1844(b)(3) , substituted “an increase in the credit base for” for “additional qualified investment in”.\nSubsec. (c)(9)(C)(i).  Pub. L. 99–514, §\u202f1844(b)(5) , substituted “any increase in a taxpayer’s credit base for any property by reason of this paragraph shall be taken into account as if it were property placed in service by the taxpayer in the taxable year in which the property referred to in subparagraph (A) was first placed in service” for “any increase in a taxpayer’s qualified investment in property by reason of this paragraph shall be deemed to be additional qualified investment made by the taxpayer in the year in which the property referred to in subparagraph (A) was first placed in service”.\nSubsec. (e)(4)(D), (E).  Pub. L. 99–514, §\u202f1802(a)(6) , (8), added subpars. (D) and (E).\nSubsec. (f)(9).  Pub. L. 99–514, §\u202f1848(a) , struck out par. (9) which related to a special rule for additional credit.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f474 ( o )(1), amended subsec. (a) generally, so as to contain provisions relating to amount of investment credit, which formerly constituted only par. (2)(A)(i), (ii), and (iv) of subsec. (a).\nSubsec. (a)(4).  Pub. L. 98–369, §\u202f713(c)(1)(C) , substituted “premature distributions to key employees” for “premature distributions to owner-employees”.\nSubsec. (b).  Pub. L. 98–369, §\u202f474 ( o )(1), amended subsec. (b) generally, substituting provisions relating to determination of percentages for purposes of subsec. (a), for provisions relating to carryback and carryover of unused credits.\nSubsec. (c)(7)(A).  Pub. L. 98–369, §\u202f13(b)(2)(B) , inserted “recovery” before first reference to “property”.\nSubsec. (c)(8).  Pub. L. 98–369, §\u202f431(a) , substituted “Certain nonrecourse financing excluded from credit base” for “Limitation to amount at risk” in heading.\nSubsec. (c)(8)(A).  Pub. L. 98–369, §\u202f431(a) , substituted provisions reducing the credit base of any property to which this paragraph applies by the nonqualified nonrecourse financing with respect to such property for provisions relating to limitation of the basis to the amount at risk in the case of new or used section 38 property placed in service during the taxable year by a taxpayer described in section 465(a)(1) and used in connection with an activity with respect to which any loss was subject to limitation under section 465.\nSubsec. (c)(8)(B).  Pub. L. 98–369, §\u202f431(a) , substituted provisions relating to the property to which this paragraph applies for provisions defining “at risk” and stating the circumstances under which a taxpayer would be considered to be at risk for purposes of this paragraph.\nSubsec. (c)(8)(C).  Pub. L. 98–369, §\u202f431(a) , substituted provisions defining “credit base” for provisions relating to a special rule for partnerships and subchapter S corporations.\nSubsec. (c)(8)(D).  Pub. L. 98–369, §\u202f431(a) , substituted provisions defining “nonqualified nonrecourse financing” for provisions defining “qualified person”.\nSubsec. (c)(8)(D)(i)(I).  Pub. L. 98–369, §\u202f16(a) , repealed amendments made by  Pub. L. 97–34, §\u202f302(c) . See 1981 Amendment note below.\nSubsec. (c)(8)(E).  Pub. L. 98–369, §\u202f431(a) , substituted provisions relating to the application of this paragraph to partnerships and subchapter S corporations for provisions defining “related person”.\nSubsec. (c)(8)(F)(i).  Pub. L. 98–369, §\u202f431(d)(1) , substituted provisions that subpar. (A) shall not apply with respect to qualified energy property for provisions that subpar. (A) would not apply to amounts borrowed with respect to qualified energy property (other than amounts described in subpar. (B)).\nSubsec. (c)(8)(F)(ii)(II).  Pub. L. 98–369, §\u202f474 ( o )(2), substituted “subsection (b)(2)” for “section 46(a)(2)(C)”.\nSubsec. (c)(8)(F)(ii)(III).  Pub. L. 98–369, §\u202f431(d)(2) , substituted provisions that qualified energy property means energy property to which (but for this subpar.) subpar. (A) applies and not more than 75 percent of the basis of which is attributable to nonqualified nonrecourse financing for provisions that qualified energy property meant energy property to which (but for this subpar.) subpar. (A) applied and with respect to which the taxpayer was at risk (within the meaning of section 465(b) without regard to par. (5) thereof) in an amount equal to at least 25 percent of the basis of the property.\nSubsec. (c)(8)(F)(ii)(IV).  Pub. L. 98–369, §\u202f431(d)(3) , substituted “nonqualified nonrecourse financing” for “nonrecourse financing (other than financing described in section 46(c)(8)(B)(ii))”.\nSubsec. (c)(9).  Pub. L. 98–369, §\u202f431(b)(1) , substituted provisions relating to subsequent decreases in nonqualified nonrecourse financing with respect to the property for provisions relating to subsequent increases in the taxpayer’s amount at risk with respect to the property.\nSubsec. (e)(1).  Pub. L. 98–369, §\u202f474 ( o )(3)(A), struck out “and the $25,000 amount specified under subparagraphs (A) and (B) of subsection (a)(3)”, and substituted “such qualified investment” for “such items”, in provisions following subpar. (B).\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f474 ( o )(3)(B), substituted “qualified investment” for “the items described therein” in introductory provisions.\nSubsec. (e)(4).  Pub. L. 98–369, §\u202f31(b) , added par. (4).\nSubsec. (f)(1).  Pub. L. 98–369, §\u202f474 ( o )(4)(A), substituted “no credit determined under subsection (a) shall be allowed by section 38” for “no credit shall be allowed by section 38” in introductory provisions.\nSubsec. (f)(1)(A), (B).  Pub. L. 98–369, §\u202f474 ( o )(4)(B), substituted “the credit determined under subsection (a) and allowable by section 38” for “the credit allowable by section 38”.\nSubsec. (f)(2).  Pub. L. 98–369, §\u202f474 ( o )(4)(A), substituted “no credit determined under subsection (a) shall be allowed by section 38” for “no credit shall be allowed by section 38” in introductory provisions.\nSubsec. (f)(2)(A), (B).  Pub. L. 98–369, §\u202f474 ( o )(4)(B), substituted “the credit determined under subsection (a) and allowable by section 38” for “the credit allowable by section 38”.\nSubsec. (f)(4)(B).  Pub. L. 98–369, §\u202f474 ( o )(4)(C), substituted “the credit determined under subsection (a) and allowed by section 38” for “the credit allowed by section 38” in introductory provisions.\nSubsec. (f)(8).  Pub. L. 98–369, §\u202f474 ( o )(5), substituted “the credit determined under subsection (a) and allowable under section 38” for “the credit allowable under section 38” in two places, and “(within the meaning of the first sentence of subsection (c)(3)(B))” for “(within the meaning of subsection (a)(7)(C))”.\nSubsec. (g)(2).  Pub. L. 98–369, §\u202f474 ( o )(6), substituted “the limitation of section 38(c)” for “the limitation of subsection (a)(3)”.\nSubsec. (h)(1).  Pub. L. 98–369, §\u202f474 ( o )(7), substituted “the credit determined under subsection (a) and allowable to the organization under section 38” for “the credit allowable to the organization under section 38” and “the limitation contained in section 38(c)” for “the limitation contained in subsection (a)(3)”.\n1983—Subsec. (a)(2)(C)(i).  Pub. L. 97–424, §\u202f546(b) , added section VII to the table.\nSubsec. (a)(2)(C)(iii)(I).  Pub. L. 97–448, §\u202f202(f) , substituted “before  January 1, 1983 , all engineering studies in connection with the commencement of the construction of the project have been completed and all environmental and construction permits required under Federal, State, or local law in connection with the commencement of the construction of the project have been applied for, and” for “before  January 1, 1983 , the taxpayer has completed all engineering studies in connection with the commencement of the construction of the project, and has applied for all environmental and construction permits required under Federal, State, or local law in connection with the commencement of the construction of the project, and”.\nSubsec. (a)(2)(F)(iii)(II).  Pub. L. 97–448, §\u202f102(f)(5)(A) , substituted “a qualified rehabilitated building” for “any building”.\nSubsec. (a)(2)(F)(iii)(III).  Pub. L. 97–448, §\u202f102(f)(5)(B) , substituted “means a qualified rehabilitated building which meets the requirements of section 48(g)(3)” for “has the meaning given to such term by section 48(g)(3)”.\nSubsec. (a)(4)(B).  Pub. L. 98–21  substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”.\nSubsec. (c)(7).  Pub. L. 97–448, §\u202f102(e)(1) , substituted “in the case of property other than 3-year property (within the meaning of section 168(c))” for “in the case of 15-year public utility, 10-year, or 5-year property (within the meaning of section 168(c))” in subpar. (A) and, in provisions following subpar. (B), substituted “shall be treated as property which is not 3-year property” for “shall be treated as 5-year property”.\nSubsec. (f)(10).  Pub. L. 97–424, §\u202f541(b) , added par. (10).\n1982—Subsec. (a)(3)(B).  Pub. L. 97–248, §\u202f205(b)(1) , substituted “85 percent” for “the following percentage”, substituted a period for the colon, and struck out table of percentages at end of subpar. (B).\nSubsec. (a)(4).  Pub. L. 97–354, §\u202f5(a)(4) , substituted “section 1374 (relating to tax on certain capital gains of S corporations)” for “section 1378 (relating to tax on certain capital gains of subchapter S corporations)”.\nPub. L. 97–248 , §§\u202f201(d)(8)(A), formerly 201(c)(8)(A), 265(b)(2)(A), substituted “(relating to corporate minimum tax)” for “(relating to minimum tax for tax preferences)” after “section 56”, and inserted “section 72(q)(1) (relating to 5-percent tax on premature distributions under annuity contracts),” after “owner-employees)”.\nSubsec. (a)(7).  Pub. L. 97–248, §\u202f205(b)(2) , redesignated par. (9) as (7), and, in par. (7)(B), as so redesignated, substituted reference to 85 percent for former reference to the percentage determined under subsec. (a)(3)(B) in cl. (i), struck out former cl. (ii), which provided that pars. (7) and (8) would not apply in certain instances, and redesignated former cl. (iii) as (ii). Former par. (7), which provided for alternative limitations in the case of certain utilities, was struck out.\nSubsec. (a)(8).  Pub. L. 97–248, §\u202f205(b)(2)(A) , struck out par. (8) which provided for alternative limitations in the case of certain railroads and airlines.\nSubsec. (a)(9).  Pub. L. 97–248, §\u202f205(b)(2)(A) , redesignated par. (9) as (7).\nSubsec. (c)(8)(C).  Pub. L. 97–354, §\u202f5(a)(5) , substituted “S corporation” for “electing small business corporation (within the meaning of section 1371(b))”.\nSubsec. (e)(3).  Pub. L. 97–354, §\u202f5(a)(6) , substituted “an S corporation” for “an electing small business corporation (as defined in section 1371)”.\n1981—Subsec. (a)(2)(A)(iv).  Pub. L. 97–34, §\u202f212(a)(1) , added cl. (iv).\nSubsec. (a)(2)(E).  Pub. L. 97–34, §\u202f332(a) , substituted “ December 31, 1982 ” for “ December 31, 1983 ” in cls. (i) and (ii) and added cl. (iii).\nSubsec. (a)(2)(F).  Pub. L. 97–34, §\u202f212(a)(2) , added subpar. (F).\nSubsec. (b)(1).  Pub. L. 97–34, §\u202f207(c)(1) , inserted provision after subpar. (D) directing that, in the case of an unused credit for an unused credit year ending after  Dec. 31, 1973 , this paragraph be applied by substituting “15” for “7” in subpar. (B) and by substituting “18” for “10” and “17” for “9” in second sentence.\nSubsec. (c)(2).  Pub. L. 97–34, §\u202f211(e)(1) , inserted references in provisions preceding table to exceptions provided in paragraphs (3), (6), and (7).\nSubsec. (c)(6)(A).  Pub. L. 97–34, §\u202f211(e)(2) , substituted “Notwithstanding paragraph (2) or (3)” for “Notwithstanding paragraph (2)” and inserted “or which is recovery property (within the meaning of section 168),” after “3 years or more,”.\nSubsec. (c)(7).  Pub. L. 97–34, §\u202f211(a)(1) , added par. (7).\nSubsec. (c)(8).  Pub. L. 97–34, §\u202f211(f)(1) , added par. (8).\nSubsec. (c)(8)(D)(i)(I).  Pub. L. 97–34, §\u202f302(c)(3) , (d)(1), provided that, applicable to taxable years beginning after  Dec. 31, 1984 , subsection (c)(8)(D)(i)(I) of this section (relating to limitation to amount at risk) is amended by striking out “clause (i), (ii), or (iii) of subparagraph (A) or subparagraph (B) of section 128(c)(2)” and inserting in lieu thereof “subparagraph (A) or (B) of section 128(c)(1)”.  Section 16(a) of Pub. L. 98–369 , repealed  section 302(c) of Pub. L. 97–34 , and provided that this title shall be applied and administered as if section 302(c), and the amendments made by section 302(c), had not been enacted.\nSubsec. (c)(9).  Pub. L. 97–34, §\u202f211(f)(1) , added par. (9).\nSubsec. (d)(1).  Pub. L. 97–34, §\u202f211(b)(1) , designated existing provisions as subpar. (A), substituted “an amount equal to the aggregate of the applicable percentage of each qualified progress expenditure for the taxable year” for “an amount equal to his aggregate qualified progress expenditures for the taxable year” in subpar. (A) as so designated, and added subpar. (B).\nSubsec. (d)(2)(A)(ii).  Pub. L. 97–34, §\u202f211(b)(2) , struck out “having a useful life of 7 years or more” after “it is reasonable to believe will be new section 38 property”.\nSubsec. (e)(3).  Pub. L. 97–34, §\u202f211(d) , in provisions following subpar. (B), inserted provision that, for purposes of subpar. (B), in the case of any recovery property (within the meaning of section 168), the useful life be the present class life for such property (as defined in section 168(g)(2)).\n1980—Subsec. (a)(2)(A).  Pub. L. 96–222, §\u202f101(a)(7)(L)(iii)(I) , substituted “employee plan” for “ESOP”.\nSubsec. (a)(2)(C).  Pub. L. 96–223, §\u202f221(a) , revised provisions relating to energy percentage by substituting a tabular format embracing separate coverage for solar, wind, or geothermal property, ocean thermal property, qualified hydroelectric generating property, and biomass property using percentages varying between 10 and 15 percent and covering periods from  Oct. 1, 1978 , to  Dec. 31, 1985 , with longer periods for certain long-term projects and certain hydroelectric generating property for provisions that had set the energy percentage at 10 percent for the period beginning  Oct. 1, 1978 , and ending  Dec. 31, 1982 , and zero with respect to any other period.\nSubsec. (a)(2)(D).  Pub. L. 96–223, §\u202f222(e)(2) , inserted provision that in the case of any qualified hydroelectric generating property which is a fish passageway, the special rule for certain energy property embraced in the first sentence would not apply to any period after 1979 for which the energy percentage for such property is greater than zero.\nSubsec. (a)(2)(E).  Pub. L. 96–222, §\u202f101(a)(7)(L)(v)(I) , (M)(i), substituted in heading “employee plan” for “ESOP” and in cls. (i) and (ii) inserted “and ending on” before “ December 31, 1983 ”.\nSubsec. (a)(9).  Pub. L. 96–222, §\u202f103(a)(2)(B)(i) , redesignated par. (10) as (9). A former par. (9) was previously repealed by  section 312(b)(2) of Pub. L. 95–600 .\nSubsec. (a)(9)(A).  Pub. L. 96–223, §\u202f223(b)(1)(A) , inserted “and” at end of cl. (i), substituted a period for “(other than solar wind energy property), and” at end of cl. (ii), and struck out cl. (iii) which had provided for the application of so much of the credit allowed by section 38 as was attributable to the application of the energy percentage to solar or wind energy property.\nSubsec. (a)(9)(B).  Pub. L. 96–223 . §\u202f223(b)(1)(B), struck out “other than solar or wind energy property” after “energy property” in heading.\nPub. L. 96–222, §\u202f103(a)(2)(B)(ii) , (iii), substituted “paragraph (3)(B) shall be applied by substituting ‘100 percent’ for the percentage determined under the table contained in such paragraph” for “paragraph (3)(C) shall be applied by substituting ‘100 percent’ for ‘50 percent’\u202f” in cl. (i) and “(7) and (8)” for “(7), (8), and (9)” in cl. (ii).\nSubsec. (a)(9)(C).  Pub. L. 96–223, §\u202f223(b)(1)(C) , struck out subpar. (C) which related to a refundable credit for solar or wind energy property.\nSubsec. (a)(10).  Pub. L. 96–222, §\u202f103(a)(2)(B)(i) , redesignated par. (10) as (9).\nSubsec. (c)(5)(B).  Pub. L. 96–222, §\u202f103(a)(3) , inserted provisions requiring that this subparagraph not apply for purposes of applying the energy percentage.\nSubsec. (e)(3).  Pub. L. 96–222, §\u202f103(a)(4)(A) , inserted provisions requiring that this paragraph not apply with respect to any property which is treated as section 38 property by reason of section 48(a)(1)(E).\nSubsec. (f)(1), (2).  Pub. L. 95–600, §\u202f312(c)(2) , as amended by  Pub. L. 96–222, §\u202f103(a)(2)(A) , substituted “\u202f‘described in section 50 (as in effect before its repeal by the Revenue Act of 1978)’\u202f” for “\u202f‘described in section 50’\u202f”.\nSubsec. (f)(8).  Pub. L. 96–222, §\u202f107(a)(3)(A) , substituted “subsection (a)(7)(C)” for “subsection (a)(7)(D)”.\nSubsec. (f)(9).  Pub. L. 96–222, §\u202f101(a)(7)(A) , substituted in provisions preceding subpar. (A) “subparagraph (E) of subsection (a)(2)” for “subparagraph (B) of subsection (a)(2)” and in subpar. (A) “a tax credit employee stock ownership plan which meets the requirements of section 409A” for “an employee ownership plan which meets the requirements of section 301(d) of the Tax Reduction Act of 1975”.\n1978—Subsec. (a)(2).  Pub. L. 95–618, §\u202f301(a)(1) , among other changes, inserted provisions relating to an alternative energy property tax credit which would pay for a certain percentage of the cost of equipment which uses sources of energy other than oil and gas and of associated pollution control, handling, and preparation equipment.\nSubsec. (a)(2)(B).  Pub. L. 95–600, §\u202f311(a) , made 10 percent limitation on investment tax credit permanent.\nSubsec. (a)(2)(E).  Pub. L. 95–600, §\u202f141(e) , (f)(2), substituted “ December 31, 1983 ” for “and ending on  December 31, 1980 ” wherever appearing, “section 48(n)(1)(B)” for “section 301(e) of the Tax Reduction Act of 1975” and “section 409A” for “section 301(d) of the Tax Reduction Act of 1975”.\nSubsec. (a)(3).  Pub. L. 95–600, §\u202f312(a) , increased the present 50 percent tax liability limitation to 90 percent, to be phased in at an additional 10 percentage points per year beginning with taxable years which end in 1979.\nSubsec. (a)(7).  Pub. L. 95–600, §\u202f312(b)(1) , in subpar. (A) substituted “the taxable year ending in 1979” for “a taxable year ending after calendar year 1974 and before calendar year 1981”, “subparagraph (B)” for “subparagraph (C)”, and “for ‘60 percent’ the taxpayer’s” for “for 50 percent his” and inserted “the application of this paragraph results in a percentage higher than 60 percent,” before “then subparagraph (B)”; in subpar. (B) substituted “70 percent” for “50 percent plus the tentative percentage for such year”; struck out former subpar. (C), which related to the determination of the tentative percentage, and redesignated former subpar. (D) as (C).\nSubsec. (a)(8).  Pub. L. 95–600, §\u202f312(b)(2) , in subpar. (A) substituted “the taxable year ending in 1979” for “a taxable year ending after calendar year 1976, and before calendar year 1983”, “subparagraph (B)” for “subparagraph (C)”, and “for ‘60 percent’ (‘70 percent’ in the case of a taxable year ending in 1980) the taxpayer’s” for “for 50 percent his” and inserted reference to airline property and “the application of this paragraph results in a percentage higher than 60 percent (70 percent in the case of a taxable year ending in 1980),” before “then subparagraph (B)”; in subpar. (B) inserted reference to airline property and substituted “90 percent (80 percent in the case of a taxable year ending in 1980)” for “50 percent plus the tentative percentage for such year”; in subpar. (C) table struck out tentative percentage of 50 for 1977 or 1978, 20 for 1981, and 10 for 1982; and added subpar. (E).\nSubsec. (a)(9).  Pub. L. 95–600, §\u202f312(b)(2) , struck out par. (9) which related to the alternative limitation in the case of certain airlines.\nSubsec. (a)(10).  Pub. L. 95–618, §\u202f301(c)(1) , added par. (10).\nSubsec. (c)(3)(A).  Pub. L. 95–618, §\u202f301(a)(2)(A) , substituted “For the period beginning on  January 1, 1981 , in the case of any property” for “To the extent that subsection (a)(2)(C) applies to property” and inserted provisions that the preceding sentence not apply for purposes of applying the energy percentage.\nPub. L. 95–600, §\u202f311(c)(1) , substituted “To the extent that the credit allowed by section 38 with respect to any public utility property is determined at the rate of 7 percent” for “For the period beginning on  January 1, 1981 ”.\nSubsec. (c)(5).  Pub. L. 95–600, §\u202f313(a) , increased the investment credit available to pollution control facilities which a taxpayer has elected to amortize over a five-year period to a full investment credit from a one-half investment credit.\nSubsec. (c)(6).  Pub. L. 95–618, §\u202f241(a) , added par. (6).\nSubsec. (e)(1)(C).  Pub. L. 95–600, §\u202f316(b)(1) , struck out subpar. (C) which related to a cooperative organization described in section 1381(a).\nSubsec. (e)(2)(C).  Pub. L. 95–600, §\u202f316(b)(2) , struck out subpar. (C) which related to a cooperative organization.\nSubsec. (f)(1), (2).  Pub. L. 95–600, §\u202f312(c)(2) , struck out “described in section 50” after “with respect to any property”. See 1980 Amendment note above.\nSubsec. (f)(8).  Pub. L. 95–618, §\u202f301(a)(2)(B) , substituted “,\u2000the Tax Reform Act of 1976, and the Energy Tax Act of 1978” for “and the Tax Reform Act of 1976”.\nPub. L. 95–600 , §§\u202f311(c)(2), 703(a)(1), substituted “subsection (a)(7)(D)” for “subsection (a)(6)(D)” and inserted reference to the Revenue Act of 1978.\nSubsec. (g)(5).  Pub. L. 95–600, §\u202f703(a)(2) , substituted “Merchant Marine Act, 1936” for “Merchant Marine Act, 1970”.\nSubsec. (h).  Pub. L. 95–600, §\u202f316(a) , added subsec. (h).\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f802(a)(2) , added par. (1) and struck out former par. (1) which related to the percentage of allowable credit under section 38.\nSubsec. (a)(2).  Pub. L. 94–455, §\u202f802(a)(2) , added par. (2). Former par. (2) redesignated (3).\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f802(a)(1) , redesignated former par. (2) as (3). Former par. (3) redesignated (4).\nSubsec. (a)(4).  Pub. L. 94–455 , §§\u202f503(b)(4), 802(a)(1), (b)(1), 1901(a)(4)(A), (b)(1)(C), as amended by  Pub. L. 95–600, §\u202f703(j)(9) , redesignated former par. (3) as (4), and in par. (4) as so redesignated, redesignated former subpar. (C) as (B) and substituted in provisions preceding subpar. (A) “paragraph (3)” for “paragraph (2)”, in subpar. (B) as so redesignated “credit for the elderly” for “retirement income”, and in provisions following subpar. (B) “section 408(f)” for “section 408(e)”. Former par. (4) redesignated (5).\nSubsec. (a)(5).  Pub. L. 94–455, §\u202f802(a)(1) , (b)(1), redesignated former par. (4) as (5) and substituted “paragraph (3)” for “paragraph (2)”. Former par. (5) redesignated (6).\nSubsec. (a)(6).  Pub. L. 94–455 , §§\u202f802(a)(1), (b)(1), 1906(b)(13)(A), redesignated former par. (5) as (6) and substituted “paragraph (3)” for “paragraph (2)” and struck out “or his delegate” after “Secretary”. Former par. (6) redesignated (7).\nSubsec. (a)(7).  Pub. L. 94–455, §\u202f802(a)(1) , (b)(1), redesignated former par. (6) as (7) and substituted “paragraph (3)” for “paragraph (2)”.\nSubsec. (a)(8).  Pub. L. 94–455, §\u202f1701(b) , added par. (8).\nSubsec. (a)(9).  Pub. L. 94–455, §\u202f1703 , added par. (9).\nSubsec. (b).  Pub. L. 94–455, §\u202f802(b)(2) , among other changes, inserted requirement that tax credits carried over are applied first to the tax liability for that year, after which tax credits earned currently are then applied.\nSubsec. (c)(3)(A).  Pub. L. 94–455, §\u202f802(b)(3) , substituted “subsection (a)(2)(C)” for “subsection (a)(1)(C)”.\nSubsec. (c)(3)(B)(iii).  Pub. L. 94–455, §\u202f1901(a)(4)(B) , substituted “ 47 U.S.C. 222(a)(5) ” for “47 U.S.C., sec. 222(a)(5)”.\nSubsec. (c)(5).  Pub. L. 94–455, §\u202f2112(a)(2) , added par. (5).\nSubsec. (d)(4)(D), (6).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(1)(C).  Pub. L. 94–455, §\u202f802(b)(4) , substituted “subsection (a)(3)” for “subsection (a)(2)”.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1607(b)(1)(B) , substituted in subpar. (B) “857(b)(2)(B)” for “857(b)(2)(C)” and inserted in provisions following subpar. (C) reference to determine without regard to any deduction for capital gains dividends (as defined in section 857(b)(3)(C)) and by excluding any net capital gain.\nSubsec. (f)(1)(B), (2), (3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f)(4)(A).  Pub. L. 94–455, §\u202f803(b)(1)(A) , (B), substituted “paragraphs (1), (2), and (9)” for “paragraphs (1) and (2)” and “paragraph (1), (2), or (9)” for “paragraph (1) or (2)” wherever appearing.\nSubsec. (f)(4)(B)(ii).  Pub. L. 94–455, §\u202f803(b)(1)(C) , substituted “paragraph (2) or the election described in paragraph (9),” for “paragraph (2),”.\nSubsec. (f)(7).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f)(8).  Pub. L. 94–455 , §§\u202f802(b)(5), 1906(b)(13)(A), inserted reference to the Tax Reform Act of 1976 and struck out “or his delegate” after “Secretary”.\nSubsec. (f)(9).  Pub. L. 94–455, §\u202f803(a) , added par. (9).\nSubsec. (g).  Pub. L. 94–455, §\u202f805(a) , added subsec. (g).\n1975—Subsec. (a)(1).  Pub. L. 94–12, §\u202f301(a) , designated existing provisions as subpar. (A), substituted “Except as otherwise provided in this paragraph, in the case of a property described in subparagraph (D), the” for “The”, “10 percent” for “7 percent”, and “(as determined under subsections (c) and (d))” for “(as defined in subsection (c))” in subpar. (A) as so designated, and added subpars. (B), (C), and (D).\nSubsec. (a)(6).  Pub. L. 94–12, §\u202f301(b)(2) , added par. (6).\nSubsec. (c)(3)(A).  Pub. L. 94–12, §\u202f301(b)(1) , substituted “To the extent that subsection (a)(1)(C) applies to property which is public utility property, the” for “In the case of section 38 property which is public utility property, the”.\nSubsec. (c)(4).  Pub. L. 94–12, §\u202f302(b)(1) , added par. (4).\nSubsecs. (d), (e).  Pub. L. 94–12, §\u202f302(a) , added subsec. (d) and redesignated former subsec. (d) as (e). Former subsec. (e) redesignated (f) and amended.\nSubsec. (f).  Pub. L. 94–12 , §§\u202f301(b)(3), 302(a), redesignated former subsec. (e) as (f) and in subsec. (f) as so redesignated added par. (8).\n1974—Subsec. (a)(3).  Pub. L. 93–406  inserted reference to section 402(e) (relating to tax on lump sum distributions), section 72(m)(5)(B) (relating to 10 percent tax on premature distributions to owner-employees), and section 408(e) (relating to additional tax on income from certain retirement accounts).\n1971—Subsec. (b)(1).  Pub. L. 92–178, §\u202f106(b) , inserted concluding sentence “In the case of an unused credit for an unused credit year ending before  January 1, 1971 , which is an investment credit carryover to a taxable year beginning after  December 31, 1970  (determined without regard to this sentence), this paragraph shall be applied by substituting ‘10 taxable years’ for ‘7 taxable years’ in subparagraph (B) and by substituting ‘13 taxable years’ for ‘10 taxable years’ and ‘12 taxable years’ for ‘9 taxable years’ in the preceding sentence.”\nSubsec. (b)(3).  Pub. L. 92–178, §\u202f106(a) , added par. (3).\nSubsec. (b)(5).  Pub. L. 92–178, §\u202f106(c)(1) , substituted “Certain taxable years ending in 1969, 1970, or 1971” for “Taxable years beginning after  December 31, 1968 , and ending after  April 18, 1969 ” in heading; substituted “ending after  April 18, 1969 , and before  January 1, 1972 ,” for “ending after  April 18, 1969 ,”; and provided that “In the case of a taxable year ending after  August 15, 1971 , and before  January 1, 1972 , the percentage contained in the preceding sentence shall be increased by 6 percentage points for each month (or portion thereof) in the taxable year after  August 15, 1971 ”.\nSubsec. (b)(6).  Pub. L. 92–178, §\u202f106(c)(2) , substituted “ending after  April 18, 1969 , and before  January 1, 1971 ,” for “ending after  April 18, 1969 ,” and “following the 7th taxable year after the unused credit year” for “following the last taxable year for which such portion may be added under paragraph (1)”, respectively.\nSubsec. (c)(2).  Pub. L. 92–178, §\u202f102(a)(1) , (b), substituted “3 years”, “5 years”, and “7 years” for “4 years” (once), “6 years” (twice), and “8 years” (twice), respectively in tables of first sentence and substituted in second sentence “subpart” for “paragraph” and “useful life of any property shall be the useful life used in computing the allowance for depreciation under section 167 for the taxable year in which the property is placed in service” for “useful life of any property shall be determined as of the time such property is placed in service by the taxpayer”.\nSubsec. (c)(3)(A).  Pub. L. 92–178, §\u202f105(a) , substituted the fraction of “ 4 ⁄ 7 ” for “ 3 ⁄ 7 ”.\nSubsec. (c)(3)(B).  Pub. L. 92–178, §\u202f105(b)(1) , (2), struck out cl. (iii) provisions respecting telephone service, redesignated cl. (iv) as (iii), included in cl. (iii) provision of former cl. (iii) respecting telephone service, included other communication services (other than international telegraph service), and defined term “public utility property” to also mean communication property of type used by persons engaged in providing telephone or microwave communication services to which cl. (iii) applies, if such property is used predominantly for communication purposes, respectively.\nSubsec. (c)(3)(C).  Pub. L. 92–178, §\u202f105(b)(3) , added subpar. (C).\nSubsec. (c)(4).  Pub. L. 92–178, §\u202f107(a)(1) , struck out provisions respecting reduction in basis or cost of certain replacement property.\nSubsec. (d)(3).  Pub. L. 92–178, §\u202f108(a) , added par. (3).\nSubsec. (e).  Pub. L. 92–178, §\u202f105(c) , added subsec. (e).\n1969—Subsec. (a)(3).  Pub. L. 91–172, §\u202f301(b)(4) , inserted “section 56 (relating to minimum tax for tax preference),”.\nSubsec. (a)(5).  Pub. L. 91–172, §\u202f401(e)(1) , reenacted subsection with minor changes and substituted reference to section 1563(a) for reference to section 1504.\nSubsec. (b)(5), (6).  Pub. L. 91–172, §\u202f703(b) , added pars. (5) and (6).\n1967—Subsec. (b).  Pub. L. 90–225  struck out par. (3) which provided that to the extent that the excess described in par. (1) of this subsection arises by reason of net operating loss carryback, subpar. (A) of par. (1) of this subsection shall not apply.\n1966—Subsec. (a)(2).  Pub. L. 89–800, §\u202f3(a) , inserted “for taxable years ending on or before the last day of the suspension period (as defined in section 48(j)),” at beginning of subpar. (B), and added subpar. (C) and provisions following subpar. (C) covering the application of subpar. (C) and the reduction of the amount otherwise determined under par. (2) by the credit allowable but for the application of section 48(h)(1).\nSubsec. (a)(3).  Pub. L. 89–389  inserted reference to tax imposed for the taxable year by section 1378 (relating to tax on certain capital gains of subchapter S corporations) in the list of taxes not to be considered tax imposed by this chapter for purposes of par. (3).\nPub. L. 89–384  added any additional tax imposed for the taxable year by section 1351 (relating to recoveries of foreign expropriation losses) to the list of taxes not to be considered a tax imposed by this chapter for purposes of par. (3).\nSubsec. (b)(1).  Pub. L. 89–800, §\u202f3(b) , substituted “7 taxable years” for “5 taxable years” in subpar. (B) and “10 taxable years” and “other 9 taxable years” for “8 taxable years” and “other 7 taxable years”, respectively, in text following subpar. (B).\n1964—Subsec. (a)(3)(B) to (D).  Pub. L. 88–272  struck out subpar. (B) relating to section 34, and redesignated subpars. (C) and (D) as (B) and (C), respectively.\nAmendment by  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2024 , see  section 13702(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 48E of this title .\nAmendment by  Pub. L. 117–167  applicable to property placed in service after  Dec. 31, 2022 , and, for any property the construction of which begins prior to  Jan. 1, 2023 , only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after  Aug. 9, 2022 , see  section 107(f) of Pub. L. 117–167 , set out as a note under  section 905 of Title 2 , The Congress.\nPub. L. 111–148, title IX, §\u202f9023(f) ,  Mar. 23, 2010 ,  124 Stat. 883 , provided that:  “The amendments made by subsections (a) through (d) of this section [enacting  section 48D of this title  and amending this section and sections 49 and 280C of this title] shall apply to amounts paid or incurred after  December 31, 2008 , in taxable years beginning after such date.”\nPub. L. 111–5, div. B, title I, §\u202f1302(d) ,  Feb. 17, 2009 ,  123 Stat. 348 , provided that:  “The amendments made by this section [enacting  section 48C of this title  and amending this section and  section 49 of this title ] shall apply to periods after the date of the enactment of this Act [ Feb. 17, 2009 ], under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nPub. L. 109–58, title XIII, §\u202f1307(d) ,  Aug. 8, 2005 ,  119 Stat. 1006 , provided that:  “The amendments made by this section [enacting sections 48A and 48B of this title and amending this section and  section 49 of this title ] shall apply to periods after the date of the enactment of this Act [ Aug. 8, 2005 ], under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nPub. L. 108–357, title III, §\u202f322(e) ,  Oct. 22, 2004 ,  118 Stat. 1476 , provided that:  “The amendments made by this section [amending this section and sections 48, 50, and 194 of this title] shall apply with respect to expenditures paid or incurred after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  section 11813(a) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  section 7814(d) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by sections 1002(a)(4), (15), (17), (25), 1009(a)(1), and 1013(a)(44) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(7)(B) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nPub. L. 99–514, title II, §\u202f251(d) ,  Oct. 22, 1986 ,  100 Stat. 2186 , as amended by  Pub. L. 100–647, title I, §\u202f1002(k) ,  Nov. 10, 1988 ,  102 Stat. 3371 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 48 of this title ] shall apply to property placed in service after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   General transitional rule .— The amendments made by this section and section 201 [amending this section and sections 48, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any property placed in service before  January 1, 1994 , if such property is placed in service as part of— “(A)  a rehabilitation which was completed pursuant to a written contract which was binding on  March 1, 1986 , or \n \n “(B)  a rehabilitation incurred in connection with property (including any leasehold interest) acquired before  March 2, 1986 , or acquired on or after such date pursuant to a written contract that was binding on  March 1, 1986 , if— “(i)  parts 1 and 2 of the Historic Preservation Certification Application were filed with the Department of the Interior (or its designee) before  March 2, 1986 , or \n \n “(ii)  the lesser of $1,000,000 or 5 percent of the cost of the rehabilitation is incurred before  March 2, 1986 , or is required to be incurred pursuant to a written contract which was binding on  March 1, 1986 . \n \n \n \n “(3)   Certain additional rehabilitations .— The amendments made by this section and section 201 [amending this section and sections 48, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to— “(A)  the rehabilitation of 8 bathhouses within the Hot Springs National Park or of buildings in the Central Avenue Historic District at such Park, \n \n “(B)  the rehabilitation of the Upper Pontalba Building in New Orleans, Louisiana, \n \n “(C)  the rehabilitation of at least 60 buildings listed on the National Register at the Frankford Arsenal, \n \n “(D)  the rehabilitation of De Baliveriere Arcade, St. Louis Centre, and Drake Apartments in Missouri, \n \n “(E)  the rehabilitation of The Tides in Bristol, Rhode Island, \n \n “(F)  the rehabilitation and renovation of the Outlet Company building and garage in Providence, Rhode Island, \n \n “(G)  the rehabilitation of 10 structures in Harrisburg, Pennsylvania, with respect to which the Harristown Development Corporation was designated redeveloper and received an option to acquire title to the entire project site for $1 on  June 27, 1984 , \n \n “(H)  the rehabilitation of a project involving the renovation of 3 historic structures on the Minneapolis riverfront, with respect to which the developer of the project entered into a redevelopment agreement with a municipality dated  January 4, 1985 , and industrial development bonds were sold in 3 separate issues in May, July, and October 1985, \n \n “(I)  the rehabilitation of a bank’s main office facilities of approximately 120,000 square feet, in connection with which the bank’s board of directors authorized a $3,300,000 expenditure for the renovation and retrofit on  March 20, 1984 , \n \n “(J)  the rehabilitation of 10 warehouse buildings built between 1906 and 1910 and purchased under a contract dated  February 17, 1986 , \n \n “(K)  the rehabilitation of a facility which is customarily used for conventions and sporting events if an analysis of operations and recommendations of utilization of such facility was prepared by a certified public accounting firm pursuant to an engagement authorized on  March 6, 1984 , and presented on  June 11, 1984 , to officials of the city in which such facility is located, \n \n “(L)  Mount Vernon Mills in Columbia, South Carolina, \n \n “(M)  the Barbara Jordan II Apartments, \n \n “(N)  the rehabilitation of the Federal Building and Post Office, 120 Hanover Street, Manchester, New Hampshire, \n \n “(O)  the rehabilitation of the Charleston Waterfront project in South Carolina, \n \n “(P)  the Hayes Mansion in San Jose, California, \n \n “(Q)  the renovation of a facility owned by the National Railroad Passenger Corporation (‘Amtrak’) for which project Amtrak engaged a development team by letter agreement dated  August 23, 1985 , as modified by letter agreement dated  September 9, 1985 , \n \n “(R)  the rehabilitation of a structure or its components which is listed in the National Register of Historic Places, is located in Allegheny County, Pennsylvania, will be substantially rehabilitated (as defined in section 48(g)(1)(C) prior to amendment by this Act), prior to  December 31, 1989 ; and was previously utilized as a market and an auto dealership, \n \n “(S)  The Bellevue Stratford Hotel in Philadelphia, Pennsylvania, \n \n “(T)  the Dixon Mill Housing project in Jersey City, New Jersey, \n \n “(U)  Motor Square Garden, \n \n “(V)  the Blackstone Apartments, and the Shriver-Johnson building, in Sioux Falls, South Dakota, \n \n “(W)  the Holy Name Academy in Spokane, Washington, \n \n “(X)  the Nike/Clemson Mill in Exeter, New Hampshire, \n \n “(Y)  the Central Bank Building in Grand Rapids, Michigan, and \n \n “(Z)  the Heritage Hotel, in the City of Marquette, Michigan. \n \n \n “(4)   Additional rehabilitations .— The amendments made by this section and section 201 [amending sections 46, 48, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to— “(A)  the Fort Worth Town Square Project in Texas, \n \n “(B)  the American Youth Hostel in New York, New York, \n \n “(C)  The Riverwest Loft Development (including all three phases, two of which do not involve rehabilitations), \n \n “(D)  the Gaslamp Quarter Historic District in California, \n \n “(E)  the Eberhardt & Ober Brewery, in Pennsylvania, \n \n “(F)  the Captain’s Walk Limited Partnership-Harris Place Development, in Connecticut, \n \n “(G)  the Velvet Mills in Connecticut, \n \n “(H)  the Roycroft Inn, in New York, \n \n “(I)  Old Main Village, in Mankato, Minnesota, \n \n “(J)  the Washburn-Crosby A Mill, in Minneapolis, Minnesota, \n \n “(K)  the Marble Arcade office building in Lakeland, Florida, \n \n “(L)  the Willard Hotel, in Washington, D.C., \n \n “(M)  the H. P. Lau Building in Lincoln, Nebraska, \n \n “(N)  the Starks Building, in Louisville, Kentucky, \n \n “(O)  the Bellevue High School, in Bellevue, Kentucky, \n \n “(P)  the Major Hampden Smith House, in Owensboro, Kentucky, \n \n “(Q)  the Doe Run Inn, in Brandenburg, Kentucky, \n \n “(R)  the State National Bank, in Frankfort, Kentucky, \n \n “(S)  the Captain Jack House, in Fleming, Kentucky, \n \n “(T)  the Elizabeth Arlinghaus House, in Covington, Kentucky, \n \n “(U)  Limerick Shamrock, in Louisville, Kentucky, \n \n “(V)  the Robert Mills Project, in South Carolina, \n \n “(W)  the 620 Project, consisting of 3 buildings, in Kentucky, \n \n “(X)  the Warrior Hotel, Ltd., the first two floors of the Martin Hotel, and the 105,000 square foot warehouse constructed in 1910, all in Sioux City, Iowa, \n \n “(Y)  the waterpark condominium residential project, to the extent of $2 million of expenditures, \n \n “(Z)  the Bigelow-Hartford Carpet Mill in Enfield, Connecticut, \n \n “(AA)  properties abutting 125th street in New York County from 7th Avenue west to Morningside and the pier area on the Hudson River at the end of such 125th Street, \n \n “(BB)  the City of Los Angeles Central Library project pursuant to an agreement dated  December 28, 1983 , \n \n “(CC)  the Warehouse Row project in Chattanooga, Tennessee, \n \n “(DD)  any project described in section 204(a)(1)(F) of this Act [ 26 U.S.C. 168  note], \n \n “(EE)  the Wood Street Commons project in Pittsburgh, Pennsylvania, \n \n “(FF)  any project described in section 803(d)(6) of this Act [ 26 U.S.C. 263A  note], \n \n “(GG)  Union Station, Indianapolis, Indiana, \n \n “(HH)  the Mattress Factory project in Pittsburgh, Pennsylvania, \n \n “(II)  Union Station in Providence, Rhode Island, \n \n “(JJ)  South Pack Plaza, Asheville, North Carolina, \n \n “(KK)  Old Louisville Trust Project, Louisville, Kentucky, \n \n “(LL)  Stewarts Rehabilitation Project, Louisville, Kentucky, \n \n “(MM)  Bernheim Officenter, Louisville, Kentucky, \n \n “(NN)  Springville Mill Project, Rockville, Connecticut, and \n \n “(OO)  the D.J. Stewart Company Building, State and Main Streets, Rockford, Illinois. \n \n \n “(5)   Reduction in credit for property under transitional rules .— In the case of property placed in service after  December 31, 1986 , and to which the amendments made by this section [amending this section and sections 47 and 48 of this title] do not apply, subparagraph (A) of section 46(b)(4) of the Internal Revenue Code of 1954 [now 1986] (as in effect before the enactment of this Act) shall be applied— “(A)  by substituting ‘10 percent’ for ‘15 percent’, and \n \n “(B)  by substituting ‘13 percent’ for ‘20 percent’. \n \n \n “(6)   Expensing of rehabilitation expenses for the frankford arsenal .— In the case of any expenditures paid or incurred in connection with improvements (including repairs and maintenance) of the Frankford Arsenal pursuant to a contract and partnership agreement during the 8-year period specified in the contract or agreement, all such expenditures to be made during the period 1986 through and including 1993 shall— “(A)  be treated as made (and allowable as a deduction) during 1986, \n \n “(B)  be treated as qualified rehabilitation expenditures made during 1986, and \n \n “(C)  be allocated in accordance with the partnership agreement regardless of when the interest in the partnership was acquired, except that— “(i)  if the taxpayer is not the original holder of such interest, no person (other than the taxpayer) had claimed any benefits by reason of this paragraph, \n \n “(ii)  no interest under section 6611 of the 1986 Code on any refund of income taxes which is solely attributable to this paragraph shall be paid for the period— “(I)  beginning on the date which is 45 days after the later of  April 15, 1987 , or the date on which the return for such taxes was filed, and \n \n “(II)  ending on the date the taxpayer acquired the interest in the partnership, and \n \n \n “(iii)  if the expenditures to be made under this provision are not paid or incurred before  January 1, 1994 , then the tax imposed by chapter 1 of such Code for the taxpayer’s last taxable year beginning in 1993 shall be increased by the amount of the tax benefits by reason of this paragraph which are attributable to the expenditures not so paid or incurred. \n \n \n \n “(7)   Special rule .— In the case of the rehabilitation of the Willard Hotel in Washington, D.C., section 205(c)(1)(B)(ii) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 205(c)(1)(B)(ii) of Pub. L. 97–248 , set out as a note under  section 196 of this title ] shall be applied by substituting ‘1987’ for ‘1986’.”\nPub. L. 99–514, title IV, §\u202f421(c) ,  Oct. 22, 1986 ,  100 Stat. 2229 , provided that:  “The amendments made by this section [amending this section] shall apply to periods beginning after  December 31, 1985 , under rules similar to rules under section 48(m) of the Internal Revenue Code of 1986.”\nAmendment by sections 1802(a)(6), (8), 1844(a), (b)(3), (5), 1847(b)(11), 1848(a) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 16 of Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nAmendment by  section 31(f) of Pub. L. 98–369  effective, except as otherwise provided in  section 31(g) of Pub. L. 98–369 , as to property placed in service by the taxpayer after  Nov. 5, 1983 , in taxable years ending after such date and to property placed in service by the taxpayer on or before  Nov. 5, 1983 , if the lease to the organization described in  section 593 of this title  is entered into after  Nov. 5, 1983 , see section 31(g)(1), (14) of  Pub. L. 98–369 , set out as a note under  section 168 of this title .\nAmendment by  section 113(b)(2)(B) of Pub. L. 98–369  applicable as if included in the amendments by sections 201(a), 211(a)(1), and 211(f)(1) of  Pub. L. 97–34 , which amended this section and enacted  section 168 of this title , see  section 113(c)(2)(B) of Pub. L. 98–369 , set out as a note under  section 168 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f431(e) ,  July 18, 1984 ,  98 Stat. 810 , provided: \n “(1)   In general .— The amendments made by this section [amending this section and sections 47 and 48 of this title] shall apply to property placed in service after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date; except that such amendments shall not apply to any property to which the amendments made by section 211(f) of the Economic Recovery Tax Act of 1981 [ section 211(f) of Pub. L. 97–34 , amending sections 46 and 47 of this title] do not apply. \n \n “(2)   Amendments may be elected retroactively .— At the election of the taxpayer, the amendments made by this section shall apply as if included in the amendments made by section 211(f) of the Economic Recovery Tax Act of 1981. Any election made under the preceding sentence shall apply to all property of the taxpayer to which the amendments made by such section 211(f) apply and shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe.”\nAmendment by section 474( o )(1)–(7) of  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  section 122(c)(1) of Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under  section 105(d)(6) of this title  as in effect on the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21 , set out as a note under  section 22 of this title .\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 202(f) of Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980,  Pub. L. 96–223 , to which such amendment relates, see  section 203(a) of Pub. L. 97–448 , set out as a note under  section 6652 of this title .\nPub. L. 97–424, title V, §\u202f541(c) ,  Jan. 6, 1983 ,  96 Stat. 2193 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule.— The amendments made by subsections (a) and (b) [amending this section and sections 167 and 168 of this title] shall apply to taxable years beginning after  December 31, 1979 . \n \n “(2)   Special rule for periods beginning before  march 1, 1980 .— “(A)   In general.— Subject to the provisions of paragraphs (3) and (4), notwithstanding the provisions of sections 167( l ) and 46(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] and of any regulations prescribed by the Secretary of the Treasury (or his delegate) under such sections, the use for ratemaking purposes or for reflecting operating results in the taxpayer’s regulated books of account, for any period before  March 1, 1980 , of— “(i)  any estimates or projections relating to the amounts of the taxpayer’s tax expense, depreciation expense, deferred tax reserve, credit allowable under section 38 of such code, or rate base, or \n \n “(ii)  any adjustments to the taxpayer’s rate of return, \n \n\n shall not be treated as inconsistent with the requirements of subparagraph (G) of such section 167( l )(3) nor inconsistent with the requirements of paragraph (1) or (2) of such section 46(f), where such estimates or projections, or such rate of return adjustments, were included in a qualified order. \n \n “(B)   Qualified order defined.— For purposes of this subsection, the term “qualified order” means an order— “(i)  by a public utility commission which was entered before  March 13, 1980 , \n \n “(ii)  which used the estimates, projections, or rate of return adjustments referred to in subparagraph (A) to determine the amount of the rates to be collected by the taxpayer or the amount of a refund with respect to rates previously collected, and \n \n “(iii)  which ordered such rates to be collected or refunds to be made (whether or not such order actually was implemented or enforced). \n \n \n \n “(3)   Limitations on application of paragraph (2).— “(A)   Paragraph (2) not to apply to amounts actually flowed through.— Paragraph (2) shall not apply to the amount of any— “(i)  rate reduction, or \n \n “(ii)  refund, \n \n\n which was actually made pursuant to a qualified order. \n \n “(B)   Taxpayer must enter into closing agreement before paragraph (2) applies.— Paragraph (2) shall not apply to any taxpayer unless, before the later of— “(i)   July 1, 1983 , or \n \n “(ii)  6 months after the refunds or rate reductions are actually made pursuant to a qualified order. \n \n\n the taxpayer enters into a closing agreement (within the meaning of section 7121 of the Internal Revenue Code of 1986) which provides for the payment by the taxpayer of the amount of which paragraph (2) does not apply by reason of subparagraph (A). \n \n \n “(4)   Special rules relating to payment of refunds or interest by the united states or the taxpayer.— “(A)   Refund defined.— For purposes of this subsection, the term “refund” shall include any credit allowed by the taxpayer under a qualified order but shall not include interest payable with respect to any refund (or credit) under such order. \n \n “(B)   No interest payable by united states.— No interest shall be payable under section 6611 of the Internal Revenue Code of 1986 on any overpayment of tax which is attributable to the application of paragraph (2). \n \n “(C)   Payments may be made in two equal installments.— “(i)   In general.— The taxpayer may make any payment required by reason of paragraph (3) in 2 equal installments, the first installment being due on the last date on which a taxpayer may enter into a closing agreement under paragraph (3)(B), and the second payment being due 1 year after the last date for the first payment. \n \n “(ii)   Interest payments.— For purposes of section 6601 of such Code, the last date prescribed for payment with respect to any payment required by reason of paragraph (3) shall be the last date on which such payment is due under clause (i). \n \n \n \n “(5)   No inference .— The application of subparagraph (G) of section 167( l )(3) of the Internal Revenue Code of 1986, and the application of paragraphs (1) and (2) of section 46(f) of such Code, to taxable years beginning before  January 1, 1980 , shall be determined without any inference drawn from the amendments made by subsections (a) and (b) of this section [amending this section and sections 167 and 168 of this title] or from the rules contained in paragraphs (2), (3), and (4). Nothing in the preceding sentence shall be construed to limit the relief provided by paragraphs (2), (3), and (4).”\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by section 201(d)(8)(A), formerly section 201(c)(8)(A), of  Pub. L. 97–248 , applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nPub. L. 97–248, title II, §\u202f205(c)(2) ,  Sept. 3, 1982 ,  96 Stat. 431 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1982 .”\nAmendment by  section 265(b)(2)(A)(i) of Pub. L. 97–248  applicable to distributions after  Dec. 31, 1982 , see  section 265(c)(2) of Pub. L. 97–248 , set out as a note under  section 72 of this title .\nAmendment by  section 207(c)(1) of Pub. L. 97–34  applicable to unused credit years ending after  Dec. 31, 1973 , see  section 209(c)(2)(A) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nPub. L. 97–34, title II, §\u202f211(i) ,  Aug. 13, 1981 ,  95 Stat. 235 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 47 and 48 of this title] shall apply to property placed in service after  December 31, 1980 . \n \n “(2)   Progress expenditures .— The amendments made by subsection (b) [amending this section] shall apply to progress expenditures made after  December 31, 1980 . \n \n “(3)   Petroleum storage facilities .— The amendments made by subsection (c) [amending this section] shall apply to periods after  December 31, 1980 , under rules similar to the rules under section 48(m). \n \n “(4)   Noncorporate lessors .— The amendments made by subsection (d) [amending this section] shall apply to leases entered into after  June 25, 1981 . \n \n “(5)   At risk rules.— “(A)   In general .— The amendment made by subsection (f) [amending this section and  section 47 of this title ] shall not apply to— “(i)  property placed in service by the taxpayer on or before  February 18, 1981 , and \n \n “(ii)  property placed in service by the taxpayer after  February 18, 1981 , where such property is acquired by the taxpayer pursuant to a binding contract entered into on or before that date. \n \n \n “(B)   Binding contract .— For purposes of subparagraph (A)(ii), property acquired pursuant to a binding contract shall, under regulations prescribed by the Secretary, include property acquired in a manner so that it would have qualified as pretermination property under section 49(b) (as in effect before its repeal by the Revenue Act of 1978) [ Pub. L. 95–600 ]. \n \n \n “(6)   Leased rolling stock .— The amendment made by subsection (h) [amending  section 48 of this title ] shall apply to taxable years beginning after  December 31, 1980 .”\nPub. L. 97–34, title II, §\u202f212(e) ,  Aug. 13, 1981 ,  95 Stat. 239 , as amended by  Pub. L. 97–448, title I, §\u202f102(f)(1) ,  Jan. 12, 1983 ,  96 Stat. 2371 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 48, 57, 167, 280B, 642, 1016, 1082, 1245, and 1250 of this title and repealing  section 191 of this title ] shall apply to expenditures incurred after  December 31, 1981 , in taxable years ending after such date. \n \n “(2)   Transitional rule .— The amendments made by this section shall not apply with respect to any rehabilitation of a building if— “(A)  the physical work on such rehabilitation began before  January 1, 1982 , and \n \n “(B)  such building does not meet the requirements of paragraph (1) of section 48(g) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this Act [ Pub. L. 97–34 ]).”\nPub. L. 97–34, title III, §\u202f332(c)(1) ,  Aug. 13, 1981 ,  95 Stat. 296 , provided that:  “The amendments made by subsection (a) [amending this section] shall be effective on the date of enactment of this Act [ Aug. 13, 1981 ].”\nAmendment by  section 222(e)(2) of Pub. L. 96–223  applicable to periods after  Dec. 31, 1979 , under rules similar to the rules of  section 48(m) of this title , see  section 222(j)(1) of Pub. L. 96–223 , set out as a note under  section 48 of this title .\nPub. L. 96–223, title II, §\u202f223(b)(3) ,  Apr. 2, 1980 ,  94 Stat. 266 , provided that:  “The amendments made by this subsection [amending this section and  section 6401 of this title ] shall apply to qualified investment for taxable years beginning after  December 31, 1979 .”\nAmendment by section 141(e), (f)(2) of  Pub. L. 95–600  effective with respect to qualified investment for taxable years beginning after  Dec. 31, 1978 , see  section 141(g)(1) of Pub. L. 95–600 , set out as an Effective Date note under  section 409 of this title .\nPub. L. 95–600, title III, §\u202f312(d) ,  Nov. 6, 1978 ,  92 Stat. 2826 , provided that:  “The amendments made by this section [amending this section and sections 48 and 167 of this title and repealing sections 49 and 50 of this title] shall apply to taxable years ending after  December 31, 1978 .”\nPub. L. 95–600, title III, §\u202f313(b) ,  Nov. 6, 1978 ,  92 Stat. 2827 , provided that: \n “The amendment made by subsection (a) [amending this section] shall apply to— \n “(1)  property acquired by the taxpayer after  December 31, 1978 , and \n \n “(2)  property the construction, reconstruction, or erection of which was completed by the taxpayer after  December 31, 1978  (but only to the extent of the basis thereof attributable to construction, reconstruction, or erection after such date).”\n“The amendment made by subsection (a) [amending this section] shall apply to—\nPub. L. 95–600, title III, §\u202f316(c) ,  Nov. 6, 1978 ,  92 Stat. 2830 , provided that:  “The amendments made by this section [amending this section and  section 1388 of this title ] shall apply to taxable years ending after  October 31, 1978 .”\nPub. L. 95–600, title VII, §\u202f703(r) ,  Nov. 6, 1978 ,  92 Stat. 2944 , provided that:  “Except as otherwise provided, the amendments made by this section [amending this section and sections 48, 103, 447, 453, 501, 801, 911, 995, 996, 999, 1033, 1212, 1375, 1402, 1561, 4041, 4911, 6104, 6427, 6501, 6504, 6511, 7609 of this title and sections 402, 405, 410, and 411 of Title 42, The Public Health and Welfare, enacting provisions set out as notes under sections 103, 311, 443, 501, and 4973 of this title, and amending provisions set out as notes under section 120, 311, 907, 995, 2011, 2501, and 4940 of this title] shall take effect on  October 4, 1976 .”\nAmendment by  section 503(b)(4) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as a note under  section 3 of this title .\nPub. L. 94–455, title VIII, §\u202f802(c) ,  Oct. 4, 1976 ,  90 Stat. 1583 , provided that:  “The amendments made by this section [amending this section and  section 48 of this title  and provisions set out below] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 94–455, title VIII, §\u202f803(j) ,  Oct. 4, 1976 ,  90 Stat. 1591 , provided that: \n “(1)   General rule .— Except as provided in paragraph (2), the amendments made by this section [see Tables for classification of  section 803 of Pub. L. 94–455 ] shall apply for taxable years beginning after  December 31, 1974 . \n \n “(2)   Exceptions.— “(A)  Section 301(e) of the Tax Reduction Act of 1975 [set out below], as added by subsection (d), shall apply for taxable years beginning after  December 31, 1976 . \n \n “(B)  The amendments made by subsections (a) and (b)(1) shall apply for taxable years beginning after  December 31, 1975 . \n \n “(C)  The amendments made by subsections (b)(4) and (f) shall apply for years beginning after  December 31, 1975 .”\nPub. L. 94–455, title VIII, §\u202f805(b) ,  Oct. 4, 1976 ,  90 Stat. 1597 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in subparagraph (B), the amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1975 , in the case of property placed in service after such date. \n \n “(2)   Section 46( g)(4).— Section 46(g)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall apply to taxable years beginning after  December 31, 1975 .”\nAmendment by  section 1607(b)(1)(B) of Pub. L. 94–455  applicable to taxable years ending after  Oct. 4, 1976 , with certain exceptions, see  section 1608(c) of Pub. L. 94–455 , set out as a note under  section 857 of this title .\nAmendment by section 1901(a)(4)(A), (B), (b)(1)(C) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2112(d)(1) ,  Oct. 4, 1976 ,  90 Stat. 1906 , provided that:  \n “The amendments made by subsection (a) [amending this section and  section 48 of this title ] shall apply to— \n “(A)  property acquired by the taxpayer after  December 31, 1976 , and \n \n “(B)  property the construction, reconstruction, or erection of which was completed by the taxpayer after  December 31, 1976 , (but only to the extent of the basis thereof attributable to construction, reconstruction, or erection after such date), in taxable years beginning after such date.”\nPub. L. 94–12, title III, §\u202f301(b)(4) ,  Mar. 29, 1975 ,  89 Stat. 38 , provided that:  “The amendment made by paragraph (1) of this subsection [amending this section] shall apply to property placed in service after  January 21, 1975 , in taxable years ending after  January 21, 1975 . The amendments made by paragraphs (2) and (3) [amending this section] shall apply to taxable years ending after  December 31, 1974 .”\nPub. L. 94–12, title III, §\u202f305(a) ,  Mar. 29, 1975 ,  89 Stat. 45 , provided that:  “The amendments made by section 302 [amending this section and sections 47, 48, and 50B of this title] shall apply to taxable years ending after  December 31, 1974 .”\nAmendment by  section 2001(g)(2)(B) of Pub. L. 93–406  applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see  section 2001(i)(5) of Pub. L. 93–406 , set out as a note under  section 72 of this title .\nAmendment by  section 2002(g)(2) of Pub. L. 93–406  effective on  Jan. 1, 1975 , see  section 2002(i)(2) of Pub. L. 93–406 , set out as an Effective Date note under  section 4973 of this title .\nAmendment by  section 2005(c)(4) of Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nPub. L. 92–178, title I, §\u202f102(d)(1) , (2),  Dec. 10, 1971 ,  85 Stat. 500 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendments made by subsections (a) and (b) [amending this section and  section 48 of this title ] shall apply to property described in section 50 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(2)  In redetermining qualified investment for purposes of section 47(a) of the Internal Revenue Code of 1986 in the case of any property which ceases to be section 38 property with respect to the taxpayer after  August 15, 1971 , or which becomes public utility property after such date, section 46(c)(2) of such Code shall be applied as amended by subsection (a).”\nPub. L. 92–178, title I, §\u202f105(d) ,  Dec. 10, 1971 ,  85 Stat. 505 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and enacting provisions set out below] shall apply to property described in section 50 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nPub. L. 92–178, title I, §\u202f106(d) ,  Dec. 10, 1971 ,  85 Stat. 506 , provided that:  “The amendments made by subsections (a), (b), and (c)(2) [amending this section] shall apply to taxable years beginning after  December 31, 1970 . The amendments made by subsection (c)(1) [amending this section] shall apply to taxable years ending after  August 15, 1971 .”\nPub. L. 92–178, title I, §\u202f107(a)(2) ,  Dec. 10, 1971 ,  85 Stat. 507 , provided that:  “The repeals made by paragraph (1) [amending this section and  section 47 of this title ] shall apply to casualties and thefts occurring after  August 15, 1971 .”\nPub. L. 92–178, title I, §\u202f108(d) ,  Dec. 10, 1971 ,  85 Stat. 508 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 48 of this title ] shall apply to leases entered into after  September 22, 1971 . The amendment made by subsection (c) [amending  section 48 of this title ] shall apply to leases entered into after  November 8, 1971 .”\nAmendment by  section 301(b)(4) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 301(c) of Pub. L. 91–172 , set out as a note under  section 5 of this title .\nAmendment by  section 401(e)(1) of Pub. L. 91–172  applicable with respect to taxable years ending on or after  Dec. 31, 1970 , see  section 401(h)(3) of Pub. L. 91–172 , set out as a note under  section 1561 of this title .\nPub. L. 90–225, §\u202f2(g) ,  Dec. 27, 1967 ,  81 Stat. 732 , provided that:  “The amendments made by this section [amending this section and sections 6411, 6501, 6511, 6601, and 6611 of this title] shall apply with respect to investment credit carrybacks attributable to net operating loss carrybacks from taxable years ending after  July 31, 1967 .”\nPub. L. 89–800, §\u202f4 ,  Nov. 8, 1966 ,  80 Stat. 1514 , provided that:  “The amendments made by this Act [amending this section and sections 48 and 167 of this title] shall apply to taxable years ending after  October 9, 1966 , except that the amendments made by section 3(b) [amending this section] shall apply only if the fifth taxable year following the unused credit year ends after  December 31, 1966 .”\nPub. L. 89–389, §\u202f2(c) ,  Apr. 14, 1966 ,  80 Stat. 114 , provided that:  “The amendments made by this section [enacting  section 1378 of this title  and amending this section and sections 1372, 1373, and 1375 of this title] shall apply with respect to taxable years of electing small business corporations beginning after the date of enactment of this Act [ Apr. 14, 1966 ], but such amendments shall not apply with respect to sales or exchanges occurring before  February 24, 1966 .”\nAmendment by  Pub. L. 89–384  applicable with respect to amounts received after  December 31, 1964 , in respect of foreign expropriation losses (as defined in  section 1351(b) of this title ) sustained after  December 31, 1958 , see  section 2 of Pub. L. 89–384 , set out as an Effective Date note under  section 1351 of this title .\nAmendment by  Pub. L. 88–272  applicable with respect to dividends received after  Dec. 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .\nPub. L. 87–834, §\u202f2(h) ,  Oct. 16, 1962 ,  76 Stat. 973 , provided that:  “The amendments made by this section [enacting this section and sections 38, 47, 48, and 181 of this title, amending sections 381, 1016, 6501, 6511, 6601, and 6611 of this title, and renumbering former section 38 as  section 39 of this title ] shall apply with respect to taxable years ending after  December 31, 1961 .”\nFor provisions that nothing in amendment by  section 11813(a) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, title IV, §\u202f475(c) ,  July 18, 1984 ,  98 Stat. 847 , provided that:  “Nothing in the amendments made by section 474( o ) [amending this section and sections 47 and 48 of this title] shall be construed as reducing the amount of any credit allowable for qualified investment in taxable years beginning before  January 1, 1984 .”\nPub. L. 97–34, title II, §\u202f209(d)(2) ,  Aug. 13, 1981 ,  95 Stat. 227 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If, by the terms of the applicable rate order last entered before the date of the enactment of this Act [ Aug. 13, 1981 ] by a regulatory commission having appropriate jurisdiction, a regulated public utility would (but for this provision) fail to meet the requirements of paragraph (1) or (2) of section 46(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to property for an accounting period ending after  December 31, 1980 , such regulated public utility shall not fail to meet such requirements if, by the terms of its first rate order determining cost of service with respect to such property which becomes effective after the date of the enactment of this Act and on or before  January 1, 1983 , such regulated public utility meets such requirements. This provision shall not apply to any rate order which, under the rules in effect before the date of the enactment of this Act was inconsistent with the requirements of paragraph (1) or (2) of section 46(f) of such Code (whichever would have been applicable).”\nPub. L. 94–12, title III, §\u202f301(d) –(f),  Mar. 29, 1975 ,  89 Stat. 38 , as amended by  Pub. L. 94–455, title VIII , §§\u202f802(b)(7), 803(c)–(e),  Oct. 4, 1976 ,  90 Stat. 1583–1588 , relating to plan requirements for taxpayers electing additional credit, was repealed by  Pub. L. 95–600, title I, §\u202f141(f)(1) ,  Nov. 6, 1978 ,  92 Stat. 2795 .\nPub. L. 92–178, title I, §\u202f105(e) ,  Dec. 10, 1971 ,  85 Stat. 506 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Section 203(e) of the Revenue Act of 1964 [set out as note under  section 38 of this title ] shall not apply to public utility property to which section 46(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (c)) [subsec. (e) of this section] applies.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 46, for any taxable year during the 5-year period beginning in the taxable year in which a qualified rehabilitated building is placed in service, the rehabilitation credit for such year is an amount equal to the ratable share for such year.\nFor purposes of paragraph (1), the ratable share for any taxable year during the period described in such paragraph is the amount equal to 20 percent of the qualified rehabilitation expenditures with respect to the qualified rehabilitated building, as allocated ratably to each year during such period.\nQualified rehabilitation expenditures with respect to any qualified rehabilitated building shall be taken into account for the taxable year in which such qualified rehabilitated building is placed in service.\nThe amount which would (but for this paragraph) be taken into account under paragraph (1) with respect to any qualified rehabilitated building shall be reduced (but not below zero) by any amount of qualified rehabilitation expenditures taken into account under subsection (d) by the taxpayer or a predecessor of the taxpayer (or, in the case of a sale and leaseback described in section 50(a)(2)(C), by the lessee), to the extent any amount so taken into account has not been required to be recaptured under section 50(a).\nIn the case of any rehabilitation which may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the rehabilitation begins, clause (i) shall be applied by substituting “60-month period” for “24-month period”.\nThe Secretary shall prescribe by regulation rules for applying this subparagraph to lessees.\nRehabilitation includes reconstruction.\nAny expenditure with respect to which the taxpayer does not use the straight line method over a recovery period determined under subsection (c) or (g) of section 168. The preceding sentence shall not apply to any expenditure to the extent the alternative depreciation system of section 168(g) applies to such expenditure by reason of subparagraph (B) or (C) of section 168(g)(1).\nThe cost of acquiring any building or interest therein.\nAny expenditure attributable to the enlargement of an existing building.\nAny expenditure attributable to the rehabilitation of a qualified rehabilitated building unless the rehabilitation is a certified rehabilitation (within the meaning of subparagraph (C)).\nAny expenditure in connection with the rehabilitation of a building which is allocable to the portion of such property which is (or may reasonably be expected to be) tax-exempt use property (within the meaning of section 168(h), except that “50 percent” shall be substituted for “35 percent” in paragraph (1)(B)(iii) thereof).\nThis clause shall not apply for purposes of determining under paragraph (1)(C) whether a building has been substantially rehabilitated.\nAny expenditure of a lessee of a building if, on the date the rehabilitation is completed, the remaining term of the lease (determined without regard to any renewal periods) is less than the recovery period determined under section 168(c).\nFor purposes of subparagraph (B), the term “certified rehabilitation” means any rehabilitation of a certified historic structure which the Secretary of the Interior has certified to the Secretary as being consistent with the historic character of such property or the district in which such property is located.\nFor purposes of subparagraph (A), the terms “nonresidential real property,” “residential rental property,” and “class life” have the respective meanings given such terms by section 168.\nAny amount borrowed directly or indirectly by the taxpayer from the person rehabilitating the property for him shall not be treated as an amount expended for such rehabilitation.\nIn the case of a building which is not self-rehabilitated, the amount taken into account under paragraph (1)(B) for any taxable year shall not exceed the amount which represents the portion of the overall cost to the taxpayer of the rehabilitation which is properly attributable to the portion of the rehabilitation which is completed during such taxable year.\nThe determination under subparagraph (C)(i) of the portion of the overall cost to the taxpayer of the rehabilitation which is properly attributable to rehabilitation completed during any taxable year shall be made, under regulations prescribed by the Secretary, on the basis of engineering or architectural estimates or on the basis of cost accounting records. Unless the taxpayer establishes otherwise by clear and convincing evidence, the rehabilitation shall be deemed to be completed not more rapidly than ratably over the normal rehabilitation period.\nNo qualified rehabilitation expenditures shall be taken into account under this subsection for any period before the first day of the first taxable year to which an election under this subsection applies.\nFor purposes of this subsection, the term “self-rehabilitated building” means any building if it is reasonable to believe that more than half of the qualified rehabilitation expenditures for such building will be made directly by the taxpayer.\nThis subsection shall apply to any taxpayer only if such taxpayer has made an election under this paragraph. Such an election shall apply to the taxable year for which made and all subsequent taxable years. Such an election, once made, may be revoked only with the consent of the Secretary.\nProvisions similar to this section were contained in  section 48(g) of this title , prior to the general amendment of this subpart by  Pub. L. 101–508 .\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13402(a) , amended subsec. (a) generally. Prior to amendment, text read as follows: “For purposes of section 46, the rehabilitation credit for any taxable year is the sum of—\n“(1) 10 percent of the qualified rehabilitation expenditures with respect to any qualified rehabilitated building other than a certified historic structure, and\n“(2) 20 percent of the qualified rehabilitation expenditures with respect to any certified historic structure.”\nSubsec. (c)(1)(A)(iii).  Pub. L. 115–97, §\u202f13402(b)(1)(A)(i) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “in the case of any building other than a certified historic structure, in the rehabilitation process—\n“(I) 50 percent or more of the existing external walls of such building are retained in place as external walls,\n“(II) 75 percent or more of the existing external walls of such building are retained in place as internal or external walls, and\n“(III) 75 percent or more of the existing internal structural framework of such building is retained in place, and”.\nSubsec. (c)(1)(B) to (D).  Pub. L. 115–97, §\u202f13402(b)(1)(A)(ii) , (iii), redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B). Prior to amendment, text of subpar. (B) read as follows: “In the case of a building other than a certified historic structure, a building shall not be a qualified rehabilitated building unless the building was first placed in service before 1936.”\nSubsec. (c)(2)(B)(iv).  Pub. L. 115–97, §\u202f13402(b)(1)(B) , amended cl. (iv) generally. Prior to amendment, text read as follows: “Any expenditure attributable to the rehabilitation of a certified historic structure or a building in a registered historic district, unless the rehabilitation is a certified rehabilitation (within the meaning of subparagraph (C)). The preceding sentence shall not apply to a building in a registered historic district if—\n“(I) such building was not a certified historic structure,\n“(II) the Secretary of the Interior certified to the Secretary that such building is not of historic significance to the district, and\n“(III) if the certification referred to in subclause (II) occurs after the beginning of the rehabilitation of such building, the taxpayer certifies to the Secretary that, at the beginning of such rehabilitation, he in good faith was not aware of the requirements of subclause (II).”\n2008—Subsec. (c)(2)(B)(v)(I).  Pub. L. 110–289  substituted “section 168(h), except that ‘50 percent’ shall be substituted for ‘35 percent’ in paragraph (1)(B)(iii) thereof” for “section 168(h)”.\n1990— Pub. L. 101–508, §\u202f11813(a) , amended section generally, substituting section catchline for one which read: “Certain dispositions, etc., of section 38 property” and in text substituting present provisions for provisions relating to general rules regarding disposition of section 38 property, nonapplicability of section in certain cases, the treatment of any increase in tax under the section, increases in nonqualified nonrecourse financing, and transfers between spouses or incident to divorce.\nSubsec. (b)(1) to (3).  Pub. L. 101–508, §\u202f11801(c)(8)(A) , inserted “or” at end of par. (1), substituted a period for “,\u2000or” at end of par. (2), and struck out par. (3) which related to nonapplicability of subsec. (a) in the case of a transfer of section 38 property related to exchanges under final system plan for ConRail.\n1988—Subsec. (a)(5)(D).  Pub. L. 100–647, §\u202f1002(a)(26)(B) , struck out at end “If, prior to a disposition to which this subsection applies, any portion of any credit is not allowable with respect to any property by reason of section 168(i)(3), such portion shall be treated (for purposes of this subparagraph) as not having been used to reduce tax liability.”\nSubsec. (a)(5)(E)(iii).  Pub. L. 100–647, §\u202f1002(a)(26)(C) , substituted “168(e)” for “168(c)”.\nSubsec. (a)(5)(E)(v).  Pub. L. 100–647, §\u202f1002(a)(26)(A) , added cl. (v).\nSubsec. (a)(9)(A).  Pub. L. 100–647, §\u202f1002(a)(27) , substituted “section 168(h)(2)” for “section 168(j)(4)(C)”.\nSubsec. (c).  Pub. L. 100–647, §\u202f1007(g)(3)(A) , substituted “D, or G” for “or D”.\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f1002(a)(18) , substituted “section 46(c)(8)(C)” for “section 48(c)(8)(C)”.\nSubsec. (d)(3)(C)(i).  Pub. L. 100–647, §\u202f1002(a)(28) , substituted “class life (as defined in section 168(i)(1))” for “present class life (as defined in section 168(g)(2))” and “no class life” for “no present class life”.\n1986—Subsec. (a)(9).  Pub. L. 99–514, §\u202f1802(a)(5)(A) , added par. (9).\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1844(b)(1) , substituted “reducing the credit base (as defined in section 48(c)(8)(C))” for “reducing the qualified investment” and inserted “For purposes of determining the amount of credit subject to the early disposition or cessation rules of subsection (a), the net increase in the amount of the nonqualified nonrecourse financing with respect to the property shall be treated as reducing the property’s credit base (and correspondingly reducing the qualified investment in the property) in the year in which the property was first placed in service.”\nSubsec. (d)(3)(E)(i).  Pub. L. 99–514, §\u202f1844(b)(4) , inserted “reduced by the sum of the credit recapture amounts with respect to such property for all preceding years”.\nSubsec. (d)(3)(F).  Pub. L. 99–514, §\u202f1844(b)(2) , struck out subpar. (F) which read as follows: “The amount of any increase in tax under subsection (a) with respect to any property to which this paragraph applies shall be determined by reducing the qualified investment with respect to such property by the aggregate credit recapture amounts for all taxable years under this paragraph.”\nSubsec. (d)(3)(G).  Pub. L. 99–514, §\u202f1511(c)(2) , substituted “determined at the underpayment rate established under section 6621” for “determined under section 6621”.\n1985—Subsec. (a)(5)(B).  Pub. L. 99–121  substituted “For property other than 3-year property” for “For 15-year, 10-year, and 5-year property” in table heading.\n1984—Subsec. (a)(5)(D), (6).  Pub. L. 98–369, §\u202f474 ( o )(8), substituted “under section 39” for “under section 46(b)”.\nSubsec. (a)(7)(C).  Pub. L. 98–443  substituted “Secretary of Transportation” for “Civil Aeronautics Board”.\nSubsec. (c).  Pub. L. 98–369, §\u202f474 ( o )(9), substituted “subpart A, B, or D” for “subpart A”.\nSubsec. (d).  Pub. L. 98–369, §\u202f431(b)(2) , substituted “Increases in nonqualified nonrecourse financing” for “Property ceasing to be at risk” in heading.\nSubsec. (d)(1).  Pub. L. 98–369, §\u202f431(b)(2) , substituted provisions relating to increases in tax liability resulting from increases in nonqualified nonrecourse financing for provisions relating to increases in tax liability resulting from the taxpayer ceasing to be at risk with respect to certain property.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f431(b)(2) , substituted provisions that for purposes of par. (1), transfers of debt, or agreements to transfer, occurring more than one year after the initial borrowing shall not be treated as increasing nonqualified nonrecourse financing with respect to the taxpayer for provisions that for purposes of par. (1), such transfers (or agreements to transfer) by a qualified person to a nonqualified person would not cause the taxpayer to be treated as ceasing to be at risk.\nSubsec. (d)(3)(A).  Pub. L. 98–369, §\u202f431(d)(4) , substituted “increasing the amount of nonqualified nonrecourse financing (within the meaning of section 46(c)(8))” for “ceasing to be at risk”.\nSubsec. (d)(3)(B)(i).  Pub. L. 98–369, §\u202f431(d)(5) , struck out “other than a loan described in section 46(c)(8)(B)(ii)” after “section 46(c)(8)(F)(iv)”.\nSubsec. (e).  Pub. L. 98–369, §\u202f421(b)(7) , added subsec. (e).\n1983—Subsec. (d)(2).  Pub. L. 97–448, §\u202f102(e)(3)(A) , substituted “section 46(c)(8)(D)” and “section 46(c)(8)(B)” for “section 48(c)(8)(D)” and “section 48(c)(8)(B)”, respectively.\nSubsec. (d)(3)(A).  Pub. L. 97–448, §\u202f102(e)(3)(B) , substituted “section 46(c)(8)(F)” for “section 46(c)(8)(E)”.\n1982—Subsec. (a)(5)(D).  Pub. L. 97–248, §\u202f208(a)(2)(B) , inserted provision that if, prior to a disposition to which this subsection applies, any portion of any credit is not allowable with respect to any property by reason of section 168(i)(3), such portion shall be treated, for purposes of this subparagraph, as not having been used to reduce tax liability.\n1981—Subsec. (a)(3)(D).  Pub. L. 97–34, §\u202f211(g)(2)(A) , inserted provisions relating to disposition, cessation, or change in expected use described in paragraph (5).\nSubsec. (a)(5), (6).  Pub. L. 97–34, §\u202f211(g)(1) , (2)(B), added par. (5), redesignated former par. (5) as (6) and substituted “paragraph (1), (3), or (5)” for “paragraph (1) or (3)”. Former par. (6) redesignated (7).\nSubsec. (a)(7), (8).  Pub. L. 97–34, §\u202f211(g)(1) , (2)(C), redesignated former par. (6) as (7), substituted “paragraph (6)” for “paragraph (5)”, and redesignated former par. (7) as (8).\nSubsec. (d).  Pub. L. 97–34, §\u202f211(f)(2) , added subsec. (d).\n1978—Subsec. (a)(4), (5).  Pub. L. 95–618, §\u202f241(b)(1) , added par. (4), redesignated former par. (4) as (5) and substituted “paragraph (2) or (4)” for “paragraph (2)”.\nSubsec. (a)(6)(B).  Pub. L. 95–618, §\u202f241(b)(3) , substituted “paragraph (5)” for “paragraph (4)”.\nSubsec. (b)(3).  Pub. L. 95–600, §\u202f317(a) , added par. (3).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out in introductory provision and in par. (3)(C) “or his delegate” after “Secretary”.\nSubsec. (a)(7).  Pub. L. 94–455, §\u202f804(b) , added par. (7).\n1975—Subsec. (a)(3), (4).  Pub. L. 94–12, §\u202f302(b)(2)(A) , (c)(1), added par. (3), redesignated former par. (3) as (4) and substituted “paragraph (1) or (3)” for “paragraph (1)”. A former par. (4), relating to increase or adjustment of tax where property is destroyed by casualty, etc., was repealed by  Pub. L. 92–178 .\nSubsec. (a)(5), (6)(B).  Pub. L. 94–12, §\u202f302(c)(2) , substituted “paragraph (4)” for “paragraph (3)”.\n1971—Subsec. (a)(4).  Pub. L. 92–178, §\u202f107(a)(1) , struck out par. (4) relating to property destroyed by casualty, etc.\nSubsec. (a)(5).  Pub. L. 92–178, §\u202f107(b)(1) , provided for the repeal of par. (5) with the repeal not to apply, however, in the case of certain replacement property. See  section 107(b)(2) of Pub. L. 92–178 , set out in the Effective Date of 1971 Amendment note below.\nSubsec. (a)(6)(A).  Pub. L. 92–178, §\u202f102(c) , substituted “3½ years” for “4 years”.\nSubsec. (a)(6).  Pub. L. 91–676  added par. (6).\n1969—Subsec. (a)(5).  Pub. L. 91–172, §\u202f703(c)(2) , added par. (5).\nSubsec. (a)(4).  Pub. L. 91–172, §\u202f703(c)(1) , inserted provision making subpars. (B) and (C) inapplicable to any casualty or theft occurring after  April 18, 1969 .\nPub. L. 115–97, title I, §\u202f13402(c) ,  Dec. 22, 2017 ,  131 Stat. 2134 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 145 of this title ] shall apply to amounts paid or incurred after  December 31, 2017 . \n \n “(2)   Transition rule .— In the case of qualified rehabilitation expenditures with respect to any building— “(A)  owned or leased by the taxpayer during the entirety of the period after  December 31, 2017 , and \n \n “(B)  with respect to which the 24-month period selected by the taxpayer under clause (i) of section 47(c)(1)(B) of the Internal Revenue Code (as amended by subsection (b)), or the 60-month period applicable under clause (ii) of such section, begins not later than 180 days after the date of the enactment of this Act [ Dec. 22, 2017 ], \n \n\n the amendments made by this section shall apply to such expenditures paid or incurred after the end of the taxable year in which the 24-month period, or the 60-month period, referred to in subparagraph (B) ends.”\nPub. L. 110–289, div. C, title I, §\u202f3025(b) ,  July 30, 2008 ,  122 Stat. 2897 , provided that:  “The amendments made by this section [amending this section] shall apply to expenditures properly taken into account for periods after  December 31, 2007 .”\nAmendment by  section 11813(a) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XV, §\u202f1511(d) ,  Oct. 22, 1986 ,  100 Stat. 2746 , provided that:  “The amendments made by this section [amending this section and sections 48, 167, 644, 852, 4497, 6214, 6332, 6343, 6601, 6602, 6611, 6621, 6654, 6655, and 7426 of this title and sections 1961 and 2411 of Title 28, Judiciary and Judicial Procedure, and enacting provisions set out as a note under  section 6621 of this title ] shall apply for purposes of determining interest for periods after  December 31, 1986 .”\nAmendment by sections 1802(a)(5)(A) and 1844(b)(1), (2), (4) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 99–121  applicable as if included in the amendments made by section 111 of the Tax Reform Act of 1984,  Pub. L. 98–369 , see  section 105(b)(4) of Pub. L. 99–121 , set out as a note under  section 168 of this title , and  section 111(g) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 168 of this title .\nAmendment by  Pub. L. 98–443  effective  Jan. 1, 1985 , see  section 9(v) of Pub. L. 98–443 , set out as a note under  section 5314 of Title 5 , Government Organization and Employees.\nAmendment by  section 421(b)(7) of Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nAmendment by section 431(b)(2), (d)(4), (5) of  Pub. L. 98–369  applicable to property placed in service after  July 18, 1984 , in taxable years ending after such date, but not applicable to property to which subsec. (d) of this section and section 46(c)(8), (9) of this title, as enacted by  section 211(f) of Pub. L. 97–34 , do not apply, with the taxpayer having an option to elect retroactive application of amendment by  Pub. L. 98–369 , see  section 431(e) of Pub. L. 98–369 , set out as a note under  section 46 of this title .\nAmendment by section 474( o )(8), (9) of  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–248  applicable to agreements entered into after  July 1, 1982 , or to property placed in service after that date, but not to transitional safe harbor lease property, nor to qualified leased property described in  section 168(f)(8)(D)(v) of this title  which is placed in service before  Jan. 1, 1988 , or is placed in service after such date pursuant to a binding contract or commitment entered into before  April 1, 1983 , and solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee, see section 208(d)(1), (2)(A), (5) of  Pub. L. 97–248 , set out as a note under  section 168 of this title .\nAmendment by  section 211(g) of Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , see  section 211(i)(1) of Pub. L. 97–34 , set out in a note under  section 46 of this title .\nAmendment by  section 211(f)(2) of Pub. L. 97–34  not to apply to property placed in service by the taxpayer on or before  Feb. 18, 1981 , and property placed in service by the taxpayer after  Feb. 18, 1981 , where such property was acquired by the taxpayer pursuant to a binding contract entered into on or before that date, see  section 211(i)(5) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nPub. L. 95–600, title III, §\u202f317(b) ,  Nov. 6, 1978 ,  92 Stat. 2830 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  March 31, 1976 .”\nAmendment by  section 804(b) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1974 , see  section 804(e) of Pub. L. 94–455 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years ending after  Dec. 31, 1974 , see  section 305(a) of Pub. L. 94–12 , set out as a note under  section 46 of this title .\nIn redetermining qualified investment for purposes of subsec. (a) of this section in the case of any property which ceases to be section 38 property with respect to the taxpayer after  Aug. 15, 1971 , or which becomes public utility property after such date,  section 46(c)(2) of this title  as amended by  section 102(a) of Pub. L. 92–178  as applicable, see  section 102(d)(2) of Pub. L. 92–178 , set out as a note under  section 46 of this title .\nAmendment by  section 107(a)(1) of Pub. L. 92–178  applicable to casualties and thefts occurring after  Aug. 15, 1971 , see  section 107(a)(2) of Pub. L. 92–178 , set out as a note under  section 46 of this title .\nPub. L. 92–178, title I, §\u202f107(b)(2) ,  Dec. 10, 1971 ,  85 Stat. 507 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The repeal made by paragraph (1) [repealing subsec. (a)(5) of this section] shall not apply if replacement property described in subparagraph (B) of such section 47(a)(5) is not property described in section 50 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nPub. L. 92–178, title I, §\u202f102(d)(3) ,  Dec. 10, 1971 ,  85 Stat. 500 , provided that:  “The amendment made by subsection (c) [amending this section] shall apply to leases executed after  April 18, 1969 .”\nPub. L. 91–676, §\u202f2 ,  Jan. 12, 1971 ,  84 Stat. 2060 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply to taxable years ending after  April 18, 1969 .”\nSection applicable with respect to taxable years ending after  Dec. 31, 1961 , see  section 2(h) of Pub. L. 87–834 , set out as a note under  section 46 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFor provision that nothing in the amendments made by section 474( o ) of  Pub. L. 98–369 , which amended this section, be construed as reducing the investment tax credit in taxable years beginning before  Jan. 1, 1984 , see  section 475(c) of Pub. L. 98–369 , set out as a note under  section 46 of this title .\nFunctions, powers, and duties of Federal Aviation Agency and of Administrator and other offices and officers thereof transferred by  Pub. L. 89–670 ,  Oct. 15, 1966 ,  80 Stat. 931 , to Secretary of Transportation, with functions, powers, and duties of Secretary of Transportation pertaining to aviation safety to be exercised by Federal Aviation Administrator in Department of Transportation, see  section 106 of Title 49 , Transportation.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year.\nThe energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures.\nRules similar to the rule under section 45(b)(3) shall apply for purposes of this section.\nNo credit shall be allowed under section 45 for any taxable year with respect to any qualified investment credit facility.\nIn the case of any qualified offshore wind facility, subparagraph (E) shall not apply.\nFor purposes of this subparagraph, the term “qualified offshore wind facility” means a qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) (determined without regard to any date by which the construction of the facility is required to begin) which is located in the inland navigable waters of the United States or in the coastal waters of the United States.\nIn the case of any qualified fuel cell property, qualified small wind property, or energy property described in clause (i) or clause (ii) of paragraph (3)(A) the construction of which begins after  December 31, 2019 , and which is placed in service before  January 1, 2022 , the energy percentage determined under paragraph (2) shall be equal to 26 percent.\nFor purposes of determining the credit under subsection (a), energy property shall include amounts paid or incurred by the taxpayer for qualified interconnection property in connection with the installation of energy property (as defined in paragraph (3)) which has a maximum net output of not greater than 5 megawatts (as measured in alternating current), to provide for the transmission or distribution of the electricity produced or stored by such property, and which are properly chargeable to the capital account of the taxpayer.\nThe term “interconnection agreement” means an agreement with a utility for the purposes of interconnecting the energy property owned by such taxpayer to the transmission or distribution system of such utility.\nFor purposes of this paragraph, the term “utility” means the owner or operator of an electrical transmission or distribution system which is subject to the regulatory authority of a State or political subdivision thereof, any agency or instrumentality of the United States, a public service or public utility commission or other similar body of any State or political subdivision thereof, or the governing or ratemaking body of an electric cooperative.\nIn the case of expenses paid or incurred for interconnection property, amounts otherwise chargeable to capital account with respect to such expenses shall be reduced under rules similar to the rules of section 50(c).\nIn the case of any energy project which satisfies the requirements of subparagraph (B), the amount of the credit determined under this subsection (determined after the application of paragraphs (1) through (8) and paragraph (15) and without regard to this clause) shall be equal to such amount multiplied by 5.\nFor purposes of this subsection, the term “energy project” means a project consisting of one or more energy properties that are part of a single project.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nThe Secretary shall, by regulations or other guidance, provide for recapturing the benefit of any increase in the credit allowed under this subsection by reason of this paragraph with respect to any project which does not satisfy the requirements under subparagraph (A) (after application of subparagraph (B)) for the period described in clause (ii) of subparagraph (A) (but which does not cease to be investment credit property within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under rules similar to the rules of section 50(a).\nRules similar to the rules of section 45(b)(8) shall apply.\nIn the case of any energy project which satisfies the requirement under subparagraph (B), for purposes of applying paragraph (2) with respect to such property, the energy percentage shall be increased by the applicable credit rate increase.\nRules similar to the rules of section 45(b)(9)(B) shall apply.\nIn the case of a taxpayer making an election under section 6417 with respect to a credit under this section, rules similar to the rules of section 45(b)(10) shall apply.\nIn the case of any energy project that is placed in service within an energy community (as defined in section 45(b)(11)(B), as applied by substituting “energy project” for “qualified facility” each place it appears), for purposes of applying paragraph (2) with respect to energy property which is part of such project, the energy percentage shall be increased by the applicable credit rate increase.\nNo credit shall be allowed under section 45V or section 45Q for any taxable year with respect to any specified clean hydrogen production facility or any carbon capture equipment included at such facility.\nFor purposes of this paragraph, the term “qualified clean hydrogen” has the meaning given such term by section 45V(c)(2).\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this section, including regulations or other guidance which recaptures so much of any credit allowed under this section as exceeds the amount of the credit which would have been allowed if the expected production were consistent with the actual verified production (or all of the credit so allowed in the absence of such verification).\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nRules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a).\nIn the case of qualified fuel cell property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $1,500 for each 0.5 kilowatt of capacity of such property.\nThe term “fuel cell power plant” means an integrated system comprised of a fuel cell stack assembly, or linear generator assembly, and associated balance of plant components which converts a fuel into electricity using electrochemical or electromechanical means.\nThe term “linear generator assembly” does not include any assembly which contains rotating parts.\nThe term “qualified fuel cell property” shall not include any property the construction of which does not begin before  January 1, 2025 .\nIn the case of qualified microturbine property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $200 for each kilowatt of capacity of such property.\nThe term “stationary microturbine power plant” means an integrated system comprised of a gas turbine engine, a combustor, a recuperator or regenerator, a generator or alternator, and associated balance of plant components which converts a fuel into electricity and thermal energy. Such term also includes all secondary components located between the existing infrastructure for fuel delivery and the existing infrastructure for power distribution, including equipment and controls for meeting relevant power standards, such as voltage, frequency, and power factors.\nThe term “qualified microturbine property” shall not include any property the construction of which does not begin before  January 1, 2025 .\nIn the case of combined heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the credit under subsection (a)(1) (determined without regard to this paragraph) for such year shall be equal to the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property.\nFor purposes of clause (i), the term “applicable capacity” means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.\nThe term “combined heat and power system property” shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.\nThe energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis.\nThe term “combined heat and power system property” does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.\nThe term “qualified small wind energy property” means property which uses a qualifying small wind turbine to generate electricity.\nThe term “qualifying small wind turbine” means a wind turbine which has a nameplate capacity of not more than 100 kilowatts.\nThe term “qualified small wind energy property” shall not include any property the construction of which does not begin before  January 1, 2025 .\nThe term “waste energy recovery property” means property that generates electricity solely from heat from buildings or equipment if the primary purpose of such building or equipment is not the generation of electricity.\nThe term “waste energy recovery property” shall not include any property which has a capacity in excess of 50 megawatts.\nAny waste energy recovery property (determined without regard to this subparagraph) which is part of a system which is a combined heat and power system property shall not be treated as waste energy recovery property for purposes of this section unless the taxpayer elects to not treat such system as a combined heat and power system property for purposes of this section.\nThe term “waste energy recovery property” shall not include any property the construction of which does not begin before  January 1, 2025 .\nThe term “energy storage technology” shall not include any property the construction of which begins after  December 31, 2024 .\nThe term “qualified biogas property” includes any property which is part of such system which cleans or conditions such gas.\nThe term “qualified biogas property” shall not include any property the construction of which begins after  December 31, 2024 .\nThe term “microgrid controller” shall not include any property the construction of which begins after  December 31, 2024 .\nNo credit shall be determined under this section or section 45 with respect to such property for the taxable year in which such grant is made or any subsequent taxable year.\nFor purposes of subparagraphs (B) and (C), electricity acquired at a below-market rate shall not fail to be taken into account as a financial benefit.\nNot later than 180 days after the date of enactment of this subsection, the Secretary shall establish a program to allocate amounts of environmental justice solar and wind capacity limitation to qualified solar and wind facilities. In establishing such program and to carry out the purposes of this subsection, the Secretary shall provide procedures to allow for an efficient allocation process, including, when determined appropriate, consideration of multiple projects in a single application if such projects will be placed in service by a single taxpayer.\nThe amount of environmental justice solar and wind capacity limitation allocated by the Secretary under subparagraph (A) during any calendar year shall not exceed the annual capacity limitation with respect to such year.\nFor purposes of this paragraph, the term “annual capacity limitation” means 1.8 gigawatts of direct current capacity for each of calendar years 2023 and 2024, and zero thereafter.\nIf the annual capacity limitation for any calendar year exceeds the aggregate amount allocated for such year under this paragraph, such limitation for the succeeding calendar year shall be increased by the amount of such excess. No amount may be carried under the preceding sentence to any calendar year after 2024 except as provided in section 48E(h)(4)(D)(ii).\nParagraph (1) shall not apply with respect to any property which is placed in service after the date that is 4 years after the date of the allocation with respect to the facility of which such property is a part.\nAny amount of environmental justice solar and wind capacity limitation which expires under clause (i) during any calendar year shall be taken into account as an excess described in subparagraph (D) (or as an increase in such excess) for such calendar year, subject to the limitation imposed by the last sentence of such subparagraph.\nThe Secretary shall, by regulations or other guidance, provide for recapturing the benefit of any increase in the credit allowed under subsection (a) by reason of this subsection with respect to any property which ceases to be property eligible for such increase (but which does not cease to be investment credit property within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under rules similar to the rules of section 50(a). To the extent provided by the Secretary, such recapture may not apply with respect to any property if, within 12 months after the date the taxpayer becomes aware (or reasonably should have become aware) of such property ceasing to be property eligible for such increase, the eligibility of such property for such increase is restored. The preceding sentence shall not apply more than once with respect to any facility.\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nThe date of enactment of this section, referred to in subsec. (c)(6)(B)(i), probably should be “the date of enactment of this paragraph” which is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nThe date of enactment of this paragraph, referred to in subsec. (c)(7)(A)(i), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nSection 1603 of the American Recovery and Reinvestment Tax Act of 2009, referred to in subsec. (d), is  section 1603 of Pub. L. 111–5 , which is set out as a note below.\nThe Housing Act of 1949, referred to in subsec. (e)(2)(B)(i), is  act July 15, 1949, ch. 338 ,  63 Stat. 413 . Title V of the Act is classified generally to subchapter III (§\u202f1471 et seq.) of chapter 8A of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 1441 of Title 42  and Tables.\nThe date of enactment of this subsection, referred to in subsec. (e)(4)(A), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\n2022—Subsec. (a)(2)(A)(i).  Pub. L. 117–169, §\u202f13102(d)(1)(A)(i) , substituted “6 percent” for “30 percent” in introductory provisions.\nSubsec. (a)(2)(A)(i)(II).  Pub. L. 117–169, §\u202f13102(a)(1) , (e) substituted “clause (i) or (iii) of paragraph (3)(A)” for “paragraph (3)(A)(i)” and “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (a)(2)(A)(i)(VI) to (IX).  Pub. L. 117–169, §\u202f13102(f)(2) , added subcls. (VI) to (IX).\nSubsec. (a)(2)(A)(ii).  Pub. L. 117–169, §\u202f13102(d)(1)(A)(ii) , substituted “2 percent” for “10 percent”.\nSubsec. (a)(3)(A)(ii).  Pub. L. 117–169, §\u202f13102(h) , inserted “,\u2000or electrochromic glass which uses electricity to change its light transmittance properties in order to heat or cool a structure,” after “sunlight”.\nPub. L. 117–169, §\u202f13102(a)(2) , substituted “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (a)(3)(A)(vii).  Pub. L. 117–169, §\u202f13102(b) , substituted “ January 1, 2035 ” for “ January 1, 2024 ”.\nSubsec. (a)(3)(A)(ix) to (xi).  Pub. L. 117–169, §\u202f13102(f)(1) , added cls. (ix) to (xi).\nSubsec. (a)(4).  Pub. L. 117–169, §\u202f13102(m) , amended par. (4) generally. Prior to amendment, par. (4) related to special rule for property financed by subsidized energy financing or industrial development bonds.\nSubsec. (a)(5)(A)(ii).  Pub. L. 117–169, §\u202f13102(d)(1)(B) , substituted “6 percent” for “30 percent”.\nSubsec. (a)(5)(C)(ii).  Pub. L. 117–169, §\u202f13101(d) , substituted “ January 1, 2025 ” for “ January 1, 2022 ”.\nSubsec. (a)(5)(E).  Pub. L. 117–169, §\u202f13101(e)(2)(B) , inserted “placed in service before  January 1, 2022 , and” before “treated as energy property” in introductory provisions.\nSubsec. (a)(5)(F)(i).  Pub. L. 117–169, §\u202f13101(e)(3) , substituted “offshore wind facility, subparagraph (E) shall not apply.” for “offshore wind facility—\n“(I) subparagraph (C)(ii) shall be applied by substituting ‘ January 1, 2026 ’ for ‘ January 1, 2022 ’,\n“(II) subparagraph (E) shall not apply, and\n“(III) for purposes of this paragraph, section 45(d)(1) shall be applied by substituting ‘ January 1, 2026 ’ for ‘ January 1, 2022 ’.”\nSubsec. (a)(6).  Pub. L. 117–169, §\u202f13102(c) , added par. (6) and struck out former par. (6) which related to phaseout for solar energy property the construction of which began before  Jan. 1, 2024 .\nSubsec. (a)(7).  Pub. L. 117–169, §\u202f13102(d)(2) , added par. (7).\nPub. L. 117–169, §\u202f13102(c) , struck out par. (7) which related to phaseout for any qualified fuel cell property, qualified small wind property, waste energy recovery property, and certain other energy property.\nSubsec. (a)(8).  Pub. L. 117–169, §\u202f13102(j) , added par. (8).\nSubsec. (a)(9).  Pub. L. 117–169, §\u202f13102(k) , added par. (9).\nSubsec. (a)(9)(A)(i).  Pub. L. 117–169, §\u202f13204(c)(2) , inserted “and paragraph (15)” after “paragraphs (1) through (8)”.\nSubsec. (a)(10), (11).  Pub. L. 117–169, §\u202f13102(k) , added pars. (10) and (11).\nSubsec. (a)(12), (13).  Pub. L. 117–169, §\u202f13102 ( l ), added pars. (12) and (13).\nSubsec. (a)(14).  Pub. L. 117–169, §\u202f13102 ( o ), added par. (14).\nSubsec. (a)(15).  Pub. L. 117–169, §\u202f13204(c)(1) , added par. (15). Former par. (15) redesignated (16).\nPub. L. 117–169, §\u202f13102(p) , added par. (15).\nSubsec. (a)(16).  Pub. L. 117–169, §\u202f13204(c)(1) , redesignated par. (15) as (16).\nSubsec. (c)(1)(A)(i).  Pub. L. 117–169, §\u202f13102(g)(1)(A) , inserted “(1 kilowatt in the case of a fuel cell power plant with a linear generator assembly)” after “0.5 kilowatt” and “or electromechanical” after “electrochemical”.\nSubsec. (c)(1)(C).  Pub. L. 117–169, §\u202f13102(g)(1)(B) , inserted “,\u2000or linear generator assembly,” after “a fuel cell stack assembly” and “or electromechanical” after “electrochemical”.\nSubsec. (c)(1)(D).  Pub. L. 117–169, §\u202f13102(g)(2) , added subpar. (D). Former subpar. (D) redesignated (E).\nPub. L. 117–169, §\u202f13102(a)(3) , substituted “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (c)(1)(E).  Pub. L. 117–169, §\u202f13102(g)(2) , redesignated subpar. (D) as (E).\nSubsec. (c)(2)(D).  Pub. L. 117–169, §\u202f13102(a)(4) , substituted “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (c)(3)(A)(iv).  Pub. L. 117–169, §\u202f13102(a)(5) , substituted “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (c)(4)(C).  Pub. L. 117–169, §\u202f13102(a)(6) , substituted “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (c)(5)(D).  Pub. L. 117–169, §\u202f13102(a)(7) , substituted “ January 1, 2025 ” for “ January 1, 2024 ”.\nSubsec. (c)(6) to (8).  Pub. L. 117–169, §\u202f13102(f)(3) , added pars. (6) to (8).\nSubsec. (e).  Pub. L. 117–169, §\u202f13103(a) , added subsec. (e).\n2020—Subsec. (a)(2)(A)(i)(II).  Pub. L. 116–260, §\u202f132(a)(1)(A) , substituted “ January 1, 2024 ” for “ January 1, 2022 ”.\nSubsec. (a)(2)(A)(i)(V).  Pub. L. 116–260, §\u202f203(b) , added subcl. (V).\nSubsec. (a)(3)(A)(ii), (vii).  Pub. L. 116–260, §\u202f132(a)(1)(B) , substituted “ January 1, 2024 ” for “ January 1, 2022 ”.\nSubsec. (a)(3)(A)(viii).  Pub. L. 116–260, §\u202f203(a) , added cl. (viii).\nSubsec. (a)(5)(C)(ii).  Pub. L. 116–260, §\u202f131(b) , substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\nSubsec. (a)(5)(E)(iv).  Pub. L. 116–260, §\u202f131(c)(2) , substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\nSubsec. (a)(5)(F).  Pub. L. 116–260, §\u202f204(a) , added subpar. (F).\nSubsec. (a)(6)(A).  Pub. L. 116–260, §\u202f132(b)(1)(A)(i) , substituted “ January 1, 2024 , the energy percentage” for “ January 1, 2022 , the energy percentage” in introductory provisions.\nSubsec. (a)(6)(A)(i).  Pub. L. 116–260, §\u202f132(b)(1)(A)(ii) , substituted “ January 1, 2023 ” for “ January 1, 2021 ”.\nSubsec. (a)(6)(A)(ii).  Pub. L. 116–260, §\u202f132(b)(1)(A)(iii) , substituted “after  December 31, 2022 , and before  January 1, 2024 ” for “after  December 31, 2020 , and before  January 1, 2022 ”.\nSubsec. (a)(6)(B).  Pub. L. 116–260, §\u202f132(b)(1)(B) , substituted “begins before  January 1, 2024 , and which is not placed in service before  January 1, 2026 ” for “begins before  January 1, 2022 , and which is not placed in service before  January 1, 2024 ”.\nSubsec. (a)(7).  Pub. L. 116–260, §\u202f203(c)(2) , substituted “certain other” for “fiber-optic solar, qualified fuel cell, and qualified small wind” in heading.\nSubsec. (a)(7)(A).  Pub. L. 116–260, §\u202f203(c)(1) , inserted “waste energy recovery property,” after “qualified small wind property,” in introductory provisions.\nSubsec. (a)(7)(A)(i).  Pub. L. 116–260, §\u202f132(b)(2)(A)(i) , substituted “ January 1, 2023 ” for “ January 1, 2021 ”.\nSubsec. (a)(7)(A)(ii).  Pub. L. 116–260, §\u202f132(b)(2)(A)(ii) , substituted “after  December 31, 2022 , and before  January 1, 2024 ” for “after  December 31, 2020 , and before  January 1, 2022 ”.\nSubsec. (a)(7)(B).  Pub. L. 116–260, §\u202f132(b)(2)(B) , substituted “ January 1, 2026 ” for “ January 1, 2024 ”.\nSubsec. (c)(1)(D), (2)(D), (3)(A)(iv), (4)(C).  Pub. L. 116–260, §\u202f132(a)(2) , substituted “ January 1, 2024 ” for “ January 1, 2022 ”.\nSubsec. (c)(5).  Pub. L. 116–260, §\u202f203(d) , added par. (5).\n2019—Subsec. (a)(5)(C)(ii).  Pub. L. 116–94, §\u202f127(b) , substituted “ January 1, 2021 ” for “ January 1, 2018  ( January 1, 2020 , in the case of any facility which is described in paragraph (1) of section 45(d))”.\nSubsec. (a)(5)(E)(iv).  Pub. L. 116–94, §\u202f127(c)(2)(B) , added cl. (iv).\n2018—Subsec. (a)(1).  Pub. L. 115–141, §\u202f401(a)(20) , substituted “and (3)(B)” for “(3)(B), and (4)(B)”.\nSubsec. (a)(2)(A).  Pub. L. 115–123, §\u202f40411(b)(2) , substituted “paragraphs (6) and (7)” for “paragraph (6)” in introductory provisions.\nSubsec. (a)(3)(A)(ii), (vii).  Pub. L. 115–123, §\u202f40411(a) , substituted “property the construction of which begins before  January 1, 2022 ” for “periods ending before  January 1, 2017 ”.\nSubsec. (a)(5)(C)(ii).  Pub. L. 115–141, §\u202f401(a)(350)(A) , made technical amendment to directory language of  Pub. L. 114–113, §\u202f302(a) . See 2015 Amendment note below.\nPub. L. 115–123, §\u202f40409(b) , substituted “ January 1, 2018 ” for “ January 1, 2017 ”.\nSubsec. (a)(5)(E).  Pub. L. 115–141, §\u202f401(a)(350)(B) , made technical amendment to directory language of  Pub. L. 114–113, §\u202f302(b) . See 2015 Amendment note below.\nPub. L. 115–123, §\u202f40411(b)(3) , inserted “which is treated as energy property by reason of this paragraph” after “using wind to produce electricity” in introductory provisions.\nSubsec. (a)(6)(B).  Pub. L. 115–141, §\u202f401(a)(21) , substituted “energy property” for “property energy property”.\nSubsec. (a)(7).  Pub. L. 115–123, §\u202f40411(b)(1) , added par. (7).\nSubsec. (c)(1)(D).  Pub. L. 115–123, §\u202f40411(c) , substituted “the construction of which does not begin before  January 1, 2022 ” for “for any period after  December 31, 2016 ”.\nSubsec. (c)(2)(B).  Pub. L. 115–141, §\u202f401(a)(22) , substituted “equal to $200” for “equal $200”.\nSubsec. (c)(2)(D).  Pub. L. 115–123, §\u202f40411(d) , substituted “the construction of which does not begin before  January 1, 2022 ” for “for any period after  December 31, 2016 ”.\nSubsec. (c)(3)(A)(iv).  Pub. L. 115–123, §\u202f40411(e) , substituted “the construction of which begins before  January 1, 2022 ” for “which is placed in service before  January 1, 2017 ”.\nSubsec. (c)(4)(C).  Pub. L. 115–123, §\u202f40411(f) , substituted “the construction of which does not begin before  January 1, 2022 ” for “for any period after  December 31, 2016 ”.\nSubsec. (d)(3).  Pub. L. 115–141, §\u202f401(a)(23)(A) , struck out “shall” after “grant” in introductory provisions.\nSubsec. (d)(3)(A).  Pub. L. 115–141, §\u202f401(a)(23)(B) , inserted “shall” before “not”.\n2015—Subsec. (a)(2)(A).  Pub. L. 114–113, §\u202f303(c) , substituted “Except as provided in paragraph (6), the energy percentage” for “The energy percentage” in introductory provisions.\nSubsec. (a)(2)(A)(i)(II).  Pub. L. 114–113, §\u202f303(a) , substituted “property the construction of which begins before  January 1, 2022 ” for “periods ending before  January 1, 2017 ”.\nSubsec. (a)(5)(C)(ii).  Pub. L. 114–113, §\u202f187(b) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nPub. L. 114–113, §\u202f302(a) , as amended by  Pub. L. 115–141, §\u202f401(a)(350)(A) , inserted “( January 1, 2020 , in the case of any facility which is described in paragraph (1) of section 45(d))” before “,\u2000and”.\nSubsec. (a)(5)(E).  Pub. L. 114–113, §\u202f302(b) , as amended by  Pub. L. 115–141, §\u202f401(a)(350)(B) , added subpar. (E).\nSubsec. (a)(6).  Pub. L. 114–113, §\u202f303(b) , added par. (6).\n2014—Subsec. (a)(5)(C)(ii).  Pub. L. 113–295, §\u202f155(b) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (d)(3)(A).  Pub. L. 113–295, §\u202f209(d) , inserted “or alternative minimum taxable income” after “includible in the gross income”.\n2013—Subsec. (a)(5)(C).  Pub. L. 112–240, §\u202f407(b) , amended subpar. (C) generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the term ‘qualified investment credit facility’ means any of the following facilities if no credit has been allowed under section 45 with respect to such facility and the taxpayer makes an irrevocable election to have this paragraph apply to such facility:\n“(i)  Wind facilities .—Any qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) if such facility is placed in service in 2009, 2010, 2011, or 2012.\n“(ii)  Other facilities .—Any qualified facility (within the meaning of section 45) described in paragraph (2), (3), (4), (6), (7), (9), or (11) of section 45(d) if such facility is placed in service in 2009, 2010, 2011, 2012, or 2013.”\nSubsec. (a)(5)(D)(iii), (iv).  Pub. L. 112–240, §\u202f407(c)(1) , added cls. (iii) and (iv).\n2009—Subsec. (a)(4)(D).  Pub. L. 111–5, §\u202f1103(b)(1) , added subpar. (D).\nSubsec. (a)(5).  Pub. L. 111–5, §\u202f1102(a) , added par. (5).\nSubsec. (c)(4)(B) to (D).  Pub. L. 111–5, §\u202f1103(a) , redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B). Text of former subpar. (B) read as follows: “In the case of qualified small wind energy property placed in service during the taxable year, the credit otherwise determined under subsection (a)(1) for such year with respect to all such property of the taxpayer shall not exceed $4,000.”\nSubsec. (d).  Pub. L. 111–5, §\u202f1104 , added subsec. (d).\n2008—Subsec. (a)(1).  Pub. L. 110–343, §\u202f104(d) , substituted “paragraphs (1)(B), (2)(B), (3)(B), and (4)(B)” for “paragraphs (1)(B), (2)(B), and (3)(B)”.\nPub. L. 110–343, §\u202f103(c)(3) , substituted “paragraphs (1)(B), (2)(B), and (3)(B)” for “paragraphs (1)(B) and (2)(B)”.\nSubsec. (a)(2)(A)(i)(II).  Pub. L. 110–343, §\u202f103(a)(1) , substituted “ January 1, 2017 ” for “ January 1, 2009 ”.\nSubsec. (a)(2)(A)(i)(IV).  Pub. L. 110–343, §\u202f104(b) , added subcl. (IV).\nSubsec. (a)(3).  Pub. L. 110–343, §\u202f103(e)(1) , in concluding provisions, struck out “The term ‘energy property’ shall not include any property which is public utility property (as defined in section 46(f)(5) as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).” before “Such term”.\nSubsec. (a)(3)(A)(ii).  Pub. L. 110–343, §\u202f103(a)(1) , substituted “ January 1, 2017 ” for “ January 1, 2009 ”.\nSubsec. (a)(3)(A)(v).  Pub. L. 110–343, §\u202f103(c)(1) , added cl. (v).\nSubsec. (a)(3)(A)(vi).  Pub. L. 110–343, §\u202f104(a) , added cl. (vi).\nSubsec. (a)(3)(A)(vii).  Pub. L. 110–343, §\u202f105(a) , added cl. (vii).\nSubsec. (c).  Pub. L. 110–343, §\u202f103(c)(2)(A) , inserted heading and struck out former heading “Qualified fuel cell property; qualified microturbine property”.\nSubsec. (c)(1)(B).  Pub. L. 110–343, §\u202f103(d) , substituted “$1,500” for “$500”.\nSubsec. (c)(1)(D).  Pub. L. 110–343, §\u202f103(e)(2)(A) , redesignated subpar. (E) as (D) and struck out heading and text of former subpar. (D). Text read as follows: “The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to qualified fuel cell property which is used predominantly in the trade or business of the furnishing or sale of telephone service, telegraph service by means of domestic telegraph operations, or other telegraph services (other than international telegraph services).”\nSubsec. (c)(1)(E).  Pub. L. 110–343, §\u202f103(e)(2)(A) , redesignated subpar. (E) as (D).\nPub. L. 110–343, §\u202f103(a)(2) , substituted “ December 31, 2016 ” for “ December 31, 2008 ”.\nSubsec. (c)(2)(D).  Pub. L. 110–343, §\u202f103(e)(2)(B) , redesignated subpar. (E) as (D) and struck out heading and text of former subpar. (D). Text read as follows: “The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to qualified microturbine property which is used predominantly in the trade or business of the furnishing or sale of telephone service, telegraph service by means of domestic telegraph operations, or other telegraph services (other than international telegraph services).”\nSubsec. (c)(2)(E).  Pub. L. 110–343, §\u202f103(e)(2)(B) , redesignated subpar. (E) as (D).\nPub. L. 110–343, §\u202f103(a)(3) , substituted “ December 31, 2016 ” for “ December 31, 2008 ”.\nSubsec. (c)(3).  Pub. L. 110–343, §\u202f103(c)(2)(B) , added par. (3).\nSubsec. (c)(4).  Pub. L. 110–343, §\u202f104(c) , added par. (4).\n2007—Subsec. (c).  Pub. L. 110–172, §\u202f11(a)(8) , substituted “section” for “subsection” in introductory provisions.\nSubsec. (c)(1)(B), (2)(B).  Pub. L. 110–172, §\u202f11(a)(9) , substituted “subsection (a)” for “paragraph (1)”.\n2006—Subsec. (a)(2)(A)(i)(II), (3)(A)(ii).  Pub. L. 109–432, §\u202f207(1) , substituted “ January 1, 2009 ” for “ January 1, 2008 ”.\nSubsec. (c)(1)(E), (2)(E).  Pub. L. 109–432, §\u202f207(2) , substituted “ December 31, 2008 ” for “ December 31, 2007 ”.\n2005—Subsec. (a)(1).  Pub. L. 109–135, §\u202f412(m) , substituted “paragraphs (1)(B) and (2)(B) of subsection (c)” for “paragraph (1)(B) or (2)(B) of subsection (d)”.\nPub. L. 109–58, §\u202f1336(d) , inserted “except as provided in paragraph (1)(B) or (2)(B) of subsection (d),” before “the energy credit”.\nSubsec. (a)(2)(A).  Pub. L. 109–58, §\u202f1337(a) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The energy percentage is—\n“(i) in the case of qualified fuel cell property, 30 percent, and\n“(ii) in the case of any other energy property, 10 percent.”\nPub. L. 109–58, §\u202f1336(c) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The energy percentage is 10 percent.”\nSubsec. (a)(3)(A)(i).  Pub. L. 109–58, §\u202f1337(c) , inserted “excepting property used to generate energy for the purposes of heating a swimming pool,” after “solar process heat,”.\nSubsec. (a)(3)(A)(ii).  Pub. L. 109–135, §\u202f412(n)(2) , struck out “or” at end.\nPub. L. 109–58, §\u202f1337(b) , added cl. (ii). Former cl. (ii) redesignated (iii) relating to equipment used to produce, distribute, or use energy derived from a geothermal deposit.\nSubsec. (a)(3)(A)(iii).  Pub. L. 109–58, §\u202f1337(b) , redesignated cl. (ii) as (iii) relating to equipment used to produce, distribute, or use energy derived from a geothermal deposit.\nPub. L. 109–58, §\u202f1336(a) , added cl. (iii) relating to qualified fuel cell property or qualified microturbine property.\nSubsec. (a)(3)(A)(iv).  Pub. L. 109–135, §\u202f412(n)(1) , redesignated cl. (iii), relating to qualified fuel cell property or qualified microturbine property, as (iv).\nSubsec. (c).  Pub. L. 109–58, §\u202f1336(b) , added subsec. (c).\n2004— Pub. L. 108–357, §\u202f322(d)(2)(B) , struck out “;\u2000reforestation credit” after “Energy credit” in section catchline.\nSubsec. (a)(3).  Pub. L. 108–357, §\u202f710(e) , inserted at end of concluding provisions “Such term shall not include any property which is part of a facility the production from which is allowed as a credit under section 45 for the taxable year or any prior taxable year.”\nSubsec. (a)(5).  Pub. L. 108–357, §\u202f322(d)(2)(A)(iii) , redesignated subsec. (a)(5) as (b).\nPub. L. 108–357, §\u202f322(d)(2)(A)(ii) , substituted “subsection (a)” for “this subsection”.\nSubsec. (b).  Pub. L. 108–357, §\u202f322(d)(2)(A)(iii) , redesignated subsec. (a)(5) as (b).\nPub. L. 108–357, §\u202f322(d)(2)(A)(i) , struck out heading and text of subsec. (b). Text read as follows:\n“(1)  In general .—For purposes of section 46, the reforestation credit for any taxable year is 10 percent of the portion of the amortizable basis of any qualified timber property which was acquired during such taxable year and which is taken into account under section 194 (after the application of section 194(b)(1)).\n“(2)  Definitions .—For purposes of this subpart, the terms ‘amortizable basis’ and ‘qualified timber property’ have the respective meanings given to such terms by section 194.”\n1992—Subsec. (a)(2).  Pub. L. 102–486  substituted “The” for “Except as provided in subparagraph (B), the” in subpar. (A), redesignated subpar. (C) as (B), and struck out former subpar. (B) which read as follows: “(B)  Termination .—Effective with respect to periods after  June 30, 1992 , the energy percentage is zero. For purposes of the preceding sentence, rules similar to the rules of section 48(m) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply.”\n1991—Subsec. (a)(2)(B).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990— Pub. L. 101–508, §\u202f11813(a) , amended section generally, substituting section catchline for one which read: “Definitions; special rules” and in text substituting present provisions for provisions defining section 38 property, new section 38 property, used section 38 property, provisions relating to certain leased property, estates and trusts, special rules for qualified rehabilitated buildings, credit for movie and television films, treatment of energy property, application of certain transitional rules, definitions of certain credits, definition of single purpose agricultural or horticultural structure, basis adjustment to section 38 property, certain section 501(d) organizations, special rules relating to sound recordings, and a cross reference to  section 381 of this title .\nSubsec. (a)(8).  Pub. L. 101–508, §\u202f11801(c)(6)(A) , struck out par. (8) “Amortized property” which read as follows: “Any property with respect to which an election under section 167(k), 184, or 188 applies shall not be treated as section 38 property.”\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1002(a)(29) , which directed amendment of par. (1) by substituting “property to which section 168 applies” for “recovery property (within the meaning of section 168)” in penultimate sentence, was executed by making the substitution for “recovery property (within the meaning of section 168”, which results in retaining remaining parenthetical material and closing parenthesis.\nSubsec. (a)(5)(A)(ii).  Pub. L. 100–647, §\u202f1002(a)(14)(A) –(C), substituted “168(h)(2)(C)” for “168(j)(4)(C)”, “168(h)(2)(A)(iii)” for “168(j)(4)(A)(iii)”, and “168(h)(2)(B)” for “168(j)(4)(B)”.\nSubsec. (a)(5)(B)(i).  Pub. L. 100–647, §\u202f1002(a)(14)(D) , substituted “168(i)(3)” for “168(j)(6)”.\nSubsec. (a)(5)(B)(ii).  Pub. L. 100–647, §\u202f1002(a)(14)(E) , substituted “168(h)(1)(C)(ii)” for “168(j)(3)(C)(ii)”.\nSubsec. (a)(5)(D).  Pub. L. 100–647, §\u202f1002(a)(14)(F) , substituted “paragraphs (5) and (6) of section 168(h)” for “paragraphs (8) and (9) of section 168(j)”.\nSubsec. (a)(5)(E).  Pub. L. 100–647, §\u202f1002(a)(14)(G) , amended subpar. (E) generally, substituting “provision” for “provisions” and “168(h)” for “168(j)”.\nSubsec. ( l )(2)(C).  Pub. L. 100–647, §\u202f1002(a)(30) , substituted “to which section 168 applies” for “which is recovery property (within the meaning of section 168)”.\nSubsec. ( l )(11)(A)(ii).  Pub. L. 100–647, §\u202f1013(a)(41) , substituted “a private activity bond (within the meaning of section 141)” for “an industrial development bond (within the meaning of section 103(b)(2))”.\nSubsec. (s).  Pub. L. 100–647, §\u202f1002(a)(20) , redesignated subsec. (s), relating to cross reference, as (t).\nSubsec. (s)(9).  Pub. L. 100–647, §\u202f1002(a)(16)(A) , added par. (9).\nSubsec. (t).  Pub. L. 100–647, §\u202f1002(a)(20) , redesignated subsec. (s), relating to cross reference, as (t).\n1986—Subsec. (a)(2)(B)(vii).  Pub. L. 99–514 , §§\u202f1272(d)(5), 1275(c)(5), struck out “932,” after “931,” and “or which is entitled to the benefits of section 934(b)” after “in effect under section 936”, and substituted “or 933” for “,\u2000933, or 934(c)”.\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1802(a)(9)(A) , substituted “514(b)” for “514(c)” and “514(a)” for “514(b)”.\nSubsec. (a)(5)(B)(iii).  Pub. L. 99–514, §\u202f1802(a)(5)(B) , struck out cl. (iii) which provided that (I) in the case of any aircraft used under a qualifying lease (as defined in section 47(a)(7)(C)) and which is leased to a foreign person or entity before  January 1, 1990 , clause (i) shall be applied by substituting “3 years” for “6 months” and that (II) for purposes of applying section 47(a)(1) and (5)(B) there shall not be taken into account any period of a lease to which subclause (I) applies.\nSubsec. (a)(5)(D), (E).  Pub. L. 99–514, §\u202f1802(a)(4)(C) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1809(e)(1) , inserted “Such term includes any section 38 property the reconstruction of which is completed by the taxpayer, but only with respect to that portion of the basis which is properly attributable to such reconstruction.”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1809(e)(2) , in introductory provisions substituted “the first sentence of paragraph (1)” for “paragraph (1)”, in subpar. (B) substituted “3 months after” for “3 months of”, in closing provisions substituted “used under the leaseback (or lease) referred to in subparagraph (B)” for “used under the lease” and inserted “The preceding sentence shall not apply to any property if the lessee and lessor of such property make an election under this sentence. Such an election, once made, may be revoked only with the consent of the Secretary.”\nSubsec. (d)(4)(D).  Pub. L. 99–514, §\u202f701(e)(4)(C) , inserted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)”.\nSubsec. (d)(6)(C)(ii).  Pub. L. 99–514, §\u202f1511(c)(3) , substituted “the underpayment rate” for “the rate” in closing provisions.\nSubsec. (g)(1).  Pub. L. 99–514, §\u202f251(b) , amended par. (1) generally, restating in subpars. (A) to (D) provisions relating to qualified rehabilitated buildings which had in subpar. (A) provided general definition of qualified rehabilitated building, in subpar. (B) directed that 30 years must have elapsed since construction, in subpar. (C) provided general definition of substantially rehabilitated with special rule for phased rehabilitation and application of provision to lessees, and in subpar. (D) provided that rehabilitation included reconstruction, and striking out former subpar. (E) which had provided an alternative test for definition of qualified rehabilitated building.\nSubsec. (g)(2).  Pub. L. 99–514, §\u202f251(b) , amended par. (2) generally, in subpar. (A) striking out reference to amounts “incurred after  December 31, 1981 ” in introductory provision, and in cl. (i) substituting subcls. (I) to (IV) for “for real property (or additions or improvements to real property) which have a recovery period (within the meaning of section 168) of 19 (15 years in the case of low-income housing) years,”, in subpar. (B), in cl. (i), substituting provision relating to use of straight line depreciation for provision relating to use of accelerated methods of depreciation, redesignating former cl. (vi) as (v) and substituting “section 168(h)” for “section 168(j)”, redesignating former cl. (v) as (vi) and substituting “less than the recovery period determined under section 168(c)” for “less than 19 years (15 years in the case of low-income housing”, restating subpar. (C) without change, and in subpar. (D) substituting provisions defining nonresidential real property, residential rental property and class life for provisions defining low-income housing.\nSubsec. (g)(2)(B)(vi)(I).  Pub. L. 99–514, §\u202f1802(a)(9)(B) , substituted “section 168(j)” for “section 168(j)(3)”.\nSubsec. (g)(3).  Pub. L. 99–514, §\u202f251(b) , in amending par. (3) generally, inserted introductory phrase “For purposes of this subsection—”.\nSubsec. (g)(4).  Pub. L. 99–514, §\u202f251(b) , in amending subsec. (g) generally, reenacted par. (4) without change.\nSubsec. ( l )(5).  Pub. L. 99–514, §\u202f1847(b)(6) , substituted “section 23(c)” for “section 44C(c)” and “section 23(c)(4)(A)(viii)” for “section 44C(c)(4)(A)(viii)”.\nSubsec. (q)(3).  Pub. L. 99–514, §\u202f251(c) , struck out “other than a certified historic structure” after “qualified rehabilitated building”.\nSubsec. (q)(7).  Pub. L. 99–514, §\u202f1809(d)(2) , renumbered par. (6), relating to special rule for qualified films, as (7).\nSubsec. (r).  Pub. L. 99–514, §\u202f1879(j)(1) , added subsec. (r). Former subsec. (r) redesignated (s).\nSubsec. (s).  Pub. L. 99–514, §\u202f1879(j)(1) , redesignated former subsec. (r) as (s).\nSubsec. (s)(5).  Pub. L. 99–514, §\u202f803(b)(2)(B) , which directed the general amendment of par. (5) of subsec. (r), was executed by amending par. (5) of subsec. (s) to reflect the probable intent of Congress and the intervening redesignation of subsec. (r) as (s) by  Pub. L. 99–514, §\u202f1879(j)(1) , see note above. Prior to amendment, par. (5) read as follows: “For purposes of this subsection, the term ‘sound recording’ means any sound recording described in section 280(c)(2).”\n1985—Subsec. (g)(2)(A)(i), (B)(v).  Pub. L. 99–121  substituted “19” for “18”.\n1984—Subsec. (a)(5).  Pub. L. 98–369, §\u202f31(b) , amended par. (5) generally, to extend its scope to encompass property used by foreign persons or entities and to create an exception for short-term leases by substituting provisions covered by subpars. (A) to (D) for former provisions which had directed that property used by the United States, any State or political subdivision thereof, any international organization, or any agency or instrumentality of any of the foregoing not be treated as section 38 property, that for purposes of that prohibition the International Telecommunications Satellite Consortium, the International Maritime Satellite Organization, and any successor organization of such Consortium or Organization not be treated as an international organization, and that if any qualified rehabilitated building were used by the governmental unit pursuant to a lease, this paragraph would not apply to that portion of the basis of such building attributable to qualified rehabilitation expenditures.\nSubsec. (b).  Pub. L. 98–369, §\u202f114(a) , amended subsec. (b) generally, substituting a general definition of “new section 38 property” for definitions which made reference to property constructed, reconstructed or erected after  December 31, 1961 , and adding pars. (2) and (3).\nSubsec. (c)(2)(A).  Pub. L. 98–369, §\u202f11(a) , substituted “$125,000 ($150,000 for taxable years beginning after 1987)” for “$150,000 ($125,000 for taxable years beginning in 1981, 1982, 1983, or 1984)” in first sentence, and “$125,000 (or $150,000” for “$150,000 (or $125,000” in two places in second sentence.\nSubsec. (c)(2)(B).  Pub. L. 98–369, §\u202f11(b) , substituted “$62,500 ($75,000 for taxable years beginning after 1987)” for “$75,000 ($62,500 for taxable years beginning in 1981, 1982, 1983, or 1984)”.\nSubsec. (c)(3)(B).  Pub. L. 98–369, §\u202f474 ( o )(10), substituted “section 39” for “section 46(b)”.\nSubsec. (d)(1)(B).  Pub. L. 98–369, §\u202f474 ( o )(11), substituted “section 38(c)(3)(B)” for “section 46(a)(6)”.\nSubsec. (d)(6).  Pub. L. 98–369, §\u202f431(c) , added par. (6).\nSubsec. (f)(3).  Pub. L. 98–369, §\u202f474 ( o )(12), struck out par. (3) which provided that the $25,000 amount specified under subparagraphs (A) and (B) of section 46(a)(3) applicable to an estate or trust be reduced to an amount which bore the same ratio to $25,000 as the amount of the qualified investment allocated to the estate or trust under paragraph (1) to the entire amount of the qualified investment.\nSubsec. (g)(1)(E).  Pub. L. 98–369, §\u202f1043(a) , added subpar. (E).\nSubsec. (g)(2)(A)(i).  Pub. L. 98–369, §\u202f111(e)(8)(A) , (B), substituted “real property” for “property” in two places, and “18 (15 years in the case of low-income housing)” for “15”.\nSubsec. (g)(2)(B)(i).  Pub. L. 98–369, §\u202f31(c)(2) , inserted “The preceding sentence shall not apply to any expenditure to the extent subsection (f)(12) or (j) of section 168 applies to such expenditure.”\nSubsec. (g)(2)(B)(v).  Pub. L. 98–369, §\u202f111(e)(8)(C) , substituted “18 years (15 years in the case of low-income housing)” for “15 years”.\nSubsec. (g)(2)(B)(vi).  Pub. L. 98–369, §\u202f31(c)(1) , added cl. (vi).\nSubsec. (g)(2)(D).  Pub. L. 98–369, §\u202f111(e)(8)(D) , added subpar. (D).\nSubsec. (k)(4).  Pub. L. 98–369, §\u202f113(b)(3)(B) , inserted “or at-risk rules” after “test” in heading.\nSubsec. (k)(4)(A).  Pub. L. 98–369, §\u202f113(b)(3)(A) , inserted “,\u2000section 46(c)(8), or section 46(c)(9)”.\nSubsec. (k)(4)(B).  Pub. L. 98–369, §\u202f113(b)(3)(C) , substituted “used” for “issued”.\nSubsec. (k)(5)(D)(i).  Pub. L. 98–369, §\u202f721(x)(1) , substituted “S corporation” for “electing small business corporation”.\nSubsec. ( l )(1).  Pub. L. 98–369, §\u202f474 ( o )(13), substituted “section 46(b)(2)” for “section 46(a)(2)(C)”.\nSubsec. ( l )(16)(B)(i).  Pub. L. 98–369, §\u202f735(c)(1) , substituted “the chassis of which is an automobile bus chassis and the body of which is an automobile bus body” for “the chassis and body of which is exempt under section 4063(a)(6) from the tax imposed by section 4061(a)”.\nSubsec. (m).  Pub. L. 98–369, §\u202f474 ( o )(14), substituted “subsection (b)” for “subsection (a)(2)”.\nSubsec. (n).  Pub. L. 98–369, §\u202f474 ( o )(15), repealed subsec. (n). For continuing applicability of par. (4) of subsec. (n), see section 474( o )(15) of  Pub. L. 98–369 , set out in Effective Date of 1984 Amendment note below.\nSubsec. ( o )(3) to (8).  Pub. L. 98–369, §\u202f474 ( o )(16), redesignated par. (8) as (3) and struck out former pars. (3) to (7) which defined “employee plan credit”, “basic employee plan credit”, “matching employee plan credit”, “basic employee plan percentage”, and “matching employee plan percentage”, respectively.\nSubsec. (q)(1), (3).  Pub. L. 98–369, §\u202f474 ( o )(17)(A), substituted “section 46(a)” for “section 46(a)(2)”.\nSubsec. (q)(4)(A)(i).  Pub. L. 98–369, §\u202f474 ( o )(17), substituted “section 46(a)” for “section 46(a)(2)” and “section 46(b)(1)” for “section 46(a)(2)(B)”.\nSubsec. (q)(4)(B)(ii).  Pub. L. 98–369, §\u202f474 ( o )(17)(B), substituted “section 46(b)(1)” for “section 46(a)(2)(B)”.\nSubsec. (q)(6).  Pub. L. 98–369, §\u202f712(b) , added par. (6) relating to adjustment in basis of interest in partnership or S corporation.\nPub. L. 98–369, §\u202f113(b)(4) , added par. (6) relating to special rule for qualified films.\nSubsec. (r).  Pub. L. 98–369, §\u202f113(a)(1) , added subsec. (r). Former subsec. (r) redesignated (s).\nPub. L. 98–369, §\u202f474 ( o )(18), substituted “section 381(c)(26)” for “section 381(c)(23)”.\nSubsec. (s).  Pub. L. 98–369, §\u202f113(a)(1) , redesignated former subsec. (r) as (s).\n1983—Subsec. (a)(1)(G).  Pub. L. 97–448, §\u202f102(e)(2)(A) , inserted “(not including a building and its structural components) used in connection” after “storage facility”.\nSubsec. (a)(10).  Pub. L. 97–448, §\u202f202(c) , amended directory language of  Pub. L. 96–223, §\u202f223(a)(1) , to correct an error, and did not involve any change in text. See 1980 Amendment note below.\nSubsec. (g)(1)(C)(i).  Pub. L. 97–448, §\u202f102(f)(2) , (6), substituted “the 24-month period selected by the taxpayer (at the time and in the manner prescribed by regulation) and ending with or within the taxable year” for “the 24-month period ending on the last day of the taxable year” in provisions preceding subcl. (I), substituted “adjusted basis of such building (and its structural components)” for “adjusted basis of such property” both in subcl. (I) and in provision following subcl. (II), and, in provisions following subcl. (II), substituted “holding period of the building” for “holding period of the property” and inserted provision that, for purposes of the preceding sentence, the determination of the beginning of the holding period shall be made without regard to any reconstruction by the taxpayer in connection with the rehabilitation.\nSubsec. (g)(5)(A).  Pub. L. 97–448, §\u202f102(f)(3) , substituted “a credit is determined under section 46(a)(2)” for “a credit is allowed under this section” and “the credit so determined” for “the credit so allowed”. See 1982 Amendment note for subsec. (g)(5) below and see Effective Date of 1982 and 1983 Amendment notes set out under sections 1 and 196 of this title.\nSubsec. ( l )(5).  Pub. L. 97–424, §\u202f546(a)(3) , substituted reference to subpar. (N) for reference to subpar. (M) in provision following subparagraphs.\nSubsec. ( l )(5)(M), (N).  Pub. L. 97–424, §\u202f546(a)(1) , (2), added subpar. (M) and redesignated former subpar. (M) as (N).\nSubsec. (q)(3).  Pub. L. 97–448, §\u202f306(a)(3) , substituted “paragraphs (1) and (2) of this subsection and paragraph (5) of subsection (d)” for “paragraphs (1) and (2)”.\n1982—Subsec. (b).  Pub. L. 97–248, §\u202f209(c) , inserted provision that for purposes of determining whether section 38 property subject to a lease is new section 38 property, such property shall be treated as originally placed in service not earlier than the date such property is used under the lease, but only if such property is leased within 3 months after such property is placed in service.\nSubsec. (c)(2)(D).  Pub. L. 97–354  substituted “Partnerships and S corporations” for “Partnerships” in subpar. heading, and inserted “A similar rule shall apply in the case of an S corporation and its shareholders”.\nSubsec. (d)(5).  Pub. L. 97–248, §\u202f205(a)(4) , added par. (5).\nSubsec. (e).  Pub. L. 97–354, §\u202f5(a)(7) , struck out subsec. (e) relating to apportionment among shareholders of qualified investments by an electing small business corporation.\nSubsec. (g)(5).  Pub. L. 97–248, §\u202f205(a)(5)(A) , struck out par. (5) which, as amended by  §\u202f102(f)(3) of Pub. L. 97–448 , had provided that for purposes of this subtitle, if a credit were determined under section 46(a)(2) for any qualified rehabilitation expenditure in connection with a qualified rehabilitated building other than a certified historic structure, the increase in basis of such property which would (but for this paragraph) have resulted from such expenditure had to be reduced by the amount of the credit so determined, that if during any taxable year there was a recapture amount determined with respect to any qualified rehabilitated building the basis of which was reduced under subpar. (A), the basis of such building (immediately before the event resulting in such recapture), had to be increased by an amount equal to such recapture amount, and that for purposes of this paragraph “recapture amount” was defined as any increase in tax (or adjustment in carrybacks or carryovers) determined under section 47(a)(5). See 1983 Amendment note for subsec. (g)(5) above and see Effective Date of 1982 and 1983 Amendment notes set out under sections 1 and 196 of this title.\nSubsec. (k)(5)(D)(i).  Pub. L. 97–354, §\u202f5(a)(8) , substituted “an S corporation” for “an electing small business corporation (within the meaning of section 1371)”.\nSubsec. ( l )(7).  Pub. L. 97–362, §\u202f104(a) , temporarily substituted the qualification that such term does not include equipment for hydrogenation, refining, or other process subsequent to retorting other than hydrogenation or other process which is applied in the vicinity of the property from which the shale was extracted and which is applied to bring the shale oil to a grade and quality suitable for transportation to and processing in a refinery, for the qualification that such equipment did not include equipment for hydrogenation, refining, or other processes subsequent to retorting. See Effective and Termination Dates of 1982 Amendment note below.\nSubsecs. (q), (r).  Pub. L. 97–248, §\u202f205(a)(1) , added subsec. (q) and redesignated former subsec. (q) as (r).\n1981—Subsec. (a)(1).  Pub. L. 97–34, §\u202f211(e)(4) , in provisions following subpar. (G), substituted “Such term includes only recovery property (within the meaning of section 168 without regard to any useful life) and any other property” for “Such term includes only property”.\nSubsec. (a)(1)(G).  Pub. L. 97–34, §\u202f211(c) , added subpar. (G).\nSubsec. (a)(2)(B)(ii).  Pub. L. 97–34, §\u202f211(h) , designated existing provisions as subcl. (I) and added subcl. (II).\nSubsec. (a)(3)(D).  Pub. L. 97–34, §\u202f212(c) , added subpar. (D).\nSubsec. (a)(4).  Pub. L. 97–34, §\u202f214(a) , inserted provision that, if any qualified rehabilitated building is used by the tax-exempt organization pursuant to a lease, this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures.\nSubsec. (a)(5).  Pub. L. 97–34, §\u202f214(b) , inserted provision that, if any qualified rehabilitated building is used by the governmental unit pursuant to a lease, this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures.\nSubsec. (a)(8).  Pub. L. 97–34, §\u202f212(d)(2)(A) , substituted “or 188” for “188, or 191”.\nSubsec. (a)(9).  Pub. L. 97–34, §\u202f211(a)(2) , struck out par. (9) which set out a special rule for the depreciation of railroad track.\nSubsec. (c)(2)(A) to (C).  Pub. L. 97–34, §\u202f213(a) , amended subpars. (A) to (C) generally raising in subpar. (A) the existing $100,000 dollar limitation to $125,000 in 1981 and to $150,000 in 1985 and in subpar. (B) the existing $50,000 dollar limitation to $62,500 in 1981 and to $75,000 in 1985.\nSubsec. (g).  Pub. L. 97–34, §\u202f212(b) , in amending subsec. (c) generally incorporated the concept of “substantial rehabilitation” into par. (1)(A), substituted “30 years” for “20 years” as the requisite period in par. (1)(B), substituted a definition of “substantially rehabilitated” for former provisions that a major portion could be treated as a separate building in certain cases in par. (1)(C), reenacted par. (1)(D) without change, substituted “ December 31, 1981 ” for “ October 31, 1978 ” in provisions of par. (2)(A) preceding cl. (i), substituted provisions for a recovery period of 15 years for provisions that had provided for a useful life of 5 years or more in cl. (i) of par. (2)(A), reenacted cl. (ii) without change, substituted provisions that accelerated methods of depreciation may not be used for provisions relating to property otherwise section 38 property in cl. (i) of par. (2)(B), reenacted cls. (ii) and (iii) without change, revised the provisions of cl. (iv) relating to certified historic structures, and added cl. (v) relating to expenditures of lessees, added par. (3), redesignated former par. (3) as (4), and added par. (5).\nSubsec. ( l )(2)(C).  Pub. L. 97–34, §\u202f211(e)(3) , inserted “or which is recovery property (within the meaning of section 168)” after “3 years or more”.\nSubsec. (n)(1)(A)(i).  Pub. L. 97–34, §\u202f332(b) , substituted “which does not exceed” for “equal to”.\nSubsec. ( o )(8).  Pub. L. 97–34, §\u202f212(a)(3) , added par. (8).\n1980—Subsec. (a)(1).  Pub. L. 96–451  added subpar. (F) and provision for treatment of the useful life of subpar. (F) property as its normal growing period.\nSubsec. (a)(2)(B)(xi).  Pub. L. 96–223, §\u202f222(i)(2) , added cl. (xi).\nSubsec. (a)(5).  Pub. L. 96–605, §\u202f109(a) , included the International Maritime Satellite Organization or any successor organization within organizations not to be treated as international organizations.\nSubsec. (a)(7)(B).  Pub. L. 95–600, §\u202f312(c)(2) , as amended by  Pub. L. 96–222, §\u202f103(a)(2)(A) , substituted “\u202f‘described in section 50 (as in effect before its repeal by the Revenue Act of 1978’\u202f” for “\u202f‘described in section 50’\u202f”.\nSubsec. (a)(10)(A).  Pub. L. 96–223, §\u202f223(a)(1) , as amended by  Pub. L. 97–448, §\u202f202(c) , provided that “petroleum or petroleum products” does not include petroleum coke or petroleum pitch.\nSubsec. (a)(10)(B).  Pub. L. 96–222, §\u202f108(c)(6) , substituted “5” for “51”.\nSubsec. (g)(2)(B)(i).  Pub. L. 96–222, §\u202f103(a)(4)(B) , substituted “subsections (a)(1)(E) and ( l )” for “subsection (a)(1)(E)”.\nSubsec. ( l )(1).  Pub. L. 96–223, §\u202f221(b)(1) , substituted “For any period for which the energy percentage determined under section 46(a)(2)(C) for any energy property is greater than zero” for “For the period beginning on  October 1, 1978 , and ending on  December 31, 1982 ” in provisions preceding subpar. (A) and, in subpars. (A) and (B), substituted “such energy property” and “such property” for “any energy property”.\nSubsec. ( l )(2)(A).  Pub. L. 96–223, §\u202f222(a) , added cls. (vii), (viii), and (ix).\nSubsec. ( l )(3)(A).  Pub. L. 96–223, §\u202f222(b) , (g)(2), struck out “(other than coke or coke gas)” after “solid fuel” in cl. (iii) and, in cl. (v), substituted provisions relating to equipment which converts coal into a substitute for a petroleum or natural gas derived feedstock for the manufacture of chemicals or other products and equipment which converts coal into methanol, ammonia, or hydroprocessed coal liquid or solid for provisions which had related simply to equipment which used coal as feedstock for the manufacture of chemicals or other products other than coke or coke gas, added cl. (ix), and, following cl. (ix), inserted provision that the equipment described in cl. (vii) includes equipment used for the storage of fuel derived from garbage at the site at which such fuel was produced from garbage.\nSubsec. ( l )(3)(B).  Pub. L. 96–223, §\u202f222(i)(1)(A) , redesignated subpar. (C) as (B). Former subpar. (B), which excluded public utility property from the terms “alternative energy property”, “solar or wind energy property”, or “recycling equipment”, was struck out.\nSubsec. ( l )(3)(C), (D).  Pub. L. 96–223, §\u202f222(i)(1)(A) , (3), redesignated subpar. (D) as (C) and inserted following cl. (ii) provision that, for the purposes of the preceding sentence, in the case of property which is alternative energy property solely by reason of the amendments made by section 222(b) of the Crude Oil Windfall Profit Tax Act of 1980, “ January 1, 1980 ” was to be substituted for “ October 1, 1978 ”. Former subpar. (C) redesignated (B).\nSubsec. ( l )(4)(C).  Pub. L. 96–223, §\u202f222(c) , added subpar. (C).\nSubsec. ( l )(5).  Pub. L. 96–223, §\u202f222(d) , added subpar. (L), redesignated former subpar. (L) as (M), and inserted provision that the Secretary shall not specify any property under subpar. (M) unless he determines that such specification meets the requirements of par. (9) of section 44C(c) for specification of items under section 44C(c)(4)(A)(viii).\nSubsec. ( l )(11).  Pub. L. 96–223, §\u202f221(b)(2) , substituted “one-half of the energy percentage determined under section 46(a)(2)(C)” for “5 percent”.\nPub. L. 96–223, §\u202f223(c)(1) , completely revised par. (11) to incorporate property financed by subsidized energy financing, effective with regard to periods after  Dec. 31, 1982 . Prior to the revision par. (11) read as follows: “In the case of property which is financed in whole or in part by the proceeds of an industrial development bond (within the meaning of section 103(b)(2)) the interest on which is exempt from tax under section 103, the energy percentage shall be one-half of the energy percentage determined under section 46(a)(2)(C).”\nSubsec. ( l )(13).  Pub. L. 96–223, §\u202f222(e)(1) , added par. (13).\nSubsec. ( l )(14).  Pub. L. 96–223, §\u202f222(f) , added par. (14).\nSubsec. ( l )(15).  Pub. L. 96–223, §\u202f222(g)(1) , added par. (15).\nSubsec. ( l )(16).  Pub. L. 96–223, §\u202f222(h) , added par. (16).\nSubsec. ( l )(17).  Pub. L. 96–223, §\u202f222(i)(1)(B) , added par. (17).\nSubsec. (n).  Pub. L. 96–222, §\u202f101(a)(7)(G) , (H), (L)(i)(I)–(IV), (ii)(III)–(VI), (iii)(II), (v)(II)–(IV), (M)(ii), amended subsec. (n) generally to reflect the renaming of an investment tax credit ESOP to a tax credit employee stock ownership plan and a leveraged employee stock ownership plan (commonly referred to as an ESOP) to an employee stock ownership plan.\nSubsec. (n)(6)(B)(i).  Pub. L. 96–605, §\u202f223(a) , substituted “the date on which the securities are contributed to the plan” for “the due date for filing the return for the taxable year (determined with regard to extensions)”.\nSubsec. ( o ).  Pub. L. 96–222, §\u202f101(a)(7)(L)(iii)(III) , (v)(IV), (V), (M)(iii), substituted “employee plan” for “ESOP” wherever appearing and inserted “percentage” after “attributable to the matching employee plan” in par. (5).\n1978—Subsec. (a)(1)(A).  Pub. L. 95–618, §\u202f301(d)(1) , inserted “(other than an air conditioning or heating unit)” after “personal property”.\nSubsec. (a)(1)(D).  Pub. L. 95–600, §\u202f314(a) , added par. (D).\nSubsec. (a)(1)(E).  Pub. L. 95–600, §\u202f315(a) , added par. (E).\nSubsec. (a)(2)(B)(ii).  Pub. L. 95–473, §\u202f2(a)(2)(A) , substituted “providing transportation subject to subchapter I of chapter 105 of title 49” for “subject to part I of the Interstate Commerce Act”.\nSubsec. (a)(7)(A).  Pub. L. 95–600, §\u202f312(c)(3) , struck out “(other than pretermination property)” after “Property”.\nSubsec. (a)(7)(B).  Pub. L. 95–600, §\u202f312(c)(2) , struck out “described in section 50” after “with respect to property”. See 1980 Amendment note above.\nSubsec. (a)(8).  Pub. L. 95–600, §\u202f315(c) , substituted “188, or 191” for “or 188”.\nSubsec. (a)(10).  Pub. L. 95–618, §\u202f301(d)(2) , added par. (10).\nSubsec. (d)(1)(B).  Pub. L. 95–600, §\u202f703(a)(3) , substituted “section 46(a)(6)” for “section 46(a)(5)”.\nSubsec. (d)(4)(D).  Pub. L. 95–600, §\u202f703(a)(4) , substituted “section 57(c)(1)(B)” for “section 57(c)(2)”.\nSubsec. (g).  Pub. L. 95–600, §\u202f315(b) , added subsec. (g).\nSubsec. (h).  Pub. L. 95–600, §\u202f312(c)(1) , struck out subsec. (h) which related to suspension of investment credit.\nSubsec. (i).  Pub. L. 95–600, §\u202f312(c)(1) , struck out subsec. (i) which related to an exemption from suspension of $20,000 of investment.\nSubsec. (j).  Pub. L. 95–600, §\u202f312(c)(1) , struck out subsec. (j) which defined “suspension period”.\nSubsecs. ( l ), (m).  Pub. L. 95–618, §\u202f301(b) , added subsecs. ( l ) and (m) and redesignated former subsec. ( l ) as (n).\nSubsec. (n).  Pub. L. 95–618, §\u202f301(b) , redesignated former subsec. ( l ) as (n).\nPub. L. 95–600, §\u202f141(b) , added subsec. (n). Former subsec. (n) redesignated (p).\nSubsec. ( o ).  Pub. L. 95–600, §\u202f141(b) , added subsec. ( o ).\nSubsecs. (p), (q).  Pub. L. 95–600 , §§\u202f141(b), 314(b), added subsec. (p). Former subsec. (n) redesignated (p) and subsequently as (q).\n1976—Subsec. (a)(2)(B)(vi).  Pub. L. 94–455, §\u202f1901(a)(5)(A) , substituted “( 43 U.S.C. 1331 ))” for “;\u200043 U.S.C., sec. 1331)”.\nSubsec. (a)(2)(B)(vii).  Pub. L. 94–455, §\u202f1051(h)(1) , substituted “(other than a corporation which has an election in effect under section 936 or which is entitled to the benefits of section 934(b))” for “(other than a corporation entitled to the benefits of section 931 or 934(b))”.\nSubsec. (a)(2)(B)(viii).  Pub. L. 94–455, §\u202f1901(a)(5)(B) , substituted “ 47 U.S.C. 702 ” for “47 U.S.C., sec. 702”.\nSubsec. (a)(8).  Pub. L. 94–455 , §§\u202f1901(b)(11)(A), 2112(a)(1), struck out “169,” after “section 167(k),”, “187,” before “or 188 applies”, and provisions relating to the limitation of the applicability of this paragraph on property to which section 169 applies.\nSubsecs. (c)(2)(A), (d)(1), (2)(A).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f802(b)(6) , substituted “section 46(a)(3)” for “section 46(a)(2)”.\nSubsec. (i)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsecs. (k), ( l ).  Pub. L. 94–455, §\u202f804(a) , added subsec. (k) and redesignated former subsec. (k) as subsec. ( l ).\n1975—Subsec. (a)(2)(B).  Pub. L. 94–12, §\u202f604(a) , substituted “territorial waters within the northern portion of the Western Hemisphere” for “territorial waters” in cl. (x) and inserted definition of “northern portion of the Western Hemisphere” following cl. (x).\nSubsec. (c)(2)(A).  Pub. L. 94–12  §\u202f301(c)(1)(A), substituted “$100,000” for “$50,000”.\nSubsec. (c)(2)(B).  Pub. L. 94–12, §\u202f301(c)(1)(A) , (B), substituted “$50,000” for “$25,000” and “$100,000” for “$50,000”.\nSubsec. (c)(2)(C).  Pub. L. 94–12, §\u202f301(c)(1)(A) , substituted “$100,000” for “$50,000”.\nSubsec. (d)(1), (2)(A).  Pub. L. 94–12, §\u202f302(c)(3) , substituted “section 46(e)(1)” for “section 46(d)(1)”.\n1971—Subsec. (a)(1).  Pub. L. 92–178, §\u202f102(a)(2) , substituted “3 years” for “4 years” in second sentence.\nSubsec. (a)(1)(B)(ii), (iii).  Pub. L. 92–178, §\u202f104(a)(1) , substituted “research facility” for “research or storage facility” in cl. (ii) and added cl. (iii).\nSubsec. (a)(2)(B).  Pub. L. 92–178, §\u202f104(c)(2) , (3), (d), added cls. (viii) to (x), respectively.\nSubsec. (a)(3)(C).  Pub. L. 92–178, §\u202f104(b) , added subpar. (C).\nSubsec. (a)(5).  Pub. L. 92–178, §\u202f104(c)(1) , inserted “(other than the International Telecommunications Satellite Consortium or any successor organization)” after “international organization”.\nSubsec. (a)(6).  Pub. L. 92–178, §\u202f104(e) , substituted provisions for treatment of livestock (other than horses) acquired by the taxpayer as section 38 property, with exception provision for reduction of acquisition cost by amount equal to amount realized on sale or other disposition under certain circumstances, and for nontreatment of horses as section 38 property for former provision that livestock shall not be treated as section 38 property.\nSubsec. (a)(7) to (9).  Pub. L. 92–178 , §§\u202f103, 104(f)(1), (g), added pars. (7) to (9), respectively.\nSubsec. (d).  Pub. L. 92–178, §\u202f108(b)  and (c), substituted “section 46(d)(1)” for “section 46(d)”; and designated as par. (1) the present first sentence, redesignated as subpars. (A) and (B) provisions formerly designated cls. (1) and (2), again substituted “section 46(d)(1)” for “section 46(d)” in par. (1) and inserted “(other than property described in paragraph (4))” in par. (1), added pars. (2) and (4), incorporated provisions of former second, third, and fourth sentences in provisions designated as par. (3), substituted in par. (3) “the lessee shall be treated for all purposes of this subpart as having acquired a fractional portion of such property equal to the fraction determined under paragraph (2)(B) with respect to such property” for “the lessee shall be treated for all purposes of this subpart as having acquired such property”, and struck out former fifth and sixth sentences respecting election regarding treatment of leases of suspension period property and section 38 property. See Effective Date of 1971 Amendment note below.\n1969—Subsec. (a)(4).  Pub. L. 91–172, §\u202f121(d)(2)(A) , inserted provision relating to the percentage of the basis or cost of debt-financed property that may be considered in computing qualified investment under  section 46(c) of this title .\nSubsec. (c)(2)(C).  Pub. L. 91–172, §\u202f401(e)(2) , reenacted subpar. (C) with minor changes and substituted reference to controlled group for reference to affiliated group.\nSubsec. (c)(3)(C).  Pub. L. 91–172, §\u202f401(e)(3) , substituted definition of controlled group for definition of affiliated group.\nSubsec. (d)(2).  Pub. L. 91–172, §\u202f401(e)(4) , substituted reference to a component member of a controlled group for reference to a member of an affiliated group.\n1967—Subsec. (a)(2)(B)(i).  Pub. L. 90–26, §\u202f3 , inserted “or is operated under contract with the United States” after “the United States”.\nSubsec. (h)(2).  Pub. L. 90–26, §\u202f2(a) , limited definition of suspension period property to section 38 property where the physical construction, reconstruction or erection was begun before  May 24, 1967 , pursuant to an order placed during the suspension period, subject to the proviso that in applying the definition to property the physical construction, reconstruction or erection of which was begun before  May 24, 1967 , only that portion of the basis properly attributable to construction, reconstruction or erection before  May 24, 1967  be taken into account.\nSubsec. (j).  Pub. L. 90–26, §\u202f1 , substituted “ March 9, 1967 ” for “ December 31, 1967 ”.\n1966—Subsec. (a)(2)(B).  Pub. L. 89–809  added cl. (vii).\nSubsec. (d).  Pub. L. 89–800, §\u202f1(b) , inserted provisions covering the treatment of suspension period property, and the elections to be deemed made in connection therewith.\nSubsecs. (h) to (k).  Pub. L. 89–800, §\u202f1(a) , added subsecs. (h) to (j) and redesignated former subsec. (h) as (k).\n1964—Subsec. (a)(1)(C).  Pub. L. 88–272, §\u202f203(c)(2) , added subpar. (C).\nSubsec. (d).  Pub. L. 88–272, §\u202f203(a)(3)(A) , (b), substituted “except as provided in paragraph (2)” for “if such property was constructed by the lessor (or by a corporation which controls or is controlled by the lessor within the meaning of section 368(c))” in par. (1), “if such property is leased by a corporation which is a member of an affiliated group (within the meaning of section 46(a)(5) to another corporation which is a member of the same affiliated group” for “if paragraph (1) does not apply” in par. (2), and deleted provisions which stated that if a lessor made an election under this subsection, subsec. (g) would not apply with respect to such property, and deductions otherwise allowable under section 162 to the lessee for amounts paid the lessor would be adjusted consistent with subsec. (g).\nSubsec. (g).  Pub. L. 88–272, §\u202f203(a)(1) , repealed subsec. (g) which required that the basis of section 38 property be reduced by 7 percent of the qualified investment.\nAmendment by section 13101(d), (e)(2)(B), (3) of  Pub. L. 117–169  applicable to facilities placed in service after  Dec. 31, 2021 , see  section 13101(k)(1) of Pub. L. 117–169 , set out in a note under  section 45 of this title .\nAmendment by section 13102(a)–(e), (k), (p) of  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2021 , see  section 13102(q)(1) of Pub. L. 117–169 , set out in a note under  section 45 of this title .\nAmendment by section 13102(f)(3), (g), (h), (j), ( l ), ( o ) of  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2022 , see  section 13102(q)(2) of Pub. L. 117–169 , set out in a note under  section 45 of this title .\nAmendment by  section 13102(m) of Pub. L. 117–169  applicable to property the construction of which begins after  Aug. 16, 2022 , see  section 13102(q)(3) of Pub. L. 117–169 , set out in a note under  section 45 of this title .\nPub. L. 117–169, title I, §\u202f13103(b) ,  Aug. 16, 2022 ,  136 Stat. 1924 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2023 .”\nPub. L. 117–169, title I, §\u202f13204(c)(3) ,  Aug. 16, 2022 ,  136 Stat. 1941 , provided that:  “The amendments made by this subsection [amending this section] shall apply to property placed in service after  December 31, 2022 , and, for any property the construction of which begins prior to  January 1, 2023 , only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after  December 31, 2022 .”\nAmendment by  section 131 of Pub. L. 116–260  effective  Jan. 1, 2021 , see  section 131(d) of div. EE of Pub. L. 116–260 , set out as a note under  section 45 of this title .\nPub. L. 116–260, div. EE, title I, §\u202f132(c) ,  Dec. 27, 2020 ,  134 Stat. 3053 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2020 .”\nPub. L. 116–260, div. EE, title II, §\u202f203(e) ,  Dec. 27, 2020 ,  134 Stat. 3057 , provided that:  “The amendments made by this section [amending this section] shall apply to periods after  December 31, 2020 , under rules similar to the rules of section 48(m) as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ].”\nPub. L. 116–260, div. EE, title II, §\u202f204(b) ,  Dec. 27, 2020 ,  134 Stat. 3058 , provided that:  “The amendment made by this section [amending this section] shall apply to periods after  December 31, 2016 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nAmendment by  Pub. L. 116–94  effective on  Jan. 1, 2018 , see  section 127(d) of Pub. L. 116–94 , set out as a note under  section 45 of this title .\nAmendment by  section 40409(b) of Pub. L. 115–123  effective on  Jan. 1, 2017 , see  section 40409(c) of Pub. L. 115–123 , set out as a note under  section 45 of this title .\nPub. L. 115–123, div. D, title I, §\u202f40411(g) ,  Feb. 9, 2018 ,  132 Stat. 151 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to periods after  December 31, 2016 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]). \n \n “(2)   Extension of combined heat and power system property .— The amendment made by subsection (e) [amending this section] shall apply to property placed in service after  December 31, 2016 . \n \n “(3)   Phaseouts and terminations .— The amendments made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [ Feb. 9, 2018 ].”\nPub. L. 114–113, div. P, title III, §\u202f302(c) ,  Dec. 18, 2015 ,  129 Stat. 3039 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2015 .”\nPub. L. 114–113, div. P, title III, §\u202f303(d) ,  Dec. 18, 2015 ,  129 Stat. 3039 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 18, 2015 ].”\nAmendment by  section 187(b) of Pub. L. 114–113  effective  Jan. 1, 2015 , see  section 187(c) of Pub. L. 114–113 , set out as a note under  section 45 of this title .\nAmendment by  section 155(b) of Pub. L. 113–295  effective  Jan. 1, 2014 , see  section 155(c) of Pub. L. 113–295 , set out as a note under  section 45 of this title .\nAmendment by  section 209(d) of Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 112–240  effective on  Jan. 2, 2013 , and amendment by  section 407(c)(1) of Pub. L. 112–240  applicable as if included in the enactment of the provisions of the American Recovery and Reinvestment Act of 2009,  Pub. L. 111–5 , to which it relates, see  section 407(d) of Pub. L. 112–240 , set out as a note under  section 45 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1102(b) ,  Feb. 17, 2009 ,  123 Stat. 320 , provided that:  “The amendments made by this section [amending this section] shall apply to facilities placed in service after  December 31, 2008 .”\nAmendment by section 1103(a), (b)(1) of  Pub. L. 111–5  applicable to periods after  Dec. 31, 2008 , under rules similar to the rules of subsec. (m) of this section as in effect on the day before  Nov. 5, 1990 , see  section 1103(c)(1) of Pub. L. 111–5 , set out as a note under  section 25C of this title .\nPub. L. 110–343, div. B, title I, §\u202f103(f) ,  Oct. 3, 2008 ,  122 Stat. 3813 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 38 of this title ] shall take effect on the date of the enactment of this Act [ Oct. 3, 2008 ]. \n \n “(2)   Allowance against alternative minimum tax .— The amendments made by subsection (b) [amending  section 38 of this title ] shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits. \n \n “(3)   Combined heat and power and fuel cell property .— The amendments made by subsections (c) and (d) [amending this section] shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]). \n \n “(4)   Public utility property .— The amendments made by subsection (e) [amending this section] shall apply to periods after  February 13, 2008 , in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).”\nPub. L. 110–343, div. B, title I, §\u202f104(e) ,  Oct. 3, 2008 ,  122 Stat. 3814 , provided that:  “The amendments made by this section [amending this section] shall apply to periods after the date of the enactment of this Act [ Oct. 3, 2008 ], in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nPub. L. 110–343, div. B, title I, §\u202f105(b) ,  Oct. 3, 2008 ,  122 Stat. 3814 , provided that:  “The amendments made by this section [amending this section] shall apply to periods after the date of the enactment of this Act [ Oct. 3, 2008 ], in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nPub. L. 109–58, title XIII, §\u202f1336(e) ,  Aug. 8, 2005 ,  119 Stat. 1038 , provided that:  “The amendments made by this section [amending this section] shall apply to periods after  December 31, 2005 , in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nPub. L. 109–58, title XIII, §\u202f1337(d) ,  Aug. 8, 2005 ,  119 Stat. 1038 , provided that:  “The amendments made by this section [amending this section] shall apply to periods after  December 31, 2005 , in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]).”\nAmendment by section 322(d)(2)(A), (B) of  Pub. L. 108–357  applicable with respect to expenditures paid or incurred after  Oct. 22, 2004 , see  section 322(e) of Pub. L. 108–357 , set out as a note under  section 46 of this title .\nAmendment by  section 710(e) of Pub. L. 108–357  applicable, except as otherwise provided, to electricity produced and sold after  Oct. 22, 2004 , in taxable years ending after such date, see  section 710(g) of Pub. L. 108–357 , as amended, set out as a note under  section 45 of this title .\nPub. L. 102–486, title XIX, §\u202f1916(b) ,  Oct. 24, 1992 ,  106 Stat. 3024 , provided that:  “The amendments made by this section [amending this section] shall take effect on  June 30, 1992 .”\nAmendment by  section 11813(a) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the amendment by  section 803(b)(2)(B) of Pub. L. 99–514  is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nAmendment by section 251(b), (c) of  Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided for certain rehabilitations, see  section 251(d) of Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 701(e)(4)(C) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 803(b)(2)(B) of Pub. L. 99–514  applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .\nAmendment by sections 1272(d)(5) and 1275(c)(5) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by  section 1511(c)(3) of Pub. L. 99–514  applicable for purposes of determining interest for periods after  Dec. 31, 1986 , see  section 1511(d) of Pub. L. 99–514 , set out as a note under  section 47 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(j)(2) ,  Oct. 22, 1986 ,  100 Stat. 2909 , provided that:  “The amendments made by this subsection [amending this section] shall apply to periods after  December 31, 1978  (under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1954 [now 1986]), in taxable years ending after such date.”\nPub. L. 99–514, title XVIII, §\u202f1881 ,  Oct. 22, 1986 ,  100 Stat. 2914 , provided that:  “Except as otherwise provided in this subtitle, any amendment made by this subtitle [subtitle A (§§\u202f1801–1881) of title XVIII of  Pub. L. 99–514 , see Tables for classification] shall take effect as if included in the provision of the Tax Reform Act of 1984 [ Pub. L. 98–369, div. A ] to which such amendment relates.”\nAmendment by  Pub. L. 99–121  applicable with respect to property placed in service by the taxpayer after  May 8, 1985 , with specified exceptions, but amendment of subsec. (g)(2)(B)(v) not applicable to leases entered into before  May 22, 1985 , if the lessee signed the lease before  May 17, 1985 , see section 105(b)(1), (5) of  Pub. L. 99–121 , set out as a note under  section 168 of this title .\nPub. L. 98–369, div. A, title I, §\u202f18 ,  July 18, 1984 ,  98 Stat. 506 , provided that: \n “(a)   General Rule .— The amendments made by this part [part I (§§\u202f11–18) of subtitle A of title I of div. A of  Pub. L. 98–369 , amending this section and sections 41, 46, 57, 128, 168, 179, 265, 415, 854, 857, and 911 of this title, enacting provisions set out as a note under  section 168 of this title , and amending provisions set out as notes under sections 128 and 168 of this title] shall apply to taxable years ending after  December 31, 1983 . \n \n “(b)   Special Rule for Section  14.— The amendment made by section 14 [amending  section 41 of this title ] shall not apply in the case of a tax credit employee stock ownership plan if— “(1)  such plan was favorably approved on  September 23, 1983 , by employees, and \n \n “(2)  not later than  January 11, 1984 , the employer of such employees was 100 percent owned by such plan.”\nAmendment by section 31(b), (c)(1) of  Pub. L. 98–369  effective, except as otherwise provided in  section 31(g) of Pub. L. 98–369 , as to property placed in service by the taxpayer after  May 23, 1983 , in taxable years ending after such date and to property placed in service by the taxpayer on or before  May 23, 1983 , if the lease to the tax-exempt entity is entered into after  May 23, 1983 , and amendment by  section 31(c)(2) of Pub. L. 98–369 , to the extent it relates to  section 168(f)(12) of this title , effective as if it had been included in the amendments to  section 168 of this title  by  section 216(a) of Pub. L. 97–248 , see section 31(g)(1), (12) of  Pub. L. 98–369 , set out as a note under  section 168 of this title .\nAmendment by  section 111(e)(8) of Pub. L. 98–369  applicable with respect to property placed in service by the taxpayer after  Mar. 15, 1984 , subject to certain exceptions, see  section 111(g) of Pub. L. 98–369 , set out as a note under  section 168 of this title .\nAmendment by  section 113(b)(3) of Pub. L. 98–369  applicable as if included in the amendments made by sections 201(a), 211(a)(1), and 211(f)(1) of  Pub. L. 97–34 , which enacted section 168 and amended  section 46 of this title , see  section 113(c)(2)(B) of Pub. L. 98–369 , set out as a note under  section 168 of this title .\nAmendment by  section 113(b)(4) of Pub. L. 98–369  applicable as if included in the amendments made by  section 205(a)(1) of Pub. L. 97–248 , see  section 113(c)(2)(C) of Pub. L. 98–369 , set out as a note under  section 168 of this title .\nPub. L. 98–369, div. A, title I, §\u202f113(c)(1) ,  July 18, 1984 ,  98 Stat. 637 , provided that:  “The amendments made by subsection (a) [amending this section and  section 168 of this title ] shall apply to property placed in service after  March 15, 1984 , in taxable years ending after such date.”\nPub. L. 98–369, div. A, title I, §\u202f114(b) ,  July 18, 1984 ,  98 Stat. 638 , provided that:  “The amendment made by this section [amending this section] shall apply to property originally placed in service after  April 11, 1984  (determined without regard to such amendment).”\nAmendment by  section 431(c) of Pub. L. 98–369  applicable to property placed in service after  July 18, 1984 , in taxable years ending after such date, but not applicable to property to which sections 46(c)(8), (9) and 47(d) of this title, as enacted by  section 211(f) of Pub. L. 97–34 , do not apply, with the taxpayer having an option to elect retroactive application of amendment by  Pub. L. 98–369 , see  section 431(e) of Pub. L. 98–369 , set out as a note under  section 46 of this title .\nAmendment by section 474( o )(10)–(18) of  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f474 ( o )(15),  July 18, 1984 ,  98 Stat. 837 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Subsection (n) of section 48 (relating to requirements for allowance of employee plan percentage) is hereby repealed; except that paragraph (4) of section 48(n) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before its repeal by this paragraph) shall continue to apply in the case of any recapture under section 47(f) of such Code of a credit allowable for a taxable year beginning before  January 1, 1984 .”\nAmendment by  section 712(b) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  section 721(x)(1) of Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nAmendment by  section 735(c)(1) of Pub. L. 98–369  effective, except as otherwise provided, as if included in the provisions of the Highway Revenue Act of 1982, title V of  Pub. L. 97–424 , to which such amendment relates, see  section 736 of Pub. L. 98–369 , set out as a note under  section 4051 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1043(b) ,  July 18, 1984 ,  98 Stat. 1044 , provided that:  “The amendments made by this section [amending this section] shall apply to expenditures incurred after  December 31, 1983 , in taxable years ending after such date.”\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 202(c) of Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980,  Pub. L. 96–223  to which such amendment relates, see  section 203(a) of Pub. L. 97–448 , set out as a note under  section 6652 of this title .\nAmendment by  section 306(a)(3) of Pub. L. 97–448  effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 311(d) of Pub. L. 97–448 , set out as a note under  section 31 of this title .\nPub. L. 97–362, title I, §\u202f104(b) ,  Oct. 25, 1982 ,  96 Stat. 1729 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply to periods beginning after  December 31, 1980 , and before  January 1, 1983 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by section 205(a)(1), (4), (5)(A) of  Pub. L. 97–248 , applicable to periods after  Dec. 31, 1982 , under rules similar to the rules of subsec. (m) of this section, with certain exceptions and qualifications, see  section 205(c)(1) of Pub. L. 97–248 , set out as an Effective Date note under  section 196 of this title .\nAmendment by  section 209(c) of Pub. L. 97–248  applicable to property placed in service after  Dec. 31, 1983 , but not to qualified leased property described in  section 168(f)(8)(D)(v) of this title  which is placed in service before  Jan. 1, 1988 , or is placed in service after such date pursuant to a binding contract or commitment entered into before  April 1, 1983 , and solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee, see sections 208(d)(5) and 209(d)(2) of  Pub. L. 97–248 , set out as notes under  section 168 of this title .\nPub. L. 97–34, title II, §\u202f213(b) ,  Aug. 13, 1981 ,  95 Stat. 240 , as amended by  Pub. L. 97–448, title I, §\u202f102(g) ,  Jan. 12, 1983 ,  96 Stat. 2372 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1980 .”\nPub. L. 97–34, title II, §\u202f214(c) ,  Aug. 13, 1981 ,  95 Stat. 241 , provided that:  “The amendments made by this section [amending this section] shall apply to uses after  July 29, 1980 , in taxable years ending after such date.”\nPub. L. 97–34, title III, §\u202f332(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 296 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to qualified investments made after  December 31, 1981 .”\nAmendment by section 211(a)(2), (e)(3), (4) of  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , see  section 211(i)(1) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by  section 211(c) of Pub. L. 97–34  applicable to periods after  Dec. 31, 1980 , under rules similar to the rules under subsec. (m) of this section, see  section 211(i)(3) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by  section 211(h) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1980 , see  section 211(i)(6) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by section 212(a)(3), (b), (c), (d)(2)(A) of  Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after such date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nPub. L. 96–605, title I, §\u202f109(b) ,  Dec. 28, 1980 ,  94 Stat. 3525 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1979 .”\nPub. L. 96–605, title II, §\u202f223(b) ,  Dec. 28, 1980 ,  94 Stat. 3528 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1980 .”\nPub. L. 96–451, title III, §\u202f302(b) ,  Oct. 14, 1980 ,  94 Stat. 1991 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to additions to capital account made after  December 31, 1979 .”\nPub. L. 96–223, title II, §\u202f222(j) ,  Apr. 2, 1980 ,  94 Stat. 266 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 46 of this title ] shall apply to periods after  December 31, 1979 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(2)   Alumina electrolytic cells .— The amendments made by subsection (d)(1) [amending this section] shall apply to periods after  September 30, 1978 , under rules similar to the rules of section 48(m) of such Code.”\nPub. L. 96–223, title II, §\u202f223(a)(2) ,  Apr. 2, 1980 ,  94 Stat. 266 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to periods after  December 31, 1979 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nPub. L. 96–223, title II, §\u202f223(c)(2) ,  Apr. 2, 1980 ,  94 Stat. 267 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to periods after  December 31, 1982 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\n“(B)  Earlier application for certain property .—In the case of property which is—\n“(i) qualified hydroelectric generating property (described in section 48( l )(2)(A)(vii) of such Code),\n“(ii) cogeneration equipment (described in section 48( l )(2)(A)(viii) of such Code),\n“(iii) qualified intercity buses (described in section 48( l )(2)(A)(ix) of such Code),\n“(iv) ocean thermal property (described in section 48( l )(3)(A)(ix) of such Code), or\n“(v) expanded energy credit property,\nthe amendment made by paragraph (1) shall apply to periods after  December 31, 1979 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986.\n“(C)  Expanded energy credit property .—For purposes of subparagraph (B), the term ‘expanded energy credit property’ means—\n“(i) property to which section 48( l )(3)(A) of such Code applies because of the amendments made by paragraphs (1) and (2) of section 222(b) [amending this section],\n“(ii) property described in section 48( l )(4)(C) of such Code (relating to solar process heat),\n“(iii) property described in section 48( l )(5)(L) of such Code (relating to alumina electrolytic cells), and\n“(iv) property described in the last sentence of section 48( l )(3)(A) of such Code (relating to storage equipment for refuse-derived fuel).\n“(D)  Financing taken into account .—For the purpose of applying the provisions of section 48( l )(11) of such Code in the case of property financed in whole or in part by subsidized energy financing (within the meaning of section 48( l )(11)(C) of such Code), no financing made before  January 1, 1980 , shall be taken into account. The preceding sentence shall not apply to financing provided from the proceeds of any tax exempt industrial development bond (within the meaning of section 103(b)(2) of such Code).”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 96–222, title I, §\u202f108(c)(7) ,  Apr. 1, 1980 ,  94 Stat. 228 , provided that:  “Any amendment made by this subsection [amending sections 4071, 4221, 6416, and 6421 of this title] shall take effect as if included in the provision of the Energy Tax Act of 1978 [See Short Title of 1978 Amendment note set out under  section 1 of this title ] to which such amendment relates; except that the amendment made by paragraph (6) [amending this section] shall take effect on the first day of the first calendar month which begins more than 10 days after the date of the enactment of this Act [ Apr. 1, 1980 ].”\nPub. L. 95–618, title III, §\u202f301(d)(4) ,  Nov. 9, 1978 ,  92 Stat. 3200 , provided that: \n “(A)   In general .— The amendments made by this subsection [amending this section and  section 167 of this title ] shall apply to property which is placed in service after  September 30, 1978 . \n \n “(B)   Binding contracts .— The amendments made by this subsection [amending this section and  section 167 of this title ] shall not apply to property which is constructed, reconstructed, erected, or acquired pursuant to a contract which, on  October 1, 1978 , and at all times thereafter, was binding on the taxpayer.”\nAmendment by  section 141(b) of Pub. L. 95–600  effective with respect to qualified investment for taxable years beginning after  Dec. 31, 1978 , see  section 141(g)(1) of Pub. L. 95–600 , set out as an Effective Date note under  section 409 of this title .\nAmendment by section 312(c)(1), (2), (3) of  Pub. L. 95–600  applicable to taxable years ending after  Dec. 31, 1978 , see  section 312(d) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nPub. L. 95–600, title III, §\u202f314(c) ,  Nov. 6, 1978 ,  92 Stat. 2828 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years ending after  August 15, 1971 .”\nPub. L. 95–600, title III, §\u202f315(d) ,  Nov. 6, 1978 ,  92 Stat. 2829 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending after  October 31, 1978 ; except that the amendment made by subsection (c) shall only apply with respect to property placed in service after such date.”\nAmendment by section 703(a)(3), (4) of  Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  section 802(b)(6) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 802(c) of Pub. L. 94–455 , set out as a note under  section 46 of this title .\nPub. L. 94–455, title VIII, §\u202f804(e) ,  Oct. 4, 1976 ,  90 Stat. 1596 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by subsections (a) and (b) [amending this section and  section 47 of this title ] shall apply to taxable years beginning after  December 31, 1974 . \n \n “(2)   Election may also apply to property described in section 50( a).— At the election of the taxpayer, made within 1 year after the date of the enactment of this Act [ Oct. 4, 1976 ] in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe, the amendments made by subsections (a) and (b) shall also apply to property which is property described in section 50(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] and which is placed in service in taxable years beginning before  January 1, 1975 .”\nAmendment by  section 1051(h)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975  with certain exceptions, see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by section 1901(a)(5), (b)(11)(A) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 2112(a) of Pub. L. 94–455  applicable to property acquired by the taxpayer after  Dec. 31, 1976 , and property, the construction, reconstruction, or erection of which was completed by the taxpayer after  Dec. 31, 1976 , (but only to the extent of the basis thereof attributable to construction, reconstruction, or erection after such date), in taxable years beginning after such date, see  section 2112(d)(1) of Pub. L. 94–455 , set out as a note under  section 46 of this title .\nPub. L. 94–12, title III, §\u202f301(c)(2) ,  Mar. 29, 1975 ,  89 Stat. 38 , as amended by  Pub. L. 94–455, title VIII, §\u202f801 ,  Oct. 4, 1976 ,  90 Stat. 1580 ;  Pub. L. 95–600, title III, §\u202f311(b) ,  Nov. 6, 1978 ,  92 Stat. 2824 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply only to taxable years beginning after  December 31, 1974 .”\nAmendment by  section 302(c)(3) of Pub. L. 94–12  applicable to taxable years ending after  Dec. 31, 1974 , see  section 305(a) of Pub. L. 94–12 , set out as an Effective Date of 1975 Amendment note under  section 46 of this title .\nPub. L. 94–12, title VI, §\u202f604(b) ,  Mar. 29, 1975 ,  89 Stat. 65 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section] shall apply to property, the construction, reconstruction, or erection of which was completed after  March 18, 1975 , or the acquisition of which by the taxpayer occurred after such date. \n \n “(2)   Binding contract .— The amendments made by subsection (a) [amending this section] shall not apply to property constructed, reconstructed, erected, or acquired pursuant to a contract which was on  April 1, 1974 , and at all times thereafter, binding on the taxpayer. \n \n “(3)   Certain lease-back transactions, etc .— Where a person who is a party to a binding contract described in paragraph (2) transfers rights in such contract (or in the property to which such contract relates) to another person but a party to such contract retains a right to use the property under a lease with such other person, then to the extent of the transferred rights such other person shall, for purposes of paragraph (2), succeed to the position of the transferor with respect to such binding contract and such property. The preceding sentence shall apply, in any case in which the lessor does not make an election under section 48(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], only if a party to such contract retains a right to use the property under a long-term lease.”\nPub. L. 92–178, title I, §\u202f104(h) ,  Dec. 10, 1971 ,  85 Stat. 503 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and sections 169 and 1245 of this title] (other than by subsections (c)(1), (c)(2), and (g) [amending this section]) shall apply to property described in section 50 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. The amendments made by subsections (c)(1), (c)(2), and (g) [amending this section] shall apply to taxable years ending after  December 31, 1961 .”\nAmendment by section 108(b), (c) of  Pub. L. 92–178 , applicable to leases entered into after  Sept. 22, 1971 , and after  Nov. 8, 1971 , respectively, see  section 108(d) of Pub. L. 92–178 , set out as a note under  section 46 of this title .\nAmendment by  section 121(d)(2)(A) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nAmendment by section 401(e)(2)–(4) of  Pub. L. 91–172  applicable with respect to taxable years ending on or after  Dec. 31, 1970 , see  section 401(h)(3) of Pub. L. 91–172 , set out as a note under  section 1561 of this title .\nPub. L. 90–26, §\u202f4 ,  June 13, 1967 ,  81 Stat. 58 , provided that:  “The amendments made by the first three sections of this Act [amending this section and  section 167 of this title ] shall apply to taxable years ending after  March 9, 1967 .”\nPub. L. 89–809, title II, §\u202f201(b) ,  Nov. 13, 1966 ,  80 Stat. 1576 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1965 , but only with respect to property placed in service after such date. In applying section 46(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to carryback and carryover of unused credits), the amount of any investment credit carryback to any taxable year ending on or before  December 31, 1965 , shall be determined without regard to the amendments made by this section.”\nAmendment by  Pub. L. 89–800  applicable to taxable years ending after  Oct. 9, 1966 , see  section 4 of Pub. L. 89–800 , set out as a note under  section 46 of this title .\nPub. L. 88–272, title II, §\u202f203(a)(4) ,  Feb. 26, 1964 ,  78 Stat. 34 , provided that:  \n “Paragraphs (1) [amending this section] and (3) [amending this section and  section 1016 of this title  and repealing  section 181 of this title ] of this subsection shall apply— \n “(A)  in the case of property placed in service after  December 31, 1963 , with respect to taxable years ending after such date, and \n \n “(B)  in the case of property placed in service before  January 1, 1964 , with respect to taxable years beginning after  December 31, 1963 .”\nPub. L. 88–272, title II, §\u202f203(f) ,  Feb. 26, 1964 ,  78 Stat. 35 , provided that: \n “(1)  The amendments made by subsection (b) [amending this section] shall apply with respect to property possession of which is transferred to a lessee on or after the date of enactment of this Act [ Feb. 26, 1964 ]. \n \n “(2)  The amendments made by subsection (c) [amending this section] shall apply with respect to taxable years ending after  June 30, 1963 . \n \n “(3)  The amendments made by subsection (d) [amending  section 1245 of this title ] shall apply with respect to dispositions after  December 31, 1963 , in taxable years ending after such date.”\nSection applicable with respect to taxable years ending after  Dec. 31, 1961 , see  section 2(h) of Pub. L. 87–834 , set out as a note under  section 46 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFunctions, powers, and duties of Federal Aviation Agency and of Administrator and other offices and officers thereof transferred by  Pub. L. 89–670 ,  Oct. 15, 1966 ,  80 Stat. 931 , to Secretary of Transportation, with functions, powers, and duties of Secretary of Transportation pertaining to aviation safety to be exercised by Federal Aviation Administrator in Department of Transportation, see  section 106 of Title 49 , Transportation.\nPub. L. 111–5, div. B, title I, §\u202f1603 ,  Feb. 17, 2009 ,  123 Stat. 364 , as amended by  Pub. L. 111–312, title VII, §\u202f707 ,  Dec. 17, 2010 ,  124 Stat. 3312 ;  Pub. L. 112–81, div. A, title X, §\u202f1096(a) ,  Dec. 31, 2011 ,  125 Stat. 1608 ;  Pub. L. 112–240, title IV, §\u202f407(c)(2) ,  Jan. 2, 2013 ,  126 Stat. 2342 , provided that: \n “(a)   In General .— Upon application, the Secretary of the Treasury shall, subject to the requirements of this section, provide a grant to each person who places in service specified energy property to reimburse such person for a portion of the expense of such property as provided in subsection (b). No grant shall be made under this section with respect to any property unless such property— “(1)  is originally placed in service by such person during 2009, 2010, or 2011, or \n \n “(2)  is originally placed in service by such person after 2011 and before the credit termination date with respect to such property, but only if the construction of such property began during 2009, 2010, or 2011. \n \n \n “(b)   Grant Amount.— “(1)   In general .— The amount of the grant under subsection (a) with respect to any specified energy property shall be the applicable percentage of the basis of such property. \n \n “(2)   Applicable percentage .— For purposes of paragraph (1), the term ‘applicable percentage’ means— “(A)  30 percent in the case of any property described in paragraphs (1) through (4) of subsection (d), and \n \n “(B)  10 percent in the case of any other property. \n \n \n “(3)   Dollar limitations .— In the case of property described in paragraph (2), (6), or (7) of subsection (d), the amount of any grant under this section with respect to such property shall not exceed the limitation described in section 48(c)(1)(B), 48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue Code of 1986, respectively, with respect to such property. \n \n \n “(c)   Time for Payment of Grant .— The Secretary of the Treasury shall make payment of any grant under subsection (a) during the 60-day period beginning on the later of— “(1)  the date of the application for such grant, or \n \n “(2)  the date the specified energy property for which the grant is being made is placed in service. \n \n \n “(d)   Specified Energy Property .— For purposes of this section, the term ‘specified energy property’ means any of the following: “(1)   Qualified facilities .— Any qualified property (as defined in section 48(a)(5)(D) of the Internal Revenue Code of 1986) which is part of a qualified facility (within the meaning of section 45 of such Code) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d) of such Code. \n \n “(2)   Qualified fuel cell property .— Any qualified fuel cell property (as defined in section 48(c)(1) of such Code). \n \n “(3)   Solar property .— Any property described in clause (i) or (ii) of section 48(a)(3)(A) of such Code. \n \n “(4)   Qualified small wind energy property .— Any qualified small wind energy property (as defined in section 48(c)(4) of such Code). \n \n “(5)   Geothermal property .— Any property described in clause (iii) of section 48(a)(3)(A) of such Code. \n \n “(6)   Qualified microturbine property .— Any qualified microturbine property (as defined in section 48(c)(2) of such Code). \n \n “(7)   Combined heat and power system property .— Any combined heat and power system property (as defined in section 48(c)(3) of such Code). \n \n “(8)   Geothermal heat pump property .— Any property described in clause (vii) of section 48(a)(3)(A) of such Code. \n \n\n Such term shall not include any property unless depreciation (or amortization in lieu of depreciation) is allowable with respect to such property. \n \n “(e)   Credit Termination Date .— For purposes of this section, the term ‘credit termination date’ means— “(1)  in the case of any specified energy property which is part of a facility described in paragraph (1) of section 45(d) of the Internal Revenue Code of 1986,  January 1, 2013 , \n \n “(2)  in the case of any specified energy property which is part of a facility described in paragraph (2), (3), (4), (6), (7), (9), or (11) of section 45(d) of such Code,  January 1, 2014 , and \n \n “(3)  in the case of any specified energy property described in section 48 of such Code,  January 1, 2017 . \n \n\n In the case of any property which is described in paragraph (3) and also in another paragraph of this subsection, paragraph (3) shall apply with respect to such property. \n \n “(f)   Application of Certain Rules .— In making grants under this section, the Secretary of the Treasury shall apply rules similar to the rules of section 50 of the Internal Revenue Code of 1986 (other than subsection (d)(2) thereof). In applying such rules, if the property is disposed of, or otherwise ceases to be specified energy property, the Secretary of the Treasury shall provide for the recapture of the appropriate percentage of the grant amount in such manner as the Secretary of the Treasury determines appropriate. \n \n “(g)   Exception for Certain Non-Taxpayers .— The Secretary of the Treasury shall not make any grant under this section to— “(1)  any Federal, State, or local government (or any political subdivision, agency, or instrumentality thereof), \n \n “(2)  any organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, \n \n “(3)  any entity referred to in paragraph (4) of [former] section 54(j) of such Code, or \n \n “(4)  any partnership or other pass-thru entity any partner (or other holder of an equity or profits interest) of which is described in paragraph (1), (2) or (3). \n \n \n “(h)   Definitions .— Terms used in this section which are also used in section 45 or 48 of the Internal Revenue Code of 1986 shall have the same meaning for purposes of this section as when used in such section 45 or 48. Any reference in this section to the Secretary of the Treasury shall be treated as including the Secretary’s delegate. \n \n “(i)   Appropriations .— There is hereby appropriated to the Secretary of the Treasury such sums as may be necessary to carry out this section. \n \n “(j)   Termination .— The Secretary of the Treasury shall not make any grant to any person under this section unless the application of such person for such grant is received before  October 1, 2012 .”\n[ Pub. L. 112–81, div. A, title X, §\u202f1096(b) ,  Dec. 31, 2011 ,  125 Stat. 1608 , provided that:  “The amendment made by this section [amending  section 1603 of Pub. L. 111–5 , set out above] shall take effect as if included in section 1603 of the American Recovery and Reinvestment Tax Act of 2009 [ Pub. L. 111–5 ].” \n]\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFor applicability of amendment by  section 701(e)(4)(C) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(j)(3) ,  Oct. 22, 1986 ,  100 Stat. 2909 , provided that:  “If refund or credit of any overpayment of tax resulting from the application of this subsection [amending this section] is prevented at any time before the close of the date which is 1 year after the date of the enactment of this Act [ Oct. 22, 1986 ] by operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of the amendments made by this subsection [amending this section]) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.”\nFor provision that nothing in the amendments made by section 474( o ) of  Pub. L. 98–369 , which amended this section, be construed as reducing the investment tax credit in taxable years beginning before  Jan. 1, 1984 , see  section 475(c) of Pub. L. 98–369 , set out as a note under  section 46 of this title .\nPub. L. 94–455, title VIII, §\u202f804(c) ,  Oct. 4, 1976 ,  90 Stat. 1594 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule for determining useful life, predominant foreign use, etc .— In the case of a qualified film (within the meaning of section 48(k)(1)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) placed in service in a taxable year beginning before  January 1, 1975 , with respect to which neither an election under paragraph (2) of this subsection nor an election under subsection (e)(2) applies— “(A)  the applicable percentage under section 46(c)(2) of such Code shall be determined as if the useful life of the film would have expired at the close of the first taxable year by the close of which the aggregate amount allowable as a deduction under section 167 of such Code would equal or exceed 90 percent of the basis of such property (adjusted for any partial dispositions), \n \n “(B)  for purposes of section 46(c)(1) of such Code, the basis of the property shall be determined by taking into account the total production costs (within the meaning of section 48(k)(5)(B) of such Code), \n \n “(C)  for purposes of section 48(a)(2) of such Code, such film shall be considered to be used predominantly outside the United States in the first taxable year for which 50 percent or more of the gross revenues received or accrued during the taxable year from showing the film were received or accrued from showing the film outside the United States, and \n \n “(D)  Section 47(a)(7) of such Code shall apply. \n \n \n “(2)   Election of 40-percent method.— “(A)   In general .— A taxpayer may elect to have this paragraph apply to all qualified films placed in service during taxable years beginning before  January 1, 1975  (other than films to which an election under subsection (e)(2) of this section applies). \n \n “(B)   Effect of election .— If the taxpayer makes an election under this paragraph, then section 48(k) of the Internal Revenue Code of 1986 shall apply to all qualified films described in subparagraph (A) with the following modifications: “(i)  subparagraph (B) of paragraph (4) shall not apply, but in determining qualified investment under section 46(c)(1) of such Code there shall be used (in lieu of the basis of such property) an amount equal to 40 percent of the aggregate production costs (within the meaning of paragraph (5)(B) of such section 48(k)), \n \n “(ii)  paragraph (2) shall be applied by substituting ‘100 percent’ for ‘66⅔ percent’, and \n \n “(iii)  paragraph (3) and paragraph (5) (other than subparagraph (B)) shall not apply. \n \n \n “(C)   Rules relating to elections .— An election under this paragraph shall be made not later than the day which is 6 months after the date of the enactment of this Act [ Oct. 4, 1976 ] and shall be made in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. Such an election may be revoked only with the consent of the Secretary of the Treasury or his delegate. \n \n “(D)   The taxpayer must consent to join in certain proceedings .— No election may be made under this paragraph or subsection (e)(2) by any taxpayer unless he consents, under regulations prescribed by the Secretary of the Treasury or his delegate, to treat the determination of the investment credit allowable on each film subject to an election as a separate cause of action, and to join in any judicial proceeding for determining the person entitled to, and the amount of, the credit allowable under section 38 of the Internal Revenue Code of 1986 with respect to any film covered by such election. \n \n \n “(3)   Election to have credit determined in accordance with previous litigation.— “(A)   In general .— A taxpayer described in subparagraph (B) may elect to have this paragraph apply to all films (whether or not qualified) placed in service in taxable years beginning before  January 1, 1975 , and with respect to which an election under subsection (e)(2) is not made. \n \n “(B)   Who may elect .— A taxpayer may make an election under this paragraph if he has filed an action in any court of competent jurisdiction, before  January 1, 1976 , for a determination of such taxpayer’s rights to the allowance of a credit against tax under section 38 of the Internal Revenue Code of 1986 for any taxable year beginning before  January 1, 1975 , with respect to any film. \n \n “(C)   Effect of election .— If the taxpayer makes an election under this paragraph— “(i)  paragraphs (1) and (2) of this subsection, and subsection (d) shall not apply to any film placed in service by the taxpayer, and \n \n “(ii)  subsection 48(k) of the Internal Revenue Code of 1986 shall not apply to any film placed in service by the taxpayer in any taxable year beginning before  January 1, 1975 , and with respect to which an election under subsection (e)(2) is not made, \n \n\n \u2001\u2001and the right of the taxpayer to the allowance of a credit against tax under section 38 of such Code with respect to any film placed in service in any taxable year beginning before  January 1, 1975 , and as to which an election under subsection (e)(2) is not made, shall be determined as though this section (other than this paragraph) has not been enacted. \n \n “(D)   Rules relating to elections .— An election under this paragraph shall be made not later than the day which is 90 days after the date of the enactment of this Act [ Oct. 4, 1976 ], by filing a notification of such election with the national office of the Internal Revenue Service. Such an election, once made, shall be irrevocable.”\nPub. L. 94–455, title VIII, §\u202f804(d) ,  Oct. 4, 1976 ,  90 Stat. 1596 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Paragraph (1) of section 48(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to entitlement to credit) shall apply to any motion picture film or video tape placed in service in any taxable year beginning before  January 1, 1975 .”\nPub. L. 88–272, title II, §\u202f203(a)(2) ,  Feb. 26, 1964 ,  78 Stat. 33 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  The basis of any section 38 property (as defined in section 48(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) placed in service before  January 1, 1964 , shall be increased, under regulations prescribed by the Secretary of the Treasury or his delegate, by an amount equal to 7 percent of the qualified investment with respect to such property under section 46(c) of the Internal Revenue Code of 1986. If there has been any increase with respect to such property under section 48(g)(2) of such Code, the increase under the preceding sentence shall be appropriately reduced therefor. \n \n “(B)  If a lessor made the election provided by section 48(d) of the Internal Revenue Code of 1986 with respect to property placed in service before  January 1, 1964 — “(i)  subparagraph (A) shall not apply with respect to such property, but \n \n “(ii)  under regulations prescribed by the Secretary of the Treasury or his delegate, the deductions otherwise allowable under section 162 of such Code to the lessee for amounts paid to the lessor under the lease (or, if such lessee has purchased such property, the basis of such property) shall be adjusted in a manner consistent with subparagraph (A). \n \n \n “(C)  The adjustments under this paragraph shall be made as of the first day of the taxpayer’s first taxable year which begins after  December 31, 1963 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Rules similar to section 48(a)(4) (without regard to subparagraph (D) thereof) shall apply for purposes of this section.\nRules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.\nThe term “qualifying advanced coal project” means a project which meets the requirements of subsection (e).\nThe term “advanced coal-based generation technology” means a technology which meets the requirements of subsection (f).\nThe term “coal” means anthracite, bituminous coal, subbituminous coal, lignite, and peat.\nThe term “greenhouse gas capture capability” means an integrated gasification combined cycle technology facility capable of adding components which can capture, separate on a long-term basis, isolate, remove, and sequester greenhouse gases which result from the generation of electricity.\nThe term “electric generation unit” means any facility at least 50 percent of the total annual net output of which is electrical power, including an otherwise eligible facility which is used in an industrial application.\nThe term “integrated gasification combined cycle” means an electric generation unit which produces electricity by converting coal to synthesis gas which is used to fuel a combined-cycle plant which produces electricity from both a combustion turbine (including a combustion turbine/fuel cell hybrid) and a steam turbine.\nNot later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying advanced coal project program for the deployment of advanced coal-based generation technologies.\nAn application under subparagraph (A) shall contain such information as the Secretary may require in order to make a determination to accept or reject an application for certification as meeting the requirements under subsection (e)(1). Any information contained in the application shall be protected as provided in  section 552(b)(4) of title 5 , United States Code.\nThe Secretary shall issue a determination as to whether an applicant has met the requirements under subsection (e)(1) within 60 days following the date of submittal of the application for certification.\nEach applicant for certification shall have 2 years from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the criteria set forth in subsection (e)(2) have been met.\nAn applicant which receives a certification shall have 5 years from the date of issuance of the certification in order to place the project in service and if such project is not placed in service by that time period then the certification shall no longer be valid.\nThe aggregate credits allowed under subsection (a) for projects certified by the Secretary under paragraph (2) may not exceed $2,550,000,000.\nNot later than 6 years after the date of enactment of this section, the Secretary shall review the credits allocated under this section as of the date which is 6 years after the date of enactment of this section.\nIf the Secretary determines that credits under clause (i) or (ii) of paragraph (3)(B) are available for reallocation pursuant to the requirements set forth in paragraph (2), the Secretary is authorized to conduct an additional program for applications for certification.\nThe Secretary shall, upon making a certification under this subsection or section 48B(d), publicly disclose the identity of the applicant and the amount of the credit certified with respect to such applicant.\nThe Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain the separation and sequestration requirements of subsection (e)(1)(G).\nThe enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b)(3), is the date of enactment of title XI of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nThe date of enactment of this section, referred to in subsecs. (d)(1), (4)(A) and (f)(3), is the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2009—Subsec. (b)(2).  Pub. L. 111–5  inserted “(without regard to subparagraph (D) thereof)” after “section 48(a)(4)”.\n2008—Subsec. (a)(3).  Pub. L. 110–343, §\u202f111(a) , added par. (3).\nSubsec. (d)(2)(A).  Pub. L. 110–343, §\u202f111(c)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Each applicant for certification under this paragraph shall submit an application meeting the requirements of subparagraph (B). An applicant may only submit an application during the 3-year period beginning on the date the Secretary establishes the program under paragraph (1).”\nSubsec. (d)(3)(A).  Pub. L. 110–343, §\u202f111(b) , substituted “$2,550,000,000” for “$1,300,000,000”.\nSubsec. (d)(3)(B).  Pub. L. 110–343, §\u202f111(c)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Of the dollar amount in subparagraph (A), the Secretary is authorized to certify—\n“(i) $800,000,000 for integrated gasification combined cycle projects, and\n“(ii) $500,000,000 for projects which use other advanced coal-based generation technologies.”\nSubsec. (d)(5).  Pub. L. 110–343, §\u202f111(d) , added par. (5).\nSubsec. (e)(1)(G).  Pub. L. 110–343, §\u202f111(c)(3)(A) , added subpar. (G).\nSubsec. (e)(3).  Pub. L. 110–343, §\u202f111(c)(5) , substituted “certain” for “integrated gasification combined cycle” in heading.\nSubsec. (e)(3)(B)(iii), (iv).  Pub. L. 110–343, §\u202f111(c)(4) , added cl. (iii) and redesignated former cl. (iii) as (iv).\nSubsec. (e)(3)(C).  Pub. L. 110–343, §\u202f111(c)(3)(B) , added subpar. (C).\nSubsec. (h).  Pub. L. 110–246, §\u202f15346(a) , added subsec. (h).\nSubsec. (i).  Pub. L. 110–343, §\u202f111(c)(3)(C) , added subsec. (i).\n2007—Subsec. (d)(4)(B)(ii).  Pub. L. 110–172  struck out “subsection” before “paragraph” in two places.\n2006—Subsec. (f)(1).  Pub. L. 109–432  inserted concluding provisions.\nAmendment by  Pub. L. 111–5  applicable to periods after  Dec. 31, 2008 , under rules similar to the rules of  section 48(m) of this title  as in effect on the day before  Nov. 5, 1990 , see  section 1103(c)(1) of Pub. L. 111–5 , set out as a note under  section 25C of this title .\nPub. L. 110–343, div. B, title I, §\u202f111(e) ,  Oct. 3, 2008 ,  122 Stat. 3823 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to credits the application for which is submitted during the period described in section 48A(d)(2)(A)(ii) of the Internal Revenue Code of 1986 and which are allocated or reallocated after the date of the enactment of this Act [ Oct. 3, 2008 ]. \n \n “(2)   Disclosure of allocations .— The amendment made by subsection (d) [amending this section] shall apply to certifications made after the date of the enactment of this Act. \n \n “(3)   Clerical amendment .— The amendment made by subsection (c)(5) [amending this section] shall take effect as if included in the amendment made by section 1307(b) of the Energy Tax Incentives Act of 2005 [ Pub. L. 109–58 ].”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15346(b) ,  May 22, 2008 ,  122 Stat. 1523 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15346(b),  June 18, 2008 ,  122 Stat. 1664 , 2285, provided that:  “The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [ June 18, 2008 ] and is applicable to all competitive certification awards entered into under section 48A or 48B of the Internal Revenue Code of 1986, whether such awards were issued before, on, or after such date of enactment.”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 109–432, div. A, title II, §\u202f203(b) ,  Dec. 20, 2006 ,  120 Stat. 2945 , provided that:  “The amendment made by this section [amending this section] shall take apply [sic] with respect to applications for certification under section 48A(d)(2) of the Internal Revenue Code of 1986 submitted after  October 2, 2006 .”\nSection applicable to periods after  Aug. 8, 2005 , under rules similar to the rules of  section 48(m) of this title , as in effect on the day before  Nov. 5, 1990 , see  section 1307(d) of Pub. L. 109–58 , set out as an Effective Date of 2005 Amendment note under  section 46 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 46, the qualifying gasification project credit for any taxable year is an amount equal to 20 percent (30 percent in the case of credits allocated under subsection (d)(1)(B)) of the qualified investment for such taxable year.\nRules similar to section 48(a)(4) (without regard to subparagraph (D) thereof) shall apply for purposes of this section.\nRules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.\nThe term “gasification technology” means any process which converts a solid or liquid product from coal, petroleum residue, biomass, or other materials which are recovered for their energy or feedstock value into a synthesis gas composed primarily of carbon monoxide and hydrogen for direct use or subsequent chemical or physical conversion.\nThe term “eligible property” means any property which is a part of a qualifying gasification project and is necessary for the gasification technology of such project.\nThe term “biomass” does not include paper which is commonly recycled.\nThe term “carbon capture capability” means a gasification plant design which is determined by the Secretary to reflect reasonable consideration for, and be capable of, accommodating the equipment likely to be necessary to capture carbon dioxide from the gaseous stream, for later use or sequestration, which would otherwise be emitted in the flue gas from a project which uses a nonrenewable fuel.\nThe term “coal” means anthracite, bituminous coal, subbituminous coal, lignite, and peat.\nThe term “petroleum residue” means the carbonized product of high-boiling hydrocarbon fractions obtained in petroleum processing.\nA certificate of eligibility under paragraph (1) may be issued only during the 10-fiscal year period beginning on  October 1, 2005 .\nA credit shall not be allowed under this section for any qualified investment for which a credit is allowed under section 48A.\nThe Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain the separation and sequestration requirements for such project under subsection (d)(1).\nThe enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b)(3), is the date of enactment of title XI of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nThe date of the enactment of this section, referred to in subsec. (d)(1), is the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\n2009—Subsec. (b)(2).  Pub. L. 111–5  inserted “(without regard to subparagraph (D) thereof)” after “section 48(a)(4)”.\n2008—Subsec. (a).  Pub. L. 110–343, §\u202f112(a) , inserted “(30 percent in the case of credits allocated under subsection (d)(1)(B))” after “20 percent”.\nSubsec. (c)(7)(H).  Pub. L. 110–343, §\u202f112(e) , added subpar. (H).\nSubsec. (d)(1).  Pub. L. 110–343, §\u202f112(b) , substituted “shall not exceed—” for “shall not exceed $350,000,000 under rules similar to the rules of section 48A(d)(4).” and added subpars. (A) and (B).\nSubsec. (d)(4).  Pub. L. 110–343, §\u202f112(d) , added par. (4).\nSubsec. (f).  Pub. L. 110–343, §\u202f112(c) , added subsec. (f).\nAmendment by  Pub. L. 111–5  applicable to periods after  Dec. 31, 2008 , under rules similar to the rules of  section 48(m) of this title  as in effect on the day before  Nov. 5, 1990 , see  section 1103(c)(1) of Pub. L. 111–5 , set out as a note under  section 25C of this title .\nPub. L. 110–343, div. B, title I, §\u202f112(f) ,  Oct. 3, 2008 ,  122 Stat. 3824 , provided that:  “The amendments made by this section [amending this section] shall apply to credits described in section 48B(d)(1)(B) of the Internal Revenue Code of 1986 which are allocated or reallocated after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nSection applicable to periods after  Aug. 8, 2005 , under rules similar to the rules of  section 48(m) of this title , as in effect on the day before  Nov. 5, 1990 , see  section 1307(d) of Pub. L. 109–58 , set out as an Effective Date of 2005 Amendment note under  section 46 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 46, the qualifying advanced energy project credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year with respect to any qualifying advanced energy project of the taxpayer.\nFor purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying advanced energy project.\nRules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.\nThe amount which is treated as the qualified investment for all taxable years with respect to any qualifying advanced energy project shall not exceed the amount designated by the Secretary as eligible for the credit under this section.\nSuch term shall not include any portion of a project for the production of any property which is used in the refining or blending of any transportation fuel (other than renewable fuels).\nNot later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying advanced energy project program to consider and award certifications for qualified investments eligible for credits under this section to qualifying advanced energy project sponsors.\nThe total amount of credits that may be allocated under the program shall not exceed $2,300,000,000.\nEach applicant for certification under this paragraph shall submit an application containing such information as the Secretary may require during the 2-year period beginning on the date the Secretary establishes the program under paragraph (1).\nEach applicant for certification shall have 1 year from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the requirements of the certification have been met.\nAn applicant which receives a certification shall have 3 years from the date of issuance of the certification in order to place the project in service and if such project is not placed in service by that time period, then the certification shall no longer be valid.\nNot later than 4 years after the date of enactment of this section, the Secretary shall review the credits allocated under this section as of such date.\nIf the Secretary determines that credits under this section are available for reallocation pursuant to the requirements set forth in paragraph (2), the Secretary is authorized to conduct an additional program for applications for certification.\nThe Secretary shall, upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant.\nNot later than 180 days after the date of enactment of this subsection, the Secretary shall establish a program to consider and award certifications for qualified investments eligible for credits under this section to qualifying advanced energy project sponsors.\nEach applicant for certification under this subsection shall submit an application at such time and containing such information as the Secretary may require.\nEach applicant for certification shall have 2 years from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the requirements of the certification have been met.\nAn applicant which receives a certification shall have 2 years from the date of issuance of the certification in order to place the project in service and to notify the Secretary that such project has been so placed in service, and if such project is not placed in service by that time period, then the certification shall no longer be valid. If any certification is revoked under this subparagraph, the amount of the limitation under paragraph (2) shall be increased by the amount of the credit with respect to such revoked certification.\nIn the case of an applicant which receives a certification, if the Secretary determines that the project has been placed in service at a location which is materially different than the location specified in the application for such project, the certification shall no longer be valid.\nFor purposes of allocations under this subsection, the amount of the credit determined under subsection (a) shall be determined by substituting “6 percent” for “30 percent”.\nIn the case of any project which satisfies the requirements of paragraphs (5)(A) and (6), subparagraph (A) shall not apply.\nThe requirements described in this subparagraph with respect to a project are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the re-equipping, expansion, or establishment of a manufacturing facility shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such project is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nThe Secretary shall, upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant.\nA credit shall not be allowed under this section for any qualified investment for which a credit is allowed under section 48, 48A, 48B, 48E, 45Q, or 45V.\nSubsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990), referred to in subsec. (b)(2), means section 46(c)(4) and (d) as in effect before enactment of  Pub. L. 101–508 , which amended section 46 generally.\nThe date of enactment of this section, referred to in subsec. (d)(1)(A), (4)(A), is the date of enactment of  Pub. L. 111–5 , which was approved  Feb. 17, 2009 .\nThe date of enactment of this subsection, referred to in subsec. (e)(1), (2)(B), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\n2022—Subsec. (c)(1)(A).  Pub. L. 117–169, §\u202f13501(b)(1) , inserted “,\u2000any portion of the qualified investment of which is certified by the Secretary under subsection (e) as eligible for a credit under this section” after “means a project” in introductory provisions.\nSubsec. (c)(1)(A)(i).  Pub. L. 117–169, §\u202f13501(b)(2)(A) , substituted “an industrial or manufacturing facility for the production or recycling of” for “a manufacturing facility for the production of” in introductory provisions.\nSubsec. (c)(1)(A)(i)(I).  Pub. L. 117–169, §\u202f13501(b)(2)(B) , inserted “water,” after “sun,”.\nSubsec. (c)(1)(A)(i)(II).  Pub. L. 117–169, §\u202f13501(b)(2)(C) , substituted “energy storage systems and components” for “an energy storage system for use with electric or hybrid-electric motor vehicles”.\nSubsec. (c)(1)(A)(i)(III).  Pub. L. 117–169, §\u202f13501(b)(2)(D) , substituted “grid modernization equipment or components” for “grids to support the transmission of intermittent sources of renewable energy, including storage of such energy”.\nSubsec. (c)(1)(A)(i)(IV).  Pub. L. 117–169, §\u202f13501(b)(2)(E) , substituted “,\u2000remove, use, or sequester carbon oxide emissions” for “and sequester carbon dioxide emissions”.\nSubsec. (c)(1)(A)(i)(V).  Pub. L. 117–169, §\u202f13501(b)(2)(F) , added subcl. (V) and struck out former subcl. (V) which read as follows: “property designed to refine or blend renewable fuels or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies),”.\nSubsec. (c)(1)(A)(i)(VI) to (IX).  Pub. L. 117–169, §\u202f13501(b)(2)(G) –(J), added subcls. (VI) to (VIII), redesignated former subcl. (VII) as (IX), struck out “and” at end of subcl. (IX), and struck out former subcl. (VI) which read as follows: “new qualified plug-in electric drive motor vehicles (as defined by section 30D) or components which are designed specifically for use with such vehicles, including electric motors, generators, and power control units, or”.\nSubsec. (c)(1)(A)(ii), (iii).  Pub. L. 117–169, §\u202f13501(b)(3) , added cls. (ii) and (iii) and struck out former cl. (ii) which read as follows: “any portion of the qualified investment of which is certified by the Secretary under subsection (d) as eligible for a credit under this section.”\nSubsec. (c)(2)(A).  Pub. L. 117–169, §\u202f13501(c) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is necessary for the production of property described in paragraph (1)(A)(i),”.\nSubsec. (e).  Pub. L. 117–169, §\u202f13501(a) , added subsec. (e). Former subsec. (e) redesignated (f).\nSubsec. (f).  Pub. L. 117–169, §\u202f13501(a) , (d), redesignated subsec. (e) as (f) and substituted “48B, 48E, 45Q, or 45V” for “or 48B”.\n2014—Subsec. (b)(3).  Pub. L. 113–295, §\u202f209(g) , inserted “as the qualified investment” after “The amount which is treated”.\nSubsec. (c)(1)(A)(i)(VI).  Pub. L. 113–295, §\u202f221(a)(2)(C) , struck out “,\u2000qualified plug-in electric vehicles (as defined by section 30(d)),” before “or components”.\nPub. L. 117–169, title I, §\u202f13501(e) ,  Aug. 16, 2022 ,  136 Stat. 1971 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2023 .”\nAmendment by  section 209(g) of Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by  section 221(a)(2)(C) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nSection applicable to periods after  Feb. 17, 2009 , under rules similar to the rules of  section 48(m) of this title  as in effect on the day before  Nov. 5, 1990 , see  section 1302(d) of Pub. L. 111–5 , set out as an Effective Date of 2009 Amendment note under  section 46 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 46, the advanced manufacturing investment credit for any taxable year is an amount equal to 25 percent of the qualified investment for such taxable year with respect to any advanced manufacturing facility of an eligible taxpayer.\nFor purposes of subsection (a), the qualified investment with respect to any advanced manufacturing facility for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of an advanced manufacturing facility.\nThe term “qualified property” includes any building or its structural components which otherwise satisfy the requirements under subparagraph (A).\nClause (i) shall not apply with respect to a building or portion of a building used for offices, administrative services, or other functions unrelated to manufacturing.\nFor purposes of this section, the term “advanced manufacturing facility” means a facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment.\nThe qualified investment with respect to any advanced manufacturing facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).\nRules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a).\nExcept as otherwise provided in paragraph (2)(A), in the case of a taxpayer making an election (at such time and in such manner as the Secretary may provide) under this subsection with respect to the credit determined under subsection (a) with respect to such taxpayer, such taxpayer shall be treated as making a payment against the tax imposed by subtitle A (for the taxable year with respect to which such credit was determined) equal to the amount of such credit.\nIn the case of any property held directly by a partnership or S corporation, no election by any partner or shareholder shall be allowed under paragraph (1) with respect to any credit determined under subsection (a) with respect to such property.\nAny election under paragraph (1) shall be made not later than the due date (including extensions of time) for the return of tax for the taxable year for which the election is made, but in no event earlier than 270 days after the date of the enactment of this section. Any such election, once made, shall be irrevocable. Except as otherwise provided in this subparagraph, any election under paragraph (1) shall apply with respect to any credit for the taxable year for which the election is made.\nThe payment described in paragraph (1) shall be treated as made on the later of the due date (determined without regard to extensions) of the return of tax for the taxable year or the date on which such return is filed.\nFor purposes of  section 1324 of title 31 , United States Code, the payments under subparagraph (A)(i)(I) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.\nAs a condition of, and prior to, any amount being treated as a payment which is made by the taxpayer under paragraph (1) or any payment being made pursuant to subparagraph (A), the Secretary may require such information or registration as the Secretary deems necessary or appropriate for purposes of preventing duplication, fraud, improper payments, or excessive payments under this section.\nClause (i)(II) shall not apply if the taxpayer demonstrates to the satisfaction of the Secretary that the excessive payment resulted from reasonable cause.\nIn the case of a taxpayer making an election under this subsection with respect to the credit determined under subsection (a), such credit shall be reduced to zero and shall, for any other purposes under this title, be deemed to have been allowed to the taxpayer for such taxable year.\nIn the case of any possession of the United States with a mirror code tax system (as defined in section 24(k)), this subsection shall not be treated as part of the income tax laws of the United States for purposes of determining the income tax law of such possession unless such possession elects to have this subsection be so treated.\nThe credit allowed under this section shall not apply to property the construction of which begins after  December 31, 2026 .\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b)(5), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nSection 9901(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, referred to in subsec. (c)(1), means  section 9901(6) of Pub. L. 116–283 , but probably should be a reference to section 9901(8) of the Act, which defines “foreign entity of concern” and which is classified to  section 4651(8) of Title 15 , Commerce and Trade.\nThe date of the enactment of this section, referred to in subsec. (d)(2)(B), is the date of enactment of  Pub. L. 117–167 , which was approved Aug. 9. 2022.\nA prior section 48D, added  Pub. L. 111–148, title IX, §\u202f9023(a) ,  Mar. 23, 2010 ,  124 Stat. 877 , provided for a qualifying therapeutic discovery project credit, prior to repeal by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(3)(A) ,  Mar. 23, 2018 ,  132 Stat. 1209 .\nSection applicable to property placed in service after  Dec. 31, 2022 , and, for any property the construction of which begins prior to  Jan. 1, 2023 , only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after  Aug. 9, 2022 , see  section 107(f) of Pub. L. 117–167 , set out as an Effective Date of 2022 Amendment note under  section 905 of Title 2 , The Congress.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'In the case of any qualified facility which is not described in subclause (I) or (II) of clause (ii) and does not satisfy the requirements described in subclause (III) of such clause, the applicable percentage shall be 6 percent.\nIn the case of any energy storage technology which is not described in subclause (I) or (II) of clause (ii) and does not satisfy the requirements described in subclause (III) of such clause, the applicable percentage shall be 6 percent.\nIn the case of any qualified investment with respect to a qualified facility or with respect to energy storage technology which is placed in service within an energy community (as defined in section 45(b)(11)(B)), for purposes of applying paragraph (2) with respect to such property or investment, the applicable percentage shall be increased by the applicable credit rate increase.\nRules similar to the rules of section 48(a)(12) shall apply.\nRules similar to the rules of section 45Y(b)(1)(C) shall apply for purposes of this paragraph.\nRules similar to the rules of section 45Y(b)(2) shall apply for purposes of this paragraph.\nFor purposes of this paragraph, the term “qualified interconnection property” has the meaning given such term in section 48(a)(8)(B).\nThe qualified investment with respect to any qualified facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).\nFor purposes of this subsection, the terms “CO2e per KWh” and “greenhouse gas emissions rate” have the same meaning given such terms under section 45Y.\nFor purposes of subsection (a), the qualified investment with respect to energy storage technology for any taxable year is the basis of any energy storage technology placed in service by the taxpayer during such taxable year.\nFor purposes of this section, the term “energy storage technology” has the meaning given such term in section 48(c)(6) (except that subparagraph (D) of such section shall not apply).\nRules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a).\nRules similar to the rules of section 45(b)(3) shall apply.\nRules similar to the rules of section 48(a)(10) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nIn the case of a taxpayer making an election under section 6417 with respect to a credit under this section, rules similar to the rules of section 45Y(g)(12) shall apply.\nFor purposes of this subsection, the term “applicable year” has the same meaning given such term in section 45Y(d)(3).\nIn this section, the term “greenhouse gas” has the same meaning given such term under section 45Y(e)(2).\nFor purposes of section 50, if the Secretary determines that the greenhouse gas emissions rate for a qualified facility is greater than 10 grams of CO 2 e per KWh, any property for which a credit was allowed under this section with respect to such facility shall cease to be investment credit property in the taxable year in which the determination is made.\nFor purposes of subparagraphs (B) and (C), electricity acquired at a below-market rate shall not fail to be taken into account as a financial benefit.\nFor purposes of this subsection, the term “eligible property” means a qualified investment with respect to any applicable facility.\nNot later than  January 1, 2025 , the Secretary shall establish a program to allocate amounts of environmental justice capacity limitation to applicable facilities. In establishing such program and to carry out the purposes of this subsection, the Secretary shall provide procedures to allow for an efficient allocation process, including, when determined appropriate, consideration of multiple projects in a single application if such projects will be placed in service by a single taxpayer.\nThe amount of environmental justice capacity limitation allocated by the Secretary under subparagraph (A) during any calendar year shall not exceed the annual capacity limitation with respect to such year.\nFor purposes of this paragraph, the term “annual capacity limitation” means 1.8 gigawatts of direct current capacity for each calendar year during the period beginning on  January 1, 2025 , and ending on December 31 of the applicable year (as defined in section 45Y(d)(3)), and zero thereafter.\nIf the annual capacity limitation for any calendar year exceeds the aggregate amount allocated for such year under this paragraph, such limitation for the succeeding calendar year shall be increased by the amount of such excess. No amount may be carried under the preceding sentence to any calendar year after the third calendar year following the applicable year (as defined in section 45Y(d)(3)).\nIf the annual capacity limitation for calendar year 2024 under section 48(e)(4)(D) exceeds the aggregate amount allocated for such year under such section, such excess amount may be carried over and applied to the annual capacity limitation under this subsection for calendar year 2025. The annual capacity limitation for calendar year 2025 shall be increased by the amount of such excess.\nParagraph (1) shall not apply with respect to any property which is placed in service after the date that is 4 years after the date of the allocation with respect to the facility of which such property is a part.\nAny amount of environmental justice capacity limitation which expires under clause (i) during any calendar year shall be taken into account as an excess described in subparagraph (D)(i) (or as an increase in such excess) for such calendar year, subject to the limitation imposed by the last sentence of such subparagraph.\nThe Secretary shall, by regulations or other guidance, provide for recapturing the benefit of any increase in the credit allowed under subsection (a) by reason of this subsection with respect to any property which ceases to be property eligible for such increase (but which does not cease to be investment credit property within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under rules similar to the rules of section 50(a). To the extent provided by the Secretary, such recapture may not apply with respect to any property if, within 12 months after the date the taxpayer becomes aware (or reasonably should have become aware) of such property ceasing to be property eligible for such increase, the eligibility of such property for such increase is restored. The preceding sentence shall not apply more than once with respect to any facility.\nNot later than  January 1, 2025 , the Secretary shall issue guidance regarding implementation of this section.\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (d)(1), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nThe Housing Act of 1949, referred to in subsec. (h)(2)(B)(i), is  act July 15, 1949, ch. 338 ,  63 Stat. 413 . Title V of the Act is classified generally to subchapter III (§\u202f1471 et seq.) of chapter 8A of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 1441 of Title 42  and Tables.\nPub. L. 117–169, title I, §\u202f13702(c) ,  Aug. 16, 2022 ,  136 Stat. 1997 , provided that:  “The amendments made by this section [enacting this section and amending sections 46, 49, and 50 of this title] shall apply to property placed in service after  December 31, 2024 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The credit base of any property to which this paragraph applies shall be reduced by the nonqualified nonrecourse financing with respect to such credit base (as of the close of the taxable year in which placed in service).\nFor purposes of this paragraph and paragraph (2), the term “nonqualified nonrecourse financing” means any nonrecourse financing which is not qualified commercial financing.\nFor purposes of this subparagraph, the term “related person” has the meaning given such term by section 465(b)(3)(C). Except as otherwise provided in regulations prescribed by the Secretary, the determination of whether a person is a related person shall be made as of the close of the taxable year in which the property is placed in service.\nExcept as otherwise provided in this subparagraph, in the case of any partnership or S corporation, the determination of whether a partner’s or shareholder’s allocable share of any financing is nonqualified nonrecourse financing shall be made at the partner or shareholder level.\nThe determination of any partner’s or shareholder’s allocable share of any financing shall be made in the same manner as the credit allowable by section 38 with respect to such property.\nRules similar to the rules of subparagraph (F) of section 46(c)(8) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this paragraph.\nIf, at the close of a taxable year following the taxable year in which the property was placed in service, there is a net decrease in the amount of nonqualified nonrecourse financing with respect to such property, such net decrease shall be taken into account as an increase in the credit base for such property in accordance with subparagraph (C).\nFor purposes of this paragraph, nonqualified nonrecourse financing shall not be treated as decreased through the surrender or other use of property financed by nonqualified nonrecourse financing.\nFor purposes of determining the amount of credit allowable under section 38 and the amount of credit subject to the early disposition or cessation rules under section 50(a), any increase in a taxpayer’s credit base for any property by reason of this paragraph shall be taken into account as if it were property placed in service by the taxpayer in the taxable year in which the property referred to in subparagraph (A) was first placed in service.\nAny credit allowable under this subpart for any increase in qualified investment by reason of this paragraph shall be treated as earned during the taxable year of the decrease in the amount of nonqualified nonrecourse financing.\nIf, as of the close of the taxable year, there is a net increase with respect to the taxpayer in the amount of nonqualified nonrecourse financing (within the meaning of subsection (a)(1)) with respect to any property to which subsection (a)(1) applied, then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in credits allowed under section 38 for all prior taxable years which would have resulted from reducing the credit base (as defined in subsection (a)(1)(C)) taken into account with respect to such property by the amount of such net increase. For purposes of determining the amount of credit subject to the early disposition or cessation rules of section 50(a), the net increase in the amount of the nonqualified nonrecourse financing with respect to the property shall be treated as reducing the property’s credit base in the year in which the property was first placed in service.\nFor purposes of paragraph (1), the amount of nonqualified nonrecourse financing (within the meaning of subsection (a)(1)(D)) with respect to the taxpayer shall not be treated as increased by reason of a transfer of (or agreement to transfer) any evidence of any indebtedness if such transfer occurs (or such agreement is entered into) more than 1 year after the date such indebtedness was incurred.\nRules similar to the rules of section 47(d)(3) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this subsection.\nAny increase in tax under paragraph (1) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit allowable under this chapter.\nPub. L. 117–169, title I, §\u202f13702(b)(2) , (c),  Aug. 16, 2022 ,  136 Stat. 1997 , provided that, applicable to property placed in service after  Dec. 31, 2024 , subsection (a)(1)(C) of this section is amended:\n(1) by striking “and” at the end of clause (v),\n(2) by striking the period at the end of clause (vi) and inserting a comma, and\n(3) by adding at the end the following new clauses:\n(vii) the basis of any qualified property which is part of a qualified facility under section 48E, and\n(viii) the basis of any energy storage technology under section 48E.\nSee 2022 Amendment note below.\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsecs. (a)(1)(F) and (b)(3), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nA prior section 49,  Pub. L. 91–172, title VII, §\u202f703(a) ,  Dec. 30, 1969 ,  83 Stat. 660 ;  Pub. L. 92–178, title I, §\u202f101(b)(1) –(4),  Dec. 10, 1971 ,  85 Stat. 498 , 499, related to termination of rules for computing credit for investment in certain depreciable property for period beginning  Apr. 19, 1969 , and ending during 1971, prior to repeal by  Pub. L. 95–600, title III, §\u202f312(c)(1) ,  Nov. 6, 1978 ,  92 Stat. 2826 , applicable to taxable years ending after  Dec. 31, 1978 .\n2022—Subsec. (a)(1)(C)(vi).  Pub. L. 117–167  added cl. (vi).\nSubsec. (a)(1)(C)(vii), (viii).  Pub. L. 117–169  added cls. (vii) and (viii).\n2018—Subsec. (a)(1)(C)(vi).  Pub. L. 115–141, §\u202f401(d)(3)(B)(i) , struck out cl. (vi) which read as follows: “the basis of any property to which paragraph (1) of section 48D(e) applies which is part of a qualifying therapeutic discovery project under such section 48D.”\nSubsec. (a)(1)(D)(iii).  Pub. L. 115–141, §\u202f401(a)(24) , substituted “shareholder” for “share-holder” in concluding provisions.\n2010—Subsec. (a)(1)(C)(vi).  Pub. L. 111–148  added cl. (vi).\n2009—Subsec. (a)(1)(C)(v).  Pub. L. 111–5  added cl. (v).\n2005—Subsec. (a)(1)(C)(iii), (iv).  Pub. L. 109–58  added cls. (iii) and (iv) and struck out former cl. (iii) which read as follows: “the amortizable basis of any qualified timber property.”\n1998—Subsec. (b)(4).  Pub. L. 105–206  substituted “this chapter” for “subpart A, B, D, or G”.\n1990— Pub. L. 101–508, §\u202f11813(a) , amended section generally, substituting section catchline for one which read: “Termination of regular percentage” and in text substituting present provisions for provisions relating to the nonapplicability of the regular percentage to any property placed in service after  Dec. 31, 1985 , for purposes of determining the investment tax credit, exceptions to such rule, the 35 percent reduction in credit for taxable years after 1986, the full basis adjustment in determining investment tax credit, and the definition of transition property and treatment of progress expenditures.\n1988—Subsec. (c)(4)(B).  Pub. L. 100–647, §\u202f1002(e)(2) , substituted “years” for “year” in heading and amended text generally. Prior to amendment, text read as follows: “The amount of the reduction of the regular investment credit under paragraph (3)—\n“(i) may not be carried back to any taxable year, but\n“(ii) shall be added to the carryforwards from the taxable year before applying paragraph (2).”\nSubsec. (c)(5)(B)(i).  Pub. L. 100–647, §\u202f1002(e)(3) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “The term ‘regular investment credit’ has the meaning given such term by section 48( o )”.\nSubsec. (c)(5)(C).  Pub. L. 100–647, §\u202f1002(e)(8)(B) , struck out subpar. (C) which related to portion of credits attributable to regular investment credit.\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f1002(e)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of periods after  December 31, 1985 , section 48(q) (relating to basis adjustment to section 38 property) shall be applied with respect to transaction property—\n“(A) by substituting ‘100 percent’ for ‘50 percent’ in paragraph (1), and\n“(B) without regard to paragraph (4) thereof (relating to election of reduced credit in lieu of basis adjustment).”\nAmendment by  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2024 , see  section 13702(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 48E of this title .\nAmendment by  Pub. L. 117–167  applicable to property placed in service after  Dec. 31, 2022 , and, for any property the construction of which begins prior to  Jan. 1, 2023 , only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after  Aug. 9, 2022 , see  section 107(f) of Pub. L. 117–167 , set out as a note under  section 905 of Title 2 , The Congress.\nAmendment by  Pub. L. 111–148  applicable to amounts paid or incurred after  Dec. 31, 2008 , in taxable years beginning after such date, see  section 9023(f) of Pub. L. 111–148 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 111–5  applicable to periods after  Feb. 17, 2009 , under rules similar to the rules of  section 48(m) of this title  as in effect on the day before  Nov. 5, 1990 , see  section 1302(d) of Pub. L. 111–5 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 109–58  applicable to periods after  Aug. 8, 2005 , under rules similar to the rules of  section 48(m) of this title , as in effect on the day before  Nov. 5, 1990 , see  section 1307(d) of Pub. L. 109–58 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by section 1002(e)(1)–(3) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1002(e)(8)(B) of Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 1002(e)(8)(C) of Pub. L. 100–647 , set out as a note under  section 38 of this title .\nPub. L. 99–514, title II, §\u202f211(e) ,  Oct. 22, 1986 ,  100 Stat. 2169 , as amended by  Pub. L. 100–647, title I, §\u202f1002(e)(4) –(7),  Nov. 10, 1988 ,  102 Stat. 3367 , 3368, provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [enacting this section and provisions set out below] shall apply to property placed in service after  December 31, 1985 , in taxable years ending after such date. Section 49(c) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply to taxable years ending after  June 30, 1987 , and to amounts carried to such taxable years. \n \n “(2)   Exceptions for certain films .— For purposes of determining whether any property is transition property within the meaning of section 49(e) of the Internal Revenue Code of 1986— “(A)  in the case of any motion picture or television film, construction shall be treated as including production for purposes of section 203(b)(1) of this Act [enacting provisions set out as a note under  section 168 of this title ], and written contemporary evidence of an agreement (in accordance with industry practice) shall be treated as a written binding contract for such purposes, \n \n “(B)  in the case of any television film, a license agreement or agreement for production services between a television network and a producer shall be treated as a binding contract for purposes of section 203(b)(1)(A) of this Act, and \n \n “(C)  a motion picture film shall be treated as described in section 203(b)(1)(A) of this Act if— “(i)  funds were raised pursuant to a public offering before  September 26, 1985 , for the production of such film, \n \n “(ii)  40 percent of the funds raised pursuant to such public offering are being spent on films the production of which commenced before such date, and \n \n “(iii)  all of the films funded by such public offering are required to be distributed pursuant to distribution agreements entered into before  September 26, 1985 . \n \n \n \n “(3)   Normalization rules .— The provisions of subsection (b) [see Normalization Rules note below] shall apply to any violation of the normalization requirements under paragraph (1) or (2) of section 46(f) of the Internal Revenue Code of 1986 occurring in taxable years ending after  December 31, 1985 . \n \n “(4)   Additional exceptions.— “(A)  Subsections (c) and (d) of section 49 of the Internal Revenue Code of 1986 shall not apply to any continuous caster facility for slabs and blooms which is subject to a lease and which is part of a project the second phase of which is a continuous slab caster which was placed in service before  December 31, 1985 . \n \n “(B)  For purposes of determining whether an automobile manufacturing facility (including equipment and incidental appurtenances) is transition property within the meaning of section 49(e), property with respect to which the Board of Directors of an automobile manufacturer formally approved the plan for the project on  January 7, 1985  shall be treated as transition property and subsections (c) and (d) of section 49 of such Code shall not apply to such property, but only with respect to $70,000,000 of regular investment tax credits. \n \n “(C)  Any solid waste disposal facility which will process and incinerate solid waste of one or more public or private entities including Dakota County, Minnesota, and with respect to which a bond carryforward from 1985 was elected in an amount equal to $12,500,000 shall be treated as transition property within the meaning of section 49(e) of the Internal Revenue Code of 1986. \n \n “(D)  For purposes of section 49 of such Code, the following property shall be treated as transition property: “(i)  2 catamarans built by a shipbuilder incorporated in the State of Washington in 1964, the contracts for which were signed on  April 22, 1986  and  November 12, 1985 , and 1 barge built by such shipbuilder the contract for which was signed on  August 7, 1985 . \n \n “(ii)  2 large passenger ocean-going United States flag cruise ships with a passenger rated capacity of up to 250 which are built by the shipbuilder described in clause (i), which are the first such ships built in the United States since 1952, and which were designed at the request of a Pacific Coast cruise line pursuant to a contract entered into in October 1985. This clause shall apply only to that portion of the cost of each ship which does not exceed $40,000,000. \n \n “(iii)  Property placed in service during 1986 by Satellite Industries, Inc., with headquarters in Minneapolis, Minnesota, to the extent that the cost of such property does not exceed $1,950,000. \n \n \n “(E)  Subsections (c) and (d) of section 49 of such Code shall not apply to property described in section 204(a)(4) of this Act [enacting provisions set out as a note under  section 168 of this title ].”\nPub. L. 115–141, div. U, title IV, §\u202f401(d)(3)(C) ,  Mar. 23, 2018 ,  132 Stat. 1209 , provided that:  “In the case of the repeal of section 48D(e)(1) of the Internal Revenue Code of 1986, the amendments made by this paragraph [amending this section and sections 50 and 280C of this title and repealing former  section 48D of this title ] shall not apply to expenditures made in taxable years beginning before  January 1, 2011 .”\nFor provisions that nothing in amendment by  section 401(d)(3)(B)(i) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 99–514, title II, §\u202f211(b) ,  Oct. 22, 1986 ,  100 Stat. 2168 , provided that:  \n “If, for any taxable year beginning after  December 31, 1985 , the requirements of paragraph (1) or (2) of section 46(f) of the Internal Revenue Code of 1986 are not met with respect to public utility property to which the regular percentage applied for purposes of determining the amount of the investment tax credit— “(1)  all credits for open taxable years as of the time of the final determination referred to in section 46(f)(4)(A) of such Code shall be recaptured, and \n \n “(2)  if the amount of the taxpayer’s unamortized credits (or the credits not previously restored to rate base) with respect to such property (whether or not for open years) exceeds the amount referred to in paragraph (1), the taxpayer’s tax for the taxable year shall be increased by the amount of such excess. \n \n\n If any portion of the excess described in paragraph (2) is attributable to a credit which is allowable as a carryover to a taxable year beginning after  December 31, 1985 , in lieu of applying paragraph (2) with respect to such portion, the amount of such carryover shall be reduced by the amount of such portion. Rules similar to the rules of this subsection shall apply in the case of any property with respect to which the requirements of section 46(f)(9) of such Code are met.”\nPub. L. 99–514, title II, §\u202f211(d) ,  Oct. 22, 1986 ,  100 Stat. 2168 , provided that: \n “(1)  The amendments made by subsection (a) [enacting this section and provisions set out above] shall not apply to property originally placed in service after  December 29, 1982 , and before  August 1, 1985 , by a corporation incorporated in Alaska on  May 21, 1953 , and used by it— “(A)  in part, for the transportation of mail for the United States Postal Service in the State of Alaska, and \n \n “(B)  in part, to provide air service in the State of Alaska on routes which had previously been served by an air carrier that received compensation from the Civil Aeronautics Board for providing service. \n \n \n “(2)  In the case of property described in subparagraph (A)— “(A)  such property shall be treated as recovery property described in section 208(d)(5) of the Tax Equity and Fiscal Responsibility Act of 1982 (‘TEFRA’) [ section 208(d)(5) of Pub. L. 97–248 , enacting provisions set out as a note under  section 168 of this title ]; \n \n “(B)  ‘48 months’ shall be substituted for ‘3 months’ each place it appears in applying— “(i)  section 48(b)(2)(B) of the Code [ 26 U.S.C. 48(b)(2)(B) ], and \n \n “(ii)  section 168(f)(8)(D) of the Code [ 26 U.S.C. 168(f)(8)(D) ] (as in effect after the amendments made by the Technical Corrections Act of 1982 [ Pub. L. 97–448 ] but before the amendments made by TEFRA); and \n \n \n “(C)  the limitation of section 168(f)(8)(D)(ii)(III) (as then in effect) shall be read by substituting ‘the lessee’s original cost basis.’, for ‘the adjusted basis of the lessee at the time of the lease.’ \n \n \n “(3)  The aggregate amount of property to which this paragraph shall apply shall not exceed $60,000,000.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'If, during any taxable year, investment credit property is disposed of, or otherwise ceases to be investment credit property with respect to the taxpayer, before the close of the recapture period, then the tax under this chapter for such taxable year shall be increased by the recapture percentage of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under this subpart with respect to such property.\nFor purposes of subparagraph (A), the recapture percentage shall be determined in accordance with the following table: \n \n \n \n \n \n \n If the property ceases to be \u2001investment credit property within— The recapture percentage is: \n \n \n (i) One full year after placed in service 100\u2001\u2001\u2001 \n (ii) One full year after the close of the period described in clause (i) 80\u2001\u2001\u2001 \n (iii) One full year after the close of the period described in clause (ii) 60\u2001\u2001\u2001 \n (iv) One full year after the close of the period described in clause (iii) 40\u2001\u2001\u2001 \n (v) One full year after the close of the period described in clause (iv) 20\nIf during any taxable year any building to which section 47(d) applied ceases (by reason of sale or other disposition, cancellation or abandonment of contract, or otherwise) to be, with respect to the taxpayer, property which, when placed in service, will be a qualified rehabilitated building, then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero the credit determined under this subpart with respect to such building.\nAny amount which would have been applied as a reduction under paragraph (2) of section 47(b) but for the fact that a reduction under such paragraph cannot reduce the amount taken into account under section 47(b)(1) below zero shall be treated as an amount required to be recaptured under subparagraph (A) for the taxable year during which the building is placed in service.\nUnder regulations prescribed by the Secretary, a sale by, and leaseback to, a taxpayer who, when the property is placed in service, will be a lessee to whom the rules referred to in subsection (d)(5) apply shall not be treated as a cessation described in subparagraph (A) to the extent that the amount which will be passed through to the lessee under such rules with respect to such property is not less than the qualified rehabilitation expenditures properly taken into account by the lessee under section 47(d) with respect to such property.\nIf, after property is placed in service, there is a disposition or other cessation described in paragraph (1), then paragraph (1) shall be applied as if any credit which was allowable by reason of section 47(d) and which has not been required to be recaptured before such disposition, cessation, or change in use were allowable for the taxable year the property was placed in service.\nRules similar to the rules of this paragraph shall apply in cases where qualified progress expenditures were taken into account under the rules referred to in section 48(b), 48A(b)(3), 48B(b)(3), 48C(b)(2), or 48D(b)(5).\nIf there is a an applicable transaction by an applicable taxpayer before the close of the 10-year period beginning on the date such taxpayer placed in service investment credit property which is eligible for the advanced manufacturing investment credit under section 48D(a), then the tax under this chapter for the taxable year in which such transaction occurs shall be increased by 100 percent of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under section 46 which is attributable to the advanced manufacturing investment credit under section 48D(a) with respect to such property.\nSubparagraph (A) shall not apply if the applicable taxpayer demonstrates to the satisfaction of the Secretary that the applicable transaction has been ceased or abandoned within 45 days of a determination and notice by the Secretary.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of this paragraph, including regulations or other guidance which provide for requirements for recordkeeping or information reporting for purposes of administering the requirements of this paragraph.\nIn the case of any cessation described in paragraph (1) or (2), or any applicable transaction to which paragraph (3)(A) applies, the carrybacks and carryovers under section 39 shall be adjusted by reason of such cessation or applicable transaction.\nFor purposes of this subsection, the term “investment credit property” means any property eligible for a credit determined under this subpart.\nAny increase in tax under paragraph (1), (2), or (3) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit allowable under this chapter.\nThe term “applicable transaction” means, with respect to any applicable taxpayer, any significant transaction (as determined by the Secretary, in coordination with the Secretary of Commerce and the Secretary of Defense) involving the material expansion of semiconductor manufacturing capacity of such applicable taxpayer in the People’s Republic of China or a foreign country of concern (as defined in section 9901(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021).\nSuch term shall not include a transaction which primarily involves the expansion of manufacturing capacity for legacy semiconductors (as defined in section 9902(a)(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021).\nFor purposes of this subsection, the term “applicable taxpayer” means any taxpayer who has been allowed a credit under section 48D(a) for any prior taxable year.\nExcept as provided in subparagraph (B), no credit shall be determined under this subpart with respect to any property which is used predominantly outside the United States.\nSubparagraph (A) shall not apply to any property described in section 168(g)(4).\nNo credit shall be determined under this subpart with respect to any property used by an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter unless such property is used predominantly in an unrelated trade or business the income of which is subject to tax under section 511. If the property is debt-financed property (as defined in section 514(b)), the amount taken into account for purposes of determining the amount of the credit under this subpart with respect to such property shall be that percentage of the amount (which but for this paragraph would be so taken into account) which is the same percentage as is used under section 514(a), for the year the property is placed in service, in computing the amount of gross income to be taken into account during such taxable year with respect to such property. If any qualified rehabilitated building is used by the tax-exempt organization pursuant to a lease, this paragraph shall not apply for purposes of determining the amount of the rehabilitation credit.\nThis paragraph and paragraph (3) shall not apply to any property by reason of use under a lease with a term of less than 6 months (determined under section 168(i)(3)).\nIf any qualified rehabilitated building is leased to a governmental unit (or a foreign person or entity) this paragraph shall not apply for purposes of determining the rehabilitation credit with respect to such building.\nFor purposes of this paragraph and paragraph (3), rules similar to the rules of paragraphs (5) and (6) of section 168(h) shall apply.\nFor special rules for the application of this paragraph and paragraph (3), see section 168(h).\nFor purposes of this subtitle, if a credit is determined under this subpart with respect to any property, the basis of such property shall be reduced by the amount of the credit so determined.\nIf during any taxable year there is a recapture amount determined with respect to any property the basis of which was reduced under paragraph (1), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term “recapture amount” means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (a).\nFor purposes of sections 1245 and 1250, any reduction under this subsection shall be treated as a deduction allowed for depreciation.\nFor purposes of section 1250(b), the determination of what would have been the depreciation adjustments under the straight line method shall be made as if there had been no reduction under this section.\nPub. L. 117–169, title I, §\u202f13702(b)(3) , (4), (c),  Aug. 16, 2022 ,  136 Stat. 1997 , provided that, applicable to property placed in service after  Dec. 31, 2024 , this section is amended:\n(1) in subsection (a)(2)(E), by striking “or 48D(b)(5)” and inserting “48D(b)(5), or 48E(e)”; and\n(2) in subsection (c)(3), by inserting “or clean electricity investment credit” after “In the case of any energy credit”.\nSee 2022 Amendment notes below.\nSection 9901(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, referred to in subsec. (a)(6)(D)(i), is  section 9901(7) of Pub. L. 116–283 , which is classified to  section 4651(7) of Title 15 , Commerce and Trade.\nSection 9902(a)(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, referred to in subsec. (a)(6)(D)(ii), is  section 9902(a)(6) of Pub. L. 116–283 , which is classified to  section 4652(a)(6) of Title 15 , Commerce and Trade.\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (d), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nA prior section 50,  Pub. L. 92–178, title I, §\u202f101(a) ,  Dec. 10, 1971 ,  85 Stat. 498 , related to restoration of credit for investment in certain depreciable property, prior to repeal by  Pub. L. 95–600, title III, §\u202f312(c)(1) ,  Nov. 6, 1978 ,  92 Stat. 2826 , applicable to taxable years ending after  Dec. 31, 1978 .\n2022—Subsec. (a)(2)(E).  Pub. L. 117–169, §\u202f13702(b)(3) , substituted “48D(b)(5), or 48E(e)” for “or 48D(b)(5)”.\nPub. L. 117–167, §\u202f107(d)(3) , substituted “48C(b)(2), or 48D(b)(5)” for “or 48C(b)(2)”.\nSubsec. (a)(3).  Pub. L. 117–167, §\u202f107(b)(1) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (a)(4).  Pub. L. 117–167, §\u202f107(b)(3)(A)(ii) , inserted “or applicable transaction” before period at end.\nPub. L. 117–167, §\u202f107(b)(3)(A)(i) , which directed the insertion of “,\u2000or any applicable transaction to which paragraph (3)(A) applies” after “paragraphs (1) and (2)”, was executed by making the insertion after “paragraph (1) or (2)” to reflect the probable intent of Congress.\nPub. L. 117–167, §\u202f107(b)(1) , redesignated par. (3) as (4). Former par. (4) redesignated (5).\nSubsec. (a)(5), (6).  Pub. L. 117–167, §\u202f107(b)(1) , redesignated pars. (4) and (5) as (5) and (6), respectively.\nSubsec. (a)(6)(C).  Pub. L. 117–167, §\u202f107(b)(3)(B) , substituted “paragraph (1), (2), or (3)” for “paragraph (1) or (2)”.\nSubsec. (a)(6)(D), (E).  Pub. L. 117–167, §\u202f107(b)(2) , added subpars. (D) and (E).\nSubsec. (c)(3).  Pub. L. 117–169, §\u202f13702(b)(4) , inserted “or clean electricity investment credit” after “In the case of any energy credit” in introductory provisions.\nSubsec. (c)(3)(C).  Pub. L. 117–169, §\u202f13102(i) , added subpar. (C).\nSubsec. (d).  Pub. L. 117–169, §\u202f13801(c) , inserted “In the case of a real estate investment trust making an election under section 6418, paragraphs (1)(B) and (2)(B) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any investment credit property of such real estate investment trust to which such election applies.” at end of concluding provisions.\nSubsec. (d)(2).  Pub. L. 117–169, §\u202f13102(f)(5) , inserted “At the election of a taxpayer, this paragraph shall not apply to any energy storage technology (as defined in section 48(c)(6)), provided—” after “companies).” and added subpars. (A) to (C).\n2018—Subsec. (a)(2)(E).  Pub. L. 115–141, §\u202f401(d)(3)(B)(ii) , substituted “or 48C(b)(2)” for “48C(b)(2), or 48D(b)(4)”.\nSubsec. (b)(2)(A).  Pub. L. 115–141, §\u202f401(a)(25) , substituted semicolon for period at end.\n2014—Subsec. (a)(2)(E).  Pub. L. 113–295  inserted “,\u200048A(b)(3), 48B(b)(3), 48C(b)(2), or 48D(b)(4)” after “in section 48(b)”.\n2005—Subsec. (a)(2)(E).  Pub. L. 109–135  substituted “section 48(b)” for “section 48(a)(5)”.\n2004—Subsec. (c)(3).  Pub. L. 108–357  struck out “or reforestation credit” after “energy credit” in introductory provisions.\n1998—Subsec. (a)(5)(C).  Pub. L. 105–206  substituted “this chapter” for “subpart A, B, D, or G”.\n1996—Subsec. (a)(2)(C).  Pub. L. 104–188, §\u202f1704(t)(29) , substituted “subsection (d)(5)” for “subsection (c)(4)”.\nSubsec. (a)(2)(E).  Pub. L. 104–188, §\u202f1702(h)(11) , substituted “48(a)(5)” for “48(a)(5)(A)”.\nSubsec. (d).  Pub. L. 104–188, §\u202f1616(b)(1) , inserted closing provisions.\nAmendment by section 13102(f)(5), (i) of  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2022 , see  section 13102(q)(2) of Pub. L. 117–169 , set out in a note under  section 45 of this title .\nAmendment by section 13702(b)(3), (4) of  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2024 , see  section 13702(c) of Pub. L. 117–169 , set out as an Effective Date note under  section 48E of this title .\nAmendment by  section 13801(c) of Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 13801(g) of Pub. L. 117–169 , set out as an Effective Date note under  section 6417 of this title .\nAmendment by  Pub. L. 117–167  applicable to property placed in service after  Dec. 31, 2022 , and, for any property the construction of which begins prior to  Jan. 1, 2023 , only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after  Aug. 9, 2022 , see  section 107(f) of Pub. L. 117–167 , set out as a note under  section 905 of Title 2 , The Congress.\nAmendment by  Pub. L. 108–357  applicable with respect to expenditures paid or incurred after  Oct. 22, 2004 , see  section 322(e) of Pub. L. 108–357 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 1616(b)(1) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  section 1702(h)(11) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nSection applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as an Effective Date of 1990 Amendment note under  section 45K of this title .\nFor provisions that amendment made by  section 401(d)(3)(B)(ii) of Pub. L. 115–141  not apply to expenditures made in taxable years beginning before  Jan. 1, 2011 , in the case of the repeal of  section 48D(e)(1) of this title , see  section 401(d)(3)(C) of Pub. L. 115–141 , set out as a note under  section 49 of this title .\nFor provisions that nothing in amendment by  section 401(d)(3)(B)(ii) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in this section be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section 50A, added  Pub. L. 92–178, title VI, §\u202f601(b) ,  Dec. 10, 1971 ,  85 Stat. 554 ; amended  Pub. L. 93–406, title II , §§\u202f2001(g)(2)(B), 2002(g)(2), 2005(c)(4),  Sept. 2, 1974 ,  88 Stat. 957 , 968, 991;  Pub. L. 94–12, title IV, §\u202f401(a)(1) , (2),  Mar. 29, 1975 ,  89 Stat. 45 ;  Pub. L. 94–401, §\u202f4(a) ,  Sept. 7, 1976 ,  90 Stat. 1217 ;  Pub. L. 94–455, title V, §\u202f503(b)(4) , title XIX, §§\u202f1901(a)(6), (b)(1)(D), 1906(b)(13)(A), title XXI, §\u202f2107(a)(1)–(3), (b), (c),  Oct. 4, 1976 ,  90 Stat. 1562 , 1765, 1790, 1834, 1903, 1904;  Pub. L. 95–600, title III, §\u202f322(a) –(c),  Nov. 6, 1978 ,  92 Stat. 2836 , 2837;  Pub. L. 96–178, §\u202f6(c)(1) ,  Jan. 2, 1980 ,  93 Stat. 1298 ;  Pub. L. 96–222, title I, §\u202f103(a)(7)(D)(i) ,  Apr. 1, 1980 ,  94 Stat. 211 ;  Pub. L. 97–34, title II, §\u202f207(c)(1) ,  Aug. 13, 1981 ,  95 Stat. 225 ;  Pub. L. 97–248, title I, §\u202f265(b)(2)(A)(ii) ,  Sept. 3, 1982 ,  96 Stat. 547 ;  Pub. L. 97–354, §\u202f5(a)(9) ,  Oct. 19, 1982 ,  96 Stat. 1693 , provided for a credit for expenses of work incentive programs, for the determination of the amount of that credit, and for the carryover and carryback of unused credit.\nSection 50B, added  Pub. L. 92–178, title VI, §\u202f601(b) ,  Dec. 10, 1971 ,  85 Stat. 556 ; amended  Pub. L. 94–12, title III, §\u202f302(c)(4) , title IV, §\u202f401(a)(3)–(5),  Mar. 29, 1975 ,  89 Stat. 44 , 46;  Pub. L. 94–401, §\u202f4(b) ,  Sept. 7, 1976 ,  90 Stat. 1218 ;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) , title XXI, §\u202f2107(a)(4), (d)–(f),  Oct. 4, 1976 ,  90 Stat. 1834 , 1903, 1904;  Pub. L. 95–171, §\u202f1(e) ,  Nov. 12, 1977 ,  91 Stat. 1353 ;  Pub. L. 95–600, title III, §\u202f322(d) ,  Nov. 6, 1978 ,  92 Stat. 2837 ;  Pub. L. 96–178 , §§\u202f3(a)(1), (3), 6(c)(2), (3),  Jan. 2, 1980 ,  93 Stat. 1295 , 1298;  Pub. L. 96–222, title I, §\u202f103(a)(5) , (7)(C), (D)(ii), (iii),  Apr. 1, 1980 ,  94 Stat. 209 , 211;  Pub. L. 96–272, title II, §\u202f208(b)(1) , (2),  June 17, 1980 ,  94 Stat. 526 , 527;  Pub. L. 97–34, title II, §\u202f261(b)(2)(B)(i) ,  Aug. 13, 1981 ,  95 Stat. 261 ;  Pub. L. 97–354, §\u202f5(a)(10) ,  Oct. 19, 1982 ,  96 Stat. 1693 ;  Pub. L. 101–239, title VII, §\u202f7644 ,  Dec. 19, 1989 ,  103 Stat. 2381 , provided for the definition of terms related to the expenses of work incentive programs, limitations on such expenses, and special rules to be applied in connection with the computation of the credit.\nSubsequent to repeal,  Pub. L. 101–239, title VII, §\u202f7644(a) ,  Dec. 19, 1989 ,  103 Stat. 2381 , provided that:\n“(a)  In General .—So much of subparagraph (A) of section 50B(h)(1) of the Internal Revenue Code of 1954 (as in effect for taxable years beginning before  January 1, 1982 ) as precedes clause (i) thereof is amended to read as follows:\n“\u202f‘(A) who has been certified (or for whom a written request for certification has been made) on or before the day the individual began work for the taxpayer by the Secretary of Labor or by the appropriate agency of State or local government as—’.\n“(b)  Effective Date .—The amendment made by subsection (a) shall apply for purposes of credits first claimed after  March 11, 1987 .”\nRepeal applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 21 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'For purposes of section 38, the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year.\nThe term “qualified wages” means the wages paid or incurred by the employer during the taxable year to individuals who are members of a targeted group.\nThe term “qualified first-year wages” means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer.\nThe amount of the qualified first-year wages which may be taken into account with respect to any individual shall not exceed $6,000 per year ($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and $24,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II)).\nExcept as otherwise provided in this subsection and subsection (h)(2), the term “wages” has the meaning given to such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section).\nThe term “wages” shall not include any amounts paid or incurred by an employer for any period to any individual for whom the employer receives federally funded payments for on-the-job training of such individual for such period.\nThe amount of wages which would (but for this subparagraph) be qualified wages under this section for an employer with respect to an individual for a taxable year shall be reduced by an amount equal to the amount of the payments made to such employer (however utilized by such employer) with respect to such individual for such taxable year under a program established under section 482(e)\u202f 1 1 \u202fSee References in Text note below.  of the Social Security Act.\nThe term “wages” shall not include any amount paid or incurred to an individual who begins work for the employer after  December 31, 2025 .\nThe term “wages” shall not include any amount paid or incurred to a qualified individual (as defined in section 3111(d)(3))\u202f 1  during the 1-year period beginning on the hiring date of such individual by a qualified employer (as defined in section 3111(d))\u202f 1  unless such qualified employer makes an election not to have section 3111(d)\u202f 1  apply.\nThe term “qualified IV–A recipient” means any individual who is certified by the designated local agency as being a member of a family receiving assistance under a IV–A program for any 9 months during the 18-month period ending on the hiring date.\nFor purposes of this paragraph, the term “IV–A program” means any program providing assistance under a State program funded under part A of title IV of the Social Security Act and any successor of such program.\nFor purposes of subparagraph (A), the terms “compensation” and “service-connected” have the meanings given such terms under  section 101 of title 38 , United States Code.\nIn the case of a designated community resident, the term “qualified wages” shall not include wages paid or incurred for services performed while the individual’s principal place of abode is outside an empowerment zone, enterprise community, renewal community, or rural renewal county.\nParagraph (5)(B) shall apply for purposes of subparagraph (A)(iv).\nNotwithstanding any other provision of law, the Secretary of the Treasury and the Secretary of Agriculture shall enter into an agreement to provide information to designated local agencies with respect to participation in the supplemental nutrition assistance program.\nThe term “qualified SSI recipient” means any individual who is certified by the designated local agency as receiving supplemental security income benefits under title XVI of the Social Security Act (including supplemental security income benefits of the type described in section 1616 of such Act or  section 212 of Public Law 93–66 ) for any month ending within the 60-day period ending on the hiring date.\nThe term “hiring date” means the day the individual is hired by the employer.\nThe term “designated local agency” means a State employment security agency established in accordance with the Act of  June 6, 1933 , as amended ( 29 U.S.C. 49–49n ).\nIf a designated local agency denies a request for certification of membership in a targeted group, such agency shall provide to the person making such request a written explanation of the reasons for such denial.\nThe Secretary may provide alternative methods for certification of a veteran as a qualified veteran described in clause (ii)(II), (iii), or (iv) of paragraph (3)(A), at the Secretary’s discretion.\nAny unemployed veteran or disconnected youth who begins work for the employer during 2009 or 2010 shall be treated as a member of a targeted group for purposes of this subpart.\nFor purposes of this subpart, remuneration paid by an employer to an employee during any taxable year shall be taken into account only if more than one-half of the remuneration so paid is for services performed in a trade or business of the employer.\nAny determination as to whether paragraph (1), or subparagraph (A) or (B) of subsection (h)(1), applies with respect to any employee for any taxable year shall be made without regard to subsections (a) and (b) of section 52.\nThe United States Employment Service, in consultation with the Internal Revenue Service, shall take such steps as may be necessary or appropriate to keep employers apprised of the availability of the work opportunity credit determined under this subpart.\nIf the services performed by any employee for an employer during more than one-half of any pay period (within the meaning of section 3306(d)) taken into account with respect to any year constitute agricultural labor (within the meaning of section 3306(k)), the term “unemployment insurance wages” means, with respect to the remuneration paid by the employer to such employee for such year, an amount equal to so much of such remuneration as constitutes “wages” within the meaning of section 3121(a), except that the contribution and benefit base for each calendar year shall be deemed to be $6,000.\nIf more than one-half of remuneration paid by an employer to an employee during any year is remuneration for service described in section 3306(c)(9), the term “unemployment insurance wages” means, with respect to such employee for such year, an amount equal to so much of the remuneration paid to such employee during such year which would be subject to contributions under section 8(a) of the Railroad Unemployment Insurance Act ( 45 U.S.C. 358(a) ) if the maximum amount subject to such contributions were $500 per month.\nIn any case to which subparagraph (A) or (B) of paragraph (1) applies, the term “wages” means unemployment insurance wages (determined without regard to any dollar limitation).\nNo wages shall be taken into account under subsection (a) with respect to any individual if, prior to the hiring date of such individual, such individual had been employed by the employer at any time.\nIn the case of an individual who has performed at least 120 hours, but less than 400 hours, of service for the employer, subsection (a) shall be applied by substituting “25 percent” for “40 percent”.\nNo wages shall be taken into account under subsection (a) with respect to any individual unless such individual has performed at least 120 hours of service for the employer.\nA taxpayer may elect to have this section not apply for any taxable year.\nAn election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).\nAn election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe.\nUnder regulations prescribed by the Secretary, in the case of a successor employer referred to in section 3306(b)(1), the determination of the amount of the credit under this section with respect to wages paid by such successor employer shall be made in the same manner as if such wages were paid by the predecessor employer referred to in such section.\nNo credit shall be determined under this section with respect to remuneration paid by an employer to an employee for services performed by such employee for another person unless the amount reasonably expected to be received by the employer for such services from such other person exceeds the remuneration paid by the employer to such employee for such services.\nThe Social Security Act, referred to in subsecs. (c)(2)(B) and (d)(2)(B), (6)(B)(iii), (9), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Part A of title IV of the Act is classified generally to part A (§\u202f601 et seq.) of subchapter IV of chapter 7 of Title 42, The Public Health and Welfare. Title XVI of the Act is classified generally to subchapter XVI (§\u202f1381 et seq.) of chapter 7 of Title 42. Section 482 of the Act, which was classified to  section 682 of Title 42 , was repealed by  Pub. L. 104–193, title I, §\u202f108(e) ,  Aug. 22, 1996 ,  110 Stat. 2167 . Sections 1148(g) and 1616 of the Act are classified to sections 1320b–19(g) and 1382e, respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 3111(d), referred to in subsec. (c)(5), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(b)(34) ,  Mar. 23, 2018 ,  132 Stat. 1204 .\nThe Food and Nutrition Act of 2008, referred to in subsec. (d)(3)(A)(i), (8)(A)(ii), is  Pub. L. 88–525 ,  Aug. 31, 1964 ,  78 Stat. 703 , which is classified generally to chapter 51 (§\u202f2011 et seq.) of Title 7, Agriculture. Section 6( o ) of the Act is classified to section 2015( o ) of Title 7. For complete classification of this Act to the Code, see Short Title note set out under  section 2011 of Title 7  and Tables.\nThe Rehabilitation Act of 1973, referred to in subsec. (d)(6)(B)(i), is  Pub. L. 93–112 ,  Sept. 26, 1973 ,  87 Stat. 355 , which is classified generally to chapter 16 (§\u202f701 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 701 of Title 29  and Tables.\nSection 212 of Public Law 93–66 , referred to in subsec. (d)(9), is set out as a note under  section 1382 of Title 42 , The Public Health and Welfare.\nAct of  June 6, 1933 , referred to in subsec. (d)(12), is  act June 6, 1933, ch. 49 ,  48 Stat. 113 , as amended, popularly known as the Wagner-Peyser Act, which is classified generally to chapter 4B (§\u202f49 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 49 of Title 29  and Tables.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nA prior section 51, added  Pub. L. 90–364, title I, §\u202f102(a) ,  June 28, 1968 ,  82 Stat. 252 ; amended  Pub. L. 91–53, §\u202f5(a) ,  Aug. 7, 1969 ,  83 Stat. 93 ;  Pub. L. 91–172, title III, §\u202f301(b)(5) , title VII, §\u202f701(a),  Dec. 30, 1969 ,  83 Stat. 585 , 657, related to the imposition of a tax surcharge, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1901(a)(7) ,  Oct. 4, 1976 ,  90 Stat. 1765 .\n2020—Subsec. (c)(4).  Pub. L. 116–260  substituted “ December 31, 2025 ” for “ December 31, 2020 ”.\n2019—Subsec. (c)(4).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2019 ”.\n2018—Subsec. (c)(4).  Pub. L. 115–141, §\u202f401(a)(26) , inserted period at end.\nSubsec. (d)(3)(A)(ii)(II).  Pub. L. 115–141, §\u202f401(a)(27) , inserted comma at end.\nSubsec. (d)(8).  Pub. L. 115–141, §\u202f401(a)(28) , substituted “supplemental nutrition assistance program benefits recipient” for “food stamp recipient” in heading.\nSubsec. (i)(1)(A).  Pub. L. 115–141, §\u202f401(a)(29) , substituted “entity” for “entity,”.\n2015—Subsec. (c)(4).  Pub. L. 114–113, §\u202f142(a) , substituted “ December 31, 2019 ” for “ December 31, 2014 ”.\nSubsec. (d)(1)(J).  Pub. L. 114–113, §\u202f142(b)(1) , added subpar. (J).\nSubsec. (d)(15).  Pub. L. 114–113, §\u202f142(b)(2) , added par. (15).\n2014—Subsec. (c)(4).  Pub. L. 113–295  substituted “for the employer after  December 31, 2014 ” for “for the employer—\n“(A) after  December 31, 1994 , and before  October 1, 1996 , or\n“(B) after  December 31, 2013 ”.\n2013—Subsec. (c)(4)(B).  Pub. L. 112–240  substituted “after  December 31, 2013 ” for “after—\n“(i)  December 31, 2012 , in the case of a qualified veteran, and\n“(ii)  December 31, 2011 , in the case of any other individual.”\n2011—Subsec. (b)(3).  Pub. L. 112–56, §\u202f261(a) , substituted “($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and $24,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II))” for “($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii))”.\nSubsec. (c)(4)(B).  Pub. L. 112–56, §\u202f261(d) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “after  December 31, 2011 .”\nSubsec. (d)(3)(A)(iii), (iv).  Pub. L. 112–56, §\u202f261(b) , added cls. (iii) and (iv).\nSubsec. (d)(13)(D).  Pub. L. 112–56, §\u202f261(c) , added subpar. (D).\n2010—Subsec. (c)(4)(B).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ August 31, 2011 ”.\nSubsec. (c)(5).  Pub. L. 111–147  added par. (5).\n2009—Subsec. (d)(14).  Pub. L. 111–5  added par. (14).\n2008—Subsec. (d)(1)(G).  Pub. L. 110–246, §\u202f4002(b)(1)(D) , (2)(O), substituted “supplemental nutrition assistance program benefits” for “food stamp”.\nSubsec. (d)(3)(A)(i).  Pub. L. 110–246, §\u202f4002(b)(1)(A) , (B), (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977” and “supplemental nutrition assistance program” for “food stamp program”.\nSubsec. (d)(8)(A).  Pub. L. 110–246, §\u202f4002(b)(1)(D) , (2)(O), substituted “supplemental nutrition assistance program benefits” for “food stamp” in introductory provisions.\nSubsec. (d)(8)(A)(ii)(I).  Pub. L. 110–246, §\u202f4002(b)(1)(A) , (B), (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977” and “supplemental nutrition assistance program” for “food stamp program”.\nSubsec. (d)(8)(A)(ii)(II).  Pub. L. 110–246, §\u202f4002(b)(1)(B) , (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977”.\nSubsec. (d)(8)(B).  Pub. L. 110–246, §\u202f4002(b)(1)(A) , (2)(O), substituted “supplemental nutrition assistance program” for “food stamp program”.\n2007—Subsec. (b)(3).  Pub. L. 110–28, §\u202f8211(d)(2) , substituted “Limitation on” for “Only first $6,000 of” in heading and inserted “($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii))” before period at end.\nSubsec. (c)(4)(B).  Pub. L. 110–28, §\u202f8211(a) , substituted “ August 31, 2011 ” for “ December 31, 2007 ”.\nSubsec. (d)(1)(D).  Pub. L. 110–28, §\u202f8211(b)(2) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “a high-risk youth,”.\nSubsec. (d)(3)(A).  Pub. L. 110–28, §\u202f8211(d)(1)(A) , substituted “agency as—” and cls. (i) and (ii) for “agency as being a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending during the 12-month period ending on the hiring date.”\nSubsec. (d)(3)(C).  Pub. L. 110–28, §\u202f8211(d)(1)(B) , added subpar. (C).\nSubsec. (d)(5).  Pub. L. 110–28, §\u202f8211(b)(1) , amended heading and text of par. (5) generally. Prior to amendment, text read as follows:\n“(A)  In general .—The term ‘high-risk youth’ means any individual who is certified by the designated local agency—\n“(i) as having attained age 18 but not age 25 on the hiring date, and\n“(ii) as having his principal place of abode within an empowerment zone, enterprise community, or renewal community.\n“(B)  Youth must continue to reside in zone or community .—In the case of a high-risk youth, the term ‘qualified wages’ shall not include wages paid or incurred for services performed while such youth’s principal place of abode is outside an empowerment zone, enterprise community, or renewal community.”\nSubsec. (d)(6)(B)(iii).  Pub. L. 110–28, §\u202f8211(c) , added cl. (iii).\n2006—Subsec. (c)(4)(B).  Pub. L. 109–432, §\u202f105(a) , substituted “2007” for “2005”.\nSubsec. (d)(1)(I).  Pub. L. 109–432, §\u202f105(e)(1) , added subpar. (I).\nSubsec. (d)(4).  Pub. L. 109–432, §\u202f105(b) , inserted “and” at end of subpar. (A), substituted a period for “,\u2000and” at end of subpar. (B), and struck out subpar. (C) and concluding provisions which read as follows:\n“(C) as being a member of a family which had an income during the 6 months immediately preceding the earlier of the month in which such income determination occurs or the month in which the hiring date occurs, which, on an annual basis, would be 70 percent or less of the Bureau of Labor Statistics lower living standard.\nAny determination under subparagraph (C) shall be valid for the 45-day period beginning on the date such determination is made.”\nSubsec. (d)(8)(A)(i).  Pub. L. 109–432, §\u202f105(c) , substituted “40” for “25”.\nSubsec. (d)(10) to (12).  Pub. L. 109–432, §\u202f105(e)(2) , added par. (10) and redesignated former pars. (10) and (11) as (11) and (12), respectively. Former par. (12) redesignated (13).\nSubsec. (d)(12)(A)(ii)(II).  Pub. L. 109–432, §\u202f105(d) , substituted “28th day” for “21st day”.\nSubsec. (d)(13).  Pub. L. 109–432, §\u202f105(e)(2) , redesignated par. (12) as (13).\nSubsec. (e).  Pub. L. 109–432, §\u202f105(e)(3) , added subsec. (e).\n2004—Subsec. (c)(4)(B).  Pub. L. 108–311, §\u202f303(a)(1) , substituted “2005” for “2003”.\nSubsec. (i)(1)(A), (B).  Pub. L. 108–311, §\u202f207(5)(A) , substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.\nSubsec. (i)(1)(C).  Pub. L. 108–311, §\u202f207(5)(B) , substituted “152(d)(2)(H)” for “152(a)(9)”.\n2002—Subsec. (c)(4)(B).  Pub. L. 107–147  substituted “2003” for “2001”.\n2000—Subsec. (d)(2)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f316(a)] , substituted “program funded” for “plan approved” and struck out “(relating to assistance for needy families with minor children)” after “Social Security Act”.\nSubsec. (d)(5)(A)(ii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f102(a)] , substituted “empowerment zone, enterprise community, or renewal community” for “empowerment zone or enterprise community”.\nSubsec. (d)(5)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f102(a), (c)] , inserted “or community” after “zone” in heading and substituted “empowerment zone, enterprise community, or renewal community” for “empowerment zone or enterprise community” in text.\nSubsec. (d)(7)(A)(iv).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f102(b)] , substituted “empowerment zone, enterprise community, or renewal community” for “empowerment zone or enterprise community”.\nSubsec. (d)(7)(C).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f102(c)] , inserted “or community” after “zone” in heading.\n1999—Subsec. (c)(4)(B).  Pub. L. 106–170, §\u202f505(a) , substituted “ December 31, 2001 ” for “ June 30, 1999 ”.\nSubsec. (i)(2).  Pub. L. 106–170, §\u202f505(b) , struck out “during which he was not a member of a targeted group” before period at end.\n1998—Subsec. (c)(4)(B).  Pub. L. 105–277, §\u202f1002(a) , substituted “ June 30, 1999 ” for “ June 30, 1998 ”.\nSubsec. (d)(6)(B)(i).  Pub. L. 105–277, §\u202f4006(c)(1) , substituted “plan for employment” for “rehabilitation plan”.\n1997—Subsec. (a).  Pub. L. 105–34, §\u202f603(d)(1) , substituted “40 percent” for “35 percent”.\nSubsec. (c)(4)(B).  Pub. L. 105–34, §\u202f603(a) , substituted “ June 30, 1998 ” for “ September 30, 1997 ”.\nSubsec. (d)(1)(H).  Pub. L. 105–34, §\u202f603(c)(1) , added subpar. (H).\nSubsec. (d)(2)(A).  Pub. L. 105–34, §\u202f603(b)(1) , substituted “for any 9 months during the 18-month period ending on the hiring date” for “for at least a 9-month period ending during the 9-month period ending on the hiring date”.\nSubsec. (d)(3)(A).  Pub. L. 105–34, §\u202f603(b)(2) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘qualified veteran’ means any veteran who is certified by the designated local agency as being—\n“(i) a member of a family receiving assistance under a IV–A program (as defined in paragraph (2)(B)) for at least a 9-month period ending during the 12-month period ending on the hiring date, or\n“(ii) a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending during the 12-month period ending on the hiring date.”\nSubsec. (d)(9).  Pub. L. 105–34, §\u202f603(c)(2) , added par. (9). Former par. (9) redesignated (10).\nPub. L. 105–33  repealed  Pub. L. 104–193, §\u202f110 ( l )(1). See 1996 Amendment note below.\nSubsec. (d)(10) to (12).  Pub. L. 105–34, §\u202f603(c)(2) , redesignated pars. (9) to (11) as (10) to (12), respectively.\nSubsec. (i)(3).  Pub. L. 105–34, §\u202f603(d)(2) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “No wages shall be taken into account under subsection (a) with respect to any individual unless such individual either—\n“(A) is employed by the employer at least 180 days (20 days in the case of a qualified summer youth employee), or\n“(B) has completed at least 400 hours (120 hours in the case of a qualified summer youth employee) of services performed for the employer.”\n1996—Subsec. (a).  Pub. L. 104–188, §\u202f1201(a) , (e)(1), substituted “work opportunity credit” for “targeted jobs credit” and “35 percent” for “40 percent”.\nSubsec. (c)(1).  Pub. L. 104–188, §\u202f1201(f) , struck out “,\u2000subsection (d)(8)(D),” after “this subsection”.\nSubsec. (c)(4).  Pub. L. 104–188, §\u202f1201(d) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “ Termination .—The term ‘wages’ shall not include any amount paid or incurred to an individual who begins work for the employer after  December 31, 1994 .”\nSubsec. (d).  Pub. L. 104–188, §\u202f1201(b) , reenacted heading without change and amended text generally, revising and restating as pars. (1) to (11) provisions formerly contained in pars. (1) to (16).\nSubsec. (d)(9).  Pub. L. 104–193, §\u202f110 ( l )(1), which directed amendment of par. (9) by striking all that follows “agency as” and inserting “being eligible for financial assistance under part A of title IV of the Social Security Act and as having continually received such financial assistance during the 90-day period which immediately precedes the date on which such individual is hired by the employer.”, was repealed by  Pub. L. 105–33 .\nSubsec. (g).  Pub. L. 104–188, §\u202f1201(e)(1) , substituted “work opportunity credit” for “targeted jobs credit”.\nSubsec. (i)(3).  Pub. L. 104–188, §\u202f1201(c) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “ Individuals not meeting minimum employment period .—No wages shall be taken into account under subsection (a) with respect to any individual unless such individual either—\n“(A) is employed by the employer at least 90 days (14 days in the case of an individual described in subsection (d)(12)), or\n“(B) has completed at least 120 hours (20 hours in the case of an individual described in subsection (d)(12)) of services performed for the employer.”\nSubsec. (j).  Pub. L. 104–188, §\u202f1201(e)(5) , substituted “Work opportunity credit” for “Targeted jobs credit” in heading.\n1993—Subsec. (c)(4).  Pub. L. 103–66, §\u202f13102(a) , substituted “ December 31, 1994 ” for “ June 30, 1992 ”.\nSubsec. (i)(1)(A).  Pub. L. 103–66, §\u202f13302(d) , inserted “,\u2000or, if the taxpayer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than 50 percent of the capital and profits interests in the entity,” after “of the corporation”.\n1991—Subsec. (c)(4).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990—Subsec. (c)(4).  Pub. L. 101–508  substituted “ December 31, 1991 ” for “ September 30, 1990 ”.\n1989—Subsec. (c)(4).  Pub. L. 101–239, §\u202f7103(a) , substituted “ September 30, 1990 ” for “ December 31, 1989 ”.\nSubsec. (d)(16)(C).  Pub. L. 101–239, §\u202f7103(c)(1) , added subpar. (C).\n1988—Subsec. (c)(2)(B).  Pub. L. 100–485  substituted “section 482(e)” for “section 414”.\nSubsec. (c)(4).  Pub. L. 100–647, §\u202f4010(a) , substituted “1989” for “1988”.\nSubsec. (d)(3)(B).  Pub. L. 100–647, §\u202f4010(c)(1) , substituted “age 23” for “age 25”.\nSubsec. (d)(12)(B).  Pub. L. 100–647, §\u202f4010(d)(1) , redesignated former cls. (ii) and (iii) as (i) and (ii), respectively, and struck out former cl. (i) which provided that subsection (a) shall be applied by substituting “85 percent” for “40 percent”.\nPub. L. 100–647, §\u202f1017(a) , substituted “subsection (a)” for “subsection (a)(1)” in cl. (i).\n1987—Subsec. (c)(3), (4).  Pub. L. 100–203  added par. (3) and redesignated former par. (3) as (4).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1701(b)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of section 38, the amount of the targeted jobs credit determined under this section for the taxable year shall be the sum of—\n“(1) 50 percent of the qualified first-year wages for such year, and\n“(2) 25 percent of the qualified second-year wages for such year.”\nSubsec. (b)(3), (4).  Pub. L. 99–514, §\u202f1701(b)(2)(A) , redesignated par. (4) as (3) and struck out “,\u2000and the amount of the qualified second-year wages,” after “first-year wages” and struck out par. (3) which defined “qualified second-year wages”.\nSubsec. (c)(3).  Pub. L. 99–514, §\u202f1701(a) , substituted “ December 31, 1988 ” for “ December 31, 1985 ”.\nSubsec. (d)(12)(B).  Pub. L. 99–514, §\u202f1701(b)(2)(B) , in cl. (i), substituted “40 percent” for “50 percent”, struck out cl. (ii) which directed that subsecs. (a)(2) and (b)(3) were not to apply, redesignated cl. (iii) as cl. (ii), redesignated cl. (iv) as cl. (iii), and in cl. (iii) as so redesignated substituted “subsection (b)(3)” for “subsection (b)(4)”.\nSubsec. (i)(3).  Pub. L. 99–514, §\u202f1701(c) , added par. (3).\nSubsec. (k).  Pub. L. 99–514, §\u202f1878(f)(1) , redesignated subsec. (j) added by  section 1041(c)(1) of Pub. L. 98–369  and relating to treatment of successor employers, and employees performing services for other persons, as subsec. (k).\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f474(p)(1) , substituted “For purposes of section 38, the amount of the targeted jobs credit determined under this section” for “The amount of the credit allowable by section 44B” in introductory provisions.\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f1041(c)(4) , struck out “(or, in the case of a vocational rehabilitation referral, the day the individual begins work for the employer on or after the beginning of such individual’s rehabilitation plan)” after “begins work for the employer”.\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f2638(b) , designated existing provisions as subpar. (A), inserted par. (2) heading, and added subpar. (B).\nSubsec. (c)(3).  Pub. L. 98–369, §\u202f1041(a) , substituted “ December 31, 1985 ” for “ December 31, 1984 ”.\nSubsec. (d)(6)(B)(ii).  Pub. L. 98–369, §\u202f2663(j)(5)(A) , substituted “Secretary of Health and Human Services” for “Secretary of Health Education and Welfare”.\nSubsec. (d)(11).  Pub. L. 98–369, §\u202f712(n) , made determination respecting membership of a qualified summer youth employee or youth participating in a qualified cooperative education program with respect to an employer applicable for purposes of determining whether such individual is a member of another targeted group with respect to such employer.\nSubsec. (d)(12)(A)(ii).  Pub. L. 98–369, §\u202f1041(c)(3) , substituted “(or if later, on May 1 of the calendar year involved)” for “(as defined in paragraph (14))”.\nSubsec. (d)(16)(A).  Pub. L. 98–369, §\u202f1041(c)(2) , inserted “For purposes of the preceding sentence, if on or before the day on which such individual begins work for the employer, such individual has received from a designated local agency (or other agency or organization designated pursuant to a written agreement with such designated local agency) a written preliminary determination that such individual is a member of a targeted group, then ‘the fifth day’ shall be substituted for ‘the day’ in such sentence.”\nSubsec. (g).  Pub. L. 98–369, §\u202f474(p)(2) , substituted “the targeted jobs credit determined under this subpart” for “the credit provided by section 44B”.\nSubsec. (j).  Pub. L. 98–369, §\u202f1041(c)(1) , added subsec. (j) relating to treatment of successor employers, and employees performing services for other persons.\nPub. L. 98–369, §\u202f474(p)(3) , added subsec. (j) relating to election to have targeted jobs credit not apply.\n1983—Subsec. (d)(8)(D).  Pub. L. 97–448, §\u202f102 ( l )(1), substituted “clauses (i), (ii), and (iii) of subparagraph (A)” for “subparagraph (A)”.\nSubsec. (d)(9)(B).  Pub. L. 97–448, §\u202f102 ( l )(3), substituted “section 432(b)(1) or 445” for “section 432(b)(1)”.\nSubsec. (d)(11).  Pub. L. 97–448, §\u202f102 ( l )(4), substituted “the earlier of the month in which such determination occurs or the month in which the hiring date occurs” for “the month in which such determination occurs”.\n1982—Subsec. (c)(3).  Pub. L. 97–248, §\u202f233(a) , substituted “1984” for “1982”.\nSubsec. (d)(1)(J).  Pub. L. 97–248, §\u202f233(b)(3) , added subpar. (J).\nSubsec. (d)(6)(B)(i)(II).  Pub. L. 97–248, §\u202f233(d) , substituted “consists of money payments or voucher or scrip, and” for “consists of money payments”.\nSubsec. (d)(10).  Pub. L. 97–248, §\u202f233(c) , inserted provision respecting nonapplicability of paragraph to individuals who begin work for the employer after  December 31, 1982 .\nSubsec. (d)(12) to (15).  Pub. L. 97–248, §\u202f233(b)(4) , (5), added par. (12) and redesignated former pars. (12) to (15) as (13) to (16), respectively.\nSubsec. (d)(16).  Pub. L. 97–248, §\u202f233(b)(4) , redesignated former par. (15) as (16).\nPub. L. 97–248, §\u202f233(f) , substituted “on or before” for “before” in subpar. (A).\n1981—Subsec. (c)(3), (4).  Pub. L. 97–34, §\u202f261(b)(2)(B)(ii) , redesignated par. (4) as (3). Former par. (3), which excluded from term “wages” any amount paid or incurred by the employer to an individual with respect to whom the employer claims credit under  section 40 of this title , was struck out.\nPub. L. 97–34, §\u202f261(a) , extended termination date to  Dec. 31, 1982 , from  Dec. 31, 1981 , and inserted “to an individual who begins work for the employer” after “paid or incurred”.\nSubsec. (d)(1)(H), (I).  Pub. L. 97–34, §\u202f261(b)(1) , added subpars. (H) and (I).\nSubsec. (d)(3)(A)(ii).  Pub. L. 97–34, §\u202f261(b)(2)(B)(iii) , substituted “paragraph (11)” for “paragraph (9)”.\nSubsec. (d)(4).  Pub. L. 97–34, §\u202f261(b)(2)(B)(iii) , (3), in subpar. (B) inserted “and” after “States,” in subpar. (C) substituted “paragraph (11)” for “paragraph (9)”, and struck out “(D) not having attained the age of 35 on the hiring date.”\nSubsec. (d)(7)(B).  Pub. L. 97–34, §\u202f261(b)(2)(B)(iii) , substituted “paragraph (11)” for “paragraph (9)”.\nSubsec. (d)(8)(A)(iv). Pub L. 97–34, §\u202f261(b)(4), added cl. (iv).\nSubsec. (d)(9), (10).  Pub. L. 97–34, §\u202f261(b)(2)(A) , added pars. (9) and (10) and redesignated former pars. (9) and (10) as (11) and (12), respectively.\nSubsec. (d)(11).  Pub. L. 97–34, §\u202f261(b)(2)(A) , (c)(2), redesignated former par. (9) as (11), substituted “70 percent or less” for “less than 70 percent”, and provided for validity of any determination for 45-day period beginning on the date the determination is made. Former par. (11) redesignated (13).\nSubsec. (d)(12), (13).  Pub. L. 97–34, §\u202f261(b)(2)(A) , redesignated former pars. (10) and (11) as pars. (12) and (13), respectively. Former par. (12) redesignated (14).\nSubsec. (d)(14).  Pub. L. 97–34, §\u202f261(f)(1)(A) , substituted as definition for term “\u202f‘designated local agency’ means a State employment security agency established in accordance with the Act of  June 6, 1933 , as amended ( 29 U.S.C. 49–49n )” for “\u202f‘designated local agency’ means the agency for any locality designated jointly by the Secretary and the Secretary of Labor to perform certification of employees for employers in that locality”.\nPub. L. 97–34, §\u202f261(b)(2)(A) , redesignated former par. (12) as (14).\nSubsec. (d)(15).  Pub. L. 97–34, §\u202f261(c)(1) , added par. (15).\nSubsec. (e).  Pub. L. 97–34, §\u202f261(e)(1) , struck out subsec. (e) which set forth limitation that qualified first-year wages could not exceed 30 percent of FUTA wages for all employees.\nSubsec. (f).  Pub. L. 97–34, §\u202f261(e)(2) , substituted “any taxable year” for “any year” in pars. (1) and (2) and struck out par. (3), defining “year” which is covered in pars. (1) and (2).\nSubsec. (g).  Pub. L. 97–34, §\u202f261(f)(1)(B) , substituted “United States Employment Service” for “Secretary of Labor” in heading and text.\nSubsec. (i).  Pub. L. 97–34, §\u202f261(d) , added subsec. (i).\n1980—Subsec. (c)(1).  Pub. L. 96–222, §\u202f103(a)(6)(E)(ii) , substituted “,\u2000subsection (d)(8)(D), and subsection (h)(2)” for “subsection (h)(2)”.\nSubsec. (c)(2).  Pub. L. 96–222, §\u202f103(a)(6)(G)(iii) , inserted “or incurred” after “amounts paid”.\nSubsec. (c)(4).  Pub. L. 96–222, §\u202f103(a)(6)(A) , substituted “ December 31, 1981 ” for “ December 31, 1980 ”.\nSubsec. (d)(1)(E).  Pub. L. 96–222, §\u202f103(a)(6)(G)(iv) , struck out “or” after “recipient,”.\nSubsec. (d)(4)(A)(i).  Pub. L. 96–222, §\u202f103(a)(6)(G)(v) , substituted “active duty” for “active day”.\nSubsec. (d)(4)(B).  Pub. L. 96–222, §\u202f103(a)(6)(G)(vi) , substituted “preemployment” for “premployment”.\nSubsec. (d)(5).  Pub. L. 96–222, §\u202f103(a)(6)(G)(vii) , substituted “preemployment” for “pre-employment”.\nSubsec. (d)(8)(A).  Pub. L. 96–222, §\u202f103(a)(6)(F) , substituted “age 20” for “age 19”.\nSubsec. (d)(8)(D).  Pub. L. 96–222, §\u202f103(a)(6)(E)(i) , in heading substituted “Wages” for “Individual must be currently pursuing program” and in text substituted “In the case of remuneration” for “Wages shall be taken into account with respect to a qualified cooperative education program only if the wages are” and inserted “,\u2000wages, and unemployment insurance wages, shall be determined without regard to section 3306(c)(10)(C)”.\nSubsec. (d)(12).  Pub. L. 96–222, §\u202f103(a)(6)(G)(viii) , substituted “employers” for “employer”.\nSubsec. (e).  Pub. L. 96–222, §\u202f103(a)(6)(G)(ix) , inserted “except as provided in subsection (h)(1)” after “the preceding sentence,”.\n1978— Pub. L. 95–600  amended section generally and limited allowance of credit to the hiring of seven target groups with high unemployment rates.\nPub. L. 116–260, div. EE, title I, §\u202f113(b) ,  Dec. 27, 2020 ,  134 Stat. 3050 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f143(b) ,  Dec. 20, 2019 ,  133 Stat. 3234 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2019 .”\nPub. L. 114–113, div. Q, title I, §\u202f142(c) ,  Dec. 18, 2015 ,  129 Stat. 3056 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2014 . \n \n “(2)   Modification .— The amendments made by subsection (b) [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f119(b) ,  Dec. 19, 2014 ,  128 Stat. 4015 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f309(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2011 .”\nPub. L. 112–56, title II, §\u202f261(g) ,  Nov. 21, 2011 ,  125 Stat. 732 , provided that:  “The amendments made by this section [amending this section and sections 52 and 3111 of this title] shall apply to individuals who begin work for the employer after the date of the enactment of this Act [ Nov. 21, 2011 ].”\nPub. L. 111–312, title VII, §\u202f757(b) ,  Dec. 17, 2010 ,  124 Stat. 3322 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after the date of the enactment of this Act [ Dec. 17, 2010 ].”\nPub. L. 111–147, title I, §\u202f101(e) ,  Mar. 18, 2010 ,  124 Stat. 75 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this subsection [probably should be “section”, amending this section and sections 3111 and 3221 of this title] shall apply to wages paid after the date of the enactment of this Act [ Mar. 18, 2010 ]. \n \n “(2)   Railroad retirement taxes .— The amendments made by subsection (d) [amending  section 3221 of this title ] shall apply to compensation paid after the date of the enactment of this Act.”\nPub. L. 111–5, div. B, title I, §\u202f1221(b) ,  Feb. 17, 2009 ,  123 Stat. 338 , provided that:  “The amendments made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2008 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nAmendment by section 4002(b)(1)(A), (B), (D), (2)(O) of  Pub. L. 110–246  effective  Oct. 1, 2008 , see  section 4407 of Pub. L. 110–246 , set out as a note under  section 1161 of Title 2 , The Congress.\nPub. L. 110–28, title VIII, §\u202f8211(e) ,  May 25, 2007 ,  121 Stat. 192 , provided that:  “The amendments made by this section [amending this section] shall apply to individuals who begin work for the employer after the date of the enactment of this Act [ May 25, 2007 ].”\nPub. L. 109–432, div. A, title I, §\u202f105(f) ,  Dec. 20, 2006 ,  120 Stat. 2938 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 51A of this title  and repealing  section 51A of this title ] shall apply to individuals who begin work for the employer after  December 31, 2005 . \n \n “(2)   Consolidation .— The amendments made by subsections (b), (c), (d), and (e) [amending this section and repealing  section 51A of this title ] shall apply to individuals who begin work for the employer after  December 31, 2006 .”\nAmendment by  section 207(5) of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 108–311, title III, §\u202f303(b) ,  Oct. 4, 2004 ,  118 Stat. 1179 , provided that: “The amendments made by this section [amending this section and  section 51A of this title ] shall apply to individuals who begin work for the employer after  December 31, 2003 .”\nPub. L. 107–147, title VI, §\u202f604(b) ,  Mar. 9, 2002 ,  116 Stat. 59 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2001 .”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f102(d)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–600, provided that:  “The amendments made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 2001 .”\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f316(e)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–645, provided that:  “The amendments made by this section [amending this section and sections 219, 401 and 1361 of this title] shall take effect as if included in the provisions of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 ] to which they relate.”\nPub. L. 106–170, title V, §\u202f505(c) ,  Dec. 17, 1999 ,  113 Stat. 1921 , provided that:  “The amendments made by this section [amending this section and  section 51A of this title ] shall apply to individuals who begin work for the employer after  June 30, 1999 .”\nPub. L. 105–277, div. J, title I, §\u202f1002(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–888 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after  June 30, 1998 .”\nPub. L. 105–34, title VI, §\u202f603(e) ,  Aug. 5, 1997 ,  111 Stat. 863 , provided that:  “The amendments made by this section [amending this section] shall apply to individuals who begin work for the employer after  September 30, 1997 .”\nPub. L. 105–33, title V, §\u202f5518(c) ,  Aug. 5, 1997 ,  111 Stat. 621 , provided that:  “The amendments made by section 5514(a) of this Act [amending this section and sections 3304, 6103, 6334, 6402, and 7523 of this title] shall take effect as if the amendments had been included in section 110 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 [ Pub. L. 104–193 ] at the time such section 110 became law.”\nAmendment by  Pub. L. 104–193  effective  July 1, 1997 , with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see  section 116 of Pub. L. 104–193 , as amended, set out as an Effective Date note under  section 601 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 104–188  applicable to individuals who begin work for the employer after  Sept. 30, 1996 , see  section 1201(g) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 103–66, title XIII, §\u202f13102(b) ,  Aug. 10, 1993 ,  107 Stat. 420 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after  June 30, 1992 .”\nPub. L. 102–227, title I, §\u202f105(b) ,  Dec. 11, 1991 ,  105 Stat. 1687 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after  December 31, 1991 .”\nPub. L. 101–508, title XI, §\u202f11405(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 , provided that: \n “(1)   Credit .— The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after  September 30, 1990 . \n \n “(2)   Authorization .— The amendment made by subsection (b) [amending provisions set out below] shall apply to fiscal years beginning after 1990.”\nPub. L. 101–239, title VII, §\u202f7103(c)(2) ,  Dec. 19, 1989 ,  103 Stat. 2305 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to individuals who begin work for the employer after  December 31, 1989 .”\nAmendment by  section 1017(a) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4010(c)(2) ,  Nov. 10, 1988 ,  102 Stat. 3655 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to individuals who begin work for the employer after  December 31, 1988 .”\nPub. L. 100–647, title IV, §\u202f4010(d)(2) ,  Nov. 10, 1988 ,  102 Stat. 3655 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to individuals who begin work for the employer after  December 31, 1988 .”\nAmendment by  Pub. L. 100–485  effective  Oct. 1, 1990 , with provision for earlier effective dates in case of States making certain changes in their State plans and formally notifying the Secretary of Health and Human Services of their desire to become subject to the amendments made by title II of  Pub. L. 100–485  on the earlier effective dates, see  section 204 of Pub. L. 100–485 , set out as a note under  section 671 of Title 42 , The Public Health and Welfare.\nPub. L. 100–203, title X, §\u202f10601(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–451 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts paid or incurred on or after  January 1, 1987 , for services rendered on or after such date.”\nPub. L. 99–514, title XVII, §\u202f1701(e) ,  Oct. 22, 1986 ,  100 Stat. 2772 , provided that:  “The amendments made by this section [amending this section and provisions set out below] shall apply with respect to individuals who begin work for the employer after  December 31, 1985 .”\nAmendment by  section 1878(f)(1) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by section 474(p)(1)–(3) of  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 712 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1041(c)(5) ,  July 18, 1984 ,  98 Stat. 1043 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1878(f)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2904, provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this section [amending this section] shall apply to individuals who begin work for the employer after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(B)   Special rule for employees performing services for other persons .— Paragraph (2) of section 51(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this subsection) and the amendment made by paragraph (3) of this subsection [amending this section] shall apply to individuals who begin work for the employer after  December 31, 1984 .”\nPub. L. 98–369, div. B, title VI, §\u202f2638(c)(2) ,  July 18, 1984 ,  98 Stat. 1144 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply with respect to payments made on or after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 2663 of Pub. L. 98–369  effective  July 18, 1984 , but not to be construed as changing or affecting any right, liability, status or interpretation which existed (under the provisions of law involved) before that date, see  section 2664(b) of Pub. L. 98–369 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nPub. L. 97–448, title I, §\u202f102 ( l )(4),  Jan. 12, 1983 ,  96 Stat. 2374 , provided that the amendment made by that section is effective with respect to certifications made after  Jan. 12, 1983 , with respect to individuals beginning work for an employer after  May 11, 1982 .\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title II, §\u202f233(f) ,  Sept. 3, 1982 ,  96 Stat. 502 , provided that the amendments made by that section are effective only with respect to individuals who begin work for the taxpayer after  May 11, 1982 .\nPub. L. 97–248, title II, §\u202f233(g) ,  Sept. 3, 1982 ,  96 Stat. 503 , provided that: \n “(1)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall apply to amounts paid or incurred after  April 30, 1983 , to individuals beginning work for the employer after such date. \n \n “(2)   Subsection  (d).— The amendments made by subsection (d) [amending this section] shall apply to amounts paid or incurred after  July 1, 1982 , to individuals beginning work for the employer after such date.”\nPub. L. 97–34, title II, §\u202f261(g) ,  Aug. 13, 1981 ,  95 Stat. 263 , as amended by  Pub. L. 97–448, title I, §\u202f102 ( l )(2),  Jan. 12, 1983 ,  96 Stat. 2374 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Amendments relating to members of targeted groups.— “(A)   In general .— Except as provided in subparagraphs (B), (C), and (D), the amendments made by subsections (b), (c)(2), and (d) [amending this section and  section 50B of this title ] shall apply to wages paid or incurred with respect to individuals first beginning work for an employer after the date of the enactment of this Act [ Aug. 13, 1981 ] in taxable years ending after such date. \n \n “(B)   Eligible work incentive employees .— The amendments made by subsection (b)(2) [amending this section] to the extent relating to the designation of eligible work incentive employees (within the meaning of section 51(d)(9) [now 51(d)(10)] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) as members of a targeted group and subsection (b)(2)(B)(ii) [amending this section] shall apply to taxable years beginning after  December 31, 1981 . In the case of an eligible work incentive employee, subsections (a) and (b) of section 51 of such Code shall be applied for taxable years beginning after  December 31, 1981 , as if such employees had been members of a targeted group for taxable years beginning before  January 1, 1982 . \n \n “(C)   Cooperative education program participants .— The amendments made by subsection (b)(4) [amending this section] shall apply to wages paid or incurred after  December 31, 1981 , in taxable years ending after such date. \n \n “(D)   Designated local agency .— The amendments made by subsection (f)(1) [amending this section] shall take effect on the date 60 days after the date of the enactment of this act [ Aug. 13, 1981 ]. \n \n \n “(2)   Certifications.— “(A)   In general .— The amendment made by subsection (c)(1) [amending this section] shall apply to all individuals whether such individuals began work for their employer before, on, or after the date of the enactment of this Act [ Aug. 13, 1981 ]. \n \n “(B)   Special rule for individuals who began work for the employer before 45th day before date of enactment .— In the case of any individual (other than an individual described in section 51(d)(8) of the Internal Revenue Code of 1986) who began work for the employer before the date 45 days before the date of the enactment of this Act [ Aug. 13, 1981 ], paragraph (15) of section 51(d) of the Internal Revenue Code of 1986 (as added by subsection (c)(1)) shall be applied by substituting ‘ July 23, 1981 ,’ for the day on which such individual begins work for the employer. \n \n “(C)   Individuals who begin work for employer within 45 days before or after date of enactment .— In the case of any individual (other than an individual described in section 51(d)(8) of the Internal Revenue Code of 1986) who begins work for the employer during the 90-day period beginning with the date 45 days before the date of the enactment of this Act [ Aug. 13, 1981 ], and in the case of an individual described in section 51(d)(8) of such Code who begins work before the end of such 90-day period, paragraph (15) of section 51(d) of such Code (as added by subsection (c)(1)) shall be applied by substituting ‘the last day of the 90-day period beginning with the date 45 days before the date of the enactment of this Act’ for the day on which such individual begins work for the employer. \n \n \n “(3)   Limitation on qualified first-year wages .— The amendment made by subsection (e) [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 96–222, title I, §\u202f103(b)(1) ,  Apr. 1, 1980 ,  94 Stat. 214 , provided that:  “The amendment made by subsection (a)(5)(F) [probably means subsec. (a)(6)(F), amending this section] shall apply to wages paid or incurred on or after  November 27, 1979 , in taxable years ending on or after such date.”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title III, §\u202f321(d)(1) ,  Nov. 6, 1978 ,  92 Stat. 2835 , provided that:  “Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 44B, 52, 53, and 6501 of this title] shall apply to amounts paid or incurred after  December 31, 1978 , in taxable years ending after such date.”\nPub. L. 95–30, title II, §\u202f202(e) ,  May 23, 1977 ,  91 Stat. 151 , provided that:  “The amendments made by this section [enacting this section and sections 44B, 52, 53, and 280C of this title and amending sections 56, 381, 383, 6096, 6411, 6501, 6511, 6601, and 6611 of this title] shall apply to taxable years beginning after  December 31, 1976 , and to credit carrybacks from such years.”\nPub. L. 112–56, title II, §\u202f261(f) ,  Nov. 21, 2011 ,  125 Stat. 731 , provided that: \n “(1)   Payments to possessions.— “(A)   Mirror code possessions .— The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the amendments made by this section [amending this section and sections 52 and 3111 of this title]. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession of the United States. \n \n “(B)   Other possessions .— The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system the amount estimated by the Secretary of the Treasury as being equal to the loss to that possession that would have occurred by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession establishes to the satisfaction of the Secretary that the possession has implemented (or, at the discretion of the Secretary, will implement) an income tax benefit which is substantially equivalent to the income tax credit in effect after the amendments made by this section. \n \n \n “(2)   Coordination with credit allowed against united states income taxes .— The credit allowed against United States income taxes for any taxable year under the amendments made by this section to section 51 of the Internal Revenue Code of 1986 [ 26 U.S.C. 51 ] to any person with respect to any qualified veteran shall be reduced by the amount of any credit (or other tax benefit described in paragraph (1)(B)) allowed to such person against income taxes imposed by the possession of the United States by reason of this subsection with respect to such qualified veteran for such taxable year. \n \n “(3)   Definitions and special rules.— “(A)   Possession of the united states .— For purposes of this subsection, the term ‘possession of the United States’ includes American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, and the United States Virgin Islands. \n \n “(B)   Mirror code tax system .— For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(C)   Treatment of payments .— For purposes of  section 1324(b)(2) of title 31 , United States Code, the payments under this subsection shall be treated in the same manner as a refund due from credit provisions described in such section.”\nPub. L. 105–277, div. J, title IV, §\u202f4006(c)(1) ,  Oct. 21, 1998 ,  112 Stat. 2681–912 , provided that:  “The reference to ‘plan for employment’ in such clause [ 26 U.S.C. 51(d)(6)(B)(i) ] shall be treated as including a reference to the rehabilitation plan referred to in such clause as in effect before the amendment made by the preceding sentence.”\nPub. L. 97–34, title II, §\u202f261(f)(2) ,  Aug. 13, 1981 ,  95 Stat. 263 , as amended by  Pub. L. 97–248, title II, §\u202f233(e) ,  Sept. 3, 1982 ,  96 Stat. 502 ;  Pub. L. 98–369, div. A, title X, §\u202f1041(b) ,  July 18, 1984 ,  98 Stat. 1042 ;  Pub. L. 99–514, title XVII, §\u202f1701(d) ,  Oct. 22, 1986 ,  100 Stat. 2772 ;  Pub. L. 100–647, title IV, §\u202f4010(b) ,  Nov. 10, 1988 ,  102 Stat. 3655 ;  Pub. L. 101–239, title VII, §\u202f7103(b) ,  Dec. 19, 1989 ,  103 Stat. 2305 ;  Pub. L. 101–508, title XI, §\u202f11405(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 , provided that:  \n “There is authorized to be appropriated for each fiscal year such sums as may be necessary, to carry out the functions described by the amendments made by paragraph (1) [amending this section], except that, of the amounts appropriated pursuant to this paragraph— “(A)  $5,000,000 shall be used to test whether individuals certified as members of targeted groups under section 51 of such Code are eligible for such certification (including the use of statistical sampling techniques), and \n \n “(B)  the remainder shall be distributed under performance standards prescribed by the Secretary of Labor. \n \n\n The Secretary of Labor shall each calendar year beginning with calendar year 1983 report to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate with respect to the results of the testing conducted under subparagraph (A) during the preceding calendar year.”\n[For termination, effective  May 15, 2000 , of reporting provisions in  section 261(f)(2) of Pub. L. 97–34 , set out above, see  section 3003 of Pub. L. 104–66 , as amended, set out as a note under  section 1113 of Title 31 , Money and Finance, and page 124 of House Document No. 103–7.]\n[Amendment by  Pub. L. 101–508  applicable to fiscal years beginning after 1990, see  section 11405(c)(2) of Pub. L. 101–508 , set out as an Effective Date of 1990 Amendment note above.]\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 95–600, title III, §\u202f321(d)(2) ,  Nov. 6, 1978 ,  92 Stat. 2835 , as amended by  Pub. L. 96–222, title I, §\u202f103(a)(6)(C) , (G)(xi),  Apr. 1, 1980 ,  94 Stat. 209 , 211;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   Individual must be hired after  september 26, 1978 .— In the case of a member of a newly targeted group, for purposes of applying the amendments made by this section— “(i)  such individual shall be taken into account for purposes of the credit allowable by section 44B of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] only if such individual is first hired by the employer after  September 26, 1978 , and \n \n “(ii)  such individual shall be treated for purposes of such credit as having first begun work for the employer not earlier than  January 1, 1979 . \n \n \n “(B)  Member of newly targeted group defined .— For purposes of subparagraph (A), an individual is a member of a newly targeted group if— “(i)  such individual meets the requirements of paragraph (1) of section 51(d) of such Code, and \n \n “(ii)  in the case of an individual meeting the requirements of subparagraph (A) of such paragraph (1), a credit was not claimed for such individual by the taxpayer for a taxable year beginning before  January 1, 1979 .”\nPub. L. 95–600, title III, §\u202f321(d)(3) ,  Nov. 6, 1978 ,  92 Stat. 2836 , as amended by  Pub. L. 96–222, title I, §\u202f103(a)(6)(D) ,  Apr. 1, 1980 ,  94 Stat. 209 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of a taxable year which begins in 1978 and ends after  December 31, 1978 , the amount of the credit determined under section 51 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be the sum of— \n “(A)  the amount of the credit which would be so determined without regard to the amendments made by this section, plus \n \n “(B)  the amount of the credit which would be so determined by reason of the amendments made by this section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 105–34, title VIII, §\u202f801(a) ,  Aug. 5, 1997 ,  111 Stat. 869 ; amended  Pub. L. 105–277, div. J, title I, §\u202f1003 ,  Oct. 21, 1998 ,  112 Stat. 2681–888 ;  Pub. L. 106–170, title V, §\u202f505(a) ,  Dec. 17, 1999 ,  113 Stat. 1921 ;  Pub. L. 107–16, title IV, §\u202f411(c) ,  June 7, 2001 ,  115 Stat. 63 ;  Pub. L. 107–147, title IV, §\u202f417(4) , title VI, §\u202f605(a),  Mar. 9, 2002 ,  116 Stat. 56 , 60;  Pub. L. 108–311, title III, §\u202f303(a)(2) ,  Oct. 4, 2004 ,  118 Stat. 1179 ;  Pub. L. 109–432, div. A, title I, §\u202f105(a) ,  Dec. 20, 2006 ,  120 Stat. 2936 , related to temporary incentives for employing long-term family assistance recipients. See  section 51(e) of this title .\nRepeal applicable to individuals who begin work for the employer after  Dec. 31, 2006 , see  section 105(f)(2) of Pub. L. 109–432 , set out as an Effective Date of 2006 Amendment note under  section 51 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'No credit shall be allowed under section 38 for any work opportunity credit determined under this subpart to any organization (other than a cooperative described in section 521) which is exempt from income tax under this chapter.\nFor credit against payroll taxes for employment of qualified veterans by qualified tax-exempt organizations, see section 3111(e).\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (e), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\n2011—Subsec. (c).  Pub. L. 112–56  designated existing provisions as par. (1), inserted heading, and added par. (2).\n1997—Subsec. (c).  Pub. L. 105–34  substituted “work opportunity credit” for “targeted jobs credit”.\n1996—Subsec. (e)(1) to (3).  Pub. L. 104–188  redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1) which read as follows: “an organization to which section 593 (relating to reserves for losses on loans) applies,”.\n1990—Subsec. (e).  Pub. L. 101–508  substituted “section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” for “section 46” in concluding provisions.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f474(p)(4) , substituted “the credit (if any) determined under section 51(a) with respect to each such member” for “the credit (if any) allowable by section 44B to each such member”.\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f474(p)(5) , substituted “the credit (if any) determined under section 51(a)” for “the credit (if any) allowable by section 44B”.\nSubsec. (c).  Pub. L. 98–369, §\u202f474(p)(6) , substituted “credit shall be allowed under section 38 for any targeted jobs credit determined under this subpart” for “credit shall be allowed under section 44B”.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f474(p)(7) , substituted “,\u2000subject to section 38(c), a credit under section 38(a)” for “,\u2000subject to section 53 a credit under section 44B”.\n1982—Subsecs. (d) to (f).  Pub. L. 97–354  struck out subsec. (d) relating to apportionment of credit among shareholders, and redesignated subsecs. (e) and (f) as (d) and (e), respectively.\n1980—Subsec. (f).  Pub. L. 96–222  substituted “subsections (e) and (h) of section 46” for “section 46(e)”.\n1978—Subsecs. (a), (b).  Pub. L. 95–600, §\u202f321(c)(1)(B) , substituted “proportionate share of the wages” for “proportionate contribution to the increase in unemployment insurance wages”.\nSubsecs. (c), (d).  Pub. L. 95–600, §\u202f321(c)(1)(A) , struck out subsec. (c) which related to dispositions by an employer, and redesignated subsecs. (d) and (f) as (c) and (d), respectively.\nSubsec. (e).  Pub. L. 95–600, §\u202f321(c)(1)(A) , (C), redesignated subsec. (g) as (e) and struck out par. (3) which provided that the $100,000 amount specified in section 51(d) applicable to such estate or trust be reduced to an amount which bears the same ratio to $100,000 as the portion of the credit allocable to the estate or trust under paragraph (1) bears to the entire amount of such credit. Former subsec. (e), which related to a change in status from self-employed to employee, was struck out.\nSubsecs. (f) to (h).  Pub. L. 95–600, §\u202f321(c)(1)(A) , redesignated subsecs. (f) to (h) as (d) to (f), respectively.\nSubsec. (i).  Pub. L. 95–600, §\u202f321(c)(1)(A)(i) , struck out subsec. (i) which related to a $50,000 limitation in the case of married individuals filing separate returns.\nSubsec. (j).  Pub. L. 95–600, §\u202f321(c)(1)(A)(i) , struck out subsec. (j) which related to certain short taxable years.\nAmendment by  Pub. L. 112–56  applicable to individuals who begin work for the employer after  Nov. 21, 2011 , see  section 261(g) of Pub. L. 112–56 , set out as a note under  section 51 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 95–600  applicable to amounts paid or incurred after  Dec. 31, 1978 , in taxable years ending after such date, see  section 321(d)(1) of Pub. L. 95–600 , set out as a note under  section 51 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1976 , and to credit carrybacks from such years, see  section 202(e) of Pub. L. 95–30 , set out as a note under  section 51 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'There shall be allowed as a credit against the tax imposed by this chapter for any taxable year an amount equal to the minimum tax credit for such taxable year.\nThe term “net minimum tax” means the tax imposed by section 55.\nThe term “tentative minimum tax” has the meaning given to such term by section 55(b).\nA prior section 53, added  Pub. L. 95–30, title II, §\u202f202(b) ,  May 23, 1977 ,  91 Stat. 146 ; amended  Pub. L. 95–600, title III, §\u202f321(c)(2) ,  Nov. 6, 1978 ,  92 Stat. 2835 ;  Pub. L. 97–34, title II, §\u202f207(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 225 ;  Pub. L. 97–248, title II, §\u202f201(d)(8)(A) , formerly §\u202f201(c)(8)(A), and §\u202f265(b)(2)(A)(iii),  Sept. 3, 1982 ,  96 Stat. 420 , 547, renumbered §\u202f201(d)(8)(A),  Pub. L. 97–448, title III, §\u202f306(a)(1)(A)(i) ,  Jan. 12, 1983 ,  96 Stat. 2400 ; 97–354, §\u202f5(a)(12),  Oct. 19, 1982 ,  96 Stat. 1693 ; 97–448, title I, §\u202f102(d)(3),  Jan. 12, 1983 ,  96 Stat. 2370 ;  Pub. L. 98–21, title I, §\u202f122(c)(1) ,  Apr. 20, 1983 ,  97 Stat. 87 ;  Pub. L. 98–369, div. A, title VII, §\u202f713(c)(1)(C) ,  July 18, 1984 ,  98 Stat. 957 , placed limitations on the amount of credit allowed by former section 44B for employment of certain new employees, prior to repeal by  Pub. L. 98–369, div. A, title IV, §\u202f474(p)(8) ,  July 18, 1984 ,  98 Stat. 838 , applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years.\n2022—Subsec. (d)(2).  Pub. L. 117–169, §\u202f10101(e)(2)(A) , struck out “,\u2000except that in the case of a corporation, the tentative minimum tax shall be treated as zero” after “section 55(b)”.\nSubsec. (d)(3).  Pub. L. 117–169, §\u202f10101(e)(2)(B) , struck out par. (3). Prior to amendment, text read as follows: “In the case of a corporation, any references in this subsection to section 55, 56, or 57 shall be treated as a reference to such section as in effect before the amendments made by Tax Cuts and Jobs Act.”\nSubsec. (e).  Pub. L. 117–169, §\u202f10101(e)(1) , amended subsec. (e) generally. Prior to amendment, subsec. (e) related to portion of credit treated as refundable.\n2020—Subsec. (e)(1).  Pub. L. 116–136, §\u202f2305(a)(1) , substituted “2018 or 2019” for “2018, 2019, 2020, or 2021”.\nSubsec. (e)(2).  Pub. L. 116–136, §\u202f2305(a)(2) , substituted “2019” for “2021” in introductory provisions.\nSubsec. (e)(5).  Pub. L. 116–136, §\u202f2305(b)(1) , added par. (5).\n2017—Subsec. (d)(2).  Pub. L. 115–97, §\u202f12001(b)(2) , inserted “,\u2000except that in the case of a corporation, the tentative minimum tax shall be treated as zero” before period at end.\nSubsec. (d)(3).  Pub. L. 115–97, §\u202f12002(b) , added par. (3).\nSubsec. (e).  Pub. L. 115–97, §\u202f12002(a) , added subsec. (e).\n2014—Subsecs. (e), (f).  Pub. L. 113–295  struck out subsecs. (e) and (f) which related to special rule for individuals with long-term unused credits and treatment of certain underpayments, interest, and penalties attributable to the treatment of incentive stock options, respectively.\n2009—Subsec. (d)(1)(B)(iii).  Pub. L. 111–5, §\u202f1142(b)(4)(A) , redesignated cl. (iv) as (iii) and struck out former cl. (iii). Prior to amendment, text read as follows: “The adjusted net minimum tax for the taxable year shall be increased by the amount of the credit not allowed under section 30 solely by reason of the application of section 30(b)(3)(B).”\nSubsec. (d)(1)(B)(iii)(II).  Pub. L. 111–5, §\u202f1142(b)(4)(B) , struck out “increased in the manner provided in clause (iii)” before period.\nSubsec. (d)(1)(B)(iv).  Pub. L. 111–5, §\u202f1142(b)(4)(A) , redesignated cl. (iv) as (iii).\n2008—Subsec. (e)(2).  Pub. L. 110–343, §\u202f103(a) , reenacted heading without change and amended text generally. Prior to amendment, par. (2) defined “AMT refundable credit amount” and provided for phaseout of AMT refundable credit amount based on adjusted gross income.\nSubsec. (f).  Pub. L. 110–343, §\u202f103(b) , added subsec. (f).\n2007—Subsec. (e)(2)(A).  Pub. L. 110–172  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘AMT refundable credit amount’ means, with respect to any taxable year, the amount equal to the greater of—\n“(i) the lesser of—\n“(I) $5,000, or\n“(II) the amount of long-term unused minimum tax credit for such taxable year, or\n“(ii) 20 percent of the amount of such credit.”\n2006—Subsec. (e).  Pub. L. 109–432  added subsec. (e).\n2005—Subsec. (d)(1)(B)(iii).  Pub. L. 109–58  struck out “under section 29 (relating to credit for producing fuel from a nonconventional source) solely by reason of the application of section 29(b)(6)(B), or not allowed” before “under section 30”.\n2004—Subsec. (d)(1)(B)(i)(II).  Pub. L. 108–357  struck out “and if section 59(a)(2) did not apply” before period at end.\n1996—Subsec. (d)(1)(B)(iii).  Pub. L. 104–188, §\u202f1205(d)(5)(A) , which directed that cl. (iii) be amended by striking out “or not allowed under section 28 solely by reason of the application of section 28(d)(2)(B),” was executed by striking out “not allowed under section 28 solely by reason of the application of section 28(d)(2)(B),” after “29(b)(6)(B),”, to reflect the probable intent of Congress.\nSubsec. (d)(1)(B)(iv)(II).  Pub. L. 104–188, §\u202f1704(j)(1) , amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “the adjusted net minimum tax for any taxable year is the amount of the net minimum tax for such year increased by the amount of any credit not allowed under section 29 solely by reason of the application of section 29(b)(5)(B) or not allowed under section 28 solely by reason of the application of section 28(d)(2)(B).”\nPub. L. 104–188, §\u202f1205(d)(5)(B) , which directed that subcl. (II) be amended by striking out “or not allowed under section 28 solely by reason of the application of section 28(d)(2)(B)”, could not be executed because the phrase sought to be struck out did not appear in text subsequent to the general amendment of subcl. (II) by  Pub. L. 104–188, §\u202f1704(j)(1) , see above, which, pursuant to  section 1701 of Pub. L. 104–188 , set out as a note under  section 1 of this title , is treated as having been enacted before  section 1205(d)(5)(B) of Pub. L. 104–188 .\n1993—Subsec. (d)(1)(B)(ii)(II).  Pub. L. 103–66, §\u202f13171(c) , substituted “(5), and (7)” for “(5), (6), and (8)”.\nPub. L. 103–66, §\u202f13113(b)(2) , substituted “(6), and (8)” for “and (6)”.\n1992—Subsec. (d)(1)(B)(iii).  Pub. L. 102–486, §\u202f1913(b)(2)(C)(i) , substituted “section 29(b)(6)(B),” for “section 29(b)(5)(B) or”.\nPub. L. 102–486, §\u202f1913(b)(2)(C)(ii) , inserted before period at end “,\u2000or not allowed under section 30 solely by reason of the application of section 30(b)(3)(B)”.\n1989—Subsec. (d)(1)(B)(i)(II).  Pub. L. 101–239, §\u202f7811(d)(2) , inserted before period at end “and if section 59(a)(2) did not apply”.\nSubsec. (d)(1)(B)(ii).  Pub. L. 101–239, §\u202f7612(a)(2) , substituted “subsection (b)(1)” for “subsections (b)(1) and (c)(3)” in subcl. (I) and struck out at end “In the case of taxable years beginning after 1989, the adjustments provided in section 56(g) shall be treated as specified in this clause to the extent attributable to items which are excluded from gross income for any taxable year for purposes of the regular tax, or are not deductible for any taxable year under the adjusted current earnings method of section 56(g).”\nSubsec. (d)(1)(B)(iii).  Pub. L. 101–239, §\u202f7612(b)(1) , which directed amendment of cl. (iii) by inserting “or not allowed under section 28 solely by reason of the application of section 28(d)(2)(B)” after “section 29(d)(5)(B)”, was executed by making the insertion after “section 29(b)(5)(B)”, as the probable intent of Congress.\nSubsec. (d)(1)(B)(iv).  Pub. L. 101–239, §\u202f7612(b)(1) , which directed amendment of cl. (iv) by inserting “or not allowed under section 28 solely by reason of the application of section 28(d)(2)(B)” after “section 29(d)(5)(B)”, was executed by making the insertion after “section 29(b)(5)(B)” in subcl. (II), as the probable intent of Congress.\nPub. L. 101–239, §\u202f7612(a)(1) , added cl. (iv).\n1988—Subsec. (d)(1)(B)(ii).  Pub. L. 100–647, §\u202f1007(g)(4) , substituted “current earnings” for “earnings and profits” in last sentence.\nSubsec. (d)(1)(B)(iii).  Pub. L. 100–647, §\u202f6304(a) , added cl. (iii).\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nPub. L. 116–136, div. A, title II, §\u202f2305(c) ,  Mar. 27, 2020 ,  134 Stat. 357 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  section 12001(b)(2) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 115–97, title I, §\u202f12002(d) ,  Dec. 22, 2017 ,  131 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1374 of this title ] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Conforming amendment .— The amendment made by subsection (c) [amending  section 1374 of this title ] shall apply to taxable years beginning after  December 31, 2021 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 110–343, div. C, title I, §\u202f103(c) ,  Oct. 3, 2008 ,  122 Stat. 3864 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 . \n \n “(2)   Abatement .— Section 53(f)(1), as added by subsection (b), shall take effect on the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 110–172, §\u202f2(b) ,  Dec. 29, 2007 ,  121 Stat. 2474 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the provision of the Tax Relief and Health Care Act of 2006 [ Pub. L. 109–432 ] to which it relates.”\nPub. L. 109–432, div. A, title IV, §\u202f402(c) ,  Dec. 20, 2006 ,  120 Stat. 2954 , provided that:  “The amendments made by this section [amending this section,  section 6211 of this title , and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 20, 2006 ].”\nAmendment by  Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nPub. L. 108–357, title IV, §\u202f421(b) ,  Oct. 22, 2004 ,  118 Stat. 1514 , provided that:  “The amendments made by this section [amending this section and  section 59 of this title ] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by  section 1205(d)(5) of Pub. L. 104–188  applicable to amounts paid or incurred in taxable years ending after  June 30, 1996 , see  section 1205(e) of Pub. L. 104–188 , set out as a note under  section 45K of this title .\nPub. L. 104–188, title I, §\u202f1704(j)(1) ,  Aug. 20, 1996 ,  110 Stat. 1881 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1990 .\nPub. L. 103–66, title XIII, §\u202f13113(e) ,  Aug. 10, 1993 ,  107 Stat. 430 , provided that:  “The amendments made by this section [enacting  section 1202 of this title  and amending this section and sections 57, 172, 642, 643, 691, 871, and 6652 of this title] shall apply to stock issued after the date of the enactment of this Act [ Aug. 10, 1993 ].”\nPub. L. 103–66, title XIII, §\u202f13171(d) ,  Aug. 10, 1993 ,  107 Stat. 455 , provided that:  “The amendments made by this section [amending this section and sections 56 and 57 of this title] shall apply to contributions made after  June 30, 1992 , except that in the case of any contribution of capital gain property which is not tangible personal property, such amendments shall apply only if the contribution is made after  December 31, 1992 .”\nPub. L. 104–188, title I, §\u202f1702(e)(5) ,  Aug. 20, 1996 ,  110 Stat. 1870 , provided that:  “The amendment made by section 1913(b)(2)(C)(i) of the Energy Policy Act of 1992 [ Pub. L. 102–486 ] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 102–486, title XIX, §\u202f1913(c) ,  Oct. 24, 1992 ,  106 Stat. 3020 , provided that:  “The amendments made by this section [enacting sections 30 and 179A of this title and amending this section and sections 55, 62, and 1016 of this title] shall apply to property placed in service after  June 30, 1993 .”\nPub. L. 101–239, title VII, §\u202f7612(a)(3) ,  Dec. 19, 1989 ,  103 Stat. 2373 , provided that:  “The amendments made by this subsection [amending this section] shall apply for purposes of determining the adjusted net minimum tax for taxable years beginning after  December 31, 1989 .”\nPub. L. 101–239, title VII, §\u202f7612(b)(2) ,  Dec. 19, 1989 ,  103 Stat. 2374 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply for purposes of determining the amount of the minimum tax credit for taxable years beginning after  December 31, 1989 ; except that, for such purposes, section 53(b)(1) of the Internal Revenue Code of 1986 shall be applied as if such amendment had been in effect for all prior taxable years.”\nAmendment by  section 7811(d)(2) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 1007(g)(4) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6304(b) ,  Nov. 10, 1988 ,  102 Stat. 3756 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by section 701 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 55 of this title .\nFor applicability of amendment by  section 701(b) of Pub. L. 99–514  [enacting this section] notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 113–295, div. A, title II, §\u202f221(a)(8)(A)(ii) ,  Dec. 19, 2014 ,  128 Stat. 4038 , provided that:  “The amendment made by clause (i) striking subsection (f) of section 53 of the Internal Revenue Code of 1986 shall not be construed to allow any tax abated by reason of section 53(f)(1) of such Code (as in effect before such amendment) to be included in the amount determined under section 53(b)(1) of such Code.”\nPub. L. 116–136, div. A, title II, §\u202f2305(d) ,  Mar. 27, 2020 ,  134 Stat. 357 , provided that: \n “(1)   In general .— For purposes of the Internal Revenue Code of 1986, a credit or refund for which an application described in paragraph (2)(A) is filed shall be treated as made under section 6411 of such Code. \n \n “(2)   Tentative refund.— “(A)   Application .— A taxpayer may file an application for a tentative refund of any amount for which a refund is due by reason of an election under section 53(e)(5) of the Internal Revenue Code of 1986. Such application shall be in such manner and form as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe and shall— “(i)  be verified in the same manner as an application under section 6411(a) of such Code, \n \n “(ii)  be filed prior to  December 31, 2020 , and \n \n “(iii)  set forth— “(I)  the amount of the refundable credit claimed under section 53(e) of such Code for such taxable year, \n \n “(II)  the amount of the refundable credit claimed under such section for any previously filed return for such taxable year, and \n \n “(III)  the amount of the refund claimed. \n \n \n \n “(B)   Allowance of adjustments .— Within a period of 90 days from the date on which an application is filed under subparagraph (A), the Secretary of the Treasury (or the Secretary’s delegate) shall— “(i)  review the application, \n \n “(ii)  determine the amount of the overpayment, and \n \n “(iii)  apply, credit, or refund such overpayment, \n \n\n in a manner similar to the manner provided in section 6411(b) of the Internal Revenue Code of 1986. \n \n “(C)   Consolidated returns .— The provisions of section 6411(c) of the Internal Revenue Code of 1986 Code shall apply to an adjustment under this paragraph to the same extent and manner as the Secretary of the Treasury (or the Secretary’s delegate) may provide.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 109–58, title XIII, §\u202f1303(a) ,  Aug. 8, 2005 ,  119 Stat. 992 ; amended  Pub. L. 109–135, title I, §\u202f101(b)(1) , title IV, §\u202f402(c)(1),  Dec. 21, 2005 ,  119 Stat. 2593 , 2610;  Pub. L. 109–222, title V, §\u202f508(d)(3) ,  May 17, 2006 ,  120 Stat. 362 ;  Pub. L. 109–432, div. A, title I, §\u202f107(b)(2) , title II, §\u202f202(a),  Dec. 20, 2006 ,  120 Stat. 2939 , 2944;  Pub. L. 110–234, title XV, §\u202f15316(c)(1) ,  May 22, 2008 ,  122 Stat. 1511 ;  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15316(c)(1),  June 18, 2008 ,  122 Stat. 1664 , 2273;  Pub. L. 110–343, div. B, title I, §\u202f107(c) ,  Oct. 3, 2008 ,  122 Stat. 3819 ;  Pub. L. 111–5, div. B, title I , §§\u202f1531(c)(3), 1541(b)(1),  Feb. 17, 2009 ,  123 Stat. 360 , 362;  Pub. L. 115–97, title I, §\u202f13404(c)(2) ,  Dec. 22, 2017 ,  131 Stat. 2138 , related to credit to holders of clean renewable energy bonds.\nPub. L. 115–97, title I, §\u202f13404(d) ,  Dec. 22, 2017 ,  131 Stat. 2138 , provided that:  “The amendments made by this section [amending this section and sections 6211 and 6401 of this title and repealing this section and sections 54A to 54F, 54AA, 1397E, and 6431 of this title] shall apply to bonds issued after  December 31, 2017 .”\nPub. L. 109–58, title XIII, §\u202f1303(d) ,  Aug. 8, 2005 ,  119 Stat. 997 , provided that the Secretary of the Treasury was to issue regulations required under former  26 U.S.C. 54  not later than 120 days after  Aug. 8, 2005 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section 54A, added  Pub. L. 110–234, title XV, §\u202f15316(a) ,  May 22, 2008 ,  122 Stat. 1505 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15316(a),  June 18, 2008 ,  122 Stat. 1664 , 2267; amended  Pub. L. 110–343, div. B, title I, §\u202f107(b)(1) , (2), title III, §\u202f301(b)(1), (2), div. C, title III, §\u202f313(b)(1), (2),  Oct. 3, 2008 ,  122 Stat. 3818 , 3819, 3843, 3844, 3872;  Pub. L. 111–5, div. B, title I , §§\u202f1521(b)(1), (2), 1531(c)(2), 1541(b)(2),  Feb. 17, 2009 ,  123 Stat. 357 , 360, 362;  Pub. L. 113–295, div. A, title II, §\u202f220(e) ,  Dec. 19, 2014 ,  128 Stat. 4036 , related to credit to holders of qualified tax credit bonds.\nSection 54B, added  Pub. L. 110–234, title XV, §\u202f15316(a) ,  May 22, 2008 ,  122 Stat. 1509 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15316(a),  June 18, 2008 ,  122 Stat. 1664 , 2271, related to qualified forestry conservation bonds.\nSection 54C, added  Pub. L. 110–343, div. B, title I, §\u202f107(a) ,  Oct. 3, 2008 ,  122 Stat. 3817 ; amended  Pub. L. 111–5, div. B, title I, §\u202f1111 ,  Feb. 17, 2009 ,  123 Stat. 322 , related to new clean renewable energy bonds.\nSection 54D, added  Pub. L. 110–343, div. B, title III, §\u202f301(a) ,  Oct. 3, 2008 ,  122 Stat. 3841 ; amended  Pub. L. 111–5, div. B, title I, §\u202f1112 ,  Feb. 17, 2009 ,  123 Stat. 322 , related to qualified energy conservation bonds.\nSection 54E, added  Pub. L. 110–343, div. C, title III, §\u202f313(a) ,  Oct. 3, 2008 ,  122 Stat. 3869 ; amended  Pub. L. 111–5, div. B, title I, §\u202f1522(a) ,  Feb. 17, 2009 ,  123 Stat. 358 ;  Pub. L. 111–312, title VII, §\u202f758(a) ,  Dec. 17, 2010 ,  124 Stat. 3322 ;  Pub. L. 112–240, title III, §\u202f310(a) ,  Jan. 2, 2013 ,  126 Stat. 2330 ;  Pub. L. 113–295, div. A, title I, §\u202f120(a) ,  Dec. 19, 2014 ,  128 Stat. 4015 ;  Pub. L. 114–95, title IX, §\u202f9215(uu)(1) ,  Dec. 10, 2015 ,  129 Stat. 2183 ;  Pub. L. 114–113, div. Q, title I, §\u202f164(a) ,  Dec. 18, 2015 ,  129 Stat. 3066 , related to qualified zone academy bonds.\nSection 54F, added  Pub. L. 111–5, div. B, title I, §\u202f1521(a) ,  Feb. 17, 2009 ,  123 Stat. 355 ; amended  Pub. L. 111–147, title III, §\u202f301(b) ,  Mar. 18, 2010 ,  124 Stat. 78 , related to qualified school construction bonds.\nRepeal applicable to bonds issued after  Dec. 31, 2017 , see  section 13404(d) of Pub. L. 115–97 , set out as a note under former  section 54 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section, added  Pub. L. 111–5, div. B, title I, §\u202f1531(a) ,  Feb. 17, 2009 ,  123 Stat. 358 , related to build America bonds.\nRepeal applicable to bonds issued after  Dec. 31, 2017 , see  section 13404(d) of Pub. L. 115–97 , set out as a note under former  section 54 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1531(d) ,  Feb. 17, 2009 ,  123 Stat. 360 , provided that, except as otherwise provided by a State after  Feb. 17, 2009 , the interest on any build America bond (as defined in former  26 U.S.C. 54AA ) and the amount of any credit determined under such section with respect to such bond was to be treated for purposes of the income tax laws of such State as being exempt from Federal income tax.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ALTERNATIVE MINIMUM TAX'},
  'content': 'For purposes of this subsection, the term “taxable excess” means so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount.\nIn the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting 50 percent of the dollar amount otherwise applicable under clause (i) and clause (ii) thereof. For purposes of the preceding sentence, marital status shall be determined under section 7703.\nIn the case of any corporation which is not an applicable corporation, the tentative minimum tax for the taxable year shall be zero.\nFor purposes of this section, the term “regular tax” means the regular tax liability for the taxable year (as defined in section 26(b)) reduced by the foreign tax credit allowable under section 27(a). 1 1 \u202fSee References in Text note below.  Such term shall not include any increase in tax under section 45(e)(11)(C), 49(b) or 50(a) or subsection (j) or (k) of section 42.\nSolely for purposes of this section, section 1301 (relating to averaging of farm and fishing income) shall not apply in computing the regular tax liability.\nFor provisions providing that certain credits are not allowable against the tax imposed by this section, see sections 30C(d)(2) and 38(c).\nAny increased amount determined under subparagraph (A) shall be rounded to the nearest multiple of $100.\nThe amounts described in this clause are the $109,400 amount in subparagraph (A)(i)(I), the $70,300 amount in subparagraph (A)(i)(II), and the $1,000,000 amount in subparagraph (A)(ii)(I).\nAny increased amount determined under clause (i) shall be rounded to the nearest multiple of $100.\nIn the case of any taxable year to which subparagraph (A) applies, no adjustment shall be made under paragraph (3) to any of the numbers which are substituted under subparagraph (A) and adjusted under this subparagraph.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSection 27, referred to in subsec. (c)(1), was amended generally by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(1)(A) ,  Mar. 23, 2018 ,  132 Stat. 1206 , and as so amended, no longer contains a subsec. (a) designation. Text of section 27 as amended by  Pub. L. 115–141  is identical to that of former section 27(a).\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nA prior section 55,  Pub. L. 95–600, title IV, §\u202f421(a) ,  Nov. 6, 1978 ,  92 Stat. 2871 ; amended  Pub. L. 96–222, title I, §\u202f104(a)(4)(A) –(D), (G), (H)(i), (ii), (viii),  Apr. 1, 1980 ,  94 Stat. 215–218 ;  Pub. L. 96–223, title II, §\u202f232(b)(2)(A) , (c)(2),  Apr. 2, 1980 ,  94 Stat. 276 , 277;  Pub. L. 96–603, §\u202f4(a) , (b),  Dec. 28, 1980 ,  94 Stat. 3513 , 3514;  Pub. L. 97–34, title I, §\u202f101(d)(1) , title II, §\u202f221(b)(1)(A), title III, §\u202f331(d)(1)(A),  Aug. 13, 1981 ,  95 Stat. 183 , 246, 294;  Pub. L. 97–248, title II, §\u202f201(a) ,  Sept. 3, 1982 ,  96 Stat. 411 ;  Pub. L. 97–354, §\u202f5(a)(13) ,  Oct. 19, 1982 ,  96 Stat. 1693 ;  Pub. L. 97–448, title I, §\u202f103(g)(2)(E) , title III, §§\u202f305(c), 306(a)(1)(B), (C),  Jan. 12, 1983 ,  96 Stat. 2379 , 2399, 2400;  Pub. L. 98–369, div. A, title IV , §§\u202f474(q), 491(d)(1), title VI, §\u202f612(e)(3), title VII, §\u202f711(a)(1), (4), (5),  July 18, 1984 ,  98 Stat. 838 , 849, 912, 942, 943;  Pub. L. 99–514, title XVIII, §\u202f1847(a) ,  Oct. 22, 1986 ,  100 Stat. 2856 , related to alternative minimum tax for taxpayers other than corporations, prior to the general revision of this part by  Pub. L. 99–514, §\u202f701(a) .\n2022—Subsec. (a).  Pub. L. 117–169, §\u202f10101(a)(4)(A) , substituted “There” for “In the case of a taxpayer other than a corporation, there” in introductory provisions.\nSubsec. (a)(2).  Pub. L. 117–169, §\u202f10101(a)(3) , inserted “plus, in the case of an applicable corporation, the tax imposed by section 59A” before period at end.\nSubsec. (b)(1).  Pub. L. 117–169, §\u202f10101(a)(4)(B)(i)(I) , substituted “Noncorporate taxpayers” for “Amount of tentative tax” in heading and inserted introductory provisions.\nSubsec. (b)(1)(D).  Pub. L. 117–169, §\u202f10101(a)(4)(B)(i)(II) , added subpar. (D).\nSubsec. (b)(2).  Pub. L. 117–169, §\u202f10101(a)(1) , amended par. (2) generally. Prior to amendment, par. (2) defined “alternative minimum taxable income”.\n2019—Subsec. (d)(4)(A)(iii).  Pub. L. 116–94  added cl. (iii).\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f12001(a) , substituted “In the case of a taxpayer other than a corporation, there” for “There” in introductory provisions.\nSubsec. (b)(1).  Pub. L. 115–97, §\u202f12001(b)(3)(A) , amended par. (1) generally. Prior to amendment, par. (1) related to amount of tentative tax.\nSubsec. (b)(3).  Pub. L. 115–97, §\u202f12001(b)(3)(B) , substituted “paragraph (1)(A)” for “paragraph (1)(A)(i)” in introductory provisions.\nSubsec. (c)(1).  Pub. L. 115–97, §\u202f12001(b)(4) , struck out “,\u2000the section 936 credit allowable under section 27(b), and the Puerto Rico economic activity credit under section 30A” after “section 27(a)”.\nSubsec. (d)(2).  Pub. L. 115–97, §\u202f12001(b)(5)(A) , redesignated par. (3) as (2) and struck out former par. (2). Prior to amendment, text of par. (2) read as follows: “In the case of a corporation, the term ‘exemption amount’ means $40,000.”\nSubsec. (d)(2)(D).  Pub. L. 115–97, §\u202f12001(b)(5)(B) , struck out subpar. (D) which read as follows: “$150,000 in the case of a taxpayer described in paragraph (2).”\nSubsec. (d)(3).  Pub. L. 115–97, §\u202f12001(b)(5)(A) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nSubsec. (d)(3)(B)(i).  Pub. L. 115–97, §\u202f12001(b)(5)(C)(i) , substituted “(b)(1)(A)” for “(b)(1)(A)(i)”.\nSubsec. (d)(3)(B)(iii).  Pub. L. 115–97, §\u202f12001(b)(5)(C)(ii) , substituted “paragraph (2)” for “paragraph (3)”.\nSubsec. (d)(4).  Pub. L. 115–97, §\u202f12003(a) , added par. (4). Former par. (4) redesignated (3).\nSubsec. (d)(4)(A)(ii).  Pub. L. 115–97, §\u202f11002(d)(1)(I) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (e).  Pub. L. 115–97, §\u202f12001(b)(6) , struck out subsec. (e) which related to exemption for small corporations.\n2015—Subsec. (b)(4).  Pub. L. 114–113  struck out par. (4) which related to the maximum rate of tax on qualified timber gain of corporations.\n2014—Subsec. (d)(4)(B)(ii).  Pub. L. 113–295, §\u202f202(c)(1) , inserted “subparagraphs (A), (B), and (D) of” before “paragraph (1)”.\nSubsec. (d)(4)(C).  Pub. L. 113–295, §\u202f202(c)(2) , substituted “increased amount” for “increase”.\n2013—Subsec. (b)(1)(A)(iii).  Pub. L. 112–240, §\u202f104(b)(2)(A) , substituted “by substituting 50 percent of the dollar amount otherwise applicable under subclause (I) and subclause (II) thereof.” for “by substituting ‘$87,500’ for ‘$175,000’ each place it appears.”\nSubsec. (b)(3)(B).  Pub. L. 112–240, §\u202f102(c)(2) , substituted “0 percent” for “5 percent (0 percent in the case of taxable years beginning after 2007)”.\nSubsec. (b)(3)(C) to (E).  Pub. L. 112–240, §\u202f102(b)(2) , added subpars. (C) and (D), redesignated former subpar. (D) as (E), and struck out former subpar. (C) which read as follows: “15 percent of the adjusted net capital gain (or, if less, taxable excess) in excess of the amount on which tax is determined under subparagraph (B), plus”.\nSubsec. (c)(3).  Pub. L. 112–240, §\u202f104(c)(2)(J) , substituted “30C(d)(2)” for “26(a), 30C(d)(2),”.\nSubsec. (d)(1)(A).  Pub. L. 112–240, §\u202f104(a)(1)(A) , in introductory provisions, substituted “$78,750” for “$45,000 ($72,450 in the case of taxable years beginning in 2010 and $74,450 in the case of taxable years beginning in 2011)”.\nSubsec. (d)(1)(B).  Pub. L. 112–240, §\u202f104(a)(1)(B) , in introductory provisions, substituted “$50,600” for “$33,750 ($47,450 in the case of taxable years beginning in 2010 and $48,450 in the case of taxable years beginning in 2011)”.\nSubsec. (d)(1)(C).  Pub. L. 112–240, §\u202f104(a)(1)(C) , substituted “subparagraph (A)” for “paragraph (1)(A)”.\nSubsec. (d)(3)(A).  Pub. L. 112–240, §\u202f104(b)(2)(B)(i) , struck out “or (2)” after “paragraph (1)(A)”.\nSubsec. (d)(3)(C), (D).  Pub. L. 112–240, §\u202f104(b)(2)(B)(ii) , (iii), added subpars. (C) and (D) and struck out former subpar. (C) which read as follows: “$75,000 in the case of a taxpayer described in subparagraph (C) or (D) of paragraph (1).”\nSubsec. (d)(4).  Pub. L. 112–240, §\u202f104(b)(1) , added par. (4).\n2010—Subsec. (d)(1)(A).  Pub. L. 111–312, §\u202f201(a)(1) , substituted “$72,450 in the case of taxable years beginning in 2010 and $74,450 in the case of taxable years beginning in 2011” for “$70,950 in the case of taxable years beginning in 2009”.\nSubsec. (d)(1)(B).  Pub. L. 111–312, §\u202f201(a)(2) , substituted “$47,450 in the case of taxable years beginning in 2010 and $48,450 in the case of taxable years beginning in 2011” for “$46,700 in the case of taxable years beginning in 2009”.\nSubsec. (e)(5).  Pub. L. 111–240  substituted “38(c)(6)(B)” for “38(c)(3)(B)”.\n2009—Subsec. (c)(3).  Pub. L. 111–5, §\u202f1144(b)(3) , struck out “30B(g)(2),” after “sections 26(a),”.\nPub. L. 111–5, §\u202f1142(b)(5) , struck out “30(b)(3),” after “sections 26(a),”.\nSubsec. (d)(1)(A).  Pub. L. 111–5, §\u202f1012(a)(1) , substituted “($70,950 in the case of taxable years beginning in 2009)” for “($69,950 in the case of taxable years beginning in 2008)”.\nSubsec. (d)(1)(B).  Pub. L. 111–5, §\u202f1012(a)(2) , substituted “($46,700 in the case of taxable years beginning in 2009)” for “($46,200 in the case of taxable years beginning in 2008)”.\n2008—Subsec. (b)(4).  Pub. L. 110–246, §\u202f15311(b) , added par. (4).\nSubsec. (d)(1)(A).  Pub. L. 110–343, §\u202f102(a)(1) , substituted “($69,950 in the case of taxable years beginning in 2008)” for “($66,250 in the case of taxable years beginning in 2007)”.\nSubsec. (d)(1)(B).  Pub. L. 110–343, §\u202f102(a)(2) , substituted “($46,200 in the case of taxable years beginning in 2008)” for “($44,350 in the case of taxable years beginning in 2007)”.\n2007—Subsec. (d)(1)(A).  Pub. L. 110–166, §\u202f2(a)(1) , substituted “($66,250 in the case of taxable years beginning in 2007)” for “($62,550 in the case of taxable years beginning in 2006)”.\nSubsec. (d)(1)(B).  Pub. L. 110–166, §\u202f2(a)(2) , substituted “($44,350 in the case of taxable years beginning in 2007)” for “($42,500 in the case of taxable years beginning in 2006)”.\n2006—Subsec. (d)(1)(A).  Pub. L. 109–222, §\u202f301(a)(1) , substituted “$62,550 in the case of taxable years beginning in 2006” for “$58,000 in the case of taxable years beginning in 2003, 2004, and 2005”.\nSubsec. (d)(1)(B).  Pub. L. 109–222, §\u202f301(a)(2) , substituted “$42,500 in the case of taxable years beginning in 2006” for “$40,250 in the case of taxable years beginning in 2003, 2004, and 2005”.\n2005—Subsec. (c)(1).  Pub. L. 109–58, §\u202f1302(b) , which directed amendment of par. (1) by inserting “45(e)(11)(C),” after “section” in last sentence, was executed by making the insertion after “section” the first place it appeared in last sentence, to reflect the probable intent of Congress.\nSubsec. (c)(2).  Pub. L. 109–135, §\u202f403(h) , substituted “regular tax liability” for “regular tax”.\nPub. L. 109–58, §\u202f1342(b)(3) , which directed amendment of par. (2) by inserting “30C(d)(2),” after “30B(g)(2),”, was repealed by  Pub. L. 109–135, §\u202f412(p)(3) .\nPub. L. 109–58, §\u202f1341(b)(3) , which directed amendment of par. (2) by inserting “30B(g)(2),” after “30(b)(2),”, was repealed by  Pub. L. 109–135, §\u202f412(p)(2) .\nSubsec. (c)(3).  Pub. L. 109–135, §\u202f412(p)(1) , inserted “30B(g)(2), 30C(d)(2),” after “30(b)(3),”.\nPub. L. 109–58, §\u202f1322(a)(3)(H) , struck out “29(b)(6),” after “26(a),”.\n2004—Subsec. (b)(3)(B).  Pub. L. 108–311, §\u202f406(d) , substituted “an amount equal to the excess described in” for “the amount on which a tax is determined under”.\nSubsec. (c)(2), (3).  Pub. L. 108–357  added par. (2) and redesignated former par. (2) as (3).\nSubsec. (d)(1)(A), (B).  Pub. L. 108–311, §\u202f103(a) , substituted “2003, 2004, and 2005” for “2003 and 2004”.\n2003—Subsec. (b)(3).  Pub. L. 108–27, §\u202f301(b)(2) , struck out first sentence of concluding provisions which read as follows: “In the case of taxable years beginning after  December 31, 2000 , rules similar to the rules of section 1(h)(2) shall apply for purposes of subparagraphs (B) and (C).”\nSubsec. (b)(3)(B).  Pub. L. 108–27, §\u202f301(a)(1) , substituted “5 percent (0 percent in the case of taxable years beginning after 2007)” for “10 percent”.\nSubsec. (b)(3)(C).  Pub. L. 108–27, §\u202f301(a)(2)(B) , substituted “15 percent” for “20 percent”.\nSubsec. (d)(1)(A).  Pub. L. 108–27, §\u202f106(a)(1) , substituted “$58,000 in the case of taxable years beginning in 2003 and 2004” for “$49,000 in the case of taxable years beginning in 2001, 2002, 2003, and 2004”.\nSubsec. (d)(1)(B).  Pub. L. 108–27, §\u202f106(a)(2) , substituted “$40,250 in the case of taxable years beginning in 2003 and 2004” for “$35,750 in the case of taxable years beginning in 2001, 2002, 2003, and 2004”.\n2001—Subsec. (d)(1)(A).  Pub. L. 107–16, §\u202f701(a)(1) , substituted “$45,000 ($49,000 in the case of taxable years beginning in 2001, 2002, 2003, and 2004)” for “$45,000”.\nSubsec. (d)(1)(B).  Pub. L. 107–16, §\u202f701(b)(1) , struck out “and” at end.\nPub. L. 107–16, §\u202f701(a)(2) , substituted “$33,750 ($35,750 in the case of taxable years beginning in 2001, 2002, 2003, and 2004)” for “$33,750”.\nSubsec. (d)(1)(C), (D).  Pub. L. 107–16, §\u202f701(b)(1) , added subpars. (C) and (D) and struck out former subpar. (C) which read as follows: “$22,500 in the case of—\n“(i) a married individual who files a separate return, or\n“(ii) an estate or trust.”\nSubsec. (d)(3).  Pub. L. 107–16, §\u202f701(b)(3) , in concluding provisions, substituted “paragraph (1)(C)” for “paragraph (1)(C)(i)” and “the minimum amount of such income (as so determined) for which the exemption amount under paragraph (1)(C) is zero, or (ii) such exemption amount (determined without regard to this paragraph)” for “$165,000 or (ii) $22,500”.\nSubsec. (d)(3)(C).  Pub. L. 107–16, §\u202f701(b)(2) , substituted “subparagraph (C) or (D) of paragraph (1)” for “paragraph (1)(C)”.\n1998—Subsec. (b)(3).  Pub. L. 105–206, §\u202f6005(d)(2) , reenacted par. heading without change and amended text of par. (3) generally. Prior to amendment, text read as follows: “The amount determined under the first sentence of paragraph (1)(A)(i) shall not exceed the sum of—\n“(A) the amount determined under such first sentence computed at the rates and in the same manner as if this paragraph had not been enacted on the taxable excess reduced by the lesser of—\n“(i) the net capital gain, or\n“(ii) the sum of—\n“(I) the adjusted net capital gain, plus\n“(II) the unrecaptured section 1250 gain, plus\n“(B) 25 percent of the lesser of—\n“(i) the unrecaptured section 1250 gain, or\n“(ii) the amount of taxable excess in excess of the sum of—\n“(I) the adjusted net capital gain, plus\n“(II) the amount on which a tax is determined under subparagraph (A), plus\n“(C) 10 percent of so much of the taxpayer’s adjusted net capital gain (or, if less, taxable excess) as does not exceed the amount on which a tax is determined under section 1(h)(1)(D), plus\n“(D) 20 percent of the taxpayer’s adjusted net capital gain (or, if less, taxable excess) in excess of the amount on which tax is determined under subparagraph (C).\nIn the case of taxable years beginning after  December 31, 2000 , rules similar to the rules of section 1(h)(2) shall apply for purposes of subparagraphs (C) and (D). Terms used in this paragraph which are also used in section 1(h) shall have the respective meanings given such terms by section 1(h).”\nSubsec. (e)(1).  Pub. L. 105–206, §\u202f6006(a) , reenacted par. heading without change and amended text of par. (1) generally. Prior to amendment, text read as follows: “The tentative minimum tax of a corporation shall be zero for any taxable year if—\n“(A) such corporation met the $5,000,000 gross receipts test of section 448(c) for its first taxable year beginning after  December 31, 1996 , and\n“(B) such corporation would meet such test for the taxable year and all prior taxable years beginning after such first taxable year if such test were applied by substituting ‘$7,500,000’ for ‘$5,000,000’.”\n1997—Subsec. (b)(1)(A)(ii).  Pub. L. 105–34, §\u202f311(b)(2)(A) , substituted “this subsection” for “clause (i)”.\nSubsec. (b)(3).  Pub. L. 105–34, §\u202f311(b)(1) , added par. (3).\nSubsec. (c)(1).  Pub. L. 105–34, §\u202f1601(f)(1)(C) , substituted “Puerto Rico” for “Puerto Rican”.\nSubsec. (e).  Pub. L. 105–34, §\u202f401(a) , added subsec. (e).\n1996—Subsec. (c)(1).  Pub. L. 104–188, §\u202f1601(b)(2)(A) , substituted “,\u2000the section 936 credit allowable under section 27(b), and the Puerto Rican economic activity credit under section 30A” for “and the section 936 credit allowable under section 27(b)”.\nPub. L. 104–188, §\u202f1401(b)(3) , struck out “shall not include any tax imposed by section 402(d) and” before “shall not include any increase in tax under section 49(b)”.\nSubsec. (c)(2).  Pub. L. 104–188, §\u202f1205(d)(6) , struck out “28(d)(2),” after “26(a),”.\n1993—Subsec. (b)(1).  Pub. L. 103–66, §\u202f13203(a) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The tentative minimum tax for the taxable year is—\n“(A) 20 percent (24 percent in the case of a taxpayer other than a corporation) of so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount, reduced by\n“(B) the alternative minimum tax foreign tax credit for the taxable year.”\nSubsec. (d)(1).  Pub. L. 103–66, §\u202f13203(b) , substituted “$45,000” for “$40,000” in subpar. (A), “$33,750” for “$30,000” in subpar. (B), and “$22,500” for “$20,000” in subpar. (C).\nSubsec. (d)(3).  Pub. L. 103–66, §\u202f13203(c)(1) , substituted “$165,000 or (ii) $22,500” for “$155,000 or (ii) $20,000” in last sentence.\n1992—Subsec. (c)(1).  Pub. L. 102–318  substituted “402(d)” for “402(e)”.\nSubsec. (c)(2).  Pub. L. 102–486  substituted “29(b)(6), 30(b)(3),” for “29(b)(5),”.\n1990—Subsec. (b)(1)(A).  Pub. L. 101–508, §\u202f11102(a) , substituted “24 percent” for “21 percent”.\nSubsec. (c)(1).  Pub. L. 101–508, §\u202f11813(b)(5) , substituted “section 49(b) or 50(a)” for “section 47”.\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1007(a)(2) , inserted at end “If a taxpayer is subject to the regular tax, such taxpayer shall be subject to the tax imposed by this section (and, if the regular tax is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of the preceding sentence).”\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f1007(a)(1) , inserted “and the section 936 credit allowable under section 27(b)” before period at end of first sentence.\nPub. L. 100–647, §\u202f1002 ( l )(27), substituted “subsection (j) or (k) of section 42” for “section 42(j)”.\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f1007(a)(3) , inserted at end “In the case of a taxpayer described in paragraph (1)(C)(i), alternative minimum taxable income shall be increased by the lesser of (i) 25 percent of the excess of alternative minimum taxable income (determined without regard to this sentence) over $155,000, or (ii) $20,000.”\n1986—Subsec. (c)(1).  Pub. L. 99–514, §\u202f252(c) , inserted “or section 42(j)”.\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 116–94  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 501(c)(2) of Pub. L. 116–94 , set out in a note under  section 1 of this title .\nAmendment by  section 11002(d)(1)(I) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by section 12001(a), (b)(3)(A), (B), (4)–(6) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 115–97, title I, §\u202f12003(b) ,  Dec. 22, 2017 ,  131 Stat. 2096 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title III, §\u202f334(c) ,  Dec. 18, 2015 ,  129 Stat. 3109 , provided that:  “The amendments made by this section [amending this section and  section 1201 of this title ] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 113–295, div. A, title II, §\u202f202(f) ,  Dec. 19, 2014 ,  128 Stat. 4024 , provided that:  “The amendments made by this section [amending this section and sections 168, 642, 911, and 6431 of this title] shall take effect as if included in the provision of the American Taxpayer Relief Act of 2012 [ Pub. L. 112–240 ] to which they relate.”\nAmendment by section 102(b)(2), (c)(2) of  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 102(d)(1) of Pub. L. 112–240 , set out as a note under  section 1 of this title .\nAmendment by section 104(a), (b), (c)(2)(J) of  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nPub. L. 111–312, title II, §\u202f201(b) ,  Dec. 17, 2010 ,  124 Stat. 3299 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 111–5, div. B, title I, §\u202f1012(b) ,  Feb. 17, 2009 ,  123 Stat. 319 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  section 1142(b)(5) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1144(b)(3) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 110–343, div. C, title I, §\u202f102(b) ,  Oct. 3, 2008 ,  122 Stat. 3863 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15311(d) ,  May 22, 2008 ,  122 Stat. 1503 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15311(d),  June 18, 2008 ,  122 Stat. 1664 , 2265, provided that:  “The amendments made by this section [amending this section and sections 857 and 1201 of this title] shall apply to taxable years ending after the date of enactment [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–166, §\u202f2(b) ,  Dec. 26, 2007 ,  121 Stat. 2461 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–222, title III, §\u202f301(b) ,  May 17, 2006 ,  120 Stat. 353 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nAmendment by  section 403(h) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  section 1302(b) of Pub. L. 109–58  applicable to taxable years of cooperative organizations ending after  Aug. 8, 2005 , see  section 1302(c) of Pub. L. 109–58 , set out as a note under  section 45 of this title .\nAmendment by  section 1322(a)(3)(H) of Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nAmendment by  section 1342(b)(3) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1342(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 30C of this title .\nAmendment by  section 1341(b)(3) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1341(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 30B of this title .\nPub. L. 108–357, title III, §\u202f314(c) ,  Oct. 22, 2004 ,  118 Stat. 1469 , provided that:  “The amendments made by this section [amending this section and  section 1301 of this title ] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 108–311, title I, §\u202f103(b) ,  Oct. 4, 2004 ,  118 Stat. 1168 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by  section 103(a) of Pub. L. 108–311  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , to the same extent and in the same manner as the provision of such Act to which such amendment relates, see  section 105 of Pub. L. 108–311 , set out as a note under  section 1 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nPub. L. 108–311, title IV, §\u202f406(h) ,  Oct. 4, 2004 ,  118 Stat. 1190 , provided that:  “The amendments made by this section [amending this section and sections 246, 529, 530, 901, 1259, and 1397E of this title] shall take effect as if included in the provisions of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ] to which they relate.”\nPub. L. 108–27, title I, §\u202f106(b) ,  May 28, 2003 ,  117 Stat. 755 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nAmendment by  section 106(a) of Pub. L. 108–27  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , to the same extent and in the same manner as the provision of such Act to which such amendment relates, see  section 107 of Pub. L. 108–27 , set out as a note under  section 1 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by section 301(a)(1), (2)(B), (b)(2) of  Pub. L. 108–27  applicable to taxable years ending on or after  May 6, 2003 , see  section 301(d) of Pub. L. 108–27 , set out as a note under  section 1 of this title .\nPub. L. 107–16, title VII, §\u202f701(c) ,  June 7, 2001 ,  115 Stat. 148 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2000 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by section 311(b)(1), (2)(A) of  Pub. L. 105–34  applicable to taxable years ending after  May 6, 1997 , see  section 311(d) of Pub. L. 105–34 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title IV, §\u202f401(b) ,  Aug. 5, 1997 ,  111 Stat. 844 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by  section 1601(f)(1)(C) of Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by  section 1205(d)(6) of Pub. L. 104–188  applicable to amounts paid or incurred in taxable years ending after  June 30, 1996 , see  section 1205(e) of Pub. L. 104–188 , set out as a note under  section 45K of this title .\nAmendment by  section 1401(b)(3) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nPub. L. 104–188, title I, §\u202f1601(c) ,  Aug. 20, 1996 ,  110 Stat. 1833 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 30A of this title  and amending this section and sections 56, 59, and 936 of this title] shall apply to taxable years beginning after  December 31, 1995 . \n \n “(2)   Special rule for qualified possession source investment income .— The amendments made by this section shall not apply to qualified possession source investment income received or accrued before  July 1, 1996 , without regard to the taxable year in which received or accrued. \n \n “(3)   Special transition rule for payment of estimated tax installment .— In determining the amount of any installment due under section 6655 of the Internal Revenue Code of 1986 after the date of the enactment of this Act [ Aug. 20, 1996 ] and before  October 1, 1996 , only ½ of any increase in tax (for the taxable year for which such installment is made) by reason of the amendments made by subsections (a) and (b) [enacting  section 30A of this title  and amending this section and sections 56, 59, and 936 of this title] shall be taken into account. Any reduction in such installment by reason of the preceding sentence shall be recaptured by increasing the next required installment for such year by the amount of such reduction.”\nPub. L. 103–66, title XIII, §\u202f13203(d) ,  Aug. 10, 1993 ,  107 Stat. 462 , provided that:  “The amendments made by this section [amending this section and  section 897 of this title ] shall apply to taxable years beginning after  December 31, 1992 .”\nAmendment by  Pub. L. 102–486  applicable to property placed in service after  June 30, 1993 , see  section 1913(c) of Pub. L. 102–486 , set out as a note under  section 53 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nPub. L. 101–508, title XI, §\u202f11102(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–406 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nAmendment by  section 11813(b)(5) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by section 1002( l )(27) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1007(a)(3) ,  Nov. 10, 1988 ,  102 Stat. 3428 , provided that the amendment made by that section is effective with respect to taxable years ending after  Nov. 10, 1988 .\nAmendment by  Pub. L. 99–514  applicable to buildings placed in service after  Dec. 31, 1986 , in taxable years ending after such date, see  section 252(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 42 of this title .\nPub. L. 99–514, title VII, §\u202f701(f) ,  Oct. 22, 1986 ,  100 Stat. 2343 , as amended by  Pub. L. 100–647, title I, §\u202f1007(f)(2) , (3),  Nov. 10, 1988 ,  102 Stat. 3433 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and sections 53 and 56 to 59 of this title and amending sections 5, 12, 26, 28, 29, 38, 48, 173, 174, 263, 381, 443, 703, 882, 897, 904, 936, 1016, 1363, 1366, 1561, 6154, 6425, and 6655 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Adjustment of net operating loss.— “(A)   Individuals .— In the case of a net operating loss of an individual for a taxable year beginning after  December 31, 1982 , and before  January 1, 1987 , for purposes of determining the amount of such loss which may be carried to a taxable year beginning after  December 31, 1986 , for purposes of the minimum tax, such loss shall be adjusted in the manner provided in section 55(d)(2) of the Internal Revenue Code of 1954 [now 1986] as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(B)   Corporations .— If the minimum tax of a corporation was deferred under section 56(b) of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) for any taxable year beginning before  January 1, 1987 , and the amount of such tax has not been paid for any taxable year beginning before  January 1, 1987 , the amount of the net operating loss carryovers of such corporation which may be carried to taxable years beginning after  December 31, 1986 , for purposes of the minimum tax shall be reduced by the amount of tax preferences a tax on which was so deferred. \n \n \n “(3)   Installment sales .— Section 56(a)(6) of the Internal Revenue Code of 1986 (as amended by this section) shall not apply to any disposition to which the amendments made by section 811 of this Act [enacting  section 453C of this title ] (relating to allocation of dealer’s indebtedness to installment obligations) do not apply by reason of section 811(c)(2) of this Act [enacting provisions set out as a note under  section 453C of this title ]. \n \n “(4)   Exception for charitable contributions before  august 16, 1986 .— Section 57(a)(6) of the Internal Revenue Code of 1986 (as amended by this section) shall not apply to any deduction attributable to contributions made before  August 16, 1986 . \n \n “(5)   Book income.— “(A)   In general .— In the case of a corporation to which this paragraph applies, the amount of any increase for any taxable year under [former] section 56(c)(1)(A) of the Internal Revenue Code of 1986 (as added by this section) shall be reduced (but not below zero) by the excess (if any) of— “(i)  50 percent of the excess of taxable income for the 5-taxable year period ending with the taxable year preceding the 1st taxable year to which such section applies over the adjusted net book income for such period, over \n \n “(ii)  the aggregate amounts taken into account under this paragraph for preceding taxable years. \n \n \n “(B)   Taxpayer to whom paragraph applies .— This paragraph applies to a taxpayer which was incorporated in Delaware on  May 31, 1912 . \n \n “(C)   Terms .— Any term used in this paragraph which is used in section 56 of such Code (as so added) shall have the same meaning as when used in such section. \n \n \n “(6)   Certain public utility.— “(A)  In the case of investment tax credits described in subparagraph (B) or (C), subsection 38(c)(3)(A)(ii) of the Internal Revenue Code of 1986 shall be applied by substituting ‘25 percent’ for ‘75 percent’, and section 38(c)(3)(B) of the Internal Revenue Code of 1986 shall be applied by substituting ‘75 percent’ for ‘25 percent’. \n \n “(B)  If, on  September 25, 1985 , a regulated electric utility owned an undivided interest, within the range of 1,111 and 1,149, in the ‘maximum dependable capacity, net, megawatts electric’ of an electric generating unit located in Illinois or Mississippi for which a binding written contract was in effect on  December 31, 1980 , then any investment tax credit with respect to such unit shall be described in this subparagraph. The aggregate amount of investment tax credits with respect to the unit in Mississippi allowed solely by reason of being described in this subparagraph shall not exceed $141,000,000. \n \n “(C)  If, on  September 25, 1985 , a regulated electric utility owned an undivided interest, within the range of 1,104 and 1,111, in the ‘maximum dependable capacity, net, megawatts electric’ of an electric generating unit located in Louisiana for which a binding written contract was in effect on  December 31, 1980 , then any investment tax credit of such electric utility shall be described in this subparagraph. The aggregate amount of investment tax credits allowed solely by reason of being described by this subparagraph shall not exceed $20,000,000. \n \n \n “(7)   Agreement vessel depreciation adjustment.— “(A)  For purposes of part VI of subchapter A of chapter 1 of the Internal Revenue Code of 1986, in the case of a qualified taxpayer, alternative minimum taxable income for the taxable year shall be reduced by an amount equal to the agreement vessel depreciation adjustment. \n \n “(B)  For purposes of this paragraph, the agreement vessel depreciation adjustment shall be an amount equal to the depreciation deduction that would have been allowable for such year under section 167 of such Code with respect to agreement vessels placed in service before  January 1, 1987 , if the basis of such vessels had not been reduced under section 607 of the Merchant Marine Act of 1936 [see  46 U.S.C. 53510 ], as amended, and if depreciation with respect to such vessel had been computed using the 25-year straight-line method. The aggregate amount by which basis of a qualified taxpayer is treated as not reduced by reason of this subparagraph shall not exceed $100,000,000. \n \n “(C)  For purposes of this paragraph, the term ‘qualified taxpayer’ means a parent corporation incorporated in the State of Delaware on  December 1, 1972 , and engaged in water transportation, and includes any other corporation which is a member of the affiliated group of which the parent corporation is the common parent. No taxpayer shall be treated as a qualified corporation for any taxable year beginning after  December 31, 1991 .”\nFor provisions that nothing in amendment by  section 11813(b)(5) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1007(f)(1) ,  Nov. 10, 1988 ,  102 Stat. 3433 , provided that:  “In the case of the taxable year of an estate or trust which begins before  January 1, 1987 , and ends on or after such date, the items of tax preference apportioned to any beneficiary of such estate or trust under section 58(c) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]) shall be taken into account for purposes of determining the amount of the tax imposed by section 55 of the Internal Revenue Code of 1986 (as amended by the Tax Reform Act of 1986 [ Pub. L. 99–514 ]) on such beneficiary for such beneficiary’s taxable year in which such taxable year of the estate or trust ends.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor applicability of amendment by  section 701(a) of Pub. L. 99–514  [enacting this section] notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 94–455, title XXI, §\u202f2123 ,  Oct. 4, 1976 ,  90 Stat. 1915 , as amended by  Pub. L. 98–369, div. A, title IV, §\u202f441(b)(1) ,  July 18, 1984 ,  98 Stat. 815 , provided that:  “The Secretary of the Treasury shall publish annually information on the amount of tax paid by individual taxpayers with high total incomes. Total income for this purpose is to be calculated and set forth by adding to adjusted gross income any items of tax preference excluded from, or deducted in arriving at, adjusted gross income, and by subtracting any investment expenses incurred in the production of such income to the extent of the investment income. These data are to include the number of such individuals with total income over $200,000 who owe no Federal income tax (after credits) and the deductions, exclusions, or credits used by them to avoid tax.”\n[ Pub. L. 98–369, div. A, title IV, §\u202f441(b)(2) ,  July 18, 1984 ,  98 Stat. 815 , provided that:  “The amendment made by paragraph (1) [amending  section 2123 of Pub. L. 94–455 , set out above] shall apply to information published after the date of the enactment of this Act [ July 18, 1984 ].” \n]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ALTERNATIVE MINIMUM TAX'},
  'content': 'Except as provided in clause (ii), the depreciation deduction allowable under section 167 with respect to any tangible property placed in service after  December 31, 1986 , shall be determined under the alternative system of section 168(g). In the case of property placed in service after  December 31, 1998 , the preceding sentence shall not apply but clause (ii) shall continue to apply.\nThis paragraph shall not apply to property described in paragraph (1), (2), (3), or (4) of section 168(f), or in section 168(e)(3)(C)(iv).\nThis paragraph shall not apply to property placed in service after  December 31, 1986 , to which the amendments made by section 201 of the Tax Reform Act of 1986 do not apply by reason of section 203, 204, or 251(d) of such Act.\nThis paragraph shall apply to any property to which the amendments made by section 201 of the Tax Reform Act of 1986 apply by reason of an election under section 203(a)(1)(B) of such Act without regard to the requirement of subparagraph (A) that the property be placed in service after  December 31, 1986 .\nWith respect to public utility property described in section 168(i)(10), the Secretary shall prescribe the requirements of a normalization method of accounting for this section.\nWith respect to each mine or other natural deposit (other than an oil, gas, or geothermal well) of the taxpayer, the amount allowable as a deduction under section 616(a) or 617(a) (determined without regard to section 291(b)) in computing the regular tax for costs paid or incurred after  December 31, 1986 , shall be capitalized and amortized ratably over the 10-year period beginning with the taxable year in which the expenditures were made.\nIn the case of any long-term contract entered into by the taxpayer on or after  March 1, 1986 , the taxable income from such contract shall be determined under the percentage of completion method of accounting (as modified by section 460(b)). For purposes of the preceding sentence, in the case of a contract described in section 460(e)(1), the percentage of the contract completed shall be determined under section 460(b)(1) by using the simplified procedures for allocation of costs prescribed under section 460(b)(3). The first sentence of this paragraph shall not apply to any home construction contract (as defined in section 460(e)(6)). 1 1 \u202fSee References in Text note below.\nThe alternative tax net operating loss deduction shall be allowed in lieu of the net operating loss deduction allowed under section 172.\nIn the case of any certified pollution control facility placed in service after  December 31, 1986 , the deduction allowable under section 169 (without regard to section 291) shall be determined under the alternative system of section 168(g). In the case of such a facility placed in service after  December 31, 1998 , such deduction shall be determined under section 168 using the straight line method.\nThe adjusted basis of any property to which paragraph (1) or (5) applies (or with respect to which there are any expenditures to which paragraph (2) or subsection (b)(2) applies) shall be determined on the basis of the treatment prescribed in paragraph (1), (2), or (5), or subsection (b)(2), whichever applies.\nSection 87 (relating to alcohol fuel credit) shall not apply.\nNo recovery of any tax to which subparagraph (A)(ii) applied shall be included in gross income for purposes of determining alternative minimum taxable income.\nThe standard deduction under section 63(c), the deduction for personal exemptions under section 151, and the deduction under section 642(b) shall not be allowed.\nSection 68 shall not apply.\nIf the taxpayer materially participates (within the meaning of section 469(h)) in an activity, this paragraph shall not apply to any amount allowable as a deduction under section 174(a) for expenditures paid or incurred in connection with such activity.\nSection 421 shall not apply to the transfer of stock acquired pursuant to the exercise of an incentive stock option (as defined in section 422). Section 422(c)(2) shall apply in any case where the disposition and the inclusion for purposes of this part are within the same taxable year and such section shall not apply in any other case. The adjusted basis of any stock so acquired shall be determined on the basis of the treatment prescribed by this paragraph.\nIn the case of loss years beginning before  January 1, 1987 , the amount of the net operating loss which may be carried over to taxable years beginning after  December 31, 1986 , for purposes of paragraph (2), shall be equal to the amount which may be carried from the loss year to the first taxable year of the taxpayer beginning after  December 31, 1986 .\nSection 201 of the Tax Reform Act of 1986, referred to in subsecs. (a)(1)(C) and (g)(4)(A)(ii), is  section 201 of Pub. L. 99–514 , which amended sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title.\nSections 203, 204, and 251(d) of such Act, referred to in subsec. (a)(1)(C), are sections 203, 204, and 251(d) of the Tax Reform Act of 1986,  Pub. L. 99–514 . Sections 203 and 204 are set out as notes under  section 168 of this title . Section 251(d) is set out as a note under  section 46 of this title .\nSection 460(e)(6), referred to in subsec. (a)(3), was redesignated section 460(e)(5) by  Pub. L. 115–97, title I, §\u202f13102(d)(2) ,  Dec. 22, 2017 ,  131 Stat. 2104 .\nSection 199, referred to in subsec. (d)(1)(A)(i)(II), (ii)(II), was repealed by  Pub. L. 115–97, title I, §\u202f13305(a) ,  Dec. 22, 2017 ,  131 Stat. 2126 .\nSection 172(b)(1)(H) (as in effect before its repeal by the Tax Increase Prevention Act of 2014), referred to subsec. (d)(1)(A)(ii)(I), means subpar. (H) of  section 172(b)(1) of this title  prior to its repeal by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(30)(A)(i) ,  Dec. 19, 2014 ,  128 Stat. 4041 .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (g)(4)(A)(iii), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nThe FSC Repeal and Extraterritorial Income Exclusion Act of 2000, referred to in subsec. (g)(4)(C)(ii)(I), is  Pub. L. 106–519 ,  Nov. 15, 2000 ,  114 Stat. 2423 . For complete classification of this Act to the Code, see Short Title of 2000 Amendments note set out under  section 1 of this title  and Tables.\nA prior section 56, added  Pub. L. 91–172, title III, §\u202f301(a) ,  Dec. 30, 1969 ,  83 Stat. 580 ; amended  Pub. L. 91–614, title V, §\u202f501(a) ,  Dec. 31, 1970 ,  84 Stat. 1846 ;  Pub. L. 92–178, title VI, §\u202f601(c)(4) , (5),  Dec. 10, 1971 ,  85 Stat. 558 ;  Pub. L. 93–406, title II , §§\u202f2001(g)(2)(D), 2002(g)(4), 2005(c)(7),  Sept. 2, 1974 ,  88 Stat. 957 , 968, 991;  Pub. L. 94–12, title II , §§\u202f203(b)(2), (3), 208(d)(2), (3),  Mar. 29, 1975 ,  89 Stat. 30 , 35;  Pub. L. 94–455, title III, §\u202f301(a) , (b), (c)(4)(B),  Oct. 4, 1976 ,  90 Stat. 1549 , 1552;  Pub. L. 95–30, title II, §\u202f202(d)(2) ,  May 23, 1977 ,  91 Stat. 148 ;  Pub. L. 95–600, title I, §\u202f141(d) ,  Nov. 6, 1978 ,  92 Stat. 2794 ;  Pub. L. 95–618, title I, §\u202f101(b)(2) ,  Nov. 9, 1978 ,  92 Stat. 3179 ;  Pub. L. 96–222, title I, §\u202f101(a)(7)(L)(iii)(IV) ,  Apr. 1, 1980 ,  94 Stat. 200 ;  Pub. L. 97–34, title III, §\u202f331(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 293 ;  Pub. L. 97–248, title II, §\u202f201(d)(1) , formerly §\u202f201(c)(1),  Sept. 3, 1982 ,  96 Stat. 419 , renumbered §\u202f201(d)(1),  Pub. L. 97–448, title III, §\u202f306(a)(1)(A)(i) ,  Jan. 12, 1983 ,  96 Stat. 2400 ;  Pub. L. 98–369, div. A, title IV, §\u202f474(r)(1) ,  July 18, 1984 ,  98 Stat. 839 ;  Pub. L. 99–514, title XI, §\u202f1171(b)(3) ,  Oct. 22, 1986 ,  100 Stat. 2513 , related to a corporate minimum tax, prior to the general revision of this part by  Pub. L. 99–514, §\u202f701(a) .\n2019—Subsec. (b)(1)(B) to (F).  Pub. L. 116–94  redesignated subpars. (C) to (F) as (B) to (E), respectively, and struck out former subpar. (B). Prior to amendment, text of subpar. (B) read as follows: “In determining the amount allowable as a deduction under section 213, subsection (a) of section 213 shall be applied without regard to subsection (f) of such section. This subparagraph shall not apply to taxable years beginning after  December 31, 2016 , and ending before  January 1, 2019 ”.\n2018—Subsec. (b)(1)(E).  Pub. L. 115–141, §\u202f401(b)(7) , struck out at end “The preceding sentence shall not apply to so much of the standard deduction as is determined under subparagraphs (D) and (E) of section 63(c)(1).”\nSubsec. (d)(1)(A)(ii)(I).  Pub. L. 115–141, §\u202f401(b)(8) , inserted “(as in effect before its repeal by the Tax Increase Prevention Act of 2014)” after “section 172(b)(1)(H)”.\n2017—Subsec. (b)(1)(B).  Pub. L. 115–97, §\u202f11027(b) , inserted at end “This subparagraph shall not apply to taxable years beginning after  December 31, 2016 , and ending before  January 1, 2019 ”.\nSubsec. (b)(2)(C), (D).  Pub. L. 115–97, §\u202f12001(b)(7) , redesignated subpar. (D) as (C) and struck out former subpar. (C). Prior to amendment, text of subpar. (C) read as follows: “In the case of circulation expenditures described in section 173, the adjustments provided in this paragraph shall apply also to a personal holding company (as defined in section 542).”\nSubsec. (c).  Pub. L. 115–97, §\u202f12001(b)(8)(A) , struck out subsec. (c) which related to adjustments applicable to corporations.\nSubsec. (g).  Pub. L. 115–97, §\u202f12001(b)(8)(A) , struck out subsec. (g) which related to adjustments based on adjusted current earnings.\n2014—Subsec. (b)(1)(C)(ii) to (v).  Pub. L. 113–295, §\u202f221(a)(25)(B) , redesignated cls. (iii) to (v) as (ii) to (iv), respectively, and struck out former cl. (ii) which read as follows: “sections 163(d)(6) and 163(h)(5) (relating to phase-ins) shall not apply,”.\nSubsec. (d)(3).  Pub. L. 113–295, §\u202f221(a)(30)(C) , struck out par. (3). Text read as follows: “In the case of a taxpayer which has a qualified disaster loss (as defined by section 172(b)(1)(J)) for the taxable year, paragraph (1) shall be applied by increasing the amount determined under subparagraph (A)(ii)(I) thereof by the sum of the carrybacks and carryovers of such loss.”\nSubsec. (g)(4)(C)(iv).  Pub. L. 113–295, §\u202f215(b) , substituted “an organization to which part I of subchapter T (relating to tax treatment of cooperatives) applies which is engaged in the marketing of agricultural or horticultural products” for “a cooperative described in section 927(a)(4)”. See 2007 Amendment note below.\nSubsec. (g)(4)(F)(ii).  Pub. L. 113–295, §\u202f221(a)(9) , substituted “Clause (i)” for “In the case of any taxable year beginning after  December 31, 1992 , clause (i)”.\n2010—Subsec. (b)(1)(B).  Pub. L. 111–148  substituted “without regard to subsection (f) of such section” for “by substituting ‘10 percent’ for ‘7.5 percent’\u202f”.\n2009—Subsec. (b)(1)(E).  Pub. L. 111–5, §\u202f1008(d) , substituted “subparagraphs (D) and (E) of section 63(c)(1)” for “section 63(c)(1)(D)”.\nSubsec. (d)(1)(A)(ii)(I).  Pub. L. 111–92  amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “the amount of such deduction attributable to the sum of carrybacks of net operating losses from taxable years ending during 2001 or 2002 and carryovers of net operating losses to taxable years ending during 2001 and 2002, or”.\nSubsec. (g)(4)(B)(iv).  Pub. L. 111–5, §\u202f1503(b) , added cl. (iv).\n2008—Subsec. (b)(1)(E).  Pub. L. 110–343, §\u202f706(b)(3) , inserted at end “The preceding sentence shall not apply to so much of the standard deduction as is determined under section 63(c)(1)(D).”\nSubsec. (d)(3).  Pub. L. 110–343, §\u202f708(c) , added par. (3).\nSubsec. (g)(4)(B)(iii).  Pub. L. 110–289  added cl. (iii).\n2007—Subsec. (g)(4)(C)(ii)(I).  Pub. L. 110–172, §\u202f11(g)(1) , substituted “921 (as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)” for “921”.\nSubsec. (g)(4)(C)(iv).  Pub. L. 110–172, §\u202f11(g)(2) , which purported to amend subsec. (g)(4)(C)(iv) of this section, but directed the amendment of  section 54(g)(4)(C)(iv) of this title , by substituting “an organization to which part I of subchapter T (relating to tax treatment of cooperatives) applies which is engaged in the marketing of agricultural or horticultural products” for “a cooperative described in section 927(a)(4)”, was not executed in light of the identical amendment made by  Pub. L. 113–295, §\u202f215(b) , effective as if included in  Pub. L. 110–172 . See 2014 Amendment note above.\n2006—Subsec. (c)(2).  Pub. L. 109–304 , in introductory provisions, substituted “chapter 535 of title 46, United States Code” for “section 607 of the Merchant Marine Act, 1936 ( 46 U.S.C. 1177 )”, and, in subpars. (A) and (B), substituted “such chapter 535” for “such section 607”.\n2005—Subsec. (a)(1)(B).  Pub. L. 109–58  inserted “,\u2000or in section 168(e)(3)(C)(iv)” before period at end.\nSubsec. (b)(1)(A)(ii).  Pub. L. 109–135, §\u202f403(r)(2) , inserted “or clause (ii) of section 164(b)(5)(A)” before period at end.\nSubsec. (d)(1)(A)(i)(II), (ii)(II).  Pub. L. 109–135, §\u202f403(a)(14) , substituted “such deduction and the deduction under section 199” for “such deduction”.\n2004—Subsec. (d)(1)(A)(i)(I).  Pub. L. 108–311, §\u202f403(b)(4)(A) , struck out “attributable to carryovers” after “other than the deduction”.\nSubsec. (d)(1)(A)(ii)(I).  Pub. L. 108–311, §\u202f403(b)(4)(B) , substituted “from taxable years” for “for taxable years” and “carryovers” for “carryforwards”.\nSubsec. (g)(4)(B)(i).  Pub. L. 108–357, §\u202f248(b)(1) , inserted “or 1357” after “section 139A” in concluding provisions.\nPub. L. 108–357, §\u202f101(b)(4) , struck out “114 or” before “139A” in concluding provisions.\nSubsec. (g)(4)(C)(v).  Pub. L. 108–357, §\u202f102(b) , added cl. (v).\nSubsec. (g)(4)(C)(vi).  Pub. L. 108–357, §\u202f422(b) , added cl. (vi).\nSubsec. (g)(6).  Pub. L. 108–357, §\u202f835(b)(1) , substituted “or REMIC” for “REMIC, or FASIT”.\n2003—Subsec. (g)(4)(B)(i).  Pub. L. 108–173  inserted “or 139A” after “section 114” in concluding provisions.\n2002—Subsec. (a)(1)(A)(ii).  Pub. L. 107–147, §\u202f417(5) , substituted “such section 1250” for “such 1250” in concluding provisions.\nSubsec. (d)(1)(A).  Pub. L. 107–147, §\u202f102(c)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the amount of such deduction shall not exceed 90 percent of alternate minimum taxable income determined without regard to such deduction, and”.\n2000—Subsec. (a)(1)(A)(ii).  Pub. L. 106–554  inserted “(and the straight line method shall be used for such 1250 property)” before “or to any other property” in concluding provisions.\nSubsec. (g)(4)(B)(i).  Pub. L. 106–519  inserted “or under section 114” before the period at end of first sentence in concluding provisions.\n1998—Subsec. (a)(3).  Pub. L. 105–277  substituted “section 460(b)(1)” for “section 460(b)(2)” and “section 460(b)(3)” for “section 460(b)(4)”.\n1997—Subsec. (a)(1)(A)(i).  Pub. L. 105–34, §\u202f402(a) , inserted at end “In the case of property placed in service after  December 31, 1998 , the preceding sentence shall not apply but clause (ii) shall continue to apply.”\nSubsec. (a)(5).  Pub. L. 105–34, §\u202f402(b) , inserted at end “In the case of such a facility placed in service after  December 31, 1998 , such deduction shall be determined under section 168 using the straight line method.”\nSubsec. (a)(6) to (8).  Pub. L. 105–34, §\u202f403(a) , redesignated pars. (7) and (8) as (6) and (7), respectively, and struck out former par. (6) which read as follows:\n“(6)  Installment sales of certain property .—In the case of any disposition after  March 1, 1986 , of any property described in section 1221(1), income from such disposition shall be determined without regard to the installment method under section 453. This paragraph shall not apply to any disposition with respect to which an election is in effect under section 453( l )(2)(B).”\nSubsec. (e)(1)(A), (3)(B)(i).  Pub. L. 105–34, §\u202f312(d)(1) , substituted “section 121” for “section 1034”.\nSubsec. (g)(4)(B)(i).  Pub. L. 105–34, §\u202f1212(a) , inserted at end of concluding provisions “In the case of any insurance company taxable under section 831(b), this clause shall not apply to any amount not described in section 834(b).”\n1996—Subsec. (b)(3).  Pub. L. 104–188, §\u202f1702(h)(12) , provided that the amendment made by  section 11801(c)(9)(G)(ii) of Pub. L. 101–508  shall be applied as if it struck “Section 422A(c)(2)” and inserted “Section 422(c)(2)”. See 1990 Amendment note below.\nSubsec. (d)(1)(B)(ii).  Pub. L. 101–508, §\u202f1702(e)(1)(A) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “in the case of taxable years beginning after  December 31, 1986 , section 172(b)(2) shall be applied by substituting ‘90 percent of alternative minimum taxable income determined without regard to the alternative tax net operating loss deduction’ for ‘taxable income’ each place it appears.”\nSubsec. (g)(1), (2)(A).  Pub. L. 104–188, §\u202f1704(t)(48) , provided that  section 11801(c)(2)(B) of Pub. L. 101–508  shall be applied as if “section 56(g)” appeared instead of “section 59(g)”. See 1990 Amendment note below.\nSubsec. (g)(4)(C)(ii)(I).  Pub. L. 104–188, §\u202f1601(b)(2)(B) , inserted “30A,” before “936” and substituted “,\u2000(i), and (j)” for “and (i)”.\nSubsec. (g)(4)(C)(ii)(II).  Pub. L. 104–188, §\u202f1704(t)(1) , substituted “of subclause” for “of the subclause”.\nSubsec. (g)(4)(C)(iii)(VI).  Pub. L. 104–188, §\u202f1601(b)(2)(C) , added subcl. (VI).\nSubsec. (g)(4)(D)(iii).  Pub. L. 104–188, §\u202f1702(g)(4) , inserted “,\u2000but only with respect to taxable years beginning after  December 31, 1989 ” before period at end.\nSubsec. (g)(4)(H) to (J).  Pub. L. 104–188, §\u202f1702(c)(1) , redesignated subpars. (I) and (J) as (H) and (I), respectively.\nSubsec. (g)(6).  Pub. L. 104–188, §\u202f1621(b)(2) , substituted “REMIC, or FASIT” for “or REMIC”.\n1993—Subsec. (g)(4)(A)(i).  Pub. L. 103–66, §\u202f13115(a) , inserted at end “The preceding sentence shall not apply to any property placed in service after  December 31, 1993 , and the depreciation deduction with respect to such property shall be determined under the rules of subsection (a)(1)(A).”\nSubsec. (g)(4)(C)(ii)(I).  Pub. L. 103–66, §\u202f13227(c)(1) , substituted “sections 936 (including subsections (a)(4) and (i) thereof) and 921” for “sections 936 and 921”.\nSubsec. (g)(4)(C)(iii)(IV), (V).  Pub. L. 103–66, §\u202f13227(c)(2) , added subcls. (IV) and (V).\nSubsec. (g)(4)(J).  Pub. L. 103–66, §\u202f13171(b) , added subpar. (J).\n1992—Subsec. (d)(1)(A).  Pub. L. 102–486, §\u202f1915(c)(2) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the amount of such deduction shall not exceed the excess (if any) of—\n“(i) 90 percent of alternative minimum taxable income determined without regard to such deduction and the deduction under subsection (h), over\n“(ii) the deduction under subsection (h), and”.\nSubsec. (g)(4)(D)(i).  Pub. L. 102–486, §\u202f1915(b)(2) , inserted at end “In the case of a taxpayer other than an integrated oil company (as defined in section 291(b)(4)), in the case of any oil or gas well, this clause shall not apply in the case of amounts paid or incurred in taxable years beginning after  December 31, 1992 .”\nSubsec. (g)(4)(F).  Pub. L. 102–486, §\u202f1915(a)(2) , amended subpar. (F) generally. Prior to amendment, subpar. (F) read as follows: “The allowance for depletion with respect to any property placed in service in a taxable year beginning after 1989 shall be cost depletion determined under section 611.”\nSubsec. (h).  Pub. L. 102–486, §\u202f1915(c)(1) , struck out subsec. (h) which related to adjustment based on energy preferences.\n1990—Subsec. (a)(1)(D).  Pub. L. 101–508, §\u202f11812(b)(4) , substituted “section 168(i)(10)” for “section 167( l )(3)(A)”.\nSubsec. (b)(1)(F).  Pub. L. 101–508, §\u202f11103(b) , added subpar. (F).\nSubsec. (b)(3).  Pub. L. 101–508, §\u202f11801(c)(9)(G)(i) , substituted “section 422” for “section 422A”.\nPub. L. 101–508, §\u202f11801(c)(9)(G)(ii) , which directed the substitution of “section 422(c)(2)” for “section 422A(c)(2)”, was executed by substituting “Section 422(c)(2)” for “Section 422A(c)(2)”. See 1996 Amendment note above.\nSubsec. (c)(1).  Pub. L. 101–508, §\u202f11801(c)(2)(A) , substituted heading for one which read: “Adjustment for book income or adjusted current earnings” and amended text generally. Prior to amendment, text read as follows:\n“(A)  Book income adjustment .—For taxable years beginning in 1987, 1988, and 1989, alternative minimum taxable income shall be adjusted as provided under subsection (f).\n“(B)  Adjusted current earnings .—For taxable years beginning after 1989, alternative minimum taxable income shall be adjusted as provided under subsection (g).”\nSubsec. (d)(1)(A).  Pub. L. 101–508, §\u202f11531(b)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the amount of such deduction shall not exceed 90 percent of alternative minimum taxable income determined without regard to such deduction, and”.\nSubsec. (f).  Pub. L. 101–508, §\u202f11801(a)(3) , struck out subsec. (f) which related to adjustments for book income of corporations with respect to minimum taxable income, adjusted net book income, adjustments for certain taxes, special rules for related corporations for consolidated returns, treatment of dividends, statements covering different periods, special rule for cooperatives, treatment and limitation of taxes on dividends from 936 corporations, rules for Alaska native corporations, special rules for life insurance companies, exclusion of certain income from transfer of stock for debt, secretarial authority to adjust items, applicable financial statements, earnings and profits used, special rules for more than one statement and exception for certain corporations.\nSubsec. (g)(1), (2)(A).  Pub. L. 101–508, §\u202f11801(c)(2)(B) , which directed that pars. (1) and (2) “of section 59(g) are each amended by striking ‘beginning after 1989’\u202f”, was executed to pars. (1) and (2)(A) of subsec. (g) of this section after “any taxable year”. See 1996 Amendment note above.\nSubsec. (g)(4)(C)(iii).  Pub. L. 101–508, §\u202f11801(c)(2)(C) , substituted heading for one which read: “Special rule for dividends from section 936 companies” and amended text generally. Prior to amendment, text read as follows: “In the case of any dividend received from a corporation eligible for the credit provided by section 936, rules similar to the rules of subparagraph (F) of subsection (f)(1) shall apply, except that ‘75 percent’ shall be substituted for ‘50 percent’ in clause (i) thereof.”\nSubsec. (g)(4)(D)(ii).  Pub. L. 101–508, §\u202f11704(a)(1) , substituted “years” for “year”.\nSubsec. (g)(4)(F) to (H).  Pub. L. 101–508, §\u202f11301(b) , redesignated subpars. (G) and (H) as (F) and (G), respectively, and struck out former subpar. (F) which provided that acquisition expenses for life insurance companies be capitalized and amortized in accordance with the treatment generally required under generally accepted accounting principles as if this subparagraph applied to all taxable years.\nSubsec. (h).  Pub. L. 101–508, §\u202f11531(a) , added subsec. (h).\n1989—Subsec. (a)(3).  Pub. L. 101–239, §\u202f7815(e)(2)(B) , substituted “The first sentence of this paragraph shall not” for “The preceding sentence shall not”.\nPub. L. 101–239, §\u202f7815(e)(2)(A) , made clarifying amendment to directory language of  Pub. L. 100–647, §\u202f5041(b)(4) , see 1988 Amendment note below.\nPub. L. 101–239, §\u202f7612(c)(1) , struck out “with respect to which the requirements of clauses (i) and (ii) of section 460(e)(1)(B) are met” after “section 460(e)(6))”.\nSubsec. (b)(2)(D).  Pub. L. 101–239, §\u202f7612(d)(1) , added subpar. (D).\nSubsec. (b)(3).  Pub. L. 101–239, §\u202f7811(d)(3) , inserted after first sentence “Section 422A(c)(2) shall apply in any case where the disposition and the inclusion for purposes of this part are within the same taxable year and such section shall not apply in any other case.” and substituted “this paragraph” for “the preceding sentence” in last sentence.\nSubsec. (g)(4)(A)(i).  Pub. L. 101–239, §\u202f7611(a)(1)(A) , amended cl. (i) generally. Prior to amendment cl. (i) read as follows: “The depreciation deduction with respect to any property placed in service in a taxable year beginning after 1989 shall be determined under whichever of the following methods yields deductions with a smaller present value:\n“(I) The alternative system of section 168(g), or\n“(II) The method used for book purposes.”\nSubsec. (g)(4)(A)(iii).  Pub. L. 101–239, §\u202f7611(a)(2) , inserted “and which is placed in service in a taxable year beginning before 1990” after “thereof) applies”.\nSubsec. (g)(4)(A)(v) to (vii).  Pub. L. 101–239, §\u202f7611(a)(1)(B) , redesignated cl. (vii) as (v), and struck out former cl. (v), which related to use of slower method if used for book purposes, and cl. (vi), which related to election to have cumulative limitation.\nSubsec. (g)(4)(B)(i).  Pub. L. 101–239, §\u202f7611(f)(2) , inserted at end “The preceding sentence shall not apply in the case of any amount excluded from gross income under section 108 (or the corresponding provisions of prior law).”\nSubsec. (g)(4)(B)(iii).  Pub. L. 101–239, §\u202f7611(f)(3) , repealed cl. (iii) which read as follows: “In the case of any annuity contract, the income on such contract (as determined under section 72(u)(2)) shall be treated as includible in gross income for such year. The preceding sentence shall not apply to any annuity contract which is held under a plan described in section 403(a) or which is described in section 72(u)(3)(C).”\nSubsec. (g)(4)(C)(ii).  Pub. L. 101–239, §\u202f7611(d) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “Clause (i) shall not apply to any deduction allowable under section 243 or 245 for a 100-percent dividend—\n“(I) if the corporation receiving such dividend and the corporation paying such dividend could not be members of the same affiliated group under section 1504 by reason of section 1504(b),\n“(II) but only to the extent such dividend is attributable to income of the paying corporation which is subject to tax under this chapter (determined after the application of sections 936 and 921).\nFor purposes of the preceding sentence, the term ‘100 percent dividend’ means any dividend if the percentage used for purposes of determining the amount allowable as a deduction under section 243 or 245 with respect to such dividend is 100 percent.”\nSubsec. (g)(4)(C)(iv).  Pub. L. 101–239, §\u202f7611(e) , added cl. (iv).\nSubsec. (g)(4)(D).  Pub. L. 101–239, §\u202f7611(b) , amended subpar. (D) generally, in cl. (i), substituting provisions directing that adjustments in section 312(n)(2)(A) be applied, for provisions directing adjustments in section 312(n) be applied, with certain exceptions, in cl. (ii), substituting provisions directing that sections 173 and 248 not apply to expenditures paid or incurred in taxable years beginning after  December 31, 1989 , for material relating to special rule for intangible drilling costs and mineral exploration and development costs, and adding cls. (iii) and (iv).\nSubsec. (g)(4)(D)(i)(IV), (V).  Pub. L. 101–239, §\u202f7815(e)(4) , added subcl. (IV) relating to inapplicability of pars. (6) to (8) and struck out former subcls. (IV) and (V), which read as follows:\n“(IV) paragraph (6) shall apply only to contracts entered into on or after  March 1, 1986 , and\n“(V) paragraphs (7) and (8) shall not apply.”\nSubsec. (g)(4)(G).  Pub. L. 101–239, §\u202f7611(c) , amended subpar. (G) generally. Prior to amendment, subpar. (G) read as follows: “The allowances for depletion with respect to any property placed in service in a taxable year beginning after 1989, shall be determined under whichever of the following methods yields deductions with a smaller present value:\n“(i) cost depletion determined under section 611, or\n“(ii) the method used for book purposes.”\nSubsec. (g)(4)(H).  Pub. L. 101–239, §\u202f7205(b) , added cl. (ii) and concluding provision and struck out former cl. (ii) and concluding provision which read as follows:\n“(ii)(I) the aggregate adjusted bases of the assets of such corporation (immediately after the change), exceed\n“(II) the value of the stock of such corporation (as determined for purposes of section 382), properly adjusted for liabilities and other relevant items,\nthen the adjusted basis of each asset of such corporation (as of such time) shall be its proportionate share (determined on the basis of respective fair market values) of the amount referred to in clause (ii)(II).”\nSubsec. (g)(4)(H)(i).  Pub. L. 101–239, §\u202f7611(f)(1) , substituted “in a taxable year beginning after 1989” for “after the date of the enactment of the Tax Reform Act of 1986”.\nSubsec. (g)(5)(A).  Pub. L. 101–239, §\u202f7611(f)(4) , redesignated subpar. (B) as (A) and struck out former subpar. (A) which defined “book purposes”.\nSubsec. (g)(5)(B).  Pub. L. 101–239, §\u202f7611(f)(4) , redesignated subpar. (D) as (B). Former subpar. (B) redesignated (A).\nSubsec. (g)(5)(C).  Pub. L. 101–239, §\u202f7611(f)(4) , struck out subpar. (C) which read as follows: “ Present value .—Present value shall be determined as of the time the property is placed in service (or, if later, as of the beginning of the first taxable year beginning after 1989) and under regulations prescribed by the Secretary.”\nSubsec. (g)(5)(D).  Pub. L. 101–239, §\u202f7611(f)(4) , redesignated subpar. (D) as (B).\n1988—Subsec. (a)(1)(A)(i).  Pub. L. 100–647, §\u202f1007(b)(15) , substituted “personal” for “real” in heading.\nSubsec. (a)(1)(C)(i).  Pub. L. 100–647, §\u202f1002(a)(12) , inserted “by reason of section 203, 204, or 251(d) of such Act” after “do not apply”.\nSubsec. (a)(3).  Pub. L. 100–647, §\u202f5041(b)(4) , as amended by  Pub. L. 101–239, §\u202f7815(e)(2)(A) , inserted at end “The preceding sentence shall not apply to any home construction contract (as defined in section 460(e)(6)) with respect to which the requirements of clauses (i) and (ii) of section 460(e)(1)(B) are met.”\nPub. L. 100–647, §\u202f1007(b)(1) , inserted at end “For purposes of the preceding sentence, in the case of a contract described in section 460(e)(1), the percentage of the contract completed shall be determined under section 460(b)(2) by using the simplified procedures for allocation of costs prescribed under section 460(b)(4).”\nSubsec. (a)(8).  Pub. L. 100–647, §\u202f1007(b)(19) , added par. (8).\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1007(b)(16) , struck out “itemized” after “Limitation on” in heading.\nSubsec. (b)(1)(C)(ii).  Pub. L. 100–647, §\u202f2004(b)(2) , substituted “163(h)(5)” for “163(h)(6)”.\nSubsec. (b)(1)(C)(iii).  Pub. L. 100–647, §\u202f1007(b)(4) , substituted “specified private activity bond” for “specified activity bond” before “under”, and “57(a)(5)(B)” for “56(a)(5)(B)”.\nSubsec. (b)(1)(C)(iv), (v).  Pub. L. 100–647, §\u202f1007(b)(3) , added cls. (iv) and (v).\nSubsec. (b)(1)(E).  Pub. L. 100–647, §\u202f1007(b)(2) , substituted “and deduction for personal exemptions not allowed” for “not allowed” in heading and amended text generally. Prior to amendment, text read as follows: “The standard deduction provided in section 63(c) shall not be allowed.”\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1007(b)(14)(A) , added par. (3).\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f1007(b)(13)(A) , substituted “adjusted current earnings” for “adjusted earnings and profits” in heading.\nSubsec. (c)(1)(B).  Pub. L. 100–647, §\u202f1007(b)(13)(B) , substituted “Adjusted current earnings” for “Adjusted earnings and profits” in heading.\nSubsec. (d)(2)(A).  Pub. L. 100–647, §\u202f1007(b)(5) , struck out “(other than subsection (a)(6) thereof)” after “for such year” in cl. (ii) and inserted sentence at end providing that an item of tax preference shall be taken into account under clause (ii).\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f2004(b)(3)(A) , substituted “improving” for “rehabilitating” in introductory text.\nPub. L. 100–647, §\u202f1007(b)(6)(A)(i) , inserted “qualified residence interest (as defined in section 163(h)(3)) and is” after “interest which is” in introductory text.\nSubsec. (e)(1)(A).  Pub. L. 100–647, §\u202f2004(b)(3)(B) , struck out “or is paid” after “accrues”.\nSubsec. (e)(1)(B).  Pub. L. 100–647, §\u202f1007(b)(6)(A)(ii) , substituted “section 163(h)(4)” for “section 163(h)(3)”.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1007(b)(6)(B) , substituted “interest which is qualified residence interest (as defined in section 163(h)(3)) and is paid or accrued” for “interest paid or accrued”.\nSubsec. (f)(2)(B).  Pub. L. 100–647, §\u202f2001(c)(3)(A) , inserted at end “No adjustment shall be made under this subparagraph for the tax imposed by section 59A.”\nPub. L. 100–647, §\u202f1007(b)(7) , inserted “(otherwise eligible for the credit provided by section 901 without regard to section 901(j))” after “any such taxes”.\nSubsec. (f)(2)(F).  Pub. L. 100–647, §\u202f1007(b)(11)(A) , substituted “Treatment of taxes on dividends from 936 corporations” for “Treatment of dividends from 936 corporations” in heading and amended text generally, substituting cls. (i) to (iii) for former cls. (i) and (ii).\nSubsec. (f)(2)(I), (J).  Pub. L. 100–647, §\u202f6303(a) , added subpar. (I) and redesignated former subpar. (I) as (J).\nSubsec. (f)(3)(A)(iii).  Pub. L. 100–647, §\u202f1007(b)(8) , inserted “for a substantial nontax purpose” after “an income statement”.\nSubsec. (f)(3)(B).  Pub. L. 100–647, §\u202f1007(b)(9) , substituted “this subsection” for “paragraph (3)(A)” in penultimate sentence.\nSubsec. (f)(3)(C).  Pub. L. 100–647, §\u202f1007(b)(10) , inserted at end “If the taxpayer has 2 or more statements described in the clause (or subclause) with the lowest number designation, the applicable financial statement shall be the one of such statements specified in regulations.”\nSubsec. (g)(4)(A)(vi), (vii).  Pub. L. 100–647, §\u202f1007(b)(17) , added cls. (vi) and (vii).\nSubsec. (g)(4)(B)(iii).  Pub. L. 100–647, §\u202f6079(a)(1) , amended last sentence generally, inserting “which is” after “any annuity contract” and “or which is described in section 72(u)(3)(C)” after “in section 403(a)”.\nPub. L. 100–647, §\u202f1007(b)(12) , inserted at end “The preceding sentence shall not apply to any annuity contract held under a plan described in section 403(a).”\nSubsec. (g)(4)(C)(iii).  Pub. L. 100–647, §\u202f1007(b)(11)(B) , substituted “clause (i)” for “clause (ii)(I)”.\nSubsec. (g)(4)(I).  Pub. L. 100–647, §\u202f1007(b)(18) , added subpar. (I).\n1987—Subsec. (a)(6).  Pub. L. 100–203, §\u202f10202(d) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “In the case of any—\n“(A) disposition after  March 1, 1986 , of property described in section 1221(1), or\n“(B) other disposition if an obligation arising from such disposition would be an applicable installment obligation (as defined in section 453C(e)) to which section 453C applies,\nincome from such disposition shall be determined without regard to the installment method under section 453 or 453A and all payments to be received for the disposition shall be deemed received in the taxable year of the disposition. This paragraph shall not apply to any disposition with respect to which an election is in effect under section 453C(e)(4).”\nSubsec. (f)(2)(H), (I).  Pub. L. 100–203, §\u202f10243(a) , added subpar. (H) and redesignated former subpar. (H) as (I).\nPub. L. 116–94, div. Q, title I, §\u202f103(c) ,  Dec. 20, 2019 ,  133 Stat. 3228 , provided that:  “The amendments made by this section [amending this section and  section 213 of this title ] shall apply to taxable years ending after  December 31, 2018 .”\nPub. L. 115–97, title I, §\u202f11027(c) ,  Dec. 22, 2017 ,  131 Stat. 2077 , provided that:  “The amendment made by this section [amending this section and  section 213 of this title ] shall apply to taxable years beginning after  December 31, 2016 .”\nAmendment by section 12001(b)(7), (8)(A) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 113–295, div. A, title II, §\u202f215(c) ,  Dec. 19, 2014 ,  128 Stat. 4034 , provided that:  “The amendments made by this section [amending this section and  section 911 of this title ] shall take effect as if included in the provisions of the Tax Technical Corrections Act of 2007 [ Pub. L. 110–172 ] to which they relate.”\nAmendment by section 221(a)(9), (25)(B), (30)(C) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–148, title IX, §\u202f9013(d) ,  Mar. 23, 2010 ,  124 Stat. 868 , provided that:  “The amendments made by this section [amending this section and  section 213 of this title ] shall apply to taxable years beginning after  December 31, 2012 .”\nPub. L. 111–92, §\u202f13(e) , (f),  Nov. 6, 2009 ,  123 Stat. 2994 , 2995, as amended by  Pub. L. 113–295, div. A, title II, §\u202f220(bb) ,  Dec. 19, 2014 ,  128 Stat. 4037 , provided that: \n “(e)   Effective Dates.— “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 172 and 810 of this title] shall apply to net operating losses arising in taxable years ending after  December 31, 2007 . \n \n “(2)   Alternative tax net operating loss deduction .— The amendment made by subsection (b) [amending this section] shall apply to taxable years ending after  December 31, 2002 . \n \n “(3)   Loss from operations of life insurance companies .— The amendment made by subsection (c) [amending  section 810 of this title ] shall apply to losses from operations arising in taxable years ending after  December 31, 2007 . \n \n “(4)   Transitional rule .— In the case of any net operating loss (or, in the case of a life insurance company, any loss from operations) for a taxable year ending before the date of the enactment of this Act [ Nov. 6, 2009 ]— “(A)  any election made under section 172(b)(3) or [former] 810(b)(3) of the Internal Revenue Code of 1986 with respect to such loss may (notwithstanding such section) be revoked before the due date (including extension of time) for filing the return for the taxpayer’s last taxable year beginning in 2009, and \n \n “(B)  any application under section 6411(a) of such Code with respect to such loss shall be treated as timely filed if filed before such due date. \n \n \n \n “(f)   Exception for TARP Recipients .— The amendments made by this section [amending this section and sections 172 and 810 of this title] shall not apply to— “(1)  any taxpayer if— “(A)  the Federal Government acquired before the date of the enactment of this Act [ Nov. 6, 2009 ] an equity interest in the taxpayer pursuant to the Emergency Economic Stabilization Act of 2008 [div. A of  Pub. L. 110–343 , see Tables for classification], \n \n “(B)  the Federal Government acquired before such date of enactment any warrant (or other right) to acquire any equity interest with respect to the taxpayer pursuant to the Emergency Economic Stabilization Act of 2008, or \n \n “(C)  such taxpayer receives after such date of enactment funds from the Federal Government in exchange for an interest described in subparagraph (A) or (B) pursuant to a program established under title I of division A of the Emergency Economic Stabilization Act of 2008 [see Tables for classification] (unless such taxpayer is a financial institution (as defined in section 3 of such Act [ 12 U.S.C. 5202 ]) and the funds are received pursuant to a program established by the Secretary of the Treasury for the stated purpose of increasing the availability of credit to small businesses using funding made available under such Act [ Pub. L. 110–343 , see Tables for classification]), or \n \n \n “(2)  the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and \n \n “(3)  any taxpayer which at any time in 2008 or 2009 was or is a member of the same affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986, determined without regard to subsection (b) thereof) as a taxpayer described in paragraph (1) or (2).”\nPub. L. 111–5, div. B, title I, §\u202f1008(e) ,  Feb. 17, 2009 ,  123 Stat. 318 , provided that:  “The amendments made by this section [amending this section and sections 63 and 164 of this title] shall apply to purchases on or after the date of the enactment of this Act [ Feb. 17, 2009 ] in taxable years ending after such date.”\nPub. L. 111–5, div. B, title I, §\u202f1503(c) ,  Feb. 17, 2009 ,  123 Stat. 355 , provided that:  “The amendments made by this section [amending this section and  section 57 of this title ] shall apply to obligations issued after  December 31, 2008 .”\nPub. L. 110–343, div. C, title VII, §\u202f706(d) ,  Oct. 3, 2008 ,  122 Stat. 3923 , provided that: \n “(1)   In general .— Except as provided by paragraph (2), the amendments made by this section [amending this section and sections 63, 139, 165, 172, 1033, and 7508A of this title] shall apply to disasters declared in taxable years beginning after  December 31, 2007 . \n \n “(2)   Increase in limitation on individual loss per casualty .— The amendment made by subsection (c) [amending  section 165 of this title ] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 110–343, div. C, title VII, §\u202f708(e) ,  Oct. 3, 2008 ,  122 Stat. 3925 , provided that:  “The amendments made by this section [amending this section and  section 172 of this title ] shall apply to losses arising in taxable years beginning after  December 31, 2007 , in connection with disasters declared after such date.”\nPub. L. 110–289, div. C, title I, §\u202f3022(d)(1) ,  July 30, 2008 ,  122 Stat. 2894 , provided that:  “The amendments made by subsection (a) [amending this section and  section 57 of this title ] shall apply to bonds issued after the date of the enactment of this Act [ July 30, 2008 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 109–58, title XIII, §\u202f1326(e) ,  Aug. 8, 2005 ,  119 Stat. 1017 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 168 of this title ] shall apply to property placed in service after  April 11, 2005 . \n \n “(2)   Exception .— The amendments made by this section [amending this section and  section 168 of this title ] shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before  April 11, 2005 , or, in the case of self-constructed property, has started construction on or before such date.”\nPub. L. 108–357, title I, §\u202f101(c) ,  Oct. 22, 2004 ,  118 Stat. 1423 , provided that:  “The amendments made by this section [amending this section and sections 275, 864, 903, and 999 of this title and repealing sections 114 and 941 to 943 of this title] shall apply to transactions after  December 31, 2004 .”\nPub. L. 108–357, title I, §\u202f102(e) ,  Oct. 22, 2004 ,  118 Stat. 1429 , as amended by  Pub. L. 109–135, title IV, §\u202f403(a)(19) ,  Dec. 21, 2005 ,  119 Stat. 2619 , provided that: \n “(1)   In general .— The amendments made by this section [enacting  section 199 of this title  and amending this section and sections 86, 135, 137, 219, 221, 222, 246, 469, 613, and 1402 of this title] shall apply to taxable years beginning after  December 31, 2004 . \n \n “(2)   Application to pass-thru entities, etc .— In determining the deduction under [former] section 199 of the Internal Revenue Code of 1986 (as added by this section), items arising from a taxable year of a partnership, S corporation, estate, or trust beginning before  January 1, 2005 , shall not be taken into account for purposes of subsection (d)(1) of such section.”\nPub. L. 108–357, title II, §\u202f248(c) ,  Oct. 22, 2004 ,  118 Stat. 1457 , provided that:  “The amendments made by this section [enacting subchapter R of this chapter and amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title IV, §\u202f422(d) ,  Oct. 22, 2004 ,  118 Stat. 1519 , provided that:  “The amendments made by this section [enacting  section 965 of this title  and amending this section] shall apply to taxable years ending on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title VIII, §\u202f835(c) ,  Oct. 22, 2004 ,  118 Stat. 1594 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 382, 582, 856, 860G, 1202, and 7701 of this title and repealing part V of subchapter M of this chapter] shall take effect on  January 1, 2005 . \n \n “(2)   Exception for existing fasits .— Paragraph (1) shall not apply to any FASIT in existence on the date of the enactment of this Act [ Oct. 22, 2004 ] to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance.”\nPub. L. 108–311, title IV, §\u202f403(f) ,  Oct. 4, 2004 ,  118 Stat. 1188 , provided that:  “The amendments made by this section [amending this section, sections 137, 168, 172, and 1400L of this title,  section 1306 of Title 29 , Labor, and provisions set out as a note under this section] shall take effect as if included in the provisions of the Job Creation and Worker Assistance Act of 2002 [ Pub. L. 107–147 ] to which they relate.”\nPub. L. 108–173, title XII, §\u202f1202(d) ,  Dec. 8, 2003 ,  117 Stat. 2480 , provided that:  “The amendments made by this section [enacting  section 139A of this title  and amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Dec. 8, 2003 ].”\nPub. L. 107–147, title I, §\u202f102(c)(2) ,  Mar. 9, 2002 ,  116 Stat. 26 , as amended  Pub. L. 108–311, title IV, §\u202f403(b)(3) ,  Oct. 4, 2004 ,  118 Stat. 1187 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years ending after  December 31, 1990 .”\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f314(g)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–643, provided that:  “The amendments made by this section [amending this section and sections 403, 414, 415, 3405, 6211 and 7436 of this title and provisions set out as a note under  section 1 of this title ] shall take effect as if included in the provisions of the Taxpayer Relief [Act] of 1997 [ Pub. L. 105–34 ] to which they relate.”\nPub. L. 106–519, §\u202f5 ,  Nov. 15, 2000 ,  114 Stat. 2433 , as amended by  Pub. L. 109–222, title V, §\u202f513(a) ,  May 17, 2006 ,  120 Stat. 366 , provided that: \n “(a)   In General .— The amendments made by this Act [enacting sections 114 and 941 to 943 of this title, amending this section and sections 275, 864, 903, and 999 of this title, and repealing sections 921 to 927 of this title] shall apply to transactions after  September 30, 2000 . \n \n “(b)   No New FSCs; Termination of Inactive FSCs.— “(1)   No new fscs .— No corporation may elect after  September 30, 2000 , to be a FSC (as defined in section 922 of the Internal Revenue Code of 1986, as in effect before the amendments made by this Act). \n \n “(2)   Termination of inactive fscs .— If a FSC has no foreign trade income (as defined in section 923(b) of such Code, as so in effect) for any period of 5 consecutive taxable years beginning after  December 31, 2001 , such FSC shall cease to be treated as a FSC for purposes of such Code for any taxable year beginning after such period. \n \n \n “(c)   Transition Period for Existing Foreign Sales Corporations.— “(1)   In general .— In the case of a FSC (as so defined) in existence on  September 30, 2000 , and at all times thereafter, the amendments made by this Act shall not apply to any transaction in the ordinary course of trade or business involving a FSC which occurs before  January 1, 2002 . \n \n “(2)   Election to have amendments apply earlier .— A taxpayer may elect to have the amendments made by this Act apply to any transaction by a FSC or any related person to which such amendments would apply but for the application of paragraph (1). Such election shall be effective for the taxable year for which made and all subsequent taxable years, and, once made, may be revoked only with the consent of the Secretary of the Treasury. \n \n “(3)   Exception for old earnings and profits of certain corporations.— “(A)   In general .— In the case of a foreign corporation to which this paragraph applies— “(i)  earnings and profits of such corporation accumulated in taxable years ending before  October 1, 2000 , shall not be included in the gross income of the persons holding stock in such corporation by reason of section 943(e)(4)(B)(i); and \n \n “(ii)  rules similar to the rules of clauses (ii), (iii), and (iv) of section 953(d)(4)(B) shall apply with respect to such earnings and profits. \n \n\n \u2001\u2001The preceding sentence shall not apply to earnings and profits acquired in a transaction after  September 30, 2000 , to which section 381 applies unless the distributor or transferor corporation was immediately before the transaction a foreign corporation to which this paragraph applies. \n \n “(B)   Existing fscs .— This paragraph shall apply to any controlled foreign corporation (as defined in section 957) if— “(i)  such corporation is a FSC (as so defined) in existence on  September 30, 2000 ; \n \n “(ii)  such corporation is eligible to make the election under section 943(e) by reason of being described in paragraph (2)(B) of such section; and \n \n “(iii)  such corporation makes such election not later than for its first taxable year beginning after  December 31, 2001 . \n \n \n “(C)   Other corporations .— This paragraph shall apply to any controlled foreign corporation (as defined in section 957), and such corporation shall (notwithstanding any provision of section 943(e)) be treated as an applicable foreign corporation for purposes of section 943(e), if— “(i)  such corporation is in existence on  September 30, 2000 ; \n \n “(ii)  as of such date, such corporation is wholly owned (directly or indirectly) by a domestic corporation (determined without regard to any election under section 943(e)); \n \n “(iii)  for each of the 3 taxable years preceding the first taxable year to which the election under section 943(e) by such controlled foreign corporation applies— \u2001\u2001\u2001\u2001\u2001“(I)  all of the gross income of such corporation is subpart F income (as defined in section 952), including by reason of section 954(b)(3)(B); and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  in the ordinary course of such corporation’s trade or business, such corporation regularly sold (or paid commissions) to a FSC which on  September 30, 2000 , was a related person to such corporation; \n \n \n “(iv)  such corporation has never made an election under section 922(a)(2) (as in effect before the date of the enactment of this paragraph [ Nov. 15, 2000 ]) to be treated as a FSC; and \n \n “(v)  such corporation makes the election under section 943(e) not later than for its first taxable year beginning after  December 31, 2001 . \n \n\n \u2001\u2001The preceding sentence shall cease to apply as of the date that the domestic corporation referred to in clause (ii) ceases to wholly own (directly or indirectly) such controlled foreign corporation. \n \n \n “(4)   Related person .— For purposes of this subsection, the term ‘related person’ has the meaning given to such term by section 943(b)(3). \n \n “(5)   Section references .— Except as otherwise expressly provided, any reference in this subsection to a section or other provision shall be considered to be a reference to a section or other provision of the Internal Revenue Code of 1986, as amended by this Act. \n \n \n “(d)   Special Rules Relating to Leasing Transactions.— “(1)   Sales income .— If foreign trade income in connection with the lease or rental of property described in section 927(a)(1)(B) of such Code (as in effect before the amendments made by this Act) is treated as exempt foreign trade income for purposes of section 921(a) of such Code (as so in effect), such property shall be treated as property described in section 941(c)(1)(B) of such Code (as added by this Act) for purposes of applying section 941(c)(2) of such Code (as so added) to any subsequent transaction involving such property to which the amendments made by this Act apply. \n \n “(2)   Limitation on use of gross receipts method .— If any person computed its foreign trade income from any transaction with respect to any property on the basis of a transfer price determined under the method described in section 925(a)(1) of such Code (as in effect before the amendments made by this Act), then the qualifying foreign trade income (as defined in section 941(a) of such Code, as in effect after such amendment) of such person (or any related person) with respect to any other transaction involving such property (and to which the amendments made by this Act apply) shall be zero.”\n[ Pub. L. 109–222, title V, §\u202f513(c) ,  May 17, 2006 ,  120 Stat. 366 , provided that:  “The amendments made by this section [amending  section 5 of Pub. L. 106–519 , set out above, and provisions set out as a note under  section 114 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ May 17, 2006 ].” \n]\nAmendment by  section 312(d)(1) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nPub. L. 105–34, title IV, §\u202f403(b) ,  Aug. 5, 1997 ,  111 Stat. 844 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to dispositions in taxable years beginning after  December 31, 1987 . \n \n “(2)   Special rule for 1987 .— In the case of taxable years beginning in 1987, the last sentence of section 56(a)(6) of the Internal Revenue Code of 1986 (as in effect for such taxable years) shall be applied by inserting ‘or in the case of a taxpayer using the cash receipts and disbursements method of accounting, any disposition described in section 453C(e)(1)(B)(ii)’ after ‘section 453C(e)(4)’.”\nPub. L. 105–34, title XII, §\u202f1212(b) ,  Aug. 5, 1997 ,  111 Stat. 1000 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by section 1601(b)(2)(B), (C) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , except as otherwise provided, see  section 1601(c) of Pub. L. 104–188 , set out as a note under  section 55 of this title .\nAmendment by  section 1621(b)(2) of Pub. L. 104–188  effective  Sept. 1, 1997 , see  section 1621(d) of Pub. L. 104–188 , set out as a note under  section 26 of this title .\nAmendment by section 1702(c)(1), (e)(1)(A), (g)(4), and (h)(12) of  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 103–66, title XIII, §\u202f13115(b) ,  Aug. 10, 1993 ,  107 Stat. 432 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 1993 . \n \n “(2)   Coordination with transitional rules .— The amendments made by this section shall not apply to any property to which paragraph (1) of section 56(a) of the Internal Revenue Code of 1986 does not apply by reason of subparagraph (C)(i) thereof.”\nAmendment by  section 13171(b) of Pub. L. 103–66  applicable to contributions made after  June 30, 1992 , except that in case of any contribution of capital gain property which is not tangible personal property, such amendment applicable only if the contribution is made after  Dec. 31, 1992 , see  section 13171(d) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nPub. L. 103–66, title XIII, §\u202f13227(f) ,  Aug. 10, 1993 ,  107 Stat. 494 , provided that:  “The amendments made by this section [amending this section and sections 904, 936, and 7652 of this title] shall apply to taxable years beginning after  December 31, 1993 ; except that the amendment made by subsection (e) [amending  section 7652 of this title ] shall take effect on  October 1, 1993 .”\nPub. L. 102–486, title XIX, §\u202f1915(d) ,  Oct. 24, 1992 ,  106 Stat. 3024 , provided that:  “The amendments made by this section [amending this section and sections 57, 59, and 59A of this title] shall apply to taxable years beginning after  December 31, 1992 .”\nAmendment by  section 11103(b) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11103(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nPub. L. 101–508, title XI, §\u202f11301(d)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–449 , provided that: \n “(A)   In general .— The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning on or after  September 30, 1990 , except that, in the case of a small insurance company, such amendment shall apply to taxable years beginning after  December 31, 1989 . For purposes of this paragraph, the term ‘small insurance company’ means any insurance company which meets the requirements of [former] section 806(a)(3) of the Internal Revenue Code of 1986; except that paragraph (2) of [former] section 806(c) of such Code shall not apply. \n \n “(B)   Special rules for year which includes  september 30, 1990 .— In the case of any taxable year which includes  September 30, 1990 , the amount of acquisition expenses which is required to be capitalized under [former] section 56(g)(4)(F) of the Internal Revenue Code of 1986 (as in effect before the amendment made by subsection (b)) by a company which is not a small insurance company shall be the amount which bears the same ratio to the amount which (but for this subparagraph) would be so required to be capitalized as the number of days in such taxable year before  September 30, 1990 , bears to the total number of days in such taxable year. A similar reduction shall be made in the amount amortized for such taxable year under such [former] section 56(g)(4)(F).”\nPub. L. 101–508, title XI, §\u202f11531(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–490 , provided that:  “The amendments made by this section [amending this section and sections 59 and 59A of this title] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 101–508, title XI, §\u202f11704(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–520 , provided that:  “The amendments made by this section [amending this section, sections 172, 351, 413, 461, 469, 597, 857, 860D, 860G, 892, 927, 936, 1017, 1245, 1441, 2056A, 2642, 3231, 4091, 4093, 5061, 6013, 6038A, 6039D, 6045, 6323, 6332, 6655, 7519, 7522, 7608, and 7701 of this title, and provisions set out as a note under  section 231n of Title 45 , Railroads] shall take effect on the date of the enactment of this Act.”\nAmendment by  section 11812(b)(4) of Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–239, title VII, §\u202f7205(c) ,  Dec. 19, 1989 ,  103 Stat. 2336 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 382 of this title ] shall apply to ownership changes and acquisitions after  October 2, 1989 , in taxable years ending after such date. \n \n “(2)   Binding contract .— The amendments made by this section shall not apply to any ownership change or acquisition pursuant to a written binding contract in effect on  October 2, 1989 , and at all times thereafter before such change or acquisition. \n \n “(3)   Bankruptcy proceedings .— In the case of a reorganization described in section 368(a)(1)(G) of the Internal Revenue Code of 1986, or an exchange of debt for stock in a title 11 or similar case (as defined in section 368(a)(3) of such Code), the amendments made by this section shall not apply to any ownership change resulting from such a reorganization or proceeding if a petition in such case was filed with the court before  October 3, 1989 . \n \n “(4)   Subsidiaries of bankrupt parent .— The amendments made by this section shall not apply to any built-in loss of a corporation which is a member (on  October 2, 1989 ) of an affiliated group the common parent of which (on such date) was subject to title 11 or similar case (as defined in section 368(a)(3) of such Code). The preceding sentence shall apply only if the ownership change or acquisition is pursuant to the plan approved in such proceeding and is before the date 2 years after the date on which the petition which commenced such proceeding was filed.”\nPub. L. 101–239, title VII, §\u202f7611(g) ,  Dec. 19, 1989 ,  103 Stat. 2373 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 59 and 312 of this title] shall apply to taxable years beginning after  December 31, 1989 . \n \n “(2)   Intangible drilling costs .— The amendments made by subsection (f)(5) [amending sections 59 and 312 of this title] shall apply to costs paid or incurred in taxable years beginning after  December 31, 1989 . \n \n “(3)   Regulations on earnings and profits rules .— Not later than  March 15, 1991 , the Secretary of the Treasury or his delegate shall prescribe initial regulations providing guidance as to which items of income are included in adjusted current earnings under [former] section 56(g)(4)(B)(i) of the Internal Revenue Code of 1986 and which items of deduction are disallowed under [former] section 56(g)(4)(C) of such Code.”\nPub. L. 101–239, title VII, §\u202f7612(c)(2) ,  Dec. 19, 1989 ,  103 Stat. 2374 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to contracts entered into in taxable years beginning after  September 30, 1990 .”\nPub. L. 101–239, title VII, §\u202f7612(d)(2) ,  Dec. 19, 1989 ,  103 Stat. 2374 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nAmendment by sections 7811(d)(3) and 7815(e)(2), (4) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1007(b)(14)(C) ,  Nov. 10, 1988 ,  102 Stat. 3430 , provided that:  “The amendments made by this paragraph [amending this section and  section 57 of this title ] shall apply with respect to options exercised after  December 31, 1987 .”\nAmendment by sections 1002(a)(12) and 1007(b)(1)–(13), (15)–(19) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title II, §\u202f2001(e) ,  Nov. 10, 1988 ,  102 Stat. 3597 , provided that:  “Except as otherwise provided in this section, the amendments made by this section [amending this section, sections 59A, 882, 4041, 4081, 4091, 4662, 4672, 6416, 6421, and 6427 of this title, and provisions set out as a note under  section 4081 of this title ] shall take effect as if included in the provision of the Superfund Revenue Act of 1986 [ Pub. L. 99–499, title V ] to which it relates.”\nPub. L. 100–647, title II, §\u202f2004(u) ,  Nov. 10, 1988 ,  102 Stat. 3610 , provided that:  “Except as otherwise provided in this section, any amendment made by this section [amending this section, sections 163, 244, 280H, 301, 304, 355, 384, 444, 453, 453A, 469, 514, 811, 812, 816, 842, 904, 1201, 1363, 1503, 1561, 4093, 5113, 5123, 5276, 5881, 6427, 6655, 7519, and 7704 of this title, and provisions set out as notes under sections 21, 219, 243, 301, 304, 444, 453, 1503, and 7704 of this title] shall take effect as if included in the provisions of the Revenue Act of 1987 [ Pub. L. 100–203, title X ] to which such amendment relates.”\nAmendment by  section 5041(b)(4) of Pub. L. 100–647  applicable to contracts entered into on or after  June 21, 1988 , but not applicable to any contract resulting from the acceptance of a bid made before  June 21, 1988 , if the bid could not have been revoked or altered at any time on or after  June 21, 1988 , and not applicable in the case of a qualified ship contract (as defined in  section 10203(b)(2)(B) of Pub. L. 100–203 , set out as a note under  section 460 of this title ), see  section 5041(e) of Pub. L. 100–647 , set out as a note under  section 460 of this title .\nPub. L. 100–647, title VI, §\u202f6079(a)(2) ,  Nov. 10, 1988 ,  102 Stat. 3709 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 701 of the Reform Act [ Pub. L. 99–514 ].”\nPub. L. 100–647, title VI, §\u202f6303(b) ,  Nov. 10, 1988 ,  102 Stat. 3756 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 10202(d) of Pub. L. 100–203  applicable to dispositions in taxable years beginning after  Dec. 31, 1986 , with coordination with Tax Reform Act of 1986, see section 10202(e)(4), (5) of  Pub. L. 100–203 , set out as a note under  section 453 of this title .\nPub. L. 100–203, title X, §\u202f10243(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–424 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as a note under  section 55 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by sections 11801 and 11812 of  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 110–343, div. C, title VII, §\u202f712 ,  Oct. 3, 2008 ,  122 Stat. 3929 , as amended by  Pub. L. 113–295, div. A, title II, §\u202f211(c)(3) ,  Dec. 19, 2014 ,  128 Stat. 4033 , provided that:  “The amendments made by this subtitle [subtitle B (§§\u202f706–712) of title VII of div. C of  Pub. L. 110–343 , enacting  section 198A of this title  and amending this section and sections 63, 139, 143, 165, 168, 172, 179, 1033, and 7508A of this title], other than the amendments made by sections 706(a)(2) [amending sections 139, 165, 172, 1033, and 7508A of this title], 710 [amending  section 168 of this title ], and 711 [amending  section 179 of this title ], shall not apply to any disaster described in section 702(b)(1)(A) [ 122 Stat. 3912 ], or to any expenditure or loss resulting from such disaster.”\nPub. L. 104–188, title I, §\u202f1702(e)(1)(B) ,  Aug. 20, 1996 ,  110 Stat. 1870 , provided that:  “For purposes of applying [former] sections 56(g)(1) and 56(g)(3) of the Internal Revenue Code of 1986 with respect to taxable years beginning in 1991 and 1992, the reference in such sections to the alternative tax net operating loss deduction shall be treated as including a reference to the deduction under [former] section 56(h) of such Code as in effect before the amendments made by section 1915 of the Energy Policy Act of 1992 [ Pub. L. 102–486 ].”\nPub. L. 101–239, title VII, §\u202f7821(a)(5) ,  Dec. 19, 1989 ,  103 Stat. 2424 , provided that:  “In the case of taxable years beginning in 1987, the reference to section 453 contained in section 56(a)(6) of the Internal Revenue Code of 1986 shall be treated as including a reference to section 453A.”\nFor applicability of amendment by  section 701(a) of Pub. L. 99–514  [enacting this section] notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 99–514, title VII, §\u202f702 ,  Oct. 22, 1986 ,  100 Stat. 2345 , required Secretary of the Treasury or his delegate to conduct a study of operation and effect of provisions of section 56(f) and former section 56(g) of the Internal Revenue Code of 1986, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11832(4) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ALTERNATIVE MINIMUM TAX'},
  'content': 'For purposes of this part, the term “adjusted financial statement income” means, with respect to any corporation for any taxable year, the net income or loss of the taxpayer set forth on the taxpayer’s applicable financial statement for such taxable year, adjusted as provided in this section.\nFor purposes of this section, the term “applicable financial statement” means, with respect to any taxable year, an applicable financial statement (as defined in section 451(b)(3) or as specified by the Secretary in regulations or other guidance) which covers such taxable year.\nAppropriate adjustments shall be made in adjusted financial statement income in any case in which an applicable financial statement covers a period other than the taxable year.\nIf the financial results of a taxpayer are reported on the applicable financial statement for a group of entities, rules similar to the rules of section 451(b)(5) shall apply.\nExcept as provided in regulations prescribed by the Secretary, if the taxpayer is part of an affiliated group of corporations filing a consolidated return for any taxable year, adjusted financial statement income for such group for such taxable year shall take into account items on the group’s applicable financial statement which are properly allocable to members of such group.\nIn the case of any corporation which is not included on a consolidated return with the taxpayer, adjusted financial statement income of the taxpayer with respect to such other corporation shall be determined by only taking into account the dividends received from such other corporation (reduced to the extent provided by the Secretary in regulations or other guidance) and other amounts which are includible in gross income or deductible as a loss under this chapter (other than amounts required to be included under sections 951 and 951A or such other amounts as provided by the Secretary) with respect to such other corporation.\nExcept as provided by the Secretary, if the taxpayer is a partner in a partnership, adjusted financial statement income of the taxpayer with respect to such partnership shall be adjusted to only take into account the taxpayer’s distributive share of adjusted financial statement income of such partnership.\nFor the purposes of this part, the adjusted financial statement income of a partnership shall be the partnership’s net income or loss set forth on such partnership’s applicable financial statement (adjusted under rules similar to the rules of this section).\nIf, for any taxable year, a taxpayer is a United States shareholder of one or more controlled foreign corporations, the adjusted financial statement income of such taxpayer with respect to such controlled foreign corporation (as determined under paragraph (2)(C)) shall be adjusted to also take into account such taxpayer’s pro rata share (determined under rules similar to the rules under section 951(a)(2)) of items taken into account in computing the net income or loss set forth on the applicable financial statement (as adjusted under rules similar to those that apply in determining adjusted financial statement income) of each such controlled foreign corporation with respect to which such taxpayer is a United States shareholder.\nIn the case of a foreign corporation, to determine adjusted financial statement income, the principles of section 882 shall apply.\nAdjusted financial statement income shall be appropriately adjusted to disregard any Federal income taxes, or income, war profits, or excess profits taxes (within the meaning of section 901) with respect to a foreign country or possession of the United States, which are taken into account on the taxpayer’s applicable financial statement. To the extent provided by the Secretary, the preceding sentence shall not apply to income, war profits, or excess profits taxes (within the meaning of section 901) that are imposed by a foreign country or possession of the United States and taken into account on the taxpayer’s applicable financial statement if the taxpayer does not choose to have the benefits of subpart A of part III of subchapter N for the taxable year. The Secretary shall prescribe such regulations or other guidance as may be necessary and appropriate to provide for the proper treatment of current and deferred taxes for purposes of this paragraph, including the time at which such taxes are properly taken into account.\nAdjusted financial statement income shall be adjusted to take into account any adjusted financial statement income of a disregarded entity owned by the taxpayer.\nIn the case of a cooperative to which section 1381 applies, the adjusted financial statement income (determined without regard to this paragraph) shall be reduced by the amounts referred to in section 1382(b) (relating to patronage dividends and per-unit retain allocations) to the extent such amounts were not otherwise taken into account in determining adjusted financial statement income.\nAdjusted financial statement income shall be appropriately adjusted to disregard any amount treated as a payment against the tax imposed by subtitle A pursuant to an election under section 48D(d) or 6417, to the extent such amount was not otherwise taken into account under paragraph (5).\nAdjusted financial statement income shall be adjusted so as not to include any item of income in connection with a mortgage servicing contract any earlier than when such income is included in gross income under any other provision of this chapter.\nThe Secretary shall provide regulations to prevent the avoidance of taxes imposed by this chapter with respect to amounts not representing reasonable compensation (as determined by the Secretary) with respect to a mortgage servicing contract.\nA financial statement net operating loss for any taxable year shall be a financial statement net operating loss carryover to each taxable year following the taxable year of the loss. The portion of such loss which shall be carried to subsequent taxable years shall be the amount of such loss remaining (if any) after the application of paragraph (1).\nFor purposes of this subsection, the term “financial statement net operating loss” means the amount of the net loss (if any) set forth on the corporation’s applicable financial statement (determined after application of subsection (c) and without regard to this subsection) for taxable years ending after  December 31, 2019 .\nThe Secretary shall provide for such regulations and other guidance as necessary to carry out the purposes of this section, including regulations and other guidance relating to the effect of the rules of this section on partnerships with income taken into account by an applicable corporation.\nThe date of enactment of this section, referred to in subsec. (c)(14)(B)(ii), is the date of enactment of  Pub. L. 117–169 , which was approved  Aug. 16, 2022 .\nSection applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as an Effective Date of 2022 Amendment note under  section 11 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ALTERNATIVE MINIMUM TAX'},
  'content': 'With respect to each property (as defined in section 614), the excess of the deduction for depletion allowable under section 611 for the taxable year over the adjusted basis of the property at the end of the taxable year (determined without regard to the depletion deduction for the taxable year). This paragraph shall not apply to any deduction for depletion computed in accordance with section 613A(c).\nWith respect to all oil, gas, and geothermal properties of the taxpayer, the amount (if any) by which the amount of the excess intangible drilling costs arising in the taxable year is greater than 65 percent of the net income of the taxpayer from oil, gas, and geothermal properties for the taxable year.\nThis paragraph shall not apply to any taxpayer which is not an integrated oil company (as defined in section 291(b)(4)).\nThe reduction in alternative minimum taxable income by reason of clause (i) for any taxable year shall not exceed 40 percent of the alternative minimum taxable income for such year determined without regard to clause (i) and the alternative tax net operating loss deduction under section 56(a)(4).\nInterest on specified private activity bonds reduced by any deduction (not allowable in computing the regular tax) which would have been allowable if such interest were includible in gross income.\nUnder regulations prescribed by the Secretary, any exempt-interest dividend (as defined in section 852(b)(5)(A)) shall be treated as interest on a specified private activity bond to the extent of its proportionate share of the interest on such bonds received by the company paying such dividend.\nFor purposes of this part, the term “specified private activity bond” means any private activity bond (as defined in section 141) which is issued after  August 7, 1986 , and the interest on which is not includible in gross income under section 103.\nFor purposes of clause (i), the term “private activity bond” shall not include any qualified 501(c)(3) bond (as defined in section 145).\nFor purposes of clause (i), the term “private activity bond” shall not include any refunding bond (whether a current or advance refunding) if the refunded bond (or in the case of a series of refundings, the original bond) was issued before  August 8, 1986 .\nFor purposes of clause (i), the term “private activity bond” shall not include any bond issued after  December 31, 2008 , and before  January 1, 2011 .\nFor purposes of subclause (I), a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).\nSubclause (II) shall not apply to any refunding bond which is issued to refund any bond which was issued after  December 31, 2003 , and before  January 1, 2009 .\nThe amounts which would be treated as items of tax preference with respect to the taxpayer under paragraphs (2), (3), (4), and (12) of this subsection (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986). The preceding sentence shall not apply to any property to which section 56(a)(1) or (5) applies.\nAn amount equal to 7 percent of the amount excluded from gross income for the taxable year under section 1202.\nThe term “straight line recovery of intangibles”, when used with respect to intangible drilling and development costs for any well, means (except in the case of an election under paragraph (2)) ratable amortization of such costs over the 120-month period beginning with the month in which production from such well begins.\nIf the taxpayer elects with respect to the intangible drilling and development costs for any well, the term “straight line recovery of intangibles” means any method which would be permitted for purposes of determining cost depletion with respect to such well and which is selected by the taxpayer for purposes of subsection (a)(2).\nThe date of the enactment of this clause, referred to in subsec. (a)(5)(C)(iii), is the date of enactment of  Pub. L. 110–289 , which was approved  July 30, 2008 .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (a)(6), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nA prior section 57, added  Pub. L. 91–172, title III, §\u202f301(a) ,  Dec. 30, 1969 ,  83 Stat. 581 ; amended  Pub. L. 92–178, title III , §§\u202f303(b), 304(a)(1), (b)(1), (d),  Dec. 10, 1971 ,  85 Stat. 522–524 ;  Pub. L. 94–455, title III, §\u202f301(c)(1) –(4)(A), (C), title XIX, §§\u202f1901(b)(33)(A), (B), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1550–1552 , 1800, 1834;  Pub. L. 95–30, title I, §\u202f101(d)(5) , title III, §\u202f308(a), title IV, §\u202f402(a)(5),  May 23, 1977 ,  91 Stat. 133 , 153, 155;  Pub. L. 95–600, title III, §\u202f301(b)(2) , title IV, §§\u202f402(b)(1), 421(b), title VII, §\u202f701(b)(1), (3), (4), (f)(3)(D),  Nov. 6, 1978 ,  92 Stat. 2820 , 2868, 2874, 2898, 2899, 2901;  Pub. L. 95–618, title IV, §\u202f402(b) ,  Nov. 9, 1978 ,  92 Stat. 3202 ;  Pub. L. 96–222, title I , §§\u202f104(a)(4)(E), (F), 107(a)(1)(A),  Apr. 1, 1980 ,  94 Stat. 217 , 222;  Pub. L. 96–596, §\u202f3(a) ,  Dec. 24, 1980 ,  94 Stat. 3475 ;  Pub. L. 97–34, title I, §\u202f121(c)(1) , title II, §§\u202f205, 212(d)(2)(B),  Aug. 13, 1981 ,  95 Stat. 197 , 223, 239;  Pub. L. 97–248, title II , §§\u202f201(b), 204(b),  Sept. 3, 1982 ,  96 Stat. 416 , 426;  Pub. L. 97–354, §\u202f5(a)(14) , (15),  Oct. 19, 1982 ,  96 Stat. 1693 ;  Pub. L. 97–448, title I, §\u202f102(b)(1)(A) , (3), (4),  Jan. 12, 1983 ,  96 Stat. 2369 , 2370;  Pub. L. 98–369, div. A, title I , §§\u202f16(b), 68(c), 111(e)(5)–(7), title V, §\u202f555(a)(2), title VII, §§\u202f711(a)(3)(A), 722(a)(1),  July 18, 1984 ,  98 Stat. 505 , 588, 633, 897, 942, 972;  Pub. L. 99–121, title I, §\u202f103(b)(1)(B) , (7),  Oct. 11, 1985 ,  99 Stat. 509 , 510;  Pub. L. 99–272, title XIII, §\u202f13208(a) ,  Apr. 7, 1986 ,  100 Stat. 321 ;  Pub. L. 99–514, title XVIII , §§\u202f1804(k)(3)(B)–(D), 1809(a)(3),  Oct. 22, 1986 ,  100 Stat. 2809 , 2819, related to items of tax preference, prior to the general revision of this part by  Pub. L. 99–514, §\u202f701(a) .\n2014—Subsec. (a)(1).  Pub. L. 113–295, §\u202f221(a)(10) , substituted “This paragraph” for “Effective with respect to taxable years beginning after  December 31, 1992 , this paragraph”.\nSubsec. (a)(2)(E)(i).  Pub. L. 113–295, §\u202f221(a)(11)(A) , substituted “This paragraph” for “In the case of any taxable year beginning after  December 31, 1992 , this paragraph”.\nSubsec. (a)(2)(E)(ii).  Pub. L. 113–295, §\u202f221(a)(11)(B) , struck out “(30 percent in case of taxable years beginning in 1993)” after “40 percent”.\n2009—Subsec. (a)(5)(C)(vi).  Pub. L. 111–5  added cl. (vi).\n2008—Subsec. (a)(5)(C)(iii) to (v).  Pub. L. 110–289  added cl. (iii) and redesignated former cls. (iii) and (iv) as (iv) and (v), respectively.\n2003—Subsec. (a)(7).  Pub. L. 108–27  substituted “7 percent” for “42 percent” after “An amount equal to” and struck out last sentence which read as follows: “In the case of stock the holding period of which begins after  December 31, 2000  (determined with the application of the last sentence of section 1(h)(2)(B)), the preceding sentence shall be applied by substituting ‘28 percent’ for ‘42 percent’.”\n1998—Subsec. (a)(7).  Pub. L. 105–206  inserted at end “In the case of stock the holding period of which begins after  December 31, 2000  (determined with the application of the last sentence of section 1(h)(2)(B)), the preceding sentence shall be applied by substituting ‘28 percent’ for ‘42 percent’.”\n1997—Subsec. (a)(7).  Pub. L. 105–34  substituted “42 percent” for “one-half”.\n1996—Subsec. (a)(4).  Pub. L. 104–188  struck out par. (4) which read as follows: “ Reserves for losses on bad debts of financial institutions .—In the case of a financial institution to which section 593 applies, the amount by which the deduction allowable for the taxable year for a reasonable addition to a reserve for bad debts exceeds the amount that would have been allowable had the institution maintained its bad debt reserve for all taxable years on the basis of actual experience.”\n1993—Subsec. (a)(6), (7).  Pub. L. 103–66, §\u202f13171(a) , redesignated pars. (7) and (8) as (6) and (7), respectively, and struck out heading and text of former par. (6). Text read as follows:\n“(A)  In general .—The amount by which the deduction allowable under section 170 or 642(c) would be reduced if all capital gain property were taken into account at its adjusted basis.\n“(B)  Capital gain property .—For purposes of subparagraph (A), the term ‘capital gain property’ has the meaning given to such term by section 170(b)(1)(C)(iv). Such term shall not include any property to which an election under section 170(b)(1)(C)(iii) applies. In the case of any taxable year beginning in 1991, such term shall not include any tangible personal property. In the case of a contribution made before  July 1, 1992 , in a taxable year beginning in 1992, such term shall not include any tangible personal property.”\nSubsec. (a)(8).  Pub. L. 103–66, §\u202f13171(a) , redesignated par. (8) as (7).\nPub. L. 103–66, §\u202f13113(b)(1) , added par. (8).\n1992—Subsec. (a)(1).  Pub. L. 102–486, §\u202f1915(a)(1) , inserted at end “Effective with respect to taxable years beginning after  December 31, 1992 , this paragraph shall not apply to any deduction for depletion computed in accordance with section 613A(c).”\nSubsec. (a)(2)(E).  Pub. L. 102–486, §\u202f1915(b)(1) , added subpar. (E).\n1991—Subsec. (a)(6)(B).  Pub. L. 102–227  inserted at end “In the case of a contribution made before  July 1, 1992 , in a taxable year beginning in 1992, such term shall not include any tangible personal property.”\n1990—Subsec. (a)(2)(D)(ii).  Pub. L. 101–508, §\u202f11815(b)(3) , substituted “section 613(e)(2)” for “section 613(e)(3)”.\nSubsec. (a)(4).  Pub. L. 101–508, §\u202f11801(c)(12)(A) , struck out “585 or” after “section”.\nSubsec. (a)(6)(B).  Pub. L. 101–508, §\u202f11344 , inserted at end “In the case of any taxable year beginning in 1991, such term shall not include any tangible personal property.”\n1988—Subsec. (a)(3).  Pub. L. 100–647, §\u202f1007(b)(14)(B) , struck out par. (3) which related to incentive stock options.\nSubsec. (a)(5)(C)(i).  Pub. L. 100–647, §\u202f1007(c)(2) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “For purposes of this part, the term ‘specified private activity bonds’ means any private activity bond (as defined in section 141) issued after  August 7, 1986 .”\nSubsec. (a)(5)(C)(iii).  Pub. L. 100–647, §\u202f1007(c)(1) , inserted “(whether a current or advance refunding)” after “any refunding bond”.\nSubsec. (a)(6)(A).  Pub. L. 100–647, §\u202f1007(c)(3) , inserted “or 642(c)” after “section 170”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–5  applicable to obligations issued after  Dec. 31, 2008 , see  section 1503(c) of Pub. L. 111–5 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 110–289  applicable to bonds issued after  July 30, 2008 , see  section 3022(d)(1) of Pub. L. 110–289 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 108–27  applicable to dispositions on or after  May 6, 2003 , see  section 301(d)(3) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years ending after  May 6, 1997 , see  section 311(d) of Pub. L. 105–34 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  section 13113(b)(1) of Pub. L. 103–66  applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nAmendment by  section 13171(a) of Pub. L. 103–66  applicable to contributions made after  June 30, 1992 , except that in case of any contribution of capital gain property which is not tangible personal property, such amendment applicable only if the contribution is made after  Dec. 31, 1992 , see  section 13171(d) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nAmendment by  Pub. L. 102–486  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 1915(d) of Pub. L. 102–486 , set out as a note under  section 56 of this title .\nAmendment by  section 1007(b)(14)(B) of Pub. L. 100–647  applicable with respect to options exercised after  Dec. 31, 1987 , see  section 1007(b)(14)(C) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  section 1007(c) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, but subsec. (a)(6) not to apply to any deduction attributable to contributions made before  Aug. 16, 1986 , see  section 701(f) of Pub. L. 99–514 , set out as a note under  section 55 of this title .\nFor provisions that nothing in amendment by sections 11801 and 11815 of  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1007(f)(4) ,  Nov. 10, 1988 ,  102 Stat. 3433 , provided that: \n “(A)  If any property to which this paragraph applies is placed in service in a taxable year which begins before  January 1, 1987 , and ends on or after  August 1, 1986 , the item of tax preference determined under section 57(a) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]) with respect to such property shall be the excess of— “(i)  the amount allowable as a deduction for depreciation or amortization for such taxable year, over \n \n “(ii)  the amount which would be determined for such taxable year under the rules of paragraph (1) or (5) (whichever is appropriate) of section 56(a) of the Internal Revenue Code of 1954 (as amended by the Tax Reform Act of 1986 [ Pub. L. 99–514 ]). \n \n \n “(B)  This paragraph shall apply to any property— “(i)  which is described in paragraph (4) or (12) of section 57(a) of the Internal Revenue Code of 1954 (as so in effect), and \n \n “(ii)  to which paragraph (1) or (5) of section 56(a) of the Internal Revenue Code of 1986 would apply if the taxable year referred to in subparagraph (A) began after  December 31, 1986 .”\nFor applicability of amendment by  section 701(a) of Pub. L. 99–514  [enacting this section] notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ALTERNATIVE MINIMUM TAX'},
  'content': 'No loss of the taxpayer for such taxable year from any tax shelter farm activity shall be allowed.\nAny loss from a tax shelter farm activity disallowed under subparagraph (A) shall be treated as a deduction allocable to such activity in the 1st succeeding taxable year.\nIn determining the amount of the loss from any tax shelter farm activity, the adjustments of sections 56 and 57 shall apply.\nThe amount of losses to which subsection (a) or (b) applies shall be reduced by the amount (if any) by which the taxpayer is insolvent as of the close of the taxable year.\nFor purposes of this paragraph, the term “insolvent” means the excess of liabilities over the fair market value of assets.\nIf the taxpayer disposes of his entire interest in any tax shelter farm activity during any taxable year, the amount of the loss attributable to such activity (determined after carryovers under subsection (a)(1)(B)) shall (to the extent otherwise allowable) be allowed for such taxable year in computing alternative minimum taxable income and not treated as a loss from a tax shelter farm activity.\nA prior section 58, added  Pub. L. 91–172, title III, §\u202f301(a) ,  Dec. 30, 1969 ,  83 Stat. 583 ; amended  Pub. L. 92–178, title III, §\u202f308(a) ,  Dec. 10, 1971 ,  85 Stat. 524 ;  Pub. L. 94–455, title III, §\u202f301(d) , title XIX, §§\u202f1901(b)(40), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1553 , 1803, 1834;  Pub. L. 95–600, title IV , §§\u202f421(c), 423(a), title VII, §\u202f701(b)(2),  Nov. 6, 1978 ,  92 Stat. 2875 , 2877, 2898;  Pub. L. 96–222, title I, §\u202f107(a)(1)(C) ,  Apr. 1, 1980 ,  94 Stat. 222 ;  Pub. L. 97–248, title II, §\u202f201(c)(1) , §\u202f201(d)(3), formerly §\u202f201(c)(3),  Sept. 3, 1982 ,  96 Stat. 417 , 419, renumbered §\u202f201(d)(3),  Pub. L. 97–448, title III, §\u202f306(a)(1)(A)(i) ,  Jan. 12, 1983 ,  96 Stat. 2400 ;  Pub. L. 97–354 , §§\u202f3(c), 5(a)(16),  Oct. 19, 1982 ,  96 Stat. 1688 , 1693;  Pub. L. 97–448, title I, §\u202f102(b)(2) ,  Jan. 12, 1983 ,  96 Stat. 2369 ;  Pub. L. 98–369, div. A, title VII, §\u202f711(a)(2) , (3)(B),  July 18, 1984 ,  98 Stat. 942 ;  Pub. L. 99–514, title XVIII, §\u202f1875(a) ,  Oct. 22, 1986 ,  100 Stat. 2894 , related to rules for application of minimum tax for tax preferences, prior to the general revision of this part by  Pub. L. 99–514, §\u202f701(a) .\n2018—Subsec. (a)(2)(A).  Pub. L. 115–141  substituted “461(k)” for “461(j)”.\n2017—Subsec. (a)(3), (4).  Pub. L. 115–97  redesignated par. (4) as (3) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows: “For purposes of paragraph (1), a personal service corporation (within the meaning of section 469(j)(2)) shall be treated as a taxpayer other than a corporation.”\n2014—Subsec. (a)(2)(A).  Pub. L. 113–295, §\u202f221(a)(58)(E) , substituted “section 461(j)” for “section 464(c)”.\nSubsec. (b).  Pub. L. 113–295, §\u202f221(a)(60)(B) , inserted “and” at end of par. (1), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “the provisions of section 469(m) (relating to phase-in of disallowance) shall not apply, and”.\n1988—Subsec. (a)(2).  Pub. L. 100–647, §\u202f1007(d)(1) , struck out “(as modified by section 461(i)(4)(A))” after “section 464(c)” in subpar. (A) and substituted “section 469(c)” for “section 469(d), without regard to paragraph (1)(B) thereof” in subpar. (B).\nSubsec. (a)(3).  Pub. L. 100–647, §\u202f1007(d)(2) , substituted “469(j)(2)” for “469(g)(1)(C)”.\nSubsec. (a)(4).  Pub. L. 100–647, §\u202f1007(d)(3) , added par. (4).\nSubsec. (b).  Pub. L. 100–647, §\u202f1007(d)(4) , added pars. (1) to (3) and struck out former pars. (1) to (3) which read as follows:\n“(1) the adjustments of section 56 shall apply,\n“(2) any deduction to the extent such deduction is an item of tax preference under section 57(a) shall not be taken into account, and\n“(3) the provisions of section 469(m) (relating to phase-in of disallowance) shall not apply.”\n1987—Subsec. (b)(3).  Pub. L. 100–203  substituted “section 469(m)” for “section 469( l )”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection 10212(c) of Pub. L. 100–203  provided that:  “The amendments made by this section [amending this section and sections 163 and 469 of this title] shall take effect as if included in the amendments made by section 501 of the Tax Reform Act of 1986 [ section 501 of Pub. L. 99–514 , see  section 501(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 469 of this title ].”\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as a note under  section 55 of this title .\nPub. L. 101–239, title VII, §\u202f7811(d)(1)(B) ,  Dec. 19, 1989 ,  103 Stat. 2408 , provided that:  “The repeal of section 58(h) of the Internal Revenue Code of 1954 by the Tax Reform Act of 1986 [ Pub. L. 99–514 ] shall be effective only with respect to items of tax preference arising in taxable years beginning after  December 31, 1986 .”\nFor applicability of amendment by  section 701(a) of Pub. L. 99–514  [enacting this section] notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ALTERNATIVE MINIMUM TAX'},
  'content': 'For purposes of this subsection, the term “pre-credit tentative minimum tax” means the amount determined under the first sentence of section 55(b)(1)(A).\nAn election under this paragraph may be made only for the taxpayer’s first taxable year which begins after  December 31, 1997 , and for which the taxpayer claims an alternative minimum tax foreign tax credit.\nAn election under this paragraph, once made, shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\nIn the case of any estate or trust, the alternative minimum taxable income of such estate or trust and any beneficiary thereof shall be determined by applying part I of subchapter J with the adjustments provided in this part.\nIn the case of a regulated investment company to which part I of subchapter M applies or a real estate investment company to which part II of subchapter M applies, between such company or trust and shareholders and holders of beneficial interest in such company or trust.\nIn the case of a common trust fund (as defined in section 584(a)), pro rata among the participants of such fund.\nFor purposes of this section, the term “differently treated item” means any item of tax preference or any other item which is treated differently for purposes of this part than for purposes of computing the regular tax.\nFor purposes of this title, any qualified expenditure to which an election under this paragraph applies shall be allowed as a deduction ratably over the 10-year period (3-year period in the case of circulation expenditures described in section 173) beginning with the taxable year in which such expenditure was made (or, in the case of a qualified expenditure described in paragraph (2)(C), over the 60-month period beginning with the month in which such expenditure was paid or incurred).\nExcept as provided in this subsection, no deduction shall be allowed under any other section for any qualified expenditure to which an election under this subsection applies.\nAn election may be made under paragraph (1) with respect to any portion of any qualified expenditure.\nAny election under this subsection may be revoked only with the consent of the Secretary.\nIn the case of a partnership, any election under paragraph (1) shall be made separately by each partner with respect to the partner’s allocable share of any qualified expenditure. A similar rule shall apply in the case of an S corporation and its shareholders.\nIn the case of any disposition of property to which section 1254 applies (determined without regard to this section), any deduction under paragraph (1) with respect to amounts which are allocable to such property shall, for purposes of section 1254, be treated as a deduction allowable under section 263(c), 616(a), or 617(a), whichever is appropriate.\nIn the case of any disposition of mining property to which section 617(d) applies (determined without regard to this subsection), any deduction under paragraph (1) with respect to amounts which are allocable to such property shall, for purposes of section 617(d), be treated as a deduction allowable under section 617(a).\nAny portion of any qualified expenditure to which an election under paragraph (1) applies shall not be treated as an item of tax preference under section 57(a) and section 56 shall not apply to such expenditure.\nThe Secretary may prescribe regulations under which differently treated items shall be properly adjusted where the tax treatment giving rise to such items will not result in the reduction of the taxpayer’s regular tax for the taxable year for which the item is taken into account or for any other taxable year.\nThe limitations of sections 704(d), 465, and 1366(d) (and such other provisions as may be specified in regulations) shall be applied for purposes of computing the alternative minimum taxable income of the taxpayer for the taxable year with the adjustments of sections 56, 57, and 58.\nFor purposes of this subtitle (other than this part), any amount shall not fail to be treated as wholly exempt from tax imposed by this subtitle solely by reason of being included in alternative minimum taxable income.\nSolely for purposes of determining whether a corporation is an applicable corporation under this paragraph, all adjusted financial statement income of persons treated as a single employer with such corporation under subsection (a) or (b) of section 52 shall be treated as adjusted financial statement income of such corporation, and adjusted financial statement income of such corporation shall be determined without regard to paragraphs (2)(D)(i) and (11) of section 56A(c).\nIf the corporation was in existence for less than 3-taxable years, subparagraph (B) shall be applied on the basis of the period during which such corporation was in existence.\nAdjusted financial statement income for any taxable year of less than 12 months shall be annualized by multiplying the adjusted financial statement income for the short period by 12 and dividing the result by the number of months in the short period.\nAny reference in this subparagraph to a corporation shall include a reference to any predecessor of such corporation.\nIf a corporation is a member of a foreign-parented multinational group for any taxable year, then, solely for purposes of determining whether such corporation meets the average annual adjusted financial statement income test under paragraph (1)(B)(ii)(I) for such taxable year, the adjusted financial statement income of such corporation for such taxable year shall include the adjusted financial statement income of all members of such group. Solely for purposes of this subparagraph, adjusted financial statement income shall be determined without regard to paragraphs (2)(D)(i), (3), (4), and (11) of section 56A(c).\nFor purposes of this paragraph, if a foreign corporation is engaged in a trade or business within the United States, such trade or business shall be treated as a separate domestic corporation that is wholly owned by the foreign corporation.\n’(B)\u202f 1 1 \u202fSo in original.  addressing the application of this subsection to a corporation that experiences a change in ownership.\nFor any taxable year for which an applicable corporation chooses to have the benefits of subpart A of part III of subchapter N, the excess of the amount described in paragraph (1)(A)(i) over the amount described in paragraph (1)(A)(ii) shall increase the amount described in paragraph (1)(A)(i) in any of the first 5 succeeding taxable years to the extent not taken into account in a prior taxable year.\nThe Secretary shall provide for such regulations or other guidance as is necessary to carry out the purposes of this subsection.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2022—Subsec. (k).  Pub. L. 117–169, §\u202f10101(a)(2) , added subsec. (k).\nSubsec. (k)(1)(D).  Pub. L. 117–169, §\u202f13904(a) , amended subpar. (D) generally. Prior to amendment, text of subpar. (D) read as follows:\n“(i)  In general .—Solely for purposes of determining whether a corporation is an applicable corporation under this paragraph, all adjusted financial statement income of persons treated as a single employer with such corporation under subsection (a) or (b) of section 52 (determined with the modifications described in clause (ii)) shall be treated as adjusted financial statement income of such corporation, and adjusted financial statement income of such corporation shall be determined without regard to paragraphs (2)(D)(i) and (11) of section 56A(c).\n“(ii)  Modifications .—For purposes of this subparagraph—\n“(I) section 52(a) shall be applied by substituting ‘component members’ for ‘members’, and\n“(II) for purposes of applying section 52(b), the term ‘trade or business’ shall include any activity treated as a trade or business under paragraph (5) or (6) of section 469(c) (determined without regard to the phrase ‘To the extent provided in regulations’ in such paragraph (6)).\n“(iii)  Component member .—For purposes of this subparagraph, the term ‘component member’ has the meaning given such term by section 1563(b), except that the determination shall be made without regard to section 1563(b)(2).”\nSubsec. ( l ).  Pub. L. 117–169, §\u202f10101(c) , added subsec. ( l ).\n2018—Subsec. (a)(1).  Pub. L. 115–141  substituted “27” for “27(a)” in introductory provisions.\n2017—Subsec. (a)(1)(C).  Pub. L. 115–97, §\u202f12001(b)(3)(C)(i) , substituted “section 55(b)(1) in lieu of the highest rate of tax specified in section 1” for “subparagraph (A)(i) or (B)(i) of section 55(b)(1) (whichever applies) in lieu of the highest rate of tax specified in section 1 or 11 (whichever applies)”.\nSubsec. (a)(2).  Pub. L. 115–97, §\u202f12001(b)(3)(C)(ii) , substituted “means the amount determined under the first sentence of section 55(b)(1)(A).” for “means—\n“(A) in the case of a taxpayer other than a corporation, the amount determined under the first sentence of section 55(b)(1)(A)(i), or\n“(B) in the case of a corporation, the amount determined under section 55(b)(1)(B)(i).”\nSubsec. (b).  Pub. L. 115–97, §\u202f12001(b)(10) , struck out subsec. (b). Text read as follows: “In the case of any corporation for which a credit is allowable for the taxable year under section 30A or 936, alternative minimum taxable income shall not include any income with respect to which a credit is determined under section 30A or 936.”\nSubsec. (f).  Pub. L. 115–97, §\u202f12001(b)(10) , struck out subsec. (f). Text read as follows: “Except as otherwise provided in this part, section 291 (relating to cutback of corporate preferences) shall apply before the application of this part.”\nSubsec. (j)(2)(B).  Pub. L. 115–97, §\u202f11002(d)(4) , substituted “for ‘2016’ in subparagraph (A)(ii)” for “for ‘1992’ in subparagraph (B)”.\n2004—Subsec. (a)(2) to (4).  Pub. L. 108–357  redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which related to limitation on alternative minimum tax foreign tax credit and carryback and carryforward of excess.\n1998—Subsec. (a)(3), (4).  Pub. L. 105–206, §\u202f6011(a) , redesignated par. (3), relating to election to use simplified section 904 limitation, as (4).\nSubsec. (b).  Pub. L. 105–206, §\u202f6023(2) , substituted “credits under section 30A or 936” for “section 936 credit” in heading.\n1997—Subsec. (a)(2)(C).  Pub. L. 105–34, §\u202f1057(a) , struck out subpar. (C) which read as follows:\n“(C)  Exception .—Subparagraph (A) shall not apply to any domestic corporation if—\n“(i) more than 50 percent of the stock of such domestic corporation (by vote and value) is owned by United States persons who are not members of an affiliated group (as defined in section 1504 of such Code) which includes such corporation,\n“(ii) all of the activities of such corporation are conducted in 1 foreign country with which the United States has an income tax treaty in effect and such treaty provides for the exchange of information between such foreign country and the United States,\n“(iii) all of the current earnings and profits of such corporation are distributed at least annually (other than current earnings and profits retained for normal maintenance or capital replacements or improvements of an existing business), and\n“(iv) all of such distributions by such corporation to United States persons are used by such persons in a trade or business conducted in the United States.”\nSubsec. (a)(3).  Pub. L. 105–34, §\u202f1103(a) , added par. (3) relating to election to use simplified section 904 limitation.\nSubsec. (j).  Pub. L. 105–34, §\u202f1201(b)(1) , amended subsec. (j) generally, restating limitation on exemption amount, adding provisions for inflation adjustment of such amount, and deleting provisions relating to limitation based on parental minimum tax and unused parental minimum tax exemption.\n1996—Subsec. (a)(1)(A).  Pub. L. 104–188, §\u202f1703(e)(1) , substituted “the pre-credit tentative minimum tax” for “the amount determined under section 55(b)(1)(A)”.\nSubsec. (a)(1)(C).  Pub. L. 104–188, §\u202f1703(e)(2) , substituted “specified in subparagraph (A)(i) or (B)(i) of section 55(b)(1) (whichever applies)” for “specified in section 55(b)(1)(A)”.\nSubsec. (a)(2)(A)(i).  Pub. L. 104–188, §\u202f1703(e)(1) , substituted “the pre-credit tentative minimum tax” for “the amount determined under section 55(b)(1)(A)”.\nSubsec. (a)(2)(A)(ii).  Pub. L. 104–188, §\u202f1703(e)(3) , substituted “which would be the pre-credit tentative minimum tax” for “which would be determined under section 55(b)(1)(A)”.\nSubsec. (a)(3).  Pub. L. 104–188, §\u202f1703(e)(4) , added par. (3).\nSubsec. (b).  Pub. L. 104–188, §\u202f1601(b)(2)(D) , substituted “section 30A or 936, alternative minimum taxable income shall not include any income with respect to which a credit is determined under section 30A or 936.” for “section 936, alternative minimum taxable income shall not include any amount with respect to which the requirements of subparagraph (A) or (B) of section 936(a)(1) are met.”\nSubsec. (j)(1)(B).  Pub. L. 104–188, §\u202f1704(m)(3) , substituted “twice the amount in effect for the taxable year under section 63(c)(5)(A)” for “$1,000”.\nSubsec. (j)(3)(B).  Pub. L. 104–188, §\u202f1702(a)(1) , substituted “section 1(g)(3)(B)” for “section 1(i)(3)(B)”.\n1992—Subsec. (a)(2)(A)(ii).  Pub. L. 102–486  substituted “and section 57(a)(2)(E)” for “and the alternative tax energy preference deduction under section 56(h)”.\n1990—Subsec. (a)(1)(B) to (D).  Pub. L. 101–508, §\u202f11801(c)(2)(D) , inserted “and” at end of subpar. (B), redesignated subpar. (D) as (C), and struck out former subpar. (C) which read as follows: “for purposes of section 904, any increase in alternative minimum taxable income by reason of section 56(c)(1)(A) (relating to adjustment for book income) shall have the same proportionate source (and character) as alternative minimum taxable income determined without regard to such increase, and”.\nSubsec. (a)(2)(A)(ii).  Pub. L. 101–508, §\u202f11531(b)(2) , inserted before period at end “and the alternative tax energy preference deduction under section 56(h)”.\nSubsec. (j).  Pub. L. 101–508, §\u202f11101(d)(3)(A) , substituted “section 1(g)” for “section 1(i)” in pars. (1), (2)(A), (B)(i)(I), (II), (D), and (3).\nSubsec. (j)(1)(B).  Pub. L. 101–508, §\u202f11702(d)(1) , inserted “(or, if greater, the child’s share of the unused parental minimum tax exemption)” before period at end.\nSubsec. (j)(2)(C).  Pub. L. 101–508, §\u202f11101(d)(3)(B) , substituted “section 1(g)(3)(B)” for “section 1(i)(3)(B)”.\nSubsec. (j)(2)(D).  Pub. L. 101–508, §\u202f11702(d)(3) , substituted “paragraphs (3)(D), (5), and (6)” for “paragraphs (5) and (6)”.\nSubsec. (j)(3).  Pub. L. 101–508, §\u202f11702(d)(2) , added par. (3).\n1989—Subsec. (a)(2)(C).  Pub. L. 101–239, §\u202f7612(e)(1) , added subpar. (C).\nSubsec. (e)(1).  Pub. L. 101–239, §\u202f7611(f)(5)(B) , inserted before period at end “(or, in the case of a qualified expenditure described in paragraph (2)(C), over the 60-month period beginning with the month in which such expenditure was paid or incurred)”.\nSubsec. (g).  Pub. L. 101–239, §\u202f7811(d)(1)(A) , substituted “for the taxable year for which the item is taken into account or for any other taxable year” for “for any taxable year”.\nSubsec. (i).  Pub. L. 101–239, §\u202f7611(f)(6) , substituted “amounts” for “interest” in heading and “any amount shall” for “interest shall” in text.\nSubsec. (j)(2)(D).  Pub. L. 101–239, §\u202f7811(j)(7) , substituted “Other rules” for “Others rules” in heading.\n1988—Subsec. (a)(1)(D).  Pub. L. 100–647, §\u202f1007(e)(3) , added subpar. (D).\nSubsec. (e)(2).  Pub. L. 100–647, §\u202f1007(e)(1) , inserted “(determined without regard to section 291)” after “as a deduction”.\nSubsec. (h).  Pub. L. 100–647, §\u202f1007(e)(2) , substituted “taxable year with the adjustments of sections 56, 57, and 58” for “taxable year—\n“(1) with the adjustments of section 56, and\n“(2) by not taking into account any deduction to the extent such deduction is an item of tax preference under section 57(a)”.\nSubsec. (i).  Pub. L. 100–647, §\u202f1007(e)(4) , inserted “(other than this part)” after “of this subtitle” and substituted “subtitle” for “title” before “solely”.\nSubsec. (j).  Pub. L. 100–647, §\u202f1014(e)(5)(A) , added subsec. (j).\nAmendment by section 10101(a)(2), (c) of  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by  section 11002(d)(4) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by section 12001(b)(3)(C), (10) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 421(b) of Pub. L. 108–357 , set out as a note under  section 53 of this title .\nAmendment by  section 6023(2) of Pub. L. 105–206  effective  July 22, 1998 , see  section 6023(32) of Pub. L. 105–206 , set out as a note under  section 34 of this title .\nAmendment by  section 6011(a) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title X, §\u202f1057(b) ,  Aug. 5, 1997 ,  111 Stat. 945 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XI, §\u202f1103(b) ,  Aug. 5, 1997 ,  111 Stat. 966 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title XII, §\u202f1201(c) ,  Aug. 5, 1997 ,  111 Stat. 994 , provided that:  “The amendments made by this section [amending this section and sections 63 and 6103 of this title] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by  section 1601(b)(2)(D) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , except as otherwise provided, see  section 1601(c) of Pub. L. 104–188 , set out as a note under  section 55 of this title .\nAmendment by  section 1702(a)(1) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  section 1703(e) of Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  section 1704(m)(3) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1704(m)(4) of Pub. L. 104–188 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 102–486  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 1915(d) of Pub. L. 102–486 , set out as a note under  section 56 of this title .\nAmendment by  section 11101(d)(3) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nAmendment by  section 11531(b)(2) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11531(c) of Pub. L. 101–508 , set out as a note under  section 56 of this title .\nPub. L. 101–508, title XI, §\u202f11702(j) ,  Nov. 5, 1990 ,  104 Stat. 1388–516 , provided that:  “Any amendment made by this section [amending this section and sections 135, 216, 355, 367, 447, 453B, 468B, 2056, 2056A, 2523, 4980B, and 6114 of this title] shall take effect as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988 [ Pub. L. 100–647 ] to which such amendment relates.”\nAmendment by  section 7611(f)(6) of Pub. L. 101–239  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 7611(g)(1) of Pub. L. 101–239 , set out as a note under  section 56 of this title .\nAmendment by  section 7611(f)(5)(B) of Pub. L. 101–239  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 1989 , see  section 7611(g)(2) of Pub. L. 101–239 , set out as a note under  section 56 of this title .\nPub. L. 101–239, title VII, §\u202f7612(e)(2) ,  Dec. 19, 1989 ,  103 Stat. 2375 , provided that: \n “(A)   In general .— The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  March 31, 1990 . \n \n “(B)   Special rule for year which includes  march 31, 1990 .— In the case of any taxable year (of a corporation described in subparagraph (C) of section 59(a)(2) of the Internal Revenue Code of 1986 (as added by paragraph (1))) which begins after  December 31, 1989 , and includes  March 31, 1990 , the amount determined under clause (ii) of section 59(a)(2)(A) of such Code shall be an amount which bears the same ratio to the amount which would have been determined under such clause without regard to this subparagraph as the number of days in such taxable year on or before  March 31, 1990 , bears to the total number of days in such taxable year.”\nAmendment by section 7811(d)(1)(A), (j)(7) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 1007(e) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1014(e)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3562 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as a note under  section 55 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11801 of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1007(f)(5) ,  Nov. 10, 1988 ,  102 Stat. 3434 , provided that:  “In determining the amount of the alternative minimum tax foreign tax credit under section 59 of the 1986 Code, there shall not be taken into account any taxes paid or accrued in a taxable year beginning after  December 31, 1986 , which are treated under section 904(c) of the 1986 Code as paid or accrued in a taxable year beginning on or before  December 31, 1986 .”\nFor applicability of amendment by  section 701(a) of Pub. L. 99–514  [enacting this section] notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASE EROSION AND ANTI-ABUSE TAX'},
  'content': 'There is hereby imposed on each applicable taxpayer for any taxable year a tax equal to the base erosion minimum tax amount for the taxable year. Such tax shall be in addition to any other tax imposed by this subtitle.\nIn the case of a taxpayer described in subparagraph (B) who is an applicable taxpayer for any taxable year, the percentage otherwise in effect under paragraphs (1)(A) and (2)(A) shall each be increased by one percentage point.\nThe amount not taken into account in computing modified taxable income by reason of clause (i) shall be reduced under rules similar to the rules under section 163(j)(5)(B) (as in effect before the date of the enactment of the Tax Cuts and Jobs Act).\nFor purposes of applying paragraph (1), in the case of a taxpayer to which section 163(j) applies for the taxable year, the reduction in the amount of interest for which a deduction is allowed by reason of such subsection shall be treated as allocable first to interest paid or accrued to persons who are not related parties with respect to the taxpayer and then to such related parties.\nThe term “base erosion payment” means any amount paid or accrued by the taxpayer to a foreign person which is a related party of the taxpayer and with respect to which a deduction is allowable under this chapter.\nSuch term shall also include any amount paid or accrued by the taxpayer to a foreign person which is a related party of the taxpayer in connection with the acquisition by the taxpayer from such person of property of a character subject to the allowance for depreciation (or amortization in lieu of depreciation).\nSuch term shall also include any premium or other consideration paid or accrued by the taxpayer to a foreign person which is a related party of the taxpayer for any reinsurance payments which are taken into account under sections 803(a)(1)(B) or 832(b)(4)(A).\nSuch term shall also include any amount paid or accrued by the taxpayer with respect to a person described in subparagraph (B) which results in a reduction of the gross receipts of the taxpayer.\nThe term “surrogate foreign corporation” has the meaning given such term by section 7874(a)(2)(B) but does not include a foreign corporation treated as a domestic corporation under section 7874(b).\nThe term “expanded affiliated group” has the meaning given such term by section 7874(c)(1).\nIn the case of a foreign person the gross receipts of which are taken into account for purposes of paragraph (1)(B), only gross receipts which are taken into account in determining income which is effectively connected with the conduct of a trade or business within the United States shall be taken into account. In the case of a taxpayer which is a foreign person, the preceding sentence shall not apply to the gross receipts of any United States person which are aggregated with the taxpayer’s gross receipts by reason of paragraph (3).\nRules similar to the rules of subparagraphs (B), (C), and (D) of section 448(c)(3) shall apply in determining gross receipts for purposes of this section.\nAll persons treated as a single employer under subsection (a) of section 52 shall be treated as 1 person for purposes of this subsection and subsection (c)(4), except that in applying section 1563 for purposes of section 52, the exception for foreign corporations under section 1563(b)(2)(C) shall be disregarded.\nFor purposes of this section, the term “foreign person” has the meaning given such term by section 6038A(c)(3).\nExcept as provided in paragraph (3), any qualified derivative payment shall not be treated as a base erosion payment.\nNo payments shall be treated as qualified derivative payments under subparagraph (A) for any taxable year unless the taxpayer includes in the information required to be reported under section 6038B(b)(2) with respect to such taxable year such information as is necessary to identify the payments to be so treated and such other information as the Secretary determines necessary to carry out the provisions of this subsection.\nExcept as otherwise provided by the Secretary, for purposes of this part, American depository receipts (and similar instruments) with respect to shares of stock in foreign corporations shall be treated as shares of stock in such foreign corporations.\nSuch term shall not include any insurance, annuity, or endowment contract issued by an insurance company to which subchapter L applies (or issued by any foreign corporation to which such subchapter would apply if such foreign corporation were a domestic corporation).\nSection 15(a) of the Securities Exchange Act of 1934, referred to in subsec. (b)(3)(B)(ii), is classified to section 78 o (a) of Title 15, Commerce and Trade.\nThe date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (c)(2)(B)(ii), probably means the date of enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\nA prior section 59A, added  Pub. L. 99–499, title V, §\u202f516(a) ,  Oct. 17, 1986 ,  100 Stat. 1770 ; amended  Pub. L. 100–647, title II, §\u202f2001(c)(1) , (3)(B),  Nov. 10, 1988 ,  102 Stat. 3594 ;  Pub. L. 101–508, title XI , §§\u202f11231(a)(1)(A), 11531(b)(3), 11801(c)(2)(E),  Nov. 5, 1990 ,  104 Stat. 1388–444 , 1388–490, 1388–523;  Pub. L. 102–486, title XIX, §\u202f1915(c)(4) ,  Oct. 24, 1992 ,  106 Stat. 3024 , related to environmental tax, prior to repeal by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(12)(A) ,  Dec. 19, 2014 ,  128 Stat. 4038 .\nSection applicable to base erosion payments (as defined in subsec. (d) of this section) paid or accrued in taxable years beginning after  Dec. 31, 2017 , see  section 14401(e) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 26 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, added  Pub. L. 100–360, title I, §\u202f111(a) ,  July 1, 1988 ,  102 Stat. 690 , provided for imposition of a supplemental medicare premium.\nPub. L. 101–234, title I, §\u202f102(d) ,  Dec. 13, 1989 ,  103 Stat. 1981 , provided that: \n “(1)   In general .— Except as provided in this subsection, the provisions of this section [repealing  section 1395i–1a of Title 42 , The Public Health and Welfare, enacting provisions set out as notes under  section 6050F of this title  and  section 1395t of Title 42 , and repealing provisions set out as a note under  section 1395i–1a of Title 42 ] shall take effect  January 1, 1990 . \n \n “(2)   Repeal of supplemental medicare premium .— The repeal of section 111 of MCCA [ Pub. L. 100–360 , which enacted this section, amended  section 6050F of this title , and enacted provisions set out as notes below] shall apply to taxable years beginning after  December 31, 1988 .”\nPub. L. 100–360, title I, §\u202f111(e) ,  July 1, 1988 ,  102 Stat. 698 , which provided that the enactment of this section and the amendment of  section 6050F of this title  applied to taxable years beginning after  December 31, 1988 , and that in case of a taxable year beginning in 1989, the premium imposed by this section should not be treated as a tax for purposes of applying  section 6654 of this title , was repealed by  Pub. L. 101–234, title I, §\u202f102(a) ,  Dec. 13, 1989 ,  103 Stat. 1980 .\nPub. L. 100–360, title I, §\u202f111(d) ,  July 1, 1988 ,  102 Stat. 697 , which provided that in the case of calendar year 1993 or any calendar year thereafter (1) not later than July 1 of such calendar year, the Secretary of the Treasury or his delegate was required to make an announcement of the estimated supplemental premium rate under this section for taxable years beginning in the following calendar year, and (2) not later than October 1 of such calendar year, the Secretary of the Treasury or his delegate was required to make an announcement of the actual supplemental premium rate under this section for such taxable years, was repealed by  Pub. L. 101–234, title I, §\u202f102(a) ,  Dec. 13, 1989 ,  103 Stat. 1980 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following).\n2017—Subsec. (a)(8) to (15).  Pub. L. 115–97  redesignated pars. (9) to (15) as (8) to (14), respectively, and struck out former par. (8) which read as follows: “Alimony and separate maintenance payments;”.\n1984—Subsec. (a)(1).  Pub. L. 98–369  inserted reference to fringe benefits.\nPub. L. 115–97, title I, §\u202f11051(c) ,  Dec. 22, 2017 ,  131 Stat. 2090 , provided that:  \n “The amendments made by this section [amending this section and sections 62, 121, 152, 219, 220, 223, 382, 408, 3402, 6724, and 7701 of this title and repealing sections 71, 215, and 682 of this title] shall apply to— \n “(1)  any divorce or separation instrument (as defined in section 71(b)(2) of the Internal Revenue Code of 1986 as in effect before the date of the enactment of this Act [ Dec. 22, 2017 ]) executed after  December 31, 2018 , and \n \n “(2)  any divorce or separation instrument (as so defined) executed on or before such date and modified after such date if the modification expressly provides that the amendments made by this section apply to such modification.”\nAmendment by  Pub. L. 98–369  effective  Jan. 1, 1985 , see  section 531(h) of Pub. L. 98–369 , set out as an Effective Date note under  section 132 of this title .\nPub. L. 95–615, §\u202f210(a) ,  Nov. 8, 1978 ,  92 Stat. 3109 , provided that:  “Title I of this Act [probably means sections 1 to 8 of  Pub. L. 95–615 , see Short Title of 1978 Amendment note under  section 1 of this title ] (other than sections 4 and 5 thereof) [amending  section 167 of this title , enacting provisions set out as notes under this section and sections 61 and 62 of this title, and amending provisions set out as notes under sections 117, 167, and 382 of this title] shall cease to have effect on the day after the date of the enactment of this Act [ Nov. 8, 1978 ].”\nPub. L. 95–427, §\u202f1 ,  Oct. 7, 1978 ,  92 Stat. 996 , as amended by  Pub. L. 96–167, §\u202f1 ,  Dec. 29, 1979 ,  93 Stat. 1275 ;  Pub. L. 97–34, title VIII, §\u202f801 ,  Aug. 13, 1981 ,  95 Stat. 349 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— No fringe benefit regulation shall be issued— “(1)  in final form on or after  May 1, 1978 , and on or before  December 31, 1983 , or \n \n “(2)  in proposed or final form on or after  May 1, 1978 , if such regulation has an effective date on or before  December 31, 1983 . \n \n \n “(b)   Definition of Fringe Benefit Regulation .— For purposes of subsection (a), the term ‘fringe benefit regulation’ means a regulation providing for the inclusion of any fringe benefit in gross income by reason of section 61 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nPub. L. 95–615, §\u202f3 ,  Nov. 8, 1978 ,  92 Stat. 3097 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that no regulations be issued in final form on or after  Oct. 1, 1977 , and before  July 1, 1978 , providing for inclusion of any fringe benefit in gross income by reason of section 61 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], ceased to have effect on the day after  Nov. 8, 1978 , pursuant to section 210(a) of that Act.\nPub. L. 98–369, div. A, title X, §\u202f1026 ,  July 18, 1984 ,  98 Stat. 1031 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— In the case of any transfer of property subject to gift tax made before  March 4, 1981 , for purposes of subtitle A of the Internal Revenue Code of 1986 [formerly I.R.C. 1954,  26 U.S.C. 1  et seq.], gross income of the donor shall not include any amount attributable to the donee’s payment of (or agreement to pay) any gift tax imposed with respect to such gift. \n \n “(b)   Gift Tax Defined .— For purposes of subsection (a), the term ‘gift tax’ means— “(1)  the tax imposed by chapter 12 of such Code [ 26 U.S.C. 2501  et seq.], and \n \n “(2)  any tax imposed by a State (or the District of Columbia) on transfers by gifts. \n \n \n “(c)   Statute of Limitations .— If refund or credit of any overpayment of tax resulting from subsection (a) is prevented on the date of the enactment of this Act [ July 18, 1984 ] (or at any time within 1 year after such date) by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to subsection (a)) may nevertheless be made or allowed if claim therefor is filed within 1 year after the date of the enactment of this Act.”\nPub. L. 98–4 ,  Mar. 11, 1983 ,  97 Stat. 7 , as amended by  Pub. L. 98–369, div. A, title X, §\u202f1061(a) ,  July 18, 1984 ,  98 Stat. 1046 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 ;  Pub. L. 100–647, title VI, §\u202f6252(a)(1) ,  Nov. 10, 1988 ,  102 Stat. 3752 , provided that: \n “SECTION 1.  SHORT TITLE. “This Act may be cited as the ‘Payment-in-Kind Tax Treatment Act of 1983’. \n \n \n “SEC. 2.  INCOME TAX TREATMENT OF AGRICULTURAL COMMODITIES RECEIVED UNDER A 1983 PAYMENT-IN-KIND PROGRAM. “(a)   Income Tax Deferral, Etc .— Except as otherwise provided in this Act, for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]— “(1)  a qualified taxpayer shall not be treated as having realized income when he receives a commodity under a 1983 payment-in-kind program, \n \n “(2)  such commodity shall be treated as if it were produced by such taxpayer, and \n \n “(3)  the unadjusted basis of such commodity in the hands of such taxpayer shall be zero. \n \n \n “(b)   Effective Date .— This section shall apply to taxable years ending after  December 31, 1982 , but only with respect to commodities received for the 1983 crop year. \n \n \n “SEC. 3.  LAND DIVERTED UNDER 1983 PAYMENT-IN-KIND PROGRAM TREATED AS USED IN FARMING BUSINESS, ETC. “(a)   General Rule .— For purposes of the provisions specified in subsection (b), in the case of any land diverted from the production of an agricultural commodity under a 1983 payment-in-kind program— “(1)  such land shall be treated as used during the 1983 crop year by the qualified taxpayer in the active conduct of the trade or business of farming, and \n \n “(2)  any qualified taxpayer who materially participates in the diversion and devotion to conservation uses required under a 1983 payment-in-kind program shall be treated as materially participating in the operation of such land during such crop year. \n \n \n “(b)   Provisions to Which Subsection  (a)  Applies .— The provisions specified in this subsection are— “(1)  section 2032A of the Internal Revenue Code of 1986 (relating to valuation of certain farm, etc., real property), \n \n “(2)  section 6166 of such Code (relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business), \n \n “(3)  chapter 2 of such Code (relating to tax on self-employment income), and \n \n “(4)  title II of the Social Security Act [ 42 U.S.C. 401  et seq.] (relating to Federal old-age, survivors, and disability insurance benefits). \n \n \n \n “SEC. 4.  ANTIABUSE RULES. “(a)   General Rule .— In the case of any person, sections 2 and 3 of this Act shall not apply with respect to any land acquired by such person after  February 23, 1983 , unless such land was acquired in a qualified acquisition. \n \n “(b)   Qualified Acquisition .— For purposes of this section, the term ‘qualified acquisition’ means any acquisition— “(1)  by reason of the death of a qualified transferor, \n \n “(2)  by reason of a gift from a qualified transferor, or \n \n “(3)  from a qualified transferor who is a member of the family of the person acquiring the land. \n \n \n “(c)   Definitions and Special Rules .— For purposes of this section— “(1)   Qualified transferor .— The term ‘qualified transferor’ means any person— “(A)  who held the land on  February 23, 1983 , or \n \n “(B)  who acquired the land after  February 23, 1983 , in a qualified acquisition. \n \n \n “(2)   Member of family .— The term ‘member of the family’ has the meaning given such term by section 2032A(e)(2) of the Internal Revenue Code of 1986. \n \n “(3)   Mere change in form of business .— Subsection (a) shall not apply to any change in ownership by reason of a mere change in the form of conducting the trade or business so long as the land is retained in such trade or business and the person holding the land before such change retains a direct or indirect 80-percent interest in such land. \n \n “(4)   Treatment of certain acquisitions of right to the crop .— The acquisition of a direct or indirect interest in 80 percent or more of the crop from any land shall be treated as an acquisition of such land. \n \n \n \n “SEC. 5.  DEFINITIONS AND SPECIAL RULES. “(a)   General Rule .— For purposes of this Act— “(1)  1983  payment-in-kind program.— The term ‘1983 payment-in-kind program’ means any program for the 1983 crop year— “(A)  under which the Secretary of Agriculture (or his delegate) makes payments in kind of any agricultural commodity to any person in return for— “(i)  the diversion of farm acreage from the production of an agricultural commodity, and \n \n “(ii)  the devotion of such acreage to conservation uses, and \n \n \n “(B)  which the Secretary of Agriculture certifies to the Secretary of the Treasury as being described in subparagraph (A). \n \n \n “(2)   Crop year .— The term ‘1983 crop year’ means the crop year for any crop the planting or harvesting period for which occurs during 1983. The term ‘1984 crop year’ means the crop year for wheat the planting and harvesting period for which occurs during 1984. \n \n “(3)   Qualified taxpayer .— The term ‘qualified taxpayer’ means any producer of agricultural commodities (within the meaning of the 1983 payment-in-kind programs) who receives any agricultural commodity in return for meeting the requirements of clauses (i) and (ii) of paragraph (1)(A). \n \n “(4)   Receipt includes right to receive, etc .— A right to receive (or other constructive receipt of) a commodity shall be treated the same as actual receipt of such commodity. \n \n “(5)   Amounts received by the taxpayer as reimbursement for storage .— A qualified taxpayer reporting on the cash receipts and disbursements method of accounting shall not be treated as being entitled to receive any amount as reimbursement for storage of commodities received under a 1983 payment-in-kind program until such amount is actually received by the taxpayer. \n \n “(6)   Commodity credit loans treated separately .— Subsection (a) of section 2 shall apply to the receipt of any commodity under a 1983 payment-in-kind program separately from, and without taking into account, any related transaction or series of transactions involving the satisfaction of loans from the Commodity Credit Corporation. \n \n \n “(b)   Extension to Wheat Planted and Harvested in  1984.— In the case of wheat— “(1)  any reference in this Act to the 1983 crop year shall include a reference to the 1984 crop year, and \n \n “(2)  any reference to the 1983 payment-in-kind program shall include a reference to any program for the 1984 year for wheat which meets the requirements of subparagraphs (A) and (B) of subsection (a)(1). \n \n \n “(c)   Regulations .— The Secretary of the Treasury or his delegate (after consultation with the Secretary of Agriculture) shall prescribe such regulations as may be necessary to carry out the purposes of this Act, including (but not limited to) such regulations as may be necessary to carry out the purposes of this Act where the commodity is received by a cooperative on behalf of the qualified taxpayer.”\n“This Act may be cited as the ‘Payment-in-Kind Tax Treatment Act of 1983’.\n[ Pub. L. 98–369, div. A, title X, §\u202f1061(b) ,  July 18, 1984 ,  98 Stat. 1047 , provided that:  “The amendments made by this section [amending  Pub. L. 98–4  set out above] shall apply with respect to commodities received for the 1984 crop year (as defined in section 5(a)(2) of the Payment-in-Kind Tax Treatment Act of 1983 [ Pub. L. 98–4 , set out above] as amended by subsection (a)).” \n]\nPub. L. 94–455, title XXI, §\u202f2117 ,  Oct. 4, 1976 ,  90 Stat. 1911 , as amended by  Pub. L. 95–600, title I, §\u202f162 ,  Nov. 6, 1978 ,  92 Stat. 2810 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that no amount be included in gross income of an individual for purposes of  26 U.S.C. 61  by reason of the discharge made before  Jan. 1, 1983  of the indebtedness of the individual under a student loan if the discharge was pursuant to a provision of the loan under which the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain geographical areas or for certain classes of employers.\nPub. L. 94–455, title XXI, §\u202f2119 ,  Oct. 4, 1976 ,  90 Stat. 1912 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— With respect to taxable years beginning on or before the date on which regulations dealing with prepublication expenditures are issued after the date of the enactment of this Act [ Oct. 4, 1976 ], the application of sections 61 (as it relates to cost of goods sold), 162, 174, 263, and 471 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to any prepublication expenditure shall be administered— “(1)  without regard to Revenue Ruling 73–395, and \n \n “(2)  in the manner in which such sections were applied consistently by the taxpayer to such expenditures before the date of the issuance of such revenue ruling. \n \n \n “(b)   Regulations To Be Prospective Only .— Any regulations issued after the date of the enactment of this Act [ Oct. 4, 1976 ] which deal with the application of sections 61 (as it relates to cost of goods sold), 162, 174, 263, and 471 of the Internal Revenue Code of 1986 to prepublication expenditures shall apply only with respect to taxable years beginning after the date on which such regulations are issued. \n \n “(c)   Prepublication Expenditures Defined .— For purposes of this section, the term ‘prepublication expenditures’ means expenditures paid or incurred by the taxpayer (in connection with his trade or business of publishing) for the writing, editing, compiling, illustrating, designing, or other development or improvement of a book, teaching aid, or similar product.”\nPub. L. 86–780, §\u202f5 ,  Sept. 14, 1960 ,  74 Stat. 1013 , provided for the exclusion from gross income of any amount received after  Dec. 31, 1949 , and before  Oct. 1, 1955 , by employees of certain corporations as reimbursement for moving expenses, and the refund or credit of any overpayments.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': '“This Act may be cited as the ‘Payment-in-Kind Tax Treatment Act of 1983’.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'The deductions allowed by this chapter (other than by part VII of this subchapter) which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee.\nThe deductions allowed by part VI (section 161 and following) which consist of expenses paid or incurred by the taxpayer, in connection with the performance by him of services as an employee, under a reimbursement or other expense allowance arrangement with his employer. The fact that the reimbursement may be provided by a third party shall not be determinative of whether or not the preceding sentence applies.\nThe deductions allowed by section 162 which consist of expenses paid or incurred by a qualified performing artist in connection with the performances by him of services in the performing arts as an employee.\nThe deductions allowed by section 162 which consist of expenses paid or incurred with respect to services performed by an official as an employee of a State or a political subdivision thereof in a position compensated in whole or in part on a fee basis.\nThe deductions allowed by section 162 which consist of expenses, determined at a rate not in excess of the rates for travel expenses (including per diem in lieu of subsistence) authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, paid or incurred by the taxpayer in connection with the performance of services by such taxpayer as a member of a reserve component of the Armed Forces of the United States for any period during which such individual is more than 100 miles away from home in connection with such services.\nThe deductions allowed by part VI (sec. 161 and following) as losses from the sale or exchange of property.\nThe deductions allowed by part VI (sec. 161 and following), by section 212 (relating to expenses for production of income), and by section 611 (relating to depletion) which are attributable to property held for the production of rents or royalties.\nIn the case of a life tenant of property, or an income beneficiary of property held in trust, or an heir, legatee, or devisee of an estate, the deduction for depreciation allowed by section 167 and the deduction allowed by section 611.\nIn the case of an individual who is an employee within the meaning of section 401(c)(1), the deduction allowed by section 404.\nThe deduction allowed by section 219 (relating to deduction of certain retirement savings).\nThe deductions allowed by section 165 for losses incurred in any transaction entered into for profit, though not connected with a trade or business, to the extent that such losses include amounts forfeited to a bank, mutual savings bank, savings and loan association, building and loan association, cooperative bank or homestead association as a penalty for premature withdrawal of funds from a time savings account, certificate of deposit, or similar class of deposit.\nThe deduction allowed by section 194.\nThe deduction allowed by section 165 for the repayment to a trust described in paragraph (9) or (17) of section 501(c) of supplemental unemployment compensation benefits received from such trust if such repayment is required because of the receipt of trade readjustment allowances under section 231 or 232 of the Trade Act of 1974 ( 19 U.S.C. 2291  and 2292).\nAny deduction allowable under this chapter by reason of an individual remitting any portion of any jury pay to such individual’s employer in exchange for payment by the employer of compensation for the period such individual was performing jury duty. For purposes of the preceding sentence, the term “jury pay” means any payment received by the individual for the discharge of jury duty.\nThe deduction allowed by section 217.\nThe deduction allowed by section 220.\nThe deduction allowed by section 221.\nThe deduction allowed by section 223.\nAny deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any action involving a claim of unlawful discrimination (as defined in subsection (e)) or a claim of a violation of subchapter III of chapter 37 of title 31, United States Code, or a claim made under section 1862(b)(3)(A) of the Social Security Act ( 42 U.S.C. 1395y(b)(3)(A) ). The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer’s gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.\nSubparagraph (A) shall not apply to any deduction in excess of the amount includible in the taxpayer’s gross income for the taxable year on account of such award.\nAn individual shall not be treated as performing services in the performing arts as an employee for any employer during any taxable year unless the amount received by such individual from such employer for the performance of such services during the taxable year equals or exceeds $200.\nExcept in the case of a husband and wife who lived apart at all times during the taxable year, if the taxpayer is married at the close of the taxable year, subsection (a)(2)(B) shall apply only if the taxpayer and his spouse file a joint return for the taxable year.\nFor purposes of this subsection, marital status shall be determined under section 7703(a).\nFor purposes of this subsection, the term “joint return” means the joint return of a husband and wife made under section 6013.\nFor purposes of subsection (a)(2)(D), the term “eligible educator” means, with respect to any taxable year, an individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.\nThe term “school” means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law.\nA deduction shall be allowed under subsection (a)(2)(D) for expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135, 529(c)(1), or 530(d)(2) for the taxable year.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSection 208 of the Congressional Accountability Act of 1995, referred to in subsec. (e)(2), was formerly section 207 of the Act prior to renumbering by  Pub. L. 116–92 , and is classified to  section 1317 of Title 2 , The Congress. A new section 207 of the Act was enacted by  Pub. L. 116–92  and is classified to  section 1316b of Title 2 .  Pub. L. 116–92  amended list of Act sections in subsec. (e)(2) of this section without corresponding amendment of Code citations, see 2019 Amendment note below.\nThe National Labor Relations Act, referred to in subsec. (e)(3), is  act July 5, 1935, ch. 372 ,  49 Stat. 449 , which is classified generally to subchapter II (§\u202f151 et seq.) of chapter 7 of Title 29, Labor. For complete classification of this Act to the Code, see  section 167 of Title 29  and Tables.\nThe Fair Labor Standards Act of 1938, referred to in subsec. (e)(4), is  act June 25, 1938, ch. 676 ,  52 Stat. 1060 , which is classified generally to chapter 8 (§\u202f201 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see  section 201 of Title 29  and Tables.\nThe Education Amendments of 1972, referred to in subsec. (e)(8), is  Pub. L. 92–318 ,  June 23, 1972 ,  86 Stat. 235 . Title IX of the Act, known as the Patsy Takemoto Mink Equal Opportunity in Education Act, is classified principally to chapter 38 (§\u202f1681 et seq.) of Title 20, Education. For complete classification of title IX to the Code, see Short Title note set out under  section 1681 of Title 20  and Tables.\nThe Employee Polygraph Protection Act of 1988, referred to in subsec. (e)(9), is  Pub. L. 100–347 ,  June 27, 1988 ,  102 Stat. 646 , which is classified generally to chapter 22 (§\u202f2001 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 2001 of Title 29  and Tables.\nThe Worker Adjustment and Retraining Notification Act, referred to in subsec. (e)(10), is  Pub. L. 100–379 ,  Aug. 4, 1988 ,  102 Stat. 890 , which is classified generally to chapter 23 (§\u202f2101 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 2101 of Title 29  and Tables.\n2020—Subsec. (a)(18).  Pub. L. 116–260, §\u202f104(b)(2)(A) , struck out par. (18). Text read as follows: “The deduction allowed by section 222.”\nSubsec. (a)(22).  Pub. L. 116–260, §\u202f212(c)(1) , struck out par. (22). Text read as follows: “In the case of taxable years beginning in 2020, the amount (not to exceed $300) of qualified charitable contributions made by an eligible individual during the taxable year.”\nPub. L. 116–136, §\u202f2204(a) , added par. (22).\nSubsec. (f).  Pub. L. 116–260, §\u202f212(c)(2) , struck out subsec. (f) which defined terms relating to qualified charitable contributions.\nPub. L. 116–136, §\u202f2204(b) , added subsec. (f).\n2019—Subsec. (e)(2).  Pub. L. 116–92  substituted “207, or 208” for “or 207”.\n2018—Subsec. (a).  Pub. L. 115–141, §\u202f101(a)(2)(B) , substituted “Any deduction” for “The deduction” in concluding provisions.\nSubsec. (a)(20).  Pub. L. 115–141, §\u202f401(a)(31) , inserted comma after “United States Code”.\nSubsec. (a)(21).  Pub. L. 115–123  amended par. (21) generally. Prior to amendment, text read as follows: “Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any award under section 7623(b) (relating to awards to whistleblowers). The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer’s gross income for the taxable year on account of such award.”\nSubsec. (e)(1).  Pub. L. 115–141, §\u202f401(a)(32) , substituted “( 42 U.S.C. 2000e–16b )” for “( 2 U.S.C. 1202 )”.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f11011(b)(1) , inserted at end of concluding provisions “The deduction allowed by section 199A shall not be treated as a deduction described in any of the preceding paragraphs of this subsection.”\nSubsec. (a)(10).  Pub. L. 115–97, §\u202f11051(b)(2)(A) , struck out par. (10). Text read as follows: “The deduction allowed by section 215.”\nSubsec. (d)(3)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(J) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2015—Subsec. (a)(2)(D).  Pub. L. 114–113, §\u202f104(c) , substituted “educator—” for “educator in connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment, and supplementary materials used by the eligible educator in the classroom.” and added cls. (i) and (ii).\nPub. L. 114–113, §\u202f104(a) , substituted “The deductions” for “In the case of taxable years beginning during 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, or 2014, the deductions”.\nSubsec. (d)(3).  Pub. L. 114–113, §\u202f104(b) , added par. (3).\n2014—Subsec. (a)(2)(D).  Pub. L. 113–295, §\u202f101(a) , substituted “2013, or 2014” for “or 2013”.\nSubsec. (a)(14).  Pub. L. 113–295, §\u202f221(a)(34)(C) , struck out par. (14). Text read as follows: “The deduction allowed by section 179A.”\n2013—Subsec. (a)(2)(D).  Pub. L. 112–240  substituted “2011, 2012, or 2013” for “or 2011”.\n2010—Subsec. (a)(2)(D).  Pub. L. 111–312  substituted “2009, 2010, or 2011” for “or 2009”.\n2008—Subsec. (a)(2)(D).  Pub. L. 110–343  substituted “2007, 2008, or 2009” for “or 2007”.\n2006—Subsec. (a)(2)(D).  Pub. L. 109–432, §\u202f108(a) , substituted “2005, 2006, or 2007” for “or 2005”.\nSubsec. (a)(21).  Pub. L. 109–432, §\u202f406(a)(3) , added par. (21).\n2005—Subsec. (a)(19), (20).  Pub. L. 109–135, §\u202f412(q)(1) , redesignated par. (19) relating to costs involving discrimination suits, etc., as par. (20) and moved to follow par. (19) relating to health savings accounts.\nSubsec. (e).  Pub. L. 109–135, §\u202f412(q)(2) , substituted “subsection (a)(20)” for “subsection (a)(19)” in introductory provisions.\n2004—Subsec. (a)(2)(D).  Pub. L. 108–311  substituted “,\u20002003, 2004, or 2005” for “or 2003”.\nSubsec. (a)(19).  Pub. L. 108–357, §\u202f703(a) , added par. (19) relating to costs involving discrimination suits, etc.\nSubsec. (e).  Pub. L. 108–357, §\u202f703(b) , added subsec. (e).\n2003—Subsec. (a)(2)(E).  Pub. L. 108–121  added subpar. (E).\nSubsec. (a)(19).  Pub. L. 108–173  added par. (19).\n2002—Subsec. (a)(2)(D).  Pub. L. 107–147, §\u202f406(a) , added subpar. (D).\nSubsec. (d).  Pub. L. 107–147, §\u202f406(b) , added subsec. (d).\n2001—Subsec. (a)(18).  Pub. L. 107–16  added par. (18).\n2000—Subsec. (a)(16).  Pub. L. 106–554  amended heading and text of par. (16) generally. Prior to amendment, text read as follows: “The deduction allowed by section 220.”\n1997—Subsec. (a)(2)(C).  Pub. L. 105–34, §\u202f975(a) , added subpar. (C).\nSubsec. (a)(17).  Pub. L. 105–34, §\u202f202(b) , added par. (17).\n1996—Subsec. (a)(8).  Pub. L. 104–188  struck out par. (8) which read as follows: “ Certain portion of lump-sum distributions from pension plans taxed under section 402(d) .—The deduction allowed by section 402(d)(3).”\nSubsec. (a)(16).  Pub. L. 104–191  added par. (16).\n1993—Subsec. (a)(15).  Pub. L. 103–66  added par. (15).\n1992—Subsec. (a)(8).  Pub. L. 102–318  substituted “402(d)” for “402(e)” in heading and in text.\nSubsec. (a)(14).  Pub. L. 102–486  added par. (14).\n1990—Subsec. (a)(13).  Pub. L. 101–508, §\u202f11802(e)(1) , amended par. (13) generally. Prior to amendment, par. (13) read as follows: “The deduction allowed by section 220.”\n1988—Subsec. (a)(2)(A).  Pub. L. 100–647, §\u202f1001(b)(3)(A) , inserted at end “The fact that the reimbursement may be provided by a third party shall not be determinative of whether or not the preceding sentence applies.”\nSubsec. (a)(13).  Pub. L. 100–647, §\u202f6007(b) , added par. (13).\nSubsec. (c).  Pub. L. 100–485  added subsec. (c).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f132(b)(2)(A) , designated existing provisions as subsec. (a) and added heading.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f132(b)(1) , amended par. (2) generally, substituting “Certain trade” for “Trade” in heading and inserting “of employees” in subpar. (A) heading, substituting provision relating to deduction of certain expenses of performing artists for provision relating to deduction of expenses for travel away from home in subpar. (B), and striking out subpar. (C) relating to deduction of travel expenses and subpar. (D) relating to deduction of expenses of outside salesmen.\nSubsec. (a)(3) to (5).  Pub. L. 99–514, §\u202f301(b)(1) , redesignated pars. (4) to (6) as (3) to (5), respectively, and struck out former par. (3) which related to long-term capital gains and read as follows: “The deduction allowed by section 1202.”\nSubsec. (a)(6).  Pub. L. 99–514, §\u202f301(b)(1) , redesignated par. (7) as (6). Former par. (6) redesignated (5).\nPub. L. 99–514, §\u202f1875(c)(3) , struck out “to the extent attributable to contributions made on behalf of such individual” after “section 404”.\nSubsec. (a)(7).  Pub. L. 99–514, §\u202f301(b)(1) , redesignated par. (10) as (7). Former par. (7) redesignated (6).\nSubsec. (a)(8).  Pub. L. 99–514, §\u202f301(b)(1) , redesignated par. (11) as (8). Former par. (8) struck out.\nPub. L. 99–514, §\u202f132(c) , struck out par. (8) which related to moving expense deduction and read as follows: “The deduction allowed by section 217.”\nSubsec. (a)(9) to (15).  Pub. L. 99–514, §\u202f301(b)(1) , redesignated pars. (12) to (15) as (9) to (12), respectively. Former pars. (10) and (11) redesignated (7) and (8), respectively.\nSubsec. (a)(16).  Pub. L. 99–514, §\u202f131(b)(1) , struck out par. (16) which related to deduction for two-earner married couples and read as follows: “The deduction allowed by section 221.”\nSubsec. (b).  Pub. L. 99–514, §\u202f132(b)(2)(B) , added subsec. (b).\n1984—Par. (7).  Pub. L. 98–369, §\u202f491(d)(2) , substituted “and annuity” for “annuity, and bond purchase” in heading, and substituted “the deduction allowed by section 404” for “the deductions allowed by section 404 and section 405(c)” in text.\n1983—Par. (9).  Pub. L. 97–354  repealed par. (9) relating to the deduction allowed by section 1379(b)(3).\n1981—Par. (10).  Pub. L. 97–34, §\u202f311(h)(1) , struck out “and the deduction allowed by section 220 (relating to retirement savings for certain married individuals)” after “retirement savings”.\nPar. (14).  Pub. L. 97–34, §\u202f112(b)(2) , redesignated par. (15) as (14). Former par. (14), relating to deduction for certain expenses of living abroad, was struck out.\nPar. (15).  Pub. L. 97–34, §\u202f112(b)(2) , redesignated par. (16) as (15). Former par. (15) redesignated (14).\nPar. (16).  Pub. L. 97–34 , §§\u202f103(b), 112(b)(2), added par. (16). Former par. (16) redesignated (15).\n1980—Par. (15).  Pub. L. 96–451  added par. (15).\nPar. (16).  Pub. L. 96–608  added par. (16).\n1978—Par. (14).  Pub. L. 95–615  added par. (14).\n1976—Par. (10).  Pub. L. 94–455, §\u202f1501(b)(1) , inserted reference to the deduction allowed by section 220 (relating to retirement savings for certain married individuals).\nPars. (11), (12).  Pub. L. 94–455, §\u202f1901(a)(8) , (9), redesignated par. (11) relating to penalties forfeited because of premature withdrawal of funds from time savings accounts or deposits, as par. (12), and substituted “trade or business, to the extent” for “trade or business to the extent”.\nPar. (13).  Pub. L. 94–455, §\u202f502(a) , added par. (13).\n1974—Par. (10).  Pub. L. 93–406, §\u202f2002(a)(2) , added par. (10).\nPar. (11).  Pub. L. 93–483  added par. (11) relating to penalties forfeited because of premature withdrawal of funds from time savings accounts or deposits. Another par. (11) relating to certain portions of lump-sum distributions from pension plans taxed under  section 402(e) of this title , was added by  Pub. L. 93–406, §\u202f2005(c)(9) .\n1969—Par. (9).  Pub. L. 91–172  added par. (9).\n1964—Par. (8).  Pub. L. 88–272  added par. (8).\n1962—Par. (7).  Pub. L. 87–792  added par. (7).\nAmendment by  section 104(b)(2)(A) of Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nPub. L. 116–260, div. EE, title II, §\u202f212(d) ,  Dec. 27, 2020 ,  134 Stat. 3068 , provided that:  “The amendments made by this section [amending this section and sections 63, 170, 6662, and 6751 of this title] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 116–136, div. A, title II, §\u202f2204(c) ,  Mar. 27, 2020 ,  134 Stat. 345 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2019 .”\nPub. L. 115–141, div. T, §\u202f101(d) ,  Mar. 23, 2018 ,  132 Stat. 1157 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section, sections 63, 172, 199A, 613, and 6662 of this title, and provisions set out as a note under  section 74 of this title ] shall take effect as if included in  section 11011 of Public Law 115–97 . \n \n “(2)   Application of section 199 to certain qualified payments paid after 2017 .— The amendment made by subsection (c) [amending provisions set out as a note under  section 74 of this title ] shall take effect as if included in  section 13305 of Public Law 115–97 .”\nPub. L. 115–123, div. D, title II, §\u202f41107(b) ,  Feb. 9, 2018 ,  132 Stat. 158 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  section 11002(d)(1)(J) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f11011(e) ,  Dec. 22, 2017 ,  131 Stat. 2071 , provided that:  “The amendments made by this section [enacting  section 199A of this title  and amending this section and sections 63, 170, 172, 246, 613, 613A, 3402, and 6662 of this title] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  section 11051(b)(2)(A) of Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f104(d) ,  Dec. 18, 2015 ,  129 Stat. 3046 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2014 . \n \n “(2)   Modifications .— The amendments made by subsections (b) and (c) [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f101(b) ,  Dec. 19, 2014 ,  128 Stat. 4013 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nAmendment by  section 221(a)(34)(C) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title II, §\u202f201(b) ,  Jan. 2, 2013 ,  126 Stat. 2323 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f721(b) ,  Dec. 17, 2010 ,  124 Stat. 3316 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 110–343, div. C, title II, §\u202f203(b) ,  Oct. 3, 2008 ,  122 Stat. 3864 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 109–432, div. A, title I, §\u202f108(b) ,  Dec. 20, 2006 ,  120 Stat. 2939 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 109–432, div. A, title IV, §\u202f406(d) ,  Dec. 20, 2006 ,  120 Stat. 2960 , provided that:  “The amendments made by subsection (a) [amending this section and sections 7443A and 7623 of this title] shall apply to information provided on or after the date of the enactment of this Act [ Dec. 20, 2006 ].”\nPub. L. 108–357, title VII, §\u202f703(c) ,  Oct. 22, 2004 ,  118 Stat. 1548 , provided that:  “The amendments made by this section [amending this section] shall apply to fees and costs paid after the date of the enactment of this Act [ Oct. 22, 2004 ] with respect to any judgment or settlement occurring after such date.”\nPub. L. 108–311, title III, §\u202f307(b) ,  Oct. 4, 2004 ,  118 Stat. 1179 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to expenses paid or incurred in taxable years beginning after  December 31, 2003 .”\nPub. L. 108–173, title XII, §\u202f1201(k) ,  Dec. 8, 2003 ,  117 Stat. 2479 , provided that:  “The amendments made by this section [enacting sections 223 and 4980G of this title, amending this section and sections 106, 125, 220, 848, 3231, 3306, 3401, 4973, 4975, 6051, and 6693 of this title, and renumbering former  section 223 of this title  as 224] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 108–121, title I, §\u202f109(c) ,  Nov. 11, 2003 ,  117 Stat. 1342 , provided that:  “The amendments made by this section [amending this section and  section 162 of this title ] shall apply to amounts paid or incurred in taxable years beginning after  December 31, 2002 .”\nPub. L. 107–147, title IV, §\u202f406(c) ,  Mar. 9, 2002 ,  116 Stat. 44 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 107–16, title IV, §\u202f431(d) ,  June 7, 2001 ,  115 Stat. 69 , provided that:  “The amendments made by this section [enacting  section 222 of this title , amending this section and sections 86, 135, 137, 219, 221, and 469 of this title, and renumbering former  section 222 of this title  as 223] shall apply to payments made in taxable years beginning after  December 31, 2001 .”\nPub. L. 105–34, title II, §\u202f202(e) ,  Aug. 5, 1997 ,  111 Stat. 809 , provided that:  \n “The amendments made by this section [enacting  section 221 of this title , amending this section and  section 6050S of this title , and renumbering former  section 221 of this title  as  section 222 of this title ] shall apply to any qualified education loan (as defined in section 221(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act [ Aug. 5, 1997 ], but only with respect to— \n “(1)  any loan interest payment due and paid after  December 31, 1997 , and \n \n “(2)  the portion of the 60-month period referred to in section 221(d) of the Internal Revenue Code of 1986 (as added by this section) after  December 31, 1997 .”\nPub. L. 105–34, title IX, §\u202f975(b) ,  Aug. 5, 1997 ,  111 Stat. 898 , provided that:  “The amendment made by this section [amending this section] shall apply to expenses paid or incurred in taxable years beginning after  December 31, 1986 .”\nPub. L. 104–191, title III, §\u202f301(j) ,  Aug. 21, 1996 ,  110 Stat. 2052 , provided that:  “The amendments made by this section [enacting sections 220 and 4980E of this title, amending this section and sections 106, 125, 848, 3231, 3306, 3401, 4973, 4975, 6051, and 6693 of this title, and renumbering  section 220 of this title  as section 221] shall apply to taxable years beginning after  December 31, 1996 .”\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nPub. L. 103–66, title XIII, §\u202f13213(e) ,  Aug. 10, 1993 ,  107 Stat. 475 , provided that:  “The amendments made by this section [amending this section and sections 67, 82, 132, 217, 1001, 1016, and 4977 of this title] shall apply to expenses incurred after  December 31, 1993 ; except that the amendments made by subsection (d) [amending sections 82, 132, and 4977 of this title] shall apply to reimbursements or other payments in respect of expenses incurred after such date.”\nAmendment by  Pub. L. 102–486  applicable to property placed in service after  June 30, 1993 , see  section 1913(c) of Pub. L. 102–486 , set out as a note under  section 53 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 1001(b)(3)(A) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6007(d) ,  Nov. 10, 1988 ,  102 Stat. 3687 , provided that:  “The amendments made by this section [enacting  section 220 of this title , amending this section, and renumbering former  section 220 of this title  as  section 221 of this title ] shall apply as if included in the amendments made by section 132 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nPub. L. 100–485, title VII, §\u202f702(b) ,  Oct. 13, 1988 ,  102 Stat. 2426 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”\nAmendment by sections 131(b)(1) and 132(b), (c) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title III, §\u202f301(c) ,  Oct. 22, 1986 ,  100 Stat. 2218 , provided that:  “The amendments made by this section [amending this section and sections 170, 172, 219, 220, 223, 642, 643, 691, 871, 1211, 1212, and 1402 of this title and repealing  section 1202 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title XVIII, §\u202f1875(c)(12) ,  Oct. 22, 1986 ,  100 Stat. 2895 , provided that:  “The amendments made by paragraphs (3), (4), and (6) [amending this section and sections 219 and 408 of this title] shall take effect as if included in the amendments made by section 238 of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 238 of Pub. L. 97–248 , see  section 241 of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title ].”\nPub. L. 98–369, div. A, title IV, §\u202f491(f)(1) ,  July 18, 1984 ,  98 Stat. 853 , provided that:  “The amendments and repeals made by subsections (a), (b), and (d) [amending this section, sections 55, 72, 172, 219, 402, 403, 406, 407, 408, 412, 414, 415, 457, 2039, 2517, 3121, 3306, 3401, 4972, 4973, 4975, 6047, 6058, 6104, 6652, 7207, 7476, and 7701 of this title,  section 3107 of Title 31 , Money and Finance, and  section 409 of Title 42 , The Public Health and Welfare, and repealing sections 405 and 409 of this title] shall apply to obligations issued after  December 31, 1983 .”\nPar. (9) as in effect before date of repeal by  Pub. L. 97–354  to remain in effect for years beginning before  Jan. 1, 1984 , see  section 6(b)(1) of Pub. L. 97–354 , set out as an Effective Date note under  section 3761 of this title .\nPub. L. 97–34, title I, §\u202f103(d) ,  Aug. 13, 1981 ,  95 Stat. 188 , provided that:  “The amendments made by this section [enacting  section 219 of this title  and amending this section and sections 85 and 105 of this title] shall apply to taxable years beginning after  December 31, 1981 .”\nAmendment by sections 112(b)(2) and 311(h)(1) of  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see sections 115 and 311(i)(1) of  Pub. L. 97–34 , set out as notes under sections 911 and 219, respectively, of this title.\nPub. L. 96–608, §\u202f3(b) ,  Dec. 28, 1980 ,  94 Stat. 3551 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to repayments made in taxable years beginning after the date of the enactment of this Act [ Dec. 28, 1980 ].”\nAmendment by  Pub. L. 96–451  applicable with respect to additions to capital account made after  Dec. 31, 1979 , see  section 301(d) of Pub. L. 96–451 , set out as an Effective Date note under  section 194 of this title .\nAmendment by  Pub. L. 95–615  applicable to taxable years beginning after  Dec. 31, 1977 , with provision for election of prior law, see  section 209 of Pub. L. 95–615 , set out as a note under  section 911 of this title .\nPub. L. 94–455, title V, §\u202f502(c) ,  Oct. 4, 1976 ,  90 Stat. 1559 , provided that:  “The amendments made by this section [amending this section and  section 3402 of this title ] shall apply to taxable years beginning after  December 31, 1976 .”\nPub. L. 94–455, title XV, §\u202f1501(d) ,  Oct. 4, 1976 ,  90 Stat. 1737 , provided that:  “The amendments made by this section [enacting  section 220 of this title , amending this section and sections 219, 408, 409, 3401, 4973, and 6047 of this title, and renumbering former section 220 as 221 of this title], other than the amendment made by subsection (b)(3), shall apply to taxable years beginning after  December 31, 1976 . The amendment made by subsection (b)(3) [amending  section 415 of this title ] shall apply to years beginning after  December 31, 1976 .”\nAmendment by section 1901(a)(8), (9) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 93–483, §\u202f6(b) ,  Oct. 26, 1974 ,  88 Stat. 1459 , provided that:  “The amendment made by this section [amending this section] applies to taxable years beginning after  December 31, 1972 .”\nAmendment by  section 2002(a)(2) of Pub. L. 93–406  applicable to taxable years beginning after  Dec. 31, 1974 , see  section 2002(i)(1) of Pub. L. 93–406 , set out as an Effective Date note under  section 219 of this title .\nAmendment by  section 2005(c)(9) of Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to taxable years of electing small business corporations beginning after  Dec. 31, 1970 , see  section 531(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 1379 of this title .\nPub. L. 88–272, title II, §\u202f213(d) ,  Feb. 26, 1964 ,  78 Stat. 52 , provided that:  “The amendments made by subsections (a) [enacting section 217 and redesignating former section 217 as 218] and (b) [amending this section] shall apply to expenses incurred after  December 31, 1963 , in taxable years ending after such date. The amendment made by subsection (c) [amending  section 3401 of this title ] shall apply with respect to remuneration paid after the seventh day following the date of the enactment of this Act [ Feb. 26, 1964 ].”\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nPub. L. 116–260, div. N, title II, §\u202f275 ,  Dec. 27, 2020 ,  134 Stat. 1978 , provided that:  “Not later than  February 28, 2021 , the Secretary of the Treasury (or the Secretary’s delegate) shall by regulation or other guidance clarify that personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of COVID–19 are treated as described in section 62(a)(2)(D)(ii) of the Internal Revenue Code of 1986. Such regulations or other guidance shall apply to expenses paid or incurred after  March 12, 2020 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 95–427, §\u202f2 ,  Oct. 7, 1978 ,  92 Stat. 996 , as amended by  Pub. L. 96–167, §\u202f2 ,  Dec. 29, 1979 ,  93 Stat. 1275 , provided that with respect to transportation costs paid or incurred after  December 31, 1976 , and on or before  May 31, 1981 , the application of sections 62, 162, and 262 and of chapters 21, 23, and 24 of the Internal Revenue Code of 1954 [now 1986] to transportation expenses in traveling between a taxpayer’s residence and place of work be determined without regard to Revenue Ruling 76–453 or any other regulation, ruling, or decision reaching the same or similar result, and with full regard to the rules in effect before that Revenue Ruling.\nPub. L. 95–615, §\u202f2 ,  Nov. 8, 1978 ,  92 Stat. 3097 , provided that with respect to transportation costs paid or incurred after  Dec. 31, 1976 , and before  Apr. 30, 1978 , the application of sections 62, 162, and 262 and chapters 21, 23, and 24 of the Internal Revenue Code of 1954 [now 1986] to transportation expenses in traveling between a taxpayer’s residence and place of work be determined without regard to Revenue Ruling 76–453 or any other regulation, ruling or decision reaching the same or similar result, and with full regard to the rules in effect before that Revenue Ruling, and ceased to have effect on the day after  Nov. 8, 1978  pursuant to section 210(a) of that Act.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'Except as provided in subsection (b), for purposes of this subtitle, the term “taxable income” means gross income minus the deductions allowed by this chapter (other than the standard deduction).\nFor purposes of paragraph (1), the additional standard deduction is the sum of each additional amount to which the taxpayer is entitled under subsection (f).\nParagraph (4) shall not apply to the dollar amounts contained in paragraphs (2)(B) and (2)(C).\nUnless an individual makes an election under this subsection for the taxable year, no itemized deduction shall be allowed for the taxable year. For purposes of this subtitle, the determination of whether a deduction is allowable under this chapter shall be made without regard to the preceding sentence.\nAny election under this subsection shall be made on the taxpayer’s return, and the Secretary shall prescribe the manner of signifying such election on the return.\nIn the case of an individual who is not married and is not a surviving spouse, paragraphs (1) and (2) shall be applied by substituting “$750” for “$600”.\nFor purposes of this subsection, an individual is blind only if his central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or if his visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees.\nFor purposes of this section, marital status shall be determined under section 7703.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nAnother  section 212(b) of div. EE of Pub. L. 116–260  amended sections 6662 and 6751 of this title.\n2020—Subsec. (b)(4).  Pub. L. 116–260, §\u202f212(b)(1) , added par. (4).\nSubsec. (d)(2), (3).  Pub. L. 116–260, §\u202f212(b)(2) , added par. (2) and struck out former pars. (2) and (3) which read as follows:\n“(2) the deduction for personal exemptions provided by section 151, and\n“(3) any deduction provided in section 199A.”\n2018—Subsecs. (b)(3), (d)(3).  Pub. L. 115–141  substituted “any deduction” for “the deduction”.\n2017—Subsec. (b)(3).  Pub. L. 115–97, §\u202f11011(b)(2) , added par. (3).\nSubsec. (c)(4)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(K) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)” in introductory provisions.\nSubsec. (c)(7).  Pub. L. 115–97, §\u202f11021(a) , added par. (7).\nSubsec. (d)(3).  Pub. L. 115–97, §\u202f11011(b)(3) , added par. (3).\n2014—Subsec. (c)(1).  Pub. L. 113–295, §\u202f221(a)(13)(A) , added subpars. (A) and (B) and struck out former subpars. (A) to (E) which read as follows:\n“(A) the basic standard deduction,\n“(B) the additional standard deduction,\n“(C) in the case of any taxable year beginning in 2008 or 2009, the real property tax deduction,\n“(D) the disaster loss deduction, and\n“(E) the motor vehicle sales tax deduction.”\nSubsec. (c)(7) to (9).  Pub. L. 113–295, §\u202f221(a)(13)(B) , struck out pars. (7) to (9) which related to real property tax deduction, disaster loss deduction, and motor vehicle sales tax deduction, respectively.\n2009—Subsec. (c)(1)(E).  Pub. L. 111–5, §\u202f1008(c)(1) , added subpar. (E).\nSubsec. (c)(9).  Pub. L. 111–5, §\u202f1008(c)(2) , added par. (9).\n2008—Subsec. (c)(1)(C).  Pub. L. 110–343, §\u202f204(a) , inserted “or 2009” after “2008”.\nPub. L. 110–289, §\u202f3012(a) , added subpar. (C).\nSubsec. (c)(1)(D).  Pub. L. 110–343, §\u202f706(b)(1) , added subpar. (D).\nSubsec. (c)(7).  Pub. L. 110–289, §\u202f3012(b) , added par. (7).\nSubsec. (c)(8).  Pub. L. 110–343, §\u202f706(b)(2) , added par. (8).\n2004—Subsec. (c)(2).  Pub. L. 108–311, §\u202f101(b)(1) , reenacted heading without change and amended text generally, substituting provisions relating to a specific percentage for provisions relating to applicable percentage in subpar. (A), redesignating subpar. (D) as (C), and deleting former subpar. (C) relating to married individuals filing separately.\nSubsec. (c)(4).  Pub. L. 108–311, §\u202f101(b)(2)(A) , substituted “(2)(C)” for “(2)(D)” in introductory provisions and in subpar. (B)(i).\nSubsec. (c)(7).  Pub. L. 108–311, §\u202f101(b)(2)(B) , struck out par. (7) which related to applicable percentage for purposes of par. (2).\n2003—Subsec. (c)(7).  Pub. L. 108–27  inserted table item relating to years 2003 and 2004.\n2002—Subsec. (c)(2).  Pub. L. 107–147, §\u202f411(e)(1)(E) , inserted “If any amount determined under subparagraph (A) is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50.” at end.\nSubsec. (c)(2)(A).  Pub. L. 107–147, §\u202f411(e)(1)(A) , substituted “subparagraph (D)” for “subparagraph (C)”.\nSubsec. (c)(2)(B).  Pub. L. 107–147, §\u202f411(e)(1)(B) , struck out “or” at end.\nSubsec. (c)(2)(C), (D).  Pub. L. 107–147, §\u202f411(e)(1)(C) , (D), added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (c)(4).  Pub. L. 107–147, §\u202f411(e)(2)(C) , which directed amendment by striking out the flush sentence at the end added by  section 301(c)(2) of Public Law 107–17 , was executed by striking out “The preceding sentence shall not apply to the amount referred to in paragraph (2)(A).”, which was inserted by  section 301(c)(2) of Pub. L. 107–16 , to reflect the probable intent of Congress. See 2001 Amendment note below.\nPub. L. 107–147, §\u202f411(e)(2)(A) , substituted “paragraph (2)(B), (2)(D), or (5)” for “paragraph (2) or (5)” in introductory provisions.\nSubsec. (c)(4)(B)(i).  Pub. L. 107–147, §\u202f411(e)(2)(B) , substituted “paragraph (2)(B), (2)(D),” for “paragraph (2)”.\n2001—Subsec. (c)(2)(A).  Pub. L. 107–16, §\u202f301(a)(1) , substituted “the applicable percentage of the dollar amount in effect under subparagraph (C) for the taxable year” for “$5,000”.\nSubsec. (c)(2)(B).  Pub. L. 107–16, §\u202f301(a)(2) , inserted “or” at end.\nSubsec. (c)(2)(C).  Pub. L. 107–16, §\u202f301(a)(3) , substituted “in any other case.” for “in the case of an individual who is not married and who is not a surviving spouse or head of household, or”.\nSubsec. (c)(2)(D).  Pub. L. 107–16, §\u202f301(a)(4) , struck out subpar. (D) which read as follows: “$2,500 in the case of a married individual filing a separate return.”\nSubsec. (c)(4).  Pub. L. 107–16, §\u202f301(c)(2) , inserted at end “The preceding sentence shall not apply to the amount referred to in paragraph (2)(A).”\nSubsec. (c)(7).  Pub. L. 107–16, §\u202f301(b) , added par. (7).\n1997—Subsec. (c)(4).  Pub. L. 105–34, §\u202f1201(a)(2) , in introductory provisions, substituted “(5)” for “(5)(A)” and, in subpar. (B), substituted “by substituting for ‘calendar year 1992’ in subparagraph (B) thereof—” for “by substituting ‘calendar year 1987’ for ‘calendar year 1992’ in subparagraph (B) thereof” and added cls. (i) and (ii).\nSubsec. (c)(5)(B).  Pub. L. 105–34, §\u202f1201(a)(1) , substituted “the sum of $250 and such individual’s earned income” for “such individual’s earned income”.\n1993—Subsec. (c)(4)(B).  Pub. L. 103–66  substituted “1992” for “1989”.\n1990—Subsec. (c)(4)(B).  Pub. L. 101–508, §\u202f11101(d)(1)(D) , inserted before period at end “,\u2000by substituting ‘calendar year 1987’ for ‘calendar year 1989’ in subparagraph (B) thereof”.\nSubsec. (h).  Pub. L. 101–508, §\u202f11801(a)(4) , struck out subsec. (h) “Transitional rule for taxable years beginning in 1987” which read as follows: “In the case of any taxable year beginning in 1987, paragraph (2) of subsection (c) shall be applied—\n“(1) by substituting ‘$3,760’ for ‘$5,000’,\n“(2) by substituting ‘$2,540’ for ‘$4,400’,\n“(3) by substituting ‘$2,540’ for ‘$3,000’, and\n“(4) by substituting ‘$1,880’ for ‘$2,500’.\nThe preceding sentence shall not apply if the taxpayer is entitled to an additional amount determined under subsection (f) (relating to additional amount for aged and blind) for the taxable year.”\n1988—Subsec. (c)(5).  Pub. L. 100–647  substituted “basic standard deduction” for “standard deduction” in heading and text.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f102(a) , substituted “In general” for “Corporations” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subtitle, in the case of a corporation, the term ‘taxable income’ means gross income minus the deductions allowed by this chapter.”\nSubsec. (b).  Pub. L. 99–514, §\u202f102(a) , substituted “Individuals who do not itemize their deductions” for “Individuals” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subtitle, in the case of an individual, the term ‘taxable income’ means adjusted gross income—\n“(1) reduced by the sum of—\n“(A) the excess itemized deductions,\n“(B) the deductions for personal exemptions provided by section 151, and\n“(C) the direct charitable deduction, and\n“(2) increased (in the case of an individual for whom an unused zero bracket amount computation is provided by subsection (e)) by the unused zero bracket amount (if any).”\nSubsec. (c).  Pub. L. 99–514, §\u202f102(a) , substituted “Standard deduction” for “Excess itemized deductions” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subtitle, the term ‘excess itemized deductions’ means the excess (if any) of—\n“(1) the itemized deductions, over\n“(2) the zero bracket amount.”\nSubsec. (c)(6)(C) to (E).  Pub. L. 99–514, §\u202f1272(d)(6) , redesignated subpars. (D) and (E) as (C) and (D), respectively, and struck out former subpar. (C) which read as follows: “a citizen of the United States entitled to the benefits of section 931 (relating to income from sources within possessions of the United States),”.\nSubsec. (d).  Pub. L. 99–514, §\u202f102(a) , substituted “Itemized deductions” for “Zero bracket amount” in heading and amended text generally. Prior to amendment, subsec. (d) read as follows: “For purposes of this subtitle, the term ‘zero bracket amount’ means—\n“(1) in the case of an individual to whom subsection (a), (b), (c), or (d) of section 1 applies, the maximum amount of taxable income on which no tax is imposed by the applicable subsection of section 1, or\n“(2) zero in any other case.”\nSubsec. (e).  Pub. L. 99–514, §\u202f102(a) , substituted “Election to itemize” for “Unused zero bracket amount” in heading.\nSubsec. (e)(1).  Pub. L. 99–514, §\u202f102(a) , substituted “In general” for “Individuals for whom computation must be made” in heading and amended text generally. Prior to amendment, text read as follows: “A computation for the taxable year shall be made under this subsection for the following individuals:\n“(A) a married individual filing a separate return where either spouse itemized deductions,\n“(B) a nonresident alien individual,\n“(C) a citizen of the United States entitled to the benefits of section 931 (relating to income from sources within possessions of the United States), and\n“(D) an individual with respect to whom a deduction under section 151(e) is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins.”\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f102(a) , substituted “Time and manner of election” for “Computation” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subtitle, an individual’s unused zero bracket amount for the taxable year is an amount equal to the excess (if any) of—\n“(A) the zero bracket amount, over\n“(B) the itemized deductions.\nIn the case of an individual referred to in paragraph (1)(D), if such individual’s earned income (as defined in section 911(d)(2)) exceeds the itemized deductions, such earned income shall be substituted for the itemized deductions in subparagraph (B).”\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f102(a) , in amending subsec. (e) generally, added par. (3).\nSubsec. (f).  Pub. L. 99–514, §\u202f102(a) , substituted “Aged or blind additional amounts” for “Itemized deductions” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subtitle, the term ‘itemized deductions’ means the deductions allowable by this chapter other than—\n“(1) the deductions allowable in arriving at adjusted gross income,\n“(2) the deductions for personal exemptions provided by section 151, and\n“(3) the direct charitable deduction.”\nSubsec. (g).  Pub. L. 99–514, §\u202f102(a) , amended subsec. (g) generally, substituting provision that marital status be determined under section 7703 for provisions relating to election to itemize. See subsec. (e).\nSubsec. (h).  Pub. L. 99–514, §\u202f102(a) , substituted “Transitional rule for taxable years beginning in 1987” for “Marital status” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, marital status shall be determined under section 143.”\nSubsec. (i).  Pub. L. 99–514, §\u202f102(a) , in amending section generally, struck out subsec. (i), “Direct charitable deduction”, which read as follows: “For purposes of this section, the term ‘direct charitable deduction’ means that portion of the amount allowable under section 170(a) which is taken as a direct charitable deduction for the taxable year under section 170(i).”\n1981—Subsec. (b)(1)(C).  Pub. L. 97–34, §\u202f121(b)(1) , added subpar. (C).\nSubsec. (d).  Pub. L. 97–34, §\u202f104(b) , substituted a blanket reference to individuals to whom subsection (a), (b), (c), or (d) of section 1 applies and the maximum amount of taxable income on which no tax is imposed by the applicable subsection of section 1 for provisions specifically referring to amounts of $3,400 in the case of (A) a joint return under section 6013, or (B) a surviving spouse (as defined in section 2(a)), $2,300 in the case of an individual who is not married and who is not a surviving spouse (as so defined), and $1,700 in the case of a married individual filing a separate return.\nSubsec. (e)(2).  Pub. L. 97–34, §\u202f111(b)(4) , substituted “section 911(d)(2)” for “section 911(b)” in provisions following subpar. (B).\nSubsec. (f)(3).  Pub. L. 97–34, §\u202f121(c)(2) , added par. (3).\nSubsec. (i).  Pub. L. 97–34, §\u202f121(b)(2) , added subsec. (i).\n1978— Pub. L. 95–600  substituted “$3,400” for “$3,200” in par. (1), “$2,300” for “$2,200” in par. (2), and “$1,700” for “$1,600” in par. (3).\n1977— Pub. L. 95–30  completely revised definition of taxable income from one using the concept of a standard deduction and consisting of subsecs. (a) and (b) entitled, respectively, “General rule” and “Individuals electing standard deduction” to definition using the concepts of zero bracket amounts and excess itemized deductions and consisting of subsecs. (a) to (h) entitled, respectively, “Corporations”, “Individuals”, “Excess itemized deductions”, “Zero bracket amount”, “Unused zero bracket amount”, “Itemized deductions”, “Election to itemize”, and “Marital status”.\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 212(d) of div. EE of Pub. L. 116–260 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 115–141  effective as if included in  section 11011 of Pub. L. 115–97 , see  section 101(d) of Pub. L. 115–141 , set out as a note under  section 62 of this title .\nAmendment by  section 11002(d)(1)(K) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by section 11011(b)(2), (3) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as a note under  section 62 of this title .\nPub. L. 115–97, title I, §\u202f11021(b) ,  Dec. 22, 2017 ,  131 Stat. 2073 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–5  applicable to purchases on or after  Feb. 17, 2009 , in taxable years ending after such date, see  section 1008(e) of Pub. L. 111–5 , set out as a note under  section 56 of this title .\nPub. L. 110–343, div. C, title II, §\u202f204(b) ,  Oct. 3, 2008 ,  122 Stat. 3865 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by section 706(b)(1), (2) of  Pub. L. 110–343  applicable to disasters declared in taxable years beginning after  Dec. 31, 2007 , see  section 706(d)(1) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nPub. L. 110–289, div. C, title I, §\u202f3012(c) ,  July 30, 2008 ,  122 Stat. 2892 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 101(e) of Pub. L. 108–311 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–311  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , to the same extent and in the same manner as the provisions of such Act to which such amendments relate, see  section 105 of Pub. L. 108–311 , set out as a note under  section 1 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nPub. L. 108–27, title I, §\u202f103(c) ,  May 28, 2003 ,  117 Stat. 754 , provided that:  “The amendments made by this section [amending this section and provisions set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title ] shall apply to taxable years beginning after  December 31, 2002 .”\nAmendments by title I of  Pub. L. 108–27  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , to the same extent and in the same manner as the provisions of such Act to which such amendments relate, see  section 107 of Pub. L. 108–27 , set out as a note under  section 1 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2002 , see  section 301(d) of Pub. L. 107–16 , set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 1201(c) of Pub. L. 105–34 , set out as a note under  section 59 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nAmendment by  section 11101(d)(1)(D) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 102(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1272(d)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by  section 104(b) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 104(e) of Pub. L. 97–34 , set out as a note under  section 1 of this title .\nAmendment by  section 111(b)(4) of Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nAmendment by section 121(b), (c)(2) of  Pub. L. 97–34  applicable to contributions made after  Dec. 31, 1981 , in taxable years beginning after such date, see  section 121(d) of Pub. L. 97–34 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 95–600  effective with respect to taxable years beginning after  Dec. 31, 1978 , see  section 101(f)(1) of Pub. L. 95–600 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nFor provisions that nothing in amendment by  section 11801 of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'For purposes of this subtitle, the term “ordinary income” includes any gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b). Any gain from the sale or exchange of property which is treated or considered, under other provisions of this subtitle, as “ordinary income” shall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'For purposes of this subtitle, the term “ordinary loss” includes any loss from the sale or exchange of property which is not a capital asset. Any loss from the sale or exchange of property which is treated or considered, under other provisions of this subtitle, as “ordinary loss” shall be treated as loss from the sale or exchange of property which is not a capital asset.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'The Secretary may disallow the benefits of any community property law to any taxpayer with respect to any income if such taxpayer acted as if solely entitled to such income and failed to notify the taxpayer’s spouse before the due date (including extensions) for filing the return for the taxable year in which the income was derived of the nature and amount of such income.\nThe term “earned income” has the meaning given to such term by section 911(d)(2).\nThe term “community income” means income which, under applicable community property laws, is treated as community income.\nThe term “community property laws” means the community property laws of a State, a foreign country, or a possession of the United States.\n1998—Subsec. (c).  Pub. L. 105–206  inserted at end “Under procedures prescribed by the Secretary, if, taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either) attributable to any item for which relief is not available under the preceding sentence, the Secretary may relieve such individual of such liability.”\n1989—Subsec. (d)(1).  Pub. L. 101–239  substituted “section 911(d)(2)” for “section 911(b)”.\n1984— Pub. L. 98–369, §\u202f424(b)(2)(A) , struck out “where spouses live apart” in section catchline.\nSubsec. (a).  Pub. L. 98–369, §\u202f424(b)(2)(B) , substituted “Treatment of community income where spouses live apart” for “General rule” in heading.\nSubsecs. (b) to (d).  Pub. L. 98–369, §\u202f424(b)(1) , added subsecs. (b) and (c) and redesignated former subsec. (b) as (d).\nAmendment by  Pub. L. 105–206  applicable to any liability for tax arising after  July 22, 1998 , and any liability for tax arising on or before such date but remaining unpaid as of such date, see  section 3201(g)(1) of Pub. L. 105–206 , set out as a note under  section 6015 of this title .\nAmendment by  Pub. L. 98–369  applicable to all taxable years to which the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies with corresponding provisions deemed to be included in the Internal Revenue Code of 1939 and applicable to all taxable years to which such Code applies, except subsection (b) of this section is applicable to taxable years beginning after  December 31, 1984 , see  section 424(c) of Pub. L. 98–369 , set out as a note under  section 6013 of this title .\nPub. L. 96–605, title I, §\u202f101(c) ,  Dec. 28, 1980 ,  94 Stat. 3522 , provided that:  “The amendments made by this section [enacting this section] shall apply to calendar years beginning after  December 31, 1980 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'In the case of an individual, the miscellaneous itemized deductions for any taxable year shall be allowed only to the extent that the aggregate of such deductions exceeds 2 percent of adjusted gross income.\nThe Secretary shall prescribe regulations which prohibit the indirect deduction through pass-thru entities of amounts which are not allowable as a deduction if paid or incurred directly by an individual and which contain such reporting requirements as may be necessary to carry out the purposes of this subsection.\nParagraph (1) shall not apply with respect to any publicly offered regulated investment company.\nThe Secretary may by regulation decrease the minimum shareholder requirement of clause (i)(III) in the case of regulated investment companies which experience a loss of shareholders through net redemptions of their shares.\nThis section shall be applied before the application of the dollar limitation of the second sentence of section 162(a) (relating to trade or business expenses).\nNotwithstanding subsection (a), no miscellaneous itemized deduction shall be allowed for any taxable year beginning after  December 31, 2017 , and before  January 1, 2026 .\nSection 4 of the Securities Act of 1933, referred to in subsec. (c)(2)(B)(i)(I), is classified to  section 77d of Title 15 , Commerce and Trade.\n2017—Subsec. (g).  Pub. L. 115–97  added subsec. (g).\n2000—Subsec. (f).  Pub. L. 106–554  substituted “the second sentence” for “the last sentence”.\n1998—Subsec. (b)(3).  Pub. L. 105–277  substituted “for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)” for “for losses described in subsection (c)(3) or (d) of section 165”.\n1993—Subsec. (b)(6) to (13).  Pub. L. 103–66  redesignated pars. (7) to (13) as (6) to (12), respectively, and struck out former par. (6) which read as follows: “the deduction under section 217 (relating to moving expenses),”.\n1989—Subsec. (c)(4).  Pub. L. 101–239  struck out par. (4) which read as follows: “ Termination .—This subsection shall not apply to any taxable year beginning after  December 31, 1989 .”\n1988—Subsec. (b)(4).  Pub. L. 100–647, §\u202f1001(f)(2) , substituted “deductions” for “deduction” and inserted before comma at end “and section 642(c) (relating to deduction for amounts paid or permanently set aside for a charitable purpose)”.\nSubsec. (c).  Pub. L. 100–647, §\u202f4011(a) , amended subsec. (c) generally. Prior to amendment subsec. (c) read as follows: “The Secretary shall prescribe regulations which prohibit the indirect deduction through pass-thru entities of amounts which are not allowable as a deduction if paid or incurred directly by an individual and which contain such reporting requirements as may be necessary to carry out the purposes of this subsection. The preceding sentence shall not apply—\n“(1) with respect to cooperatives and real estate investment trusts, and\n“(2) except as provided in regulations, with respect to estates and trusts.”\nPub. L. 100–647, §\u202f1001(f)(4) , amended last sentence generally. Prior to amendment, last sentence read as follows: “The preceding sentence shall not apply with respect to estates, trusts, cooperatives, and real estate investment trusts.”\nSubsec. (e).  Pub. L. 100–647, §\u202f1001(f)(3) , amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this section, the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that the deductions for costs which are paid or incurred in connection with the administration of the estate or trust and would not have been incurred if the property were not held in such trust or estate shall be treated as allowable in arriving at adjusted gross income.”\nSubsec. (f).  Pub. L. 100–647, §\u202f1001(f)(1) , added subsec. (f).\nPub. L. 115–97, title I, §\u202f11045(b) ,  Dec. 22, 2017 ,  131 Stat. 2088 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 105–277, div. J, title IV, §\u202f4004(c)(2) ,  Oct. 21, 1998 ,  112 Stat. 2681–911 , provided that:  “The amendment made by subsection (b)(1) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 103–66  applicable to expenses incurred after  Dec. 31, 1993 , see  section 13213(e) of Pub. L. 103–66  set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 1001(f) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4011(b) ,  Nov. 10, 1988 ,  102 Stat. 3656 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nSection applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10104(a) ,  Dec. 22, 1987 ,  101 Stat. 1330–386 , provided that: \n “(1)   General rule .— Section 67(c) of the Internal Revenue Code of 1986 to the extent it relates to indirect deductions through a publicly offered regulated investment company shall apply only to taxable years beginning after  December 31, 1987 . \n \n “(2)   Publicly offered regulated investment com\xadpany defined .— For purposes of this subsection— “(A)   In general .— The term ‘publicly offered regulated investment company’ means a regulated investment company the shares of which are— “(i)  continuously offered pursuant to a public offering (within the meaning of section 4 of the Securities Act of 1933, as amended ( 15 U.S.C. 77a  to 77aa) [ 15 U.S.C. 77d ]), \n \n “(ii)  regularly traded on an established securities market, or \n \n “(iii)  held by or for no fewer than 500 persons at all times during the taxable year. \n \n \n “(B)   Secretary may reduce 500 person requirement .— The Secretary of the Treasury or his delegate may by regulation decrease the minimum shareholder requirement of subparagraph (A)(iii) in the case of regulated investment companies which experience a loss of shareholders through net redemptions of their shares.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.'},
  'content': 'This section shall be applied after the application of any other limitation on the allowance of any itemized deduction.\nThis section shall not apply to any estate or trust.\nThis section shall not apply to any taxable year beginning after  December 31, 2017 , and before  January 1, 2026 .\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2018—Subsec. (b)(2).  Pub. L. 115–141  substituted “shall be” for “shall be shall be” in introductory provisions.\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97, §\u202f11002(d)(2) , substituted “1(f)(3)(A)(ii)” for “1(f)(3)(B)” and “2016” for “1992”.\nSubsec. (f).  Pub. L. 115–97, §\u202f11046(a) , added subsec. (f).\n2013—Subsec. (b).  Pub. L. 112–240, §\u202f101(b)(2)(A)(i) , added subsec. (b) and struck out former subsec. (b). Prior to amendment, text read as follows:\n“(1)  In general .—For purposes of this section, the term ‘applicable amount’ means $100,000 ($50,000 in the case of a separate return by a married individual within the meaning of section 7703).\n“(2)  Inflation adjustments .—In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (1) shall be increased by an amount equal to—\n“(A) such dollar amount, multiplied by\n“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 1990’ for ‘calendar year 1992’ in subparagraph (B) thereof.”\nSubsecs. (f), (g).  Pub. L. 112–240, §\u202f101(b)(2)(A)(ii) , struck out subsecs. (f) and (g), which related to phaseout of limitation and termination of applicability of section, respectively.\n2001—Subsecs. (f), (g). Pub. L. 107—16 added subsecs. (f) and (g).\n1998—Subsec. (c)(3).  Pub. L. 105–277  substituted “for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)” for “for losses described in subsection (c)(3) or (d) of section 165”.\n1993—Subsec. (b)(2)(B).  Pub. L. 103–66, §\u202f13201(b)(3)(E) , substituted “1992” for “1989”.\nSubsec. (f).  Pub. L. 103–66, §\u202f13204 , struck out heading and text of subsec. (f). Text read as follows: “This section shall not apply to any taxable year beginning after  December 31, 1995 .”\nAmendment by  section 11002(d)(2) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f11046(b) ,  Dec. 22, 2017 ,  131 Stat. 2088 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 101(b)(3) of Pub. L. 112–240 , set out as a note under  section 1 of this title .\nPub. L. 107–16, title I, §\u202f103(b) ,  June 7, 2001 ,  115 Stat. 45 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 105–277, div. J, title IV, §\u202f4004(c)(3) ,  Oct. 21, 1998 ,  112 Stat. 2681–911 , provided that:  “The amendment made by subsection (b)(2) [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nAmendment by  section 13201(b)(3)(E) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11103(e) of Pub. L. 101–508 , set out as an Effective Date of 1990 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Section,  Aug. 16, 1954, ch. 736 ,  68A Stat. 19 ;  Pub. L. 98–369, div. A, title IV, §\u202f422(a) ,  July 18, 1984 ,  98 Stat. 795 ;  Pub. L. 99–514, title XVIII, §\u202f1843(a) –(c)(1), (d),  Oct. 22, 1986 ,  100 Stat. 2853 , 2855, related to inclusion in gross income of amounts received as alimony or separate maintenance payments.\nRepeal applicable to any divorce or separation instrument (as defined in former subsec. (b)(2) of this section as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 61 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Except as otherwise provided in this chapter, gross income includes any amount received as an annuity (whether for a period certain or during one or more lives) under an annuity, endowment, or life insurance contract.\nGross income does not include that part of any amount received as an annuity under an annuity, endowment, or life insurance contract which bears the same ratio to such amount as the investment in the contract (as of the annuity starting date) bears to the expected return under the contract (as of such date).\nThe portion of any amount received as an annuity which is excluded from gross income under paragraph (1) shall not exceed the unrecovered investment in the contract immediately before the receipt of such amount.\nIn the case of any contract which provides for payments meeting the requirements of subparagraphs (B) and (C) of subsection (c)(2), the deduction under subparagraph (A) shall be allowed to the person entitled to such payments for the taxable year in which such payments are received.\nFor purposes of section 172, a deduction allowed under this paragraph shall be treated as if it were attributable to a trade or business of the taxpayer.\nIf the expected return under the contract, for the period on and after the annuity starting date, depends in whole or in part on the life expectancy of one or more individuals, the expected return shall be computed with reference to actuarial tables prescribed by the Secretary.\nIf subparagraph (A) does not apply, the expected return is the aggregate of the amounts receivable under the contract as an annuity.\nFor purposes of this section, the annuity starting date in the case of any contract is the first day of the first period for which an amount is received as an annuity under the contract.\nRules similar to the rules of paragraphs (2) and (3) of subsection (b) shall apply for purposes of this paragraph.\nIf the annuity is payable over the life of a single individual, the number of anticipated payments shall be determined as follows: \n \n \n \n \n \n \n \u2001If the age of the annuitant on the \u2001\u2001annuity starting date is: The number of anticipated payments is: \n \n \n Not more than 55 360\u202f\u202f \n More than 55 but not more than 60 310\u202f\u202f \n More than 60 but not more than 65 260\u202f\u202f \n More than 65 but not more than 70 210\u202f\u202f \n More than 70 160.\nIf the annuity is payable over the lives of more than 1 individual, the number of anticipated payments shall be determined as follows: \n \n \n \n \n \n \n \u2001If the combined ages of annuitants are: The number is: \n \n \n Not more than 110 410\u202f\u202f \n More than 110 but not more than 120 360\u202f\u202f \n More than 120 but not more than 130 310\u202f\u202f \n More than 130 but not more than 140 260\u202f\u202f \n More than 140 210.\nFor purposes of this paragraph, investment in the contract shall be determined under subsection (c)(1) without regard to subsection (c)(2).\nThis paragraph shall not apply in any case where the primary annuitant has attained age 75 on the annuity starting date unless there are fewer than 5 years of guaranteed payments under the annuity.\nIn any case where the annuity payments are not made on a monthly basis, appropriate adjustments in the application of this paragraph shall be made to take into account the period on the basis of which such payments are made.\nFor purposes of this paragraph, the term “qualified employer retirement plan” means any plan or contract described in paragraph (1), (2), or (3) of section 4974(c).\nFor purposes of this section, employee contributions (and any income allocable thereto) under a defined contribution plan may be treated as a separate contract.\nFor purposes of this section, contributions to a pension-linked emergency savings account to which section 402A(e) applies (and any income allocable thereto) may be treated as a separate contract.\nFor purposes of this section, any amount received which is in the nature of a dividend or similar distribution shall be treated as an amount not received as an annuity.\nAny amount to which this subsection applies shall be treated as allocable to investment in the contract to the extent that such amount is not allocated to income under subparagraph (A).\nAny amount described in paragraph (1)(B) shall not be included in gross income under paragraph (2)(B)(i) to the extent such amount is retained by the insurer as a premium or other consideration paid for the contract.\nClause (i) shall not apply to any transfer to which section 1041(a) (relating to transfers of property between spouses or incident to divorce) applies.\nIf under clause (i) an amount is included in the gross income of the transferor of an annuity contract, the investment in the contract of the transferee in such contract shall be increased by the amount so included.\nThis paragraph shall apply to contracts entered into before  August 14, 1982 . Any amount allocable to investment in the contract after  August 13, 1982 , shall be treated as from a contract entered into after such date.\nExcept as provided in paragraph (10) and except to the extent prescribed by the Secretary by regulations, this paragraph shall apply to any amount not received as an annuity which is received under a life insurance or endowment contract.\nNotwithstanding any other provision of this subsection, in the case of any amount received before the annuity starting date from a trust or contract described in paragraph (5)(D), paragraph (2)(B) shall apply to such amounts.\nFor purposes of paragraph (2)(B), the amount allocated to the investment in the contract shall be the portion of the amount described in subparagraph (A) which bears the same ratio to such amount as the investment in the contract bears to the account balance. The determination under the preceding sentence shall be made as of the time of the distribution or at such other time as the Secretary may prescribe.\nIf an employee does not have a nonforfeitable right to any amount under any trust or contract to which subparagraph (A) applies, such amount shall not be treated as part of the account balance.\nIn the case of a plan which on  May 5, 1986 , permitted withdrawal of any employee contributions before separation from service, subparagraph (A) shall apply only to the extent that amounts received before the annuity starting date (when increased by amounts previously received under the contract after  December 31, 1986 ) exceed the investment in the contract as of  December 31, 1986 .\nNotwithstanding any other provision of this subsection, paragraph (2)(B) shall apply to amounts received under a qualified tuition program (as defined in section 529(b)) or under a Coverdell education savings account (as defined in section 530(b)). The rule of paragraph (8)(B) shall apply for purposes of this paragraph.\nNotwithstanding subparagraph (A), paragraph (4)(A) shall not apply to any assignment (or pledge) of a modified endowment contract if such assignment (or pledge) is solely to cover the payment of expenses referred to in section 7702(e)(2)(C)(iii) and if the maximum death benefit under such contract does not exceed $25,000.\nThe Secretary may by regulations prescribe such additional rules as may be necessary or appropriate to prevent avoidance of the purposes of this subsection through serial purchases of contracts or otherwise.\nNotwithstanding any other provision of this section, if any amount is held under an agreement to pay interest thereon, the interest payments shall be included in gross income.\nFor purposes of this section, the term “endowment contract” includes a face-amount certificate, as defined in section 2(a)(15) of the Investment Company Act of 1940 (15 U.S.C., sec. 80a–2), issued after  December 31, 1954 .\nFor purposes of this subsection, the term “owner-employee” has the meaning assigned to it by section 401(c)(3) and includes an individual for whose benefit an individual retirement account or annuity described in section 408(a) or (b) is maintained. For purposes of the preceding sentence, the term “owner-employee” shall include an employee within the meaning of section 401(c)(1).\nFor purposes of this section, an individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to be disabled unless he furnishes proof of the existence thereof in such form and manner as the Secretary may require.\nUnder regulations prescribed by the Secretary, in the case of a distribution or payment made to an alternate payee who is the spouse or former spouse of the participant pursuant to a qualified domestic relations order (as defined in section 414(p)), the investment in the contract as of the date prescribed in such regulations shall be allocated on a pro rata basis between the present value of such distribution or payment and the present value of all other benefits payable with respect to the participant to which such order relates.\nSubsection (b) shall not apply in the case of amounts received after  December 31, 1965 , as an annuity under chapter 73 of title 10 of the United States Code, but all such amounts shall be excluded from gross income until there has been so excluded (under section 122(b)(1) or this section, including amounts excluded before  January 1, 1966 ) an amount equal to the consideration for the contract (as defined by section 122(b)(2)), plus any amount treated pursuant to section 101(b)(2)(D) (as in effect on the day before the date of the enactment of the Small Business Job Protection Act of 1996) as additional consideration paid by the employee. Thereafter all amounts so received shall be included in gross income.\nFor purposes of this section and sections 402 and 403, notwithstanding section 414(h), any deductible employee contribution made to a qualified employer plan or government plan shall be treated as an amount contributed by the employer which is not includible in the gross income of the employee.\nFor purposes of this subsection, rules similar to the rules provided by subsection (p) (other than the exception contained in paragraph (2) thereof) shall apply.\nTo the extent any amount of accumulated deductible employee contributions of an employee are applied to the purchase of life insurance contracts, such amount shall be treated as distributed to the employee in the year so applied.\nFor purposes of sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16), the Secretary shall prescribe regulations providing for such allocations of amounts attributable to accumulated deductible employee contributions, and for such other rules, as may be necessary to insure that such accumulated deductible employee contributions do not become eligible for additional tax benefits (or freed from limitations) through the use of rollovers.\nThe term “deductible employee contributions” means any qualified voluntary employee contribution (as defined in section 219(e)(2)) made after  December 31, 1981 , in a taxable year beginning after such date and made for a taxable year beginning before  January 1, 1987 , and allowable as a deduction under section 219(a) for such taxable year.\nThe term “qualified employer plan” has the meaning given to such term by subsection (p)(3)(A)(i).\nThe term “government plan” has the meaning given such term by subsection (p)(3)(B).\nUnless the plan specifies otherwise, any distribution from such plan shall not be treated as being made from the accumulated deductible employee contributions, until all other amounts to the credit of the employee have been distributed.\nIf during any taxable year a participant or beneficiary receives (directly or indirectly) any amount as a loan from a qualified employer plan, such amount shall be treated as having been received by such individual as a distribution under such plan.\nIf during any taxable year a participant or beneficiary assigns (or agrees to assign) or pledges (or agrees to pledge) any portion of his interest in a qualified employer plan, such portion shall be treated as having been received by such individual as a loan from such plan.\nSubparagraph (A) shall not apply to any loan unless such loan, by its terms, is required to be repaid within 5 years.\nClause (i) shall not apply to any loan used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the participant.\nExcept as provided in regulations, this paragraph shall not apply to any loan unless substantially level amortization of such loan (with payments not less frequently than quarterly) is required over the term of the loan.\nSubparagraph (A) shall not apply to any loan which is made through the use of any credit card or any other similar arrangement.\nNo deduction otherwise allowable under this chapter shall be allowed under this chapter for any interest paid or accrued on any loan to which paragraph (1) does not apply by reason of paragraph (2) during the period described in subparagraph (B).\nThe term “qualified employer plan” shall include any plan which was (or was determined to be) a qualified employer plan or a government plan.\nThe term “government plan” means any plan, whether or not qualified, established and maintained for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing.\nFor purposes of this subsection, any amount received as a loan under a contract purchased under a qualified employer plan (and any assignment or pledge with respect to such a contract) shall be treated as a loan under such employer plan.\nIf any taxpayer receives any amount under an annuity contract, the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.\nNotwithstanding any other provision of law, any benefit provided under the Railroad Retirement Act of 1974 (other than a tier 1 railroad retirement benefit) shall be treated for purposes of this title as a benefit provided under an employer plan which meets the requirements of section 401(a).\nWith respect to compensation paid after 1984, the tier 2 portion shall be the taxes imposed by sections 3201(b), 3211(b), and 3221(b).\nFor purposes of paragraph (1), the term “tier 1 railroad retirement benefit” has the meaning given such term by section 86(d)(4).\nIf the designated beneficiary referred to in paragraph (2)(A) is the surviving spouse of the holder of the contract, paragraphs (1) and (2) shall be applied by treating such spouse as the holder of such contract.\nFor purposes of this subsection, the term “designated beneficiary” means any individual designated a beneficiary by the holder of the contract.\nFor purposes of this subsection, if the holder of the contract is not an individual, the primary annuitant shall be treated as the holder of the contract.\nFor purposes of subparagraph (A), the term “primary annuitant” means the individual, the events in the life of whom are of primary importance in affecting the timing or amount of the payout under the contract.\nFor purposes of this subsection, in the case of a holder of an annuity contract which is not an individual, if there is a change in a primary annuitant (as defined in paragraph (6)(B)), such change shall be treated as the death of the holder.\nIf any taxpayer receives any amount from a qualified retirement plan (as defined in section 4974(c)), the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.\nDistributions made to the employee (other than distributions described in subparagraph (A), (C), or (D)) to the extent such distributions do not exceed the amount allowable as a deduction under section 213 to the employee for amounts paid during the taxable year for medical care (determined without regard to whether the employee itemizes deductions for such taxable year).\nAny distribution to an alternate payee pursuant to a qualified domestic relations order (within the meaning of section 414(p)(1)).\nClause (i) shall not apply to any distribution made after the individual has been employed for at least 60 days after the separation from employment to which clause (i) applies.\nTo the extent provided in regulations, a self-employed individual shall be treated as meeting the requirements of clause (i)(I) if, under Federal or State law, the individual would have received unemployment compensation but for the fact the individual was self-employed.\nDistributions to an individual from an individual retirement plan to the extent such distributions do not exceed the qualified higher education expenses (as defined in paragraph (7)) of the taxpayer for the taxable year. Distributions shall not be taken into account under the preceding sentence if such distributions are described in subparagraph (A), (C), or (D) or to the extent paragraph (1) does not apply to such distributions by reason of subparagraph (B).\nDistributions to an individual from an individual retirement plan which are qualified first-time homebuyer distributions (as defined in paragraph (8)). Distributions shall not be taken into account under the preceding sentence if such distributions are described in subparagraph (A), (C), (D), or (E) or to the extent paragraph (1) does not apply to such distributions by reason of subparagraph (B).\nAny qualified reservist distribution.\nAny individual who receives a qualified reservist distribution may, at any time during the 2-year period beginning on the day after the end of the active duty period, make one or more contributions to an individual retirement plan of such individual in an aggregate amount not to exceed the amount of such distribution. The dollar limitations otherwise applicable to contributions to individual retirement plans shall not apply to any contribution made pursuant to the preceding sentence. No deduction shall be allowed for any contribution pursuant to this clause.\nThis subparagraph applies to individuals ordered or called to active duty after  September 11, 2001 . In no event shall the 2-year period referred to in clause (ii) end before the date which is 2 years after the date of the enactment of this subparagraph.\nAny qualified birth or adoption distribution.\nThe aggregate amount which may be treated as qualified birth or adoption distributions by any individual with respect to any birth or adoption shall not exceed $5,000.\nThe term “qualified birth or adoption distribution” means any distribution from an applicable eligible retirement plan to an individual if made during the 1-year period beginning on the date on which a child of the individual is born or on which the legal adoption by the individual of an eligible adoptee is finalized.\nThe term “eligible adoptee” means any individual (other than a child of the taxpayer’s spouse) who has not attained age 18 or is physically or mentally incapable of self-support.\nIf a distribution to an individual would (without regard to clause (ii)) be a qualified birth or adoption distribution, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as a qualified birth or adoption distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $5,000.\nFor purposes of subclause (I), the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414.\nAny individual who receives a qualified birth or adoption distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an applicable eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be.\nThe aggregate amount of contributions made by an individual under subclause (I) to any applicable eligible retirement plan which is not an individual retirement plan shall not exceed the aggregate amount of qualified birth or adoption distributions which are made from such plan to such individual. Subclause (I) shall not apply to contributions to any applicable eligible retirement plan which is not an individual retirement plan unless the individual is eligible to make contributions (other than those described in subclause (I)) to such applicable eligible retirement plan.\nIf a contribution is made under subclause (I) with respect to a qualified birth or adoption distribution from an applicable eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received such distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.\nIf a contribution is made under subclause (I) with respect to a qualified birth or adoption distribution from an individual retirement plan, then, to the extent of the amount of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.\nThe term “applicable eligible retirement plan” means an eligible retirement plan (as defined in section 402(c)(8)(B)) other than a defined benefit plan.\nFor purposes of sections 401(a)(31), 402(f), and 3405, a qualified birth or adoption distribution shall not be treated as an eligible rollover distribution.\nA distribution shall not be treated as a qualified birth or adoption distribution with respect to any child or eligible adoptee unless the taxpayer includes the name, age, and TIN of such child or eligible adoptee on the taxpayer’s return of tax for the taxable year.\nAny qualified birth or adoption distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A).\nAny emergency personal expense distribution.\nNot more than 1 distribution per calendar year may be treated as an emergency personal expense distribution by any individual.\nFor purposes of this subparagraph, the term “emergency personal expense distribution” means any distribution from an applicable eligible retirement plan (as defined in subparagraph (H)(vi)(I)) to an individual for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. The administrator of an applicable eligible retirement plan may rely on an employee’s written certification that the employee satisfies the conditions of the preceding sentence in determining whether any distribution is an emergency personal expense distribution. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee’s certification, and for procedures for addressing cases of employee misrepresentation.\nIf a distribution to an individual would (without regard to clause (ii) or (iii)) be an emergency personal expense distribution, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as an emergency personal expense distribution, unless the number or the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer, determined as provided in subparagraph (H)(iv)(II)) to such individual exceeds the limitation determined under clause (ii) or (iii).\nRules similar to the rules of subparagraph (H)(v) shall apply with respect to an individual who receives a distribution to which clause (i) applies.\nRules similar to the rules of subclauses (II) and (IV) of subparagraph (H)(vi) shall apply to any emergency personal expense distribution.\nDistributions from a pension-linked emergency savings account pursuant to section 402A(e).\nAny eligible distribution to a domestic abuse victim.\nA distribution shall be treated as an eligible distribution to a domestic abuse victim if such distribution is from an applicable eligible retirement plan and is made to an individual during the 1-year period beginning on any date on which the individual is a victim of domestic abuse by a spouse or domestic partner.\nThe term “domestic abuse” means physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.\nIf a distribution to an individual would (without regard to clause (ii)) be an eligible distribution to a domestic abuse victim, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as an eligible distribution to a domestic abuse victim, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer, determined as provided in subparagraph (H)(iv)(II)) to such individual exceeds the limitation under clause (ii).\nRules similar to the rules of subparagraph (H)(v) shall apply with respect to an individual who receives a distribution to which clause (i) applies.\nThe term “applicable eligible retirement plan” means an eligible retirement plan (as defined in section 402(c)(8)(B)) other than a defined benefit plan or a plan to which sections 401(a)(11) and 417 apply.\nFor purposes of sections 401(a)(31), 402(f), and 3405, an eligible distribution to a domestic abuse victim shall not be treated as an eligible rollover distribution.\nAny distribution which the employee or participant certifies as being an eligible distribution to a domestic abuse victim shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A).\nDistributions which are made to the employee who is a terminally ill individual on or after the date on which such employee has been certified by a physician as having a terminal illness.\nFor purposes of this subparagraph, the term “terminally ill individual” has the same meaning given such term under section 101(g)(4)(A), except that “84 months” shall be substituted for “24 months”.\nFor purposes of this subparagraph, an employee shall not be considered to be a terminally ill individual unless such employee furnishes sufficient evidence to the plan administrator in such form and manner as the Secretary may require.\nRules similar to the rules of subparagraph (H)(v) shall apply with respect to an individual who receives a distribution to which clause (i) applies.\nAny qualified disaster recovery distribution.\nSubparagraphs (A)(v) and (C) of paragraph (2) shall not apply to distributions from an individual retirement plan.\nParagraph (2)(A)(iv) shall not apply to any amount paid from a trust described in section 401(a) which is exempt from tax under section 501(a) or from a contract described in section 72(e)(5)(D)(ii) unless the series of payments begins after the employee separates from service.\nFor purposes of this paragraph, the term “deferral period” means the period beginning with the taxable year in which (without regard to paragraph (2)(A)(iv)) the distribution would have been includible in gross income and ending with the taxable year in which the modification described in subparagraph (A) occurs.\nFor purposes of this subsection, the term “employee” includes any participant, and in the case of an individual retirement plan, the individual for whose benefit such plan was established.\nIn the case of an employee of an employer which terminates the qualified salary reduction arrangement of the employer under section 408(p) and establishes a qualified cash or deferred arrangement described in section 401(k) or purchases annuity contracts described in section 403(b), subparagraph (A) shall not apply to any amount which is paid in a rollover contribution described in section 408(d)(3) into a qualified trust under section 401(k) (but only if such contribution is subsequently subject to the rules of section 401(k)(2)(B)) or an annuity contract described in section 403(b) (but only if such contribution is subsequently subject to the rules of section 403(b)(12)) for the benefit of the employee.\nThe amount of qualified higher education expenses for any taxable year shall be reduced as provided in section 25A(g)(2).\nThe term “qualified first-time homebuyer distribution” means any payment or distribution received by an individual to the extent such payment or distribution is used by the individual before the close of the 120th day after the day on which such payment or distribution is received to pay qualified acquisition costs with respect to a principal residence of a first-time homebuyer who is such individual, the spouse of such individual, or any child, grandchild, or ancestor of such individual or the individual’s spouse.\nFor purposes of this paragraph, the term “qualified acquisition costs” means the costs of acquiring, constructing, or reconstructing a residence. Such term includes any usual or reasonable settlement, financing, or other closing costs.\nThe term “principal residence” has the same meaning as when used in section 121.\nAny individual who received a qualified distribution may, during the applicable period, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B)) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), as the case may be.\nRules similar to the rules of clauses (ii) and (iii) of paragraph (11)(C) shall apply for purposes of this subsection.\nFor purposes of this subparagraph, the term “applicable period” means, in the case of a principal residence in a qualified disaster area with respect to any qualified disaster, the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the applicable date with respect to such disaster.\nFor purposes of this subsection, a distribution from an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A) shall be treated as a distribution from a qualified retirement plan described in 4974(c)(1) to the extent that such distribution is attributable to an amount transferred to an eligible deferred compensation plan from a qualified retirement plan (as defined in section 4974(c)).\nIn the case of a distribution to a qualified public safety employee from a governmental plan (within the meaning of section 414(d)) or a distribution from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services, paragraph (2)(A)(v) shall be applied by substituting “age 50 or 25 years of service under the plan, whichever is earlier” for “age 55”.\nFor purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified disaster recovery distributions with respect to any qualified disaster in all taxable years shall not exceed $22,000.\nIf a distribution to an individual would (without regard to clause (i)) be a qualified disaster recovery distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified disaster recovery distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $22,000 with respect to the same qualified disaster.\nFor purposes of clause (ii), the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414.\nAny individual who receives a qualified disaster recovery distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be.\nFor purposes of this title, if a contribution is made pursuant to clause (i) with respect to a qualified disaster recovery distribution from a plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified disaster recovery distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.\nFor purposes of this title, if a contribution is made pursuant to clause (i) with respect to a qualified disaster recovery distribution from an individual retirement plan, then, to the extent of the amount of the contribution, the qualified disaster recovery distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.\nIn the case of any qualified disaster recovery distribution, unless the taxpayer elects not to have this subparagraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable year period beginning with such taxable year.\nFor purposes of clause (i), rules similar to the rules of subparagraph (E) of section 408A(d)(3) shall apply.\nFor purposes of this paragraph and paragraph (8), the term “qualified disaster” means any disaster with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act after  December 27, 2020 .\nThe term “qualified disaster area” means, with respect to any qualified disaster, the area with respect to which the major disaster was declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.\nSuch term shall not include any area which is a qualified disaster area solely by reason of section 301 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.\nThe term “incident period” means, with respect to any qualified disaster, the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred.\nThe term “eligible retirement plan” shall have the meaning given such term by section 402(c)(8)(B).\nFor purposes of sections 401(a)(31), 402(f), and 3405, qualified disaster recovery distributions shall not be treated as eligible rollover distributions.\nFor purposes of this paragraph, the term “net premiums” means the amount of premiums paid under the contract reduced by any policyholder dividends.\nIf any taxpayer receives any amount under a modified endowment contract (as defined in section 7702A), the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.\nNotwithstanding any other provision of this section, for purposes of determining the portion of any distribution which is includible in gross income of a distributee who is a citizen or resident of the United States, the investment in the contract shall not include any applicable nontaxable contributions or applicable nontaxable earnings.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this subsection, including regulations treating contributions and earnings as not subject to tax under the laws of any foreign country where appropriate to carry out the purposes of this subsection.\nFor limitation on adjustments to basis of annuity contracts sold, see section 1021.\nPub. L. 117–328, div. T, title III, §\u202f334(c) , (e),  Dec. 29, 2022 ,  136 Stat. 5370 , 5372, provided that, applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , subsection (t)(2) of this section is amended by adding at the end the following new subparagraph:\n“(N) Qualified long-term care distributions\n“(i) In general\n“Any qualified long-term care distribution to which section 401(a)(39) applies.\n“(ii) Exception\n“If, with respect to the plan, the individual covered by the long-term care coverage to which such distribution relates is the spouse of the employee, clause (i) shall apply only if the employee and the employee’s spouse file a joint return.\n“(iii) Exemption of distributions from trustee to trustee transfer and withholding rules\n“For purposes of sections 401(a)(31), 402(f), and 3405, any qualified long-term care distribution described in clause (i) shall not be treated as an eligible rollover distribution.”.\nSee 2022 Amendment note below.\nThe enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, referred to in subsec. (f), means the enactment of  Pub. L. 107–16 , which was approved  June 7, 2001 .\nThe date of the enactment of the Small Business Job Protection Act of 1996, referred to in subsec. (n), is the date of enactment of  Pub. L. 104–188 , which was approved  Aug. 20, 1996 .\nThe Railroad Retirement Act of 1974, referred to in subsec. (r)(1), (2)(C)(i), (ii), is  act Aug. 29, 1935, ch. 812 , as amended generally by  Pub. L. 93–445, title I, §\u202f101 ,  Oct. 16, 1974 ,  88 Stat. 1305 , which is classified generally to subchapter IV (§\u202f231 et seq.) of chapter 9 of Title 45, Railroads. Sections 2(b), 3(h), and 4(e) and (h) of the Act are classified to sections 231a(b), 231b(h), and 231c(e) and (h), respectively, of Title 45. For further details and complete classification of this Act to the Code, see Codification note set out preceding  section 231 of Title 45 ,  section 231t of Title 45 , and Tables.\nThe date of the enactment of this subparagraph, referred to in subsec. (t)(2)(G)(iv), is the date of enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\nSection 1034 (as in effect on the day before the date of the enactment of this paragraph), referred to in subsec. (t)(8)(D)(i)(II), means  section 1034 of this title  as in effect on the day before  Aug. 5, 1997 . Section 1034 was repealed by  Pub. L. 105–34, title III, §\u202f312(b) ,  Aug. 5, 1997 ,  111 Stat. 839 .\nThe Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (t)(11)(E), (F)(i)(I), is  Pub. L. 93–288 ,  May 22, 1974 ,  88 Stat. 143 , which is classified principally to chapter 68 (§\u202f5121 et seq.) of Title 42, The Public Health and Welfare. Section 401 of the Act is classified to  section 5170 of Title 42 . For complete classification of this Act to the Code, see Short Title note set out under  section 5121 of Title 42  and Tables.\nSection 301 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, referred to in subsec. (t)(11)(F)(i)(II), is  section 301 of Pub. L. 116–260 , div. EE, title III,  Dec. 27, 2020 ,  134 Stat. 3070 , which is not classified to the Code.\nThe date of the enactment of this paragraph, referred to in subsec. (t)(11)(F)(iii)(I), is the date of enactment of  Pub. L. 117–328 , which was approved  Dec. 29, 2022 .\n2022—Subsec. (d)(3).  Pub. L. 117–328, §\u202f127(e)(3) , added par. (3).\nSubsec. (p)(6).  Pub. L. 117–328, §\u202f331(c)(1) , added par. (6).\nSubsec. (q)(2).  Pub. L. 117–328, §\u202f323(d)(2) , added concluding provisions.\nSubsec. (q)(3).  Pub. L. 117–328, §\u202f323(b) , designated existing provisions as subpar. (A) and inserted heading, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), and cls. (i) and (ii) of former subpar. (B) as subcls. (I) and (II), respectively, of cl. (ii), and added subpar. (B).\nSubsec. (t)(2)(A).  Pub. L. 117–328, §\u202f323(d)(1) , added concluding provisions.\nSubsec. (t)(2)(A)(ix).  Pub. L. 117–328, §\u202f333(a) , added cl. (ix).\nSubsec. (t)(2)(H)(v)(I).  Pub. L. 117–328, §\u202f311(a) , substituted “may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make” for “may make”.\nSubsec. (t)(2)(H)(vi)(IV).  Pub. L. 117–328, §\u202f401(b)(1) , substituted “403(b)(7)(A)(i)” for “403(b)(7)(A)(ii)”.\nSubsec. (t)(2)(I).  Pub. L. 117–328, §\u202f115(a) , added subpar. (I).\nSubsec. (t)(2)(J).  Pub. L. 117–328, §\u202f127(e)(2) , added subpar. (J).\nSubsec. (t)(2)(K).  Pub. L. 117–328, §\u202f314(a) , added subpar. (K).\nSubsec. (t)(2)(L).  Pub. L. 117–328, §\u202f326(a) , added subpar. (L).\nSubsec. (t)(2)(M).  Pub. L. 117–328, §\u202f331(a)(1) , added subpar. (M).\nSubsec. (t)(2)(N).  Pub. L. 117–328, §\u202f334(c) , added subpar. (N).\nSubsec. (t)(4)(C).  Pub. L. 117–328, §\u202f323(a) , added subpar. (C).\nSubsec. (t)(6).  Pub. L. 117–328, §\u202f332(b)(1) , designated existing provisions as subpar. (A), inserted heading, and added subpar. (B).\nSubsec. (t)(8)(F).  Pub. L. 117–328, §\u202f331(b)(1) , added subpar. (F).\nSubsec. (t)(10).  Pub. L. 117–328, §\u202f308(b) , substituted “and private sector firefighters” for “in governmental plans” in heading.\nSubsec. (t)(10)(A).  Pub. L. 117–328, §\u202f329(a) , substituted “age 50 or 25 years of service under the plan, whichever is earlier” for “age 50”.\nPub. L. 117–328, §\u202f308(a) , substituted “414(d)) or a distribution from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services” for “414(d))”.\nSubsec. (t)(10)(B)(i).  Pub. L. 117–328, §\u202f330(a) , substituted “emergency medical services, or services as a corrections officer or as a forensic security employee providing for the care, custody, and control of forensic patients” for “or emergency medical services”.\nSubsec. (t)(11).  Pub. L. 117–328, §\u202f331(a)(2) , added par. (11).\n2019—Subsec. (p)(2)(D), (E).  Pub. L. 116–94, §\u202f108(a) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (t)(2)(H).  Pub. L. 116–94, §\u202f113(a) , added subpar. (H).\n2015—Subsec. (t)(4)(A)(ii).  Pub. L. 114–26, §\u202f2(c) , inserted “or a distribution to which paragraph (10) applies” after “other than by reason of death or disability” in introductory provisions.\nSubsec. (t)(10)(A).  Pub. L. 114–26, §\u202f2(b) , struck out “which is a defined benefit plan” after “section 414(d))”.\nSubsec. (t)(10)(B).  Pub. L. 114–26, §\u202f2(a) , substituted “means—” for “means”, designated remainder of existing provisions as cl. (i), and added cl. (ii).\nSubsec. (t)(10)(B)(ii).  Pub. L. 114–113  substituted “any air traffic controller” for “or any air traffic controller” and inserted before period at end “,\u2000any nuclear materials courier described in section 8331(27) or 8401(33) of such title, any member of the United States Capitol Police, any member of the Supreme Court Police, or any diplomatic security special agent of the Department of State”.\n2014—Subsec. (c)(4).  Pub. L. 113–295, §\u202f221(a)(14)(A) , struck out “;\u2000except that if such date was before  January 1, 1954 , then the annuity starting date is  January 1, 1954 ” before period at end.\nSubsec. (g)(3).  Pub. L. 113–295, §\u202f221(a)(14)(B) , struck out “ January 1, 1954 , or” before “the first day”.\nPub. L. 113–295, §\u202f221(a)(14)(B) , which directed striking out “,\u2000whichever is later”, was executed by striking out “,\u2000whichever is the later” after “as an annuity” to reflect the probable intent of Congress.\n2012—Subsec. (t)(2)(A)(viii).  Pub. L. 112–141  added cl. (viii).\n2010—Subsec. (a).  Pub. L. 111–240  amended subsec. (a) generally. Prior to amendment, text read as follows: “Except as otherwise provided in this chapter, gross income includes any amount received as an annuity (whether for a period certain or during one or more lives) under an annuity, endowment, or life insurance contract.”\n2008—Subsec. (t)(2)(G)(iv).  Pub. L. 110–245 , which directed amendment by striking out “,\u2000and before  December 31, 2007 ” after “ September 11, 2001 ”, was executed by striking out “,\u2000and on or before  December 31, 2007 ” after “ September 11, 2001 ”, to reflect the probable intent of Congress and the intervening amendment by  Pub. L. 110–458 . See Amendment note and Effective Date of 2008 Amendment note below.\nPub. L. 110–458  inserted “on or” before “before” in first sentence.\n2006—Subsec. (e)(11), (12).  Pub. L. 109–280, §\u202f844(a) , added par. (11) and redesignated former par. (11) as (12).\nSubsec. (t)(2)(G).  Pub. L. 109–280, §\u202f827(a) , added subpar. (G).\nSubsec. (t)(10).  Pub. L. 109–280, §\u202f828(a) , added par. (10).\n2004—Subsec. (e)(9).  Pub. L. 108–311, §\u202f408(b)(3) , amended  Pub. L. 107–22, §\u202f1(b)(3)(A) . See 2001 Amendment note below.\nSubsec. (f).  Pub. L. 108–311, §\u202f408(a)(4) , substituted “Economic Growth and Tax Relief Reconciliation Act of 2001)” for “Economic Growth and Tax Relief Reconciliation Act of 2001” in concluding provisions.\nSubsec. (t)(2)(D)(i)(III).  Pub. L. 108–311, §\u202f207(6) , inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\nSubsec. (t)(7)(A)(iii).  Pub. L. 108–311, §\u202f207(7) , substituted “152(f)(1)” for “151(c)(3)”.\nSubsecs. (w), (x).  Pub. L. 108–357  added subsec. (w) and redesignated former subsec. (w) as (x).\n2001—Subsec. (e)(9).  Pub. L. 107–22, §\u202f1(b)(3)(A) , as amended by  Pub. L. 108–311, §\u202f408(b)(3) , substituted “Coverdell education savings” for “educational individual retirement” in heading.\nPub. L. 107–22, §\u202f1(b)(1)(A) , substituted “a Coverdell education savings” for “an education individual retirement”.\nPub. L. 107–16, §\u202f402(a)(4)(A) , (B), substituted “qualified tuition” for “qualified State tuition” in heading and text.\nSubsec. (f).  Pub. L. 107–16, §\u202f632(a)(3)(A) , substituted “section 403(b)(2)(D)(iii), as in effect before the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001” for “section 403(b)(2)(D)(iii))” in concluding provisions.\nSubsec. ( o )(4).  Pub. L. 107–16, §\u202f641(e)(1) , substituted “403(b)(8), 408(d)(3), and 457(e)(16)” for “and 408(d)(3)”.\nSubsec. (r)(2)(B)(i).  Pub. L. 107–90  substituted “3211(b)” for “3211(a)(2)”.\nSubsec. (t)(9).  Pub. L. 107–16, §\u202f641(a)(2)(C) , added par. (9).\n1998—Subsec. (e)(9).  Pub. L. 105–206, §\u202f6004(d)(3)(B) , added par. (9).\nSubsec. (n).  Pub. L. 105–206, §\u202f6023(3) , inserted “(as in effect on the day before the date of the enactment of the Small Business Job Protection Act of 1996)” after “section 101(b)(2)(D)”.\nSubsec. (t)(2)(A)(iv).  Pub. L. 105–206, §\u202f3436(a) , which directed amendment of cl. (iv) by striking out “or” at end, could not be executed because the word “or” did not appear at end.\nSubsec. (t)(2)(A)(vii).  Pub. L. 105–206, §\u202f3436(a) , added cl. (vii).\nSubsec. (t)(3)(A).  Pub. L. 105–206, §\u202f6023(4) , substituted “(A)(v)” for “(A)(v),”.\nSubsec. (t)(8)(E).  Pub. L. 105–206, §\u202f6005(c)(1) , in introductory provisions, substituted “120th day” for “120 days” and “60th day” for “60 days”.\n1997—Subsec. (d)(1)(B)(iii).  Pub. L. 105–34, §\u202f1075(b) , inserted “If the annuity is payable over the life of a single individual, the number of anticipated payments shall be determined as follows:” before table and struck out “primary” after “If the age of the” in table.\nSubsec. (d)(1)(B)(iv).  Pub. L. 105–34, §\u202f1075(a) , added cl. (iv).\nSubsec. (t)(2)(E).  Pub. L. 105–34, §\u202f203(a) , added subpar. (E).\nSubsec. (t)(2)(F).  Pub. L. 105–34, §\u202f303(a) , added subpar. (F).\nSubsec. (t)(7).  Pub. L. 105–34, §\u202f203(b) , added par. (7).\nSubsec. (t)(8).  Pub. L. 105–34, §\u202f303(b) , added par. (8).\n1996—Subsec. (b)(4)(A).  Pub. L. 104–188, §\u202f1704 ( l )(1), inserted “(determined without regard to subsection (c)(2))” after “contract”.\nSubsec. (d).  Pub. L. 104–188, §\u202f1403(a) , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “ Treatment of Employee Contributions Under Defined Contribution Plans as Separate Contracts .—For purposes of this section, employee contributions (and any income allocable thereto) under a defined contribution plan may be treated as a separate contract.”\nSubsec. (f).  Pub. L. 104–188, §\u202f1463(a) , in closing provisions, inserted before period at end “,\u2000or to the extent such credits are attributable to services performed as a foreign missionary (within the meaning of section 403(b)(2)(D)(iii))”.\nSubsec. (m)(2)(A) to (C).  Pub. L. 104–188, §\u202f1704(t)(2) , inserted “and” at end of subpar. (A), redesignated subpar. (C) as (B), and struck out former subpar. (B) which read as follows: “the consideration for the contract contributed by the employee for purposes of subsection (d)(1) (relating to employee’s contributions recoverable in 3 years) and subsection (e)(7) (relating to plans where substantially all contributions are employee contributions), and”.\nSubsec. (p)(4)(A)(ii).  Pub. L. 104–188, §\u202f1704(t)(77) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “ Special rules .—The term ‘qualified employer plan’—\n“(I) shall include any plan which was (or was determined to be) a qualified employer plan or a government plan, but\n“(II) shall not include a plan described in subsection (e)(7).”\nSubsec. (t)(2)(B).  Pub. L. 104–191, §\u202f361(c) , substituted “,\u2000(C), or (D)” for “or (C)”.\nSubsec. (t)(2)(D).  Pub. L. 104–191, §\u202f361(b) , added subpar. (D).\nSubsec. (t)(3)(A).  Pub. L. 104–191, §\u202f361(a) , struck out “(B),” after “Subparagraphs (A)(v),”.\nSubsec. (t)(6).  Pub. L. 104–188, §\u202f1421(b)(4)(A) , added par. (6).\n1992—Subsec. ( o )(4).  Pub. L. 102–318  substituted “402(c)” for “402(a)(5), 402(a)(7)”.\n1990—Subsec. (t)(2)(C), (D).  Pub. L. 101–508, §\u202f11802(a)(1) , (2), redesignated subpar. (D) as (C) and struck out former subpar. (C) “Exceptions for distributions from employee stock ownership plans” which read as follows: “Any distribution made before  January 1, 1990 , to an employee from an employee stock ownership plan (as defined in section 4975(e)(7)) or a tax credit employee stock ownership plan (as defined in section 409) if—\n“(i) such distribution is attributable to assets which have been invested in employer securities (within the meaning of section 409( l )) at all times during the 5-plan-year period preceding the plan year in which the distribution is made, and\n“(ii) at all times during such period the requirements of sections 401(a)(28) and 409 (as in effect at such times) are met with respect to such employer securities.”\nSubsec. (t)(3)(A).  Pub. L. 101–508, §\u202f11802(a)(3) , substituted “and (C)” for “(C), and (D)”.\n1989—Subsec. (e)(11)(A).  Pub. L. 101–239, §\u202f7815(a)(3) , (5), substituted “calendar year” for “12-month period” in cls. (i) and (ii), and inserted at end “The preceding sentence shall not apply to any contract described in paragraph (5)(D).”\nSubsec. (q)(2)(B).  Pub. L. 101–239, §\u202f7811(m)(4) , inserted an additional closing parenthesis after “subsection (s)(6)(B))”.\n1988—Subsec. (d).  Pub. L. 100–647, §\u202f1011A(b)(2)(A) , added subsec. (d).\nSubsec. (e)(4)(A).  Pub. L. 100–647, §\u202f5012(d)(1) , inserted at end “The preceding sentence shall not apply for purposes of determining investment in the contract, except that the investment in the contract shall be increased by any amount included in gross income by reason of the amount treated as received under the preceding sentence.”\nSubsec. (e)(5)(C).  Pub. L. 100–647, §\u202f5012(a)(2) , substituted “Except as provided in paragraph (10) and except to the extent” for “Except to the extent”.\nSubsec. (e)(5)(D).  Pub. L. 100–647, §\u202f1011A(b)(9)(B) , substituted “paragraph (8)” for “paragraphs (7) and (8)”.\nSubsec. (e)(7).  Pub. L. 100–647, §\u202f1011A(b)(9)(A) , struck out par. (7) which related to special rules for plans where substantially all contributions are employee contributions.\nSubsec. (e)(8)(A).  Pub. L. 100–647, §\u202f1011A(b)(9)(C) , struck out “(other than paragraph (7))” after “this subsection”.\nSubsec. (e)(9).  Pub. L. 100–647, §\u202f1011A(b)(2)(B) , struck out par. (9) which related to treatment of employee contributions as separate contract.\nSubsec. (e)(10).  Pub. L. 100–647, §\u202f5012(a)(1) , added par. (10).\nSubsec. (e)(11).  Pub. L. 100–647, §\u202f5012(d)(2) , added par. (11).\nSubsec. (f).  Pub. L. 100–647, §\u202f1011A(b)(1)(A) , struck out “for purposes of subsections (d)(1) and (e)(7), the consideration for the contract contributed by the employee,” after “contract,” in introductory provisions.\nSubsec. (n).  Pub. L. 100–647, §\u202f1011A(b)(1)(B) , substituted “Subsection (b)” for “Subsections (b) and (d)”.\nSubsec. ( o )(2).  Pub. L. 100–647, §\u202f1011A(c)(8) , struck out par. (2) which related to additional tax if amount received before age 59½.\nSubsec. (p)(3)(A).  Pub. L. 100–647, §\u202f1011A(h)(1) , inserted “to which paragraph (1) does not apply by reason of paragraph (2) during the period” after “loan”.\nSubsec. (p)(3)(B).  Pub. L. 100–647, §\u202f1011A(h)(2) , substituted “Period” for “Loans” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraph (A), a loan is described in this subparagraph—\n“(i) if paragraph (1) does not apply to such loan by reason of paragraph (2), and\n“(ii) if—\n“(I) such loan is made to a key employee (as defined in section 416(i)), or\n“(II) such loan is secured by amounts attributable to elective 401(k) or 403(b) deferrals (as defined in section 402(g)(3)).”\nSubsec. (q)(2)(B).  Pub. L. 100–647, §\u202f1018(t)(1)(B) , substituted “subsection (s)(6)(B))” for “subsection (s)(6)(B)))”.\nSubsec. (q)(2)(D).  Pub. L. 100–647, §\u202f1011A(c)(7) , inserted “designated” before “beneficiary”.\nPub. L. 100–647 , §§\u202f1011A(c)(4), 1018(u)(8), amended subpar. (D) identically, substituting a comma for period at end.\nSubsec. (q)(2)(E).  Pub. L. 100–647, §\u202f1011A(b)(9)(D) , struck out “(determined without regard to subsection (e)(7))” after “subsection (e)(5)(D)”.\nSubsec. (q)(2)(G).  Pub. L. 100–647, §\u202f1011A(c)(4) , substituted a comma for period at end.\nSubsec. (q)(2)(H).  Pub. L. 100–647, §\u202f1011A(c)(6) , added subpar. (H).\nSubsec. (q)(3)(B).  Pub. L. 100–647, §\u202f1011A(c)(5) , substituted “taxpayer” for “employee” in cls. (i) and (ii).\nSubsec. (s)(5).  Pub. L. 100–647, §\u202f1018(k)(2) , substituted “certain annuity contracts” for “annuity contracts which are part of qualified plans” in heading.\nSubsec. (s)(5)(D).  Pub. L. 100–647, §\u202f1018(k)(1) , added subpar. (D).\nSubsec. (s)(7).  Pub. L. 100–647, §\u202f1018(t)(1)(A) , substituted “primary annuitant” for “primary annuity”.\nSubsec. (t)(2)(A)(iv).  Pub. L. 100–647, §\u202f1011A(c)(7) , inserted “designated” before “beneficiary”.\nSubsec. (t)(2)(A)(v).  Pub. L. 100–647, §\u202f1011A(c)(1) , struck out “on account of early retirement under the plan” after “separation from service”.\nSubsec. (t)(2)(C).  Pub. L. 100–647, §\u202f1011A(c)(2) , substituted “Exceptions for distributions from employee stock ownership plans” for “Certain plans” in heading and amended text generally. Prior to amendment, text read as follows:\n“(i)  In general .—Except as provided in clause (ii), any distribution made before  January 1, 1990 , to an employee from an employee stock ownership plan defined in section 4975(e)(7) to the extent that, on average, a majority of assets in the plan have been invested in employer securities (as defined in section 409( l )) for the 5-plan-year period preceding the plan year in which the distribution is made.\n“(ii)  Benefits distributed must be invested in employer securities for 5 years .—Clause (i) shall not apply to any distribution which is attributable to assets which have not been invested in employer securities at all times during the period referred to in clause (i).”\nSubsec. (t)(3)(A).  Pub. L. 100–647, §\u202f1011A(c)(3) , substituted “(C), and (D)” for “and (C)”.\nSubsec. (u)(1)(A).  Pub. L. 100–647, §\u202f1011A(i)(1) , inserted “(other than subchapter L)” after “subtitle”.\nSubsec. (u)(3)(D).  Pub. L. 100–647, §\u202f1011A(i)(3) , substituted “is purchased” for “which is purchased” and “is held” for “which is held”.\nPub. L. 100–647, §\u202f1011A(i)(2) , substituted “until all amounts under such contract are distributed to the employee for whom such contract was purchased or the employee’s beneficiary” for “until such time as the employee separates from service”.\nSubsec. (u)(3)(E).  Pub. L. 100–647, §\u202f1011A(i)(3) , substituted “is” for “which is”.\nSubsec. (u)(4)(C).  Pub. L. 100–647, §\u202f1011A(i)(4) , added subpar. (C).\nSubsecs. (v), (w).  Pub. L. 100–647, §\u202f5012(b)(1) , added subsec. (v) and redesignated former subsec. (v) as (w).\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f1122(c)(2) , amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “Gross income does not include that part of any amount received as an annuity under an annuity, endowment, or life insurance contract which bears the same ratio to such amount as the investment in the contract (as of the annuity starting date) bears to the expected return under the contract (as of such date). This subsection shall not apply to any amount to which subsection (d)(1) (relating to certain employee annuities) applies.”\nSubsec. (d).  Pub. L. 99–514, §\u202f1122(c)(1) , struck out subsec. (d) which related to employee’s annuities where the employee’s contributions were recoverable in 3 years.\nSubsec. (e)(4)(C).  Pub. L. 99–514, §\u202f1826(b)(3) , added subpar. (C).\nSubsec. (e)(5)(D).  Pub. L. 99–514, §\u202f1122(c)(3)(B) , substituted “paragraphs (7) and (8)” for “paragraph (7)” in introductory provisions.\nPub. L. 99–514, §\u202f1854(b)(1) , inserted closing provisions which read as follows: “Any dividend described in section 404(k) which is received by a participant or beneficiary shall, for purposes of this subparagraph, be treated as paid under a separate contract to which clause (ii)(I) applies.”\nSubsec. (e)(7)(B).  Pub. L. 99–514, §\u202f1852(c)(1) , in introductory provisions substituted “any plan or contract” for “any trust or contract”, in cl. (ii) substituted “85 percent or more of” for “85 percent of”, and inserted closing provision: “For purposes of clause (ii), deductible employee contributions (as defined in subsection ( o )(5)(A)) shall not be taken into account.”\nSubsec. (e)(8), (9).  Pub. L. 99–514, §\u202f1122(c)(3)(A) , added pars. (8) and (9).\nSubsec. (f).  Pub. L. 99–514, §\u202f1852(c)(3) , in introductory provisions, substituted “subsections (d)(1) and (e)(7)” for “subsection (d)(1)” and “subsection (e)(6)” for “subsection (e)(1)(B)”.\nSubsec. (m)(2)(B).  Pub. L. 99–514, §\u202f1852(c)(4)(A) , inserted “and subsection (e)(7) (relating to plans where substantially all contributions are employee contributions)”.\nSubsec. (m)(2)(C).  Pub. L. 99–514, §\u202f1852(c)(4)(B) , substituted “subsection (e)(6)” for “subsection (e)(1)(B)”.\nSubsec. (m)(5).  Pub. L. 99–514, §\u202f1852(a)(2)(C) , which directed that par. (5) be amended by substituting “5-percent owners” for “owner-employees” in heading, was executed by substituting “5-percent owners” for “key employees”, to reflect the probable intent of Congress and intervening amendment by  section 713(c)(1)(B) of Pub. L. 98–369 .\nSubsec. (m)(5)(A).  Pub. L. 99–514, §\u202f1123(d)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “This subparagraph shall apply—\n“(i) to amounts which—\n“(I) are received from a qualified trust described in section 401(a) or under a plan described in section 403(a), and\n“(II) are received by a 5-percent owner before such owner attains the age of 59½ years, for any reason other than such owner becoming disabled (within the meaning of paragraph (7) of this section), and\n“(ii) to amounts which are received from a qualified trust described in section 401(a) or under a plan described in section 403(a) at any time by a 5-percent owner, or by the successor of such owner, but only to the extent that such amounts are determined (under regulations prescribed by the Secretary) to exceed the benefits provided for such individual under the plan formula.\nClause (i) shall not apply to any amount received by an individual in his capacity as a policyholder of an annuity, endowment, or life insurance contract which is in the nature of a dividend or similar distribution and clause (i) shall not apply to amounts attributable to benefits accrued before  January 1, 1985 .”\nPub. L. 99–514, §\u202f1852(a)(2)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “This paragraph shall apply—\n“(i) to amounts (other than any amount received by an individual in his capacity as a policyholder of an annuity, endowment, or life insurance contract which is in the nature of a dividend or similar distribution) which are received from a qualified trust described in section 401(a) or under a plan described in section 403(a) and which are received by an individual, who is, or has been, a 5-percent owner, before such individual attains the age of 59½ years, for any reason other than the individual’s becoming disabled (within the meaning of paragraph (7) of this subsection), but only to the extent that such amounts are attributable to contributions paid on behalf of such individual (other than contributions made by him as a 5-percent owner) while he was a 5-percent owner, and\n“(ii) to amounts which are received from a qualified trust described in section 401(a) or under a plan described in section 403(a) at any time by an individual who is, or has been, a 5-percent owner or by the successor of such individual, but only to the extent that such amounts are determined, under regulations prescribed by the Secretary, to exceed the benefits provided for such individual under the plan formula.”\nSubsec. (m)(5)(C).  Pub. L. 99–514, §\u202f1852(a)(2)(B) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “For purposes of this paragraph, the term ‘5 percent owner’ have the same meanings as when used in section 416.”\nSubsec. (m)(10).  Pub. L. 99–514, §\u202f1898(c)(1)(B) , inserted “who is the spouse or former spouse of the participant”.\nSubsec. ( o )(5).  Pub. L. 99–514, §\u202f1101(b)(2)(C) , inserted “and made for a taxable year beginning before  January 1, 1987 ,” in subpar. (A), substituted “subsection (p)(3)(A)(i)” for “section 219(e)(3)” in subpar. (C), and substituted “subsection (p)(3)(B)” for “section 219(e)(4)” in subpar. (D).\nSubsec. (p)(2)(A)(i).  Pub. L. 99–514, §\u202f1134(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “$50,000, or”.\nSubsec. (p)(2)(B)(ii).  Pub. L. 99–514, §\u202f1134(d) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “Clause (i) shall not apply to any loan used to acquire, construct, reconstruct, or substantially rehabilitate any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as a principal residence of the participant or a member of the family (within the meaning of section 267(c)(4)) of the participant.”\nSubsec. (p)(2)(C), (D).  Pub. L. 99–514, §\u202f1134(b) , added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (p)(3).  Pub. L. 99–514, §\u202f1134(c) , added par. (3) and redesignated former par. (3) as (4).\nPub. L. 99–514, §\u202f1101(b)(2)(B) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For purposes of this subsection, the term ‘qualified employer plan’ means any plan which was (or was determined to be) a qualified employer plan (as defined in section 219(e)(3) other than a plan described in subsection (e)(7)). For purposes of this subsection, such term includes any government plan (as defined in section 219(e)(4)).”\nSubsec. (p)(4), (5).  Pub. L. 99–514, §\u202f1134(c) , redesignated former pars. (3) and (4) as (4) and 5, respectively.\nSubsec. (q).  Pub. L. 99–514, §\u202f1123(b)(1)(B) , substituted “10-percent” for “5-percent” in heading.\nSubsec. (q)(1).  Pub. L. 99–514, §\u202f1123(b)(1)(A) , substituted “10 percent” for “5 percent”.\nSubsec. (q)(2).  Pub. L. 99–514, §\u202f1123(b)(3) , substituted “Paragraph (1)” for “This subsection” in introductory provisions.\nSubsec. (q)(2)(B).  Pub. L. 99–514, §\u202f1826(c) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “made to a beneficiary (or to the estate of an annuitant) on or after the death of an annuitant,”.\nSubsec. (q)(2)(D).  Pub. L. 99–514, §\u202f1123(b)(2) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “which is one of a series of substantially equal periodic payments made for the life of a taxpayer or over a period extending for at least 60 months after the annuity starting date,”.\nSubsec. (q)(2)(E).  Pub. L. 99–514, §\u202f1852(c)(2) , inserted “(determined without regard to subsection (e)(7))”.\nSubsec. (q)(2)(G).  Pub. L. 99–514, §\u202f1826(d) , added subpar. (G).\nSubsec. (q)(2)(I), (J).  Pub. L. 99–514, §\u202f1123(b)(4) , which added subpars. (I) and (J) directed the amendment of subpar. (G) by striking out “or” at the end thereof, and of subpar. (H) by striking out the period at the end thereof, could not be executed to subpars. (G) and (H) because subpar. (G) does not contain “or”, and no subpar. (H) was enacted.\nSubsec. (q)(3).  Pub. L. 99–514, §\u202f1123(b)(3) , added par. (3).\nSubsec. (s)(1).  Pub. L. 99–514, §\u202f1826(b)(2) , substituted “any holder of such contract” for “the holder of such contract” in subpars. (A) and (B).\nSubsec. (s)(5).  Pub. L. 99–514, §\u202f1826(a) , added par. (5).\nSubsec. (s)(6), (7).  Pub. L. 99–514, §\u202f1826(b)(1) , added pars. (6) and (7).\nSubsec. (t).  Pub. L. 99–514, §\u202f1123(a) , added subsec. (t) and redesignated former subsec. (t) as (u).\nSubsecs. (u), (v).  Pub. L. 99–514, §\u202f1135(a) , added subsec. (u) and redesignated former subsec. (u) as (v).\n1984—Subsec. (e)(5)(D).  Pub. L. 98–369, §\u202f523(b)(1) , substituted “Except as provided in paragraph (7), this” for “This”.\nSubsec. (e)(5)(D)(ii)(IV).  Pub. L. 98–369, §\u202f211(b)(1) , which directed substitution of “section 818(a)(3)” for “805(d)(3)” in subpar. (D)(i)(IV), was executed to subpar. (D)(ii)(IV) to reflect the probable intent of Congress.\nSubsec. (e)(7).  Pub. L. 98–369, §\u202f523(a) , added par. (7).\nSubsec. (k).  Pub. L. 98–369, §\u202f421(b)(1) , repealed subsec. (k) relating to payments in discharge of alimony.\nSubsec. (m)(5).  Pub. L. 98–369, §\u202f713(c)(1)(B) , substituted “key employees” for “owner-employees” in heading.\nSubsec. (m)(5)(A).  Pub. L. 98–369, §\u202f521(d)(1) , (2), substituted “5-percent owner” for “key employee” wherever appearing and struck out “in a top-heavy plan” at end of cl. (i).\nPub. L. 98–369, §\u202f713(c)(1)(A) , substituted “as a key employee” for “as an owner-employee” in cl. (i).\nSubsec. (m)(5)(C).  Pub. L. 98–369, §\u202f521(d)(3) , substituted “the term ‘5 percent owner’\u202f” for “the terms ‘key employee’ and ‘top-heavy plan’\u202f”.\nSubsec. (m)(9).  Pub. L. 98–369, §\u202f713(d)(1) , repealed par. (9) relating to return of excess contributions before due date of return.\nSubsec. (m)(10).  Pub. L. 98–397  added par. (10).\nSubsec. ( o )(1).  Pub. L. 98–369, §\u202f491(d)(3) , substituted “402 and 403” for “402, 403, and 405”.\nSubsec. ( o )(3)(A).  Pub. L. 98–369, §\u202f713(b)(1)(A) , inserted “(other than the exception contained in paragraph (2) thereof)”.\nSubsec. ( o )(4).  Pub. L. 98–369, §\u202f491(d)(4) , substituted “and 408(d)(3)” for “408(d)(3), and 409(b)(3)(C)”.\nSubsec. (p)(2)(A).  Pub. L. 98–369, §\u202f713(b)(1)(B) , inserted at end “For purposes of clause (ii), the present value of the nonforfeitable accrued benefit shall be determined without regard to any accumulated deductible employee contributions (as defined in subsection ( o )(5)(B)).”\nSubsec. (p)(2)(A)(ii).  Pub. L. 98–369, §\u202f713(b)(4) , substituted as cl. (ii) “the greater of (I) one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan, or (II) $10,000” for “½ of the present value of the nonforfeitable accrued benefit of the employee under the plan (but not less than $10,000)”.\nSubsec. (p)(3).  Pub. L. 98–369, §\u202f523(b)(2) , inserted “other than a plan described in subsection (e)(7)”.\nSubsec. (q)(1).  Pub. L. 98–369, §\u202f222(a) , amended par. (1) generally, striking out designation “(A) In general.—” preceding text, substituting “which is includible in gross income” for “includible in gross income which is properly allocable to any investment in the annuity contract made during the 10-year period ending on the date such amount was received by the taxpayer”, and striking out former subpar. (B), which had provided that for purposes of subpar. (A), the amount includible in gross income would be allocated to the earliest investment in the contract with respect to which amounts had not been previously fully allocated under this par.\nSubsecs. (s), (t).  Pub. L. 98–369, §\u202f222(b) , added subsec. (s) and redesignated former subsec. (s) as (t).\n1983—Subsec. ( o )(2)(A).  Pub. L. 97–448, §\u202f103(c)(6) , struck out “to which the employee made one or more deductible employee contributions” after “from a qualified employer plan or government plan”.\nSubsec. (p)(3).  Pub. L. 97–448, §\u202f103(c)(3)(B)(i) , struck out “without regard to subparagraph (D) thereof” after “as defined in section 219(e)(3)”.\nSubsecs. (r), (s).  Pub. L. 98–76  added subsec. (r) and redesignated former subsec. (r) as (s).\n1982—Subsec. (e).  Pub. L. 97–248, §\u202f265(a) , in par. (1) substituted provisions relating to the application of this subsection to amounts received under annuity, endowment, or life insurance contracts which are not received as annuities and to amounts received as dividends for provisions which stated a general rule relating to the includability as gross income of amounts that were received under annuity, endowment, or life insurance contracts which were not received as annuities and also stated that for the purposes of this section amounts which were received as dividends would be treated as amounts not received as an annuity, in par. (2) substituted provisions stating a general rule as to the includability as gross income of amounts received before or after the annuity starting date for provisions which set out those amounts which would be treated as amounts not received as an annuity, and added pars. (3) to (6).\nSubsec. (m)(4).  Pub. L. 97–248, §\u202f236(b)(1) , struck out par. (4) which related to amounts constructively received with respect to assignments or pledges, and loans on contracts.\nSubsec. (m)(5).  Pub. L. 97–248, §\u202f237(d)(1) , (2), in subpar. (A) substituted applicability to key employees for applicability to owner-employees and added subpar. (C).\nSubsec. (m)(6).  Pub. L. 97–248, §\u202f237(d)(3) , struck out “except in applying paragraph (5),” after “shall”.\nSubsec. (m)(8).  Pub. L. 97–248, §\u202f236(b)(1) , struck out par. (8) which related to loans to owner-employees.\nSubsec. ( o )(3)(A).  Pub. L. 97–248, §\u202f236(b)(2) , substituted reference to subsec. (p) of this section for references to subsec. (m)(4) and (8) of this section.\nSubsec. (p).  Pub. L. 97–248, §\u202f236(a) , added subsec. (p). Former subsec. (p) redesignated (q).\nSubsec. (q).  Pub. L. 97–248, §\u202f265(b)(1) , added subsec. (q). Former subsec. (q) redesignated (r).\nPub. L. 97–248, §\u202f236(a) , redesignated former subsec. (p) as (q).\nSubsec. (r).  Pub. L. 97–248 , §§\u202f236(a), 265(b)(1), redesignated former subsec. (p) as (r).\n1981—Subsec. (m)(6).  Pub. L. 97–34, §\u202f312(d)(1) , expanded definition of “owner-employee” to include an employee within the meaning of section 401(c)(1) except in applying paragraph (5).\nSubsec. (m)(8).  Pub. L. 97–34, §\u202f312(d)(2) , added par. (8).\nSubsec. (m)(9).  Pub. L. 97–34, §\u202f312(e)(1) , added par. (9).\nSubsecs. ( o ), (p).  Pub. L. 97–34, §\u202f311(b)(1) , added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n1976—Subsec. (c)(2), (3)(A).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f1901(a)(12) , struck out in subpar. (B) “(whether or not before  January 1, 1954 )” after “beginning on the date”, and in provisions following subpar. (B) struck out “(under this paragraph and prior income tax laws)” after “until there has been so excluded”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (i).  Pub. L. 94–455, §\u202f1951(b)(1)(A) , struck out subsec. (i) which related to joint annuities where first annuitant died in 1951, 1952, or 1953.\nSubsec. (m)(2), (3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (m)(4)(A).  Pub. L. 94–455, §\u202f1901(a)(13) , substituted “an individual retirement account” for “an individual retirement amount”.\nSubsec. (m)(5)(A)(ii), (7).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1974—Subsec. (m)(1).  Pub. L. 93–406, §\u202f2001(h)(2) , struck out par. (1) which related to certain amounts received before annuity starting date.\nSubsec. (m)(4)(A).  Pub. L. 93–406, §\u202f2002(g)(10)(A) , inserted references to an individual retirement amount described in section 408(a) and an individual retirement annuity described in section 408(b).\nSubsec. (m)(5)(A).  Pub. L. 93–406, §\u202f2001(e)(5) , (h)(3), substituted “(other than contributions made by him as an owner-employee)” for “(whether or not paid by him)” in cl. (i), and struck out cl. (iii) which had made reference to amounts which were received, by an individual who was or had been, an owner-employee, by reason of the distribution under the provisions of section 401(e)(2)(E) of his entire interest in all qualified trusts described in section 401(a) and in all plans described in section 403(a).\nSubsec. (m)(5)(B).  Pub. L. 93–406, §\u202f2001(g)(1) , substituted provisions that if a person receives an amount to which subsec. (m)(5) applies, his tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of the amount so received which is includible in his gross income for such taxable year for provisions that if the aggregate amounts to which subsec. (m)(5) applied received by any person in his taxable year equalled or exceeded $2,500, the increase in his tax for the taxable year in which such amounts were received and attributable to such amounts could not be less than 110 percent of the aggregate increase in taxes, for the taxable year and the 4 immediately preceding taxable years, which would have resulted if such amounts had been included in such person’s gross income ratably over such taxable years, with provision for alternate computation if deductions had been allowed under section 404 for contributions paid for a number of prior taxable years less than 4.\nSubsec. (m)(5)(C) to (E).  Pub. L. 93–406, §\u202f2001(g)(2)(A) , struck out subpars. (C) to (E) which contained special rules for the application of subsec. (m)(5).\nSubsec. (m)(6).  Pub. L. 93–406, §\u202f2002(g)(10)(B) , inserted reference to an individual for whose benefit an individual retirement account or annuity described in section 408(a) or (b) is maintained.\nSubsec. (n).  Pub. L. 93–406 , §§\u202f2005(c)(3), 2007(b)(2), redesignated former subsec. ( o ) as (n) and in heading of subsec. (n) as so redesignated inserted reference to survivor benefit plan. Former subsec. (n), which set out provisions covering the treatment to be accorded total distributions, was struck out.\nSubsec. ( o ).  Pub. L. 93–406, §\u202f2005(c)(3) , redesignated former subsec. (p) as ( o ). Former subsec. ( o ) redesignated (n) and amended.\nSubsec. (p).  Pub. L. 93–406, §\u202f2005(c)(3) , redesignated subsec. (p) as ( o ).\n1969—Subsec. (n)(1).  Pub. L. 91–172, §\u202f515(b)(1) , altered section to accommodate the insertion into sections 402 and 403 of provisions under which employer contributions to qualified pension, profit sharing, stock bonus, and annuity plans for plan years beginning after 1969 are to be treated as ordinary income when received in a lump sum distribution, but with such amounts to be eligible for a special averaging procedure.\nSubsec. (n)(4).  Pub. L. 91–172, §\u202f515(b)(2) , added par. (4).\n1966—Subsecs. ( o ), (p).  Pub. L. 89–365  added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n1965—Subsec. (m)(5)(A)(i).  Pub. L. 89–97, §\u202f106(d)(2)(A) , substituted “paragraph (7) of this subsection” for “section 213(g)(3)”.\nSubsec. (m)(7).  Pub. L. 89–97, §\u202f106(d)(2)(B) , added par. (7).\nSubsec. (n)(1).  Pub. L. 89–97, §\u202f106(d)(2)(C) , substituted in subpars. (A)(iii) and (B)(iii) “subsection (m)(7)” for “section 213(g)(3)”.\nSubsec. (n)(3).  Pub. L. 89–44  substituted “sections 31 and 39” for “section 31” in sentence following subpar. (B).\n1964—Subsec. (e)(3).  Pub. L. 88–272  struck out par. (3) which provided for a limit on the tax attributable to the receipt of a lump sum.\n1962—Subsec. (d)(2).  Pub. L. 87–792, §\u202f4(a) , designated existing provisions as cl. (A) and added cl. (B).\nSubsec. (f).  Pub. L. 87–834  inserted sentence providing that par. (2) shall not apply to amounts which were contributed by the employer after  Dec. 31, 1962 , and which would not have been includible in the gross income of the employee by reason of the application of Section 911 if such amounts had been paid directly to the employee at the time of contribution, and making such sentence inapplicable to amounts which were contributed by the employer, as determined under regulations, to provide pension or annuity credits, to the extent such credits are attributable to services performed before  Jan. 1, 1963 , and are provided pursuant to pension or annuity plan provisions in existence on  Mar. 12, 1962 , and on that date applicable to such services.\nSubsecs. (m) to ( o ).  Pub. L. 87–792, §\u202f4(b) , added subsecs. (m) and (n) and redesignated former subsec. (m) as ( o ).\nPub. L. 117–328, div. T, title I, §\u202f115(c) ,  Dec. 29, 2022 ,  136 Stat. 5297 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions made after  December 31, 2023 .”\nPub. L. 117–328, div. T, title I, §\u202f127(g) ,  Dec. 29, 2022 ,  136 Stat. 5330 , provided that:  “The amendments made by this section [enacting sections 1193 to 1193c of Title 29, Labor, and amending this section,  section 402A of this title , and sections 1002, 1021, 1030, and 1104 of Title 29] shall apply to plan years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title III, §\u202f308(c) ,  Dec. 29, 2022 ,  136 Stat. 5345 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f311(b) ,  Dec. 29, 2022 ,  136 Stat. 5347 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Dec. 29, 2022 ]. \n \n “(2)   Temporary rule with respect to distributions already made .— In the case of a qualified birth or adoption distribution (as defined in section 72(t)(2)(H)(iii)(I) of the Internal Revenue Code of 1986) made on or before the date of the enactment of this Act, section 72(t)(2)(H)(v)(I) of such Code (as amended by this Act [div. T of  Pub. L. 117–328 ]) shall apply to such distribution by substituting ‘after such distribution and before  January 1, 2026 ’ for ‘during the 3-year period beginning on the day after the date on which such distribution was received’.”\nPub. L. 117–328, div. T, title III, §\u202f314(b) ,  Dec. 29, 2022 ,  136 Stat. 5350 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions made after  December 31, 2023 .”\nPub. L. 117–328, div. T, title III, §\u202f323(e) ,  Dec. 29, 2022 ,  136 Stat. 5358 , provided that: \n “(1)   In general .— The amendments made by subsections (a), (b), and (c) [amending this section and  section 6724 of this title ] shall apply to transfers, rollovers, and exchanges occurring after  December 31, 2023 . \n \n “(2)   Annuity payments .— The amendment made by subsection (d) [amending this section] shall apply to distributions commencing on or after the date of the enactment of this Act [ Dec. 29, 2022 ]. \n \n “(3)   No inference .— Nothing in the amendments made by this section shall be construed to create an inference with respect to the law in effect prior to the effective date of such amendments.”\nPub. L. 117–328, div. T, title III, §\u202f326(b) ,  Dec. 29, 2022 ,  136 Stat. 5359 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f329(b) ,  Dec. 29, 2022 ,  136 Stat. 5361 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f330(b) ,  Dec. 29, 2022 ,  136 Stat. 5361 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f331(a)(3) ,  Dec. 29, 2022 ,  136 Stat. 5363 , provided that:  “The amendments made by this subsection [amending this section] shall apply to distributions with respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii) of the Internal Revenue Code of 1986, as added by this subsection) for which begins on or after the date which is 30 days after the date of the enactment of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [ Dec. 27, 2020 ].”\nPub. L. 117–328, div. T, title III, §\u202f331(b)(3) ,  Dec. 29, 2022 ,  136 Stat. 5365 , provided that:  “The amendments made by this subsection [amending this section and  section 402 of this title ] shall apply to recontributions of withdrawals for home purchases with respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii) of the Internal Revenue Code of 1986, as added by this subsection [probably should be “subsection (a)”]) for which begins on or after the date which is 30 days after the date of the enactment of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [ Dec. 27, 2020 ].”\nPub. L. 117–328, div. T, title III, §\u202f331(c)(2) ,  Dec. 29, 2022 ,  136 Stat. 5366 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to plan loans made with respect to disasters the incident period (as defined in section 72(t)(11)(F)(ii) of the Internal Revenue Code of 1986, as added by this subsection [probably should be “subsection (a)”]) for which begins on or after the date which is 30 days after the date of the enactment of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [ Dec. 27, 2020 ].”\nPub. L. 117–328, div. T, title III, §\u202f332(c) ,  Dec. 29, 2022 ,  136 Stat. 5368 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to plan years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title III, §\u202f333(b) ,  Dec. 29, 2022 ,  136 Stat. 5368 , provided that:  “The amendments made by this section [amending this section] shall apply to any determination of, or affecting, liability for taxes, interest, or penalties which is made on or after the date of the enactment of this Act [ Dec. 29, 2022 ], without regard to whether the act (or failure to act) upon which the determination is based occurred before such date of enactment. Notwithstanding the preceding sentence, nothing in the amendments made by this section shall be construed to create an inference with respect to the law in effect prior to the effective date of such amendments.”\nPub. L. 117–328, div. T, title III, §\u202f334(e) ,  Dec. 29, 2022 ,  136 Stat. 5372 , provided that:  “The amendments made by this section [enacting  section 6050Z of this title  and amending this section and sections 401, 403, 457, and 6724 of this title] shall apply to distributions made after the date which is 3 years after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title IV, §\u202f401(c) ,  Dec. 29, 2022 ,  136 Stat. 5388 , provided that:  “The amendments made by this section [amending this section and sections 401, 408, 408A, and 4973 of this title] shall take effect as if included in the section of the Setting Every Community Up for Retirement Enhancement Act of 2019 [div. O of  Pub. L. 116–94 ] to which the amendment relates.”\nPub. L. 116–94, div. O, title I, §\u202f108(b) ,  Dec. 20, 2019 ,  133 Stat. 3149 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to loans made after the date of the enactment of this Act [ Dec. 20, 2019 ].”\nPub. L. 116–94, div. O, title I, §\u202f113(b) ,  Dec. 20, 2019 ,  133 Stat. 3156 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions made after  December 31, 2019 .”\nPub. L. 114–113, div. Q, title III, §\u202f308(b) ,  Dec. 18, 2015 ,  129 Stat. 3089 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 2015 .”\nPub. L. 114–26, §\u202f2(d) ,  June 29, 2015 ,  129 Stat. 319 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 2015 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–240, title II, §\u202f2113(b) ,  Sept. 27, 2010 ,  124 Stat. 2567 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts received in taxable years beginning after  December 31, 2010 .”\nPub. L. 110–458, title I, §\u202f112 ,  Dec. 23, 2008 ,  122 Stat. 5113 , provided that:  “Except as otherwise provided in this subtitle [subtitle A (§§\u202f101–112) of title I of  Pub. L. 110–458 , see Tables for classification], the amendments made by this subtitle shall take effect as if included in the provisions of the 2006 Act [ Pub. L. 109–280 ] to which the amendments relate.”\nPub. L. 110–245, title I, §\u202f107(b) ,  June 17, 2008 ,  122 Stat. 1631 , provided that:  “The amendment made by this section [amending this section] shall apply to individuals ordered or called to active duty on or after  December 31, 2007 .”\nPub. L. 109–280, title VIII, §\u202f827(c) ,  Aug. 17, 2006 ,  120 Stat. 1001 , provided that: \n “(1)   Effective date .— The amendment made by this section [amending this section and sections 401 and 403 of this title] shall apply to distributions after  September 11, 2001 . \n \n “(2)   Waiver of limitations .— If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [ Aug. 17, 2006 ] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.”\nPub. L. 109–280, title VIII, §\u202f828(b) ,  Aug. 17, 2006 ,  120 Stat. 1001 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title VIII, §\u202f844(g) ,  Aug. 17, 2006 ,  120 Stat. 1013 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting  section 6050U of this title  and amending this section and sections 848, 1035, 6724, and 7702B of this title] shall apply to contracts issued after  December 31, 1996 , but only with respect to taxable years beginning after  December 31, 2009 . \n \n “(2)   Tax-free exchanges .— The amendments made by subsection (b) [amending  section 1035 of this title ] shall apply with respect to exchanges occurring after  December 31, 2009 . \n \n “(3)   Information reporting .— The amendments made by subsection (d) [enacting  section 6050U of this title  and amending  section 6724 of this title ] shall apply to charges made after  December 31, 2009 . \n \n “(4)   Policy acquisition expenses .— The amendment made by subsection (e) [amending  section 848 of this title ] shall apply to specified policy acquisition expenses determined for taxable years beginning after  December 31, 2009 . \n \n “(5)   Technical amendment .— The amendment made by subsection (f) [amending  section 7702B of this title ] shall take effect as if included in section 321(a) of the Health Insurance Portability and Accountability Act of 1996 [ Pub. L. 104–191 ].”\nPub. L. 108–357, title VIII, §\u202f906(c) ,  Oct. 22, 2004 ,  118 Stat. 1654 , provided that:  “The amendments made by this section [amending this section and  section 83 of this title ] shall apply to distributions on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by section 207(6), (7) of  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 107–90  applicable to calendar years beginning after  Dec. 31, 2001 , see  section 204(f) of Pub. L. 107–90 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 107–22  effective  July 26, 2001 , see  section 1(c) of Pub. L. 107–22 , set out as a note under  section 26 of this title .\nPub. L. 107–16, title IV, §\u202f402(h) ,  June 7, 2001 ,  115 Stat. 63 , provided that:  “The amendments made by this section [amending this section and sections 135, 221, 529, 530, 4973, and 6693 of this title] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f632(a)(4) ,  June 7, 2001 ,  115 Stat. 115 , provided that:  “The amendments made by this subsection [amending this section and sections 402, 403, 404, 415, and 664 of this title] shall apply to years beginning after  December 31, 2001 .”\nAmendment by section 641(a)(2)(C), (e)(1) of  Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nPub. L. 105–206, title III, §\u202f3436(b) ,  July 22, 1998 ,  112 Stat. 761 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 1999 .”\nAmendment by section 6023(3), (4) of  Pub. L. 105–206  effective  July 22, 1998 , see  section 6023(32) of Pub. L. 105–206 , set out as a note under  section 34 of this title .\nAmendment by sections 6004(d)(3)(B) and 6005(c)(1) of  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title II, §\u202f203(c) ,  Aug. 5, 1997 ,  111 Stat. 809 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 1997 , with respect to expenses paid after such date (in taxable years ending after such date), for education furnished in academic periods beginning after such date.”\nPub. L. 105–34, title III, §\u202f303(c) ,  Aug. 5, 1997 ,  111 Stat. 831 , provided that:  “The amendments made by this section [amending this section] shall apply to payments and distributions in taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title X, §\u202f1075(c) ,  Aug. 5, 1997 ,  111 Stat. 949 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to annuity starting dates beginning after  December 31, 1997 .”\nPub. L. 104–191, title III, §\u202f361(d) ,  Aug. 21, 1996 ,  110 Stat. 2072 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1403(b) ,  Aug. 20, 1996 ,  110 Stat. 1791 , provided that:  “The amendment made by this section [amending this section] shall apply in cases where the annuity starting date is after the 90th day after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 104–188, title I, §\u202f1421(e) ,  Aug. 20, 1996 ,  110 Stat. 1800 , provided that:  “The amendments made by this section [amending this section, sections 219, 280G, 402, 404, 408, 414, 416, 457, 3121, 3306, 3401, 4972, and 6693 of this title, sections 1021 and 1104 of Title 29, Labor, and  section 409 of Title 42 , The Public Health and Welfare] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1463(b) ,  Aug. 20, 1996 ,  110 Stat. 1824 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1704 ( l )(2),  Aug. 20, 1996 ,  110 Stat. 1882 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 1122(c) of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by sections 1011A(b)(1)(A), (B), (2), (9), (c)(1)–(8), (h), (i), and 1018(k), (t)(1)(A), (B), and (u)(8) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 5012(a), (b)(1), (d) of  Pub. L. 100–647  applicable to contracts entered into on or after  June 21, 1988 , with special rule where death benefit increases by more than $150,000, certain other material changes taken into account, certain exchanges permitted, and special rule in the case of annuity contracts, see  section 5012(e) of Pub. L. 100–647 , set out as an Effective Date note under  section 7702A of this title .\nPub. L. 99–514, title XI, §\u202f1101(c) ,  Oct. 22, 1986 ,  100 Stat. 2414 , provided that:  “The amendments made by this section [amending this section and  section 219 of this title ] shall apply to contributions for taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1122(c)(1) of Pub. L. 99–514  applicable to individuals whose annuity starting date is after  July 1, 1986 , amendment by  section 1122(c)(2) of Pub. L. 99–514  applicable to individuals whose annuity starting date is after  Dec. 31, 1986 , and amendment by  section 1122(c)(3) of Pub. L. 99–514  applicable to amounts received after  July 1, 1986 , in the case of any plan not described in  section 72(e)(8)(D) of this title , see  section 1122(h)(2) of Pub. L. 99–514 , set out as a note under  section 402 of this title .\nPub. L. 99–514, title XI, §\u202f1123(e) ,  Oct. 22, 1986 ,  100 Stat. 2475 , as amended by  Pub. L. 100–647, title I, §\u202f1011A(c)(11) , (12),  Nov. 10, 1988 ,  102 Stat. 3476 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 403 and 408 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Subsection  (c).— The amendments made by subsection (c) [amending  section 403 of this title ] shall apply to years beginning after  December 31, 1988 , but only with respect to distributions from contracts described in section 403(b) of the Internal Revenue Code of 1986 which are attributable to assets other than assets held as of the close of the last year beginning before  January 1, 1989 . \n \n “(3)   Exception where distribution commences .— The amendments made by this section shall not apply to distributions to any employee from a plan maintained by any employer if— “(A)  as of  March 1, 1986 , the employee separated from service with the employer, \n \n “(B)  as of  March 1, 1986 , the accrued benefit of the employee was in pay status pursuant to a written election providing a specific schedule for the distribution of the entire accrued benefit of the employee, and \n \n “(C)  such distribution is made pursuant to such written election. \n \n \n “(4)   Transition rule .— The amendments made by this section shall not apply with respect to any benefits with respect to which a designation is in effect under section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 242(b)(2) of Pub. L. 97–248 , formerly set out as an Effective Date of 1982 Amendment note under  section 401 of this title ]. \n \n “(5)   Special rule for distributions under an annuity contract .— The amendments made by paragraphs (1), (2), and (3) of subsection (b) [amending this section] shall not apply to any distribution under an annuity contract if— “(A)  as of  March 1, 1986 , payments were being made under such contract pursuant to a written election providing a specific schedule for the distribution of the taxpayer’s interest in such contract, and \n \n “(B)  such distribution is made pursuant to such written election.”\nPub. L. 99–514, title XI, §\u202f1134(e) ,  Oct. 22, 1986 ,  100 Stat. 2484 , provided that:  “The amendments made by this section [amending this section] shall apply to loans made, renewed, renegotiated, modified, or extended after  December 31, 1986 .”\nPub. L. 99–514, title XI, §\u202f1135(b) ,  Oct. 22, 1986 ,  100 Stat. 2485 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to contributions to annuity contracts after  February 28, 1986 .”\nAmendment by sections 1826(a), (d), 1852(a)(2), (c)(1)–(4), and 1854(b)(1) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1826(b)(4) ,  Oct. 22, 1986 ,  100 Stat. 2850 , provided that:  “The amendments made by this subsection [amending this section] shall apply to contracts issued after the date which is 6 months after the date of the enactment of this Act [ Oct. 22, 1986 ] in taxable years ending after such date.”\nPub. L. 99–514, title XVIII, §\u202f1826(c) ,  Oct. 22, 1986 ,  100 Stat. 2850 , as amended by  Pub. L. 100–647, title I, §\u202f1018(t)(1)(D) ,  Nov. 10, 1988 ,  102 Stat. 3587 , provided that the amendment made by  section 1826(c) of Pub. L. 99–514  is effective with respect to distributions commencing after the date 6 months after  Oct. 22, 1986 .\nPub. L. 99–514, title XVIII, §\u202f1854(b)(6) ,  Oct. 22, 1986 ,  100 Stat. 2878 , provided that:  “The amendments made by paragraphs (1) and (2) [amending this section and  section 404 of this title ] shall not apply to dividends paid before  January 1, 1986 , if the taxpayer treated such dividends in a manner inconsistent with such amendments on a return filed with the Secretary before the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XVIII, §\u202f1898(c)(1)(C) ,  Oct. 22, 1986 ,  100 Stat. 2951 , provided that:  “The amendments made by this paragraph [amending this section and  section 402 of this title ] shall apply to payments made after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by  Pub. L. 98–397  effective  Jan. 1, 1985 , except as otherwise provided, see  section 303(d) of Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 , Labor.\nAmendment by  section 211(b)(1) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nPub. L. 98–369, div. A, title II, §\u202f222(c) ,  July 18, 1984 ,  98 Stat. 774 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to contracts issued after the day which is 6 months after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Transitional rules for contracts issued before effective date .— In the case of any contract (other than a single premium contract) which is issued on or before the day which is 6 months after the date of the enactment of this Act, for purposes of section 72(q)(1)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this Act), any investment in such contract which is made during any calendar year shall be treated as having been made on January 1 of such calendar year.”\nAmendment by  section 421(b)(1) of Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have repeal apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nAmendment by section 491(d)(3), (4) of  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  section 521(d) of Pub. L. 98–369  applicable to years beginning after  Dec. 31, 1984 , see  section 521(e) of Pub. L. 98–369 , set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title V, §\u202f523(c) ,  July 18, 1984 ,  98 Stat. 872 , provided that:  “The amendments made by this section [amending this section] shall apply to any amount received or loan made after the 90th day after the date of enactment of this Act [ July 18, 1984 ].”\nAmendment by section 713(b)(1), (4), (c)(1)(A), (B) of  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f713(d)(1) ,  July 18, 1984 ,  98 Stat. 957 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1875(c)(5) ,  Oct. 22, 1986 ,  100 Stat. 2895 , provided that the amendment made by  section 713(d)(1) of Pub. L. 98–369  is effective with respect to contributions made in taxable years beginning after  Dec. 31, 1983 .\nPub. L. 98–76, title II, §\u202f227(b) ,  Aug. 12, 1983 ,  97 Stat. 426 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by section 224 [enacting  section 6050G of this title , amending this section and  section 86 of this title , and enacting provisions set out as a note under  section 231n of Title 45 , Railroads] shall apply to benefits received after  December 31, 1983 , in taxable years ending after such date. \n \n “(2)   Treatment of certain lump-sum payments received after  december 31, 1983 .— The amendments made by section 224 shall not apply to any portion of a lump-sum payment received after  December 31, 1983 , if the generally applicable payment date for such portion was before  January 1, 1984 . \n \n “(3)   No fresh start .— For purposes of determining whether any benefit received after  December 31, 1983 , is includible in gross income by reason of section 72(r) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by this Act, the amendments made by section 224 be treated as having been in effect during all periods before 1984.”\nPub. L. 97–448, title I, §\u202f103(c)(3)(B)(ii) ,  Jan. 12, 1983 ,  96 Stat. 2376 , provided that:  “The amendment made by clause (i) [amending this section] shall take effect as if the matter struck out had never been included in such paragraph.”\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title II, §\u202f236(c) ,  Sept. 3, 1982 ,  96 Stat. 510 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(11) ,  Jan. 12, 1983 ,  96 Stat. 2404 ;  Pub. L. 98–369, div. A, title V, §\u202f554 , title VII, §\u202f713(b)(2),  July 18, 1984 ,  98 Stat. 897 , 957;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to loans, assignments, and pledges made after  August 13, 1982 . For purposes of the preceding sentence, the outstanding balance of any loan which is renegotiated, extended, renewed, or revised after such date shall be treated as an amount received as a loan on the date of such renegotiation, extension, renewal, or revision. \n \n “(2)   Exception for certain loans used to repay outstanding obligations.— “(A)   In general .— Any qualified refunding loan shall not be treated as a distribution by reason of the amendments made by this section to the extent such loan is repaid before  August 14, 1983 . \n \n “(B)   Qualified refunding loan .— For purposes of subparagraph (A), the term ‘qualified refunding loan’ means any loan made after  August 13, 1982 , and before  August 14, 1983 , to the extent such loan is used to make a required principal payment. \n \n “(C)   Required principal payment .— For purposes of subparagraph (B), the term ‘required principal payment’ means any principal repayment on a loan made under the plan which was outstanding on  August 13, 1982 , if such repayment is required to be made after  August 13, 1982 , and before  August 14, 1983  or if such loan was payable on demand. \n \n “(D)   Special rule for non-key employees .— In the case of a non-key employee (within the meaning of section 416(i)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), this paragraph shall be applied by substituting ‘ January 1, 1985 ’ for ‘ August 14, 1983 ’ each place it appears. \n \n \n “(3)   Treatment of certain renegotiations .— If— “(A)  the taxpayer after  August 13, 1982 , and before  September 4, 1982 , borrows money from a government plan (as defined in section 219(e)(4) of the Internal Revenue Code of 1986), \n \n “(B)  under the applicable State law, such loan requires the renegotiation of all outstanding prior loans made to the taxpayer under such plan, and \n \n “(C)  the renegotiation described in subparagraph (B) does not change the interest rate on, or extend the duration of, any such outstanding prior loan, \n \n\n then the renegotiation described in subparagraph (B) shall not be treated as a renegotiation, extension, renewal, or revision for purposes of paragraph (1). If the renegotiation described in subparagraph (B) does not meet the requirements of subparagraph (C) solely because it extends the duration of any such outstanding prior loan, the requirements of subparagraph (C) shall be treated as met with respect to such renegotiation if, before  April 1, 1983 , such extension is eliminated.”\nPub. L. 97–248, title II, §\u202f265(c) ,  Sept. 3, 1982 ,  96 Stat. 547 , provided that: \n “(1)   Subsection  (a).— The amendments made by subsection (a) [amending this section] shall take effect on  August 13, 1982 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section and sections 46, 50A, 53, 901, 1302, and 1304 of this title] shall apply to distributions after  December 31, 1982 .”\nAmendment by  section 237(d) of Pub. L. 97–248  applicable to years beginning after  Dec. 31, 1983 , see  section 241 of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title .\nPub. L. 97–34, title III, §\u202f312(f) ,  Aug. 13, 1981 ,  95 Stat. 285 , as amended by  Pub. L. 97–448, title I, §\u202f103(d)(3) ,  96 Stat. 2378 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 219, 401, 404, 408, 1379, and 4972 of this title] shall apply to taxable years beginning after  December 31, 1981 . \n \n “(2)   Transitional rule.— The amendments made by subsection (d) [amending this section] shall not apply to any loan from a plan to a self-employed individual who is an employee within the meaning of section 401(c)(1) which is outstanding on  December 31, 1981 . For purposes of the preceding sentence, any loan which is renegotiated, extended, renewed, or revised after such date shall be treated as a new loan.”\nAmendment by section 1901(a)(12), (13) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XIX, §\u202f1951(d) ,  Oct. 4, 1976 ,  90 Stat. 1841 , provided that:  “Except as otherwise expressly provided, the amendments made by this section [see Tables for classification of  section 1951 of Pub. L. 94–455 ] shall apply with respect to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 2001(e)(5) of Pub. L. 93–406  applicable to contributions made in taxable years beginning after  Dec. 31, 1975 , see  section 2001(i)(4) of Pub. L. 93–406 , set out as a note under  section 401 of this title .\nPub. L. 93–406, title II, §\u202f2001(i)(5) , (6),  Sept. 2, 1974 ,  88 Stat. 958 , provided that: \n “(5)  The amendments made by subsection (g) [amending this section and sections 46, 50A, 56, 404, and 901 of this title] apply to distributions made in taxable years beginning after  December 31, 1975 . \n \n “(6)  The amendments made by subsection (h) [amending this section and  section 401 of this title ] apply to taxable years ending after the date of enactment of this Act [ Sept. 2, 1974 ].”\nAmendment by  section 2002(g)(10) of Pub. L. 93–406  effective on  Jan. 1, 1975 , see  section 2002(i)(2) of Pub. L. 93–406 , set out as an Effective Date note under  section 4973 of this title .\nAmendment by  section 2005(c)(3) of Pub. L. 93–406 , applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  section 2007(b)(2) of Pub. L. 93–406  applicable to taxable years ending on or after  Sept. 21, 1972 , see  section 2007(c) of Pub. L. 93–406 , set out as a note under  section 122 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 515(d) of Pub. L. 91–172 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 89–365  applicable with respect to taxable years ending after  Dec. 31, 1965 , see  section 1(d) of Pub. L. 89–365 , set out as an Effective Date note under  section 122 of this title .\nAmendment by  Pub. L. 89–97  applicable to taxable years beginning after  Dec. 31, 1966 , see  section 106(e) of Pub. L. 89–97 , set out as a note under  section 213 of this title .\nAmendment by  Pub. L. 89–44  applicable to taxable years beginning on or after  July 1, 1965 , see  section 809(f) of Pub. L. 89–44 , set out as a note under  section 6420 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 232(g) of Pub. L. 88–272 , set out as a note under  section 5 of this title .\nPub. L. 87–834, §\u202f11(c)(2) ,  Oct. 16, 1962 ,  76 Stat. 1006 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to taxable years ending after  December 31, 1962 .”\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 94–455, title XIX, §\u202f1951(b)(1)(B) ,  Oct. 4, 1976 ,  90 Stat. 1836 , provided that:  “Notwithstanding subparagraph (A) [repealing subsec. (i) of this section], if the provisions of section 72(i) applied to amounts received in taxable years beginning before  January 1, 1977 , under an annuity contract, then amounts received under such contract on or after such date shall be treated as if such provisions were not repealed.”\nPub. L. 116–136, div. A, title II, §\u202f2202 ,  Mar. 27, 2020 ,  134 Stat. 340 , as amended by  Pub. L. 116–260, div. N, title II, §\u202f280(a) ,  Dec. 27, 2020 ,  134 Stat. 1982 ;  Pub. L. 117–328, div. T, title V, §\u202f501(c)(2)(A) ,  Dec. 29, 2022 ,  136 Stat. 5389 , provided that: \n “(a)   Tax-favored Withdrawals From Retirement Plans.— “(1)   In general .— Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any coronavirus-related distribution. \n \n “(2)   Aggregate dollar limitation.— “(A)   In general .— For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as coronavirus-related distributions for any taxable year shall not exceed $100,000. \n \n “(B)   Treatment of plan distributions .— If a distribution to an individual would (without regard to subparagraph (A)) be a coronavirus-related distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a coronavirus-related distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000. \n \n “(C)   Controlled group .— For purposes of subparagraph (B), the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 of the Internal Revenue Code of 1986. \n \n \n “(3)   Amount distributed may be repaid.— “(A)   In general .— Any individual who receives a coronavirus-related distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of the Internal Revenue Code of 1986, as the case may be. \n \n “(B)   Treatment of repayments of distributions from eligible retirement plans other than iras .— For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a coronavirus-related distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the coronavirus-related distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. \n \n “(C)   Treatment of repayments of distributions from iras .— For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a coronavirus-related distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, the coronavirus-related distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. \n \n \n “(4)   Definitions .— For purposes of this subsection— “(A)   Coronavirus-related distribution .— Except as provided in paragraph (2), the term ‘coronavirus-related distribution’ means any distribution from an eligible retirement plan made— “(i)  on or after  January 1, 2020 , and before  December 31, 2020 , \n \n “(ii)  to an individual— \u2001\u2001\u2001\u2001\u2001“(I)  who is diagnosed with the virus SARS–CoV–2 or with coronavirus disease 2019 (COVID–19) by a test approved by the Centers for Disease Control and Prevention, \n \n \u2001\u2001\u2001\u2001\u2001“(II)  whose spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test, or \n \n \u2001\u2001\u2001\u2001\u2001“(III)  who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate). \n \n \n \n “(B)   Employee certification .— The administrator of an eligible retirement plan may rely on an employee’s certification that the employee satisfies the conditions of subparagraph (A)(ii) in determining whether any distribution is a coronavirus-related distribution. \n \n “(C)   Eligible retirement plan .— The term ‘eligible retirement plan’ has the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986. \n \n \n “(5)   Income inclusion spread over 3-year period.— “(A)   In general .— In the case of any coronavirus-related distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year. \n \n “(B)   Special rule .— For purposes of subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply. \n \n \n “(6)   Special rules.— “(A)   Exemption of distributions from trustee to trustee transfer and withholding rules .— For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, coronavirus-related distributions shall not be treated as eligible rollover distributions. \n \n “(B)   Coronavirus-related distributions treated as meeting plan distribution requirements .— For purposes of the Internal Revenue Code of 1986, a coronavirus-related distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such Code and  section 8433(h)(1) of title 5 , United States Code, and, in the case of a money purchase pension plan, a coronavirus-related distribution which is an in-service withdrawal shall be treated as meeting the distribution rules of section 401(a) of the Internal Revenue Code of 1986. \n \n \n \n “(b)   Loans From Qualified Plans.— “(1)   Increase in limit on loans not treated as distributions .— In the case of any loan from a qualified employer plan (as defined under section 72(p)(4) of the Internal Revenue Code of 1986) to a qualified individual made during the 180-day period beginning on the date of the enactment of this Act [ Mar. 27, 2020 ]— “(A)  clause (i) of section 72(p)(2)(A) of such Code shall be applied by substituting ‘$100,000’ for ‘$50,000’, and \n \n “(B)  clause (ii) of such section shall be applied by substituting ‘the present value of the nonforfeitable accrued benefit of the employee under the plan’ for ‘one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan’. \n \n \n “(2)   Delay of repayment .— In the case of a qualified individual with an outstanding loan (on or after the date of the enactment of this Act) from a qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue Code of 1986)— “(A)  if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the date of the enactment of this Act and ending on  December 31, 2020 , such due date shall be delayed for 1 year, \n \n “(B)  any subsequent repayments with respect to any such loan shall be appropriately adjusted to reflect the delay in the due date under subparagraph (A) and any interest accruing during such delay, and \n \n “(C)  in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of section 72(p)(2) of such Code, the period described in subparagraph (A) of this paragraph shall be disregarded. \n \n \n “(3)   Qualified individual .— For purposes of this subsection, the term ‘qualified individual’ means any individual who is described in subsection (a)(4)(A)(ii). \n \n \n “(c)   Provisions Relating to Plan Amendments.— “(1)   In general .— If this subsection applies to any amendment to any plan or annuity contract— “(A)  such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i), and \n \n “(B)  except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such plan or contract shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(2)   Amendments to which subsection applies.— “(A)   In general .— This subsection shall apply to any amendment to any plan or annuity contract which is made— “(i)  pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or the delegate of either such Secretary) under any provision of this section, and \n \n “(ii)  on or before the last day of the first plan year beginning on or after  January 1, 2025 , or such later date as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe. \n \n\n \u2001\u2001In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii). \n \n “(B)   Conditions .— This subsection shall not apply to any amendment unless— “(i)  during the period— \u2001\u2001\u2001\u2001\u2001“(I)  beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), \n \n \n\n \u2001the plan or contract is operated as if such plan or contract amendment were in effect, and \n “(ii)  such plan or contract amendment applies retroactively for such period.”\n[ Pub. L. 116–260, div. N, title II, §\u202f280(b) ,  Dec. 27, 2020 ,  134 Stat. 1982 , provided that:  “The amendment made by this section [amending  section 2202 of Pub. L. 116–136 , set out above] shall apply as if included in the enactment of section 2202 of the CARES Act [ Pub. L. 116–136 , approved  Mar. 27, 2020 ].” \n]\nPub. L. 100–647, title I, §\u202f1011A(c)(13) ,  Nov. 10, 1988 ,  102 Stat. 3476 , provided that:  “Section 72(t) of the 1986 Code shall apply to any distribution without regard to whether such distribution is made without the consent of the participant pursuant to section 411(a)(11) or section 417(e) of the 1986 Code.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 110–458, title I, §\u202f100 ,  Dec. 23, 2008 ,  122 Stat. 5093 , provided that:  \n “For purposes of this title [see Tables for classification]: \n “(1)   Amendment of 1986 code .— The term ‘1986 Code’ means the Internal Revenue Code of 1986. \n \n “(2)   Amendment of erisa .— The term ‘ERISA’ means the Employee Retirement Income Security Act of 1974 [ Pub. L. 93–406 ; see Short Title note under  section 1001 of Title 29 , Labor]. \n \n “(3)  2006  act .— The term ‘2006 Act’ means the Pension Protection Act of 2006 [ Pub. L. 109–280 ; see Short Title of 2006 Amendment note under  section 1001 of Title 29 , Labor].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Amounts received in respect of the services of a child shall be included in his gross income and not in the gross income of the parent, even though such amounts are not received by the child.\nAll expenditures by the parent or the child attributable to amounts which are includible in the gross income of the child (and not of the parent) solely by reason of subsection (a) shall be treated as paid or incurred by the child.\nFor purposes of this section, the term “parent” includes an individual who is entitled to the services of a child by reason of having parental rights and duties in respect of the child.\nFor assessment of tax against parent in certain cases, see section 6201(c).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Except as otherwise provided in this section or in section 117 (relating to qualified scholarships), gross income includes amounts received as prizes and awards.\nGross income shall not include the value of an employee achievement award (as defined in section 274(j)) received by the taxpayer if the cost to the employer of the employee achievement award does not exceed the amount allowable as a deduction to the employer for the cost of the employee achievement award.\nIn the case of an employer exempt from taxation under this subtitle, any reference in this subsection to the amount allowable as a deduction to the employer shall be treated as a reference to the amount which would be allowable as a deduction to the employer if the employer were not exempt from taxation under this subtitle.\nFor provisions excluding certain de minimis fringes from gross income, see section 132(e).\nGross income shall not include the value of any medal awarded in, or any prize money received from the United States Olympic Committee on account of, competition in the Olympic Games or Paralympic Games.\nParagraph (1) shall not apply to any taxpayer for any taxable year if the adjusted gross income (determined without regard to this subsection) of such taxpayer for such taxable year exceeds $1,000,000 (half of such amount in the case of a married individual filing a separate return).\nFor purposes of sections 85(c), 86, 135, 137, 219, 221, and 469, adjusted gross income shall be determined after the application of paragraph (1) and before the application of subparagraph (A).\n2021—Subsec. (d)(2)(B).  Pub. L. 117–2  inserted “85(c),” before “86”.\n2020—Subsec. (d)(2)(B).  Pub. L. 116–260  struck out “222,” after “221,”.\n2017—Subsec. (d)(2)(B).  Pub. L. 115–97  struck out “199,” after “137,”.\n2016—Subsec. (d).  Pub. L. 114–239  added subsec. (d).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f123(b)(1) , which directed that subsec. (a) be amended by substituting “(relating to qualified scholarships)” for “(relating to scholarship and fellowship grants)”, was executed by making the substitution for “(relating to scholarships and fellowship grants)” to reflect the probable intent of Congress.\nPub. L. 99–514, §\u202f122(a)(1)(A) , substituted “Except as otherwise provided in this section or” for “Except as provided in subsection (b) and”.\nSubsec. (b).  Pub. L. 99–514, §\u202f122(a)(1)(B) , (C), inserted “for certain prizes and awards transferred to charities” in heading and added par. (3).\nSubsec. (c).  Pub. L. 99–514, §\u202f122(a)(1)(D) , added subsec. (c).\nReferences to the United States Olympic Committee deemed to refer to the United States Olympic and Paralympic Committee, see  section 220502(c) of Title 36 , Patriotic and National Observances, Ceremonies, and Organizations.\nPub. L. 117–2, title IX, §\u202f9042(c) ,  Mar. 11, 2021 ,  135 Stat. 122 , provided that:  “The amendments made by this section [amending this section and sections 85, 86, 135, 137, 219, 221, 222, and 469 of this title] shall apply to taxable years beginning after  December 31, 2019 .”\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nPub. L. 115–97, title I, §\u202f13305(c) ,  Dec. 22, 2017 ,  131 Stat. 2126 , as amended by  Pub. L. 115–141, div. T, §\u202f101(c) ,  Mar. 23, 2018 ,  132 Stat. 1156 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 86, 135, 137, 170, 172, 219, 221, 222, 246, 469, 613, and 613A of this title and repealing  section 199 of this title ] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Transition rule for qualified payments of patrons of cooperatives.— “(A)   In general .— The amendments made by this section shall not apply to a qualified payment received by a taxpayer from a specified agricultural or horticultural cooperative in a taxable year of the taxpayer beginning after  December 31, 2017 , which is attributable to qualified production activities income with respect to which a deduction is allowable to the cooperative under section 199 of the Internal Revenue Code of 1986 (as in effect before the amendments made by this section) for a taxable year of the cooperative beginning before  January 1, 2018 . Any term used in this subparagraph which is also used in section 199 of such Code (as so in effect) shall have the same meaning as when used in such section. \n \n “(B)   Coordination with section 199a .— No deduction shall be allowed under section 199A of such Code for any qualified payment to which subparagraph (A) applies.”\n[Amendment by  Pub. L. 115–141  to  section 13305(c) of Pub. L. 115–97 , set out above, effective as if included in  section 13305 of Pub. L. 115–97 , see  section 101(d) of Pub. L. 115–141 , set out as a note under  section 62 of this title .]\nPub. L. 114–239, §\u202f2(b) ,  Oct. 7, 2016 ,  130 Stat. 973 , provided that:  “The amendment made by this section [amending this section] shall apply to prizes and awards received after  December 31, 2015 .”\nAmendment by  section 122(a)(1) of Pub. L. 99–514  applicable to prizes and awards granted after  Dec. 31, 1986 , see  section 151(c) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 123(b)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in the case of scholarships and fellowships granted after  Aug. 16, 1986 , see  section 151(d) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nFor nonapplication of amendment by  section 123(b)(1) of Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , see  section 1012(aa)(3) of Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': '1958—Subsec. (a).  Pub. L. 85–866, §\u202f2(a)(2) , (3), struck out “short-term” each place it appeared, and inserted sentence to provide that no reduction to cost of securities sold during taxable year shall be made in respect of subsec. (b)(1)(A)(ii) obligations held at close of year, and to permit reduction in cost of securities sold in taxable year sold if obligation is municipal bond.\nSubsec. (b)(1).  Pub. L. 85–866, §\u202f2(a)(1) , substituted “municipal bond” for “short-term municipal bond”, designated former subpars. (A) and (B) as (A)(i) and (ii), respectively, and added subpar. (B).\nPub. L. 85–866, §\u202f2(c) ,  Sept. 2, 1958 ,  72 Stat. 1607 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 1016 of this title ] shall apply with respect to taxable years ending after  December 31, 1957 , but only with respect to obligations acquired after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 25 , related to inclusion in gross of all income derived from mortgages made, or obligations issued, by a joint-stock land bank.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Amounts received as loans from the Commodity Credit Corporation shall, at the election of the taxpayer, be considered as income and shall be included in gross income for the taxable year in which received.\nIf a taxpayer exercises the election provided for in subsection (a) for any taxable year, then the method of computing income so adopted shall be adhered to with respect to all subsequent taxable years unless with the approval of the Secretary a change to a different method is authorized.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under subsections (a), (b), and (d) of section 960 (determined without regard to the phrase “80 percent of” in subsection (d)(1) thereof) for such taxable year shall be treated for purposes of this title (other than sections 245 and 245A) as a dividend received by such domestic corporation from the foreign corporation.\n2017— Pub. L. 115–97  amended section generally. Prior to amendment, text read as follows: “If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under section 902(a) (relating to credit for corporate stockholder in foreign corporation) or under section 960(a)(1) (relating to taxes paid by foreign corporation) for such taxable year shall be treated for purposes of this title (other than section 245) as a dividend received by such domestic corporation from the foreign corporation.”\n1976— Pub. L. 94–455  substituted “section 902(a)” for “section 902(a)(1)” and “section 960(a)(1)” for “section 960(a)(1)(C)”.\nPub. L. 115–97, title I, §\u202f14301(d) ,  Dec. 22, 2017 ,  131 Stat. 2225 , provided that:  “The amendments made by this section [amending this section and sections 245, 535, 545, 814, 865, 901, 904 to 909, 958 to 960, 1291, 1293, and 6038 of this title and repealing  section 902 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.”\nAmendment by  Pub. L. 94–455  applicable on different dates depending on the date the distributions were received, see  section 1033(c) of Pub. L. 94–455 , set out as a note under  section 960 of this title .\nPub. L. 87–834, §\u202f9(e) ,  Oct. 16, 1962 ,  76 Stat. 1001 , provided that:  \n “The amendments made by this section [enacting this section and amending sections 535, 545, 861, 901, and 902 of this title] shall apply— “(1)  in respect of any distribution received by a domestic corporation after  December 31, 1964 , and \n \n “(2)  in respect of any distribution received by a domestic corporation before  January 1, 1965 , in a taxable year of such corporation beginning after  December 31, 1962 , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after  December 31, 1962 . \n \n\n For purposes of paragraph (2), a distribution made by a foreign corporation out of its profits which are attributable to a distribution received from a foreign subsidiary to which [former] section 902(b) applies shall be treated as made out of the accumulated profits of a foreign corporation for a taxable year beginning before  January 1, 1963 , to the extent that such distribution was paid out of the accumulated profits of such foreign subsidiary for a taxable year beginning before  January 1, 1963 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'For purposes of this section and section 6052, the cost of group-term insurance on the life of an employee provided during any period shall be determined on the basis of uniform premiums (computed on the basis of 5-year age brackets) prescribed by regulations by the Secretary.\nA plan does not meet the requirements of paragraph (2)(B) unless all benefits available to participants who are key employees are available to all other participants.\nA plan shall not fail to meet the requirements of paragraph (2)(B) merely because the amount of life insurance on behalf of the employees under the plan bears a uniform relationship to the total compensation or the basic or regular rate of compensation of such employees.\nFor purposes of this subsection, the term “key employee” has the meaning given to such term by paragraph (1) of section 416(i). Such term also includes any former employee if such employee when he retired or separated from service was a key employee.\nThis subsection shall not apply to a church plan maintained for church employees.\nTo the extent provided in regulations, this subsection shall be applied separately with respect to former employees.\nFor purposes of this section, the term “employee” includes a former employee.\nSubsection (b)(3) and section 72(m)(3) shall not apply in the case of any cost paid (whether directly or indirectly) with assets held in an applicable life insurance account (as defined in section 420(e)(4)) under a defined benefit plan.\n2012—Subsec. (f).  Pub. L. 112–141  added subsec. (f).\n1990—Subsec. (d)(6).  Pub. L. 101–508  substituted “any former employee” for “any retired employee”.\n1989—Subsec. (d).  Pub. L. 101–140, §\u202f203(a)(1) , amended subsec. (d) to read as if amendments by  Pub. L. 99–514, §\u202f1151(c)(1) , had not been enacted, see 1986 Amendment note below.\nSubsec. (d)(7).  Pub. L. 101–140, §\u202f203(b)(1)(A) , amended par. (7) generally. Prior to amendment, par. (7) read as follows: “All employees who are treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this section.”\n1988—Subsec. (c).  Pub. L. 100–647  struck out at end “In the case of an employee who has attained age 64, the cost prescribed shall not exceed the cost with respect to such individual if he were age 63.”\n1986—Subsec. (d).  Pub. L. 99–514, §\u202f1151(c)(1) , amended subsec. (d) generally, substituting “In the case of a group-term life insurance plan which is a discriminatory employee benefit plan, subsection (a)(1) shall apply only to the extent provided in section 89.” for provisions formerly designated as pars. (1)(A) and (B) that in the case of a discriminatory group-term life insurance plan subsec. (a)(1) shall not apply with respect to any key employee and the cost of group-term life insurance on the life of any key employee shall be determined without regard to subsec. (c), and striking out pars. (2) to (7) relating to classifications and eligibility classifications of nondiscriminatory plans.\nSubsec. (d)(1)(B).  Pub. L. 99–514, §\u202f1827(a)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the cost of group-term life insurance on the life of any key employee shall be determined without regard to subsection (c).”\nSubsec. (d)(6).  Pub. L. 99–514, §\u202f1827(c) , struck out “,\u2000except that subparagraph (A)(iv) of such paragraph shall be applied by not taking into account employees described in paragraph (3)(B) who are not participants in the plan” from first sentence and inserted provision that such term also includes any retired employee if such employee when he retired or separated from service was a key employee.\nSubsec. (d)(8).  Pub. L. 99–514, §\u202f1827(d) , added par. (8).\n1984—Subsec. (b)(1).  Pub. L. 98–369, §\u202f223(a)(2) , struck out “either has reached the retirement age with respect to such employer or” before “is disabled”.\nSubsec. (d)(1).  Pub. L. 98–369, §\u202f223(b) , designated existing provisions as subpar. (A) and added subpar. (B).\nSubsec. (e).  Pub. L. 98–369, §\u202f223(a)(1) , added subsec. (e).\n1982—Subsec. (d).  Pub. L. 97–248  added subsec. (d).\n1976—Subsec. (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1965—Subsec. (b)(1).  Pub. L. 89–97  substituted “section 72(m)(7)” for “paragraph (3) of section 213(g), determined without regard to paragraph (4) thereof”.\nAmendment by  Pub. L. 112–141  applicable to transfers made after  July 6, 2012 , see  section 40242(h) of Pub. L. 112–141 , set out as a note under  section 420 of this title .\nPub. L. 101–508, title XI, §\u202f11703(e)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–517 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to employees separating from service after the date of the enactment of this Act [ Nov. 5, 1990 ].”\nPub. L. 101–140, title II, §\u202f203(c) ,  Nov. 8, 1989 ,  103 Stat. 832 , provided that:  “The amendments made by this section [amending this section and sections 105, 117, 120, 125, 127, 129, 132, 162, 401, 414, 505, 3121, 3231, 3306, 3401, 4976, and 6652 of this title,  section 409 of title 42 , The Public Health and Welfare, and provisions set out as notes under sections 89 and 3121 of this title] shall take effect as if included in section 1151 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , see section 1151(k) set out below].”\nPub. L. 100–647, title V, §\u202f5013(b) ,  Nov. 10, 1988 ,  102 Stat. 3666 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”\nPub. L. 99–514, title XI, §\u202f1151(k) ,  Oct. 22, 1986 ,  100 Stat. 2508 , as amended by  Pub. L. 100–647, title I, §\u202f1011B(a)(25) , (26),  Nov. 10, 1988 ,  102 Stat. 3486 , provided that: \n “(1)   In general .— The amendments made by this section [enacting  section 89 of this title  and amending this section and sections 105, 106, 117, 120, 125, 127, 129, 132, 414, 505, 6039D, and 6652 of this title] shall apply to years beginning after the later of— “(A)   December 31, 1987 , or \n \n “(B)  the earlier of— “(i)  the date which is 3 months after the date on which the Secretary of the Treasury or his delegate issues such regulations as are necessary to carry out the provisions of section 89 of the Internal Revenue Code of 1986 (as added by this section), or \n \n “(ii)   December 31, 1988 . \n \n \n\n Notwithstanding the preceding sentence, the amendments made by subsections (e)(1) and (i)(3)(C) [amending  section 414 of this title ] shall, to the extent they relate to sections 106, 162(i)(2), and 162(k) of the Internal Revenue Code of 1986, apply to years beginning after 1986. \n \n “(2)   Special rule for collective bargaining plan .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section [enacting  section 89 of this title  and amending this section and sections 105, 106, 117, 120, 125, 127, 129, 132, 414, 505, 6039D, and 6652 of this title] shall not apply to employees covered by such an agreement in years beginning before the earlier of— “(A)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n “(B)   January 1, 1991 . \n \n\n A plan shall not be required to take into account employees to which the preceding sentence applies for purposes of applying section 89 of the Internal Revenue Code of 1986 (as added by this section) to employees to which the preceding sentence does not apply for any year preceding the year described in the preceding sentence. \n \n “(3)   Exception for certain group-term insurance plans .— In the case of a plan described in section 223(d)(2) of the Tax Reform Act of 1984 [ section 232(d)(2) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note below], such plan shall be treated as meeting the requirements of section 89 of the Internal Revenue Code of 1986 (as added by this section) with respect to individuals described in section 223(d)(2) of such Act. An employer may elect to disregard such individuals in applying section 89 of such Code (as so added) to other employees of the employer. \n \n “(4)   Special rule for church plans .— In the case of a church plan (within the meaning of section 414(e)(3) of the Internal Revenue Code of 1986) maintaining an insured accident and health plan, the amendments made by this section [enacting  section 89 of this title  and amending this section and sections 105, 106, 117, 120, 125, 127, 129, 132, 414, 505, 6039D, and 6652 of this title] shall apply to years beginning after  December 31, 1988 . \n \n “(5)   Cafeteria plans .— The amendments made by subsection (d)(2) [amending sections 3121 and 3306 of this title and  section 409 of Title 42 , The Public Health and Welfare] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(6)   Certain plans maintained by educational institutions .— If an educational organization described in section 170(b)(1)(A)(ii) of the Internal Revenue Code of 1986 makes an election under this paragraph with respect to a plan described in section 125(c)(2)(C) of such Code, the amendments made by this section shall apply with respect to such plan for plan years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XVIII, §\u202f1827(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2850 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by section 1827(c), (d) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title II, §\u202f223(d) ,  July 18, 1984 ,  98 Stat. 775 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1827(b),  Oct. 22, 1986 ,  100 Stat. 2095 , 2850, provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 83 of this title ] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Inclusion of former employees in the case of existing group-term insurance plans.— “(A)   In general .— The amendments made by subsection (a) [amending this section] shall not apply— “(i)  to any group-term life insurance plan of the employer in existence on  January 1, 1984 , or \n \n “(ii)  to any group-term life insurance plan of the employer (or a successor employer) which is a comparable successor to a plan described in clause (i), \n \n\n but only with respect to an individual who attained age 55 on or before  January 1, 1984 , and was employed by such employer (or a predecessor employer) at any time during 1983. Such amendments also shall not apply to any employee who retired from employment on or before  January 1, 1984 , and who, when he retired, was covered by the plan (or a predecessor plan). \n \n “(B)   Special rule in the case of discriminatory group-term life insurance plan .— In the case of any plan which, after  December 31, 1986 , is a discriminatory group-term life insurance plan (as defined in section 79(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), subparagraph (A) shall not apply in the case of any individual retiring under such plan after  December 31, 1986 . \n \n “(C)   Benefits to certain retired individuals not taken into account for purposes of determining whether plan is discriminatory .— For purposes of determining whether a plan described in subparagraph (A) meets the requirements of section 79(d) of the Internal Revenue Code of 1986 with respect to group-term life insurance for former employees, coverage provided to employees who retired on or before  December 31, 1986 , may, at the employer’s election, be disregarded. \n \n “(D)   Comparable successor plans .— For purposes of subparagraph (A), a plan shall not fail to be treated as a comparable successor to a plan described in subparagraph (A)(i) with respect to any employee whose benefits do not increase under the successor plan.”\nPub. L. 97–248, title II, §\u202f244(b) ,  Sept. 3, 1982 ,  96 Stat. 524 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1983 .”\nAmendment by  Pub. L. 89–97  applicable to taxable years beginning after  Dec. 31, 1966 , see  section 106(e) of Pub. L. 89–97 , set out as a note under  section 213 of this title .\nPub. L. 88–272, title II, §\u202f204(d) ,  Feb. 26, 1964 ,  78 Stat. 37 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a) [amending this section and  section 7701 of this title ] and (c) [amending sections 6052 and 6678 of this title] and paragraph (3) of section 6652(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 221(b)(2) of this Act), shall apply with respect to group-term life insurance provided after  December 31, 1963 , in taxable years ending after such date. The amendments made by subsection (b) [amending  section 3401 of this title ] shall apply with respect to remuneration paid after  December 31, 1963 , in the form of group-term life insurance provided after such date. In applying section 79(b) of the Internal Revenue Code of 1986 (as added by subsection (a)(1) of this section) to a taxable year beginning before  May 1, 1964 , if paragraph (2)(B) of such section applies with respect to an employee for the period beginning  May 1, 1964 , and ending with the close of his first taxable year ending after  April 30, 1964 , such paragraph (2)(B) shall be treated as applying with respect to such employee for the period beginning  January 1, 1964 , and ending  April 30, 1964 .”\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'The amount otherwise includible in gross income under subsection (a) in respect of any security shall be reduced by an amount equal to the amount (if any) of the loss described in subsection (a)(2) which did not result in a reduction of the taxpayer’s tax under this subtitle for any taxable year, determined under regulations prescribed by the Secretary.\nThis section shall not apply to any recovery of a foreign expropriation loss to which section 1351 applies.\n1984—Subsec. (a).  Pub. L. 98–369  substituted “801” for “802”.\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(1).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 1901(b)(3)(K) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 89–384, §\u202f1(b)(3) ,  Apr. 8, 1966 ,  80 Stat. 102 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this subsection [enacting this section] shall apply to taxable years beginning after  December 31, 1965 , but only with respect to losses described in section 80(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by paragraph (1) of this subsection) which were sustained after  December 31, 1958 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Section, added  Pub. L. 89–722, §\u202f1(b)(1) ,  Nov. 2, 1966 ,  80 Stat. 1152 ; amended  Pub. L. 93–625, §\u202f4(c)(1) ,  Jan. 3, 1975 ,  88 Stat. 2111 ;  Pub. L. 94–455, title VI, §\u202f605(b) ,  Oct. 4, 1976 ,  90 Stat. 1575 ;  Pub. L. 99–514, title VIII, §\u202f805(c)(1)(A) ,  Oct. 22, 1986 ,  100 Stat. 2362 , included increase in vacation pay suspense account in gross income.\nRepeal applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10201(c)(1) of Pub. L. 100–203 , set out as an Effective Date of 1987 Amendment note under  section 404 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Except as provided in section 132(a)(6), there shall be included in gross income (as compensation for services) any amount received or accrued, directly or indirectly, by an individual as a payment for or reimbursement of expenses of moving from one residence to another residence which is attributable to employment or self-employment.\n2018— Pub. L. 115–141  substituted “of moving expenses” for “for expenses of moving” in section catchline.\n1993— Pub. L. 103–66  substituted “Except as provided in section 132(a)(6), there shall” for “There shall”.\nAmendment by  Pub. L. 103–66  applicable to reimbursements or other payments in respect of expenses incurred after  Dec. 31, 1993 , see  section 13213(e) of Pub. L. 103–66 , set out as a note under  section 62 of this title .\nSection applicable to taxable years beginning after  December 31, 1969 , except that it does not apply to moving expenses paid or incurred before  July 1, 1970 , in connection with the commencement of work by the taxpayer as an employee at a new principal place of work of which the taxpayer had been notified by his employer on or before  December 19, 1969 , see  section 231(d) of Pub. L. 91–172 , set out as an Effective Date of 1969 Amendment note under  section 217 of this title .\nWithholding, reporting, inclusion within adjusted gross income, and deduction for reimbursement for moving expenses of members of the uniformed services, see  section 2 of Pub. L. 93–490 ,  Oct. 26, 1974 ,  88 Stat. 1466 , set out as a note under  section 217 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'An election under paragraph (1) with respect to any transfer of property shall be made in such manner as the Secretary prescribes and shall be made not later than 30 days after the date of such transfer. Such election may not be revoked except with the consent of the Secretary.\nThe rights of a person in property are subject to a substantial risk of forfeiture if such person’s rights to full enjoyment of such property are conditioned upon the future performance of substantial services by any individual.\nThe rights of a person in property are transferable only if the rights in such property of any transferee are not subject to a substantial risk of forfeiture.\nIn the case of property subject to a restriction which by its terms will never lapse, and which allows the transferee to sell such property only at a price determined under a formula, the price so determined shall be deemed to be the fair market value of the property unless established to the contrary by the Secretary, and the burden of proof shall be on the Secretary with respect to such value.\nIn determining the period for which the taxpayer has held property to which subsection (a) applies, there shall be included only the period beginning at the first time his rights in such property are transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier.\nIn the case of a transfer of property to which this section applies or a cancellation of a restriction described in subsection (d), there shall be allowed as a deduction under section 162, to the person for whom were performed the services in connection with which such property was transferred, an amount equal to the amount included under subsection (a), (b), or (d)(2) in the gross income of the person who performed such services. Such deduction shall be allowed for the taxable year of such person in which or with which ends the taxable year in which such amount is included in the gross income of the person who performed such services.\nIf qualified stock is transferred to a qualified employee who makes an election with respect to such stock under this subsection, subsection (a) shall be applied by including the amount determined under such subsection with respect to such stock in income of the employee in the taxable year determined under subparagraph (B) in lieu of the taxable year described in subsection (a).\nThe term “qualified stock” shall not include any stock if the employee may sell such stock to, or otherwise receive cash in lieu of stock from, the corporation at the time that the rights of the employee in such stock first become transferable or not subject to a substantial risk of forfeiture.\nFor purposes of clause (i)(II), the term “employee” shall not include any employee described in section 4980E(d)(4) or any excluded employee.\nIn the case of any calendar year beginning before  January 1, 2018 , clause (i)(II) shall be applied without regard to whether the rights and privileges with respect to the qualified stock are the same.\nAn election with respect to qualified stock shall be made under this subsection no later than 30 days after the first date the rights of the employee in such stock are transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier, and shall be made in a manner similar to the manner in which an election is made under subsection (b).\nFor purposes of this paragraph, the term “deferral stock” means stock with respect to which an election is in effect under this subsection.\nStock purchased by a corporation from any individual shall not be treated as deferral stock for purposes of subparagraph (B)(iii) if such individual (immediately after such purchase) holds any deferral stock with respect to which an election has been in effect under this subsection for a longer period than the election with respect to the stock so purchased.\nThe requirements of subclauses (I) and (II) of subparagraph (B)(iii) shall be treated as met if the stock so purchased includes all of the corporation’s outstanding deferral stock.\nAny corporation which has outstanding deferral stock as of the beginning of any calendar year and which purchases any of its outstanding stock during such calendar year shall include on its return of tax for the taxable year in which, or with which, such calendar year ends the total dollar amount of its outstanding stock so purchased during such calendar year and such other information as the Secretary requires for purposes of administering this paragraph.\nFor purposes of this subsection, all persons treated as a single employer under section 414(b) shall be treated as 1 corporation.\nThis section (other than this subsection), including any election under subsection (b), shall not apply to restricted stock units.\nThe Securities Exchange Act of 1934, referred to in subsecs. (c)(3) and (i)(3)(B)(iv), is  act June 6, 1934, ch. 404 ,  48 Stat. 881 , which is classified principally to chapter 2B (§\u202f78a et seq.) of Title 15, Commerce and Trade. Section 16(b) of the Act is classified to  section 78p(b) of Title 15 . For complete classification of this Act to the Code, see  section 78a of Title 15  and Tables.\n2017—Subsec. (i).  Pub. L. 115–97  added subsec. (i).\n2004—Subsec. (c)(4).  Pub. L. 108–357  added par. (4).\n1990—Subsec. (i).  Pub. L. 101–508  struck out subsec. (i) “Transition rules” which read as follows: “This section shall apply to property transferred after  June 30, 1969 , except that this section shall not apply to property transferred—\n“(1) pursuant to a binding written contract entered into before  April 22, 1969 ,\n“(2) upon the exercise of an option granted before  April 22, 1969 ,\n“(3) before  May 1, 1970 , pursuant to a written plan adopted and approved before  July 1, 1969 ,\n“(4) before  January 1, 1973 , upon the exercise of an option granted pursuant to a binding written contract entered into before  April 22, 1969 , between a corporation and the transferor requiring the transferor to grant options to employees of such corporation (or a subsidiary of such corporation) to purchase a determinable number of shares of stock of such corporation, but only if the transferee was an employee of such corporation (or a subsidiary of such corporation) on or before  April 22, 1969 , or\n“(5) in exchange for (or pursuant to the exercise of a conversion privilege contained in) property transferred before  July 1, 1969 , or for property to which this section does not apply (by reason of paragraphs (1), (2), (3), or (4)), if section 354, 355, 356, or 1036 (or so much of section 1031 as relates to section 1036) applies, or if gain or loss is not otherwise required to be recognized upon the exercise of such conversion privilege, and if the property received in such exchange is subject to restrictions and conditions substantially similar to those to which the property given in such exchange was subject.”\n1986—Subsec. (e)(5).  Pub. L. 99–514  struck out “the cost of” before “group-life insurance”.\n1984—Subsec. (e)(5).  Pub. L. 98–369  added par. (5).\n1983—Subsec. (c)(3).  Pub. L. 97–448  substituted “Securities Exchange Act of 1934” for “Securities and Exchange Act of 1934” in heading and text.\n1981—Subsec. (c)(3).  Pub. L. 97–34  added par. (3).\n1976—Subsec. (b)(2).  Pub. L. 94–455, §\u202f1901(a)(15) , struck out “(or, if later, 30 days after the date of the enactment of the Tax Reform Act of 1969)” after “after the date of such transfer”, and §\u202f1906(b)(13)(A), “or his delegate” after “Secretary” wherever appearing.\nSubsec. (d)(1), (2)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nPub. L. 115–97, title I, §\u202f13603(f) ,  Dec. 22, 2017 ,  131 Stat. 2164 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 409A, 422, 423, 3401, 3402, 6051, and 6652 of this title] shall apply to stock attributable to options exercised, or restricted stock units settled, after  December 31, 2017 . \n \n “(2)   Requirement to provide notice .— The amendments made by subsection (e) [amending  section 6652 of this title ] shall apply to failures after  December 31, 2017 .”\nAmendment by  Pub. L. 108–357  applicable to distributions on or after  Oct. 22, 2004 , see  section 906(c) of Pub. L. 108–357 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 223(d)(1) of Pub. L. 98–369 , set out as a note under  section 79 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title II, §\u202f252(c) ,  Aug. 13, 1981 ,  95 Stat. 260 , as amended by  Pub. L. 97–448, title I, §\u202f102(k)(2) ,  96 Stat. 2374 , provided that:  “The amendment made by subsection (a) [amending this section] and the provisions of subsection (b) [set out below] shall apply to transfers after  December 31, 1981 .”\nAmendment by  section 1901(a)(15) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–172, title III, §\u202f321(d) ,  Dec. 30, 1969 ,  83 Stat. 591 , provided that:  “The amendments made by subsections (a) and (c) [amending sections 402, 403, and 404 of this title] shall apply to taxable years ending after  June 30, 1969 . The amendments made by subsection (b) [enacting this section] shall apply with respect to contributions made and premiums paid after  August 1, 1969 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 115–97, title I, §\u202f13603(g) ,  Dec. 22, 2017 ,  131 Stat. 2164 , provided that:  “Until such time as the Secretary (or the Secretary’s delegate) issues regulations or other guidance for purposes of implementing the requirements of paragraph (2)(C)(i)(II) of section 83(i) of the Internal Revenue Code of 1986 (as added by this section), or the requirements of paragraph (6) of such section, a corporation shall be treated as being in compliance with such requirements (respectively) if such corporation complies with a reasonable good faith interpretation of such requirements.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(p) ,  Oct. 22, 1986 ,  100 Stat. 2911 , as amended by  Pub. L. 100–647, title I, §\u202f1018(q)(3) ,  Nov. 10, 1988 ,  102 Stat. 3585 , provided that: \n “(1)  Notwithstanding subsection (c) of section 252 of the Economic Recovery Tax Act of 1981 [ section 252(c) of Pub. L. 97–34 , set out above], the amendment made by subsection (a) of such section 252 [amending this section] (and the provisions of subsection (b) of such section 252 [set out below]) shall apply to any transfer of stock to any person if— “(A)  such transfer occurred in November or December of 1973 and was pursuant to the exercise of an option granted in November or December of 1971, \n \n “(B)  in December 1973 the corporation granting the option was acquired by another corporation in a transaction qualifying as a reorganization under section 368 of the Internal Revenue Code of 1954 [now 1986], \n \n “(C)  the fair market value (as of  July 1, 1974 ) of the stock received by such person in the reorganization in exchange for the stock transferred to him pursuant to the exercise of such option was less than 50 percent of the fair market value of the stock so received (as of  December 4, 1973 ), \n \n “(D)  in 1975 or 1976 such person sold substantially all of the stock received in such reorganization, and \n \n “(E)  such person makes an election under this section at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. \n \n \n “(2)   Limitation on amount of benefit .— Paragraph (1) shall not apply to transfers with respect to any employee to the extent that the application of paragraph (1) with respect to such employee would (but for this paragraph) result in a reduction in liability for income tax with respect to such employee for all taxable years in excess of $100,000 (determined without regard to any interest). \n \n “(3)   Statute of limitations.— “(A)   Overpayments .— If refund or credit of any overpayment of tax resulting from the application of paragraph (1) is prevented on the date of the enactment of this Act [ Oct. 22, 1986 ] (or at any time within 6 months after such date of enactment) by the operation of any law or rule of law, refund or credit of such overpayment (to the extent attributable to the application of paragraph (1)) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 6-month period. \n \n “(B)   Deficiencies .— If the assessment of any deficiency of tax resulting from the application of paragraph (1) is prevented on the date of the enactment of this Act [ Oct. 22, 1986 ] (or at any time within 6 months after such date of enactment) by the operation of any law or rule of law, assessment of such deficiency (to the extent attributable to the application of paragraph (1)) may, nevertheless, be made within such 6-month period.”\nPub. L. 98–369, div. A, title V, §\u202f556 ,  July 18, 1984 ,  98 Stat. 898 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1855(b),  Oct. 22, 1986 ,  100 Stat. 2095 , 2882, provided that:  \n “In the case of any transfer of property in connection with the performance of services on or before  November 18, 1982 , the election permitted by section 83(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] may be made, notwithstanding paragraph (2) of such section 83(b), with the income tax return for any taxable year ending after  July 18, 1984 , and beginning before the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ] if— “(1)  the amount paid for such property was not less than its fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse), and \n \n “(2)  the election is consented to by the person transferring such property. \n \n\n The election shall contain that information required by the Secretary of the Treasury or his delegate for elections permitted by such section 83(b). The period for assessing any tax attributable to a transfer of property which is the subject of an election made pursuant to this section shall not expire before the date which is 3 years after the date such election was made.”\nPub. L. 97–34, title II, §\u202f252(b) ,  Aug. 13, 1981 ,  95 Stat. 260 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided, effective with respect to taxable years ending after  Dec. 31, 1981 , that:  “For purposes of section 83 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], property is subject to substantial risk of forfeiture and is not transferable so long as such property is subject to a restriction on transfer to comply with the ‘Pooling-of-Interests Accounting’ rules set forth in Accounting Series Release Numbered 130 ((10/5/72) 37 FR 20937; 17 CFR 211.130) and Accounting Series Release Numbered 135 ((1/18/73) 38 FR 1734; 17 CFR 211.135).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'In the case of a transfer of property to a political organization to which subsection (a) applies, the basis of such property in the hands of the political organization shall be the same as it would be in the hands of the transferor, increased by the amount of gain recognized to the transferor by reason of such transfer.\nFor purposes of this section, the term “political organization” has the meaning given to such term by section 527(e)(1).\n2018— Pub. L. 115–141  substituted “political organizations” for “political organization” in section catchline.\nPub. L. 93–625, §\u202f13(b) ,  Jan. 3, 1975 ,  88 Stat. 2121 , provided that:  “The amendments made by subsection (a) [enacting this section] shall apply to transfers made after  May 7, 1974 , in taxable years ending after such date.”\nPub. L. 93–625, §\u202f13(c) ,  Jan. 3, 1975 ,  88 Stat. 2121 , provided that in the case of the sale or exchange of property before  Aug. 2, 1973 , which was acquired by the exempt political organization by contribution, no gain or loss shall be recognized by such organization.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'In the case of an individual, gross income includes unemployment compensation.\nFor purposes of this section, the term “unemployment compensation” means any amount received under a law of the United States or of a State which is in the nature of unemployment compensation.\nIn the case of any taxable year beginning in 2020, if the adjusted gross income of the taxpayer for such taxable year is less than $150,000, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200.\n2021—Subsec. (c).  Pub. L. 117–2  added subsec. (c).\n2014—Subsec. (c).  Pub. L. 113–295  struck out subsec. (c). Text read as follows: “In the case of any taxable year beginning in 2009, gross income shall not include so much of the unemployment compensation received by an individual as does not exceed $2,400.”\n2009—Subsec. (c).  Pub. L. 111–5  added subsec. (c).\n1986—Subsec. (a).  Pub. L. 99–514  substituted “General rule” for “In general” in heading and amended text generally. Prior to amendment, text read as follows: “If the sum for the taxable year of the adjusted gross income of the taxpayer (determined without regard to this section, section 86 and section 221) and the unemployment compensation exceeds the base amount, gross income for the taxable year includes unemployment compensation in an amount equal to the lesser of—\n“(1) one-half of the amount of the excess of such sum over the base amount, or\n“(2) the amount of the unemployment compensation.”\nSubsecs. (b), (c).  Pub. L. 99–514 , in amending section generally, redesignated former subsec. (c) as (b) and struck out former subsec. (b), “Base amount defined”, which read as follows: “For purposes of this section, the term ‘base amount’ means—\n“(1) except as provided in paragraphs (2) and (3), $12,000,\n“(2) $18,000, in the case of a joint return under section 6013, or\n“(3) zero, in the case of a taxpayer who—\n“(A) is married at the close of the taxable year (within the meaning of section 143) but does not file a joint return for such year, and\n“(B) does not live apart from his spouse at all times during the taxable year.”\n1983—Subsec. (a).  Pub. L. 98–21, §\u202f122(c)(2) , struck out “,\u2000section 105(d),” after “section 86”.\nPub. L. 98–21, §\u202f121(f)(1) , inserted “section 86,” after “this section,”.\n1982—Subsec. (b)(1).  Pub. L. 97–248, §\u202f611(a)(1) , substituted “$12,000” for “$20,000”.\nSubsec. (b)(2).  Pub. L. 97–248, §\u202f611(a)(2) , substituted “$18,000” for “$25,000”.\n1981—Subsec. (a).  Pub. L. 97–34  substituted “this section, section 105(d), and section 221” for “this section and without regard to section 105(d)” in parenthetical provision preceding par. (1).\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1007(b) ,  Feb. 17, 2009 ,  123 Stat. 317 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  Pub. L. 99–514  applicable to amounts received after  Dec. 31, 1986 , in taxable years ending after such date, see  section 151(b) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 121(f)(1) of Pub. L. 98–21  applicable to benefits received after  Dec. 31, 1983 , in taxable years ending after such date, except for any portion of a lump-sum payment of social security benefits received after  Dec. 31, 1983 , if the generally applicable payment date for such portion was before  Jan. 1, 1984 , see  section 121(g) of Pub. L. 98–21 , set out as an Effective Date note under  section 86 of this title .\nAmendment by  section 122(c)(2) of Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under  section 105(d)(6) of this title  as in effect on the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21 , set out as a note under  section 22 of this title .\nPub. L. 97–248, title VI, §\u202f611(b) ,  Sept. 3, 1982 ,  96 Stat. 706 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Compensation paid after 1981 .— The amendments made by this section [amending this section] shall apply to payments of unemployment compensation made after  December 31, 1981 , in taxable years ending after such date. \n \n “(2)   No addition to tax for underpayment of estimated tax attributable to application of amendments to compensation paid in 1982 .— No addition to tax shall be made under section 6654 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to any underpayment to the extent such underpayment is attributable to unemployment compensation which is received during 1982 and which (but for the amendments made by subsection (a)) would not be includable in gross income. \n \n “(3)   Special rule for fiscal year taxpayers .— In the case of a taxable year (other than a calendar year) which includes  January 1, 1982 — “(A)  the amendments made by this section shall be applied by taking into account the entire amount of unemployment compensation received during such taxable year, but \n \n “(B)  the increase in gross income for such taxable year as a result of such amendments shall not exceed the amount of unemployment compensation paid after  December 31, 1981 . \n \n \n “(4)   Unemployment compensation defined .— For purposes of this subsection, the term ‘unemployment compensation’ has the meaning given to such term by section 85(c) [now 85(b)] of the Internal Revenue Code of 1986.”\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 103(d) of Pub. L. 97–34 , set out as a note under  section 62 of this title .\nPub. L. 95–600, title I, §\u202f112(d) ,  Nov. 6, 1978 ,  92 Stat. 2778 , as amended by  Pub. L. 98–369, div. A, title X, §\u202f1075(a) ,  July 18, 1984 ,  98 Stat. 1053 , provided that:  “The amendments made by this section [enacting this section and  section 6050B of this title ] shall apply to payments of unemployment compensation made after  December 31, 1978 , in taxable years ending after such date, except that such amendments shall not apply to payments made for weeks of unemployment ending before  December 1, 1978 .”\nPub. L. 98–369, div. A, title X, §\u202f1075(b) ,  July 18, 1984 ,  98 Stat. 1053 , provided that:  “If credit or refund of any overpayment of tax resulting from the amendment made by subsection (a) [amending  section 112(d) of Pub. L. 95–600 , set out as an Effective Date note above] is barred on the date of the enactment of this Act [ July 18, 1984 ] or at any time during the 1-year period beginning on the date of the enactment of this Act by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the amendment made by subsection (a)) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'For purposes of this section, the amount of social security benefits received during any taxable year shall be reduced by any repayment made by the taxpayer during the taxable year of a social security benefit previously received by the taxpayer (whether or not such benefit was received during the taxable year).\nIf (but for this subparagraph) any portion of the repayments referred to in subparagraph (A) would have been allowable as a deduction for the taxable year under section 165, such portion shall be allowable as a deduction only to the extent it exceeds the social security benefits received by the taxpayer during the taxable year (and not repaid during such taxable year).\nFor purposes of this section, if, by reason of section 224 of the Social Security Act (or by reason of section 3(a)(1) of the Railroad Retirement Act of 1974), any social security benefit is reduced by reason of the receipt of a benefit under a workmen’s compensation act, the term “social security benefit” includes that portion of such benefit received under the workmen’s compensation act which equals such reduction.\nFor purposes of subsection (a), in any case where section 708 of the Social Security Act causes social security benefit checks to be delivered before the end of the calendar month for which they are issued, the benefits involved shall be deemed to have been received in the succeeding calendar month.\nFor purposes of this subsection, a social security benefit is attributable to a taxable year if the generally applicable payment date for such benefit occurred during such taxable year.\nAn election under this subsection shall be made at such time and in such manner as the Secretary shall by regulations prescribe. Such election, once made, may be revoked only with the consent of the Secretary.\nThe Social Security Act, referred to in subsecs. (a)(1) and (d)(1)(A), (3), (4)(A), (5), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. Title II of the Act is classified generally to subchapter II (§\u202f401 et seq.) of Title 42. Sections 207, 224, and 708 of the Act are classified to sections 407, 424a, and 909 of Title 42, respectively. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe Railroad Retirement Act of 1974, referred to in subsec. (d)(3), (4), is  act Aug. 29, 1935, ch. 812 , as amended generally by  Pub. L. 93–445, title I, §\u202f101 ,  Oct. 16, 1974 ,  88 Stat. 1305 , which is classified generally to subchapter IV (§\u202f231 et seq.) of chapter 9 of Title 45, Railroads. Section 3(a)(1), (f)(3) of the Act is classified to section 231b(a)(1), (f)(3) of Title 45. For further details and complete classification of this Act to the Code, see Codification note set out preceding  section 231 of Title 45 ,  section 231t of Title 45 , and Tables.\nA prior section 86 was renumbered  section 87 of this title .\n2021—Subsec. (b)(2)(A).  Pub. L. 117–2  inserted “85(c),” before “135”.\n2020—Subsec. (b)(2)(A).  Pub. L. 116–260  struck out “222,” after “221,”.\n2017—Subsec. (b)(2)(A).  Pub. L. 115–97  struck out “199,” before “221”.\n2004—Subsec. (b)(2)(A).  Pub. L. 108–357  inserted “199,” before “221”.\n2001—Subsec. (b)(2)(A).  Pub. L. 107–16  inserted “222,” after “221,”.\n1998—Subsec. (b)(2)(A).  Pub. L. 105–277  inserted “221,” after “137,”.\n1996—Subsec. (b)(2).  Pub. L. 104–188, §\u202f1704(t)(3) , substituted “means adjusted” for “means adusted” in introductory provisions.\nSubsec. (b)(2)(A).  Pub. L. 104–188, §\u202f1807(c)(2) , inserted “137,” before “911”.\n1994—Subsec. (d)(1).  Pub. L. 103–296  struck out at end “For purposes of the preceding sentence, the amount received by any taxpayer shall be determined as if the Social Security Act did not contain section 203(i) thereof.”\n1993—Subsec. (a).  Pub. L. 103–66, §\u202f13215(a) , designated existing provisions as par. (1), inserted par. (1) heading, substituted “Except as provided in paragraph (2), gross” for “Gross”, redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, and added par. (2).\nSubsec. (c).  Pub. L. 103–66, §\u202f13215(b) , amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘base amount’ means—\n“(1) except as otherwise provided in this subsection, $25,000,\n“(2) $32,000, in the case of a joint return, and\n“(3) zero, in the case of a taxpayer who—\n“(A) is married at the close of the taxable year (within the meaning of section 7703) but does not file a joint return for such year, and\n“(B) does not live apart from his spouse at all times during the taxable year.”\n1988—Subsec. (b)(2)(A).  Pub. L. 100–647, §\u202f6009(c)(1) , inserted “135,” before “911”.\nSubsec. (f)(4), (5).  Pub. L. 100–647, §\u202f1001(e) , redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “section 221(b)(2) (defining earned income), and”.\n1986—Subsec. (b)(2)(A).  Pub. L. 99–514, §\u202f131(b)(2) , substituted “sections” for “sections 221,”.\nSubsec. (c)(3)(A).  Pub. L. 99–514, §\u202f1301(j)(8) , substituted “section 7703” for “section 143”.\nSubsec. (d)(4).  Pub. L. 99–272, §\u202f13204(a) , in amending par. (4) generally, designated existing provisions as introductory clause of par. (4), struck out “a monthly benefit under section 3(a), 3(f)(3), 4(a), or 4(f) of the Railroad Retirement Act of 1974”, and added cls. (A) and (B).\nSubsec. (d)(5).  Pub. L. 99–272, §\u202f12111(b) , added par. (5).\nSubsec. (f)(1).  Pub. L. 99–514, §\u202f1847(b)(2) , substituted “section 22(c)(3)(A)” for “section 37(c)(3)(A)”.\n1984—Subsec. (f)(1).  Pub. L. 98–369, §\u202f2661 ( o )(1), added par. (1). Former par. (1) redesignated par. (2).\nPub. L. 98–369, §\u202f474(r)(2) , substituted “section 32(c)(2)” for “section 43(c)(2)”.\nSubsec. (f)(2)–(5).  Pub. L. 98–369, §\u202f2661 ( o )(1), redesignated pars. (1) to (4) as (2) to (5), respectively.\n1983—Subsec. (a).  Pub. L. 98–21, §\u202f335(b)(2)(A) , inserted “(notwithstanding section 207 of the Social Security Act)”.\nSubsec. (d)(4).  Pub. L. 98–76  inserted “3(f)(3),” after “3(a),”.\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nPub. L. 105–277, div. J, title IV, §\u202f4003 ( l ),  Oct. 21, 1998 ,  112 Stat. 2681–910 , provided that:  “The amendments made by this section [amending this section and sections 135, 137, 163, 172, 219, 221, 264, 351, 368, 469, 954, 2001, 6311, 6404, and 9510 of this title and amending provisions set out as a note under  section 7508A of this title ] shall take effect as if included in the provisions of the 1997 Act [ Pub. L. 105–34 ] to which they relate.”\nAmendment by  section 1807(c)(2) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as an Effective Date note under  section 23 of this title .\nPub. L. 103–296, title III, §\u202f309(e)(2) ,  Aug. 15, 1994 ,  108 Stat. 1524 , provided that:  “The amendment made by subsection (d) [amending this section] shall apply with respect to benefits received after  December 31, 1995 , in taxable years ending after such date.”\nPub. L. 103–66, title XIII, §\u202f13215(d) ,  Aug. 10, 1993 ,  107 Stat. 477 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after  December 31, 1993 .”\nAmendment by  section 1001(e) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6009(d) ,  Nov. 10, 1988 ,  102 Stat. 3690 , provided that:  “The amendments made by this section [enacting  section 135 of this title , amending this section and sections 219 and 469 of this title, and renumbering former section 135 as  section 136 of this title ] shall apply to taxable years beginning after  December 31, 1989 .”\nAmendment by  section 131(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1301(j)(8) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311–1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 1847(b)(2) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 12111(b) of Pub. L. 99–272  applicable with respect to benefit checks issued for months ending after  Apr. 7, 1986 , see  section 12111(c) of Pub. L. 99–272 , set out as a note under  section 909 of Title 42 , The Public Health and Welfare.\nPub. L. 99–272, title XIII, §\u202f13204(b) ,  Apr. 7, 1986 ,  100 Stat. 313 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to any monthly benefit for which the generally applicable payment date is after  December 31, 1985 .”\nAmendment by  section 474(r)(2) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 2661 of Pub. L. 98–369  effective as though included in the enactment of the Social Security Amendments of 1983,  Pub. L. 98–21 , see  section 2664(a) of Pub. L. 98–369 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 98–76  applicable to benefits received after  Dec. 31, 1983 , in taxable years ending after such date, except for portions of lump-sum payments received after  Dec. 31, 1983 , if the generally applicable payment date for such portion was before  Jan. 1, 1984 , see  section 227(b) of Pub. L. 98–76  set out as a note under  section 72 of this title .\nPub. L. 98–21, title I, §\u202f121(g) ,  Apr. 20, 1983 ,  97 Stat. 84 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this section and  section 6050F of this title , amending sections 85, 128, 861, 871, 1441, and 6103 of this title and  section 3413 of Title 12 , Banks and Banking, and enacting provisions set out as a note under  section 401 of Title 42 , The Public Health and Welfare] shall apply to benefits received after  December 31, 1983 , in taxable years ending after such date. \n \n “(2)   Treatment of certain lump-sum payments received after  december 31, 1983 .— The amendments made by this section shall not apply to any portion of a lump-sum payment of social security benefits (as defined in section 86(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) received after  December 31, 1983 , if the generally applicable payment date for such portion was before  January 1, 1984 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': '2022—Par. (3).  Pub. L. 117–169  added par. (3).\n2004— Pub. L. 108–357  amended section catchline and text generally. Prior to amendment, text read as follows: “Gross income includes the amount of the alcohol fuel credit determined with respect to the taxpayer for the taxable year under section 40(a).”\n1984— Pub. L. 98–369  amended section generally, substituting “the amount of the alcohol fuel credit determined with respect to the taxpayer for the taxable year under section 40(a)” for “an amount equal to the amount of the credit allowable to the taxpayer under section 44E for the taxable year (determined without regard to subsection (e) thereof)”.\nAmendment by  Pub. L. 117–169  applicable to fuel sold or used after  Dec. 31, 2022 , see  section 13203(f) of Pub. L. 117–169 , set out as an Effective Date note under  section 40B of this title .\nAmendment by  Pub. L. 108–357  applicable to fuel produced, and sold or used, after  Dec. 31, 2004 , in taxable years ending after such date, see  section 302(d) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nSection applicable to sales or uses after  Sept. 30, 1980 , in taxable years ending after such date, see  section 232(h)(1) of Pub. L. 96–223 , set out as a note under  section 40 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'In the case of any taxpayer who is required to include the amount of any nuclear decommissioning costs in the taxpayer’s cost of service for ratemaking purposes, there shall be includible in the gross income of such taxpayer the amount so included for any taxable year.\n1986— Pub. L. 99–514  substituted “for ratemaking purposes” for “of ratemaking purposes”.\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection effective  July 18, 1984 , with respect to taxable years ending after such date, see  section 91(g)(5) of Pub. L. 98–369 , as amended, set out as an Effective Date of 1984 Amendment note under  section 461 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Section, added  Pub. L. 99–514, title XI, §\u202f1151(a) ,  Oct. 22, 1986 ,  100 Stat. 2494 ; amended  Pub. L. 100–647, title I, §\u202f1011B(a)(1) –(9), (21), (28), (29), (34), title III, §\u202f3021(a)(1)(A), (B), (2)(A), (3)–(9), (11)–(13)(A), (b)(2)(B), (3), title VI, §\u202f6051(a),  Nov. 10, 1988 ,  102 Stat. 3483–3485 , 3487, 3488, 3625–3632, 3695, related to nondiscrimination rules regarding benefits provided under employee benefit plans.\nPub. L. 101–140, title II, §\u202f202(c) ,  Nov. 8, 1989 ,  103 Stat. 830 , provided that:  “The amendments made by this section [repealing this section] shall take effect as if included in section 1151 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , see section 1151(k) set out as a note under  section 79 of this title ].”\nPub. L. 101–136, title V, §\u202f528 ,  Nov. 3, 1989 ,  103 Stat. 816 , provided that:  “No monies appropriated by this Act [see Tables for classification] may be used to implement or enforce section 1151 of the Tax Reform Act of 1986 or the amendments made by such section [ section 1151 of Pub. L. 99–514 , which enacted  section 89 of this title , amended sections 79, 105, 106, 117, 120, 125, 127, 129, 132, 414, 505, 3121, 3306, 6039D, and 6652 of this title and  section 409 of Title 42 , The Public Health and Welfare, and enacted provisions set out as a note under  section 89 of this title ].”\nPub. L. 100–647, title III, §\u202f3021(c) ,  Nov. 10, 1988 ,  102 Stat. 3633 , provided for the first issue of valuation rules, the interim impact on former employees, the meeting of the written requirement for covered plans in connection with implementation of section 89 of the Code, and the issuance by  Nov. 15, 1988 , of rules necessary to carry out section 89, prior to repeal by  Pub. L. 101–140, title II, §\u202f203(a)(7) ,  Nov. 8, 1989 ,  103 Stat. 831 .\nPub. L. 100–647, title VI, §\u202f6070 ,  Nov. 10, 1988 ,  102 Stat. 3704 , increased the number of employees who would be excluded from consideration under this section during plan years 1989 and 1990, in the case of a plan maintained by an employer which employs fewer than 10 employees on a normal working day during a plan year, prior to repeal by  Pub. L. 101–140, title II, §\u202f203(a)(7) ,  Nov. 8, 1989 ,  103 Stat. 831 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'Gross income shall include an amount equal to any illegal Federal irrigation subsidy received by the taxpayer during the taxable year.\nThe term “Federal irrigation water” means any water made available for agricultural purposes from the operation of any reclamation or irrigation project referred to in paragraph (8) of section 202 of the Reclamation Reform Act of 1982.\nNo deduction shall be allowed under this subtitle by reason of any inclusion in gross income under subsection (a).\nSection 202 of the Reclamation Reform Act of 1982, referred to in subsec. (b)(2), is classified to  section 390bb of Title 43 , Public Lands.\nPub. L. 100–203, title X, §\u202f10611(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–452 , provided that:  “The amendments made by this section [enacting this section] shall apply to water delivered to the taxpayer in months beginning after the date of the enactment of this Act [ Dec. 22, 1987 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME'},
  'content': 'If a domestic corporation transfers substantially all of the assets of a foreign branch (within the meaning of section 367(a)(3)(C), as in effect before the date of the enactment of the Tax Cuts and Jobs Act) to a specified 10-percent owned foreign corporation (as defined in section 245A) with respect to which it is a United States shareholder after such transfer, such domestic corporation shall include in gross income for the taxable year which includes such transfer an amount equal to the transferred loss amount with respect to such transfer.\nThe transferred loss amount shall be reduced (but not below zero) by the amount of gain recognized by the taxpayer on account of the transfer (other than amounts taken into account under subsection (b)(2)(B)).\nAmounts included in gross income under this section shall be treated as derived from sources within the United States.\nConsistent with such regulations or other guidance as the Secretary shall prescribe, proper adjustments shall be made in the adjusted basis of the taxpayer’s stock in the specified 10-percent owned foreign corporation to which the transfer is made, and in the transferee’s adjusted basis in the property transferred, to reflect amounts included in gross income under this section.\nThe date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (a), probably means the date of enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\nPub. L. 115–97, title I, §\u202f14102(d)(3) ,  Dec. 22, 2017 ,  131 Stat. 2194 , provided that:  “The amendments made by this subsection [enacting this section] shall apply to transfers after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f14102(d)(4) ,  Dec. 22, 2017 ,  131 Stat. 2194 , provided that:  “The amount of gain taken into account under section 91(c) of the Internal Revenue Code of 1986, as added by this subsection, shall be reduced by the amount of gain which would be recognized under section 367(a)(3)(C) (determined without regard to the amendments made by subsection (e) [amending  section 367 of this title ]) with respect to losses incurred before  January 1, 2018 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Except as otherwise provided in paragraphs (2) and (3), subsection (d), subsection (f), and subsection (j), gross income does not include amounts received (whether in a single sum or otherwise) under a life insurance contract, if such amounts are paid by reason of the death of the insured.\nThe second sentence of paragraph (2) shall not apply in the case of a transfer of a life insurance contract, or any interest therein, which is a reportable policy sale.\nFor purposes of this paragraph, the term “reportable policy sale” means the acquisition of an interest in a life insurance contract, directly or indirectly, if the acquirer has no substantial family, business, or financial relationship with the insured apart from the acquirer’s interest in such life insurance contract. For purposes of the preceding sentence, the term “indirectly” applies to the acquisition of an interest in a partnership, trust, or other entity that holds an interest in the life insurance contract.\nIf any amount excluded from gross income by subsection (a) is held under an agreement to pay interest thereon, the interest payments shall be included in gross income.\nThe amounts held by an insurer with respect to any beneficiary shall be prorated (in accordance with such regulations as may be prescribed by the Secretary) over the period or periods with respect to which such payments are to be made. There shall be excluded from the gross income of such beneficiary in the taxable year received any amount determined by such proration. Gross income includes, to the extent not excluded by the preceding sentence, amounts received under agreements to which this subsection applies.\nThis subsection shall not apply to any amount to which subsection (c) is applicable.\nThe term “guideline level premium” means the level annual amount, payable over the longest period permitted under the contract (but ending not less than 20 years from date of issue or not later than age 95, if earlier), computed on the same basis as the guideline single premium, except that subparagraph (B)(ii) shall be applied by substituting “4 percent” for “6 percent”.\nThe guideline single premium and guideline level premium shall be adjusted in the event of a change in the future benefits or any qualified additional benefit under the contract which was not reflected in any guideline single premiums or guideline level premium previously determined.\nThe terms “flexible premium life insurance contract” and “contract” mean a life insurance contract (including any qualified additional benefits) which provides for the payment of one or more premiums which are not fixed by the insurer as to both timing and amount. Such terms do not include that portion of any contract which is treated under State law as providing any annuity benefits other than as a settlement option.\nThe cash value of any contract shall be determined without regard to any deduction for any surrender charge or policy loan.\nThe payment of a premium which would result in the sum of the premiums paid exceeding the guideline premium limitation shall be disregarded for purposes of paragraph (1)(A)(i) if the amount of such premium does not exceed the amount necessary to prevent the termination of the contract without cash value on or before the end of the contract year.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\nIf any portion of the death benefit under a life insurance contract on the life of an insured described in paragraph (1) is sold or assigned to a viatical settlement provider, the amount paid for the sale or assignment of such portion shall be treated as an amount paid under the life insurance contract by reason of the death of such insured.\nA payment shall not fail to be described in subparagraph (A) by reason of being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payment relates.\nFor limitation on amount of periodic payments which are treated as described in paragraph (1), see section 7702B(d).\nThe term “terminally ill individual” means an individual who has been certified by a physician as having an illness or physical condition which can reasonably be expected to result in death in 24 months or less after the date of the certification.\nThe term “chronically ill individual” has the meaning given such term by section 7702B(c)(2); except that such term shall not include a terminally ill individual.\nThe term “qualified long-term care services” has the meaning given such term by section 7702B(c).\nThe term “physician” has the meaning given to such term by section 1861(r)(1) of the Social Security Act ( 42 U.S.C. 1395x(r)(1) ).\nThis subsection shall not apply in the case of any amount paid to any taxpayer other than the insured if such taxpayer has an insurable interest with respect to the life of the insured by reason of the insured being a director, officer, or employee of the taxpayer or by reason of the insured being financially interested in any trade or business carried on by the taxpayer.\nGross income does not include amounts (whether in a single sum or otherwise) paid by an employer by reason of the death of an employee who is a specified terrorist victim (as defined in section 692(d)(4)).\nSubject to such rules as the Secretary may prescribe, paragraph (1) shall not apply to amounts which would have been payable after death if the individual had died other than as a specified terrorist victim (as so defined).\nSubparagraph (A) shall not apply to incidental death benefits paid from a plan described in section 401(a) and exempt from tax under section 501(a).\nFor purposes of paragraph (1), the term “employee” includes a self-employed individual (as defined in section 401(c)(1)).\nThe provisions of this subsection shall apply to any astronaut whose death occurs in the line of duty.\nIn the case of an employer-owned life insurance contract, the amount excluded from gross income of an applicable policyholder by reason of paragraph (1) of subsection (a) shall not exceed an amount equal to the sum of the premiums and other amounts paid by the policyholder for the contract.\nThe term “applicable policyholder” means, with respect to any employer-owned life insurance contract, the person described in subparagraph (A)(i) which owns the contract.\nThe term “employee” includes an officer, director, and highly compensated employee (within the meaning of section 414(q)).\nThe term “insured” means, with respect to an employer-owned life insurance contract, an individual covered by the contract who is a United States citizen or resident. In the case of a contract covering the joint lives of 2 individuals, references to an insured include both of the individuals.\nThe Omnibus Crime Control and Safe Streets Act of 1968, referred to in subsec. (h), is  Pub. L. 90–351 ,  June 19, 1968 ,  82 Stat. 197 . Section 1204 of the Act is classified to  section 10284 of Title 34 , Crime Control and Law Enforcement. Section 1204 of the Act, as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013, means section 1204 prior to its amendment by  Pub. L. 112–239, div. A, title X, §\u202f1086(b)(1)(E) ,  Jan. 2, 2013 ,  126 Stat. 1967 . For complete classification of this Act to the Code, see Short Title of 1968 Act note set out under  section 10101 of Title 34  and Tables.\nAnother  section 1084(b) of Pub. L. 105–34  amended sections 805, 807, 812, and 832 of this title.\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f13522(b) , substituted “paragraphs (2) and (3)” for “paragraph (2)”.\nSubsec. (a)(3).  Pub. L. 115–97, §\u202f13522(a) , added par. (3).\n2013—Subsec. (h)(1).  Pub. L. 112–239  inserted “,\u2000as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013” after “1968” in introductory provisions.\n2006—Subsec. (a)(1).  Pub. L. 109–280, §\u202f863(c)(1) , substituted “subsection (f), and subsection (j)” for “and subsection (f)”.\nSubsec. (j).  Pub. L. 109–280, §\u202f863(a) , added subsec. (j).\n2003—Subsec. (i).  Pub. L. 108–121, §\u202f110(b)(2) , inserted “or astronauts” after “victims” in heading.\nSubsec. (i)(4).  Pub. L. 108–121, §\u202f110(b)(1) , added par. (4).\n2002—Subsec. (i).  Pub. L. 107–134  added subsec. (i).\n1997—Subsec. (a)(2).  Pub. L. 105–34, §\u202f1084(b)(2) , inserted at end “The term ‘other amounts’ in the first sentence of this paragraph includes interest paid or accrued by the transferee on indebtedness with respect to such contract or any interest therein if such interest paid or accrued is not allowable as a deduction by reason of section 264(a)(4).”\nSubsec. (h).  Pub. L. 105–34, §\u202f1528(a) , added subsec. (h).\n1996—Subsec. (b).  Pub. L. 104–188, §\u202f1402(a) , struck out subsec. (b) which related to employees’ death benefits.\nSubsec. (c).  Pub. L. 104–188, §\u202f1402(b)(1) , substituted “subsection (a)” for “subsection (a) or (b)”.\nSubsec. (g).  Pub. L. 104–191  added subsec. (g).\n1986—Subsec. (d)(1).  Pub. L. 99–514, §\u202f1001(a) , amended second sentence generally, which prior to amendment read as follows: “There shall be excluded from the gross income of such beneficiary in the taxable year received—\n“(A) any amount determined by such proration, and\n“(B) in the case of the surviving spouse of the insured, that portion of the excess of the amounts received under one or more agreements specified in paragraph (2)(A) (whether or not payment of any part of such amounts is guaranteed by the insurer) over the amount determined in subparagraph (A) of this paragraph which is not greater than $1,000 with respect to any insured.”\nSubsec. (d)(2)(B).  Pub. L. 99–514, §\u202f1001(c)(2) , substituted “equal” for “is equal” in introductory provisions.\nSubsec. (d)(2)(B)(ii).  Pub. L. 99–514, §\u202f1001(b) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “as discounted on the basis of the interest rate and mortality tables used by the insurer in calculating payments under the agreement.”\nSubsec. (d)(3), (4).  Pub. L. 99–514, §\u202f1001(c)(1) , redesignated par. (4) as (3), and struck out former par. (3), “Surviving spouse”, which read as follows: “For purposes of this subsection, the term ‘surviving spouse’ means the spouse of the insured as of the date of death, including a spouse legally separated but not under a decree of absolute divorce.”\n1984—Subsec. (b)(3)(B).  Pub. L. 98–369, §\u202f713(e) , amended subpar. (B) generally, substituting “certain distributions” for “certain lump sum distributions” in heading, substituting “amount paid or distributed” for “lump sum distribution described in the second sentence of paragraph (2)(B)” in introductory text and adding cls. (i) and (ii).\nSubsec. (e).  Pub. L. 98–369, §\u202f421(b)(2) , repealed subsec. (e) relating to payments of alimony or of income of an estate or trust in case of divorce, etc.\nSubsec. (f).  Pub. L. 98–369, §\u202f221(b)(2)(B) , inserted “issued before  January 1, 1985 ” in heading.\nSubsec. (f)(1).  Pub. L. 98–369, §\u202f221(b)(2)(A) , inserted “issued before  January 1, 1985 ” in introductory text.\n1982—Subsec. (a)(1).  Pub. L. 97–248, §\u202f266(b) , substituted “,\u2000subsection (d), and subsection (f)” for “and in subsection (d)”.\nSubsec. (b)(3).  Pub. L. 97–248, §\u202f239 , amended par. (3) generally, substituting “Treatment of self-employed individuals” for “Self-employed individual not considered an employee” in heading, designating existing provisions as subparagraph (A) and, as so designated, adding heading and exception for subpar. (B), and adding subparagraph (B).\nSubsec. (f).  Pub. L. 97–248, §\u202f266(a) , added subsec. (f).\n1976—Subsec. (d)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(a)(16) , struck out subsec. (f) relating to effective date of section.\n1974—Subsec. (b)(2)(B).  Pub. L. 93–406, §\u202f2005(c)(15) , substituted “a lump sum distribution (as defined in section 402(e)(4)” for “total distributions payable (as defined in section 402(a)(3)) which are paid to a distributee within one taxable year of the distributee by reason of the employee’s death”.\nSubsec. (b)(2)(D).  Pub. L. 93–406, §\u202f2007(b)(3) , substituted “if the member or former member of the uniformed services by reason of whose death such annuity is payable” for “if the individual who made the election under such chapter”.\n1969—Subsec. (b)(2)(B)(iii).  Pub. L. 91–172  substituted references to section 170(b)(1)(A) (ii) and (vi), and to religious organizations, for references to section 503(b)(1), (2), or (3).\n1966—Subsec. (b)(2)(D).  Pub. L. 89–365  provided that par. (1) shall not apply in the case of an annuity under chapter 73 of title 10 if the individual who made the election under that chapter died after attaining retirement age.\n1962—Subsec. (b)(2)(B)(ii).  Pub. L. 87–792, §\u202f7(c)(1) , substituted “described in section 403(a)” for “which meets the requirements of paragraphs (3), (4), (5), and (6) of section 401(a)”.\nSubsec. (b)(3).  Pub. L. 87–792, §\u202f7(c)(2) , added par. (3).\n1958—Subsec. (b)(2)(B).  Pub. L. 85–866  substituted “This subparagraph shall not apply to total distributions payable (as defined in section 402(a)(3) which are paid to a distributee within one taxable year of the distributee by reason of the employee’s death—” for “(other than total distributions payable, as defined in section 402(a)(3), which are paid to distributee, by a stock bonus, pension, or profit-sharing trust described in section 401(a) which is exempt from tax under section 501(a), or under an annuity contract under a plan which meets the requirements of paragraphs (3), (4), (5), and (6) of section 401(a), within one taxable year of the distributee by reason of the employee’s death)”, and added cls. (i), (ii), and (iii).\nPub. L. 115–97, title I, §\u202f13522(c) ,  Dec. 22, 2017 ,  131 Stat. 2152 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers after  December 31, 2017 .”\nAmendment by  Pub. L. 112–239  effective  Jan. 2, 2013 , and applicable to matters pending on  Jan. 2, 2013 , or filed or accruing after that date, with certain exceptions, see  section 1086(d) of Pub. L. 112–239 , set out as a note under  section 10251 of Title 34 , Crime Control and Law Enforcement.\nPub. L. 109–280, title VIII, §\u202f863(d) ,  Aug. 17, 2006 ,  120 Stat. 1024 , provided that:  “The amendments made by this section [enacting  section 6039I of this title  and amending this section] shall apply to life insurance contracts issued after the date of the enactment of this Act [ Aug. 17, 2006 ], except for a contract issued after such date pursuant to an exchange described in section 1035 of the Internal Revenue Code of 1986 for a contract issued on or prior to that date. For purposes of the preceding sentence, any material increase in the death benefit or other material change shall cause the contract to be treated as a new contract except that, in the case of a master contract (within the meaning of section 264(f)(4)(E) of such Code), the addition of covered lives shall be treated as a new contract only with respect to such additional covered lives.”\nPub. L. 108–121, title I, §\u202f110(b)(3) ,  Nov. 11, 2003 ,  117 Stat. 1342 , provided that:  “The amendments made by this subsection [amending this section] shall apply to amounts paid after  December 31, 2002 , with respect to deaths occurring after such date.”\nPub. L. 107–134, title I, §\u202f102(b) ,  Jan. 23, 2002 ,  115 Stat. 2429 , provided that: \n “(1)   Effective date .— The amendment made by this section [amending this section] shall apply to taxable years ending before, on, or after  September 11, 2001 . \n \n “(2)   Waiver of limitations .— If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [ Jan. 23, 2002 ] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.”\nPub. L. 105–34, title X, §\u202f1084(d) ,  Aug. 5, 1997 ,  111 Stat. 955 , as amended by  Pub. L. 105–206, title VI, §\u202f6010 ( o )(3)(B),  July 22, 1998 ,  112 Stat. 816 , provided that:  “The amendments made by this section [amending this section and sections 264, 265, 805, 807, 812, and 832 of this title] shall apply to contracts issued after  June 8, 1997 , in taxable years ending after such date. For purposes of the preceding sentence, any material increase in the death benefit or other material change in the contract shall be treated as a new contract except that, in the case of a master contract (within the meaning of section 264(f)(4)(E) of the Internal Revenue Code of 1986), the addition of covered lives shall be treated as a new contract only with respect to such additional covered lives. For purposes of this subsection, an increase in the death benefit under a policy or contract issued in connection with a lapse described in section 501(d)(2) of the Health Insurance Portability and Accountability Act of 1996 [ Pub. L. 104–191 , set out as a note under  section 264 of this title ] shall not be treated as a new contract.”\nPub. L. 105–34, title XV, §\u202f1528(b) ,  Aug. 5, 1997 ,  111 Stat. 1075 , as amended by  Pub. L. 107–15, §\u202f2 ,  June 5, 2001 ,  115 Stat. 37 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts received in taxable years beginning after  December 31, 1996 , with respect to individuals dying after such date, and to amounts received in taxable years beginning after  December 31, 2001 , with respect to individuals dying on or before  December 31, 1996 .”\nPub. L. 104–191, title III, §\u202f331(b) ,  Aug. 21, 1996 ,  110 Stat. 2069 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts received after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1402(c) ,  Aug. 20, 1996 ,  110 Stat. 1790 , provided that:  “The amendments made by this section [amending this section and sections 406, 407, and 7701 of this title] shall apply with respect to decedents dying after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 99–514, title X, §\u202f1001(d) ,  Oct. 22, 1986 ,  100 Stat. 2387 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts received with respect to deaths occurring after the date of the enactment of this section [ Oct. 22, 1986 ] in taxable years ending after such date.”\nAmendment by  section 221(b)(2) of Pub. L. 98–369  effective  Jan. 1, 1984 , see  section 221(d)(4) of Pub. L. 98–369 , set out as an Effective Date note under  section 7702 of this title .\nAmendment by  section 421(b)(2) of Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have repeal apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f266(c)(1) ,  Sept. 3, 1982 ,  96 Stat. 550 , as amended by  Pub. L. 98–369, div. A, title II, §\u202f221(b)(1) ,  July 18, 1984 ,  98 Stat. 772 , provided that:  “The amendments made by this section [amending this section] shall apply to contracts entered into before  January 1, 1985 .”\nAmendment by  section 239 of Pub. L. 97–248  applicable to decedents dying after  Dec. 31, 1983 , see  section 241(b) of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title . Such amendment is applicable, in the case of amounts received under the plan of an S corporation, with respect to decedents dying after  Dec. 31, 1982 , notwithstanding  section 241(b) of Pub. L. 97–248 , see  section 6(b)(2) of Pub. L. 97–354 ,  Oct. 19, 1982 ,  96 Stat. 1697 , set out as a note under  section 1361 of this title .\nAmendment by  section 1901(a)(16) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1906(b)(13)(A) of Pub. L. 94–455  effective  Feb. 1, 1977 , see  section 1906(d)(1) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nAmendment by  section 2005(c)(15) of Pub. L. 93–406  applicable only with respect to distributions and payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  section 2007(b)(3) of Pub. L. 93–406  applicable to taxable years ending on or after  Sept. 21, 1972 , with respect to individuals dying on or after  Sept. 21, 1972 , see  section 2007(c) of Pub. L. 93–406 , set out as a note under  section 122 of this title .\nAmendment by  Pub. L. 91–172  effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by  Pub. L. 89–365  applicable with respect to individuals making an election under chapter 73 of Title 10 who died after  Dec. 31, 1965 , see  section 1(d) of Pub. L. 89–365 , set out as an Effective Date note under  section 122 of this title .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1957 , see  section 23(g) of Pub. L. 85–866 , set out as a note under  section 403 of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFlexible premium contracts issued during 1984 which meet requirements of  section 7702 of this title  treated as meeting requirements of subsec. (f) of this section, see  section 221(b)(3) of Pub. L. 98–369 , as added by  Pub. L. 99–514 , set out as a note under  section 7702 of this title .\nPub. L. 97–248, title II, §\u202f266(c)(2) , (3),  Sept. 3, 1982 ,  96 Stat. 550 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(13) ,  Jan. 12, 1983 ,  96 Stat. 2405 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(2)   Special rule for contracts entered into before  january 1, 1983 .— Any contract entered into before  January 1, 1983 , which meets the requirements of section 101(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] on the date which is 1 year after the date of the enactment of this Act [ Sept. 3, 1982 ] shall be treated as meeting the requirements of such section for any period before the date on which such contract meets such requirements. Any death benefits paid under a flexible premium life insurance contract (within the meaning of section 101(f)(3)(A) of such Code) before the date which is 1 year after such date of enactment [ Sept. 3, 1982 ] shall be excluded from gross income. \n \n “(3)   Special rule for certain contracts .— Any contract entered into before  January 1, 1983 , shall be treated as meeting the requirements of subparagraph (A) of section 101(f)(1) of such Code if such contract would meet such requirements if section 101(f)(2)(C) of such Code were applied by substituting ‘3 percent’ for ‘4 percent’.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.\nSubsection (a) shall not exclude from gross income any amount transferred by or for an employer to, or for the benefit of, an employee.\nFor provisions excluding certain employee achievement awards from gross income, see section 74(c).\nFor provisions excluding certain de minimis fringes from gross income, see section 132(e).\n1986—Subsec. (c).  Pub. L. 99–514  added subsec. (c).\nAmendment by  Pub. L. 99–514  applicable to prizes and awards granted after  Dec. 31, 1986 , see  section 151(c) of Pub. L. 99–514 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Except as provided in subsection (b), gross income does not include interest on any State or local bond.\nAny private activity bond which is not a qualified bond (within the meaning of section 141).\nAny arbitrage bond (within the meaning of section 148).\nAny bond unless such bond meets the applicable requirements of section 149.\nThe term “State or local bond” means an obligation of a State or political subdivision thereof.\nThe term “State” includes the District of Columbia and any possession of the United States.\n1988—Subsec. (b)(6)(N).  Pub. L. 100–647, §\u202f1013(c)(12)(A) , amended subpar. (N), as in effect on the day before the date of the enactment of  Pub. L. 99–514  [ Oct. 22, 1986 ], by redesignating cls. (ii) and (iii) as (iii) and (iv), respectively, and by striking out cl. (i) and inserting in lieu thereof the following new cls.:\n“(i)  In general .—Except as provided in clause (ii), this paragraph shall not apply to any obligation issued after  December 31, 1986 .\n“(ii)  Certain refundings .—This paragraph shall apply to any obligation (or series of obligations) issued to refund an obligation issued on or before  December 31, 1986 , if—\n“(I) the average maturity date of the issue of which the refunding obligation is a part is not later than the average maturity date of the obligations to be refunded by such issue,\n“(II) the amount of the refunding obligation does not exceed the outstanding amount of the refunded obligation, and\n“(III) the proceeds of the refunding obligation are used to redeem the refunded obligation not later than 90 days after the date of the issuance of the refunding obligation.\nFor purposes of subclause (I), average maturity shall be determined in accordance with subsection (b)(14)(B)(i).”\nSubsec. (c)(7).  Pub. L. 100–647, §\u202f1013(a)(34)(A) , amended par. (7), as in effect on the day before the date of the enactment of  Pub. L. 99–514  [ Oct. 22, 1986 ], by substituting “necessary” for “necessary”.\n1986— Pub. L. 99–514, §\u202f1301(a) , in amending section generally, substituted “Interest on State and local bonds” for “Interest on certain governmental obligations” in section catchline.\nSubsec. (a).  Pub. L. 99–514, §\u202f1301(a) , substituted “Exclusion” for “General rule” in heading and amended text generally. Prior to amendment, text read as follows: “Gross income does not include interest on—\n“(1) the obligations of a State, a Territory, or a possession of the United States, or any political subdivision of any of the foregoing, or of the District of Columbia; and\n“(2) qualified scholarship funding bonds.”\nSubsec. (b).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, substituted provision relating to exceptions for provision relating to industrial development bonds.\nSubsec. (b)(11).  Pub. L. 99–272  struck out par. (11) relating to pollution control facilities acquired by regional pollution control authorities.\nSubsec. (b)(13), (14)(A).  Pub. L. 99–514, §\u202f1871(b) , substituted “and (6)” for “(6), and (7)”.\nSubsec. (b)(16)(A).  Pub. L. 99–514, §\u202f1870 , substituted “clause (ii)” for “clause (i)”.\nSubsec. (b)(17)(A).  Pub. L. 99–514, §\u202f1871(b) , substituted “and (6)” for “(6), and (7)”.\nSubsec. (c).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, substituted provision relating to definitions for provision relating to arbitrage.\nSubsecs. (d) to (g).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsecs. (d) to (g) which related to certain irrigation dams, qualified scholarship funding bonds, certain federally guaranteed obligations, and qualified steam-generating or alcohol-producing facilities, respectively.\nSubsec. (h).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsec. (h) which provided that obligations must not be guaranteed.\nSubsec. (h)(2)(A).  Pub. L. 99–514, §\u202f1899A(2) , substituted “guaranteed” for “guaranted”.\nSubsec. (h)(5)(A).  Pub. L. 99–514, §\u202f1865(a) , struck out “the United States,” after “program of”.\nSubsecs. (i) to (k).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsecs. (i) to (k) which related to obligations of certain volunteer fire departments, provided that obligations must be in registered form to be tax-exempt, and required public approval for industrial development bonds, respectively.\nSubsec. ( l ).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsec. ( l ) which related to information reporting requirements for certain bonds.\nSubsec. ( l )(2)(F).  Pub. L. 99–514, §\u202f1864(d) , added subpar. (F) which read: “if such obligation is a private activity bond (as defined in subsection (n)(7)), such information as the Secretary may require for purposes of determining whether the requirements of subsection (n) are met with respect to such obligation.”\nSubsec. (m).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsec. (m) which related to obligations exempt other than under this title.\nSubsec. (m)(1).  Pub. L. 99–514, §\u202f1871(a)(1) , substituted “(j), (k), ( l ), (n), and ( o )” for “(k), ( l ), and (n)”.\nSubsec. (m)(3)(B).  Pub. L. 99–514, §\u202f1899A(3) , substituted “608(a)(6)(A)” for “608(6)(A)”.\nSubsec. (n).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsec. (n) which related to limitation on aggregate amount of private activity bonds issued during any calendar year.\nSubsec. (n)(6)(A), (B)(i).  Pub. L. 99–514, §\u202f1864(b) , substituted “governmental units or other authorities” for “governmental units”.\nSubsec. (n)(7)(C)(i).  Pub. L. 99–514, §\u202f1864(c) , substituted “all of the property to be financed by the obligation” for “the property described in such paragraph”.\nSubsec. (n)(10)(B).  Pub. L. 99–514, §\u202f1864(e) , substituted “identify project” for “specify project” in heading and “identify (with reasonable specificity) the project” for “specify the project” in text of subpar. (B)(i).\nSubsec. (n)(10)(D).  Pub. L. 99–514, §\u202f1864(e)(2) , substituted “any identification or specification” for “any specification”.\nSubsec. (n)(13).  Pub. L. 99–514, §\u202f1864(a)(1) , added par. (13).\nSubsec. ( o ).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsec. ( o ) relating to consumer loan bonds.\nPub. L. 99–514, §\u202f1869(a) , (b)(1), substituted “Private loan bonds” for “Consumer loan bonds” in subsection and par. (2) headings, “private loan bond” for “consumer loan bond” in text of pars. (1), (2)(A) and (B), and “subsection (c)(6)(H)(i)” for “subsection (c)(6)(G)(i)” in par. (2)(C)(ii).\nPub. L. 99–514, §\u202f1869(b)(2) , redesignated subsec. ( o ), relating to cross references, as (p).\nSubsec. (p).  Pub. L. 99–514, §\u202f1301(a) , in amending section generally, struck out subsec. (p) which related to cross references.\nPub. L. 99–514, §\u202f1869(b)(2) , redesignated former subsec. ( o ), relating to cross references, as (p).\nSubsec. (p)(4).  Pub. L. 99–514, §\u202f1899A(4) , substituted “ October 27, 1949  ( 48 U.S.C. 1403 )” for “ October 27, 1919  ( 48 U.S.C. 1403 )”.\n1984—Subsec. (b)(4).  Pub. L. 98–369, §\u202f628(e) , inserted “For purposes of subparagraph (A), any property shall not be treated as failing to be residential rental property merely because part of the building in which such property is located is used for purposes other than residential rental purposes.”\nSubsec. (b)(6)(F)(iv).  Pub. L. 98–369, §\u202f474(r)(4) , substituted “section 30(b)(2)(A)” for “section 44F(b)(2)(A)”.\nSubsec. (b)(6)(N).  Pub. L. 98–369, §\u202f630 , designated existing provisions as cl. (i) and added cls. (ii) and (iii).\nSubsec. (b)(6)(P).  Pub. L. 98–369, §\u202f628(c) , added subpar. (P).\nSubsec. (b)(7).  Pub. L. 98–369, §\u202f628(g) , repealed par. (7) which related to advance refunding of qualified public facilities.\nSubsec. (b)(13).  Pub. L. 98–369, §\u202f628(d) , inserted “For purposes of this paragraph— (A) a partnership and each of its partners (and their spouses and minor children) shall be treated as related persons, and (B) an S corporation and each of its shareholders (and their spouses and minor children) shall be treated as related persons.”\nSubsec. (b)(15).  Pub. L. 98–369, §\u202f623 , added par. (15).\nSubsec. (b)(16) to (18).  Pub. L. 98–369, §\u202f627 , added pars. (16) to (18).\nSubsec. (c).  Pub. L. 98–369, §\u202f624(b)(2) , struck out “bonds” after “Arbitrage” in heading.\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f624(b)(3) , inserted “to arbitrage bonds” in heading.\nSubsec. (c)(6), (7).  Pub. L. 98–369, §\u202f624(a) , added par. (6) and redesignated former par. (6) as (7).\nSubsec. (h).  Pub. L. 98–369, §\u202f622 , amended subsec. (h) generally, in par. (1) substituting provisions that obligations are not included in the section if they are federally guaranteed for provisions which excluded obligations guaranteed, in whole or part, by the U.S. under a program to conserve energy, or under other Federal or State programs, in par. (2) substituting provisions defining “federally guaranteed” for provisions setting forth obligations to which this subsection applies, and adding pars. (3) to (5).\nSubsec. (m)(1).  Pub. L. 98–369, §\u202f628(a)(1) , inserted “In the case of an obligation issued after  December 31, 1983 , such obligation shall not be treated as described in this paragraph unless the appropriate requirements of subsections (b), (c), (h), (k), ( l ), and (n) of this section and section 103A are met with respect to such obligation. For purposes of applying such requirements, a possession of the United States shall be treated as a State; except that clause (ii) of subsection (n)(4)(A) shall not apply.”\nSubsec. (m)(2)(B).  Pub. L. 98–369, §\u202f628(a)(2) , substituted “is exempt from tax under this title without regard to any provision of law which is not contained in this title and which is not contained in a revenue Act” for “is exempt from taxation under any provision of this title”.\nSubsec. (m)(3).  Pub. L. 98–369, §\u202f628(a)(3) , added par. (3).\nSubsec. (n).  Pub. L. 98–369, §\u202f621 , added subsec. (n). Former subsec. (n), relating to cross references, redesignated ( o ).\nSubsec. ( o ).  Pub. L. 98–369, §\u202f626(a) , added subsec. ( o ) relating to consumer loan bonds.\nPub. L. 98–369, §\u202f621 , redesignated subsec. (n), relating to cross references, as ( o ).\n1983—Subsec. (m).  Pub. L. 97–424, §\u202f547(a) , added subsec. (m). Former subsec. (m) redesignated (n).\nPub. L. 97–473  amended subsec. (m) generally, adding pars. (1) and (2), redesignating former pars. (1) to (3) as (3) to (5), respectively, and striking out par. (24) which had provided reference regarding exempt-interest dividends to section 852(b)(5)(B.) See  section 722(b) of Pub. L. 98–369 , set out as a note below.\nSubsec. (n).  Pub. L. 97–424, §\u202f547(a) , redesignated former subsec. (m), relating to cross references, as (n).\n1982—Subsec. (b)(2).  Pub. L. 97–248, §\u202f215(b)(2) , substituted “For purposes of this section” for “For purposes of this subsection”.\nSubsec. (b)(4).  Pub. L. 97–248 , §§\u202f217(a)(1), (b), 221(a), (c)(1), 310(c)(1), in subpar. (A) substituted “if at all times during the qualified project period” for “if each obligation issued pursuant to the issue is in registered form and if” after “residential rental property”, and struck out “(within the meaning of section 167(k)(3)(B))” after “low or moderate income”, added subpar. (J), struck out provision that for purposes of subpar. (A), “targeted area project” meant a project located in a qualified census tract (within the meaning of section 103A(k)(2)) or an area of chronic economic distress (within the meaning of section 103A(k)(3)) and, in last sentence, substituted “electric energy or gas from” for “electric energy from”.\nSubsec. (b)(6)(C).  Pub. L. 97–248, §\u202f217(a)(3) , substituted “paragraph (13)” for “paragraph (7)”.\nSubsec. (b)(6)(F)(iv).  Pub. L. 97–248, §\u202f214(d) , added cl. (iv).\nSubsec. (b)(6)(K) to (O).  Pub. L. 97–248, §\u202f214(a) –(c), (e), added subpars. (K) to (O).\nSubsec. (b)(9)(A).  Pub. L. 97–248, §\u202f217(c) , inserted “ferry,” after “rail car” in provisions preceding cl. (i), and in cl. (ii), inserted “(or, in the case of a ferry, mass transportation services)” after “mass commuting services”.\nSubsec. (b)(10).  Pub. L. 97–248, §\u202f217(a)(2) , added par. (10). Former par. (10) redesignated (13).\nSubsec. (b)(11).  Pub. L. 97–248, §\u202f217(d) , added par. (11).\nSubsec. (b)(12).  Pub. L. 97–248, §\u202f221(b) , added par. (12). [Provisions of par. (12)(A) were formerly contained, as undesignated provisions, in par. (4).]\nSubsec. (b)(13).  Pub. L. 97–248, §\u202f217(a)(2) , redesignated former par. (10) as (13).\nSubsec. (b)(14).  Pub. L. 97–248, §\u202f219(a) , added par. (14).\nSubsec. (h).  Pub. L. 97–248, §\u202f310(c)(2) , substituted “must not be guaranteed or subsidized” for “must be in registered form and not guaranteed or subsidized” in heading, and in par. (1) struck out subpar. (A) reading “such obligation is not issued in registered form”, and redesignated subpars. (B) and (C) as (A) and (B), respectively.\nSubsec. (j).  Pub. L. 97–248, §\u202f310(b)(1) , added subsec. (j). Former subsec. (j), relating to cross references, redesignated (m).\nSubsec. (k).  Pub. L. 97–248, §\u202f215(a) , added subsec. (k).\nSubsec. ( l ).  Pub. L. 97–248, §\u202f215(b)(1) , added subsec. ( l ).\nSubsec. (m).  Pub. L. 97–248 , §§\u202f215(a), (b)(1), 310(b)(1), redesignated former subsec. (j), relating to cross references, as (m).\n1981—Subsec. (b)(4)(I).  Pub. L. 97–34, §\u202f811(a) , added subpar. (I).\nSubsec. (b)(9), (10).  Pub. L. 97–34, §\u202f811(b) , added par. (9) and redesignated former par. (9) as (10).\nSubsecs. (i), (j).  Pub. L. 97–34, §\u202f812(a) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1980—Subsec. (b)(4).  Pub. L. 96–499, §\u202f1103(b) , inserted before last sentence provisions defining “targeted area project” for purposes of subpar. (A).\nSubsec. (b)(4)(A).  Pub. L. 96–499, §\u202f1103(a) , substituted provisions relating to low or moderate income residential rental property for provisions relating to residential real property for family units.\nSubsec. (b)(4)(H).  Pub. L. 96–223, §\u202f242(a)(1) , added subpar. (H).\nSubsec. (b)(6)(J).  Pub. L. 96–499, §\u202f1103(c) , added subpar. (J).\nSubsec. (b)(8), (9).  Pub. L. 96–223, §\u202f242(a)(2) , added par. (8) and redesignated former par. (8) as (9).\nSubsec. (c)(5).  Pub. L. 96–222, §\u202f107(a)(3)(C) , amended the directory language of  Pub. L. 96–500, §\u202f703(q)(1) . See 1978 Amendment note below for subsec. (c)(5).\nSubsec. (g).  Pub. L. 96–223, §\u202f241(a) , added subsec. (g). Former subsec. (g) redesignated (i).\nSubsec. (h).  Pub. L. 96–223, §\u202f244(a) , added subsec. (h).\nSubsec. (i).  Pub. L. 96–223 , §§\u202f241(a), 244(a), redesignated former subsec. (g) as (i).\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f703(j)(1)(A) , substituted “subsection (a)(1) or (2)” for “subsection (a)(1)” in heading.\nSubsec. (b)(4).  Pub. L. 95–600 , §§\u202f332(a), 333(a), in subpar. (G)(i) inserted reference to electric utility, industrial, agricultural, or commercial users and added subpar. (G)(ii) and provision following subpar. (G)(ii) relating to the local furnishing of electric energy.\nSubsec. (b)(6)(D).  Pub. L. 95–600, §\u202f331(a) , substituted in heading and cl. (i) “$10,000,000” for “$5,000,000”.\nSubsec. (b)(6)(I).  Pub. L. 95–600, §\u202f331(b) , added subpar. (I).\nSubsec. (b)(7), (8).  Pub. L. 95–600, §\u202f334(a) , (b), added par. (7), redesignated former par. (7) as (8) and, as so redesignated, substituted “(6), and (7)” for “and (6)”.\nSubsec. (c)(1).  Pub. L. 95–600, §\u202f703(j)(1)(B) , substituted in heading and text “(a)(1) or (2)” for “(a)(1) or (4)”.\nSubsec. (c)(2)(A).  Pub. L. 95–600, §\u202f703(j)(1)(C) , substituted “subsection (a)(1) or (2)” for “subsection (a)(1) or (2) or (4)”.\nSubsec. (c)(5).  Pub. L. 95–600, §\u202f703(j)(1)(D) , (q)(1), as amended by  Pub. L. 96–222, §\u202f107(a)(3)(C) , substituted “section 438 of the Higher Education Act of 1965” for “section 2 of the Emergency Insured Student Loan Act of 1969” and “paragraph (2)(A)” for “subsection (d)(2)(A)”.\nSubsec. (d).  Pub. L. 95–600, §\u202f703(j)(1)(E) , substituted “subsection (b)(4)(G)” for “subsection (c)(4)(G)”.\nSubsec. (e).  Pub. L. 95–339  redesignated second subsec. (e), relating to cross references, as (g).\nSubsec. (f).  Pub. L. 95–339  added subsec. (f).\nSubsec. (g).  Pub. L. 95–339  redesignated second subsec. (e), relating to cross references, as (g).\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1901(a)(17)(A), 2105(a), added par. (2) relating to qualified scholarship funding bonds. Former pars. (2) and (3), relating to obligations of the United States and to the obligations of corporations organized under an Act of Congress, were struck out.\nSubsec. (b).  Pub. L. 94–455, §\u202f1901(a)(17)(B) , (C), redesignated subsec. (c) as (b) and in par. (1) of subsec. (b) as so redesignated substituted “subsection (a)(1) or (2)” for “subsection (a)(1)”. Former subsec. (b), which created an exception to the rule that gross income did not include interest on obligations of the United States, by providing that the exception did not apply to obligations of the United States (with specified exceptions) unless under the authorizing Acts such interest is wholly exempt from the taxes imposed by this subtitle, was struck out.\nSubsec. (c).  Pub. L. 94–455 , §§\u202f1901(a)(17)(B), (D), (b)(8)(B), 1906(b)(13)(A), 2105(c), redesignated subsec. (d) as (c) and, in subsec. (c) as so redesignated, substituted “(a)(1) or (4)” for “(a)(1)” in par. (1) and “(a)(1) or (2) or (4)” for “(a)(1)” in par. (2)(A), substituted “educational organization described in section 170(b)(1)(A)(ii)” for “educational institution (within the meaning of section 151(e)(4))” in par. (3)(A), added par. (5), redesignated former par. (5) as (6), and in par. (6) as so redesignated substituted “Secretary” for “Secretary or his delegate”. Former subsec. (c) redesignated (b).\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(a)(17)(B) , redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).\nSubsec. (e).  Pub. L. 94–455 , §§\u202f1901(a)(17)(B), (E), 2105(b), 2137(d), added subsec. (e) relating to qualified scholarship funding bonds, redesignated former subsec. (f) relating to cross references as a second subsec. (e), reduced the number of cross references in subsec. (e) as so redesignated from twenty-three (which made reference to various obligations of the United States and of corporations organized under Acts of Congress) to three, relating, respectively, to Puerto Rican bonds, Virgin Islands insular and municipal bonds, and certain obligations issued under title I of the Housing Act of 1949, and inserted a fourth cross reference, designated as par. (24) relating to the treatment of exempt-interest dividends. Former subsec. (e) redesignated (d).\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(a)(17)(B) , redesignated subsec. (f), relating to cross references, as (e).\n1975—Subsecs. (e), (f).  Pub. L. 94–182  and  Pub. L. 94–164  made identical amendments, adding subsec. (e) and redesignating former subsec. (e) as (f).\n1971—Subsec. (c)(4)(E).  Pub. L. 92–178, §\u202f315(a)(1) , substituted “energy or gas,” for “energy, gas, or water or”.\nSubsec. (c)(4)(F).  Pub. L. 92–178, §\u202f315(a)(2) , substituted “,\u2000or” for a period.\nSubsec. (c)(4)(G).  Pub. L. 92–178, §\u202f315(a)(3) , added subpar. (G).\nSubsec. (c)(6)(F)(iii).  Pub. L. 92–178, §\u202f315(b) , substituted “$1,000,000” for “$250,000”.\n1969—Subsecs. (d), (e).  Pub. L. 91–172  added subsec. (d) and redesignated former subsec. (d) as (e).\n1968—Subsec. (c).  Pub. L. 90–364  added subsec. (c). Former subsec. (c) redesignated (d).\nSubsec. (c)(6)(D) to (H).  Pub. L. 90–634  added subpars. (D) to (H).\nSubsec. (d).  Pub. L. 90–364  redesignated former subsec. (c) as (d).\nPub. L. 100–647, title I, §\u202f1013(a)(34)(B) ,  Nov. 10, 1988 ,  102 Stat. 3544 , provided that:  “Subparagraph (A) [amending this section] shall apply to obligations sold after  May 2, 1978 , and to which Treasury regulation section 1.103–13 (1979) was provided to apply.”\nAmendment by  section 1301(a) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by sections 1864(b)–(e), 1865(a), 1869(a), (b), 1870, and 1871(b) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1864(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2885 , provided that: \n “(A)  Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Oct. 22, 1986 ] in taxable years ending after such date. \n \n “(B)  At the election of the issuer (made at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe), the amendment made by paragraph (1) shall apply to any obligation issued on or before the date of the enactment of this Act.”\nPub. L. 99–514, title XVIII, §\u202f1871(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2891 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to obligations issued after  March 28, 1985 , in taxable years ending after such date.”\nAmendment by  section 474(r)(4) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title VI, §\u202f624(c) ,  July 18, 1984 ,  98 Stat. 924 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1867(a) ,  Oct. 22, 1986 ,  100 Stat. 2888 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 103A of this title ] shall apply with respect to bonds issued after  December 31, 1984 . \n \n “(2)   Exception .— The amendments made by this section shall not apply to obligations issued for the Essex County New Jersey Resource Recovery Project authorized by the Port Authority of New York and New Jersey on  November 10, 1983 , as part of an agreement approved by Essex County, New Jersey, on  July 7, 1981 , and approved by the State of New Jersey on  December 31, 1981 . The aggregate face amount of bonds to which this paragraph applies shall not exceed $350,000,000.”\nPub. L. 98–369, div. A, title VI, §\u202f626(b) ,  July 18, 1984 ,  98 Stat. 927 , as amended by  Pub. L. 99–514, §\u202f2 , title XIII, §\u202f1317(22), title XVIII, §\u202f1869(c)(5),  Oct. 22, 1986 ,  100 Stat. 2095 , 2698, 2890;  Pub. L. 100–647, title I, §\u202f1013(g)(24) ,  Nov. 10, 1988 ,  102 Stat. 3554 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection the amendment made by subsection (a) [amending this section] shall apply to obligations issued after the date of enactment of this Act [ July 18, 1984 ]. \n \n “(2)   Exceptions for certain student loan programs.— “(A)   In general .— The amendments made by this section [amending this section] shall not apply to obligations issued by a program described in the following table to the extent the aggregate face amount of such obligations does not exceed the amount of allowable obligations specified in the following table with respect to such program: \n \n \n \n \n \n \n Program Amount of Allowable Obligations \n \n \n Colorado Student Obligation Bond Authority $60 million \n Connecticut Higher Education Supplementary Loan Authority $15.5 million \n District of Columbia $50 million \n Illinois Higher Education Authority $70 million \n State of Iowa $16 million \n Louisiana Public Facilities Authority $75 million \n Maine Health and Higher Education Facilities Authority $5 million \n Maryland Higher Education Supplemental Loan Program $24 million \n Massachusetts College Student Loan Authority $90 million \n Minnesota Higher Education Coordinating Board $60 million \n New Hampshire Higher Education and Health Facilities Authority $39 million \n New York Dormitory Authority $120 million \n Pennsylvania Higher Education Assistance Agency $300 million \n Georgia Private Colleges and University Authority $31 million \n Wisconsin State Building Commission $60 million \n South Dakota Health and Educational Facilities Authority $6 million \n \n \n \n \n “(B)   Pennsylvania higher education assistance agency .— Subparagraph (A) shall apply to obligations issued by the Pennsylvania Higher Education Assistance Agency only if such obligations are issued solely for the purpose of refunding student loan bonds outstanding on  March 15, 1984 . \n \n \n “(3)   Certain tax-exempt mortgage subsidy bonds .— For purposes of applying section 103( o ) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the term ‘consumer loan bond’ shall not include any mortgage subsidy bond (within the meaning of section 103A(b) of such Code) to which the amendments made by section 1102 of the Mortgage Subsidy Bond Tax Act of 1980 [enacting  section 103A of this title ] do not apply. \n \n “(4)   Refunding exception .— The amendments made by this section [amending this section] shall not apply to any obligation or series of obligations the proceeds of which are used exclusively to refund obligations issued before  March 15, 1984 , except that— “(A)  the amount of the refunding obligations may not exceed 101 percent of the aggregate face amount of the refunded obligations, and \n \n “(B)  the maturity date of any refunding obligation may not be later than the date which is 17 years after the date on which the refunded obligation was issued (or, in the case of a series of refundings, the date on which the original obligation was issued). \n \n \n “(5)   Exception for certain established programs .— The amendments made by this section [amending this section] shall not apply to any obligation substantially all of the proceeds of which are used to carry out a program established under State law which has been in effect in substantially the same form during the 30-year period ending on the date of enactment of this Act [ July 18, 1984 ], but only if such proceeds are used to make loans or to fund similar obligations— “(A)  in the same manner in which, \n \n “(B)  in the same (or lesser) amount per participant, and \n \n “(C)  for the same purposes for which, \n \n\n such program was operated on  March 15, 1984 . This subparagraph shall not apply to obligations issued on or after  March 15, 1987 . \n \n “(6)   Certain bonds for renewable energy property .— The amendments made by this section [amending this section] shall not apply to any obligations described in section 243 of the Crude Oil Windfall Profit Tax Act of 1980 [ Pub. L. 96–223 , set out as a note below]. \n \n “(7)   Exception for certain downtown redevelopment project .— The amendments made by this section [amending this section] shall not apply to any obligation which is issued as part of an issue 95 percent or more of the proceeds of which are to be used to provide a project to acquire and redevelop a downtown area if— “(A)  on  August 15, 1985 , a downtown redevelopment authority adopted a resolution to issue obligations for such project, \n \n “(B)  before  September 26, 1985 , the city expended, or entered into binding contracts to expend, more than $10,000,000 in connection with such project, and \n \n “(C)  the State supreme court issued a ruling regarding the proposed financing structure for such project on  December 11, 1985 . \n \n\n The aggregate face amount of obligations to which this paragraph applies shall not exceed $85,000,000 and such obligations must be issued before  January 1, 1992 .”\nPub. L. 98–369, div. A, title VI, §\u202f631 ,  July 18, 1984 ,  98 Stat. 934 , as amended by  Pub. L. 99–514, §\u202f2 , title XIII, §§\u202f1316(j), 1317(43), title XVIII, §\u202f1872(a)–(c)(1),  Oct. 22, 1986 ,  100 Stat. 2095 , 2670, 2708, 2891, 2892;  Pub. L. 100–647, title I, §\u202f1013(f)(8) , (g)(40),  Nov. 10, 1988 ,  102 Stat. 3549 , 3557, provided that: \n “(a)   Private Activity Bond Cap.— “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by section 621 [amending this section] shall apply to obligations issued after  December 31, 1983 . \n \n “(2)   Inducement resolution before  june 19, 1984 .— The amendment made by section 621 shall not apply to any issue of obligations if— “(A)  there was an inducement resolution (or other comparable preliminary approval) for the issue before  June 19, 1984 , and \n \n “(B)  the issue is issued before  January 1, 1985 . \n \n \n “(3)   Certain projects preliminarily approved before  october 19, 1983 , given approval .— If— “(A)  there was an inducement resolution (or other comparable preliminary approval) for a project before  October 19, 1983 , by any issuing authority, \n \n “(B)  a substantial user of such project notifies the issuing authority within 30 days after the date of the enactment of this Act [ July 18, 1984 ] that it intends to claim its rights under this paragraph, and \n \n “(C)  construction of such project began before  October 19, 1983 , or the substantial user was under a binding contract on such date to incur significant expenditures with respect to such project, \n \n\n such issuing authority shall allocate its share of the limitation under section 103(n) of such Code for the calendar year during which the obligations were to be issued pursuant to such resolution (or other approval) first to such project. If the amount of obligations required by all projects which meet the requirements of the preceding sentence exceeds the issuing authority’s share of the limitation under section 103(n) of such Code, priority under the preceding sentence shall be provided first to those projects for which substantial expenditures were incurred before  October 19, 1983 . If any issuing authority fails to meet the requirements of this paragraph, the limitation under section 103(n) of such Code for the issuing authority for the calendar year following such failure shall be reduced by the amount of obligations with respect to which such failure occurred. \n \n “(3) [(4)]   Exception for certain bonds for a convention center and resource recovery project .— In the case of any city, if— “(A)  the city council of such city authorized a feasibility study for a convention center on  June 10, 1982 , and \n \n “(B)  on  November 4, 1983 , a municipal authority acting for such city accepted a proposal for the construction of a facility that is capable of generating steam and electricity through the combustion of municipal waste, \n \n\n the amendment made by section 621 shall not apply to any issue, issued during 1984, 1985, 1986, or 1987 and substantially all of the proceeds of which are to be used to finance the convention center (or access ramps and parking facilities therefor) described in subparagraph (A) or the facility described in subparagraph (B). \n \n \n “(b)   Property Financed With Tax-Exempt Bonds Required To Be Depreciated on Straight-Line Basis.— “(1)   In general .— Except as otherwise provided in this section, the amendments made by section 628(b) [amending  section 168 of this title ] shall apply to property placed in service after  December 31, 1983 , to the extent such property is financed by the proceeds of an obligation (including a refunding obligation) issued after  October 18, 1983 . \n \n “(2)   Exceptions.— “(A)   Construction or binding agreement .— The amendments made by section 628(b) shall not apply with respect to facilities— “(i)  the original use of which commences with the taxpayer and the construction, reconstruction, or rehabilitation of which began before  October 19, 1983 , or \n \n “(ii)  with respect to which a binding contract to incur significant expenditures was entered into before  October 19, 1983 . \n \n \n “(B)   Refunding.— “(i)   In general .— Except as provided in clause (ii), in the case of property placed in service after  December 31, 1983 , which is financed by the proceeds of an obligation which is issued solely to refund another obligation which was issued before  October 19, 1983 , the amendments made by section 628(b) shall apply only with respect to an amount equal to the basis in such property which has not been recovered before the date such refunded obligation is issued. \n \n “(ii)   Significant expenditures .— In the case of facilities the original use of which commences with the taxpayer and with respect to which significant expenditures are made before  January 1, 1984 , the amendments made by section 628(b) shall not apply with respect to such facilities to the extent such facilities are financed by the proceeds of an obligation issued solely to refund another obligation which was issued before  October 19, 1983 . \n \n \n “(C)   Facilities .— In the case of an inducement resolution or other comparable preliminary approval adopted by an issuing authority before  October 19, 1983 , for purposes of applying subparagraphs (A)(i) and (B)(ii) with respect to obligations described in such resolution, the term ‘facilities’ means the facilities described in such resolution. \n \n \n \n “(c)   Other Provisions Relating to Tax-Exempt Bonds.— “(1)   In general .— Except as otherwise provided in this subtitle, the amendments made by sections 622, 623, 627, and 628(c), (d), and (e) (and the provisions of sections 625(c), 628(f), and 629(b)) [amending this section and enacting provisions set out as notes under this section] shall apply to obligations issued after  December 31, 1983 . \n \n “(2)   Obligations invested in federally insured deposits .— Notwithstanding any other provision of this section, clause (ii) of section 103(h)(2)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this subtitle) shall apply to obligations issued after  April 14, 1983 ; except that such clause shall not apply to any obligation issued pursuant to a binding contract in effect on  March 4, 1983 . \n \n “(3)   Exceptions.— “(A)   Construction or binding agreement .— The amendments (and provisions) referred to in paragraph (1) shall not apply to obligations with respect to facilities— “(i)  the original use of which commences with the taxpayer and the construction, reconstruction, or rehabilitation of which began before  October 19, 1983 , and was completed on or after such date, \n \n “(ii)  the original use of which commences with the taxpayer and with respect to which a binding contract to incur significant expenditures for construction, reconstruction, or rehabilitation was entered into before  October 19, 1983 , and some of such expenditures are incurred on or after such date, or \n \n “(iii)  acquired after  October 19, 1983 , pursuant to a binding contract entered into on or before such date. \n \n \n “(B)   Facilities .— Subparagraph (C) of subsection (b)(2) shall apply for purposes of subparagraph (A) of this paragraph. \n \n “(C)   Exception .— Subparagraph (A) shall not apply with respect to the amendment made by section 628(e) and the provisions of sections 628(f) and 629(b) [amending this section and enacting provisions set out as notes under this section]. \n \n \n “(4)   Repeal of advance refunding of qualified public facilities .— The amendment made by section 628(g) [amending this section] shall apply to refunding obligations issued after the date of the enactment of this Act [ July 18, 1984 ]; except that if substantially all the proceeds of the refunded issue were used to provide airports or docks, such amendment shall only apply to refunding obligations issued after  December 31, 1984 . In the case of refunding obligations not to exceed $100,000,000 issued after  October 21, 1986 , by Dade County, Florida, for the purpose of advance refunding its Aviation Revenue Bonds (Series J), the first sentence of this paragraph shall be applied by substituting ‘the date which is 1 year after the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988 [ Nov. 10, 1988 ]’ for ‘ December 31, 1984 ’ and the amendments made by section 1301 of the Tax Reform Act of 1986 [ section 1301 of Pub. L. 99–514 , enacting sections 141 to 150 and 7703 of this title, amending this section and sections 2, 22, 25, 32, 86, 105, 152, 153, 163, 194, 269A, 414, 879, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title, repealing  section 103A of this title , enacting provisions set out as notes under sections 141 and 148 of this title, and amending provisions set out as a note under  section 103A of this title ] shall not apply. In the case of refunding obligations not exceeding $100,000,000 issued by the Alabama State Docks Department, the first sentence of this paragraph shall be applied by substituting ‘ December 31, 1987 ’ for ‘ December 31, 1984 ’ and the Internal Revenue Code of 1986 shall be applied without regard to [former] section 149(d)(2)..[sic] \n \n “(5)   Special rule for health club facilities .— In the case of any health club facility, with respect to the amendment made by section 627(c) [amending this section]— “(A)  paragraph (1) shall be applied by substituting ‘ April 12, 1984 ’ for ‘ December 31, 1983 ’, and \n \n “(B)  paragraph (3) shall be applied by substituting ‘ April 13, 1984 ’ for ‘ October 19, 1983 ’ each place it appears. \n \n \n \n “(d)   Provisions of This Subtitle Not To Apply to Certain Property .— The amendments made by this subtitle [sections 621–632 of  Pub. L. 98–369 , amending this section and sections 103A and 168 of this title and enacting provisions set out as notes under this section] shall not apply to any property (and shall not apply to obligations issued to finance such property) if such property is described in any of the following paragraphs: “(1)  Any property described in paragraph (5), (6), or (7) of section 31(g) of this Act [set out as an Effective Date of 1984 Amendment note under  section 168 of this title ]. \n \n “(2)  Any property described in paragraph (4), (8), or (17) of section 31(g) of this Act [set out as an Effective Date of 1984 Amendment note under  section 168 of this title ] but only if the obligation is issued before  January 1, 1985 , and only if before  June 19, 1984 , the issuer had evidenced an intent to issue obligations exempt from taxation under the Internal Revenue Code of 1986 in connection with such property. \n \n “(3)  Any property described in paragraph (3) of section 216(b) of the Tax Equity and Fiscal Responsibility Act of 1982 [set out as an Effective Date of 1982 Amendment note under  section 168 of this title ]. \n \n “(4)  Any solid waste disposal facility described in section 103(b)(4)(E) of the Internal Revenue Code of 1986 if— “(A)  a State public authority created pursuant to State legislation which took effect on  June 18, 1973 , took formal action before  October 19, 1983 , to commit development funds for such facility. \n \n “(B)  such authority issues obligations for any such facility before  January 1, 1987 , and \n \n “(C)  expenditures have been made for the development of any such facility before  October 19, 1983 . \n \n \n “(5)  Any solid waste disposal facility described in section 103(b)(4)(E) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] if— “(A)  a city government, by resolutions adopted on  April 10, 1980 , and  December 27, 1982 , took formal action to authorize the submission of a proposal for a feasibility study for such facility and to authorize the presentation to the Department of the Army (U.S. Army Missile Command) of a proposed agreement to jointly pursue construction and operation of such facility, \n \n “(B)  such city government (or a public authority on its behalf) issues obligations for such facility before  January 1, 1988 , and \n \n “(C)  expenditures have been made for the development of such facility before  October 19, 1983 . Notwithstanding the foregoing provisions of this subsection, the amendments made by section 624 [amending sections 103 and 103A of this title and enacting provisions set out as a note under this section] (relating to arbitrage) shall apply to obligations issued to finance property described in paragraph (5). \n \n \n \n “(e)   Determination of Significant Expenditure.— “(1)   In general .— For purposes of this section, the term ‘significant expenditures’ means expenditures which equal or exceed the lesser of— “(A)  $15,000,000, or \n \n “(B)  20 percent of the estimated cost of the facilities. \n \n \n “(2)   Certain grants treated as expenditures .— For purposes of paragraph (1), the amount of any UDAG grant preliminarily approved on  May 5, 1981 , or  April 4, 1983 , shall be treated as an expenditure with respect to the facility for which such grant was so approved. \n \n \n “(f)   Exceptions for Certain Other Amendments .— If— “(1)  there was an inducement resolution (or other comparable preliminary approval) for an issue before  June 19, 1984 , by any issuing authority, and \n \n “(2)  such issue is issued before  January 1, 1985 , the following amendments shall not apply: “(A)  the amendments made by section 623 [amending this section], \n \n “(B)  the amendments made by subsections (a) and (b) of section 627 [amending this section] (except to the extent such amendments relate to farm land), \n \n “(C)  in the case of a race track, the amendment made by section 627(c) [amending this section], and \n \n “(D)  the amendments made by section 628(c) [amending this section].”\n[ Section 1872(a)(2)(B) of Pub. L. 99–514  provided that the amendment of  section 631(c)(3) of Pub. L. 98–369 , set out above, made by  section 1872(a)(2)(B) of Pub. L. 99–514  is effective with respect to obligations issued after  Mar. 28, 1985 .]\nFor effective date of amendment by  Pub. L. 97–473 , see  section 204(2) of Pub. L. 97–473 , set out as an Effective Date note under  section 7871 of this title .\nPub. L. 97–248, title II, §\u202f214(f) ,  Sept. 3, 1982 ,  96 Stat. 468 , provided that: \n “(1)   Composite issues; small issue exemption .— The amendments made by subsections (a) and (b) [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Sept. 3, 1982 ]. \n \n “(2)   Termination .— The amendment made by subsection (c) [amending this section] shall take effect on the date of the enactment of this Act [ Sept. 3, 1982 ]. \n \n “(3)   Research expenditures .— The amendment made by subsection (d) [amending this section] shall apply with respect to expenditures made after the date of the enactment of this Act [ Sept. 3, 1982 ]. \n \n “(4)   Certain facilities .— The amendment made by subsection (e) [amending this section] shall apply to obligations issued after  December 31, 1982 .”\nPub. L. 97–248, title II, §\u202f215(c) ,  Sept. 3, 1982 ,  96 Stat. 470 , provided that: \n “(1)   Public approval .— The amendment made by subsection (a) [amending this section] shall apply to obligations issued after  December 31, 1982 , other than obligations issued solely to refund any obligation which— “(A)  was issued before  July 1, 1982 , and \n \n “(B)  has a maturity which does not exceed 3 years. \n \n \n “(2)   Information reporting .— The amendments made by subsection (b) [amending this section] shall apply to obligations issued after  December 31, 1982  (including any obligation issued to refund an obligation issued before such date).”\nPub. L. 97–248, title II, §\u202f217(e) ,  Sept. 3, 1982 ,  96 Stat. 474 , as amended by  Pub. L. 98–369, div. A, title VII, §\u202f712(h) ,  July 18, 1984 ,  98 Stat. 947 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Sept. 3, 1982 ]. For purposes of applying section 168(f)(8)(D)(v) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the amendments made by subsection (c) [amending this section] shall apply to agreements entered into after the date of the enactment of this Act.”\nPub. L. 97–248, title II, §\u202f219(b) ,  Sept. 3, 1982 ,  96 Stat. 475 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to obligations issued after  December 31, 1982 .”\nPub. L. 97–248, title II, §\u202f221(d) ,  Sept. 3, 1982 ,  96 Stat. 478 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 1104 of Pub. L. 96–499 , formerly set out as a note under  section 103A of this title ] shall apply to obligations issued after the date of the enactment of this Act [ Sept. 3, 1982 ]. \n \n “(2)   Exception .— The amendments made by this section shall not apply with respect to any obligation to which the amendments made by section 1103 of the Mortgage Subsidy Bond Tax Act of 1980 [ section 1103 of Pub. L. 96–499 , amending this section] do not apply by reason of section 1104 of such Act [ section 1104 of Pub. L. 96–499 , formerly set out as a note under  section 103A of this title ].”\nPub. L. 97–248, title III, §\u202f310(d) ,  Sept. 3, 1982 ,  96 Stat. 599 , as amended by  Pub. L. 97–448, title III, §\u202f306(b)(2) ,  96 Stat. 2405 ;  Pub. L. 98–216, §\u202f6(b) ,  Feb. 14, 1984 ,  98 Stat. 8 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting  section 4701 of this title  and section 757c–5 of former Title 31, Money and Finance, and amending this section and sections 103A, 163, 165, 312, and 1232 of this title] shall apply to obligations issued after  December 31, 1982 . \n \n “(2)  [Repealed.  Pub. L. 98–216, §\u202f6(b) ,  Feb. 14, 1984 ,  98 Stat. 8 .] \n \n “(3)   Exception for certain warrants, etc .— The amendments made by subsection (b) [enacting  section 4701 of this title  and amending this section and sections 163, 165, 312, and 1232 of this title] shall not apply to any obligations issued after  December 31, 1982 , on the exercise of a warrant or the conversion of a convertible obligation if such warrant or obligation was offered or sold outside the United States without registration under the Securities Act of 1933 [ 15 U.S.C. 77a  et seq.] and was issued before  August 10, 1982 . A rule similar to the rule of the preceding sentence shall also apply in the case of any regulations issued under section 163(f)(2)(C) [now 163(f)(2)(B)] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section) except that the date on which such regulations take effect shall be substituted for ‘ August 10, 1982 ’. \n \n “(4)  [Repealed.  Pub. L. 98–216, §\u202f6(b) ,  Feb. 14, 1984 ,  98 Stat. 8 .] ”\nPub. L. 97–34, title VIII, §\u202f811(c) ,  Aug. 13, 1981 ,  95 Stat. 350 , provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Aug. 13, 1981 ].”\nPub. L. 97–34, title VIII, §\u202f812(b)(1) ,  Aug. 13, 1981 ,  95 Stat. 350 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to obligations issued after  December 31, 1980 .”\nFor effective date of amendment by  Pub. L. 96–499 , see  section 1104 of Pub. L. 96–499 , set out as an Effective Date note under  section 103A of this title .\nPub. L. 96–223, title II, §\u202f241(d) ,  Apr. 2, 1980 ,  94 Stat. 283 , provided that:  “The amendments made by subsection (a) [amending this section] and the provisions of subsections (b) and (c) [set out as notes under this section] shall apply with respect to obligations issued after  October 18, 1979 .”\nPub. L. 96–223, title II, §\u202f242(c) ,  Apr. 2, 1980 ,  94 Stat. 285 , provided that:  “The amendments made by subsection (a) [amending this section] and the provisions of subsection (b) [set out as a note under this section] shall apply with respect to obligations issued after  October 18, 1979 .”\nPub. L. 96–223, title II, §\u202f244(b) ,  Apr. 2, 1980 ,  94 Stat. 286 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to obligations issued on or after  October 18, 1979 .”\nPub. L. 95–339, title II, §\u202f201(c) ,  Aug. 8, 1978 ,  92 Stat. 467 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 8, 1978 ].”\nPub. L. 95–600, title III, §\u202f331(c) ,  Nov. 6, 1978 ,  92 Stat. 2840 , provided that: \n “(1)  The amendments made by subsection (a) [amending this section] shall apply to— “(A)  obligations issued after  December 31, 1978 , in taxable years ending after such date, and \n \n “(B)  capital expenditures made after  December 31, 1978 , with respect to obligations issued before  January 1, 1979 . \n \n \n “(2)  The amendment made by subsection (b) [amending this section] shall apply to— “(A)  obligations issued after  September 30, 1979 , in taxable years ending after such date, and \n \n “(B)  capital expenditures made after  September 30, 1979 , with respect to obligations issued after such date.”\nPub. L. 95–600, title III, §\u202f332(b) ,  Nov. 6, 1978 ,  92 Stat. 2840 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  April 30, 1968 , but only with respect to obligations issued after such date.”\nPub. L. 95–600, title III, §\u202f333(b) ,  Nov. 6, 1978 ,  92 Stat. 2840 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Nov. 6, 1978 ] in taxable years ending after such date.”\nPub. L. 95–600, title III, §\u202f334(c) ,  Nov. 6, 1978 ,  92 Stat. 2841 , provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nPub. L. 95–600, title VII, §\u202f703(q)(2) ,  Nov. 6, 1978 ,  92 Stat. 2944 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply with respect to payments made by the Commissioner of Education after  December 31, 1976 .”\nAmendment by  section 703(j)(1) of Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by section 1901(a)(17), (b)(8)(B) of  Pub. L. 94–455  applicable with respect to taxable years ending after  Oct. 4, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1906(b)(13)(A) of Pub. L. 94–455  effective  Feb. 1, 1977 , see  section 1906(d)(1) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nPub. L. 94–455, title XXI, §\u202f2105(d) ,  Oct. 4, 1976 ,  90 Stat. 1902 , provided that:  “The amendments made by this section [amending this section] apply to obligations issued on or after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nAmendment by  section 2137(d) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 2137(e) of Pub. L. 94–455 , set out as a note under  section 852 of this title .\nPub. L. 94–182, title III, §\u202f301(b) ,  Dec. 31, 1975 ,  89 Stat. 1056 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Dec. 31, 1975 ].”\nPub. L. 94–164, §\u202f7(b) ,  Dec. 23, 1975 ,  89 Stat. 976 , provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after the date of enactment of this Act [ Dec. 23, 1975 ].”\nPub. L. 92–178, title III, §\u202f315(c) ,  Dec. 10, 1971 ,  85 Stat. 529 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to obligations issued after  January 1, 1969 . The amendment made by subsection (b) [amending this section] shall apply with respect to expenditures incurred after the date of the enactment of this Act [ Dec. 10, 1971 ].”\nPub. L. 91–172, title VI, §\u202f601(b) ,  Dec. 30, 1969 ,  83 Stat. 657 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to obligations issued after  October 9, 1969 .”\nPub. L. 90–634, title IV, §\u202f401(b) ,  Oct. 24, 1968 ,  82 Stat. 1351 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to obligations issued after the date of the enactment of this Act [ Oct. 24, 1968 ].”\nPub. L. 90–364, title I, §\u202f107(b)(1) ,  June 28, 1968 ,  82 Stat. 268 , provided that:  “Except as provided by paragraph (2) [set out as a note below], the amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  April 30, 1968 , but only with respect to obligations issued after such date.”\nFunctions of Commissioner of Education transferred to Secretary of Education by  section 3441(a)(1) of Title 20 , Education.\nPub. L. 98–369, div. A, title VII, §\u202f722(b) ,  July 18, 1984 ,  98 Stat. 973 , provided that:  “For purposes of applying the amendments made by section 547 of the Highway Revenue Act of 1982 [ Pub. L. 97–424 , amending this section] and the amendment made by  section 202(b)(2) of Public Law 97–473  [amending this section],  Public Law 97–473  shall be deemed to have been enacted immediately before the Highway Revenue Act of 1982.”\nPub. L. 100–647, title I, §\u202f1013(a)(35) ,  Nov. 10, 1988 ,  102 Stat. 3544 , provided that: \n “(A)  Treasury Regulation section 1.103–13(g) (1979) is hereby enacted into positive law. \n \n “(B) (i)  Except as provided in clause (ii), subparagraph (A) shall apply to obligations sold after  May 2, 1978 , and to which such regulation was provided to apply. \n \n “(ii)  Treasury Regulation section 1.103–13(g) (1979) as enacted into positive law by subparagraph (A) shall cease to apply to the extent hereafter modified by the Secretary of the Treasury or his delegate by regulations.”\nPub. L. 100–647, title I, §\u202f1013(c)(15) ,  Nov. 10, 1988 ,  102 Stat. 3548 , provided that:  “A bond issued to refund an obligation described in section 103( o )(3) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]) shall not be treated as described in section 144(b) of the 1986 Code unless it is described in section 144(b)(1)(A) of the 1986 Code.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1865(b) ,  Oct. 22, 1986 ,  100 Stat. 2886 , provided that:  \n “An obligation shall not be treated as federally guaranteed for purposes of section 103(h) of the Internal Revenue Code of 1954 [now 1986] by reason of a guarantee by the Farmers Home Administration if— \n “(1)  such guarantee is pursuant to a commitment made by the Farmers Home Administration before  July 1, 1984 , and \n \n “(2)  such obligation is issued to finance a convention center project in Carbondale, Illinois.”\nPub. L. 99–514, title XVIII, §\u202f1865(c) ,  Oct. 22, 1986 ,  100 Stat. 2886 , provided that: \n “(1)   In general .— Any obligation which is part of an issue a substantial portion of the proceeds of which is to be used to finance a solid waste disposal facility described in paragraph (2) shall not, for purposes of section 103(h) of the Internal Revenue Code of 1954 [now 1986], be treated as an obligation which is federally guaranteed by reason of the sale of fuel, steam, electricity, or other forms of usable energy to the Federal Government or any agency or instrumentality thereof. \n \n “(2)   Solid waste disposal facility .— A solid waste disposal facility is described in this paragraph if such facility is described in section 103(b)(4)(E) of such Code and— “(A)  if— “(i)  a public State authority created pursuant to State legislation which took effect on  July 1, 1980 , took formal action before  October 19, 1983 , to commit development funds for such facility, \n \n “(ii)  such authority issues obligations for such facility before  January 1, 1988 , and \n \n “(iii)  expenditures have been made for the development of such facility before  October 19, 1983 , \n \n \n “(B)  if— “(i)  such facility is operated by the South Eastern Public Service Authority of Virginia, and \n \n “(ii)  on  December 20, 1984 , the Internal Revenue Service issued a ruling concluding that a portion of the obligations with respect to such facility would not be treated as federally guaranteed under section 103(h) of such Code by reason of the transitional rule contained in section 631(c)(3)(A)(i) of the Tax Reform Act of 1984 [ section 631(c)(3)(A)(i) of Pub. L. 98–369 , set out as a note above], \n \n \n “(C)  if— “(i)  a political subdivision of a State took formal action on  April 1, 1980 , to commit development funds for such facility, \n \n “(ii)  such facility has a contract to sell steam to a naval base, \n \n “(iii)  such political subdivision issues obligations for such facility before  January 1, 1988 , and \n \n “(iv)  expenditures have been made for the development of such facility before  October 19, 1983 , or \n \n \n “(D)  if— “(i)  such facility is a thermal transfer facility, \n \n “(ii)  is to be built and operated by the Elk Regional Resource Authority, and \n \n “(iii)  is to be on land leased from the United States Air Force at Arnold Engineering Development Center near Tullahoma, Tennessee. \n \n \n \n “(3)   Limitations.— “(A)  In the case of a solid waste disposal facility described in paragraph (2)(A), the aggregate face amount of obligations to which paragraph (1) applies shall not exceed $65,000,000. \n \n “(B)  In the case of a solid waste disposal facility described in paragraph (2)(B), the aggregate face amount of obligations to which paragraph (1) applies shall not exceed $20,000,000. Such amount shall be in addition to the amount permitted under the Internal Revenue Service ruling referred to in paragraph (2)(B)(ii). \n \n “(C)  In the case of a solid waste disposal facility described in paragraph (2)(C), the aggregate face amount of obligations to which paragraph (1) applies shall not exceed $75,000,000. \n \n “(D)  In the case of a solid waste disposal facility described in paragraph (2)(D), the aggregate face amount of obligations to which paragraph (1) applies shall not exceed $25,000,000.”\nPub. L. 99–514, title XVIII, §\u202f1866 ,  Oct. 22, 1986 ,  100 Stat. 2887 , as amended by  Pub. L. 100–647, title I, §\u202f1018(m)(1) –(4),  Nov. 10, 1988 ,  102 Stat. 3584 , provided that:  \n “The amendment made by section 623 of the Tax Reform Act of 1984 [ section 623 of Pub. L. 98–369 , amending this section] shall not apply to any obligation (or series of obligations) issued to refund another tax-exempt IDB to which the amendment made by such section 623 did not apply if— “(1)  the average maturity of the issue of which the refunding obligation is a part does not exceed the average maturity of the obligations to be refunded by such issue, \n \n “(2)  the amount of the refunding obligation does not exceed the amount of the refunded obligation, and \n \n “(3)  the proceeds of the refunding obligation are used to redeem the refunded obligation not later than 90 days after the date of the issuance of the refunding obligation. \n \n\n For purposes of the preceding sentence, the term ‘tax-exempt IDB’ means any industrial development bond (as defined in section 103(b) of the Internal Revenue Code of 1954 [now 1986]) the interest on which is exempt from tax under section 103(a) of such Code. For purposes of paragraph (1), average maturity shall be determined in accordance with subsection (b)(14)(B)(i) of such Code.”\n[ Pub. L. 100–647, title I, §\u202f1018(m)(5) ,  Nov. 10, 1988 ,  102 Stat. 3584 , provided that:  “A refunding obligation issued before  July 1, 1987 , shall be treated as meeting the requirement of paragraph (1) of section 1866 of the Reform Act [ Pub. L. 99–514 , set out above] if such obligation met the requirement of such paragraph as enacted by the Reform Act [ Pub. L. 99–514 ].” \n]\nPub. L. 99–514, title XVIII, §\u202f1867(b) ,  Oct. 22, 1986 ,  100 Stat. 2888 , provided that:  \n “The amendment made by section 624 of the Tax Reform Act of 1984 [amending sections 103 and 103A of this title and enacting provisions set out as a note under this section] shall not apply to obligations issued with respect to the Downtown Muskogee Revitalization Project for which a UDAG grant was preliminarily approved on  May 5, 1981 , if— \n “(1)  such obligation is issued before  January 1, 1986 , or \n \n “(2)  such obligation is issued after such date to provide additional financing for such project except that the aggregate amount of obligations to which this subsection applies shall not exceed $10,000,000.”\nPub. L. 99–514, title XVIII, §\u202f1869(c)(1) –(4),  Oct. 22, 1986 ,  100 Stat. 2889 , as amended by  Pub. L. 100–647, title I, §\u202f1018(n) ,  Nov. 10, 1988 ,  102 Stat. 3584 , provided that: \n “(1)   Treatment of certain obligations issued by the city of baltimore .— Obligations issued by the city of Baltimore, Maryland, after  June 30, 1985 , shall not be treated as private loan bonds for purposes of section 103( o ) of the Internal Revenue Code of 1954 [now 1986] (or as private activity bonds for purposes of section 103 and part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by title XIII of this Act [sections 1301 to 1318 of  Pub. L. 99–514 ]) by reason of the use of a portion of the proceeds of such obligations to finance or refinance temporary advances made by the city of Baltimore in connection with loans to persons who are not exempt persons (within the meaning of section 103(b)(3) of such Code) if— “(A)  such obligations are not industrial development bonds (within the meaning of section 103(b)(2) of the Internal Revenue Code of 1954 [now 1986]), \n \n “(B)  the portion of the proceeds of such obligations so used is attributable to debt approved by voter referendum on or before  November 2, 1982 , \n \n “(C)  the loans to such nonexempt persons were approved by the Board of Estimates of the city of Baltimore on or before  October 19, 1983 , and \n \n “(D)  the aggregate amount of such temporary advances financed or refinanced by such obligations does not exceed $27,000,000. \n \n \n “(2)   White pine power project .— The amendment made by section 626(a) of the Tax Reform Act of 1984 [ section 626(a) of Pub. L. 98–369 , amending this section] shall not apply to any obligation issued during 1984 to provide financing for the White Pine Power Project in Nevada. \n \n “(3)   Tax increment bonds .— The amendment made by section 626(a) of the Tax Reform Act of 1984 shall not apply to any tax increment financing obligation issued before  August 16, 1986 , if— “(A)  substantially all of the proceeds of the issue are to be used to finance— “(i)  sewer, street, lighting, or other governmental improvements to real property, \n \n “(ii)  the acquisition of any interest in real property (by a governmental unit having the power to exercise eminent domain), the preparation of such property for new use, or the transfer of such interest to a private developer, or \n \n “(iii)  payments of reasonable relocation costs of prior users of such real property, \n \n \n “(B)  all of the activities described in subparagraph (A) are pursuant to a redevelopment plan adopted by the issuing authority before the issuance of such issue, \n \n “(C)  repayment of such issue is secured exclusively by pledges of that portion of any increase in real property tax revenues (or their equivalent) attributable to the redevelopment resulting from the issue (or similar issues), and \n \n “(D)  none of the property described in subparagraph (A) is subject to a real property or other tax based on a rate or valuation method which differs from the rate and valuation method applicable to any other similar property located within the jurisdiction of the issuing authority. \n \n \n “(4)   Eastern maine electric cooperative .— The amendment made by section 626(a) of the Tax Reform Act of 1984 shall not apply to obligations issued by Massachusetts Municipal Wholesale Electric Company Project No. 6 if— “(A)  such obligation is issued before  January 1, 1986 , \n \n “(B)  such obligation is issued after such date to refund a prior obligation for such project, except that the aggregate amount of obligations to which this subparagraph applies shall not exceed $100,000,000, or \n \n “(C)  such obligation is issued after such date to provide additional financing for such project except that the aggregate amount of obligations to which this subparagraph applies shall not exceed $45,000,000. \n \n\n Subparagraph (B) shall not apply to any obligation issued for the advance refunding of any obligation.”\nPub. L. 99–514, title XVIII, §\u202f1869(c)(6) ,  Oct. 22, 1986 ,  100 Stat. 2890 , provided that: \n “(A)   In general .— The amendment made by section 626(a) of the Tax Reform Act of 1984 [ section 626(a) of Pub. L. 98–369 , amending this section] shall not apply to any obligation issued to finance the project described in subparagraph (B) if— “(i)  such obligation is issued before  September 27, 1985 , \n \n “(ii)  such obligation is issued after such date to refund a prior tax exemption obligation for such project, the amount of such obligation does not exceed the outstanding amount of the refunded obligation, and such prior tax exempt obligation is retired not later than the date 30 days after the issuance of the refunding obligation, or \n \n “(iii)  such obligation is issued after such date to provide additional financing for such project except that the aggregate amount of obligations to which this clause applies shall not exceed $150,000,000. \n \n\n Clause (ii) shall not apply to any obligation issued for the advance refunding of any obligation. \n \n “(B)   Description of project .— The project described in this subparagraph in the St. Johns River Power Park system in Florida which was authorized by legislation enacted by the Florida Legislature in February of 1982.”\nPub. L. 98–369, div. A, title VI, §\u202f629 ,  July 18, 1984 ,  98 Stat. 932 , as amended by  Pub. L. 99–514, §\u202f2 , title XIII, §\u202f1316(g)(8)(B),  Oct. 22, 1986 ,  100 Stat. 2095 , 2670, provided that: \n “(a)   Certain Public Utilities .— For purposes of applying section 103(b)(3) of the Internal Revenue Code [of 1986] with respect to— “(1)  any obligations issued after the date of enactment of this Act [ July 18, 1984 ], and \n \n “(2)  any obligations issued after  December 31, 1969 , which were treated as obligations described in section 103(a) of such Code on the day on which such obligations were issued, \n \n\n the term ‘exempt person’ shall include a regulated public utility having any customer service area within a State served by a public power authority which was required as a condition of a Federal Power Commission license specified by an Act of Congress enacted prior to the enactment of section 107 of the Revenue and Expenditure Control Act of 1968 ( Public Law 90–364 ) [ June 28, 1968 ] to contract to sell power to one such utility and which is authorized by State law to sell power to other such utilities, but only with respect to the purchase by any such utility and resale to its customers of any output of any electrical generation facility or any portion thereof or any use of any electrical transmission facility or any portion thereof financed by such power authority and owned by it or by such State, and provided that by agreement between such power authority and any such utility there shall be no markup in the resale price charged by such utility of that component of the resale price which represents the price paid by such utility for such output or use. The preceding sentence shall be applied by inserting ‘and a rural electric cooperative utility’ after ‘regulated public utility’ but only if not more than 1 percent of the load of the public power authority is sold to such rural electric cooperative utility. \n \n “(b)   Certain Railroads .— Section 103(b)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall not apply to any obligation which is described in section 103(b)(6)(A) of such Code if— “(1)  substantially all of the proceeds of such obligation are used to acquire railroad track and right-of-way from a railroad involved in a title 11 or similar proceeding (within the meaning of section 368(a)(3)(A) of such Code), and \n \n “(2)  the Federal Railroad Administration provides joint financing for such acquisitions. \n \n \n “(c)   Special Rules for Subsection  (a).— “(1)   Obligations subject to cap .— Any obligation described in subsection (a) shall be treated as a private activity bond for purposes of section 103(n) of the Internal Revenue Code of 1986. \n \n “(2)   Limitation on amount of obligations to which subsection  (a)(1)  applies — The aggregate amount of obligations to which subsection (a)(1) applies shall not exceed $911,000,000. \n \n “(3)   Limitation on purposes .— Subsection (a)(1) shall only apply to obligations issued as part of an issue substantially all the proceeds of which are used to provide 1 or more of the following: “(A)  Cable facilities. \n \n “(B)  Small hydroelectric facilities. \n \n “(C)  The acquisition of an interest in an electrical generating facility. \n \n “(D)  Improvements to existing generating facilities. \n \n “(E)  Transmission lines. \n \n “(F)  Electric generating facilities.”\nTreatment of  Pub. L. 98–369, §\u202f631(d)(3) , residential real property as residential rental property, see  section 1809(a)(4)(C) of Pub. L. 99–514 , set out as a note under  section 168 of this title .\nPub. L. 98–369, div. A, title VI, §\u202f628(f) ,  July 18, 1984 ,  98 Stat. 932 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If— “(1)  the proceeds of any issue are to be used to finance a facility or facilities located on a public airport, and \n \n “(2)  the governmental unit issuing such obligations is the owner or operator of such airport, \n \n\n such governmental unit shall be deemed to be the only governmental unit having jurisdiction over such airport for purposes of subsection (k) of section 103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to public approval for industrial development bonds).”\nPub. L. 98–369, div. A, title VI, §\u202f628(h) ,  July 18, 1984 ,  98 Stat. 932 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of any obligation issued on  December 11, 1981 , section 103(b)(6)(I) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied by substituting ‘$15,000,000’ for ‘$10,000,000’ if— \n “(1)  such obligation is part of an issue, \n \n “(2)  substantially all of the proceeds of such issue are used to provide facilities with respect to which an urban development action grant under section 119 of the Housing and Community Development Act of 1974 [ 42 U.S.C. 5318 ] was preliminarily approved by the Secretary of Housing and Urban Development on  January 10, 1980 , and \n \n “(3)  the Secretary of Housing and Urban Development determines, at the time such grant is approved, that the amount of such grant will equal or exceed 5 percent of the total capital expenditures incurred with respect to such facilities.”\nPub. L. 98–369, div. A, title VI, §\u202f625 ,  July 18, 1984 ,  98 Stat. 924 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1868,  Oct. 22, 1986 ,  100 Stat. 2095 , 2888, provided that: \n “(a)   Arbitrage Regulations.— “(1)   In general .— The Secretary shall prescribe regulations which specify the circumstances under which a qualified student loan bond shall be treated as an arbitrage bond for purposes of section 103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. Such regulations may provide that— “(A)  paragraphs (4) and (5) of section 103(c) of such Code shall not apply, and \n \n “(B)  rules similar to section 103(c)(6) shall apply, \n \n\n to qualified student loan bonds. \n \n “(2)   Definitions .— For purposes of this subsection— “(A)   Qualified student loan bond .— The term ‘qualified student loan bond’ has the meaning given to such term by section 103( o )(3) of the Internal Revenue Code of 1986 (as amended by this Act). \n \n “(B)   Arbitrage bond .— The term ‘arbitrage bond’ has the meaning given to such term by section 103(c)(2). \n \n \n “(3)   Effective date.— “(A)   In general .— Except as otherwise provided in this paragraph, any regulations prescribed by the Secretary under paragraph (1) shall apply to obligations issued after the qualified date. \n \n “(B)   Qualified date.— “(i)   In general .— For purposes of this paragraph, the term ‘qualified date’ means the earlier of— \u2001\u2001\u2001\u2001\u2001“(I)  the date on which the Higher Education Act of 1965 [ 20 U.S.C. 1001  et seq.] expires, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the date, after the date of enactment of this Act [ July 18, 1984 ], on which the Higher Education Act of 1965 is reauthorized. \n \n \n “(ii)   Publication of regulations .— Notwithstanding clause (i), the qualified date shall not be a date which is prior to the date that is 6 months after the date on which the regulations prescribed under paragraph (1) are published in the Federal Register. \n \n \n “(C)   Refunding obligations .— Regulations prescribed by the Secretary under paragraph (1) shall not apply to any obligation (or series of refunding obligations) issued exclusively to refund any qualified student loan bond which was issued before the qualified date, except that the requirements of subparagraphs (A) and (B) of section 626(b)(4) of this Act [set out in Effective Date of 1984 Amendment note above] must be met with respect to such refunding. \n \n “(D)   Fulfillment of commitments .— Regulations prescribed by the Secretary under paragraph (1) shall not apply to any obligations which are needed to fulfill written commitments to acquire or finance student loans which are originated after  June 30, 1984 , and before the qualified date, but only if— “(i)  such commitments are binding on the qualified date, and \n \n “(ii)  the amount of such commitments is consistent with practices of the issuer which were in effect on  March 15, 1984 , with respect to establishing secondary markets for student loans. \n \n \n \n \n “(b)   Arbitrage Limitation on Student Loan Bonds Which Are Not Qualified Student Loan Bonds .— Under regulations prescribed by the Secretary of the Treasury or his delegate, any student loan bond (other than a qualified student loan bond) issued after  December 31, 1985 , shall be treated as an obligation not described in subsection (a)(1) or (2) of section 103 of the Internal Revenue Code of 1986 unless the issue of which such obligation is a part meets requirements similar to those of sections 103(c)(6) and 103A(i) of such Code. \n \n “(c)   Issuance of Student Loan Bonds Which Are Not Tax-Exempt .— Any issuer who may issue obligations described in section 103(a) of the Internal Revenue Code of 1986 may elect to issue student loan bonds which are not described in such section 103(a) of such Code without prejudice to— “(1)  the status of any other obligations issued, or to be issued, by such issuer as obligations described in section 103(a) of such Code, or \n \n “(2)  the status of the issuer as an organization exempt from taxation under such Code. \n \n \n “(d)   Federal Executive Branch Jurisdiction Over Tax-Exempt Status .— For purposes of Federal law, any determination by the executive branch of the Federal Government of whether interest on any obligation is exempt from taxation under the Internal Revenue Code of 1986 shall be exclusively within the jurisdiction of the Department of the Treasury. \n \n “(e)   Study on Tax-Exempt Student Loan Bonds.— “(1)   In general .— The Comptroller General of the United States and the Director of the Congressional Budget Office, shall conduct studies of— “(A)  the appropriate role of tax-exempt bonds which are issued in connection with the guaranteed student loan program and the PLUS program established under the Higher Education Act of 1965 [ 20 U.S.C. 1001  et seq.], and \n \n “(B)  the appropriate arbitrage rules for such bonds. \n \n \n “(2)   Report .— The Comptroller General of the United States and the Director of the Congressional Budget Office, shall submit to the Committee on Finance and the Committee on Labor and Human Resources [now Committee on Health, Education, Labor, and Pensions] of the Senate and the Committee on Ways and Means and the Committee on Education and Labor [now Committee on Education and the Workforce] of the House of Representatives reports on the studies conducted under paragraph (1) by no later than 9 months after the date of enactment of this Act [ July 18, 1984 ].”\nPub. L. 96–223, title II, §\u202f241(b) ,  Apr. 2, 1980 ,  94 Stat. 282 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule .— For purposes of section 103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], any obligation issued by an authority for 2 or more political subdivisions of a State which is part of an issue substantially all of the proceeds of which are to be used to provide solid waste-energy producing facilities shall be treated as an obligation of a political subdivision of a State which meets the requirements of section 103(b)(4)(E) of such Code (relating to solid waste disposal, etc., facilities). Nothing in the preceding sentence shall be construed to override the limitations of section 103(c) of such Code (relating to arbitrage bonds). \n \n “(2)   Solid waste-energy producing facilities .— For purposes of paragraph (1), the term ‘solid waste-energy producing facilities’ means any solid waste disposal facility and any facility for the production of steam and electrical energy if— “(A)  substantially all of the fuel for the facility producing steam and electrical energy is derived from solid waste from such solid waste disposal facility, \n \n “(B)  both such solid waste disposal facility and the facility producing steam and electrical energy are owned and operated by the authority referred to in paragraph (1), and \n \n “(C)  all of the electrical energy and steam produced by the facility for producing steam and electricity which is not used by such facility is sold, for purposes other than resale, to an agency or instrumentality of the United States. \n \n \n “(3)   Solid waste disposal facility .— For purposes of paragraph (2), the term ‘solid waste disposal facility’ means any solid waste disposal facility within the meaning of section 103(b)(4)(E) of the Internal Revenue Code of 1986 (determined without regard to section 103(g) of such Code). \n \n “(4)   Obligations must be in registered form .— This subsection shall not apply to any obligation which is not issued in registered form.”\nPub. L. 96–223, title II, §\u202f241(c) ,  Apr. 2, 1980 ,  94 Stat. 282 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Subparagraph (C) of section 103(g)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall not apply to any facility for the production of alcohol from solid waste if— “(A)  substantially all of the solid waste derived feedstock for such facility is produced at a facility which— “(i)  went into full production in 1977, \n \n “(ii)  is located within the limits of a city, and \n \n “(iii)  is located in the same metropolitan area as the alcohol-producing facility, and \n \n \n “(B)  before  March 1, 1980 , there were negotiations between a governmental body and an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 with respect to the utilization of a special process for the production of alcohol at such alcohol-producing facility. \n \n \n “(2)   Limitation .— The aggregate amount of obligations which may be issued by reason of paragraph (1) with respect to any project shall not exceed $30,000,000. \n \n “(3)   Termination .— This subsection shall not apply to obligations issued after  December 31, 1985 .”\nPub. L. 96–223, title II, §\u202f242(b) ,  Apr. 2, 1980 ,  94 Stat. 284 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— For purposes of section 103(b)(4)(H) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to qualified hydroelectric generating facilities), in the case of a hydroelectric generating facility described in paragraph (2)— “(A)  the facility shall be treated as a qualified hydroelectric generating facility (as defined in section 103(b)(8)(A) of such Code) without regard to clause (ii) of section 48( l )(13)(B) of such Code (relating to maximum generating capacity), and \n \n “(B)  the fraction referred to in subparagraph (C) of section 103(b)(8) of such Code shall be deemed to be 1. \n \n \n “(2)   Facilities to which paragraph (1) applies .— A facility is described in this paragraph if— “(A)  it would be a qualified hydroelectric generating facility (as defined in section 103(b)(8)(A) of such Code) if clause (ii) of section 48( l )(13)(B) did not apply, \n \n “(B)  it constitutes an expansion of generating capacity at an existing hydroelectric generating facility, \n \n “(C)  such facility is located at 1 of 2 dams located in the same county where— “(i)  the rated capacity of the hydroelectric generating facilities at each such dam on  October 18, 1979 , was more than 750 megawatts, \n \n “(ii)  the construction of the first such dam began in 1956, power at such first dam was first generated in 1959, and full power production at such first dam began in 1961, and \n \n “(iii)  the construction of the second such dam began in 1959, power at such second dam was first generated in 1963, and full power production at such second dam began in 1964, \n \n \n “(D)  acquisition or construction of the existing facility referred to in subparagraph (B) was financed with the proceeds of an obligation described in section 103(a)(1) of such Code, \n \n “(E)  the existing facility is owned and operated by a State, political subdivision of a State, or agency or instrumentality of any of the foregoing, \n \n “(F)  no more than 60 percent of the electric power and energy produced by such existing facility and of the qualified hydroelectric generating facility is to be sold to anyone other than an exempt person (within the meaning of section 103(b)(3) of such Code), and \n \n “(G)  the agency of the State in which the facility is located which has jurisdiction over water rights had granted, before  October 18, 1979 , a water right under which expanded power and energy generating capacity for the facility was contemplated.”\nPub. L. 96–223, title II, §\u202f243 ,  Apr. 2, 1980 ,  94 Stat. 285 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Certain State Obligations for Renewable Energy Property.— “(1)   In general .— Paragraph (1) of subsection (b) of section 103 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall not apply to any obligation issued as part of an issue substantially all of the proceeds of which are to be used to provide renewable energy property, if— “(A)  the obligations are general obligations of a State, \n \n “(B)  the authority for the issuance of the obligations requires that taxes be levied in sufficient amount to provide for the payment of principal and interest on such obligations, \n \n “(C)  the amount of such obligations, when added to the sum of the amounts of all such obligations previously issued by the State which are outstanding, does not exceed the smaller of— “(i)  $500,000,000 or \n \n “(ii)  one-half of 1 percent of the value of all property in the State, \n \n \n “(D)  such obligations are issued pursuant to a program to provide financing for small scale energy projects which was established by a State the legislature of which, before  October 18, 1979 , approved a constitutional amendment to provide for such a program, and \n \n “(E)  such obligations meet the requirements of paragraph (1) of section 103(h) of the Internal Revenue Code of 1986. \n \n \n “(2)   Renewable energy property .— For purposes of this subsection, the term ‘renewable energy property’ means property used to produce energy (including heat, electricity, and substitute fuels) from renewable energy sources (including wind, solar, and geothermal energy, waste heat, biomass, and water). \n \n \n “(b)   Effective Date .— Subsection (a) shall apply with respect to obligations issued after the date of enactment of this Act [ Apr. 2, 1980 ].”\nPub. L. 95–600, title III, §\u202f337 ,  Nov. 6, 1978 ,  92 Stat. 2842 , as amended by  Pub. L. 96–222, title I, §\u202f103(a)(8) ,  Apr. 1, 1980 ,  94 Stat. 212 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— The payment to a charitable organization of a refund profit held in a trust fund or escrow arrangement, or held by an underwriter or other person under a qualified agreement in accordance with that agreement— “(1)  shall not cause the refunding obligations out of which the refund profit arose to be treated as arbitrage bonds (within the meaning of section 103(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) and \n \n “(2)  may be paid without penalty imposed on the issuer of such obligations. \n \n \n “(b)   Rule for Governments Which Have Already Paid Arbitrage Profits to the United States .— In the case of a State or local government which, before  January 1, 1977 — “(1)  requested in writing a rule by the Internal Revenue Service with respect to the tax consequences of paying refund profit to charitable organizations, \n \n “(2)  failed to receive a favorable ruling and did not pay the refund profit to a charitable organization, and \n \n\n which accounted to the United States for refund profit by direct payment to the United States, or by the purchase of low-interest United States obligations, the Secretary of the Treasury shall pay, out of any amounts in the Treasury not otherwise appropriated, an amount equal to the refund profit for which the State or local government has accounted to the United States. Amounts paid to a State or local government under this subsection shall be distributed to such charitable organizations within 90 days after the date on which the payment is received by the State or local government in the same manner as if the refund profit had not been paid to the United States and met the requirements of subsection (a). \n \n “(c)   Definitions .— For purposes of this section— “(1)   Refund profit .— The term ‘Refund profit’ means interest, profit, or other amounts generated by, or arising out of, the advance refunding, before  September 24, 1976 , of an obligation of a State or local government described in section 103 of such Code. \n \n “(2)   Charitable organization .— The term ‘charitable organization’ means an organization described in section 501(c)(3) of such Code and exempt from taxation under section 501(a) of such Code other than an organization described in section 509(a) of such Code. \n \n “(3)   Qualified agreement .— The term ‘qualified agreement’ means an agreement (whether or not enforceable) which provides for, or contemplates, the payment of refund profit to one or more charitable organizations. \n \n “(4)   Low-interest united states obligations .— The term ‘low-interest United States obligations’ means United States obligations which bear an interest rate lower than the highest rate of interest borne by public debt securities generally available for purchase at the time such obligations were purchased.”\nPub. L. 90–364, title I, §\u202f107(b)(2) ,  June 28, 1968 ,  82 Stat. 268 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “Section 103(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by subsection (a) [subsec. (b)(1), formerly subsec. (c)(1) of this section], shall not apply with respect to any obligation issued before  January 1, 1969 , if before  May 1, 1968 — \n “(A)  the issuance of the obligation (or the project in connection with which the proceeds of the obligations are to be used) was authorized or approved by the governing body of the governmental unit issuing the obligation or by the voters of such governmental unit; \n \n “(B)  in connection with the issuance of such obligation or with the use of the proceeds to be derived from the sale of such obligation or the property to be acquired or improved with such proceeds, a governmental unit has made a significant financial commitment; \n \n “(C)  any person (other than a governmental unit) who will use the proceeds to be derived from the sale of such obligation or the property to be acquired or improved with such proceeds has expended (or has entered into a binding contract to expend) for purposes which are related to the use of such proceeds or property, an amount equal to or in excess of 20 percent of such proceeds; or \n \n “(D)  in the case of an obligation issued in conjunction with a project where financial assistance will be provided by a governmental agency concerned with economic development, such agency has approved the project or an application for financial assistance is pending.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, added  Pub. L. 96–499, title XI, §\u202f1102(a) ,  Dec. 5, 1980 ,  94 Stat. 2660 ; amended  Pub. L. 96–595, §\u202f5(a) , (b),  Dec. 24, 1980 ,  94 Stat. 3467 ;  Pub. L. 97–248, title II, §\u202f220(a) –(e), title III, §\u202f310(c)(3), (4),  Sept. 3, 1982 ,  96 Stat. 475 , 476, 599;  Pub. L. 98–369, div. A, title I, §\u202f42(a)(2) , title VI, §§\u202f611(a)–(c), 612(b), 624(b)(1),  July 18, 1984 ,  98 Stat. 556 , 901–903, 911, 924;  Pub. L. 99–514, title XVIII, §\u202f1861 ,  Oct. 22, 1986 ,  100 Stat. 2883 , related to mortgage subsidy bonds. See  section 143 of this title .\nRepeal applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Subsection (a)(4) shall not apply in the case of any individual who is not described in paragraph (2).\nIn the case of any individual described in paragraph (2), the amounts excludable under subsection (a)(4) for any period with respect to any individual shall not be less than the maximum amount which such individual, on application therefor, would be entitled to receive as disability compensation from the Veterans’ Administration.\nSection 808 of the Foreign Service Act of 1980, referred to in subsec. (a)(4), is  Pub. L. 96–465, title I, §\u202f808 ,  Oct. 17, 1980 ,  94 Stat. 2110 , which is classified to  section 4048 of Title 22 , Foreign Relations and Intercourse.\nSection 1201 of the Omnibus Crime Control and Safe Streets Act of 1968, referred to in subsec. (a)(6)(A), was classified to  section 3796 of Title 42 , The Public Health and Welfare, prior to editorial reclassification and renumbering as  section 10281 of Title 34 , Crime Control and Law Enforcement.\n2018—Subsec. (b)(2)(D).  Pub. L. 115–141  substituted “Department of Veterans Affairs” for “Veterans’ Administration”.\n2015—Subsec. (a)(6).  Pub. L. 114–14  added par. (6).\n2002—Subsec. (a)(5).  Pub. L. 107–134  substituted “a terroristic or military action (as defined in section 692(c)(2)).” for “a violent attack which the Secretary of State determines to be a terrorist attack and which occurred while such individual was an employee of the United States engaged in the performance of his official duties outside the United States.”\n1996—Subsec. (a).  Pub. L. 104–188, §\u202f1605(b) , in closing provisions, substituted “For purposes of paragraph (2), emotional distress shall not be treated as a physical injury or physical sickness. The preceding sentence shall not apply to an amount of damages not in excess of the amount paid for medical care (described in subparagraph (A) or (B) of section 213(d)(1)) attributable to emotional distress.” for “Paragraph (2) shall not apply to any punitive damages in connection with a case not involving physical injury or physical sickness.”\nSubsec. (a)(2).  Pub. L. 104–188, §\u202f1605(a) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “the amount of any damages received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal injuries or sickness;”.\nSubsec. (a)(3).  Pub. L. 104–191  inserted “(or through an arrangement having the effect of accident or health insurance)” after “accident or health insurance”.\nSubsecs. (c), (d).  Pub. L. 104–188, §\u202f1605(c) , added subsec. (c) and redesignated former subsec. (c) as (d).\n1989—Subsec. (a).  Pub. L. 101–239  inserted at end “Paragraph (2) shall not apply to any punitive damages in connection with a case not involving physical injury or physical sickness.”\n1983—Subsec. (a)(2).  Pub. L. 97–473  substituted “whether by suit or agreement and whether as lump sums or as periodic payments” for “whether by suit or agreement”.\n1980—Subsec. (a)(4).  Pub. L. 96–465  substituted reference to section 808 of the Foreign Service Act of 1980 for reference to section 831 of the Foreign Service Act of 1946.\n1976—Subsec. (a)(4).  Pub. L. 94–455, §\u202f1901(a)(18)(A) , struck out “;\u2000 60 Stat. 1021 ” after “( 22 U.S.C. 1081 ”.\nSubsec. (a)(5).  Pub. L. 94–455, §\u202f505(e)(1) , added par. (5).\nSubsecs. (b), (c).  Pub. L. 94–455, §\u202f505(b) , added subsec. (b), redesignated former subsec. (b) as (c) and, as so redesignated, §\u202f1901(a)(18)(B), substituted “1403 of title 10, United States Code (relating to career compensation laws)” for “402(h) of the Career Compensation Act of 1949 ( 37 U.S.C. 272(h) )”.\n1962—Subsec. (a).  Pub. L. 87–792  inserted sentence requiring contributions made on behalf of an individual who is, or has been, an employee within the meaning of section 401(c)(1), while he was such an employee to a trust which is exempt from tax, or under a plan described in section 403(a), to be treated as contributions by the employer which were not includible in the gross income of the employee.\n1960—Subsec. (a)(4).  Pub. L. 86–723  provided for exclusion from gross income of amounts received as a disability annuity payable under the provisions of section 831 of the Foreign Service Act of 1946, as amended.\nReference to Veterans’ Administration deemed to refer to Department of Veterans Affairs pursuant to  section 10 of Pub. L. 100–527 , set out as a Department of Veterans Affairs Act note under  section 301 of Title 38 , Veterans’ Benefits.\nSecretary of Health, Education, and Welfare redesignated Secretary of Health and Human Services by  section 3508 of Title 20 , Education.\nPub. L. 107–134, title I, §\u202f113(c) ,  Jan. 23, 2002 ,  115 Stat. 2435 , provided that:  “The amendments made by this section [amending this section and  section 692 of this title ] shall apply to taxable years ending on or after  September 11, 2001 .”\nPub. L. 104–191, title III, §\u202f311(c) ,  Aug. 21, 1996 ,  110 Stat. 2053 , provided that:  “The amendments made by this section [amending this section and  section 162 of this title ] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1605(d) ,  Aug. 20, 1996 ,  110 Stat. 1839 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to amounts received after the date of the enactment of this Act [ Aug. 20, 1996 ], in taxable years ending after such date. \n \n “(2)   Exception .— The amendments made by this section shall not apply to any amount received under a written binding agreement, court decree, or mediation award in effect on (or issued on or before)  September 13, 1995 .”\nPub. L. 101–239, title VII, §\u202f7641(b) ,  Dec. 19, 1989 ,  103 Stat. 2379 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to amounts received after  July 10, 1989 , in taxable years ending after such date. \n \n “(2)   Exception .— The amendment made by subsection (a) shall not apply to any amount received— “(A)  under any written binding agreement, court decree, or mediation award in effect on (or issued on or before)  July 10, 1989 , or \n \n “(B)  pursuant to any suit filed on or before  July 10, 1989 .”\nAmendment by  Pub. L. 96–465  effective  Feb. 15, 1981 , except as otherwise provided, see  section 2403 of Pub. L. 96–465 , set out as an Effective Date note under  section 3901 of Title 22 , Foreign Relations and Intercourse.\nAmendment by  section 505(b) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as a note under  section 3 of this title .\nPub. L. 94–455, title V, §\u202f505(e)(2) ,  Oct. 4, 1976 ,  90 Stat. 1568 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 1901(a)(18)(A) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nPub. L. 86–723, §\u202f56(e) ,  Sept. 8, 1960 ,  74 Stat. 848 , provided that:  “The amendment made by section 51 of this Act [amending this section] shall be effective with respect to taxable years ending after the date of enactment of this Act [ Sept. 8, 1960 ].”\nCoast and Geodetic Survey consolidated with National Weather Bureau in 1965 to form Environmental Science Services Administration by Reorg. Plan No. 2 of 1965, eff.  July 13, 1965 , 30 FR 8819,  79 Stat. 1318 . Environmental Science Services Administration abolished in 1970 and its personnel, property, records, etc., transferred to National Oceanic and Atmospheric Administration by Reorg. Plan No. 4 of 1970, eff.  Oct. 3, 1970 , 35 FR 15627,  84 Stat. 2090 . By order of Acting Associate Administrator of National Oceanic and Atmospheric Administration, 35 FR 19249,  Dec. 19, 1970 , Coast and Geodetic Survey redesignated National Ocean Survey. See notes under  section 311 of Title 15 , Commerce and Trade.\nFunctions of Public Health Service, Surgeon General of Public Health Service, and all other officers and employees of Public Health Service, and functions of all agencies of or in Public Health Service transferred to Secretary of Health, Education, and Welfare by 1966 Reorg. Plan No. 3, 31 F.R. 8855,  80 Stat. 1610 , effective  June 25, 1966 , set out in the Appendix to Title 5, Government Organization and Employees.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Except as otherwise provided in this section, amounts received by an employee through accident or health insurance for personal injuries or sickness shall be included in gross income to the extent such amounts (1) are attributable to contributions by the employer which were not includible in the gross income of the employee, or (2) are paid by the employer.\nExcept in the case of amounts attributable to (and not in excess of) deductions allowed under section 213 (relating to medical, etc., expenses) for any prior taxable year, gross income does not include amounts referred to in subsection (a) if such amounts are paid, directly or indirectly, to the taxpayer to reimburse the taxpayer for expenses incurred by him for the medical care (as defined in section 213(d)) of the taxpayer, his spouse, his dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), and any child (as defined in section 152(f)(1)) of the taxpayer who as of the end of the taxable year has not attained age 27. Any child to whom section 152(e) applies shall be treated as a dependent of both parents for purposes of this subsection.\nFor purposes of section 213(a) (relating to medical, dental, etc., expenses) amounts excluded from gross income under subsection (c) shall not be considered as compensation (by insurance or otherwise) for expenses paid for medical care.\nFor purposes of this section, the term “employee” does not include an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals).\nIn the case of amounts paid to a highly compensated individual under a self-insured medical reimbursement plan which does not satisfy the requirements of paragraph (2) for a plan year, subsection (b) shall not apply to such amounts to the extent they constitute an excess reimbursement of such highly compensated individual.\nA self-insured medical reimbursement plan does not meet the requirements of subparagraph (B) of paragraph (2) unless all benefits provided for participants who are highly compensated individuals are provided for all other participants.\nThe term “self-insured medical reimbursement plan” means a plan of an employer to reimburse employees for expenses referred to in subsection (b) for which reimbursement is not provided under a policy of accident and health insurance.\nAll employees who are treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this section.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section.\nAny amount paid for a plan year that is included in income by reason of this subsection shall be treated as received or accrued in the taxable year of the participant in which the plan year ends.\nNotwithstanding any other provision of law, gross income includes benefits paid under section 2(a) of the Railroad Unemployment Insurance Act for days of sickness; except to the extent such sickness (as determined in accordance with standards prescribed by the Railroad Retirement Board) is the result of on-the-job injury.\nFor purposes of subsection (b), amounts paid (directly or indirectly) to a qualified taxpayer from an accident or health plan described in paragraph (2) shall not fail to be excluded from gross income solely because such plan, on or before  January 1, 2008 , provides for reimbursements of health care expenses of a deceased employee’s beneficiary (other than an individual described in paragraph (3)(B)).\nSection 2(a) of the Railroad Unemployment Insurance Act, referred to in subsec. (i), is classified to  section 352(a) of Title 45 , Railroads.\n2018—Subsec. (h)(7)(B).  Pub. L. 115–141  substituted “subparagraph (A))” for “subparagraph (A)” in introductory provisions.\n2015—Subsec. (j)(1).  Pub. L. 114–113, §\u202f305(a) , substituted “a qualified taxpayer” for “the taxpayer” and “deceased employee’s beneficiary (other than an individual described in paragraph (3)(B))” for “deceased plan participant’s beneficiary”.\nSubsec. (j)(2).  Pub. L. 114–113, §\u202f305(c)(1) , inserted “or established by or on behalf of a State or political subdivision thereof” after “public retirement system” in introductory provisions.\nSubsec. (j)(2)(B).  Pub. L. 114–113, §\u202f305(c)(2) , inserted “or 501(c)(9)” after “section 115”.\nSubsec. (j)(3).  Pub. L. 114–113, §\u202f305(b) , added par. (3).\n2014—Subsec. (f).  Pub. L. 113–295  struck out “or (d)” after “subsection (c)”.\n2010—Subsec. (b).  Pub. L. 111–152  substituted “his dependents” for “and his dependents” and inserted “,\u2000and any child (as defined in section 152(f)(1)) of the taxpayer who as of the end of the taxable year has not attained age 27” after “thereof)”.\n2008—Subsec. (j).  Pub. L. 110–458  added subsec. (j).\n2004—Subsecs. (b), (c)(1).  Pub. L. 108–311  inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\n1989—Subsecs. (h), (i).  Pub. L. 101–140  amended subsecs. (h) and (i) to read as if amendments by  Pub. L. 99–514, §\u202f1151(c)(2) , had not been enacted, see 1986 Amendment note below.\n1986—Subsec. (d)(5)(C).  Pub. L. 99–514, §\u202f1301(j)(9) , which directed that subpar. (C) be amended by substituting “section 7703(a)” for “section 143(a)”, could not be executed because subsec. (d) was previously repealed by  Pub. L. 98–21 . See 1983 Amendment note below.\nSubsecs. (h), (i).  Pub. L. 99–514, §\u202f1151(c)(2) , redesignated subsec. (i) as (h) and struck out former subsec. (h) which related to amount paid to highly compensated individuals under a discriminatory self-insured medical expense reimbursement plan.\n1984—Subsec. (b).  Pub. L. 98–369  inserted “Any child to whom section 152(e) applies shall be treated as a dependent of both parents for purposes of this subsection.”\n1983—Subsec. (d).  Pub. L. 98–21  struck out subsec. (d) which provided that no deduction or credit would be allowed with respect to any expenditure which is properly associated with any amount excluded from gross income under subsec. (a).\nSubsec. (i).  Pub. L. 98–76  added subsec. (i).\n1982—Subsec. (b).  Pub. L. 97–248  substituted “section 213(d)” for “section 213(e)”.\n1981—Subsec. (d)(3).  Pub. L. 97–34, §\u202f103(c)(2) , substituted “this subsection and section 221” for “this subsection” in parenthetical provision.\nSubsec. (h)(3)(B)(v).  Pub. L. 97–34, §\u202f111(b)(4) , substituted “section 911(d)(2)” for “section 911(b)”.\n1980—Subsec. (h)(3)(A).  Pub. L. 96–222, §\u202f103(a)(13)(B) , substituted “highly compensated individuals” for “highly compensated participants”.\nSubsec. (h)(7)(A).  Pub. L. 96–222, §\u202f103(a)(13)(C) , substituted “highly compensated individuals but not to all other participants (or which otherwise fails to satisfy the requirements of paragraph (2)(B))” for “a highly compensated individual but not to a broad cross-section of employees”.\nSubsec. (h)(8).  Pub. L. 96–613  and  Pub. L. 96–605  made identical amendments by substituting in heading “controlled groups, etc.” for “controlled groups”, and by substituting in text “subsection (b), (c), or (m) of section 414” for “subsection (b) or (c) of section 414”.\n1978—Subsec. (d)(4).  Pub. L. 95–600, §\u202f701  (c)(1), redesignated par. (5) as (4). Former par. (4) redesignated (5)(A) and (C).\nSubsec. (d)(5).  Pub. L. 95–600, §\u202f701(c)(1) , added heading and subpar. (B), redesignated former par. (4) as subpars. (A) and (C), adding subpar. (C) heading and substituting “section 143(a)” for “section 143”; and redesignated former par. (6) as subpar. (D), inserting “defined” in heading.\nSubsec. (d)(6), (7).  Pub. L. 95–600, §\u202f701(c)(1) , redesignated par. (7) as (6). Former par. (6) redesignated (5)(D).\nSubsec. (h).  Pub. L. 95–600, §\u202f366(a) , added subsec. (h).\n1976—Subsec. (d).  Pub. L. 94–455, §\u202f505(a) , substituted provisions relating to an exclusion of up to $5,200 a year for taxpayers retiring on disability prior to age 65; dollar-for-dollar phase out of exclusion for adjusted annual gross income (including disability income) in excess of $15,000; requirement that married couple must file joint return; defined “permanent and total disability” and “joint return”; and inserted special rule for coordination with  section 72 of this title  for provisions relating to wage continuation plans.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1901(c)(2) , struck out “a territory” after “of a State”.\n1964—Subsec. (d).  Pub. L. 88–272  substituted provisions stating that “The preceding sentence shall not apply to amounts attributable to the first 30” days if the amounts exceed 75 percent of regular weekly wages, and if they do not exceed said 75 percent, the first sentence of this subsection shall not apply to the extent the amounts exceed $75 weekly and shall not apply to amounts attributable to the first 7 calendar days unless the employee is hospitalized for injury or sickness for at least 1 day in such period, for provisions stating that said “preceding sentence” did not apply in cases of sickness, to amounts attributable to the first 7 days unless the employee was hospitalized for sickness for at least 1 day during such period.\n1962—Subsec. (g).  Pub. L. 87–792  added subsec. (g).\nPub. L. 114–113, div. Q, title III, §\u202f305(d) ,  Dec. 18, 2015 ,  129 Stat. 3089 , provided that:  “The amendments made by this section [amending this section] shall apply to payments after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 110–458, title I, §\u202f124(b) ,  Dec. 23, 2008 ,  122 Stat. 5115 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to payments before, on, or after the date of the enactment of this Act [ Dec. 23, 2008 ].”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by  section 1151(c)(2) of Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nAmendment by  section 1301(j)(9) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 423(d) of Pub. L. 98–369 , set out as a note under  section 2 of this title .\nPub. L. 98–76, title II, §\u202f241(b) ,  Aug. 12, 1983 ,  97 Stat. 430 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts received after  December 31, 1983 , in taxable years ending after such date.”\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under subsec. (d)(6) as in effect the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21  set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 202(c) of Pub. L. 97–248 , set out as a note under  section 213 of this title .\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see sections 103(d) and 115 of  Pub. L. 97–34 , set out as notes under sections 62 and 911, respectively, of this title.\nAmendments by  Pub. L. 96–605  and 96–613 applicable to years ending after  Nov. 30, 1980 , except in the case of a plan in existence on  Nov. 30, 1980 , where amendments applicable to plan years beginning after  Nov. 30, 1980 , see  section 201(c) of Pub. L. 96–605  and  section 5(c) of Pub. L. 96–613 , set out as a note under  section 414 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title III, §\u202f366(b) ,  Nov. 6, 1978 ,  92 Stat. 2857 , as amended by  Pub. L. 96–222, title I, §\u202f103(a)(13)(D) ,  Apr. 1, 1980 ,  94 Stat. 213 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts reimbursed after  December 31, 1979 . For purposes of applying such amendment, there shall not be taken into account any amount reimbursed before  January 1, 1980 .”\nPub. L. 95–600, title VII, §\u202f701(c)(3) ,  Nov. 6, 1978 ,  92 Stat. 2900 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  The amendments made by paragraphs (1) and (2)(A) [amending this section and provisions set out as a note under this section] shall take effect as if included in section 105(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as such section was amended by section 505(a) of the Tax Reform Act of 1976. \n \n “(B)  The amendments made by paragraph (2)(B) [amending provisions set out as notes under this section] shall take effect as if included in section 301 of the Tax Reduction and Simplification Act of 1977 [ Pub. L. 95–30, title III, §\u202f301 ,  May 23, 1977 ,  91 Stat. 152 ].”\nPub. L. 94–455, title V, §\u202f505(f) , as added by  Pub. L. 95–30, title III, §\u202f301(a) ,  May 23, 1977 ,  91 Stat. 151 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 1901(c)(2) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 88–272, title II, §\u202f205(b) ,  Feb. 26, 1964 ,  78 Stat. 38 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts attributable to periods of absence commencing after  December 31, 1963 .”\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nPub. L. 95–30, title III, §\u202f301(c) ,  May 23, 1977 ,  91 Stat. 151 , as amended by  Pub. L. 95–600, title VII, §\u202f701(c)(2)(B) ,  Nov. 6, 1978 ,  92 Stat. 2900 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Any election made under section 105(d)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] or under section 505(d) of the Tax Reform Act of 1976 [set out below] for a taxable year beginning in 1976 may be revoked (in such manner as may be prescribed by regulations) at any time before the expiration of the period for assessing a deficiency with respect to such taxable year (determined without regard to subsection (d) of this section) [set out below].”\nPub. L. 95–30, title III, §\u202f301(d) ,  May 23, 1977 ,  91 Stat. 152 , provided that:  “In the case of any revocation made under subsection (c) [set out above], the period for assessing a deficiency with respect to any taxable year affected by the revocation shall not expire before the date which is 1 year after the date of the making of the revocation, and, notwithstanding any law or rule of law, such deficiency, to the extent attributable to such revocation, may be assessed at any time during such 1-year period.”\nPub. L. 95–30, title III, §\u202f301(e) ,  May 23, 1977 ,  91 Stat. 152 , as amended by  Pub. L. 95–600, title VII, §\u202f701(c)(2)(B) ,  Nov. 6, 1978 ,  92 Stat. 2900 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by this section [enacting and amending provisions set out as notes under this section] shall take effect on  October 4, 1976 , but shall not apply— \n “(1)  with respect to any taxpayer who makes or has made an election under section 105(d)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] or under section 505(d) of the Tax Reform Act of 1976 [set out below] (as such sections were in effect before the enactment of this Act [ May 23, 1977 ]) for a taxable year beginning in 1976, if such election is not revoked under subsection (c) of this section [set out above], and \n \n “(2)  with respect to any taxpayer (other than a taxpayer described in paragraph (1)) who has an annuity starting date at the beginning of a taxable year beginning in 1976 by reason of the amendments made by section 505 of the Tax Reform Act of 1976 [amending this section and  section 104 of this title  and enacting provisions set out as notes under this section] (as in effect before the enactment of this Act [ May 23, 1977 ]), unless such person elects (in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe) to have such amendments apply.”\nPub. L. 94–455, title V, §\u202f505(c) ,  Oct. 4, 1976 ,  90 Stat. 1567 , as amended by  Pub. L. 95–30, title III, §\u202f301(b)(1) , (2),  May 23, 1977 ,  91 Stat. 151 ;  Pub. L. 95–600, title VII, §\u202f701(c)(2)(A) ,  Nov. 6, 1978 ,  92 Stat. 2900 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of any individual who— “(1)  retired before  January 1, 1977 , \n \n “(2)  either retired on disability or was entitled to retire on disability, and \n \n “(3)  on  January 1, 1976 , or  January 1, 1977 , was permanently and totally disabled (within the meaning of section 105(d)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), \n \n\n such individual shall be deemed to have met the requirements of section 105(d)(1)(B) of such Code (as amended by subsection (a) of this section).”\nPub. L. 94–455, title V, §\u202f505(d) ,  Oct. 4, 1976 ,  90 Stat. 1568 , as amended by  Pub. L. 95–30, title III, §\u202f301(b)(3) –(5),  May 23, 1977 ,  91 Stat. 151 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of an individual who— “(1)  retired on disability before  January 1, 1977 , and \n \n “(2)  on  December 31, 1975 , or  December 31, 1976 , was entitled to exclude any amount with respect to such retirement disability from gross income under section 105(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], \n \n\n for purposes of section 72 the annuity starting date shall not be deemed to occur before the beginning of the taxable year in which the taxpayer attains age 65, or before the beginning of an earlier taxable year for which the taxpayer makes an irrevocable election not to seek the benefits of such section 105(d) for such year and all subsequent years.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Except as otherwise provided in this section, gross income of an employee does not include employer-provided coverage under an accident or health plan.\nIn the case of an employee who is an eligible individual, amounts contributed by such employee’s employer to any Archer MSA of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 220(b)(1) (determined without regard to this subsection) which is applicable to such employee for such taxable year.\nNo amount shall be included in the gross income of any employee solely because the employee may choose between the contributions referred to in paragraph (1) and employer contributions to another health plan of the employer.\nAny employer contribution to an Archer MSA, if otherwise allowable as a deduction under this chapter, shall be allowed only for the taxable year in which paid.\nEvery individual required to file a return under section 6012 for the taxable year shall include on such return the aggregate amount contributed by employers to the Archer MSAs of such individual or such individual’s spouse for such taxable year.\nParagraph (1) shall not apply for purposes of section 4980B.\nFor purposes of this subsection, the terms “eligible individual” and “Archer MSA” have the respective meanings given to such terms by section 220.\nFor penalty on failure by employer to make comparable contributions to the Archer MSAs of comparable employees, see section 4980E.\nGross income of an employee shall include employer-provided coverage for qualified long-term care services (as defined in section 7702B(c)) to the extent that such coverage is provided through a flexible spending or similar arrangement.\nIn the case of an employee who is an eligible individual (as defined in section 223(c)(1)), amounts contributed by such employee’s employer to any health savings account (as defined in section 223(d)) of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 223(b) (determined without regard to this subsection) which is applicable to such employee for such taxable year.\nRules similar to the rules of paragraphs (2), (3), (4), and (5) of subsection (b) shall apply for purposes of this subsection.\nFor penalty on failure by employer to make comparable contributions to the health savings accounts of comparable employees, see section 4980G.\nA plan shall not fail to be treated as a health flexible spending arrangement or health reimbursement arrangement under this section or section 105 merely because such plan provides for a qualified HSA distribution.\nClauses (i) and (ii) of subparagraph (A) shall not apply if the employee ceases to be an eligible individual by reason of the death of the employee or the employee becoming disabled (within the meaning of section 72(m)(7)).\nThe term “testing period” means the period beginning with the month in which the qualified HSA distribution is contributed to the health savings account and ending on the last day of the 12th month following such month.\nThe term “eligible individual” has the meaning given such term by section 223(c)(1).\nA qualified HSA distribution shall be treated as a rollover contribution described in section 223(f)(5).\nA qualified HSA distribution shall be treated as a payment described in subsection (d).\nExcept as provided in clause (ii), section 4980G shall not apply to qualified HSA distributions.\nIn the case of a qualified HSA distribution to any employee, the failure to offer such distribution to any eligible individual covered under a high deductible health plan of the employer shall (notwithstanding section 4980G(d)) be treated for purposes of section 4980G as a failure to meet the requirements of section 4980G(b).\nFor purposes of this section and section 105, expenses incurred for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as incurred for medical care.\nFor purposes of this section and section 105, payments or reimbursements from a qualified small employer health reimbursement arrangement (as defined in section 9831(d)) of an individual for medical care (as defined in section 213(d)) shall not be treated as paid or reimbursed under employer-provided coverage for medical expenses under an accident or health plan if for the month in which such medical care is provided the individual does not have minimum essential coverage (within the meaning of section 5000A(f)).\nCOBRA, referred to in the heading for subsec. (b)(5), probably means the Consolidated Omnibus Budget Reconciliation Act of 1985,  Pub. L. 99–272 ,  Apr. 7, 1986 ,  100 Stat. 82 . For complete classification of this Act to the Code, see Tables.\n2020—Subsec. (f).  Pub. L. 116–136  added subsec. (f) and struck out former subsec. (f). Prior to amendment, text read as follows: “For purposes of this section and section 105, reimbursement for expenses incurred for a medicine or a drug shall be treated as a reimbursement for medical expenses only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”\n2016—Subsec. (g).  Pub. L. 114–255  added subsec. (g).\n2014—Subsec. (c)(1).  Pub. L. 113–295  substituted “Gross income” for “Effective on and after  January 1, 1997 , gross income”.\n2010—Subsec. (f).  Pub. L. 111–148  added subsec. (f).\n2006—Subsec. (e).  Pub. L. 109–432  added subsec. (e).\n2003—Subsec. (d).  Pub. L. 108–173  added subsec. (d).\n2000—Subsec. (b).  Pub. L. 106–554  §\u202f1(a)(7) [title II, §\u202f202(b)(6)], substituted “Archer MSAs” for “medical savings accounts” in heading.\nSubsec. (b)(1).  Pub. L. 106–554  §\u202f1(a)(7) [title II, §\u202f202(a)(2)], substituted “Archer MSA” for “medical savings account”.\nSubsec. (b)(3).  Pub. L. 106–554  §\u202f1(a)(7) [title II, §\u202f202(b)(10)], substituted “an Archer MSA” for “a Archer MSA”.\nPub. L. 106–554  §\u202f1(a)(7) [title II, §\u202f202(a)(2)], substituted “Archer MSA” for “medical savings account”.\nSubsec. (b)(4).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(A)] , substituted “Archer MSAs” for “medical savings accounts”.\nSubsec. (b)(6).  Pub. L. 106–554  §\u202f1(a)(7) [title II, §\u202f202(a)(2)], substituted “Archer MSA” for “medical savings account”.\nSubsec. (b)(7).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(A)] , substituted “Archer MSAs” for “medical savings accounts”.\n1996— Pub. L. 104–191, §\u202f301(c)(1) , amended text generally. Prior to amendment, text read as follows: “Gross income of an employee does not include employer-provided coverage under an accident or health plan.”\nSubsec. (c).  Pub. L. 104–191, §\u202f321(c)(2) , added subsec. (c).\n1989—Subsec. (b)(2).  Pub. L. 101–239  amended subsec. (b)(2) as it existed prior to general amendment by  Pub. L. 100–647  by striking out the last sentence which read as follows: “Under regulations, rules similar to the rules of subsections (a) and (b) of section 52 (relating to employers under common control) shall apply for purposes of subparagraph (A).” See Effective Date of 1989 Amendment note below.\n1988— Pub. L. 100–647, §\u202f3011(b)(1) , amended section generally, substituting a single undesignated par. for former subsec. (a) providing that gross income does not include employer-provided coverage under an accident or health plan and subsec. (b) providing for an exception for highly compensated individuals where a plan fails to provide certain continuation coverage.\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1018(t)(7)(A) , substituted “any employer-provided coverage” for “any amount contributed by an employer” and “under a group” for “to a group”.\n1986— Pub. L. 99–272  designated existing provisions as subsec. (a) and added subsec. (a) heading and subsec. (b).\nSubsec. (a).  Pub. L. 99–514, §\u202f1151(j)(2) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “Gross income does not include contributions by the employer to accident or health plans for compensation (through insurance or otherwise) to his employees for personal injuries or sickness.”\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1114(b)(1) , substituted “highly compensated employee (within the meaning of section 414(q))” for “highly compensated individual (within the meaning of section 105(h)(5))”.\nPub. L. 116–136, div. A, title III, §\u202f3702(d)(2) ,  Mar. 27, 2020 ,  134 Stat. 416 , provided that:  “The amendment made by subsection (c) [amending this section] shall apply to expenses incurred after  December 31, 2019 .”\nAmendment by  Pub. L. 114–255  applicable to years beginning after  Dec. 31, 2016 , see  section 18001(a)(7) of Pub. L. 114–255 , set out as a note under  section 36B of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–148, title IX, §\u202f9003(d)(2) ,  Mar. 23, 2010 ,  124 Stat. 854 , provided that:  “The amendment made by subsection (c) [amending this section] shall apply to expenses incurred with respect to taxable years beginning after  December 31, 2010 .”\nPub. L. 109–432, div. A, title III, §\u202f302(c)(1) ,  Dec. 20, 2006 ,  120 Stat. 2949 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions on or after the date of the enactment of this Act [ Dec. 20, 2006 ].”\nAmendment by  Pub. L. 108–173  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 1201(k) of Pub. L. 108–173 , set out as a note under  section 62 of this title .\nAmendment by  section 301(c)(1) of Pub. L. 104–191  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 301(j) of Pub. L. 104–191 , set out as a note under  section 62 of this title .\nAmendment by  section 321(c)(2) of Pub. L. 104–191  applicable to contracts issued after  Dec. 31, 1996 , see  section 321(f) of Pub. L. 104–191 , set out as an Effective Date note under  section 7702B of this title .\nPub. L. 101–239, title VII, §\u202f7862(c)(1)(C) ,  Dec. 19, 1989 ,  103 Stat. 2432 , provided that:  “The amendments made by this paragraph [amending this section and  section 1161 of Title 29 , Labor] shall apply to years beginning after  December 31, 1986 .”\nPub. L. 101–239, title VII, §\u202f7863 ,  Dec. 19, 1989 ,  103 Stat. 2434 , provided that:  “Except as otherwise provided in this subpart any amendment made by this subpart [subpart A (§§\u202f7861–7863) of part V of title VII of  Pub. L. 101–239 , amending this section and sections 162, 411, 417, and 4980B of this title and sections 1052 to 1055, 1161, 1162, 1167, 1398, and 1461 of Title 29, Labor, enacting provisions set out as notes under this section and sections 162, 417, 1167, 4980, and 4980B of this title, and amending provisions set out as notes under sections 401 and 411 of this title and sections 1001 and 1054 of Title 29], shall take effect as if included in the provision of the Reform Act [ Pub. L. 99–514 ] to which such amendment relates.”\nAmendment by  section 1018(t)(7)(A) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 3011(b)(1) of Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1988 , but not applicable to any plan for any plan year to which  section 162(k) of this title  (as in effect on the day before  Nov. 10, 1988 ) did not apply by reason of  section 10001(e)(2) of Pub. L. 99–272 , see  section 3011(d) of Pub. L. 100–647 , set out as a note under  section 162 of this title .\nAmendment by  section 1114(b)(1) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1114(c)(1) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by  section 1151(j)(2) of Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nPub. L. 99–272, title X, §\u202f10001(e) ,  Apr. 7, 1986 ,  100 Stat. 227 , provided that: \n “(1)   General rule .— The amendments made by this section [amending this section and  section 162 of this title ] shall apply to plan years beginning on or after  July 1, 1986 . \n \n “(2)   Special rule for collective bargaining agreements .— In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act [ Apr. 7, 1986 ], the amendments made by this section shall not apply to plan years beginning before the later of— “(A)  the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or \n \n “(B)   January 1, 1987 . \n \n\n For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement.”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': '2002—Par. (2).  Pub. L. 107–181  inserted “and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities” before period at end.\nPub. L. 107–181, §\u202f2(b) ,  May 20, 2002 ,  116 Stat. 583 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2001 . \n \n “(2)   Returns positions .— The amendment made by this section also shall apply to any taxable year beginning before  January 1, 2002 , for which the taxpayer— “(A)  on a return filed before  April 17, 2002 , limited the exclusion under section 107 of the Internal Revenue Code of 1986 as provided in such amendment, or \n \n “(B)  filed a return after  April 16, 2002 . \n \n \n “(3)   Other years before 2002 .— Except as provided in paragraph (2), notwithstanding any prior regulation, revenue ruling, or other guidance issued by the Internal Revenue Service, no person shall be subject to the limitations added to section 107 of such Code by this Act for any taxable year beginning before  January 1, 2002 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Subparagraphs (B), (C), (D), and (E) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case.\nSubparagraphs (C) and (D) of paragraph (1) shall not apply to a discharge to the extent the taxpayer is insolvent.\nParagraph (1)(B) shall not apply to a discharge to which paragraph (1)(E) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E).\nIn the case of a discharge to which paragraph (1)(B) applies, the amount excluded under paragraph (1)(B) shall not exceed the amount by which the taxpayer is insolvent.\nThe amount excluded from gross income under subparagraph (A), (B), or (C) of subsection (a)(1) shall be applied to reduce the tax attributes of the taxpayer as provided in paragraph (2).\nAny net operating loss for the taxable year of the discharge, and any net operating loss carryover to such taxable year.\nAny carryover to or from the taxable year of a discharge of an amount for purposes for determining the amount allowable as a credit under section 38 (relating to general business credit).\nThe amount of the minimum tax credit available under section 53(b) as of the beginning of the taxable year immediately following the taxable year of the discharge.\nAny net capital loss for the taxable year of the discharge, and any capital loss carryover to such taxable year under section 1212.\nThe basis of the property of the taxpayer.\nFor provisions for making the reduction described in clause (i), see section 1017.\nAny passive activity loss or credit carryover of the taxpayer under section 469(b) from the taxable year of the discharge.\nAny carryover to or from the taxable year of the discharge for purposes of determining the amount of the credit allowable under section 27.\nExcept as provided in subparagraph (B), the reductions described in paragraph (2) shall be one dollar for each dollar excluded by subsection (a).\nThe reductions described in subparagraphs (B), (C), and (G) shall be 33⅓ cents for each dollar excluded by subsection (a). The reduction described in subparagraph (F) in any passive activity credit carryover shall be 33⅓ cents for each dollar excluded by subsection (a).\nThe reductions described in paragraph (2) shall be made after the determination of the tax imposed by this chapter for the taxable year of the discharge.\nThe reductions described in subparagraph (A) or (D) of paragraph (2) (as the case may be) shall be made first in the loss for the taxable year of the discharge and then in the carryovers to such taxable year in the order of the taxable years from which each such carryover arose.\nThe reductions described in subparagraphs (B) and (G) of paragraph (2) shall be made in the order in which carryovers are taken into account under this chapter for the taxable year of the discharge.\nThe taxpayer may elect to apply any portion of the reduction referred to in paragraph (1) to the reduction under section 1017 of the basis of the depreciable property of the taxpayer.\nThe amount to which an election under subparagraph (A) applies shall not exceed the aggregate adjusted bases of the depreciable property held by the taxpayer as of the beginning of the taxable year following the taxable year in which the discharge occurs.\nParagraph (2) shall not apply to any amount to which an election under this paragraph applies.\nThe amount excluded from gross income under subparagraph (D) of subsection (a)(1) shall be applied to reduce the basis of the depreciable real property of the taxpayer.\nFor provisions making the reduction described in subparagraph (A), see section 1017.\nThe amount excluded under subparagraph (D) of subsection (a)(1) shall not exceed the aggregate adjusted bases of depreciable real property (determined after any reductions under subsections (b) and (g)) held by the taxpayer immediately before the discharge (other than depreciable real property acquired in contemplation of such discharge).\nFor purposes of paragraph (3)(B), the term “qualified acquisition indebtedness” means, with respect to any real property described in paragraph (3)(A), indebtedness incurred or assumed to acquire, construct, reconstruct, or substantially improve such property.\nThe Secretary shall issue such regulations as are necessary to carry out this subsection, including regulations preventing the abuse of this subsection through cross-collateralization or other means.\nFor purposes of this section, the term “title 11 case” means a case under title 11 of the United States Code (relating to bankruptcy), but only if the taxpayer is under the jurisdiction of the court in such case and the discharge of indebtedness is granted by the court or is pursuant to a plan approved by the court.\nFor purposes of this section, the term “insolvent” means the excess of liabilities over the fair market value of assets. With respect to any discharge, whether or not the taxpayer is insolvent, and the amount by which the taxpayer is insolvent, shall be determined on the basis of the taxpayer’s assets and liabilities immediately before the discharge.\nThe term “depreciable property” has the same meaning as when used in section 1017.\nIn the case of a partnership, subsections (a), (b), (c), and (g) shall be applied at the partner level.\nIn the case of an S corporation, subsections (a), (b), (c), and (g) shall be applied at the corporate level, including by not taking into account under section 1366(a) any amount excluded under subsection (a) of this section.\nIn the case of an S corporation, for purposes of subparagraph (A) of subsection (b)(2), any loss or deduction which is disallowed for the taxable year of the discharge under section 1366(d)(1) shall be treated as a net operating loss for such taxable year. The preceding sentence shall not apply to any discharge to the extent that subsection (a)(1)(D) applies to such discharge.\nFor purposes of subsection (e)(6), a shareholder’s adjusted basis in indebtedness of an S corporation shall be determined without regard to any adjustments made under section 1367(b)(2).\nIn any case under chapter 7 or 11 of title 11 of the United States Code to which section 1398 applies, for purposes of paragraphs (1) and (5) of subsection (b) the estate (and not the individual) shall be treated as the taxpayer. The preceding sentence shall not apply for purposes of applying section 1017 to property transferred by the estate to the individual.\nAn election under paragraph (5) of subsection (b) or under paragraph (3)(C) of subsection (c) shall be made on the taxpayer’s return for the taxable year in which the discharge occurs or at such other time as may be permitted in regulations prescribed by the Secretary.\nAn election referred to in subparagraph (A), once made, may be revoked only with the consent of the Secretary.\nAn election referred to in subparagraph (A) shall be made in such manner as the Secretary may by regulations prescribe.\nFor provision that no reduction is to be made in the basis of exempt property of an individual debtor, see section 1017(c)(1).\nExcept as otherwise provided in this section, there shall be no insolvency exception from the general rule that gross income includes income from the discharge of indebtedness.\nNo income shall be realized from the discharge of indebtedness to the extent that payment of the liability would have given rise to a deduction.\nThe amount taken into account with respect to any discharge shall be properly adjusted for unamortized premium and unamortized discount with respect to the indebtedness discharged.\nFor purposes of determining income of the debtor from discharge of indebtedness, to the extent provided in regulations prescribed by the Secretary, the acquisition of outstanding indebtedness by a person bearing a relationship to the debtor specified in section 267(b) or 707(b)(1) from a person who does not bear such a relationship to the debtor shall be treated as the acquisition of such indebtedness by the debtor. Such regulations shall provide for such adjustments in the treatment of any subsequent transactions involving the indebtedness as may be appropriate by reason of the application of the preceding sentence.\nFor purposes of this paragraph, sections 267(b) and 707(b)(1) shall be applied as if section 267(c)(4) provided that the family of an individual consists of the individual’s spouse, the individual’s children, grandchildren, and parents, and any spouse of the individual’s children or grandchildren.\nFor purposes of this paragraph, two entities which are treated as a single employer under subsection (b) or (c) of section 414 shall be treated as bearing a relationship to each other which is described in section 267(b).\nIn the case of any creditor who computes his taxable income under the cash receipts and disbursements method, proper adjustment shall be made in the amount taken into account under clause (ii) of subparagraph (A) for any amount which was not included in the creditor’s gross income but which would have been included in such gross income if such indebtedness had been satisfied in full.\nFor purposes of this paragraph, stock of a corporation in control (within the meaning of section 368(c)) of the debtor corporation shall be treated as stock of the debtor corporation.\nFor purposes of this paragraph, the term “debtor corporation” includes a successor corporation.\nUnder regulations prescribed by the Secretary, rules similar to the rules of the foregoing subparagraphs of this paragraph shall apply with respect to the indebtedness of a partnership.\nAny amount included in gross income by reason of the discharge of indebtedness shall not be taken into account for purposes of paragraphs (2) and (3) of section 856(c).\nFor purposes of determining income of a debtor from discharge of indebtedness, if a debtor issues a debt instrument in satisfaction of indebtedness, such debtor shall be treated as having satisfied the indebtedness with an amount of money equal to the issue price of such debt instrument.\nFor purposes of subparagraph (A), the issue price of any debt instrument shall be determined under sections 1273 and 1274. For purposes of the preceding sentence, section 1273(b)(4) shall be applied by reducing the stated redemption price of any instrument by the portion of such stated redemption price which is treated as interest for purposes of this chapter.\nIn the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of any student loan if such discharge was pursuant to a provision of such loan under which all or part of the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers.\nParagraph (1) shall not apply to the discharge of a loan made by an organization described in paragraph (2)(D) if the discharge is on account of services performed for either such organization.\nIn the case of an individual, gross income shall not include any amount received under section 338B(g) of the Public Health Service Act, under a State program described in section 338I of such Act, or under any other State loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas (as determined by such State).\nSubparagraph (C) of subsection (a)(1) shall apply only if the discharge is by a qualified person.\nFor purposes of subparagraph (A), the term “qualified person” has the meaning given to such term by section 49(a)(1)(D)(iv); except that such term shall include any Federal, State, or local government or agency or instrumentality thereof.\nFor purposes of subparagraph (A), the term “adjusted tax attributes” means the sum of the tax attributes described in subparagraphs (A), (B), (C), (D), (F), and (G) of subsection (b)(2) determined by taking into account $3 for each $1 of the attributes described in subparagraphs (B), (C), and (G) of subsection (b)(2) and the attribute described in subparagraph (F) of subsection (b)(2) to the extent attributable to any passive activity credit carryover.\nFor purposes of this paragraph, the term “qualified property” means any property which is used or is held for use in a trade or business or for the production of income.\nFor purposes of this paragraph, the adjusted basis of any qualified property and the amount of the adjusted tax attributes shall be determined after any reduction under subsection (b) by reason of amounts excluded from gross income under subsection (a)(1)(B).\nThe amount excluded from gross income by reason of subsection (a)(1)(E) shall be applied to reduce (but not below zero) the basis of the principal residence of the taxpayer.\nFor purposes of this section, the term “qualified principal residence indebtedness” means acquisition indebtedness (within the meaning of section 163(h)(3)(B), applied by substituting “$750,000 ($375,000” for “$1,000,000 ($500,000” in clause (ii) thereof and determined without regard to the substitution described in section 163(h)(3)(F)(i)(II)) with respect to the principal residence of the taxpayer.\nSubsection (a)(1)(E) shall not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer.\nIf any loan is discharged, in whole or in part, and only a portion of such loan is qualified principal residence indebtedness, subsection (a)(1)(E) shall apply only to so much of the amount discharged as exceeds the amount of the loan (as determined immediately before such discharge) which is not qualified principal residence indebtedness.\nFor purposes of this subsection, the term “principal residence” has the same meaning as when used in section 121.\nFor purposes of subparagraph (A), if any debt instrument is issued by an issuer and the proceeds of such debt instrument are used directly or indirectly by the issuer to reacquire an applicable debt instrument of the issuer, the debt instrument so issued shall be treated as issued for the debt instrument being reacquired. If only a portion of the proceeds from a debt instrument are so used, the rules of subparagraph (A) shall apply to the portion of any original issue discount on the newly issued debt instrument which is equal to the portion of the proceeds from such instrument used to reacquire the outstanding instrument.\nThe term “debt instrument” means a bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness (within the meaning of section 1275(a)(1)).\nThe term “acquisition” shall, with respect to any applicable debt instrument, include an acquisition of the debt instrument for cash, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, and the contribution of the debt instrument to capital. Such term shall also include the complete forgiveness of the indebtedness by the holder of the debt instrument.\nThe determination of whether a person is related to another person shall be made in the same manner as under subsection (e)(4).\nSuch election, once made, is irrevocable.\nIn the case of a partnership, S corporation, or other pass-thru entity, the election under this subsection shall be made by the partnership, the S corporation, or other entity involved.\nIf a taxpayer elects to have this subsection apply to an applicable debt instrument, subparagraphs (A), (B), (C), and (D) of subsection (a)(1) shall not apply to the income from the discharge of such indebtedness for the taxable year of the election or any subsequent taxable year.\nIn the case of the death of the taxpayer, the liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), the cessation of business by the taxpayer, or similar circumstances, any item of income or deduction which is deferred under this subsection (and has not previously been taken into account) shall be taken into account in the taxable year in which such event occurs (or in the case of a title 11 or similar case, the day before the petition is filed).\nThe rule of clause (i) shall also apply in the case of the sale or exchange or redemption of an interest in a partnership, S corporation, or other pass-thru entity by a partner, shareholder, or other person holding an ownership interest in such entity.\nIn the case of a partnership, any income deferred under this subsection shall be allocated to the partners in the partnership immediately before the discharge in the manner such amounts would have been included in the distributive shares of such partners under section 704 if such income were recognized at such time. Any decrease in a partner’s share of partnership liabilities as a result of such discharge shall not be taken into account for purposes of section 752 at the time of the discharge to the extent it would cause the partner to recognize gain under section 731. Any decrease in partnership liabilities deferred under the preceding sentence shall be taken into account by such partner at the same time, and to the extent remaining in the same amount, as income deferred under this subsection is recognized.\nSections 338B(g) and 338I of the Public Health Service Act, referred to in subsec. (f)(4), are classified to sections 254 l –1(g) and 254q–1, respectively, of Title 42, The Public Health and Welfare.\nSection 140(a) of the Truth in Lending Act, referred to in subsec. (f)(5), is classified to  section 1650(a) of Title 15 , Commerce and Trade. Section 140(a)(7) of the Act was redesignated section 140(a)(8) by  Pub. L. 115–174, title VI, §\u202f601(a)(1)(A) ,  May 24, 2018 ,  132 Stat. 1365 .\n2021—Subsec. (f)(5).  Pub. L. 117–2  added par. (5) and struck out former par. (5) which related to discharges on account of death or disability.\n2020—Subsec. (a)(1)(E).  Pub. L. 116–260, §\u202f114(a) , substituted “ January 1, 2026 ” for “ January 1, 2021 ” in two places.\nSubsec. (h)(2).  Pub. L. 116–260, §\u202f114(b) , substituted “$750,000 ($375,000” for “$2,000,000 ($1,000,000”.\n2019—Subsec. (a)(1)(E).  Pub. L. 116–94, §\u202f101(a) , substituted “ January 1, 2021 ” for “ January 1, 2018 ” in two places.\nSubsec. (h)(2).  Pub. L. 116–94, §\u202f101(b) , inserted “and determined without regard to the substitution described in section 163(h)(3)(F)(i)(II)” after “clause (ii) thereof”.\n2018—Subsec. (a)(1)(E).  Pub. L. 115–123  substituted “ January 1, 2018 ” for “ January 1, 2017 ” in two places.\n2017—Subsec. (f)(5).  Pub. L. 115–97  added par. (5).\n2015—Subsec. (a)(1)(E).  Pub. L. 114–113, §\u202f151(b) , substituted “discharged—” for “discharged before  January 1, 2017 .” and added cls. (i) and (ii).\nPub. L. 114–113, §\u202f151(a) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\n2014—Subsec. (a)(1)(E).  Pub. L. 113–295  substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\n2013—Subsec. (a)(1)(E).  Pub. L. 112–240  substituted “ January 1, 2014 ” for “ January 1, 2013 ”.\n2010—Subsec. (f)(4).  Pub. L. 111–148  amended par. (4) generally. Prior to amendment, text read as follows: “In the case of an individual, gross income shall not include any amount received under section 338B(g) of the Public Health Service Act or under a State program described in section 338I of such Act.”\n2009—Subsec. (i).  Pub. L. 111–5  added subsec. (i).\n2008—Subsec. (a)(1)(E).  Pub. L. 110–343  substituted “ January 1, 2013 ” for “ January 1, 2010 ”.\n2007—Subsec. (a)(1)(E).  Pub. L. 110–142, §\u202f2(a) , added subpar. (E).\nSubsec. (a)(2)(A).  Pub. L. 110–142, §\u202f2(c)(1) , substituted “(D), and (E)” for “and (D)”.\nSubsec. (a)(2)(C).  Pub. L. 110–142, §\u202f2(c)(2) , added subpar. (C).\nSubsec. (h).  Pub. L. 110–142, §\u202f2(b) , added subsec. (h).\n2004—Subsec. (e)(8).  Pub. L. 108–357, §\u202f896(a) , amended heading and text of par. (8) generally. Prior to amendment, text read as follows: “For purposes of determining income of a debtor from discharge of indebtedness, if a debtor corporation transfers stock to a creditor in satisfaction of its indebtedness, such corporation shall be treated as having satisfied the indebtedness with an amount of money equal to the fair market value of the stock.”\nSubsec. (f)(4).  Pub. L. 108–357, §\u202f320(a) , added par. (4).\n2002—Subsec. (d)(7)(A).  Pub. L. 107–147  inserted “,\u2000including by not taking into account under section 1366(a) any amount excluded under subsection (a) of this section” before period at end.\n1998—Subsec. (f)(2).  Pub. L. 105–206, §\u202f6004(f)(1) , amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “The term ‘student loan’ includes any loan made by an educational organization so described or by an organization exempt from tax under section 501(a) to refinance a loan meeting the requirements of the preceding sentence.”\nSubsec. (f)(3).  Pub. L. 105–206, §\u202f6004(f)(2) , struck out “(or by an organization described in paragraph (2)(E) from funds provided by an organization described in paragraph (2)(D))” after “paragraph (2)(D)”.\n1997—Subsec. (f)(2).  Pub. L. 105–34, §\u202f225(a)(1) , added subpar. (D) and concluding provisions and struck out former subpar. (D) which read as follows: “any educational organization so described pursuant to an agreement with any entity described in subparagraph (A), (B), or (C) under which the funds from which the loan was made were provided to such educational organization.”\nSubsec. (f)(2)(B).  Pub. L. 105–34, §\u202f225(a)(1) , struck out “or” at end.\nSubsec. (f)(3).  Pub. L. 105–34, §\u202f225(a)(2) , added par. (3).\n1996—Subsec. (d)(9)(A).  Pub. L. 104–188  substituted “paragraph (3)(C)” for “paragraph (3)(B)”.\n1993—Subsec. (a)(1)(D).  Pub. L. 103–66, §\u202f13150(a) , added subpar. (D).\nSubsec. (a)(2)(A).  Pub. L. 103–66, §\u202f13150(c)(1) , substituted “,\u2000(C), and (D)” for “and (C)”.\nSubsec. (a)(2)(B).  Pub. L. 103–66, §\u202f13150(c)(2) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “Subparagraph (C) of paragraph (1) shall not apply to a discharge to the extent the taxpayer is insolvent.”\nSubsec. (b)(2)(C) to (E).  Pub. L. 103–66, §\u202f13226(b)(1) , added subpar. (C) and redesignated former subpars. (C) and (D) as (D) and (E), respectively. Former subpar. (E) redesignated (F).\nSubsec. (b)(2)(F).  Pub. L. 103–66, §\u202f13226(b)(2) , added subpar. (F). Former subpar. (F) redesignated (G).\nPub. L. 103–66, §\u202f13226(b)(1) , redesignated subpar. (E) as (F).\nSubsec. (b)(2)(G).  Pub. L. 103–66, §\u202f13226(b)(2) , redesignated subpar. (F) as (G).\nSubsec. (b)(3)(B).  Pub. L. 103–66, §\u202f13226(b)(3)(A) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “The reductions described in subparagraphs (B) and (E) of paragraph (2) shall be 33⅓ cents for each dollar excluded by subsection (a).”\nSubsec. (b)(4)(B).  Pub. L. 103–66, §\u202f13226(b)(3)(B) , substituted “(D)” for “(C)” in heading and text.\nSubsec. (b)(4)(C).  Pub. L. 103–66, §\u202f13226(b)(3)(C) , substituted “(G)” for “(E)” in heading and text.\nSubsec. (c).  Pub. L. 103–66, §\u202f13150(b) , added subsec. (c).\nSubsec. (d).  Pub. L. 103–66, §\u202f13150(c)(3)(B) , substituted “certain provisions” for “subsections (a), (b) and (g)” in heading.\nSubsec. (d)(6), (7)(A).  Pub. L. 103–66, §\u202f13150(c)(3)(A) , (C), substituted “Certain provisions” for “Subsections (a), (b) and (g)” in heading and “subsections (a), (b), (c), and (g)” for “subsections (a), (b), and (g)” in text.\nSubsec. (d)(7)(B).  Pub. L. 103–66, §\u202f13150(c)(4) , inserted at end “The preceding sentence shall not apply to any discharge to the extent that subsection (a)(1)(D) applies to such discharge.”\nSubsec. (d)(9)(A).  Pub. L. 103–66, §\u202f13150(c)(5) , inserted “or under paragraph (3)(B) of subsection (c)” after “subsection (b)”.\nSubsec. (e)(6).  Pub. L. 103–66, §\u202f13226(a)(2)(B) , substituted “Except as provided in regulations, for” for “For”.\nSubsec. (e)(8).  Pub. L. 103–66, §\u202f13226(a)(1)(B) , amended heading and text of par. (8) generally. Prior to amendment, text read as follows: “For purposes of determining income of the debtor from discharge of indebtedness, the stock for debt exception shall not apply—\n“(A) to the issuance of nominal or token shares, or\n“(B) with respect to an unsecured creditor, where the ratio of the value of the stock received by such unsecured creditor to the amount of his indebtedness cancelled or exchanged for stock in the workout is less than 50 percent of a similar ratio computed for all unsecured creditors participating in the workout.\nAny stock which is disqualified stock (as defined in paragraph (10)(B)(ii)) shall not be treated as stock for purposes of this paragraph.”\nSubsec. (e)(10), (11).  Pub. L. 103–66, §\u202f13226(a)(1)(A) , redesignated par. (11) as (10) and struck out former par. (10) which related to satisfaction of indebtedness by transfer of corporation’s stock.\nSubsec. (g)(3)(B).  Pub. L. 103–66, §\u202f13226(b)(3)(D) , substituted “subparagraphs (A), (B), (C), (D), (F), and (G)” for “subparagraphs (A), (B), (C), and (E)” and “subparagraphs (B), (C), and (G)” for “subparagraphs (B) and (E)” and inserted before period at end “and the attribute described in subparagraph (F) of subsection (b)(2) to the extent attributable to any passive activity credit carryover”.\n1990—Subsec. (e)(8).  Pub. L. 101–508, §\u202f11325(b)(2) , inserted provision at end that any stock which is a disqualified stock, as so defined, not be treated as stock for purposes of this paragraph.\nSubsec. (e)(10)(B).  Pub. L. 101–508, §\u202f11325(b)(1) , substituted heading for one which read: “Exception for title 11 cases and insolvent debtors” and amended text generally. Prior to amendment, text read as follows: “Subparagraph (A) shall not apply in the case of a debtor in a title 11 case or to the extent the debtor is insolvent.”\nSubsec. (e)(11).  Pub. L. 101–508, §\u202f11325(a)(1) , added par. (11).\nSubsec. (g)(1)(B).  Pub. L. 101–508, §\u202f11813(b)(6) , substituted “section 49(a)(1)(D)(iv)” for “section 46(c)(8)(D)(iv)”.\n1988—Subsec. (a)(1)(C).  Pub. L. 100–647, §\u202f1004(a)(1) , added subpar. (C).\nSubsec. (a)(2).  Pub. L. 100–647, §\u202f1004(a)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Subparagraph (B) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case.”\nSubsec. (b).  Pub. L. 100–647, §\u202f1004(a)(3) , struck out “in title 11 case or insolvency” after “Reduction of tax attributes” in heading and substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)” in text of par. (1).\nSubsec. (d).  Pub. L. 100–647, §\u202f1004(a)(6)(B) , which directed amendment of subsec. (d) heading by substituting “subsections (a), (b), and (g)” for “subsections (a), and (b)”, was executed by making the substitution for “subsections (a) and (b)” as the probable intent of Congress.\nSubsec. (d)(6).  Pub. L. 100–647, §\u202f1004(a)(6)(A) , (C), substituted “Subsections (a), (b), and (g)” for “Subsections (a) and (b)” in heading and “subsections (a), (b), and (g)” for “subsections (a) and (b)” in text.\nSubsec. (d)(7)(A).  Pub. L. 100–647, §\u202f1004(a)(6)(A) , (C), substituted “Subsections (a), (b), and (g)” for “Subsections (a) and (b)” in heading and “subsections (a), (b), and (g)” for “subsections (a) and (b)” in text.\nSubsec. (g).  Pub. L. 100–647, §\u202f1004(a)(4) , substituted “indebtedness” for “indebtedness of solvent farmers” in heading and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—For purposes of this section and section 1017, the discharge by a qualified person of qualified farm indebtedness of a taxpayer who is not insolvent at the time of the discharge shall be treated in the same manner as if the discharge had occurred when the taxpayer was insolvent.\n“(2)  Qualified farm indebtedness .—For purposes of this subsection, indebtedness of a taxpayer shall be treated as qualified farm indebtedness if—\n“(A) such indebtedness was incurred directly in connection with the operation by the taxpayer of the trade or business of farming, and\n“(B) 50 percent or more of the average annual gross receipts of the taxpayer for the 3 taxable years preceding the taxable year in which the discharge of such indebtedness occurs is attributable to the trade or business of farming.\n“(3)  Qualified person .—For purposes of this subsection, the term ‘qualified person’ means a person described in section 46(c)(8)(D)(iv).”\n1986—Subsec. (a)(1)(C).  Pub. L. 99–514, §\u202f822(a) , struck out subpar. (C) relating to exclusion from gross income if the indebtedness discharged is qualified business indebtedness.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f822(b)(1) , substituted “Subparagraph (B) of paragraph (1)” for “Subparagraphs (B) and (C) of paragraph (1)” in subpar. (A), struck out subpar. (A) designation and heading, and struck out subpar. (B) providing that insolvency exclusion takes precedence over qualified business exclusion.\nSubsec. (b)(2)(B).  Pub. L. 99–514, §\u202f231(d)(3)(D) , substituted “General business credit” for “Research credit and general business credit” in heading and amended text, as amended by this Act ( Pub. L. 99–514, §\u202f1171(b)(4)  (see below)), generally. Prior to amendment, text read as follows: “Any carryover to or from the taxable year of a discharge of an amount for purposes of determining the amount allowable as a credit under—\n“(i) section 30 (relating to credit for increasing research activities), or\n“(ii) section 38 (relating to general business credit).\nFor purposes of this subparagraph, there shall not be taken into account any portion of a carryover which is attributable to the employee stock ownership credit determined under section 41.”\nPub. L. 99–514, §\u202f1171(b)(4) , struck out last sentence which had been eliminated by the general amendment of subpar. (B) by  Pub. L. 99–514, §\u202f231(d)(3)(D) . See above.\nSubsec. (b)(2)(E).  Pub. L. 99–514, §\u202f1847(b)(7) , substituted “section 27” for “section 33”.\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f104(b)(2) , substituted “33⅓ cents” for “50 cents”.\nSubsec. (c).  Pub. L. 99–514, §\u202f822(b)(2) , struck out subsec. (c) relating to tax treatment of discharge of qualified business indebtedness.\nSubsec. (d).  Pub. L. 99–514, §\u202f822(b)(3)(B) , struck out reference to subsec. (c) in heading.\nSubsec. (d)(4).  Pub. L. 99–514, §\u202f822(b)(3)(A) , struck out par. (4) relating to treatment of indebtedness as qualified business indebtedness.\nSubsec. (d)(6), (7)(A).  Pub. L. 99–514, §\u202f822(b)(3)(B) , struck out reference to subsec. (c) in heading and text.\nSubsec. (d)(7)(B).  Pub. L. 99–514, §\u202f822(b)(3)(C) , struck out “The preceding sentence shall not apply to any discharge to the extent that subsection (a)(1)(C) applies to such discharge.”\nSubsec. (d)(9)(A).  Pub. L. 99–514, §\u202f822(b)(3)(D) , struck out “under paragraph (4) of this subsection or” after “An election”.\nSubsec. (e)(7)(A)(ii)(I).  Pub. L. 99–514, §\u202f805(c)(2) , substituted “subsection (a) or (b) of section 166” for “subsection (a), (b), or (c) of section 166”.\nSubsec. (e)(7)(B) to (D).  Pub. L. 99–514, §\u202f805(c)(3) , redesignated subpars. (C) to (E) as (B) to (D), respectively, and struck out former subpar. (B) which related to taxpayers on reserve method.\nSubsec. (e)(7)(E), (F).  Pub. L. 99–514, §\u202f805(c)(3) , (4), redesignated subpar. (F) as (E) and substituted “the foregoing subparagraphs” for “subparagraphs (A), (B), (C), (D), and (E)”. Former subpar. (E) redesignated (D).\nSubsec. (e)(10)(C).  Pub. L. 99–514, §\u202f621(e) , repealed the amendment by  Pub. L. 98–369, §\u202f59(b)(1) , which had added subpar. (C) creating an exception for transfers in certain workouts of the satisfaction of indebtedness by corporation’s stock. See 1984 Amendment note below.\nSubsec. (g).  Pub. L. 99–514, §\u202f405(a) , added subsec. (g).\n1984—Subsec. (b)(2)(B).  Pub. L. 98–369, §\u202f474(r)(5) , substituted provisions relating to research credits and general business credits covering carryovers to or from the taxable year of a discharge of an amount for purposes of determining the amount allowable as a credit under section 30 (relating to credit for increasing research activities), or section 38 (relating to general business credit), and directing that there shall not be taken into account any portion of a carryover which is attributable to the employee stock ownership credit determined under section 41 for former provisions covering carryovers to or from the taxable year of the discharge of an amount for purposes of determining the amount of a credit allowable under section 38 (relating to investment in certain depreciable property), section 40 (relating to expenses of work incentive programs), section 44B (relating to credit for employment of certain new employees), section 44E (relating to alcohol used as a fuel), or section 44F (relating to credit for increasing research activities), and directing that, for purposes of clause (i), there could not be taken into account any portion of a carryover which was attributable to the employee plan credit (within the meaning of section 48( o )(3)).\nSubsec. (d)(6).  Pub. L. 98–369, §\u202f721(b)(2) , struck out “or S corporation shareholder level” in heading and second sentence which provided that “In the case of an S corporation, subsections (a), (b), and (c) shall apply at the shareholder level.”. See par. (7)(A).\nSubsec. (d)(7) to (10).  Pub. L. 98–369, §\u202f721(b)(2) , added par. (7) and redesignated former pars. (7) to (9) as (8) to (10), respectively.\nSubsec. (e)(10).  Pub. L. 98–369, §\u202f59(a) , added par. (10).\nSubsec. (e)(10)(C).  Pub. L. 98–369, §\u202f59(b)(1) , which added subpar. (C), effective as if included in the amendments made by section 806(e) and (f) of  Pub. L. 94–455 , was repealed by  Pub. L. 99–514, §\u202f621(e) , (f)(2), eff.  Jan. 1, 1986 , with certain exceptions, see Effective Date of 1986 Amendment note below.\nSubsec. (f).  Pub. L. 98–369, §\u202f1076(a) , added subsec. (f).\n1983—Subsec. (b)(2)(B)(v).  Pub. L. 97–448, §\u202f102(h)(1) , added cl. (v).\nSubsec. (e)(7)(A)(iii).  Pub. L. 97–448, §\u202f304(d) , added cl. (iii).\n1982—Subsec. (d)(6).  Pub. L. 97–354  inserted “or S corporation shareholder level” in heading and inserted “In the case of an S corporation, subsections (a), (b), and (c) shall be applied at the shareholder level.”\n1980— Pub. L. 96–589  completely revised and expanded provisions by specifying the types of indebtedness and by setting out priorities among the exclusions, to reflect the revision of Title 11, Bankruptcy, in 1978.\n1976— Pub. L. 94–455, §\u202f1951(b)(2)(A) , struck out “(a) Special rule of exclusion.—” after “Income from discharge of indebtedness” and struck out subsec. (b) which related to discharge, cancellation, or modification of indebtedness of certain railroad corporations.\nPub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1960—Subsec. (b).  Pub. L. 86–496  provided that if the discharge, cancellation, or modification of any indebtedness is effected pursuant to a court order in a receivership proceeding or in a proceeding under section 77 of the Bankruptcy Act, commenced before  Jan. 1, 1960 , then no amount is to be included in gross income with respect to it, and struck out provisions which made subsection inapplicable to discharges occurring in a taxable year beginning after  Dec. 31, 1957 .\n1956—Subsec. (b). Act  June 29, 1956 , substituted “ December 31, 1957 ” for “ December 31, 1955 ”.\nPub. L. 117–2, title IX, §\u202f9675(b) ,  Mar. 11, 2021 ,  135 Stat. 186 , provided that:  “The amendment made by this section [amending this section] shall apply to discharges of loans after  December 31, 2020 .”\nPub. L. 116–260, div. EE, title I, §\u202f114(c) ,  Dec. 27, 2020 ,  134 Stat. 3050 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges of indebtedness after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f101(c) ,  Dec. 20, 2019 ,  133 Stat. 3228 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges of indebtedness after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40201(b) ,  Feb. 9, 2018 ,  132 Stat. 145 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges of indebtedness after  December 31, 2016 .”\nPub. L. 115–97, title I, §\u202f11031(b) ,  Dec. 22, 2017 ,  131 Stat. 2081 , provided that:  “The amendment made by this section [amending this section] shall apply to discharges of indebtedness after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f151(c) ,  Dec. 18, 2015 ,  129 Stat. 3066 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to discharges of indebtedness after  December 31, 2014 . \n \n “(2)   Modification .— The amendment made by subsection (b) [amending this section] shall apply to discharges of indebtedness after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f102(b) ,  Dec. 19, 2014 ,  128 Stat. 4013 , provided that:  “The amendment made by this section [amending this section] shall apply to indebtedness discharged after  December 31, 2013 .”\nPub. L. 112–240, title II, §\u202f202(b) ,  Jan. 2, 2013 ,  126 Stat. 2323 , provided that:  “The amendment made by this section [amending this section] shall apply to indebtedness discharged after  December 31, 2012 .”\nPub. L. 111–148, title X, §\u202f10908(b) ,  Mar. 23, 2010 ,  124 Stat. 1021 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts received by an individual in taxable years beginning after  December 31, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1231(b) ,  Feb. 17, 2009 ,  123 Stat. 341 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges in taxable years ending after  December 31, 2008 .”\nPub. L. 110–343, div. A, title III, §\u202f303(b) ,  Oct. 3, 2008 ,  122 Stat. 3807 , provided that:  “The amendment made by this section [amending this section] shall apply to discharges of indebtedness occurring on or after  January 1, 2010 .”\nPub. L. 110–142, §\u202f2(d) ,  Dec. 20, 2007 ,  121 Stat. 1804 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges of indebtedness on or after  January 1, 2007 .”\nPub. L. 108–357, title III, §\u202f320(c) ,  Oct. 22, 2004 ,  118 Stat. 1473 , provided that:  “The amendments made by this section [amending this section, sections 3121, 3231, 3306, and 3401 of this title, and  section 409 of Title 42 , The Public Health and Welfare] shall apply to amounts received by an individual in taxable years beginning after  December 31, 2003 .”\nPub. L. 108–357, title VIII, §\u202f896(b) ,  Oct. 22, 2004 ,  118 Stat. 1649 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to cancellations of indebtedness occurring on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 107–147, title IV, §\u202f402(b) ,  Mar. 9, 2002 ,  116 Stat. 40 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by this section [amending this section] shall apply to discharges of indebtedness after  October 11, 2001 , in taxable years ending after such date. \n \n “(2)   Exception .— The amendment made by this section shall not apply to any discharge of indebtedness before  March 1, 2002 , pursuant to a plan of reorganization filed with a bankruptcy court on or before  October 11, 2001 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title II, §\u202f225(b) ,  Aug. 5, 1997 ,  111 Stat. 820 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges of indebtedness after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nPub. L. 103–66, title XIII, §\u202f13150(d) ,  Aug. 10, 1993 ,  107 Stat. 448 , provided that:  “The amendments made by this section [amending this section and sections 703 and 1017 of this title] shall apply to discharges after  December 31, 1992 , in taxable years ending after such date.”\nPub. L. 103–66, title XIII, §\u202f13226(a)(3) ,  Aug. 10, 1993 ,  107 Stat. 487 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section and  section 382 of this title ] shall apply to stock transferred after  December 31, 1994 , in satisfaction of any indebtedness. \n \n “(B)   Exception for title 11 cases .— The amendments made by this subsection shall not apply to stock transferred in satisfaction of any indebtedness if such transfer is in a title 11 or similar case (as defined in section 368(a)(3)(A) of the Internal Revenue Code of 1986) which was filed on or before  December 31, 1993 .”\nPub. L. 103–66, title XIII, §\u202f13226(b)(4) ,  Aug. 10, 1993 ,  107 Stat. 488 , provided that:  “The amendments made by this subsection [amending this section] shall apply to discharges of indebtedness in taxable years beginning after  December 31, 1993 .”\nPub. L. 101–508, title XI, §\u202f11325(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–466 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 1275 of this title ] shall apply to debt instruments issued, and stock transferred, after  October 9, 1990 , in satisfaction of any indebtedness. \n \n “(2)   Exceptions .— The amendments made by this section shall not apply to any debt instrument issued, or stock transferred, in satisfaction of any indebtedness if such issuance or transfer (as the case may be)— “(A)  is in a title 11 or similar case (as defined in section 368(a)(3)(A) of the Internal Revenue Code of 1986) which was filed on or before  October 9, 1990 , \n \n “(B)  is pursuant to a written binding contract in effect on  October 9, 1990 , and at all times thereafter before such issuance or transfer, \n \n “(C)  is pursuant to a transaction which was described in documents filed with the Securities and Exchange Commission on or before  October 9, 1990 , or \n \n “(D)  is pursuant to a transaction— “(i)  the material terms of which were described in a written public announcement on or before  October 9, 1990 , \n \n “(ii)  which was the subject of a prior filing with the Securities and Exchange Commission, and \n \n “(iii)  which is the subject of a subsequent filing with the Securities and Exchange Commission before  January 1, 1991 .”\nAmendment by  section 11813(b)(6) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 104(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 231(d)(3)(D) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nPub. L. 99–514, title IV, §\u202f405(c) ,  Oct. 22, 1986 ,  100 Stat. 2224 , provided that:  “The amendments made by this section [amending this section and  section 1017 of this title ] shall apply to discharges of indebtedness occurring after  April 9, 1986 , in taxable years ending after such date.”\nRepeal by  section 621(e)(1) of Pub. L. 99–514  of amendment by  section 59(b)(1) of Pub. L. 99–369 , which was effective as if included in the amendments made by section 806(e) and (f) of  Pub. L. 94–455 , effective  Jan. 1, 1986 , with certain exceptions, see  section 621(f)(2) of Pub. L. 99–514 , set out as a note under  section 382 of this title .\nAmendment by section 805(c)(2), (4) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain changes required in method of accounting, see  section 805(d) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nPub. L. 99–514, title VIII, §\u202f822(c) ,  Oct. 22, 1986 ,  100 Stat. 2373 , provided that:  “The amendments made by this section [amending this section and  section 1017 of this title ] shall apply to discharges after  December 31, 1986 .”\nAmendment by  section 1171(b)(4) of Pub. L. 99–514  applicable to compensation paid or accrued after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 1171(c) of Pub. L. 99–514 , set out as a note under  section 38 of this title .\nAmendment by  section 1847(b)(7) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f59(b)(2) ,  July 18, 1984 ,  98 Stat. 577 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if it had been included in the amendments made by subsections (e) and (f) of section 806 of the Tax Reform Act of 1976 [ Pub. L. 94–455 ].” \n See Effective Date of 1976 Amendment note set out under  section 382 of this title .\nPub. L. 98–369, div. A, title I, §\u202f59(b)[(c)] ,  July 18, 1984 ,  98 Stat. 577 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to transfers after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Transitional rule .— The amendment made by subsection (a) shall not apply to the transfer by a corporation of its stock in exchange for debt of the corporation after the date of the enactment of this Act if such transfer is— “(A)  pursuant to a written contract requiring such transfer which was binding on the corporation at all times on  June 7, 1984 , and at all times after such date but only if the transfer takes place before  January 1, 1985 , and only if the transferee held the debt at all times on  June 7, 1984 , or \n \n “(B)  pursuant to the exercise of an option to exchange debt for stock but only if such option was in effect at all times on  June 7, 1984 , and at all times after such date and only if at all times on  June 7, 1984 , the option and the debt were held by the same person. \n \n \n “(3)   Certain transfers to controlling shareholder .— The amendment made by subsection (a) shall not apply to any transfer before  January 1, 1985 , by a corporation of its stock in exchange for debt of such corporation if— “(A)  such transfer is to another corporation which at all times on  June 7, 1984 , owned 75 percent or more of the total value of the stock of the corporation making such transfer, and \n \n “(B)  immediately after such transfer, the transferee corporation owns 80 percent or more of the total value of the stock of the transferor corporation. \n \n \n “(4)   Certain transfers pursuant to debt restructure agreement .— The amendment made by subsection (a) shall not apply to the transfer by a corporation of its stock in exchange for debt of the corporation after the date of the enactment of this Act and before  January 1, 1985 , if— “(A)  such transfer is covered by a debt restructure agreement entered into by the corporation during November 1983, and \n \n “(B)  such agreement was specified in a registration statement filed with the Securities and Exchange Commission by the corporation on  March 7, 1984 .”\nAmendment by  section 474(r)(5) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 721(b) of Pub. L. 98–369  applicable to contributions to capital after  Dec. 31, 1980 , in taxable years ending after such date, see  section 721(y)(2) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1076(b) ,  July 18, 1984 ,  98 Stat. 1054 , provided that:  “The amendments made by this section [amending this section] shall apply to discharges of indebtedness made on or after  January 1, 1983 .”\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 96–589, §\u202f7 ,  Dec. 24, 1980 ,  94 Stat. 3411 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   For Section  2  (Relating to Tax Treatment of Discharge of Indebtedness).— “(1)   In general.— Except as provided in paragraph (2), the amendments made by section 2 [amending this section and sections 111, 118, 382, 703 and 1017 of this title] shall apply to any transaction which occurs after  December 31, 1980 , other than a transaction which occurs in a proceeding in a bankruptcy case or similar judicial proceeding (or in a proceeding under the Bankruptcy Act) [Title 11, Bankruptcy] commencing on or before  December 31, 1980 . \n \n “(2)   Transitional rule.— In the case of any discharge of indebtedness to which subparagraph (A) or (B) of section 108(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to exclusion from gross income), as amended by section 2, applies and which occurs before  January 1, 1982 , or which occurs in a proceeding in a bankruptcy case or similar judicial proceedings commencing before  January 1, 1982 , then— “(A)  section 108(b)(2) of the such Code (relating to reduction of tax attributes), as so amended, shall be applied without regard to subparagraphs (A), (B), (C), and (E) thereof, and \n \n “(B)  the basis of any property shall not be reduced under section 1017 of such Code (relating to reduction in basis in connection with discharges of indebtedness), as so amended, below the fair market value of such property on the date the debt is discharged. \n \n \n \n “(b)   For Section  3  (Relating to Rules Relating to Title  11  Cases for Individuals).— The amendments made by section 3 [enacting sections 1398 and 1399 of this title and amending sections 443, 6012 and 6103 of this title] shall apply to any bankruptcy case commencing more than 90 days after the date of the enactment of this Act [ Dec. 24, 1980 ]. \n \n “(c)   For Section  4  (Relating to Corporate Reorganization Provisions).— “(1)   In general.— The amendments made by section 4 [enacting  section 370 of this title  and amending sections 354, 355, 357, 368 and 381 of this title] shall apply to any bankruptcy case or similar judicial proceeding commencing after  December 31, 1980 . \n \n “(2)   Exchanges of property for accrued interest.— The amendments made by subsection (e) of section 4 [amending sections 354 and 355 of this title] (relating to treatment of property attributable to accrued interest) shall also apply to any exchange— “(A)  which occurs after  December 31, 1980 , and \n \n “(B)  which does not occur in a bankruptcy case or similar judicial proceeding (or in a proceeding under the Bankruptcy Act) commenced on or before  December 31, 1980 . \n \n \n \n “(d)   For Section  5  (Relating to Miscellaneous Corporate Amendments).— “(1)   For subsection  (a)  (relating to exemption from personal holding company tax).— The amendments made by subsection (a) of section 5 [amending  section 542 of this title ] shall apply to any bankruptcy case or similar judicial proceeding commenced after  December 31, 1980 . \n \n “(2)   For subsection  (b)  (relating to repeal of special treatment for certain railroad redemptions).— The amendments made by subsection (b) of section 5 [amending  section 302 of this title ] shall apply to stock which is issued after  December 31, 1980  (other than stock issued pursuant to a plan of reorganization approved on or before that date). \n \n “(3)   For subsection  (c)  (relating to application of 12-month liquidation rule).— The amendment made by subsection (c) of section 5 [amending  section 337 of this title ] shall apply to any bankruptcy case or similar judicial proceeding commenced after  December 31, 1980 . \n \n “(4)   For subsection  (d)  (relating to permitting bankruptcy estate to be subchapter s shareholder).— The amendment made by subsection (d) of section 5 [amending  section 1371 of this title ] shall apply to any bankruptcy case commenced on or after  October 1, 1979 . \n \n “(5)   For subsection  (e)  (relating to certain transfers to controlled corporations).— The amendments made by subsection (e) of section 5 [amending  section 351 of this title ] shall apply as provided in subsection (a) of this section. \n \n “(6)   For subsection  (f)  (relating to effect of debt discharge on earnings and profits).— The amendment made by subsection (f) of section 5 [amending  section 312 of this title ] shall apply as provided in subsection (a) of this section. \n \n \n “(e)   For Section  6  (Relating to Changes in Tax Procedures).— The amendments made by section 6 [enacting sections 6658 and 7464 of this title, amending sections 128, 354, 422, 1023, 3302, 6012, 6036, 6155, 6161, 6212, 6213, 6216, 6326 [now 6327], 6404, 6503, 6512, 6532, 6871, 6872, 6873, 7430, and 7508 of this title, repealing  section 1018 of this title , and redesignating former  section 7464 of this title  as 7465] shall take effect on  October 1, 1979 , but shall not apply to any proceeding under the Bankruptcy Act [Title 11] commenced before  October 1, 1979 . \n \n “(f)   Election To Substitute September  30, 1979,  for December  31, 1980.— “(1)   In general.— The debtor (or debtors) in a bankruptcy case or similar judicial proceeding may (with the approval of the court) elect to apply subsections (a), (c), and (d) by substituting ‘ September 30, 1979 ’ for ‘ December 31, 1980 ’ each place it appears in such subsections. \n \n “(2)   Effect of election.— Any election made under paragraph (1) with respect to any proceeding shall apply to all parties to the proceeding. \n \n “(3)   Revocation only with consent.— Any election under this subsection may be revoked only with the consent of the Secretary of the Treasury or his delegate. \n \n “(4)   Time and manner of election.— Any election under this subsection shall be made at such time, and in such manner, as the Secretary of the Treasury or his delegate may by regulations prescribe. \n \n \n “(g)   Definitions.— For purposes of this section— “(1)   Bankruptcy case.— The term ‘bankruptcy case’ means any case under title 11 of the United States Code (as recodified by  Public Law 95–598 ). \n \n “(2)   Similar judicial proceeding.— The term ‘similar judicial proceeding’ means a receivership, foreclosure, or similar proceeding in a Federal or State court (as modified by section 368(a)(3)(D) of the Internal Revenue Code of 1986).”\nAmendment by  section 1951(b)(2)(A) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nPub. L. 86–496, §\u202f1(b) ,  June 8, 1960 ,  74 Stat. 164 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1959 , but only with respect to discharges occurring after such date.”\nFor provisions that nothing in amendment by  section 11813 of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 94–455, title XIX, §\u202f1951(b)(2)(B) ,  Oct. 4, 1976 ,  90 Stat. 1837 , provided that:  “If any discharge, cancellation, or modification of indebtedness of a railroad corporation occurs in a taxable year beginning after  December 31, 1976 , pursuant to an order of a court in a proceeding referred to in section 108(b)(A) or (B) which commenced before  January 1, 1960 , then, notwithstanding the amendments made by subparagraph (A) [amending this section] the provisions of subsection (b) of section 108 shall be considered as not repealed with respect to such discharge, cancellation, or modification of indebtedness.”\nPub. L. 107–134, title I, §\u202f105 ,  Jan. 23, 2002 ,  115 Stat. 2432 , provided that: \n “(a)   In General .— For purposes of the Internal Revenue Code of 1986— “(1)  gross income shall not include any amount which (but for this section) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of any taxpayer if the discharge is by reason of the death of an individual incurred as the result of the terrorist attacks against the United States on  September 11, 2001 , or as the result of illness incurred as a result of an attack involving anthrax occurring on or after  September 11, 2001 , and before  January 1, 2002 ; and \n \n “(2)  return requirements under section 6050P of such Code shall not apply to any discharge described in paragraph (1). \n \n \n “(b)   Effective Date .— This section shall apply to discharges made on or after  September 11, 2001 , and before  January 1, 2002 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income does not include income (other than rent) derived by a lessor of real property on the termination of a lease, representing the value of such property attributable to buildings erected or other improvements made by the lessee.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Qualified long-term real property constructed or improved in connection with any amount excluded from a lessee’s income by reason of subsection (a) shall be treated as nonresidential real property of the lessor (including for purposes of section 168(i)(8)(B)).\nThe term “qualified long-term real property” means nonresidential real property which is part of, or otherwise present at, the retail space referred to in subsection (a) and which reverts to the lessor at the termination of the lease.\nThe term “short-term lease” means a lease (or other agreement for occupancy or use) of retail space for 15 years or less (as determined under the rules of section 168(i)(3)).\nThe term “retail space” means real property leased, occupied, or otherwise used by a lessee in its trade or business of selling tangible personal property or services to the general public.\nA prior section 110,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 33 , related to income taxes paid by lessee corporations, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11801(a)(6) ,  Nov. 5, 1990 ,  104 Stat. 1388–520 .\nPub. L. 105–34, title XII, §\u202f1213(e) ,  Aug. 5, 1997 ,  111 Stat. 1001 , provided that:  “The amendments made by this section [enacting this section and amending sections 168 and 6724 of this title] shall apply to leases entered into after the date of the enactment of this Act [ Aug. 5, 1997 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income does not include income attributable to the recovery during the taxable year of any amount deducted in any prior taxable year to the extent such amount did not reduce the amount of tax imposed by this chapter.\nParagraph (1) shall not apply to the extent that the credit allowable for the recovered amount did not reduce the amount of tax imposed by this chapter.\nThis subsection shall not apply with respect to the credit determined under section 46 and the foreign tax credit.\nFor purposes of this section, an increase in a carryover which has not expired before the beginning of the taxable year in which the recovery or adjustment takes place shall be treated as reducing tax imposed by this chapter.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1812(a)(1) , substituted “did not reduce the amount of tax imposed by this chapter” for “did not reduce income subject to tax”.\nSubsec. (c).  Pub. L. 99–514, §\u202f1812(a)(2) , substituted “reducing tax imposed by this chapter” for “reducing income subject to tax or reducing tax imposed by this chapter, as the case may be”.\n1984— Pub. L. 98–369  amended section generally, substituting provisions relating to recovery of tax benefit items for provisions relating to recovery of bad debts, prior taxes, and delinquency amounts.\n1980—Subsec. (d).  Pub. L. 96–589  added subsec. (d).\n1976—Subsec. (b)(4).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f171(c) ,  July 18, 1984 ,  98 Stat. 699 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts recovered after  December 31, 1983 , in taxable years ending after such date.”\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or after  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to transactions occurring after  Sept. 30, 1979 , in a specified manner, see section 7(a)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income does not include compensation received for active service as a member of the Armed Forces of the United States for any month during any part of which such member is in a missing status (as defined in  section 551(2) of title 37 , United States Code) during the Vietnam conflict as a result of such conflict, other than a period with respect to which it is officially determined under section 552(c) of such title 37 that he is officially absent from his post of duty without authority.\nGross income does not include compensation received for active service as an employee for any month during any part of which such employee is in a missing status during the Vietnam conflict as a result of such conflict. For purposes of this paragraph, the terms “active service”, “employee”, and “missing status” have the respective meanings given to such terms by  section 5561 of title 5  of the United States Code.\nFor purposes of this subsection, the Vietnam conflict began  February 28, 1961 , and ends on the date designated by the President by Executive order as the date of the termination of combatant activities in Vietnam. For purposes of this subsection, an individual is in a missing status as a result of the Vietnam conflict if immediately before such status began he was performing service in Vietnam or was performing service in Southeast Asia in direct support of military operations in Vietnam.\n2016—Subsec. (c)(5)(B).  Pub. L. 114–328  inserted “,\u2000or paragraph (1) or (3) of section 351(a),” after “section 310”.\n2014—Subsec. (c)(2).  Pub. L. 113–295, §\u202f221(a)(18)(A) , struck out “(after  June 24, 1950 )” after “are or have”.\nSubsec. (c)(3).  Pub. L. 113–295, §\u202f221(a)(18)(B) , substituted “such zone.” for “such zone; except that  June 25, 1950 , shall be considered the date of the commencing of combatant activities in the combat zone designated in Executive Order 10195.”\n1996— Pub. L. 104–188  substituted “combat zone compensation” for “combat pay” in section catchline.\nSubsec. (b).  Pub. L. 104–117, §\u202f1(d)(1) , substituted “the maximum enlisted amount” for “$500” in introductory provisions.\nSubsec. (c)(5).  Pub. L. 104–117, §\u202f1(d)(2) , added par. (5).\n1976—Subsec. (a).  Pub. L. 94–569  substituted “after January 1978” for “beginning more than 2 years after the date of the enactment of this sentence” after “With respect to service in the combat zone designated for purposes of the Vietnam conflict, paragraph (2) shall not apply to any month”.\nSubsec. (b).  Pub. L. 94–569  substituted “after January 1978” for “beginning more than 2 years after the date of enactment of this sentence” after “With respect to service in the combat zone designated for purposes of the Vietnam conflict, paragraph (2) shall not apply to any month”.\n1975—Subsec. (a).  Pub. L. 93–597, §\u202f2(a)(3) , inserted provision relating to the applicability of par. (2) with respect to service in the combat zone designated for purposes of the Vietnam conflict.\nSubsec. (a)(1).  Pub. L. 93–597, §\u202f2(a)(1) , struck out “during an induction period” after “served in a combat zone”.\nSubsec. (a)(2).  Pub. L. 93–597, §\u202f2(a)(2) , substituted “;\u2000but this paragraph shall not apply for any month beginning more than 2 years after the date of the termination of combatant activities in such zone” for “during an induction period; but this paragraph shall not apply for any month during any part of which there are no combatant activities in any combat zone as determined under subsection (c)(3) of this section”.\nSubsec. (b).  Pub. L. 93–597, §\u202f2(a)(3) , inserted provision relating to applicability of par. (2) with respect to service in the combat zone designated for purposes of the Vietnam conflict.\nSubsec. (b)(1).  Pub. L. 93–597, §\u202f2(a)(1) , struck out “during an induction period” after “served in a combat zone”.\nSubsec. (b)(2).  Pub. L. 93–597, §\u202f2(a)(2) , substituted “;\u2000but this paragraph shall not apply for any month beginning more than 2 years after the date of the termination of combatant activities in such zone” for “during an induction period; but this paragraph shall not apply for any month during any part of which there are no combatant activities in any combat zone as determined under subsection (c)(3) of this section”.\nSubsec. (c)(5).  Pub. L. 93–597, §\u202f2(b) , struck out par. (5) which defined “induction period”.\n1972—Subsec. (d).  Pub. L. 92–279  added subsec. (d).\n1966—Subsec. (b).  Pub. L. 89–739  substituted “$500” for “$200”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 93–597, §\u202f2(c) ,  Jan. 2, 1975 ,  88 Stat. 1950 , provided that:  “The amendments made by this section [amending this section] shall take effect on  July 1, 1973 .”\nPub. L. 92–279, §\u202f3(a)(1) ,  Apr. 26, 1972 ,  86 Stat. 125 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply to taxable years ending on or after  February 28, 1961 .”\nPub. L. 89–739, §\u202f2 ,  Nov. 2, 1966 ,  80 Stat. 1165 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply with respect to compensation received in taxable years ending after  December 31, 1965 , for periods of active service after such date.”\nPub. L. 115–97, title I, §\u202f11026 ,  Dec. 22, 2017 ,  131 Stat. 2076 , provided that: \n “(a)   In General .— For purposes of the following provisions of the Internal Revenue Code of 1986, with respect to the applicable period, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under section 112 of such Code): “(1)  Section 2(a)(3) (relating to special rule where deceased spouse was in missing status). \n \n “(2)  Section 112 (relating to the exclusion of certain combat pay of members of the Armed Forces). \n \n “(3)  Section 692 (relating to income taxes of members of Armed Forces on death). \n \n “(4)  Section 2201 (relating to members of the Armed Forces dying in combat zone or by reason of combat-zone-incurred wounds, etc.). \n \n “(5)  Section 3401(a)(1) (defining wages relating to combat pay for members of the Armed Forces). \n \n “(6)  Section 4253(d) (relating to the taxation of phone service originating from a combat zone from members of the Armed Forces). \n \n “(7)  Section 6013(f)(1) (relating to joint return where individual is in missing status). \n \n “(8)  Section 7508 (relating to time for performing certain acts postponed by reason of service in combat zone). \n \n \n “(b)   Qualified Hazardous Duty Area .— For purposes of this section, the term ‘qualified hazardous duty area’ means the Sinai Peninsula of Egypt, if as of the date of the enactment of this section [ Dec. 22, 2017 ] any member of the Armed Forces of the United States is entitled to special pay under  section 310 of title 37 , United States Code (relating to special pay; duty subject to hostile fire or imminent danger), for services performed in such location. Such term includes such location only during the period such entitlement is in effect. \n \n “(c)   Applicable Period.— “(1)   In general .— Except as provided in paragraph (2), the applicable period is— “(A)  the portion of the first taxable year ending after  June 9, 2015 , which begins on such date, and \n \n “(B)  any subsequent taxable year beginning before  January 1, 2026 . \n \n \n “(2)   Withholding .— In the case of subsection (a)(5), the applicable period is— “(A)  the portion of the first taxable year ending after the date of the enactment of this Act [ Dec. 22, 2017 ] which begins on such date, and \n \n “(B)  any subsequent taxable year beginning before  January 1, 2026 . \n \n \n \n “(d)   Effective Date.— “(1)   In general .— Except as provided in paragraph (2), the provisions of this section shall take effect on  June 9, 2015 . \n \n “(2)   Withholding .— Subsection (a)(5) shall apply to remuneration paid after the date of the enactment of this Act.”\nPub. L. 106–398, §\u202f1 [[div. A] , title X, §\u202f1089],  Oct. 30, 2000 ,  114 Stat. 1654 , 1654A–294, provided that:  “It is the sense of Congress that members of the Armed Forces who receive special pay under  section 310 of title 37 , United States Code, for duty subject to hostile fire or imminent danger should receive the same treatment under Federal income tax laws as members serving in combat zones.”\nPub. L. 106–65, div. A, title VI, §\u202f677 ,  Oct. 5, 1999 ,  113 Stat. 676 , provided that:  “It is the sense of Congress that a member of the Armed Forces who is receiving special pay under  section 310 of title 37 , United States Code, while assigned to duty in support of a contingency operation should be treated under the Internal Revenue Code of 1986 in the same manner as a member of the Armed Forces serving in a combat zone (as defined in section 112 of the Internal Revenue Code of 1986).”\nPub. L. 106–21, §\u202f1 ,  Apr. 19, 1999 ,  113 Stat. 34 , provided that: \n “(a)   General Rule .— For purposes of the following provisions of the Internal Revenue Code of 1986, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under section 112 of such Code): “(1)  Section 2(a)(3) (relating to special rule where deceased spouse was in missing status). \n \n “(2)  Section 112 (relating to the exclusion of certain combat pay of members of the Armed Forces). \n \n “(3)  Section 692 (relating to income taxes of members of Armed Forces on death). \n \n “(4)  Section 2201 (relating to members of the Armed Forces dying in combat zone or by reason of combat-zone-incurred wounds, etc.). \n \n “(5)  Section 3401(a)(1) (defining wages relating to combat pay for members of the Armed Forces). \n \n “(6)  Section 4253(d) (relating to the taxation of phone service originating from a combat zone from members of the Armed Forces). \n \n “(7)  Section 6013(f)(1) (relating to joint return where individual is in missing status). \n \n “(8)  Section 7508 (relating to time for performing certain acts postponed by reason of service in combat zone). \n \n \n “(b)   Qualified Hazardous Duty Area .— For purposes of this section, the term ‘qualified hazardous duty area’ means any area of the Federal Republic of Yugoslavia (Serbia/Montenegro), Albania, the Adriatic Sea, and the northern Ionian Sea (above the 39th parallel) during the period (which includes the date of the enactment of this Act [ Apr. 19, 1999 ]) that any member of the Armed Forces of the United States is entitled to special pay under  section 310 of title 37 , United States Code (relating to special pay: duty subject to hostile fire or imminent danger) for services performed in such area. \n \n “(c)   Special Rule for Section  7508.— Solely for purposes of applying section 7508 of the Internal Revenue Code of 1986, in the case of an individual who is performing services as part of Operation Allied Force outside the United States while deployed away from such individual’s permanent duty station, the term ‘qualified hazardous duty area’ includes, during the period for which the entitlement referred to in subsection (b) is in effect, any area in which such services are performed. \n \n “(d)   Effective Dates.— “(1)   In general .— Except as provided in paragraph (2), this section shall take effect on  March 24, 1999 . \n \n “(2)   Withholding .— Subsection (a)(5) shall apply to remuneration paid after the date of the enactment of this Act [ Apr. 19, 1999 ].”\nPub. L. 104–117, §\u202f1 ,  Mar. 20, 1996 ,  110 Stat. 827 , provided that: \n “(a)   General Rule .— For purposes of the following provisions of the Internal Revenue Code of 1986, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under section 112 of such Code): “(1)  Section 2(a)(3) (relating to special rule where deceased spouse was in missing status). \n \n “(2)  Section 112 (relating to the exclusion of certain combat pay of members of the Armed Forces). \n \n “(3)  Section 692 (relating to income taxes of members of Armed Forces on death). \n \n “(4)  Section 2201 (relating to members of the Armed Forces dying in combat zone or by reason of combat-zone-incurred wounds, etc.). \n \n “(5)  Section 3401(a)(1) (defining wages relating to combat pay for members of the Armed Forces). \n \n “(6)  Section 4253(d) (relating to the taxation of phone service originating from a combat zone from members of the Armed Forces). \n \n “(7)  Section 6013(f)(1) (relating to joint return where individual is in missing status). \n \n “(8)  Section 7508 (relating to time for performing certain acts postponed by reason of service in combat zone). \n \n \n “(b)   Qualified Hazardous Duty Area .— For purposes of this section, the term ‘qualified hazardous duty area’ means Bosnia and Herzegovina, Croatia, or Macedonia, if as of the date of the enactment of this section [ Mar. 20, 1996 ] any member of the Armed Forces of the United States is entitled to special pay under  section 310 of title 37 , United States Code (relating to special pay; duty subject to hostile fire or imminent danger) for services performed in such country. Such term includes any such country only during the period such entitlement is in effect. Solely for purposes of applying section 7508 of the Internal Revenue Code of 1986, in the case of an individual who is performing services as part of Operation Joint Endeavor outside the United States while deployed away from such individual’s permanent duty station, the term ‘qualified hazardous duty area’ includes, during the period for which such entitlement is in effect, any area in which such services are performed. \n \n “(c)   Exclusion of Combat Pay From Withholding Limited to Amount Excludable From Gross Income .— \n [Amended  section 3401 of this title .] \n \n “(d)   Increase in Combat Pay Exclusion for Officers to Highest Amount Applicable to Enlisted Personnel.— “(1)   In general .— \n [Amended this section.] \n \n “(2)   Maximum enlisted amount .— \n [Amended this section.] \n \n \n “(e)   Effective Date.— “(1)   In general .— Except as provided in paragraph (2), the provisions of and amendments made by this section shall take effect on  November 21, 1995 . \n \n “(2)   Withholding .— Subsection (a)(5) and the amendment made by subsection (c) shall apply to remuneration paid after the date of the enactment of this Act [ Mar. 20, 1996 ].”\n[Amended  section 3401 of this title .]\n[Amended this section.]\n[Amended this section.]\nPub. L. 92–279, §\u202f3(a)(2) , (3),  Apr. 26, 1972 ,  86 Stat. 125 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(2)  If refund or credit of any overpayment for any taxable year resulting from the application of the amendment made by the first section of this Act [amending this section] (including interest, additions to the tax, and additional amounts) is prevented at any time before the expiration of the applicable period specified in paragraph (3) by the operation of any law or rule of law, such refund or credit of such overpayment may, nevertheless, be made or allowed if claim therefor is filed before the expiration of such applicable period. \n \n “(3)  For purposes of paragraph (2), the applicable period for any individual with respect to any compensation is the period ending on whichever of the following days is the later: “(A)  the day which is one year after the date of the enactment of this Act [ Apr. 26, 1972 ], or \n \n “(B)  the day which is 2 years after the date on which it is determined that the individual’s missing status (within the meaning of section 112(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) has terminated for purposes of such section 112.”\nEx. Ord. No. 10585,  Jan. 1, 1955 , 20 F.R. 17, provided:\nBy virtue of the authority vested in me by section 112(c)(3) of the Internal Revenue Code of 1954 [now I.R.C. 1986],  January 31, 1955 , as of midnight thereof, is hereby designated as the date of termination of combatant activities in the zone comprised of the area described in Executive Order No. 10195 of  December 20, 1950  (15 F.R. 9177).\nEx. Ord. No. 11216,  Apr. 24, 1965 , 30 F.R. 5817, provided:\nPursuant to the authority vested in me by section 112 of the Internal Revenue Code of 1954 [now I.R.C. 1986], I hereby designate, for the purposes of that section, as an area in which Armed Forces of the United States are and have been engaged in combat:\nVietnam, including the waters adjacent thereto within the following-described limits: From a point on the East Coast of Vietnam at the juncture of Vietnam with China southeastward to 21° N Lat., 108°15′ E Long.; thence southward to 18° N Lat., 108°15′ E Long.; thence southeastward to 17°30 N Lat., 111° E Long.; thence southward to 11° N Lat., 111° E Long.; thence southwestward to 7° N Lat., 105° E Long.; thence westward to 7° N Lat., 103° E Long.; thence northward to 9°30′ N Lat., 103° E Long.; thence northeastward to 10°15′ N Lat., 104°27′ E Long.; thence northward to a point on the West Coast of Vietnam at the juncture of Vietnam with Cambodia.\nThe date of the commencing of combatant activities in such area is hereby designated as  January 1, 1964 .\nEx. Ord. No. 12744,  Jan. 21, 1991 , 56 F.R. 2663, provided:\nBy the authority vested in me as President by the Constitution and the laws of the United States of America, including section 112 of the Internal Revenue Code of 1986 ( 26 U.S.C. 112 ), I hereby designate, for purposes of that section, the following locations, including the airspace above such locations, as an area in which Armed Forces of the United States are and have been engaged in combat:\n—the Persian Gulf\n—the Red Sea\n—the Gulf of Oman\n—that portion of the Arabian Sea that lies north of 10 degrees north latitude and west of 68 degrees east longitude\n—the Gulf of Aden\n—the total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates.\nFor the purposes of this order, the date of the commencing of combatant activities in such zone is hereby designated as  January 17, 1991 .\nEx. Ord. No. 13002,  May 13, 1996 , 61 F.R. 24665, provided:\nBy the authority vested in me as President by the Constitution and the laws of the United States of America, including section 112(c)(3) of the Internal Revenue Code of 1986 ( 26 U.S.C. 112(c)(3) ),  June 30, 1996 , as of midnight thereof, is hereby designated as the date of termination of combatant activities in the zone comprised of the area described in Executive Order No. 11216 of  April 24, 1965  [set out above].\nEx. Ord. No. 13119,  April 13, 1999 , 64 F.R. 18797, provided:\nPursuant to the authority vested in me as President by the Constitution and laws of the United States of America, including section 112 of the Internal Revenue Code of 1986 ( 26 U.S.C. 112 ), I designate, for the purposes of that section, the following locations, including the airspace above such locations, as an area in which Armed Forces of the United States are and have been engaged in combat:\n—The Federal Republic of Yugoslavia (Serbia/Montenegro);\n—Albania;\n—the Adriatic Sea;\n—the Ionian Sea north of the 39th parallel.\nFor the purposes of this order, I designate  March 24, 1999 , as the date of the commencement of combatant activities in such zone.\nEx. Ord. No. 13239,  Dec. 12, 2001 , 66 F.R. 64907, provided:\nPursuant to the authority vested in me as President by the Constitution and the laws of the United States of America, including section 112 of the Internal Revenue Code of 1986 ( 26 U.S.C. 112 ), I designate, for purposes of that section, Afghanistan, including the airspace above, as an area in which Armed Forces of the United States are and have been engaged in combat.\nFor purposes of this order, I designate  September 19, 2001 , as the date of the commencement of combatant activities in such zone.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 35 , related to mustering-out payments for members of Armed Forces.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, added  Pub. L. 106–519, §\u202f3(a) ,  Nov. 15, 2000 ,  114 Stat. 2423 , related to exclusion of extraterritorial income from gross income.\nA prior section 114,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 35 , related to sports programs conducted for American National Red Cross, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11801(a)(8) ,  Nov. 5, 1990 ,  104 Stat. 1388–520 .\nRepeal applicable to transactions after  Dec. 31, 2004 , see  section 101(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .\nPub. L. 108–357, title I, §\u202f101(d) –(f),  Oct. 22, 2004 ,  118 Stat. 1423 , 1424, as amended by  Pub. L. 109–222, title V, §\u202f513(b) ,  May 17, 2006 ,  120 Stat. 366 ;  Pub. L. 113–295, div. A, title II, §\u202f219(a) ,  Dec. 19, 2014 ,  128 Stat. 4035 , provided that: \n “(d)   Transitional Rule for  2005  and  2006.— “(1)   In general .— In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section [amending sections 56, 275, 864, 903, and 999 of this title and repealing this section and sections 941 to 943 of this title] shall not exceed the applicable percentage of the amount which would have been so included but for this subsection. \n \n “(2)   Applicable percentage .— For purposes of paragraph (1), the applicable percentage shall be as follows: “(A)  For 2005, the applicable percentage shall be 20 percent. \n \n “(B)  For 2006, the applicable percentage shall be 40 percent. \n \n \n “(3)   Coordination with section  199.— This subsection shall be applied without regard to any deduction allowable under section 199 [probably means former section 199 of the Internal Revenue Code of 1986]. \n \n \n “(e)   Revocation of Election To Be Treated as Domestic Corporation .— If, during the 1-year period beginning on the date of the enactment of this Act [ Oct. 22, 2004 ], a corporation for which an election is in effect under section 943(e) of the Internal Revenue Code of 1986 revokes such election, no gain or loss shall be recognized with respect to property treated as transferred under clause (ii) of section 943(e)(4)(B) of such Code to the extent such property— “(1)  was treated as transferred under clause (i) thereof, or \n \n “(2)  was acquired during a taxable year to which such election applies and before  May 1, 2003 , in the ordinary course of its trade or business. \n \n\n The Secretary of the Treasury (or such Secretary’s delegate) may prescribe such regulations as may be necessary to prevent the abuse of the purposes of this subsection. \n \n “[(f)  Repealed.  Pub. L. 109–222, title V, §\u202f513(b) ,  May 17, 2006 ,  120 Stat. 366 .]”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': '1976— Pub. L. 94–455  struck out “(a) General rule” before “Gross income does not include”, struck out subsecs. (b) and (c) which related to contracts concerning public utilities made before  Sept. 8, 1916 , and contracts concerning bridge acquisition made before  May 29, 1928 , respectively, and in par. (1) of former subsec. (a), struck out “or territory” after “accruing to a State”.\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 109–59, title XI, §\u202f11146 ,  Aug. 10, 2005 ,  119 Stat. 1966 , provided that: \n “(a)   In General .— If a State owns all of the outstanding stock of a corporation— “(1)  which is a real estate investment trust on the date of the enactment of this Act [ Aug. 10, 2005 ], \n \n “(2)  which is a non-operating class III railroad, and \n \n “(3)  substantially all of the activities of which consist of the ownership, leasing, and operation by such corporation of facilities, equipment, and other property used by the corporation or other persons for railroad transportation and for economic development purposes for the benefit of the State and its citizens, then, to the extent such activities are of a type which are an essential governmental function within the meaning of section 115 of the Internal Revenue Code of 1986, income derived from such activities by the corporation shall be treated as accruing to the State for purposes of section 115 of such Code. \n \n \n “(b)   Gain or Loss not Recognized on Conversion .— Notwithstanding section 337(d) of the Internal Revenue Code of 1986— “(1)  no gain or loss shall be recognized under section 336 or 337 of such Code, and \n \n “(2)  no change in basis of the property of such corporation shall occur, because of any change of status of a corporation to a tax-exempt entity by reason of the application of subsection (a). \n \n \n “(c)   Tax-Exempt Financing.— “(1)   In general .— Any obligation issued by a corporation described in subsection (a) at least 95 percent of the net proceeds (as defined in section 150(a) of the Internal Revenue Code of 1986) of which are to be used to provide for the acquisition, construction, or improvement of railroad transportation infrastructure (including railroad terminal facilities)— “(A)  shall be treated as a State or local bond (within the meaning of section 103(c) of such Code), and \n \n “(B)  shall not be treated as a private activity bond (within the meaning of section 103(b)(1) of such Code) solely by reason of the ownership or use of such railroad transportation infrastructure by the corporation. \n \n \n “(2)   No inference .— Except as provided in paragraph (1), nothing in this subsection shall be construed to affect the treatment of the private use of proceeds or property financed with obligations issued by the corporation for purposes of section 103 of the Internal Revenue Code of 1986 and part IV of subchapter B [probably means part IV of subchapter B of chapter 1] of such Code. \n \n \n “(d)   Definitions .— For purposes of this section: “(1)   Real estate investment trust .— The term ‘real estate investment trust’ has the meaning given such term by section 856(a) of the Internal Revenue Code of 1986. \n \n “(2)   Non-operating class iii railroad .— The term ‘non-operating class III railroad’ has the meaning given such term by part A of subtitle IV of title 49, United States Code ( 49 U.S.C. 10101  et seq.), and the regulations thereunder. \n \n “(3)   State .— The term ‘State’ includes— “(A)  the District of Columbia and any possession of the United States, and \n \n “(B)  any authority, agency, or public corporation of a State. \n \n \n \n “(e)   Applicability.— “(1)   In general .— Except as provided in paragraph (2), this section shall apply on and after the date on which a State becomes the owner of all of the outstanding stock of a corporation described in subsection (a) through action of such corporation’s board of directors. \n \n “(2)   Exception .— This section shall not apply to any State which— “(A)  becomes the owner of all of the voting stock of a corporation described in subsection (a) after  December 31, 2003 , or \n \n “(B)  becomes the owner of all of the outstanding stock of a corporation described in subsection (a) after  December 31, 2006 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 37 ;  June 25, 1959 ,  Pub. L. 86–69, §\u202f3(a)(2) ,  73 Stat. 139 ;  Sept. 14, 1960 ,  Pub. L. 86–779, §\u202f10(f) ,  74 Stat. 1009 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f201(c) , (d)(6)(C),  78 Stat. 32 ;  Nov. 13, 1966 ,  Pub. L. 89–809, title I, §\u202f103(g) ,  80 Stat. 1552 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title X , §§\u202f1051(h)(2), 1053(d)(1), title XIX, §\u202f1901(a)(20),  90 Stat. 1647 , 1649, 1766;  Apr. 2, 1980 ,  Pub. L. 96–223, title IV, §\u202f404(a) ,  94 Stat. 305 ;  Aug. 13, 1981 ,  Pub. L. 97–34, title III, §\u202f302(b)(2) ,  95 Stat. 272 ;  July 18, 1984 ,  Pub. L. 98–369, div. A, title V, §\u202f542(b) ,  98 Stat. 891 , authorized partial exclusion of dividends received by individuals.\nRepeal applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 301 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational organization described in section 170(b)(1)(A)(ii).\nThe term “qualified scholarship” means any amount received by an individual as a scholarship or fellowship grant to the extent the individual establishes that, in accordance with the conditions of the grant, such amount was used for qualified tuition and related expenses.\nExcept as provided in paragraph (2), subsections (a) and (d) shall not apply to that portion of any amount received which represents payment for teaching, research, or other services by the student required as a condition for receiving the qualified scholarship or qualified tuition reduction.\nGross income shall not include any qualified tuition reduction.\nParagraph (1) shall apply with respect to any qualified tuition reduction provided with respect to any highly compensated employee only if such reduction is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q)). For purposes of this paragraph, the term “highly compensated employee” has the meaning given such term by section 414(q).\nIn the case of the education of an individual who is a graduate student at an educational organization described in section 170(b)(1)(A)(ii) and who is engaged in teaching or research activities for such organization, paragraph (2) shall be applied as if it did not contain the phrase “(below the graduate level)”.\nSection 338A(g)(1)(A) of the Public Health Service Act, referred to in subsec. (c)(2)(A), is classified to section 254 l (g)(1)(A) of Title 42, The Public Health and Welfare.\nSection 448(e) of the Higher Education Act of 1965, referred to in subsec. (c)(2)(C), is classified to  section 1087–58(e) of Title 20 , Education.\n2015—Subsec. (c)(2)(C).  Pub. L. 114–113  added subpar. (C).\n2001—Subsec. (c).  Pub. L. 107–16  designated existing provisions as par. (1), inserted par. heading, substituted “Except as provided in paragraph (2), subsections (a)” for “Subsections (a)”, and added par. (2).\n1996—Subsec. (d)(2)(B).  Pub. L. 104–188  substituted “section 132(h)” for “section 132(f)”.\n1989—Subsec. (d)(4).  Pub. L. 101–140, §\u202f203(a)(2) , amended par. (4) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , had not been enacted, see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(1) , amended subsec. (d) to read as if amendments by  Pub. L. 99–514, §\u202f1151(g)(2) , which added par. (4), had not been enacted, see 1986 Amendment note below.\n1988—Subsec. (d)(4).  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , substituted “there shall” for “there may” and “who are” for “who may be”.\nSubsec. (d)(5).  Pub. L. 100–647, §\u202f4001(b)(2) , added par. (5).\n1986— Pub. L. 99–514, §\u202f123(a) , in amending section generally, substituted “Qualified scholarships” for “Scholarships and fellowship grants” in section catchline.\nSubsec. (a).  Pub. L. 99–514, §\u202f123(a) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “In the case of an individual, gross income does not include—\n“(1) any amount received—\n“(A) as a scholarship at an educational organization described in section 170(b)(1)(A)(ii), or\n“(B) as a fellowship grant, including the value of contributed services and accommodations; and\n“(2) any amount received to cover expenses for—\n“(A) travel,\n“(B) research,\n“(C) clerical help, or\n“(D) equipment,\nwhich are incident to such a scholarship or to a fellowship grant, but only to the extent that the amount is so expended by the recipient.”\nSubsec. (b).  Pub. L. 99–514, §\u202f123(a) , in amending subsec. (b) generally, substituted qualified scholarship provision for former limitations provision, which related in par. (1) to individuals who were candidates for degrees, and in par. (2) to individuals who were not candidates for degrees, describing in subpar. (A) conditions for exclusion and in subpar. (B) extent of exclusion, such detailed provision now covered in subsec. (c).\nSubsec. (c).  Pub. L. 99–514, §\u202f123(a) , in amending subsec. (c) generally, substituted limitation provision for former provision relating to Federal grants for tuition and related expenses not includable merely because there was requirement of future service as Federal employee.\nSubsec. (d).  Pub. L. 99–514, §\u202f123(a) , in amending subsec. (d) generally, substituted “reduction” for “reductions” in heading and inserted “(within the meaning of section 414(q))” after “highly compensated employees” in par. (3).\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1114(b)(2) , struck out “officer, owner, or” after “with respect to any” and “officers, owners, or” after “in favor of” and inserted at end “For purposes of this paragraph, the term ‘highly compensated employee’ has the meaning given such term by section 414(q).”\nSubsec. (d)(4).  Pub. L. 99–514, §\u202f1151(g)(2) , added par. (4).\n1984—Subsec. (d).  Pub. L. 98–369  added subsec. (d).\n1980—Subsec. (c).  Pub. L. 96–541  added subsec. (c).\n1976—Subsecs. (a)(1)(A), (b)(1), (2).  Pub. L. 94–455, §\u202f1901(b)(8)(A) , substituted “educational organization described in section 170(b)(1)(A)(ii)” for “educational institution (as defined in section 151(e)(4))” after “scholarship at an”.\nSubsec. (b)(2)(A)(iv).  Pub. L. 94–455, §\u202f1901(c)(3) , struck out “a territory” after “or a State”.\nSubsec. (b)(2)(B).  Pub. L. 94–455, §\u202f1901(b)(8)(A) , substituted “educational organization described in section 170(b)(1)(A)(ii)” for “educational institution (as defined in section 151(e)(4))” after “degree at an”.\n1961—Subsec. (b)(2)(A).  Pub. L. 87–256  included cases where the grantor of the scholarship or fellowship grant is a foreign government, an international organization, or a binational or multinational educational and cultural foundation or commission created or continued pursuant to the Mutual Educational and Cultural Exchange Act of 1961.\nPub. L. 114–113, div. Q, title III, §\u202f301(b) ,  Dec. 18, 2015 ,  129 Stat. 3086 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts received in taxable years beginning after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 107–16, title IV, §\u202f413(b) ,  June 7, 2001 ,  115 Stat. 64 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to amounts received in taxable years beginning after  December 31, 2001 .”\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by  section 1011B(a)(31)(B) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4001(c) ,  Nov. 10, 1988 ,  102 Stat. 3643 , provided that:  “The amendments made by this section [amending this section and  section 127 of this title ] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  section 123(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in the case of scholarships and fellowships granted after  Aug. 16, 1986 , see  section 151(d) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1114(b)(2) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1987 , see  section 1114(c)(2) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by  section 1151(g)(2) of Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nPub. L. 98–369, div. A, title V, §\u202f532(b) ,  July 18, 1984 ,  98 Stat. 887 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply to qualified tuition reductions (as defined in section 117(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) for education furnished after  June 30, 1985 , in taxable years ending after such date.”\nProvisions of subsec. (d) treated as in effect on and after  Jan. 1, 1984 , in case of education described in  section 127(c)(8) of this title , see  section 1(g)(5) of Pub. L. 98–611 , set out as a note under  section 127 of this title .\nPub. L. 96–541, §\u202f5(a)(2) ,  Dec. 17, 1980 ,  94 Stat. 3206 , provided:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1980 .”\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 87–256, §\u202f110(h)(1) ,  Sept. 21, 1961 ,  75 Stat. 537 , provided that:  “The amendments made by subsections (a), (b), and (c) of this section [amending this section and sections 871 and 872 of this title] shall apply to taxable years beginning after  December 31, 1961 .”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor nonapplication of amendment by  section 123(a) of Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1853(f) ,  Oct. 22, 1986 ,  100 Stat. 2872 , provided that: \n “(1)  A tuition reduction plan shall be treated as meeting the requirements of section 117(d)(3) of the Internal Revenue Code of 1954 [now 1986] if— “(A)  such plan would have met the requirements of such section (as amended by this section but without regard to the lack of evidence that benefits under such plan were the subject of good faith bargaining) on the day on which eligibility to participate in the plan was closed, \n \n “(B)  at all times thereafter, the tuition reductions available under such plan are available on substantially the same terms to all employees eligible to participate in such plan, and \n \n “(C)  the eligibility to participate in such plan closed on  June 30, 1972 ,  June 30, 1974 , or  December 31, 1975 . \n \n \n “(2)  For purposes of applying section 117(d)(3) of the Internal Revenue Code of 1954 [now 1986] to all tuition reduction plans of an employer with at least 1 such plan described in paragraph (1) of this subsection, there shall be excluded from consideration employees not included in the plan who are included in a unit of employees covered by an agreement that the Secretary of the Treasury or his delegate finds to be a collective bargaining agreement between employee representatives and 1 or more employers, if, with respect to plans other than plans described in paragraph (1), there is evidence that such benefits were the subject of good faith bargaining. \n \n “(3)  Any reduction in tuition provided with respect to a full-time course of education furnished at the graduate level before  July 1, 1988 , shall not be included in gross income if— “(A)  such reduction would not be included in gross income under the Internal Revenue Service regulations in effect on the date of the enactment of the Tax Reform Act of 1984 [ July 18, 1984 ], and \n \n “(B)  such reduction is provided with respect to a student who was accepted for admission to such course of education before  July 1, 1984 , and began such course of education before  June 30, 1985 .”\nPub. L. 95–600, title I, §\u202f161(b) ,  Nov. 6, 1978 ,  92 Stat. 2810 , as amended by  Pub. L. 96–167, §\u202f9(b) ,  Dec. 29, 1979 ,  93 Stat. 1278 ;  Pub. L. 96–541, §\u202f5(b) ,  Dec. 17, 1980 ,  94 Stat. 3206 ;  Pub. L. 97–248, title II, §\u202f285 ,  Sept. 3, 1982 ,  96 Stat. 569 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that any amount paid to, or on behalf of, an individual as a national research service award under former section 289 l– 1 of title 42 during calendar years 1974 through 1983 was to be treated as a scholarship or fellowship grant under this section.\nPub. L. 93–483, §\u202f4 ,  Oct. 26, 1974 ,  88 Stat. 1458 , as amended  Pub. L. 94–455, title XXI, §\u202f2130 ,  Oct. 4, 1976 ,  90 Stat. 1922 ;  Pub. L. 95–171, §\u202f5 ,  Nov. 12, 1977 ,  91 Stat. 1355 ;  Pub. L. 95–600, title I, §\u202f161(a) ,  Nov. 6, 1978 ,  92 Stat. 2810 ;  Pub. L. 95–615, title I, §\u202f6 ,  Nov. 8, 1978 ,  92 Stat. 3098 ;  Pub. L. 96–167, §\u202f9(a) ,  Dec. 29, 1979 ,  93 Stat. 1278 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General.— Any amount received from appropriated funds as a scholarship, including the value of contributed services and accommodations, by a member of a uniformed service who is receiving training under the Armed Forces Health Professions Scholarship Program (or any other program determined by the Secretary of the Treasury or his delegate to have substantially similar objectives) from an educational institution (as defined in section 151(e)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) [see  section 170(b)(1)(A)(ii) of this title ] shall be treated as a scholarship under section 117 of such Code [this section], whether that member is receiving training while on active duty or in an off-duty or inactive status, and without regard to whether a period of active duty is required of the member as a condition of receiving those payments. \n \n “(b)   Definition of Uniformed Services.— For purposes of this section, the term ‘uniformed service’ has the meaning given it by  section 101(3) of title 37 , United States Code. \n \n “(c)   Effective Date .— The provisions of this section shall apply with respect to amounts received during calendar years 1973, 1974, and 1975, and, in the case of a member of a uniformed service receiving training after 1975 and before 1981 in programs described in subsection (a), with respect to amounts received after 1975 and before 1985.”\n[ Section 6 of Pub. L. 95–615 , which reenacted  §\u202f4(c) of Pub. L. 93–483  without change, to cease to have effect on the day after  Nov. 8, 1978 , see  section 210(a) of Pub. L. 95–615 , set out as a note under  section 61 of this title .]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of a corporation, gross income does not include any contribution to the capital of the taxpayer.\nThe term “contribution in aid of construction” shall be defined by regulations prescribed by the Secretary, except that such term shall not include amounts paid as service charges for starting or stopping services.\nThe term “predominantly” means 80 percent or more.\nThe term “regulated public utility” has the meaning given such term by section 7701(a)(33), except that such term shall not include any utility which is not required to provide water or sewerage disposal services to members of the general public in its service area.\nNotwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure which constitutes a contribution in aid of construction to which this subsection applies. The adjusted basis of any property acquired with contributions in aid of construction to which this subsection applies shall be zero.\n2021—Subsec. (b).  Pub. L. 117–58, §\u202f80601(a)(1) , inserted “except as provided in subsection (c),” after “For purposes of subsection (a),” in introductory provisions.\nSubsecs. (c) to (e).  Pub. L. 117–58, §\u202f80601(a)(2) , (3), added subsecs. (c) and (d), redesignated former subsec. (d) as (e), and struck out former subsec. (c) which related to regulations.\n2017—Subsecs. (b) to (e).  Pub. L. 115–97  added subsecs. (b) and (c), redesignated subsec. (e) as (d), and struck out former subsecs. (b) to (d) which related to contributions in aid of construction, special rules for water and sewerage disposal utilities, and statute of limitations for assessment of deficiencies, respectively.\n1996—Subsec. (b).  Pub. L. 104–188, §\u202f1613(a)(2) , inserted “except as provided in subsection (c),” before “the term”.\nSubsecs. (c) to (e).  Pub. L. 104–188, §\u202f1613(a)(1) , added subsecs. (c) and (d) and redesignated former subsec. (c) as (e).\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f824(a) , added subsec. (b) and struck out former subsec. (b) relating to contributions in aid of construction, containing par. (1) general rule, par. (2) expenditure rule, par. (3) definitions, and par. (4) disallowance of deductions and investment credit; adjusted basis.\nSubsecs. (c), (d).  Pub. L. 99–514, §\u202f824(a) , redesignated former subsec. (d) as (c) and struck out former subsec. (c), statute of limitations, which read as follows: “If the taxpayer for any taxable year treats an amount as a contribution to the capital of the taxpayer described in subsection (b), then—\n“(1) the statutory period for the assessment of any deficiency attributable to any part of such amount shall not expire before the expiration of 3 years from the date the Secretary is notified by the taxpayer (in such manner as the Secretary may prescribe) of—\n“(A) the amount of the expenditure referred to in subparagraph (A) of subsection (b)(2),\n“(B) the taxpayer’s intention not to make the expenditures referred to in such subparagraph, or\n“(C) a failure to make such expenditure within the period described in subparagraph (B) of subsection (b)(2); and\n“(2) such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment.”\n1984—Subsecs. (c), (d).  Pub. L. 98–369  added subsec. (c) and redesignated former subsec. (c) as (d).\n1980—Subsec. (c).  Pub. L. 96–589  designated existing provisions as par. (1) and added par. (2).\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f364(a)(1) , (2), substituted in provisions preceding subpar. (A) “electric energy, gas (through a local distribution system or transportation by pipeline), water,” for “water” and in subpar. (B) “electric energy, gas, steam, water,” for “water”.\nSubsec. (b)(2)(A)(ii).  Pub. L. 95–600, §\u202f364(a)(3) , substituted “electric energy, gas, steam, water,” for “water”.\nSubsec. (b)(3)(A).  Pub. L. 95–600, §\u202f364(a)(4) , substituted “line to an electric line, a gas main, a steam line, or a main water or sewer line” for “property to a main water or sewer line”.\nSubsec. (b)(3)(C).  Pub. L. 95–600, §\u202f364(a)(5) , substituted “electric energy, gas, water,” for “water” and inserted “(including in the case of a gas transmission utility, the provision of gas services by sale for resale to the general public)” after “members of the general public”.\n1976—Subsecs. (b), (c).  Pub. L. 94–455, §\u202f2120(a) , added subsec. (b) and redesignated former subsec. (b) as (c).\nPub. L. 117–58, div. H, title VI, §\u202f80601(b) ,  Nov. 15, 2021 ,  135 Stat. 1338 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made after  December 31, 2020 .”\nPub. L. 115–97, title I, §\u202f13312(b) ,  Dec. 22, 2017 ,  131 Stat. 2132 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to contributions made after the date of enactment of this Act [ Dec. 22, 2017 ]. \n \n “(2)   Exception .— The amendments made by this section shall not apply to any contribution, made after the date of enactment of this Act by a governmental entity, which is made pursuant to a master development plan that has been approved prior to such date by a governmental entity.”\nPub. L. 104–188, title I, §\u202f1613(a)(3) ,  Aug. 20, 1996 ,  110 Stat. 1850 , provided that:  “The amendments made by this subsection [amending this section] shall apply to amounts received after  June 12, 1996 .”\nPub. L. 99–514, title VIII, §\u202f824(c) ,  Oct. 22, 1986 ,  100 Stat. 2374 , as amended by  Pub. L. 100–647, title I, §\u202f1008(j)(2) ,  Nov. 10, 1988 ,  102 Stat. 3445 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 362 of this title ] shall apply to amounts received after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Treatment of certain water supply projects .— The amendments made by this section shall not apply to amounts which are paid by the New Jersey Department of Environmental Protection for construction of alternative water supply projects in zones of drinking water contamination and which are designated by such department as being taken into account under this paragraph. Not more than $4,631,000 of such amounts may be designated under the preceding sentence. \n \n “(3)   Treatment of certain contributions by transportation authority .— The amendments made by this section shall not apply to contributions in aid of construction by a qualified transportation authority which were clearly identified in a master plan in existence on  September 13, 1984 , and which are designated by such authority as being taken into account under this paragraph. Not more than $68,000,000 of such contributions may be designated under the preceding sentence. For purposes of this paragraph, a qualified transportation authority is an entity which was created on  February 20, 1967 , and which was established by an interstate compact and consented to by Congress in  Public Law 89–774 ,  80 Stat. 1324  (1966). \n \n “(4)   Treatment of certain partnerships .— In the case of a partnership with a taxable year beginning  May 1, 1986 , if such partnership realized net capital gain during the period beginning on the 1st day of such taxable year and ending on  May 29, 1986 , pursuant to an underwriting agreement dated  May 6, 1986 , then such partnership may elect to treat each asset to which such net capital gain relates as having been distributed to the partners of such partnership in proportion to their distributive share of the capital gain or loss realized by the partnership with respect to such asset and to treat each such asset as having been sold by each partner on the date of the sale of the asset by the partnership. If such an election is made, the consideration received by the partnership in connection with the sale of such assets shall be treated as having been received by the partners in connection with the deemed sale of such assets. In the case of a tiered partnership, for purposes of this paragraph each partnership shall be treated as having realized net capital gain equal to its proportionate share of the net capital gain of each partnership in which it is a partner, and the election provided by this paragraph shall apply to each tier.”\nPub. L. 98–369, div. A, title I, §\u202f163(c) ,  July 18, 1984 ,  98 Stat. 698 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and sections 6501 and 6511 of this title] shall apply to expenditures with respect to which the second taxable year described in [former] section 118(b)(2)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] ends after  December 31, 1984 .”\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or after  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to transactions occurring after  Sept. 30, 1979 , in a specified manner, see section 7(a)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nPub. L. 95–600, title III, §\u202f364(b) ,  Nov. 6, 1978 ,  92 Stat. 2854 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made after  January 31, 1976 .”\nPub. L. 94–455, title XXI, §\u202f2120(c) ,  Oct. 4, 1976 ,  90 Stat. 1913 , provided that:  “The amendments made by this section [amending this section and  section 362 of this title ] apply to contributions made after  January 31, 1976 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In determining whether meals or lodging are furnished for the convenience of the employer, the provisions of an employment contract or of a State statute fixing terms of employment shall not be determinative of whether the meals or lodging are intended as compensation.\nIn determining whether meals are furnished for the convenience of the employer, the fact that a charge is made for such meals, and the fact that the employee may accept or decline such meals, shall not be taken into account.\nAll meals furnished on the business premises of an employer to such employer’s employees shall be treated as furnished for the convenience of the employer if, without regard to this paragraph, more than half of the employees to whom such meals are furnished on such premises are furnished such meals for the convenience of the employer.\nIn the case of an individual who is furnished lodging in a camp located in a foreign country by or on behalf of his employer, such camp shall be considered to be part of the business premises of the employer.\nIn the case of an employee of an educational institution, gross income shall not include the value of qualified campus lodging furnished to such employee during the taxable year.\nSection 1886(d)(5)(B) or (h) of the Social Security Act, referred to in subsec. (d)(4)(B)(ii), is classified to section 1395ww(d)(5)(B) or (h) of Title 42, The Public Health and Welfare.\n1998—Subsec. (b)(4).  Pub. L. 105–206  added par. (4).\n1996—Subsec. (d)(4).  Pub. L. 104–188  amended par. (4) generally. Prior to amendment, par. (4) read as follows: “ Educational institution .—For purposes of this paragraph, the term ‘educational institution’ means an institution described in section 170(b)(1)(A)(ii).”\n1988—Subsec. (d).  Pub. L. 100–647  struck out “(as of the close of the calendar year in which the taxable year begins)” after “appraised value” in par. (2)(A)(i) and inserted at end “The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.” as concluding provision.\n1986—Subsec. (d).  Pub. L. 99–514  added subsec. (d).\n1981—Subsec. (c).  Pub. L. 97–34  added subsec. (c).\n1980—Subsec. (a).  Pub. L. 96–222  struck out “General rule” in subsec. (a) as in effect on the day before the date of enactment of the Foreign Earned Income Act of 1978 to correct a legislative oversight in the amendment of subsec. (a) of this section by  section 205 of Pub. L. 95–615 . The amendment by  Pub. L. 95–615 , however, was executed without reference to “General rule” as the probable intent of Congress, thereby requiring no change in text.\n1978—Subsec. (a).  Pub. L. 95–615  designated existing provisions as subsec. (a), added subsec. (a) heading, and substituted “furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer” for “furnished to him by his employer for the convenience of the employer”.\nPub. L. 95–427  inserted provisions relating to factors not taken into account with respect to meals and certain fixed charges for meals.\nPub. L. 105–206 , title v, §\u202f5002(b),  July 22, 1998 ,  112 Stat. 789 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning before, on, or after the date of the enactment of this Act [ July 22, 1998 ].”\nPub. L. 104–188, title I, §\u202f1123(b) ,  Aug. 20, 1996 ,  110 Stat. 1768 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1995 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XI, §\u202f1164(b) ,  Oct. 22, 1986 ,  100 Stat. 2511 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1985 .”\nAmendment by  Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nAmendment by  Pub. L. 96–222  effective as if included in the Foreign Earned Income Act of 1978,  Pub. L. 95–615 , see  section 108(a)(2)(A) of Pub. L. 96–222 , set out as a note under  section 3 of this title .\nPub. L. 95–427, §\u202f4(b) ,  Oct. 7, 1978 ,  92 Stat. 998 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nAmendment by  Pub. L. 95–615  applicable to taxable years beginning after  Dec. 31, 1977 , with provision for election of prior law, see  section 209 of Pub. L. 95–615 , set out as a note under  section 911 of this title .\nPub. L. 96–605, title I, §\u202f107(b) ,  Dec. 28, 1980 ,  94 Stat. 3524 , provided that:  “In the case of any allowance received during calendar year 1974, 1975, 1976, or 1977, subsections (a)(2) and (e) of such section 3 [ section 3 of Pub. L. 95–427 , set out below] shall be applied by substituting the date one year after the date of the enactment of this Act [ Dec. 28, 1980 ] for ‘ April 15, 1979 ’ each place it appears.”\nPub. L. 95–427, §\u202f3 ,  Oct. 7, 1978 ,  92 Stat. 996 , as amended by  Pub. L. 96–605, title I, §\u202f107(a) ,  Dec. 28, 1980 ,  94 Stat. 3524 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— If— “(1)  an individual who was employed as a State police officer received a statutory subsistence allowance or a subsistence allowance negotiated in accordance with State law while so employed, \n \n “(2)  such individual elects, on or before  April 15, 1979 , and in such manner and form as the Secretary of the Treasury may prescribe, to have this section apply to such allowance, and \n \n “(3)  this section applies to such allowance, \n \n\n then, for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], such allowance shall not be included in such individual’s gross income. \n \n “(b)   Allowances to Which Section Applies .— For purposes of this section, this section applies to any statutory subsistence allowance or subsistence allowance negotiated in accordance with State law which was received— “(1)  after  December 31, 1969 , and before  January 1, 1974 , to the extent such individual did not include such allowance in gross income on his income tax return for the taxable year in which such allowance was received, or \n \n “(2)  during the calendar year 1974, 1975, 1976, or 1977. \n \n \n “(c)   Other Definitions .— For purposes of this section— “(1)   State police officer .— The term ‘State police officer’ means any police officer (including a highway patrolman) employed by a State (or the District of Columbia) on a full-time basis with the power to arrest. \n \n “(2)   Income tax return .— The term ‘income tax return’ means the return of the taxes imposed by subtitle A of the Internal Revenue Code of 1986. If an individual filed before  November 29, 1977 , an amended return for any taxable year, such amended return shall be treated as the return for such taxable year. \n \n \n “(d)   Limitation on Deduction .— If any individual receives a subsistence allowance which is excluded from gross income under subsection (a), no deduction shall be allowed under any provision of chapter 1 of the Internal Revenue Code of 1986 for expenses in respect of which he has received such allowance, except to the extent that such expenses exceed the amount excludable from gross income under subsection (a) and the excess is otherwise allowed as a deduction under such chapter 1. \n \n “(e)   Statute of Limitations .— If refund or credit of any overpayment of tax resulting from the application of this section is prevented at any time on or before  April 15, 1979 , by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of this section) may, nevertheless, be made or allowed if claim therefor is filed on or before  April 15, 1979 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, added  Pub. L. 94–455, title XXI, §\u202f2134(a) ,  Oct. 4, 1976 ,  90 Stat. 1926 ; amended  Pub. L. 97–34, title VIII, §\u202f802(a) ,  Aug. 13, 1981 ,  95 Stat. 349 ;  Pub. L. 97–448, title I, §\u202f108(a) ,  Jan. 12, 1983 ,  96 Stat. 2391 ;  Pub. L. 98–612, §\u202f1(a) , (b)(3)(A),  Oct. 31, 1984 ,  98 Stat. 3180 , 3181;  Pub. L. 99–514, title XI , §§\u202f1114(b)(3), 1151(c)(3), (g)(1), 1162(b),  Oct. 22, 1986 ,  100 Stat. 2450 , 2503, 2506, 2510;  Pub. L. 100–647, title I, §\u202f1011B(a)(31)(B) , title IV, §\u202f4002(a), (b)(1),  Nov. 10, 1988 ,  102 Stat. 3488 , 3643;  Pub. L. 101–140, title II, §\u202f203(a)(1) , (2),  Nov. 8, 1989 ,  103 Stat. 830 ;  Pub. L. 101–239, title VII, §\u202f7102(a)(1) ,  Dec. 19, 1989 ,  103 Stat. 2305 ;  Pub. L. 101–508, title XI, §\u202f11404(a) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 ;  Pub. L. 102–227, title I, §\u202f104(a)(1) ,  Dec. 11, 1991 ,  105 Stat. 1687 ;  Pub. L. 108–311, title II, §\u202f207(10) ,  Oct. 4, 2004 ,  118 Stat. 1177 , related to amounts received under qualified group legal services plans.\nA prior section 120,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 39 , related to statutory subsistence allowance received by police, prior to repeal by  Pub. L. 85–866, title I, §\u202f3(a) , (c),  Sept. 2, 1958 ,  72 Stat. 1607 , effective with respect to taxable years ending after  Sept. 30, 1958 , but only with respect to amounts received as a statutory subsistence allowance for any day after  Sept. 30, 1958 .\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence for periods aggregating 2 years or more.\nThe amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000.\nIf such spouses do not meet the requirements of subparagraph (A), the limitation under paragraph (1) shall be the sum of the limitations under paragraph (1) to which each spouse would be entitled if such spouses had not been married. For purposes of the preceding sentence, each spouse shall be treated as owning the property during the period that either spouse owned the property.\nSubsection (a) shall not apply to any sale or exchange by the taxpayer if, during the 2-year period ending on the date of such sale or exchange, there was any other sale or exchange by the taxpayer to which subsection (a) applied.\nIn the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting “$500,000” for “$250,000” if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.\nSubsection (a) shall not apply to so much of the gain from the sale or exchange of property as is allocated to periods of nonqualified use.\nThe term “period of nonqualified use” means any period (other than the portion of any period preceding  January 1, 2009 ) during which the property is not used as the principal residence of the taxpayer or the taxpayer’s spouse or former spouse.\nIf a husband and wife make a joint return for the taxable year of the sale or exchange of the property, subsections (a) and (c) shall apply if either spouse meets the ownership and use requirements of subsection (a) with respect to such property.\nFor purposes of this section, in the case of an unmarried individual whose spouse is deceased on the date of the sale or exchange of property, the period such unmarried individual owned and used such property shall include the period such deceased spouse owned and used such property before death.\nIn the case of an individual holding property transferred to such individual in a transaction described in section 1041(a), the period such individual owns such property shall include the period the transferor owned the property.\nSolely for purposes of this section, an individual shall be treated as using property as such individual’s principal residence during any period of ownership while such individual’s spouse or former spouse is granted use of the property under a divorce or separation instrument.\nFor purposes of this section, the destruction, theft, seizure, requisition, or condemnation of property shall be treated as the sale of such property.\nIn applying section 1033 (relating to involuntary conversions), the amount realized from the sale or exchange of property shall be treated as being the amount determined without regard to this section, reduced by the amount of gain not included in gross income pursuant to this section.\nIf the basis of the property sold or exchanged is determined (in whole or in part) under section 1033(b) (relating to basis of property acquired through involuntary conversion), then the holding and use by the taxpayer of the converted property shall be treated as holding and use by the taxpayer of the property sold or exchanged.\nSubsection (a) shall not apply to so much of the gain from the sale of any property as does not exceed the portion of the depreciation adjustments (as defined in section 1250(b)(3)) attributable to periods after  May 6, 1997 , in respect of such property.\nAt the election of the taxpayer, this section shall not fail to apply to the sale or exchange of an interest in a principal residence by reason of such interest being a remainder interest in such residence, but this section shall not apply to any other interest in such residence which is sold or exchanged separately.\nSubparagraph (A) shall not apply to any sale to, or exchange with, any person who bears a relationship to the taxpayer which is described in section 267(b) or 707(b).\nThe 5-year period described in subsection (a) shall not be extended more than 10 years by reason of subparagraph (A).\nThe term “qualified official extended duty” means any extended duty while serving at a duty station which is at least 50 miles from such property or while residing under Government orders in Government quarters.\nThe term “uniformed services” has the meaning given such term by  section 101(a)(5) of title 10 , United States Code, as in effect on the date of the enactment of this paragraph.\nThe term “member of the Foreign Service of the United States” has the meaning given the term “member of the Service” by paragraph (1), (2), (3), (4), or (5) of section 103 of the Foreign Service Act of 1980, as in effect on the date of the enactment of this paragraph.\nThe term “extended duty” means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.\nAn election under subparagraph (A) with respect to any property may not be made if such an election is in effect with respect to any other property.\nAn election under subparagraph (A) may be revoked at any time.\nIf a taxpayer acquires property in an exchange with respect to which gain is not recognized (in whole or in part) to the taxpayer under subsection (a) or (b) of section 1031, subsection (a) shall not apply to the sale or exchange of such property by such taxpayer (or by any person whose basis in such property is determined, in whole or in part, by reference to the basis in the hands of such taxpayer) during the 5-year period beginning with the date of such acquisition.\nFor purposes of subparagraph (A), rules similar to the rules of subparagraphs (B) and (D) of paragraph (9) shall apply.\nThis section shall not apply to any sale or exchange by an individual if the treatment provided by section 877(a)(1) applies to such individual.\nThis section shall not apply to any sale or exchange with respect to which the taxpayer elects not to have this section apply.\nFor purposes of this section, in the case of property the acquisition of which by the taxpayer resulted under section 1034\u202f 1 1 \u202fSee References in Text note below.  (as in effect on the day before the date of the enactment of this section) in the nonrecognition of any part of the gain realized on the sale or exchange of another residence, in determining the period for which the taxpayer has owned and used such property as the taxpayer’s principal residence, there shall be included the aggregate periods for which such other residence (and each prior residence taken into account under section 1223(6)\u202f 1  in determining the holding period of such property) had been so owned and used.\nThe date of the enactment of this paragraph, referred to in subsec. (d)(9)(C)(ii), (iii), is the date of enactment of  Pub. L. 108–121 , which was approved  Nov. 11, 2003 .\nSection 103 of the Foreign Service Act of 1980, referred to in subsec. (d)(9)(C)(iii), is classified to  section 3903 of Title 22 , Foreign Relations and Intercourse.\nSection 1034 (as in effect on the day before the date of the enactment of this section), referred to in subsec. (g), probably means  section 1034 of this title  as in effect on the day before the date of enactment of  Pub. L. 105–34  which amended this section generally and was approved  Aug. 5, 1997 . Section 1034 was repealed by  Pub. L. 105–34, title III, §\u202f312(b) ,  Aug. 5, 1997 ,  111 Stat. 839 .\nSection 1223(6), referred to in subsec. (g), was repealed by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(80)(C) ,  Dec. 19, 2014 ,  128 Stat. 4049 .\nPub. L. 109–135, title IV, §\u202f403(ee)(1) , (nn),  Dec. 21, 2005 ,  119 Stat. 2631 , 2632, which directed that subsec. (d) of this section be amended by redesignating the paragraph (10) relating to property acquired from a decedent as paragraph (11), effective as if included in the provisions to which such amendment relates of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , was executed as the probable intent of Congress by redesignating as paragraph (11) the paragraph (10) directed to be added to subsec. (d) of this section by  Pub. L. 107–16, §\u202f542(c) , (f)(1), applicable to estates of decedents dying after  Dec. 31, 2009 . See Codification note, 2001, 2003, and 2005 Amendment notes, and Effective Date of 2005 Amendment note below.\nPub. L. 108–121, title I, §\u202f101(a) , (b)(1),  Nov. 11, 2003 ,  117 Stat. 1336 , which directed that subsec. (d) of this section be amended by redesignating paragraph (9) as (10) and adding a new paragraph (9), effective as if included in the amendments made by section 312 of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , could not literally be executed insofar as it directed the redesignation because subsec. (d), as amended by  Pub. L. 105–34 , did not contain a paragraph (9). However, to reflect the probable intent of Congress, the amendment was executed by redesignating as paragraph (10) the paragraph (9) directed to be added to subsec. (d) of this section by  Pub. L. 107–16, §\u202f542(c) , (f)(1), applicable to estates of decedents dying after  Dec. 31, 2009 . See Codification note above and 2001, 2003, and 2005 Amendment notes and Effective Date of 2003 Amendment note below.\nA prior section 121 was renumbered  section 140 of this title .\n2017—Subsec. (d)(3)(B).  Pub. L. 115–97, §\u202f11051(b)(3)(A)(i) , struck out “(as defined in section 71(b)(2))” after “divorce or separation instrument”.\nSubsec. (d)(3)(C).  Pub. L. 115–97, §\u202f11051(b)(3)(A)(ii) , added subpar. (C).\n2014—Subsec. (b)(3).  Pub. L. 113–295, §\u202f221(a)(20) , struck out subpar. (A) designation and heading and subpar. (B) and realigned margins. Prior to amendment, text of subpar. (B) read as follows: “Subparagraph (A) shall be applied without regard to any sale or exchange before  May 7, 1997 .”\nSubsec. (b)(4), (5).  Pub. L. 113–295, §\u202f212(c) , redesignated par. (4), relating to exclusion of gain allocated to nonqualified use, as (5).\nSubsec. (d)(12)(B).  Pub. L. 113–295, §\u202f213(c)(1) , inserted “of paragraph (9)” after “and (D)”.\n2010—Subsec. (d)(11).  Pub. L. 111–312  amended subsec. (d) to read as if amendment by  Pub. L. 107–16, §\u202f542(c) , which originally added par. (9), had never been enacted. See Codification notes above and 2001 Amendment note and Effective Date of 2010 Amendment note below. Prior to amendment, par. (11) read as follows: “ Property acquired from a decedent .—The exclusion under this section shall apply to property sold by—\n“(A) the estate of a decedent,\n“(B) any individual who acquired such property from the decedent (within the meaning of section 1022), and\n“(C) a trust which, immediately before the death of the decedent, was a qualified revocable trust (as defined in section 645(b)(1)) established by the decedent,\ndetermined by taking into account the ownership and use by the decedent.”\n2008—Subsec. (b)(4).  Pub. L. 110–289  added par. (4) relating to exclusion of gain allocated to nonqualified use.\nSubsec. (d)(9)(C)(vi).  Pub. L. 110–245, §\u202f113(b) , struck out heading and text of cl. (vi). Text read as follows: “An employee of the intelligence community shall not be treated as serving on qualified extended duty unless such duty is at a duty station located outside the United States.”\nSubsec. (d)(9)(E).  Pub. L. 110–245, §\u202f113(a) , struck out heading and text of subpar. (E). Text read as follows: “Clause (iii) of subparagraph (A) shall not apply with respect to any sale or exchange after  December 31, 2010 .”\nSubsec. (d)(12).  Pub. L. 110–245, §\u202f110(a) , added par. (12).\n2007—Subsec. (b)(4).  Pub. L. 110–142  added par. (4) relating to special rule for certain sales by surviving spouses.\nSubsec. (d)(9)(E).  Pub. L. 110–172  added subpar. (E).\n2006—Subsec. (d)(9).  Pub. L. 109–432, §\u202f417(d) , substituted “Uniformed services, Foreign Service, and intelligence community” for “Members of uniformed services and Foreign Service” in heading.\nSubsec. (d)(9)(A).  Pub. L. 109–432, §\u202f417(a) , substituted “duty—\n“(i) as a member of the uniformed services,\n“(ii) as a member of the Foreign Service of the United States, or\n“(iii) as an employee of the intelligence community.”\nfor “duty as a member of the uniformed services or of the Foreign Service of the United States.”\nSubsec. (d)(9)(C)(iv), (v).  Pub. L. 109–432, §\u202f417(b) , added cl. (iv) and redesignated former cl. (iv) as (v).\nSubsec. (d)(9)(C)(vi).  Pub. L. 109–432, §\u202f417(c) , added cl. (vi).\n2005—Subsec. (d)(10).  Pub. L. 109–135, §\u202f403(ee)(2) , amended heading and text of par. (10) relating to property acquired in like-kind exchange generally. Prior to amendment, text read as follows: “If a taxpayer acquired property in an exchange to which section 1031 applied, subsection (a) shall not apply to the sale or exchange of such property if it occurs during the 5-year period beginning with the date of the acquisition of such property.”\nSubsec. (d)(11).  Pub. L. 109–135, §\u202f403(ee)(1) , redesignated par. (10), formerly par. (9), as added by  Pub. L. 107–16 , as (11). See Codification notes above and 2001 and 2003 Amendment notes and Effective Date of 2001 Amendment note below.\nSubsec. (g).  Pub. L. 109–135, §\u202f402(a)(3) , substituted “section 1223(6)” for “section 1223(7)”.\n2004—Subsec. (d)(10).  Pub. L. 108–357  added par. (10) relating to property acquired in like-kind exchange.\n2003—Subsec. (d)(9), (10).  Pub. L. 108–121  added par. (9) and redesignated former par. (9), as added by  Pub. L. 107–16 , as (10). See Codification notes above and 2001 Amendment note and Effective Date of 2001 Amendment note below.\n2001—Subsec. (d)(9).  Pub. L. 107–16, §\u202f542(c) , added par. (9). See Codification notes above and Effective Date of 2001 Amendment note below.\n1998—Subsec. (b)(2).  Pub. L. 105–206, §\u202f6005(e)(1) , substituted “Special rules for joint returns” for “$500,000 limitation for certain joint returns” in heading and amended text generally. Prior to amendment, text read as follows: “Paragraph (1) shall be applied by substituting ‘$500,000’ for ‘$250,000’ if—\n“(A) a husband and wife make a joint return for the taxable year of the sale or exchange of the property,\n“(B) either spouse meets the ownership requirements of subsection (a) with respect to such property,\n“(C) both spouses meet the use requirements of subsection (a) with respect to such property, and\n“(D) neither spouse is ineligible for the benefits of subsection (a) with respect to such property by reason of paragraph (3).”\nSubsec. (c)(1).  Pub. L. 105–206, §\u202f6005(e)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of a sale or exchange to which this subsection applies, the ownership and use requirements of subsection (a) shall not apply and subsection (b)(3) shall not apply; but the amount of gain excluded from gross income under subsection (a) with respect to such sale or exchange shall not exceed—\n“(A) the amount which bears the same ratio to the amount which would be so excluded under this section if such requirements had been met, as\n“(B) the shorter of—\n“(i) the aggregate periods, during the 5-year period ending on the date of such sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence, or\n“(ii) the period after the date of the most recent prior sale or exchange by the taxpayer to which subsection (a) applied and before the date of such sale or exchange,\nbears to 2 years.”\n1997— Pub. L. 105–34  amended section catchline and text generally. Prior to amendment, section related to one-time exclusion of gain from sale of principal residence by individual who had attained age 55.\n1988—Subsec. (d)(9).  Pub. L. 100–647  added par. (9).\n1981—Subsec. (b)(1).  Pub. L. 97–34  substituted “$125,000 ($62,500” for “$100,000 ($50,000”.\n1978— Pub. L. 95–600, §\u202f404(a) , substituted “One-time exclusion of gain from sale of principal residence by individual who has attained age 55” for “Gain from sale or exchange of residence of individual who has attained age 65” in section catchline.\nSubsec. (a).  Pub. L. 95–600, §\u202f404(a) , substituted “55” for “65”, “5-year” for “8-year”, and “3 years” for “5 years”.\nSubsec. (b).  Pub. L. 95–600, §\u202f404(a) , in par. (1) substituted provisions respecting dollar limitations for amount of gain for provisions setting forth applicable limitations where the adjusted sales price exceeds $35,000 and added par. (3).\nSubsec. (d)(2).  Pub. L. 95–600, §\u202f404(c)(1) , substituted “5-year period” for “8-year period”.\nSubsec. (d)(5).  Pub. L. 95–600, §\u202f404(c)(2) , substituted “5-year period” for “8-year period” and “3 years” for “5 years”.\nSubsec. (d)(8).  Pub. L. 95–600, §\u202f404(b) , added par. (8).\n1976—Subsec. (b)(1).  Pub. L. 94–455, §\u202f1404(a) , substituted “$35,000” for “$20,000” in three places.\nSubsecs. (c), (d)(5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nAmendment by  section 212(c) of Pub. L. 113–295  effective as if included in the provisions of the Housing Assistance Tax Act of 2008,  Pub. L. 110–289, div. C , to which such amendment relates, see  section 212(d) of Pub. L. 113–295 , set out as a note under  section 42 of this title .\nPub. L. 113–295, div. A, title II, §\u202f213(d) ,  Dec. 19, 2014 ,  128 Stat. 4034 , provided that:  “The amendments made by this section [amending this section and sections 125 and 877 of this title and provisions set out as a note under  section 6511 of this title ] shall take effect as if included in the provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008 [ Pub. L. 110–245 ] to which they relate.”\nAmendment by  section 221(a)(20) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–312, title III, §\u202f301(e) ,  Dec. 17, 2010 ,  124 Stat. 3301 , provided that:  “Except as otherwise provided in this section, the amendments made by this section [amending this section and sections 170, 684, 1014, 1040, 1221, 1246, 1291, 1296, 2505, 4947, 6018, 6019, 6075, and 7701 of this title and repealing sections 1022, 2210, 2664, and 6716 of this title] shall apply to estates of decedents dying, and transfers made, after  December 31, 2009 .”\nPub. L. 111–312, title III, §\u202f304 ,  Dec. 17, 2010 ,  124 Stat. 3304 , which provided that section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , would apply to the amendments made by title III of  Pub. L. 111–312 , was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(2) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\n[Amendment by  Pub. L. 112–240  (repealing  section 304 of Pub. L. 111–312 , formerly set out above) applicable to taxable, plan, or limitation years beginning after  Dec. 31, 2012 , and estates of decedents dying, gifts made, or generation skipping transfers after  Dec. 31, 2012 , see  section 101(a)(3) of Pub. L. 112–240 , set out as a note following former  section 901 of Pub. L. 107–16  which was set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title .]\nPub. L. 110–289, div. C, title III, §\u202f3092(b) ,  July 30, 2008 ,  122 Stat. 2912 , provided that:  “The amendment made by this section [amending this section] shall apply to sales and exchanges after  December 31, 2008 .”\nPub. L. 110–245, title I, §\u202f110(b) ,  June 17, 2008 ,  122 Stat. 1634 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 110–245, title I, §\u202f113(c) ,  June 17, 2008 ,  122 Stat. 1635 , provided that:  “The amendments made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [ June 17, 2008 ].”\nPub. L. 110–142, §\u202f7(b) ,  Dec. 20, 2007 ,  121 Stat. 1806 , provided that:  “The amendment made by this section [amending this section] shall apply to sales or exchanges after  December 31, 2007 .”\nPub. L. 109–432, div. A, title IV, §\u202f417(e) ,  Dec. 20, 2006 ,  120 Stat. 2966 , as amended by  Pub. L. 110–172, §\u202f11(a)(11)(B) ,  Dec. 29, 2007 ,  121 Stat. 2485 , provided that:  “The amendments made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [ Dec. 20, 2006 ].”\nAmendment by  section 402(a)(3) of Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79  et seq.) before its repeal, see  section 402(m) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendment by  section 403(ee) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f840(b) ,  Oct. 22, 2004 ,  118 Stat. 1597 , provided that:  “The amendment made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–121, title I, §\u202f101(b) ,  Nov. 11, 2003 ,  117 Stat. 1336 , provided that: \n “(1)   Effective date .— The amendments made by this section [amending this section] shall take effect as if included in the amendments made by section 312 of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ]. \n \n “(2)   Waiver of limitations .— If refund or credit of any overpayment of tax resulting from the amendments made by this section [amending this section] is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [ Nov. 11, 2003 ] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.”\nPub. L. 107–16, title V, §\u202f542(f) ,  June 7, 2001 ,  115 Stat. 86 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting sections 1022 and 6716 of this title and amending this section and sections 170, 684, 1040, 1221, 1246, 1291, 1296, 4947, 6018, 6019, 6075, and 7701 of this title] shall apply to estates of decedents dying after  December 31, 2009 . \n \n “(2)   Transfers to nonresidents .— The amendments made by subsection (e)(1) [amending  section 684 of this title ] shall apply to transfers after  December 31, 2009 . \n \n “(3)   Section 4947 .— The amendment made by subsection (e)(4) [amending  section 4947 of this title ] shall apply to deductions for taxable years beginning after  December 31, 2009 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title III, §\u202f312(d) ,  Aug. 5, 1997 ,  111 Stat. 841 , as amended by  Pub. L. 105–206, title VI, §\u202f6005(e)(3) ,  July 22, 1998 ,  112 Stat. 806 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 25, 32, 56, 143, 163, 215, 280A, 464, 512, 1016, 1033, 1038, 1223, 1250, 1274, 6012, 6045, 6212, 6334, 6504, and 7872 of this title and repealing  section 1034 of this title ] shall apply to sales and exchanges after  May 6, 1997 . \n \n “(2)   Sales on or before date of enactment .— At the election of the taxpayer, the amendments made by this section shall not apply to any sale or exchange on or before the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(3)   Certain sales within 2 years after date of enactment .— Section 121 of the Internal Revenue Code of 1986 (as amended by this section) shall be applied without regard to subsection (c)(2)(B) thereof in the case of any sale or exchange of property during the 2-year period beginning on the date of the enactment of this Act if the taxpayer held such property on the date of the enactment of this Act and fails to meet the ownership and use requirements of subsection (a) thereof with respect to such property. \n \n “(4)   Binding contracts .— At the election of the taxpayer, the amendments made by this section shall not apply to a sale or exchange after the date of the enactment of this Act, if— “(A)  such sale or exchange is pursuant to a contract which was binding on such date, or \n \n “(B)  without regard to such amendments, gain would not be recognized under section 1034 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) on such sale or exchange by reason of a new residence acquired on or before such date or with respect to the acquisition of which by the taxpayer a binding contract was in effect on such date. \n \n\n This paragraph shall not apply to any sale or exchange by an individual if the treatment provided by section 877(a)(1) of the Internal Revenue Code of 1986 applies to such individual.”\nPub. L. 100–647, title VI, §\u202f6011(b) ,  Nov. 10, 1988 ,  102 Stat. 3691 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to any sale or exchange after  September 30, 1988 , in taxable years ending after such date.”\nPub. L. 97–34, title I, §\u202f123(b) ,  Aug. 13, 1981 ,  95 Stat. 197 , provided that:  “The amendment made by this section [amending this section] shall apply to residences sold or exchanged after  July 20, 1981 .”\nPub. L. 95–600, title IV, §\u202f404(d)(1) ,  Nov. 6, 1978 ,  92 Stat. 2870 , provided that:  “The amendments made by this section [amending this section and sections 1033, 1034, 1038, 1250, and 6012 of this title] shall apply to sales or exchanges after  July 26, 1978 , in taxable years ending after such date.”\nPub. L. 94–455, title XIV, §\u202f1404(b) ,  Oct. 4, 1976 ,  90 Stat. 1733 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nPub. L. 88–272, title II, §\u202f206(c) ,  Feb. 26, 1964 ,  78 Stat. 40 , provided that:  “The amendments made by this section [enacting this section, redesignating former section 121 as 122, and amending sections 1033, 1034, and 6012 of this title] shall apply to dispositions after  Dec. 31, 1963 , in taxable years ending after such date.”\nPub. L. 105–261, div. A, title X, §\u202f1074 ,  Oct. 17, 1998 ,  112 Stat. 2138 , provided that:  “It is the sense of Congress that a member of the Armed Forces should be treated for purposes of section 121 of the Internal Revenue Code of 1986 as using property as a principal residence during any continuous period that the member is serving on active duty for 180 days or more with the Armed Forces, but only if the member used the property as a principal residence for any period during or immediately before that period of active duty.”\nPub. L. 95–600, title IV, §\u202f404(d)(2) ,  Nov. 6, 1978 ,  92 Stat. 2870 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of a sale or exchange of a residence before  July 26, 1981 , a taxpayer who has attained age 65 on the date of such sale or exchange may elect to have section 121 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applied by substituting ‘8-year period’ for ‘5-year period’ and ‘5 years’ for ‘3 years’ in subsections (a), (d)(2), and (d)(5) of such section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of a member or former member of the uniformed services of the United States, gross income does not include the amount of any reduction in his retired or retainer pay pursuant to the provisions of chapter 73 of title 10, United States Code.\nIn the case of any individual referred to in subsection (a), all amounts received as retired or retainer pay shall be excluded from gross income until there has been so excluded an amount equal to the consideration for the contract. The preceding sentence shall apply only to the extent that the amounts received would, but for such sentence, be includible in gross income.\nA prior section 122 was renumbered  section 140 of this title .\n2014—Subsec. (b)(1).  Pub. L. 113–295  struck out “after  December 31, 1965 ,” after “all amounts received”.\n1974—Subsec. (a).  Pub. L. 93–406, §\u202f2007(a) , substituted “United States, gross income does not include the amount of any reduction in his retired or retainer pay pursuant to the provisions of chapter 73 of title 10, United States Code” for “United States who has made an election under chapter 73 of title 10 of the United States Code to receive a reduced amount of retired or retainer pay, gross income does not include the amount of any reduction after  December 31, 1965 , in his retired or retainer pay by reason of such election”.\nSubsec. (b)(2).  Pub. L. 93–406, §\u202f2005(c)(10) , substituted “72(n)” for “72( o )”.\nSubsec. (b)(2)(B).  Pub. L. 93–406, §\u202f2007(b)(1) , inserted reference to  section 1452(d) of title 10 .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 2005(c)(10) of Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nPub. L. 93–406, title II, §\u202f2007(c) ,  Sept. 2, 1974 ,  88 Stat. 993 , provided that:  “The amendments made by this section [amending this section and sections 72, 101, and 2039 of this title] apply to taxable years ending on or after  September 21, 1972 . The amendments made by paragraphs (3) and (4) of subsection (b) [amending sections 101 and 2039 of this title] apply with respect to individuals dying on or after such date”.\nPub. L. 89–365, §\u202f1(d) ,  Mar. 10, 1966 ,  80 Stat. 33 , provided that:  “The amendments made by subsections (a) and (b) [enacting this section and amending  section 72 of this title ] shall apply with respect to taxable years ending after  December 31, 1965 . The amendment made by subsection (c) [amending  section 101 of this title ] shall apply with respect to individuals making an election under chapter 73 of title 10 of the United States Code who die after  December 31, 1965 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of an individual whose principal residence is damaged or destroyed by fire, storm, or other casualty, or who is denied access to his principal residence by governmental authorities because of the occurrence or threat of occurrence of such a casualty, gross income does not include amounts received by such individual under an insurance contract which are paid to compensate or reimburse such individual for living expenses incurred for himself and members of his household resulting from the loss of use or occupancy of such residence.\nA prior section 123 was renumbered  section 140 of this title .\nPub. L. 91–172, title IX, §\u202f901(c) ,  Dec. 30, 1969 ,  83 Stat. 709 , provided that:  “The amendments made by this section [enacting this section] shall apply with respect to amounts received on or after  January 1, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, added  Pub. L. 95–618, title II, §\u202f242(a) ,  Nov. 9, 1978 ,  92 Stat. 3193 , related to qualified transportation provided by employers.\nA prior section 124 was renumbered  section 140 of this title .\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Except as provided in subsection (b), no amount shall be included in the gross income of a participant in a cafeteria plan solely because, under the plan, the participant may choose among the benefits of the plan.\nIn the case of a key employee (within the meaning of section 416(i)(1)), subsection (a) shall not apply to any benefit attributable to a plan for which the qualified benefits provided to key employees exceed 25 percent of the aggregate of such benefits provided for all employees under the plan. For purposes of the preceding sentence, qualified benefits shall be determined without regard to the second sentence of subsection (f).\nFor purposes of determining the taxable year of inclusion, any benefit described in paragraph (1) or (2) shall be treated as received or accrued in the taxable year of the participant or key employee in which the plan year ends.\nFor purposes of subparagraph (B) of subsection (b)(1), a cafeteria plan does not discriminate where qualified benefits and total benefits (or employer contributions allocable to qualified benefits and employer contributions for total benefits) do not discriminate in favor of highly compensated participants.\nThe term “cafeteria plan” does not include any plan which provides for deferred compensation.\nSubparagraph (A) shall not apply to a profit-sharing or stock bonus plan or rural cooperative plan (within the meaning of section 401(k)(7)) which includes a qualified cash or deferred arrangement (as defined in section 401(k)(2)) to the extent of amounts which a covered employee may elect to have the employer pay as contributions to a trust under such plan on behalf of the employee.\nSubparagraph (A) shall not apply to a plan to the extent of amounts which a covered employee may elect to have the employer pay as contributions to a health savings account established on behalf of the employee.\nThe term “highly compensated individual” means an individual who is described in subparagraph (A), (B), (C), or (D) of paragraph (1).\nThe term “qualified benefit” means any benefit which, with the application of subsection (a), is not includible in the gross income of the employee by reason of an express provision of this chapter (other than section 106(b), 117, 127, or 132). Such term includes any group term life insurance which is includible in gross income only because it exceeds the dollar limitation of section 79 and such term includes any other benefit permitted under regulations.\nThe term “qualified benefit” shall not include any product which is advertised, marketed, or offered as long-term care insurance.\nThe term “qualified benefit” shall not include any qualified health plan (as defined in section 1301(a) of the Patient Protection and Affordable Care Act) offered through an Exchange established under section 1311 of such Act.\nSubparagraph (A) shall not apply with respect to any employee if such employee’s employer is a qualified employer (as defined in section 1312(f)(2) of the Patient Protection and Affordable Care Act) offering the employee the opportunity to enroll through such an Exchange in a qualified health plan in a group market.\nFor purposes of this section, a plan shall not be treated as discriminatory if the plan is maintained under an agreement which the Secretary finds to be a collective bargaining agreement between employee representatives and one or more employers.\nAll employees who are treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this section.\nFor purposes of this title, a plan or other arrangement shall not fail to be treated as a cafeteria plan or health flexible spending arrangement (and shall not fail to be treated as an accident or health plan) merely because such arrangement provides for qualified reservist distributions.\nFor purposes of this section, if a benefit is provided under a cafeteria plan through employer contributions to a health flexible spending arrangement, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement.\nAn eligible employer maintaining a simple cafeteria plan with respect to which the requirements of this subsection are met for any year shall be treated as meeting any applicable nondiscrimination requirement during such year.\nThe requirements of subparagraph (A)(ii) shall not be treated as met if, under the plan, the rate of contributions with respect to any salary reduction contribution of a highly compensated or key employee at any rate of contribution is greater than that with respect to an employee who is not a highly compensated or key employee.\nSubject to subparagraph (B), nothing in this paragraph shall be treated as prohibiting an employer from making contributions to provide qualified benefits under the plan in addition to contributions required under subparagraph (A).\nThe term “salary reduction contribution” means, with respect to a cafeteria plan, any amount which is contributed to the plan at the election of the employee and which is not includible in gross income by reason of this section.\nThe term “qualified employee” means, with respect to a cafeteria plan, any employee who is not a highly compensated or key employee and who is eligible to participate in the plan.\nThe term “highly compensated employee” has the meaning given such term by section 414(q).\nThe term “key employee” has the meaning given such term by section 416(i).\nThe term “eligible employer” means, with respect to any year, any employer if such employer employed an average of 100 or fewer employees on business days during either of the 2 preceding years. For purposes of this subparagraph, a year may only be taken into account if the employer was in existence throughout the year.\nIf an employer was not in existence throughout the preceding year, the determination under subparagraph (A) shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current year.\nThis subparagraph shall cease to apply if the employer employs an average of 200 or more employees on business days during any year preceding any such subsequent year.\nAny reference in this paragraph to an employer shall include a reference to any predecessor of such employer.\nAll persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or ( o ) of section 414, shall be treated as one person.\nFor purposes of this subsection, the term “applicable nondiscrimination requirement” means any requirement under subsection (b) of this section, section 79(d), section 105(h), or paragraph (2), (3), (4), or (8) of section 129(d).\nThe term “compensation” has the meaning given such term by section 414(s).\nFor reporting and recordkeeping requirements, see section 6039D.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSections 1301, 1311, and 1312 of the Patient Protection and Affordable Care Act, referred to in subsec. (f)(3), are classified to sections 18021, 18031, and 18032, respectively, of Title 42, The Public Health and Welfare.\nPub. L. 101–140, §\u202f203(a)(1) , amended this section to read as if the amendments made by  section 1151(d)(1) of Pub. L. 99–514  (amending this section generally) had not been enacted. Subsequent to amendment by  Pub. L. 99–514 , this section was amended by  Pub. L. 100–647  and  Pub. L. 101–239 . See 1989 and 1988 Amendment notes below.\nA prior section 125 was renumbered  section 140 of this title .\n2018—Subsec. (e)(2).  Pub. L. 115–141  substituted “subparagraph” for “subparagraphs”.\n2017—Subsec. (i)(2)(B).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2014—Subsec. (b)(2).  Pub. L. 113–295, §\u202f220(f) , substituted “qualified benefits” for “statutory nontaxable benefits” in two places.\nSubsec. (h)(1).  Pub. L. 113–295, §\u202f213(b) , inserted “(and shall not fail to be treated as an accident or health plan)” before “merely”.\nSubsec. (h)(2).  Pub. L. 113–295, §\u202f220(g) , substituted “means any” for “means, any” in introductory provisions.\n2010—Subsec. (f).  Pub. L. 111–148, §\u202f1515(a) , (b), substituted “For purposes of this section—” for “For purposes of this section,”; designated remainder of first sentence and second sentence as par. (1), inserted heading, and substituted “The term” for “the term”; designated third sentence as par. (2), inserted heading, and substituted “The term ‘qualified benefit’ shall not include” for “Such term shall not include”; and added par. (3).\nSubsec. (i).  Pub. L. 111–148, §\u202f10902(a) , amended subsec. (i) generally. Prior to amendment, text read as follows: “For purposes of this section, if a benefit is provided under a cafeteria plan through employer contributions to a health flexible spending arrangement, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement.”\nPub. L. 111–148, §\u202f9005(a)(2) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (i)(2).  Pub. L. 111–152, §\u202f1403(b)(1) , substituted “ December 31, 2013 ” for “ December 31, 2011 ” in introductory provisions.\nSubsec. (i)(2)(B).  Pub. L. 111–152, §\u202f1403(b)(2) , substituted “2012” for “2010”.\nSubsec. (j).  Pub. L. 111–148, §\u202f9022(a) , added subsec. (j). Former subsec. (j) redesignated (k).\nPub. L. 111–148, §\u202f9005(a)(1) , redesignated subsec. (j) as (k).\nSubsec. (k).  Pub. L. 111–148, §\u202f9022(a) , redesignated subsec. (j) as (k). Former subsec. (k) redesignated ( l ).\nPub. L. 111–148, §\u202f9005(a)(1) , redesignated subsec. (j) as (k).\nSubsec. ( l ).  Pub. L. 111–148, §\u202f9022(a) , redesignated subsec. (k) as ( l ).\n2008—Subsecs. (h) to (j).  Pub. L. 110–245  added subsec. (h) and redesignated former subsecs. (h) and (i) as (i) and (j), respectively.\n2007—Subsec. (b)(2).  Pub. L. 110–172  substituted “second sentence” for “last sentence”.\n2004—Subsec. (e)(1)(D).  Pub. L. 108–311  inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\n2003—Subsec. (d)(2)(D).  Pub. L. 108–173 , which directed the amendment of section 125(d)(2) by adding subpar. (D), was executed to this section, which is section 125(d)(2) of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n1996—Subsec. (f).  Pub. L. 104–191, §\u202f321(c)(1) , inserted at end “Such term shall not include any product which is advertised, marketed, or offered as long-term care insurance.”\nPub. L. 104–191, §\u202f301(d) , inserted “106(b),” before “117”.\n1990—Subsec. (f).  Pub. L. 101–508  substituted “section 117,” for “section 117, 124,”.\n1989— Pub. L. 101–140, §\u202f203(a)(1) , amended section to read as if amendments by  Pub. L. 99–514, §\u202f1151(d)(1) , had not been enacted, see 1986 Amendment note below.\nSubsec. (d)(2).  Pub. L. 101–140, §\u202f203(b)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘cafeteria plan’ does not include any plan which provides for deferred compensation. The preceding sentence shall not apply in the case of a profit-sharing or stock bonus plan which includes a qualified cash or deferred arrangement (as defined in section 401(k)(2)) to the extent of amounts which a covered employee may elect to have the employer pay as contributions to a trust under such plan on behalf of the employee.”\nSubsec. (e)(2)(A).  Pub. L. 101–239  substituted “includible only because” for “includable only because”, see Codification note above.\nSubsec. (g)(3)(A).  Pub. L. 101–140, §\u202f203(a)(3) , substituted “section 410(b)(2)(A)(i)” for “subparagraph (B) of section 410(b)(1)”.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1011B(a)(11)(A) , amended subsec. (a) generally, see Codification note above. Prior to amendment, subsec. (a) read as follows: “In the case of a cafeteria plan—\n“(1) amounts shall not be included in gross income of a participant in such plan solely because, under the plan, the participant may choose among the benefits of the plan, and\n“(2) if the plan fails to meet the requirements of subsection (b) for any plan year—\n“(A) paragraph (1) shall not apply, and\n“(B) notwithstanding any other provision of part III of this subchapter, any qualified benefits received under such cafeteria plan by a highly compensated employee for such plan year shall be included in the gross income of such employee for the taxable year with or within which such plan year ends.”\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1011B(a)(11)(B) , substituted “In the case of a highly compensated employee, subsection (a) shall not apply to any benefit attributable to a plan year” for “A plan shall be treated as failing to meet the requirements of this subsection”, see Codification note above.\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1011B(a)(11)(C) , substituted “subsection (a) shall not apply to any plan year” for “a plan shall be treated as failing to meet the requirements of this subsection” in first sentence, see Codification note above.\nPub. L. 100–647, §\u202f1011B(a)(13)(B) , substituted “shall not include benefits which (without regard to this paragraph) are includible in gross income” for “shall be determined without regard to the last sentence of subsection (e)”, see Codification note above.\nSubsec. (c)(1)(B).  Pub. L. 100–647, §\u202f1011B(a)(12) , amended subpar. (B) generally, see Codification note above. Prior to amendment, subpar. (B) read as follows: “the participants may choose—\n“(i) among 2 or more benefits consisting of cash and qualified benefits, or\n“(ii) among 2 or more qualified benefits.”\nSubsec. (c)(2)(B).  Pub. L. 100–647, §\u202f1018(t)(6) , inserted “or rural electric cooperative plan (within the meaning of section 401(k)(7))” after “stock bonus plan”, see Codification note above.\nSubsec. (c)(2)(C).  Pub. L. 100–647, §\u202f6051(b) , inserted at end “In applying section 89 to a plan described in this subparagraph, contributions under the plan shall be tested as of the time the contributions were made.”, see Codification note above.\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f1011B(a)(13)(A) , inserted “and without regard to section 89(a)” after “subsection (a)”, see Codification note above.\nSubsec. (e)(2)(A).  Pub. L. 100–647, §\u202f4002(b)(2) , inserted “or any insurance under a qualified group legal services plan the value of which is so includable only because it exceeds the limitation of section 120(a)” after “section 79”, see Codification note above.\n1986— Pub. L. 99–514, §\u202f1151(d)(1) , amended section generally, revising and restating as subsecs. (a) to (g) provisions of former subsecs. (a) to (i) so as to coincide with the coming into effect of  section 89 of this title .\nSubsecs. (c), (d)(1)(B).  Pub. L. 99–514, §\u202f1853(b)(1)(A) , substituted “qualified benefits” for “statutory nontaxable benefits” wherever appearing.\nSubsec. (f).  Pub. L. 99–514, §\u202f1853(b)(1)(B) , substituted “Qualified benefits defined” for “Statutory nontaxable benefits defined” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘statutory nontaxable benefit’ means any benefit which, with the application of subsection (a) is not includible in the gross income of the employee by reason of an express provision of this chapter (other than section 117, 124, 127, or 132). Such term includes any group term life insurance which is includible in gross income only because it exceeds the dollar limitation of section 79.”\n1984—Subsec. (b).  Pub. L. 98–369, §\u202f531(b)(3) , amended subsec. (b) generally, substituting “and key employees” for “where plan is discriminatory” in heading and “Highly compensated participants” for “In general” in par. (1) heading, adding par. (2), redesignating former par. (2) as (3), and inserting therein references to par. (2) and to taxable year of key employee.\nSubsec. (c).  Pub. L. 98–369, §\u202f531(b)(2)(B) , inserted “statutory” before “nontaxable benefits” in two places.\nSubsec. (d)(1).  Pub. L. 98–369, §\u202f531(b)(1) , substituted “among 2 or more benefits consisting of cash and statutory nontaxable benefits” for “among two or more benefits” in cl. (B) and struck out “The benefits which may be chosen may be nontaxable benefits, or cash, property, or other taxable benefits.”\nSubsec. (f).  Pub. L. 98–369, §\u202f531(b)(2)(A) , amended subsec. (f) generally, inserting “Statutory” in heading and “statutory” before “nontaxable benefit” in text, providing that the benefit be excluded by reason of an express provision of this chapter (other than section 117, 124, 127, or 132), and extending the benefit to include group term life insurance.\nSubsec. (h).  Pub. L. 98–611  and  Pub. L. 98–612 , made identical amendments, substituting cross reference provision for reporting requirements provisions.\nPub. L. 98–369, §\u202f531(b)(4)(A) , added subsec. (h) relating to reporting requirements provisions. Former subsec. (h) redesignated (i).\nSubsec. (i).  Pub. L. 98–369, §\u202f531(b)(4)(A) , redesignated subsec. (h) as (i).\n1980—Subsec. (d)(2).  Pub. L. 96–605, §\u202f226(a) , inserted provision that the sentence excluding deferred compensation plans not apply in the case of a profit-sharing or stock bonus plan which includes a qualified cash or deferred arrangement, as defined in section 401(k)(2) to the extent of amounts which a covered employee may elect to have the employer pay as contributions to a trust under such plan on behalf of the employee.\nSubsec. (g)(3)(B).  Pub. L. 96–222  substituted “employment requirement” for “service requirement” in cls. (i) and (ii).\nSubsec. (g)(4).  Pub. L. 96–613, §\u202f5(b)(2) , and  Pub. L. 96–605, §\u202f201(b)(2) , made identical amendments by substituting “controlled groups, etc.” for “controlled groups” in heading, and by substituting “subsection (b), (c), or (m) of section 414” for “subsection (b) or (c) of section 414” in text.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 213(b) of Pub. L. 113–295  effective as if included in the provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008,  Pub. L. 110–245 , to which such amendment relates, see  section 213(d) of Pub. L. 113–295 , set out as a note under  section 121 of this title .\nPub. L. 111–148, title I, §\u202f1515(c) ,  Mar. 23, 2010 ,  124 Stat. 258 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 111–148, title IX, §\u202f9005(b) ,  Mar. 23, 2010 ,  124 Stat. 855 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2010 .”\nPub. L. 111–148, title IX, §\u202f9022(b) ,  Mar. 23, 2010 ,  124 Stat. 876 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 2010 .”\nPub. L. 111–148, title X, §\u202f10902(b) ,  Mar. 23, 2010 ,  124 Stat. 1016 , as amended by  Pub. L. 111–152, title I, §\u202f1403(a) ,  Mar. 30, 2010 ,  124 Stat. 1063 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2012 .”\nPub. L. 110–245, title I, §\u202f114(b) ,  June 17, 2008 ,  122 Stat. 1636 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ June 17, 2008 ].”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 108–173  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 1201(k) of Pub. L. 108–173 , set out as a note under  section 62 of this title .\nAmendment by  section 301(d) of Pub. L. 104–191  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 301(j) of Pub. L. 104–191 , set out as a note under  section 62 of this title .\nAmendment by  section 321(c)(1) of Pub. L. 104–191  applicable to contracts issued after  Dec. 31, 1996 , see  section 321(f) of Pub. L. 104–191 , set out as an Effective Date note under  section 7702B of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by sections 1011B(a)(11)–(13) and 1018(t)(6) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4002(c) ,  Nov. 10, 1988 ,  102 Stat. 3643 , provided that:  “The amendments made by this section [amending this section and  section 120 of this title ] shall apply to taxable years ending after  December 31, 1987 .”\nPub. L. 100–647, title VI, §\u202f6051(c) ,  Nov. 10, 1988 ,  102 Stat. 3696 , provided that:  “The amendments made by this section [amending this section and  section 89 of this title ] shall take effect as if included in the amendments made by section 1151 of the Reform Act [ Pub. L. 99–514 , see Effective Date of 1986 Amendment note set out under  section 79 of this title ].”\nAmendment by  section 1151(d)(1) of Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nAmendment by  section 1853(b)(1) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–612  effective  Jan. 1, 1985 , see  Pub. L. 98–612, §\u202f1(d)(2) ,  Oct. 31, 1984 ,  98 Stat. 3181 .\nAmendment by  Pub. L. 98–611  effective  Jan. 1, 1985 , see  section 1(g)(2) of Pub. L. 98–611 , set out as a note under  section 127 of this title .\nAmendment by  Pub. L. 98–369  effective  Jan. 1, 1985 , see  section 531(h) of Pub. L. 98–369 , set out as an Effective Date note under  section 132 of this title .\nAmendments by  section 201(b)(2) of Pub. L. 96–605  and  section 5(b)(2) of Pub. L. 96–613  applicable to years ending after  Nov. 30, 1980 , except in the case of a plan in existence on  Nov. 30, 1980  where amendments by  section 201(b)(2) of Pub. L. 96–605  and  section 5(b)(2) of Pub. L. 96–613  applicable to plan years beginning after  Nov. 30, 1980 , see  section 201(c) of Pub. L. 96–605  and  section 5(c) of Pub. L. 96–613 , set out as a note under  section 414 of this title .\nPub. L. 96–605, title II, §\u202f226(b) ,  Dec. 28, 1980 ,  94 Stat. 3530 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1980 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f134(c) ,  Nov. 6, 1978 ,  92 Stat. 2785 , as amended by  Pub. L. 96–222, title I, §\u202f101(a)(6)(B) ,  Apr. 1, 1980 ,  94 Stat. 197 , provided that:  “The amendments made by this section [enacting this section] shall apply to plan years beginning after  December 31, 1978 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 116–260, div. EE, title II, §\u202f214 ,  Dec. 27, 2020 ,  134 Stat. 3068 , provided that: \n “(a)   Carryover From  2020  Plan Year .— For plan years ending in 2020, a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement permits participants to carry over (under rules similar to the rules applicable to health flexible spending arrangements) any unused benefits or contributions remaining in any such flexible spending arrangement from such plan year to the plan year ending in 2021. \n \n “(b)   Carryover From  2021  Plan Year .— For plan years ending in 2021, a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement permits participants to carry over (under rules similar to the rules applicable to health flexible spending arrangements) any unused benefits or contributions remaining in any such flexible spending arrangement from such plan year to the plan year ending in 2022. \n \n “(c)   Extension of Grace Periods, etc.— “(1)   In general .— A plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement extends the grace period for a plan year ending in 2020 or 2021 to 12 months after the end of such plan year, with respect to unused benefits or contributions remaining in a health flexible spending arrangement or a dependent care flexible spending arrangement. \n \n “(2)   Post-termination reimbursements from health FSAs .— A plan that includes a health flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows (under rules similar to the rules applicable to dependent care flexible spending arrangements) an employee who ceases participation in the plan during calendar year 2020 or 2021 to continue to receive reimbursements from unused benefits or contributions through the end of the plan year in which such participation ceased (including any grace period, taking into account any modification of a grace period permitted under paragraph (1)). \n \n \n “(d)   Special Carry Forward Rule for Dependent Care Flexible Spending Arrangements Where Dependent Aged Out During Pandemic.— “(1)   In general .— In the case of any eligible employee, section 21(b)(1)(A) of the Internal Revenue Code of 1986 shall be applied by substituting ‘age 14’ for ‘age 13’ for purposes of determining the dependent care assistance which may be paid or reimbursed with respect to such employee under the dependent care flexible spending arrangement referred to in paragraph (3)(A) with respect to such employee during— “(A)  the plan year described in paragraph (3)(A), and \n \n “(B)  in the case of an employee described in paragraph (3)(B)(ii), the subsequent plan year. \n \n \n “(2)   Application to subsequent plan year limited to unused balance from preceding plan year .— Paragraph (1)(B) shall only apply to so much of the amounts paid for dependent care assistance with respect to the dependents referred to in paragraph (3)(B) as does not exceed the unused balance described in paragraph (3)(B)(ii). \n \n “(3)   Eligible employee .— For purposes of this section, the term ‘eligible employee’ means any employee who— “(A)  is enrolled in a dependent care flexible spending arrangement for the last plan year with respect to which the end of the regular enrollment period for such plan year was on or before  January 31, 2020 , and \n \n “(B)  has one or more dependents (as defined in section 152(a)(1) of the Internal Revenue Code of 1986) who attain the age of 13— “(i)  during such plan year, or \n \n “(ii)  in the case of an employee who (after the application of this section) has an unused balance in the employee’s account under such arrangement for such plan year (determined as of the close of the last day on which, under the terms of the plan, claims for reimbursement may be made with respect to such plan year), the subsequent plan year. \n \n \n \n \n “(e)   Change in Election Amount .— For plan years ending in 2021, a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows an employee to make an election to modify prospectively the amount (but not in excess of any applicable dollar limitation) of such employee’s contributions to any such flexible spending arrangement (without regard to any change in status). \n \n “(f)   Definitions .— Any term used in this section which is also used in section 106, 125, or 129 of the Internal Revenue Code of 1986, or the regulations or guidance thereunder, shall have the same meaning as when used in such section, regulations, or guidance. \n \n “(g)   Plan Amendments .— A plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement is amended pursuant to a provision under this section and such amendment is retroactive, if— “(1)  such amendment is adopted not later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective, and \n \n “(2)  the plan or arrangement is operated consistent with the terms of such amendment during the period beginning on the effective date of the amendment and ending on the date the amendment is adopted.”\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nPub. L. 100–647, title VI, §\u202f6063 ,  Nov. 10, 1988 ,  102 Stat. 3700 , provided that:  “For purposes of section 125 of the 1986 Code, a plan shall not be treated as failing to be a cafeteria plan solely because under the plan a participant elected before  January 1, 1989 , to receive reimbursement under the plan for dependent care assistance for periods after  December 31, 1988 , and such assistance is includible in gross income under the provisions of the Family Support Act of 1988 [ Pub. L. 100–485 , see Tables for classification].”\nFor provision that for purposes of section 125 of the Internal Revenue Code of 1986, a plan shall not be treated as failing to be a cafeteria plan solely because under the plan a participant elected before  January 1, 1988 , to receive reimbursement under the plan for dependent care assistance for periods after  December 31, 1987 , and such assistance included reimbursement for expenses at a camp where the dependent stays overnight, see  section 10101(b)(2) of Pub. L. 100–203 , as added by  Pub. L. 100–647 , set out as an Effective Date of 1987 Amendment note under  section 21 of this title .\nPub. L. 98–369, div. A, title V, §\u202f531(b)(5) ,  July 18, 1984 ,  98 Stat. 883 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1853(b)(2) , (3),  Oct. 22, 1986 ,  100 Stat. 2870 , 2871, provided that: \n “(A)   General transitional rule .— Any cafeteria plan in existence on  February 10, 1984 , which failed as of such date and continued to fail thereafter to satisfy the rules relating to section 125 under proposed Treasury regulations, and any benefit offered under such a cafeteria plan which failed as of such date and continued to fail thereafter to satisfy the rules of section 105, 106, 120, or 129 under proposed Treasury regulations, will not fail to be a cafeteria plan under section 125 or a nontaxable benefit under section 105, 106, 120, or 129 solely because of such failures. The preceding sentence shall apply only with respect to cafeteria plans and benefits provided under cafeteria plans before the earlier of— “(i)   January 1, 1985 , or \n \n “(ii)  the effective date of any modification to provide additional benefits after  February 10, 1984 . \n \n \n “(B)   Special transition rule for advance election benefit banks .— Any benefit offered under a cafeteria plan in existence on  February 10, 1984 , which failed as of such date and continued to fail thereafter to satisfy the rules of section 105, 106, 120, or 129 under proposed Treasury regulations because an employee was assured of receiving (in cash or any other benefit) amounts available but unused for covered reimbursement during the year without regard to whether he incurred covered expenses, will not fail to be a nontaxable benefit under such applicable section solely because of such failure. The preceding sentence shall apply only with respect to benefits provided under cafeteria plans before the earlier of— “(i)   July 1, 1985 , or \n \n “(ii)  the effective date of any modification to provide additional benefits after  February 10, 1984 . \n \n\n Except as provided in Treasury regulations, the special transition rule is available only for benefits with respect to which, after  December 31, 1984 , contributions are fixed before the period of coverage and taxable cash is not available until the end of such period of coverage. \n \n “(C)   Plans for which substantial implementation costs were incurred .— For purposes of this paragraph, any plan with respect to which substantial implementation costs had been incurred before  February 10, 1984 , shall be treated as in existence on  February 10, 1984 . \n \n “(D)   Collective bargaining agreements .— In the case of any cafeteria plan in existence on  February 10, 1984 , and maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers, the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof agreed to after  July 18, 1984 ) shall be substituted for ‘ January 1, 1985 ’ in subparagraph (A) and for ‘ July 1, 1985 ’ in subparagraph (B). For purposes of the preceding sentence, any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section (or any requirement in the regulations under section 125 of the Internal Revenue Code of 1954 [now 1986] proposed on  May 6, 1984 ) shall not be treated as a termination of such collective bargaining agreement. \n \n “(E)   Special rule where contributions or reimbursements suspended .— For purposes of subparagraphs (A) and (B), a plan shall not be treated as not continuing to fail to satisfy the rules referred to in such subparagraphs with respect to any benefit provided in the form of a flexible spending arrangement merely because contributions or reimbursements (or both) with respect to such plan were suspended before  January 1, 1985 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'The term “excludable portion” does not include that portion of any payment which is properly associated with an amount which is allowable as a deduction for the taxable year in which such amount is paid or incurred.\nThe taxpayer may elect not to have this section (and section 1255) apply to any excludable portion (or portion thereof).\nAny election under paragraph (1) shall be made in the manner prescribed by the Secretary by regulations and shall be made not later than the due date prescribed by law (including extensions) for filing the return of tax under this chapter for the taxable year in which the payment was received or accrued.\nNo deduction or credit shall be allowed with respect to any expenditure which is properly associated with any amount excluded from gross income under subsection (a).\nNotwithstanding any provision of section 1016 to the contrary, no adjustment to basis shall be made with respect to property acquired or improved through the use of any payment, to the extent that such adjustment would reflect any amount which is excluded from gross income under subsection (a).\nThe Water Bank Act, referred to in subsec. (a)(3), is  Pub. L. 91–559 ,  Dec. 19, 1970 ,  84 Stat. 1468 , which is classified generally to chapter 29 (§\u202f1301 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Short Title note set out under  section 1301 of Title 16  and Tables.\nThe Agricultural Credit Act of 1978, referred to in subsec. (a)(4), is  Pub. L. 95–334 ,  Aug. 4, 1978 ,  92 Stat. 420 . Title IV of the Agricultural Credit Act of 1978 is classified generally to chapter 42 (§\u202f2201 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Tables.\nThe Soil Conservation and Domestic Allotment Act, referred to in subsec. (a)(5), (6), is  act Apr. 27, 1935, ch. 85 ,  49 Stat. 163 , which is classified generally to chapter 3B (§\u202f590a et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see  section 590q of Title 16  and Tables.\nThe Bankhead-Jones Farm Tenant Act, referred to in subsec. (a)(6), is  act July 22, 1937, ch. 517 ,  50 Stat. 522 , which is classified generally to chapter 33 (§\u202f1000 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see  section 1000 of Title 7  and Tables.\nA prior section 126 was renumbered  section 140 of this title .\n2018—Subsec. (a)(7) to (9).  Pub. L. 115–141  redesignated pars. (8) and (9) as (7) and (8), respectively, and struck out former par. (7) which read as follows: “The forestry incentives program authorized by section 4 of the Cooperative Forestry Assistance Act of 1978 ( 16 U.S.C. 2103 ).”\n2014—Subsec. (a)(6) to (10).  Pub. L. 113–295  redesignated pars. (7) to (10) as (6) to (9), respectively, and struck out former par. (6) which read as follows: “The great plains conservation program authorized by section 16 of the Soil Conservation and Domestic Policy Act ( 16 U.S.C. 590p(b) ).”\n1980—Subsec. (a).  Pub. L. 96–222, §\u202f105(a)(7)(C) , (E), inserted in par. (9) “or his delegate” after “Secretary of the Treasury” and substituted in par. (10) “Any program of a State, possession of the United States, a political subdivision of any of the foregoing, or the District of Columbia” for “Any State program”.\nSubsec. (b).  Pub. L. 96–222, §\u202f105(a)(7)(A) , inserted provisions relating to payments not chargeable to capital account.\nSubsec. (c).  Pub. L. 96–222, §\u202f105(a)(7)(A) , substituted provisions allowing the taxpayer to elect not to have this section apply to any excludable portion for provisions relating to the application of subsec. (a) of this section with other sections.\nSubsecs. (d), (e).  Pub. L. 96–222, §\u202f105(a)(7)(A) , added subsecs. (d) and (e).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title V, §\u202f543(d) ,  Nov. 6, 1978 ,  92 Stat. 2890 , provided that:  “The amendments made by this section [enacting this section and  section 1255 of this title ] shall apply with respect to grants made under the programs after  September 30, 1979 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income of an employee does not include amounts paid or expenses incurred by the employer for educational assistance to the employee if the assistance is furnished pursuant to a program which is described in subsection (b).\nIf, but for this paragraph, this section would exclude from gross income more than $5,250 of educational assistance furnished to an individual during a calendar year, this section shall apply only to the first $5,250 of such assistance so furnished.\nFor purposes of this section an educational assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with educational assistance. The program must meet the requirements of paragraphs (2) through (6) of this subsection.\nThe program shall benefit employees who qualify under a classification set up by the employer and found by the Secretary not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of section 414(q)) or their dependents. For purposes of this paragraph, there shall be excluded from consideration employees not included in the program who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.\nNot more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are shareholders or owners (or their spouses or dependents), each of whom (on any day of the year) owns more than 5 percent of the stock or of the capital or profits interest in the employer.\nA program must not provide eligible employees with a choice between educational assistance and other remuneration includible in gross income. For purposes of this section, the business practices of the employer (as well as the written program) will be taken into account.\nA program referred to in paragraph (1) is not required to be funded.\nReasonable notification of the availability and terms of the program must be provided to eligible employees.\nThe term “employee” includes, for any year, an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals).\nAn individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer. A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (2).\nOwnership of stock in a corporation shall be determined in accordance with the rules provided under subsections (d) and (e) of section 1563 (without regard to section 1563(e)(3)(C)).\nThe interest of an employee in a trade or business which is not incorporated shall be determined in accordance with regulations prescribed by the Secretary, which shall be based on principles similar to the principles which apply in the case of subparagraph (A).\nThis section shall not be construed to affect the deduction or inclusion in income of amounts (not within the exclusion under this section) which are paid or incurred, or received as reimbursement, for educational expenses under section 117, 162 or 212.\nNo deduction or credit shall be allowed to the employee under any other section of this chapter for any amount excluded from income by reason of this section.\nFor reporting and recordkeeping requirements, see section 6039D.\nA prior section 127 was renumbered  section 140 of this title .\n2020—Subsec. (c)(1)(B).  Pub. L. 116–260  substituted “ January 1, 2026 ” for “ January 1, 2021 ”.\nPub. L. 116–136  added subpar. (B). Former subpar. (B) redesignated (C).\nSubsec. (c)(1)(C).  Pub. L. 116–136  redesignated subpar. (B) as (C).\n2001—Subsec. (c)(1).  Pub. L. 107–16, §\u202f411(b) , struck out before period at end “,\u2000and such term also does not include any payment for, or the provision of any benefits with respect to, any graduate level course of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree”.\nSubsecs. (d), (e).  Pub. L. 107–16, §\u202f411(a) , redesignated subsec. (e) as (d) and struck out heading and text of former subsec. (d). Text read as follows: “This section shall not apply to expenses paid with respect to courses beginning after  December 31, 2001 .”\n1999—Subsec. (d).  Pub. L. 106–170  substituted “ December 31, 2001 ” for “ May 31, 2000 ”.\n1997—Subsec. (d).  Pub. L. 105–34  amended heading and text of subsec. (d) generally. Prior to amendment, text read as follows: “This section shall not apply to taxable years beginning after  May 31, 1997 . In the case of any taxable year beginning in 1997, only expenses paid with respect to courses beginning before  July 1, 1997 , shall be taken into account in determining the amount excluded under this section.”\n1996—Subsec. (c)(1).  Pub. L. 104–188, §\u202f1202(b) , in closing provisions, inserted before period at end “,\u2000and such term also does not include any payment for, or the provision of any benefits with respect to, any graduate level course of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree”.\nSubsec. (d).  Pub. L. 104–188, §\u202f1202(a) , substituted “ May 31, 1997 . In the case of any taxable year beginning in 1997, only expenses paid with respect to courses beginning before  July 1, 1997 , shall be taken into account in determining the amount excluded under this section.” for “ December 31, 1994 .”\n1993—Subsec. (d).  Pub. L. 103–66  substituted “ December 31, 1994 ” for “ June 30, 1992 ”.\n1991—Subsec. (d).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990—Subsec. (c)(1).  Pub. L. 101–508, §\u202f11403(b) , struck out at end “The term ‘educational assistance’ also does not include any payment for, or the provision of any benefits with respect to, any graduate level course of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree.”\nSubsec. (d).  Pub. L. 101–508, §\u202f11403(a) , substituted “ December 31, 1991 ” for “ September 30, 1990 ”.\n1989—Subsec. (b)(1).  Pub. L. 101–140, §\u202f203(a)(1) , amended par. (1) to read as if amendments by  Pub. L. 99–514, §\u202f1151(c)(4)(A) , had not been enacted, see 1986 Amendment note below.\nSubsec. (b)(2).  Pub. L. 101–140, §\u202f203(a)(2) , amended par. (2) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , had not been enacted, see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(1) , amended par. (2) to read as if amendments by  Pub. L. 99–514, §\u202f1151(g)(3) , had not been enacted, see 1986 Amendment note below.\nSubsec. (b)(6).  Pub. L. 101–140, §\u202f203(a)(1) , amended par. (6) to read as if amendments by  Pub. L. 99–514, §\u202f1151(c)(4)(B) , had not been enacted, see 1986 Amendment note below.\nSubsec. (c)(8).  Pub. L. 101–239, §\u202f7814(a) , struck out par. (8) which read as follows: “ Coordination with section 117( d).—In the case of the education of an individual who is a graduate student at an educational organization described in section 170(b)(1)(A)(ii) and who is engaged in teaching or research activities for such organization, section 117(d)(2) shall be applied as if it did not contain the phrase ‘(below the graduate level)’.”\nSubsec. (d).  Pub. L. 101–239, §\u202f7101(a)(1) , substituted “ September 30, 1990 ” for “ December 31, 1988 ”.\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , substituted “there shall” for “there may” and “who are” for “who may be” in last sentence.\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f4001(b)(1) , inserted at end “The term ‘educational assistance’ also does not include any payment for, or the provision of any benefits with respect to, any graduate level course of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree.”\nSubsec. (d).  Pub. L. 100–647, §\u202f4001(a) , substituted “1988” for “1987”.\n1986—Subsec. (a)(2).  Pub. L. 99–514, §\u202f1162(a)(2) , substituted “$5,250” for “$5,000” in heading and twice in text.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1151(c)(4)(A) , added par. (1) and struck out former par (1) which read as follows: “For purposes of this section an educational assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with educational assistance. The program must meet the requirements of paragraphs (2) through (6) of this subsection.”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1151(g)(3) , substituted “For purposes of this paragraph, there may be excluded from consideration employees who may be excluded from consideration under section 89(h).” for “For purposes of this paragraph, there shall be excluded from consideration employees not included in the program who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.”\nPub. L. 99–514, §\u202f1114(b)(4) , substituted “highly compensated employees (within the meaning of section 414(q))” for “officers, owners, or highly compensated,”.\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f1151(c)(4)(B) , struck out par. (6) which read as follows: “ Notification of employees .—Reasonable notification of the availability and terms of the program must be provided to eligible employees.”\nSubsec. (d).  Pub. L. 99–514, §\u202f1162(a)(1) , substituted “ December 31, 1987 ” for “ December 31, 1985 ”.\n1984—Subsec. (a).  Pub. L. 98–611, §\u202f1(b) , amended subsec. generally, substituting “Exclusion from gross income” for “General rule” in heading, designating existing provision as par. “(1) In general” and adding par. (2).\nSubsec. (c)(7).  Pub. L. 98–611, §\u202f1(e) , substituted “allowed to the employee” for “allowed”.\nSubsec. (c)(8).  Pub. L. 98–611, §\u202f1(c) , added par. (8).\nSubsec. (d).  Pub. L. 98–611, §\u202f1(a) , substituted “ December 31, 1985 ” for “ December 31, 1983 ”.\nSubsec. (e).  Pub. L. 98–611, §\u202f1(d)(3)(B) , added subsec. (e).\nPub. L. 116–260, div. EE, title I, §\u202f120(b) ,  Dec. 27, 2020 ,  134 Stat. 3051 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made after  December 31, 2020 .”\nPub. L. 116–136, div. A, title II, §\u202f2206(c) ,  Mar. 27, 2020 ,  134 Stat. 347 , provided that:  “The amendments made by this section [amending this section and  section 221 of this title ] shall apply to payments made after the date of the enactment of this Act [ Mar. 27, 2020 ].”\nPub. L. 107–16, title IV, §\u202f411(d) ,  June 7, 2001 ,  115 Stat. 63 , provided that:  “The amendments made by this section [amending this section and former  section 51A of this title ] shall apply with respect to expenses relating to courses beginning after  December 31, 2001 .”\nPub. L. 106–170, title V, §\u202f506(b) ,  Dec. 17, 1999 ,  113 Stat. 1922 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to courses beginning after  May 31, 2000 .”\nPub. L. 105–34, title II, §\u202f221(b) ,  Aug. 5, 1997 ,  111 Stat. 818 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1202(c)(1) , (2),  Aug. 20, 1996 ,  110 Stat. 1773 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1994 . \n \n “(2)   Graduate education .— The amendment made by subsection (b) [amending this section] shall apply with respect to expenses relating to courses beginning after  June 30, 1996 .”\nPub. L. 103–66, title XIII, §\u202f13101(c)(1) ,  Aug. 10, 1993 ,  107 Stat. 420 , provided that:  “The amendments made by subsection (a) [amending this section and repealing provisions set out below] shall apply to taxable years ending after  June 30, 1992 .”\nPub. L. 102–227, title I, §\u202f103(b) ,  Dec. 11, 1991 ,  105 Stat. 1687 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1991 .”\nPub. L. 101–508, title XI, §\u202f11403(d) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and repealing provisions set out below] shall apply to taxable years beginning after  December 31, 1989 . \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 101–239, title VII, §\u202f7101(c) ,  Dec. 19, 1989 ,  103 Stat. 2305 , provided that:  “The amendments made by this section [amending this section and  section 132 of this title ] shall apply to taxable years beginning after  December 31, 1988 .”\nAmendment by  section 7814(a) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by  section 1011B(a)(31)(B) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 4001(a), (b)(1) of  Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 4001(c) of Pub. L. 100–647 , set out as a note under  section 117 of this title .\nAmendment by  section 1114(b)(4) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1987 , see  section 1114(c)(2) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by section 1151(c)(4), (g)(3) of  Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nPub. L. 99–514, title XI, §\u202f1162(c) ,  Oct. 22, 1986 ,  100 Stat. 2510 , provided that: \n “(1)   Subsection  (a).— The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1985 . \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending  section 120 of this title ] shall apply to years ending after  December 31, 1985 . \n \n “(3)   Cafeteria plan with group legal benefits .— If, within 60 days after the date of the enactment of this Act [ Oct. 22, 1986 ], an employee elects under a cafeteria plan under section 125 of the Internal Revenue Code of 1986 coverage for group legal benefits to which [former] section 120 of such Code applies, such election may, at the election of the taxpayer, apply to all legal services provided during 1986. The preceding sentence shall not apply to any plan which on  August 16, 1986 , offered such group legal benefits under such plan.”\nPub. L. 98–611, §\u202f1(g) ,  Oct. 31, 1984 ,  98 Stat. 3178 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting  section 6039D of this title  and amending this section and sections 125, 3231, and 6652 of this title] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Subsection  (d).— The amendments made by subsection (d) [enacting section 6039D and amending this section and sections 125 and 6652 of this title] shall take effect on  January 1, 1985 . \n \n “(3)   Subsection  (f).— The amendment made by subsection (f) [amending  section 3231 of this title ] shall apply to remuneration paid after  December 31, 1984 . \n \n “(4)   No penalties or interest on failure to withhold .— No penalty or interest shall be imposed on any failure to withhold under subtitle C of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to employment taxes) with respect to amounts excluded from gross income under section 127 of such Code (as amended by this section and determined without regard to subsection (a)(2) thereof) with respect to periods during 1984. \n \n “(5)   Coordination with section 117 (d).— In the case of education described in section 127(c)(8) of the Internal Revenue Code of 1986, as added by this section, section 117(d) of such Code shall be treated as in effect on and after  January 1, 1984 .”\nPub. L. 95–600, title I, §\u202f164(d) ,  Nov. 6, 1978 ,  92 Stat. 2814 , provided that:  “The amendments made by this section [enacting this section and amending sections 3121, 3306, and 3401 of this title and  section 409 of Title 42 , The Public Health and Welfare] shall apply with respect to taxable years beginning after  December 31, 1978 .”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 104–188, title I, §\u202f1202(c)(3) ,  Aug. 20, 1996 ,  110 Stat. 1773 , provided that:  “The Secretary of the Treasury shall establish expedited procedures for the refund of any overpayment of taxes imposed by the Internal Revenue Code of 1986 which is attributable to amounts excluded from gross income during 1995 or 1996 under section 127 of such Code, including procedures waiving the requirement that an employer obtain an employee’s signature where the employer demonstrates to the satisfaction of the Secretary that any refund collected by the employer on behalf of the employee will be paid to the employee.”\nPub. L. 102–227, title I, §\u202f103(a)(2) ,  Dec. 11, 1991 ,  105 Stat. 1687 , provided that, in the case of any taxable year beginning in 1992, only amounts paid before  July 1, 1992 , by employer for educational assistance for employee be taken into account in determining amount excluded under this section with respect to such employee for such taxable year, prior to repeal by  Pub. L. 103–66, title XIII, §\u202f13101(a)(2) ,  Aug. 10, 1993 ,  107 Stat. 420 .\nPub. L. 101–239, title VII, §\u202f7101(a)(2) ,  Dec. 19, 1989 ,  103 Stat. 2304 , provided that, in the case of any taxable year beginning in 1990, only amounts paid before  Oct. 1, 1990 , by employer for educational assistance for employee be taken into account in determining amount excluded under this section with respect to such employee for such taxable year, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11403(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–473 .\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, added and amended  Pub. L. 97–34, title III , §§\u202f301(a), 302(a), (d)(1),  Aug. 13, 1981 ,  95 Stat. 267 , 270, 274;  Pub. L. 97–448, title I , §§\u202f103(a)(1), (5), (b), 109,  Jan. 12, 1983 ,  96 Stat. 2374 , 2375, 2391;  Pub. L. 98–21, title I , §§\u202f121(f)(2), (g), 122(c)(3), (d),  Apr. 20, 1983 ,  97 Stat. 84 , 87;  Pub. L. 98–369, div. A, title I, §\u202f16(a) ,  July 18, 1984 ,  98 Stat. 505 , related to interest on certain savings certificates.\nA prior section 128 was renumbered  section 140 of this title .\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income of an employee does not include amounts paid or incurred by the employer for dependent care assistance provided to such employee if the assistance is furnished pursuant to a program which is described in subsection (d).\nThe amount which may be excluded under paragraph (1) for dependent care assistance with respect to dependent care services provided during a taxable year shall not exceed $5,000 ($2,500 in the case of a separate return by a married individual).\nThe amount of any excess under subparagraph (A) shall be included in gross income in the taxable year in which the dependent care services were provided (even if payment of dependent care assistance for such services occurs in a subsequent taxable year).\nFor purposes of this paragraph, marital status shall be determined under the rules of paragraphs (3) and (4) of section 21(e).\nIn the case of any taxable year beginning after  December 31, 2020 , and before  January 1, 2022 , subparagraph (A) shall be applied by substituting “$10,500 (half such dollar amount” for “$5,000 ($2,500”.\nFor purposes of paragraph (1), the provisions of section 21(d)(2) shall apply in determining the earned income of a spouse who is a student or incapable of caring for himself.\nFor purposes of this section a dependent care assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with dependent care assistance which meets the requirements of paragraphs (2) through (8) of this subsection. If any plan would qualify as a dependent care assistance program but for a failure to meet the requirements of this subsection, then, notwithstanding such failure, such plan shall be treated as a dependent care assistance program in the case of employees who are not highly compensated employees.\nThe contributions or benefits provided under the plan shall not discriminate in favor of employees who are highly compensated employees (within the meaning of section 414(q)) or their dependents.\nThe program shall benefit employees who qualify under a classification set up by the employer and found by the Secretary not to be discriminatory in favor of employees described in paragraph (2), or their dependents.\nNot more than 25 percent of the amounts paid or incurred by the employer for dependent care assistance during the year may be provided for the class of individuals who are shareholders or owners (or their spouses or dependents), each of whom (on any day of the year) owns more than 5 percent of the stock or of the capital or profits interest in the employer.\nA program referred to in paragraph (1) is not required to be funded.\nReasonable notification of the availability and terms of the program shall be provided to eligible employees.\nThe plan shall furnish to an employee, on or before January 31, a written statement showing the amounts paid or expenses incurred by the employer in providing dependent care assistance to such employee during the previous calendar year.\nA plan meets the requirements of this paragraph if the average benefits provided to employees who are not highly compensated employees under all plans of the employer is at least 55 percent of the average benefits provided to highly compensated employees under all plans of the employer.\nFor purposes of subparagraph (A), in the case of any benefits provided through a salary reduction agreement, a plan may disregard any employees whose compensation is less than $25,000. For purposes of this subparagraph, the term “compensation” has the meaning given such term by section 414(q)(4), except that, under rules prescribed by the Secretary, an employer may elect to determine compensation on any other basis which does not discriminate in favor of highly compensated employees.\nThe term “dependent care assistance” means the payment of, or provision of, those services which if paid for by the employee would be considered employment-related expenses under section 21(b)(2) (relating to expenses for household and dependent care services necessary for gainful employment).\nThe term “earned income” shall have the meaning given such term in section 32(c)(2), but such term shall not include any amounts paid or incurred by an employer for dependent care assistance to an employee.\nThe term “employee” includes, for any year, an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals).\nAn individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer. A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3).\nOwnership of stock in a corporation shall be determined in accordance with the rules provided under subsections (d) and (e) of section 1563 (without regard to section 1563(e)(3)(C)).\nThe interest of an employee in a trade or business which is not incorporated shall be determined in accordance with regulations prescribed by the Secretary, which shall be based on principles similar to the principles which apply in the case of subparagraph (A).\nA dependent care assistance program shall not be held or considered to fail to meet any requirements of subsection (d) (other than paragraphs (4) and (8) thereof) merely because of utilization rates for the different types of assistance made available under the program.\nNo deduction or credit shall be allowed to the employee under any other section of this chapter for any amount excluded from the gross income of the employee by reason of this section.\nPub. L. 101–140, §\u202f203(a)(1) , amended this section to read as if the amendments made by  section 1151(c)(5)(A) of Pub. L. 99–514  (amending subsec. (d)(1)) had not been enacted. Subsequent to amendment by  Pub. L. 99–514 , subsec. (d)(1) was amended by  Pub. L. 100–647 . See 1988 Amendment note below.\nA prior section 129 was renumbered  section 140 of this title .\n2021—Subsec. (a)(2)(D).  Pub. L. 117–2  added subpar. (D).\n2004—Subsec. (c)(2).  Pub. L. 108–311  substituted “152(f)(1)” for “151(c)(3)”.\n1996—Subsec. (d)(8)(B).  Pub. L. 104–188  substituted “section 414(q)(4)” for “section 414(q)(7)”.\n1989—Subsec. (a).  Pub. L. 101–239  struck out at end “For purposes of the preceding sentence, marital status shall be determined under the rules of paragraphs (3) and (4) of section 21(e).”\nSubsec. (d)(1).  Pub. L. 101–140, §\u202f204(a)(3)(B) , substituted “paragraphs (2) through (8)” for “paragraphs (2) through (7)”.\nPub. L. 101–140, §\u202f204(a)(1) , inserted at end “If any plan would qualify as a dependent care assistance program but for a failure to meet the requirements of this subsection, then, notwithstanding such failure, such plan shall be treated as a dependent care assistance program in the case of employees who are not highly compensated employees.”\nPub. L. 101–140, §\u202f203(a)(1) , amended par. (1) to read as if the amendments by  Pub. L. 99–514, §\u202f1151(c)(5)(A) , had not been enacted, see 1986 Amendment note below.\nSubsec. (d)(3).  Pub. L. 101–140, §\u202f204(a)(2)(B) , struck out at end “For purposes of this paragraph, there may be excluded from consideration employees who may be excluded from consideration under section 89(h).” for “For purposes of this paragraph, there shall be excluded from consideration employees not included in the program who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that dependent care benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.”\nPub. L. 101–140, §\u202f203(a)(2) , amended par. (3) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(31)(A)(i) , had not been enacted, see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(1) , amended par. (3) to read as if amendments by  Pub. L. 99–514, §\u202f1151(g)(4) , had not been enacted, see 1986 Amendment note below.\nSubsec. (d)(6).  Pub. L. 101–140, §\u202f203(a)(1) , amended par. (6) to read as if amendments by  Pub. L. 99–514, §\u202f1151(c)(5)(B) , had not been enacted, see 1986 Amendment note below.\nSubsec. (d)(7).  Pub. L. 101–140, §\u202f204(a)(3)(A) , redesignated par. (7) as (8).\nPub. L. 101–140, §\u202f203(a)(1) , amended par. (7) to read as if amendments by  Pub. L. 99–514, §\u202f1151(c)(5)(B) , had not been enacted, see 1986 Amendment note below.\nSubsec. (d)(8).  Pub. L. 101–140, §\u202f204(a)(3)(A) , redesignated par. (7) as (8).\nPub. L. 101–140, §\u202f203(a)(2) , amended par. (8) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(31)(A)(ii) , had not been enacted, see 1988 Amendment note below.\nSubsec. (d)(9).  Pub. L. 101–140, §\u202f204(a)(2)(A) , added par. (9).\nSubsec. (e)(6).  Pub. L. 101–140, §\u202f204(a)(3)(C) , substituted “(8)” for “(7)”.\n1988—Subsec. (a)(2).  Pub. L. 100–647, §\u202f1011B(c)(2)(A) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The aggregate amount excluded from the gross income of the taxpayer under this section for any taxable year shall not exceed $5,000 ($2,500 in the case of a separate return by a married individual).”\nSubsec. (d)(1)(B).  Pub. L. 100–647, §\u202f1011B(a)(30) , substituted “(7)” for “(6)”, see Codification note above.\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f1011B(a)(31)(A)(i) , struck out at end “For purposes of this paragraph, there may be excluded from consideration employees who may be excluded from consideration under section 89(h).”\nSubsec. (d)(7).  Pub. L. 100–647, §\u202f1011B(a)(14) , redesignated par. (8) as (7).\nSubsec. (d)(7)(A).  Pub. L. 100–647, §\u202f1011B(a)(15)(A) , inserted “under all plans of the employer” after second and third reference to “employees”.\nSubsec. (d)(7)(B).  Pub. L. 100–647, §\u202f3021(a)(14) , struck out “(within the meaning of section 414(q)(7))” after “whose compensation” and inserted at end “For purposes of this subparagraph, the term ‘compensation’ has the meaning given such term by section 414(q)(7), except that, under rules prescribed by the Secretary, an employer may elect to determine compensation on any other basis which does not discriminate in favor of highly compensated employees.”\nPub. L. 100–647, §\u202f1011B(a)(15)(B) , (C), substituted “a plan may disregard” for “there shall be disregarded” and “414(q)(7)” for “415(q)(7)”.\nSubsec. (d)(8).  Pub. L. 100–647, §\u202f1011B(a)(31)(A)(ii) , added par. (8). Former par. (8) redesignated (7).\nSubsec. (e)(6).  Pub. L. 100–647, §\u202f1011B(a)(18) , inserted “(other than paragraphs (4) and (7) thereof)” after “subsection (d)”.\nSubsec. (e)(8).  Pub. L. 100–647, §\u202f1011B(c)(1) , in introductory provisions, inserted “maintained by an employer” after “onsite facility” and “of dependent care assistance provided to an employee” after “the amount”, in subpar. (A), inserted “of the facility by a dependent of the employee” after “utilization”, and in subpar. (B), inserted “with respect to such dependent” after “provided”.\nSubsec. (e)(9).  Pub. L. 100–485  added par. (9).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1163(a) , substituted “Exclusion” for “In general” in heading and amended text generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or incurred by the employer for dependent care assistance provided to such employee if the assistance is furnished pursuant to a program which is described in subsection (d).”\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f104(b)(1)(A) , substituted “section 151(c)” for “section 151(e)”.\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f104(b)(1)(B) , substituted “section 151(c)(3)” for “section 151(e)(3)”.\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1151(c)(5)(A) , added par. (1) and struck out former par. (1) which read as follows: “For purposes of this section a dependent care assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with dependent care assistance which meets the requirements of paragraphs (2) through (7) of this subsection.”\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1114(b)(4) , substituted “highly compensated employees (within the meaning of section 414(q))” for “officers, owners, or highly compensated,”.\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1151(g)(4) , substituted “For purposes of this paragraph, there may be excluded from consideration employees who may be excluded from consideration under section 89(h).” for “For purposes of this paragraph, there shall be excluded from consideration employees not included in the program who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that dependent care benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.”\nSubsec. (d)(6), (7).  Pub. L. 99–514, §\u202f1151(c)(5)(B) , redesignated par. (7) as (6) and struck out former par. (6) which read as follows: “ Notification of eligible employees .—Reasonable notification of the availability and terms of the program shall be provided to eligible employees.”\nSubsec. (d)(8).  Pub. L. 99–514, §\u202f1151(f) , added par. (8).\nSubsec. (e)(8).  Pub. L. 99–514, §\u202f1163(b) , added par. (8).\n1984—Subsec. (b)(2).  Pub. L. 98–369, §\u202f474(r)(6)(A) , substituted “section 21(d)(2)” for “section 44A(e)(2)”.\nSubsec. (e)(1).  Pub. L. 98–369, §\u202f474(r)(6)(B) , substituted “section 21(b)(2)” for “section 44A(c)(2)”.\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f474(r)(6)(C) , substituted “section 32(c)(2)” for “section 43(c)(2)”.\n1983—Subsec. (d)(1).  Pub. L. 97–448, §\u202f101(e)(1)(C) , substituted “paragraphs (2) through (7)” for “paragraphs (2) through (6)”.\nSubsec. (d)(2).  Pub. L. 97–448, §\u202f101(e)(1)(A) , added par. (2). Former par. (2) redesignated (3).\nSubsec. (d)(3).  Pub. L. 97–448, §\u202f101(e)(1)(A) , (B), redesignated former par. (2) as (3) and substituted “employees described in paragraph (2), or their dependents” for “employees who are officers, owners, or highly compensated, or their dependents”. Former par. (3) redesignated (4).\nSubsec. (d)(4) to (7).  Pub. L. 97–448, §\u202f101(e)(1)(A) , redesignated former pars. (3) to (6) as (4) to (7), respectively.\nSubsec. (e)(7).  Pub. L. 97–448, §\u202f101(e)(2) , substituted “shall be allowed to the employee under any other section of this chapter for any amount excluded from the gross income of the employee” for “shall be allowed under any other section of this chapter for any amount excluded from income”.\nPub. L. 117–2, title IX, §\u202f9632(b) ,  Mar. 11, 2021 ,  135 Stat. 160 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , except that in determining whether an employee is a highly compensated employee for years beginning in 1997, such amendment to be treated as having been in effect for years beginning in 1996, see  section 1431(d)(1) of Pub. L. 104–188 , set out as a note under  section 414 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 203(a)(1), (2) of  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nPub. L. 101–140, title II, §\u202f204(a)(3)(D) ,  Nov. 8, 1989 ,  103 Stat. 833 , provided that:  “Section 129(d)(8) (as redesignated by subparagraph (A)) shall apply to plan years beginning after  December 31, 1989 .”\nPub. L. 101–140, title II, §\u202f204(d)(1) , (2),  Nov. 8, 1989 ,  103 Stat. 833 , provided that: \n “(1)  The amendments made by subsections (a)(1), (a)(2), and (b)(2) [amending this section and  section 414 of this title ] shall apply to years beginning after  December 31, 1988 . \n \n “(2)  The amendments made by subsection (a)(3) [amending this section] shall apply to plan years beginning after  December 31, 1989 .”\nAmendment by section 1011B(a)(14), (15), (18), (30), (31)(A), (c)(1) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1011B(c)(2)(C) ,  Nov. 10, 1988 ,  102 Stat. 3489 , provided that: \n “(i)  Except as provided in this subparagraph, the amendments made by this paragraph [amending this section and  section 6051 of this title ] shall apply to taxable years beginning after  December 31, 1987 . \n \n “(ii)  A taxpayer may elect to have the amendment made by subparagraph (A) [amending this section] apply to taxable years beginning in 1987. \n \n “(iii)  In the case of a taxpayer not making an election under clause (ii), any dependent care assistance provided in a taxable year beginning in 1987 with respect to which reimbursement was not received in such taxable year shall be treated as provided in the taxpayer’s first taxable year beginning after  December 31, 1987 .”\nPub. L. 100–647, title III, §\u202f3021(d) ,  Nov. 10, 1988 ,  102 Stat. 3634 , provided that: \n “(1)   Subsection  (a).— The amendments made by subsection (a) [amending this section and sections 89, 410, 4976, 6039D, and 6652 of this title] shall take effect as if included in the amendments made by section 1151 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , see Effective Date note below]; except that the amendment made by subsection (a)(8) [amending  section 89 of this title ] shall apply to testing years beginning after  December 31, 1989 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending sections 89 and 414 of this title] shall apply to years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 100–485  applicable to taxable years beginning after  Dec. 31, 1988 , see  section 703(d) of Pub. L. 100–485 , set out as a note under  section 21 of this title .\nAmendment by  section 104(b)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1114(b)(4) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1987 , see  section 1114(c)(2) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by section 1151(c)(5), (f), (g)(4) of  Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nPub. L. 99–514, title XI, §\u202f1163(c) ,  Oct. 22, 1986 ,  100 Stat. 2511 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1981 , see  section 124(f) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 21 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 117–2, title IX, §\u202f9632(c) ,  Mar. 11, 2021 ,  135 Stat. 160 , provided that:  \n “A plan that otherwise satisfies all applicable requirements of sections 125 and 129 of the Internal Revenue Code of 1986 (including any rules or regulations thereunder) shall not fail to be treated as a cafeteria plan or dependent care assistance program merely because such plan is amended pursuant to a provision under this section and such amendment is retroactive, if— \n “(1)  such amendment is adopted no later than the last day of the plan year in which the amendment is effective, and \n \n “(2)  the plan is operated consistent with the terms of such amendment during the period beginning on the effective date of the amendment and ending on the date the amendment is adopted.”\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Any amount received for agreeing to a qualified assignment shall not be included in gross income to the extent that such amount does not exceed the aggregate cost of any qualified funding assets.\nA prior section 130 was renumbered  section 140 of this title .\n1997—Subsec. (c).  Pub. L. 105–34, §\u202f962(a)(1) , inserted “,\u2000or as compensation under any workmen’s compensation act,” after “(whether by suit or agreement)” in introductory provisions.\nSubsec. (c)(1).  Pub. L. 105–34, §\u202f962(a)(2) , inserted “or the workmen’s compensation claim,” after “agreement,”.\nSubsec. (c)(2)(D).  Pub. L. 105–34, §\u202f962(a)(3) , substituted “paragraph (1) or (2) of section 104(a)” for “section 104(a)(2)”.\n1988—Subsec. (c).  Pub. L. 100–647 , in par. (2), redesignated subpars. (D) and (E) as (C) and (D), respectively, struck out former subpar. (C) which provided that the assignee does not provide to the recipient of such payments rights against the assignee which are greater than those of a general creditor, and as concluding provisions, inserted at end “The determination for purposes of this chapter of when the recipient is treated as having received any payment with respect to which there has been a qualified assignment shall be made without regard to any provision of such assignment which grants the recipient rights as a creditor greater than those of a general creditor.”\n1986—Subsec. (c).  Pub. L. 99–514  inserted “(in a case involving physical injury or physical sickness)”.\nPub. L. 105–34, title IX, §\u202f962(b) ,  Aug. 5, 1997 ,  111 Stat. 892 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to claims under workmen’s compensation acts filed after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 100–647, title VI, §\u202f6079(b)(2) ,  Nov. 10, 1988 ,  102 Stat. 3710 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to assignments after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 99–514, title X, §\u202f1002(b) ,  Oct. 22, 1986 ,  100 Stat. 2388 , provided that:  “The amendment made by this section [amending this section] shall apply to assignments entered into after  December 31, 1986 , in taxable years ending after such date.”\nPub. L. 97–473, title I, §\u202f101(c) ,  Jan. 14, 1983 ,  96 Stat. 2606 , provided that:  “The amendments made by this section [enacting this section and amending  section 104 of this title ] shall apply to taxable years ending after  December 31, 1982 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include amounts received by a foster care provider during the taxable year as qualified foster care payments.\nIn the case of any foster home in which there is a qualified foster care individual who has attained age 19, foster care payments (other than difficulty of care payments) for any period to which such payments relate shall not be excludable from gross income under subsection (a) to the extent such payments are made for more than 5 such qualified foster individuals.\nA prior section 131 was renumbered  section 140 of this title .\n2002—Subsec. (b)(1).  Pub. L. 107–147, §\u202f404(a) , amended provisions preceding subpar. (B) generally. Prior to amendment, text of such provisions read as follows: “The term ‘qualified foster care payment’ means any amount—\n“(A) which is paid by a State or political subdivision thereof or by a placement agency which is described in section 501(c)(3) and exempt from tax under section 501(a), and”.\nSubsec. (b)(2)(B).  Pub. L. 107–147, §\u202f404(b) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “in the case of an individual who has not attained age 19, an organization which is licensed by a State (or political subdivision thereof) as a placement agency and which is described in section 501(c)(3) and exempt from tax under section 501(a).”\nSubsec. (b)(3), (4).  Pub. L. 107–147, §\u202f404(c) , added par. (3) and redesignated former par. (3) as (4).\n1986—Subsec. (a).  Pub. L. 99–514  amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “Gross income shall not include amounts received by a foster parent during the taxable year as qualified foster care payments.”\nSubsec. (b).  Pub. L. 99–514  amended subsec. (b) generally. Prior to amendment, par. (1) “In general” read as follows: “The term ‘qualified foster care payment’ means any amount—\n“(A) which is paid by a State or political subdivision thereof or by a child-placing agency which is described in section 501(c)(3) and exempt from tax under section 501(a), and\n“(B) which is—\n“(i) paid to reimburse the foster parent for the expenses of caring for a qualified foster child in the foster parent’s home, or\n“(ii) a difficulty of care payment.”\nand par. (2) “Qualified foster child” read as follows: “The term ‘qualified foster child’ means any individual who—\n“(A) has not attained age 19, and\n“(B) is living in a foster family home in which such individual was placed by—\n“(i) an agency of a State or political subdivision thereof, or\n“(ii) an organization which is licensed by a State (or political subdivision thereof) as a child-placing agency and which is described in section 501(c)(3) and exempt from tax under section 501(a).”\nSubsec. (c).  Pub. L. 99–514 , in amending subsec. (c) generally, in par. (1)(A), substituted references to “qualified foster individual”, “such individual”, and “foster care provider” for references to “qualified foster child”, “such child”, and “foster parent”, respectively, and in par. (2) substituted “more than (A) 10 qualified foster individuals who have not attained age 19, and (B) 5 qualified foster individuals not described in subparagraph (A)” for “more than 10 qualified foster children”.\nPub. L. 107–147, title IV, §\u202f404(d) ,  Mar. 9, 2002 ,  116 Stat. 42 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 99–514, title XVII, §\u202f1707(b) ,  Oct. 22, 1986 ,  100 Stat. 2782 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1985 .”\nPub. L. 97–473, title I, §\u202f102(c) ,  Jan. 14, 1983 ,  96 Stat. 2607 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1978 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'The term “qualified property or services” means any property (other than real property and other than personal property of a kind held for investment) or services which are offered for sale to customers in the ordinary course of the line of business of the employer in which the employee is performing services.\nFor purposes of this section, the term “working condition fringe” means any property or services provided to an employee of the employer to the extent that, if the employee paid for such property or services, such payment would be allowable as a deduction under section 162 or 167.\nThe term “de minimis fringe” means any property or service the value of which is (after taking into account the frequency with which similar fringes are provided by the employer to the employer’s employees) so small as to make accounting for it unreasonable or administratively impracticable.\nFor purposes of this subsection, the term “qualified transportation fringe” includes a cash reimbursement by an employer to an employee for a benefit described in paragraph (1). The preceding sentence shall apply to a cash reimbursement for any transit pass only if a voucher or similar item which may be exchanged only for a transit pass is not readily available for direct distribution by the employer to the employee.\nNo amount shall be included in the gross income of an employee solely because the employee may choose between any qualified transportation fringe (other than a qualified bicycle commuting reimbursement) and compensation which would otherwise be includible in gross income of such employee.\nThe term “qualified parking” means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A), in a commuter highway vehicle, or by carpool. Such term shall not include any parking on or near property used by the employee for residential purposes.\nTransportation referred to in paragraph (1)(A) shall be considered to be provided by an employer if such transportation is furnished in a commuter highway vehicle operated by or for the employer.\nFor purposes of this subsection, the term “employee” does not include an individual who is an employee within the meaning of section 401(c)(1).\nThe term “qualified bicycle commuting reimbursement” means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.\nThe term “applicable annual limitation” means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.\nIf any increase determined under subparagraph (A) is not a multiple of $5, such increase shall be rounded to the next lowest multiple of $5.\nFor purposes of this section, the terms “working condition fringe” and “de minimis fringe” shall not include any qualified transportation fringe (determined without regard to paragraph (2)).\nParagraph (1)(D) shall not apply to any taxable year beginning after  December 31, 2017 , and before  January 1, 2026 .\nThe term “qualified moving expense reimbursement” means any amount received (directly or indirectly) by an individual from an employer as a payment for (or a reimbursement of) expenses which would be deductible as moving expenses under section 217 if directly paid or incurred by the individual. Such term shall not include any payment for (or reimbursement of) an expense actually deducted by the individual in a prior taxable year.\nExcept in the case of a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station, subsection (a)(6) shall not apply to any taxable year beginning after  December 31, 2017 , and before  January 1, 2026 .\nAny use by the spouse or a dependent child of the employee shall be treated as use by the employee.\nAny use of air transportation by a parent of an employee (determined without regard to paragraph (1)(B)) shall be treated as use by the employee.\nParagraphs (1) and (2) of subsection (a) shall apply with respect to any fringe benefit described therein provided with respect to any highly compensated employee only if such fringe benefit is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees.\nFor purposes of subparagraph (A), a leased section of a department store is any part of a department store where over-the-counter sales of property are made under a lease or similar arrangement where it appears to the general public that individuals making such sales are employed by the person operating the department store.\nFor purposes of subsection (a)(3), qualified automobile demonstration use shall be treated as a working condition fringe.\nGross income shall not include the value of any on-premises athletic facility provided by an employer to his employees.\nFor purposes of this paragraph, the term “qualified affiliate” means any corporation which is predominantly engaged in airline-related services.\nFor purposes of this paragraph, the term “affiliated group” has the meaning given such term by section 1504(a).\nFor purposes of this section, the term “highly compensated employee” has the meaning given such term by section 414(q).\nFor purposes of subsection (b), the transportation of cargo by air and the transportation of passengers by air shall be treated as the same service.\nAmounts paid or expenses incurred by the employer for education or training provided to the employee which are not excludable from gross income under section 127 shall be excluded from gross income under this section if (and only if) such amounts or expenses are a working condition fringe.\nFor purposes of this section (other than subsection (c)(2)), the term “customers” shall only include customers who are not employees.\nThis section (other than subsections (e) and (g)) shall not apply to any fringe benefits of a type the tax treatment of which is expressly provided for in any other section of this chapter.\nFor purposes of this section, the term “qualified retirement planning services” means any retirement planning advice or information provided to an employee and his spouse by an employer maintaining a qualified employer plan.\nSubsection (a)(7) shall apply in the case of highly compensated employees only if such services are available on substantially the same terms to each member of the group of employees normally provided education and information regarding the employer’s qualified employer plan.\nFor purposes of this subsection, the term “qualified employer plan” means a plan, contract, pension, or account described in section 219(g)(5).\nThe term “qualified military base realignment and closure fringe” means 1 or more payments under the authority of section 1013 of the Demonstration Cities and Metropolitan Development Act of 1966 ( 42 U.S.C. 3374 ) (as in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009).\nWith respect to any property, such term shall not include any payment referred to in paragraph (1) to the extent that the sum of all of such payments related to such property exceeds the maximum amount described in subsection (c) of such section (as in effect on such date).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of the American Recovery and Reinvestment Tax Act of 2009, referred to in subsec. (n)(1), is the date of enactment of  Pub. L. 111–5 , which was approved  Feb. 17, 2009 .\nA prior section 132 was renumbered  section 140 of this title .\n2018—Subsec. (c)(4).  Pub. L. 115–141, §\u202f401(a)(38) , substituted “performing” for “peforming”.\nSubsec. (f)(6)(A).  Pub. L. 115–141, §\u202f101(b) , struck out concluding provisions which read as follows: “In the case of any taxable year beginning in a calendar year after 2002, clause (ii) shall be applied by substituting ‘calendar year 2001’ for ‘calendar year 1998’ for purposes of adjusting the dollar amount contained in paragraph (2)(A).”\n2017—Subsec. (f)(6)(A)(ii).  Pub. L. 115–97, §\u202f11002(d)(5) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii) thereof” for “for ‘calendar year 1992’\u202f”.\nSubsec. (f)(8).  Pub. L. 115–97, §\u202f11047(a) , added par. (8).\nSubsec. (g).  Pub. L. 115–97, §\u202f11048(a) , substituted “For purposes of this section—” for “For purposes of this section,”, designated remainder of existing provisions as par. (1) and inserted heading, substituted “The term” for “the term”, and added par. (2).\n2015—Subsec. (f)(2).  Pub. L. 114–113, §\u202f105(a)(2) , struck out concluding provisions which read as follows: “In the case of any month beginning on or after the date of the enactment of this sentence and before  January 1, 2015 , subparagraph (A) shall be applied as if the dollar amount therein were the same as the dollar amount in effect for such month under subparagraph (B).”\nSubsec. (f)(2)(A).  Pub. L. 114–113, §\u202f105(a)(1) , substituted “$175” for “$100”.\n2014—Subsec. (f)(2).  Pub. L. 113–295  substituted “ January 1, 2015 ” for “ January 1, 2014 ” in concluding provisions.\n2013—Subsec. (f)(2).  Pub. L. 112–240  substituted “ January 1, 2014 ” for “ January 1, 2012 ” in concluding provisions.\n2010—Subsec. (f)(2).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2011 ” in concluding provisions.\n2009—Subsec. (f)(2).  Pub. L. 111–5  inserted concluding provisions.\nSubsec. (n)(1).  Pub. L. 111–92, §\u202f14(a)(1) , substituted “the American Recovery and Reinvestment Tax Act of 2009)” for “this subsection) to offset the adverse effects on housing values as a result of a military base realignment or closure”.\nSubsec. (n)(2).  Pub. L. 111–92, §\u202f14(a)(2) , struck out “clause (1) of” before “subsection (c)”.\n2008—Subsec. (f)(1)(D).  Pub. L. 110–343, §\u202f211(a) , added subpar. (D).\nSubsec. (f)(2)(C).  Pub. L. 110–343, §\u202f211(b) , added subpar. (C).\nSubsec. (f)(4).  Pub. L. 110–343, §\u202f211(d) , inserted “(other than a qualified bicycle commuting reimbursement)” after “qualified transportation fringe”.\nSubsec. (f)(5)(F).  Pub. L. 110–343, §\u202f211(c) , added subpar. (F).\n2004—Subsec. (h)(2)(B).  Pub. L. 108–311  substituted “152(f)(1)” for “151(c)(3)” in introductory provisions.\n2003—Subsec. (a)(8).  Pub. L. 108–121, §\u202f103(a) , added par. (8).\nSubsecs. (n), ( o ).  Pub. L. 108–121, §\u202f103(b) , added subsec. (n) and redesignated former subsec. (n) as ( o ).\n2001—Subsec. (a)(7).  Pub. L. 107–16, §\u202f665(a) , added par. (7).\nSubsecs. (m), (n).  Pub. L. 107–16, §\u202f665(b) , added subsec. (m) and redesignated former subsec. (m) as (n).\n1998—Subsec. (f)(2)(A).  Pub. L. 105–178, §\u202f9010(c)(1) , substituted “$100” for “$65”.\nPub. L. 105–178, §\u202f9010(b)(2)(A) , substituted “$65” for “$60”.\nSubsec. (f)(2)(B).  Pub. L. 105–178, §\u202f9010(b)(2)(B) , substituted “$175” for “$155”.\nSubsec. (f)(4).  Pub. L. 105–178, §\u202f9010(a)(1) , amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “Subsection (a)(5) shall not apply to any qualified transportation fringe unless such benefit is provided in addition to (and not in lieu of) any compensation otherwise payable to the employee. This paragraph shall not apply to any qualified parking provided in lieu of compensation which otherwise would have been includible in gross income of the employee, and no amount shall be included in the gross income of the employee solely because the employee may choose between the qualified parking and compensation.”\nSubsec. (f)(6).  Pub. L. 105–178, §\u202f9010(b)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of any taxable year beginning in a calendar year after 1993, the dollar amounts contained in paragraph (2)(A) and (B) shall be increased by an amount equal to—\n“(A) such dollar amount, multiplied by\n“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins.\nIf any increase determined under the preceding sentence is not a multiple of $5, such increase shall be rounded to the next lowest multiple of $5.”\nSubsec. (f)(6)(A).  Pub. L. 105–178, §\u202f9010(c)(2) , inserted concluding provisions.\n1997—Subsec. (e)(2).  Pub. L. 105–34, §\u202f970(a) , inserted at end of concluding provisions “For purposes of subparagraph (B), an employee entitled under section 119 to exclude the value of a meal provided at such facility shall be treated as having paid an amount for such meal equal to the direct operating costs of the facility attributable to such meal.”\nSubsec. (f)(4).  Pub. L. 105–34, §\u202f1072(a) , inserted at end “This paragraph shall not apply to any qualified parking provided in lieu of compensation which otherwise would have been includible in gross income of the employee, and no amount shall be included in the gross income of the employee solely because the employee may choose between the qualified parking and compensation.”\n1993—Subsec. (a)(6).  Pub. L. 103–66, §\u202f13213(d)(1) , added par. (6).\nSubsec. (f)(6)(B).  Pub. L. 103–66, §\u202f13201(b)(3)(F) , struck out before period at end “,\u2000determined by substituting ‘calendar year 1992’ for ‘calendar year 1989’ in subparagraph (B) thereof”.\nSubsecs. (g), (h).  Pub. L. 103–66, §\u202f13213(d)(2) , added subsec. (g) and redesignated former subsec. (g) as (h). Former subsec. (h) redesignated (i).\nSubsec. (i).  Pub. L. 103–66, §\u202f13213(d)(2) , redesignated subsec. (h) as (i). Former subsec. (i) redesignated (j).\nSubsec. (i)(8).  Pub. L. 103–66, §\u202f13101(b) , amended heading and text of par. (8) generally. Prior to amendment, text read as follows: “Amounts which would be excludible from gross income under section 127 but for subsection (a)(2) thereof or the last sentence of subsection (c)(1) thereof shall be excluded from gross income under this section if (and only if) such amounts are a working condition fringe.”\nSubsec. (j).  Pub. L. 103–66, §\u202f13213(d)(2) , redesignated subsec. (i) as (j). Former subsec. (j) redesignated (k).\nSubsec. (j)(4)(B)(iii).  Pub. L. 103–66, §\u202f13213(d)(3)(B) , substituted “subsection (h)” for “subsection (f)”.\nSubsec. (k).  Pub. L. 103–66, §\u202f13213(d)(2) , redesignated subsec. (j) as (k). Former subsec. (k) redesignated ( l ).\nSubsec. ( l ).  Pub. L. 103–66, §\u202f13213(d)(2) , (3)(C), redesignated subsec. (k) as ( l ) and substituted “subsections (e) and (g)” for “subsection (e)”. Former subsec. ( l ) redesignated (m).\nSubsec. (m).  Pub. L. 103–66, §\u202f13213(d)(2) , redesignated subsec. ( l ) as (m).\n1992—Subsec. (a)(5).  Pub. L. 102–486, §\u202f1911(a) , added par. (5).\nSubsecs. (f) to (h).  Pub. L. 102–486, §\u202f1911(b) , added subsec. (f) and redesignated former subsecs. (f) and (g) as (g) and (h), respectively. Former subsec. (h) redesignated (i).\nSubsec. (i).  Pub. L. 102–486, §\u202f1911(b) , (c), redesignated subsec. (h) as (i), redesignated pars. (5) to (9) as (4) to (8), respectively, and struck out former par. (4), “Parking”, which read as follows: “The term ‘working condition fringe’ includes parking provided to an employee on or near the business premises of the employer.” Former subsec. (i) redesignated (j).\nSubsecs. (j) to ( l ).  Pub. L. 102–486, §\u202f1911(b) , redesignated subsecs. (i) to (k) as (j) to ( l ), respectively.\n1989—Subsec. (f)(2)(B).  Pub. L. 101–239, §\u202f7841(d)(19) , substituted “section 151(c)(3)” for “section 151(e)(3)” in introductory provisions.\nSubsec. (h)(1).  Pub. L. 101–239, §\u202f7841(d)(7) , substituted “to highly compensated employees” for “to officers, etc.,” in heading.\nPub. L. 101–140, §\u202f203(a)(2) , amended par. (1) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , had not been enacted, see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(1) , amended par. (1) to read as if amendments by  Pub. L. 99–514, §\u202f1151(g)(5) , had not been enacted, see 1986 Amendment note below.\nSubsec. (h)(9).  Pub. L. 101–239, §\u202f7101(b) , added par. (9).\n1988—Subsec. (h)(1).  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , substituted “there shall” for “there may be” and “who are” for “who may be” in last sentence.\nSubsec. (h)(8).  Pub. L. 100–647, §\u202f6066(a) , added par. (8).\n1986—Subsec. (c)(3)(A).  Pub. L. 99–514, §\u202f1853(a)(2) , substituted “are provided by the employer to an employee for use by such employee” for “are provided to the employee by the employer”.\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f1114(b)(5)(A) , struck out “officer, owner, or” before “highly compensated employee” and “officers, owners, or” before “highly compensated employees” in last sentence.\nSubsec. (f)(2)(B)(ii).  Pub. L. 99–514, §\u202f1853(a)(1) , substituted “are deceased and who has not attained age 25” for “are deceased”.\nSubsec. (f)(3).  Pub. L. 99–272, §\u202f13207(a)(1) , added par. (3).\nSubsec. (g).  Pub. L. 99–514, §\u202f1151(e)(2)(A) , in amending subsec. (g) generally, designated par. (2) as the entire subsection, struck out former subsec. heading, “Special rules relating to employer”, struck out “For purposes of this section—”, and struck out par. (1) which read as follows: “All employees treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this section.”\nSubsec. (h)(1).  Pub. L. 99–514, §\u202f1151(g)(5) , inserted “For purposes of this paragraph and subsection (e), there may be excluded from consideration employees who may be excluded from consideration under section 89(h).”\nPub. L. 99–514, §\u202f1114(b)(5)(A) , struck out “officer, owner, or” before “highly compensated employee” and “officers, owners, or” before “highly compensated employees”.\nSubsec. (h)(3)(B)(i).  Pub. L. 99–514, §\u202f1899A(5) , substituted “such use is” for “such use in”.\nSubsec. (h)(6).  Pub. L. 99–272, §\u202f13207(b)(1) , added par. (6).\nSubsec. (h)(7).  Pub. L. 99–514, §\u202f1114(b)(5)(B) , added par. (7).\nSubsec. (i).  Pub. L. 99–514, §\u202f1853(a)(3) , substituted “subsection (c)(2)” for “subsection (c)(2)(B)”.\nAmendment by  section 101(b) of Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  section 11002(d)(5) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f11047(b) ,  Dec. 22, 2017 ,  131 Stat. 2088 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f11048(b) ,  Dec. 22, 2017 ,  131 Stat. 2088 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f105(b) ,  Dec. 18, 2015 ,  129 Stat. 3046 , provided that:  “The amendments made by this section [amending this section] shall apply to months after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f103(b) ,  Dec. 19, 2014 ,  128 Stat. 4013 , provided that:  “The amendment made by this section [amending this section] shall apply to months after  December 31, 2013 .”\nPub. L. 112–240, title II, §\u202f203(b) ,  Jan. 2, 2013 ,  126 Stat. 2323 , provided that:  “The amendment made by this section [amending this section] shall apply to months after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f727(b) ,  Dec. 17, 2010 ,  124 Stat. 3317 , provided that:  “The amendment made by this section [amending this section] shall apply to months after  December 31, 2010 .”\nPub. L. 111–92, §\u202f14(b) ,  Nov. 6, 2009 ,  123 Stat. 2996 , provided that:  “The amendments made by this act [probably should be “this section”, amending this section] shall apply to payments made after  February 17, 2009 .”\nPub. L. 111–5, div. B, title I, §\u202f1151(b) ,  Feb. 17, 2009 ,  123 Stat. 333 , provided that:  “The amendment made by this section [amending this section] shall apply to months beginning on or after the date of the enactment of this section [ Feb. 17, 2009 ].”\nPub. L. 110–343, div. B, title II, §\u202f211(e) ,  Oct. 3, 2008 ,  122 Stat. 3841 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 108–121, title I, §\u202f103(c) ,  Nov. 11, 2003 ,  117 Stat. 1338 , provided that:  “The amendments made by this section [amending this section] shall apply to payments made after the date of the enactment of this Act [ Nov. 11, 2003 ].”\nPub. L. 107–16, title VI, §\u202f665(c) ,  June 7, 2001 ,  115 Stat. 143 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 2001 .”\nPub. L. 105–178, title IX, §\u202f9010(a)(2) ,  June 9, 1998 ,  112 Stat. 507 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–178, title IX, §\u202f9010(b)(3) ,  June 9, 1998 ,  112 Stat. 508 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1998 .”\nPub. L. 105–178, title IX, §\u202f9010(c)(3) ,  June 9, 1998 ,  112 Stat. 508 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 105–34, title IX, §\u202f970(b) ,  Aug. 5, 1997 ,  111 Stat. 897 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title X, §\u202f1072(b) ,  Aug. 5, 1997 ,  111 Stat. 948 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 103–66, title XIII, §\u202f13101(c)(2) ,  Aug. 10, 1993 ,  107 Stat. 420 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”\nAmendment by  section 13201(b)(3)(F) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nAmendment by section 13213(d)(1), (2), (3)(B) and (C) of  Pub. L. 103–66  applicable to reimbursements or other payments in respect of expenses incurred after  Dec. 31, 1993 , see  section 13213(e) of Pub. L. 103–66 , set out as a note under  section 62 of this title .\nPub. L. 102–486, title XIX, §\u202f1911(d) ,  Oct. 24, 1992 ,  106 Stat. 3014 , provided that:  “The amendments made by this section [amending this section] shall apply to benefits provided after  December 31, 1992 .”\nAmendment by  section 7101(b) of Pub. L. 101–239  applicable to taxable years beginning after  Dec. 31, 1988 , see  section 7101(c) of Pub. L. 101–239 , set out as a note under  section 127 of this title .\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by  section 1011B(a)(31)(B) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6066(b) ,  Nov. 10, 1988 ,  102 Stat. 3703 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transportation furnished after  December 31, 1987 , in taxable years ending after such date.”\nAmendment by  section 1114(b)(5) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1987 , see  section 1114(c)(2) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by section 1151(e)(2)(A), (g)(5) of  Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nAmendment by  section 1853(a) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–272, title XIII, §\u202f13207(a)(2) ,  Apr. 7, 1986 ,  100 Stat. 319 , provided that:  “The amendment made by this subsection [amending this section] shall take effect on  January 1, 1985 .”\nPub. L. 99–272, title XIII, §\u202f13207(b)(2) ,  Apr. 7, 1986 ,  100 Stat. 320 , provided that:  “The amendment made by this subsection [amending this section] shall take effect on  January 1, 1985 .”\nPub. L. 98–369, div. A, title V, §\u202f531(i) , formerly §\u202f531(h),  July 18, 1984 ,  98 Stat. 886 , as redesignated by  Pub. L. 99–272, title XIII, §\u202f13207(d) ,  Apr. 7, 1986 ,  100 Stat. 320 , provided that:  “The amendments made by this section [enacting this section and  section 4977 of this title , amending sections 61, 125, 3121, 3231, 3306, 3401, 3501, and 6652 of this title and  section 409 of Title 42 , The Public Health and Welfare, redesignating former  section 132 of this title  as 133, and enacting provisions set out as notes under this section and  section 125 of this title ] shall take effect on  January 1, 1985 .”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XV, §\u202f1567 ,  Oct. 22, 1986 ,  100 Stat. 2763 , provided that: \n “(a)   In General .— For purposes of sections 132 and 274 of the Internal Revenue Code of 1954 [now 1986], use of an automobile by a special agent of the Internal Revenue Service shall be treated in the same manner as use of an automobile by an officer of any other law enforcement agency. \n \n “(b)   Effective Date .— The provisions of this section shall take effect on  January 1, 1985 .”\nPub. L. 99–514, title XVIII, §\u202f1853(e) ,  Oct. 22, 1986 ,  100 Stat. 2872 , provided that:  “For purposes of section 132(h)(2)(B) [now 132(j)(2)(B)] of the Internal Revenue Code of 1954 [now 1986], a leased section of a department store which, in connection with the offering of beautician services, customarily makes sales of beauty aids in the ordinary course of business shall be treated as engaged in over-the-counter sales of property.”\nPub. L. 99–272, title XIII, §\u202f13207(c) ,  Apr. 7, 1986 ,  100 Stat. 320 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If, as of  September 12, 1984 — “(1)  an individual— “(A)  was an employee (within the meaning of section 132 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], including subsection (f) [now (h)] thereof) of one member of an affiliated group (as defined in section 1504 of such Code), hereinafter referred to as the ‘first corporation’, and \n \n “(B)  was eligible for no-additional-cost service in the form of air transportation provided by another member of such affiliated group, hereinafter referred to as the ‘second corporation’, \n \n \n “(2)  at least 50 percent of the individuals performing service for the first corporation were or had been employees of, or had previously performed services for, the second corporation, and \n \n “(3)  the primary business of the affiliated group was air transportation of passengers, \n \n\n then, for purposes of applying paragraphs (1) and (2) of section 132(a) of the Internal Revenue Code of 1986, with respect to no-additional-cost services and qualified employee discounts provided after  December 31, 1984 , for such individual by the second corporation, the first corporation shall be treated as engaged in the same air transportation line of business as the second corporation. For purposes of the preceding sentence, an employee of the second corporation who is performing services for the first corporation shall also be treated as an employee of the first corporation.”\nPub. L. 98–369, div. A, title V, §\u202f531(g) , as added by  Pub. L. 99–272, title XIII, §\u202f13207(d) ,  Apr. 7, 1986 ,  100 Stat. 320 ; amended  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— If— “(A)  an individual performs services for a qualified air transportation organization, and \n \n “(B)  such services are performed primarily for persons engaged in providing air transportation and are of the kind which (if performed on  September 12, 1984 ) would qualify such individual for no-additional-cost services in the form of air transportation, \n \n\n then, with respect to such individual, such qualified air transportation organization shall be treated as engaged in the line of business of providing air transportation. \n \n “(2)   Qualified air transportation organization .— For purposes of paragraph (1), the term ‘qualified air transportation organization’ means any organization— “(A)  if such organization (or a predecessor) was in existence on  September 12, 1984 , \n \n “(B)  if— “(i)  such organization is described in section 501(c)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] and the membership of such organization is limited to entities engaged in the transportation by air of individuals or property for compensation or hire, or \n \n “(ii)  such organization is a corporation all the stock of which is owned entirely by entities referred to in clause (i), and \n \n \n “(C)  if such organization is operated in furtherance of the activities of its members or owners.”\nPub. L. 98–369, div. A, title V, §\u202f531(f) ,  July 18, 1984 ,  98 Stat. 886 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If— “(1)  as of  October 5, 1983 , the employees of one member of an affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] without regard to subsections (b)(2) and (b)(4) thereof) were entitled to employee discounts at the retail department stores operated by another member of such affiliated group, and \n \n “(2)  the primary business of the affiliated group is the operation of retail department stores, \n \n\n then, for purpose of applying section 132(a)(2) of the Internal Revenue Code of 1986, with respect to discounts provided for such employees at the retail department stores operated by such other member, the employer shall be treated as engaged in the same line of business as such other member.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title V, §\u202f543(a) ,  July 18, 1984 ,  98 Stat. 891 ; amended  Pub. L. 99–514, title XI, §\u202f1173(b)(1)(A) , (2), title XVIII, §\u202f1854(c)(2)(A), (C), (D),  Oct. 22, 1986 ,  100 Stat. 2515 , 2879;  Pub. L. 100–647, title I, §\u202f1011B(h)(1) , (2),  Nov. 10, 1988 ,  102 Stat. 3490 ;  Pub. L. 101–239, title VII, §\u202f7301(a) –(c),  Dec. 19, 1989 ,  103 Stat. 2346 , 2347, prior to repeal, read as follows:\n§\u202f133. Interest on certain loans used to acquire employer securities\n(a)  In general\nGross income does not include 50 percent of the interest received by—\n(1) a bank (within the meaning of section 581),\n(2) an insurance company to which subchapter L applies,\n(3) a corporation actively engaged in the business of lending money, or\n(4) a regulated investment company (as defined in section 851),\nwith respect to a securities acquisition loan.\n(b)  Securities acquisition loan\n(1)  In general\nFor purposes of this section, the term “securities acquisition loan” means—\n(A) any loan to a corporation or to an employee stock ownership plan to the extent that the proceeds are used to acquire employer securities for the plan, or\n(B) any loan to a corporation to the extent that, within 30 days, employer securities are transferred to the plan in an amount equal to the proceeds of such loan and such securities are allocable to accounts of plan participants within 1 year of the date of such loan.\nFor purposes of this paragraph, the term “employer securities” has the meaning given such term by section 409( l ). The term “securities acquisition loan” shall not include a loan with a term greater than 15 years.\n(2)  Loans between related persons\nThe term “securities acquisition loan” shall not include—\n(A) any loan made between corporations which are members of the same controlled group of corporations, or\n(B) any loan made between an employee stock ownership plan and any person that is—\n(i) the employer of any employees who are covered by the plan; or\n(ii) a member of a controlled group of corporations which includes such employer.\nFor purposes of this paragraph, subparagraphs (A) and (B) shall not apply to any loan which, but for such subparagraphs, would be a securities acquisition loan if such loan was not originated by the employer of any employees who are covered by the plan or by any member of the controlled group of corporations which includes such employer, except that this section shall not apply to any interest received on such loan during such time as such loan is held by such employer (or any member of such controlled group).\n(3)  Terms applicable to certain securities acquisition loans\nA loan to a corporation shall not fail to be treated as a securities acquisition loan merely because the proceeds of such loan are lent to an employee stock ownership plan sponsored by such corporation (or by any member of the controlled group of corporations which includes such corporation) if such loan includes—\n(A) repayment terms which are substantially similar to the terms of the loan of such corporation from a lender described in subsection (a), or\n(B) repayment terms providing for more rapid repayment of principal or interest on such loan, but only if allocations under the plan attributable to such repayment do not discriminate in favor of highly compensated employees (within the meaning of section 414(q)).\n(4)  Controlled group of corporations\nFor purposes of this paragraph, the term “controlled group of corporations” has the meaning given such term by section 409( l )(4).\n(5)  Treatment of refinancings\nThe term “securities acquisition loan” shall include any loan which—\n(A) is (or is part of a series of loans) used to refinance a loan described in subparagraph (A) or (B) of paragraph (1), and\n(B) meets the requirements of paragraphs (2) and (3).\n(6)  Plan must hold more than 50 percent of stock after acquisition or transfer\n(A)  In general\nA loan shall not be treated as a securities acquisition loan for purposes of this section unless, immediately after the acquisition or transfer referred to in subparagraph (A) or (B) of paragraph (1), respectively, the employee stock ownership plan owns more than 50 percent of—\n(i) each class of outstanding stock of the corporation issuing the employer securities, or\n(ii) the total value of all outstanding stock of the corporation.\n(B)  Failure to retain minimum stock interest\n(i)  In general\nSubsection (a) shall not apply to any interest received with respect to a securities acquisition loan which is allocable to any period during which the employee stock ownership plan does not own stock meeting the requirements of subparagraph (A).\n(ii)  Exception\nTo the extent provided by the Secretary, clause (i) shall not apply to any period if, within 90 days of the first date on which the failure occurred (or such longer period not in excess of 180 days as the Secretary may prescribe), the plan acquires stock which results in its meeting the requirements of subparagraph (A).\n(C)  Stock\nFor purposes of subparagraph (A)—\n(i)  In general\nThe term “stock” means stock other than stock described in section 1504(a)(4).\n(ii)  Treatment of certain rights\nThe Secretary may provide that warrants, options, contracts to acquire stock, convertible debt interests and other similar interests be treated as stock for 1 or more purposes under subparagraph (A).\n(D)  Aggregation rule\nFor purposes of determining whether the requirements of subparagraph (A) are met, an employee stock ownership plan shall be treated as owning stock in the corporation issuing the employer securities which is held by any other employee stock ownership plan which is maintained by—\n(i) the employer maintaining the plan, or\n(ii) any member of a controlled group of corporations (within the meaning of section 409( l )(4)) of which the employer described in clause (i) is a member.\n(7)  Voting rights of employer securities\nA loan shall not be treated as a securities acquisition loan for purposes of this section unless—\n(A) the employee stock ownership plan meets the requirements of section 409(e)(2) with respect to all employer securities acquired by, or transferred to, the plan in connection with such loan (without regard to whether or not the employer has a registration-type class of securities), and\n(B) no stock described in section 409( l )(3) is acquired by, or transferred to, the plan in connection with such loan unless—\n(i) such stock has voting rights equivalent to the stock to which it may be converted, and\n(ii) the requirements of subparagraph (A) are met with respect to such voting rights.\n(c)  Employee stock ownership plan\nFor purposes of this section, the term “employee stock ownership plan” has the meaning given to such term by section 4975(e)(7).\n(d)  Application with section 483 and original issue discount rules\nIn applying section 483 and subpart A of part V of subchapter P to any obligation to which this section applies, appropriate adjustments shall be made to the applicable Federal rate to take into account the exclusion under subsection (a).\n(e)  Period to which interest exclusion applies\n(1)  In general\nIn the case of—\n(A) an original securities acquisition loan, and\n(B) any securities acquisition loan (or series of such loans) used to refinance the original securities acquisition loan,\nsubsection (a) shall apply only to interest accruing during the excludable period with respect to the original securities acquisition loan.\n(2)  Excludable period\nFor purposes of this subsection, the term “excludable period” means, with respect to any original securities acquisition loan—\n(A)  In general\nThe 7-year period beginning on the date of such loan.\n(B)  Loans described in subsection  (b)(1)(A)\nIf the term of an original securities acquisition loan described in subsection (b)(1)(A) is greater than 7 years, the term of such loan. This subparagraph shall not apply to a loan described in subsection (b)(3)(B).\n(3)  Original securities acquisition loan\nFor the purposes of this subsection, the term “original securities acquisition loan” means a securities acquisition loan described in subparagraph (A) or (B) of subsection (b)(1).\nA prior section 133 was renumbered  section 140 of this title .\nPub. L. 104–188, title I, §\u202f1602(c) ,  Aug. 20, 1996 ,  110 Stat. 1834 , provided that: \n “(1)   In general .— The amendments made by this section [amending sections 291, 812, 852, 4978, 6047, and 7872 of this title and repealing this section and  section 4978B of this title ] shall apply to loans made after the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Refinancings .— The amendments made by this section shall not apply to loans made after the date of the enactment of this Act to refinance securities acquisition loans (determined without regard to section 133(b)(1)(B) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of this Act) [set out above] made on or before such date or to refinance loans described in this paragraph if— “(A)  the refinancing loans meet the requirements of section 133 of such Code (as so in effect), \n \n “(B)  immediately after the refinancing the principal amount of the loan resulting from the refinancing does not exceed the principal amount of the refinanced loan (immediately before the refinancing), and \n \n “(C)  the term of such refinancing loan does not extend beyond the last day of the term of the original securities acquisition loan. \n \n\n For purposes of this paragraph, the term ‘securities acquisition loan’ includes a loan from a corporation to an employee stock ownership plan described in section 133(b)(3) of such Code (as so in effect). \n \n “(3)   Exception .— Any loan made pursuant to a binding written contract in effect before  June 10, 1996 , and at all times thereafter before such loan is made, shall be treated for purposes of paragraphs (1) and (2) as a loan made on or before the date of the enactment of this Act.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include any qualified military benefit.\nExcept as provided in subparagraphs (B) and (C) and paragraphs (4) and (5), no modification or adjustment of any qualified military benefit after  September 9, 1986 , shall be taken into account.\nSubparagraph (A) shall not apply to any adjustment to the amount of death gratuity payable under chapter 75 of title 10, United States Code, which is pursuant to a provision of law enacted after  September 9, 1986 .\nFor purposes of paragraph (1), such term includes any dependent care assistance program (as in effect on the date of the enactment of this paragraph) for any individual described in paragraph (1)(A).\nThe term “qualified military benefit” includes a travel benefit provided under  section 2613 of title 10 , United States Code (as in effect on the date of the enactment of this paragraph).\nThe term “qualified military benefit” includes any bonus payment by a State or political subdivision thereof to any member or former member of the uniformed services of the United States or any dependent of such member only by reason of such member’s service in a combat zone (as defined in section 112(c)(2), determined without regard to the parenthetical).\nThe date of the enactment of this paragraph, referred to in subsec. (b)(4), is the date of enactment of  Pub. L. 108–121 , which was approved  Nov. 11, 2003 .\nThe date of the enactment of this paragraph, referred to in subsec. (b)(5), is the date of enactment of  Pub. L. 108–375 , which was approved  Oct. 28, 2004 .\nA prior section 134 was renumbered  section 140 of this title .\n2018—Subsec. (b)(6).  Pub. L. 115–141  substituted “a combat” for “an combat”.\n2008—Subsec. (b)(6).  Pub. L. 110–245  added par. (6).\n2004—Subsec. (b)(3)(A).  Pub. L. 108–375, §\u202f585(b)(2)(A) , substituted “paragraphs (4) and (5)” for “paragraph (4)”.\nSubsec. (b)(5).  Pub. L. 108–375, §\u202f585(b)(1) , added par. (5).\n2003—Subsec. (b)(3)(A).  Pub. L. 108–121, §\u202f106(b)(1) , inserted “and paragraph (4)” after “subparagraphs (B) and (C)”.\nPub. L. 108–121, §\u202f102(b)(2) , substituted “subparagraphs (B) and (C)” for “subparagraph (B)”.\nSubsec. (b)(3)(C).  Pub. L. 108–121, §\u202f102(b)(1) , added subpar. (C).\nSubsec. (b)(4).  Pub. L. 108–121, §\u202f106(a) , added par. (4).\n1988—Subsec. (b)(1).  Pub. L. 100–647, §\u202f1011B(f)(2)(A) , inserted “(other than personal use of a vehicle)” after “in-kind benefit” in introductory text.\nSubsec. (b)(1)(B).  Pub. L. 100–647, §\u202f1011B(f)(1) , substituted “,\u2000regulation, or administrative practice” for “or regulation thereunder”.\nSubsec. (b)(3)(A).  Pub. L. 100–647, §\u202f1011B(f)(3) , struck out “under any provision of law or regulation described in paragraph (1)” after “ September 9, 1986 ,”.\nPub. L. 110–245, title I, §\u202f112(b) ,  June 17, 2008 ,  122 Stat. 1635 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made before, on, or after the date of the enactment of this Act [ June 17, 2008 ].”\nPub. L. 108–375, div. A, title V, §\u202f585(b)(3) ,  Oct. 28, 2004 ,  118 Stat. 1932 , provided that:  “The amendments made by this subsection [amending this section and sections 3121, 3306, and 3401 of this title] shall apply to travel benefits provided after the date of the enactment of this Act [ Oct. 28, 2004 ].”\nPub. L. 108–121, title I, §\u202f102(b)(3) ,  Nov. 11, 2003 ,  117 Stat. 1337 , provided that:  “The amendments made by this subsection [amending this section] shall apply with respect to deaths occurring after  September 10, 2001 .”\nPub. L. 108–121, title I, §\u202f106(c) ,  Nov. 11, 2003 ,  117 Stat. 1339 , provided that:  “The amendments made by this section [amending this section and sections 3121, 3306, and 3401 of this title] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 100–647, title I, §\u202f1011B(f)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3490 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by section 1011B(f)(1), (3) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XI, §\u202f1168(c) ,  Oct. 22, 1986 ,  100 Stat. 2513 , as amended by  Pub. L. 100–647, title I, §\u202f1011B(f)(4) ,  Nov. 10, 1988 ,  102 Stat. 3490 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 108–121, title I, §\u202f106(d) ,  Nov. 11, 2003 ,  117 Stat. 1339 , provided that:  “No inference may be drawn from the amendments made by this section [amending this section and sections 3121, 3306, and 3401 of this title] with respect to the tax treatment of any amounts under the program described in section 134(b)(4) of the Internal Revenue Code of 1986 (as added by this section) for any taxable year beginning before  January 1, 2003 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of an individual who pays qualified higher education expenses during the taxable year, no amount shall be includible in gross income by reason of the redemption during such year of any qualified United States savings bond.\nFor purposes of subparagraph (A), the term “applicable fraction” means the fraction the numerator of which is the amount described in subparagraph (A)(ii) and the denominator of which is the amount described in subparagraph (A)(i).\nIf the modified adjusted gross income of the taxpayer for the taxable year exceeds $40,000 ($60,000 in the case of a joint return), the amount which would (but for this paragraph) be excludable from gross income under subsection (a) shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so excludable as such excess bears to $15,000 ($30,000 in the case of a joint return).\nIf any amount as adjusted under subparagraph (B) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50 (or if such amount is a multiple of $25, such amount shall be rounded to the next highest multiple of $50).\nSuch term shall not include expenses with respect to any course or other education involving sports, games, or hobbies other than as part of a degree program.\nSuch term shall include any contribution to a qualified tuition program (as defined in section 529) on behalf of a designated beneficiary (as defined in such section), or to a Coverdell education savings account (as defined in section 530) on behalf of an account beneficiary, who is an individual described in subparagraph (A); but there shall be no increase in the investment in the contract for purposes of applying section 72 by reason of any portion of such contribution which is not includible in gross income by reason of this subparagraph.\nThe term “eligible educational institution” has the meaning given such term by section 529(e)(5).\nIf the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and his spouse file a joint return for the taxable year.\nThe Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring record keeping and information reporting.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nA prior section 135 was renumbered  section 140 of this title .\n2021—Subsec. (c)(4)(A).  Pub. L. 117–2  inserted “85(c),” before “137”.\n2020—Subsec. (c)(4)(A).  Pub. L. 116–260  struck out “222,” after “221,”.\n2017—Subsec. (b)(2)(B)(ii).  Pub. L. 115–97, §\u202f11002(d)(1)(M) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (c)(4)(A).  Pub. L. 115–97, §\u202f13305(b)(1) , struck out “199,” before “221”.\n2004—Subsec. (c)(4)(A).  Pub. L. 108–357  inserted “199,” before “221”.\n2001—Subsec. (c)(2)(C).  Pub. L. 107–22 , in heading substituted “Coverdell education savings” for “education individual retirement” and in text substituted “a Coverdell education savings” for “an education individual retirement”.\nPub. L. 107–16, §\u202f402(a)(4)(A) , (B), substituted “qualified tuition” for “qualified State tuition” in heading and text.\nSubsec. (c)(4)(A).  Pub. L. 107–16, §\u202f431(c)(1) , inserted “222,” after “221,”.\nSubsec. (d)(1)(D).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (d)(2)(A).  Pub. L. 107–16, §\u202f401(g)(2)(B) , substituted “allowed” for “allowable”.\nSubsec. (d)(2)(B).  Pub. L. 107–16, §\u202f402(b)(2)(A) , substituted “the exclusions under sections 529(c)(3)(B) and 530(d)(2)” for “the exclusion under section 530(d)(2)”.\n1998—Subsec. (c)(2)(C).  Pub. L. 105–206, §\u202f6004(d)(9) , inserted “and education individual retirement accounts” after “program” in heading and substituted “section 72” for “section 529(c)(3)(A)” in text.\nSubsec. (c)(3).  Pub. L. 105–206, §\u202f6004(c)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘eligible educational institution’ means—\n“(A) an institution described in section 1201(a) or subparagraph (C) or (D) of section 481(a)(1) of the Higher Education Act of 1965 (as in effect on  October 21, 1988 ), and\n“(B) an area vocational education school (as defined in subparagraph (C) or (D) of section 521(3) of the Carl D. Perkins Vocational Education Act) which is in any State (as defined in section 521(27) of such Act), as such sections are in effect on  October 21, 1988 .”\nSubsec. (c)(4)(A).  Pub. L. 105–277  inserted “221,” after “137,”.\nSubsec. (d)(2).  Pub. L. 105–206, §\u202f6004(d)(4) , substituted “other higher education benefits” for “higher education credit” in heading and amended text of par. (2) generally. Prior to amendment, text read as follows: “The amount of the qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the amount of such expenses which are taken into account in determining the credit allowable to the taxpayer or any other person under section 25A with respect to such expenses.”\n1997—Subsec. (c)(2)(C).  Pub. L. 105–34, §\u202f213(e)(2) , inserted “,\u2000or to an education individual retirement account (as defined in section 530) on behalf of an account beneficiary,” after “(as defined in such section)”.\nPub. L. 105–34, §\u202f211(c) , added subpar. (C).\nSubsec. (d)(2) to (4).  Pub. L. 105–34, §\u202f201(d) , added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.\n1996—Subsec. (b)(2)(B)(ii).  Pub. L. 104–188, §\u202f1703(d) , inserted “,\u2000determined by substituting ‘calendar year 1989’ for ‘calendar year 1992’ in subparagraph (B) thereof” before period at end.\nSubsec. (c)(4)(A).  Pub. L. 104–188, §\u202f1807(c)(2) , inserted “137,” before “911”.\nSubsec. (d)(1)(D).  Pub. L. 104–188, §\u202f1806(b)(1) , added subpar. (D).\n1990—Subsec. (b)(2)(B).  Pub. L. 101–508, §\u202f11702(h)(1) , substituted “the $40,000 and $60,000 amounts” for “each dollar amount” in introductory provisions.\nSubsec. (b)(2)(B)(ii).  Pub. L. 101–508, §\u202f11101(d)(1)(E) , struck out before period at end “,\u2000determined by substituting ‘calendar year 1989’ for ‘calendar year 1987’ in subparagraph (B) thereof”.\nSubsec. (b)(2)(C).  Pub. L. 101–508, §\u202f11702(h)(2) , struck out “(A) or” after “subparagraph”.\n1989—Subsec. (d)(1).  Pub. L. 101–239  substituted “subsection (a) with respect to” for “subsection (a) respect to”.\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nAmendment by  section 11002(d)(1)(M) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 13305(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 107–22  effective  July 26, 2001 , see  section 1(c) of Pub. L. 107–22 , set out as a note under  section 26 of this title .\nAmendment by  section 401(g)(2)(B) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 401(h) of Pub. L. 107–16 , set out as a note under  section 25A of this title .\nAmendment by section 402(a)(4)(A), (B), (b)(2)(A) of  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 402(h) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nAmendment by  section 431(c)(1) of Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d) of Pub. L. 105–34  applicable to expenses paid after  Dec. 31, 1997  (in taxable years ending after such date), for education furnished in academic periods beginning after such date, see  section 201(f) of Pub. L. 105–34 , set out as an Effective Date note under  section 25A of this title .\nAmendment by  section 211(c) of Pub. L. 105–34  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 211(f) of Pub. L. 105–34 , set out as a note under  section 529 of this title .\nAmendment by  section 213(e)(2) of Pub. L. 105–34  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 213(f) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nAmendment by  section 1703(d) of Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  section 1806(b)(1) of Pub. L. 104–188  applicable to taxable years ending after  Aug. 20, 1996 , with transition rules applicable where States or agencies or instrumentalities thereof maintain on such date programs under which persons may purchase tuition credits or certificates on behalf of, or make contributions for education expenses of, designated beneficiaries, see  section 1806(c) of Pub. L. 104–188 , set out as an Effective Date note under  section 529 of this title .\nAmendment by  section 1807(c)(2) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as an Effective Date note under  section 23 of this title .\nAmendment by  section 11101(d)(1)(E) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nAmendment by  section 11702(h) of Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1989 , see  section 6009(d) of Pub. L. 100–647 , set out as an Effective Date of 1988 Amendment note under  section 86 of this title .\nPub. L. 100–647, title VI, §\u202f6009(b) ,  Nov. 10, 1988 ,  102 Stat. 3690 , provided that:  “The Secretary of the Treasury or his delegate shall take such actions as may be necessary to make the general public aware of the program established by this section [enacting this section, amending sections 86, 219, and 469 of this title, renumbering former  section 135 of this title  as  section 136 of this title , and enacting provisions set out as notes below and under  section 86 of this title ].”\nPub. L. 100–647, title VI, §\u202f6009(e) ,  Nov. 10, 1988 ,  102 Stat. 3690 , directed Secretary of the Treasury or his delegate, after consultation with Secretary of Education or his delegate, to conduct a study of feasibility of using stamps or similar programs to encourage and facilitate savings by parents towards purchase of Series EE bonds eligible for exclusion and to submit, not later than  Dec. 31, 1989 , results of such study, together with any recommendations deemed appropriate, to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include the value of any subsidy provided (directly or indirectly) by a public utility to a customer for the purchase or installation of any energy conservation measure.\nNotwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure to the extent of the amount excluded under subsection (a) for any subsidy which was provided with respect to such expenditure. The adjusted basis of any property shall be reduced by the amount excluded under subsection (a) which was provided with respect to such property.\nFor purposes of this section, the term “energy conservation measure” means any installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand with respect to a dwelling unit.\nThe term “dwelling unit” has the meaning given such term by section 280A(f)(1).\nThe term “public utility” means a person engaged in the sale of electricity or natural gas to residential, commercial, or industrial customers for use by such customers. For purposes of the preceding sentence, the term “person” includes the Federal Government, a State or local government or any political subdivision thereof, or any instrumentality of any of the foregoing.\nThis section shall not apply to any payment to or from a qualified cogeneration facility or qualifying small power production facility pursuant to section 210 of the Public Utility Regulatory Policy Act of 1978.\nSection 210 of the Public Utility Regulatory Policy Act of 1978, referred to in subsec. (d), probably means section 210 of the Public Utility Regulatory Policies Act of 1978,  Pub. L. 95–617 , which is classified to  section 824a–3 of Title 16 , Conservation.\nA prior section 136 was renumbered  section 140 of this title .\n1996—Subsec. (a).  Pub. L. 104–188, §\u202f1617(b)(1) , reenacted heading without change and amended text generally, substituting present provisions for former provisions which consisted of general exclusion in par. (1) and limitation for exclusion on nonresidential property in par. (2).\nSubsec. (c)(1).  Pub. L. 104–188, §\u202f1617(a) , substituted “energy demand with respect to a dwelling unit.” for “energy demand—\n“(A) with respect to a dwelling unit, and\n“(B) on or after  January 1, 1995 , with respect to property other than dwelling units.\nThe purchase and installation of specially defined energy property shall be treated as an energy conservation measure described in subparagraph (B).”\nSubsec. (c)(2).  Pub. L. 104–188, §\u202f1617(b)(2) , struck out “and special rules” after “definitions” in heading, redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which related to “specially defined energy property”.\nPub. L. 104–188, title I, §\u202f1617(c) ,  Aug. 20, 1996 ,  110 Stat. 1858 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts received after  December 31, 1996 , unless received pursuant to a written binding contract in effect on  September 13, 1995 , and at all times thereafter.”\nPub. L. 102–486, title XIX, §\u202f1912(c) ,  Oct. 24, 1992 ,  106 Stat. 3016 , provided that:  “The amendments made by this section [enacting this section and renumbering former section 136 as 137] shall apply to amounts received after  December 31, 1992 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.\nIn the case of an adoption of a child with special needs which becomes final during a taxable year, the qualified adoption expenses with respect to such adoption for such year shall be increased by an amount equal to the excess (if any) of $10,000 over the actual aggregate qualified adoption expenses with respect to such adoption during such taxable year and all prior taxable years.\nThe aggregate of the amounts paid or expenses incurred which may be taken into account under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000.\nFor purposes of this section, the term “qualified adoption expenses” has the meaning given such term by section 23(d) (determined without regard to reimbursements under this section).\nRules similar to the rules of subsections (e), (f), and (g) of section 23 shall apply for purposes of this section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSection 541 of title 14 , referred to in subsec. (c), was redesignated  section 2903 of title 14  by  Pub. L. 115–282, title I, §\u202f117(b) ,  Dec. 4, 2018 ,  132 Stat. 4230 , and references to  section 541 of title 14  deemed to refer to such redesignated section, see  section 123(b)(1) of Pub. L. 115–282 , set out as a References to Sections of Title 14 as Redesignated by  Pub. L. 115–282  note preceding  section 101 of Title 14 , Coast Guard.\nA prior section 137 was renumbered  section 140 of this title .\n2021—Subsec. (b)(3)(A).  Pub. L. 117–2  inserted “85(c)” before “221”.\n2020—Subsec. (b)(3)(A).  Pub. L. 116–260  struck out “222,” after “sections 221,”.\n2018—Subsec. (c).  Pub. L. 115–141  substituted “section 541” for “section 514” in concluding provisions.\n2017—Subsec. (b)(3)(A).  Pub. L. 115–97, §\u202f13305(b)(1) , struck out “199,” before “221”.\nSubsec. (f)(2).  Pub. L. 115–97, §\u202f11002(d)(1)(N) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2010—Subsec. (a)(2).  Pub. L. 111–148, §\u202f10909(a)(2)(B) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “$13,170” for “$10,000” in heading and text. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (b)(1).  Pub. L. 111–148, §\u202f10909(a)(2)(A) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “$13,170” for “$10,000”. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (d).  Pub. L. 111–148, §\u202f10909(b)(2)(J)(i) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “section 36C(d)” for “section 23(d)”. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (e).  Pub. L. 111–148, §\u202f10909(b)(2)(J)(ii) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “section 36C” for “section 23”. See Effective and Termination Dates of 2010 Amendment note below.\nSubsec. (f).  Pub. L. 111–148, §\u202f10909(a)(2)(C) , (c), as amended by  Pub. L. 111–312 , temporarily amended subsec. (f) generally. See Effective and Termination Dates of 2010 Amendment note below. Prior to amendment subsec. (f) read as follows: “ Adjustments for inflation .—In the case of a taxable year beginning after  December 31, 2002 , each of the dollar amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b) shall be increased by an amount equal to—\n“(1) such dollar amount, multiplied by\n“(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2001’ for ‘calendar year 1992’ in subparagraph (B) thereof.\nIf any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”\n2004—Subsec. (b)(1).  Pub. L. 108–311  amended directory language of  Pub. L. 107–147, §\u202f411(c)(2)(B) . See 2002 Amendment note below.\nSubsec. (b)(3)(A).  Pub. L. 108–357  inserted “199,” before “221”.\n2002—Subsec. (a).  Pub. L. 107–147, §\u202f411(c)(2)(A) , amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or expenses incurred by the employer for adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program. The amount of the exclusion shall be—\n“(1) in the case of an adoption of a child other than a child with special needs, the amount of the qualified adoption expenses paid or incurred by the taxpayer, and\n“(2) in the case of an adoption of a child with special needs, $10,000.”\nSubsec. (b)(1).  Pub. L. 107–147, §\u202f411(c)(2)(B) , as amended by  Pub. L. 108–311 , substituted “subsection (a)” for “subsection (a)(1)”.\nSubsec. (f).  Pub. L. 107–147, §\u202f418(a)(2) , inserted at end “If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.”\n2001—Subsec. (a).  Pub. L. 107–16, §\u202f202(a)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Gross income of an employee does not include amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program.”\nSubsec. (b)(1).  Pub. L. 107–16, §\u202f202(b)(1)(B) , substituted “subsection (a)(1)” for “subsection (a)” and “$10,000” for “$5,000 ($6,000, in the case of a child with special needs)”.\nSubsec. (b)(2)(A).  Pub. L. 107–16, §\u202f202(b)(2)(B) , substituted “$150,000” for “$75,000”.\nSubsec. (b)(3)(A).  Pub. L. 107–16, §\u202f431(c)(1) , inserted “222,” after “221,”.\nSubsec. (f).  Pub. L. 107–16, §\u202f202(d)(2) , (e)(2), added subsec. (f) and struck out heading and text of former subsec. (f). Text read as follows: “This section shall not apply to amounts paid or expenses incurred after  December 31, 2001 .”\n1998—Subsec. (b)(3)(A).  Pub. L. 105–277  inserted “221,” after “and sections”.\n1997—Subsec. (b)(1).  Pub. L. 105–34  substituted “of the amounts paid or expenses incurred which may be taken into account” for “amount excludable from gross income”.\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nAmendment by  section 11002(d)(1)(N) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 13305(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 108–311  effective as if included in the provisions of the Job Creation and Worker Assistance Act of 2002,  Pub. L. 107–147 , to which such amendment relates, see  section 403(f) of Pub. L. 108–311 , set out as a note under  section 56 of this title .\nAmendment by  section 411(c)(2) of Pub. L. 107–147  applicable to taxable years beginning after  Dec. 31, 2002 , except that amendment by section 411(c)(2)(B) applicable to taxable years beginning after  Dec. 31, 2001 , see  section 411(c)(3) of Pub. L. 107–147 , set out as a note under  section 23 of this title .\nAmendment by  section 418(a)(2) of Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 418(c) of Pub. L. 107–147 , set out as a note under  section 21 of this title .\nAmendment by section 202(b)(1)(B), (2)(B), (d)(2), (e)(2) of  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 202(g)(1) of Pub. L. 107–16 , set out as a note under  section 23 of this title .\nAmendment by  section 202(a)(2) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2002 , see  section 202(g)(2) of Pub. L. 107–16 , set out as a note under  section 23 of this title .\nAmendment by  section 431(c)(1) of Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as a note under  section 23 of this title .\nFor transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of  November 25, 2002 , as modified, set out as a note under  section 542 of Title 6 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include any payment to the Medicare Advantage MSA of an individual by the Secretary of Health and Human Services under part C of title XVIII of the Social Security Act.\nSection 220(f)(2) and paragraph (2) of this subsection shall not apply to any payment or distribution from a Medicare Advantage MSA to the Secretary of Health and Human Services of an erroneous contribution to such MSA and of the net income attributable to such contribution.\nSection 220(f)(2) and paragraph (2) of this subsection shall not apply to any trustee-to-trustee transfer from a Medicare Advantage MSA of an account holder to another Medicare Advantage MSA of such account holder.\nIn applying section 220(f)(8)(A) to an account which was a Medicare Advantage MSA of a decedent, the rules of section 220(f) shall apply in lieu of the rules of subsection (c) of this section with respect to the spouse as the account holder of such Medicare Advantage MSA.\nSubsection (i) of section 220 shall not apply to an individual with respect to a Medicare Advantage MSA, and Medicare Advantage MSAs shall not be taken into account in determining whether the numerical limitations under section 220(j) are exceeded.\nThe Social Security Act, referred to in subsecs. (a) and (b)(2)(A), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Part C of title XVIII of the Act is classified generally to part C (§\u202f1395w–21 et seq.) of subchapter XVIII of chapter 7 of Title 42, The Public Health and Welfare. Section 1859 of the Act is classified to  section 1395w–28 of Title 42 . For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nA prior section 138 was renumbered  section 140 of this title .\n2004— Pub. L. 108–311, §\u202f408(a)(5)(A) –(D), substituted “Medicare Advantage” for “Medicare+Choice” wherever appearing in section catchline, headings, and text.\nSubsec. (c)(2)(C)(i).  Pub. L. 108–311, §\u202f408(a)(5)(E) , substituted “Medicare Advantage MSAs” for “Medicare+Choice MSAs”.\nSubsec. (f).  Pub. L. 108–311, §\u202f408(a)(5)(F) , substituted “Medicare Advantage MSAs” for “Medicare+Choice MSA’s”.\n2000—Subsec. (b).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA” in introductory provisions.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(3)] , substituted “Archer MSA” for “medical savings account” in introductory provisions.\nSubsec. (f).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(6)] , substituted “Archer MSAs” for “medical savings accounts” in heading.\nPub. L. 105–33, title IV, §\u202f4006(c) ,  Aug. 5, 1997 ,  111 Stat. 334 , provided that:  “The amendments made by this section [enacting this section, amending sections 220 and 4973 of this title, and renumbering former  section 138 of this title  as  section 139 of this title ] shall apply to taxable years beginning after  December 31, 1998 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include any amount received by an individual as a qualified disaster relief payment.\nFor purposes of chapter 2 and subtitle C, qualified disaster relief payments and qualified disaster mitigation payments shall not be treated as net earnings from self-employment, wages, or compensation subject to tax.\nSubsections (a), (f), and (g) shall not apply with respect to any individual identified by the Attorney General to have been a participant or conspirator in a terroristic action (as so defined), or a representative of such individual.\nGross income shall not include any amount received as payment under section 406 of the Air Transportation Safety and System Stabilization Act.\nGross income shall not include any amount received as a qualified disaster mitigation payment.\nFor purposes of this section, the term “qualified disaster mitigation payment” means any amount which is paid pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (as in effect on the date of the enactment of this subsection) or the National Flood Insurance Act (as in effect on such date) to or for the benefit of the owner of any property for hazard mitigation with respect to such property. Such term shall not include any amount received for the sale or disposition of any property.\nNotwithstanding any other provision of this subtitle, no increase in the basis or adjusted basis of any property shall result from any amount excluded under this subsection with respect to such property.\nNotwithstanding any other provision of this subtitle, no deduction or credit shall be allowed (to the person for whose benefit a qualified disaster relief payment or qualified disaster mitigation payment is made) for, or by reason of, any expenditure to the extent of the amount excluded under this section with respect to such expenditure.\nSection 406 of the Air Transportation Safety and System Stabilization Act, referred to in subsec. (f), is  section 406 of Pub. L. 107–42 , which is set out as a note under  section 40101 of Title 49 , Transportation.\nThe Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (g)(2), is  Pub. L. 93–288 ,  May 22, 1974 ,  88 Stat. 143 , which is classified principally to chapter 68 (§\u202f5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 5121 of Title 42  and Tables.\nThe date of the enactment of this subsection, referred to in subsec. (g)(2), is the date of enactment of  Pub. L. 109–7 , which was approved  Apr. 15, 2005 .\nThe National Flood Insurance Act, referred to in subsec. (g)(2), probably means the National Flood Insurance Act of 1968, title XIII of  Pub. L. 90–448 ,  Aug. 1, 1968 ,  82 Stat. 572 , as amended, which is classified principally to chapter 50 (§\u202f4001 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 4001 of Title 42  and Tables.\nA prior section 139 was renumbered  section 140 of this title .\n2018—Subsec. (c)(2).  Pub. L. 115–141, §\u202f401(b)(10)(A) , substituted “section 165(i)(5)(A)” for “section 165(h)(3)(C)(i)”.\nPub. L. 115–141, §\u202f401(a)(41) , substituted “a federally” for “federally”.\n2008—Subsec. (c)(2).  Pub. L. 110–343  amended par. (2) generally. Prior to amendment, par. (2) read as follows: “a Presidentially declared disaster (as defined in section 1033(h)(3)),”.\n2005—Subsec. (d).  Pub. L. 109–7, §\u202f1(a)(2)(A) , substituted “qualified disaster relief payments and qualified disaster mitigation payments” for “a qualified disaster relief payment”.\nSubsec. (e).  Pub. L. 109–7, §\u202f1(a)(2)(B) , substituted “,\u2000(f), and (g)” for “and (f)”.\nSubsecs. (g), (h).  Pub. L. 109–7, §\u202f1(a)(1) , added subsecs. (g) and (h).\nAmendment by  Pub. L. 110–343  applicable to disasters declared in taxable years beginning after  Dec. 31, 2007 , see  section 706(d)(1) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nPub. L. 109–7, §\u202f1(c)(1) ,  Apr. 15, 2005 ,  119 Stat. 22 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to amounts received before, on, or after the date of the enactment of this Act [ Apr. 15, 2005 ].”\nPub. L. 107–134, title I, §\u202f111(c) ,  Jan. 23, 2002 ,  115 Stat. 2433 , provided that:  “The amendments made by this section [enacting this section and renumbering former section 139 as  section 140 of this title ] shall apply to taxable years ending on or after  September 11, 2001 .”\nFor provisions that nothing in amendment by  section 401(b)(10)(A) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include any special subsidy payment received under section 1860D–22 of the Social Security Act.\nSection 1860D–22 of the Social Security Act, referred to in text, is classified to  section 1395w–132 of Title 42 , The Public Health and Welfare.\n2010— Pub. L. 111–148  struck out second sentence which read as follows: “This section shall not be taken into account for purposes of determining whether any deduction is allowable with respect to any cost taken into account in determining such payment.”\nPub. L. 111–148, title IX, §\u202f9012(b) ,  Mar. 23, 2010 ,  124 Stat. 868 , as amended by  Pub. L. 111–152, title I, §\u202f1407 ,  Mar. 30, 2010 ,  124 Stat. 1067 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2012 .”\nSection applicable to taxable years ending after  Dec. 8, 2003 , see  section 1202(d) of Pub. L. 108–173 , set out as an Effective Date of 2003 Amendment note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'The term “qualified state and local tax benefit” means any reduction or rebate of a tax described in paragraph (1), (2), or (3) of section 164(a) provided by a State or political division thereof on account of services performed as a member of a qualified volunteer emergency response organization.\nThe term “qualified payment” means any payment (whether reimbursement or otherwise) provided by a State or political division thereof on account of the performance of services as a member of a qualified volunteer emergency response organization.\nThe amount determined under subparagraph (A) for any taxable year shall not exceed $50 multiplied by the number of months during such year that the taxpayer performs such services.\n2020—Subsec. (d).  Pub. L. 116–260  struck out subsec. (d). Text read as follows: “This section shall not apply with respect to taxable years beginning—\n“(1) after  December 31, 2010 , and before  January 1, 2020 , or\n“(2) after  December 31, 2020 .”\n2019—Subsec. (c)(2).  Pub. L. 116–94, §\u202f301(a) , substituted “$50” for “$30”.\nSubsec. (d).  Pub. L. 116–94, §\u202f301(b) , substituted “beginning—” for “beginning after  December 31, 2010 .” and added pars. (1) and (2).\nPub. L. 116–260, div. EE, title I, §\u202f103(b) ,  Dec. 27, 2020 ,  134 Stat. 3040 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. O, title III, §\u202f301(d) ,  Dec. 20, 2019 ,  133 Stat. 3175 , provided that:  “The amendments made by this section [amending this section and  section 3121 of this title ] shall apply to taxable years beginning after  December 31, 2019 .”\nPub. L. 110–142, §\u202f5(c) ,  Dec. 20, 2007 ,  121 Stat. 1806 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 2007 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of an individual who receives qualified first responder retirement payments for any taxable year, gross income shall not include so much of such payments as do not exceed the annualized excludable disability amount with respect to such individual.\nThe term “annualized excludable disability amount” means, with respect to any individual, the service-connected excludable disability amounts which are properly attributable to the 12-month period immediately preceding the date on which such individual attains retirement age.\nIn the case of an individual who only receives service-connected excludable disability amounts properly attributable to a portion of the 12-month period described in paragraph (1), such paragraph shall be applied by multiplying such amounts by the ratio of 365 to the number of days in such period to which such amounts were properly attributable.\nFor purposes of this section, the term “qualified first responder service” means service as a law enforcement officer, firefighter, paramedic, or emergency medical technician.\nA prior section, added  Pub. L. 111–5, div. B, title III, §\u202f3001(a)(15)(A) ,  Feb. 17, 2009 ,  123 Stat. 465 ; amended  Pub. L. 111–144, §\u202f3(b)(5)(B) ,  Mar. 2, 2010 ,  124 Stat. 44 , related to COBRA premium assistance, prior to repeal by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(7)(C) ,  Mar. 23, 2018 ,  132 Stat. 1212 .\nPub. L. 117–328, div. T, title III, §\u202f309(c) ,  Dec. 29, 2022 ,  136 Stat. 5346 , provided that:  “The amendments made by this section [enacting this section] shall apply to amounts received with respect to taxable years beginning after  December 31, 2026 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Except as otherwise provided in this section, gross income does not include the value of any qualified Indian health care benefit.\nThe term “Indian tribe” has the meaning given such term by section 45A(c)(6).\nThe term “tribal organization” has the meaning given such term by section 4( l ) of the Indian Self-Determination and Education Assistance Act.\nThe term “medical care” has the same meaning as when used in section 213.\nThe terms “accident or health insurance” and “accident or health plan” have the same meaning as when used in section 105.\nThe term “dependent” has the meaning given such term by section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof.\nSubsection (a) shall not apply to the amount of any qualified Indian health care benefit which is not includible in gross income of the beneficiary of such benefit under any other provision of this chapter, or to the amount of any such benefit for which a deduction is allowed to such beneficiary under any other provision of this chapter.\nSection 4( l ) of the Indian Self-Determination and Education Assistance Act, referred to in subsec. (c)(2), is classified to section 5304( l ) of Title 25, Indians.\nAnother section 139D, added  Pub. L. 111–148, title X, §\u202f10108(f)(1) ,  Mar. 23, 2010 ,  124 Stat. 913 , related to free choice vouchers, prior to repeal by  Pub. L. 112–10, div. B, title VIII, §\u202f1858(b)(2)(A) ,  Apr. 15, 2011 ,  125 Stat. 168 , effective as if included in the provisions of, and the amendments made by, the provisions of  Pub. L. 111–148  to which it relates, see  section 1858(d) of Pub. L. 112–10 , set out as an Effective Date of 2011 Amendment note under  section 36B of this title .\nPub. L. 111–148, title IX, §\u202f9021(c) ,  Mar. 23, 2010 ,  124 Stat. 874 , provided that:  “The amendments made by this section [enacting this section] shall apply to benefits and coverage provided after the date of the enactment of this Act [ Mar. 23, 2010 ].”\nPub. L. 111–148, title IX, §\u202f9021(d) ,  Mar. 23, 2010 ,  124 Stat. 874 , provided that:  \n “Nothing in the amendments made by this section [enacting this section] shall be construed to create an inference with respect to the exclusion from gross income of— \n “(1)  benefits provided by an Indian tribe or tribal organization that are not within the scope of this section, and \n \n “(2)  benefits provided prior to the date of the enactment of this Act [ Mar. 23, 2010 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income does not include the value of any Indian general welfare benefit.\nFor purposes of this section, the term “Indian tribal government” includes any agencies or instrumentalities of an Indian tribal government and any Alaska Native regional or village corporation, as defined in, or established pursuant to, the Alaska Native Claims Settlement Act ( 43 U.S.C. 1601  et seq.).\nThe term “dependent” has the meaning given such term by section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B).\nThe Secretary shall, in consultation with the Tribal Advisory Committee (as established under section 3(a) of the Tribal General Welfare Exclusion Act of 2014), establish guidelines for what constitutes lavish or extravagant benefits with respect to Indian tribal government programs.\nA program shall not fail to be treated as an Indian tribal government program solely by reason of the program being established by tribal custom or government practice.\nAny items of cultural significance, reimbursement of costs, or cash honorarium for participation in cultural or ceremonial activities for the transmission of tribal culture shall not be treated as compensation for services.\nThe Alaska Native Claims Settlement Act, referred to in subsec. (c)(1), is  Pub. L. 92–203 ,  Dec. 18, 1971 ,  85 Stat. 688 , which is classified generally to chapter 33 (§\u202f1601 et seq.) of Title 43, Public Lands. For complete classification of this Act to the Code, see Short Title note set out under  section 1601 of Title 43  and Tables.\nSection 3(a) of the Tribal General Welfare Exclusion Act of 2014, referred to in subsec. (c)(3), is  section 3(a) of Pub. L. 113–168 , which is set out as a note under this section.\n2018—Subsec. (c)(1).  Pub. L. 115–141, §\u202f401(a)(42) , substituted “( 43 U.S.C. 1601  et seq.)” for “( 43 U.S.C. 1601 , et seq.)”.\nSubsec. (c)(3).  Pub. L. 115–141, §\u202f401(a)(43) , substituted “Act of 2014” for “Act of 2013”.\nPub. L. 113–168, §\u202f2(d) ,  Sept. 26, 2014 ,  128 Stat. 1884 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section] shall apply to taxable years for which the period of limitation on refund or credit under section 6511 of the Internal Revenue Code of 1986 has not expired. \n \n “(2)   One-year waiver of statute of limitations .— If the period of limitation on a credit or refund resulting from the amendments made by subsection (a) [enacting this section] expires before the end of the 1-year period beginning on the date of the enactment of this Act [ Sept. 26, 2014 ], refund or credit of such overpayment (to the extent attributable to such amendments) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.”\nPub. L. 113–168, §\u202f2(c) ,  Sept. 26, 2014 ,  128 Stat. 1884 , provided that:  “Ambiguities in section 139E of such Code [Internal Revenue Code of 1986], as added by this Act, shall be resolved in favor of Indian tribal governments and deference shall be given to Indian tribal governments for the programs administered and authorized by the tribe to benefit the general welfare of the tribal community.”\nPub. L. 113–168, §\u202f3 ,  Sept. 26, 2014 ,  128 Stat. 1884 , as amended by  Pub. L. 115–141, div. U, title IV, §\u202f401(a)(44) ,  Mar. 23, 2018 ,  132 Stat. 1186 , provided that: \n “(a)   Establishment .— The Secretary of the Treasury shall establish a Tribal Advisory Committee (hereinafter in this section referred to as the ‘Committee’). \n \n “(b)   Duties.— “(1)   Implementation .— The Committee shall advise the Secretary on matters relating to the taxation of Indians. \n \n “(2)   Education and training .— The Secretary shall, in consultation with the Committee, establish and require— “(A)  training and education for internal revenue field agents who administer and enforce internal revenue laws with respect to Indian tribes on Federal Indian law and the Federal Government’s unique legal treaty and trust relationship with Indian tribal governments, and \n \n “(B)  training of such internal revenue field agents, and provision of training and technical assistance to tribal financial officers, about implementation of this Act [enacting this section and provisions set out as notes under this section] and the amendments made thereby. \n \n \n \n “(c)   Membership.— “(1)   In general .— The Committee shall be composed of 7 members appointed as follows: “(A)  Three members appointed by the Secretary of the Treasury. \n \n “(B)  One member appointed by the Chairman, and one member appointed by the Ranking Member, of the Committee on Ways and Means of the House of Representatives. \n \n “(C)  One member appointed by the Chairman, and one member appointed by the Ranking Member, of the Committee on Finance of the Senate. \n \n \n “(2)   Term.— “(A)   In general .— Except as provided in subparagraph (B), each member’s term shall be 4 years. \n \n “(B)   Initial staggering .— The first appointments made by the Secretary under paragraph (1)(A) shall be for a term of 2 years.”\nPub. L. 113–168, §\u202f4 ,  Sept. 26, 2014 ,  128 Stat. 1885 , as amended by  Pub. L. 115–141, div. U, title IV, §\u202f401(a)(45) ,  Mar. 23, 2018 ,  132 Stat. 1186 , provided that: \n “(a)   Temporary Suspension of Examinations .— The Secretary of the Treasury shall suspend all audits and examinations of Indian tribal governments and members of Indian tribes (or any spouse or dependent of such a member), to the extent such an audit or examination relates to the exclusion of a payment or benefit from an Indian tribal government under the general welfare exclusion, until the education and training prescribed by section 3(b)(2) of this Act [ section 3(b)(2) of Pub. L. 113–168 , set out as a note above] is completed. The running of any period of limitations under section 6501 of the Internal Revenue Code of 1986 with respect to Indian tribal governments and members of Indian tribes shall be suspended during the period during which audits and examinations are suspended under the preceding sentence. \n \n “(b)   Waiver of Penalties and Interest .— The Secretary of the Treasury may waive any interest and penalties imposed under such Code on any Indian tribal government or member of an Indian tribe (or any spouse or dependent of such a member) to the extent such interest and penalties relate to excluding a payment or benefit from gross income under the general welfare exclusion. \n \n “(c)   Definitions .— For purposes of this section— “(1)   Indian tribal government .— The term ‘Indian tribal government’ shall have the meaning given such term by section 139E of such Code, as added by this Act. \n \n “(2)   Indian tribe .— The term ‘Indian tribe’ shall have the meaning given such term by section 45A(c)(6) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of any wrongfully incarcerated individual, gross income shall not include any civil damages, restitution, or other monetary award (including compensatory or statutory damages and restitution imposed in a criminal matter) relating to the incarceration of such individual for the covered offense for which such individual was convicted.\nFor purposes of this section, the term “covered offense” means any criminal offense under Federal or State law, and includes any criminal offense arising from the same course of conduct as that criminal offense.\nPub. L. 114–113, div. Q, title III, §\u202f304(c) ,  Dec. 18, 2015 ,  129 Stat. 3088 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning before, on, or after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title III, §\u202f304(d) ,  Dec. 18, 2015 ,  129 Stat. 3088 , as amended by  Pub. L. 115–123, div. D, title II, §\u202f41103(a) ,  Feb. 9, 2018 ,  132 Stat. 155 , provided that:  “If the credit or refund of any overpayment of tax resulting from the application of this Act [probably means this section, enacting this section and provisions set out as a note above] to a period before the date of enactment of this Act [ Dec. 18, 2015 ] is prevented as of such date by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the 3-year period beginning on the date of the enactment of this Act.”\n[ Pub. L. 115–123, div. D, title II, §\u202f41103(b) ,  Feb. 9, 2018 ,  132 Stat. 155 , provided that:  “The amendment made by this section [amending  section 304(d) of Pub. L. 114–113 , set out above] shall take effect on the date of the enactment of this Act [ Feb. 9, 2018 ].” \n]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of a Settlement Trust which has been assigned payments described in subsection (a), gross income shall include such payments when received by such Settlement Trust pursuant to the assignment and shall have the same character as if such payments were received by the Native Corporation.\nThe amount and scope of any assignment under subsection (a) shall be described with reasonable particularity and may either be in a percentage of one or more such payments or in a fixed dollar amount.\nNotwithstanding section 247, no deduction shall be allowed to a Native Corporation for purposes of any amounts described in subsection (a).\nFor purposes of this section, the terms “Native Corporation” and “Settlement Trust” have the same meaning given such terms under section 646(h).\nThe Alaska Native Claims Settlement Act, referred to in subsec. (a), is  Pub. L. 92–203 ,  Dec. 18, 1971 ,  85 Stat. 688 , which is classified generally to chapter 33 (§\u202f1601 et seq.) of Title 43, Public Lands. For complete classification of this Act to the Code, see Short Title note set out under  section 1601 of Title 43  and Tables.\nPub. L. 115–97, title I, §\u202f13821(a)(3) ,  Dec. 22, 2017 ,  131 Stat. 2178 , provided that:  “The amendments made by this subsection [enacting this section] shall apply to taxable years beginning after  December 31, 2016 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'Gross income shall not include any interest received from the Federal Government in connection with an action to recover property seized by the Internal Revenue Service pursuant to  section 5317(c)(2) of title 31 , United States Code, by reason of a claimed violation of section 5324 of such title.\nPub. L. 116–25, title I, §\u202f1202(c) ,  July 1, 2019 ,  133 Stat. 988 , provided that:  “The amendments made by this section [enacting this section] shall apply to interest received on or after the date of the enactment of this Act [ July 1, 2019 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': 'In the case of an assistance eligible individual (as defined in subsection (a)(3) of section 9501 of the American Rescue Plan Act of 2021), gross income does not include any premium assistance provided under subsection (a)(1) of such section.\nSection 9501 of the American Rescue Plan Act of 2021, referred to in text, is  section 9501 of Pub. L. 117–2 , which is set out as a note under  section 4980B of this title .\nPub. L. 117–2, title IX, §\u202f9501(b)(4)(C) ,  Mar. 11, 2021 ,  135 Stat. 138 , provided that:  “The amendments made by this paragraph [enacting this section] shall apply to taxable years ending after the date of the enactment of this Act [ Mar. 11, 2021 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME'},
  'content': '2018—Subsec. (a)(2).  Pub. L. 115–141, §\u202f401(b)(11) , redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “Amounts credited to the Maritime Administration under section 9(b)(6) of the Merchant Ship Sales Act of 1946, see section 9(c)(1) of that Act (50 U.S.C. App. 1742).”\nSubsec. (a)(3).  Pub. L. 115–141, §\u202f401(b)(11) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nPub. L. 115–141, §\u202f401(a)(2)(A) , substituted “Department of Veterans Affairs” for “Veterans’ Administration”.\nSubsec. (a)(4) to (6).  Pub. L. 115–141, §\u202f401(b)(11) , redesignated pars. (4) to (6) as (3) to (5), respectively.\n2006—Subsec. (a)(4).  Pub. L. 109–304  substituted “ section 53507 of title 46 , United States Code” for “section 607(d) of the Merchant Marine Act, 1936 ( 46 U.S.C. 1177 )”.\n2002— Pub. L. 107–134  renumbered  section 139 of this title  as this section.\n1997— Pub. L. 105–33  renumbered  section 138 of this title  as this section.\n1996— Pub. L. 104–188  renumbered  section 137 of this title  as this section.\n1992— Pub. L. 102–486  renumbered  section 136 of this title  as this section.\n1991—Subsec. (a)(3).  Pub. L. 102–40  substituted “5301” for “3101”.\nSubsec. (a)(6).  Pub. L. 102–83  substituted “1562(a)–(c)” for “562(a)–(c)”.\n1988— Pub. L. 100–647  renumbered  section 135 of this title  as this section.\n1986— Pub. L. 99–514  renumbered  section 134 of this title  as this section.\n1984— Pub. L. 98–369 , §§\u202f531(a)(1), 543(a), successively renumbered sections 132 and 133 of this title as this section.\nSubsec. (a)(6) to (8).  Pub. L. 98–369, §\u202f2661 ( o )(2), struck out par. (6) relating to railroad retirement annuities and pensions, struck out par. (7) relating to railroad unemployment benefits, and redesignated par. (8) as (6).\n1983— Pub. L. 97–473  successively renumbered sections 130 and 131 of this title as this section.\n1981— Pub. L. 97–34  successively renumbered sections 128 and 129 of this title as this section.\n1980—Subsec. (a).  Pub. L. 96–589  redesignated pars. (2) to (9) as (1) to (8), respectively. Former par. (1), relating to  section 1079 of title 11  for adjustments of indebtedness under wage earners’ plans, was struck out.\nSubsec. (a)(8).  Pub. L. 96–222  substituted “benefits which are not includible in gross income under section 85,” for “benefits, see”.\n1978— Pub. L. 95–600  successively renumbered sections 125, 126, and 127 of this title as this section.\nPub. L. 95–618  renumbered  section 124 of this title  as this section.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(a)(21) , struck out pars. (4), (5), (6), (9), (10), (11), (12), (13), and (17) relating to: benefits under World War Adjustment Compensation Act; benefits under World War Veteran’s Act 1924; dividends and interest derived from certain preferred stock by Reconstruction Finance Corporation; income derived from Ogdensburg bridge; income derived from Owensburg bridge and ferries; income from Saint Clair River bridge and ferries; leave compensation payments under section 6 of Armed Forces Leave Act of 1946; mustering-out payments under Mustering-Out Payment Act of 1944; and gain derived from sale or other disposition of Treasury Bills issued after  June 17, 1930 , under the Second Liberty Bond Act, respectively, renumbered pars. (7), (8), (14), (15), (16), and (18) as pars. (5), (6), (7), (8), (9), and (4), respectively, struck out references to Statutes at Large, and updated cross references to the United States Code.\nSubsec. (b).  Pub. L. 94–455, §\u202f1901(a)(21) , struck out “ 58 Stat. 689 ;” after “Health Service Act”.\n1969— Pub. L. 91–172  renumbered  section 123 of this title  as this section.\n1966— Pub. L. 89–365  renumbered  section 122 of this title  as this section.\n1964— Pub. L. 88–272  renumbered  section 121 of this title  as this section.\n1958—Subsec. (a)(18).  Pub. L. 85–857  substituted “ section 3101 of title 38 , United States Code” for “section 1001 of the Veterans’ Benefits Act of 1957”.\n1957—Subsec. (a)(18).  Pub. L. 85–56  substituted provisions relating to benefits under laws administered by Veterans’ Administration, for provisions which related to dependency and indemnity compensation.\n1956—Subsec. (a). Act  Aug. 1, 1956 , added par. (18) relating to dependency and indemnity compensation.\nAmendment by section 2661( o )(2) of  Pub. L. 98–369  effective as though included in the enactment of the Social Security Amendments of 1983,  Pub. L. 98–21 , see  section 2664(a) of Pub. L. 98–369 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 96–589  effective  Oct. 1, 1979 , but not to apply to proceedings under Title 11 commenced before  Oct. 1, 1979 , see  section 7 of Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 85–857  effective  Jan. 1, 1959 , see  section 2 of Pub. L. 85–857 , set out as an Effective Date note preceding Part I of Title 38, Veterans’ Benefits.\nFor provisions that nothing in amendment by  section 401(b)(11) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'Except as otherwise provided in this subsection, an issue meets the test of this paragraph if more than 10 percent of the proceeds of the issue are to be used for any private business use.\nFor purposes of this subsection, the term “private business use” means use (directly or indirectly) in a trade or business carried on by any person other than a governmental unit. For purposes of the preceding sentence, use as a member of the general public shall not be taken into account.\nFor purposes of the 1st sentence of subparagraph (A), any activity carried on by a person other than a natural person shall be treated as a trade or business.\nFor purposes of this subsection, the sale of carbon dioxide produced by a qualified carbon dioxide capture facility (as defined in section 142( o )) which is owned by a governmental unit shall not constitute private business use.\nThe term “government use” means any use other than a private business use.\nThere shall not be taken into account under this subsection or subsection (c) the portion of the proceeds of an issue which (if issued as a separate issue) would be treated as a qualified 501(c)(3) bond if the issuer elects to treat such portion as a qualified 501(c)(3) bond.\nExcept as otherwise provided in this subsection, for purposes of paragraph (1), the term “nongovernmental output property” means any property (or interest therein) which before such acquisition was used (or held for use) by a person other than a governmental unit in connection with an output facility (within the meaning of subsection (b)(4)) (other than a facility for the furnishing of water). For purposes of the preceding sentence, use (or the holding for use) before  October 14, 1987 , shall not be taken into account.\nThe term “qualified service area” means, with respect to the governmental unit acquiring the property, any area throughout which such unit provided (at all times during the 10-year period ending on the date such property is acquired by such unit) output of the same type as the output to be provided by such property. For purposes of the preceding sentence, the period before  October 14, 1987 , shall not be taken into account.\nSubclause (III) of subparagraph (B)(ii) shall not apply to an annexation of an area by a governmental unit if the output capacity of the property acquired in connection with the annexation, when added to the output capacity of all other property which is not treated as nongovernmental output property by reason of subparagraph (A)(ii) with respect to such annexed area, does not exceed 10 percent of the output capacity of the property providing output of the same type to the qualified service area into which it is annexed.\nThe term “nongovernmental output property” shall not include any property which is to be converted to a use not in connection with an output facility.\nSubparagraph (A) shall not apply to any property which is part of the output function of a nuclear power facility.\nWith respect to nongovernmental output property acquired by a joint action agency the members of which are governmental units, this subsection shall be applied at the member level by treating each member as acquiring its proportionate share of such property.\nThe term “nongovernmental output property” shall not include any contract for the prepayment of electricity or natural gas which is not investment property under section 148(b)(2).\nSuch bond is issued as part of an issue which meets the applicable requirements of section 146, and\u202f 1 1 \u202fSo in original. Probably should end with a period after “146”.\nSuch bond meets the applicable requirements of each subsection of section 147.\nA prior section 141, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 40 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title I, §\u202f112(a) ,  78 Stat. 23 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title VIII, §\u202f802(a) , (c)(4), (e),  83 Stat. 676 , 678;  Dec. 10, 1971 ,  Pub. L. 92–178, title II , §§\u202f202, 203(a)–(c), title III, §\u202f301(a),  85 Stat. 511 , 520;  Mar. 29, 1975 ,  Pub. L. 94–12, title II , §§\u202f201(a), 202(a),  89 Stat. 28 , 29;  Dec. 23, 1975 ,  Pub. L. 94–164, §\u202f2(a)(1) , (b)(1),  89 Stat. 970 , 971;  Oct. 4, 1976 ,  Pub. L. 94–455, title IV, §\u202f401(b)(1) , (2), title XIX, §\u202f1906(b)(13)(A),  90 Stat. 1556 , 1834, provided for standard deduction, prior to repeal by  Pub. L. 95–30, title I, §\u202f101(d)(1) ,  May 23, 1977 ,  91 Stat. 133 , applicable to taxable years beginning after  Dec. 31, 1976 .\n2021—Subsec. (b)(6)(C).  Pub. L. 117–58  added subpar. (C).\n2005—Subsec. (c)(2)(C).  Pub. L. 109–58, §\u202f1327(b) , added subpar. (C).\nSubsec. (d)(7).  Pub. L. 109–58, §\u202f1327(c) , added par. (7).\n1988—Subsec. (b)(5)(B).  Pub. L. 100–647  substituted “cause a bond” for “cause bond”.\n1987—Subsecs. (d), (e).  Pub. L. 100–203  added subsec. (d) and redesignated former subsec. (d) as (e).\nAmendment by  Pub. L. 117–58  applicable to obligations issued after  Dec. 31, 2021 , see  section 80402(f) of Pub. L. 117–58 , set out as a note under  section 45Q of this title .\nPub. L. 109–58, title XIII, §\u202f1327(d) ,  Aug. 8, 2005 ,  119 Stat. 1019 , provided that:  “The amendments made by this section [amending this section and  section 148 of this title ] shall apply to obligations issued after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10631(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–455 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 142 and 146 of this title] shall apply to bonds issued after  October 13, 1987  (other than bonds issued to refund bonds issued on or before such date). \n \n “(2)   Binding agreements .— The amendments made by this section shall not apply to bonds (other than advance refunding bonds) with respect to a facility acquired after  October 13, 1987 , pursuant to a binding contract entered into on or before such date. \n \n “(3)   Transitional rule .— The amendments made by this section shall not apply to bonds issued— “(A)  after  October 13, 1987 , by an authority created by a statute— “(i)  approved by the State Governor on  July 24, 1986 , and \n \n “(ii)  sections 1 through 10 of which became effective on  January 15, 1987 , and \n \n \n “(B)  to provide facilities serving the area specified in such statute on the date of its enactment.”\nPub. L. 99–514, title XIII , subtitle B,  Oct. 22, 1986 ,  100 Stat. 2659 , as amended by  Pub. L. 100–647, title I, §\u202f1013(b) , (c)(1), (2)(A), (3)–(11)(D), (13), (14)(A), (d), (e)(1), (2)(A), (f)(1)(A), (2)–(7)(A), (8), (9), (11), (g), (h),  Nov. 10, 1988 ,  102 Stat. 3545–3550 , 3558;  Pub. L. 101–239, title VII, §\u202f7831(e) ,  Dec. 19, 1989 ,  103 Stat. 2427 , provided that: \n “SEC. 1311.  GENERAL EFFECTIVE DATES. “(a)   In General .— Except as otherwise provided in this subtitle, the amendments made by section 1301 [enacting sections 141 to 150 and 7703 of this title, amending sections 2, 22, 25, 32, 86, 103, 105, 152, 153, 163, 194, 269A, 414, 879, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title, repealing  section 103A of this title , omitting former  section 143 of this title , enacting provisions set out as notes under sections 141 and 148 of this title, and amending provisions set out as a note under  section 103A of this title ] shall apply to bonds issued after  August 15, 1986 . \n \n “(b)   Section  1301(f).— “(1)   Increase in trade-in rate .— The amendments made by paragraph (1) of section 1301(f) [amending  section 25 of this title ] shall apply to nonissued bond amounts elected after  August 15, 1986 . \n \n “(2)   Certificates .— The amendments made by paragraph (2) of section 1301(f) [amending  section 25 of this title ] shall apply to certificates issued with respect to non-issued bond amounts elected after  August 15, 1986 . \n \n \n “(c)   Changes in Use, Etc., of Facilities Financed With Private Activity Bonds .— Subsection (b) of section 150 of the 1986 Code shall apply to changes in use (and ownership) after  August 15, 1986 , but only with respect to financing (including refinancings) provided after such date. \n \n “(d)   Public Approval and Information Reporting .— Sections 147(f) and 149(e) of the 1986 Code shall apply to bonds issued after  December 31, 1986 . \n \n “(e)   Rebate Requirement for Qualified Scholarship Funding Bonds .— Section 150(d) of the 1986 Code shall apply to payments made after  August 15, 1986 . \n \n “(f)   Section  1303.— The amendments made by section 1303 [amending sections 172, 1016, and 3402 of this title and repealing sections 1391 to 1397 and 6039B of this title] shall take effect on the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n \n “SEC. 1312.  TRANSITIONAL RULES FOR CONSTRUCTION OR BINDING AGREEMENTS AND CERTAIN GOVERNMENT BONDS ISSUED AFTER  AUGUST 15, 1986 . “(a)   Exception for Construction or Binding Agreements.— “(1)   In general .— The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to bonds (other than a refunding bond) with respect to a facility— “(A) (i)  the original use of which commences with the taxpayer, and the construction, reconstruction, or rehabilitation of which began before  September 26, 1985 , and was completed on or after such date, \n \n “(ii)  the original use of which begins with the taxpayer and with respect to which a binding contract to incur significant expenditures for construction, reconstruction, or rehabilitation was entered into before  September 26, 1985 , and some of such expenditures are incurred on or after such date, or \n \n “(iii)  acquired on or after  September 26, 1985 , pursuant to a binding contract entered into before such date, and \n \n \n “(B)  described in an inducement resolution or other comparable preliminary approval adopted by an issuing authority (or by a voter referendum) before  September 26, 1985 . \n \n \n “(2)   Significant expenditures .— For purposes of paragraph (1)(A), the term ‘significant expenditures’ means expenditures greater than 10 percent of the reasonably anticipated cost of the construction, reconstruction, or rehabilitation of the facility involved. \n \n \n “(b)   Certain Amendments To Apply to Bonds Under Subsection  (a)  Transitional Rule.— “(1)   In general .— In the case of a bond issued after  August 15, 1986 , and to which subsection (a) of this section applies, the requirements of the following provisions shall be treated as included in section 103 and section 103A (as appropriate) of the 1954 Code: “(A)  The requirement that 95 percent or more of the net proceeds of an issue are to be used for a purpose described in section 103(b)(4) or (5) of such Code in order for section 103(b)(4) or (5) of such Code to apply, including the application of section 142(b)(2) of the 1986 Code (relating to limitation on office space). \n \n “(B)  The requirement that 95 percent or more of the net proceeds of an issue are to be used for a purpose described in section 103(b)(6)(A) of the 1954 Code in order for section 103(b)(6)(A) of such Code to apply. \n \n “(C)  The requirements of section 143 of the 1986 Code (relating to qualified mortgage bonds and qualified veterans’ mortgage bonds) in order for section 103A(b)(2) of the 1954 Code to apply. \n \n “(D)  The requirements of section 144(a)(11) of the 1986 Code (relating to limitation on acquisition of depreciable farm property) in order for section 103(b)(6)(A) of the 1954 Code to apply. \n \n “(E)  The requirements of section 147(b) of the 1986 Code (relating to maturity may not exceed 120 percent of economic life). \n \n “(F)  The requirements of section 147(f) of the 1986 Code (relating to public approval required for private activity bonds). \n \n “(G)  The requirements of section 147(g) of the 1986 Code (relating to restriction on issuance costs financed by issue). \n \n “(H)  The requirements of section 148 of the 1986 Code (relating to arbitrage). \n \n “(I)  The requirements of section 149(e) of the 1986 Code (relating to information reporting). \n \n “(J)  The provisions of section 150(b) of the 1986 Code (relating to changes in use). \n \n \n “(2)   Certain requirements apply only to bonds issued after  december 31, 1986 .— In the case of subparagraphs (F) and (I) of paragraphs (1), paragraph (1) shall be applied by substituting ‘ December 31, 1986 ’ for ‘ August 15, 1986 ’. \n \n “(3)   Application of volume cap .— Except as provided in section 1315, any bond to which this subsection applies shall be treated as a private activity bond for purposes of section 146 of the 1986 Code if such bond would have been taken into account under section 103(n) or 103A(g) of the 1954 Code (determined without regard to any carryforward election) were such bond issued before  August 16, 1986 . \n \n “(4)   Application of provisions .— For purposes of applying the requirements referred to in any subparagraph of paragraph (1) or of subsection (a)(3) or (b)(3) of section 1313 to any bond, such bond shall be treated as described in the subparagraph of section 141(d)(1) of the 1986 Code to which the use of the proceeds of such bond most closely relates. \n \n \n “(c)   Special Rules for Certain Government Bonds Issued After August  15, 1986.— “(1)   In general .— In the case of any bond described in paragraph (2)— “(A)  section 1311(a) and (c) and subsection (b) of this section shall be applied by substituting ‘ August 31, 1986 ’ for ‘ August 15, 1986 ’ each place it appears, \n \n “(B)  subsection (b)(1) shall be applied without regard to subparagraphs (F), (G), and (J), and \n \n “(C)  such bond shall not be treated as a private activity bond for purposes of applying the requirements referred to in subparagraphs (H) and (I) of subsection (b)(1). \n \n \n “(2)   Bond described .— A bond is described in this paragraph if such bond is not— “(A)  an industrial development bond, as defined in section 103(b)(2) of the 1954 Code but determined— “(i)  by inserting ‘directly or indirectly’ after ‘is’ in the material preceding clause (i) of subparagraph (B) thereof, and \n \n “(ii)  without regard to subparagraph (B) of section 103(b)(3) of such Code, \n \n \n “(B)  a mortgage subsidy bond (as defined in section 103A(b)(1) of such Code, without regard to any exception from such definition), or \n \n “(C)  a private loan bond (as defined in section 103( o )(2)(A) of such Code, without regard to any exception from such definition other than section 103( o )(2)(C) of such Code). \n \n \n \n “(d)   Election Out .— This section shall not apply to any issue with respect to which the issuer elects not to have this section apply. \n \n \n “SEC. 1313.  TRANSITIONAL RULES RELATING TO REFUNDINGS. “(a)   Certain Current Refundings.— “(1)   In general .— Except as provided in paragraph (3), the amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to any bond the proceeds of which are used exclusively to refund (other than to advance refund) a qualified bond (or a bond which is part of a series of refundings of a qualified bond) if— “(A)  the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, and \n \n “(B) (i)  the average maturity of the issue of which the refunding bond is a part does not exceed 120 percent of the average reasonably expected economic life of the facilities being financed with the net proceeds of such issue (determined under section 147(b) of the 1986 Code), or \n \n “(ii)  the refunding bond has a maturity date not later than the date which is 17 years after the date on which the qualified bond was issued. \n \n \n\n In the case of a qualified bond which was (when issued) a qualified mortgage bond or a qualified veterans’ mortgage bond, subparagraph (B)(i) shall not apply and subparagraph (B)(ii) shall be applied by substituting ‘32 years’ for ‘17 years’. \n \n “(2)   Qualified bond .— For purposes of paragraph (1), the term ‘qualified bond’ means any bond (other than a refunding bond)— “(A)  issued before  August 16, 1986 , or \n \n “(B)  issued after  August 15, 1986 , if section 1312(a) applies to such bond. \n \n \n “(3)   Certain amendments to apply .— The following provisions of the 1986 Code shall be treated as included in section 103 and section 103A (as appropriate) of the 1954 Code and shall apply to refunding bonds described in paragraph (1): “(A)  The requirements of section 147(f) (relating to public approval required for private activity bonds) but only if the maturity date of the refunding bond is later than the maturity date of the refunded bond. \n \n “(B)  The requirements of section 147(g) (relating to restriction on issuance costs financed by issue). \n \n “(C)  The requirements of sections 143(g) and 148 (relating to arbitrage). \n \n “(D)  The requirements of section 149(e) (relating to information reporting). \n \n “(E)  The provisions of section 150(b) (relating to changes in use). \n \n\n Subparagraphs (A) and (D) shall apply only if the refunding bond is issued after  December 31, 1986 . In the case of a refunding bond described in paragraph (1) with respect to a qualified bond described in paragraph (2)(B), the requirements of section 1312(b)(1) which applied to such qualified bond shall be treated as specified in this paragraph with respect to such refunding bond. \n \n “(4)   Special rules for certain government bonds issued after  august 15, 1986 .— In the case of any bond described in section 1312(c)(2)— “(A)  paragraph (2) of this subsection shall be applied by substituting ‘ August 31, 1986 ’ for ‘ August 15, 1986 ’ and by substituting ‘ September 1, 1986 ’ for ‘ August 16, 1986 ’, \n \n “(B)  paragraph (3) shall be applied without regard to subparagraphs (A), (B), and (E), and \n \n “(C)  such bond shall not be treated as a private activity bond for purposes of applying the requirements referred to in subparagraphs (C) and (D) of paragraph (3). \n \n \n \n “(b)   Certain Advance Refundings.— “(1)   In general .— Except as provided in paragraph (3), the amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to any bond the proceeds of which are used exclusively to advance refund a bond if— “(A)  the refunded bond is described in paragraph (2), and \n \n “(B)  the requirements of subsection (a)(1)(B) are met. \n \n \n “(2)   Non-idb’s, etc .— A bond is described in this paragraph if such bond is not described in subsection (b)(2) or ( o )(2)(A) of section 103 of the 1954 Code and was issued (or was issued to refund a bond issued) before  August 16, 1986 . For purposes of the preceding sentence, the determination of whether a bond is described in such subsection ( o )(2)(A) shall be made without regard to any exception other than section 103( o )(2)(C) of such Code. \n \n “(3)   Certain amendments to apply .— The following provisions of the 1986 Code shall be treated as included in section 103 and section 103A (as appropriate) of the 1954 Code and shall apply to refunding bonds described in paragraph (1): “(A)  The requirements of section 147(f) (relating to public approval required for private activity bonds). \n \n “(B)  The requirements of section 147(g) (relating to restriction on issuance costs financed by issue). \n \n “(C)  The requirements of section 148 (relating to arbitrage), except that section 148(d)(3) shall not apply to proceeds of such bonds to be used to discharge the refunded bonds. \n \n “(D)  The requirements of [former] paragraphs (3) and (4) of section 149(d) (relating to advance refundings). \n \n “(E)  The requirements of section 149(e) (relating to information reporting). \n \n “(F)  The provisions of section 150(b) (relating to changes in use). \n \n “(G)  Except as provided in the last sentence of subsection (c)(2) of this section, the requirements of section 145(b) (relating to $150,000,000 limitation on bonds other than hospital bonds). \n \n\n Subparagraphs (A) and (E) shall apply only if the refunding bond is issued after  December 31, 1986 . \n \n “(4)   Special rule for certain government bonds issued after  august 15, 1986 .— In the case of any bond described in section 1312(c)(2)— “(A)  paragraph (2) of this subsection shall be applied by substituting ‘ September 1, 1986 ’ for ‘ August 16, 1986 ’, \n \n “(B)  paragraph (3) shall be applied without regard to subparagraphs (A), (B), and (F), and \n \n “(C)  such bond shall not be treated as a private activity bond for purposes of applying the requirements referred to in subparagraphs (C) and (E). \n \n \n “(5)   Certain refunding bonds subject to volume cap .— Any refunding bond described in paragraph (1) the proceeds of which are used to refund a bond issued as part of an issue 5 percent or more of the net proceeds of which are or will be used to provide an output facility (within the meaning of section 141(b)(4) of the 1986 Code) shall be treated as a private activity bond for purposes of section 146 of the 1986 Code (to the extent of the nongovernmental use of such issue, under rules similar to the rules of section 146(m)(2) of such Code). For purposes of the preceding sentence, use by a 501(c)(3) organization with respect to its activities which do not constitute unrelated trades or businesses (determined by applying section 513(a) of the 1986 Code) shall not be taken into account. \n \n \n “(c)   Treatment of Certain Refundings of Certain IDB’s and  501(c)(3)  Bonds.— “(1)  $40,000,000  limit for certain small issue bonds .— Paragraph (10) of section 144(a) of the 1986 Code shall not apply to any bond (or series of bonds) the proceeds of which are used exclusively to refund a tax-exempt bond to which such paragraph and the corresponding provision of prior law did not apply if— “(A)  the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, \n \n “(B)  the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, and \n \n “(C)  the net proceeds of the refunding bond are used to redeem the refunded bond not later than 90 days after the date of the issuance of the refunding bond. \n \n\n For purposes of subparagraph (A), average maturity shall be determined in accordance with section 147(b)(2)(A) of the 1986 Code. \n \n “(2)  $150,000,000  limitation for certain 501( c )(3) bonds .— Subsection (b) of section 145 of the 1986 Code (relating to $150,000,000 limitation for nonhospital bonds) shall not apply to any bond (or series of bonds) the proceeds of which are used exclusively to refund a tax-exempt bond to which such subsection did not apply if— “(A) (i)  the average maturity of the issue of which the refunding bond is a part does not exceed 120 percent of the average reasonably expected economic life of the facilities being financed with the net proceeds of such issue (determined under section 147(b) of the 1986 Code), or \n \n “(ii)  the refunding bond has a maturity date not later than the later of the date which is 17 years after the date on which the qualified bond (as defined in subsection (a)(2)) was issued, and \n \n \n “(B)  the requirements of subparagraphs (B) and (C) of paragraph (1) are met with respect to the refunding bond. \n \n\n Subsection (b) of section 145 of the 1986 Code shall not apply to the 1st advance refunding after  March 14, 1986 , of a bond issued before  January 1, 1986 . \n \n “(3)   Application to later issues .— Any bond to which section 144(a)(10) or 145(b) of the 1986 Code does not apply by reason of this section shall be taken into account in determining whether such section applies to any later issue. \n \n \n “(d)   Mortgage and Student Loan Targeting Rules To Apply to Loans Made More Than  3  Years After the Date of the Original Issue .— Subsections (a)(3) and (b)(3) shall be treated as including the requirements of subsections (e) and (f) of section 143 and paragraphs (3) and (4) of section 144(b) of the 1986 Code with respect to bonds the proceeds of which are used to finance loans made more than 3 years after the date of the issuance of the original bond. \n \n \n “SEC. 1314.  SPECIAL RULES WHICH OVERRIDE OTHER RULES IN THIS SUBTITLE. “(a)   Arbitrage Restriction on Investments in Annuities .— In the case of a bond issued after  September 25, 1985 , section 103(c) of the 1954 Code shall be applied by treating the reference to securities in paragraph (2) thereof as including a reference to an annuity contract. The preceding sentence shall not apply to the first advance refunding after  September 25, 1985 , if a bond issued before  September 26, 1985 . \n \n “(b)   Temporary Period for Advance Refundings .— In the case of a bond issued after  December 31, 1985 , to advance refund a bond, the initial temporary period under section 103(c) of the 1954 Code with respect to the proceeds of the refunding bond shall end not later than 30 days after the date of issue of the refunding bond. \n \n “(c)   Determination of Yield .— In the case of a bond issued after  December 31, 1985 , for purposes of section 103(c) of the 1954 Code, the yield on an issue shall be determined on the basis of the issue price (within the meaning of sections 1273 and 1274 of the 1986 Code). \n \n “(d)   Arbitrage Rebate Requirement.— “(1)   In general .— Except as otherwise provided in this subsection, in the case of a bond issued after  December 31, 1985 , section 103 of the 1954 Code shall be treated as including the requirements of section 148(f) of the 1986 Code in order for section 103(a) of the 1954 Code to apply. \n \n “(2)   Government bonds .— In the case of a bond described in section 1312(c)(2) (and not described in paragraph (3) of this subsection), paragraph (1) shall be applied by substituting ‘ August 31, 1986 ’ for ‘ December 31, 1985 ’. \n \n “(3)   Certain pools.— “(A)   In general .— In the case of a bond described in section 1312(c)(2) and issued as part of an issue described in subparagraph (B), (C), (D), or (E), paragraph (1) shall be applied by substituting ‘3 p.m. E.D.T.,  July 17, 1986 ’ for ‘ December 31, 1985 ’. Such a bond shall not be treated as a private activity bond for purposes of applying section 148(f) of the 1986 Code. \n \n “(B)   Loans to unrelated governmental units .— An issue is described in this subparagraph if any portion of the proceeds of the issue is to be used to make or finance loans to any governmental unit other than any governmental unit which is subordinate to the issuer and the jurisdiction of which is within— “(i)  the jurisdiction of the issuer, or \n \n “(ii)  the jurisdiction of the governmental unit on behalf of which such issuer issued the issue. \n \n \n “(C)   Less than 75 percent of projects identified .— An issue is described in this subparagraph if less than 75 percent of the proceeds of the issue is to be used to make or finance loans to initial borrowers to finance projects identified (with specificity) by the issuer, on or before the date of issuance of the issue, as projects to be financed with the proceeds of the issue. \n \n “(D)   Less than 25 percent of funds committed to be borrowed .— An issue is described in this subparagraph if, on or before the date of issuance of the issue, commitments have not been entered into by initial borrowers to borrow at least 25 percent of the proceeds of the issue. \n \n “(E)   Certain long maturity issues .— An issue is described in this subparagraph if— “(i)  the maturity date of any bond issued as part of such issue exceeds 30 years, and \n \n “(ii)  any principal payment on any loan made or financed by the proceeds of the issue is to be used to make or finance additional loans. \n \n \n “(F)   Special rules.— “(i)   Exception from subparagraphs (c) and (d) where similar pools issued by issuer .— An issue shall not be treated as described in subparagraph (C) or (D) with respect to any issue to make or finance loans to governmental units if— \u2001\u2001\u2001\u2001\u2001“(I)  the issuer, before 1986, issued 1 or more similar issues to make or finance loans to governmental units, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the aggregate face amount of such issues issued during 1986 does not exceed 250 percent of the average of the annual aggregate face amounts of such similar issues issued during 1983, 1984, or 1985. \n \n \n “(ii)   Determination of issuance .— For purposes of subparagraph (A), an issue shall not be treated as issued until— \u2001\u2001\u2001\u2001\u2001“(I)  the bonds issued as part of such issue are offered to the public (pursuant to final offering materials), and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  at least 25 percent of such bonds is sold to the public. \n \n \n\n \u2001For purposes of the preceding sentence, the sale of a bond to a securities firm, broker, or other person acting in the capacity of an underwriter or wholesaler shall not be treated as a sale to the public. \n \n \n \n “(e)   Information Reporting .— In the case of a bond issued after  December 31, 1986 , nothing in section 103(a) of the 1986 Code or any other provision of law shall be construed to provide an exemption from Federal income tax for interest on any bond unless such bond satisfies the requirements of section 149(e) of the 1986 Code. A bond described in section 1312(c)(2) shall not be treated as a private activity bond for purposes of applying such requirements. \n \n “(f)   Abusive Transaction Limitation on Advance Refundings To Apply .— In the case of a bond issued after  August 31, 1986 , nothing in section 103(a) of the 1986 Code or any other provision of law shall be construed to provide an exemption from Federal income tax for interest on any bond if the issue of which such bond is a part is described in [former] paragraph (4) of section 149(d) of the 1986 Code (relating to abusive transactions). \n \n “(g)   Termination of Mortgage Bond Policy Statement Requirement .— Paragraph (5) of section 103A(j) of the 1954 Code (relating to policy statement) shall not apply to any bond issued after  August 15, 1986 , and shall not apply to nonissued bond amounts elected under section 25 of the 1986 Code after such date. \n \n “(h)   Arbitrage Restriction on Investments in Investment-Type Property .— In the case of a bond issued before  August 16, 1986  ( September 1, 1986  in the case of a bond described in section 1312(c)(2)), section 103(c) of the 1954 Code shall be applied by treating the reference to securities in paragraph (2) thereof as including a reference to investment-type property but only for purposes of determining whether any bond issued after  October 16, 1987 , to advance refund such bond (or a bond which is part of a series of refundings of such bond) is an arbitrage bond (within the meaning of section 148(a) of the 1986 Code). \n \n “(i)   Section To Override Other Rules .— Except as otherwise expressly provided by reference to a provision to which a subsection of this section applies, nothing in any other section of this subtitle shall be construed as exempting any bond from the application of such provision. \n \n \n “SEC. 1315.  TRANSITIONAL RULES RELATING TO VOLUME CAP. “(a)   In General .— Except as otherwise provided in this section, section 146(f) of the 1986 Code shall not apply with respect to an issuing authority’s volume cap under section 103(n) of the 1954 Code, and no carryforward under such section 103(n) shall be recognized for bonds issued after  August 15, 1986 . \n \n “(b)   Certain Bonds for Carryforward Projects Outside of Volume Cap .— Bonds issued pursuant to an election under section 103(n)(10) of the 1954 Code (relating to elective carryforward of unused limitation for specified project) made before  November 1, 1985 , shall not be taken into account under section 146 of the 1986 Code if the carryforward project is a facility to which the amendments made by section 1301 [for classification see section 1311(a) of this note] do not apply by reason of section 1312(a) of this Act. \n \n “(c)   Volume Cap Not To Apply With Respect to Certain Facilities and Purposes .— Section 146 of the 1986 Code shall not apply to any bond issued with respect to any facility or purpose described in a paragraph of subsection (d) if— “(1)  such bond would not have been taken into account under section 103(n) of the 1954 Code for calendar year 1986 (determined without regard to any carryforward election) were such bond issued on  August 15, 1986 , or \n \n “(2)  such bond would not have been taken into account under section 103(n) of the 1954 Code for calendar year 1986 (determined with regard to any carryforward election made before  January 1, 1986 ) were such bond issued on  August 15, 1986 . \n \n\n The preceding sentence shall not apply to the extent section 1313(b)(5) treats any bond as a private activity bond for purposes of section 146 of the 1986 Code. \n \n “(d)   Facilities and Purposes Described.— “(1)  A facility is described in this paragraph if the amendments made by section 201 of this Act [amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] (relating to depreciation) do not apply to such facility by reason of section 204(a)(8) of this Act [set out as a note under  section 168 of this title ] (or, in the case of a facility which is governmentally owned, would not apply to such facility were it owned by a nongovernmental person). \n \n “(2)  A facility or purpose is described in this paragraph if the facility or purpose is described in a paragraph of section 1317. \n \n “(3)  A facility is described in this paragraph if the facility— “(A)  serves Los Osos, California, and \n \n “(B)  would be described in paragraph (1) were it a solid waste disposal facility. \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $35,000,000. \n \n “(4)  A facility is described in this paragraph if it is a sewage disposal facility with respect to which— “(A)  on  September 13, 1985 , the State public facilities authority took official action authorizing the issuance of bonds for such facility, and \n \n “(B)  on  December 30, 1985 , there was an executive order of the State Governor granting allocation of the State ceiling under section 103(n) of the 1954 Code in the amount of $250,000,000 to the Industrial Development Board of the Parish of East Baton Rouge, Louisiana. \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $98,500,000. \n \n “(5)  A facility is described in this paragraph if— “(A)  such facility is a solid waste disposal facility in Charleston, South Carolina, and \n \n “(B)  a State political subdivision took formal action on  April 1, 1980 , to commit development funds for such facility. \n \n\n For purposes of determining whether a bond issued as part of an issue for a facility described in the preceding sentence is an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code, ‘90 percent’ shall be substituted for ‘95 percent’ in section 142(a) of the 1986 Code. \n\n “The aggregate face amount of bonds to which this paragraph applies shall not exceed $75,000,000. \n “(6)  A facility is described in this paragraph if— “(A)  such facility is a wastewater treatment facility for which site preparation commenced before September 1985, and \n \n “(B)  a parish council approved a service agreement with respect to such facility on  December 4, 1985 . \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $120,000,000. \n \n \n “(e)   Treatment of Redevelopment Bonds .— Any bond to which section 1317(6) of this Act applies shall be treated for purposes of this section as described in subsection (c)(1). The preceding sentence shall not apply to any bond which (if issued on  August 15, 1986 ) would have been an industrial development bond (as defined in section 103(b)(2) of the 1954 Code). \n \n \n “SEC. 1316.  PROVISIONS RELATING TO CERTAIN ESTABLISHED STATE PROGRAMS. “(a)   Certain Loans to Veterans for the Purchase of Land.— “(1)   In general .— A bond described in paragraph (2) shall be treated as described in section 141(d)(1) of the 1986 Code and as having a carryforward purpose described in section 146(f)(5) of such Code, but subsections (a), (b), (c), and (d) of section 147 of such Code shall not apply to such bond. \n \n “(2)   Bond described .— A bond is described in this paragraph if— “(A)  such bond is a private activity bond solely by reason of section 141(c) of such Code, and \n \n “(B)  such bond is issued as part of an issue 95 percent or more of the net proceeds of which are to be used to carry out a program established under State law to provide loans to veterans for the purchase of land and which has been in effect in substantially the same form during the 30-year period ending on  July 18, 1984 , but only if such proceeds are used to make loans or to fund similar obligations— “(i)  in the same manner in which, \n \n “(ii)  in the same (or lesser) amount or multiple of acres per participant, and \n \n “(iii)  for the same purposes for which, \n \n\n \u2001\u2001such program was operated on  March 15, 1984 . \n \n \n \n “(b)   Renewable Energy Property.— “(1)   In general .— A bond described in paragraph (2) shall be treated as described in section 141(d)(1) of the 1986 Code and as having a carryforward purpose described in section 146(f)(5) of such Code. \n \n “(2)   Bond described .— A bond is described in this paragraph if paragraph (1) of section 103(b) of the 1954 Code would not (without regard to the amendments made by this title) have applied to such bond by reason of section 243 of the Crude Oil Windfall Profit Tax Act of 1980 [ section 243 of Pub. L. 96–223 , set out as a note under  section 103 of this title ] if— “(A)  such section 243 were applied by substituting ‘95 percent or more of the net proceeds’ for ‘substantially all of the proceeds’ in subsection (a)(1) thereof, and \n \n “(B)  subparagraph (E) of subsection (a)(1) thereof referred to section 149(b) of the 1986 Code. \n \n \n \n “(c)   Certain State Programs.— “(1)   In general .— A bond described in paragraph (2) shall be treated as described in section 141(d)(1) of the 1986 Code and as having a carryforward purpose described in section 146(f)(5) of such Code. \n \n “(2)   Bond described .— A bond is described in this paragraph if such bond is issued as part of an issue 95 percent or more of the net proceeds of which are to be used to carry out a program established under sections 280A, 280B, and 280C of the Iowa Code, but only if— “(A)  such program has been in effect in substantially the same form since  July 1, 1983 , and \n \n “(B)  such proceeds are to be used to make loans or fund similar obligations for the same purposes as permitted under such program on  July 1, 1986 . \n \n \n “(3)  $100,000,000  limitation .— The aggregate face amount of outstanding bonds to which this subsection applies shall not exceed $100,000,000. \n \n “(4)   Application of section 147 (b).— A bond to which this subsection applies (other than a refunding bond) shall be treated as meeting the requirements of section 147(b) of the 1986 Code if the average maturity (determined in accordance with section 147(b)(2)(A) of such Code) of the issue of which such bond is a part does not exceed 20 years. A bond issued to refund (or which is part of a series of bonds issued to refund) a bond described in the preceding sentence shall be treated as meeting the requirements of such section if the refunding bond has a maturity date not later than the date which is 20 years after the date on which the original bond was issued. \n \n \n “(d)   Use by Certain Federal Instrumentalities Treated as Use by Governmental Units .— Use by an instrumentality of the United States shall be treated as use by a State or local governmental unit for purposes of section 103, and part IV of subchapter B of chapter 1, of the 1986 Code with respect to a program approved by Congress before  August 3, 1972 , but only if— “(1)  a portion of such program has been financed by bonds issued before such date, to which section 103(a) of the 1954 Code applied pursuant to a ruling issued by the Commissioner of the Internal Revenue Service, and \n \n “(2)  construction of 1 or more facilities comprising a part of such program commenced before such date. \n \n \n “(e)   Refunding Permitted of Certain Bonds Invested in Federally Insured Deposits.— “(1)   In general .— Section 149(b)(2)(B)(ii) of the 1986 Code (and section 103(h)(2)(B)(ii) of the 1954 Code) shall not apply to any bond issued to refund a bond— “(A)  which, when issued, would have been treated as federally guaranteed by reason of being described in clause (ii) of section 103(h)(2)(B) of the 1954 Code if such section had applied to such bond, and \n \n “(B) (i)  which was issued before  April 15, 1983 , or \n \n “(ii)  to which such clause did not apply by reason of the except clause in section 631(c)(2) of the Tax Reform Act of 1984 [ section 631(c)(2) of Pub. L. 98–369 , set out as a note under  section 103 of this title ]. \n \n \n\n Section 147(c) of the 1986 Code (and section 103(b)(16) of the 1954 Code) shall not apply to any refunding bond permitted under the preceding sentence if section 103(b)(16) of the 1954 Code did not apply to the refunded bond when issued. \n \n “(2)   Requirements .— A refunding bond meets the requirements of this paragraph if— “(A)  the refunding bond has a maturity date not later than the maturity date of the refunded bond, \n \n “(B)  the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, \n \n “(C)  the weighted average interest rate on the refunding bond is lower than the weighted average interest rate on the refunded bond, and \n \n “(D)  the net proceeds of the refunding bond are used to redeem the refunded bond not later than 90 days after the date of the issuance of the refunding bond. \n \n \n \n “(f)   Certain Hydroelectric Generating Property.— “(1)   In general .— A bond described in paragraph (2) shall be treated as described in section 141(d)(1) of the 1986 Code and as having a carryforward purpose described in section 146(f)(5) of such Code. \n \n “(2)   Description .— A bond is described in this paragraph if such bond is issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide a facility described in section 103(b)(4)(H) of the 1954 Code determined— “(A)  by substituting ‘an application for a license’ for ‘an application’ in section 103(b)(8)(E)(ii) of the 1954 Code, and \n \n “(B)  by applying the requirements of section 142(b)(2) of the 1986 Code. \n \n \n \n “(g)   Treatment of Bonds Subject to Transitional Rules Under Tax Reform Act of  1984.— “(1)  Subsections (d)(3) and (f) of section 148 of the 1986 Code shall not apply to any bond described in section 624(c)(2) of the Tax Reform Act of 1984 [ section 624(c)(2) of Pub. L. 98–369 , set out as a note under  section 103 of this title ]. \n \n “(2) (A)  There shall not be taken into account under section 146 of the 1986 Code any bond issued to provide a facility described in paragraph (3) of section 631(a) of the Tax Reform Act of 1984 [ section 631(a)(3) of Pub. L. 98–369 , set out as a note under  section 103 of this title ] relating to exception for certain bonds for a convention center and resource recovery project. \n \n “(B)  If a bond issued as part of an issue substantially all of the proceeds of which are used to provide the convention center to which such paragraph (3) applies, such bond shall be treated as an exempt facility bond as defined in section 142(a) of the 1986 Code. \n \n “(C)  If a bond which is issued as part of an issue substantially all of the proceeds of which are used to provide the resource recovery project to which such paragraph (3) applies, such bond shall be treated as an exempt facility bond as defined in section 142(a) of the 1986 Code and section 149(b) of such Code shall not apply. \n \n \n “(3)  The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to bonds issued to finance any property described in section 631(d)(4) of the Tax Reform Act of 1984 [ section 631(d)(4) of Pub. L. 98–369 , set out as a note under  section 103 of this title ]. \n \n “(4)  The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to— “(A)  any bond issued to finance property described in section 631(d)(5) of the Tax Reform Act of 1984 [ section 631(d)(5) of Pub. L. 98–369 , set out as a note under  section 103 of this title ], \n \n “(B)  any bond described in paragraph (2), (3), (4), (5), (6), or (7) of section 632(a), or section 632(b), of such Act [ Pub. L. 98–369, div. A, title VI, §\u202f632 ,  July 18, 1984 ,  98 Stat. 937 ], and \n \n “(C)  any bond to which section 632(g)(2) of such Act applies. \n \n\n In the case of bonds to which this paragraph applies, the requirements of sections 148 and 149(d) shall be treated as included in section 103 of the 1954 Code and shall apply to such bonds. \n \n “(5)  The preceding provisions of this subsection shall not apply to any bond issued after  December 31, 1988 . \n \n “(6)  The amendments made by section 1301 [for classification see section 1311(a) of this note] (and the provisions of section 1314) shall not apply to any bond issued to finance property described in section 216(b)(3) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 216(b)(3) of Pub. L. 97–248 , set out as a note under  section 168 of this title ]. \n \n “(7)  In the case of a bond described in section 632(d) of the Tax Reform Act of 1984 [ Pub. L. 98–369, div. A, title VI, §\u202f632(d) ,  July 18, 1984 ,  98 Stat. 938 ]— “(A)  section 141 of the 1986 Code shall be applied without regard to subsection (a)(2) and paragraphs (4) and (5) of subsection (b), \n \n “(B)  paragraphs (1) and (2) of section 141(b) of the 1986 Code shall be applied by substituting ‘25 percent’ for ‘10 percent’ each place it appears, and \n \n “(C)  section 149(b) of the 1986 Code shall not apply. \n \n\n This paragraph shall not apply to any bond issued after  December 31, 1990 . \n \n “(8) (A)  The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to any bond to which section 629(a)(1) of the Tax Reform Act of 1984 [ section 629(a)(1) of Pub. L. 98–369 , set out as a note under  section 103 of this title ] applies, but such bond shall be treated as a private activity bond for purposes of section 146 of the 1986 Code and as having a carryforward purpose described in section 146(f)(5) of such Code. \n \n “(B)  Section 629 of the Tax Reform Act of 1984 [ section 629 of Pub. L. 98–369 , set out as a note under  section 103 of this title ] is amended— “(i)  in subsection (c)(2), by striking out ‘$625,000,000’ and inserting in lieu thereof ‘$911,000,000’, \n \n “(ii)  in subsection (c)(3), by adding at the end thereof the following new subparagraphs: “\u202f‘(D) Improvements to existing generating facilities. \n “\u202f‘(E) Transmission lines. \n “\u202f‘(F) Electric generating facilities.’, and \n \n \n “(iii)  in subsection (a), by adding at the end thereof the following new sentence: ‘The preceding sentence shall be applied by inserting “and a rural electric cooperative utility” after “regulated public utility” but only if not more than 1 percent of the load of the public power authority is sold to such rural electric cooperative utility.’ \n \n \n \n \n “(h)   Certain Pollution Bonds .— Any bond which is treated as described in section 103(b)(4)(F) of the 1954 Code by reason of section 13209 of the Consolidated Omnibus Budget Reconciliation Act of 1985 [ Pub. L. 99–272, title XIII, §\u202f13209 ,  Apr. 7, 1986 ,  100 Stat. 322 ] shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code, and section 147(d) of the 1986 Code shall not apply to such bond. \n \n “(i)   Transition Rule for Aggregate Limit per Taxpayer .— For purposes of section 144(a)(10) of the 1986 Code, tax increment bonds described in section 1869(c)(3) of this Act [set out as a note under  section 103 of this title ] which are issued before  August 16, 1986 , shall not be taken into account under subparagraph (B)(ii) thereof. \n \n “(j)   Extension of Advance Refunding Exception for Qualified Public Facility .— Paragraph (4) of section 631(c) of the Tax Reform Act of 1984 [ section 631(c)(4) of Pub. L. 98–369 , set out as a note under  section 103 of this title ] is amended— “(1)  by striking out ‘or the Dade County, Florida, airport’ in the last sentence, and \n \n “(2)  by adding at the end thereof the following new sentence: ‘In the case of refunding obligations not to exceed $100,000,000 issued after  October 21, 1986 , by Dade County, Florida, for the purpose of advance refunding its Aviation Revenue Bonds (Series J), the first sentence of this paragraph shall be applied by substituting “the date which is 1 year after the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988” [ Nov. 10, 1988 ] for “ December 31, 1984 ” and the amendments made by section 1301 of the Tax Reform Act of 1986 shall not apply.’ \n \n \n “(k)   Expansion of Exception for River Place Project .— Section 1104 of the Mortgage Subsidy Bond Tax Act of 1980 [ section 1104 of Pub. L. 96–499 , formerly set out as a note under  section 103A of this title ], as added by the Tax Reform Act of 1984, is amended— “(1)  by striking out ‘ December 31, 1984 ,’ in subsection (p) and inserting in lieu thereof ‘ December 31, 1984  (other than obligations described in subsection (r)(1)),’, and \n \n “(2)  by striking out ‘$55,000,000,’ in subsection (r)(1)(B) and inserting in lieu thereof ‘$110,000,000 of which no more than $55,000,000 shall be outstanding later than  November 1, 1987 ’. \n \n \n \n “SEC. 1317.  TRANSITIONAL RULES FOR SPECIFIC FACILITIES. “(1)   Docks and wharves .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide any dock or wharf (within the meaning of section 103(b)(4)(D) of the 1954 Code) shall be treated as an exempt facility bond (for a facility described in section 142(a)(2) of the 1986 Code) for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such dock or wharf is described in any of the following subparagraphs: “(A)  A dock or wharf is described in this subparagraph if— “(i)  the issue to finance such dock or wharf was approved by official city action on  September 3, 1985 , and by voters on  November 5, 1985 , and \n \n “(ii)  such dock or wharf is for a slack water harbor with respect to which a Corps of Engineers grant of approximately $2,000,000 has been made under section 107 of the Rivers and Harbors Act [ 33 U.S.C. 577 ]. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $2,500,000. \n \n “(B)  A dock or wharf is described in this subparagraph if— “(i)  inducement resolutions were adopted on  May 23, 1985 ,  September 18, 1985 , and  September 24, 1985 , for the issuance of the bonds to finance such dock or wharf, \n \n “(ii)  a harbor dredging contract with respect thereto was entered into on  August 2, 1985 , and \n \n “(iii)  a construction management and joint venture agreement with respect thereto was entered into on  October 1, 1984 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $625,000,000. \n \n “(C)  A facility is described in this subparagraph if— “(i)  the legislature first authorized on  June 29, 1981 , the State agency issuing the bond to issue at least $30,000,000 of bonds, \n \n “(ii)  the developer of the facility was selected on  April 26, 1985 , and \n \n “(iii)  an inducement resolution for the issuance of such issue was adopted on  October 9, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. \n \n “(D)  A facility is described in this subparagraph if— “(i)  an inducement resolution was adopted on  October 17, 1985 , for such issue, and \n \n “(ii)  the city council for the city in which the facility is to be located approved on  July 30, 1985 , an application for an urban development action grant with respect to such facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $36,500,000. A facility shall be treated as described in this subparagraph if it would be so described if ‘90 percent’ were substituted for ‘95 percent’ in the material preceding subparagraph (A) of this paragraph. \n \n \n “(2)   Pollution control facilities .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide air or water pollution control facilities (within the meaning of section 103(b)(4)(F) of the 1954 Code) shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facility is described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if— “(i)  inducement resolutions with respect to such facility were adopted on  September 23, 1974 , and on  April 5, 1985 , \n \n “(ii)  a bond resolution for such facility was adopted on  September 6, 1985 , and \n \n “(iii)  the issuance of the bonds to finance such facility was delayed by action of the Securities and Exchange Commission (file number 70–7127). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $120,000,000. \n \n “(B)  A facility is described in this subparagraph if— “(i)  there was an inducement resolution for such facility on  November 19, 1985 , and \n \n “(ii)  design and engineering studies for such facility were completed in March of 1985. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $25,000,000. \n \n “(C)  A facility is described in this subparagraph if— “(i)  a resolution was adopted by the county board of supervisors pertaining to an issuance of bonds with respect to such facility on  April 10, 1974 , and \n \n “(ii)  such facility was placed in service on  June 12, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $90,000,000. For purposes of this subparagraph, a pollution control facility includes a sewage or solid waste disposal facility (within the meaning of section 103(b)(4)(E) of the 1954 Code). \n \n “(D)  A facility is described in this subparagraph if— “(i)  the issuance of the bonds for such facility was approved by a State agency on  August 22, 1979 , and \n \n “(ii)  the authority to issue such bonds was scheduled to expire (under terms of the State approval) on  August 22, 1989 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $198,000,000. \n \n “(E)  A facility is described in this subparagraph if— “(i)  such facility is 1 of 4 such facilities in 4 States with respect to which the Ball Corporation transmitted a letter of intent to purchase such facilities on  February 26, 1986 , and \n \n “(ii)  inducement resolutions were issued on  December 30, 1985 ,  January 15, 1986 ,  January 22, 1986 , and  March 17, 1986  with respect to bond issuance in the 4 respective States. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $6,000,000. \n \n “(F)  A facility is described in this subparagraph if— “(i)  inducement resolutions for bonds with respect to such facility were adopted on  September 27, 1977 ,  May 27, 1980 , and  October 8, 1981 , and \n \n “(ii)  such facility is located at a geothermal power complex owned and operated by a single investor-owned utility. \n \n\n For purposes of this subparagraph and section 103 of the 1986 Code, all hydrogen sulfide air and water pollution control equipment, together with functionally related and subordinate equipment and structures, located or to be located at such power complex shall be treated as a single pollution control facility. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $600,000,000. \n \n “(G)  A facility is described in this subparagraph if— “(i)  such facility is an air pollution control facility approved by a State bureau of pollution control on  July 10, 1986 , and by a State board of economic development on  July 17, 1986 , and \n \n “(ii)  on  August 15, 1986 , the State bond attorney gave notice to the clerk to initiate validation proceedings with respect to such issue and on  August 28, 1986 , the validation decree was entered. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $900,000. \n \n “(I)  A facility is described in this subparagraph if— “(i)  a private company met with a State air control board on  November 14, 1985 , to propose construction of a sulften unit, and \n \n “(ii)  the sulften unit is being constructed under a letter of intent to construct which was signed on  April 8, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $11,000,000. \n \n “(J)  A facility is described in this subparagraph if it is part of a 250 megawatt coal-fired electric plant in northeastern Nevada on which the Sierra Pacific Power Company, a subsidiary of Sierra Pacific Resources, began in 1980 work to design, finance, construct, and operate. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. \n \n “(K)  A facility is described in this subparagraph if— “(i)  there was an inducement resolution adopted by a State industrial development authority on  January 14, 1976 , and \n \n “(ii)  such facility is named in a resolution of such authority relating to carryforward of the State’s unused 1985 private activity bond limit passed by such industrial development authority on  December 18, 1985 . \n \n\n This subparagraph shall apply only to obligations issued at the request of the party pursuant to whose request the  January 14, 1976 , inducement was given. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(L)  A facility is described in this subparagraph if a city council passed an ordinance (ordinance number 4626) agreeing to issue bonds for such project,  December 16, 1985 . The aggregate face amount of obligations to which this subparagraph applies shall not exceed $45,000,000. \n \n \n “(3)   Sports facilities .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide sports facilities (within the meaning of section 103(b)(4)(B) of the 1954 Code) shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facilities are described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if it is a stadium— “(i)  which was the subject of a city ordinance passed on  September 23, 1985 , \n \n “(ii)  for which a loan of approximately $4,000,000 for land acquisition was approved on  October 28, 1985 , by the State Controlling Board, and \n \n “(iii)  a stadium operating corporation with respect to which was incorporated on  March 20, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. \n \n “(B)  A facility is described in this subparagraph if— “(i)  it is a stadium with respect to which a lease agreement for the ground on which the stadium is to be built was entered into between a county and the stadium corporation for such stadium on  July 3, 1984 , \n \n “(ii)  there was a resolution approved on  November 14, 1984 , by an industrial development authority setting forth the terms under which the bonds to be issued to finance such stadium would be issued, and \n \n “(iii)  there was an agreement for consultant and engineering services for such stadium entered into on  September 28, 1984 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $90,000,000. \n \n “(C)  A facility is described in this subparagraph if— “(i)  it is one or more stadiums to be used either by an American League baseball team or a National Football League team currently using a stadium in a city having a population in excess of 2,500,000 and described in section 146(d)(3) of the 1986 Code, \n \n “(ii)  the bonds to be used to provide financing for one or more such stadiums are issued by a political subdivision or a State agency pursuant to a resolution approving an inducement resolution adopted by a State agency on  November 20, 1985 , as it may be amended (whether or not the beneficiaries of such issue or issues are the beneficiaries (if any) specified in such inducement resolution and whether or not the number of such stadiums and the locations thereof are as specified in such inducement resolution) or pursuant to P.A. 84–1470 of the State in which such city is located (and by an agency created thereby), and \n \n “(iii)  such stadium or stadiums are located in the city described in (i). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $250,000,000. In the case of any carryforward of volume cap for one or more stadiums described in the first sentence of this subparagraph, such carryforward shall be valid with respect to bonds issued for such stadiums notwithstanding any other provision of the 1986 Code or the 1954 Code, and whether or not (i) there is a change in the number of stadiums or the beneficiaries or sites of the stadium or stadiums and (ii) the bonds are issued by either of the state agencies described in the first sentence of this subparagraph. \n \n “(D)  A facility is described in this subparagraph if— “(i)  such facility is a stadium or sports arena for Memphis, Tennessee, \n \n “(ii)  there was an inducement resolution adopted on  November 12, 1985 , for the issuance of bonds to expand or renovate an existing stadium and sports arena and/or to construct a new arena, and \n \n “(iii)  the city council for such city adopted a resolution on  April 19, 1983 , to include funds in the capital budget of the city for such facility or facilities. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $35,000,000. \n \n “(E)  A facility is described in this subparagraph if such facility is a baseball stadium located in Bergen, Essex, Union, Middlesex, or Hudson County, New Jersey with respect to which governmental action occurred on  November 7, 1985 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. \n \n “(F)  A facility is described in this subparagraph if— “(i)  it is a facility with respect to which— “(I)  an inducement resolution dated  December 24, 1985 , was adopted by the county industrial development authority, \n \n “(II)  a public hearing of the county industrial development authority was held on  February 6, 1986 , regarding such facility, and \n \n “(III)  a contract was entered into by the county, dated  February 19, 1986 , for engineering services for a highway improvement in connection with such project, or \n \n \n “(ii)  it is a domed football stadium adjacent to Cervantes Convention Center in St. Louis, Missouri, with respect to which a proposal to evaluate market demand, financial operations, and economic impact was dated  May 9, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $175,000,000. \n \n “(G)  A project to provide a roof or dome for an existing sports facility is described in this subparagraph if— “(i)  in December 1984 the county sports complex authority filed a carryforward election under section 103(n) of the 1954 Code with respect to such project, \n \n “(ii)  in January 1985, the State authorized issuance of $30,000,000 in bonds in the next 3 years for such project, and \n \n “(iii)  an 11-member task force was appointed by the county executive in June 1985, to further study the feasibility of the project. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $30,000,000. \n \n “(H)  A sports facility renovation or expansion project is described in this subparagraph if— “(i)  an amendment to the sports team’s lease agreement for such facility was entered into on  May 23, 1985 , and \n \n “(ii)  the lease agreement had previously been amended in January 1976, on  July 6, 1984 , on  April 1, 1985 , and on  May 7, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $20,000,000. \n \n “(I)  A facility is described in this subparagraph if— “(i)  an appraisal for such facility was completed on  March 6, 1985 , \n \n “(ii)  an inducement resolution was adopted with respect to such facility on  June 7, 1985 , and \n \n “(iii)  a State bond commission granted preliminary approval for such project on  September 3, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $3,200,000. \n \n “(J)  A sports facility renovation or expansion project is described in this subparagraph if— “(i)  such facility is a domed stadium which commenced operations in 1965, \n \n “(ii)  such facility has been the subject of an ongoing construction, expansion, or renovation program of planned improvements, \n \n “(iii)  part 1 of such improvements began in 1982 with a preliminary renovation program financed by tax-exempt bonds, \n \n “(iv)  part 2 of such program was previously scheduled for a bond election on  February 25, 1986 , pursuant to a Commissioners Court Order of  November 5, 1985 , and \n \n “(v)  the bond election for improvements to such facility was subsequently postponed on  December 10, 1985 , in order to provide for more comprehensive construction planning. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(K)  A facility is described in this subparagraph if— “(i)  the 1985 State legislature appropriated a maximum sum of $22,500,000 to the State urban development corporation to be made available for such project, and \n \n “(ii)  a development and operation agreement was entered into among such corporation, the city, the State budget director, and the county industrial development agency, as of  March 1, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $28,000,000. \n \n “(L)  A facility is described in this subparagraph if— “(i)  it is to consist of 1 or 2 stadiums appropriate for football games and baseball games with related structures and facilities, \n \n “(ii)  governmental action was taken on  August 7, 1985 , by the county commission, and on  December 19, 1985 , by the city council, concerning such facility, and \n \n “(iii)  such facility is located in a city having a National League baseball team. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. \n \n “(M)  A facility is described in this subparagraph if— “(i)  such facility consists of 1 or 2 stadium projects (1 of which may be a stadium renovation or expansion project) with related structures and facilities, \n \n “(ii)  a special advisory commission commissioned a study by a national accounting firm with respect to a project for such facility, which study was released in September 1985, and recommended construction of either a new multipurpose or a new baseball-only stadium, \n \n “(iii)  a nationally recognized design and architectural firm released a feasibility study with respect to such project in April 1985, and \n \n “(iv)  the metropolitan area in which the facility is located is presently the home of an American League baseball team. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. \n \n “(N)  A facility is described in this subparagraph if— “(i)  it is to consist of 1 or 2 stadiums appropriate for football games and baseball games with related structures and facilities, \n \n “(ii)  the site for such facility was approved by the council of the city in which such facility is to be located on  July 9, 1985 , and \n \n “(iii)  the request for proposals process was authorized by the council of the city in which such facility is to be located on  November 5, 1985 , and such requests were distributed to potential developers on  November 15, 1985 , with responses due by  February 14, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. \n \n “(O)  A facility is described in this subparagraph if— “(i)  such facility is described in a feasibility study dated September 1985, and \n \n “(ii)  resolutions were adopted or other actions taken on  February 21, 1985 ,  July 18, 1985 ,  August 8, 1985 ,  October 17, 1985 , and  November 7, 1985 , by the Board of Supervisors of the county in which such facility will be located with respect to such feasibility study, appropriations to obtain land for such facility, and approving the location of such facility in the county. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $20,000,000. \n \n “(P)  A facility is described in this subparagraph if such facility constructed on a site acquired with the sale of revenue bonds authorized by a city council on  December 2, 1985 , (Ordinances No. 669 and 670, series 1985). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $90,000,000. \n \n “(Q)  A facility is described in this subparagraph if— “(i)  resolutions were adopted approving a ground lease dated  June 27, 1983 , by a sports authority (created by a State legislature) with respect to the land on which the facility will be erected, \n \n “(ii)  such facility is described in a market study dated  June 13, 1983 , and \n \n “(iii)  such facility was the subject of an Act of the State legislature which was signed on  July 1, 1983 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $81,000,000. \n \n “(R)  A facility is described in this subparagraph if such facility is a baseball stadium and adjacent parking facilities with respect to which a city made a carryforward election of $52,514,000 on  February 25, 1985 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $50,000,000. \n \n “(S)  A facility is described in this subparagraph if— “(i)  such facility is to be used by both a National Hockey League team and a National Basketball Association team, \n \n “(ii)  such facility is to be constructed on a platform using air rights over land acquired by a State authority and identified as site B in a report dated  May 30, 1984 , prepared for a State urban development corporation, and \n \n “(iii)  such facility is eligible for real property tax (and power and energy) benefits pursuant to State legislation approved and effective as of  July 7, 1982 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $225,000,000. \n \n “(T)  A facility is described in this subparagraph if— “(i)  a resolution authorizing the financing of the facility through an issuance of revenue bonds was adopted by the City Commission on  August 5, 1986 , and \n \n “(ii)  the metropolitan area in which the facility is to be located is currently the spring training home of an American league baseball team located during the regular season in a city described in subparagraph (C). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(U)  A facility is described in this subparagraph if it is a football stadium located in Oakland, California, with respect to which a design was completed by a nationally recognized architectural firm for a stadium seating approximately 72,000, to be located on property adjacent to an existing coliseum complex, or is a renovation of an existing stadium located in Oakland, California, and used by an American League baseball team. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $100,000,000. \n \n “(V)  A facility is described in this subparagraph if it is a sports arena (and related parking facility) for Grand Rapids, Michigan. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $80,000,000. \n \n “(W)  A facility is described in this subparagraph if such facility is located adjacent to the Anacostia River in the District of Columbia. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $25,000,000. \n \n “(X)  A facility is described in this subparagraph if it is a spectator sports facility for the City of San Antonio, Texas. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $125,000,000. \n \n “(Y)  A facility is described in this subparagraph if it will be part of, or adjacent to, an existing stadium which has been owned and operated by a State university and if— “(i)  the stadium was the subject of a feasibility report by a certified public accounting firm which is dated  December 28, 1984 , and \n \n “(ii)  a report by an independent research organization was prepared in December 1985 demonstrating support among donors and season ticket holders for the addition of a dome to the stadium. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $50,000,000. \n \n “(Z)  A facility is described in this subparagraph if— “(i)  such facility was a redevelopment project that was approved in concept by the city council sitting as the redevelopment agency in October 1984, and \n \n “(ii)  $20,000,000 in funds for such facility was identified in a 5-year budget approved by the city redevelopment agency on  October 25, 1984 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $80,000,000. \n \n \n “(4)   Residential rental property .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to finance a residential rental project within the meaning of section 103(b)(4) of the 1954 Code shall be treated as an exempt facility bond within the meaning of section 142(a)(7) of the 1986 Code if the facility with respect to the bond is issued satisfies all low-income occupancy requirements applicable to such bonds before  August 15, 1986 , and the bonds are issued pursuant to— “(A)  a contract to purchase such property dated  August 12, 1985 ; \n \n “(B)  the county housing authority approved the property and the financing thereof on  September 24, 1985 , and \n \n “(C)  there was an inducement resolution adopted on  October 10, 1985 , by the county industrial development authority. \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $25,400,000. \n \n “(5)   Airports .— A bond issued as a part of an issue 95 percent or more of the net proceeds of which are to be used to provide an airport (within the meaning of section 103(b)(4)(D) of the 1954 Code) shall be treated as an exempt facility bond (for facilities described in section 142(a)(1) of the 1986 Code) for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if the facility is described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if such facility is a hotel at an airport facility serving a city described in section 631(a)(3) of the Tax Reform Act of 1984 [ section 631(a)(3) of Pub. L. 98–369 , set out as a note under  section 103 of this title ] (relating to certain bonds for a convention center and resource recovery project). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $40,000,000. \n \n “(B)  A facility is described in this subparagraph if such facility is the primary airport for a city described in paragraph (3)(C). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $500,000,000. Section 148(d)(2) of the 1986 Code shall not apply to any issue to which this subparagraph applies. A facility shall be described in this subparagraph if it would be so described if ‘90 percent’ were substituted for ‘95 percent’ in the material preceding subparagraph (A). \n \n “(C)  A facility is described in this subparagraph if such facility is a hotel at Logan airport and such hotel is located on land leased from a State authority under a lease contemplating development of such hotel dated  May 1, 1983 , or under an amendment, renewal, or extension of such a lease. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $40,000,000. \n \n “(D)  A facility is described in this subparagraph if such facility is the airport for the County of Sacramento, California. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. \n \n \n “(6)   Redevelopment projects .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to finance redevelopment activities as part of a project within a specific designated area shall be treated as a qualified redevelopment bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such project is described in any of the following subparagraphs: “(A)  A project is described in this subparagraph if it was the subject of a city ordinance numbered 82–115 and adopted on  December 2, 1982 , or numbered 9590 and adopted on  April 6, 1983 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $9,000,000. \n \n “(B)  A project is described in this subparagraph if it is a redevelopment project for an area in a city described in paragraph (3)(C) which was designated as commercially blighted on  November 14, 1975 , by the city council and the redevelopment plan for which will be approved by the city council before  January 31, 1987 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $20,000,000. \n \n “(C)  A project is described in this subparagraph if it is a redevelopment project for an area in a city described in paragraph (3)(C) which was designated as commercially blighted on  March 28, 1979 , by the city council and the redevelopment plan for which was approved by the city council on  June 20, 1984 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $100,000,000. \n \n “(D)  A project is described in this subparagraph if it is any one of three redevelopment projects in areas in a city described in paragraph (3)(C) designated as blighted by a city council before  January 31, 1987  and with respect to which the redevelopment plan is approved by the city council before  January 31, 1987 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $20,000,000. \n \n “(E)  A project is described in this subparagraph if such project is for public improvements (including street reconstruction and improvement of underground utilities) for Great Falls, Montana, with respect to which engineering estimates are due on  October 1, 1986 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $3,000,000. \n \n “(F)  A project is described in this subparagraph if— “(i)  such project is located in an area designated as blighted by the governing body of the city on  February 15, 1983  (Resolution No. 4573), and \n \n “(ii)  such project is developed pursuant to a redevelopment plan adopted by the governing body of the city on  March 1, 1983  (Ordinance No. 15073). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $5,000,000. \n \n “(G)  A project is described in this subparagraph if— “(i)  such project is located in an area designated by the governing body of the city in 1983, \n \n “(ii)  such project is described in a letter dated  August 8, 1985 , from the developer’s legal counsel to the development agency of the city, and \n \n “(iii)  such project consists primarily of retail facilities to be built by the developer named in a resolution of the governing body of the city on  August 30, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(H)  A project is described in this subparagraph if— “(i)  such project is a project for research and development facilities to be used primarily to benefit a State university and related hospital, with respect to which an urban renewal district was created by the city council effective  October 11, 1985 , and \n \n “(ii)  such project was announced by the university and the city in March 1985. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $40,000,000. \n \n “(I)  A project is described in this subparagraph if such project is a downtown redevelopment project with respect to which— “(i)  an urban development action grant was made, but only if such grant was preliminarily approved on  November 3, 1983 , and received final approval before  June 1, 1984 , and \n \n “(ii)  the issuer of bonds with respect to such facility adopted a resolution indicating the issuer’s intent to adopt such redevelopment project on  October 6, 1981 , and the issuer adopted an ordinance adopting such redevelopment project on  December 13, 1983 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(J)  A project is described in this subparagraph if— “(i)  with respect to such project the city council adopted on  December 16, 1985 , an ordinance directing the urban renewal authority to study blight and produce an urban renewal plan, \n \n “(ii)  the blight survey was accepted and approved by the urban renewal authority on  March 20, 1986 , and \n \n “(iii)  the city planning board approved the urban renewal plan on  May 7, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(K)  A project is described in this subparagraph if— “(i)  the city redevelopment agency approved resolutions authorizing issuance of land acquisition and public improvements bonds with respect to such project on  August 8, 1978 , \n \n “(ii)  such resolutions were later amended in June 1979, and \n \n “(iii)  the State Supreme Court upheld a lower court decree validating the bonds on  December 11, 1980 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $380,000,000. \n \n “(L)  A project is described in this subparagraph if it is a mixed use redevelopment project either— “(i)  in an area (known as the Near South Development Area) with respect to which the planning department of a city described in paragraph 3(C) promulgated a draft development plan dated March 1986, and which was the subject of public hearings held by a subcommittee of the plan commission of such city on  May 28, 1986 , and  June 10, 1986 , or \n \n “(ii)  in an area located within the boundaries of any 1 or more census tracts which are directly adjacent to a river whose course runs through such city. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(M)  A project is described in this subparagraph if it is a redevelopment project for an area in a city described in paragraph 3(C) and such area— “(i)  was the subject of a report released in May 1986, prepared by the National Park Service, and \n \n “(ii)  was the subject of a report released January 1986, prepared by a task force appointed by the Mayor of such city. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(N)  A project is described in this subparagraph if it is a city-university redevelopment project approved by a city ordinance No. 152–0–84 and the development plan for which was adopted on  January 28, 1985 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $23,760,000. \n \n “(O)  A project is described in this subparagraph if— “(i)  an inducement resolution was passed on  March 9, 1984 , for issuance of bonds with respect to such project, \n \n “(ii)  such resolution was extended by resolutions passed on  August 14, 1984 ,  April 2, 1985 ,  August 13, 1985 , and  July 8, 1986 , \n \n “(iii)  an urban development action grant was preliminarily approved for part or all of such project on  July 3, 1986 , and \n \n “(iv)  the project is located in a district designated as the Peabody-Gayoso District. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $140,000,000. \n \n “(P)  A project is described in this subparagraph if the project is a 1-block area of a central business district containing a YMCA building with respect to which— “(i)  the city council adopted a resolution expressing an intent to issue bonds for the project on  September 27, 1985 , \n \n “(ii)  the city council approved project guidelines for the project on  December 20, 1985 , and \n \n “(iii)  the city council by resolution (adopted on  July 30, 1986 ) directed completion of a development agreement. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $26,000,000. \n \n “(Q)  A project is described in this subparagraph if the project is a 2-block area of a central business district designated as blocks E and F with respect to which— “(i)  the city council adopted guidelines and criteria and authorized a request for development proposals on  July 22, 1985 , \n \n “(ii)  the city council adopted a resolution expressing an intent to issue bonds for the project on  September 27, 1985 , and \n \n “(iii)  the city issued requests for development proposals on  March 28, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $47,000,000. \n \n “(R)  A project is described in this subparagraph if the project is an urban renewal project covering approximately 5.9 acres of land in the Shaw area of the northwest section of the District of Columbia and the 1st portion of such project was the subject of a District of Columbia public hearing on  June 2, 1986 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(S)  A project is described in this subparagraph if such project is a hotel, commercial, and residential project on the east bank of the Grand River in Grand Rapids, Michigan, with respect to which a developer was selected by the city in June 1985 and a planning agreement was executed in August 1985. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $39,000,000. \n \n “(T)  A project is described in this subparagraph if such project is the Wurzburg Block Redevelopment Project in Grand Rapids, Michigan. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(U)  A project is described in this subparagraph if such project is consistent with an urban renewal plan adopted or ordered prepared before  August 28, 1986 , by the city council of the most populous city in a state which entered the Union on  February 14, 1859 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $83,000,000. \n \n “(V)  A project is described in this subparagraph if such project is consistent with an urban renewal plan which was adopted (or ordered prepared) before  August 13, 1985 , by an appropriate jurisdiction of a state which entered the Union on  February 14, 1859 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $135,000,000 and the limitation on the period during which bonds under this section may be issued shall not apply to such bonds. \n \n “(W)  A project is described in this subparagraph if such project is— “(i)  a part of the Kenosha Downtown Redevelopment project, and \n \n “(ii)  located in an area bounded— “(I)  on the east by the east wall of the Army Corps of Engineers Confined Disposal Facility (extended), \n \n “(II)  on the north by 48th Street (extended), \n \n “(III)  on the west by the present Chicago & Northwestern Railroad tracks, and \n \n “(IV)  on the south by the north line of Eichelman Park (60th Street) (extended). \n \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $105,000,000. \n \n “(X)  A project is described in this subparagraph if a redevelopment plan for such project was approved by the city council of Bell Gardens, California, on  June 12, 1979 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(Y)  Nothing in this paragraph shall be construed as having the effect of exempting from tax interest on any bond issued after  June 10, 1987 , if such interest would not have been exempt from tax were such bond issued on  August 15, 1986 . \n \n “(Z)  Any designated area with respect to which a project is described in any subparagraph of this paragraph shall be taken into account in applying section 144(c)(4)(C) of the 1986 Code in determining whether other areas (not so described) may be designated. \n \n \n “(7)   Convention centers .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide any convention or trade show facility (within the meaning of section 103(b)(4)(C) of the 1954 Code) shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facility is described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if— “(i)  a feasibility consultant and a design consultant were hired on  April 3, 1985 , with respect to such facility, and \n \n “(ii)  a draft feasibility report with respect to such facility was presented on  November 3, 1985 , to the Mayor of the city in which such facility is to be located. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $190,000,000. For purposes of this subparagraph, not more than $20,000,000 of bonds issued to advance refund existing convention facility bonds sold on  May 12, 1978 , shall be treated as bonds described in this subparagraph and [former] section 149(d)(2) of the 1986 Code shall not apply to bonds so treated. \n \n “(B)  A facility is described in this subparagraph if— “(i)  an application for a State loan for such facility was approved by the city council on  March 4, 1985 , and \n \n “(ii)  the city council of the city in which such facility is to be located approved on  March 25, 1985 , an application for an urban development action grant. \n \n\n The aggregate face amount of bonds which this subparagraph applies shall not exceed $10,000,000. \n \n “(C)  A facility is described in this subparagraph if— “(i)  on  November 1, 1983 , a convention development tax took effect and was dedicated to financing such facility, \n \n “(ii)  the State supreme court of the State in which the facility is to be located validated such tax on  February 8, 1985 , and \n \n “(iii)  an agreement was entered into on  November 14, 1985 , between the city and county in which such facility is to be located on the terms of the bonds to be issued with respect to such facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $66,000,000. \n \n “(D)  A facility is described in this subparagraph if— “(i)  it is a convention, trade, or spectator facility, \n \n “(ii)  a regional convention, trade, and spectator facilities study committee was created before  March 19, 1985 , with respect to such facility, and \n \n “(iii)  feasibility and preliminary design consultants were hired on  May 1, 1985 , and  October 31, 1985 , with respect to such facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed the excess of $175,000,000 over the amount of bonds to which paragraph (48)(B) applies. \n \n “(E)  A facility is described in this subparagraph if— “(i)  such facility is meeting rooms for a convention center, and \n \n “(ii)  resolutions and ordinances were adopted with respect to such meeting rooms on  January 17, 1983 ,  July 11, 1983 ,  December 17, 1984 , and  September 23, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(F)  A facility is described in this subparagraph if it is an international trade center which is part of the 125th Street redevelopment project in New York, New York. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $165,000,000. \n \n “(G)  A facility is described in this subparagraph if— “(i)  such facility is located in a city which was the subject of a convention center market analysis or study dated March 1983, and prepared by a nationally recognized accounting firm, \n \n “(ii)  such facility’s location was approved in December 1985 by a task force created jointly by the Governor of the State within which such facility will be located and the mayor of the capital city of such State, and \n \n “(iii)  the size of such facility is not more than 200,000 square feet. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $70,000,000. \n \n “(H)  A facility is described in this subparagraph if an analysis of operations and recommendations of utilization of such facility was prepared by a certified public accounting firm pursuant to an engagement authorized on  March 6, 1984 , and presented on  June 11, 1984 , to officials of the city in which such facility is located. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(I)  A facility is described in this subparagraph if— “(i)  voters approved a bond issue to finance the acquisition of the site for such facility on  May 4, 1985 , \n \n “(ii)  title of the property was transferred from the Illinois Center Gulf Railroad to the city on  September 30, 1985 , and \n \n “(iii)  a United States judge rendered a decision regarding the fair market value of the site of such facility on  December 30, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $131,000,000. \n \n “(J)  A facility is described in this subparagraph if— “(i)  such facility is to be used for an annual aquafestival, \n \n “(ii)  a referendum was held on  April 6, 1985 , in which voters permitted the city council to lease 130 acres of dedicated parkland for the purpose of constructing such facility, and \n \n “(iii)  the city council passed an inducement resolution on  June 19, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(K)  A facility is described in this subparagraph if— “(i)  voters approved a bond issued to finance a portion of the cost of such facility on  December 1, 1984 , and \n \n “(ii)  such facility was the subject of a market study and financial projections dated  March 21, 1986 , prepared by a nationally recognized accounting firm. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $5,000,000. \n \n “(L)  A facility is described in this subparagraph if— “(i)  on  July 12, 1984 , the city council passed a resolution increasing the local hotel and motel tax to 7 percent to assist in paying for such facility, \n \n “(ii)  on  October 25, 1984 , the city council selected a consulting firm for such facility, and \n \n “(iii)  with respect to such facility, the city council appropriated funds for additional work on  February 7, 1985 ,  October 3, 1985 , and  June 26, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $120,000,000. \n \n “(M)  A facility is described in this subparagraph if— “(i)  a board of county commissioners, in an action dated  January 21, 1986 , supported an application for official approval of the facility, and \n \n “(ii)  the State economic development commission adopted a resolution dated  February 25, 1986 , determining the facility to be an eligible facility pursuant to State law and the rules adopted by the commission. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $7,500,000. \n \n \n “(8)   Sports or convention facilities .— A bond issued as a part of an issue 95 percent or more of the net proceeds of which are to be used to provide either a sports facility (within the meaning of section 103(b)(4)(B) of the 1954 Code) or a convention facility (within the meaning of section 103(b)(4)(C) of the 1954 Code) shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facility is described in any of the following subparagraphs: “(A)  A combined convention and arena facility, or any part thereof (whether on the same or different sites), is described in this subparagraph if— “(i)  bonds for the expansion, acquisition, or construction of such combined facility are payable from a tax and are issued under a plan initially approved by the voters of the taxing authority on  April 25, 1978 , and \n \n “(ii)  such bonds were authorized for expanding a convention center, for acquiring an arena site, and for building an arena or any of the foregoing pursuant to a resolution adopted by the governing body of the bond issuer on  March 17, 1986 , and superseded by a resolution adopted by such governing body on  May 27, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $160,000,000. \n \n “(B)  A sports or convention facility is described in this subparagraph if— “(i)  on  March 4, 1986 , county commissioners held public hearings on creation of a county convention facilities authority, and \n \n “(ii)  on  March 7, 1986 , the county commissioners voted to create a county convention facilities authority and to submit to county voters a ½ cent sales and use tax to finance such facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. \n \n “(C)  A sports or convention facility is described in this subparagraph if— “(i)  a feasibility consultant and a design consultant were hired prior to October 1980 with respect to such facility, \n \n “(ii)  a feasibility report dated October 1980 with respect to such facility was presented to a city or county in which such facility is to be located, and \n \n “(iii)  on  September 7, 1982 , a joint city/county resolution appointed a committee which was charged with the task of independently reviewing the studies and present need for the facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(D)  A sports or convention facility is described in this subparagraph if— “(i)  such facility is a multipurpose coliseum facility for which, before  January 1, 1985 , a city, an auditorium district created by the State legislature within which such facility will be located, and a limited partnership executed an enforceable contract, \n \n “(ii)  significant governmental action regarding such facility was taken before  May 23, 1983 , and \n \n “(iii)  inducement resolutions were passed for issuance of bonds with respect to such facility on  May 26, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $25,000,000. \n \n \n “(9)   Parking facilities .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide a parking facility (within the meaning of section 103(b)(4)(D) of the 1954 Code) shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facility is described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if— “(i)  there was an inducement resolution on  March 9, 1984 , for the issuance of bonds with respect to such facility, and \n \n “(ii)  such resolution was extended by resolutions passed on  August 14, 1984 ,  April 2, 1985 ,  August 13, 1985 , and  July 8, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $30,000,000. \n \n “(B)  A facility is described in this subparagraph if— “(i)  such facility is for a university medical school, \n \n “(ii)  the last parcel of land necessary for such facility was purchased on  February 4, 1985 , and \n \n “(iii)  the amount of bonds to be issued with respect to such facility was increased by the State legislature of the State in which the facility is to be located as part of its 1983–1984 general appropriations act. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $9,000,000. \n \n “(C)  A facility is described in this subparagraph if— “(i)  the development agreement with respect to the project of which such facility is a part was entered into during May 1984, and \n \n “(ii)  an inducement resolution was passed on  October 9, 1985 , for the issuance of bonds with respect to the facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $35,000,000. \n \n “(D)  A facility is described in this subparagraph if the city council approved a resolution of intent to issue tax-exempt bonds (Resolution 34083) for such facility on  April 30, 1986 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $8,000,000. Solely for purposes of this subparagraph, a heliport constructed as part of such facility shall be deemed to be functionally related and subordinate to such facility. \n \n “(E)  A facility is described in this subparagraph if— “(i)  resolutions were adopted by a public joint powers authority relating to such facility on  March 6, 1985 ,  May 1, 1985 ,  October 2, 1985 ,  December 4, 1985 , and  February 5, 1986 ; and \n \n “(ii)  such facility is to be located at an exposition park which includes a coliseum and sports arena. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. \n \n “(F)  A facility is described in this subparagraph if— “(i)  it is to be constructed as part of an overall development that is the subject of a development agreement dated  October 1, 1983 , between a developer and an organization described in section 501(c)(3) of the 1986 Code, and \n \n “(ii)  an environmental notification form with respect to the overall development was filed with a State environmental agency on  February 28, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(G)  A facility is described in this subparagraph if— “(i)  an inducement resolution was passed by the city redevelopment agency on  December 3, 1984 , and a resolution to carryforward the private activity bond limit was passed by such agency on  December 21, 1984 , with respect to such facility, and \n \n “(ii)  the owner participation agreement with respect to such facility was entered into on  July 30, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $18,000,000. \n \n “(H)  A facility is described in this subparagraph if— “(i)  an application (dated  August 28, 1986 ) for financial assistance was submitted to the county industrial development agency with respect to such facility, and \n \n “(ii)  the inducement resolution for such facility was passed by the industrial development agency on  September 10, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $8,000,000. \n \n “(I)  A facility is described in this subparagraph if— “(i)  it is located in a city the parking needs of which were comprehensively described in a ‘Downtown Parking Plan’ dated January 1983, and approved by the city’s City Plan Commission on  June 1, 1983 , and \n \n “(ii)  obligations with respect to the construction of which are issued on behalf of a State or local governmental unit by a corporation empowered to issue the same which was created by the legislative body of a State by an Act introduced on  May 21, 1985 , and thereafter passed, which Act became effective without the governor’s signature on  June 26, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $50,000,000. \n \n “(J)  A facility is described in this subparagraph if— “(i)  such facility is located in a city which was the subject of a convention center market analysis or study dated March 1983 and prepared by a nationally recognized accounting firm, \n \n “(ii)  such facility is intended for use by, among others, persons attending a convention center located within the same town or city, and \n \n “(iii)  such facility’s location was approved in December 1985 by a task force created jointly by the governor of the State within which such facility will be located and the mayor of the capital city of such State. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $30,000,000. \n \n “(K)  A facility is described in this subparagraph if— “(i)  scale and components for the facility were determined by a city downtown plan adopted  October 31, 1984  (resolution number 3882), and \n \n “(ii)  the site area for the facility is approximately 51,200 square feet. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $5,000,000. \n \n “(L)  A facility is described in this subparagraph if— “(i)  the property for such facility was offered for development by a city renewal agency on  March 19, 1986  (resolution number 920), and \n \n “(ii)  the site area for the facility is approximately 25,600 square feet. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $5,000,000. \n \n “(M)  A facility is described in this subparagraph if such facility was approved by official action of the city council on  July 26, 1984  (resolution number 33718), and is for the Moyer Theatre. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $8,000,000. \n \n “(N)  A facility is described in this subparagraph if it is part of a renovation project involving the Outlet Company building in Providence, Rhode Island. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $6,000,000. \n \n \n “(10)   Certain advance refundings.— “(A)  [Former] Section 149(d)(3) of the 1986 Code shall not apply to a bond issued by a State admitted to the Union on  November 16, 1907 , for the advance refunding of not more than $186,000,000 State turnpike obligations. \n \n “(B)  A refunding of the Charleston, West Virginia Town Center Garage Bonds shall not be treated for purposes of part IV of subchapter A of chapter 1 of the 1986 Code as an advance refunding if it would not be so treated if ‘100’ were substituted for ‘90’ in section 149(d)(5) [now 149(d)(2)] of such Code. \n \n \n “(11)   Principal user provisions.— “(A)  In the case of a bond issued as part of an issue the proceeds of which are to be used to provide a facility described in subparagraph (B) or (C), the determination of whether such bond is an exempt facility bond shall be made by substituting ‘90 percent’ for ‘95 percent’ in section 142(a) of the 1986 Code. \n \n “(B)  A facility is described in this subparagraph if— “(i)  it is a waste-to-energy project for which a contract for the sale of electricity was executed in September 1984, and \n \n “(ii)  the design, construction, and operation contract for such project was signed in March 1985 and the order to begin construction was issued on  March 31, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $29,100,000. \n \n “(C)  A facility is described in this subparagraph if it is described in section 1865(c)(2)(C) of this Act [set out as a note under  section 103 of this title ]. \n \n \n “(12)   Qualified scholarship funding bonds .— Subsections (d)(3) and (f) of section 148 of the 1986 Code shall not apply to any bond or series of bonds the proceeds of which are used exclusively to refund qualified scholarship funding bonds (as defined in section 150 of the 1986 Code) issued before  January 1, 1986 , if— “(A)  the amount of the refunding bonds does not exceed the aggregate face amount of the refunded bonds, \n \n “(B)  the maturity date of such refunding bond is not later than later of— “(i)  the maturity date of the bond to be refunded, or \n \n “(ii)  the date which is 15 years after the date on which the refunded bond was issued (or, in the case of a series of refundings, the date on which the original bond was issued), \n \n \n “(C)  the bonds to be refunded were issued by the California Student Loan Finance Corporation, and \n \n “(D)  the face amount of the refunding bonds does not exceed $175,000,000. \n \n \n “(13)   Residential rental property projects .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide a project for residential rental property which satisfies the requirements of section 103(b)(4)(A) of the 1954 Code shall be treated as an exempt facility bond (for projects described in section 142(a)(7) of the 1986 Code) for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if the project is described in any of the following subparagraphs: “(A)  A residential rental property project is described in this subparagraph if— “(i)  a public building development corporation was formed on  June 6, 1984 , with respect to such project, \n \n “(ii)  a partnership of which the corporation is a general partner was formed on  June 8, 1984 , and \n \n “(iii)  the partnership entered into a preliminary agreement with the State public facilities authority effective as of  May 4, 1984 , with respect to the issuance of the bonds for such project. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $6,200,000. \n \n “(B)  A residential rental property project is described in this subparagraph if— “(i)  the Board of Commissioners of the city housing authority officially selected such project’s developer on  December 19, 1985 , \n \n “(ii)  the Board of the City Redevelopment Commission agreed on  February 13, 1986 , to conduct a public hearing with respect to the project on  March 6, 1986 , \n \n “(iii)  an official action resolution for such project was adopted on  March 6, 1986 , and \n \n “(iv)  an allocation of a portion of the State ceiling was made with respect to such project on  July 29, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(C)  A residential rental property project is described in this subparagraph if— “(i)  the issuance of $1,289,882 of bonds for such project was approved by a State agency on  September 11, 1985 , and \n \n “(ii)  the authority to issue such bonds was scheduled to expire (under the terms of the State approval) on  September 9, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $1,300,000. \n \n “(D)  A residential rental property project is described in this subparagraph if— “(i)  the issuance of $7,020,000 of bonds for such project was approved by a State agency on  October 10, 1985 , and \n \n “(ii)  the authority to issue such bonds was scheduled to expire (under the terms of the State approval) on  October 9, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $7,020,000. \n \n “(E)  A residential rental property project is described in this subparagraph if— “(i)  it is to be located in a city urban renewal project area which was established pursuant to an urban renewal plan adopted by the city council on  May 17, 1960 , \n \n “(ii)  the urban renewal plan was revised in 1972 to permit multifamily dwellings in areas of the urban renewal project designated as a central business district, \n \n “(iii)  an inducement resolution was adopted for such project on  December 14, 1984 , and \n \n “(iv)  the city council approved on  November 6, 1985 , an agreement which provides for conveyance to the city of fee title to such project site. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(F)  A residential rental property project is described in this subparagraph if— “(i)  such project is to be located in a city urban renewal project area which was established pursuant to an urban renewal plan adopted by the city council on  May 17, 1960 , \n \n “(ii)  the urban renewal plan was revised in 1972 to permit multifamily dwellings in areas of the urban renewal project designated as a central business district, \n \n “(iii)  the amended urban renewal plan adopted by the city council on  May 19, 1972 , also provides for the conversion of any public area site in Block J of the urban renewal project area for the development of residential facilities, and \n \n “(iv)  acquisition of all of the parcels comprising the Block J project site was completed by the city on  December 28, 1984 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $60,000,000. \n \n “(G)  A residential rental property project is described in this subparagraph if— “(i)  such project is to be located on a city-owned site which is to become available for residential development upon the relocation of a bus maintenance facility, \n \n “(ii)  preliminary design studies for such project site were completed in December 1985, and \n \n “(iii)  such project is located in the same State as the projects described in subparagraphs (E) and (F). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $100,000,000. \n \n “(H)  A residential rental property project is described in this subparagraph if— “(i)  at least 20 percent of the residential units in such project are to be utilized to fulfill the requirements of a unilateral agreement date  July 21, 1983 , relating to the provision of low- and moderate-income housing, \n \n “(ii)  the unilateral agreement was incorporated into ordinance numbers 83–49 and 83–50, adopted by the city council and approved by the mayor on  August 24, 1983 , and \n \n “(iii)  an inducement resolution was adopted for such project on  September 25, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $8,000,000. \n \n “(I)  A residential rental property project is described in this subparagraph if— “(i)  a letter of understanding was entered into on  December 11, 1985 , between the city and county housing and community development office and the project developer regarding the conveyance of land for such project, and \n \n “(ii)  such project is located in the same State as the projects described in subparagraphs (E), (F), (G), and (H). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed an amount which, together with the amounts allowed under subparagraphs (E), (F), (G), and (H), does not exceed $250,000,000. \n \n “(J)  A residential rental property project is described in this subparagraph if it is a multifamily residential development located in Arrowhead Springs, within the county of San Bernardino, California, and a portion of the site of which currently is owned by the Campus Crusade for Christ. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $350,000,000. \n \n “(K)  A residential rental property project is described in this subparagraph if— “(i)  it is a new residential development with approximately 309 dwelling units located in census tract No. 3202, and \n \n “(ii)  there was an inducement ordinance for such project adopted by a city council on  November 20, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $32,000,000. \n \n “(L)  A residential rental property project is described in this subparagraph if— “(i)  it is a new residential development with approximately 70 dwelling units located in census tract No. 3901, and \n \n “(ii)  there was an inducement ordinance for such project adopted by a city council on  August 14, 1984 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $4,000,000. \n \n “(M)  A residential rental property project is described in this subparagraph if— “(i)  it is a new residential development with approximately 98 dwelling units located in census tract No. 4701, and \n \n “(ii)  there was an inducement ordinance for such project adopted by a city council on  August 14, 1984 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $7,000,000. \n \n “(N)  A project or projects are described in this subparagraph if they are part of the Willow Road residential improvement plan in Menlo Park, California. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $9,000,000. \n \n “(O)  A residential rental property project is described in this subparagraph if— “(i)  an inducement resolution for such project was approved on  July 18, 1985 , by the city council, \n \n “(ii)  such project was approved by such council on  August 11, 1986 , and \n \n “(iii)  such project consists of approximately 22 duplexes to be used for housing qualified low and moderate income tenants. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $1,500,000. \n \n “(P)  A residential rental property project is described in this subparagraph if— “(i)  an inducement resolution for such project was approved on  April 22, 1986 , by the city council, \n \n “(ii)  such project was approved by such council on  August 11, 1986 , and \n \n “(iii)  such project consists of a unit apartment complex (having approximately 60 units) to be used for housing qualified low and moderate income tenants. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $1,625,000. \n \n “(Q)  A residential rental property project is described in this subparagraph if— “(i)  a State housing authority granted a notice of official action for the project on  May 24, 1985 , and \n \n “(ii)  a binding agreement was executed for such project with the State housing finance authority on  May 14, 1986 , and such agreement was accepted by the State housing authority on  June 5, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $7,800,000. \n \n “(R)  A residential rental property project is described in this subparagraph if such project is either of 2 projects (located in St. Louis, Missouri) which received commitments to provide construction and permanent financing through the issuance of bonds in principal amounts of up to $242,130 and $654,045, on  July 16, 1986 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $1,000,000. \n \n “(S)  A residential rental property project is described in this subparagraph if— “(i)  a local housing authority approved an inducement resolution for such project on  January 28, 1985 , and \n \n “(ii)  a suit relating to such project was dismissed without right of further appeal on  April 4, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $13,200,000. \n \n “(T)  A residential rental property project is described in this subparagraph if— “(i)  such project is the renovation of a hotel for residents for senior citizens, \n \n “(ii)  an inducement resolution for such project was adopted on  November 20, 1985 , by the State Development Finance Authority, and \n \n “(iii)  such project is to be located in the metropolitan area of the city described in paragraph (3)(C). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $9,500,000. \n \n “(U)  A residential rental property project is described in this subparagraph if— “(i)  such project is the renovation of apartment housing, \n \n “(ii)  an inducement resolution for such project was adopted on  December 20, 1985 , by the State Housing Development Authority, and \n \n “(iii)  such project is to be located in the metropolitan area of the city described in paragraph (3)(C). \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $12,000,000. \n \n “(V)  A residential rental project is described in this subparagraph if it is a renovation and construction project for low-income housing in central Louisville, Kentucky, and local board approval for such project was granted  April 22, 1986 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $500,000. \n \n “(W)  A residential rental project is described in this subparagraph if— “(i)  such project is 1 of 6 residential rental projects having in the aggregate approximately 1,010 units, \n \n “(ii)  inducement resolutions for such projects were adopted by the county residential finance authority on  November 21, 1985 , and \n \n “(iii)  a public hearing of the county residential finance authority was held by such authority on  December 19, 1985 , regarding such projects to be constructed by an in-commonwealth developer. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $62,000,000. \n \n “(X)  A residential rental project is described in this subparagraph if— “(i)  an inducement resolution with respect to such project was adopted by the State housing development authority on  January 25, 1985 , and \n \n “(ii)  the issuance of bonds for such project was the subject of a law suit filed on  October 25, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $64,000,000. \n \n “(Y)  A project or projects are described in this subparagraph if they are financed with bonds issued by the Tulare, California, County Housing Authority. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $8,000,000. \n \n “(Z)  A residential rental project is described in this subparagraph if such project is a multifamily mixed-use housing project located in a city described in paragraph (3)(C), the zoning for which was changed to residential-business planned development on  November 26, 1985 , and with respect to which both the city on  December 4, 1985 , and the state housing finance agency on  December 20, 1985 , adopted inducement resolutions. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $90,000,000. \n \n “(AA)  A residential rental property project is described in this subparagraph if it is the Carriage Trace residential rental project in Clinton, Tennessee. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(BB)  A residential rental property project is described in this subparagraph if— “(i)  a contract to purchase such property was dated as of  August 9, 1985 , \n \n “(ii)  there was an inducement resolution adopted on  September 27, 1985 , for the issuance of obligations to finance such property, \n \n “(iii)  there was a State court final validation of such financing on  November 15, 1985 , and \n \n “(iv)  the certificate of nonappeal from such validation was available on  December 15, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $27,750,000. \n \n \n “(14)   Qualified student loans .— The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to any qualified student loan bonds (as defined in section 144 of the 1986 Code) issued by the Volunteer State Student Assistance Corporation incorporated on  February 20, 1985 . The aggregate face amount of bonds to which this paragraph applies shall not exceed $130,000,000. In the case of bonds to which this paragraph applies, the requirements of sections 148 and 149(d) of the 1986 Code shall be treated as included in section 103 of the 1954 Code and shall apply to such bonds. \n \n “(15)   Annuity contracts .— The treatment of annuity contracts as investment property under section 148(b)(2) of the 1986 Code shall not apply to any bond described in any of the following subparagraphs: “(A)  A bond is described in this subparagraph if such bond is issued by a city located in a noncontiguous State if— “(i)  the authority to acquire such a contract was approved on  September 24, 1985 , by city ordinance A085–176, and \n \n “(ii)  formal bid requests for such contracts were mailed to insurance companies on  September 6, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $57,000,000. \n \n “(B)  A bond is described in this subparagraph if— “(i)  on or before  May 12, 1985 , the governing board of the city pension fund authorized an agreement with an underwriter to provide planning and financial guidance for a possible bond issue, and \n \n “(ii)  the proceeds of the sale of such bond issue are to be used to purchase an annuity to fund the unfunded liability of the City of Berkeley, California’s Safety Members Pension Fund. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $40,000,000. \n \n “(C)  A bond is described in this subparagraph if such bond is issued by the South Dakota Building Authority if on  September 18, 1985 , representatives of such authority and its underwriters met with bond counsel and approved financing the purchase of an annuity contract through the sale and leaseback of State properties. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $175,000,000. \n \n “(D)  A bond is described in this subparagraph if— “(i)  such bond is issued by Los Angeles County, and \n \n “(ii)  such county, before  September 25, 1985 , paid or incurred at least $50,000 of costs related to the issuance of such bonds. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $500,000,000. \n \n \n “(16)   Solid waste disposal facility .— The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to any solid waste disposal facility if— “(A)  construction of such facility was approved by State law I.C. 36–9–31, \n \n “(B)  there was an inducement resolution on  November 19, 1984 , for the bonds with respect to such facility, and \n \n “(C)  a carryforward election of unused 1984 volume cap was made for such project on  February 25, 1985 . \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $120,000,000. \n \n “(17)   Refunding of bond anticipation notes .— There shall not be taken into account under section 146 of the 1986 Code any refunding of bond anticipation notes— “(A)  issued in December of 1984 by the Rhode Island Housing and Mortgage Finance Corporation, \n \n “(B)  which mature in December of 1986, \n \n “(C)  which is not an advance refunding within the meaning of section 149(d)(5) [now 149(d)(2)] of the 1986 Code (determined by substituting ‘180 days’ for ‘90 days’ therein), and \n \n “(D)  the aggregate face amount of the refunding bonds does not exceed $25,500,000. \n \n \n “(18)   Certain airports .— The amendments made by section 1301 [for classification see section 1311(a) of this note] shall not apply to a bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide any airport (within the meaning of section 103(b)(4)(D) of the 1954 Code) if such airport is a mid-field airport terminal and accompanying facilities at a major air carrier airport which during April 1980 opened a new precision instrument approach runway 10R28L. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $425,000,000. \n \n “(19)   Mass commuting facilities .— A bond issued as a part of an issue 95 percent or more of the net proceeds of which are to be used to provide a mass commuting facility (within the meaning of section 103(b)(4)(D) of the 1954 Code) shall be treated as an exempt facility bond (for facilities described in section 142(a)(3) of the 1986 Code) for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facility is described in 1 of the following subparagraphs: “(A)  A facility is described in this subparagraph if— “(i)  such facility provides access to an international airport, \n \n “(ii)  a corporation was formed in connection with such project in September 1984, \n \n “(iii)  the Board of Directors of such corporation authorized the hiring of various firms to conduct a feasibility study with respect to such project in April 1985, and \n \n “(iv)  such feasibility study was completed in November 1985. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. \n \n “(B)  A facility is described in this subparagraph if— “(i)  enabling legislation with respect to such project was approved by the State legislature in 1979, \n \n “(ii)  a 1-percent local sales tax assessment to be dedicated to the financing of such project was approved by the voters on  August 13, 1983 , and \n \n “(iii)  a capital fund with respect to such project was established upon the issuance of $90,000,000 of notes on  October 22, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000 and such bonds must be issued before  January 1, 1996 . \n \n “(C)  A facility is described in this subparagraph if— “(i)  bonds issued therefor are issued by or on behalf of an authority organized in 1979 pursuant to enabling legislation originally enacted by the State legislature in 1973, and \n \n “(ii)  such facility is part of a system connector described in a resolution adopted by the board of directors of the authority on  March 27, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $400,000,000. Notwithstanding the last paragraph of this subsection, this subparagraph shall apply to bonds issued before  January 1, 1996 . \n \n “(D)  A facility is described in this subparagraph if— “(i)  the facility is a fixed guideway project, \n \n “(ii)  enabling legislation with respect to the issuing authority was approved by the State legislature in May 1973, \n \n “(iii)  on  October 28, 1985 , a board issued a request for consultants to conduct a feasibility study on mass transit corridor analysis in connection with the facility, and \n \n “(iv)  on  May 12, 1986 , a board approved a further binding contract for expenditures of approximately $1,494,963, to be expended on a facility study. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $250,000,000. Notwithstanding the last paragraph of this subsection, this subparagraph shall apply to bonds issued before  January 1, 1996 . \n \n \n “(20)   Private colleges .— Subsections (c)(2) and (f) of section 148 of the 1986 Code shall not apply to any bond which is issued as part of an issue if such bond— “(A)  is issued by a political subdivision pursuant to home rule and interlocal cooperation powers conferred by the constitution and laws of a State to provide funds to finance the costs of the purchase and construction of educational facilities for private colleges and universities, and \n \n “(B)  was the subject of a resolution of official action by such political subdivision (Resolution No. 86–1039) adopted by the governing body of such political subdivision on  March 18, 1986 . \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $100,000,000. \n \n “(21)   Pooled financing programs.— “(A)  Section 147(b) of the 1986 Code shall not apply to any hospital pooled financing program with respect to which— “(i)  a formal presentation was made to a city hospital facilities authority on  January 14, 1986 , and \n \n “(ii)  such authority passed a resolution approving the bond issue in principle on  February 5, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $95,000,000. \n \n “(B)  Subsections (c)(2) and (f) of section 148 of the 1986 Code shall not apply to bonds for which closing occurred on  July 16, 1986 , and for which a State municipal league served as administrator for use in a State described in section 103A(g)(5)(C) of the Internal Revenue Code of 1954. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $585,000,000. \n \n \n “(22)   Downtown redevelopment project .— Subsection (b) of section 626 of the Tax Reform Act of 1984 [ section 626(b) of Pub. L. 98–369 , set out as a note under  section 103 of this title ] is amended by adding at the end thereof the following new paragraph: “\u202f‘(7)  Exception for certain downtown redevelopment project .—The amendments made by this section shall not apply to any obligation which is issued as part of an issue 95 percent or more of the proceeds of which are to be used to provide a project to acquire and redevelop a downtown area if— \n “\u202f‘(A) on  August 15, 1985 , a downtown redevelopment authority adopted a resolution to issue obligations for such project, \n “\u202f‘(B) before  September 26, 1985 , the city expended, or entered into binding contracts to expend, more than $10,000,000 in connection with such project, and \n “\u202f‘(C) the State supreme court issued a ruling regarding the proposed financing structure for such project on  December 11, 1985 . \n\n The aggregate face amount of obligations to which this paragraph applies shall not exceed $85,000,000 and such obligations must be issued before  January 1, 1992 .’ \n \n \n “(23)   Mass commuting and parking facilities .— A bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide any mass commuting facility or parking facility (within the meaning of section 103(b)(4)(D) of the 1954 Code) shall be treated as an exempt facility bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if such facility is provided in connection with the rehabilitation, renovation, or other improvement to an existing railroad station owned on the date of the enactment of this Act [ Oct. 22, 1986 ] by the National Railroad Passenger Corporation in the Northeast Corridor and which was placed in partial service in 1934 and was placed in the National Register of Historic Places in 1978. The aggregate face amount of bonds to which this paragraph applies shall not exceed $30,000,000. \n \n “(24)   Tax-exempt status of bonds of certain educational organizations.— “(A)   In general .— For purposes of section 103 and part IV of subchapter B of chapter 1 of the 1986 Code, a qualified educational organization shall be treated as a governmental unit, but only with respect to a trade or business carried on by such organization which is not an unrelated trade or business (determined by applying section 513(a) of such Code to such organization). The last paragraph of this section shall not apply to the treatment under the preceding sentence. \n \n “(B)   Qualified educational organization .— For purposes of subparagraph (A), the term ‘qualified educational organization’ means a college or university— “(i)  which was reincorporated and renewed with perpetual existence as a corporation by specific act of the legislature of the State within which such college or university is located on  March 19, 1913 , or \n \n “(ii)  which— “(I)  was initially incorporated or created on  February 28, 1787 , on  April 29, 1854 , or on  May 14, 1888 , and \n \n “(II)  as an instrumentality of the State, serves as a ‘State-related’ university by a specific act of the legislature of the State within which such college or university is located. \n \n \n \n \n “(25)   Tax-exempt status of bonds of certain public utilities.— “(A)   In general .— Except as provided in subparagraph (B), a bond shall be treated as a qualified bond for purposes of section 103 of the 1986 Code if such bond is issued after the date of the enactment of this Act [ Oct. 22, 1986 ] with respect to a public utility facility if such facility is— “(i)  located at any non-federally owned dam (or on project waters or adjacent lands) located wholly or partially in 1 or more of 3 counties, 2 of which are contiguous to the third, where the rated capacity of the hydroelectric generating facilities at 5 of such dams on  October 18, 1979 , was more than 650 megawatts each, \n \n “(ii)  located at a dam (or on the project waters or adjacent lands) at which hydroelectric generating facilities were financed with the proceeds of tax-exempt obligations before  December 31, 1968 , \n \n “(iii)  owned and operated by a State, political subdivision of a State, or any agency or instrumentality of any of the foregoing, and \n \n “(iv)  located at a dam (or on project waters or adjacent lands) where the general public has access for recreational purposes to such dam or to such project waters or adjacent lands. \n \n \n “(B)   Special rules for subparagraph (a).— “(i)   Bonds subject to cap .— Section 146 of the 1986 Code shall apply to any bond described in subparagraph (A) which (without regard to subparagraph (A)) is a private activity bond. For purposes of applying section 146(k) of the 1986 Code, the public utility facility described in subparagraph (A) shall be treated as described in paragraph (2) of such section and such paragraph shall be applied without regard to the requirement that the issuer establish that a State’s share of the use of a facility (or its output) will equal or exceed the State’s share of the private activity bonds issued to finance the facility. \n \n “(ii)   Limitation on amount of bonds to which subparagraph (a) applies .— The aggregate face amount of bonds to which subparagraph (A) applies shall not exceed $750,000,000, not more than $350,000,000 of which may be issued before  January 1, 1992 . \n \n “(iii)   Limitation on purposes .— Subparagraph (A) shall only apply to bonds issued as part of an issue 95 percent or more of the net proceeds of which are used to provide 1 or more of the following: “(I)  A fish by-pass facility or fisheries enhancement facility. \n \n “(II)  A recreational facility or other improvement which is required by Federal licensing terms and conditions or other Federal, State, or local law requirements. \n \n “(III)  A project of repair, maintenance, renewal, or replacement, and safety improvement. \n \n “(IV)  Any reconstruction, replacement, or improvement, including any safety improvement, which increases, or allows an increase in, the capacity, efficiency, or productivity of the existing generating equipment. \n \n \n \n \n “(26)   Convention and parking facilities .— A bond shall not be treated as a private activity bond for purposes of section 103 and part IV of subchapter B of chapter 1 of the 1986 Code if— “(A)  such bond is issued to provide a sports or convention facility described in section 103(b)(4)(B) or (C) of the 1954 Code, \n \n “(B)  such bond is not described in section 103(b)(2) or ( o )(2)(A) of such Code, \n \n “(C)  legislation by a State legislature in connection with such facility was enacted on  July 19, 1985 , and was designated Chapter 375 of the Laws of 1985, and \n \n “(D)  legislation by a State legislature in connection with the appropriation of funds to a State public benefit corporation for loans in connection with the construction of such facility was enacted on  April 17, 1985 , and was designated Chapter 41 of the Laws of 1985. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $35,000,000. \n \n “(27)   Small issue termination .— Section 144(a)(12) of the 1986 Code shall not apply to any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide a facility described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if— “(i)  the facility is a hotel and office facility located in a State capital, \n \n “(ii)  the economic development corporation of the city in which the facility is located adopted an initial inducement resolution on  October 30, 1985 , and \n \n “(iii)  a feasibility consultant was retained on  February 21, 1986 , with respect to such facility. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $10,000,000. \n \n “(B)  A facility is described in this subparagraph if such facility is financed by bonds issued by a State finance authority which was created in April 1985 by Act 1062 of the State General Assembly, and the Bond Guarantee Act (Act 505 of 1985) allowed such authority to pledge the interest from investment of the State’s general fund as a guarantee for bonds issued by such authority. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $75,000,000. \n \n “(C)  A facility is described in this subparagraph if such facility is a downtown mall and parking project for Holland, Michigan, with respect to which an initial agreement was formulated with the city in May 1985 and a formal memorandum of understanding was executed on  July 2, 1986 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $18,200,000. \n \n “(D)  A facility is described in this subparagraph if such facility is a downtown mall and parking ramp project for Traverse City, Michigan, with respect to which a final development agreement was signed in June 1986. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $21,500,000. \n \n “(E)  A facility is described in this subparagraph if such facility is the rehabilitation of the Heritage Hotel in Marquette, Michigan. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $5,000,000. \n \n “(F)  A facility is described in this subparagraph if it is the Lakeland Center Hotel in Lakeland, Florida. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $10,000,000. \n \n “(G)  A facility is described in this subparagraph if it is the Marble Arcade office building renovation project in Lakeland, Florida. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $5,900,000. \n \n “(H)  A facility is described in this subparagraph if it is a medical office building in Bradenton, Florida, with respect to which— “(i)  a memorandum of agreement was entered into on  October 17, 1985 , and \n \n “(ii)  the city council held a public hearing and approved issuance of the bonds on  November 13, 1985 . \n \n\n The aggregate face amount of obligations to which this subparagraph applies shall not exceed $8,500,000. \n \n “(I)  A facility is described in this subparagraph if it consists of the rehabilitation of the Andover Town Hall in Andover, Massachusetts. The provisions of section 149(b) of the 1986 Code (relating to federally guaranteed obligations) shall not apply to obligations to finance such project solely as a result of the occupation of a portion of such building by a United States Post Office. For purposes of determining whether any bond to which this subparagraph applies is a qualified small issue bond, there shall not be taken into account under section 144(a) of the 1986 Code capital expenditures with respect to any facility of the United States Government and there shall not be taken into account any bond allocable to the United States Government. \n \n “(J)  A facility is described in this subparagraph if it is the Central Bank Building renovation project in Grand Rapids, Michigan. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $1,000,000. \n \n \n “(28)   Certain private loans not taken into account .— For purposes of determining whether any bond is a private activity bond, an amount of loans (but not in excess of $75,000,000) provided from the proceeds of 1 or more issues shall not be taken into account if such loans are provided in furtherance of— “(A)  a city Emergency Conservation Plan as set forth in an ordinance adopted by the city council of such city on  February 17, 1983 , or \n \n “(B)  a resolution adopted by the city council of such city on  March 10, 1983 , committing such city to a goal of reducing the peak load of such city’s electric generation and distribution system by 553 megawatts in 15 years. \n \n \n “(29)   Certain private business use not taken into account.— “(A)  The nonqualified amount of the proceeds of an issue shall not be taken into account under section 141(b)(5) of the 1986 Code or in determining whether a bond described in subparagraph (B) (which is part of such issue) is a private activity bond for purposes of section 103 and part IV of subchapter B of chapter 1 of the 1986 Code. \n \n “(B)  A bond is described in this subparagraph if— “(i)  such bond is issued before  January 1, 1993 , by the State of Connecticut, and \n \n “(ii)  such bond is issued pursuant to a resolution of the State Bond Commission adopted before  September 26, 1985 . \n \n \n “(C)  The nonqualified amount to which this paragraph applies shall not exceed $150,000,000. \n \n “(D)  For purposes of this paragraph, the term ‘nonqualified amount’ has the meaning given such term by section 141(b)(8) of the 1986 Code, except that such term shall include the amount of the proceeds of an issue which is to be used (directly or indirectly) to make or finance loans (other than loans described in section 141(c)(2) of the 1986 Code) to persons other than governmental units. \n \n \n “(30)   Volume cap not to apply to certain facilities .— For purposes of section 146 of the 1986 Code, any exempt facility bond for the following facility shall not be taken into account: The facility is a facility for the furnishing of water which was authorized under  Public Law 90–537  [ 43 U.S.C. 1501  et seq.] of the United States if— “(A)  construction of such facility began on  May 6, 1973 , and \n \n “(B)  forward funding will be provided for the remainder of the project pursuant to a negotiated agreement between State and local water users and the Secretary of the Interior signed  April 15, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $391,000,000. \n \n “(31)   Certain hydroelectric generating property .— A bond shall be treated as described in paragraph (2) of section 1316(f) of this Act if— “(A)  such bond would be so described but for the substitution specified in such paragraph, \n \n “(B)  on  January 7, 1983 , an application for a preliminary permit was filed for the project for which such bond is issued and received docket no. 6986, and \n \n “(C)  on  September 20, 1983 , the Federal Energy Regulatory Commission issued an order granting the preliminary permit for the project. \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $12,000,000. \n \n “(32)   Volume cap .— The State ceiling applicable under section 146 of the 1986 Code for calendar year 1987 for the State which ratified the United States Constitution on  May 29, 1790 , shall be $150,000,000 higher than the State ceiling otherwise applicable under such section for such year. \n \n “(33)   Application of $150,000,000 limitation for certain qualified 501( c )(3) bonds .— Proceeds of an issue described in any of the following subparagraphs shall not be taken into account under section 145(b) of the 1986 Code. “(A)  Proceeds of an issue are described in this subparagraph if— “(i)  such proceeds are used to provide medical school facilities or medical research and clinical facilities for a university medical center, \n \n “(ii)  such proceeds are of— “(I)  a $21,550,000 issue dated  August 1, 1980 , \n \n “(II)  a $84,400,000 issue dated  September 1, 1984 , and \n \n “(III)  a $48,500,000 issue (Series 1985 A and 1985 B) dated on  December 1, 1985 , and \n \n \n “(iii)  the issuer of all such issues is the same. \n \n \n “(B)  Proceeds of an issue are described in this subparagraph if such proceeds are for use by Yale University and— “(i)  the bonds are issued after  August 8, 1986 , by the State of Connecticut Health and Educational Facilities Authority, or \n \n “(ii)  the bonds are the 1st or 2nd refundings (including advance refundings) of the bonds described in clause (i) or of original bonds issued before  August 7, 1986 , by such Authority. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $90,000,000. \n \n “(C)  Proceeds of an issue are described in this subparagraph if— “(i)  such issue is issued on behalf of a university established by Charter granted by King George II of England on  October 31, 1754 , to accomplish a refunding (including an advance refunding) of bonds issued to finance 1 or more projects, and \n \n “(ii)  the application or other request for the issuance of the issue to the appropriate State issuer was made by or on behalf of such university before  February 26, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $250,000,000. \n \n “(D)  Proceeds of an issue are described in this subparagraph if— “(i)  such proceeds are to be used for finance construction of a new student recreation center, \n \n “(ii)  a contract for the development phase of the project was signed by the university on  May 21, 1986 , with a private company for 5 percent of the costs of the project, and \n \n “(iii)  a committee of the university board of administrators approved the major program elements for the center on  August 11, 1986 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $25,000,000. \n \n “(E)  Proceeds of an issue are described in this subparagraph if— “(i)  such proceeds are to be used in the construction of new life sciences facilities for a university for medical research and education, \n \n “(ii)  the president of the university authorized a faculty/administration planning committee for such facilities on  September 17, 1982 , \n \n “(iii)  the trustees of such university authorized site and architect selection on  October 30, 1984 , and \n \n “(iv)  the university negotiated a $2,600,000 contract with the architect on  August 9, 1985 . \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $47,500,000. \n \n “(F)  Proceeds of an issue are described in this subparagraph if such proceeds are to be used to renovate undergraduate chemistry and engineering laboratories, and to rehabilitate other basic science facilities, for an institution of higher education in Philadelphia, Pennsylvania, chartered by legislative Acts of the Commonwealth of Pennsylvania, including an Act dated  September 30, 1791 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $6,500,000. \n \n “(G)  Proceeds of an issue are described in this subparagraph if such proceeds are of bonds which are the first advance refunding of bonds issued during 1985 for the development of a computer network, and construction and renovation or rehabilitation of other facilities, for an institution of higher education described in subparagraph (F). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $80,000,000. \n \n “(H)  Proceeds of an issue are described in this subparagraph if— “(i)  the issue is issued on behalf of a university founded in 1789, and \n \n “(ii)  the proceeds of the issue are to be used to finance projects (to be determined by such university and the issuer) which are similar to those projects intended to be financed by bonds that were the subject of a request transmitted to Congress on  November 7, 1985 [.] \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $200,000,000. Bonds to which this subparagraph applies shall be treated as qualified 501(c)(3) bonds if such bonds would not (if issued on  August 15, 1986 ) be industrial development bonds (as defined in section 103(b)(2) of the 1954 Code), and section 147(f) of the 1986 Code shall not apply to the issue of which such bonds are a part. Bonds issued to finance facilities described in this subparagraph shall be treated as issued to finance such facilities notwithstanding the fact that a period in excess of 1 year has expired since the facilities were placed in service. \n \n “(I)  Proceeds of an issue are described in this subparagraph if the issue is issued on behalf of a university established on  August 6, 1872 , for a project approved by the trustees thereof on  November 1, 1985 . The aggregate face amount of bonds to which this subparagraph applies shall not exceed $100,000,000. \n \n “(J)  Proceeds of an issue are described in this subparagraph if— “(i)  the issue is issued on behalf of a university for which the founding grant was signed on  November 11, 1885 , and \n \n “(ii)  such bond is issued for the purpose of providing a Near West Campus Redevelopment Project and a Student Housing Project. \n \n\n The aggregate face amount of bonds to which this subparagraph applies shall not exceed $105,000,000. \n \n “(J)  Proceeds of an issue are described in this subparagraph if— “(i)  they are the proceeds of advance refunding obligations issued on behalf of a university established on  April 21, 1831 , and \n \n “(ii)  the application or other request for the issuance of such obligations was made to the appropriate State issuer before  July 12, 1986 . \n \n\n The aggregate face amount of obligations to which this subparagraph applies shall not exceed $175,000,000. \n \n “(K)  Proceeds of an issue are described in this subparagraph if— “(i)  the issue or issues are for the purpose of financing or refinancing costs associated with university facilities including at least 900 units of housing for students, faculty, and staff in up to two buildings and an office building containing up to 245,000 square feet of space, and \n \n “(ii)  a bond act authorizing the issuance of such bonds for such project was adopted on  July 8, 1986 , and such act under Federal law was required to be transmitted to Congress. \n \n\n The aggregate face amount of obligations to which this subparagraph applies shall not exceed $112,000,000. \n \n “(L)  Proceeds of an issue are described in this subparagraph if such issue is for Cornell University in an aggregate face amount of not more than $150,000,000. \n \n “(M)  Proceeds of an issue are described in this subparagraph if such issue is issued on behalf of the Society of the New York Hospital to finance completion of a project commenced by such hospital in 1981 for construction of a diagnostic and treatment center or to refund bonds issued on behalf of such hospital in connection with the construction of such diagnostic and treatment center or to finance construction and renovation projects associated with an inpatient psychiatric care facility. The aggregate face amount of bonds to which this subparagraph applies shall not exceed $150,000,000. \n \n “(N)  Any bond to which section 145(b) of the 1986 Code does not apply by reason of this paragraph (other than subparagraph (A) thereof) shall be taken into account in determining whether such section applies to any later issue. \n \n “(O)  In the case of any refunding bond— “(i)  to which any subparagraph of this paragraph applies, and \n \n “(ii)  to which the last sentence of section 1313(c)(2) applies, \n \n\n such bond shall be treated as having such subparagraph apply (and the refunding bond shall be treated for purposes of such section as issued before  January 1, 1986 , and as not being an advance refunding) unless the issuer elects the opposite result. \n \n \n “(34)   Arbitrage rebate .— Section 148(f) of the 1986 Code shall not apply to any period before  October 1, 1990 , with respect to any bond the proceeds of which are to be used to provide a high-speed rail system for the State of Ohio. The aggregate face amount of bonds to which this paragraph applies shall not exceed $2,000,000,000. \n \n “(35)   Extension of carryforward period.— “(A)  In the case of a carryforward under section 103(n)(10) of the 1954 Code of $170,000,000 of bond limit for calendar year 1984 for a project described in subparagraph (B), clause (i) of section 103(n)(10)(C) of the 1954 Code shall be applied by substituting ‘6 calendar years’ for ‘3 calendar years’, and such carryforward may be used by any authority designated by the State in which the facility is located. \n \n “(B)  A project is described in this subparagraph if— “(i)  such project is a facility for local furnishing of electricity described in section 645 of the Tax Reform Act of 1984 [ Pub. L. 98–369, div. A, title VI, §\u202f645 ,  July 18, 1984 ,  98 Stat. 940 ], and \n \n “(ii)  construction of such facility commenced within the 3-year period following the calendar year in which the carryforward arose. \n \n \n \n “(36)   Power purchase bonds .— A bond issued to finance purchase of power from a power facility at a dam being renovated pursuant to  P.L. 98–381  [ 43 U.S.C. 619  et seq.] shall not be treated as a private activity bond if it would not be such under section 141(b)(1) and (2) of the 1986 Code if 25 percent were substituted for 10 percent and the provisions of section 141(b)(3), (4), and (5) of the 1986 Code did not apply. The aggregate face amount of bonds to which this paragraph applies shall not exceed $400,000,000. \n \n “(37)   Qualified mortgage bonds .— A bond issued as part of either of 2 issues no later than  September 8, 1986 , shall be treated as a qualified mortgage bond within the meaning of section 141(d)(1)(B) of the 1986 Code if it satisfies the requirements of section 103A of the 1954 Code and if the issues are issued by the two most populous cities in the Tar Heel State. The aggregate face amount of bonds to which this paragraph applies shall not exceed $4,000,000. \n \n “(38)   Exempt facility bonds .— A bond shall be treated as an exempt facility bond within the meaning of section 142(a) of the 1986 Code if it is issued to fund residential, office, retail, light industrial, recreational and parking development known as Tobacco Row. Such bond shall be subject to section 146 of the 1986 Code. The aggregate face amount of bonds to which this paragraph applies shall not exceed $100,000,000. \n \n “(39)   Certain bonds treated as qualified 501 (c) (3) bonds .— A bond issued as part of an issue shall be treated for purposes of part IV of subchapter B of chapter 1 of the 1986 Code as a qualified 501(c)(3) bond if— “(A)  such bond would not (if issued on  August 15, 1986 ) be an industrial development bond (as defined in section 103(b)(2) of the 1954 Code), and \n \n “(B)  such issue was approved by city voters on  January 19, 1985 , for construction or renovation of facilities for the cultural and performing arts. \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $5,000,000. \n \n “(40)   Certain library bonds .— In the case of a bond issued before  January 1, 1986 , by the City of Los Angeles Community Redevelopment Agency to provide the library and related structures associated with the City of Los Angeles Central Library Project, the ownership and use of the land and facilities associated with such project by persons which are not governmental units (or payments from such persons) shall not adversely affect the exclusion from gross income under section 103 of the 1954 Code of interest on such bonds. \n \n “(41)   Certain refunding obligations for certain power facilities .— With respect to 2 net billed nuclear power facilities located in the State of Washington on which construction has been suspended, the requirements of section 147(b) of the 1986 Code shall be treated as satisfied with respect to refunding bonds issued before 1992 if— “(A)  each refunding bond has a maturity date not later than the maturity date of the refunded bond, and \n \n “(B)  the facilities have not been placed in service as of the date of issuance of the refunding bond. \n \n\n The aggregate face amount of bonds to which this paragraph applies shall not exceed $2,000,000,000. Section 146 of the 1986 Code and the last paragraph of this section shall not apply to bonds to which this paragraph applies. \n \n “(42)   Residential rental property .— A bond issued to finance a residential rental project within the meaning of 103(b)(4) of the 1954 Code shall be treated as an exempt facility bond within the meaning of section 142(a)(7) of the 1986 Code if the county housing finance authority adopted an inducement resolution with respect to the project on  May 8, 1985 , and the project is located in Polk County, Florida. The aggregate face amount of bonds to which this paragraph applies shall not exceed $4,100,000. \n \n “(43)   Extension of advance refunding for certain facilities .— Paragraph (4) of section 631(c) of the Tax Reform Act of 1984 [ section 631(c)(4) of Pub. L. 98–369 , set out as a note under  section 103 of this title ] is amended— “(A)  by striking out the second sentence thereof, \n \n “(B)  by adding at the end thereof the following new sentence: ‘In the case of refunding obligations not exceeding $100,000,000 issued by the Alabama State Docks Department, the first sentence of this paragraph shall be applied by substituting “ December 31, 1987 ” for “ December 31, 1984 ”.’ \n \n \n “(44)   Pool bonds .— The following amounts of pool bonds are exempt from the arbitrage rebate requirement of section 148(f) of the 1986 Code and the temporary period limitation of section 148(c)(2) of the 1986 Code: \n \n \n \n \n \n \n \u2001\u2001Pool Maximum Bond Amount \n \n \n Tennessee Utility Districts Pool $80,000,000 \n New Mexico Hospital Equipment Loan Council $35,000,000 \n Pennsylvania Local Government Investment Trust Pool $375,000,000 \n Indiana Bond Bank Pool $240,000,000 \n Hernando County, Florida Bond Pool $300,000,000 \n Utah Municipal Finance Cooperative Pool $262,000,000 \n North Carolina League of Municipalities Pool $200,000,000 \n Kentucky Municipal League Bond Pool $170,000,000 \n Kentucky Association of Counties Bond Pool $200,000,000 \n Homewood Municipal Bond Pool $50,000,000 \n Colorado Association of School Boards Pool $300,000,000 \n Tennessee Municipal League Pooled Bonds $75,000,000 \n Georgia Municipal Association Pool $130,000,000 \n \n \n \n \n “(45)   Certain carryforward elections .— Notwithstanding any other provision of this title [enacting this section and sections 142 to 150 and 7703 of this title, amending sections 2, 22, 25, 32, 86, 103, 105, 152, 153, 163, 172, 194, 269A, 414, 879, 1016, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title, repealing sections 103A, 1391 to 1397, and 6039B of this title, omitting former  section 143 of this title , enacting provisions set out as notes under this section and sections 148 and 501 of this title, and amending provisions set out as a note under  section 103A of this title ]— “(A)  In the case of a metropolitan service district created pursuant to State revised statutes, chapter 268, up to $100,000,000 unused 1985 bond authority may be carried forward to any year until 1989 (regardless of the date on which such carryforward election is made). \n \n “(B)  If— “(i)  official action was taken by an industrial development board on  September 16, 1985 , with respect to the issuance of not more than $98,500,000, of waste water treatment revenue bonds, and \n \n “(ii)  an executive order of the governor granted a carryforward of State bond authority for such project on  December 30, 1985 , \n \n\n such carryforward election shall be valid for any year through 1988. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $98,500,000. \n \n \n “(46)   Treatment of certain obligations to finance hydroelectric generating facility .— If— “(A)  obligations are issued in an amount not exceeding $5,000,000 to finance the construction of a hydroelectric generating facility located on the North Fork of Cache Creek in Lake County, California, which was the subject of a preliminary resolution of the issuer of the obligations on  June 29, 1982 , or are issued to refund any of such obligations, \n \n “(B)  substantially all of the electrical power generated by such facility is to be sold to a nongovernmental person pursuant to a long-term power sales agreement in accordance with the Public Utility Regulatory Policies Act of 1978 [ Pub. L. 95–617 , see Short Title note set out under  16 U.S.C. 2601 ], and \n \n “(C)  the initially issued obligations are issued on or before  December 31, 1986 , and any of such refunding obligations are issued on or before  December 31, 1996 , \n \n\n then the person referred to in subparagraph (B) shall not be treated as a principal user of such facilities by reason of such sales for purposes of subparagraphs (D) and (E) of section 103(b)(6) of the 1954 Code. \n \n “(47)   Treatment of certain obligations to finance steam and electric cogeneration facility .— If— “(A)  obligations are issued on or before  December 31, 1986 , in an amount not exceeding $4,400,000 to finance a facility for the generation and transmission of steam and electricity having a maximum electrical capacity of approximately 5.3 megawatts and located within the City of San Jose, California, or are issued to refund any of such obligations, \n \n “(B)  substantially all of the electrical power generated by such facility that is not sold to an institution of higher education created by statute of the State of California is to be sold to a nongovernmental person pursuant to a long-term power sales agreement in accordance with the Public Utility Regulatory Policies Act of 1978 [ Pub. L. 95–617 , see Short Title note set out under  16 U.S.C. 2601 ], and \n \n “(C)  the initially issued obligations are issued on or before  December 31, 1986 , and any of such refunding obligations are issued on or before  December 31, 1996 , \n \n\n then the nongovernmental person referred to in subparagraph (B) shall not be treated as a principal user of such facilities by reason of such sales for purposes of subparagraphs (D) and (E) of section 103(b)(6) of the Internal Revenue Code of 1954. \n \n “(48)   Treatment of certain obligations .— A bond which is not an industrial development bond under section 103(b)(2) of the Internal Revenue Code of 1954 shall not be treated as a private activity bond for purposes of part IV of subchapter B of chapter 1 of the 1986 Code if 95 percent or more of the net proceeds of the issue of which such bond is a part are used to provide facilities described in any of the following subparagraphs: “(A)  A facility is described in this subparagraph if it is a governmentally-owned and operated State fair and exposition center with respect to which— “(i)  the 1985 session of the State legislature authorized revenue bonds to be issued in a maximum amount of $10,000,000, and \n \n “(ii)  a market feasibility study dated  June 30, 1986 , relating to a major capital improvemental program at the facility was prepared for the advisory board of the State fair and exposition center by a certified public accounting firm. \n \n\n The aggregate face amount of obligations to which this subparagraph applies shall not exceed $10,000,000. \n \n “(B)  A facility is described in this subparagraph if it is a convention, trade, or spectator facility which is to be located in the State with respect to which paragraph (6)(U) applies and with respect to which feasibility and preliminary design consultants were hired on  May 1, 1985  and  October 31, 1985 . The aggregate face amount of obligations to which this subparagraph applies shall not exceed $175,000,000. \n \n “(C)  A facility which is part of a project described in paragraph (6)(O). The aggregate face amount of bonds to which this subparagraph applies shall not exceed $20,000,000. \n \n \n “(49)   Transition rule for refunding certain housing bonds .— Sections 146 and [former] 149(d)(2) of the 1986 Code shall not apply to the refunding of any bond issued under section 11(b) of the United States Housing Act of 1937 [ 42 U.S.C. 1437i(b) ] before  December 31, 1983 , if— “(A)  the bond has an original term to maturity of at least 40 years, \n \n “(B)  the maturity date of the refunding bonds does not exceed the maturity date of the refunded bonds, \n \n “(C)  the amount of the refunding bonds does not exceed the outstanding amount of the refunded bonds, \n \n “(D)  the interest rate on the refunding bonds is lower than the interest rate of the refunded bonds, and \n \n “(E)  the refunded bond is required to be redeemed not later than the earliest date on which such bond could be redeemed at par. \n \n \n “(50)   Transitioned bonds subject to certain rules .— In the case of any bond to which any provision of this section applies, except as otherwise expressly provided, sections 103 and 103A of the 1954 Code shall be applied as if the requirements of sections 147(g), 148, and 149(d) of the 1986 Code were included in each such section. \n \n “(51)   Certain additional projects .— Section 141(b) of the 1986 Code shall be applied by substituting ‘25’ for ‘10’ each place it appears and by not applying sections 141(b)(3) and 141(c)(1)(B) to bonds substantially all of the proceeds are used for— “(A)  A project is described in this subparagraph if it consists of a capital improvements program for a metropolitan sewer district, with respect to which a proposition was submitted to voters on  August 7, 1984 . The aggregate face amount of obligations to which this subparagraph applies shall not exceed $60,000,000. \n \n “(B)  Facilities described in this subparagraph if it consists of additions, extensions, and improvements to the wastewater system for Lakeland, Florida. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $20,000,000. \n \n “(C)  A project is described in this subparagraph if it is the Central Valley Water Reclamation Project in Utah. The aggregate face amount of obligations to which this subparagraph applies shall not exceed $100,000,000. \n \n “(D)  A project is described in this subparagraph if it is a project to construct approximately 26 miles of toll expressways, with respect to which any appeal to validation was filed  July 11, 1986 . The aggregate face amount of obligations to which this subparagraph applies shall not exceed $450,000,000. \n \n \n “(52)   Termination .— Except as otherwise provided in this section, this section shall not apply to any bond issued after  December 31, 1990 . \n \n \n “SEC. 1318.  DEFINITIONS, ETC., RELATING TO EFFECTIVE DATES AND TRANSITIONAL RULES. “(a)   Definitions .— For purposes of this subtitle— “(1)  1954  code .— The term ‘1954 Code’ means the Internal Revenue Code of 1954 as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(2)  1986  code .— The term ‘1986 Code’ means the Internal Revenue Code of 1986 as amended by this Act [see Tables for classification]. \n \n “(3)   Bond .— The term ‘bond’ includes any obligation. \n \n “(4)   Advance refund .— A bond shall be treated as issued to advance refund another bond if it is issued more than 90 days before the redemption of the refunded bond. \n \n “(5)   Net proceeds .— The term ‘net proceeds’ has the meaning given such term by section 150(a) of the 1986 Code. \n \n “(6)   Continued application of the 1954 code .— Nothing in this subtitle shall be construed to exempt any bond from any provision of the 1954 Code by reason of a delay in (or exemption from) the application of any amendment made by subtitle A [sections 1301 to 1303 of  Pub. L. 99–514 , enacting this section and sections 142 to 150 and 7703 of this title, amending sections 2, 22, 25, 32, 86, 103, 105, 152, 153, 163, 172, 194, 269A, 414, 879, 1016, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title, repealing sections 103A, 1391 to 1397, and 6039B of this title, omitting former  section 143 of this title , enacting provisions set out as notes under this section and sections 148 and 501 of this title, and amending provisions set out as a note under  section 103A of this title ]. \n \n “(7)   Treatment as exempt facility .— Any bond which is treated as an exempt facility bond by section 1316 or 1317 shall not fail to be so treated by reason of subsection (b) of section 142 of the 1986 Code. \n \n “(8)   Application of future legislation to transitioned bonds .— In the case of any bond to which the amendments made by section 1301 [for classification see section 1311(a) of this note] do not apply by reason of a provision of this Act [see Tables for classification], any amendment of the 1986 Code (and any other provision applicable to such Code) included in any law enacted after  October 22, 1986 , shall be treated as included in section 103 and section 103A (as appropriate) of the 1954 Code with respect to such bond unless— “(A)  such law expressly provides that such amendment (or other provision) shall not apply to such bond, or \n \n “(B)  such amendment (or other provision) applies to a provision of the 1986 Code— “(i)  for which there is no corresponding provision in section 103 and section 103A (as appropriate) of the 1954 Code, and \n \n “(ii)  which is not otherwise treated as included in such sections 103 and 103A with respect to such bond. \n \n \n \n \n “(b)   Minimum Tax Treatment.— “(1)   In general .— Any bond described in paragraph (2) shall not be treated as a private activity bond for purposes of section 57 of the 1986 Code unless such bond would (if issued on  August 7, 1986 ) be— “(A)  an industrial development bond (as defined in section 103(b)(2) of the 1954 Code), or \n \n “(B)  a private loan bond (as defined in section 103( o )(2)(A) of the 1954 Code, without regard to any exception from such definition other than section 103( o )(2)(C) of such Code). \n \n \n “(2)   Bonds described .— For purposes of paragraph (1), a bond is described in this paragraph if— “(A)  the amendments made by section 1301 [for classification see section 1311(a) of this note] do not apply to such bond by reason of section 1312 or 1316(g), \n \n “(B)  any provision of section 1317 applies to such bond, or \n \n “(C)  the proceeds of such bond are used to refund any bond referred to in subparagraph (A) or (B) (or any bond which is part of a series of refundings of such a bond) if the requirements of paragraphs (1), (2), and (3) of subsection (c) are met with respect to the refunding bond. \n \n \n \n “(c)   Current Refundings Not Taken Into Account in Applying Aggregate Limit on Bonds to Which Transitional Rules Apply .— The limitation on the aggregate face amount of bonds to which any provision of section 1316(g) or 1317 applies shall not be reduced by the face amount of any bond the proceeds of which are to be used exclusively to refund any bond to which such provision applies (or any bond which is part of a series of refundings of such bond) if— “(1)  the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, \n \n “(2)  the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, and \n \n “(3)  the net proceeds of the refunding bond are used to redeem the refunded bond not later than 90 days after the date of the issuance of the refunding bond. \n \n\n For purposes of paragraph (1), average maturity shall be determined in accordance with section 147(b)(2)(A) of the 1986 Code. No limitation in section 1316(g) or 1317 on the period during which bonds may be issued under such section shall apply to any refunding bond which meets the requirements of this subsection. \n \n “(d)   Special Rule Permitting Carryforward of Volume Cap for Certain Transitioned Projects .— A bond to which section 1312 or 1317 applies shall be treated as having a carryforward purpose described in section 146(f)(5) of the 1986 Code, and the requirement of section 146(f)(2)(A) of the 1986 Code shall be treated as met if such project is identified with reasonable specificity. The preceding sentence shall not apply so as to permit a carryforward with respect to any qualified small issue bond.”\n“\u202f‘(D) Improvements to existing generating facilities.\n“\u202f‘(E) Transmission lines.\n“\u202f‘(F) Electric generating facilities.’, and\n“\u202f‘(7)  Exception for certain downtown redevelopment project .—The amendments made by this section shall not apply to any obligation which is issued as part of an issue 95 percent or more of the proceeds of which are to be used to provide a project to acquire and redevelop a downtown area if—\n“\u202f‘(A) on  August 15, 1985 , a downtown redevelopment authority adopted a resolution to issue obligations for such project,\n“\u202f‘(B) before  September 26, 1985 , the city expended, or entered into binding contracts to expend, more than $10,000,000 in connection with such project, and\n“\u202f‘(C) the State supreme court issued a ruling regarding the proposed financing structure for such project on  December 11, 1985 .\n[ Pub. L. 100–647, title I, §\u202f1013(c)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3545 , provided that:  “The amendment made by subparagraph (A) [amending  section 1313(a)(3)(C) of Pub. L. 99–514 , set out above] shall apply to bonds issued after  June 30, 1987 ” \n.]\n[ Pub. L. 100–647, title I, §\u202f1013(c)(11)(E) ,  Nov. 10, 1988 ,  102 Stat. 3547 , provided that:  “A refunding bond issued before  July 1, 1987 , shall be treated as meeting the requirement of subparagraph (A) of section 1313(c)(1) of the Reform Act [ Pub. L. 99–514 , set out above] if such bond met the requirement of such subparagraph as in effect before the amendments made by this paragraph [amending  section 1313(c) of Pub. L. 99–514 , set out above].” \n]\n[ Pub. L. 100–647, title I, §\u202f1013(c)(14)(B) ,  Nov. 10, 1988 ,  102 Stat. 3547 , provided that:  “The amendment made by subparagraph (A) [amending  section 1313 of Pub. L. 99–514 , set out above] shall apply with respect to refunding bonds issued after  October 16, 1987 .” \n]\n[ Pub. L. 100–647, title I, §\u202f1013(e)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3548 , provided that:  “The amendment made by subparagraph (A) [amending  section 1315(e) of Pub. L. 99–514 , set out above] shall apply to bonds issued after  June 10, 1987 .” \n]\n[ Pub. L. 100–647, title I, §\u202f1013(f)(1)(B) ,  Nov. 10, 1988 ,  102 Stat. 3549 , provided that:  “The amendment made by subparagraph (A) [amending  section 1316 of Pub. L. 99–514 , set out above] shall apply only with respect to carryforwards of volume cap for years after 1986.” \n]\n[ Pub. L. 100–647, title I, §\u202f1013(f)(7)(B) ,  Nov. 10, 1988 ,  102 Stat. 3549 , provided that:  “The amendment made by subparagraph (A) [amending  section 1316(g)(8) of Pub. L. 99–514 , set out above] shall apply only with respect to carryforwards of volume cap for years after 1986.” \n]\nPub. L. 99–514, title XIII, §\u202f1301(i) ,  Oct. 22, 1986 ,  100 Stat. 2657 , provided that:  “The Secretary of the Treasury or his delegate shall amend the provision in the Federal income tax regulations relating to when use pursuant to certain output contracts is considered to satisfy the private business tests of paragraphs (1) and (2) of section 141(b) of the Internal Revenue Code of 1986 to eliminate the requirement of a 3 percent guaranteed minimum payment.”\nPub. L. 100–647, title VI, §\u202f6179 ,  Nov. 10, 1988 ,  102 Stat. 3727 , provided that:  “Before  January 1, 1989 , the Secretary of the Treasury or his delegate shall issue guidance concerning the application of the private security or payment test under section 141(b)(2) of the Internal Revenue Code of 1986 to tax-exempt bond financing by State and local governments of hazardous waste clean-up activities conducted by such governments where some of the activities occur on privately owned land.”\nPub. L. 99–514, title XIII, §\u202f1301(d) ,  Oct. 22, 1986 ,  100 Stat. 2654 , provided that:  \n “Notwithstanding any other provision of law or any regulations promulgated thereunder (including the provisions of 31 CFR part 344) the Secretary of the Treasury shall extend by  January 1, 1987 , the State and Local Government Series program to provide— \n “(1)  instruments allowing flexible investment of bond proceeds in a manner eliminating the earning of rebatable arbitrage, \n \n “(2)  demand deposits under such program by eliminating advance notice and minimum maturity requirements related to the purchase of bonds, \n \n “(3)  operation of such program at no net cost to the Federal Government, and \n \n “(4)  deposits for a stated maturity under reasonable advance notice requirements.”\nPub. L. 99–514, title XIII, §\u202f1301(e) ,  Oct. 22, 1986 ,  100 Stat. 2655 , provided that:  \n “The Secretary of the Treasury or his delegate shall modify the Secretary’s advance ruling guidelines relating to when use of property pursuant to a management contract is not considered a trade or business use by a private person for purposes of section 141(a) of the Internal Revenue Code of 1986 to provide that use pursuant to a management contract generally shall not be treated as trade or business use as long as— \n “(1)  the term of such contract (including renewal options) does not exceed 5 years, \n \n “(2)  the exempt owner has the option to cancel such contract at the end of any 3-year period, \n \n “(3)  the manager under the contract is not compensated (in whole or in part) on the basis of a share of net profits, and \n \n “(4)  at least 50 percent of the annual compensation of the manager under such contract is based on a periodic fixed fee.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': '“\u202f‘(D) Improvements to existing generating facilities.\n“\u202f‘(E) Transmission lines.\n“\u202f‘(F) Electric generating facilities.’, and'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': '“\u202f‘(7)  Exception for certain downtown redevelopment project .—The amendments made by this section shall not apply to any obligation which is issued as part of an issue 95 percent or more of the proceeds of which are to be used to provide a project to acquire and redevelop a downtown area if—\n“\u202f‘(A) on  August 15, 1985 , a downtown redevelopment authority adopted a resolution to issue obligations for such project,\n“\u202f‘(B) before  September 26, 1985 , the city expended, or entered into binding contracts to expend, more than $10,000,000 in connection with such project, and\n“\u202f‘(C) the State supreme court issued a ruling regarding the proposed financing structure for such project on  December 11, 1985 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'A facility shall be treated as described in paragraph (1), (2), (3), or (12) of subsection (a) only if all of the property to be financed by the net proceeds of the issue is to be owned by a governmental unit.\nStorage or training facilities directly related to a facility described in paragraph (1), (2), (3) or (11) of subsection (a) shall be treated as described in the paragraph in which such facility is described.\nThe project meets the requirements of this subparagraph if 20 percent or more of the residential units in such project are occupied by individuals whose income is 50 percent or less of area median gross income.\nThe project meets the requirements of this subparagraph if 40 percent or more of the residential units in such project are occupied by individuals whose income is 60 percent or less of area median gross income.\nThe income of individuals and area median gross income shall be determined by the Secretary in a manner consistent with determinations of lower income families and area median gross income under section 8 of the United States Housing Act of 1937 (or, if such program is terminated, under such program as in effect immediately before such termination). Determinations under the preceding sentence shall include adjustments for family size. Subsections (g) and (h) of section 7872 shall not apply in determining the income of individuals under this subparagraph.\nFor purposes of determining income under this subparagraph, payments under  section 403 of title 37 , United States Code, as a basic pay allowance for housing shall be disregarded with respect to any qualified building.\nFor purposes of clause (iii), the term “qualified military installation” means any military installation or facility the number of members of the Armed Forces of the United States assigned to which, as of  June 1, 2008 , is not less than 1,000.\nRules similar to the rules of section 42(i)(3)(D) shall apply for purposes of this subsection.\nA unit shall not fail to be treated as a residential unit merely because such unit is a single-room occupancy unit (within the meaning of section 42).\nAny determination of area median gross income under subparagraph (B) with respect to any project for any calendar year after 2008 shall not be less than the area median gross income determined under such subparagraph with respect to such project for the calendar year preceding the calendar year for which such determination is made.\nThe term “HUD hold harmless policy” means the regulations under which a policy similar to the rules of clause (i) applied to prevent a change in the method of determining area median gross income from resulting in a reduction in the area median gross income determined with respect to certain projects in calendar years 2007 and 2008.\nThe term “HUD hold harmless impacted project” means any project with respect to which area median gross income was determined under subparagraph (B) for calendar year 2007 or 2008 if such determination would have been less but for the HUD hold harmless policy.\nThe determination of whether the income of a resident of a unit in a project exceeds the applicable income limit shall be made at least annually on the basis of the current income of the resident. The preceding sentence shall not apply with respect to any project for any year if during such year no residential unit in the project is occupied by a new resident whose income exceeds the applicable income limit.\nIf the income of a resident of a unit in a project did not exceed the applicable income limit upon commencement of such resident’s occupancy of such unit (or as of any prior determination under subparagraph (A)), the income of such resident shall be treated as continuing to not exceed the applicable income limit. The preceding sentence shall cease to apply to any resident whose income as of the most recent determination under subparagraph (A) exceeds 140 percent of the applicable income limit if after such determination, but before the next determination, any residential unit of comparable or smaller size in the same project is occupied by a new resident whose income exceeds the applicable income limit.\nIn the case of a project with respect to which credit is allowed under section 42, the second sentence of subparagraph (B) shall be applied by substituting “building (within the meaning of section 42)” for “project”.\nThe term “low-income unit” means any unit which is required to be occupied by individuals who meet the applicable income limit.\nIn the case of a project located in a city having 5 boroughs and a population in excess of 5,000,000, subparagraph (B) of paragraph (1) shall be applied by substituting “25 percent” for “40 percent”.\nThe operator of any project with respect to which an election was made under this subsection shall submit to the Secretary (at such time and in such manner as the Secretary shall prescribe) an annual certification as to whether such project continues to meet the requirements of this subsection. Any failure to comply with the provisions of the preceding sentence shall not affect the tax-exempt status of any bond but shall subject the operator to penalty, as provided in section 6652(j).\nA facility shall not be treated as failing to meet the local furnishing requirement of subsection (a)(8) by reason of electricity transmitted pursuant to an order of the Federal Energy Regulatory Commission under section 211 or 213 of the Federal Power Act (as in effect on the date of the enactment of this paragraph) if the portion of the cost of the facility financed with tax-exempt bonds is not greater than the portion of the cost of the facility which is allocable to the local furnishing of electric energy (determined without regard to this paragraph).\nIn the case of a facility financed with bonds issued before the date of the enactment of this paragraph which would cease to be tax-exempt by reason of the failure to meet the local furnishing requirement of subsection (a)(8) as a result of a service area expansion, such bonds shall not cease to be tax-exempt bonds (and section 150(b)(4) shall not apply) if the person engaged in such local furnishing by such facility makes an election described in subparagraph (B).\nFor purposes of this paragraph, the term “person” includes a group of related persons (within the meaning of section 144(a)(3)) which includes such person.\nFor purposes of subsection (a)(9), the term “local district heating or cooling facility” means property used as an integral part of a local district heating or cooling system.\nFor purposes of this paragraph, a local system includes facilities furnishing heating and cooling to an area consisting of a city and 1 contiguous county.\nFor purposes of subsection (a)(11), the term “high-speed intercity rail facilities” means any facility (not including rolling stock) for the fixed guideway rail transportation of passengers and their baggage between metropolitan statistical areas (within the meaning of section 143(k)(2)(B)) using vehicles that are reasonably expected to be capable of attaining a maximum speed in excess of 150 miles per hour between scheduled stops, but only if such facility will be made available to members of the general public as passengers.\nA bond issued as part of an issue described in subsection (a)(11) shall not be considered an exempt facility bond unless any proceeds not used within a 3-year period of the date of the issuance of such bond are used (not later than 6 months after the close of such period) to redeem bonds which are part of such issue.\nA bond issued as part of an issue described in subsection (a)(12) shall not be considered an exempt facility bond unless at least 80 percent of the net proceeds of the issue of which it is a part are used to finance property described in paragraph (1)(B)(i).\nFor purposes of this subsection, the terms “elementary school” and “secondary school” have the meanings given such terms by section 14101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 8801 ), as in effect on the date of the enactment of this subsection.\nExcept as otherwise provided in this subparagraph, the State may allocate the amount described in subparagraph (A) for any calendar year in such manner as the State determines appropriate.\nA State may elect to carry forward an unused limitation for any calendar year for 3 calendar years following the calendar year in which the unused limitation arose under rules similar to the rules of section 146(f), except that the only purpose for which the carryforward may be elected is the issuance of exempt facility bonds described in subsection (a)(13).\nFor purposes of subsection (a)(14), the term “qualified green building and sustainable design project” means any project which is designated by the Secretary, after consultation with the Administrator of the Environmental Protection Agency, as a qualified green building and sustainable design project and which meets the requirements of clauses (i), (ii), (iii), and (iv) of paragraph (4)(A).\nWithin 60 days after the end of the application period described in paragraph (3)(A), the Secretary, after consultation with the Administrator of the Environmental Protection Agency, shall designate qualified green building and sustainable design projects. At least one of the projects designated shall be located in, or within a 10-mile radius of, an empowerment zone as designated pursuant to section 1391, and at least one of the projects designated shall be located in a rural State. No more than one project shall be designated in a State. A project shall not be designated if such project includes a stadium or arena for professional sports exhibitions or games.\nThe project includes a brownfield site as defined by section 101(39) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ( 42 U.S.C. 9601 ), including a site described in subparagraph (D)(ii)(II)(aa) thereof.\nThe project receives specific State or local government resources which will support the project in an amount equal to at least $5,000,000. For purposes of the preceding sentence, the term “resources” includes tax abatement benefits and contributions in kind.\nAn issue shall not be treated as an issue described in subsection (a)(14) if any proceeds of such issue are used to provide any facility the principal business of which is the sale of food or alcoholic beverages for consumption on the premises.\nThe project is projected to provide permanent employment of at least 1,500 full time equivalents (150 full time equivalents in rural States) when completed and construction employment of at least 1,000 full time equivalents (100 full time equivalents in rural States).\nNo later than 30 days after the completion of the project, each project must certify to the Secretary that the net benefit of the tax-exempt financing was used for the purposes described in paragraph (4).\nThe term “local government” has the meaning given such term by section 1393(a)(5).\nThe term “net benefit of tax-exempt financing” means the present value of the interest savings (determined by a calculation established by the Secretary) which result from the tax-exempt status of the bonds.\nAn issue shall not be treated as an issue described in subsection (a)(14) if the aggregate face amount of bonds issued by the State or local government pursuant thereto for a project (when added to the aggregate face amount of bonds previously so issued for such project) exceeds an amount designated by the Secretary as part of the designation.\nThe Secretary may not allocate authority to issue qualified green building and sustainable design project bonds in an aggregate face amount exceeding $2,000,000,000.\nSubsection (a)(14) shall not apply with respect to any bond issued after  September 30, 2012 .\nThe aggregate amount allocated by the Secretary of Transportation under subparagraph (C) shall not exceed $30,000,000,000.\nAn issue shall not be treated as an issue described in subsection (a)(15) if the aggregate face amount of bonds issued pursuant to such issue for any qualified highway or surface freight transfer facility (when added to the aggregate face amount of bonds previously so issued for such facility) exceeds the amount allocated to such facility under subparagraph (C).\nThe Secretary of Transportation shall allocate the amount described in subparagraph (A) among qualified highway or surface freight transfer facilities in such manner as the Secretary determines appropriate.\nAn issue shall not be treated as an issue described in subsection (a)(15) unless at least 95 percent of the net proceeds of the issue is expended for qualified highway or surface freight transfer facilities within the 5-year period beginning on the date of issuance. If at least 95 percent of such net proceeds is not expended within such 5-year period, an issue shall be treated as continuing to meet the requirements of this paragraph if the issuer uses all unspent proceeds of the issue to redeem bonds of the issue within 90 days after the end of such 5-year period. The Secretary, at the request of the issuer, may extend such 5-year period if the issuer establishes that any failure to meet such period is due to circumstances beyond the control of the issuer.\nThe term “biomass” does not include paper which is commonly recycled.\nThe term “coal” means anthracite, bituminous coal, subbituminous coal, lignite, and peat.\nThe term “petroleum residue” means the carbonized product of high-boiling hydrocarbon fractions obtained in petroleum processing.\nSubject to subparagraph (B), the eligible components of an industrial carbon dioxide facility satisfies the requirements of this paragraph if such eligible components are designed to have a capture and storage percentage (as determined under subparagraph (C)) that is equal to or greater than 65 percent.\nIn the case of an industrial carbon dioxide facility designed with a capture and storage percentage that is less than 65 percent, the percentage of the cost of the eligible components installed in such facility that may be financed with tax-exempt bonds may not be greater than the designed capture and storage percentage.\nIn the case of eligible components that are designed to capture carbon dioxide solely from specific sources of emissions or portions thereof within an industrial carbon dioxide facility, the capture and storage percentage under this subparagraph shall be determined based only on such specific sources of emissions or portions thereof.\nThe Secretary shall issue such regulations or other guidance as are necessary to carry out the provisions of this subsection, including methods for determining costs attributable to an eligible component for purposes of paragraph (3)(A).\nSection 8 of the United States Housing Act of 1937, referred to in subsec. (d)(2)(A)(iii), (B)(i), (4)(C)(ii), is classified to  section 1437f of Title 42 , The Public Health and Welfare.\nSections 211 and 213 of the Federal Power Act, referred to in subsec. (f)(2)(A), are classified to sections 824j and 824 l , respectively, of Title 16, Conservation.\nThe date of the enactment of this paragraph, referred to in subsec. (f)(2)(A), is the date of enactment of  Pub. L. 102–486 , which was approved  Oct. 24, 1992 .\nThe date of the enactment of this paragraph, referred to in subsec. (f)(3), (4)(A), (B)(ii), is the date of enactment of  Pub. L. 104–188 , which was approved  Aug. 20, 1996 .\nThe Solid Waste Disposal Act, referred to in subsec. (h)(1), is title II of  Pub. L. 89–272 ,  Oct. 20, 1965 ,  79 Stat. 997 , as amended generally by  Pub. L. 94–580, §\u202f2 ,  Oct. 21, 1976 ,  90 Stat. 2795 . Subtitle C of the Solid Waste Disposal Act is classified generally to subchapter III (§\u202f6921 et seq.) of chapter 82 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 6901 of Title 42  and Tables.\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (h)(1), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nSection 14101 of the Elementary and Secondary Education Act of 1965, referred to in subsec. (k)(4), is  section 14101 of Pub. L. 89–10 , which was classified to  section 8801 of Title 20 , Education, prior to repeal by  Pub. L. 107–110, title X, §\u202f1011(5)(C) ,  Jan. 8, 2002 ,  115 Stat. 1986 .\nThe date of the enactment of this subsection, referred to in subsec. (k)(4), means the date of enactment of  Pub. L. 107–16 , which was approved  June 7, 2001 .\nThe enactment of this subsection, referred to in subsec. ( l )(3)(A), probably means the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nThe date of the enactment of this subsection, referred to in subsec. (m)(1)(A), is the date of enactment of  Pub. L. 109–59 , which was approved  Aug. 10, 2005 .\nA prior section 142,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 40 , enumerated individuals not eligible for standard deduction, prior to repeal by  Pub. L. 95–30, title I, §\u202f101(d)(1) ,  May 23, 1977 ,  91 Stat. 133 , applicable to taxable years beginning after  Dec. 31, 1976 .\n2022—Subsec. ( o )(1)(B).  Pub. L. 117–169  substituted “section 45Q(e)(3)” for “section 45Q(e)(1)”.\n2021—Subsec. (a)(16).  Pub. L. 117–58, §\u202f80401(a) , added par. (16).\nSubsec. (a)(17).  Pub. L. 117–58, §\u202f80402(a) , added par. (17).\nSubsec. (m)(2)(A).  Pub. L. 117–58, §\u202f80403(a) , substituted “$30,000,000,000” for “$15,000,000,000”.\nSubsec. (n).  Pub. L. 117–58, §\u202f80401(b) , added subsec. (n).\nSubsec. ( o ).  Pub. L. 117–58, §\u202f80402(b) , added subsec. ( o ).\n2018—Subsec. (d)(2)(C).  Pub. L. 115–141  inserted “section” before “42(i)(3)(D)”.\n2009—Subsec. (i)(1).  Pub. L. 111–5  substituted “be capable of attaining a maximum speed in excess of” for “operate at speeds in excess of”.\n2008—Subsec. (d)(2)(B).  Pub. L. 110–289, §\u202f3005(a) , designated existing provisions as cl. (i), inserted heading, and added cls. (ii) to (iv).\nSubsec. (d)(2)(C).  Pub. L. 110–289, §\u202f3008(b) , added subpar. (C).\nSubsec. (d)(2)(D).  Pub. L. 110–289, §\u202f3008(c) , added subpar. (D).\nSubsec. (d)(2)(E).  Pub. L. 110–289, §\u202f3009(a) , added subpar. (E).\nSubsec. (d)(3)(A).  Pub. L. 110–289, §\u202f3010(a) , inserted at end “The preceding sentence shall not apply with respect to any project for any year if during such year no residential unit in the project is occupied by a new resident whose income exceeds the applicable income limit.”\nSubsec. (d)(3)(C).  Pub. L. 110–289, §\u202f3008(a) , added subpar. (C).\nSubsec. ( l )(8).  Pub. L. 110–343, §\u202f307(a) , substituted “ September 30, 2012 ” for “ September 30, 2009 ”.\nSubsec. ( l )(9).  Pub. L. 110–343, §\u202f307(b) , substituted “ October 1, 2012 ” for “ October 1, 2009 ”.\n2006—Subsec. (d)(2)(B).  Pub. L. 109–222  substituted “Subsections (g) and (h) of section 7872” for “Section 7872(g)”.\n2005—Subsec. (a)(15).  Pub. L. 109–59, §\u202f11143(a) , added par. (15).\nSubsec. (m).  Pub. L. 109–59, §\u202f11143(b) , added subsec. (m).\n2004—Subsec. (a)(14).  Pub. L. 108–357, §\u202f701(a) , added par. (14).\nSubsec. ( l ).  Pub. L. 108–357, §\u202f701(b) , added subsec. ( l ).\n2001—Subsec. (a)(13).  Pub. L. 107–16, §\u202f422(a) , added par. (13).\nSubsec. (k).  Pub. L. 107–16, §\u202f422(b) , added subsec. (k).\n1998—Subsec. (f)(3)(A)(ii).  Pub. L. 105–206  struck out comma after “1997”.\n1996—Subsec. (b)(1)(A).  Pub. L. 104–188, §\u202f1704(j)(7) , provided that  section 1921(b)(2) of Pub. L. 102–486  shall be applied as if a comma appeared after “(2)” in the material proposed to be stricken. See 1992 Amendment note below.\nSubsec. (f)(3), (4).  Pub. L. 104–188, §\u202f1608(a) , added pars. (3) and (4).\n1992—Subsec. (a)(12).  Pub. L. 102–486, §\u202f1921(a) , added par. (12).\nSubsec. (b)(1)(A).  Pub. L. 102–486, §\u202f1921(b)(2) , which directed the substitution of “(2), (3), or (12)” for “(2) or (3)”, was executed by making the substitution for “(2), or (3)”. See 1996 Amendment note above.\nSubsec. (f).  Pub. L. 102–486, §\u202f1919(a) , amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “For purposes of subsection (a)(8), the local furnishing of electric energy or gas from a facility shall only include furnishing solely within the area consisting of—\n“(1) a city and 1 contiguous county, or\n“(2) 2 contiguous counties.”\nSubsec. (j).  Pub. L. 102–486, §\u202f1921(b)(1) , added subsec. (j).\n1989—Subsec. (d)(2)(B).  Pub. L. 101–239, §\u202f7108(e)(3) , inserted at end “Section 7872(g) shall not apply in determining the income of individuals under this subparagraph.”\nSubsec. (d)(4)(B)(iii).  Pub. L. 101–239, §\u202f7108(n)(1) , substituted “exceed ½” for “exceed ⅓”.\nSubsec. (i)(1).  Pub. L. 101–239, §\u202f7816(s)(1) , inserted heading “In general”.\n1988—Subsec. (a)(11).  Pub. L. 100–647, §\u202f6180(a) , added par. (11).\nSubsec. (b)(1)(B)(ii).  Pub. L. 100–647, §\u202f1013(a)(39) , inserted “section” before “168(i)(3)”.\nSubsec. (c).  Pub. L. 100–647, §\u202f6180(b)(2) , substituted “mass commuting facilities and high-speed intercity rail facilities” for “and mass commuting facilities” in heading and substituted “paragraph (1), (2), (3) or (11) of subsection (a)” for “paragraph (1), (2), or (3) of subsection (a)” in par. (1) and in introductory text of par. (2).\nSubsec. (d)(4)(B)(iii).  Pub. L. 100–647, §\u202f1013(a)(1) , substituted “average gross rent” for “average rent”.\nSubsec. (i).  Pub. L. 100–647, §\u202f6180(b)(1) , added subsec. (i).\nAmendment by  Pub. L. 117–169  applicable to facilities or equipment the construction of which begins after  Aug. 16, 2022 , see  section 13104(i)(2) of Pub. L. 117–169 , set out in a note under  section 45Q of this title .\nPub. L. 117–58, div. H, title IV, §\u202f80401(d) ,  Nov. 15, 2021 ,  135 Stat. 1331 , provided that:  “The amendments made by this section [amending this section and  section 146 of this title ] shall apply to obligations issued in calendar years beginning after the date of the enactment of this Act [ Nov. 15, 2021 ].”\nAmendment by section 80402(a), (b) of  Pub. L. 117–58  applicable to obligations issued after  Dec. 31, 2021 , see  section 80402(f) of Pub. L. 117–58 , set out as a note under  section 45Q of this title .\nPub. L. 117–58, div. H, title IV, §\u202f80403(b) ,  Nov. 15, 2021 ,  135 Stat. 1335 , provided that:  “The amendment made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Nov. 15, 2021 ].”\nPub. L. 111–5, div. B, title I, §\u202f1504(b) ,  Feb. 17, 2009 ,  123 Stat. 355 , provided that:  “The amendment made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 110–289, div. C, title I, §\u202f3005(b) ,  July 30, 2008 ,  122 Stat. 2885 , as amended by  Pub. L. 112–240, title III, §\u202f303(a) ,  Jan. 2, 2013 ,  126 Stat. 2329 ;  Pub. L. 113–295, div. A, title I, §\u202f113(a) ,  Dec. 19, 2014 ,  128 Stat. 4014 ;  Pub. L. 114–113, div. Q, title I, §\u202f132(a) ,  Dec. 18, 2015 ,  129 Stat. 3055 , provided that:  \n “The amendments made by this section [amending this section] shall apply to— \n “(1)  determinations made after the date of the enactment of this Act [ July 30, 2008 ], in the case of any qualified building (as defined in section 142(d)(2)(B)(iii) of the Internal Revenue Code of 1986)— “(A)  with respect to which housing credit dollar amounts have been allocated on or before the date of the enactment of this Act [ July 30, 2008 ], or \n \n “(B)  with respect to buildings placed in service before such date of enactment, to the extent paragraph (1) of section 42(h) of such Code does not apply to such building by reason of paragraph (4) thereof, but only with respect to bonds issued before such date of enactment, and \n \n \n “(2)  determinations made after the date of enactment of this Act [ July 30, 2008 ], in the case of qualified buildings (as so defined)— “(A)  with respect to which housing credit dollar amounts are allocated after the date of the enactment of this Act [ July 30, 2008 ], or \n \n “(B)  with respect to which buildings placed in service after the date of enactment of this Act [ July 30, 2008 ], to the extent paragraph (1) of section 42(h) of such Code does not apply to such building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date of enactment.”\n[ Pub. L. 114–113, div. Q, title I, §\u202f132(b) ,  Dec. 18, 2015 ,  129 Stat. 3055 , provided that:  “The amendments made by this section [amending  section 3005(b) of Pub. L. 110–289 , set out above] shall take effect as if included in the enactment of section 3005 of the Housing Assistance Tax Act of 2008 [div. C of  Pub. L. 110–289 ].” \n]\n[ Pub. L. 113–295, div. A, title I, §\u202f113(b) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendment made by this section [amending  section 3005(b) of Pub. L. 110–289 , set out above] shall take effect as if included in the enactment of section 3005 of the Housing Assistance Tax Act of 2008 [div. C of  Pub. L. 110–289 ].” \n]\n[ Pub. L. 112–240, title III, §\u202f303(b) ,  Jan. 2, 2013 ,  126 Stat. 2329 , provided that:  “The amendment made by this section [amending  section 3005(b) of Pub. L. 110–289 , set out above] shall take effect as if included in the enactment of section 3005 of the Housing Assistance Tax Act of 2008 [div. C of  Pub. L. 110–289 ].” \n]\nPub. L. 110–289, div. C, title I, §\u202f3008(d) ,  July 30, 2008 ,  122 Stat. 2887 , provided that:  “The amendments made by this section [amending this section] shall apply to determinations of the status of qualified residential rental projects for periods beginning after the date of the enactment of this Act [ July 30, 2008 ], with respect to bonds issued before, on, or after such date.”\nPub. L. 110–289, div. C, title I, §\u202f3009(b) ,  July 30, 2008 ,  122 Stat. 2888 , provided that:  “The amendment made by this section [amending this section] shall apply to determinations of area median gross income for calendar years after 2008.”\nPub. L. 110–289, div. C, title I, §\u202f3010(b) ,  July 30, 2008 ,  122 Stat. 2888 , provided that:  “The amendment made by this section [amending this section] shall apply to years ending after the date of the enactment of this Act [ July 30, 2008 ].”\nPub. L. 109–222, title II, §\u202f209(c) ,  May 17, 2006 ,  120 Stat. 352 , provided that:  “The amendment made by this section [amending this section and  section 7872 of this title ] shall apply to calendar years beginning after  December 31, 2005 , with respect to loans made before, on, or after such date.”\nPub. L. 109–59, title XI, §\u202f11143(d) ,  Aug. 10, 2005 ,  119 Stat. 1965 , provided that:  “The amendments made by this section [amending this section and  section 146 of this title ] apply to bonds issued after the date of the enactment of this Act [ Aug. 10, 2005 ].”\nPub. L. 108–357, title VII, §\u202f701(e) ,  Oct. 22, 2004 ,  118 Stat. 1540 , provided that:  “The amendments made by this section [amending this section and  section 146 of this title ] shall apply to bonds issued after  December 31, 2004 .”\nPub. L. 107–16, title IV, §\u202f422(f) ,  June 7, 2001 ,  115 Stat. 66 , provided that:  “The amendments made by this section [amending this section and sections 146 and 147 of this title] shall apply to bonds issued after  December 31, 2001 .”\nPub. L. 102–486, title XIX, §\u202f1919(b) ,  Oct. 24, 1992 ,  106 Stat. 3026 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to obligations issued before, on, or after the date of the enactment of this Act [ Oct. 24, 1992 ].”\nPub. L. 102–486, title XIX, §\u202f1921(c) ,  Oct. 24, 1992 ,  106 Stat. 3028 , provided that:  “The amendments made by this section [amending this section and  section 146 of this title ] shall apply to bonds issued after the date of the enactment of this Act [ Oct. 24, 1992 ].”\nAmendment by section 7108(e)(3), (n)(1) of  Pub. L. 101–239  applicable, except as otherwise provided, to determinations under  section 42 of this title  with respect to housing credit dollar amounts allocated from State housing credit ceilings for calendar years after 1989, see  section 7108(r) of Pub. L. 101–239 , set out as a note under  section 42 of this title .\nAmendment by  section 7816(s) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 1013(a)(1), (39) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6180(c) ,  Nov. 10, 1988 ,  102 Stat. 3728 , provided that:  “The amendments made by this section [amending sections 142, 146, and 147 of this title] shall apply to bonds issued after the date of enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 108–357, title VII, §\u202f701(d) ,  Oct. 22, 2004 ,  118 Stat. 1539 , as amended by  Pub. L. 110–343, div. B, title III, §\u202f307(c) ,  Oct. 3, 2008 ,  122 Stat. 3849 , provided that:  “Each issuer shall maintain, on behalf of each project, an interest bearing reserve account equal to 1 percent of the net proceeds of any bond issued under this section for such project. Not later than 5 years after the date of issuance of the last issue with respect to such project, the Secretary of the Treasury, after consultation with the Administrator of the Environmental Protection Agency, shall determine whether the project financed with such bonds has substantially complied with the terms and conditions described in section 142( l )(4) of the Internal Revenue Code of 1986 (as added by this section). If the Secretary, after such consultation, certifies that the project has substantially complied with such terms and conditions and meets the commitments set forth in the application for such project described in section 142( l )(4) of such Code, amounts in the reserve account, including all interest, shall be released to the project. If the Secretary determines that the project has not substantially complied with such terms and conditions, amounts in the reserve account, including all interest, shall be paid to the United States Treasury.”\nPub. L. 104–188, title I, §\u202f1608(b) ,  Aug. 20, 1996 ,  110 Stat. 1841 , provided that:  “The use of the term ‘person’ in section 142(f)(3) of the Internal Revenue Code of 1986, as added by subsection (a), shall not be construed to affect the tax-exempt status of interest on any bonds issued before the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 104–188, title I, §\u202f1804 ,  Aug. 20, 1996 ,  110 Stat. 1893 , provided that:  “Sections 142(f)(3) (as added by section 1608) and 147(d) of the Internal Revenue Code of 1986 shall not apply in determining whether any private activity bond issued after the date of the enactment of this Act [ Aug. 20, 1996 ] and used to finance the acquisition of the Snettisham hydroelectric project from the Alaska Power Administration is a qualified bond for purposes of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'For purposes of this title, the term “qualified mortgage bond” means a bond which is issued as part of a qualified mortgage issue.\nClause (i) (and clause (iv) of subparagraph (A)) shall not be construed to require amounts of less than $250,000 to be used to redeem bonds. The Secretary may by regulation treat related issues as 1 issue for purposes of the preceding sentence.\nAn issue meets the requirements of this subsection only if all of the residences for which owner-financing is provided under the issue meet the requirements of paragraph (1).\nAn issue meets the requirements of this subsection only if 95 percent or more of the net proceeds of such issue are used to finance the residences of mortgagors who had no present ownership interest in their principal residences at any time during the 3-year period ending on the date their mortgage is executed.\nFor purposes of paragraph (1), a mortgagor’s interest in the residence with respect to which the financing is being provided shall not be taken into account.\nAn issue meets the requirements of this subsection only if the acquisition cost of each residence the owner-financing of which is provided under the issue does not exceed 90 percent of the average area purchase price applicable to such residence.\nFor purposes of paragraph (1), the term “average area purchase price” means, with respect to any residence, the average purchase price of single family residences (in the statistical area in which the residence is located) which were purchased during the most recent 12-month period for which sufficient statistical information is available. The determination under the preceding sentence shall be made as of the date on which the commitment to provide the financing is made (or, if earlier, the date of the purchase of the residence).\nFor purposes of this subsection, to the extent provided in regulations, the determination of average area purchase price shall be made separately with respect to 1 family, 2 family, 3 family, and 4 family residences.\nIn the case of a targeted area residence, paragraph (1) shall be applied by substituting “110 percent” for “90 percent”.\nParagraph (1) shall not apply with respect to any qualified home improvement loan.\nAn issue meets the requirements of this subsection only if all owner-financing provided under the issue is provided for mortgagors whose family income is 115 percent or less of the applicable median family income.\nFor purposes of this subsection, the family income of mortgagors, and area median gross income, shall be determined by the Secretary after taking into account the regulations prescribed under section 8 of the United States Housing Act of 1937 (or, if such program is terminated, under such program as in effect immediately before such termination).\nIf the residence (for which financing is provided under the issue) is located in a high housing cost area and the limitation determined under this paragraph is greater than the limitation otherwise applicable under paragraph (1), there shall be substituted for the income limitation in paragraph (1), a limitation equal to the percentage determined under subparagraph (B) of the area median gross income for such area.\nFor purposes of this paragraph, the term “high housing cost area” means any statistical area for which the housing cost/income ratio is greater than 1.2.\nFor purposes of clause (i), the applicable housing price ratio for any area is the new housing price ratio or the existing housing price ratio, whichever results in the housing cost/income ratio being closer to 1.\nThe existing housing price ratio for any area is the ratio determined in accordance with clause (iii) but with respect to residences described in subsection (e)(3)(B).\nAn issue meets the requirements of this subsection only if such issue meets the requirements of paragraph (2) of this subsection and, in the case of an issue described in subsection (b)(1), such issue also meets the requirements of paragraph (3) of this subsection. Such requirements shall be in addition to the requirements of section 148.\nIn determining the effective rate of interest on any mortgage for purposes of this paragraph, there shall be taken into account all fees, charges, and other amounts borne by the mortgagor which are attributable to the mortgage or to the bond issue.\nFor purposes of subparagraph (A), in determining the amount earned on all nonpurpose investments, any gain or loss on the disposition of such investments shall be taken into account.\nThe amount required to be paid or credited to mortgagors under subparagraph (A) (determined under this paragraph without regard to this subparagraph) shall be reduced by the unused paragraph (2) amount.\nFor purposes of clause (i), the unused paragraph (2) amount is the amount which (if it were treated as an interest payment made by mortgagors) would result in the excess referred to in paragraph (2)(A) being equal to 1.125 percentage points. Such amount shall be fixed and determined as of the yield determination date.\nThe Secretary shall permit any simplified system of accounting for purposes of this paragraph which the issuer establishes to the satisfaction of the Secretary will assure that the purposes of this paragraph are carried out.\nFor purposes of this paragraph, the term “nonpurpose investment” has the meaning given such term by section 148(f)(6)(A).\nAn issue meets the requirements of this subsection only if at least 20 percent of the proceeds of the issue which are devoted to providing owner-financing is made available (with reasonable diligence) for owner-financing of targeted area residences for at least 1 year after the date on which owner-financing is first made available with respect to targeted area residences.\nNothing in paragraph (1) shall be treated as requiring the making available of an amount which exceeds 40 percent of the average annual aggregate principal amount of mortgages executed during the immediately preceding 3 calendar years for single-family, owner-occupied residences located in targeted areas within the jurisdiction of the issuing authority.\nAn issue meets the requirements of this subsection only if no part of the proceeds of such issue is used to acquire or replace existing mortgages.\nAn issue meets the requirements of this subsection only if each mortgage with respect to which owner-financing has been provided under such issue may be assumed only if the requirements of subsections (c), (d), and (e), and the requirements of paragraph (1) or (3)(B) of subsection (f) (whichever applies), are met with respect to such assumption.\nFor purposes of paragraph (1), the term “qualified census tract” means a census tract in which 70 percent or more of the families have income which is 80 percent or less of the statewide median family income.\nThe determination under subparagraph (A) shall be made on the basis of the most recent decennial census for which data are available.\nThe term “mortgage” means any owner-financing.\nThe term “metropolitan statistical area” includes the area defined as such by the Secretary of Commerce.\nFor purposes of this paragraph, if there is insufficient recent statistical information with respect to a county (or portion thereof) described in subparagraph (A)(ii), the Secretary may substitute for such county (or portion thereof) another area for which there is sufficient recent statistical information.\nIn the case of any portion of a State which is not within a county, subparagraphs (A)(ii) and (C) shall be applied by substituting for “county” an area designated by the Secretary which is the equivalent of a county.\nThe term “acquisition cost” means the cost of acquiring the residence as a completed residential unit.\nIn the case of a qualified rehabilitation loan, for purposes of subsection (e), the term “acquisition cost” includes the cost of the rehabilitation.\nAll determinations of yield, effective interest rates, and amounts required to be paid or credited to mortgagors or paid to the United States under subsection (g) shall be made on an actuarial basis taking into account the present value of money.\nIn the case of any issue to provide financing to a cooperative housing corporation with respect to cooperative housing not located in a targeted area, to the extent provided in regulations, such issue may be combined with 1 or more other issues for purposes of determining whether the requirements of subsection (h) are met.\nThe term “cooperative housing corporation” has the meaning given to such term by section 216(b)(1).\nSubparagraph (A) shall not apply to any bond issued after the date specified in subsection (a)(1)(B).\nFor purposes of this paragraph, the term “limited equity cooperative housing” means any dwelling unit which a person is entitled to occupy by reason of his ownership of stock in a qualified cooperative housing corporation.\nIf a cooperative housing corporation makes an election under this paragraph, section 216 shall not apply with respect to such corporation (or any successor thereof) during the qualified project period (as defined in section 142(d)(2)).\nSubparagraph (A)(i) shall not apply to limited equity cooperative housing unless the cooperative housing corporation continues to be a qualified cooperative housing corporation at all times during the qualified project period (as defined in section 142(d)(2)).\nAny election under this paragraph, once made, shall be irrevocable.\nIn the case of a residence which is located in a high housing cost area (as defined in section 143(f)(5)), the interest of a governmental unit in such residence by reason of financing provided under any qualified program shall not be taken into account under this section (other than subsection (m)), and the acquisition cost of the residence which is taken into account under subsection (e) shall be such cost reduced by the amount of such financing.\nNotwithstanding the requirements of subsection (i)(1), the proceeds of a qualified mortgage issue may be used to refinance a mortgage on a residence which was originally financed by the mortgagor through a qualified subprime loan.\nThe term “qualified subprime loan” means an adjustable rate single-family residential mortgage loan made after  December 31, 2001 , and before  January 1, 2008 , that the bond issuer determines would be reasonably likely to cause financial hardship to the borrower if not refinanced.\nThis paragraph shall not apply to any bonds issued after  December 31, 2010 .\nAt the election of the taxpayer, if the principal residence (within the meaning of section 121) of such taxpayer was damaged as the result of a federally declared disaster occurring before  January 1, 2010 , any owner-financing provided in connection with the repair or reconstruction of such residence shall be treated as a qualified rehabilitation loan.\nFor purposes of this paragraph, the term “federally declared disaster” has the meaning given such term by section 165(h)(3)(C)(i). 1 1 \u202fSee References in Text note below.\nAn election under this paragraph may not be revoked except with the consent of the Secretary.\nIf a taxpayer elects the application of this paragraph, paragraph (11) shall not apply with respect to the purchase or financing of any residence by such taxpayer.\nAn issue meets the requirements of this paragraph only if each mortgagor to whom financing is provided under the issue is a qualified veteran.\nAn issue meets the requirements of this paragraph only if it is a general obligation of a State which issued qualified veterans’ mortgage bonds before  June 22, 1984 .\nAn issue meets the requirements of this paragraph only if the aggregate amount of bonds issued pursuant thereto (when added to the aggregate amount of qualified veterans’ mortgage bonds previously issued by the State during the calendar year) does not exceed the State veterans limit for such calendar year.\nIn the case of calendar years beginning before 2010, clause (ii) shall be applied by substituting for each of the dollar amounts therein an amount equal to the applicable percentage of such dollar amount. For purposes of the preceding sentence, the applicable percentage shall be determined in accordance with the following table: \n \n \n \n \n \n \n \n \u2001 For Calendar Year: Applicable percentage is: \n \n \n \u2001 2006 20 percent\u202f\u202f \n \u2001 2007 40 percent\u202f\u202f \n \u2001 2008 60 percent\u202f\u202f \n \u2001 2009 \u202f80 percent.\nClause (i) shall not apply to any bond issued to advance refund another bond.\nSuch term shall not include any indebtedness to the extent such indebtedness is federally-subsidized indebtedness solely by reason of being a qualified home improvement loan (as defined in subsection (k)(4)).\nThe federally-subsidized amount with respect to any indebtedness is the amount equal to 6.25 percent of the highest principal amount of the indebtedness for which the taxpayer was liable.\nThe term “holding period percentage” means the percentage determined in accordance with the following table: \n \n \n \n \n \n \n \n \u2001 If the disposition occurs during a year after the testing date which is: The holding period percentage is: \n \n \n \u2001 The 1st such year 20 \n \u2001 The 2d such year 40 \n \u2001 The 3d such year 60 \n \u2001 The 4th such year 80 \n \u2001 The 5th such year 100 \n \u2001 The 6th such year 80 \n \u2001 The 7th such year 60 \n \u2001 The 8th such year 40 \n \u2001 The 9th such year 20.\nIf the federally-subsidized indebtedness is completely repaid during any year of the 4-year period beginning on the testing date, the holding period percentage for succeeding years shall be determined by reducing ratably to zero over the succeeding 5 years the holding period percentage which would have been determined under this subparagraph had the taxpayer disposed of his interest in the residence on the date of the repayment.\nFor purposes of paragraph (1), gain shall be taken into account whether or not recognized, and the adjusted basis of the taxpayer’s interest in the residence shall be determined without regard to sections 1033(b) and 1034(e) (as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) for purposes of determining gain.\nIn the case of a disposition other than a sale, exchange, or involuntary conversion, gain shall be determined as if the interest had been sold for its fair market value.\nIn the case of property which (as a result of its destruction in whole or in part by fire, storm, or other casualty) is compulsorily or involuntarily converted, paragraph (1) shall not apply to such conversion if the taxpayer purchases (during the period specified in section 1033(a)(2)(B)) property for use as his principal residence on the site of the converted property. For purposes of subparagraph (A), the adjusted basis of the taxpayer in the residence shall not be adjusted for any gain or loss on a conversion to which this subparagraph applies.\nNo adjustment shall be made to the basis of any property for the increase in tax under this subsection.\nExcept as provided in subparagraph (C) and in regulations prescribed by the Secretary, if 2 or more persons hold interests in any residence and are jointly liable for the federally-subsidized indebtedness, the recapture amount shall be determined separately with respect to their respective interests in the residence.\nParagraph (1) shall not apply to any transfer on which no gain or loss is recognized under section 1041. In any such case, the transferee shall be treated under this subsection in the same manner as the transferor would have been treated had such transfer not occurred.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subsection, including regulations dealing with dispositions of partial interests in a residence.\nThe date of the enactment of this subparagraph, referred to in subsec. (d)(2)(D), is the date of enactment of  Pub. L. 109–432 , which was approved  Dec. 20, 2006 .\nSection 8 of the United States Housing Act of 1937, referred to in subsec. (f)(2), is classified to  section 1437f of Title 42 , The Public Health and Welfare.\nThe Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (k)(11), is  Pub. L. 93–288 ,  May 22, 1974 ,  88 Stat. 143 , as in effect on the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 . The Act is classified principally to chapter 68 (§\u202f5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 5121 of Title 42  and Tables.\nPar. (3) of section 165(h), referred to in subsec. (k)(13)(C), was repealed by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(27)(A) ,  Dec. 19, 2014 ,  128 Stat. 4040 . However, the term “federally declared disaster” is defined elsewhere in that section.\nThe date of the enactment of this subsection, referred to in subsec. ( l )(5)(B), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nSection 1034(e) (as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997), referred to in subsec. (m)(6)(A), means  section 1034(e) of this title  as in effect on the day before the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 . Section 1034 was repealed by  Pub. L. 105–34, title III, §\u202f312(b) ,  Aug. 5, 1997 ,  111 Stat. 839 .\nA prior section 143, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 41 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title VIII, §\u202f802(b) ,  83 Stat. 677 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1901(a)(22) ,  90 Stat. 1767 ;  May 23, 1977 ,  Pub. L. 95–30, title I, §\u202f101(d)(4) ,  91 Stat. 133 ;  July 18, 1984 ,  Pub. L. 98–369, div. A, title IV, §\u202f423(c)(1) ,  98 Stat. 800 , related to determination of marital status, prior to the general revision of this part by  Pub. L. 99–514 . See  section 7703 of this title .\nProvisions similar to this section were contained in  section 103A of this title  prior to repeal by  Pub. L. 99–514 .\n2014—Subsec. (k)(12), (13).  Pub. L. 113–295  redesignated par. (12), relating to special rules for residences destroyed in federally declared disasters, as (13).\n2008—Subsec. (d)(2)(D).  Pub. L. 110–245, §\u202f103(a) , struck out “and before  January 1, 2008 ” after “enactment of this subparagraph”.\nSubsec. (k)(11).  Pub. L. 110–289, §\u202f3026(a) , substituted “ May 1, 2008 ” for “ December 31, 1996 ” and “ January 1, 2010 ” for “ January 1, 1999 ” in concluding provisions.\nSubsec. (k)(12).  Pub. L. 110–343  added par. (12) relating to special rules for residences destroyed in federally declared disasters.\nPub. L. 110–289, §\u202f3021(b)(1) , added par. (12) relating to special rules for subprime refinancings.\nSubsec. ( l )(3)(B)(ii).  Pub. L. 110–245, §\u202f103(b) , substituted “$100,000,000” for “$25,000,000” wherever appearing.\nSubsec. ( l )(4).  Pub. L. 110–245, §\u202f103(c) , reenacted heading without change and amended text generally. Prior to amendment, par. (4) defined “qualified veteran” differently with respect to different States.\n2006—Subsec. (d)(2)(D).  Pub. L. 109–432, §\u202f416(a) , added subpar. (D).\nSubsec. ( l )(3)(B).  Pub. L. 109–222, §\u202f203(b)(1) , reenacted heading without change, substituted introductory provisions of cl. (i) for “A State veterans limit for any calendar year is the amount equal to—” and inserted heading, redesignated former cls. (i) and (ii) as subcls. (I) and (II), respectively, of cl. (i) and adjusted margins, and added cls. (ii) to (iv).\nSubsec. ( l )(3)(B)(iv).  Pub. L. 109–432, §\u202f411(a) , struck out heading and text of cl. (iv). Text read as follows: “The State veterans limit for the States specified in clause (ii) for any calendar year after 2010 is zero.”\nSubsec. ( l )(4).  Pub. L. 109–222, §\u202f203(a)(1) , amended par. (4) generally. Prior to amendment, par. (4) defined the term “qualified veteran”.\n1997—Subsec. (i)(1)(C)(i)(I).  Pub. L. 105–34, §\u202f312(d)(1) , substituted “section 121” for “section 1034”.\nSubsec. (k)(11).  Pub. L. 105–34, §\u202f914 , added par. (11).\nSubsec. (m)(6)(A).  Pub. L. 105–34, §\u202f312(d)(3) , inserted “(as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997)” after “1034(e)”.\n1996—Subsec. (d)(2)(C).  Pub. L. 104–188, §\u202f1703(n)(3) , substituted “thereon,” for “thereon.”.\nSubsec. (m)(4)(C)(ii).  Pub. L. 104–188, §\u202f1702(d)(2) , substituted “any year of the 4-year period” for “any month of the 10-year period”, “succeeding years” for “succeeding months”, and “to zero over the succeeding 5 years” for “over the remainder of such period (or, if lesser, over 5 years)”.\n1993—Subsec. (a)(1).  Pub. L. 103–66, §\u202f13141(a) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows:\n“(A)  In general .—For purposes of this title, the term ‘qualified mortgage bond’ means a bond which is issued as part of a qualified mortgage issue.\n“(B)  Termination on  June 30, 1992 .—No bond issued after  June 30, 1992 , may be treated as a qualified mortgage bond.”\nSubsec. (d)(2)(C).  Pub. L. 103–66, §\u202f13141(d)(1) , added subpar. (C).\nSubsec. (i)(1)(C).  Pub. L. 103–66, §\u202f13141(d)(2) , added subpar. (C).\nSubsec. (k)(3)(B)(iii).  Pub. L. 103–66, §\u202f13141(d)(3) , inserted “(other than land described in subsection (i)(1)(C)(i))” after “cost of land”.\nSubsec. (k)(7).  Pub. L. 103–66, §\u202f13141(e) , inserted at end “Subparagraph (B) shall not apply to any 2-family residence if the residence is a targeted area residence and the family income of the mortgagor meets the requirement of subsection (f)(3)(B).”\nSubsec. (k)(10).  Pub. L. 103–66, §\u202f13141(c) , added par. (10).\n1991—Subsec. (a)(1)(B).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ” in heading and text.\n1990—Subsec. (a)(1)(B).  Pub. L. 101–508, §\u202f11408(a) , substituted “ December 31, 1991 ” for “ September 30, 1990 ” in heading and text.\nSubsec. (m)(1).  Pub. L. 101–508, §\u202f11408(c)(3)(A) , substituted “increased by the lesser of—” and subpars. (A) and (B) for “increased by the recapture amount with respect to such indebtedness.”\nSubsec. (m)(2)(B).  Pub. L. 101–508, §\u202f11408(c)(1)(C) , substituted “9 years” for “10 years”.\nSubsec. (m)(4)(A)(iii).  Pub. L. 101–508, §\u202f11408(c)(2)(A) , added cl. (iii).\nSubsec. (m)(4)(C)(i).  Pub. L. 101–508, §\u202f11408(c)(1)(A) , substituted heading for one which read: “Dispositions during 1st 5 years” and amended text generally. Prior to amendment, text read as follows: “If the disposition of the taxpayer’s interest in the residence occurs during the 5-year period beginning on the testing date, the holding period percentage is the percentage determined by dividing the number of full months during which the requirements of subparagraph (D) were met by 60.”\nSubsec. (m)(4)(C)(ii), (iii).  Pub. L. 101–508, §\u202f11408(c)(1)(B) , redesignated cl. (iii) as (ii) and struck out former cl. (ii) “Dispositions during 2d 5 years” which read as follows: “If the disposition of the taxpayer’s interest in the residence occurs during the 5-year period following the 5-year period described in clause (i), the holding period percentage is the percentage determined by dividing—\n“(I) the excess of 120 over the number of full months during which such requirements were met by\n“(II) 60.”\nSubsec. (m)(4)(E).  Pub. L. 101–508, §\u202f11408(c)(2)(B) , added subpar. (E).\nSubsec. (m)(5).  Pub. L. 101–508, §\u202f11408(c)(2)(C)(i) , added heading and struck out former heading which read: “Reduction of recapture amount if taxpayer meets certain income limitations”.\nSubsec. (m)(5)(A).  Pub. L. 101–508, §\u202f11408(c)(2)(C)(i) , added subpar. (A) and struck out former subpar. (A) “In general” which read as follows: “The recapture amount which would (but for this paragraph) apply with respect to any disposition during a taxable year shall be reduced (but not below zero) by 2 percent of such amount for each $100 by which adjusted qualifying income exceeds the modified adjusted gross income of the taxpayer for such year.”\nSubsec. (m)(5)(B), (C).  Pub. L. 101–508, §\u202f11408(c)(2)(C) , redesignated subpar. (C) as (B), substituted “paragraph (4)” for “this paragraph” in introductory provisions, and struck out former subpar. (B) “Adjusted qualifying income” which read as follows: “For purposes of this paragraph, the term ‘adjusted qualifying income’ means the amount equal to the sum of—\n“(i) $5,000, plus\n“(ii) the product of—\n“(I) the highest family income which (as of the date the financing was provided) would have met the requirement of subsection (f) with respect to the residence, and\n“(II) the percentage equal to the sum of 100 percent plus 5 percent for each full year during the period beginning on such date and ending on the date of the disposition.\nFor purposes of clause (ii)(I), highest family income shall be determined without regard to subsection (f)(3)(A) and on the basis of the number of members of the taxpayer’s family as of the date of the disposition.”\nSubsec. (m)(6).  Pub. L. 101–508, §\u202f11408(c)(3)(B)(i) , substituted “Special rules relating to limitation” for “Limitation” in heading.\nSubsec. (m)(6)(A).  Pub. L. 101–508, §\u202f11408(c)(3)(B)(ii) , (iii), struck out at beginning “In no event shall the recapture amount of the taxpayer with respect to any indebtedness exceed 50 percent of the gain (if any) on the disposition of the taxpayer’s interest in the residence.” and substituted “paragraph (1)” for “the preceding sentence”.\nSubsec. (m)(7)(B)(ii).  Pub. L. 101–508, §\u202f11408(c)(3)(C) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the amounts described in paragraph (5)(B)(ii) for each category of family size for each year of the 10-year period beginning on the date the financing was provided.”\n1989—Subsec. (a)(1)(B).  Pub. L. 101–239  substituted “ September 30, 1990 ” for “ December 31, 1989 ” in heading and in text.\n1988—Subsec. (a)(1)(B).  Pub. L. 100–647, §\u202f4005(a)(1) , substituted “1989” for “1988” in heading and in text.\nSubsec. (a)(2)(A).  Pub. L. 100–647, §\u202f4005(f) , inserted sentence at end relating to application of cl. (iv).\nSubsec. (a)(2)(A)(ii).  Pub. L. 100–647, §\u202f4005(g)(1) , substituted “(i), and (m)(7)” for “and (i)”.\nSubsec. (a)(2)(A)(iii).  Pub. L. 100–647, §\u202f1013(a)(2) , substituted “such issue does not meet” for “no bond which is part of such issue meets”.\nSubsec. (a)(2)(A)(iv).  Pub. L. 100–647, §\u202f4005(f) , added cl. (iv).\nSubsec. (a)(2)(C).  Pub. L. 100–647, §\u202f4005(g)(2)(B) , substituted “,\u2000(h), and (m)(7)” for “and (h)” in introductory text.\nSubsec. (a)(2)(D).  Pub. L. 100–647, §\u202f4005(e) , added subpar. (D).\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1013(a)(3) , inserted “is part of an issue which” after “which”.\nSubsec. (f)(5).  Pub. L. 100–647, §\u202f4005(b) , added par. (5).\nSubsec. (f)(6).  Pub. L. 100–647, §\u202f4005(c) , added par. (6).\nSubsec. (g)(1).  Pub. L. 100–647, §\u202f4005(d)(1) , substituted “paragraph (2) of this subsection and, in the case of an issue described in subsection (b)(1), such issue also meets the requirements of paragraph (3) of this subsection” for “paragraphs (2) and (3) of this subsection” and struck out “(other than subsection (f) thereof)” before period at end.\nSubsec. (g)(2)(B)(iv).  Pub. L. 100–647, §\u202f4005(g)(6) , inserted at end “The Secretary may by regulation adjust the mortgage prepayment rate otherwise used in determining the effective rate of interest to the extent the Secretary determines that such an adjustment is appropriate by reason of the impact of subsection (m).”\nSubsec. (m).  Pub. L. 100–647, §\u202f4005(g)(1) , added subsec. (m).\nPub. L. 113–295, div. A, title II, §\u202f211(d) ,  Dec. 19, 2014 ,  128 Stat. 4033 , provided that:  “The amendments made by this section [amending this section and sections 165, 168, 172, and 1033 of this title and provisions set out as notes under sections 56 and 897 of this title] shall take effect as if included in the provisions of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 [ Pub. L. 110–343, div. C ] to which they relate.”\nPub. L. 110–343, div. C, title VII, §\u202f709(b) ,  Oct. 3, 2008 ,  122 Stat. 3926 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to disasters occurring after  December 31, 2007 .”\nPub. L. 110–289, div. C, title I, §\u202f3021(c) ,  July 30, 2008 ,  122 Stat. 2893 , provided that:  “The amendments made by this section [amending this section and  section 146 of this title ] shall apply to bonds issued after the date of the enactment of this Act [ July 30, 2008 ].”\nPub. L. 110–289, div. C, title I, §\u202f3026(b) ,  July 30, 2008 ,  122 Stat. 2897 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after  May 1, 2008 .”\nPub. L. 110–245, title I, §\u202f103(d) ,  June 17, 2008 ,  122 Stat. 1626 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after  December 31, 2007 .”\nPub. L. 109–432, div. A, title IV, §\u202f411(b) ,  Dec. 20, 2006 ,  120 Stat. 2963 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 203 [probably means 203(b)] of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ].”\nPub. L. 109–432, div. A, title IV, §\u202f416(b) ,  Dec. 20, 2006 ,  120 Stat. 2965 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Dec. 20, 2006 ].”\nPub. L. 109–222, title II, §\u202f203(a)(2) ,  May 17, 2006 ,  120 Stat. 349 , provided that:  “The amendments made by this subsection [amending this section] shall apply to bonds issued on or after the date of the enactment of this Act [ May 17, 2006 ].”\nPub. L. 109–222, title II, §\u202f203(b)(2) ,  May 17, 2006 ,  120 Stat. 350 , provided that:  “The amendments made by this subsection [amending this section] shall apply to allocations of State volume limit after  April 5, 2006 .”\nAmendment by section 312(d)(1), (3) of  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  section 1702(d)(2) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  section 1703(n)(3) of Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nPub. L. 103–66, title XIII, §\u202f13141(f)(1) ,  Aug. 10, 1993 ,  107 Stat. 437 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  June 30, 1992 .”\nPub. L. 103–66, title XIII, §\u202f13141(f)(3) ,  Aug. 10, 1993 ,  107 Stat. 437 , provided that:  “The amendments made by subsections (c) and (e) [amending this section] shall apply to qualified mortgage bonds issued and mortgage credit certificates provided on or after the date of enactment of this Act [ Aug. 10, 1993 ].”\nPub. L. 103–66, title XIII, §\u202f13141(f)(4) ,  Aug. 10, 1993 ,  107 Stat. 437 , provided that:  “The amendments made by subsection (d) [amending this section] shall apply to loans originated and credit certificates provided after the date of the enactment of this Act [ Aug. 10, 1993 ].”\nPub. L. 102–227, title I, §\u202f108(c)(1) ,  Dec. 11, 1991 ,  105 Stat. 1688 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  December 31, 1991 .”\nPub. L. 101–508, title XI, §\u202f11408(d) ,  Nov. 5, 1990 ,  104 Stat. 1388–478 , provided that: \n “(1)   Bonds .— The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  September 30, 1990 . \n \n “(2)   Certificates .— The amendment made by subsection (b) [amending  section 25 of this title ] shall apply to elections for periods after  September 30, 1990 . \n \n “(3)   Simplification .— The amendment made by subsection (c) [amending this section] shall take effect as if included in the amendments made by section 4005 of the Technical and Miscellaneous Revenue Act of 1988 [ Pub. L. 100–647 ].”\nAmendment by section 1013(a)(2), (3) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4005(h) ,  Nov. 10, 1988 ,  102 Stat. 3651 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 25, 26, 148, 6045, and 6654 of this title] shall apply to bonds issued, and nonissued bond amounts elected, after  December 31, 1988 . \n \n “(2)   Special rules relating to certain requirements and refunding bonds .— In the case of a bond issued to refund (or which is part of a series of bonds issued to refund) a bond issued before  January 1, 1989 — “(A)  the amendments made by subsections (b) and (c) [amending this section] shall apply to financing provided after the date of issuance of the refunding issue, and \n \n “(B)  the amendment made by subsection (f) [amending this section] shall apply to payments (including on loans made before such date of issuance) received on or after such date of issuance. \n \n \n “(3)   Subsection  (g).— “(A)   In general .— Except as provided in subparagraph (B), the amendments made by subsection (g) [amending this section and sections 25, 26, 6045, and 6654 of this title] shall apply to financing provided, and mortgage credit certificates issued, after  December 31, 1990 . \n \n “(B)   Exception .— The amendments made by subsection (g) shall not apply to financing provided pursuant to a binding contract (entered into before  June 23, 1988 ) with a homebuilder, lender, or mortgagor if the bonds (the proceeds of which are used to provide such financing) are issued— “(i)  before  June 23, 1988 , or \n \n “(ii)  before  August 1, 1988 , pursuant to a written application (made before  July 1, 1988 ) for State bond volume authority.”\nPub. L. 110–245, title I, §\u202f103(e) ,  June 17, 2008 ,  122 Stat. 1626 , provided that:  “In the case of any bond issued after  December 31, 2007 , and before the date of the enactment of this Act [ June 17, 2008 ], subparagraph (B) of section 143( l )(4) of the Internal Revenue Code of 1986, as amended by this section, shall be applied by substituting ‘30 years’ for ‘25 years’.”\nPub. L. 100–647, title I, §\u202f1013(a)(27) ,  Nov. 10, 1988 ,  102 Stat. 3543 , provided that:  “The date contained in [former] section 143(a)(1)(B) of the 1986 Code shall be treated as contained in section 103A(c)(1)(B) of the Internal Revenue Code of 1954, as in effect on the day before the date of the enactment of the Reform Act [ Oct. 22, 1986 ], for purposes of any bond issued to refund a bond to which such [section] 103A(c)(1) applies.”\nPub. L. 100–647, title IV, §\u202f4005(i) ,  Nov. 10, 1988 ,  102 Stat. 3651 , required the Comptroller General of the United States to conduct a study of subsec. (m) of this section and alternatives to accomplish the purposes of such subsection, and submit a report to Congress by  July 1, 1990 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'In applying subparagraph (A)(ii) with respect to capital expenditures made after the date of any issue, no bond issued as a part of such issue shall cease to be treated as a qualified small issue bond by reason of any such expenditure for any period before the date on which such expenditure is paid or incurred.\nIn the case of any issue described in paragraph (1)(B), an election may be made under subparagraph (A) of this paragraph only if all of the prior issues being redeemed are issues to which paragraph (1) (or the corresponding provision of prior law) applied. In applying subparagraph (A)(ii) with respect to such a refinancing issue, capital expenditures shall be taken into account only for purposes of determining whether the prior issues being redeemed qualified (and would have continued to qualify) under paragraph (1) (or the corresponding provision of prior law).\nIn the case of any issue 95 percent or more of the net proceeds of which are to be used to provide facilities with respect to which an urban development action grant has been made under section 119 of the Housing and Community Development Act of 1974, capital expenditures of not to exceed $10,000,000 shall not be taken into account for purposes of applying subparagraph (A)(ii). This subparagraph shall not apply to bonds issued after  December 31, 2006 .\nWith respect to bonds issued after  December 31, 2006 , in addition to any capital expenditure described in subparagraph (C), capital expenditures of not to exceed $10,000,000 shall not be taken into account for purposes of applying subparagraph (A)(ii).\nThis subsection shall not apply to any bond issued as part of an issue 5 percent or more of the net proceeds of which are to be used directly or indirectly to provide residential real property for family units.\nThis subsection shall not apply to any bond issued as part of an issue (other than an issue to which paragraph (4) applies) if the interest on any other bond which is part of such issue is excluded from gross income under any provision of law other than this subsection.\nFor purposes of this subsection, 2 or more issues part or all of the net proceeds of which are to be used with respect to a single building, an enclosed shopping mall, or a strip of offices, stores, or warehouses using substantial common facilities shall be treated as 1 issue (and any person who is a principal user with respect to any of such issues shall be treated as a principal user with respect to the aggregated issue).\nThis subsection shall not apply to any issue if the aggregate authorized face amount of such issue allocated to any test-period beneficiary (when increased by the outstanding tax-exempt facility-related bonds of such beneficiary) exceeds $40,000,000.\nExcept as otherwise provided in regulations, the portion of the face amount of an issue allocated to any test-period beneficiary of a facility financed by the proceeds of such issue (other than an owner of such facility) is an amount which bears the same relationship to the entire face amount of such issue as the portion of such facility used by such beneficiary bears to the entire facility.\nExcept as otherwise provided in regulations, the portion of the face amount of an issue allocated to any test-period beneficiary who is an owner of a facility financed by the proceeds of such issue is an amount which bears the same relationship to the entire face amount of such issue as the portion of such facility owned by such beneficiary bears to the entire facility.\nFor purposes of this paragraph, all persons who are related (within the meaning of paragraph (3)) to each other shall be treated as 1 person.\nThis subsection shall not apply to any issue if more than $250,000 of the net proceeds of such issue are to be used to provide depreciable farm property with respect to which the principal user is or will be the same person or 2 or more related persons.\nFor purposes of this paragraph, the term “depreciable farm property” means property of a character subject to the allowance for depreciation which is to be used in a trade or business of farming.\nIn determining the amount of proceeds of an issue to be used as described in subparagraph (A), there shall be taken into account the aggregate amount of each prior issue to which paragraph (1) (or the corresponding provisions of prior law) applied which were or will be so used.\nThe term “manufacturing facility” means any facility which is used in the manufacturing or production of tangible personal property (including the processing resulting in a change in the condition of such property). A rule similar to the rule of section 142(b)(2) shall apply for purposes of the preceding sentence.\nA program shall not be treated as described in paragraph (1)(A) if such program discriminates on the basis of the location (in the United States) of the educational institution in which the student is enrolled.\nThe term “qualified redevelopment bond” means any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used for 1 or more redevelopment purposes in any designated blighted area.\nThe term “redevelopment purposes” does not include the construction (other than the rehabilitation) of any property or the enlargement of an existing building.\nThe term “designated blighted area” means any blighted area designated by the governing body of a local general purpose governmental unit in the jurisdiction of which such area is located.\nThe term “blighted area” means any area which the governing body described in subparagraph (A) determines to be a blighted area on the basis of the substantial presence of factors such as excessive vacant land on which structures were previously located, abandoned or vacant buildings, substandard structures, vacancies, and delinquencies in payment of real property taxes.\nAn area may be designated by a governmental unit as a blighted area only if the designation percentage with respect to such area, when added to the designation percentages of all other designated blighted areas within the jurisdiction of such governmental unit, does not exceed 20 percent.\nFor purposes of this subparagraph, the term “designation percentage” means, with respect to any area, the percentage (determined at the time such area is designated) which the assessed value of real property located in such area is of the total assessed value of all real property located within the jurisdiction of the governmental unit which designated such area.\nThe designation percentage of a previously designated blighted area shall not be taken into account under clause (i) if no qualified redevelopment bond (or similar bond) is or will be outstanding with respect to such area.\nExcept as provided in clause (ii), an area shall not be treated as a designated blighted area for purposes of this subsection unless such area is contiguous and compact and its area equals or exceeds 100 acres.\nClause (i) shall be applied by substituting “10 acres” for “100 acres” if not more than 25 percent of the financed area is to be provided (pursuant to the issue and all other such issues) to 1 person. For purposes of the preceding sentence, all related persons (as defined in subsection (a)(3)) shall be treated as 1 person. For purposes of this clause, an area provided to a developer on a short-term interim basis shall not be treated as provided to such developer.\nFor purposes of this subsection, the term “financed area” means, with respect to any issue, the portion of the designated blighted area with respect to which the proceeds of such issue are to be used.\nSection 147(c) (other than paragraphs (1)(B) and (2) thereof) shall not apply to any qualified redevelopment bond.\nSection 119 of the Housing and Community Development Act of 1974, referred to in subsec. (a)(4)(F), is classified to  section 5318 of Title 42 , The Public Health and Welfare.\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (a)(10)(B)(ii)(II), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nThe date of enactment of this clause, referred to in subsec. (a)(12)(C)(iii), is the date of enactment of  Pub. L. 111–5 , which was approved  Feb. 17, 2009 .\nThe Higher Education Act of 1965, referred to in subsec. (b)(1), is  Pub. L. 89–329 ,  Nov. 8, 1965 ,  79 Stat. 1219 , which is classified generally to chapter 28 (§\u202f1001 et seq.) of Title 20, Education. Section 428B(a) of that Act as enacted in the general amendment of part B of title IV of that Act by  Pub. L. 99–498, title IV, §\u202f402(a) ,  Oct. 17, 1986 ,  100 Stat. 1386 , which is classified to  section 1078–2(a) of Title 20 , did not contain a par. (1). Section 438 of that Act is classified to  section 1087–1 of Title 20 . For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 20  and Tables.\nThe Public Health Service Act, referred to in subsec. (b)(1)(B), is  act July 1, 1944, ch. 373 ,  58 Stat. 682 . Subpart I of part C of title VII of the Act was classified generally to subpart I (§\u202f294 et seq.) of part C of subchapter V of chapter 6A of Title 42, The Public Health and Welfare, prior to the general revision of subchapter V of chapter 6A by  Pub. L. 102–408, title I, §\u202f102 ,  Oct. 13, 1992 ,  106 Stat. 1994 . See subpart I (§\u202f292 et seq.) of part A of revised subchapter V of chapter 6A of Title 42. For complete classification of this Act to the Code, see Short Title note set out under  section 201 of Title 42  and Tables.\nA prior section 144, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 41 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title I, §\u202f112(c) , title II, §\u202f232(c),  78 Stat. 24 , 110;  Dec. 10, 1971 ,  Pub. L. 92–178, title II, §\u202f206 , title III, §\u202f301(c),  85 Stat. 511 , 520;  Oct. 4, 1976 ,  Pub. L. 94–455, title V, §\u202f501(b)(3) –(5), title XIX, §\u202f1906(b)(13)(A),  90 Stat. 1558 , 1559, 1834, related to method for electing to take standard deduction, prior to repeal by  Pub. L. 95–30, title I, §\u202f101(d)(1) ,  May 23, 1977 ,  91 Stat. 133 , applicable to taxable years beginning after  Dec. 31, 1976 .\n2009—Subsec. (a)(12)(C).  Pub. L. 111–5  substituted dash for comma after “For purposes of this paragraph”, designated remainder of first sentence and second sentence of existing provisions as cl. (i) and inserted heading, substituted “The term” for “the term”, added cls. (ii) and (iii), and struck out former last sentence which read as follows: “For purposes of the 1st sentence of this subparagraph, the term ‘manufacturing facility’ includes facilities which are directly related and ancillary to a manufacturing facility (determined without regard to this sentence) if—\n“(i) such facilities are located on the same site as the manufacturing facility, and\n“(ii) not more than 25 percent of the net proceeds of the issue are used to provide such facilities.”\n2006—Subsec. (a)(4)(F), (G).  Pub. L. 109–222  substituted “ December 31, 2006 ” for “ September 30, 2009 ”.\n2004—Subsec. (a)(4)(F).  Pub. L. 108–357, §\u202f340(b) , inserted at end “This subparagraph shall not apply to bonds issued after  September 30, 2009 .”\nSubsec. (a)(4)(G).  Pub. L. 108–357, §\u202f340(a) , added subpar. (G).\n1993—Subsec. (a)(12)(B).  Pub. L. 103–66  amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “In the case of any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide—\n“(i) any manufacturing facility, or\n“(ii) any land or property in accordance with section 147(c)(2),\nsubparagraph (A) shall be applied by substituting ‘ June 30, 1992 ’ for ‘ December 31, 1986 ’.”\n1991—Subsec. (a)(12)(B).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990—Subsec. (a)(12)(B).  Pub. L. 101–508  substituted “ December 31, 1991 ” for “ September 30, 1990 ”.\n1989—Subsec. (a)(12)(B).  Pub. L. 101–239  substituted “by substituting ‘ September 30, 1990 ’ for ‘ December 31, 1986 ’\u202f” for “by substituting ‘1989’ for ‘1986’\u202f”.\n1988—Subsec. (a)(12)(A).  Pub. L. 100–647, §\u202f1013(a)(4)(B)(ii) , inserted sentence at end that for purposes of cl. (ii)(I), average maturity be determined in accordance with section 147(b)(2)(A).\nSubsec. (a)(12)(A)(ii).  Pub. L. 100–647, §\u202f1013(a)(4)(A) , inserted “(or series of bonds)” before “issued to refund” in introductory text.\nSubsec. (a)(12)(A)(ii)(I).  Pub. L. 100–647, §\u202f1013(a)(4)(B)(i) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “the refunding bond has a maturity date not later than the maturity date of the refunded bond,”.\nSubsec. (a)(12)(A)(ii)(III), (IV).  Pub. L. 100–647, §\u202f1013(a)(4)(C) , redesignated subcl. (IV) as (III) and struck out former subcl. (III) which provided that this subsection apply when the interest rate on the refunding bond is lower than the interest rate on the refunded bond.\nSubsec. (a)(12)(C).  Pub. L. 100–647, §\u202f6176(a) , inserted sentence at end defining “manufacturing facility”.\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1013(a)(5) , in subpar. (B) struck out “to which part B of title IV of the Higher Education Act of 1965 (relating to guaranteed student loans) does not apply” after “by the State”, substituted “of the Higher Education Act of 1965” for “of such Act”, amended last sentence generally, and inserted a new flush sentence at end of par. (1). Prior to amendment, last sentence of subpar. (B) read as follows: “A bond issued as part of an issue shall be treated as a qualified student loan bond only if no bond which is part of such issue meets the private business tests of paragraphs (1) and (2) of section 141(b).”\nPub. L. 111–5, div. B, title I, §\u202f1301(b) ,  Feb. 17, 2009 ,  123 Stat. 345 , provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nPub. L. 103–66, title XIII, §\u202f13122(b) ,  Aug. 10, 1993 ,  107 Stat. 433 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  June 30, 1992 .”\nPub. L. 102–227, title I, §\u202f109(b) ,  Dec. 11, 1991 ,  105 Stat. 1688 , provided that:  “The amendment made by this section [amending this section] shall apply to bonds issued after  December 31, 1991 .”\nPub. L. 101–508, title XI, §\u202f11409(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–478 , provided that:  “The amendment made by this section [amending this section] shall apply to bonds issued after  September 30, 1990 .”\nAmendment by section 1013(a)(4)(A), (B)(i), (ii), (C), (5) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6176(b) ,  Nov. 10, 1988 ,  102 Stat. 3726 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Nov. 10, 1988 ]. \n \n “(2)   Refundings .— The amendment made by subsection (a) shall not apply to any bond issued to refund (or which is part of a series of bonds issued to refund) a bond issued on or before the date of the enactment of this Act if— “(A)  the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, and \n \n “(B)  the amount of the refunding bond does not exceed the outstanding amount of the refunded bond. \n \n\n For purposes of subparagraph (A), average maturity shall be determined in accordance with section 147(b) of the 1986 Code.”\nPub. L. 100–647, title I, §\u202f1013(a)(4)(B)(iii) ,  Nov. 10, 1988 ,  102 Stat. 3538 , provided that:  “A refunding bond issued before  July 1, 1987 , shall be treated as meeting the requirement of subclause (I) of section 144(a)(12)(A)(ii) of the 1986 Code if such bond met the requirement of such subclause as in effect before the amendments made by this subparagraph [amending this section].”\nPub. L. 100–647, title I, §\u202f1013(c)(12)(B) ,  Nov. 10, 1988 ,  102 Stat. 3547 , provided that:  “The date applicable under section 144(a)(12)(B) of the 1986 Code shall be treated as contained in section 103(b)(6)(N)(iii) of the Internal Revenue Code of 1954, as in effect on the day before the date of the enactment of the Reform Act [ Oct. 22, 1986 ], for purposes of any bond issued to refund a bond to which such section 103(b)(6)(N)(iii) applies.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'A bond (other than a qualified hospital bond) shall not be treated as a qualified 501(c)(3) bond if the aggregate authorized face amount of the issue (of which such bond is a part) allocated to any 501(c)(3) organization which is a test-period beneficiary (when increased by the outstanding tax-exempt nonhospital bonds of such organization) exceeds $150,000,000.\nA bond shall be taken into account under subparagraph (B) only to the extent that the proceeds of the issue of which such bond is a part are not used with respect to a hospital.\nIf 90 percent or more of the net proceeds of an issue are used with respect to a hospital, no bond which is part of such issue shall be taken into account under subparagraph (B)(ii).\nFor purposes of this subsection, 2 or more organizations under common management or control shall be treated as 1 organization.\nRules similar to the rules of subparagraphs (C), (D), and (E) of section 144(a)(10) shall apply for purposes of this subsection.\nThis subsection shall not apply with respect to bonds issued after the date of the enactment of this paragraph as part of an issue 95 percent or more of the net proceeds of which are to be used to finance capital expenditures incurred after such date.\nFor purposes of this section, the term “qualified hospital bond” means any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used with respect to a hospital.\nExcept as otherwise provided in this subsection, a bond which is part of an issue shall not be a qualified 501(c)(3) bond if any portion of the net proceeds of the issue are to be used directly or indirectly to provide residential rental property for family units.\nIf, at the time of the 1st use of property, there was no operating State or local program for tax-exempt financing of the property, the 1st use of the property shall be treated as pursuant to the 1st tax-exempt financing of the property.\nThe term “tax-exempt financing” means financing provided by tax-exempt bonds.\nThe term “taxable financing” means financing which is not tax-exempt financing.\nExcept as provided in subparagraph (B), rules similar to the rules of section 47(c)(1)(B) shall apply in determining for purposes of paragraph (2)(C) whether property is substantially rehabilitated.\nFor purposes of subparagraph (A), clause (ii) of section 47(c)(1)(B) shall not apply, but the Secretary may extend the 24-month period in section 47(c)(1)(B)(i) where appropriate due to circumstances not within the control of the owner.\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (b)(2)(B)(ii)(I), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nThe date of the enactment of this paragraph, referred to in subsec. (b)(5), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nA prior section 145,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 42 , made a cross reference to  section 36 of this title , prior to repeal by  Pub. L. 95–30, title I, §\u202f101(d)(1) ,  May 23, 1977 ,  91 Stat. 133 , applicable to taxable years beginning after  Dec. 31, 1976 .\n2017—Subsec. (d)(4).  Pub. L. 115–97  substituted “of section 47(c)(1)(B)” for “of section 47(c)(1)(C)” in subpars. (A) and (B) and “section 47(c)(1)(B)(i)” for “section 47(c)(1)(C)(i)” in subpar. (B).\n1997—Subsec. (b)(5).  Pub. L. 105–34  added par. (5).\n1990—Subsec. (d)(4).  Pub. L. 101–508  substituted “section 47(c)(1)(C)” for “section 48(g)(1)(C)” wherever appearing and “section 47(c)(1)(C)(i)” for “section 48(g)(1)(C)(i)”.\n1989—Subsec. (d)(3), (4).  Pub. L. 101–239  added par. (3) and redesignated former par. (3) as (4).\n1988—Subsec. (b)(2)(B)(ii)(I).  Pub. L. 100–647, §\u202f1013(a)(6) , substituted “section 103(b)(2)” for “section 103(b)”.\nSubsec. (b)(2)(C)(i).  Pub. L. 100–647, §\u202f1013(a)(7) , substituted “subparagraph (B)” for “subparagraph (B)(ii)”.\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1013(a)(8) , substituted “subparagraphs (C), (D), and (E)” for “subparagraphs (C) and (D)”.\nSubsecs. (d), (e).  Pub. L. 100–647, §\u202f5053(a) , added subsec. (d) and redesignated former subsec. (d) as (e).\nAmendment by  Pub. L. 115–97  applicable to amounts paid or incurred after  Dec. 31, 2017 , see  section 13402(c) of Pub. L. 115–97 , set out as a note under  section 47 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 1013(a)(6)–(8) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title V, §\u202f5053(c) ,  Nov. 10, 1988 ,  102 Stat. 3678 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 148 of this title ] shall apply to obligations issued after  October 21, 1988 . \n \n “(2)   Exception for construction or binding agreement.— “(A)  The amendments made by this section shall not apply to bonds (other than refunding bonds) with respect to a facility— “(i) (I)  the original use of which begins with the taxpayer, and the construction, reconstruction, or rehabilitation of which began before  July 14, 1988 , and was completed on or after such date, or \n \n “(II)  the original use of which begins with the taxpayer and with respect to which a binding contract to incur significant expenditures for construction, reconstruction, or rehabilitation was entered into before  July 14, 1988 , and some of such expenditures are incurred on or after such date, and \n \n \n “(ii)  described in an inducement resolution or other comparable preliminary approval adopted by an issuing authority (or by a voter referendum) before  July 14, 1988 . \n \n\n For purposes of the preceding sentence, the term ‘significant expenditures’ means expenditures greater than 10 percent of the reasonably anticipated cost of the construction, reconstruction, or rehabilitation of the facility involved. \n \n “(B)  Subparagraph (A) shall not apply to any bond issued after  December 31, 1989 , and shall not apply unless it is reasonably expected (at the time of issuance of the bond) that the facility will be placed in service before  January 1, 1990 . \n \n \n “(3)   Refundings .— The amendments made by this section shall not apply to any bond issued to refund (or which is part of a series of bonds issued to refund) a bond issued before  July 15, 1988 , if— “(A)  the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue, \n \n “(B)  the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, and \n \n “(C)  the proceeds of the refunding bond are used to redeem the refunded bond not later than 90 days after the date of the issuance of the refunding bond. \n \n\n For purposes of subparagraph (A), average maturity shall be determined in accordance with section 147(b) of the 1986 Code.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'A private activity bond issued as part of an issue meets the requirements of this section if the aggregate face amount of the private activity bonds issued pursuant to such issue, when added to the aggregate face amount of tax-exempt private activity bonds previously issued by the issuing authority during the calendar year, does not exceed such authority’s volume cap for such calendar year.\nThe volume cap for any agency of the State authorized to issue tax-exempt private activity bonds for any calendar year shall be 50 percent of the State ceiling for such calendar year.\nIf more than 1 agency of the State is authorized to issue tax-exempt private activity bonds, all such agencies shall be treated as a single agency.\nFor purposes of paragraph (1)(A), if an area is within the jurisdiction of 2 or more governmental units, such area shall be treated as only within the jurisdiction of the unit having jurisdiction over the smallest geographical area unless such unit agrees to surrender all or part of such jurisdiction for such calendar year to the unit with overlapping jurisdiction which has the next smallest geographical area.\nThe volume cap for any constitutional home rule city for any calendar year shall be determined under paragraph (1) of subsection (c) by substituting “100 percent” for “50 percent”.\nIn the case of any State which contains 1 or more constitutional home rule cities, for purposes of applying subsections (b) and (c) with respect to issuing authorities in such State other than constitutional home rule cities, the State ceiling for any calendar year shall be reduced by the aggregate volume caps determined for such year for all constitutional home rule cities in such State.\nFor purposes of this section, the term “constitutional home rule city” means, with respect to any calendar year, any political subdivision of a State which, under a State constitution which was adopted in 1970 and effective on  July 1, 1971 , had home rule powers on the 1st day of the calendar year.\nIf the population of any possession of the United States for any calendar year is less than the population of the least populous State (other than a possession) for such calendar year, the limitation under paragraph (1)(A) shall not be less than the amount determined under subparagraph (B) for such calendar year.\nAny amount of the State ceiling for any State which is attributable to an increase under this paragraph shall be allocated solely for one or more qualified housing issues.\nExcept as provided in paragraph (3), a State may, by law provide a different formula for allocating the State ceiling among the governmental units (or other authorities) in such State having authority to issue tax-exempt private activity bonds.\nExcept as otherwise provided in paragraph (3), the Governor of any State may proclaim a different formula for allocating the State ceiling among the governmental units (or other authorities) in such State having authority to issue private activity bonds.\nExcept as otherwise provided in a State constitutional amendment (or law changing the home rule provision adopted in the manner provided by the State constitution), the authority provided in this subsection shall not apply to that portion of the State ceiling which is allocated to any constitutional home rule city in the State unless such city agrees to such different allocation.\nIf any issuing authority elects a carryforward under paragraph (1) with respect to any carryforward purpose, any private activity bonds issued by such authority with respect to such purpose during the 3 calendar years following the calendar year in which the carryforward arose shall not be taken into account under subsection (a) to the extent the amount of such bonds does not exceed the amount of the carryforward elected for such purpose.\nCarryforwards elected with respect to any purpose shall be used in the order of the calendar years in which they arose.\nAny election under this paragraph (and any identification or specification contained therein), once made, shall be irrevocable.\nOnly for purposes of this section, the term “private activity bond” shall not include any exempt facility bond described in section 142(a)(6) which is issued as part of an issue if all of the property to be financed by the net proceeds of such issue is to be owned by a governmental unit.\nIn determining ownership for purposes of paragraph (1), section 142(b)(1)(B) shall apply, except that a lease term shall be treated as satisfying clause (ii) thereof if it is not more than 20 years.\nThe term “private activity bond” shall not include any bond which is issued to refund another bond to the extent that the amount of such bond does not exceed the outstanding amount of the refunded bond.\nFor purposes of paragraphs (2) and (3), average maturity shall be determined in accordance with section 147(b)(2)(A).\nThis subsection shall not apply to any bond issued to advance refund another bond.\nIf, during the 6-month period beginning on the date of a repayment of a loan financed by an issue 95 percent or more of the net proceeds of which are used to provide projects described in section 142(d), such repayment is used to provide a new loan for any project so described, any bond which is issued to refinance such issue shall be treated as a refunding issue to the extent the principal amount of such refunding issue does not exceed the principal amount of the bonds refunded.\nFor purposes of this section, determinations of the population of any State (or issuing authority) shall be made with respect to any calendar year on the basis of the most recent census estimate of the resident population of such State (or issuing authority) released by the Bureau of Census before the beginning of such calendar year.\nExcept as provided in paragraphs (2) and (3), no portion of the State ceiling applicable to any State for any calendar year may be used with respect to financing for a facility located outside such State.\nParagraph (1) shall not apply to any exempt facility bond described in paragraph (4), (5), (6), or (10) of section 142(a) if the issuer establishes that the State’s share of the use of the facility (or its output) will equal or exceed the State’s share of the private activity bonds issued to finance the facility.\nIn the case of a qualified scholarship funding bond, such bond shall be treated for purposes of this section as issued by a State or local issuing authority (whichever is appropriate).\nThe volume cap of an issuer shall be reduced by the amount allocated by the issuer to an issue under section 141(b)(5).\nExcept as otherwise provided by the Secretary, any advance refunding of any part of an issue to which an amount was allocated under section 141(b)(5) (or would have been allocated if such section applied to such issue) shall be taken into account under this section to the extent of the amount of the volume cap which was (or would have been) so allocated.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2021—Subsec. (g).  Pub. L. 117–58, §\u202f80401(c)(2) , substituted “Paragraphs (4) and (5)” for “Paragraph (4)” in concluding provisions.\nSubsec. (g)(5).  Pub. L. 117–58, §\u202f80401(c)(1) , added par. (5).\nSubsec. (g)(6).  Pub. L. 117–58, §\u202f80402(c) , added par. (6).\n2017—Subsec. (d)(2)(B).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2008—Subsec. (d)(5).  Pub. L. 110–289, §\u202f3021(a)(1) , added par. (5).\nSubsec. (f)(6).  Pub. L. 110–289, §\u202f3021(a)(2) , added par. (6).\nSubsec. (i)(6).  Pub. L. 110–289, §\u202f3007(a) , added par. (6).\n2005—Subsec. (g)(3).  Pub. L. 109–59  substituted “(14), or (15) of section 142(a), and” for “or (14) of section 142(a) (relating to airports, docks and wharves, environmental enhancements of hydroelectric generating facilities, qualified public educational facilities, and qualified green building and sustainable design projects), and”.\n2004—Subsec. (g)(3).  Pub. L. 108–357  substituted “(13), or (14)” for “or (13)” and “qualified public educational facilities, and qualified green building and sustainable design projects” for “and qualified public educational facilities”.\n2001—Subsec. (g)(3).  Pub. L. 107–16  substituted “(12), or (13)” for “or (12)” and “environmental enhancements of hydroelectric generating facilities, and qualified public educational facilities” for “and environmental enhancements of hydroelectric generating facilities”.\n2000—Subsec. (d)(1), (2).  Pub. L. 106–554  amended pars. (1) and (2) generally. Prior to amendment, pars. (1) and (2) provided for State ceilings based on the per capita limits and aggregate limits set out in an included table.\n1998—Subsec. (d)(1).  Pub. L. 105–277  added par. (1) and struck out heading and text of former par. (1). Text read as follows: “The State ceiling applicable to any State for any calendar year shall be the greater of—\n“(A) an amount equal to $75 multiplied by the State population, or\n“(B) $250,000,000.\nSubparagraph (B) shall not apply to any possession of the United States.”\nSubsec. (d)(2).  Pub. L. 105–277  added par. (2) and struck out heading and text of former par. (2). Text read as follows: “In the case of calendar years after 1987, paragraph (1) shall be applied by substituting—\n“(A) ‘$50’ for ‘$75’, and\n“(B) ‘$150,000,000’ for ‘$250,000,000’.”\n1993—Subsec. (g).  Pub. L. 103–66 , which directed the amendment of par. (4) by adding at the end thereof the following flush sentence: “Paragraph (4) shall be applied without regard to ‘75 percent of’ if all of the property to be financed by the net proceeds of the issue is to be owned by a governmental unit (within the meaning of section 142(b)(1)).”, was executed by inserting the sentence at the end of subsec. (g), to reflect the probable intent of Congress.\n1992—Subsec. (g)(3).  Pub. L. 102–486  substituted “,\u2000(2), or (12)” for “or (2)” and “,\u2000docks and wharves, and environmental enhancements of hydroelectric generating facilities” for “and docks and wharves”.\n1989—Subsec. (g)(3), (4).  Pub. L. 101–239  redesignated par. (3), relating to exempt facility bonds issued as part of an issue described in par. (11) of section 142(a), as (4).\n1988—Subsec. (d)(4)(B).  Pub. L. 100–647, §\u202f1013(a)(40) , substituted “respect to a” for “respect a”.\nSubsec. (f)(5)(A).  Pub. L. 100–647, §\u202f1013(a)(9) , amended subpar. (A) generally, as in effect before amendment by  Pub. L. 100–203 . Before amendment by  Pub. L. 100–203 , subpar. (A) read as follows: “the purpose of issuing bonds referred to in one of the clauses of section 141(d)(1)(A),”.\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f6180(b)(3) , added par. (3) relating to exempt facility bonds issued as part of an issue described in par. (11) of section 142(a).\nSubsec. (i)(2)(A).  Pub. L. 100–647, §\u202f1013(a)(28)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the maturity date of the bond to be refunded, or”.\nSubsec. (i)(3)(A).  Pub. L. 100–647, §\u202f1013(a)(28)(B) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the maturity date of the bond to be refunded, or”.\nSubsec. (i)(4), (5).  Pub. L. 100–647, §\u202f1013(a)(28)(C) , added par. (4) and redesignated former par. (4) as (5).\nSubsec. (k)(1).  Pub. L. 100–647, §\u202f1013(a)(10)(A) , substituted “paragraphs (2) and (3)” for “paragraph (2)”.\nSubsec. (k)(3).  Pub. L. 100–647, §\u202f1013(a)(10)(B) , added par. (3).\n1987—Subsec. (f)(5)(A).  Pub. L. 100–203  amended subpar. (A) generally, as amended by  Pub. L. 100–647, §\u202f1013(a)(9) , restating it without change. See 1988 Amendment note above.\nAmendment by  section 80401(c) of Pub. L. 117–58  applicable to obligations issued in calendar years beginning after  Nov. 15, 2021 , see  section 80401(d) of Pub. L. 117–58 , set out as a note under  section 142 of this title .\nAmendment by  section 80402(c) of Pub. L. 117–58  applicable to obligations issued after  Dec. 31, 2021 , see  section 80402(f) of Pub. L. 117–58 , set out as a note under  section 45Q of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 3007(a) of Pub. L. 110–289  applicable to repayments of loans received after  July 30, 2008 , see  section 3007(c) of Pub. L. 110–289 , set out as a note under  section 42 of this title .\nAmendment by  section 3021(a) of Pub. L. 110–289  applicable to bonds issued after  July 30, 2008 , see  section 3021(c) of Pub. L. 110–289 , set out as a note under  section 143 of this title .\nAmendment by  Pub. L. 109–59  applicable to bonds issued after  Aug. 10, 2005 , see  section 11143(d) of Pub. L. 109–59 , set out as a note under  section 142 of this title .\nAmendment by  Pub. L. 108–357  applicable to bonds issued after  Dec. 31, 2004 , see  section 701(e) of Pub. L. 108–357 , set out as a note under  section 142 of this title .\nAmendment by  Pub. L. 107–16  applicable to bonds issued after  Dec. 31, 2001 , see  section 422(f) of Pub. L. 107–16 , set out as a note under  section 142 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f161(b)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–624, provided that:  “The amendment made by this section [amending this section] shall apply to calendar years after 2000.”\nPub. L. 105–277, div. J, title II, §\u202f2021(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–903 , provided that:  “The amendment made by this section [amending this section] shall apply to calendar years after 1998.”\nPub. L. 103–66, title XIII, §\u202f13121(b) ,  Aug. 10, 1993 ,  107 Stat. 432 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  December 31, 1993 .”\nAmendment by  Pub. L. 102–486  applicable to bonds issued after  Oct. 24, 1992 , see  section 1921(c) of Pub. L. 102–486 , set out as a note under  section 142 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 1013(a)(9), (10), (28), (40) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 6180(b)(3) of Pub. L. 100–647  applicable to bonds issued after  Nov. 10, 1988 , see  section 6180(c) of Pub. L. 100–647 , set out as a note under  section 142 of this title .\nAmendment by  Pub. L. 100–203  applicable, with certain exceptions, to bonds issued after  Oct. 13, 1987  (other than bonds issued to refund bonds issued on or before such date), see  section 10631(c) of Pub. L. 100–203 , set out as a note under  section 141 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'Except as provided in subsection (h), a private activity bond shall not be a qualified bond for any period during which it is held by a person who is a substantial user of the facilities or by a related person of such a substantial user.\nExcept as provided in clause (ii), land shall not be taken into account under paragraph (1)(B).\nIf 25 percent or more of the net proceeds of any issue is to be used to finance land, such land shall be taken into account under paragraph (1)(B) and shall be treated as having an economic life of 30 years.\nAt the election of the issuer, a qualified 501(c)(3) bond shall be treated as meeting the requirements of paragraph (1) if such bond meets the requirements of subparagraph (B).\nParagraph (1) shall not apply to any bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to finance mortgage loans insured under FHA 242 or under a similar Federal Housing Administration program (as in effect on the date of the enactment of the Tax Reform Act of 1986) where the loan term approved by such Administration plus the maximum maturity of debentures which could be issued by such Administration in satisfaction of its obligations exceeds the term permitted under paragraph (1).\nIf the requirements of subparagraph (B) are met with respect to any land, paragraph (1) shall not apply to such land, and subsection (d) shall not apply to property to be used thereon for farming purposes, but only to the extent of expenditures (financed with the proceeds of the issue) not in excess of $450,000.\nAny ownership or material participation, or financing received, by an individual’s spouse or minor child shall be treated as ownership and material participation, or financing received, by the individual.\nFor purposes of clause (i), farmland which was previously owned by the individual and was disposed of while such individual was insolvent shall be disregarded if section 108 applied to indebtedness with respect to such farmland.\nFor purposes of this paragraph, the term “farm” has the meaning given such term by section 6420(c)(2).\nFor purposes of this paragraph, the term “substantial farmland” means any parcel of land unless such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located.\nExcept as provided in subsection (h), a private activity bond shall not be a qualified bond if issued as part of an issue and any portion of the net proceeds of such issue is to be used for the acquisition of any property (or an interest therein) unless the 1st use of such property is pursuant to such acquisition.\nExcept as provided in this paragraph, the term “rehabilitation expenditures” means any amount properly chargeable to capital account which is incurred by the person acquiring the building for property (or additions or improvements to property) in connection with the rehabilitation of a building. In the case of an integrated operation contained in a building before its acquisition, such term includes rehabilitating existing equipment in such building or replacing it with equipment having substantially the same function. For purposes of this subparagraph, any amount incurred by a successor to the person acquiring the building or by the seller under a sales contract with such person shall be treated as incurred by such person.\nThe term “rehabilitation expenditures” does not include any expenditure described in section 47(c)(2)(B).\nIn the case of a project involving 2 or more buildings, this subsection shall be applied on a project basis.\nA private activity bond shall not be a qualified bond if issued as part of an issue and any portion of the proceeds of such issue is to be used to provide any airplane, skybox or other private luxury box, health club facility, facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for consumption off premises. The preceding sentence shall not apply to any fixed-wing aircraft equipped for, and exclusively dedicated to providing, acute care emergency medical services (within the meaning of section 4261(g)(2)).\nA private activity bond shall not be a qualified bond unless such bond satisfies the requirements of paragraph (2).\nNo approval under subparagraph (A) shall be necessary with respect to any bond which is issued to refund (other than to advance refund) a bond approved under subparagraph (A) (or treated as approved under subparagraph (C)) unless the average maturity date of the issue of which the refunding bond is a part is later than the average maturity date of the bonds to be refunded by such issue. For purposes of the preceding sentence, average maturity shall be determined in accordance with subsection (b)(2)(A).\nIn the case of a qualified scholarship funding bond, any governmental unit which made a request described in section 150(d)(2)(B) with respect to the issuer of such bond shall be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued. Where more than one governmental unit within a State has made a request described in section 150(d)(2)(B), the State may also be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued.\nIn the case of a bond of a volunteer fire department which meets the requirements of section 150(e), the political subdivision described in section 150(e)(2)(B) with respect to such department shall be treated for purposes of paragraph (2) of this subsection as the governmental unit on behalf of which such bond was issued.\nA private activity bond shall not be a qualified bond if the issuance costs financed by the issue (of which such bond is a part) exceed 2 percent of the proceeds of the issue.\nIn the case of an issue of qualified mortgage bonds or qualified veterans’ mortgage bonds, paragraph (1) shall be applied by substituting “3.5 percent” for “2 percent” if the proceeds of the issue do not exceed $20,000,000.\nSubsections (a), (b), (c), and (d) shall not apply to any qualified mortgage bond, qualified veterans’ mortgage bond, or qualified student loan bond.\nSubsections (a), (c), and (d) shall not apply to any qualified 501(c)(3) bond and subsection (e) shall be applied as if it did not contain “health club facility” with respect to such a bond.\nSubsection (c) shall not apply to any exempt facility bond issued as part of an issue described in section 142(a)(13) (relating to qualified public educational facilities).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (b)(5), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2017—Subsec. (c)(2)(H)(ii).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2012—Subsec. (e).  Pub. L. 112–95  inserted at end: “The preceding sentence shall not apply to any fixed-wing aircraft equipped for, and exclusively dedicated to providing, acute care emergency medical services (within the meaning of section 4261(g)(2)).”\n2008—Subsec. (c)(2)(A).  Pub. L. 110–246, §\u202f15341(a) , substituted “$450,000” for “$250,000”.\nSubsec. (c)(2)(C)(i)(II).  Pub. L. 110–246, §\u202f15341(d) , substituted “the amount in effect under subparagraph (A)” for “$250,000”.\nSubsec. (c)(2)(E).  Pub. L. 110–246, §\u202f15341(c) , substituted “unless such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located.” for “unless—\n“(i) such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located, and\n“(ii) the fair market value of the land does not at any time while held by the individual exceed $125,000.”\nSubsec. (c)(2)(H).  Pub. L. 110–246, §\u202f15341(b) , added subpar. (H).\n2001—Subsec. (h).  Pub. L. 107–16, §\u202f422(e) , substituted “certain bonds” for “mortgage revenue bonds, qualified student loan bonds, and qualified 501(c)(3) bonds” in heading.\nSubsec. (h)(3).  Pub. L. 107–16, §\u202f422(d) , added par. (3).\n1996—Subsec. (c)(2)(E)(i).  Pub. L. 104–188, §\u202f1117(b) , substituted “30 percent” for “15 percent”.\nSubsec. (c)(2)(G).  Pub. L. 104–188, §\u202f1117(a) , added subpar. (G).\n1990—Subsec. (d)(3)(B).  Pub. L. 101–508  substituted “section 47(c)(2)(B)” for “section 48(g)(2)(B)”.\n1989—Subsec. (c)(3).  Pub. L. 101–239  inserted a comma after “mass commuting facility” in introductory provisions and in subpar. (A).\n1988—Subsec. (c)(3).  Pub. L. 100–647, §\u202f6180(b)(4) , inserted “high-speed intercity rail facility” after “mass commuting facility” in introductory text and in subpar. (A).\nSubsec. (e).  Pub. L. 100–647, §\u202f1013(a)(11) , struck out “treated as” after “shall not be”.\nSubsec. (f)(2)(D).  Pub. L. 100–647, §\u202f1013(a)(29) , substituted “the average maturity date of the issue of which the refunding bond is a part is later than the average maturity date of the bonds to be refunded by such issue. For purposes of the preceding sentence, average maturity shall be determined in accordance with subsection (b)(2)(A)” for “the maturity date of such bond is later than the maturity date of the bond to be refunded”.\nSubsec. (f)(2)(E)(i).  Pub. L. 100–647, §\u202f1013(a)(36) , inserted sentence at end relating to treatment of an individual appointed to fill a vacancy in the office of an elected official.\nSubsec. (f)(3).  Pub. L. 100–647, §\u202f6180(b)(5) , inserted “or high-speed intercity rail facilities” after “airports” in heading and after “airport” in subpars. (A) and (B) and in last sentence.\nSubsec. (f)(4).  Pub. L. 100–647, §\u202f1013(a)(12) , added par. (4).\nSubsec. (g)(1).  Pub. L. 100–647, §\u202f1013(a)(13)(A) , substituted “proceeds” for “aggregate face amount”.\nSubsec. (g)(2).  Pub. L. 100–647, §\u202f1013(a)(13)(B) , substituted “proceeds” for “aggregate authorized face amount” and “do” for “does”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 112–95, title XI, §\u202f1105(b) ,  Feb. 14, 2012 ,  126 Stat. 152 , provided that:  “The amendment made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Feb. 14, 2012 ].”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15341(e) ,  May 22, 2008 ,  122 Stat. 1517 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15341(e),  June 18, 2008 ,  122 Stat. 1664 , 2279, provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nAmendment by  Pub. L. 107–16  applicable to bonds issued after  Dec. 31, 2001 , see  section 422(f) of Pub. L. 107–16 , set out as a note under  section 142 of this title .\nPub. L. 104–188, title I, §\u202f1117(c) ,  Aug. 20, 1996 ,  110 Stat. 1764 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1013(a)(13)(C) ,  Nov. 10, 1988 ,  102 Stat. 3539 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to bonds issued after  June 30, 1987 .”\nAmendment by section 1013(a)(11), (12), (29), (36) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 6180(b)(4), (5) of  Pub. L. 100–647  applicable to bonds issued after  Nov. 10, 1988 , see  section 6180(c) of Pub. L. 100–647 , set out as a note under  section 142 of this title .\nSubsec. (f) applicable to bonds issued after  Dec. 31, 1986 , see  section 1311(d) of Pub. L. 99–514 , as amended, set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'The term “higher yielding investments” means any investment property which produces a yield over the term of the issue which is materially higher than the yield on the issue.\nExcept as provided in subparagraph (B), the term “investment property” does not include any tax-exempt bond.\nWith respect to an issue other than an issue a part of which is a specified private activity bond (as defined in section 57(a)(5)(C)), the term “investment property” includes a specified private activity bond (as so defined).\nThe term “investment-type property” does not include a prepayment under a qualified natural gas supply contract.\nThe average under subparagraph (B)(i) shall not exceed the annual amount of natural gas reasonably expected to be purchased (other than for resale) by persons who are located within the service area of such utility and who, as of the date of issuance of the issue, are customers of such utility.\nThe Secretary may increase the average under subparagraph (B)(i) for any period if the utility owned by the governmental unit establishes to the satisfaction of the Secretary that, based on objective evidence of growth in natural gas consumption or population, such average would otherwise be insufficient for such period.\nFor purposes of the clause (i), the term “applicable share” means, with respect to any period, the natural gas allocable to such period if the gas were allocated ratably over the period to which the prepayment relates.\nFor purposes of this paragraph, the term “testing period” means, with respect to an issue, the most recent 5 calendar years ending before the date of issuance of the issue.\nFor purposes of subsection (a), a bond shall not be treated as an arbitrage bond solely by reason of the fact that the proceeds of the issue of which such bond is a part may be invested in higher yielding investments for a reasonable temporary period until such proceeds are needed for the purpose for which such issue was issued.\nThe temporary period referred to in paragraph (1) shall not exceed 6 months with respect to the proceeds of an issue which are to be used to make or finance loans (other than nonpurpose investments) to 2 or more persons.\nSubparagraph (A) shall be applied by substituting “3 months” for “6 months” with respect to the proceeds from the sale or repayment of any loan which are to be used to make or finance any loan. For purposes of the preceding sentence, a nonpurpose investment shall not be treated as a loan.\nThis paragraph shall not apply to any qualified mortgage bond or qualified veterans’ mortgage bond.\nFor purposes of subsection (a), a bond shall not be treated as an arbitrage bond solely by reason of the fact that an amount of the proceeds of the issue of which such bond is a part may be invested in higher yielding investments which are part of a reasonably required reserve or replacement fund. The amount referred to in the preceding sentence shall not exceed 10 percent of the proceeds of such issue unless the issuer establishes to the satisfaction of the Secretary that a higher amount is necessary.\nA bond issued as part of an issue shall be treated as an arbitrage bond if the amount of the proceeds from the sale of such issue which is part of any reserve or replacement fund exceeds 10 percent of the proceeds of the issue (or such higher amount which the issuer establishes is necessary to the satisfaction of the Secretary).\nA bond which is part of an issue shall be treated as an arbitrage bond if the requirements of paragraphs (2) and (3) are not met with respect to such issue. The preceding sentence shall not apply to any qualified veterans’ mortgage bond.\nExcept to the extent provided by the Secretary, the amount which is required to be paid to the United States by the issuer shall be paid in installments which are made at least once every 5 years. Each installment shall be in an amount which ensures that 90 percent of the amount described in paragraph (2) with respect to the issue at the time payment of such installment is required will have been paid to the United States. The last installment shall be made no later than 60 days after the day on which the last bond of the issue is redeemed and shall be in an amount sufficient to pay the remaining balance of the amount described in paragraph (2) with respect to such issue. A series of issues which are redeemed during a 6-month period (or such longer period as the Secretary may prescribe) shall be treated (at the election of the issuer) as 1 issue for purposes of the preceding sentence if no bond which is part of any issue in such series has a maturity of more than 270 days or is a private activity bond. In the case of a tax and revenue anticipation bond, the last installment shall not be required to be made before the date 8 months after the date of issuance of the issue of which the bond is a part.\nIn the case of an issue described in subclause (II), clause (i) shall be applied by substituting “1 year” for “6 months” each place it appears with respect to the portion of the proceeds of the issue which are not expended in accordance with clause (i) if such portion does not exceed 5 percent of the proceeds of the issue.\nAn issue is described in this subclause if no bond which is part of such issue is a private activity bond (other than a qualified 501(c)(3) bond) or a tax or revenue anticipation bond.\nFor purposes of clause (i), in the case of an issue of tax or revenue anticipation bonds, the net proceeds of such issue (including earnings thereon) shall be treated as expended for the governmental purpose of the issue on the 1st day after the date of issuance that the cumulative cash flow deficit to be financed by such issue exceeds 90 percent of the proceeds of such issue.\nFor purposes of subclause (I), the term “cumulative cash flow deficit” means, as of the date of computation, the excess of the expenses paid during the period described in subclause (III) which would ordinarily be paid out of or financed by anticipated tax or other revenues over the aggregate amount available (other than from the proceeds of the issue) during such period for the payment of such expenses.\nFor purposes of subclause (II), the period described in this subclause is the period beginning on the date of issuance of the issue and ending on the earlier of the date 6 months after such date of issuance or the date of the computation of cumulative cash flow deficit.\nFor purposes of this subparagraph, payments of principal on the bonds which are part of an issue shall not be treated as expended for the governmental purposes of the issue.\nIn the case of a construction issue, paragraph (2) shall not apply to the available construction proceeds of such issue if the spending requirements of clause (ii) are met.\nThe term “available construction proceeds” means the amount equal to the issue price (within the meaning of sections 1273 and 1274) of the construction issue, increased by earnings on the issue price, earnings on amounts in any reasonably required reserve or replacement fund not funded from the issue, and earnings on all of the foregoing earnings, and reduced by the amount of the issue price in any reasonably required reserve or replacement fund and the issuance costs financed by the issue.\nThe term “available construction proceeds” shall not include amounts earned on any reasonably required reserve or replacement fund after the earlier of the close of the 2-year period described in clause (ii) or the date the construction is substantially completed.\nThe term “available construction proceeds” shall not include payments on any obligation acquired to carry out the governmental purposes of the issue and shall not include earnings on such payments.\nAt the election of the issuer, the term “available construction proceeds” shall not include earnings on any reasonably required reserve or replacement fund.\nAt the election of the issuer, paragraph (2) shall not apply to available construction proceeds which do not meet the spending requirements of clause (ii) if the issuer pays a penalty, with respect to each 6-month period after the date the bonds were issued, equal to 1½ percent of the amount of the available construction proceeds of the issue which, as of the close of such 6-month period, is not spent as required by clause (ii).\nThe penalty imposed by this clause shall cease to apply only as provided in clause (viii) or after the latest maturity date of any bond in the issue (including any refunding bond with respect thereto).\nThe requirement of this subclause is met if the issuer pays a penalty equal to 3 percent of the amount of available construction proceeds of the issue which is not spent for the governmental purposes of the issue as of the close of such initial temporary period multiplied by the number of years (including fractions thereof) in the initial temporary period.\nThe requirement of this subclause is met if the amount of the available construction proceeds of the issue which is not spent for the governmental purposes of the issue as of the close of such initial temporary period is invested at a yield not exceeding the yield on the issue or which is invested in any tax-exempt bond which is not investment property.\nThe requirement of this subclause is met if the amount of the available construction proceeds of the issue which is not spent for the governmental purposes of the issue as of the earliest date on which bonds may be redeemed is used to redeem bonds on such date.\nFor purposes of this subparagraph, payments of principal on the bonds which are part of the construction issue shall not be treated as an expenditure of the available construction proceeds of the issue.\nExcept as provided in this clause, clause (vii)(II), and the last sentence of clause (x), this subparagraph shall not apply to any refunding bond and no proceeds of a refunded bond shall be treated for purposes of this subparagraph as proceeds of a refunding bond.\nFor purposes of clause (v), any portion of an issue which is used to refund any issue (or portion thereof) shall be treated as a separate issue.\nThe requirements of paragraph (2) shall be treated as met with respect to earnings for any period if a penalty is paid under clause (vii) or (viii) with respect to such earnings for such period.\nAny election under this subparagraph (other than clauses (viii) and (ix)) shall be made on or before the date the bonds are issued; and, once made, shall be irrevocable.\nAny penalty under this subparagraph shall be paid to the United States not later than 90 days after the period to which the penalty relates.\nIf the spending requirements of clause (ii) are met with respect to the available construction proceeds of a construction issue, then paragraph (2) shall not apply to earnings on a bona fide debt service fund for such issue.\nThere shall not be taken into account under subclause (IV) of clause (i) any bond issued to refund (other than to advance refund) any bond to the extent the amount of the refunding bond does not exceed the outstanding amount of the refunded bond.\nEach of the $5,000,000 amounts in the preceding provisions of this subparagraph shall be increased by the lesser of $10,000,000 or so much of the aggregate face amount of the bonds as are attributable to financing the construction (within the meaning of subparagraph (C)(iv)) of public school facilities.\nGross income shall not include the sum described in paragraph (2). Notwithstanding any other provision of this title, no deduction shall be allowed for any amount paid to the United States under paragraph (2).\nExcept to the extent otherwise provided in regulations, payments made by the Secretary of Education pursuant to section 438 of the Higher Education Act of 1965 are not to be taken into account, for purposes of subsection (a)(1), in determining yields on student loan notes.\nFor purposes of this section, the yield on an issue shall be determined on the basis of the issue price (within the meaning of sections 1273 and 1274).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (f)(4)(C)(vi), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nSection 438 of the Higher Education Act of 1965, referred to in subsec. (g), is classified to  section 1087–1 of Title 20 , Education.\n2017—Subsec. (f)(4)(C)(xiv) to (xvii).  Pub. L. 115–97  redesignated cls. (xv) to (xvii) as (xiv) to (xvi), respectively, and struck out former cl. (xiv). Prior to amendment, text of cl. (xiv) read as follows: “For purposes of this subpargraph, the end of the initial temporary period shall be determined without regard to section 149(d)(3)(A)(iv).”\n2006—Subsec. (f)(4)(D)(ii)(II) to (IV).  Pub. L. 109–222  redesignated subcls. (III) and (IV) as (II) and (III), respectively, and struck out former subcl. (II) which read as follows: “all bonds issued by a governmental unit to make loans to other governmental units with general taxing powers not subordinate to such unit shall, for purposes of applying such subclause to such unit, be treated as not issued by such unit.”\n2005—Subsec. (b)(4).  Pub. L. 109–58  added par. (4).\n2001—Subsec. (f)(4)(D)(vii).  Pub. L. 107–16  substituted “the lesser of $10,000,000” for “the lesser of $5,000,000”.\n1997—Subsec. (c)(2)(B) to (E).  Pub. L. 105–34, §\u202f1444(a) , redesignated subpars. (C) to (E) as (B) to (D), respectively, and struck out heading and text of former subpar. (B). Text read as follows: “In the case of the proceeds of an issue to be used to make or finance loans under a program described in section 144(b)(1)(A), subparagraph (A) shall be applied by substituting ‘18 months’ for ‘6 months’. The preceding sentence shall not apply to any bond issued after  December 31, 1988 .”\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f1443 , struck out par. (3) which related to limitations on investment in nonpurpose investments.\nSubsec. (f)(4)(B)(ii)(I).  Pub. L. 105–34, §\u202f1441 , substituted “5 percent of the proceeds of the issue” for “the lesser of 5 percent of the proceeds of the issue or $100,000”.\nSubsec. (f)(4)(C)(xvii).  Pub. L. 105–34, §\u202f1442 , added cl. (xvii).\nSubsec. (f)(4)(D)(vii).  Pub. L. 105–34, §\u202f223(a) , added cl. (vii).\nSubsec. (f)(4)(E).  Pub. L. 105–34, §\u202f1444(b) , struck out subpar. (E) which related to exception for certain qualified student loan bonds.\n1990—Subsec. (c)(2)(D).  Pub. L. 101–508, §\u202f11701(j)(5) , substituted “subsection (f)(4)(C)(iv)” for “subsection (f)(4)(B)(iv)(IV)” in introductory provisions and “subsection (f)(4)(C)(v)” for “subsection (f)(4)(B)(iv)(VIII)” in cl. (i).\nSubsec. (c)(2)(D), (E).  Pub. L. 101–508, §\u202f11701(j)(6) , made technical amendment to  Pub. L. 101–239, §\u202f7652(c) . See 1989 Amendment note below.\nSubsec. (f)(4)(B)(i).  Pub. L. 101–508, §\u202f11701(j)(2) , substituted in last sentence “replacement fund, and gross proceeds which arise after such 6 months and which were not reasonably anticipated as of the date of issuance, shall not be considered gross proceeds for purposes of subclause (I) only” for “replacement fund shall not be considered gross proceeds for purposes of this subparagraph only” in concluding provisions.\nSubsec. (f)(4)(B)(i)(II).  Pub. L. 101–508, §\u202f11701(j)(1) , amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “the requirements of paragraph (2) are met after such 6 months with respect to earnings on amounts in any reasonably required reserve or replacement fund.”\nSubsec. (f)(4)(B)(iv).  Pub. L. 101–508, §\u202f11701(j)(4) , amended cl. (iv) generally, substituting present provisions for provisions which provided for a special rule to be applied during a 2-year period for certain construction bonds from issues in which at least 75 percent of the net proceeds of the issue were to be used for construction expenditures with respect to property which was owned by a governmental unit or a 501(c)(3) organization.\nSubsec. (f)(4)(C) to (E).  Pub. L. 101–508, §\u202f11701(j)(3)(A) , (B), added subpar. (C) and redesignated former subpars. (C) and (D) as (D) and (E), respectively.\n1989—Subsec. (c)(2)(D), (E).  Pub. L. 101–239, §\u202f7652(c) , as amended by  Pub. L. 101–508, §\u202f11701(j)(6) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (d)(3)(E)(ii).  Pub. L. 101–239, §\u202f7814(c)(2) , struck out “a qualified mortgage bond or” after “in the case of”.\nSubsec. (f)(4)(B)(i).  Pub. L. 101–239, §\u202f7652(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “An issue shall, for purposes of this subsection, be treated as meeting the requirements of paragraph (2) if the gross proceeds of such issue are expended for the governmental purpose for which the issue was issued by no later than the day which is 6 months after the date of issuance of such issue. Gross proceeds which are held in a bona fide debt service fund shall not be considered gross proceeds for purposes of this subparagraph only.”\nSubsec. (f)(4)(B)(ii)(I).  Pub. L. 101–239, §\u202f7652(d) , inserted “each place it appears” after “\u202f‘6 months’\u202f”.\nSubsec. (f)(4)(B)(iii)(III).  Pub. L. 101–239, §\u202f7816(r) , substituted “such date of issuance or the date” for “such date of issuance. or the date”.\nSubsec. (f)(4)(B)(iv).  Pub. L. 101–239, §\u202f7652(b) , added cl. (iv).\nSubsec. (f)(4)(C)(ii)(II).  Pub. L. 101–239, §\u202f7816(t) , substituted “to make loans to” for “on behalf of”.\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1013(a)(43)(B) , struck out at end “Such term shall not include any tax-exempt bond.”\nSubsec. (b)(2)(E).  Pub. L. 100–647, §\u202f5053(b) , added subpar. (E).\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1013(a)(43)(A) , added par. (3).\nSubsec. (d)(2).  Pub. L. 100–647, §\u202f1013(a)(14) , substituted “any reserve or replacement fund” for “any fund described in paragraph (1)”.\nSubsec. (f)(1).  Pub. L. 100–647, §\u202f4005(d)(2) , struck out “qualified mortgage bond or” after “apply to any”.\nSubsec. (f)(3).  Pub. L. 100–647, §\u202f6177(b) , inserted at end “In the case of a tax and revenue anticipation bond, the last installment shall not be required to be made before the date 8 months after the date of issuance of the issue of which the bond is a part.”\nPub. L. 100–647, §\u202f1013(a)(15) , inserted “A series of issues which are redeemed during a 6-month period (or such longer period as the Secretary may prescribe) shall be treated (at the election of the issuer) as 1 issue for purposes of the preceding sentence if no bond which is part of any issue in such series has a maturity of more than 270 days or is a private activity bond.”\nSubsec. (f)(4)(A).  Pub. L. 100–647, §\u202f6181(a) , (b), struck out “unless the issuer otherwise elects,” before “any amount earned” in cl. (ii) and inserted at end of subpar. (A) “In the case of an issue no bond of which is a private activity bond, clause (ii) shall be applied without regard to the dollar limitation therein if the average maturity of the issue (determined in accordance with section 147(b)(2)(A)) is at least 5 years and the rates of interest on bonds which are part of the issue do not vary during the term of the issue.”\nSubsec. (f)(4)(B)(iii)(I).  Pub. L. 100–647, §\u202f1013(a)(16)(A) , substituted “proceeds” for “aggregate face amount”.\nSubsec. (f)(4)(B)(iii)(III).  Pub. L. 100–647, §\u202f6177(a) , substituted “the earlier of the date 6 months after such date of issuance.” for “the earliest of the maturity date of the issue, the date 6 months after such date of issuance,”.\nSubsec. (f)(4)(C).  Pub. L. 100–647, §\u202f1013(a)(17)(A) , in heading substituted “governmental units issuing $5,000,000 or less of bonds” for “small governmental units”, designated existing provision as cl. (i), inserted heading “In general”, redesignated existing cls. (i) to (iv) as subcls. (I) to (IV) and realigned their margins, struck out last sentence providing that cl. (iv) not take into account any bond which is not outstanding at the time of a later issue or which is redeemed, other than in an advance refunding, from the net proceeds of the later issue, and added cls. (ii) to (vi).\nSubsec. (f)(4)(C)(i)(IV).  Pub. L. 100–647, §\u202f1013(a)(17)(B) , struck out “(and all subordinate entities thereof)” after “such unit”.\nSubsec. (f)(4)(C)(ii).  Pub. L. 100–647, §\u202f6183(a) , added subcl. (II) and redesignated former subcls. (II) and (III) as (III) and (IV), respectively.\nSubsec. (f)(4)(D)(i).  Pub. L. 100–647, §\u202f1013(a)(18) , inserted “for a program” before “described in section 144(b)(1)(A)” in introductory text, substituted “such program” for “such a program” in subcl. (I), and inserted at end “Amounts designated as interest on student loans shall not be taken into account in determining whether the issuer is reimbursed for such costs. Except as otherwise hereafter provided in regulations prescribed by the Secretary, costs described in subclause (I) paid from amounts earned as described in the first sentence of this clause may also be taken into account in determining the yield on the student loans under a program described in section 144(b)(1)(A).”\nSubsec. (f)(7)(B).  Pub. L. 100–647, §\u202f1013(a)(19) , substituted “not due” for “due to reasonable cause and not”.\nPub. L. 115–97, title I, §\u202f13532(c) ,  Dec. 22, 2017 ,  131 Stat. 2154 , provided that:  “The amendments made by this section [amending this section and  section 149 of this title ] shall apply to advance refunding bonds issued after  December 31, 2017 .”\nPub. L. 109–222, title V, §\u202f508(e) ,  May 17, 2006 ,  120 Stat. 362 , provided that:  “The amendments made by this section [amending this section and sections 54 and 149 of this title] shall apply to bonds issued after the date of the enactment of this Act [ May 17, 2006 ].”\nAmendment by  Pub. L. 109–58  applicable to obligations issued after  Aug. 8, 2005 , see  section 1327(d) of Pub. L. 109–58 , set out as a note under  section 141 of this title .\nPub. L. 107–16, title IV, §\u202f421(b) ,  June 7, 2001 ,  115 Stat. 65 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to obligations issued in calendar years beginning after  December 31, 2001 .”\nPub. L. 105–34, title II, §\u202f223(b) ,  Aug. 5, 1997 ,  111 Stat. 818 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after  December 31, 1997 .”\nPub. L. 105–34, title XIV, §\u202f1445 ,  Aug. 5, 1997 ,  111 Stat. 1054 , provided that:  “The amendments made by this subtitle [subtitle B (§§\u202f1441–1445) of title XIV of  Pub. L. 105–34 , amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 101–508  effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989,  Pub. L. 101–239, title VII , to which such amendment relates, see  section 11701(n) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–508, title XI, §\u202f11701(j)(8) ,  Nov. 5, 1990 ,  104 Stat. 1388–513 , provided that:  “Section 148(f)(4)(C)(xiii)(II) of such Code (as added by this subsection) shall apply only to refunding bonds issued after  August 3, 1990 .”\nPub. L. 101–239, title VII, §\u202f7652(e) ,  Dec. 19, 1989 ,  103 Stat. 2387 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Dec. 19, 1989 ].”\nAmendment by sections 7814(c)(2) and 7816(r), (t) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1013(a)(16)(B) ,  Nov. 10, 1988 ,  102 Stat. 3540 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to bonds issued after  June 30, 1987 .”\nPub. L. 100–647, title I, §\u202f1013(a)(17)(C) ,  Nov. 10, 1988 ,  102 Stat. 3542 , provided that: \n “(i)  Except as provided in clause (ii), the amendments made by this paragraph [amending this section] shall apply to bonds issued after  June 30, 1987 . \n \n “(ii)  At the election of an issuer (made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe), the amendments made by this paragraph shall apply to such issuer as if included in the amendments made by section 1301(a) of the Tax Reform Act of 1986 [amending  section 103 of this title ].”\nPub. L. 100–647, title I, §\u202f1013(a)(43)(C) ,  Nov. 10, 1988 ,  102 Stat. 3545 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to obligations issued after  March 31, 1988 .”\nAmendment by section 1013(a)(14), (15), (18), (19) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 4005(d)(2) of Pub. L. 100–647  applicable to bonds issued, and nonissued bond amounts elected, after  Dec. 31, 1988 , see  section 4005(h)(1) of Pub. L. 100–647 , set out as a note under  section 143 of this title .\nAmendment by  section 5053(b) of Pub. L. 100–647  applicable, with certain exceptions, to obligations issued after  Oct. 21, 1988 , see  section 5053(c) of Pub. L. 100–647 , set out as a note under  section 145 of this title .\nPub. L. 100–647, title VI, §\u202f6177(c) ,  Nov. 10, 1988 ,  102 Stat. 3727 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 100–647, title VI, §\u202f6181(c) ,  Nov. 10, 1988 ,  102 Stat. 3729 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Nov. 10, 1988 ]. \n \n “(2)   Election for outstanding bonds .— Any issue of bonds other than private activity bonds outstanding as of the date of the enactment of this Act shall be allowed a 1-time election to apply the amendments made by subsection (b) [amending this section] to amounts deposited after such date in bona fide debt service funds of such bonds. \n \n “(3)   Definition of private activity bond .— For purposes of this section and the last sentence of section 148(f)(4)(A) of the 1986 Code (as added by subsection (b)), the term ‘private activity bond’ shall include any qualified 501(c)(3) bond (as defined under section 145 of the 1986 Code).”\nPub. L. 100–647, title VI, §\u202f6183(b) ,  Nov. 10, 1988 ,  102 Stat. 3730 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  December 31, 1988 .”\nSubpart applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nPub. L. 101–508, title XI, §\u202f11701(j)(7) ,  Nov. 5, 1990 ,  104 Stat. 1388–513 , provided that:  “In the case of a bond issued before the date of the enactment of this Act [ Nov. 5, 1990 ], the period for making the election under section 148(f)(4)(C)(viii) of the Internal Revenue Code of 1986 (as added by this subsection) shall not expire before the date which is 180 days after such date of enactment.”\nPub. L. 99–514, title XIII, §\u202f1301(c) ,  Oct. 22, 1986 ,  100 Stat. 2654 , provided that:  “The provision in the Federal income tax regulations relating to the arbitrage requirements which permits a higher yield on acquired obligations if the issuer elects to waive the benefits of the temporary period provisions shall not apply to bonds issued after  August 31, 1986 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'Nothing in section 103(a) or in any other provision of law shall be construed to provide an exemption from Federal income tax for interest on any registration-required bond unless such bond is in registered form.\nFor purposes of paragraph (1), a book entry bond shall be treated as in registered form if the right to the principal of, and stated interest on, such bond may be transferred only through a book entry consistent with regulations prescribed by the Secretary.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purpose of paragraph (1) where there is a nominee or chain of nominees.\nSection 103(a) shall not apply to any State or local bond if such bond is federally guaranteed.\nClause (i) shall not apply to any bond which is federally guaranteed within the meaning of paragraph (2)(B)(ii).\nExcept as provided in paragraph (2)(B)(ii), a bond which is issued as part of an issue shall not be treated as federally guaranteed merely by reason of the fact that the proceeds of such issue are used in making loans to a financial institution or there is a guarantee by a financial institution unless such guarantee constitutes a federally insured deposit or account.\nClause (iv) of subparagraph (A) shall not apply to any guarantee by a Federal home loan bank unless such bank meets safety and soundness collateral requirements for such guarantees which are at least as stringent as such requirements which apply under regulations applicable to such guarantees by Federal home loan banks as in effect on  April 9, 2008 .\nTo the extent provided in regulations prescribed by the Secretary, any entity with statutory authority to borrow from the United States shall be treated as an instrumentality of the United States. Except in the case of an exempt facility bond, a qualified small issue bond, and a qualified student loan bond, nothing in the preceding sentence shall be construed as treating the District of Columbia or any possession of the United States as an instrumentality of the United States.\nThe term “federally insured deposit or account” means any deposit or account in a financial institution to the extent such deposit or account is insured under Federal law by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the National Credit Union Administration, or any similar federally chartered corporation.\nExcept as provided in paragraph (2), no interest on any bond shall be exempt from taxation under this title unless such interest is exempt from tax under this title without regard to any provision of law which is not contained in this title and which is not contained in a revenue Act.\nFor purposes of this title, notwithstanding any provision of this part, any bond the interest on which is exempt from taxation under this title by reason of any provision of law (other than a provision of this title) which is in effect on  January 6, 1983 , shall be treated as a bond described in section 103(a).\nSubparagraph (A) shall not apply to a bond (not described in subparagraph (C)) issued after 1983 if the appropriate requirements of this part (or the corresponding provisions of prior law) are not met with respect to such bond.\nNothing in section 103(a) or in any other provision of law shall be construed to provide an exemption from Federal income tax for interest on any bond issued to advance refund another bond.\nFor purposes of this part, a bond shall be treated as issued to advance refund another bond if it is issued more than 90 days before the redemption of the refunded bond.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\nNothing in section 103(a) or any other provision of law shall be construed to provide an exemption from Federal income tax for interest on any bond unless such bond satisfies the requirements of paragraph (2).\nThe Secretary may grant an extension of time for the filing of any statement required under paragraph (2) if the failure to file in a timely fashion is not due to willful neglect.\nSection 103(a) shall not apply to any pooled financing bond unless, with respect to the issue of which such bond is a part, the requirements of paragraphs (2), (3), (4), and (5) are met.\nExpectations as to changes in interest rates or in the provisions of this title (or in the regulations or rulings thereunder) may not be taken into account in determining whether expectations are reasonable for purposes of this paragraph.\nFor purposes of subparagraph (A), the term “net proceeds” has the meaning given such term by section 150 but shall not include proceeds used to finance issuance costs and shall not include proceeds necessary to pay interest (during such period) on the bonds which are part of the issue.\nFor purposes of subparagraph (A), in the case of a refunding bond, the date of issuance taken into account is the date of issuance of the original bond.\nThe requirement of this paragraph is met with respect to an issue if the issuer receives prior to issuance written loan commitments identifying the ultimate potential borrowers of at least 30 percent of the net proceeds of such issue.\nThe term “pooled financing bond” means any bond issued as part of an issue more than $5,000,000 of the proceeds of which are reasonably expected (at the time of the issuance of the bonds) to be used (or are intentionally used) directly or indirectly to make or finance loans to 2 or more ultimate borrowers.\nIf only a portion of the proceeds of an issue is reasonably expected (at the time of issuance of the bond) to be used (or is intentionally used) as described in paragraph (6)(A), such portion and the other portion of such issue shall be treated as separate issues for purposes of determining whether such portion meets the requirements of this subsection.\nAmounts in a bona fide debt service fund shall be treated as invested in bonds described in clause (i).\nAmounts held for not more than 30 days pending reinvestment or bond redemption shall be treated as invested in bonds described in clause (i).\nA refunding bond shall be treated as meeting the requirements of this subsection only if the original bond met such requirements.\nThe Secretary may, at the request of any issuer, provide that the requirement of paragraph (2) shall be treated as met with respect to the portion of the spendable proceeds of an issue which is to be used for any construction project having a construction period in excess of 5 years if it is reasonably expected that such proceeds will be spent over a reasonable construction schedule specified in such request.\nThe rules of subsection (f)(2)(B) shall apply.\nThe Secretary may prescribe regulations to prevent the avoidance of the rules of this subsection, including through the aggregation of projects within a single issue.\nThe Northwest Power Act, referred to in subsecs. (b)(3)(A)(iii) and (c)(2)(C)(i), probably means the Pacific Northwest Electric Power Planning and Conservation Act,  Pub. L. 96–501 ,  Dec. 5, 1980 , 94 Stat 2697, which is classified principally to chapter 12H (§\u202f839 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Short Title note set out under  section 839 of Title 16  and Tables.\nThe date of the enactment of the Tax Reform Act of 1984, referred to in subsec. (b)(3)(A)(iii), is the date of enactment of  Pub. L. 98–369, div. A , which was approved  July 18, 1984 .\nThe date of the enactment of this clause, referred to in subsec. (b)(3)(A)(iv), is the date of enactment of  Pub. L. 110–289 , which was approved  July 30, 2008 .\nSection 11(b) of the United States Housing Act of 1937, referred to in subsecs. (b)(3)(C)(i)(I) and (c)(2)(C)(iii), is classified to  section 1473i(b) of Title 42 , The Public Health and Welfare.\nSection 608(a)(6)(A) of Pub. L. 97–468 , referred to in subsec. (c)(2)(C)(ii), is classified to  section 1207(a)(6)(A) of Title 45 , Railroads.\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (c)(2)(C)(ii), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\n2018—Subsec. (b)(3)(A)(i).  Pub. L. 115–141  substituted “Department of Veterans Affairs” for “Veterans’ Administration”.\n2017—Subsec. (d)(1).  Pub. L. 115–97, §\u202f13532(a) , substituted “to advance refund another bond.” for “as part of an issue described in paragraph (2), (3), or (4).”\nSubsec. (d)(2) to (7).  Pub. L. 115–97, §\u202f13532(b)(1) , redesignated pars. (5) and (7) as (2) and (3), respectively, and struck out former pars. (2), (3), (4), and (6) which described issuing of certain private activity bonds, other refunding bonds, and bonds involved in abusive transactions and provided special rules for refunding occurring and for bonds issued before 1986.\n2010—Subsec. (a)(2).  Pub. L. 111–147  inserted “or” at end of subpar. (A), substituted period for “,\u2000or” in subpar. (B), and struck out subpar. (C) which read as follows: “is described in section 163(f)(2)(B).”\n2008—Subsec. (b)(3)(A)(iv).  Pub. L. 110–289, §\u202f3023(a) , added cl. (iv).\nSubsec. (b)(3)(E).  Pub. L. 110–289, §\u202f3023(b) , added subpar. (E).\n2006—Subsec. (f)(1).  Pub. L. 109–222, §\u202f508(d)(1) , substituted “paragraphs (2), (3), (4), and (5)” for “paragraphs (2) and (3)”.\nSubsec. (f)(2)(A).  Pub. L. 109–222, §\u202f508(a) , amended subpar. (A) generally. Prior to amendment, text read as follows: “The requirements of this paragraph are met with respect to an issue if the issuer reasonably expects that as of the close of the 3-year period beginning on the date of issuance of the issue, at least 95 percent of the net proceeds of the issue (as of the close of such period) will have been used directly or indirectly to make or finance loans to ultimate borrowers.”\nSubsec. (f)(4) to (6).  Pub. L. 109–222, §\u202f508(b) , added pars. (4) and (5) and redesignated former par. (4) as (6). Former par. (5) redesignated (7).\nSubsec. (f)(7).  Pub. L. 109–222, §\u202f508(b) , redesignated par. (5) as (7).\nSubsec. (f)(7)(B).  Pub. L. 109–222, §\u202f508(d)(2) , substituted “paragraph (6)(A)” for “paragraph (4)(A)”.\n1996—Subsec. (g)(3)(B)(iii).  Pub. L. 104–188  amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “ Investment earnings held pending reinvestment .—Investment earnings held for not more than 30 days pending reinvestment shall be treated as invested in bonds described in clause (i).”\n1989—Subsec. (g).  Pub. L. 101–239  added subsec. (g).\n1988—Subsec. (b)(3)(A)(iii).  Pub. L. 100–647, §\u202f1013(a)(20) , struck out “with respect to any bond issued before  July 1, 1989 ” after “1984”.\nSubsec. (b)(4)(A).  Pub. L. 100–647, §\u202f1013(a)(21) , substituted “and a qualified student loan bond” for “a qualified student loan bond, and a qualified redevelopment bond”.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1013(a)(22) , substituted “the failure to file in a timely fashion is not due to willful neglect” for “there is reasonable cause for the failure to file such statement in a timely fashion”.\nSubsec. (f).  Pub. L. 100–647, §\u202f5051(a) , added subsec. (f).\nAmendment by  Pub. L. 115–97  applicable to advance refunding bonds issued after  Dec. 31, 2017 , see  section 13532(c) of Pub. L. 115–97 , set out as a note under  section 148 of this title .\nPub. L. 111–147, title V, §\u202f502(f) ,  Mar. 18, 2010 ,  124 Stat. 108 , provided that:  “The amendments made by this section [amending this section, sections 163, 165, 871, 881, 1287, and 4701 of this title, and  section 3121 of Title 31 , Money and Finance] shall apply to obligations issued after the date which is 2 years after the date of the enactment of this Act [ Mar. 18, 2010 ].”\nPub. L. 110–289, div. C, title I, §\u202f3023(c) ,  July 30, 2008 ,  122 Stat. 2895 , provided that:  “The amendments made by this section [amending this section] shall apply to guarantees made after the date of the enactment of this Act [ July 30, 2008 ].”\nAmendment by  Pub. L. 109–222  applicable to bonds issued after  May 17, 2006 , see  section 508(e) of Pub. L. 109–222 , set out as a note under  section 148 of this title .\nPub. L. 104–188, title I, §\u202f1704(b)(2) ,  Aug. 20, 1996 ,  110 Stat. 1878 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 7651 of the Omnibus Budget Reconciliation Act of 1989 [ Pub. L. 101–239 ].”\nPub. L. 101–239, title VII, §\u202f7651(b) ,  Dec. 19, 1989 ,  103 Stat. 2385 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to bonds issued after  September 14, 1989 . \n \n “(2)   Bonds sold before  september 15, 1989 .— The amendment made by subsection (a) shall not apply to any bond sold before  September 15, 1989 , and issued before  October 15, 1989 . \n \n “(3)   Bonds with respect to which preliminary offering materials mailed .— The amendment made by subsection (a) shall not apply to any issue issued after the date of the enactment of this Act [ Dec. 19, 1989 ] if the preliminary offering materials with respect to such issue were mailed (or otherwise delivered) to members of the underwriting syndicate before  September 15, 1989 . \n \n “(4)   Certain other bonds .— In the case of a bond issued before  January 1, 1991 , with respect to which official action was taken (or a series of official actions were taken), or other comparable preliminary approval was given, before  November 18, 1989 , demonstrating an intent to issue such bonds in a maximum specified amount for such issue or with a maximum specified amount of net proceeds of such issue, the issuer may elect to apply section 149(g)(2) of the Internal Revenue Code of 1986 (as added by this section) by substituting ‘15 percent’ for ‘10 percent’ in subparagraph (A) and ‘50 percent’ for ‘60 percent’ in subparagraph (C). \n \n “(5)   Bonds issued to finance self-insurance funds .— The amendment made by subsection (a) shall not apply to any bonds issued before  July 1, 1990 , to finance a self-insurance fund if official action was taken (or a series of official actions were taken), or other comparable preliminary approval was given, before  September 15, 1989 , demonstrating an intent to issue such bonds in a maximum specified amount for such issue or with a maximum specified amount of net proceeds of such issue.”\nAmendment by section 1013(a)(20)–(22) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title V, §\u202f5051(b) ,  Nov. 10, 1988 ,  102 Stat. 3677 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to bonds issued after  October 21, 1988 . \n \n “(2)   Special rule for refunding bonds .— In the case of a bond issued to refund a bond issued before  October 22, 1988 — “(A)  if the 3-year period described in section 149(f)(2)(A) of the 1986 Code would (but for this paragraph) expire on or before  October 22, 1989 , such period shall expire on  October 21, 1990 , and \n \n “(B)  if such period expires after  October 22, 1989 , the portion of the proceeds of the issue of which the refunded bond is a part which is available (on the date of issuance of the refunding issue) to provide loans shall be treated as proceeds of a separate issue (issued after  October 21, 1988 ) for purposes of applying section 149(f) of the 1986 Code.”\nSubsec. (e) applicable to bonds issued after  Dec. 31, 1986 , see  section 1311(d) of Pub. L. 99–514 , as amended, set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nFederal Savings and Loan Insurance Corporation abolished and its functions transferred, see sections 401 to 406 of  Pub. L. 101–73  set out as a note under  section 1437 of Title 12 , Banks and Banking.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS'},
  'content': 'The term “bond” includes any obligation.\nThe term “governmental unit” does not include the United States or any agency or instrumentality thereof.\nThe term “net proceeds” means, with respect to any issue, the proceeds of such issue reduced by amounts in a reasonably required reserve or replacement fund.\nThe term “501(c)(3) organization” means any organization described in section 501(c)(3) and exempt from tax under section 501(a).\nProperty shall be treated as owned by a governmental unit if it is owned on behalf of such unit.\nThe term “tax-exempt” means, with respect to any bond (or issue), that the interest on such bond (or on the bonds issued as part of such issue) is excluded from gross income.\nIn the case of any residence with respect to which financing is provided from the proceeds of a tax-exempt qualified mortgage bond or qualified veterans’ mortgage bond, if there is a continuous period of at least 1 year during which such residence is not the principal residence of at least 1 of the mortgagors who received such financing, then no deduction shall be allowed under this chapter for interest on such financing which accrues on or after the date such period began and before the date such residence is again the principal residence of at least 1 of the mortgagors who received such financing.\nSubparagraph (A) shall not apply to the extent the Secretary determines that its application would result in undue hardship and that the failure to meet the requirements of subparagraph (A) resulted from circumstances beyond the mortgagor’s control.\nNo deduction shall be allowed under this chapter for interest on financing described in subparagraph (A) which accrues during the period beginning on the date such facility is used as described in subparagraph (A)(i) and ending on the date such facility is not so used.\nIn the case of any facility with respect to which financing is provided from the proceeds of any private activity bond to which this paragraph applies, if such facility is not used for a purpose for which a tax-exempt bond could be issued on the date of such issue, no deduction shall be allowed under this chapter for interest on such financing which accrues during the period beginning on the date such facility is not so used and ending on the date such facility is so used.\nThis paragraph applies to any private activity bond which, when issued, purported to be a tax-exempt exempt facility bond described in a paragraph (other than paragraph (7)) of section 142(a) or a qualified small issue bond.\nIn the case of any financing provided from the proceeds of any bond which, when issued, purported to be a qualified small issue bond, no deduction shall be allowed under this chapter for interest on such financing which accrues during the period such bond is not a qualified small issue bond.\nAny use with respect to facilities financed with proceeds of an issue which are not required to be used for the exempt purpose of such issue shall not be taken into account.\nIf the amounts payable for the use of a facility are not interest, subsection (b) shall apply to such amounts as if they were interest but only to the extent such amounts for any period do not exceed the amount of interest accrued on the bond financing for such period.\nIn the case of any person which uses only a portion of the facility, only the interest accruing on the financing allocable to such portion shall be taken into account by such person.\nIn the case of any facility where part but not all of the facility is not used for an exempt purpose, only the interest accruing on the financing allocable to such part shall be taken into account.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection and subsection (b).\nA qualified scholarship funding bond shall be treated as a State or local bond.\nAny qualified scholarship funding bond, and qualified student loan bond, outstanding on the date of the issuer’s election under this paragraph (and any bond (or series of bonds) issued to refund such a bond) shall not fail to be a tax-exempt bond solely because the issuer ceases to be described in subparagraphs (A) and (B) of paragraph (2) if the issuer meets the requirements of subparagraphs (B) and (C) of this paragraph.\nAn election under this paragraph may be revoked only with the consent of the Secretary.\nBonds which are part of an issue which meets the requirements of paragraph (1) shall not be treated as private activity bonds except for purposes of sections 147(f) and 149(d).\nThe Higher Education Act of 1965, referred to in subsec. (d)(2)(A), (3)(F)(i), is  Pub. L. 89–329 ,  Nov. 8, 1965 ,  79 Stat. 1219 , which is classified generally to chapter 28 (§\u202f1001 et seq.) of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 20  and Tables.\n1996—Subsec. (d)(3).  Pub. L. 104–188  added par. (3).\n1988—Subsec. (b)(1)(A).  Pub. L. 100–647, §\u202f1013(a)(23)(C) , inserted “tax-exempt” before “qualified mortgage bond”.\nPub. L. 100–647, §\u202f1013(a)(30) , inserted before period at end “and before the date such residence is again the principal residence of at least 1 of the mortgagors who received such financing”.\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1013(a)(32) , inserted at end “If the provisions of prior law corresponding to section 142(d) apply to a refunded bond, such provisions shall apply (in lieu of section 142(d)) to the refunding bond.”\nSubsec. (b)(2)(A).  Pub. L. 100–647, §\u202f1013(a)(31) , substituted “described in paragraph” for “described paragraph”.\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1013(a)(23)(A) , (B), inserted “and small issue bonds” after “bonds” in heading, and “or a qualified small issue bond” before period at end of subpar. (B).\nSubsec. (b)(6).  Pub. L. 100–647, §\u202f1013(a)(33) , added par. (6).\nSubsec. (e)(1)(B).  Pub. L. 100–647, §\u202f6182(b) , inserted “(including land which is functionally related and subordinate thereto)” after “a firehouse”.\nSubsec. (e)(2).  Pub. L. 100–647, §\u202f6182(a) , inserted at end “For purposes of subparagraph (A), other firefighting services provided in an area shall be disregarded in determining whether an organization is a qualified volunteer fire department if such other firefighting services are provided by a qualified volunteer fire department (determined with the application of this sentence) and such organization and the provider of such other services have been continuously providing firefighting services to such area since  January 1, 1981 .”\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1013(a)(24)(A) , added par. (3).\nPub. L. 104–188, title I, §\u202f1614(b) ,  Aug. 20, 1996 ,  110 Stat. 1853 , provided that:  “The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 100–647, title I, §\u202f1013(a)(24)(B) ,  Nov. 10, 1988 ,  102 Stat. 3543 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to bonds issued after  October 21, 1988 .”\nAmendment by section 1013(a)(23), (30)–(33) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6182(c) ,  Nov. 10, 1988 ,  102 Stat. 3729 , provided that:  “The amendments made by this section [amending this section] shall apply to bonds issued after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nSection applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, with subsec. (b) applicable to changes in use (and ownership) after  Aug. 15, 1986 , but only with respect to financing (including refinancings) provided after such date, and with subsec. (d) applicable to payments made after  Aug. 15, 1986 , see sections 1311 to 1318 of  Pub. L. 99–514 , as amended, set out as an Effective Date; Transitional Rules note under  section 141 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS FOR PERSONAL EXEMPTIONS'},
  'content': 'In the case of an individual, the exemptions provided by this section shall be allowed as deductions in computing taxable income.\nAn exemption of the exemption amount for the taxpayer; and an additional exemption of the exemption amount for the spouse of the taxpayer if a joint return is not made by the taxpayer and his spouse, and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer.\nAn exemption of the exemption amount for each individual who is a dependent (as defined in section 152) of the taxpayer for the taxable year.\nExcept as otherwise provided in this subsection, the term “exemption amount” means $2,000.\nIn the case of an individual with respect to whom a deduction under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, the exemption amount applicable to such individual for such individual’s taxable year shall be zero.\nIn the case of any taxpayer whose adjusted gross income for the taxable year exceeds the applicable amount in effect under section 68(b), the exemption amount shall be reduced by the applicable percentage.\nFor purposes of subparagraph (A), the term “applicable percentage” means 2 percentage points for each $2,500 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds the applicable amount in effect under section 68(b). In the case of a married individual filing a separate return, the preceding sentence shall be applied by substituting “$1,250” for “$2,500”. In no event shall the applicable percentage exceed 100 percent.\nThe provisions of this paragraph shall not apply for purposes of determining whether a deduction under this section with respect to any individual is allowable to another taxpayer for any taxable year.\nThe term “exemption amount” means zero.\nFor purposes of any other provision of this title, the reduction of the exemption amount to zero under subparagraph (A) shall not be taken into account in determining whether a deduction is allowed or allowable, or whether a taxpayer is entitled to a deduction, under this section.\nNo exemption shall be allowed under this section with respect to any individual unless the TIN of such individual is included on the return claiming the exemption.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2017—Subsec. (d)(4).  Pub. L. 115–97, §\u202f11041(a)(1) , substituted “Except as provided in paragraph (5), in the case of” for “In the case of” in introductory provisions.\nSubsec. (d)(4)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(Q) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (d)(5).  Pub. L. 115–97, §\u202f11041(a)(2) , added par. (5).\n2013—Subsec. (d)(3)(A), (B).  Pub. L. 112–240, §\u202f101(b)(2)(B)(i)(I) , substituted “the applicable amount in effect under section 68(b)” for “the threshold amount”.\nSubsec. (d)(3)(C), (D).  Pub. L. 112–240, §\u202f101(b)(2)(B)(i)(II) , redesignated subpar. (D) as (C) and struck out former subpar. (C) which related to threshold amount.\nSubsec. (d)(3)(E), (F).  Pub. L. 112–240, §\u202f101(b)(2)(B)(i)(III) , struck out subpars. (E) and (F) which related to reduction of phaseout and termination of applicability of subsec. (d)(3), respectively.\nSubsec. (d)(4).  Pub. L. 112–240, §\u202f101(b)(2)(B)(ii) , in par. heading, substituted “Inflation adjustment” for “Inflation adjustments”, in subpar. (A), struck out “(A) Adjustment to basic amount of exemption” before “In the case of”, redesignated cls. (i) and (ii) as subpars. (A) and (B), respectively, and realigned margins, and struck out former subpar. (B). Prior to amendment, text of former subpar. (B) read as follows: “In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (3)(C) shall be increased by an amount equal to—\n“(i) such dollar amount, multiplied by\n“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 1990’ for ‘calendar year 1992’ in subparagraph (B) thereof.”\n2004—Subsec. (c).  Pub. L. 108–311  reenacted heading without change and amended text generally. Prior to amendment, text consisted of pars. (1) to (6) relating to additional exemption for dependents in general, exemption denied in case of certain married dependents, child defined, student defined, certain income of handicapped dependents not taken into account, and treatment of missing children, respectively.\n2002—Subsec. (c)(6)(B)(iii).  Pub. L. 107–147, §\u202f417(6) , inserted “as” before “such terms”.\nSubsec. (c)(6)(C).  Pub. L. 107–147, §\u202f412(b) , substituted “for principal place of abode requirements” for “for earned income credit” in heading, “An” for “For purposes of section 32, an” in introductory provisions, and “principal place of abode requirements of section 2(a)(1)(B), section 2(b)(1)(A), and section 32(c)(3)(A)(ii)” for “requirement of section 32(c)(3)(A)(ii)” in concluding provisions.\n2001—Subsec. (d)(3)(E), (F). Pub. L. 107—16 added subpars. (E) and (F).\n2000—Subsec. (c)(6).  Pub. L. 106–554  added par. (6).\n1996—Subsec. (d)(3)(C)(i).  Pub. L. 104–188, §\u202f1702(a)(2) , substituted “joint return” for “joint of a return”.\nSubsec. (e).  Pub. L. 104–188, §\u202f1615(a)(1) , added subsec. (e).\n1993—Subsec. (d)(3)(E).  Pub. L. 103–66, §\u202f13205 , struck out heading and text of subpar. (E). Text read as follows: “This paragraph shall not apply to any taxable year beginning after  December 31, 1996 .”\nSubsec. (d)(4)(A)(ii), (B)(ii).  Pub. L. 103–66, §\u202f13201(b)(3)(G) , substituted “1992” for “1989”.\n1992—Subsec. (d)(3)(E).  Pub. L. 102–318  substituted “1996” for “1995”.\n1990—Subsec. (d).  Pub. L. 101–508, §\u202f11104(a) , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “For purposes of this section—\n“(1)  In general .—Except as provided in paragraph (2), the term ‘exemption amount’ means—\n“(A) $1,900 for taxable years beginning during 1987,\n“(B) $1,950 for taxable years beginning during 1988, and\n“(C) $2,000 for taxable years beginning after  December 31, 1988 .\n“(2)  Exemption amount disallowed in the case of certain dependents .—In the case of an individual with respect to whom a deduction under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, the exemption amount applicable to such individual for such individual’s taxable year shall be zero.\n“(3)  Inflation adjustment for years after 1989 .—In the case of any taxable year beginning in a calendar year after 1989, the dollar amount contained in paragraph (1)(C) shall be increased by an amount equal to—\n“(A) such dollar amount, multiplied by\n“(B) the cost-of-living adjustment determined under section 1(f)(3), for the calendar year in which the taxable year begins, by substituting ‘calendar year 1988’ for ‘calendar year 1987’ in subparagraph (B) thereof.”\nSubsec. (d)(3)(B).  Pub. L. 101–508, §\u202f11101(d)(1)(F) , substituted “1989” for “1987”.\n1988—Subsec. (c)(1)(B)(ii).  Pub. L. 100–647  inserted “who has not attained the age of 24 at the close of such calendar year” after “student”.\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f103(b) , redesignated subsec. (e) as (c) and struck out former subsec. (c) which provided for an additional exemption for taxpayer or spouse aged 65 or more.\nSubsec. (d).  Pub. L. 99–514, §\u202f103(b) , redesignated subsec. (f) as (d) and struck out former subsec. (d) which provided for an additional exemption for blindness of taxpayer or spouse.\nSubsec. (e).  Pub. L. 99–514, §\u202f103(b) , redesignated subsec. (e) as (c).\nPub. L. 99–514, §\u202f1847(b)(3) , substituted “section 22(e)” for “section 37(e)” in par. (5)(C).\nSubsec. (f).  Pub. L. 99–514, §\u202f103(b) , redesignated subsec. (f) as (d).\nPub. L. 99–514, §\u202f103(a) , amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “For purposes of this section, the term ‘exemption amount’ means, with respect to any taxable year, $1,000 increased by an amount equal to $1,000 multiplied by the cost-of-living adjustment (as defined in section 1(f)(3)) for the calendar year in which the taxable year begins. If the amount determined under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10 (or if such amount is a multiple of $5, such amount shall be increased to the next highest multiple of $10).”\n1984—Subsec. (e)(5).  Pub. L. 98–369  added par. (5).\n1981—Subsecs. (b), (c), (d)(1), (2), (e)(1).  Pub. L. 97–34, §\u202f104(c)(1) , substituted “the exemption amount” for “$1,000” wherever appearing.\nSubsec. (f).  Pub. L. 97–34, §\u202f104(c)(2) , added subsec. (f).\n1978— Pub. L. 95–600  increased exemption from $750 to $1,000 with respect to taxable years beginning after  Dec. 31, 1978 .\n1976—Subsec. (e)(4).  Pub. L. 94–455  struck out “and educational institution” after “Student” in heading, substituted in subpars. (A) and (B) “organization described in section 170(b)(1)(A)(ii)” for “institution”, and struck out provisions following subpar. (B) defining educational institution.\n1971— Pub. L. 92–178  increased exemption from $650 to $675 with respect to taxable years beginning after  Dec. 31, 1970 , and before  Jan. 1, 1972 , and from $675 to $750 with respect to taxable years beginning after  Dec. 31, 1971 .\n1969— Pub. L. 91–172, §\u202f801(a)(1) , (b)(1), (c)(1), (d)(1), increased exemption from $600 to $625 with respect to taxable years beginning after  Dec. 31, 1969 , and before  Jan. 1, 1971 , from $625 to $650 for taxable years beginning after  Dec. 31, 1970 , and before  Jan. 1, 1972 , from $650 to $700 for taxable years beginning after  Dec. 31, 1971 , and before  Jan. 1, 1973 , and from $700 to $750 for taxable years beginning after  Dec. 31, 1972 .\nSubsecs. (b), (c),  Pub. L. 91–172, §\u202f941(b) , substituted “if a joint return is not made by the taxpayer and his spouse” for “if a separate return is made by the taxpayer”.\nAmendment by  section 11002(d)(1)(Q) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f11041(f) ,  Dec. 22, 2017 ,  131 Stat. 2085 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 642, 3401, 3402, 3405, 6012, and 6334 of this title] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Wage withholding .— The Secretary of the Treasury may administer section 3402 for taxable years beginning before  January 1, 2019 , without regard to the amendments made by subsections (a) and (c) [amending this section and sections 3401, 3402, 3405, 6012, and 6334 of this title].”\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 101(b)(3) of Pub. L. 112–240 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 107–147, title IV, §\u202f412(e) ,  Mar. 9, 2002 ,  116 Stat. 54 , provided that:  “The amendments made by this section [amending this section and sections 358, 469, 1091, 1233, 1234A, and 1234B of this title] shall take effect as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  section 1(a)(7) of Pub. L. 106–554 ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–587] to which they relate.”\nPub. L. 107–16, title I, §\u202f102(b) ,  June 7, 2001 ,  115 Stat. 44 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f306(b)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–635, provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Dec. 21, 2000 ].”\nAmendment by  section 1615(a)(1) of Pub. L. 104–188  applicable with respect to returns the due date for which, without regard to extensions, is on or after the 30th day after  Aug. 20, 1996 , with special rule for 1995 and 1996, see  section 1615(d) of Pub. L. 104–188 , set out as a note under  section 21 of this title .\nAmendment by  section 1702(a)(2) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  section 13201(b)(3)(G) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nAmendment by  section 11101(d)(1)(F) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nAmendment by  section 11104(a) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11104(c) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6010(b) ,  Nov. 10, 1988 ,  102 Stat. 3691 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”\nAmendment by  section 103 of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1847(b)(3) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f426(b) ,  July 18, 1984 ,  98 Stat. 805 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 104(e) of Pub. L. 97–34 , set out as a note under  section 1 of this title .\nPub. L. 95–600, title I, §\u202f102(d)(1) ,  Nov. 6, 1978 ,  92 Stat. 2771 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and sections 6012 and 6013 of this title] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–178, title II, §\u202f201(a) , (b),  Dec. 10, 1971 ,  85 Stat. 510 , provided in part that the increase in exemption from $650 to $675 was effective with respect to taxable years beginning after  Dec. 31, 1970 , and before  Jan. 1, 1972 , and from $675 to $750 was effective with respect to taxable years beginning after  Dec. 31, 1971 .\nPub. L. 91–172, title VIII, §\u202f801(a)(1) ,  Dec. 30, 1969 ,  83 Stat. 675 , provided in part that the increase in exemption from $600 to $625 is effective with respect to taxable years beginning after  Dec. 31, 1969 , and before  Jan. 1, 1971 .\nPub. L. 91–172, title VIII, §\u202f801(b)(1) ,  Dec. 30, 1969 ,  83 Stat. 676 , provided in part that the increase in the exemption from $625 to $650 is effective with respect to taxable years beginning after  Dec. 31, 1970 , and before  Jan. 1, 1972 .\nPub. L. 91–172, title IX, §\u202f941(c) ,  Dec. 30, 1969 ,  83 Stat. 726 , provided that:  “The amendments made by subsections (a) [amending  section 6012 of this title ] and (b) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 91–172, title VIII, §\u202f801(c)(1) , (d)(1),  Dec. 30, 1969 ,  83 Stat. 676 , provided for an increase in the personal exemption to $700, effective with respect to taxable years beginning after  Dec. 31, 1971 , and before  Jan. 1, 1973 , and to $750, effective with respect to taxable years beginning after  Dec. 31, 1972 , prior to repeal by  section 201(c) of Pub. L. 92–178 .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS FOR PERSONAL EXEMPTIONS'},
  'content': 'If an individual is a dependent of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall be treated as having no dependents for any taxable year of such individual beginning in such calendar year.\nAn individual shall not be treated as a dependent of a taxpayer under subsection (a) if such individual has made a joint return with the individual’s spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.\nThe term “dependent” does not include an individual who is not a citizen or national of the United States unless such individual is a resident of the United States or a country contiguous to the United States.\nIn the case of an individual who is permanently and totally disabled (as defined in section 22(e)(3)) at any time during such calendar year, the requirements of subparagraph (A) shall be treated as met with respect to such individual.\nIf the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual.\nThe term “custodial parent” means the parent having custody for the greater portion of the calendar year.\nThe term “noncustodial parent” means the parent who is not the custodial parent.\nThis subsection shall not apply in any case where over one-half of the support of the child is treated as having been received from a taxpayer under the provision of subsection (d)(3).\nFor purposes of this subsection, in the case of the remarriage of a parent, support of a child received from the parent’s spouse shall be treated as received from the parent.\nIn determining whether any of the relationships specified in subparagraph (A)(i) or paragraph (4) exists, a legally adopted individual of the taxpayer, or an individual who is lawfully placed with the taxpayer for legal adoption by the taxpayer, shall be treated as a child of such individual by blood.\nFor purposes of subparagraph (A)(ii), the term “eligible foster child” means an individual who is placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.\nAn individual shall not be treated as a member of the taxpayer’s household if at any time during the taxable year of the taxpayer the relationship between such individual and the taxpayer is in violation of local law.\nThe terms “brother” and “sister” include a brother or sister by the half blood.\nSubparagraphs (A) and (C) shall cease to apply as of the first taxable year of the taxpayer beginning after the calendar year in which there is a determination that the child is dead (or, if earlier, in which the child would have attained age 18).\nFor provision treating child as dependent of both parents for purposes of certain provisions, see sections 105(b), 132(h)(2)(B), and 213(d)(5).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2017—Subsec. (d)(5).  Pub. L. 115–97  amended par. (5) generally. Prior to amendment, text read as follows: “For purposes of this subsection—\n“(A) payments to a spouse which are includible in the gross income of such spouse under section 71 or 682 shall not be treated as a payment by the payor spouse for the support of any dependent, and\n“(B) in the case of the remarriage of a parent, support of a child received from the parent’s spouse shall be treated as received from the parent.”\n2008—Subsec. (c)(1)(E).  Pub. L. 110–351, §\u202f501(b) , added subpar. (E).\nSubsec. (c)(3)(A).  Pub. L. 110–351, §\u202f501(a) , inserted “is younger than the taxpayer claiming such individual as a qualifying child and” after “such individual” in introductory provisions.\nSubsec. (c)(4).  Pub. L. 110–351, §\u202f501(c)(2)(B)(ii) , substituted “who can claim the same” for “claiming” in heading.\nSubsec. (c)(4)(A).  Pub. L. 110–351, §\u202f501(c)(2)(B)(i) , substituted “Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers” for “Except as provided in subparagraph (B), if (but for this paragraph) an individual may be and is claimed as a qualifying child by 2 or more taxpayers” in introductory provisions.\nSubsec. (c)(4)(C).  Pub. L. 110–351, §\u202f501(c)(2)(A) , added subpar. (C).\n2005—Subsec. (e).  Pub. L. 109–135  amended heading and text of subsec. (e) generally. Prior to amendment, text consisted of pars. (1) to (4) relating to special rule for divorced parents, requirements for divorced parents, definitions of custodial and noncustodial parent, and exception for multiple-support agreements.\n2004— Pub. L. 108–311  reenacted section catchline without change and amended text generally. Prior to amendment, section consisted of subsecs. (a) to (e) relating to general definition of dependent, rules relating to general definition, multiple support agreements, special support test in case of students, and support test in case of child of divorced parents, etc., respectively.\n1986—Subsec. (a)(9).  Pub. L. 99–514, §\u202f1301(j)(8) , substituted “section 7703” for “section 143”.\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f104(b)(3) , substituted “section 151(c)(4)” for “section 151(e)(4)”.\nSubsec. (e)(1)(A).  Pub. L. 99–514, §\u202f104(b)(1)(B) , substituted “section 151(c)(3)” for “section 151(e)(3)”.\n1984—Subsec. (e).  Pub. L. 98–369, §\u202f423(a) , amended subsec. (e) generally, and in substantially revising support test provisions, enacted par. (1) custodial parent exemption, former par. (1) declaring the general rule that where a child received over one-half of his calendar year support from parents who were divorced or legally separated under a decree of divorce or separate maintenance, or were separated under a written separation agreement and the child was in the custody of one or both parents for more than one-half of the calendar year, the child would be treated as receiving over half of his support from the parent having custody for a greater portion of the calendar year unless treated under special rule provision as having received over half of his support from the parent not having custody; enacted par. (2) release of custodial parent exemption for the year, former par. (2) declaring the special rule that parent without custody would be deemed as furnishing over half of the support where the decree of divorce or separate maintenance, or written agreement, covering the taxable year, provided that parent without custody should be entitled to the section 151 deduction for the child and such parent provided at least $600 calendar year support, or alternatively, such parent without custody provided $1,200 or more calendar year support and the parent with custody did not establish more support of the child than the parent without custody; redesignated as par. (3) former par. (4) provision respecting exception for multiple-support agreement, deleting former par. (3) respecting requirement of an itemized statement of expenditures to resolve more support claims; added par. (4) respecting exception for certain pre-1985 instruments; added par. (5) enunciating special rule for support received from new spouse of parent, deleting former par. (5) regulations prescription provision; and added par. (6) cross reference provision.\nSubsec. (e)(6).  Pub. L. 98–369, §\u202f482(b)(2) , substituted “section 213(d)(5)” for “section 213(d)(4)”.\n1976—Subsec. (a)(9).  Pub. L. 94–455, §\u202f1901(b)(7)(B) , substituted “section 143” for “section 153”.\nSubsec. (a)(10).  Pub. L. 94–455, §\u202f1901(a)(24)(A) , struck out par. (10) relating to descendents of a taxpayer, who were members of taxpayer’s household, before receiving institutional care.\nSubsec. (b)(3).  Pub. L. 94–455, §\u202f1901(a)(24)(B) , among other changes struck out “of the Canal Zone, or of the Republic of Panama” after “country contiguous to the United States,” and provisions relating to children born or adopted in Philippines.\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(b)(8)(A) , substituted “organization described in section 170(b)(1)(A)(ii)” for “institution (as defined in section 151(e)(4))”.\nSubsec. (e)(2)(B)(i).  Pub. L. 94–455, §\u202f2139(a) , substituted “each” for “all”.\nSubsec. (e)(3), (5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1972—Subsec. (b)(3).  Pub. L. 92–580  substituted “citizen or national of the United States” for “citizen of the United States” in two places.\n1969—Subsec. (b)(2).  Pub. L. 91–172  inserted reference to foster children who satisfy requirements of subsec. (a)(9) of this section.\n1967—Subsec. (a).  Pub. L. 90–78, §\u202f1(b) , inserted “or (e)” after “subsection (c)”.\nSubsec. (e).  Pub. L. 90–78, §\u202f1(a) , added subsec. (e).\n1959—Subsec. (b)(2).  Pub. L. 86–376  provided that a child who is a member of an individual’s household if placed with such individual by an authorized placement agency for legal adoption by such individual shall be treated as a child by blood.\n1958—Subsec. (a)(9).  Pub. L. 85–866, §\u202f4(a) , inserted “(other than an individual who at any time during the taxable year was the spouse, determined without regard to section 153, of the taxpayer)”.\nSubsec. (b)(3).  Pub. L. 85–866, §\u202f4(b) , among other changes, struck out provision that “dependent” does not include any individual who is not a United States citizen unless such individual is a resident of United States or of a contiguous country, or of Canal Zone or Panama, and inserted provision barring exclusion from definition of “dependent” any child of taxpayer, legally adopted by him, if, for taxable year of taxpayer, child’s principal place of abode is taxpayer’s home and child is member of taxpayer’s household, if taxpayer is United States citizen.\nSubsec. (b)(5).  Pub. L. 85–866, §\u202f4(c) , added par. (5).\n1955—Subsec. (b)(3). Act  Aug. 9, 1955 , substituted “ January 1, 1956 ” for “ July 5, 1946 ”.\nAmendment by  Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nAmendment by  Pub. L. 110–351  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 501(d) of Pub. L. 110–351 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provisions of the Working Families Tax Relief Act of 2004,  Pub. L. 108–311 , to which such amendment relates, see  section 404(d) of Pub. L. 109–135 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by section 104(b)(1)(B), (3) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1301(j)(8) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 423(a) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 423(d) of Pub. L. 98–369 , set out as a note under  section 2 of this title .\nAmendment by  section 482(b)(2) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 482(c) of Pub. L. 98–369 , set out as a note under  section 213 of this title .\nAmendment by section 1901(a)(24), (b)(7)(B), (8)(A) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2139(b) ,  Oct. 4, 1976 ,  90 Stat. 1932 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 92–580, §\u202f1(c) ,  Oct. 27, 1972 ,  86 Stat. 1276 , provided that:  “The amendments made by subsections (a) [amending this section] and (b) [amending  section 873 of this title ] shall apply to taxable years beginning after  December 31, 1971 .”\nPub. L. 91–172, title IX, §\u202f912(b) ,  Dec. 30, 1969 ,  83 Stat. 722 , provided that:  “The amendment made by subsection (a) of this section [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 90–78, §\u202f2 ,  Aug. 31, 1967 ,  81 Stat. 192 , provided that:  “The amendments made by the first section of this Act [amending this section] shall apply with respect to taxable years beginning after  December 31, 1966 .”\nPub. L. 86–376, §\u202f1(b) ,  Sept. 23, 1959 ,  73 Stat. 699 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1958 .”\nAmendment by section 4(a), (c) of  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, §\u202f4(d) ,  Sept. 2, 1958 ,  72 Stat. 1607 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 .”\nAct Aug. 9, 1955, ch. 693, §\u202f3(b) ,  69 Stat. 626 , provided that:  “The amendment made by section 2 of this Act [amending this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS FOR PERSONAL EXEMPTIONS'},
  'content': 'A prior section 153,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 45 , related to determination of marital status, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1901(b)(7)(A)(i) , (d),  Oct. 4, 1976 ,  90 Stat. 1794 , 1803, applicable with respect to taxable years beginning after  Dec. 31, 1976 . See  section 143 of this title .\n2004—Pars. (1) to (4).  Pub. L. 108–311  redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “For definitions of ‘husband’ and ‘wife’, as used in section 152(b)(4), see section 7701(a)(17).”\n1986—Par. (4).  Pub. L. 99–514, §\u202f1272(d)(7) , redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “For exemptions of citizens deriving income mainly from sources within possessions of the United States, see section 931(e).”\nPar. (5).  Pub. L. 99–514, §\u202f1272(d)(7) , redesignated par. (5) as (4).\nPub. L. 99–514, §\u202f1301(j)(8) , substituted “section 7703” for “section 143”.\n1976—Par. (5).  Pub. L. 94–455, §\u202f1901(b)(7)(C) , added par. (5).\n1966—Par. (3).  Pub. L. 89–809  substituted “873(b)(3)” for “873(d)”.\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  section 1272(d)(7) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by  section 1301(j)(8) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as a note under  section 871 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In computing taxable income under section 63, there shall be allowed as deductions the items specified in this part, subject to the exceptions provided in part IX (sec. 261 and following, relating to items not deductible).\n1977— Pub. L. 95–30  substituted “section 63” for “section 63(a)”.\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'No deduction shall be allowed under subsection (a) for any contribution or gift which would be allowable as a deduction under section 170 were it not for the percentage limitations, the dollar limitations, or the requirements as to the time of payment, set forth in such section.\nNo deduction shall be allowed under subsection (a) for any payment made, directly or indirectly, to an official or employee of any government, or of any agency or instrumentality of any government, if the payment constitutes an illegal bribe or kickback or, if the payment is to an official or employee of a foreign government, the payment is unlawful under the Foreign Corrupt Practices Act of 1977. The burden of proof in respect of the issue, for the purposes of this paragraph, as to whether a payment constitutes an illegal bribe or kickback (or is unlawful under the Foreign Corrupt Practices Act of 1977) shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud).\nNo deduction shall be allowed under subsection (a) for any payment (other than a payment described in paragraph (1)) made, directly or indirectly, to any person, if the payment constitutes an illegal bribe, illegal kickback, or other illegal payment under any law of the United States, or under any law of a State (but only if such State law is generally enforced), which subjects the payor to a criminal penalty or the loss of license or privilege to engage in a trade or business. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer. The burden of proof in respect of the issue, for purposes of this paragraph, as to whether a payment constitutes an illegal bribe, illegal kickback, or other illegal payment shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud).\nNo deduction shall be allowed under subsection (a) for any kickback, rebate, or bribe made by any provider of services, supplier, physician, or other person who furnishes items or services for which payment is or may be made under the Social Security Act, or in whole or in part out of Federal funds under a State plan approved under such Act, if such kickback, rebate, or bribe is made in connection with the furnishing of such items or services or the making or receipt of such payments. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer.\nFor purposes of this subtitle, whenever the amount of capital contributions evidenced by a share of stock issued pursuant to section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C., sec. 1718) exceeds the fair market value of the stock as of the issue date of such stock, the initial holder of the stock shall treat the excess as ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.\nNo deduction shall be allowed under subsection (a) for the portion of dues or other similar amounts paid by the taxpayer to an organization which is exempt from tax under this subtitle which the organization notifies the taxpayer under section 6033(e)(1)(A)(ii) is allocable to expenditures to which paragraph (1) applies.\nThe term “influencing legislation” means any attempt to influence any legislation through communication with any member or employee of a legislative body, or with any government official or employee who may participate in the formulation of legislation.\nThe term “legislation” has the meaning given such term by section 4911(e)(2).\nIn the case of any taxpayer engaged in the trade or business of conducting activities described in paragraph (1), paragraph (1) shall not apply to expenditures of the taxpayer in conducting such activities directly on behalf of another person (but shall apply to payments by such other person to the taxpayer for conducting such activities).\nParagraph (1) shall not apply to any in-house expenditures for any taxable year if such expenditures do not exceed $2,000. In determining whether a taxpayer exceeds the $2,000 limit under this clause, there shall not be taken into account overhead costs otherwise allocable to activities described in paragraphs (1)(A) and (D).\nAny amount paid or incurred for research for, or preparation, planning, or coordination of, any activity described in paragraph (1) shall be treated as paid or incurred in connection with such activity.\nFor reporting requirements and alternative taxes related to this subsection, see section 6033(e).\nExcept as provided in the following paragraphs of this subsection, no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred (whether by suit, agreement, or otherwise) to, or at the direction of, a government or governmental entity in relation to the violation of any law or the investigation or inquiry by such government or entity into the potential violation of any law.\nSubparagraph (A) shall not apply to any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation.\nParagraph (1) shall not apply to any amount paid or incurred by reason of any order of a court in a suit in which no government or governmental entity is a party.\nParagraph (1) shall not apply to any amount paid or incurred as taxes due.\nAn election under this subsection for any taxable year shall be made at such time and in such manner as the Secretary shall by regulations prescribe.\nThis subsection shall not apply to any legislator whose place of residence within the legislative district which he represents is 50 or fewer miles from the capitol building of the State.\nNo deduction shall be allowed under subsection (a) for any expenses of an advertisement carried by a foreign broadcast undertaking and directed primarily to a market in the United States. This paragraph shall apply only to foreign broadcast undertakings located in a country which denies a similar deduction for the cost of advertising directed primarily to a market in the foreign country when placed with a United States broadcast undertaking.\nFor purposes of paragraph (1), the term “broadcast undertaking” includes (but is not limited to) radio and television stations.\nExcept as provided in paragraph (2), no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred by a corporation in connection with the reacquisition of its stock or of the stock of any related person (as defined in section 465(b)(3)(C)).\nAny amount paid or incurred in connection with the redemption of any stock in a regulated investment company which issues only stock which is redeemable upon the demand of the shareholder.\nNo deduction shall be allowed under paragraph (1) to the extent that the amount of such deduction exceeds the taxpayer’s earned income (within the meaning of section 401(c)) derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established.\nIn the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in section 213(d)(10)) shall be taken into account under paragraph (1).\nAny amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a).\nThe deduction allowable by reason of this subsection shall not be taken into account in determining an individual’s net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2 for taxable years beginning before  January 1, 2010 , or after  December 31, 2010 .\nIn the case of any publicly held corporation, no deduction shall be allowed under this chapter for applicable employee remuneration with respect to any covered employee to the extent that the amount of such remuneration for the taxable year with respect to such employee exceeds $1,000,000.\nExcept as otherwise provided in this paragraph, the term “applicable employee remuneration” means, with respect to any covered employee for any taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this subsection) for remuneration for services performed by such employee (whether or not during the taxable year).\nThe term “applicable employee remuneration” shall not include any remuneration payable under a written binding contract which was in effect on  February 17, 1993 , and which was not modified thereafter in any material respect before such remuneration is paid.\nThe dollar limitation contained in paragraph (1) shall be reduced (but not below zero) by the amount (if any) which would have been included in the applicable employee remuneration of the covered employee for the taxable year but for being disallowed under section 280G.\nThe dollar limitation contained in paragraph (1) with respect to any covered employee shall be reduced (but not below zero) by the amount of any payment (with respect to such employee) of the tax imposed by section 4985 directly or indirectly by the expatriated corporation (as defined in such section) or by any member of the expanded affiliated group (as defined in such section) which includes such corporation.\nRemuneration shall not fail to be applicable employee remuneration merely because it is includible in the income of, or paid to, a person other than the covered employee, including after the death of the covered employee.\nExcept as provided in clause (ii), the term “applicable employer” means any employer from whom 1 or more troubled assets are acquired under a program established by the Secretary under section 101(a) of the Emergency Economic Stabilization Act of 2008 if the aggregate amount of the assets so acquired for all taxable years exceeds $300,000,000.\nIf the only sales of troubled assets by an employer under the program described in clause (i) are through 1 or more direct purchases (within the meaning of section 113(c) of the Emergency Economic Stabilization Act of 2008), such assets shall not be taken into account under clause (i) in determining whether the employer is an applicable employer for purposes of this paragraph.\nTwo or more persons who are treated as a single employer under subsection (b) or (c) of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of either such subsection, paragraphs (2) and (3) thereof shall be disregarded.\nIf an employee is a covered executive with respect to an applicable employer for any applicable taxable year, such employee shall be treated as a covered executive with respect to such employer for all subsequent applicable taxable years and for all subsequent taxable years in which deferred deduction executive remuneration with respect to services performed in all such applicable taxable years would (but for this paragraph) be deductible.\nFor purposes of this paragraph, the term “executive remuneration” means the applicable employee remuneration of the covered executive, as determined under paragraph (4) without regard to subparagraph (B) thereof. Such term shall not include any deferred deduction executive remuneration with respect to services performed in a prior applicable taxable year.\nFor purposes of this paragraph, the term “deferred deduction executive remuneration” means remuneration which would be executive remuneration for services performed in an applicable taxable year but for the fact that the deduction under this chapter (determined without regard to this paragraph) for such remuneration is allowable in a subsequent taxable year.\nRules similar to the rules of subparagraphs (D) and (E) of paragraph (4) shall apply for purposes of this paragraph.\nThe Secretary may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this paragraph and the Emergency Economic Stabilization Act of 2008, including the extent to which this paragraph applies in the case of any acquisition, merger, or reorganization of an applicable employer.\nFor purposes of this paragraph, the term “disqualified taxable year” means, with respect to any employer, any taxable year for which such employer is a covered health insurance provider.\nTwo or more persons who are treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of any such subsection, paragraphs (2) and (3) thereof shall be disregarded.\nFor purposes of this paragraph, the term “applicable individual remuneration” means, with respect to any applicable individual for any disqualified taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this subsection) for remuneration (as defined in paragraph (4) without regard to subparagraph (B) thereof) for services performed by such individual (whether or not during the taxable year). Such term shall not include any deferred deduction remuneration with respect to services performed during the disqualified taxable year.\nFor purposes of this paragraph, the term “deferred deduction remuneration” means remuneration which would be applicable individual remuneration for services performed in a disqualified taxable year but for the fact that the deduction under this chapter (determined without regard to this paragraph) for such remuneration is allowable in a subsequent taxable year.\nRules similar to the rules of subparagraphs (D) and (E) of paragraph (4) shall apply for purposes of this paragraph.\nThe Secretary may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this paragraph.\nParagraph (1) shall not apply to any group health plan which is not required under the laws of the State of New York (determined without regard to this subsection or other provisions of Federal law) to reimburse at the rates provided in paragraph (1).\nFor purposes of this subsection, the term “group health plan” means a plan of, or contributed to by, an employer or employee organization (including a self-insured plan) to provide health care (directly or otherwise) to any employee, any former employee, the employer, or any other individual associated or formerly associated with the employer in a business relationship, or any member of their family.\nNotwithstanding paragraph (1)(A), if the expenses incurred by an employee for the use of a vehicle in performing services described in paragraph (1) exceed the qualified reimbursements for such expenses, such excess shall be taken into account in computing the miscellaneous itemized deductions of the employee under section 67.\nFor purposes of subsection (a)(2), in the case of an individual who performs services as a member of a reserve component of the Armed Forces of the United States at any time during the taxable year, such individual shall be deemed to be away from home in the pursuit of a trade or business for any period during which such individual is away from home in connection with such service.\nNo deduction shall be allowed for the applicable percentage of any FDIC premium paid or incurred by the taxpayer.\nParagraph (1) shall not apply to any taxpayer for any taxable year if the total consolidated assets of such taxpayer (determined as of the close of such taxable year) do not exceed $10,000,000,000.\nFor purposes of this subsection, the term “FDIC premium” means any assessment imposed under section 7(b) of the Federal Deposit Insurance Act ( 12 U.S.C. 1817(b) ).\nFor purposes of this subsection, the term “total consolidated assets” has the meaning given such term under section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5365 ).\nMembers of an expanded affiliated group shall be treated as a single taxpayer for purposes of applying this subsection.\nA partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this clause).\nThe Foreign Corrupt Practices Act of 1977, referred to in subsec. (c)(1), is title I of  Pub. L. 95–213 ,  Dec. 19, 1977 ,  91 Stat. 1494 , which enacted sections 78dd–1 to 78dd–3 of Title 15, Commerce and Trade, and amended sections 78m and 78ff of Title 15. For complete classification of this Act to the Code, see Short Title of 1977 Amendment note set out under  section 78a of Title 15  and Tables.\nThe Social Security Act, referred to in subsec. (c)(3), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 4 of the Clayton Act, referred to in subsec. (g)(1), is classified to  section 15 of Title 15 , Commerce and Trade.\nThe Securities Exchange Act of 1934, referred to in subsec. (m)(3)(B), (5)(D)(ii)(I), is  act June 6, 1934, ch. 404 ,  48 Stat. 881 , which is classified principally to chapter 2B (§\u202f78a et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 78a of Title 15  and Tables.\nThe Emergency Economic Stabilization Act of 2008, referred to in subsec. (m)(5), is div. A of  Pub. L. 110–343 ,  Oct. 3, 2008 ,  122 Stat. 3765 , which is classified principally to chapter 52 (§\u202f5201 et seq.) of Title 12, Banks and Banking. Section 101(a) of the Act enacted  section 5211(a) of Title 12  and amended  section 5315 of Title 5 , Government Organization and Employees, and  section 301 of Title 31 , Money and Finance. Section 113(c) of the Act is classified to  section 5223(c) of Title 12 . Section 120 of the Act is classified to  section 5230 of Title 12 . For complete classification of this Act to the Code, see Short Title note set out under  section 5201 of Title 12  and Tables.\n2021—Subsec. (m)(3)(C), (D).  Pub. L. 117–2  added subpar. (C), redesignated former subpar. (C) as (D), and, in subpar. (D), substituted “employee described in subparagraph (A) or (B)” for “employee”.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13311(a) , struck out “in excess of $3,000” after “income tax purposes” in concluding provisions.\nSubsec. (e)(2) to (8).  Pub. L. 115–97, §\u202f13308(a) , redesignated pars. (3) to (6) and (8) as (2) to (6), respectively, and struck out former par. (2) relating to exception for local legislation and par. (7) relating to special rule for Indian tribal governments.\nSubsec. (f).  Pub. L. 115–97, §\u202f13306(a)(1) , amended subsec. (f) generally. Prior to amendment, text read as follows: “No deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law.”\nSubsec. (m)(2).  Pub. L. 115–97, §\u202f13601(c)(1) , amended par. (2) generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘publicly held corporation’ means any corporation issuing any class of common equity securities required to be registered under section 12 of the Securities Exchange Act of 1934.”\nSubsec. (m)(3).  Pub. L. 115–97, §\u202f13601(c)(2) , inserted concluding provisions.\nSubsec. (m)(3)(A).  Pub. L. 115–97, §\u202f13601(b)(1) , substituted “such employee is the principal executive officer or principal financial officer of the taxpayer at any time during the taxable year, or was” for “as of the close of the taxable year, such employee is the chief executive officer of the taxpayer or is”.\nSubsec. (m)(3)(B).  Pub. L. 115–97, §\u202f13601(b)(2) , substituted “3” for “4” and “(other than any individual described in subparagraph (A))” for “(other than the chief executive officer)”.\nSubsec. (m)(3)(C).  Pub. L. 115–97, §\u202f13601(b)(3) , added subpar. (C).\nSubsec. (m)(4)(B) to (E).  Pub. L. 115–97, §\u202f13601(a)(1) , redesignated subpars. (D) to (G) as (B) to (E), respectively, and struck out former subpar. (B) relating to an exemption to the term “applicable employee remuneration” and former subpar. (C) relating to the term “applicable employee remuneration”.\nSubsec. (m)(4)(F).  Pub. L. 115–97, §\u202f13601(a)(1) , (d), added subpar. (F) and redesignated former subpar. (F) as (D).\nSubsec. (m)(4)(G).  Pub. L. 115–97, §\u202f13601(a)(1) , redesignated subpar. (G) as (E).\nSubsec. (m)(5)(E).  Pub. L. 115–97, §\u202f13601(a)(2)(A) , substituted “subparagraph (B)” for “subparagraphs (B), (C), and (D)”.\nSubsec. (m)(5)(G).  Pub. L. 115–97, §\u202f13601(a)(2)(B) , substituted “(D) and (E)” for “(F) and (G)”.\nSubsec. (m)(6)(D).  Pub. L. 115–97, §\u202f13601(a)(2)(A) , substituted “subparagraph (B)” for “subparagraphs (B), (C), and (D)”.\nSubsec. (m)(6)(G).  Pub. L. 115–97, §\u202f13601(a)(2)(B) , substituted “(D) and (E)” for “(F) and (G)”.\nSubsec. ( o )(3).  Pub. L. 115–97, §\u202f11002(d)(6) , substituted “adjusted by increasing any such amount under the 1991 agreement by an amount equal to—” and subpars. (A) and (B) for “adjusted for changes in the Consumer Price Index (as defined in section 1(f)(5)) since 1991.”\nSubsec. (q).  Pub. L. 115–97, §\u202f13307(a) , added subsec. (q). Former subsec. (q) redesignated (r), then (s).\nSubsec. (r).  Pub. L. 115–97, §\u202f13531(a) , added subsec. (r).\nSubsec. (s).  Pub. L. 115–97 , §§\u202f13307(a), 13531(a), redesignated subsec. (q) as (r), then (s).\n2014—Subsec. (g).  Pub. L. 113–295, §\u202f221(a)(23) , struck out concluding provisions which read as follows: “The preceding sentence shall not apply with respect to any conviction or plea before  January 1, 1970 , or to any conviction or plea on or after such date in a new trial following an appeal of a conviction before such date.”\nSubsec. (h)(4).  Pub. L. 113–295, §\u202f221(a)(24) , substituted “This subsection” for “For taxable years beginning after  December 31, 1980 , this subsection”.\n2011—Subsec. (a).  Pub. L. 112–10  struck out last sentence in concluding provisions which read as follows: “For purposes of paragraph (1), the amount of a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act shall be treated as an amount for compensation for personal services actually rendered.”\n2010—Subsec. (a).  Pub. L. 111–148, §\u202f10108(g)(1) , inserted at end of concluding provisions “For purposes of paragraph (1), the amount of a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act shall be treated as an amount for compensation for personal services actually rendered.”\nSubsec. ( l )(1).  Pub. L. 111–152, §\u202f1004(d)(2) , amended par. (1) generally. Prior to amendment, par. (1) authorized a deduction in an amount equal to the applicable percentage of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents.\nSubsec. ( l )(2)(B).  Pub. L. 111–152, §\u202f1004(d)(3) , inserted “,\u2000or any dependent, or individual described in subparagraph (D) of paragraph (1) with respect to,” after “spouse of” in introductory provisions.\nSubsec. ( l )(4).  Pub. L. 111–240  inserted “for taxable years beginning before  January 1, 2010 , or after  December 31, 2010 ” before period at end.\nSubsec. (m)(6).  Pub. L. 111–148, §\u202f9014(a) , added par. (6).\n2008—Subsec. (m)(5).  Pub. L. 110–343  added par. (5).\n2004—Subsec. (m)(4)(G).  Pub. L. 108–357, §\u202f802(b)(2) , added subpar. (G).\nSubsec. ( o ).  Pub. L. 108–357, §\u202f318(b) , struck out “reimbursed” before “expenses” in heading.\nSubsec. ( o )(2), (3).  Pub. L. 108–357, §\u202f318(a) , added par. (2) and redesignated former par. (2) as (3).\n2003—Subsecs. (p), (q).  Pub. L. 108–121  added subsec. (p) and redesignated former subsec. (p) as (q).\n1998—Subsec. (a).  Pub. L. 105–206 , in last sentence, substituted “investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime.” for “investigate, or provide support services for the investigation of, a Federal crime.”\nSubsec. ( l )(1)(B).  Pub. L. 105–277  amended table in subpar. (B) generally. Prior to amendment, table read as follows:\n1997—Subsec. (a).  Pub. L. 105–34, §\u202f1204(a) , inserted at end of concluding provisions “The preceding sentence shall not apply to any Federal employee during any period for which such employee is certified by the Attorney General (or the designee thereof) as traveling on behalf of the United States in temporary duty status to investigate, or provide support services for the investigation of, a Federal crime.”\nSubsec. ( l )(1)(B).  Pub. L. 105–34, §\u202f934(a) , amended table generally. Prior to amendment, table read as follows:\nSubsec. ( l )(2)(B).  Pub. L. 105–34, §\u202f1602(c) , inserted “The preceding sentence shall be applied separately with respect to—” at end and added cls. (i) and (ii).\nSubsecs. ( o ), (p).  Pub. L. 105–34, §\u202f1203(a) , added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n1996—Subsec. (k).  Pub. L. 104–188, §\u202f1704(p)(3) , substituted “reaquisition” for “redemption” in heading.\nSubsec. (k)(1).  Pub. L. 104–188, §\u202f1704(p)(1) , substituted “the reacquisition of its stock or of the stock of any related person (as defined in section 465(b)(3)(C))” for “the redemption of its stock”.\nSubsec. (k)(2)(A).  Pub. L. 104–188, §\u202f1704(p)(2) , struck out “or” at end of cl. (i), added cl. (ii), and redesignated former cl. (ii) as (iii).\nSubsec. ( l )(1).  Pub. L. 104–191, §\u202f311(a) , amended par. (1) generally. Prior to amendment, par. (1) read as follows:\n“(1)  In general .—In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to 30 percent of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents.”\nSubsec. ( l )(2)(C).  Pub. L. 104–191, §\u202f322(b)(2)(B) , added subpar. (C).\n1995—Subsec. ( l )(1).  Pub. L. 104–7, §\u202f1(b) , substituted “30 percent” for “25 percent”.\nSubsec. ( l )(6).  Pub. L. 104–7, §\u202f1(a) , struck out par. (6) “Termination” which read as follows: “This subsection shall not apply to any taxable year beginning after  December 31, 1993 .”\n1993—Subsec. (e).  Pub. L. 103–66, §\u202f13222(a) , amended heading and text generally. Prior to amendment, text consisted of pars. (1) and (2) relating to deduction of ordinary and necessary expenses paid or incurred in connection with certain activities relating to congressional, State, and local legislation.\nSubsec. ( l )(2)(B).  Pub. L. 103–66, §\u202f13174(b)(1) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply to any taxpayer who is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer.”\nSubsec. ( l )(3).  Pub. L. 103–66, §\u202f13131(d)(2) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows:\n“(A)  Medical deduction .—Any amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a).\n“(B)  Health insurance credit .—The amount otherwise taken into account under paragraph (1) as paid for insurance which constitutes medical care shall be reduced by the amount (if any) of the health insurance credit allowable to the taxpayer for the taxable year under section 32.”\nSubsec. ( l )(6).  Pub. L. 103–66, §\u202f13174(a)(1) , substituted “ December 31, 1993 ” for “ June 30, 1992 ”.\nSubsec. (m).  Pub. L. 103–66, §\u202f13211(a) , added subsec. (m). Former subsec. (m) redesignated (n).\nSubsec. (n).  Pub. L. 103–66, §\u202f13442(a) , added subsec. (n). Former subsec. (n) redesignated ( o ).\nPub. L. 103–66, §\u202f13211(a) , redesignated subsec. (m) as (n).\nSubsec. ( o ).  Pub. L. 103–66, §\u202f13442(a) , redesignated subsec. (n) as ( o ).\n1992—Subsec. (a).  Pub. L. 102–486  inserted at end “For purposes of paragraph (2), the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year.”\n1991—Subsec. ( l )(6).  Pub. L. 102–227  substituted “ June 30, 1992 ” for “ December 31, 1991 ”.\n1990—Subsec. ( l )(3).  Pub. L. 101–508, §\u202f11111(d)(2) , substituted heading for one which read: “Coordination with medical deduction” and amended text generally. Prior to amendment, text read as follows: “Any amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a).”\nSubsec. ( l )(6).  Pub. L. 101–508, §\u202f11410(a) , substituted “ December 31, 1991 ” for “ September 30, 1990 ”.\n1989—Subsec. (i).  Pub. L. 101–239, §\u202f6202(b)(3)(A) , struck out subsec. (i) which read as follows:\n“(1)  Coverage relating to end stage renal disease .—The expenses paid or incurred by an employer for a group health plan shall not be allowed as a deduction under this section if the plan differentiates in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner.\n“(2)  Group health plan .—For purposes of this subsection the term ‘group health plan’ means any plan of, or contributed to by, an employer to provide medical care (as defined in section 213(d) to his employees, former employees, or the families of such employees or former employees, directly or through insurance, reimbursement, or otherwise.”\nSubsec. (k)(2)(B)(iv).  Pub. L. 101–239, §\u202f7862(c)(3)(A) , amended cl. (iv) as it existed prior to repeal of subsec. (k) by  Pub. L. 100–647 , by substituting “entitlement” for “eligibility” in heading and inserting “which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary” after “or otherwise)” in subclause (I).\nSubsec. ( l )(2).  Pub. L. 101–140  redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “ Required coverage .—Paragraph (1) shall not apply to any taxpayer for any taxable year unless coverage is provided under 1 or more plans meeting the requirements of section 89, treating such coverage as an employer-provided benefit.”\nSubsec. ( l )(5).  Pub. L. 101–239, §\u202f7107(b) , added par. (5). Former par. (5) redesignated (6).\nPub. L. 101–239, §\u202f7107(a)(1) , substituted “ September 30, 1990 ” for “ December 31, 1989 ”.\nSubsec. ( l )(6).  Pub. L. 101–239, §\u202f7107(b) , redesignated former par. (5) as (6).\n1988—Subsec. (i)(2), (3).  Pub. L. 100–647, §\u202f3011(b)(2) , redesignated par. (3) as (2) and struck out former par. (2) which required plans to provide continuation coverage to certain individuals.\nSubsec. (k).  Pub. L. 100–647, §\u202f3011(b)(3) , redesignated subsec. ( l ), relating to stock redemption expenses, as (k) and struck out former subsec. (k) which related to continuation coverage requirements of group health plans.\nSubsec. (k)(5)(B).  Pub. L. 100–647, §\u202f1018(t)(7)(B) , made amendment identical to  Pub. L. 99–509, §\u202f9307(c)(2)(B) , which amended directory language of  Pub. L. 99–514, §\u202f1895(d)(5)(A) , by substituting “section 162(k)(5)” for “section 162(k)(2)”. See 1986 Amendment note below.\nSubsec . ( l ).  Pub. L. 100–647, §\u202f3011(b)(3)(A) , (B), redesignated subsec. (m), relating to special rules for health insurance costs of self-employed individuals, as ( l ). Former subsec. ( l ), relating to stock redemption expenses, redesignated (k).\nSubsec. (m).  Pub. L. 100–647, §\u202f3011(b)(3)(B) , (C), redesignated subsec. (n), relating to cross references, as (m). Former subsec. (m), relating to special rules for health insurance costs of self-employed individuals, redesignated ( l ).\nPub. L. 100–647, §\u202f1011B(b)(2) , redesignated subsec. (m), relating to cross references, as (n).\nSubsec. (m)(2)(A).  Pub. L. 100–647, §\u202f1011B(b)(3) , inserted “derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established” after “401(c))”.\nSubsec. (m)(4), (5).  Pub. L. 100–647, §\u202f1011B(b)(1) , added par. (4) and redesignated former par. (4) as (5).\nSubsec. (n).  Pub. L. 100–647, §\u202f3011(b)(3)(C) , redesignated subsec. (n) as (m).\nPub. L. 100–647, §\u202f1011B(b)(2) , redesignated subsec. (m), relating to cross references, as (n).\n1986—Subsec. (i)(1).  Pub. L. 99–272, §\u202f10001(d) , substituted “Coverage relating to end stage renal disease” for “General rule” in heading.\nSubsec. (i)(2), (3).  Pub. L. 99–272, §\u202f10001(a) , added par. (2) and redesignated former par. (2) as (3).\nSubsec. (k).  Pub. L. 99–272, §\u202f10001(c) , added subsec. (k). Former subsec. (k) redesignated ( l ).\nSubsec. (k)(2)(A).  Pub. L. 99–514, §\u202f1895(d)(1)(A) , inserted “If coverage under the plan is modified for any group of similarly situated beneficiaries, the coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this subsection in connection with such group.”\nSubsec. (k)(2)(B)(i).  Pub. L. 99–514, §\u202f1895(d)(2)(A) , substituted “Maximum required period” for “Maximum period” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of—\n“(I) a qualifying event described in paragraph (3)(B) (relating to terminations and reduced hours), the date which is 18 months after the date of the qualifying event, and\n“(II) any qualifying event not described in subclause (I), the date which is 36 months after the date of the qualifying event.”\nSubsec. (k)(2)(B)(i)(II).  Pub. L. 99–509, §\u202f9501(b)(1)(A)(i) , inserted “(other than a qualifying event described in paragraph (3)(F))”.\nSubsec. (k)(2)(B)(i)(III), (IV).  Pub. L. 99–509, §\u202f9501(b)(1)(A)(ii) –(iv), added subcl. (III), redesignated former subcl. (III) as (IV), and inserted “or (3)(F)”.\nSubsec. (k)(2)(B)(iii).  Pub. L. 99–514, §\u202f1895(d)(3)(A) , inserted “The payment of any premium (other than any payment referred to in the last sentence of subparagraph (C)) shall be considered to be timely if made within 30 days after the date due or within such longer period as applies to or under the plan.”\nSubsec. (k)(2)(B)(iv).  Pub. L. 99–514, §\u202f1895(d)(4)(A)(iii) , substituted “Group health plan coverage” for “Reemployment” in heading.\nSubsec. (k)(2)(B)(iv)(I).  Pub. L. 99–514, §\u202f1895(d)(4)(A)(ii) , substituted “covered under any other group health plan (as an employee or otherwise)” for “a covered employee under any other group health plan”.\nSubsec. (k)(2)(B)(iv)(II).  Pub. L. 99–509, §\u202f9501(b)(2)(A) , inserted “in the case of a qualified beneficiary other than a qualified beneficiary described in paragraph (7)(B)(iv),”.\nSubsec. (k)(2)(B)(v).  Pub. L. 99–514, §\u202f1895(d)(4)(A)(i) , struck out cl. (v), remarriage of spouse, which read as follows: “In the case of an individual who is a qualified beneficiary by reason of being the spouse of a covered employee, the date on which the beneficiary remarries and becomes covered under a group health plan.”\nSubsec. (k)(3).  Pub. L. 99–509, §\u202f9501(a)(1) , added subpar. (F) and concluding provisions.\nSubsec. (k)(5)(B).  Pub. L. 99–514, §\u202f1895(d)(5)(A) , as amended by  Pub. L. 99–509, §\u202f9307(c)(2)(B) , and  Pub. L. 100–647, §\u202f1018(t)(7)(B) , inserted “of continuation coverage” and “If there is a choice among types of coverage under the plan, each qualified beneficiary is entitled to make a separate selection among such types of coverage.” See 1988 Amendment note above.\nSubsec. (k)(6)(B).  Pub. L. 99–509, §\u202f9501(d)(1) , substituted “(D), or (F)” for “or (D)”.\nSubsec. (k)(6)(C).  Pub. L. 99–514, §\u202f1895(d)(6)(A) , inserted “within 60 days after the date of the qualifying event”.\nSubsec. (k)(6)(D)(i).  Pub. L. 99–509, §\u202f9501(d)(1) , substituted “(D), or (F)” for “or (D)”.\nSubsec. (k)(7)(B)(iii).  Pub. L. 99–514, §\u202f1895(d)(7) , added cl. (iii).\nSubsec. (k)(7)(B)(iv).  Pub. L. 99–509, §\u202f9501(c)(1) , added cl. (iv).\nSubsec. ( l ).  Pub. L. 99–514, §\u202f613(a) , added subsec. ( l ). Former subsec. ( l ) redesignated (m).\nPub. L. 99–272, §\u202f10001(c) , redesignated former subsec. (k), relating to cross references, as ( l ).\nSubsec. (m).  Pub. L. 99–514, §\u202f1161(a) , added subsec. (m) relating to special rules for health insurance costs of self-employed individuals, and further directed that this section be amended “by redesignating subsection (n) as subsection (m)”, which directory language could not be executed because this section does not contain a subsec. (n).\nPub. L. 99–514, §\u202f613(a) , redesignated subsec. ( l ), relating to cross references, as (m).\n1984—Subsec. (i)(2).  Pub. L. 98–369, §\u202f2354(d) , substituted “section 213(d)” for “section 213(e)”.\nSubsec. (j).  Pub. L. 98–573  added subsec. (j). Former subsec. (j) redesignated (k).\nSubsec. (j)(3).  Pub. L. 98–369, §\u202f512(b) , added par. (3).\nSubsec. (k).  Pub. L. 98–573  redesignated former subsec. (j) as (k).\n1982—Subsec. (a).  Pub. L. 97–216  inserted provisions under which amounts expended by Members of Congress within each taxable year for living expenses shall not be deductible for income tax purposes in excess of $3,000.\nSubsec. (c)(1).  Pub. L. 97–248, §\u202f288(a) , substituted “is unlawful under the Foreign Corrupt Practices Act of 1977” for “would be unlawful under the laws of the United States if such laws were applicable to such payment and to such official or employee” after “government, the payment”, and “(or is unlawful under the Foreign Corrupt Practices Act of 1977)” for “(or would be unlawful under the laws of the United States)” before “shall be upon the Secretary”.\nSubsec. (h).  Pub. L. 97–248, §\u202f128(b)(2) , redesignated subsec. (i), relating to State legislators’ travel expenses away from home, as (h). Former subsec. (h), relating to group health plans, redesignated (i).\nSubsec. (i).  Pub. L. 97–248, §\u202f128(b)(2) , redesignated former subsec. (h), relating to group health plans, as (i). Former subsec. (i), relating to State legislators’ travel expenses away from home, redesignated (h). Former subsec. (i), relating to cross references, redesignated (j).\nSubsec. (j).  Pub. L. 97–248, §\u202f128(b)(1) , redesignated former subsec. (i), relating to cross references, as (j).\n1981—Subsec. (a). Pub L. 97–51 struck out provisions under which amounts expended by Members of Congress within each taxable year for living expenses could not be deductible for income tax purposes in excess of $3,000.\nSubsec. (h).  Pub. L. 97–35  added subsec. (h) relating to group health plans. Former subsec. (h), as added by  Pub. L. 97–34  and relating to State legislators’ travel expenses away from home, redesignated (i). See 1982 Amendment note above.\nPub. L. 97–34  added subsec. (h) relating to State legislators’ travel expenses away from home. Former subsec. (h), relating to cross references, redesignated (i). See 1982 Amendment note above.\nSubsec. (i).  Pub. L. 97–35  redesignated former subsec. (h), as added by  Pub. L. 97–34  and relating to State legislators’ travel expenses away from home, as (i). See 1982 Amendment note above.\nPub. L. 97–34  redesignated former subsec. (h), relating to cross references, as (i). See 1982 Amendment note above.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(c)(4) , struck out reference to Territory in provisions following par. (3).\nSubsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out in pars. (1) and (2) “or his delegate” after “Secretary”.\n1971—Subsec. (c).  Pub. L. 92–178, §\u202f310(a)(2) , substituted “Illegal bribes, kickbacks, and other payments” for “Bribes and illegal kickbacks” in heading.\nSubsec. (c)(2).  Pub. L. 92–178, §\u202f310(a)(1) , substituted provisions respecting “Other illegal payments” for former provisions on “Other bribes or kickbacks” reading “If in a criminal proceeding a taxpayer is convicted of making a payment (other than a payment described in paragraph (1) which is an illegal bribe or kickback, or his plea of guilty or nolo contendere to an indictment or information charging the making of such a payment is entered or accepted in such a proceeding, no deduction shall be allowed under subsection (a) on account of such payment or any related payment made prior to the date of the final judgment in such proceeding.”\nSubsec. (c)(3).  Pub. L. 92–178, §\u202f310(a)(1) , substituted provisions respecting kickbacks, rebates, and bribes under medicare and medicaid for former statute of limitations provisions.\n1969—Subsec. (c).  Pub. L. 91–172, §\u202f902(b) , designated existing provisions as par. (1), extended the applicability of nondeductible expenses for payments to any official or employee of any government, or of any agency or instrumentality of any government, and added pars. (2) and (3).\nSubsecs. (f), (g).  Pub. L. 91–172, §\u202f902(a) , added subsecs. (f) and (g). Former subsec. (f) redesignated (h).\nSubsec. (h).  Pub. L. 91–172 , §§\u202f516(c)(2)(A), 902(a), redesignated former subsec. (f) as (h), substituted “(1) For” for “For”, and inserted reference to section 1253 for special rule relating to the treatment of payments by a transferee of a franchise, trademark, or trade name.\n1962—Subsec. (a)(2).  Pub. L. 87–834, §\u202f4(b) , substituted “(including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances)” for “including the entire amount expended for meals and lodging)”.\nSubsecs. (e), (f).  Pub. L. 87–834, §\u202f3(a) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1960—Subsec. (b).  Pub. L. 86–779, §\u202f7(b) , inserted “the dollar limitations,” after “the percentage limitations,”.\nSubsecs. (d), (e).  Pub. L. 86–779, §\u202f8(a) , added subsec. (d) and redesignated former subsec. (d) as (e).\n1958—Subsecs. (c), (d).  Pub. L. 85–866, §\u202f5(a) , added subsec. (c) and redesignated former subsec. (c) as (d).\nAmendment by  section 11002(d)(6) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f13306(a)(2) ,  Dec. 22, 2017 ,  131 Stat. 2127 , provided that:  “The amendment made by this subsection [amending this section] shall apply to amounts paid or incurred on or after the date of the enactment of this Act [ Dec. 22, 2017 ], except that such amendments shall not apply to amounts paid or incurred under any binding order or agreement entered into before such date. Such exception shall not apply to an order or agreement requiring court approval unless the approval was obtained before such date.”\nPub. L. 115–97, title I, §\u202f13307(b) ,  Dec. 22, 2017 ,  131 Stat. 2129 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or incurred after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nPub. L. 115–97, title I, §\u202f13308(c) ,  Dec. 22, 2017 ,  131 Stat. 2129 , provided that:  “The amendments made by this section [amending this section and  section 6033 of this title ] shall apply to amounts paid or incurred on or after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nPub. L. 115–97, title I, §\u202f13311(b) ,  Dec. 22, 2017 ,  131 Stat. 2132 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nPub. L. 115–97, title I, §\u202f13531(b) ,  Dec. 22, 2017 ,  131 Stat. 2154 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13601(e) ,  Dec. 22, 2017 ,  131 Stat. 2156 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Exception for binding contracts .— The amendments made by this section shall not apply to remuneration which is provided pursuant to a written binding contract which was in effect on  November 2, 2017 , and which was not modified in any material respect on or after such date.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 112–10  effective as if included in the provisions of, and the amendments made by, the provisions of  Pub. L. 111–148  to which it relates, see  section 1858(d) of Pub. L. 112–10 , set out as a note under  section 36B of this title .\nPub. L. 111–240, title II, §\u202f2042(b) ,  Sept. 27, 2010 ,  124 Stat. 2560 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 111–148, title IX, §\u202f9014(b) ,  Mar. 23, 2010 ,  124 Stat. 870 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 , with respect to services performed after such date.”\nPub. L. 111–148, title X, §\u202f10108(g)(2) ,  Mar. 23, 2010 ,  124 Stat. 914 , provided that:  “The amendments made by this subsection [amending this section] shall apply to vouchers provided after  December 31, 2013 .”\nPub. L. 110–343, div. A, title III, §\u202f302(c)(1) ,  Oct. 3, 2008 ,  122 Stat. 3806 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending on or after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 108–357, title III, §\u202f318(c) ,  Oct. 22, 2004 ,  118 Stat. 1470 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nAmendment by  section 802(b)(2) of Pub. L. 108–357  effective  Mar. 4, 2003 , see  section 802(d) of Pub. L. 108–357 , set out as an Effective Date note under  section 4985 of this title .\nAmendment by  Pub. L. 108–121  applicable to amounts paid or incurred in taxable years beginning after  Dec. 31, 2002 , see  section 109(c) of Pub. L. 108–121 , set out as a note under  section 62 of this title .\nPub. L. 105–277, div. J, title II, §\u202f2002(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–901 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1998 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title IX, §\u202f934(b) ,  Aug. 5, 1997 ,  111 Stat. 882 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 105–34, title XII, §\u202f1203(c) ,  Aug. 5, 1997 ,  111 Stat. 995 , provided that:  “The amendments made by this section [amending this section and repealing provisions set out as a note below] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title XII, §\u202f1204(b) ,  Aug. 5, 1997 ,  111 Stat. 995 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts paid or incurred with respect to taxable years ending after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 1602(c) of Pub. L. 105–34  effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996,  Pub. L. 104–191 , to which such amendment relates, see  section 1602(i) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nAmendment by  section 311(a) of Pub. L. 104–191  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 311(c) of Pub. L. 104–191 , set out as a note under  section 104 of this title .\nPub. L. 104–191, title III, §\u202f322(c) ,  Aug. 21, 1996 ,  110 Stat. 2062 , provided that:  “The amendments made by this section [amending this section and  section 213 of this title ] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1704(p)(4) ,  Aug. 20, 1996 ,  110 Stat. 1886 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this subsection [amending this section] shall apply to amounts paid or incurred after  September 13, 1995 , in taxable years ending after such date. \n \n “(B)   Paragraph (2) .— The amendment made by paragraph (2) [amending this section] shall take effect as if included in the amendment made by section 613 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nPub. L. 104–7, §\u202f1(c) ,  Apr. 11, 1995 ,  109 Stat. 93 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1993 . \n \n “(2)   Increase .— The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1994 .”\nAmendment by  section 13131(d)(2) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1993 , see  section 13131(e) of Pub. L. 103–66 , set out as a note under  section 32 of this title .\nPub. L. 103–66, title XIII, §\u202f13174(a)(3) ,  Aug. 10, 1993 ,  107 Stat. 457 , provided that:  “The amendments made by this subsection [amending this section and repealing provisions set out below] shall apply to taxable years ending after  June 30, 1992 .”\nPub. L. 103–66, title XIII, §\u202f13174(b)(2) ,  Aug. 10, 1993 ,  107 Stat. 457 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1992 .”\nPub. L. 103–66, title XIII, §\u202f13211(b) ,  Aug. 10, 1993 ,  107 Stat. 471 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts which would otherwise be deductible for taxable years beginning on or after  January 1, 1994 .”\nPub. L. 103–66, title XIII, §\u202f13222(e) ,  Aug. 10, 1993 ,  107 Stat. 481 , provided that:  “The amendments made by this section [amending this section and sections 170, 6033, and 7871 of this title] shall apply to amounts paid or incurred after  December 31, 1993 .”\nPub. L. 103–66, title XIII, §\u202f13442(b) ,  Aug. 10, 1993 ,  107 Stat. 568 , as amended by  Pub. L. 104–7, §\u202f5 ,  Apr. 11, 1995 ,  109 Stat. 96 , provided that:  “The provisions of this section [amending this section] shall apply to services provided after  February 2, 1993 , and on or before  December 31, 1995 .”\nPub. L. 102–486, title XIX, §\u202f1938(b) ,  Oct. 24, 1992 ,  106 Stat. 3033 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to costs paid or incurred after  December 31, 1992 .”\nPub. L. 102–227, title I, §\u202f110(b) ,  Dec. 11, 1991 ,  105 Stat. 1688 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1991 .”\nAmendment by  section 11111(d)(2) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11111(f) of Pub. L. 101–508 , set out as a note under  section 32 of this title .\nPub. L. 101–508, title XI, §\u202f11410(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–479 , provided that:  “The amendments made by this section [amending this section and repealing provisions set out below] shall apply to taxable years beginning after  December 31, 1989 .”\nPub. L. 101–239, title VI, §\u202f6202(b)(5) ,  Dec. 19, 1989 ,  103 Stat. 2233 , provided that:  “The amendments made by this subsection [amending this section, sections 4980B and 5000 of this title, sections 623 and 631 of Title 29, Labor, and sections 1395p, 1395r, and 1395y of Title 42, The Public Health and Welfare] shall apply to items and services furnished after the date of the enactment of this Act [ Dec. 19, 1989 ].”\nPub. L. 101–239, title VII, §\u202f7107(c) ,  Dec. 19, 1989 ,  103 Stat. 2306 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1989 .”\nPub. L. 101–239, title VII, §\u202f7862(c)(3)(D) ,  Dec. 19, 1989 ,  103 Stat. 2432 , provided that:  \n “The amendments made by this paragraph [amending this section,  section 4980B of this title , and  section 1162 of Title 29 , Labor] shall apply to— \n “(i)  qualifying events occurring after  December 31, 1989 , and \n \n “(ii)  in the case of qualified beneficiaries who elected continuation coverage after  December 31, 1988 , the period for which the required premium was paid (or was attempted to be paid but was rejected as such).”\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by sections 1011B(b)(1)–(3) and 1018(t)(7)(B) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title III, §\u202f3011(d) ,  Nov. 10, 1988 ,  102 Stat. 3625 , provided that:  “The amendments made by this section [enacting  section 4980B of this title , and amending this section, sections 106 and 414 of this title,  section 1167 of Title 29 , Labor, and  section 300bb–8 of Title 42 , The Public Health and Welfare] shall apply to taxable years beginning after  December 31, 1988 , but shall not apply to any plan for any plan year to which section 162(k) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [ Nov. 10, 1988 ]) did not apply by reason of section 10001(e)(2) of the Consolidated Omnibus Budget Reconciliation Act of 1985 [ section 10001(e)(2) of Pub. L. 99–272 , set out as an Effective Date of 1986 Amendment note under  section 106 of this title ].”\nPub. L. 99–514, title VI, §\u202f613(b) ,  Oct. 22, 1986 ,  100 Stat. 2251 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to any amount paid or incurred after  February 28, 1986 , in taxable years ending after such date.”\nPub. L. 99–514, title XI, §\u202f1161(b) ,  Oct. 22, 1986 ,  100 Stat. 2509 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Transitional rule .— In the case of any year to which section 89 of the Internal Revenue Code of 1986 does not apply, [former] section 162(m)(2)(B) of such Code shall be applied by substituting any nondiscrimination requirements otherwise applicable for the requirements of section 89 of such Code. \n \n “(3)   Assistance .— The Secretary of the Treasury or his delegate shall provide guidance to self-employed individuals to assist them in meeting the requirements of section 89 of the Internal Revenue Code of 1986 with respect to coverage required by the amendments made by this section [amending this section].”\nPub. L. 99–514, title XVIII, §\u202f1895(d)(6)(D) ,  Oct. 22, 1986 ,  100 Stat. 2939 , provided that:  “The amendments made by this paragraph [amending this section,  section 1166 of Title 29 , Labor, and  section 300bb–6 of Title 42 , The Public Health and Welfare] shall only apply with respect to qualifying events occurring after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XVIII, §\u202f1895(e) ,  Oct. 22, 1986 ,  100 Stat. 2940 , provided that:  “Except as otherwise provided in this section, the amendments made by this section [amending this section,  section 3121 of this title , sections 1162 and 1165 to 1167 of Title 29, Labor, sections 300bb–2, 300bb–5, 300bb–6, 410, 1301, 1320c–13, 1395p, 1395u, 1395cc, 1395dd, 1395mm, 1395ww, 1395yy, 1396a, 1396b, 1396d, and 1396s of Title 42, The Public Health and Welfare, enacting provisions set out as notes under this section,  section 3121 of this title ,  section 1167 of Title 29 , and sections 1395u, 1395y, 1395ww, and 1395yy of Title 42, and amending provisions set out as notes under sections 403, 1395u, 1395cc, 1395mm, 1395ww, 1395yy, and 1396b of Title 42] shall be effective as if included in the enactment of the Consolidated Omnibus Budget Reconciliation Act of 1985 [ Pub. L. 99–272 ].”\nAmendment by  section 9307(c)(2)(B) of Pub. L. 99–509  effective as if included in the enactment of Tax Reform Act of 1986,  Pub. L. 99–514 , see  section 9307(c)(2) of Pub. L. 99–509 , set out as a note under  section 1395u of Title 42 , The Public Health and Welfare.\nPub. L. 99–509, title IX, §\u202f9501(e) ,  Oct. 21, 1986 ,  100 Stat. 2078 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 1162, 1163, 1166, and 1167 of Title 29, Labor] shall take effect as if included in title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 [sections 10001 to 10003 of  Pub. L. 99–272 ]. \n \n “(2)   Treatment of certain bankruptcy proceedings .— Notwithstanding paragraph (1), section 10001(e) of the Consolidated Omnibus Budget Reconciliation Act of 1985 [set out as a note under  section 106 of this title ], and section 10002(d) of such Act [set out as a note under  section 1161 of Title 29 ], the amendments made by this section [amending this section and sections 1162, 1163, 1166, and 1167 of Title 29] and by sections 10001 and 10002 of such Act [enacting sections 1161 to 1168 of Title 29, amending this section,  section 106 of this title , and  section 1132 of Title 29 , and enacting provisions set out as notes under  section 106 of this title  and sections 1161 and 1166 of Title 29] shall apply in the case of plan years ending during the 12-month period beginning  July 1, 1986 , but only with respect to— “(A)  a qualifying event described in section 162(k)(3)(F) of the Internal Revenue Code of 1986 or section 603(6) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1163(6) ], and \n \n “(B)  a qualifying event described in section 162(k)(3)(A) of the Internal Revenue Code of 1986 or section 603(1) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1163(1) ] relating to the death of a retired employee occurring after the date of the qualifying event described in subparagraph (A). \n \n \n “(3)   Treatment of current retirees .— Section 162(k)(3)(F) of the Internal Revenue Code of 1986 and section 603(6) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1163(6) ] apply to covered employees who retired before, on, or after the date of the enactment of this Act [ Oct. 21, 1986 ]. \n \n “(4)   Notice .— In the case of a qualifying event described in section 603(6) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1163(6) ] that occurred before the date of the enactment of this Act [ Oct. 21, 1986 ], the notice required under section 606(2) of such Act [ 29 U.S.C. 1166(2) ] (and under section 162(k)(6)(B) of the Internal Revenue Code of 1986) with respect to such event shall be provided no later than 30 days after the date of the enactment of this Act [ Oct. 21, 1986 ].”\nAmendment by  Pub. L. 99–272  applicable to plan years beginning on or after  July 1, 1986 , with special rule for collective bargaining agreements, see  section 10001(e) of Pub. L. 99–272 , set out as a note under  section 106 of this title .\nPub. L. 98–573, title II, §\u202f232(b) ,  Oct. 30, 1984 ,  98 Stat. 2991 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 30, 1984 ].”\nAmendment by  section 512(b) of Pub. L. 98–369  applicable to amounts paid or incurred after  July 18, 1984 , in taxable years ending after such date, subject to an exception for certain extended vacation pay plans, see  section 512(c) of Pub. L. 98–369 , set out as a note under  section 404 of this title .\nAmendment by  section 2354(d) of Pub. L. 98–369  effective  July 18, 1984 , but not to be construed as changing or affecting any right, liability, status, or interpretation which existed (under the provisions of law involved) before that date, see  section 2354(e) of Pub. L. 98–369 , set out as a note under  section 1320a–1 of Title 42 , The Public Health and Welfare.\nPub. L. 97–248, title II, §\u202f288(c) ,  Sept. 3, 1982 ,  96 Stat. 571 , provided that:  “The amendments made by this section [amending this section and sections 952 and 964 of this title] shall apply to payments made after the date of the enactment of this Act [ Sept. 3, 1982 ].”\nAmendment by  section 128(b) of Pub. L. 97–248  effective as if such amendment had been originally included as part of this section as this section was amended by the Omnibus Budget Reconciliation Act of 1981,  Pub. L. 97–35 , see  section 128(e)(2) of Pub. L. 97–248 , set out as a note under  section 1395x of Title 42 , The Public Health and Welfare.\nPub. L. 97–216, title II, §\u202f215(d) ,  July 18, 1982 ,  96 Stat. 194 , provided that:  “The amendments made by this section [amending this section and  section 280A of this title  and repealing provisions set out as a note under this section] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 97–51, §\u202f139(b)(3) ,  Oct. 1, 1981 ,  95 Stat. 967 , as amended by  Pub. L. 97–92, §\u202f133a ,  Dec. 15, 1981 ,  95 Stat. 1199 , provided that:  “The amendments made by this subsection [amending this section and repealing  section 31c of Title 2 , The Congress] shall apply to taxable years beginning after  December 31, 1980 .”\nPub. L. 97–35, title XXI, §\u202f2146(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 801 , provided that:  “The amendments made by subsection (b) [amending this section] shall be effective with respect to taxable years beginning on or after  January 1, 1982 .”\nPub. L. 97–34, title I, §\u202f127(b) ,  Aug. 13, 1981 ,  95 Stat. 203 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning on or after  January 1, 1976 .”\nAmendment by  section 1901(c)(4) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–178, title III, §\u202f310(b) ,  Dec. 10, 1971 ,  85 Stat. 525 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to payments after  December 30, 1969 , except that section 162(c)(3) of the Internal Revenue Act of 1954 (as added by subsection (a)) shall apply only with respect to kickbacks, rebates, and bribes payment of which is made on or after the date of the enactment of this Act [ Dec. 10, 1971 ].”\nPub. L. 91–172, title IX, §\u202f902(c) ,  Dec. 30, 1969 ,  83 Stat. 711 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Section 162(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall apply to all taxable years to which such Code applies. Section 162(g) of such Code (as added by subsection (a)) shall apply with respect to amounts paid or incurred after  December 31, 1969 . Section 162(c)(1) of such Code (as amended by subsection (b)) shall apply to all taxable years to which such Code applies. Sections 162(c)(2) and (3) of such Code (as amended by subsection (b)) shall apply with respect to payments made after the date of the enactment of this Act [ Dec. 30, 1969 ].”\nAmendment by  section 516(c)(2)(A) of Pub. L. 91–172  applicable to transfers after  Dec. 31, 1969 , see  section 516(d)(3) of Pub. L. 91–172 , set out as a note under  section 1001 of this title .\nPub. L. 87–834, §\u202f4(c) ,  Oct. 16, 1962 ,  76 Stat. 977 , provided that:  “The amendments made by this section [amending this section and enacting  section 274 of this title ] shall apply with respect to taxable years ending after  December 31, 1962 , but only in respect of periods after such date.”\nPub. L. 87–834, §\u202f3(b) ,  Oct. 16, 1962 ,  76 Stat. 973 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1962 .”\nPub. L. 86–779, §\u202f7(c) ,  Sept. 14, 1960 ,  74 Stat. 1002 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 170 of this title ] shall apply with respect to taxable years beginning after  December 31, 1959 .”\nPub. L. 86–779, §\u202f8(d) ,  Sept. 14, 1960 ,  74 Stat. 1003 , provided that:  “The amendments made by subsections (a), (b), and (c) [amending this section and  section 1054 of this title  and amending table of sections for Part IV by adding item 1054 and numbering former item 1054 as 1055] shall apply with respect to taxable years beginning after  December 31, 1959 .”\nPub. L. 85–866, title I, §\u202f5(b) ,  Sept. 2, 1958 ,  72 Stat. 1608 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply only with respect to expenses paid or incurred after the date of the enactment of this Act [ Sept. 2, 1958 ]. The determination as to whether any expense paid or incurred on or before the date of the enactment of this Act shall be allowed as a deduction shall be made as if this section had not been enacted and without inference drawn from the fact that this section is not made applicable with respect to expenses paid or incurred on or before the date of the enactment of this Act.”\nPub. L. 104–208, div. A, title II, §\u202f2711 ,  Sept. 30, 1996 ,  110 Stat. 3009–498 , provided that, for purposes of subtitle A of this title, the amount allowed as a deduction under this section for a taxable year would include any amount paid during that year by reason of an assessment under  section 2702 of Pub. L. 104–208 , formerly set out as a note under  section 1817 of Title 12 , Banks and Banking, and that former  section 172(f) of this title  would not apply to that deduction.\nPub. L. 102–227, title I, §\u202f110(a)(2) ,  Dec. 11, 1991 ,  105 Stat. 1688 , provided that, in the case of any taxable year beginning in 1992 only amounts paid before  July 1, 1992 , by the individual for insurance coverage for periods before  July 1, 1992 , would be taken into account in determining the amount deductible under subsec. ( l ) of this section with respect to such individual for such taxable year, and that for purposes of subparagraph (A) of subsec. ( l )(2) of this section, the amount of the earned income described in such subparagraph taken into account for such taxable year would be the amount which bears the same ratio to the total amount of such earned income as the number of months in such taxable year ending before  July 1, 1992 , bears to the number of months in such taxable year, prior to repeal by  Pub. L. 103–66, title XIII, §\u202f13174(a)(2) ,  Aug. 10, 1993 ,  107 Stat. 457 .\nPub. L. 101–239, title VII, §\u202f7107(a)(2) ,  Dec. 19, 1989 ,  103 Stat. 2306 , provided that, in the case of any taxable year beginning in 1990 only amounts paid before  Oct. 1, 1990 , by the individual for insurance coverage for periods before  Oct. 1, 1990 , would be taken into account in determining the amount deductible under subsec. ( l ) of this section with respect to such individual for such taxable year, and that for purposes of subsec. ( l )(2)(A) of this section, the amount of the earned income described in such paragraph taken into account for such taxable year would be the amount which bears the same ratio to the total amount of such earned income as the number of months in such taxable year ending before  Oct. 1, 1990 , bears to the number of months in such taxable year, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11410(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–479 .\nPub. L. 100–647, title VI, §\u202f6008 ,  Nov. 10, 1988 ,  102 Stat. 3687 , provided that in the case of any employee of the United States Postal Service who performed services involving the collection and delivery of mail on a rural route, such employee was permitted to compute the amount allowable as a deduction under this chapter for the use of an automobile in performing such services by using a standard mileage rate for all miles of such use equal to 150 percent of the basic standard rate, prior to repeal by  Pub. L. 105–34, title XII, §\u202f1203(b) ,  Aug. 5, 1997 ,  111 Stat. 995 . See subsec. ( o ) of this section.\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 97–51, §\u202f139(a) ,  Oct. 1, 1981 ,  95 Stat. 967 , which expressed the sense of Congress that the dollar limits on tax deductions for living expenses of Members of Congress while away from home be the same as such limits for businessmen and other private citizens, was repealed by  Pub. L. 97–216, title II, §\u202f215(c) ,  July 18, 1982 ,  96 Stat. 194 .\nPub. L. 94–455, title VI, §\u202f604 ,  Oct. 4, 1976 ,  90 Stat. 1575 , as amended by  Pub. L. 95–30, title III, §\u202f307 ,  May 23, 1977 ,  91 Stat. 153 ;  Pub. L. 95–258, §\u202f2 ,  Apr. 7, 1978 ,  92 Stat. 195 ;  Pub. L. 96–167, §\u202f3 ,  Dec. 29, 1979 ,  93 Stat. 1275 ;  Pub. L. 96–178, §\u202f1 ,  Jan. 2, 1980 ,  93 Stat. 1295 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  In  General .— For purposes of section 162(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], in the case of any individual who was a State legislator at any time during any taxable year beginning before  January 1, 1981 , and who, for the taxable year, elects the application of this section, for any period during such a taxable year in which he was a State legislator— “(1)  the place of residence of such individual within the legislative district which he represented shall be considered his home, and \n \n “(2)  he shall be deemed to have expended for living expenses (in connection with his trade or business as a legislator) an amount equal to the sum of the amounts determined by multiplying each legislative day of such individual during the taxable year by the amount generally allowable with respect to such day to employees of the executive branch of the Federal Government for per diem while away from home but serving in the United States. \n \n \n “(b)   Legislative Days .— For purposes of subsection (a), a legislative day during any taxable year for any individual shall be any day during such year on which (1) the legislature was in session (including any day in which the legislature was not in session for a period of 4 consecutive days or less), or (2) the legislature was not in session but the physical presence of the individual was formally recorded at a meeting of a committee of such legislature. \n \n “(c)   Limitation .— The amount taken into account as living expenses attributable to a trade or business as a State legislator for any taxable year beginning before  January 1, 1976 , under an election made under this section shall not exceed the amount claimed for such purpose under a return (or amended return) filed before  May 21, 1976 . \n \n “(d)   Making and Effect of Election .— An election under this section shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe.”\n[Amendment of  section 604 of Pub. L. 94–455  by  section 1 of Pub. L. 96–178 , which purported to substitute “ January 1, 1979 ” for “ January 1, 1978 ”, was not executed because of the prior amendment by section 3(a)(2), (b) of  Pub. L. 96–167  which substituted “ January 1, 1981 ” for “ January 1, 1978 ” in subsec. (a) and which struck out the last sentence of subsec. (d).]\nNo deductions to be allowed in computing taxable income for two-thirds of any amount paid or incurred on a judgment entered against any person in a suit brought under  section 208(b) of Pub. L. 94–12 , see  section 208(c) of Pub. L. 94–12 , title II,  Mar. 29, 1975 ,  89 Stat. 35 , set out as a note under  section 44 of this title .\nPub. L. 85–866, title I, §\u202f97 ,  Sept. 2, 1958 ,  72 Stat. 1672 , as amended by  Pub. L. 86–496, §\u202f2 ,  June 8, 1960 ,  74 Stat. 164 ;  Pub. L. 88–153 ,  Oct. 17, 1963 ,  77 Stat. 272 ;  Pub. L. 88–554, §\u202f1 ,  Aug. 31, 1964 ,  78 Stat. 761 ;  Pub. L. 89–692 ,  Oct. 15, 1966 ,  80 Stat. 1025 ;  Pub. L. 91–172, title IX, §\u202f903 ,  Dec. 30, 1969 ,  83 Stat. 711 ;  Pub. L. 92–580, §\u202f3 ,  Oct. 27, 1972 ,  86 Stat. 1276 , provided that deductions for accrued vacation pay under this section would not be denied for any taxable year ending before  Jan. 1, 1973 , so long as the employee at the time of accrual of pay has performed the necessary qualifying service under an appropriate plan.\nPub. L. 86–564, title III, §\u202f301 ,  June 30, 1960 ,  74 Stat. 291 , authorized the Joint Committee on Internal Revenue Taxation to investigate and report on the use of entertainment and certain other expense deductions to the 87th Congress and authorized the Secretary of the Treasury to report to the 87th Congress on the enforcement program of the Internal Revenue Service relating to such deductions.\nExtension of time for filing of claims for refunds or credit of overpayments of income tax resulting from application of this section, see  section 96 of Pub. L. 85–866 , set out as a note under  section 6511 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There shall be allowed as a deduction all interest paid or accrued within the taxable year on indebtedness.\nIn the case of any contract to which paragraph (1) applies, the amount treated as interest for any taxable year shall not exceed the aggregate carrying charges which are properly attributable to such taxable year.\nFor purposes of this subtitle, any annual or periodic rental under a redeemable ground rent (excluding amounts in redemption thereof) shall be treated as interest on an indebtedness secured by a mortgage.\nIn the case of a taxpayer other than a corporation, the amount allowed as a deduction under this chapter for investment interest for any taxable year shall not exceed the net investment income of the taxpayer for the taxable year.\nThe amount not allowed as a deduction for any taxable year by reason of paragraph (1) shall be treated as investment interest paid or accrued by the taxpayer in the succeeding taxable year.\nThe term “investment interest” means any interest allowable as a deduction under this chapter (determined without regard to paragraph (1)) which is paid or accrued on indebtedness properly allocable to property held for investment.\nFor purposes of this paragraph, the term “interest” includes any amount allowable as a deduction in connection with personal property used in a short sale.\nThe term “investment expenses” means the deductions allowed under this chapter (other than for interest) which are directly connected with the production of investment income.\nInvestment income and investment expenses shall not include any income or expenses taken into account under section 469 in computing income or loss from a passive activity.\nIn the case of property described in subparagraph (A)(i), expenses shall be allocated to such property in the same manner as under section 469.\nFor purposes of this paragraph, the terms “activity”, “passive activity”, and “materially participate” have the meanings given such terms by section 469.\nThe portion of the original issue discount with respect to any debt instrument which is allowable as a deduction to the issuer for any taxable year shall be equal to the aggregate daily portions of the original issue discount for days during such taxable year.\nThe term “debt instrument” has the meaning given such term by section 1275(a)(1).\nThe daily portion of the original issue discount for any day shall be determined under section 1272(a) (without regard to paragraph (7) thereof and without regard to section 1273(a)(3)).\nIn the case of an obligor of a short-term obligation (as defined in section 1283(a)(1)(A)) who uses the cash receipts and disbursements method of accounting, the original issue discount (and any other interest payable) on such obligation shall be deductible only when paid.\nIf any debt instrument having original issue discount is held by a related foreign person, any portion of such original issue discount shall not be allowable as a deduction to the issuer until paid. The preceding sentence shall not apply to the extent that the original issue discount is effectively connected with the conduct by such foreign related person of a trade or business within the United States unless such original issue discount is exempt from taxation (or is subject to a reduced rate of tax) pursuant to a treaty obligation of the United States.\nIn the case of any debt instrument having original issue discount which is held by a related foreign person which is a controlled foreign corporation (as defined in section 957) or a passive foreign investment company (as defined in section 1297), a deduction shall be allowable to the issuer with respect to such original issue discount for any taxable year before the taxable year in which paid only to the extent such original issue discount is includible (determined without regard to properly allocable deductions and qualified deficits under section 952(c)(1)(B)) during such prior taxable year in the gross income of a United States person who owns (within the meaning of section 958(a)) stock in such corporation.\nThe Secretary may by regulation exempt transactions from the application of clause (i), including any transaction which is entered into by a payor in the ordinary course of a trade or business in which the payor is predominantly engaged.\nThis subsection shall not apply to any debt instrument described in section 1272(a)(2)(D) (relating to loans between natural persons).\nSolely for purposes of sections 243, 245, 246, and 246A, the dividend equivalent portion of any amount includible in gross income of a corporation under section 1272(a) in respect of an applicable high yield discount obligation shall be treated as a dividend received by such corporation from the corporation issuing such obligation.\nFor purposes of clause (i), the term “disqualified yield” means the excess of the yield to maturity on the obligation over the sum referred to in subsection (i)(1)(B) plus 1 percentage point, and the term “total return” is the amount which would have been the original issue discount on the obligation if interest described in the parenthetical in section 1273(a)(2) were included in the stated redemption price at maturity.\nThis paragraph shall not apply to any obligation issued by any corporation for any period for which such corporation is an S corporation.\nThis paragraph shall not apply for purposes of determining earnings and profits; except that, for purposes of determining the dividend equivalent portion of any amount includible in gross income under section 1272(a) in respect of an applicable high yield discount obligation, no reduction shall be made for any amount attributable to the disqualified portion of any original issue discount on such obligation.\nThis paragraph shall not apply to any applicable high yield discount obligation issued during the period beginning on  September 1, 2008 , and ending on  December 31, 2009 , in exchange (including an exchange resulting from a modification of the debt instrument) for an obligation which is not an applicable high yield discount obligation and the issuer (or obligor) of which is the same as the issuer (or obligor) of such applicable high yield discount obligation. The preceding sentence shall not apply to any obligation the interest on which is interest described in section 871(h)(4) (without regard to subparagraph (D) thereof) or to any obligation issued to a related person (within the meaning of section 108(e)(4)).\nAny obligation to which clause (i) applies shall not be treated as an applicable high yield discount obligation for purposes of applying this subparagraph to any other obligation issued in exchange for such obligation.\nThe Secretary may apply this paragraph with respect to debt instruments issued in periods following the period described in clause (i) if the Secretary determines that such application is appropriate in light of distressed conditions in the debt capital markets.\nFor definition of applicable high yield discount obligation, see subsection (i).\nFor provision relating to deduction of original issue discount on tax-exempt obligation, see section 1288.\nFor special rules in the case of the borrower under certain loans for personal use, see section 1275(b).\nNothing in subsection (a) or in any other provision of law shall be construed to provide a deduction for interest on any registration-required obligation unless such obligation is in registered form.\nFor purposes of this subsection, rules similar to the rules of section 149(a)(3) shall apply, except that a dematerialized book entry system or other book entry system specified by the Secretary shall be treated as a book entry system described in such section.\nThe amount of the deduction under this section for interest paid or accrued during any taxable year on indebtedness with respect to which a mortgage credit certificate has been issued under section 25 shall be reduced by the amount of the credit allowable with respect to such interest under section 25 (determined without regard to section 26).\nIn the case of a taxpayer other than a corporation, no deduction shall be allowed under this chapter for personal interest paid or accrued during the taxable year.\nThe aggregate amount treated as acquisition indebtedness for any period shall not exceed $1,000,000 ($500,000 in the case of a married individual filing a separate return).\nThe aggregate amount treated as home equity indebtedness for any period shall not exceed $100,000 ($50,000 in the case of a separate return by a married individual).\nThe limitation of subparagraph (B)(ii) shall be reduced (but not below zero) by the aggregate amount of outstanding pre- October 13, 1987 , indebtedness.\nPremiums paid or accrued for qualified mortgage insurance by a taxpayer during the taxable year in connection with acquisition indebtedness with respect to a qualified residence of the taxpayer shall be treated for purposes of this section as interest which is qualified residence interest.\nThe amount otherwise treated as interest under clause (i) shall be reduced (but not below zero) by 10 percent of such amount for each $1,000 ($500 in the case of a married individual filing a separate return) (or fraction thereof) that the taxpayer’s adjusted gross income for the taxable year exceeds $100,000 ($50,000 in the case of a married individual filing a separate return).\nClause (i) shall not apply with respect to any mortgage insurance contracts issued before  January 1, 2007 .\nSubparagraph (A)(ii) shall not apply.\nSubparagraph (B)(ii) shall be applied by substituting “$750,000 ($375,000” for “$1,000,000 ($500,000”.\nSubclause (II) shall not apply to any indebtedness incurred on or before  December 15, 2017 , and, in applying such subclause to any indebtedness incurred after such date, the limitation under such subclause shall be reduced (but not below zero) by the amount of any indebtedness incurred on or before  December 15, 2017 , which is treated as acquisition indebtedness for purposes of this subsection for the taxable year.\nIn the case of a taxpayer who enters into a written binding contract before  December 15, 2017 , to close on the purchase of a principal residence before  January 1, 2018 , and who purchases such residence before  April 1, 2018 , subclause (III) shall be applied by substituting “ April 1, 2018 ” for “ December 15, 2017 ”.\nIn the case of taxable years beginning after  December 31, 2025 , the limitation under subparagraph (B)(ii) shall be applied to the aggregate amount of indebtedness of the taxpayer described in subparagraph (B)(i) without regard to the taxable year in which the indebtedness was incurred.\nIn the case of any indebtedness which is incurred to refinance indebtedness, such refinanced indebtedness shall be treated for purposes of clause (i)(III) as incurred on the date that the original indebtedness was incurred to the extent the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness.\nSubclause (I) shall not apply to any indebtedness after the expiration of the term of the original indebtedness or, if the principal of such original indebtedness is not amortized over its term, the expiration of the term of the 1st refinancing of such indebtedness (or if earlier, the date which is 30 years after the date of such 1st refinancing).\nSection 108(h)(2) shall be applied without regard to this subparagraph.\nFor purposes of clause (i)(II), notwithstanding section 280A(d)(1), if the taxpayer does not rent a dwelling unit at any time during a taxable year, such unit may be treated as a residence for such taxable year.\nAny indebtedness secured by stock held by the taxpayer as a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as so defined) shall be treated as secured by the house or apartment which the taxpayer is entitled to occupy as such a tenant-stockholder. If stock described in the preceding sentence may not be used to secure indebtedness, indebtedness shall be treated as so secured if the taxpayer establishes to the satisfaction of the Secretary that such indebtedness was incurred to acquire such stock.\nIndebtedness shall not fail to be treated as secured by any property solely because, under any applicable State or local homestead or other debtor protection law in effect on  August 16, 1986 , the security interest is ineffective or the enforceability of the security interest is restricted.\nFor purposes of determining whether any interest paid or accrued by an estate or trust is qualified residence interest, any residence held by such estate or trust shall be treated as a qualified residence of such estate or trust if such estate or trust establishes that such residence is a qualified residence of a beneficiary who has a present interest in such estate or trust or an interest in the residuary of such estate or trust.\nAny amount paid by the taxpayer for qualified mortgage insurance that is properly allocable to any mortgage the payment of which extends to periods that are after the close of the taxable year in which such amount is paid shall be chargeable to capital account and shall be treated as paid in such periods to which so allocated. No deduction shall be allowed for the unamortized balance of such account if such mortgage is satisfied before the end of its term. The preceding sentences shall not apply to amounts paid for qualified mortgage insurance provided by the Department of Veterans Affairs or the Rural Housing Service.\nFor purposes of this subsection, the term “debt instrument” means any instrument which is a debt instrument as defined in section 1275(a).\nThe amount of any business interest not allowed as a deduction for any taxable year by reason of paragraph (1) shall be treated as business interest paid or accrued in the succeeding taxable year.\nIn the case of any taxpayer (other than a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3)) which meets the gross receipts test of section 448(c) for any taxable year, paragraph (1) shall not apply to such taxpayer for such taxable year. In the case of any taxpayer which is not a corporation or a partnership, the gross receipts test of section 448(c) shall be applied in the same manner as if such taxpayer were a corporation or partnership.\nThe adjusted basis of a partner in a partnership interest shall be reduced (but not below zero) by the amount of excess business interest allocated to the partner under clause (i)(II).\nIf a partner disposes of a partnership interest, the adjusted basis of the partner in the partnership interest shall be increased immediately before the disposition by the amount of the excess (if any) of the amount of the basis reduction under subclause (I) over the portion of any excess business interest allocated to the partner under clause (i)(II) which has previously been treated under clause (ii) as business interest paid or accrued by the partner. The preceding sentence shall also apply to transfers of the partnership interest (including by reason of death) in a transaction in which gain is not recognized in whole or in part. No deduction shall be allowed to the transferor or transferee under this chapter for any excess business interest resulting in a basis increase under this subclause.\nRules similar to the rules of subparagraphs (A) and (C) shall apply with respect to any S corporation and its shareholders.\nFor purposes of this subsection, the term “business interest” means any interest paid or accrued on indebtedness properly allocable to a trade or business. Such term shall not include investment interest (within the meaning of subsection (d)).\nFor purposes of this subsection, the term “business interest income” means the amount of interest includible in the gross income of the taxpayer for the taxable year which is properly allocable to a trade or business. Such term shall not include investment income (within the meaning of subsection (d)).\nFor purposes of this paragraph, the term “electing real property trade or business” means any trade or business which is described in section 469(c)(7)(C) and which makes an election under this subparagraph. Any such election shall be made at such time and in such manner as the Secretary shall prescribe, and, once made, shall be irrevocable.\nThe term “floor plan financing interest” means interest paid or accrued on floor plan financing indebtedness.\nExcept as provided in clause (ii) or (iii), in the case of any taxable year beginning in 2019 or 2020, paragraph (1)(B) shall be applied by substituting “50 percent” for “30 percent”.\nA taxpayer may elect, at such time and in such manner as the Secretary may prescribe, not to have clause (i) apply to any taxable year. Such an election, once made, may be revoked only with the consent of the Secretary. In the case of a partnership, any such election shall be made by the partnership and may be made only for taxable years beginning in 2020.\nSubject to clause (ii), in the case of any taxable year beginning in 2020, the taxpayer may elect to apply this subsection by substituting the adjusted taxable income of the taxpayer for the last taxable year beginning in 2019 for the adjusted taxable income for such taxable year. In the case of a partnership, any such election shall be made by the partnership.\nIf an election is made under clause (i) for a taxable year which is a short taxable year, the adjusted taxable income for the taxpayer’s last taxable year beginning in 2019 which is substituted under clause (i) shall be equal to the amount which bears the same ratio to such adjusted taxable income determined without regard to this clause as the number of months in the short taxable year bears to 12\u202f 2 2 \u202fSo in original. Probably should be followed by a period.\nNo deduction shall be allowed under this section for any interest payable under section 6601 on any unpaid portion of the tax imposed by section 2001 for the period during which an extension of time for payment of such tax is in effect under section 6166.\nNo deduction shall be allowed under this chapter for any interest paid or accrued on a disqualified debt instrument.\nFor purposes of this subsection, the term “disqualified debt instrument” means any indebtedness of a corporation which is payable in equity of the issuer or a related party or equity held by the issuer (or any related party) in any other person.\nIf the disqualified debt instrument of a corporation is payable in equity held by the issuer (or any related party) in any other person (other than a related party), the basis of such equity shall be increased by the amount not allowed as a deduction by reason of paragraph (1) with respect to the instrument.\nFor purposes of this subsection, the term “disqualified debt instrument” does not include indebtedness issued by a dealer in securities (or a related party) which is payable in, or by reference to, equity (other than equity of the issuer or a related party) held by such dealer in its capacity as a dealer in securities. For purposes of this paragraph, the term “dealer in securities” has the meaning given such term by section 475.\nFor purposes of this subsection, a person is a related party with respect to another person if such person bears a relationship to such other person described in section 267(b) or 707(b).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, including regulations preventing avoidance of this subsection through the use of an issuer other than a corporation.\nNo deduction shall be allowed under this chapter for any interest paid or accrued under section 6601 on any underpayment of tax which is attributable to the portion of any reportable transaction understatement (as defined in section 6662A(b)) with respect to which the requirement of section 6664(d)(2)(A)\u202f 1  is not met.\nThe date of the enactment of this subparagraph, referred to in subsec. (h)(4)(E)(ii), is the date of enactment of  Pub. L. 109–432 , which was approved  Dec. 20, 2006 .\nSection 199A(g)(2), referred to in subsec. (j)(7)(C)(ii), probably should be a reference to section 199A(g)(4), which defines “specified agricultural or horticultural cooperative” after the general amendment of section 199A(g) by  Pub. L. 115–141, div. T, §\u202f101(a)(1) ,  Mar. 23, 2018 ,  132 Stat. 1151 .\nSection 6664(d)(2)(A), referred to in subsec. (m), was redesignated as section 6664(d)(3)(A) by  Pub. L. 111–152, title I, §\u202f1409(c)(2)(A) ,  Mar. 30, 2010 ,  124 Stat. 1069 .\n2020—Subsec. (h)(3)(E)(iv)(I).  Pub. L. 116–260  substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\nSubsec. (j)(10), (11).  Pub. L. 116–136  added par. (10) and redesignated former par. (10) as (11).\n2019—Subsec. (h)(3)(E)(iv)(I).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (d)(4)(E).  Pub. L. 115–141, §\u202f401(b)(12) , struck out subpar. (E). Text read as follows: “Investment income of the taxpayer for any taxable year shall be reduced by the amount of the passive activity loss to which section 469(a) does not apply for such taxable year by reason of section 469(m). The preceding sentence shall not apply to any portion of such passive activity loss which is attributable to a rental real estate activity with respect to which the taxpayer actively participates (within the meaning of section 469(i)(6)) during such taxable year.”\nSubsec. (e)(1).  Pub. L. 115–141, §\u202f401(c)(1)(C) , substituted “The portion of the original issue discount with respect to any debt instrument which is” for “In the case of any debt instrument issued after  July 1, 1982 , the portion of the original issue discount with respect to such debt instrument which is”.\nSubsec. (e)(4).  Pub. L. 115–141, §\u202f401(c)(3)(B) , amended par. (4) generally. Prior to amendment, text read as follows: “This subsection shall not apply to any debt instrument described in—\n“(A) subparagraph (D) of section 1272(a)(2) (relating to obligations issued by natural persons before  March 2, 1984 ), and\n“(B) subparagraph (E) of section 1272(a)(2) (relating to loans between natural persons).”\nSubsec. (e)(5)(C)(ii).  Pub. L. 115–141, §\u202f401(a)(48) , inserted “in” before “subsection (i)(1)(B)”.\nSubsec. (h)(3)(E)(iv)(I).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2017—Subsec. (h)(3)(F).  Pub. L. 115–97, §\u202f11043(a) , added subpar. (F).\nSubsec. (j).  Pub. L. 115–97, §\u202f13301(a) , amended subsec. (j) generally. Prior to amendment, subsec. (j) related to a limitation on deduction for interest on certain indebtedness of a corporation.\n2015—Subsec. (h)(3)(E)(iv)(I).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (d)(6).  Pub. L. 113–295, §\u202f221(a)(25)(A)(i) , struck out par. (6) which related to phase-in of disallowance.\nSubsec. (h)(3)(E)(iv)(I).  Pub. L. 113–295, §\u202f104(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (h)(4)(F).  Pub. L. 113–295, §\u202f220(h) , substituted “Department of Veterans Affairs or the Rural Housing Service” for “Veterans Administration or the Rural Housing Administration”.\nSubsec. (h)(5).  Pub. L. 113–295, §\u202f221(a)(25)(A)(ii) , struck out par. (5). Text read as follows: “In the case of any taxable year beginning in calendar years 1987 through 1990, the amount of interest with respect to which a deduction is disallowed under this subsection shall be equal to the applicable percentage (within the meaning of subsection (d)(6)(B)) of the amount which (but for this paragraph) would have been so disallowed.”\n2013—Subsec. (h)(3)(E)(iv)(I).  Pub. L. 112–240, §\u202f204(a) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\nSubsec. (h)(4)(E)(i).  Pub. L. 112–240, §\u202f204(b) , substituted “Department of Veterans Affairs” for “Veterans Administration” and “Rural Housing Service” for “Rural Housing Administration”.\n2010—Subsec. (f)(2)(A)(ii) to (iv).  Pub. L. 111–147, §\u202f502(a)(2)(B) , inserted “or” at end of cl. (ii), substituted period for “,\u2000or” in cl. (iii), and struck out cl. (iv), which read as follows: “is described in subparagraph (B).”\nSubsec. (f)(2)(B).  Pub. L. 111–147, §\u202f502(a)(1) , (2)(C)(i), redesignated subpar. (C) as (B), struck out “,\u2000and subparagraph (B),” after “subparagraph (A)” in introductory provisions, and struck out former subpar. (B) which related to certain obligations not included as registration-required obligations.\nSubsec. (f)(2)(B)(i).  Pub. L. 111–147, §\u202f502(a)(2)(C)(ii) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “in the case of—\n“(I) subparagraph (A), such obligation is of a type which the Secretary has determined by regulations to be used frequently in avoiding Federal taxes, or\n“(II) subparagraph (B), such obligation is of a type specified by the Secretary in regulations, and”.\nSubsec. (f)(2)(C).  Pub. L. 111–147, §\u202f502(a)(1) , redesignated subpar. (C) as (B).\nSubsec. (f)(3).  Pub. L. 111–147, §\u202f502(c) , inserted before period at end “,\u2000except that a dematerialized book entry system or other book entry system specified by the Secretary shall be treated as a book entry system described in such section”.\nSubsec. (h)(3)(E)(iv)(I).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2010 ”.\n2009—Subsec. (e)(5)(F), (G).  Pub. L. 111–5, §\u202f1232(a) , added subpar. (F) and redesignated former subpar. (F) as (G).\nSubsec. (i)(1).  Pub. L. 111–5, §\u202f1232(b) , in concluding provisions, inserted “(i)” before “permit a rate” and “,\u2000or (ii) permit, on a temporary basis, a rate to be used with respect to any debt instrument which is higher than the applicable Federal rate if the Secretary determines that such rate is appropriate in light of distressed conditions in the debt capital markets” before period at end.\n2007—Subsec. (h)(3)(E)(iv)(I).  Pub. L. 110–142  substituted “ December 31, 2010 ” for “ December 31, 2007 ”.\n2006—Subsec. (h)(3)(E).  Pub. L. 109–432, §\u202f419(a) , added subpar. (E).\nSubsec. (h)(4)(E), (F).  Pub. L. 109–432, §\u202f419(b) , added subpars. (E) and (F).\nSubsec. (j)(8).  Pub. L. 109–222, §\u202f501(a) , added par. (8). Former par. (8) redesignated (9).\nSubsec. (j)(9).  Pub. L. 109–222  redesignated par. (8) as (9) and added subpar. (D).\n2005—Subsec. (j)(6)(A)(i)(III), (IV).  Pub. L. 109–135  added subcl. (III) and redesignated former subcl. (III) as (IV).\n2004—Subsec. (e)(3)(B), (C).  Pub. L. 108–357, §\u202f841(a) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. ( l )(2).  Pub. L. 108–357, §\u202f845(a) , inserted “or equity held by the issuer (or any related party) in any other person” after “or a related party”.\nSubsec. ( l )(3).  Pub. L. 108–357, §\u202f845(d) , substituted “or any other person” for “or a related party” in introductory provisions.\nSubsec. ( l )(4) to (7).  Pub. L. 108–357, §\u202f845(b) , (c), added pars. (4) and (5) and redesignated former pars. (4) and (5) as (6) and (7), respectively.\nSubsecs. (m), (n).  Pub. L. 108–357, §\u202f838(a) , added subsec. (m) and redesignated former subsec. (m) as (n).\n2003—Subsec. (d)(4)(B).  Pub. L. 108–27  inserted at end “Such term shall include qualified dividend income (as defined in section 1(h)(11)(B)) only to the extent the taxpayer elects to treat such income as investment income for purposes of this subsection.”\n1999—Subsec. (j)(3)(C).  Pub. L. 106–170  added subpar. (C).\n1998—Subsec. (h)(2)(F).  Pub. L. 105–277  added subpar. (F).\n1997—Subsec. (h)(2)(E).  Pub. L. 105–34, §\u202f503(b)(2)(B) , struck out “or 6166 or under section 6166A (as in effect before its repeal by the Economic Recovery Tax Act of 1981)” after “section 6163”.\nSubsec. (h)(4)(A)(i)(I).  Pub. L. 105–34, §\u202f312(d)(1) , substituted “section 121” for “section 1034”.\nSubsec. (j)(2)(B)(iii).  Pub. L. 105–34, §\u202f1604(g)(1) , substituted “clause (ii)” for “clause (i)” in introductory provisions.\nSubsec. (k).  Pub. L. 105–34, §\u202f503(b)(2)(A) , added subsec. (k). Former subsec. (k) redesignated ( l ).\nSubsec. ( l ).  Pub. L. 105–34, §\u202f1005(a) , added subsec. ( l ). Former subsec. ( l ) redesignated (m).\nPub. L. 105–34, §\u202f503(b)(2)(A) , redesignated subsec. (k) as ( l ).\nSubsec. (m).  Pub. L. 105–34, §\u202f1005(a) , redesignated subsec. ( l ) as (m).\n1996—Subsec. (j)(1)(B).  Pub. L. 104–188, §\u202f1704(f)(2)(A) , inserted before period at end “(and clause (ii) of paragraph (2)(A) shall not apply for purposes of applying this subsection to the amount so treated)”.\nSubsec. (j)(6)(E)(ii).  Pub. L. 104–188, §\u202f1703(n)(4) , which directed that cl. (ii) be amended by substituting “which is” for “which is a”, could not be executed, because “which is a” does not appear.\nSubsec. (j)(7), (8).  Pub. L. 104–188, §\u202f1704(f)(2)(B) , added par. (7) and redesignated former par. (7) as (8).\n1993—Subsec. (d)(4)(B).  Pub. L. 103–66, §\u202f13206(d)(1) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘investment income’ means the sum of—\n“(i) gross income (other than gain taken into account under clause (ii)) from property held for investment, and\n“(ii) any net gain attributable to the disposition of property held for investment.”\nSubsec. (j).  Pub. L. 103–66, §\u202f13228(c)(2) , substituted “for interest on certain indebtedness” for “for certain interest paid by corporation to related person” in heading.\nSubsec. (j)(3).  Pub. L. 103–66, §\u202f13228(a) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “For purposes of this subsection—\n“(A)  In general .—Except as provided in subparagraph (B), the term ‘disqualified interest’ means any interest paid or accrued by the taxpayer (directly or indirectly) to a related person if no tax is imposed by this subtitle with respect to such interest.\n“(B)  Exception for certain existing indebtedness .—The term ‘disqualified interest’ does not include any interest paid or accrued under indebtedness with a fixed term—\n“(i) which was issued on or before  July 10, 1989 , or\n“(ii) which was issued after such date pursuant to a written binding contract in effect on such date and all times thereafter before such indebtedness was issued.”\nSubsec. (j)(5)(B).  Pub. L. 103–66, §\u202f13228(c)(1) , struck out “to a related person” after “by the taxpayer” in introductory provisions.\nSubsec. (j)(6)(D), (E).  Pub. L. 103–66, §\u202f13228(b) , added subpars. (D) and (E).\n1990—Subsec. (e)(5)(A).  Pub. L. 101–508, §\u202f11701(b)(1) , amended last sentence generally. Prior to amendment, last sentence read as follows: “For purposes of clause (ii), rules similar to the rules of subsection (i)(3)(B) shall apply in determining the time when the original issue discount is paid.”\nSubsec. (i)(3).  Pub. L. 101–508, §\u202f11701(b)(2)(B) , inserted sentence at end.\nSubsec. (i)(3)(B).  Pub. L. 101–508, §\u202f11701(b)(2)(A) , struck out “(or stock)” after “obligation” wherever appearing.\nSubsec. (j)(2)(A)(ii).  Pub. L. 101–508, §\u202f11701(c)(2) , substituted “or on any other day” for “and on such other days”.\nSubsec. (j)(2)(C).  Pub. L. 101–508, §\u202f11701(c)(1) , substituted “reduced (but not below zero) by such” for “less such” in introductory provisions.\n1989—Subsec. (e)(5), (6).  Pub. L. 101–239, §\u202f7202(a) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (i).  Pub. L. 101–239, §\u202f7202(b) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (j).  Pub. L. 101–239, §\u202f7210(a) , added subsec. (j). Former subsec. (j) redesignated (k).\nPub. L. 101–239, §\u202f7202(b) , redesignated subsec. (i) as (j).\nSubsec. (k).  Pub. L. 101–239, §\u202f7210(a) , redesignated subsec. (j) as (k).\n1988—Subsec. (d)(3)(A).  Pub. L. 100–647, §\u202f1005(c)(1) , substituted “properly allocable to” for “incurred or continued to purchase or carry”.\nSubsec. (d)(4)(B).  Pub. L. 100–647, §\u202f1005(c)(2) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘investment income’ means the sum of—\n“(i) gross income (other than gain described in clause (ii)) from property held for investment, and\n“(ii) any net gain attributable to the disposition of property held for investment,\nbut only to the extent such amounts are not derived from the conduct of a trade or business.”\nSubsec. (d)(6)(A).  Pub. L. 100–647, §\u202f1005(c)(3) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “The amount of interest disallowed under this subsection for any such taxable year shall be equal to the sum of—\n“(i) the applicable percentage of the amount which (without regard to this paragraph) is not allowed as a deduction under this subsection for the taxable year to the extent such amount does not exceed the ceiling amount,\n“(ii) the amount which (without regard to this paragraph) is not allowed as a deduction under this subsection in excess of the ceiling amount, plus\n“(iii) the amount of any carryforward to such taxable year under paragraph (2) with respect to which a deduction was disallowed under this subsection for a preceding taxable year.\nFor purposes of this subparagraph, the amount under clause (i) or (ii) shall be computed without regard to the amount described in clause (iii).”\nSubsec. (e)(2)(B).  Pub. L. 100–647, §\u202f1006(u)(1) , substituted “paragraph (7)” for “paragraph (6)”.\nSubsec. (h)(2)(A).  Pub. L. 100–647, §\u202f1005(c)(4) , substituted “properly allocable to” for “incurred or continued in connection with the conduct of”.\nSubsec. (h)(2)(E).  Pub. L. 100–647, §\u202f1005(c)(12) , inserted “or under section 6166A (as in effect before its repeal by the Economic Recovery Tax Act of 1981)” before period at end.\nSubsec. (h)(3)(C).  Pub. L. 100–647, §\u202f1005(c)(5) , effective as if enacted immediately before enactment of  Pub. L. 100–203  (see 1987 Amendment note below), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The amount under subparagraph (B)(ii)(I) at any time after  August 16, 1986 , shall not be less than the outstanding aggregate principal amount (as of such time) of indebtedness which was incurred on or before  August 16, 1986 , and which was secured by the qualified residence on  August 16, 1986 .”\nSubsec. (h)(4).  Pub. L. 100–647, §\u202f1005(c)(6)(A) , effective as if enacted immediately before enactment of  Pub. L. 100–203  (redesignating par. (5) as (4), see 1987 Amendment note below), amended heading by substituting “Other definitions and special rules—For purposes of this subsection—” for “Other definitions and special rules”.\nSubsec. (h)(4)(A).  Pub. L. 100–647, §\u202f1005(c)(6)(B)(i) , (7), effective as if enacted immediately before enactment of  Pub. L. 100–203  (redesignating par. (5) as (4), see 1987 Amendment note below), amended subpar. (A) by striking out “For purposes of this subsection—” after “Qualified residence” in introductory provisions, “used or” after “Residence not” in cl. (iii) heading, and “or use” after “does not rent” in cl. (iii) text.\nSubsec. (h)(4)(B).  Pub. L. 100–647, §\u202f1005(c)(6)(B)(ii) , effective as if enacted immediately before enactment of  Pub. L. 100–203  (redesignating par. (5) as (4), see 1987 Amendment note below), amended subpar. (B) by substituting “Any” for “For purposes of this paragraph, any”.\nSubsec. (h)(4)(C), (D).  Pub. L. 100–647, §\u202f1005(c)(8) , effective as if enacted immediately before enactment of  Pub. L. 100–203  (redesignating par. (5) as (4), see 1987 Amendment note below), par. (4) added subpars. (C) and (D).\nSubsec. (h)(5).  Pub. L. 100–647, §\u202f2004(b)(1) , redesignated par. (6) as (5).\nSubsec. (h)(6).  Pub. L. 100–647, §\u202f2004(b)(1) , redesignated par. (6) as (5).\nPub. L. 100–647, §\u202f1005(c)(9) , substituted “but for this paragraph” for “but for this subsection”.\nSubsec. (i)(2).  Pub. L. 100–647, §\u202f1009(b)(6) , made technical correction to directory language of  Pub. L. 99–514, §\u202f902(e)(1) , see 1986 Amendment note below.\n1987—Subsec. (d)(4)(E).  Pub. L. 100–203, §\u202f10212(b) , substituted “section 469(m)” for “section 469( l )”.\nSubsec. (h)(3).  Pub. L. 100–203, §\u202f10102(a) , amended par. (3) generally. Prior to amendment (see 1988 Amendment note above), par. (3) read as follows: “For purposes of this subsection—\n“(A)  In general .—The term ‘qualified residence interest’ means interest which is paid or accrued during the taxable year on indebtedness which is secured by any property which (at the time such interest is paid or accrued) is a qualified residence of the taxpayer.\n“(B)  Limitation on amount of interest .—The term ‘qualified residence interest’ shall not include any interest paid or accrued on indebtedness secured by any qualified residence which is allocable to that portion of the principal amount of such indebtedness which, when added to the outstanding aggregate principal amount of all other indebtedness previously incurred and secured by such qualified residence, exceeds the lesser of—\n“(i) the fair market value of such qualified residence, or\n“(ii) the sum of—\n“(I) the taxpayer’s basis in such qualified residence (adjusted only by the cost of any improvements to such residence), plus\n“(II) the aggregate amount of qualified indebtedness of the taxpayer with respect to such qualified residence.\n“(C)  Cost not less than balance of indebtedness incurred on or before  august 16, 1986 .—\n“(i)  In general .—The amount under subparagraph (B)(ii)(I) at any time after  August 16, 1986 , shall not be less than the outstanding principal amount (as of such time) of indebtedness—\n“(I) which was incurred on or before  August 16, 1986 , and which was secured by the qualified residence on  August 16, 1986 , or\n“(II) which is secured by the qualified residence and was incurred after  August 16, 1986 , to refinance indebtedness described in subclause (I) (or refinanced indebtedness meeting the requirements of this subclause) to the extent (immediately after the refinancing) the principal amount of the indebtedness resulting from the refinancing does not exceed the principal amount of the refinanced indebtedness (immediately before the refinancing).\n“(ii)  Limitation on period of refinancing .—Subclause (II) of clause (i) shall not apply to any indebtedness after—\n“(I) the expiration of the term of the indebtedness described in clause (i)(I), or\n“(II) if the principal of the indebtedness described in clause (i)(I) is not amortized over its term, the expiration of the term of the 1st refinancing of such indebtedness (or if earlier, the date which is 30 years after the date of such refinancing).\n“(D)  Time for determination .—Except as provided in regulations, any determination under subparagraph (B) shall be made as of the time the indebtedness is incurred.”\nSubsec. (h)(4), (5).  Pub. L. 100–203, §\u202f10102(b) , redesignated par. (5) as (4) and struck out former par. (4) which defined “qualified indebtedness” for purposes of this subsection.\n1986—Subsec. (d).  Pub. L. 99–514, §\u202f511(a) , substituted “Limitation on investment interest” for “Limitation on interest on investment indebtedness” in heading, and amended text generally, revising and restating as pars. (1) to (6) provisions of former pars. (1) to (7).\nSubsec. (e)(2)(C).  Pub. L. 99–514, §\u202f1803(a)(4) , added subpar. (C).\nSubsec. (e)(3)(A).  Pub. L. 99–514, §\u202f1810(e)(1)(A) , inserted “The preceding sentence shall not apply to the extent that the original issue discount is effectively connected with the conduct by such foreign related person of a trade or business within the United States unless such original issue discount is exempt from taxation (or is subject to a reduced rate of tax) pursuant to a treaty obligation of the United States.”\nSubsec. (e)(5).  Pub. L. 99–514, §\u202f1810(e)(1)(B) , redesignated par. (4), relating to cross references, as (5).\nSubsec. (f)(3).  Pub. L. 99–514, §\u202f1301(j)(3) , substituted “section 149(a)(3)” for “section 103(j)(3)”.\nSubsec. (h).  Pub. L. 99–514, §\u202f511(b) , added subsec. (h). Former subsec. (h) redesignated (i).\nSubsec. (i)(2).  Pub. L. 99–514, §\u202f902(e)(1) , as amended by  Pub. L. 100–647, §\u202f1009(b)(6) , substituted “section 265(a)(2)” for “section 265(2)”.\nPub. L. 99–514, §\u202f511(b) , redesignated former subsec. (h) as (i).\n1984—Subsec. (d)(3)(D).  Pub. L. 98–369, §\u202f56(b) , designated existing provisions as cl. (i) and added cl. (ii).\nSubsec. (e)(1).  Pub. L. 98–369, §\u202f42(a)(3) , substituted “debt instrument” for “bond” in two places and struck out “by an issuer (other than a natural person)” before “,\u2000the portion of the original issue”.\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f42(a)(3) , substituted provisions relating to debt instruments for provisions relating to bonds.\nSubsec. (e)(3).  Pub. L. 98–369, §\u202f128(c) , added par. (3) relating to special rule for original issue discount on obligation held by related foreign person. Former par. (3), relating to exceptions, redesignated (4).\nPub. L. 98–369, §\u202f42(a)(3) , added par. (3) relating to exceptions.\nSubsec. (e)(4).  Pub. L. 98–369, §\u202f128(c) , redesignated par. (3), relating to exceptions, as (4).\nPub. L. 98–369, §\u202f42(a)(3) , added par. (4) relating to cross references.\nSubsec. (f)(2)(C)(i).  Pub. L. 98–369, §\u202f127(f) , redesignated existing provision as subcl. (I), and in subcl. (I) as so redesignated, inserted reference to subpar. (A) and substituted “or” for “and”, and added subcl. (II).\nSubsecs. (g), (h).  Pub. L. 98–369, §\u202f612(c) , added subsec. (g) and redesignated former subsec. (g) as (h).\n1982—Subsec. (d)(4).  Pub. L. 97–354  redesignated subpar. (D) as (B). Former subpars. (B) and (C), relating to partnerships and shareholders of electing small business corporations, respectively, were struck out.\nSubsec. (e).  Pub. L. 97–248, §\u202f231(b) , added subsec. (e) relating to original issue discount. Former subsec. (e), setting forth cross references, redesignated (f).\nPub. L. 97–248, §\u202f231(b) , redesignated former subsec. (e), setting forth cross references, as (f).\nSubsec. (f).  Pub. L. 97–248, §\u202f310(b)(2) , added subsec. (f) relating to the requirement that obligations be in registered form to be tax-exempt. Former subsec. (f), setting forth cross references, redesignated (g).\nSubsec. (g).  Pub. L. 97–248, §\u202f310(b)(2) , redesignated former subsec. (f), setting forth cross references, as (g).\n1976—Subsec. (b)(1).  Pub. L. 94–455, §\u202f1901(b)(8)(C) , substituted “organization described in section 170(b)(1)(A)(ii) and which is provided for a student of such organization” for “institution (as defined in section 151(e)(4)) and which is provided for a student of such institution”.\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f209(a)(1) , among other changes, substituted in subpar. (A) “$10,000” for “$25,000” and “$5,000” for “$12,500”, struck out subpar. (C) relating to the excess of net long-term capital gain over short-term capital loss and subpar. (D) relating to the excess of investment interest over amounts in subpar. (A), and in provisions following lettered paragraphs substituted “$10,000” for “$25,000” and struck out provisions relating to the determination of the amount referred to in subpar. (C).\nSubsec. (d)(2).  Pub. L. 94–455, §\u202f209(a)(1) , among other changes, struck out provisions relating to the limitation on the amount of interest allowable by this par. and to reduction of disallowed investment interest for capital gain deduction purposes.\nSubsec. (d)(3)(A).  Pub. L. 94–455, §\u202f209(a)(2) , inserted provision relating to determination of the amount of net investment income where taxpayer has investment interest for taxable year to which this subsection applies.\nSubsec. (d)(3)(B)(iii).  Pub. L. 94–455 , §§\u202f205(c)(3), 1901(b)(3)(K), substituted “1250, and 1254” for “and 1250”, and “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.  Section 205(c)(3) of Pub. L. 94–455 , which directed the amendment of subsec. (d)(3)(A)(iii), was executed by amending subsec. (d)(3)(B)(iii) to reflect the probable intent of Congress.\nSubsec. (d)(3)(E).  Pub. L. 94–455, §\u202f209(a)(3) , substituted “limitation in paragraph (1)” for “limitations in paragraphs (1) and (2)(A)”.\nSubsec. (d)(4)(B), (C).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(5).  Pub. L. 94–455, §\u202f209(a)(4) , (5), redesignated par. (6) as (5) and inserted provision relating to the application of this paragraph after  Dec. 31, 1975 , on an allocation basis rather than a specific item basis. Former par. (5), relating to capital gains treatment of investment interest, was struck out.\nPub. L. 94–455, §\u202f1901(b)(3)(K) , directed the amendment of par. (5) by substituting “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”, such par. (5) having been struck out by  Pub. L. 94–455, §\u202f209(a)(4) .\nSubsec. (d)(6).  Pub. L. 94–455 , §§\u202f209(a)(4), 1906(b)(13)(A), redesignated par. (7) as (6) and struck out in provision following subpar. (B) “or his delegate” after “Secretary”. Former par. (6) redesignated (5).\nSubsec. (d)(7).  Pub. L. 94–455, §\u202f209(a)(6) , added par. (7). Former par. (7) redesignated (6).\n1971—Subsec. (d)(1)(B).  Pub. L. 92–178, §\u202f304(b)(2) , inserted “the amount (if any) by which the deductions allowable under this section (determined without regard to this subsection) and sections 162, 164(a)(1) or (2), or 212 attributable to property of the taxpayer subject to a net lease exceeds the rental income produced by such property for the property year, plus” after “plus”.\nSubsec. (d)(3)(C).  Pub. L. 92–178, §\u202f304(d) , inserted reference to section 162.\nSubsec. (d)(4)(A)(i).  Pub. L. 92–178, §\u202f304(a)(2)(A) , inserted “of the lessor” after “deductions” and “(other than rents and reimbursed amounts with respect to such property)” after “section 162”.\nSubsec. (d)(7).  Pub. L. 92–178, §\u202f304(a)(2)(B) , added par. (7).\n1969—Subsecs. (d), (e).  Pub. L. 91–172  added subsec. (d). Former subsec. (d) redesignated (e).\n1964—Subsec. (b)(1).  Pub. L. 88–272  included the purchase of educational services, and defined “educational services”.\n1963—Subsecs. (c), (d).  Pub. L. 88–9, §\u202f1(a) , (c), added subsec. (c), redesignated former subsec. (c) as (d) and added par. (5).\nPub. L. 116–260, div. EE, title I, §\u202f133(b) ,  Dec. 27, 2020 ,  134 Stat. 3053 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2020 .”\nPub. L. 116–136, div. A, title II, §\u202f2306(b) ,  Mar. 27, 2020 ,  134 Stat. 359 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2018 .”\nPub. L. 116–94, div. Q, title I, §\u202f102(b) ,  Dec. 20, 2019 ,  133 Stat. 3228 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2017 .”\nPub. L. 115–141, div. U, title IV, §\u202f401(c)(1)(H) ,  Mar. 23, 2018 ,  132 Stat. 1205 , provided that:  “The amendments made by this paragraph [amending this section and sections 1271, 1272, and 1278 of this title] shall apply to debt instruments issued on or after  July 2, 1982 .”\nPub. L. 115–141, div. U, title IV, §\u202f401(c)(3)(C) ,  Mar. 23, 2018 ,  132 Stat. 1206 , provided that:  “The amendments made by this paragraph [amending this section and  section 1272 of this title ] shall apply to obligations issued on or after  March 2, 1984 .”\nPub. L. 115–123, div. D, title I, §\u202f40202(b) ,  Feb. 9, 2018 ,  132 Stat. 145 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2016 .”\nPub. L. 115–97, title I, §\u202f11043(b) ,  Dec. 22, 2017 ,  131 Stat. 2087 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13301(c) ,  Dec. 22, 2017 ,  131 Stat. 2121 , provided that:  “The amendments made by this section [amending this section and sections 381 and 382 of this title] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f152(b) ,  Dec. 18, 2015 ,  129 Stat. 3066 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f104(b) ,  Dec. 19, 2014 ,  128 Stat. 4013 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2013 .”\nAmendment by  section 221(a)(25)(A) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title II, §\u202f204(c) ,  Jan. 2, 2013 ,  126 Stat. 2323 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f759(b) ,  Dec. 17, 2010 ,  124 Stat. 3323 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2010 .”\nAmendment by  Pub. L. 111–147  applicable to obligations issued after the date which is 2 years after  Mar. 18, 2010 , see  section 502(f) of Pub. L. 111–147 , set out as a note under  section 149 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1232(c) ,  Feb. 17, 2009 ,  123 Stat. 341 , provided that: \n “(1)   Suspension .— The amendments made by subsection (a) [amending this section] shall apply to obligations issued after  August 31, 2008 , in taxable years ending after such date. \n \n “(2)   Interest rate authority .— The amendments made by subsection (b) [amending this section] shall apply to obligations issued after  December 31, 2009 , in taxable years ending after such date.”\nPub. L. 110–142, §\u202f3(b) ,  Dec. 20, 2007 ,  121 Stat. 1804 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or accrued after  December 31, 2007 .”\nPub. L. 109–432, div. A, title IV, §\u202f419(d) ,  Dec. 20, 2006 ,  120 Stat. 2968 , provided that:  “The amendments made by this section [amending this section and  section 6050H of this title ] shall apply to amounts paid or accrued after  December 31, 2006 .”\nPub. L. 109–222, title V, §\u202f501(c) ,  May 17, 2006 ,  120 Stat. 354 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning on or after the date of the enactment of this Act [ May 17, 2006 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f838(b) ,  Oct. 22, 2004 ,  118 Stat. 1597 , provided that:  “The amendments made by this section [amending this section] shall apply to transactions in taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title VIII, §\u202f841(c) ,  Oct. 22, 2004 ,  118 Stat. 1598 , provided that:  “The amendments made by this section [amending this section and  section 267 of this title ] shall apply to payments accrued on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title VIII, §\u202f845(e) ,  Oct. 22, 2004 ,  118 Stat. 1601 , provided that:  “The amendments made by this section [amending this section] shall apply to debt instruments issued after  October 3, 2004 .”\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 106–170  applicable to taxable years beginning after  Dec. 31, 2000 , see  section 546(a) of Pub. L. 106–170 , set out as a note under  section 856 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  section 312(d)(1) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nPub. L. 105–34, title V, §\u202f503(d) ,  Aug. 5, 1997 ,  111 Stat. 853 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 2053, 6166, and 6601 of this title] shall apply to estates of decedents dying after  December 31, 1997 . \n \n “(2)   Election .— In the case of the estate of any decedent dying before  January 1, 1998 , with respect to which there is an election under section 6166 of the Internal Revenue Code of 1986, the executor of the estate may elect to have the amendments made by this section apply with respect to installments due after the effective date of the election; except that the 2-percent portion of such installments shall be equal to the amount which would be the 4-percent portion of such installments without regard to such election. Such an election shall be made before  January 1, 1999  in the manner prescribed by the Secretary of the Treasury and, once made, is irrevocable.”\nPub. L. 105–34, title X, §\u202f1005(b) ,  Aug. 5, 1997 ,  111 Stat. 912 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to disqualified debt instruments issued after  June 8, 1997 . \n \n “(2)   Transition rule .— The amendment made by this section shall not apply to any instrument issued after  June 8, 1997 , if such instrument is— “(A)  issued pursuant to a written agreement which was binding on such date and at all times thereafter, \n \n “(B)  described in a ruling request submitted to the Internal Revenue Service on or before such date, or \n \n “(C)  described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission required solely by reason of the issuance.”\nAmendment by  section 1703(n)(4) of Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nPub. L. 104–188, title I, §\u202f1704(f)(2)(C) ,  Aug. 20, 1996 ,  110 Stat. 1879 , provided that:  “The amendments made by this paragraph [amending this section] shall apply as if included in the amendments made by section 7210(a) of the Revenue Reconciliation Act of 1989 [ Pub. L. 101–239 ].”\nAmendment by  section 13206(d)(1) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13206(d)(3) of Pub. L. 103–66  set out as a note under  section 1 of this title .\nPub. L. 103–66, title XIII, §\u202f13228(d) ,  Aug. 10, 1993 ,  107 Stat. 495 , provided that:  “The amendments made by this section [amending this section] shall apply to interest paid or accrued in taxable years beginning after  December 31, 1993 .”\nAmendment by  Pub. L. 101–508  effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989,  Pub. L. 101–239, title VII , to which such amendment relates, see  section 11701(n) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–239, title VII, §\u202f7202(c) ,  Dec. 19, 1989 ,  103 Stat. 2332 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to instruments issued after  July 10, 1989 . \n \n “(2)   Exceptions.— “(A)  The amendments made by this section shall not apply to any instrument if— “(i)  such instrument is issued in connection with an acquisition— “(I)  which is made on or before  July 10, 1989 , \n \n “(II)  for which there was a written binding contract in effect on  July 10, 1989 , and at all times thereafter before such acquisition, or \n \n “(III)  for which a tender offer was filed with the Securities and Exchange Commission on or before  July 10, 1989 , \n \n \n “(ii)  the term of such instrument is not greater than— “(I)  the term specified in the written documents described in clause (iii), or \n \n “(II)  if no term is determined under subclause (I), 10 years, and \n \n \n “(iii)  the use of such instrument in connection with such acquisition (and the maximum amount of proceeds from such instrument) was determined on or before  July 10, 1989 , and such determination is evidenced by written documents— “(I)  which were transmitted on or before  July 10, 1989 , between the issuer and any governmental regulatory bodies or prospective parties to the issuance or acquisition, and \n \n “(II)  which are customarily used for the type of acquisition or financing involved. \n \n \n \n “(B)  The amendments made by this section shall not apply to any instrument issued pursuant to the terms of a debt instrument issued on or before  July 10, 1989 , or described in subparagraph (A) or (D). \n \n “(C)  The amendments made by this section shall not apply to any instrument issued to refinance an original issue discount debt instrument to which the amendments made by this section do not apply if— “(i)  the maturity date of the refinancing instrument is not later than the maturity date of the refinanced instrument, \n \n “(ii)  the issue price of the refinancing instrument does not exceed the adjusted issue price of the refinanced instrument, \n \n “(iii)  the stated redemption price at maturity of the refinancing instrument is not greater than the stated redemption price at maturity of the refinanced instrument, and \n \n “(iv)  the interest payments required under the refinancing instrument before maturity are not less than (and are paid not later than) the interest payments required under the refinanced instrument. \n \n \n “(D)  The amendments made by this section shall not apply to instruments issued after  July 10, 1989 , pursuant to a reorganization plan in a title 11 or similar case (as defined in section 368(a)(3) of the Internal Revenue Code of 1986) if the amount of proceeds of such instruments, and the maturities of such instruments, do not exceed the amount or maturities specified in the last reorganization plan filed in such case on or before  July 10, 1989 .”\nPub. L. 101–239, title VII, §\u202f7210(b) ,  Dec. 19, 1989 ,  103 Stat. 2342 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to interest paid or accrued in taxable years beginning after  July 10, 1989 . \n \n “(2)   Special rule for demand loans, etc .— In the case of any demand loan (or other loan without a fixed term) which was outstanding on  July 10, 1989 , interest on such loan to the extent attributable to periods before  September 1, 1989 , shall not be treated as disqualified interest for purposes of section 163(j) of the Internal Revenue Code of 1986 (as added by subsection (a)).”\nPub. L. 100–647, title I, §\u202f1005(c)(13) ,  Nov. 10, 1988 ,  102 Stat. 3392 , provided that:  “For purposes of applying the amendments made by this subsection [amending this section and sections 467, 1255, and 7872 of this title] and the amendments made by section 10102 of the Revenue Act of 1987 [ section 10102 of Pub. L. 100–203 , amending this section], the provisions of this subsection shall be treated as having been enacted immediately before the enactment of the Revenue Act of 1987.”\nAmendment by sections 1006(u)(1) and 1009(b)(6) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(b)(1) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10102(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–386 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  section 10212(b) of Pub. L. 100–203  effective as if included in the amendments made by section 501 of the Tax Reform Act of 1986,  Pub. L. 99–514 , see  section 10212(c) of Pub. L. 100–203 , set out as a note under  section 58 of this title .\nPub. L. 99–514, title V, §\u202f511(e) ,  Oct. 22, 1986 ,  100 Stat. 2249 , provided that:  “The amendments made by this section [amending this section and sections 467, 703, 1255, 1363, and 7872 of this title] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 902(e)(1) of Pub. L. 99–514  applicable to taxable years ending after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 902(f) of Pub. L. 99–514 , set out as a note under  section 265 of this title .\nAmendment by  section 1301(j)(3) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by sections 1803(a)(4) and 1810(e)(1) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 42(a)(3) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nPub. L. 98–369, div. A, title I, §\u202f56(d) ,  July 18, 1984 ,  98 Stat. 574 , provided that:  “The amendments made by this section [amending this section and sections 263 and 265 of this title] shall apply to short sales after the date of enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nAmendment by  section 127(f) of Pub. L. 98–369  applicable to interest received after  July 18, 1984 , with respect to obligations issued after such date, in taxable years ending after such date, see  section 127(g)(1) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by  section 128(c) of Pub. L. 98–369  applicable to obligations issued after  June 9, 1984 , see  section 128(d)(2) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by  section 612(c) of Pub. L. 98–369  applicable to interest paid or accrued after  Dec. 31, 1984 , on indebtedness incurred after  Dec. 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–248  applicable to obligations issued after  Dec. 31, 1982 , with exceptions for certain warrants, see  section 310(d) of Pub. L. 97–248 , set out as a note under  section 103 of this title .\nAmendment by  section 205(c)(3) of Pub. L. 94–455  applicable with respect to taxable years ending after  Dec. 31, 1975 , see  section 205(e) of Pub. L. 94–455 , set out as an Effective Date note under  section 1254 of this title .\nPub. L. 94–455, title II, §\u202f209(b) ,  Oct. 4, 1976 ,  90 Stat. 1543 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1975 . \n \n “(2)   Indebtedness incurred before  september 11, 1975 .— In the case of indebtedness attributable to a specific item of property which— “(A)  is for a specified term, and \n \n “(B)  was incurred before  September 11, 1975 , or is incurred after  September 10, 1975 , pursuant to a written contract or commitment which on  September 11, 1975 , and at all times thereafter before the incurring of such indebtedness, is binding on the taxpayer, \n \n\n the amendments made by this section shall not apply, but section 163(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the enactment of this Act [ Oct. 4, 1976 ]) shall apply. For purposes of the preceding sentence, so much of the net investment income (as defined in section 163(d)(3)(A) of such Code) for any taxable year as is not taken into account under section 163(d) of such Code, as amended by this Act, by reason of the last sentence of section 163(d)(3)(A) of such Code, shall be taken into account for purposes of applying such section as in effect before the date of enactment of this Act [ Oct. 4, 1976 ] with respect to interest on indebtedness referred to in the preceding sentence.”\nAmendment by section 1901(b)(8)(C), (3)(K) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–178, title III, §\u202f304(e) ,  Dec. 10, 1971 ,  85 Stat. 524 , provided that:  “The amendments made by this section to section 57 of the Internal Revenue Code of 1954 shall apply to taxable years beginning after  December 31, 1969 . The amendments made by this section to section 163 of such Code shall apply to taxable years beginning after  December 31, 1971 .”\nPub. L. 91–172, title II, §\u202f221(b) ,  Dec. 30, 1969 ,  83 Stat. 576 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1971 .”\nPub. L. 88–272, title II, §\u202f224(d) ,  Feb. 26, 1964 ,  78 Stat. 79 , provided that:  “The amendments made by subsections (a) [enacting  section 483 of this title ] and (b) [amending the analysis preceding  section 481 of this title ] shall apply to payments made after  December 31, 1963 , on account of sales or exchanges of property occurring after  June 30, 1963 , other than any sale or exchange made pursuant to a binding written contract (including an irrevocable written option) entered into before  July 1, 1963 . The amendments made by subsection (c) [amending this section] shall apply to payments made during taxable years beginning after  December 31, 1963 .”\nSubsec. (c) effective as of  Jan. 1, 1962 , and applicable with respect to taxable years ending on or after such date, see  section 2 of Pub. L. 88–9 , set out as an Effective Date note under  section 1055 of this title .\nFor provisions that nothing in amendment by  section 401(b)(12) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 100–647, title I, §\u202f1005(c)(14) ,  Nov. 10, 1988 ,  102 Stat. 3392 , provided that: \n “(A)  For purposes of applying section 163(h) of the 1986 Code to any taxable year beginning during 1987, if, incident to a divorce or legal separation— “(i)  an individual acquires the interest of a spouse or former spouse in a qualified residence in a transfer to which section 1041 of the 1986 Code applies, and \n \n “(ii)  such individual incurs indebtedness which is secured by such qualified residence, \n \n\n the amount determined under paragraph (3)(B)(ii)(I) of section 163(h) of the 1986 Code (as in effect before the amendments made by the Revenue Act of 1987 [ Pub. L. 100–203, title X ]) with respect to such qualified residence shall be increased by the amount determined under subparagraph (B). \n \n “(B)  The amount determined under this subparagraph shall be equal to the excess (if any) of— “(i)  the lesser of the amount of the indebtedness described in subparagraph (A)(ii), or the fair market value of the spouse’s or former spouse’s interest in the qualified residence as of the time of the transfer, over \n \n “(ii)  the basis of the spouse or former spouse in such interest in such residence (adjusted only by the cost of any improvements to such residence).”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1066 ,  July 18, 1984 ,  98 Stat. 1048 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— If— “(1)  a corporation had an election in effect under subchapter S of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for the taxable years of such corporation beginning in 1982, 1983, and 1984, and \n \n “(2)  a shareholder of such corporation makes an election to have this section apply, \n \n\n then any qualified income which such shareholder takes into account by reason of holding stock in such corporation for any taxable year of such corporation beginning in 1983 or 1984 shall be treated for purposes of section 163(d) of the Internal Revenue Code of 1986 as such income would have been treated but for the enactment of the Subchapter S Revision Act of 1982 [ Pub. L. 97–354 , see Tables for classification]. \n \n “(b)   Qualified Income .— For purposes of subsection (a), the term ‘qualified income’ means any income other than income which is attributable to personal services performed by the shareholder for the corporation. \n \n “(c)   Election .— The election under subsection (a)(2) shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe.”\nFor provision that, for purposes of amendments by  section 231(b) of Pub. L. 97–248 , any evidence of indebtedness issued pursuant to a written commitment which was binding on  July 1, 1982 , and at all times thereafter be treated as issued on  July 1, 1982 , see  section 231(e) of Pub. L. 97–248 , set out as a note under  section 1232A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'The term “personal property tax” means an ad valorem tax which is imposed on an annual basis in respect of personal property.\nA State or local tax includes only a tax imposed by a State, a possession of the United States, or a political subdivision of any of the foregoing, or by the District of Columbia.\nA foreign tax includes only a tax imposed by the authority of a foreign country.\nAny tax referred to in subparagraph (A) imposed with respect to a transfer occurring during the taxable year of the distributee (or, in the case of a taxable termination, the trust) which is paid not later than the time prescribed by law (including extensions) for filing the return with respect to such transfer shall be treated as having been paid on the last day of the taxable year in which the transfer was made.\nThe term “general sales tax” means a tax imposed at one rate with respect to the sale at retail of a broad range of classes of items.\nExcept in the case of a lower rate of tax applicable with respect to an item described in subparagraph (C), no deduction shall be allowed under this paragraph for any general sales tax imposed with respect to an item at a rate other than the general rate of tax.\nIn the case of motor vehicles, if the rate of tax exceeds the general rate, such excess shall be disregarded and the general rate shall be treated as the rate of tax.\nIf the amount of any general sales tax is separately stated, then, to the extent that the amount so stated is paid by the consumer (other than in connection with the consumer’s trade or business) to the seller, such amount shall be treated as a tax imposed on, and paid by, such consumer.\nIn the case of an individual, in addition to the taxes described in subsection (a), there shall be allowed as a deduction for the taxable year an amount equal to one-half of the taxes imposed by section 1401 (other than the taxes imposed by section 1401(b)(2)) for such taxable year.\nFor purposes of this chapter, the deduction allowed by paragraph (1) shall be treated as attributable to a trade or business carried on by the taxpayer which does not consist of the performance of services by the taxpayer as an employee.\nSection 2604, referred to in subsec. (b)(4)(A)(ii), was repealed by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(95)(B)(i) ,  Dec. 19, 2014 ,  128 Stat. 4051 , effective  Dec. 19, 2014 .\n2022—Subsec. (b)(6).  Pub. L. 117–169, §\u202f13903(a)(1) , amended par. (6), “as amended by section 13904”, by substituting “2025” for “2026” in heading and “2026” for “2027” in introductory provisions. See note below.\nPub. L. 117–169, §\u202f13904(b)(1) , substituted “2026” for “2025” in heading and “2027” for “2026” in introductory provisions.\n2017—Subsec. (b)(6).  Pub. L. 115–97  added par. (6).\n2015—Subsec. (b)(5)(I).  Pub. L. 114–113  struck out subpar. (I). Text read as follows: “This paragraph shall apply to taxable years beginning after  December 31, 2003 , and before  January 1, 2015 .”\n2014—Subsec. (a)(5).  Pub. L. 113–295, §\u202f221(a)(12)(D) , struck out par. (5) which read as follows: “The environmental tax imposed by section 59A.”\nSubsec. (a)(6).  Pub. L. 113–295, §\u202f221(a)(26) , struck out par. (6) which read as follows: “Qualified motor vehicle taxes.”\nSubsec. (b)(4)(A)(ii).  Pub. L. 113–295, §\u202f221(a)(95)(B)(ii) , inserted “(as in effect before its repeal)” after “section 2604”.\nSubsec. (b)(5)(I).  Pub. L. 113–295, §\u202f105(a) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (b)(6).  Pub. L. 113–295, §\u202f221(a)(26) , struck out par. (6) which related to qualified motor vehicle taxes.\nSubsec. (b)(6)(E) to (G).  Pub. L. 113–295, §\u202f209(c) , redesignated subpars. (F) and (G) as (E) and (F), respectively, substituted “Subsection (a)(6)” for “This paragraph” in subpars. (E) and (F), and struck out former subpar. (E). Prior to amendment, text of former subpar. (E) read as follows: “The last sentence of subsection (a) shall not apply to any qualified motor vehicle taxes.”\n2013—Subsec. (b)(5)(I).  Pub. L. 112–240  substituted “ January 1, 2014 ” for “ January 1, 2012 ”.\n2010—Subsec. (b)(5)(I).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\nSubsec. (f)(1).  Pub. L. 111–148 , which directed the insertion of “(other than the taxes imposed by section 1401(b)(2))” after “section 1401)” in subsec. (f), was executed by making the insertion after “section 1401” in subsec. (f)(1), to reflect the probable intent of Congress.\n2009—Subsec. (a)(6).  Pub. L. 111–5, §\u202f1008(a) , added par. (6).\nSubsec. (b)(6).  Pub. L. 111–5, §\u202f1008(b) , added par. (6).\n2008—Subsec. (b)(5)(I).  Pub. L. 110–343  substituted “ January 1, 2010 ” for “ January 1, 2008 ”.\n2006—Subsec. (b)(5)(I).  Pub. L. 109–432  substituted “2008” for “2006”.\n2005—Subsec. (b)(5)(A).  Pub. L. 109–135  reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(i)  In general .—At the election of the taxpayer for the taxable year, subsection (a) shall be applied—\n“(I) without regard to the reference to State and local income taxes, and\n“(II) as if State and local general sales taxes were referred to in a paragraph thereof.”\n2004—Subsec. (b)(5).  Pub. L. 108–357  added par. (5).\n1996—Subsec. (a)(4), (5).  Pub. L. 104–188  added pars. (4) and (5) and struck out former pars. (4) and (5) which read as follows:\n“(4) The environmental tax imposed by section 59A.\n“(5) The GST tax imposed on income distributions.”\n1988—Subsec. (a)(4).  Pub. L. 100–418  struck out par. (4) relating to windfall profit tax imposed by section 4986 and redesignated par. (5) relating to environmental tax as (4).\nSubsec. (a)(5).  Pub. L. 100–647  substituted “The GST” for “the GST”.\nPub. L. 100–418  redesignated par. (5), relating to environmental tax, as (4).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f134(a)(2) , inserted “Notwithstanding the preceding sentence, any tax (not described in the first sentence of this subsection) which is paid or accrued by the taxpayer in connection with an acquisition or disposition of property shall be treated as part of the cost of the acquired property or, in the case of a disposition, as a reduction in the amount realized on the disposition.”\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f134(a)(1) , struck out par. (4) relating to “State and local general sales taxes” and redesignated as par. (4) former par. (5) relating to windfall profit tax.\nSubsec. (a)(5).  Pub. L. 99–514, §\u202f1432(a)(1) , added par. (5) relating to GST tax imposed on income distributions.\nPub. L. 99–499  added par. (5) relating to environmental tax.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f134(b)(1) , (2), redesignated par. (3) as (2) and struck out former par. (2), general sales taxes provisions, subpars. (A) to (E) of which covered in general rule, special rules for food, etc., items taxed at different rates, compensating use taxes, and special rules for motor vehicles, respectively.\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f134(b)(2) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1432(a)(2) , added par. (4).\nPub. L. 99–514, §\u202f134(b)(2) , redesignated par. (4) as (3).\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f134(b)(1) , struck out par. (5), separately stated general sales taxes, which read as follows: “If the amount of any general sales tax is separately stated, then, to the extent that the amount so stated is paid by the consumer (otherwise than in connection with the consumer’s trade or business) to his seller, such amount shall be treated as a tax imposed on, and paid by, such consumer.”\n1984—Subsec. (f).  Pub. L. 98–369  redesignated pars. (2) and (3) as pars. (1) and (2), respectively. Former par. (1), which referred to section 1451 for provisions disallowing any deduction for the payment of the tax imposed by subchapter B of chapter 3 (relating to tax-free covenant bonds), was struck out.\n1983—Subsec. (f).  Pub. L. 98–21  added subsec. (f). Former subsec. (f) redesignated (g).\nSubsec. (f)(3).  Pub. L. 97–473  added par. (3).\nSubsec. (g).  Pub. L. 98–21  redesignated subsec. (f) as (g).\n1980—Subsec. (a)(5).  Pub. L. 96–223  added par. (5).\n1978—Subsec. (a)(5).  Pub. L. 95–600, §\u202f111(a) , struck out par. (5) relating to a deduction for State and local taxes on the sale of gasoline, diesel fuel, and other motor fuels.\nSubsec. (b)(5).  Pub. L. 95–600, §\u202f111(b) , struck out in heading “and gasoline taxes” after “sales taxes”, and in text “or of any tax on the sale of gasoline, diesel fuel, or other motor fuel” after “sales tax”.\n1976—Subsec. (d)(2).  Pub. L. 94–455, §\u202f1901(a)(25) , redesignated subpar. (D) as (B), and struck out subpar. (B) which related to the taxable years that subsec. (d)(1) applied and subpar. (C) which related to the limitations on subsec. (d)(1) where real property tax was allowable as a deduction under the Internal Revenue Code of 1939.\nSubsecs. (f), (g).  Pub. L. 94–455, §\u202f1951(b)(3)(A) , redesignated subsec. (g) as (f). Former subsec. (f), which related to payments for municipal services in atomic energy communities, was struck out.\n1972—Subsec. (b)(2)(E).  Pub. L. 92–580  added subpar. (E).\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f207(a) , limited the subsection to State, local and foreign real property, income, war profits, excess profits, and unspecified taxes, on a business or activity described in section 212, and to State and local personal property, general sales, gasoline, diesel fuel and other motor fuel taxes.\nSubsec. (b).  Pub. L. 88–272, §\u202f207(a) , added subsec. (b). Former subsec. (b), which denied the deduction for certain Federal income taxes, for Federal war profits and excess profits taxes, import duties, excise and stamp taxes, and estate, inheritance, legacy, succession and gift taxes, local assessments against benefits increasing property values, and certain taxes imposed by any foreign country or possession of the United States if the taxpayer chose to benefit by section 901 relating to foreign tax credit, and for taxes on real property to the extent that they are treated as imposed on another taxpayer, was struck out.\nSubsec. (c).  Pub. L. 88–272, §\u202f207(a) , substituted provisions denying the deduction for taxes assessed against local benefits which increase property value, except for so much as is properly allocable to maintenance or interest charges, and for real property taxes to the extent they are treated as imposed on another taxpayer, for provisions relating to certain retail sales taxes and gasoline taxes, the extent to which they were deductible, and to definition of “state or local sales tax”.\nSubsec. (f).  Pub. L. 88–272, §\u202f207(b)(1) , inserted “State” before “real property taxes”.\nSubsec. (g).  Pub. L. 88–272, §\u202f207(b)(2) , designated existing provisions as par. (1), substituted “1451” for “1451(f)” and added par. (2).\n1958—Subsecs. (f), (g).  Pub. L. 85–866, §\u202f6(a) , added subsec. (f) and redesignated former subsec. (f) as (g).\nPub. L. 117–169, title I, §\u202f13903(a)(2) ,  Aug. 16, 2022 ,  136 Stat. 2014 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2022 .”\nPub. L. 117–169, title I, §\u202f13904(b)(2) ,  Aug. 16, 2022 ,  136 Stat. 2015 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2022 .”\nPub. L. 115–97, title I, §\u202f11042(b) ,  Dec. 22, 2017 ,  131 Stat. 2086 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f106(b) ,  Dec. 18, 2015 ,  129 Stat. 3046 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f105(b) ,  Dec. 19, 2014 ,  128 Stat. 4013 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nAmendment by  section 209(c) of Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by section 221(a)(12)(D), (26), (95)(B)(ii) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title II, §\u202f205(b) ,  Jan. 2, 2013 ,  126 Stat. 2323 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f722(b) ,  Dec. 17, 2010 ,  124 Stat. 3316 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 111–148, title IX, §\u202f9015(c) ,  Mar. 23, 2010 ,  124 Stat. 872 , provided that:  “The amendments made by this section [amending this section and sections 1401, 1402, 3101, and 3102 of this title] shall apply with respect to remuneration received, and taxable years beginning, after  December 31, 2012 .”\nAmendment by  Pub. L. 111–5  applicable to purchases on or after  Feb. 17, 2009 , in taxable years ending after such date, see  section 1008(e) of Pub. L. 111–5 , set out as a note under  section 56 of this title .\nPub. L. 110–343, div. C, title II, §\u202f201(b) ,  Oct. 3, 2008 ,  122 Stat. 3864 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 109–432, div. A, title I, §\u202f103(b) ,  Dec. 20, 2006 ,  120 Stat. 2934 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title V, §\u202f501(b) ,  Oct. 22, 2004 ,  118 Stat. 1521 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–418, title I, §\u202f1941(c) ,  Aug. 23, 1988 ,  102 Stat. 1324 , provided that:  “The amendments made by this section [amending this section and sections 193, 291, 6161, 6211, 6212, 6213, 6214, 6302, 6344, 6501, 6511, 6512, 6611, 6654, 6655, 6724, 6862, 7422, and 7512 of this title, and repealing sections 280D, 4986 to 4998, 6050C, 6076, 6232, 6429, 6430, and 7241 of this title] shall apply to crude oil removed from the premises on or after the date of the enactment of this Act [ Aug. 23, 1988 ].”\nAmendment by  section 134 of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by section 1432(a)(1), (2) of  Pub. L. 99–514  applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as an Effective Date note under  section 2601 of this title .\nAmendment by  Pub. L. 99–499  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 516(c) of Pub. L. 99–499 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 98–369  not applicable with respect to obligations issued before  Jan. 1, 1984 , see  section 475(b) of Pub. L. 98–369 , set out as a note under  section 33 of this title .\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 124(d)(2) of Pub. L. 98–21 , set out as a note under  section 1401 of this title .\nFor effective date of amendment by  Pub. L. 97–473 , see  section 204(1) of Pub. L. 97–473 , set out as an Effective Date note under  section 7871 of this title .\nAmendment by  Pub. L. 96–223  applicable to periods after  Feb. 29, 1980 , see  section 101(i) of Pub. L. 96–223 , set out as an Effective Date note under  section 6161 of this title .\nPub. L. 95–600, title I, §\u202f111(c) ,  Nov. 6, 1978 ,  92 Stat. 2777 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see sections 1901(d) and 1951(d) of  Pub. L. 94–455 , set out as notes under sections 2 and 72 of this title, respectively.\nPub. L. 92–580, §\u202f4(b) ,  Oct. 27, 1972 ,  86 Stat. 1277 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending on or after  January 1, 1971 .”\nPub. L. 88–272, title II, §\u202f207(c) ,  Feb. 26, 1964 ,  78 Stat. 43 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 275 of this title  and amending this section and sections 535, 545, 556, 901, and 903 of this title] shall apply to taxable years beginning after  December 31, 1963 . \n \n “(2)   Special taxing districts .— Section 164(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a)) shall not prevent the deduction under section 164 of such Code (as so amended) of taxes levied by a special taxing district which is described in section 164(b)(5) of such Code (as in effect for a taxable year ending on  December 31, 1963 ) and which was in existence on  December 31, 1963 , for the purpose of retiring indebtedness existing on such date.”\nPub. L. 85–866, §\u202f6(b) ,  Sept. 2, 1958 ,  72 Stat. 1608 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 .”\nPub. L. 94–455, title XIX, §\u202f1951(b)(3)(B) ,  Oct. 4, 1976 ,  90 Stat. 1837 , provided that:  “Notwithstanding subparagraph (A) [amending this section], any amount paid or accrued in a taxable year beginning after  December 31, 1976 , to the Atomic Energy Commission or its successors for municipal-type services shall be allowed as a deduction under section 164 if such amount would have been deductible by reason of section 164(f) (as in effect for a taxable year ending on  December 31, 1976 ) and if the amount is paid or accrued with respect to real property in a community (within the meaning of section 21(b) of the Atomic Energy Community Act of 1955 ( 42 U.S.C. 2304(b) )) in which the Commission on  December 31, 1976 , was rendering municipal-type services for which it received compensation from the owners of property within such community.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.\nFor purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.\nLosses from wagering transactions shall be allowed only to the extent of the gains from such transactions. For purposes of the preceding sentence, in the case of taxable years beginning after  December 31, 2017 , and before  January 1, 2026 , the term “losses from wagering transactions” includes any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.\nFor purposes of subsection (a), any loss arising from theft shall be treated as sustained during the taxable year in which the taxpayer discovers such loss.\nLosses from sales or exchanges of capital assets shall be allowed only to the extent allowed in sections 1211 and 1212.\nIf any security which is a capital asset becomes worthless during the taxable year, the loss resulting therefrom shall, for purposes of this subtitle, be treated as a loss from the sale or exchange, on the last day of the taxable year, of a capital asset.\nAny loss of an individual described in subsection (c)(3) shall be allowed only to the extent that the amount of the loss to such individual arising from each casualty, or from each theft, exceeds $500 ($100 for taxable years beginning after  December 31, 2009 ).\nThe term “personal casualty gain” means the recognized gain from any involuntary conversion of property which is described in subsection (c)(3) arising from fire, storm, shipwreck, or other casualty, or from theft.\nThe term “personal casualty loss” means any loss described in subsection (c)(3). For purposes of paragraph (2), the amount of any personal casualty loss shall be determined after the application of paragraph (1).\nIn any case to which paragraph (2)(A) applies, the deduction for personal casualty losses for any taxable year shall be treated as a deduction allowable in computing adjusted gross income to the extent such losses do not exceed the personal casualty gains for the taxable year.\nFor purposes of this subsection, a husband and wife making a joint return for the taxable year shall be treated as 1 individual.\nFor purposes of paragraph (2), the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that the deductions for costs paid or incurred in connection with the administration of the estate or trust shall be treated as allowable in arriving at adjusted gross income.\nNo loss described in subsection (c)(3) shall be allowed if, at the time of filing the return, such loss has been claimed for estate tax purposes in the estate tax return.\nAny loss of an individual described in subsection (c)(3) to the extent covered by insurance shall be taken into account under this section only if the individual files a timely insurance claim with respect to such loss.\nIn the case of an individual, except as provided in subparagraph (B), any personal casualty loss which (but for this paragraph) would be deductible in a taxable year beginning after  December 31, 2017 , and before  January 1, 2026 , shall be allowed as a deduction under subsection (a) only to the extent it is attributable to a Federally declared disaster (as defined in subsection (i)(5)).\nNotwithstanding the provisions of subsection (a), any loss occurring in a disaster area and attributable to a federally declared disaster may, at the election of the taxpayer, be taken into account for the taxable year immediately preceding the taxable year in which the disaster occurred.\nIf an election is made under this subsection, the casualty resulting in the loss shall be treated for purposes of this title as having occurred in the taxable year for which the deduction is claimed.\nThe amount of the loss taken into account in the preceding taxable year by reason of paragraph (1) shall not exceed the uncompensated amount determined on the basis of the facts existing at the date the taxpayer claims the loss.\nNothing in this title shall be construed to prohibit the Secretary from prescribing regulations or other guidance under which an appraisal for the purpose of obtaining a loan of Federal funds or a loan guarantee from the Federal Government as a result of a federally declared disaster may be used to establish the amount of any loss described in paragraph (1) or (2).\nThe term “Federally\u202f 1 1 \u202fSo in original. Probably should not be capitalized.  declared disaster” means any disaster subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.\nThe term “disaster area” means the area so determined to warrant such assistance.\nNothing in subsection (a) or in any other provision of law shall be construed to provide a deduction for any loss sustained on any registration-required obligation unless such obligation is in registered form (or the issuance of such obligation was subject to tax under section 4701).\nThe term “registration-required obligation” has the meaning given to such term by section 163(f)(2).\nThe term “registered form” has the same meaning as when used in section 163(f).\nFor purposes of this subsection, the term “deposit” means any deposit, withdrawable account, or withdrawable or repurchasable share.\nIn lieu of any election under paragraph (1), the taxpayer may elect to treat the amount referred to in paragraph (1) for the taxable year as an ordinary loss described in subsection (c)(2) incurred during the taxable year.\nNo election may be made under subparagraph (A) with respect to any loss on a deposit in a qualified financial institution if part or all of such deposit is insured under Federal law.\nWith respect to each financial institution, the aggregate amount of losses attributable to deposits in such financial institution to which an election under subparagraph (A) may be made by the taxpayer for any taxable year shall not exceed $20,000 ($10,000 in the case of a separate return by a married individual). The limitation of the preceding sentence shall be reduced by the amount of any insurance proceeds under any State law which can reasonably be expected to be received with respect to losses on deposits in such institution.\nSection 166 shall not apply to any loss to which an election under this subsection applies.\nThe Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsecs. (i)(5)(A) and (k), is  Pub. L. 93–288 ,  May 22, 1974 ,  88 Stat. 143 , which is classified principally to chapter 68 (§\u202f5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 5121 of Title 42  and Tables.\n2017—Subsec. (d).  Pub. L. 115–97, §\u202f11050(a) , inserted at end “For purposes of the preceding sentence, in the case of taxable years beginning after  December 31, 2017 , and before  January 1, 2026 , the term ‘losses from wagering transactions’ includes any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.”\nSubsec. (h)(5).  Pub. L. 115–97, §\u202f11044(a) , added par. (5).\n2014—Subsec. (h)(1).  Pub. L. 113–295, §\u202f211(c)(1)(C) , substituted “Dollar” for “$100” in heading.\nSubsec. (h)(3).  Pub. L. 113–295, §\u202f221(a)(27)(A) , redesignated par. (4) as (3) and struck out former par. (3) which related to special rule for losses in federally declared disasters.\nSubsec. (h)(3)(B).  Pub. L. 113–295, §\u202f221(a)(27)(B) , substituted “paragraph (2)” for “paragraphs (2) and (3)”.\nSubsec. (h)(4), (5).  Pub. L. 113–295, §\u202f221(a)(27)(A) , redesignated par. (5) as (4). Former par. (4) redesignated (3).\nSubsec. (i)(1).  Pub. L. 113–295, §\u202f221(a)(27)(C)(i) , struck out “(as defined by clause (ii) of subsection (h)(3)(C))” after “disaster area” and “(as defined by clause (i) of such subsection)” after “federally declared disaster”.\nSubsec. (i)(4).  Pub. L. 113–295, §\u202f221(a)(27)(C)(ii) , struck out “(as defined by subsection (h)(3)(C)(i)” after “federally declared disaster”.\nSubsec. (i)(5).  Pub. L. 113–295, §\u202f221(a)(27)(C)(iii) , added par. (5).\n2010—Subsec. (j)(2)(A).  Pub. L. 111–147  struck out “except that clause (iv) of subparagraph (A), and subparagraph (B), of such section shall not apply” before period.\n2008—Subsec. (h)(1).  Pub. L. 110–343, §\u202f706(c) , substituted “$500 ($100 for taxable years beginning after  December 31, 2009 )” for “$100”.\nSubsec. (h)(3).  Pub. L. 110–343, §\u202f706(a)(1) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (h)(4).  Pub. L. 110–343, §\u202f706(a)(1) , redesignated par. (3) as (4). Former par. (4) redesignated (5).\nSubsec. (h)(4)(B).  Pub. L. 110–343, §\u202f706(a)(2)(A) , substituted “paragraphs (2) and (3)” for “paragraph (2)”.\nSubsec. (h)(5).  Pub. L. 110–343, §\u202f706(a)(1) , redesignated par. (4) as (5).\nSubsec. (i)(1).  Pub. L. 110–343, §\u202f706(a)(2)(B) , substituted “loss occurring in a disaster area (as defined by clause (ii) of subsection (h)(3)(C)) and attributable to a federally declared disaster (as defined by clause (i) of such subsection)” for “loss attributable to a disaster occurring in an area subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act”.\nSubsec. (i)(4).  Pub. L. 110–343, §\u202f706(a)(2)(C) , substituted “federally declared disaster (as defined by subsection (h)(3)(C)(i)” for “Presidentially declared disaster (as defined by section 1033(h)(3))”.\n2004—Subsecs. (i)(1), (k).  Pub. L. 108–311  inserted “Robert T. Stafford” before “Disaster Relief and Emergency Assistance Act”.\n2000—Subsec. (g)(3).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f318(b)(2)] , struck out last sentence of concluding provisions which read as follows: “As used in subparagraph (A), the term ‘stock’ does not include nonvoting stock which is limited and preferred as to dividends.”\nSubsec. (g)(3)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f318(b)(1)] , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “stock possessing at least 80 percent of the voting power of all classes of its stock and at least 80 percent of each class of its nonvoting stock is owned directly by the taxpayer, and”.\n1997—Subsec. (i)(4).  Pub. L. 105–34  added par. (4).\n1988—Subsecs. (i)(1), (k).  Pub. L. 100–707  substituted “and Emergency Assistance Act” for “Act of 1974”.\nSubsec. ( l )(5) to (7).  Pub. L. 100–647  added pars. (5) and (6), redesignated former par. (6) as (7), and struck out former par. (5) which read as follows: “ Election .—Any election by the taxpayer under this subsection may be revoked only with the consent of the Secretary and shall apply to all losses of the taxpayer on deposits in the institution with respect to which such election was made.”\n1986—Subsec. (h)(4)(E).  Pub. L. 99–514, §\u202f1004(a) , added subpar. (E).\nSubsecs. ( l ), (m).  Pub. L. 99–514, §\u202f905(a) , added subsec. ( l ) and redesignated former subsec. ( l ) as (m).\n1984—Subsec. (c)(3).  Pub. L. 98–369, §\u202f711(c)(2)(A)(i) , extended limitation to losses of property not connected with a transaction entered into for profit.\nSubsec. (h).  Pub. L. 98–369, §\u202f711(c)(2)(A)(ii) , substituted heading “Treatment of casualty gains and losses” for “Casualty and theft losses”; substituted par. (1) “$100 limitation per casualty” provision for former par. (1) “General rule” provision stating that: “Any loss of an individual described in subsection (c)(3) shall be allowed for any taxable year only to the extent that—\n“(A) the amount of loss to such individual arising from each casualty, or from each theft, exceeds $100, and\n“(B) the aggregate amount of all such losses sustained by such individual during the taxable year (determined after application of subparagraph (A) exceeds 10 percent of the adjusted gross income of the individual.”;\nadded par. (2) “Net casualty loss allowed only to the extent it exceeds 10 percent of adjusted gross income” provision and par. (3) “Definitions of personal casualty gain and personal casualty loss” provisions; redesignated as par. (4) former par. (2) catchline; added par. (4)(A) “Personal casualty losses allowable in computing adjusted gross income to the extent of personal casualty gains” provision; redesignated as par. (4)(B) former par. (2)(A) joint returns provision, substituting “For purposes of this section” for “For purposes of the $100 and 10 percent limitations described in paragraph (1)” and “individual” for “one individual”; redesignated as par. (4)(C) former par. (2)(B), substituting therein paragraph “(2)” for “(1)”; and redesignated as par. (4)(D) former par. (2)(C).\nPub. L. 98–369, §\u202f711(c)(1) , amended par. (2) by redesignating subpar. (B) as (C) and by adding a new subpar. (B) relating to the determination of adjusted gross income in case of estates and trusts.\nSubsec. (j)(3).  Pub. L. 98–369, §\u202f42(a)(4) , substituted “section 1287” for “subsection (d) of section 1232”.\nSubsecs. (k), ( l ).  Pub. L. 98–369, §\u202f1051(a) , added subsec. (k) and redesignated former subsec. (k) as ( l ).\n1982—Subsec. (c)(3).  Pub. L. 97–248, §\u202f203(b) , inserted “except as provided in subsection (h),” before “losses of property” and struck out provisions that a loss described in this paragraph would be allowed only to the extent that the amount of loss to such individual arising from each casualty, or from each theft, exceeded $100, that, for purposes of the $100 limitation, a husband and wife making a joint return under section 6013 for the taxable year in which the loss was allowed as a deduction would be treated as one individual, and that no loss described in this paragraph would be allowed if, at the time of filing the return, such loss had been claimed for estate tax purposes in the estate tax return.\nSubsec. (h).  Pub. L. 97–248, §\u202f203(a) , added subsec. (h) relating to casualty and theft losses. Former subsec. (h), relating to disaster losses, redesignated (i).\nSubsec. (i).  Pub. L. 97–248, §\u202f203(a) , redesignated former subsec. (h), relating to disaster losses, as (i), in subsec. (i), as so redesignated, further redesignated existing unnumbered provisions as pars. (1) and (2), in par. (1), as so redesignated, substituted “be taken into account for the taxable year” for “be deducted for the taxable year”, in par. (2), as so redesignated, substituted “shall be treated for purposes of this title as having occurred” for “will be deemed to have occurred”, added par. (3), and struck out provision that a deduction under this subsection could not be in excess of so much of the loss as would have been deductible in the taxable year in which the casualty occurred, based on facts existing at the date the taxpayer claimed the loss. Former subsec. (i), setting forth cross references, redesignated (j).\nSubsec. (j).  Pub. L. 97–248, §\u202f310(b)(5) , added subsec. (j) relating to denial of deduction for losses on certain obligations not in registered form. Former subsec. (j), setting forth cross references, redesignated (k).\nPub. L. 97–248, §\u202f203(a) , redesignated former subsec. (i), setting forth cross references, as (j).\nSubsec. (k).  Pub. L. 97–248, §\u202f310(b)(5) , redesignated former subsec. (j), setting forth cross references, as (k).\n1976—Subsecs. (i), (j).  Pub. L. 94–455  redesignated subsec. (j) as subsec. (i). Former subsec. (i), which related to property confiscated by Cuba, was struck out.\n1974—Subsec. (h).  Pub. L. 93–288  substituted “Disaster Relief Act of 1974” for “Disaster Relief Act of 1970”.\n1972—Subsec. (h).  Pub. L. 92–418  struck out par. (1) provisions relating to losses attributable to a disaster occurring during period following close of taxable year and on or before time prescribed by law for filing the income tax return for the taxable year without regard to any extension of time, struck out par. (2) designation, and inserted “attributable to a disaster” before “occurring in an area”, and at end of second sentence, inserted “based on facts existing at the date the taxpayer claims the loss”.\nSubsec. (h)(1).  Pub. L. 92–336  substituted provisions relating to losses attributable to a disaster which occurs during the period after the close of the taxable year and on or before the last day of the 6th calendar month beginning after the close of the taxable year, for provisions relating to losses attributable to a disaster which occurs during the period following the close of the taxable year and on or before the time prescribed by law for filing the income tax return for the taxable year, determined without regard to any extension of time.\n1971—Subsec. (g)(3).  Pub. L. 91–687  substituted “stock possessing at least 80 percent of the voting power of all classes of its stock and at least 80 percent of each class of its nonvoting stock” for “at least 95 percent of each class of its stock” in subpar. (A), and inserted at the end of the subsection the sentence providing that the term “stock”, as used in subpar. (A), does not include nonvoting stock which is limited and preferred as to dividends.\nSubsec. (i)(1).  Pub. L. 91–677, §\u202f1(a)(1) , (2), struck out “or (2)” after “paragraph (1)” in cl. (B), and substituted “one or more days in the period beginning on  December 31, 1958 , and ending on  May 16, 1959 ” for “ December 31, 1958 ”.\nSubsec. (i)(2)(B).  Pub. L. 91–677, §\u202f1(a)(3) , substituted “one or more days during the period beginning on  December 31, 1958 , and ending on  May 16, 1959 ” for “ December 31, 1958 ” and “the first day in such period on which the property was held by the taxpayer” for “ December 31, 1958 ”.\nSubsec. (i)(3).  Pub. L. 91–677, §\u202f1(a)(4) , struck out subsec. (i)(3) which authorized a refund or credit to be given for any overpayment attributable to the application of par. (1), provided that a claim was filed for such refund or credit before  Jan. 1, 1965 .\n1970—Subsec. (h)(2).  Pub. L. 91–606  substituted “the Disaster Relief Act of 1970” for “sections 1855–1855g of title 42”.\n1964—Subsec. (c)(3).  Pub. L. 88–272, §\u202f208(a) , inserted requirement that losses must exceed $100 to be deductible.\nSubsec. (i).  Pub. L. 88–348  designated existing provisions as par. (1), substituted provisions permitting individuals who were citizens of the United States or resident aliens on  Dec. 31, 1958 , who sustained any loss of property prior to  Jan. 1, 1964 , and which was not a loss described in par. (1) or (2) of subsec. (c), to treat such loss as a loss under subsec. (c)(3), except that in cases of tangible property, the property had to be held by the taxpayer, and located in Cuba, on  Dec. 31, 1958 , for provisions which permitted any loss of tangible property to be treated as a loss from a casualty within subsec. (c)(3), therein, and added pars. (2) and (3).\nPub. L. 88–272, §\u202f238 , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (j).  Pub. L. 88–272, §\u202f238 , redesignated former subsec. (i) as (j).\n1962—Subsecs. (h), (i).  Pub. L. 87–426  added subsec. (h) and redesignated former subsec. (h) as (i).\n1958—Subsec. (g)(3)(B).  Pub. L. 85–866, §\u202f7 , substituted “rental of” for “rental from”.\nSubsec. (h)(3), (4).  Pub. L. 85–866, §\u202f57(c)(1) , added pars. (3) and (4).\nSubsec. (h)(5).  Pub. L. 85–866, §\u202f202(a) , added par. (5).\nPub. L. 115–97, title I, §\u202f11044(b) ,  Dec. 22, 2017 ,  131 Stat. 2088 , provided that:  “The amendment made by this section [amending this section] shall apply to losses incurred in taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f11050(b) ,  Dec. 22, 2017 ,  131 Stat. 2089 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  section 211(c)(1)(C) of Pub. L. 113–295  effective as if included in the provisions of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008,  Pub. L. 110–343, div. C , to which such amendment relates, see  section 211(d) of Pub. L. 113–295 , set out as a note under  section 143 of this title .\nAmendment by section 221(a)(27)(A)–(C) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–147  applicable to obligations issued after the date which is 2 years after  Mar. 18, 2010 , see  section 502(f) of Pub. L. 111–147 , set out as a note under  section 149 of this title .\nAmendment by section 706(a)(1), (2)(A)–(C) of  Pub. L. 110–343  applicable to disasters declared in taxable years beginning after  Dec. 31, 2007 , see  section 706(d)(1) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nAmendment by  section 706(c) of Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 706(d)(2) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f318(b)(3)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–645, provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 105–34, title IX, §\u202f912(b) ,  Aug. 5, 1997 ,  111 Stat. 878 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 905(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 905(c)(1) of Pub. L. 99–514 , as amended, set out as a note under  section 451 of this title .\nPub. L. 99–514, title X, §\u202f1004(b) ,  Oct. 22, 1986 ,  100 Stat. 2388 , provided that:  “The amendment made by this section [amending this section] shall apply to losses sustained in taxable years beginning after  December 31, 1986 .”\nAmendment by  section 42(a)(4) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  section 711(c)(1) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f711(c)(2)(A)(v) ,  July 18, 1984 ,  98 Stat. 945 , provided that:  “The amendments made by this subparagraph [amending this section and sections 873, 931, and 1231 of this title] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 98–369, div. A, title X, §\u202f1051(b) ,  July 18, 1984 ,  98 Stat. 1045 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1981 , with respect to residences in areas determined by the President of the United States, after such date, to warrant assistance by the Federal Government under the Disaster Relief Act of 1974 [ 42 U.S.C. 5121  et seq.].”\nPub. L. 97–248, title II, §\u202f203(c) ,  Sept. 3, 1982 ,  96 Stat. 422 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1982 . Such amendments shall also apply to the taxpayer’s last taxable year beginning before  January 1, 1983 , solely for purposes of determining the amount allowable as a deduction with respect to any loss taken into account for such year by reason of an election under section 165(i) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this section).”\nAmendment by  section 310(b)(5) of Pub. L. 97–248  applicable to obligations issued after  Dec. 31, 1982 , with exceptions for certain warrants, see  section 310(d) of Pub. L. 97–248 , set out as a note under  section 103 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 93–288  effective  Apr. 1, 1974 , see  section 605 of Pub. L. 93–288 , formerly set out as an Effective Date note under  section 5121 of Title 42 , The Public Health and Welfare.\nPub. L. 92–418, §\u202f2(c) ,  Aug. 30, 1972 ,  86 Stat. 657 , provided in part that:  “The amendment made by subsection (a) [amending this section] shall apply to disasters occurring after  December 31, 1971 , in taxable years ending after such date.”\nPub. L. 92–336, §\u202f2(b) ,  July 1, 1972 ,  86 Stat. 406 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to disasters occurring after  December 31, 1971 , in taxable years ending after such date.”\nPub. L. 91–687, §\u202f2 ,  Jan. 12, 1971 ,  84 Stat. 2071 , provided that:  “The amendments made by this Act [amending this section] shall apply with respect to taxable years beginning on or after  January 1, 1970 .”\nPub. L. 91–677, §\u202f1(b)(1) ,  Jan. 12, 1971 ,  84 Stat. 2061 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply in respect of losses sustained in taxable years ending after  December 31, 1958 .”\nPub. L. 91–606, title III, §\u202f304 ,  Dec. 31, 1970 ,  84 Stat. 1760 , provided that:  “This Act [enacting sections 4401 to 4485 of Title 42, The Public Health and Welfare, amending this section, sections 5064 and 5708 of this title, sections 1706e, 1709, 1715 l  of Title 12, Banks and Banking, sections 241–1, 646 and 758 of Title 20, Education, section 1820 [now 3720] of Title 38, Veterans’ Benefits, section 461 of former Title 40, Public Buildings, Property, and Works, section 1681 note of Title 42, repealing sections 1855 to 1855g, 1855aa, 1855aa note, 1855bb to 1855ii, 1855aaa, 1855aaa note, 1855bbb to 1855nnn of Title 42, and  section 1926 of Title 7 , Agriculture, and enacting provisions set out as notes under section 4401 and  section 4434 of Title 42 ] shall take effect immediately upon its enactment [ Dec. 31, 1970 ], except that sections 226(b), 237, 241, 252(a), and 254 [sections 4436(b), 4456, 4460, 4482(a), and 4484 of Title 42, respectively] shall take effect as of  August 1, 1969 , and sections 231, 232, and 233 [sections 4451, 4452 of Title 42 and amendments to section 1820 [now 3720] of Title 38, respectively] shall take effect as of  April 1, 1970 .”\nPub. L. 88–272, title II, §\u202f208(b) ,  Feb. 26, 1964 ,  78 Stat. 43 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to losses sustained after  December 31, 1963 , in taxable years ending after such date.”\nPub. L. 88–348, §\u202f3(b) ,  June 30, 1964 ,  78 Stat. 238 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply in respect of losses sustained in taxable years ending after  December 31, 1958 .”\nPub. L. 87–426, §\u202f2(b) ,  Mar. 31, 1962 ,  76 Stat. 51 , provided that:  “The amendments made by this section [amending this section] shall be effective with respect to any disaster occurring after  December 31, 1961 .”\nPub. L. 85–866, title I, §\u202f1(c) ,  Sept. 2, 1958 ,  72 Stat. 1606 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “Except as otherwise expressly provided— \n “(1)  amendments made by this title to subtitle A of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to income taxes) [enacting  section 558 of this title  and amending this section and sections 152, 166, 168, 170, 172, 213, 337, 404, 421, 535, 545, 556, 582, 611, 613, 851, 1015, 1031, 1033, 1034, 1053, 1232, 1233, 1234, 1237, 1341, and 1347 of this title] shall apply to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 ; and \n \n “(2)  amendments made by this title to subtitle F of such Code (relating to procedure and administration) [enacting sections 7513 and 7514 of this title and amending sections 6013, 6015, 6212, 6325, 6338, 6339, 6501, 6504, 6511, 6601, 6652, 6653, 6851, 6871, 7213, 7324, 7325, and 7422 of this title] shall take effect as of  August 17, 1954 , and such subtitle, as so amended, shall apply as provided in section 7851 of the Internal Revenue Code of 1986”.\nAmendment by  section 57(c)(1) of Pub. L. 85–866  applicable with respect to taxable years beginning after  Sept. 2, 1958 , see  section 57(d) of Pub. L. 85–866 , set out as a note under  section 243 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f711(c)(2)(B) ,  July 18, 1984 ,  98 Stat. 945 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of taxable years beginning before  January 1, 1984 — \n “(i)  For purposes of paragraph (1)(B) of section 165(h) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], adjusted gross income shall be determined without regard to the application of section 1231 of such Code to any gain or loss from an involuntary conversion of property described in subsection (c)(3) of section 165 of such Code arising from fire, storm, shipwreck, or other casualty or from theft. \n \n “(ii)  Section 1231 of such Code shall be applied after the application of paragraph (1) of section 165(h) of such Code.”\nPub. L. 103–66, title XIII, §\u202f13224 ,  Aug. 10, 1993 ,  107 Stat. 485 , provided that: \n “(a)   General Rule .— For purposes of chapter 1 of the Internal Revenue Code of 1986— “(1)  any FSLIC assistance with respect to any loss of principal, capital, or similar amount upon the disposition of any asset shall be taken into account as compensation for such loss for purposes of section 165 of such Code, and \n \n “(2)  any FSLIC assistance with respect to any debt shall be taken into account for purposes of section 166, 585, or 593 of such Code in determining whether such debt is worthless (or the extent to which such debt is worthless) and in determining the amount of any addition to a reserve for bad debts arising from the worthlessness or partial worthlessness of such debts. \n \n \n “(b)   FSLIC Assistance .— For purposes of this section, the term ‘FSLIC assistance’ means any assistance (or right to assistance) with respect to a domestic building and loan association (as defined in section 7701(a)(19) of such Code without regard to subparagraph (C) thereof) under section 406(f) of the National Housing Act [former  12 U.S.C. 1729(f) ] or [former] section 21A of the Federal Home Loan Bank Act [ 12 U.S.C. 1441a ] (or under any similar provision of law). \n \n “(c)   Effective Date.— “(1)   In general .— Except as otherwise provided in this subsection— “(A)  The provisions of this section shall apply to taxable years ending on or after  March 4, 1991 , but only with respect to FSLIC assistance not credited before  March 4, 1991 . \n \n “(B)  If any FSLIC assistance not credited before  March 4, 1991 , is with respect to a loss sustained or charge-off in a taxable year ending before  March 4, 1991 , for purposes of determining the amount of any net operating loss carryover to a taxable year ending on or after  March 4, 1991 , the provisions of this section shall apply to such assistance for purposes of determining the amount of the net operating loss for the taxable year in which such loss was sustained or debt written off. Except as provided in the preceding sentence, this section shall not apply to any FSLIC assistance with respect to a loss sustained or charge-off in a taxable year ending before  March 4, 1991 . \n \n \n “(2)   Exceptions .— The provisions of this section shall not apply to any assistance to which the amendments made by section 1401(a)(3) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 [ Pub. L. 101–73 , amending  section 597 of this title  and repealing provisions set out as a note under  section 597 of this title ] apply.”\nPub. L. 100–647, title I, §\u202f1009(d)(4) ,  Nov. 10, 1988 ,  102 Stat. 3450 , provided that:  \n “If on the date of the enactment of this Act [ Nov. 10, 1988 ] (or at any time before the date 1 year after such date of enactment) credit or refund of any overpayment of tax attributable to amendments made by section 905 of the Reform Act [ section 905 of Pub. L. 99–514 , amending this section and  section 451 of this title ] or by this subsection [amending this section and  section 451 of this title  and provisions set out as a note under  section 451 of this title ] (or the assessment of any underpayment of tax so attributable) is barred by any law or rule of law— \n “(A)  credit or refund of any such overpayment may nevertheless be made if claim therefore [sic] is filed before the date 1 year after such date of enactment, and \n \n “(B)  assessment of any such underpayment may nevertheless be made if made before the date 1 year after such date of enactment.”\nPub. L. 99–514, title II, §\u202f243 ,  Oct. 22, 1986 ,  100 Stat. 2182 , as amended by  Pub. L. 100–647, title I, §\u202f1002(j) ,  Nov. 10, 1988 ,  102 Stat. 3371 , provided that: \n “(a)   Bus Operating Authority.— “(1)   In general .— Subject to the modifications contained in paragraph (2), section 266 of the Economic Recovery Tax Act of 1981 [ section 266 of Pub. L. 97–34 , set out below] shall be applied as if the term ‘motor carrier operating authority’ included a bus operating authority. \n \n “(2)   Modifications .— For purposes of paragraph (1), section 266 of such Act shall be applied— “(A)  by substituting ‘ November 19, 1982 ’ for ‘ July 1, 1980 ’ each place it appears, and \n \n “(B)  by substituting ‘November 1982’ for ‘July 1980’ in subsection (a) thereof. \n \n \n “(3)   Bus operating authority defined .— For purposes of this subsection and section 266 of such Act, the term ‘bus operating authority’ means— “(A)  a certificate or permit held by a motor common or contract carrier of passengers which was issued pursuant to subchapter II of chapter 109 of title 49, United States Code, and \n \n “(B)  a certificate or permit held by a motor carrier authorizing the transportation of passengers, as a common carrier, over regular routes in intrastate commerce which was issued by the appropriate State agency. \n \n \n \n “(b)   Freight Forwarder Operating Authority.— “(1)   In general .— Subject to the modifications contained in paragraph (2), section 266 of the Economic Recovery Tax Act of 1981 [ section 266 of Pub. L. 97–34 , set out below] shall be applied as if subsection (b) thereof contained ‘or a freight forwarder’ after ‘contract carrier of property’. \n \n “(2)   Modifications .— The modifications referred to in this paragraph are: “(A)  60- month period .— The 60-month period referred to in section 266(a) of such Act shall begin with the later of— “(i)  the deregulation month, or \n \n “(ii)  at the election of the taxpayer, the 1st month of the taxpayer’s 1st taxable year beginning after the deregulation month. \n \n \n “(B)   Authority must be held as of beginning of 60-month period .— A motor carrier operating authority shall not be taken into account unless such authority is held by the taxpayer at the beginning of the 60-month period applicable to the taxpayer under subparagraph (A). \n \n “(C)   Adjusted basis not to exceed adjusted basis at beginning of 60-month period .— The adjusted basis taken into account with respect to any motor carrier operating authority shall not exceed the adjusted basis of such authority as of the beginning of the 60-month period applicable to the taxpayer under subparagraph (A). \n \n \n “(3)   Deregulation month .— For purposes of this section, the term ‘deregulation month’ means the month in which the Secretary of the Treasury or his delegate determines that a Federal law has been enacted which deregulates the freight forwarding industry. \n \n \n “(c)   Special Rule for Motor Carrier Operating Authority .— In the case of a corporation which was incorporated on  December 29, 1969 , in the State of Delaware, notwithstanding any other provision of law, there shall be allowed as a deduction for the taxable year of the taxpayer beginning in 1980 an amount equal to $2,705,188 for its entire loss due to a decline in value of its motor carrier operating authority by reason of deregulation. \n \n “(d)   Application of Section  334(b)(2).— For purposes of subsections (a) and (b), the reference to section 334(b)(2) in section 266(c)(2)(A)(ii) of the Economic Recovery Tax Act of 1981 [ section 266(c)(2)(A)(ii) of Pub. L. 97–34 , set out below] shall be a reference to such section as in effect before its repeal. \n \n “(e)   Effective Dates.— “(1)   Bus operating authority.— “(A)   In general .— Subsection (a) shall apply to taxable years ending after  November 18, 1982 . \n \n “(B)   Statute of limitations .— If refund or credit of any overpayment of tax resulting from subsection (a) is prevented at any time on or before the date which is 1 year after the date of the enactment of this Act [ Oct. 22, 1986 ] by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of such subsection) may, notwithstanding such law or rule of law, be made or allowed if claim therefore [sic] is filed on or before the date which is 18 months after such date of enactment. \n \n \n “(2)   Freight forwarder operating authority .— Subsection (b) shall apply to taxable years ending after the month preceding the deregulation month.”\nPub. L. 97–34, title II, §\u202f266 ,  Aug. 13, 1981 ,  95 Stat. 265 , as amended by  Pub. L. 97–424, title V, §\u202f517(a) ,  Jan. 6, 1983 ,  96 Stat. 2183 ;  Pub. L. 97–448, title I, §\u202f102(n) ,  Jan. 12, 1983 ,  96 Stat. 2374 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule.— For purposes of chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [this chapter], in computing the taxable income of a taxpayer who, on  July 1, 1980 , held one or more motor carrier operating authorities, an amount equal to the aggregate adjusted basis of all motor carrier operating authorities held by the taxpayer on  July 1, 1980 , or acquired subsequent thereto pursuant to a binding contract in effect on  July 1, 1980 , shall be allowed as a deduction ratably over a period of 60 months. Such 60-month period shall begin with the month of July 1980 (or if later, the month in which acquired), or at the election of the taxpayer, the first month of the taxpayer’s first taxable year beginning after  July 1, 1980 . \n \n “(b)   Definition of Motor Carrier Operating Authority.— For purposes of this section, the term ‘motor carrier operating authority’ means a certificate or permit held by a motor common or contract carrier of property and issued pursuant to subchapter II of chapter 109 of title 49 of the United States Code. \n \n “(c)   Special Rules.— “(1)   Adjusted basis.— For purposes of the Internal Revenue Code of 1986, proper adjustments shall be made in the adjusted basis of any motor carrier operating authority held by the taxpayer on  July 1, 1980 , for the amounts allowable as a deduction under this section. \n \n “(2)   Certain stock acquisitions.— “(A)   In general.— Under regulations prescribed by the Secretary of the Treasury or his delegate, and at the election of the holder of the authority, in any case in which a corporation— “(i)  on or before  July 1, 1980  (or after such date pursuant to a binding contract in effect on such date), acquired stock in a corporation which held, directly or indirectly, any motor carrier operating authority at the time of such acquisition, and \n \n “(ii)  would have been able to allocate to the basis of such authority that portion of the acquiring corporation’s cost basis in such stock attributable to such authority if the acquiring corporation had received such authority in the liquidation of the acquired corporation immediately following such acquisition and such allocation would have been proper under section 334(b)(2) of such Code, \n \n\n \u2001\u2001the holder of the authority may, for purposes of this section, allocate a portion of the basis of the acquiring corporation in the stock of the acquired corporation to the basis of such authority in such manner as the Secretary may prescribe in such regulations. \n \n “(B)   Treatment of certain noncorporate taxpayers .— Under regulations prescribed by the Secretary of the Treasury or his delegate, and at the election of the holder of the authority, in any case in which— “(i)  a noncorporate taxpayer or group of noncorporate taxpayers on or before  July 1, 1980 , acquired in one purchase stock in a corporation which held, directly or indirectly, any motor carrier operating authority at the time of such acquisition, and \n \n “(ii)  the acquisition referred to in clause (i) would have satisfied the requirements of subparagraph (A) if the stock had been acquired by a corporation, \n \n\n \u2001\u2001then, for purposes of subparagraphs (A) and (C), the noncorporate taxpayer or group of noncorporate taxpayers referred to in clause (i) shall be treated as a corporation. The preceding sentence shall apply only if such noncorporate taxpayer (or group of noncorporate taxpayers) on  July 1, 1980 , held stock constituting control (within the meaning of section 368(c) of the Internal Revenue Code of 1986) of the corporation holding (directly or indirectly) the motor carrier operating authority. \n \n “(C)   Adjustment to basis.— Under regulations prescribed by the Secretary of the Treasury or his delegate, proper adjustment shall be made to the basis of the stock or other assets in the manner provided by such regulations to take into account any allocation under subparagraph (A). \n \n \n “(3)   Section 381 of the internal revenue code of 1986 to apply.— For purposes of section 381 of the Internal Revenue Code of 1986, any item described in this section shall be treated as an item described in subsection (c) of such section 381. \n \n \n “(d)   Effective Date.— The provisions of this section shall apply to taxable years ending after  June 30, 1980 .”\n[ Pub. L. 97–424, title V, §\u202f517(b) ,  Jan. 6, 1983 ,  96 Stat. 2184 , provided that:  “The amendment made by subsection (a) [adding subsec. (c)(2)(B) of this note] shall apply to taxable years ending after  July 30, 1980 .” \n]\nPub. L. 94–455, title XXI, §\u202f2103 ,  Oct. 4, 1976 ,  90 Stat. 1900 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Application of Section .— This section shall apply to any individual— “(1)  who was allowed a deduction under section 165 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to losses) for a loss attributable to a disaster occurring during calendar year 1972 which was determined by the President, under section 102 of the Disaster Relief Act of 1970, to warrant disaster assistance by the Federal Government. \n \n “(2)  who in connection with such disaster— “(A)  received income in the form of cancellation of a disaster loan under section 7 of the Small Business Act [ section 636 of Title 15 , Commerce and Trade] or an emergency loan under subtitle C of the Consolidated Farm and Rural Development Act [section 1961 et seq. of Title 7, Agriculture], or \n \n “(B)  received income in the form of compensation (not taken into account in computing the amount of the deduction) for such loss in settlement of any claim of the taxpayer against a person for that person’s liability in tort for the damage or destruction of that taxpayer’s property in connection with the disaster, and \n \n \n “(3)  who elects (at such time and in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe) to take the benefits of this section. \n \n \n “(b)   Effect of Election .— In the case of any individual to whom this section applies— “(1)  the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for the taxable year in which the income taken into account is received or accrued which is attributable to such income shall not exceed the additional tax under such chapter which would have been payable for the year in which the deduction for the loss was taken if such deduction had not been taken for such year, \n \n “(2)  any amount of tax imposed by chapter 1 attributable to the income taken into account which, on  October 1, 1975 , was unpaid may be paid in 3 equal annual installments (with the first such installment due and payable on  April 15, 1977 ), and \n \n “(3)  no interest on any deficiency shall be payable for any period before  April 16, 1977 , to the extent such deficiency is attributable to the receipt of such compensation, and no interest on any installment referred to in paragraph (2) shall be payable for any period before the due date of such installment. \n \n \n “(c)   Income Taken Into Account .— For purposes of this section, the income taken into account is— “(1)  in the case of an individual described in subsection (a)(2)(A), the amount of income (not in excess of $5,000) attributable to the cancellation of a disaster loan under section 7 of the Small Business Act or an emergency loan under subtitle C of the Consolidated Farm and Rural Development Act received by reason of the disaster described in subsection (a)(1), or \n \n “(2)  in the case of an individual described in subsection (a)(2)(B), the amount of compensation (not in excess of $5,000) for the loss in settlement of any claim of the taxpayer against a person for that person’s liability in tort for the damage or destruction of that taxpayer’s property in connection with the disaster described in subsection (a)(1). \n \n \n “(d)   Phaseout Where Adjusted Gross Income Exceeds  $15,000.— If for the taxable year for which the deduction for the loss was taken the individual’s adjusted gross income exceeded $15,000, the $5,000 limit set forth in paragraph (1) or (2) of subsection (c) (whichever applies) shall be reduced by one dollar for each full dollar that such adjusted gross income exceeds $15,000. In the case of a married individual filing a separate return, the preceding sentence shall be applied by substituting ‘$7,500’ for ‘$15,000’. \n \n “(e)   Statute of Limitations .— If refund or credit of any overpayment of income tax resulting from an election made under this section is prevented on the date of the enactment of this Act [ Oct. 4, 1976 ], or at any time within one year after such date, by the operation of any law, or rule of law, refund or credit of such overpayment (to the extent attributable to such election) may, nevertheless, be made or allowed if claim therefor is filed within one year after such date. If the taxpayer makes an election under this section and if assessment of any deficiency for any taxable year resulting from such election is prevented on the date of the enactment of this Act [ Oct. 4, 1976 ], or at any time within one year after such date, by the operation of any law or rule of law, such assessment (to the extent attributable to such election) may, nevertheless, be made if made within one year after such date.”\nPub. L. 91–677, §\u202f1(b)(2) ,  Jan. 12, 1971 ,  84 Stat. 2061 , authorized refund or credit of overpayment attributable to the amendments made by subsec. (a) to subsec. (i) of this section if claim therefor was filed after  Jan. 12, 1971 , and before  July 1, 1971 , without interest for any period before  Jan. 1, 1972 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There shall be allowed as a deduction any debt which becomes worthless within the taxable year.\nWhen satisfied that a debt is recoverable only in part, the Secretary may allow such debt, in an amount not in excess of the part charged off within the taxable year, as a deduction.\nFor purposes of subsection (a), the basis for determining the amount of the deduction for any bad debt shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.\nThis section shall not apply to a debt which is evidenced by a security as defined in section 165(g)(2)(C).\n1988—Subsec. (d)(1)(A).  Pub. L. 100–647, §\u202f1008(d)(1) , substituted “subsection (a)” for “subsections (a) and (c)”.\nSubsecs. (f), (g).  Pub. L. 100–647, §\u202f1008(d)(2) , made clarifying amendment to directory language of  Pub. L. 99–514, §\u202f805(b) , see 1986 Amendment note below.\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f805(a) , struck out subsec. (c), reserve for bad debts, which read as follows: “In lieu of any deduction under subsection (a), there shall be allowed (in the discretion of the Secretary) a deduction for a reasonable addition to a reserve for bad debts.”\nSubsec. (f).  Pub. L. 99–514, §\u202f805(b) , as amended by  Pub. L. 100–647, §\u202f1008(d)(2) , redesignated subsec. (g) as (f) and struck out former subsec. (f) which related to reserve for certain guaranteed debt obligations, par. (1) thereof providing for allowance of deduction, par. (2) disallowing deduction in other cases, par. (3) relating to opening balance of reserve, and par. (4) relating to suspense account.\nSubsec. (g).  Pub. L. 99–514, §\u202f805(b) , as amended by  Pub. L. 100–647, §\u202f1008(d)(2) , redesignated subsec. (g) as (f).\nPub. L. 99–514, §\u202f901(d)(4)(A) , struck out pars. (3) and (4) which read as follows:\n“(3) For special rule for bad debt reserves of certain mutual savings banks, domestic building and loan associations, and cooperative banks, see section 593.\n“(4) For special rule for bad debt reserves of banks, small business investment-companies, etc., see sections 585 and 586.”\n1984—Subsec. (d)(1)(B).  Pub. L. 98–369  substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1976—Subsecs. (a)(2), (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(1)(B).  Pub. L. 94–455, §\u202f1401(b)(1)(A) , (2), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977, and “9 months” would be changed to “1 year” for taxable years beginning after  Dec. 31, 1977 .\nSubsec. (f).  Pub. L. 94–455 , §§\u202f605(a), 1906(b)(13)(A), redesignated subsec. (g) as (f) and struck out “or his delegate” after “Secretary” in pars. (1), (3) and (4)(D). Former subsec. (f), which related to treatment of payments made by guarantors of certain noncorporate obligations, was struck out.\nSubsecs. (g), (h).  Pub. L. 94–455, §\u202f605(a) , redesignated subsecs. (g) and (h) as (f) and (g), respectively.\n1969—Subsec. (h)(4).  Pub. L. 91–172  added par. (4).\n1966—Subsecs. (g), (h).  Pub. L. 89–722  added subsec. (g) and redesignated former subsec. (g) as (h).\n1958—Subsec. (d)(2)(A).  Pub. L. 85–866  substituted “a trade or business of the taxpayer” for “a taxpayer’s trade or business”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VIII, §\u202f805(d) ,  Oct. 22, 1986 ,  100 Stat. 2362 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 81, 108, 461, and 805 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Change in method of accounting .— In the case of any taxpayer who maintained a reserve for bad debts for such taxpayer’s last taxable year beginning before  January 1, 1987 , and who is required by the amendments made by this section to change its method of accounting for any taxable year— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as made with the consent of the Secretary, and \n \n “(C)  the net amount of adjustments required by section 481 of the Internal Revenue Code of 1986 to be taken into account by the taxpayer shall— “(i)  in the case of a taxpayer maintaining a reserve under section 166(f), be reduced by the balance in the suspense account under section 166(f)(4) of such Code as of the close of such last taxable year, and \n \n “(ii)  be taken into account ratably in each of the first 4 taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title IX, §\u202f901(e) ,  Oct. 22, 1986 ,  100 Stat. 2380 , provided that:  “The amendments made by this section [amending this section and sections 172, 291, 582, 585, 593, 596, 856, 1277, and 1361 of this title and repealing  section 586 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 98–369, div. A, title X, §\u202f1001(e) ,  July 18, 1984 ,  98 Stat. 1012 , provided that:  “The amendments made by this section [amending this section and sections 341, 402, 403, 423, 582, 584, 631, 642, 702, 818, 852, 856, 857, 1222, 1223, 1231, 1232, 1233, 1234, 1235, 1246, 1247, 1248, 1251, and 1278 of this title] shall apply to property acquired after  June 22, 1984 , and before  January 1, 1988 .”\nPub. L. 94–455, title VI, §\u202f605(c) ,  Oct. 4, 1976 ,  90 Stat. 1575 , provided that:  “The amendments made by this section [amending this section and  section 81 of this title ] shall apply to guarantees made after  December 31, 1975 , in taxable years beginning after such date.”\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  July 11, 1969 , see  section 431(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 585 of this title .\nPub. L. 89–722, §\u202f2 ,  Nov. 2, 1966 ,  80 Stat. 1152 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  Except as provided in subsections (b) and (c), the amendments made by the first section of this Act [amending this section and  section 81 of this title ] shall apply to taxable years ending after  October 21, 1965 . \n \n “(b)  If— “(1)  the taxpayer before  October 22, 1965 , claimed a deduction, for a taxable year ending before such date, under section 166(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for an addition to a reserve for bad debts on account of debt obligations described in section 166(g)(1)(A) of such Code (as amended by the first section of this Act), and \n \n “(2)  the assessment of a deficiency of the tax imposed by chapter 1 of such Code for such taxable year and each subsequent taxable year ending before  October 22, 1965 , is not prevented on  December 31, 1966 , by the operation of any law or rule of law, \n \n\n then such deduction on account of such debt obligations shall be allowed for each such taxable year under such section 166(c) to the extent that the deduction would have been allowable under the provisions of such section 166(g)(1)(A) if such provisions applied to such taxable years. \n \n “(c)  Section 166(g)(2) of the Internal Revenue Code of 1986 (as amended by the first section of this Act) shall apply to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 89–722, §\u202f1(c) ,  Nov. 2, 1966 ,  80 Stat. 1152 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If the taxpayer establishes a reserve described in section 166(g)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a) of this section) for a taxable year ending after  October 21, 1965 , and beginning before  August 2, 1966 , the establishment of such reserve shall not be considered as a change in method of accounting for purposes of section 446(e) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'For determination of depreciation deduction in case of property to which section 168 applies, see section 168.\nThe basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property.\nIn the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant. In the case of property held in trust, the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each. In the case of an estate, the allowable deduction shall be apportioned between the estate and the heirs, legatees, and devisees on the basis of the income of the estate allocable to each.\nNo depreciation deduction shall be allowed under this section (and no depreciation or amortization deduction shall be allowed under any other provision of this subtitle) to the taxpayer for any term interest in property for any period during which the remainder interest in such property is held (directly or indirectly) by a related person.\nThis subsection shall not apply to any term interest to which section 273 applies.\nThis subsection shall not apply to the holder of the dividend rights which were separated from any stripped preferred stock to which section 305(e)(1) applies.\nIf, but for this subsection, a depreciation or amortization deduction would be allowable to any person with respect to any term interest in property, the principles of subsection (d) shall apply to such person with respect to such term interest.\nThe term “term interest in property” has the meaning given such term by section 1001(e)(2).\nThe term “related person” means any person bearing a relationship to the taxpayer described in subsection (b) or (e) of section 267.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations preventing avoidance of this subsection through cross-ownership arrangements or otherwise.\nIf a depreciation deduction is allowable under subsection (a) with respect to any computer software, such deduction shall be computed by using the straight line method and a useful life of 36 months.\nFor purposes of this section, the term “computer software” has the meaning given to such term by section 197(e)(3)(B); except that such term shall not include any such software which is an amortizable section 197 intangible.\nIn the case of computer software which would be tax-exempt use property as defined in subsection (h) of section 168 if such section applied to computer software, the useful life under subparagraph (A) shall not be less than 125 percent of the lease term (within the meaning of section 168(i)(3)).\nIf a depreciation deduction is allowable under subsection (a) with respect to any property described in subparagraph (B), (C), or (D) of section 197(e)(4), such deduction shall be computed in accordance with regulations prescribed by the Secretary. If such property would be tax-exempt use property as defined in subsection (h) of section 168 if such section applied to such property, the useful life under such regulations shall not be less than 125 percent of the lease term (within the meaning of section 168(i)(3)).\nIf a depreciation deduction is allowable under subsection (a) with respect to any right described in section 197(e)(6), such deduction shall be computed by using the straight line method and a useful life of 108 months.\nParagraph (1)(D) shall not apply with respect to any property which had a cost basis of $100,000 or less.\nFor purposes of this subsection, except as provided in regulations, the term “recomputation year” means, with respect to any property, the 3d and the 10th taxable years beginning after the taxable year in which the property was placed in service, unless the actual income earned in connection with the property for the period before the close of such 3d or 10th taxable year is within 10 percent of the income earned in connection with the property for such period which was taken into account under paragraph (1)(A).\nFor purposes of this subsection, in the case of television and motion picture films, the income from the property shall include income from the exploitation of characters, designs, scripts, scores, and other incidental income associated with such films, but only to the extent that such income is earned in connection with the ultimate use of such items by, or the ultimate sale of merchandise to, persons who are not related persons (within the meaning of section 267(b)) to the taxpayer.\nFor purposes of subtitle F (other than sections 6654 and 6655), any interest required to be paid by the taxpayer under paragraph (1) for any recomputation year shall be treated as an increase in the tax imposed by this chapter for such year.\nFor purposes of this subsection, the income with respect to any property shall be the taxpayer’s gross income from such property.\nFor purposes of paragraph (2), determinations of the amount of income earned in connection with any property shall be made in the same manner as for purposes of applying the income forecast method; except that any income from the disposition of such property shall be taken into account.\nRules similar to the rules of section 460(b)(4) shall apply for purposes of this subsection.\nFor purposes of determining the depreciation deduction allowable with respect to a property under this subsection, the taxpayer may include participations and residuals with respect to such property in the adjusted basis of such property for the taxable year in which the property is placed in service, but only to the extent that such participations and residuals relate to income estimated (for purposes of this subsection) to be earned in connection with the property before the close of the 10th taxable year referred to in paragraph (1)(A).\nFor purposes of this paragraph, the term “participations and residuals” means, with respect to any property, costs the amount of which by contract varies with the amount of income earned in connection with such property.\nIf the adjusted basis of any property is determined under this paragraph, paragraph (4) shall be applied by substituting “for each taxable year in such period” for “for such period”.\nNotwithstanding subparagraph (A), the taxpayer may exclude participations and residuals from the adjusted basis of such property and deduct such participations and residuals in the taxable year that such participations and residuals are paid.\nDeductions computed in accordance with this paragraph shall be allowable notwithstanding paragraph (1)(B), section 263, 263A, 404, 419, or 461(h).\nThe Secretary shall prescribe appropriate adjustments to the basis of property and to the look-back method for the additional amounts allowable as a deduction solely by reason of this paragraph.\nExcept as provided in this paragraph, no depreciation or amortization deduction shall be allowed with respect to any expense to which subparagraph (A) applies.\nThe term “applicable musical property” means any musical composition (including any accompanying words), or any copyright with respect to a musical composition, which is property to which this subsection applies without regard to this paragraph.\nAn election under this paragraph shall be made at such time and in such form as the Secretary may prescribe and shall apply to all applicable musical property placed in service during the taxable year for which the election applies.\nAn election may not be made under this paragraph for any taxable year beginning after  December 31, 2010 .\nAny geological and geophysical expenses paid or incurred in connection with the exploration for, or development of, oil or gas within the United States (as defined in section 638) shall be allowed as a deduction ratably over the 24-month period beginning on the date that such expense was paid or incurred.\nFor purposes of paragraph (1), any payment paid or incurred during the taxable year shall be treated as paid or incurred on the mid-point of such taxable year.\nExcept as provided in this subsection, no depreciation or amortization deduction shall be allowed with respect to such payments.\nIf any property with respect to which geological and geophysical expenses are paid or incurred is retired or abandoned during the 24-month period described in paragraph (1), no deduction shall be allowed on account of such retirement or abandonment and the amortization deduction under this subsection shall continue with respect to such payment.\nIn the case of a major integrated oil company, paragraphs (1) and (4) shall be applied by substituting “7-year” for “24 month”.\nSection 263A(i)(2), referred to in subsec. (g)(8)(C)(ii)(II), was redesignated section 263A(j)(2) by  Pub. L. 115–97, title I, §\u202f13102(b)(1) ,  Dec. 22, 2017 ,  131 Stat. 2103 .\n2007—Subsec. (g)(8)(C)(ii)(II).  Pub. L. 110–172  substituted “section 263A(i)(2)” for “section 263A(j)(2)”.\nSubsec. (h)(5)(A).  Pub. L. 110–140  substituted “7-year” for “5-year”.\n2006—Subsec. (g)(8).  Pub. L. 109–222, §\u202f207(a) , added par. (8).\nSubsec. (h)(5).  Pub. L. 109–222, §\u202f503(a) , added par. (5).\n2005—Subsec. (f)(3).  Pub. L. 109–135  substituted “section 197(e)(6)” for “section 197(e)(7)”.\nSubsecs. (h), (i).  Pub. L. 109–58  added subsec. (h) and redesignated former subsec. (h) as (i).\n2004—Subsec. (f)(1)(C).  Pub. L. 108–357, §\u202f847(b)(1) , added subpar. (C).\nSubsec. (f)(2).  Pub. L. 108–357, §\u202f847(b)(2) , inserted at end “If such property would be tax-exempt use property as defined in subsection (h) of section 168 if such section applied to such property, the useful life under such regulations shall not be less than 125 percent of the lease term (within the meaning of section 168(i)(3)).”\nSubsec. (g)(5)(E) to (G).  Pub. L. 108–357, §\u202f242(b) , added subpar. (E) and redesignated former subpars. (E) and (F) as (F) and (G), respectively.\nSubsec. (g)(7).  Pub. L. 108–357, §\u202f242(a) , added par. (7).\n1997—Subsec. (g)(6).  Pub. L. 105–34  added par. (6).\n1996—Subsecs. (g), (h).  Pub. L. 104–188  added subsec. (g) and redesignated former subsec. (g) as (h).\n1993—Subsec. (c).  Pub. L. 103–66, §\u202f13261(b)(2) , amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011 for the purpose of determining the gain on the sale or other disposition of such property.”\nSubsec. (e)(2).  Pub. L. 103–66, §\u202f13206(c)(2) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “This subsection shall not apply to any term interest to which section 273 applies.”\nSubsec. (f).  Pub. L. 103–66, §\u202f13261(b)(1) , added subsec. (f). Former subsec. (f) redesignated (g).\nSubsec. (g).  Pub. L. 103–66, §\u202f13261(b)(1) , (f)(1), redesignated subsec. (f) as (g) and amended heading and text generally, designating existing provisions of text as par. (1) and adding par. (2).\n1990—Subsec. (b).  Pub. L. 101–508, §\u202f11812(a) , added subsec. (b) and struck out former subsec. (b) “Use of certain methods and rates” which read as follows: “For taxable years ending after  December 31, 1953 , the term ‘reasonable allowance’ as used in subsection (a) shall include (but shall not be limited to) an allowance computed in accordance with regulations prescribed by the Secretary, under any of the following methods:\n“(1) the straight line method,\n“(2) the declining balance method, using a rate not exceeding twice the rate which would have been used had the annual allowance been computed under the method described in paragraph (1),\n“(3) the sum of the years-digits method, and\n“(4) any other consistent method productive of an annual allowance which, when added to all allowances for the period commencing with the taxpayer’s use of the property and including the taxable year, does not, during the first two-thirds of the useful life of the property, exceed the total of such allowances which would have been used had such allowances been computed under the method described in paragraph (2).\nNothing in this subsection shall be construed to limit or reduce an allowance otherwise allowable under subsection (a).”\nSubsec. (c).  Pub. L. 101–508, §\u202f11812(a)(1) , redesignated subsec. (g) as (c) and struck out former subsec. (c) “Limitations on use of certain methods and rates” which read as follows: “Paragraphs (2), (3), and (4) of subsection (b) shall apply only in the case of property (other than intangible property) described in subsection (a) with a useful life of 3 years or more—\n“(1) the construction, reconstruction, or erection of which is completed after  December 31, 1953 , and then only to that portion of the basis which is properly attributable to such construction, reconstruction, or erection after  December 31, 1953 , or\n“(2) acquired after  December 31, 1953 , if the original use of such property commences with the taxpayer and commences after such date.\nParagraphs (2), (3), and (4) of subsection (b) shall not apply to any motion picture film, video tape, or sound recording.”\nSubsec. (d).  Pub. L. 101–508, §\u202f11812(a)(1) , redesignated subsec. (h) as (d) and struck out former subsec. (d) “Agreement as to useful life on which depreciation rate is based” which read as follows: “Where, under regulations prescribed by the Secretary, the taxpayer and the Secretary have, after  August 16, 1954 , entered into an agreement in writing specifically dealing with the useful life and rate of depreciation of any property, the rate so agreed upon shall be binding on both the taxpayer and the Secretary in the absence of facts or circumstances not taken into consideration in the adoption of such agreement. The responsibility of establishing the existence of such facts and circumstances shall rest with the party initiating the modification. Any change in the agreed rate and useful life specified in the agreement shall not be effective for taxable years before the taxable year in which notice in writing by certified mail or registered mail is served by the party to the agreement initiating such change. This subsection shall not apply with respect to property to which section 168 applies.”\nSubsec. (e).  Pub. L. 101–508, §\u202f11812(a)(1) , redesignated subsec. (r) as (e) and struck out former subsec. (e) which related to changes in method of depreciation from declining balance method and changes with respect to sections 1245 and 1250 property.\nSubsec. (e)(3)(B).  Pub. L. 101–508, §\u202f11812(b)(1)  substituted “(d)” for “(h)”.\nSubsec. (e)(4)(B).  Pub. L. 101–508, §\u202f11812(b)(1) , substituted “(d)” for “(h)” in heading and text.\nSubsec. (f).  Pub. L. 101–508, §\u202f11812(a)(1) , redesignated subsec. (s) as (f) and struck out former subsec. (f) “Salvage value” which read as follows:\n“(1)  General rule .—Under regulations prescribed by the Secretary, a taxpayer may, for purposes of computing the allowance under subsection (a) with respect to personal property, reduce the amount taken into account as salvage value by an amount which does not exceed 10 percent of the basis of such property (as determined under subsection (g) as of the time as of which such salvage value is required to be determined).\n“(2)  Personal property defined .—For purposes of this subsection, the term ‘personal property’ means depreciable personal property (other than livestock) with a useful life of 3 years or more acquired after  October 16, 1962 .”\nSubsecs. (g), (h).  Pub. L. 101–508, §\u202f11812(a)(1) , redesignated subsecs. (g) and (h) as (c) and (d), respectively.\nSubsec. (j).  Pub. L. 101–508, §\u202f11812(a)(1) , struck out subsec. (j) which related to special rules for section 1250 property including residential rental property and change in method of depreciation.\nSubsec. (k).  Pub. L. 101–508, §\u202f11812(a)(1) , struck out subsec. (k) which related to depreciation of expenditures to rehabilitate low-income rental housing.\nSubsec. ( l ).  Pub. L. 101–508, §\u202f11812(a)(1) , struck out subsec. ( l ) which related to reasonable allowance in case of property of certain utilities, pre-1970 public utility property and post-1969 public utility property.\nSubsec. (m).  Pub. L. 101–508, §\u202f11812(a)(1) , struck out subsec. (m) which related to class lives.\nSubsec. (p).  Pub. L. 101–508, §\u202f11812(a)(1) , struck out subsec. (p) which related to straight line method for boilers fueled by oil or gas.\nSubsec. (q).  Pub. L. 101–508, §\u202f11812(a)(1) , struck out subsec. (q) which related to retirement or replacement of certain boilers, etc., fueled by oil or gas.\nSubsecs. (r), (s).  Pub. L. 101–508, §\u202f11812(a)(1) , redesignated subsecs. (r) and (s) as (e) and (f), respectively.\n1989—Subsec. (r).  Pub. L. 101–239, §\u202f7645(a) , added subsec. (r).\nPub. L. 101–239, §\u202f7622(b)(1) [(d)(1)] , repealed subsec. (r) which provided that trademark or trade name expenditures were not depreciable.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1002(a)(24) , struck out at end “In the case of recovery property (within the meaning of section 168), the deduction allowable under section 168 shall be deemed to constitute the reasonable allowance provided by this section, except with respect to that portion of the basis of such property to which subsection (k) applies.”\nSubsec. (d).  Pub. L. 100–647, §\u202f1002(a)(31) , substituted “property to which section 168 applies” for “recovery property defined in section 168”.\nSubsec. ( l )(3)(G).  Pub. L. 100–647, §\u202f1002(a)(22) , substituted “section 168(i)(9)(B)” for “section 168(e)(3)(C)” in last sentence.\nSubsecs. (r), (s).  Pub. L. 100–647, §\u202f1002(i)(1) , added subsec. (r) and redesignated former subsec. (r) as (s).\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f1809(d)(1) , inserted “Paragraphs (2), (3), and (4) of subsection (b) shall not apply to any motion picture film, video tape, or sound recording.”\nSubsec. (m)(4).  Pub. L. 99–514, §\u202f201(d)(1) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “This subsection shall not apply with respect to recovery property (within the meaning of section 168) placed in service after  December 31, 1980 .”\nSubsec. (q)(2)(B).  Pub. L. 99–514, §\u202f1511(c)(4) , substituted “at the underpayment rate established under section 6621” for “at the rate determined under section 6621”.\n1984—Subsec. (k)(1), (3)(D).  Pub. L. 98–369  substituted “ January 1, 1987 ” for “ January 1, 1984 ” wherever appearing.\n1983—Subsec. ( l )(3)(G).  Pub. L. 97–424  inserted provision that, for the purposes of this paragraph, rules similar to the rules of  section 168(e)(3)(C) of this title  shall apply.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f203(a) , inserted provision that, in the case of recovery property (within the meaning of section 168), the deduction allowable under section 168 shall be deemed to constitute the reasonable allowance provided by this section, except with respect to that portion of the basis of such property to which subsection (k) applies.\nSubsec. (d).  Pub. L. 97–34, §\u202f203(d) , provided that subsec. (d) did not apply with respect to recovery property defined in section 168.\nSubsec. (k)(2).  Pub. L. 97–34, §\u202f264(a) , substituted “Except as provided in subparagraph (B), the aggregate amount” for “The aggregate amount” in subpar. (A), added subpar. (B), and redesignated former subpar. (B) as (C).\nSubsec. ( l )(3)(C).  Pub. L. 97–34, §\u202f209(d)(3) , inserted “and which is placed in service before  January 1, 1981 ” after “pre-1970 public utility property”.\nSubsec. (m)(4).  Pub. L. 97–34, §\u202f203(b) , added par. (4).\nSubsecs. (n), ( o ).  Pub. L. 97–34, §\u202f212(d)(1) , struck out subsec. (n) which dealt with the use of the straight line method of depreciation in certain cases, and subsec. ( o ) which dealt with the method of depreciation to be used in the case of substantially rehabilitated historic property.\nSubsec. (r).  Pub. L. 97–34, §\u202f203(c)(1) , redesignated subsec. (s) as (r). Former subsec. (r), relating to the retirement-replacement-betterment method of calculating depreciation, was struck out.\nSubsec. (s).  Pub. L. 97–34, §\u202f203(c)(1) , redesignated subsec. (s) as (r).\n1980—Subsec. (k).  Pub. L. 96–541, §\u202f3 , substituted in pars. (1) and (3)(D) “ January 1, 1984 ” for “ January 1, 1982 ” wherever appearing.\nSubsec. (n)(4).  Pub. L. 96–541, §\u202f2(c) , added par. (4).\nSubsec. ( o )(3).  Pub. L. 96–541, §\u202f2(d) , added par. (3).\nSubsecs. (r), (s).  Pub. L. 96–613  added subsec. (r) and redesignated former subsec. (r) as (s).\n1978—Subsec. (i).  Pub. L. 95–600, §\u202f312(c)(4) , struck out subsec. (i) which related to a limitation in the case of property constructed or acquired during the suspension period.\nSubsec. (k)(1), (3)(D).  Pub. L. 95–615  substituted “ January 1, 1979 ” for “ January 1, 1978 ” wherever appearing.\nPub. L. 95–600, §\u202f367 , substituted “ January 1, 1982 ” for “ January 1, 1979 ” wherever appearing.\nSubsec. (n).  Pub. L. 95–600, §\u202f701(f)(4) , in par. (1), substituted “occupied by a certified historic structure (or by any structure in a registered historic district) which is demolished or substantially altered after such date” for “occupied by a certified historic structure (as defined in section 191(d)(1)) which is demolished or substantially altered (other than by virtue of a certified rehabilitation as defined in section 191(d)(3) after such date”, inserted “and” preceding subpar. (B), substituted “means” for “shall mean” in subpar. (B), and inserted provision that “The preceding sentence shall not apply if the last substantial alteration of the structure is a certified rehabilitation.”; in par. (2), substituted heading “Exceptions” for “Exception”, designated existing text as subpar. (A), and added subpar. (B); and added par. (3).\nSubsec. ( o ).  Pub. L. 95–600, §\u202f701(f)(6) , inserted in par. (1) “(other than property with respect to which an amortization deduction has been allowed to the taxpayer under section 191)” after “substantially rehabilitated historic property” and substituted in par. (2) “section 191(d)(4)” for “section 191(d)(3)”.\nSubsec. (p).  Pub. L. 95–618, §\u202f301(d)(3) , added subsec. (p). Former subsec. (p) redesignated (r).\nSubsec. (q).  Pub. L. 95–618, §\u202f301(e)(1) , added subsec. (q).\nSubsec. (r).  Pub. L. 95–618, §\u202f301(d)(3) , redesignated former subsec. (p) as (r).\n1977—Subsec. (k).  Pub. L. 95–171  substituted “ January 1, 1979 ” for “ January 1, 1978 ” wherever appearing in pars. (1) and (3)(D).\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d).  Pub. L. 94–455 , §§\u202f1901(a)(27)(A), 1906(b)(13)(A), substituted “after  August 16, 1954 ” for “after the date of enactment of this title” and struck out “or his delegate” after “Secretary” in first sentence before “shall be binding”.\nSubsec. (e).  Pub. L. 94–455 , §§\u202f202(c)(3), 1906(b)(13)(A), substituted in par. (3) “beginning after  December 31, 1975 ” for “beginning after  July 24, 1969 ” and in pars. (1) to (3) struck out “or his delegate” after “Secretary”.\nSubsec. (f)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f)(2).  Pub. L. 94–455, §\u202f1901(a)(27)(B) , substituted “ October 16, 1962 ” for “the date of enactment of the Revenue Act of 1962”.\nSubsec. (i).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out in pars. (1) and (2) “or his delegate” after “Secretary”.\nSubsec. (j).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out in pars. (1), (4)(B), (5)(C), and (6)(A) “or his delegate” after “Secretary”.\nSubsec. (k)(1).  Pub. L. 94–455 , §§\u202f203(a)(1), 1906(b)(13)(A), substituted reference to  January 1, 1978  for reference to  January 1, 1976  and struck out “or his delegate” after “Secretary”.\nSubsec. (k)(2)(A).  Pub. L. 94–455, §\u202f203(a)(2) , substituted “$20,000” for “$15,000”.\nSubsec. (k)(3)(B).  Pub. L. 94–455 , §§\u202f203(a)(3), 1906(b)(13)(A), substituted “the Leased Housing Program under section 8 of the United States Housing Act of 1937” for “the policies of the Housing and Urban Development Act of 1968” and struck out “or his delegate” after “Secretary”.\nSubsec. (k)(3)(D).  Pub. L. 94–455, §\u202f203(a)(4) , added subpar. (D).\nSubsec. ( l )(3)(F).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. ( l )(4)(A).  Pub. L. 94–455 , §§\u202f1901(a)(27)(C), 1906(b)(13)(A), substituted “before  June 29, 1970 ,” for “within 180 days after the date of the enactment of this subparagraph” and struck out “or his delegate” after “Secretary”.\nSubsec. ( l )(5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (m).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out in pars. (1) and (3) “or his delegate” after “Secretary”.\nSubsec. (n).  Pub. L. 94–455, §\u202f2124(c)(1) , added subsec. (n). Former subsec. (n) redesignated (p).\nSubsec. ( o ).  Pub. L. 94–455, §\u202f2124(d)(1) , added subsec. ( o ).\nSubsec. (p).  Pub. L. 94–455, §\u202f2124(c)(1) , redesignated former subsec. (n) as (p).\n1975—Subsec. (k)(1).  Pub. L. 93–625  substituted “ January 1, 1976 ” for “ January 1, 1975 ”.\n1971—Subsecs. (m), (n).  Pub. L. 92–178  added subsec. (m) and redesignated former subsec. (m) as (n).\n1969—Subsec. (e)(3).  Pub. L. 91–172, §\u202f521(d) , added par. (3).\nSubsecs. (j), (k).  Pub. L. 91–172, §\u202f521(a) , added subsecs. (j) and (k). Former subsec. (j) redesignated (m).\nSubsec. ( l ).  Pub. L. 91–172, §\u202f441(a) , added subsec. ( l ).\nSubsec. (m).  Pub. L. 91–172, §\u202f521(a) , redesignated former subsec. (j) as (m).\n1967—Subsec. (i)(1).  Pub. L. 90–26, §\u202f2(b) , provided that accelerated depreciation was not to apply if the physical construction, reconstruction or erection by any person was begun during the suspension period or begun, pursuant to an order placed during such period, before  May 24, 1967 , subject to the proviso that only that portion of the basis which was properly attributable to construction, reconstruction or erection before  May 24, 1967 , shall be affected by the applicability of the suspension period.\nSubsec. (i)(3).  Pub. L. 90–26, §\u202f1 , substituted “ March 9, 1967 ” for “ December 31, 1967 ”.\n1966—Subsecs. (i), (j).  Pub. L. 89–800  added subsec. (i) and redesignated former subsec. (i) as (j).\n1962—Subsec. (e).  Pub. L. 87–834, §\u202f13(b) , designated existing provisions as par. (1) and added par. (2).\nSubsecs. (f) to (i).  Pub. L. 87–834, §\u202f13(c)(1) , added subsec. (f) and redesignated former subsecs. (f), (g), and (h) as (g), (h), and (i), respectively.\n1958—Subsec. (d).  Pub. L. 85–866  inserted “certified mail or” before “registered mail”.\nPub. L. 110–140, title XV, §\u202f1502(b) ,  Dec. 19, 2007 ,  121 Stat. 1800 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or incurred after the date of the enactment of this Act [ Dec. 19, 2007 ].”\nAmendment by  Pub. L. 110–140  effective on the date that is 1 day after  Dec. 19, 2007 , see  section 1601 of Pub. L. 110–140 , set out as an Effective Date note under  section 1824 of Title 2 , The Congress.\nPub. L. 109–222, title II, §\u202f207(b) ,  May 17, 2006 ,  120 Stat. 351 , provided that:  “The amendments made by this section [amending this section] shall apply to expenses paid or incurred with respect to property placed in service in taxable years beginning after  December 31, 2005 .”\nPub. L. 109–222, title V, §\u202f503(b) ,  May 17, 2006 ,  120 Stat. 355 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or incurred after the date of the enactment of this Act [ May 17, 2006 ].”\nPub. L. 109–58, title XIII, §\u202f1329(c) ,  Aug. 8, 2005 ,  119 Stat. 1020 , provided that:  “The amendments made by this section [amending this section and  section 263A of this title ] shall apply to amounts paid or incurred in taxable years beginning after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 108–357, title II, §\u202f242(c) ,  Oct. 22, 2004 ,  118 Stat. 1439 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  section 847(b)(1) of Pub. L. 108–357  applicable to leases entered into after  Mar. 12, 2004 , and amendment by  section 847(b)(2) of Pub. L. 108–357  applicable to leases entered into after  Oct. 3, 2004 , except that such amendments inapplicable to qualified transportation property, see  section 849 of Pub. L. 108–357 , set out as an Effective Date note under  section 470 of this title .\nPub. L. 105–34, title X, §\u202f1086(c) ,  Aug. 5, 1997 ,  111 Stat. 958 , provided that:  “The amendment made by this section [amending this section and  section 168 of this title ] shall apply to property placed in service after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–188, title I, §\u202f1604(b) ,  Aug. 20, 1996 ,  110 Stat. 1838 , as amended by  Pub. L. 105–206, title VI, §\u202f6018(d) ,  July 22, 1998 ,  112 Stat. 823 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to property placed in service after  September 13, 1995 . \n \n “(2)   Binding contracts .— The amendment made by subsection (a) shall not apply to any property produced or acquired by the taxpayer pursuant to a written contract which was binding on  September 13, 1995 , and at all times thereafter before such production or acquisition. \n \n “(3)   Underpayments of income tax .— No addition to tax shall be made under section 6662 of the Internal Revenue Code of 1986 as a result of the application of subsection (d) of that section (relating to substantial understatements of income tax) with respect to any underpayment of income tax for any taxable year ending before the date of the enactment of this Act [ Aug. 20, 1996 ], to the extent such underpayment was created or increased by the amendments made by subsection (a).”\nPub. L. 103–66, title XIII, §\u202f13206(c)(3) ,  Aug. 10, 1993 ,  107 Stat. 467 , provided that:  “The amendments made by this subsection [amending this section and  section 305 of this title ] shall take effect on  April 30, 1993 .”\nAmendment by section 13261(b) and (f)(1) of  Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–239, title VII, §\u202f7622(c)[(e)] ,  Dec. 19, 1989 ,  103 Stat. 2378 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 1245 and 1253 of this title] shall apply to transfers after  October 2, 1989 . \n \n “(2)   Binding contract .— The amendments made by this section shall not apply to any transfer pursuant to a written binding contract in effect on  October 2, 1989 , and at all times thereafter before the transfer.”\nPub. L. 101–239, title VII, §\u202f7645(b) ,  Dec. 19, 1989 ,  103 Stat. 2382 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to interests created or acquired after  July 27, 1989 , in taxable years ending after such date.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(1) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(1) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 1511(c)(4) of Pub. L. 99–514  applicable for purposes of determining interest for periods after  Dec. 31, 1986 , see  section 1511(d) of Pub. L. 99–514 , set out as a note under  section 47 of this title .\nPub. L. 99–514, title XVIII, §\u202f1809(d)(1) ,  Oct. 22, 1986 ,  100 Stat. 2821 , provided that subsec. (c) is amended except with respect to property placed in service by the taxpayer on or before  Mar. 28, 1985 .\nAmendment by  Pub. L. 97–424  applicable to taxable years beginning after  Dec. 31, 1979 , with a special rule for periods beginning before  Mar. 1, 1980 , see  section 541(c) of Pub. L. 97–424 , set out as a note under  section 46 of this title .\nPub. L. 97–34, title II, §\u202f264(b) ,  Aug. 13, 1981 ,  95 Stat. 265 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to rehabilitation expenditures incurred after  December 31, 1980 .”\nAmendment by sections 203 and 209 of  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, except that amendment by  section 203(c) of Pub. L. 97–34  effective  Jan. 1, 1981 , and applicable with respect to taxable years ending after that date, see section 209(a), (b) of  Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 212(d)(1) of Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after that date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nPub. L. 96–613, §\u202f2(b) ,  Dec. 28, 1980 ,  94 Stat. 3579 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  December 31, 1953 .”\nAmendment by  section 312(c)(4) of Pub. L. 95–600  applicable to taxable years ending after  Dec. 31, 1978 , see  section 312(d) of Pub. L. 95–600 , set out as an Effective Date of 1978 Amendment note under  section 46 of this title .\nPub. L. 95–600, title VII, §\u202f701(f)(8) ,  Nov. 6, 1978 ,  92 Stat. 2903 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this subsection [amending this section and sections 57, 191, 280B, 1245, and 1250 of this title] shall take effect as if included in the respective provisions of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to which such amendments relate, as such provision[s] were added to such Code, or amended, by section 2124 of the Tax Reform Act of 1976 [ Pub. L. 94–455, title XXI, §\u202f2124 ,  Oct. 4, 1976 ,  90 Stat. 1916 ].”\nAmendment by  Pub. L. 95–615  to cease to have effect on the day after  Nov. 8, 1978 , see  section 210(a) of Pub. L. 95–615 , set out as a Termination Date of 1978 Amendment note under  section 61 of this title .\nAmendment by  section 301(d)(3) of Pub. L. 95–618  applicable to property which is placed in service after  Sept. 30, 1978 , but not to property which is constructed, reconstructed, erected, or acquired pursuant to a contract which, on  Oct. 1, 1978 , and at all times thereafter, was binding on the taxpayer, see  section 301(d)(4) of Pub. L. 95–618 , set out as an Effective Date of 1978 Amendment note under  section 48 of this title .\nPub. L. 95–618, title III, §\u202f301(e)(2) ,  Nov. 9, 1978 ,  92 Stat. 3201 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years ending after the date of enactment of this Act [ Nov. 9, 1978 ].”\nAmendment by  section 1901(a)(27)(A) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 202(c)(3) of Pub. L. 94–455  applicable for taxable years ending after  Dec. 31, 1975 , see  section 202(d) of Pub. L. 94–455 , set out as a note under  section 1250 of this title .\nPub. L. 94–455, title II, §\u202f203(b) ,  Oct. 4, 1976 ,  90 Stat. 1531 , as amended by  Pub. L. 95–171, §\u202f4(b) ,  Nov. 12, 1977 ,  91 Stat. 1355 ;  Pub. L. 95–615, §\u202f7(b) ,  Nov. 8, 1978 ,  92 Stat. 3098 , provided that:  “The amendments made by paragraphs (1), (3), and (4) of subsection (a) [amending this section] shall apply to expenditures paid or incurred after  December 31, 1975 . The amendment made by paragraph (2) of subsection (a) [amending this section] shall apply to expenditures incurred after  December 31, 1975 .”\n[ Section 7(b) of Pub. L. 95–615  (which amended  section 203(b) of Pub. L. 94–455  exactly as that section 203(b) had been amended by  Pub. L. 95–171 ) to cease to have effect on the day after  Nov. 8, 1978 , see  section 210(a) of Pub. L. 95–615 , set out as a Termination Date of 1978 Amendment note under  section 61 of this title .]\nPub. L. 94–455, title XXI, §\u202f2124(c)(2) , (d)(2),  Oct. 4, 1976 ,  90 Stat. 1918 , 1919, which provided that the amendment of this section was applicable to that portion of the basis attributable to construction, reconstruction, or erection after  Dec. 31, 1975 , and before  Jan. 1, 1981 , and with respect to additions to capital account occurring after  June 30, 1976 , and before  July 1, 1981 , was repealed by  Pub. L. 96–541, §\u202f2(e)(3) , (4),  Dec. 17, 1980 ,  94 Stat. 3205 .\nPub. L. 93–625, §\u202f5(d) ,  Jan. 3, 1975 ,  88 Stat. 2112 , provided that:  “The amendments made by this section [amending  section 1250 of this title  and enacting and repealing provisions set out as notes under this section] shall apply with respect to property placed in service after  December 31, 1973 .”\nPub. L. 92–178, title I, §\u202f109(d)(1) ,  Dec. 10, 1971 ,  85 Stat. 509 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 1970 .”\nPub. L. 91–172, title IV, §\u202f441(b) ,  Dec. 30, 1969 ,  83 Stat. 628 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to all taxable years for which a return has not been filed before  August 1, 1969 .”\nPub. L. 91–172, title V, §\u202f521(g) ,  Dec. 30, 1969 ,  83 Stat. 654 , provided that:  “The amendments made by this section [amending this section and sections 381 and 1250 of this title] shall apply with respect to taxable years ending after  July 24, 1969 .”\nAmendment by  Pub. L. 90–26  applicable with respect to taxable years ending after  March 9, 1967 , see  section 4 of Pub. L. 90–26 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 89–800  applicable to taxable years ending after  Oct. 9, 1966 , see  section 4 of Pub. L. 89–800 , set out as a note under  section 46 of this title .\nAmendment by  section 13(b) of Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1962 , and amendment by  section 13(c)(1) of Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1961 , and ending after  Oct. 16, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nAmendment by  Pub. L. 85–866  applicable only if mailing occurs after  Sept. 2, 1958 , see  section 89(d) of Pub. L. 85–866 , set out as a note under  section 7502 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 97–34, title II, §\u202f203(c)(2) , (3),  Aug. 13, 1981 ,  95 Stat. 222 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(2)   Change in method of accounting .— Sections 446 and 481 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall not apply to the change in the method of depreciation to comply with the provisions of this subsection [which struck out subsec. (r) of this section relating to the retirement-replacement-betterment method of accounting]. \n \n “(3)   Transitional rule .— The adjusted basis of RRB property (as defined in section 168(g)(6) of such Code) as of  December 31, 1980 , shall be depreciated using a useful life of no less than 5 years and no more than 50 years and a method described in section 167(b) of such Code, including the method described in section 167(b)(2) of such Code, switching to the method described in section 167(b)(3) of such Code at a time to maximize the deduction.”\nPub. L. 97–34, title II, §\u202f203(e) ,  Aug. 13, 1981 ,  95 Stat. 222 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The Secretary of Health and Human Services is not required to apply any provision of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended, in calculating depreciation (for the purpose of determining any cost under a program administered by the Secretary), unless a provision of law requires so expressly.”\nPub. L. 93–625, §\u202f5(a) ,  Jan. 3, 1975 ,  88 Stat. 2112 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of buildings and other items of section 1250 property (within the meaning of section 1250(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) placed in service before the effective date of the class lives first prescribed by the Secretary of the Treasury or his delegate under section 167(m) of such Code for the class in which such property falls, if an election under such section 167(m) applies to the taxpayer for the taxable year in which such property is placed in service, the taxpayer may, in accordance with regulations prescribed by the Secretary of the Treasury or his delegate, elect to determine the useful life of such property— \n “(1)  under Revenue Procedure 62–21 (as amended and supplemented) as in effect on  December 31, 1970 , or \n \n “(2)  on the facts and circumstances.”\nPub. L. 92–178, title I, §\u202f109(e) ,  Dec. 10, 1971 ,  85 Stat. 510 , as amended by  Pub. L. 93–625, §\u202f5(b) ,  Jan. 3, 1975 ,  88 Stat. 2112 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  [Repealed.  Pub. L. 93–625, §\u202f5(b) ,  Jan. 3, 1975 ,  88 Stat. 2112 .] \n \n “(2)   Subsidiary assets .— If a significant portion of a class of property first prescribed by the Secretary of the Treasury or his delegate under section 167(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] consists of subsidiary assets, all such subsidiary assets in such class placed in service by the taxpayer during the period beginning on  January 1, 1971 , and ending on  December 31, 1973  (or such earlier date on which a class which includes such subsidiary assets subsequently prescribed by the Secretary of the Treasury or his delegate under such section becomes effective), may, in accordance with regulations prescribed by the Secretary of the Treasury or his delegate, be excluded by the taxpayer from an election under such section.”\nPub. L. 93–482, §\u202f4 ,  Oct. 26, 1974 ,  88 Stat. 1456 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Notwithstanding the provisions of section 167(k)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to depreciation of expenditures to rehabilitate low income rental housing), the provisions of section 167(k) shall apply with respect to rehabilitation expenditures incurred with respect to low income rental housing after  December 31, 1974 , and before  January 1, 1978 , if such expenditures are incurred pursuant to a binding contract entered into before  December 31, 1974 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Salvage value shall be treated as zero.\nAn election under paragraph (2)(D)\u202f 1 1 \u202fSee References in Text note below.  or (3)(D) may be made with respect to 1 or more classes of property for any taxable year and once made with respect to any class shall apply to all property in such class placed in service during such taxable year. Such an election, once made, shall be irrevocable.\nFor purposes of this section, the applicable recovery period shall be determined in accordance with the following table: \n \n \n \n \n \n \n In the case of: The applicable recovery period is: \n \n \n 3-year property 3 years\u202f\u202f \n 5-year property 5 years\u202f\u202f \n 7-year property 7 years\u202f\u202f \n 10-year property 10 years\u202f\u202f \n 15-year property 15 years\u202f\u202f \n 20-year property 20 years\u202f\u202f \n Water utility property 25 years\u202f\u202f \n Residential rental property 27.5 years\u202f\u202f \n Nonresidential real property 39 years. \n Any railroad grading or tunnel bore 50 years.\nExcept as otherwise provided in this subsection, the applicable convention is the half-year convention.\nThe half-year convention is a convention which treats all property placed in service during any taxable year (or disposed of during any taxable year) as placed in service (or disposed of) on the mid-point of such taxable year.\nThe mid-month convention is a convention which treats all property placed in service during any month (or disposed of during any month) as placed in service (or disposed of) on the mid-point of such month.\nThe mid-quarter convention is a convention which treats all property placed in service during any quarter of a taxable year (or disposed of during any quarter of a taxable year) as placed in service (or disposed of) on the mid-point of such quarter.\nExcept as otherwise provided in this subsection, property shall be classified under the following table: \n \n \n \n \n \n \n Property shall be treated \u2000\u2000\u2000\u2000as: If such property has a class \u2000\u2000life (in years) of: \n \n \n 3-year property 4 or less \n 5-year property More than 4 but less than 10 \n 7-year property 10 or more but less than 16 \n 10-year property 16 or more but less than 20 \n 15-year property 20 or more but less than 25 \n 20-year property 25 or more.\nThe term “residential rental property” means any building or structure if 80 percent or more of the gross rental income from such building or structure for the taxable year is rental income from dwelling units.\nThe term “20-year property” means initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant.\nThe term “railroad grading or tunnel bore” means all improvements resulting from excavations (including tunneling), construction of embankments, clearings, diversions of roads and streams, sodding of slopes, and from similar work necessary to provide, construct, reconstruct, alter, protect, improve, replace, or restore a roadbed or right-of-way for railroad track.\nThe term “qualified improvement property” means any improvement made by the taxpayer to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service.\nAny public utility property (within the meaning of subsection (i)(10)) if the taxpayer does not use a normalization method of accounting.\nAny motion picture film or video tape.\nAny works which result from the fixation of a series of musical, spoken, or other sounds, regardless of the nature of the material (such as discs, tapes, or other phonorecordings) in which such sounds are embodied.\nIn the case of any property to which this section would apply but for this paragraph, the depreciation deduction under section 167 shall be determined under the provisions of this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986.\nIn the case of any tax-exempt use property subject to a lease, the recovery period used for purposes of paragraph (2) shall (notwithstanding any other subparagraph of this paragraph) in no event be less than 125 percent of the lease term.\nFor purposes of paragraph (2), in the case of property described in any of the following subparagraphs of subsection (e)(3), the class life shall be determined as follows: \n \n \n \n \n \n \n \u2001\u2001\u2001\u2001If property is described \u2001\u2001\u2001\u2001\u2001\u2001in subparagraph: \u2001\u2001\u2001\u2001The class life is: \n \n \n (A)(iii) 4\u2000\u202f\u202f \n (B)(ii) 5\u2000\u202f\u202f \n (B)(iii) 9.5 \n (B)(vii) 10\u2000\u202f\u202f \n (C)(i) 10\u2000\u202f\u202f \n (C)(iii) 22\u2000\u202f\u202f \n (C)(iv) 14\u2000\u202f\u202f \n (D)(i) 15\u2000\u202f\u202f \n (D)(ii) 20\u2000\u202f\u202f \n (E)(i) 24\u2000\u202f\u202f \n (E)(ii) 24\u2000\u202f\u202f \n (E)(iii) 20\u2000\u202f\u202f \n (E)(iv) 20\u2000\u202f\u202f \n (E)(v) 30\u2000\u202f\u202f \n (E)(vi) 35\u2000\u202f\u202f \n (E)(vii) 20\u2000\u202f\u202f \n (F) 25\nIn the case of any qualified technological equipment, the recovery period used for purposes of paragraph (2) shall be 5 years.\nIn the case of any automobile or light general purpose truck, the recovery period used for purposes of paragraph (2) shall be 5 years.\nIn the case of any section 1245 property which is real property with no class life, the recovery period used for purposes of paragraph (2) shall be 40 years.\nExcept as otherwise provided in this paragraph, the term “tax-exempt bond financed property” means any property to the extent such property is financed (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103(a).\nFor purposes of subparagraph (A), the proceeds of any obligation shall be treated as used to finance property acquired in connection with the issuance of such obligation in the order in which such property is placed in service.\nThe term “tax-exempt bond financed property” shall not include any qualified residential rental project (within the meaning of section 142(a)(7)).\nIf the taxpayer makes an election under this paragraph with respect to any class of property for any taxable year, the alternative depreciation system under this subsection shall apply to all property in such class placed in service during such taxable year. Notwithstanding the preceding sentence, in the case of nonresidential real property or residential rental property, such election may be made separately with respect to each property.\nAn election under subparagraph (A), once made, shall be irrevocable.\nThe property described in this paragraph shall consist of any nonresidential real property, residential rental property, and qualified improvement property held by an electing real property trade or business (as defined in 163(j)(7)(B)).\nExcept as otherwise provided in this subsection, the term “tax-exempt use property” means that portion of any tangible property (other than nonresidential real property) leased to a tax-exempt entity.\nIn the case of nonresidential real property, the term “tax-exempt use property” means that portion of the property leased to a tax-exempt entity in a disqualified lease.\nClause (i) shall apply to any property only if the portion of such property leased to tax-exempt entities in disqualified leases is more than 35 percent of the property.\nFor purposes of this subparagraph, improvements to a property (other than land) shall not be treated as a separate property.\nSubclause (IV) of clause (ii) shall not apply to any property which is leased within 3 months after the date such property is first used by the tax-exempt entity (or a related entity).\nProperty shall not be treated as tax-exempt use property merely by reason of a short-term lease.\nThe term “tax-exempt use property” shall not include any portion of a property if such portion is predominantly used by the tax-exempt entity (directly or through a partnership of which such entity is a partner) in an unrelated trade or business the income of which is subject to tax under section 511. For purposes of subparagraph (B)(iii), any portion of a property so used shall not be treated as leased to a tax-exempt entity in a disqualified lease.\nFor purposes of this paragraph, the term “nonresidential real property” includes residential rental property.\nFor purposes of this subsection, an organization shall be treated as an organization described in subparagraph (A)(ii) with respect to any property (other than property held by such organization) if such organization was an organization (other than a cooperative described in section 521) exempt from tax imposed by this chapter at any time during the 5-year period ending on the date such property was first used by such organization. The preceding sentence and subparagraph (D)(ii) shall not apply to the Federal Home Loan Mortgage Corporation.\nIn the case of an organization formerly exempt from tax under section 501(a) as an organization described in section 501(c)(12), clause (i) shall not apply to such organization with respect to any property if such organization elects not to be exempt from tax under section 501(a) during the tax-exempt use period with respect to such property.\nFor purposes of subclause (I), the term “tax-exempt use period” means the period beginning with the taxable year in which the property described in subclause (I) is first used by the organization and ending with the close of the 15th taxable year following the last taxable year of the applicable recovery period of such property.\nAny election under subclause (I), once made, shall be irrevocable.\nAny organization which is engaged in activities substantially similar to those engaged in by a predecessor organization shall succeed to the treatment under this subparagraph of such predecessor organization.\nFor purposes of this section, the term “tax-exempt use property” shall not include any qualified technological equipment if the lease to the tax-exempt entity has a lease term of 5 years or less. Notwithstanding subsection (i)(3)(A)(i), in determining a lease term for purposes of the preceding sentence, there shall not be taken into account any option of the lessee to renew at the fair market value rent determined at the time of renewal; except that the aggregate period not taken into account by reason of this sentence shall not exceed 24 months.\nSubclause (II) of clause (i) shall not apply to any property which is leased within 3 months after the date such property is first used by the tax-exempt entity (or a related entity).\nIn the case of any property which is leased to a partnership, the determination of whether any portion of such property is tax-exempt use property shall be made by treating each tax-exempt entity partner’s proportionate share (determined under paragraph (6)(C)) of such property as being leased to such partner.\nRules similar to the rules of subparagraph (A) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities.\nUnless it is otherwise established to the satisfaction of the Secretary, it shall be presumed that the partners of a foreign partnership (and the beneficiaries of any other foreign pass-thru entity) are persons who are not United States persons.\nFor purposes of subparagraph (A), a tax-exempt entity’s proportionate share of any property owned by a partnership shall be determined on the basis of such entity’s share of partnership items of income or gain (excluding gain allocated under section 704(c)), whichever results in the largest proportionate share.\nFor purposes of clause (i), if a tax-exempt entity’s share of partnership items of income or gain (excluding gain allocated under section 704(c)) may vary during the period such entity is a partner in the partnership, such share shall be the highest share such entity may receive.\nFor purposes of this subsection, in the case of any property which is owned by a partnership which has both a tax-exempt entity and a person who is not a tax-exempt entity as partners, the determination of whether such property is used in an unrelated trade or business of such an entity shall be made without regard to section 514.\nRules similar to the rules of subparagraphs (A), (B), (C), and (D) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities.\nFor purposes of this paragraph and paragraph (5), except as otherwise provided in this subparagraph, any tax-exempt controlled entity shall be treated as a tax-exempt entity.\nThe term “tax-exempt controlled entity” means any corporation (which is not a tax-exempt entity determined without regard to this subparagraph and paragraph (2)(E)) if 50 percent or more (in value) of the stock in such corporation is held by 1 or more tax-exempt entities (other than a foreign person or entity).\nFor purposes of subclause (I), in the case of a corporation the stock of which is publicly traded on an established securities market, stock held by a tax-exempt entity shall not be taken into account unless such entity holds at least 5 percent (in value) of the stock in such corporation. For purposes of this subclause, related entities (within the meaning of paragraph (4)) shall be treated as 1 entity.\nFor purposes of this clause, a tax-exempt entity shall be treated as holding stock which it holds through application of section 318 (determined without regard to the 50-percent limitation contained in subsection (a)(2)(C) thereof).\nFor purposes of this subsection, the term “lease” includes any grant of a right to use property.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\nExcept as provided in this section, the term “class life” means the class life (if any) which would be applicable with respect to any property as of  January 1, 1986 , under subsection (m) of section 167 (determined without regard to paragraph (4) and as if the taxpayer had made an election under such subsection). The Secretary, through an office established in the Treasury, shall monitor and analyze actual experience with respect to all depreciable assets. The reference in this paragraph to subsection (m) of section 167 shall be treated as a reference to such subsection as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.\nThe term “related peripheral equipment” means any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer.\nFor purposes of this paragraph, the term “high technology medical equipment” means any electronic, electromechanical, or computer-based high technology equipment used in the screening, monitoring, observation, diagnosis, or treatment of patients in a laboratory, medical, or hospital environment.\nFor purposes of clause (i) of subparagraph (A), in the case of nonresidential real property or residential rental property, there shall not be taken into account any option to renew at fair market value, determined at the time of renewal.\nUnder regulations, a taxpayer may maintain 1 or more general asset accounts for any property to which this section applies. Except as provided in regulations, all proceeds realized on any disposition of property in a general asset account shall be included in income as ordinary income.\nThe Secretary shall, by regulations, provide for the method of determining the deduction allowable under section 167(a) with respect to any tangible property for any taxable year (and the succeeding taxable years) during which such property changes status under this section but continues to be held by the same person.\nIn the case of any property transferred in a transaction described in subparagraph (B), the transferee shall be treated as the transferor for purposes of computing the depreciation deduction determined under this section with respect to so much of the basis in the hands of the transferee as does not exceed the adjusted basis in the hands of the transferor. In any case where this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986 applied to the property in the hands of the transferor, the reference in the preceding sentence to this section shall be treated as a reference to this section as so in effect.\nUnder regulations, property which is disposed of and then reacquired by the taxpayer shall be treated for purposes of computing the deduction allowable under subsection (a) as if such property had not been disposed of.\nIn the case of any building erected (or improvements made) on leased property, if such building or improvement is property to which this section applies, the depreciation deduction shall be determined under the provisions of this section.\nFor treatment of qualified long-term real property constructed or improved in connection with cash or rent reduction from lessor to lessee, see section 110(b).\nOne way in which the requirements of subparagraph (A) are not met is if the taxpayer, for ratemaking purposes, uses a procedure or adjustment which is inconsistent with the requirements of subparagraph (A).\nThe procedures and adjustments which are to be treated as inconsistent for purposes of clause (i) shall include any procedure or adjustment for ratemaking purposes which uses an estimate or projection of the taxpayer’s tax expense, depreciation expense, or reserve for deferred taxes under subparagraph (A)(ii) unless such estimate or projection is also used, for ratemaking purposes, with respect to the other 2 such items and with respect to the rate base.\nThe Secretary may by regulations prescribe procedures and adjustments (in addition to those specified in clause (ii)) which are to be treated as inconsistent for purposes of clause (i).\nIn the case of any public utility property to which this section does not apply by reason of subsection (f)(2), the allowance for depreciation under section 167(a) shall be an amount computed using the method and period referred to in subparagraph (A)(i).\nThe term “research and experimentation” has the same meaning as the term research and experimental has under section 174.\nThe terms “section 1245 property” and “section 1250 property” have the meanings given such terms by sections 1245(a)(3) and 1250(c), respectively.\nThe term “livestock” includes poultry.\nThe term “qualified rent-to-own property” means property held by a rent-to-own dealer for purposes of being subject to a rent-to-own contract.\nThe term “rent-to-own dealer” means a person that, in the ordinary course of business, regularly enters into rent-to-own contracts with customers for the use of consumer property, if a substantial portion of those contracts terminate and the property is returned to such person before the receipt of all payments required to transfer ownership of the property from such person to the customer.\nThe term “consumer property” means tangible personal property of a type generally used within the home for personal use.\nSuch term shall not include any transportation equipment, administrative services assets, warehouses, administrative buildings, hotels, or motels.\nSuch term shall not include any property placed in service after  December 31, 2025 .\nFor purposes of subsection (a), the applicable recovery period for qualified Indian reservation property shall be determined in accordance with the table contained in paragraph (2) in lieu of the table contained in subsection (c).\nFor purposes of paragraph (1)— \n \n \n \n \n \n \n In the case of: The applicable recovery period is: \n \n \n 3-year property 2 years\u202f\u202f \n 5-year property 3 years\u202f\u202f \n 7-year property 4 years\u202f\u202f \n 10-year property 6 years\u202f\u202f \n 15-year property 9 years\u202f\u202f \n 20-year property 12 years\u202f\u202f \n Nonresidential real property 22 years.\nFor purposes of determining alternative minimum taxable income under section 55, the deduction under subsection (a) for qualified Indian reservation property shall be determined under this section without regard to any adjustment under section 56.\nSubparagraph (A)(ii) shall not apply to qualified infrastructure property located outside of the Indian reservation if the purpose of such property is to connect with qualified infrastructure property located within the Indian reservation.\nFor purposes of this subsection, the rental to others of real property located within an Indian reservation shall be treated as the active conduct of a trade or business within an Indian reservation.\nAny reference in this subsection to a provision not contained in this title shall be treated for purposes of this subsection as a reference to such provision as in effect on the date of the enactment of this paragraph.\nIf a taxpayer makes an election under this paragraph with respect to any class of property for any taxable year, paragraph (1) shall not apply to all property in such class placed in service during such taxable year. Such election, once made, shall be irrevocable.\nThis subsection shall not apply to property placed in service after  December 31, 2021 .\nIn the case of property which is qualified property solely by reason of clause (i), paragraph (1) shall apply only to the extent of the adjusted basis thereof attributable to manufacture, construction, or production before  January 1, 2027 .\nFor purposes of this subparagraph, the term “transportation property” means tangible personal property used in the trade or business of transporting persons or property.\nThis subparagraph shall not apply to any property which is described in subparagraph (C).\nIn the case of a taxpayer manufacturing, constructing, or producing property for the taxpayer’s own use, the requirements of subclause (III) of subparagraph (B)(i) shall be treated as met if the taxpayer begins manufacturing, constructing, or producing the property before  January 1, 2027 .\nIn the case of a passenger automobile (as defined in section 280F(d)(5)) which is qualified property, the Secretary shall increase the limitation under section 280F(a)(1)(A)(i) by $8,000.\nThe deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2).\nFor purposes of determining alternative minimum taxable income under section 55, the deduction under section 167 for qualified property shall be determined without regard to any adjustment under section 56.\nAn election under this paragraph may be revoked only with the consent of the Secretary.\nIf this paragraph applies to any specified plant, such specified plant shall not be treated as qualified property in the taxable year in which placed in service.\nRules similar to the rules of paragraph (2)(G) shall apply for purposes of this paragraph.\nIf a taxpayer makes an election under this paragraph with respect to any class of property for any taxable year, paragraphs (1) and (2)(F) shall not apply to any qualified property in such class placed in service during such taxable year. An election under this paragraph may be revoked only with the consent of the Secretary.\nIn the case of qualified property placed in service by the taxpayer during the first taxable year ending after  September 27, 2017 , if the taxpayer elects to have this paragraph apply for such taxable year, paragraphs (1)(A) and (5)(A)(i) shall be applied by substituting “50 percent” for “the applicable percentage”.\nAny election under this paragraph shall be made at such time and in such form and manner as the Secretary may prescribe.\nSuch term shall not include any property to which subsection (k) applies.\nSuch term shall not include any property described in subsection (k)(2)(D).\nSuch term shall not include any property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103.\nIf a taxpayer makes an election under this subparagraph with respect to any class of property for any taxable year, this subsection shall not apply to all property in such class placed in service during such taxable year.\nFor purposes of this subsection, rules similar to the rules of subsection (k)(2)(E) shall apply.\nFor purposes of this subsection, rules similar to the rules of subsection (k)(2)(G) shall apply.\nFor purposes of this subsection, rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified second generation biofuel plant property which ceases to be qualified second generation biofuel plant property.\nParagraph (1) shall not apply to any qualified second generation biofuel plant property with respect to which an election has been made under section 179C (relating to election to expense certain refineries).\nThe term “qualified reuse and recycling property” shall not include any property to which subsection (k) (determined without regard to paragraph (4) thereof) applies.\nThe term “qualified reuse and recycling property” shall not include any property to which the alternative depreciation system under subsection (g) applies, determined without regard to paragraph (7) of subsection (g) (relating to election to have system apply).\nIf a taxpayer makes an election under this clause with respect to any class of property for any taxable year, this subsection shall not apply to all property in such class placed in service during such taxable year.\nIn the case of a taxpayer manufacturing, constructing, or producing property for the taxpayer’s own use, the requirements of clause (iv) of subparagraph (A) shall be treated as met if the taxpayer begins manufacturing, constructing, or producing the property after  August 31, 2008 .\nFor purposes of determining alternative minimum taxable income under section 55, the deduction under subsection (a) for qualified reuse and recycling property shall be determined under this section without regard to any adjustment under section 56.\nThe term “reuse and recycling property” means any machinery and equipment (not including buildings or real estate), along with all appurtenances thereto, including software necessary to operate such equipment, which is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials.\nSuch term does not include rolling stock or other equipment used to transport reuse and recyclable materials.\nThe term “qualified reuse and recyclable materials” means scrap plastic, scrap glass, scrap textiles, scrap rubber, scrap packaging, recovered fiber, scrap ferrous and nonferrous metals, or electronic scrap generated by an individual or business.\nThe term “recycling” or “recycle” means that process (including sorting) by which worn or superfluous materials are manufactured or processed into specification grade commodities that are suitable for use as a replacement or substitute for virgin materials in manufacturing tangible consumer and commercial products, including packaging.\nPub. L. 117–169, title I, §\u202f13703 ,  Aug. 16, 2022 ,  136 Stat. 1997 , provided that, applicable to facilities and property placed in service after  Dec. 31, 2024 , subsection (e)(3)(B) of this section is amended:\n(1) in clause (vi)(III), by striking “and” at the end,\n(2) in clause (vii), by striking the period at the end and inserting “,\u2000and”, and\n(3) by inserting after clause (vii) the following:\n(viii) any qualified facility (as defined in section 45Y(b)(1)(A)), any qualified property (as defined in subsection (b)(2) of section 48E) which is a qualified investment (as defined in subsection (b)(1) of such section), or any energy storage technology (as defined in subsection (c)(2) of such section).\nSee 2022 Amendment note below.\nParagraph (2)(D), referred to in subsec. (b)(5), means par. (2)(D) of subsec. (b) of this section, which was redesignated par. (2)(C) of subsec. (b) by  Pub. L. 115–97, title I, §\u202f13203(b) ,  Dec. 22, 2017 ,  131 Stat. 2109 .\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsecs. (e)(3)(B)(vi)(II), (III), (g)(4)(K), and (i)(1), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nSection 168(e) as in effect before the amendments made by the Tax Reform Act of 1986, referred to in subsec. (f)(5)(A)(i), is subsec. (e) of this section prior to the general amendment of this section by  Pub. L. 99–514 .\nThe date of the enactment of this paragraph, referred to in subsec. (f)(5)(B)(ii)(I), probably means the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nThe Tax Reform Act of 1986, referred to in subsecs. (f)(5)(B)(iii), (C) and (i)(7)(A), is  Pub. L. 99–514 , section 201(a) of which amended this section generally.\nThe Communications Satellite Act of 1962, referred to in subsec. (i)(10)(C), is  Pub. L. 87–624 ,  Aug. 31, 1962 ,  76 Stat. 419 , which is classified generally to chapter 6 (§\u202f701 et seq.) of Title 47, Telecommunications. For complete classification of this Act to the Code, see Short Title note set out under  section 701 of Title 47  and Tables.\nThe date of the enactment of this sentence, referred to in subsec. (j)(6), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nThe date of the enactment of this paragraph, referred to in subsec. (j)(7), is the date of enactment of  Pub. L. 103–66 , which was approved  Aug. 10, 1993 .\nThe date of the enactment of this subsection, referred to in subsec. ( l )(2)(B), (C), is the date of enactment of  Pub. L. 109–432 , which was approved  Dec. 20, 2006 .\nPar. (3) of section 165(h), referred to in subsec. (n)(3)(B), (C), was repealed by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(27)(A) ,  Dec. 19, 2014 ,  128 Stat. 4040 . However, the terms “federally declared disaster” and “disaster area” are defined elsewhere in that section.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nA prior section 168, acts  Aug. 16, 1954, ch. 746 ,  68A Stat. 52 ;  Aug. 26, 1957 ,  Pub. L. 85–165, §\u202f4 ,  71 Stat. 414 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f9(a) , (b),  72 Stat. 1608 , 1609, related to deductions with respect to amortization of emergency facilities, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1951(b)(4)(A) ,  Oct. 4, 1976 ,  90 Stat. 1837 .\nPub. L. 94–455, title XIX, §\u202f1951(b)(4)(B) ,  Oct. 4, 1976 ,  90 Stat. 1837 , provided that:  “Notwithstanding the repeal made by subparagraph (A) [repealing former section 168], if a certificate was issued before  January 1, 1960 , with respect to an emergency facility which is or has been placed in service before the date of the enactment of this Act [ Oct. 4, 1976 ], the provisions of [former] section 168 shall not, with respect to such facility, be considered repealed. The benefit of deductions by reason of the preceding sentence shall be allowed to estates and trusts in the same manner as in the case of an individual. The allowable deduction shall be apportioned between the income beneficiaries and the fiduciary in accordance with regulations prescribed under section 642(f).”\n2022—Subsec. (e)(3)(B)(viii).  Pub. L. 117–169  added cl. (viii).\n2020—Subsec. (e)(3)(A)(i)(I).  Pub. L. 116–260, §\u202f137(a)(1) , substituted “ January 1, 2022 ” for “ January 1, 2021 ”.\nSubsec. (e)(3)(A)(i)(II).  Pub. L. 116–260, §\u202f137(a)(2) , substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\nSubsec. (e)(3)(E)(vii).  Pub. L. 116–136, §\u202f2307(a)(1)(A) , added cl. (vii).\nSubsec. (e)(6)(A).  Pub. L. 116–136, §\u202f2307(a)(1)(B) , inserted “made by the taxpayer” after “any improvement”.\nSubsec. (g)(3)(B).  Pub. L. 116–136, §\u202f2307(a)(2) , struck out table item relating to subpar. (D)(v) and inserted table item relating to subpar. (E)(vii).\nSubsec. (i)(15)(D).  Pub. L. 116–260, §\u202f115(a) , substituted “ December 31, 2025 ” for “ December 31, 2020 ”.\nSubsec. (j)(9).  Pub. L. 116–260, §\u202f138(a) , substituted “ December 31, 2021 ” for “ December 31, 2020 ”.\n2019—Subsec. (e)(3)(A)(i)(I).  Pub. L. 116–94, §\u202f114(a)(1) , substituted “ January 1, 2021 ” for “ January 1, 2018 ”.\nSubsec. (e)(3)(A)(i)(II).  Pub. L. 116–94, §\u202f114(a)(2) , substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\nSubsec. (i)(15)(D).  Pub. L. 116–94, §\u202f115(a) , substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\nSubsec. (j)(9).  Pub. L. 116–94, §\u202f116(a) , substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\nSubsec. ( l )(2)(D).  Pub. L. 116–94, §\u202f130(a) , substituted “ January 1, 2021 ” for “ January 1, 2018 ”.\n2018—Subsec. (d)(3)(B)(i).  Pub. L. 115–141, §\u202f401(a)(49) , inserted comma after “real property”.\nSubsec. (e)(3)(A)(i)(I).  Pub. L. 115–123, §\u202f40304(a)(1) , substituted “ January 1, 2018 ” for “ January 1, 2017 ”.\nSubsec. (e)(3)(A)(i)(II).  Pub. L. 115–123, §\u202f40304(a)(2) , substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\nSubsec. (e)(3)(B).  Pub. L. 115–141, §\u202f302(a)(2) , substituted “subclause (I) or (II) of clause (vi) by reason of being public utility property.” for “clause (vi)(I) (or the corresponding provisions of prior law) by reason of being public utility property (within the meaning of section 48(a)(3)).” in concluding provisions.\nSubsec. (e)(3)(B)(vi)(II).  Pub. L. 115–141, §\u202f302(a)(1) , substituted “has a power production capacity of not greater than 80 megawatts, or” for “is a qualifying small power production facility within the meaning of section 3(17)(C) of the Federal Power Act ( 16 U.S.C. 796(17)(C) ), as in effect on  September 1, 1986 , or”.\nSubsec. (e)(3)(C)(i).  Pub. L. 115–141, §\u202f401(a)(50) , struck out “and” at end.\nSubsec. (g)(4)(G).  Pub. L. 115–141, §\u202f401(d)(1)(D)(iv) , struck out “(other than a corporation which has an election in effect under section 936)” after “domestic corporation”.\nSubsec. (i)(15)(D).  Pub. L. 115–123, §\u202f40305(a) , substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\nSubsec. (j)(3).  Pub. L. 115–141, §\u202f101(e)(1) , substituted “qualified Indian reservation property” for “property to which paragraph (1) applies”.\nSubsec. (j)(8).  Pub. L. 115–141, §\u202f101(e)(2) , substituted “paragraph (1)” for “this subsection”.\nSubsec. (j)(9).  Pub. L. 115–123, §\u202f40306(a) , substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\nSubsec. (k)(2)(B)(i)(III).  Pub. L. 115–141, §\u202f101(d)(1) , inserted “binding” before “contract”.\nSubsec. (k)(5)(B)(ii).  Pub. L. 115–141, §\u202f101(d)(2) , inserted “crop or” after “more than one” and “a marketable crop or yield of” after “begins bearing”.\nSubsec. ( l )(2)(D).  Pub. L. 115–123, §\u202f40412(a) , substituted “ January 1, 2018 ” for “ January 1, 2017 ”.\nSubsec. (n).  Pub. L. 115–141, §\u202f401(b)(13)(A) , struck out subsec. (n) which related to special allowance for qualified disaster assistance property.\n2017—Subsec. (b)(2)(B) to (D).  Pub. L. 115–97, §\u202f13203(b) , redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: “any property used in a farming business (within the meaning of section 263A(e)(4)),”.\nSubsec. (b)(3)(G) to (I).  Pub. L. 115–97, §\u202f13204(a)(2) , added subpar. (G) and struck out former subpars. (G) to (I) which read as follows:\n“(G) Qualified leasehold improvement property described in subsection (e)(6).\n“(H) Qualified restaurant property described in subsection (e)(7).\n“(I) Qualified retail improvement property described in subsection (e)(8).”\nSubsec. (e)(3)(B)(vii).  Pub. L. 115–97, §\u202f13203(a) , substituted “after  December 31, 2017 ” for “after  December 31, 2008 , and which is placed in service before  January 1, 2010 ”.\nSubsec. (e)(3)(E)(iv) to (ix).  Pub. L. 115–97, §\u202f13204(a)(1)(A) , redesignated cls. (vi) to (viii) as (iv) to (vi), respectively, and struck out former cls. (iv), (v), and (ix) which read as follows:\n“(iv) any qualified leasehold improvement property,\n“(v) any qualified restaurant property,\n“(ix) any qualified retail improvement property.”\nSubsec. (e)(6).  Pub. L. 115–97, §\u202f13204(a)(1)(B) , (4)(B)(i), added par. (6) and struck out former par. (6) which defined “qualified leasehold improvement property”.\nSubsec. (e)(7), (8).  Pub. L. 115–97, §\u202f13204(a)(1)(B) , struck out pars. (7) and (8) which defined “qualified restaurant property” and “qualified retail improvement property”, respectively.\nSubsec. (g)(1)(F).  Pub. L. 115–97, §\u202f13204(a)(3)(A)(i) , added subpar. (F).\nSubsec. (g)(1)(G).  Pub. L. 115–97, §\u202f13205(a) , added subpar. (G).\nSubsec. (g)(2)(C)(iii) to (v).  Pub. L. 115–97, §\u202f13204(a)(3)(C) , added items (iii) to (v) in table and struck out former items (iii) and (iv) which related to nonresidential real and residential rental property and any railroad grading or tunnel bore or water utility property, respectively.\nSubsec. (g)(3)(B).  Pub. L. 115–97, §\u202f13204(a)(3)(B) , inserted table items relating to subpars. (D)(v) and (E)(iv) to (vi) and struck out table items relating to subpar. (E)(iv) to (ix).\nSubsec. (g)(8).  Pub. L. 115–97, §\u202f13204(a)(3)(A)(ii) , added par. (8).\nSubsec. (i)(7)(B).  Pub. L. 115–97, §\u202f13504(b)(1) , struck out concluding provisions which read as follows: “Subparagraph (A) shall not apply in the case of a termination of a partnership under section 708(b)(1)(B).”\nSubsec. (k).  Pub. L. 115–97, §\u202f13201(b)(2)(B) , struck out “acquired after  December 31, 2007 , and before  January 1, 2020 ” after “property” in heading.\nSubsec. (k)(1)(A).  Pub. L. 115–97, §\u202f13201(a)(1)(A) , substituted “the applicable percentage” for “50 percent”.\nSubsec. (k)(2)(A)(i)(IV).  Pub. L. 115–97, §\u202f13201(g)(1) , added subcl. (IV). Subcl. (IV) was added to cl. (i) after former subcl. (IV) was struck out by  Pub. L. 115–97, §\u202f13204(a)(4)(A) , in view of directory language amending cl. (i) “as amended by section 13204”. See below.\nPub. L. 115–97, §\u202f13204(a)(4)(A) , struck out subcl. (IV) which read as follows: “which is qualified improvement property,”.\nSubsec. (k)(2)(A)(i)(V).  Pub. L. 115–97, §\u202f13201(g)(1) , added subcl. (V).\nSubsec. (k)(2)(A)(ii).  Pub. L. 115–97, §\u202f13201(c)(1) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the original use of which commences with the taxpayer, and”.\nSubsec. (k)(2)(A)(iii).  Pub. L. 115–97, §\u202f13201(b)(1)(A)(i) , substituted “ January 1, 2027 ” for “ January 1, 2020 ”.\nSubsec. (k)(2)(B)(i)(II).  Pub. L. 115–97, §\u202f13201(b)(1)(A)(ii)(I) , substituted “ January 1, 2028 ” for “ January 1, 2021 ”.\nSubsec. (k)(2)(B)(i)(III).  Pub. L. 115–97, §\u202f13201(b)(1)(A)(i) , substituted “ January 1, 2027 ” for “ January 1, 2020 ”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 115–97, §\u202f13201(b)(1)(A)(ii)(II) , substituted “pre- January 1, 2027 ” for “pre- January 1, 2020 ” in heading.\nPub. L. 115–97, §\u202f13201(b)(1)(A)(i) , substituted “ January 1, 2027 ” for “ January 1, 2020 ”.\nSubsec. (k)(2)(E)(i).  Pub. L. 115–97, §\u202f13201(b)(1)(A)(i) , substituted “ January 1, 2027 ” for “ January 1, 2020 ”.\nSubsec. (k)(2)(E)(ii).  Pub. L. 115–97, §\u202f13201(c)(2) , amended cl. (ii) generally. Prior to amendment, text read as follows: “For purposes of clause (iii) and subparagraph (A)(ii), if property is—\n“(I) originally placed in service by a person, and\n“(II) sold and leased back by such person within 3 months after the date such property was originally placed in service,\nsuch property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in subclause (II).”\nSubsec. (k)(2)(E)(iii)(I).  Pub. L. 115–97, §\u202f13201(c)(3) , amended subcl. (I) generally. Prior to amendment subcl. (I) read as follows: “property is originally placed in service by the lessor of such property,”.\nSubsec. (k)(2)(F)(iii).  Pub. L. 115–97, §\u202f13201(f) , substituted “acquired by the taxpayer before  September 28, 2017 , and placed in service by the taxpayer after  September 27, 2017 ” for “placed in service by the taxpayer after  December 31, 2017 ” in introductory provisions.\nSubsec. (k)(2)(H).  Pub. L. 115–97, §\u202f13201(g)(2) , added subpar. (H).\nSubsec. (k)(3).  Pub. L. 115–97, §\u202f13204(a)(4)(B)(ii) , struck out par. (3) which defined “qualified improvement property”.\nSubsec. (k)(4).  Pub. L. 115–97, §\u202f12001(b)(13) , struck out par. (4) which related to election to accelerate AMT credits in lieu of bonus depreciation.\nSubsec. (k)(5)(A).  Pub. L. 115–97, §\u202f13201(b)(1)(B) , substituted “ January 1, 2027 ” for “ January 1, 2020 ” in introductory provisions.\nSubsec. (k)(5)(A)(i).  Pub. L. 115–97, §\u202f13201(a)(1)(B) , substituted “the applicable percentage” for “50 percent”.\nSubsec. (k)(5)(F).  Pub. L. 115–97, §\u202f13201(a)(3)(A) , struck out subpar. (F). Text read as follows: “In the case of a specified plant which is planted after  December 31, 2017  (or is grafted to a plant that has already been planted before such date), subparagraph (A)(i) shall be applied by substituting for ‘50 percent’—\n“(i) in the case of a plant which is planted (or so grafted) in 2018, ‘40 percent’, and\n“(ii) in the case of a plant which is planted (or so grafted) during 2019, ‘30 percent’.”\nSubsec. (k)(6).  Pub. L. 115–97, §\u202f13201(a)(2) , amended par. (6) generally. Prior to amendment, text read as follows: “In the case of qualified property placed in service by the taxpayer after  December 31, 2017 , paragraph (1)(A) shall be applied by substituting for ‘50 percent’—\n“(A) in the case of property placed in service in 2018 (or in the case of property placed in service in 2019 and described in paragraph (2)(B) or (C) (determined by substituting ‘2019’ for ‘2020’ in paragraphs (2)(B)(i)(III) and (ii) and paragraph (2)(E)(i)), ‘40 percent’,\n“(B) in the case of property placed in service in 2019 (or in the case of property placed in service in 2020 and described in paragraph (2)(B) or (C), ‘30 percent’.”\nSubsec. (k)(8).  Pub. L. 115–97, §\u202f13201(a)(3)(B) , added par. (8).\nSubsec. (k)(9).  Pub. L. 115–97, §\u202f13201(d) , added par. (9).\nSubsec. (k)(10).  Pub. L. 115–97, §\u202f13201(e) , added par. (10).\n2015—Subsec. (e)(3)(A)(i)(I).  Pub. L. 114–113, §\u202f165(a)(1) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. (e)(3)(A)(i)(II).  Pub. L. 114–113, §\u202f165(a)(2) , substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\nSubsec. (e)(3)(E)(iv), (v).  Pub. L. 114–113, §\u202f123(a) , struck out “placed in service before  January 1, 2015 ” after “property”.\nSubsec. (e)(3)(E)(ix).  Pub. L. 114–113, §\u202f123(b) , struck out “placed in service after  December 31, 2008 , and before  January 1, 2015 ” after “property”.\nSubsec. (e)(6).  Pub. L. 114–113, §\u202f143(b)(6)(A) , in introductory provisions, substituted “For purposes of this subsection—” for “The term ‘qualified leasehold improvement property’ has the meaning given such term in section 168(k)(3) except that the following special rules shall apply:”; added subpars. (A) to (C) and redesignated former subpars. (A) and (B) as (D) and (E), respectively; and, in subpar. (E), substituted “subparagraph (D)” for “subparagraph (A)” in introductory provisions.\nSubsec. (e)(7)(B).  Pub. L. 114–113, §\u202f143(b)(6)(B) , substituted “qualified improvement property” for “qualified leasehold improvement property”.\nSubsec. (e)(8)(D).  Pub. L. 114–113, §\u202f143(b)(6)(C) , struck out subpar. (D). Text read as follows: “Property described in this paragraph which is not qualified leasehold improvement property shall not be considered qualified property for purposes of subsection (k).”\nSubsec. (i)(15)(D).  Pub. L. 114–113, §\u202f166(a) , substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\nSubsec. (j)(8).  Pub. L. 114–113, §\u202f167(b) , added par. (8). Former par. (8) redesignated (9).\nPub. L. 114–113, §\u202f167(a) , substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\nSubsec. (j)(9).  Pub. L. 114–113, §\u202f167(b) , redesignated par. (8) as (9).\nSubsec. (k).  Pub. L. 114–113, §\u202f143(b)(6)(J) , substituted “and before  January 1, 2020 ” for “and before  January 1, 2016 ” in heading.\nPub. L. 114–113, §\u202f143(a)(4)(A) , substituted “ January 1, 2016 ” for “ January 1, 2015 ” in heading.\nSubsec. (k)(2).  Pub. L. 114–113, §\u202f143(b)(1) , amended par. (2) generally. Prior to amendment, par. (2) related to meaning of qualified property for purposes of subsec. (k).\nPub. L. 114–113, §\u202f143(a)(1)(B) , substituted “ January 1, 2016 ” for “ January 1, 2015 ” wherever appearing.\nSubsec. (k)(2)(A)(iv).  Pub. L. 114–113, §\u202f143(a)(1)(A) , substituted “ January 1, 2017 ” for “ January 1, 2016 ”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 114–113, §\u202f143(a)(4)(B) , substituted “pre- January 1, 2016 ” for “pre- January 1, 2015 ” in heading.\nSubsec. (k)(3).  Pub. L. 114–113, §\u202f143(b)(2) , amended par. (3) generally. Prior to amendment, par. (3) related to meaning of qualified leasehold improvement property for purposes of subsec. (k).\nSubsec. (k)(4).  Pub. L. 114–113, §\u202f143(b)(3) , amended par. (4) generally. Prior to amendment, par. (4) related to election to accelerate the AMT and research credits in lieu of bonus depreciation.\nSubsec. (k)(4)(D)(iii)(II).  Pub. L. 114–113, §\u202f143(a)(3)(A) , substituted “ January 1, 2016 ” for “ January 1, 2015 ”.\nSubsec. (k)(4)(L).  Pub. L. 114–113, §\u202f143(a)(3)(B) , added subpar. (L).\nSubsec. (k)(5).  Pub. L. 114–113, §\u202f143(b)(4)(B) , added par. (5).\nPub. L. 114–113, §\u202f143(b)(4)(A) , struck out par. (5). Text read as follows: “In the case of qualified property acquired by the taxpayer (under rules similar to the rules of clauses (ii) and (iii) of paragraph (2)(A)) after  September 8, 2010 , and before  January 1, 2012 , and which is placed in service by the taxpayer before  January 1, 2012  ( January 1, 2013 , in the case of property described in subparagraph (2)(B) or (2)(C)), paragraph (1)(A) shall be applied by substituting ‘100 percent’ for ‘50 percent’.”\nSubsec. (k)(6).  Pub. L. 114–113, §\u202f143(b)(5) , added par. (6).\nSubsec. (k)(7).  Pub. L. 114–113, §\u202f143(b)(6)(D) , added par. (7).\nSubsec. ( l )(2)(D).  Pub. L. 114–113, §\u202f189(a) , substituted “ January 1, 2017 ” for “ January 1, 2015 ”.\nSubsec. ( l )(3)(A).  Pub. L. 114–113, §\u202f143(b)(6)(E)(i) , substituted “subsection (k)” for “section 168(k)”.\nSubsec. ( l )(3)(B).  Pub. L. 114–113, §\u202f143(b)(6)(E)(ii) , substituted “subsection (k)(2)(D)” for “section 168(k)(2)(D)(i)”.\nSubsec. ( l )(4).  Pub. L. 114–113, §\u202f143(b)(6)(F) , substituted “subsection (k)(2)(E) shall apply.” for “subparagraph (E) of section 168(k)(2) shall apply, except that such subparagraph shall be applied—\n“(A) by substituting ‘the date of the enactment of subsection ( l )’ for ‘ December 31, 2007 ’ each place it appears therein, and\n“(B) by substituting ‘qualified second generation biofuel plant property’ for ‘qualified property’ in clause (iv) thereof.”\nSubsec. ( l )(5).  Pub. L. 114–113, §\u202f143(b)(6)(G) , substituted “subsection (k)(2)(G)” for “section 168(k)(2)(G)”.\n2014—Subsec. (b)(5).  Pub. L. 113–295, §\u202f210(g)(2)(A) , substituted “paragraph (2)(D)” for “paragraph (2)(C)”.\nSubsec. (e)(3)(A)(i)(I).  Pub. L. 113–295, §\u202f121(a)(1) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (e)(3)(A)(i)(II).  Pub. L. 113–295, §\u202f121(a)(2) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (e)(3)(E)(iv), (v), (ix).  Pub. L. 113–295, §\u202f122(a) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (e)(7)(B), (8)(D).  Pub. L. 113–295, §\u202f211(b) , inserted “which is not qualified leasehold improvement property” after “Property described in this paragraph”.\nSubsec. (i)(15)(D).  Pub. L. 113–295, §\u202f123(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (i)(18)(A)(ii), (19)(A)(ii).  Pub. L. 113–295, §\u202f210(c) , substituted “16 years” for “10 years”.\nSubsec. (j)(8).  Pub. L. 113–295, §\u202f124(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (k).  Pub. L. 113–295, §\u202f125(d)(1) , substituted “ January 1, 2015 ” for “ January 1, 2014 ” in heading.\nSubsec. (k)(2).  Pub. L. 113–295, §\u202f125(a)(2) , substituted “ January 1, 2015 ” for “ January 1, 2014 ” wherever appearing.\nSubsec. (k)(2)(A)(iv).  Pub. L. 113–295, §\u202f125(a)(1) , substituted “ January 1, 2016 ” for “ January 1, 2015 ”.\nSubsec. (k)(2)(B)(i)(IV).  Pub. L. 113–295, §\u202f214(b) , substituted “clause also applies” for “clauses also apply”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 113–295, §\u202f125(d)(2) , substituted “pre- January 1, 2015 ” for “pre- January 1, 2014 ” in heading.\nSubsec. (k)(4)(C)(i).  Pub. L. 113–295, §\u202f210(g)(2)(B) , substituted “subsection (b)(2)(D)” for “subsection (b)(2)(C)” in concluding provisions.\nSubsec. (k)(4)(D)(iii)(II).  Pub. L. 113–295, §\u202f125(c)(1) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (k)(4)(E)(iv).  Pub. L. 113–295, §\u202f212(b) , substituted “adjusted net minimum tax” for “adjusted minimum tax”.\nSubsec. (k)(4)(J)(iii).  Pub. L. 113–295, §\u202f202(e) , substituted “its first taxable year ending after  December 31, 2010 ” for “any taxable year ending after  December 31, 2010 ” in introductory provisions.\nSubsec. (k)(4)(K).  Pub. L. 113–295, §\u202f125(c)(2) , added subpar. (K).\nSubsec. ( l )(2)(D).  Pub. L. 113–295, §\u202f157(a) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (m)(2)(B)(i).  Pub. L. 113–295, §\u202f210(d) , substituted “subsection (k) (determined without regard to paragraph (4) thereof)” for “section 168(k)”.\nSubsec. (n)(2)(C)(ii).  Pub. L. 113–295, §\u202f125(d)(3) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\n2013—Subsec. (e)(3)(E)(iv), (v), (ix).  Pub. L. 112–240, §\u202f311(a) , substituted “ January 1, 2014 ” for “ January 1, 2012 ”.\nSubsec. (i)(9)(A)(ii).  Pub. L. 112–240, §\u202f331(d) , inserted “(respecting all elections made by the taxpayer under this section)” after “such property”.\nSubsec. (i)(15)(D).  Pub. L. 112–240, §\u202f312(a) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\nSubsec. (j)(8).  Pub. L. 112–240, §\u202f313(a) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\nSubsec. (k).  Pub. L. 112–240, §\u202f331(e)(1) , substituted “ January 1, 2014 ” for “ January 1, 2013 ” in heading.\nSubsec. (k)(2).  Pub. L. 112–240, §\u202f331(a)(2) , substituted “ January 1, 2014 ” for “ January 1, 2013 ” wherever appearing.\nSubsec. (k)(2)(A)(iv).  Pub. L. 112–240, §\u202f331(a)(1) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 112–240, §\u202f331(e)(2) , substituted “pre- January 1, 2014 ” for “pre- January 1, 2013 ” in heading.\nSubsec. (k)(4)(D)(iii)(II).  Pub. L. 112–240, §\u202f331(c)(1) , substituted “2014” for “2013”.\nSubsec. (k)(4)(J).  Pub. L. 112–240, §\u202f331(c)(2) , added subpar. (J).\nSubsec. ( l ).  Pub. L. 112–240, §\u202f410(b)(2)(C) , substituted “second generation” for “cellulosic” in heading.\nPub. L. 112–240, §\u202f410(b)(2)(A) , substituted “second generation biofuel” for “cellulosic biofuel” wherever appearing in text.\nSubsec. ( l )(2).  Pub. L. 112–240, §\u202f410(b)(2)(D) , substituted “second generation” for “cellulosic” in heading.\nSubsec. ( l )(2)(A).  Pub. L. 112–240, §\u202f410(b)(1) , substituted “solely to produce second generation biofuel (as defined in section 40(b)(6)(E))” for “solely to produce cellulosic biofuel”.\nSubsec. ( l )(2)(D).  Pub. L. 112–240, §\u202f410(a)(1) , substituted “ January 1, 2014 ” for “ January 1, 2013 ”.\nSubsec. ( l )(3) to (8).  Pub. L. 112–240, §\u202f410(b)(2)(B) , redesignated pars. (4) to (8) as (3) to (7), respectively, and struck out former par. (3). Text read as follows: “The term ‘cellulosic biofuel’ means any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis.”\nSubsec. (n)(2)(C)(ii).  Pub. L. 112–240, §\u202f331(e)(3) , substituted “ January 1, 2014 ” for “ January 1, 2013 ”.\n2010—Subsec. (e)(3)(E)(iv), (v), (ix).  Pub. L. 111–312, §\u202f737(a) , substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\nSubsec. (e)(7)(A)(i).  Pub. L. 111–312, §\u202f737(b)(1) , struck out “if such building is placed in service after  December 31, 2008 , and before  January 1, 2010 ,” after “building,”.\nSubsec. (e)(8)(E).  Pub. L. 111–312, §\u202f737(b)(2) , struck out subpar. (E). Text read as follows: “Such term shall not include any improvement placed in service after  December 31, 2009 .”\nSubsec. (i)(15)(D).  Pub. L. 111–312, §\u202f738(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (j)(8).  Pub. L. 111–312, §\u202f739(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (k).  Pub. L. 111–312, §\u202f401(d)(1) , substituted “ January 1, 2013 ” for “ January 1, 2011 ” in heading.\nPub. L. 111–240, §\u202f2022(b)(1) , substituted “ January 1, 2011 ” for “ January 1, 2010 ” in heading.\nSubsec. (k)(2)(A)(iii).  Pub. L. 111–312, §\u202f401(a)(2) , substituted “ January 1, 2013 ” for “ January 1, 2011 ” in subcls. (I) and (II).\nPub. L. 111–240, §\u202f2022(a)(2) , substituted “ January 1, 2011 ” for “ January 1, 2010 ” in subcls. (I) and (II).\nSubsec. (k)(2)(A)(iv).  Pub. L. 111–312, §\u202f401(a) , substituted “ January 1, 2013 ” for “ January 1, 2011 ” and “ January 1, 2014 ” for “ January 1, 2012 ”.\nPub. L. 111–240, §\u202f2022(a) , substituted “ January 1, 2011 ” for “ January 1, 2010 ” and “ January 1, 2012 ” for “ January 1, 2011 ”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 111–312, §\u202f401(a)(2) , (d)(2), substituted “pre- January 1, 2013 ” for “pre- January 1, 2011 ” in heading and “ January 1, 2013 ” for “ January 1, 2011 ” in text.\nPub. L. 111–240, §\u202f2022(a)(2) , (b)(2), substituted “pre- January 1, 2011 ” for “pre- January 1, 2010 ” in heading and “ January 1, 2011 ” for “ January 1, 2010 ” in text.\nSubsec. (k)(2)(E)(i).  Pub. L. 111–312, §\u202f401(a)(2) , substituted “ January 1, 2013 ” for “ January 1, 2011 ”.\nPub. L. 111–240, §\u202f2022(a)(2) , substituted “ January 1, 2011 ” for “ January 1, 2010 ”.\nSubsec. (k)(4)(D)(ii).  Pub. L. 111–312, §\u202f401(d)(3)(B) , inserted “and” at the end.\nSubsec. (k)(4)(D)(iii).  Pub. L. 111–312, §\u202f401(d)(3)(C) , substituted period for comma at the end.\nPub. L. 111–312, §\u202f401(c)(1) , substituted “or production—” for “or production after  March 31, 2008 , and before  January 1, 2010 , shall be taken into account under subparagraph (B)(ii) thereof,” and added subcls. (I) and (II) and concluding provisions.\nSubsec. (k)(4)(D)(iv), (v).  Pub. L. 111–312, §\u202f401(d)(3)(A) , struck out cls. (iv) and (v) which read as follows:\n“(iv) ‘ January 1, 2011 ’ shall be substituted for ‘ January 1, 2012 ’ in subparagraph (A)(iv) thereof, and\n“(v) ‘ January 1, 2010 ’ shall be substituted for ‘ January 1, 2011 ’ each place it appears in subparagraph (A) thereof.”\nPub. L. 111–240, §\u202f2022(b)(3) , added cls. (iv) and (v).\nSubsec. (k)(4)(I).  Pub. L. 111–312, §\u202f401(c)(2) , added subpar. (I).\nSubsec. (k)(5).  Pub. L. 111–312, §\u202f401(b) , added par. (5).\nSubsec. ( l )(5)(A).  Pub. L. 111–312, §\u202f401(d)(4)(A) , inserted “and” at the end.\nSubsec. ( l )(5)(B).  Pub. L. 111–312, §\u202f401(d)(4)(B) , (C), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “by substituting ‘ January 1, 2013 ’ for ‘ January 1, 2011 ’ in clause (i) thereof, and”.\nPub. L. 111–240, §\u202f2022(b)(4) , substituted “ January 1, 2011 ” for “ January 1, 2010 ”.\nSubsec. ( l )(5)(C).  Pub. L. 111–312, §\u202f401(d)(4)(C) , redesignated subpar. (C) as (B).\nSubsec. (n)(2)(C)(ii).  Pub. L. 111–312, §\u202f401(d)(5) , substituted “ January 1, 2013 ” for “ January 1, 2011 ”.\nPub. L. 111–240, §\u202f2022(b)(5) , substituted “ January 1, 2011 ” for “ January 1, 2010 ”.\n2009—Subsec. (k).  Pub. L. 111–5, §\u202f1201(a)(2)(A) , substituted “ January 1, 2010 ” for “ January 1, 2009 ” in heading.\nSubsec. (k)(2)(A)(iii)(I), (II).  Pub. L. 111–5, §\u202f1201(a)(1)(B) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\nSubsec. (k)(2)(A)(iv).  Pub. L. 111–5, §\u202f1201(a)(1) , substituted “ January 1, 2010 ,” for “ January 1, 2009 ,” and “ January 1, 2011 .” for “ January 1, 2010 .”\nSubsec. (k)(2)(B)(ii).  Pub. L. 111–5, §\u202f1201(a)(1)(B) , (2)(B), substituted “pre- January 1, 2010 ” for “pre- January 1, 2009 ” in heading and “ January 1, 2010 ” for “ January 1, 2009 ” in text.\nSubsec. (k)(2)(E)(i).  Pub. L. 111–5, §\u202f1201(a)(1)(B) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\nSubsec. (k)(4)(D)(ii).  Pub. L. 111–5, §\u202f1201(a)(3)(A)(i) , (iii), added cl. (ii). Former cl. (ii) redesignated (iii).\nSubsec. (k)(4)(D)(iii).  Pub. L. 111–5, §\u202f1201(b)(1)(A) , substituted “2010” for “2009”.\nPub. L. 111–5, §\u202f1201(a)(3)(A)(ii) , redesignated cl. (ii) as (iii).\nSubsec. (k)(4)(H).  Pub. L. 111–5, §\u202f1201(b)(1)(B) , added subpar. (H).\nSubsec. ( l )(5)(B).  Pub. L. 111–5, §\u202f1201(a)(2)(C) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\nSubsec. (n)(2)(C)(ii).  Pub. L. 111–5, §\u202f1201(a)(2)(D) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\n2008—Subsec. (b)(2)(C), (D).  Pub. L. 110–343, §\u202f306(c) , added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (b)(3)(I).  Pub. L. 110–343, §\u202f305(c)(3) , added subpar. (I).\nSubsec. (e)(3)(A)(i).  Pub. L. 110–246, §\u202f15344(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any race horse which is more than 2 years old at the time it is placed in service,”.\nSubsec. (e)(3)(B)(vii).  Pub. L. 110–343, §\u202f505(a) , added cl. (vii).\nSubsec. (e)(3)(D)(iii), (iv).  Pub. L. 110–343, §\u202f306(a) , added cls. (iii) and (iv).\nSubsec. (e)(3)(E)(iv), (v).  Pub. L. 110–343, §\u202f305(a)(1) , substituted “ January 1, 2010 ” for “ January 1, 2008 ”.\nSubsec. (e)(3)(E)(ix).  Pub. L. 110–343, §\u202f305(c)(1) , added cl. (ix).\nSubsec. (e)(7).  Pub. L. 110–343, §\u202f305(b)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualified restaurant property’ means any section 1250 property which is an improvement to a building if—\n“(A) such improvement is placed in service more than 3 years after the date such building was first placed in service, and\n“(B) more than 50 percent of the building’s square footage is devoted to preparation of, and seating for on-premises consumption of, prepared meals.”\nSubsec. (e)(8).  Pub. L. 110–343, §\u202f305(c)(2) , added par. (8).\nSubsec. (g)(3)(B).  Pub. L. 110–343, §\u202f505(b) , inserted table item relating to subpar. (B)(vii).\nPub. L. 110–343, §\u202f305(c)(4) , inserted table item relating to subpar. (E)(ix).\nSubsec. (i)(15)(D).  Pub. L. 110–343, §\u202f317(a) , substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\nSubsec. (i)(18), (19).  Pub. L. 110–343, §\u202f306(b) , added pars. (18) and (19).\nSubsec. (j)(8).  Pub. L. 110–343, §\u202f315(a) , substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\nSubsec. (k).  Pub. L. 110–185, §\u202f103(c)(11) , substituted “ December 31, 2007 ” for “ September 10, 2001 ” and “ January 1, 2009 ” for “ January 1, 2005 ” in heading.\nPub. L. 110–185, §\u202f103(a)(1) , (3), substituted “ December 31, 2007 ” for “ September 10, 2001 ” and “ January 1, 2009 ” for “ January 1, 2005 ” wherever appearing in text.\nSubsec. (k)(1)(A).  Pub. L. 110–185, §\u202f103(b) , substituted “50 percent” for “30 percent”.\nSubsec. (k)(2)(A)(iii)(I).  Pub. L. 110–185, §\u202f103(a)(2) , substituted “ January 1, 2008 ” for “ September 11, 2001 ”.\nSubsec. (k)(2)(A)(iv).  Pub. L. 110–185, §\u202f103(a)(4) , substituted “ January 1, 2010 ” for “ January 1, 2006 ”.\nSubsec. (k)(2)(B)(i)(I).  Pub. L. 110–185, §\u202f103(c)(1) , substituted “(iii), and (iv)” for “and (iii)”.\nSubsec. (k)(2)(B)(i)(IV).  Pub. L. 110–185, §\u202f103(c)(2) , which directed substitution of “clause (iii)” for “clauses (ii) and (iii)”, was executed by substituting “clause (iii)” for “clause (ii) or (iii)” to reflect the probable intent of Congress.\nSubsec. (k)(2)(B)(ii).  Pub. L. 110–185, §\u202f103(c)(12) , substituted “pre- January 1, 2009 ” for “pre- January 1, 2005 ” in heading.\nSubsec. (k)(2)(C)(i).  Pub. L. 110–185, §\u202f103(c)(3) , substituted “,\u2000(iii), and (iv)” for “and (iii)”.\nSubsec. (k)(2)(D)(iii).  Pub. L. 110–185, §\u202f103(c)(5)(B) , struck out last sentence which read as follows: “The preceding sentence shall be applied separately with respect to property treated as qualified property by paragraph (4) and other qualified property.”\nSubsec. (k)(2)(F)(i).  Pub. L. 110–185, §\u202f103(c)(4) , substituted “$8,000” for “$4,600”.\nSubsec. (k)(4).  Pub. L. 110–289  added par. (4).\nPub. L. 110–185, §\u202f103(c)(5)(A) , struck out par. (4) which related to treatment of 50-percent bonus depreciation for certain property.\nSubsec. (k)(4)(B)(iii).  Pub. L. 110–185, §\u202f103(a)(4) , substituted “ January 1, 2010 ” for “ January 1, 2006 ”.\nSubsec. ( l ).  Pub. L. 110–343, §\u202f201(b)(1) , (2), substituted “cellulosic biofuel” for “cellulosic biomass ethanol” in heading and wherever appearing in text.\nSubsec. ( l )(2).  Pub. L. 110–343, §\u202f201(b)(3) , substituted “cellulosic biofuel” for “cellulosic biomass ethanol” in heading.\nSubsec. ( l )(3).  Pub. L. 110–343, §\u202f201(a) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘cellulosic biomass ethanol’ means ethanol produced by hydrolysis of any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis.”\nSubsec. ( l )(4).  Pub. L. 110–185, §\u202f103(c)(6) , added subpar. (A) and redesignated former subpars. (A) to (C) as (B) to (D), respectively.\nSubsec. ( l )(5)(A).  Pub. L. 110–185, §\u202f103(c)(7)(A) , substituted “ December 31, 2007 ” for “ September 10, 2001 ”.\nSubsec. ( l )(5)(B).  Pub. L. 110–185, §\u202f103(c)(7)(B) , substituted “ January 1, 2009 ” for “ January 1, 2005 ”.\nSubsec. (m).  Pub. L. 110–343, §\u202f308(a) , added subsec. (m).\nSubsec. (n).  Pub. L. 110–343, §\u202f710(a) , added subsec. (n).\n2007—Subsec. ( l )(3).  Pub. L. 110–172  struck out “enzymatic” before “hydrolysis”.\n2006—Subsec. (e)(3)(E)(iv), (v).  Pub. L. 109–432, §\u202f113(a) , substituted “2008” for “2006”.\nSubsec. (j)(8).  Pub. L. 109–432, §\u202f112(a) , substituted “2007” for “2005”.\nSubsec. ( l ).  Pub. L. 109–432, §\u202f209(a) , added subsec. ( l ).\n2005—Subsec. (e)(3)(B)(vi)(I).  Pub. L. 109–135, §\u202f410(a) , substituted “if ‘solar or wind energy’ were substituted for ‘solar energy’ in clause (i) thereof” for “if ‘solar and wind’ were substituted for ‘solar’ in clause (i) thereof”.\nPub. L. 109–58, §\u202f1301(f)(5) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “is described in subparagraph (A) of section 48(a)(3) (or would be so described if ‘solar and wind’ were substituted for ‘solar’ in clause (i) thereof),”.\nSubsec. (e)(3)(C)(iv), (v).  Pub. L. 109–58, §\u202f1326(a) , added cl. (iv) and redesignated former cl. (iv) as (v).\nSubsec. (e)(3)(E)(vii).  Pub. L. 109–58, §\u202f1308(a) , added cl. (vii).\nSubsec. (e)(3)(E)(viii).  Pub. L. 109–58, §\u202f1325(a) , added cl. (viii).\nSubsec. (g)(3)(B).  Pub. L. 109–58, §\u202f1326(c) , inserted table item relating to subpar. (C)(iv).\nPub. L. 109–58, §\u202f1325(b) , inserted table item relating to subpar. (E)(viii).\nPub. L. 109–58, §\u202f1308(b) , inserted table item relating to subpar. (E)(vii).\nSubsec. (i)(15)(D).  Pub. L. 109–135, §\u202f412(s) , substituted “Such term shall not include” for “This paragraph shall not apply to”.\nSubsec. (i)(17).  Pub. L. 109–58, §\u202f1326(b) , added par. (17).\nSubsec. (k)(2)(A)(iv).  Pub. L. 109–135, §\u202f403(j)(1) , substituted “subparagraph (B) or (C)” for “subparagraphs (B) and (C)”.\nSubsec. (k)(4)(B)(ii).  Pub. L. 109–135, §\u202f405(a)(1) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “which is acquired by the taxpayer after  May 5, 2003 , and before  January 1, 2005 , but only if no written binding contract for the acquisition was in effect before  May 6, 2003 , and”.\nSubsec. (k)(4)(B)(iii).  Pub. L. 109–135, §\u202f403(j)(2) , substituted “or paragraph (2)(C) (as so modified)” for “and paragraph (2)(C)”.\n2004—Subsec. (b)(2)(A).  Pub. L. 108–357, §\u202f211(d)(2) , inserted “not referred to in paragraph (3)” before comma at end.\nSubsec. (b)(3)(G), (H).  Pub. L. 108–357, §\u202f211(d)(1) , added subpars. (G) and (H).\nSubsec. (e)(3)(C)(ii).  Pub. L. 108–357, §\u202f704(a) , added cl. (ii). Former cl. (ii) redesignated (iii).\nSubsec. (e)(3)(C)(iii).  Pub. L. 108–357, §\u202f706(a) , added cl. (iii). Former cl. (iii) redesignated (iv).\nPub. L. 108–357, §\u202f704(a) , redesignated cl. (ii) as (iii).\nSubsec. (e)(3)(C)(iv).  Pub. L. 108–357, §\u202f706(a) , redesignated cl. (iii) as (iv).\nSubsec. (e)(3)(E)(iv), (v).  Pub. L. 108–357, §\u202f211(a) , added cls. (iv) and (v).\nSubsec. (e)(3)(E)(vi).  Pub. L. 108–357, §\u202f901(a) , added cl. (vi).\nSubsec. (e)(3)(F).  Pub. L. 108–357, §\u202f901(b) , added subpar. (F).\nSubsec. (e)(6), (7).  Pub. L. 108–357, §\u202f211(b) , (c), added pars. (6) and (7).\nSubsec. (g)(3)(A).  Pub. L. 108–357, §\u202f847(a) , inserted “(notwithstanding any other subparagraph of this paragraph)” after “shall”.\nSubsec. (g)(3)(B).  Pub. L. 108–357, §\u202f901(c) , inserted table items relating to subpars. (E)(vi) and (F).\nPub. L. 108–357, §\u202f706(c) , which directed amendment of table by inserting item relating to subpar. (C)(iii) after item relating to subpar. (C)(ii), was executed by making the insertion after item relating to subpar. (C)(i) to reflect the probable intent of Congress.\nPub. L. 108–357, §\u202f211(e) , inserted table items relating to subpars. (E)(iv) and (E)(v).\nSubsec. (h)(2)(A).  Pub. L. 108–357, §\u202f847(e) , added cl. (iv) and concluding provisions.\nSubsec. (h)(3)(A).  Pub. L. 108–357, §\u202f847(d) , inserted at end “Notwithstanding subsection (i)(3)(A)(i), in determining a lease term for purposes of the preceding sentence, there shall not be taken into account any option of the lessee to renew at the fair market value rent determined at the time of renewal; except that the aggregate period not taken into account by reason of this sentence shall not exceed 24 months.”\nSubsec. (i)(3)(A)(ii), (iii).  Pub. L. 108–357, §\u202f847(c) , added cl. (ii) and redesignated former cl. (ii) as (iii).\nSubsec. (i)(15).  Pub. L. 108–357, §\u202f704(b) , added par. (15).\nSubsec. (i)(16).  Pub. L. 108–357, §\u202f706(b) , added par. (16).\nSubsec. (j)(8).  Pub. L. 108–311, §\u202f316 , substituted “2005” for “2004”.\nSubsec. (k)(2)(A)(iv).  Pub. L. 108–357, §\u202f336(a)(2) , substituted “subparagraphs (B) and (C)” for “subparagraph (B)”.\nSubsec. (k)(2)(B)(i).  Pub. L. 108–311, §\u202f403(a)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘qualified property’ includes property—\n“(I) which meets the requirements of clauses (i), (ii), and (iii) of subparagraph (A),\n“(II) which has a recovery period of at least 10 years or is transportation property, and\n“(III) which is subject to section 263A by reason of clause (ii) or (iii) of subsection (f)(1)(B) thereof.”\nSubsec. (k)(2)(B)(iv).  Pub. L. 108–357, §\u202f336(b)(1) , added cl. (iv).\nSubsec. (k)(2)(C).  Pub. L. 108–357, §\u202f336(a)(1) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (k)(2)(D).  Pub. L. 108–357, §\u202f336(a)(1) , redesignated subpar. (C) as (D). Former subpar. (D) redesignated (E).\nSubsec. (k)(2)(D)(ii).  Pub. L. 108–311, §\u202f408(a)(6)(A) , inserted “is” after “if property” in introductory provisions.\nPub. L. 108–311, §\u202f403(a)(2)(B) , inserted “clause (iii) and” before “subparagraph (A)(ii)” in introductory provisions.\nSubsec. (k)(2)(D)(ii)(I).  Pub. L. 108–311, §\u202f408(a)(6)(B) , struck out “is” before “originally”.\nSubsec. (k)(2)(D)(iii), (iv).  Pub. L. 108–311, §\u202f403(a)(2)(A) , added cls. (iii) and (iv).\nSubsec. (k)(2)(E).  Pub. L. 108–357, §\u202f336(a)(1) , redesignated subpar. (D) as (E). Former subpar. (E) redesignated (F).\nSubsec. (k)(2)(E)(iii)(II).  Pub. L. 108–357, §\u202f337(a) , which directed amendment of subcl. (II) by inserting before comma at end “(or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months)”, was executed by making the insertion before “,\u2000and” to reflect the probable intent of Congress.\nSubsec. (k)(2)(F).  Pub. L. 108–357, §\u202f336(a)(1) , redesignated subpar. (E) as (F). Former subpar. (F) redesignated (G).\nPub. L. 108–311, §\u202f408(a)(8) , substituted “minimum” for “miniumum” in heading.\nSubsec. (k)(2)(G).  Pub. L. 108–357, §\u202f336(a)(1) , redesignated subpar. (F) as (G).\nSubsec. (k)(4)(A)(ii).  Pub. L. 108–357, §\u202f336(b)(2) , substituted “paragraph (2)(D)” for “paragraph (2)(C)”.\nSubsec. (k)(4)(B)(iii).  Pub. L. 108–357, §\u202f336(b)(3) , inserted “and paragraph (2)(C)” after “of this paragraph)”.\nSubsec. (k)(4)(C).  Pub. L. 108–357, §\u202f336(b)(4) , substituted “subparagraphs (B), (C), and (E)” for “subparagraphs (B) and (D)”.\nSubsec. (k)(4)(D).  Pub. L. 108–357, §\u202f336(b)(5) , substituted “Paragraph (2)(F)” for “Paragraph (2)(E)”.\n2003—Subsec. (k).  Pub. L. 108–27, §\u202f201(c)(1) , substituted “ January 1, 2005 ” for “ September 11, 2004 ” in heading.\nSubsec. (k)(2)(A)(iii).  Pub. L. 108–27, §\u202f201(b)(2) , substituted “ January 1, 2005 ” for “ September 11, 2004 ” in subcls. (I) and (II).\nSubsec. (k)(2)(B)(ii).  Pub. L. 108–27, §\u202f201(b)(1) , substituted “pre- January 1, 2005 ” for “pre- September 11, 2004 ” in heading and “ January 1, 2005 ” for “ September 11, 2004 ” in text.\nSubsec. (k)(2)(C)(iii).  Pub. L. 108–27, §\u202f201(b)(3) , inserted at end “The preceding sentence shall be applied separately with respect to property treated as qualified property by paragraph (4) and other qualified property.”\nSubsec. (k)(2)(D)(i).  Pub. L. 108–27, §\u202f201(b)(1)(A) , substituted “ January 1, 2005 ” for “ September 11, 2004 ”.\nSubsec. (k)(4).  Pub. L. 108–27, §\u202f201(a) , added par. (4).\n2002—Subsec. (j)(8).  Pub. L. 107–147, §\u202f613(b) , substituted “ December 31, 2004 ” for “ December 31, 2003 ”.\nSubsec. (k).  Pub. L. 107–147, §\u202f101(a) , added subsec. (k).\n1998—Subsec. (c).  Pub. L. 105–206, §\u202f6006(b)(2) , reenacted subsec. heading without change and substituted “For purposes of this section, the applicable recovery period shall be determined in accordance with the following table:” for “For purposes of this section—\n“(1)  In general .—Except as provided in paragraph (2), the applicable recovery period shall be determined in accordance with the following table:”.\nSubsec. (c)(2).  Pub. L. 105–206, §\u202f6006(b)(1) , struck out heading and text of par. (2). Text read as follows: “In the case of property to which an election under subsection (b)(2)(C) applies, the applicable recovery period shall be determined under the table contained in subsection (g)(2)(C).”\n1997—Subsec. (e)(3)(A)(iii).  Pub. L. 105–34, §\u202f1086(b)(1) , added cl. (iii).\nSubsec. (g)(3)(B).  Pub. L. 105–34, §\u202f1086(b)(2) , inserted table item relating to subpar. (A)(iii).\nSubsec. (i)(8)(C).  Pub. L. 105–34, §\u202f1213(c) , added subpar. (C).\nSubsec. (i)(14).  Pub. L. 105–34, §\u202f1086(b)(3) , added par. (14).\nSubsec. (j)(6).  Pub. L. 105–34, §\u202f1604(c)(1) , inserted concluding provisions “For purposes of the preceding sentence, such section 3(d) shall be applied by treating the term ‘former Indian reservations in Oklahoma’ as including only lands which are within the jurisdictional area of an Oklahoma Indian tribe (as determined by the Secretary of the Interior) and are recognized by such Secretary as eligible for trust land status under 25 CFR Part 151 (as in effect on the date of the enactment of this sentence).”\n1996—Subsec. (b)(3)(F).  Pub. L. 104–188, §\u202f1613(b)(1) , added subpar. (F).\nSubsec. (c)(1).  Pub. L. 104–188, §\u202f1613(b)(2) , inserted table item relating to water utility property.\nSubsec. (e)(3)(B).  Pub. L. 104–188, §\u202f1702(h)(1)(B) , inserted closing provisions.\nSubsec. (e)(3)(B)(vi)(I).  Pub. L. 104–188, §\u202f1704(t)(54) , provided that  section 11813(b)(9)(A)(i) of Pub. L. 101–508  shall be applied as if a comma appeared after “(3)(A)(ix)” in the material proposed to be stricken. See 1990 Amendment note below.\nSubsec. (e)(3)(B)(vi)(III).  Pub. L. 104–188, §\u202f1702(h)(1)(A) , added subcl. (III).\nSubsec. (e)(3)(E)(iii).  Pub. L. 104–188, §\u202f1120(a) , added cl. (iii).\nSubsec. (e)(3)(F).  Pub. L. 104–188, §\u202f1613(b)(3)(B)(i) , struck out subpar. (F) which read as follows: “20- year property .—The term ‘20-year property’ includes any municipal sewers.”\nSubsec. (e)(5).  Pub. L. 104–188, §\u202f1613(b)(3)(A) , added par. (5).\nSubsec. (g)(2)(C)(iv).  Pub. L. 104–188, §\u202f1613(b)(4) , inserted “or water utility property” after “tunnel bore”.\nSubsec. (g)(3)(B).  Pub. L. 104–188, §\u202f1120(b) , inserted table item relating to subpar. (E)(iii).\nPub. L. 104–188, §\u202f1613(b)(3)(B)(ii) , struck out table item relating to subpar. (F) for which the class life was 50.\nSubsec. (g)(4)(K).  Pub. L. 104–188, §\u202f1702(h)(1)(C) , substituted “section 48( l )(3)(A)(ix) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” for “section 48(a)(3)(A)(iii)”.\nSubsec. (i)(8).  Pub. L. 104–188, §\u202f1121(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of any building erected (or improvements made) on leased property, if such building or improvement is property to which this section applies, the depreciation deduction shall be determined under the provisions of this section.”\n1995—Subsec. (g)(4)(B)(i).  Pub. L. 104–88  substituted “rail carrier subject to part A of subtitle IV” for “domestic railroad corporation providing transportation subject to subchapter I of chapter 105”.\n1993—Subsec. (c)(1).  Pub. L. 103–66, §\u202f13151(a) , substituted “39 years” for “31.5 years” in table item relating to nonresidential real property.\nSubsec. (j).  Pub. L. 103–66, §\u202f13321(a) , added subsec. (j).\n1990—Subsec. (e)(2)(A).  Pub. L. 101–508, §\u202f11812(b)(2)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “The term ‘residential rental property’ has the meaning given such term by section 167(j)(2)(B).”\nSubsec. (e)(3)(B)(vi)(I).  Pub. L. 101–508, §\u202f11813(b)(9)(A)(i) , which directed the substitution of “subparagraph (A) of section 48(a)(3) (or would be so described if ‘solar and wind’ were substituted for ‘solar’ in clause (i) thereof)” for “paragraph (3)(A)(viii), (3)(A)(ix) or (4) of section 48( l )” was executed by making the substitution for “paragraph (3)(A)(viii), (3)(A)(ix), or (4) of section 48( l )”. See 1996 Amendment note above.\nSubsec. (e)(3)(B)(vi)(II).  Pub. L. 101–508, §\u202f11813(b)(9)(A)(ii) , inserted “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “48( l )”.\nSubsec. (e)(3)(D)(i).  Pub. L. 101–508, §\u202f11813(b)(9)(B)(i) , substituted “subsection (i)(13)” for “section 48(p)”.\nSubsec. (f)(2).  Pub. L. 101–508, §\u202f11812(b)(2)(C) , substituted “subsection (i)(10)” for “section 167( l )(3)(A).”\nSubsec. (g)(4).  Pub. L. 101–508, §\u202f11813(b)(9)(C) , substituted heading for one which read: “Property used predominantly outside the United States” and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection, rules similar to the rules under section 48(a)(2) (including the exceptions contained in subparagraph (B) thereof) shall apply in determining whether property is used predominantly outside the United States. In addition to the exceptions contained in such subparagraph (B), there shall be excepted any satellite or other spacecraft (or any interest therein) held by a United States person if such satellite or spacecraft was launched from within the United States.”\nSubsec. (i)(1).  Pub. L. 101–508, §\u202f11812(b)(2)(D) , inserted at end “The reference in this paragraph to subsection (m) of section 167 shall be treated as a reference to such subsection as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.”\nSubsec. (i)(7)(B)(i).  Pub. L. 101–508, §\u202f11801(c)(8)(B) , struck out, “371(a), 374(a),” after “361,”.\nSubsec. (i)(9)(A)(ii).  Pub. L. 101–508, §\u202f11812(b)(2)(E) , struck out “(determined without regard to section 167( l ))” after “section 167”.\nSubsec. (i)(10).  Pub. L. 101–508, §\u202f11812(b)(2)(B) , amended par. (10) generally. Prior to amendment, par. (10) read as follows: “The term ‘public utility property’ has the meaning given such term by section 167( l )(3)(A).”\nSubsec. (i)(13).  Pub. L. 101–508, §\u202f11813(b)(9)(B)(ii) , added par. (13).\n1989—Subsec. (b)(3)(D), (E).  Pub. L. 101–239, §\u202f7816(f) , redesignated subpar. (D), relating to property described in subsec. (e)(3)(D)(ii), as (E).\nSubsec. (b)(5).  Pub. L. 101–239, §\u202f7816(e)(1) , substituted “paragraph (2)(C)” for “paragraph (2)(B)”.\nSubsec. (c)(2).  Pub. L. 101–239, §\u202f7816(e)(2) , substituted “subsection (b)(2)(C)” for “subsection (b)(2)(B)”.\nSubsec. (i)(1).  Pub. L. 101–239, §\u202f7816(w) , made clarifying amendment to directory language of  Pub. L. 100–647, §\u202f6253 , see 1988 Amendment note below.\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1002(a)(11)(A) , substituted “150 percent declining balance method in certain cases” for “15-year and 20-year property” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of 15-year and 20-year property, paragraph (1) shall be applied by substituting ‘150 percent’ for ‘200 percent’.”\nSubsec. (b)(2)(B), (C).  Pub. L. 100–647, §\u202f6028(a) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (b)(3)(C).  Pub. L. 100–647, §\u202f1002(i)(2)(B)(i) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (b)(3)(D).  Pub. L. 100–647, §\u202f6029(b) , added subpar. (D) relating to property described in subsec. (e)(3)(D)(ii).\nPub. L. 100–647, §\u202f1002(i)(2)(B)(i) , redesignated subpar. (C), relating to property with respect to which the taxpayer elects under par. (5), as (D).\nSubsec. (b)(5).  Pub. L. 100–647, §\u202f1002(i)(2)(B)(ii) , substituted “paragraph (3)(D)” for “paragraph (3)(C)”.\nPub. L. 100–647, §\u202f1002(a)(11)(B) , substituted “paragraph (2)(B) or (3)(C)” for “paragraph (3)(C)”.\nSubsec. (c).  Pub. L. 100–647, §\u202f1002(a)(11)(C) , amended subsec. (c) generally, designating existing provisions as par. (1) and adding par. (2).\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f1002(i)(2)(A) , inserted table item relating to any railroad grading or tunnel bore.\nSubsec. (d)(2)(C).  Pub. L. 100–647, §\u202f1002(i)(2)(D) , added subpar. (C).\nSubsec. (d)(3)(A)(i).  Pub. L. 100–647, §\u202f1002(a)(5) , struck out “and which are” after “this section applies”.\nSubsec. (d)(3)(B).  Pub. L. 100–647, §\u202f1002(a)(23)(A) , struck out “real” after “Certain” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraph (A), nonresidential real property and residential rental property shall not be taken into account.”\nSubsec. (d)(3)(B)(i).  Pub. L. 100–647, §\u202f1002(i)(2)(E) , substituted “residential rental property, and railroad grading or tunnel bore” for “and residential rental property”.\nSubsec. (e)(3)(B)(v).  Pub. L. 100–647, §\u202f1002(a)(21) , substituted “any section 1245 property” for “any property”.\nSubsec. (e)(3)(C).  Pub. L. 100–647, §\u202f6027(b)(1)(C) , redesignated cl. (iii) as (ii), and struck out former cl. (ii) which read as follows: “any single-purpose agricultural or horticultural structure (within the meaning of section 48(p)), and”.\nSubsec. (e)(3)(D).  Pub. L. 100–647, §\u202f6029(a) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “The term ‘10-year property’ includes any single purpose agricultural or horticultural structure (within the meaning of section 48(p)).”\nPub. L. 100–647, §\u202f6027(a) , added subpar. (D). Former subpar. (D) redesignated (E).\nSubsec. (e)(3)(E), (F).  Pub. L. 100–647, §\u202f6027(a) , redesignated former subpars. (D) and (E) as (E) and (F), respectively.\nSubsec. (e)(4).  Pub. L. 100–647, §\u202f1002(i)(2)(C) , added par. (4).\nSubsec. (f)(4).  Pub. L. 100–647, §\u202f1002(a)(16)(B) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Any sound recording described in section 48(r)(5).”\nSubsec. (f)(5)(B)(ii).  Pub. L. 100–647, §\u202f1002(a)(6)(A)(i) , substituted “1st taxable year” for “1st full taxable year”.\nSubsec. (f)(5)(B)(iii).  Pub. L. 100–647, §\u202f1002(a)(6)(A)(ii) , added cl. (iii).\nSubsec. (f)(5)(C).  Pub. L. 100–647, §\u202f100–647 , §\u202f1002(a)(6)(B), added subpar. (C).\nSubsec. (g)(2)(C).  Pub. L. 100–647, §\u202f1002(i)(2)(F) , added item (iv) in table.\nSubsec. (g)(3)(B).  Pub. L. 100–647, §\u202f6029(c) , substituted “(D)(i)” for “(D)” and added item for “(D)(ii)” in table.\nPub. L. 100–647, §\u202f6027(b)(2) , substituted “(D)” for “(C)(ii)”, “(E)(i)” for “(D)(i)”, “(E)(ii)” for “(D)(ii)”, and “(F)” for “(E)” in table.\nSubsec. (h)(2)(B).  Pub. L. 100–647, §\u202f1002(a)(8) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows:\n“(i)  Income from property subject to United States tax .—Clause (iii) of subparagraph (A) shall not apply with respect to any property if more than 50 percent of the gross income for the taxable year derived by the foreign person or entity from the use of such property is—\n“(I) subject to tax under this chapter, or\n“(II) included under section 951 in the gross income of a United States shareholder for the taxable year with or within which ends the taxable year of the controlled foreign corporation in which such income was derived.\nFor purposes of the preceding sentence, any exclusion or exemption shall not apply for purposes of determining the amount of the gross income so derived, but shall apply for purposes of determining the portion of such gross income subject to tax under this chapter.\n“(ii)  Movies and sound recordings .—Clause (iii) of subparagraph (A) shall not apply with respect to any qualified film (as defined in section 48(k)(1)(B)) or any sound recording (as defined in section 48(r)(5)).”\nSubsec. (i)(1).  Pub. L. 100–647, §\u202f6253 , as amended by  Pub. L. 101–239, §\u202f7816(w) , amended par. (1) generally, substituting a single par. relating to class life for former subpar. (A) relating to class life generally, (B) relating to Secretarial authority, (C) relating to effect of modification, (D) prohibiting modification of assigned property before  January 1, 1992 , and (E) relating to assigned property and item.\nSubsec. (i)(1)(E)(iii).  Pub. L. 100–647, §\u202f1002(i)(2)(G) , added cl. (iii), which provided: “ Special rule for railroad grading or tunnel bores .—In the case of any property which is a railroad grading or tunnel bore—\n“(I) such property shall be treated as an assigned property,\n“(II) the recovery period applicable to such property shall be treated as an assigned item, and\n“(III) clause (ii) of subparagraph (D) shall not apply.”\nSubsec. (i)(7)(A).  Pub. L. 100–647, §\u202f1002(a)(7)(A) , inserted at end “In any case where this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986 applied to the property in the hands of the transferor, the reference in the preceding sentence to this section shall be treated as a reference to this section as so in effect.”\nSubsec. (i)(7)(B).  Pub. L. 100–647, §\u202f1002(a)(7)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The transactions described in this subparagraph are any transaction described in section 332, 351, 361, 371(a), 374(a), 721, or 731. Subparagraph (A) shall not apply in the case of a termination of a partnership under section 708(b)(1)(B).”\nSubsec. (i)(7)(D).  Pub. L. 100–647, §\u202f1002(a)(7)(C) , struck out subpar. (D) which read as follows: “This paragraph shall not apply to any transaction to which subsection (f)(5) applies (relating to churning transactions).”\nSubsec. (j)(9)(E).  Pub. L. 100–647, §\u202f1018(b)(2) , amended subpar. (E), as amended by  section 1802(a)(2) of Pub. L. 99–514  and as in effect before the general amendment by  section 201(a) of Pub. L. 99–514 , by substituting “this paragraph and paragraph (8)” for “this paragraph” in cls. (i) and (ii)(I) and by striking out cl. (iii) and inserting a new cl. (iii) which read as follows: “ Tax-exempt controlled entity.—\n“(I)  In general .—The term ‘tax-exempt controlled entity’ means any corporation (which is not a tax-exempt entity determined without regard to this subparagraph and paragraph (4)(E)) if 50 percent or more (in value) of the stock in such corporation is held by 1 or more tax-exempt entities (other than a foreign person or entity).\n“(II)  Only 5-percent shareholders taken into account in case of publicly traded stock .—For purposes of subclause (I), in the case of a corporation the stock of which is publicly traded on an established securities market, stock held by a tax-exempt entity shall not be taken into account unless such entity holds at least 5 percent (in value) of the stock in such corporation. For purposes of this subclause, related entities (within the meaning of paragraph (7)) shall be treated as 1 entity.\n“(III)  Section 318 to apply .—For purposes of this clause, a tax-exempt entity shall be treated as holding stock which it holds through application of section 318 (determined without regard to the 50-percent limitation contained in subsection (a)(2)(C) thereof).”\n1986— Pub. L. 99–514, §\u202f201(a) , amended section generally, applicable, with exceptions enumerated in sections 203, 204, and 251(d) of  Pub. L. 99–514  [set out as notes below and under  section 46 of this title ], to property placed in service after  Dec. 31, 1986 , modifying existing accelerated cost recovery system by substituting new subsecs. (a) to (i) for former subsecs. (a) to (k). See following paragraphs of 1986 Amendment note for amendments to former text by sections 1802 and 1809 of  Pub. L. 99–514 .\nSubsec. (b)(2)(A).  Pub. L. 99–514, §\u202f1809(a)(2)(A)(i)(I) , struck out closing provisions relating to determination, in the case of 19-year real property, of applicable percentage in taxable year in which the property is placed in service.\nSubsec. (b)(2)(B).  Pub. L. 99–514, §\u202f1809(a)(2)(A)(i)(II) , substituted “Mid-month convention for 19-year real property” for “Special rule for year of disposition” in heading and amended text generally, substituting “In the case of 19-year real property, the amount of the deduction determined under any provision of this section (or for purposes of section 57(a)(12)(B) or 312(k)) for any taxable year shall be determined on the basis of the number of months (using a mid-month convention) in which the property is in service.” for prior provisions.\nSubsec. (b)(3)(A).  Pub. L. 99–514, §\u202f1809(a)(1)(A) , which directed that the table be amended by striking “and low-income housing” in last item, was executed by striking “and low-income housing” after “19-year real property” in next-to-the-last item, to reflect the probable intent of Congress, because that phrase did not appear in last item.\nPub. L. 99–514, §\u202f1809(a)(1)(B) , inserted at the end item for low-income housing with recovery periods of 15, 35, or 45 years.\nSubsec. (b)(4)(B).  Pub. L. 99–514, §\u202f1809(a)(2)(B) , substituted “Monthly convention” for “Special rule for year of disposition” in heading and amended text generally, substituting “In the case of low-income housing, the amount of the deduction determined under any provision of this section (or for purposes of section 57(a)(12)(B) or 312(k)) for any taxable year shall be determined on the basis of the number of months (treating all property placed in service or disposed of during any month as placed in service or disposed of on the first day of such month) in which the property is in service.” for prior provisions.\nSubsec. (f)(2)(B).  Pub. L. 99–514, §\u202f1809(a)(2)(A)(ii) , redesignated existing provisions as entire subpar. (B), struck out “(i) In general”, redesignated subcls. (I) and (II) as cls. (i) and (ii), and in cl. (ii) struck out “(taking into account the next to the last sentence of subsection (b)(2)(A))” after “assign percentages” and struck out heading, “(ii) Special rule for disposition” and text, “In the case of a disposition of 19-year real property or low-income housing described in clause (i), subsection (b)(2)(B) shall apply.”\nSubsec. (f)(10)(A).  Pub. L. 99–514, §\u202f1809(b)(1) , amended subpar. (A) generally, substituting “In the case of recovery property transferred in a transaction described in subparagraph (B), for purposes of computing the deduction allowable under subsection (a) with respect to so much of the basis in the hands of the transferee as does not exceed the adjusted basis in the hands of the transferor—\n“(i) if the transaction is described in subparagraph (B)(i), the transferee shall be treated in the same manner as the transferor, or\n“(ii) if the transaction is described in clause (ii) or (iii) of subparagraph (B) and the transferor made an election with respect to such property under subsection (b)(3) or (f)(2)(C), the transferee shall be treated as having made the same election (or its equivalent).”\nfor prior provisions.\nSubsec. (f)(10)(B).  Pub. L. 99–514, §\u202f1809(b)(2) , inserted at end “Clause (i) shall not apply in the case of the termination of a partnership under section 708(b)(1)(B).”\nSubsec. (f)(12)(B)(ii).  Pub. L. 99–514, §\u202f1809(a)(4)(A) , amended cl. (ii) generally, substituting “In the case of 19-year real property, the amount of the deduction allowed shall be determined by using the straight-line method (without regard to salvage value) and a recovery period of 19 years.” for prior provisions.\nSubsec. (f)(12)(C).  Pub. L. 99–514, §\u202f1809(a)(4)(B) , substituted “Exception for low- and moderate-income housing” for “Exception for projects for residential rental property” in heading and amended text generally, substituting “Subparagraph (A) shall not apply to—\n“(i) any low-income housing, and\n“(ii) any other recovery property which is placed in service in connection with projects for residential rental property financed by the proceeds of obligations described in section 103(b)(4)(A).”\nfor prior provisions.\nSubsec. (f)(14), (15).  Pub. L. 99–514, §\u202f1802(b)(1) , redesignated the par. (13) relating to motor vehicle operating leases as (14) and redesignated former par. (14) as (15).\nSubsec. (j)(2)(B)(ii).  Pub. L. 99–514, §\u202f1809(a)(2)(C)(i) , substituted “Cross reference” for “19-year real property” in heading and amended text generally, substituting “For other applicable conventions, see paragraphs (2)(B) and (4)(B) of subsection (b).” for prior provisions.\nSubsec. (j)(3)(D).  Pub. L. 99–514, §\u202f1802(a)(1) , inserted at end “For purposes of subparagraph (B)(iii), any portion of a property so used shall not be treated as leased to a tax-exempt entity in a disqualified lease.”\nSubsec. (j)(4)(E)(i).  Pub. L. 99–514, §\u202f1802(a)(2)(A) , (G), substituted “any property (other than property held by such organization)” for “any property of which such organization is the lessee”, “first used by” for “first leased to”, and “preceding sentence and subparagraph (D)(ii)” for “preceding sentence”.\nSubsec. (j)(4)(E)(ii).  Pub. L. 99–514, §\u202f1802(a)(2)(B) , (C), struck out “of which such organization is the lessee” after “respect to any property” in subcl. (I) and substituted “is first used by the organization” for “is placed in service under the lease” in subcl. (II).\nSubsec. (j)(4)(E)(iv).  Pub. L. 99–514, §\u202f1802(a)(2)(D) , added cl. (iv), first used, which read as follows: “For purposes of this subparagraph, property shall be treated as first used by the organization—\n“(I) when the property is first placed in service under a lease to such organization, or\n“(II) in the case of property leased to (or held by) a partnership (or other pass-thru entity) in which the organization is a member, the later of when such property is first used by such partnership or pass-thru entity or when such organization is first a member of such partnership or pass-thru entity.”\nSubsec. (j)(5)(C)(iv).  Pub. L. 99–514, §\u202f1802(a)(3) , struck out cl. (iv), relating to exclusion of property not subject to rapid obsolescence.\nSubsec. (j)(8), (9)(A).  Pub. L. 99–514, §\u202f1802(a)(4)(A) , (B)(i), struck out “and paragraphs (4) and (5) of section 48(a)” after “For purposes of this subsection” in introductory provisions.\nSubsec. (j)(9)(B)(i).  Pub. L. 99–514, §\u202f1802(a)(4)(B)(ii) , inserted a comma between “loss” and “deduction”.\nSubsec. (j)(9)(D).  Pub. L. 99–514, §\u202f1802(a)(7)(A) , added subpar. (D), determination of whether property used in unrelated trade or business, which read as follows: “For purposes of this subsection, in the case of any property which is owned by a partnership which has both a tax-exempt entity and a person who is not a tax-exempt entity as partners, the determination of whether such property is used in an unrelated trade or business of such an entity shall be made without regard to section 514.” Former subpar. (D) was redesignated (E).\nSubsec. (j)(9)(E).  Pub. L. 99–514, §\u202f1802(a)(7) , redesignated subpar. (D) as (E) and substituted “(C), and (D)” for “and (C)”. Former subpar. (E) redesignated (F).\nPub. L. 99–514, §\u202f1802(a)(2)(E)(i) , added subpar. (E), treatment of certain taxable entities, consisting of cl. (i), in general, which read: “For purposes of this paragraph, except as otherwise provided in this subparagraph, any tax-exempt controlled entity shall be treated as a tax-exempt entity.”, cl. (ii), election, which read: “If a tax-exempt controlled entity makes an election under this clause—\n“(I) such entity shall not be treated as a tax-exempt entity for purposes of this paragraph, and\n“(II) any gain recognized by a tax-exempt entity on any disposition of an interest in such entity (and any dividend or interest received or accrued by a tax-exempt entity from such tax-exempt controlled entity) shall be treated as unrelated business taxable income for purposes of section 511.\nAny such election shall be irrevocable and shall bind all tax-exempt entities holding interests in such tax-exempt controlled entity. For purposes of subclause (II), there shall only be taken into account dividends which are properly allocable to income of the tax-exempt controlled entity which was not subject to tax under this chapter.”, and cl. (iii), tax-exempt controlled entity, which read “The term ‘tax-exempt controlled entity’ means any corporation (which is not a tax-exempt entity determined without regard to this subparagraph and paragraph (4)(E)) if 50 percent or more (by value) of the stock in such corporation is held (directly or through the application of section 318 determined without regard to the 50-percent limitation contained in subsection (a)(2)(C) thereof) by 1 or more tax-exempt entities.” Former subpar. (E) was redesignated (F).\nSubsec. (j)(9)(F).  Pub. L. 99–514, §\u202f1802(a)(7)(A) , redesignated subpar. (E) as (F). Former subpar. (F) redesignated (G).\nPub. L. 99–514, §\u202f1802(a)(2)(E)(i) , redesignated former subpar. (E) as (F).\nSubsec. (j)(9)(G).  Pub. L. 99–514, §\u202f1802(a)(7)(A) , redesignated subpar. (F) as (G).\n1985—Subsec. (b)(2).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property” in heading and wherever appearing in text.\nSubsec. (b)(2)(A)(i).  Pub. L. 99–121, §\u202f103(a) , substituted “19-year recovery period” for “18-year recovery period”.\nSubsec.(b)(3)(A).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property” in table.\nPub. L. 99–121, §\u202f103(b)(2) , substituted “19, 35, or 45 years” for “18, 35, or 45” in table.\nSubsec. (b)(3)(B)(ii), (iii).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property” wherever appearing.\nSubsec. (c)(2)(D).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property” in heading and in text.\nSubsec. (d)(2)(B).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property”.\nSubsec. (f)(1)(B)(ii).  Pub. L. 99–121, §\u202f103(b)(3)(B) , substituted “ March 15, 1984 , and before May, 9, 1985, the” for “ March 15, 1984 , the”.\nSubsec. (f)(1)(B)(iii), (iv).  Pub. L. 99–121, §\u202f103(b)(3)(A) , (C), added cl. (iii), redesignated former cl. (iii) as (iv), and in cl. (iv) substituted “,\u2000(ii), or (iii)” for “or (ii)”.\nSubsec. (f)(2), (5).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property” wherever appearing.\nSubsec. (f)(12)(B)(ii).  Pub. L. 99–121, §\u202f103(b)(4) , substituted “19-year real property” for “15-year real property” in heading and wherever appearing in text, and substituted “19 years” for “15 years”.\nSubsec. (j).  Pub. L. 99–121, §\u202f103(b)(1)(A) , substituted “19-year real property” for “18-year real property” wherever appearing in headings, table, and text.\n1984—Subsec. (b)(2).  Pub. L. 98–369, §\u202f111(a)(1) , substituted “18-year real property” for “15-year real property” in heading and wherever appearing in text.\nPub. L. 98–369, §\u202f111(d) , inserted in provision following cl. (ii) “(using a mid-month convention)”.\nSubsec. (b)(2)(A).  Pub. L. 98–369, §\u202f111(b)(3)(A) , struck out in text following cl. (ii) provision that for purposes of this subparagraph “low-income housing” means property described in section 1250(a)(1)(B)(i), (ii), (iii), or (iv).\nSubsec. (b)(2)(A)(i).  Pub. L. 98–369, §\u202f111(a)(2) , substituted “18-year recovery period” for “15-year recovery period”.\nSubsec. (b)(2)(A)(ii).  Pub. L. 98–369, §\u202f111(a)(3) , struck out “(200 percent declining balance method in the case of low-income housing)” after “declining balance method”.\nSubsec. (b)(2)(B).  Pub. L. 98–369, §\u202f111(d) , inserted “(using a mid-month convention)”.\nSubsec. (b)(3)(A).  Pub. L. 98–369, §\u202f111(e)(9)(A) , substituted “under paragraph (1), (2), or (4)” for “under paragraphs (1) and (2)”.\nPub. L. 98–369, §\u202f111(e)(9)(B) , substituted in table “18-year real property and low-income housing” for “15-year real property” and “18” for “15” and struck out “years” after “45”.\nSubsec. (b)(3)(B)(ii).  Pub. L. 98–369, §\u202f111(e)(2) , substituted “18-year real property or low-income housing,” for “15-year real property”.\nSubsec. (b)(3)(B)(iii).  Pub. L. 98–369, §\u202f111(e)(1) , substituted “18-year real property or low-income housing” for “15-year real property”.\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f111(b)(1) , added par. (4).\nSubsec. (c)(2)(D).  Pub. L. 98–369, §\u202f111(b)(3)(B) , amended subpar. (D) generally, substituting “18-year real property” for “15-year real property” in heading and text and including within such definition section 1250 property which is not low-income housing.\nSubsec. (c)(2)(F), (G).  Pub. L. 98–369, §\u202f111(b)(2) , added subpar. (F) and redesignated former subpar. (F) as (G).\nSubsec. (d)(2)(B).  Pub. L. 98–369, §\u202f111(e)(3) , substituted “18-year real property or low-income housing” for “15-year real property”.\nSubsec. (e).  Pub. L. 98–369, §\u202f113(b)(2)(A) , substituted “title” for “section” in provision preceding par. (1).\nSubsec. (e)(5).  Pub. L. 98–369, §\u202f113(b)(1) , added par. (5).\nSubsec. (f)(1)(B).  Pub. L. 98–369, §\u202f111(c) , designated existing provision as cl. (i), inserted heading, inserted “,\u2000and before  March 16, 1984 ,” and struck out provision that for the purposes of the preceding sentence, the method of computing the deduction allowable with respect to such first component be determined as if it were a separate building, which provision is covered in cl. (iii), and added cls. (ii) and (iii).\nSubsec. (f)(2)(B).  Pub. L. 98–369, §\u202f111(e)(1) , substituted “18-year real property or low-income housing” for “15-year real property” wherever appearing.\nSubsec. (f)(2)(C)(i).  Pub. L. 98–369, §\u202f111(e)(4) , substituted in table “18-year real property or low-income housing” for “15-year real property”.\nSubsec. (f)(2)(C)(ii)(II), (E), (5).  Pub. L. 98–369, §\u202f111(e)(1) , substituted “18-year real property or low-income housing” for “15-year real property”.\nSubsec. (f)(8)(B)(ii)(I).  Pub. L. 98–369, §\u202f12(a)(3)(A) , in par. (8) as amended by  section 209(a) of Pub. L. 97–248 , substituted “1990” for “1986”.\nSubsec. (f)(12)(C).  Pub. L. 98–369, §\u202f628(b)(1) , designated provisions preceding cl. (i) and cl. (i) as subpar. (C), and struck out cls. (ii), (iii), and (iv) which dealt with the application of subpar. (A) to a sewage or solid waste disposal facility, an air or water pollution control facility or a facility which has received an urban development action grant under section 119 of the Housing and Community Development Act of 1974.\nSubsec. (f)(12)(D), (E).  Pub. L. 98–369, §\u202f628(b)(2) , redesignated subpar. (E) as (D) and struck out former subpar. (D) which read as follows: “For purposes of this paragraph, the term ‘existing facility’ means a plant or property in operation before  July 1, 1982 .”\nSubsec. (f)(13).  Pub. L. 98–369, §\u202f32(a) , added second par. (13) relating to motor vehicle operating leases.\nSubsec. (f)(14).  Pub. L. 98–369, §\u202f113(a)(2) , added par. (14).\nSubsec. (g)(2).  Pub. L. 98–369, §\u202f31(d) , inserted “If any property (other than section 1250 class property) does not have a present class life within the meaning of the preceding sentence, the Secretary may prescribe a present class life for such property which reasonably reflects the anticipated useful life of such property to the industry or other group.”\nSubsec. (i)(1)(D)(i).  Pub. L. 98–369, §\u202f474(r)(7)(D) , in subsec. (i) as amended by  section 209(b) of Pub. L. 97–248 , substituted “subparts A, B, and D of part IV” for “subpart A of part IV”.\nPub. L. 98–369, §\u202f474(r)(7)(A) , in subsec. (i) as added by  section 208(a)(1) of Pub. L. 97–248 , substituted “subparts A, B, and D of part IV” for “subpart A of part IV”.\nSubsec. (i)(1)(D)(iii).  Pub. L. 98–369, §\u202f612(e)(5) , in subsec. (i) as amended by  section 209(b) of Pub. L. 97–248 , substituted “section 26(b)(2)” for “section 25(b)(2)”.\nPub. L. 98–369, §\u202f612(e)(4) , in subsec. (i) as added by  section 208(a)(1) of Pub. L. 97–248 , substituted “section 26(b)(2)” for “section 25(b)(2)”.\nPub. L. 98–369, §\u202f474(r)(7)(E) , in subsec. (i) as amended by  section 209(b) of Pub. L. 97–248 , substituted “section 25(b)(2)” for “the last sentence of section 53(a)”.\nPub. L. 98–369, §\u202f474(r)(7)(B) , in subsec. (i) as added by  section 208(a)(1) of Pub. L. 97–248 , substituted “section 25(b)(2)” for “the last sentence of section 53(a)”.\nSubsec. (i)(4)(A).  Pub. L. 98–369, §\u202f12(a)(3)(B) , in subsec. (i) as amended by  section 209(b) of Pub. L. 97–248 , substituted “1989” for “1985” in cls. (i) and (ii).\nPub. L. 98–369, §\u202f474(r)(7)(C) , in subsec. (i) as added by  section 208(a)(1) of Pub. L. 97–248 , substituted “section 38” for “subpart A of part IV of subchapter A of this chapter”.\nSubsecs. (j), (k).  Pub. L. 98–369, §\u202f31(a) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1983—Subsec. (b)(2)(A).  Pub. L. 97–448, §\u202f102(a)(5) , substituted “In the case of 15-year real property” for “For purposes of this subparagraph” in third sentence.\nSubsec. (c)(2)(F).  Pub. L. 97–448, §\u202f102(a)(8) , added subpar. (F).\nSubsec. (d)(2)(B).  Pub. L. 97–448, §\u202f102(a)(2) , substituted “paragraph (7) or (10) of subsection (f)” for “subsection (f)(7)”.\nSubsec. (e)(3)(C), (D).  Pub. L. 97–424, §\u202f541(a)(1) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (e)(4)(D).  Pub. L. 97–448, §\u202f102(a)(9)(A) , inserted provision that, in the case of the acquisition of property by any partnership which results from the termination of another partnership under section 708(b)(1)(B), the determination of whether the acquiring partnership is related to the other partnership shall be made immediately before the event resulting in such termination occurs.\nSubsec. (e)(4)(H), (I).  Pub. L. 97–448, §\u202f102(a)(9)(B) , added subpars. (H) and (I).\nSubsec. (f)(4)(B).  Pub. L. 97–448, §\u202f102(f)(4) , substituted “Election made on return” for “Made on return” as the subpar. (B) heading, designated existing provisions as cl. (i), added heading for cl. (i), substituted “Except as provided in clause (ii), any election” for “Any election”, in cl. (i) as so designated, and added cl. (ii).\nSubsec. (f)(5).  Pub. L. 97–448, §\u202f102(a)(1) , inserted provision that, in the case of 15-year real property, the first sentence of this paragraph shall not apply to the taxable year in which the property is placed in service or disposed of.\nSubsec. (f)(8)(D).  Pub. L. 97–448, §\u202f102(a)(10)(A) , amended subpar. (D), as in effect before the amendments made by the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ], by inserting at end thereof the following new sentence: “Under regulations prescribed by the Secretary, public utility property shall not be treated as qualified leased property unless the requirements of rules similar to the rules of subsection (e)(3) of this section and section 46(f) are met with respect to such property.” See 1982 Amendment note below for subsec. (f)(8)(D).\nSubsec. (f)(13).  Pub. L. 97–448, §\u202f102(a)(3) , added par. (13).\nSubsec. (g)(8)(A).  Pub. L. 97–448, §\u202f102(a)(4)(B) , substituted “Qualified coal utilization property” for “In general” in heading.\nSubsec. (g)(8)(B).  Pub. L. 97–448, §\u202f102(a)(4)(C) , substituted “Coal utilization property” for “In general” in heading.\nSubsec. (h)(4).  Pub. L. 97–448, §\u202f102(a)(4)(A) , substituted “coal utilization property which would otherwise be 15-year public utility property” for “coal utilization property which is not 3-year property, 5-year property, or 10-year property (determined without regard to this paragraph)”.\n1982—Subsec. (b)(1).  Pub. L. 97–248, §\u202f206(a) , substituted “table” for “tables” in introductory provisions, struck out designation “(A)” preceding the table and struck out subpar. (A) heading which had limited the application of the table to property placed in service after  Dec. 31, 1980 , and before  Jan. 1, 1985 , and struck out subpars. (B) and (C), which had provided tables, respectively, for property placed in service in 1985 and for property placed in service after  Dec. 31, 1985 .\nSubsec. (e)(4).  Pub. L. 97–248 , §§\u202f206(b), 224(c)(1), substituted “1981” for “1986” in heading, in subpar. (E) inserted provision that a similar rule shall apply in the case of a deemed liquidation under section 338, and struck out former subpar. (H) which had provided for special rules for property placed in service before certain percentages took effect.\nSubsec. (f)(8).  Pub. L. 97–248, §\u202f209(a) , amended par. (8) generally, substituting provisions relating to special rules for finance leases for provisions relating to special rule for leases.\nSubsec. (f)(8)(A).  Pub. L. 97–248, §\u202f208(a)(2)(A) , inserted “except as provided in subsection (i),” before “for purposes of this subtitle”.\nSubsec. (f)(8)(B)(i)(I).  Pub. L. 97–354, §\u202f5(a)(19) , substituted “an S corporation” for “an electing small business corporation (within the meaning of section 1371(b))” in subsec. (f)(8)(B)(i)(I) as in effect before the enactment of the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ].\nPub. L. 97–248, §\u202f208(b)(1) , inserted “which is not a related person with respect to the lessee”.\nSubsec. (f)(8)(B)(iii).  Pub. L. 97–248, §\u202f208(b)(2) , in subcl. (I) substituted “120 percent of the present class life of the property, or” for “90 percent of the useful life of such property for purposes of section 167, or”, and in subcl. II substituted “the period equal to the recovery period determined with respect to such property under subsection (i)(2)” for “150 percent of the present class life of such property”.\nSubsec. (f)(8)(C)(i).  Pub. L. 97–354, §\u202f5(a)(20) , in par. (8) as amended by  section 209(a) of Pub. L. 97–248 , substituted “an S corporation” for “an electing small business corporation within the meaning of section 1371(b)”.\nSubsec. (f)(8)(D).  Pub. L. 97–248, §\u202f208(b)(3) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows:\n“(D) Qualified leased property defined.— For purposes of subparagraph (A), the term ‘qualified leased property’ means recovery property (other than a qualified rehabilitated building within the meaning of section 48(g)(1)) which is—\n“(i) new section 38 property (as defined in section 48(b)) of the lessor which is leased within 3 months after such property was placed in service and which, if acquired by the lessee, would have been new section 38 property of the lessee,\n“(ii) property—\n“(I) which was new section 38 property of the lessee,\n“(II) which was leased within 3 months after such property was placed in service by the lessee, and\n“(III) with respect to which the adjusted basis of the lessor does not exceed the adjusted basis of the lessee at the time of the lease, or\n“(iii) property which is a qualified mass commuting vehicle (as defined in section 103(b)(9)) and which is financed in whole or in part by obligations the interest on which is excludable from income under section 103(a).\nFor purposes of this title (other than this subparagraph), any property described in clause (i) or (ii) to which subparagraph (A) applies shall be deemed originally placed in service not earlier than the date such property is used under the lease. In the case of property placed in service after  December 31, 1980 , and before the date of the enactment of this subparagraph, this subparagraph shall be applied by submitting ‘the date of the enactment of this subparagraph’ for ‘such property was placed in service’.” See 1983 Amendment note above for subsec. (f)(8)(D).\nSubsec. (f)(8)(H) to (K).  Pub. L. 97–248, §\u202f208(b)(4) , added subpars. (H) to (J) and redesignated former subpar. (H) as (K).\nSubsec. (f)(10)(B)(i).  Pub. L. 97–248, §\u202f224(c)(2) , struck out “(other than a transaction with respect to which the basis is determined under section 334(b)(2))” after “section 332”.\nSubsec. (f)(12).  Pub. L. 97–248, §\u202f216(a) , added par. (12).\nSubsec. (i).  Pub. L. 97–248, §\u202f209(b) , amended subsec. (i) generally, substituting provisions concerning limitations relating to leases of finance lease property for provisions concerning limitations relating to lease of qualified leased property.\nPub. L. 97–248, §\u202f208(a)(1) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (j).  Pub. L. 97–248, §\u202f208(a)(1) , redesignated former subsec. (i) as (j).\nPub. L. 117–169, title I, §\u202f13703(b) ,  Aug. 16, 2022 ,  136 Stat. 1997 , provided that:  “The amendments made by this section [amending this section] shall apply to facilities and property placed in service after  December 31, 2024 .”\nPub. L. 116–260, div. EE, title I, §\u202f115(b) ,  Dec. 27, 2020 ,  134 Stat. 3050 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nPub. L. 116–260, div. EE, title I, §\u202f137(b) ,  Dec. 27, 2020 ,  134 Stat. 3053 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nPub. L. 116–260, div. EE, title I, §\u202f138(b) ,  Dec. 27, 2020 ,  134 Stat. 3054 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nPub. L. 116–136, div. A, title II, §\u202f2307(b) ,  Mar. 27, 2020 ,  134 Stat. 359 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in  section 13204 of Public Law 115–97 .”\nPub. L. 116–94, div. Q, title I, §\u202f114(b) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 116–94, div. Q, title I, §\u202f115(b) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 116–94, div. Q, title I, §\u202f116(b) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 116–94, div. Q, title I, §\u202f130(b) ,  Dec. 20, 2019 ,  133 Stat. 3232 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 115–141, div. U, title I, §\u202f101(d)(3) , (4),  Mar. 23, 2018 ,  132 Stat. 1160 , 1161, provided that: \n “(3)  For purposes of applying section 168(k) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of  Public Law 115–97  [ Dec. 22, 2017 ], with respect to property acquired before  September 28, 2017 , paragraph (6) thereof shall be treated as reading as follows (and as having been included in section 143 of the Protecting Americans from Tax Hikes Act of 2015 [ Pub. L. 114–113 ]): “\u202f‘(6)  Phase-down .—In the case of qualified property placed in service by the taxpayer after  December 31, 2017  ( December 31, 2018 , in the case of property described in subparagraph (B) or (C) of paragraph (2)), paragraph (1)(A) shall be applied by substituting for “50 percent”— \n “\u202f‘(A) “40 percent” in the case of— \n “\u202f‘(i) property placed in service in 2018 (other than property described in subparagraph (B) or (C) of paragraph (2)), and \n “\u202f‘(ii) property described in subparagraph (B) or (C) of paragraph (2) which is placed in service in 2019, and \n “\u202f‘(B) “30 percent” in the case of— \n “\u202f‘(i) property placed in service in 2019 (other than property described in subparagraph (B) or (C) of paragraph (2)), and \n “\u202f‘(ii) property described in subparagraph (B) or (C) of paragraph (2) which is placed in service in 2020.’ \n \n \n “(4)  Section 168(k)(7) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of  Public Law 115–97 , shall be applied— “(A)  by substituting ‘paragraphs (1), (2)(F), and (4)’ for ‘paragraphs (1) and (2)(F)’, and \n \n “(B)  as if the application of such substitution had been included in section 143 of the Protecting Americans from Tax Hikes Act of 2015.”\n“\u202f‘(6)  Phase-down .—In the case of qualified property placed in service by the taxpayer after  December 31, 2017  ( December 31, 2018 , in the case of property described in subparagraph (B) or (C) of paragraph (2)), paragraph (1)(A) shall be applied by substituting for “50 percent”—\n“\u202f‘(A) “40 percent” in the case of—\n“\u202f‘(i) property placed in service in 2018 (other than property described in subparagraph (B) or (C) of paragraph (2)), and\n“\u202f‘(ii) property described in subparagraph (B) or (C) of paragraph (2) which is placed in service in 2019, and\n“\u202f‘(B) “30 percent” in the case of—\n“\u202f‘(i) property placed in service in 2019 (other than property described in subparagraph (B) or (C) of paragraph (2)), and\n“\u202f‘(ii) property described in subparagraph (B) or (C) of paragraph (2) which is placed in service in 2020.’\nAmendment by section 101(d)(1), (2), (e) of  Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nPub. L. 115–141, div. U, title III, §\u202f302(b) ,  Mar. 23, 2018 ,  132 Stat. 1184 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Mar. 23, 2018 ].”\nPub. L. 115–141, div. U, title IV, §\u202f401(b)(13)(B) ,  Mar. 23, 2018 ,  132 Stat. 1202 , provided that:  “The amendment made by this paragraph [amending this section] shall not apply to property placed in service before the date of the enactment of this Act [ Mar. 23, 2018 ].”\nPub. L. 115–123, div. D, title I, §\u202f40304(b) ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 115–123, div. D, title I, §\u202f40305(b) ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 115–123, div. D, title I, §\u202f40306(b) ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 115–123, div. D, title I, §\u202f40412(b) ,  Feb. 9, 2018 ,  132 Stat. 151 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nAmendment by  section 12001(b)(13) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 115–97, title I, §\u202f13201(h) ,  Dec. 22, 2017 ,  131 Stat. 2108 , provided that: \n “(1)   In general .— Except as provided by paragraph (2), the amendments made by this section [amending this section and  section 460 of this title ] shall apply to property which— “(A)  is acquired after  September 27, 2017 , and \n \n “(B)  is placed in service after such date. \n \n\n For purposes of the preceding sentence, property shall not be treated as acquired after the date on which a written binding contract is entered into for such acquisition. \n \n “(2)   Specified plants .— The amendments made by this section shall apply to specified plants planted or grafted after  September 27, 2017 .”\nPub. L. 115–97, title I, §\u202f13203(c) ,  Dec. 22, 2017 ,  131 Stat. 2109 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 , in taxable years ending after such date.”\nPub. L. 115–97, title I, §\u202f13204(b) ,  Dec. 22, 2017 ,  131 Stat. 2111 , as amended by  Pub. L. 116–260, div. EE, title II, §\u202f202 ,  Dec. 27, 2020 ,  134 Stat. 3056 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 . \n \n “(2)   Amendments related to electing real property trade or business .— The amendments made by subsection (a)(3)(A) [amending this section] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(3)   Certain residential rental property .— In the case of any residential rental property— “(A)  which was placed in service before  January 1, 2018 , \n \n “(B)  which is held by an electing real property trade or business (as defined in section 163(j)(7)(B) of the Internal Revenue Code of 1986), and \n \n “(C)  for which subparagraph (A), (B), (C), (D), or (E) of section 168(g)(1) of the Internal Revenue Code of 1986 did not apply prior to such date, the amendments made by subsection (a)(3)(C) shall apply to taxable years beginning after  December 31, 2017 .”\nthe amendments made by subsection (a)(3)(C) shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13205(b) ,  Dec. 22, 2017 ,  131 Stat. 2111 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13504(c) ,  Dec. 22, 2017 ,  131 Stat. 2142 , provided that:  “The amendments made by this section [amending this section and sections 708 and 743 of this title] shall apply to partnership taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f123(c) ,  Dec. 18, 2015 ,  129 Stat. 3052 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title I, §\u202f143(a)(5) ,  Dec. 18, 2015 ,  129 Stat. 3057 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this subsection [amending this section and  section 460 of this title ] shall apply to property placed in service after  December 31, 2014 , in taxable years ending after such date. \n \n “(B)   Election to accelerate amt credit .— The amendments made by paragraph (3) [amending this section] shall apply to taxable years ending after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title I, §\u202f143(b)(7) ,  Dec. 18, 2015 ,  129 Stat. 3064 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section and sections 263A and 460 of this title] shall apply to property placed in service after  December 31, 2015 , in taxable years ending after such date. \n \n “(B)   Expansion of election to accelerate amt credits in lieu of bonus depreciation .— The amendments made by paragraph (3) [amending this section] shall apply to taxable years ending after  December 31, 2015 , except that in the case of any taxable year beginning before  January 1, 2016 , and ending after  December 31, 2015 , the limitation under section 168(k)(4)(B)(ii) of the Internal Revenue Code of 1986 (as amended by this section) shall be the sum of— “(i)  the product of— “(I)  the maximum increase amount (within the meaning of section 168(k)(4)(C)(iii) of such Code, as in effect before the amendments made by this subsection), multiplied by \n \n “(II)  a fraction the numerator of which is the number of days in the taxable year before  January 1, 2016 , and the denominator of which is the number of days in the taxable year, plus \n \n \n “(ii)  the product of— “(I)  such limitation (determined without regard to this subparagraph), multiplied by \n \n “(II)  a fraction the numerator of which is the number of days in the taxable year after  December 31, 2015 , and the denominator of which is the number of days in the taxable year. \n \n \n \n “(C)   Special rules for certain plants bearing fruits and nuts .— The amendments made by paragraph (4) [amending this section] (other than subparagraph (A) thereof) shall apply to specified plants (as defined in section 168(k)(5)(B) of the Internal Revenue Code of 1986, as amended by this subsection) planted or grafted after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title I, §\u202f165(b) ,  Dec. 18, 2015 ,  129 Stat. 3067 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title I, §\u202f166(b) ,  Dec. 18, 2015 ,  129 Stat. 3067 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title I, §\u202f167(c) ,  Dec. 18, 2015 ,  129 Stat. 3067 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2014 . \n \n “(2)   Modification .— The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title I, §\u202f189(b) ,  Dec. 18, 2015 ,  129 Stat. 3075 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f121(b) ,  Dec. 19, 2014 ,  128 Stat. 4015 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 113–295, div. A, title I, §\u202f122(b) ,  Dec. 19, 2014 ,  128 Stat. 4015 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 113–295, div. A, title I, §\u202f123(b) ,  Dec. 19, 2014 ,  128 Stat. 4015 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 113–295, div. A, title I, §\u202f124(b) ,  Dec. 19, 2014 ,  128 Stat. 4016 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 113–295, div. A, title I, §\u202f125(e) ,  Dec. 19, 2014 ,  128 Stat. 4017 , provided that:  “The amendments made by this section [amending this section and sections 460, 1400L, and 1400N of this title] shall apply to property placed in service after  December 31, 2013 , in taxable years ending after such date.”\nPub. L. 113–295, div. A, title I, §\u202f157(b) ,  Dec. 19, 2014 ,  128 Stat. 4022 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nAmendment by  section 202(e) of Pub. L. 113–295  effective as if included in the provision of the American Taxpayer Relief Act of 2012,  Pub. L. 112–240 , to which such amendment relates, see  section 202(f) of Pub. L. 113–295 , set out as a note under  section 55 of this title .\nAmendment by section 210(c), (d), (g)(2) of  Pub. L. 113–295  effective as if included in the provisions of the Energy Improvement and Extension Act of 2008,  Pub. L. 110–343, div. B , to which such amendment relates, see  section 210(h) of Pub. L. 113–295 , set out as a note under  section 45 of this title .\nAmendment by  section 211(b) of Pub. L. 113–295  effective as if included in the provisions of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008,  Pub. L. 110–343, div. C , to which such amendment relates, see  section 211(d) of Pub. L. 113–295 , set out as a note under  section 143 of this title .\nAmendment by  section 212(b) of Pub. L. 113–295  effective as if included in the provisions of the Housing Assistance Tax Act of 2008,  Pub. L. 110–289, div. C , to which such amendment relates, see  section 212(d) of Pub. L. 113–295 , set out as a note under  section 42 of this title .\nPub. L. 113–295, div. A, title II, §\u202f214(c) ,  Dec. 19, 2014 ,  128 Stat. 4034 , provided that:  “The amendments made by this section [amending this section and  section 6213 of this title ] shall take effect as if included in the provisions of the Economic Stimulus Act of 2008 [ Pub. L. 110–185 ] to which they relate.”\nPub. L. 112–240, title III, §\u202f311(b) ,  Jan. 2, 2013 ,  126 Stat. 2330 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2011 .”\nPub. L. 112–240, title III, §\u202f312(b) ,  Jan. 2, 2013 ,  126 Stat. 2330 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2011 .”\nPub. L. 112–240, title III, §\u202f313(b) ,  Jan. 2, 2013 ,  126 Stat. 2330 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2011 .”\nPub. L. 112–240, title III, §\u202f331(f) ,  Jan. 2, 2013 ,  126 Stat. 2337 , provided that:  “The amendments made by this section [amending this section and sections 460, 1400L, and 1400N of this title] shall apply to property placed in service after  December 31, 2012 , in taxable years ending after such date.”\nPub. L. 112–240, title IV, §\u202f410(a)(2) ,  Jan. 2, 2013 ,  126 Stat. 2342 , provided that:  “The amendment made by this subsection [amending this section] shall apply to property placed in service after  December 31, 2012 .”\nPub. L. 112–240, title IV, §\u202f410(b)(3) ,  Jan. 2, 2013 ,  126 Stat. 2343 , provided that:  “The amendments made by this subsection [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Jan. 2, 2013 ].”\nPub. L. 111–312, title IV, §\u202f401(e) ,  Dec. 17, 2010 ,  124 Stat. 3306 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1400L and 1400N of this title] shall apply to property placed in service after  December 31, 2010 , in taxable years ending after such date. \n \n “(2)   Temporary 100 percent expensing .— The amendment made by subsection (b) [amending this section] shall apply to property placed in service after  September 8, 2010 , in taxable years ending after such date.”\nPub. L. 111–312, title VII, §\u202f737(c) ,  Dec. 17, 2010 ,  124 Stat. 3318 , provided that:  “The amendments made by this section [amending this section and  section 179 of this title ] shall apply to property placed in service after  December 31, 2009 .”\nPub. L. 111–312, title VII, §\u202f738(b) ,  Dec. 17, 2010 ,  124 Stat. 3318 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2009 .”\nPub. L. 111–312, title VII, §\u202f739(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2009 .”\nPub. L. 111–240, title II, §\u202f2022(c) ,  Sept. 27, 2010 ,  124 Stat. 2559 , provided that:  “The amendments made by this section [amending this section and sections 1400L and 1400N of this title] shall apply to property placed in service after  December 31, 2009 , in taxable years ending after such date.”\nPub. L. 111–5, div. B, title I, §\u202f1201(c) ,  Feb. 17, 2009 ,  123 Stat. 334 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1400N and 6211 of this title] shall apply to property placed in service after  December 31, 2008 , in taxable years ending after such date. \n \n “(2)   Technical amendments .— The amendments made by subsections (a)(3) [amending this section and  section 6211 of this title ] and (b)(2) [amending  section 6211 of this title ] shall apply to taxable years ending after  March 31, 2008 .”\nPub. L. 110–343, div. B, title II, §\u202f201(c) ,  Oct. 3, 2008 ,  122 Stat. 3832 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 3, 2008 ], in taxable years ending after such date.”\nPub. L. 110–343, div. B, title III, §\u202f306(d) ,  Oct. 3, 2008 ,  122 Stat. 3849 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 110–343, div. B, title III, §\u202f308(b) ,  Oct. 3, 2008 ,  122 Stat. 3851 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  August 31, 2008 .”\nPub. L. 110–343, div. C, title III, §\u202f305(a)(2) ,  Oct. 3, 2008 ,  122 Stat. 3867 , provided that:  “The amendments made by this subsection [amending this section] shall apply to property placed in service after  December 31, 2007 .”\nPub. L. 110–343, div. C, title III, §\u202f305(b)(2) ,  Oct. 3, 2008 ,  122 Stat. 3867 , provided that:  “The amendment made by this subsection [amending this section] shall apply to property placed in service after  December 31, 2008 .”\nPub. L. 110–343, div. C, title III, §\u202f305(c)(5) ,  Oct. 3, 2008 ,  122 Stat. 3868 , provided that:  “The amendments made by this subsection [amending this section] shall apply to property placed in service after  December 31, 2008 .”\nPub. L. 110–343, div. C, title III, §\u202f315(b) ,  Oct. 3, 2008 ,  122 Stat. 3872 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2007 .”\nPub. L. 110–343, div. C, title III, §\u202f317(b) ,  Oct. 3, 2008 ,  122 Stat. 3873 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2007 .”\nPub. L. 110–343, div. C, title V, §\u202f505(c) ,  Oct. 3, 2008 ,  122 Stat. 3880 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2008 .”\nPub. L. 110–343, div. C, title VII, §\u202f710(b) ,  Oct. 3, 2008 ,  122 Stat. 3928 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2007 , with respect [to] disasters declared after such date.”\nPub. L. 110–289, div. C, title III, §\u202f3081(d) ,  July 30, 2008 ,  122 Stat. 2907 , provided that:  “The amendments made by this section [amending this section and  section 1324 of Title 31 , Money and Finance] shall apply to taxable years ending after  March 31, 2008 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15344(b) ,  May 22, 2008 ,  122 Stat. 1520 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15344(b),  June 18, 2008 ,  122 Stat. 1664 , 2282, provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2008 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–185, title I, §\u202f103(d) ,  Feb. 13, 2008 ,  122 Stat. 619 , provided that:  “The amendments made by this section [amending this section and sections 1400L and 1400N of this title] shall apply to property placed in service after  December 31, 2007 , in taxable years ending after such date.”\nPub. L. 110–172, §\u202f11(b)(3) ,  Dec. 29, 2007 ,  121 Stat. 2488 , provided that:  “The amendments made by this subsection [amending this section and  section 6724 of this title ] shall take effect as if included in the provision of the Tax Relief and Health Care Act of 2006 [ Pub. L. 109–432 ] to which they relate.”\nPub. L. 109–432, div. A, title I, §\u202f112(b) ,  Dec. 20, 2006 ,  120 Stat. 2940 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2005 .”\nPub. L. 109–432, div. A, title I, §\u202f113(b) ,  Dec. 20, 2006 ,  120 Stat. 2940 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2005 .”\nPub. L. 109–432, div. A, title II, §\u202f209(b) ,  Dec. 20, 2006 ,  120 Stat. 2947 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Dec. 20, 2006 ] in taxable years ending after such date.”\nAmendment by  section 403(j) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 109–135, title IV, §\u202f405(b) ,  Dec. 21, 2005 ,  119 Stat. 2634 , provided that:  “The amendments made by this section [amending this section and  section 1400L of this title ] shall take effect as if included in section 201 of the Jobs and Growth Tax Relief and Reconciliation Act of 2003 [probably means the Jobs and Growth Tax Relief Reconciliation Act of 2003,  Pub. L. 108–27 ].”\nPub. L. 109–135, title IV, §\u202f410(b) ,  Dec. 21, 2005 ,  119 Stat. 2636 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 11813 of the Omnibus Budget Reconciliation Act of 1990 [ Pub. L. 101–508 ].”\nAmendment by  section 1301(f)(5) of Pub. L. 109–58  effective as if included in the amendments made by section 710 of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , see  section 1301(g) of Pub. L. 109–58 , set out as a note under  section 45 of this title .\nPub. L. 109–58, title XIII, §\u202f1308(c) ,  Aug. 8, 2005 ,  119 Stat. 1006 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to property placed in service after  April 11, 2005 . \n \n “(2)   Exception .— The amendments made by this section [amending this section] shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before  April 11, 2005 , or, in the case of self-constructed property, has started construction on or before such date.”\nPub. L. 109–58, title XIII, §\u202f1325(c) ,  Aug. 8, 2005 ,  119 Stat. 1016 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to property placed in service after  April 11, 2005 . \n \n “(2)   Exception .— The amendments made by this section [amending this section] shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before  April 11, 2005 , or, in the case of self-constructed property, has started construction on or before such date.”\nAmendment by section 1326(a)–(c) of  Pub. L. 109–58  applicable to property placed in service after  Apr. 11, 2005 , with exception for property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before  Apr. 11, 2005 , or, in the case of self-constructed property, has started construction on or before such date, see  section 1326(e) of Pub. L. 109–58 , set out as a note under  section 56 of this title .\nPub. L. 108–357, title II, §\u202f211(f) ,  Oct. 22, 2004 ,  118 Stat. 1430 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title III, §\u202f336(c) ,  Oct. 22, 2004 ,  118 Stat. 1480 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in the amendments made by section 101 of the Job Creation and Worker Assistance Act of 2002 [ Pub. L. 107–147 ].”\nPub. L. 108–357, title III, §\u202f337(b) ,  Oct. 22, 2004 ,  118 Stat. 1480 , provided that:  “The amendment made by this section [amending this section] shall apply to property sold after  June 4, 2004 .”\nPub. L. 108–357, title VII, §\u202f704(c) ,  Oct. 22, 2004 ,  118 Stat. 1548 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to any property placed in service after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(2)   Special rule for asset class 80.0 .— In the case of race track facilities placed in service after the date of the enactment of this Act, such facilities shall not be treated as theme and amusement facilities classified under asset class 80.0. \n \n “(3)   No inference .— Nothing in this section or the amendments made by this section shall be construed to affect the treatment of property placed in service on or before the date of the enactment of this Act.”\nPub. L. 108–357, title VII, §\u202f706(d) ,  Oct. 22, 2004 ,  118 Stat. 1550 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2004 .”\nAmendment by section 847(a), (c), (d) of  Pub. L. 108–357  applicable to leases entered into after  Mar. 12, 2004 , and amendment by  section 847(e) of Pub. L. 108–357  applicable to leases entered into after  Oct. 3, 2004 , except that such amendments inapplicable to qualified transportation property, see  section 849 of Pub. L. 108–357 , set out as an Effective Date note under  section 470 of this title .\nPub. L. 108–357, title VIII, §\u202f901(d) ,  Oct. 22, 2004 ,  118 Stat. 1651 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  section 403(a) of Pub. L. 108–311  effective as if included in the provisions of the Job Creation and Worker Assistance Act of 2002,  Pub. L. 107–147 , to which such amendment relates, see  section 403(f) of Pub. L. 108–311 , set out as a note under  section 56 of this title .\nPub. L. 108–27, title II, §\u202f201(d) ,  May 28, 2003 ,  117 Stat. 757 , provided that:  “The amendments made by this section [amending this section and  section 1400L of this title ] shall apply to taxable years ending after  May 5, 2003 .”\nPub. L. 107–147, title I, §\u202f101(b) ,  Mar. 9, 2002 ,  116 Stat. 25 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  September 10, 2001 , in taxable years ending after such date.”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 1086(b) of Pub. L. 105–34  applicable to property placed in service after  Aug. 5, 1997 , see  section 1086(c) of Pub. L. 105–34 , set out as a note under  section 167 of this title .\nAmendment by  section 1213(c) of Pub. L. 105–34  applicable to leases entered into after  Aug. 5, 1997 , see  section 1213(e) of Pub. L. 105–34 , set out as an Effective Date note under  section 110 of this title .\nPub. L. 105–34, title XVI, §\u202f1604(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 1098 , provided that:  \n “The amendment made by paragraph (1) [amending this section] shall apply as if included in the amendments made by section 13321 of the Omnibus Budget Reconciliation Act of 1993 [ Pub. L. 103–66 ], except that such amendment shall not apply— \n “(A)  with respect to property (with an applicable recovery period under section 168(j) of the Internal Revenue Code of 1986 of 6 years or less) held by the taxpayer if the taxpayer claimed the benefits of section 168(j) of such Code with respect to such property on a return filed before  March 18, 1997 , but only if such return is the first return of tax filed for the taxable year in which such property was placed in service, or \n \n “(B)  with respect to wages for which the taxpayer claimed the benefits of section 45A of such Code for a taxable year on a return filed before  March 18, 1997 , but only if such return was the first return of tax filed for such taxable year.”\nPub. L. 104–188, title I, §\u202f1120(c) ,  Aug. 20, 1996 ,  110 Stat. 1765 , provided that:  “The amendments made by this section [amending this section] shall apply to property which is placed in service on or after the date of the enactment of this Act [ Aug. 20, 1996 ] and to which section 168 of the Internal Revenue Code of 1986 applies after the amendment made by section 201 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ]. A taxpayer may elect (in such form and manner as the Secretary of the Treasury may prescribe) to have such amendments apply with respect to any property placed in service before such date and to which such section so applies.”\nPub. L. 104–188, title I, §\u202f1121(b) ,  Aug. 20, 1996 ,  110 Stat. 1766 , provided that:  “Subparagraph (B) of section 168(i)(8) of the Internal Revenue Code of 1986, as added by the amendment made by subsection (a), shall apply to improvements disposed of or abandoned after  June 12, 1996 .”\nPub. L. 104–188, title I, §\u202f1613(b)(5) ,  Aug. 20, 1996 ,  110 Stat. 1850 , provided that:  “The amendments made by this subsection [amending this section] shall apply to property placed in service after  June 12, 1996 , other than property placed in service pursuant to a binding contract in effect before  June 10, 1996 , and at all times thereafter before the property is placed in service.”\nAmendment by  section 1702(h)(1) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 104–88  effective  Jan. 1, 1996 , see  section 2 of Pub. L. 104–88 , set out as an Effective Date note under  section 1301 of Title 49 , Transportation.\nPub. L. 103–66, title XIII, §\u202f13151(b) ,  Aug. 10, 1993 ,  107 Stat. 448 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to property placed in service by the taxpayer on or after  May 13, 1993 . \n \n “(2)   Exception .— The amendments made by this section [amending this section] shall not apply to property placed in service by the taxpayer before  January 1, 1994 , if— “(A)  the taxpayer or a qualified person entered into a binding written contract to purchase or construct such property before  May 13, 1993 , or \n \n “(B)  the construction of such property was commenced by or for the taxpayer or a qualified person before  May 13, 1993 . \n \n\n For purposes of this paragraph, the term ‘qualified person’ means any person who transfers his rights in such a contract or such property to the taxpayer but only if the property is not placed in service by such person before such rights are transferred to the taxpayer.”\nPub. L. 103–66, title XIII, §\u202f13321(b) ,  Aug. 10, 1993 ,  107 Stat. 559 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 1993 .”\nAmendment by  section 11812(b)(2) of Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  section 11813(b)(9) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1002(a)(23)(B) ,  Nov. 10, 1988 ,  102 Stat. 3356 , provided that:  “Clause (ii) of section 168(d)(3)(B) of the 1986 Code (as added by subparagraph (A)) shall apply to taxable years beginning after  March 31, 1988 , unless the taxpayer elects, at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe, to have such clause apply to taxable years beginning on or before such date.”\nAmendment by sections 1002(a)(5)–(8), (11), (16)(B), (21), (i)(2)(A)–(G), and 1018(b)(2) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6027(c) ,  Nov. 10, 1988 ,  102 Stat. 3693 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 1988 . \n \n “(2)   Exception .— The amendments made by this section shall not apply to any property if such property is placed in service before  January 1, 1990 , and if such property— “(A)  is constructed, reconstructed, or acquired by the taxpayer pursuant to a written contract which was binding on  July 14, 1988 , or \n \n “(B)  is constructed or reconstructed by the taxpayer and such construction or reconstruction began by  July 14, 1988 .”\nPub. L. 100–647, title VI, §\u202f6028(b) ,  Nov. 10, 1988 ,  102 Stat. 3694 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 1988 . \n \n “(2)   Exception .— The amendments made by this section shall not apply to any property if such property is placed in service before  July 1, 1989 , and if such property— “(A)  is constructed, reconstructed, or acquired by the taxpayer pursuant to a written contract which was binding on  July 14, 1988 , or \n \n “(B)  is constructed or reconstructed by the taxpayer and such construction or reconstruction began by  July 14, 1988 .”\nPub. L. 100–647, title VI, §\u202f6029(d) ,  Nov. 10, 1988 ,  102 Stat. 3694 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 1988 .”\nPub. L. 99–514, title II , §§\u202f203, 204,  Oct. 22, 1986 ,  100 Stat. 2143 , 2146, as amended by  Pub. L. 99–509, title VIII, §\u202f8071 ,  Oct. 21, 1986 ,  100 Stat. 1964 ;  Pub. L. 100–647, title I, §\u202f1002(c)(1) , (2), (4)–(8), (d)(1)–(7)(A), (8)–(35),  Nov. 10, 1988 ,  102 Stat. 3358–3367 , provided that: \n “SEC. 203.  EFFECTIVE DATES; GENERAL TRANSITIONAL RULES. “(a)   General Effective Dates.— “(1)   Section 201.— “(A)   In general .— Except as provided in this section, section 204, and section 251(d) [set out as a note under  section 46 of this title ], the amendments made by section 201 [amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall apply to property placed in service after  December 31, 1986 , in taxable years ending after such date. \n \n “(B)   Election to have amendments made by section 201 apply .— A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have the amendments made by section 201 apply to any property placed in service after  July 31, 1986 , and before  January 1, 1987 . No election may be made under this subparagraph with respect to property to which section 168 of the Internal Revenue Code of 1986 would not apply by reason of section 168(f)(5) of such Code if such property were placed in service after  December 31, 1986 . \n \n \n “(2)   Section 202.— “(A)   In general .— The amendments made by section 202 [amending  section 179 of this title ] shall apply to property placed in service after  December 31, 1986 , in taxable years ending after such date. \n \n “(B)   Special rule for fiscal years including  january 1, 1987 .— In the case of any taxable year (other than a calendar year) which includes  January 1, 1987 , for purposes of applying the amendments made by section 202 to property placed in service during such taxable year and after  December 31, 1986 — “(i)  the limitation of section 179(b)(1) of the Internal Revenue Code of 1986 (as amended by section 202) shall be reduced by the aggregate deduction under section 179 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]) for section 179 property placed in service during such taxable year and before  January 1, 1987 , \n \n “(ii)  the limitation of section 179(b)(2) of such Code (as so amended) shall be applied by taking into account the cost of all section 179 property placed in service during such taxable year, and \n \n “(iii)  the limitation of section 179(b)(3) of such Code shall be applied by taking into account the taxable income for the entire taxable year reduced by the amount of any deduction under section 179 of such Code for property placed in service during such taxable year and before  January 1, 1987 . \n \n \n \n \n “(b)   General Transitional Rule.— “(1)   In general .— The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to— “(A)  any property which is constructed, reconstructed, or acquired by the taxpayer pursuant to a written contract which was binding on  March 1, 1986 , \n \n “(B)  property which is constructed or reconstructed by the taxpayer if— “(i)  the lesser of (I) $1,000,000, or (II) 5 percent of the cost of such property has been incurred or committed by  March 1, 1986 , and \n \n “(ii)  the construction or reconstruction of such property began by such date, or \n \n \n “(C)  an equipped building or plant facility if construction has commenced as of  March 1, 1986 , pursuant to a written specific plan and more than one-half of the cost of such equipped building or facility has been incurred or committed by such date. \n \n\n For purposes of this paragraph, all members of the same affiliated group of corporations (within the meaning of section 1504 of the Internal Revenue Code of 1986) filing a consolidated return shall be treated as one taxpayer. \n \n “(2)   Requirement that certain property be placed in service before certain date.— “(A)   In general .— Paragraph (1) and section 204(a) (other than paragraph (8) or (12) thereof) shall not apply to any property unless such property has a class life of at least 7 years and is placed in service before the applicable date determined under the following table: \n \n \n \n \n \n \n \n \n \n \n “In the case of property The applicable \n with a class life of: date is: \n At least 7 but less than 20 years January 1, 1989 \u202f\u202f \n 20 years or more January 1, 1991 . \n \n \n \n \n “(B)   Residential rental and nonresidential real property .— In the case of residential rental property and nonresidential real property, the applicable date is  January 1, 1991 . \n \n “(C)   Class lives .— For purposes of subparagraph (A)— “(i)  the class life of property to which section 168(g)(3)(B) of the Internal Revenue Code of 1986 (as added by section 201) applies shall be the class life in effect on  January 1, 1986 , except that computer-based telephone central office switching equipment described in section 168(e)(3)(B)(iii) of such Code shall be treated as having a class life of 6 years, \n \n “(ii)  property described in section 204(a) shall be treated as having a class life of 20 years, and \n \n “(iii)  property with no class life shall be treated as having a class life of 12 years. \n \n \n “(D)   Substitution of applicable dates .— If any provision of this Act [see Tables for classification] substitutes a date for an applicable date, this paragraph shall be applied by using such date. \n \n \n “(3)   Property qualifies if sold and leased back in 3 months .— Property shall be treated as meeting the requirements of paragraphs (1) and (2) or section 204(a) with respect to any taxpayer if such property is acquired by the taxpayer from a person— “(A)  in whose hands such property met the requirements of paragraphs (1) and (2) or section 204(a) (or would have met such requirements if placed in service by such person), or \n \n “(B)  who placed the property in service before  January 1, 1987 , \n \n\n and such property is leased back by the taxpayer to such person, or is leased to such person, not later than the earlier of the applicable date under paragraph (2) or the day which is 3 months after such property was placed in service. \n \n “(4)   Plant facility .— For purposes of paragraph (1), the term ‘plant facility’ means a facility which does not include any building (or with respect to which buildings constitute an insignificant portion) and which is— “(A)  a self-contained single operating unit or processing operation, \n \n “(B)  located on a single site, and \n \n “(C)  identified as a single unitary project as of  March 1, 1986 . \n \n \n \n “(c)   Property Financed With Tax-Exempt Bonds.— “(1)   In general .— Except as otherwise provided in this subsection or section 204, subparagraph (C) of section 168(g)(1) of the Internal Revenue Code of 1986 (as added by this Act) shall apply to property placed in service after  December 31, 1986 , in taxable years ending after such date, to the extent such property is financed by the proceeds of an obligation (including a refunding obligation) issued after  March 1, 1986 . \n \n “(2)   Exceptions.— “(A)   Construction or binding agreements .— Subparagraph (C) of section 168(g)(1) of such Code (as so added) shall not apply to obligations with respect to a facility— “(i) (I)  the original use of which commences with the taxpayer, and the construction, reconstruction, or rehabilitation of which began before  March 2, 1986 , and was completed on or after such date, \n \n “(II)  with respect to which a binding contract to incur significant expenditures for construction, reconstruction, or rehabilitation was entered into before  March 2, 1986 , and some of such expenditures are incurred on or after such date, or \n \n “(III)  acquired on or after  March 2, 1986 , pursuant to a binding contract entered into before such date, and \n \n \n “(ii)  described in an inducement resolution or other comparable preliminary approval adopted by the issuing authority (or by a voter referendum) before  March 2, 1986 . \n \n \n “(B)   Refunding.— “(i)   In general .— Except as provided in clause (ii), in the case of property placed in service after  December 31, 1986 , which is financed by the proceeds of an obligation which is issued solely to refund another obligation which was issued before  March 2, 1986 , subparagraph (C) of section 168(g)(1) of such Code (as so added) shall apply only with respect to an amount equal to the basis in such property which has not been recovered before the date such refunded obligation is issued. \n \n “(ii)   Significant expenditures .— In the case of facilities the original use of which commences with the taxpayer and with respect to which significant expenditures are made before  January 1, 1987 , subparagraph (C) of section 168(g)(1) of such Code (as so added) shall not apply with respect to such facilities to the extent such facilities are financed by the proceeds of an obligation issued solely to refund another obligation which was issued before  March 2, 1986 . \n \n \n “(C)   Facilities .— In the case of an inducement resolution or other comparable preliminary approval adopted by an issuing authority before  March 2, 1986 , for purposes of subparagraphs (A) and (B)(ii) with respect to obligations described in such resolution, the term ‘facilities’ means the facilities described in such resolution. \n \n “(D)   Significant expenditures .— For purposes of this paragraph, the term ‘significant expenditures’ means expenditures greater than 10 percent of the reasonably anticipated cost of the construction, reconstruction, or rehabilitation of the facility involved. \n \n \n \n “(d)   Mid-Quarter Convention .— In the case of any taxable year beginning before  October 1, 1987  in which property to which the amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] do not apply is placed in service, such property shall be taken into account in determining whether section 168(d)(3) of the Internal Revenue Code of 1986 (as added by section 201) applies for such taxable year to property to which such amendments apply. The preceding sentence shall only apply to property which would be taken into account if such amendments did apply. \n \n “(e)   Normalization Requirements.— “(1)   In general .— A normalization method of accounting shall not be treated as being used with respect to any public utility property for purposes of section 167 or 168 of the Internal Revenue Code of 1986 if the taxpayer, in computing its cost of service for ratemaking purposes and reflecting operating results in its regulated books of account, reduces the excess tax reserve more rapidly or to a greater extent than such reserve would be reduced under the average rate assumption method. \n \n “(2)   Definitions .— For purposes of this subsection— “(A)   Excess tax reserve .— The term ‘excess tax reserve’ means the excess of— “(i)  the reserve for deferred taxes (as described in section 167( l )(3)(G)(ii) or 168(e)(3)(B)(ii) of the Internal Revenue Code of 1954 as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]), over \n \n “(ii)  the amount which would be the balance in such reserve if the amount of such reserve were determined by assuming that the corporate rate reductions provided in this Act [see Tables for classification] were in effect for all prior periods. \n \n \n “(B)   Average rate assumption method .— The average rate assumption method is the method under which the excess in the reserve for deferred taxes is reduced over the remaining lives of the property as used in its regulated books of account which gave rise to the reserve for deferred taxes. Under such method, if timing differences for the property reverse, the amount of the adjustment to the reserve for the deferred taxes is calculated by multiplying— “(i)  the ratio of the aggregate deferred taxes for the property to the aggregate timing differences for the property as of the beginning of the period in question, by \n \n “(ii)  the amount of the timing differences which reverse during such period. \n \n \n \n \n \n “SEC. 204.  ADDITIONAL TRANSITIONAL RULES. “(a)   Other Transitional Rules.— “(1)   Urban renovation projects.— “(A)   In general .— The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any property which is an integral part of any qualified urban renovation project. \n \n “(B)   Qualified urban renovation project .— For purposes of subparagraph (A), the term ‘qualified urban renovation project’ means any project— “(i)  described in subparagraph (C), (D), (E), or (G) which before  March 1, 1986 , was publicly announced by a political subdivision of a State for a renovation of an urban area within its jurisdiction, \n \n “(ii)  described in subparagraph (C), (D) or (G) which before  March 1, 1986 , was identified as a single unitary project in the internal financing plans of the primary developer of the project, \n \n “(iii)  described in subparagraph (C) or (D), which is not substantially modified on or after  March 1, 1986 , and \n \n “(iv)  described in subparagraph (F) or (H). \n \n \n “(C)   Project where agreement on  december 19, 1984 .— A project is described in this subparagraph if— “(i)  a political subdivision granted on  July 11, 1985 , development rights to the primary developer-purchaser of such project, and \n \n “(ii)  such project was the subject of a development agreement between a political subdivision and a bridge authority on  December 19, 1984 . \n \n\n \u2001\u2001For purposes of this subparagraph, section 203(b)(2) shall be applied by substituting ‘ January 1, 1994 ’ for ‘ January 1, 1991 ’ each place it appears. \n \n “(D)   Certain additional projects .— A project is described in this subparagraph if it is described in any of the following clauses of this subparagraph and the primary developer of all such projects is the same person: “(i)  A project is described in this clause if the development agreement with respect thereto was entered into during April 1984 and the estimated cost of the project is approximately $194,000,000. \n \n “(ii)  A project is described in this clause if the development agreement with respect thereto was entered into during May 1984 and the estimated cost of the project is approximately $190,000,000. \n \n “(iii)  A project is described in this clause if the project has an estimated cost of approximately $92,000,000 and at least $7,000,000 was spent before  September 26, 1985 , with respect to such project. \n \n “(iv)  A project is described in this clause if the estimated project cost is approximately $39,000,000 and at least $2,000,000 of construction cost for such project were incurred before  September 26, 1985 . \n \n “(v)  A project is described in this clause if the development agreement with respect thereto was entered into before  September 26, 1985 , and the estimated cost of the project is approximately $150,000,000. \n \n “(vi)  A project is described in this clause if the board of directors of the primary developer approved such project in December 1982, and the estimated cost of such project is approximately $107,000,000. \n \n “(vii)  A project is described in this clause if the board of directors of the primary developer approved such project in December 1982, and the estimated cost of such project is approximately $59,000,000. \n \n “(viii)  A project is described in this clause if the Board of Directors of the primary developer approved such project in December 1983, following selection of the developer by a city council on  September 26, 1983 , and the estimated cost of such project is approximately $107,000,000. \n \n \n “(E)   Project where plan confirmed on  october 4, 1984 .— A project is described in this subparagraph if— “(i)  a State or an agency, instrumentality, or political subdivision thereof approved the filing of a general project plan on  June 18, 1981 , and on  October 4, 1984 , a State or an agency, instrumentality, or political subdivision thereof confirmed such plan, \n \n “(ii)  the project plan as confirmed on  October 4, 1984 , included construction or renovation of office buildings, a hotel, a trade mart, theaters, and a subway complex, and \n \n “(iii)  significant segments of such project were the subject of one or more conditional designations granted by a State or an agency, instrumentality, or political subdivision thereof to one or more developers before  January 1, 1985 . \n \n\n \u2001\u2001The preceding sentence shall apply with respect to a property only to the extent that a building on such property site was identified as part of the project plan before  September 26, 1985 , and only to the extent that the size of the building on such property site was not substantially increased by reason of a modification to the project plan with respect to such property on or after such date. For purposes of this subparagraph, section 203(b)(2) shall be applied by substituting ‘ January 1, 1998 ’ for ‘ January 1, 1991 ’ each place it appears. \n \n “(F)  A project is described in this subparagraph if it is a sports and entertainment facility which— “(i)  is to be used by both a National Hockey League team and a National Basketball Association team; \n \n “(ii)  is to be constructed on a platform utilizing air rights over land acquired by a State authority and identified as site B in a report dated  May 30, 1984 , prepared for a State urban development corporation; and \n \n “(iii)  is eligible for real property tax, and power and energy benefits pursuant to the provisions of State legislation approved and effective  July 7, 1982 . \n \n\n \u2001\u2001A project is also described in this subparagraph if it is a mixed-use development which is— \n \u2001\u2001\u2001\u2001\u2001“(I)  to be constructed above a public railroad station utilized by the national railroad passenger corporation and commuter railroads serving two States; and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  will include the reconstruction of such station so as to make it a more efficient transportation center and to better integrate the station with the development above, such reconstruction plans to be prepared in cooperation with a State transportation authority. \n \n\n \u2001\u2001For purposes of this subparagraph, section 203(b)(2) shall be applied by substituting ‘ January 1, 1998 ’ for the applicable date that would otherwise apply. \n \n “(G)  A project is described in this subparagraph if— “(i)  an inducement resolution was passed on  March 9, 1984 , for the issuance of obligations with respect to such project, \n \n “(ii)  such resolution was extended by resolutions passed on  August 14, 1984 ,  April 2, 1985 ,  August 13, 1985 , and  July 8, 1986 , \n \n “(iii)  an application was submitted on  January 31, 1984 , for an Urban Development Action Grant with respect to such project, and \n \n “(iv)  an Urban Development Action Grant was preliminarily approved for all or part of such project on  July 3, 1986 . \n \n \n “(H)  A project is described in this subparagraph if it is a redevelopment project, with respect to which $10,000,000 in industrial revenue bonds were approved by a State Development Finance Authority on  January 15, 1986 , a village transferred approximately $4,000,000 of bond volume authority to the State in June 1986, and a binding Redevelopment Agreement was executed between a city and the development team on  June 30, 1986 . \n \n \n “(2)   Certain projects granted ferc licenses, etc .— The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any property which is part of a project— “(A)  which is certified by the Federal Energy Regulatory Commission before  March 2, 1986 , as a qualifying facility for purposes of the Public Utility Regulatory Policies Act of 1978 [see Short Title note set out under  16 U.S.C. 2601 ], \n \n “(B)  which was granted before  March 2, 1986 , a hydroelectric license for such project by the Federal Energy Regulatory Commission, or \n \n “(C)  which is a hydroelectric project of less than 80 megawatts that filed an application for a permit, exemption, or license with the Federal Energy Regulatory Commission before  March 2, 1986 . \n \n \n “(3)   Supply or service contracts .— The amendments made by section 201 shall not apply to any property which is readily identifiable with and necessary to carry out a written supply or service contract, or agreement to lease, which was binding on  March 1, 1986 . \n \n “(4)   Property treated under prior tax acts .— The amendments made by section 201 shall not apply— “(A)  to property described in section 12(c)(2) (as amended by the Technical and Miscellaneous Revenue Act of 1988), 31(g)(5), or 31(g)(17)(J) of the Tax Reform Act of 1984 [sections 12(c)(2) and 31(g)(5), (17)(J) of  Pub. L. 98–369 , set out below], \n \n “(B)  to property described in section 209(d)(1)(B) of the Tax Equity and Fiscal Responsibility Act of 1982, as amended by the Tax Reform Act of 1984 [ section 209(d)(1)(B) of Pub. L. 97–248 , as amended, set out below], and \n \n “(C)  to property described in section 216(b)(3) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 216(b)(3) of Pub. L. 97–248 , set out below]. \n \n \n “(5)   Special rules for property included in master plans of integrated projects .— The amendments made by section 201 shall not apply to any property placed in service pursuant to a master plan which is clearly identifiable as of  March 1, 1986 , for any project described in any of the following subparagraphs of this paragraph: “(A)  A project is described in this subparagraph if— “(i)  the project involves production platforms for offshore drilling, oil and gas pipeline to shore, process and storage facilities, and a marine terminal, and \n \n “(ii)  at least $900,000,000 of the costs of such project were incurred before  September 26, 1985 . \n \n \n “(B)  A project is described in this subparagraph if— “(i)  such project involves a fiber optic network of at least 20,000 miles, and \n \n “(ii)  before  September 26, 1985 , construction commenced pursuant to the master plan and at least $85,000,000 was spent on construction. \n \n \n “(C)  A project is described in this subparagraph if— “(i)  such project passes through at least 10 States and involves intercity communication links (including one or more repeater sites, terminals and junction stations for microwave transmissions, regenerators or fiber optics and other related equipment), \n \n “(ii)  the lesser of $150,000,000 or 5 percent of the total project cost has been expended, incurred, or committed before  March 2, 1986 , by one or more taxpayers each of which is a member of the same affiliated group (as defined in section 1504(a) [of the Internal Revenue Code of 1986]), and \n \n “(iii)  such project consists of a comprehensive plan for meeting network capacity requirements as encompassed within either: \u2001\u2001\u2001\u2001\u2001“(I)  a  November 5, 1985 , presentation made to and accepted by the Chairman of the Board and the president of the taxpayer, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the approvals by the Board of Directors of the parent company of the taxpayer on  May 3, 1985 , and  September 22, 1985 , and of the executive committee of said board on  December 23, 1985 . \n \n \n \n “(D)  A project is described in this subparagraph if— “(i)  such project is part of a flat rolled product modernization plan which was initially presented to the Board of Directors of the taxpayer on  July 8, 1983 , \n \n “(ii)  such program will be carried out at 3 locations, and \n \n “(iii)  such project will involve a total estimated minimum capital cost of at least $250,000,000. \n \n \n “(E)  A project is described in this subparagraph if the project is being carried out by a corporation engaged in the production of paint, chemicals, fiberglass, and glass, and if— “(i)  the project includes a production line which applies a thin coating to glass in the manufacture of energy efficient residential products, if approved by the management committee of the corporation on  January 29, 1986 , \n \n “(ii)  the project is a turbogenerator which was approved by the president of such corporation and at least $1,000,000 of the cost of which was incurred or committed before such date, \n \n “(iii)  the project is a waste-to-energy disposal system which was initially approved by the management committee of the corporation on  March 29, 1982 , and at least $5,000,000 of the cost of which was incurred before  September 26, 1985 , \n \n “(iv)  the project, which involves the expansion of an existing service facility and the addition of new lab facilities needed to accommodate topcoat and undercoat production needs of a nearby automotive assembly plant, was approved by the corporation’s management committee on  March 5, 1986 , or \n \n “(v)  the project is part of a facility to consolidate and modernize the silica production of such corporation and the project was approved by the president of such corporation on  August 19, 1985 . \n \n \n “(F)  A project is described in this subparagraph if— “(i)  such project involves a port terminal and oil pipeline extending generally from the area of Los Angeles, California, to the area of Midland, Texas, and \n \n “(ii)  before  September 26, 1985 , there is a binding contract for dredging and channeling with respect thereto and a management contract with a construction manager for such project. \n \n \n “(G)  A project is described in this subparagraph if— “(i)  the project is a newspaper printing and distribution plant project with respect to which a contract for the purchase of 8 printing press units and related equipment to be installed in a single press line was entered into on  January 8, 1985 , and \n \n “(ii)  the contract price for such units and equipment represents at least 50 percent of the total cost of such project. \n \n \n “(H)  A project is described in this subparagraph if it is the second phase of a project involving direct current transmission lines spanning approximately 190 miles from the United States-Canadian border to Ayer, Massachusetts, alternating current transmission lines in Massachusetts from Ayers to Millbury to West Medway, DC–AC converted terminals to Monroe, New Hampshire, and Ayer, Massachusetts, and other related equipment and facilities. \n \n “(I)  A project is described in this subparagraph if it involves not more than two natural gas-fired combined cycle electric generating units each having a net electrical capability of approximately 233 megawatts, and a sales contract for approximately one-half of the output of the 1st unit was entered into in December 1985. \n \n “(J)  A project is described in this subparagraph if— “(i)  the project involves an automobile manufacturing facility (including equipment and incidental appurtenances) to be located in the United States, and \n \n “(ii)  either— \u2001\u2001\u2001\u2001\u2001“(I)  the project was the subject of a memorandum of understanding between 2 automobile manufacturers that was signed before  September 25, 1985 , the automobile manufacturing facility (including equipment and incidental appurtenances) will involve a total estimated cost of approximately $750,000,000, and will have an annual production capacity of approximately 240,000 vehicles or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the Board of Directors of an automobile manufacturer approved a written plan for the conversion of existing facilities to produce new models of a vehicle not currently produced in the United States, such facilities will be placed in service by  July 1, 1987 , and such Board action occurred in July 1985 with respect to a $602,000,000 expenditure, a $438,000,000 expenditure, and a $321,000,000 expenditure. \n \n \n \n “(K)  A project is described in this subparagraph if— “(i)  the project involves a joint venture between a utility company and a paper company for a supercalendered paper mill, and at least $50,000,000 was incurred or committed with respect to such project before  March 1, 1986 , or \n \n “(ii)  the project involves a paper mill for the manufacture of newsprint (including a cogeneration facility) is generally based on a written design and feasibility study that was completed on  December 15, 1981 , and will be placed in service before  January 1, 1991 , or \n \n “(iii)  the project is undertaken by a Maine corporation and involves the modernization of pulp and paper mills in Millinocket and/or East Millinocket, Maine, or \n \n “(iv)  the project involves the installation of a paper machine for production of coated publication papers, the modernization of a pulp mill, and the installation of machinery and equipment with respect to related processes, as of  December 31, 1985 , in excess of $50,000,000 was incurred for the project, as of July 1986, in excess of $150,000,000 was incurred for the project, and the project is located in Pine Bluff, Arkansas, or \n \n “(v)  the project involves property of a type described in ADR classes 26.1, 26.2, 25, 00.3 and 00.4 included in a paper plant which will manufacture and distribute tissue, towel or napkin products; is located in Effingham County, Georgia; and is generally based upon a written General Description which was submitted to the Georgia Department of Revenue on or about  June 13, 1985 . \n \n \n “(L)  A project is described in this subparagraph if— “(i)  a letter of intent with respect to such project was executed on  June 4, 1985 , and \n \n “(ii)  a 5-percent downpayment was made in connection with such project for 2 10-unit press lines and related equipment. \n \n \n “(M)  A project is described in this subparagraph if— “(i)  the project involves the retrofit of ammonia plants, \n \n “(ii)  as of  March 1, 1986 , more than $390,000 had been expended for engineering and equipment, and \n \n “(iii)  more than $170,000 was expensed in 1985 as a portion of preliminary engineering expense. \n \n \n “(N)  A project is described in this subparagraph if the project involves bulkhead intermodal flat cars which are placed in service before  January 1, 1987 , and either— “(i)  more than $2,290,000 of expenditures were made before  March 1, 1986 , with respect to a project involving up to 300 platforms, or \n \n “(ii)  more than $95,000 of expenditures were made before  March 1, 1986 , with respect to a project involving up to 850 platforms. \n \n \n “(O)  A project is described in this subparagraph if— “(i)  the project involves the production and transportation of oil and gas from a well located north of the Arctic Circle, and \n \n “(ii)  more than $200,000,000 of cost had been incurred or committed before  September 26, 1985 . \n \n \n “(P)  A project is described in this subparagraph if— “(i)  a commitment letter was entered into with a financial institution on  January 23, 1986 , for the financing of the project, \n \n “(ii)  the project involves intercity communication links (including microwave and fiber optics communications systems and related property), \n \n “(iii)  the project consists of communications links between— \u2001\u2001\u2001\u2001\u2001“(I)  Omaha, Nebraska, and Council Bluffs, Iowa, \n \n \u2001\u2001\u2001\u2001\u2001“(II)  Waterloo, Iowa and Sioux City, Iowa, \n \n \u2001\u2001\u2001\u2001\u2001“(III)  Davenport, Iowa and Springfield, Illinois, and \n \n \n “(iv)  the estimated cost of such project is approximately $13,000,000. \n \n \n “(Q)  A project is described in this subparagraph if— “(i)  such project is a mining modernization project involving mining, transport, and milling operations, \n \n “(ii)  before  September 26, 1985 , at least $20,000,000 was expended for engineering studies which were approved by the Board of Directors of the taxpayer on  January 27, 1983 , and \n \n “(iii)  such project will involve a total estimated minimum cost of $350,000,000. \n \n \n “(R)  A project is described in this subparagraph if— “(i)  such project is a dragline acquired in connection with a 3-stage program which began in 1980 to increase production from a coal mine, \n \n “(ii)  at least $35,000,000 was spent before  September 26, 1985 , on the 1st 2 stages of the program, and \n \n “(iii)  at least $4,000,000 was spent to prepare the mine site for the dragline. \n \n \n “(S)  A project is described in this subparagraph if—it is a project consisting of a mineral processing facility using a heap leaching system (including waste dumps, low-grade dumps, a leaching area, and mine roads) and if— “(i)  convertible subordinated debentures were issued in August 1985, to finance the project, \n \n “(ii)  construction of the project was authorized by the Board of Directors of the taxpayer on or before  December 31, 1985 , \n \n “(iii)  at least $750,000 was paid or incurred with respect to the project on or before  December 31, 1985 , and \n \n “(iv)  the project is placed in service on or before  December 31, 1986 . \n \n \n “(T)  A project is described in this subparagraph if it is a plant facility on Alaska’s North Slope which is placed in service before  January 1, 1988 , and— “(i)  the approximate cost of which is $675,000,000, of which approximately $400,000,000 was spent on off-site construction, \n \n “(ii)  the approximate cost of which is $445,000,000, of which approximately $400,000,000 was spent on off-site construction and more than 50 percent of the project cost was spent prior to  December 31, 1985 , or \n \n “(iii)  the approximate cost of which is $375,000,000, of which approximately $260,000,000 was spent on off-site construction. \n \n \n “(U)  A project is described in this subparagraph if it involves the connecting of existing retail stores in the downtown area of a city to a new covered area, the total project will be 250,000 square feet, a formal Memorandum of Understanding relating to development of the project was executed with the city on  July 2, 1986 , and the estimated cost of the project is $18,186,424. \n \n “(V)  A project is described in this subparagraph if it includes a 200,000 square foot office tower, a 200-room hotel, a 300,000 square foot retail center, an 800-space parking facility, the total cost is projected to be $60,000,000, and $1,250,000 was expended with respect to the site before  August 25, 1986 . \n \n “(W)  A project is described in this subparagraph if it is a joint use and development project including an integrated hotel, convention center, office, related retail facilities and public mass transportation terminal, and vehicle parking facilities which satisfies the following conditions: “(i)  is developed within certain air space rights and upon real property exchanged for such joint use and development project which is owned or acquired by a state department of transportation, a regional mass transit district in a county with a population of at least 5,000,000 and a community redevelopment agency; \n \n “(ii)  such project affects an existing, approximately 40 acre public mass transportation bus-way terminal facility located adjacent to an interstate highway; \n \n “(iii)  a memorandum of understanding with respect to such joint use and development project is executed by a state department of transportation, such a county regional mass transit district and a community redevelopment agency on or before  December 31, 1986 , and \n \n “(iv)  a major portion of such joint use and development project is placed in service by  December 31, 1990 . \n \n \n “(X)  A project is described in this subparagraph if— “(i)  it is an $8,000,000 project to provide advanced control technology for adipic acid at a plant, which was authorized by the company’s Board of Directors in October 1985, at  December 31, 1985 , $1,400,000 was committed and $400,000 expended with respect to such project, or \n \n “(ii)  it is an $8,300,000 project to achieve compliance with State and Federal regulations for particulates emissions, which was authorized by the company’s Board of Directors in December 1985, by  March 31, 1986 , $250,000 was committed and $250,000 was expended with respect to such project, or \n \n “(iii)  it is a $22,000,000 project for the retrofit of a plant that makes a raw material for aspartame, which was approved in the company’s December 1985 capital budget, if approximately $3,000,000 of the $22,000,000 was spent before  August 1, 1986 . \n \n \n “(Y)  A project is described in this subparagraph if such project passes through at least 9 States and involves an intercity communication link (including multiple repeater sites and junction stations for microwave transmissions and amplifiers for fiber optics); the link from Buffalo to New York/Elizabeth was completed in 1984; the link from Buffalo to Chicago was completed in 1985; and the link from New York to Washington is completed in 1986. \n \n “(Z)  A project is described in this subparagraph if— “(i)  such project involves a fiber optic network of at least 475 miles, passing through Minnesota and Wisconsin; and \n \n “(ii)  before  January 1, 1986 , at least $15,000,000 was expended or committed for electronic equipment or fiber optic cable to be used in constructing the network. \n \n \n \n “(6)   Natural gas pipeline .— The amendments made by section 201 [amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any interstate natural gas pipeline (and related equipment) if— “(A)  3 applications for the construction of such pipeline were filed with the Federal Energy Regulatory Commission before  November 22, 1985  (and 2 of which were filed before  September 26, 1985 ), and \n \n “(B)  such pipeline has 1 of its terminal points near Bakersfield, California. \n \n \n “(7)   Certain leasehold improvements .— The amendments made by section 201 shall not apply to any reasonable leasehold improvements, equipment and furnishings placed in service by a lessee or its affiliates if— “(A)  the lessee or an affiliate is the original lessee of each building in which such property is to be used, \n \n “(B)  such lessee is obligated to lease the building under an agreement to lease entered into before  September 26, 1985 , and such property is provided for such building, and \n \n “(C)  such buildings are to serve as world headquarters of the lessee and its affiliates. \n \n\n For purposes of this paragraph, a corporation is an affiliate of another corporation if both corporations are members of a controlled group of corporations within the meaning of section 1563(a) of the Internal Revenue Code of 1954 without regard to section 1563(b)(2) of such Code. Such lessee shall include a securities firm that meets the requirements of subparagraph (A), except the lessee is obligated to lease the building under a lease entered into on  June 18, 1986 . \n \n “(8)   Solid waste disposal facilities .— The amendments made by section 201 [amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to the taxpayer who originally places in service any qualified solid waste disposal facility (as defined in section 7701(e)(3)(B) of the Internal Revenue Code of 1986) if before  March 2, 1986 — “(A)  there is a binding written contract between a service recipient and a service provider with respect to the operation of such facility to pay for the services to be provided by such facility, \n \n “(B)  a service recipient or governmental unit (or any entity related to such recipient or unit) made a financial commitment of at least $200,000 for the financing or construction of such facility, \n \n “(C)  such facility is the Tri-Cities Solid Waste Recovery Project involving Fremont, Newark, and Union City, California, and has received an authority to construct from the Environmental Protection Agency or from a State or local agency authorized by the Environmental Protection Agency to issue air quality permits under the Clean Air Act [ 42 U.S.C. 7401  et seq.], \n \n “(D)  a bond volume carryforward election was made for the facility and the facility is for Chattanooga, Knoxville, or Kingsport, Tennessee, or \n \n “(E)  such facility is to serve Haverhill, Massachusetts. \n \n \n “(9)   Certain submersible drilling units .— In the case of a binding contract entered into on  October 30, 1984 , for the purchase of 6 semi-submersible drilling units at a cost of $425,000,000, such units shall be treated as having an applicable date under subsection [section] 203(b)(2) of  January 1, 1991 . \n \n “(10)   Wastewater or sewage treatment facility .— The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any property which is part of a wastewater or sewage treatment facility if— “(A)  site preparation for such facility commenced before September 1985, and a parish council approved a service agreement with respect to such facility on  December 4, 1985 ; \n \n “(B)  a city-parish advertised in September 1985, for bids for construction of secondary treatment improvements for such facility, in May 1985, the city-parish received statements from 16 firms interested in privatizing the wastewater treatment facilities, and the metropolitan council selected a privatizer at its meeting on  November 20, 1985 , and adopted a resolution authorizing the Mayor to enter into contractual negotiation with the selected privatizer; \n \n “(C)  the property is part of a wastewater treatment facility serving Greenville, South Carolina with respect to which a binding service agreement between a privatizer and the Western Carolina Regional Sewer Authority with respect to such facility was signed before  January 1, 1986 ; or \n \n “(D)  such property is part of a wastewater treatment facility (located in Cameron County, Texas, within one mile of the City of Harlingen), an application for a wastewater discharge permit was filed with respect to such facility on  December 4, 1985 , and a City Commission approved a letter of intent relating to a service agreement with respect to such facility on  August 7, 1986 ; or a wastewater facility (located in Harlingen, Texas) which is a subject of such letter of intent and service agreement and the design of which was contracted for in a letter of intent dated  January 23, 1986 . \n \n \n “(11)   Certain aircraft .— The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any new aircraft with 19 or fewer passenger seats if— “(A)  the aircraft is manufactured in the United States. For purposes of this subparagraph, an aircraft is ‘manufactured’ at the point of its final assembly, \n \n “(B)  the aircraft was in inventory or in the planned production schedule of the final assembly manufacturer, with orders placed for the engine(s) on or before  August 16, 1986 , and \n \n “(C)  the aircraft is purchased or subject to a binding contract on or before  December 31, 1986 , and is delivered and placed in service by the purchaser, before  July 1, 1987 . \n \n \n “(12)   Certain satellites .— The amendments made by section 201 shall not apply to any satellite with respect to which— “(A)  on or before  January 28, 1986 , there was a binding contract to construct or acquire a satellite, and “(i)  an agreement to launch was in existence on that date, or \n \n “(ii)  on or before  August 5, 1983 , the Federal Communications Commission had authorized the construction and for which the authorized party has a specific although undesignated agreement to launch in existence on  January 28, 1986 ; \n \n \n “(B)  by order adopted on  July 25, 1985 , the Federal Communications Commission granted the taxpayer an orbital slot and authorized the taxpayer to launch and operate 2 satellites with a cost of approximately $300,000,000; or \n \n “(C)  the International Telecommunications Satellite Organization or the International Maritime Satellite Organization entered into written binding contracts before  May 1, 1985 . \n \n \n “(13)   Certain nonwire line cellular telephone systems .— The amendments made by section 201 shall not apply to property that is part of a nonwire line system in the Domestic Public Cellular Radio Telecommunications Service for which the Federal Communications Commission has issued a construction permit before  September 26, 1985 , but only if such property is placed in service before  January 1, 1987 . \n \n “(14)   Certain cogeneration facilities .— The amendments made by section 201 shall not apply to projects consisting of 1 or more facilities for the cogeneration and distribution of electricity and steam or other forms of thermal energy if— “(A)  at least $100,000 was paid or incurred with respect to the project before  March 1, 1986 , a memorandum of understanding was executed on  September 13, 1985 , and the project is placed in service before  January 1, 1989 , \n \n “(B)  at least $500,000 was paid or incurred with respect to the projects before  May 6, 1986 , the projects involve a 22-megawatt combined cycle gas turbine plant and a 45-megawatt coal waste plant, and applications for qualifying facility status were filed with the Federal Energy Regulatory Commission on  March 5, 1986 , \n \n “(C)  the project cost approximates $125,000,000 to $140,000,000 and an application was made to the Federal Energy Regulatory Commission in July 1985, \n \n “(D)  an inducement resolution for such facility was adopted on  September 10, 1985 , a development authority was given an inducement date of  September 10, 1985 , for a loan not to exceed $80,000,000 with respect to such facility, and such facility is expected to have a capacity of approximately 30 megawatts of electric power and 70,000 pounds of steam per hour, \n \n “(E)  at least $1,000,000 was incurred with respect to the project before  May 6, 1986 , the project involves a 52-megawatt combined cycle gas turbine plant and a petition was filed with the Connecticut Department of Public Utility Control to approve a power sales agreement with respect to the project on  March 27, 1986 , \n \n “(F)  the project has a planned scheduled capacity of approximately 38,000 kilowatts, the project property is placed in service before  January 1, 1991 , and the project is operated, established, or constructed pursuant to certain agreements, the negotiation of which began before 1986, with public or municipal utilities conducting business in Massachusetts, or \n \n “(G)  the Board of Regents of Oklahoma State University took official action on  July 25, 1986 , with respect to the project. \n \n\n In the case of the project described in subparagraph (F), section 203(b)(2)(A) shall be applied by substituting ‘ January 1, 1991 ’ for ‘ January 1, 1989 ’. \n \n “(15)   Certain electric generating stations .— The amendments made by section 201 shall not apply to a project located in New Mexico consisting of a coal-fired electric generating station (including multiple generating units, coal mine equipment, and transmission facilities) if— “(A)  a tax-exempt entity will own an equity interest in all property included in the project (except the coal mine equipment), and \n \n “(B)  at least $72,000,000 was expended in the acquisition of coal leases, land and water rights, engineering studies, and other development costs before  May 6, 1986 . \n \n\n For purposes of this paragraph, section 203(b)(2) shall be applied by substituting ‘ January 1, 1996 ’ for ‘ January 1, 1991 ’ each place it appears. \n \n “(16)   Sports arenas.— “(A)   Indoor sports facility .— The amendments made by section 201 shall not apply to up to $20,000,000 of improvements made by a lessee of any indoor sports facility pursuant to a lease from a State commission granting the right to make limited and specified improvements (including planned seat explanations), if architectural renderings of the project were commissioned and received before  December 22, 1985 . \n \n “(B)   Metropolitan sports arena .— The amendments made by section 201 shall not apply to any property which is part of an arena constructed for professional sports activities in a metropolitan area, provided that such arena is capable of seating no less than 18,000 spectators and a binding contract to incur significant expenditures for its construction was entered into before  June 1, 1986 . \n \n \n “(17)   Certain waste-to-energy facilities .— The amendments made by section 201 shall not apply to 2 agricultural waste-to-energy powerplants (and required transmission facilities), in connection with which a contract to sell 100 megawatts of electricity to a city was executed in October 1984. \n \n “(18)   Certain coal-fired plants .— The amendments made by section 201 shall not apply to one of three 540 megawatt coal-fired plants that are placed in service after a sale leaseback occurring after  January 1, 1986 , if— “(A)  the Board of Directors of an electric power cooperation authorized the investigation of a sale leaseback of a nuclear generation facility by resolution dated  January 22, 1985 , and \n \n “(B)  a loan was extended by the Rural Electrification Administration on  February 20, 1986 , which contained a covenant with respect to used property leasing from unit II. \n \n \n “(19)   Certain rail systems.— “(A)  The amendments made by section 201 shall not apply to a light rail transit system, the approximate cost of which is $235,000,000, if, with respect to which, the board of directors of a corporation (formed in September 1984 for the purpose of developing, financing, and operating the system) authorized a $300,000 expenditure for a feasibility study in April 1985. \n \n “(B)  The amendments made by section 201 shall not apply to any project for rehabilitation of regional railroad rights of way and properties including grade crossings which was authorized by the Board of Directors of such company prior to October 1985; and/or was modified, altered or enlarged as a result of termination of company contracts, but approved by said Board of Directors no later than  January 30, 1986 , and which is in the public interest, and which is subject to binding contracts or substantive commitments by  December 31, 1987 . \n \n \n “(20)   Certain detergent manufacturing facility .— The amendments made by section 201 shall not apply to a laundry detergent manufacturing facility, the approximate cost of which is $13,200,000, with respect to which a project agreement was fully executed on  March 17, 1986 . \n \n “(21)   Certain resource recovery facility .— The amendments made by section 201 shall not apply to any of 3 resource recovery plants, the aggregate cost of which approximates $300,000,000, if an industrial development authority adopted a bond resolution with respect to such facilities on  December 17, 1984 , and the projects were approved by the department of commerce of a Commonwealth on  December 27, 1984 . \n \n “(22)  The amendments made by section 201 shall not apply to a computer and office support center building in Minneapolis, with respect to which the first contract, with an architecture firm, was signed on  April 30, 1985 , and a construction contract was signed on  March 12, 1986 . \n \n “(23)   Certain district heating and cooling facilities .— The amendments made by section 201 shall not apply to pipes, mains, and related equipment included in district heating and cooling facilities, with respect to which the development authority of a State approved the project through an inducement resolution adopted on  October 8, 1985 , and in connection with which approximately $11,000,000 of tax-exempt bonds are to be issued. \n \n “(24)   Certain vessels.— “(A)   Certain offshore vessels .— The amendments made by section 201 shall not apply to any offshore vessel the construction contract for which was signed on  February 28, 1986 , and the approximate cost of which is $9,000,000. \n \n “(B)   Certain inland river vessel .— The amendments made by section 201 shall not apply to a project involving the reconstruction of an inland river vessel docked on the Mississippi River at St. Louis, Missouri, on  July 14, 1986 , and with respect to which: “(i)  the estimated cost of reconstruction is approximately $39,000,000; \n \n “(ii)  reconstruction was commenced prior to  December 1, 1985 ; \n \n “(iii)  at least $17,000,000 was expended before  December 31, 1985 ; and \n \n \n “(C)   Special automobile carrier vessels .— The amendments made by section 201 shall not apply to two new automobile carrier vessels which will cost approximately $47,000,000 and will be constructed by a United States-flag carrier to operate, under the United States-flag and with an American crew, to transport foreign automobiles to the United States, in a case where negotiations for such transportation arrangements commenced in April 1985, formal contract bids were submitted prior to the end of 1985, and definitive transportation contracts were awarded in May 1986. \n \n “(D)  The amendments made by section 201 shall not apply to a 562-foot passenger cruise ship, which was purchased in 1980 for the purpose of returning the vessel to United States service, the approximate cost of refurbishment of which is approximately $47,000,000. \n \n “(E)  The amendments made by section 201 shall not apply to the Muskegon, Michigan, Cross-Lake Ferry project having a projected cost of approximately $7,200,000. \n \n “(F)  The amendments made by section 201 shall not apply to a new automobile carrier vessel, the contract price for which is no greater than $28,000,000, and which will be constructed for and placed in service by OSG Car Carriers, Inc., to transport, under the United States flag and with an American crew, foreign automobiles to North America in a case where negotiations for such transportation arrangements commenced in 1985, and definitive transportation contracts were awarded before June 1986. \n \n \n “(25)   Certain wood energy projects .— The amendments made by section 201 shall not apply to two wood energy projects for which applications with the Federal Energy Regulatory Commission were filed before  January 1, 1986 , which are described as follows: “(A)  a 26.5 megawatt plant in Fresno, California, and \n \n “(B)  a 26.5 megawatt plant in Rocklin, California. \n \n \n “(26)  The amendments made by section 201 shall not apply to property which is a geothermal project of less than 20 megawatts that was certified by the Federal Energy Regulatory Commission on  July 14, 1986 , as a qualifying small power production facility for purposes of the Public Utility Regulatory Policies Act of 1978 [see Short Title note set out under  16 U.S.C. 2601 ] pursuant to an application filed with the Federal Energy Regulatory Commission on  April 17, 1986 . \n \n “(27)   Certain economic development projects .— The amendments made by section 201 shall not apply to any of the following projects: “(A)  A mixed use development on the East River the total cost of which is approximately $400,000,000, with respect to which a letter of intent was executed on  January 24, 1984 , and with respect to which approximately $2.5 million had been spent by  March 1, 1986 . \n \n “(B)  A 356-room hotel, banquet, and conference facility (including 540,000 square feet of office space) the approximate cost of which is $158,000,000, with respect to which a letter of intent was executed on  June 1, 1984 , and with respect to which an inducement resolution and bond resolution was adopted on  August 20, 1985 . \n \n “(C)  Phase 1 of a 4-phase project involving the construction of laboratory space and ground-floor retail space the estimated cost of which is $22,000,000 and with respect to which a memoradum [sic] of understanding was made on  August 29, 1983 . \n \n “(D)  A project involving the development of a 490,000 square foot mixed-use building at 152 W. 57th Street, New York, New York, the estimated cost of which is $100,000,000, and with respect to which a building permit application was filed in May 1986. \n \n “(E)  A mixed-use project containing a 300 unit, 12-story hotel, garage, two multi-rise office buildings, and also included a park, renovated riverboat, and barge with festival marketplace, the capital outlays for which approximate $68,000,000. \n \n “(F)  The construction of a three-story office building that will serve as the home office for an insurance group and its affiliated companies, with respect to which a city agreed to transfer its ownership of the land for the project in a Redevelopment Agreement executed on  September 18, 1985 , once certain conditions are met. \n \n “(G)  A commercial bank formed under the laws of the State of New York which entered into an agreement on  September 5, 1985 , to construct its headquarters at 60 Wall Street, New York, New York, with respect to such headquarters. \n \n “(H)  Any property which is part of a commercial and residential project, the first phase of which is currently under construction, to be developed on land which is the subject of an ordinance passed on  July 20, 1981 , by the city council of the city in which such land is located, designating such land and the improvements to be placed thereon as a residential-business planned development, which development is being financed in part by the proceeds of industrial development bonds in the amount of $62,600,000 issued on  December 4, 1985 . \n \n “(I)  A 600,000 square foot mixed use building known as Flushing Center with respect to which a letter of intent was executed on  March 26, 1986 . \n \n\n In the case of the building described in subparagraph (I), section 203(b)(2)(A) shall be applied by substituting ‘ January 1, 1993 ’ for the applicable date which would otherwise apply. \n \n “(28)  The amendments made by section 201 shall not apply to an $80,000,000 capital project steel seamless tubular casings minimill and melting facility located in Youngstown, Ohio, which was purchased by the taxpayer in April 1985, and— “(A)  the purchase and renovation of which was approved by a committee of the Board of Directors on  February 22, 1985 , and \n \n “(B)  as of  December 31, 1985 , more than $20,000,000 was incurred or committed with respect to the renovation. \n \n \n “(29)  The amendments made by section 201 shall not apply to any project for residential rental property if— “(A)  an inducement resolution with respect to such project was adopted by the State housing development authority on  January 25, 1985 , and \n \n “(B)  such project was the subject of a law suit filed on  October 25, 1985 . \n \n \n “(30)  The amendments made by section 201 shall not apply to a 30 megawatt electric generating facility fueled by geothermal and wood waste, the approximate cost of which is $55,000,000, and with respect to which a 30-year power sales contract was executed on  March 22, 1985 . \n \n “(31)  The amendments made by section 201 shall not apply to railroad maintenance-of-way equipment, with respect to which a Boston bank entered into a firm binding contract with a major northeastern railroad before  March 2, 1986 , to finance $10,500,000 of such equipment, if all of the equipment was placed in service before  August 1, 1986 . \n \n “(32)  The amendment made by section 201 shall not apply to— “(A)  a facility constructed on approximately seven acres of land located on Ogle’s Poso Creek Oil field, the primary fuel of which will be bituminous coal from Utah or Wyoming, with respect to which an application for an authority to construct was filed on  December 26, 1985 , an authority to construct was issued on  July 2, 1986 , and a prevention of significant deterioration permit application was submitted in May 1985, \n \n “(B)  a facility constructed on approximately seven acres of land located on Teorco’s Jasmin oil field, the primary fuel of which will be bituminous coal from Utah or Wyoming, with respect to which an authority to construct was filed on  December 26, 1985 , an authority to construct was issued on  July 2, 1986 , and a prevention of significant deterioration permit application was submitted in July 1985, \n \n “(C)  the Mountain View Apartments, in Hadley, Massachusetts, \n \n “(D)  a facility expected to have a capacity of not less than 65 megawatts of electricity, the steam from which is to be sold to a pulp and paper mill, with respect to which application was made to the Federal Regulatory Commission for certification as a qualified facility on  November 1, 1985 , and received such certification on  January 24, 1986 , \n \n “(E)  $5,000,000 of equipment ordered in 1986, in connection with a 60,000 square foot plant in Masontown, Pennsylvania, that was completed in 1983, \n \n “(F)  a magnetic resonance imaging machine, with respect to which a binding contract to purchase was entered into in April 1986, in connection with the construction of a magnetic resonance imaging clinic with respect to which a Determination of Need certification was obtained from a State Department of Public Health on  October 22, 1985 , if such property is placed in service before  December 31, 1986 , \n \n “(G)  a company located in Salina, Kansas, which has been engaged in the construction of highways and city streets since 1946, but only to the extent of $1,410,000 of investment in new section 38 property, \n \n “(H)  a $300,000 project undertaken by a small metal finishing company located in Minneapolis, Minnesota, the first parts of which were received and paid for in January 1986, with respect to which the company received Board approval to purchase the largest piece of machinery it has ever ordered in 1985, \n \n “(I)  A $1,200,000 finishing machine that was purchased on  April 2, 1986  and placed into service in September 1986 by a company located in Davenport, Iowa, \n \n “(J)  A 25 megawatt small power production facility, with respect to which Qualifying Facility status numbered QF86–593–000\u2000was granted on  March 5, 1986 , \n \n “(K)  A 250 megawatt coal-fired electric plant in northeastern Nevada estimated to cost $600,000,000 and known as the Thousand Springs project, on which the Sierra Pacific Power Company, a subsidiary of Sierra Pacific Resources, began in 1980 work to design, finance, construct, and operate (and section 203(b)(2) shall be applied with respect to such plant by substituting ‘ January 1, 1995 ’ for ‘ January 1, 1991 ’), \n \n “(L)  128 units of rental housing in connection with the Point Gloria Limited Partnership, \n \n “(M)  property which is part of the Kenosha Downtown Redevelopment Project and which is financed with the proceeds of bonds issued pursuant to section 1317(6)(W) [set out as a note under  section 141 of this title ], \n \n “(N)  Lakeland Park Phase II, in Baton Rouge, Louisiana, \n \n “(O)  the Santa Rosa Hotel, in Pensacola, Florida, \n \n “(P)  the Sheraton Baton Rouge, in Baton Rouge, Louisiana, \n \n “(Q)  $300,000 of equipment placed in service in 1986, in connection with the renovation of the Best Western Townhouse Convention Center in Cedar Rapids, Iowa, \n \n “(R)  the segment of a nationwide fiber optics telecommunications network placed in service by SouthernNet, the total estimated cost of which is $37,000,000, \n \n “(S)  two cogeneration facilities, to be placed in service by the Reading Anthracite Coal Company (or any subsidiary thereof), costing approximately $110,000,000 each, with respect to which filings were made with the Federal Energy Regulatory Commission by  December 31, 1985 , and which are located in Pennsylvania, \n \n “(T)  a portion of a fiber optics network placed in service by LDX NET after  December 31, 1988 , but only to the extent the cost of such portion does not exceed $25,000,000, \n \n “(U)  3 newly constructed fishing vessels, and one vessel that is overhauled, constructed by Mid Coast Marine, but only to the extent of $6,700,000 of investment, \n \n “(V)  $350,000 of equipment acquired in connection with the reopening of a plant in Bristol, Rhode Island, which plant was purchased by Buttonwoods, Ltd., Associates on  February 7, 1986 , \n \n “(W)  $4,046,000 of equipment placed in service by Brendle’s Incorporated, acquired in connection with a Distribution Center, \n \n “(X)  a multi-family mixed-use housing project located in a home rule city, the zoning for which was changed to residential business planned development on  November 26, 1985 , and with respect to which both the home rule city on  December 4, 1985 , and the State housing finance agency on  December 20, 1985 , adopted inducement resolutions, \n \n “(Y)  the Myrtle Beach Convention Center, in South Carolina, to the extent of $25,000,000 of investment, and \n \n “(Z)  railroad cars placed in service by the Pullman Leasing Company, pursuant to an  April 3, 1986  purchase order, costing approximately $10,000,000. \n \n \n “(33)  The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to— “(A)  $400,000 of equipment placed in service by Super Key Market, if such equipment is placed in service before  January 1, 1987 , \n \n “(B)  the Trolley Square project, the total project cost of which is $24,500,000, and the amount of depreciable real property of which is $14,700,000. \n \n “(C) (i)  a waste-to-energy project in Derry, New Hampshire, costing approximately $60,000,000, and \n \n “(ii)  a waste-to-energy project in Manchester, New Hampshire, costing approximately $60,000,000, \n \n \n “(D)  the City of Los Angeles Co-composting project, the estimated cost of which is $62,000,000, with respect to which, on  July 17, 1985 , the California Pollution Control Financing Authority issued an initial resolution in the maximum amount of $75,000,000 to finance this project, \n \n “(E)  the St. Charles, Missouri Mixed-Use Center, \n \n “(F)  Oxford Place in Tulsa, Oklahoma, \n \n “(G)  an amount of investment generating $20,000,000 of investment tax credits attributable to property used on the Illinois Diversatech Campus, \n \n “(H)  $25,000,000 of equipment used in the Melrose Park Engine Plant that is sold and leased back by Navistar, \n \n “(I)  80,000 vending machines, for a cost approximating $3,400,000 placed into service by Folz Vending Co., \n \n “(J)  A 25.85 megawatt alternative energy facility located in Deblois, Maine, with respect to which certification by the Federal Energy Regulatory Commission was made on  April 3, 1986 , \n \n “(K)  Burbank Manors, in Illinois, and \n \n “(L)  a cogeneration facility to be built at a paper company in Turners Falls, Massachusetts, with respect to which a letter of intent was executed on behalf of the paper company on  September 26, 1985 . \n \n \n “(40)  [Par. (40) probably should follow par. (39).]   Certain trucks, etc .—The amendments made by section 201 shall not apply to trucks, tractor units, and trailers which a privately held truck leasing company headquartered in Des Moines, Iowa, contracted to purchase in September 1985 but only to the extent the aggregate reduction in Federal tax liability by reason of the application of this paragraph does not exceed $8,500,000. \n \n “(34)  The amendments made by section 201 shall not apply to an approximately 240,000 square foot beverage container manufacturing plant located in Batesville, Mississippi, or plant equipment used exclusively on the plant premises if— “(A)  a 2-year supply contract was signed by the taxpayer and a customer on  November 1, 1985 , \n \n “(B)  such contract further obligated the customer to purchase beverage containers for an additional 5-year period if physical signs of construction of the plant are present before September 1986, \n \n “(C)  ground clearing for such plant began before August 1986, and \n \n “(D)  construction is completed, the equipment is installed, and operations are commenced before  July 1, 1987 . \n \n \n “(35)  The amendments made by section 201 shall not apply to any property which is part of the multifamily housing at the Columbia Point Project in Boston, Massachusetts. A project shall be treated as not described in the preceding sentence and as not described in section 252(f)(1)(D) [set out as a note under  section 42 of this title ] unless such project includes at substantially all times throughout the compliance period (within the meaning of section 42(i)(1) of the Internal Revenue Code of 1986), a facility which provides health services to the residents of such project for fees commensurate with the ability of such individuals to pay for such services. \n \n “(36)  The amendments made by section 201 shall not apply to any ethanol facility located in Blair, Nebraska, if— “(A)  in July of 1984 an initial binding construction contract was entered into for such facility, \n \n “(B)  in June of 1986, certain Department of Energy recommended contract changes required a change of contractor, and \n \n “(C)  in September of 1986, a new contract to construct such facility, consistent with such recommended changes, was entered into. \n \n \n “(37)  The amendments made by section 201 shall not apply to any property which is part of a sewage treatment facility if, prior to  January 1, 1986 , the City of Conyers, Georgia, selected a privatizer to construct such facility, received a guaranteed maximum price bid for the construction of such facility, signed a letter of intent and began substantial negotiations of a service agreement with respect to such facility. \n \n “(38)  The amendments made by section 201 shall not apply to— “(A)  a $28,000,000 wood resource complex for which construction was authorized by the Board of Directors on  August 9, 1985 , \n \n “(B)  an electrical cogeneration plant in Bethel, Maine which is to generate 2 megawatts of electricity from the burning of wood residues, with respect to which a contract was entered into on  July 10, 1984 , and with respect to which $200,000 of the expected $2,000,000 cost had been committed before  June 15, 1986 , \n \n “(C)  a mixed income housing project in Portland, Maine which is known as the Back Bay Tower and which is expected to cost $17,300,000, \n \n “(D)  the Eastman Place project and office building in Rochester, New York, which is projected to cost $20,000,000, with respect to which an inducement resolution was adopted in December 1986, and for which a binding contract of $500,000 was entered into on  April 30, 1986 , \n \n “(E)  the Marquis Two project in Atlanta, Georgia which has a total budget of $72,000,000 and the construction phase of which began under a contract entered into on  March 26, 1986 , \n \n “(F)  a 166-unit continuing care retirement center in New Orleans, Louisiana, the construction contract for which was signed on  February 12, 1986 , and is for a maximum amount not to exceed $8,500,000, \n \n “(G)  the expansion of the capacity of an oil refining facility in Rosemont, Minnesota from 137,000 to 207,000 barrels per day which is expected to be completed by  December 31, 1990 , and \n \n “(H)  a project in Ransom, Pennsylvania which will burn coal waste (known as ‘culm’) with an approximate cost of $64,000,000 and for which a certification from the Federal Energy Regulatory Commission was received on  March 11, 1986 . \n \n \n “(39)  The amendments made by section 201 shall not apply to any facility for the manufacture of an improved particle board if a binding contract to purchase such equipment was executed  March 3, 1986 , such equipment will be placed in service by  January 1, 1988 , and such facility is located in or near Moncure, North Carolina. \n \n \n “(b)   Special Rule for Certain Property .— The provisions of section 168(f)(8) of the Internal Revenue Code of 1954 (as amended by section 209 of the Tax Equity and Fiscal Responsibility Act of 1982) shall continue to apply to any transaction permitted by reason of section 12(c)(2) of the Tax Reform Act of 1984 or section 209(d)(1)(B) of the Tax Equity and Fiscal Responsibility Act of 1982 (as amended by the Tax Reform Act of 1984) [ section 12(c)(2) of Pub. L. 98–369  and  section 209(d)(1)(B) of Pub. L. 97–248 , respectively, set out below]. \n \n “(c)   Applicable Date in Certain Cases.— “(1)  Section 203(b)(2) shall be applied by substituting ‘ January 1, 1992 ’ for ‘ January 1, 1991 ’ in the following cases. “(A)  in the case of a 2-unit nuclear powered electric generating plant (and equipment and incidental appurtenances), located in Pennsylvania and constructed pursuant to contracts entered into by the owner operator of the facility before  December 31, 1975 , including contracts with the engineer/constructor and the nuclear steam system supplier, such contracts shall be treated as contracts described in section 203(b)(1)(A), \n \n “(B)  a cogeneration facility with respect to which an application with the Federal Energy Regulatory Commission was filed on  August 2, 1985 , and approved  October 15, 1985 . \n \n “(C)  in the case of a 1,300 megawatt coal-fired steam powered electric generating plant (and related equipment and incidental appurtenances), which the three owners determined in 1984 to convert from nuclear power to coal power and for which more than $600,000,000 had been incurred or committed for construction before  September 25, 1985 , except that no investment tax credit will be allowable under section 49(d)(3) added by section 211(a) of this Act [ section 49(d) of this title  does not contain a par. (3)] for any qualified progress expenditures made after  December 31, 1990 . \n \n \n “(2)  Section 203(b)(2) shall be applied by substituting ‘ April 1, 1992 ’ for the applicable date that would otherwise apply, in the case of the second unit of a twin steam electric generating facility and related equipment which was granted a certificate of public convenience and necessity by a public service commission prior to  January 1, 1982 , if the first unit of the facility was placed in service prior to  January 1, 1985 , and before  September 26, 1985 , more than $100,000,000 had been expended toward the construction of the second unit. \n \n “(3)  Section 203(b)(2) shall be applied by substituting ‘ January 1, 1990 ,’ (or, in the case of a project described in subparagraph (B), by substituting ‘ April 1, 1992 ’) for the applicable date that would otherwise apply in the case of— “(A)  new commercial passenger aircraft used by a domestic airline, if a binding contract with respect to such aircraft was entered into on or before  April 1, 1986 , and such aircraft has a present class life of 12 years, \n \n “(B)  a pumped storage hydroelectric project with respect to which an application was made to the Federal Energy Regulatory Commission for a license on  February 4, 1974 , and license was issued  August 1, 1977 , the project number of which is 2740, and \n \n “(C)  a newsprint mill in Pend Oreille county, Washington, costing about $290,000,000. \n \n\n In the case of an aircraft described in subparagraph (A), section 203(b)(1)(A) shall be applied by substituting ‘ April 1, 1986 ’ for ‘ March 1, 1986 ’ and section 49(e)(1)(B) of the Internal Revenue Code of 1986 shall not apply. \n \n “(4)  The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to a limited amount of the following property or a limited amount of property set forth in a submission before  September 16, 1986 , by the following taxpayers: “(A)  Arena project, Michigan, but only with respect to $78,000,000 of investments. \n \n “(B)  Campbell Soup Company, Pennsylvania, California, North Carolina, Ohio, Maryland, Florida, Nebraska, Michigan, South Carolina, Texas, New Jersey, and Delaware, but only with respect to $9,329,000 of regular investment tax credits. \n \n “(C)  The Southeast Overtown/Park West development, Florida, but only with respect to $200,000,000 of investments. \n \n “(D)  Equipment placed in service and operated by Leggett and Platt before  July 1, 1987 , but only with respect to $2,000,000 of regular investment tax credits, and subsections (c) and (d) of section 49 of the Internal Revenue Code of 1986 shall not apply to such equipment. \n \n “(E)  East Bank Housing Project. \n \n “(F)  $1,561,215 of investments by Standard Telephone Company. \n \n “(G)  Five aircraft placed in service before  January 1, 1987 , by Presidential Air. \n \n “(H)  A rehabilitation project by Ann Arbor Railroad, but only with respect to $2,900,000 of investments. \n \n “(I)  Property that is part of a cogeneration project located in Ada, Michigan, but only with respect to $30,000,000 of investments. \n \n “(J)  Anchor Store Project, Michigan, but only with respect to $21,000,000 of investments. \n \n “(K)  A waste-fired electrical generating facility of Biogen Power, but only with respect to $34,000,000 of investments. \n \n “(L)  $14,000,000 of television transmitting towers placed in service by Media General, Inc., which were subject to binding contracts as of  January 21, 1986 , and will be placed in service before  January 1, 1988 , \n \n “(M)  Interests of Samuel A. Hardage (whether owned individually or in partnership form). \n \n “(N)  Two aircraft of Mesa Airlines with an aggregate cost of $5,723,484. \n \n “(O)  Yarn-spinning equipment used at Spray Cotton Mills, but only with respect to $3,000,000 of investments. \n \n “(P)  328 units of low-income housing at Angelus Plaza, but only with respect to $20,500,000 of investments. \n \n “(Q)  One aircraft of Continental Aviation Services with a cost of approximately $15,000,000 that was purchased pursuant to a contract entered into during March of 1983 and that is placed in service by  December 31, 1988 . \n \n \n \n “(d)   Railroad Grading and Tunnel Bores.— “(1)   In general .— In the case of expenditures for railroad grading and tunnel bores which were incurred by a common carrier by railroad to replace property destroyed in a disaster occurring on or about  April 17, 1983 , near Thistle, Utah, such expenditures, to the extent not in excess of $15,000,000, shall be treated as recovery property which is 5-year property under section 168 of the Internal Revenue Code of 1954 (as in effect before the amendments made by this Act) and which is placed in service at the time such expenditures were incurred. \n \n “(2)   Business interruption proceeds .— Business interruption proceeds received for loss of use, revenues, or profits in connection with the disaster described in paragraph (1) and devoted by the taxpayer described in paragraph (1) to the construction of replacement track and related grading and tunnel bore expenditures shall be treated as constituting an amount received from the involuntary conversion of property under section 1033(a)(2) of such Code. \n \n “(3)   Effective date .— This subsection shall apply to taxable years ending after  April 17, 1983 . \n \n \n “(e)   Treatment of Certain Disaster Losses.— “(1)   In general .— In the case of a disaster described in paragraph (2), at the election of the taxpayer, the amendments made by section 201 of this Act [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title]— “(A)  shall not apply to any property placed in service during 1987 or 1988, or \n \n “(B)  shall apply to any property placed in service during 1985 or 1986, \n \n\n which is property to replace property lost, damaged, or destroyed in such disaster. \n \n “(2)   Disaster to which section applies .— This section shall apply to a flood which occurred on November 3 through 7, 1985, and which was declared a natural disaster area by the President of the United States.”\nPub. L. 100–647, title I, §\u202f1002(c)(3) ,  Nov. 10, 1988 ,  102 Stat. 3358 , provided that:  “Notwithstanding section 203 of the Reform Act [ section 203 of Pub. L. 99–514 , set out above], the amendments made by section 201 of the Reform Act [ section 201 of Pub. L. 99–514 , amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall apply to any real property which was acquired before  January 1, 1987 , and was converted on or after such date from personal use to a use for which depreciation is allowable.”\nAmendment by  section 201(a) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by sections 1802(a)(1)–(2)(D), (G), (3), (4)(A), (B), (7), (b)(1), 1809(a)(1)–(2)(B), (4)(A), (B) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1802(a)(2)(E)(ii) ,  Oct. 22, 1986 ,  100 Stat. 2788 , provided that: \n “(I)  Except as otherwise provided in this clause, the amendment made by clause (i) [amending this section] shall apply to property placed in service after  September 27, 1985 ; except that such amendment shall not apply to any property acquired pursuant to a binding written contract in effect on such date (and at all times thereafter). \n \n “(II)  If an election under this subclause is made with respect to any property, the amendment made by clause (i) shall apply to such property whether or not placed in service on or before  September 27, 1985 .”\nPub. L. 99–514, title XVIII, §\u202f1809(a)(2)(C)(i) ,  Oct. 22, 1986 ,  100 Stat. 2819 , provided in part that amendment by  section 1809(a)(2)(C)(i) of Pub. L. 99–514  is effective on and after  Oct. 22, 1986 .\nPub. L. 99–514, title XVIII, §\u202f1809(b)(3) ,  Oct. 22, 1986 ,  100 Stat. 2821 , provided that:  “The amendments made by this subsection [amending this section] shall apply to property placed in service by the transferee after  December 31, 1985 , in taxable years ending after such date.”\nPub. L. 99–121, title I, §\u202f105(b) ,  Oct. 11, 1985 ,  99 Stat. 510 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by section 103 [amending this section and sections 47, 48, 57, 312, and 1245 of this title] shall apply with respect to property placed in service by the taxpayer after  May 8, 1985 . \n \n “(2)   Exception .— The amendments made by section 103 shall not apply to property placed in service by the taxpayer before  January 1, 1987 , if— “(A)  the taxpayer or a qualified person entered into a binding contract to purchase or construct such property before  May 9, 1985 , or \n \n “(B)  construction of such property was commenced by or for the taxpayer or a qualified person before  May 9, 1985 . \n \n\n For purposes of this paragraph, the term ‘qualified person’ means any person whose rights in such a contract or such property are transferred to the taxpayer, but only if such property is not placed in service before such rights are transferred to the taxpayer. \n \n “(3)   Special rule for components .— For purposes of applying section 168(f)(1)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 103) to components placed in service after  December 31, 1986 , property to which paragraph (2) of this subsection applies shall be treated as placed in service by the taxpayer before  May 9, 1985 . \n \n “(4)   Technical correction .— The amendment made by paragraph (6) of section 103(b) [amending  section 47 of this title ] shall apply as if included in the amendments made by section 111 of the Tax Reform Act of 1984 [ Pub. L. 98–369 , see Effective Date of 1984 Amendment note below]. \n \n “(5)   Special rule for leasing of qualified rehabilitated buildings .— The amendment made by paragraph (5) of section 103(b) to section 48(g)(2)(B)(v) of the Internal Revenue Code of 1986 shall not apply to leases entered into before  May 22, 1985 , but only if the lessee signed the lease before  May 17, 1985 .”\nAmendment by  section 12 of Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f31(g) ,  July 18, 1984 ,  98 Stat. 521 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1802(a)(2)(F), (10)(A)–(D)(i), (E)–(G),  Oct. 22, 1986 ,  100 Stat. 2095 , 2788, 2790, 2791;  Pub. L. 100–647, title I, §\u202f1018(b)(1) ,  Nov. 10, 1988 ,  102 Stat. 3577 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 46, 48, and 7701 of this title] shall apply— “(A)  to property placed in service by the taxpayer after  May 23, 1983 , in taxable years ending after such date, and \n \n “(B)  to property placed in service by the taxpayer on or before  May 23, 1983 , if the lease to the tax-exempt entity is entered into after  May 23, 1983 . \n \n \n “(2)   Leases entered into on or before  may 23, 1983 .— The amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity if the property is leased pursuant to— “(A)  a lease entered into on or before  May 23, 1983  (or a sublease under such a lease), or \n \n “(B)  any renewal or extension of a lease entered into on or before  May 23, 1983 , if such renewal or extension is pursuant to an option exercisable by the tax-exempt entity which was held by the tax-exempt entity on  May 23, 1983 . \n \n \n “(3)   Binding contracts, etc.— “(A)  The amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity if such lease is pursuant to 1 or more written binding contracts which, on  May 23, 1983 , and at all times thereafter, required— “(i)  the taxpayer (or his predecessor in interest under the contract) to acquire, construct, reconstruct, or rehabilitate such property, and \n \n “(ii)  the tax-exempt entity (or a tax-exempt predecessor thereof) to be the lessee of such property. \n \n \n “(B)  Paragraph (9) of section 168(j) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section) shall not apply with respect to any property owned by a partnership if— “(i)  such property was acquired by such partnership on or before  October 21, 1983 , or \n \n “(ii)  such partnership entered into a written binding contract which, on  October 21, 1983 , and at all times thereafter, required the partnership to acquire or construct such property. \n \n \n “(C)  The amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity (other than any foreign person or entity)— “(i)  if— “(I)  on or before  May 23, 1983 , the taxpayer (or his predecessor in interest under the contract) or the tax-exempt entity entered into a written binding contract to acquire, construct, reconstruct, or rehabilitate such property and such property had not previously been used by the tax-exempt entity, or \n \n “(II)  the taxpayer or the tax-exempt entity acquired the property after  June 30, 1982 , and on or before  May 23, 1983 , or completed the construction, reconstruction, or rehabilitation of the property after  December 31, 1982 , and on or before  May 23, 1983 , and \n \n \n “(ii)  if such lease is pursuant to a written binding contract entered into before  January 1, 1985 , which requires the tax-exempt entity to be the lessee of such property. \n \n \n \n “(4)   Official governmental action on or before  november 1, 1983 .— “(A)   In general .— The amendments made by this section shall not apply with respect to any property leased to a tax-exempt entity (other than the United States, any agency or instrumentality thereof, or any foreign person or entity) if— “(i)  on or before  November 1, 1983 , there was significant official governmental action with respect to the project or its design, and \n \n “(ii)  the lease to the tax-exempt entity is pursuant to a written binding contract entered into before  January 1, 1985 , which requires the tax-exempt entity to be the lessee of the property. \n \n \n “(B)   Significant official governmental action .— For purposes of subparagraph (A), the term ‘significant official governmental action’ does not include granting of permits, zoning changes, environmental impact statements, or similar governmental actions. \n \n “(C)   Special rule for credit unions .— In the case of any property leased to a credit union pursuant to a written binding contract with an expiration date of  December 31, 1984 , which was entered into by such organization on  August 23, 1984 — “(i)  such credit union shall not be treated as an agency or instrumentality of the United States; and \n \n “(ii)  clause (ii) of subparagraph (A) shall be applied by substituting ‘ January 1, 1987 ’ for ‘ January 1, 1985 ’. \n \n \n “(D)   Special rule for greenville auditorium board .— For purposes of this paragraph, significant official governmental action taken by the Greenville County Auditorium Board of Greenville, South Carolina, before  May 23, 1983 , shall be treated as significant official governmental action with respect to the coliseum facility subject to a binding contract to lease which was in effect on  January 1, 1985 . \n \n “(E)   Treatment of certain historic structures .— If— “(i)  on  June 16, 1982 , the legislative body of the local governmental unit adopted a bond ordinance to provide funds to renovate elevators in a deteriorating building owned by the local governmental unit and listed in the National Register, and \n \n “(ii)  the chief executive officer of the local governmental unit, in connection with the renovation of such building, made an application on  June 1, 1983 , to a State agency for a Federal historic preservation grant and made an application on  June 17, 1983 , to the Economic Development Administration of the United States Department of Commerce for a grant, \n \n\n the requirements of clauses (i) and (ii) of subparagraph (A) shall be treated as met. \n \n \n “(5)   Mass commuting vehicles .— The amendments made by this section shall not apply to any qualified mass commuting vehicle (as defined in section 103(b)(9) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) which is financed in whole or in part by obligations the interest on which is excludable from gross income under section 103(a) of such Code if— “(A)  such vehicle is placed in service before  January 1, 1988 , or \n \n “(B)  such vehicle is placed in service on or after such date— “(i)  pursuant to a binding contract or commitment entered into before  April 1, 1983 , and \n \n “(ii)  solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee. \n \n \n \n “(6)   Certain turbines and boilers .— The amendments made by this section shall not apply to any property described in section 208(d)(3)(E) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 208(d)(3)(E) of Pub. L. 97–248 , set out as an Effective Date of 1982 Amendments note below]. \n \n “(7)   Certain facilities for which ruling requests filed on or before  may 23, 1983 .— The amendments made by this section shall not apply with respect to any facilities described in clause (ii) of section 168(f)(12)(C) of the Internal Revenue Code of 1986 (relating to certain sewage or solid waste disposal facilities), as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ], if a ruling request with respect to the lease of such facility to the tax-exempt entity was filed with the Internal Revenue Service on or before  May 23, 1983 . \n \n “(8)   Recovery period for certain qualified sewage facilities.— “(A)   In general .— In the case of any property (other than 15-year real property) which is part of a qualified sewage facility, the recovery period used for purposes of paragraph (1) of section 168(j) of the Internal Revenue Code of 1986 (as added by this section) shall be 12 years. For purposes of the preceding sentence, the term ‘15-year real property’ includes 18-year real property. \n \n “(B)   Qualified sewage facility .— For purposes of subparagraph (A), the term ‘qualified sewage facility’ means any facility which is part of the sewer system of a city, if— “(i)  on  June 15, 1983 , the City Council approved a resolution under which the city authorized the procurement of equity investments for such facility, and \n \n “(ii)  on  July 12, 1983 , the Industrial Development Board of the city approved a resolution to issue a $100,000,000 industrial development bond issue to provide funds to purchase such facility. \n \n \n \n “(9)   Property used by the postal service .— In the case of property used by the United States Postal Service, paragraphs (1) and (2) shall be applied by substituting ‘October 31’ for ‘May 23’. \n \n “(10)   Existing appropriations .— The amendments made by this section shall not apply to personal property leased to or used by the United States if— “(A)  an express appropriation has been made for rentals under such lease for the fiscal year 1983 before  May 23, 1983 , and \n \n “(B)  the United States or an agency or instrumentality thereof has not provided an indemnification against the loss of all or a portion of the tax benefits claimed under the lease or service contract. \n \n \n “(11)   Special rule for certain partnerships.— “(A)   Partnerships for which qualifying action existed before  october 21, 1983 .— Paragraph (9) of section 168(j) of the Internal Revenue Code of 1986 (as added by this section) shall not apply to any property acquired, directly or indirectly, before  January 1, 1985 , by any partnership described in subparagraph (B). \n \n “(B)   Application filed before  october 21, 1983 .— A partnership is described in this subparagraph if— “(i)  before  October 21, 1983 , the partnership was organized, a request for exemption with respect to such partnership was filed with the Department of Labor, and a private placement memorandum stating the maximum number of units in the partnership that would be offered had been circulated, \n \n “(ii)  the interest in the property to be acquired, directly or indirectly (including through acquiring an interest in another partnership) by such partnership was described in such private placement memorandum, and \n \n “(iii)  the marketing of partnership units in such partnership is completed not later than two years after the later of the date of the enactment of this Act [ July 18, 1984 ] or the date of publication in the Federal Register of such exemption by the Department of Labor and the aggregate number of units in such partnership sold does not exceed the amount described in clause (i). \n \n \n “(C)   Partnerships for which qualifying action existed before  march 6, 1984 .— Paragraph (9) of section 168(j) of the Internal Revenue Code of 1986 (as added by this section) shall not apply to any property acquired directly or indirectly, before  January 1, 1986 , by any partnership described in subparagraph (D). For purposes of this subparagraph, property shall be deemed to have been acquired prior to  January 1, 1986 , if the partnership had entered into a written binding contract to acquire such property prior to  January 1, 1986  and the closing of such contract takes place within 6 months of the date of such contract (24 months in the case of new construction). \n \n “(D)   Partnership organized before  march 6, 1984 .— A partnership is described in this subparagraph if— “(i)  before  March 6, 1984 , the partnership was organized and publicly announced the maximum amount (as shown in the registration statement, prospectus or partnership agreement, whichever is greater) of interests which would be sold in the partnership, and \n \n “(ii)  the marketing or partnership interests in such partnership was completed not later than the 90th day after the date of the enactment of this Act [ July 18, 1984 ] and the aggregate amount of interest in such partnership sold does not exceed the maximum amount described in clause (i). \n \n \n \n “(12)   Special rule for amendment made by subsection (c)(2) .— The amendment made by subsection (c)(2) [amending  section 48(g)(2)(B)(i) of this title ] to the extent it relates to subsection (f)(12) of section 168 of the Internal Revenue Code of 1986 shall take effect as if it had been included in the amendments made by section 216(a) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 216(a) of Pub. L. 97–248 , which amended this section]. \n \n “(13)   Special rule for service contracts not involving tax-exempt entities .— In the case of a service contract or other arrangement described in section 7701(e) of the Internal Revenue Code of 1986 (as added by this section) with respect to which no party is a tax-exempt entity, such section 7701(e) shall not apply to— “(A)  such contract or other arrangement if such contract or other arrangement was entered into before  November 5, 1983 , or \n \n “(B)  any renewal or other extension of such contract or other arrangement pursuant to an option contained in such contract or other arrangement on  November 5, 1983 . \n \n \n “(14)   Property leased to section 593 organizations .— For purposes of the amendment made by subsection (f) [enacting  section 46(e)(4) of this title ], paragraphs (1), (2), and (4) shall be applied by substituting— “(A)  ‘ November 5, 1983 ’ for ‘ May 23, 1983 ’ and ‘ November 1, 1983 ’, as the case may be, and \n \n “(B)  ‘organization described in section 593 of the Internal Revenue Code of 1986’ for ‘tax-exempt entity’. \n \n \n “(15)   Special rules relating to foreign persons or entities.— “(A)   In general .— In the case of tax-exempt use property which is used by a foreign person or entity, the amendments made by this section shall not apply to any property which— “(i)  is placed in service by the taxpayer before  January 1, 1984 , and \n \n “(ii)  is used by such foreign person or entity pursuant to a lease entered into before  January 1, 1984 . \n \n \n “(B)   Special rule for subleases .— If tax-exempt use property is being used by a foreign person or entity pursuant to a sublease under a lease described in subparagraph (A)(ii), subparagraph (A) shall apply to such property only if such property was used before  January 1, 1984 , by any foreign person or entity pursuant to such lease. \n \n “(C)   Binding contracts, etc .— The amendments made by this section shall not apply with respect to any property (other than aircraft described in subparagraph (D)) leased to a foreign person or entity— “(i)  if— “(I)  on or before  May 23, 1983 , the taxpayer (or a predecessor in interest under the contract) or the foreign person or entity entered into a written binding contract to acquire, construct, or rehabilitate such property and such property had not previously been used by the foreign person or entity, or \n \n “(II)  the taxpayer or the foreign person or entity acquired the property or completed the construction, reconstruction, or rehabilitation of the property after  December 31, 1982  and on or before  May 23, 1983 , and \n \n \n “(ii)  if such lease is pursuant to a written binding contract entered into before  January 1, 1984 , which requires the foreign person or entity to be the lessee of such property. \n \n \n “(D)   Certain aircraft .— The amendments made by this section shall not apply with respect to any wide-body, four-engine, commercial aircraft used by a foreign person or entity if— “(i)  on or before  November 1, 1983 , the foreign person or entity entered into a written binding contract to acquire such aircraft, and \n \n “(ii)  such aircraft is originally placed in service by such foreign person or entity (or its successor in interest under the contract) after  May 23, 1983 , and before  January 1, 1986 . \n \n \n “(E)   Use after 1983 .— Qualified container equipment placed in service before  January 1, 1984 , which is used before such date by a foreign person shall not, for purposes of section 47 of the Internal Revenue Code of 1986, be treated as ceasing to be section 38 property by reason of the use of such equipment before  January 1, 1985 , by a foreign person or entity. For purposes of this subparagraph, the term ‘qualified container equipment’ means any container, container chassis, or container trailer of a United States person with a present class life of not more than 6 years. \n \n \n “(16)   Organizations electing exemption from rules relating to previously tax-exempt organizations must elect taxation of exempt arbitrage profits.— “(A)   In general .— An organization may make the election under section 168(j)(4)(E)(ii) of the Internal Revenue Code of 1986 (relating to election not to have rules relating to previously tax-exempt organizations apply) only if such organization elects the tax treatment of exempt arbitrage profits described in subparagraph (B). \n \n “(B)   Taxation of exempt arbitrage profits.— “(i)   In general .— In the case of an organization which elects the application of this subparagraph, there is hereby imposed a tax on the exempt arbitrage profits of such organization. \n \n “(ii)   Rate of tax, etc .— The tax imposed by clause (i)— “(I)  shall be the amount of tax which would be imposed by section 11 of such Code if the exempt arbitrage profits were taxable income (and there were no other taxable income), and \n \n “(II)  shall be imposed for the first taxable year of the tax-exempt use period (as defined in section 168(j)(4)(E)(ii) of such Code). \n \n \n \n “(C)   Exempt arbitrage profits.— “(i)   In general .— For purposes of this paragraph, the term exempt arbitrage profits means the aggregate amount described in clauses (i) and (ii) of subparagraph (D) of section 103(c)(6) of such Code for all taxable years for which the organization was exempt from tax under section 501(a) of such Code with respect to obligations— “(I)  associated with property described in section 168(j)(4)(E)(i), and \n \n “(II)  issued before  January 1, 1985 . \n \n \n “(ii)   Application of section 103 (b)(6).— For purposes of this paragraph, section 103(b)(6) of such Code shall apply to obligations issued before  January 1, 1985 , but the amount described in clauses (i) and (ii) of subparagraph (D) thereof shall be determined without regard to clauses (i)(II) and (ii) of subparagraph (F) thereof. \n \n \n “(D)   Other laws applicable.— “(i)   In general .— Except as provided in clause (ii), all provisions of law, including penalties, applicable with respect to the tax imposed by section 11 of such Code shall apply with respect to the tax imposed by this paragraph. \n \n “(ii)   No credits against tax, etc .— The tax imposed by this paragraph shall not be treated as imposed by section 11 of such Code for purposes of— “(I)  part VI of subchapter A of chapter 1 of such Code (relating to minimum tax for tax preferences), and \n \n “(II)  determining the amount of any credit allowable under subpart A of part IV of such subchapter. \n \n \n \n “(E)   Election .— Any election under subparagraph (A)— “(i)  shall be made at such time and in such manner as the Secretary may prescribe, \n \n “(ii)  shall apply to any successor organization which is engaged in substantially similar activities, and \n \n “(iii)  once made, shall be irrevocable. \n \n \n \n “(17)   Certain transitional leased property .— The amendments made by this section shall not apply to property described in section 168(c)(2)(D) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ], and which is described in any of the following subparagraphs: “(A)  Property is described in this subparagraph if such property is leased to a university, and— “(i)  on  June 16, 1983 , the Board of Administrators of the university adopted a resolution approving the rehabilitation of the property in connection with an overall campus development program; and \n \n “(ii)  the property houses a basketball arena and university offices. \n \n \n “(B)  Property is described in this subparagraph if such property is leased to a charitable organization, and— “(i)  on  August 21, 1981 , the charitable organization acquired the property, with a view towards rehabilitating the property; and \n \n “(ii)  on  June 12, 1982 , an arson fire caused substantial damage to the property, delaying the planned rehabilitation. \n \n \n “(C)  Property is described in this subparagraph if such property is leased to a corporation that is described in section 501(c)(3) of the Internal Revenue Code of 1986 (relating to organizations exempt from tax) pursuant to a contract— “(i)  which was entered into on  August 3, 1983 ; and \n \n “(ii)  under which the corporation first occupied the property on  December 22, 1983 . \n \n \n “(D)  Property is described in this subparagraph if such property is leased to an educational institution for use as an Arts and Humanities Center and with respect to which— “(i)  in November 1982, an architect was engaged to design a planned renovation; \n \n “(ii)  in January 1983, the architectural plans were completed; \n \n “(iii)  in December 1983, a demolition contract was entered into; and \n \n “(iv)  in March 1984, a renovation contract was entered into. \n \n \n “(E)  Property is described in this subparagraph if such property is used by a college as a dormitory, and— “(i)  in October 1981, the college purchased the property with a view towards renovating the property; \n \n “(ii)  renovation plans were delayed because of a zoning dispute; and \n \n “(iii)  in May 1983, the court of highest jurisdiction in the State in which the college is located resolved the zoning dispute in favor of the college. \n \n \n “(F)  Property is described in this subparagraph if such property is a fraternity house related to a university with respect to which— “(i)  in August 1982, the university retained attorneys to advise the university regarding the rehabilitation of the property; \n \n “(ii)  on  January 21, 1983 , the governing body of the university established a committee to develop rehabilitation plans; \n \n “(iii)  on  January 10, 1984 , the governor of the state in which the university is located approved historic district designation for an area that includes the property; and \n \n “(iv)  on  February 2, 1984 , historic preservation certification applications for the property were filed with a historic landmarks commission. \n \n \n “(G)  Property is described in this subparagraph if such property is leased to a retirement community with respect to which— “(i)  on  January 5, 1977 , a certificate of incorporation was filed with the appropriate authority of the state in which the retirement community is located; and \n \n “(ii)  on  November 22, 1983 , the Board of Trustees adopted a resolution evidencing the intention to begin immediate construction of the property. \n \n \n “(H)  Property is described in this subparagraph if such property is used by a university, and— “(i)  in July 1982, the Board of Trustees of the university adopted a master plan for the financing of the property; and \n \n “(ii)  as of  August 1, 1983 , at least $60,000 in private expenditures had been expended in connection with the property. \n \n\n In the case of Clemson University, the preceding sentence applies only to the Continuing Education Center and the component housing project. \n \n “(I)  Property is described in this subparagraph if such property is used by a university as a fine arts center and the Board of Trustees of such university authorized the sale-leaseback agreement with respect to such property on  March 7, 1984 . \n \n “(J)  Property is described in this subparagraph if such property is used by a tax-exempt entity as an international trade center, and “(i)  prior to 1982, an environmental impact study for such property was completed; \n \n “(ii)  on  June 24, 1981 , a developer made a written commitment to provide one-third of the financing for the development of such property; and \n \n “(iii)  on  October 20, 1983 , such developer was approved by the Board of Directors of the tax-exempt entity. \n \n \n “(K)  Property is described in this subparagraph if such property is used by university of osteopathic medicine and health sciences, and on or before  December 31, 1983 , the Board of Trustees of such university approved the construction of such property. \n \n “(L)  Property is described in this subparagraph if such property is used by a tax-exempt entity, and— “(i)  such use is pursuant to a lease with a taxpayer which placed substantial improvements in service; \n \n “(ii)  on  May 23, 1983 , there existed architectural plans and specifications (within the meaning of sec. 48(g)(1)(C)(ii) of the Internal Revenue Code of 1986); and \n \n “(iii)  prior to  May 23, 1983 , at least 10 percent of the total cost of such improvements was actually paid or incurred. \n \n\n Property is described in this subparagraph if such property was leased to a tax-exempt entity pursuant to a lease recorded in the Register of Deed of Essex County, New Jersey, on  May 7, 1984 , and a deed of such property was recorded in the Register of Deed of Essex County, New Jersey, on  May 7, 1984 . \n \n “(M)  Property is described in this subparagraph if such property is used as a convention center and on  June 2, 1983 , the City Council of the city in which the center is located provided for over $6 million for the project. \n \n \n “(18)   Special rule for amendment made by subsection  (c)(1).— “(A)   In general .— The amendment made by subsection (c)(1) [enacting  section 48(g)(2)(B)(vi) of this title ] shall not apply to property— “(i)  leased by the taxpayer on or before  November 1, 1983 , or \n \n “(ii)  leased by the taxpayer after  November 1, 1983 , if on or before such date the taxpayer entered into a written binding contract requiring the taxpayer to lease such property. \n \n \n “(B)   Limitation .— Subparagraph (A) shall apply to the amendment made by subsection (c)(1) only to the extent such amendment relates to property described in subclause (II), (III), or (IV) of section 168(j)(3)(B)(ii) of the Internal Revenue Code of 1986 (as added by this section). \n \n \n “(19)   Special rule for certain energy management contracts.— “(A)   In general .— The amendments made by subsection (e) [amending  section 7701 of this title ] shall not apply to property used pursuant to an energy management contract that was entered into prior to  May 1, 1984 . \n \n “(B)   Definition of energy management contract .— For purposes of subparagraph (A), the term ‘energy management contract’ means a contract for the providing of energy conservation or energy management services. \n \n \n “(20)   Definitions .— For purposes of this subsection— “(A)   Tax-exempt entity .— The term ‘tax-exempt entity’ has the same meaning as when used in section 168(j) of the Internal Revenue Code of 1986 (as added by this section), except that such term shall include any related entity (within the meaning of such section). \n \n “(B)   Treatment of improvements.— “(i)   In general .— For purposes of this subsection, an improvement to property shall not be treated as a separate property unless such improvement is a substantial improvement with respect to such property. \n \n “(ii)   Substantial improvement .— For purposes of clause (i), the term ‘substantial improvement’ has the meaning given such term by section 168(f)(1)(C) of such Code determined— “(I)  by substituting ‘property’ for ‘building’ each place it appears therein, \n \n “(II)  by substituting ‘20 percent’ for ‘25 percent’ in clause (ii) thereof, and \n \n “(III)  without regard to clause (iii) thereof. \n \n \n \n “(C)   Foreign person or entity .— The term ‘foreign person or entity’ has the meaning given to such term by subparagraph (C) of section 168(j)(4) of such Code (as added by this section). For purposes of this subparagraph and subparagraph (A), such subparagraph (C) shall be applied without regard to the last sentence thereof. \n \n “(D)   Leases and subleases .— The determination of whether there is a lease or sublease to a tax-exempt entity shall take into account sections 168(j)(6)(A), 168(j)(8)(A), and 7701(e) of the Internal Revenue Code of 1986 (as added by this section).”\n[ Pub. L. 99–514, title XVIII, §\u202f1802(a)(10)(B) ,  Oct. 22, 1986 ,  100 Stat. 2790 , provided in part that amendment by  section 1802(a)(10)(B) of Pub. L. 99–514 , amending  section 31(g)(15)(D)(ii) of Pub. L. 98–369 , set out above, is effective with respect to property placed in service by the taxpayer after  July 18, 1984 .]\n[ Pub. L. 99–514, title XVIII, §\u202f1802(a)(10)(D)(ii) ,  Oct. 22, 1986 ,  100 Stat. 2790 , provided that:  \n “The amendment made by clause (i) [amending  section 31(g)(20)(B)(ii) of Pub. L. 98–369 , set out above] shall not apply to any property if— \n “(I)  on or before  March 28, 1985 , the taxpayer (or a predecessor in interest under the contract) or the tax-exempt entity entered into a written binding contract to acquire, construct, or rehabilitate the property, or \n \n “(II)  the taxpayer or the tax-exempt entity began the construction, reconstruction, or rehabilitation of the property on or before  March 28, 1985 .” \n \n \n]\nPub. L. 98–369, div. A, title I, §\u202f32(c) ,  July 18, 1984 ,  98 Stat. 531 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1802(b)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2791, provided that:  “The amendment made by subsection (a) [amending this section] shall apply to agreements described in section 168(f)(14) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) entered into more than 90 days after the date of the enactment of this Act [ July 18, 1984 ].”\nPub. L. 98–369, div. A, title I, §\u202f111(g) ,  July 18, 1984 ,  98 Stat. 634 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 48, 51, 312, and 1245 of this title] shall apply with respect to property placed in service by the taxpayer after  March 15, 1984 . \n \n “(2)   Exception .— The amendments made by this section shall not apply to property placed in service by the taxpayer before  January 1, 1987 , if— “(A)  the taxpayer or a qualified person entered into a binding contract to purchase or construct such property before  March 16, 1984 , or \n \n “(B)  construction of such property was commenced by or for the taxpayer or a qualified person before  March 16, 1984 . \n \n\n For purposes of this paragraph the term ‘qualified person’ means any person who transfers his rights in such a contract or such property to the taxpayer, but only if such property is not placed in service by such person before such rights are transferred to the taxpayer. \n \n “(3)   Special rules for application of paragraph (2).— “(A)   Certain inventory .— In the case of any property which— “(i)  is held by a person as property described in section 1221(1) [ 26 U.S.C. 1221(1) ], and \n \n “(ii)  is disposed of by such person before  January 1, 1985 , \n \n\n such person shall not, for purposes of paragraph (2), be treated as having placed such property in service before such property is disposed of merely because such person rented such property or held such property for rental. No deduction for depreciation or amortization shall be allowed to such person with respect to such property, \n \n “(B)   Certain property financed by bonds .— In the case of any property with respect to which— “(i)  bonds were issued to finance such property before 1984, and \n \n “(ii)  an architectural contract was entered into before  March 16, 1984 , \n \n\n paragraph (2) shall be applied by substituting ‘May 2’ for ‘March 16’. \n \n \n “(4)   Special rule for components .— For purposes of applying section 168(f)(1)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this section) to components placed in service after  December 31, 1986 , property to which paragraph (2) applies shall be treated as placed in service by the taxpayer before  March 16, 1984 . \n \n “(5)   Special rule for mid-month convention .— In the case of the amendment made by subsection (d) [amending subsec. (b)(2)(A), (B) of this section]— “(A)  paragraph (1) shall be applied by substituting ‘ June 22, 1984 ’ for ‘ March 15, 1984 ’, and \n \n “(B)  paragraph (2) shall be applied by substituting ‘ June 23, 1984 ’ for ‘ March 15, 1984 ’ each place it appears.”\nAmendment by  section 113(a)(2) of Pub. L. 98–369  applicable to property placed in service after  Mar. 15, 1984 , in taxable years ending after such date, see  section 113(c)(1) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f113(c)(2) ,  July 18, 1984 ,  98 Stat. 637 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  The amendments made by paragraphs (1) of subsection (b) [amending this section] shall apply to any motion picture film or video tape placed in service before, on, or after the date of the enactment of this Act [ July 18, 1984 ], except that such amendment shall not apply to— “(i)  any qualified film placed in service by the taxpayer before  March 15, 1984 , if the taxpayer treated such film as recovery property for purposes of section 168 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] on a return of tax under chapter 1 of such Code filed before  March 16, 1984 , or \n \n “(ii)  any qualified film placed in service by the taxpayer before  January 1, 1985 , if— “(I)  20 percent or more of the production costs of such film were incurred before  March 16, 1984 , and \n \n “(II)  the taxpayer treats such film as recovery property for purposes of section 168 of such Code. \n \n \n\n No credit shall be allowable under section 38 of such Code with respect to any qualified film described in clause (ii), except to the extent provided in section 48(k) of such Code. \n \n “(B)  The amendment made by paragraph (2) and (3) of subsection (b) [amending this section and sections 46 and 48 of this title] shall apply as if included in the amendments made by section 201(a), 211(a)(1), and 211(f)(1) of the Economic Recovery Tax Act of 1981 [sections 201(a), 211(a)(1), and 211(f)(1) of  Pub. L. 97–34 , enacting this section and amending  section 46 of this title ]. \n \n “(C)  The amendment made by paragraph (4) of subsection (b) [amending  section 48 of this title ] shall take effect as if included in the amendments made by section 205(a)(1) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 205(a)(1) of Pub. L. 97–248 , amending  section 48 of this title ]. \n \n “(D)  For purposes of this paragraph, the terms ‘qualified film’ and ‘production costs’ have the same respective meanings as when used in section 48(k) of the Internal Revenue Code of 1986.”\nAmendment by  section 474(r)(7) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 612(e) of Pub. L. 98–369  applicable to interest paid or accrued after  Dec. 31, 1984 , on indebtedness incurred after  Dec. 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nAmendment by  section 628(b) of Pub. L. 98–369  applicable to property placed in service after  Dec. 31, 1983 , with certain conditions and exceptions, see  section 631(b) of Pub. L. 98–369 , set out as a note under  section 103 of this title .\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–448, title I, §\u202f102(a)(10)(B) ,  Jan. 12, 1983 ,  96 Stat. 2369 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply with respect to property to which the provisions of section 168(f)(8) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the amendments made by the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ]) apply.”\nAmendment by  section 541 of Pub. L. 97–424  applicable to taxable years beginning after  Dec. 31, 1979 , with a special rule for periods beginning before  Mar. 1, 1980 , see  section 541(c) of Pub. L. 97–424 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 97–248, title II, §\u202f208(d) ,  Sept. 3, 1982 ,  96 Stat. 439 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(4) ,  Jan. 12, 1983 ,  96 Stat. 2400 ;  Pub. L. 98–369, div. A, title X, §\u202f1067(a) ,  July 18, 1984 ,  98 Stat. 1048 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as otherwise provided in this subsection, the amendments made by subsections (a) and (b) of this section [amending this section and  section 47 of this title ] shall apply to agreements entered into after  July 1, 1982 , or to property placed in service after  July 1, 1982 . \n \n “(2)   Transitional rule for certain safe harbor lease property.— “(A)  In general.— The amendments made by subsections (a) and (b) [amending this section and  section 47 of this title ] shall not apply to transitional safe harbor lease property. \n \n “(B)   Special rule for certain provisions.— Subparagraph (A) shall not apply with respect to the provisions of paragraph (6) of section 168(i) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)(1)), to the provisions of section 168(f)(8)(J) of such Code (as added by subsection (b)(4)), or to the amendment made by subsection (b)(1). \n \n \n “(3)   Transitional safe harbor lease property.— For purposes of this subsection, the term ‘transitional safe harbor lease property’ means property described in any of the following subparagraphs: “(A)  In general.— Property is described in this subparagraph if such property is placed in service before  January 1, 1983 , if— “(i)  with respect to such property a binding contract to acquire or to construct such property was entered into by the lessee after  December 31, 1980 , and before  July 2, 1982 , or \n \n “(ii)  such property was acquired by the lessee, or construction of such property was commenced by or for the lessee, after  December 31, 1980 , and before  July 2, 1982 . \n \n \n “(B)   Certain qualified lessees.— Property is described in this subparagraph if such property is placed in service before  July 1, 1982 , and with respect to which— “(i)  an agreement to which section 168(f)(8)(A) of the Internal Revenue Code of 1986 applies was entered into before  August 15, 1982 , and \n \n “(ii)  the lessee under such agreement is a qualified lessee (within the meaning of paragraph (6)). \n \n \n “(C)  Automotive manufacturing property.— “(i)   In general.— Property is described in this subparagraph if— “(I)  such property is used principally by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacture of automobiles or light-duty trucks, \n \n “(II)  such property is automotive manufacturing property, and \n \n “(III)  such property would be described in subparagraph (A) if ‘October 1’ were substituted for ‘January 1’. \n \n \n “(ii)   Light-duty truck.— For purposes of this subparagraph, the term ‘light-duty truck’ means any truck with a gross vehicle weight of 13,000 pounds or less. Such term shall not include any truck tractor. \n \n “(iii)   Automotive manufacturing property.— For purposes of this subparagraph, the term ‘automotive manufacturing property’ means machinery, equipment, and special tools of the type included in the former asset depreciation range guideline classes 37.11 and 37.12. \n \n “(iv)   Special tools used by certain vendors.— For purposes of this subparagraph, any special tools owned by a taxpayer described in subclause (I) of clause (i) which are used by a vendor solely for the production of component parts for sale to the taxpayer shall be treated as automotive manufacturing property used directly by such taxpayer. \n \n \n “(D)  Certain aircraft.— Property is described in this subparagraph if such property— “(i)  is a commercial passenger aircraft (other than a helicopter), and \n \n “(ii)  would be described in subparagraph (A) if ‘ January 1, 1984 ’ were substituted for ‘ January 1, 1983 ’. \n \n\n For purposes of determining whether property described in this subparagraph is described in subparagraph (A), subparagraph (A)(ii) shall be applied by substituting ‘ June 25, 1981 ’ for ‘ December 31, 1980 ’ and by substituting ‘ February 20, 1982 ’ for ‘ July 2, 1982 ’ and construction of the aircraft shall be treated as having been begun during the period referred to in subparagraph (A)(ii) if during such period construction or reconstruction of a subassembly was commenced, or the stub wing join occurred. \n \n “(E)  Turbines and boilers.— Property is described in this subparagraph if such property— “(i)  is a turbine or boiler of a cooperative organization engaged in the furnishing of electric energy to persons in rural areas, and \n \n “(ii)  would be property described in subparagraph (A) if ‘July 1’ were substituted for ‘January 1’. \n \n\n For purposes of determining whether property described in this subparagraph is described in subparagraph (A), such property shall be treated as having been acquired during the period referred to in subparagraph (A)(ii) if at least 20 percent of the cost of such property is paid during such period. \n \n “(F)  Property used in the production of steel.— Property is described in this subparagraph if such property— “(i)  is used by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacture or production of steel, and \n \n “(ii)  would be described in subparagraph (A) if ‘ January 1, 1984 ’ were substituted for ‘ January 1, 1983 ’. \n \n \n “(G)   Coal gasification facilities.— “(i)   In general .— Property is described in this subparagraph if such property— “(I)  is used directly in connection with the manufacture or production of low sulfur gaseous fuel from coal, and \n \n “(II)  would be described in subparagraph (A) if ‘ July 1, 1984 ’ were substituted for ‘ January 1, 1983 ’. \n \n \n “(ii)   Special rule .— For purposes of determining whether property described in this subparagraph is described in subparagraph (A), such property shall be treated as having been acquired during the period referred to in subparagraph (A)(ii) if at least 20 percent of the cost of such property is paid during such period. \n \n “(iii)   Limitation on amount .— Clause (i) shall only apply to the lease of an undivided interest in the property in an amount which does not exceed the lesser of— “(I)  50 percent of the cost basis of such property, or \n \n “(II)  $67,500,000. \n \n \n “(iv)   Placed in service .— In the case of property to which this subparagraph applies— “(I)  such property shall be treated as placed in service when the taxpayer receives an operating permit with respect to such property from a State environmental protection agency, and \n \n “(II)  the term of the lease with respect to such property shall be treated as being 5 years. \n \n \n \n \n “(4)   Special rule for antiavoidance provisions.— The provisions of paragraph (6) of section 168(i) of such Code (as added by subsection (a)(1)), and the amendment made by subsection (b)(1) [amending this section] shall apply to leases entered into after  February 19, 1982 , in taxable years ending after such date. \n \n “(5)   Special rule for mass commuting vehicles.— The amendments made by this section (other than section 168(i)(1) and (7) of such Code, as added by subsection (a)(1) or section 168(f)(8)(J) of such Code, as added by subsection (b)(4)) and section 209 [amending this section and  section 48 of this title ] shall not apply to qualified leased property described in section 168(f)(8)(D)(V) of such Code (as in effect after the amendments made by this section) which— “(A)  is placed in service before  January 1, 1988 , or \n \n “(B)  is placed in service after such date— “(i)  pursuant to a binding contract or commitment entered into before  April 1, 1983 , and \n \n “(ii)  solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee. \n \n \n \n “(6)   Qualified lessee defined.— “(A)  In general.— The term ‘qualified lessee’ means a taxpayer which is a lessee of an agreement to which section 168(f)(8)(A) of such Code applies and which— “(i)  had net operating losses in each of the three most recent taxable years ending before  July 1, 1982 , and had an aggregate net operating loss for the five most recent taxable years ending before  July 1, 1982 , and \n \n “(ii)  which uses the property subject to the agreement to manufacture and produce within the United States a class of products in an industry with respect to which— “(I)  the taxpayer produced less than 5 percent of the total number of units (or value) of such products during the period covering the three most recent taxable years of the taxpayer ending before  July 1, 1982 , and \n \n “(II)  four or fewer United States persons (including as one person an affiliated group as defined in section 1504(a)) other than the taxpayer manufactured 85 percent or more of the total number of all units (or value) within such class of products manufactured and produced in the United States during such period. \n \n \n \n “(B)  Class of products.— For purposes of subparagraph (A)— “(i)  the term ‘class of products’ means any of the categories designated and numbered as a ‘class of products’ in the 1977 Census of Manufacturers compiled and published by the Secretary of Commerce under title 13 of the United States Code, and \n \n “(ii)  information— “(I)  compiled or published by the Secretary of Commerce, as part of or in connection with the Statistical Abstract of the United States or the Census of Manufacturers, regarding the number of units (or value) of a class of products manufactured and produced in the United States during any period, or \n \n “(II)  if information under subclause (I) is not available, so compiled or published with respect to the number of such units shipped or sold by such manufacturers during any period, \n \n\n \u2001\u2001shall constitute prima facie evidence of the total number of all units of such class of products manufactured and produced in the United States in such period. \n \n \n \n “(6)   Underpayments of tax for 1982.— No addition to the tax shall be made under section 6655 of the Internal Revenue Code of 1954 (relating to failure by corporation to pay estimated income tax) for any period before  October 15, 1982 , with respect to any underpayment of estimated tax by a taxpayer with respect to any tax imposed by chapter 1 of such Code to the extent that such underpayment was created or increased by any provision of this section. \n \n “(7)   Coordination with at risk rules.— Subparagraph (J) of section 168(f)(8) of the Internal Revenue Code of 1986 (as added by subsection (b)(4)) shall take effect as provided in such subparagraph (J).”\n[ Pub. L. 98–369, div. A, title X, §\u202f1067(c) ,  July 18, 1984 ,  98 Stat. 1049 , provided that:  “The amendment made by subsection (a) [enacting  section 208(d)(3)(G) of Pub. L. 97–248 , set out above] shall take effect as if included in the provision of section 208(d)(3) of the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ].” \n]\nPub. L. 97–248, title II, §\u202f209(d) ,  Sept. 3, 1982 ,  96 Stat. 447 , as amended by  Pub. L. 98–369, div. A, title I, §\u202f12(a)(1) , (2),  July 18, 1984 ,  98 Stat. 503 , provided that: \n “(1)   Subsection  (a).— “(A)   In general.— Except as provided in subparagraph (B) and paragraph (2), the amendments made by this section [amending this section and  section 48 of this title ] shall apply to agreements entered into after  December 31, 1987 . \n \n “(B)   Special rule for farm property aggregating $150,000 or less.— “(i)   In general.— The amendments made by subsection (a) [amending this section] shall also apply to any agreement entered into after  July 1, 1982 , and before  January 1, 1988 , if the property subject to such agreement is section 38 property which is used for farming purposes (within the meaning of section 2032A(e)(5)). \n \n “(ii)  $150,000  limitation.— The provisions of clause (i) shall not apply to any agreement if the sum of— “(I)  the cost basis of the property subject to the agreement, plus \n \n “(II)  the cost basis of any property subject to an agreement to which this subparagraph previously applied, which was entered into during the same calendar year, and with respect to which the lessee was the lessee of the agreement described in subclause (I) (or any related person within the meaning of section 168(e)(4)(D)), \n \n\n \u2001\u2001exceeds $150,000. For purposes of subclause (II), in the case of an individual, there shall not be taken into account any agreement of any individual who is a related person involving property which is used in a trade or business of farming of such related person which is separate from the trade or business of farming of the lessee described in subclause (II). \n \n \n \n “(2)   Special rule for definition of new section 38 property.— The amendment made by subsection (c) [amending  section 48 of this title ] shall apply to property placed in service after  December 31, 1983 .”\nPub. L. 97–248, title II, §\u202f216(b) ,  Sept. 3, 1982 ,  96 Stat. 471 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply with respect to property placed in service after  December 31, 1982 , to the extent such property is financed by the proceeds of an obligation (including a refunding obligation) issued after  June 30, 1982 . \n \n “(2)   Exceptions.— “(A)  Construction or binding agreement.— The amendments made by this section [amending this section] shall not apply with respect to facilities the original use of which commences with the taxpayer and— “(i)  the construction, reconstruction, or rehabilitation of which began before  July 1, 1982 , or \n \n “(ii)  with respect to which a binding agreement to incur significant expenditures was entered into before  July 1, 1982 . \n \n \n “(B)  Refunding.— “(i)   In general.— Except as provided in clause (ii), in the case of property placed in service after  December 31, 1982  which is financed by the proceeds of an obligation which is issued solely to refund another obligation which was issued before  July 1, 1982 , the amendments made by this section [amending this section] shall apply only with respect to the basis in such property which has not been recovered before the date such refunding obligation is issued. \n \n “(ii)   Significant expenditures.— In the case of facilities the original use of which commences with the taxpayer and with respect to which significant expenditures are made before  January 1, 1983 , the amendments made by this section shall not apply with respect to such facilities to the extent such facilities are financed by the proceeds of an obligation issued solely to refund another obligation which was issued before  July 1, 1982 . \n \n \n\n In the case of an inducement resolution adopted by an issuing authority before  July 1, 1982 , for purposes of applying subparagraphs (A)(i) and (B)(ii) with respect to obligations described in such resolution, the term ‘facilities’ means the facilities described in such resolution. \n \n “(3)   Certain projects for residential real property.— For purposes of clause (i) of section 168(f)(12)(C) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section), any obligation issued to finance a project described in the table contained in paragraph (1) of section 1104(n) of the Mortgage Subsidy Bond Tax Act of 1980 [ section 1104(n) of Pub. L. 96–499 , set out as a note under  section 103A of this title ] shall be treated as an obligation described in section 103(b)(4)(A) of the Internal Revenue Code of 1986.”\nAmendment by section 224(c)(1), (2) of  Pub. L. 97–248  to apply to any target corporation, within the meaning of  section 338 of this title , with respect to which the acquisition date, within the meaning of such section, occurs after  Aug. 31, 1982 , and also to apply to certain acquisitions before  September 1, 1982 , but not to apply in the case of certain acquisitions of financial institutions, see  section 224(d) of Pub. L. 97–248 , set out as an Effective Date note under  section 338 of this title .\nPub. L. 97–34, title II, §\u202f209(a) –(c),  Aug. 13, 1981 ,  95 Stat. 226 , as amended by  Pub. L. 97–448, title I, §\u202f102(d)(1) , (g),  Jan. 12, 1983 ,  96 Stat. 2370 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule.— Except as otherwise provided in this section, the amendments made by this subtitle [subtitle A (§§\u202f201–209) of title II of  Pub. L. 97–34 , enacting this section, amending sections 44E, 46, 50A, 53, 57, 167, 172, 179, 263, 312, 381, 453, 812, 825, 964, 1033, 1245, and 1250 of this title, and enacting provisions set out as notes under this section and sections 46 and 167 of this title] shall apply to property placed in service after  December 31, 1980 , in taxable years ending after such date. \n \n “(b)   Special Rule for RRB Property.— The amendment made by subsection (c) of section 203 [amending  section 167 of this title  and enacting provisions set out as notes under  section 167 of this title ] shall take effect on  January 1, 1981 , and shall apply with respect to taxable years ending after such date. \n \n “(c)   Special Rule for Carryovers.— “(1) (A)  Except as provided in subparagraph (B), the amendments made by subsections (a) and (b) of section 207 [amending sections 172, 812, and 825 of this title] shall apply to net operating losses in taxable years ending after  December 31, 1975 . \n \n “(B)  The amendments made by subparagraph (B)(i) of section 207(a)(2) [amending  section 172 of this title ] shall take effect as if they had been included in the amendments made by  section 1(a) of Public Law 96–595  [amending  section 172 of this title ]; except that the amendments made by such subparagraph shall apply only to net operating losses in taxable years ending after  December 31, 1972 . \n \n “(C)  If any net operating loss for any taxable year ending on or before  December 31, 1975 , could be a net operating loss carryover to a taxable year ending in 1981 by reason of subclause (II) of section 172(b)(1)(E)(ii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this Act [ Aug. 13, 1981 ] and as modified by  section 1(b) of Public Law 96–595  [set out as an Effective Date of 1980 Amendment note under  section 172 of this title ]), such net operating loss shall be a net operating loss carryover under section 172 of such Code to each of the 15 taxable years following the taxable year of such loss. \n \n \n “(2) (A)  The amendments made by subsection (c)(1) of section 207 [amending sections 46 and 50A of this title] shall apply to unused credit years ending after  December 31, 1973 . \n \n “(B)  The amendment made by subsection (c)(2) of section 207 [amending  section 53 of this title ] shall apply to unused credit years beginning after  December 31, 1976 . \n \n “(C)  The amendments made by subsection (c)(3) of section 207 [amending  section 44E of this title ] shall apply to unused credit years ending after  September 30, 1980 . \n \n \n “(3)   Carryover must have been alive in 1981.— The amendments made by subsections (a), (b), and (c) of section 207 [amending sections 44E, 46, 50A, 53, 172, 812, and 825 of this title] shall not apply to any amount which, under the law in effect on the day before the date of the enactment of this Act [ Aug. 13, 1981 ], could not be carried to a taxable year ending in 1981.”\nFor provisions that nothing in amendment by section 401(b)(13)(A), (d)(1)(D)(iv) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 115–97, title I, §\u202f13001(d) ,  Dec. 22, 2017 ,  131 Stat. 2099 , provided that: \n “(1)   In general .— A normalization method of accounting shall not be treated as being used with respect to any public utility property for purposes of section 167 or 168 of the Internal Revenue Code of 1986 if the taxpayer, in computing its cost of service for ratemaking purposes and reflecting operating results in its regulated books of account, reduces the excess tax reserve more rapidly or to a greater extent than such reserve would be reduced under the average rate assumption method. \n \n “(2)   Alternative method for certain taxpayers .— If, as of the first day of the taxable year that includes the date of enactment of this Act [ Dec. 22, 2017 ]— “(A)  the taxpayer was required by a regulatory agency to compute depreciation for public utility property on the basis of an average life or composite rate method, and \n \n “(B)  the taxpayer’s books and underlying records did not contain the vintage account data necessary to apply the average rate assumption method, \n \n\n the taxpayer will be treated as using a normalization method of accounting if, with respect to such jurisdiction, the taxpayer uses the alternative method for public utility property that is subject to the regulatory authority of that jurisdiction. \n \n “(3)   Definitions .— For purposes of this subsection— “(A)   Excess tax reserve .— The term ‘excess tax reserve’ means the excess of— “(i)  the reserve for deferred taxes (as described in section 168(i)(9)(A)(ii) of the Internal Revenue Code of 1986) as of the day before the corporate rate reductions provided in the amendments made by this section [amending this section and sections 11, 12, 280C, 453A, 527, 535, 594, 691, 801, 831, 832, 834, 852, 857, 860E, 882, 904, 1374, 1381, 1445, 1446, 1561, 6425, 6655, 7518, and 7874 of this title and repealing sections 1201 and 1551 of this title] take effect, over \n \n “(ii)  the amount which would be the balance in such reserve if the amount of such reserve were determined by assuming that the corporate rate reductions provided in this Act [see Tables for classification] were in effect for all prior periods. \n \n \n “(B)   Average rate assumption method .— The average rate assumption method is the method under which the excess in the reserve for deferred taxes is reduced over the remaining lives of the property as used in its regulated books of account which gave rise to the reserve for deferred taxes. Under such method, during the time period in which the timing differences for the property reverse, the amount of the adjustment to the reserve for the deferred taxes is calculated by multiplying— “(i)  the ratio of the aggregate deferred taxes for the property to the aggregate timing differences for the property as of the beginning of the period in question, by \n \n “(ii)  the amount of the timing differences which reverse during such period. \n \n \n “(C)   Alternative method .— The ‘alternative method’ is the method in which the taxpayer— “(i)  computes the excess tax reserve on all public utility property included in the plant account on the basis of the weighted average life or composite rate used to compute depreciation for regulatory purposes, and \n \n “(ii)  reduces the excess tax reserve ratably over the remaining regulatory life of the property. \n \n \n \n “(4)   Tax increased for normalization violation .— If, for any taxable year ending after the date of the enactment of this Act, the taxpayer does not use a normalization method of accounting for the corporate rate reductions provided in the amendments made by this section— “(A)  the taxpayer’s tax for the taxable year shall be increased by the amount by which it reduces its excess tax reserve more rapidly than permitted under a normalization method of accounting, and \n \n “(B)  such taxpayer shall not be treated as using a normalization method of accounting for purposes of subsections (f)(2) and (i)(9)(C) of section 168 of the Internal Revenue Code of 1986.”\nPub. L. 105–277, div. J, title II, §\u202f2022 ,  Oct. 21, 1998 ,  112 Stat. 2681–903 , provided that:  \n “The Secretary of the Treasury (or the Secretary’s delegate)— \n “(1)  shall conduct a comprehensive study of the recovery periods and depreciation methods under section 168 of the Internal Revenue Code of 1986, and \n \n “(2)  not later than  March 31, 2000 , shall submit the results of such study, together with recommendations for determining such periods and methods in a more rational manner, to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1801(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2785 , as amended by  Pub. L. 100–647, title I, §\u202f1018(a) ,  Nov. 10, 1988 ,  102 Stat. 3577 , provided that: \n “(A)   In general .— If— “(i)  any partnership or grantor trust is the lessor under a specified agreement, \n \n “(ii)  such partnership or grantor trust met the requirements of section 168(f)(8)(C)(i) of the Internal Revenue Code of 1954 (relating to special rules for finance leases) when the agreement was entered into, and \n \n “(iii)  a person became a partner in such partnership (or a beneficiary in such trust) after its formation but before  September 26, 1985 , \n \n\n then, for purposes of applying the revenue laws of the United States in respect to such agreement, the portion of the property allocable to partners (or beneficiaries) not described in clause (iii) shall be treated as if it were subject to a separate agreement and the portion of such property allocable to the partner or beneficiary described in clause (iii) shall be treated as if it were subject to a separate agreement. \n \n “(B)   Specified agreement .— For purposes of subparagraph (A), the term ‘specified agreement’ means an agreement to which subparagraph (B) of section 209(d)[(1)] of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 209(d)(1) of Pub. L. 97–248 , set out as a note above] applies which is— “(i)  an agreement dated as of  December 20, 1982 , as amended and restated as of  February 1, 1983 , involving approximately $8,734,000 of property at  December 31, 1983 , \n \n “(ii)  an agreement dated as of  December 15, 1983 , as amended and restated as of  January 3, 1984 , involving approximately $13,199,000 of property at  December 31, 1984 , or \n \n “(iii)  an agreement dated as of  October 25, 1984 , as amended and restated as of  December 1, 1984 , involving approximately $966,000 of property at  December 31, 1984 .”\nPub. L. 99–514, title XVIII, §\u202f1809(a)(4)(C) ,  Oct. 22, 1986 ,  100 Stat. 2820 , provided that:  “Any property described in paragraph (3) of section 631(d) of the Tax Reform Act of 1984 [ section 631(d) of Pub. L. 99–369 , set out as a note under  section 103 of this title ] shall be treated as property described in clause (ii) of section 168(f)(12)(C) of the Internal Revenue Code of 1954 [now 1986] as amended by subparagraph (B).”\nPub. L. 99–514, title XVIII, §\u202f1809(a)(5) ,  Oct. 22, 1986 ,  100 Stat. 2820 , provided that:  \n “In the case of any property placed in service before  May 9, 1985  (or treated as placed in service before such date by  section 105(b)(3) of Public Law 99–121  [set out as a note above])— \n “(A)  any reference in any amendment made by this subsection [amending this section and sections 57 and 312 of this title] to 19-year real property shall be treated as a reference to 18-year real property, and \n \n “(B)  section 168(f)(12)(B)(ii) of the Internal Revenue Code of 1954 [now 1986] (as amended by paragraph (4)(A)) shall be applied by substituting ‘18 years’ for ‘19 years’.”\nPub. L. 98–369, div. A, title I, §\u202f12(b) ,  July 18, 1984 ,  98 Stat. 504 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Paragraph (8) of section 168(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to special rules for leasing), as in effect after the amendments made by section 208 of the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ] but before the amendments made by section 209 of such Act, shall not apply to agreements entered into after  December 31, 1983 . The preceding sentence shall not apply to property described in paragraph (3)(G) or (5) of section 208(d) of such Act [set out as an Effective Date of 1982 Amendments note above].”\nPub. L. 98–369, div. A, title I, §\u202f12(c) ,  July 18, 1984 ,  98 Stat. 504 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1801(a)(1),  Oct. 22, 1986 ,  100 Stat. 2095 , 2785;  Pub. L. 100–647, title I, §\u202f1002(d)(7)(B) ,  Nov. 10, 1988 ,  102 Stat. 3360 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section and  section 208(d) of Pub. L. 97–248 , set out as an Effective Date of 1982 Amendments note above] shall not apply with respect to any property if— “(A)  a binding contract to acquire or to construct such property was entered into by or for the lessee before  March 7, 1984 , or \n \n “(B)  such property was acquired by the lessee, or the construction of such property was begun, by or for the lessee, before  March 7, 1984 . \n \n\n The preceding sentence shall not apply to any property with respect to which an election is made under this sentence at such time after the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ] as the Secretary of the Treasury or his delegate may prescribe. \n \n “(2)   Special rule for certain automotive property.— “(A)   In general .— The amendments made by subsection (a) shall not apply to property— “(i)  which is automotive manufacturing property, and \n \n “(ii)  with respect to which the lessee is a qualified lessee (within the meaning of section 208(d)(6) of the Tax Equity and Fiscal Responsibility Act of 1982) [ Pub. L. 97–248 , set out as an Effective Date of 1982 Amendments note above]. \n \n \n “(B)  $150,000,000  limitation .— The provisions of subparagraph (A) shall not apply to any agreement if the sum of— “(i)  the cost basis of the property subject to the agreement, plus \n \n “(ii)  the cost basis of any property subject to an agreement to which subparagraph (A) previously applied and with respect to which the lessee was the lessee under the agreement described in clause (i) (or any related person within the meaning of section 168(e)(4)(D) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), \n \n\n exceeds $150,000,000. \n \n “(C)   Automotive manufacturing property .— For purposes of this paragraph, the term ‘automotive manufacturing property’ means— “(i)  property used principally by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacturing of automobiles or trucks (other than truck tractors) with a gross vehicle weight of 13,000 pounds or less, \n \n “(ii)  machinery, equipment, and special tools of the type included in former depreciation range guideline classes 37.11 and 37.12, and \n \n “(iii)  any special tools owned by the taxpayer which are used by a vendor solely for the production of component parts for sale to the taxpayer. \n \n \n \n “(3)   Special rule for certain cogeneration facilities .— The amendments made by subsection (a) shall not apply with respect to any property which is part of a coal-fired cogeneration facility— “(A)  for which an application for certification was filed with the Federal Energy Regulatory Commission on  December 30, 1983 , \n \n “(B)  for which an application for a construction permit was filed with a State environmental protection agency on  February 20, 1984 , and \n \n “(C)  which is placed in service before  January 1, 1988 .”\nPub. L. 98–369, div. A, title X, §\u202f1067(b) ,  July 18, 1984 ,  98 Stat. 1049 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amount of any recapture under section 47 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to the credit allowed under section 38 of such Code with respect to progress expenditures (within the meaning of section 46(d) of such Code) shall apply only to the percentage of the cost basis of the coal gasification facility to which the amendment made by subsection (a) [amending  section 208(d) of Pub. L. 97–248 , set out as an Effective Date of 1982 Amendments note above] applies.”\nPub. L. 97–248, title II, §\u202f208(c) ,  Sept. 3, 1982 ,  96 Stat. 439 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Nothing in paragraph (8) of section 168(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], or in any regulations prescribed thereunder, shall be treated as making such paragraph inapplicable to any agreement entered into before  October 20, 1981 , solely because under such agreement 1 party to such agreement is entitled to the credit allowable under section 38 of such Code with respect to property and another party to such agreement is entitled to the deduction allowable under section 168 of such Code with respect to such property. Section 168(f)(8)(B)(ii) of such Code shall not apply to the party entitled to such credit.”\nPub. L. 97–248, title II, §\u202f210 ,  Sept. 3, 1982 ,  96 Stat. 447 , as amended by  Pub. L. 98–369, div. A, title I, §\u202f32(b) , title VII, §\u202f712(d),  July 18, 1984 ,  98 Stat. 531 , 947;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In general.— In the case of any qualified motor vehicle agreement entered into on or before the 90th day after the date of the enactment of the Tax Reform Act of 1984 [ July 18, 1984 ], the fact that such agreement contains a terminal rental adjustment clause shall not be taken into account in determining whether such agreement is a lease. \n \n “(b)   Definitions.— For purposes of this section— “(1)   Qualified motor vehicle agreement.— The term ‘qualified motor vehicle agreement’ means any agreement with respect to a motor vehicle (including a trailer)— “(A)  which was entered into before— “(i)  the enactment of any law, or \n \n “(ii)  the publication by the Secretary of the Treasury or his delegate of any regulation, \n \n\n \u2001\u2001which provides that any agreement with a terminal rental adjustment clause is not a lease, \n \n “(B)  with respect to which the lessor under the agreement— “(i)  is personally liable for the repayment of, or \n \n “(ii)  has pledged property (but only to the extent of the net fair market value of the lessor’s interest in such property), other than property subject to the agreement or property directly or indirectly financed by indebtedness secured by property subject to the agreement, as security for, \n \n\n \u2001\u2001all amounts borrowed to finance the acquisition of property subject to the agreement, and \n \n “(C)  with respect to which the lessee under the agreement uses the property subject to the agreement in a trade or business or for the production of income. \n \n \n “(2)   Terminal rental adjustment clause.— The term ‘terminal rental adjustment clause’ means a provision of an agreement which permits or requires the rental price to be adjusted upward or downward by reference to the amount realized by the lessor under the agreement upon sale or other disposition of such property. Such term also includes a provision of an agreement which requires a lessee who is a dealer in motor vehicles to purchase the motor vehicle for a predetermined price and then resell such vehicle where such provision achieves substantially the same results as a provision described in the preceding sentence. \n \n \n “(c)   Exception Where Lessee Took Position on Return .— Subsection (a) shall not apply to deny a deduction for interest paid or accrued claimed by a lessee with respect to a qualified motor vehicle agreement on a return of tax imposed by chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which was filed before the date of the enactment of this Act [ Sept. 3, 1982 ] or to deny a credit for investment in depreciable property claimed by the lessee on such a return pursuant to an agreement with the lessor that the lessor would not claim the credit.”\nPub. L. 97–119, title I, §\u202f112 ,  Dec. 29, 1981 ,  95 Stat. 1640 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Requirement of Return.— “(1)   In general.— Except as provided in paragraph (2), paragraph (8) of section 168(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to special rule for leases) shall not apply with respect to an agreement unless a return, signed by the lessor and lessee and containing the information required to be included in the return pursuant to subsection (b), has been filed with the Internal Revenue Service not later than the 30th day after the date on which the agreement is executed. \n \n “(2)   Special rules for agreements executed before  january 1, 1982 .— “(A)   In general.— In the case of an agreement executed before  January 1, 1982 , such agreement shall cease on  February 1, 1982 , to be treated as a lease under section 168(f)(8) unless a return, signed by the lessor and containing the information required to be included in subsection (b), has been filed with the Internal Revenue Service not later than  January 31, 1982 . \n \n “(B)   Filing by lessee.— If the lessor does not file a return under subparagraph (A), the return requirement under subparagraph (A) shall be satisfied if such return is filed by the lessee before  January 31, 1982 . \n \n \n “(3)   Certain failure to file.— If— “(A)  a lessor or lessee fails to file any return within the time prescribed by this subsection, and \n \n “(B)  such failure is shown to be due to reasonable cause and not due to willful neglect, \n \n\n the lessor or lessee shall be treated as having filed a timely return if a return is filed within a reasonable time after the failure is ascertained. \n \n \n “(b)   Information Required.— The information required to be included in the return pursuant to this subsection is as follows: “(1)  The name, address, and taxpayer identifying number of the lessor and the lessee (and parent company if a consolidated return is filed); \n \n “(2)  The district director’s office with which the income tax returns of the lessor and lessee are filed; \n \n “(3)  A description of each individual property with respect to which the election is made; \n \n “(4)  The date on which the lessee places the property in service, the date on which the lease begins and the term of the lease; \n \n “(5)  The recovery property class and the ADR midpoint life of the leased property; \n \n “(6)  The payment terms between the parties to the lease transaction; \n \n “(7)  Whether the ACRS deductions and the investment tax credit are allowable to the same taxpayer; \n \n “(8)  The aggregate amount paid to outside parties to arrange or carry out the transaction; \n \n “(9)  For the lessor only: the unadjusted basis of the property as defined in section 168(d)(1); \n \n “(10)  For the lessor only: if the lessor is a partnership or a grantor trust, the name, address, and taxpayer identifying number of the partners or the beneficiaries, and the district director’s office with which the income tax return of each partner or beneficiary is filed; and \n \n “(11)  Such other information as may be required by the return or its instructions. \n \n\n Paragraph (8) shall not apply with respect to any person for any calendar year if it is reasonable to estimate that the aggregate adjusted basis of the property of such person which will be subject to subsection (a) for such year is $1,000,000 or less. \n \n “(c)   Coordination With Other Information Requirements.— In the case of agreements executed after  December 31, 1982 , to the extent provided in regulations prescribed by the Secretary of the Treasury or his delegate, the provisions of this section shall be modified to coordinate such provisions with the other information requirements of the Internal Revenue Code of 1986.”\nPub. L. 97–34, title II, §\u202f209(d)(1) ,  Aug. 13, 1981 ,  95 Stat. 226 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If, by the terms of the applicable rate order last entered before the date of the enactment of this Act [ Aug. 13, 1981 ] by a regulatory commission having appropriate jurisdiction, a regulated public utility would (but for this provision) fail to meet the requirements of section 168(e)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to property because, for an accounting period ending after  December 31, 1980 , such public utility used a method of accounting other than a normalization method of accounting, such regulated public utility shall not fail to meet such requirements if, by the terms of its first rate order determining cost of service with respect to such property which becomes effective after the date of the enactment of this Act and on or before  January 1, 1983 , such regulated public utility uses a normalization method of accounting. This provision shall not apply to any rate order which, under the rules in effect before the date of the enactment of this Act, required a regulated public utility to use a method of accounting with respect to the deduction allowable by section 167 which, under section 167( l ), it was not permitted to use.”\nPub. L. 97–34, title II, §\u202f209(d)(4) ,  Aug. 13, 1981 ,  95 Stat. 227 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Until Congress acts further, the Secretary of the Treasury or his delegate may prescribe such interim regulations as may be necessary or appropriate to determine whether the requirements of section 168(e)(3)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] have been met with respect to property placed in service after  December 31, 1980 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Every person, at his election, shall be entitled to a deduction with respect to the amortization of the amortizable basis of any certified pollution control facility (as defined in subsection (d)), based on a period of 60 months. Such amortization deduction shall be an amount, with respect to each month of such period within the taxable year, equal to the amortizable basis of the pollution control facility at the end of such month divided by the number of months (including the month for which the deduction is computed) remaining in the period. Such amortizable basis at the end of the month shall be computed without regard to the amortization deduction for such month. The amortization deduction provided by this section with respect to any month shall be in lieu of the depreciation deduction with respect to such pollution control facility for such month provided by section 167. The 60-month period shall begin, as to any pollution control facility, at the election of the taxpayer, with the month following the month in which such facility was completed or acquired, or with the succeeding taxable year.\nThe election of the taxpayer to take the amortization deduction and to begin the 60-month period with the month following the month in which the facility is completed or acquired, or with the taxable year succeeding the taxable year in which such facility is completed or acquired, shall be made by filing with the Secretary, in such manner, in such form, and within such time, as the Secretary may by regulations prescribe, a statement of such election.\nA taxpayer which has elected under subsection (b) to take the amortization deduction provided in subsection (a) may, at any time after making such election, discontinue the amortization deduction with respect to the remainder of the amortization period, such discontinuance to begin as of the beginning of any month specified by the taxpayer in a notice in writing filed with the Secretary before the beginning of such month. The depreciation deduction provided under section 167 shall be allowed, beginning with the first month as to which the amortization deduction does not apply, and the taxpayer shall not be entitled to any further amortization deduction under this section with respect to such pollution control facility.\nThe term “State certifying authority” means, in the case of water pollution, the State water pollution control agency as defined in section 13(a) of the Federal Water Pollution Control Act and, in the case of air pollution, the air pollution control agency as defined in section 302(b) of the Clean Air Act. The term “State certifying authority” includes any interstate agency authorized to act in place of a certifying authority of the State.\nThe term “Federal certifying authority” means, in the case of water pollution, the Secretary of the Interior and, in the case of air pollution, the Secretary of Health and Human Services.\nIn the case of any facility described in paragraph (1) solely by reason of paragraph (5), subparagraph (A) shall be applied by substituting “ April 11, 2005 ” for “ December 31, 1968 ” each place it appears therein.\nThe Federal certifying authority shall not certify any property under subsection (d)(1)(B) to the extent it appears that by reason of profits derived through the recovery of wastes or otherwise in the operation of such property, its costs will be recovered over its actual useful life.\nFor purposes of this section, the term “amortizable basis” means that portion of the adjusted basis (for determining gain) of a certified pollution control facility which may be amortized under this section.\nThe depreciation deduction provided by section 167 shall, despite the provisions of subsection (a), be allowed with respect to the portion of the adjusted basis which is not the amortizable basis.\nIn the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowable to the life tenant.\nFor special rule with respect to certain gain derived from the disposition of property the adjusted basis of which is determined with regard to this section, see section 1245.\nThe Federal Water Pollution Control Act, as amended ( 33 U.S.C. 466  et seq.), referred to in subsec. (d)(1)(B), is  act June 30, 1948, ch. 758 , as amended generally by  Pub. L. 92–500, §\u202f2 ,  Oct. 18, 1972 ,  86 Stat. 816 , which is classified generally to chapter 26 (§\u202f1251 et seq.) of Title 33, Navigation and Navigable Waters. The subject matter of section 13(a) of the act, referred to in subsec. (d)(2), is covered by  section 1362(1) of Title 33 . For complete classification of this Act to the Code, see Short Title note set out under  section 1251 of Title 33  and Tables.\nThe Clean Air Act, referred to in subsec. (d)(1)(B), is  act July 14, 1955, ch. 360 ,  69 Stat. 322 , which is classified generally to chapter 85 (§\u202f7401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 7401 of Title 42  and Tables.\nSection 302(b) of the Clean Air Act, referred to in subsec. (d)(2), formerly classified to  section 1857h(b) of Title 42 , was reclassified to  section 7602(b) of Title 42  on enactment of  Pub. L. 95–95 .\nA prior section 169,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 55 , related to amortization of grain-storage facilities, prior to the reorganization of part VI of subchapter B of chapter 1 of this title by  Pub. L. 91–172 .\n2018—Subsec. (d)(5)(B).  Pub. L. 115–141  inserted “a” before “facility”.\n2005—Subsec. (d).  Pub. L. 109–58, §\u202f1309(c) , inserted “and special rules” after “Definitions” in heading.\nSubsec. (d)(3).  Pub. L. 109–58, §\u202f1309(d) , substituted “Health and Human Services” for “Health, Education, and Welfare”.\nSubsec. (d)(4)(B).  Pub. L. 109–58, §\u202f1309(b) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “In the case of any treatment facility used in connection with any plant or other property not in operation before  January 1, 1969 , the preceding sentence shall be applied by substituting  December 31, 1975 , for  December 31, 1968 .”\nSubsec. (d)(5).  Pub. L. 109–58, §\u202f1309(a) , added par. (5).\nSubsec. (d)(5)(B).  Pub. L. 109–135  inserted “in the case of facility placed in service in connection with a plant or other property placed in operation after  December 31, 1975 ,” before “this section”.\n1976—Subsecs. (b), (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(1).  Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 2112(b), substituted in provisions preceding subpar. (A) “ January 1, 1976 ,” for “ January 1, 1969 ,” and “storing, or preventing the creation or emission of” for “or storing”, struck out in subpar. (B) “or his delegate” after “Secretary”, and added subpar. (C).\nSubsec. (d)(4).  Pub. L. 94–455, §\u202f2112(c) , among other changes, struck out provisions relating to treatment facilities placed in service by taxpayer before  Jan. 1, 1976 , and inserted provisions that in case of treatment facilities used in connection with any plan or other property not in operation before  Jan. 1, 1969 ,  Dec. 31, 1975 , shall be substituted for  Dec. 31, 1968 , as the cut-off date for taking into account that portion of the basis which is attributable to construction, reconstruction, or erection.\n1975—Subsec. (d)(4)(B).  Pub. L. 93–625  substituted “ January 1, 1976 ” for “ January 1, 1975 ”.\n1971—Subsec. (h).  Pub. L. 92–178  struck out provision that investment credit not be allowed. See  section 48(a)(8) of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nPub. L. 109–58, title XIII, §\u202f1309(e) ,  Aug. 8, 2005 ,  119 Stat. 1007 , provided that:  “The amendments made by this section [amending this section] shall apply to facilities placed in service after  April 11, 2005 .”\nPub. L. 94–455, title XXI, §\u202f2112(d)(2) ,  Oct. 4, 1976 ,  90 Stat. 1907 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1975 . Such amendments shall not apply in the case of any property with respect to which the amortization period under section 169 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] has begun before  January 1, 1976 .”\nPub. L. 91–172, title VII, §\u202f704(c) ,  Dec. 30, 1969 ,  83 Stat. 670 , provided that:  “The amendments made by this section [enacting this section and amending sections 642, 1082, 1245, and 1250 of this title] shall apply with respect to taxable years ending after  December 31, 1968 .”\nFunctions vested in Secretary of the Interior and Secretary of Health, Education, and Welfare by subsec. (d)(1)(B), (3) of this section transferred to Administrator of Environmental Protection Agency by Reorg. Plan No. 3, of 1970, §\u202f2(a)(9), eff.  Dec. 2, 1970 , 35 F.R. 15623,  84 Stat. 2086 , set out in the Appendix to Title 5, Government Organization and Employees.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary.\nFor purposes of this section, payment of a charitable contribution which consists of a future interest in tangible personal property shall be treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the taxpayer or those standing in a relationship to the taxpayer described in section 267(b) or 707(b). For purposes of the preceding sentence, a fixture which is intended to be severed from the real property shall be treated as tangible personal property.\nIf the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution of capital gain property to which clause (i) applies in each of the 5 succeeding taxable years in order of time.\nAny qualified conservation contribution (as defined in subsection (h)(1)) shall be allowed to the extent the aggregate of such contributions does not exceed the excess of 50 percent of the taxpayer’s contribution base over the amount of all other charitable contributions allowable under this paragraph.\nIf the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding years in order of time.\nFor purposes of applying this subsection and subsection (d)(1), contributions described in clause (i) shall not be treated as described in subparagraph (A), (B), (C), or (D) and such subparagraphs shall apply without regard to such contributions.\nIf the individual is a qualified farmer or rancher for the taxable year for which the contribution is made, clause (i) shall be applied by substituting “100 percent” for “50 percent”.\nSubclause (I) shall not apply to any contribution of property made after the date of the enactment of this subparagraph which is used in agriculture or livestock production (or available for such production) unless such contribution is subject to a restriction that such property remain available for such production. This subparagraph shall be applied separately with respect to property to which subclause (I) does not apply by reason of the preceding sentence prior to its application to property to which subclause (I) does apply.\nFor purposes of clause (iv), the term “qualified farmer or rancher” means a taxpayer whose gross income from the trade or business of farming (within the meaning of section 2032A(e)(5)) is greater than 50 percent of the taxpayer’s gross income for the taxable year.\nIn the case of any contribution of cash to an organization described in subparagraph (A), the total amount of such contributions which may be taken into account under subsection (a) for any taxable year beginning after  December 31, 2017 , and before  January 1, 2026 , shall not exceed 60 percent of the taxpayer’s contribution base for such year.\nIf the aggregate amount of contributions described in clause (i) exceeds the applicable limitation under clause (i) for any taxable year described in such clause, such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution to which clause (i) applies in each of the 5 succeeding years in order of time.\nContributions taken into account under this subparagraph shall not be taken into account under subparagraph (A).\nFor each taxable year described in clause (i), and each taxable year to which any contribution under this subparagraph is carried over under clause (ii), subparagraph (A) shall be applied by reducing (but not below zero) the contribution limitation allowed for the taxable year under such subparagraph by the aggregate contributions allowed under this subparagraph for such taxable year, and subparagraph (B) shall be applied by treating any reference to subparagraph (A) as a reference to both subparagraph (A) and this subparagraph.\nFor purposes of this section, the term “contribution base” means adjusted gross income (computed without regard to any net operating loss carryback to the taxable year under section 172).\nThe total deductions under subsection (a) for any taxable year (other than for contributions to which subparagraph (B) or (C) applies) shall not exceed 10 percent of the taxpayer’s taxable income.\nIf the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(2)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding taxable years in order of time.\nIf the aggregate amount of contributions described in clause (i) exceeds the limitation of clause (i), such excess shall be treated (in a manner consistent with the rules of subsection (d)(2)) as a charitable contribution to which clause (i) applies in each of the 15 succeeding taxable years in order of time.\nFor purposes of this subparagraph, the term “Native Corporation” has the meaning given such term by section 3(m) of the Alaska Native Claims Settlement Act.\nIn applying subparagraph (A), the excess determined under subparagraph (A) for the contribution year shall be reduced to the extent that such excess reduces taxable income (as computed for purposes of the second sentence of section 172(b)(2)) and increases the net operating loss deduction for a taxable year succeeding the contribution year.\nAny contribution made by a corporation in a taxable year (hereinafter in this paragraph referred to as the “contribution year”) in excess of the amount deductible for such year under subsection (b)(2)(A) shall be deductible for each of the 5 succeeding taxable years in order of time, but only to the extent of the lesser of the two following amounts: (i) the excess of the maximum amount deductible for such succeeding taxable year under subsection (b)(2)(A) over the sum of the contributions made in such year plus the aggregate of the excess contributions which were made in taxable years before the contribution year and which are deductible under this subparagraph for such succeeding taxable year; or (ii) in the case of the first succeeding taxable year, the amount of such excess contribution, and in the case of the second, third, fourth, or fifth succeeding taxable year, the portion of such excess contribution not deductible under this subparagraph for any taxable year intervening between the contribution year and such succeeding taxable year.\nFor purposes of paragraph (1), in the case of a charitable contribution of less than the taxpayer’s entire interest in the property contributed, the taxpayer’s adjusted basis in such property shall be allocated between the interest contributed and any interest not contributed in accordance with regulations prescribed by the Secretary.\nIf such aggregate amount exceeds the limitation imposed under clause (ii), such excess shall be treated (in a manner consistent with the rules of subsection (d)) as a charitable contribution described in clause (i) in each of the 5 succeeding taxable years in order of time.\nIn the case of any charitable contribution which is allowable after the application of clause (ii)(II), subsection (b)(2)(A) shall not apply to such contribution, but the limitation imposed by such subsection shall be reduced (but not below zero) by the aggregate amount of such contributions. For purposes of subsection (b)(2)(B), such contributions shall be treated as allowable under subsection (b)(2)(A).\nFor purposes of this subparagraph, the term “apparently wholesome food” has the meaning given to such term by section 22(b)(2) of the Bill Emerson Good Samaritan Food Donation Act ( 42 U.S.C. 1791(b)(2) ), as in effect on the date of the enactment of this subparagraph.\nIn the case of a qualified research contribution, the reduction under paragraph (1)(A) shall be no greater than the amount determined under paragraph (3)(B).\nFor purposes of this paragraph, property shall be treated as constructed by the taxpayer only if the cost of the parts used in the construction of such property (other than parts manufactured by the taxpayer or a related person) do not exceed 50 percent of the taxpayer’s basis in such property.\nSubparagraph (B)(ii) of paragraph (1) shall not apply to any contribution of qualified appreciated stock.\nIn the case of any donor, the term “qualified appreciated stock” shall not include any stock of a corporation contributed by the donor in a contribution to which paragraph (1)(B)(ii) applies (determined without regard to this paragraph) to the extent that the amount of the stock so contributed (when increased by the aggregate amount of all prior such contributions by the donor of stock in such corporation) exceeds 10 percent (in value) of all of the outstanding stock of such corporation.\nFor purposes of clause (i), an individual shall be treated as making all contributions made by any member of his family (as defined in section 267(c)(4)).\nNo deduction shall be allowed under this section for a contribution to or for the use of an organization or trust described in section 508(d) or 4948(c)(4) subject to the conditions specified in such sections.\nIn the case of property transferred in trust, no deduction shall be allowed under this section for the value of a contribution of a remainder interest unless the trust is a charitable remainder annuity trust or a charitable remainder unitrust (described in section 664), or a pooled income fund (described in section 642(c)(5)).\nNo deduction shall be allowed under this section for the value of any interest in property (other than a remainder interest) transferred in trust unless the interest is in the form of a guaranteed annuity or the trust instrument specifies that the interest is a fixed percentage distributed yearly of the fair market value of the trust property (to be determined yearly) and the grantor is treated as the owner of such interest for purposes of applying section 671. If the donor ceases to be treated as the owner of such an interest for purposes of applying section 671, at the time the donor ceases to be so treated, the donor shall for purposes of this chapter be considered as having received an amount of income equal to the amount of any deduction he received under this section for the contribution reduced by the discounted value of all amounts of income earned by the trust and taxable to him before the time at which he ceases to be treated as the owner of the interest. Such amounts of income shall be discounted to the date of the contribution. The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph.\nIn any case in which a deduction is allowed under this section for the value of an interest in property described in subparagraph (B), transferred in trust, no deduction shall be allowed under this section to the grantor or any other person for the amount of any contribution made by the trust with respect to such interest.\nThis paragraph shall not apply in a case in which the value of all interests in property transferred in trust are deductible under subsection (a).\nIn the case of a contribution (not made by a transfer in trust) of an interest in property which consists of less than the taxpayer’s entire interest in such property, a deduction shall be allowed under this section only to the extent that the value of the interest contributed would be allowable as a deduction under this section if such interest had been transferred in trust. For purposes of this subparagraph, a contribution by a taxpayer of the right to use property shall be treated as a contribution of less than the taxpayer’s entire interest in such property.\nFor purposes of this section, in determining the value of a remainder interest in real property, depreciation (computed on the straight line method) and depletion of such property shall be taken into account, and such value shall be discounted at a rate of 6 percent per annum, except that the Secretary may prescribe a different rate.\nNo deduction shall be allowed under this section for an out-of-pocket expenditure made by any person on behalf of an organization described in subsection (c) (other than an organization described in section 501(h)(5) (relating to churches, etc.)) if the expenditure is made for the purpose of influencing legislation (within the meaning of section 501(c)(3)).\nA deduction shall be allowed under subsection (a) in respect of any qualified reformation (within the meaning of section 2055(e)(3)(B)).\nFor purposes of this paragraph, rules similar to the rules of section 2055(e)(3) shall apply.\nNo deduction shall be allowed under subsection (a) for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization that meets the requirements of subparagraph (B).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph, including regulations that may provide that some or all of the requirements of this paragraph do not apply in appropriate cases.\nNo deduction shall be allowed under this section for a contribution to an organization which conducts activities to which section 162(e)(1) applies on matters of direct financial interest to the donor’s trade or business, if a principal purpose of the contribution was to avoid Federal income tax by securing a deduction for such activities under this section which would be disallowed by reason of section 162(e) if the donor had conducted such activities directly. No deduction shall be allowed under section 162(a) for any amount for which a deduction is disallowed under the preceding sentence.\nFor purposes of subparagraph (A), the term “personal benefit contract” means, with respect to the transferor, any life insurance, annuity, or endowment contract if any direct or indirect beneficiary under such contract is the transferor, any member of the transferor’s family, or any other person (other than an organization described in subsection (c)) designated by the transferor.\nIn the case of a transfer to a trust referred to in subparagraph (E), references in subparagraphs (A) and (F) to an organization described in subsection (c) shall be treated as a reference to such trust.\nThere is hereby imposed on any organization described in subsection (c) an excise tax equal to the premiums paid by such organization on any life insurance, annuity, or endowment contract if the payment of premiums on such contract is in connection with a transfer for which a deduction is not allowable under subparagraph (A), determined without regard to when such transfer is made.\nFor purposes of clause (i), payments made by any other person pursuant to an understanding or expectation referred to in subparagraph (A) shall be treated as made by the organization.\nThe tax imposed by this subparagraph shall be treated as imposed by chapter 42 for purposes of this title other than subchapter B of chapter 42.\nFor purposes of this paragraph, an individual’s family consists of the individual’s grandparents, the grandparents of such individual’s spouse, the lineal descendants of such grandparents, and any spouse of such a lineal descendant.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph, including regulations to prevent the avoidance of such purposes.\nIn the case of an individual, partnership, or corporation, no deduction shall be allowed under subsection (a) for any contribution of property for which a deduction of more than $500 is claimed unless such person meets the requirements of subparagraphs (B), (C), and (D), as the case may be, with respect to such contribution.\nSubparagraphs (C) and (D) shall not apply to cash, property described in subsection (e)(1)(B)(iii) or section 1221(a)(1), publicly traded securities (as defined in section 6050L(a)(2)(B)), and any qualified vehicle described in paragraph (12)(A)(ii) for which an acknowledgement under paragraph (12)(B)(iii) is provided.\nClause (i) shall not apply if it is shown that the failure to meet such requirements is due to reasonable cause and not to willful neglect.\nIn the case of contributions of property for which a deduction of more than $500 is claimed, the requirements of this subparagraph are met if the individual, partnership or corporation includes with the return for the taxable year in which the contribution is made a description of such property and such other information as the Secretary may require. The requirements of this subparagraph shall not apply to a C corporation which is not a personal service corporation or a closely held C corporation.\nIn the case of contributions of property for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal of such property and attaches to the return for the taxable year in which such contribution is made such information regarding such property and such appraisal as the Secretary may require.\nIn the case of contributions of property for which a deduction of more than $500,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation attaches to the return for the taxable year a qualified appraisal of such property.\nFor purposes of determining thresholds under this paragraph, property and all similar items of property donated to 1 or more donees shall be treated as 1 property.\nIn the case of a partnership or S corporation, this paragraph shall be applied at the entity level, except that the deduction shall be denied at the partner or shareholder level.\nThe Secretary may prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph, including regulations that may provide that some or all of the requirements of this paragraph do not apply in appropriate cases.\nA donee organization required to provide an acknowledgement under this paragraph shall provide to the Secretary the information contained in the acknowledgement. Such information shall be provided at such time and in such manner as the Secretary may prescribe.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this paragraph. The Secretary may prescribe regulations or other guidance which exempts sales by the donee organization which are in direct furtherance of such organization’s charitable purpose from the requirements of subparagraphs (A)(ii) and (B)(iv)(II).\nNo deduction shall be allowed with respect to any contribution described in subparagraph (B) unless the taxpayer includes with the return for the taxable year of the contribution a $500 filing fee.\nA contribution is described in this subparagraph if such contribution is a qualified conservation contribution (as defined in subsection (h)) which is a restriction with respect to the exterior of a building described in subsection (h)(4)(C)(ii) and for which a deduction is claimed in excess of $10,000.\nAny fee collected under this paragraph shall be used for the enforcement of the provisions of subsection (h).\nFor purposes of this section and notwithstanding section 1012, in the case of a charitable contribution of taxidermy property which is made by the person who prepared, stuffed, or mounted the property or by any person who paid or incurred the cost of such preparation, stuffing, or mounting, only the cost of the preparing, stuffing, or mounting shall be included in the basis of such property.\nIn the case of an individual, partnership, or corporation, no deduction shall be allowed under subsection (a) for any contribution of clothing or a household item unless such clothing or household item is in good used condition or better.\nNotwithstanding subparagraph (A), the Secretary may by regulation deny a deduction under subsection (a) for any contribution of clothing or a household item which has minimal monetary value.\nSubparagraphs (A) and (B) shall not apply to any contribution of a single item of clothing or a household item for which a deduction of more than $500 is claimed if the taxpayer includes with the taxpayer’s return a qualified appraisal with respect to the property.\nThe term “household items” includes furniture, furnishings, electronics, appliances, linens, and other similar items.\nIn the case of a partnership or S corporation, this paragraph shall be applied at the entity level, except that the deduction shall be denied at the partner or shareholder level.\nNo deduction shall be allowed under subsection (a) for any contribution of a cash, check, or other monetary gift unless the donor maintains as a record of such contribution a bank record or a written communication from the donee showing the name of the donee organization, the date of the contribution, and the amount of the contribution.\nExcept as may be otherwise provided by the Secretary, the rules of this paragraph shall apply to S corporations and other pass-through entities in the same manner as such rules apply to partnerships.\nParagraph (1) shall apply to amounts paid within the taxable year only to the extent that such amounts do not exceed $50 multiplied by the number of full calendar months during the taxable year which fall within the period described in paragraph (1). For purposes of the preceding sentence, if 15 or more days of a calendar month fall within such period such month shall be considered as a full calendar month.\nParagraph (1) shall not apply to any amount paid by the taxpayer within the taxable year if the taxpayer receives any money or other property as compensation or reimbursement for maintaining the individual in his household during the period described in paragraph (1).\nFor purposes of paragraph (1), the term “relative of the taxpayer” means an individual who, with respect to the taxpayer, bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)(2).\nNo deduction shall be allowed under subsection (a) for any amount paid by a taxpayer to maintain an individual as a member of his household under a program described in paragraph (1)(A) except as provided in this subsection.\nA contribution shall not be treated as exclusively for conservation purposes unless the conservation purpose is protected in perpetuity.\nExcept as provided in clause (ii), in the case of a contribution of any interest where there is a retention of a qualified mineral interest, subparagraph (A) shall not be treated as met if at any time there may be extraction or removal of minerals by any surface mining method.\nWith respect to any contribution of property in which the ownership of the surface estate and mineral interests has been and remains separated, subparagraph (A) shall be treated as met if the probability of surface mining occurring on such property is so remote as to be negligible.\nA contribution by a partnership (whether directly or as a distributive share of a contribution of another partnership) shall not be treated as a qualified conservation contribution for purposes of this section if the amount of such contribution exceeds 2.5 times the sum of each partner’s relevant basis in such partnership.\nThe term “relevant basis” means, with respect to any partner, the portion of such partner’s modified basis in the partnership which is allocable (under rules similar to the rules of section 755) to the portion of the real property with respect to which the contribution described in subparagraph (A) is made.\nSubparagraph (A) shall not apply with respect to any contribution made by any partnership if substantially all of the partnership interests in such partnership are held, directly or indirectly, by an individual and members of the family of such individual.\nSubparagraph (A) shall not apply to any qualified conservation contribution the conservation purpose of which is the preservation of any building which is a certified historic structure (as defined in paragraph (4)(C)).\nExcept as may be otherwise provided by the Secretary, the rules of this paragraph shall apply to S corporations and other pass-through entities in the same manner as such rules apply to partnerships.\nFor purposes of computing the deduction under this section for use of a passenger automobile, the standard mileage rate shall be 14 cents per mile.\nNo deduction shall be allowed under this section for traveling expenses (including amounts expended for meals and lodging) while away from home, whether paid directly or by reimbursement, unless there is no significant element of personal pleasure, recreation, or vacation in such travel.\nNo deduction shall be allowed under this section for any amount described in paragraph (2).\nIn the case of a taxpayer who makes a qualified intellectual property contribution, the deduction allowed under subsection (a) for each taxable year of the taxpayer ending on or after the date of such contribution shall be increased (subject to the limitations under subsection (b)) by the applicable percentage of qualified donee income with respect to such contribution which is properly allocable to such year under this subsection.\nWith respect to any qualified intellectual property contribution, the deduction allowed under subsection (a) shall be increased under paragraph (1) only to the extent that the aggregate amount of such increases with respect to such contribution exceed the amount allowed as a deduction under subsection (a) with respect to such contribution determined without regard to this subsection.\nFor purposes of this subsection, the term “qualified donee income” means any net income received by or accrued to the donee which is properly allocable to the qualified intellectual property.\nFor purposes of this subsection, qualified donee income shall be treated as properly allocable to a taxable year of the donor if such income is received by or accrued to the donee for the taxable year of the donee which ends within or with such taxable year of the donor.\nIncome shall not be treated as properly allocable to qualified intellectual property for purposes of this subsection if such income is received by or accrued to the donee after the 10-year period beginning on the date of the contribution of such property.\nIncome shall not be treated as properly allocable to qualified intellectual property for purposes of this subsection if such income is received by or accrued to the donee after the expiration of the legal life of such property.\nFor purposes of this subsection, the term “applicable percentage” means the percentage determined under the following table which corresponds to a taxable year of the donor ending on or after the date of the qualified intellectual property contribution: \n \n \n \n \n \n \n Taxable Year of Donor \u2000Ending on or After \u2000Date of Contribution: Applicable Percentage: \n \n \n \u2001\u20011st 100\u202f\u202f \n \u2001\u20012nd 100\u202f\u202f \n \u2001\u20013rd 90\u202f\u202f \n \u2001\u20014th 80\u202f\u202f \n \u2001\u20015th 70\u202f\u202f \n \u2001\u20016th 60\u202f\u202f \n \u2001\u20017th 50\u202f\u202f \n \u2001\u20018th 40\u202f\u202f \n \u2001\u20019th 30\u202f\u202f \n \u2001\u200110th 20\u202f\u202f \n \u2001\u200111th 10\u202f\u202f \n \u2001\u200112th 10.\nFor purposes of this subsection, the term “qualified intellectual property” means property described in subsection (e)(1)(B)(iii) (other than property contributed to or for the use of an organization described in subsection (e)(1)(B)(ii)).\nAny increase under this subsection of the deduction provided under subsection (a) shall be treated for purposes of subsection (b) as a deduction which is attributable to a charitable contribution to the donee to which such increase relates.\nThe net income taken into account under paragraph (3) shall not exceed the amount of such income reported under section 6050L(b)(1).\nExcept as may be provided under subparagraph (D)(i), this subsection shall not apply with respect to any qualified intellectual property contribution for any taxable year of the donor after the 12th taxable year of the donor which ends on or after the date of such contribution.\nIn the case of an individual who is recognized by the Alaska Eskimo Whaling Commission as a whaling captain charged with the responsibility of maintaining and carrying out sanctioned whaling activities and who engages in such activities during the taxable year, the amount described in paragraph (2) (to the extent such amount does not exceed $10,000 for the taxable year) shall be treated for purposes of this section as a charitable contribution.\nThe amount described in this paragraph is the aggregate of the reasonable and necessary whaling expenses paid by the taxpayer during the taxable year in carrying out sanctioned whaling activities.\nFor purposes of this subsection, the term “sanctioned whaling activities” means subsistence bowhead whale hunting activities conducted pursuant to the management plan of the Alaska Eskimo Whaling Commission.\nThe Secretary shall issue guidance requiring that the taxpayer substantiate the whaling expenses for which a deduction is claimed under this subsection, including by maintaining appropriate written records with respect to the time, place, date, amount, and nature of the expense, as well as the taxpayer’s eligibility for such deduction, and that (to the extent provided by the Secretary) such substantiation be provided as part of the taxpayer’s return of tax.\nThe Secretary may, by regulation, provide for exceptions to subparagraph (A) in cases where all persons who hold an interest in the property make proportional contributions of an undivided portion of the entire interest held by such persons.\nThe tax imposed under this chapter for any taxable year for which there is a recapture under subparagraph (A) shall be increased by 10 percent of the amount so recaptured.\nThe term “additional contribution” means any charitable contribution by the taxpayer of any interest in property with respect to which the taxpayer has previously made an initial fractional contribution.\nThe term “initial fractional contribution” means, with respect to any taxpayer, the first charitable contribution of an undivided portion of the taxpayer’s entire interest in any tangible personal property.\nSection 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, referred to in subsec. (b)(1)(A)(ix), is classified to  section 3103 of Title 7 , Agriculture.\nThe date of the enactment of this subparagraph, referred to in subsecs. (b)(1)(E)(iv)(II), (2)(B)(i)(II) and (h)(4)(B)(iii), is the date of enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\nThe Alaska Native Claims Settlement Act, referred to in subsec. (b)(2)(C)(i)(II), (iii), is  Pub. L. 92–203 ,  Dec. 18, 1971 ,  85 Stat. 688 , which is classified generally to chapter 33 (§\u202f1601 et seq.) of Title 43, Public Lands. Section 3 of the Act is classified to  section 1602 of Title 43 . For complete classification of this Act to the Code, see Short Title note set out under  section 1601 of Title 43  and Tables.\nThe Federal Food, Drug, and Cosmetic Act, as amended, referred to in subsec. (e)(3)(A)(iv), is  act June 25, 1938, ch. 675 ,  52 Stat. 1040 , as amended, which is classified generally to chapter 9 (§\u202f301 et seq.) of Title 21, Food and Drugs. For complete classification of this Act to the Code, see  section 301 of Title 21  and Tables.\nThe date of the enactment of this subparagraph, referred to in subsec. (e)(3)(C)(vi), is the date of enactment of  Pub. L. 109–73 , which was approved  Sept. 23, 2005 .\nSection 330(c) of title 31 , referred to in subsec. (f)(11)(E)(iii)(II), was redesignated  section 330(d) of title 31  by  Pub. L. 114–113, div. Q, title IV, §\u202f410(1) ,  Dec. 18, 2015 ,  129 Stat. 3121 .\nSection 25 of the State Department Basic Authorities Act of 1956, referred to in subsec. (q)(7), is classified to  section 2697 of Title 22 , Foreign Relations and Intercourse.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\nSections 1202(a), 1204(a), 1206(a), (b)(1), 1213(a)–(d), 1214(a), (b), 1215(a), 1216(a), 1217(a), 1218(a), 1219(c)(1), and 1234(a) of  Pub. L. 109–280 , which directed the amendment of section 170 without specifying the act to be amended, were executed to this section which is section 170 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.\n2024—Subsec. (b)(1)(A)(x).  Pub. L. 118–146, §\u202f2(b) , added cl. (x).\nSubsec. (c)(6).  Pub. L. 118–146, §\u202f2(a) , added par. (6).\n2022—Subsec. (f)(19).  Pub. L. 117–328, §\u202f605(b) , added par. (19).\nSubsec. (h)(7).  Pub. L. 117–328, §\u202f605(a)(1) , added par. (7).\n2020—Subsecs. (p), (q).  Pub. L. 116–260  added subsec. (p) and redesignated former subsec. (p) as (q).\n2018—Subsec. (b)(1)(A)(ix).  Pub. L. 115–141, §\u202f401(a)(52) , inserted “National” before “Agricultural”.\nSubsec. (e)(3)(D), (E).  Pub. L. 115–141, §\u202f401(b)(14) , redesignated subpar. (E) as (D) and struck out former subpar. (D) which related to special rule for contributions of book inventory to public schools.\nSubsec. (p)(6).  Pub. L. 115–232  substituted “ section 8473 of title 10 , United States Code” for “ section 6973 of title 10 , United States Code”.\n2017—Subsec. (b)(1)(G), (H).  Pub. L. 115–97, §\u202f11023(a) , added subpar. (G) and redesignated former subpar. (G) as (H).\nSubsec. (b)(2)(D)(iv), (v).  Pub. L. 115–97, §\u202f13305(b)(2) , redesignated cls. (v) and (vi) as (iv) and (v), respectively, and struck out former cl. (iv) which read as follows: “section 199,”.\nSubsec. (b)(2)(D)(vi).  Pub. L. 115–97, §\u202f13305(b)(2) , redesignated cl. (vi) as (v).\nPub. L. 115–97, §\u202f11011(d)(5) , added cl. (vi).\nSubsec. (f)(8)(D), (E).  Pub. L. 115–97, §\u202f13705(a) , redesignated subpar. (E) as (D) and struck out former subpar. (D). Prior to amendment, text of subpar. (D) read as follows: “Subparagraph (A) shall not apply to a contribution if the donee organization files a return, on such form and in accordance with such regulations as the Secretary may prescribe, which includes the information described in subparagraph (B) with respect to the contribution.”\nSubsec. ( l )(1).  Pub. L. 115–97, §\u202f13704(a)(1) , added par. (1) and struck out former par. (1). Prior to amendment, text read as follows: “For purposes of this section, 80 percent of any amount described in paragraph (2) shall be treated as a charitable contribution.”\nSubsec. ( l )(2)(B).  Pub. L. 115–97, §\u202f13704(a)(2) , struck out “such amount would be allowable as a deduction under this section but for the fact that” before “the taxpayer”.\n2015—Subsec. (a)(2)(B).  Pub. L. 114–41  substituted “fourth month” for “third month”.\nSubsec. (b)(1)(A)(ix).  Pub. L. 114–113, §\u202f331(a) , added cl. (ix).\nSubsec. (b)(1)(E)(vi).  Pub. L. 114–113, §\u202f111(a)(1) , struck out cl. (vi). Text read as follows: “This subparagraph shall not apply to any contribution made in taxable years beginning after  December 31, 2014 .”\nSubsec. (b)(2)(A).  Pub. L. 114–113, §\u202f111(b)(2)(A) , substituted “subparagraph (B) or (C) applies” for “subparagraph (B) applies”.\nSubsec. (b)(2)(B)(ii).  Pub. L. 114–113, §\u202f111(b)(2)(B) , substituted “15 succeeding taxable years” for “15 succeeding years”.\nSubsec. (b)(2)(B)(iii).  Pub. L. 114–113, §\u202f111(a)(2) , struck out cl. (iii). Text read as follows: “This subparagraph shall not apply to any contribution made in taxable years beginning after  December 31, 2014 .”\nSubsec. (b)(2)(C), (D).  Pub. L. 114–113, §\u202f111(b)(1) , added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (e)(3)(C)(ii).  Pub. L. 114–113, §\u202f113(b) , added cl. (ii) and struck out former cl. (ii). Prior to amendment, text read as follows: “In the case of a taxpayer other than a C corporation, the aggregate amount of such contributions for any taxable year which may be taken into account under this section shall not exceed 10 percent of the taxpayer’s aggregate net income for such taxable year from all trades or businesses from which such contributions were made for such year, computed without regard to this section.”\nSubsec. (e)(3)(C)(iii).  Pub. L. 114–113, §\u202f113(b) , added cl. (iii). Former cl. (iii) redesignated (vi).\nSubsec. (e)(3)(C)(iv).  Pub. L. 114–113, §\u202f113(b) , added cl. (iv).\nPub. L. 114–113, §\u202f113(a) , struck out cl. (iv). Text read as follows: “This subparagraph shall not apply to contributions made after  December 31, 2014 .”\nSubsec. (e)(3)(C)(v), (vi).  Pub. L. 114–113, §\u202f113(b) , added cl. (v) and redesignated cl. (iii) as (vi).\n2014—Subsec. (b)(1)(E)(vi).  Pub. L. 113–295, §\u202f106(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (b)(2)(B)(iii).  Pub. L. 113–295, §\u202f106(b) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (b)(3).  Pub. L. 113–295, §\u202f221(a)(28)(A) , struck out par. (3) which related to temporary suspension of limitations on charitable contributions.\nSubsec. (e)(3)(C)(iv).  Pub. L. 113–295, §\u202f126(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (e)(6).  Pub. L. 113–295, §\u202f221(a)(28)(B) , struck out par. (6) which related to special rule for contributions of computer technology and equipment for educational purposes.\nSubsec. (k).  Pub. L. 113–295, §\u202f221(a)(28)(C) , struck out subsec. (k). Text read as follows: “For disallowance of deductions for contributions to or for the use of communist controlled organizations, see section 11(a) of the Internal Security Act of 1950 ( 50 U.S.C. 790 ).”\n2013—Subsec. (b)(1)(E)(vi).  Pub. L. 112–240, §\u202f206(a) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\nSubsec. (b)(2)(B)(iii).  Pub. L. 112–240, §\u202f206(b) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\nSubsec. (e)(3)(C)(iv).  Pub. L. 112–240, §\u202f314(a) , substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (b).  Pub. L. 111–312, §\u202f723(a) , (b), substituted “ December 31, 2011 ” for “ December 31, 2009 ” in pars. (1)(E)(vi) and (2)(B)(iii).\nSubsec. (e)(1).  Pub. L. 111–312, §\u202f301(a) , amended subsec. (e)(1) to read as if amendment by  Pub. L. 107–16, §\u202f542(e)(2)(B) , had never been enacted. See 2001 Amendment note below.\nSubsec. (e)(3)(C)(iv).  Pub. L. 111–312, §\u202f740(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (e)(3)(D)(iv).  Pub. L. 111–312, §\u202f741(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (e)(6)(G).  Pub. L. 111–312, §\u202f742(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (b).  Pub. L. 110–246, §\u202f15302(a) , substituted “ December 31, 2009 ” for “ December 31, 2007 ” in pars. (1)(E)(vi) and (2)(B)(iii).\nSubsec. (b)(3).  Pub. L. 110–343, §\u202f323(b)(1) , added par. (3).\nSubsec. (e)(3)(C)(iv).  Pub. L. 110–343, §\u202f323(a)(1) , substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\nSubsec. (e)(3)(D)(iii).  Pub. L. 110–343, §\u202f324(b) , inserted “of books” after “to any contribution” in introductory provisions.\nSubsec. (e)(3)(D)(iv).  Pub. L. 110–343, §\u202f324(a) , substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\nSubsec. (e)(6)(G).  Pub. L. 110–343, §\u202f321(a) , substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2007—Subsec. (b)(1)(A)(vii).  Pub. L. 110–172, §\u202f11(a)(14)(A) , substituted “subparagraph (F)” for “subparagraph (E)”.\nSubsec. (e)(1)(B)(i)(II).  Pub. L. 110–172, §\u202f11(a)(15) , inserted “,\u2000but without regard to clause (ii) thereof” after “paragraph (7)(C)”.\nSubsec. (e)(1)(B)(ii).  Pub. L. 110–172, §\u202f11(a)(14)(B) , substituted “subsection (b)(1)(F)” for “subsection (b)(1)(E)”.\nSubsec. (e)(7)(D)(i)(I).  Pub. L. 110–172, §\u202f3(c) , substituted “substantial and related” for “related”.\nSubsec. ( o )(1)(A).  Pub. L. 110–172, §\u202f11(a)(16)(A) , in introductory provisions, substituted “all interests in the property are” for “all interest in the property is”.\nSubsec. ( o )(3)(A)(i).  Pub. L. 110–172, §\u202f11(a)(16)(B) , in introductory provisions, substituted “interests” for “interest” and “on or before” for “before”.\n2006—Subsec. (b)(1)(E) to (G).  Pub. L. 109–280, §\u202f1206(a)(1) , added subpar. (E) and redesignated former subpars. (E) and (F) as (F) and (G), respectively. See Codification note above.\nSubsec. (b)(2).  Pub. L. 109–280, §\u202f1206(a)(2) , reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows: “In the case of a corporation, the total deductions under subsection (a) for any taxable year shall not exceed 10 percent of the taxpayer’s taxable income computed without regard to—\n“(A) this section,\n“(B) part VIII (except section 248),\n“(C) section 199,\n“(D) any net operating loss carryback to the taxable year under section 172, and\n“(E) any capital loss carryback to the taxable year under section 1212(a)(1).”\nSee Codification note above.\nSubsec. (d)(2).  Pub. L. 109–280, §\u202f1206(b)(1) , substituted “subsection (b)(2)(A)” for “subsection (b)(2)” wherever appearing. See Codification note above.\nSubsec. (e)(1)(A).  Pub. L. 109–222  inserted “(determined without regard to section 1221(b)(3))” after “long-term capital gain”.\nSubsec. (e)(1)(B)(i).  Pub. L. 109–280, §\u202f1215(a)(1) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “of tangible personal property, if the use by the donee is unrelated to the purpose or function constituting the basis for its exemption under section 501 (or, in the case of a governmental unit, to any purpose or function described in subsection (c)),”. See Codification note above.\nSubsec. (e)(1)(B)(iv).  Pub. L. 109–280, §\u202f1214(a) , added cl. (iv). See Codification note above.\nSubsec. (e)(3)(C)(iv).  Pub. L. 109–280, §\u202f1202(a) , substituted “2007” for “2005”. See Codification note above.\nSubsec. (e)(3)(D)(iv).  Pub. L. 109–280, §\u202f1204(a) , substituted “2007” for “2005”. See Codification note above.\nSubsec. (e)(4)(B)(ii).  Pub. L. 109–432, §\u202f116(b)(1)(A) , inserted “or assembled” after “constructed”.\nSubsec. (e)(4)(B)(iii).  Pub. L. 109–432, §\u202f116(b)(1)(B) , inserted “or assembly” after “construction”.\nSubsec. (e)(6)(B)(ii).  Pub. L. 109–432, §\u202f116(b)(2)(A) , inserted “or assembled” after “constructed” and “or assembling” after “construction”.\nSubsec. (e)(6)(D).  Pub. L. 109–432, §\u202f116(b)(2)(B) , inserted “or assembled” after “constructed” in introductory provisions and “or assembly” after “construction” in cl. (i).\nSubsec. (e)(6)(G).  Pub. L. 109–432, §\u202f116(a)(1) , substituted “2007” for “2005”.\nSubsec. (e)(7).  Pub. L. 109–280, §\u202f1215(a)(2) , added par. (7). See Codification note above.\nSubsec. (f)(11)(E).  Pub. L. 109–280, §\u202f1219(c)(1) , amended heading and text of subpar. (E) generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the term ‘qualified appraisal’ means, with respect to any property, an appraisal of such property which is treated for purposes of this paragraph as a qualified appraisal under regulations or other guidance prescribed by the Secretary.” See Codification note above.\nSubsec. (f)(13).  Pub. L. 109–280, §\u202f1213(c) , added par. (13). See Codification note above.\nSubsec. (f)(14).  Pub. L. 109–280, §\u202f1213(d) , added par. (14). See Codification note above.\nSubsec. (f)(15).  Pub. L. 109–280, §\u202f1214(b) , added par. (15). See Codification note above.\nSubsec. (f)(16).  Pub. L. 109–280, §\u202f1216(a) , added par. (16). See Codification note above.\nSubsec. (f)(17).  Pub. L. 109–280, §\u202f1217(a) , added par. (17). See Codification note above.\nSubsec. (f)(18).  Pub. L. 109–280, §\u202f1234(a) , added par. (18). See Codification note above.\nSubsec. (h)(4)(B).  Pub. L. 109–280, §\u202f1213(a)(1) , added subpar. (B). Former subpar. (B) redesignated (C).\nSubsec. (h)(4)(C).  Pub. L. 109–280, §\u202f1213(a)(1) , (b), redesignated subpar. (B) as (C), struck out “any building, structure, or land area which” after “means” in introductory provisions, inserted “any building, structure, or land area which” before “is listed” in cl. (i), and inserted “any building which” before “is located” in cl. (ii). See Codification note above.\nSubsecs. ( o ), (p).  Pub. L. 109–280, §\u202f1218(a) , added subsec. ( o ) and redesignated former subsec. ( o ) as (p). See Codification note above.\n2005—Subsec. (b)(2)(C) to (E).  Pub. L. 109–135, §\u202f403(a)(16) , added subpar. (C) and redesignated former subpars. (C) and (D) as (D) and (E), respectively.\nSubsec. (e)(3)(C).  Pub. L. 109–73, §\u202f305(a) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (e)(3)(D).  Pub. L. 109–73, §\u202f306(a) , added subpar. (D). Former subpar. (D) redesignated (E).\nPub. L. 109–73, §\u202f305(a) , redesignated subpar. (C) as (D).\nSubsec. (e)(3)(E).  Pub. L. 109–73, §\u202f306(a) , redesignated subpar. (D) as (E).\nSubsec. (f)(12)(B)(v), (vi).  Pub. L. 109–135, §\u202f403(gg) , added cls. (v) and (vi).\n2004—Subsec. (e)(1)(B)(iii).  Pub. L. 108–357, §\u202f882(a) , added cl. (iii).\nSubsec. (e)(6)(G).  Pub. L. 108–311, §\u202f306(a) , substituted “2005” for “2003”.\nSubsec. (f)(10)(A).  Pub. L. 108–357, §\u202f413(c)(30) , struck out “556(b)(2),” after “545(b)(2),” in introductory provisions.\nSubsec. (f)(11).  Pub. L. 108–357, §\u202f883(a) , added par. (11).\nSubsec. (f)(11)(A)(ii)(I).  Pub. L. 108–357, §\u202f882(d) , inserted “subsection (e)(1)(B)(iii) or” before “section 1221(a)(1)”.\nSubsec. (f)(12).  Pub. L. 108–357, §\u202f884(a) , added par. (12).\nSubsec. (g)(1).  Pub. L. 108–311, §\u202f207(15) , inserted “(determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof)” after “section 152” in introductory provisions.\nSubsec. (g)(3).  Pub. L. 108–311, §\u202f207(16) , substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.\nSubsec. (m).  Pub. L. 108–357, §\u202f882(b) , added subsec. (m). Former subsec. (m) redesignated (n).\nSubsec. (n).  Pub. L. 108–357, §\u202f335(a) , added subsec. (n). Former subsec. (n) redesignated ( o ).\nPub. L. 108–357, §\u202f882(b) , redesignated subsec. (m) as (n). Amendment was executed before the amendment by  Pub. L. 108–357, §\u202f335(a) . See note below.\nSubsec. ( o ).  Pub. L. 108–357, §\u202f335(a) , redesignated subsec. (n) as ( o ).\n2003—Subsec. (e)(6)(B)(i)(III).  Pub. L. 108–81  substituted “section 213(1)(A) of the Library Services and Technology Act ( 20 U.S.C. 9122(1)(A) )” for “section 213(2)(A) of the Library Services and Technology Act ( 20 U.S.C. 9122(2)(A) ”.\n2002—Subsec. (e)(6)(B)(i)(III).  Pub. L. 107–147, §\u202f417(7) , substituted “2000),” for “ 2000,”.\nSubsec. (e)(6)(B)(iv).  Pub. L. 107–147, §\u202f417(22) , provided that the amendment made by section 165(b)(1) of the Community Renewal Tax Relief Act of 2000 [ Pub. L. 106–554, §\u202f1(a)(7)[title I, §\u202f165(b)(1)] ] shall be applied as if it struck “in any of the grades K–12”. See 2000 Amendment note below.\n2001—Subsec. (e)(1).  Pub. L. 107–16, §\u202f542(e)(2)(B) , inserted at end “For purposes of this paragraph, the determination of whether property is a capital asset shall be made without regard to the exception contained in section 1221(a)(3)(C) for basis determined under section 1022.”\n2000—Subsec. (e)(6).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(b)(2)] , substituted “educational purposes” for “elementary or secondary school purposes” in heading.\nSubsec. (e)(6)(A), (B).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(a)(1)] , substituted “qualified computer contribution” for “qualified elementary or secondary educational contribution” in subpar. (A) and in heading and introductory provisions of subpar. (B).\nSubsec. (e)(6)(B)(i)(III).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(a)(2)] , added subcl. (III).\nSubsec. (e)(6)(B)(ii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(a)(3)] , substituted “3 years” for “2 years”.\nSubsec. (e)(6)(B)(iv).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(b)(1)] , which directed the amendment of cl. (iv) by striking “in any grades of the K–12”, was executed by striking out “in any of the grades K–12” after “educational purposes”. See 2002 Amendment note above.\nSubsec. (e)(6)(B)(viii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(d)] , added cl. (viii).\nSubsec. (e)(6)(C).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(a)(1)] , substituted “qualified computer contribution” for “qualified elementary or secondary educational contribution” in introductory provisions.\nSubsec. (e)(6)(D), (E).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(e)] , added subpar. (D) and redesignated former subpar. (D) as (E). Former subpar. (E) redesignated (F).\nSubsec. (e)(6)(F).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(e)] , redesignated subpar. (E) as (F). Former subpar. (F) redesignated (G).\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(c)] , substituted “ December 31, 2003 ” for “ December 31, 2000 ”.\nSubsec. (e)(6)(G).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(e)] , redesignated subpar. (F) as (G).\n1999—Subsec. (e)(3)(A), (4)(B).  Pub. L. 106–170, §\u202f532(c)(1)(A) , (B), substituted “section 1221(a)” for “section 1221”.\nSubsec. (f)(10).  Pub. L. 106–170, §\u202f537(a) , added par. (10).\n1998—Subsec. (e)(5)(D).  Pub. L. 105–277  struck out heading and text of subpar. (D). Text read as follows: “This paragraph shall not apply to contributions made—\n“(i) after  December 31, 1994 , and before  July 1, 1996 , or\n“(ii) after  June 30, 1998 .”\nSubsec. (e)(6)(B)(iv).  Pub. L. 105–206, §\u202f6004(e)(2) , substituted “function of the donee” for “function of the organization or entity”.\nSubsec. (e)(6)(B)(vi), (vii).  Pub. L. 105–206, §\u202f6004(e)(1) , substituted “donee’s” for “entity’s”.\nSubsec. (e)(6)(C)(ii)(I).  Pub. L. 105–206, §\u202f6004(e)(3) , substituted “a donee” for “an entity”.\nSubsec. (e)(6)(F).  Pub. L. 105–206, §\u202f6004(e)(4) , substituted “2000” for “1999”.\n1997—Subsec. (e)(5)(D)(ii).  Pub. L. 105–34, §\u202f602(a) , substituted “ June 30, 1998 ” for “ May 31, 1997 ”.\nSubsec. (e)(6).  Pub. L. 105–34, §\u202f224(a) , added par. (6).\nSubsec. (h)(5)(B)(ii).  Pub. L. 105–34, §\u202f508(d) , amended heading and text of cl. (ii) generally. Prior to amendment, text read as follows: “With respect to any contribution of property in which the ownership of the surface estate and mineral interests were separated before  June 13, 1976 , and remain so separated, subparagraph (A) shall be treated as met if the probability of surface mining occurring on such property is so remote as to be negligible.”\nSubsec. (i).  Pub. L. 105–34, §\u202f973(a) , amended heading and text of subsec. (i) generally. Prior to amendment, text read as follows: “For purposes of computing the deduction under this section for use of a passenger automobile the standard mileage rate shall be 12 cents per mile.”\n1996—Subsec. (e)(1).  Pub. L. 104–188, §\u202f1316(b) , inserted at end “For purposes of applying this paragraph in the case of a charitable contribution of stock in an S corporation, rules similar to the rules of section 751 shall apply in determining whether gain on such stock would have been long-term capital gain if such stock were sold by the taxpayer.”\nSubsec. (e)(5)(D).  Pub. L. 104–188, §\u202f1206(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “This paragraph shall not apply to contributions made after  December 31, 1994 .”\n1993—Subsec. (f)(8).  Pub. L. 103–66, §\u202f13172(a) , added par. (8).\nSubsec. (f)(9).  Pub. L. 103–66, §\u202f13222(b) , added par. (9).\n1990—Subsec. (h)(4)(B)(ii).  Pub. L. 101–508, §\u202f11813(b)(10) , substituted “section 47(c)(3)(B)” for “section 48(g)(3)(B)”.\nSubsec. (i).  Pub. L. 101–508, §\u202f11801(a)(11) , (c)(5), redesignated subsec. (j) as (i) and struck out former subsec. (i) which related to rule for nonitemization of deductions, applicable percentage for individuals, limitation for taxable years beginning before 1985, and termination.\nSubsecs. (j) to (n).  Pub. L. 101–508, §\u202f11801(c)(5) , redesignated subsecs. (j) to (n) as (i) to (m), respectively.\n1988—Subsecs. (m), (n).  Pub. L. 100–647  added subsec. (m) and redesignated former subsec. (m) as (n).\n1987—Subsec. (c)(2)(D).  Pub. L. 100–203  inserted “(or in opposition to)” after “on behalf of”.\n1986—Subsec. (b)(1)(C)(iv).  Pub. L. 99–514, §\u202f1831 , substituted “this paragraph” for “this subparagraph”.\nSubsec. (e)(1)(B).  Pub. L. 99–514, §\u202f301(b)(2) , in closing provisions, struck out “40 percent ( 28 ⁄ 46  in the case of a corporation) of” before “the amount of gain”.\nSubsec. (e)(4)(B)(i).  Pub. L. 99–514, §\u202f231(f) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the contribution is to an educational organization which is described in subsection (b)(1)(A)(ii) of this section and which is an institution of higher education (as defined in section 3304(f)),”.\nSubsecs. (k) to (m).  Pub. L. 99–514, §\u202f142(d) , added subsec. (k) and redesignated former subsecs. (k) and ( l ) as ( l ) and (m), respectively.\n1984—Subsec. (a)(3).  Pub. L. 98–369, §\u202f174(b)(5)(A) , substituted “section 267(b) or 707(b)” for “section 267(b)”.\nSubsec. (b)(1)(A)(vii).  Pub. L. 98–369, §\u202f301(c)(2)(A) , substituted “subparagraph (E)” for “subparagraph (D)”.\nSubsec. (b)(1)(B).  Pub. L. 98–369, §\u202f301(a)(2) , inserted at end “If the aggregate of such contributions exceeds the limitation of the preceding sentence, such excess shall be treated (in a manner consistent with the rules of subsection (d)(1)) as a charitable contribution (to which subparagraph (A) does not apply) in each of the 5 succeeding taxable years in order of time.”\nSubsec. (b)(1)(B)(i).  Pub. L. 98–369, §\u202f301(a)(1) , substituted “30 percent” for “20 percent”.\nSubsec. (b)(1)(C).  Pub. L. 98–369, §\u202f301(c)(2)(B) , inserted “described in subparagraph (A)” in subpar. (C) heading, and in text of cl. (i) substituted “In the case of charitable contributions described in subparagraph (A) of capital gain property to which subsection (e)(1)(B) does not apply, the total amount of contributions of such property which may be taken into account under subsection (a) for any taxable year shall not exceed 30 percent of the taxpayer’s contribution base for such year. For purposes of this subsection, contributions of capital gain property to which this subparagraph applies shall be taken into account after all other charitable contributions (other than charitable contributions to which subparagraph (D) applies)” for “In the case of charitable contributions of capital gain property to which subsection (e)(1)(B) does not apply, the total amount of contributions of such property which may be taken into account under subsection (a) for any taxable year shall not exceed 30 percent of the taxpayer’s contribution base for such year. For purposes of this subsection, contributions of capital gain property to which this paragraph applies shall be taken into account after all other charitable contributions”.\nSubsec. (b)(1)(D) to (F).  Pub. L. 98–369, §\u202f301(c)(1) , added subpar. (D) and redesignated former subpars. (D) and (E) as (E) and (F), respectively.\nSubsec. (e)(1).  Pub. L. 98–369, §\u202f492(b)(1)(A) , struck out in provision following subpar. (B) “1251(c),” after “1250(a)”.\nSubsec. (e)(1)(B)(ii).  Pub. L. 98–369, §\u202f301(c)(2)(C) , substituted “subsection (b)(1)(E)” for “subsection (b)(1)(D)”.\nSubsec. (e)(3)(C).  Pub. L. 98–369, §\u202f492(b)(1)(B) , struck out “1251,” after “1250,”.\nSubsec. (e)(5).  Pub. L. 98–369, §\u202f301(b) , added par. (5).\nSubsec. (f)(7).  Pub. L. 98–369, §\u202f1022(b) , added par. (7).\nSubsec. (h)(5)(B).  Pub. L. 98–369, §\u202f1035(a) , designated existing provisions as cl. (i), inserted “Except as provided in clause (ii)”, and added cl. (ii).\nSubsec. (j).  Pub. L. 98–369, §\u202f1031(a) , added subsec. (j). Former subsec. (j) redesignated (k).\nSubsec. (k).  Pub. L. 98–369, §\u202f1031(a) , redesignated subsec. (j) as (k). Former subsec. (k) redesignated ( l ).\nSubsec. ( l ).  Pub. L. 98–369, §\u202f1032(b)(1) , added par. (1) and redesignated former pars. (1) to (8) as (2) to (9), respectively.\nPub. L. 98–369, §\u202f1031(a) , redesignated subsec. (k) as ( l ).\n1983—Subsec. (h)(4)(B)(ii).  Pub. L. 97–448  substituted “section 48(g)(3)(B)” for “section 191(d)(2)”.\nSubsec. (k)(8).  Pub. L. 97–473  added par. (8).\n1982—Subsec. (c)(2).  Pub. L. 97–248  inserted provision that rules similar to the rules of  section 501(j) of this title  shall apply for purposes of this paragraph.\nSubsec. (e)(3)(A).  Pub. L. 97–354, §\u202f5(a)(21)(A) , substituted “an S corporation” for “an electing small business corporation within the meaning of section 1371(b)”.\nSubsec. (e)(4)(D)(i).  Pub. L. 97–354, §\u202f5(a)(21)(B) , substituted “an S corporation” for “an electing small business corporation (as defined in section 1371(b))”.\nSubsec. (k)(7).  Pub. L. 97–258  substituted “ section 4043 of title 18 , United States Code” for “ section 2 of the Act of May 15, 1952 , as amended by the Act of  July 9, 1952  ( 31 U.S.C. 725s–4 )”.\n1981—Subsec. (b)(2).  Pub. L. 97–34, §\u202f263(a) , increased to 10 from 5 percent deduction allowable to a corporation in any taxable year for charitable contributions.\nSubsec. (e)(4).  Pub. L. 97–34, §\u202f222(a) , added par. (4).\nSubsec. (i).  Pub. L. 97–34, §\u202f121(a) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsecs. (j), (k).  Pub. L. 97–34, §\u202f121(a) , redesignated former subsecs. (i) and (j) as (j) and (k), respectively.\n1980—Subsec. (f)(3).  Pub. L. 96–541, §\u202f6(a) , reenacted subpar. (B), cls. (i) and (ii), substituted cl. (B)(iii) relating to qualified conservation contribution for prior cl. (B)(iii) relating to contribution of a lease on, option to purchase, or easement with respect to real property granted in perpetuity to a subsec. (b)(1)(A) organization exclusively for conservation purposes, deleted cl. (B)(iv) respecting contribution of a remainder interest in real property granted to a subsec. (b)(1)(A) organization exclusively for conservation purposes, and deleted subpar. (C) definition of “conservation purposes”, now covered in an expanded subsec. (h)(4)(A).\nSubsecs. (h), (i).  Pub. L. 96–541, §\u202f6(b) , added subsec. (h) and redesignated former subsec. (h) as (i). Former subsec. (i) redesignated (j).\nSubsec. (i)(6).  Pub. L. 96–465 , among other changes, inserted references to Director of the International Communication Agency and the Director of the United States International Development Cooperation Agency, and substituted reference to section 25 of the State Department Basic Authorities Act of 1956 for reference to section 1021(e) of the Foreign Service Act of 1946.\nSubsec. (j).  Pub. L. 96–541, §\u202f6(b) , redesignated former subsec. (i) as (j).\n1978—Subsec. (e)(1)(B).  Pub. L. 95–600  substituted “40 percent” for “50 percent” and “ 28 ⁄ 46 ” for “62½ percent”.\n1977—Subsec. (f)(3)(B)(iii).  Pub. L. 95–30  substituted “real property granted in perpetuity to an organization” for “real property of not less than 30 years’ duration granted to an organization”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(1)(A)(vii).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(iii) , substituted “subparagraph (D)” for “subparagraph (E)” after “described in”.\nSubsec. (b)(1)(B)(ii).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(iv) , substituted “subparagraph (C)” for “subparagraph (D)” after “without regard to”.\nSubsec. (b)(1)(C).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(ii) , struck out subpar. (C) which related to unlimited deductions for certain individuals, redesignated subpar. (D) as (C) and, as so redesignated, §\u202f1906(b)(13)(A), struck out “or his delegate” after “Secretary” in cl. (iii).\nSubsec. (b)(1)(D) to (F).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(ii) , redesignated subpars. (D) to (F) as (C) to (E), respectively.\nSubsec. (b)(2).  Pub. L. 95–455, §\u202f1052(c)(2) , struck out subpar. (D) which related to a special deduction for Western Hemisphere trade corporations, and redesignated subpar. (E) as (D).\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(v) , substituted “subsection (g)” for “subsection (h)” after “amount treated under”.\nSubsec. (c)(2)(B).  Pub. L. 94–455, §\u202f1313(b)(1) , inserted “or to foster national or international amateur sports competition (but only if no part of its activities involves the provision of athletic facilities or equipment)” after “or educational purposes”.\nSubsec. (c)(2)(D).  Pub. L. 94–445, §\u202f1307(d)(1)(B)(i) , substituted “which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation” for “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation” after “(D)”.\nSubsec. (d)(1)(A).  Pub. L. 94–455, §\u202f1901(a)(28)(B) , struck out “(30 percent in the case of a contribution year beginning before  January 1, 1970 )” after “exceeds 50 percent”.\nSubsec. (e)(1).  Pub. L. 94–455, §\u202f205(c)(1)(A) , substituted “1252(a), or 1254(a)” for “or 1252(a)” after “1251(c)”.\nSubsec. (e)(1)(B)(ii).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(vi) , substituted “subsection (b)(1)(D)” for “subsection (b)(1)(E)” after “foundation described in”.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(3).  Pub. L. 94–455, §\u202f2135(a) , added par. (3).\nSubsec. (f)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f)(3).  Pub. L. 94–455, §\u202f2124(e)(1) , added subpars. (B)(iii), (iv), and (C).\nSubsec. (f)(4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f)(6).  Pub. L. 94–455 , §§\u202f1307(c), 1901(a)(28)(A)(i), added par. (6). Former par. (6), which related to the partial reduction of unlimited deduction and definitions for transitional income and deduction percentages, was struck out.  Section 1901(a)(28)(A)(i) of Pub. L. 94–455  struck out par. (6) a second time.\nSubsec. (g).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(i) , struck out subsec. (g) which related to application of unlimited charitable contribution deductions allowed for taxable years beginning before  January 1, 1975 , and redesignated subsecs. (h), (i), and (j) as (g), (h), and (i), respectively. Section 1901(a)(28)(A)(i) also struck out former subsec. (f)(6) but this direction was not executed as such former subsec. (f)(6) had previously been stricken by  section 1307(c) of Pub. L. 94–455 .\nSubsec. (g)(1)(B).  Pub. L. 94–455, §\u202f1901(b)(8)(A) , substituted “educational organization described in section 170(b)(1)(A)(ii)” for “educational institution (as defined in section 151(e)(4)” after “grade at an”.\nSubsec. (h).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(i) , (C), redesignated subsec. (i) as (h), and struck out “ 64 Stat. 996 ” after “Act of 1950”. Former subsec. (h) redesignated (g).\nSubsec. (i).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(i) , (D), redesignated subsec. (j) as (i) and substituted “6973 of title 10, United States Code” for “3 of the Act of  March 31, 1944  ( 58 Stat. 135 ;  34 U.S.C. 1115b )” after “see section” in par. (5); struck out par. (6) relating to gifts to library of Post Office Department; struck out “ 60 Stat. 924 ” after “1946” in par. (7); substituted “as amended by the Act of  July 9, 1952  ( 3 U.S.C. 725s–4 )” for “( 66 Stat. 73 , as amended by Act of  July 9, 1952 ,  66 Stat. 479 ,  31 U.S.C. 725s–4 )” after “ May 15, 1952 ” in par. (8); and redesignated pars. (7) and (8) as pars. (6) and (7), respectively. Former subsec. (i) redesignated (h).\nSubsec. (j).  Pub. L. 94–455, §\u202f1901(a)(28)(A)(i) , redesignated subsec. (j) as (i).\n1969—Subsec. (a)(3).  Pub. L. 91–172, §\u202f201(a)(1)(B) , added par. (3).\nSubsec. (b).  Pub. L. 91–172, §\u202f201(a)(1)(B) , (h)(1), increased the general limitation on the charitable contributions deduction for individual taxpayers from 30 percent of adjusted gross income to 50 percent of his contribution base and provided that where a taxpayer makes a contribution to a public charity of property which has appreciated in value the taxpayer could deduct such contributions of property under the 50 percent limitation if he elects to take the unrealized appreciation in value into account for the tax purposes, the unlimited charitable deduction is phased out over a 5-year period and contributions to a private operating foundation and contributions to a private nonoperating foundation distributing such contributions to public charities or private operating foundations within two and half months following the year of receipt are also subjected to 50 percent limitation (30 percent in the case of gifts of appreciated property), and, in par. (1)(C), inserted provisions relating to the determination of the amount of charitable contributions and taxes paid by a married individual who previously filed a joint return with a former deceased spouse.\nSubsec. (c).  Pub. L. 91–172, §\u202f201(a)(1)(B) , struck out references to “Territory” in pars. (1) and (2)(A), and inserted reference to participation in or intervention in any political campaign on behalf of any candidate for public office in par. (2)(D).\nSubsec. (d).  Pub. L. 91–172, §\u202f201(a)(1)(B) , added subsec. (d) consisting of provisions substantially transferred from subsec. (b) in the general amendment of subsec. (b) by  Pub. L. 91–172 . Former subsec. (d) redesignated (b).\nSubsec. (e).  Pub. L. 91–172, §\u202f201(a)(1)(B) , substituted provisions covering certain contributions of ordinary income and capital gain property for provisions setting out a special rule for charitable contributions.\nSubsec. (f).  Pub. L. 91–172, §\u202f201(a)(1)(B) , substituted provisions for the disallowance of the deduction in specified cases for provision covering future interests in tangible personal property.\nSubsec. (g).  Pub. L. 91–172, §\u202f201(a)(2)(A) , substituted “subsection (d)(1)” for “subsection (b)(5)” in two places in par. (1) and struck out par. (2)(B) covering contributions to organizations substantially more than half of the assets and the total income were devoted to charitable purposes.\nSubsec. (h).  Pub. L. 91–172, §\u202f201(a)(1)(A) , redesignated subsec. (d) as (h). Former subsec. (h) redesignated (i).\nSubsec. (i).  Pub. L. 91–172 , §§\u202f101(j)(2), 201(a)(1)(A), redesignated former subsec. (h) as (i), struck out par. (1) covering disallowance of deductions for gifts to charitable organizations engaging in prohibited transactions, and removed the par. (2) designation from the provisions covering disallowance of deductions for use of communist controlled organizations. Former subsec. (i) redesignated (j).\nSubsec. (j).  Pub. L. 91–172, §\u202f201(a)(1)(A) , redesignated former subsec. (i) as (j).\n1966—Subsec. (e).  Pub. L. 89–570  inserted reference to section 617(d)(1).\n1964—Subsec. (b)(1)(A)(v), (vi), (2), (5).  Pub. L. 88–272, §\u202f209  (a), (c)(1), (d)(1), added cls. (v) and (vi) in par. (1)(A), and par. (5), and in par. (2), extended the 2-year carryforward of unused charitable contributions to 5 years and changed the method of computation by including the aggregate of the excess contributions made in taxable years before the contribution year, in cl. (i), and references to third, fourth or fifth succeeding years in cl. (ii).\nSubsec. (e).  Pub. L. 88–272, §\u202f231(b)(1) , substituted “certain property” for “section 1245 property” in heading, and inserted reference to section 1250(a) in text.\nSubsec. (f).  Pub. L. 88–272, §\u202f209(e) , added subsec. (f). Former subsec. (f) redesignated (h).\nSubsec. (g).  Pub. L. 88–272, §\u202f209(b) , added subsec. (g). Former subsec. (g) redesignated (i).\nSubsecs. (h), (i).  Pub. L. 88–272, §\u202f209(e) , redesignated former subsecs. (f) and (g) as (h) and (i), respectively.\n1962—Subsec. (b)(1)(A)(iv).  Pub. L. 87–858, §\u202f2(a) , added cl. (iv).\nSubsec. (b)(1)(B).  Pub. L. 87–858, §\u202f2(b) , substituted “any charitable contributions described in subparagraph (A)” for “any charitable contributions to the organizations described in clauses (i), (ii), and (iii)”.\nSubsecs. (e) to (g).  Pub. L. 87–834  added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively.\n1960—Subsec. (c).  Pub. L. 86–779, §\u202f7(a)(1) , inserted sentence additionally defining “charitable contribution” for purposes of the section.\nSubsecs. (d) to (f).  Pub. L. 86–779, §\u202f7(a)(2) , added subsec. (d) and redesignated former subsecs. (d) and (e) as (e) and (f), respectively.\n1958—Subsec. (b)(1)(C).  Pub. L. 85–866, §\u202f10(a) , inserted sentence allowing substitution, in lieu of amount of tax paid during year, amount of tax paid in respect of such year, provided amount so included in the year in respect of which payment was made be not included in any other year.\nSubsec. (b)(3).  Pub. L. 85–866, §\u202f11 , added par. (3).\nSubsec. (b)(4).  Pub. L. 85–866, §\u202f12 , added par. (4).\n1956—Subsec. (b)(1)(A)(iii). Act  Aug. 7, 1956 , §\u202f1, provided for the allowance, as deductions, of contributions to medical research organizations.\nInternational Communication Agency, and Director thereof, redesignated United States Information Agency, and Director thereof, by  section 303 of Pub. L. 97–241 , title III,  Aug. 24, 1982 ,  96 Stat. 291 , set out as a note under  section 1461 of Title 22 , Foreign Relations and Intercourse. United States Information Agency (other than Broadcasting Board of Governors and International Broadcasting Bureau) abolished and functions transferred to Secretary of State, see sections 6531 and 6532 of Title 22.\nPub. L. 118–146, §\u202f2(c) ,  Dec. 12, 2024 ,  138 Stat. 1673 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 12, 2024 ].”\nPub. L. 117–328, div. T, title VI, §\u202f605(c) ,  Dec. 29, 2022 ,  136 Stat. 5395 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 6662, 6664, and 6751 of this title] shall apply to contributions made after the date of the enactment of this Act [ Dec. 29, 2022 ]. \n \n “(2)   No inference .— No inference is intended as to the appropriate treatment of contributions made in taxable years ending on or before the date specified in paragraph (1), or as to any contribution for which a deduction is not disallowed by reason of section 170(h)(7) of the Internal Revenue Code of 1986, as added by this section.”\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 212(d) of div. EE of Pub. L. 116–260 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 115–232  effective  Feb. 1, 2019 , with provision for the coordination of amendments and special rule for certain redesignations, see  section 800 of Pub. L. 115–232 , set out as a note preceding  section 3001 of Title 10 , Armed Forces.\nAmendment by  section 11011(d)(5) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as a note under  section 62 of this title .\nPub. L. 115–97, title I, §\u202f11023(b) ,  Dec. 22, 2017 ,  131 Stat. 2075 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions in taxable years beginning after  December 31, 2017 .”\nAmendment by  section 13305(b)(2) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nPub. L. 115–97, title I, §\u202f13704(b) ,  Dec. 22, 2017 ,  131 Stat. 2169 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13705(b) ,  Dec. 22, 2017 ,  131 Stat. 2169 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f111(c) ,  Dec. 18, 2015 ,  129 Stat. 3047 , provided that: \n “(1)   Extension .— The amendments made by subsection (a) [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2014 . \n \n “(2)   Modification .— The amendments made by subsection (b) [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title I, §\u202f113(c) ,  Dec. 18, 2015 ,  129 Stat. 3048 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to contributions made after  December 31, 2014 . \n \n “(2)   Modifications .— The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title III, §\u202f331(c) ,  Dec. 18, 2015 ,  129 Stat. 3104 , provided that:  “The amendments made by this section [amending this section and  section 501 of this title ] shall apply to contributions made on and after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–41, title II, §\u202f2006(a)(3) ,  July 31, 2015 ,  129 Stat. 457 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this subsection [amending this section and sections 563, 1354, 6072, 6167, 6425, and 6655 of this title] shall apply to returns for taxable years beginning after  December 31, 2015 . \n \n “(B)   Special rule for c corporations with fiscal years ending on june 30 .— In the case of any C corporation with a taxable year ending on June 30, the amendments made by this subsection shall apply to returns for taxable years beginning after  December 31, 2025 .”\nPub. L. 113–295, div. A, title I, §\u202f106(c) ,  Dec. 19, 2014 ,  128 Stat. 4013 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2013 .”\nPub. L. 113–295, div. A, title I, §\u202f126(b) ,  Dec. 19, 2014 ,  128 Stat. 4017 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  December 31, 2013 .”\nAmendment by  section 221(a)(28) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title II, §\u202f206(c) ,  Jan. 2, 2013 ,  126 Stat. 2324 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2011 .”\nPub. L. 112–240, title III, §\u202f314(b) ,  Jan. 2, 2013 ,  126 Stat. 2330 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  December 31, 2011 .”\nAmendment by  section 301(a) of Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nPub. L. 111–312, title VII, §\u202f723(c) ,  Dec. 17, 2010 ,  124 Stat. 3316 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2009 .”\nPub. L. 111–312, title VII, §\u202f740(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  December 31, 2009 .”\nPub. L. 111–312, title VII, §\u202f741(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  December 31, 2009 .”\nPub. L. 111–312, title VII, §\u202f742(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f321(b) ,  Oct. 3, 2008 ,  122 Stat. 3873 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made during taxable years beginning after  December 31, 2007 .”\nPub. L. 110–343, div. C, title III, §\u202f323(a)(2) ,  Oct. 3, 2008 ,  122 Stat. 3874 , provided that:  “The amendment made by this subsection [amending this section] shall apply to contributions made after  December 31, 2007 .”\nPub. L. 110–343, div. C, title III, §\u202f323(b)(2) ,  Oct. 3, 2008 ,  122 Stat. 3875 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 110–343, div. C, title III, §\u202f324(c) ,  Oct. 3, 2008 ,  122 Stat. 3875 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made after  December 31, 2007 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15302(b) ,  May 22, 2008 ,  122 Stat. 1501 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15302(b),  June 18, 2008 ,  122 Stat. 1664 , 2263, provided that:  “The amendments made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2007 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–172, §\u202f3(j) ,  Dec. 29, 2007 ,  121 Stat. 2475 , provided that:  “The amendments made by this section [amending this section and sections 408, 1366, 2055, 2522, 4940, 4958, 4962, 6104, 6695A, and 6696 of this title] shall take effect as if included in the provisions of the Pension Protection Act of 2006 [ Pub. L. 109–280 ] to which they relate.”\nPub. L. 109–432, div. A, title I, §\u202f116(a)(2) ,  Dec. 20, 2006 ,  120 Stat. 2941 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2005 .”\nPub. L. 109–432, div. A, title I, §\u202f116(b)(3) ,  Dec. 20, 2006 ,  120 Stat. 2941 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 109–280, title XII, §\u202f1202(b) ,  Aug. 17, 2006 ,  120 Stat. 1066 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  December 31, 2005 .”\nPub. L. 109–280, title XII, §\u202f1204(b) ,  Aug. 17, 2006 ,  120 Stat. 1066 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  December 31, 2005 .”\nPub. L. 109–280, title XII, §\u202f1206(c) ,  Aug. 17, 2006 ,  120 Stat. 1070 , provided that:  “The amendments made by this section [amending this section and  section 545 of this title ] shall apply to contributions made in taxable years beginning after  December 31, 2005 .”\nPub. L. 109–280, title XII, §\u202f1213(e) ,  Aug. 17, 2006 ,  120 Stat. 1076 , provided that: \n “(1)   Special rules for buildings in registered historic districts .— The amendments made by subsection (a) [amending this section] shall apply to contributions made after  July 25, 2006 . \n \n “(2)   Disallowance of deduction for structures and land; reduction for rehabilitation credit .— The amendments made by subsections (b) and (d) [amending this section] shall apply to contributions made after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(3)   Filing fee .— The amendment made by subsection (c) [amending this section] shall apply to contributions made 180 days after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title XII, §\u202f1214(c) ,  Aug. 17, 2006 ,  120 Stat. 1077 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  July 25, 2006 .”\nPub. L. 109–280, title XII, §\u202f1215(d)(1) ,  Aug. 17, 2006 ,  120 Stat. 1079 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to contributions after  September 1, 2006 .”\nPub. L. 109–280, title XII, §\u202f1216(b) ,  Aug. 17, 2006 ,  120 Stat. 1080 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after the date of enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title XII, §\u202f1217(b) ,  Aug. 17, 2006 ,  120 Stat. 1080 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title XII, §\u202f1218(d) ,  Aug. 17, 2006 ,  120 Stat. 1083 , provided that:  “The amendments made by this section [amending this section and sections 2055 and 2522 of this title] shall apply to contributions, bequests, and gifts made after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title XII, §\u202f1219(e) ,  Aug. 17, 2006 ,  120 Stat. 1085 , provided that: \n “(1)   Misstatement penalties .— Except as provided in paragraph (3), the amendments made by subsection (a) [amending sections 6662 and 6664 of this title] shall apply to returns filed after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(2)   Appraiser provisions .— Except as provided in paragraph (3), the amendments made by subsections (b), (c), and (d) [enacting  section 6695A of this title  and amending this section, sections 6664 and 6696 of this title, and  section 330 of Title 31 , Money and Finance] shall apply to appraisals prepared with respect to returns or submissions filed after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(3)   Special rule for certain easements .— In the case of a contribution of a qualified real property interest which is a restriction with respect to the exterior of a building described in section 170(h)(4)(C)(ii) of the Internal Revenue Code of 1986, and an appraisal with respect to the contribution, the amendments made by subsections (a) and (b) [enacting  section 6695A of this title  and amending sections 6662, 6664, and 6696 of this title] shall apply to returns filed after  July 25, 2006 .”\nPub. L. 109–280, title XII, §\u202f1234(d) ,  Aug. 17, 2006 ,  120 Stat. 1101 , provided that:  “The amendments made by this section [amending this section and sections 2055 and 2522 of this title] shall apply to contributions made after the date which is 180 days after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–222, title II, §\u202f204(c) ,  May 17, 2006 ,  120 Stat. 350 , provided that:  “The amendments made by this section [amending this section and  section 1221 of this title ] shall apply to sales and exchanges in taxable years beginning after the date of the enactment of this Act [ May 17, 2006 ].”\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 109–73, title III, §\u202f305(b) ,  Sept. 23, 2005 ,  119 Stat. 2025 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made on or after  August 28, 2005 , in taxable years ending after such date.”\nPub. L. 109–73, title III, §\u202f306(b) ,  Sept. 23, 2005 ,  119 Stat. 2026 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made on or after  August 28, 2005 , in taxable years ending after such date.”\nPub. L. 108–357, title III, §\u202f335(b) ,  Oct. 22, 2004 ,  118 Stat. 1479 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to contributions made after  December 31, 2004 .”\nAmendment by  section 413(c)(30) of Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 108–357, title VIII, §\u202f882(f) ,  Oct. 22, 2004 ,  118 Stat. 1631 , provided that:  “The amendments made by this section [amending this section and  section 6050L of this title ] shall apply to contributions made after  June 3, 2004 .”\nPub. L. 108–357, title VIII, §\u202f883(b) ,  Oct. 22, 2004 ,  118 Stat. 1632 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  June 3, 2004 .”\nPub. L. 108–357, title VIII, §\u202f884(c) ,  Oct. 22, 2004 ,  118 Stat. 1634 , provided that:  “The amendments made by this section [enacting  section 6720 of this title  and amending this section] shall apply to contributions made after  December 31, 2004 .”\nAmendment by section 207(15), (16) of  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 108–311, title III, §\u202f306(b) ,  Oct. 4, 2004 ,  118 Stat. 1179 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2003 .”\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying after  Dec. 31, 2009 , see  section 542(f)(1) of Pub. L. 107–16 , set out as a note under  section 121 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f165(f)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–627, provided that:  “The amendments made by this section [amending this section] shall apply to contributions made after  December 31, 2000 .”\nPub. L. 106–170, title V, §\u202f532(d) ,  Dec. 17, 1999 ,  113 Stat. 1931 , provided that:  “The amendments made by this section [amending this section and sections 198, 263A, 267, 341, 367, 475, 543, 751, 775, 818, 856, 857, 864, 865, 871, 954, 988, 995, 1017, 1092, 1221, 1231, 1234, 1256, 1362, 1397B, 4662, and 7704 of this title] shall apply to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after the date of the enactment of this Act [ Dec. 17, 1999 ].”\nPub. L. 106–170, title V, §\u202f537(b) ,  Dec. 17, 1999 ,  113 Stat. 1938 , provided that: \n “(1)   In general .— Except as otherwise provided in this section [amending this section], the amendment made by this section shall apply to transfers made after  February 8, 1999 . \n \n “(2)   Excise tax .— Except as provided in paragraph (3) of this subsection, section 170(f)(10)(F) of the Internal Revenue Code of 1986 (as added by this section) shall apply to premiums paid after the date of the enactment of this Act [ Dec. 17, 1999 ]. \n \n “(3)   Reporting .— Clause (iii) of such section 170(f)(10)(F) shall apply to premiums paid after  February 8, 1999  (determined as if the tax imposed by such section applies to premiums paid after such date).”\nPub. L. 105–277, div. J, title I, §\u202f1004(a)(2) ,  Oct. 21, 1998 ,  112 Stat. 2681–888 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to contributions made after  June 30, 1998 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title II, §\u202f224(b) ,  Aug. 5, 1997 ,  111 Stat. 820 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title V, §\u202f508(e)(2) ,  Aug. 5, 1997 ,  111 Stat. 860 , provided that:  “The amendments made by subsections (c) and (d) [amending this section and  section 2032A of this title ] shall apply to easements granted after  December 31, 1997 .”\nPub. L. 105–34, title VI, §\u202f602(b) ,  Aug. 5, 1997 ,  111 Stat. 862 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to contributions made after  May 31, 1997 .”\nPub. L. 105–34, title IX, §\u202f973(b) ,  Aug. 5, 1997 ,  111 Stat. 898 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 104–188, title I, §\u202f1206(b) ,  Aug. 20, 1996 ,  110 Stat. 1776 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made after  June 30, 1996 .”\nPub. L. 104–188, title I, §\u202f1316(f) ,  Aug. 20, 1996 ,  110 Stat. 1787 , provided that:  “The amendments made by this section [amending this section and sections 404, 512, 1042, and 1361 of this title] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 103–66, title XIII, §\u202f13172(b) ,  Aug. 10, 1993 ,  107 Stat. 456 , provided that:  “The provisions of this section [amending this section] shall apply to contributions made on or after  January 1, 1994 .”\nAmendment by  section 13222(b) of Pub. L. 103–66  applicable to amounts paid or incurred after  Dec. 31, 1993 , see  section 13222(e) of Pub. L. 103–66  set out as a note under  section 162 of this title .\nAmendment by  section 11813(b)(10) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title VI, §\u202f6001(b) ,  Nov. 10, 1988 ,  102 Stat. 3684 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Waiver of statute of limitations .— If on the date of the enactment of this Act [ Nov. 10, 1988 ] (or at any time within 1 year after such date of enactment) refund or credit of any overpayment of tax resulting from the application of section 170(m) of the 1986 Code (as added by subsection (a)) is barred by any law or rule of law, refund or credit of such overpayment shall, nevertheless, be made or allowed if claim therefore [sic] is filed before the date 1 year after the date of the enactment of this Act.”\nPub. L. 100–203, title X, §\u202f10711(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–465 , provided that:  “The amendments made by this section [amending this section and sections 501, 504, 2055, 2106, and 2522 of this title] shall apply with respect to activities after the date of the enactment of this Act [ Dec. 22, 1987 ].”\nAmendment by  section 142(d) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 231(f) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nAmendment by  section 301(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  section 1831 of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 174(b)(5)(A) of Pub. L. 98–369 , applicable to transactions after  Dec. 31, 1983 , in taxable years ending after that date, see  section 174(c)(2)(A) of Pub. L. 98–369 , set out as a note under  section 267 of this title .\nPub. L. 98–369, div. A, title III, §\u202f301(d) ,  July 18, 1984 ,  98 Stat. 779 , provided that: \n “(1)   Subsections  (a)  and  (c).— The amendments made by subsections (a) and (c) [amending this section] shall apply to contributions made in taxable years ending after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending this section] shall apply to contributions made after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nPub. L. 98–369, div. A, title IV, §\u202f492(d) ,  July 18, 1984 ,  98 Stat. 854 , provided that:  “The amendments made by this section [amending this section and sections 341, 453B, 751, and 1252 of this title and repealing  section 1251 of this title ] shall apply to taxable years beginning after  December 31, 1983 .”\nAmendment by  section 1022(b) of Pub. L. 98–369  applicable to reformations after  Dec. 31, 1978 , except inapplicable to any reformation to which  section 2055(e)(3) of this title  as in effect before  July 18, 1984 , applies, see  section 1022(e)(1) of Pub. L. 98–369 , set out as a note under  section 2055 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1031(b) ,  July 18, 1984 ,  98 Stat. 1033 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 98–369, div. A, title X, §\u202f1032(c) ,  July 18, 1984 ,  98 Stat. 1034 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and sections 501, 2055, and 2522 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ July 18, 1984 ].”\nPub. L. 98–369, div. A, title X, §\u202f1035(b) ,  July 18, 1984 ,  98 Stat. 1042 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to contributions made after the date of the enactment of this Act [ July 18, 1984 ].”\nFor effective date of amendment by  Pub. L. 97–473 , see  section 204(1) of Pub. L. 97–473 , set out as an Effective Date note under  section 7871 of this title .\nAmendment by title I of  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–248  effective  Oct. 5, 1976 , see  section 286(c) of Pub. L. 97–248 , set out as a note under  section 501 of this title .\nPub. L. 97–34, title I, §\u202f121(d) ,  Aug. 13, 1981 ,  95 Stat. 197 , provided that:  “The amendments made by this section [amending this section and sections 3, 57, and 63 of this title] shall apply to contributions made after  December 31, 1981 , in taxable years beginning after such date.”\nPub. L. 97–34, title II, §\u202f222(b) ,  Aug. 13, 1981 ,  95 Stat. 248 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to charitable contributions made after the date of the enactment of this Act [ Aug. 13, 1981 ], in taxable years ending after such date.”\nPub. L. 97–34, title II, §\u202f263(b) ,  Aug. 13, 1981 ,  95 Stat. 264 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 96–541, §\u202f6(d) ,  Dec. 17, 1980 ,  94 Stat. 3208 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to transfers made after the date of the enactment of this Act [ Dec. 17, 1980 ] in taxable years ending after such date.”\nAmendment by  Pub. L. 96–465  effective  Feb. 15, 1981 , except as otherwise provided, see  section 2403 of Pub. L. 96–465 , set out as an Effective Date note under  section 3901 of Title 22 , Foreign Relations and Intercourse.\nPub. L. 95–600, title IV, §\u202f402(c)(2) ,  Nov. 6, 1978 ,  92 Stat. 2868 , provided that:  “The amendment made by subsection (b)(2) [amending this section by substituting “40 percent” for “50 percent”] shall apply to contributions made after  October 31, 1978 .”\nPub. L. 95–600, title IV, §\u202f403(d)(2) ,  Nov. 6, 1978 ,  92 Stat. 2869 , provided that:  “The amendment made by paragraph (1) of subsection (c) [amending this section by substituting “ 28 ⁄ 46 ” for “62½ percent”] shall apply to gifts made after  December 31, 1978 .”\nPub. L. 95–30, title III, §\u202f309(b)(1) ,  May 23, 1977 ,  91 Stat. 154 , as amended by  Pub. L. 96–541, §\u202f6(c) ,  Dec. 17, 1980 ,  94 Stat. 3207 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to contributions or transfers made after  June 13, 1977 .”\nPub. L. 94–455, title X, §\u202f1052(d) ,  Oct. 4, 1976 ,  90 Stat. 1648 , provided that:  “The amendments made by subsection (a) and paragraph (1) of subsection (c) [amending  section 922 of this title ] shall apply with respect to taxable years beginning after  December 31, 1975 . The amendments made by subsection (b) [repealing sections 921 and 922 of this title] and by subsection (c) (other than paragraph (1)) [amending this section and sections 172, 907, 1503, and 6091 of this title] shall apply with respect to taxable years beginning after  December 31, 1979 .”\nAmendment by section 1307 (d)(1)(B)(i), (c) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1307(e) of Pub. L. 94–455 , set out as a note under  section 501 of this title .\nAmendment by  section 1313(b)(1) of Pub. L. 94–455  effective  Oct. 5, 1976 , see  section 1313(e) of Pub. L. 94–455 , set out as a note under  section 501 of this title .\nAmendment by  section 1901(a)(28) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2124(e)(4) ,  Oct. 4, 1976 ,  90 Stat. 1920 , as amended by  Pub. L. 95–30, title III, §\u202f309(b)(2) ,  May 23, 1977 ,  91 Stat. 154 ;  Pub. L. 96–541, §\u202f6(c) ,  Dec. 17, 1980 ,  94 Stat. 3207 , provided that:  “The amendments made by this subsection [amending this section and sections 2055 and 2522 of this title] shall apply with respect to contributions or transfers made after  June 13, 1976 .”\nPub. L. 94–455, title XXI, §\u202f2135(b) ,  Oct. 4, 1976 ,  90 Stat. 1929 , provided that:  “The amendment made by this section [amending this section] applies to charitable contributions made after the date of enactment of this Act [ Oct. 4, 1976 ], in taxable years ending after such date.”\nAmendment by  section 101(j)(2) of Pub. L. 91–172  to take effect on  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nPub. L. 91–172, title II, §\u202f201(g) ,  Dec. 30, 1969 ,  83 Stat. 564 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1) (A)  Except as provided in subparagraphs (B) and (C), the amendments made by subsection (a) [amending this section and sections 545, 556, and 809 of this title] shall apply to taxable years beginning after  December 31, 1969 . \n \n “(B)  Subsections (e) and (f)(1) of section 170 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a)) shall apply to contributions paid after  December 31, 1969 , except that, with respect to a letter or memorandum or similar property described in section 1221(3) of such Code (as amended by section 514 of this Act), such subsection (e) shall apply to contributions paid after  July 25, 1969 . \n \n “(C)  Paragraphs (2), (3), and (4) of section 170(f) of such Code (as amended by subsection (a)) shall apply to transfers in trust and contributions made after  July 31, 1969 . \n \n “(D)  For purposes of applying section 170(d) of such Code (as amended by subsection (a)) with respect to contributions paid in a taxable year beginning before  January 1, 1970 , subsection (b)(1)(D), subsection (e), and paragraphs (1), (2), (3), and (4) of subsection (f) of section 170 of such Code shall not apply. \n \n \n “(2)  The amendments made by subsection (b) [amending  section 642 of this title ] shall apply with respect to amounts paid, permanently set aside, or to be used for a charitable purpose in taxable years beginning after  December 31, 1969 , except that section 642(c)(5) of the Internal Revenue Code of 1986 (as added by subsection (b)) shall apply to transfers in trust made after  July 31, 1969 . \n \n “(3)  The amendment made by subsection (c) [amending  section 673 of this title ] shall apply to transfers in trust made after  April 22, 1969 . \n \n “(4) (A)  Except as provided in subparagraphs (B) and (C), the amendments made by paragraphs (1) and (2) of subsection (d) [amending sections 2055 and 2126 of this title] shall apply in the case of decedents dying after  December 31, 1969 . \n \n “(B)  Such amendments shall not apply in the case of property passing under the terms of a will executed on or before  October 9, 1969 — “(i)  if the decedent dies before  October 9, 1972 , without having republished the will after  October 9, 1969 , by codicil or otherwise, \n \n “(ii)  if the decedent at no time after  October 9, 1969 , had the right to change the portions of the will which pertain to the passing of the property to, or for the use of, an organization described in section 2055(a) [ section 2055(a) of this title ], or \n \n “(iii)  if the will is not republished by codicil or otherwise before  October 9, 1972 , and the decedent is on such date and at all times thereafter under a mental disability to republish the will by codicil or otherwise. \n \n \n “(C)  Such amendments shall not apply in the case of property transferred in trust on or before  October 9, 1969 — “(i)  if the decedent dies before  October 9, 1972 , without having amended after  October 9, 1969 , the instrument governing the disposition of the property, \n \n “(ii)  if the property transferred was an irrevocable interest to, or for the use of, an organization described in section 2055(a), or \n \n “(iii)  if the instrument governing the disposition of the property was not amended by the decedent before  October 9, 1972 , and the decedent is on such date and at all times thereafter under a mental disability to change the disposition of the property. \n \n \n “(D)  The amendment made by paragraph (3) of subsection (d) [amending  section 2522 of this title ] shall apply to gifts made after  December 31, 1969 , except that the amendments made to section 2522(c)(2) of the Internal Revenue Code of 1986 shall apply to gifts made after  July 31, 1969 . \n \n “(E)  The amendments made by paragraph (4) of subsection (d) [amending sections 2055, 2106, and 2522 of this title] shall apply to gifts and transfers made after  December 31, 1969 . \n \n \n “(5)  The amendment made by subsection (e) [enacting  section 664 of this title ] shall apply to transfers in trust made after  July 31, 1969 . \n \n “(6)  The amendments made by subsection (f) [amending  section 1011 of this title ] shall apply with respect to sales made after  December 19, 1969 .”\nPub. L. 91–172, title II, §\u202f201(h)(2) ,  Dec. 30, 1969 ,  83 Stat. 565 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1968 .”\nAmendment by  Pub. L. 89–570  applicable to taxable years ending after  Sept. 12, 1966 , but only in respect of expenditures paid or incurred after such date, see  section 3 of Pub. L. 89–570 , set out as an Effective Date note under  section 617 of this title .\nPub. L. 88–272, title II, §\u202f209(f) ,  Feb. 26, 1964 ,  78 Stat. 47 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendments made by subsections (a), (b), and (c) [amending this section and sections 545 and 556 of this title], shall apply with respect to contributions which are paid in taxable years beginning after  December 31, 1963 . \n \n “(2)  The amendments made by subsection (d) [amending this section and  section 381 of this title ] shall apply to taxable years beginning after  December 31, 1963 , with respect to contributions which are paid (or treated as paid under section 170(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) in taxable years beginning after  December 31, 1961 . \n \n “(3)  The amendments made by subsection (e) [amending this section] shall apply to transfers of future interests made after  December 31, 1963 , in taxable years ending after such date, except that such amendments shall not apply to any transfer of a future interest made before  July 1, 1964 , where— “(A)  the sole intervening interest or right is a nontransferable life interest reserved by the donor, or \n \n “(B)  in the case of a joint gift by husband and wife, the sole intervening interest or right is a nontransferable life interest reserved by the donors which expires not later than the death of whichever of such donors dies later. \n \n\n For purposes of the exception contained in the preceding sentence, a right to make a transfer of the reserved life interest to the donee of the future interest shall not be treated as making a life interest transferable.”\nAmendment by  section 231(b)(1) of Pub. L. 88–272  applicable to dispositions after  Dec. 31, 1963 , in taxable years ending after such date, see  section 231(c) of Pub. L. 88–272 , set out as an Effective Date note under  section 1250 of this title .\nPub. L. 87–858, §\u202f2(c) ,  Oct. 23, 1962 ,  76 Stat. 1134 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after  December 31, 1960 .”\nAmendment by  Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nAmendment by  Pub. L. 86–779  applicable with respect to taxable years beginning after  Dec. 31, 1959 , see  section 7(c) of Pub. L. 86–779 , set out as a note under  section 162 of this title .\nPub. L. 85–866, title I, §\u202f10(b) ,  Sept. 2, 1958 ,  72 Stat. 1609 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 .”\nAmendment by  section 11 of Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title I, §\u202f12(b) ,  Sept. 2, 1958 ,  72 Stat. 1610 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1957 , but only with respect to charitable contributions made after such date.”\nAct Aug. 7, 1956, ch. 1031, §\u202f2 ,  70 Stat. 1118 , provided that:  “The amendment made by this Act [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1955 .”\nFor provisions that nothing in amendment by  section 401(b)(14) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 114–113, div. Q, title I, §\u202f111(b)(3) ,  Dec. 18, 2015 ,  129 Stat. 3047 , provided that:  “Nothing in this subsection [amending this section] (or any amendment made by this subsection) shall be construed to modify the existing property rights validly conveyed to Native Corporations (within the meaning of section 3(m) of the Alaska Native Claims Settlement Act [ 43 U.S.C. 1602(m) ]) under such Act [ 43 U.S.C. 1601  et seq.].”\nUnited States International Development Cooperation Agency (other than Agency for International Development and Overseas Private Investment Corporation) abolished and functions and authorities transferred, see sections 6561 and 6562 of Title 22, Foreign Relations and Intercourse.\nFor transfer of functions, personnel, assets, and liabilities of the Overseas Private Investment Corporation to the United States International Development Finance Corporation and treatment of related references, see sections 9683 and 9686(d) of Title 22, Foreign Relations and Intercourse.\nPub. L. 117–328, div. T, title VI, §\u202f605(a)(3) ,  Dec. 29, 2022 ,  136 Stat. 5395 , provided that:  “Any contribution with respect to which any deduction was disallowed by reason of section 170(h)(7) of the Internal Revenue Code of 1986 (as added by this subsection) shall be treated for purposes of sections 6501(c)(10) and 6235(c)(6) of such Code as a transaction specifically identified by the Secretary as a tax avoidance transaction for purposes of section 6011 of such Code.”\nPub. L. 117–328, div. T, title VI, §\u202f605(d) ,  Dec. 29, 2022 ,  136 Stat. 5395 , provided that: \n “(1)   In general .— The Secretary of the Treasury (or such Secretary’s delegate) shall, within 120 days after the date of the enactment of this Act [ Dec. 29, 2022 ], publish safe harbor deed language for extinguishment clauses and boundary line adjustments. \n \n “(2)   Opportunity to correct.— “(A)   In general .— During the 90-day period beginning on the date of publication of the safe harbor deed language under paragraph (1), a donor may amend an easement deed to substitute the safe harbor language for the corresponding language in the original deed if— “(i)  the amended deed is signed by the donor and donee and recorded within such 90-day period, and \n \n “(ii)  such amendment is treated as effective as of the date of the recording of the original easement deed. \n \n \n “(B)   Exceptions .— Subparagraph (A) shall not apply to an easement deed relating to any contribution— “(i)  which— “(I)  is part of a reportable transaction (as defined in section 6707A(c)(1) of the Internal Revenue Code of 1986), or \n \n “(II)  is described in Internal Revenue Service Notice 2017–10, \n \n \n “(ii)  which by reason of section 170(h)(7) of such Code, as added by this section, is not treated as a qualified conservation contribution, \n \n “(iii)  if a deduction for such contribution under section 170 of such Code has been disallowed by the Secretary of the Treasury (or such Secretary’s delegate), and the donor is contesting such disallowance in a case which is docketed in a Federal court on a date before the date the amended deed is recorded by the donor, or \n \n “(iv)  if a claimed deduction for such contribution under section 170 of such Code resulted in an underpayment to which a penalty under section 6662 or 6663 of such Code applies and— “(I)  such penalty has been finally determined administratively, or \n \n “(II)  if such penalty is challenged in court, the judicial proceeding with respect to such penalty has been concluded by a decision or judgment which has become final.”\nPub. L. 116–136, div. A, title II, §\u202f2205 ,  Mar. 27, 2020 ,  134 Stat. 345 , as amended by  Pub. L. 116–260, div. EE, title II, §\u202f213(a) , (b),  Dec. 27, 2020 ,  134 Stat. 3068 , provided that: \n “(a)   Temporary Suspension of Limitations on Certain Cash Contributions.— “(1)   In general .— Except as otherwise provided in paragraph (2), qualified contributions shall be disregarded in applying subsections (b) and (d) of section 170 of the Internal Revenue Code of 1986. \n \n “(2)   Treatment of excess contributions .— For purposes of section 170 of the Internal Revenue Code of 1986— “(A)   Individuals .— In the case of an individual— “(i)   Limitation .— Any qualified contribution shall be allowed as a deduction only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer’s contribution base (as defined in subparagraph (H) of section 170(b)(1) of such Code) over the amount of all other charitable contributions allowed under section 170(b)(1) of such Code. \n \n “(ii)   Carryover .— If the aggregate amount of qualified contributions made in the contribution year (within the meaning of section 170(d)(1) of such Code) exceeds the limitation of clause (i), such excess shall be added to the excess described in section 170(b)(1)(G)(ii). \n \n \n “(B)   Corporations .— In the case of a corporation— “(i)   Limitation .— Any qualified contribution shall be allowed as a deduction only to the extent that the aggregate of such contributions does not exceed the excess of 25 percent of the taxpayer’s taxable income (as determined under paragraph (2) of section 170(b) of such Code) over the amount of all other charitable contributions allowed under such paragraph. \n \n “(ii)   Carryover .— If the aggregate amount of qualified contributions made in the contribution year (within the meaning of section 170(d)(2) of such Code) exceeds the limitation of clause (i), such excess shall be appropriately taken into account under section 170(d)(2) subject to the limitations thereof. \n \n \n \n “(3)   Qualified contributions.— “(A)   In general .— For purposes of this subsection, the term ‘qualified contribution’ means any charitable contribution (as defined in section 170(c) of the Internal Revenue Code of 1986) if— “(i)  such contribution is paid in cash during calendar year 2020 or 2021 to an organization described in section 170(b)(1)(A) of such Code, and \n \n “(ii)  the taxpayer has elected the application of this section with respect to such contribution. \n \n \n “(B)   Exception .— Such term shall not include a contribution by a donor if the contribution is— “(i)  to an organization described in section 509(a)(3) of the Internal Revenue Code of 1986, or \n \n “(ii)  for the establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2) of such Code). \n \n \n “(C)   Application of election to partnerships and s corporations .— In the case of a partnership or S corporation, the election under subparagraph (A)(ii) shall be made separately by each partner or shareholder. \n \n \n \n “(b)   Increase in Limits on Contributions of Food Inventory .— In the case of any charitable contribution of food during 2020 or 2021 to which section 170(e)(3)(C) of the Internal Revenue Code of 1986 applies, subclauses (I) and (II) of clause (ii) thereof shall each be applied by substituting ‘25 percent’ for ‘15 percent.’ \n \n “(c)   Effective Date .— This section shall apply to taxable years ending after  December 31, 2019 .”\n[ Pub. L. 116–260, div. EE, title II, §\u202f213(c) ,  Dec. 27, 2020 ,  134 Stat. 3068 , provided that:  “The amendments made by this section [amending  section 2205 of Pub. L. 116–136 , set out above] shall apply to contributions made after  December 31, 2020 .” \n]\nPub. L. 108–357, title VIII, §\u202f882(e) ,  Oct. 22, 2004 ,  118 Stat. 1631 , provided that:  \n “The Secretary of the Treasury may prescribe such regulations or other guidance as may be necessary or appropriate to prevent the avoidance of the purposes of section 170(e)(1)(B)(iii) of the Internal Revenue Code of 1986 (as added by subsection (a)), including preventing— \n “(1)  the circumvention of the reduction of the charitable deduction by embedding or bundling the patent or similar property as part of a charitable contribution of property that includes the patent or similar property, \n \n “(2)  the manipulation of the basis of the property to increase the amount of the charitable deduction through the use of related persons, pass-thru entities, or other intermediaries, or through the use of any provision of law or regulation (including the consolidated return regulations), and \n \n “(3)  a donor from changing the form of the patent or similar property to property of a form for which different deduction rules would apply.”\nPub. L. 100–647, title VI, §\u202f6281 ,  Nov. 10, 1988 ,  102 Stat. 3755 , provided that:  “Notwithstanding paragraph (2) of section 155(a) of the Tax Reform Act of 1984 [ section 155(a)(2) of Pub. L. 98–369 , set out below], the Secretary of the Treasury or his delegate may in the regulations prescribed pursuant to such section waive the requirement of a qualified appraisal in the case of a qualified contribution (within the meaning of section 170(e)(3)(A) of the 1986 Code) of property described in section 1221(1) [probably means section 1221(1) of the 1986 Code] with a claimed value in excess of $5,000.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVI, §\u202f1608 ,  Oct. 22, 1986 ,  100 Stat. 2771 , which related to treatment of certain amounts paid to or for the benefit of certain institutions of higher education, was repealed by  Pub. L. 100–647, title I, §\u202f1016(b) ,  Nov. 10, 1988 ,  102 Stat. 3575 .\nPub. L. 98–369, div. A, title I, §\u202f155(a) ,  July 18, 1984 ,  98 Stat. 691 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Not later than  December 31, 1984 , the Secretary shall prescribe regulations under section 170(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], which require any individual, closely held corporation, or personal service corporation claiming a deduction under section 170 of such Code for a contribution described in paragraph (2)— “(A)  to obtain a qualified appraisal for the property contributed, \n \n “(B)  to attach an appraisal summary to the return on which such deduction is first claimed for such contribution, and \n \n “(C)  to include on such return such additional information (including the cost basis and acquisition date of the contributed property) as the Secretary may prescribe in such regulations. \n \n\n Such regulations shall require the taxpayer to retain any qualified appraisal. \n \n “(2)   Contributions to which paragraph (1) applies .— For purposes of paragraph (1), a contribution is described in this paragraph— “(A)  if such contribution is of property (other than publicly traded securities), and \n \n “(B)  if the claimed value of such property (plus the claimed value of all similar items of property donated to 1 or more donees) exceeds $5,000. \n \n\n In the case of any property which is nonpublicly traded stock, subparagraph (B) shall be applied by substituting ‘$10,000’ for ‘$5,000’. \n \n “(3)   Appraisal summary .— For purposes of this subsection, the appraisal summary shall be in such form and include such information as the Secretary prescribes by regulations. Such summary shall be signed by the qualified appraiser preparing the qualified appraisal and shall contain the TIN of such appraiser. Such summary shall be acknowledged by the donee of the property appraised in such manner as the Secretary prescribes in such regulations. \n \n “(4)   Qualified appraisal .— The term ‘qualified appraisal’ means an appraisal prepared by a qualified appraiser which includes— “(A)  a description of the property appraised, \n \n “(B)  the fair market value of such property on the date of contribution and the specific basis for the valuation, \n \n “(C)  a statement that such appraisal was prepared for income tax purposes, \n \n “(D)  the qualifications of the qualified appraiser, \n \n “(E)  the signature and TIN of such appaiser, [sic] and \n \n “(F)  such additional information as the Secretary prescribes in such regulations. \n \n \n “(5)   Qualified appraiser.— “(A)   In general .— For purposes of this subsection, the term ‘qualified appraiser’ means an appraiser qualified to make appraisals of the type of property donated, who is not— “(i)  the taxpayer, \n \n “(ii)  a party to the transaction in which the taxpayer acquired the property, \n \n “(iii)  the donee, \n \n “(iv)  any person employed by any of the foregoing persons or related to any of the foregoing persons under section 267(b) of the Internal Revenue Code of 1986, or \n \n “(v)  to the extent provided in such regulations, any person whose relationship to the taxpayer would cause a reasonable person to question the independence of such appraiser. \n \n \n “(B)   Appraisal fees .— For purposes of this subsection, an appraisal shall not be treated as a qualified appraisal if all or part of the fee paid for such appraisal is based on a percentage of the appraised value of the property. The preceding sentence shall not apply to fees based on a sliding scale that are paid to a generally recognized association regulating appraisers. \n \n \n “(6)   Other definitions .— For purposes of this subsection— “(A)   Closely held corporation .— The term ‘closely held corporation’ means any corporation (other than an S corporation) with respect to which the stock ownership requirement of paragraph (2) of section 542(a) of such Code is met. \n \n “(B)   Personal service corporation .— The term ‘personal service corporation’ means any corporation (other than an S corporation) which is a service organization (within the meaning of section 414(m)(3) of such Code). \n \n “(C)   Publicly traded securities .— The term ‘publicly traded securities’ means securities for which (as of the date of the contribution) market quotations are readily available on an established securities market. \n \n “(D)   Nonpublicly traded stock .— The term ‘nonpublicly traded stock’ means any stock of a corporation which is not a publicly traded security. \n \n “(E)   The secretary .— The term ‘Secretary’ means the Secretary of the Treasury or his delegate.”\nFor includibility of provisions comparable to  section 2055(e)(3) of this title  in this section, see  section 514(b) of Pub. L. 95–600 , set out as a note under  section 2055 of this title .\nPub. L. 87–834, §\u202f29 ,  Oct. 16, 1962 ,  76 Stat. 1068 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “For purposes of section 170 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to deduction for charitable, etc., contributions and gifts), a contribution or gift made after  December 31, 1961 , with respect to a referendum occurring during the calendar year 1962 to or for the use of any nonprofit organization created and operated exclusively— “(1)  to consider proposals for the reorganization of the judicial branch of the government of any State of the United States or political subdivision of such State, and \n \n “(2)  to provide information, make recommendations, and seek public support or opposition as to such proposals, \n \n\n shall be treated as a charitable contribution if no part of the net earnings of such organization inures to the benefit of any private shareholder or individual. The provisions of the preceding sentence shall not apply to any organization which participates in, or intervenes in, any political campaign on behalf of any candidate for public office.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of a bond (other than a bond the interest on which is excludable from gross income), the amount of the amortizable bond premium for the taxable year shall be allowed as a deduction.\nIn the case of any bond the interest on which is excludable from gross income, no deduction shall be allowed for the amortizable bond premium for the taxable year.\nFor adjustment to basis on account of amortizable bond premium, see section 1016(a)(5).\nThe amortizable bond premium of the taxable year shall be the amount of the bond premium attributable to such year. In the case of a bond to which paragraph (1)(B)(i) applies and which has a call date, the amount of bond premium attributable to the taxable year in which the bond is called shall include an amount equal to the excess of the amount of the adjusted basis (for determining loss on sale or exchange) of such bond as of the beginning of the taxable year over the amount received on redemption of the bond or (if greater) the amount payable on maturity.\nFor purposes of subparagraph (A), if the amount payable on an earlier call date is used under paragraph (1)(B)(i) in determining the amortizable bond premium attributable to the period before the earlier call date, such bond shall be treated as maturing on such date for the amount so payable and then reissued on such date for the amount so payable.\nSubparagraph (A) shall not apply to an exchange by the taxpayer of a bond for another bond if such exchange is a part of a reorganization (as defined in section 368). If any portion of the basis of the taxpayer in a bond transferred in such an exchange is not taken into account in determining bond premium by reason of this paragraph, such portion shall not be taken into account in determining the amount of bond premium on any bond received in the exchange.\nIn the case of bonds the interest on which is not excludible from gross income, this section shall apply only if the taxpayer has so elected.\nThe election authorized under this subsection shall be made in accordance with such regulations as the Secretary shall prescribe. If such election is made with respect to any bond (described in paragraph (1)) of the taxpayer, it shall also apply to all such bonds held by the taxpayer at the beginning of the first taxable year to which the election applies and to all such bonds thereafter acquired by him and shall be binding for all subsequent taxable years with respect to all such bonds of the taxpayer, unless, on application by the taxpayer, the Secretary permits him, subject to such conditions as the Secretary deems necessary, to revoke such election. In the case of bonds held by a common trust fund, as defined in section 584(a), the election authorized under this subsection shall be exercisable with respect to such bonds only by the common trust fund. In case of bonds held by an estate or trust, the election authorized under this subsection shall be exercisable with respect to such bonds only by the fiduciary.\nFor purposes of this section, the term “bond” means any bond, debenture, note, or certificate or other evidence of indebtedness, but does not include any such obligation which constitutes stock in trade of the taxpayer or any such obligation of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year, or any such obligation held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business.\nFor special rules applicable, in the case of dealers in securities, with respect to premium attributable to certain wholly tax-exempt securities, see section 75.\n2014—Subsec. (b)(1)(B).  Pub. L. 113–295, §\u202f221(a)(29)(A) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows:\n“(i) with reference to the amount payable on maturity or on earlier call date, in the case of any bond other than a bond to which clause (ii) applies, or and\n“(ii) with reference to the amount payable on maturity (or if it results in a smaller amortizable bond premium attributable to the period to earlier call date, with reference to the amount payable on earlier call date), in the case of any bond described in subsection (a)(1) which is acquired after  December 31, 1957 , and”.\nSubsec. (b)(2), (3)(B).  Pub. L. 113–295, §\u202f221(a)(29)(B) , substituted “paragraph (1)(B)(i)” for “paragraph (1)(B)(ii)”.\n2004—Subsec. (c)(2).  Pub. L. 108–357, §\u202f413(c)(2)(B) , which directed amendment of par. (2) by striking out “,\u2000or foreign personal holding company”, was executed by striking out “or foreign personal holding company” after “the common trust fund”, to reflect the probable intent of Congress.\nPub. L. 108–357, §\u202f413(c)(2)(A) , struck out “,\u2000or by a foreign personal holding company, as defined in section 552” after “section 584(a)”.\n1988—Subsec. (e).  Pub. L. 100–647  substituted “Treatment as offset to interest payments” for “Treatment as interest” in heading and amended text generally. Prior to amendment, text read as follows: “Except as provided in regulations, the amount of any amortizable bond premium with respect to which a deduction is allowed under subsection (a)(1) for any taxable year shall be treated as interest for purposes of this title.”\n1986—Subsec. (b)(3).  Pub. L. 99–514, §\u202f1803(a)(11)(A) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The determinations required under paragraphs (1) and (2) shall be made—\n“(A) in accordance with the method of amortizing bond premium regularly employed by the holder of the bond, if such method is reasonable;\n“(B) in all other cases, in accordance with regulations prescribing reasonable methods of amortizing bond premium prescribed by the Secretary.”\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1803(a)(12)(A) , added par. (4).\nSubsec. (d).  Pub. L. 99–514, §\u202f1803(a)(11)(B) , struck out “issued by any corporation and bearing interest (including any like obligation issued by a government or political subdivision thereof),” after “evidence of indebtedness,”.\nSubsecs. (e), (f).  Pub. L. 99–514, §\u202f643(a) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1901(b)(1)(E)(i) , substituted “Taxable bonds” for “Interest wholly or partially taxable” after “(1)”.\nSubsec. (a)(2).  Pub. L. 94–455, §\u202f1901(b)(1)(E)(ii) , substituted “Tax-exempt bonds” for “Interest wholly tax-exempt” after “(2)”.\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f1901(b)(1)(E)(iii) , redesignated par. (4) as (3). Former par. (3), relating to adjustment of credit or deduction for interest partially tax-exempt, was struck out.\nSubsec. (a)(4).  Pub. L. 94–455, §\u202f1901(b)(1)(E)(iii) , redesignated par. (4) as par. (3).\nSubsec. (b)(1)(B)(i).  Pub. L. 94–455, §\u202f1951(b)(5)(A)(ii) , substituted “clause (ii) applies, or” for “clause (ii) or (iii) applies” after “bond to which” and inserted “and” at the end.\nSubsec. (b)(1)(B)(ii).  Pub. L. 94–455 , §§\u202f1901(b)(1)(E)(iv), 1951(b)(5)(A)(iii), substituted “subsection (a)(1)” for “subsection (c)(1)(B)” after “bond described in” and “and” for “or” after “1957”.\nSubsec. (b)(1)(B)(iii).  Pub. L. 94–455, §\u202f1951(b)(5)(A)(i) , struck out cl. (iii) relating to certain bonds acquired before 1958.\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1951(b)(5)(A)(iv) , struck out “or (iii)” after “paragraph (1)(B)(ii)”.\nSubsec. (b)(3)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(1).  Pub. L. 94–455, §\u202f1901(b)(1)(E)(v) , substituted “In the case of bonds the interest on which is not excludible from gross income, this section shall apply only if the taxpayer has so elected” for “This section shall apply with respect to the following classes of taxpayers with respect to the following classes of bonds only if the taxpayer has elected to have this section apply” after “election permitted”, and struck out subpars. (A) and (B) relating to partially tax-exempt, and wholly taxable, bonds.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” in three places after “Secretary”.\n1958—Subsec. (b)(1)(B).  Pub. L. 85–866, §\u202f13(a)(1) , substituted “,\u2000in the case of any bond other than a bond to which clause (ii) or (iii) applies” for “(but in the case of bonds described in subsection (c)(1)(B) issued after  January 22, 1951 , and acquired after  January 22, 1954 , only if such earlier call date is a date more than 3 years after the date of such issue), and”, designated such provision as cl. (i), and added cl. (ii) and (iii).\nSubsec. (b)(2).  Pub. L. 85–866, §\u202f13(a)(2) , substituted “In the case of a bond to which paragraph (1)(B)(ii) or (iii) applies and which has a call date,” for “In the case of a bond described in subsection (c)(1)(B) issued after  January 22, 1951 , and acquired after  January 22, 1954 , which has a call date not more than 3 years after the date of such issue,” in second sentence.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1006(j)(1)(C) ,  Nov. 10, 1988 ,  102 Stat. 3411 , provided that:  “The amendments made by this paragraph [amending this section and  section 1016 of this title ] shall apply in the case of obligations acquired after  December 31, 1987 ; except that the taxpayer may elect to have such amendment apply to obligations acquired after  October 22, 1986 .”\nPub. L. 99–514, title VI, §\u202f643(b) ,  Oct. 22, 1986 ,  100 Stat. 2285 , as amended by  Pub. L. 100–647, title I, §\u202f1006(j)(2) ,  Nov. 10, 1988 ,  102 Stat. 3411 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to obligations acquired after the date of the enactment of this Act [ Oct. 22, 1986 ], in taxable years ending after such date. \n \n “(2)   Revocation of election .— In the case of a taxpayer with respect to whom an election is in effect on the date of enactment of this Act [ Oct. 22, 1986 ], under section 171(c) of the Internal Revenue Code of 1986, such election shall apply to obligations acquired after the date of the enactment of this Act only if the taxpayer chooses (at such time and in such manner as may be prescribed by the Secretary of the Treasury or his delegate) to have such election apply with respect to such obligations.”\nPub. L. 99–514, title XVIII, §\u202f1803(a)(11)(C) ,  Oct. 22, 1986 ,  100 Stat. 2795 , provided that: \n “(i)  The amendments made by this paragraph [amending this section] shall apply to obligations issued after  September 27, 1985 . \n \n “(ii)  In the case of a taxpayer with respect to whom an election is in effect on the date of the enactment of this Act [ Oct. 22, 1986 ] under section 171(c) of the Internal Revenue Code of 1954 [now 1986], such election shall apply to obligations issued after  September 27, 1985 , only if the taxpayer chooses (at such time and in such manner as may be prescribed by the Secretary of the Treasury or his delegate) to have such election apply with respect to such obligations.”\nPub. L. 99–514, title XVIII, §\u202f1803(a)(12)(B) ,  Oct. 22, 1986 ,  100 Stat. 2796 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to exchanges after  May 6, 1986 .”\nAmendment by section 1901(b)(1)(E)(iii)–(v) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(b)(5)(A)(i) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nPub. L. 85–866, title I, §\u202f13(b) ,  Sept. 2, 1958 ,  72 Stat. 1611 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  December 31, 1957 .”\nPub. L. 94–455, title XIX, §\u202f1951(b)(5)(B) ,  Oct. 4, 1976 ,  90 Stat. 1838 , provided that:  \n “Notwithstanding the amendments made by subparagraph (A) [amending this section], in the case of a bond the interest on which is not excludable from gross income— “(i)  which was issued after  January 22, 1951 , with a call date not more than 3 years after the date of such issue, and \n \n “(ii)  which was acquired by the taxpayer after  January 22, 1954 , and before  January 1, 1958 , \n \n\n the bond premium for a taxable year beginning after  December 31, 1975 , shall not be determined under section 171(b)(1)(B)(i) but shall be determined with reference to the amount payable on maturity, and if the bond is called before its maturity, the bond premium for the year in which the bond is called shall be determined in accordance with the provisions of section 171(b)(2).”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of any portion of a net operating loss for the taxable year which is a farming loss with respect to the taxpayer, such loss shall be a net operating loss carryback to each of the 2 taxable years preceding the taxable year of such loss.\nFor purposes of applying paragraph (2), a farming loss for any taxable year shall be treated as a separate net operating loss for such taxable year to be taken into account after the remaining portion of the net operating loss for such taxable year.\nAny taxpayer entitled to a 2-year carryback under clause (i) from any loss year may elect not to have such clause apply to such loss year. Such election shall be made in such manner as prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.\nA net operating loss for a REIT year shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss.\nIn the case of any net operating loss for a taxable year which is not a REIT year, such loss shall not be carried to any preceding taxable year which is a REIT year.\nFor purposes of this subparagraph, the term “REIT year” means any taxable year for which the provisions of part II of subchapter M (relating to real estate investment trusts) apply to the taxpayer.\nIn the case of a life insurance company, if a net operating loss is carried pursuant to clause (i)(I) to a life insurance company taxable year beginning before  January 1, 2018 , such net operating loss carryback shall be treated in the same manner as an operations loss carryback (within the meaning of section 810 as in effect before its repeal) of such company to such taxable year.\nIf a net operating loss of a taxpayer is carried pursuant to clause (i)(I) to any taxable year in which an amount is includible in gross income by reason of section 965(a), the taxpayer shall be treated as having made the election under section 965(n) with respect to each such taxable year.\nIf the 5-year carryback period under clause (i)(I) with respect to any net operating loss of a taxpayer includes 1 or more taxable years in which an amount is includible in gross income by reason of section 965(a), the taxpayer may, in lieu of the election otherwise available under paragraph (3), elect under such paragraph to exclude all such taxable years from such carryback period.\nAn election under paragraph (3) (including an election described in subclause (I)) with respect to a net operating loss arising in a taxable year beginning in 2018 or 2019 shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the first taxable year ending after the date of the enactment of this subparagraph.\nAny taxpayer entitled to a carryback period under paragraph (1) may elect to relinquish the entire carryback period with respect to a net operating loss for any taxable year. Such election shall be made in such manner as may be prescribed by the Secretary, and shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the taxable year of the net operating loss for which the election is to be in effect. Such election, once made for any taxable year, shall be irrevocable for such taxable year.\nFor purposes of this section, the term “net operating loss” means the excess of the deductions allowed by this chapter over the gross income. Such excess shall be computed with the modifications specified in subsection (d).\nNo net operating loss deduction shall be allowed.\nNo deduction shall be allowed under section 151 (relating to personal exemptions). No deduction in lieu of any such deduction shall be allowed.\nThe deductions allowed by sections 243 (relating to dividends received by corporations) and 245 (relating to dividends received from certain foreign corporations) shall be computed without regard to section 246(b) (relating to limitation on aggregate amount of deductions).\nAny deduction under section 199A shall not be allowed.\nThe deduction under section 250 shall not be allowed.\nIn determining the amount of any net operating loss carryback or carryover to any taxable year, the necessary computations involving any other taxable year shall be made under the law applicable to such other taxable year.\nThe date of the enactment of this subparagraph, referred to in subsec. (b)(1)(D)(v)(II), is the date of enactment of  Pub. L. 116–136 , which was approved  Mar. 27, 2020 .\n2020—Subsec. (a).  Pub. L. 116–136, §\u202f2303(a)(1) , substituted “an amount equal to—” and pars. (1) and (2) for “an amount equal to the lesser of—\n“(1) the aggregate of the net operating loss carryovers to such year, plus the net operating loss carrybacks to such year, or\n“(2) 80 percent of taxable income computed without regard to the deduction allowable under this section.”\nSubsec. (b)(1)(A).  Pub. L. 116–136, §\u202f2303(c)(2) , amended subpar. (A) generally. Prior to amendment, text read as follows: “Except as otherwise provided in this paragraph, a net operating loss for any taxable year—\n“(i) except as otherwise provided in this paragraph, shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss, and\n“(ii) shall be a net operating loss carryover to each taxable year following the taxable year of the loss.”\nSubsec. (b)(1)(A)(i).  Pub. L. 116–136, §\u202f2303(b)(2) , substituted “,\u2000(C)(i), and (D)” for “and (C)(i)”.\nSubsec. (b)(1)(D).  Pub. L. 116–136, §\u202f2303(b)(1) , added subpar. (D).\nSubsec. (b)(2)(C).  Pub. L. 116–136, §\u202f2303(a)(2)(A) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “not exceed the amount determined under subsection (a)(2) for such prior taxable year.”\nSubsec. (d)(6)(C).  Pub. L. 116–136, §\u202f2303(a)(2)(B) , substituted “subsection (a)(2)(B)(ii)(I)” for “subsection (a)(2)”.\n2018—Subsec. (d)(5).  Pub. L. 115–141, §\u202f401(a)(53) , substituted “sections 243” for “section 243”.\nSubsec. (d)(8).  Pub. L. 115–141, §\u202f101(a)(2)(B) , substituted “Any deduction” for “The deduction”.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13302(a)(1) , amended subsec. (a) generally. Prior to amendment, text read as follows: “There shall be allowed as a deduction for the taxable year an amount equal to the aggregate of (1) the net operating loss carryovers to such year, plus (2) the net operating loss carrybacks to such year. For purposes of this subtitle, the term ‘net operating loss deduction’ means the deduction allowed by this subsection.”\nSubsec. (b)(1)(A)(i).  Pub. L. 115–97, §\u202f13302(b)(1)(A) , substituted “except as otherwise provided in this paragraph, shall not be a net operating loss carryback to any taxable year” for “shall be a net operating loss carryback to each of the 2 taxable years”.\nSubsec. (b)(1)(A)(ii).  Pub. L. 115–97, §\u202f13302(b)(1)(B) , substituted “to each taxable year” for “to each of the 20 taxable years”.\nSubsec. (b)(1)(B).  Pub. L. 115–97, §\u202f13302(b)(2) , (c)(1), added subpar. (B) and struck out former subpar. (B). Prior to amendment, text read as follows:\n“(i)  In general .—A net operating loss for a REIT year shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss.\n“(ii)  Special rule .—In the case of any net operating loss for a taxable year which is not a REIT year, such loss shall not be carried back to any taxable year which is a REIT year.\n“(iii)  REIT year .—For purposes of this subparagraph, the term ‘REIT year’ means any taxable year for which the provisions of part II of subchapter M (relating to real estate investment trusts) apply to the taxpayer.”\nSubsec. (b)(1)(C).  Pub. L. 115–97, §\u202f13302(b)(2) , (d)(1), added subpar. (C) and struck out former subpar. (C). Prior to amendment, text read as follows: “In the case of a taxpayer which has a specified liability loss (as defined in subsection (f)) for a taxable year, such specified liability loss shall be a net operating loss carryback to each of the 10 taxable years preceding the taxable year of such loss.”\nSubsec. (b)(1)(D) to (F).  Pub. L. 115–97, §\u202f13302(b)(2) , struck out subpars. (D) to (F) which related to corporate equity reduction interest loss, retention of 3-year carryback in certain cases, and farming losses, respectively.\nSubsec. (b)(2).  Pub. L. 115–97, §\u202f13302(a)(2) , substituted “shall—” and subpars. (A) to (C) for “shall be computed—\n“(A) with the modifications specified in subsection (d) other than paragraphs (1), (4), and (5) thereof, and\n“(B) by determining the amount of the net operating loss deduction without regard to the net operating loss for the loss year or for any taxable year thereafter,\nand the taxable income so computed shall not be considered to be less than zero.”\nSubsec. (d)(6)(C).  Pub. L. 115–97, §\u202f13302(a)(3) , added subpar. (C).\nSubsec. (d)(7).  Pub. L. 115–97, §\u202f13305(b)(3) , struck out par. (7). Text read as follows: “The deduction under section 199 shall not be allowed.”\nSubsec. (d)(8).  Pub. L. 115–97, §\u202f11011(d)(1) , added par. (8).\nSubsec. (d)(9).  Pub. L. 115–97, §\u202f14202(b)(1) , added par. (9).\nSubsecs. (f), (g).  Pub. L. 115–97, §\u202f13302(d)(2) , added subsec. (f) and redesignated former subsec. (f) as (g).\nPub. L. 115–97, §\u202f13302(c)(2)(A) , redesignated subsec. (i) as (f) and struck out former subsecs. (f) and (g) which related to rules relating to specified liability loss and corporate equity reduction interest losses, respectively.\nSubsecs. (h), (i).  Pub. L. 115–97, §\u202f13302(c)(2)(A) , struck out subsec. (h) relating to farming loss rules and redesignated subsec. (i) as (f).\n2014—Subsec. (b)(1)(D).  Pub. L. 113–295, §\u202f221(a)(30)(A)(i) , redesignated subpar. (E) as (D) and struck out former subpar. (D). Prior to amendment, text of subpar. (D) read as follows: “In the case of any bank (as defined in section 585(a)(2)), the portion of the net operating loss for any taxable year beginning after  December 31, 1986 , and before  January 1, 1994 , which is attributable to the deduction allowed under section 166(a) shall be a net operating loss carryback to each of the 10 taxable years preceding the taxable year of the loss and a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss.”\nSubsec. (b)(1)(D)(i)(II).  Pub. L. 113–295, §\u202f221(a)(30)(B)(i) , struck out “ending after  August 2, 1989 ” after “loss limitation year”.\nSubsec. (b)(1)(D)(ii).  Pub. L. 113–295, §\u202f221(a)(30)(B)(ii) , substituted “subsection (g)” for “subsection (h)”.\nSubsec. (b)(1)(E).  Pub. L. 113–295, §\u202f221(a)(30)(A)(i) , redesignated subpar. (F) as (E). Former subpar. (E) redesignated (D).\nSubsec. (b)(1)(E)(ii).  Pub. L. 113–295, §\u202f221(a)(30)(B)(iv) , substituted “subsection (h)).” for “subsection (i)) or qualified disaster loss (as defined in subsection (j)).” in concluding provisions.\nSubsec. (b)(1)(E)(ii)(II).  Pub. L. 113–295, §\u202f221(a)(30)(B)(iii) , substituted “section 165(i)(5)” for “section 165(h)(3)(C)(i)”.\nSubsec. (b)(1)(F).  Pub. L. 113–295, §\u202f221(a)(30)(B)(v) , substituted “subsection (h)” for “subsection (i)”.\nPub. L. 113–295, §\u202f221(a)(30)(A)(i) , redesignated subpar. (G) as (F). Former subpar. (F) redesignated (E).\nSubsec. (b)(1)(F)(ii)(II).  Pub. L. 113–295, §\u202f211(c)(1)(B) , substituted “section 165(h)(3)(C)(i)” for “subsection (h)(3)(C)(i)”.\nSubsec. (b)(1)(G) to (J).  Pub. L. 113–295, §\u202f221(a)(30)(A)(i) , redesignated subpar. (G) as (F) and struck out subpars. (H) to (J) which related to carryback for 2008 or 2009 net operating losses, transmission property and pollution control investment, and certain losses attributable to federally declared disasters, respectively.\nSubsec. (d)(5).  Pub. L. 113–295, §\u202f221(a)(41)(B) , amended par. (5) generally. Prior to amendment, text read as follows: “The deductions allowed by sections 243 (relating to dividends received by corporations), 244 (relating to dividends received on certain preferred stock of public utilities), and 245 (relating to dividends received from certain foreign corporations) shall be computed without regard to section 246(b) (relating to limitation on aggregate amount of deductions); and the deduction allowed by section 247 (relating to dividends paid on certain preferred stock of public utilities) shall be computed without regard to subsection (a)(1)(B) of such section.”\nSubsec. (g).  Pub. L. 113–295, §\u202f221(a)(30)(A)(ii) , redesignated subsec. (h) as (g) and struck out former subsec. (g) which related to rules relating to bad debt losses of commercial banks.\nSubsec. (g)(2)(F).  Pub. L. 113–295, §\u202f221(a)(30)(B)(vi) , struck out subpar. (F). Text read as follows: “If any of the 3 taxable years described in subparagraph (C)(ii) end on or before  August 2, 1989 , the taxpayer may substitute for the amount determined under such subparagraph an amount equal to the interest paid or accrued (determined on an annualized basis) during the taxpayer’s taxable year which includes  August 3, 1989 , on indebtedness of the taxpayer outstanding on  August 2, 1989 .”\nSubsec. (g)(4)(B)(ii), (C).  Pub. L. 113–295, §\u202f221(a)(30)(B)(vii) , substituted “subsection (b)(1)(D)” for “subsection (b)(1)(E)”.\nSubsec. (h).  Pub. L. 113–295, §\u202f221(a)(30)(A)(ii) , redesignated subsec. (i) as (h). Former subsec. (h) redesignated (g).\nSubsec. (h)(1).  Pub. L. 113–295, §\u202f221(a)(30)(B)(viii) , struck out concluding provisions which read as follows: “Such term shall not include any qualified disaster loss (as defined in subsection (j)).”\nSubsec. (h)(3).  Pub. L. 113–295, §\u202f221(a)(30)(B)(ix) , substituted “subsection (b)(1)(F)” for “subsection (b)(1)(G)” in two places.\nSubsecs. (i) to (k).  Pub. L. 113–295, §\u202f221(a)(30)(A)(ii) , redesignated subsecs. (i) and (k) as (h) and (i), respectively, and struck out subsec. (j) which related to rules relating to qualified disaster losses.\n2009—Subsec. (b)(1)(H).  Pub. L. 111–92  amended subpar. (H) generally. Prior to amendment, subpar. (H) provided for carryback for 2008 net operating losses of small businesses.\nPub. L. 111–5, §\u202f1211(a) , amended subpar. (H) generally. Prior to amendment, subpar. (H) read as follows: “In the case of a net operating loss for any taxable year ending during 2001 or 2002, subparagraph (A)(i) shall be applied by substituting ‘5’ for ‘2’ and subparagraph (F) shall not apply.”\nSubsecs. (k), ( l ).  Pub. L. 111–5, §\u202f1211(b) , redesignated subsec. ( l ) as (k) and struck out former subsec. (k). Prior to amendment, text read as follows: “Any taxpayer entitled to a 5-year carryback under subsection (b)(1)(H) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(H). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.”\n2008—Subsec. (b)(1)(F)(ii).  Pub. L. 110–343, §\u202f708(d)(1) , inserted “or qualified disaster loss (as defined in subsection (j))” before period at end of concluding provisions.\nSubsec. (b)(1)(F)(ii)(II).  Pub. L. 110–343, §\u202f706(a)(2)(D)(v) , substituted “federally declared disasters (as defined by subsection (h)(3)(C)(i))” for “Presidentially declared disasters (as defined in section 1033(h)(3))”.\nSubsec. (b)(1)(F)(ii)(III).  Pub. L. 110–343, §\u202f706(a)(2)(D)(vi) , substituted “federally declared disasters” for “Presidentially declared disasters”.\nSubsec. (b)(1)(J).  Pub. L. 110–343, §\u202f708(a) , added subpar. (J).\nSubsec. (i)(1).  Pub. L. 110–343, §\u202f708(d)(2) , inserted concluding provisions.\nSubsecs. (j) to ( l ).  Pub. L. 110–343, §\u202f708(b) , added subsec. (j) and redesignated former subsecs. (j) and (k) as (k) and ( l ), respectively.\n2005—Subsec. (b)(1)(I).  Pub. L. 109–58  added subpar. (I).\nSubsec. (b)(1)(I)(i).  Pub. L. 109–135, §\u202f402(f)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “At the election of the taxpayer in any taxable year ending after  December 31, 2005 , and before  January 1, 2009 , in the case of a net operating loss in a taxable year ending after  December 31, 2002 , and before  January 1, 2006 , there shall be a net operating loss carryback to each of the 5 years preceding the taxable year of such loss to the extent that such loss does not exceed 20 percent of the sum of electric transmission property capital expenditures and pollution control facility capital expenditures of the taxpayer for the taxable year preceding the taxable year in which such election is made.”\nSubsec. (b)(1)(I)(ii)(I).  Pub. L. 109–135, §\u202f402(f)(2) , substituted “for a taxable year” for “in a taxable year”.\nSubsec. (b)(1)(I)(iv) to (vi).  Pub. L. 109–135, §\u202f402(f)(3) , added cl. (iv), redesignated cl. (vi) as (v), and struck out former cls. (iv) and (v) which read as follows:\n“(iv)  Application for adjustment .—In the case of any portion of a net operating loss to which an election under clause (i) applies, an application under section 6411(a) with respect to such loss shall not fail to be treated as timely filed if filed within 24 months after the due date specified under such section.\n“(v)  Special rules relating to refund .—For purposes of a net operating loss to which an election under clause (i) applies, references in sections 6501(h), 6511(d)(2)(A), and 6611(f)(1) to the taxable year in which such net operating loss arises or result in a net loss carryback shall be treated as references to the taxable year in which such election occurs.”\nSubsec. (d)(7).  Pub. L. 109–135, §\u202f403(a)(17) , added par. (7).\n2004—Subsec. (b)(1)(H).  Pub. L. 108–311  struck out “a taxpayer which has” after “In the case of”.\n2002—Subsec. (b)(1)(F)(i).  Pub. L. 107–147, §\u202f417(8) , substituted “3 taxable years” for “3 years” and “2 taxable years” for ‘2 years”.\nSubsec. (b)(1)(H).  Pub. L. 107–147, §\u202f102(a) , added subpar. (H).\nSubsecs. (j), (k).  Pub. L. 107–147, §\u202f102(b) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1998—Subsec. (b)(1)(F)(ii).  Pub. L. 105–277, §\u202f2013(c) , inserted concluding provisions.\nSubsec. (b)(1)(F)(iv).  Pub. L. 105–277, §\u202f4003(h) , added cl. (iv).\nSubsec. (b)(1)(G).  Pub. L. 105–277, §\u202f2013(a) , added subpar. (G).\nSubsec. (d)(4)(C).  Pub. L. 105–277, §\u202f4004(a) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “any deduction allowable under section 165(c)(3) (relating to casualty losses) shall not be taken into account; and”.\nSubsec. (f)(1)(B).  Pub. L. 105–277, §\u202f3004(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Any amount (not described in subparagraph (A)) allowable as a deduction under this chapter with respect to a liability which arises under a Federal or State law or out of any tort of the taxpayer if—\n“(i) in the case of a liability arising out of a Federal or State law, the act (or failure to act) giving rise to such liability occurs at least 3 years before the beginning of the taxable year, or\n“(ii) in the case of a liability arising out of a tort, such liability arises out of a series of actions (or failures to act) over an extended period of time a substantial portion of which occurs at least 3 years before the beginning of the taxable year.\nA liability shall not be taken into account under subparagraph (B) unless the taxpayer used an accrual method of accounting throughout the period or periods during which the acts or failures to act giving rise to such liability occurred.”\nSubsecs. (i), (j).  Pub. L. 105–277, §\u202f2013(b) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1997—Subsec. (b)(1)(A)(i).  Pub. L. 105–34, §\u202f1082(a)(1) , substituted “2” for “3”.\nSubsec. (b)(1)(A)(ii).  Pub. L. 105–34, §\u202f1082(a)(2) , substituted “20” for “15”.\nSubsec. (b)(1)(F).  Pub. L. 105–34, §\u202f1082(b) , added subpar. (F).\n1996—Subsec. (b)(1)(E)(ii).  Pub. L. 104–188, §\u202f1702(h)(2) , substituted “subsection (h)” for “subsection (m)”.\nSubsec. (h)(3)(B)(i).  Pub. L. 104–188, §\u202f1704(t)(5) , substituted “corporation.” for “corporation,” at end.\nSubsec. (h)(4)(B).  Pub. L. 104–188, §\u202f1704(t)(30) , substituted “For purposes of subsection (b)(2)—” for “For purposes of subsection (b)(2)” in introductory provisions.\nSubsec. (h)(4)(C).  Pub. L. 104–188, §\u202f1702(h)(16) , substituted “(b)(1)(E)” for “(b)(1)(M)”.\n1993—Subsec. (d)(2).  Pub. L. 103–66, §\u202f13113(d)(1)(A) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “In the case of a taxpayer other than a corporation, the amount deductible on account of losses from sales or exchanges of capital assets shall not exceed the amount includible on account of gains from sales or exchanges of capital assets.”\nSubsec. (d)(4)(B).  Pub. L. 103–66, §\u202f13113(d)(1)(B) , which directed the insertion of “,\u2000(2)(B),” after “paragraph (1)”, was executed by making the insertion after “paragraphs (1)” to reflect the probable intent of Congress.\n1990—Subsec. (b).  Pub. L. 101–508, §\u202f11811(a) , amended subsec. (b) generally, substituting present provisions for provisions delineating years to which loss may be carried, relating to amount of carrybacks and carryovers, and providing for special rules for foreign expropriation losses.\nSubsec. (b)(1)(M)(iii).  Pub. L. 101–508, §\u202f11701(d) , struck out “a C corporation” after “means” in introductory provisions, substituted “a C corporation which acquires” for “which acquires” in subcl. (I), “a C corporation” for “a corporation” in subcl. (II), and “any C corporation which is a successor” for “any successor corporation” in subcl. (III).\nSubsec. (f).  Pub. L. 101–508, §\u202f11811(b)(1) , (2)(A), redesignated subsec. (j) as (f), substituted heading for one which read: “Rules relating to product liability losses”, and amended text generally, substituting present provisions for provisions defining terms “product liability loss” and “product liability”, and providing for an election with respect to carrybacks of such losses.\nSubsec. (g).  Pub. L. 101–508, §\u202f11811(b)(1) , redesignated subsec. ( l ) as (g) and struck out former subsec. (g) which related to carryover of net operating losses for certain regulated transportation corporations.\nSubsec. (g)(2).  Pub. L. 101–508, §\u202f11811(b)(3) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “In applying paragraph (2) of subsection (b), the portion of the net operating loss for any taxable year which is attributable to the deduction allowed under section 166(a) shall be treated in a manner similar to the manner in which a foreign expropriation loss is treated.”\nSubsec. (h).  Pub. L. 101–508, §\u202f11811(b)(1) , redesignated subsec. (m) as (h) and struck out former subsec. (h) which defined “foreign expropriation loss”.\nSubsec. (h)(3)(B)(ii).  Pub. L. 101–508, §\u202f11324(a) , in par. (3)(B)(ii), formerly subsec. (m)(3)(B)(ii), substituted heading for one which read: “Exceptions” and amended text generally. Prior to amendment, text read as follows: “The term ‘major stock acquisition’ shall not include—\n“(I) a qualified stock purchase (within the meaning of section 338) to which an election under section 338 applies, or\n“(II) except as provided in regulations, an acquisition in which a corporation acquires stock of another corporation which, immediately before the acquisition, was a member of an affiliated group (within the meaning of section 1504(a)) other than the common parent of such group.”\nSubsec. (h)(4)(B).  Pub. L. 101–508, §\u202f11811(b)(4) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “In applying paragraph (2) of subsection (b), the corporate equity reduction interest loss shall be treated in a manner similar to the manner in which a foreign expropriation loss is treated.”\nPub. L. 101–508, §\u202f11704(a)(2) , substituted “subsection (b)(2)” for “subsection (B)(2)” in heading.\nSubsec. (i).  Pub. L. 101–508, §\u202f11811(b)(1) , redesignated subsec. (n) as (i) and struck out former subsec. (i) which provided for rules relating to mortgage disposition losses of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.\nSubsec. (j).  Pub. L. 101–508, §\u202f11811(b)(1) , redesignated subsec. (j) as (f).\nSubsec. (k).  Pub. L. 101–508, §\u202f11811(b)(1) , struck out subsec. (k) which related to definitions and special rules relating to deferred statutory or tort liability losses.\nSubsecs. ( l ) to (n).  Pub. L. 101–508, §\u202f11811(b)(1) , redesignated subsecs. ( l ) to (n) as (g) to (i), respectively.\n1989—Subsec. (b)(1)(M).  Pub. L. 101–239, §\u202f7211(a) , added subpar. (M).\nSubsecs. (m), (n).  Pub. L. 101–239, §\u202f7211(b) , added subsec. (m) and redesignated former subsec. (m) as (n).\n1988—Subsec. (b)(1)(A).  Pub. L. 100–647, §\u202f1009(c)(2) , substituted “Except as otherwise provided in this paragraph, a net operating loss” for “Except as provided in subparagraphs (D), (E), (F), (G), (H), (I), (J), (K), (L), and (M), a net operating loss”.\nSubsec. (b)(1)(B).  Pub. L. 100–647, §\u202f1009(c)(3) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Except as provided in subparagraphs (C), (D), and (E), a net operating loss for any taxable year ending after  December 31, 1955 , shall be a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss. Except as provided in subparagraphs (C), (D), (E), (F), (G), (H), (J), (L), and (M), a net operating loss for any taxable year ending after  December 31, 1975 , shall be a net operating loss carryover to each of the 15 taxable years following the taxable year of such loss.”\nSubsec. (b)(1)(K) to (M).  Pub. L. 100–647, §\u202f1009(c)(1) , redesignated subpars. (L) and (M) as (K) and (L), respectively.\nSubsec. (d)(4)(B).  Pub. L. 100–647, §\u202f1003(a)(1) , substituted “paragraphs (1) and (3)” for “paragraphs (1), (2)(B), and (3)”.\n1986—Subsec. (b)(1)(A), (B).  Pub. L. 99–514, §\u202f903(b)(2)(A) , (B), inserted reference to subpars. (L) and (M).\nSubsec. (b)(1)(F).  Pub. L. 99–514, §\u202f903(a)(1) , inserted “and before  January 1, 1987 ,”.\nPub. L. 99–514, §\u202f901(d)(4)(B) , substituted “referred to in section 582(c)(5)” for “to which section 585, 586, or 593 applies”.\nSubsec. (b)(1)(G).  Pub. L. 99–514, §\u202f903(a)(2) , inserted “and before  January 1, 1987 ,”.\nSubsec. (b)(1)(H).  Pub. L. 99–514, §\u202f903(a)(3)(A) , struck out “after  December 31, 1981 ,” and inserted “after  December 31, 1981 , and before  January 1, 1987 ,”.\nPub. L. 99–514, §\u202f903(a)(3)(B) , which directed that subpar. (H) be amended by striking out “after  December 31, 1984 ,” and inserting “after  December 31, 1984 , and before  January 1, 1987 ,”, was executed by striking out “after  December 31, 1984 ” and inserting “after  December 31, 1984 , and before  January 1, 1987 ”, to reflect the probable intent of Congress and the fact that no comma appeared after “1984” and was not necessary after “1987”.\nSubsec. (b)(1)(J), (K).  Pub. L. 99–514, §\u202f1303(b)(1) , redesignated subpar. (K) as (J) and struck out former subpar. (J) which read as follows: “In the case of an electing GSOC which has a net operating loss for any taxable year such loss shall not be a net operating loss carryback to any taxable year preceding the year of such loss, but shall be a net operating loss carryover to each of the 10 taxable years following the year of such loss.”\nSubsec. (b)(1)(L), (M).  Pub. L. 99–514, §\u202f903(b)(1) , added subpars. (L) and (M).\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f301(b)(3) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “In the case of a taxpayer other than a corporation—\n“(A) the amount deductible on account of losses from sales or exchanges of capital assets shall not exceed the amount includible on account of gains from sales or exchanges of capital assets; and\n“(B) the deduction for long-term capital gains provided by section 1202 shall not be allowed.”\nSubsec. (d)(6).  Pub. L. 99–514, §\u202f1899A(6) , added heading.\nSubsec. (d)(7).  Pub. L. 99–514, §\u202f104(b)(4) , struck out par. (7), zero bracket amount, which read as follows: “In the case of a taxpayer other than a corporation, the zero bracket amount shall be treated as a deduction allowed by this chapter. For purposes of subsection (c)—\n“(A) the deduction provided by the preceding sentence shall be in lieu of any itemized deductions of the taxpayer, and\n“(B) such sentence shall not apply to an individual who elects to itemize deductions.”\nSubsec. (k)(2), (4).  Pub. L. 99–514, §\u202f1303(b)(2) , substituted “subsection (b)(1)(J)” for “subsection (b)(1)(K)”.\nSubsecs. ( l ), (m).  Pub. L. 99–514, §\u202f903(b)(2)(C) , added subsec. ( l ) and redesignated former subsec. ( l ) as (m).\n1984—Subsec. (b)(1)(A).  Pub. L. 98–369, §\u202f91(d)(3)(A) , substituted “(J), and (K)” for “and (J)”.\nSubsec. (b)(1)(H).  Pub. L. 98–369, §\u202f177(c)(1)(A) , inserted “,\u2000or a net operating loss of the Federal Home Loan Mortgage Corporation for any taxable year beginning after  December 31, 1984 ” in introductory provisions.\nSubsec. (b)(1)(H)(i), (ii).  Pub. L. 98–369, §\u202f177(c)(1)(B) , (C), struck out “FNMA” before “mortgage disposition loss”.\nSubsec. (b)(1)(K).  Pub. L. 98–369, §\u202f91(d)(1) , added subpar. (K).\nSubsec. (b)(2)(A).  Pub. L. 98–369, §\u202f722(a)(4)(A) , substituted “and (5)” for “and (6)”.\nSubsec. (d)(4)(D).  Pub. L. 98–369, §\u202f491(d)(5) , struck out “or section 405(c)” after “section 404”.\nSubsec. (d)(6) to (8).  Pub. L. 98–369, §\u202f722(a)(4)(B) , redesignated pars. (7) and (8) as (6) and (7), respectively.\nSubsec. (h).  Pub. L. 98–369, §\u202f91(d)(3)(B) , substituted “this section” for “subsection (b)” in introductory provisions.\nSubsec. (i).  Pub. L. 98–369, §\u202f177(c)(2) , substituted “Mortgage disposition loss of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation” for “FNMA mortgage disposition loss” in heading and struck out “FNMA” before “mortgage disposition loss” wherever appearing in text.\nSubsec. (j).  Pub. L. 98–369, §\u202f91(d)(3)(B) , substituted “this section” for “subsection (b)” in introductory provisions.\nSubsecs. (k), ( l ).  Pub. L. 98–369, §\u202f91(d)(2) , added subsec. (k) and redesignated former subsec. (k) as ( l ).\n1982—Subsec. (b)(1)(A).  Pub. L. 97–362, §\u202f102(c)(1) , substituted “(H), (I), and (J)” for “(H), and (I)”.\nSubsec. (b)(1)(B).  Pub. L. 97–362, §\u202f102(c)(2) , substituted “(H), and (J)” for “and (I)”.\nSubsec. (b)(1)(H).  Pub. L. 97–362, §\u202f102(a) , added subpar. (H). Former subpar. (H) redesignated (I).\nSubsec. (b)(1)(I).  Pub. L. 97–362, §\u202f102(a) , (c)(3), redesignated former subpar. (H) as (I) and substituted “subsection (j)” for “subsection (i)”. Former subpar. (I) redesignated (J).\nSubsec. (b)(1)(J).  Pub. L. 97–362, §\u202f102(a) , redesignated former subpar. (I) as (J).\nSubsec. (f).  Pub. L. 97–354  struck out subsec. (f) relating to net operating loss of electing small business corporation.\nSubsec. (i).  Pub. L. 97–362, §\u202f102(b) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (j).  Pub. L. 97–362, §\u202f102(b) , (c)(4), redesignated former subsec. (i) as (j) and, in par. (3) of subsec. (j) as so redesignated, substituted “subsection (b)(1)(I)” for “subsection (b)(1)(H)” wherever appearing. Former subsec. (j) redesignated (k).\nSubsec. (k).  Pub. L. 97–362, §\u202f102(b) , redesignated former subsec. (j) as (k).\n1981—Subsec. (b)(1)(B).  Pub. L. 97–34, §\u202f207(a)(1) , substituted “15 taxable years” for “7 taxable years”.\nSubsec. (b)(1)(C).  Pub. L. 97–34, §\u202f207(a)(2)(A) , substituted “ending after  December 31, 1955 , and before  January 1, 1976 , shall” for “ending after  December 31, 1955 , shall” and struck out provision that, for any taxable year ending after  Dec. 31, 1975 , the preceding sentence was to be applied by substituting “9 taxable years” for “7 taxable years”.\nSubsec. (b)(1)(E)(i)(II).  Pub. L. 97–34, §\u202f207(a)(2)(B)(i) , substituted “15” for “8”.\nSubsec. (b)(1)(E)(ii).  Pub. L. 97–34, §\u202f207(a)(2)(B)(ii) , struck out designation subclause “(I)” for provisions prohibiting a loss carryback to any taxable year which is a REIT year and struck out provision formerly designated as subclause (II) directing that the number of taxable years to which a loss could be a net operating loss carryover under subparagraph (B) be increased (to a number not greater than 8) by the number of taxable years to which such loss could not be a net operating loss carryback by reason of subclause (I).\nSubsec. (g)(3)(C).  Pub. L. 97–34, §\u202f207(a)(2)(C) , struck out subpar. (C) which provided that, in the case of a net operating loss carryover from a loss year ending after  Dec. 31, 1975 , subpars. (A) and (B) were to be applied by substituting “8th taxable year” for “6th taxable year” and “9th taxable year” for “7th taxable year”.\n1980—Subsec. (b)(1)(A).  Pub. L. 96–222, §\u202f106(a)(6) , substituted “,\u2000(H), and (I)” for “and (H)”.\nPub. L. 96–222, §\u202f103(a)(15) , amended directory language of  Pub. L. 95–600, §\u202f371(a)(2) , to correct an error, and did not involve any change in text. See 1978 Amendment note for subsec. (b)(1)(A) below.\nSubsec. (b)(1)(B).  Pub. L. 96–222, §\u202f106(a)(7) , substituted “(G), and (I)” for “and (G)”.\nSubsec. (b)(1)(E).  Pub. L. 96–595  generally revised subpar. (E) to permit a trust which was formerly a real estate investment trust an additional year of carryforward of net operating losses for each year it was denied a net operating loss carryback because of its status as a real estate investment trust, and removed the restriction that a net operating loss incurred before 1976 can be carried forward to the 6th, 7th, or 8th year only if it qualified as a real estate investment trust for all years from the loss year through the carryover year.\nSubsec. (b)(1)(I).  Pub. L. 96–222, §\u202f106(a)(1) , redesignated former subpar. (H), added by  section 601(b) of Pub. L. 95–600  relating to an electing GSOC, as (I).\n1978—Subsec. (b)(1)(A).  Pub. L. 95–600, §\u202f371(a)(2) , as amended by  Pub. L. 96–222, §\u202f103(a)(15) , substituted “(G), and (H)” for “and (G)”.\nPub. L. 95–600, §\u202f703(p)(1)(A) , struck out provisions relating to net operating loss carryback with respect to a taxable year ending on or after  Dec. 31, 1962 , for which a certification has been issued under section 317 of the Trade Expansion Act of 1962.\nSubsec. (b)(1)(B).  Pub. L. 95–600, §\u202f701(d)(1) , inserted reference to subpar. (G).\nSubsec. (b)(1)(H).  Pub. L. 95–600, §\u202f371(a)(1) , added subpar. (H) relating to product liability losses.\nPub. L. 95–600, §\u202f601(b)(1) , added subpar. (H) relating to an electing GSOC.\nSubsec. (b)(3)(A).  Pub. L. 95–600, §\u202f703(p)(1)(B) , redesignated subpar. (C) as (A). Former subpar. (A), which related to conditions for application of paragraph (1)(A)(ii), was struck out.\nSubsec. (b)(3)(B).  Pub. L. 95–600, §\u202f703(p)(1)(B) , (C), redesignated subpar. (D) as (B) and substituted “subparagraph (A)(iii)” for “subparagraph (C)(iii)”. Former subpar. (B), which related to the applicability of paragraph (1)(A)(ii) to partnerships and electing small business corporations, was struck out.\nSubsec. (b)(3)(C).  Pub. L. 95–600, §\u202f703(p)(1)(B) , redesignated subpar. (E) as (C). Former subpar. (C) redesignated (A).\nSubsec. (b)(3)(D), (E).  Pub. L. 95–600, §\u202f703(p)(1)(B) , redesignated subpars. (D) and (E) as (B) and (C), respectively.\nSubsecs. (i), (j).  Pub. L. 95–600, §\u202f371(b) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1977—Subsec. (d)(8).  Pub. L. 95–30  added par. (8).\n1976—Subsec. (b)(1)(B).  Pub. L. 94–455, §\u202f806(a) , inserted “Except as provided in subparagraphs (C), (D), (E), and (F), a net operating loss for any taxable year ending after  December 31, 1975 , shall be a net operating loss carryover to each of the 7 taxable years following the taxable year of such loss” after “year of such loss”.\nSubsec. (b)(1)(C).  Pub. L. 94–455 , §§\u202f806(b)(1), 1901(a)(29)(C)(ii), inserted “For any taxable year ending after  December 31, 1975 , the preceding sentence shall be applied by substituting ‘9 taxable years’ for ‘7 taxable years’\u202f” after “year of such loss”, substituted “subsection (g)(1)” for “subsection (j)(1)” after “as defined in” and “subsection (g)” for “subsection (j)” after “as provided in”.\nSubsec. (b)(1)(D).  Pub. L. 94–455 , §§\u202f1901(a)(29)(C)(iii), 2126, substituted “subsection (h)” for “subsection (k)” after “as defined in” and “20” for “15” after “expropriation loss, to each of the”.\nSubsec. (b)(1)(E).  Pub. L. 94–455, §\u202f1606(b) , added subpar. (E).\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(iv) , substituted “subsection (g)” for “subsections (i) and (j)” after “provided in”.\nSubsec. (b)(3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(3)(A)(i), (ii).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” in two places after “Secretary”.\nSubsec. (b)(3)(C)(i).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(iii) , substituted “subsection (h)” for “subsection (k)” after “as defined in”.\nSubsec. (b)(3)(C)(ii), (iii).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “Or his delegate” in two places after “Secretary”.\nSubsec. (b)(3)(E).  Pub. L. 94–455 , §§\u202f806(c), 1901(a)(29)(A)(ii), added subpar. (E). Former subpar. (E), which related to applicability of special rules in computing taxpayer’s net operating loss deduction, was struck out.\nSubsec. (b)(3)(F).  Pub. L. 94–455, §\u202f1901(a)(29)(A)(ii) , struck out subpar. (F) which defined “class of products” and provided for the use of information compiled or published by Secretary of Commerce or manufacturers as prima facie evidence of the total number of units of such class of products manufactured and produced in the United States in a calendar year.\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(29)(B) , struck out “(for any taxable year ending after  December 31, 1953 )” after “means”.\nSubsec. (d)(5), (6).  Pub. L. 94–455, §\u202f1052(c)(3) , struck out par. (5) relating to special deductions for corporations concerning partially tax-exempt interest and Western Hemisphere corporations, and redesignated par. (6) as (5).\nSubsec. (d)(7).  Pub. L. 94–455, §\u202f1606(c) , added par. (7).\nSubsec. (e).  Pub. L. 94–455, §\u202f1901(a)(29)(D) , struck out “The preceding sentence shall apply with respect to all taxable years, whether they begin before, on, or after  January 1, 1954 ” after “applicable to such other taxable year”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(i) , redesignated subsec. (h) as (f). Former subsec. (f), relating to net operating loss deduction for taxable years beginning in 1953 and ending in 1954, was struck out.\nSubsec. (g).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(i) , redesignated subsec. (j) as (g). Former subsec. (g), relating to special transitional rules to be applied to net operating loss deductions, was struck out.\nSubsec. (g)(3)(C).  Pub. L. 94–455, §\u202f806(b)(2) , added subpar. (C).\nSubsec. (g)(4).  Pub. L. 94–455, §\u202f1901(a)(29)(E) , struck out par. (4) relating to carryover of net operating loss for certain regulated transportation corporations for taxable years beginning in 1955 and ending in 1956.\nSubsec. (h).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(i) , redesignated subsec. (k) as (h). Former subsec. (h) redesignated (f).\nSubsec. (i).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(i) , redesignated subsec. ( l ) as (i). Former subsec. (i), relating to carryback of net operating loss for taxable years beginning in 1957 and ending in 1958, was struck out.\nSubsecs. (j) to ( l ).  Pub. L. 94–455, §\u202f1901(a)(29)(C)(i) , redesignated subsecs. (j) to ( l ) as (g) to (i), respectively.\n1971—Subsec. (b)(1)(D).  Pub. L. 91–677, §\u202f2(a) , inserted “(or, with respect to that portion of the net operating loss for such year attributable to a Cuban expropriation loss, to each of the 15 taxable years following the taxable year of such loss)” after “the 10 taxable years following the taxable year of such loss”.\nSubsec. (b)(2).  Pub. L. 91–677, §\u202f2(b) , inserted provisions relating to treatment of Cuban expropriation losses.\nSubsec. (k)(3).  Pub. L. 91–677, §\u202f2(c) , added par. (3).\n1969—Subsec. (b)(1).  Pub. L. 91–172  substituted “(E), (F), and (G)”, for “and (E)” in subpar. (A)(i) and added subpars. (F) and (G).\n1967—Subsec. (b)(1).  Pub. L. 90–225, §\u202f3(a)(1) –(3), inserted reference to subpar. (E) in subpars. (A)(i) and (B), and added subpar. (E).\nSubsec. (b)(3)(E), (F).  Pub. L. 90–225, §\u202f3(a)(4) , added subpars. (E) and (F).\n1964—Subsec. (b).  Pub. L. 88–272, §\u202f210(a)(1) –(4), (b), inserted subpar. (D) in par. (1), references to such subpar. (D) in par. (1)(A)(i) and (1)(B), subpars. (C) and (D) in par. (3), provided that the net operating loss deduction in par. (2)(B) be determined without regard to that portion of a net operating loss due to a foreign expropriation loss, if such portion may not, under par. (1)(D), be carried back to such prior taxable year, and that if a portion of the net operating loss is attributable to foreign expropriation to which par. (1)(D) applied, such portion shall be considered a separate loss for such year to be applied after the other portion of such net operating loss.\nSubsec. (j)(1), (2),  Pub. L. 88–272, §\u202f234(b)(5) , substituted references to section 7701(a)(33) for references to section 1503(c)(1) or (2), wherever appearing.\nSubsecs. (k), ( l ).  Pub. L. 88–272, §\u202f210(a)(5) , added subsec. (k) and redesignated former subsec. (k) as ( l ).\n1962—Subsec. (b)(1).  Pub. L. 87–794  designated existing provisions as cl. (A)(i) and struck out provisions therefrom which authorized a net operating loss for any taxable year ending after  Dec. 31, 1957 , to be a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss, and added cls. (A)(ii), (B), and (C).\nSubsec. (b)(2).  Pub. L. 87–794  inserted reference to subsection (j), and substituted “shall be carried to the earliest of the taxable years to which (by reason of paragraph (1))” for “shall be carried to the earliest of the 8 taxable years to which (by reason of subparagraphs (A) and (B) of paragraph (1))”, and “each of the other taxable years” for “each of the other 7 taxable years”.\nSubsec. (b)(3).  Pub. L. 87–794  added par. (3).\nPub. L. 87–710, §\u202f1(a) , authorized a carryover of a net operating loss for any taxable year ending after  Dec. 31, 1955 , to each of the 5 taxable years following the taxable year of loss, or when such loss occurs in the case of regulated transportation corporation, except as provided in subsec. (j), then to each of the 7 taxable years following the taxable year of loss, and struck out provisions authorizing a net operating loss for any taxable years ending  Dec. 31, 1957 , to be carried over to each of the 5 taxable years following the taxable year of such loss, in par. (1), and inserted reference to subsec. (j) in par. (2).\nSubsec. (d)(4)(D).  Pub. L. 87–792  added subpar. (D).\nSubsecs. (j), (k).  Pub. L. 87–710, §\u202f1(b) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1958—Subsec. (b).  Pub. L. 85–866, §\u202f203(a) , substituted “1957” for “1953”, and “3” for “2” in par. (1), and substituted “subsection (i)” for “subsection (f)”, “8” for “7”, and “7” for “6” in par. (2).\nSubsecs. (f)(3), (4).  Pub. L. 85–866, §\u202f14(a) , added pars. (3) and (4).\nSubsec. (g)(3), (4).  Pub. L. 85–866, §\u202f14(b) , added par. (3) and redesignated former par. (3) as (4).\nSubsecs. (h) to (j).  Pub. L. 85–866 , §§\u202f64(b), 203(b), added subsecs. (h) and (i) and redesignated former subsec. (h) as (j).\nPub. L. 116–136, div. A, title II, §\u202f2303(d) ,  Mar. 27, 2020 ,  134 Stat. 355 , provided that: \n “(1)   Net operating loss limitation .— The amendments made by subsection (a) [amending this section and  section 860E of this title ] shall apply— “(A)  to taxable years beginning after  December 31, 2017 , and \n \n “(B)  to taxable years beginning on or before  December 31, 2017 , to which net operating losses arising in taxable years beginning after  December 31, 2017 , are carried. \n \n \n “(2)   Carryovers and carrybacks .— The amendment made by subsection (b) [amending this section] shall apply to— “(A)  net operating losses arising in taxable years beginning after  December 31, 2017 , and \n \n “(B)  taxable years beginning before, on, or after such date to which such net operating losses are carried. \n \n \n “(3)   Technical amendments .— The amendments made by subsection (c) [amending this section and provisions set out as a note under this section] shall take effect as if included in the provisions of  Public Law 115–97  to which they relate. \n \n “(4)   Special rule .— In the case of a net operating loss arising in a taxable year beginning before  January 1, 2018 , and ending after  December 31, 2017 — “(A)  an application under section 6411(a) of the Internal Revenue Code of 1986 with respect to the carryback of such net operating loss shall not fail to be treated as timely filed if filed not later than the date which is 120 days after the date of the enactment of this Act [ Mar. 27, 2020 ], and \n \n “(B)  an election to— “(i)  forgo any carryback of such net operating loss, \n \n “(ii)  reduce any period to which such net operating loss may be carried back, or \n \n “(iii)  revoke any election made under section 172(b) to forgo any carryback of such net operating loss, \n \n\n shall not fail to be treated as timely made if made not later than the date which is 120 days after the date of the enactment of this Act.”\nAmendment by  section 101(a)(2)(B) of Pub. L. 115–141  effective as if included in  section 11011 of Pub. L. 115–97 , see  section 101(d) of Pub. L. 115–141 , set out as a note under  section 62 of this title .\nAmendment by  section 11011(d)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as a note under  section 62 of this title .\nPub. L. 115–97, title I, §\u202f13302(e) ,  Dec. 22, 2017 ,  131 Stat. 21233 , as amended by  Pub. L. 116–136, div. A, title II, §\u202f2303(c)(1) ,  Mar. 27, 2020 ,  134 Stat. 354 , provided that: \n “(1)   Net operating loss limitation .— The amendments made by subsections (a) and (d)(2) [amending this section] shall apply to— “(A)  taxable years beginning after  December 31, 2017 , and \n \n “(B)  taxable years beginning on or before such date to which net operating losses arising in taxable years beginning after such date are carried. \n \n \n “(2)   Carryovers and carrybacks .— The amendments made by subsections (b), (c), and (d)(1) [amending this section and  section 537 of this title ] shall apply to net operating losses arising in taxable years beginning after  December 31, 2017 .”\nAmendment by  section 13305(b)(3) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nPub. L. 115–97, title I, §\u202f14202(c) ,  Dec. 22, 2017 ,  131 Stat. 2216 , provided that:  “The amendments made by this section [enacting  section 250 of this title  and amending this section and sections 246 and 469 of this title] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  section 211(c)(1)(B) of Pub. L. 113–295  effective as if included in the provisions of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008,  Pub. L. 110–343, div. C , to which such amendment relates, see  section 211(d) of Pub. L. 113–295 , set out as a note under  section 143 of this title .\nPub. L. 113–295, div. A, title II, §\u202f221(a)(41)(K) ,  Dec. 19, 2014 ,  128 Stat. 4044 , provided that:  “The amendments made by this paragraph [amending this section and sections 243, 246, 246A, 263, 277, 301, 469, 512, 805, 810, 812, 815, 832, 833, 1059, and 1244 of this title and repealing sections 244 and 247 of this title] shall not apply to preferred stock issued before  October 1, 1942  (determined in the same manner as under section 247 of the Internal Revenue Code of 1986 as in effect before its repeal by such amendments).”\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by section 221(a)(30)(A), (B), (41)(B) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–92  applicable to net operating losses arising in taxable years ending after  Dec. 31, 2007 , with transition provisions and exception for TARP recipients, see section 13(e), (f) of  Pub. L. 111–92 , set out as a note under  section 56 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1211(d) ,  Feb. 17, 2009 ,  123 Stat. 336 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to net operating losses arising in taxable years ending after  December 31, 2007 . \n \n “(2)   Transitional rule .— In the case of a net operating loss for a taxable year ending before the date of the enactment of this Act [ Feb. 17, 2009 ]— “(A)  any election made under section 172(b)(3) of the Internal Revenue Code of 1986 with respect to such loss may (notwithstanding such section) be revoked before the applicable date, \n \n “(B)  any election made under [former] section 172(b)(1)(H) of such Code with respect to such loss shall (notwithstanding such section) be treated as timely made if made before the applicable date, and \n \n “(C)  any application under section 6411(a) of such Code with respect to such loss shall be treated as timely filed if filed before the applicable date. \n \n\n For purposes of this paragraph, the term ‘applicable date’ means the date which is 60 days after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nAmendment by section 706(a)(2)(D)(v), (vi) of  Pub. L. 110–343  applicable to disasters declared in taxable years beginning after  Dec. 31, 2007 , see  section 706(d)(1) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nAmendment by section 708(a), (b), (d) of  Pub. L. 110–343  applicable to losses arising in taxable years beginning after  Dec. 31, 2007 , in connection with disasters declared after such date, see  section 708(e) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nAmendment by 402(f) of  Pub. L. 109–135  effective as if included in the provision of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which such amendment relates, see  section 402(m)(1) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendment by  section 403(a)(17) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 108–311  effective as if included in the provisions of the Job Creation and Worker Assistance Act of 2002,  Pub. L. 107–147 , to which such amendment relates, see  section 403(f) of Pub. L. 108–311 , set out as a note under  section 56 of this title .\nPub. L. 107–147, title I, §\u202f102(d) ,  Mar. 9, 2002 ,  116 Stat. 26 , provided that:  “Except as provided in subsection (c) [amending  section 56 of this title  and enacting provisions set out as a note under  section 56 of this title ], the amendments made by this section [amending this section and  section 56 of this title ] shall apply to net operating losses for taxable years ending after  December 31, 2000 .”\nPub. L. 105–277, div. J, title II, §\u202f2013(d) ,  Oct. 21, 1998 ,  112 Stat. 2681–903 , provided that:  “The amendments made by this section [amending this section] shall apply to net operating losses for taxable years beginning after  December 31, 1997 .”\nPub. L. 105–277, div. J, title III, §\u202f3004(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–906 , provided that:  “The amendment made by this section [amending this section] shall apply to net operating losses arising in taxable years ending after the date of the enactment of this Act [ Oct. 21, 1998 ].”\nAmendment by  section 4003(h) of Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nPub. L. 105–277, div. J, title IV, §\u202f4004(c)(1) ,  Oct. 21, 1998 ,  112 Stat. 2681–911 , provided that:  “The amendments made by subsections (a) and (b)(3) [amending this section and  section 873 of this title ] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 105–34, title X, §\u202f1082(c) ,  Aug. 5, 1997 ,  111 Stat. 951 , provided that:  “The amendments made by this section [amending this section] shall apply to net operating losses for taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by section 1702(h)(2), (16) of  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 103–66  applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nPub. L. 101–508, title XI, §\u202f11324(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–465 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to acquisitions after  October 9, 1990 . \n \n “(2)   Binding contract exception .— The amendment made by subsection (a) shall not apply to any acquisition pursuant to a written binding contract in effect on  October 9, 1990 , and at all times thereafter before such acquisition.”\nAmendment by  section 11701(d) of Pub. L. 101–508  effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989,  Pub. L. 101–239, title VII , to which such amendment relates, see  section 11701(n) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–508, title XI, §\u202f11811(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–534 , provided that:  “The amendments made by this section [amending this section] shall apply to net operating losses for taxable years beginning after  December 31, 1990 .”\nPub. L. 101–239, title VII, §\u202f7211(c) ,  Dec. 19, 1989 ,  103 Stat. 2345 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to corporate equity reduction transactions occurring after  August 2, 1989 , in taxable years ending after  August 2, 1989 . \n \n “(2)   Exceptions .— In determining whether a corporate equity reduction transaction has occurred after  August 2, 1989 , there shall not be taken into account— “(A)  acquisitions or redemptions of stock, or distributions with respect to stock, occurring on or before  August 2, 1989 , \n \n “(B)  acquisitions or redemptions of stock after  August 2, 1989 , pursuant to a binding written contract (or tender offer filed with the Securities and Exchange Commission) in effect on  August 2, 1989 , and at all times thereafter before such acquisition or redemption, or \n \n “(C)  any distribution with respect to stock after  August 2, 1989 , which was declared on or before  August 2, 1989 . \n \n\n Any distribution to which the preceding sentence applies shall be taken into account under section 172(m)(3)(C)(ii)(I) of the Internal Revenue Code of 1986 (relating to base period for distributions).”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 104(b)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 301(b)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  section 901(d)(4)(B) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nPub. L. 99–514, title IX, §\u202f903(c) ,  Oct. 22, 1986 ,  100 Stat. 2384 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to losses incurred in taxable years beginning after  December 31, 1986 . \n \n “(2)   Additional carryforward period for losses of thrift institutions .— Subparagraph (M) of section 172(b)(1) of the Internal Revenue Code of 1986 (as added by this section) shall apply to losses incurred in taxable years beginning after  December 31, 1981 .”\nAmendment by section 1303(b)(1), (2) of  Pub. L. 99–514  effective  Oct. 22, 1986 , see  section 1311(f) of Pub. L. 99–514 , as amended, set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 91(d) of Pub. L. 98–369  applicable to losses for taxable years beginning after  Dec. 31, 1983 , see  section 91(g)(6) of Pub. L. 98–369 , as amended, set out as a note under  section 461 of this title .\nPub. L. 98–369, div. A, title I, §\u202f177(d) ,  July 18, 1984 ,  98 Stat. 711 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1812(d)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2836, provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 246 of this title  and  section 1452 of Title 12 , Banks and Banking] shall take effect on  January 1, 1985 . \n \n “(2)   Adjusted basis of assets.— “(A)   In general .— Except as otherwise provided in subparagraph (B), the adjusted basis of any asset of the Federal Home Loan Mortgage Corporation held on  January 1, 1985 , shall— “(i)  for purposes of determining any loss, be equal to the lesser of the adjusted basis of such asset or the fair market value of such asset as of such date, and \n \n “(ii)  for purposes of determining any gain, be equal to the higher of the adjusted basis of such asset or the fair market value of such asset as of such date. \n \n \n “(B)   Special rule for tangible depreciable property .— In the case of any tangible property which— “(i)  is of a character subject to the allowance for depreciation provided by section 167 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and \n \n “(ii)  is held by the Federal Home Loan Mortgage Corporation on  January 1, 1985 , \n \n\n the adjusted basis of such property shall be equal to the lesser of the basis of such property or the fair market value of such property as of such date. \n \n \n “(3)   Treatment of participation certificates.— “(A)   In general .— Paragraph (2) shall not apply to any right to receive income with respect to any mortgage pool participation certificate or other similar interest in any mortgage (not including any mortgage). \n \n “(B)   Treatment of certain sales after  march 15, 1984 , and before  january 1, 1985 .— If any gain is realized on the sale or exchange of any right described in subparagraph (A) after  March 15, 1984 , and before  January 1, 1985 , the gain shall not be recognized when realized but shall be recognized on  January 1, 1985 . \n \n \n “(4)   Clarification of earnings and profits of federal home loan mortgage corporation.— “(A)   Treatment of distribution of preferred stock, etc .— For purposes of the Internal Revenue Code of 1986, the distribution of preferred stock by the Federal Home Loan Mortgage Corporation during December of 1984, and the other distributions of such stock by Federal Home Loan Banks during January of 1985, shall be treated as if they were distributions of money equal to the fair market value of the stock on the date of the distribution by the Federal Home Loan Banks (and such stock shall be treated as if it were purchased with the money treated as so distributed). No deduction shall be allowed under section 243 of the Internal Revenue Code of 1986 with respect to any dividend paid by the Federal Home Loan Mortgage Corporation out of earnings and profits accumulated before  January 1, 1985 . \n \n “(B)   Section 246 (a)  not to apply to distributions out of earnings and profits accumulated during 1985 .— Subsection (a) of section 246 of the Internal Revenue Code of 1986 shall not apply to any dividend paid by the Federal Home Loan Mortgage Corporation during 1985 out of earnings and profits accumulated after  December 31, 1984 . \n \n \n “(5)   Adjusted basis .— For purposes of this subsection, the adjusted basis of any asset shall be determined under part II of subchapter O of the Internal Revenue Code of 1986. \n \n “(6)   No carrybacks for years before 1985 .— No net operating loss, capital loss, or excess credit of the Federal Home Loan Mortgage Corporation for any taxable year beginning after  December 31, 1984 , shall be allowed as a carryback to any taxable year beginning before  January 1, 1985 . \n \n “(7)   No deduction allowed for interest on replacement obligations.— “(A)   In general .— The Federal Home Loan Mortgage Corporation shall not be allowed any deduction for interest accruing after  December 31, 1984 , on any replacement obligation. \n \n “(B)   Replacement obligation defined .— For purposes of subparagraph (A), the term ‘replacement obligation’ means any obligation to any person created after  March 15, 1984 , which the Secretary of the Treasury or his delegate determines replaces any equity or debt interest of a Federal Home Loan Bank or any other person in the Federal Home Loan Mortgage Corporation existing on such date. The preceding sentence shall not apply to any obligation with respect to which the Federal Home Loan Mortgage Corporation establishes that there is no tax avoidance effect.”\nAmendment by  section 491(d)(5) of Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f722(a)(6) ,  July 18, 1984 ,  98 Stat. 973 , provided that:  “Any amendment made by this subsection [amending this section and sections 57, 1256, and 5684 of this title, and provisions set out as a note under  section 338 of this title ] shall take effect as if included in the provisions of the Technical Corrections Act of 1982 [ Pub. L. 97–448 ] to which such amendment relates.”\nPub. L. 97–362, title I, §\u202f102(d) ,  Oct. 25, 1982 ,  96 Stat. 1728 , provided that:  “The amendments made by this section [amending this section] shall apply to net operating losses for taxable years beginning after  December 31, 1981 .”\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–34  applicable to net operating losses in taxable years ending after  Dec. 31, 1975 , with special effective date for the amendment by  section 207(a)(2)(B)(i) of Pub. L. 97–34 , and net operating loss for any taxable year ending on or before  Dec. 31, 1975 , which could be a net operating loss carryover to a taxable year ending in 1981 by reason of subsec. (b)(1)(E)(ii) (as in effect before the date of enactment of  Pub. L. 97–34  and as modified by  section 1(b) of Pub. L. 96–595 ), to be a net operating loss carryover under this section to each of the 15 taxable years following the taxable year of such loss, see  section 209(c)(1) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nPub. L. 96–595, §\u202f1(b) ,  Dec. 24, 1980 ,  94 Stat. 3464 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to the determination of the net operating loss deduction for taxable years ending after  October 4, 1976 . For purposes of applying the preceding sentence to any net operating loss for a taxable year which is not a REIT year and which ends on or before  October 4, 1976 , subclause (II) of [former] section 172(b)(1)(E)(ii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied by substituting ‘the number of REIT years to which such loss was a net operating loss carryback’ for ‘the number of taxable years to which such loss may not be a net operating loss carryback by reason of subclause (I)’. In the case of a net operating loss for a taxable year described in the preceding sentence, subclause (II) of [former] section 172(b)(1)(E)(ii) of such Code shall not apply to any taxpayer which acted so as to cause it to cease to qualify as a ‘real estate investment trust’ within the meaning of section 856 of such Code if the principal purpose for such action was to secure the benefit of the allowance of a net operating loss carryover under [former] section 172(b)(1)(B) of such Code.”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title III, §\u202f371(d) ,  Nov. 6, 1978 ,  92 Stat. 2860 , provided that:  “The amendments made by this section [amending this section and  section 537 of this title ] shall apply with respect to taxable years beginning after  September 30, 1979 .”\nPub. L. 95–600, title VI, §\u202f601(d) ,  Nov. 6, 1978 ,  92 Stat. 2897 , provided that:  “The amendments made by this section [enacting sections 1391 to 1397 and 6039B of this title and amending this section and sections 1016 and 3402 of this title] shall apply with respect to corporations chartered after  December 31, 1978 , and before  January 1, 1984 .”\nPub. L. 95–600, title VII, §\u202f701(d)(2) ,  Nov. 6, 1978 ,  92 Stat. 2900 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to losses incurred in taxable years ending after  December 31, 1975 .”\nPub. L. 95–600, title VII, §\u202f703(p)(4) ,  Nov. 6, 1978 ,  92 Stat. 2944 , provided that:  “The amendments made by this subsection [amending this section and sections 6501 and 6511 of this title] shall apply with respect to losses sustained in taxable years ending after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title VIII, §\u202f806(g)(1) ,  Oct. 4, 1976 ,  90 Stat. 1605 , provided that:  “The amendments made by subsections (a), (b), (c), and (d) [amending this section and sections 812 and 825 of this title] shall apply to losses incurred in taxable years ending after  December 31, 1975 .”\nAmendment by  section 1052(c)(3) of Pub. L. 94–455  effective with respect to taxable years beginning after  December 31, 1979 , see  section 1052(d) of Pub. L. 94–455 , set out as a note under  section 170 of this title .\nAmendment by section 1606(b), (c) of  Pub. L. 94–455  effective for taxable years ending after  Oct. 4, 1976 , see  section 1608(c) of Pub. L. 94–455 , set out as a note under  section 857 of this title .\nAmendment by  section 1901(a)(29) of Pub. L. 94–455  effective for taxable years ending after  Oct. 4, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–677, §\u202f2(d) ,  Jan. 12, 1971 ,  84 Stat. 2062 , provided that:  “The amendments made by this section [amending this section] shall apply in respect of foreign expropriation losses sustained in taxable years ending after  December 31, 1958 .”\nPub. L. 90–225, §\u202f3(b) ,  Dec. 27, 1967 ,  81 Stat. 733 , provided that:  “No interest shall be paid or allowed with respect to any overpayment of tax resulting from the application of the amendments made by subsection (a) [amending this section] for any period prior to the date of the enactment of this Act [ Dec. 27, 1967 ].”\nPub. L. 90–225, §\u202f3(c) ,  Dec. 27, 1967 ,  81 Stat. 733 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to net operating losses sustained in taxable years ending after  December 31, 1966 .”\nPub. L. 88–272, title II, §\u202f210(c) ,  Feb. 26, 1964 ,  78 Stat. 49 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall apply in respect of foreign expropriation losses (as defined in section 172(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by subsection (a)(5) of this section), sustained in taxable years ending after  December 31, 1958 .”\nAmendment by  section 234(b)(5) of Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 234(c) of Pub. L. 88–272 , set out as a note under  section 1503 of this title .\nPub. L. 87–794, title III, §\u202f317(b) ,  Oct. 11, 1962 ,  76 Stat. 889 , provided that the amendment made by that section is effective with respect to net operating losses for taxable years ending after  Dec. 31, 1955 .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nPub. L. 87–710, §\u202f2 ,  Sept. 27, 1962 ,  76 Stat. 649 , provided that:  “The amendments made by the first section of this Act [amending this section] shall apply only with respect to net operating losses for taxable years ending after  December 31, 1955 .”\nPub. L. 85–866, title II, §\u202f203(c) ,  Sept. 2, 1958 ,  72 Stat. 1679 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply in respect of net operating losses for taxable years ending after  December 31, 1957 .”\nAmendment by section 14(a), (b) of  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title I, §\u202f64(e) ,  Sept. 2, 1958 ,  72 Stat. 1657 , provided that:  “The amendments made by this section [enacting sections 1371 to 1377 and 6037 of this title, amending this section and sections 1016 and 1504, and renumbering former section 6037 as 6038 of this title] shall apply only with respect to taxable years beginning after  December 31, 1957 ”.\nPub. L. 111–92, §\u202f13(d) ,  Nov. 6, 2009 ,  123 Stat. 2994 , provided that:  “The Secretary of [the] Treasury or the Secretary’s designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section [amending this section and sections 56 and 810 of this title], including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.”\nPub. L. 111–5, div. B, title I, §\u202f1211(c) ,  Feb. 17, 2009 ,  123 Stat. 336 , provided that:  “The Secretary of [the] Treasury or the Secretary’s designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section [amending this section], including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.”\nFor provisions that nothing in amendment by  section 11811 of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 116–136, div. A, title II, §\u202f2303(e) , as added by  Pub. L. 116–260, div. N, title II, §\u202f281(a) ,  Dec. 27, 2020 ,  134 Stat. 1983 , provided that: \n “(1)   Election to disregard application of amendments made by subsections ( a ) and ( b).— “(A)   In general .— If a taxpayer who has a farming loss (within the meaning of section 172(b)(1)(B)(ii) of the Internal Revenue Code of 1986) for any taxable year beginning in 2018, 2019, or 2020 makes an election under this paragraph, then— “(i)  the amendments made by subsection (a) [amending this section and  section 860E of this title ] shall not apply to any taxable year beginning in 2018, 2019, or 2020, and \n \n “(ii)  the amendments made by subsection (b) [amending this section] shall not apply to any net operating loss arising in any taxable year beginning in 2018, 2019, or 2020. \n \n \n “(B)   Election.— “(i)   In general .— Except as provided in clause (ii)(II), an election under this paragraph shall be made in such manner as may be prescribed by the Secretary. Such election, once made, shall be irrevocable. \n \n “(ii)   Time for making election.— “(I)   In general .— An election under this paragraph shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the taxpayer’s first taxable year ending after the date of the enactment of the COVID-related Tax Relief Act of 2020 [subtitle B of title II of div. N of  Pub. L. 116–260 , approved  Dec. 27, 2020 ]. \n \n “(II)   Previously filed returns .— In the case of any taxable year for which the taxpayer has filed a return of Federal income tax before the date of the enactment of the COVID-related Tax Relief Act of 2020 which disregards the amendments made by subsections (a) and (b), such taxpayer shall be treated as having made an election under this paragraph unless the taxpayer amends such return to reflect such amendments by the due date (including extensions of time) for filing the taxpayer’s return for the first taxable year ending after the date of the enactment of the COVID-related Tax Relief Act of 2020. \n \n \n \n “(C)   Regulations .— The Secretary of the Treasury (or the Secretary’s delegate) shall issue such regulations and other guidance as may be necessary to carry out the purposes of this paragraph, including regulations and guidance relating to the application of the rules of section 172(a) of the Internal Revenue Code of 1986 (as in effect before the date of the enactment of the CARES Act [ Pub. L. 116–136 , approved  Mar. 27, 2020 ]) to taxpayers making an election under this paragraph. \n \n \n “(2)   Revocation of election to waive carryback .— The last sentence of section 172(b)(3) of the Internal Revenue Code of 1986 and the last sentence of section 172(b)(1)(B) of such Code shall not apply to any election— “(A)  which was made before the date of the enactment of the COVID-related Tax Relief Act of 2020, and \n \n “(B)  which relates to the carryback period provided under section 172(b)(1)(B) of such Code with respect to any net operating loss arising in taxable years beginning in 2018 or 2019.”\n[ Pub. L. 116–260, div. N, title II, §\u202f281(b) ,  Dec. 27, 2020 ,  134 Stat. 1984 , provided that:  “The amendment made by this section [enacting  section 2303(e) of Pub. L. 116–136 , set out above] shall take effect as if included in section 2303 of the CARES Act [ Pub. L. 116–136 ].” \n]\nPub. L. 108–311, title IV, §\u202f403(b)(2) ,  Oct. 4, 2004 ,  118 Stat. 1187 , provided that:  \n “In the case of a net operating loss for a taxable year ending during 2001 or 2002— \n “(A)  an application under section 6411(a) of the Internal Revenue Code of 1986 with respect to such loss shall not fail to be treated as timely filed if filed before  November 1, 2002 , \n \n “(B)  any election made under section 172(b)(3) of such Code may (notwithstanding such section) be revoked before  November 1, 2002 , and \n \n “(C)  any election made under [former] section 172(j) of such Code shall (notwithstanding such section) be treated as timely made if made before  November 1, 2002 .”\nPub. L. 105–134, title III, §\u202f301(b) ,  Dec. 2, 1997 ,  111 Stat. 2585 , provided that:  “This Act [see Short Title of 1997 Amendment note set out under  section 20101 of Title 49 , Transportation] constitutes Amtrak reform legislation within the meaning of section 977(f)(1) of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 , set out as a note below].”\nPub. L. 105–34, title IX, §\u202f977 ,  Aug. 5, 1997 ,  111 Stat. 899 , as amended by  Pub. L. 105–178, title IX, §\u202f9007(a) ,  June 9, 1998 ,  112 Stat. 506 ;  Pub. L. 105–206, title VI, §\u202f6009(e) ,  July 22, 1998 ,  112 Stat. 812 , provided that: \n “(a)   Elective Carryback.— “(1)   In general .— If the National Railroad Passenger Corporation (in this section referred to as the ‘Corporation’)— “(A)  makes an election under this section for its first taxable year ending after  September 30, 1997 , and \n \n “(B)  agrees to the conditions specified in paragraph (2), \n \n\n then the Corporation shall be treated as having made a payment of the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for such first taxable year and the succeeding taxable year in an amount (for each such taxable year) equal to 50 percent of the amount determined under paragraph (3). Each such payment shall be treated as having been made by the Corporation on the last day prescribed by law (without regard to extensions) for filing its return of tax under chapter 1 of such Code for the taxable year to which such payment relates. \n \n “(2)   Conditions.— “(A)   In general .— This section shall only apply to the Corporation if it agrees (in such manner as the Secretary of the Treasury or his delegate may prescribe) to— “(i)  except as provided in clause (ii), use any refund of the payment described in paragraph (1) (and any interest thereon) solely to finance qualified expenses of the Corporation, and \n \n “(ii)  make the payments to non-Amtrak States as described in subsection (c). \n \n \n “(B)   Repayment.— “(i)   In general .— The Corporation shall repay to the United States any amount not used in accordance with this paragraph and any amount remaining unused as of  January 1, 2010 . \n \n “(ii)   Special rules .— For purposes of clause (i)— \u2001\u2001\u2001\u2001\u2001“(I)  no amount shall be treated as remaining unused as of  January 1, 2010 , if it is obligated as of such date for a qualified expense, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the Corporation shall not be treated as failing to meet the requirements of clause (i) by reason of investing any amount for a temporary period. \n \n \n \n \n “(3)   Amount .— For purposes of paragraph (1)— “(A)   In general .— The amount determined under this paragraph shall be the lesser of— “(i)  35 percent of the Corporation’s existing qualified carryovers, or \n \n “(ii)  the Corporation’s net tax liability for the carryback period. \n \n \n “(B)   Dollar limit .— Such amount shall not exceed $2,323,000,000. \n \n \n \n “(b)   Existing Qualified Carryovers; Net Tax Liability .— For purposes of this section— “(1)   Existing qualified carryovers .— The term ‘existing qualified carryovers’ means the aggregate of the amounts which are net operating loss carryovers under section 172(b) of the Internal Revenue Code of 1986 to the Corporation’s first taxable year ending after  September 30, 1997 . \n \n “(2)   Net tax liability for carryback period.— “(A)   In general .— The Corporation’s net tax liability for the carryback period is the aggregate of the net tax liability of the Corporation’s railroad predecessors for taxable years in the carryback period. \n \n “(B)   Net tax liability .— The term ‘net tax liability’ means, with respect to any taxable year, the amount of the tax imposed by chapter 1 of the Internal Revenue Code of 1986 (or any corresponding provision of prior law) for such taxable year, reduced by the sum of the credits allowable against such tax under such Code (or any corresponding provision of prior law). \n \n “(C)   Carryback period .— The term ‘carryback period’ means the period— “(i)  which begins with the first taxable year of any railroad predecessor beginning before  January 1, 1971 , for which there is a net tax liability, and \n \n “(ii)  which ends with the last taxable year of any railroad predecessor beginning before  January 1, 1971 . \n \n \n \n “(3)   Railroad predecessor.— “(A)   In general .— The term ‘railroad predecessor’ means— “(i)  any railroad which entered into a contract under section 401 or 404(a) of the Rail Passenger Service Act of 1970 [former sections 561 and 564(a) of Title 45, Railroads] relieving the railroad of its entire responsibility for the provision of intercity rail passenger service, and \n \n “(ii)  any predecessor thereof. \n \n \n “(B)   Consolidated returns .— If any railroad described in subparagraph (A) was a member of an affiliated group which filed a consolidated return for any taxable year in the carryback period, each member of such group shall be treated as a railroad predecessor for such year. \n \n \n \n “(c)   Payments to Non-Amtrak States.— “(1)   In general .— Within 30 days after receipt of any refund of any payment described in subsection (a)(1), the Corporation shall pay to each non-Amtrak State an amount equal to 1 percent of the amount of such refund. \n \n “(2)   Use of payment .— Each non-Amtrak State shall use the payment described in paragraph (1) (and any interest thereon) solely to finance qualified expenses of the State. \n \n “(3)   Repayment .— A non-Amtrak State shall pay to the United States— “(A)  any portion of the payment received by the State under paragraph (1) (and any interest thereon) which is used for a purpose other than to finance qualified expenses of the State or which remains unused as of  January 1, 2010 , or \n \n “(B)  if such State ceases to be a non-Amtrak State, the portion of such payment (and any interest thereon) remaining as of the date of the cessation. \n \n\n Rules similar to the rules of subsection (a)(2)(B) shall apply for purposes of this paragraph. \n \n \n “(d)   Tax Consequences.— “(1)   Reduction in carryovers .— If the Corporation elects the application of this section, the Corporation’s existing qualified carryovers shall be reduced by an amount equal to the amount determined under subsection (a)(3) divided by 0.35. \n \n “(2)   Reduction in tax paid by railroad predecessors.— “(A)   In general .— The Secretary of the Treasury or his delegate shall appropriately adjust the tax account of each railroad predecessor to reduce the net tax liability of such predecessor for taxable years beginning in the carryback period which is offset by reason of the application of this section. \n \n “(B)   FIFO ordering rule .— The Secretary shall make the adjustments under subparagraph (A) first for the earliest year in the carryback period and then for each subsequent year in such period. \n \n “(C)   No effect on other taxpayers .— In no event shall any taxpayer other than the Corporation be allowed a refund or credit by reason of this section. \n \n “(D)   Waiver of limitations .— If the adjustment under subparagraph (A) is barred by the operation of any law or rule of law, such law or rule of law shall be waived solely for purposes of making such adjustment. \n \n \n “(3)   Tax treatment of expenditures .— With respect to any payment by the Corporation of qualified expenses described in subsection (e)(1)(A) during any taxable year from the amount of any refund of the payment described in subsection (a)(1)— “(A)  no deduction shall be allowed to the Corporation with respect to any amount paid or incurred which is attributable to such amount, and \n \n “(B)  the basis of any property shall be reduced by the portion of the cost of such property which is attributable to such amount. \n \n \n “(4)   Payments to a non-amtrak state .— No deduction shall be allowed to the Corporation under chapter 1 of the Internal Revenue Code of 1986 for any payment to a non-Amtrak State required under subsection (a)(2)(A)(ii). \n \n \n “(e)   Definitions .— For purposes of this section— “(1)   Qualified expenses .— The term ‘qualified expenses’ means expenses incurred for— “(A)  in the case of the Corporation— “(i)  the acquisition of equipment, rolling stock, and other capital improvements, the upgrading of maintenance facilities, and the maintenance of existing equipment, in intercity passenger rail service, and \n \n “(ii)  the payment of interest and principal on obligations incurred for such acquisition, upgrading, and maintenance, and \n \n \n “(B)  in the case of a non-Amtrak State— “(i)  the acquisition of equipment, rolling stock, and other capital improvements, the upgrading of maintenance facilities, and the maintenance of existing equipment, in intercity passenger rail service, \n \n “(ii)  the acquisition of equipment, rolling stock, and other capital improvements, the upgrading of maintenance facilities, and the maintenance of existing equipment, in intercity bus service, \n \n “(iii)  the purchase of intercity passenger rail services from the Corporation, \n \n “(iv)  capital expenditures related to State-owned rail operations in the State, \n \n “(v)  any project that is eligible to receive funding under section 5309, 5310, or 5311 of title 49, United States Code, \n \n “(vi)  any project that is eligible to receive funding under section 103, 130, 133, 144, 149, or 152 of title 23, United States Code, \n \n “(vii)  the upgrading and maintenance of intercity primary and rural air service facilities, and the purchase of intercity air service between primary and rural airports and regional hubs, \n \n “(viii)  the provision of passenger ferryboat service within the State, \n \n “(ix)  the provision of harbor improvements within the State, and \n \n “(x)  the payment of interest and principal on obligations incurred for such acquisition, upgrading, maintenance, purchase, expenditures, provision, and projects. \n \n \n\n In the case of a non-Amtrak State which provides its own intercity passenger rail service on the date of the enactment of this paragraph [ Aug. 5, 1997 ], subparagraph (B) shall be applied by only taking into account clauses (i) and (iv). \n \n “(2)   Non-amtrak state .— The term ‘non-Amtrak State’ means any State which is not receiving intercity passenger rail service from the Corporation as of the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n \n “(f)   Authorizing Reform Required.— “(1)   In general .— The Secretary of the Treasury shall not make payment of any refund of any payment described in subsection (a)(1) earlier than the date of the enactment of Federal legislation, other than legislation included in this section, which is enacted after  July 29, 1997 , and which authorizes reforms of the National Railroad Passenger Corporation. \n \n “(2)   No interest .— Notwithstanding any other provision of law, if the payment of any refund is delayed by reason of paragraph (1), no interest shall accrue with respect to such payment prior to the 45th day following the date of the enactment of Federal legislation described in paragraph (1). \n \n “(3)   Estimate of revenue .— For purposes of estimating revenues under budget reconciliation, the impact of this section on Federal revenues shall be determined without regard to this subsection.”\n[ Pub. L. 105–178, title IX, §\u202f9007(b) ,  June 9, 1998 ,  112 Stat. 506 , provided that:  “The amendments made by this section [amending  section 977 of Pub. L. 105–34 , set out above] shall take effect as if included in the enactment of section 977 of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ].” \n]\nSubsec. (f) of this section not applicable to deduction for special assessments, see  section 2711(2) of Pub. L. 104–208 , set out as a note under  section 162 of this title .\nPub. L. 101–508, title XI, §\u202f11811(b)(2)(B) ,  Nov. 5, 1990 ,  104 Stat. 1388–533 , provided that:  “The portion of any loss which is attributable to a deferred statutory or tort liability loss (as defined in section 172(k) of the Internal Revenue Code of 1986 as in effect on the day before the date of the enactment of this Act [ Nov. 5, 1990 ]) may not be carried back to any taxable year beginning before  January 1, 1984 , by reason of the amendment made by subparagraph (A) [amending this section].”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 85–866, title I, §\u202f14 ,  Sept. 2, 1958 ,  72 Stat. 1611 , provided that if any refund or credit of any overpayment resulting from application of subsecs. (a) and (b) of  Pub. L. 85–866 , amending former subsecs. (f)(3), (4) and (g)(3), (4), was prevented on  Sept. 2, 1958  or 6 months thereafter, by operation of any law or rule of law, refund was to be allowed if a claim was filed within six months of the date of such date but such refund was to be without interest.\nFor payment of interest attributable to net operating loss carryback, see  section 83(e) of Pub. L. 85–866 , set out as a note under  section 6601 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Notwithstanding section 263, all expenditures (other than expenditures for the purchase of land or depreciable property or for the acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical) to establish, maintain, or increase the circulation of a newspaper, magazine, or other periodical shall be allowed as a deduction; except that the deduction shall not be allowed with respect to the portion of such expenditures as, under regulations prescribed by the Secretary, is chargeable to capital account if the taxpayer elects, in accordance with such regulations, to treat such portion as so chargeable. Such election, if made, must be for the total amount of such portion of the expenditures which is so chargeable to capital account, and shall be binding for all subsequent taxable years unless, upon application by the taxpayer, the Secretary permits a revocation of such election subject to such conditions as he deems necessary.\nFor election of 3-year amortization of expenditures allowable as a deduction under subsection (a), see section 59(e).\n1988—Subsec. (b).  Pub. L. 100–647  substituted “section 59(e)” for “section 59(d)”.\n1986—Subsec. (b).  Pub. L. 99–514  substituted “section 59(d)” for “section 58(i)”.\n1984—Subsec. (b).  Pub. L. 98–369  substituted “3-year” for “10-year”.\n1982— Pub. L. 97–248, §\u202f201(d)(9)(A) , designated existing provisions as subsec. (a), added subsec. (a) heading, and added subsec. (b).\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” in two places.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nFor applicability of amendment by  Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'For purposes of this section, the term “specified research or experimental expenditures” means, with respect to any taxable year, research or experimental expenditures which are paid or incurred by the taxpayer during such taxable year in connection with the taxpayer’s trade or business.\nThis section shall not apply to any expenditure for the acquisition or improvement of land, or for the acquisition or improvement of property to be used in connection with the research or experimentation and of a character which is subject to the allowance under section 167 (relating to allowance for depreciation, etc.) or section 611 (relating to allowance for depletion); but for purposes of this section allowances under section 167, and allowances under section 611, shall be considered as expenditures.\nThis section shall not apply to any expenditure paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral (including oil and gas).\nFor purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure.\nIf any property with respect to which specified research or experimental expenditures are paid or incurred is disposed, retired, or abandoned during the period during which such expenditures are allowed as an amortization deduction under this section, no deduction shall be allowed with respect to such expenditures on account of such disposition, retirement, or abandonment and such amortization deduction shall continue with respect to such expenditures.\n2017— Pub. L. 115–97  amended section generally. Prior to amendment, section consisted of subsecs. (a) to (f) relating to treatment of research and experimental expenditures as expenses, amortization of certain research and experimental expenditures, expenditure for the acquisition or improvement of land or property, ore and mineral deposit exploration expenditures, limitation to reasonable research expenditures eligible, and cross references, respectively.\n2014—Subsec. (a)(2)(A).  Pub. L. 113–295, §\u202f221(a)(31) , amended subpar. (A) generally. Prior to amendment, text read as follows: “A taxpayer may, without the consent of the Secretary, adopt the method provided in this subsection for his first taxable year—\n“(i) which begins after  December 31, 1953 , and ends after  August 16, 1954 , and\n“(ii) for which expenditures described in paragraph (1) are paid or incurred.”\nSubsec. (b)(2).  Pub. L. 113–295, §\u202f221(a)(32) , struck out “beginning after  December 31, 1953 ” after “for any taxable year”.\n1989—Subsecs. (e), (f).  Pub. L. 101–239  added subsec. (e) and redesignated former subsec. (e) as (f).\n1988—Subsec. (e)(2).  Pub. L. 100–647  substituted “section 59(e)” for “section 59(d)”.\n1986—Subsec. (e)(2).  Pub. L. 99–514  substituted “section 59(d)” for “section 58(i)”.\n1982—Subsec. (e).  Pub. L. 97–248, §\u202f201(d)(9)(B) , substituted “Cross references” for “Cross reference” in heading, designated existing provisions as par. (1), and added par. (2).\n1976—Subsec. (a)(2)(A).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(2)(A)(i).  Pub. L. 94–455, §\u202f1901(a)(30) , substituted “ August 16, 1954 ” for “the date on which this title is enacted” after “ends after”.\nSubsecs. (a)(3), (b)(1), (2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nPub. L. 115–97, title I, §\u202f13206(b) ,  Dec. 22, 2017 ,  131 Stat. 2112 , provided that:  \n “The amendments made by subsection (a) [amending this section] shall be treated as a change in method of accounting for purposes of section 481 of the Internal Revenue Code of 1986 and— \n “(1)  such change shall be treated as initiated by the taxpayer, \n \n “(2)  such change shall be treated as made with the consent of the Secretary, and \n \n “(3)  such change shall be applied only on a cut-off basis for any research or experimental expenditures paid or incurred in taxable years beginning after  December 31, 2021 , and no adjustments under section 481(a) shall be made.”\nAmendment by  Pub. L. 115–97  applicable to amounts paid or incurred in taxable years beginning after  Dec. 31, 2021 , see  section 13206(e) of Pub. L. 115–97 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–239  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 7110(e) of Pub. L. 101–239 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nFor applicability of amendment by  Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 97–34, title II, §\u202f223(a) ,  Aug. 13, 1981 ,  95 Stat. 249 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of the taxpayer’s first 2 taxable years beginning within 2 years after the date of the enactment of this Act [ Aug. 13, 1981 ], all research and experimental expenditures (within the meaning of section 174 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) which are paid or incurred in such year for research activities conducted in the United States shall be allocated or apportioned to sources within the United States.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer engaged in the business of farming may treat expenditures which are paid or incurred by him during the taxable year for the purpose of soil or water conservation in respect of land used in farming, or for the prevention of erosion of land used in farming, or for endangered species recovery, as expenses which are not chargeable to capital account. The expenditures so treated shall be allowed as a deduction.\nThe amount deductible under subsection (a) for any taxable year shall not exceed 25 percent of the gross income derived from farming during the taxable year. If for any taxable year the total of the expenditures treated as expenses which are not chargeable to capital account exceeds 25 percent of the gross income derived from farming during the taxable year, such excess shall be deductible for succeeding taxable years in order of time; but the amount deductible under this section for any one such succeeding taxable year (including the expenditures actually paid or incurred during the taxable year) shall not exceed 25 percent of the gross income derived from farming during the taxable year.\nA taxpayer may, without the consent of the Secretary, adopt the method provided in this section for the taxpayer’s first taxable year for which expenditures described in subsection (a) are paid or incurred.\nA taxpayer may, with the consent of the Secretary, adopt at any time the method provided in this section.\nThe method adopted under this section shall apply to all expenditures described in subsection (a). The method adopted shall be adhered to in computing taxable income for the taxable year and for all subsequent taxable years unless, with the approval of the Secretary, a change to a different method is authorized with respect to part or all of such expenditures.\nIn the case of an assessment levied to defray expenditures for property described in clause (ii) of the last sentence of subsection (c)(1), if the amount of such assessment paid or incurred by the taxpayer during the taxable year (determined without the application of this paragraph) is in excess of an amount equal to 10 percent of the aggregate amounts which have been and will be assessed as the taxpayer’s share of the expenditures by the district for such property, and if such excess is more than $500, the entire excess shall be treated as paid or incurred ratably over each of the 9 succeeding taxable years.\nIf paragraph (1) applies to an assessment and the land with respect to which such assessment was made is sold or otherwise disposed of by the taxpayer (other than by the reason of his death) during the 9 succeeding taxable years, any amount of the excess described in paragraph (1) which has not been treated as paid or incurred for a taxable year ending on or before the sale or other disposition shall be added to the adjusted basis of such land immediately prior to its sale or other disposition and shall not thereafter be treated as paid or incurred ratably under paragraph (1).\nIf paragraph (1) applies to an assessment and the taxpayer dies during the 9 succeeding taxable years, any amount of the excess described in paragraph (1) which has not been treated as paid or incurred for a taxable year ending before his death shall be treated as paid or incurred in the taxable year in which he dies.\nThe Endangered Species Act of 1973, referred to in subsec. (c)(1), (3)(A)(i), is  Pub. L. 93–205 ,  Dec. 28, 1973 ,  87 Stat. 884 , which is classified principally to chapter 35 (§\u202f1531 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Short Title note set out under  section 1531 of Title 16  and Tables.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2014—Subsec. (d)(1).  Pub. L. 113–295  amended par. (1) generally. Prior to amendment, text read as follows: “A taxpayer may, without the consent of the Secretary, adopt the method provided in this section for his first taxable year—\n“(A) which begins after  December 31, 1953 , and ends after  August 16, 1954 , and\n“(B) for which expenditures described in subsection (a) are paid or incurred.”\n2008— Pub. L. 110–246, §\u202f15303(a)(2)(B) , inserted “;\u2000endangered species recovery expenditures” after “conservation expenditures” in section catchline.\nSubsec. (a).  Pub. L. 110–246, §\u202f15303(a)(2)(A) , inserted “,\u2000or for endangered species recovery” after “erosion of land used in farming”.\nSubsec. (c)(1).  Pub. L. 110–246, §\u202f15303(a)(1) , (2)(A), in introductory provisions, inserted “,\u2000or for endangered species recovery” after “erosion of land used in farming” and “Such term shall include expenditures paid or incurred for the purpose of achieving site-specific management actions recommended in recovery plans approved pursuant to the Endangered Species Act of 1973.” after first sentence.\nSubsec. (c)(3)(A).  Pub. L. 110–246, §\u202f15303(b)(1) , inserted “or endangered species recovery plan” after “conservation plan” in heading.\nSubsec. (c)(3)(A)(i).  Pub. L. 110–246, §\u202f15303(b)(2) , inserted “or the recovery plan approved pursuant to the Endangered Species Act of 1973” after “Department of Agriculture”.\n1986—Subsec. (c)(3).  Pub. L. 99–514  added par. (3).\n1976—Subsec. (d)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(1)(A).  Pub. L. 94–455, §\u202f1901(a)(30) , substituted “ August 16, 1954 ” for “the date on which this title is enacted” after “and ends after”.\nSubsecs. (d)(2), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1968—Subsec. (c)(1).  Pub. L. 90–630, §\u202f5(a) , in text following subpar. (B), designated as cl. (i) existing provisions covering amounts which, if paid or incurred by the taxpayer, would without regard to the exception constitute deductible expenditures, and added cl. (ii).\nSubsec. (f).  Pub. L. 90–630, §\u202f5(b) , added subsec. (f).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15303(c) ,  May 22, 2008 ,  122 Stat. 1502 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15303(c),  June 18, 2008 ,  122 Stat. 1664 , 2264, provided that:  “The amendments made by this section [amending this section] shall apply to expenditures paid or incurred after  December 31, 2008 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 99–514, title IV, §\u202f401(b) ,  Oct. 22, 1986 ,  100 Stat. 2221 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or incurred after  December 31, 1986 , in taxable years ending after such date.”\nAmendment by  section 1901(a)(30) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 90–630, §\u202f5(c) ,  Oct. 22, 1968 ,  82 Stat. 1330 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to assessments levied after the date of the enactment of this Act [ Oct. 22, 1968 ] in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of a domestic corporation, there shall be allowed as a deduction amounts (to the extent not compensated for) paid or incurred pursuant to an agreement entered into under section 3121( l ) with respect to services performed by United States citizens employed by foreign subsidiary corporations. Any reimbursement of any amount previously allowed as a deduction under this section shall be included in gross income for the taxable year in which received.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  June 29, 1956, ch. 464, §\u202f4(a) ,  70 Stat. 406 ; amended  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  90 Stat. 1834 , related to deductions for trademark and trade name expenditures.\nPub. L. 99–514, title II, §\u202f241(c) ,  Oct. 22, 1986 ,  100 Stat. 2181 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending sections 312 and 1016 of this title and repealing this section] shall apply to expenditures paid or incurred after  December 31, 1986 . \n \n “(2)   Transitional rule .— The amendments made by this section shall not apply to any expenditure incurred— “(A)  pursuant to a binding contract entered into before  March 2, 1986 , or \n \n “(B)  with respect to the development, protection, expansion, registration, or defense of a trademark or trade name commenced before  March 2, 1986 , but only if not less than the lesser of $1,000,000 or 5 percent of the aggregate cost of such development, protection, expansion, registration, or defense has been incurred or committed before such date. \n \n\n The preceding sentence shall not apply to any expenditure with respect to a trademark or trade name placed in service after  December 31, 1987 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In determining the amount of the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization in respect of any cost of acquiring the lease, the term of the lease shall be treated as including all renewal options (and any other period for which the parties reasonably expect the lease to be renewed) if less than 75 percent of such cost is attributable to the period of the term of the lease remaining on the date of its acquisition.\nFor purposes of subsection (a), in determining the period of the term of the lease remaining on the date of acquisition, there shall not be taken into account any period for which the lease may subsequently be renewed, extended, or continued pursuant to an option exercisable by the lessee.\n1988—Subsec. (a).  Pub. L. 100–647  substituted “the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization” for “the deduction allowable to a lessee of a lease for any taxable year for amortization under section 167, 169, 179, 185, 190, 193, or 194”.\n1986— Pub. L. 99–514, §\u202f201(d)(2)(A) , in amending section generally, substituted provision relating to amortization of cost of acquiring a lease, subsec. (a) setting out a general rule and subsec. (b) excluding certain periods, for former provision for depreciation or amortization of improvements made by lessee on lessor’s property, subsec. (a) setting out a general rule, subsec. (b), in case of related lessee and lessor, setting out a general rule in par. (1) and defining related persons in par. (2), and subsec. (c) setting out a reasonable certainty test.\nSubsec. (b)(2)(B).  Pub. L. 99–514, §\u202f1812(c)(4)(B) , inserted before the period “and subsection (f)(1)(A) of such section shall not apply”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(2)(A) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(2)(A) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 1812(c)(4)(B) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 85–866, title I, §\u202f15(c) ,  Sept. 2, 1958 ,  72 Stat. 1613 , provided that:  “The amendments made by this section [enacting this section and amending analysis preceding  section 161 of this title ] shall apply with respect to costs of acquiring a lease incurred, and improvements begun, after  July 28, 1958  (other than improvements which, on  July 28, 1958 , and at all times thereafter, the lessee was under a binding legal obligation to make).”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer may elect to treat the cost of any section 179 property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the section 179 property is placed in service.\nThe aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $1,000,000.\nThe limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property placed in service during such taxable year exceeds $2,500,000.\nThe amount allowed as a deduction under subsection (a) for any taxable year (determined after the application of paragraphs (1) and (2)) shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year.\nFor purposes of this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the deduction allowable under this section.\nThe cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000.\nThe amount of any increase under subparagraph (A) shall be rounded to the nearest multiple of $10,000 ($100 in the case of any increase in the amount under paragraph (5)(A)).\nAny election made under this section, and any specification contained in any such election, may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable.\nFor purposes of this section, the cost of property does not include so much of the basis of such property as is determined by reference to the basis of other property held at any time by the person acquiring such property.\nThis section shall not apply to estates and trusts.\nFor purposes of paragraphs (2) and (6), the term “controlled group” has the meaning assigned to it by section 1563(a), except that, for such purposes, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1).\nIn the case of a partnership, the limitations of subsection (b) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders.\nNo credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a).\nThe Secretary shall, by regulations, provide for recapturing the benefit under any deduction allowable under subsection (a) with respect to any property which is not used predominantly in a trade or business at any time.\n2018—Subsec. (d)(1)(B)(ii).  Pub. L. 115–141, §\u202f401(b)(15)(B) , substituted “subsection (e)” for “subsection (f)”.\nSubsecs. (e), (f).  Pub. L. 115–141, §\u202f401(b)(15)(A) , redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to special rules for qualified disaster assistance property.\n2017—Subsec. (b)(1).  Pub. L. 115–97, §\u202f13101(a)(1) , substituted “$1,000,000” for “$500,000”.\nSubsec. (b)(2).  Pub. L. 115–97, §\u202f13101(a)(2) , substituted “$2,500,000” for “$2,000,000”.\nSubsec. (b)(6)(A).  Pub. L. 115–97, §\u202f13101(a)(3)(B)(i) , substituted “paragraphs (1), (2), and (5)(A)” for “paragraphs (1) and (2)” in introductory provisions.\nPub. L. 115–97, §\u202f13101(a)(3)(A)(i) , substituted “2018” for “2015” in introductory provisions.\nSubsec. (b)(6)(A)(ii).  Pub. L. 115–97, §\u202f13101(a)(3)(A)(ii) , substituted “calendar year 2017” for “calendar year 2014”.\nPub. L. 115–97, §\u202f11002(d)(1)(R) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (b)(6)(B).  Pub. L. 115–97, §\u202f13101(a)(3)(B)(ii) , inserted “($100 in the case of any increase in the amount under paragraph (5)(A))” after “$10,000”.\nSubsec. (d)(1).  Pub. L. 115–97, §\u202f13101(c) , inserted “(other than paragraph (2) thereof)” after “section 50(b)” in concluding provisions.\nSubsec. (d)(1)(B).  Pub. L. 115–97, §\u202f13101(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “which is section 1245 property (as defined in section 1245(a)(3)), and”.\nSubsec. (f).  Pub. L. 115–97, §\u202f13101(b)(2) , amended subsec. (f) generally. Prior to amendment, subsec. (f) consisted of pars. (1) and (2) defining “section 179 property” and “qualified real property”, respectively.\n2015—Subsec. (b)(1).  Pub. L. 114–113, §\u202f124(a)(1) , substituted “shall not exceed $500,000.” for “shall not exceed—\n“(A) $250,000 in the case of taxable years beginning after 2007 and before 2010,\n“(B) $500,000 in the case of taxable years beginning after 2009 and before 2015, and\n“(C) $25,000 in the case of taxable years beginning after 2014.”\nSubsec. (b)(2).  Pub. L. 114–113, §\u202f124(a)(2) , substituted “exceeds $2,000,000.” for “exceeds—\n“(A) $800,000 in the case of taxable years beginning after 2007 and before 2010,\n“(B) $2,000,000 in the case of taxable years beginning after 2009 and before 2015, and\n“(C) $200,000 in the case of taxable years beginning after 2014.”\nSubsec. (b)(6).  Pub. L. 114–113, §\u202f124(f) , added par. (6).\nSubsec. (c)(2).  Pub. L. 114–113, §\u202f124(d) , struck out “irrevocable” after “Election” in heading and “may not be revoked except with the consent of the Secretary. Any such election or specification with respect to any taxable year beginning after 2002 and before 2015” after “such election,” in text.\nSubsec. (d)(1).  Pub. L. 114–113, §\u202f124(e) , struck out “and shall not include air conditioning or heating units” after “section 50(b)” in concluding provisions.\nSubsec. (d)(1)(A)(ii).  Pub. L. 114–113, §\u202f124(b) , substituted “and to which section 167 applies” for “,\u2000to which section 167 applies, and which is placed in service in a taxable year beginning after 2002 and before 2015”.\nSubsec. (f)(1).  Pub. L. 114–113, §\u202f124(c)(2)(A) , struck out “beginning after 2009 and before 2016” after “any taxable year” in introductory provisions.\nPub. L. 114–113, §\u202f124(c)(1)(A) , substituted “2016” for “2015” in introductory provisions.\nSubsec. (f)(3).  Pub. L. 114–113, §\u202f124(c)(2)(B) , struck out par. (3). Text read as follows: “For purposes of applying the limitation under subsection (b)(1)(B), not more than $250,000 of the aggregate cost which is taken into account under subsection (a) for any taxable year may be attributable to qualified real property.”\nSubsec. (f)(4).  Pub. L. 114–113, §\u202f124(c)(2)(B) , struck out par. (4) which related to limitation of carryover of amounts attributable to qualified real property.\nPub. L. 114–113, §\u202f124(c)(1)(B) , substituted “2015” for “2014” wherever appearing.\nSubsec. (f)(4)(C).  Pub. L. 114–113, §\u202f124(c)(1)(C) , substituted “2013, and 2014” for “and 2013” in heading.\n2014—Subsec. (b)(1)(B).  Pub. L. 113–295, §\u202f127(a)(1)(A) , substituted “beginning after 2009 and before 2015” for “beginning in 2010, 2011, 2012, or 2013”.\nSubsec. (b)(1)(C).  Pub. L. 113–295, §\u202f127(a)(1)(B) , substituted “2014” for “2013”.\nSubsec. (b)(2)(B).  Pub. L. 113–295, §\u202f127(a)(2)(A) , substituted “beginning after 2009 and before 2015” for “beginning in 2010, 2011, 2012, or 2013”.\nSubsec. (b)(2)(C).  Pub. L. 113–295, §\u202f127(a)(2)(B) , substituted “2014” for “2013”.\nSubsec. (c)(2).  Pub. L. 113–295, §\u202f127(c) , substituted “2015” for “2014”.\nSubsec. (d)(1)(A)(ii).  Pub. L. 113–295, §\u202f127(b) , substituted “2015” for “2014”.\nSubsec. (f)(1).  Pub. L. 113–295, §\u202f127(d)(1) , substituted “beginning after 2009 and before 2015” for “beginning in 2010, 2011, 2012, or 2013” in introductory provisions.\nSubsec. (f)(4).  Pub. L. 113–295, §\u202f127(d)(2)(A) , substituted “2014” for “2013” wherever appearing.\nSubsec. (f)(4)(C).  Pub. L. 113–295, §\u202f127(d)(2)(B) , substituted “2011, 2012, and 2013” for “2011 and 2012” in heading.\n2013—Subsec. (b)(1)(B).  Pub. L. 112–240, §\u202f315(a)(1)(A) , substituted “2010, 2011, 2012, or 2013, and” for “2010 or 2011,”.\nSubsec. (b)(1)(C), (D).  Pub. L. 112–240, §\u202f315(a)(1)(B) –(D), redesignated subpar. (D) as (C), substituted “2013” for “2012”, and struck out former subpar. (C) which read as follows: “$125,000 in the case of taxable years beginning in 2012, and”.\nSubsec. (b)(2)(B).  Pub. L. 112–240, §\u202f315(a)(2)(A) , substituted “2010, 2011, 2012, or 2013, and” for “2010 or 2011,”.\nSubsec. (b)(2)(C), (D).  Pub. L. 112–240, §\u202f315(a)(2)(B) –(D), redesignated subpar. (D) as (C), substituted “2013” for “2012”, and struck out former subpar. (C) which read as follows: “$500,000 in the case of taxable years beginning in 2012, and”.\nSubsec. (b)(6).  Pub. L. 112–240, §\u202f315(a)(3) , struck out par. (6) which related to inflation adjustment.\nSubsec. (c)(2).  Pub. L. 112–240, §\u202f315(c) , substituted “2014” for “2013”.\nSubsec. (d)(1)(A)(ii).  Pub. L. 112–240, §\u202f315(b) , substituted “2014” for “2013”.\nSubsec. (f)(1).  Pub. L. 112–240, §\u202f315(d)(1) , substituted “2010, 2011, 2012, or 2013” for “2010 or 2011” in introductory provisions.\nSubsec. (f)(4)(A), (B).  Pub. L. 112–240, §\u202f315(d)(2)(A) , substituted “2013” for “2011”.\nSubsec. (f)(4)(C).  Pub. L. 112–240, §\u202f315(d)(2)(B) , substituted “2010, 2011 and 2012” for “2010” in heading and inserted at end “For the last taxable year beginning in 2013, the amount determined under subsection (b)(3)(A) for such taxable year shall be determined without regard to this paragraph.”\nPub. L. 112–240, §\u202f315(d)(2)(A) , substituted “2013” for “2011” in two places.\n2010—Subsec. (b)(1).  Pub. L. 111–240, §\u202f2021(a)(1) , substituted “shall not exceed—” for “shall not exceed $25,000 ($250,000 in the case of taxable years beginning after 2007 and before 2011).” and added subpars. (A) to (C).\nPub. L. 111–147, §\u202f201(a)(1) , substituted “($250,000 in the case of taxable years beginning after 2007 and before 2011)” for “($125,000 in the case of taxable years beginning after 2006 and before 2011)”.\nSubsec. (b)(1)(C), (D).  Pub. L. 111–312, §\u202f402(a) , added subpars. (C) and (D) and struck out former subpar. (C), which read as follows: “$25,000 in the case of taxable years beginning after 2011.”\nSubsec. (b)(2).  Pub. L. 111–240, §\u202f2021(a)(2) , substituted “exceeds—” for “exceeds $200,000 ($800,000 in the case of taxable years beginning after 2007 and before 2011).” and added subpars. (A) to (C).\nPub. L. 111–147, §\u202f201(a)(2) , substituted “($800,000 in the case of taxable years beginning after 2007 and before 2011)” for “($500,000 in the case of taxable years beginning after 2006 and before 2011)”.\nSubsec. (b)(2)(C), (D).  Pub. L. 111–312, §\u202f402(b) , added subpars. (C) and (D) and struck out former subpar. (C), which read as follows: “$200,000 in the case of taxable years beginning after 2011.”\nSubsec. (b)(5).  Pub. L. 111–147, §\u202f201(a)(3) , (4), redesignated par. (6) as (5) and struck out former par. (5) which related to inflation adjustments.\nSubsec. (b)(6).  Pub. L. 111–312, §\u202f402(c) , added par. (6).\nPub. L. 111–147, §\u202f201(a)(4) , redesignated par. (6) as (5).\nSubsec. (b)(7).  Pub. L. 111–147, §\u202f201(a)(3) , struck out par. (7) which related to increase in limitations for 2008 and 2009.\nSubsec. (c)(2).  Pub. L. 111–312, §\u202f402(e) , substituted “2013” for “2012”.\nPub. L. 111–240, §\u202f2021(c) , substituted “2012” for “2011”.\nSubsec. (d)(1)(A)(ii).  Pub. L. 111–312, §\u202f402(d) , substituted “2013” for “2012”.\nPub. L. 111–240, §\u202f2021(d) , substituted “2012” for “2011”.\nSubsec. (f).  Pub. L. 111–240, §\u202f2021(b) , added subsec. (f).\nSubsec. (f)(2)(B).  Pub. L. 111–312, §\u202f737(b)(3)(A) , struck out “(without regard to the dates specified in subparagraph (A)(i) thereof)” after “section 168(e)(7)”.\nSubsec. (f)(2)(C).  Pub. L. 111–312, §\u202f737(b)(3)(B) , struck out “(without regard to subparagraph (E) thereof)” after “section 168(e)(8)”.\n2009—Subsec. (b)(7).  Pub. L. 111–5  substituted “2008, and 2009” for “2008” in heading and “2008, or 2009” for “2008” in introductory provisions.\n2008—Subsec. (b)(7).  Pub. L. 110–185  added par. (7).\nSubsec. (e).  Pub. L. 110–343  added subsec. (e).\n2007—Subsec. (b)(1).  Pub. L. 110–28, §\u202f8212(a) , (b)(1), substituted “$125,000 in the case of taxable years beginning after 2006” for “$100,000 in the case of taxable years beginning after 2002” and “2011” for “2010”.\nSubsec. (b)(2).  Pub. L. 110–28, §\u202f8212(a) , (b)(2), substituted “$500,000 in the case of taxable years beginning after 2006” for “$400,000 in the case of taxable years beginning after 2002” and “2011” for “2010”.\nSubsec. (b)(5)(A).  Pub. L. 110–28, §\u202f8212(a) , (c)(1), (2), in introductory provisions, substituted “2007” for “2003”, “2011” for “2010”, and “$125,000 and $500,000” for “$100,000 and $400,000”.\nSubsec. (b)(5)(A)(ii).  Pub. L. 110–28, §\u202f8212(c)(3) , substituted “2006” for “2002”.\nSubsecs. (c)(2), (d)(1)(A)(ii).  Pub. L. 110–28, §\u202f8212(a) , substituted “2011” for “2010”.\n2006—Subsecs. (b)(1), (2), (5)(A), (c)(2), (d)(1)(A)(ii).  Pub. L. 109–222  substituted “2010” for “2008”.\n2004—Subsec. (b)(1), (2), (5)(A).  Pub. L. 108–357, §\u202f201 , substituted “2008” for “2006”.\nSubsec. (b)(6).  Pub. L. 108–357, §\u202f910(a) , added par. (6).\nSubsecs. (c)(2), (d)(1)(A)(ii).  Pub. L. 108–357, §\u202f201 , substituted “2008” for “2006”.\n2003—Subsec. (b)(1).  Pub. L. 108–27, §\u202f202(a) , reenacted heading without change and amended text generally. Prior to amendment, par. (1) contained a table specifying the maximum amounts for taxable years 1997 to 2003 and thereafter which could be taken into account as the aggregate costs under subsec. (a).\nSubsec. (b)(2).  Pub. L. 108–27, §\u202f202(b) , inserted “($400,000 in the case of taxable years beginning after 2002 and before 2006)” after “$200,000”.\nSubsec. (b)(5).  Pub. L. 108–27, §\u202f202(d) , added par. (5).\nSubsec. (c)(2).  Pub. L. 108–27, §\u202f202(e) , inserted at end “Any such election or specification with respect to any taxable year beginning after 2002 and before 2006 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable.”\nSubsec. (d)(1).  Pub. L. 108–27, §\u202f202(c) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘section 179 property’ means any tangible property (to which section 168 applies) which is section 1245 property (as defined in section 1245(a)(3)) and which is acquired by purchase for use in the active conduct of a trade or business. Such term shall not include any property described in section 50(b) and shall not include air conditioning or heating units.”\n1996—Subsec. (b)(1).  Pub. L. 104–188, §\u202f1111(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $17,500.”\nSubsec. (d)(1).  Pub. L. 104–188, §\u202f1702(h)(10) , struck out “in” before “a trade or business”.\nPub. L. 104–188, §\u202f1702(h)(19) , inserted at end “Such term shall not include any property described in section 50(b) and shall not include air conditioning or heating units.”\n1993—Subsec. (b)(1).  Pub. L. 103–66  substituted “$17,500” for “$10,000”.\n1990—Subsec. (d)(1).  Pub. L. 101–508, §\u202f11813(b)(11)(A) , substituted “section 1245 property (as defined in section 1245(a)(3))” for “section 38 property”.\nSubsec. (d)(5).  Pub. L. 101–508, §\u202f11813(b)(11)(B) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “This section shall not apply to any section 179 property purchased by any person described in section 46(e)(3) unless the credit under section 38 is allowable with respect to such person for such property (determined without regard to this section).”\n1988—Subsec. (b)(3).  Pub. L. 100–647, §\u202f1002(b)(1) , amended par. (3) generally. Prior to amendment, par. (3) read as follows:\n“(A)  In general .—The aggregate cost of section 179 property taken into account under subsection (a) for any taxable year shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year.\n“(B)  Carryover of unused cost .—The amount of any cost which (but for subparagraph (A)) would have been allowed as a deduction under subsection (a) for any taxable year shall be carried to the succeeding taxable year and added to the amount allowable as a deduction under subsection (a) for such succeeding taxable year.\n“(C)  Computation of taxable income .—For purposes of this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the cost of any section 179 property.”\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f1002(a)(19) , substituted “tangible property (to which section 168 applies)” for “recovery property”.\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f202(a) , in amending subsec. (b) generally, substituted “Limitations” for “Dollar limitation” in heading, in par. (1) substituted as heading “Dollar limitation” for “In general” and in text “shall not exceed $10,000” for “shall not exceed the following applicable amount:” and a table specifying amounts for specific years, added pars. (2) to (4), and struck out former par. (2) which read as follows: “In the case of a husband and wife filing separate returns for a taxable year, the applicable amount under paragraph (1) shall be equal to 50 percent of the amount otherwise determined under paragraph (1).”\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f202(b) , inserted “in the active conduct of”.\nSubsec. (d)(8).  Pub. L. 99–514, §\u202f201(d)(3) , substituted “Treatment of” for “Dollar limitation in case of” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a partnership, the dollar limitation contained in subsection (b)(1) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders.”\nSubsec. (d)(10).  Pub. L. 99–514, §\u202f202(c) , struck out “before the close of the second taxable year following the taxable year in which it is placed in service by the taxpayer” after “at any time”.\n1984—Subsec. (b)(1).  Pub. L. 98–369  amended table by dropping items setting applicable amounts of $0 for 1981 and $5,000 for 1982, substituting an applicable amount of $5,000 for 1983, 1984, 1985, 1986, and 1987 for former table items which had set applicable amounts of $5,000 for 1983, $7,500 for 1984, $7,500 for 1985, and $10,000 for 1986 or thereafter, and added items setting applicable amounts of $7,500 for 1988 or 1989, and $10,000 for 1990 or thereafter.\n1983—Subsec. (d)(10).  Pub. L. 97–448  added par. (10).\n1982—Subsec. (d)(8).  Pub. L. 97–354  substituted “partnerships and S corporations” for “partnerships” in heading, and inserted “A similar rule shall apply in the case of an S corporation and its shareholders.”\n1981— Pub. L. 97–34  amended section generally, changing its content from provisions that formerly made available an additional first-year depreciation allowance for small businesses to provisions allowing a taxpayer to elect to treat the cost of section 179 property as an expense which is not chargeable to capital account, with any cost so treated to be allowed as a deduction for the taxable year in which the section 179 property is placed in service.\n1976—Subsecs. (c)(1), (2), (d)(6)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(8), (9).  Pub. L. 94–455, §\u202f213(a) , added par. (8) and redesignated former par. (8) as par. (9).\nSubsec. (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1969—Subsec. (d).  Pub. L. 91–172  substituted reference to component members of a controlled group for reference to members of an affiliated group in pars. (2)(B) and (b), and substituted definition of controlled group for definition of affiliated group in par. (7).\n1962—Subsec. (d)(5).  Pub. L. 87–834, §\u202f13(c)(2)(A) , substituted “section 167(h)” for “section 167(g)”.\nSubsec. (d)(8).  Pub. L. 87–834, §\u202f13(c)(2)(B) , substituted “section 167(g)” for “section 167(f)”.\nPub. L. 115–141, div. U, title IV, §\u202f401(b)(15)(C) ,  Mar. 23, 2018 ,  132 Stat. 1202 , provided that:  “The amendments made by this paragraph [amending this section] shall not apply to property placed in service before the date of the enactment of this Act [ Mar. 23, 2018 ].”\nAmendment by  section 11002(d)(1)(R) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f13101(d) ,  Dec. 22, 2017 ,  131 Stat. 2102 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service in taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f124(g) ,  Dec. 18, 2015 ,  129 Stat. 3053 , provided that: \n “(1)   Extension .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 . \n \n “(2)   Modifications .— The amendments made by subsections (c)(2) and (e) [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f127(e) ,  Dec. 19, 2014 ,  128 Stat. 4018 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f315(e) ,  Jan. 2, 2013 ,  126 Stat. 2331 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title IV, §\u202f402(f) ,  Dec. 17, 2010 ,  124 Stat. 3307 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nAmendment by  section 737(b)(3) of Pub. L. 111–312  applicable to property placed in service after  Dec. 31, 2009 , see  section 737(c) of Pub. L. 111–312 , set out as a note under  section 168 of this title .\nPub. L. 111–240, title II, §\u202f2021(e) ,  Sept. 27, 2010 ,  124 Stat. 2558 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2009 , in taxable years beginning after such date. \n \n “(2)   Extensions .— The amendments made by subsections (c) and (d) shall apply to taxable years beginning after  December 31, 2010 .”\nPub. L. 111–147, title II, §\u202f201(b) ,  Mar. 18, 2010 ,  124 Stat. 77 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 111–5, div. B, title I, §\u202f1202(b) ,  Feb. 17, 2009 ,  123 Stat. 335 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 110–343, div. C, title VII, §\u202f711(b) ,  Oct. 3, 2008 ,  122 Stat. 3929 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2007 , with respect [to] disasters declared after such date.”\nPub. L. 110–185, title I, §\u202f102(b) ,  Feb. 13, 2008 ,  122 Stat. 618 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 110–28, title VIII, §\u202f8212(d) ,  May 25, 2007 ,  121 Stat. 193 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 108–357, title VIII, §\u202f910(b) ,  Oct. 22, 2004 ,  118 Stat. 1660 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–27, title II, §\u202f202(f) ,  May 28, 2003 ,  117 Stat. 758 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 104–188, title I, §\u202f1111(b) ,  Aug. 20, 1996 ,  110 Stat. 1758 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nAmendment by section 1702(h)(10), (19) of  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 103–66, title XIII, §\u202f13116(b) ,  Aug. 10, 1993 ,  107 Stat. 432 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1992 .”\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(3) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(3) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 213(a) of Pub. L. 94–455  applicable in the case of partnership taxable years beginning after  Dec. 31, 1975 , see  section 213(f) of Pub. L. 94–455 , set out as an Effective Date note under  section 709 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to taxable years ending on or after  Dec. 31, 1970 , see  section 401(h)(3) of Pub. L. 91–172 , set out as a note under  section 1561 of this title .\nAmendment by  Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1961 , and ending after  Oct. 16, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nPub. L. 85–866, title II, §\u202f204(c) ,  Sept. 2, 1958 ,  72 Stat. 1680 , provided that:  “The amendments made by this section [enacting this section] shall apply with respect to taxable years ending after  June 30, 1958 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 102–486, title XIX, §\u202f1913(a)(1) ,  Oct. 24, 1992 ,  106 Stat. 3016 ; amended  Pub. L. 104–188, title I, §\u202f1704(j)(2) ,  Aug. 20, 1996 ,  110 Stat. 1881 ;  Pub. L. 107–147, title VI, §\u202f606(a) ,  Mar. 9, 2002 ,  116 Stat. 60 ;  Pub. L. 108–311, title III, §\u202f319(a) ,  Oct. 4, 2004 ,  118 Stat. 1182 ;  Pub. L. 109–58, title XIII, §\u202f1348 ,  Aug. 8, 2005 ,  119 Stat. 1056 , related to deduction for clean-fuel vehicles and certain refueling property. Repeal was executed to this section, which is in part VI of subchapter B of chapter 1, to reflect the probable intent of Congress, notwithstanding directory language of  Pub. L. 113–295 , which repealed section 179A in part VI of subchapter A of chapter 1.\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of a small business refiner (as defined in section 45H(c)(1)) which elects the application of this section, there shall be allowed as a deduction an amount equal to 75 percent of qualified costs (as defined in section 45H(c)(2)) which are paid or incurred by the taxpayer during the taxable year and which are properly chargeable to capital account.\nIn the case of a small business refiner with average daily domestic refinery runs for the 1-year period ending on  December 31, 2002 , in excess of 155,000 barrels, the number of percentage points described in subsection (a) shall be reduced (not below zero) by the product of such number (before the application of this subsection) and the ratio of such excess to 50,000 barrels.\nFor purposes of this title, the basis of any property shall be reduced by the portion of the cost of such property taken into account under subsection (a).\nFor purposes of section 1245, the amount of the deduction allowable under subsection (a) with respect to any property which is of a character subject to the allowance for depreciation shall be treated as a deduction allowed for depreciation under section 167.\nSection 280B shall not apply to amounts which are treated as expenses under this section.\nAn election under paragraph (1) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.\nIf any portion of the deduction available under subsection (a) is allocated to owners under paragraph (1), the cooperative shall provide any owner receiving an allocation written notice of the amount of the allocation. Such notice shall be provided before the date on which the return described in paragraph (2) is due.\n2007—Subsec. (a).  Pub. L. 110–172  substituted “qualified costs” for “qualified capital costs” and inserted “and which are properly chargeable to capital account” before period at end.\n2005—Subsec. (e).  Pub. L. 109–58  added subsec. (e).\nAmendment by  Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 7(e) of Pub. L. 110–172 , set out as a note under  section 1092 of this title .\nPub. L. 109–58, title XIII, §\u202f1324(b) ,  Aug. 8, 2005 ,  119 Stat. 1015 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendment made by section 338(a) of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 , enacting this section].”\nPub. L. 108–357, title III, §\u202f338(c) ,  Oct. 22, 2004 ,  118 Stat. 1481 , provided that:  “The amendment made by this section [enacting this section and amending sections 263, 263A, 312, 1016, and 1245 of this title] shall apply to expenses paid or incurred after  December 31, 2002 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer may elect to treat 50 percent of the cost of any qualified refinery property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified refinery property is placed in service.\nAn election under this section for any taxable year shall be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe.\nAny election made under this section may not be revoked except with the consent of the Secretary.\nA waiver under the Clean Air Act shall not be taken into account in determining whether the requirements of paragraph (1)(D) are met.\nFor purposes of this section, the term “qualified refinery” means any refinery located in the United States which is designed to serve the primary purpose of processing liquid fuel from crude oil or qualified fuels (as defined in section 45K(c)), or directly from shale or tar sands.\nAn election under paragraph (1) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.\nIf any portion of the deduction available under subsection (a) is allocated to owners under paragraph (1), the cooperative shall provide any owner receiving an allocation written notice of the amount of the allocation. Such notice shall be provided before the date on which the return described in paragraph (2) is due.\nNo deduction shall be allowed under subsection (a) to any taxpayer for any taxable year unless such taxpayer files with the Secretary a report containing such information with respect to the operation of the refineries of the taxpayer as the Secretary shall require.\nThe date of the enactment of this section, referred to in subsec. (c)(1)(B), (2)(A), is the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\nThe Clean Air Act, referred to in subsec. (c)(3), is  act July 14, 1955, ch. 360 ,  69 Stat. 322 , which is classified generally to chapter 85 (§\u202f7401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 7401 of Title 42  and Tables.\n2008—Subsec. (c)(1)(B).  Pub. L. 110–343, §\u202f209(a)(1) , substituted “ January 1, 2014 ” for “ January 1, 2012 ”.\nSubsec. (c)(1)(F).  Pub. L. 110–343, §\u202f209(a)(2) , substituted “ January 1, 2010 ” for “ January 1, 2008 ” wherever appearing.\nSubsec. (d).  Pub. L. 110–343, §\u202f209(b)(1) , inserted “,\u2000or directly from shale or tar sands” after “(as defined in section 45K(c))”.\nSubsec. (e)(2).  Pub. L. 110–343, §\u202f209(b)(2) , inserted “shale, tar sands, or” before “qualified fuels”.\nPub. L. 110–343, div. B, title II, §\u202f209(c) ,  Oct. 3, 2008 ,  122 Stat. 3840 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 109–58, title XIII, §\u202f1323(c) ,  Aug. 8, 2005 ,  119 Stat. 1015 , provided that:  “The amendments made by this section [enacting this section and amending sections 263, 312, and 1245 of this title] shall apply to properties placed in service after the date of the enactment of this Act [ Aug. 8, 2005 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There shall be allowed as a deduction an amount equal to the cost of energy efficient commercial building property placed in service during the taxable year.\nFor purposes of paragraph (1)(A)(i), the applicable dollar value shall be an amount equal to $0.50 increased (but not above $1.00) by $0.02 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent.\nIn the case of any property which satisfies the requirements of subparagraph (B), paragraph (2) shall be applied by substituting “$2.50” for “$0.50”, “$.10” for “$.02”, and “$5.00” for “$1.00”.\nThe requirements described in this subparagraph with respect to any property are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the installation of any property shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such property is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.\nRules similar to the rules of section 45(b)(7)(B) shall apply.\nRules similar to the rules of section 45(b)(8) shall apply.\nThe Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.\nThe Secretary, after consultation with the Secretary of Energy, shall promulgate regulations which describe in detail methods for calculating and verifying energy and power consumption and cost with respect to any property, based on the provisions of the most recent California Nonresidential Alternative Calculation Method Approval Manual which has been affirmed by the Secretary, after consultation with the Secretary of Energy, for purposes of this section not later than the date that is 4 years before the date such property is placed in service.\nAny calculation under paragraph (1) shall be prepared by qualified computer software.\nIn the case of energy efficient commercial building property installed on or in property owned by a specified tax-exempt entity, the Secretary shall promulgate regulations or guidance to allow the allocation of the deduction to the person primarily responsible for designing the property in lieu of the owner of such property. Such person shall be treated as the taxpayer for purposes of this section.\nEach certification required under this section shall include an explanation to the building owner regarding the energy efficiency features of the building and its projected annual energy costs as provided in the notice under paragraph (2)(B)(iii).\nThe Secretary shall prescribe the manner and method for the making of certifications under this section.\nThe Secretary shall include as part of the certification process procedures for inspection and testing by qualified individuals described in subparagraph (C) to ensure compliance of buildings with energy-savings plans and targets. Such procedures shall be comparable, given the difference between commercial and residential buildings, to the requirements in the Mortgage Industry National Accreditation Procedures for Home Energy Rating Systems.\nIndividuals qualified to determine compliance shall be only those individuals who are recognized by an organization certified by the Secretary for such purposes.\nFor purposes of this subtitle, if a deduction is allowed under this section with respect to any energy efficient commercial building property, the basis of such property shall be reduced by the amount of the deduction so allowed.\nFor purposes of this subsection, the term “qualifying final certification” means, with respect to any qualified retrofit plan, the certification described in paragraph (2)(C) if the energy use intensity certified in such certification is not more than 75 percent of the baseline energy use intensity of the building.\nFor purposes of this subsection, the term “baseline energy use intensity” means the energy use intensity certified under paragraph (2)(A), as adjusted to take into account weather.\nFor purposes of subparagraph (A), the adjustments described in such subparagraph shall be determined in such manner as the Secretary may provide.\nThe term “energy use intensity” means the annualized, measured site energy use intensity determined in accordance with such regulations or other guidance as the Secretary may provide and measured in British thermal units.\nThe term “qualified professional” means an individual who is a licensed architect or a licensed engineer and meets such other requirements as the Secretary may provide.\nIn the case of any building with respect to which an election is made under paragraph (1), the term “energy efficient commercial building property” shall not include any energy efficient building retrofit property with respect to which a deduction is allowable under this subsection.\nExcept as provided in clause (ii), subsection (d) shall not apply for purposes of this subsection.\nRules similar to subsection (d)(3) shall apply for purposes of this subsection.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2022—Subsec. (b).  Pub. L. 117–169, §\u202f13303(a)(1) , amended subsec. (b) generally. Prior to amendment, text read as follows: “The deduction under subsection (a) with respect to any building for any taxable year shall not exceed the excess (if any) of—\n“(1) the product of—\n“(A) $1.80, and\n“(B) the square footage of the building, over\n“(2) the aggregate amount of the deductions under subsection (a) with respect to the building for all prior taxable years.”\nSubsec. (c)(1)(D).  Pub. L. 117–169, §\u202f13303(a)(2) , (5)(B)(i), substituted “subsection (d)(5)” for “subsection (d)(6)”, “25 percent” for “50 percent”, and “subsection (d)(1)” for “subsection (d)(2)”.\nSubsec. (c)(2).  Pub. L. 117–169, §\u202f13303(a)(3) , substituted “the more recent of—\n“(A) Standard 90.1-2007 published by the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America, or\n“(B) the most recent”\nfor “the most recent”.\nSubsec. (c)(2)(B).  Pub. L. 117–169, §\u202f13303(a)(4) , inserted “for which the Department of Energy has issued a final determination and” before “which has been affirmed” and substituted “4 years” for “2 years” and “such property is placed in service” for “that construction of such property begins”.\nSubsec. (d).  Pub. L. 117–169, §\u202f13303(a)(5)(A) , redesignated pars. (2) to (6) as (1) to (5), respectively, and struck out former par. (1) which provided for a partial allowance for a deduction.\nSubsec. (d)(1).  Pub. L. 117–169, §\u202f13303(c) , substituted “not later than the date that is 4 years before the date such property is placed in service” for “not later than the date that is 2 years before the date that construction of such property begins”.\nSubsec. (d)(2)(A).  Pub. L. 117–169, §\u202f13303(a)(5)(B)(ii) , substituted “paragraph (1)” for “paragraph (2)”.\nSubsec. (d)(3).  Pub. L. 117–169, §\u202f13303(a)(6) , amended par. (3) generally. Prior to amendment, text read as follows: “In the case of energy efficient commercial building property installed on or in property owned by a Federal, State, or local government or a political subdivision thereof, the Secretary shall promulgate a regulation to allow the allocation of the deduction to the person primarily responsible for designing the property in lieu of the owner of such property. Such person shall be treated as the taxpayer for purposes of this section.”\nSubsec. (d)(4).  Pub. L. 117–169, §\u202f13303(a)(5)(B)(iii) , substituted “paragraph (2)(B)(iii)” for “paragraph (3)(B)(iii)”.\nSubsec. (f).  Pub. L. 117–169, §\u202f13303(a)(5)(B)(iv) , (7), added subsec. (f) and struck out former subsec. (f) which related to interim rules for lighting systems.\nSubsec. (g).  Pub. L. 117–169, §\u202f13303(a)(8)(A) , (B), in introductory provisions, substituted “2022” for “2020” and struck out “or subsection (d)(1)(A)” after “subsection (b)”.\nSubsec. (g)(2).  Pub. L. 117–169, §\u202f13303(a)(8)(C) , substituted “2021” for “2019”.\nSubsec. (h)(2).  Pub. L. 117–169, §\u202f13303(a)(5)(B)(v) , struck out “or (d)(1)(A)” after “subsection (c)(1)(D)”.\n2020—Subsec. (c)(1)(B)(ii), (D).  Pub. L. 116–260, §\u202f102(c)(1)(A) , substituted “Reference Standard 90.1” for “Standard 90.1–2007”.\nSubsec. (c)(2).  Pub. L. 116–260, §\u202f102(c)(1)(B) , amended par. (2) generally. Prior to amendment, text read as follows: “The term ‘Standard 90.1–2007’ means Standard 90.1–2007 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America (as in effect on the day before the date of the adoption of Standard 90.1–2010 of such Societies).”\nSubsec. (d)(2).  Pub. L. 116–260, §\u202f102(c)(2) , substituted “with respect to any property, based on the provisions of the most recent California Nonresidential Alternative Calculation Method Approval Manual which has been affirmed by the Secretary, after consultation with the Secretary of Energy, for purposes of this section not later than the date that is 2 years before the date that construction of such property begins” for “,\u2000based on the provisions of the 2005 California Nonresidential Alternative Calculation Method Approval Manual”.\nSubsecs. (g), (h).  Pub. L. 116–260, §\u202f102(a) , (b), added subsec. (g), redesignated former subsec. (g) as (h), and struck out former subsec. (h). Prior to amendment, text of subsec. (h) read as follows: “This section shall not apply with respect to property placed in service after  December 31, 2020 .”\n2019—Subsec. (h).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (d)(1)(B).  Pub. L. 115–141  substituted “such that” for “which”.\nSubsec. (h).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (c)(1)(B)(ii), (D).  Pub. L. 114–113, §\u202f341(a) , substituted “Standard 90.1–2007” for “Standard 90.1–2001”.\nSubsec. (c)(2).  Pub. L. 114–113, §\u202f341(b)(1) , amended par. (2) generally. Prior to amendment, text read as follows: “The term ‘Standard 90.1–2001’ means Standard 90.1–2001 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America (as in effect on  April 2, 2003 ).”\nSubsec. (f)(1).  Pub. L. 114–113, §\u202f341(b)(2) , (3), substituted “Table 9.5.1” for “Table 9.3.1.1”, “Table 9.6.1” for “Table 9.3.1.2”, and “Standard 90.1–2007” for “Standard 90.1–2001”.\nSubsec. (f)(2)(C)(i).  Pub. L. 114–113, §\u202f341(b)(2) , substituted “Standard 90.1–2007” for “Standard 90.1–2001”.\nSubsec. (h).  Pub. L. 114–113, §\u202f190(a) , substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (h).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2008—Subsec. (h).  Pub. L. 110–343  substituted “ December 31, 2013 ” for “ December 31, 2008 ”.\n2006—Subsec. (h).  Pub. L. 109–432  substituted “2008” for “2007”.\nPub. L. 117–169, title I, §\u202f13303(d) ,  Aug. 16, 2022 ,  136 Stat. 1952 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 312 of this title ] shall apply to taxable years beginning after  December 31, 2022 . \n \n “(2)   Alternative deduction for energy efficient building retrofit property .— Subsection (f) of section 179D of the Internal Revenue Code of 1986 (as amended by this section), and any other provision of such section solely for purposes of applying such subsection, shall apply to property placed in service after  December 31, 2022  (in taxable years ending after such date) if such property is placed in service pursuant to qualified retrofit plan (within the meaning of such section) established after such date.”\nPub. L. 116–260, div. EE, title I, §\u202f102(d) ,  Dec. 27, 2020 ,  134 Stat. 3040 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f131(b) ,  Dec. 20, 2019 ,  133 Stat. 3232 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40413(b) ,  Feb. 9, 2018 ,  132 Stat. 151 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f190(b) ,  Dec. 18, 2015 ,  129 Stat. 3075 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title III, §\u202f341(c) ,  Dec. 18, 2015 ,  129 Stat. 3113 , provided that:  “The amendments made by this subsection [probably means this section, amending this section] shall apply to property placed in service after  December 31, 2015 .”\nPub. L. 113–295, div. A, title I, §\u202f158(b) ,  Dec. 19, 2014 ,  128 Stat. 4022 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 109–58, title XIII, §\u202f1331(d) ,  Aug. 8, 2005 ,  119 Stat. 1024 , provided that:  “The amendments made by this section [enacting this section and amending sections 263, 312, 1016, 1245, and 1250 of this title] shall apply to property placed in service after  December 31, 2005 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer may elect to treat 50 percent of the cost of any qualified advanced mine safety equipment property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified advanced mine safety equipment property is placed in service.\nAn election under this section for any taxable year shall be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year. Such election shall specify the advanced mine safety equipment property to which the election applies and shall be made in such manner as the Secretary may by regulations prescribe.\nAny election made under this section may not be revoked except with the consent of the Secretary.\nNo expenditures shall be taken into account under subsection (a) with respect to the portion of the cost of any property specified in an election under section 179.\nNo deduction shall be allowed under subsection (a) to any taxpayer for any taxable year unless such taxpayer files with the Secretary a report containing such information with respect to the operation of the mines of the taxpayer as the Secretary shall require.\nThis section shall not apply to property placed in service after  December 31, 2017 .\nThe date of the enactment of this section, referred to in subsec. (c)(2), is the date of enactment of  Pub. L. 109–432 , which was approved  Dec. 20, 2006 .\n2018—Subsec. (g).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015—Subsec. (g).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (g).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (g).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (g).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (g).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2008 ”.\nPub. L. 115–123, div. D, title I, §\u202f40307(b) ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f168(b) ,  Dec. 18, 2015 ,  129 Stat. 3067 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f128(b) ,  Dec. 19, 2014 ,  128 Stat. 4018 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f316(b) ,  Jan. 2, 2013 ,  126 Stat. 2331 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f743(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2009 .”\nPub. L. 109–432, div. A, title IV, §\u202f404(c) ,  Dec. 20, 2006 ,  120 Stat. 2957 , provided that:  “The amendments made by this section [enacting this section and amending sections 263, 312, and 1245 of this title] shall apply to costs paid or incurred after the date of the enactment of this Act [ Dec. 20, 2006 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer engaged in the business of farming may elect to treat as expenses which are not chargeable to capital account expenditures (otherwise chargeable to capital account) which are paid or incurred by him during the taxable year for the purchase or acquisition of fertilizer, lime, ground limestone, marl, or other materials to enrich, neutralize, or condition land used in farming, or for the application of such materials to such land. The expenditures so treated shall be allowed as a deduction.\nFor purposes of subsection (a), the term “land used in farming” means land used (before or simultaneously with the expenditures described in subsection (a)) by the taxpayer or his tenant for the production of crops, fruits, or other agricultural products or for the sustenance of livestock.\nThe election under subsection (a) for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe. Such election may not be revoked except with the consent of the Secretary.\n1976—Subsec. (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 86–779, §\u202f6(d) ,  Sept. 14, 1960 ,  74 Stat. 1001 , provided that:  “The amendments made by subsections (a), (b), and (c) [enacting this section and amending  section 263 of this title ] shall apply to taxable years beginning after  December 31, 1959 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer may elect to treat the cost of any qualified film or television production, and any qualified live theatrical production, as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction.\nParagraph (1) shall not apply to so much of the aggregate cost of any qualified film or television production or any qualified live theatrical production as exceeds $15,000,000.\nWith respect to the basis of any qualified film or television production or any qualified live theatrical production to which an election is made under subsection (a), no other depreciation or amortization deduction shall be allowable.\nAn election under this section with respect to any qualified film or television production or any qualified live theatrical production shall be made in such manner as prescribed by the Secretary and by the due date (including extensions) for filing the taxpayer’s return of tax under this chapter for the taxable year in which costs of the production are first incurred.\nAny election made under this section may not be revoked without the consent of the Secretary.\nThe term “qualified film or television production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation.\nA production is described in this paragraph if such production is property described in section 168(f)(3).\nA production is not described in this paragraph if records are required under  section 2257 of title 18 , United States Code, to be maintained with respect to any performer in such production.\nThe term “qualified compensation” means compensation for services performed in the United States by actors, production personnel, directors, and producers.\nThe term “compensation” does not include participations and residuals (as defined in section 167(g)(7)(B)).\nThe term “qualified live theatrical production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation (as defined in subsection (d)(3)).\nA production is described in this paragraph if such production is a live staged production of a play (with or without music) which is derived from a written book or script and is produced or presented by a taxable entity in any venue which has an audience capacity of not more than 3,000 or a series of venues the majority of which have an audience capacity of not more than 3,000.\nIn the case of a live staged production not described in subparagraph (B) which is produced or presented by a taxable entity for not more than 10 weeks of the taxable year, subparagraph (A) shall be applied by substituting “6,500” for “3,000”.\nFor purposes of clause (i), in the case of any taxable year of less than 12 months, the number of weeks for which a production is produced or presented shall be annualized by multiplying the number of weeks the production is produced or presented during such taxable year by 12 and dividing the result by the number of months in such taxable year.\nA production is not described in this paragraph if such production includes or consists of any performance of conduct described in  section 2257(h)(1) of title 18 , United States Code.\nFor purposes of this section, rules similar to the rules of subsections (b)(2) and (c)(4) of section 194 shall apply.\nThis section shall not apply to qualified film and television productions or qualified live theatrical productions commencing after  December 31, 2025 .\nA prior section 181,  Pub. L. 87–834, §\u202f2(c) ,  Oct. 16, 1962 ,  76 Stat. 970 , related to a deduction for unused investment credit, prior to repeal by  Pub. L. 88–272, title II, §\u202f203(a)(3)(B) , (4),  Feb. 26, 1964 ,  78 Stat. 34 , applicable in case of property placed in service after  Dec. 31, 1963 , with respect to taxable years ending after such date, and in case of property placed in service before  Jan. 1, 1964 , with respect to taxable years beginning after  Dec. 31, 1963 .\n2020—Subsec. (g).  Pub. L. 116–260  substituted “ December 31, 2025 ” for “ December 31, 2020 ”.\n2019—Subsec. (g).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (g).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\n2015— Pub. L. 114–113, §\u202f169(b)(2)(C) , inserted “and live theatrical” after “film and television” in section catchline.\nSubsec. (a)(1).  Pub. L. 114–113, §\u202f169(b)(1) , inserted “,\u2000and any qualified live theatrical production,” after “any qualified film or television production”.\nSubsecs. (a)(2)(A), (B), (b), (c)(1).  Pub. L. 114–113, §\u202f169(b)(2)(A) , inserted “or any qualified live theatrical production” after “qualified film or television production”.\nSubsec. (e).  Pub. L. 114–113, §\u202f169(c)(2) , added subsec. (e). Former subsec. (e) redesignated (f).\nSubsec. (f).  Pub. L. 114–113, §\u202f169(c)(1) , redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g).\nPub. L. 114–113, §\u202f169(b)(2)(B) , which directed insertion of “or qualified live theatrical productions” after “qualified film or television productions”, was executed by making the insertion after “qualified film and television productions”, to reflect the probable intent of Congress.\nPub. L. 114–113, §\u202f169(a) , substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\nSubsec. (g).  Pub. L. 114–113, §\u202f169(c)(1) , redesignated subsec. (f) as (g).\n2014—Subsec. (f).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (f).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (f).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (a)(2)(A).  Pub. L. 110–343, §\u202f502(b) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply to any qualified film or television production the aggregate cost of which exceeds $15,000,000.”\nSubsec. (d)(3)(A).  Pub. L. 110–343, §\u202f502(d) , substituted “actors, production personnel, directors, and producers.” for “actors, directors, producers, and other relevant production personnel.”\nSubsec. (f).  Pub. L. 110–343, §\u202f502(a) , substituted “ December 31, 2009 ” for “ December 31, 2008 ”.\n2005—Subsec. (d)(2).  Pub. L. 109–135  struck out “For purposes of a television series, only the first 44 episodes of such series may be taken into account.” at end of subpar. (A), added subpar. (B), and redesignated former subpar. (B) as (C).\nPub. L. 116–260, div. EE, title I, §\u202f116(b) ,  Dec. 27, 2020 ,  134 Stat. 3051 , provided that:  “The amendment made by this section [amending this section] shall apply to productions commencing after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f117(b) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendment made by this section [amending this section] shall apply to productions commencing after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40308(b) ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  “The amendment made by this section [amending this section] shall apply to productions commencing after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f169(d) ,  Dec. 18, 2015 ,  129 Stat. 3069 , provided that: \n “(1)   Extension .— The amendment made by subsection (a) [amending this section] shall apply to productions commencing after  December 31, 2014 . \n \n “(2)   Modifications.— “(A)   In general .— The amendments made by subsections (b) and (c) [amending this section] shall apply to productions commencing after  December 31, 2015 . \n \n “(B)   Commencement .— For purposes of subparagraph (A), the date on which a qualified live theatrical production commences is the date of the first public performance of such production for a paying audience.”\nPub. L. 113–295, div. A, title I, §\u202f129(b) ,  Dec. 19, 2014 ,  128 Stat. 4018 , provided that:  “The amendment made by this section [amending this section] shall apply to productions commencing after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f317(b) ,  Jan. 2, 2013 ,  126 Stat. 2331 , provided that:  “The amendment made by this section [amending this section] shall apply to productions commencing after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f744(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to productions commencing after  December 31, 2009 .”\nPub. L. 110–343, div. C, title V, §\u202f502(e) ,  Oct. 3, 2008 ,  122 Stat. 3877 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 199 of this title ] shall apply to qualified film and television productions commencing after  December 31, 2007 . \n \n “(2)   Deduction .— The amendments made by subsection (c) [amending  section 199 of this title ] shall apply to taxable years beginning after  December 31, 2007 .”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title II, §\u202f244(c) ,  Oct. 22, 2004 ,  118 Stat. 1447 , provided that:  “The amendments made by this section [enacting this section] shall apply to qualified film and television productions (as defined in section 181(d)(1) of the Internal Revenue Code of 1986, as added by this section) commencing after the date of the enactment of this Act [ Oct. 22, 2004 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 87–834, §\u202f21(a) ,  Oct. 16, 1962 ,  76 Stat. 1063 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , authorized deduction of expenditures by farmers for clearing land.\nPub. L. 99–514, title IV, §\u202f402(c) ,  Oct. 22, 1986 ,  100 Stat. 2221 , provided that:  “The amendments made by this section [amending sections 263 and 1252 of this title and repealing this section] shall apply to amounts paid or incurred after  December 31, 1985 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of an activity engaged in by an individual or an S corporation, if such activity is not engaged in for profit, no deduction attributable to such activity shall be allowed under this chapter except as provided in this section.\nFor purposes of this section, the term “activity not engaged in for profit” means any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under paragraph (1) or (2) of section 212.\nIf the gross income derived from an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the taxable year exceeds the deductions attributable to such activity (determined without regard to whether or not such activity is engaged in for profit), then, unless the Secretary establishes to the contrary, such activity shall be presumed for purposes of this chapter for such taxable year to be an activity engaged in for profit. In the case of an activity which consists in major part of the breeding, training, showing, or racing of horses, the preceding sentence shall be applied by substituting “2” for “3” and “7” for “5”.\nA determination as to whether the presumption provided by subsection (d) applies with respect to any activity shall, if the taxpayer so elects, not be made before the close of the fourth taxable year (sixth taxable year, in the case of an activity described in the last sentence of such subsection) following the taxable year in which the taxpayer first engages in the activity.\nIf the taxpayer makes an election under paragraph (1), the presumption provided by subsection (d) shall apply to each taxable year in the 5-taxable year (or 7-taxable year) period beginning with the taxable year in which the taxpayer first engages in the activity, if the gross income derived from the activity for 3 (or 2 if applicable) or more of the taxable years in such period exceeds the deductions attributable to the activity (determined without regard to whether or not the activity is engaged in for profit).\nAn election under paragraph (1) shall be made at such time and manner, and subject to such terms and conditions, as the Secretary may prescribe.\nIf a taxpayer makes an election under paragraph (1) with respect to an activity, the statutory period for the assessment of any deficiency attributable to such activity shall not expire before the expiration of 2 years after the date prescribed by law (determined without extensions) for filing the return of tax under chapter 1 for the last taxable year in the period of 5 taxable years (or 7 taxable years) to which the election relates. Such deficiency may be assessed notwithstanding the provisions of any law or rule of law which would otherwise prevent such an assessment.\n2014—Subsec. (e)(1).  Pub. L. 113–295  struck out “For purposes of the preceding sentence, a taxpayer shall be treated as not having engaged in an activity during any taxable year beginning before  January 1, 1970 .” at end.\n1988—Subsec. (e)(2).  Pub. L. 100–647  substituted “activity for 3 (or 2 if applicable)” for “activity for 2”.\n1986—Subsec. (d).  Pub. L. 99–514  substituted “3” for “2” before “or more” in first sentence and “\u202f‘2’ for ‘3’ and ‘7’ for ‘5’\u202f” for “the period of 7 consecutive taxable years for the period of 5 consecutive taxable years” in second sentence.\n1982—Subsec. (a).  Pub. L. 97–354  substituted “an S corporation” for “an electing small business corporation (as defined in section 1371(b))”.\n1976—Subsecs. (d), (e)(3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(4).  Pub. L. 94–455, §\u202f214(a) , added par. (4).\n1971—Subsec. (e).  Pub. L. 92–178  added subsec. (e).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 94–455, title II, §\u202f214(c) ,  Oct. 4, 1976 ,  90 Stat. 1549 , provided that:  “The amendments made by this section [amending this section and  section 6212 of this title ] shall apply with respect to taxable years beginning after  December 31, 1969 ; except that such amendments shall not apply to any taxable year ending before the date of the enactment of this Act [ Oct. 4, 1976 ] with respect to which the period for assessing a deficiency has expired before such date of enactment.”\nPub. L. 92–178, title III, §\u202f311(b) ,  Dec. 10, 1971 ,  85 Stat. 526 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 91–172, title II, §\u202f213(d) ,  Dec. 30, 1969 ,  83 Stat. 572 , provided that:  “The amendments made by this section [enacting this section, amending  section 6504 of this title , and repealing  section 270 of this title ] shall apply to taxable years beginning after  December 31, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 91–172, title VII, §\u202f705(a) ,  Dec. 30, 1969 ,  83 Stat. 670 ; amended  Pub. L. 93–625, §\u202f3(b) ,  Jan. 3, 1975 ,  88 Stat. 2109 ;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to amortization of certain railroad rolling stock.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 91–172, title VII, §\u202f705(a) ,  Dec. 30, 1969 ,  83 Stat. 672 ; amended  Pub. L. 94–455, title XVII, §\u202f1702 , title XIX, §\u202f1906(b) (13)(A),  Oct. 4, 1976 ,  90 Stat. 1760 , 1834;  Pub. L. 95–473, §\u202f2(a)(2)(B) ,  Oct. 17, 1978 ,  92 Stat. 1464 , related to amortization of railroad grading and tunnel bores.\nPub. L. 99–514, title II, §\u202f242(c) ,  Oct. 22, 1986 ,  100 Stat. 2181 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending sections 1082 and 1250 of this title and repealing this section] shall apply to that portion of the basis of any property which is attributable to expenditures paid or incurred after  December 31, 1986 . \n \n “(2)   Transitional rule .— The amendments made by this section shall not apply to any expenditure incurred— “(A)  pursuant to a binding contract entered into before  March 2, 1986 , or \n \n “(B)  with respect to any improvement commenced before  March 2, 1986 , but only if not less than the lesser of $1,000,000 or 5 percent of the aggregate cost of such improvement has been incurred or committed before such date. \n \n\n The preceding sentence shall not apply to any expenditure with respect to an improvement placed in service after  December 31, 1987 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'For purposes of this section, the term “compensatory amount” means the amount received or accrued during the taxable year as damages as a result of an award in, or in settlement of, a civil action for recovery for a compensable injury, reduced by any amounts paid or incurred in the taxable year in securing such award or settlement.\nSection 4 of the Clayton Act, referred to in subsec. (b)(3), is classified to  section 15 of Title 15 .\nPub. L. 91–172, title IX, §\u202f904(c) ,  Dec. 30, 1969 ,  83 Stat. 712 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1968 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 91–172, title VII, §\u202f707(a) ,  Dec. 30, 1969 ,  83 Stat. 674 ; amended  Pub. L. 93–625, §\u202f3(d) ,  Jan. 3, 1975 ,  88 Stat. 2109 , provided for an allowance of an amortization deduction for certain coal mine safety equipment, the method of election and termination of such deduction, the definition of term “certified coal mine safety equipment”, and special rules applicable to the amortization deduction.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 92–178, title III, §\u202f303(a) ,  Dec. 10, 1971 ,  85 Stat. 521 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 ;  Pub. L. 95–30, title IV, §\u202f402(a)(1) –(3),  May 23, 1977 ,  91 Stat. 155 , related to amortization of certain expenditures for child care facilities.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 94–455, title II, §\u202f201(a) ,  Oct. 4, 1976 ,  90 Stat. 1525 ; amended  Pub. L. 95–600, title VII, §\u202f701(m)(1) ,  Nov. 6, 1978 ,  92 Stat. 2907 ;  Pub. L. 97–34, title II, §\u202f262(a) , (b),  Aug. 13, 1981 ,  95 Stat. 264 ;  Pub. L. 97–248, title II, §\u202f207(a) –(d),  Sept. 3, 1982 ,  96 Stat. 431 , 432;  Pub. L. 97–354, §\u202f5(a)(24) ,  Oct. 19, 1982 ,  96 Stat. 1694 ;  Pub. L. 98–369, div. A, title I, §\u202f93(a) , title VII, §\u202f712(c),  July 18, 1984 ,  98 Stat. 614 , 947, related to amortization of real property construction period interest and taxes.\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the repeal of this section is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying this section (as in effect before its repeal) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nRepeal applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer may elect to treat qualified architectural and transportation barrier removal expenses which are paid or incurred by him during the taxable year as expenses which are not chargeable to capital account. The expenditures so treated shall be allowed as a deduction.\nAn election under paragraph (1) shall be made at such time and in such manner as the Secretary prescribes by regulations.\nThe term “architectural and transportation barrier removal expenses” means an expenditure for the purpose of making any facility or public transportation vehicle owned or leased by the taxpayer for use in connection with his trade or business more accessible to, and usable by, handicapped and elderly individuals.\nThe term “qualified architectural and transportation barrier removal expense” means, with respect to any such facility or public transportation vehicle, an architectural or transportation barrier removal expense with respect to which the taxpayer establishes, to the satisfaction of the Secretary, that the resulting removal of any such barrier meets the standards promulgated by the Secretary with the concurrence of the Architectural and Transportation Barriers Compliance Board and set forth in regulations prescribed by the Secretary.\nThe term “handicapped individual” means any individual who has a physical or mental disability (including, but not limited to, blindness or deafness) which for such individual constitutes or results in a functional limitation to employment, or who has any physical or mental impairment (including, but not limited to, a sight or hearing impairment) which substantially limits one or more major life activities of such individual.\nThe deduction allowed by subsection (a) for any taxable year shall not exceed $15,000.\n1990—Subsec. (c).  Pub. L. 101–508, §\u202f11611(c) , substituted “$15,000” for “$35,000”.\nSubsec. (d).  Pub. L. 101–508, §\u202f11801(a)(14) , struck out subsec. (d) which related to application of section to taxable years beginning after  Dec. 31, 1976 , and before  Jan. 1, 1983 , and to taxable years beginning after  Dec. 31, 1983 .\n1986—Subsec. (d)(2).  Pub. L. 99–514  substituted “1983” for “1983, and before  January 1, 1986 ”.\n1984—Subsec. (c).  Pub. L. 98–369, §\u202f1062(b) , substituted “$35,000” for “$25,000”.\nSubsec. (d).  Pub. L. 98–369, §\u202f1062(a)(1) , amended subsec. (d) generally, substituting provisions that this section shall apply to taxable years beginning after  December 31, 1976 , and before  January 1, 1983 , and to taxable years beginning after  December 31, 1983 , and before  January 1, 1986  for provisions which had required the Secretary to prescribe such regulations as might be necessary to carry out this section within 180 days after  October 4, 1976 .\nAmendment by  section 11611(c) of Pub. L. 101–508  applicable to taxable years beginning after  Nov. 5, 1990 , see  section 11611(e)(2) of Pub. L. 101–508 , set out as a note under  section 38 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1062(c) ,  July 18, 1984 ,  98 Stat. 1047 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 94–455, title XXI, §\u202f2122(c) ,  Oct. 4, 1976 ,  90 Stat. 1915 , as amended by  Pub. L. 96–167, §\u202f9(c) ,  Dec. 29, 1979 ,  93 Stat. 1278 ;  Pub. L. 98–369, div. A, title X, §\u202f1062(a)(2) ,  July 18, 1984 ,  98 Stat. 1047 , provided that:  “The amendments made by this section [enacting this section and amending sections 263, 1245, and 1250 of this title] shall apply to taxable years beginning after  December 31, 1976 .”\nFor provisions that nothing in amendment by  section 11801(a)(14) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 94–455, title XXI, §\u202f2124(a)(1) ,  Oct. 4, 1976 ,  90 Stat. 1916 ; amended  Pub. L. 95–600, title VII, §\u202f701(f)(1) , (2), (7),  Nov. 6, 1978 ,  92 Stat. 2900–2902 ;  Pub. L. 96–222, title I, §\u202f107(a)(1)(E)(ii) ,  Apr. 1, 1980 ,  94 Stat. 222 ;  Pub. L. 96–541, §\u202f2(a) ,  Dec. 17, 1980 ,  94 Stat. 3204 , related to amortization of certain rehabilitation expenditures for certified historic structures.\nRepeal applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after such date, with exceptions, see  section 212(e) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 46 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There is allowed as a deduction for the taxable year an amount equal to the sum of the amounts contributed by the taxpayer during the taxable year to or under a trust or trusts described in section 501(c)(21).\nThe amounts described in subsection (b) shall be determined by using reasonable actuarial methods and assumptions which are not inconsistent with regulations prescribed by the Secretary.\nIn determining the amounts described in subsection (b), only those black lung benefit claims the payment of which is expected to be made from the trust shall be taken into account.\nFor purposes of this section, a taxpayer shall be deemed to have made a payment of a contribution on the last day of a taxable year if the payment is on account of that taxable year and is made not later than the time prescribed by law for filing the return for that taxable year (including extensions thereof).\nNo deduction shall be allowed under subsection (a) with respect to any contribution to a trust described in section 501(c)(21) other than a contribution in cash or in items in which such trust may invest under subclause (II) of section 501(c)(21)(A)(ii).\nNo deduction shall be allowed under section 162(a) with respect to any liability taken into account in determining the deduction under subsection (a) of this section of the taxpayer (or a predecessor).\nIf the amount of the deduction determined under subsection (a) for the taxable year (without regard to the limitation imposed by subsection (b)) with respect to a trust exceeds the limitation imposed by subsection (b) for the taxable year, the excess shall be carried over to the succeeding taxable year and treated as contributed to the trust during that year.\nFor purposes of this section, the term “black lung benefit claim” means a claim for compensation for disability or death due to pneumoconiosis under part C of title IV of the Federal Mine Safety and Health Act of 1977 or under any State law providing for such compensation.\nThe Federal Mine Safety and Health Act of 1977, referred to in subsec. (e), is  Pub. L. 91–173 ,  Dec. 30, 1969 ,  83 Stat. 742 , as amended by  Pub. L. 95–164 ,  Nov. 9, 1977 ,  91 Stat. 1290 . Part C of title IV of the Federal Mine Safety and Health Act of 1977 is classified generally to part C of subchapter IV of chapter 22 (§\u202f931 et seq.) of Title 30, Mineral Lands and Mining. For complete classification of this Act to the Code, see Short Title note set out under  section 801 of Title 30  and Tables.\n1992—Subsec. (c)(4).  Pub. L. 102–486  substituted “subclause (II) of section 501(c)(21)(A)(ii)” for “clause (ii) of section 501(c)(21)(B)”.\n1980—Subsec. (e).  Pub. L. 96–222  substituted “Federal Mine Safety and Health Act of 1977” for “Federal Coal Mine Health and Safety Act of 1969”.\n1978—Subsec. (b).  Pub. L. 95–488, §\u202f1(a) , substituted provision limiting the allowable deduction to the greater of the amount necessary to fund the remaining unfunded liability of the taxpayer for the black lung claims filed or expected to be filed by past or present employees of the taxpayer or the aggregate amount necessary to increase each trust described in section 501(c)(21) to the amount required to pay all amounts payable out of such trust for the taxable year for provision limiting the allowable deduction to the amount necessary, when added to the fair market value of trust assets at the beginning of the taxable year, to fund the greater of current year obligations or certain future obligations.\nSubsec. (c)(1).  Pub. L. 95–488, §\u202f1(b) , substituted “Method of determining amounts referred to in subsection (b)” for “Determination of expected future payments” in heading and in text inserted provisions establishing the funding period as the greater of the average remaining working life of miners who are present employees of the taxpayer or 10 taxable years and permitting a different funding period if prescribed or consented to by the Secretary.\nSubsec. (c)(5).  Pub. L. 95–488, §\u202f1(c) , added par. (5).\nPub. L. 102–486, title XIX, §\u202f1940(d) ,  Oct. 24, 1992 ,  106 Stat. 3035 , provided that:  “The amendments made by this section [amending this section and sections 501 and 4951 of this title] shall apply to taxable years beginning after  December 31, 1991 .”\nPub. L. 96–222, title I, §\u202f108(b)(4) ,  Apr. 1, 1980 ,  94 Stat. 226 , provided that:  “Any amendment made by this subsection [amending this section, sections 6503, 6511, 6862, 7422, and 7454 of this title, and sections 934 and 934a of Title 30, Mineral Lands and Mining] shall take effect as if included in the provision of the Black Lung Benefits Revenue Act of 1977 [see Short Title of 1978 Amendments note set out under  section 1 of this title ] to which such amendment relates.”\nPub. L. 95–488, §\u202f1(e) ,  Oct. 20, 1978 ,  92 Stat. 1638 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and  section 6104 of this title ] shall apply to taxable years beginning after  December 31, 1977 . Nothing in the amendments made by subsection (d) to section 6104 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be construed to permit the disclosure under such section 6104 of confidential business information of contributors to any trust described in section 501(c)(21) of such Code.”\nPub. L. 95–227, §\u202f4(f) ,  Feb. 10, 1978 ,  92 Stat. 24 , provided that:  “The amendments made by this section [enacting this section and sections 4951 to 4953 and amending sections 501, 4946, 6104, 6213, 6405, 6501, 6503, and 7451 of this title] shall apply with respect to contributions, acts, and expenditures made after  December 31, 1977 , in and for taxable years beginning after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'There shall be allowed as a deduction for the taxable year an amount equal to the qualified tertiary injectant expenses of the taxpayer for tertiary injectants injected during such taxable year.\nThe term “qualified tertiary injectant expenses” means any cost paid or incurred (whether or not chargeable to capital account) for any tertiary injectant (other than a hydrocarbon injectant which is recoverable) which is used as a part of a tertiary recovery method.\nThe term “hydrocarbon injectant” includes natural gas, crude oil, and any other injectant which is comprised of more than an insignificant amount of natural gas or crude oil. The term does not include any tertiary injectant which is hydrocarbon-based, or a hydrocarbon-derivative, and which is comprised of no more than an insignificant amount of natural gas or crude oil. For purposes of this paragraph, that portion of a hydrocarbon injectant which is not a hydrocarbon shall not be treated as a hydrocarbon injectant.\nSection 4996(b)(8)(C), referred to in subsec. (b)(3)(A), was repealed by  Pub. L. 100–418, title I, §\u202f1941(a) ,  Aug. 23, 1988 ,  102 Stat. 1322 .\n1988—Subsec. (b)(3)(A).  Pub. L. 100–418  substituted “section 4996(b)(8)(C) as in effect before its repeal” for “section 4996(b)(8)(C)”.\n1983—Subsec. (b)(1).  Pub. L. 97–448  struck out “during the taxable year” after “any cost paid or incurred”.\nAmendment by  Pub. L. 100–418  applicable to crude oil removed from the premises on or after  Aug. 23, 1988 , see  section 1941(c) of Pub. L. 100–418 , set out as a note under  section 164 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980,  Pub. L. 96–223 , to which such amendment relates, see  section 203(a) of Pub. L. 97–448 , set out as a note under  section 6652 of this title .\nPub. L. 96–223, title II, §\u202f251(b) ,  Apr. 2, 1980 ,  94 Stat. 287 , provided that:  “The amendments made by this section [enacting this section and amending sections 263, 1245, and 1250 of this title] shall apply to taxable years beginning after  December 31, 1979 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of any qualified timber property with respect to which the taxpayer has made (in accordance with regulations prescribed by the Secretary) an election under this subsection, the taxpayer shall be entitled to a deduction with respect to the amortization of the amortizable basis of qualified timber property based on a period of 84 months. Such amortization deduction shall be an amount, with respect to each month of such period within the taxable year, equal to the amortizable basis at the end of such month divided by the number of months (including the month for which the deduction is computed) remaining in the period. Such amortizable basis at the end of the month shall be computed without regard to the amortization deduction for such month. The 84-month period shall begin on the first day of the first month of the second half of the taxable year in which the amortizable basis is acquired.\nIn the case of any qualified timber property with respect to which the taxpayer has made (in accordance with regulations prescribed by the Secretary) an election under this subsection, the taxpayer shall treat reforestation expenditures which are paid or incurred during the taxable year with respect to such property as an expense which is not chargeable to capital account. The reforestation expenditures so treated shall be allowed as a deduction.\nIn the case of a partnership, the dollar limitation contained in paragraph (1)(B) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders.\nThe term “qualified timber property” means a woodlot or other site located in the United States which will contain trees in significant commercial quantities and which is held by the taxpayer for the planting, cultivating, caring for, and cutting of trees for sale or use in the commercial production of timber products.\nThe term “amortizable basis” means that portion of the basis of the qualified timber property attributable to reforestation expenditures which have not been taken into account under subsection (b).\nReforestation expenditures shall not include any expenditures for which the taxpayer has been reimbursed under any governmental reforestation cost-sharing program unless the amounts reimbursed have been included in the gross income of the taxpayer.\nThe aggregate amount of reforestation expenditures incurred by any trust or estate shall be apportioned between the income beneficiaries and the fiduciary under regulations prescribed by the Secretary. Any amount so apportioned to a beneficiary shall be taken into account as expenditures incurred by such beneficiary in applying this section to such beneficiary.\nNo deduction shall be allowed under any other provision of this chapter with respect to any expenditure with respect to which a deduction is allowed or allowable under this section to the taxpayer.\nIn the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant.\nA prior section 194 was renumbered  section 194A of this title .\n2005—Subsec. (b)(1)(B).  Pub. L. 109–135, §\u202f403(i)(1)(A) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The aggregate amount of reforestation expenditures which may be taken into account under subparagraph (A) with respect to each qualified timber property for any taxable year shall not exceed $10,000 ($5,000 in the case of a separate return by a married individual (as defined in section 7703)).”\nSubsec. (c)(4).  Pub. L. 109–135, §\u202f403(i)(1)(B) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(A)  In general .—Except as provided in subparagraph (B), this section shall not apply to trusts and estates.\n“(B)  Amortization deduction allowed to estates .—The benefit of the deduction for amortization provided by subsection (a) shall be allowed to estates in the same manner as in the case of an individual. The allowable deduction shall be apportioned between the income beneficiary and the fiduciary under regulations prescribed by the Secretary. Any amount so apportioned to a beneficiary shall be taken into account for purposes of determining the amount allowable as a deduction under subsection (a) to such beneficiary.”\n2004— Pub. L. 108–357, §\u202f322(c)(4) , substituted “Treatment” for “Amortization” in section catchline.\nSubsec. (b).  Pub. L. 108–357, §\u202f322(a) , substituted “Treatment as expenses” for “Limitations” in heading.\nSubsec. (b)(1).  Pub. L. 108–357, §\u202f322(a) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The aggregate amount of amortizable basis acquired during the taxable year which may be taken into account under subsection (a) for such taxable year shall not exceed $10,000 ($5,000 in the case of a separate return by a married individual (as defined in section 7703)).”\nSubsec. (b)(2).  Pub. L. 108–357, §\u202f322(c)(2) , substituted “paragraph (1)(B)” for “paragraph (1)” in introductory provisions of subpar. (A) and in subpar. (B).\nSubsec. (b)(3), (4).  Pub. L. 108–357, §\u202f322(c)(1) , struck out pars. (3) and (4) which related to inapplicability of section to trusts and applicability of section to estates, respectively.\nSubsec. (c)(2).  Pub. L. 108–357, §\u202f322(b) , inserted “which have not been taken into account under subsection (b)” after “expenditures”.\nSubsec. (c)(4), (5).  Pub. L. 108–357, §\u202f322(c)(3) , added pars. (4) and (5) and struck out former par. (4) which related to basis allocation if the amount of the amortizable basis acquired during the taxable year of all qualified timber property with respect to which the taxpayer had made an election under subsec. (a) exceeded the amount of the limitation under subsec. (b)(1).\n1986—Subsec. (b)(1).  Pub. L. 99–514  substituted “section 7703” for “section 143”.\n1982—Subsec. (b)(2)(B).  Pub. L. 97–354  substituted “Partnerships and S corporations” for “Partnerships” in heading, and inserted “A similar rule shall apply in the case of an S corporation and its shareholders.”\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 108–357  applicable with respect to expenditures paid or incurred after  Oct. 22, 2004 , see  section 322(e) of Pub. L. 108–357 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 96–451, title III, §\u202f301(d) ,  Oct. 14, 1980 ,  94 Stat. 1991 , provided that:  “The amendments made by this section [enacting this section and amending sections 62 and 1245 of this title] shall apply with respect to additions to capital account made after  December 31, 1979 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of a contribution described in subsection (a) which relates to any specified period of time which includes more than one taxable year, the amount properly allocable to any taxable year in such period shall be determined by prorating such amounts to such taxable years under regulations prescribed by the Secretary.\nNo deduction shall be allowed under subsection (a) with respect to any contribution described in subsection (a) which does not relate to any specified period of time.\nSection 4223(h) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is classified to  section 1403(h) of Title 29 , Labor.\nPub. L. 97–448, title III, §\u202f311(c)(2) ,  Jan. 12, 1983 ,  96 Stat. 2411 , provided that:  “The amendments made by subsection (b) of section 305 [redesignating  section 194 of this title , relating to contributions to employer liability trusts, as this section] shall take effect on  October 14, 1980 .”\nPub. L. 96–364, title II, §\u202f210 ,  Sept. 26, 1980 ,  94 Stat. 1291 , provided that: \n “(a)  Except as otherwise provided in this section, the amendments made by this title [amending sections 401, 404, 411 to 414, 4971, and 4975 of this title] shall take effect on the date of the enactment of this Act [ Sept. 26, 1980 ]. \n \n “(b)  Subpart C of part I of subchapter D of chapter 1 of such Code (as added by this Act) [sections 418 to 418E of this title] shall take effect, with respect to each plan, on the first day of the first plan year beginning on or after the earlier of— “(1)  the date on which the last collective-bargaining agreement providing for employer contributions under the plan, which was in effect on the date of the enactment of this Act [ Sept. 26, 1980 ], expires, without regard to extensions agreed to after such date of enactment, or \n \n “(2)  3 years after the date of the enactment of this Act [ Sept. 26, 1980 ]. \n \n \n “(c)  The amendments made by section 209 [enacting this section and amending sections 501 and 4975 of this title] shall apply to taxable years ending after the date of the enactment of this Act [ Sept. 26, 1980 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Except as otherwise provided in this section, no deduction shall be allowed for start-up expenditures.\nIn any case in which a trade or business is completely disposed of by the taxpayer before the end of the period to which paragraph (1) applies, any deferred expenses attributable to such trade or business which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.\nExcept as provided in subparagraph (B), the determination of when an active trade or business begins shall be made in accordance with such regulations as the Secretary may prescribe.\nAn acquired active trade or business shall be treated as beginning when the taxpayer acquires it.\nAn election under subsection (b) shall be made not later than the time prescribed by law for filing the return for the taxable year in which the trade or business begins (including extensions thereof).\nThe period selected under subsection (b) shall be adhered to in computing taxable income for the taxable year for which the election is made and all subsequent taxable years.\n2010—Subsec. (b)(3).  Pub. L. 111–240  added par. (3).\n2004—Subsec. (b).  Pub. L. 108–357, §\u202f902(a)(2) , substituted “deduct” for “amortize” in heading.\nSubsec. (b)(1).  Pub. L. 108–357, §\u202f902(a)(1) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “Start-up expenditures may, at the election of the taxpayer, be treated as deferred expenses. Such deferred expenses shall be allowed as a deduction prorated equally over such period of not less than 60 months as may be selected by the taxpayer (beginning with the month in which the active trade or business begins).”\n1984—Subsec. (a).  Pub. L. 98–369  amended subsec. (a) generally, substituting provisions dealing with capitalization of expenditures for provisions dealing with election to amortize.\nSubsec. (b).  Pub. L. 98–369  amended subsec. (b) generally, substituting provisions dealing with election to amortize for provisions dealing with start-up expenditures.\nSubsec. (c).  Pub. L. 98–369  amended subsec. (c) generally, substituting provisions setting forth definitions for provisions dealing with election.\nSubsec. (d).  Pub. L. 98–369  amended subsec. (d) generally, substituting provisions dealing with election for provisions dealing with business beginning.\nPub. L. 111–240, title II, §\u202f2031(b) ,  Sept. 27, 2010 ,  124 Stat. 2559 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or incurred in taxable years beginning after  December 31, 2009 .”\nPub. L. 108–357, title VIII, §\u202f902(d) ,  Oct. 22, 2004 ,  118 Stat. 1652 , provided that:  “The amendments made by this section [amending this section and sections 248 and 709 of this title] shall apply to amounts paid or incurred after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 98–369, div. A, title I, §\u202f94(c) ,  July 18, 1984 ,  98 Stat. 615 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  June 30, 1984 .”\nPub. L. 96–605, title I, §\u202f102(c) ,  Dec. 28, 1980 ,  94 Stat. 3522 , provided that:  “The amendments made by this section [enacting this section] shall apply to amounts paid or incurred after  July 29, 1980 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'If any portion of the qualified business credits determined for any taxable year has not, after the application of section 38(c), been allowed to the taxpayer as a credit under section 38 for any taxable year, an amount equal to the credit not so allowed shall be allowed to the taxpayer as a deduction for the first taxable year following the last taxable year for which such credit could, under section 39, have been allowed as a credit.\nIf a taxpayer dies or ceases to exist before the first taxable year following the last taxable year for which the qualified business credits could, under section 39, have been allowed as a credit, the amount described in subsection (a) (or the proper portion thereof) shall, under regulations prescribed by the Secretary, be allowed to the taxpayer as a deduction for the taxable year in which such death or cessation occurs.\nSubsection (a) shall be applied by substituting “an amount equal to 50 percent of” for “an amount equal to” in the case of the investment credit determined under section 46 (other than the rehabilitation credit).\nSection 280C(c)(3), referred to in subsec. (c)(4), was redesignated section 280C(c)(2) by  Pub. L. 115–97, title I, §\u202f13206(d)(2)(C) ,  Dec. 22, 2017 ,  131 Stat. 2113 .\nAnother  section 339(e) of Pub. L. 108–357  amended the table of sections for subpart D of part IV of subchapter A of this chapter.\n2018—Subsec. (d).  Pub. L. 115–141 , in heading, struck out “and research credit” after “tax credit” and, in text, substituted “in the case of the investment credit determined under section 46 (other than the rehabilitation credit).” for “in the case of—\n“(1) the investment credit determined under section 46 (other than the rehabilitation credit), and\n“(2) the research credit determined under section 41(a) for a taxable year beginning before  January 1, 1990 .”\n2010—Subsec. (c)(14).  Pub. L. 111–148  added par. (14).\n2005—Subsec. (c)(13).  Pub. L. 109–58  added par. (13).\n2004—Subsec. (c)(11).  Pub. L. 108–357, §\u202f302(c)(2) , added par. (11).\nSubsec. (c)(12).  Pub. L. 108–357, §\u202f339(e) , added par. (12).\n2001—Subsec. (c)(10).  Pub. L. 107–16  added par. (10).\n2000—Subsec. (c)(9).  Pub. L. 106–554  added par. (9).\n1998—Subsec. (c)(8).  Pub. L. 105–206  added par. (8).\n1996—Subsec. (c)(2).  Pub. L. 104–188  substituted “work opportunity credit” for “targeted jobs credit”.\n1993—Subsec. (c)(6).  Pub. L. 103–66, §\u202f13302(b)(2) , added par. (6).\nSubsec. (c)(7).  Pub. L. 103–66, §\u202f13322(c)(2) , added par. (7).\n1990—Subsec. (c)(1).  Pub. L. 101–508, §\u202f11813(b)(12)(A) , substituted “section 46” for “section 46(a)” and “section 50(c)” for “section 48(q)”.\nSubsec. (c)(5).  Pub. L. 101–508, §\u202f11511(b)(3) , added par. (5).\nSubsec. (d)(1).  Pub. L. 101–508, §\u202f11813(b)(12)(B) , substituted “section 46” for “section 46(a)” and “other than the rehabilitation credit” for “other than a credit to which section 48(q)(3) applies”.\n1989—Subsec. (c)(4).  Pub. L. 101–239, §\u202f7814(e)(2)(D) , inserted “(other than such credit determined under section 280C(c)(3))” after “section 41(a)”.\nSubsec. (d).  Pub. L. 101–239, §\u202f7814(e)(1) , substituted “substituting ‘an amount equal to 50 percent of’ for ‘an amount equal to’ in the case of” for “substituting an amount equal to 50 percent of for an amount equal to in the case of” in introductory provisions.\nSubsec. (d)(2).  Pub. L. 101–239, §\u202f7110(c)(2) , inserted “for a taxable year beginning before  January 1, 1990 ” after “under section 41(a)”.\n1988—Subsec. (c)(4).  Pub. L. 100–647, §\u202f4008(b)(2)(A) , added par. (4).\nSubsec. (d).  Pub. L. 100–647, §\u202f4008(b)(2)(B) , inserted “and research credit” after “tax credit” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of the investment credit determined under section 46(a) (other than a credit to which section 48(q)(3) applies), subsection (a) shall be applied by substituting ‘an amount equal to 50 percent of’ for ‘an amount equal to’.”\n1984— Pub. L. 98–369  amended section generally, substituting provisions relating to deduction for certain unused business credits for provisions relating to deduction for certain unused investment credits.\nAmendment by  Pub. L. 111–148  applicable to amounts paid or incurred in taxable years beginning after  Dec. 31, 2009 , see  section 1421(f)(1) of Pub. L. 111–148 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 109–58  applicable to qualified new energy efficient homes acquired after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1332(f) of Pub. L. 109–58 , set out as a note under  section 38 of this title .\nAmendment by  section 302(c)(2) of Pub. L. 108–357  applicable to fuel produced, and sold or used, after  Dec. 31, 2004 , in taxable years ending after such date, see  section 302(d) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  section 339(e) of Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 339(f) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 107–16  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 2001 , with respect to qualified employer plans first effective after such date, see  section 619(d) of Pub. L. 107–16 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 106–554  applicable to investments made after  Dec. 31, 2000 , see §\u202f1(a)(7) [title I, §\u202f121(e)] of  Pub. L. 106–554 , set out as a note under  section 38 of this title .\nPub. L. 105–206, title VI, §\u202f6020(b) ,  July 22, 1998 ,  112 Stat. 823 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by section 13443 of the Revenue Reconciliation Act of 1993 [see  section 13443(d) of Pub. L. 103–66 , set out as an Effective Date of 1993 Amendment note under  section 38 of this title ].”\nAmendment by  Pub. L. 104–188  applicable to individuals who begin work for the employer after  Sept. 30, 1996 , see  section 1201(g) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  section 13322(c)(2) of Pub. L. 103–66  applicable to wages paid or incurred after  Dec. 31, 1993 , see  section 13322(f) of Pub. L. 103–66 , set out as a note under  section 38 of this title .\nAmendment by  section 11511(b)(3) of Pub. L. 101–508  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 1990 , see  section 11511(d)(1) of Pub. L. 101–508 , set out as an Effective Date note under  section 43 of this title .\nAmendment by  section 11813(b)(12) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  section 7110(c)(2) of Pub. L. 101–239  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 7110(e) of Pub. L. 101–239 , set out as a note under  section 41 of this title .\nAmendment by section 7814(e)(1), (2)(D) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1988 , see  section 4008(d) of Pub. L. 100–647 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 97–248, title II, §\u202f205(c)(1) ,  Sept. 3, 1982 ,  96 Stat. 430 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   General rule .— Except as otherwise provided in this paragraph, the amendments made by subsection (a) [enacting this section and amending sections 48, 312, and 1016 of this title] shall apply to periods after  December 31, 1982 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(B)   Exception .— The amendments made by subsection (a) shall not apply to any property which— “(i)  is constructed, reconstructed, erected, or acquired pursuant to a contract which was entered into after  August 13, 1981 , and was, on  July 1, 1982 , and at all times thereafter, binding on the taxpayer, \n \n “(ii)  is placed in service after  December 31, 1982 , and before  January 1, 1986 , \n \n “(iii)  with respect to which an election under section 168(f)(8)(A) of such Code is not in effect at any time, and \n \n “(iv)  is not described in section 167( l )(3)(A) of such Code. \n \n \n “(C)   Special rule for integrated manufacturing facilities.— “(i)   In general .— In the case of any integrated manufacturing facility, the requirements of clause (i) of subparagraph (B) shall be treated as met if— “(I)  the on-site construction of the facility began before  July 1, 1982 , and \n \n “(II)  during the period beginning after  August 13, 1981 , and ending on  July 1, 1982 , the taxpayer constructed (or entered into binding contracts for the construction of) more than 20 percent of the cost of such facility. \n \n \n “(ii)   Integrated manufacturing facility .— For purposes of clause (i), the term ‘integrated manufacturing facility’ means 1 or more facilities— “(I)  located on a single site, \n \n “(II)  for the manufacture of 1 or more manufactured products from raw materials by the application of 2 or more integrated manufacturing processes. \n \n \n \n “(D)   Special rule for historic structures .— In the case of any certified historic structure (as defined in section 48(g)(3) of the Internal Revenue Code of 1986), clause (i) of subparagraph (B) shall be applied by substituting ‘ December 31, 1980 ’ for ‘ August 13, 1981 .’ \n \n “(E)   Certain projects with respect to historic structures .— In the case of any certified historic structure (as so defined), the requirements of clause (i) of subparagraph (B) shall be treated as met with respect to such property— “(i)  if the rehabilitation begins after  December 31, 1980 , and before  July 1, 1982 , or \n \n “(ii)  if— “(I)  before  July 1, 1982 , a public offering with respect to interests in such property was registered with the Securities and Exchange Commission, \n \n “(II)  before such date an application with respect to such property was filed under section 8 of the United States Housing Act of 1937 [ section 1437f of Title 42 , The Public Health and Welfare], and \n \n “(III)  such property is placed in service before  July 1, 1984 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11813(b)(12) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer shall be entitled to an amortization deduction with respect to any amortizable section 197 intangible. The amount of such deduction shall be determined by amortizing the adjusted basis (for purposes of determining gain) of such intangible ratably over the 15-year period beginning with the month in which such intangible was acquired.\nExcept as provided in subsection (a), no depreciation or amortization deduction shall be allowable with respect to any amortizable section 197 intangible.\nFor exclusion of intangibles acquired in certain transactions, see subsection (f)(9).\nIn the case of a financial institution, the term “customer-based intangible” includes deposit base and similar items.\nThe term “supplier-based intangible” means any value resulting from future acquisitions of goods or services pursuant to relationships (contractual or otherwise) in the ordinary course of business with suppliers of goods or services to be used or sold by the taxpayer.\nAny interest in land.\nFor purposes of subparagraph (A), the term “computer software” means any program designed to cause a computer to perform a desired function. Such term shall not include any data base or similar item unless the data base or item is in the public domain and is incidental to the operation of otherwise qualifying computer software.\nAny right to service indebtedness which is secured by residential real property unless such right is acquired in a transaction (or series of related transactions) involving the acquisition of assets (other than rights described in this paragraph) constituting a trade or business or substantial portion thereof.\nAny fees for professional services, and any transaction costs, incurred by parties to a transaction with respect to which any portion of the gain or loss is not recognized under part III of subchapter C.\nIn the case of any section 197 intangible which is a covenant not to compete (or other arrangement) described in subsection (d)(1)(E), in no event shall such covenant or other arrangement be treated as disposed of (or becoming worthless) before the disposition of the entire interest described in such subsection in connection with which such covenant (or other arrangement) was entered into.\nAll persons treated as a single taxpayer under section 41(f)(1) shall be so treated for purposes of this paragraph.\nIn the case of any section 197 intangible transferred in a transaction described in subparagraph (B), the transferee shall be treated as the transferor for purposes of applying this section with respect to so much of the adjusted basis in the hands of the transferee as does not exceed the adjusted basis in the hands of the transferor.\nAny amount paid or incurred pursuant to a covenant or arrangement referred to in subsection (d)(1)(E) shall be treated as an amount chargeable to capital account.\nThe term “franchise” has the meaning given to such term by section 1253(b)(1).\nAny renewal of a franchise, trademark, or trade name (or of a license, a permit, or other right referred to in subsection (d)(1)(D)) shall be treated as an acquisition. The preceding sentence shall only apply with respect to costs incurred in connection with such renewal.\nAny amount to which section 1253(d)(1) applies shall not be taken into account under this section.\nFor purposes of this section, a sublease shall be treated in the same manner as a lease of the underlying property involved.\nFor purposes of this chapter, any amortizable section 197 intangible shall be treated as property which is of a character subject to the allowance for depreciation provided in section 167.\nThis section shall not apply to any increment in value if, without regard to this section, such increment is properly taken into account in determining the cost of property which is not a section 197 intangible.\nA person shall be treated as related to another person if such relationship exists immediately before or immediately after the acquisition of the intangible involved.\nSubparagraph (A) shall not apply to the acquisition of any property by the taxpayer if the basis of the property in the hands of the taxpayer is determined under section 1014(a).\nWith respect to any increase in the basis of partnership property under section 732, 734, or 743, determinations under this paragraph shall be made at the partner level and each partner shall be treated as having owned and used such partner’s proportionate share of the partnership assets.\nThe term “amortizable section 197 intangible” does not include any section 197 intangible acquired in a transaction, one of the principal purposes of which is to avoid the requirement of subsection (c)(1) that the intangible be acquired after the date of the enactment of this section or to avoid the provisions of subparagraph (A).\nIn the case of any section 197 intangible which would be tax-exempt use property as defined in subsection (h) of section 168 if such section applied to such intangible, the amortization period under this section shall not be less than 125 percent of the lease term (within the meaning of section 168(i)(3)).\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including such regulations as may be appropriate to prevent avoidance of the purposes of this section through related persons or otherwise.\nThe date of the enactment of this section, referred to in subsecs. (c)(1)(A) and (f)(9)(A), (F), is the date of enactment of  Pub. L. 103–66 , which was approved  Aug. 10, 1993 .\n2004—Subsec. (e)(6) to (8).  Pub. L. 108–357, §\u202f886(a) , redesignated pars. (7) and (8) as (6) and (7), respectively, and struck out heading and text of former par. (6). Text read as follows: “A franchise to engage in professional football, basketball, baseball, or other professional sport, and any item acquired in connection with such a franchise.”\nSubsec. (f)(10).  Pub. L. 108–357, §\u202f847(b)(3) , added par. (10).\nAmendment by  section 847(b)(3) of Pub. L. 108–357  applicable to leases entered into after  Oct. 3, 2004 , see  section 849(b)(4) of Pub. L. 108–357 , set out as an Effective Date note under  section 470 of this title .\nPub. L. 108–357, title VIII, §\u202f886(c) ,  Oct. 22, 2004 ,  118 Stat. 1641 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1245 and 1253 of this title and repealing  section 1056 of this title ] shall apply to property acquired after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(2)   Section 1245 .— The amendment made by subsection (b)(2) [amending  section 1245 of this title ] shall apply to franchises acquired after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 103–66, title XIII, §\u202f13261(g) ,  Aug. 10, 1993 ,  107 Stat. 540 , as amended by  Pub. L. 104–188, title I, §\u202f1703 ( l ),  Aug. 20, 1996 ,  110 Stat. 1877 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending sections 167, 642, 848, 1016, 1060, 1245, and 1253 of this title] shall apply with respect to property acquired after the date of the enactment of this Act [ Aug. 10, 1993 ]. \n \n “(2)   Election to have amendments apply to property acquired after  july 25, 1991 .— “(A)   In general .— If an election under this paragraph applies to the taxpayer— “(i)  the amendments made by this section shall apply to property acquired by the taxpayer after  July 25, 1991 , \n \n “(ii)  subsection (c)(1)(A) of section 197 of the Internal Revenue Code of 1986 (as added by this section) (and so much of subsection (f)(9)(A) of such section 197 as precedes clause (i) thereof) shall be applied with respect to the taxpayer by treating  July 25, 1991 , as the date of the enactment of such section, and \n \n “(iii)  in applying subsection (f)(9) of such section, with respect to any property acquired by the taxpayer or a related person on or before the date of the enactment of this Act, only holding or use on  July 25, 1991 , shall be taken into account. \n \n \n “(B)   Election .— An election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe. Such an election by any taxpayer, once made— “(i)  may be revoked only with the consent of the Secretary, and \n \n “(ii)  shall apply to the taxpayer making such election and any other taxpayer under common control with the taxpayer (within the meaning of subparagraphs (A) and (B) of section 41(f)(1) of such Code) at any time after  August 2, 1993 , and on or before the date on which such election is made. \n \n \n \n “(3)   Elective binding contract exception.— “(A)   In general .— The amendments made by this section shall not apply to any acquisition of property by the taxpayer if— “(i)  such acquisition is pursuant to a written binding contract in effect on the date of the enactment of this Act and at all times thereafter before such acquisition, \n \n “(ii)  an election under paragraph (2) does not apply to the taxpayer, and \n \n “(iii)  the taxpayer makes an election under this paragraph with respect to such contract. \n \n \n “(B)   Election .— An election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. Such an election, once made— “(i)  may be revoked only with the consent of the Secretary, and \n \n “(ii)  shall apply to all property acquired pursuant to the contract with respect to which such election was made.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'A taxpayer may elect to treat any qualified environmental remediation expenditure which is paid or incurred by the taxpayer as an expense which is not chargeable to capital account. Any expenditure which is so treated shall be allowed as a deduction for the taxable year in which it is paid or incurred.\nSuch term shall not include any expenditure for the acquisition of property of a character subject to the allowance for depreciation which is used in connection with the abatement or control of hazardous substances at a qualified contaminated site; except that the portion of the allowance under section 167 for such property which is otherwise allocated to such site shall be treated as a qualified environmental remediation expenditure.\nSuch term shall not include any site which is on, or proposed for, the national priorities list under section 105(a)(8)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (as in effect on the date of the enactment of this section).\nAn area shall be treated as a qualified contaminated site with respect to expenditures paid or incurred during any taxable year only if the taxpayer receives a statement from the appropriate agency of the State in which such area is located that such area meets the requirement of paragraph (1)(B).\nFor purposes of paragraph (3), the chief executive officer of each State may, in consultation with the Administrator of the Environmental Protection Agency, designate the appropriate State environmental agency within 60 days of the date of the enactment of this section. If the chief executive officer of a State has not designated an appropriate environmental agency within such 60-day period, the appropriate environmental agency for such State shall be designated by the Administrator of the Environmental Protection Agency.\nSuch term shall not include any substance with respect to which a removal or remedial action is not permitted under section 104 of such Act by reason of subsection (a)(3) thereof.\nSections 280B and 468 shall not apply to amounts which are treated as expenses under this section.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\nThis section shall not apply to expenditures paid or incurred after  December 31, 2011 .\nThe date of the enactment of this section, referred to in subsec. (c)(2), (4), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nSections 101(14), 102, 104, and 105(a)(8)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, referred to in subsecs. (c)(2) and (d), are classified to sections 9601(14), 9602, 9604, and 9605(a)(8)(B), respectively, of Title 42, The Public Health and Welfare.\n2010—Subsec. (h).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (h).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2006—Subsec. (d)(1)(C).  Pub. L. 109–432, §\u202f109(b) , added subpar. (C).\nSubsec. (h).  Pub. L. 109–432, §\u202f109(a) , substituted “2007” for “2005”.\n2004—Subsec. (h).  Pub. L. 108–311  substituted “2005” for “2003”.\n2000—Subsec. (c).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f162(a)] , amended subsec. (c) generally. Prior to amendment, subsec. (c) defined the term “qualified contaminated site” to include certain property described in  section 1221(a)(1) of this title , within a targeted area, and at which there had been a release or disposal of any hazardous substance, provided that an area could be treated as a qualified contaminated site only if the taxpayer received a certain statement from an appropriate State agency, provided for designation of appropriate State agencies, and defined targeted area.\nSubsec. (h).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f162(b)] , substituted “2003” for “2001”.\n1999—Subsec. (c)(1)(A)(i).  Pub. L. 106–170, §\u202f532(c)(2)(A) , substituted “section 1221(a)(1)” for “section 1221(1)”.\nSubsec. (h).  Pub. L. 106–170, §\u202f511 , substituted “2001” for “2000”.\nPub. L. 111–312, title VII, §\u202f745(b) ,  Dec. 17, 2010 ,  124 Stat. 3319 , provided that:  “The amendment made by this section [amending this section] shall apply to expenditures paid or incurred after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f318(b) ,  Oct. 3, 2008 ,  122 Stat. 3873 , provided that:  “The amendment made by this section [amending this section] shall apply to expenditures paid or incurred after  December 31, 2007 .”\nPub. L. 109–432, div. A, title I, §\u202f109(c) ,  Dec. 20, 2006 ,  120 Stat. 2939 , provided that:  “The amendments made by this section [amending this section] shall apply to expenditures paid or incurred after  December 31, 2005 .”\nPub. L. 108–311, title III, §\u202f308(b) ,  Oct. 4, 2004 ,  118 Stat. 1179 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to expenditures paid or incurred after  December 31, 2003 .”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f162(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–625, provided that:  “The amendments made by this section [amending this section] shall apply to expenditures paid or incurred after the date of the enactment of this Act [ Dec. 21, 2000 ].”\nAmendment by  section 532(c)(2)(A) of Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title IX, §\u202f941(c) ,  Aug. 5, 1997 ,  111 Stat. 885 , provided that:  “The amendments made by this section [enacting this section] shall apply to expenditures paid or incurred after the date of the enactment of this Act [ Aug. 5, 1997 ], in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 110–343, div. C, title VII, §\u202f707(a) ,  Oct. 3, 2008 ,  122 Stat. 3923 , related to expensing of qualified disaster expenses. Repeal was executed to this section, which is in part VI of subchapter B of chapter 1, to reflect the probable intent of Congress, notwithstanding directory language of  Pub. L. 113–295 , which repealed section 198A in part VI of subchapter A of chapter 1.\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'Section, added  Pub. L. 108–357, title I, §\u202f102(a) ,  Oct. 22, 2004 ,  118 Stat. 1424 ; amended  Pub. L. 109–135, title IV, §\u202f403(a)(1) –(13),  Dec. 21, 2005 ,  119 Stat. 2615–2619 ;  Pub. L. 109–222, title V, §\u202f514(a) , (b),  May 17, 2006 ,  120 Stat. 366 ;  Pub. L. 109–432, div. A, title IV, §\u202f401(a) ,  Dec. 20, 2006 ,  120 Stat. 2953 ;  Pub. L. 110–343, div. B, title IV, §\u202f401(a) , (b), div. C, title III, §\u202f312(a), title V, §\u202f502(c),  Oct. 3, 2008 ,  122 Stat. 3851 , 3869, 3876;  Pub. L. 111–312, title VII, §\u202f746(a) ,  Dec. 17, 2010 ,  124 Stat. 3319 ;  Pub. L. 112–240, title III, §\u202f318(a) ,  Jan. 2, 2013 ,  126 Stat. 2331 ;  Pub. L. 113–295, div. A, title I, §\u202f130(a) , title II, §§\u202f219(b), 221(a)(37),  Dec. 19, 2014 ,  128 Stat. 4018 , 4035, 4043;  Pub. L. 114–113, div. P, title III, §\u202f305(a) , div. Q, title I, §\u202f170(a),  Dec. 18, 2015 ,  129 Stat. 3040 , 3069, related to deduction of income attributable to domestic production activities.\nPrior to repeal by  section 13305(a) of Pub. L. 115–97 , subsection (c)(3)(C) of this section read as follows:\n(c) Qualified production activities income\n(3) Special rules for determining costs\n(C) Transportation costs of independent refiners\n(i) In general\nIn the case of any taxpayer who is in the trade or business of refining crude oil and who is not a major integrated oil company (as defined in section 167(h)(5)(B), determined without regard to clause (iii) thereof) for the taxable year, in computing oil related qualified production activities income under subsection (d)(9)(B), the amount allocated to domestic production gross receipts under paragraph (1)(B) for costs related to the transportation of oil shall be 25 percent of the amount properly allocable under such paragraph (determined without regard to this subparagraph).\n(ii) Termination\nClause (i) shall not apply to any taxable year beginning after  December 31, 2021 .\nSee Amendment Relating to Consolidated Appropriations Act, 2016 note below.\nPrior to repeal by  section 13305(a) of Pub. L. 115–97 , subsection (d)(8) of this section read as follows:\n(d) Definitions and special rules\n(8) Treatment of activities in Puerto Rico\n(A) In general\nIn the case of any taxpayer with gross receipts for any taxable year from sources within the Commonwealth of Puerto Rico, if all of such receipts are taxable under section 1 or 11 for such taxable year, then for purposes of determining the domestic production gross receipts of such taxpayer for such taxable year under subsection (c)(4), the term “United States” shall include the Commonwealth of Puerto Rico.\n(B) Special rule for applying wage limitation\nIn the case of any taxpayer described in subparagraph (A), for purposes of applying the limitation under subsection (b) for any taxable year, the determination of W–2 wages of such taxpayer shall be made without regard to any exclusion under section 3401(a)(8) for remuneration paid for services performed in Puerto Rico.\n(C) Termination\nThis paragraph shall apply only with respect to the first 11 taxable years of the taxpayer beginning after  December 31, 2005 , and before  January 1, 2017 .\nSee Extension of Deduction Allowable With Respect to Income Attributable to Domestic Production Activities in Puerto Rico note below.\nRepeal applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 74 of this title .\nPub. L. 115–141, div. U, title I, §\u202f102 ,  Mar. 23, 2018 ,  132 Stat. 1169 , provided that: \n “(a)   Amendment Relating to Section  305  of Division P .— For purposes of applying section 199(c)(3)(C)(i) of the Internal Revenue Code of 1986 (as in effect before its repeal by  Public Law 115–97 ) [see Subsection (c)(3)(C) of this Section Prior to Repeal note above] to taxable years beginning after  December 31, 2015 , and before  January 1, 2018 , such section shall be applied— “(1)  by inserting ‘who elects the application of this clause for any taxable year,’ after ‘In the case of any taxpayer’, \n \n “(2)  by substituting ‘,\u2000and who’ for ‘and who’, \n \n “(3)  by substituting ‘such taxable year’ for ‘the taxable year’, and \n \n “(4)  by substituting ‘(as defined in subsection (d)(9)(B))’ for ‘under subsection (d)(9)(B)’. \n \n \n “(b)   Effective Date .— The amendment made by this section [amending this section] shall take effect as if included in section 305 of division P of the Consolidated Appropriations Act, 2016 [ Pub. L. 114–113 ].”\nPub. L. 115–123, div. D, title I, §\u202f40309 ,  Feb. 9, 2018 ,  132 Stat. 146 , provided that:  \n “For purposes of applying section 199(d)(8)(C) of the Internal Revenue Code of 1986 [see Subsection (d)(8) of this Section Prior to Repeal note above] with respect to taxable years beginning during 2017, such section shall be applied— \n “(1)  by substituting ‘first 12 taxable years’ for ‘first 11 taxable years’, and \n \n “(2)  by substituting ‘ January 1, 2018 ’ for ‘ January 1, 2017 ’.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS'},
  'content': 'In the case of any taxpayer whose taxable income for the taxable year does not exceed the threshold amount, paragraph (2) shall be applied without regard to subparagraph (B).\nThe term “W–2 wages” means, with respect to any person for any taxable year of such person, the amounts described in paragraphs (3) and (8) of section 6051(a) paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year.\nSuch term shall not include any amount which is not properly allocable to qualified business income for purposes of subsection (c)(1).\nSuch term shall not include any amount which is not properly included in a return filed with the Social Security Administration on or before the 60th day after the due date (including extensions) for such return.\nThe Secretary shall provide for the application of this subsection in cases of a short taxable year or where the taxpayer acquires, or disposes of, the major portion of a trade or business or the major portion of a separate unit of a trade or business during the taxable year.\nThe term “qualified business income” means, for any taxable year, the net amount of qualified items of income, gain, deduction, and loss with respect to any qualified trade or business of the taxpayer. Such term shall not include any qualified REIT dividends or qualified publicly traded partnership income.\nIf the net amount of qualified income, gain, deduction, and loss with respect to qualified trades or businesses of the taxpayer for any taxable year is less than zero, such amount shall be treated as a loss from a qualified trade or business in the succeeding taxable year.\nExcept as otherwise provided in subsection (g)(2)(B), taxable income shall be computed without regard to any deduction allowable under this section.\nThe term “threshold amount” means $157,500 (200 percent of such amount in the case of a joint return).\nRules similar to the rules under section 199(d)(1)(B)(i) (as in effect on  December 1, 2017 ) for the apportionment of W–2 wages shall apply to the apportionment of W–2 wages and the apportionment of unadjusted basis immediately after acquisition of qualified property under this section.\nIn the case of any taxpayer with qualified business income from sources within the commonwealth of Puerto Rico, if all such income is taxable under section 1 for such taxable year, then for purposes of determining the qualified business income of such taxpayer for such taxable year, the term “United States” shall include the Commonwealth of Puerto Rico.\nIn the case of any taxpayer described in clause (i), the determination of W–2 wages of such taxpayer with respect to any qualified trade or business conducted in Puerto Rico shall be made without regard to any exclusion under section 3401(a)(8) for remuneration paid for services in Puerto Rico.\nFor purposes of determining alternative minimum taxable income under section 55, qualified business income shall be determined without regard to any adjustments under sections 56 through 59.\nThe deduction under subsection (a) shall only be allowed for purposes of this chapter.\nThe deduction allowable under subparagraph (A) for any taxable year shall not exceed 50 percent of the W–2 wages of the taxpayer for the taxable year.\nFor purposes of this subparagraph, the W–2 wages of the taxpayer shall be determined in the same manner as under subsection (b)(4) (without regard to subparagraph (B) thereof and after application of subsection (b)(5)), except that such wages shall not include any amount which is not properly allocable to domestic production gross receipts for purposes of paragraph (3)(A).\nFor purposes of this subsection, the taxable income of a specified agricultural or horticultural cooperative shall be computed without regard to any deduction allowable under subsection (b) or (c) of section 1382 (relating to patronage dividends, per-unit retain allocations, and nonpatronage distributions).\nThe deduction allowed to any taxpayer under this paragraph shall not exceed the taxable income of the taxpayer determined without regard to the deduction allowed under this paragraph and after taking into account any deduction allowed to the taxpayer under subsection (a) for the taxable year.\nThe taxable income of a specified agricultural or horticultural cooperative shall not be reduced under section 1382 by reason of that portion of any qualified payment as does not exceed the deduction allowable under subparagraph (A) with respect to such payment.\nThe Secretary shall prescribe rules for the proper allocation of items described in subparagraph (A) for purposes of determining qualified production activities income. Such rules shall provide for the proper allocation of items whether or not such items are directly allocable to domestic production gross receipts.\nFor purposes of determining costs under subclause (I) of subparagraph (A)(ii), any item or service brought into the United States shall be treated as acquired by purchase, and its cost shall be treated as not less than its value immediately after it entered the United States. A similar rule shall apply in determining the adjusted basis of leased or rented property where the lease or rental gives rise to domestic production gross receipts.\nIn the case of any property described in clause (i) that had been exported by the taxpayer for further manufacture, the increase in cost or adjusted basis under clause (i) shall not exceed the difference between the value of the property when exported and the value of the property when brought back into the United States after the further manufacture.\nThe term “domestic production gross receipts” means the gross receipts of the taxpayer which are derived from any lease, rental, license, sale, exchange, or other disposition of any agricultural or horticultural product which was manufactured, produced, grown, or extracted by the taxpayer (determined after the application of paragraph (4)(B)) in whole or significant part within the United States. Such term shall not include gross receipts of the taxpayer which are derived from the lease, rental, license, sale, exchange, or other disposition of land.\nThe term “domestic production gross receipts” shall not include any gross receipts of the taxpayer derived from property leased, licensed, or rented by the taxpayer for use by any related person.\nFor purposes of subclause (I), a person shall be treated as related to another person if such persons are treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or ( o ) of section 414, except that determinations under subsections (a) and (b) of section 52 shall be made without regard to section 1563(b).\nA specified agricultural or horticultural cooperative described in subparagraph (A)(ii) shall be treated as having manufactured, produced, grown, or extracted in whole or significant part any agricultural or horticultural product marketed by the specified agricultural or horticultural cooperative which its patrons have so manufactured, produced, grown, or extracted.\nAll members of an expanded affiliated group shall be treated as a single corporation for purposes of this subsection.\nFor purposes of paragraph (3)(D), if all of the interests in the capital and profits of a partnership are owned by members of a single expanded affiliated group at all times during the taxable year of such partnership, the partnership and all members of such group shall be treated as a single taxpayer during such period.\nExcept as provided in regulations, the deduction under paragraph (1) shall be allocated among the members of the expanded affiliated group in proportion to each member’s respective amount (if any) of qualified production activities income.\nIn the case of a specified agricultural or horticultural cooperative which is a partner in a partnership, rules similar to the rules of subsection (f)(1) shall apply for purposes of this subsection.\nThis subsection shall be applied by only taking into account items which are attributable to the actual conduct of a trade or business.\nFor purposes of determining the tax imposed by section 511, this section shall be applied by substituting “unrelated business taxable income” for “taxable income” each place it appears in this section (other than this subparagraph).\nFor purposes of this subparagraph, the term “oil related qualified production activities income” means for any taxable year the qualified production activities income which is attributable to the production, refining, processing, transportation, or distribution of oil, gas, or any primary product thereof (within the meaning of section 927(a)(2)(C), as in effect before its repeal) during such taxable year.\nThe Secretary shall prescribe such regulations as are necessary to carry out the purposes of this subsection, including regulations which prevent more than 1 taxpayer from being allowed a deduction under this subsection with respect to any activity described in paragraph (3)(D)(i). Such regulations shall be based on the regulations applicable to cooperatives and their patrons under section 199 (as in effect before its repeal).\nThis section shall not apply to taxable years beginning after  December 31, 2025 .\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSection 199(d)(1)(B)(i) (as in effect on  December 1, 2017 ), referred to in subsec. (f)(1)(B), means  section 199(d)(1)(B)(i) of this title  prior to repeal of section 199 by  Pub. L. 115–97, title I, §\u202f13305(a) ,  Dec. 22, 2017 ,  131 Stat. 2126 .\n2018—Subsec. (a).  Pub. L. 115–141, §\u202f101(b)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) provided equation for allowed deduction for any taxable year, which included special deduction for qualified cooperative dividends.\nSubsec. (b)(7).  Pub. L. 115–141, §\u202f101(b)(3) , added par. (7).\nSubsec. (c)(1).  Pub. L. 115–141, §\u202f101(b)(2)(A) , struck out “,\u2000qualified cooperative dividends,” after “qualified REIT dividends”.\nSubsec. (c)(3)(B).  Pub. L. 115–141, §\u202f101(b)(2)(B)(i)(I) , struck out “investment” before “items” in introductory provisions.\nSubsec. (c)(3)(B)(ii).  Pub. L. 115–141, §\u202f101(b)(2)(B)(i)(II) , inserted at end “Any amount described in section 1385(a)(1) shall not be treated as described in this clause.”\nSubsec. (e)(1).  Pub. L. 115–141, §\u202f101(a)(2)(C) , substituted “Except as otherwise provided in subsection (g)(2)(B), taxable income” for “Taxable income”.\nPub. L. 115–141, §\u202f101(a)(2)(A) , substituted “any deduction” for “the deduction”.\nSubsec. (e)(4), (5).  Pub. L. 115–141, §\u202f101(b)(2)(B)(ii) , redesignated par. (5) as (4) and struck out former par. (4) which defined “qualified cooperative dividend”.\nSubsec. (g).  Pub. L. 115–141, §\u202f101(a)(1) , amended subsec. (g) generally. Prior to amendment, subsec. (g) related to deduction allowed to specified agricultural or horticultural cooperatives.\nAmendment by  Pub. L. 115–141  effective as if included in  section 11011 of Pub. L. 115–97 , see  section 101(d) of Pub. L. 115–141 , set out as a note under  section 62 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 62 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'In computing taxable income under section 63, there shall be allowed as deductions the items specified in this part, subject to the exceptions provided in part IX (section 261 and following, relating to items not deductible).\n1977— Pub. L. 95–30  substituted “section 63” for “section 63(a)”.\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'No deductions to be allowed in computing taxable income for two-thirds of any amount paid or incurred on a judgment entered against any person in a suit brought under  section 208(b) of Pub. L. 94–12 , see  section 208(c) of Pub. L. 94–12 , set out as a note under  section 44 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'There shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), to the extent that such expenses exceed 7.5 percent of adjusted gross income.\nAn amount paid during the taxable year for medicine or a drug shall be taken into account under subsection (a) only if such medicine or drug is a prescribed drug or is insulin.\nFor purposes of subsection (a), expenses for the medical care of the taxpayer which are paid out of his estate during the 1-year period beginning with the day after the date of his death shall be treated as paid by the taxpayer at the time incurred.\nAny expense allowed as a credit under section 21 shall not be treated as an expense paid for medical care.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Social Security Act, referred to in subsec. (d)(1)(D), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Part B of title XVIII of the Social Security Act is classified generally to part B (§\u202f1395j et seq.) of subchapter XVIII of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2020—Subsec. (a).  Pub. L. 116–260, §\u202f101(a)(1) , substituted “7.5 percent” for “10 percent”.\nSubsec. (f).  Pub. L. 116–260, §\u202f101(a)(2) , struck out subsec. (f). Text read as follows: “In the case of taxable years beginning before  January 1, 2021 , subsection (a) shall be applied with respect to a taxpayer by substituting ‘7.5 percent’ for ‘10 percent’.”\n2019—Subsec. (f).  Pub. L. 116–94  amended subsec. (f) generally. Prior to amendment, subsec. (f) provided that subsec. (a) was to be applied with respect to a taxpayer by substituting “7.5 percent” for “10 percent” under certain special rules for 2013 through 2018.\n2017—Subsec. (d)(10)(B)(ii).  Pub. L. 115–97, §\u202f11002(d)(7) , reenacted heading and introductory provisions without change and amended subcls. (I) and (II) generally. Prior to amendment, subcls. (I) and (II) read as follows:\n“(I) the medical care component of the Consumer Price Index (as defined in section 1(f)(5)) for August of the preceding calendar year, exceeds\n“(II) such component for August of 1996.”\nSubsec. (f).  Pub. L. 115–97, §\u202f11027(a) , amended subsec. (f) generally. Prior to amendment, text read as follows: “In the case of any taxable year beginning after  December 31, 2012 , and ending before  January 1, 2017 , subsection (a) shall be applied with respect to a taxpayer by substituting ‘7.5 percent’ for ‘10 percent’ if such taxpayer or such taxpayer’s spouse has attained age 65 before the close of such taxable year.”\n2010—Subsec. (a).  Pub. L. 111–148, §\u202f9013(a) , substituted “10 percent” for “7.5 percent”.\nSubsec. (f).  Pub. L. 111–148, §\u202f9013(b) , added subsec. (f).\n2004—Subsec. (a).  Pub. L. 108–311, §\u202f207(17) , inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\nSubsec. (d)(11).  Pub. L. 108–311, §\u202f207(18) , substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)” in concluding provisions.\n1996—Subsec. (d)(1).  Pub. L. 104–191, §\u202f322(b)(2)(A) , inserted concluding provisions “In the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in paragraph (10)) shall be taken into account under subparagraph (D).”\nSubsec. (d)(1)(B).  Pub. L. 104–191, §\u202f322(a) , struck out “or” at end.\nSubsec. (d)(1)(C).  Pub. L. 104–191, §\u202f322(a) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (d)(1)(D).  Pub. L. 104–191, §\u202f322(b)(1) , inserted before period “or for any qualified long-term care insurance contract (as defined in section 7702B(b))”.\nPub. L. 104–191, §\u202f322(a) , redesignated subpar. (C) as (D).\nSubsec. (d)(6).  Pub. L. 104–191, §\u202f322(b)(3)(A) , substituted “subparagraphs (A), (B), and (C)” for “subparagraphs (A) and (B)” in introductory provisions.\nSubsec. (d)(6)(A).  Pub. L. 104–191, §\u202f322(b)(3)(B) , substituted “paragraph (1)(D)” for “paragraph (1)(C)”.\nSubsec. (d)(7).  Pub. L. 104–191, §\u202f322(b)(4) , substituted “subparagraphs (A), (B), and (C)” for “subparagraphs (A) and (B)”.\nSubsec. (d)(10), (11).  Pub. L. 104–191, §\u202f322(b)(2)(C) , added pars. (10) and (11).\n1993—Subsec. (f).  Pub. L. 103–66  struck out heading and text of subsec. (f). Text read as follows: “The amount otherwise taken into account under subsection (a) as expenses paid for medical care shall be reduced by the amount (if any) of the health insurance credit allowable to the taxpayer for the taxable year under section 32.”\n1990—Subsec. (d)(9).  Pub. L. 101–508, §\u202f11342(a) , added par. (9).\nSubsec. (f).  Pub. L. 101–508, §\u202f11111(d)(1) , added subsec. (f).\n1986—Subsec. (a).  Pub. L. 99–514  substituted “7.5 percent” for “5 percent”.\n1984—Subsec. (d)(2), (3).  Pub. L. 98–369, §\u202f482(a) , added par. (2) and redesignated former par. (2) as (3). Former par. (3) redesignated (4).\nSubsec. (d)(4).  Pub. L. 98–369, §\u202f482(a) , redesignated par. (3) as (4). Former par. (4), as added by  Pub. L. 98–369, §\u202f423(b)(1) , redesignated (5).\nPub. L. 98–369, §\u202f423(b)(1) , added par. (4). Former par. (4) redesignated (5).\nSubsec. (d)(5).  Pub. L. 98–369, §\u202f482(a) , redesignated par. (4) as (5). Former par. (5) redesignated (6).\nPub. L. 98–369, §\u202f423(b)(1) , redesignated former par. (4) as (5). Former par. (5) redesignated (6).\nPub. L. 98–369, §\u202f711(b) , substituted “paragraph (4)” for “paragraph (2)”.\nSubsec. (d)(6).  Pub. L. 98–369, §\u202f482(a) , redesignated par. (5) as (6). Former par. (6) redesignated (7).\nPub. L. 98–369, §\u202f423(b)(1) , (3), redesignated former par. (5) as (6) and substituted therein “limitations of paragraph (5)” for “limitations of paragraph (4)”. Former par. (6) redesignated (7).\nSubsec. (d)(7).  Pub. L. 98–369, §\u202f482(a) , (b)(1), redesignated par. (6) as (7) and substituted therein “paragraph (6)” for “paragraph (5)”. Former par. (7) redesignated (8).\nPub. L. 98–369, §\u202f423(b)(1) , redesignated former par. (6) as (7).\nSubsec. (d)(8).  Pub. L. 98–369, §\u202f482(a) , redesignated par. (7) as (8).\nSubsec. (e).  Pub. L. 98–369, §\u202f474(r)(9) , substituted “section 21” for “section 44A”.\n1982—Subsec. (a).  Pub. L. 97–248, §\u202f202(a) , substituted provisions that there shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152), to the extent that such expenses exceed 5 percent of adjusted gross income, for provision allowing as deductions the amount by which the amount of the expenses paid during the taxable year (reduced by any amount deductible under paragraph (2)) for medical care of the taxpayer, his spouse, and dependents (as defined in section 152) exceeded 3 percent of the adjusted gross income, and an amount (not in excess of $150) equal to one-half of the expenses paid during the taxable year for insurance which constituted medical care for the taxpayer, his spouse, and dependents.\nSubsec. (b).  Pub. L. 97–248, §\u202f202(b)(1) , amended subsec. (b) generally, substituting provision that an amount paid during the taxable year for medicine or a drug shall be taken into account under subsec. (a) only if such medicine or drug is a prescribed drug or is insulin for former provision that amounts paid during the taxable year for medicine and drugs which (but for this subsection) would have been taken into account in computing the deduction under subsec. (a) would be taken into account only to the extent that the aggregate of such amounts exceeded 1 percent of the adjusted gross income.\nSubsec. (c).  Pub. L. 97–248, §\u202f202(b)(3)(B) , redesignated subsec. (d) as (c). Former subsec. (c) was repealed by  Pub. L. 89–97 .\nSubsec. (d).  Pub. L. 97–248, §\u202f202(b)(2) , (3)(A), (B), redesignated subsec. (e) as (d), added pars. (2) and (3), and redesignated former pars. (2), (3), and (4) as (4), (5), and (6), respectively. Former subsec. (d) redesignated (c).\nSubsecs. (e), (f).  Pub. L. 97–248, §\u202f202(b)(3)(B) , redesignated subsecs. (e) and (f) as (d) and (e), respectively.\n1976—Subsec. (d)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f504(c)(1) , substituted “a credit under section 44A” for “a deduction under section 214” after “allowed as”.\n1965—Subsec. (a).  Pub. L. 89–97, §\u202f106(a) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “There shall be allowed as a deduction the following amounts of the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152):\n“(1) If neither the taxpayer nor his spouse has attained the age of 65 before the close of the taxable year—\n“(A) the amount of such expenses for the care of any dependent who—\n“(i) is the mother or father of the taxpayer or of his spouse, and\n“(ii) has attained the age of 65 before the close of the taxable year, and\n“(B) the amount by which such expenses for the care of the taxpayer, his spouse, and such dependents (other than any dependent described in subparagraph (A)) exceed 3 percent of the adjusted gross income.\n“(2) If either the taxpayer or his spouse has attained the age of 65 before the close of the taxable year—\n“(A) the amount of such expenses for the care of the taxpayer and his spouse.\n“(B) the amount of such expenses for the care of any dependent described in paragraph (1)(A), and\n“(C) the amount by which such expenses for the care of such dependents (other than any dependent described in paragraph (1)(A)) exceed 3 percent of the adjusted gross income.”\nSubsec. (b).  Pub. L. 89–97, §\u202f106(b) , struck out second sentence which read: “The preceding sentence shall not apply to amounts paid for the care of—\n“(1) the taxpayer and his spouse, if either of them has attained the age of 65 before the close of the taxable year, or\n“(2) any dependent described in subsection (a)(1)(A).”\nSubsec. (c).  Pub. L. 89–97, §\u202f106(d)(1) , struck out subsec. (c) relating to maximum limitations on medical and dental expenses under this section.\nSubsec. (e).  Pub. L. 89–97, §\u202f106(c) , struck out from par. (1)(A) “including amounts paid for accident or health insurance” after “function of the body”, added pars. (1)(C), (2), and (3), and renumbered former par. (2) as (4).\nSubsec. (g).  Pub. L. 89–97, §\u202f106(d)(1) , struck out provisions relating to maximum limitation if taxpayer or spouse has attained age 65 and is disabled, special rule, amounts taken into account, meaning of disabled, and determination of status.\n1964—Subsec. (b).  Pub. L. 88–272  excluded persons attaining age 65 before the close of the taxable year from the limitation, whether they are the taxpayer and his spouse, or the mother or father of the taxpayer and his spouse.\n1962—Subsec. (c).  Pub. L. 87–863, §\u202f1(a) , substituted “$5,000” for “$2,500”, “$10,000” for “$5,000”, and “$20,000” for “$10,000”.\nSubsec. (g).  Pub. L. 87–863, §\u202f1(b) , substituted “$20,000” for “$15,000” in three places, and “$40,000” for “$30,000”.\n1960—Subsec. (a).  Pub. L. 86–470  authorized a taxpayer to deduct medical care expenses for dependent parents of the taxpayer or his spouse who have attained the age of 65 before the close of the taxable year without applying the three percent limitation.\n1958—Subsec. (c).  Pub. L. 85–866, §\u202f17(b) , substituted “Except as provided in subsection (g), the” for “The”.\nSubsec. (d)(2)(A).  Pub. L. 85–866, §\u202f16 , struck out “claimed or” before “allowed”.\nSubsec. (g).  Pub. L. 85–866, §\u202f17(A) , added subsec. (g).\nPub. L. 116–260, div. EE, title I, §\u202f101(b) ,  Dec. 27, 2020 ,  134 Stat. 3039 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nAmendment by  Pub. L. 116–94  applicable to taxable years ending after  Dec. 31, 2018 , see  section 103(c) of Pub. L. 116–94 , set out as a note under  section 56 of this title .\nAmendment by  section 11002(d)(7) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 11027(a) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2016 , see  section 11027(c) of Pub. L. 115–97 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 9013(d) of Pub. L. 111–148 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 104–191  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 322(c) of Pub. L. 104–191 , set out as a note under  section 162 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1993 , see  section 13131(e) of Pub. L. 103–66 , set out as a note under  section 32 of this title .\nAmendment by  section 11111(d)(1) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11111(f) of Pub. L. 101–508 , set out as a note under  section 32 of this title .\nPub. L. 101–508, title XI, §\u202f11342(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–472 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 423(b) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 423(d) of Pub. L. 98–369 , set out as a note under  section 2 of this title .\nAmendment by  section 474(r)(9) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f482(c) ,  July 18, 1984 ,  98 Stat. 848 , provided that:  “The amendments made by this section [amending this section and  section 152 of this title ] shall apply to taxable years beginning after  December 31, 1983 .”\nAmendment by  section 711(b) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f202(c) ,  Sept. 3, 1982 ,  96 Stat. 421 , provided that: \n “(1)   Subsection  (a).— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section and  section 105 of this title ] shall apply to taxable years beginning after  December 31, 1983 .”\nAmendment by  section 504(c)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as a note under  section 3 of this title .\nPub. L. 89–97, title I, §\u202f106(e) ,  July 30, 1965 ,  79 Stat. 337 , provided that:  “The amendments made by this section [amending this section and sections 72, 79, 401, and 405 of this title] shall apply to taxable years beginning after  December 31, 1966 .”\nPub. L. 88–272, title II, §\u202f211(b) ,  Feb. 26, 1964 ,  78 Stat. 49 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1963 .”\nPub. L. 87–863, §\u202f1(c) ,  Oct. 23, 1962 ,  76 Stat. 1141 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1961 .”\nPub. L. 86–470, §\u202f3(b) ,  May 14, 1960 ,  74 Stat. 133 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1959 .”\nAmendment by  section 16 of Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, §\u202f17(c) ,  Sept. 2, 1958 ,  72 Stat. 1614 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1957 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 70 ;  Apr. 2, 1963 ,  Pub. L. 88–4, §\u202f1 ,  77 Stat. 4 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f212(a) ,  78 Stat. 49 ;  Dec. 10, 1971 ,  Pub. L. 92–178, title II, §\u202f210(a) ,  85 Stat. 518 ;  Mar. 29, 1975 ,  Pub. L. 94–12, title II, §\u202f206 ,  89 Stat. 32 , provided for allowance of deduction for household and dependent care services necessary for gainful employment; defined “qualifying individual”, “employment-related expenses”, “maintaining a household”; limitation on deductible amount; income limitation; and special rules and regulations applicable in the determination and allowance of deduction.\nRepeal applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 3 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 71 ;  Pub. L. 98–369, div. A, title IV, §\u202f422(b) ,  July 18, 1984 ,  98 Stat. 797 , related to a deduction for alimony or separate maintenance payments paid during an individual’s taxable year.\nRepeal applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 61 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'The term “tenant-stockholder” means a person who is a stockholder in a cooperative housing corporation, and whose stock is fully paid-up in an amount not less than an amount shown to the satisfaction of the Secretary as bearing a reasonable relationship to the portion of the value of the corporation’s equity in the houses or apartment building and the land on which situated which is attributable to the house or apartment which such person is entitled to occupy.\nExcept as provided in subparagraph (B), the term “tenant-stockholder’s proportionate share” means that proportion which the stock of the cooperative housing corporation owned by the tenant-stockholder is of the total outstanding stock of the corporation (including any stock held by the corporation).\nClause (i) shall apply with respect to any cooperative housing corporation only if such corporation elects its application. Such an election, once made, may be revoked only with the consent of the Secretary.\nFor purposes of this subsection, in determining whether a corporation is a cooperative housing corporation, stock owned and apartments leased by the United States or any of its possessions, a State or any political subdivision thereof, or any agency or instrumentality of the foregoing empowered to acquire shares in a cooperative housing corporation for the purpose of providing housing facilities, shall not be taken into account.\nFor purposes of paragraph (5), the term “original seller” means the person from whom the corporation has acquired the apartments or houses (or leaseholds therein).\nSo much of the stock of a tenant-stockholder in a cooperative housing corporation as is allocable, under regulations prescribed by the Secretary, to a proprietary lease or right of tenancy in property subject to the allowance for depreciation under section 167(a) shall, to the extent such proprietary lease or right of tenancy is used by such tenant-stockholder in a trade or business or for the production of income, be treated as property subject to the allowance for depreciation under section 167(a). The preceding sentence shall not be construed to limit or deny a deduction for depreciation under section 167(a) by a cooperative housing corporation with respect to property owned by such a corporation and leased to tenant-stockholders.\nThe amount of any deduction for depreciation allowable under section 167(a) to a tenant-stockholder with respect to any stock for any taxable year by reason of paragraph (1) shall not exceed the adjusted basis of such stock as of the close of the taxable year of the tenant-stockholder in which such deduction was incurred.\nThe amount of any deduction which is not allowed by reason of subparagraph (A) shall, subject to the provisions of subparagraph (A), be treated as a deduction allowable under section 167(a) in the succeeding taxable year.\nNo deduction shall be allowed to a stockholder in a cooperative housing corporation for any amount paid or accrued to such corporation during any taxable year (in excess of the stockholder’s proportionate share of the items described in subsections (a)(1) and (a)(2)) to the extent that, under regulations prescribed by the Secretary, such amount is properly allocable to amounts paid or incurred at any time by the corporation which are chargeable to the corporation’s capital account. The stockholder’s adjusted basis in the stock in the corporation shall be increased by the amount of such disallowance.\nExcept as provided in regulations no gain or loss shall be recognized on the distribution by a cooperative housing corporation of a dwelling unit to a stockholder in such corporation if such distribution is in exchange for the stockholder’s stock in such corporation and such dwelling unit is used as his principal residence (within the meaning of section 121).\n2007—Subsec. (b)(1)(D).  Pub. L. 110–142  amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “80 percent or more of the gross income of which for the taxable year in which the taxes and interest described in subsection (a) are paid or incurred is derived from tenant-stockholders.”\n1997—Subsec. (e).  Pub. L. 105–34  substituted “such dwelling unit is used as his principal residence (within the meaning of section 121)” for “such exchange qualifies for nonrecognition of gain under section 1034(f)”.\n1990—Subsec. (e).  Pub. L. 101–508  substituted “corporations” for “associations” in heading and “corporation” for “association” after “housing” in text.\n1988—Subsec. (e).  Pub. L. 100–647  added subsec. (e).\n1986—Subsec. (b)(2).  Pub. L. 99–514, §\u202f644(a)(1) , substituted “a person” and “such person” for “an individual” and “such individual”, respectively.\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f644(d) , added heading and amended text generally. Prior to amendment, text read as follows: “The term ‘tenant-stockholder’s proportionate share’ means that proportion which the stock of the cooperative housing corporation owned by the tenant-stockholder is of the total outstanding stock of the corporation (including any stock held by the corporation).”\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f644(a)(2) , substituted “Prior approval of occupancy” for “Stock acquired through foreclosure by lending institution” in heading and amended text generally. Prior to amendment, text read as follows: “If a bank or other lending institution acquires by foreclosure (or by instrument in lieu of foreclosure) the stock of a tenant-stockholder, and a lease or the right to occupy an apartment or house to which such stock is appurtenant, such bank or other lending institution shall be treated as a tenant-stockholder for a period not to exceed three years from the date of acquisition. The preceding sentence shall apply even though, by agreement with the cooperative housing corporation, the bank (or other lending institution) or its nominee may not occupy the house or apartment without the prior approval of such corporation.”\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f644(a)(2) , amended par. (6) generally, substituting provisions defining “original seller” for purposes of par. (5) for provisions relating to stock owned by person from whom corporation acquired its property, subpar. (A) thereof providing for general rule, subpar. (B) providing that stock acquisition must take place not later than 1 year after transfer of dwelling units, subpar. (C) providing that original seller must have right to occupy apartment or house, and subpar. (D) defining “original seller” for purposes of former par. (6).\nSubsec. (c).  Pub. L. 99–514, §\u202f644(b) , amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “So much of the stock of a tenant-stockholder in a cooperative housing corporation as is allocable, under regulations prescribed by the Secretary, to a proprietary lease or right of tenancy in property subject to the allowance for depreciation under section 167(a) shall, to the extent such proprietary lease or right of tenancy is used by such tenant-stockholder in a trade or business or for the production of income, be treated as property subject to the allowance for depreciation under section 167(a). The preceding sentence shall not be construed to limit or deny a deduction for depreciation under 167(a) by a cooperative housing corporation with respect to property owned by such a corporation and leased to tenant-stockholders.”\nSubsec. (d).  Pub. L. 99–514, §\u202f644(c) , added subsec. (d).\n1980—Subsec. (b)(6)(A).  Pub. L. 96–222, §\u202f105(a)(6)(A) , added subpar. (A). Former subpar. (A), which required the original seller who acquired stock of the corporation from the corporation by purchase or foreclosure to be treated as a tenant-stockholder for a period not to exceed 3 years from the date of acquisition, was struck out.\nSubsec. (b)(6)(B) to (D).  Pub. L. 96–222, §\u202f105(a)(6)(A) , (B), added subpar. (B), redesignated former subpars. (B) and (C) as (C) and (D), and, in subpar. (D) as so redesignated, inserted provisions requiring that the estate of the original seller succeed to, and take into account, the tax treatment of the original seller under this paragraph.\n1978—Subsec. (b)(6).  Pub. L. 95–600 , added par. (6).\n1976—Subsec. (b)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f2101(f) , added par. (5).\nSubsec. (c).  Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 2101(b), struck out “or his delegate” after “Secretary” and inserted at end “The preceding sentence shall not be construed to limit or deny a deduction for depreciation under 167(a) by a cooperative housing corporation with respect to property owned by such corporation and leased to tenant-stockholders.”\n1969—Subsec. (b)(4).  Pub. L. 91–172  added par. (4).\n1962— Pub. L. 87–834  substituted “Deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholders” for “Amounts representing taxes and interest paid to cooperative housing corporation” in section catchline, and added subsec. (c).\nPub. L. 110–142, §\u202f4(b) ,  Dec. 20, 2007 ,  121 Stat. 1804 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Dec. 20, 2007 ].”\nAmendment by  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see section 312(d)[(e)] of  Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nPub. L. 100–647, title VI, §\u202f6282(b) ,  Nov. 10, 1988 ,  102 Stat. 3755 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by section 631 of the Tax Reform Act of 1986 [ section 631 of Pub. L. 99–514 , see Tables for classification].”\nPub. L. 99–514, title VI, §\u202f644(f) ,  Oct. 22, 1986 ,  100 Stat. 2289 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Subsection  (e).— “(A)  Except as provided in subparagraph (B), subsection (e) [set out below] shall apply to taxable years beginning before  January 1, 1986 . \n \n “(B)  Subsection (e)(7) [set out below] shall apply to amounts paid or incurred, and property acquired, in taxable years beginning, after  December 31, 1985 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title V, §\u202f531(b) ,  Nov. 6, 1978 ,  92 Stat. 2887 , provided that:  “The amendment made by this section [amending this section] shall apply to stock acquired after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nPub. L. 94–455, title XXI, §\u202f2101(f)(2) ,  Oct. 4, 1976 ,  90 Stat. 1900 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to stock acquired by banks or other lending institutions after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 91–172, title IX, §\u202f913(b) ,  Dec. 30, 1969 ,  83 Stat. 723 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 87–834, §\u202f28(c) ,  Oct. 16, 1962 ,  76 Stat. 1068 , provided that:  “The amendments made by subsection (a) [amending this section] shall be effective with respect to taxable years beginning after  December 31, 1961 .”\nPub. L. 99–514, title VI, §\u202f644(e) ,  Oct. 22, 1986 ,  100 Stat. 2287 , provided that: \n “(1)   Payment of closing costs and creation of reserve excluded from gross income .— For purposes of the Internal Revenue Code of 1954 [now 1986], no amount shall be included in the gross income of a qualified cooperative housing corporation by reason of the payment or reimbursement by a city housing development agency or corporation of amounts for— “(A)  closing costs, or \n \n “(B)  the creation of reserves for the qualified cooperative housing corporation, \n \n\n in connection with a qualified refinancing. \n \n “(2)   Income from reserve fund treated as member income.— “(A)   In general .— Income from a qualified refinancing-related reserve shall be treated as derived from its members for purposes of— “(i)  section 216 of the Internal Revenue Code of 1954 [now 1986] (relating to deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholder), and \n \n “(ii)  section 277 of such Code (relating to deductions incurred by certain membership organizations in transactions with members). \n \n \n “(B)   No inference .— Nothing in the provisions of this paragraph shall be construed to infer that a change in law is intended with respect to the treatment of deductions under section 277 of the Internal Revenue Code of 1954 [now 1986] with respect to cooperative housing corporations, and any determination of such issue shall be made as if such provisions had not been enacted. \n \n \n “(3)   Treatment of certain interest claimed as deduction .— Any amount— “(A)  claimed (on a return of tax imposed by chapter 1 of the Internal Revenue Code of 1954 [now 1986]) as a deduction by a qualified cooperative housing corporation for interest for any taxable year beginning before  January 1, 1986 , on a second mortgage loan made by a city housing development agency or corporation in connection with a qualified refinancing, and \n \n “(B)  reported (before  April 16, 1986 ) by the qualified cooperative housing corporation to its tenant-stockholders as interest described in section 216(a)(2) of such Code, \n \n\n shall be treated for purposes of such Code as if such amount were paid by such qualified cooperative housing corporation during such taxable year. \n \n “(4)   Qualified cooperative housing corporation.— “(A)   In general .— For purposes of this subsection, the term ‘qualified cooperative housing corporation’ means any corporation if— “(i)  such corporation is, after the application of paragraphs (1) and (2), a cooperative housing corporation (as defined in section 216(b) of the Internal Revenue Code of 1954 [now 1986]), \n \n “(ii)  such corporation is subject to a qualified limited-profit housing companies law, and \n \n “(iii)  such corporation either— “(I)  filed for incorporation on  July 22, 1965 , or \n \n “(II)  filed for incorporation on  March 5, 1964 . \n \n \n \n “(B)   Qualified limited-profit housing companies law .— For purposes of subparagraph (A), the term ‘qualified limited-profit housing companies law’ means any limited-profit housing companies law which limits the resale price for a tenant-stockholder’s stock in a cooperative housing corporation to the sum of his basis for such stock plus his proportionate share of part or all of the amortization of any mortgage on the building owned by such corporation. \n \n \n “(5)   Qualified refinancing .— For purposes of this subsection, the term ‘qualified refinancing’ means any refinancing— “(A)  which occurred— “(i)  with respect to a qualified cooperative housing corporation described in paragraph (4)(A)(iii)(I) on  September 20, 1978 , or \n \n “(ii)  with respect to a qualified cooperative housing corporation described in paragraph (4)(A)(iii)(II) on  November 21, 1978 , and \n \n \n “(B)  in which a qualified cooperative housing corporation refinanced a first mortgage loan made to such corporation by a city housing development agency with a first mortgage loan made by a city housing development corporation and insured by an agency of the Federal Government and a second mortgage loan made by such city housing development agency, in the process of which a reserve was created (as required by such Federal agency) and closing costs were paid or reimbursed by such city housing development agency or corporation. \n \n \n “(6)   Qualified refinancing-related reserve .— For purposes of this subsection, the term ‘qualified refinancing-related reserve’ means any reserve of a qualified cooperative housing corporation with respect to the creation of which no amount was included in the gross income of such corporation by reason of paragraph (a). \n \n “(7)   Treatment of amounts paid from qualified refinancing-related reserve.— “(A)   In general .— With respect to any payment from a qualified refinancing-related reserve out of amounts excluded from gross income by reason of paragraph (1)— “(i)  no deduction shall be allowed under chapter 1 of such Code, and \n \n “(ii)  the basis of any property acquired with such payment (determined without regard to this subparagraph) shall be reduced by the amount of such payment. \n \n \n “(B)   Ordering rules .— For purposes of subparagraph (A), payments from a reserve shall be treated as being made— “(i)  first from amounts excluded from gross income by reason of paragraph (1) to the extent thereof, and \n \n “(ii)  then from other amounts in the reserve.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'There shall be allowed as a deduction moving expenses paid or incurred during the taxable year in connection with the commencement of work by the taxpayer as an employee or as a self-employed individual at a new principal place of work.\nIn the case of any individual other than the taxpayer, expenses referred to in paragraph (1) shall be taken into account only if such individual has both the former residence and the new residence as his principal place of abode and is a member of the taxpayer’s household.\nFor purposes of this subsection, the term “foreign move” means the commencement of work by the taxpayer at a new principal place of work located outside the United States.\nFor purposes of this subsection and subsection (i), the term “United States” includes the possessions of the United States.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.\nExcept in the case of an individual to whom subsection (g) applies, this section shall not apply to any taxable year beginning after  December 31, 2017 , and before  January 1, 2026 .\nA prior section 217 was renumbered  section 224 of this title .\nSubsec. (k).  Pub. L. 115–97  added subsec. (k).\n1993—Subsec. (b).  Pub. L. 103–66, §\u202f13213(a)(1) , amended subsec. (b) generally, restating former par. (1)(A) and (B) as par. (1) and former par. (3)(C) as par. (2) and striking out former par. (1)(C) to (E) which included certain traveling, meals, lodging, and residence sale, purchase, and lease expenses in the term “moving expenses”, par. (2) which defined “qualified residence sale, purchase, or lease expenses”, and par. (3)(A) and (B) which placed dollar limits on the amount allowed to be deducted as moving expenses.\nSubsec. (c)(1).  Pub. L. 103–66, §\u202f13213(b) , substituted “50 miles” for “35 miles” in subpars. (A) and (B).\nSubsec. (e).  Pub. L. 103–66, §\u202f13213(a)(2)(A) , struck out heading and text of subsec. (e). Text read as follows: “The amount realized on the sale of the residence described in subparagraph (A) of subsection (b)(2) shall not be decreased by the amount of any expenses described in such subparagraph which are allowed as a deduction under subsection (a), and the basis of a residence described in subparagraph (B) of subsection (b)(2) shall not be increased by the amount of any expenses described in such subparagraph which are allowed as a deduction under subsection (a). This subsection shall not apply to any expenses with respect to which an amount is included in gross income under subsection (d)(3).”\nSubsec. (f).  Pub. L. 103–66, §\u202f13213(a)(2)(B) , amended heading and text of subsec. (f) generally. Prior to amendment, text read as follows:\n“(1)  Definition .—For purposes of this section, the term ‘self-employed individual’ means an individual who performs personal services—\n“(A) as the owner of the entire interest in an unincorporated trade or business, or\n“(B) as a partner in a partnership carrying on a trade or business.\n“(2)  Rule for application of subsections  (b)(1) (c) and (d) .—For purposes of subparagraphs (C) and (D) of subsection (b)(1), an individual who commences work at a new principal place of work as a self-employed individual shall be treated as having obtained employment when he has made substantial arrangements to commence such work.”\nSubsec. (g)(3).  Pub. L. 103–66, §\u202f13213(a)(2)(C) , inserted “and” at end of subpar. (A), redesignated subpar. (C) as (B), and struck out former subpar. (B) which read as follows: “for purposes of subsection (b)(3), as if such place of work was within the same general location as the member’s new principal place of work, and”.\nSubsec. (h).  Pub. L. 103–66, §\u202f13213(a)(2)(D) , redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out heading and text of former par. (1). Text read as follows: “In the case of a foreign move—\n“(A) subsection (b)(1)(D) shall be applied by substituting ‘90 consecutive days’ for ‘30 consecutive days’,\n“(B) subsection (b)(3)(A) shall be applied by substituting ‘$4,500’ for ‘$1,500’ and by substituting ‘$6,000’ for ‘$3,000’, and\n“(C) subsection (b)(3)(B) shall be applied as if the last sentence of such subsection read as follows: ‘In the case of a husband and wife filing separate returns, subparagraph (A) shall be applied by substituting “$2,250” for “$4,500”, and by substituting “$3,000” for “$6,000”.’\u202f”\n1978—Subsecs. (h) to (j).  Pub. L. 95–615  added subsecs. (h) and (i) and redesignated former subsec. (h) as (j).\n1976—Subsec. (b)(3)(A).  Pub. L. 94–455, §\u202f506(b)(1) , (2), substituted “$1,500” for “$1,000” after “(1) shall not exceed” and “$3,000” for “$2,500” after “lease expenses shall not exceed”.\nSubsec. (b)(3)(B).  Pub. L. 94–455, §\u202f506(b)(3) , substituted “\u202f‘$750’ for ‘$1,500’\u202f” for “\u202f‘$500’ for ‘$1,000’\u202f” after “applied by substituting” and “\u202f‘$1,500’ for ‘$3,000’\u202f” for “\u202f‘$1,250’ for ‘$2,500’\u202f” after “and by substituting”.\nSubsec. (c)(1)(A), (B).  Pub. L. 94–455, §\u202f506(a) , substituted “35” for “50” after “at least”.\nSubsecs. (g), (h).  Pub. L. 94–455 , §§\u202f506(c), 1906(b)(13)(A), added subsec. (g), redesignated former subsec. (g) as (h) and struck out “or his delegate” after “Secretary”.\n1969— Pub. L. 91–172  substantially reenacted existing provisions and extended the coverage to self-employed persons working at the new location for 78 weeks, made it a requirement that the new principal place of work be located 50 miles from the former residence, and redefined the deduction to include costs of house-hunting trips, temporary living expenses prior to locating a new home, and expenses of selling an old home or buying a new one.\nPub. L. 115–97, title I, §\u202f11049(b) ,  Dec. 22, 2017 ,  131 Stat. 2089 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 103–66  applicable to expenses incurred after  Dec. 31, 1993 , see  section 13213(e) of Pub. L. 103–66  set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 95–615  applicable to taxable years beginning after  Dec. 31, 1977 , with provision for election of prior law, see  section 209 of Pub. L. 95–615 , set out as an Effective Date of 1978 Amendment note under  section 911 of this title .\nPub. L. 94–455, title V, §\u202f506(d) ,  Oct. 4, 1976 ,  90 Stat. 1569 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nPub. L. 91–172, title II, §\u202f231(d) ,  Dec. 30, 1969 ,  83 Stat. 580 , as amended by  Pub. L. 91–642, §\u202f2 ,  Dec. 31, 1970 ,  84 Stat. 1880 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by this section [enacting  section 82 of this title  and amending this section and sections 1001 and 1016 of this title] shall apply to taxable years beginning after  December 31, 1969 , except that— \n “(1)  section 217 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a)) shall not apply to any item to the extent that the taxpayer received or accrued reimbursement or other expense allowance for such item in a taxable year beginning on or before  December 31, 1969 , which was not included in his gross income; and \n \n “(2)  the amendments made by this section shall not apply (at the election of the taxpayer made at such time and manner as the Secretary of the Treasury or his delegate prescribes) with respect to moving expenses paid or incurred before  January 1, 1971 , in connection with the commencement of work by the taxpayer as an employee at a new principal place of work of which the taxpayer had been notified by his employer on or before  December 19, 1969 .”\nSection applicable to expenses incurred after  Dec. 31, 1963 , in taxable years ending after such date, see  section 213(d) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 62 of this title .\nPub. L. 93–490, §\u202f2 ,  Oct. 26, 1974 ,  88 Stat. 1466 , authorized the Secretary of the Treasury, applicable with respect to taxable years ending before  January 1, 1976 , to:\n(1) enter into an agreement with the Secretary concerned under which the Secretary concerned would not be required to withhold tax on, or to report, moving expense reimbursements made to members of the armed forces;\n(2) permit any taxpayer who was a member of the armed forces not to include in adjusted gross income the amount of any reimbursement in kind of moving expenses made by the Secretary concerned; and\n(3) permit any taxpayer who was a member of the armed forces to deduct any amount paid by him as moving expenses in connection with any move required by the Secretary concerned, in excess of any reimbursement received for such expenses, without regard to the provisions of subsec. (c) of this section, to the extent it was otherwise deductible under this section.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'Section, added  Pub. L. 92–178, title VII, §\u202f702(a) ,  Dec. 10, 1971 ,  85 Stat. 561 ; amended  Pub. L. 93–625 , §§\u202f11(d), 12(b),  Jan. 3, 1975 ,  88 Stat. 2120 ;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to contributions to candidates for public office.\nA prior section 218 was renumbered  section 224 of this title .\nRepeal effective with respect to contributions the payment of which is made after  Dec. 31, 1978 , in taxable years beginning after such date, see  section 113(d) of Pub. L. 95–600 , set out as an Effective Date of 1978 Amendment note under  section 24 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'In the case of an individual, there shall be allowed as a deduction an amount equal to the qualified retirement contributions of the individual for the taxable year.\nThis section shall not apply with respect to an employer contribution to a simplified employee pension.\nThis section shall not apply with respect to any amount contributed to a simple retirement account established under section 408(p).\nThe deductible amount is $5,000.\nIn the case of an individual who has attained the age of 50 before the close of the taxable year, the deductible amount for such taxable year shall be increased by the applicable amount.\nFor purposes of clause (i), the applicable amount is $1,000.\nIf any amount after adjustment under clause (i) is not a multiple of $500, such amount shall be rounded to the next lower multiple of $500.\nNo deduction shall be allowed under this section with respect to a rollover contribution described in section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16).\nIn the case of an endowment contract described in section 408(b), no deduction shall be allowed under this section for that portion of the amounts paid under the contract for the taxable year which is properly allocable, under regulations prescribed by the Secretary, to the cost of life insurance.\nNo deduction shall be allowed under this section with respect to any amount paid to an inherited individual retirement account or individual retirement annuity (within the meaning of section 408(d)(3)(C)(ii)).\nFor purposes of this section, the term “compensation” includes earned income (as defined in section 401(c)(2)). The term “compensation” does not include any amount received as a pension or annuity and does not include any amount received as deferred compensation. For purposes of this paragraph, section 401(c)(2) shall be applied as if the term trade or business for purposes of section 1402 included service described in subsection (c)(6). The term “compensation” includes any differential wage payment (as defined in section 3401(h)(2)). The term “compensation” shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.\nThe maximum deduction under subsection (b) shall be computed separately for each individual, and this section shall be applied without regard to any community property laws.\nFor purposes of this section, a taxpayer shall be deemed to have made a contribution to an individual retirement plan on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).\nFor purposes of this title, any amount paid by an employer to an individual retirement plan shall be treated as payment of compensation to the employee (other than a self-employed individual who is an employee within the meaning of section 401(c)(1)) includible in his gross income in the taxable year for which the amount was contributed, whether or not a deduction for such payment is allowable under this section to the employee.\nProper reduction shall be made in the amount allowable as a deduction by reason of this paragraph for any amount allowed as a deduction under this section for a prior taxable year for which the period for assessing deficiency has expired if the amount so allowed exceeds the amount which should have been allowed for such prior taxable year.\nFor purposes of subsections (b)(1)(B) and (c), the amount of compensation includible in an individual’s gross income shall be determined without regard to section 112.\nFor election not to deduct contributions to individual retirement plans, see section 408( o )(2)(B)(ii).\nIf (for any part of any plan year ending with or within a taxable year) an individual or the individual’s spouse is an active participant, each of the dollar limitations contained in subsections (b)(1)(A) and (c)(1)(A) for such taxable year shall be reduced (but not below zero) by the amount determined under paragraph (2).\nNo dollar limitation shall be reduced below $200 under paragraph (1) unless (without regard to this subparagraph) such limitation is reduced to zero.\nAny amount determined under this paragraph which is not a multiple of $10 shall be rounded to the next lowest $10.\nParticipation in a plan described in subparagraph (A)(iii) of paragraph (5) by reason of service as a member of a reserve component of the Armed Forces (as defined in  section 10101 of title 10 ), unless such individual has served in excess of 90 days on active duty (other than active duty for training) during the year.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title  and Internal Revenue Notices listed in a table under  section 401 of this title .\nA prior section 219 was renumbered  section 224 of this title .\n2022—Subsec. (b)(5)(C)(iii).  Pub. L. 117–328  added cl. (iii).\n2021—Subsec. (g)(3)(A)(ii).  Pub. L. 117–2  inserted “85(c),” before “135”.\n2020—Subsec. (g)(3)(A)(ii).  Pub. L. 116–260  struck out “222,” after “221,”.\n2019—Subsec. (d)(1).  Pub. L. 116–94, §\u202f107(a) , struck out par. (1). Text read as follows: “No deduction shall be allowed under this section with respect to any qualified retirement contribution for the benefit of an individual if such individual has attained age 70½ before the close of such individual’s taxable year for which the contribution was made.”\nSubsec. (f)(1).  Pub. L. 116–94, §\u202f106(a) , inserted at end: “The term ‘compensation’ shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.”\n2018—Subsec. (f)(1).  Pub. L. 115–141, §\u202f401(a)(55) , substituted “term ‘compensation’ includes” for “term compensation includes”.\nSubsec. (g)(8).  Pub. L. 115–141, §\u202f401(a)(56) , substituted “shall be” for “shall each be” in introductory provisions.\n2017—Subsec. (b)(5)(C)(i)(II).  Pub. L. 115–97, §\u202f11002(d)(1)(S) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (f)(1).  Pub. L. 115–97, §\u202f11051(b)(3)(C) , struck out “The term ‘compensation’ shall include any amount includible in the individual’s gross income under section 71 with respect to a divorce or separation instrument described in subparagraph (A) of section 71(b)(2).” after “deferred compensation.”\nSubsec. (g)(3)(A)(ii).  Pub. L. 115–97, §\u202f13305(b)(1) , struck out “199,” after “137,”.\nSubsec. (g)(8)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(S) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2014—Subsec. (b)(5)(A).  Pub. L. 113–295, §\u202f221(a)(38)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) listed deductible amounts for taxable years 2002 to 2008 and thereafter.\nSubsec. (b)(5)(B)(ii).  Pub. L. 113–295, §\u202f221(a)(38)(B) , amended cl. (ii) generally. Prior to amendment, cl. (ii) listed applicable amounts for taxable years 2002 to 2006 and thereafter.\nSubsec. (b)(5)(C), (D).  Pub. L. 113–295, §\u202f221(a)(38)(C) , redesignated subpar. (D) as (C) and struck out former subpar. (C) which related to catchup contributions for certain individuals for taxable years beginning before  Dec. 31, 2009 .\nSubsec. (f)(4).  Pub. L. 113–295, §\u202f221(a)(39)(A) , struck out par. (4). Text read as follows: “The Secretary shall prescribe regulations which prescribe the time and the manner in which reports to the Secretary and plan participants shall be made by the plan administrator of a qualified employer or government plan receiving qualified voluntary employee contributions.”\nSubsec. (g)(2)(A)(ii).  Pub. L. 113–295, §\u202f221(a)(38)(D) , struck out “for a taxable year beginning after  December 31, 2006 ” after “joint return”.\nSubsec. (g)(3)(B)(i), (ii).  Pub. L. 113–295, §\u202f221(a)(38)(E) , added cls. (i) and (ii) and struck out former cls. (i) and (ii) which related to applicable dollar amounts for a taxpayer filing a joint return for taxable years 1998 to 2007 and thereafter and for any other taxpayer (other than a married individual filing a separate return) for taxable years 1998 to 2005 and thereafter, respectively.\nSubsec. (g)(8).  Pub. L. 113–295, §\u202f221(a)(38)(F) , substituted “each of the dollar amounts in paragraphs (3)(B)(i), (3)(B)(ii), and (7)(A)” for “the dollar amount in the last row of the table contained in paragraph (3)(B)(i), the dollar amount in the last row of the table contained in paragraph (3)(B)(ii), and the dollar amount contained in paragraph (7)(A),” in introductory provisions.\nSubsec. (h).  Pub. L. 113–295, §\u202f221(a)(39)(A) , struck out subsec. (h) which read as follows: “For failure to provide required reports, see section 6652(g).”\n2013—Subsec. (c).  Pub. L. 113–22  substituted “Kay Bailey Hutchison Spousal IRA” for “Special rules for certain married individuals” in heading.\n2008—Subsec. (f)(1).  Pub. L. 110–245  inserted at end “The term compensation includes any differential wage payment (as defined in section 3401(h)(2)).”\n2006—Subsec. (b)(5)(C), (D).  Pub. L. 109–280, §\u202f831(a) , added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (f)(7), (8).  Pub. L. 109–227  added par. (7) and redesignated former par. (7) as (8).\nSubsec. (g)(8).  Pub. L. 109–280, §\u202f833(b) , added par. (8).\n2004—Subsec. (g)(3)(A)(ii).  Pub. L. 108–357  inserted “199,” before “221”.\n2001—Subsec. (b)(1)(A).  Pub. L. 107–16, §\u202f601(a)(1) , substituted “the deductible amount” for “$2,000”.\nSubsec. (b)(5).  Pub. L. 107–16, §\u202f601(a)(2) , added par. (5).\nSubsec. (d)(2).  Pub. L. 107–16, §\u202f641(e)(2) , substituted “408(d)(3), or 457(e)(16)” for “or 408(d)(3)”.\nSubsec. (g)(3)(A)(ii).  Pub. L. 107–16, §\u202f431(c)(1) , inserted “222,” after “221,”.\n2000—Subsec. (c)(1)(B)(ii)(II), (III).  Pub. L. 106–554  added subcl. (II) and redesignated former subcl. (II) as (III).\n1998—Subsec. (g)(1).  Pub. L. 105–206, §\u202f6005(a)(1)(A) , inserted “or the individual’s spouse” after “individual”.\nSubsec. (g)(2)(A)(ii).  Pub. L. 105–206, §\u202f6005(a)(2) , made technical amendment to directory language of  Pub. L. 105–34, §\u202f301(a)(2) . See 1997 Amendment note below.\nSubsec. (g)(3)(A)(ii).  Pub. L. 105–277  inserted “221,” after “137,”.\nPub. L. 105–206, §\u202f6018(f)(2) , made technical amendment to directory language of  Pub. L. 104–188, §\u202f1807(c)(3) . See 1996 Amendment note below.\nSubsec. (g)(7).  Pub. L. 105–206, §\u202f6005(a)(1)(B) , added par. (7) and struck out heading and text of former par. (7). Text read as follows: “In the case of an individual who is an active participant at no time during any plan year ending with or within the taxable year but whose spouse is an active participant for any part of any such plan year—\n“(A) the applicable dollar amount under paragraph (3)(B)(i) with respect to the taxpayer shall be $150,000, and\n“(B) the amount applicable under paragraph (2)(A)(ii) shall be $10,000.”\n1997—Subsec. (c)(1)(B)(ii).  Pub. L. 105–34, §\u202f302(c) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the compensation includible in the gross income of such individual’s spouse for the taxable year reduced by the amount allowed as a deduction under subsection (a) to such spouse for such taxable year.”\nSubsec. (g)(1).  Pub. L. 105–34, §\u202f301(b)(1) , struck out “or the individual’s spouse” after “an individual”.\nSubsec. (g)(2)(A)(ii).  Pub. L. 105–34, §\u202f301(a)(2) , as amended by  Pub. L. 105–206, §\u202f6005(a)(2) , inserted “($20,000 in the case of a joint return for a taxable year beginning after  December 31, 2006 )” after “$10,000”.\nSubsec. (g)(3)(B).  Pub. L. 105–34, §\u202f301(a)(1) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘applicable dollar amount’ means—\n“(i) in the case of a taxpayer filing a joint return, $40,000,\n“(ii) in the case of any other taxpayer (other than a married individual filing a separate return), $25,000, and\n“(iii) in the case of a married individual filing a separate return, zero.”\nSubsec. (g)(7).  Pub. L. 105–34, §\u202f301(b)(2) , added par. (7).\n1996—Subsec. (b)(4).  Pub. L. 104–188, §\u202f1421(b)(1)(A) , added par. (4).\nSubsec. (c).  Pub. L. 104–188, §\u202f1427(a) , amended subsec. (c) generally, substituting present provisions for former provisions relating to special rules for certain married individuals which set out general provisions in par. (1) and a limitation in par. (2).\nSubsec. (f)(2).  Pub. L. 104–188, §\u202f1427(b)(1) , substituted “subsection (b)” for “subsections (b) and (c)”.\nSubsec. (g)(1).  Pub. L. 104–188, §\u202f1427(b)(2) , substituted “(c)(1)(A)” for “(c)(2)”.\nSubsec. (g)(3)(A)(ii).  Pub. L. 104–188, §\u202f1807(c)(3) , as amended by  Pub. L. 105–206, §\u202f6018(f)(2) , inserted “,\u2000137,” before “and 911”.\nSubsec. (g)(5)(A)(vi).  Pub. L. 104–188, §\u202f1421(b)(1)(B) , added cl. (vi).\n1994—Subsec. (g)(6)(A).  Pub. L. 103–337  substituted “ section 10101 of title 10 ” for “ section 261(a) of title 10 ”.\n1992—Subsec. (d)(2).  Pub. L. 102–318  substituted “402(c)” for “402(a)(5), 402(a)(7)”.\n1989—Subsec. (f)(1).  Pub. L. 101–239, §\u202f7841(c)(1) , inserted at end “For purposes of this paragraph, section 401(c)(2) shall be applied as if the term trade or business for purposes of section 1402 included service described in subsection (c)(6).”\nSubsec. (g)(3)(A)(ii).  Pub. L. 101–239, §\u202f7816(c)(1) , made technical correction to directory language of  Pub. L. 100–647, §\u202f6009(c)(2) , see 1988 Amendment note below.\n1988—Subsec. (g)(3)(A)(ii).  Pub. L. 100–647, §\u202f6009(c)(2) , as amended by  Pub. L. 101–239, §\u202f7816(c)(1) , substituted “sections 135 and 911” for “section 911”.\nSubsec. (g)(4).  Pub. L. 100–647, §\u202f1011(a)(1) , inserted “and living apart” after “filing separately” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a married individual filing a separate return for any taxable year, paragraph (1) shall be applied without regard to whether such individual’s spouse is an active participant for any plan year ending with or within such taxable year.”\n1986—Subsec. (b)(2).  Pub. L. 99–514, §\u202f1108(g)(2) , amended par. (2) generally, substituting provision that this section shall not apply with respect to an employer contribution to a simplified employee pension for former provisions consisting of subpars. (A), (B), and (C) which set out detailed limits on deductibility of employer contributions.\nSubsec. (b)(2)(C).  Pub. L. 99–514, §\u202f1875(c)(6)(B) , substituted “the dollar limitation in effect under section 415(c)(1)(A)” for “the $15,000 amount specified in subparagraph (A)(ii)”.\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f1109(b) , added par. (3).\nPub. L. 99–514, §\u202f1101(b)(2)(A) , struck out par. (3), special rule for individual retirement plans, which read as follows: “If the individual has paid any qualified voluntary employee contributions for the taxable year, the amount of the qualified retirement contributions (other than employer contributions to a simplified employee pension) which are paid for the taxable year to an individual retirement plan and which are allowable as a deduction under subsection (a) for such taxable year shall not exceed—\n“(A) the amount determined under paragraph (1) for such taxable year, reduced by\n“(B) the amount of the qualified voluntary employee contributions for the taxable year.”\nSubsec. (c)(1)(B).  Pub. L. 99–514, §\u202f1103(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “whose spouse has no compensation (determined without regard to section 911) for such taxable year,”.\nSubsec. (c)(2)(B).  Pub. L. 99–514, §\u202f1108(g)(3) , struck out “(determined without regard to so much of the employer contributions to a simplified employee pension as is allowable by reason of paragraph (2) of subsection (b))” after “for the taxable year”.\nSubsec. (e).  Pub. L. 99–514, §\u202f1101(b)(1) , amended subsec. (e) generally, revising the definition of “qualified retirement contribution”.\nSubsec. (f)(1).  Pub. L. 99–514, §\u202f301(b)(4) , which directed that par. (1) be amended by substituting “paragraph (6)” for “paragraph (7)”, could not be executed because prior amendment by  Pub. L. 99–514, §\u202f1875(c)(4) , see below, struck out language which included phrase “paragraph (7)”.\nPub. L. 99–514, §\u202f1875(c)(4) , struck out “reduced by any amount allowable as a deduction to the individual in computing adjusted gross income under paragraph (7) of section 62” after “(as defined in section 401(c)(2))”.\nSubsec. (f)(3).  Pub. L. 99–514, §\u202f1101(a)(2) , in amending par. (3) generally, reenacted existing provision without its subpar. “(A) Individual retirement plans” designation, and struck out subpar. (B) relating to time when contributions deemed made with respect to qualified employer or government plans.\nSubsec. (f)(7).  Pub. L. 99–514, §\u202f1102(f) , added par. (7).\nSubsec. (g).  Pub. L. 99–514, §\u202f1101(a)(1) , added subsec. (g). Former subsec. (g) redesignated (h).\nSubsec. (h).  Pub. L. 99–514, §\u202f1501(d)(1)(B) , which directed that subsec. (g) be amended by substituting “6652(g)” for “6652(h)”, was executed by making the substitution in subsec. (h) to reflect the probable intent of Congress and the prior redesignation of former subsec. (g) as (h) by  Pub. L. 99–514, §\u202f1101(a)(1) .\nPub. L. 99–514, §\u202f1101(a)(1) , redesignated former subsec. (g) as (h).\n1984—Subsec. (b)(2)(A)(ii).  Pub. L. 98–369, §\u202f713(d)(2) , substituted “not in excess of the limitation in effect under section 415(c)(1)(A)” for “not in excess of $15,000”.\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f529(b) , struck out par. (4) which related to a deduction for qualified retirement savings of certain divorced individuals.\nSubsec. (b)(4)(B).  Pub. L. 98–369, §\u202f422(d)(1) , substituted “gross income under section 71 (relating to alimony and separate maintenance payments) by reason of a payment under a decree of divorce or separate maintenance or a written agreement incident to such a decree” for “gross income under paragraph (1) of section 71(a) (relating to decree of divorce or separate maintenance)”.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f491(d)(6) , substituted “or 408(d)(3)” for “405(d)(3), 408(d)(3), or 409(b)(3)(C)”.\nSubsec. (e)(1).  Pub. L. 98–369, §\u202f491(d)(7) , struck out concluding provision that for the purposes of the preceding sentence, the term “individual retirement plan” includes retirement bonds described in section 409 only if the bond was not redeemed within 12 months of its issuance.\nSubsec. (e)(3).  Pub. L. 98–369, §\u202f491(d)(8) , struck out subpar. (C) which included a qualified bond purchase plan described in section 405(a) within term “qualified employer plan”, and redesignated subpar. (D) as (C).\nSubsec. (f)(1).  Pub. L. 98–369, §\u202f529(a) , inserted provision that “compensation” shall include any amount includible in the individual’s gross income under section 71 with respect to a divorce or separation instrument described in subparagraph (A) of section 71(b)(2).\nSubsec. (f)(3)(A).  Pub. L. 98–369, §\u202f147(c) , substituted “not including” for “including”.\n1983—Subsec. (b)(2)(A).  Pub. L. 97–448, §\u202f103(c)(12)(A) , inserted a close parenthesis after “allowable under paragraph (1)” in introductory provisions.\nSubsec. (c)(2)(B).  Pub. L. 97–448, §\u202f103(c)(1) , substituted “the amount allowable as a deduction under subsection (a) for the taxable year (determined without regard to so much of the employer contributions to a simplified employee pension as is allowable by reason of paragraph (2) of subsection (b))” for “the amount allowed as a deduction under subsection (a) for the taxable year”.\nSubsec. (d)(1).  Pub. L. 97–448, §\u202f103(c)(2) , substituted “Beneficiary must be under age 70½” for “Individuals who have attained age 70½” as par. (1) heading and, in text, substituted “qualified retirement contribution for the benefit of an individual if such individual has attained age 70½ before the close of such individual’s taxable year for which the contribution was made” for “qualified retirement contribution which is made for a taxable year of an individual if such individual has attained age 70½ before the close of such taxable year”.\nSubsec. (e)(3)(D), (E).  Pub. L. 97–448, §\u202f103(c)(3)(A) , redesignated subpar. (E) as (D). Former subpar. (D), which related to simplified employee pension (within the meaning of section 408(k)), was struck out.\nSubsec. (f)(1).  Pub. L. 97–448, §\u202f103(c)(4) , substituted “earned income (as defined in section 401(c)(2)) reduced by any amount allowable as a deduction to the individual in computing adjusted gross income under paragraph (7) of section 62” for “earned income as defined in section 401(c)(2)” and inserted provision that “compensation” does not include any amount received as a pension or annuity and does not include any amount received as deferred compensation.\nSubsec. (f)(3)(B).  Pub. L. 97–448, §\u202f103(c)(5) , substituted “if the contribution is made on account of the taxable year which includes such last day and by April 15 of the calendar year” for “if the contribution is made by April 15 of the calendar year”.\n1982—Subsec. (d)(4).  Pub. L. 97–248  added par. (4).\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f311(a) , amended subsec. (a) generally, substituting in heading “Allowance of deduction” for “Deduction allowed” and in text “shall be allowed” for “is allowed”, allowed as a deduction an amount equal to the qualified retirement contributions of the individual for the taxable year, eliminated part of first sentence for allowance as a deduction amounts paid in cash for the taxable year by or on behalf of the individual for his benefit—(1) to an individual retirement annuity described in section 408(a), (2) for an individual retirement annuity described in section 408(b), or (3) for a retirement bond described in section 409 (but only if the bond is not redeemed within 12 months of the date of its issuance), covered in subsec. (e)(1) and (5) of this section, and eliminated second sentence respecting employer payments, covered in subsec. (f)(5) of this section.\nSubsec. (b).  Pub. L. 97–34, §\u202f311(a) , in heading substituted “Maximum amount of deduction” for “Limitations and restrictions”.\nSubsec. (b)(1).  Pub. L. 97–34, §\u202f311(a) , amended par. (1) generally, substituting “In general” for “Maximum deduction” in heading and in text provision for allowance of a deduction not to exceed the lesser of (A) $2,000, or (B) an amount equal to the compensation includible in the individual’s gross income for such taxable year, for provision for an amount not to exceed amount equal to 15 percent of the compensation includible in gross income for the taxable year, or $1,500, whichever is less.\nSubsec. (b)(2)(A)(ii), (C).  Pub. L. 97–34, §\u202f312(c)(1) , substituted “$15,000” for “$7,500”.\nPub. L. 97–34, §\u202f311(a) , redesignated par. (7) as (2), substituted in heading “rules for employer contributions under” for “rules in case of”, substituted in subpar. (A) introductory text “an employee shall be allowed as a deduction under subsection (a) (in addition to the amount allowable under paragraph (1) an amount equal to the lesser of” for “the limitation under paragraph (1) shall be the lesser of”, inserted in subpar. (A)(i) “from such employer” before “includible” and substituted therein “without regard” for “with regard”, substituted in subpar. (A)(ii) “the amount contributed by such employer to the simplified employee pension and included in gross income (but not in excess of $7,500” for “the sum of—(I) the amount contributed by the employer to the simplified employee pension and included in gross income (but not in excess of $7,500), and (II) $1,500, reduced (but not below zero) by the amount described in subclause (I)”, and substituted in subpar. (B) “Paragraph (1) of this subsection and paragraph (1) of subsection (d)” for “Paragraphs (2) and (3)”. Former subsec. (b)(2) provisions which disallowed any deduction under subsec. (a) for an individual for the taxable year if for any part of such year (A) he was an active participant in (i) a plan described in section 401(a), (ii) an annuity plan described in section 403(a), (iii) a qualified bond purchase plan described in section 405(a), or (iv) a plan established for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing, or (B) amounts were contributed by his employer for an annuity contract described in section 403(b), are now covered by subsec. (e)(3) and (4) of this section.\nSubsec. (b)(3) to (5).  Pub. L. 97–34, §\u202f311(a) , added pars. (3) and (4). Former pars. (3) to (5) redesignated subsec. (d)(1) to (3).\nSubsec. (b)(6).  Pub. L. 97–34, §\u202f311(a) , struck out par. (6) which set forth alternative deduction provisions which disallowed a deduction for the taxable year if the individual claimed the deduction allowed by section 220 for the taxable year.\nSubsec. (b)(7).  Pub. L. 97–34, §\u202f311(a) , redesignated par. (7) as (2).\nSubsec. (c).  Pub. L. 97–34, §\u202f311(a) , added subsec. (c). Former subsec. (c)(1) to (3) and (5) redesignated subsec. (f)(1), (2), (3)(A), and (6). Former subsec. (c)(4), which provided for participation in governmental plans by certain individuals, with subpars. (A) and (B) covering members of reserve components and volunteer firefighters, was struck out.\nSubsec. (d).  Pub. L. 97–34, §\u202f311(a) , in heading redesignated former subsec. (b) heading as subsec. (d) heading and inserted “Other” before “limitations”.\nSubsec. (d)(1).  Pub. L. 97–34, §\u202f311(a) , redesignated former subsec. (b)(3) as par. (1), substituted as heading “Individuals who have attained age 70½” for “Contributions after age 70½” and in text “shall be allowed under this section” for “is allowed under subsection (a)”, “qualified retirement contribution” for “payment described in subsection (a)”, and “made for a taxable year of an individual if such individual has attained” for “made during the taxable year of an individual who has attained”.\nSubsec. (d)(2).  Pub. L. 97–34, §\u202f313(b)(2) , inserted reference to section 405(d)(3).\nPub. L. 97–34, §\u202f311(a) , redesignated former subsec. (b)(4) as par. (2) and substituted “shall be allowed” for “is allowed”.\nSubsec. (d)(3).  Pub. L. 97–34, §\u202f311(a) , redesignated former subsec. (b)(5) as par. (3) and, as so redesignated, substituted “shall be allowed under this section” for “is allowed under subsection (a)” and “year which is properly allocable” for “year properly allocable”.\nSubsec. (e).  Pub. L. 97–34, §\u202f311(a) , added subsec. (e) incorporating former provisions of subsecs. (a) and (b)(2) as pars. (1), and (3) and (4) and, among other changes, inserted provisions relating to a qualified employee pension.\nSubsec. (f)(1).  Pub. L. 97–34, §\u202f311(a) , redesignated former subsec. (c)(1) as par. (1).\nSubsec. (f)(2).  Pub. L. 97–34, §\u202f311(a) , redesignated former subsec. (c)(2) as par. (2) and, as so redesignated, substituted “deduction under subsections (b) and (c)” for “deduction under subsection (b)(1)”, and struck out provision that for purposes of this section, the determination of whether an individual is married shall be made in accordance with the provisions of section 143(a).\nSubsec. (f)(3).  Pub. L. 97–34, §\u202f311(a) , redesignated former subsec. (c)(3) as subpar. (A) and, as so redesignated, added subpar. (A) heading “Individual retirement plans”, and “to an individual retirement plan” before “on the last day” in text, and added subpar. (B).\nSubsec. (f)(4).  Pub. L. 97–34, §\u202f311(a) , added par. (4).\nSubsec. (f)(5).  Pub. L. 97–34, §\u202f311(a) , redesignated former provisions of subsec. (a) as par. (5), added par. (5) heading “Employer payments”, substituted “to an individual retirement plan shall be treated as payment of compensation to the employee” for “to such a retirement account, or for such a retirement annuity or retirement bond constitutes payment of compensation to the employee”, and “in the taxable year for which the amount was contributed” after “gross income”, and struck out “after the application of subsection (b)” after “under this section to the employee”.\nSubsec. (f)(6).  Pub. L. 97–34, §\u202f311(a) , redesignated former subsec. (c)(5) as par. (6), inserted “for contributions to an individual retirement plan” after “under this section” in subpar. (A), and struck out in subpar. (C) “or section 220” after “under this section”.\nSubsec. (g).  Pub. L. 97–34, §\u202f311(a) , added subsec. (g).\n1980—Subsec. (b)(4).  Pub. L. 96–222, §\u202f101(a)(14)(B) , inserted “402(a)(7),” after “section 402(a)(5)”.\nSubsec. (b)(7).  Pub. L. 96–222, §\u202f101(a)(10)(D) , amended par. (7) generally, including provision requiring that paragraph (3) not apply with respect to employer contribution to a simplified employee pension.\n1978—Subsec. (b)(4).  Pub. L. 95–600, §\u202f156(c)(3) , inserted “403(b)(8)” after “403(a)(4)”.\nSubsec. (b)(7).  Pub. L. 95–600, §\u202f152(c) , added par. (7).\nSubsec. (c)(3).  Pub. L. 95–600, §\u202f157(a)(1) , substituted “not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof)” for “not later than 45 days after the end of such taxable year”.\nSubsec. (c)(4).  Pub. L. 95–600, §\u202f703(c)(1) , substituted “subsection (b)(2)(A)(iv)” for “subsection (b)(3)(A)(iv)” wherever appearing.\nSubsec. (c)(5).  Pub. L. 95–600, §\u202f157(b)(1) , added par. (5).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1501(b)(4)(B) , substituted “for” for “during” after “paid in cash”.\nSubsec. (b)(2)(A)(iv).  Pub. L. 94–455, §\u202f1901(a)(32) , substituted “subdivision” for “division” after “State or political”.\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(6).  Pub. L. 94–455, §\u202f1501(b)(4)(B) , added par. (6).\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1501(b)(4)(C) , inserted “For purposes of this section, the determination of whether an individual is married shall be made in accordance with the provisions of section 143(a)” after “community property laws”.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f1501(b)(4)(D) , added par. (3).\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1503(a) , added par. (4).\nPub. L. 117–328, div. T, title I, §\u202f108(b) ,  Dec. 29, 2022 ,  136 Stat. 5289 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2023 .”\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nPub. L. 116–94, div. O, title I, §\u202f106(b) ,  Dec. 20, 2019 ,  133 Stat. 3148 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2019 .”\nPub. L. 116–94, div. O, title I, §\u202f107(d) ,  Dec. 20, 2019 ,  133 Stat. 3149 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 408 and 408A of this title] shall apply to contributions made for taxable years beginning after  December 31, 2019 . \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending  section 408 of this title ] shall apply to distributions made for taxable years beginning after  December 31, 2019 .”\nAmendment by  section 11002(d)(1)(S) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 11051(b)(3)(C) of Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nAmendment by  section 13305(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 110–245, title I, §\u202f105(b)(3) ,  June 17, 2008 ,  122 Stat. 1629 , provided that:  “The amendments made by this subsection [amending this section and  section 414 of this title ] shall apply to years beginning after  December 31, 2008 .”\nPub. L. 109–280, title VIII, §\u202f831(b) ,  Aug. 17, 2006 ,  120 Stat. 1003 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nAmendment by  section 833(b) of Pub. L. 109–280  applicable to taxable years beginning after 2006, see  section 833(d) of Pub. L. 109–280 , set out as a note under  section 25B of this title .\nPub. L. 109–227, §\u202f2(b) ,  May 29, 2006 ,  120 Stat. 385 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  section 431(c)(1) of Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nPub. L. 107–16, title VI, §\u202f601(c) ,  June 7, 2001 ,  115 Stat. 95 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to taxable years beginning after  December 31, 2001 .”\nAmendment by  section 641(e)(2) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see section §\u202f1(a)(7) [title III, §\u202f316(e)] of  Pub. L. 106–554 , set out as a note under  section 51 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  section 6018(f)(2) of Pub. L. 105–206  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see  section 6018(h) of Pub. L. 105–206 , set out as a note under  section 23 of this title .\nAmendment by  section 6005(a) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title III, §\u202f301(c) ,  Aug. 5, 1997 ,  111 Stat. 825 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title III, §\u202f302(f) ,  Aug. 5, 1997 ,  111 Stat. 829 , provided that:  “The amendments made by this section [enacting  section 408A of this title  and amending this section and sections 408 and 4973 of this title] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by  section 1421(b)(1) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nPub. L. 104–188, title I, §\u202f1427(c) ,  Aug. 20, 1996 ,  110 Stat. 1802 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to taxable years beginning after  December 31, 1996 .”\nAmendment by  section 1807(c)(3) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as an Effective Date note under  section 23 of this title .\nAmendment by  Pub. L. 103–337  effective  Dec. 1, 1994 , except as otherwise provided, see  section 1691 of Pub. L. 103–337 , set out as an Effective Date note under  section 10001 of Title 10 , Armed Forces.\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 7816(c)(1) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 101–239, title VII, §\u202f7841(c)(2) ,  Dec. 19, 1989 ,  103 Stat. 2428 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to contributions after the date of the enactment of this Act [ Dec. 19, 1989 ] in taxable years ending after such date.”\nPub. L. 100–647, title I, §\u202f1011(a)(2) ,  Nov. 10, 1988 ,  102 Stat. 3456 , provided that: \n “(A)  Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1987 . \n \n “(B)  A taxpayer may elect to have the amendment made by paragraph (1) apply to any taxable year beginning in 1987.”\nAmendment by  section 6009(c)(2) of Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 6009(d) of Pub. L. 100–647 , set out as a note under  section 86 of this title .\nAmendment by  section 301(b)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by section 1101(a), (b)(1), (2)(A) of  Pub. L. 99–514  applicable to contributions for taxable years beginning after  Dec. 31, 1986 , see  section 1101(c) of Pub. L. 99–514 , set out as a note under  section 72 of this title .\nPub. L. 99–514, title XI, §\u202f1102(g) ,  Oct. 22, 1986 ,  100 Stat. 2417 , provided that:  “The amendments made by this section [amending this section and sections 408, 3405, 4973, and 6693 of this title] shall apply to contributions and distributions for taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title XI, §\u202f1103(b) ,  Oct. 22, 1986 ,  100 Stat. 2417 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning before, on, or after  December 31, 1985 .”\nPub. L. 99–514, title XI, §\u202f1108(h) ,  Oct. 22, 1986 ,  100 Stat. 2435 , as amended by  Pub. L. 100–647, title I, §\u202f1011(f)(7) ,  Nov. 10, 1988 ,  102 Stat. 3463 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 402, 404, 408, 415, 3121, and 3306 of this title] shall apply to years beginning after  December 31, 1986 . \n \n “(2)   Integration rules .— Subparagraphs (D) and (E) of section 408(k)(3) of the Internal Revenue Code of 1954 (as in effect before the amendments made by this section) shall continue to apply for years beginning after  December 31, 1986 , and before  January 1, 1989 , except that employer contributions under an arrangement under section 408(k)(6) of the Internal Revenue Code of 1986 (as added by this section) may not be integrated under such subparagraphs.”\nPub. L. 99–514, title XI, §\u202f1109(c) ,  Oct. 22, 1986 ,  100 Stat. 2435 , provided that:  “The amendments made by this section [amending this section and  section 501 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1501(d)(1)(B) of Pub. L. 99–514 , applicable to returns the due date for which (determined without regard to extensions) is after  Dec. 31, 1986 , see  section 1501(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 6721 of this title .\nAmendment by section 1875(c)(4), (6)(B) of  Pub. L. 99–514  effective as if included in the amendments made by  section 238 of Pub. L. 97–248 , which amended sections 401, 404, 408, 415, and 1379 of this title, see  section 1875(c)(12) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nPub. L. 98–369, div. A, title I, §\u202f147(d) ,  July 18, 1984 ,  98 Stat. 687 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 408 of this title ] shall apply to contributions made after  December 31, 1984 . \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending  section 6693 of this title ] shall apply to failures occurring after the date of the enactment of this Act [ July 18, 1984 ].”\nPub. L. 98–369, div. A, title IV, §\u202f422(e) ,  July 18, 1984 ,  98 Stat. 798 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 71, 215, 682, 6676, and 7701 of this title] shall apply with respect to divorce or separation instruments (as defined in section 71(b)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this section) executed after  December 31, 1984 . \n \n “(2)   Modifications of instruments executed before  january 1, 1985 .— The amendments made by this section shall also apply to any divorce or separation instrument (as so defined) executed before  January 1, 1985 , but modified on or after such date if the modification expressly provides that the amendments made by this section shall apply to such modification. \n \n “(3)   Requirement of identification number .— [Former] Section 215(c) of the Internal Revenue Code of 1986 (as amended by subsection (b)) and the amendments made by subsection (c) [amending  section 6676 of this title ] shall apply to payments made after  December 31, 1984 .”\nAmendment by section 491(d)(6)–(8) of  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nPub. L. 98–369, div. A, title V, §\u202f529(c) ,  July 18, 1984 ,  98 Stat. 877 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nAmendment by  section 713(d)(2) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–248  applicable to with respect to individuals dying after  Dec. 31, 1983 , see  section 243(c) of Pub. L. 97–248 , as amended, set out as a note under  section 408 of this title .\nPub. L. 97–34, title III, §\u202f311(i) ,  Aug. 13, 1981 ,  95 Stat. 282 , as amended by  Pub. L. 97–448, title I, §\u202f103(c)(11) ,  Jan. 12, 1983 ,  96 Stat. 2377 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as provided in this subsection, the amendments made by this section [amending this section and sections 62, 72, 402, 403, 408, 409, 415, 2039, 2503, 2517, 3401, 4973, 6047, and 6652 of this title and repealing  section 220 of this title ] shall apply to taxable years beginning after  December 31, 1981 . \n \n “(2)   Transitional rule.— For purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], any amount allowed as a deduction under section 220 of such Code (as in effect before its repeal by this Act) shall be treated as if it were allowed by section 219 of such Code. \n \n “(3)   Certain bond rollover provisions.— The amendment made by subsection (g)(3) [amending  section 409 of this title ] shall apply to taxable years beginning after  December 31, 1974 . \n \n “(4)   Section 415 amendments.— The amendments made by subsections (g)(4) and (h)(3) [amending  section 415 of this title ] shall apply to years after  December 31, 1981 . \n \n “(5)   Estate and gift tax provisions.— “(A)   Estate tax .— The amendments made by subsections (d)(1) and (h)(4) [amending  section 2039 of this title ] shall apply to the estates of decedents dying after  December 31, 1981 . \n \n “(B)   Gift tax .— The amendments made by subsections (d)(2) and (h)(5) [amending sections 2503 and 2517 of this title] shall apply to transfers after  December 31, 1981 .”\nAmendment by  section 312(c)(1) of Pub. L. 97–34  applicable to plans which include employees within the meaning of  section 401(c)(1) of this title  with respect to taxable years beginning after  Dec. 31, 1981 , see  section 312(f)(1) of Pub. L. 97–34 , set out as a note under  section 72 of this title .\nPub. L. 97–34, title III, §\u202f313(c) ,  Aug. 13, 1981 ,  95 Stat. 286 , provided that:  “The amendments made by this section [amending this section and sections 405, 408, 2039, and 4973 of this title] shall apply to redemptions after the date of the enactment of this Act [ Aug. 13, 1981 ] in taxable years ending after such date.”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600  to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 152(c) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 152(h) of Pub. L. 95–600 , set out as a note under  section 408 of this title .\nAmendment by  section 156(c)(3) of Pub. L. 95–600  applicable to distributions or transfers made after  Dec. 31, 1977 , in taxable years beginning after such date, see  section 156(d) of Pub. L. 95–600  set out as a note under  section 403 of this title .\nPub. L. 95–600, title I, §\u202f157(a)(3) ,  Nov. 6, 1978 ,  92 Stat. 2803 , provided that:  “The amendments made by this subsection [amending this section and  section 220 of this title ] shall apply to taxable years beginning after  December 31, 1977 .”\nPub. L. 95–600, title I, §\u202f157(b)(4)(A) ,  Nov. 6, 1978 ,  92 Stat. 2805 , provided that:  “The amendments made by this subsection [amending this section and sections 220 and 4973 of this title] shall apply to the determination of deductions for taxable years beginning after  December 31, 1975 .”\nPub. L. 95–600, title VII, §\u202f703(c)(5) ,  Nov. 6, 1978 ,  92 Stat. 2939 , provided that:  “The amendments made by this subsection [amending this section and sections 220 and 408 of this title] shall apply to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 1501(b)(4) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 1501(d) of Pub. L. 94–455 , set out as an Effective Date note under  section 62 of this title .\nPub. L. 94–455, title XV, §\u202f1503(b) ,  Oct. 4, 1976 ,  90 Stat. 1738 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nAmendment by  section 1901(a)(32) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .\nPub. L. 93–406, title II, §\u202f2002(i)(1) ,  Sept. 2, 1974 ,  88 Stat. 971 , provided that:  “The amendments made by subsections (a), (b), and (c) [of  section 2002 of Pub. L. 93–406 , enacting this section and sections 408 and 409 of this title and amending  section 62 of this title ] apply to taxable years beginning after  December 31, 1974 .”\nPub. L. 109–227, §\u202f2(c) ,  May 29, 2006 ,  120 Stat. 385 , provided that: \n “(1)   In general .— In the case of any taxpayer with respect to whom compensation was excluded from gross income under section 112 of the Internal Revenue Code of 1986 for any taxable year beginning after  December 31, 2003 , and ending before the date of the enactment of this Act [ May 29, 2006 ], any contribution to an individual retirement plan made on account of such taxable year and not later than the last day of the 3-year period beginning on the date of the enactment of this Act shall be treated, for purposes of such Code, as having been made on the last day of such taxable year. \n \n “(2)   Waiver of limitations.— “(A)   Credit or refund .— If the credit or refund of any overpayment of tax resulting from a contribution to which paragraph (1) applies is prevented at any time by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the 1-year period beginning on the date that such contribution is made (determined without regard to paragraph (1)). \n \n “(B)   Assessment of deficiency .— The period for assessing a deficiency attributable to a contribution to which paragraph (1) applies shall not expire before the close of the 3-year period beginning on the date that such contribution is made. Such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment. \n \n \n “(3)   Individual retirement plan defined .— For purposes of this subsection, the term ‘individual retirement plan’ has the meaning given such term by section 7701(a)(37) of such Code.”\nPub. L. 100–203, title X, §\u202f10103 ,  Dec. 22, 1987 ,  101 Stat. 1330–386 , as amended by  Pub. L. 100–647, title II, §\u202f2004(c) ,  Nov. 10, 1988 ,  102 Stat. 3599 , provided that: \n “(a)   General Rule .— A Federal judge— “(1)  shall be treated as an active participant in a plan established for its employees by the United States for purposes of section 219(g) of the Internal Revenue Code of 1986, and \n \n “(2)  shall be treated as an employee for purposes of chapter 1 of such Code. \n \n \n “(b)   Effective Date .— The provisions of subsection (a) shall apply to taxable years beginning after  December 31, 1987 .”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 95–600, title I, §\u202f157(b)(4)(B) ,  Nov. 6, 1978 ,  92 Stat. 2805 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If, but for this subparagraph, an amount would be allowable as a deduction by reason of section 219(c)(5) or 220(c)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for a taxable year beginning before  January 1, 1978 , such amount shall be allowable only for the taxpayer’s first taxable year beginning in 1978.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'In the case of an individual who is an eligible individual for any month during the taxable year, there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by such individual to an Archer MSA of such individual.\nThe amount allowable as a deduction under subsection (a) to an individual for the taxable year shall not exceed the sum of the monthly limitations for months during such taxable year that the individual is an eligible individual.\nThe deduction allowed under subsection (a) for contributions as an eligible individual described in subclause (I) of subsection (c)(1)(A)(iii) shall not exceed such individual’s wages, salaries, tips, and other employee compensation which are attributable to such individual’s employment by the employer referred to in such subclause.\nThe deduction allowed under subsection (a) for contributions as an eligible individual described in subclause (II) of subsection (c)(1)(A)(iii) shall not exceed such individual’s earned income (as defined in section 401(c)(1)) derived by the taxpayer from the trade or business with respect to which the high deductible health plan is established.\nThe limitations under this paragraph shall be determined without regard to community property laws.\nNo deduction shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.\nThe limitation under this subsection for any month with respect to an individual shall be zero for the first month such individual is entitled to benefits under title XVIII of the Social Security Act and for each month thereafter.\nFor limitations on number of taxpayers who are eligible to have Archer MSAs, see subsection (i).\nSuch term does not include a health plan if substantially all of its coverage is coverage described in paragraph (1)(B).\nA plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for preventive care if the absence of a deductible for such care is required by State law.\nThe term “small employer” means, with respect to any calendar year, any employer if such employer employed an average of 50 or fewer employees on business days during either of the 2 preceding calendar years. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the employer was in existence throughout such year.\nIn the case of an employer which was not in existence throughout the 1st preceding calendar year, the determination under subparagraph (A) shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.\nFor purposes of this paragraph, all persons treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 shall be treated as 1 employer.\nAny reference in this paragraph to an employer shall include a reference to any predecessor of such employer.\nThe term “family coverage” means any coverage other than self-only coverage.\nThe term “qualified medical expenses” means, with respect to an account holder, amounts paid by such holder for medical care (as defined in section 213(d)) for such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.\nSubparagraph (A) shall not apply to any payment for insurance.\nSubparagraph (A) shall apply to an amount paid by an account holder for medical care of an individual who is not described in clauses (i) and (ii) of subsection (c)(1)(A) for the month in which the expense for such care is incurred only if no amount is contributed (other than a rollover contribution) to any Archer MSA of such account holder for the taxable year which includes such month. This subparagraph shall not apply to any expense for coverage described in subclause (I) or (III) of subparagraph (B)(ii).\nThe term “account holder” means the individual on whose behalf the Archer MSA was established.\nAn Archer MSA is exempt from taxation under this subtitle unless such account has ceased to be an Archer MSA. Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations).\nRules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to Archer MSAs, and any amount treated as distributed under such rules shall be treated as not used to pay qualified medical expenses.\nAny amount paid or distributed out of an Archer MSA which is used exclusively to pay qualified medical expenses of any account holder shall not be includible in gross income.\nAny amount paid or distributed out of an Archer MSA which is not used exclusively to pay the qualified medical expenses of the account holder shall be included in the gross income of such holder.\nFor purposes of subparagraph (A), the term “excess contribution” means any contribution (other than a rollover contribution) which is neither excludable from gross income under section 106(b) nor deductible under this section.\nThe tax imposed by this chapter on the account holder for any taxable year in which there is a payment or distribution from an Archer MSA of such holder which is includible in gross income under paragraph (2) shall be increased by 20 percent of the amount which is so includible.\nSubparagraph (A) shall not apply if the payment or distribution is made after the account holder becomes disabled within the meaning of section 72(m)(7) or dies.\nSubparagraph (A) shall not apply to any payment or distribution after the date on which the account holder attains the age specified in section 1811 of the Social Security Act.\nParagraph (2) shall not apply to any amount paid or distributed from an Archer MSA to the account holder to the extent the amount received is paid into an Archer MSA or a health savings account (as defined in section 223(d)) for the benefit of such holder not later than the 60th day after the day on which the holder receives the payment or distribution.\nThis paragraph shall not apply to any amount described in subparagraph (A) received by an individual from an Archer MSA if, at any time during the 1-year period ending on the day of such receipt, such individual received any other amount described in subparagraph (A) from an Archer MSA which was not includible in the individual’s gross income because of the application of this paragraph.\nFor purposes of determining the amount of the deduction under section 213, any payment or distribution out of an Archer MSA for qualified medical expenses shall not be treated as an expense paid for medical care.\nThe transfer of an individual’s interest in an Archer MSA to an individual’s spouse or former spouse under a divorce or separation instrument described in clause (i) of section 121(d)(3)(C) shall not be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest shall, after such transfer, be treated as an Archer MSA with respect to which such spouse is the account holder.\nIf the account holder’s surviving spouse acquires such holder’s interest in an Archer MSA by reason of being the designated beneficiary of such account at the death of the account holder, such Archer MSA shall be treated as if the spouse were the account holder.\nThe amount includible in gross income under clause (i) by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date.\nAn appropriate deduction shall be allowed under section 691(c) to any person (other than the decedent or the decedent’s spouse) with respect to amounts included in gross income under clause (i) by such person.\nThe Secretary may require the trustee of an Archer MSA to make such reports regarding such account to the Secretary and to the account holder with respect to contributions, distributions, and such other matters as the Secretary determines appropriate. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.\nThe term “active MSA participant” means, with respect to any taxable year, any individual who is the account holder of any Archer MSA into which any contribution was made which was excludable from gross income under section 106(b), or allowable as a deduction under this section, for such taxable year.\nExcept as otherwise provided in this subparagraph, the cut-off date is October 1 of the cut-off year.\nIn the case of an individual described in subclause (I) of subsection (c)(1)(A)(iii), if the regularly scheduled enrollment period for health plans of the individual’s employer occurs during the last 3 months of the cut-off year, the cut-off date is December 31 of the cut-off year.\nIn the case of an individual described in subclause (II) of subsection (c)(1)(A)(iii), the cut-off date is November 1 of the cut-off year.\nThe numerical limitation shall not apply for 2000 or 2003.\nThe determination of whether any calendar year is a cut-off year shall be made by not counting the Archer MSA of any previously uninsured individual.\nFor purposes of this subsection, the term “previously uninsured individual” means, with respect to any Archer MSA, any individual who had no health plan coverage (other than coverage referred to in subsection (c)(1)(B)) at any time during the 6-month period before the date such individual’s coverage under the high deductible health plan commences.\nNot later than  June 1, 1997 , each person who is the trustee of an Archer MSA established before  May 1, 1997 , shall make an additional report described in subparagraph (A) but only with respect to accounts established before  May 1, 1997 .\nTo the extent practicable, in determining the number of Archer MSAs on the basis of the reports under this paragraph, all Archer MSAs of an individual shall be treated as 1 account and all accounts of individuals who are married to each other shall be treated as 1 account.\nAny determination under this subsection that a calendar year is a cut-off year shall be made by the Secretary and shall be published not later than October 1 of such year.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Social Security Act, referred to in subsecs. (b)(7) and (f)(4)(C), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title XVIII of the Act is classified generally to subchapter XVIII (§\u202f1395 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Section 1811 of the Act is classified to  section 1395c of Title 42 . For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nA prior section 220 was renumbered 224 of this title.\nAnother prior section 220, added  Pub. L. 100–647, title VI, §\u202f6007(a) ,  Nov. 10, 1988 ,  102 Stat. 3687 , related to jury duty pay remitted to employer, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11802(e)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–530 .\nAnother prior section 220, added  Pub. L. 94–455, title XV, §\u202f1501(a) ,  Oct. 4, 1976 ,  90 Stat. 1734 ; amended  Pub. L. 95–600, title I , §§\u202f156(c)(3), 157(a)(2), (b)(2), title VII, §\u202f703(c)(2), (3),  Nov. 6, 1978 ,  92 Stat. 2803 , 2804, 2939;  Pub. L. 96–222, title I, §\u202f101(a)(14)(B) ,  Apr. 1, 1980 ,  94 Stat. 204 , related to retirement savings for certain married individuals, prior to repeal by  Pub. L. 97–34, title III, §\u202f311(e) ,  Aug. 13, 1981 ,  95 Stat. 280 , applicable to taxable years beginning after  Dec. 31, 1981 , and deductions allowed under  section 220 of this title , as in effect prior to its repeal, treated as deductions under  section 219 of this title .\n2020—Subsec. (d)(2)(A).  Pub. L. 116–136  substituted “For purposes of this subparagraph, amounts paid for menstrual care products (as defined in section 223(d)(2)(D)) shall be treated as paid for medical care.” for “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”\n2017—Subsec. (f)(7).  Pub. L. 115–97, §\u202f11051(b)(3)(D) , substituted “clause (i) of section 121(d)(3)(C)” for “subparagraph (A) of section 71(b)(2)”.\nSubsec. (g)(2).  Pub. L. 115–97, §\u202f11002(d)(1)(T) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2010—Subsec. (d)(2)(A).  Pub. L. 111–148, §\u202f9003(b) , inserted at end “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”\nSubsec. (f)(4)(A).  Pub. L. 111–148, §\u202f9004(b) , substituted “20 percent” for “15 percent”.\n2006—Subsec. (i)(2), (3)(B).  Pub. L. 109–432, §\u202f117(a) , substituted “2007” for “2005” wherever appearing in headings and text.\nSubsec. (j)(2).  Pub. L. 109–432, §\u202f117(b)(1) , substituted “2004, 2005, or 2006” for “or 2004” in heading and in introductory provisions of subpars. (A) and (B).\nSubsec. (j)(4)(A).  Pub. L. 109–432, §\u202f117(b)(2) , substituted “2004, 2005, and 2006” for “and 2004” in introductory provisions.\n2004—Subsec. (d)(2)(A).  Pub. L. 108–311, §\u202f207(19) , inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\nSubsec. (i)(2), (3)(B).  Pub. L. 108–311, §\u202f322(a) , substituted “2005” for “2003” wherever appearing in headings and text.\nSubsec. (j)(2).  Pub. L. 108–311, §\u202f322(b)(1)(B) , substituted “2002, or 2004” for “or 2002” in heading.\nSubsec. (j)(2)(A), (B).  Pub. L. 108–311, §\u202f322(b)(1)(A) , substituted “2002, or 2004” for “or 2002” in introductory provisions.\nSubsec. (j)(2)(C).  Pub. L. 108–311, §\u202f322(b)(3) , amended heading and text of subpar. (C) generally. Prior to amendment text read as follows: “The numerical limitation shall not apply for 2000.”\nSubsec. (j)(4)(A).  Pub. L. 108–311, §\u202f322(b)(2) , substituted “2002, and 2004” for “and 2002” in introductory provisions.\n2003—Subsec. (f)(5)(A).  Pub. L. 108–173  inserted “or a health savings account (as defined in section 223(d))” after “paid into an Archer MSA”.\n2002—Subsec. (i)(2).  Pub. L. 107–147, §\u202f612(a) , substituted “2003” for “2002” in subpars. (A) and (B).\nSubsec. (i)(3)(B).  Pub. L. 107–147, §\u202f612(a) , substituted “2003” for “2002” in heading and introductory provisions.\nSubsec. (j)(2).  Pub. L. 107–147, §\u202f612(b)(1) , substituted “1998, 1999, 2001, or 2002” for “1998, 1999, or 2001” wherever appearing in heading and text.\nSubsec. (j)(4)(A).  Pub. L. 107–147, §\u202f612(b)(2) , substituted “2001, and 2002” for “and 2001”.\n2000— Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(8)] , substituted “Archer MSAs” for “Medical savings accounts” in section catchline.\nSubsecs. (a), (b)(5).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA”.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account” wherever appearing.\nSubsec. (c)(1)(C).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(7)] , substituted “Archer MSAs” for “medical savings accounts” in heading.\nSubsec. (c)(1)(C)(i).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA”.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (c)(1)(D).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts”.\nSubsec. (c)(4)(C)(ii).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (d).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(4)] , substituted “Archer MSA” for “Medical savings account” in heading.\nSubsec. (d)(1).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(5)] , substituted “Archer MSA” for “Medical savings account” in heading.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4), (b)(3)] , in introductory provisions, substituted “Archer MSA” for “medical savings account” and inserted “as a medical savings account” after “United States”.\nSubsec. (d)(2)(C), (3).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (e)(1).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10), (11)] , substituted “An Archer MSA is exempt” for “A Archer MSA is exempt” and “ceased to be an Archer MSA” for “ceased to be a Archer MSA”.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account” in two places.\nSubsec. (e)(2).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts”.\nSubsec. (f).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA” wherever appearing.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4), (b)(2)(B)] , substituted “Archer MSA” for “medical savings account” wherever appearing and “Archer MSAs” for “medical savings accounts” in introductory provisions of par. (3)(A).\nSubsec. (h).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA”.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (i).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(6)] , substituted “Archer MSAs” for “medical savings accounts” in heading.\nSubsec. (i)(2)(A), (B).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f201(a)] , substituted “2002” for “2000”.\nSubsec. (i)(3)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (i)(3)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f201(a)] , substituted “2002” for “2000” in heading and introductory provisions.\nSubsec. (i)(4)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (i)(4)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts”.\nSubsec. (i)(5)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (j)(1).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts” in introductory provisions.\nSubsec. (j)(2).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f201(b)(1)(A)] , substituted “1998, 1999, or 2001” for “1998 or 1999” in heading and in introductory provisions of subpars. (A) and (B).\nSubsec. (j)(2)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f201(b)(1)(B)] , substituted “750,000 (600,000 in the case of 1998)” for “600,000 (750,000 in the case of 1999)” in concluding provisions.\nSubsec. (j)(2)(B)(ii).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts”.\nSubsec. (j)(2)(C).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f201(b)(1)(C)] , added subpar. (C).\nSubsec. (j)(3)(A), (B).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (j)(4)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA” in introductory provisions.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §§\u202f201(b)(2), 202(a)(4)] , in introductory provisions, substituted “1999, and 2001” for “and 1999” and “Archer MSA” for “medical savings account”.\nSubsec. (j)(4)(A)(i).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts”.\nSubsec. (j)(4)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA”.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(4)] , substituted “Archer MSA” for “medical savings account”.\nSubsec. (j)(4)(D).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(2)(B)] , substituted “Archer MSAs” for “medical savings accounts” in two places.\n1997—Subsec. (b)(7).  Pub. L. 105–33  added par. (7).\nSubsec. (c)(3).  Pub. L. 105–34, §\u202f1602(a)(2) , redesignated subpars. (B) to (D) as (A) to (C), respectively, and struck out former subpar. (A) which read as follows: “Medicare supplemental insurance,”.\nSubsec. (d)(2)(C).  Pub. L. 105–34, §\u202f1602(a)(3) , substituted “described in clauses (i) and (ii) of subsection (c)(1)(A)” for “an eligible individual”.\nPub. L. 116–136, div. A, title III, §\u202f3702(d)(1) ,  Mar. 27, 2020 ,  134 Stat. 416 , provided that:  “The amendment made by subsections (a) and (b) [amending this section and  section 223 of this title ] shall apply to amounts paid after  December 31, 2019 .”\nAmendment by  section 11002(d)(1)(T) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 11051(b)(3)(D) of Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nPub. L. 111–148, title IX, §\u202f9003(d)(1) ,  Mar. 23, 2010 ,  124 Stat. 854 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 223 of this title ] shall apply to amounts paid with respect to taxable years beginning after  December 31, 2010 .”\nPub. L. 111–148, title IX, §\u202f9004(c) ,  Mar. 23, 2010 ,  124 Stat. 854 , provided that:  “The amendments made by this section [amending this section and  section 223 of this title ] shall apply to distributions made after  December 31, 2010 .”\nAmendment by  section 207(19) of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nPub. L. 108–311, title III, §\u202f322(c) ,  Oct. 4, 2004 ,  118 Stat. 1183 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2004 .”\nAmendment by  Pub. L. 108–173  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 1201(k) of Pub. L. 108–173 , set out as a note under  section 62 of this title .\nPub. L. 107–147, title VI, §\u202f612(c) ,  Mar. 9, 2002 ,  116 Stat. 61 , provided that:  “The amendments made by this section [amending this section] shall take effect on  January 1, 2002 .”\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f201(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–628, provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 21, 2000 ].”\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996,  Pub. L. 104–191 , to which such amendment relates, see  section 1602(i) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 105–33  applicable to taxable years beginning after  Dec. 31, 1998 , see  section 4006(c) of Pub. L. 105–33 , set out as an Effective Date note under  section 138 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1996 , see  section 301(j) of Pub. L. 104–191 , set out as an Effective Date of 1996 Amendment note under  section 62 of this title .\nPub. L. 109–432, div. A, title I, §\u202f117(c) ,  Dec. 20, 2006 ,  120 Stat. 2942 , provided that: \n “(1)  The report required by section 220(j)(4) of the Internal Revenue Code of 1986 to be made on  August 1, 2005 , or  August 1, 2006 , as the case may be, shall be treated as timely if made before the close of the 90-day period beginning on the date of the enactment of this Act [ Dec. 20, 2006 ]. \n \n “(2)  The determination and publication required by section 220(j)(5) of such Code with respect to calendar year 2005 or calendar year 2006, as the case may be, shall be treated as timely if made before the close of the 120-day period beginning on the date of the enactment of this Act. If the determination under the preceding sentence is that 2005 or 2006 is a cut-off year under section 220(i) of such Code, the cut-off date under such section 220(i) shall be the last day of such 120-day period.”\nPub. L. 108–311, title III, §\u202f322(d) ,  Oct. 4, 2004 ,  118 Stat. 1183 , provided that: \n “(1)  The report required by section 220(j)(4) of the Internal Revenue Code of 1986 to be made on  August 1, 2004 , shall be treated as timely if made before the close of the 90-day period beginning on the date of the enactment of this Act [ Oct. 4, 2004 ]. \n \n “(2)  The determination and publication required by section 220(j)(5) of such Code with respect to calendar year 2004 shall be treated as timely if made before the close of the 120-day period beginning on the date of the enactment of this Act. If the determination under the preceding sentence is that 2004 is a cut-off year under section 220(i) of such Code, the cut-off date under such section 220(i) shall be the last day of such 120-day period.”\nPub. L. 104–191, title III, §\u202f301(k) ,  Aug. 21, 1996 ,  110 Stat. 2052 , provided that:  \n “The Secretary of the Treasury or his delegate shall— \n “(1)  during 1997, 1998, 1999, and 2000, regularly evaluate the number of individuals who are maintaining medical savings accounts and the reduction in revenues to the United States by reason of such accounts, and \n \n “(2)  provide such reports of such evaluations to Congress as such Secretary determines appropriate.”\nPub. L. 104–191, title III, §\u202f301 ( l ),  Aug. 21, 1996 ,  110 Stat. 2052 , mandated a comprehensive study regarding the effects of medical savings accounts in the small group market on selection, health costs, preventive care, consumer choice, high deductible plans, and other relevant issues, and mandated a report to Congress on the results of the study by  Jan. 1, 1999 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan.\nExcept as provided in paragraph (2), the deduction allowed by subsection (a) for the taxable year shall not exceed $2,500.\nThe amount which would (but for this paragraph) be allowable as a deduction under this section shall be reduced (but not below zero) by the amount determined under subparagraph (B).\nNo deduction shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual’s taxable year begins.\nThe term “eligible student” has the meaning given such term by section 25A(b)(3).\nThe term “dependent” has the meaning given such term by section 152 (determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof).\nNo deduction shall be allowed under this section for any amount for which a deduction is allowable under any other provision of this chapter, or for which an exclusion is allowable under section 127 to the taxpayer by reason of the payment by the taxpayer’s employer of any indebtedness on a qualified education loan of the taxpayer. The deduction otherwise allowable under subsection (a) (prior to the application of subsection (b)) to the taxpayer for any taxable year shall be reduced (but not below zero) by so much of the distributions treated as a qualified higher education expense under section 529(c)(9) with respect to loans of the taxpayer as would be includible in gross income under section 529(c)(3)(A) for such taxable year but for such treatment.\nIf the taxpayer is married at the close of the taxable year, the deduction shall be allowed under subsection (a) only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.\nMarital status shall be determined in accordance with section 7703.\nIf any amount as adjusted under paragraph (1) is not a multiple of $5,000, such amount shall be rounded to the next lowest multiple of $5,000.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of the Taxpayer Relief Act of 1997, referred to in subsec. (d)(2), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nA prior section 221 was renumbered  section 224 of this title .\nAnother prior section 221, added  Pub. L. 97–34, title I, §\u202f103(a) ,  Aug. 13, 1981 ,  95 Stat. 187 ; amended  Pub. L. 97–448, title III, §\u202f305(d)(4) ,  Jan. 12, 1983 ,  96 Stat. 2400 , related to deduction for two-earner married couples, prior to repeal by  Pub. L. 99–514, title I, §\u202f131(a) ,  Oct. 22, 1986 ,  100 Stat. 2113 , applicable to taxable years beginning after  Dec. 31, 1986 .\n2021—Subsec. (b)(2)(C)(i).  Pub. L. 117–2  inserted “85(c)” before “911”.\n2020—Subsec. (b)(2)(C)(i).  Pub. L. 116–260  struck out “222,” after “and sections”.\nSubsec. (e)(1).  Pub. L. 116–136  inserted “,\u2000or for which an exclusion is allowable under section 127 to the taxpayer by reason of the payment by the taxpayer’s employer of any indebtedness on a qualified education loan of the taxpayer” after “provision of this chapter”.\n2019—Subsec. (e)(1).  Pub. L. 116–94  inserted at end: “The deduction otherwise allowable under subsection (a) (prior to the application of subsection (b)) to the taxpayer for any taxable year shall be reduced (but not below zero) by so much of the distributions treated as a qualified higher education expense under section 529(c)(9) with respect to loans of the taxpayer as would be includible in gross income under section 529(c)(3)(A) for such taxable year but for such treatment.”\n2017—Subsec. (b)(2)(C)(i).  Pub. L. 115–97, §\u202f13305(b)(1) , struck out “199,” after “and sections”.\nSubsec. (f)(1)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(U) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2014—Subsec. (b)(1).  Pub. L. 113–295  substituted “shall not exceed $2,500.” for “shall not exceed the amount determined in accordance with the following table:” and table of amounts for taxable years 1998 to 2001 and thereafter.\n2005—Subsec. (d)(2).  Pub. L. 109–135  substituted “the Taxpayer Relief Act of 1997” for “this Act”.\n2004—Subsec. (b)(2)(C)(i).  Pub. L. 108–357  inserted “199,” before “222”.\nSubsec. (d)(4).  Pub. L. 108–311, §\u202f207(20) , inserted “(determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof)” after “section 152”.\nSubsec. (f)(1).  Pub. L. 108–311, §\u202f408(b)(5) , amended directory language of  Pub. L. 107–16, §\u202f412(b)(2) . See 2001 Amendment note below.\n2001—Subsec. (b)(2)(B)(i), (ii).  Pub. L. 107–16, §\u202f412(b)(1) , amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) read as follows:\n“(i) the excess of—\n“(I) the taxpayer’s modified adjusted gross income for such taxable year, over\n“(II) $40,000 ($60,000 in the case of a joint return), bears to\n“(ii) $15,000.”\nSubsec. (b)(2)(C)(i).  Pub. L. 107–16, §\u202f431(c)(2) , inserted “222,” before “911”.\nSubsec. (d).  Pub. L. 107–16, §\u202f412(a)(1) , redesignated subsec. (e) as (d), and struck out heading and text of former subsec. (d). Text read as follows: “A deduction shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months (whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan. Such 60 months shall be determined in the manner prescribed by the Secretary in the case of multiple loans which are refinanced by, or serviced as, a single loan and in the case of loans incurred before the date of the enactment of this section.”\nSubsec. (e).  Pub. L. 107–16, §\u202f412(a)(1) , redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).\nSubsec. (e)(2)(A).  Pub. L. 107–16, §\u202f402(b)(2)(B) , inserted “529,” after “135,”.\nSubsec. (f).  Pub. L. 107–16, §\u202f412(a)(1) , redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).\nSubsec. (f)(1).  Pub. L. 107–16, §\u202f412(b)(2) , as amended by  Pub. L. 108–311, §\u202f408(b)(5) , substituted “$50,000 and $100,000 amounts” for “$40,000 and $60,000 amounts”.\nSubsec. (g).  Pub. L. 107–16, §\u202f412(a)(1) , redesignated subsec. (g) as (f).\n1998—Subsec. (b)(2)(C).  Pub. L. 105–277, §\u202f4003(a)(2)(A)(iii) , struck out concluding provisions which read as follows: “For purposes of sections 86, 135, 137, 219, and 469, adjusted gross income shall be determined without regard to the deduction allowed under this section.”\nSubsec. (b)(2)(C)(i).  Pub. L. 105–277, §\u202f4003(a)(2)(A)(i) , struck out “135, 137,” after “sections”.\nSubsec. (b)(2)(C)(ii).  Pub. L. 105–277, §\u202f4003(a)(2)(A)(ii) , inserted “135, 137,” after “sections 86,”.\nSubsec. (d).  Pub. L. 105–206, §\u202f6004(b)(2) , inserted at end “Such 60 months shall be determined in the manner prescribed by the Secretary in the case of multiple loans which are refinanced by, or serviced as, a single loan and in the case of loans incurred before the date of the enactment of this section.”\nSubsec. (e)(1).  Pub. L. 105–277, §\u202f4003(a)(3) , inserted before period at end “or to any person by reason of a loan under any qualified employer plan (as defined in section 72(p)(4)) or under any contract referred to in section 72(p)(5)”.\nPub. L. 105–206, §\u202f6004(b)(1) , inserted “by the taxpayer solely” after “incurred” in introductory provisions.\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nAmendment by  Pub. L. 116–136  applicable to payments made after  Mar. 27, 2020 , see  section 2206(c) of Pub. L. 116–136 , set out as a note under  section 127 of this title .\nPub. L. 116–94, div. O, title III, §\u202f302(c) ,  Dec. 20, 2019 ,  133 Stat. 3176 , provided that:  “The amendments made by this section [amending this section and  section 529 of this title ] shall apply to distributions made after  December 31, 2018 .”\nAmendment by  section 11002(d)(1)(U) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 13305(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  section 207(20) of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  section 402(b)(2)(B) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 402(h) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nPub. L. 107–16, title IV, §\u202f412(a)(3) ,  June 7, 2001 ,  115 Stat. 64 , provided that:  “The amendments made by this subsection [amending this section and  section 6050S of this title ] shall apply with respect to any loan interest paid after  December 31, 2001 , in taxable years ending after such date.”\nPub. L. 107–16, title IV, §\u202f412(b)(3) ,  June 7, 2001 ,  115 Stat. 64 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after  December 31, 2001 .”\nAmendment by  section 431(c)(2) of Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nSection applicable to any qualified education loan (as defined in subsec. (e)(1) of this section) incurred on, before, or after  Aug. 5, 1997 , but only with respect to any loan interest payment due and paid after  Dec. 31, 1997 , and to the portion of the 60-month period referred to in subsec. (d) of this section after  Dec. 31, 1997 , see  section 202(e) of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 62 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'Section, added  Pub. L. 107–16, title IV, §\u202f431(a) ,  June 7, 2001 ,  115 Stat. 66 ; amended  Pub. L. 108–357, title I, §\u202f102(d)(3) ,  Oct. 22, 2004 ,  118 Stat. 1429 ;  Pub. L. 109–432, div. A, title I, §\u202f101(a) , (b),  Dec. 20, 2006 ,  120 Stat. 2933 ;  Pub. L. 110–343, div. C, title II, §\u202f202(a) ,  Oct. 3, 2008 ,  122 Stat. 3864 ;  Pub. L. 111–312, title VII, §\u202f724(a) ,  Dec. 17, 2010 ,  124 Stat. 3316 ;  Pub. L. 112–240, title II, §\u202f207(a) ,  Jan. 2, 2013 ,  126 Stat. 2324 ;  Pub. L. 113–295, div. A, title I, §\u202f107(a) ,  Dec. 19, 2014 ,  128 Stat. 4013 ;  Pub. L. 114–27, title VIII, §\u202f804(b) ,  June 29, 2015 ,  129 Stat. 415 ;  Pub. L. 114–113, div. Q, title I, §\u202f153(a) ,  Dec. 18, 2015 ,  129 Stat. 3066 ;  Pub. L. 115–97, title I, §\u202f13305(b)(1) ,  Dec. 22, 2017 ,  131 Stat. 2126 ;  Pub. L. 115–123, div. D, title I, §\u202f40203(a) ,  Feb. 9, 2018 ,  132 Stat. 145 ;  Pub. L. 116–94, div. Q, title I, §\u202f104(a) ,  Dec. 20, 2019 ,  133 Stat. 3228 ;  Pub. L. 117–2, title IX, §\u202f9042(b)(7) ,  Mar. 11, 2021 ,  135 Stat. 122 , related to a deduction for qualified tuition and related expenses.\nA prior section 222 was renumbered  section 224 of this title .\nAnother prior section 222, added  Pub. L. 97–34, title I, §\u202f125(a) ,  Aug. 13, 1981 ,  95 Stat. 201 ; amended  Pub. L. 97–448, title I, §\u202f101(f) ,  Jan. 12, 1983 ,  96 Stat. 2367 , related to deduction of adoption expenses, prior to repeal by  Pub. L. 99–514, title I , §§\u202f135(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2116 , 2121, applicable to taxable years beginning after  Dec. 31, 1986 .\nRepeal of section applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as an Effective Date of 2020 Amendment note under  section 25A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'In the case of an individual who is an eligible individual for any month during the taxable year, there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual.\nThe amount allowable as a deduction under subsection (a) to an individual for the taxable year shall not exceed the sum of the monthly limitations for months during such taxable year that the individual is an eligible individual.\nIn the case of an individual who has attained age 55 before the close of the taxable year, the applicable limitation under subparagraphs (A) and (B) of paragraph (2) shall be increased by the additional contribution amount.\nFor purposes of this section, the additional contribution amount is the amount determined in accordance with the following table: \n \n \n \n \n \n \n \u2001For taxable years beginning in: The additional contribution amount is: \n \n \n 2004 $500\u202f\u202f \n 2005 $600\u202f\u202f \n 2006 $700\u202f\u202f \n 2007 $800\u202f\u202f \n 2008 $900\u202f\u202f \n 2009 and thereafter $1,000.\nNo deduction shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.\nThe limitation under this subsection for any month with respect to an individual shall be zero for the first month such individual is entitled to benefits under title XVIII of the Social Security Act and for each month thereafter.\nSubclauses (I) and (II) of clause (i) shall not apply if the individual ceased to be an eligible individual by reason of the death of the individual or the individual becoming disabled (within the meaning of section 72(m)(7)).\nThe term “testing period” means the period beginning with the last month of the taxable year referred to in subparagraph (A) and ending on the last day of the 12th month following such month.\nAn individual shall not fail to be treated as an eligible individual for any period merely because the individual receives hospital care or medical services under any law administered by the Secretary of Veterans Affairs for a service-connected disability (within the meaning of  section 101(16) of title 38 , United States Code).\nAn individual shall not fail to be treated as an eligible individual for any period merely because the individual receives benefits for medical care subject to and in accordance with section 9816 or 9817, section 2799A–1 or 2799A–2 of the Public Health Service Act, or section 716 or 717 of the Employee Retirement Income Security Act of 1974, or any State law providing similar protections to such individual.\nSuch term does not include a health plan if substantially all of its coverage is coverage described in paragraph (1)(B).\nA plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for preventive care (within the meaning of section 1861 of the Social Security Act, except as otherwise provided by the Secretary).\nSuch plan shall not fail to be treated as a high deductible health plan by reason of having an out-of-pocket limitation for services provided outside of such network which exceeds the applicable limitation under subparagraph (A)(ii).\nSuch plan’s annual deductible for services provided outside of such network shall not be taken into account for purposes of subsection (b)(2).\nA plan shall not fail to be treated as a high deductible health plan by reason of providing benefits for medical care in accordance with section 9816 or 9817, section 2799A–1 or 2799A–2 of the Public Health Service Act, or section 716 or 717 of the Employee Retirement Income Security Act of 1974, or any State law providing similar protections to individuals, prior to the satisfaction of the deductible under paragraph (2)(A)(i).\nA plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for selected insulin products.\nThe term “selected insulin products” means any dosage form (such as vial, pump, or inhaler dosage forms) of any different type (such as rapid-acting, short-acting, intermediate-acting, long-acting, ultra long-acting, and premixed) of insulin.\nThe term “insulin” means insulin that is licensed under subsection (a) or (k) of section 351 of the Public Health Service Act ( 42 U.S.C. 262 ) and continues to be marketed under such section, including any insulin product that has been deemed to be licensed under section 351(a) of such Act pursuant to section 7002(e)(4) of the Biologics Price Competition and Innovation Act of 2009 ( Public Law 111–148 ) and continues to be marketed pursuant to such licensure.\nThe term “family coverage” means any coverage other than self-only coverage.\nThe term “Archer MSA” has the meaning given such term in section 220(d).\nThe term “qualified medical expenses” means, with respect to an account beneficiary, amounts paid by such beneficiary for medical care (as defined in section 213(d)) for such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. For purposes of this subparagraph, amounts paid for menstrual care products shall be treated as paid for medical care.\nSubparagraph (A) shall not apply to any payment for insurance.\nFor purposes of this paragraph, the term “menstrual care product” means a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions.\nThe term “account beneficiary” means the individual on whose behalf the health savings account was established.\nA health savings account is exempt from taxation under this subtitle unless such account has ceased to be a health savings account. Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations).\nRules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to health savings accounts, and any amount treated as distributed under such rules shall be treated as not used to pay qualified medical expenses.\nAny amount paid or distributed out of a health savings account which is used exclusively to pay qualified medical expenses of any account beneficiary shall not be includible in gross income.\nAny amount paid or distributed out of a health savings account which is not used exclusively to pay the qualified medical expenses of the account beneficiary shall be included in the gross income of such beneficiary.\nFor purposes of subparagraph (A), the term “excess contribution” means any contribution (other than a rollover contribution described in paragraph (5) or section 220(f)(5)) which is neither excludable from gross income under section 106(d) nor deductible under this section.\nThe tax imposed by this chapter on the account beneficiary for any taxable year in which there is a payment or distribution from a health savings account of such beneficiary which is includible in gross income under paragraph (2) shall be increased by 20 percent of the amount which is so includible.\nSubparagraph (A) shall not apply if the payment or distribution is made after the account beneficiary becomes disabled within the meaning of section 72(m)(7) or dies.\nSubparagraph (A) shall not apply to any payment or distribution after the date on which the account beneficiary attains the age specified in section 1811 of the Social Security Act.\nParagraph (2) shall not apply to any amount paid or distributed from a health savings account to the account beneficiary to the extent the amount received is paid into a health savings account for the benefit of such beneficiary not later than the 60th day after the day on which the beneficiary receives the payment or distribution.\nThis paragraph shall not apply to any amount described in subparagraph (A) received by an individual from a health savings account if, at any time during the 1-year period ending on the day of such receipt, such individual received any other amount described in subparagraph (A) from a health savings account which was not includible in the individual’s gross income because of the application of this paragraph.\nFor purposes of determining the amount of the deduction under section 213, any payment or distribution out of a health savings account for qualified medical expenses shall not be treated as an expense paid for medical care.\nThe transfer of an individual’s interest in a health savings account to an individual’s spouse or former spouse under a divorce or separation instrument described in clause (i) of section 121(d)(3)(C) shall not be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest shall, after such transfer, be treated as a health savings account with respect to which such spouse is the account beneficiary.\nIf the account beneficiary’s surviving spouse acquires such beneficiary’s interest in a health savings account by reason of being the designated beneficiary of such account at the death of the account beneficiary, such health savings account shall be treated as if the spouse were the account beneficiary.\nThe amount includible in gross income under clause (i) by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date.\nAn appropriate deduction shall be allowed under section 691(c) to any person (other than the decedent or the decedent’s spouse) with respect to amounts included in gross income under clause (i) by such person.\nIf any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table below and under  section 1 of this title .\nThe Social Security Act, referred to in subsecs. (b)(7), (c)(2)(C), (d)(2)(C)(iv), (f)(4)(C), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title XVIII of the Act is classified generally to subchapter XVIII (§\u202f1395 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Sections 1811, 1861, and 1882 of the Act are classified to sections 1395c, 1395x, and 1395ss, respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSections 2799A–1 and 2799A–2 of the Public Health Service Act, referred to in subsec. (c)(1)(D), (2)(F), are classified to sections 300gg–111 and 300gg–112, respectively, of Title 42, The Public Health and Welfare.\nSections 716 and 717 of the Employee Retirement Income Security Act of 1974, referred to in subsec. (c)(1)(D), (2)(F), are classified to sections 1185e and 1185f, respectively, of Title 29, Labor.\nSection 7002(e)(4) of the Biologics Price Competition and Innovation Act of 2009, referred to in subsec. (c)(2)(G)(ii)(II), is  section 7002(e)(4) of Pub. L. 111–148 , which is set out in a note under  section 262 of Title 42 , The Public Health and Welfare.\nA prior section 223 was renumbered  section 224 of this title .\n2022—Subsec. (c)(1)(B)(ii).  Pub. L. 117–328, §\u202f4151(b) , which directed the substitution of “(in the case of months or plan years to which paragraph (2)(E) applies)” for “(in the case of plan years beginning on or before  December 31, 2021 , or in the case of months beginning after  March 31, 2022 , and before  January 1, 2023 )”, was executed by making the substitution for “(in the case of plan years beginning on or before  December 31, 2021 , or in the case of months beginning after  March 31, 2022 , and before  January 1, 2023 ,)”, to reflect the probable intent of Congress.\nPub. L. 117–103, §\u202f307(b) , inserted “,\u2000or in the case of months beginning after  March 31, 2022 , and before  January 1, 2023 ,” after “ December 31, 2021 ”.\nSubsec. (c)(2)(E).  Pub. L. 117–328, §\u202f4151(a) , substituted “In the case of—” and cls. (i) and (ii) for “In the case of plan years beginning on or before  December 31, 2021 , or in the case of months beginning after  March 31, 2022 , and before  January 1, 2023 ,”.\nPub. L. 117–103, §\u202f307(a) , inserted “or in the case of months beginning after  March 31, 2022 , and before  January 1, 2023 ,” after “ December 31, 2021 ,”.\nSubsec. (c)(2)(G).  Pub. L. 117–169  added subpar. (G).\n2020—Subsec. (c)(1)(B)(ii).  Pub. L. 116–136, §\u202f3701(b) , substituted “long-term care, or (in the case of plan years beginning on or before  December 31, 2021 ) telehealth and other remote care” for “or long-term care”.\nSubsec. (c)(1)(D).  Pub. L. 116–260, §\u202f102(c)(4)(A)(i) , added subpar. (D).\nSubsec. (c)(2)(E).  Pub. L. 116–136, §\u202f3701(a) , added subpar. (E).\nSubsec. (c)(2)(F).  Pub. L. 116–260, §\u202f102(c)(4)(A)(ii) , added subpar. (F).\nSubsec. (d)(2)(A).  Pub. L. 116–136, §\u202f3702(a)(1) , substituted “For purposes of this subparagraph, amounts paid for menstrual care products shall be treated as paid for medical care.” for “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”\nSubsec. (d)(2)(D).  Pub. L. 116–136, §\u202f3702(a)(2) , added subpar. (D).\n2018—Subsec. (c)(2)(C).  Pub. L. 115–141, §\u202f401(a)(57) , substituted “section 1861” for “section 1871”.\nSubsec. (d)(2)(A).  Pub. L. 115–141, §\u202f401(a)(58) , substituted “section 213(d))” for “section 213(d)”.\n2017—Subsec. (f)(7).  Pub. L. 115–97, §\u202f11051(b)(3)(E) , substituted “clause (i) of section 121(d)(3)(C)” for “subparagraph (A) of section 71(b)(2)”.\nSubsec. (g)(1)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(V) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)” in introductory provisions.\n2015—Subsec. (c)(1)(C).  Pub. L. 114–41  added subpar. (C).\n2010—Subsec. (d)(2)(A).  Pub. L. 111–148, §\u202f9003(a) , inserted at end “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”\nSubsec. (f)(4)(A).  Pub. L. 111–148, §\u202f9004(a) , substituted “20 percent” for “10 percent”.\n2006—Subsec. (b)(2)(A).  Pub. L. 109–432, §\u202f303(a)(1) , substituted “$2,250.” for “the lesser of—\n“(i) the annual deductible under such coverage, or\n“(ii) $2,250, or”.\nSubsec. (b)(2)(B).  Pub. L. 109–432, §\u202f303(a)(2) , substituted “$4,500.” for “the lesser of—\n“(i) the annual deductible under such coverage, or\n“(ii) $4,500.”\nSubsec. (b)(4)(C).  Pub. L. 109–432, §\u202f307(b) , added subpar. (C).\nSubsec. (b)(8).  Pub. L. 109–432, §\u202f305(a) , added par. (8).\nSubsec. (c)(1)(B)(iii).  Pub. L. 109–432, §\u202f302(b) , added cl. (iii).\nSubsec. (d)(1)(A)(ii)(I).  Pub. L. 109–432, §\u202f303(b) , substituted “subsection (b)(2)(B)” for “subsection (b)(2)(B)(ii)”.\nSubsec. (g)(1).  Pub. L. 109–432, §\u202f304 , inserted concluding provisions.\n2005—Subsec. (d)(2)(A).  Pub. L. 109–135  inserted “,\u2000determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof” after “section 152”.\nPub. L. 117–328, div. FF, title IV, §\u202f4151(c) ,  Dec. 29, 2022 ,  136 Stat. 5931 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2022 .”\nPub. L. 117–169, title I, §\u202f11408(b) ,  Aug. 16, 2022 ,  136 Stat. 1905 , provided that:  “The amendment made by this section [amending this section] shall apply to plan years beginning after  December 31, 2022 .”\nPub. L. 117–103, div. P, title II, §\u202f307(c) ,  Mar. 15, 2022 ,  136 Stat. 807 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Mar. 15, 2022 ].”\nPub. L. 116–260, div. BB, title I, §\u202f102(c)(4)(B) ,  Dec. 27, 2020 ,  134 Stat. 2796 , provided that:  “The amendments made by subparagraph (A) [amending this section] shall apply for plan years beginning on or after  January 1, 2022 .”\nPub. L. 116–136, div. A, title III, §\u202f3701(c) ,  Mar. 27, 2020 ,  134 Stat. 415 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Mar. 27, 2020 ].”\nAmendment by  section 3702(a) of Pub. L. 116–136  applicable to amounts paid after  Dec. 31, 2019 , see  section 3702(d)(1) of Pub. L. 116–136 , set out as a note under  section 220 of this title .\nAmendment by  section 11002(d)(1)(V) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 11051(b)(3)(E) of Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nPub. L. 114–41, title IV, §\u202f4007(b)(2) ,  July 31, 2015 ,  129 Stat. 466 , provided that:  “The amendment made by this subsection [amending this section] shall apply to months beginning after  December 31, 2015 .”\nAmendment by  section 9003(a) of Pub. L. 111–148  applicable to amounts paid with respect to taxable years beginning after  Dec. 31, 2010 , see  section 9003(d)(1) of Pub. L. 111–148 , set out as a note under  section 220 of this title .\nAmendment by  section 9004(a) of Pub. L. 111–148  applicable to distributions made after  Dec. 31, 2010 , see  section 9004(c) of Pub. L. 111–148 , set out as a note under  section 220 of this title .\nPub. L. 109–432, div. A, title III, §\u202f302(c)(2) ,  Dec. 20, 2006 ,  120 Stat. 2949 , provided that:  “The amendment made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 20, 2006 ].”\nPub. L. 109–432, div. A, title III, §\u202f303(c) ,  Dec. 20, 2006 ,  120 Stat. 2950 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–432, div. A, title III, §\u202f305(b) ,  Dec. 20, 2006 ,  120 Stat. 2951 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–432, div. A, title III, §\u202f307(c) ,  Dec. 20, 2006 ,  120 Stat. 2953 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to taxable years beginning after  December 31, 2006 .”\nAmendment by  Pub. L. 109–135  effective as if included in the provisions of the Working Families Tax Relief Act of 2004,  Pub. L. 108–311 , to which such amendment relates, see  section 404(d) of Pub. L. 109–135 , set out as a note under  section 21 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 2003 , see  section 1201(k) of Pub. L. 108–173 , set out as an Effective Date of 2003 Amendment note under  section 62 of this title .\nProvisions relating to inflation adjustment of items in this section for certain years were contained in the following:\n2023—Revenue Procedure 2022–24.\n2022—Revenue Procedure 2021–25.\n2021—Revenue Procedure 2020–32.\n2020—Revenue Procedure 2019–25.\n2019—Revenue Procedure 2018–30.\n2018—Revenue Procedure 2017–37.\n2017—Revenue Procedure 2016–28.\n2016—Revenue Procedure 2015–30.\n2015—Revenue Procedure 2014–30.\n2014—Revenue Procedure 2013–25.\n2013—Revenue Procedure 2012–26.\n2012—Revenue Procedure 2011–32.\n2011—Revenue Procedure 2010–22.\n2010—Revenue Procedure 2009–29.\n2009—Revenue Procedure 2008–29.\n2008—Revenue Procedure 2007–36.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS'},
  'content': 'For deductions in respect of a decedent, see section 691.\n2003— Pub. L. 108–173  renumbered  section 223 of this title  as this section.\n2001— Pub. L. 107–16  renumbered  section 222 of this title  as this section.\n1997— Pub. L. 105–34  renumbered  section 221 of this title  as this section.\n1996— Pub. L. 104–191  renumbered  section 220 of this title  as this section.\n1990— Pub. L. 101–508  renumbered  section 221 of this title  as this section.\n1986— Pub. L. 99–514, §\u202f135(b)(1) , renumbered  section 223 of this title  as this section.\nPub. L. 99–514, §\u202f301(b)(5)(A) , amended section generally, substituting “reference” for “references” in section catchline, striking out par. (1) which referred to section 1202 for deduction for long-term capital gains in the case of a taxpayer other than a corporation, and striking out par. (2) designation.\n1981— Pub. L. 97–34  successively renumbered sections 221 and 222 of this title as this section.\n1976— Pub. L. 94–455  renumbered  section 220 of this title  as this section.\n1974— Pub. L. 93–406  renumbered  section 219 of this title  as this section.\n1971— Pub. L. 92–178  renumbered  section 218 of this title  as this section.\n1964— Pub. L. 88–272  renumbered  section 217 of this title  as this section.\nAmendment by  Pub. L. 108–173  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 1201(k) of Pub. L. 108–173 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nAmendment by  section 301(b)(5)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nFor provisions that nothing in amendment by  section 11802(e)(2) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'In addition to the deductions provided in part VI (sec. 161 and following), there shall be allowed as deductions in computing taxable income the items specified in this part.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 72 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title I, §\u202f123(c) ,  78 Stat. 30 , allowed to corporations as a deduction the amount received as interest on obligations of the United States or on obligations of corporations organized under Acts of Congress which are instrumentalities of the United States under certain conditions.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'The term “affiliated group” has the meaning given such term by section 1504(a), except that for such purposes sections 1504(b)(2) and 1504(c) shall not apply.\nIn the case of an affiliated group which includes 1 or more insurance companies under section 801, no dividend by any member of such group shall be treated as a qualifying dividend unless an election under this paragraph is in effect for the taxable year in which the dividend is received. The preceding sentence shall not apply in the case of a dividend described in paragraph (1)(B)(ii).\nAn election under this paragraph shall be made by the common parent of the affiliated group and at such time and in such manner as the Secretary shall by regulations prescribe. Any such election shall be binding on all members of such group and may be revoked only with the consent of the Secretary.\nIn the case of any dividend received from a 20-percent owned corporation, subsection (a)(1) shall be applied by substituting “65 percent” for “50 percent”.\nFor purposes of this section, the term “20-percent owned corporation” means any corporation if 20 percent or more of the stock of such corporation (by vote and value) is owned by the taxpayer. For purposes of the preceding sentence, stock described in section 1504(a)(4) shall not be taken into account.\nFor purposes of subsection (a) and for purposes of section 245, any dividend from a foreign corporation from earnings and profits accumulated by a domestic corporation during a period with respect to which such domestic corporation was subject to taxation under this chapter (or corresponding provisions of prior law) shall be treated as a dividend from a domestic corporation which is subject to taxation under this chapter.\nThe Small Business Investment Act of 1958, referred to in subsec. (a)(2), is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under  section 661 of Title 15  and Tables.\n2018—Subsec. (b)(1)(B).  Pub. L. 115–141, §\u202f401(d)(1)(D)(v) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “if—\n“(i) such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after  December 31, 1963 , for which an election under section 1562 was not in effect, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group, or\n“(ii) such dividend is paid by a corporation with respect to which an election under section 936 is in effect for the taxable year in which such dividend is paid.”\nSubsec. (b)(2)(A).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xvii)(II) , struck out “,\u20001504(b)(4),” after “1504(b)(2)”.\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f13002(a)(1) , substituted “50 percent” for “70 percent”.\nSubsec. (c).  Pub. L. 115–97, §\u202f13002(a)(3) , which directed amendment of subsec. (c) heading by substituting “Increased percentage” for “Retention of 80-percent dividend received deduction”, was executed by making the substitution for “Retention of 80-percent dividends received deduction”, to reflect the probable intent of Congress.\nSubsec. (c)(1).  Pub. L. 115–97, §\u202f13002(a)(2) , substituted “65 percent” for “80 percent” and “50 percent” for “70 percent”.\n2014—Subsec. (c)(1).  Pub. L. 113–295, §\u202f221(a)(41)(C) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of any dividend received from a 20-percent owned corporation—\n“(A) subsection (a)(1) of this section, and\n“(B) subsections (a)(3) and (b)(2) of section 244,\nshall be applied by substituting ‘80 percent’ for ‘70 percent’.”\nSubsec. (d)(4).  Pub. L. 113–295, §\u202f221(a)(41)(D) , struck out par. (4) which read as follows: “Any dividend received which is described in section 244 (relating to dividends received on preferred stock of a public utility) shall not be treated as a dividend.”\n1996—Subsec. (b)(2).  Pub. L. 104–188, §\u202f1702(h)(8) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘affiliated group’ has the meaning given such term by section 1504(a), except that for such purposes sections 1504(b)(2), 1504(b)(4), and 1504(c) shall not apply.”\nSubsec. (b)(3)(A).  Pub. L. 104–188, §\u202f1702(h)(4) , inserted “of” after “In the case”.\n1990—Subsec. (b).  Pub. L. 101–508  amended subsec. (b) generally, substituting present provisions for provisions defining “qualifying dividends”, providing for an election by or for an affiliated group, the effect of an election, and the termination of an election, defining an “affiliated group”, and providing special rules for insurance companies.\n1988—Subsec. (b)(6).  Pub. L. 100–647  substituted “section 801” for “section 801 or 821”.\n1987—Subsec. (a)(1).  Pub. L. 100–203, §\u202f10221(a)(1) , substituted “70 percent” for “80 percent”.\nSubsecs. (c) to (e).  Pub. L. 100–203, §\u202f10221(b) , added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f611(a)(1) , substituted “80 percent” for “85 percent”.\nSubsec. (b)(3)(C).  Pub. L. 99–514, §\u202f411(b)(2)(C)(iv) , inserted “and” at end of cl. (i), redesignated cl. (iii) as (ii), and struck out former cl. (ii) which read as follows: “$400,000 limitation for certain exploration expenditures under section 617(h)(1), and”.\n1984—Subsec. (b)(3)(C).  Pub. L. 98–369, §\u202f211(b)(3)(A) , inserted “and” at end of cl. (ii), struck out cl. (iii) which provided for a $25,000 limitation on small business deduction of life insurance companies under sections 804(a)(3) and 809(d)(10), and redesignated cl. (iv) as (iii).\nSubsec. (b)(6).  Pub. L. 98–369, §\u202f211(b)(3)(B) , substituted “section 801” for “section 802”.\n1981—Subsec. (b)(3)(C)(i).  Pub. L. 97–34  struck out “$150,000” before “minimum accumulated earnings credit”.\n1976—Subsec. (a)(2).  Pub. L. 94–455, §\u202f1901(a)(34)(A) , inserted “( 15 U.S.C. 661  and following)” after “Small Business Investment Act of 1958”.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1051(f)(1) , inserted “either” at end of subpar. (A), substituted a comma for a period and inserted “or” at end of subpar. (B), and added subpar. (C).\nSubsec. (b)(2), (3), (4).  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(2)(A).  Pub. L. 94–455, §\u202f1901(a)(34)(B) , struck out “(except that in the case of a taxable year of a member beginning in 1963 and ending in 1964, if the election is effective for the taxable year of the common parent corporation which includes the last day of such taxable year of such member, such election shall be effective for such taxable year of such member, if such member consents to such election with respect to such taxable year)” after “with respect to which the election is made”.\nSubsec. (b)(3)(B).  Pub. L. 94–455, §\u202f1031(b)(2) , substituted “election under section 901(a) (relating to allowance of foreign tax credit)” for “elections under section 901(a) (relating to allowance of foreign tax credit) and section 904(b)(1) (relating to election of overall limitation)”.\nSubsec. (b)(3)(C).  Pub. L. 94–455 , §§\u202f1901(b)(1)(J)(ii), (21)(A)(i), 1906(b)(3)(C)(ii), struck out cl. (ii) which set a $100,000 limitation for exploration expenditures under section 615 (a) and (b), redesignated former cls. (iii), (iv), and (v) as cls. (ii), (iii), and (iv), respectively, and substituted “certain exploration expenditures under section 617(h)(1)” for “exploration expenditures under sections 615(c)(1) and 617(h)(1)” in cl. (ii) as so redesignated, “804(a)(3)” for “804(a)(4)” in cl. (iii) as so redesignated, and “section 6154(c)(2) and section 6655(e)(2)” for “sections 6154(c)(2) and (3) and sections 6655(e)(2) and (3)” in cl. (iv) as so redesignated.\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f1051(f)(2) , inserted “,\u20001504(b)(4),” after “sections 1504(b)(2)”.\n1975—Subsec. (b)(3)(C)(i).  Pub. L. 94–12  substituted “$150,000” for “$100,000”.\n1969—Subsec. (b)(3)(C)(iii).  Pub. L. 91–172  substituted “sections 615(c)(1) and 617(h)(1)” for “section 615(c)(1)”.\n1968—Subsec. (b)(3)(C)(v).  Pub. L. 90–364  substituted “surtax exemption, and one amount under section 6154(c)(2) and (3) and sections 6655(e)(2) and (3), for purposes of estimated tax payment requirements under section 6154” for “$100,000 exemption for purposes of estimated tax filing requirements under section 6016”.\n1964—Subsec. (a).  Pub. L. 88–272  substituted provisions permitting a deduction for 85 percent of dividends received except that it shall be 100 percent when received by a small business investment company operating under the Small Business Investment Act of 1958, and 100 percent in case of qualifying dividends, for provisions permitting an 85 percent deduction for corporations other than one operating under the Small Business Investment Act of 1958, and for other than dividends described in  section 244(1) of this title .\nSubsec. (b).  Pub. L. 88–272  added subsec. (b) and omitted a prior subsec. (b) which allowed a 100 percent deduction of dividends received by a small business investment company operating under the Small Business Investment Act of 1958, other than dividends described in  section 244(1) of this title .\nSubsec. (c).  Pub. L. 88–272  substituted “subsection (a)” for “subsections (a) and (b)” and added par. (4).\nSubsec. (d).  Pub. L. 88–272  substituted “subsection (a)” for “subsections (a) and (b)”.\n1960—Subsec. (c)(3).  Pub. L. 86–779, §\u202f10(g) , added par. (3).\nSubsec. (d).  Pub. L. 86–779, §\u202f3(a) , added subsec. (d).\n1958—Subsec. (a).  Pub. L. 85–866, §\u202f57(b)(1) , inserted “(other than a small business investment company operating under the Small Business Investment Act of 1958)”.\nSubsecs. (b), (c).  Pub. L. 85–866, §\u202f57(b)(2) , (3), added subsec. (b), redesignated former subsec. (b) as (c), and substituted “subsections (a) and (b)” for “subsection (a)”.\nPub. L. 115–97, title I, §\u202f13002(f) ,  Dec. 22, 2017 ,  131 Stat. 2101 , provided that:  “The amendments made by this section [amending this section and sections 245, 246, 246A, and 861 of this title] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 101–508, title XI, §\u202f11814(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–557 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1504 of this title ] shall apply to taxable years beginning after  December 31, 1990 . \n \n “(2)   Treatment of old elections .— For purposes of section 243(b)(3) of the Internal Revenue Code of 1986 (as amended by subsection (a)), any reference to an election under such section shall be treated as including a reference to an election under section 243(b) of such Code (as in effect on the day before the date of the enactment of this Act [ Nov. 5, 1990 ]).”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10221(e) ,  Dec. 22, 1987 ,  101 Stat. 1330–409 , as amended by  Pub. L. 100–647, title II, §\u202f2004(i)(1) ,  Nov. 10, 1988 ,  102 Stat. 3603 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 244 to 246A, 805, 854, and 861 of this title] shall apply to dividends received or accrued after  December 31, 1987 , in taxable years ending after such date. \n \n “(2)   Amendments relating to limitations .— The amendments made by subsection (c) [amending sections 246 and 805 of this title] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  section 411(b)(2)(C)(iv) of Pub. L. 99–514  applicable, except as otherwise provided, to costs paid or incurred after  Dec. 31, 1986 , in taxable years ending after such date, see  section 411(c) of Pub. L. 99–514  set out as a note under  section 263 of this title .\nAmendment by  section 611(a)(1) of Pub. L. 99–514  applicable to dividends received or accrued after  Dec. 31, 1986 , in taxable years ending after such date, see  section 611(b) of Pub. L. 99–514 , set out as a note under  section 246 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 232(c) of Pub. L. 97–34 , set out as a note under  section 535 of this title .\nFor effective date of amendment by  section 1031(b)(2) of Pub. L. 94–455 , see  section 1031(c) of Pub. L. 94–455 , set out as a note set out under  section 904 of this title .\nFor effective date of amendment by section 1051(f)(1), (2) of  Pub. L. 94–455 , see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by section 1901(a)(34), (b)(1), (21) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nFor effective date of amendment by  section 1906(b)(3)(C)(ii) of Pub. L. 94–455 , see  section 1906(d) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years beginning after  Dec. 31, 1974 , see  section 305(c) of Pub. L. 94–12 , set out as a note under  section 535 of this title .\nPub. L. 91–172, title V, §\u202f504(d) ,  Dec. 30, 1969 ,  83 Stat. 633 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 381, 615, 617, 703, and 1016 of this title] shall apply with respect to exploration expenditures paid or incurred after  December 31, 1969 . \n \n “(2)   Presumption of election under section 617 .— For purposes of section 617 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], an election under section 615(e) of such Code, which is effective with respect to exploration expenditures paid or incurred before  January 1, 1970 , shall be treated as an election under section 617(a) of such Code with respect to exploration expenditures paid or incurred after  December 31, 1969 . The preceding sentence shall not apply to any taxpayer who notifies the Secretary of the Treasury or his delegate (at such time and in such manner as the Secretary or his delegate prescribes by regulations) that he does not desire his election under section 615(e) to be so treated.”\nPub. L. 90–364, title I, §\u202f103(f) ,  June 28, 1968 ,  82 Stat. 264 , provided that:  “Except as provided by section 104 [formerly set out as notes under sections 51 and 6154 of this title], the amendments made by this section [enacting section 6425, amending this section and sections 6020, 6154, 6651, 6655, 7203, and 7701, and repealing sections 6016 and 6074 of this title] shall apply with respect to taxable years beginning after  December 31, 1967 .”\nPub. L. 88–272, title II, §\u202f214(c) ,  Feb. 26, 1964 ,  78 Stat. 55 , provided that:  “The amendments made by subsections (a) [amending this section] and (b) [amending sections 244, 246, 804, and 809 of this title] shall apply with respect to dividends received in taxable years ending after  December 31, 1963 .”\nPub. L. 86–779, §\u202f3(c) ,  Sept. 14, 1960 ,  74 Stat. 998 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 861 of this title ] shall apply to dividends received after  December 31, 1959 , in taxable years ending after such date.”\nAmendment by  section 10(g) of Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .\nPub. L. 85–866, §\u202f57(d) ,  Sept. 2, 1958 ,  72 Stat. 1646 , provided that:  “The amendments made by this section [enacting sections 1242 and 1243 and amending this section and sections 165 and 246 of this title] shall apply with respect to taxable years beginning after the date of the enactment of this Act [ Sept. 2, 1958 ].”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'Section,  Aug. 16, 1954, ch. 736 ,  68A Stat. 73 ;  Pub. L. 88–272, title II, §\u202f214(b)(1) ,  Feb. 26, 1964 ,  78 Stat. 55 ;  Pub. L. 95–600, title III, §\u202f301(b)(3) ,  Nov. 6, 1978 ,  92 Stat. 2820 ;  Pub. L. 99–514, title VI, §\u202f611(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2249 ;  Pub. L. 100–203, title X, §\u202f10221(a)(2) ,  Dec. 22, 1987 ,  101 Stat. 1330–408 ;  Pub. L. 100–647, title II, §\u202f2004(i)(2) ,  Nov. 10, 1988 ,  102 Stat. 3603 , allowed to corporations as a deduction a percentage of the amount received as dividends on the preferred stock of a public utility.\nRepeal not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , repeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'In the case of dividends received by a corporation from a qualified 10-percent owned foreign corporation, there shall be allowed as a deduction an amount equal to the percent (specified in section 243 for the taxable year) of the U.S.-source portion of such dividends.\nFor purposes of this subsection, the term “qualified 10-percent owned foreign corporation” means any foreign corporation (other than a passive foreign investment company) if at least 10 percent of the stock of such corporation (by vote and value) is owned by the taxpayer.\nIf the 1st day on which the requirements of paragraph (2) are met with respect to any foreign corporation is in a taxable year of such corporation beginning after  December 31, 1986 , the post-1986 undistributed earnings and the post-1986 undistributed U.S. earnings of such corporation shall be determined by only taking into account periods beginning on and after the 1st day of the 1st taxable year in which such requirements are met.\nEarnings and profits of any qualified 10-percent owned foreign corporation for any taxable year shall not be taken into account under this subsection if the deduction provided by subsection (b) would be allowable with respect to dividends paid out of such earnings and profits.\nNo credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to the United States-source portion of any dividend received by a corporation from a qualified 10-percent-owned foreign corporation.\nFor purposes of section 904, the U.S.-source portion of any dividend received by a corporation from a qualified 10-percent owned foreign corporation shall be treated as from sources in the United States.\nFor purposes of this subsection, the term “dividend” does not include any amount treated as a dividend under section 1248.\nRegulated investment companies and real estate investment trusts shall not be treated as domestic corporations for purposes of paragraph (5)(B).\nIn the case of dividends described in paragraph (2) received from a foreign corporation by a domestic corporation which, for its taxable year in which such dividends are received, owns (directly or indirectly) all of the outstanding stock of such foreign corporation, there shall be allowed as a deduction (in lieu of the deduction provided by subsection (a)) an amount equal to 100 percent of such dividends.\nNo deduction shall be allowable under subsection (a) or (b) with respect to any dividend which is distributed out of earnings and profits of a corporation accumulated while such corporation was a FSC.\nThe terms “foreign trade income” and “exempt foreign trade income” have the respective meanings given such terms by section 923.\nThe term “effectively connected income” means any income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States and is subject to tax under this chapter. Such term shall not include any foreign trade income.\nThe term “FSC” has the meaning given such term by section 922.\nAny reference in this subsection to section 922, 923, or 927 shall be treated as a reference to such section as in effect before its repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000.\nSection 1562, referred to in subsec. (b)(3), was repealed by  Pub. L. 91–172, title IV, §\u202f401(a)(2) ,  Dec. 30, 1969 ,  83 Stat. 600 .\nThe FSC Repeal and Extraterritorial Income Exclusion Act of 2000, referred to in subsec. (c)(5), is  Pub. L. 106–519 ,  Nov. 15, 2000 ,  114 Stat. 2423 . For complete classification of this Act to the Code, see Short Title of 2000 Amendments note set out under  section 1 of this title  and Tables.\n2017—Subsec. (a)(4).  Pub. L. 115–97, §\u202f14301(c)(2) , amended par. (4) generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘post-1986 undistributed earnings’ has the meaning given to such term by section 902(c)(1).”\nSubsec. (a)(10).  Pub. L. 115–97, §\u202f14301(c)(3) , which directed amendment of subsec. (a)(10)(C) by substituting “907 and 960” for “902, 907, and 960”, was executed by making the substitution in concluding provisions of subsec. (a)(10) to reflect the probable intent of Congress.\nSubsec. (c)(1)(B).  Pub. L. 115–97, §\u202f13002(b) , substituted “50 percent” for “70 percent” and “65 percent” for “80 percent”.\n2015—Subsec. (a)(12).  Pub. L. 114–113  added par. (12).\n2007—Subsec. (c)(4)(C).  Pub. L. 110–172, §\u202f11(g)(3) , added subpar. (C).\nSubsec. (c)(5).  Pub. L. 110–172, §\u202f11(g)(4) , added par. (5).\n2004—Subsec. (a)(2).  Pub. L. 108–357  struck out “foreign personal holding company or” after “(other than a”.\n1989—Subsec. (a)(8).  Pub. L. 101–239  made clarifying amendment to directory language of  Pub. L. 100–647, §\u202f1012 ( l )(2)(A), see 1988 Amendment note below.\n1988—Subsec. (a)(8).  Pub. L. 100–647, §\u202f1012 ( l )(2)(A), as amended by  Pub. L. 101–239 , substituted “Disallowance of foreign tax credit” for “Coordination with section 902” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a dividend received by a corporation from a qualified 10-percent owned foreign corporation, no credit shall be allowed under section 901 for any taxes treated as paid under section 902 with respect to the U.S.-source portion of such dividend.”\nSubsec. (a)(10), (11).  Pub. L. 100–647, §\u202f1012 ( l )(2)(B), (3), added pars. (10) and (11).\nSubsec. (c).  Pub. L. 100–647, §\u202f1012(bb)(9)(A) , amended subsec. (c) generally, revising and restating provisions of pars. (1) to (4).\nSubsec. (d).  Pub. L. 100–647, §\u202f1006(e)(16) , struck out subsec. (d) which read as follows: “ Property distributions .—For purposes of this section, the amount of any distribution of property other than money shall be the amount determined by applying section 301(b)(1)(B).”\n1987—Subsec. (c)(1)(B).  Pub. L. 100–203  substituted “70 percent (80 percent in the case of dividends from a 20-percent owned corporation as defined in section 243(c)(2))” for “85 percent”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1226(a) , in amending subsec. (a) generally, substituted “Dividends from 10-percent owned foreign corporations” for “General rule” as heading, and in text substituted provisions set out in nine numbered paragraphs allowing for deduction for dividends received from certain foreign corporations qualifying as “10-percent owned foreign corporations” for former provisions which directed that, in the case of dividends received from a foreign corporation (other than a foreign personal holding company) which was subject to taxation under this chapter, if, for an uninterrupted period of not less than 36 months ending with the close of such foreign corporation’s taxable year in which such dividends were paid (or, if the corporation had not been in existence for 36 months at the close of such taxable year, for the period the foreign corporation had been in existence as of the close of such taxable year) such foreign corporation had been engaged in trade or business within the United States and if 50 percent or more of the gross income of such corporation from all sources for such period was effectively connected with the conduct of a trade or business within the United States, there was allowed as a deduction in the case of a corporation a percentage of dividends received.\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f1876(d)(1)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of a domestic corporation, there shall be allowed as a deduction an amount equal to 100 percent of any dividend received by such corporation from another corporation which is distributed out of earnings and profits attributable to foreign trade income for a period during which such other corporation was a FSC. The deduction allowable under the preceding sentence with respect to any dividend shall be in lieu of any deduction allowable under subsection (a) or (b) with respect to such dividend.”\nSubsec. (c)(3).  Pub. L. 99–514, §\u202f1876(j) , added par. (3). Former par. (3) redesignated (4).\nPub. L. 99–514, §\u202f1876(d)(1)(B) , inserted “For purposes of this subsection, the term ‘qualified interest and carrying charges’ means any interest or carrying charges (as defined in section 927(d)(1)) derived from a transaction which results in foreign trade income.”\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f1876(j) , redesignated former par. (3) as (4).\n1984—Subsec. (c).  Pub. L. 98–369  added subsec. (c), redesignated former subsec. (c) as (d), and substituted therein “this section” for “subsections (a) and (b)”.\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f104(d) , (e)(2), substituted “and if 50 percent or more of the gross income of such corporation from all sources for such period is effectively connected with the conduct of a trade or business within the United States” for “and has derived 50 percent or more of its gross income from sources within the United States” in provisions preceding par. (1), “which is effectively connected with the conduct of a trade or business within the United States” for “from sources within the United States” in par. (1), “,\u2000which is effectively connected with the conduct of a trade or business within the United States,” for “from sources within the United States” in par. (2), and inserted provisions following par. (2).\nSubsecs. (b), (c).  Pub. L. 89–809, §\u202f104(e)(1) , (3), added subsec. (b), redesignated former subsec. (b) as (c), and substituted therein “subsections (a) and (b)” for “subsection (a)”.\n1962—Subsec. (b).  Pub. L. 87–834  designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).\nAmendment by  section 13002(b) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13002(f) of Pub. L. 115–97 , set out as a note under  section 243 of this title .\nAmendment by section 14301(c)(2), (3) of  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f326(b) ,  Dec. 18, 2015 ,  129 Stat. 3104 , provided that:  “The amendment made by this section [amending this section] shall apply to dividends received from regulated investment companies and real estate investment trusts on or after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1012(bb)(9)(B) ,  Nov. 10, 1988 ,  102 Stat. 3537 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply as if included in the provision of the Tax Reform Act of 1984 [ Pub. L. 98–369, div. A ] to which it relates.”\nAmendment by sections 1006(e)(16) and 1012( l )(2), (3) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to dividends received or accrued after  Dec. 31, 1987 , in taxable years ending after such date, see  section 10221(e)(1) of Pub. L. 100–203 , set out as a note under  section 243 of this title .\nPub. L. 99–514, title XII, §\u202f1226(c)(1) ,  Oct. 22, 1986 ,  100 Stat. 2560 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions out of earnings and profits for taxable years beginning after  December 31, 1986 .”\nAmendment by section 1876(d)(1), (j) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title VIII, §\u202f805(a) ,  July 18, 1984 ,  98 Stat. 1000 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1876(i), ( o ), (p)(4),  Oct. 22, 1986 ,  100 Stat. 2095 , 2900–2902, provided that: \n “(1)   In general.— Except as provided in this subsection, the amendments made by this title [enacting sections 921 to 927 of this title, amending this section and sections 246, 274, 275, 441, 901, 904, 906, 934, 936, 951, 956, 992, 993, 995, 996, 999, 1248, 6011, 6072, 6501, 6686, and 7651 of this title, and enacting provisions set out as notes under sections 921 and 991 of this title] shall apply to transactions after  December 31, 1984 , in taxable years ending after such date. \n \n “(2)   Special rule for certain contracts .— To the extent provided in regulations prescribed by the Secretary of the Treasury or his delegate, any event or activity required to occur or required to be performed, before  January 1, 1985 , by section 924(c) or (d) or 925(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be treated as meeting the requirements of such section if such event or activity is with respect to— “(A)  any lease of more than 3 years duration which was entered into before  January 1, 1985 , \n \n “(B)  any contract with respect to which the taxpayer uses the completed contract method of accounting which was entered into before  January 1, 1985 , or \n \n “(C)  in the case of any contract other than a lease or contract described in subparagraph (A) or (B), any contract which was entered into before  January 1, 1985 ; except that this subparagraph shall only apply to the first 3 taxable years of the FSC ending after  January 1, 1985 , or such later taxable years as the Secretary of the Treasury or his delegate may prescribe. \n \n \n “(3)   Section  801(d)(10).— The amendment made by section 801(d)(10) [amending  section 996 of this title ] shall apply to distributions on or after  June 22, 1984 . \n \n “(4)   Section  803.— The amendments made by section 803 [amending  section 441 of this title ] shall apply to taxable years beginning after  December 31, 1984 .”\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 87–834  applicable to distributions made after  Dec. 31, 1962 , see  section 5(d) of Pub. L. 87–834 , set out as a note under  section 301 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f326(c) ,  Dec. 18, 2015 ,  129 Stat. 3104 , provided that:  “Nothing contained in this section [amending this section and enacting provisions set out as a note above] or the amendments made by this section shall be construed to create any inference with respect to the proper treatment under section 245 of the Internal Revenue Code of 1986 of dividends received from regulated investment companies or real estate investment trusts before the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 100–647, title I, §\u202f1006(b)(1) ,  Nov. 10, 1988 ,  102 Stat. 3393 , provided that:  \n “In the case of dividends received or accrued during 1987— \n “(A)  subparagraph (B) of section 245(c)(1) of the 1986 Code shall be applied by substituting ‘80 percent’ for the percentage specified therein, and \n \n “(B)  subparagraph (B) of section 861(a)(2) of the 1986 Code shall be applied by substituting ‘ 100 ⁄ 80 ths’ for the fraction specified therein.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'In the case of any dividend received from a specified 10-percent owned foreign corporation by a domestic corporation which is a United States shareholder with respect to such foreign corporation, there shall be allowed as a deduction an amount equal to the foreign-source portion of such dividend.\nThe term “specified 10-percent owned foreign corporation” means any foreign corporation with respect to which any domestic corporation is a United States shareholder with respect to such corporation.\nSuch term shall not include any corporation which is a passive foreign investment company (as defined in section 1297) with respect to the shareholder and which is not a controlled foreign corporation.\nNo credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to any dividend for which a deduction is allowed under this section.\nNo deduction shall be allowed under this chapter for any tax for which credit is not allowable under section 901 by reason of paragraph (1) (determined by treating the taxpayer as having elected the benefits of subpart A of part III of subchapter N).\nSubsection (a) shall not apply to any dividend received by a United States shareholder from a controlled foreign corporation if the dividend is a hybrid dividend.\nThe rules of subsection (d) shall apply to any hybrid dividend received by, or any amount included under paragraph (2) in the gross income of, a United States shareholder.\nAny amount which is treated as a dividend under section 1291(d)(2)(B) shall not be treated as a dividend for purposes of this section.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section, including regulations for the treatment of United States shareholders owning stock of a specified 10 percent\u202f 1 1 \u202fSo in original. Probably should be “10-percent”.  owned foreign corporation through a partnership.\nPub. L. 115–97, title I, §\u202f14101(f) ,  Dec. 22, 2017 ,  131 Stat. 2192 , provided that:  “The amendments made by this section [enacting this section and amending sections 246, 904, 951, 957, and 1059 of this title] shall apply to distributions made after (and, in the case of the amendments made by subsection (d) [amending  section 904 of this title ], deductions with respect to taxable years ending after)  December 31, 2017 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'The deductions allowed by sections 243\u202f 1 1 \u202fSo in original. Probably should be followed by a comma.  245, and 245A shall not apply to any dividend from a corporation which, for the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is a corporation exempt from tax under section 501 (relating to certain charitable, etc., organizations) or section 521 (relating to farmers’ cooperative associations).\nTo the extent that paragraph (1) does not apply to any dividend by reason of subparagraph (A) or (B) of this paragraph, the requirement contained in section 243(a) that the corporation paying the dividend be subject to taxation under this chapter shall not apply.\nThe term “FHLB” means any Federal Home Loan Bank.\nThe term “FHLMC” means the Federal Home Loan Mortgage Corporation.\nThe taxable year of an FHLB shall, except as provided in regulations prescribed by the Secretary, be treated as the calendar year.\nExcept as provided in paragraph (2), the aggregate amount of the deductions allowed by section 243(a)(1), subsection\u202f 2 2 \u202fSo in original.  (a) and\u202f 2  (b) of section 245, and section 250 shall not exceed the percentage determined under paragraph (3) of the taxable income computed without regard to the deductions allowed by sections 172, 199A, 243(a)(1), subsection\u202f 2  (a) and\u202f 2  (b) of section 245, and 250, without regard to any adjustment under section 1059, and without regard to any capital loss carryback to the taxable year under section 1212(a)(1).\nParagraph (1) shall not apply for any taxable year for which there is a net operating loss (as determined under section 172).\nNo deduction shall be allowed under section 243 in respect of a dividend from a corporation which is a DISC or former DISC (as defined in section 992(a)) to the extent such dividend is paid out of the corporation’s accumulated DISC income or previously taxed income, or is a deemed distribution pursuant to section 995(b)(1).\n2018—Subsec. (e).  Pub. L. 115–141  struck out subsec. (e). Prior to amendment, text read as follows: “No deduction shall be allowed under section 243(a) with respect to a dividend received pursuant to a distribution described in section 936(h)(4).”\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f14101(c)(1) , substituted “245, and 245A” for “and 245”.\nSubsec. (b)(1).  Pub. L. 115–97, §\u202f14202(b)(2)(B) , which directed amendment of par. (1) by substituting “subsection (a) and (b) of section 245, and 250” for “and subsection (a) and (b) of section 245” the second place appearing, was executed by making the substitution for “and subsection (a) or (b) of section 245”, to reflect the probable intent of Congress.\nPub. L. 115–97, §\u202f14202(b)(2)(A) , which directed amendment of par. (1) by substituting “,\u2000subsection (a) and (b) of section 245, and section 250” for “and subsection (a) and (b) of section 245” the first place appearing, was executed by making the substitution for “and subsection (a) or (b) of section 245”, to reflect the probable intent of Congress.\nPub. L. 115–97, §\u202f13305(b)(1) , struck out “199,” after “sections 172,”.\nPub. L. 115–97, §\u202f11011(d)(2) , which directed insertion of “199A,” before “243(a)(1)”, was executed by making the insertion before “243(a)(1)” the second place appearing, to reflect the probable intent of Congress.\nSubsec. (b)(3)(A).  Pub. L. 115–97, §\u202f13002(c)(1) , substituted “65 percent” for “80 percent”.\nSubsec. (b)(3)(B).  Pub. L. 115–97, §\u202f13002(c)(2) , substituted “50 percent” for “70 percent”.\nSubsec. (c)(1).  Pub. L. 115–97, §\u202f14101(b)(1) , substituted “245, or 245A” for “or 245” in introductory provisions.\nSubsec. (c)(5).  Pub. L. 115–97, §\u202f14101(b)(2) , added par. (5).\n2014—Subsec. (a)(1).  Pub. L. 113–295, §\u202f221(a)(41)(E)(i) , struck out “,\u2000244,” after “sections 243”.\nSubsec. (b)(1).  Pub. L. 113–295, §\u202f221(a)(41)(E)(ii) , substituted “section 243(a)(1)” for “sections 243(a)(1), 244(a),” and “and subsection (a) or (b) of section 245,” for “244(a), subsection (a) or (b) of section 245, and 247,”.\nSubsec. (c)(1).  Pub. L. 113–295, §\u202f221(a)(41)(E)(iii) , struck out “,\u2000244,” after “section 243” in introductory provisions.\n2005—Subsec. (c)(3)(B).  Pub. L. 109–135  substituted “paragraph (3) of section 1223” for “paragraph (4) of section 1223”.\n2004—Subsec. (b)(1).  Pub. L. 108–357, §\u202f102(d)(4) , inserted “199,” after “172,”.\nSubsec. (c)(1)(A).  Pub. L. 108–311, §\u202f406(f)(1) , substituted “91-day period” for “90-day period”.\nSubsec. (c)(2)(B).  Pub. L. 108–311, §\u202f406(f)(2) , substituted “181-day period” for “180-day period” and “91-day period” for “90-day period”.\nSubsec. (c)(4).  Pub. L. 108–357, §\u202f888(d) , inserted “,\u2000other than a qualified covered call option to which section 1092(f) applies” before period at end of concluding provisions.\n1997—Subsec. (c)(1)(A).  Pub. L. 105–34, §\u202f1015(a) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is held by the taxpayer for 45 days or less, or”.\nSubsec. (c)(2).  Pub. L. 105–34, §\u202f1015(b)(1) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “In the case of any stock having preference in dividends, the holding period specified in paragraph (1)(A) shall be 90 days in lieu of 45 days if the taxpayer receives dividends with respect to such stock which are attributable to a period or periods aggregating in excess of 366 days.”\nSubsec. (c)(3).  Pub. L. 105–34, §\u202f1015(b)(2) , inserted “and” at end of subpar. (A), redesignated subpar. (C) as (B), and struck out former subpar. (B) which read as follows: “there shall not be taken into account any day which is more than 45 days (or 90 days in the case of stock to which paragraph (2) applies) after the date on which such share becomes ex-dividend, and”.\n1996—Subsec. (f).  Pub. L. 104–188  struck out subsec. (f) which provided a cross reference to  section 596 of this title  for special rule relating to mutual savings banks, etc., to which section 593 applies.\n1988—Subsec. (c)(1)(A).  Pub. L. 100–647  substituted “which” for “Which”.\n1987—Subsec. (b)(1).  Pub. L. 100–203, §\u202f10221(c)(1)(A) , substituted “the percentage determined under paragraph (3)” for “80 percent”.\nSubsec. (b)(3).  Pub. L. 100–203, §\u202f10221(c)(1)(B) , added par. (3).\n1986—Subsec. (a)(2)(B).  Pub. L. 99–514, §\u202f1812(d)(1)(A) , substituted “In” for “For purposes of subparagraph (A), in” in introductory provisions and substituted cl. (i)(II) for former cl. (i)(II) which read as follows: “which were not taken into account under subparagraph (A), bears to”.\nSubsec. (a)(2)(C), (D).  Pub. L. 99–514, §\u202f1812(d)(1)(B) , (C), added subpar. (C), redesignated former subpar. (C) as (D), and added cl. (iv) to subpar. (D).\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f611(a)(3) , substituted “80 percent” for “85 percent”.\nSubsec. (c)(1)(A).  Pub. L. 99–514, §\u202f1804(b)(1)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is sold or otherwise disposed of in any case in which the taxpayer has held such share for 45 days or less, or”.\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f1804(b)(1)(B) , substituted “determined for purposes of this subsection” for “determined under paragraph (3)”.\nSubsec. (e).  Pub. L. 99–514, §\u202f1275(a)(2)(B) , struck out “or 934(e)(3)” after “936(h)(4)”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f177(b) , amended subsec. (a) generally, designating existing provisions as par. (1) and adding par. (2).\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f801(b)(2)(A) , substituted “subsection (a) or (b) of section 245” for “245” in two places.\nPub. L. 98–369, §\u202f53(d)(2) , substituted “without regard to any adjustment under section 1059, and without regard” for “and without regard”.\nSubsec. (c)(1)(A).  Pub. L. 98–369, §\u202f53(b)(1) , substituted “45” for “15”.\nSubsec. (c)(1)(B).  Pub. L. 98–369, §\u202f53(b)(3) , substituted “to make related payments with respect to positions in substantially similar or related property” for “to make corresponding payments with respect to substantially identical stock or securities”.\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f53(b)(1) , substituted “45” for “15”.\nSubsec. (c)(3).  Pub. L. 98–369, §\u202f53(b)(4) , struck out last sentence which directed that the holding periods determined under the preceding provisions of this paragraph be appropriately reduced (in the manner provided in regulations prescribed by the Secretary) for any period (during such holding periods) in which the taxpayer had an option to sell, was under a contractual obligation to sell, or had made (and not closed) a short sale of, substantially identical stock or securities.\nSubsec. (c)(3)(B).  Pub. L. 98–369, §\u202f53(b)(1) , substituted “45” for “15”.\nSubsec. (c)(4).  Pub. L. 98–369, §\u202f53(b)(2) , added par. (4).\n1982—Subsecs. (e), (f).  Pub. L. 97–248  added subsec. (e) and redesignated former subsec. (e) as (f).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1051(f)(3) , struck out references to dividends from corporations organized under the China Trade Act, 1922, and corporations to which section 931 (relating to income from sources within possessions of the United States) applies.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1971—Subsecs. (d), (e).  Pub. L. 92–178  added subsec. (d) and redesignated former subsec. (d) as (e).\n1969—Subsec. (b)(1).  Pub. L. 91–172, §\u202f512(f)(3) , substituted “and 247, and without regard to any capital loss carryback to the taxable year under section 1212(a)(1)” for “and 247”.\nSubsec. (d).  Pub. L. 91–172, §\u202f434(b)(1) , added subsec. (d).\n1964—Subsec. (b).  Pub. L. 88–272  substituted “243(a)(1), 244(a)” for “243(a), 244” wherever appearing.\n1958—Subsec. (b)(1).  Pub. L. 85–866, §\u202f57(c)(2) , substituted “243(a)” for “243” wherever appearing.\nSubsec. (c).  Pub. L. 85–866, §\u202f18(a) , added subsec. (c).\nAmendment by  section 11011(d)(2) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as a note under  section 62 of this title .\nAmendment by  section 13002(c) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13002(f) of Pub. L. 115–97 , set out as a note under  section 243 of this title .\nAmendment by  section 13305(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by section 14101(b), (c)(1) of  Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , see  section 14101(f) of Pub. L. 115–97 , set out as an Effective Date note under  section 245A of this title .\nAmendment by  section 14202(b)(2) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 14202(c) of Pub. L. 115–97 , set out as a note under  section 172 of this title .\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79  et seq.) before its repeal, see  section 402(m) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendment by  section 102(d)(4) of Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nPub. L. 108–357, title VIII, §\u202f888(e) ,  Oct. 22, 2004 ,  118 Stat. 1643 , provided that:  “The amendments made by this section [amending this section and sections 1092 and 1258 of this title] shall apply to positions established on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 108–311  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 406(h) of Pub. L. 108–311 , set out as a note under  section 55 of this title .\nPub. L. 105–34, title X, §\u202f1015(c) ,  Aug. 5, 1997 ,  111 Stat. 922 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to dividends received or accrued after the 30th day after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Transitional rule .— The amendments made by this section shall not apply to dividends received or accrued during the 2-year period beginning on the date of the enactment of this Act if— “(A)  the dividend is paid with respect to stock held by the taxpayer on  June 8, 1997 , and all times thereafter until the dividend is received, \n \n “(B)  such stock is continuously subject to a position described in section 246(c)(4) of the Internal Revenue Code of 1986 on  June 8, 1997 , and all times thereafter until the dividend is received, and \n \n “(C)  such stock and position are clearly identified in the taxpayer’s records within 30 days after the date of the enactment of this Act. \n \n\n Stock shall not be treated as meeting the requirement of subparagraph (B) if the position is sold, closed, or otherwise terminated and reestablished.”\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10221(e)(2) of Pub. L. 100–203 , as amended, set out as a note under  section 243 of this title .\nPub. L. 99–514, title VI, §\u202f611(b) ,  Oct. 22, 1986 ,  100 Stat. 2249 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section and sections 243, 244, 246A, and 805 of this title] shall apply to dividends received or accrued after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Amendment relating to limitation on deductions .— The amendment made by subsection (a) to section 246(b) of the Internal Revenue Code of 1986 shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1275(a)(2)(B) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(b)(1)(C) ,  Oct. 22, 1986 ,  100 Stat. 2798 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to stock acquired after  March 1, 1986 .”\nAmendment by  section 1812(d)(1) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 53(d)(2) of Pub. L. 98–369  applicable to distributions after  Mar. 1, 1984 , in taxable years ending after such date, and amendment of subsec. (c) of this section by  section 53(b) of Pub. L. 98–369 , applicable to stock acquired after  July 18, 1984 , in taxable years ending after such date, see section 53(e)(1), (2) of  Pub. L. 98–369 , set out as an Effective Date note under  section 1059 of this title .\nAmendment by  section 177(b) of Pub. L. 98–369 , effective  Jan. 1, 1985 , see  section 177(d) of Pub. L. 98–369 , set out as a note under  section 172 of this title .\nAmendment by  section 801(b)(2)(A) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nPub. L. 97–248, title II, §\u202f213(e) ,  Sept. 3, 1982 ,  96 Stat. 466 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 367, 934, and [former] 936 of this title] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(2)   Certain sales made after  july 1, 1982 .— Paragraph (6) of [former] section 936(h) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and so much of section 934 to which such paragraph applies by reason of section 934(e)(4) of such Code, shall apply to taxable years ending after  July 1, 1982 . \n \n “(3)   Certain transfers of intangibles made after  august 14, 1982 .— Subsection (d) [amending  section 367 of this title ] shall apply to taxable years ending after  August 14, 1982 .”\nFor effective date of amendment by  section 1051(f)(3) of Pub. L. 94–455 , see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by  section 1906(b)(13)(A) of Pub. L. 94–455  effective  Feb. 1, 1977 , see  section 1906(d)(1) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before  Jan. 1, 1972 , see  section 507 of Pub. L. 92–178 , set out as an Effective Date note under  section 991 of this title .\nAmendment by  section 512(f)(3) of Pub. L. 91–172  applicable with respect to net capital losses sustained in taxable years beginning after  Dec. 31, 1969 , see  section 512(g) of Pub. L. 91–172 , set out as a note under  section 1212 of this title .\nPub. L. 91–172, title IV, §\u202f434(c) ,  Dec. 30, 1969 ,  83 Stat. 625 , provided that:  “The amendments made by this section [enacting  section 596 of this title  and amending this section] shall apply to taxable years beginning after  July 11, 1969 .”\nAmendment by  Pub. L. 88–272  applicable to dividends received in taxable years ending after  Dec. 31, 1963 , see  section 214(c) of Pub. L. 88–272 , set out as a note under  section 243 of this title .\nPub. L. 85–866, title I, §\u202f18(b) ,  Sept. 2, 1958 ,  72 Stat. 1615 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  December 31, 1957 , but only with respect to shares of stock acquired or short sales made after  December 31, 1957 .”\nAmendment by  section 57(c)(2) of Pub. L. 85–866  applicable with respect to taxable years beginning after  Sept. 2, 1958 , see  section 57(d) of Pub. L. 85–866 , set out as a note under  section 243 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'The term “debt financed portfolio stock” means any portfolio stock if at some time during the base period there is portfolio indebtedness with respect to such stock.\nIf, as of the beginning of the ex-dividend date, the taxpayer owns stock of any bank or bank holding company having a value equal to at least 80 percent of the total value of the stock of such bank or bank holding company, for purposes of paragraph (2)(A)(i), the taxpayer shall be treated as owning any stock of such bank or bank holding company which the taxpayer has an option to acquire.\nThe term “bank” has the meaning given such term by section 581.\nThe term “bank holding company” means a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956).\nFor purposes of determining whether the requirements of subparagraph (A) or (B) of paragraph (2) or of subparagraph (A) of paragraph (3) are met, stock described in section 1504(a)(4) shall not be taken into account.\nIn the case of any stock which was not held by the taxpayer throughout the base period, paragraph (1) shall be applied as if the base period consisted only of that portion of the base period during which the stock was held by the taxpayer.\nThe term “portfolio indebtedness” means any indebtedness directly attributable to investment in the portfolio stock.\nFor purposes of subparagraph (A), any amount received from a short sale shall be treated as indebtedness for the period beginning on the day on which such amount is received and ending on the day the short sale is closed.\nUnder regulations prescribed by the Secretary, any reduction under this section in the amount allowable as a deduction under section 243 or 245 with respect to any dividend shall not exceed the amount of any interest deduction (including any deductible short sale expense) allocable to such dividend.\nThe regulations prescribed for purposes of this section under section 7701(f) shall include regulations providing for the disallowance of interest deductions or other appropriate treatment (in lieu of reducing the dividend received deduction) where the obligor of the indebtedness is a person other than the person receiving the dividend.\nThe Small Business Investment Act of 1958, referred to in subsec. (b)(2), is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under  section 661 of Title 15  and Tables.\nSection 2(a) of the Bank Holding Company Act of 1956, referred to in subsec. (c)(3)(B)(ii), is classified to  section 1841(a) of Title 12 , Banks and Banking.\n2018—Subsec. (b)(1).  Pub. L. 115–141  struck out “without regard to section 243(d)(4)” after “section 243(b)”.\n2017—Subsec. (a)(1).  Pub. L. 115–97  substituted “50 percent” for “70 percent” and “65 percent” for “80 percent”.\n2014—Subsecs. (a), (e).  Pub. L. 113–295  struck out “,\u2000244,” after “section 243”.\n2004—Subsec. (b)(1).  Pub. L. 108–311  substituted “section 243(d)(4)” for “section 243(c)(4)”.\n1988—Subsec. (a).  Pub. L. 100–647  struck out at end “The preceding sentence shall be applied before any determination of a ratio under paragraph (1) or (2) of section 245(a).”\n1987—Subsec. (a)(1).  Pub. L. 100–203  substituted “70 percent (80 percent in the case of any dividend from a 20-percent owned corporation as defined in section 243(c)(2))” for “80 percent”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1804(a) , substituted “or 245(a)” for “or 245” and inserted “The preceding sentence shall be applied before any determination of a ratio under paragraph (1) or (2) of section 245(a).”\nSubsec. (a)(1).  Pub. L. 99–514, §\u202f611(a)(4) , substituted “80 percent” for “85 percent”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13002(f) of Pub. L. 115–97 , set out as a note under  section 243 of this title .\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to dividends received or accrued after  Dec. 31, 1987 , in taxable years ending after such date, see  section 10221(e)(1) of Pub. L. 100–203 , set out as a note under  section 243 of this title .\nAmendment by  section 611(a)(4) of Pub. L. 99–514  applicable to dividends received or accrued after  Dec. 31, 1986 , in taxable years ending after such date, see  section 611(b) of Pub. L. 99–514 , set out as a note under  section 246 of this title .\nAmendment by  section 1804(a) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f51(c) ,  July 18, 1984 ,  98 Stat. 564 , provided that:  “The amendments made by this section [enacting this section] shall apply with respect to stock the holding period for which begins after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'In the case of a Native Corporation, there shall be allowed a deduction for any contributions made by such Native Corporation to a Settlement Trust (regardless of whether an election under section 646 is in effect for such Settlement Trust) for which the Native Corporation has made an annual election under subsection (e).\nSubject to paragraph (2), the deduction allowed under subsection (a) for any taxable year shall not exceed the taxable income (as determined without regard to such deduction) of the Native Corporation for the taxable year in which the contribution was made.\nIf the aggregate amount of contributions described in subsection (a) for any taxable year exceeds the limitation under paragraph (1), such excess shall be treated as a contribution described in subsection (a) in each of the 15 succeeding years in order of time.\nFor purposes of this section, the terms “Native Corporation” and “Settlement Trust” have the same meaning given such terms under section 646(h).\nFor each taxable year, a Native Corporation may elect to have this section apply for such taxable year on the income tax return or an amendment or supplement to the return of the Native Corporation, with such election to have effect solely for such taxable year.\nAny election made by a Native Corporation pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Native Corporation.\nNotwithstanding section 646(d)(2), in the case of a Native Corporation which claims a deduction under this section for any taxable year, the earnings and profits of such Native Corporation for such taxable year shall be reduced by the amount of such deduction.\nNo gain or loss shall be recognized by the Native Corporation with respect to a contribution of property for which a deduction is allowed under this section.\nSubject to subsection (g), a Settlement Trust shall include in income the amount of any deduction allowed under this section in the taxable year in which the Settlement Trust actually receives such contribution.\nThe holding period under section 1223 of the Settlement Trust shall include the period the property was held by the Native Corporation.\nNo deduction shall be allowed under this section with respect to any contributions made to a Settlement Trust which are in violation of subsection (a)(2) or (c)(2) of section 39 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1629e ).\nIn the case of a contribution which consists of property other than cash, a Settlement Trust may elect to defer recognition of any income related to such property until the sale or exchange of such property, in whole or in part, by the Settlement Trust.\nFor each taxable year, a Settlement Trust may elect to apply this subsection for any property described in paragraph (1) which was contributed during such year. Any property to which the election applies shall be identified and described with reasonable particularity on the income tax return or an amendment or supplement to the return of the Settlement Trust, with such election to have effect solely for such taxable year.\nAny election made by a Settlement Trust pursuant to this subsection may be revoked pursuant to a timely filed amendment or supplement to the income tax return of such Settlement Trust.\nNotwithstanding section 6501(a), any amount described in subclause (III) of clause (i) may be assessed, or a proceeding in court with respect to such amount may be initiated without assessment, within 4 years after the date on which the return making the election under this subsection for such property was filed.\nA prior section 247,  Aug. 16, 1954, ch. 736 ,  68A Stat. 75 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(35) ,  Oct. 4, 1976 ,  90 Stat. 1770 ;  Pub. L. 95–600, title III, §\u202f301(b)(4) ,  Nov. 6, 1978 ,  92 Stat. 2820 ;  Pub. L. 101–508, title XI, §\u202f11801(c)(8)(C) ,  Nov. 5, 1990 ,  104 Stat. 1388–524 ;  Pub. L. 104–188, title I, §\u202f1704(t)(49) ,  Aug. 20, 1996 ,  110 Stat. 1890 ;  Pub. L. 109–135, title IV, §\u202f402(a)(5) ,  Dec. 21, 2005 ,  119 Stat. 2610 , allowed to public utilities as a deduction a percentage of the amount of the lesser of dividends paid during the taxable year on its preferred stock or taxable income for the taxable year under certain conditions, prior to repeal by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(41)(A) ,  Dec. 19, 2014 ,  128 Stat. 4043 .\nPub. L. 115–97, title I, §\u202f13821(b)(3) ,  Dec. 22, 2017 ,  131 Stat. 2181 , provided that: \n “(A)   In general .— The amendments made by this subsection [enacting this section] shall apply to taxable years for which the period of limitation on refund or credit under section 6511 of the Internal Revenue Code of 1986 has not expired. \n \n “(B)   One-year waiver of statute of limitations .— If the period of limitation on a credit or refund resulting from the amendments made by paragraph (1) expires before the end of the 1-year period beginning on the date of the enactment of this Act [ Dec. 22, 2017 ], refund or credit of such overpayment (to the extent attributable to such amendments) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'The election provided by subsection (a) may be made for any taxable year but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). The period so elected shall be adhered to in computing the taxable income of the corporation for the taxable year for which the election is made and all subsequent taxable years.\n2014—Subsec. (c).  Pub. L. 113–295  struck out “beginning after  December 31, 1953 ,” after “any taxable year” and “The election shall apply only with respect to expenditures paid or incurred on or after  August 16, 1954 .” at end.\n2004—Subsec. (a).  Pub. L. 108–357  amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “The organizational expenditures of a corporation may, at the election of the corporation (made in accordance with regulations prescribed by the Secretary, be treated as deferred expenses. In computing taxable income, such deferred expenses shall be allowed as a deduction ratably over such period of not less than 60 months as may be selected by the corporation (beginning with the month in which the corporation begins business).”\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(36) , substituted “ August 16, 1954 ” for “the date of enactment of this title”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to amounts paid or incurred after  Oct. 22, 2004 , see  section 902(d) of Pub. L. 108–357 , set out as a note under  section 195 of this title .\nAmendment by  section 1901(a)(36) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1906(b)(13)(A) of Pub. L. 94–455  effective  Feb. 1, 1977 , see  section 1906(d)(1) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'No deduction shall be allowed to the issuing corporation for any premium paid or incurred upon the repurchase of a bond, debenture, note, or certificate or other evidence of indebtedness which is convertible into the stock of the issuing corporation, or a corporation in the same parent-subsidiary controlled group (within the meaning of section 1563(a)(1)) as the issuing corporation, to the extent the repurchase price exceeds an amount equal to the adjusted issue price plus a normal call premium on bonds or other evidences of indebtedness which are not convertible. The preceding sentence shall not apply to the extent that the corporation can demonstrate to the satisfaction of the Secretary that such excess is attributable to the cost of borrowing and is not attributable to the conversion feature.\nFor purposes of subsection (a), the adjusted issue price is the issue price (as defined in sections 1273(b) and 1274) increased by any amount of discount deducted before repurchase, or decreased by any amount of premium included in gross income before repurchase by the issuing corporation.\n2014—Subsec. (a).  Pub. L. 113–295, §\u202f220(i) , substituted “1563(a)(1))” for “1563(a)(1)”.\nSubsec. (b).  Pub. L. 113–295, §\u202f221(a)(43) , which directed amendment of subsec. (b)(1) by striking out “,\u2000in the case of bonds or other evidences of indebtedness issued after  February 28, 1913 ,” after “repurchase, or”, was executed by making the amendment in subsec. (b) to reflect the probable intent of Congress and the prior amendment by  Pub. L. 112–95, §\u202f1108(b) . See 2012 Amendment note below.\n2012—Subsec. (a).  Pub. L. 112–95, §\u202f1108(a) , substituted “,\u2000or a corporation in the same parent-subsidiary controlled group (within the meaning of section 1563(a)(1) as” for “,\u2000or a corporation in control of, or controlled by,”.\nSubsec. (b).  Pub. L. 112–95, §\u202f1108(b) , substituted “Adjusted issue price” for “Special rules” in heading and “For purposes of subsection (a),” for “For purposes of subsection (a)—” and par. (1) designation and heading, and “the adjusted issue price” for “The adjusted issue price”, and struck out par. (2), which defined “control” as having the meaning assigned to such term by section 368(c).\n1984—Subsec. (b)(1).  Pub. L. 98–369  substituted “sections 1273(b) and 1274” for “section 1232(b)”.\n1976—Subsec. (a).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  section 221(a)(43) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–95, title XI, §\u202f1108(c) ,  Feb. 14, 2012 ,  126 Stat. 154 , provided that:  “The amendments made by this section [amending this section] shall apply to repurchases after the date of the enactment of this Act [ Feb. 14, 2012 ].”\nAmendment by  Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  Pub. L. 94–455  effective  Feb. 1, 1977 , see  section 1906(d)(1) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nPub. L. 91–172, title IV, §\u202f414(c) ,  Dec. 30, 1969 ,  83 Stat. 613 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [enacting this section] shall apply to a convertible bond or other convertible evidence of indebtedness repurchased after  April 22, 1969 , other than such a bond or other evidence of indebtedness repurchased pursuant to a binding obligation incurred on or before  April 22, 1969 , to repurchase such bond or other evidence of indebtedness at a specified call premium, but no inference shall be drawn from the fact that section 249 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a) of this section) does not apply to the repurchase of such convertible bond or other convertible evidence of indebtedness.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL DEDUCTIONS FOR CORPORATIONS'},
  'content': 'The term “deemed tangible income return” means, with respect to any corporation, an amount equal to 10 percent of the corporation’s qualified business asset investment (as defined in section 951A(d), determined by substituting “deduction eligible income” for “tested income” in paragraph (2) thereof and without regard to whether the corporation is a controlled foreign corporation).\nFor purposes of subparagraph (A), the term “domestic oil and gas extraction income” means income described in section 907(c)(1), determined by substituting “within the United States” for “without the United States”.\nThe term “foreign use” means any use, consumption, or disposition which is not within the United States.\nIf a taxpayer sells property to another person (other than a related party) for further manufacture or other modification within the United States, such property shall not be treated as sold for a foreign use even if such other person subsequently uses such property for a foreign use.\nIf a taxpayer provides services to another person (other than a related party) located within the United States, such services shall not be treated as described in paragraph (4)(B) even if such other person uses such services in providing services which are so described.\nIf a service is provided to a related party who is not located in the United States, such service shall not be treated described\u202f 1 1 \u202fSo in original. Probably should be preceded by “as”.  in subparagraph (A)(ii)\u202f 2 2 \u202fSo in original. Probably should be “(B)(ii)”.  unless the taxpayer established to the satisfaction of the Secretary that such service is not substantially similar to services provided by such related party to persons located within the United States.\nFor purposes of this subsection, the terms “sold”, “sells”, and “sale” shall include any lease, license, exchange, or other disposition.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section.\nA prior section 250, added  Pub. L. 91–518, title IX, §\u202f901(a) ,  Oct. 30, 1970 ,  84 Stat. 1341 ; amended  Pub. L. 93–496, §\u202f12 ,  Oct. 28, 1974 ,  88 Stat. 1531 ;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 ;  Pub. L. 95–473, §\u202f2(a)(2)(C) ,  Oct. 17, 1978 ,  92 Stat. 1464 ;  Pub. L. 96–454, §\u202f3(b)(1) ,  Oct. 15, 1980 ,  94 Stat. 2012 ;  Pub. L. 97–261, §\u202f6(d)(3) ,  Sept. 20, 1982 ,  96 Stat. 1107 ;  Pub. L. 99–521, §\u202f4(3) ,  Oct. 22, 1986 ,  100 Stat. 2993 , related to certain payments to National Railroad Passenger Corporation, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11801(a)(15) ,  Nov. 5, 1990 ,  104 Stat. 1388–520 .\nSection applicable to taxable years beginning after  Dec. 31, 2017 , see  section 14202(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 172 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'In computing taxable income no deduction shall in any case be allowed in respect of the items specified in this part.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.\nFor purposes of subsection (a), in the case of an individual, any charge (including taxes thereon) for basic local telephone service with respect to the 1st telephone line provided to any residence of the taxpayer shall be treated as a personal expense.\n1988— Pub. L. 100–647  amended section generally. Prior to amendment, section read as follows: “Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.”\nPub. L. 100–647, title V, §\u202f5073(b) ,  Nov. 10, 1988 ,  102 Stat. 3682 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1988 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Notwithstanding subsection (a), and except as provided in subsection (i), regulations shall be prescribed by the Secretary under this subtitle corresponding to the regulations which granted the option to deduct as expenses intangible drilling and development costs in the case of oil and gas wells and which were recognized and approved by the Congress in House Concurrent Resolution 50, Seventy-ninth Congress. Such regulations shall also grant the option to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit (as defined in section 613(e)(2)) to the same extent and in the same manner as such expenses are deductible in the case of oil and gas wells. This subsection shall not apply with respect to any costs to which any deduction is allowed under section 59(e) or 291.\nIn the case of expenditures in connection with the rehabilitation of a unit of railroad rolling stock (except a locomotive) used by a domestic common carrier by railroad which would, but for this subsection, be properly chargeable to capital account, such expenditures, if during any 12-month period they do not exceed an amount equal to 20 percent of the basis of such unit in the hands of the taxpayer, shall, at the election of the taxpayer, be treated (notwithstanding subsection (a)) as deductible repairs under section 162 or 212. An election under this subsection shall be made for any taxable year at such time and in such manner as the Secretary prescribes by regulations. An election may not be made under this subsection for any taxable year to which an election under subsection (e) applies to railroad rolling stock (other than locomotives).\nIn the case of a domestic common carrier by rail (including a railroad switching or terminal company) which uses the retirement-replacement method of accounting for depreciation of its railroad track, expenditures for acquiring and installing replacement ties of any material (and fastenings related to such ties) shall be accorded the same tax accounting treatment as expenditures for replacement ties of wood (and fastenings related to such ties).\nNo deduction shall be allowed for interest and carrying charges properly allocable to personal property which is part of a straddle (as defined in section 1092(c)). Any amount not allowed as a deduction by reason of the preceding sentence shall be chargeable to the capital account with respect to the personal property to which such amount relates.\nThis subsection shall not apply in the case of any hedging transaction (as defined in section 1256(e)).\nIn the case of any short sale, this subsection shall be applied after subsection (h).\nIn the case of any obligation to which section 1277 or 1282 applies, this subsection shall be applied after section 1277 or 1282.\nIf the payment described in paragraph (1)(A) is in respect of an extraordinary dividend, paragraph (1)(B) shall be applied by substituting “the day 1 year after the date of such short sale” for “the 45th day after the date of such short sale”.\nFor purposes of this subsection, the term “extraordinary dividend” has the meaning given to such term by section 1059(c); except that such section shall be applied by treating the amount realized by the taxpayer in the short sale as his adjusted basis in the stock.\nSubparagraph (A) shall not apply if one or more payments or distributions is in respect of an extraordinary dividend.\nIn the case of any short sale, this subsection shall be applied before subsection (g).\n2018—Subsec. (a)(1)(F), (G).  Pub. L. 115–141, §\u202f401(a)(60) , substituted comma for semicolon at end.\nSubsec. (a)(1)(H) to (L).  Pub. L. 115–141, §\u202f401(a)(61) , redesignated subpars. (I) to (L) as (H) to (K), respectively.\n2014—Subsec. (a)(1)(H).  Pub. L. 113–295, §\u202f221(a)(34)(D) , struck out subpar. (H) which read as follows: “expenditures for which a deduction is allowed under section 179A,”.\nSubsec. (g)(2)(B)(iii).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,” after “section 243”.\n2006—Subsec. (a)(1)(L).  Pub. L. 109–432  added subpar. (L).\n2005—Subsec. (a)(1)(J).  Pub. L. 109–58, §\u202f1323(b)(2) , added subpar. (J).\nSubsec. (a)(1)(K).  Pub. L. 109–58, §\u202f1331(b)(4) , added subpar. (K).\n2004—Subsec. (a)(1)(I).  Pub. L. 108–357  added subpar. (I).\nSubsec. (g)(2)(B)(ii).  Pub. L. 108–311  substituted “1276” for “1278”.\n1997—Subsec. (a)(1)(H).  Pub. L. 105–34  added subpar. (H).\n1990—Subsec. (b).  Pub. L. 101–508, §\u202f11801(a)(16) , struck out subsec. (b) “Expenditures for advertising and good will” which read as follows: “If a corporation has, for the purpose of computing its excess profits tax credit under chapter 2E or subchapter D of chapter 1 of the Internal Revenue Code of 1939 claimed the benefits of the election provided in section 733 or section 451 of such code, as the case may be, no deduction shall be allowable under section 162 to such corporation for expenditures for advertising or the promotion of good will which, under the rules and regulations prescribed under section 733 or section 451 of such code, as the case may be, may be regarded as capital investments.”\nSubsec. (c).  Pub. L. 101–508, §\u202f11815(b)(3) , substituted “section 613(e)(2)” for “section 613(e)(3)”.\n1988—Subsec. (c).  Pub. L. 100–647  substituted “section 59(e)” for “section 59(d)”.\n1986—Subsec. (a)(1)(E) to (H).  Pub. L. 99–514, §\u202f402(b)(1) , struck out subpar. (E) relating to nonapplication of par. (1) to expenditures by farmers for clearing land deductible under section 182, and redesignated subpars. (F) to (H) as (E) to (G), respectively.\nSubsec. (c).  Pub. L. 99–514, §\u202f701(e)(4)(D) , substituted “59(d)” for “58(i)”.\nPub. L. 99–514, §\u202f411(b)(1)(B) , inserted “and except as provided in subsection (i),”.\nSubsec. (g)(2)(B)(iv).  Pub. L. 99–541, §\u202f1808(b) , added cl. (iv).\nSubsec. (i).  Pub. L. 99–514, §\u202f411(b)(1)(A) , added subsec. (i).\n1984—Subsec. (g)(2).  Pub. L. 98–369, §\u202f102(e)(7) , amended par. (2) generally, striking out “charges for temporary use of the personal property in a short sale, or” after “(including” in subpar. (A)(ii), substituting “any amount treated as ordinary income under section 1271(a)(3)(A), 1278, or 1281(a) with respect to such property for the taxable year, and” for “any amount treated as ordinary income under section 1232(a)(3)(A) with respect to such property for the taxable year” in subpar. (B)(ii), and adding subpar. (B)(iii).\nSubsec. (g)(4).  Pub. L. 98–369, §\u202f102(e)(8) , added par. (4).\nSubsec. (h).  Pub. L. 98–369, §\u202f56(a) , added subsec. (h).\n1983—Subsec. (g)(2)(A)(ii).  Pub. L. 97–448, §\u202f105(b)(1) , substituted “all other amounts (including charges for temporary use of the personal property in a short sale, or to insure, store, or transport the personal property) paid or incurred to carry the personal property, over” for “amounts paid or incurred to insure, store, or transport the personal property, over”.\nSubsec. (g)(2)(B)(ii).  Pub. L. 97–448, §\u202f306(a)(9)(A) , substituted “section 1232(a)(3)(A)” for “section 1232(a)(4)(A)”.\n1982—Subsec. (c).  Pub. L. 97–248, §\u202f204(c)(1) , inserted provision that this subsection not apply with respect to any costs to which any deduction is allowed under section 58(i) or 291.\n1981—Subsec. (a)(1)(H).  Pub. L. 97–34, §\u202f202(d)(1) , added subpar. (H).\nSubsec. (e).  Pub. L. 97–34, §\u202f201(c) , struck out subsec. (e) which related to the allowance of repair expenses or specified repair, rehabilitation, or improvement expenditures.\nSubsec. (g).  Pub. L. 97–34, §\u202f502 , added subsec. (g).\n1980—Subsec. (a)(1)(G).  Pub. L. 96–223  added subpar. (G).\n1978—Subsec. (c).  Pub. L. 95–618  inserted “and geothermal wells” after “gas wells” in heading and in text inserted provision that such regulations also grant the option to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit (as defined in section 613(e)(3)) to the same extent and in the same manner as such expenses are deductible in the case of oil and gas wells.\n1976—Subsec. (a)(1)(F).  Pub. L. 94–455, §\u202f2122(b)(2) , added subpar. (F).\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f1904(b)(10)(A)(i)(I) , struck out par. (3) which provided that no deduction be allowed for amounts paid as tax under section 4911 (relating to imposition of interest equalization tax) except as provided in subsec. (d).\nSubsec. (d).  Pub. L. 94–455 , §§\u202f1904(b)(10)(A)(i)(I), (II), 1906(b)(13)(A), redesignated subsec. (e) as (d) and struck out “or his delegate” after “Secretary” and substituted “subsection (e)” for “subsection (f)”. Former subsec. (d) was struck out.\nSubsec. (e).  Pub. L. 94–455 , §§\u202f1904(b)(10)(A)(i)(I), 1906(b)(13)(A), redesignated subsec. (f) as (e) and struck out “or his delegate” after “Secretary”. Former subsec. (e) redesignated (d).\nSubsec. (f).  Pub. L. 94–455 , §§\u202f1701(a), 1904(b)(10)(A)(i)(I), added subsec. (f). Former subsec. (f) redesignated (e).\n1971—Subsec. (e).  Pub. L. 92–178, §\u202f109(c) , substituted “shall, at the election of the taxpayer, be treated” for “shall be treated” and inserted provisions respecting making of election under this subsection for any taxable year at such time and in such manner as Secretary or his delegate prescribed by regulation and prohibiting making of election for any taxable year to which an election under subsec. (f) applies to railroad rolling stock (other than locomotives).\nSubsec. (f).  Pub. L. 92–178, §\u202f109(b) , added subsec. (f).\n1969—Subsec. (e).  Pub. L. 91–172  added subsec. (e).\n1965—Subsec. (a)(3).  Pub. L. 89–243, §\u202f4(p)(1) , inserted “Except as provided in subsection (d)”, and struck out “except to the extent that any amount attributable to the amount paid as tax is included in gross income for the taxable year” after parenthetical provision.\nSubsec. (d).  Pub. L. 89–243, §\u202f4(p)(2) , added subsec. (d).\n1964—Subsec. (a)(3).  Pub. L. 88–563  added par. (3).\n1962—Subsec. (a)(1)(E).  Pub. L. 87–834  added subpar. (E).\n1960—Subsec. (a)(1)(D).  Pub. L. 86–779  added subpar. (D).\nAmendment by  section 221(a)(41)(G) of Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–432  applicable to costs paid or incurred after  Dec. 20, 2006 , see  section 404(c) of Pub. L. 109–432 , set out as an Effective Date note under  section 179E of this title .\nAmendment by  section 1323(b)(2) of Pub. L. 109–58  applicable to properties placed in service after  Aug. 8, 2005 , see  section 1323(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 179C of this title .\nAmendment by  section 1331(b)(4) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , see  section 1331(d) of Pub. L. 109–58 , set out as an Effective Date note under  section 179D of this title .\nAmendment by  Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 338(c) of Pub. L. 108–357 , set out as an Effective Date note under  section 179B of this title .\nPub. L. 105–34, title XVI, §\u202f1604(a)(4) ,  Aug. 5, 1997 ,  111 Stat. 1097 , provided that:  “The amendments made by this subsection [amending this section and sections 312 and 1245 of this title] shall take effect as if included in the amendments made by section 1913 of the Energy Policy Act of 1992 [ Pub. L. 102–486 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 402(b)(1) of Pub. L. 99–514  applicable to amounts paid or incurred after  Dec. 31, 1985 , in taxable years ending after such date, see  section 402(c) of Pub. L. 99–514  set out as an Effective Date of Repeal note under former  section 182 of this title .\nPub. L. 99–514, title IV, §\u202f411(c) ,  Oct. 22, 1986 ,  100 Stat. 2227 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 243, 291, 381, 616, and 617 of this title] shall apply to costs paid or incurred after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Transition rule .— The amendments made by this section shall not apply with respect to intangible drilling and development costs incurred by United States companies pursuant to a minority interest in a license for Netherlands or United Kingdom North Sea development if such interest was acquired on or before  December 31, 1985 .”\nAmendment by  section 701(e)(4)(D) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 1808(b) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 56(a) of Pub. L. 98–369  applicable to short sales after  July 18, 1984 , in taxable years ending after that date, see  section 56(d) of Pub. L. 98–369 , set out as a note under  section 163 of this title .\nAmendment by section 102(e)(7), (8) of  Pub. L. 98–369  applicable to positions established after  July 18, 1984 , in taxable years ending after that date, except as otherwise provided, see section 102(f), (g) of  Pub. L. 98–369 , set out as a note under  section 1256 of this title .\nPub. L. 97–448, title I, §\u202f105(b)(2) ,  Jan. 12, 1983 ,  96 Stat. 2385 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to property acquired, and positions established, by the taxpayer after  September 22, 1982 , in taxable years ending after such date.”\nAmendment by  section 306 of Pub. L. 97–448  effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 311(d) of Pub. L. 97–448 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  December 31, 1982 , see  section 204(d)(1) of Pub. L. 97–248 , set out as an Effective Date note under  section 291 of this title .\nAmendment by sections 201(c) and 202(d)(1) of  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 502 of Pub. L. 97–34  applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as an Effective Date note under  section 1092 of this title .\nAmendment by  Pub. L. 96–223  applicable to taxable years beginning after  Dec. 31, 1979 , see  section 251(b) of Pub. L. 96–223 , set out as an Effective Date note under  section 193 of this title .\nPub. L. 95–618, title IV, §\u202f402(e) ,  Nov. 9, 1978 ,  92 Stat. 3203 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— The amendments made by this section [amending this section and sections 57, 465, 751, and 1254 of this title] shall apply with respect to wells commenced on or after  October 1, 1978 , in taxable years ending on or after such date. \n \n “(2)   Election.— The taxpayer may elect to capitalize or deduct any costs to which section 263(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies by reason of the amendments made by this section [amending this section and sections 57, 465, 751, and 1254 of this title]. Any such election shall be made before the expiration of the time for filing claim for credit or refund of any overpayment of tax imposed by chapter 1 of such Code [section 1 et seq. of this title] with respect to the taxpayer’s first taxable year to which the amendments made by this section apply and for which he pays or incurs costs to which such section 263(c) applies by reason of the amendments made by this section. Any election under this paragraph may be changed or revoked at any time before the expiration of the time referred to in the preceding sentence, but after the expiration of such time such election may not be changed or revoked.”\nPub. L. 94–455, title XIX, §\u202f1904(b)(10)(A)(vii) ,  Oct. 4, 1976 ,  90 Stat. 1817 , provided that:  “The amendments made by this subparagraph [amending this section and sections 6011, 6611, and 6651 of this title and repealing sections 6076 and 6680 of this title] shall apply with respect to acquisitions of stock or debt obligations made after  June 30, 1974 , except that the repeal of paragraph (2) of section 6011(d) under clause (ii) shall apply with respect to loans and commitments made after such date.”\nAmendment by  section 2122(b)(2) of Pub. L. 94–455 , as amended by  Pub. L. 96–167, §\u202f9(c) ,  Dec. 29, 1979 ,  93 Stat. 1278 , applicable to taxable years beginning after  Dec. 31, 1976 , see  section 2122(c) of Pub. L. 94–455 , as amended, set out as an Effective Date note under  section 190 of this title .\nPub. L. 92–178, title I, §\u202f109(d)(2) , (3),  Dec. 10, 1971 ,  85 Stat. 509 , provided that: \n “(2)  The amendment made by subsection (b) [amending this section] shall apply to taxable years ending after  December 31, 1970 . \n \n “(3)  The amendments made by subsection (c) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 91–172, title VII, §\u202f706(b) ,  Dec. 30, 1969 ,  83 Stat. 674 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1969 .”\nPub. L. 89–243, §\u202f4(p)(3) ,  Oct. 9, 1965 ,  79 Stat. 965 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after  September 2, 1964 .”\nPub. L. 89–243, §\u202f4(q) ,  Oct. 9, 1965 ,  79 Stat. 965 , provided in part that:  “Except as otherwise specifically provided in this section and in the amendments made by this section [amending this section and sections 4912, 4914, 4916, 4917, 4919, 4920, and 4931 of this title], such amendments shall apply with respect to acquisitions of stock and debt obligations made after  February 10, 1965 .”\nPub. L. 87–834, §\u202f21(d) ,  Oct. 16, 1962 ,  76 Stat. 1064 , provided that:  “The amendments made by this section [enacting  section 182 of this title  and amending this section] shall apply with respect to taxable years beginning after  December 31, 1962 .”\nAmendment by  Pub. L. 86–779  applicable to taxable years beginning after  Dec. 31, 1959 , see  section 6(d) of Pub. L. 86–779 , set out as an Effective Date note under  section 180 of this title .\nPub. L. 89–243, §\u202f1(a) ,  Oct. 9, 1965 ,  79 Stat. 954 , provided that:  “This Act [amending this section and sections 4912, 4914, 4916, 4917, 4919, 4920, and 4931 of this title, and enacting provisions set out as notes under sections 6011 and 6076 of this title] may be cited as the ‘Interest Equalization Tax Extension Act of 1965’.”\nPub. L. 88–563, §\u202f1(a) ,  Sept. 2, 1964 ,  78 Stat. 809 , provided that:  “This Act [enacting sections 4911 to 4920, 4931, 6076, 6680, 6681, and 7241 of this title, amending this section and sections 1232, 6011, and 6103 of this title, and enacting provisions set out as notes under  section 6011 of this title ] may be cited as the ‘Interest Equalization Tax Act’.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor applicability of amendment by  section 701(e)(4)(D) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Real or tangible personal property produced by the taxpayer.\nReal or personal property described in section 1221(a)(1) which is acquired by the taxpayer for resale.\nThis section shall not apply to any property produced by the taxpayer for use by the taxpayer other than in a trade or business or an activity conducted for profit.\nThis section shall not apply to any amount allowable as a deduction under section 174.\nThis section shall not apply to any cost allowable as a deduction under section 167(h), 179B, 263(c), 263(i), 291(b)(2), 616, or 617.\nThis section shall not apply to any property produced by the taxpayer pursuant to a long-term contract.\nParagraphs (2) and (3) shall apply to any amount allowable as a deduction under section 59(e) for qualified expenditures described in subparagraphs (B), (C), (D), and (E) of paragraph (2) thereof.\nThis section shall not apply to any amount allowed as a deduction by reason of section 168(k)(5) (relating to special rules for certain plants bearing fruits and nuts).\nSubparagraph (A) shall not apply to any corporation, partnership, or tax shelter required to use an accrual method of accounting under section 447 or 448(a)(3).\nIf plants bearing an edible crop for human consumption were lost or damaged (while in the hands of the taxpayer) by reason of freezing temperatures, disease, drought, pests, or casualty, this section shall not apply to any costs of the taxpayer of replanting plants bearing the same type of crop (whether on the same parcel of land on which such lost or damaged plants were located or any other parcel of land of the same acreage in the United States).\nClause (i) shall not apply to any cost paid or incurred after the date which is 10 years after the date of the enactment of the Tax Cuts and Jobs Act.\nIf a taxpayer makes an election under this paragraph, this section shall not apply to any plant produced in any farming business carried on by such taxpayer.\nNo election may be made under this paragraph by a corporation, partnership, or tax shelter, if such corporation, partnership, or tax shelter is required to use an accrual method of accounting under section 447 or 448(a)(3).\nAn election under this paragraph shall not apply with respect to any item which is attributable to the planting, cultivation, maintenance, or development of any citrus or almond grove (or part thereof) and which is incurred before the close of the 4th taxable year beginning with the taxable year in which the trees were planted. For purposes of the preceding sentence, the portion of a citrus or almond grove planted in 1 taxable year shall be treated separately from the portion of such grove planted in another taxable year.\nUnless the Secretary otherwise consents, an election under this paragraph may be made only for the taxpayer’s 1st taxable year which begins after  December 31, 1986 , and during which the taxpayer engages in a farming business. Any such election, once made, may be revoked only with the consent of the Secretary.\nFor purposes of subparagraph (A), the term “recapture amount” means any amount allowable as a deduction to the taxpayer which, but for an election under subsection (d)(3), would have been capitalized with respect to the plant.\nIf the taxpayer (or any related person) makes an election under subsection (d)(3), the provisions of section 168(g)(2) (relating to alternative depreciation) shall apply to all property of the taxpayer used predominantly in the farming business and placed in service in any taxable year during which any such election is in effect.\nFor purposes of this paragraph, the term “family” means the taxpayer, the spouse of the taxpayer, and any of their children who have not attained age 18 before the close of the taxable year.\nIn the case of a plant grown in commercial quantities in the United States, the preproductive period for such plant if grown in the United States shall be based on the nationwide weighted average preproductive period for such plant.\nThe term “farming business” means the trade or business of farming.\nThe Secretary shall by regulations permit the taxpayer to use reasonable inventory valuation methods to compute the amount required to be capitalized under subsection (a) in the case of any plant.\nSubparagraph (A) shall not apply to any qualified residence interest (within the meaning of section 163(h)).\nExcept as provided in regulations, in the case of any flow-through entity, this paragraph shall be applied first at the entity level and then at the beneficiary level.\nThis subsection shall apply to any interest on indebtedness allocable (as determined under paragraph (2)) to property used to produce property to which this subsection applies to the extent such interest is allocable (as so determined) to the produced property.\nThe term “production expenditures” means the costs (whether or not incurred during the production period) required to be capitalized under subsection (a) with respect to the property.\nThe term “produce” includes construct, build, install, manufacture, develop, or improve.\nThe taxpayer shall be treated as producing any property produced for the taxpayer under a contract with the taxpayer; except that only costs paid or incurred by the taxpayer (whether under such contract or otherwise) shall be taken into account in applying subsection (a) to the taxpayer.\nNothing in this section shall require the capitalization of any qualified creative expense.\nThe term “writer” means any individual if the personal efforts of such individual create (or may reasonably be expected to create) a literary manuscript, musical composition (including any accompanying words), or dance score.\nThe term “photographer” means any individual if the personal efforts of such individual create (or may reasonably be expected to create) a photograph or photographic negative or transparency.\nThe term “artist” means any individual if the personal efforts of such individual create (or may reasonably be expected to create) a picture, painting, sculpture, statue, etching, drawing, cartoon, graphic design, or original print edition.\nFor purposes of this subparagraph, the term “qualified employee-owner” means any individual who is an employee-owner of the corporation (as defined in section 269A(b)(2)) and who is a writer, photographer, or artist.\nIn the case of any taxpayer (other than a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3)) which meets the gross receipts test of section 448(c) for any taxable year, this section shall not apply with respect to such taxpayer for such taxable year.\nIn the case of any taxpayer which is not a corporation or a partnership, the gross receipts test of section 448(c) shall be applied in the same manner as if each trade or business of such taxpayer were a corporation or partnership.\nAny change in method of accounting made pursuant to this subsection shall be treated for purposes of section 481 as initiated by the taxpayer and made with the consent of the Secretary.\nThe date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (d)(2)(C)(ii), probably means the date of enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\n2020—Subsec. (f)(4).  Pub. L. 116–260  amended par. (4) generally. Prior to amendment, par. (4) consisted of subpars. (A) and (B) relating to exemption for aging process of beer, wine, and distilled spirits, and termination of such exemption after  Dec. 31, 2020 , respectively.\n2019—Subsec. (f)(4)(B).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2019 ”.\n2017—Subsec. (b)(2).  Pub. L. 115–97, §\u202f13102(b)(2) , amended par. (2) generally. Prior to amendment, par. (2) related to property acquired for resale.\nSubsec. (d)(2)(C).  Pub. L. 115–97, §\u202f13207(a) , added subpar. (C).\nSubsec. (f)(4), (5).  Pub. L. 115–97, §\u202f13801(a) , added par. (4) and redesignated former par. (4) as (5).\nSubsec. (f)(5)(B)(ii).  Pub. L. 115–97, §\u202f13801(b) , inserted “except as provided in paragraph (4),” before “ending on the date”.\nSubsecs. (i), (j).  Pub. L. 115–97, §\u202f13102(b)(1) , added subsec. (i) and redesignated former subsec. (i) as (j).\n2015—Subsec. (c)(7).  Pub. L. 114–113  added par. (7).\n2005—Subsec. (c)(3).  Pub. L. 109–58  inserted “167(h),” after “under section”.\n2004—Subsec. (c)(3).  Pub. L. 108–357 , which directed amendment of par. (3) by inserting “179B,” after “section”, was executed by making the insertion after “section” the second place it appeared to reflect the probable intent of Congress.\n1999—Subsec. (b)(2)(A).  Pub. L. 106–170  substituted “1221(a)(1)” for “1221(1)”.\n1989—Subsec. (h)(3)(D).  Pub. L. 101–239  substituted “corporations” for “personal service corporations” in heading and amended text generally. Prior to amendment, text read as follows:\n“(i)  In general .—In the case of a personal service corporation, this subsection shall apply to any expense of such corporation which directly relates to the activities of the qualified employee-owner in the same manner as if such expense were incurred by such employee-owner.\n“(ii)  Qualified employee-owner .—The term ‘qualified employee-owner’ means any individual who is an employee-owner of the personal service corporation and who is a writer, photographer, or artist, but only if substantially all of the stock of such corporation is owned by such individual and members of his family (as defined in section 267(c)(4)).\n“(iii)  Personal service corporation .—For purposes of this subparagraph, the term ‘personal service corporation’ means any personal service corporation (as defined in section 269A(b)).”\n1988—Subsec. (a)(2).  Pub. L. 100–647, §\u202f1008(b)(1) , inserted at end “Any cost which (but for this subsection) could not be taken into account in computing taxable income for any taxable year shall not be treated as a cost described in this paragraph.”\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f1008(b)(2)(A) , substituted “section 263(c), 263(i), 291(b)(2), 616, or 617” for “section 263(c), 616(a), or 617(a)”.\nSubsec. (c)(6).  Pub. L. 100–647, §\u202f1008(b)(2)(B) , added par. (6).\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f6026(b)(2)(A) , substituted “Section not to apply to certain property” for “Section to apply only if preproductive period is more than 2 years” in heading.\nSubsec. (d)(1)(A).  Pub. L. 100–647, §\u202f6026(b)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “This section shall not apply to any plant or animal which is produced by the taxpayer in a farming business and which has a preproductive period of 2 years or less.”\nSubsec. (d)(2)(B)(i).  Pub. L. 100–647, §\u202f1008(b)(3)(A) , substituted “the plants described in subparagraph (A) at all times during the taxable year in which such amounts were paid or incurred” for “such grove, orchard, or vineyard”.\nSubsec. (d)(2)(B)(ii).  Pub. L. 100–647, §\u202f1008(b)(3)(B) , substituted “the plants described in subparagraph (A) during the taxable year in which such amounts were paid or incurred” for “such grove, orchard, or vineyard during the 4-taxable year period beginning with the taxable year in which the grove, orchard, or vineyard was lost or damaged”.\nSubsec. (d)(3)(A).  Pub. L. 100–647, §\u202f6026(b)(2)(B) , struck out “or animal” after “plant”.\nSubsec. (d)(3)(B).  Pub. L. 100–647, §\u202f6026(c) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “No election may be made under this paragraph—\n“(i) by a corporation, partnership, or tax shelter, if such corporation, partnership, or tax shelter is required to use an accrual method of accounting under section 447 or 448(a)(3), or\n“(ii) with respect to the planting, cultivation, maintenance, or development of pistachio trees.”\nSubsec. (e).  Pub. L. 100–647, §\u202f6026(b)(2)(B) , struck out “or animal” after “plant” wherever appearing in pars. (1), (3), and (5).\nSubsec. (f)(3).  Pub. L. 100–647, §\u202f1008(b)(4) , substituted “allocable (as determined under paragraph (2)) to” for “incurred or continued in connection with” and inserted “(as so determined)” after “allocable”.\nSubsecs. (h), (i).  Pub. L. 100–647, §\u202f6026(a) , added subsec. (h) and redesignated former subsec. (h) as (i).\nPub. L. 116–260, div. EE, title I, §\u202f106(a)(2) ,  Dec. 27, 2020 ,  134 Stat. 3042 , provided that:  “The amendment made by this subsection [amending this section] shall apply to interest costs paid or accrued after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f144(a)(2) ,  Dec. 20, 2019 ,  133 Stat. 3234 , provided that:  “The amendment made by this subsection [amending this section] shall apply to interest costs paid or accrued after  December 31, 2019 .”\nPub. L. 115–97, title I, §\u202f13102(e) ,  Dec. 22, 2017 ,  131 Stat. 2104 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 447, 448, 460, and 471 of this title] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Preservation of suspense account rules with respect to any existing suspense accounts .— So much of the amendments made by subsection (a)(5)(C) as relate to section 447(i) of the Internal Revenue Code of 1986 shall not apply with respect to any suspense account established under such section before the date of the enactment of this Act [ Dec. 22, 2017 ]. \n \n “(3)   Exemption from percentage completion for long-term contracts .— The amendments made by subsection (d) [amending  section 460 of this title ] shall apply to contracts entered into after  December 31, 2017 , in taxable years ending after such date.”\nPub. L. 115–97, title I, §\u202f13207(b) ,  Dec. 22, 2017 ,  131 Stat. 2113 , provided that:  “The amendment made by this section [amending this section] shall apply to costs paid or incurred after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nPub. L. 115–97, title I, §\u202f13801(c) ,  Dec. 22, 2017 ,  131 Stat. 2170 , provided that:  “The amendments made by this section [amending this section] shall apply to interest costs paid or accrued in calendar years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 114–113  applicable to property placed in service after  Dec. 31, 2015 , in taxable years ending after such date, see  section 143(b)(7) of Pub. L. 114–113 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 109–58  applicable to amounts paid or incurred in taxable years beginning after  Aug. 8, 2005 , see  section 1329(c) of Pub. L. 109–58 , set out as a note under  section 167 of this title .\nAmendment by  Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 338(c) of Pub. L. 108–357 , set out as an Effective Date note under  section 179B of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 1008(b)(1)–(4) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6026(d) ,  Nov. 10, 1988 ,  102 Stat. 3693 , as amended by  Pub. L. 101–239, title VII, §\u202f7816(d)(2) ,  Dec. 19, 1989 ,  103 Stat. 2421 , provided that: \n “(1)   In general .— Except as otherwise provided in this paragraph, the amendments made by this section [amending this section] shall take effect as if included in the amendments made by section 803 of the Tax Reform Act of 1986 [ section 803 of Pub. L. 99–514 ]. \n \n “(2)   Subsection  (b).— “(A)   In general .— The amendments made by subsection (b) [amending this section] shall apply to costs incurred after  December 31, 1988 , in taxable years ending after such date. \n \n “(B)   Revocation of election .— If a taxpayer engaged in a farming business involving the production of animals having a preproductive period of more than 2 years made an election under section 263A(d)(3) of the 1986 Code for a taxable year beginning before  January 1, 1989 , such taxpayer may, without the consent of the Secretary of the Treasury or his delegate, revoke such election effective for the taxpayer’s 1st taxable year beginning after  December 31, 1988 .”\nPub. L. 101–239, title VII, §\u202f7831(d)(2) ,  Dec. 19, 1989 ,  103 Stat. 2427 , provided that:  “If any interest costs incurred after  December 31, 1986 , are attributable to costs incurred before  January 1, 1987 , the amendments made by section 803 of the Tax Reform Act of 1986 [ section 803 of Pub. L. 99–514 , enacting this section, amending sections 48, 267, 312, 447, 464, and 471 of this title, and repealing sections 189, 278, and 280 of this title] shall apply to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by section 803 of the Tax Reform Act of 1986) or, if applicable, section 266 of such Code.”\nPub. L. 99–514, title VIII, §\u202f803(d) ,  Oct. 22, 1986 ,  100 Stat. 2356 , as amended by  Pub. L. 100–647, title I, §\u202f1008(b)(7) ,  Nov. 10, 1988 ,  102 Stat. 3438 ;  Pub. L. 101–239, title VII, §\u202f7831(d)(1) ,  Dec. 19, 1989 ,  103 Stat. 2426 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [enacting this section, amending sections 48, 267, 312, 447, 464, and 471 of this title, and repealing sections 189, 278, and 280 of this title] shall apply to costs incurred after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Special rule for inventory property .— In the case of any property which is inventory in the hands of the taxpayer— “(A)   In general .— The amendments made by this section shall apply to taxable years beginning after  December 31, 1986 . \n \n “(B)   Change in method of accounting .— If the taxpayer is required by the amendments made by this section to change its method of accounting with respect to such property for any taxable year— “(i)  such change shall be treated as initiated by the taxpayer, \n \n “(ii)  such change shall be treated as made with the consent of the Secretary, and \n \n “(iii)  the period for taking into account the adjustments under section 481 by reason of such change shall not exceed 4 years. \n \n \n \n “(3)   Special rule for self-constructed property .— The amendments made by this section shall not apply to any property which is produced by the taxpayer for use by the taxpayer if substantial construction had occurred before  March 1, 1986 . \n \n “(4)   Transitional rule for capitalization of interest and taxes.— “(A)   Transition property exempted from interest capitalization .— Section 263A of the Internal Revenue Code of 1986 (as added by this section) and the amendment made by subsection (b)(1) [repealing  section 189 of this title ] shall not apply to interest costs which are allocable to any property— “(i)  to which the amendments made by section 201 [amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] do not apply by reason of sections 204(a)(1)(D) and (E) and 204(a)(5)(A) [set out as a note under  section 168 of this title ], and \n \n “(ii)  to which the amendments made by section 251 [amending sections 46 and 48 of this title and enacting provisions set out as a note under  section 46 of this title ] do not apply by reason of section 251(d)(3)(M) [set out as a note under  section 46 of this title ]. \n \n \n “(B)   Interest and taxes .— Section 263A of such Code shall not apply to property described in the matter following subparagraph (B) of section 207(e)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 207(e)(2)(B) of Pub. L. 97–248 , formerly set out as a note under  section 189 of this title ] to the extent it would require the capitalization of interest and taxes paid or incurred in connection with such property which are not required to be capitalized under section 189 of such Code (as in effect before the amendment made by subsection (b)(1)) [repealing  section 189 of this title ]. \n \n \n “(5)   Transition rule concerning capitalization of inventory rules .— In the case of a corporation which on the date of the enactment of this Act [ Oct. 22, 1986 ] was a member of an affiliated group of corporations (within the meaning of section 1504(a) of the Internal Revenue Code of 1986), the parent of which— “(A)  was incorporated in California on  April 15, 1925 , \n \n “(B)  adopted LIFO accounting as of the close of the taxable year ended  December 31, 1950 , and \n \n “(C)  was, on  May 22, 1986 , merged into a Delaware corporation incorporated on  March 12, 1986 , \n \n\n the amendments made by this section shall apply under a cut-off method whereby the uniform capitalization rules are applied only in costing layers of inventory acquired during taxable years beginning on or after  January 1, 1987 . \n \n “(6)   Treatment of certain rehabilitation project .— The amendments made by this section shall not apply to interest and taxes paid or incurred with respect to the rehabilitation and conversion of a certified historic building which was formerly a factory into an apartment project with 155 units, 39 units of which are for low-income families, if the project was approved for annual interest assistance on  June 10, 1986 , by the housing authority of the State in which the project is located. \n \n “(7)   Special rule for casualty losses .— Section 263A(d)(2) of the Internal Revenue Code of 1986 (as added by this section) shall apply to expenses incurred on or after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 115–97, title I, §\u202f13809 , as added by  Pub. L. 115–123, div. D, title II, §\u202f41111(a) ,  Feb. 9, 2018 ,  132 Stat. 160 , provided that:  “Nothing in this subpart [subpart A (§§\u202f13801–13809) of part IX of subtitle C of title I of  Pub. L. 115–97 , amending this section and sections 5001, 5041, 5051, 5212, 5412, 5414, and 7652 of this title and enacting provisions set out as notes under sections 5001, 5041, 5051, 5212, and 5412 of this title], the amendments made by this subpart, or any regulation promulgated under this subpart or the amendments made by this subpart, shall be construed to preempt, supersede, or otherwise limit or restrict any State, local, or tribal law that prohibits or regulates the production or sale of distilled spirits, wine, or malt beverages.”\n[ Pub. L. 115–123, div. D, title II, §\u202f41111(b) ,  Feb. 9, 2018 ,  132 Stat. 160 , provided that:  “The amendment made by this section [enacting  section 13809 of Pub. L. 115–97 , set out above] shall take effect as if included in  Public Law 115–97 .” \n]\nPub. L. 100–647, title I, §\u202f1008(b)(8) ,  Nov. 10, 1988 ,  102 Stat. 3438 , provided that:  “The allocation used in the regulations prescribed under section 263A(h)(2) of the Internal Revenue Code of 1986 for apportioning storage costs and related handling costs shall be determined by dividing the amount of such costs by the beginning inventory balances and the purchases during the year and by multiplying the resulting allocation ratio by inventory amounts determined in accordance with the provisions of the joint explanatory statement of the committee of conference of the conference report accompanying H.R. 3838 (H.R. Rept. No. 99–841, Vol. II., 99th Cong., 2d Sess. II–306–307 (1986)).”\nPub. L. 100–203, title X, §\u202f10204 ,  Dec. 22, 1987 ,  101 Stat. 1330–394 , provided that: \n “(a)   In General .— For purposes of sections 263A and 460 of the Internal Revenue Code of 1986, the allocable costs (within the meaning of section 263A(a)(2) or section 460(c) of such Code, whichever is applicable) with respect to any property shall include contributions paid to or under a pension or annuity plan whether or not such contributions represent past service costs. \n \n “(b)   Effective Date.— “(1)   In general .— Except as provided in paragraph (2), subsection (a) shall apply to costs incurred after  December 31, 1987 , in taxable years ending after such date. \n \n “(2)   Special rule for inventory property .— In the case of any property which is inventory in the hands of the taxpayer— “(A)   In general .— Subsection (a) shall apply to taxable years beginning after  December 31, 1987 . \n \n “(B)   Change in method of accounting .— If the taxpayer is required by this section to change its method of accounting for any taxable year— “(i)  such change shall be treated as initiated by the taxpayer, \n \n “(ii)  such change shall be treated as made with the consent of the Secretary of the Treasury or his delegate, and \n \n “(iii)  the net amount of adjustments required by section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period not longer than 4 taxable years.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Subsection (a)(4) shall not apply to any interest paid or accrued on any indebtedness with respect to policies or contracts covering an individual who is a key person to the extent that the aggregate amount of such indebtedness with respect to policies and contracts covering such individual does not exceed $50,000.\nNo deduction shall be allowed by reason of paragraph (1) or the last sentence of subsection (a) with respect to interest paid or accrued for any month beginning after  December 31, 1995 , to the extent the amount of such interest exceeds the amount which would have been determined if the applicable rate of interest were used for such month.\nThe applicable rate of interest for any month is the rate of interest described as Moody’s Corporate Bond Yield Average-Monthly Average Corporates as published by Moody’s Investors Service, Inc., or any successor thereto, for such month.\nFor purposes of this paragraph, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or ( o ) of section 414 shall be treated as members of a controlled group.\nNo deduction shall be allowed for that portion of the taxpayer’s interest expense which is allocable to unborrowed policy cash values.\nParagraph (1) shall not apply to any annuity contract to which section 72(u) applies.\nAny policy or contract to which paragraph (1) does not apply by reason of this paragraph shall not be taken into account under paragraph (2).\nFor purposes of subparagraph (A), the term “20-percent owner” has the meaning given such term by subsection (e)(4).\nIf coverage for each insured under a master contract is treated as a separate contract for purposes of sections 817(h), 7702, and 7702A, coverage for each such insured shall be treated as a separate contract for purposes of subparagraph (A). For purposes of the preceding sentence, the term “master contract” shall not include any group life insurance contract (as defined in section 848(e)(2)).\nThis subsection shall not apply to any policy or contract held by a natural person.\nIf a trade or business is directly or indirectly the beneficiary under any policy or contract, such policy or contract shall be treated as held by such trade or business and not by a natural person.\nClause (ii) shall not apply to any trade or business carried on as a sole proprietorship and to any trade or business performing services as an employee.\nThe amount of the unborrowed cash value of any policy or contract which is taken into account by reason of clause (ii) shall not exceed the benefit to which the trade or business is directly or indirectly entitled under the policy or contract.\nThe Secretary shall require such reporting from policyholders and issuers as is necessary to carry out clause (ii).\nIn the case of a partnership or S corporation, this subsection shall be applied at the partnership and corporate levels.\nThis subsection shall be applied before the application of section 263A (relating to capitalization of certain expenses where taxpayer produces property).\nThe term “interest expense” means the aggregate amount allowable to the taxpayer as a deduction for interest (within the meaning of section 265(b)(4)) for the taxable year (determined without regard to this subsection, section 265(b), and section 291).\nAll members of a controlled group (within the meaning of subsection (e)(5)(B)) shall be treated as 1 taxpayer for purposes of this subsection.\nThis subsection shall not apply to an insurance company subject to tax under subchapter L, and subparagraph (A) shall be applied without regard to any member of an affiliated group which is an insurance company.\nThe date of the enactment of this sentence, referred to in subsec. (e)(2)(B)(ii), probably means the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nAnother  section 1084(b) of Pub. L. 105–34  amended sections 805, 807, 812, and 832 of this title. Another  section 1084(c) of Pub. L. 105–34  amended  section 265 of this title .\n1998—Subsec. (a)(3).  Pub. L. 105–206, §\u202f6010 ( o )(1), substituted “subsection (d)” for “subsection (c)”.\nSubsec. (a)(4).  Pub. L. 105–206, §\u202f6010 ( o )(2), substituted “subsection (e)” for “subsection (d)”.\nSubsec. (f)(3).  Pub. L. 105–277  inserted concluding provisions.\nSubsec. (f)(4)(E).  Pub. L. 105–206, §\u202f6010 ( o )(3)(A), added subpar. (E).\nSubsec. (f)(5)(A)(iv).  Pub. L. 105–206, §\u202f6010 ( o )(4)(A), struck out at end “Any report required under the preceding sentence shall be treated as a statement referred to in section 6724(d)(1).”\nSubsec. (f)(8)(A).  Pub. L. 105–206, §\u202f6010 ( o )(5), substituted “subsection (e)(5)(B)” for “subsection (d)(5)(B)”.\n1997—Subsec. (a)(1).  Pub. L. 105–34, §\u202f1084(a)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Premiums paid on any life insurance policy covering the life of any officer or employee, or of any person financially interested in any trade or business carried on by the taxpayer, when the taxpayer is directly or indirectly a beneficiary under such policy.”\nSubsec. (a)(4).  Pub. L. 105–34, §\u202f1602(f)(1) , added subpars. (A) and (B) and concluding provisions and struck out former subpars. (A) and (B) and concluding provisions which read as follows:\n“(A) is an officer or employee of, or\n“(B) is financially interested in,\nany trade or business carried on by the taxpayer.”\nPub. L. 105–34, §\u202f1084(b)(1) , substituted “individual.” for “individual, who—\n“(A) is or was an officer or employee, or\n“(B) is or was financially interested in,\nany trade or business carried on (currently or formerly) by the taxpayer.”\nSubsecs. (b), (c).  Pub. L. 105–34, §\u202f1084(a)(2) , added subsec. (b) and redesignated former subsec. (b) as (c). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 105–34, §\u202f1084(a)(2) , redesignated subsec. (c) as (d). Former subsec. (d) redesignated (e).\nSubsec. (d)(2)(B)(ii).  Pub. L. 105–34, §\u202f1602(f)(2) , amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “For purposes of subclause (II), the taxpayer shall elect an applicable period for such contract on its return of tax imposed by this chapter for its first taxable year ending on or after  October 13, 1995 . Such applicable period shall be for any number of months (not greater than 12) specified in the election and may not be changed by the taxpayer without the consent of the Secretary.”\nSubsec. (d)(4)(B).  Pub. L. 105–34, §\u202f1602(f)(3) , substituted “interest in the taxpayer” for “interest in the employer”.\nSubsec. (e).  Pub. L. 105–34, §\u202f1084(a)(2) , redesignated subsec. (d) as (e).\nSubsec. (f).  Pub. L. 105–34, §\u202f1084(c) , added subsec. (f).\n1996—Subsec. (a)(4).  Pub. L. 104–191, §\u202f501(a)(1) , (b)(1), in introductory provisions, substituted “Except as provided in subsection (d), any” for “Any” and inserted “,\u2000or any endowment or annuity contracts owned by the taxpayer covering any individual,” after “the life of any individual”.\nPub. L. 104–191, §\u202f501(a)(2) , struck out “to the extent that the aggregate amount of such indebtedness with respect to policies covering such individual exceeds $50,000” after “carried on by the taxpayer” in concluding provisions.\nSubsec. (d).  Pub. L. 104–191, §\u202f501(b)(2) , added subsec. (d).\n1986—Subsec. (a).  Pub. L. 99–514  added par. (4) and last sentence providing that par. (4) shall apply with respect to contracts purchased after  June 20, 1986 .\n1964—Subsec. (a).  Pub. L. 88–272  added par. (3) and sentence providing that par. (3) shall apply only to contracts purchased after  August 6, 1963 .\nSubsec. (c).  Pub. L. 88–272  added subsec. (c).\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by section 1084(a), (b)(1), (c) of  Pub. L. 105–34  applicable to contracts issued after  June 8, 1997 , in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see  section 1084(d) of Pub. L. 105–34 , set out as a note under  section 101 of this title .\nAmendment by section 1602(f)(1)–(3) of  Pub. L. 105–34  effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996,  Pub. L. 104–191 , to which such amendment relates, see  section 1602(i) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nPub. L. 104–191, title V, §\u202f501(c) ,  Aug. 21, 1996 ,  110 Stat. 2091 , as amended by  Pub. L. 105–34, title XVI, §\u202f1602(f)(4) ,  Aug. 5, 1997 ,  111 Stat. 1095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to interest paid or accrued after  October 13, 1995 . \n \n “(2)   Transition rule for existing indebtedness.— “(A)   In general .— In the case of— “(i)  indebtedness incurred before  January 1, 1996 , or \n \n “(ii)  indebtedness incurred before  January 1, 1997  with respect to any contract or policy entered into in 1994 or 1995, \n \n\n the amendments made by this section shall not apply to qualified interest paid or accrued on such indebtedness after  October 13, 1995 , and before  January 1, 1999 . \n \n “(B)   Qualified interest .— For purposes of subparagraph (A), the qualified interest with respect to any indebtedness for any month is the amount of interest (otherwise deductible) which would be paid or accrued for such month on such indebtedness if— “(i)  in the case of any interest paid or accrued after  December 31, 1995 , indebtedness with respect to no more than 20,000 insured individuals were taken into account, and \n \n “(ii)  the lesser of the following rates of interest were used for such month: “(I)  The rate of interest specified under the terms of the indebtedness as in effect on  October 13, 1995  (and without regard to modification of such terms after such date). \n \n “(II)  The applicable percentage of the rate of interest described as Moody’s Corporate Bond Yield Average-Monthly Average Corporates as published by Moody’s Investors Service, Inc., or any successor thereto, for such month. \n \n \n\n For purposes of clause (i), all persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 or subsection (m) or ( o ) of section 414 of such Code shall be treated as 1 person. Subclause (II) of clause (ii) shall not apply to any month before  January 1, 1996 . \n \n “(C)   Applicable percentage .— For purposes of subparagraph (B), the applicable percentage is as follows: \n \n \n \n \n \n \n \u2001For calendar year: The percentage is: \n \n \n 1996 100 percent\u2001 \n 1997 90 percent\u2001 \n 1998 80 percent.”\nPub. L. 99–514, title X, §\u202f1003(c) ,  Oct. 22, 1986 ,  100 Stat. 2388 , provided that:  “The amendments made by this section [amending this section] shall apply to contracts purchased after  June 20, 1986 , in taxable years ending after such date.”\nPub. L. 88–272, title II, §\u202f215(c) ,  Feb. 26, 1964 ,  78 Stat. 56 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to amounts paid or accrued in taxable years beginning after  December 31, 1963 .”\nPub. L. 104–191, title V, §\u202f501(d) ,  Aug. 21, 1996 ,  110 Stat. 2092 , as amended by  Pub. L. 105–34, title XVI, §\u202f1602(f)(5) ,  Aug. 5, 1997 ,  111 Stat. 1095 , provided that: \n “(1)   In general .— If any amount is received under any life insurance policy or endowment or annuity contract described in paragraph (4) of section 264(a) of the Internal Revenue Code of 1986— “(A)  on the complete surrender, redemption, or maturity of such policy or contract during calendar year 1996, 1997, or 1998, or \n \n “(B)  in full discharge during any such calendar year of the obligation under the policy or contract which is in the nature of a refund of the consideration paid for the policy or contract, \n \n\n then (in lieu of any other inclusion in gross income) such amount shall be includible in gross income ratably over the 4-taxable year period beginning with the taxable year such amount would (but for this paragraph) be includible. The preceding sentence shall only apply to the extent the amount is includible in gross income for the taxable year in which the event described in subparagraph (A) or (B) occurs. \n \n “(2)   Special rules for applying section 264 .— A contract shall not be treated as— “(A)  failing to meet the requirement of section 264(c)(1) of the Internal Revenue Code of 1986, or \n \n “(B)  a single premium contract under section 264(b)(1) of such Code, \n \n\n solely by reason of an occurrence described in subparagraph (A) or (B) of paragraph (1) of this subsection or solely by reason of a lapse occurring after  October 13, 1995 , by reason of no additional premiums being received under the contract. \n \n “(3)   Special rule for deferred acquisition costs .— In the case of the occurrence of any event described in subparagraph (A) or (B) of paragraph (1) of this subsection with respect to any policy or contract— “(A)  section 848 of the Internal Revenue Code of 1986 shall not apply to the unamortized balance (if any) of the specified policy acquisition expenses attributable to such policy or contract immediately before the insurance company’s taxable year in which such event occurs, and \n \n “(B)  there shall be allowed as a deduction to such company for such taxable year under chapter 1 of such Code an amount equal to such unamortized balance.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Any amount otherwise allowable as a deduction which is allocable to one or more classes of income other than interest (whether or not any amount of income of that class or classes is received or accrued) wholly exempt from the taxes imposed by this subtitle, or any amount otherwise allowable under section 212 (relating to expenses for production of income) which is allocable to interest (whether or not any amount of such interest is received or accrued) wholly exempt from the taxes imposed by this subtitle.\nInterest on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the taxes imposed by this subtitle.\nIn the case of a regulated investment company which distributes during the taxable year an exempt-interest dividend (including exempt-interest dividends paid after the close of the taxable year as described in section 855), that portion of any amount otherwise allowable as a deduction which the amount of the income of such company wholly exempt from taxes under this subtitle bears to the total of such exempt income and its gross income (excluding from gross income, for this purpose, capital gain net income, as defined in section 1222(9)).\nInterest on indebtedness incurred or continued to purchase or carry shares of stock of a regulated investment company which during the taxable year of the holder thereof distributes exempt-interest dividends.\nIn the case of a financial institution, no deduction shall be allowed for that portion of the taxpayer’s interest expense which is allocable to tax-exempt interest.\nAny qualified tax-exempt obligation acquired after  August 7, 1986 , shall be treated for purposes of paragraph (2) and section 291(e)(1)(B) as if it were acquired on  August 7, 1986 .\nFor purposes of subparagraph (B), the term “qualified small issuer” means, with respect to obligations issued during any calendar year, any issuer if the reasonably anticipated amount of tax-exempt obligations (other than obligations described in clause (ii)) which will be issued by such issuer during such calendar year does not exceed $10,000,000.\nNot more than $10,000,000 of obligations issued by an issuer during any calendar year may be designated by such issuer for purposes of this paragraph.\nIn the case of obligations issued during 2009 or 2010, subparagraphs (C)(i), (D)(i), and (D)(iii)(II) shall each be applied by substituting “$30,000,000” for “$10,000,000”.\nIn the case of a qualified 501(c)(3) bond (as defined in section 145) issued during 2009 or 2010, this paragraph shall be applied by treating the 501(c)(3) organization for whose benefit such bond was issued as the issuer.\nFor purposes of this subparagraph, the term “qualified financing issue” means any composite, pooled, or other conduit financing issue the proceeds of which are used directly or indirectly to make or finance loans to 1 or more ultimate borrowers each of whom is a qualified borrower.\nFor purposes of this subparagraph, the term “qualified portion” means that portion of the proceeds which are used with respect to each qualified borrower under the issue.\nFor purposes of this subparagraph, the term “qualified borrower” means a borrower which is a State or political subdivision thereof or an organization described in section 501(c)(3) and exempt from taxation under section 501(a).\nThe term “interest expense” means the aggregate amount allowable to the taxpayer as a deduction for interest for the taxable year (determined without regard to this subsection, section 264, and section 291). For purposes of the preceding sentence, the term “interest” includes amounts (whether or not designated as interest) paid in respect of deposits, investment certificates, or withdrawable or repurchasable shares.\nThe term “tax-exempt obligation” means any obligation the interest on which is wholly exempt from taxes imposed by this subtitle. Such term includes shares of stock of a regulated investment company which during the taxable year of the holder thereof distributes exempt-interest dividends.\nThis section shall be applied before the application of section 263A (relating to capitalization of certain expenses where taxpayer produces property).\nIn applying paragraph (2)(A), there shall not be taken into account tax-exempt obligations issued during 2009 or 2010.\nThe amount of tax-exempt obligations not taken into account by reason of subparagraph (A) shall not exceed 2 percent of the amount determined under paragraph (2)(B).\nFor purposes of this paragraph, a refunding bond (whether a current or advance refunding) shall be treated as issued on the date of the issuance of the refunded bond (or in the case of a series of refundings, the original bond).\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (b)(3)(B)(ii)(II), (C)(ii)(II), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nSections 1312, 1313, 1316(g), and 1317 of the Tax Reform Act of 1986, referred to in subsec. (b)(3)(C)(ii)(II), are sections 1312, 1313, 1316(g), and 1317 of  Pub. L. 99–514 , which are set out as a note under  section 141 of this title .\nSection 149(d)(5), referred to in subsec. (b)(3)(C)(ii)(III), was redesignated section 149(d)(2) by  Pub. L. 115–97, title I, §\u202f13532(b)(1) ,  Dec. 22, 2017 ,  131 Stat. 2154 .\nAnother  section 1084(c) of Pub. L. 105–34  amended  section 264 of this title .\n2009—Subsec. (b)(3)(G).  Pub. L. 111–5, §\u202f1502(a) , added subpar. (G).\nSubsec. (b)(7).  Pub. L. 111–5, §\u202f1501(a) , added par. (7).\n1997—Subsec. (b)(4)(A).  Pub. L. 105–34  inserted “,\u2000section 264,” before “and section 291”.\n1990—Subsec. (a)(2).  Pub. L. 101–508, §\u202f11801(c)(4) , struck out before period at end “,\u2000or to purchase or carry any certificate to the extent the interest on such certificate is excludable under section 128”.\n1988—Subsec. (b)(3).  Pub. L. 100–647  amended par. (3) generally, reenacting subpar. (A) without change, revising and restating provisions of subpars. (B) to (E), and adding subpar. (F).\n1986— Pub. L. 99–514, §\u202f902(a) , (d), designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).\nPar. (2).  Pub. L. 99–514, §\u202f902(b) , struck out last sentence which read as follows: “In applying the preceding sentence to a financial institution (other than a bank) which is a face-amount certificate company registered under the Investment Company Act of 1940 ( 15 U.S.C. 80a–1  and following) and which is subject to the banking laws of the State in which such institution is incorporated, interest on face-amount certificates (as defined in section 2(a)(15) of such Act) issued by such institution, and interest on amounts received for the purchase of such certificates to be issued by such institution, shall not be considered as interest on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the taxes imposed by this subtitle, to the extent that the average amount of such obligations held by such institution during the taxable year (as determined under regulations prescribed by the Secretary) does not exceed 15 percent of the average of the total assets held by such institution during the taxable year (as so determined).”\nPar. (6).  Pub. L. 99–514, §\u202f144 , added par. (6).\n1984—Par. (2).  Pub. L. 98–369, §\u202f16(a) , repealed amendments made by  Pub. L. 97–34, §\u202f302(c) . See 1981 Amendment note below.\nPar. (5).  Pub. L. 98–369, §\u202f56(c) , added par. (5).\n1981—Par. (2).  Pub. L. 97–34, §\u202f302(c)(2) , (d)(1), provided that, applicable to taxable years beginning after  Dec. 31, 1984 , par. (2) is amended by striking out “or to purchase or carry any certificate to the extent the interest on such certificate is excludable under section 128” and inserting in lieu thereof “or to purchase or carry obligations or shares, or to make other deposits or investments, the interest on which is described in section 128(c)(1) to the extent such interest is excludable from gross income under section 128”.  Section 16(a) of Pub. L. 98–369 , repealed  section 302(c) of Pub. L. 97–34 , and provided that this title shall be applied and administered as if section 302(c), and the amendments made by such section 302(c), had not been enacted.\nPub. L. 97–34, §\u202f301(b)(2) , inserted “,\u2000or to purchase or carry any certificate to the extent the interest on such certificate is excludable under section 128” after “116”.\n1980—Par. (2).  Pub. L. 96–223  inserted “,\u2000or to purchase or carry obligations or shares, or to make deposits or other investments, the interest on which is described in section 116(c) to the extent such interest is excludable from gross income under section 116” after “subtitle”.\n1976—Par. (2).  Pub. L. 94–455 , §§\u202f1901(a)(37), 1906(b)(13)(A), struck out “(other than obligations of the United States issued after  September 24, 1917 , and originally subscribed for by the taxpayer)” after “to purchase or carry obligations” and “or his delegate” after “Secretary”.\nPars. (3), (4).  Pub. L. 94–455, §\u202f2137(e) , added pars. (3) and (4).\n1964—Par. (2).  Pub. L. 88–272  provided that interest on face-amount certificates issued by a face-amount certificate company, and interest on amounts received for the purchase of such certificates to be issued by such institution, shall not be considered interest on indebtedness to purchase or carry obligations the interest on which is wholly exempt from the taxes under this subtitle, to the extent the average amount of such obligations held by such institution during the taxable year doesn’t exceed 15 percent of the average total assets held by such institution during the taxable year.\nPub. L. 111–5, div. B, title I, §\u202f1501(c) ,  Feb. 17, 2009 ,  123 Stat. 353 , provided that:  “The amendments made by this section [amending this section and  section 291 of this title ] shall apply to obligations issued after  December 31, 2008 .”\nPub. L. 111–5, div. B, title I, §\u202f1502(b) ,  Feb. 17, 2009 ,  123 Stat. 354 , provided that:  “The amendment made by this section [amending this section] shall apply to obligations issued after  December 31, 2008 .”\nAmendment by  Pub. L. 105–34  applicable to contracts issued after  June 8, 1997 , in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see  section 1084(d) of Pub. L. 105–34 , set out as a note under  section 101 of this title .\nPub. L. 100–647, title I, §\u202f1009(b)(3)(B) –(D),  Nov. 10, 1988 ,  102 Stat. 3448 , 3449, as amended by  Pub. L. 101–239, title VII, §\u202f7811(f)(2) ,  Dec. 19, 1989 ,  103 Stat. 2409 , provided that: \n “(B)  In the case of any obligation issued after  August 7, 1986 , and before  January 1, 1987 , the time for making a designation with respect to such obligation under section 265(b)(3)(B)(i)(III) of the 1986 Code shall not expire before  January 1, 1989 . \n \n “(C)  If— “(i)  an obligation is issued on or after  January 1, 1986 , and on or before  August 7, 1986 , \n \n “(ii)  when such obligation was issued, the issuer made a designation that it intended to qualify under section 802(e)(3) of H.R. 3838 of the 99th Congress as passed by the House of Representatives [H.R. 3838 was enacted as  Pub. L. 99–514 ], and \n \n “(iii)  the issuer makes an election under this subparagraph with respect to such obligation, \n \n\n for purposes of section 265(b)(3) of the 1986 Code, such obligation shall be treated as issued on  August 8, 1986 . \n \n “(D) (i)  Except as provided in clause (ii), the following provisions of section 265(b)(3) of the 1986 Code (as amended by this subparagraph (A)) shall apply to obligations issued after  June 30, 1987 : “(I)  subparagraph (C)(ii)(III), \n \n “(II)  clauses (ii) and (iii) of subparagraph (D), and \n \n “(III)  subparagraphs (E) and (F). \n \n \n “(ii)  At the election of an issuer (made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe), the provisions referred to in clause (i) shall apply to such issuer as if included in the amendments made by section 902(a) of the Tax Reform Act of 1986 [ section 902(a) of Pub. L. 99–514 , amending this section].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 144 of Pub. L. 99–514  applicable to taxable years beginning before, on, or after  Dec. 31, 1986 , see  section 151(e) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title IX, §\u202f902(f) ,  Oct. 22, 1986 ,  100 Stat. 2382 , as amended by  Pub. L. 100–647, title I, §\u202f1009(b)(1) , (2), (7),  Nov. 10, 1988 ,  102 Stat. 3445 , 3446, 3449, provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 163, 291, and 1277 of this title] shall apply to taxable years ending after  December 31, 1986 . \n \n “(2)   Obligations acquired pursuant to certain commitments .— For purposes of sections 265(b) and 291(e)(1)(B) of the Internal Revenue Code of 1986, any tax-exempt obligation which is acquired after  August 7, 1986 , pursuant to a direct or indirect written commitment— “(A)  to purchase or repurchase such obligation, and \n \n “(B)  entered into on or before  September 25, 1985 , \n \n\n shall be treated as an obligation acquired before  August 8, 1986 . \n \n “(3)   Transitional rules .— For purposes of sections 265(b) and 291(e)(1)(B) of the Internal Revenue Code of 1986, obligations with respect to any of the following projects shall be treated as obligations acquired before  August 8, 1986 , in the hands of the first and any subsequent financial institution acquiring such obligations: “(A)  Park Forest, Illinois, redevelopment project. \n \n “(B)  Clinton, Tennessee, Carriage Trace project. \n \n “(C)  Savannah, Georgia, Mall Terrace Warehouse project. \n \n “(D)  Chattanooga, Tennessee, Warehouse Row project. \n \n “(E)  Dalton, Georgia, Towne Square project. \n \n “(F)  Milwaukee, Wisconsin, Standard Electric Supply Company—distribution facility. \n \n “(G)  Wausau, Wisconsin, urban renewal project. \n \n “(H)  Cassville, Missouri, UDAG project. \n \n “(I)  Outlook Envelope Company—plant expansion. \n \n “(J)  Woodstock, Connecticut, Crabtree Warehouse partnership. \n \n “(K)  Louisville, Kentucky, Speed Mansion renovation project. \n \n “(L)  Charleston, South Carolina, 2 Festival Market Place projects at Union Pier Terminal and 1 project at the Remount Road Container Yard, State Pier No. 15 at North Charleston Terminal. \n \n “(M)  New Orleans, Louisiana, Upper Pontalba Building renovation. \n \n “(N)  Woodward Wight Building. \n \n “(O)  Minneapolis, Minnesota, Miller Milling Company—flour mill project. \n \n “(P)  Homewood, Alabama, the Club Apartments. \n \n “(Q)  Charlotte, North Carolina—qualified mortgage bonds acquired by NCNB bank ($5,250,000). \n \n “(R)  Grand Rapids, Michigan, Central Bank project. \n \n “(S)  Ruppman Marketing Services, Inc.— building project. \n \n “(T)  Bellows Falls, Vermont—building project. \n \n “(U)  East Broadway Project, Louisville, Kentucky. \n \n “(V)  O.K. Industries, Oklahoma. \n \n \n “(4)   Additional transitional rule .— Obligations issued pursuant to an allocation of a State’s volume limitation for private activity bonds, which allocation was made by Executive Order 25 signed by the Governor of the State on  May 22, 1986  (as such order may be amended before  January 1, 1987 ), and qualified 501(c)(3) bonds designated by such Governor for purposes of this paragraph, shall be treated as acquired on or before  August 7, 1986 , in the hands of the first and any subsequent financial institution acquiring such obligation. The aggregate face amount of obligations to which this paragraph applies shall not exceed $200,000,000.”\nAmendment by  section 16(a) of Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nAmendment by  section 56(c) of Pub. L. 98–369  applicable to short sales after  July 18, 1984 , in taxable years ending after that date, see  section 56(d) of Pub. L. 98–369 , set out as a note under  section 163 of this title .\nPub. L. 97–34, title III, §\u202f301(d) ,  Aug. 13, 1981 ,  95 Stat. 270 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), the amendments made by this section [enacting  section 128 of this title  and amending this section and sections 584, 643, and 702 of this title] shall apply to taxable years ending after  September 30, 1981 . \n \n “(2)   Conforming amendments.— The amendments made by subsection (b)(6) [amending sections 584, 643, and 702 of this title] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 96–223, title IV, §\u202f404(c) ,  Apr. 2, 1980 ,  94 Stat. 308 , as amended by  Pub. L. 97–34, title III, §\u202f302(b)(1) ,  Aug. 13, 1981 ,  95 Stat. 272 , provided that:  “The amendments made by this section [amending this section and sections 116, 584, 643, 702, 854, and 857 of this title] shall apply with respect to taxable years beginning after  December 31, 1980 , and before  January 1, 1982 .”\nAmendment by  section 1901(a)(37) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 2137(e) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1975 , see  section 2137(e) of Pub. L. 94–455 , set out as a note under  section 852 of this title .\nPub. L. 88–272, title II, §\u202f216(b) ,  Feb. 26, 1964 ,  78 Stat. 56 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after the date of the enactment of this Act [ Feb. 26, 1964 ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 99–514, title IX, §\u202f904(c)(2)(B) ,  Oct. 22, 1986 ,  100 Stat. 2385 , provided that this section shall not deny any deduction by reason of such deduction being allocable to amounts excluded from gross income under  section 597 of this title  as in effect on  Oct. 21, 1986 , prior to repeal by  Pub. L. 101–73, title XIV, §\u202f1401(a)(3)(B) ,  Aug. 9, 1989 ,  103 Stat. 549 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'No deduction shall be allowed for amounts paid or accrued for such taxes and carrying charges as, under regulations prescribed by the Secretary, are chargeable to capital account with respect to property, if the taxpayer elects, in accordance with such regulations, to treat such taxes or charges as so chargeable.\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'No deduction shall be allowed in respect of any loss from the sale or exchange of property, directly or indirectly, between persons specified in any of the paragraphs of subsection (b). The preceding sentence shall not apply to any loss of the distributing corporation (or the distributee) in the case of a distribution in complete liquidation.\nThe Secretary shall by regulations apply the matching principle of paragraph (2) in cases in which the person to whom the payment is to be made is not a United States person.\nNotwithstanding subparagraph (A), in the case of any item payable to a controlled foreign corporation (as defined in section 957) or a passive foreign investment company (as defined in section 1297), a deduction shall be allowable to the payor with respect to such amount for any taxable year before the taxable year in which paid only to the extent that an amount attributable to such item is includible (determined without regard to properly allocable deductions and qualified deficits under section 952(c)(1)(B)) during such prior taxable year in the gross income of a United States person who owns (within the meaning of section 958(a)) stock in such corporation.\nThe Secretary may by regulation exempt transactions from the application of clause (i), including any transaction which is entered into by a payor in the ordinary course of a trade or business in which the payor is predominantly engaged and in which the payment of the accrued amounts occurs within 8½ months after accrual or within such other period as the Secretary may prescribe.\nParagraph (1) shall not apply if the loss sustained by the transferor is not allowable to the transferor as a deduction by reason of section 1091 (relating to wash sales).\nParagraph (1) shall not apply to the extent any loss sustained by the transferor (if allowed) would not be taken into account in determining a tax imposed under section 1 or 11 or a tax computed as provided by either of such sections.\nIn the case of any amount paid or incurred by a partnership, subsection (a)(2) shall not apply to the extent that section 707(c) applies to such amount.\nFor additional rules relating to partnerships, see section 707(b).\nFor purposes of applying subsection (a)(1), the term “controlled group” shall not include a DISC.\nTo the extent provided in regulations, subsection (a)(1) shall not apply to any loss sustained by a member of a controlled group on the repayment of a loan made to another member of such group if such loan is payable in a foreign currency or is denominated in such a currency and such loss is attributable to a reduction in value of such foreign currency.\nFor purposes of any other section of this title which refers to a relationship which would result in a disallowance of losses under this section, deferral under paragraph (2) shall be treated as disallowance.\nSubsection (a)(1) shall not apply to any transfer described in section 1041(a) (relating to transfers of property between spouses or incident to divorce).\n2015—Subsec. (d).  Pub. L. 114–113  amended subsec. (d) generally. Prior to amendment, text read as follows: “If—\n“(1) in the case of a sale or exchange of property to the taxpayer a loss sustained by the transferor is not allowable to the transferor as a deduction by reason of subsection (a)(1); and\n“(2) the taxpayer sells or otherwise disposes of such property (or of other property the basis of which in his hands is determined directly or indirectly by reference to such property) at a gain,\nthen such gain shall be recognized only to the extent that it exceeds so much of such loss as is properly allocable to the property sold or otherwise disposed of by the taxpayer. This subsection shall not apply if the loss sustained by the transferor is not allowable to the transferor as a deduction by reason of section 1091 (relating to wash sales).”\n2014—Subsec. (d).  Pub. L. 113–295 , in concluding provisions, struck out “This subsection applies with respect to taxable years ending after  December 31, 1953 . ” after “by the taxpayer.” and “or by reason of section 118 of the Internal Revenue Code of 1939” after “sales)”.\nSubsec. (d)(1).  Pub. L. 113–295  struck out “(or by reason of section 24(b) of the Internal Revenue Code of 1939)” after “subsection (a)(1)”.\nSubsec. (d)(2).  Pub. L. 113–295  struck out “after  December 31, 1953 ,” before “the taxpayer”.\n2010—Subsec. (f)(3)(D).  Pub. L. 111–325  added subpar. (D).\n2004—Subsec. (a)(3).  Pub. L. 108–357  designated existing provisions as subpar. (A), inserted heading, and added subpar. (B).\n1999—Subsec. (f)(3)(B)(i), (iii).  Pub. L. 106–170  substituted “1221(a)(1)” for “1221(1)”.\n1997—Subsec. (b)(13).  Pub. L. 105–34, §\u202f1308(a) , added par. (13).\nSubsec. (f)(4).  Pub. L. 105–34, §\u202f1604(e)(1) , added par. (4).\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1006(e)(9) , struck out “(other than a loss in case of a distribution in corporate liquidation)” after “exchange of property” and inserted at end “The preceding sentence shall not apply to any loss of the distributing corporation (or the distributee) in the case of a distribution in complete liquidation.”\nSubsec. (a)(2).  Pub. L. 100–647, §\u202f1008(e)(6) , made technical correction to directory language of  Pub. L. 99–514, §\u202f806(c)(2) , see 1986 Amendment note below.\n1986—Subsec. (a)(2).  Pub. L. 99–514, §\u202f806(c)(2) , as amended by  Pub. L. 100–647, §\u202f1008(e)(6) , inserted at end “For purposes of this paragraph, in the case of a personal service corporation (within the meaning of section 441(i)(2)), such corporation and any employee-owner (within the meaning of section 269A(b)(2), as modified by section 441(i)(2)) shall be treated as persons specified in subsection (b).”\nSubsec. (a)(3).  Pub. L. 99–514, §\u202f1812(c)(1) , added par. (3).\nSubsec. (b)(12).  Pub. L. 99–514, §\u202f1812(c)(4)(A) , substituted “same persons own” for “same persons owns”.\nSubsec. (e)(5)(D).  Pub. L. 99–514, §\u202f803(b)(5) , substituted in cl. (i) “interest in property described in clause (i), (ii), (iii), or (iv) of section 1250(a)(1)(B)” for “interest in low-income housing (as defined in paragraph (5) of section 189(e))” and in cl. (ii) “such property” for “low-income housing (as so defined)”.\nSubsec. (e)(6).  Pub. L. 99–514, §\u202f1812(c)(3)(C) , added par. (6).\nSubsec. (f)(3)(B).  Pub. L. 99–514, §\u202f1812(c)(2) , inserted “(or persons described in subsection (b)(10))”.\nSubsec. (g).  Pub. L. 99–514, §\u202f1842(a) , added subsec. (g).\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f174(a) , amended subsec. (a) generally, substituting “In general” for “Deduction disallowed” in heading, “Deduction for losses disallowed” for “Losses” in par. (1) heading, and provisions dealing with matching of deduction and payee income item in the case of expenses and interest for provisions dealing with unpaid expenses and interest in par. (2).\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f174(b)(2)(A) , substituted “Two corporations which are members of the same controlled group (as defined in subsection (f))” for “Two corporations more than 50 percent in value of the outstanding stock of each of which is owned, directly or indirectly, by or for the same individual, if either one of such corporations, with respect to the taxable year of the corporation preceding the date of the sale or exchange was, under the law applicable to such taxable year, a personal holding company or a foreign personal holding company”.\nSubsec. (b)(10).  Pub. L. 98–369, §\u202f174(b)(3) , substituted “A corporation” for “An S corporation” in introductory provisions and “the corporation” for “the S corporation” in subpar. (A).\nSubsec. (b)(12).  Pub. L. 98–369, §\u202f174(b)(4) , substituted “the same persons” for “the same individual”.\nSubsec. (e).  Pub. L. 98–369, §\u202f174(b)(1) , added subsec. (e).\nPub. L. 98–369, §\u202f174(a)(2) , struck out subsec. (e) which provided that for purposes of subsection (a)(2) where the last day of the 2½ month period falls on Saturday, Sunday, or a legal holiday, such last day be treated as falling on the next succeeding day which is not a Saturday, Sunday, or a legal holiday, and the determination of what constitutes a legal holiday be made under section 7503 with respect to the payor’s return of tax under this chapter for the preceding taxable year.\nSubsec. (f).  Pub. L. 98–369, §\u202f174(b)(2)(B) , added subsec. (f).\nPub. L. 98–369, §\u202f174(b)(1) , struck out subsec. (f) which related to special rules for unpaid expenses and interest of S corporations and treatment under such provisions of certain shareholders, etc., as related persons.\nPub. L. 98–369, §\u202f721(s) , in closing provision of par. (1) substituted “then any deduction allowable under such sections in respect of such amount shall be allowable as of the day as of which such payment is includible in the gross income of the person to whom the payment is made (or, if later, as of the day on which it would be so allowable but for this paragraph)” for “then no deduction shall be allowed in respect of expenses otherwise deductible under section 162 or 212, or of interest otherwise deductible under section 163, before the day as of which the amount thereof is includible in the gross income of the person to whom the payment is made”.\n1982—Subsec. (b)(10) to (12).  Pub. L. 97–354, §\u202f3(h)(1) , (3), added pars. (10) to (12).\nSubsec. (f).  Pub. L. 97–354, §\u202f3(h)(2) , added subsec. (f).\n1978—Subsec. (e).  Pub. L. 95–628  added subsec. (e).\nPub. L. 114–113, div. Q, title III, §\u202f345(b) ,  Dec. 18, 2015 ,  129 Stat. 3115 , provided that:  “The amendment made by this section [amending this section] shall apply to sales and other dispositions of property acquired after  December 31, 2015 , by the taxpayer in a sale or exchange to which section 267(a)(1) of the Internal Revenue Code of 1986 applied.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–325, title III, §\u202f306(c) ,  Dec. 22, 2010 ,  124 Stat. 3550 , provided that:  “The amendments made by this section [amending this section and  section 302 of this title ] shall apply to distributions after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nAmendment by  Pub. L. 108–357  applicable to payments accrued on or after  Oct. 22, 2004 , see  section 841(c) of Pub. L. 108–357 , set out as a note under  section 163 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title XIII, §\u202f1308(c) ,  Aug. 5, 1997 ,  111 Stat. 1042 , provided that:  “The amendments made by this section [amending this section and  section 1239 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XVI, §\u202f1604(e)(2) ,  Aug. 5, 1997 ,  111 Stat. 1098 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in section 174(b) of the Tax Reform Act of 1984 [ Pub. L. 98–369 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the amendment by  section 803(b)(5) of Pub. L. 99–514  is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nAmendment by  section 803(b)(5) of Pub. L. 99–514  applicable, except as otherwise provided, to costs incurred after  Dec. 31, 1986 , in taxable years ending after that date, see  section 803(d) of Pub. L. 99–514 , set out as a note under  section 263A of this title .\nAmendment by  section 806(c)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with special provisions applicable to taxpayers who are required to change their accounting periods, see  section 806(e) of Pub. L. 99–514 , set out as a note under  section 1378 of this title .\nAmendment by sections 1812(c)(1), (2), (3)(C), (4)(A) and 1842(a) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f174(c) ,  July 18, 1984 ,  98 Stat. 707 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Subsections  (a)  and  (b)(1).— The amendments made by subsections (a) and (b)(1) [amending this section] shall apply to amounts allowable as deductions under chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for taxable years beginning after  December 31, 1983 . For purposes of the preceding sentence, the allowability of a deduction shall be determined without regard to any disallowance or postponement of deductions under section 267 of such Code. \n \n “(2)   Subsection  (b)  (other than paragraph (1)).— “(A)   In general .— Except as provided in subparagraph (B), the amendments made by subsection (b) (other than paragraph (1) thereof) [amending this section and sections 170, 368, 514, and 1235 of this title] shall apply to transactions after  December 31, 1983 , in taxable years ending after such date. \n \n “(B)   Exception for transfers to foreign corporations on or before  march 1, 1984 .— The amendments made by subsection (b)(2) [amending this section] shall not apply to property transferred to a foreign corporation on or before  March 1, 1984 . \n \n \n “(3)   Exception for existing indebtedness, etc.— “(A)   In general .— The amendments made by this section [amending this section and sections 170, 368, 514, and 1235 of this title] shall not apply to any amount paid or incurred— “(i)  on indebtedness incurred on or before  September 29, 1983 , or \n \n “(ii)  pursuant to a contract which was binding on  September 29, 1983 , and at all times thereafter before the amount is paid or incurred. \n \n \n “(B)   Treatment of renegotiations, extensions, etc .— If any indebtedness (or contract described in subparagraph (A)) is renegotiated, extended, renewed, or revised after  September 29, 1983 , subparagraph (A) shall not apply to any amount paid or incurred on such indebtedness (or pursuant to such contract) after the date of such renegotiation, extension, renewal, or revision.”\nAmendment by  section 721(s) of Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 95–628, §\u202f2(b) ,  Nov. 10, 1978 ,  92 Stat. 3627 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to payments made after the date of the enactment of this Act [ Nov. 10, 1978 ].”\nNothing in  section 806 of Pub. L. 99–514  [amending this section] or in any legislative history relating thereto to be construed as requiring the Secretary of the Treasury or his delegate to permit an automatic change of a taxable year, see  section 1008(e)(9) of Pub. L. 100–647 , set out as a note under  section 1378 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1812(c)(5) ,  Oct. 22, 1986 ,  100 Stat. 2835 , provided that:  “Clause (i) of section 174(c)(3)(A) of the Tax Reform Act of 1984 [ section 174(c)(3)(A)(i) of Pub. L. 98–369 , set out as a note above] shall be applied by substituting ‘ December 31, 1983 ’ for ‘ September 29, 1983 ’ in the case of indebtedness which matures on  January 1, 1999 , the payments on which from January 1989 through November 1993 equal U/L plus $77,600, the payments on which from December 1993 to maturity equal U/L plus $50,100, and which accrued interest at 13.75 percent through  December 31, 1989 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'No deduction shall be allowed under this chapter for any disqualified related party amount paid or accrued pursuant to a hybrid transaction or by, or to, a hybrid entity.\nThe term “related party” means a related person as defined in section 954(d)(3), except that such section shall be applied with respect to the person making the payment described in paragraph (1) in lieu of the controlled foreign corporation otherwise referred to in such section.\nFor purposes of this section, the term “hybrid transaction” means any transaction, series of transactions, agreement, or instrument one or more payments with respect to which are treated as interest or royalties for purposes of this chapter and which are not so treated for purposes the tax law of the foreign country of which the recipient of such payment is resident for tax purposes or is subject to tax.\nPub. L. 115–97, title I, §\u202f14222(c) ,  Dec. 22, 2017 ,  131 Stat. 2220 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 2017 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Where an unharvested crop sold by the taxpayer is considered under the provisions of section 1231 as “property used in the trade or business”, in computing taxable income no deduction (whether or not for the taxable year of the sale and whether for expenses, depreciation, or otherwise) attributable to the production of such crop shall be allowed.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'For purposes of paragraph (1), the terms “qualified stock purchase” and “acquisition date” have the same respective meanings as when used in section 338.\n2014—Subsec. (a).  Pub. L. 113–295  struck out “or acquired on or after  October 8, 1940 ,” after “persons acquire,” in par. (1) and after “corporation acquires,” in par. (2).\n1984—Subsecs. (b), (c).  Pub. L. 98–369  added subsec. (b), redesignated former subsec. (b) as (c) and inserted reference to subsec. (b).\n1976—Subsecs. (a), (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(38) , struck out subsec. (c) relating to presumptions in the case of disproportionate purchase price.\n1964—Subsec. (a).  Pub. L. 88–272  substituted “the Secretary or his delegate may disallow such deduction, credit, or other allowance” for “such deduction, credit or other allowance shall not be allowed”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f712(k)(8)(C) ,  July 18, 1984 ,  98 Stat. 952 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to liquidations after  October 20, 1983 , in taxable years ending after such date.”\nPub. L. 88–272, title II, §\u202f235(d) ,  Feb. 26, 1964 ,  78 Stat. 127 , provided that:  “The amendments made by subsections (a) and (c) [enacting sections 1561 to 1563 of this title and amending this section and sections 441 and 802 of this title] shall apply with respect to taxable years ending after  December 31, 1963 . The amendment made by subsection (b) [amending  section 1551 of this title ] shall apply with respect to transfers made after  June 12, 1963 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'The term “personal service corporation” means a corporation the principal activity of which is the performance of personal services and such services are substantially performed by employee-owners.\nThe term “employee-owner” means any employee who owns, on any day during the taxable year, more than 10 percent of the outstanding stock of the personal service corporation. For purposes of the preceding sentence, section 318 shall apply, except that “5 percent” shall be substituted for “50 percent” in section 318(a)(2)(C).\nAll related persons (within the meaning of section 144(a)(3)) shall be treated as 1 entity.\n1986—Subsec. (b)(3).  Pub. L. 99–514  substituted “section 144(a)(3)” for “section 103(b)(6)(C)”.\nAmendment by  Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nPub. L. 97–248, title II, §\u202f250(c) ,  Sept. 3, 1982 ,  96 Stat. 529 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1982 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'The Secretary shall prescribe such regulations as may be necessary to prevent avoidance or evasion of Federal income tax through the use of stapled entities. Such regulations may include (but shall not be limited to) regulations providing the extent to which 1 of such entities shall be treated as owning the other entity (to the extent of the stapled interest) and regulations providing that any tax imposed on the foreign corporation referred to in subsection (a)(1) may, if not paid by such corporation, be collected from the domestic corporation referred to in such subsection or the shareholders of such foreign corporation.\nThe term “entity” means any corporation, partnership, trust, association, estate, or other form of carrying on a business or activity.\nThe term “stapled entities” means any group of 2 or more entities if more than 50 percent in value of the beneficial ownership in each of such entities consists of stapled interests.\nTwo or more interests are stapled interests if, by reason of form of ownership, restrictions on transfer, or other terms or conditions, in connection with the transfer of 1 of such interests the other such interests are also transferred or required to be transferred.\nNothing in section 894 or 7852(d) or in any other provision of law shall be construed as permitting an exemption, by reason of any treaty obligation of the United States heretofore or hereafter entered into, from the provisions of this section.\nSubsection (a)(1) shall not apply if it is established to the satisfaction of the Secretary that the domestic corporation and the foreign corporation referred to in such subsection are foreign owned.\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f1810(j)(1) , inserted “and regulations providing that any tax imposed on the foreign corporation referred to in subsection (a)(1) may, if not paid by such corporation, be collected from the domestic corporation referred to in such subsection or the shareholders of such foreign corporation”.\nSubsec. (e).  Pub. L. 99–514, §\u202f1810(j)(2) , added subsec. (e).\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f136(c) ,  July 18, 1984 ,  98 Stat. 670 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section] shall take effect on the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(2)   Interests stapled as of  june 30, 1983 .— Except as otherwise provided in this subsection, in the case of any interests which on  June 30, 1983 , were stapled interests (as defined in section 269B(c)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section)), the amendments made by this section shall take effect on  January 1, 1985  ( January 1, 1987 , in the case of stapled interests in a foreign corporation). \n \n “(3)   Certain stapled entities which include real estate investment trust .— Paragraph (3) of section 269B(a) of such Code shall not apply in determining the application of the provisions of part II of subchapter M of chapter 1 of such Code to any real estate investment trust which is part of a group of stapled entities if— “(A)  all members of such group were stapled entities as of  June 30, 1983 , and \n \n “(B)  as of  June 30, 1983 , such group included one or more real estate investment trusts. \n \n \n “(4)   Certain stapled entities which include puerto rican corporations.— “(A)  Paragraph (1) of section 269B(a) of such Code shall not apply to a domestic corporation and a qualified Puerto Rican corporation which, on  June 30, 1983 , were stapled entities. \n \n “(B)  For purposes of subparagraph (A), the term ‘qualified Puerto Rican corporation’ means any corporation organized in Puerto Rico— “(i)  which is described in section 957(c) of such Code or would be so described if any dividends it received from any other corporation described in such section 957(c) were treated as gross income of the type described in such section 957(c), and \n \n “(ii)  does not, at any time during the taxable year, own (within the meaning of section 958 of such Code but before applying paragraph (2) of section 269B(a) of such Code) any stock of any corporation which is not described in such section 957(c). \n \n \n \n “(5)   Treaty rule not to apply to stapled entities entitled to treaty benefits as of  june 30, 1983 .— In the case of any entity which was a stapled entity as of  June 30, 1983 , subsection (d) of section 269B of such Code shall not apply to any treaty benefit to which such entity was entitled as of  June 30, 1983 . \n \n “(6)   Elections to treat stapled foreign entities as subsidiaries.— “(A)   In general .— In the case of any foreign corporation and domestic corporation which as of  June 30, 1983 , were stapled entities, such domestic corporation may elect (in lieu of applying paragraph (1) of section 269B(a) of such Code) to be treated as owning all interests in the foreign corporation which constitute stapled interests with respect to stock of the domestic corporation. \n \n “(B)   Election .— Any election under subparagraph (A) shall be made not later than 180 days after the date of the enactment of this Act and shall be made in such manner as the Secretary of the Treasury or his delegate shall prescribe. \n \n “(C)   Election irrevocable .— Any election under subparagraph (A), once made, may be revoked only with the consent of the Secretary of the Treasury or his delegate. \n \n \n “(7)   Other stapled entities which include real estate investment trust.— “(A)   In general .— Paragraph (3) of section 269B(a) of such Code shall not apply in determining the application of the provisions of part II of subchapter M of chapter 1 of such Code to any qualified real estate investment trust which is a part of a group of stapled entities— “(i)  which was created pursuant to a written board of directors resolution adopted on  April 5, 1984 , and \n \n “(ii)  all members of such group were stapled entities as of  June 16, 1985 . \n \n \n “(B)   Qualified real estate investment trust .— The term ‘qualified real estate investment trust’ means any real estate trust— “(i)  at least 75 percent of the gross income of which is derived from interest on obligations secured by mortgages on real property (as defined in section 856 of such Code), \n \n “(ii)  with respect to which the interest on the obligations described in clause (i) made or acquired by such trust (other than to persons who are independent contractors, as defined in section 856(d)(3) of such Code) is at an arm’s length rate or a rate not more than 1 percentage point greater than the associated borrowing cost of the trust, and \n \n “(iii)  with respect to which any real property held by the trust is not used in the trade or business of any other member of the group of stapled entities.”\nPub. L. 105–206, title VII, §\u202f7002 ,  July 22, 1998 ,  112 Stat. 827 , provided that: \n “(a)   In General .— Notwithstanding paragraph (3) of section 136(c) of the Tax Reform Act of 1984 [ Pub. L. 98–369 , set out above] (relating to stapled stock; stapled entities), the REIT gross income provisions shall be applied by treating the activities and gross income of members of the stapled REIT group properly allocable to any nonqualified real property interest held by the exempt REIT or any stapled entity which is a member of such group (or treated under subsection (c) as held by such REIT or stapled entity) as the activities and gross income of the exempt REIT in the same manner as if the exempt REIT and such group were one entity. \n \n “(b)   Nonqualified Real Property Interest .— For purposes of this section— “(1)   In general .— The term ‘nonqualified real property interest’ means, with respect to any exempt REIT, any interest in real property acquired after  March 26, 1998 , by the exempt REIT or any stapled entity. \n \n “(2)   Exception for binding contracts, etc. — Such term shall not include any interest in real property acquired after  March 26, 1998 , by the exempt REIT or any stapled entity if— “(A)  the acquisition is pursuant to a written agreement (including a put option, buy-sell agreement, and an agreement relating to a third party default) which was binding on such date and at all times thereafter on such REIT or stapled entity; or \n \n “(B)  the acquisition is described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission. \n \n \n “(3)   Improvements and leases.— “(A)   In general .— Except as otherwise provided in this paragraph, the term ‘nonqualified real property interest’ shall not include— “(i)  any improvement to land owned or leased by the exempt REIT or any member of the stapled REIT group; and \n \n “(ii)  any repair to, or improvement of, any improvement owned or leased by the exempt REIT or any member of the stapled REIT group, \n \n\n \u2001\u2001if such ownership or leasehold interest is a qualified real property interest. \n \n “(B)   Leases .— The term ‘nonqualified real property interest’ shall not include— “(i)  any lease of a qualified real property interest if such lease is not otherwise such an interest; or \n \n “(ii)  any renewal of a lease which is a qualified real property interest, \n \n\n \u2001\u2001but only if the rent on any lease referred to in clause (i) or any renewal referred to in clause (ii) does not exceed an arm’s length rate. \n \n “(C)   Termination where change in use.— “(i)   In general .— Subparagraph (A) shall not apply to any improvement placed in service after  December 31, 1999 , which is part of a change in the use of the property to which such improvement relates unless the cost of such improvement does not exceed 200 percent of— \u2001\u2001\u2001\u2001\u2001“(I)  the cost of such property; or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  if such property is substituted basis property (as defined in section 7701(a)(42) of the Internal Revenue Code of 1986), the fair market value of the property at the time of acquisition. \n \n \n “(ii)   Binding contracts .— For purposes of clause (i), an improvement shall be treated as placed in service before  January 1, 2000 , if such improvement is placed in service before  January 1, 2004 , pursuant to a binding contract in effect on  December 31, 1999 , and at all times thereafter. \n \n \n \n “(4)   Exception for permitted transfers, etc. — The term ‘nonqualified real property interest’ shall not include any interest in real property acquired solely as a result of a direct or indirect contribution, distribution, or other transfer of such interest from the exempt REIT or any member of the stapled REIT group to such REIT or any such member, but only to the extent the aggregate of the interests of the exempt REIT and all stapled entities in such interest in real property (determined in accordance with subsection (c)(1)) is not increased by reason of the transfer. \n \n “(5)   Treatment of entities which are not stapled, etc. on  march 26, 1998 .— Notwithstanding any other provision of this section, all interests in real property held by an exempt REIT or any stapled entity with respect to such REIT (or treated under subsection (c) as held by such REIT or stapled entity) shall be treated as nonqualified real property interests unless— “(A)  such stapled entity was a stapled entity with respect to such REIT as of  March 26, 1998 , and at all times thereafter; and \n \n “(B)  as of  March 26, 1998 , and at all times thereafter, such REIT was a real estate investment trust. \n \n \n “(6)   Qualified real property interest .— The term ‘qualified real property interest’ means any interest in real property other than a nonqualified real property interest. \n \n \n “(c)   Treatment of Property Held by  10- Percent Subsidiaries .— For purposes of this section— “(1)   In general .— Any exempt REIT and any stapled entity shall be treated as holding their proportionate shares of each interest in real property held by any 10-percent subsidiary entity of the exempt REIT or stapled entity, as the case may be. \n \n “(2)   Property held by 10-percent subsidiaries treated as nonqualified.— “(A)   In general .— Except as provided in subparagraph (B), any interest in real property held by a 10-percent subsidiary entity of an exempt REIT or stapled entity shall be treated as a nonqualified real property interest. \n \n “(B)   Exception for interests in real property held on  march 26, 1998 , etc. — In the case of an entity which was a 10-percent subsidiary entity of an exempt REIT or stapled entity on  March 26, 1998 , and at all times thereafter, an interest in real property held by such subsidiary entity shall be treated as a qualified real property interest if such interest would be so treated if held or acquired directly by the exempt REIT or the stapled entity. \n \n \n “(3)   Reduction in qualified real property interests if increase in ownership of subsidiary .— If, after  March 26, 1998 , an exempt REIT or stapled entity increases its ownership interest in a subsidiary entity to which paragraph (2)(B) applies above its ownership interest in such subsidiary entity as of such date, the additional portion of each interest in real property which is treated as held by the exempt REIT or stapled entity by reason of such increased ownership shall be treated as a nonqualified real property interest. \n \n “(4)   Special rules for determining ownership .— For purposes of this subsection— “(A)  percentage ownership of an entity shall be determined in accordance with subsection (e)(4); \n \n “(B)  interests in the entity which are acquired by an exempt REIT or a member of the stapled REIT group in any acquisition described in an agreement, announcement, or filing described in subsection (b)(2) shall be treated as acquired on  March 26, 1998 ; and \n \n “(C)  except as provided in guidance prescribed by the Secretary, any change in proportionate ownership which is attributable solely to fluctuations in the relative fair market values of different classes of stock shall not be taken into account. \n \n \n “(5)   Treatment of 60-percent partnerships.— “(A)   In general .— If, as of  March 26, 1998 — “(i)  an exempt REIT or stapled entity held directly or indirectly at least 60 percent of the capital or profits interest in a partnership; and \n \n “(ii)  90 percent or more of the capital interests and 90 percent or more of the profits interests in such partnership (other than interests held directly or indirectly by the exempt REIT or stapled entity) are, or will be, redeemable or exchangeable for consideration the amount of which is determined by reference to the value of shares of stock in the exempt REIT or stapled entity (or both), \n \n\n \u2001\u2001paragraph (3) shall not apply to such partnership, and such REIT or entity shall be treated for all purposes of this section as holding all of the capital and profits interests in such partnership. \n \n “(B)   Limitation to one partnership .— If, as of  January 1, 1999 , more than one partnership owned by any exempt REIT or stapled entity meets the requirements of subparagraph (A), only the largest such partnership on such date (determined by aggregate asset bases) shall be treated as meeting such requirements. \n \n “(C)   Mirror entity .— For purposes of subparagraph (A), an interest in a partnership formed after  March 26, 1998 , shall be treated as held by an exempt REIT or stapled entity on  March 26, 1998 , if such partnership is formed to mirror the stapling of an exempt REIT and a stapled entity in connection with an acquisition agreed to or announced on or before  March 26, 1998 . \n \n \n \n “(d)   Treatment of Property Secured by Mortgage Held by Exempt REIT or Member of Stapled REIT Group.— “(1)   In general .— In the case of any nonqualified obligation held by an exempt REIT or any member of the stapled REIT group, the REIT gross income provisions shall be applied by treating the exempt REIT as having impermissible tenant service income equal to— “(A)  the interest income from such obligation which is properly allocable to the property described in paragraph (2); and \n \n “(B)  the income of any member of the stapled REIT group from services described in paragraph (2) with respect to such property. \n \n\n If the income referred to in subparagraph (A) or (B) is of a 10-percent subsidiary entity, only the portion of such income which is properly allocable to the exempt REIT’s or the stapled entity’s interest in the subsidiary entity shall be taken into account. \n \n “(2)   Nonqualified obligation .— Except as otherwise provided in this subsection, the term ‘nonqualified obligation’ means any obligation secured by a mortgage on an interest in real property if the income of any member of the stapled REIT group for services furnished with respect to such property would be impermissible tenant service income were such property held by the exempt REIT and such services furnished by the exempt REIT. \n \n “(3)   Exception for certain market rate obligations .— Such term shall not include any obligation— “(A)  payments under which would be treated as interest if received by a REIT; and \n \n “(B)  the rate of interest on which does not exceed an arm’s length rate. \n \n \n “(4)   Exception for existing obligations .— Such term shall not include any obligation— “(A)  which is secured on  March 26, 1998 , by an interest in real property; and \n \n “(B)  which is held on such date by the exempt REIT or any entity which is a member of the stapled REIT group on such date and at all times thereafter, \n \n\n but only so long as such obligation is secured by such interest, and the interest payable on such obligation is not changed to a rate which exceeds an arm’s length rate unless such change is pursuant to the terms of the obligation in effect on  March 26, 1998 . The preceding sentence shall not cease to apply by reason of the refinancing of the obligation if (immediately after the refinancing) the principal amount of the obligation resulting from the refinancing does not exceed the principal amount of the refinanced obligation (immediately before the refinancing) and the interest payable on such refinanced obligation does not exceed an arm’s length rate. \n \n “(5)   Treatment of entities which are not stapled, etc. on  march 26, 1998 .— A rule similar to the rule of subsection (b)(5) shall apply for purposes of this subsection. \n \n “(6)   Increase in amount of nonqualified obligations if increase in ownership of subsidiary .— A rule similar to the rule of subsection (c)(3) shall apply for purposes of this subsection. \n \n “(7)   Coordination with subsection  (a).— This subsection shall not apply to the portion of any interest in real property that the exempt REIT or stapled entity holds or is treated as holding under this section without regard to this subsection. \n \n \n “(e)   Definitions .— For purposes of this section— “(1)   REIT gross income provisions .— The term ‘REIT gross income provisions’ means— “(A)  paragraphs (2), (3), and (6) of section 856(c) of the Internal Revenue Code of 1986; and \n \n “(B)  section 857(b)(5) of such Code. \n \n \n “(2)   Exempt reit .— The term ‘exempt REIT’ means a real estate investment trust to which section 269B of the Internal Revenue Code of 1986 does not apply by reason of paragraph (3) of section 136(c) of the Tax Reform Act of 1984. \n \n “(3)   Stapled reit group .— The term ‘stapled REIT group’ means, with respect to an exempt REIT, the group consisting of— “(A)  all entities which are stapled entities with respect to the exempt REIT; and \n \n “(B)  all entities which are 10-percent subsidiary entities of the exempt REIT or any such stapled entity. \n \n \n “(4)  10- percent subsidiary entity.— “(A)   In general .— The term ‘10-percent subsidiary entity’ means, with respect to any exempt REIT or stapled entity, any entity in which the exempt REIT or stapled entity (as the case may be) directly or indirectly holds at least a 10-percent interest. \n \n “(B)   Exception for certain c corporation subsidiaries of reits .— A corporation which would, but for this subparagraph, be treated as a 10-percent subsidiary of an exempt REIT shall not be so treated if such corporation is taxable under section 11 of the Internal Revenue Code of 1986. \n \n “(C)  10- percent interest .— The term ‘10-percent interest’ means— “(i)  in the case of an interest in a corporation, ownership of 10 percent (by vote or value) of the stock in such corporation; \n \n “(ii)  in the case of an interest in a partnership, ownership of 10 percent of the capital or profits interest in the partnership; and \n \n “(iii)  in any other case, ownership of 10 percent of the beneficial interests in the entity. \n \n \n \n “(5)   Other definitions .— Terms used in this section which are used in section 269B or section 856 of such Code shall have the respective meanings given such terms by such section. \n \n \n “(f)   Guidance .— The Secretary may prescribe such guidance as may be necessary or appropriate to carry out the purposes of this section, including guidance to prevent the avoidance of such purposes and to prevent the double counting of income. \n \n “(g)   Effective Date .— This section shall apply to taxable years ending after  March 26, 1998 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 81 , related to the limitation on deductions allowable to certain individuals. See  section 183 of this title .\nRepeal applicable to taxable years beginning after  Dec. 31, 1969 , see  section 213(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 183 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'In the case of a taxpayer (other than a bank as defined in section 581) no deduction shall be allowed under section 166 (relating to bad debts) or under section 165(g) (relating to worthlessness of securities) by reason of the worthlessness of any debt owed by a political party.\nFor purposes of paragraph (1)(C), the term “contributions” includes a gift, subscription, loan, advance, or deposit, of money, or anything of value, and includes a contract, promise, or agreement to make a contribution, whether or not legally enforceable.\nFor purposes of paragraph (1)(C), the term “expenditures” includes a payment, distribution, loan, advance, deposit, or gift, of money, or anything of value, and includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.\n1976—Subsec. (c).  Pub. L. 94–455  added subsec. (c).\nPub. L. 94–455, title XXI, §\u202f2104(b) ,  Oct. 4, 1976 ,  90 Stat. 1902 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Where the disposal of coal or iron ore is covered by section 631, no deduction shall be allowed for expenditures attributable to the making and administering of the contract under which such disposition occurs and to the preservation of the economic interest retained under such contract, except that if in any taxable year such expenditures plus the adjusted depletion basis of the coal or iron ore disposed of in such taxable year exceed the amount realized under such contract, such excess, to the extent not availed of as a reduction of gain under section 1231, shall be a loss deductible under section 165(a). This section shall not apply to any taxable year during which there is no income under the contract.\n1964— Pub. L. 88–272  inserted “or domestic iron ore” in section catchline, and “or iron ore” wherever appearing in text.\nPub. L. 88–272, title II, §\u202f227(c) ,  Feb. 26, 1964 ,  78 Stat. 98 , provided that:  “The amendments made by this section [amending this section and sections 631, 1016, 1231, and 1402 and  section 411 of Title 42 , The Public Health and Welfare] shall apply with respect to amounts received or accrued in taxable years beginning after  December 31, 1963 , attributable to iron ore mined in such taxable years.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Amounts paid under the laws of a State, the District of Columbia, a possession of the United States, or a foreign country as income to the holder of a life or terminable interest acquired by gift, bequest, or inheritance shall not be reduced or diminished by any deduction for shrinkage (by whatever name called) in the value of such interest due to the lapse of time.\n1976— Pub. L. 94–455  struck out reference to amounts paid under laws of a Territory.\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'With respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, or\nWith respect to a facility used in connection with an activity referred to in subparagraph (A).\nNotwithstanding the preceding provisions of this subsection, no deduction shall be allowed under this chapter for amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or other social purpose.\nNo deduction shall be allowed under this chapter for the expense of any qualified transportation fringe (as defined in section 132(f)) provided to an employee of the taxpayer.\nIn the case of any individual who travels outside the United States away from home in pursuit of a trade or business or in pursuit of an activity described in section 212, no deduction shall be allowed under section 162 or section 212 for that portion of the expenses of such travel otherwise allowable under such section which, under regulations prescribed by the Secretary, is not allocable to such trade or business or to such activity.\nFor purposes of this subsection, travel outside the United States does not include any travel from one point in the United States to another point in the United States.\nExpenses for food and beverages (and facilities used in connection therewith) furnished on the business premises of the taxpayer primarily for his employees.\nExcept as provided in subparagraph (B), expenses for goods, services, and facilities, to the extent that the expenses are treated by the taxpayer, with respect to the recipient of the entertainment, amusement, or recreation, as compensation to an employee on the taxpayer’s return of tax under this chapter and as wages to such employee for purposes of chapter 24 (relating to withholding of income tax at source on wages).\nIn the case of a recipient who is a specified individual, subparagraph (A) and paragraph (9) shall each be applied by substituting “to the extent that the expenses do not exceed the amount of the expenses which” for “to the extent that the expenses”.\nExpenses for recreational, social, or similar activities (including facilities therefor) primarily for the benefit of employees (other than employees who are highly compensated employees (within the meaning of section 414(q))). For purposes of this paragraph, an individual owning less than a 10-percent interest in the taxpayer’s trade or business shall not be considered a shareholder or other owner, and for such purposes an individual shall be treated as owning any interest owned by a member of his family (within the meaning of section 267(c)(4)). This paragraph shall not apply for purposes of subsection (a)(3).\nExpenses incurred by a taxpayer which are directly related to business meetings of his employees, stockholders, agents, or directors.\nExpenses directly related and necessary to attendance at a business meeting or convention of any organization described in section 501(c)(6) (relating to business leagues, chambers of commerce, real estate boards, and boards of trade) and exempt from taxation under section 501(a).\nExpenses for goods, services, and facilities made available by the taxpayer to the general public.\nExpenses for goods or services (including the use of facilities) which are sold by the taxpayer in a bona fide transaction for an adequate and full consideration in money or money’s worth.\nExpenses paid or incurred by the taxpayer for goods, services, and facilities to the extent that the expenses are includible in the gross income of a recipient of the entertainment, amusement, or recreation who is not an employee of the taxpayer as compensation for services rendered or as a prize or award under section 74. The preceding sentence shall not apply to any amount paid or incurred by the taxpayer if such amount is required to be included (or would be so required except that the amount is less than $600) in any information return filed by such taxpayer under part III of subchapter A of chapter 61 and is not so included.\nThis section shall not apply to any deduction allowable to the taxpayer without regard to its connection with his trade or business (or with his income-producing activity). In the case of a taxpayer which is not an individual, the preceding sentence shall be applied as if it were an individual.\nFor purposes of this chapter, if deductions are disallowed under subsection (a) with respect to any portion of a facility, such portion shall be treated as an asset which is used for personal, living, and family purposes (and not as an asset used in the trade or business).\nThe term “North American area” means the United States, its possessions, and the Trust Territory of the Pacific Islands, and Canada and Mexico.\nThe term “cruise ship” means any vessel sailing within or without the territorial waters of the United States.\nFor purposes of this paragraph, the term “beneficiary country” has the meaning given to such term by section 212(a)(1)(A) of the Caribbean Basin Economic Recovery Act; except that such term shall include Bermuda.\nThe Secretary is authorized to negotiate and conclude an agreement for the exchange of information with any beneficiary country. Except as provided in clause (ii), an exchange of information agreement shall provide for the exchange of such information (not limited to information concerning nationals or residents of the United States or the beneficiary country) as may be necessary or appropriate to carry out and enforce the tax laws of the United States and the beneficiary country (whether criminal or civil proceedings), including information which may otherwise be subject to nondisclosure provisions of the local law of the beneficiary country such as provisions respecting bank secrecy and bearer shares. The exchange of information agreement shall be terminable by either country on reasonable notice and shall provide that information received by either country will be disclosed only to persons or authorities (including courts and administrative bodies) involved in the administration or oversight of, or in the determination of appeals in respect of, taxes of the United States or the beneficiary country and will be used by such persons or authorities only for such purposes.\nFor purposes of this subparagraph, the term “qualified confidential information” means information which is subject to the nondisclosure provisions of any local law of the beneficiary country regarding bank secrecy or ownership of bearer shares.\nFor purposes of this subparagraph, the determination of whether information is sought only for civil tax purposes shall be made by the requesting party.\nAny exchange of information agreement negotiated under subparagraph (C) shall be treated as an income tax convention for purposes of section 6103(k)(4). The Secretary may exercise his authority under subchapter A of chapter 78 to carry out any obligation of the United States under an agreement referred to in subparagraph (C).\nNo deduction shall be allowed under section 212 for expenses allocable to a convention, seminar, or similar meeting.\nFor purposes of subsection (d), the term “qualified nonpersonal use vehicle” means any vehicle which, by reason of its nature, is not likely to be used more than a de minimis amount for personal purposes.\nNo deduction shall be allowed under section 162 or section 212 for the cost of an employee achievement award except to the extent that such cost does not exceed the deduction limitations of paragraph (2).\nThe term “qualified plan award” means an employee achievement award awarded as part of an established written plan or program of the taxpayer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q)) as to eligibility or benefits.\nAn employee achievement award shall not be treated as a qualified plan award for any taxable year if the average cost of all employee achievement awards which are provided by the employer during the year, and which would be qualified plan awards but for this subparagraph, exceeds $400. For purposes of the preceding sentence, average cost shall be determined by including the entire cost of qualified plan awards, without taking into account employee achievement awards of nominal value.\nIn the case of an employee achievement award made by a partnership, the deduction limitations contained in paragraph (2) shall apply to the partnership as well as to each member thereof.\nAn item shall not be treated as having been provided for length of service achievement if the item is received during the recipient’s 1st 5 years of employment or if the recipient received a length of service achievement award (other than an award excludable under section 132(e)(1)) during that year or any of the prior 4 years.\nNo deduction shall be allowed under this chapter for any expense incurred for providing any transportation, or any payment or reimbursement, to an employee of the taxpayer in connection with travel between the employee’s residence and place of employment, except as necessary for ensuring the safety of the employee.\nIn the case of any qualified bicycle commuting reimbursement (as described in section 132(f)(5)(F)), this subsection shall not apply for any amounts paid or incurred after  December 31, 2017 , and before  January 1, 2026 .\nNo deduction shall be allowed under this chapter for expenses incurred for transportation by water to the extent such expenses exceed twice the aggregate per diem amounts for days of such transportation. For purposes of the preceding sentence, the term “per diem amounts” means the highest amount generally allowable with respect to a day to employees of the executive branch of the Federal Government for per diem while away from home but serving in the United States.\nNo deduction shall be allowed under this chapter for expenses for travel as a form of education.\nThe amount allowable as a deduction under this chapter for any expense for food or beverages shall not exceed 50 percent of the amount of such expense which would (but for this paragraph) be allowable as a deduction under this chapter.\nIn the case of any expenses for food or beverages consumed while away from home (within the meaning of section 162(a)(2)) by an individual during, or incident to, the period of duty subject to the hours of service limitations of the Department of Transportation, paragraph (1) shall be applied by substituting “80 percent” for “50 percent”.\nThe Secretary shall prescribe such regulations as he may deem necessary to carry out the purposes of this section, including regulations prescribing whether subsection (a) or subsection (b) applies in cases where both such subsections would otherwise apply.\nPub. L. 115–97, title I, §\u202f13304(d) , (e)(2),  Dec. 22, 2017 ,  131 Stat. 2126 , provided that, applicable to amounts incurred or paid after  Dec. 31, 2025 , this section is amended by redesignating subsection ( o ) as (p) and adding the following new subsection ( o ):\n(o) Meals provided at convenience of employer\nNo deduction shall be allowed under this chapter for—\n(1) any expense for the operation of a facility described in section 132(e)(2), and any expense for food or beverages, including under section 132(e)(1), associated with such facility, or\n(2) any expense for meals described in section 119(a).\nSee 2017 Amendment note below.\nSection 16 of the Securities Exchange Act of 1934, referred to in subsec. (e)(2)(B)(ii), is classified to  section 78p of Title 15 , Commerce and Trade.\nSection 212(a)(1)(A) of the Caribbean Basin Economic Recovery Act, referred to in subsec. (h)(6)(B), is classified to  section 2702(a)(1)(A) of Title 19 , Customs Duties.\n2020—Subsec. (n)(2)(D).  Pub. L. 116–260  added subpar. (D).\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13304(c)(1)(A) , substituted “recreation, or qualified transportation fringes” for “or recreation” in heading.\nSubsec. (a)(1).  Pub. L. 115–97, §\u202f13304(a)(1)(B) , struck out concluding provisions which read as follows: “In the case of an item described in subparagraph (A), the deduction shall in no event exceed the portion of such item which meets the requirements of subparagraph (A).”\nSubsec. (a)(1)(A).  Pub. L. 115–97, §\u202f13304(a)(1)(A) , struck out “unless the taxpayer establishes that the item was directly related to, or, in the case of an item directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise), that such item was associated with, the active conduct of the taxpayer’s trade or business,” after “or recreation,”.\nSubsec. (a)(2)(C).  Pub. L. 115–97, §\u202f13304(a)(1)(C) , struck out subpar. (C) which read as follows: “In the case of a club, paragraph (1)(B) shall apply unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer’s trade or business and that the item was directly related to the active conduct of such trade or business.”\nSubsec. (a)(4).  Pub. L. 115–97, §\u202f13304(c)(1)(B) , added par. (4).\nSubsec. (d).  Pub. L. 115–97, §\u202f13304(a)(2)(A)(ii) , in concluding provisions, struck out “,\u2000entertainment, amusement, recreation, or use of the facility or property,” after “travel” and substituted “(D) the business relationship to the taxpayer of the person receiving the benefit” for “(D) the business relationship to the taxpayer of persons entertained, using the facility or property, or receiving the gift”.\nSubsec. (d)(2) to (4).  Pub. L. 115–97, §\u202f13304(a)(2)(A)(i) , redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: “for any item with respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, or with respect to a facility used in connection with such an activity,”.\nSubsec. (j)(3)(A).  Pub. L. 115–97, §\u202f13310(a) , designated text of subpar. (A) as cl. (i) and inserted heading, redesignated former cls. (i) to (iii) as subcls. (I) to (III), respectively, of cl. (i), and added cl. (ii).\nSubsec. ( l ).  Pub. L. 115–97, §\u202f13304(a)(2)(B) , (c)(2), added subsec. ( l ) and struck out former subsec. ( l ) which related to additional limitations on entertainment tickets.\nSubsec. (n).  Pub. L. 115–97, §\u202f13304(a)(2)(C) , struck out “and entertainment” after “meal” in heading.\nSubsec. (n)(1).  Pub. L. 115–97, §\u202f13304(a)(2)(D) , amended par. (1) generally. Prior to amendment, par. (1) related to amount allowable as a deduction for meal and entertainment expenses.\nSubsec. (n)(2).  Pub. L. 115–97, §\u202f13304(a)(2)(E)(iv) , (b)(4), successively amended last sentence of concluding provisions, resulting in substitution of “in subparagraph (B)” for “in subparagraph (D)”.\nPub. L. 115–97, §\u202f13304(a)(2)(E)(iii) , (b)(3), which directed amendment of the “last sentence” of par. (2) by first substituting “of subparagraph (D)” for “of subparagraph (E)” and then “of subparagraph (C)” for “of subparagraph (D)”, were executed by making both substitutions in the first sentence of the concluding provisions, to reflect the probable intent of Congress.\nSubsec. (n)(2)(B).  Pub. L. 115–97, §\u202f13304(b)(1) , (2), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “such expense is excludable from the gross income of the recipient under section 132 by reason of subsection (e) thereof (relating to de minimis fringes),”.\nPub. L. 115–97, §\u202f13304(a)(2)(E)(i) , struck out “in the case of an expense for food or beverages,” before “such expense”.\nSubsec. (n)(2)(C).  Pub. L. 115–97, §\u202f13304(b)(2) , redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).\nPub. L. 115–97, §\u202f13304(a)(2)(E)(ii) , redesignated subpar. (D) as (C) and struck out former subpar. (C) which read as follows: “such expense is covered by a package involving a ticket described in subsection ( l )(1)(B),”.\nSubsec. (n)(2)(D), (E).  Pub. L. 115–97, §\u202f13304(a)(2)(E)(ii) , redesignated subpar. (E) as (D). Former subpar. (D) redesignated (C).\nSubsecs. ( o ), (p).  Pub. L. 115–97, §\u202f13304(d) , added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n2014—Subsec. (n)(3).  Pub. L. 113–295  struck out subpar. (A) designation and heading, substituted “substituting ‘80 percent’ for” for “substituting ‘the applicable percentage’ for”, and struck out subpar. (B) which listed the applicable percentage for taxable years 1998 to 2008 or thereafter.\n2005—Subsec. (e)(2)(B)(ii).  Pub. L. 109–135, §\u202f403(mm)(1) , (2), inserted “or a related party to the taxpayer” after “with respect to the taxpayer” in subcl. (I), “(or such related party)” after “the taxpayer” in subcl. (II), and “For purposes of this clause, a person is a related party with respect to another person if such person bears a relationship to such other person described in section 267(b) or 707(b).” at end.\n2004—Subsec. (e)(2).  Pub. L. 108–357  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Expenses for goods, services, and facilities, to the extent that the expenses are treated by the taxpayer, with respect to the recipient of the entertainment, amusement, or recreation, as compensation to an employee on the taxpayer’s return of tax under this chapter and as wages to such employee for purposes of chapter 24 (relating to withholding of income tax at source on wages).”\n1997—Subsec. (n)(3).  Pub. L. 105–34  added par. (3).\n1993—Subsec. (a)(3).  Pub. L. 103–66, §\u202f13210(a) , added par. (3).\nSubsec. (e)(4).  Pub. L. 103–66, §\u202f13210(b) , inserted at end “This paragraph shall not apply for purposes of subsection (a)(3).”\nSubsec. (m)(3).  Pub. L. 103–66, §\u202f13272(a) , added par. (3).\nSubsec. (n).  Pub. L. 103–66, §\u202f13209(a) , (b), substituted “50” for “80” in heading and in concluding provisions of par. (1).\n1990—Subsec. ( l )(2).  Pub. L. 101–508, §\u202f11802(b)(1) , in amending par. (2) generally, struck out “(A) In general” and subpar. (B) which provided for phasein deductions of skybox tickets in the 1987 and 1988 taxable years.\nSubsec. (n)(2).  Pub. L. 101–508, §\u202f11802(b)(2)(A)(ii) , (iii), substituted “described in subparagraph (D)” for “described in subparagraph (E)” and “of subparagraph (E)” for “of subparagraph (F)” in concluding provisions.\nSubsec. (n)(2)(D) to (F).  Pub. L. 101–508, §\u202f11802(b)(2)(A)(i) , redesignated subpars. (E) and (F) as (D) and (E), respectively, and struck out former subpar. (D) which read as follows: “in the case of an expense for food or beverages before  January 1, 1989 , such expense is an integral part of a qualified meeting,”.\nSubsec. (n)(3).  Pub. L. 101–508, §\u202f11802(b)(2)(B) , struck out par. (3) “Qualified meeting” which read as follows: “For purposes of paragraph (2)(D), the term ‘qualified meeting’ means any convention, seminar, annual meeting, or similar business program with respect to which—\n“(A) an expense for food or beverages is not separately stated,\n“(B) more than 50 percent of the participants are away from home,\n“(C) at least 40 individuals attend, and\n“(D) such food and beverages are part of a program which includes a speaker.”\n1989—Subsec. (n)(2).  Pub. L. 101–239, §\u202f7816(a) , added a new subpar. (E), substantially identical to former subpar. (E), and moved sentence formerly appearing between subpars. (E) and (F) to end of concluding provisions after subpar. (F).\nSubsec. (n)(2)(F)(i).  Pub. L. 101–239, §\u202f7841(d)(18) , inserted “any” before “Federal law”.\n1988—Subsec. (b)(1).  Pub. L. 100–647, §\u202f1018(u)(2) , related to execution of amendment by  Pub. L. 99–514, §\u202f122(c)(2) , see 1986 Amendment note below.\nSubsec. (h)(1), (2).  Pub. L. 100–647, §\u202f1001(g)(5) , substituted “trade or business and that” for “trade or business that”.\nSubsec. (k)(2).  Pub. L. 100–647, §\u202f1001(g)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Paragraph (1) shall not apply to any expense if subsection (a) does not apply to such expense by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e).”\nSubsec. (m)(1)(B)(ii).  Pub. L. 100–647, §\u202f1001(g)(3) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “any expense to which subsection (a) does not apply by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e).”\nSubsec. (n)(2).  Pub. L. 100–647, §\u202f6003(a) , struck out “or” at end of subpar. (D), substituted “,\u2000or” for the period at end of subpar. (E), and added subpar. (F) and flush sentence at end.\nPub. L. 100–647, §\u202f1001(g)(4)(A) , struck out “or” at end of subpar. (C), substituted “,\u2000or” for the period at end of subpar. (D), and added subpar. (E) and flush sentence at end.\nPub. L. 100–647, §\u202f1001(g)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “subsection (a) does not apply to such expense by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e),”.\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f122(c)(1) –(3), and  Pub. L. 100–647, §\u202f1018(u)(2) , made conforming amendments to subpars. (A) and (B) and struck out subpar. (C) which read as follows: “an item of tangible personal property which is awarded to an employee by reason of length of service, productivity, or safety achievement, but only to the extent that—\n“(i) the cost of such item to the taxpayer does not exceed $400, or\n“(ii) such item is a qualified plan award.”\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f122(c)(4) , struck out par. (3) relating to qualified plan award, defining such term in subpar. (A), and providing for average amount of awards in subpar. (B) and maximum amount per item in subpar. (C).\nSubsec. (e)(1).  Pub. L. 99–514, §\u202f142(a)(2)(A) , redesignated par. (2) as (1) and struck out former par. (1), business meals, which read as follows: “Expenses for food and beverages furnished to any individual under circumstances which (taking into account the surroundings in which furnished, the taxpayer’s trade, business, or income-producing activity and the relationship to such trade, business, or activity of the persons to whom the food and beverages are furnished) are of a type generally considered to be conducive to a business discussion.”\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f142(a)(2)(A) , redesignated par. (3) as (2). Former par. (2) redesignated (1).\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f142(a)(2) , redesignated par. (4) as (3) and substituted “paragraph (2)” for “paragraph (3)” in subpar. (A). Former par. (3) redesignated (2).\nSubsec. (e)(4).  Pub. L. 99–514, §\u202f1114(b)(6) , which directed the substitution of “highly compensated employees (within the meaning of section 414(q))” for “officers, shareholders or other owners, or highly compensated employees” in par. (5) was executed to par. (4) to reflect the probable intent of Congress, in view of the redesignation of par. (5) as (4) by  section 142(a)(2)(A) of Pub. L. 99–514 .\nPub. L. 99–514, §\u202f142(a)(2)(A) , redesignated par. (5) as (4). Former par. (4) redesignated (3).\nSubsec. (e)(5) to (10).  Pub. L. 99–514, §\u202f142(a)(2)(A) , redesignated pars. (5) to (10) as pars. (4) to (9), respectively.\nSubsec. (h).  Pub. L. 99–514, §\u202f142(c) , struck out “or 212” after “section 162” in introductory provisions of pars. (1), (2), and (5), in closing provisions of par. (2), and in par. (4)(A), struck out “or to an activity described in section 212 and” after “active conduct of his trade or business” in introductory provisions of pars. (1) and (2), and added par. (7).\nSubsec. (j).  Pub. L. 99–514, §\u202f122(d) , added subsec. (j). Former subsec. (j) redesignated (k).\nSubsec. (k).  Pub. L. 99–514, §\u202f142(a)(1) , added subsec. (k). Former subsec. (k) redesignated ( o ).\nSubsecs. ( l ) to (n).  Pub. L. 99–514, §\u202f142(b) , added subsecs. ( l ) to (n).\nSubsec. ( o ).  Pub. L. 99–514, §\u202f142(a)(1) , redesignated former subsec. (k) as ( o ).\n1985—Subsec. (d).  Pub. L. 99–44, §\u202f2(a) , inserted at end “This subsection shall not apply to any qualified nonpersonal use vehicle (as defined in subsection (i)).”\nPub. L. 99–44, §\u202f1(a) , substituted “adequate records or by sufficient evidence corroborating the taxpayer’s own statement” for “adequate contemporaneous records”, and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied as if “contemporaneous” had not been added to subsec. (d). See Effective Date of 1985 Amendment note below.\nSubsecs. (i), (j).  Pub. L. 99–44, §\u202f2(b) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1984—Subsec. (d).  Pub. L. 98–369, §\u202f179(b) , substituted, in introductory provisions, “No deduction or credit” for “No deduction” and, in provisions following par. (4), “adequate contemporaneous records” for “adequate records or by sufficient evidence corroborating his own statement” and “the facility or property” for “the facility” in two places, and added par. (4).\nSubsec. (h)(6)(D).  Pub. L. 98–369, §\u202f801(c) , substituted in heading “with other provisions” for “with section 6103” and in text inserted provision that the Secretary may exercise his authority under subchapter A of chapter 78 to carry out any obligations of the United States under an agreement referred to in subpar. (C).\n1983—Subsec. (e)(3).  Pub. L. 98–67, §\u202f102(a) , repealed amendments made by  Pub. L. 97–248 . See 1982 Amendment note below.\nSubsec. (h)(2).  Pub. L. 97–424, §\u202f543(a)(1) , inserted provisions relating to requirements of par. (5) and the description in section 212, and inserted the $2,000 limit relating to section 162 or 212.\nSubsec. (h)(5).  Pub. L. 97–424, §\u202f543(a)(2) , added par. (5).\nSubsec. (h)(6).  Pub. L. 98–67, §\u202f227(a) , added par. (6).\n1982—Subsec. (e)(3).  Pub. L. 97–248  provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after  June 30, 1983 , par. (3) is amended by inserting “subchapter A of” before “chapter 24”. Section 102(a), (b) of  Pub. L. 98–67, title I ,  Aug. 5, 1983 ,  97 Stat. 369 , repealed subtitle A (§§\u202f301–308) of title III of  Pub. L. 97–248  as of the close of  June 30, 1983 , and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted.\n1981—Subsec. (b)(1)(C).  Pub. L. 97–34, §\u202f265(a) , excluded from term “gift” an award for productivity, designated existing provisions as cl. (i), and as so designated, increased the limitation to $400 from $100, and added cl. (ii).\nSubsec. (b)(3).  Pub. L. 97–34, §\u202f265(b) , added par. (3).\n1980—Subsec. (a)(2)(C).  Pub. L. 96–222, §\u202f103(a)(10)(A) , struck out “country” after “the case of a”.\nSubsec. (e)(10).  Pub. L. 96–605  and  Pub. L. 96–598  made identical amendments by adding par. (10).\nSubsec. (h)  Pub. L. 96–608  substituted provision disallowing any deductions for expenses allocable to a convention, seminar, or other similar meeting outside the North American area unless, taking certain factors into account, it is as reasonable for the meeting to be held outside the North American area as within it, disallowing any deductions for a convention, seminar, or similar meeting held on any cruise ship, and defining North American area and cruise ship, for provision allowing deductions with respect to not more than 2 foreign conventions per year, limiting deductible transportation cost to not to exceed the cost of coach or economy air fare, permitting transportation costs to be fully deductible only if at least one-half of the days are devoted to business related activities, disallowing deductions for subsistence expenses unless the individual attends two-thirds of the business activities, limiting deductible subsistence costs to not to exceed the per diem rate for United States civil servants, defining foreign convention and subsistence expenses, providing that if transportation expenses or subsistence expenses are not separately stated or do not reflect the proper allocation all amounts paid be treated as subsistence expenses, and prescribing special reporting and substantiation requirements.\n1978—Subsec. (a)(1).  Pub. L. 95–600, §\u202f361(a) , substituted provisions allowing no deduction for expenses paid or incurred with respect to a facility which is used in conjunction with an activity which is of a type generally considered to constitute entertainment, amusement, or recreation for provisions allowing a deduction for expenses paid or incurred with respect to a facility if the facility used is primarily for the furtherance of the taxpayer’s business, and the expense is “directly related” to the active conduct of taxpayer’s business.\nSubsec. (a)(2)(C).  Pub. L. 95–600, §\u202f361(b) , as amended by  Pub. L. 96–222, §\u202f103(a)(10)(B) , added subpar. (C).\nSubsec. (h)(3).  Pub. L. 95–600, §\u202f701(g)(3) , substituted “at least one-half” for “more than one-half” in first sentence.\nSubsec. (h)(6)(D).  Pub. L. 95–600, §\u202f701(g)(1) , designated existing provisions as cl. (i), inserted introductory phrase “Except as provided in clause (ii)” and substituted “For the purposes” for “For purpose”, and added cl. (ii).\nSubsec. (h)(6)(E).  Pub. L. 95–600, §\u202f701(g)(2) , added subpar. (E).\n1976—Subsecs. (c)(1), (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (h).  Pub. L. 94–455, §\u202f602(a) , added subsec. (h). Former subsec. (h) redesignated (i).\nSubsec. (i).  Pub. L. 94–455 , §§\u202f602(a), 1906(b)(13)(A), redesignated former subsec. (h) as (i) and struck out “or his delegate” after “Secretary”.\n1964—Subsec. (c).  Pub. L. 88–272  limited subsec. (c) to individuals traveling outside the United States.\nPub. L. 116–260, div. EE, title II, §\u202f210(b) ,  Dec. 27, 2020 ,  134 Stat. 3066 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or incurred after  December 31, 2020 .”\nPub. L. 115–97, title I, §\u202f13304(e) ,  Dec. 22, 2017 ,  131 Stat. 2126 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 7701 of this title ] shall apply to amounts incurred or paid after  December 31, 2017 . \n \n “(2)   Effective date for elimination of deduction for meals provided at convenience of employer .— The amendments made by subsection (d) [amending this section] shall apply to amounts incurred or paid after  December 31, 2025 .”\nPub. L. 115–97, title I, §\u202f13310(b) ,  Dec. 22, 2017 ,  131 Stat. 2132 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or incurred after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f907(b) ,  Oct. 22, 2004 ,  118 Stat. 1655 , provided that:  “The amendment made by this section [amending this section] shall apply to expenses incurred after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 105–34, title IX, §\u202f969(b) ,  Aug. 5, 1997 ,  111 Stat. 897 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 103–66, title XIII, §\u202f13209(c) ,  Aug. 10, 1993 ,  107 Stat. 469 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1993 .”\nPub. L. 103–66, title XIII, §\u202f13210(c) ,  Aug. 10, 1993 ,  107 Stat. 469 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or incurred after  December 31, 1993 .”\nPub. L. 103–66, title XIII, §\u202f13272(b) ,  Aug. 10, 1993 ,  107 Stat. 542 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or incurred after  December 31, 1993 .”\nAmendment by  section 7816(a) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 1001(g)(1)–(4)(A), (5) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6003(b) ,  Nov. 10, 1988 ,  102 Stat. 3685 , provided that: \n “(1)  Clauses (i) and (ii) of section 274(n)(2)(F) [now 274(n)(2)(C)] of the 1986 Code, as added by subsection (a), shall apply to taxable years beginning after  December 31, 1988 . \n \n “(2)  Clauses (iii) and (iv) of section 274(n)(2)(F) [now 274(n)(2)(C)] of the 1986 Code, as added by subsection (a), shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by section 122(c), (d) of  Pub. L. 99–514  applicable to prizes and awards granted after  Dec. 31, 1986 , see  section 151(c) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by section 142(a)–(c) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1114(b)(6) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1114(c)(1) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nPub. L. 99–44, §\u202f6(a) –(c),  May 24, 1985 ,  99 Stat. 78 , 79, as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Repeals .— The amendment and repeals made by subsections (a) and (b) of section 1 [amending this section and repealing section 179(b)(2), (3) of  Pub. L. 98–369  which had amended sections 6653 and 6695 of this title] shall take effect as if included in the amendments made by section 179(b) of the Tax Reform Act of 1984 [ Pub. L. 98–369 ]. \n \n “(b)   Restoration of Prior Law for  1985.— For taxable years beginning in 1985, section 274(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply as it read before the amendments made by section 179(b)(1) of the Tax Reform Act of 1984 [ Pub. L. 98–369 , see 1984 Amendments note above]. \n \n “(c)   Exception From Substantiation Requirements for Qualified Nonpersonal Use Vehicles .— The amendments made by section 2 [amending this section] shall apply to taxable years beginning after  December 31, 1985 .”\nAmendment by  section 179(b)(1) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 179(d)(2) of Pub. L. 98–369 , set out as an Effective Date note under  section 280F of this title .\nAmendment by  section 801(c) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nPub. L. 98–67, title II, §\u202f222(b) ,  Aug. 5, 1983 ,  97 Stat. 397 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to conventions, seminars, or other meetings which begin after  June 30, 1983 .”\nPub. L. 97–424, title V, §\u202f543(b) ,  Jan. 6, 1983 ,  96 Stat. 2196 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1982 .”\nPub. L. 97–34, title II, §\u202f265(c) ,  Aug. 13, 1981 ,  95 Stat. 265 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending on or after the date of the enactment of this Act [ Aug. 13, 1981 ].”\nPub. L. 96–608, §\u202f4(b) ,  Dec. 28, 1980 ,  94 Stat. 3552 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) of this section [amending this section] shall apply to conventions, seminars, and meetings beginning after  December 31, 1980 , except that in the case of any convention, seminar, or meeting beginning after such date which was scheduled on or before such date, a person, in such manner as the Secretary of the Treasury or his delegate may prescribe, may elect to have the provisions of section 274(h) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] be applied to such convention seminar or meeting without regard to such amendment.”\nPub. L. 96–598, §\u202f5(b) ,  Dec. 24, 1980 ,  94 Stat. 3488 , and  Pub. L. 96–605, title I, §\u202f108(b) ,  Dec. 28, 1980 ,  94 Stat. 3525 , provided that:  “The amendment made by this section [amending this section] shall apply to any expenses paid or incurred after  December 31, 1980 , in taxable years ending after such date.”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title III, §\u202f361(c) ,  Nov. 6, 1978 ,  92 Stat. 2847 , provided that:  “The amendments made by this section [amending this section] shall apply to items paid or incurred after  December 31, 1978 , in taxable years ending after such date.”\nPub. L. 95–600, title VII, §\u202f701(g)(4) ,  Nov. 6, 1978 ,  92 Stat. 2904 , provided that:  “The amendments made by this subsection [amending this section] shall apply to conventions beginning after  December 31, 1976 .”\nPub. L. 94–455, title VI, §\u202f602(b) ,  Oct. 4, 1976 ,  90 Stat. 1574 , provided that:  “The amendments made by this section [amending this section] shall apply to conventions beginning after  December 31, 1976 .”\nPub. L. 88–272, title II, §\u202f217(b) ,  Feb. 26, 1964 ,  78 Stat. 57 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  December 31, 1962 , but only in respect of periods after such date.”\nSection applicable with respect to taxable years ending after  Dec. 31, 1962 , but only in respect of periods after such date, see  section 4(c) of Pub. L. 87–834 , set out as an Effective Date of 1962 Amendment note under  section 162 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 99–44, §\u202f5 ,  May 24, 1985 ,  99 Stat. 78 , provided that:  “Not later than  October 1, 1985 , the Secretary of the Treasury or his delegate shall prescribe regulations to carry out the provisions of this Act [amending sections 274, 280F, 3402, 6653, and 6695 of this title, and enacting provisions set out as notes under sections 274, 280F, 3402, and 6653 of this title] which shall fully reflect such provisions.”\nPub. L. 99–44, §\u202f1(c) ,  May 24, 1985 ,  99 Stat. 77 , provided that:  “Regulations issued before the date of the enactment of this Act [ May 24, 1985 ] to carry out the amendments made by paragraphs (1)(C), (2), and (3) of section 179(b) of the Tax Reform Act of 1984 [ Pub. L. 98–369 , amending sections 274, 6653, and 6695 of this title] shall have no force and effect.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFor treatment of use of automobile by I.R.S. special agent for purposes of this section and  section 132 of this title , see  section 1567 of Pub. L. 99–514 , set out as a note under  section 132 of this title .\nPub. L. 99–44, §\u202f1(a) ,  May 24, 1985 ,  99 Stat. 77 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided in part that:  “the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied and administered as if the word ‘contemporaneous’ had not been added [by  Pub. L. 98–369 ] to such subsection (d) [subsec. (d) of this section].”\nPub. L. 96–222, title I, §\u202f103(a)(10)(C) ,  Apr. 1, 1980 ,  94 Stat. 212 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(i)   In general .— Subsection (a) of section 274 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to disallowance of certain entertainment, etc., expenses) shall not apply to expenses paid or incurred by the taxpayer for goods, services, and facilities to the extent that the expenses are includible in the gross income of a recipient of the entertainment, amusement, or recreation who is not an employee of the taxpayer as compensation for services rendered or as a prize or award under section 74 of such Code. \n \n “(ii)   Information return requirement .— Clause (i) shall not apply to any amount paid or incurred by the taxpayer if such amount is required to be included in any information return filed by such taxpayer under part III of subchapter A of chapter 61 of such Code [section 6031 et seq. of this title] and is not so included. \n \n “(iii)   Application of subparagraph .— This subparagraph shall only apply with respect to expenses paid or incurred during 1979 or 1980.”\nFor termination of Trust Territory of the Pacific Islands, see note set out preceding  section 1681 of Title 48 , Territories and Insular Possessions.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'For disallowance of certain other taxes, see section 164(c).\nThe Federal Insurance Contributions Act, referred to in subsec. (a)(1)(A), is  act Aug. 16, 1954, ch. 736 , §§\u202f3101, 3102, 3111, 3112, 3121 to 3128,  68A Stat. 415 , which is classified generally to chapter 21 (§\u202f3101 et seq.) of this title. For complete classification of this Act to the Code, see  section 3128 of this title  and Tables.\nPub. L. 95–600, §\u202f701(t)(3)(B)  (effective  Oct. 4, 1976 , see  Pub. L. 95–600, §\u202f701(t)(5) , set out as an Effective Date of 1978 Amendment note under  section 859 of this title ) repealed  §\u202f1605(b)(1) of Pub. L. 94–455 , cited as a credit to this section, which had duplicated the amendment to subsec. (a)(6) made by  §\u202f1307(d)(2)(A) of Pub. L. 94–455 .\n2022—Subsec. (a)(6).  Pub. L. 117–169, §\u202f11003(b) , inserted “50A,” after “46,”.\nPub. L. 117–169, §\u202f10201(b) , inserted “37,” before “41”.\n2014—Subsec. (a).  Pub. L. 113–295  struck out “Paragraph (1) shall not apply to the tax imposed by section 59A.” at end of concluding provisions.\n2007—Subsec. (a)(4).  Pub. L. 110–172  substituted “if the taxpayer chooses to take to any extent the benefits of section 901.” for “if—\n“(A) the taxpayer chooses to take to any extent the benefits of section 901, or\n“(B) such taxes are paid or accrued with respect to foreign trade income (within the meaning of section 923(b)) of a FSC,.”\n2004—Subsec. (a).  Pub. L. 108–357, §\u202f101(b)(5)(B) , struck out at end of concluding provisions “A rule similar to the rule of section 943(d) shall apply for purposes of paragraph (4)(C).”\nSubsec. (a)(4).  Pub. L. 108–357, §\u202f101(b)(5)(A) , inserted “or” at end of subpar. (A), substituted period for “or” at end of subpar. (B), and struck out subpar. (C) which read as follows: “such taxes are paid or accrued with respect to qualifying foreign trade income (as defined in section 941).”\nSubsec. (a)(6).  Pub. L. 108–357, §\u202f802(b)(1) , inserted “45,” before “46,”.\n2000—Subsec. (a).  Pub. L. 106–519, §\u202f4(2)(B) , inserted at end “A rule similar to the rule of section 943(d) shall apply for purposes of paragraph (4)(C).”\nSubsec. (a)(4)(C).  Pub. L. 106–519, §\u202f4(2)(A) , added subpar. (C).\n1987—Subsec. (a)(6).  Pub. L. 100–203  substituted “46, and 54” for “and 46”.\n1986—Subsec. (a).  Pub. L. 99–499  inserted at end “Paragraph (1) shall not apply to the tax imposed by section 59A.”\n1984—Subsec. (a)(4).  Pub. L. 98–369, §\u202f801(d)(5) , inserted provision disallowing a deduction for income, war profits, and excess profits taxes if such taxes are paid or accrued with respect to foreign trade income, within the meaning of section 923(b), of a FSC.\nSubsec. (a)(6).  Pub. L. 98–369, §\u202f67(b)(2) , inserted reference to chapter 46.\n1983—Subsec. (a).  Pub. L. 98–21  inserted at end “Paragraph (1) shall not apply to any taxes to the extent such taxes are allowable as a deduction under section 164(f).”\nSubsec. (a)(1).  Pub. L. 98–67  repealed amendments made by  Pub. L. 97–248 . See 1982 Amendment note below.\n1982—Subsec. (a)(1).  Pub. L. 97–248  provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after  June 30, 1983 , par. (1) is amended by striking out “and” at end of subpar. (B), by substituting “;\u2000and” for the period at end of subpar. (C), and by inserting subpar. (D) relating to the tax withheld at source on interest, dividends, and patronage dividends under section 3451. Section 102(a), (b) of  Pub. L. 98–67, title I ,  Aug. 5, 1983 ,  97 Stat. 369 , repealed subtitle A (§§\u202f301–308) of title III of  Pub. L. 97–248  as of the close of  June 30, 1983 , and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted.\n1976—Subsec. (a)(1)(C).  Pub. L. 94–455, §\u202f1901(a)(39) , struck out “,\u2000and corresponding provisions of prior revenue laws” after “under section 3402”.\nSubsec. (a)(6).  Pub. L. 94–455 , §§\u202f1307(d)(2)(A), 1605(b)(1), inserted reference to chapters 41 and 44.\n1974—Subsec. (a)(6).  Pub. L. 93–406  added par. (6).\nAmendment by  section 10201(b) of Pub. L. 117–169  applicable to repurchases (within the meaning of  section 4501(c) of this title ) of stock after  Dec. 31, 2022 , see  section 10201(d) of Pub. L. 117–169 , set out as an Effective Date note under  section 4501 of this title .\nAmendment by  section 11003(b) of Pub. L. 117–169  applicable to sales after  Aug. 16, 2022 , see  section 11003(d) of Pub. L. 117–169 , set out as an Effective Date note under  section 5000D of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 101(b)(5) of Pub. L. 108–357  applicable to transactions after  Dec. 31, 2004 , see  section 101(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  section 802(b)(1) of Pub. L. 108–357  effective  Mar. 4, 2003 , see  section 802(d) of Pub. L. 108–357 , set out as an Effective Date note under  section 4985 of this title .\nAmendment by  Pub. L. 106–519  applicable to transactions after  Sept. 30, 2000 , with special rules relating to existing foreign sales corporations, see  section 5 of Pub. L. 106–519 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 100–203  applicable to consideration received after  Dec. 22, 1987 , in taxable years ending after such date, except not applicable in the case of any acquisition pursuant to a written binding contract in effect on  Dec. 15, 1987 , and at all times thereafter before the acquisition, see  section 10228(d) of Pub. L. 100–203 , set out as an Effective Date note under  section 5881 of this title .\nAmendment by  Pub. L. 99–499  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 516(c) of Pub. L. 99–499 , set out as a note under  section 26 of this title .\nAmendment by  section 67(b)(2) of Pub. L. 98–369  applicable to payments under agreements entered into or renewed after  June 14, 1984 , in taxable years ending after such date, with contracts entered into before  June 15, 1984 , which are amended after  June 14, 1984 , in any significant relevant aspect to be treated as a contract entered into after  June 14, 1984 , see  section 67(e) of Pub. L. 98–369 , set out as an Effective Date note under  section 280G of this title .\nAmendment by  section 801(d)(5) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 124(d)(2) of Pub. L. 98–21 , set out as a note under  section 1401 of this title .\nFor effective date of amendment by  section 1307(d)(2)(A) of Pub. L. 94–455 , see  section 1307(e) of Pub. L. 94–455 , set out as a note under  section 501 of this title .\nFor effective date of amendment by  section 1605(b)(1) of Pub. L. 94–455 , see  section 1608(d) of Pub. L. 94–455 , set out as a note under  section 856 of this title .\nAmendment by  section 1901(a)(39) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 93–406  applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , but, in the case of plans in existence on  Jan. 1, 1974 , amendment by  Pub. L. 93–406  applicable for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as a note under  section 410 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1963 , see  section 207(c) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 164 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'For disallowance of certain entertainment, etc., expenses, see section 274.\n1974—Subsecs. (c), (d).  Pub. L. 93–443  struck out subsec. (c) relating to advertising in a convention program of a national political convention, and redesignated subsec. (d) as (c).\n1968—Subsecs. (c), (d).  Pub. L. 90–364  added subsec. (c) and redesignated former subsec. (c) as (d).\nAmendment by  Pub. L. 93–443  applicable with respect to taxable years beginning after  Dec. 31, 1974 , see  section 410(c)(1) of Pub. L. 93–443 , set out as a note under  section 30101 of Title 52 , Voting and Elections.\nPub. L. 90–364, title I, §\u202f108(b) ,  June 28, 1968 ,  82 Stat. 269 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to amounts paid or incurred on or after  January 1, 1968 .”\nPub. L. 89–368, title III, §\u202f301(c) ,  Mar. 15, 1966 ,  80 Stat. 67 , provided that:  “The amendments made by subsections (a) and (b) [enacting this section] shall apply to taxable years beginning after  December 31, 1965 , but only with respect to amounts paid or incurred after the date of the enactment of this Act [ Mar. 15, 1966 ].”\nPub. L. 90–346 ,  June 18, 1968 ,  82 Stat. 183 , provided for advertising in a convention program of a national political convention, applicable with respect to amounts paid or incurred on or after  Jan. 1, 1968 , prior to repeal by  Pub. L. 93–625, §\u202f10(g) ,  Jan. 3, 1975 ,  88 Stat. 2119 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'In the case of a social club or other membership organization which is operated primarily to furnish services or goods to members and which is not exempt from taxation, deductions for the taxable year attributable to furnishing services, insurance, goods, or other items of value to members shall be allowed only to the extent of income derived during such year from members or transactions with members (including income derived during such year from institutes and trade shows which are primarily for the education of members). If for any taxable year such deductions exceed such income, the excess shall be treated as a deduction attributable to furnishing services, insurance, goods, or other items of value to members paid or incurred in the succeeding taxable year. The deductions provided by sections 243 and 245 (relating to dividends received by corporations) shall not be allowed to any organization to which this section applies for the taxable year.\nThe Securities Exchange Act of 1934, referred to in subsec. (b)(3), is  act June 6, 1934, ch. 404 ,  48 Stat. 881 , which is classified principally to chapter 2B (§\u202f78a et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 78a of Title 15  and Tables.\nThe Commodity Exchange Act, referred to in subsec. (b)(3), is  act Sept. 21, 1922, ch. 369 ,  42 Stat. 998 , which is classified generally to chapter 1 (§\u202f1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see  section 1 of Title 7  and Tables.\n2014—Subsec. (a).  Pub. L. 113–295  struck out “,\u2000244,” after “sections 243”.\n1986—Subsec. (b)(4).  Pub. L. 99–514  added par. (4).\n1976—Subsec. (a).  Pub. L. 94–568  provided that the deductions provided by sections 243, 244, and 245 (relating to dividends received by corporations) shall not be allowed to any organization to which this section applies for the taxable year.\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XVI, §\u202f1604(b) ,  Oct. 22, 1986 ,  100 Stat. 2769 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by  Pub. L. 94–568  applicable to taxable years beginning after  Oct. 20, 1976 , see  section 1(d) of Pub. L. 94–568 , set out as a note under  section 501 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1970 , see  section 121(g) of Pub. L. 91–172 , set out as an Effective Date of 1969 Amendment note under  section 511 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Section, added  Pub. L. 91–172, title II, §\u202f216(a) ,  Dec. 30, 1969 ,  83 Stat. 573 ; amended  Pub. L. 91–680, §\u202f1(a) , (b), (d),  Jan. 12, 1971 ,  84 Stat. 2064 ;  Pub. L. 94–455, title II, §\u202f207(b)(1) , (2),  Oct. 4, 1976 ,  90 Stat. 1538 , related to capital expenditures incurred in planting and developing citrus and almond groves, and certain capital expenditures of farming syndicates.\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the repeal of this section is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nRepeal applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Determinations are to be made as of the last day of any taxable year of the issuing corporation in which it issues any obligation to provide consideration for an acquisition described in subsection (b)(1) of stock in, or assets of, the acquired corporation.\nThe term “ratio of debt to equity” means the ratio which the total indebtedness of the issuing corporation bears to the sum of its money and all its other assets (in an amount equal to their adjusted basis for determining gain) less such total indebtedness.\nThe deduction of interest on any obligation shall not be disallowed under subsection (a) before the first taxable year of the issuing corporation as of the last day of which the application of either subparagraph (A) or subparagraph (B) of subsection (b)(4) results in such obligation being corporate acquisition indebtedness.\nExcept as provided in paragraphs (3), (4), and (5), if an obligation is determined to be corporate acquisition indebtedness as of the last day of any taxable year of the issuing corporation, it shall be corporate acquisition indebtedness for such taxable year and all subsequent taxable years.\nIf an obligation is determined to be corporate acquisition indebtedness as of the close of a taxable year of the issuing corporation in which clause (i) of subsection (c)(3)(A) applied, but would not be corporate acquisition indebtedness if the determination were made as of the close of the first taxable year of such corporation thereafter in which clause (ii) of subsection (c)(3)(A) could apply, such obligation shall be considered not to be corporate acquisition indebtedness for such later taxable year and all taxable years thereafter.\nIf an obligation which has been determined to be corporate acquisition indebtedness for any taxable year would not be such indebtedness for each of any 3 consecutive taxable years thereafter if subsection (b)(4) were applied as of the close of each of such 3 years, then such obligation shall not be corporate acquisition indebtedness for all taxable years after such 3 consecutive taxable years.\nIn the case of obligations issued to provide consideration for the acquisition of stock in another corporation, such obligations shall be corporate acquisition indebtedness for a taxable year only if at some time before the close of such year the issuing corporation owns 5 percent or more of the total combined voting power of all classes of stock entitled to vote of such other corporation.\nAn acquisition of stock of a corporation of which the issuing corporation is in control (as defined in section 368(c)) in a transaction in which gain or loss is not recognized shall be deemed an acquisition described in paragraph (1) of subsection (b) only if immediately before such transaction (1) the acquired corporation was in existence, and (2) the issuing corporation was not in control (as defined in section 368(c)) of such corporation.\nFor purposes of this section, the term “corporate acquisition indebtedness” does not include any indebtedness issued to any person to provide consideration for the acquisition of stock in, or assets of, any foreign corporation substantially all of the income of which, for the 3-year period ending with the date of such acquisition or for such part of such period as the foreign corporation was in existence, is from sources without the United States.\nIn any case in which the issuing corporation is a member of an affiliated group, the application of this section shall be determined, pursuant to regulations prescribed by the Secretary, by treating all of the members of the affiliated group in the aggregate as the issuing corporation, except that the ratio of debt to equity of, projected earnings of, and annual interest to be paid or incurred by any corporation (other than the issuing corporation determined without regard to this subsection) shall be included in the determinations required under subparagraphs (A) and (B) of subsection (b)(4) as of any day only if such corporation is a member of the affiliated group on such day, and, in determining projected earnings of such corporation under subsection (c)(3), there shall be taken into account only the earnings and profits of such corporation for the period during which it was a member of the affiliated group. For purposes of the preceding sentence, the term “affiliated group” has the meaning assigned to such term by section 1504(a), except that all corporations other than the acquired corporation shall be treated as includible corporations (without any exclusion under section 1504(b)) and the acquired corporation shall not be treated as an includible corporation.\nNo inference shall be drawn from any provision in this section that any instrument designated as a bond, debenture, note, or certificate or other evidence of indebtedness by its issuer represents an obligation or indebtedness of such issuer in applying any other provision of this title.\n2014—Subsec. (a)(2).  Pub. L. 113–295, §\u202f221(a)(47)(A)(i) , struck out “after  December 31, 1967 ,” after “(A) issued”.\nSubsec. (b).  Pub. L. 113–295, §\u202f221(a)(47)(A)(ii) , struck out “after  October 9, 1969 ,” after “evidence of indebtedness issued” in introductory provisions.\nSubsec. (d)(5).  Pub. L. 113–295, §\u202f221(a)(47)(A)(iii) , struck out “after  October 9, 1969 , and” after “some time”.\nSubsecs. (i), (j).  Pub. L. 113–295, §\u202f221(a)(47)(A)(iv) , redesignated subsec. (j) as (i) and struck out former subsec. (i). Prior to amendment, text of subsec. (i) read as follows: “For purposes of this section, an obligation shall not be corporate acquisition indebtedness if issued after  October 9, 1969 , to provide consideration for the acquisition of—\n“(1) stock or assets pursuant to a binding written contract which was in effect on  October 9, 1969 , and at all times thereafter before such acquisition, or\n“(2) stock in any corporation where the issuing corporation, on  October 9, 1969 , and at all times thereafter before such acquisition, owned at least 50 percent of the total combined voting power of all classes of stock entitled to vote of the acquired corporation.”\n1976—Subsecs. (c)(3)(B), (g).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nSubsec. (i).  Pub. L. 94–514  struck out provisions that par. (2) would cease to apply when (at any time on or after  October 9, 1969 ) the issuing corporation has acquired control (as defined in section 368(c)) of the acquired corporation.\nPub. L. 113–295, div. A, title II, §\u202f221(a)(47)(B) ,  Dec. 19, 2014 ,  128 Stat. 4045 , provided that:  \n “The amendments made by this paragraph [amending this section] shall not— \n “(i)  apply to obligations issued on or before  October 9, 1969  (determined in the same manner as under section 279 of the Internal Revenue Code of 1986 as in effect before such amendments), and \n \n “(ii)  be construed to require interest on obligations issued on or before  December 31, 1967 , to be taken into account under section 279(a)(2) of such Code (as in effect after such amendments).”\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 94–514, §\u202f1(b) ,  Oct. 15, 1976 ,  90 Stat. 2443 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  October 9, 1969 . If refund or credit of any overpayment of income tax resulting from the amendment made by subsection (a) [amending this section] is prevented on the date of the enactment of this Act [ Oct. 15, 1976 ], or at any time within one year after such date, by the operation of any law or rule of law, refund or credit of such overpayment may, nevertheless, be made or allowed if claim therefor is filed within one year from such date.”\nPub. L. 91–172, title IV, §\u202f411(c) ,  Dec. 30, 1969 ,  83 Stat. 608 , provided that:  “The amendments made by this section [enacting this section] shall apply to the determination of the allowability of the deduction of interest paid or incurred with respect to indebtedness incurred after  October 9, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Section, added  Pub. L. 94–455, title II, §\u202f210(a) ,  Oct. 4, 1976 ,  90 Stat. 1544 ; amended  Pub. L. 95–600, title VII, §\u202f701(m)(2) ,  Nov. 6, 1978 ,  92 Stat. 2907 ;  Pub. L. 97–354, §\u202f5(a)(25) ,  Oct. 19, 1982 ,  96 Stat. 1694 , related to certain expenditures incurred in the production of films, books, records, or similar property.\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the repeal of this section is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nRepeal applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Except as otherwise provided in this section, in the case of a taxpayer who is an individual or an S corporation, no deduction otherwise allowable under this chapter shall be allowed with respect to the use of a dwelling unit which is used by the taxpayer during the taxable year as a residence.\nSubsection (a) shall not apply to any deduction allowable to the taxpayer without regard to its connection with his trade or business (or with his income-producing activity).\nSubsection (a) shall not apply to any item to the extent such item is allocable to space within the dwelling unit which is used on a regular basis as a storage unit for the inventory or product samples of the taxpayer held for use in the taxpayer’s trade or business of selling products at retail or wholesale, but only if the dwelling unit is the sole fixed location of such trade or business.\nSubsection (a) shall not apply to any item which is attributable to the rental of the dwelling unit or portion thereof (determined after the application of subsection (e)).\nSubsection (a) shall not apply to any item to the extent that such item is allocable to the use of any portion of the dwelling unit on a regular basis in the taxpayer’s trade or business of providing day care for children, for individuals who have attained age 65, or for individuals who are physically or mentally incapable of caring for themselves.\nIf a portion of the taxpayer’s dwelling unit used for the purposes described in subparagraph (A) is not used exclusively for those purposes, the amount of the expenses attributable to that portion shall not exceed an amount which bears the same ratio to the total amount of the items allocable to such portion as the number of hours the portion is used for such purposes bears to the number of hours the portion is available for use.\nParagraphs (1) and (3) shall not apply to any item which is attributable to the rental of the dwelling unit (or any portion thereof) by the taxpayer to his employer during any period in which the taxpayer uses the dwelling unit (or portion) in performing services as an employee of the employer.\nA taxpayer shall not be treated as using a dwelling unit for personal purposes by reason of a rental arrangement for any period if for such period such dwelling unit is rented, at a fair rental, to any person for use as such person’s principal residence.\nSubparagraph (A) shall apply to a rental to a person who has an interest in the dwelling unit only if such rental is pursuant to a shared equity financing agreement.\nIn the case of a rental pursuant to a shared equity financing agreement, fair rental shall be determined as of the time the agreement is entered into and by taking into account the occupant’s qualified ownership interest.\nFor purposes of this paragraph, the term “qualified ownership interest” means an undivided interest for more than 50 years in the entire dwelling unit and appurtenant land being acquired in the transaction to which the shared equity financing agreement relates.\nFor purposes of applying subsection (c)(5) to deductions allocable to a qualified rental period, a taxpayer shall not be considered to have used a dwelling unit for personal purposes for any day during the taxable year which occurs before or after a qualified rental period described in subparagraph (B)(i), or before a qualified rental period described in subparagraph (B)(ii), if with respect to such day such unit constitutes the principal residence (within the meaning of section 121) of the taxpayer.\nIn any case where a taxpayer who is an individual or an S corporation uses a dwelling unit for personal purposes on any day during the taxable year (whether or not he is treated under this section as using such unit as a residence), the amount deductible under this chapter with respect to expenses attributable to the rental of the unit (or portion thereof) for the taxable year shall not exceed an amount which bears the same relationship to such expenses as the number of days during each year that the unit (or portion thereof) is rented at a fair rental bears to the total number of days during such year that the unit (or portion thereof) is used.\nThis subsection shall not apply with respect to deductions which would be allowable under this chapter for the taxable year whether or not such unit (or portion thereof) was rented.\nThe term “dwelling unit” includes a house, apartment, condominium, mobile home, boat, or similar property, and all structures or other property appurtenant to such dwelling unit.\nThe term “dwelling unit” does not include that portion of a unit which is used exclusively as a hotel, motel, inn, or similar establishment.\nIn the case of an S corporation, subparagraphs (A) and (B) of subsection (d)(2) shall be applied by substituting “any shareholder of the S corporation” for “the taxpayer” each place it appears.\nNothing in this section shall be construed to disallow any deduction allowable under section 162(a)(2) (or any deduction which meets the tests of section 162(a)(2) but is allowable under another provision of this title) by reason of the taxpayer’s being away from home in the pursuit of a trade or business (other than the trade or business of renting dwelling units).\nThe date of enactment of the Tax Reduction and Simplification Act of 1977, referred to in subsec. (c)(4)(B), is the date of enactment of  Pub. L. 95–30 ,  91 Stat. 126 , which was  May 23, 1977 .\n1997—Subsec. (c)(1).  Pub. L. 105–34, §\u202f932(a) , inserted at end “For purposes of subparagraph (A), the term ‘principal place of business’ includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business.”\nSubsec. (d)(4)(A).  Pub. L. 105–34, §\u202f312(d)(1) , substituted “section 121” for “section 1034”.\n1996—Subsec. (c)(1)(A).  Pub. L. 104–188, §\u202f1704(t)(39) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the principal place of business for any trade or business of the taxpayer.”\nSubsec. (c)(2).  Pub. L. 104–188, §\u202f1113(a) , substituted “inventory or product samples” for “inventory”.\n1988—Subsec. (c)(5).  Pub. L. 100–647  inserted “(or rental activity)” after “trade or business” in subpar. (B)(ii) and inserted at end “Any amount taken into account for any taxable year under the preceding sentence shall be subject to the limitation of the 1st sentence of this paragraph whether or not the dwelling unit is used as a residence during such taxable year.”\n1986—Subsec. (c)(5)(B).  Pub. L. 99–514, §\u202f143(c) , added subpar. (B) and struck out former subpar. (B) which read as follows: “the deductions allocable to such use which are allowable under this chapter for the taxable year whether or not such unit (or portion thereof) was so used.”\nSubsec. (c)(6).  Pub. L. 99–514, §\u202f143(b) , added par. (6).\n1982—Subsecs. (a), (e)(1).  Pub. L. 97–354, §\u202f5(a)(26)(A) , (B), substituted “an S corporation” for “an electing small business corporation”.\nSubsec. (f)(2).  Pub. L. 97–354, §\u202f5(a)(26)(C) , substituted “shareholders of S corporation” for “electing small business corporation” in subsec. heading, substituted “an S corporation” for “an electing small business corporation” and “any shareholder of the S corporation” for “any shareholder of the electing small business corporation”.\nSubsec. (f)(4).  Pub. L. 97–216  struck out “,\u2000etc.” after “section 162(a)(2)” in heading, struck out “(A) In general.—” before “Nothing in this section”, and struck out subpar. (B) which directed the Secretary to prescribe amounts deductible (without substantiation) pursuant to last sentence of section 162(a) and that no other provisions of this title could permit such a deduction for any taxable year of amounts in excess of the amounts determined to be appropriate under the circumstances.\n1981—Subsec. (c)(1)(A).  Pub. L. 97–119, §\u202f113(c) , substituted “the principal place of business for any trade or business of the taxpayer” for “as the taxpayer’s principal place of business”.\nSubsec. (d)(2).  Pub. L. 97–119, §\u202f113(d) , inserted in provision following subpar. (C) “,\u2000except that if the taxpayer is engaged in repair and maintenance on a substantially full time basis for any day, such authority shall not allow the Secretary to treat a dwelling unit as being used for personal use by the taxpayer on such day merely because other individuals who are on the premises on such day are not so engaged”.\nSubsec. (d)(3), (4).  Pub. L. 97–119, §\u202f113(a) , added par. (3), redesignated former par. (3) as (4) and struck out “to a person other than a member of the family (as defined in section 267(c)(4)) of the taxpayer” after “such unit is rented” in subpar. (B).\nSubsec. (f)(4).  Pub. L. 97–119, §\u202f113(b)(1) , added par. (4).\n1978—Subsec. (d)(3).  Pub. L. 95–600  added par. (3).\n1977—Subsec. (c)(4), (5).  Pub. L. 95–30  added par. (4), redesignated former par. (4) as (5) and substituted “paragraph (1), (2), or (4)” for “paragraph (1) or (2)” in introductory provisions.\nAmendment by  section 312(d)(1) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nPub. L. 105–34, title IX, §\u202f932(b) ,  Aug. 5, 1997 ,  111 Stat. 881 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1998 .”\nPub. L. 104–188, title I, §\u202f1113(b) ,  Aug. 20, 1996 ,  110 Stat. 1759 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1995 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–216  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 215(d) of Pub. L. 97–216 , set out as a note under  section 162 of this title .\nPub. L. 97–119, title I, §\u202f113(e) ,  Dec. 29, 1981 ,  95 Stat. 1642 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1975 , except that in the case of taxable years beginning after  December 31, 1975 , and before  January 1, 1980 , the amendment made by this section shall apply only to taxable years for which, on the date of the enactment of this Act [ Dec. 29, 1981 ], the making of a refund, or the assessment of a deficiency, was not barred by law or any rule of law.”\nPub. L. 95–600, title VII, §\u202f701(h)(2) ,  Nov. 6, 1978 ,  92 Stat. 2904 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in section 280A of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as such provision was added to such Code by section 601(a) of the Tax Reform Act of 1976 [ Pub. L. 94–455, title VI, §\u202f601(a) ,  Oct. 4, 1976 ,  90 Stat. 1569 ].”\nPub. L. 95–30, title III, §\u202f306(c) ,  May 23, 1977 ,  91 Stat. 153 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 94–455, title VI, §\u202f601(c) ,  Oct. 4, 1976 ,  90 Stat. 1572 , provided that:  “The amendments made by this section [enacting this section and amending the analysis of sections preceding  section 261 of this title ] shall apply to taxable years beginning after  December 31, 1975 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': '1984— Pub. L. 98–369  struck out “certain historic” before “structures” in section catchline, struck out heading “(a) General rule”, substituted “In the case of the demolition of any structure” for “In the case of the demolition of a certified historic structure (as defined in 48(g)(3)(A))” in text, and struck out subsecs. (b) and (c) which contained provisions relating to a special rule for registered historic districts and to the application of this section, respectively.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f212(d)(2)(C)(i) , substituted “48(g)(3)(A)” for “section 191(d)(1)” in provisions preceding par. (1).\nSubsec. (b).  Pub. L. 97–34, §\u202f212(d)(2)(C)(ii) , substituted “section 48(g)(3)(B)” for “section 191(d)(2)”.\n1980—Subsec. (c).  Pub. L. 96–541  added subsec. (c).\n1978—Subsec. (b).  Pub. L. 95–600  substituted “registered historic district (as defined in section 191(d)(2))” for “Registered Historic District” and “Secretary of the Interior has certified that such structure is not a certified historic structure, and that such structure is not of historic significance to the district, and if such certification occurs after the beginning of the demolition of such structure, the taxpayer has certified to the Secretary that, at the time of such demolition, he in good faith was not aware of the certification requirement by the Secretary of the Interior” for “Secretary of the Interior has certified, prior to the demolition of such structure, that such structure is not of historic significance to the district”.\nPub. L. 98–369, div. A, title X, §\u202f1063(c) ,  July 18, 1984 ,  98 Stat. 1047 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1878(h) ,  Oct. 22, 1986 ,  100 Stat. 2904 , provided that: \n “(1)  The amendments made by this section [amending this section] shall apply to taxable years ending after  December 31, 1983 , but shall not apply to any demolition (other than of a certified historic structure) commencing before  July 19, 1984 . \n \n “(2)  For purposes of paragraph (1), if a demolition is delayed until the completion of the replacement structure on the same site, the demolition shall be treated as commencing when construction of the replacement structure commences. \n \n “(3)  The amendments made by this section [amending this section] shall not apply to any demolition commencing before  September 1, 1984 , pursuant to a bank headquarters building project if— “(A)  on  April 1, 1984 , a corporation was retained to advise the bank on the final completion of the project, and \n \n “(B)  on  June 12, 1984 , the Comptroller of the Currency approved the project. \n \n \n “(4)  The amendments made by this section shall not apply to the remaining adjusted basis at the time of demolition of any structure if— “(A)  such structure was used in the manufacture, storage, or distribution of lead alkyl antiknock products and intermediate and related products at facilities located in or near Baton Rouge, Louisiana, and Houston, Texas, owned by the same corporation, and \n \n “(B)  demolition of at least one such structure at the Baton Rouge facility commenced before  January 1, 1984 .”\nAmendment by  Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after such date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 95–600  effective as if included within the enactment of this section by  section 2124 of Pub. L. 94–455 , see  section 701(f)(8) of Pub. L. 95–600 , set out as an Effective and Termination Dates of 1978 Amendments note under  section 167 of this title .\nPub. L. 94–455, title XXI, §\u202f2124(b)(3) ,  Oct. 4, 1976 ,  90 Stat. 1918 , which had provided that enactment of this section by subsec. (b) shall apply with respect to demolitions commencing after  June 30, 1976 , and before  Jan. 1, 1981 , was repealed by  Pub. L. 96–541, §\u202f2(e)(2) ,  Dec. 17, 1980 ,  94 Stat. 3205 . See subsec. (c) of this section.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'No deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the sum of the credits determined for the taxable year under sections 45A(a), 45P(a), 45S(a), 51(a), and 1396(a). In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 52(a)) or a trade or business which is treated as being under common control with other trades or businesses (within the meaning of section 52(b)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subsections (a) and (b) of section 52.\nNo deduction shall be allowed for that portion of the qualified clinical testing expenses (as defined in section 45C(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit allowable for the taxable year under section 45C (determined without regard to section 38(c)).\nAn election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year (including extensions), shall be made on such return, and shall be made in such manner as the Secretary shall prescribe. Such an election, once made, shall be irrevocable.\nIn the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 41(f)(5)) or a trade or business which is treated as being under common control with other trades or business (within the meaning of section 41(f)(1)(B)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subparagraphs (A) and (B) of section 41(f)(1).\nAn election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year (including extensions), shall be made on such return, and shall be made in such manner as the Secretary may prescribe. Such an election, once made, shall be irrevocable.\nParagraph (3) of subsection (b) shall apply for purposes of this subsection.\nThe deductions otherwise allowed under this chapter for the taxable year shall be reduced by the amount of the credit determined for the taxable year under section 45H(a).\nNo deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for the taxable year under section 45N(a).\nNo deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction taken into account in determining the credit under section 45O for the taxable year which is equal to the amount of the credit determined for such taxable year under section 45O(a).\nNo deduction shall be allowed for the portion of the premiums paid by the taxpayer for coverage of 1 or more individuals under a qualified health plan which is equal to the amount of the credit determined for the taxable year under section 36B(a) with respect to such premiums.\nNo deduction shall be allowed for that portion of the premiums for qualified health plans (as defined in section 1301(a) of the Patient Protection and Affordable Care Act), or for health insurance coverage in the case of taxable years beginning in 2010, 2011, 2012, or 2013, paid by an employer which is equal to the amount of the credit determined under section 45R(a) with respect to the premiums.\nSection 1301(a) of the Patient Protection and Affordable Care Act, referred to in subsec. (h), is classified to  section 18021(a) of Title 42 , The Public Health and Welfare.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2018—Subsec. (a).  Pub. L. 115–141, §\u202f401(d)(6)(B)(iv) , substituted “and 1396(a)” for “1396(a), 1400P(b), and 1400R”.\nPub. L. 115–141, §\u202f401(a)(62) , substituted “1396(a),” for “and 1396(a),”.\nSubsec. (g).  Pub. L. 115–141, §\u202f401(d)(3)(B)(iii) , struck out subsec. (g) relating to qualifying therapeutic discovery project credit.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13403(d)(1) , inserted “45S(a),” after “45P(a),”.\nSubsec. (b)(3), (4).  Pub. L. 115–97, §\u202f13401(b) , added par. (3) and redesignated former par. (3) as (4).\nSubsec. (c)(1).  Pub. L. 115–97, §\u202f13206(d)(2)(A) , added par. (1) and struck out former par. (1). Prior to amendment, text read as follows: “No deduction shall be allowed for that portion of the qualified research expenses (as defined in section 41(b)) or basic research expenses (as defined in section 41(e)(2)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for such taxable year under section 41(a).”\nSubsec. (c)(2).  Pub. L. 115–97, §\u202f13206(d)(2)(B) –(D), redesignated par. (3) as (2), substituted “paragraph (1)” for “paragraphs (1) and (2)” in subpar. (A)(i), and struck out former par. (2) which related to rule where taxpayer capitalizes rather than deducts expenses.\nSubsec. (c)(3).  Pub. L. 115–97, §\u202f13206(d)(2)(C) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nSubsec. (c)(3)(B)(ii)(II).  Pub. L. 115–97, §\u202f13001(b)(1)(A) , substituted “section 11(b)” for “section 11(b)(1)”.\nSubsec. (c)(4).  Pub. L. 115–97, §\u202f13206(d)(2)(C) , redesignated par. (4) as (3).\n2010—Subsec. (g).  Pub. L. 111–148, §\u202f9023(c)(2) , added subsec. (g) relating to qualifying therapeutic discovery project credit.\nPub. L. 111–148, §\u202f1401(b) , added subsec. (g) relating to credit for health insurance premiums.\nSubsec. (h).  Pub. L. 111–148, §\u202f10105(e)(3) , substituted “2010, 2011” for “2011”.\nPub. L. 111–148, §\u202f1421(d)(1) , added subsec. (h).\n2008—Subsec. (a).  Pub. L. 110–245  inserted “45P(a),” after “45A(a),”.\nSubsec. (f).  Pub. L. 110–246, §\u202f15343(c) , added subsec. (f).\n2007—Subsec. (d).  Pub. L. 110–172  amended heading and text generally. Prior to amendment, text read as follows: “No deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for the taxable year under section 45H(a).”\n2006—Subsec. (e).  Pub. L. 109–432  added subsec. (e).\n2005—Subsec. (a).  Pub. L. 109–135, §\u202f201(b)(2) , substituted “1400P(b), and 1400R” for “and 1400P(b)”.\nPub. L. 109–135, §\u202f103(b)(2) , substituted “1396(a), and 1400P(b)” for “and 1396(a)”.\n2004—Subsec. (d).  Pub. L. 108–357  added subsec. (d).\n2000—Subsec. (c)(1).  Pub. L. 106–554  struck out “or credit” after “deduction” in two places.\n1999—Subsec. (c)(1).  Pub. L. 106–170  inserted “or credit” after “deduction” in two places.\n1996—Subsec. (b)(1).  Pub. L. 104–188, §\u202f1205(d)(7) , substituted “section 45C(b)” for “section 28(b)”, “section 45C” for “section 28”, and “section 38(c)” for “subsection (d)(2) thereof”.\nSubsec. (b)(2)(A).  Pub. L. 104–188, §\u202f1205(d)(7)(B) , (C), substituted “section 45C” for “section 28” and “section 38(c)” for “subsection (d)(2) thereof”.\n1993—Subsec. (a).  Pub. L. 103–66, §\u202f13322(c)(1) , substituted “45A(a), 51(a), and” for “51(a)”.\nPub. L. 103–66, §\u202f13302(b)(1) , substituted “Rule for employment credits” for “Rule for targeted jobs credit” in heading and “the sum of the credits determined for the taxable year under sections 51(a) and 1396(a)” for “the amount of the credit determined for the taxable year under section 51(a)” in text.\n1989—Subsec. (c)(1), (2)(A).  Pub. L. 101–239, §\u202f7110(c)(1) , struck out “50 percent of” before “the amount of the credit”.\nSubsec. (c)(3).  Pub. L. 101–239, §\u202f7814(e)(2)(A) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (c)(3)(B)(ii)(I).  Pub. L. 101–239, §\u202f7110(c)(1) , struck out “50 percent of” before “the amount described”.\nSubsec. (c)(4).  Pub. L. 101–239, §\u202f7814(e)(2)(A) , redesignated par. (3) as (4).\n1988—Subsec. (c).  Pub. L. 100–647  added subsec. (c).\n1986—Subsec. (b)(1), (2)(A).  Pub. L. 99–514, §\u202f1847(b)(8) , substituted “section 28(b)” for “section 29(b)” in par. (1) and “section 28” for “section 29” in pars. (1) and (2)(A).\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f231(d)(3)(E) , substituted “section 41(f)(5)”, “section 41(f)(1)(B)”, and “section 41(f)(1)” for “section 30(f)(5)”, “section 30(f)(1)(B)”, and “section 30(f)(1)”, respectively.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f474(r)(10)(A) , (B), redesignated subsec. (b) as (a), in heading substituted “targeted jobs credit” for “section 44B credit”, and in text substituted “No deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the amount of the credit determined for the taxable year under section 51(a)” for “No deduction shall be allowed for that portion of the wage or salaries paid or incurred for the taxable year which is equal to the amount of the credit allowable for the taxable year under section 44B (relating to credit for employment of certain new employees) determined without regard to the provisions of section 53 (relating to limitation based on amount of tax)”. Former subsec. (a), which had provided that no deduction would be allowed for that portion of the work incentive program expenses paid or incurred for the taxable year which was equal to the amount of the credit allowable for the taxable year under section 40 (relating to credit for expenses of work incentive programs) determined without regard to the provisions of section 50A(a)(2) (relating to limitation based on amount of tax), and that in the case of a corporation which was a member of a controlled group of corporations (within the meaning of section 50B(g)(1) or a trade or business which was treated as being under common control with other trades or businesses within the meaning of section 50B(g)(2), this subsection would be applied under rules prescribed by the Secretary similar to the rules applicable under paragraphs (1) and (2) of section 50B(g), was struck out.\nSubsec. (b).  Pub. L. 98–369, §\u202f474(r)(10)(A) , redesignated subsec. (c) as (b). Former subsec. (b) redesignated (a).\nSubsec. (b)(1), (2)(A).  Pub. L. 98–369, §\u202f474(r)(10)(C) , substituted “29” for “44H”.\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f474(r)(10)(D) , substituted “section 30(f)(5)” for “section 44F(f)(5)”, “section 30(f)(1)(B)” for “section 44F(f)(1)(B)”, and “section 30(f)(1)” for “section 44F(f)(1)”.\nSubsec. (c).  Pub. L. 98–369, §\u202f474(r)(10)(A) , redesignated subsec. (c) as (b).\n1983— Pub. L. 97–414, §\u202f4(b)(2)(A) , substituted “Certain expenses for which credits are allowable” for “Portion of wages for which credit is claimed under section 40 or 44B” in section catchline.\nSubsec. (c).  Pub. L. 97–414, §\u202f4(b)(1) , added subsec. (c).\n1978— Pub. L. 95–600 , as amended by  Pub. L. 96–178  and  Pub. L. 96–222 , substituted “section 40 or 44B” for “section 44B” in section catchline, and in text designated existing provisions as subsec. (b) and added subsec. (a).\nAmendment by  section 13001(b)(1)(A) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13206(d)(2) of Pub. L. 115–97  applicable to amounts paid or incurred in taxable years beginning after  Dec. 31, 2021 , see  section 13206(e) of Pub. L. 115–97 , set out as a note under  section 41 of this title .\nAmendment by  section 13401(b) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13401(c) of Pub. L. 115–97 , set out as a note under  section 45C of this title .\nAmendment by  section 13403(d)(1) of Pub. L. 115–97  applicable to wages paid in taxable years beginning after  Dec. 31, 2017 , see  section 13403(e) of Pub. L. 115–97 , set out as a note under  section 38 of this title .\nAmendment by  section 1401(b) of Pub. L. 111–148  applicable to taxable years ending after  Dec. 31, 2013 , see  section 1401(e) of Pub. L. 111–148 , set out as a note under  section 36B of this title .\nAmendment by  section 1421(d)(1) of Pub. L. 111–148  applicable to amounts paid or incurred in taxable years beginning after  Dec. 31, 2009 , see  section 1421(f)(1) of Pub. L. 111–148 , set out as a note under  section 38 of this title .\nAmendment by  section 9023(c)(2) of Pub. L. 111–148  applicable to amounts paid or incurred after  Dec. 31, 2008 , in taxable years beginning after such date, see  section 9023(f) of Pub. L. 111–148 , set out as a note under  section 46 of this title .\nAmendment by  section 10105(e)(3) of Pub. L. 111–148  effective as if included in the enactment of  section 1421 of Pub. L. 111–148 , see  section 10105(e)(5) of Pub. L. 111–148 , set out as a note under  section 45R of this title .\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nAmendment by  section 15343(c) of Pub. L. 110–246  applicable to amounts paid or incurred after  June 18, 2008 , see  section 15343(e) of Pub. L. 110–246 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 110–245  applicable to amounts paid after  June 17, 2008 , see  section 111(e) of Pub. L. 110–245 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 7(e) of Pub. L. 110–172 , set out as a note under  section 1092 of this title .\nAmendment by  Pub. L. 109–432  applicable to taxable years beginning after  Dec. 31, 2005 , see  section 405(e) of Pub. L. 109–432 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 339(f) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f311(d)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–640, provided that:  “Subsection (c) [not classified to the Code] and the amendments made by this section [amending this section and former section 30A and  section 857 of this title ] shall take effect as if included in the provisions of the Ticket to Work and Work Incentives Improvement Act of 1999 [ Pub. L. 106–170 , see Tables for classification] to which they relate.”\nAmendment by  Pub. L. 106–170  applicable to amounts paid or incurred after  June 30, 1999 , see  section 502(c)(3) of Pub. L. 106–170 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 104–188  applicable to amounts paid or incurred in taxable years ending after  June 30, 1996 , see  section 1205(e) of Pub. L. 104–188 , set out as a note under  section 45K of this title .\nAmendment by  section 13322(c)(1) of Pub. L. 103–66  applicable to wages paid or incurred after  Dec. 31, 1993 , see  section 13322(f) of Pub. L. 103–66 , set out as a note under  section 38 of this title .\nAmendment by  section 7110(c)(1) of Pub. L. 101–239  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 7110(e) of Pub. L. 101–239 , set out as a note under  section 41 of this title .\nAmendment by  section 7814(e)(2)(A) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1988 , see  section 4008(d) of Pub. L. 100–647 , set out as a note under  section 41 of this title .\nAmendment by  section 231(d)(3)(E) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nAmendment by  section 1847(b)(8) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–414  applicable to amounts paid or incurred after  December 31, 1982 , in taxable years ending after such date, see  section 4(d) of Pub. L. 97–414 , set out as an Effective Date note under  section 28 of this title .\nPub. L. 95–600, title III, §\u202f322(e) ,  Nov. 6, 1978 ,  92 Stat. 2839 , as amended by  Pub. L. 96–178, §\u202f6(a) , (b),  Jan. 2, 1980 ,  93 Stat. 1297 ;  Pub. L. 96–222, title I, §\u202f103(a)(7)(A) , (B),  Apr. 1, 1980 ,  94 Stat. 211 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 50A and 50B of this title] shall apply to work incentive program expenses paid or incurred after  December 31, 1978 , in taxable years ending after such date; except that so much of the amendment made by subsection (a) as affects section 50A(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to taxable years beginning after  December 31, 1978 . For purposes of applying section 50A(a)(2) of the Internal Revenue Code of 1986 with respect to a taxable year beginning before  January 1, 1979 , the rules of sections 50A(a)(4), 50A(a)(5), and 50B(e)(3) of such Code (as in effect on the day before the date of the enactment of this Act [ Nov. 6, 1978 ] shall apply. \n \n “(2)   Special rules for certain eligible employees.— “(A)   Eligible employees hired before  september 27, 1978 .— In the case of any eligible employee (as defined in section 50B(h)) hired before  September 27, 1978 , no credit shall be allowed under section 40 with respect to second-year work incentive program expenses (as defined in section 50B(a)) attributable to service performed by such employee. \n \n “(B)   Eligible employees hired after  september 26, 1978 .— In the case of any eligible employee (as defined in section 50B(h)) hired after  September 26, 1978 , for purposes of applying the amendments made by this section, such individual shall be treated for purposes of the credit allowed by section 40 as having first begun work for the taxpayer not earlier than  January 1, 1979 , and any wages paid or incurred after  December 31, 1978 , with respect to such individual shall be considered to be attributable to services rendered after that date.”\n[ Pub. L. 96–178, §\u202f6(d) ,  Jan. 2, 1980 ,  93 Stat. 1298 , provided that:  “Any amendment made by this section to the Revenue Act of 1978 [amending section 322(e)(1) and (2) of  Pub. L. 95–600 , set out above] shall take effect as if it had been included in the provision of the Revenue Act of 1978 [ Pub. L. 95–600 ] to which such amendment relates.” \n]\nSection applicable to taxable years beginning after  Dec. 31, 1976 , and to credit carrybacks from such years, see  section 202(e) of Pub. L. 95–30 , set out as a note under  section 51 of this title .\nFor provisions that amendment made by  section 401(d)(3)(B)(iii) of Pub. L. 115–141  not apply to expenditures made in taxable years beginning before  Jan. 1, 2011 , in the case of the repeal of  section 48D(e)(1) of this title , see  section 401(d)(3)(C) of Pub. L. 115–141 , set out as a note under  section 49 of this title .\nFor provisions that amendment made by  section 401(d)(6)(B)(iv) of Pub. L. 115–141  not apply, in the case of certain repeals, to various types of wages, bonds, property, or other items before specific dates, see  section 401(d)(6)(C) of Pub. L. 115–141 , set out as a note under former  section 1400L of this title .\nFor provisions that nothing in amendment by section 401(d)(3)(B)(iii), (6)(B)(iv) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 101–239, title VII, §\u202f7814(e)(2)(B) ,  Dec. 19, 1989 ,  103 Stat. 2413 , provided that:  \n “In the case of a taxable year for which the last date for making the election under section 280C(c)(3) of the Internal Revenue Code of 1986 (as added by subparagraph (A)) [see  26 U.S.C. 280C(c)(2) ] is on or before the date which is 75 days after the date of the enactment of this Act [ Dec. 19, 1989 ], such an election for such year may be made— \n “(i)  at any time before the date which is 75 days after such date of enactment, and \n \n “(ii)  in such form and manner as the Secretary of the Treasury or his delegate may prescribe.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Section, added  Pub. L. 96–499, title XI, §\u202f1131(d)(1) ,  Dec. 5, 1980 ,  94 Stat. 2693 , related to portion of chapter 45 windfall profit tax on domestic crude oil for which credit or refund was allowable under section 6429.\nRepeal applicable to crude oil removed from the premises on or after  Aug. 23, 1988 , see  section 1941(c) of Pub. L. 100–418 , set out as an Effective Date of 1988 Amendment note under  section 164 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.\nThe Controlled Substances Act, referred to in text, is title II of  Pub. L. 91–513 ,  Oct. 27, 1970 ,  84 Stat. 1242 , which is classified principally to subchapter I (§\u202f801 et seq.) of chapter 13 of Title 21, Food and Drugs. Schedules I and II are set out in  section 812 of Title 21 . For complete classification of this Act to the Code, see Short Title note set out under  section 801 of Title 21  and Tables.\nPub. L. 97–248, title III, §\u202f351(c) ,  Sept. 3, 1982 ,  96 Stat. 640 , provided that:  “The amendments made by this section [enacting this section] shall apply to amounts paid or incurred after the date of the enactment of this Act [ Sept. 3, 1982 ] in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'Except as provided in clause (ii), the unrecovered basis of any passenger automobile shall be treated as an expense for the 1st taxable year after the recovery period. Any excess of the unrecovered basis over the limitation of clause (ii) shall be treated as an expense in the succeeding taxable year.\nThe amount treated as an expense under clause (i) for any taxable year shall not exceed $5,760.\nNo amount shall be allowable as a deduction by reason of this subparagraph with respect to any property for any taxable year unless a depreciation deduction would be allowable with respect to such property for such taxable year.\nFor purposes of this subtitle, any amount allowable as a deduction by reason of this subparagraph shall be treated as a depreciation deduction allowable under section 168.\nIf any listed property is not predominantly used in a qualified business use for any taxable year, the deduction allowed under section 168 with respect to such property for such taxable year and any subsequent taxable year shall be determined under section 168(g) (relating to alternative depreciation system).\nFor purposes of this subsection, property shall be treated as predominantly used in a qualified business use for any taxable year if the business use percentage for such taxable year exceeds 50 percent.\nThis section shall not apply to any listed property leased or held for leasing by any person regularly engaged in the business of leasing such property.\nFor purposes of determining the amount allowable as a deduction under this chapter for rentals or other payments under a lease for a period of 30 days or more of listed property, only the allowable percentage of such payments shall be taken into account.\nFor purposes of paragraph (2), the allowable percentage shall be determined under tables prescribed by the Secretary. Such tables shall be prescribed so that the reduction in the deduction under paragraph (2) is substantially equivalent to the applicable restrictions contained in subsections (a) and (b).\nIn determining the term of any lease for purposes of paragraph (2), the rules of section 168(i)(3)(A) shall apply.\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (b)(3) shall apply to any lessee to which paragraph (2) applies.\nAny deduction allowable under section 179 with respect to any listed property shall be subject to the limitations of subsections (a) and (b), and the limitation of paragraph (3) of this subsection, in the same manner as if it were a depreciation deduction allowable under section 168.\nSolely for purposes of determining the amount of the depreciation deduction for subsequent taxable years, if less than 100 percent of the use of any listed property during any taxable year is use in a trade or business (including the holding for the production of income), all of the use of such property during such taxable year shall be treated as use so described.\nAny employee use of listed property shall not be treated as use in a trade or business for purposes of determining the amount of any depreciation deduction allowable to the employee (or the amount of any deduction allowable to the employee for rentals or other payments under a lease of listed property) unless such use is for the convenience of the employer and required as a condition of employment.\nFor purposes of subparagraph (A), the term “employee use” means any use in connection with the performance of services as an employee.\nExcept to the extent provided in regulations, clause (ii) of subparagraph (A) shall not apply to any property substantially all of the use of which is in a trade or business of providing to unrelated persons services consisting of the transportation of persons or property for compensation or hire.\nThe term “business use percentage” means the percentage of the use of any listed property during any taxable year which is a qualified business use.\nExcept as provided in subparagraph (C), the term “qualified business use” means any use in a trade or business of the taxpayer.\nClause (i) shall not apply with respect to any aircraft if at least 25 percent of the total use of the aircraft during the taxable year consists of qualified business use not described in clause (i).\nThe term “5-percent owner” means any person who is a 5-percent owner with respect to the taxpayer (as defined in section 416(i)(1)(B)(i)).\nThe term “related person” means any person related to the taxpayer (within the meaning of section 267(b)).\nIn the case of any passenger automobile placed in service after 2018, subsection (a) shall be applied by increasing each dollar amount contained in such subsection by the automobile price inflation adjustment for the calendar year in which such automobile is placed in service. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or if the increase is a multiple of $50, such increase shall be increased to the next higher multiple of $100).\nThe term “C-CPI-U automobile component” means the automobile component of the Chained Consumer Price Index for All Urban Consumers (as described in section 1(f)(6)).\nFor purposes of subsection (a)(1), the term “unrecovered basis” means the adjusted basis of the passenger automobile determined after the application of subsection (a) and as if all use during the recovery period were use in a trade or business (including the holding of property for the production of income).\nAll taxpayers holding interests in any passenger automobile shall be treated as 1 taxpayer for purposes of applying subsection (a) to such automobile, and the limitations of subsection (a) shall be allocated among such taxpayers in proportion to their interests in such automobile.\nFor purposes of subsection (a)(1) any property acquired in a nonrecognition transaction shall be treated as a single property originally placed in service in the taxable year in which it was placed in service after being so acquired.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations with respect to items properly included in, or excluded from, the adjusted basis of any listed property.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table below.\n2017—Subsec. (a)(1)(A)(i).  Pub. L. 115–97, §\u202f13202(a)(1)(A) , substituted “$10,000” for “$2,560”.\nSubsec. (a)(1)(A)(ii).  Pub. L. 115–97, §\u202f13202(a)(1)(B) , substituted “$16,000” for “$4,100”.\nSubsec. (a)(1)(A)(iii).  Pub. L. 115–97, §\u202f13202(a)(1)(C) , substituted “$9,600” for “$2,450”.\nSubsec. (a)(1)(A)(iv).  Pub. L. 115–97, §\u202f13202(a)(1)(D) , substituted “$5,760” for “$1,475”.\nSubsec. (a)(1)(B)(ii).  Pub. L. 115–97, §\u202f13202(a)(2)(A) , substituted “$5,760” for “$1,475” in heading and text.\nSubsec. (d)(4)(A)(iv), (v).  Pub. L. 115–97, §\u202f13202(b)(1) , redesignated cl. (v) as (iv) and struck out former cl. (iv) which read as follows: “any computer or peripheral equipment (as defined in section 168(i)(2)(B)), ‘and’\u202f”.\nSubsec. (d)(4)(B), (C).  Pub. L. 115–97, §\u202f13202(b)(2) , redesignated subpar. (C) as (B) and struck out former subpar. (B). Prior to amendment, text of subpar. (B) read as follows: “The term ‘listed property’ shall not include any computer or peripheral equipment (as so defined) used exclusively at a regular business establishment and owned or leased by the person operating such establishment. For purposes of the preceding sentence, any portion of a dwelling unit shall be treated as a regular business establishment if (and only if) the requirements of section 280A(c)(1) are met with respect to such portion.”\nSubsec. (d)(7)(A).  Pub. L. 115–97, §\u202f13202(a)(2)(B)(i) , substituted “2018” for “1988”.\nSubsec. (d)(7)(B).  Pub. L. 115–97, §\u202f11002(d)(8) , amended subpar. (B) generally. Prior to amendment, subpar. (B) related to automobile price inflation adjustment.\nSubsec. (d)(7)(B)(i)(II).  Pub. L. 115–97, §\u202f13202(a)(2)(B)(ii) , substituted “2017” for “1987”.\n2014—Subsec. (a)(1)(C).  Pub. L. 113–295, §\u202f221(a)(34)(E) , struck out subpar. (C) which related to special rules for certain automobiles modified to be propelled by a clean burning fuel and for purpose built passenger vehicles that were placed in service between  Aug. 5, 1997 , and  Jan. 1, 2007 .\nSubsec. (d)(8), (10).  Pub. L. 113–295, §\u202f220(j) , substituted “subsection (a)(1)” for “subsection (a)(2)”.\n2010—Subsec. (d)(4)(A).  Pub. L. 111–240  inserted “\u202f‘and’\u202f” at end of clause (iv), redesignated clause (vi) as (v), and struck out former cl. (v) which read as follows: “any cellular telephone (or other similar telecommunications equipment), and”.\n2002—Subsec. (a)(1)(C)(iii).  Pub. L. 107–147  added cl. (iii).\n1998—Subsec. (a)(1)(C)(ii).  Pub. L. 105–206  substituted “subparagraphs (A) and (B)” for “subparagraph (A)”.\n1997—Subsec. (a)(1)(C).  Pub. L. 105–34  added subpar. (C).\n1996—Subsec. (a).  Pub. L. 104–188  struck out “investment tax credit and” after “amount of” in heading.\n1990— Pub. L. 101–508, §\u202f11813(b)(13)(E) , struck out “investment tax credit and” after “Limitation on” in section catchline.\nSubsec. (a)(1).  Pub. L. 101–508, §\u202f11813(b)(13)(A)(i) , redesignated par. (2) as (1) and struck out former par. (1) “Investment tax credit” which read as follows: “The amount of the credit determined under section 46(a) for any passenger automobile shall not exceed $675.”\nSubsec. (a)(2).  Pub. L. 101–508, §\u202f11813(b)(13)(A)(i) , redesignated par. (3) as (2). Former par. (2) redesignated (1).\nSubsec. (a)(2)(B).  Pub. L. 101–508, §\u202f11813(b)(13)(A)(ii) , struck out “the credit determined under section 46(a) or” after “the amount of”.\nSubsec. (a)(3).  Pub. L. 101–508, §\u202f11813(b)(13)(A)(i) , redesignated par. (3) as (2).\nSubsec. (a)(4).  Pub. L. 101–508, §\u202f11813(b)(13)(A)(i) , struck out par. (4) “Special rule where election of reduced credit in lieu of the basis adjustment” which read as follows: “In the case of any election under section 48(q)(4) with respect to any passenger automobile, the limitation of paragraph (1) applicable to such passenger automobile shall be ⅔ of the amount which would be so applicable but for this paragraph.”\nSubsec. (b).  Pub. L. 101–508, §\u202f11813(b)(13)(B) , redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) “Investment tax credit” which read as follows: “For purposes of this subtitle, any listed property shall not be treated as section 38 property for any taxable year unless such property is predominantly used in a qualified business use for such taxable year.”\nSubsec. (c)(1).  Pub. L. 101–508, §\u202f11813(b)(13)(C) , struck out “credits and” after “Lessor’s” in heading.\nSubsec. (d)(3)(A).  Pub. L. 101–508, §\u202f11813(b)(13)(D) , struck out “the amount of any credit allowable under section 38 to the employee or” after “of determining”.\n1989—Subsec. (d)(4)(A)(v), (vi).  Pub. L. 101–239  added cl. (v) and redesignated former cl. (v) as (vi).\n1988—Subsec. (b)(3)(B)(i).  Pub. L. 100–647, §\u202f1018(u)(3) , substituted “depreciation deductions” for “recovery deductions”.\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f1002(b)(2) , substituted “subsections (a) and (b), and the limitation of paragraph (3) of this subsection,” for “subsections (a) and (b)”.\nSubsec. (d)(3)(A).  Pub. L. 100–647, §\u202f1002(a)(10) , substituted “depreciation deduction” for “recovery deduction”.\n1986—Subsec. (a)(2)(A).  Pub. L. 99–514, §\u202f201(d)(4)(A)(i) , (K), substituted “depreciation deduction” for “recovery deduction” in introductory provisions and substituted cls. (i) to (iv) for former cls. (i) and (ii) which read as follows:\n“(i) $3,200 for the first taxable year in the recovery period, and\n“(ii) $4,800 for each succeeding taxable year in the recovery period.”\nSubsec. (a)(2)(B).  Pub. L. 99–514, §\u202f201(d)(4)(A)(ii) , (K), substituted “$1,475” for “$4,800” in heading and text of cl. (ii), and “depreciation deduction” for “recovery deduction” in heading and text of cl. (iv).\nSubsec. (a)(3)(B).  Pub. L. 99–514, §\u202f201(d)(4)(K) , substituted “depreciation deduction” for “recovery deduction” in two places.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f201(d)(4)(J) , substituted “section 168(g) (relating to alternative depreciation system)” for “the straight line method over the earnings and profits life for such property”.\nSubsec. (b)(3)(A).  Pub. L. 99–514, §\u202f201(d)(4)(B) , (K), substituted “depreciation deduction” for “recovery deduction” and “section 168(g) (relating to alternative depreciation system)” for “the straight line method over the earnings and profits life” in closing provisions.\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f201(d)(4)(C) , in amending par. (4) generally, struck out heading “Definitions”, redesignated as par. (4) former subpar. (A) heading and text, substituted “For purposes of this section, property” for “Property”, and struck out former subpar. (B) definition of straight line method over earnings and profits life.\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f201(d)(4)(D) , substituted “section 168(i)(3)(A)” for “section 168(j)(6)(B)”.\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f201(d)(4)(E) , substituted “depreciation deduction” for “recovery deduction”.\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1812(e)(5) , substituted “is use described in” for “is not use described in”.\nPub. L. 99–514, §\u202f201(d)(4)(F) , substituted “depreciation deduction” for “recovery deduction” and “use in a trade or business (including the holding for the production of income)” for “use described in section 168(c)(1) (defining recovery property)”.\nSubsec. (d)(3)(A).  Pub. L. 99–514, §\u202f1812(e)(2) , inserted “(or the amount of any deduction allowable to the employee for rentals or other payments under a lease of listed property)”.\nSubsec. (d)(4)(A)(iv).  Pub. L. 99–514, §\u202f201(d)(4)(G) , substituted “section 168(i)(2)(B)” for “section 168(j)(5)(D)”.\nSubsec. (d)(4)(B).  Pub. L. 99–514, §\u202f1812(e)(3) , inserted “and owned or leased by the person operating such establishment”.\nSubsec. (d)(4)(C).  Pub. L. 99–514, §\u202f1812(e)(4) , added subpar. (C).\nSubsec. (d)(5)(A).  Pub. L. 99–514, §\u202f1812(e)(1)(A) , (C), substituted “unloaded gross vehicle weight” for “gross vehicle weight” in cl. (ii) and inserted at end “In the case of a truck or van, clause (ii) shall be applied by substituting ‘gross vehicle weight’ for ‘unloaded gross vehicle weight’.”\nSubsec. (d)(8).  Pub. L. 99–514, §\u202f201(d)(4)(H) , amended par. (8) generally. Prior to amendment, par. (8) read as follows: “For purposes of subsection (a)(2), the term “unrecovered basis” means the excess (if any) of—\n“(A) the unadjusted basis (as defined in section 168(d)(1)(A)) of the passenger automobile, over\n“(B) the amount of the recovery deductions which would have been allowable for taxable years in the recovery period determined after the application of subsection (a) and as if all use during the recovery period were use described in section 168(c)(1).”\nSubsec. (d)(10).  Pub. L. 99–514, §\u202f201(d)(4)(I) , struck out “,\u2000notwithstanding any regulations prescribed under section 168(f)(7),” after “For purposes of subsection (a)(2)”.\n1985—Subsec. (a)(1).  Pub. L. 99–44, §\u202f4(a)(1) , substituted “$675” for “$1,000”.\nSubsec. (a)(2)(A)(i).  Pub. L. 99–44, §\u202f4(a)(2)(A) , substituted “$3,200” for “$4,000”.\nSubsec. (a)(2)(A)(ii), (B)(ii).  Pub. L. 99–44, §\u202f4(a)(2)(B) , substituted “$4,800” for “$6,000” wherever appearing in text and heading.\nSubsec. (d)(7)(A).  Pub. L. 99–44, §\u202f4(b)(1) , inserted “placed in service after 1988” after “passenger automobile”.\nSubsec. (d)(7)(B)(i).  Pub. L. 99–44, §\u202f4(b)(3) , struck out last sentence which directed that in the case of calendar year 1984, the automobile price inflation adjustment would be zero.\nSubsec. (d)(7)(B)(i)(II).  Pub. L. 99–44, §\u202f4(b)(2) , substituted “1987” for “1983”.\nAmendment by  section 11002(d)(8) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f13202(c) ,  Dec. 22, 2017 ,  131 Stat. 2109 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 2017 , in taxable years ending after such date.”\nAmendment by  section 221(a)(34)(E) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–240, title II, §\u202f2043(b) ,  Sept. 27, 2010 ,  124 Stat. 2560 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 107–147, title VI, §\u202f602(c) ,  Mar. 9, 2002 ,  116 Stat. 59 , provided that:  “The amendments made by this section [amending this section,  section 30 of this title , and provisions set out as a note under this section] shall apply to property placed in service after  December 31, 2001 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title IX, §\u202f971(b) ,  Aug. 5, 1997 ,  111 Stat. 897 , as amended by  Pub. L. 107–147, title VI, §\u202f602(b)(2) ,  Mar. 9, 2002 ,  116 Stat. 59 , provided that:  “The amendments made by this section [amending this section] shall apply to property placed in service after the date of enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 101–239, title VII, §\u202f7643(b) ,  Dec. 19, 1989 ,  103 Stat. 2381 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property placed in service or leased in taxable years beginning after  December 31, 1989 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(4) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(4) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by section 1812(e)(1)(A), (C), (2)–(5) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–44, §\u202f6(e) ,  May 24, 1985 ,  99 Stat. 79 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by section 4 [amending this section] shall apply to— “(A)  property placed in service after  April 2, 1985 , in taxable years ending after such date, and \n \n “(B)  property leased after  April 2, 1985 , in taxable years ending after such date. \n \n \n “(2)  The amendments made by section 4 [amending this section] shall not apply to any property— “(A)  acquired by the taxpayer pursuant to a binding contract in effect on  April 1, 1985 , and at all times thereafter, but only if the property is placed in service before  August 1, 1985 , or \n \n “(B)  of which the taxpayer is the lessee, but only if the lease is pursuant to a binding contract in effect on  April 1, 1985 , and at all times thereafter, and only if the taxpayer first uses such property under the lease before  August 1, 1985 .”\nPub. L. 98–369, div. A, title I, §\u202f179(d) ,  July 18, 1984 ,  98 Stat. 719 , provided that: \n “(1)   In general.— “(A)  Except as provided in subparagraph (B), the amendments made by subsections (a) and (c) [enacting this section] shall apply to— “(i)  property placed in service after  June 18, 1984 , in taxable years ending after such date, and \n \n “(ii)  property leased after  June 18, 1984 , in taxable years ending after such date. \n \n \n “(B)  The amendments made by subsections (a) and (c) shall not apply to any property— “(i)  acquired by the taxpayer pursuant to a binding contract in effect on  June 18, 1984 , and at all times thereafter (or under construction on such date) but only if the property is placed in service before  January 1, 1985  ( January 1, 1987 , in the case of 15-year real property), or \n \n “(ii)  of which the taxpayer is the lessee but only if the lease is pursuant to a binding contract in effect on  June 18, 1984 , and at all times thereafter and only if the taxpayer first uses such property under the lease before  January 1, 1985  ( January 1, 1987 , in the case of 15-year real property). \n \n\n For purposes of the preceding sentence, the term ‘15-year real property’ includes 18-year real property. \n \n \n “(2)   Compliance provisions .— The amendments made by subsection (b) [amending sections 274, 6653, and 6695 of this title] shall apply to taxable years beginning after  December 31, 1984 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nProvisions relating to inflation adjustment of items in this section for certain years were contained in the following:\n2023—Revenue Procedure 2023–14.\n2022—Revenue Procedure 2022–17.\n2021—Revenue Procedure 2021–31.\n2020—Revenue Procedure 2020–37.\n2019—Revenue Procedure 2019–26.\n2018—Revenue Procedure 2018–25.\n2017—Revenue Procedure 2017–29.\n2016—Revenue Procedure 2016–23.\n2015—Revenue Procedure 2015–19.\n2014—Revenue Procedure 2014–21.\n2013—Revenue Procedure 2013–21.\n2012—Revenue Procedure 2012–23.\n2011—Revenue Procedure 2011–21.\n2010—Revenue Procedure 2010–18.\n2009—Revenue Procedure 2009–24.\n2008—Revenue Procedure 2008–22.\n2007—Revenue Procedure 2007–30.\n2006—Revenue Procedure 2006–18.\n2005—Revenue Procedure 2005–13.\n2004—Revenue Procedure 2004–20.\n2003—Revenue Procedure 2003–75.\n2002—Revenue Procedure 2002–14.\n2001—Revenue Procedure 2001–19.\n2000—Revenue Procedure 2000–18.\n1999—Revenue Procedure 99–14.\n1998—Revenue Procedures 98–24 and 98–30.\n1997—Revenue Procedure 97–20.\n1996—Revenue Procedure 96–25.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'No deduction shall be allowed under this chapter for any excess parachute payment.\nThe term “excess parachute payment” means an amount equal to the excess of any parachute payment over the portion of the base amount allocated to such payment.\nThe term “parachute payment” shall also include any payment in the nature of compensation to (or for the benefit of) a disqualified individual if such payment is made pursuant to an agreement which violates any generally enforced securities laws or regulations. In any proceeding involving the issue of whether any payment made to a disqualified individual is a parachute payment on account of a violation of any generally enforced securities laws or regulations, the burden of proof with respect to establishing the occurrence of a violation of such a law or regulation shall be upon the Secretary.\nThe term “base amount” means the individual’s annualized includible compensation for the base period.\nThe term “base period” means the period consisting of the most recent 5 taxable years ending before the date on which the change in ownership or control described in paragraph (2)(A) of subsection (b) occurs (or such portion of such period during which the disqualified individual performed personal services for the corporation).\nPresent value shall be determined by using a discount rate equal to 120 percent of the applicable Federal rate (determined under section 1274(d)), compounded semiannually.\nExcept as otherwise provided in regulations, all members of the same affiliated group (as defined in section 1504, determined without regard to section 1504(b)) shall be treated as 1 corporation for purposes of this section. Any person who is an officer of any member of such group shall be treated as an officer of such 1 corporation.\nAny term used in this subsection which is also used in section 162(m)(5) shall have the meaning given such term by such section.\nIf a payment which is treated as a parachute payment by reason of this subsection is also a parachute payment determined without regard to this subsection, this subsection shall not apply to such payment.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section (including regulations for the application of this section in the case of related corporations and in the case of personal service corporations).\nThe Emergency Economic Stabilization Act of 2008, referred to in subsec. (e)(1), (2)(C)(ii)(I), is  Pub. L. 110–343, div. A ,  Oct. 3, 2008 ,  122 Stat. 3765 . Section 101(a) of the Act enacted  section 5211(a) of Title 12 , Banks and Banking, and amended  section 5315 of Title 5 , Government Organization and Employees, and  section 301 of Title 31 , Money and Finance. Section 120 of the Act is classified to  section 5230 of Title 12 . For complete classification of this Act to the Code, see Short Title note set out under  section 5201 of Title 12  and Tables.\n2008—Subsecs. (e), (f).  Pub. L. 110–343  added subsec. (e) and redesignated former subsec. (e) as (f).\n1996—Subsec. (b)(6)(D).  Pub. L. 104–188  added subpar. (D).\n1988—Subsec. (b)(5)(A).  Pub. L. 100–647, §\u202f1018(d)(6) , substituted “section 1361(b) but without regard to paragraph (1)(C) thereof)” for “section 1361(b))” in cl. (i) and inserted at end “Stock described in section 1504(a)(4) shall not be taken into account under clause (ii)(I) if the payment does not adversely affect the shareholder’s redemption and liquidation rights.”\nSubsec. (b)(5)(B).  Pub. L. 100–647, §\u202f1018(d)(7) , inserted at end “The regulations prescribed under subsection (e) shall include regulations providing for the application of this subparagraph in the case of shareholders which are not individuals (including the treatment of nonvoting interests in an entity which is a shareholder) and where an entity holds a de minimis amount of stock in the corporation.”\nSubsec. (d)(5).  Pub. L. 100–647, §\u202f1018(d)(8) , substituted “officer of any member” for “officer or any member”.\n1986—Subsec. (b)(2)(A).  Pub. L. 99–514, §\u202f1804(j)(6) , inserted “For purposes of clause (ii), payments not treated as parachute payments under paragraph (4)(A), (5), or (6) shall not be taken into account.”\nSubsec. (b)(2)(B).  Pub. L. 99–514, §\u202f1804(j)(7) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘parachute payment’ shall also include any payment in the nature of compensation to (or for the benefit of) a disqualified individual if such payment is pursuant to an agreement which violates any securities laws or regulations.”\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1804(j)(2) , substituted “Treatment of amounts which taxpayer establishes as reasonable compensation” for “Excess parachute payments reduced to extent taxpayer establishes reasonable compensation” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any parachute payment described in paragraph (2)(A), the amount of any excess parachute payment shall be reduced by the portion of such payment which the taxpayer establishes by clear and convincing evidence is reasonable compensation for personal services actually rendered. For purposes of the preceding sentence, reasonable compensation shall be first offset against the base amount.”\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f1804(j)(1) , added par. (5).\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f1804(j)(3) , added par. (6).\nSubsec. (c).  Pub. L. 99–514, §\u202f1804(j)(5) , inserted provision defining “highly-compensated individual”.\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1804(j)(8) , substituted “performed personal services for the corporation” for “was an employee of the corporation”.\nSubsec. (d)(5).  Pub. L. 99–514, §\u202f1804(j)(4) , added par. (5).\nPub. L. 110–343, div. A, title III, §\u202f302(c)(2) ,  Oct. 3, 2008 ,  122 Stat. 3806 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to payments with respect to severances occurring during the period during which the authorities under section 101(a) of this Act [enacting  section 5211(a) of Title 12 , Banks and Banking, and amending  section 5315 of Title 5 , Government Organization and Employees, and  section 301 of Title 31 , Money and Finance] are in effect (determined under section 120 of this Act [ 12 U.S.C. 5230 ]).”\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 99–121  applicable to sales and exchanges after  June 30, 1985 , in taxable years ending after such date, see  section 105(a)(1) of Pub. L. 99–121 , set out as a note under  section 1274 of this title .\nPub. L. 98–369, div. A, title I, §\u202f67(e) ,  July 18, 1984 ,  98 Stat. 587 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and  section 4999 of this title  and amending sections 275 and 3121 of this title] shall apply to payments under agreements entered into or renewed after  June 14, 1984 , in taxable years ending after such date. \n \n “(2)   Special rule for contract amendments .— Any contract entered into before  June 15, 1984 , which is amended after  June 14, 1984 , in any significant relevant aspect shall be treated as a contract entered into after  June 14, 1984 .”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ITEMS NOT DEDUCTIBLE'},
  'content': 'If any amount is not allowed as a deduction for a taxable year under subsection (a), such amount shall be treated as paid or incurred in the succeeding taxable year.\nNo net operating loss carryback shall be allowed to (or from) any taxable year of a personal service corporation to which an election under section 444 applies.\nThe term “employee-owner” has the meaning given such term by section 269A(b)(2) (as modified by section 441(i)(2)).\nThe term “deferral period” has the meaning given to such term by section 444(b)(4).\nThe term “nondeferral period” means the portion of the taxable year of the personal service corporation which occurs after the portion of such year constituting the deferral period.\nThe term “personal service corporation” has the meaning given to such term by section 441(i)(2).\n1988—Subsecs. (c)(1)(A)(i), (d)(1).  Pub. L. 100–647, §\u202f2004(e)(14)(C) , substituted “amounts paid” for “amounts paid or incurred”.\nSubsec. (f)(2).  Pub. L. 100–647, §\u202f2004(e)(3) , substituted “section 269A(b)(2) (as modified by section 441(i)(2))” for “section 296A(b)(2)”.\nSubsec. (f)(4).  Pub. L. 100–647, §\u202f2004(e)(14)(A) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The term ‘adjusted taxable income’ means taxable income increased by any amount paid or incurred to an employee-owner which was includible in the gross income of such employee-owner.”\nSubsec. (f)(5).  Pub. L. 100–647, §\u202f2004(e)(2)(B) , added par. (5).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1986 , see  section 10206(d)(1) of Pub. L. 100–203 , set out as a note under  section 444 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TERMINAL RAILROAD CORPORATIONS AND THEIR SHAREHOLDERS'},
  'content': 'In the case of any taxable year ending after the date of the enactment of this section, paragraph (1) shall not apply to the extent that it would (but for this paragraph) operate to create (or increase) a net operating loss for the terminal railroad corporation for the taxable year.\nSubject to the limitation in subsection (a)(2), in computing the taxable income of any shareholder of a terminal railroad corporation, no amount shall be considered to have been received or accrued or paid or incurred by such shareholder as a result of any discharge of liability described in subsection (a)(1)(A)(i) or as a result of any computation of charges in the manner described in subsection (a)(1)(A)(ii).\nIn the case of any taxable year, subsections (a) and (b) shall apply with respect to any discharge of liability described in subsection (a)(1)(A)(i), and to any computation of charges in the manner described in subsection (a)(1)(A)(ii), only if such discharge or computation (as the case may be) was provided for in a written agreement, to which all of the shareholders of the terminal railroad corporation were parties, entered into before the beginning of such taxable year.\nThe term “related terminal services” includes only services, and the use of facilities, taken into account in computing related terminal income.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.\nThe date of the enactment of this section, referred to in subsecs. (a)(2), (d)(2), refers to the date of enactment of  Pub. L. 87–870 , which was approved  Oct. 23, 1962 .\n1995—Subsec. (d)(1)(A), (B).  Pub. L. 104–88  substituted “rail carriers subject to part A of subtitle IV” for “domestic railroad corporations providing transportation subject to subchapter I of chapter 105”.\n1978—Subsec. (d)(1)(A).  Pub. L. 95–473, §\u202f2(a)(2)(D) , substituted “providing transportation subject to subchapter I of chapter 105 of title 49” for “subject to part I of the Interstate Commerce Act ( 49 U.S.C. 1  and following)”.\nSubsec. (d)(1)(B).  Pub. L. 95–473, §\u202f2(a)(2)(E) , substituted “providing transportation subject to subchapter I of chapter 105 of title 49” for “subject to part I of the Interstate Commerce Act”.\n1976—Subsec. (d)(1)(A).  Pub. L. 94–455, §\u202f1901(a)  (40)(A), inserted “( 49 U.S.C. 1  and following)” after “Interstate Commerce Act”.\nSubsecs. (e), (f).  Pub. L. 94–455 , §§\u202f1901(a)(40)(B), 1906(b)(13)(A), redesignated subsec. (f) as (e) and struck out “or his delegate” after “Secretary”. Former subsec. (e), which made special provision for the application of this section to taxable years ending before  Oct. 23, 1962 , was struck out.\nAmendment by  Pub. L. 104–88  effective  Jan. 1, 1996 , see  section 2 of Pub. L. 104–88 , set out as an Effective Date note under  section 1301 of Title 49 , Transportation.\nAmendment by  section 1901(a)(40) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 87–870, §\u202f2(a) ,  Oct. 23, 1962 ,  76 Stat. 1160 , provided that:  “The amendments made by the first section of this Act [enacting this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nPub. L. 87–870, §\u202f2(b) ,  Oct. 23, 1962 ,  76 Stat. 1160 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Provisions having the same effect as section 281 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by the first section of this Act) shall be deemed to be included in the Internal Revenue Code of 1939, effective with respect to all taxable years to which such Code applies.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES RELATING TO CORPORATE PREFERENCE ITEMS'},
  'content': 'The amount allowable as a deduction under this chapter (determined without regard to this section) with respect to any financial institution preference item shall be reduced by 20 percent.\nIf an election is made under section 169 with respect to any certified pollution control facility, the amortizable basis of such facility for purposes of such section shall be reduced by 20 percent.\nThe amount not allowable as a deduction under section 263(c), 616(a), or 617(a) (as the case may be) for any taxable year by reason of paragraph (1) shall be allowable as a deduction ratably over the 60-month period beginning with the month in which the costs are paid or incurred.\nFor purposes of section 1254, any deduction under paragraph (2) shall be treated as a deduction allowable under section 263(c), 616(a), or 617(a) (whichever is appropriate).\nFor purposes of this subsection, the term “integrated oil company” means, with respect to any taxable year, any producer of crude oil to whom subsection (c) of section 613A does not apply by reason of paragraph (2) or (4) of section 613A(d).\nThe portion of the adjusted basis of any property which is attributable to amounts to which paragraph (1) applied shall not be taken into account for purposes of determining depletion under section 611.\nSection 168 shall apply with respect to that portion of the basis of any property not taken into account under section 169 by reason of subsection (a)(4).\nSubsection (a)(1) shall not apply to any section 1250 property which is part of a certified pollution control facility (within the meaning of section 169(d)(1)) with respect to which an election under section 169 was made.\nIn the case of a real estate investment trust (as defined in section 856), the difference between the amounts described in subparagraphs (A) and (B) of subsection (a)(1) shall be reduced to the extent that a capital gain dividend (as defined in section 857(b)(3)(C), 1 1 \u202fSee References in Text note below.  applied without regard to this section) is treated as paid out of such difference. Any capital gain dividend treated as having been paid out of such difference to a shareholder which is an applicable corporation retains its character in the hands of the shareholder as gain from the disposition of section 1250 property for purposes of applying subsection (a)(1) to such shareholder.\nIn the case of a financial institution which is a bank (as defined in section 585(a)(2)), the amount of interest on indebtedness incurred or continued to purchase or carry obligations acquired after  December 31, 1982 , and before  August 8, 1986 , the interest on which is exempt from taxes for the taxable year, to the extent that a deduction would (but for this paragraph or section 265(b)) be allowable with respect to such interest for such taxable year.\nFor purposes of this subparagraph, the term “interest” includes amounts (whether or not designated as interest) paid in respect of deposits, investment certificates, or withdrawable or repurchasable shares.\nThe terms “section 1245 property” and “section 1250 property” have the meanings given such terms by sections 1245(a)(3) and 1250(c), respectively.\nSection 857(b)(3)(C), referred to in subsec. (d), was redesignated section 857(b)(3)(B) by  Pub. L. 115–97, title I, §\u202f13001(b)(2)(K)(i) ,  Dec. 22, 2017 ,  131 Stat. 2096 .\n2009—Subsec. (e)(1)(B)(iv).  Pub. L. 111–5  inserted at end “That portion of any obligation not taken into account under paragraph (2)(A) of section 265(b) by reason of paragraph (7) of such section shall be treated for purposes of this section as having been acquired on  August 7, 1986 .”\n2007—Subsec. (a)(4), (5).  Pub. L. 110–172, §\u202f11(g)(6)(A) , redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “In the case of taxable years beginning after  December 31, 1984 , section 923(a) shall be applied with respect to any FSC by substituting—\n“(A) ‘30 percent’ for ‘32 percent’ in paragraph (2), and\n“(B) ‘ 15 ⁄ 23 ’ for ‘ 16 ⁄ 23 ’ in paragraph (3).\nIf all of the stock in the FSC is not held by 1 or more C corporations throughout the taxable year, under regulations, proper adjustments shall be made in the application of the preceding sentence to take into account stock held by persons other than C corporations.”\nSubsec. (c)(1).  Pub. L. 110–172, §\u202f11(g)(6)(B) , substituted “subsection (a)(4)” for “subsection (a)(5)”.\n1996—Subsec. (e)(1)(B)(i).  Pub. L. 104–188, §\u202f1616(b)(5) , struck out “or to which section 593 applies” after “585(a)(2))”.\nSubsec. (e)(1)(B)(iv), (v).  Pub. L. 104–188, §\u202f1602(b)(1) , redesignated cl. (v) as (iv) and struck out former cl. (iv) which read as follows: “ Special rules for obligations to which section 133 applies .—In the case of an obligation to which section 133 applies, interest on such obligation shall not be treated as exempt from taxes for purposes of this subparagraph.”\n1990—Subsec. (e)(1)(A).  Pub. L. 101–508  struck out subpar. (A) “Excess reserves for losses on bad debts of financial institutions” which read as follows: “In the case of a financial institution to which section 585 applies, the excess of—\n“(i) the amount which would, but for this section, be allowable as a deduction for the taxable year for a reasonable addition to a reserve for bad debts, over\n“(ii) the amount which would have been allowable had such institution maintained its bad debt reserve for all taxable years on the basis of actual experience.”\n1988—Subsec. (b)(4).  Pub. L. 100–418  amended par. (4) generally. Prior to amendment, par. (4) read as follows: “For purposes of this subsection, the term ‘integrated oil company’ means, with respect to any taxable year, any producer (within the meaning of section 4996(a)(1)) of crude oil other than an independent producer (within the meaning of section 4992(b)).”\nSubsec. (e)(1)(B)(i).  Pub. L. 100–647, §\u202f1009(b)(5) , substituted “section 585(a)(2)” for “section 582(a)(2)”.\nSubsec. (e)(1)(B)(iv), (v).  Pub. L. 100–647, §\u202f1009(b)(4) , redesignated cl. (iv), relating to application of subparagraph to certain obligations issued after  Aug. 7, 1986 , as (v).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1804(k)(3)(A) , substituted “Reduction” for “20-percent reduction” in heading.\nSubsec. (a)(1)(A).  Pub. L. 99–514, §\u202f201(d)(5)(A) , struck out “or section 1245 recovery property” after “section 1245 property”.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f412(b)(1) , substituted “20 percent” for “15 percent”.\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1876(b)(1) , substituted “Certain FSC income” for “Certain deferred FSC income” in heading and amended text generally. Prior to amendment, text read as follows: “If a C corporation is a shareholder of the FSC, in the case of taxable years beginning after  December 31, 1984 , section 923(a) shall be applied with respect to such corporation by substituting—\n“(A) ‘30 percent’ for ‘32 percent’ in paragraph (2), and\n“(B) ‘15/23’ for ‘16/23’ in paragraph (3).”\nPub. L. 99–514, §\u202f1804(k)(1) , substituted “If a C corporation” for “If a corporation”.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f411(a)(1) , (b)(2)(C)(ii), substituted “30 percent” for “20 percent” in closing provisions and “617(a)” for “617” in subpar. (B).\nSubsec. (b)(2) to (6).  Pub. L. 99–514, §\u202f411(a)(2) , added pars. (2) to (5) and struck out former pars. (2) to (6) as follows: former par. (2), special rule for amounts not allowable as deductions under paragraph (1), related in subpar. (A) to intangible drilling costs and in subpar. (B) to mineral exploration and development costs; former par. (3) defined applicable percentage in accordance with table for taxable years 1 to 5; former par. (4) dispositions, related in subpar. (A) to oil, gas, and geothermal property, in subpar. (B) to application of  section 617(d) of this title , and in subpar. (C) to recapture of investment credit; former par. (5) defined integrated oil company; and former par. (6) related to coordination with cost depletion.\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f201(d)(5)(B) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “For purposes of subclause (1) of section 168(d)(1)(A)(ii), a taxpayer shall not be treated as electing the amortization deduction under section 169 with respect to that portion of the basis not taken into account under section 169 by reason of subsection (a)(5).”\nSubsec. (e)(1)(A).  Pub. L. 99–514, §\u202f901(b)(4) , struck out “or 593” after “section 585”.\nSubsec. (e)(1)(B).  Pub. L. 99–514, §\u202f902(c)(2)(C) , substituted “1982, and before  August 8, 1986 ” for “1982” in heading.\nSubsec. (e)(1)(B)(i).  Pub. L. 99–514, §\u202f902(c)(1) , (2)(A), substituted “1982, and before  August 8, 1986 ” for “1982” and “(but for this paragraph or section 265(b))” for “(but for this paragraph)”.\nPub. L. 99–514, §\u202f901(d)(4)(C) , substituted “which is a bank (as defined in section 582(a)(2)) or to which section 593 applies” for “to which section 585 or 593 applies”.\nSubsec. (e)(1)(B)(ii).  Pub. L. 99–514, §\u202f902(c)(2)(B) , inserted “and section 265(b)”.\nSubsec. (e)(1)(B)(iv).  Pub. L. 99–514, §\u202f1854(c)(1) , added cl. (iv) relating to special rules for obligations to which section 133 applies.\nPub. L. 99–514, §\u202f902(c)(2)(D) , added cl. (iv) relating to application of subparagraph to certain obligations issued after  August 7, 1986 .\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f201(d)(5)(C) , struck out “,\u2000‘section 1245 recovery property’,” after “\u202f‘section 1245 property’\u202f” and directed that par. (2) be amended by striking out “,\u2000section 1245(a)(5),” which was executed by striking out “,\u20001245(a)(5),” after “sections 1245(a)(3)” to reflect the probable intent of Congress.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f68(a) , which directed that each subsection be amended by substituting “20 percent” for “15 percent” wherever appearing, was executed in heading by substituting “20-percent” for “15-percent” to reflect the probable intent of Congress.\nSubsec. (a)(1).  Pub. L. 98–369, §\u202f68(a) , substituted “20 percent” for “15 percent” in provisions preceding subpar. (A).\nPub. L. 98–369, §\u202f712(a)(1)(A)(ii) , inserted “under section 1250” in provisions following subpar. (B).\nSubsec. (a)(1)(B).  Pub. L. 98–369, §\u202f712(a)(1)(A)(i) , inserted “(determined without regard to this paragraph)”.\nSubsec. (a)(3).  Pub. L. 98–369, §\u202f68(a) , substituted “20 percent” for “15 percent”.\nSubsec. (a)(4).  Pub. L. 98–369, §\u202f68(b) , amended par. (4) generally. Prior to amendment, par. (4) read as follows:\n“(4)  Certain deferred disc income .—If a corporation is a shareholder of a DISC, in the case of taxable years beginning after  December 31, 1982 , section 995(b)(1)(F)(i) shall be applied with respect to such corporation by substituting ‘57.5 percent’ for ‘one-half’.”\nSubsec. (a)(5).  Pub. L. 98–369, §\u202f68(a) , substituted “20 percent” for “15 percent”.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f68(a) , substituted “20 percent” for “15 percent” in provisions following subpar. (B).\nSubsec. (b)(2)(B)(ii).  Pub. L. 98–369, §\u202f712(a)(2) , inserted “in the case of a deposit located in the United States,”.\nSubsec. (b)(6).  Pub. L. 98–369, §\u202f712(a)(3) , substituted “attributable to amounts to which paragraph (1) applied” for “attributable to intangible drilling and development costs or mining exploration and development costs”.\nSubsec. (e)(1)(B)(iii).  Pub. L. 98–369, §\u202f712(a)(4) , added cl. (iii).\n1983—Subsec. (a)(1).  Pub. L. 97–448  inserted provision that, under regulations prescribed by the Secretary, the provisions of this paragraph shall not apply to the disposition of any property to the extent section 1250(a) does not apply to such disposition by reason of section 1250(d).\n1982—Subsec. (a).  Pub. L. 97–354, §\u202f5(a)(27)(A) , substituted “a corporation” for “an applicable corporation” wherever appearing.\nSubsec. (b).  Pub. L. 97–354, §\u202f5(a)(27)(A) , substituted “a corporation” for “an applicable corporation”.\nSubsec. (e)(2), (3).  Pub. L. 97–354, §\u202f5(a)(27)(B) , redesignated par. (3) as (2). Former par. (2), defining “applicable corporation”, was struck out.\nAmendment by  Pub. L. 111–5  applicable to obligations issued after  Dec. 31, 2008 , see  section 1501(c) of Pub. L. 111–5 , set out as a note under  section 265 of this title .\nAmendment by  section 1602(b)(1) of Pub. L. 104–188  applicable to loans made after  Aug. 20, 1996 , with exception and provisions relating to certain refinancings, see  section 1602(c) of Pub. L. 104–188 , set out as an Effective Date of Repeal note under former  section 133 of this title .\nAmendment by  section 1616(b)(5) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–418  applicable to crude oil removed from the premises on or after  Aug. 23, 1988 , see  section 1941(c) of Pub. L. 100–418 , set out as a note under  section 164 of this title .\nAmendment by  section 201(d)(5) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(5) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by section 411(a), (b)(2)(C)(ii) of  Pub. L. 99–514  applicable, except as otherwise provided, to costs paid or incurred after  Dec. 31, 1986 , in taxable years ending after such date, see  section 411(c) of Pub. L. 99–514  set out as a note under  section 263 of this title .\nPub. L. 99–514, title IV, §\u202f412(b)(2) ,  Oct. 22, 1986 ,  100 Stat. 2227 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by section 901(b)(4), (d)(4)(C) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nAmendment by  section 902(c) of Pub. L. 99–514  applicable to taxable years ending after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 902(f) of Pub. L. 99–514 , set out as a note under  section 265 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(k)(1) ,  Oct. 22, 1986 ,  100 Stat. 2809 , provided that amendment made by  section 1804(k)(1) of Pub. L. 99–514  is effective with respect to taxable years beginning after  Dec. 31, 1982 .\nAmendment by sections 1804(k)(3)(A), 1854(c)(1), and 1876(b)(1) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f68(e) ,  July 18, 1984 ,  98 Stat. 588 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1804(k)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2809, provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 57 and 995 of this title] shall apply to taxable years beginning after  December 31, 1984 . \n \n “(2)  1250  gain .— The amendments made by this section to section 291(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and the amendment made by subsection (c)(2) of this section [amending  section 57 of this title ], shall apply to sales or other dispositions after  December 31, 1984 , in taxable years ending after such date. \n \n “(3)   Pollution control facilities .— The amendments made by this section to section 291(a)(5) [now 291(a)(4)] of such Code, and so much of the amendment made by subsection (c)(1) of this section [amending  section 57 of this title ] as relates to pollution control facilities, shall apply to property placed in service after  December 31, 1984 , in taxable years ending after such date. \n \n “(4)   Drilling and mining costs .— The amendments made by this section to section 291(b) of such Code shall apply to expenditures after  December 31, 1984 , in taxable years ending after such date.”\nAmendment by  section 712 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–448  effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 311(d) of Pub. L. 97–448 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 97–248, title II, §\u202f204(d) ,  Sept. 3, 1982 ,  96 Stat. 427 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as provided in this subsection, the amendments made by this section [enacting this section and amending sections 57 and 263 of this title] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(2)  1250  Gain.— Section 291(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to sales or other disposition after  December 31, 1982 , in taxable years ending after such date. \n \n “(3)   Pollution control facilities.— Section 291(a)(5) [now 291(a)(4)] of such Code shall apply to property placed in service after  December 31, 1982 , in taxable years ending after such date. \n \n “(4)   Drilling and mining costs.— Section 291(b) of such Code shall apply to expenditures after  December 31, 1982 , in taxable years ending after such date. \n \n “(5)   Reduction in percentage depletion for coal and iron ore.— Section 291(a)(2) of such Code shall apply to taxable years beginning after  December 31, 1983 . \n \n “(6)   Minimum tax.— The amendment made by subsection (b) [amending  section 57 of this title ] shall apply to taxable years ending after  December 31, 1982 , with respect to items of tax preference described in section 57(b) of such Code to which section 291 of such Code applies; except that in the case of an item described in section 291(a)(2) of such Code, such amendment shall apply to taxable years beginning after  December 31, 1983 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'Except as otherwise provided in this chapter, a distribution of property (as defined in section 317(a)) made by a corporation to a shareholder with respect to its stock shall be treated in the manner provided in subsection (c).\nFor purposes of this section, the amount of any distribution shall be the amount of money received, plus the fair market value of the other property received.\nFor purposes of this section, fair market value shall be determined as of the date of the distribution.\nThat portion of the distribution which is a dividend (as defined in section 316) shall be included in gross income.\nThat portion of the distribution which is not a dividend shall be applied against and reduce the adjusted basis of the stock.\nExcept as provided in subparagraph (B), that portion of the distribution which is not a dividend, to the extent that it exceeds the adjusted basis of the stock, shall be treated as gain from the sale or exchange of property.\nThat portion of the distribution which is not a dividend, to the extent that it exceeds the adjusted basis of the stock and to the extent that it is out of increase in value accrued before  March 1, 1913 , shall be exempt from tax.\nThe basis of property received in a distribution to which subsection (a) applies shall be the fair market value of such property.\nExcept to the extent otherwise provided in regulations, solely for purposes of determining the taxable income of any 20 percent corporate shareholder (and its adjusted basis in the stock of the distributing corporation), section 312 shall be applied with respect to the distributing corporation as if it did not contain subsections (k) and (n) thereof.\nThe reference in paragraph (1) to subsection (n) of section 312 shall be treated as not including a reference to paragraph (7) of such subsection.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\n2014—Subsec. (e)(2).  Pub. L. 113–295  struck out “,\u2000244,” after “section 243” in concluding provisions.\n2003—Subsec. (f)(4).  Pub. L. 108–27  added par. (4).\n1988—Subsec. (b)(1).  Pub. L. 100–647, §\u202f1006(e)(10) , amended par. (1) generally. Prior to amendment, par. (1) contained subpars. (A) to (D) which provided what the amount of any distribution would be for noncorporate distributees, corporate distributees, certain corporate distributees of foreign corporations, and foreign corporate distributees.\nSubsec. (d).  Pub. L. 100–647, §\u202f1006(e)(11) , amended subsec. (d) generally. Prior to amendment, subsec. (d) contained pars. (1) to (4) which provided what the basis of property received would be for noncorporate distributees, corporate distributees, foreign corporate distributees, and certain corporate distributees of foreign corporations.\nSubsec. (e).  Pub. L. 100–647, §\u202f2004(j)(3)(B) , added par. (3) and redesignated former par. (3) as (4).\nPub. L. 100–647, §\u202f1006(e)(12) , redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to special rule for holding period of appreciated property distributed to corporation.\nSubsecs. (f), (g).  Pub. L. 100–647, §\u202f1006(e)(12) , redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).\n1987—Subsec. (f)(1).  Pub. L. 100–203  substituted “subsections (k) and (n)” for “subsection (n)”.\n1986—Subsec. (f)(3).  Pub. L. 99–514, §\u202f1804(f)(2)(B) , substituted “this subsection” for “this section”.\nSubsec. (g)(4).  Pub. L. 99–514, §\u202f612(b)(1) , struck out par. (4) which provided: “For partial exclusion from gross income of dividends received by individuals, see section 116.”\n1984—Subsec. (e).  Pub. L. 98–369, §\u202f54(b) , added subsec. (e). Former subsec. (e) redesignated (f).\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f712(i)(1) , substituted “complete liquidation” for “partial or complete liquidation” in subsec. (e)(2), which became subsec. (g)(2).\nSubsec. (f).  Pub. L. 98–369, §\u202f61(d) , added subsec. (f). Former subsec. (f) redesignated (g).\nPub. L. 98–369, §\u202f54(b) , redesignated former subsec. (e) as (f).\nSubsec. (g).  Pub. L. 98–369 , §§\u202f54(b), 61(d), redesignated former subsec. (e) successively as subsec. (f) and as subsec. (g).\nSubsec. (g)(2).  Pub. L. 98–369, §\u202f712(i)(1) , substituted “complete liquidation” for “partial or complete liquidation” in subsec. (e)(2), which became subsec. (g)(2).\n1978—Subsec. (b)(1)(B)(ii).  Pub. L. 95–628, §\u202f3(a) , substituted “amount of gain recognized to the distributing corporation on the distribution” for “amount of gain to the distributing corporation which is recognized under subsection (b), (c), or (d) of section 311, under section 341(f), or under section 617(d)(1), 1245(a), 1250(a), 1251(c), 1252(a), or 1254(a)”.\nSubsec. (d)(2)(B).  Pub. L. 95–628, §\u202f3(b) , substituted “amount of gain recognized to the distributing corporation on the distribution” for “amount of gain to the distributing corporation which is recognized under subsection (b), (c), or (d) of section 311, under section 341(f), or under section 617(d)(1), 1245(a), 1250(a), 1251(c), 1252(a), or 1254(a)”.\n1976—Subsec. (b)(1)(B)(ii).  Pub. L. 94–455, §\u202f205(c)(1)(B) , substituted “1252(a), or 1254(a)” for “or 1252(a)”.\nSubsec. (b)(1)(C).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(2)(B).  Pub. L. 94–455, §\u202f205(c)(1)(C) , substituted “1252(a), or 1254(a)” for “or 1252(a)”.\nSubsec. (e).  Pub. L. 94–455, §\u202f1901(a)(41) , (b)(32)(A), redesignated subsec. (g) as (e). Former subsec. (e), which related to exceptions for certain distributions by personal service corporations, was struck out.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(b)(32)(A) , struck out subsec. (f) which related to special rules for distribution of antitrust stock to corporations.\nSubsec. (g).  Pub. L. 94–455, §\u202f1901(b)(32)(A) , redesignated subsec. (g) as (e).\n1971—Subsec. (b)(1)(B).  Pub. L. 92–178, §\u202f312(a)(1) , substituted “corporation, unless subparagraph (D) applies” for “corporation” where first appearing.\nSubsec. (b)(1)(D).  Pub. L. 92–178, §\u202f312(a)(2) , added subpar. (D).\nSubsec. (d)(2).  Pub. L. 92–178, §\u202f312(a)(3) , substituted “corporation, unless paragraph (3) applies” for “corporation” where first appearing.\nSubsec. (d)(3), (4).  Pub. L. 92–178, §\u202f312(a)(4) , added par. (3) and redesignated former par. (3) as (4).\n1969—Subsec. (b)(1)(B)(ii).  Pub. L. 91–172 , §§\u202f211(b)(1), 905(b)(2), substituted “1250(a), 1251(c), or 1252(a)” for “or 1250(a)” and inserted reference to section 311(a).\nSubsec. (d)(2)(B).  Pub. L. 91–172 , §§\u202f211(b)(2), 905(b)(2), substituted “1250(a), 1251(c), or 1252(a)”, for “or 1250(a)” and inserted reference to section 311(a).\n1966—Subsec. (b)(1)(B)(ii).  Pub. L. 89–570  included reference to section 617(d)(1).\nSubsec. (b)(1)(C).  Pub. L. 89–809  substituted “gross income which is effectively connected with the conduct of a trade or business within the United States” for “gross income from sources within the United States” in cl. (i), “gross income which is not effectively connected with the conduct of a trade or business within the United States” for “gross income from sources without the United States” in cl. (ii), and inserted text following cl. (ii) setting out the treatment to be accorded gross income for any period before the first taxable year beginning after  December 31, 1966 .\nSubsec. (d)(2)(B).  Pub. L. 89–570  included reference to section 617(d)(1).\n1964—Subsec. (b).  Pub. L. 88–484  included amount of gain recognized under section 341(f).\nPub. L. 88–272  inserted reference to section 1250(a).\nSubsec. (d).  Pub. L. 88–484  included amount of gain recognized under section 341(f).\nPub. L. 88–272  inserted reference to section 1250(a).\n1962—Subsec. (b)(1)(B).  Pub. L. 87–834, §\u202f13(f)(2) , substituted “subsection (b) or (c) of section 311 or under section 1245(a)” for “subsection (b) or (c) of section 311”.\nSubsec. (b)(1)(C).  Pub. L. 87–834, §\u202f5(a) , added subpar. (C).\nSubsec. (d)(2).  Pub. L. 87–834, §\u202f13(f)(2) , substituted “subsection (b) or (c) of section 311 or under section 1245(a)” for “subsection (b) or (c) of section 311”.\nSubsec. (d)(3).  Pub. L. 87–834, §\u202f5(b) , added par. (3).\nSubsecs. (f), (g).  Pub. L. 87–403  added subsec. (f) and redesignated former subsec. (f) as (g).\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by section 1006(e)(10)–(12) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(j)(3)(B) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10222(b)(2) ,  Dec. 22, 1987 ,  101 Stat. 1330–411 , as amended by  Pub. L. 100–647, title II, §\u202f2004(j)(4) ,  Nov. 10, 1988 ,  102 Stat. 3605 , provided that: \n “(A)   In general .— The amendment made by paragraph (1) [amending this section] shall apply to distributions after  December 15, 1987 . For purposes of applying such amendment to any such distribution— “(i)  for purposes of determining earnings and profits, such amendment shall be deemed to be in effect for all periods whether before, on, or after  December 15, 1987 , but \n \n “(ii)  such amendment shall not affect the determination of whether any distribution on or before  December 15, 1987 , is a dividend and the amount of any reduction in accumulated earnings and profits on account of any such distribution. \n \n \n “(B)   Exception .— The amendment made by paragraph (1) shall not apply for purposes of determining gain or loss on any disposition of stock after  December 15, 1987 , and before  January 1, 1989 , if such disposition is pursuant to a written binding contract, governmental order, letter of intent or preliminary agreement, or stock acquisition agreement, in effect on or before  December 15, 1987 .”\nPub. L. 99–514, title VI, §\u202f612(c) ,  Oct. 22, 1986 ,  100 Stat. 2251 , provided that:  “The amendments made by this section [amending this section and sections 584, 642, 643, 702, 854, and 857 of this title, repealing  section 116 of this title , and enacting provisions set out as a note under  section 584 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1804(f)(2)(B) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 54(b) of Pub. L. 98–369  applicable to distributions after  July 18, 1984 , in taxable years ending after  July 18, 1984 , see  section 54(d)(2) of Pub. L. 98–369 , set out as a note under  section 311 of this title .\nPub. L. 98–369, div. A, title I, §\u202f61(e)(4) ,  July 18, 1984 ,  98 Stat. 583 , provided that:  “The amendment made by subsection (d) [amending this section] shall apply to distributions after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nAmendment by  section 712(i)(1) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 95–628, §\u202f3(d) ,  Nov. 10, 1978 ,  92 Stat. 3628 , provided that:  “The amendments made by this section [amending this section and  section 312 of this title ] shall apply to distributions made after the date of the enactment of this Act [ Nov. 10, 1978 ].”\nAmendment by section 205(c)(1)(B), (C) of  Pub. L. 94–455  effective for taxable years ending after  Dec. 31, 1975 , see  section 205(e) of Pub. L. 94–455 , set out as an Effective Date note under  section 1254 of this title .\nAmendment by section 1901(a)(41), (b)(32)(A) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–178, title III, §\u202f312(b) ,  Dec. 10, 1971 ,  85 Stat. 526 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to distributions made after  November 8, 1971 .”\nPub. L. 91–172, title II, §\u202f211(c) ,  Dec. 30, 1969 ,  83 Stat. 570 , provided that:  “The amendments made by this section [enacting  section 1251 of this title  and amending this section and sections 312, 341, 453, and 751 of this title] shall apply to taxable years beginning after  December 31, 1969 .”\nAmendment by  section 905(b)(2) of Pub. L. 91–172  effective with respect to distributions made after  Nov. 30, 1969 , see  section 905(c) of Pub. L. 91–172 , set out as a note under  section 311 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 89–570  applicable to taxable years ending after  Sept. 12, 1966 , but only in respect of expenditures paid or incurred after such date, see  section 3 of Pub. L. 89–570 , set out as an Effective Date note under  section 617 of this title .\nPub. L. 88–484, §\u202f2 ,  Aug. 22, 1964 ,  78 Stat. 597 , provided that:  “The amendments made by the first section of this Act [amending this section and sections 312, 341, and 453 of this title] shall apply with respect to transactions after the date of the enactment of this Act [ Aug. 22, 1964 ] in taxable years ending after such date.”\nAmendment by  Pub. L. 88–272  applicable to dispositions after  Dec. 31, 1963 , in taxable years ending after such date, see  section 231(c) of Pub. L. 88–272 , set out as an Effective Date note under  section 1250 of this title .\nPub. L. 87–834, §\u202f5(d) ,  Oct. 16, 1962 ,  76 Stat. 977 , provided that:  “The amendments made by this section [amending this section and  section 245 of this title ] shall apply to distributions made after  December 31, 1962 .”\nAmendment by  section 13(f)(2) of Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nPub. L. 87–403, §\u202f2(b) ,  Feb. 2, 1962 ,  76 Stat. 6 , provided that:  “The amendments made by this section [amending this section] shall apply only with respect to distributions made after the date of the enactment of this Act [ Feb. 2, 1962 ].”\nPub. L. 99–514, title VI, §\u202f634 ,  Oct. 22, 1986 ,  100 Stat. 2282 , directed Secretary of the Treasury or his delegate to conduct a study of proposals to reform the provisions of subchapter C of chapter 1 of the Internal Revenue Code of 1986, and not later than  Jan. 1, 1988  (due date extended to  Jan. 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 ), to submit to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate a report on the study conducted (together with such recommendations he deemed advisable).\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'If a corporation redeems its stock (within the meaning of section 317(b)), and if paragraph (1), (2), (3), (4), or (5) of subsection (b) applies, such redemption shall be treated as a distribution in part or full payment in exchange for the stock.\nSubsection (a) shall apply if the redemption is not essentially equivalent to a dividend.\nSubsection (a) shall apply if the distribution is substantially disproportionate with respect to the shareholder.\nThis paragraph shall not apply unless immediately after the redemption the shareholder owns less than 50 percent of the total combined voting power of all classes of stock entitled to vote.\nThis paragraph shall not apply to any redemption made pursuant to a plan the purpose or effect of which is a series of redemptions resulting in a distribution which (in the aggregate) is not substantially disproportionate with respect to the shareholder.\nSubsection (a) shall apply if the redemption is in complete redemption of all of the stock of the corporation owned by the shareholder.\nIn determining whether a redemption meets the requirements of paragraph (1), the fact that such redemption fails to meet the requirements of paragraph (2), (3), or (4) shall not be taken into account. If a redemption meets the requirements of paragraph (3) and also the requirements of paragraph (1), (2), or (4), then so much of subsection (c)(2) as would (but for this sentence) apply in respect of the acquisition of an interest in the corporation within the 10-year period beginning on the date of the distribution shall not apply.\nExcept as provided in paragraph (2) of this subsection, section 318(a) shall apply in determining the ownership of stock for purposes of this section.\nExcept as otherwise provided in this subchapter, if a corporation redeems its stock (within the meaning of section 317(b)), and if subsection (a) of this section does not apply, such redemption shall be treated as a distribution of property to which section 301 applies.\nWhether or not a redemption meets the requirements of subparagraphs (A) and (B) of paragraph (2) shall be determined without regard to whether or not the redemption is pro rata with respect to all of the shareholders of the corporation.\nFor purposes of determining under subsection (b)(4) whether any stock is held by a shareholder who is not a corporation, any stock held by a partnership, estate, or trust shall be treated as if it were actually held proportionately by its partners or beneficiaries.\n2010—Subsec. (a).  Pub. L. 111–325, §\u202f306(a)(2) , substituted “(4), or (5)” for “or (4)”.\nSubsec. (b)(5), (6).  Pub. L. 111–325, §\u202f306(a)(1) , added par. (5) and redesignated former par. (5) as (6).\n1984—Subsec. (f)(3).  Pub. L. 98–369  substituted “complete liquidation” for “partial or complete liquidation”.\n1982—Subsec. (a).  Pub. L. 97–248, §\u202f222(c)(3) , substituted “paragraph (1), (2), (3), or (4)” for “paragraph (1), (2), or (3)”.\nSubsec. (b)(4), (5).  Pub. L. 97–248, §\u202f222(c)(1) , (4), added par. (4), redesignated former par. (4) as (5) and substituted “paragraph (2), (3), or (4)” for “paragraph (2) or (3)” after “to meet the requirements of”, and “paragraph (1), (2), or (4)” for “paragraph (1) or (2)” after “and also the requirements of”.\nSubsec. (c)(2)(C).  Pub. L. 97–248, §\u202f228(a) , added subpar. (C).\nSubsecs. (e), (f).  Pub. L. 97–248, §\u202f222(c)(2) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1980—Subsec. (a).  Pub. L. 96–589, §\u202f5(b)(2)(A) , struck out reference to par. (4) of subsec. (b).\nSubsec. (b)(4), (5).  Pub. L. 96–589, §\u202f5(b)(1) , (2)(B), redesignated par. (5) as (4) and struck out reference to par. (4) in two places. Former par. (4) was struck out.\n1976—Subsec. (c)(2).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\nAmendment by  Pub. L. 111–325  applicable to distributions after  Dec. 22, 2010 , see  section 306(c) of Pub. L. 111–325 , set out as a note under  section 267 of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f228(b) ,  Sept. 3, 1982 ,  96 Stat. 493 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to distributions after  August 31, 1982 , in taxable years ending after such date.”\nPub. L. 97–248, title II, §\u202f222(f) ,  Sept. 3, 1982 ,  96 Stat. 481 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(6)(A) ,  Jan. 12, 1983 ,  96 Stat. 2402 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 306, 312, 331, 334, 336, 341, 346, 543, and 562 of this title and repealing  section 338 of this title ] shall apply to distributions after  August 31, 1982 . \n \n “(2)   Exceptions.— “(A)   Ruling requests .— The amendments made by this section shall not apply to distributions made by any corporation if— “(i) (I)  on  July 22, 1982 , there was a ruling request by such corporation pending with the Internal Revenue Service as to whether such distributions would qualify as a partial liquidation, or \n \n “(II)  within the period beginning on  July 12, 1981 , and ending on  July 22, 1982 , the Internal Revenue Service granted a ruling to such corporation that the distributions would qualify as a partial liquidation, and \n \n \n “(ii)  such distributions are pursuant to a plan of partial liquidation adopted before  October 1, 1982  (or, if later, 90 days after the date on which the Internal Revenue Service granted a ruling pursuant to the request described in clause (i)(I)). \n \n \n “(B)   Plans adopted before  july 23, 1982 .— The amendments made by this section shall not apply to distributions made pursuant to a plan of partial liquidation adopted before  July 23, 1982 . \n \n “(C)   Control acquired after 1981 and before  july 23, 1982 .— The amendments made by this section shall not apply to distributions made pursuant to a plan of partial liquidation adopted before  October 1, 1982 , where control of the corporation making the distributions was acquired after  December 31, 1981 , and before  July 23, 1982 . \n \n “(D)   Tender offer or binding contract outstanding on  july 22, 1982 .— “(i)   In general .— The amendments made by this section shall not apply to distributions made by a corporation if— “(I)  such distributions are pursuant to a plan of liquidation adopted before  October 1, 1982 , and \n \n “(II)  control of such corporation was acquired after  July 22, 1982 , pursuant to a tender offer or binding contract outstanding on such date. \n \n \n “(ii)   Extension of time for adopting plan where acquisition subject to federal regulatory approval .— If the acquisition described in clause (i)(II) is subject to approval by a Federal regulatory agency, clause (i) shall be applied by substituting for ‘ October 1, 1982 ’ the date which is 90 days after the date on which approval by the Federal regulatory agency of such acquisition becomes final. \n \n “(iii)   Special rule where offer subject to approval by foreign regulatory body .— In any case where an offer to acquire stock in a corporation was subject to intervention by a foreign regulatory body and a public announcement of such an offer resulted in the intervention by such foreign regulatory body before  July 23, 1982 — “(I)  such public announcement shall be treated as a tender offer, and \n \n “(II)  clause (i) shall be applied by substituting for ‘ October 1, 1982 ’ the date which is 90 days after the date on which such regulatory body approves a public offer to acquire stock in such corporation. \n \n \n “(iv)   Special rule where one-third of shares acquired during march and april 1982 .— If— “(I)  one-third or more of the shares of a corporation were acquired by another corporation during March and April 1982, and \n \n “(II)  during March or April 1982, the acquiring corporation filed with the Federal Trade Commission notification of its intent to acquire control of the acquired corporation, \n \n\n \u2001\u2001subclause (II) of clause (i) shall not apply with respect to distributions made by the acquired corporation. \n \n \n “(E)   Insurance companies .— The amendments made by this section shall not apply to distributions made by an insurance company pursuant to a plan of partial liquidation adopted before  October 1, 1982 , where control was acquired by the distributee or its parent after  December 31, 1980 , and before  July 23, 1982 , and the conduct of the insurance business by the distributee is conditioned on approval by a State regulatory authority. \n \n\n For purposes of this paragraph, the term ‘control’ has the meaning given to such term by section 368(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], except that in applying such section both direct and indirect ownership of stock shall be taken into account. \n \n “(3)   Approval of plan by board of directors .— For purposes of— “(A)  paragraph (2), and \n \n “(B)  applying section 346(a)(2) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) [ Sept. 3, 1982 ] to distributions to which (but for paragraph (2)) the amendments made by this section would apply, \n \n\n a plan of liquidation shall be treated as adopted when approved by the corporation’s board of directors. \n \n “(4)   Coordination with amendments made by section 224 .— For purposes of section 338(e)(2)(C) of the Internal Revenue Code of 1986 (as added by section 224), any property acquired in a distribution to which the amendments made by this section do not apply by reason of paragraph (2) shall be treated as acquired before  September 1, 1982 .”\nAmendment by  Pub. L. 96–589  applicable to stock which is issued after  Dec. 31, 1980 , except as otherwise provided, see section 7(d)(2), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nApplicability of subsec. (b)(1) to the determination of gross investment income under sections 4940 and 4948(a) of this title, see section 101( l )(8) of  Pub. L. 91–172 , set out as a note under  section 4940 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'For purposes of subparagraph (A), stock of 2 or more corporations, with respect to each of which there is included in determining the value of the decedent’s gross estate 20 percent or more in value of the outstanding stock, shall be treated as the stock of a single corporation. For purposes of the 20-percent requirement of the preceding sentence, stock which, at the decedent’s death, represents the surviving spouse’s interest in property held by the decedent and the surviving spouse as community property or as joint tenants, tenants by the entirety, or tenants in common shall be treated as having been included in determining the value of the decedent’s gross estate.\nSubsection (a) shall apply to a distribution by a corporation only to the extent that the interest of the shareholder is reduced directly (or through a binding obligation to contribute) by any payment of an amount described in paragraph (1) or (2) of subsection (a).\n1986—Subsec. (d).  Pub. L. 99–514  amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “Under regulations prescribed by the Secretary, where stock in a corporation is subject to tax under section 2601 as a result of a generation-skipping transfer (within the meaning of section 2611(a)), which occurs at or after the death of the deemed transferor (within the meaning of section 2612)—\n“(1) the stock shall be deemed to be included in the gross estate of the deemed transferor;\n“(2) taxes of the kind referred to in subsection (a)(1) which are imposed because of the generation-skipping transfer shall be treated as imposed because of the deemed transferor’s death (and for this purpose the tax imposed by section 2601 shall be treated as an estate tax);\n“(3) the period of distribution shall be measured from the date of the generation-skipping transfer; and\n“(4) the relationship of stock to the decedent’s estate shall be measured with reference solely to the amount of the generation-skipping transfer.”\n1981—Subsec. (b)(1)(C).  Pub. L. 97–34, §\u202f422(e)(1) , struck out “or 6166A” after “section 6166” in two places.\nSubsec. (b)(2)(A).  Pub. L. 97–34, §\u202f422(b)(1) , substituted “35” for “50” before percent.\nSubsec. (b)(2)(B).  Pub. L. 97–34, §\u202f422(b)(2) , in heading, substituted “stock in 2” for “stock of two”, in first sentence, struck out “the 50 percent requirement” before “of subparagraph (A)” and substituted “2” for “two” and “20 percent or more in value” for “more than 75 percent in value”, and, in last sentence, substituted “For purposes of the 20-percent requirement” for “For the purpose of the 75 percent requirement” and, in determining value of decedent’s gross estate, treated the estate as including stock which at decedent’s death represented surviving spouse’s interest in property held by the decedent and surviving spouse either as joint tenants, tenants by the entirety, or tenants in common.\n1976—Subsec. (b)(1)(C).  Pub. L. 94–455, §\u202f2004(e)(1) , added subpar. (C).\nSubsec. (b)(2)(A).  Pub. L. 94–455, §\u202f2004(e)(2)(A) , substituted provisions limiting the applicability of subsec. (a) to corporate distributions in which the value of the corporate stock included in decedent’s gross estate exceeds 50 percent of the gross estate over deductions allowed under sections 2053 and 2054 for provisions limiting the applicability of subsec. (a) to corporate distributions in which the value of the corporate stock included in decedent’s gross estate is either more than 35 percent of the gross estate or 50 percent of the taxable estate.\nSubsec. (b)(2)(B).  Pub. L. 94–455, §\u202f2004(e)(2)(B) , substituted “the 50 percent requirement” for “the 35 percent and 50 percent requirements”.\nSubsec. (b)(3), (4).  Pub. L. 94–455, §\u202f2004(e)(3) , added pars. (3) and (4).\nSubsec. (c).  Pub. L. 94–455, §\u202f2004(e)(4) , substituted “limitation specified in subsection (b)” for “limitation specified in subsection (b)(1)”.\nSubsec. (d).  Pub. L. 94–455, §\u202f2006(b)(4) , added subsec. (d).\nAmendment by  Pub. L. 99–514  applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as an Effective Date note under  section 2601 of this title .\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 422(f) of Pub. L. 97–34 , set out as a note under  section 6166 of this title .\nAmendment by section 2004(e)(1)–(4) of  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2004(g) of Pub. L. 94–455 , set out as an Effective Date note under  section 6166 of this title .\nFor effective date of amendment by  section 2006(b)(4) of Pub. L. 94–455 , see  section 2006(c) of Pub. L. 94–455 , set out as an Effective Date note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'In the case of any acquisition of stock to which subsection (a) of this section applies, determinations as to whether the acquisition is, by reason of section 302(b), to be treated as a distribution in part or full payment in exchange for the stock shall be made by reference to the stock of the issuing corporation. In applying section 318(a) (relating to constructive ownership of stock) with respect to section 302(b) for purposes of this paragraph, sections 318(a)(2)(C) and 318(a)(3)(C) shall be applied without regard to the 50 percent limitation contained therein.\nExcept as otherwise provided in this paragraph, subsection (a) (and not section 351 and not so much of sections 357 and 358 as relates to section 351) shall apply to any property received in a distribution described in subsection (a).\nFor purposes of clause (i), an extension, renewal, or refinancing of a liability which meets the requirements of clause (i) shall be treated as meeting such requirements.\nThe term “qualified minority shareholder” means any shareholder who owns less than 10 percent (in value) of the stock of the BHC. For purposes of the preceding sentence, the rules of paragraph (3) of subsection (c) shall apply.\nThe term “BHC” means a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956).\nThe term “affiliated group” has the meaning given such term by section 1504(a).\nThe Secretary shall prescribe such regulations as are appropriate to carry out the purposes of this paragraph.\nIn the case of any acquisition to which subsection (a) applies in which the acquiring corporation or the issuing corporation is a foreign corporation, the Secretary shall prescribe such regulations as are appropriate in order to eliminate a multiple inclusion of any item in income by reason of this subpart and to provide appropriate basis adjustments (including modifications to the application of sections 959 and 961).\nFor purposes of this section, control means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote, or at least 50 percent of the total value of shares of all classes of stock. If a person (or persons) is in control (within the meaning of the preceding sentence) of a corporation which in turn owns at least 50 percent of the total combined voting power of all stock entitled to vote of another corporation, or owns at least 50 percent of the total value of the shares of all classes of stock of another corporation, then such person (or persons) shall be treated as in control of such other corporation.\nWhere 1 or more persons in control of the issuing corporation transfer stock of such corporation in exchange for stock of the acquiring corporation, the stock of the acquiring corporation received shall be taken into account in determining whether such person or persons are in control of the acquiring corporation.\nWhere 2 or more persons in control of the issuing corporation transfer stock of such corporation to the acquiring corporation and, after the transfer, the transferors are in control of the acquiring corporation, the person or persons in control of each corporation shall include each of the persons who so transfer stock.\nSection 318(a) (relating to constructive ownership of stock) shall apply for purposes of determining control under this section.\nSection 2(a) of the Bank Holding Company Act of 1956, referred to in subsec. (b)(3)(D)(ii), is classified to  section 1841(a) of Title 12 , Banks and Banking.\n2014—Subsec. (b)(3)(D).  Pub. L. 113–295, §\u202f221(a)(48)(B) , struck out “and special rule” after “Definitions” in heading.\nSubsec. (b)(3)(D)(iii).  Pub. L. 113–295, §\u202f221(a)(48)(A) , struck out cl. (iii). Text read as follows: “In the case of a BHC which is formed before 1985, clause (i) of subparagraph (C) shall not apply.”\n2010—Subsec. (b)(5)(B), (C).  Pub. L. 111–226  added subpar. (B) and redesignated former subpar. (B) as (C).\n1998—Subsec. (b)(5)(B), (C).  Pub. L. 105–206, §\u202f6010(d)(1) , redesignated subpar. (C) as (B) and struck out heading and text of former subpar. (B). Text read as follows: “For purposes of subparagraph (A), the rules of section 1248(d) shall apply except to the extent otherwise provided by the Secretary.”\nSubsec. (b)(6).  Pub. L. 105–206, §\u202f6010(d)(2) , added par. (6).\n1997—Subsec. (a)(1).  Pub. L. 105–34, §\u202f1013(a) , amended last sentence generally. Prior to amendment, last sentence read as follows: “To the extent that such distribution is treated as a distribution to which section 301 applies, the stock so acquired shall be treated as having been transferred by the person from whom acquired, and as having been received by the corporation acquiring it, as a contribution to the capital of such corporation.”\nSubsec. (b)(5).  Pub. L. 105–34, §\u202f1013(c) , added par. (5).\n1988—Subsec. (b)(4)(A).  Pub. L. 100–647  substituted “stock from 1 member” for “stock of 1 member”.\n1987—Subsec. (b)(4).  Pub. L. 100–203  added par. (4).\n1986—Subsec. (a)(1).  Pub. L. 99–514  substituted “To the extent that such distribution is treated as a distribution to which section 301 applies” for “In any such case” in last sentence.\n1984—Subsec. (b)(2).  Pub. L. 98–369, §\u202f712 ( l )(1), consolidated former subpars. “(A) Where subsection (a)(1) applies” and “(B) Where subsection (a)(2) applies” in one paragraph, inserted provision respecting source of dividend, and incorporated in cls. (A) and (B) former subpar. (A) and (B) provisions which had required determination of amount which is a dividend to be made by reference to earnings and profits of the acquiring corporation and as if the property were distributed by the acquiring corporation to the issuing corporation and immediately thereafter distributed by the issuing corporation.\nSubsec. (b)(3)(A).  Pub. L. 98–369, §\u202f712 ( l )(2), substituted “section 351 and not so much of sections 357 and 358 as relates to section 351” for “part III”.\nSubsec. (b)(3)(B)(i).  Pub. L. 98–369, §\u202f712 ( l )(3)(A)(i), substituted “In the case of an acquisition described in section 351, subsection (a)” for “Subsection (a)”.\nSubsec. (b)(3)(B)(iii).  Pub. L. 98–369, §\u202f712 ( l )(3)(B), added cl. (iii).\nSubsec. (b)(3)(C).  Pub. L. 98–369, §\u202f712 ( l )(4), inserted following cl. (iii) “For purposes of this subparagraph, any assumption of (or acquisition of stock subject to) a liability under subparagraph (B) shall not be treated as a distribution of property.”\nSubsec. (c)(3).  Pub. L. 98–369, §\u202f712 ( l )(5)(A), designated existing first sentence as subpar. “(A) In general” and substituted subpar. (B) for former second sentence which read “For purposes of the preceding sentence, sections 318(a)(2)(C) and 318(a)(3)(C) shall be applied without regard to the 50 percent limitation contained therein.”\n1982—Subsec. (b)(2)(A).  Pub. L. 97–248, §\u202f226(a)(3) , substituted “as if the property were distributed by the issuing corporation to the acquiring corporation and immediately thereafter distributed by the acquiring corporation” for “soley by reference to the earnings and profits of the acquiring corporation” after “dividend shall be made”.\nSubsec. (b)(3).  Pub. L. 97–248, §\u202f226(a)(1)(A) , added par. (3).\nSubsec. (c)(2), (3).  Pub. L. 97–248, §\u202f226(a)(2) , added par. (2), redesignated former par. (2) as (3) and substituted “this section” for “paragraph (1)” after “determining control under”.\n1964—Subsecs. (b)(1), (c)(2).  Pub. L. 88–554  inserted reference to  section 318(a)(3)(C) of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–226, title II, §\u202f215(b) ,  Aug. 10, 2010 ,  124 Stat. 2400 , provided that:  “The amendments made by this section [amending this section] shall apply to acquisitions after the date of the enactment of this Act [ Aug. 10, 2010 ].”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title I, §\u202f1013(d) ,  Aug. 5, 1997 ,  111 Stat. 918 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1059 of this title ] shall apply to distributions and acquisitions after  June 8, 1997 . \n \n “(2)   Transition rule .— The amendments made by this section shall not apply to any distribution or acquisition after  June 8, 1997 , if such distribution or acquisition is— “(A)  made pursuant to a written agreement which was binding on such date and at all times thereafter, \n \n “(B)  described in a ruling request submitted to the Internal Revenue Service on or before such date, or \n \n “(C)  described in a public announcement or filing with the Securities and Exchange Commission on or before such date.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10223(d) ,  Dec. 22, 1987 ,  101 Stat. 1330–412 , as amended by  Pub. L. 100–647, title II, §\u202f2004(k)(3) , (4),  Nov. 10, 1988 ,  102 Stat. 3605 , 3606, provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 337 and 355 of this title] shall apply to distributions or transfers after  December 15, 1987 . \n \n “(2)   Exceptions.— “(A)   Distributions .— The amendments made by this section shall not apply to any distribution after  December 15, 1987 , and before  January 1, 1993 , if— “(i)  80 percent or more of the stock of the distributing corporation was acquired by the distributee before  December 15, 1987 , or \n \n “(ii)  80 percent or more of the stock of the distributing corporation was acquired by the distributee before  January 1, 1989 , pursuant to a binding written contract or tender offer in effect on  December 15, 1987 . \n \n\n For purposes of the preceding sentence, stock described in section 1504(a)(4) of the Internal Revenue Code of 1986 shall not be taken into account. \n \n “(B)   Section 304 transfers .— The amendment made by subsection (c) [amending this section] shall not apply to any transfer after  December 15, 1987 , and on or before  March 31, 1988 , if such transfer is— “(i)  between corporations which are members of the same affiliated group on  December 15, 1987 , or \n \n “(ii)  between corporations which become members of the same affiliated group pursuant to a binding written contract or tender offer in effect on  December 15, 1987 . \n \n \n “(C)   Distributions covered by prior transition rule .— The amendments made by this section shall not apply to any distribution to which the amendments made by subtitle D of title VI of the Tax Reform Act of 1986 [sections 631 to 634 of  Pub. L. 99–514 , see Tables for classification] do not apply. \n \n “(D)   Treatment of certain members of affiliated group.— “(i)   In general .— For purposes of subparagraph (A), all corporations which were in existence on the designated date and were members of the same affiliated group which included the distributees on such date shall be treated as 1 distributee. \n \n “(ii)   Limitation to stock held on designated date .— Clause (i) shall not exempt any distribution from the amendments made by this section if such distribution is with respect to stock not held by the distributee (determined without regard to clause (i)) on the designated date directly or indirectly through a corporation which goes out of existence in the transaction. \n \n “(iii)   Designated date .— For purposes of this subparagraph, the term ‘designated date’ means the later of— “(I)   December 15, 1987 , or \n \n “(II)  the date on which the acquisition meeting the requirements of subparagraph (A) occurred.”\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f712 ( l )(7),  July 18, 1984 ,  98 Stat. 954 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by paragraphs (1) and (3) [amending this section] shall apply to stock acquired after  June 18, 1984 , in taxable years ending after such date. \n \n “(B)   Election by taxpayer to have amendments apply earlier .— Any taxpayer may elect, at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe, to have the amendments made by paragraphs (1) and (3) apply as if included in section 226 of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 226 of Pub. L. 97–248 , which amended this section and  section 306 of this title  and enacted Effective Date of 1982 Amendment note set out below]. \n \n “(C)   Special rule for certain transfers to form bank holding company .— Except as provided in subparagraph (D), the amendments made by paragraphs (1) and (3) shall not apply to transfers pursuant to an application to form a BHC (as defined in section 304(b)(3)(D)(ii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) filed with the Federal Reserve Board before  June 18, 1984 , if— “(i)  such BHC was formed not later than the 90th day after the date of the last required approval of any regulatory authority to form such BHC, and \n \n “(ii)  such BHC did not elect (at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe) not to have the provisions of this subparagraph apply. \n \n \n “(D)   Amendments to apply to certain liabilities incurred before  october 20, 1983 .— The amendment made by paragraph (3)(A) shall apply to the acquisition of any stock to the extent the liability assumed, or to which such stock is subject, was incurred by the transferor after  October 20, 1983 .”\nAmendment by section 712( l )(2), (4), (5)(A) of  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f226(c) ,  Sept. 3, 1982 ,  96 Stat. 492 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 306 and 351 of this title] shall apply to transfers occurring after  August 31, 1982 , in taxable years ending after such date. \n \n “(2)   Approval by federal reserve board .— The amendments made by this section shall not apply to transfers pursuant to an application to form a BHC filed with the Federal Reserve Board before  August 16, 1982 , if the BHC was formed not later than the later of— “(A)  the 90th day after the date of the last required approval of any regulatory authority to form such BHC, or \n \n “(B)   January 1, 1983 . \n \n\n For purposes of this paragraph, the term ‘BHC’ means a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956 [ section 1841(a) of Title 12 , Banks and Banking]).”\nAmendment by  Pub. L. 88–554  effective  Aug. 31, 1964 , except that for purposes of this section and  section 302 of this title , such amendments shall not apply to distributions in payment for stock acquisitions or redemptions, if such acquisition or redemption occurred before  Aug. 31, 1964 , see  section 4(c) of Pub. L. 88–554 , set out as a note under  section 318 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'Except as otherwise provided in this section, gross income does not include the amount of any distribution of the stock of a corporation made by such corporation to its shareholders with respect to its stock.\nIf the distribution is with respect to preferred stock, other than an increase in the conversion ratio of convertible preferred stock made solely to take account of a stock dividend or stock split with respect to the stock into which such convertible stock is convertible.\nIf the distribution is of convertible preferred stock, unless it is established to the satisfaction of the Secretary that such distribution will not have the result described in paragraph (2).\nFor purposes of this section, the term “stock” includes rights to acquire such stock.\nFor purposes of subsections (b) and (c), the term “shareholder” includes a holder of rights or of convertible securities.\nAppropriate adjustments to basis shall be made for amounts includible in gross income under paragraph (1).\nIf any person strips the rights to 1 or more dividends from any stock described in paragraph (5)(B) and after  April 30, 1993 , disposes of such dividend rights, for purposes of paragraph (1), such person shall be treated as having purchased the stripped preferred stock on the date of such disposition for a purchase price equal to such person’s adjusted basis in such stripped preferred stock.\nAny amount included in gross income under paragraph (1) shall be treated as ordinary income.\nThe term “stripped preferred stock” means any stock described in subparagraph (B) if there has been a separation in ownership between such stock and any dividend on such stock which has not become payable.\nFor treatment of stripped interests in certain accounts or entities holding preferred stock, see section 1286(e).\n2018—Subsec. (e)(7).  Pub. L. 115–141  substituted “1286(e)” for “1286(f)”.\n2004—Subsec. (e)(7).  Pub. L. 108–357  added par. (7).\n1993—Subsecs. (e), (f).  Pub. L. 103–66  added subsec. (e) and redesignated former subsec. (e) as (f).\n1990—Subsec. (c).  Pub. L. 101–508, §\u202f11322(a) , inserted sentence at end specifying the contents of regulations.\nSubsec. (d)(1).  Pub. L. 101–508, §\u202f11801(c)(7)(A) , struck out “(other than subsection (e))” after “this section”.\nSubsecs. (e), (f).  Pub. L. 101–508, §\u202f11801(a)(17) , (c)(7)(B), redesignated subsec. (f) as (e) and struck out former subsec. (e) relating to dividend reinvestment in stock of public utilities.\n1983—Subsec. (e)(3)(A).  Pub. L. 97–448, §\u202f103(f)(1) , substituted “placed in service qualified long-life public utility property having a cost equal to at least 60 percent of the aggregate cost of all tangible property described in subparagraph (A) or (B) of section 1245(a)(3) placed in service by the corporation during such period” for “acquired public utility recovery property having a cost equal to at least 60 percent of the aggregate cost of all tangible property described in section 1245(a)(3) (other than subparagraphs (C) and (D) thereof) acquired by the corporation during such period”.\nSubsec. (e)(3)(C)(ii).  Pub. L. 97–448, §\u202f103(f)(2) , substituted definition of “qualified long-life public utility property” for definition of “public utility recovery property” which had been defined as public utility property (within the meaning of section 167( l )(3)(A)) which was recovery property which was 10-year property or 15-year public utility property (within the meaning of section 168), except that any requirement that the property be placed in service after  December 31, 1980 , did not apply.\n1981—Subsec. (d)(1).  Pub. L. 97–34, §\u202f321(b) , inserted “(other than subsection (e))” after “this section”.\nSubsecs. (e), (f).  Pub. L. 97–34, §\u202f321(a) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1976—Subsecs. (b)(5), (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1969—Subsec. (a).  Pub. L. 91–172  substituted reference to this section for reference to subsec. (b), and omitted reference to rights to acquire its stock.\nSubsec. (b).  Pub. L. 91–172  omitted reference to rights to acquire its stock, in text preceding par. (1), redesignated former par. (2) as par. (1) and added pars. (2) to (5). Former par. (1), providing for the extent to which distribution of preference dividends were to be treated as distribution of property to which section 301 applied, was struck out.\nSubsecs. (c) to (e).  Pub. L. 91–172  added subsecs. (c) and (d) and redesignated former subsec. (c) as (e).\nPub. L. 115–141, div. U, title IV, §\u202f401(c)(2)(E) ,  Mar. 23, 2018 ,  132 Stat. 1206 , provided that:  “The amendments made by this paragraph [amending this section and  section 1286 of this title ] shall apply to bonds purchased on or after  July 2, 1982 .”\nPub. L. 108–357, title VIII, §\u202f831(c) ,  Oct. 22, 2004 ,  118 Stat. 1587 , provided that:  “The amendments made by this section [amending this section and  section 1286 of this title ] shall apply to purchases and dispositions after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 103–66  effective  Apr. 30, 1993 , see  section 13206(c)(3) of Pub. L. 103–66  set out as a note under  section 167 of this title .\nPub. L. 101–508, title XI, §\u202f11322(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–464 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to stock issued after  October 9, 1990 . \n \n “(2)   Exception .— The amendment made by subsection (a) shall not apply to any stock issued after  October 9, 1990 , if— “(A)  such stock is issued pursuant to a written binding contract in effect on  October 9, 1990 , and at all times thereafter before such issuance, \n \n “(B)  such stock is issued pursuant to a registration or offering statement filed on or before  October 9, 1990 , with a Federal or State agency regulating the offering or sale of securities and such stock is issued before the date 90 days after the date of such filing, or \n \n “(C)  such stock is issued pursuant to a plan filed on or before  October 9, 1990 , in a title 11 or similar case (as defined in section 368(a)(3)(A) of the Internal Revenue Code of 1986).”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title III, §\u202f321(c) ,  Aug. 13, 1981 ,  95 Stat. 289 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 1981 , in taxable years ending after such date.”\nPub. L. 91–172, title IV, §\u202f421(b) ,  Dec. 30, 1969 ,  83 Stat. 615 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply with respect to distributions (or deemed distributions) made after  January 10, 1969 , in taxable years ending after such date. \n \n “(2) (A)  Section 305(b)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall not apply to a distribution (or deemed distribution) of stock made before  January 1, 1991 , with respect to stock (i) outstanding on  January 10, 1969 , (ii) issued pursuant to a contract binding on  January 10, 1969 , on the distributing corporation, (iii) which is additional stock of that class of stock which (as of  January 10, 1969 ) had the largest fair market value of all classes of stock of the corporation (taking into account only stock outstanding on  January 10, 1969 , or issued pursuant to a contract binding on  January 10, 1969 ), (iv) described in subparagraph (C)(iii), or (v) issued in a prior distribution described in clause (i), (ii), (iii), or (iv). \n \n “(B)  Subparagraph (A) shall apply only if— “(i)  the stock as to which there is a receipt of property was outstanding on  January 10, 1969  (or was issued pursuant to a contract binding on  January 10, 1969 , on the distributing corporation), and \n \n “(ii)  if such stock and any stock described in subparagraph (A)(i) were also outstanding on  January 10, 1968 , a distribution of property was made on or before  January 10, 1969 , with respect to such stock, and a distribution of stock was made on or before  January 10, 1969 , with respect to such stock described in subparagraph (A)(i). \n \n \n “(C)  Subparagraph (A) shall cease to apply when at any time after  October 9, 1969 , the distributing corporation issues any of its stock (other than in a distribution of stock with respect to stock of the same class) which is not— “(i)  nonconvertible preferred stock. \n \n “(ii)  additional stock of that class of stock which meets the requirements of subparagraph (A)(iii), or \n \n “(iii)  preferred stock which is convertible into stock which meets the requirements of subparagraph (A)(iii) at a fixed conversion ratio which takes account of all stock dividends and stock splits with respect to the stock into which such convertible stock is convertible. \n \n \n “(D)  For purposes of this paragraph, the term ‘stock’ includes rights to acquire such stock. \n \n \n “(3)  In cases to which Treasury Decision 6990 (promulgated  January 10, 1969 ) would not have applied, in applying paragraphs (1) and (2)  April 22, 1969 , shall be substituted for  January 10, 1969 . \n \n “(4)  Section 305(b)(4) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall not apply to any distribution (or deemed distribution) with respect to preferred stock (including any increase in the conversion ratio of convertible stock) made before  January 1, 1991 , pursuant to the terms relating to the issuance of such stock which were in effect on  January 10, 1969 . \n \n “(5)  With respect to distributions made or considered as made after  January 10, 1969 , in taxable years ending after such date, to the extent that the amendment made by subsection (a) [amending this section] does not apply by reason of paragraph (2), (3), or (4) of this subsection, section 305 of the Internal Revenue Code of 1986 (as in effect before the amendment made by subsection (a)) shall continue to apply.”\nFor provisions that nothing in amendment by section 11801(a)(17), (c)(7) of  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'If the disposition is a redemption, the amount realized shall be treated as a distribution of property to which section 301 applies.\nIf the disposition is a redemption and paragraph (3) or (4) of section 302(b) applies.\nIf the section 306 stock is redeemed in a distribution in complete liquidation to which part II (sec. 331 and following) applies.\nTo the extent that, under any provision of this subtitle, gain or loss to the shareholder is not recognized with respect to the disposition of the section 306 stock.\nStock (other than common stock issued with respect to common stock) which was distributed to the shareholder selling or otherwise disposing of such stock if, by reason of section 305(a), any part of such distribution was not includible in the gross income of the shareholder.\nExcept as otherwise provided in subparagraph (B), stock the basis of which (in the hands of the shareholder selling or otherwise disposing of such stock) is determined by reference to the basis (in the hands of such shareholder or any other person) of section 306 stock.\nFor purposes of this section, the term “section 306 stock” does not include any stock no part of the distribution of which would have been a dividend at the time of the distribution if money had been distributed in lieu of the stock.\nFor purposes of paragraphs (1)(B)(ii) and (3), section 318(a) shall apply. For purposes of applying the preceding sentence to paragraph (3), the rules of section 304(c)(3)(B) shall apply.\nThe amount treated under subsection (a)(1)(A) as ordinary income shall, for purposes of part I of subchapter N (sec. 861 and following, relating to determination of sources of income), be treated as derived from the same source as would have been the source if money had been received from the corporation as a dividend at the time of the distribution of such stock. If under the preceding sentence such amount is determined to be derived from sources within the United States, such amount shall be considered to be fixed or determinable annual or periodical gains, profits, and income within the meaning of section 871(a) or section 881(a), as the case may be.\n2003—Subsec. (a)(1)(D).  Pub. L. 108–27  added subpar. (D).\n1990—Subsec. (h).  Pub. L. 101–508  struck out subsec. (h) which related to stock received in distributions and reorganizations to which 1939 Code applied.\n1984—Subsec. (b)(1).  Pub. L. 98–369, §\u202f712(i)(2) , substituted “interest, etc.” for “interest” in heading.\nSubsec. (c)(3).  Pub. L. 98–369, §\u202f712 ( l )(6), incorporated existing second sentence in provision designated subpar. (A) and added subpar. (B).\nSubsec. (c)(4).  Pub. L. 98–369, §\u202f712 ( l )(5)(B), substituted “the rules of section 304(c)(3)(B) shall apply” for “sections 318(a)(2)(C) and 318(a)(3)(C) shall be applied without regard to the 50 percent limitation contained therein”.\n1982—Subsec. (b)(1)(B).  Pub. L. 97–248, §\u202f222(e)(2) , substituted “paragraph (3) or (4) of section 302(b)” for “section 302(b)(3)”.\nSubsec. (b)(2).  Pub. L. 97–248, §\u202f222(e)(1)(A) , struck out “partial or” before “complete liquidation”.\nSubsec. (c)(3).  Pub. L. 97–248, §\u202f226(b) , added par. (3).\nSubsec. (c)(4).  Pub. L. 97–248, §\u202f227(a) , added par. (4).\n1980—Subsecs. (a)(3), (b)(5).  Pub. L. 96–223  repealed the amendments made by  Pub. L. 95–600, §\u202f702(a)(1) , (2). See 1978 Amendment notes below.\n1978—Subsec. (a)(3).  Pub. L. 95–600, §\u202f702(a)(1) , added par. (3) which related to ordinary income from the sale or redemption of section 306 stock which was carryover basis property adjusted for 1976 value. See Repeals note below.\nSubsec. (b)(5).  Pub. L. 95–600, §\u202f702(a)(2) , added par. (5) which provided that subsec. (a) of this section shall not apply to the extent that section 303 applies to a distribution in redemption of section 306 stock. See Repeals note below.\n1976—Subsec. (a)(1)(A), (B)(i).  Pub. L. 94–455, §\u202f1901(b)(3)(J) , substituted “ordinary income” for “gain from the sale of property which is not a capital asset”.\nSubsec. (b)(4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(b)(3)(J) , substituted “ordinary income” for “gain from the sale of property which is not a capital asset”.\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by section 222(e)(1)(A), (2) of  Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .\nAmendment by  section 226(b) of Pub. L. 97–248  applicable to transfers occurring after  Aug. 31, 1982 , except for certain transfers pursuant to an application to form a BHC filed with the Federal Reserve Board before  Aug. 16, 1982 , see  section 226(c) of Pub. L. 97–248 , set out as a note under  section 304 of this title .\nPub. L. 97–248, title II, §\u202f227(c)(1) ,  Sept. 3, 1982 ,  96 Stat. 492 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to stock received after  August 31, 1982 , in taxable years ending after such date.”\nAmendment by  Pub. L. 96–223  (repealing section 702(a)(1), (2) of  Pub. L. 95–600  and the amendments made thereby, which had amended this section) applicable in respect of decedents dying after  Dec. 31, 1976 , and, except for certain elections, this title to be applied and administered as if those repealed provisions had not been enacted, see section 401(b), (e) of  Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nPub. L. 95–600, title VII, §\u202f702(a)(3) ,  Nov. 6, 1978 ,  92 Stat. 2925 , provided that the amendments made by  section 702(a) of Pub. L. 95–600  would apply to the estates of decedents dying after  Dec. 31, 1979 , prior to repeal by  Pub. L. 96–223, title IV, §\u202f401(a) ,  Apr. 2, 1980 ,  94 Stat. 299 .\nAmendment by  section 1901(b)(3)(J) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 95–600, §\u202f702(a)(1) , (2), cited as a credit to this section, and the amendments made thereby, were repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  Apr. 2, 1980 ,  94 Stat. 299 , resulting in the text of this section reading as it read prior to enactment of section 702(a)(1), (2). See Effective Date of 1980 Amendment and Revival of Prior Law note above.\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'If a shareholder in a corporation receives its stock or rights to acquire its stock (referred to in this subsection as “new stock”) in a distribution to which section 305(a) applies, then the basis of such new stock and of the stock with respect to which it is distributed (referred to in this section as “old stock”), respectively, shall, in the shareholder’s hands, be determined by allocating between the old stock and the new stock the adjusted basis of the old stock. Such allocation shall be made under regulations prescribed by the Secretary.\nThe election referred to in paragraph (1) shall be made in the return filed within the time prescribed by law (including extensions thereof) for the taxable year in which such rights were received. Such election shall be made in such manner as the Secretary may by regulations prescribe, and shall be irrevocable when made.\nFor basis of stock and stock rights distributed before  June 22, 1954 , see section 1052.\n1976—Subsecs. (a), (b)(2).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'Rules similar to the rules of section 336(b) shall apply for purposes of this subsection.\nIf the property distributed consists of an interest in a partnership or trust, the Secretary may by regulations provide that the amount of the gain recognized under paragraph (1) shall be computed without regard to any loss attributable to property contributed to the partnership or trust for the principal purpose of recognizing such loss on the distribution.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1018(d)(5)(E) , substituted “distribution (not in complete liquidation) with respect to its stock” for “distribution, with respect to its stock,”.\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1006(e)(21)(B) , substituted “liabilities” for “liabilities in excess of basis” in heading.\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1006(e)(8)(B) , added par. (3).\n1986— Pub. L. 99–514  amended section generally, substituting provisions relating to distributions of appreciated property for provisions relating to LIFO inventory, liability in excess of basis, and appreciated property used to redeem stock.\n1984—Subsec. (d).  Pub. L. 98–369, §\u202f54(a)(3) , substituted “Distributions of appreciated property” for “Appreciated property used to redeem stock” in heading.\nSubsec. (d)(1).  Pub. L. 98–369, §\u202f54(a)(1) , substituted “This subsection shall be applied after the applications of subsections (b) and (c)” for “Subsections (b) and (c) shall not apply to any distribution to which this subsection applies” in provisions following subpar. (B).\nSubsec. (d)(1)(A).  Pub. L. 98–369, §\u202f54(a)(1) , struck out “of part or all of his stock in such corporation” before “and”.\nSubsec. (d)(2)(A).  Pub. L. 98–369, §\u202f54(a)(2)(A) , substituted provisions relating to a distribution which is made with respect to qualified stock if section 302(b)(4) applies to such distribution or such distribution is a qualified distribution for provisions which had related to a distribution to a corporate shareholder if the basis of the property distributed was determined under section 301(d)(2).\nSubsec. (d)(2)(B) to (F).  Pub. L. 98–369, §\u202f54(a)(2)(A) , (B), redesignated subpars. (C) to (F) as (B) to (E), respectively, and struck out former subpar. (B) which related to distributions to which section 302(b)(4) applied and which were made with respect to qualified stock.\nSubsec. (e)(1)(C).  Pub. L. 98–369, §\u202f712(j) , added subpar. (C).\nSubsec. (e)(3).  Pub. L. 98–369, §\u202f54(a)(2)(C) , added par. (3).\n1982—Subsec. (d)(2)(A).  Pub. L. 97–248, §\u202f223(a)(1) , substituted reference to a distribution to a corporate shareholder if the basis of the property distributed is determined under section 301(d)(2) for reference to a distribution in complete redemption of all of the stock of a shareholder who, at all times within the 12-month period ending on the date of such distribution owned at least 10 percent in value of the outstanding stock of the distributing corporation, but only if the redemption qualified under section 302(b)(3) (determined without the application of section 302(c)(2)(A)(ii)).\nSubsec. (d)(2)(B).  Pub. L. 97–248, §\u202f223(a)(1) , substituted reference to a distribution to which section 302(b)(4) applies and which is made with respect to qualified stock for reference to a distribution of stock or an obligation of a corporation, which was engaged in at least one trade or business, which had not received property constituting a substantial part of its assets from the distributing corporation, in a transaction to which section 351 applied or as a contribution to capital, within the 5-year period ending on the date of the distribution, and at least 50 percent in value of the outstanding stock of which was owned by the distributing corporation at any time within the 9-year period ending one year before the date of the distribution.\nSubsec. (d)(2)(C).  Pub. L. 97–248, §\u202f223(a)(1) , substituted reference to a distribution of stock or an obligation of a corporation if the requirements of subsec. (e)(2) of this section are met with respect to the distribution for reference to a distribution of stock or securities pursuant to the terms of a final judgment rendered by a court with respect to the distributing corporation in a court proceeding under the Sherman Act ( 15 U.S.C. 1–7 ) or the Clayton Act ( 15 U.S.C. 12–27 ), or both, to which the United States was a party, but only if the distribution of such stock or securities in redemption of the distributing corporation’s stock was in furtherance of the purposes of the judgment.\nSubsec. (d)(2)(G).  Pub. L. 97–248, §\u202f223(a)(3) , struck out subpar. (G) which provided that a distribution of stock to a distributee which is not an organization exempt from tax under  section 501(a) of this title , if with respect to such distributee, subsec. (a)(1) or (b)(1) of  section 1101 of this title  applied to such distribution.\nSubsec. (e).  Pub. L. 97–248, §\u202f223(a)(2) , added subsec. (e).\n1980—Subsec. (a).  Pub. L. 96–471  substituted “section 453B” for “Section 453(d)”.\n1978—Subsec. (d)(2)(G), (H).  Pub. L. 95–600  redesignated subpar. (H) as (G).\n1976—Subsec. (d)(1)(B).  Pub. L. 94–455, §\u202f1901(a)  (42)(A), substituted “then a gain shall be recognized” for “then again shall be recognized”.\nSubsec. (d)(2).  Pub. L. 94–452  and  Pub. L. 94–455  §\u202f1901(a)(42)(B)(i), (C), struck out subpar. (C) relating to certain distributions before  Dec. 1, 1974 , struck out “ 26 Stat. 209 ;” before “ 15 U.S.C. 1–7 )” and “ 38 Stat. 730 ;” before “ 15 U.S.C. 12–27 )” in subpar. (D), added subpar. (H), and redesignated subpars. (D) to (G), as so amended, as subpars. (C) to (F), respectively.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f905(b)(1) , inserted reference to subsec. (d).\nSubsec. (d).  Pub. L. 91–172, §\u202f905(a) , added subsec. (d).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nPub. L. 98–369, div. A, title I, §\u202f54(d) ,  July 18, 1984 ,  98 Stat. 569 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1804(b)(3),  Oct. 22, 1986 ,  100 Stat. 2095 , 2799;  Pub. L. 100–647, title I, §\u202f1018(d)(1) –(3),  Nov. 10, 1988 ,  102 Stat. 3578 , provided that: \n “(1)   Subsection  (a).— Except as otherwise provided in this subsection, the amendments made by subsection (a) [amending this section] shall apply to distributions declared on or after  June 14, 1984 , in taxable years ending after such date. \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending  section 301 of this title ] shall apply to distributions after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(3)   Exception for distributions before  january 1, 1985 , to 80-percent corporate shareholders.— “(A)   In general .— The amendments made by subsection (a) shall not apply to any distribution before  January 1, 1985 , to an 80-percent corporate shareholder if the basis of the property distributed is determined under section 301(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(B)  80- percent corporate shareholder .— The term ‘80-percent corporate shareholder’ means, with respect to any distribution, any corporation which owns— “(i)  stock in the corporation making the distribution possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote, and \n \n “(ii)  at least 80 percent of the total number of shares of all other classes of stock of the distributing corporation (except nonvoting stock which is limited and preferred as to dividends). \n \n \n “(C)   Special rule for affiliated group filing consolidated return .— For purposes of this paragraph and paragraph (4), all members of the same affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986) which file a consolidated return for the taxable year which includes the date of the distribution shall be treated as 1 corporation. \n \n “(D)   Special rule for certain distributions before  january 1, 1988 .— “(i)   In general .— In the case of a transaction to which this subparagraph applies, subparagraph (A) shall be applied by substituting ‘1988’ for ‘1985’ and the amendments made by subtitle D of title VI of the Tax Reform Act of 1986 [sections 631 to 634 of  Pub. L. 99–514 , enacting sections 336 and 337 of this title, amending this section and sections 26, 312, 332, 334, 338, 341, 346, 367, 453, 453B, 467, 852, 897, 1056, 1248, 1255, 1276, 1363, 1366, 1374, and 1375 of this title, repealing sections 333, 336, and 337 of this title, and enacting provisions set out as a note under  section 301 of this title ] shall not apply. \n \n “(ii)   Transaction to which subparagaph  [sic]  applies .— This subparagraph appies [applies] to a transaction in which a Delaware corporation which was incorporated on  May 31, 1927 , and which was acquired by the transferee on  December 10, 1968 , transfers to the transferee stock in a corporation— “(I)  with respect to which such Delaware corporation is a 100-percent corporate shareholder, and \n \n “(II)  which is a Tennessee corporation which was incorporated on  March 2, 1978 ,, [sic] and which is a successor to an Indiana corporation which was incorporated on  June 28, 1946 , and acquired by the transferee on December 9 [10], 1968. \n \n \n \n \n “(4)   Exception for certain distributions where tender offer commenced on  may 23, 1984 .— “(A)   In general .— The amendments made by subsection (a) shall not apply to any distribution made before  September 1, 1986 , if— “(i)  such distribution consists of qualified stock held (directly or indirectly) on  June 15, 1984 , by the distributing corporation, \n \n “(ii)  control of the distributing corporation (as defined in section 368(c) of the Internal Revenue Code of 1986) is acquired other than in a tax-free transaction after  January 1, 1984 , but before  January 1, 1985 , \n \n “(iii)  a tender offer for the shares of the distributing corporation was commenced on  May 23, 1984 , and was amended on  May 24, 1984 , and \n \n “(iv)  the distributing corporation and the distributee corporation are members of the same affiliated group (as defined in section 1504 of such Code) which filed a consolidated return for the taxable year which includes the date of the distribution. \n \n \n\n If the common parent of any affiliated group filing a consolidated return meets the requirements of clauses (ii) and (iii), each other member of such group shall be treated as meeting such requirements. \n “(B)   Qualified stock .— For purposes of subparagraph (A), the term ‘qualified stock’ means any stock in a corporation which on  June 15, 1984 , was a member of the same affiliated group as the distributing corporation and which filed a consolidated return with the distributing corporation for the taxable year which included  June 15, 1984 . \n \n \n “(5)   Exception for certain distributions.— “(A)   In general .— The amendments made by this section [amending this section and sections 301 and 1223 of this title] shall not apply to distributions before  February 1, 1986 , if— “(i)  the distribution consists of property held on  March 7, 1984  (or property acquired thereafter in the ordinary course of a trade or business) by— “(I)  the controlled corporation, or \n \n “(II)  any subsidiary controlled corporation, \n \n \n “(ii)  a group of 1 or more shareholders (acting in concert)— “(I)  acquired, during the 1-year period ending on  February 1, 1984 , at least 10 percent of the outstanding stock of the controlled corporation, \n \n “(II)  held at least 10 percent of the outstanding stock of the common parent on  February 1, 1984 , and \n \n “(III)  submitted a proposal for distributions of interests in a royalty trust from the common parent or the controlled corporation, and \n \n \n “(iii)  the common parent acquired control of the controlled corporation during the 1-year period ending on  February 1, 1984 . \n \n \n “(B)   Definitions .— For purposes of this paragraph— “(i)  The term ‘common parent’ has the meaning given such term by section 1504(a) of the Internal Revenue Code of 1986. \n \n “(ii)  The term ‘controlled corporation’ means a corporation with respect to which 50 percent or more of the outstanding stock of its common parent is tendered for pursuant to a tender offer outstanding on  March 7, 1984 . \n \n “(iii)  The term ‘subsidiary controlled corporation’ means any corporation with respect to which the controlled corporation has control (within the meaning of section 368(c) of such Code) on  March 7, 1984 . \n \n \n \n “(6)   Exception for certain distribution of partnership interests .— The amendments made by this section shall not apply to any distribution before  February 1, 1986 , of an interest in a partnership the interests of which were being traded on a national securities exchange on  March 7, 1984 , if— “(A)  such interest was owned by the distributing corporation (or any member of an affiliated group within the meaning of section 1504(a) of such Code of which the distributing corporation was a member) on  March 7, 1984 , \n \n “(B)  the distributing corporation (or any such affiliated member) owned more than 80 percent of the interests in such partnership on  March 7, 1984 , and \n \n “(C)  more than 10 percent of the interests in such partnership was offered for sale to the public during the 1-year period ending on  March 7, 1984 .”\nAmendment by  section 712(j) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f223(b) ,  Sept. 3, 1982 ,  96 Stat. 484 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(7) ,  Jan. 12, 1983 ,  96 Stat. 2402 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to distributions after  August 31, 1982 . \n \n “(2)   Distributions pursuant to ruling requests before  july 23, 1982 .— In the case of a ruling request under section 311(d)(2)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the amendments made by this section) made before  July 23, 1982 , the amendments made by this section [amending this section] shall not apply to distributions made— “(A)  pursuant to a ruling granted pursuant to such request, and \n \n “(B)  either before  October 21, 1982 , or within 90 days after the date of such ruling. \n \n \n “(3)   Distributions pursuant to final judgments of court .— In the case of a final judgment described in section 311(d)(2)(C) of such Code (as in effect before the amendments made by this section) rendered before  July 23, 1982 , the amendments made by this section [amending this section] shall not apply to distributions made before  January 1, 1986 , pursuant to such judgment. \n \n “(4)   Certain distributions with respect to stock acquired before may 1982 .— The amendments made by this section [amending this section] shall not apply to distributions— “(A)  which meet the requirements of section 311(d)(2)(A) of such Code (as in effect on the day before the date of the enactment of this Act [ Sept. 3, 1982 ]), \n \n “(B)  which are made on or before  August 31, 1983 , and \n \n “(C)  which are made with respect to stock acquired after 1980 and before May 1982. \n \n \n “(5)   Distributions of timberland with respect to stock of forest products company .— If— “(A)  a forest products company distributes timberland to a shareholder in redemption of the common and preferred stock in such corporation held by such shareholder, \n \n “(B)  section 311(d)(2)(A) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this section) would have applied to such distributions, and \n \n “(C)  such distributions are made pursuant to 1 of 2 options contained in a contract between such company and such shareholder which is binding on  August 31, 1982 , and at all times thereafter, \n \n\n then such distributions of timberland having an aggregate fair market value on  August 31, 1982 , not in excess of $10,000,000 shall be treated as distributions to which section 311(d)(2)(A) of such Code (as in effect before the date of the enactment of this Act [ Sept. 3, 1982 ] applies.”\nFor effective date of amendment by  Pub. L. 96–471 , see  section 6(a)(1) of Pub. L. 96–471 , set out as an Effective Date note under  section 453 of this title .\nPub. L. 95–600, title VII, §\u202f703(j)(2)(C) ,  Nov. 6, 1978 ,  92 Stat. 2941 , provided that:  “The amendments made by this paragraph [amending this section] shall take effect as if included in section 2(b) of the Bank Holding Company Tax Act of 1976 [amending this section].”\nAmendment by section 1901(a)(42)(A), (C) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XIX, §\u202f1901(a)(42)(B)(ii) ,  Oct. 4, 1976 ,  90 Stat. 1771 , provided that:  “The amendments made by clause (i) [amending this section] shall apply only with respect to distributions after  November 30, 1974 .”\nPub. L. 94–452, §\u202f2(d)(4) ,  Oct. 2, 1976 ,  90 Stat. 1512 , provided that:  “The amendment made by subsection (b) [amending this section] shall take effect on  October 1, 1977 , with respect to distributions after  December 31, 1975 , in taxable years ending after  December 31, 1975 .”\nPub. L. 91–172, title IX, §\u202f905(c) ,  Dec. 30, 1969 ,  83 Stat. 714 , as amended by  Pub. L. 91–675 ,  Jan. 12, 1971 ,  84 Stat. 2059 , provided that: \n “(1)  Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by subsections (a) and (b) [amending this section and sections 301 and 312 of this title] shall apply with respect to distributions after  November 30, 1969 . \n \n “(2)  The amendments made by subsections (a) and (b) shall not apply to a distribution before  April 1, 1970 , pursuant to the terms of— “(A)  a written contract which was binding on the distributing corporation on  November 30, 1969 , and at all times thereafter before the distribution, \n \n “(B)  an offer made by the distributing corporation before  December 1, 1969 , \n \n “(C)  an offer made in accordance with a request for a ruling filed by the distributing corporation with the Internal Revenue Service before  December 1, 1969 , or \n \n “(D)  an offer made in accordance with a registration statement filed with the Securities and Exchange Commission before  December 1, 1969 . \n \n\n For purposes of subparagraphs (B), (C), and (D), an offer shall be treated as an offer only if it was in writing and not revocable by its express terms. \n \n “(3)  The amendments made by subsections (a) and (b) shall not apply to a distribution by a corporation of specific property in redemption of stock outstanding on  November 30, 1969 , if— “(A)  every holder of such stock on such date had the right to demand redemption of his stock in such specific property, and \n \n “(B)  the corporation had such specific property on hand on such date in a quantity sufficient to redeem all of such stock. \n \n\n For purposes of the preceding sentence, stock shall be considered to have been outstanding on  November 30, 1969 , if it could have been acquired on such date through the exercise of an existing right of conversion contained in other stock held on such date. \n \n “(4)  The amendments made by subsections (a) and (b) shall not apply to a distribution by a corporation of property (held on  December 1, 1969 , by the distributing corporation or a corporation which was a wholly owned subsidiary of the distributing corporation on such date) in redemption of stock outstanding on  November 30, 1969 , which is redeemed and canceled before  July 31, 1971 , if— “(A)  such redemption is pursuant to a resolution adopted before  November 1, 1969 , by the Board of Directors authorizing the redemption of a specific amount of stock constituting more than 10 percent of the outstanding stock of the corporation at the time of the adoption of such resolution; and \n \n “(B)  more than 40 percent of the stock authorized to be redeemed pursuant to such resolution was redeemed before  December 30, 1969 , and more than one-half of the stock so redeemed was redeemed with property other than money. \n \n \n “(5)  The amendments made by subsections (a) and (b) shall not apply to a distribution of stock, by a corporation organized prior to  December 1, 1969 , for the principal purpose of providing an equity participation plan for employees of the corporation whose stock is being distributed (hereinafter referred to as the ‘employer corporation’) if— “(A)  the stock being distributed was owned by the distributing corporation on  November 30, 1969 , \n \n “(B)  the stock being redeemed was acquired before  January 1, 1973 , pursuant to such equity participation plan by the shareholder presenting such stock for redemption (or by a predecessor of such shareholder), \n \n “(C)  the employment of the shareholder presenting the stock for redemption (or the predecessor of such shareholder) by the employer corporation commenced before  January 1, 1971 , \n \n “(D)  at least 90 percent in value of the assets of the distributing corporation on  November 30, 1969 , consisted of common stock of the employer corporation, and \n \n “(E)  at least 50 percent of the outstanding voting stock of the employer corporation is owned by the distributing corporation at any time within the nine-year period ending one year before the date of such distribution.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'For purposes of this subsection, the term “stock or securities” includes rights to acquire stock or securities.\nIn the case of a distribution or exchange to which section 355 (or so much of section 356 as relates to section 355) applies, proper allocation with respect to the earnings and profits of the distributing corporation and the controlled corporation (or corporations) shall be made under regulations prescribed by the Secretary.\nIn the case of a reorganization described in subparagraph (C) or (D) of section 368(a)(1), proper allocation with respect to the earnings and profits of the acquired corporation shall, under regulations prescribed by the Secretary, be made between the acquiring corporation and the acquired corporation (or any corporation which had control of the acquired corporation before the reorganization).\nFor purposes of computing the earnings and profits of a corporation for any taxable year beginning after  June 30, 1972 , the allowance for depreciation (and amortization, if any) shall be deemed to be the amount which would be allowable for such year if the straight line method of depreciation had been used for each taxable year beginning after  June 30, 1972 .\nIf for any taxable year a method of depreciation was used by the taxpayer which the Secretary has determined results in a reasonable allowance under section 167(a) and which is the unit-of-production method or other method not expressed in a term of years, then the adjustment to earnings and profits for depreciation for such year shall be determined under the method so used (in lieu of the straight line method).\nExcept as provided in subparagraph (B), in the case of tangible property to which section 168 applies, the adjustment to earnings and profits for depreciation for any taxable year shall be determined under the alternative depreciation system (within the meaning of section 168(g)(2)).\nFor purposes of computing the earnings and profits of a corporation, except as provided in clause (ii), any amount deductible under section 179, 179B, 179C, 179D, or 179E shall be allowed as a deduction ratably over the period of 5 taxable years (beginning with the taxable year for which such amount is deductible under section 179, 179B, 179C, 179D, or 179E, as the case may be).\nIn the case of a corporation that is a real estate investment trust, any amount deductible under section 179D shall be allowed in the year in which the property giving rise to such deduction is placed in service (or, in the case of energy efficient building retrofit property, the year in which the qualifying final certification is made).\nThe provisions of paragraph (1) shall not apply in computing the earnings and profits of a foreign corporation for any taxable year for which less than 20 percent of the gross income from all sources of such corporation is derived from sources within the United States.\nIn computing the earnings and profits of a corporation for any taxable year, the allowance for depreciation (and amortization, if any) shall be computed without regard to any basis adjustment under section 50(c).\nThe earnings and profits of a corporation shall not include income from the discharge of indebtedness to the extent of the amount applied to reduce basis under section 1017.\nThe earnings and profits of any corporation shall not be decreased by any interest with respect to which a deduction is not or would not be allowable by reason of section 163(f), unless at the time of issuance the issuer is a foreign corporation that is not a controlled foreign corporation (within the meaning of section 957) and the issuance did not have as a purpose the avoidance of section 163(f) of this subsection\u202f 1 1 \u202fSubsec. (m) was enacted without a period at the end.\nThe term “construction period” has the meaning given the term production period under section 263A(f)(4)(B). 2 2 \u202fSee References in Text note below.\nSections 173 and 248 shall not apply.\nEarnings and profits shall be increased or decreased by the amount of any increase or decrease in the LIFO recapture amount as of the close of each taxable year; except that any decrease below the LIFO recapture amount as of the close of the taxable year preceding the 1st taxable year to which this paragraph applies to the taxpayer shall be taken into account only to the extent provided in regulations prescribed by the Secretary.\nThe term “LIFO method” means the method authorized by section 472 (relating to last-in, first-out inventories).\nThe term “inventory assets” means stock in trade of the corporation, or other property of a kind which would properly be included in the inventory of the corporation if on hand at the close of the taxable year.\nIn the case of any installment sale, earnings and profits shall be computed as if the corporation did not use the installment method.\nIn the case of a taxpayer who uses the completed contract method of accounting, earnings and profits shall be computed as if such taxpayer used the percentage of completion method of accounting.\nIf a corporation distributes amounts in a redemption to which section 302(a) or 303 applies, the part of such distribution which is properly chargeable to earnings and profits shall be an amount which is not in excess of the ratable share of the earnings and profits of such corporation accumulated after  February 28, 1913 , attributable to the stock so redeemed.\nFor purposes of subsection (a)(2), the terms “original issue discount” and “issue price” have the same respective meanings as when used in subpart A of part V of subchapter P of this chapter.\nSection 263A(f)(4)(B), referred to in subsec. (n)(1)(C), was redesignated section 263A(f)(5)(B) by  Pub. L. 115–97, title I, §\u202f13801(a)(1) ,  Dec. 22, 2017 ,  131 Stat. 2169 .\n2022—Subsec. (k)(3)(B).  Pub. L. 117–169  designated existing provisions as cl. (i), inserted heading, substituted “For purposes of computing the earnings and profits of a corporation, except as provided in clause (ii)” for “For purposes of computing the earnings and profits of a corporation”, and added cl. (ii).\n2014—Subsec. (d)(2), (3).  Pub. L. 113–295, §\u202f221(a)(49) , redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “In the case of a distribution of stock or securities, or property, to which section 115(h) of the Internal Revenue Code of 1939 (or the corresponding provision of prior law) applied, the effect on earnings and profits of such distribution shall be determined under such section 115(h), or the corresponding provision of prior law, as the case may be.”\nSubsec. (k)(3)(B).  Pub. L. 113–295, §\u202f221(a)(34)(F) , struck out “179A,” after “section 179,” in heading and in two places in text.\n2006—Subsec. (k)(3)(B).  Pub. L. 109–432  substituted “179D, or 179E” for “or 179D” in heading and two places in text.\n2005—Subsec. (k)(3)(B).  Pub. L. 109–58, §\u202f1331(b)(5) , substituted “179, 179A, 179B, 179C, or 179D” for “179, 179A, 179B, or 179C” in heading and two places in text.\nPub. L. 109–58, §\u202f1323(b)(3) , substituted “179, 179A, 179B, or 179C” for “179 179A, or 179B” in heading and two places in text.\n2004—Subsec. (j).  Pub. L. 108–357, §\u202f413(c)(4) , struck out subsec. (j) which related to earnings and profits of foreign investment companies.\nSubsec. (k)(3)(B).  Pub. L. 108–357, §\u202f338(b)(3) , substituted “179A, or 179B” for “or 179A” in heading and two places in text.\nSubsec. (m).  Pub. L. 108–357, §\u202f413(c)(5) , struck out “,\u2000a foreign investment company (within the meaning of section 1246(b)), or a foreign personal holding company (within the meaning of section 552)” before “and the issuance”.\n1997—Subsec. (k)(3)(B).  Pub. L. 105–34 , in heading substituted “179 or 179A” for “179” and in text substituted “section 179 or 179A shall” for “section 179 shall” and “section 179 or 179A, as the case may be)” for “section 179)”.\n1990—Subsec. (k)(2).  Pub. L. 101–508, §\u202f11812(b)(5) , substituted heading for one which read: “Exceptions” and amended text generally. Prior to amendment, text read as follows: “If for any taxable year beginning after  June 30, 1972 , a method of depreciation was used by the taxpayer which the Secretary has determined results in a reasonable allowance under section 167(a), and which is not—\n“(A) a declining balance method,\n“(B) the sum of the years-digit method, or\n“(C) any other method allowable solely by reason of the application of subsection (b)(4) or (j)(1)(C) of section 167,\nthen the adjustment to earnings and profits for depreciation for such year shall be determined under the method so used (in lieu of under the straight line method).”\nSubsec. (k)(5).  Pub. L. 101–508, §\u202f11813(b)(14) , substituted “section 50(c)” for “section 48(q)”.\n1989—Subsec. (b).  Pub. L. 101–239, §\u202f7811(m)(2) , made clarifying amendment to directory language of  Pub. L. 100–647, §\u202f1018(d)(4) , see 1988 Amendment note below.\nSubsec. (n)(2)(A)(ii).  Pub. L. 101–239, §\u202f7611(f)(5)(A) , substituted “in which such amount was paid or incurred” for “in which the production from the well begins”.\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1018(d)(4) , as amended by  Pub. L. 101–239, §\u202f7811(m)(2) , substituted “of any property (other than an obligation of such corporation)” for “of any property” in introductory provisions.\nSubsec. (k)(4).  Pub. L. 100–647, §\u202f1002(a)(3) , substituted “paragraph (1)” for “paragraphs (1) and (3)”.\nSubsec. (n)(1)(B).  Pub. L. 100–647, §\u202f1018(u)(4) , made technical amendment to directory language of  Pub. L. 99–514, §\u202f803(b)(3)(A) . See 1986 Amendment note below.\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f1804(f)(1)(A) , amended subsec. (b) generally, substituting provisions relating to distributions of appreciated property for provisions relating to distribution of certain inventory assets.\nSubsec. (c).  Pub. L. 99–514, §\u202f1804(f)(1)(B) , (C), struck out “,\u2000etc.” after “liabilities” in heading and struck out par. (3) which read as follows: “any gain recognized to the corporation on the distribution.”\nSubsec. (k)(3).  Pub. L. 99–514, §\u202f201(b) , amended par. (3) generally, substituting provisions relating to tangible property to which section 168 applies and amounts deductible under section 179 for provisions relating to recovery property within the meaning of section 168, amounts deductible under section 179, and flexibility if a different recovery percentage is elected under section 168 based on a longer recovery period.\nSubsec. (k)(3)(A).  Pub. L. 99–514, §\u202f1809(a)(2)(C)(ii) , in subpar. (A), struck out “and rules similar to the rules under the next to the last sentence of section 168(b)(2)(A) and section 168(b)(2)(B) shall apply” after “low-income housing)”.\nSubsec. (k)(4).  Pub. L. 99–514, §\u202f201(d)(6) , struck out last sentence “In determining the earnings and profits of such corporation in the case of recovery property (within the meaning of section 168), the rules of section 168(f)(2) shall apply.”\nSubsec. (n)(1)(B).  Pub. L. 99–514, §\u202f803(b)(3)(A) , as amended by  Pub. L. 100–647, §\u202f1018(u)(4) , struck out “(determined without regard to section 189)” after “incurred”.\nSubsec. (n)(1)(C).  Pub. L. 99–514, §\u202f803(b)(3)(B) , added subpar. (C) and struck out former subpar. (C) which read as follows: “The term ‘construction period’ has the meaning given such term by section 189(e)(2) (determined without regard to any real property limitation).”\nSubsec. (n)(3).  Pub. L. 99–514, §\u202f241(b)(1) , struck out “,\u2000177,” after “sections 173”.\nSubsec. (n)(4).  Pub. L. 99–514, §\u202f631(e)(1) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Earnings and profits shall be increased or decreased by the amount of any increase or decrease in the LIFO recapture amount (determined under section 336(b)(3)) as of the close of each taxable year; except that any decrease below the LIFO recapture amount as of the close of the taxable year preceding the first taxable year to which this paragraph applies to the taxpayer shall be taken into account only to the extent provided in regulations prescribed by the Secretary.”\nPub. L. 99–514, §\u202f1804(f)(1)(D) , redesignated par. (5) as (4). Former par. (4), relating to certain untaxed appreciation of distributed property, was struck out.\nSubsec. (n)(5) to (7).  Pub. L. 99–514, §\u202f1804(f)(1)(D) , redesignated pars. (6) to (8) as (5) to (7), respectively. Former par. (5) redesignated (4).\nSubsec. (n)(8), (9).  Pub. L. 99–514, §\u202f1804(f)(1)(D) , (E), redesignated par. (9) as (8) and substituted provisions of subpars. (A) and (B) for “paragraphs (5), (6), and (7) shall apply only in the case of taxable years beginning after  December 31, 1985 .” Former par. (8) redesignated (7).\n1985—Subsec. (k)(3)(A).  Pub. L. 99–121  substituted “19-year real property” for “18-year real property” wherever appearing.\n1984—Subsec. (a)(2).  Pub. L. 98–369, §\u202f61(c)(1)(A) , inserted “(or, in the case of obligations having original issue discount, the aggregate issue price of such obligations)”.\nSubsec. (e).  Pub. L. 98–369, §\u202f61(a)(2)(B) , struck out subsec. (e) which provided: “In the case of amounts distributed in a redemption to which section 302(a) or 303 applies, the part of such distribution which is properly chargeable to capital account shall not be treated as a distribution of earnings and profits.”\nSubsec. (h).  Pub. L. 98–369, §\u202f63(b) , amended subsec. (h) generally, designating existing provisions as par. (1) and adding par. (2).\nSubsec. (j)(3).  Pub. L. 98–369, §\u202f61(a)(2)(A) , struck out par. (3) which provided: “If a foreign investment company (as defined in section 1246) distributes amounts in a redemption to which section 302(a) or 303 applies, the part of such distribution which is properly chargeable to earnings and profits shall be an amount which is not in excess of the ratable share of the earnings and profits of the company accumulated after  February 28, 1913 , attributable to the stock so redeemed.”\nSubsec. (k)(3)(A).  Pub. L. 98–369, §\u202f111(e)(5) , substituted “18-year real property and low-income housing” for “15-year real property” in three places.\nPub. L. 98–369, §\u202f61(b) , substituted “40 years” for “35 years” in table item relating to 15-year real property. Directory language that table be amended by substituting “40 years” for “35 years” in item relating to 15-year real property and 20-year real property, was executed by making the substitution in item relating to 15-year real property. The table contained no item relating to 20-year real property.\nSubsec. (n).  Pub. L. 98–369, §\u202f61(a)(1) , added subsec. (n).\nSubsec. ( o ).  Pub. L. 98–369, §\u202f61(c)(1)(B) , added subsec. ( o ).\n1983—Subsec. (j)(3).  Pub. L. 97–448  substituted “Redemptions” for “Partial liquidations and redemptions” in heading, and in text struck out “in partial liquidation or” after “distributes amounts”.\n1982—Subsec. (e).  Pub. L. 97–248, §\u202f222(e)(3) , struck out “partial liquidations and” in heading, and in text struck out “in partial liquidation (whether before, on, or after  June 22, 1954 ) or” after “amounts distributed”.\nSubsec. (k)(5).  Pub. L. 97–248, §\u202f205(a)(3) , added par. (5).\nSubsec. (m).  Pub. L. 97–248, §\u202f310(b)(3) , added subsec. (m).\n1981—Subsec. (k)(3), (4).  Pub. L. 97–34  added par. (3), redesignated former par. (3) as (4) substituted “The provisions of paragraphs (1) and (3)” for “The provisions of paragraph (1)”, and inserted provision that the rules of section 168(f)(2) shall apply in determining the earnings and profits of the corporation in the case of recovery property (within the meaning of section 168).\n1980—Subsec. ( l ).  Pub. L. 96–589  added subsec. ( l ).\n1978—Subsec. (c)(3).  Pub. L. 95–628  substituted “gain recognized to the corporation on the distribution” for “gain to the corporation recognized under subsection (b), (c), or (d) of section 311, under section 341(f), or under section 617(d)(1), 1245(a), 1250(a), 1251(c), 1252(a), or 1254(a)”.\n1976—Subsec. (c)(3).  Pub. L. 94–455, §\u202f205(c)(1)(D) , substituted “1252(a), or 1254(a)” for “or 1252(a)”.\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f1901(a)(43)(A) , substituted “this title” for “this Code” wherever appearing.\nSubsec. (h).  Pub. L. 94–455 , §§\u202f1901(a)(43)(B), 1906(b)(13)(A), redesignated subsec. (i) as (h) and struck out “or his delegate” after “Secretary”. Former subsec. (h), which related to earnings and profits of personal service corporations, was struck out.\nSubsec. (i).  Pub. L. 94–455, §\u202f1901(a)(43)(B) , (C), redesignated subsec. (j) as (i), and, among other changes, substituted “paragraph (2)” for “subparagraph (B) of the preceding sentence” and “of this subsection” for “of this paragraph”, and struck out provisions relating to the effective date of this subsec. Former subsec. (i) redesignated (h).\nSubsec. (j).  Pub. L. 94–455 , §§\u202f1901(a)(43)(D), (b)(32)(B)(i), 1906(b)(13)(A), redesignated subsec. ( l ) as (j), struck out “or his delegate” after “Secretary” in par. (1) and in par. (3) provision relating to the effective date of such paragraph. Former subsec. (j) redesignated (i).\nSubsec. (k).  Pub. L. 94–455 , §§\u202f1901(b)(32)(B)(i), 1906(b)(13)(A), redesignated subsec. (m) as (k) and struck out “or his delegate” after “Secretary” in par. (2). Former subsec. (k), relating to special adjustment on disposition of antitrust stock received as a dividend, was struck out.\nSubsec. ( l ).  Pub. L. 94–455, §\u202f1901(b)(32)(B)(i) , redesignated subsec. ( l ) as (j).\nSubsec. (m).  Pub. L. 94–455, §\u202f1901(b)(32)(B)(i) , redesignated subsec. (m) as (k).\n1969—Subsec. (c)(3).  Pub. L. 91–172 , §§\u202f211(b)(3), 905(b)(2), substituted “1250(a), 1251(c), or 1252(a)”, for “or 1250(a)” and inserted reference to section 311(d).\nSubsec. (m).  Pub. L. 91–172, §\u202f442(a) , added subsec. (m).\n1966—Subsec. (c)(3).  Pub. L. 89–570  inserted reference to section 617(d)(1).\n1964—Subsec. (c)(3).  Pub. L. 88–484  authorized adjustment for amount of gain recognized under section 341(f).\nPub. L. 88–272  inserted reference to section 1250(a).\n1962—Subsec. (c)(3).  Pub. L. 87–834, §\u202f13(f)(3) , included any gain recognized under section 1245(a).\nSubsec. (k).  Pub. L. 87–403  added subsec. (k).\nSubsec. ( l ).  Pub. L. 87–834, §\u202f14(b)(1) , added subsec. ( l ).\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 13303(d)(1) of Pub. L. 117–169 , set out as a note under  section 179D of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–432  applicable to costs paid or incurred after  Dec. 20, 2006 , see  section 404(c) of Pub. L. 109–432 , set out as an Effective Date note under  section 179E of this title .\nAmendment by  section 1323(b)(3) of Pub. L. 109–58  applicable to properties placed in service after  Aug. 8, 2005 , see  section 1323(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 179C of this title .\nAmendment by  section 1331(b)(5) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , see  section 1331(d) of Pub. L. 109–58 , set out as an Effective Date note under  section 179D of this title .\nAmendment by  section 338(b)(3) of Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 338(c) of Pub. L. 108–357 , set out as an Effective Date note under  section 179B of this title .\nAmendment by section 413(c)(4), (5) of  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the amendments made by section 1913 of the Energy Policy Act of 1992,  Pub. L. 102–486 , see  section 1604(a)(4) of Pub. L. 105–34 , set out as a note under  section 263 of this title .\nAmendment by  section 11812(b)(5) of Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  section 11813(b)(14) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  section 7611(f)(5)(A) of Pub. L. 101–239  applicable to costs paid or incurred in taxable years beginning after  Dec. 31, 1989 , see  section 7611(g)(2) of Pub. L. 101–239 , set out as a note under  section 56 of this title .\nAmendment by  section 7811(m)(2) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the amendment by  section 803(b)(3) of Pub. L. 99–514  is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nAmendment by section 201(b), (d)(6) of  Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by section 201(b), (d)(6) of  Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 241(b)(1) of Pub. L. 99–514  applicable to expenditures paid or incurred after  Dec. 31, 1986 , except as otherwise provided, see  section 241(c) of Pub. L. 99–514 , set out as an Effective Date of Repeal note under former  section 177 of this title .\nAmendment by  section 631(e)(1) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 803(b)(3) of Pub. L. 99–514  applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .\nAmendment by sections 1804(f)(1)(A)–(E) and 1809(a)(2)(C)(ii) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(f)(3) ,  Oct. 22, 1986 ,  100 Stat. 2805 , provided that:  “Paragraph (7) of section 312(n) of the Internal Revenue Code of 1954 [now 1986] (as redesignated by paragraph (1)(D) of this subsection), and the amendments made by section 61(a)(2) of the Tax Reform Act of 1984 [amending this section], shall apply to distributions in taxable years beginning after  September 30, 1984 .”\nAmendment by  Pub. L. 99–121  applicable with respect to property placed in service by the taxpayer after  May 8, 1985 , with specified exceptions, see  section 105(b) of Pub. L. 99–121 , set out as a note under  section 168 of this title .\nPub. L. 98–369, div. A, title I, §\u202f61(e)(1) –(3),  July 18, 1984 ,  98 Stat. 582 , 583, as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Adjustments to earnings and profits.— “(A)   Paragraphs (1), (2), and (3) of section 312 (n).— The provisions of paragraphs (1), (2), and (3) of section 312(n) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall apply to amounts paid or incurred in taxable years beginning after  September 30, 1984 . \n \n “(B)   Paragraph (4) of section 312 (n).— The provisions of paragraph (4) of section 312(n) of such Code (as so added) shall apply to distributions after  September 30, 1984 ; except that such provisions shall not apply to any distribution to which the amendments made by section 54(a) of this Act [amending  section 311 of this title ] do not apply. \n \n “(C)   LIFO inventory .— The provisions of paragraph (5) of section 312(n) of such Code (as so added) shall apply to taxable years beginning after  September 30, 1984 . \n \n “(D)   Installment sales .— The provisions of paragraph (6) of section 312(n) of such Code (as so added) shall apply to sales after  September 30, 1984 , in taxable years ending after such date. \n \n “(E)   Completed contract method .— The provisions of paragraph (7) of section 312(n) of such Code (as so added) shall apply to contracts entered into after  September 30, 1984 , in taxable years ending after such date. \n \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall apply to property placed in service in taxable years beginning after  September 30, 1984 . \n \n “(3)   Subsection  (c).— The amendments made by subsection (c) [amending this section and  section 1275 of this title ] shall apply with respect to distributions declared after  March 15, 1984 , in taxable years ending after such date.”\nAmendment by  section 61(a)(2) of Pub. L. 98–369  applicable to distributions in taxable years beginning after  Sept. 30, 1984 , see  section 1804(f)(3) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note above.\nPub. L. 99–514, title XVIII, §\u202f1804(f)(1)(F) ,  Oct. 22, 1986 ,  100 Stat. 2805 , provided that:  “Any reference in subsection (e) of section 61 of the Tax Reform Act of 1984 [set out above] to a paragraph of section 312(n) of the Internal Revenue Code of 1954 [now 1986] shall be treated as a reference to such paragraph as in effect before its redesignation by subparagraph (D) [see 1986 Amendment note above].”\nPub. L. 98–369, div. A, title I, §\u202f63(c) ,  July 18, 1984 ,  98 Stat. 584 , provided that:  “The amendment made by this section [amending this section and  section 368 of this title ] shall apply to transactions pursuant to plans adopted after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 111(e)(5) of Pub. L. 98–369  applicable with respect to property placed in service by the taxpayer after  Mar. 15, 1984 , subject to certain exceptions, see  section 111(g) of Pub. L. 98–369 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 97–448  effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 311(d) of Pub. L. 97–448 , set out as a note under  section 31 of this title .\nAmendment by  section 205(a)(3) of Pub. L. 97–248  applicable to periods after  Dec. 31, 1982 , under rules similar to the rules of  section 48(m) of this title , with certain qualifications, see  section 205(c)(1) of Pub. L. 97–248 , set out as an Effective Date note under  section 196 of this title .\nAmendment by  section 222(e)(3) of Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .\nAmendment by  section 310(b)(3) of Pub. L. 97–248  applicable to obligations issued after  Dec. 31, 1982 , with exceptions for certain warrants, see  section 310(d) of Pub. L. 97–248 , set out as a note under  section 103 of this title .\nAmendment by  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in proceedings in bankruptcy cases or similar judicial proceedings or in proceedings under Title 11, Bankruptcy, commencing on or before  Dec. 31, 1980 , except as otherwise provided, see  section 7 of Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 95–628  applicable to distributions made after  Nov. 10, 1978 , see  section 3(d) of Pub. L. 95–628 , set out as a note under  section 301 of this title .\nAmendment by  section 205(c)(1)(D) of Pub. L. 94–455  effective for taxable years ending after  Dec. 31, 1975 , see  section 205(e) of Pub. L. 94–455 , set out as a note under  section 1254 of this title .\nAmendment by  section 1901(a)(43) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1901(b)(32) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 211(b)(3) of Pub. L. 91–172  applicable to taxable years beginning after  December 31, 1969 , see  section 211(c) of Pub. L. 91–172 , set out as a note under  section 301 of this title .\nAmendment by section 905(b)(2)  Pub. L. 91–172  effective with respect to distributions made after  Nov. 30, 1969 , see  section 905(c) of Pub. L. 91–172 , set out as a note under  section 311 of this title .\nAmendment by  Pub. L. 89–570  applicable to taxable years ending after  Sept. 12, 1966 , but only in respect of expenditures paid or incurred after such date, see  section 3 of Pub. L. 89–570 , set out as an Effective Date note under  section 617 of this title .\nAmendment by  Pub. L. 88–484  applicable with respect to transactions after  Aug. 22, 1964  in taxable years ending after such date, see  section 2 of Pub. L. 88–484 , set out as a note under  section 301 of this title .\nAmendment by  Pub. L. 88–272  applicable to dispositions after  Dec. 31, 1963 , in taxable years ending after such date, see  section 231(c) of Pub. L. 88–272 , set out as an Effective Date note under  section 1250 of this title .\nAmendment by  section 13(f)(3) of Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nPub. L. 87–834, §\u202f14(c) ,  Oct. 16, 1962 ,  76 Stat. 1041 , provided that:  “The amendments made by this section [enacting sections 1246 and 1247 of this title and amending this section and sections 751 and 1223 of this title] shall apply with respect to taxable years beginning after  December 31, 1962 .”\nPub. L. 87–403, §\u202f3(g) ,  Feb. 2, 1962 ,  76 Stat. 8 , provided that:  “The amendments made by this section [amending this section and sections 535, 543, 545, 556 and 561 of this title] shall apply only with respect to distributions made after the date of the enactment of this Act [ Feb. 2, 1962 ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'The definition in subsection (a) shall not apply to the term “dividend” as used in subchapter L in any case where the reference is to dividends of insurance companies paid to policyholders as such.\nThe term “dividend” also means any distribution of property (whether or not a dividend as defined in subsection (a)) which constitutes a “deficiency dividend” as defined in section 860(f).\nIn the case of a regulated investment company that has a taxable year other than a calendar year, if the distributions by the company with respect to any class of stock of such company for the taxable year exceed the company’s current and accumulated earnings and profits which may be used for the payment of dividends on such class of stock, the company’s current earnings and profits shall, for purposes of subsection (a), be allocated first to distributions with respect to such class of stock made during the portion of the taxable year which precedes January 1.\n2010—Subsec. (b)(4).  Pub. L. 111–325  added par. (4).\n1978—Subsec. (b)(3).  Pub. L. 95–600  inserted “regulated investment company or” after “distributions by a” in heading and substituted in text “section 860(f)” for “section 859(d)”.\n1976—Subsec. (b)(2)(B)(ii).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(3).  Pub. L. 94–455, §\u202f1601(d) , added par. (3).\n1964—Subsec. (b)(2).  Pub. L. 88–272  inserted definition of “distribution of property”.\n1956—Subsec. (b)(1). Act  Mar. 13, 1956 , substituted “subchapter L” for “sections 803(e), 821(a)(2), and 832(c)(11)”.\nPub. L. 111–325, title III, §\u202f305(b) ,  Dec. 22, 2010 ,  124 Stat. 3549 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nAmendment by  Pub. L. 95–600  applicable with respect to determinations (as defined in  section 860(e) of this title ) after  Nov. 6, 1978 , see  section 362(e) of Pub. L. 95–600 , set out as an Effective Date note under  section 860 of this title .\nFor effective date of amendment by  section 1601(d) of Pub. L. 94–455 , see  section 1608(a) of Pub. L. 94–455 , set out as a note under  section 857 of this title .\nPub. L. 88–272, title II, §\u202f225 ( l ),  Feb. 26, 1964 ,  78 Stat. 94 , provided that: \n “(1)  The amendments made by this section [enacting section 1022, redesignating former section 1022 as 1023, amending this section and sections 331, 333, 381, 541, 542, 543, 544, 545, 551, 553, 554, 562, 856, 1016, 1361, 6501, and the analysis preceding section 1011, and enacting provisions set out as a note under  section 333 of this title ] (other than by subsections (c)(1), (f), (g), and (j) [enacting section 1022, redesignating former section 1022 as 1023, amending this section and sections 331, 333, 542, 551, 562, 1016, and the analysis preceding  section 1011 of this title ]) shall apply to taxable years beginning after  December 31, 1963 . \n \n “(2)  The amendment made by subsection (c)(1) [amending  section 542 of this title ] shall apply to taxable years beginning after  October 16, 1962 . \n \n “(3)  The amendments made by subsections (f) and (g) [amending this section and sections 331, 333, 551, and 562 of this title] shall apply to distributions made in any taxable year of the distributing corporation beginning after  December 31, 1963 . \n \n “(4)  The amendments made by subsection (j) [enacting section 1022, redesignating former section 1022 as 1023, and amending section 1016 and the analysis preceding  section 1011 of this title ] shall apply in respect of decedents dying after  December 31, 1963 . \n \n “(5)  Subsection (h) [set out as a note under  section 333 of this title ] shall apply to taxable years beginning after  December 31, 1963 .”\nAct Mar. 13, 1956, ch. 83, §\u202f6 ,  70 Stat. 49 , provided that:  “The amendments made by this Act [amending this section and sections 501, 594, 801 to 805, 811 to 813, 816 to 818, 821, 822, 832, 841, 842, 843, 891, 1201, 1504, and 4371 of this title] shall apply only to taxable years beginning after  December 31, 1954 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'For purposes of this part, the term “property” means money, securities, and any other property; except that such term does not include stock in the corporation making the distribution (or rights to acquire such stock).\nFor purposes of this part, stock shall be treated as redeemed by a corporation if the corporation acquires its stock from a shareholder in exchange for property, whether or not the stock so acquired is cancelled, retired, or held as treasury stock.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DISTRIBUTIONS BY CORPORATIONS'},
  'content': 'For purposes of subparagraph (A)(ii), a legally adopted child of an individual shall be treated as a child of such individual by blood.\nStock owned, directly or indirectly, by or for a partnership or estate shall be considered as owned proportionately by its partners or beneficiaries.\nIf 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stock owned, directly or indirectly, by or for such corporation, in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation.\nStock owned, directly or indirectly, by or for a partner or a beneficiary of an estate shall be considered as owned by the partnership or estate.\nIf 50 percent or more in value of the stock in a corporation is owned, directly or indirectly, by or for any person, such corporation shall be considered as owning the stock owned, directly or indirectly, by or for such person.\nIf any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock.\nExcept as provided in subparagraphs (B) and (C), stock constructively owned by a person by reason of the application of paragraph (1), (2), (3), or (4), shall, for purposes of applying paragraphs (1), (2), (3), and (4), be considered as actually owned by such person.\nStock constructively owned by an individual by reason of the application of paragraph (1) shall not be considered as owned by him for purposes of again applying paragraph (1) in order to make another the constructive owner of such stock.\nStock constructively owned by a partnership, estate, trust, or corporation by reason of the application of paragraph (3) shall not be considered as owned by it for purposes of applying paragraph (2) in order to make another the constructive owner of such stock.\nFor purposes of this paragraph, if stock may be considered as owned by an individual under paragraph (1) or (4), it shall be considered as owned by him under paragraph (4).\n2005—Subsec. (b)(8).  Pub. L. 109–135  substituted “section 6038(e)(2)” for “section 6038(d)(2)”.\n1997—Subsec. (b)(8).  Pub. L. 105–34  substituted “6038(d)(2)” for “6038(d)(1)”.\n1986—Subsec. (b)(5).  Pub. L. 99–514  substituted “382( l )(3)” for “382(a)(3)”.\n1984—Subsec. (a)(5)(E).  Pub. L. 98–369, §\u202f721(j) , added subpar. (E).\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f712(k)(5)(E) , substituted “section 338(h)(3) (defining purchase)” for “section 338(h)(3)(B) (relating to purchase of stock from subsidiaries, etc.)”.\n1982—Subsec. (b)(4).  Pub. L. 97–248  substituted “section 338(h)(3)(B) (relating to purchase of stock from subsidiaries, etc.)” for “section 334(b)(3)(C) (relating to basis of property received in certain liquidations of subsidiaries)”.\n1964—Subsec. (a).  Pub. L. 88–554, §\u202f4(a) , struck out sidewise attribution by providing that when stock is attributed to a partnership, estate, trust, or corporation from a partner, shareholder, or beneficiary, this stock is not to be attributed again to another partner, beneficiary, or shareholder.\nSubsec. (b)(7), (8).  Pub. L. 88–554, §\u202f4(b)(2) , added par. (7) and redesignated former par. (7) as (8).\n1962—Subsec. (b)(7).  Pub. L. 87–834  added par. (7).\n1960—Subsec. (b)(6).  Pub. L. 86–779  added par. (6).\nPub. L. 105–34, title XI, §\u202f1142(f) ,  Aug. 5, 1997 ,  111 Stat. 983 , provided that:  “The amendments made by this section [amending this section and sections 901 and 6038 of this title] shall apply to annual accounting periods beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 99–514  applicable to any ownership change after  Dec. 31, 1986 , except as otherwise provided, see  section 621(f) of Pub. L. 99–514 , as amended, set out as a note under  section 382 of this title .\nAmendment by  section 712(k)(5)(E) of Pub. L. 98–369  not applicable to any qualified stock purchase where the acquisition date is before  Sept. 1, 1982 , see  section 712(k)(9)(A) of Pub. L. 98–369 , set out as a note under  section 338 of this title .\nAmendment by  section 712(k)(5)(E) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  section 721(j) of Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nAmendment by  Pub. L. 97–248  applicable to any target corporation with respect to which the acquisition date occurs after  Aug. 31, 1982 , with special rules for certain acquisitions before  Sept. 1, 1982 , and certain acquisitions of financial institutions in which there was a binding contract on  July 22, 1982 , to acquire control, see  section 224(d) of Pub. L. 97–248 , set out as an Effective Date note under  section 338 of this title .\nPub. L. 88–554, §\u202f4(c) ,  Aug. 31, 1964 ,  78 Stat. 764 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and sections 304, 382, 856, 958, and 6038 of this title] shall take effect on the date of the enactment of this Act, [ Aug. 31, 1964 ], except that, for purposes of sections 302 and 304 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], such amendments shall not apply with respect to distributions in payment for stock acquisitions or redemptions, if such acquisitions or redemptions occurred before the date of the enactment of this Act.”\nAmendment by  Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'Amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock.\nSection 301 (relating to effects on shareholder of distributions of property) shall not apply to any distribution of property (other than a distribution referred to in paragraph (2)(B) of section 316(b)) in complete liquidation.\nFor general rule for determination of the amount of gain or loss recognized, see section 1001.\n2018— Pub. L. 115–141  substituted “shareholder” for “shareholders” in section catchline.\n1982—Subsec. (a).  Pub. L. 97–248, §\u202f222(a) , substituted provisions that amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock for provisions that, in complete liquidations, amounts distributed shall be treated as in full payment in exchange for the stock, while amounts distributed in partial liquidation shall be treated as in part or full payment in exchange for the stock.\nSubsec. (b).  Pub. L. 97–248, §\u202f222(e)(1)(B) , struck out “partial or” before “complete liquidation”.\n1976—Subsec. (c).  Pub. L. 94–455  substituted “reference” for “references” in heading and struck out cross reference relating to general rule for determination of the amount of gain or loss to the distributee and substituted “section 1001” for “section 1002”.\n1964—Subsec. (b).  Pub. L. 88–272  inserted “(other than a distribution referred to in paragraph (2)(B) of section 316(b))”.\nAmendment by  Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 88–272  applicable to distribution made in any taxable year of the distributing corporation beginning after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272 , set out as a note under  section 316 of this title .\nPub. L. 88–272, title II, §\u202f225(h) ,  Feb. 26, 1964 ,  78 Stat. 90 , provided that in the case of corporations referred to in former subsec. (g)(3) of this section the amendments made by  section 225 of Pub. L. 88–272  do not apply if there is a complete liquidation of such corporation and if the distribution of all the property under such liquidation occurs before  Jan. 1, 1966 , except for certain liquidations to which  section 332 of this title  applies.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'No gain or loss shall be recognized on the receipt by a corporation of property distributed in complete liquidation of another corporation.\nIf a corporation receives a distribution from a regulated investment company or a real estate investment trust which is considered under subsection (b) as being in complete liquidation of such company or trust, then, notwithstanding any other provision of this chapter, such corporation shall recognize and treat as a dividend from such company or trust an amount equal to the deduction for dividends paid allowable to such company or trust by reason of such distribution.\nFor purposes of this subsection, the term “affiliated group” has the meaning given such term by section 1504(a) (without regard to paragraph (2) of section 1504(b)).\nIf the distributee of a distribution described in paragraph (1) is a controlled foreign corporation (as defined in section 957), then notwithstanding paragraph (1) or subsection (a), such distribution shall be treated as a distribution to which section 331 applies.\nThe Secretary shall provide such regulations as appropriate to prevent the abuse of this subsection, including regulations which provide, for the purposes of clause (iv) of paragraph (2)(A), that a corporation is not in existence for any period unless it is engaged in the active conduct of a trade or business or owns a significant ownership interest in another corporation so engaged.\n2018—Subsec. (d)(2)(B).  Pub. L. 115–141  substituted “paragraph (2)” for “paragraphs (2) and (4)”.\n2005—Subsec. (d)(1)(B).  Pub. L. 109–135  substituted “distribution of property to which section 301 applies” for “distribution to which section 301 applies”.\n2004—Subsec. (d).  Pub. L. 108–357  added subsec. (d).\n1998—Subsec. (b).  Pub. L. 105–277, §\u202f3001(b)(1) , substituted “this section” for “subsection (a)” in introductory provisions.\nSubsec. (c).  Pub. L. 105–277, §\u202f3001(a) , added subsec. (c).\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1804(e)(6)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the corporation receiving such property was, on the date of the adoption of the plan of liquidation, and has continued to be at all times until the receipt of the property, the owner of stock (in such other corporation) possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and the owner of at least 80 percent of the total number of shares of all other classes of stock (except nonvoting stock which is limited and preferred as to dividends); and either”.\nSubsec. (c).  Pub. L. 99–514, §\u202f631(e)(2) , struck out subsec. (c) containing special rule for indebtedness of subsidiary to parent in relation to complete liquidations of subsidiaries.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 108–357, title VIII, §\u202f893(b) ,  Oct. 22, 2004 ,  118 Stat. 1647 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions in complete liquidation occurring on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 105–277, div. J, title III, §\u202f3001(c) ,  Oct. 21, 1998 ,  112 Stat. 2681–904 , provided that:  “The amendments made by this section [amending this section and  section 334 of this title ] shall apply to distributions after  May 21, 1998 .”\nAmendment by  section 631(e)(2) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(e)(6)(B) ,  Oct. 22, 1986 ,  100 Stat. 2803 , provided that: \n “(i)   In general .— Except as provided in clause (iii), the amendment made by subparagraph (A) [amending this section] shall apply with respect to plans of complete liquidation adopted after  March 28, 1985 . \n \n “(ii)   Certain distributions made after  december 31, 1984 .— Except as provided in clause (iii), the amendment made by subparagraph (A) shall also apply with respect to plans of complete liquidations adopted on or before  March 28, 1985 , pursuant to which any distribution is made in a taxable year beginning after  December 31, 1984  ( December 31, 1983 , in the case of an affiliated group to which an election under section 60(b)(7) of the Tax Reform Act of 1984 [ Pub. L. 98–369 , set out as a note under  section 1504 of this title ] applies), but only if the liquidating corporation and any corporation which receives a distribution in complete liquidation of such corporation are members of an affiliated group of corporations filing a consolidated return for the taxable year which includes the date of the distribution. \n \n “(iii)   Transitional rule for affiliated groups .— The amendment made by subparagraph (A) shall not apply with respect to plans of complete liquidation if the liquidating corporation is a member of an affiliated group of corporations under section 60(b) (2), (5), (6), or (8) of the Tax Reform Act of 1984 [ Pub. L. 98–369 , set out as a note under  section 1504 of this title ], for all taxable years which include the date of any distribution pursuant to such plan.”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 103 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f225(g) ,  78 Stat. 89 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX , §§\u202f1901(a)(44), 1906(b)(13)(A), 1951(b)(6)(A),  90 Stat. 1772 , 1834, 1838, related to election as to recognition of gain in certain liquidations.\nRepeal applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'If property is received in a distribution in complete liquidation, and if gain or loss is recognized on receipt of such property, then the basis of the property in the hands of the distributee shall be the fair market value of such property at the time of the distribution.\nFor purposes of this subsection, the term “corporate distributee” means only the corporation which meets the stock ownership requirements specified in section 332(b).\n2005—Subsec. (b)(1).  Pub. L. 109–135  substituted “except that, in the hands of such distributee—” for “except that the basis of such property in the hands of such distributee shall be the fair market value of the property at the time of the distribution—” in introductory provisions, added subpars. (A) and (B), and struck out former subpars. (A) and (B) which read as follows:\n“(A) in any case in which gain or loss is recognized by the liquidating corporation with respect to such property, or\n“(B) in any case in which the liquidating corporation is a foreign corporation, the corporate distributee is a domestic corporation, and the corporate distributee’s aggregate adjusted bases of property described in section 362(e)(1)(B) which is distributed in such liquidation would (but for this subparagraph) exceed the fair market value of such property immediately after such liquidation.”\n2004—Subsec. (b)(1).  Pub. L. 108–357  reenacted heading without change and amended text of par. (1) generally. Prior to amendment, text read as follows: “If property is received by a corporate distributee in a distribution in a complete liquidation to which section 332 applies (or in a transfer described in section 337(b)(1)), the basis of such property in the hands of such distributee shall be the same as it would be in the hands of the transferor; except that, in any case in which gain or loss is recognized by the liquidating corporation with respect to such property, the basis of such property in the hands of such distributee shall be the fair market value of the property at the time of the distribution.”\n1998—Subsec. (b)(1).  Pub. L. 105–277  substituted “section 332” for “section 332(a)”.\n1988—Subsec. (b).  Pub. L. 100–647  amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows:\n“(1)  Distribution in complete liquidation .—If property is received by a corporation in a distribution in a complete liquidation to which section 332(a) applies, the basis of the property in the hands of the distributee shall be the same as it would be in the hands of the transferor.\n“(2)  Transfers to which section 332 (c)  applies .—If property is received by a corporation in a transfer to which section 332(c) applies, the basis of the property in the hands of the transferee shall be the same as it would be in the hands of the transferor.\n“(3)  Distributee defined .—For purposes of this subsection, the term ‘distributee’ means only the corporation which meets the 80-percent stock ownership requirements specified in section 332(b).”\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f631(e)(4)(A) , struck out “(other than a distribution to which section 333 applies)” after “liquidation”.\nSubsec. (c).  Pub. L. 99–514, §\u202f631(e)(4)(B) , struck out subsec. (c) relating to property received in liquidation under section 333.\n1982—Subsec. (a).  Pub. L. 97–248, §\u202f222(e)(1)(C) , struck out “partial or” before “complete liquidation”.\nSubsec. (b).  Pub. L. 97–248, §\u202f224(b) , struck out heading to par. (1) “In general”, redesignated first sentence as par. (1) with heading “Distribution in complete liquidation”, in par. (1) as so redesignated substituted reference to section 332(a) for reference to section 332(b) relating to a distribution in complete liquidation, struck out reference to par. (2) as an exception to the determination of basis, redesignated second sentence as par. (2) with heading “Transfers to which section 332(c) applies”, in par. (2) as so redesignated struck out reference to par. (2) as an exception to the determination of basis, struck out par. (2) which had provided that if property was received by a corporation in a distribution in complete liquidation of another corporation and if the distribution was pursuant to a plan of liquidation adopted not more than 2 years after the date of the transaction described below, or in the case of a series of transactions, the date of the last such transaction, and stock of the distributing corporation possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote, and at least 80 percent of the total number of shares of all other classes of stock (except nonvoting stock which was limited and preferred as to dividends), was acquired by the distributee by purchase (as defined in par. (3)) during a 12-month period beginning with the earlier of the date of the first acquisition by purchase of such stock, or if any of such stock was acquired in an acquisition which is a purchase within the meaning of second sentence of par. (3), the date on which the distributee was first considered under section 318(a) as owning stock owned by the corporation from which such acquisition was made, then the basis of the property in the hands of the distributee would be the adjusted basis of the stock with respect to which the distribution was made, and under regulations prescribed by the Secretary, proper adjustment in the adjusted basis of any stock would be made for any distribution made to the distributee with respect to such stock before the adoption of the plan of liquidation, for any money received, for any liabilities assumed or subject to which the property was received, and for other items, and struck out par. (3) which provided that “purchase” meant any acquisition of stock, but only if the basis of the stock in the hands of the distributee was not determined in whole or in part by reference to the adjusted basis of such stock in the hands of the person from whom acquired, or under  section 1014(a) of this title  the stock was not acquired in an exchange to which  section 351 of this title  applies, and the stock was not acquired from a person the ownership of whose stock would, under  section 318(a) of this title , be attributed to the person acquiring such stock, but that “purchase” also meant an acquisition of stock from a corporation when ownership of such stock would be attributed under section 318(a) to the person acquiring such stock, if the stock of such corporation by reason of which such ownership would be attributed was acquired by purchase, and redesignated par. (4) as (3).\n1976—Subsec. (b)(2).  Pub. L. 94–455 , §§\u202f1901(a)(45), 1906(b)(13)(A), struck out in subpar. (A) provision relating to distributions made pursuant to a plan of liquidation adopted on or before  June 22, 1954 , and in provisions following subpar. (B)(ii) “or his delegate” after “Secretary”.\n1966—Subsec. (b)(2)(B).  Pub. L. 89–809, §\u202f202(b) , inserted provisions for the determination of the date on which to commence the running of the 12-month period during which the distributee must have acquired the stock by purchase by adding clauses (i) and (ii).\nSubsec. (b)(3).  Pub. L. 89–809, §\u202f202(a) , inserted provision that, for purposes of par. (2)(B), “purchase” also means an acquisition of stock from a corporation when ownership of such stock would be attributed under section 318(a) to the person acquiring such stock, if the stock of such corporation by reason of which such ownership would be attributed was acquired by purchase.\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f836(c)(2) ,  Oct. 22, 2004 ,  118 Stat. 1596 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to liquidations after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 105–277  applicable to distributions after  May 21, 1998 , see  section 3001(c) of Pub. L. 105–277 , set out as a note under  section 332 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 222(e)(1)(C) of Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .\nAmendment by  section 224(b) of Pub. L. 97–248  applicable to any target corporation with respect to which the acquisition date occurs after  Aug. 31, 1982 , with special rules for certain acquisitions before  Sept. 1, 1982 , and certain acquisitions of financial institutions in which there was a binding contract on  July 22, 1982 , to acquire control, see  section 224(d) of Pub. L. 97–248 , set out as an Effective Date note under  section 338 of this title .\nAmendment by  section 1901(a)(45) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 89–809, title II, §\u202f202(d) ,  Nov. 13, 1966 ,  80 Stat. 1576 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply only with respect to acquisitions of stock after  December 31, 1965 . The amendment made by subsections (b) and (c) [amending this section and  section 453 of this title ] shall apply only with respect to distributions made after the date of the enactment of this Act [ Nov. 13, 1966 ].”\nPub. L. 93–497, §\u202f3 ,  Oct. 29, 1974 ,  88 Stat. 1534 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  Notwithstanding the provisions of section 334 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to basis of property received in liquidations), no adjustment to the basis of any property distributed in complete liquidation of a corporation prior to  July 1, 1957 , shall be made for any liability if— “(1)  the distributor and distributee did not consider the liability relevant to the value of the stock with respect to which the distribution was made, \n \n “(2)  the distributor and distributee reasonably relied upon a decision of a United States district court specifically adjudicating the amount of the liability and its affirmance by the appropriate United States court of appeals, and \n \n “(3)  the amount of liability so adjudicated was not greater than would be compensated for by insurance. \n \n\n The provisions of this section apply without regard to whether such decision was subsequently reversed or modified by that United States court of appeals following distribution of such property in complete liquidation. \n \n “(b)  To the extent that the liability described in subsection (a) is not compensated for by insurance or otherwise, the amount thereof shall be allowed as a deduction under the appropriate provision of the Internal Revenue Code of 1986 for the taxable year in which payment thereof was made and shall be effective in determining income tax liabilities of all taxable years prior thereto.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'Except as otherwise provided in this section or section 337, gain or loss shall be recognized to a liquidating corporation on the distribution of property in complete liquidation as if such property were sold to the distributee at its fair market value.\nIf any property distributed in the liquidation is subject to a liability or the shareholder assumes a liability of the liquidating corporation in connection with the distribution, for purposes of subsection (a) and section 337, the fair market value of such property shall be treated as not less than the amount of such liability.\nFor provision providing that this subpart does not apply to distributions in pursuance of a plan of reorganization, see section 361(c)(4).\nFor purposes of subparagraph (A), the term “disqualified property” means any property which is acquired by the liquidating corporation in a transaction to which section 351 applied, or as a contribution to capital, during the 5-year period ending on the date of the distribution. Such term includes any property if the adjusted basis of such property is determined (in whole or in part) by reference to the adjusted basis of property described in the preceding sentence.\nFor purposes of clause (i), any property described in clause (i)(I) acquired by the liquidated corporation after the date 2 years before the date of the adoption of the plan of complete liquidation shall, except as provided in regulations, be treated as acquired as part of a plan described in clause (i)(II).\nThe Secretary may prescribe regulations under which, in lieu of disallowing a loss under subparagraph (A) for a prior taxable year, the gross income of the liquidating corporation for the taxable year in which the plan of complete liquidation is adopted shall be increased by the amount of the disallowed loss.\nIn the case of any liquidation to which section 332 applies, no loss shall be recognized to the liquidating corporation on any distribution in such liquidation. The preceding sentence shall apply to any distribution to the 80-percent distributee only if subsection (a) or (b)(1) of section 337 applies to such distribution.\nA prior section 336, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 106 ;  Apr. 2, 1980 ,  Pub. L. 96–223, title IV, §\u202f403(b)(1) ,  94 Stat. 304 ;  Oct. 19, 1980 ,  Pub. L. 96–471, §\u202f2(b)(1) , (c)(1),  94 Stat. 2253 , 2254;  Sept. 3, 1982 ,  Pub. L. 97–248, title II, §\u202f222(b) , (e)(1)(D), 224(c)(4),  96 Stat. 478 , 480, 489, related to distributions of property in liquidation, prior to repeal by  Pub. L. 99–514, §\u202f631(a) .\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1006(e)(21)(A) , substituted “liabilities” for “liabilities in excess of basis” in heading.\nSubsec. (c).  Pub. L. 100–647, §\u202f1018(d)(5)(D) , substituted “liquidations which are part of a reorganization” for “certain liquidations to which part III applies” in heading and amended text generally. Prior to amendment, text read as follows: “This section shall not apply with respect to any distribution of property to the extent there is nonrecognition of gain or loss with respect to such property to the recipient under part III.”\nSubsec. (d)(2)(B)(ii).  Pub. L. 100–647, §\u202f1006(e)(1) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “For purposes of clause (i), any property described in clause (i)(I) acquired by the liquidating corporation during the 2-year period ending on the date of the adoption of the plan of complete liquidation shall, except as provided in regulations, be treated as part of a plan described in clause (i)(II).”\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f1006(e)(2) , inserted at end “The preceding sentence shall apply to any distribution to the 80-percent distributee only if subsection (a) or (b)(1) of section 337 applies to such distribution.”\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(e)(3) , substituted “an election may be made” for “such corporation may elect” in concluding provisions.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f633 ,  Oct. 22, 1986 ,  100 Stat. 2277 , as amended by  Pub. L. 100–647, title I, §\u202f1006(g) ,  Nov. 10, 1988 ,  102 Stat. 3407 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this subtitle [subtitle D (§§\u202f631–634) of title VI of  Pub. L. 99–514 , enacting this section and  section 337 of this title , amending sections 26, 311, 312, 332, 334, 338, 341, 346, 367, 453, 453B, 467, 852, 897, 1056, 1248, 1255, 1276, 1363, 1366, 1374, and 1375 of this title, and repealing former sections 333, 336, and 337 of this title] shall apply to— “(1)  any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  January 1, 1987 , \n \n “(2)  any transaction described in section 338 of the Internal Revenue Code of 1986 for which the acquisition date occurs after  December 31, 1986 , and \n \n “(3)  any distribution (not in complete liquidation) made after  December 31, 1986 . \n \n \n “(b)   Built-In Gains of S Corporations.— “(1)   In general .— The amendments made by section 632 (other than subsection (b) thereof) [amending sections 26, 1366, 1374, and 1375 of this title] shall apply to taxable years beginning after  December 31, 1986 , but only in cases where the return for the taxable year is filed pursuant to an S election made after  December 31, 1986 . \n \n “(2)   Application of prior law .— In the case of any taxable year of an S corporation which begins after  December 31, 1986 , and to which the amendments made by section 632 (other than subsection (b) thereof) do not apply, paragraph (1) of section 1374(b) of the Internal Revenue Code of 1954 (as in effect on the date before the date of the enactment of this Act [ Oct. 22, 1986 ]) shall be applied as if it read as follows: “\u202f‘(1) an amount equal to 34 percent of the amount by which the net capital gain of the corporation for the taxable year exceeds $25,000, or’[.] \n \n \n \n “(c)   Exception for Certain Plans of Liquidation and Binding Contracts.— “(1)   In general .— The amendments made by this subtitle shall not apply to— “(A)  any distribution or sale or exchange made pursuant to a plan of liquidation adopted before  August 1, 1986 , if the liquidating corporation is completely liquidated before  January 1, 1988 , \n \n “(B)  any distribution or sale or exchange made by any corporation if more than 50 percent of the voting stock (by value) of such corporation is acquired on or after  August 1, 1986 , pursuant to a written binding contract in effect before such date and if such corporation is completely liquidated before  January 1, 1988 , \n \n “(C)  any distribution or sale or exchange made by any corporation if substantially all of the assets of such corporation are sold on or after  August 1, 1986 , pursuant to 1 or more written binding contracts in effect before such date and if such corporation is completely liquidated before  January 1, 1988 , or \n \n “(D)  any transaction described in section 338 of the Internal Revenue Code of 1986 with respect to any target corporation if a qualified stock purchase of such target corporation is made on or after  August 1, 1986 , pursuant to a written binding contract in effect before such date and the acquisition date (within the meaning of such section 338) is before  January 1, 1988 . \n \n \n “(2)   Special rule for certain actions taken before  november 20, 1985 .— For purposes of paragraph (1), transactions shall be treated as pursuant to a plan of liquidation adopted before  August 1, 1986 , if— “(A)  before  November 20, 1985 — “(i)  the board of directors of the liquidating corporation adopted a resolution to solicit shareholder approval for a transaction of a kind described in section 336 or 337, or \n \n “(ii)  the shareholders or board of directors have approved such a transaction, \n \n \n “(B)  before  November 20, 1985 — “(i)  there has been an offer to purchase a majority of the voting stock of the liquidating corporation, or \n \n “(ii)  the board of directors of the liquidating corporation has adopted a resolution approving an acquisition or recommending the approval of an acquisition to the shareholders, or \n \n \n “(C)  before  November 20, 1985 , a ruling request was submitted to the Secretary of the Treasury or his delegate with respect to a transaction of a kind described in section 336 or 337 of the Internal Revenue Code of 1954 (as in effect before the amendments made by this subtitle). \n \n\n For purposes of the preceding sentence, any action taken by the board of directors or shareholders of a corporation with respect to any subsidiary of such corporation shall be treated as taken by the board of directors or shareholders of such subsidiary. \n \n \n “(d)   Transitional Rule for Certain Small Corporations.— “(1)   In general .— In the case of the complete liquidation before  January 1, 1989 , of a qualified corporation, the amendments made by this subtitle shall not apply to the applicable percentage of each gain or loss which (but for this paragraph) would be recognized by the liquidating corporation by reason of the amendments made by this subtitle. Section 333 of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) shall continue to apply to any complete liquidation described in the preceding sentence. \n \n “(2)   Paragraph (1) not to apply to certain items .— Paragraph (1) shall not apply to— “(A)  any gain or loss which is an ordinary gain or loss (determined without regard to section 1239 of the Internal Revenue Code of 1986), \n \n “(B)  any gain or loss on a capital asset held for not more than 6 months, and \n \n “(C)  any gain on an asset acquired by the qualified corporation if— “(i)  the basis of such asset in the hands of the qualified corporation is determined (in whole or in part) by reference to the basis of such asset in the hands of the person from whom acquired, and \n \n “(ii)  a principal purpose for the transfer of such asset to the qualified corporation was to secure the benefits of this subsection. \n \n \n \n “(3)   Applicable percentage .— For purposes of this subsection, the term ‘applicable percentage’ means— “(A)  100 percent if the applicable value of the qualified corporation is less than $5,000,000, or \n \n “(B)  100 percent reduced by an amount which bears the same ratio to 100 percent as— “(i)  the excess of the applicable value of the corporation over $5,000,000, bears to \n \n “(ii)  $5,000,000. \n \n \n \n “(4)   Applicable value .— For purposes of this subsection, the applicable value is the fair market value of all of the stock of the corporation on the date of the adoption of the plan of complete liquidation (or if greater, on  August 1, 1986 ). \n \n “(5)   Qualified corporation .— For purposes of this subsection, the term ‘qualified corporation’ means any corporation if— “(A)  on  August 1, 1986 , and at all times thereafter before the corporation is completely liquidated, more than 50 percent (by value) of the stock in such corporation is held by a qualified group, and \n \n “(B)  the applicable value of such corporation does not exceed $10,000,000. \n \n \n “(6)   Definitions and special rules .— For purposes of this subsection— “(A)   Qualified group.— “(i)   In general .— Except as provided in clause (ii), the term ‘qualified group’ means any group of 10 or fewer qualified persons who at all times during the 5-year period ending on the date of the adoption of the plan of complete liquidation (or, if shorter, the period during which the corporation or any predecessor was in existence) owned (or was treated as owning under the rules of subparagraph (C)) more than 50 percent (by value) of the stock in such corporation. \n \n “(ii)  5 -year ownership requirement not to apply in certain cases .— In the case of— \u2001\u2001\u2001\u2001\u2001“(I)  any complete liquidation pursuant to a plan of liquidation adopted before  March 31, 1988 , \n \n \u2001\u2001\u2001\u2001\u2001“(II)  any distribution not in liquidation made before  March 31, 1988 , \n \n \u2001\u2001\u2001\u2001\u2001“(III)  an election to be an S corporation filed before  March 31, 1988 , or \n \n \u2001\u2001\u2001\u2001\u2001“(IV)  a transaction described in section 338 of the Internal Revenue Code of 1986 where the acquisition date (within the meaning of such section 338) is before  March 31, 1988 , \n \n \n\n \u2001the term ‘qualified group’ means any group of 10 or fewer qualified persons. \n \n “(B)   Qualified person .— The term ‘qualified person’ means— “(i)  an individual, \n \n “(ii)  an estate, or \n \n “(iii)  any trust described in clause (ii) or clause (iii) of section 1361(c)(2)(A) of the Internal Revenue Code of 1986. \n \n \n “(C)   Attribution rules.— “(i)   In general .— Any stock owned by a corporation, trust (other than a trust referred to in subparagraph (B)(iii)[)], or partnership shall be treated as owned proportionately by its shareholders, beneficiaries, or partners, and shall not be treated as owned by such corporation, trust, or partnership. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person. \n \n “(ii)   Family members .— Stock owned (or treated as owned) by members of the same family (within the meaning of section 318(a)(1) of the Internal Revenue Code of 1986) shall be treated as owned by 1 person, and shall be treated as owned by such 1 person for any period during which it was owned (or treated as owned) by any such member. \n \n “(iii)   Treatment of certain trusts .— Stock owned (or treated as owned) by the estate of any decedent or by any trust referred to in subparagraph (B)(iii) with respect to such decedent shall be treated as owned by 1 person and shall be treated as owned by such 1 person for the period during which it was owned (or treated as owned) by such estate or any such trust or by the decedent. \n \n \n “(D)   Special holding period rules .— Any property acquired by reason of the death of an individual shall be treated as owned at all times during which such property was owned (or treated as owned) by the decedent. \n \n “(E)   Controlled group of corporations .— All members of the same controlled group (as defined in section 267(f)(1) of such Code) shall be treated as 1 corporation for purposes of determining whether any of such corporations met the requirement of paragraph (5)(B) and for purposes of determining the applicable percentage with respect to any of such corporations. For purposes of the preceding sentence, an S corporation shall not be treated as a member of a controlled group unless such corporation was a C corporation for its taxable year which includes  August 1, 1986 , or it was not described for such taxable year in paragraph (1) or (2) of section 1374(c) of such Code (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]). \n \n \n “(7)   Section 338 transactions .— The provisions of this subsection shall also apply in the case of a transaction described in section 338 of the Internal Revenue Code of 1986 where the acquisition date (within the meaning of such section 338) is before  January 1, 1989 . \n \n “(8)   Application of section 1374 .— Rules similar to the rules of this subsection shall apply for purposes of applying section 1374 of the Internal Revenue Code of 1986 (as amended by section 632) in the case of a qualified corporation which makes an election to be an S corporation under section 1362 of such Code before  January 1, 1989 , without regard to whether such corporation is completely liquidated. \n \n “(9)   Application to nonliquidating distributions .— The provisions of this subsection shall also apply in the case of any distribution (not in complete liquidation) made by a qualified corporation before  January 1, 1989 , without regard to whether such corporation is completely liquidated. \n \n \n “(e)   Complete Liquidation Defined .— For purposes of this section, a corporation shall be treated as completely liquidated if all of the assets of such corporation are distributed in complete liquidation, less assets retained to meet claims. \n \n “(f)   Other Transitional Rules.— “(1)  The amendments made by this subtitle shall not apply to any liquidation of a corporation incorporated under the laws of Pennsylvania on  August 3, 1970 , if— “(A)  the board of directors of such corporation approved a plan of liquidation before  January 1, 1986 , \n \n “(B)  an agreement for the sale of a material portion of the assets of such corporation was signed on  May 9, 1986  (whether or not the assets are sold in accordance with such agreement), and \n \n “(C)  the corporation is completely liquidated on or before  December 31, 1988 . \n \n \n “(2)  The amendments made by this subtitle shall not apply to any liquidation (or deemed liquidation under section 338 of the Internal Revenue Code of 1986) of a diversified financial services corporation incorporated under the laws of Delaware on  May 9, 1929  (or any direct or indirect subsidiary of such corporation), pursuant to a binding written contract entered into on or before  December 31, 1986 ; but only if the liquidation is completed (or in the case of a section 338 election, the acquisition date occurs) before  January 1, 1988 . \n \n “(3)  The amendments made by this subtitle shall not apply to any distribution, or sale, or exchange— “(A)  of the assets owned (directly or indirectly) by a testamentary trust established under the will of a decedent dying on  June 15, 1956 , or its beneficiaries, \n \n “(B)  made pursuant to a court order in an action filed on  January 18, 1984 , if such order— “(i)  is issued after  July 31, 1986 , and \n \n “(ii)  directs the disposition of the assets of such trust and the division of the trust corpus into 3 separate sub-trusts. \n \n\n \u2001\u2001For purposes of the preceding sentence, an election under section 338(g) of the Internal Revenue Code of 1986 (or an election under section 338(h)(10) of such Code qualifying as a section 337 liquidation pursuant to regulations prescribed by the Secretary under section 1.338(h)(10)–1T(j)) made in connection with a sale or exchange pursuant to a court order described in subparagraph (B) shall be treated as a sale of [or] exchange. \n \n \n “(4) (A)  The amendments made by this subtitle shall not apply to any distribution, or sale, or exchange— “(i)  if— “(I)  an option agreement to sell substantially all of the assets of a selling corporation organized under the laws of Massachusetts on  October 20, 1976 , is executed before  August 1, 1986 , the corporation adopts (by approval of its shareholders) a conditional plan of liquidation before  August 1, 1986  to become effective upon the exercise of such option agreement (or modification thereto), and the assets are sold pursuant to the exercise of the option (as originally executed or subsequently modified provided that the purchase price is not thereby increased), or \n \n “(II)  in the event that the optionee does not acquire substantially all the assets of the corporation, the optionor corporation sells substantially all its assets to another purchaser at a purchase price not greater than that contemplated by such option agreement pursuant to an effective plan of liquidation, and \n \n \n “(ii)  the complete liquidation of the corporation occurs within 12 months of the time the plan of liquidation becomes effective, but in no event later than  December 31, 1989 . \n \n \n “(B)  For purposes of subparagraph (A), a distribution, or sale, or exchange, of a distributee corporation (within the meaning of section 337(c)(3) of the Internal Revenue Code of 1986) shall be treated as satisfying the requirements of subparagraph (A) if its subsidiary satisfies the requirements of subparagraph (A). \n \n “(C)  For purposes of section 56 of the Internal Revenue Code of 1986 (as amended by this Act), any gain or loss not recognized by reason of this paragraph shall not be taken into account in determining the adjusted net book income of the corporation. \n \n \n “(5)  In the case of a corporation incorporated under the laws of Wisconsin on  April 3, 1948 — “(A)  a voting trust established not later than  December 31, 1987 , shall qualify as a trust permitted as a shareholder of an S corporation and shall be treated as only 1 shareholder if the holders of beneficial interests in such voting trust are— “(i)  employees or retirees of such corporation, or \n \n “(ii)  in the case of stock or voting trust certificates acquired from an employee or retiree of such corporation, the spouse, child, or estate of such employee or retiree or a trust created by such employee or retiree which is described in section 1361(c)(2) of the Internal Revenue Code of 1986 (or treated as described in such section by reason of section 1361(d) of such Code), and \n \n \n “(B)  the amendment made by section 632 (other than subsection (b) thereof) shall not apply to such corporation if it elects to be an S corporation before  January 1, 1989 . \n \n \n “(6)  The amendments made by this subtitle shall not apply to the liquidation of a corporation incorporated on  January 26, 1982 , under the laws of the State of Alabama with a principal place of business in Colbert County, Alabama, but only if such corporation is completely liquidated on or before  December 31, 1987 . \n \n “(7)  The amendments made by this subtitle shall not apply to the acquisition by a Delaware bank holding company of all of the assets of an Iowa bank holding company pursuant to a written contract dated  December 9, 1981 . \n \n “(8)  The amendments made by this subtitle shall not apply to the liquidation of a corporation incorporated under the laws of Delaware on  January 20, 1984 , if more than 40 percent of the stock of such corporation was acquired by purchase on  June 11, 1986 , and there was a tender offer with respect to all additional outstanding shares of such corporation on  July 29, 1986 , but only if the corporation is completely liquidated on or before  December 31, 1987 . \n \n \n “(g)   Treatment of Certain Distributions in Response To Hostile Tender Offer.— “(1)   In general .— No gain or loss shall be recognized under the Internal Revenue Code of 1986 to a corporation (hereinafter in this subsection referred to as ‘parent’) on a qualified distribution. \n \n “(2)   Qualified Distribution Defined .— For purposes of paragraph (1)— “(A)   In general .— The term ‘qualified distribution’ means a distribution— “(i)  by parent of all of the stock of a qualified subsidiary in exchange for stock of parent which was acquired for purposes of such exchange pursuant to a tender offer dated  February 16, 1982 , and \n \n “(ii)  pursuant to a contract dated  February 13, 1982 , and \n \n “(iii)  which was made not more than 60 days after the board of directors of parent recommended rejection of an unsolicited tender offer to obtain control of parent. \n \n \n “(B)   Qualified subsidiary .— The term ‘qualified subsidiary’ means a corporation created or organized under the laws of Delaware on  September 7, 1976 , all of the stock of which was owned by parent immediately before the qualified distribution.”\n“\u202f‘(1) an amount equal to 34 percent of the amount by which the net capital gain of the corporation for the taxable year exceeds $25,000, or’[.]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'No gain or loss shall be recognized to the liquidating corporation on the distribution to the 80-percent distributee of any property in a complete liquidation to which section 332 applies.\nExcept as provided in subparagraph (B), paragraph (1) and subsection (a) shall not apply where the 80-percent distributee is an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter.\nSubparagraph (A) shall not apply to any distribution of property to an organization described in section 511(a)(2) if, immediately after such distribution, such organization uses such property in an activity the income from which is subject to tax under section 511(a).\nIf any property to which clause (i) applied is disposed of by the organization acquiring such property, notwithstanding any other provision of law, any gain (not in excess of the amount not recognized by reason of clause (i)) shall be included in such organization’s unrelated business taxable income. For purposes of the preceding sentence, if such property ceases to be used in an activity referred to in clause (i), such organization shall be treated as having disposed of such property on the date of such cessation.\nFor purposes of this section, the term “80-percent distributee” means only the corporation which meets the 80-percent stock ownership requirements specified in section 332(b). For purposes of this section, the determination of whether any corporation is an 80-percent distributee shall be made without regard to any consolidated return regulation.\nThe Tax Reform Act of 1986, referred to in subsec. (d), is  Pub. L. 99–514 ,  Oct. 22, 1986 ,  100 Stat. 2085 . Subtitle D (§§\u202f631–634) of title VI of the Tax Reform Act of 1986 enacted sections 336 and 337 of this title, amended sections 26, 311, 312, 332, 334, 338, 341, 346, 367, 453, 453B, 467, 852, 897, 1056, 1248, 1255, 1276, 1363, 1366, 1374, and 1375 of this title, and repealed former sections 333, 336, and 337 of this title. For complete classification of this Act to the Code, see Tables.\nA prior section 337, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 106 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f19 ,  72 Stat. 1615 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX , §§\u202f1901(a)(46), 1906(b)(13)(A), title XXI, §\u202f2118(a),  90 Stat. 1772 , 1834, 1912;  Nov. 6, 1978 ,  Pub. L. 95–600, title VII, §\u202f701(i)(1) ,  92 Stat. 2904 ;  Nov. 10, 1978 ,  Pub. L. 95–628, §\u202f4(a) ,  92 Stat. 3628 ;  Apr. 2, 1980 ,  Pub. L. 96–223, title IV, §\u202f403(b)(2)(A) ,  94 Stat. 304 ;  Oct. 19, 1980 ,  Pub. L. 96–471, §\u202f2(c)(2) ,  94 Stat. 2254 ;  Dec. 24, 1980 ,  Pub. L. 96–589, §\u202f5(c) ,  94 Stat. 3405 ;  Sept. 3, 1982 ,  Pub. L. 97–248, title II, §\u202f224(c)(5) , (6),  96 Stat. 489 ;  Oct. 22, 1986 ,  Pub. L. 99–514, title XVIII, §\u202f1804(e)(7)(A) ,  100 Stat. 2803 , related to gain or loss on sales or exchanges in connection with certain liquidations, prior to repeal by  Pub. L. 99–514, §\u202f631(a) .\n1988—Subsec. (b)(2)(B)(i).  Pub. L. 100–647, §\u202f1006(e)(4)(A) , (B), substituted “described in section 511(a)(2)” for “described in section 511(a)(2) or 511(b)(2)” and “in an activity the income from which is subject to tax under section 511(a)” for “in an unrelated trade or business (as defined in section 513)”.\nSubsec. (b)(2)(B)(ii).  Pub. L. 100–647, §\u202f1006(e)(4)(C) , substituted “an activity referred to in clause (i)” for “an unrelated trade or business of such organization”.\nSubsec. (d).  Pub. L. 100–647, §\u202f1006(e)(5)(A) , in introductory provisions, substituted “amendments made by subtitle D of title VI of the Tax Reform Act of 1986” for “amendments made to this subpart by the Tax Reform Act of 1986”, and in par. (1), substituted “this subchapter) or through the use of a regulated investment company, real estate investment trust, or tax-exempt entity” for “this subchapter)”.\n1987—Subsec. (c).  Pub. L. 100–203  inserted at end “For purposes of this section, the determination of whether any corporation is an 80-percent distributee shall be made without regard to any consolidated return regulation.”\nPub. L. 100–647, title I, §\u202f1006(e)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3401 , provided that:  \n “The amendment made by subparagraph (A)(ii) [amending this section] shall not apply to any reorganization if before  June 10, 1987 — \n “(i)  the board of directors of a party to the reorganization adopted a resolution to solicit shareholder approval for the transaction, or \n \n “(ii)  the shareholders or the board of directors of a party to the reorganization approved the transaction.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to distributions or transfers after  Dec. 15, 1987 , with exceptions for certain distributee corporations and distributions covered by prior transition rule, see  section 10223(d) of Pub. L. 100–203 , set out as a note under  section 304 of this title .\nSection applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as a note under  section 336 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'The amount described in paragraph (1) shall be adjusted under regulations prescribed by the Secretary for liabilities of the target corporation and other relevant items.\nUnder regulations prescribed by the Secretary, the basis of the purchasing corporation’s nonrecently purchased stock shall be the basis amount determined under subparagraph (B) of this paragraph if the purchasing corporation makes an election to recognize gain as if such stock were sold on the acquisition date for an amount equal to the basis amount determined under subparagraph (B).\nThe amount determined under paragraphs (1) and (2) shall be allocated among the assets of the target corporation under regulations prescribed by the Secretary.\nThe term “recently purchased stock” means any stock in the target corporation which is held by the purchasing corporation on the acquisition date and which was purchased by such corporation during the 12-month acquisition period.\nThe term “nonrecently purchased stock” means any stock in the target corporation which is held by the purchasing corporation on the acquisition date and which is not recently purchased stock.\nThe term “purchasing corporation” means any corporation which makes a qualified stock purchase of stock of another corporation.\nThe term “target corporation” means any corporation the stock of which is acquired by another corporation in a qualified stock purchase.\nThe term “qualified stock purchase” means any transaction or series of transactions in which stock (meeting the requirements of section 1504(a)(2)) of 1 corporation is acquired by another corporation by purchase during the 12-month acquisition period.\nA purchasing corporation shall be treated as having made an election under this section with respect to any target corporation if, at any time during the consistency period, it acquires any asset of the target corporation (or a target affiliate).\nWhenever necessary to carry out the purpose of this subsection and subsection (f), the Secretary may treat stock acquisitions which are pursuant to a plan and which meet the requirements of section 1504(a)(2) as qualified stock purchases.\nExcept as otherwise provided in regulations, an election under this section shall be made not later than the 15th day of the 9th month beginning after the month in which the acquisition date occurs.\nAn election by the purchasing corporation under this section shall be made in such manner as the Secretary shall by regulations prescribe.\nAn election by a purchasing corporation under this section, once made, shall be irrevocable.\nThe term “12-month acquisition period” means the 12-month period beginning with the date of the first acquisition by purchase of stock included in a qualified stock purchase (or, if any of such stock was acquired in an acquisition which is a purchase by reason of subparagraph (C) of paragraph (3), the date on which the acquiring corporation is first considered under section 318(a) (other than paragraph (4) thereof) as owning stock owned by the corporation from which such acquisition was made).\nThe term “acquisition date” means, with respect to any corporation, the first day on which there is a qualified stock purchase with respect to the stock of such corporation.\nThe term “purchase” includes any deemed purchase under subsection (a)(2). The acquisition date for a corporation which is deemed purchased under subsection (a)(2) shall be determined under regulations prescribed by the Secretary.\nClause (iii) of subparagraph (A) shall not apply to an acquisition of stock from a related corporation if at least 50 percent in value of the stock of such related corporation was acquired by purchase (within the meaning of subparagraphs (A) and (B)).\nFor purposes of this subparagraph, a corporation is a related corporation if stock owned by such corporation is treated (under section 318(a) other than paragraph (4) thereof) as owned by the corporation acquiring the stock.\nThe period referred to in subparagraph (A) shall also include any period during which the Secretary determines that there was in effect a plan to make a qualified stock purchase plus 1 or more other qualified stock purchases (or asset acquisitions described in subsection (e)) with respect to the target corporation or any target affiliate.\nThe term “affiliated group” has the meaning given to such term by section 1504(a) (determined without regard to the exceptions contained in section 1504(b)).\nA corporation shall be treated as a target affiliate of the target corporation if each of such corporations was, at any time during so much of the consistency period as ends on the acquisition date of the target corporation, a member of an affiliated group which had the same common parent.\nExcept as provided in regulations prescribed by the Secretary, stock and asset acquisitions made by members of the same affiliated group shall be treated as made by 1 corporation.\nExcept as otherwise provided in paragraph (10) or in regulations prescribed under this paragraph, the target corporation shall not be treated as a member of an affiliated group with respect to the sale described in subsection (a)(1).\nFor purposes of subsection (a)(1), fair market value may be determined on the basis of a formula provided in regulations prescribed by the Secretary which takes into account liabilities and other relevant items.\nFor purposes of section 6655, tax attributable to the sale described in subsection (a)(1) shall not be taken into account. The preceding sentence shall not apply with respect to a qualified stock purchase for which an election is made under paragraph (10).\nUnder regulations prescribed by the Secretary, a combined deemed sale return may be filed by all target corporations acquired by a purchasing corporation on the same acquisition date if such target corporations were members of the same selling consolidated group (as defined in subparagraph (B) of paragraph (10)).\nExcept as provided in regulations, this section shall not apply for purposes of determining the source or character of any item for purposes of subpart A of part III of subchapter N of this chapter (relating to foreign tax credit). The preceding sentence shall not apply to any gain to the extent such gain is includible in gross income as a dividend under section 1248 (determined without regard to any deemed sale under this section by a foreign corporation).\nA prior section 338,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 107 , made reference to a special rule relating to the effect on earnings and profits of certain distributions in partial liquidation in section 312(e), prior to repeal by  Pub. L. 97–248, §\u202f222(e)(4) .\n2018—Subsec. (h)(3)(A)(iii).  Pub. L. 115–141, §\u202f401(a)(64) , substituted “paragraph” for “paragaraph”.\nSubsec. (h)(6)(B)(i).  Pub. L. 115–141, §\u202f401(d)(1)(D)(vii) , substituted “or a DISC” for “,\u2000a DISC, or a corporation to which an election under section 936 applies”.\n2004—Subsec. (h)(13).  Pub. L. 108–357  inserted at end “The preceding sentence shall not apply with respect to a qualified stock purchase for which an election is made under paragraph (10).”\n2003—Subsec. (h)(14).  Pub. L. 108–27  struck out heading and text of par. (14). Text read as follows: “For purposes of determining whether section 341 applies to a disposition within 1 year after the acquisition date of stock by a shareholder (other than the acquiring corporation) who held stock in the target corporation on the acquisition date, section 341 shall be applied without regard to this section.”\n1990—Subsec. (h)(10)(C).  Pub. L. 101–508  added subpar. (C).\n1988—Subsec. (e)(3).  Pub. L. 100–647, §\u202f1018(d)(9) , substituted “which meet the requirements of section 1504(a)(2)” for “which meet the 80 percent requirements of subparagraphs (A) and (B) of subsection (d)(3)”.\nSubsec. (h)(7).  Pub. L. 100–647, §\u202f1006(e)(20) , struck out par. (7) which read as follows: “ Additional percentage must be attributable to purchase, etc .—For purposes of subsection (c)(1), any increase in the maximum percentage of stock taken into account over the percentage of stock (by value) of the target corporation held by the purchasing corporation on the acquisition date shall be taken into account only to the extent such increase is attributable to—\n“(A) purchase, or\n“(B) a redemption of stock of the target corporation—\n“(i) to which section 302(a) applies, or\n“(ii) in the case of a shareholder who is not a corporation, to which section 301 applies.”\nSubsec. (h)(16).  Pub. L. 100–647, §\u202f1012(bb)(5)(A) , added par. (16).\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f631(b)(1) , struck out “to which section 337 applies” after “in a single transaction”.\nSubsec. (c).  Pub. L. 99–514, §\u202f631(b)(2) , struck out subsec. (c) relating to special rules for coordination with section 337 where purchasing corporation holds less than 100 percent of stock, and in case of certain redemptions where an election is made under this section.\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1804(e)(8)(A) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The term ‘qualified stock purchase’ means any transaction or series of transactions in which stock of 1 corporation possessing—\n“(A) at least 80 percent of total combined voting power of all classes of stock entitled to vote, and\n“(B) at least 80 percent of the total number of shares of all other classes of stock (except nonvoting stock which is limited and preferred as to dividends),\nis acquired by another corporation by purchase during the 12-month acquisition period.”\nSubsec. (h)(3)(C)(i).  Pub. L. 99–514, §\u202f1899A(7) , substituted “subparagraphs” for “subparagraph”.\nSubsec. (h)(6)(B)(i).  Pub. L. 99–514, §\u202f1275(c)(6) , struck out “a corporation described in section 934(b),” after “DISC,”.\nSubsec. (h)(10)(B).  Pub. L. 99–514, §\u202f631(b)(3) , inserted provision that to the extent provided in regulations, term “selling consolidated group” also includes any affiliated group of corporations which includes the target corporation (whether or not such group files a consolidated return).\nSubsec. (h)(12).  Pub. L. 99–514, §\u202f631(e)(5) , struck out par. (12) relating to applicability of section 337 where target had adopted plan for complete liquidation.\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f712(k)(1)(A) , inserted “at fair market value” after “acquisition date”.\nSubsec. (b).  Pub. L. 98–369, §\u202f712(k)(1)(B) , substituted “Basis of assets after deemed purchase” for “Price at which deemed sale made” in heading.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f712(k)(1)(B) , amended par. (1) generally, substituting “as purchased for an amount equal to the sum of” for “as sold (and purchased) at an amount equal to” in introductory text, “purchasing corporation’s recently purchased stock, and” for “purchasing corporation’s stock in the target corporation on the acquisition date” in subpar. (A), and “the basis of the purchasing corporation’s nonrecently purchased stock” in subpar. (B) in lieu of provision relating to adjustment for liabilities and other relevant items, now covered in par. (2).\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f712(k)(1)(B) , amended par. (2) generally, incorporating former par. (1)(B) provision, inserting heading “Adjustment for liabilities and other relevant items” and substituting “adjusted under regulations” for “properly adjusted under regulations”. Former par. (2) redesignated (4).\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f712(k)(1)(B) , added par. (3). Former par. (3) redesignated (5).\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f712(k)(1)(B) , redesignated former par. (2) as (4), substituted in introductory text “corporation’s recently purchased stock,” for “purchasing corporation’s stock in the target corporation on the acquisition date”, inserted in subpar. (A) “minus the percentage of stock (by value) in the target corporation attributable to the purchasing corporation’s nonrecently purchased stock”, and substituted in subpar. (B) “in the target corporation attributable to the purchasing corporation’s recently purchased stock” for “of the target corporation held by the purchasing corporation on the acquisition date”.\nSubsec. (b)(5).  Pub. L. 98–369, §\u202f712(k)(1)(B) , redesignated former par. (3) as (5) and inserted reference to par. (2).\nSubsec. (b)(6).  Pub. L. 98–369, §\u202f712(k)(1)(B) , added par. (6).\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f712(k)(2) , inserted in last sentence “and section 333 does not apply to such liquidation”.\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f712(k)(3) , substituted “wholly” for “(in whole or in part)” in subpar. (B), struck out subpar. (D) providing for nonapplication of par. (1) to any acquisition by the purchasing corporation if, to the extent provided in regulations, the property acquired is located outside the United States, redesignated subpar. (E) as (D), and, in subpar. (D) as redesignated, inserted “and meets such conditions as such regulations may provide”.\nSubsec. (g)(1).  Pub. L. 98–369, §\u202f712(k)(4) , substituted “the 15th day of the 9th month beginning after the month in which the acquisition date occurs” for “75 days after the acquisition date”.\nSubsec. (h)(1).  Pub. L. 98–369, §\u202f712(k)(5)(C) , included within 12-month acquisition period the period beginning with the date on which the acquiring corporation is first considered as owning stock owned by corporation from which acquisition was made.\nSubsec. (h)(3)(A)(ii).  Pub. L. 98–369, §\u202f712(k)(5)(D) , included references to sections 354, 355, and 356 and in defining “purchase” provided that the stock not be acquired in any other transaction described in regulations in which the transferor does not recognize the entire amount of the gain or loss realized on the transaction.\nSubsec. (h)(3)(B).  Pub. L. 98–369, §\u202f712(k)(5)(A) , substituted in heading “under subsection (a)” for “of stock of subsidiaries” and in text “The term ‘purchase’ includes any deemed purchase under subsection (a)(2). The acquisition date for a corporation which is deemed purchased under subsection (a)(2) shall be determined under regulations prescribed by the Secretary” for “If stock in a corporation is acquired by purchase (within the meaning of subparagraph (A)) and, as a result of such acquisition, the corporation making such purchase is treated (by reason of section 318(a)) as owning stock in a 3rd corporation, the corporation making such purchase shall be treated as having purchased such stock in such 3rd corporation. The corporation making such purchase shall be treated as purchasing stock in the 3rd corporation by reason of the preceding sentence on the first day on which the purchasing corporation is considered under section 318(a) as owning such stock”.\nSubsec. (h)(3)(C).  Pub. L. 98–369, §\u202f712(k)(5)(B) , added subpar. (C).\nSubsec. (h)(7).  Pub. L. 98–369, §\u202f712(k)(6)(A) , added par. (7) and struck out former par. (7) which had provided that acquisitions by purchasing corporation include acquisitions by corporations affiliated with purchasing corporation. See subsec. (h)(8).\nSubsec. (h)(8).  Pub. L. 98–369, §\u202f712(k)(6)(A) , added par. (8) incorporating former par. (7) provision stating that “Except as otherwise provided in regulations, an acquisition of stock or assets by any member of an affiliated group which includes a purchasing corporation shall be treated as made by the purchasing corporation.” Former par. (8) redesignated (9).\nSubsec. (h)(9).  Pub. L. 98–369, §\u202f712(k)(6)(A) , (B), redesignated former par. (8) as (9) and substituted therein “paragraph (10)” for “paragraph (9)”. Former par. (9) redesignated (10).\nSubsec. (h)(10).  Pub. L. 98–369, §\u202f712(k)(6)(A) , redesignated former par. (9) as (10).\nSubsec. (h)(11) to (15).  Pub. L. 98–369, §\u202f712(k)(6)(C) , added pars. (11) to (15).\nSubsec. (i).  Pub. L. 98–369, §\u202f712(k)(7) , provided in introductory text that the regulations be appropriate to carry out the purposes of this section; designated existing provisions as par. (1) and substituted therein “treatment of stock and asset sales and purchases” for “treatment of stock and asset purchases with respect to a target corporation and its target affiliates (whether by treating all of them as stock purchases or as asset purchases)” before “may not be circumvented”, and added par. (2).\n1983—Subsec. (h)(8), (9).  Pub. L. 97–448  added pars. (8) and (9).\nPub. L. 108–357, title VIII, §\u202f839(b) ,  Oct. 22, 2004 ,  118 Stat. 1597 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transactions occurring after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nPub. L. 101–508, title XI, §\u202f11323(d) ,  Nov. 5, 1990 ,  104 Stat. 1388–465 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1060 and 6724 of this title] shall apply to acquisitions after  October 9, 1990 . \n \n “(2)   Binding contract exception .— The amendments made by this section shall not apply to any acquisition pursuant to a written binding contract in effect on  October 9, 1990 , and at all times thereafter before such acquisition.”\nPub. L. 100–647, title I, §\u202f1012(bb)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3535 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to qualified stock purchases (as defined in section 338(d)(3) of the 1986 Code) after  March 31, 1988 , except that, in the case of an election under section 338(h)(10) of the 1986 Code, such amendment shall apply to qualified stock purchases (as so defined) after  June 10, 1987 .”\nAmendment by sections 1006(e)(20) and 1018(d)(9) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 631(b), (e)(5) of  Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 1275(c)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(e)(8)(B) ,  Oct. 22, 1986 ,  100 Stat. 2804 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply in cases where the 12-month acquisition period (as defined in section 338(h)(1) of the Internal Revenue Code of 1954 [now 1986] begins after  December 31, 1985 .”\nPub. L. 98–369, div. A, title VII, §\u202f712(k)(9) ,  July 18, 1984 ,  98 Stat. 952 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— The amendments made by this subsection [amending this section and sections 269 and 318 of this title] shall not apply to any qualified stock purchase (as defined in section 338(d)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) where the acquisition date (as defined in section 338(h)(2) of such Code) is before  September 1, 1982 . \n \n “(B)   Extension of time for making election .— In the case of any qualified stock purchase described in subparagraph (A), the time for making an election under section 338 of such Code shall not expire before the close of the 60th day after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 712(k) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–448  effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 311(d) of Pub. L. 97–448 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f224(d) ,  Sept. 3, 1982 ,  96 Stat. 489 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(8)(B) ,  Jan. 12, 1983 ,  96 Stat. 2403 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 168, 318, 334, 336, 337, 381, and 617 of this title] shall apply to any target corporation (within the meaning of section 338 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as added by this section) with respect to which the acquisition date (within the meaning of such section) occurs after  August 31, 1982 . \n \n “(2)   Certain acquisitions before  september 1, 1982 .— If— “(A)  an acquisition date (within the meaning of section 338 of such Code without regard to paragraph (5) of this subsection) occurred after  August 31, 1980 , and before  September 1, 1982 , \n \n “(B)  the target corporation (within the meaning of section 338 of such Code) is not liquidated before  September 1, 1982 , and \n \n “(C)  the purchasing corporation (within the meaning of section 338 of such Code) makes, not later than  November 15, 1982 , an election under section 338 of such Code, \n \n\n then the amendments made by this section shall apply to the acquisition of such target corporation. \n \n “(3)   Certain acquisitions of financial institutions .— In any case in which— “(A)  there is, on  July 22, 1982 , a binding contract to acquire control (within the meaning of section 368(c) of such Code) of any financial institution, \n \n “(B)  the approval of one or more regulatory authorities is required in order to complete such acquisition, and \n \n “(C)  within 90 days after the date of the final approval of the last such regulatory authority granting final approval, a plan of complete liquidation of such financial institution is adopted, \n \n\n then the purchasing corporation may elect not to have the amendments made by this section apply to the acquisition pursuant to such contract. \n \n “(4)   Extension of time for making elections; revocation of elections.— “(A)   Extension .— The time for making an election under section 338 of such Code shall not expire before the close of  February 28, 1983 . \n \n “(B)   Revocation .— Any election made under section 338 of such Code may be revoked by the purchasing corporation if revoked before  March 1, 1983 . \n \n \n “(5)   Rules for acquisitions described in paragraph (2).— “(A)   In general .— For purposes of applying section 338 of such Code with respect to any acquisition described in paragraph (2)— “(i)  the date selected under subparagraph (B) of this paragraph shall be treated as the acquisition date, \n \n “(ii)  a rule similar to the last sentence of section 334(b)(2) of such Code (as in effect on  August 31, 1982 ) shall apply, and \n \n “(iii)  subsections (e), (f), and (i) of such section 338, and paragraphs (4), (6), (8), and (9) of subsection (h) of such section 338, shall not apply. \n \n \n “(B)   Selection of acquisition date by purchasing corporation .— The purchasing corporation may select any date for purposes of subparagraph (A)(i) if such date— “(i)  is after the later of  June 30, 1982 , or the acquisition date (within the meaning of section 338 of such Code without regard to this paragraph), and \n \n “(ii)  is on or before the date on which the election described in paragraph (2)(C) is made.”\nFor provisions that nothing in amendment by  section 401(d)(1)(D)(vii) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(e)(9) ,  Oct. 22, 1986 ,  100 Stat. 2804 , provided that:  \n “In the case of a Rhode Island corporation which was organized on  February 22, 1983 , and which on  February 25, 1983 — “(A)  purchased the stock of another corporation, \n \n “(B)  filed an election under section 338(g) of the Internal Revenue Code of 1986 with respect to such purchase, and \n \n “(C)  merged into the acquired corporation, \n \n\n such purchase of stock shall be considered as made by the acquiring corporation, such election shall be valid, and the acquiring corporation shall be considered a purchasing corporation for purposes of section 338 of such Code without regard to the duration of the existence of the acquiring corporation.”\nPub. L. 98–369, div. A, title VII, §\u202f712(k)(10) ,  July 18, 1984 ,  98 Stat. 953 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If, before  October 20, 1983 , a corporation was treated as making a qualified stock purchase (as defined in section 338(d)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), but would not be so treated under the amendments made by paragraphs (5) and (6) [amending subsec. (h) and  section 318(b)(4) of this title ] of this subsection, the amendments made by such paragraphs shall not apply to such purchase unless such corporation elects (at such time and in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe) to have the amendments made by such paragraphs apply.”\nPub. L. 97–448, title III, §\u202f306(a)(8)(A)(ii) ,  Jan. 12, 1983 ,  96 Stat. 2402 , as amended by  Pub. L. 98–369, div. A, title VII, §\u202f722(a)(3) ,  July 18, 1984 ,  98 Stat. 973 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If— “(I)  any portion of a qualified stock purchase is pursuant to a binding contract entered into on or after  September 1, 1982 , and on or before the date of the enactment of this Act [ Jan. 12, 1983 ], and \n \n “(II)  the purchasing corporation establishes by clear and convincing evidence that such contract was negotiated on the contemplation that, with respect to the deemed sale under section 338 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the target corporation would be treated as a member of the affiliated group which includes the selling corporation, \n \n\n then the amendment made by clause (i) [amending subsec. (h)] shall not apply to such qualified stock purchase.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 107 ;  Pub. L. 85–866, title I, §\u202f20(a) ,  Sept. 2, 1958 ,  72 Stat. 1615 ;  Pub. L. 87–834, §\u202f13(f)(4) ,  Oct. 16, 1962 ,  76 Stat. 1035 ;  Pub. L. 88–272, title II, §\u202f231(b)(4) ,  Feb. 26, 1964 ,  78 Stat. 105 ;  Pub. L. 88–484, §\u202f1(a) ,  Aug. 22, 1964 ,  78 Stat. 596 ;  Pub. L. 89–570, §\u202f1(b)(4) ,  Sept. 12, 1966 ,  80 Stat. 762 ;  Pub. L. 91–172, title II, §\u202f211(b)(4) , title V, §\u202f514(b)(1),  Dec. 30, 1969 ,  83 Stat. 570 , 643;  Pub. L. 94–455, title II, §\u202f205(c)(2) , title XIV, §\u202f1402(b)(1)(B), (2), title XIX, §§\u202f1901(b)(3)(A), (I), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1535 , 1731, 1732, 1792, 1793, 1834;  Pub. L. 97–34, title V, §\u202f505(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 332 ;  Pub. L. 97–248, title II, §\u202f222(e)(5) ,  Sept. 3, 1982 ,  96 Stat. 480 ;  Pub. L. 98–369, div. A, title I , §§\u202f43(c)(1), 65(a)–(c), 135(a), title IV, §\u202f492(b)(2), title X, §\u202f1001(b)(2), (e),  July 18, 1984 ,  98 Stat. 558 , 584, 669, 854, 1011, 1012;  Pub. L. 99–514, title VI, §\u202f631(e)(6) , title XVIII, §§\u202f1804(i)(1), 1899A(8),  Oct. 22, 1986 ,  100 Stat. 2273 , 2807, 2958;  Pub. L. 100–647, title I, §\u202f1006(e)(18) ,  Nov. 10, 1988 ,  102 Stat. 3403 ;  Pub. L. 104–188, title I, §\u202f1702(h)(7) ,  Aug. 20, 1996 ,  110 Stat. 1874 ;  Pub. L. 106–170, title V, §\u202f532(c)(2)(D) ,  Dec. 17, 1999 ,  113 Stat. 1930 ;  Pub. L. 107–147, title IV, §\u202f417(24)(B)(i) ,  Mar. 9, 2002 ,  116 Stat. 57 , related to collapsible corporations.\nRepeal applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 110 , related to liquidation of certain foreign personal holding companies.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE LIQUIDATIONS'},
  'content': 'For purposes of this subchapter, a distribution shall be treated as in complete liquidation of a corporation if the distribution is one of a series of distributions in redemption of all of the stock of the corporation pursuant to a plan.\nThe Secretary shall prescribe such regulations as may be necessary to ensure that the purposes of subsections (a) and (b) of section 222 of the Tax Equity and Fiscal Responsibility Act of 1982 (which repeal the special tax treatment for partial liquidations) may not be circumvented through the use of section 355, 351, or any other provision of law or regulations (including the consolidated return regulations).\nSubsections (a) and (b) of section 222 of the Tax Equity and Fiscal Responsibility Act of 1982, referred to in subsec. (b), are subsecs. (a) and (b) of  Pub. L. 97–248, title II, §\u202f222 ,  Sept. 3, 1982 ,  96 Stat. 478 , which amended sections 331(a) and 336(a) of this title.\n1986—Subsec. (b).  Pub. L. 99–514  struck out “337,” after “351,”.\n1982—Subsec. (a).  Pub. L. 97–248  substituted provision that a distribution shall be treated as in complete liquidation if the distribution is one of a series in redemption of all the stock pursuant to a plan for provision that a distribution was to be treated as in partial liquidation if the distribution was one of a series in redemption of all the stock pursuant to a plan, or the distribution was not essentially equivalent to a dividend, was in redemption of part of the stock pursuant to a plan, and occurred within the taxable year or the next taxable year of the plan being adopted, including but not limited to a distribution which met the requirements of former subsec. (b) of this section, and that for the purposes of sections 562(b) and 6043 of this title, a partial liquidation included a redemption of stock to which  section 302 of this title  applied.\nSubsec. (b).  Pub. L. 97–248  added subsec. (b) and struck out former subsec. (b) which provided that a distribution was to be treated as in partial liquidation of a corporation if the distribution was attributable to the cessation of a business which had been carried on for the previous 5-year period and had not been acquired by the corporation in a transaction involving recognition of gain or loss during that time, and if the distributing corporation was actively involved in a trade or business immediately after the distribution under the terms described above for the business being liquidated, and that compliance with the above requirements would be determined without regard to whether or not the distribution was pro rata with respect to all the shareholders of the corporation.\nSubsec. (c).  Pub. L. 97–248  struck out subsec. (c) which provided that the fact that, with respect to a shareholder, a distribution qualified under section 302(a) by reason of section 302(b) would not be taken into account in determining whether the distribution, with respect to such shareholder, was also a distribution in partial liquidation of the corporation.\nAmendment by  Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation.\nIn determining control for purposes of this section, the fact that any corporate transferor distributes part or all of the stock in the corporation which it receives in the exchange to its shareholders shall not be taken into account.\nIf the requirements of section 355 (or so much of section 356 as relates to section 355) are met with respect to a distribution described in paragraph (1), then, solely for purposes of determining the tax treatment of the transfers of property to the controlled corporation by the distributing corporation, the fact that the shareholders of the distributing corporation dispose of part or all of the distributed stock, or the fact that the corporation whose stock was distributed issues additional stock, shall not be taken into account in determining control for purposes of this section.\nA transfer of property of a debtor pursuant to a plan while the debtor is under the jurisdiction of a court in a title 11 or similar case (within the meaning of section 368(a)(3)(A)), to the extent that the stock received in the exchange is used to satisfy the indebtedness of such debtor.\nClauses (i), (ii), and (iii) of subparagraph (A) shall apply only if the right or obligation referred to therein may be exercised within the 20-year period beginning on the issue date of such stock and such right or obligation is not subject to a contingency which, as of the issue date, makes remote the likelihood of the redemption or purchase.\nThe term “preferred stock” means stock which is limited and preferred as to dividends and does not participate in corporate growth to any significant extent. Stock shall not be treated as participating in corporate growth to any significant extent unless there is a real and meaningful likelihood of the shareholder actually participating in the earnings and growth of the corporation. If there is not a real and meaningful likelihood that dividends beyond any limitation or preference will actually be paid, the possibility of such payments will be disregarded in determining whether stock is limited and preferred as to dividends.\nA person shall be treated as related to another person if they bear a relationship to such other person described in section 267(b) or 707(b).\nThe Secretary may prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection and sections 354(a)(2)(C), 355(a)(3)(D), and 356(e). The Secretary may also prescribe regulations, consistent with the treatment under this subsection and such sections, for the treatment of nonqualified preferred stock under other provisions of this title.\n2005—Subsec. (g)(3)(A).  Pub. L. 109–135  inserted at end “If there is not a real and meaningful likelihood that dividends beyond any limitation or preference will actually be paid, the possibility of such payments will be disregarded in determining whether stock is limited and preferred as to dividends.”\n2004—Subsec. (g)(3)(A).  Pub. L. 108–357  inserted at end “Stock shall not be treated as participating in corporate growth to any significant extent unless there is a real and meaningful likelihood of the shareholder actually participating in the earnings and growth of the corporation.”\n2002—Subsec. (h)(1).  Pub. L. 107–147  inserted comma after “liability”.\n1999—Subsec. (h)(1).  Pub. L. 106–36  struck out “,\u2000or acquires property subject to a liability,” after “liability”.\n1998—Subsec. (c).  Pub. L. 105–206, §\u202f6010(c)(3)(A) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In determining control for purposes of this section—\n“(1) the fact that any corporate transferor distributes part or all of the stock in the corporation which it receives in the exchange to its shareholders shall not be taken into account, and\n“(2) if the requirements of section 355 are met with respect to such distribution, the shareholders shall be treated as in control of such corporation immediately after the exchange if the shareholders own (immediately after the distribution) stock possessing—\n“(A) more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and\n“(B) more than 50 percent of the total value of shares of all classes of stock of such corporation.”\nSubsec. (c)(2).  Pub. L. 105–277  inserted “,\u2000or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”.\nSubsec. (g)(1)(A) to (C).  Pub. L. 105–206, §\u202f6010(e)(1) , inserted “and” at end of subpar. (A), added subpar. (B), and struck out former subpars. (B) and (C) which read as follows:\n“(B) subsection (b) shall apply to such transferor, and\n“(C) such nonqualified preferred stock shall be treated as other property for purposes of applying subsection (b).”\n1997—Subsec. (c).  Pub. L. 105–34, §\u202f1012(c)(1) , amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “In determining control, for purposes of this section, the fact that any corporate transferor distributes part or all of the stock which it receives in the exchange to its shareholders shall not be taken into account.”\nSubsec. (e)(1).  Pub. L. 105–34, §\u202f1002(a) , inserted last two sentences.\nSubsecs. (g), (h).  Pub. L. 105–34, §\u202f1014(a) , added subsec. (g) and redesignated former subsec. (g) as (h).\n1990—Subsec. (e)(2).  Pub. L. 101–508  substituted “is used” for “are used”.\n1989—Subsec. (a).  Pub. L. 101–239, §\u202f7203(a) , struck out “or securities” after “stock”.\nSubsecs. (b), (d), (e)(2).  Pub. L. 101–239, §\u202f7203(b)(1) , struck out “or securities” after “stock”.\nSubsec. (g)(2).  Pub. L. 101–239, §\u202f7203(b)(2) , substituted “stock or property” for “stock, securities, or property”.\n1988—Subsecs. (f), (g).  Pub. L. 100–647  added subsec. (f) and redesignated former subsec. (f) as (g).\n1982—Subsec. (f)(5).  Pub. L. 97–248  added par. (5).\n1980—Subsec. (a).  Pub. L. 96–589, §\u202f5(e)(2) , struck out provision that stock or securities issued for services shall not be considered as issued in return for property for purposes of this section.\nSubsec. (d).  Pub. L. 96–589, §\u202f5(e)(1) , added subsec. (d). Former subsec. (d) redesignated (e)(1).\nSubsec. (e).  Pub. L. 96–589, §\u202f5(e)(2) , redesignated former subsec. (d) as par. (1) and added par. (2). Former subsec. (e) redesignated (f).\nSubsec. (f).  Pub. L. 96–589, §\u202f5(e)(1) , redesignated former subsec. (e) as (f).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(a)(48)(A) , struck out “(including, in the case of transfers made on or before  June 30, 1967 , an investment company)” after “property is transferred to a corporation”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(a)(48)(B) , among other changes, substituted “Exception” for “Application of  June 30, 1967 , date” in heading and in text provision that this section does not apply to a transfer of property to an investment company for provisions relating to treatment of a transfer of property to an investment company as made on or before  June 30, 1967 .\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f203(a) , inserted “(including, in the case of transfers made on or before  June 30, 1967 , an investment company)” after “if property is transferred to a corporation”.\nSubsecs. (d), (e).  Pub. L. 89–809, §\u202f203(b) , added subsec. (d) and redesignated former subsec. (d) as (e).\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f899(b) ,  Oct. 22, 2004 ,  118 Stat. 1649 , provided that:  “The amendment made by this section [amending this section] shall apply to transactions after  May 14, 2003 .”\nPub. L. 106–36, title III, §\u202f3001(e) ,  June 25, 1999 ,  113 Stat. 184 , provided that:  “The amendments made by this section [amending this section and sections 357, 358, 362, 368, 584, and 1031 of this title] shall apply to transfers after  October 18, 1998 .”\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title X, §\u202f1002(b) ,  Aug. 5, 1997 ,  111 Stat. 909 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to transfers after  June 8, 1997 , in taxable years ending after such date. \n \n “(2)   Binding contracts .— The amendment made by subsection (a) shall not apply to any transfer pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such transfer if such contract provides for the transfer of a fixed amount of property.”\nPub. L. 105–34, title X, §\u202f1012(d) ,  Aug. 5, 1997 ,  111 Stat. 917 , as amended by  Pub. L. 105–206, title VI, §\u202f6010(c)(1) ,  July 22, 1998 ,  112 Stat. 813 , provided that: \n “(1)   Section 355 rules .— The amendments made by subsections (a) and (b) [amending sections 355 and 358 of this title] shall apply to distributions after  April 16, 1997 ; except that the amendment made by subsection (a) [amending  section 355 of this title ] shall apply to such distributions only if pursuant to a plan (or series of related transactions) which involves an acquisition described in section 355(e)(2)(A)(ii) of the Internal Revenue Code of 1986 occurring after such date. \n \n “(2)   Divisive transactions .— The amendments made by subsection (c) [amending this section and  section 368 of this title ] shall apply to transfers after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(3)   Transition rule .— The amendments made by this section [amending this section and sections 355, 358, and 368 of this title] shall not apply to any distribution pursuant to a plan (or series of related transactions) which involves an acquisition described in section 355(e)(2)(A)(ii) of the Internal Revenue Code of 1986 (or, in the case of the amendments made by subsection (c), any transfer) occurring after  April 16, 1997 , if such acquisition or transfer is— “(A)  made pursuant to an agreement which was binding on such date and at all times thereafter, \n \n “(B)  described in a ruling request submitted to the Internal Revenue Service on or before such date, or \n \n “(C)  described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission required solely by reason of the acquisition or transfer. \n \n\n This paragraph shall not apply to any agreement, ruling request, or public announcement or filing unless it identifies the acquirer of the distributing corporation or any controlled corporation, or the transferee, whichever is applicable.”\nPub. L. 105–34, title X, §\u202f1014(f) ,  Aug. 5, 1997 ,  111 Stat. 921 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 354 to 356 and 1036 of this title] shall apply to transactions after  June 8, 1997 . \n \n “(2)   Transition rule .— The amendments made by this section shall not apply to any transaction after  June 8, 1997 , if such transaction is— “(A)  made pursuant to a written agreement which was binding on such date and at all times thereafter, \n \n “(B)  described in a ruling request submitted to the Internal Revenue Service on or before such date, or \n \n “(C)  described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission required solely by reason of the transaction.”\nPub. L. 101–239, title VII, §\u202f7203(c) ,  Dec. 19, 1989 ,  103 Stat. 2334 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to transfers after  October 2, 1989 , in taxable years ending after such date. \n \n “(2)   Binding contract .— The amendments made by this section shall not apply to any transfer pursuant to a written binding contract in effect on  October 2, 1989 , and at all times thereafter before such transfer. \n \n “(3)   Corporate transfers .— In the case of property transferred (directly or indirectly through a partnership or otherwise) by a C corporation, paragraphs (1) and (2) shall be applied by substituting ‘ July 11, 1989 ’ for ‘ October 2, 1989 ’. The preceding sentence shall not apply where the corporation meets the requirements of section 1504(a)(2) of the Internal Revenue Code of 1986 with respect to the transferee corporation (and where the transfer is not part of a plan pursuant to which the transferor subsequently fails to meet such requirements).”\nPub. L. 100–647, title I, §\u202f1018(d)(5)(G) ,  Nov. 10, 1988 ,  102 Stat. 3580 , provided that the amendment made by that section is effective with respect to transfers on or after  June 21, 1988 .\nAmendment by  Pub. L. 97–248  applicable to transfers occurring after  Aug. 31, 1982 , except for certain transfers pursuant to an application to form a BHC filed with the Federal Reserve Board before  Aug. 16, 1982 , see  section 226(c) of Pub. L. 97–248 , set out as a note under  section 304 of this title .\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in proceedings in bankruptcy cases or similar judicial proceedings or in proceedings under Title 11, Bankruptcy, commencing on or before  Dec. 31, 1980 , except as otherwise provided, see  section 7 of Pub. L. 96–589 , set out as a note under  section 108 of this title .\nPub. L. 94–455, title XIX, §\u202f1901(a)(48)(C) ,  Oct. 4, 1976 ,  90 Stat. 1772 , provided that:  “The amendments made by this paragraph [amending this section] shall take effect with respect to transfers of property occurring after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 89–809, title II, §\u202f203(c) ,  Nov. 13, 1966 ,  80 Stat. 1577 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply with respect to transfers of property to investment companies whether made before, on, or after the date of the enactment of this Act [ Nov. 13, 1966 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'No gain or loss shall be recognized if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization.\nNeither paragraph (1) nor so much of section 356 as relates to paragraph (1) shall apply to the extent that any stock (including nonqualified preferred stock, as defined in section 351(g)(2)), securities, or other property received is attributable to interest which has accrued on securities on or after the beginning of the holder’s holding period.\nNonqualified preferred stock (as defined in section 351(g)(2)) received in exchange for stock other than nonqualified preferred stock (as so defined) shall not be treated as stock or securities.\nClause (i) shall not apply in the case of a recapitalization under section 368(a)(1)(E) of a family-owned corporation.\nFor purposes of this clause, except as provided in regulations, the term “family-owned corporation” means any corporation which is described in clause (i) of section 447(d)(2)(C)\u202f 1 1 \u202fSee References in Text note below.  throughout the 8-year period beginning on the date which is 5 years before the date of the recapitalization. For purposes of the preceding sentence, stock shall not be treated as owned by a family member during any period described in section 355(d)(6)(B).\nThe statutory period for the assessment of any deficiency attributable to a corporation failing to be a family-owned corporation shall not expire before the expiration of 3 years after the date the Secretary is notified by the corporation (in such manner as the Secretary may prescribe) of such failure, and such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment.\nFor special rules for certain exchanges in pursuance of plans of reorganization within the meaning of subparagraph (D) or (G) of section 368(a)(1), see section 355.\nNotwithstanding any other provision of this subchapter, subsection (a)(1) (and so much of section 356 as relates to this section) shall apply with respect to a plan of reorganization (whether or not a reorganization within the meaning of section 368(a)) for a railroad confirmed under  section 1173 of title 11  of the United States Code, as being in the public interest.\nSection 447(d), referred to in subsec. (a)(2)(C)(ii)(II), was repealed and provisions not relating to family-owned corporations were redesignated as section 447(d) by  Pub. L. 115–97, title I, §\u202f13102(a)(5)(C) ,  Dec. 22, 2017 ,  131 Stat. 2103 .\n1998—Subsec. (a)(2)(C)(ii)(III).  Pub. L. 105–206  added subcl. (III).\n1997—Subsec. (a)(2)(B).  Pub. L. 105–34, §\u202f1014(e)(1) , inserted “(including nonqualified preferred stock, as defined in section 351(g)(2))” after “stock”.\nSubsec. (a)(2)(C).  Pub. L. 105–34, §\u202f1014(b) , added subpar. (C).\nSubsec. (a)(3)(A).  Pub. L. 105–34, §\u202f1014(e)(2) , inserted “nonqualified preferred stock and” after “subsection (including”.\n1995—Subsec. (c).  Pub. L. 104–88  struck out “or approved by the Interstate Commerce Commission under subchapter IV of chapter 113 of title 49,” after “Code,”.\n1990—Subsec. (d).  Pub. L. 101–508  struck out subsec. (d) “Exchanges under the final system plan for ConRail” which read as follows: “No gain or loss shall be recognized if stock or securities in a corporation are, in pursuance of an exchange to which paragraph (1) or (2) of section 374(c) applies, exchanged solely for stock of the Consolidated Rail Corporation, securities of such Corporation, certificates of value of the United States Railway Association, or any combination thereof.”\n1980—Subsec. (a)(2).  Pub. L. 96–589, §\u202f4(e)(1) , redesignated existing pars. (A) and (B) as par. (A)(i), (ii), and added par. (B).\nSubsec. (a)(3).  Pub. L. 96–589, §\u202f4(e)(1) , designated existing provisions as subpar. (A), inserted provisions excluding property to which paragraph (2)(B) applies, and added subpar. (B).\nSubsec. (b).  Pub. L. 96–589, §\u202f4(h)(1) , substituted “subparagraph (D) or (G) of section 368(a)(1)” for “section 368(a)(1)(D)”, wherever appearing.\nSubsec. (c).  Pub. L. 96–589, §\u202f6(i)(2) , substituted “confirmed under  section 1173 of title 11  of the United States Code, or approved by the Interstate Commerce Commission” for “approved by the Interstate Commerce Commission under section 77 of the Bankruptcy Act, or”.\n1978—Subsec. (c).  Pub. L. 95–473  substituted “subchapter IV of chapter 113 of title 49” for “section 20b of the Interstate Commerce Act”.\n1976—Subsec. (d).  Pub. L. 94–253  added subsec. (d).\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable, with certain exceptions, to transactions after  June 8, 1997 , see  section 1014(f) of Pub. L. 105–34 , set out as a note under  section 351 of this title .\nAmendment by  Pub. L. 104–88  effective  Jan. 1, 1996 , see  section 2 of Pub. L. 104–88 , set out as an Effective Date note under  section 1301 of Title 49 , Transportation.\nAmendment by  section 4(e)(1) of Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceedings commencing after  Dec. 31, 1980 , and to exchanges which occur after  Dec. 31, 1980 , and which do not occur in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11, Bankruptcy, commenced on or before  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to such cases, proceedings or exchanges commencing after  Sept. 30, 1979 , see section 7(c), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  section 4(h)(1) of Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceedings commencing after  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to such cases or proceedings commencing after  Sept. 30, 1979 , see section 7(c)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  section 6(i)(2) of Pub. L. 96–589  effective  Oct. 1, 1979 , but not applicable to any proceeding under Title 11 commenced before  Oct. 1, 1979 , see  section 7(e) of Pub. L. 96–589 , set out as a note under  section 108 of this title .\nPub. L. 94–253, §\u202f2 ,  Mar. 31, 1976 ,  90 Stat. 297 , provided that:  “The amendments made by section 1 [amending this section and sections 356, 358, and 374 of this title] shall apply to taxable years ending after  March 31, 1976 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nUnited States Railway Association abolished effective  Apr. 1, 1987 , all powers, duties, rights, and obligations of Association relating to Consolidated Rail Corporation under Regional Rail Reorganization Act of 1973 ( 45 U.S.C. 701  et seq.) transferred to Secretary of Transportation on  Jan. 1, 1987 , and any securities of Corporation held by Association transferred to Secretary of Transportation on  Oct. 21, 1986 , see  section 1341 of Title 45 , Railroads.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'Neither paragraph (1) nor so much of section 356 as relates to paragraph (1) shall apply to the extent that any stock (including nonqualified preferred stock, as defined in section 351(g)(2)), securities, or other property received is attributable to interest which has accrued on securities on or after the beginning of the holder’s holding period.\nNonqualified preferred stock (as defined in section 351(g)(2)) received in a distribution with respect to stock other than nonqualified preferred stock (as so defined) shall not be treated as stock or securities.\nFor purposes of determining whether a corporation meets the requirements of paragraph (2)(A), all members of such corporation’s separate affiliated group shall be treated as one corporation.\nFor purposes of this paragraph, the term “separate affiliated group” means, with respect to any corporation, the affiliated group which would be determined under section 1504(a) if such corporation were the common parent and section 1504(b) did not apply.\nIf a corporation became a member of a separate affiliated group as a result of one or more transactions in which gain or loss was recognized in whole or in part, any trade or business conducted by such corporation (at the time that such corporation became such a member) shall be treated for purposes of paragraph (2) as acquired in a transaction in which gain or loss was recognized in whole or in part.\nThe Secretary shall prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which provide for the proper application of subparagraphs (B), (C), and (D) of paragraph (2), and modify the application of subsection (a)(3)(B), in connection with the application of this paragraph.\nExcept as provided in paragraph (2), no gain or loss shall be recognized to a corporation on any distribution to which this section (or so much of section 356 as relates to this section) applies and which is not in pursuance of a plan of reorganization.\nFor purposes of subparagraph (A), the term “qualified property” means any stock or securities in the controlled corporation.\nIf any property distributed in the distribution referred to in paragraph (1) is subject to a liability or the shareholder assumes a liability of the distributing corporation in connection with the distribution, then, for purposes of subparagraph (A), the fair market value of such property shall be treated as not less than the amount of such liability.\nSections 311 and 336(a) shall not apply to any distribution referred to in paragraph (1).\nIn the case of a disqualified distribution, any stock or securities in the controlled corporation shall not be treated as qualified property for purposes of subsection (c)(2) of this section or section 361(c)(2).\nFor purposes of this subsection, the term “50-percent or greater interest” means stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock.\nIf this paragraph applies to any stock or securities for any period, the running of any 5-year period set forth in subparagraph (A) or (B) of paragraph (3) (whichever applies) shall be suspended during such period.\nFor purposes of this subsection, a person and all persons related to such person (within the meaning of section 267(b) or 707(b)(1)) shall be treated as one person.\nIf two or more persons act pursuant to a plan or arrangement with respect to acquisitions of stock or securities in the distributing corporation or controlled corporation, such persons shall be treated as one person for purposes of this subsection.\nParagraph (2) of section 318(a) shall apply in determining whether a person holds stock or securities in any corporation (determined by substituting “10 percent” for “50 percent” in subparagraph (C) of such paragraph (2) and by treating any reference to stock as including a reference to securities).\nIf there is a distribution to which this subsection applies, any stock or securities in the controlled corporation shall not be treated as qualified property for purposes of subsection (c)(2) of this section or section 361(c)(2).\nIf 1 or more persons acquire directly or indirectly stock representing a 50-percent or greater interest in the distributing corporation or any controlled corporation during the 4-year period beginning on the date which is 2 years before the date of the distribution, such acquisition shall be treated as pursuant to a plan described in subparagraph (A)(ii) unless it is established that the distribution and the acquisition are not pursuant to a plan or series of related transactions.\nA plan (or series of related transactions) shall not be treated as described in subparagraph (A)(ii) if, immediately after the completion of such plan or transactions, the distributing corporation and all controlled corporations are members of a single affiliated group (as defined in section 1504 without regard to subsection (b) thereof).\nThis subsection shall not apply to any distribution to which subsection (d) applies.\nExcept as provided in regulations, for purposes of this subsection, if the assets of the distributing corporation or any controlled corporation are acquired by a successor corporation in a transaction described in subparagraph (A), (C), or (D) of section 368(a)(1) or any other transaction specified in regulations by the Secretary, the shareholders (immediately before the acquisition) of the corporation acquiring such assets shall be treated as acquiring stock in the corporation from which the assets were acquired.\nThe term “50-percent or greater interest” has the meaning given such term by subsection (d)(4).\nParagraph (1) shall not apply to any distribution made in a title 11 or similar case (as defined in section 368(a)(3)).\nThe rules of paragraph (7)(A) of subsection (d) shall apply.\nSection 318(a)(2) shall apply in determining whether a person holds stock or securities in any corporation. Except as provided in regulations, section 318(a)(2)(C) shall be applied without regard to the phrase “50 percent or more in value” for purposes of the preceding sentence.\nFor purposes of this subsection, any reference to a controlled corporation or a distributing corporation shall include a reference to any predecessor or successor of such corporation.\nExcept as provided in regulations, this section (or so much of section 356 as relates to this section) shall not apply to the distribution of stock from 1 member of an affiliated group (as defined in section 1504(a)) to another member of such group if such distribution is part of a plan (or series of related transactions) described in subsection (e)(2)(A)(ii) (determined after the application of subsection (e)).\nSuch term shall not include any security (as defined in section 475(c)(2)) which is held by a dealer in securities and to which section 475(a) applies.\nSuch term shall not include any stock and securities in, or any asset described in subclause (IV) or (V) of clause (i) issued by, a corporation which is a 20-percent controlled entity with respect to the distributing or controlled corporation.\nThe distributing or controlled corporation shall, for purposes of applying this subsection, be treated as owning its ratable share of the assets of any 20-percent controlled entity.\nFor purposes of this clause, the term “20-percent controlled entity” means, with respect to any distributing or controlled corporation, any corporation with respect to which the distributing or controlled corporation owns directly or indirectly stock meeting the requirements of section 1504(a)(2), except that such section shall be applied by substituting “20 percent” for “80 percent” and without regard to stock described in section 1504(a)(4).\nSuch term shall not include any interest in a partnership, or any debt instrument or other evidence of indebtedness, issued by the partnership, if 1 or more of the trades or businesses of the partnership are (or, without regard to the 5-year requirement under subsection (b)(2)(B), would be) taken into account by the distributing or controlled corporation, as the case may be, in determining whether the requirements of subsection (b) are met with respect to the distribution.\nThe distributing or controlled corporation shall, for purposes of applying this subsection, be treated as owning its ratable share of the assets of any partnership described in subclause (I).\nThe term “50-percent or greater interest” has the meaning given such term by subsection (d)(4).\nThe rules of section 318 shall apply for purposes of determining ownership of stock for purposes of this paragraph.\nFor purposes of this subsection, the term “transaction” includes a series of transactions.\nThis section (and so much of section 356 as relates to this section) shall not apply to any distribution if either the distributing corporation or controlled corporation is a real estate investment trust.\nParagraph (1) shall not apply to any distribution if, immediately after the distribution, the distributing corporation and the controlled corporation are both real estate investment trusts.\nThe date of the enactment of this subsection, referred to in subsec. (g)(2)(A)(i), is the date of enactment of  Pub. L. 109–222 , which was approved  May 17, 2006 .\n2018—Subsec. (h)(2).  Pub. L. 115–141, §\u202f101(m)(2)(A) , substituted “distributions” for “spinoffs” in heading.\nSubsec. (h)(2)(A).  Pub. L. 115–141, §\u202f101(m)(2)(B) , substituted “Distributions” for “Spinoffs” in heading.\nSubsec. (h)(2)(B).  Pub. L. 115–141, §\u202f401(a)(65) , struck out “of assets” after “the stock or assets” in concluding provisions.\nPub. L. 115–141, §\u202f101(m)(2)(B) , substituted “Distributions” for “Spinoffs” in heading.\nPub. L. 115–141, §\u202f101(m)(1) , in concluding provisions, substituted “at least 80 percent” for “80 percent” in two places.\n2015—Subsec. (h).  Pub. L. 114–113  added subsec. (h).\n2014—Subsec. (d)(3)(A), (B)(i), (ii)(II).  Pub. L. 113–295  struck out “after  October 9, 1990 , and” after “acquired by purchase”.\n2007—Subsec. (b)(2)(A).  Pub. L. 110–172, §\u202f4(b)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “it is engaged in the active conduct of a trade or business, or substantially all of its assets consist of stock and securities of a corporation controlled by it (immediately after the distribution) which is so engaged,”.\nSubsec. (b)(3).  Pub. L. 110–172, §\u202f4(b)(2) , amended par. (3) generally. Prior to amendment, par. (3) provided for special rule relating to active business requirement applicable in the case of any distribution made after  May 17, 2006 .\n2006—Subsec. (b)(3).  Pub. L. 109–222, §\u202f202 , added par. (3).\nSubsec. (b)(3)(A), (D).  Pub. L. 109–432  struck out “and on or before  December 31, 2010 ” after “this paragraph” in subpar. (A) and after “such date” in subpar. (D).\nSubsec. (g).  Pub. L. 109–222, §\u202f507(a) , added subsec. (g).\n1998—Subsec. (e)(3)(A).  Pub. L. 105–206, §\u202f6010(c)(2)(A) , substituted “shall not be taken into account in applying” for “shall not be treated as described in” in introductory provisions.\nSubsec. (e)(3)(A)(iv).  Pub. L. 105–206, §\u202f6010(c)(2)(B) , added cl. (iv) and struck out former cl. (iv) which read as follows: “The acquisition of stock in a corporation if shareholders owning directly or indirectly stock possessing—\n“(I) more than 50 percent of the total combined voting power of all classes of stock entitled to vote, and\n“(II) more than 50 percent of the total value of shares of all classes of stock,\nin the distributing corporation or any controlled corporation before such acquisition own directly or indirectly stock possessing such vote and value in such distributing or controlled corporation after such acquisition.”\n1997—Subsec. (a)(3)(C).  Pub. L. 105–34, §\u202f1014(e)(1) , inserted “(including nonqualified preferred stock, as defined in section 351(g)(2))” after “stock”.\nSubsec. (a)(3)(D).  Pub. L. 105–34, §\u202f1014(c) , added subpar. (D).\nSubsec. (a)(4)(A).  Pub. L. 105–34, §\u202f1014(e)(2) , inserted “nonqualified preferred stock and” after “subsection (including”.\nSubsec. (e).  Pub. L. 105–34, §\u202f1012(a) , added subsec. (e).\nSubsec. (f).  Pub. L. 105–34, §\u202f1012(b)(1) , added subsec. (f).\n1996—Subsec. (d)(7)(A).  Pub. L. 104–188  inserted “section” before “267(b)”.\n1990—Subsec. (c).  Pub. L. 101–508, §\u202f11321(a) , added subsec. (c) and struck out former subsec. (c) which read as follows:\n“(1)  In general .—Except as provided in paragraph (2), no gain or loss shall be recognized to a corporation on any distribution to which this section (or so much of section 356 as relates to this section) applies and which is not in pursuance of a plan of reorganization.\n“(2)  Distribution of appreciated property.—\n“(A)  In general .—If—\n“(i) in a distribution referred to in paragraph (1), the corporation distributes property other than stock or securities in the controlled corporation, and\n“(ii) the fair market value of such property exceeds its adjusted basis (in the hands of the distributing corporation),\nthen gain shall be recognized to the distributing corporation as if such property were sold to the distributee at its fair market value.\n“(B)  Treatment of liabilities .—If any property distributed in the distribution referred to in paragraph (1) is subject to a liability or the shareholder assumes a liability of the distributing corporation in connection with the distribution, then, for purposes of subparagraph (A), the fair market value of such property shall be treated as not less than the amount of such liability.\n“(3)  Coordination with sections 311 and 336 (a).—Sections 311 and 336(a) shall not apply to any distribution referred to in paragraph (1).”\nPub. L. 101–508, §\u202f11702(e)(2) , amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Section 311 shall apply to any distribution—\n“(1) to which this section (or so much of section 356 as relates to this section) applies, and\n“(2) which is not in pursuance of a plan of reorganization,\nin the same manner as if such distribution were a distribution to which subpart A of part I applies; except that subsection (b) of section 311 shall not apply to any distribution of stock or securities in the controlled corporation.”\nSubsec. (d).  Pub. L. 101–508, §\u202f11321(a) , added subsec. (d).\n1988—Subsec. (b)(2)(D)(i), (ii).  Pub. L. 100–647, §\u202f2004(k)(1) , added cls. (i) and (ii) and struck out former cls. (i) and (ii) which read as follows:\n“(i) was not acquired by any distributee corporation directly (or through 1 or more corporations, whether through the distributing corporation or otherwise) within the period described in subparagraph (B), or\n“(ii) was so acquired such distributee corporation within such period, but such control was so acquired only by reason of transactions in which gain or loss was not recognized in whole or in part, or only by reason of such transactions combined with acquisitions before the beginning of such period.”\nSubsec. (c).  Pub. L. 100–647, §\u202f1018(d)(5)(C) , added subsec. (c).\n1987—Subsec. (b)(2)(D).  Pub. L. 100–203, §\u202f10223(b)(3) , inserted at end “For purposes of subparagraph (D), all distributee corporations which are members of the same affiliated group (as defined in section 1504(a) without regard to section 1504(b)) shall be treated as 1 distributee corporation.”\nSubsec. (b)(2)(D)(i).  Pub. L. 100–203, §\u202f10223(b)(1) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “was not acquired directly (or through one or more corporations) by another corporation within the period described in subparagraph (B), or”.\nSubsec. (b)(2)(D)(ii).  Pub. L. 100–203, §\u202f10223(b)(2) , substituted “such distributee corporation” for “by another corporation”.\n1980—Subsec. (a)(3).  Pub. L. 96–589  designated existing provisions as subpars. (A) and (B) and added subpar. (C).\nSubsec. (a)(4).  Pub. L. 96–589, §\u202f4(e)(2) , designated existing provisions as subpar. (A), substituted “exchange if any property” for “distribution if any property”, inserted provisions excluding property to which paragraph (3)(C) applies, and added subpar. (B).\n1976—Subsec. (a)(1)(D)(ii).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  section 101(m) of Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f311(c) ,  Dec. 18, 2015 ,  129 Stat. 3091 , provided that:  “The amendments made by this section [amending this section and  section 856 of this title ] shall apply to distributions on or after  December 7, 2015 , but shall not apply to any distribution pursuant to a transaction described in a ruling request initially submitted to the Internal Revenue Service on or before such date, which request has not been withdrawn and with respect to which a ruling has not been issued or denied in its entirety as of such date.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 110–172, §\u202f4(d) ,  Dec. 29, 2007 ,  121 Stat. 2478 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 911 and 954 of this title] shall take effect as if included in the provisions of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ] to which they relate. \n \n “(2)   Modification of active business definition under section 355.— “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by subsection (b) [amending this section] shall apply to distributions made after  May 17, 2006 . \n \n “(B)   Transition rule .— The amendments made by subsection (b) shall not apply to any distribution pursuant to a transaction which is— “(i)  made pursuant to an agreement which was binding on  May 17, 2006 , and at all times thereafter, \n \n “(ii)  described in a ruling request submitted to the Internal Revenue Service on or before such date, or \n \n “(iii)  described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission. \n \n \n “(C)   Election out of transition rule .— Subparagraph (B) shall not apply if the distributing corporation elects not to have such subparagraph apply to distributions of such corporation. Any such election, once made, shall be irrevocable. \n \n “(D)   Special rule for certain pre-enactment distributions .— For purposes of determining the continued qualification under section 355(b)(2)(A) of the Internal Revenue Code of 1986 of distributions made on or before  May 17, 2006 , as a result of an acquisition, disposition, or other restructuring after such date, such distribution shall be treated as made on the date of such acquisition, disposition, or restructuring for purposes of applying subparagraphs (A) through (C) of this paragraph. The preceding sentence shall only apply with respect to the corporation that undertakes such acquisition, disposition, or other restructuring, and only if such application results in continued qualification under section 355(b)(2)(A) of such Code. \n \n \n “(3)   Amendment related to section 515 of the act .— The amendment made by subsection (c) [amending  section 911 of this title ] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–432, div. A, title IV, §\u202f410(b) ,  Dec. 20, 2006 ,  120 Stat. 2963 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in section 202 of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ].”\nPub. L. 109–222, title V, §\u202f507(b) ,  May 17, 2006 ,  120 Stat. 361 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [ May 17, 2006 ]. \n \n “(2)   Transition rule .— The amendments made by this section shall not apply to any distribution pursuant to a transaction which is— “(A)  made pursuant to an agreement which was binding on such date of enactment and at all times thereafter, \n \n “(B)  described in a ruling request submitted to the Internal Revenue Service on or before such date, or \n \n “(C)  described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission.”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by section 1012(a), (b)(1) of  Pub. L. 105–34  applicable, with transition rule, to distributions after  Apr. 16, 1997 , except that amendment by section 1012(a) applicable to such distributions only if pursuant to a plan (or series of related transactions) which involves an acquisition described in subsec. (e)(2)(A)(ii) of this section occurring after such date, see  section 1012(d) of Pub. L. 105–34 , as amended, set out as a note under  section 351 of this title .\nAmendment by section 1014(c), (e)(1), (2) of  Pub. L. 105–34  applicable, with certain exceptions, to transactions after  June 8, 1997 , see  section 1014(f) of Pub. L. 105–34 , set out as a note under  section 351 of this title .\nPub. L. 101–508, title XI, §\u202f11321(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–463 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 361 of this title ] shall apply to distributions after  October 9, 1990 . \n \n “(2)   Binding contract exception .— The amendments made by this section shall not apply to any distribution pursuant to a written binding contract in effect on  October 9, 1990 , and at all times thereafter before such distribution. \n \n “(3)   Transitional rules .— For purposes of subparagraphs (A) and (B) of section 355(d)(3) of the Internal Revenue Code of 1986 (as amended by subsection (a)), an acquisition shall be treated as occurring on or before  October 9, 1990 , if— “(A)  such acquisition is pursuant to a written binding contract in effect on  October 9, 1990 , and at all times thereafter before such acquisition, \n \n “(B)  such acquisition is pursuant to a transaction which was described in documents filed with the Securities and Exchange Commission on or before  October 9, 1990 , or \n \n “(C)  such acquisition is pursuant to a transaction— “(i)  the material terms of which were described in a written public announcement on or before  October 9, 1990 , \n \n “(ii)  which was the subject of a prior filing with the Securities and Exchange Commission, and \n \n “(iii)  which is the subject of a subsequent filing with the Securities and Exchange Commission before  January 1, 1991 .”\nAmendment by  section 11702(e)(2) of Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nAmendment by  section 1018(d)(5)(C) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(k)(1) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 100–203  applicable to distributions or transfers after  Dec. 15, 1987 , with exceptions for certain distributee corporations and distributions covered by prior transition rule, see  section 10223(d) of Pub. L. 100–203 , set out as a note under  section 304 of this title .\nAmendment by  Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceedings commencing after  Dec. 31, 1980 , and to exchanges which occur after  Dec. 31, 1980 , and which do not occur in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11, Bankruptcy, commenced on or before  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to such cases, proceedings or exchanges commencing after  Sept. 30, 1979 , see section 7(c), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nPub. L. 110–172, §\u202f4(b)(3) ,  Dec. 29, 2007 ,  121 Stat. 2476 , provided that:  “The Internal Revenue Code of 1986 shall be applied and administered as if the amendments made by section 202 of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 , amending this section] and by section 410 of division A of the Tax Relief and Health Care Act of 2006 [ Pub. L. 109–432 , amending this section] had never been enacted.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'If an exchange is described in paragraph (1) but has the effect of the distribution of a dividend (determined with the application of section 318(a)), then there shall be treated as a dividend to each distributee such an amount of the gain recognized under paragraph (1) as is not in excess of his ratable share of the undistributed earnings and profits of the corporation accumulated after  February 28, 1913 . The remainder, if any, of the gain recognized under paragraph (1) shall be treated as gain from the exchange of property.\nExcept as provided in paragraph (2), the term “other property” includes securities.\nThe term “other property” does not include securities to the extent that, under section 354 or 355, such securities would be permitted to be received without the recognition of gain.\nIf, in an exchange or distribution described in section 355, the principal amount of the securities in the controlled corporation which are received exceeds the principal amount of the securities in the distributing corporation which are surrendered, then, with respect to such securities received, the term “other property” means only the fair market value of such excess.\nExcept as provided in paragraph (2), the term “other property” includes nonqualified preferred stock (as defined in section 351(g)(2)).\nThe term “other property” does not include nonqualified preferred stock (as so defined) to the extent that, under section 354 or 355, such preferred stock would be permitted to be received without the recognition of gain.\nNotwithstanding any other provision of this section, to the extent that any of the other property (or money) is received in exchange for section 306 stock, an amount equal to the fair market value of such other property (or the amount of such money) shall be treated as a distribution of property to which section 301 applies.\n1997—Subsecs. (e) to (g).  Pub. L. 105–34  added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively.\n1990—Subsec. (d)(2)(B)(i).  Pub. L. 101–508  struck out “or (d)” after “subsection (c)”.\n1982—Subsec. (a)(2).  Pub. L. 97–248  inserted “(determined with the application of section 318(a))” after “distribution of a dividend”.\n1976—Subsec. (d)(2)(B)(i).  Pub. L. 94–253  substituted “subsection (c) or (d) thereof” for “subsection (c) thereof”.\nAmendment by  Pub. L. 105–34  applicable, with certain exceptions, to transactions after  June 8, 1997 , see  section 1014(f) of Pub. L. 105–34 , set out as a note under  section 351 of this title .\nPub. L. 97–248, title II, §\u202f227(c)(2) ,  Sept. 3, 1982 ,  96 Stat. 492 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to distributions after  August 31, 1982 , in taxable years ending after such date.”\nAmendment by  Pub. L. 94–253  applicable to taxable years ending after  Mar. 31, 1976 , see  section 2 of Pub. L. 94–253 , set out as a note under  section 354 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'In any suit or proceeding where the burden is on the taxpayer to prove such assumption is not to be treated as money received by the taxpayer, such burden shall not be considered as sustained unless the taxpayer sustains such burden by the clear preponderance of the evidence.\nSubparagraph (A) shall not apply to any liability to the extent that the incurrence of the liability resulted in the creation of, or an increase in, the basis of any property.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection and section 362(d). The Secretary may also prescribe regulations which provide that the manner in which a liability is treated as assumed under this subsection is applied, where appropriate, elsewhere in this title.\n2005—Subsec. (d)(1).  Pub. L. 109–135  inserted “section 361(b)(3),” after “section 358(h),”.\n2004—Subsec. (c)(1)(B).  Pub. L. 108–357  inserted “with respect to which stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under section 355” after “section 368(a)(1)(D)”.\n2000—Subsec. (d)(1).  Pub. L. 106–554  inserted “section 358(h),” after “section 358(d),” in introductory provisions.\n1999—Subsec. (a).  Pub. L. 106–36, §\u202f3001(d)(2) , struck out “or acquisition” after “assumption” in concluding provisions.\nSubsec. (a)(2).  Pub. L. 106–36, §\u202f3001(a)(1) , struck out “,\u2000or acquires from the taxpayer property subject to a liability” before comma at end.\nSubsec. (b).  Pub. L. 106–36, §\u202f3001(d)(2) , (3), struck out “or acquisition” after “assumption” wherever appearing and struck out “or acquired” after “liability assumed” in concluding provisions of par. (1).\nSubsec. (c)(1).  Pub. L. 106–36, §\u202f3001(d)(4) , struck out “,\u2000plus the amount of the liabilities to which the property is subject,” after “liabilities assumed” in concluding provisions.\nSubsec. (c)(3)(A).  Pub. L. 106–36, §\u202f3001(d)(5) , struck out “or to which the property transferred is subject” after “liabilities assumed” in concluding provisions.\nSubsec. (d).  Pub. L. 106–36, §\u202f3001(b)(1) , added subsec. (d).\n1990—Subsecs. (a), (b)(1).  Pub. L. 101–508, §\u202f11801(c)(8)(F)(i) , substituted “351 or 361” for “351, 361, 371, or 374” wherever appearing.\nSubsec. (c)(2).  Pub. L. 101–508, §\u202f11801(c)(8)(F)(ii) , inserted “or” at end of subpar. (A), redesignated subpar. (C) as (B), and struck out former subpar. (B) which read as follows: “to which section 371 or 374 applies, or”.\n1980—Subsec. (c)(2)(C).  Pub. L. 96–589  added subpar. (C).\nSubsec. (c)(3)(A).  Pub. L. 96–222  struck out requirement that only taxpayers who compute taxable income under the cash receipts and disbursements method of accounting are eligible to exclude certain liabilities in determining the amount of gain realized on a transfer to a controlled corporation and the requirement that the excluded liability must be an account payable.\n1978—Subsec. (c)(3).  Pub. L. 95–600  added par. (3).\n1956—Subsec. (a). Act  June 29, 1956 , §\u202f2(1), substituted “371, or 374” for “or 371” in two places.\nSubsec. (b). Act  June 29, 1956 , §\u202f2(1), substituted “371, or 374” for “or 371”.\nSubsec. (c)(2)(B). Act  June 29, 1956 , §\u202f2(2), substituted “371 or 374” for “371”.\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f898(c) ,  Oct. 22, 2004 ,  118 Stat. 1649 , provided that:  “The amendments made by this section [amending this section and  section 361 of this title ] shall apply to transfers of money or other property, or liabilities assumed, in connection with a reorganization occurring on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 106–554  applicable to assumptions of liability after  Oct. 18, 1999 , see section 1(a)(7) [title III, §\u202f309(d)] of  Pub. L. 106–554 , set out as a note under  section 358 of this title .\nAmendment by  Pub. L. 106–36  applicable to transfers after  Oct. 18, 1998 , see  section 3001(e) of Pub. L. 106–36 , set out as a note under  section 351 of this title .\nAmendment by  Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceedings commencing after  Dec. 31, 1980 , with exception permitting the debtor to make the amendment applicable to such cases or proceedings commencing after  Sept. 30, 1979 , see section 7(c)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title III, §\u202f365(c) ,  Nov. 6, 1978 ,  92 Stat. 2855 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 358 of this title ] shall apply to transfers occurring on or after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'The basis of any other property (except money) received by the taxpayer shall be its fair market value.\nUnder regulations prescribed by the Secretary, the basis determined under subsection (a)(1) shall be allocated among the properties permitted to be received without the recognition of gain or loss.\nIn the case of an exchange to which section 355 (or so much of section 356 as relates to section 355) applies, then in making the allocation under paragraph (1) of this subsection, there shall be taken into account not only the property so permitted to be received without the recognition of gain or loss, but also the stock or securities (if any) of the distributing corporation which are retained, and the allocation of basis shall be made among all such properties.\nFor purposes of this section, a distribution to which section 355 (or so much of section 356 as relates to section 355) applies shall be treated as an exchange, and for such purposes the stock and securities of the distributing corporation which are retained shall be treated as surrendered, and received back, in the exchange.\nWhere, as part of the consideration to the taxpayer, another party to the exchange assumed a liability of the taxpayer, such assumption shall, for purposes of this section, be treated as money received by the taxpayer on the exchange.\nParagraph (1) shall not apply to the amount of any liability excluded under section 357(c)(3).\nThis section shall not apply to property acquired by a corporation by the exchange of its stock or securities (or the stock or securities of a corporation which is in control of the acquiring corporation) as consideration in whole or in part for the transfer of the property to it.\nFor purposes of this section, the property permitted to be received under section 361 without the recognition of gain or loss shall be treated as consisting only of stock or securities in another corporation a party to the reorganization.\nFor purposes of this subsection, the term “liability” shall include any fixed or contingent obligation to make payment, without regard to whether the obligation is otherwise taken into account for purposes of this title.\n2002—Subsec. (h)(1)(A).  Pub. L. 107–147  amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is assumed in exchange for such property, and”.\n2000—Subsec. (h).  Pub. L. 106–554  added subsec. (h).\n1999—Subsec. (d)(1).  Pub. L. 106–36  struck out “or acquired from the taxpayer property subject to a liability” after “liability of the taxpayer” and “or acquisition (in the amount of the liability)” after “such assumption”.\n1997—Subsec. (g).  Pub. L. 105–34  added subsec. (g).\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f11801(c)(8)(G)(i) , substituted “or 361” for “361, 371(b), or 374”.\nSubsec. (b)(3).  Pub. L. 101–508, §\u202f11801(c)(8)(G)(ii) , struck out par. (3) “Certain exchanges involving ConRail” which read as follows: “To the extent provided in regulations prescribed by the Secretary in the case of an exchange to which section 354(d) (or so much of section 356 as relates to section 354(d)) or section 374(c) applies, for purposes of allocating basis under paragraph (1), stock of the Consolidated Rail Corporation and the certificate of value of the United States Railway Association which relates to such stock shall, so long as they are held by the same person, be treated as one property.”\n1988—Subsec. (f).  Pub. L. 100–647  added subsec. (f).\n1978—Subsec. (d).  Pub. L. 95–600  designated existing provisions as par. (1) and added par. (2).\n1976—Subsec. (a).  Pub. L. 94–253, §\u202f1(b)(1) , substituted “371(b), or 374” for “or 371(b)”.\nSubsec. (b)(1), (3).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 94–253, §\u202f1(b)(2) , added par. (3).\n1968—Subsec. (e).  Pub. L. 90–621  substituted exchange of stock and securities for issuance of stock or securities as the transaction involved and inserted parenthetical provisions making reference to stock or securities of a corporation which is in control of the acquiring corporation.\n1958—Subsec. (a)(1)(A)(iii).  Pub. L. 85–866  added cl. (iii).\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], to which such amendment relates, see  section 412(e) of Pub. L. 107–147 , set out as a note under  section 151 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f309(d)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–638, provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 357 of this title ] shall apply to assumptions of liability after  October 18, 1999 . \n \n “(2)   Rules .— The rules prescribed under subsection (c) [see Application of Comparable Rules to Partnerships and S Corporations note below] shall apply to assumptions of liability after  October 18, 1999 , or such later date as may be prescribed in such rules.”\nAmendment by  Pub. L. 106–36  applicable to transfers after  Oct. 18, 1998 , see  section 3001(e) of Pub. L. 106–36 , set out as a note under  section 351 of this title .\nAmendment by  Pub. L. 105–34  applicable, with certain exceptions, to distributions after  Apr. 16, 1997 , pursuant to a plan (or series of related transactions) which involves an acquisition described in  section 355(e)(2)(A)(ii) of this title  occurring after such date, see  section 1012(d) of Pub. L. 105–34 , set out as a note under  section 351 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 95–600  applicable to transfers occurring on or after  Nov. 6, 1978 , see  section 365(c) of Pub. L. 95–600 , set out as a note under  section 357 of this title .\nAmendment by  Pub. L. 94–253  applicable to taxable years ending after  Mar. 31, 1976 , see  section 2 of Pub. L. 94–253 , set out as a note under  section 354 of this title .\nPub. L. 90–621, §\u202f2(c) ,  Oct. 22, 1968 ,  82 Stat. 1311 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 362 of this title ] shall apply only in respect of plans of reorganization adopted after the date of the enactment of this Act [ Oct. 22, 1968 ].”\nPub. L. 85–866, §\u202f21(b) ,  Sept. 2, 1958 ,  72 Stat. 1620 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply as provided in section 393 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as if the clause (iii) added by such amendment had been included in such Code at the time of its enactment [ Aug. 16, 1954 ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nUnited States Railway Association abolished effective  Apr. 1, 1987 , all powers, duties, rights, and obligations of Association relating to Consolidated Rail Corporation under Regional Rail Reorganization Act of 1973 ( 45 U.S.C. 701  et seq.) transferred to Secretary of Transportation on  Jan. 1, 1987 , and any securities of Corporation held by Association transferred to Secretary of Transportation on  Oct. 21, 1986 , see  section 1341 of Title 45 , Railroads.\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f309(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–638, provided that:  \n “The Secretary of the Treasury or his delegate— \n “(1)  shall prescribe rules which provide appropriate adjustments under subchapter K of chapter 1 of the Internal Revenue Code of 1986 to prevent the acceleration or duplication of losses through the assumption of (or transfer of assets subject to) liabilities described in section 358(h)(3) of such Code (as added by subsection (a)) in transactions involving partnerships, and \n \n “(2)  may prescribe rules which provide appropriate adjustments under subchapter S of chapter 1 of such Code in transactions described in paragraph (1) involving S corporations rather than partnerships.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'No gain or loss shall be recognized to a corporation if such corporation is a party to a reorganization and exchanges property, in pursuance of the plan of reorganization, solely for stock or securities in another corporation a party to the reorganization.\nIf the corporation receiving such other property or money distributes it in pursuance of the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but\nIf the corporation receiving such other property or money does not distribute it in pursuance of the plan of reorganization, the gain, if any, to the corporation shall be recognized.\nIf subsection (a) would apply to an exchange but for the fact that the property received in exchange consists not only of property permitted by subsection (a) to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange shall be recognized.\nFor purposes of paragraph (1), any transfer of the other property or money received in the exchange by the corporation to its creditors in connection with the reorganization shall be treated as a distribution in pursuance of the plan of reorganization. The Secretary may prescribe such regulations as may be necessary to prevent avoidance of tax through abuse of the preceding sentence or subsection (c)(3). In the case of a reorganization described in section 368(a)(1)(D) with respect to which stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under section 355, this paragraph shall apply only to the extent that the sum of the money and the fair market value of other property transferred to such creditors does not exceed the adjusted bases of such assets transferred (reduced by the amount of the liabilities assumed (within the meaning of section 357(c))).\nExcept as provided in paragraph (2), no gain or loss shall be recognized to a corporation a party to a reorganization on the distribution to its shareholders of property in pursuance of the plan of reorganization.\nIf any property distributed in the distribution referred to in paragraph (1) is subject to a liability or the shareholder assumes a liability of the distributing corporation in connection with the distribution, then, for purposes of subparagraph (A), the fair market value of such property shall be treated as not less than the amount of such liability.\nFor purposes of this subsection, any transfer of qualified property by the corporation to its creditors in connection with the reorganization shall be treated as a distribution to its shareholders pursuant to the plan of reorganization.\nSection 311 and subpart B of part II of this subchapter shall not apply to any distribution referred to in paragraph (1).\nFor provision providing for recognition of gain in certain distributions, see section 355(d).\n2005—Subsec. (b)(3).  Pub. L. 109–135  inserted before period at end “(reduced by the amount of the liabilities assumed (within the meaning of section 357(c)))”.\n2004—Subsec. (b)(3).  Pub. L. 108–357  inserted at end “In the case of a reorganization described in section 368(a)(1)(D) with respect to which stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under section 355, this paragraph shall apply only to the extent that the sum of the money and the fair market value of other property transferred to such creditors does not exceed the adjusted bases of such assets transferred.”\n1990—Subsec. (c)(5).  Pub. L. 101–508  added par. (5).\n1988— Pub. L. 100–647  substituted “corporations; treatment of distributions” for “transferor corporations; other treatment of transferor corporation; etc.” in section catchline and amended text generally, revising content and structure of section.\n1986— Pub. L. 99–514  amended section generally. Prior to amendment, section related to whether gain or loss was recognized if corporation which was party to reorganization exchanged property, pursuant to plan of reorganization, for stock or securities in another corporation which was party to the reorganization or for other property or money.\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 108–357  applicable to transfers of money or other property, or liabilities assumed, in connection with a reorganization occurring on or after  Oct. 22, 2004 , see  section 898(c) of Pub. L. 108–357 , set out as a note under  section 357 of this title .\nAmendment by  Pub. L. 101–508  applicable to distributions after  Oct. 9, 1990 , but not applicable to any distribution pursuant to a written binding contract in effect on  Oct. 9, 1990 , and at all times thereafter before such distribution, see  section 11321(c) of Pub. L. 101–508 , set out as a note under  section 355 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(g)(4) ,  Oct. 22, 1986 ,  100 Stat. 2806 , provided that:  “The amendments made by this subsection [amending this section and  section 368 of this title ] shall apply to plans of reorganizations adopted after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'If property was acquired by a corporation in connection with a reorganization to which this part applies, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain recognized to the transferor on such transfer. This subsection shall not apply if the property acquired consists of stock or securities in a corporation a party to the reorganization, unless acquired by the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) as the consideration in whole or in part for the transfer.\nIn no event shall the basis of any property be increased under subsection (a) or (b) above the fair market value of such property (determined without regard to section 7701(g)) by reason of any gain recognized to the transferor as a result of the assumption of a liability.\nIf in any transaction described in subsection (a) or (b) there would (but for this subsection) be an importation of a net built-in loss, the basis of each property described in subparagraph (B) which is acquired in such transaction shall (notwithstanding subsections (a) and (b)) be its fair market value immediately after such transaction.\nFor purposes of subparagraph (A), there is an importation of a net built-in loss in a transaction if the transferee’s aggregate adjusted bases of property described in subparagraph (B) which is transferred in such transaction would (but for this paragraph) exceed the fair market value of such property immediately after such transaction.\nThe aggregate reduction in basis by reason of subparagraph (A) shall be allocated among the property so transferred in proportion to their respective built-in losses immediately before the transaction.\nAny election under clause (i) shall be made at such time and in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.\n2018—Subsec. (a).  Pub. L. 115–141  struck out comma after “acquired” in introductory provisions.\n2014—Subsec. (a).  Pub. L. 113–295  struck out “on or after  June 22, 1954 ” after “If property was acquired” in introductory provisions.\nSubsec. (c)(1)(A), (2)(A).  Pub. L. 113–295  struck out “,\u2000on or after  June 22, 1954 ,” after “by a corporation”.\n2005—Subsec. (e)(2)(C)(ii).  Pub. L. 109–135  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “An election under clause (i) shall be included with the return of tax for the taxable year in which the transaction occurred, shall be in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.”\n2004—Subsec. (e).  Pub. L. 108–357  added subsec. (e).\n1999—Subsec. (d).  Pub. L. 106–36  added subsec. (d).\n1986—Subsec. (c)(3).  Pub. L. 99–514  struck out par. (3) relating to exceptions for contributions in aid of construction.\n1976—Subsec. (c)(2)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f2120(b) , added par. (3).\n1968—Subsec. (b).  Pub. L. 90–621  substituted the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) for the issuance of stock or securities of the transferee as the transaction rendering the subsection applicable.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f836(c)(1) ,  Oct. 22, 2004 ,  118 Stat. 1596 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transactions after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 106–36  applicable to transfers after  Oct. 18, 1998 , see  section 3001(e) of Pub. L. 106–36 , set out as a note under  section 351 of this title .\nAmendment by  Pub. L. 99–514  applicable to amounts received after  Dec. 31, 1986 , in taxable years ending after such date, with certain exceptions and qualifications, see  section 824(c) of Pub. L. 99–514 , set out as a note under  section 118 of this title .\nAmendment by  section 2120(b) of Pub. L. 94–455  applicable to contributions made after  Jan. 31, 1976 , see  section 2120(c) of Pub. L. 94–455 , set out as a note under  section 118 of this title .\nAmendment by  Pub. L. 90–621  applicable only in respect of plans of reorganization adopted after  Oct. 22, 1968 , see  section 2(c) of Pub. L. 90–621 , set out as a note under  section 358 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 119 , related to cross reference for rules relating to effect on earnings and profits of transactions to which this part applies.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'If, in connection with any exchange described in section 332, 351, 354, 356, or 361, a United States person transfers property to a foreign corporation, such foreign corporation shall not, for purposes of determining the extent to which gain shall be recognized on such transfer, be considered to be a corporation.\nExcept to the extent provided in regulations, paragraph (1) shall not apply to the transfer of stock or securities of a foreign corporation which is a party to the exchange or a party to the reorganization.\nExcept as provided in regulations prescribed by the Secretary, a transfer by a United States person of an interest in a partnership to a foreign corporation in an exchange described in paragraph (1) shall, for purposes of this subsection, be treated as a transfer to such corporation of such person’s pro rata share of the assets of the partnership.\nParagraph (2) shall not apply in the case of an exchange described in subsection (a) or (b) of section 361. Subject to such basis adjustments and such other conditions as shall be provided in regulations, the preceding sentence shall not apply if the transferor corporation is controlled (within the meaning of section 368(c)) by 5 or fewer domestic corporations. For purposes of the preceding sentence, all members of the same affiliated group (within the meaning of section 1504) shall be treated as 1 corporation.\nParagraph (1) shall not apply to the transfer of any property which the Secretary, in order to carry out the purposes of this subsection, designates by regulation.\nIn the case of any exchange described in section 332, 351, 354, 355, 356, or 361 in connection with which there is no transfer of property described in subsection (a)(1), a foreign corporation shall be considered to be a corporation except to the extent provided in regulations prescribed by the Secretary which are necessary or appropriate to prevent the avoidance of Federal income taxes.\nFor purposes of this section, any distribution described in section 355 (or so much of section 356 as relates to section 355) shall be treated as an exchange whether or not it is an exchange.\nFor purposes of this chapter, any transfer of property to a foreign corporation as a contribution to the capital of such corporation by one or more persons who, immediately after the transfer, own (within the meaning of section 318) stock possessing at least 80 percent of the total combined voting power of all classes of stock of such corporation entitled to vote shall be treated as an exchange of such property for stock of the foreign corporation equal in value to the fair market value of the property transferred.\nFor purposes of this chapter, the earnings and profits of a foreign corporation to which the intangible property was transferred shall be reduced by the amount required to be included in the income of the transferor of the intangible property under subparagraph (A)(ii).\nFor purposes of this chapter, any amount included in gross income by reason of this subsection shall be treated as ordinary income. For purposes of applying section 904(d), any such amount shall be treated in the same manner as if such amount were a royalty.\nThe Secretary may provide by regulations that the rules of paragraph (2) also apply to the transfer of intangible property by a United States person to a partnership in circumstances consistent with the purposes of this subsection.\nIn the case of any distribution described in section 355 (or so much of section 356 as relates to section 355) by a domestic corporation to a person who is not a United States person, to the extent provided in regulations, gain shall be recognized under principles similar to the principles of this section.\nIn the case of any liquidation to which section 332 applies, except as provided in regulations, subsections (a) and (b)(1) of section 337 shall not apply where the 80-percent distributee (as defined in section 337(c)) is a foreign corporation.\nAnother  section 1131(b) of Pub. L. 105–34  enacted  section 684 of this title .\n2018—Subsec. (d)(1).  Pub. L. 115–141, §\u202f401(d)(1)(D)(viii)(II) , struck out “(within the meaning of section 936(h)(3)(B))” after “intangible property” in introductory provisions.\nSubsec. (d)(4).  Pub. L. 115–141, §\u202f401(d)(1)(D)(viii)(I) , added par. (4).\n2017—Subsec. (a)(3).  Pub. L. 115–97, §\u202f14102(e)(1) , redesignated par. (4) as (3) and struck out former par. (3) which related to exception for transfers of certain property used in the active conduct of a trade or business.\nSubsec. (a)(4).  Pub. L. 115–97, §\u202f14102(e)(1) , (2), redesignated par. (5) as (4) and substituted “Paragraph (2)” for “Paragraphs (2) and (3)” in heading and text. Former par. (4) redesignated (3).\nSubsec. (a)(5), (6).  Pub. L. 115–97, §\u202f14102(e)(1) , redesignated pars. (5) and (6) as (4) and (5), respectively.\nSubsec. (d)(2)(D).  Pub. L. 115–97, §\u202f14221(b)(1) , added subpar. (D).\n2004—Subsec. (d)(2)(C).  Pub. L. 108–357  inserted at end “For purposes of applying section 904(d), any such amount shall be treated in the same manner as if such amount were a royalty.”\n1999—Subsec. (a)(3)(B)(i).  Pub. L. 106–170  substituted “section 1221(a)” for “section 1221”.\n1997—Subsec. (d)(2)(C).  Pub. L. 105–34, §\u202f1131(b)(4) , amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “For purposes of this chapter, any amount included in gross income by reason of this subsection shall be treated as ordinary income from sources within the United States.”\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f1131(b)(5)(A) , added par. (3).\nSubsec. (f).  Pub. L. 105–34, §\u202f1131(b)(2) , added subsec. (f).\n1990—Subsec. (a)(5).  Pub. L. 101–508  substituted “subsection (a) or (b) of section 361” for “section 361”.\n1988—Subsec. (a)(5), (6).  Pub. L. 100–647  added par. (5) and redesignated former par. (5) as (6).\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1810(g)(4)(A) , struck out “355,” after “354,”.\nSubsec. (d)(2)(A).  Pub. L. 99–514, §\u202f1231(e)(2) , inserted at end “The amounts taken into account under clause (ii) shall be commensurate with the income attributable to the intangible.”\nSubsec. (e).  Pub. L. 99–514, §\u202f631(d)(1) , amended subsec. (e) generally. Prior to amendment, subsec. (e), treatment of distributions described in section 336 or 355, read as follows: “In the case of any distribution described in section 336 or 355 (or so much of section 356 as relates to section 355) by a domestic corporation which is made to a person who is not a United States person, to the extent provided in regulations, gain shall be recognized under principles similar to the principles of this section.”\nSubsec. (f).  Pub. L. 99–514, §\u202f1810(g)(1) , struck out subsec. (f) which related to transitional rules in the case of any exchanges beginning before  Jan. 1, 1978 .\nPub. L. 99–514, §\u202f1810(g)(4)(B) , in heading substituted “distributions described in section 336 or 355” for “liquidations under section 336”, and in text inserted “or 355 (or so much of section 356 as relates to section 355)”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f131(a) , amended subsec. (a) generally, revising provisions of pars. (1) and (2), and adding pars. (3) to (5).\nSubsec. (d).  Pub. L. 98–369, §\u202f131(b) , amended subsec. (d) generally, substituting provision providing special rules relating to transfers of intangibles for provision providing special rules relating to transfers of intangibles by possession corporation.\nSubsecs. (e), (f).  Pub. L. 98–369, §\u202f131(c) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1982—Subsecs. (d), (e).  Pub. L. 97–248  added subsec. (d) and redesignated former subsec. (d) as (e).\n1976— Pub. L. 94–455 , among other changes, inserted provisions permitting nonrecognition of gain if a request for a ruling that tax avoidance is not present is filed within 183 days after beginning of an exchange, relating to an organization, reorganization, and liquidation of a foreign corporation, in the case of outbound transfers, however, for all other transfers, regulations are to provide the extent that earnings are to be taken into account as dividends and provisions relating to Tax Court review of the tax avoidance rulings.\n1971—Subsec. (a).  Pub. L. 91–681  designated existing provisions as subsec. (a), and, as so designated, inserted provisions relating to instances of an exchange, described in subsec. (b). Provisions relating to distributions described in section 355 (or so much of section 356 as relates to section 355) were stricken and were transferred to subsec. (c).\nSubsec. (b).  Pub. L. 91–681  added subsec. (b).\nSubsec. (c).  Pub. L. 91–681  designated as subsec. (c) provisions relating to distribution described in section 355 (or so much of section 356 as relates to section 355).\nSubsec. (d).  Pub. L. 91–681  added subsec. (d).\nPub. L. 115–97, title I, §\u202f14102(e)(3) ,  Dec. 22, 2017 ,  131 Stat. 2195 , provided that:  “The amendments made by this subsection [amending this section] shall apply to transfers after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f14221(c)(1) ,  Dec. 22, 2017 ,  131 Stat. 2219 , provided that:  “The amendments made by this section [amending this section and sections 482 and 936 of this title] shall apply to transfers in taxable years beginning after  December 31, 2017 .”\nPub. L. 108–357, title IV, §\u202f406(b) ,  Oct. 22, 2004 ,  118 Stat. 1498 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts treated as received pursuant to section 367(d)(2) of the Internal Revenue Code of 1986 on or after  August 5, 1997 .”\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title XI, §\u202f1131(d) ,  Aug. 5, 1997 ,  111 Stat. 980 , provided that:  “The amendments made by this section [enacting  section 684 of this title , amending this section and sections 721, 814, 1035, and 6422 of this title, and repealing sections 1057, 1491, 1492, and 1494 of this title] shall take effect on the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nPub. L. 100–647, title I, §\u202f1006(e)(13)(B) ,  Nov. 10, 1988 ,  102 Stat. 3402 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to exchanges on or after  June 21, 1988 , except that such amendment shall not apply to any exchange pursuant to any reorganization for which a plan of reorganization was adopted before  June 21, 1988 .”\nAmendment by  section 631(d)(1) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nPub. L. 99–514, title XII, §\u202f1231(g) ,  Oct. 22, 1986 ,  100 Stat. 2563 , as amended by  Pub. L. 100–647, title I, §\u202f1012(n)(1) –(3),  Nov. 10, 1988 ,  102 Stat. 3514 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 482 and 936 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special rule for transfer of intangibles.— “(A)   In general .— The amendments made by subsection (e) [amending this section and  section 482 of this title ] shall apply to taxable years beginning after  December 31, 1986 , but only with respect to transfers after  November 16, 1985 , or licenses granted after such date (or before such date with respect to property not in existence or owned by the taxpayer on such date). In the case of any transfer (or license) which is not to a foreign person, the preceding sentence shall be applied by substituting ‘ August 16, 1986 ’ for ‘ November 16, 1985 ’. \n \n “(B)   Special rule for [former] section 936 .— For purposes of [former] section 936(h)(5)(C) of the Internal Revenue Code of 1986 the amendments made by subsection (e) shall apply to taxable years beginning after  December 31, 1986 , without regard to when the transfer (or license), if any, was made. \n \n \n “(3)   Subsection  (f).— The amendment made by subsection (f) [amending  section 936 of this title ] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(4)   Transitional rule .— In the case of a corporation— “(A)  with respect to which an election under [former] section 936 of the Internal Revenue Code of 1986 (relating to possessions tax credit) is in effect, \n \n “(B)  which produced an end-product form in Puerto Rico on or before  September 3, 1982 , \n \n “(C)  which began manufacturing a component of such product in Puerto Rico in its taxable year beginning in 1983, and \n \n “(D)  with respect to which a Puerto Rican tax exemption was granted on  June 27, 1983 , \n \n\n such corporation shall treat such component as a separate product for such taxable year for purposes of determining whether such corporation had a significant business presence in Puerto Rico with respect to such product and its income with respect to such product. \n \n “(5)   Transitional rule for increase in gross income test.— “(A)   In general .— If— “(i)  a corporation fails to meet the requirements of subparagraph (B) of [former] section 936(a)(2) of the Internal Revenue Code of 1986 (as amended by subsection (d)(1)) for any taxable year beginning in 1987 or 1988, \n \n “(ii)  such corporation would have met the requirements of such subparagraph (B) if such subparagraph had been applied without regard to the amendment made by subsection (d)(1), and \n \n “(iii)  75 percent or more of the gross income of such corporation for such taxable year (or, in the case of a taxable year beginning in 1988, for the period consisting of such taxable year and the preceding taxable year) was derived from the active conduct of a trade or business within a possession of the United States, such corporation shall nevertheless be treated as meeting the requirements of such subparagraph (B) for such taxable year if it elects to reduce the amount of the qualified possession source investment income for the taxable year by the amount of the shortfall determined under subparagraph (B) of this paragraph. \n \n \n “(B)   Determination of shortfall .— The shortfall determined under this subparagraph for any taxable year is an amount equal to the excess of— “(i)  75 percent of the gross income of the corporation for the 3-year period (or part thereof) referred to in [former] section 936(a)(2)(A) of such Code, over \n \n “(ii)  the amount of the gross income of such corporation for such period (or part thereof) which was derived from the active conduct of a trade or business within a possession of the United States. \n \n \n “(C)   Special rule .— Any income attributable to the investment of the amount not treated as qualified possession source investment income under subparagraph (A) shall not be treated as qualified possession source investment income for any taxable year.”\nAmendment by section 1810(g)(1), (4) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f131(g) ,  July 18, 1984 ,  98 Stat. 665 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [enacting  section 6038B of this title , amending this section and sections 1492, 1494, 6501, and 7482 of this title, and repealing  section 7477 of this title ] shall apply to transfers or exchanges after  December 31, 1984 , in taxable years ending after such date. \n \n “(2)   Special rule for certain transfers of intangibles.— “(A)   In general .— If, after  June 6, 1984 , and before  January 1, 1985 , a United States person transfers any intangible property (within the meaning of [former] section 936(h)(3)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) to a foreign corporation or in a transfer described in section 1491, such transfer shall be treated for purposes of sections 367(a), 1492(2), and 1494(b) of such Code as pursuant to a plan having as 1 of its principal purposes the avoidance of Federal income tax. \n \n “(B)   Waiver .— Subject to such terms and conditions as the Secretary of the Treasury or his delegate may prescribe, the Secretary may waive the application of subparagraph (A) with respect to any transfer. \n \n \n “(3)   Ruling request before  march 1, 1984 .— The amendments made by this section (and the provisions of paragraph (2) of this subsection) shall not apply to any transfer or exchange of property described in a request filed before  March 1, 1984 , under section 367(a), 1492(2), or 1494(b) of the Internal Revenue Code of 1986 (as in effect before such amendments).”\nAmendment by  Pub. L. 97–248  applicable to taxable years ending after  Aug. 14, 1982 , see  section 213(e)(3) of Pub. L. 97–248 , set out as a note under  section 246 of this title .\nPub. L. 94–455, title X, §\u202f1042(e) ,  Oct. 4, 1976 ,  90 Stat. 1639 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendments made by this section (other than by subsection (d)) [amending this section and sections 751 and 1248 of this title] shall apply to transfers beginning after  October 9, 1975 , and to sales, exchanges, and distributions taking place after such date. The amendments made by subsection (d) [enacting  section 7477 of this title  and amending sections 7476 and 7482 of this title] shall apply with respect to pleadings filed with the Tax Court after the date of the enactment of this Act [ Oct. 4, 1976 ] but only with respect to transfers beginning after  October 9, 1975 . \n \n “(2)  In the case of any exchange described in section 367 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on  December 31, 1974 ) in any taxable year beginning after  December 31, 1962 , and before the date of the enactment of this Act [ Oct. 4, 1976 ], which does not involve the transfer of property to or from a United States person, a taxpayer shall have for purposes of such section until 183 days after the date of the enactment of this Act [ Oct. 4, 1976 ] to file a request with the Secretary of the Treasury or his delegate seeking to establish to the satisfaction of the Secretary of the Treasury or his delegate that such exchange was not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes and that for purposes of such section a foreign corporation is to be treated as a foreign corporation.”\nPub. L. 91–681, §\u202f1(c) ,  Jan. 12, 1971 ,  84 Stat. 2066 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and  section 1492 of this title ] shall apply to transfers made after  December 31, 1967 ; except that sections 367(d) and 1492 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this section) shall apply only with respect to transfers made after  December 31, 1970 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 100–647, title I, §\u202f1006(e)(13)(C) ,  Nov. 10, 1988 ,  102 Stat. 3402 , provided that:  “Section 367(e)(2) of the 1986 Code (as amended by the Reform Act [ Pub. L. 99–514 ]) shall not apply in the case of any corporation completely liquidated before  June 10, 1987 , into a corporation organized in a country which has an income tax treaty with the United States.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATE ORGANIZATIONS AND REORGANIZATIONS'},
  'content': 'If a transaction is described in both paragraph (1)(C) and paragraph (1)(D), then, for purposes of this subchapter (other than for purposes of subparagraph (C)), such transaction shall be treated as described only in paragraph (1)(D).\nA transaction otherwise qualifying under paragraph (1)(A), (1)(B), or (1)(C) shall not be disqualified by reason of the fact that part or all of the assets or stock which were acquired in the transaction are transferred to a corporation controlled by the corporation acquiring such assets or stock. A similar rule shall apply to a transaction otherwise qualifying under paragraph (1)(G) where the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets.\nA transaction shall fail to meet the requirements of paragraph (1)(C) unless the acquired corporation distributes the stock, securities, and other properties it receives, as well as its other properties, in pursuance of the plan of reorganization. For purposes of the preceding sentence, if the acquired corporation is liquidated pursuant to the plan of reorganization, any distribution to its creditors in connection with such liquidation shall be treated as pursuant to the plan of reorganization.\nThe Secretary may waive the application of clause (i) to any transaction subject to any conditions the Secretary may prescribe.\nFor purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.\nFor purposes of part I (other than section 304), part II, this part, and part V, the term “control” means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation.\nThe Investment Company Act of 1940, referred to in subsec. (a)(2)(F)(vii), is title I of  act Aug. 22, 1940, ch. 686 ,  54 Stat. 789 , which is classified generally to subchapter I (§\u202f80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 80a–51 of Title 15  and Tables.\n2018—Subsec. (a)(2)(F)(vii).  Pub. L. 115–141  substituted “( 15 U.S.C. 80a–2(a)(36) )” for “( 15 U.S.C. 80a–2(36) )”.\n1999—Subsec. (a)(1)(C).  Pub. L. 106–36, §\u202f3001(a)(3)(A) , struck out “,\u2000or the fact that property acquired is subject to a liability,” before “shall be disregarded”.\nSubsec. (a)(2)(B).  Pub. L. 106–36, §\u202f3001(a)(3)(B) , which directed amendment of concluding provisions by striking out “,\u2000and the amount of any liability to which any property acquired from the acquiring corporation is subject,”, was executed by striking out “,\u2000and the amount of any liability to which any property acquired by the acquiring corporation is subject,” after “acquiring corporation”, to reflect the probable intent of Congress.\n1998—Subsec. (a)(2)(H)(ii).  Pub. L. 105–277  inserted “,\u2000or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”.\nPub. L. 105–206  amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “in the case of a transaction with respect to which the requirements of section 355 are met, the shareholders described in paragraph (1)(D) shall be treated as having control of the corporation to which the assets are transferred if such shareholders own (immediately after the distribution) stock possessing—\n“(I) more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and\n“(II) more than 50 percent of the total value of shares of all classes of stock of such corporation.”\n1997—Subsec. (a)(2)(H).  Pub. L. 105–34  amended heading and text of subpar. (H) generally. Prior to amendment, text read as follows: “In the case of any transaction with respect to which the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction qualifies under subparagraph (D) of paragraph (1), the term ‘control’ has the meaning given to such term by section 304(c).”\n1989—Subsec. (a)(3)(D).  Pub. L. 101–73, §\u202f1401(b)(1) , repealed amendment made by  Pub. L. 99–514, §\u202f904(a) , see 1986 Amendment note below.\nPub. L. 101–73, §\u202f1401(a)(1) , inserted “receivership” in heading and amended text generally, changing the structure of the subparagraph from one consisting of five clauses designated (i) to (v) to one consisting of a single undesignated subparagraph.\n1988—Subsec. (a)(2)(F)(ii).  Pub. L. 100–647, §\u202f1018(q)(5) , struck out “(other than stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause (ii))” after “any one issuer” and after “or fewer issuers” and inserted at end “For purposes of this clause, a person holding stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause shall, except as provided in regulations, be treated as holding its proportionate share of the assets held by such company or trust.”\nSubsec. (a)(3)(D)(iv), (v).  Pub. L. 100–647, §\u202f4012(b)(1)(A) , amended subpar. (D), as in effect before the amendment made by  section 904(a) of Pub. L. 99–514 , by adding cls. (iv) and (v).\n1986—Subsec. (a)(2)(A).  Pub. L. 99–514, §\u202f1804(h)(3) , inserted “(other than for purposes of subparagraph (C))” after “subchapter”.\nSubsec. (a)(2)(F)(ii).  Pub. L. 99–514, §\u202f1879 ( l )(1), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “A corporation meets the requirements of this clause if not more than 25 percent of the value of its total assets is invested in the stock and securities of any one issuer, and not more than 50 percent of the value of its total assets is invested in the stock and securities of 5 or fewer issuers. For purposes of this clause, all members of a controlled group of corporations (within the meaning of section 1563(a)) shall be treated as one issuer.”\nSubsec. (a)(2)(G)(i).  Pub. L. 99–514, §\u202f1804(g)(2) , inserted “For purposes of the preceding sentence, if the acquired corporation is liquidated pursuant to the plan of reorganization, any distribution to its creditors in connection with such liquidation shall be treated as pursuant to the plan of reorganization.”\nSubsec. (a)(2)(H).  Pub. L. 99–514, §\u202f1804(h)(2) , added subpar. (H).\nSubsec. (a)(3)(D).  Pub. L. 99–514, §\u202f904(a) , (c)(1), as amended by  Pub. L. 100–647, §\u202f4012(a)(1) , which (applicable to acquisitions after  Dec. 31, 1989 , in taxable years ending after such date) directed amendment of subpar. (D) to read “(D)  Agency receivership proceedings which involve financial institutions .—For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.”, was repealed by  Pub. L. 101–73, §\u202f1401(b)(1) , (c)(4), eff.  Oct. 22, 1986 , and I.R.C. of 1986 applicable as if the amendments made by such section had not been enacted.\nSubsec. (c).  Pub. L. 99–514, §\u202f1804(h)(1) , in amending subsec. (c) generally, struck out par. (1) designation and struck out par. (2) defining term “control” as having meaning given to such term by section 304(c) in case of any transaction with respect to which requirements of subpars. (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction is described in subpar. (D) of subsec. (a)(1).\nPub. L. 99–514, §\u202f621(e)(1) , repealed amendment by  Pub. L. 94–455, §\u202f806(f)(1) . See 1976 Amendment note below.\n1984—Subsec. (a)(2)(F)(viii).  Pub. L. 98–369, §\u202f174(b)(5)(D) , struck out cl. (viii) which provided that in applying paragraph (3) of section 267(b) in respect of any transaction to which this subparagraph applies, the reference to a personal holding company in such paragraph (3) be treated as including a reference to an investment company and the determination of whether a corporation is an investment company be made as of the time immediately before the transaction instead of with respect to the taxable year referred to in such paragraph (3).\nSubsec. (a)(2)(G).  Pub. L. 98–369, §\u202f63(a) , added subpar. (G).\nSubsec. (c).  Pub. L. 98–369, §\u202f64(a) , designated existing provisions as par. (1) and added par. (2).\n1983—Subsec. (a)(2)(C).  Pub. L. 97–448, §\u202f304(b) , struck out “or stock” after “acquisition of the assets”.\nSubsec. (a)(3)(B)(i).  Pub. L. 97–448, §\u202f304(c) , substituted “any party to the reorganization” for “such corporation”.\n1982—Subsec. (a)(1)(F).  Pub. L. 97–248  inserted “of one corporation” after “place of organization”.\n1981—Subsec. (a)(3)(D).  Pub. L. 97–34  substituted “Agency proceedings” for “Agency receivership proceedings” in heading, incorporated existing provisions in text designated cl. (i), inserted in cl. (i)(II) definition for term “title 11 or similar case”, and added cls. (ii) and (iii).\n1980—Subsec. (a)(1)(G).  Pub. L. 96–589, §\u202f4(a) , (h)(3), added subpar. (G).\nSubsec. (a)(2)(C).  Pub. L. 96–589, §\u202f4(c) , inserted provision that a similar rule would apply to a transaction otherwise qualifying under par. (1)(G), where the requirements of subpars. (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets or stock.\nSubsec. (a)(2)(D).  Pub. L. 96–589, §\u202f4(d) , among other changes, inserted reference to par. (1)(G).\nSubsec. (a)(3).  Pub. L. 96–589, §\u202f4(b) , added par. (3).\nSubsec. (b).  Pub. L. 96–589, §\u202f4(h)(4) , substituted “paragraph (1)(A), (1)(B), (1)(C), or (1)(G) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) or (1)(G) of subsection (a) by reason of paragraph (2)(D)” for “paragraph (1)(A), (1)(B), or (1)(C) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D)”, respectively.\n1978—Subsec. (a)(2)(F).  Pub. L. 95–600  substituted in cl. (iii), first sentence, “50 percent or more” and “80 percent or more” for “more than 50 percent” and “more than 80 percent”; substituted in cl. (vi), first sentence, “does not meet the requirements” for “is not diversified within the meaning”; struck from cl. (vi), second sentence, “(hereafter referred to as the (‘actual acquisition’)” after “section 368(a)(1)(B)” and “and security holders” after “the shareholders” and substituted “stock in such company for stock having a fair market value equal to the fair market value of their stock of such investment company immediately after the exchange” for “stock in such investment company for a percentage of the value of the total outstanding stock of the other corporation equal to the percentage of the value of the total outstanding stock of such investment company which such shareholders own immediately after the actual acquisition”; and added cls. (vii) and (viii).\n1976—Subsec. (a)(2)(F).  Pub. L. 94–455, §\u202f2131(a) , added subpar. (F).\nSubsec. (c).  Pub. L. 94–455, §\u202f806(f)(1) , which substituted “this part, and Part V,” for “and this part,” was repealed by  Pub. L. 99–514, §\u202f621(e)(1) . See Effective Date of 1986 and 1976 Amendment notes below.\n1971—Subsec. (a)(2)(E).  Pub. L. 91–693, §\u202f1(a) , added subpar. (E).\nSubsec. (b).  Pub. L. 91–693, §\u202f1(b) , defined “party to a reorganization” in the case of a reorganization qualifying under subsection (a)(1)(A) by reason of subsection (a)(2)(E).\n1968—Subsec. (a)(2)(D).  Pub. L. 90–621, §\u202f1(a) , added subpar. (D).\nSubsec. (b).  Pub. L. 90–621, §\u202f1(b) , inserted reference to the inclusion of the controlling corporation in term “a party to a reorganization” in reorganizations qualifying under paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D) of subsection (a).\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f218(a) , (b)(1), inserted “(or in exchange solely for all or a part of the voting stock of a corporation which is in control of the acquiring corporation)” in par. (1)(B), and in par. (2)(C), inserted references to par. (1)(B), and substituted “assets or stock” for “assets” wherever appearing.\nSubsec. (b).  Pub. L. 88–272, §\u202f218(b)(2) , inserted references to par. (1)(B) wherever appearing.\nAmendment by  Pub. L. 106–36  applicable to transfers after  Oct. 18, 1998 , see  section 3001(e) of Pub. L. 106–36 , set out as a note under  section 351 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable, with certain exceptions, to transfers after  Aug. 5, 1997 , see  section 1012(d) of Pub. L. 105–34 , set out as a note under  section 351 of this title .\nRepeal of amendment by  section 904(a) of Pub. L. 99–514  effective  Oct. 22, 1986 , and I.R.C. of 1986 applicable as if the amendment had not been enacted, see  section 1401(b)(1) of Pub. L. 101–73 , set out as a Repeal of Provisions Relating to Repeal of Special Reorganization Rules for Financial Institutions note set out under  section 597 of this title , and  section 1401(c)(4) of Pub. L. 101–73 , set out as Effective Date of 1989 Amendment note under  section 597 of this title .\nPub. L. 101–73, title XIV, §\u202f1401(c)(1) ,  Aug. 9, 1989 ,  103 Stat. 550 , provided that:  “The amendment made by subsection (a)(1) [amending this section] shall apply to acquisitions on or after  May 10, 1989 .”\nAmendment by  section 1018(q)(5) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4012(b)(1)(C)(i) ,  Nov. 10, 1988 ,  102 Stat. 3657 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to acquisitions after the date of the enactment of this Act [ Nov. 10, 1988 ] and before  January 1, 1990 .”\nRepeal of amendment by  section 806(f)(1) of Pub. L. 94–455  effective  Jan. 1, 1986 , with certain exceptions, see  section 621(f)(2) of Pub. L. 99–514 , set out as a note under  section 382 of this title .\nPub. L. 99–514, title IX, §\u202f904(c)(1) ,  Oct. 22, 1986 ,  100 Stat. 2385 , as amended by  Pub. L. 100–647, title IV, §\u202f4012(a)(1) ,  Nov. 10, 1988 ,  102 Stat. 3656 , which provided that the amendments made by subsection (a), amending this section, were to apply to acquisitions after  Dec. 31, 1989 , in taxable years ending after such date, was repealed by  Pub. L. 101–73, title XIV, §\u202f1401(b)(1) ,  Aug. 9, 1989 ,  103 Stat. 549 .\nAmendment by  section 1804(g)(2) of Pub. L. 99–514  applicable to plans of reorganizations adopted after  Oct. 22, 1986 , see  section 1804(g)(4) of Pub. L. 99–514 , set out as a note under  section 361 of this title .\nAmendment by  section 1804(h) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879 ( l )(2),  Oct. 22, 1986 ,  100 Stat. 2910 , provided that:  “The amendment made by this subsection [amending this section] shall apply as if included in section 2131 of the Tax Reform Act of 1976 [ Pub. L. 94–455 ].”\nAmendment by  section 63(a) of Pub. L. 98–369  applicable to transactions pursuant to plans adopted after  July 18, 1984 , see  section 63(c) of Pub. L. 98–369 , set out as a note under  section 312 of this title .\nPub. L. 98–369, div. A, title I, §\u202f64(b) ,  July 18, 1984 ,  98 Stat. 584 , provided that:  “The amendments made by this section [amending this section] shall apply to transactions pursuant to plans adopted after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 174(b)(5)(D) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1983 , in taxable years ending after that date, see  section 174(c)(2)(A) of Pub. L. 98–369 , set out as a note under  section 267 of this title .\nPub. L. 97–448, title III, §\u202f311(b)(2) ,  Jan. 12, 1983 ,  96 Stat. 2411 , provided that:  “The amendment made by subsection (b) of section 304 [amending this section] shall take effect as if included in the amendments made by section 4 of such Act [ Pub. L. 96–589 , the Bankruptcy Tax Act of 1980, see 1980 Amendment notes above].”\nPub. L. 97–248, title II, §\u202f225(b) ,  Sept. 3, 1982 ,  96 Stat. 490 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply with respect to transactions occurring after  August 31, 1982 . \n \n “(2)   Plans adopted on or before  august 31, 1982 .— The amendment made by subsection (a) shall not apply with respect to plans of reorganization adopted on or before  August 31, 1982 , but only if the transaction occurs before  January 1, 1983 .”\nPub. L. 97–34, title II, §\u202f246(a) ,  Aug. 13, 1981 ,  95 Stat. 256 , provided that:  “The amendment made by sections 241 and 242 [amending this section and  section 382 of this title ] shall apply to any transfer made on or after  January 1, 1981 .”\nAmendment by  Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceedings commencing after  Dec. 31, 1980 , with exception permitting the debtor to make the amendment applicable to such cases or proceedings commencing after  Sept. 30, 1979 , see section 7(c)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nPub. L. 95–600, title VII, §\u202f701(j)(2) ,  Nov. 6, 1978 ,  92 Stat. 2906 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  Except as provided in subparagraphs (B) and (C), the amendments made by paragraph (1) [amending this section] shall apply as if included in section 368(a)(2)(F) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as added by section 2131(a) of the Tax Reform Act of 1976 [ Pub. L. 94–455, title XX, §\u202f2131(a) ,  Oct. 4, 1976 ,  90 Stat. 1922 ]. \n \n “(B)  Clause (viii) of section 368(a)(2)(F) of the Internal Revenue Code of 1986 (as added by paragraph (1)) shall apply only with respect to losses sustained after  September 26, 1977 . \n \n “(C)  Clause (vii) of section 368(a)(2)(F) of the Internal Revenue Code of 1986 (as added by paragraph (1)) shall apply only with respect to transfers made after  September 26, 1977 .”\nPub. L. 94–455, title XXI, §\u202f2131(f)(1) , (2),  Oct. 4, 1976 ,  90 Stat. 1924 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to transfers made after  February 17, 1976 , in taxable years ending after such date. \n \n “(2)  The amendment made by subsection (a) shall not apply to transfers made in accordance with a ruling issued by the Internal Revenue Service before  February 18, 1976 , holding that a proposed transaction would be a reorganization described in paragraph (1) of section 368(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nFor effective date of amendment by  section 806(f)(1) of Pub. L. 94–455 , see section 806(g)(2), (3) of  Pub. L. 94–455 , formerly set out as a note under  section 382 of this title .\nPub. L. 91–693, §\u202f1(c) ,  Jan. 12, 1971 ,  84 Stat. 2077 , provided that:  “The amendments made by this section [amending this section] shall apply to statutory mergers occurring after  December 31, 1970 .”\nPub. L. 90–621, §\u202f1(c) ,  Oct. 22, 1968 ,  82 Stat. 1311 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to statutory mergers occurring after the date of the enactment of this Act [ Oct. 22, 1968 ].”\nPub. L. 88–272, title II, §\u202f218(c) ,  Feb. 26, 1964 ,  78 Stat. 57 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to transactions after  December 31, 1963 , in taxable years ending after such date.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 370, added  Pub. L. 96–589, §\u202f4(f) ,  Dec. 24, 1980 ,  94 Stat. 3404 , related to termination of part.\nSection 371, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 121 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1901(a)(50) ,  90 Stat. 1773 , related to reorganization in certain receivership and bankruptcy proceedings.\nSection 372, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 122 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f95(a) ,  72 Stat. 1671 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX , §§\u202f1901(a)(51), (b)(14)(A), 1906(b)(13)(A),  90 Stat. 1773 , 1795, 1834, related to basis in connection with certain receivership and bankruptcy proceedings.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 123 ;  June 29, 1956, ch. 463, §\u202f3 ,  70 Stat. 403 , related to loss not recognized in certain railroad reorganizations.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, added  June 29, 1956, ch. 463, §\u202f1 ,  70 Stat. 402 ; amended  Mar. 31, 1976 ,  Pub. L. 94–253, §\u202f1(a) , (d),  90 Stat. 295 , 296;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1901(a)(53) , (b)(10)(A), (14)(B), (C),  90 Stat. 1773 , 1795, 1796;  Nov. 6, 1978 ,  Pub. L. 95–600, title III, §\u202f369(a) ,  92 Stat. 2857 ;  Apr. 1, 1980 ,  Pub. L. 96–222, title I, §\u202f103(a)(14) ,  94 Stat. 214 ;  Oct. 22, 1986 ,  Pub. L. 99–514, title XVIII, §\u202f1899A(9) ,  100 Stat. 2958 , related to nonrecognition of gain or loss in certain railroad reorganizations.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CARRYOVERS'},
  'content': 'The acquiring corporation shall use the method of accounting used by the distributor or transferor corporation on the date of distribution or transfer unless different methods were used by several distributor or transferor corporations or by a distributor or transferor corporation and the acquiring corporation. If different methods were used, the acquiring corporation shall use the method or combination of methods of computing taxable income adopted pursuant to regulations prescribed by the Secretary.\nIn any case in which inventories are received by the acquiring corporation, such inventories shall be taken by such corporation (in determining its income) on the same basis on which such inventories were taken by the distributor or transferor corporation, unless different methods were used by several distributor or transferor corporations or by a distributor or transferor corporation and the acquiring corporation. If different methods were used, the acquiring corporation shall use the method or combination of methods of taking inventory adopted pursuant to regulations prescribed by the Secretary.\nThe acquiring corporation shall be treated as the distributor or transferor corporation for purposes of computing the depreciation allowance under sections 167 and 168 on property acquired in a distribution or transfer with respect to so much of the basis in the hands of the acquiring corporation as does not exceed the adjusted basis in the hands of the distributor or transferor corporation.\nIf the acquiring corporation acquires installment obligations (the income from which the distributor or transferor corporation reports on the installment basis under section 453) the acquiring corporation shall, for purposes of section 453, be treated as if it were the distributor or transferor corporation.\nIf the acquiring corporation assumes liability for bonds of the distributor or transferor corporation issued at a discount or premium, the acquiring corporation shall be treated as the distributor or transferor corporation after the date of distribution or transfer for purposes of determining the amount of amortization allowable or includible with respect to such discount or premium.\nThe acquiring corporation shall be entitled to deduct, as if it were the distributor or transferor corporation, expenses deferred under section 616 (relating to certain development expenditures) if the distributor or transferor corporation has so elected.\nThe acquiring corporation shall be considered to be the distributor or transferor corporation after the date of distribution or transfer for the purpose of determining the amounts deductible under section 404 with respect to pension plans, employees’ annuity plans, and stock bonus and profit-sharing plans.\nIf the acquiring corporation is entitled to the recovery of any amounts previously deducted by (or allowable as credits to) the distributor or transferor corporation, the acquiring corporation shall succeed to the treatment under section 111 which would apply to such amounts in the hands of the distributor or transferor corporation.\nThe acquiring corporation shall be treated as the distributor or transferor corporation after the date of distribution or transfer for purposes of applying section 1033.\nThe dividend carryover (described in section 564) to taxable years ending after the date of distribution or transfer.\nIf the acquiring corporation pays a deficiency dividend (as defined in section 547(d)) with respect to the distributor or transferor corporation, such distributor or transferor corporation shall, with respect to such payments, be entitled to the deficiency dividend deduction provided in section 547.\nThe acquiring corporation shall be considered to be the distributor or transferor corporation for the purpose of determining the applicability of section 613(c)(3) (relating to extraction of ores or minerals from the ground).\nContributions made in the taxable year ending on the date of distribution or transfer and the 4 prior taxable years by the distributor or transferor corporation in excess of the amount deductible under section 170(b)(2) for such taxable years shall be deductible by the acquiring corporation for its taxable years which begin after the date of distribution or transfer, subject to the limitations imposed in section 170(b)(2). In applying the preceding sentence, each taxable year of the distributor or transferor corporation beginning on or before the date of distribution or transfer shall be treated as a prior taxable year with reference to the acquiring corporation’s taxable years beginning after such date.\nThe carryover of disallowed business interest described in section 163(j)(2) to taxable years ending after the date of distribution or transfer.\nIf the acquiring corporation is an insurance company taxable under subchapter L, there shall be taken into account (to the extent proper to carry out the purposes of this section and of subchapter L, and under such regulations as may be prescribed by the Secretary) the items required to be taken into account for purposes of subchapter L in respect of the distributor or transferor corporation.\nIf the acquiring corporation pays a deficiency dividend (as defined in section 860(f)) with respect to the distributor or transferor corporation, such distributor or transferor corporation shall, with respect to such payments, be entitled to the deficiency dividend deduction provided in section 860.\nThe acquiring corporation shall take into account (to the extent proper to carry out the purposes of this section and section 38, and under such regulations as may be prescribed by the Secretary) the items required to be taken into account for purposes of section 38 in respect of the distributor or transferor corporation.\nThe acquiring corporation shall take into account (to the extent proper to carry out the purposes of this section and section 53, and under such regulations as may be prescribed by the Secretary) the items required to be taken into account for purposes of section 53 in respect of the distributor or transferor corporation.\nThe acquiring corporation shall take into account (to the extent proper to carry out the purposes of this section and subchapter U, and under such regulations as may be prescribed by the Secretary) the items required to be taken into account for purposes of subchapter U in respect of the distributor or transferor corporation.\nSection 172(b)(2)(B), referred to in subsec. (c)(1)(C)(v), (vi), was amended by  Pub. L. 115–97, title I, §\u202f13302(a)(2) ,  Dec. 22, 2017 ,  131 Stat. 2121 , and, as so amended, no longer relates to net operating loss deductions. Provisions similar to those contained in former subpar. (B) of  section 172(b)(2) of this title  are now contained in subpar. (A) of  section 172(b)(2) of this title .\n2018—Subsec. (c)(16).  Pub. L. 115–141 , in concluding provisions, struck out “A corporation which would have been an acquiring corporation under this section if the date of distribution or transfer had occurred on or after the effective date of the provisions of this subchapter applicable to a liquidation or reorganization, as the case may be, shall be entitled, even though the date of distribution or transfer occurred before such effective date, to apply this paragraph with respect to amounts paid or accrued in taxable years beginning after  December 31, 1953 , on account of such obligations of the distributor or transferor corporation.” before “This paragraph”.\n2017—Subsec. (c)(20).  Pub. L. 115–97, §\u202f13301(b)(1) , added par. (20).\nSubsec. (d).  Pub. L. 115–97, §\u202f13511(b)(3) , struck out subsec. (d). Text read as follows: “For application of this part to operations loss carrybacks and carryovers of life insurance companies, see section 810.”\n1996—Subsec. (c)(26), (27).  Pub. L. 104–188  amended directory language of  Pub. L. 101–239 . See 1989 Amendment note below.\n1993—Subsec. (c)(26).  Pub. L. 103–66  added par. (26).\n1990—Subsec. (c)(6).  Pub. L. 101–508, §\u202f11812(b)(6)(A) , substituted “sections 167 and 168” for “subsections (b), (j), and (k) of section 167”.\nSubsec. (c)(15).  Pub. L. 101–508, §\u202f11801(c)(10)(A) , struck out par. (15) “Indebtedness of certain personal holding companies” which read as follows: “The acquiring corporation shall be considered to be the distributor or transferor corporation for the purpose of determining the applicability of subsection (c) of section 545, relating to deduction with respect to payment of certain indebtedness.”\nSubsec. (c)(24) to (26).  Pub. L. 101–508, §\u202f11812(b)(6)(B) , redesignated pars. (25) and (26) as (24) and (25), respectively, and struck out former par. (24) “Method of computing depreciation deduction” which read as follows: “The acquiring corporation shall be treated as the distributor or transferor corporation for purposes of computing the deduction allowable under section 168(a) on property acquired in a distribution or transfer with respect to so much of the basis in the hands of the acquiring corporation as does not exceed the adjusted basis in the hands of the distributor or transferor corporation.”\n1989—Subsec. (c)(26), (27).  Pub. L. 101–239 , as amended by  Pub. L. 104–188 , redesignated par. (27) as (26).\n1988—Subsec. (c)(24).  Pub. L. 100–647  substituted “depreciation deduction” for “recovery allowance for recovery property” in heading.\n1987—Subsec. (c)(8).  Pub. L. 100–203  struck out “or 453A” after “section 453” in two places.\n1986—Subsec. (c)(10).  Pub. L. 99–514, §\u202f411(b)(2)(C)(iii) , struck out last sentence which read: “For the purpose of applying the limitation provided in section 617(h), if, for any taxable year, the distributor or transferor corporation was allowed a deduction under section 617(a), the acquiring corporation shall be deemed to have been allowed such deduction.”\nSubsec. (c)(12).  Pub. L. 99–514, §\u202f1812(a)(3) , amended par. (12) generally. Prior to amendment, par. (12), recovery of bad debts, prior taxes, or delinquency amounts, read as follows: “If the acquiring corporation is entitled to the recovery of bad debts, prior taxes, or delinquency amounts previously deducted or credited by the distributor or transferor corporation, the acquiring corporation shall include in its income such amounts as would have been includible by the distributor or transferor corporation in accordance with section 111 (relating to the recovery of bad debts, prior taxes, and delinquency amounts).”\nSubsec. (c)(25), (26).  Pub. L. 99–514, §\u202f231(d)(3)(F) , redesignated par. (26) as (25). Former par. (25), relating to credit under section 30, was struck out.\nSubsec. (c)(27).  Pub. L. 99–514, §\u202f701(e)(1) , added par. (27).\n1984—Subsec. (c)(23).  Pub. L. 98–369, §\u202f474(r)(11)(B) , redesignated par. (25) as (23). Former par. (23), relating to credit under section 38 for investment in certain depreciable property, was struck out.\nSubsec. (c)(24).  Pub. L. 98–369, §\u202f474(r)(11)(B) , redesignated par. (28) as (24). Former par. (24), relating to credit under section 40 for work incentive program expenses, was struck out.\nSubsec. (c)(25).  Pub. L. 98–369, §\u202f474(r)(11)(B) , (C), redesignated par. (29) as (25), and substituted “30” for “44F” wherever appearing in heading and text. Former par. (25) redesignated (23).\nSubsec. (c)(26).  Pub. L. 98–369, §\u202f474(r)(11)(D) , added par. (26). Former par. (26), relating to credit under section 44B for employment of certain new employees, was struck out.\nSubsec. (c)(27).  Pub. L. 98–369, §\u202f474(r)(11)(A) , struck out par. (27) relating to credit under section 44E for alcohol used as fuel.\nSubsec. (c)(28), (29).  Pub. L. 98–369, §\u202f474(r)(11)(B) , redesignated pars. (28) and (29) as (24) and (25), respectively.\nSubsec. (c)(30).  Pub. L. 98–369, §\u202f474(r)(11)(A) , struck out par. (30) relating to credit under section 44G.\nSubsec. (d).  Pub. L. 98–369, §\u202f211(b)(4) , substituted “section 810” for “section 812(f)”.\n1983—Subsec. (c)(28), (29).  Pub. L. 97–448, §\u202f102(h)(3) , redesignated par. (28), relating to credit under section 44F, as (29). Former par. (29) redesignated (30).\nSubsec. (c)(30).  Pub. L. 97–448, §\u202f103(g)(2)(F) , redesignated former par. (29), relating to credit under section 44G, as (30).\n1982—Subsec. (a)(1).  Pub. L. 97–248  struck out “,\u2000except in a case in which the basis of the assets distributed is determined under section 334(b)(2)” after “applies”.\n1981—Subsec. (c)(28).  Pub. L. 97–34, §\u202f208 , added par. (28) relating to recovery allowance for recovery property.\nPub. L. 97–34, §\u202f221(b)(1)(B) , added par. (28) relating to credit under section 44F.\nSubsec. (c)(29).  Pub. L. 97–34, §\u202f331(d)(1)(B) , added par. (29).\n1980—Subsec. (a).  Pub. L. 96–589, §\u202f4(g)(2) , inserted provisions that a reorganization shall be treated as meeting the requirements of subparagraph (D) or (G) of section 368(a)(1) only if the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met.\nSubsec. (a)(2).  Pub. L. 96–589, §\u202f4(g)(1) , substituted “subparagraph (A), (C), (D), (F), or (G) of section 368(a)(1)” for “subparagraph (A), (C), (D) (but only if the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met), or (F) of section 368(a)(1)”.\nSubsec. (c)(8).  Pub. L. 96–471  substituted “reports on the installment basis under section 453 or 453A” for “has elected, under section 453, to report on the installment basis” and “for purposes of section 453 or 453A” for “for purposes of section 453.”\nSubsec. (c)(27).  Pub. L. 96–223  added par. (27).\n1978—Subsec. (c)(25).  Pub. L. 95–600  substituted “regulated investment company or real estate investment trust” for “real estate investment trust” in heading, and in text “section 860(f)” for “section 859(d)” and “section 860” for “section 859”.\n1977—Subsec. (c)(26).  Pub. L. 95–30  added par. (26).\n1976—Subsec. (b)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f1901(b)(33)(N) , substituted in subpars. (B) and (C) “capital gain net income” for “net capital gain”.\nSubsec. (c)(4), (5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(10).  Pub. L. 94–455, §\u202f1901(b) (21(B), among other changes, substituted reference to section 616 (relating to certain development expenditures) if the distributor or transferor corporation has so elected for reference to sections 615 and 616 (relating to pre-1970 exploration expenditures and development expenditures, respectively) if the distributor or transferor corporation has so elected and struck out provisions that if, for any taxable year, the distributor of transferor corporation was allowed or made the election of the deduction under  section 615 of this title , the acquiring corporation shall be deemed to have been allowed or to have made such election of the deduction under  section 615 of this title .\nSubsec. (c)(15).  Pub. L. 94–455, §\u202f1901(b)(17) , substituted “subsection (c)” for “subsections (b)(7) and (c)”.\nSubsec. (c)(20).  Pub. L. 94–455, §\u202f1901(a)(54) , struck out par. (20) which related to carry-over of unused pension trust deductions in certain cases.\nSubsec. (c)(21).  Pub. L. 94–455, §\u202f1901(b)(16) , struck out par. (21) which related to pre-1954 adjustments resulting from change in method of accounting.\nSubsec. (c)(22) to (24).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(25).  Pub. L. 94–455, §\u202f1601(e) , added par. (25).\n1971—Subsec. (c)(24).  Pub. L. 92–178  added par. (24).\n1969—Subsec. (b)(3).  Pub. L. 91–172, §\u202f512(c) , substituted “a net operating loss or a net capital loss” for “a net operating loss”.\nSubsec. (c)(6).  Pub. L. 91–172, §\u202f521(f) , substituted “subsections (b), (j) and (k) of section 167” for “paragraphs (2), (3) and (4) of section 167(b)” and inserted reference to adjusted basis in the hand of the distributor or transferor corporation.\nSubsec. (c)(10).  Pub. L. 91–172, §\u202f504(c)(2) , substituted “Treatment of certain mining exploration and development expenses of distributor or transferor corporation” for “Treatment of certain expenses deferred by the election of distributor or transferor corporation” in heading, limited deduction of expenses deferred under sections 615 and 616 of this title by the acquiring corporation as if it were the distributor or transferor corporation to pre-1970 exploration and development expenditures, and inserted provision that if distributor or transferor corporation, for any taxable year, was allowed the deduction in sections 615(a) or 617(a) of this title or made the election provided in  section 615(b) of this title , acquiring corporation shall be deemed to have been allowed such deduction or deductions or to have made such election, as the case may be, for the purpose of applying the limitation provided in  section 617 of this title .\n1968—Subsec. (c)(22).  Pub. L. 90–240  substituted successor insurance companies for successor life insurance companies as the business enterprise covered, substituted reference to insurance companies taxable under subchapter L for reference to life insurance companies as defined in section 801(a), and substituted reference to the purposes of this section and of subchapter L for reference to the purposes of this section and part I of subchapter L.\n1964—Subsec. (c)(15).  Pub. L. 88–272, §\u202f225(i)(3) , substituted “subsections (b)(7) and (c) of section 545, relating to deductions with respect to payment of certain indebtedness” for “section 545(b)(7), relating to a deduction for payment of certain indebtedness incurred before  Jan. 1, 1934 ”.\nSubsec. (c)(19).  Pub. L. 88–272, §\u202f209(d)(2) , permitted deductions for contributions made in the taxable year and in 4 prior taxable years, instead of one prior taxable year, and provided that each taxable year beginning on or before the distribution or transfer date shall be treated as a prior taxable year with reference to the acquiring corporation’s taxable years beginning after such date.\n1962—Subsec. (c)(23).  Pub. L. 87–834  added par. (23).\n1959—Subsec. (c)(22).  Pub. L. 86–69, §\u202f3(c)(1) , added par. (22).\nSubsec. (d).  Pub. L. 86–69, §\u202f3(c)(2) , added subsec. (d).\n1958—Subsec. (c)(21).  Pub. L. 85–866  added par. (21).\n1956—Subsec. (c)(20). Act  Jan. 28, 1956  added par. (20).\n1955—Subsec. (c)(7). Act  June 15, 1955 , repealed par. (7) which related to carryover of prepaid income.\nAmendment by  section 13301 of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13301(c) of Pub. L. 115–97 , set out as a note under  section 163 of this title .\nPub. L. 115–97, title I, §\u202f13511(c) ,  Dec. 22, 2017 ,  131 Stat. 2142 , provided that:  “The amendments made by this section [amending this section and sections 805, 831, 953, and 1351 of this title and repealing sections 810 and 844 of this title] shall apply to losses arising in taxable years beginning after  December 31, 2017 .”\nAmendment by  section 11812(b)(6) of Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to dispositions in taxable years beginning after  Dec. 31, 1987 , with special rules for nondealers and coordination with Tax Reform Act of 1986, see section 10202(e)(1), (3), (5) of  Pub. L. 100–203 , set out as a note under  section 453 of this title .\nAmendment by  section 231(d)(3)(F) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1985 , see  section 231(g) of Pub. L. 99–514 , set out as a note under  section 41 of this title .\nAmendment by  section 411(b)(2)(C)(iii) of Pub. L. 99–514  applicable, except as otherwise provided, to costs paid or incurred after  Dec. 31, 1986 , in taxable years ending after such date, see  section 411(c) of Pub. L. 99–514 , set out as a note under  section 263 of this title .\nAmendment by  section 701(e)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 1812(a)(3) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 211(b)(4) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 474(r)(11) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–248  applicable to any target corporation with respect to which the acquisition date occurs after  Aug. 31, 1982 , with special rules for certain acquisitions before  Sept. 1, 1982 , and certain acquisitions of financial institutions in which there was a binding contract on  July 22, 1982 , to acquire control, see  section 224(d) of Pub. L. 97–248 , set out as an Effective Date note under  section 338 of this title .\nAmendment by  section 208 of Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 221(b)(1)(B) of Pub. L. 97–34  applicable to amounts paid or incurred after  June 30, 1981 , see  section 221(d) of Pub. L. 97–34 , as amended, set out as an Effective Date note under  section 41 of this title .\nAmendment by  section 331(d)(1)(B) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 339 of Pub. L. 97–34 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceeding commencing after  Dec. 31, 1980 , with exception permitting the debtor to make the amendment applicable to such cases or proceeding commencing after  Sept. 30, 1979 , see section 7(c)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nFor effective date of amendment by  Pub. L. 96–471 , see  section 6(a)(1) of Pub. L. 96–471 , set out as an Effective Date note under  section 453 of this title .\nAmendment by  Pub. L. 96–223  applicable to sales or uses after  Sept. 30, 1980 , in taxable years ending after such date, see  section 232(h)(1) of Pub. L. 96–223 , set out as an Effective Date note under  section 40 of this title .\nAmendment by  Pub. L. 95–600  applicable with respect to determinations (as defined in  section 860(e) of this title ) after  Nov. 6, 1978 , see  section 362(e) of Pub. L. 95–600 , set out as an Effective Date note under  section 860 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , and to credit carrybacks from such years, see  section 202(e) of Pub. L. 95–30 , set out as an Effective Date note under  section 51 of this title .\nFor effective date of amendment by  section 1601(e) of Pub. L. 94–455 , see  section 1608(a) of Pub. L. 94–455 , set out as a note under  section 857 of this title .\nAmendment by section 1901(a)(54), (b)(16), (17), (21)(B), (33)(N) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–178, title VI, §\u202f601(f) ,  Dec. 10, 1971 ,  85 Stat. 560 , provided that:  “The amendments made by this section [enacting sections 40, 50A, and 50B of this title and amending this section and sections 56, 6411, 6501, 6511, 6601, and 6611 of this title] shall apply to taxable years beginning after  December 31, 1971 .”\nAmendment by  section 504(c)(2) of Pub. L. 91–172  applicable with respect to exploration expenditures paid or incurred after  Dec. 31, 1969 , see  section 504(d)(1) of Pub. L. 91–172 , set out as a note under  section 243 of this title .\nAmendment by  section 512(c) of Pub. L. 91–172  applicable with respect to net capital losses sustained in taxable years beginning after  Dec. 31, 1969 , see  section 512(g) of Pub. L. 91–172 , set out as a note under  section 1212 of this title .\nAmendment by  section 521(f) of Pub. L. 91–172  applicable with respect to taxable years ending after  July 24, 1969 , see  section 521(g) of Pub. L. 91–172 , set out as a note under  section 167 of this title .\nAmendment by  Pub. L. 90–240  applicable to taxable years beginning after  Dec. 31, 1966 , see  section 5(e) of Pub. L. 90–240 , set out as a note under  section 832 of this title .\nAmendment by  section 225(i)(3) of Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272  set out as a note under  section 316 of this title .\nAmendment by  section 209(d)(2) of Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , with respect to contributions paid or treated as paid under  section 170(a)(2) of this title , in taxable years beginning after  Dec. 31, 1961 , see  section 209(f)(2) of Pub. L. 88–272 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 87–834  applicable with respect to taxable years ending after  Dec. 31, 1961 , see  section 2(h) of Pub. L. 87–834 , set out as an Effective Date note under  section 46 of this title .\nPub. L. 86–69, §\u202f4 ,  June 25, 1959 ,  73 Stat. 141 , provided that:  “Except as otherwise provided in this Act, the amendments made by this Act [amending this section, part I (§\u202f801 et seq.) of subchapter L, and sections 841, 842, 891, 1016, 1201, 1232, 1504, 4371, and 6501 of this title] shall apply only with respect to taxable years beginning after  December 31, 1957 .”\nFor effective date of amendment by  Pub. L. 85–866 , see  section 29(d) of Pub. L. 85–866 , set out as a note under  section 481 of this title .\nAct Jan. 28, 1956, ch. 15, §\u202f2 ,  70 Stat. 7 , provided that:  “The amendments made by the first section of this Act [amending this section] shall reply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nAct June 15, 1955, ch. 143, §\u202f3 ,  69 Stat. 135 , provided that:  “The amendments made by this Act [amending this section and repealing sections 452 and 462 of this title] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAct June 15, 1955, ch. 143, §\u202f4 ,  69 Stat. 135 , as amended by act  Oct. 22, 1986 ,  Pub. L. 99–514, §\u202f2 ,  100 Stat. 2095 , provided: \n “(a)   Filing of Statement.— If— “(1)  the amount of any tax required to be paid for any taxable year ending on or before the date of the enactment of this Act [ June 15, 1955 ] is increased by reason of the enactment of this Act [amending this section and repealing sections 452 and 462], and \n \n “(2)  the last date prescribed for payment of such tax (or any installment thereof) is before  December 15, 1955 , then the taxpayer shall, on or before  December 15, 1955 , file a statement which shows the increase in the amount of such tax required to be paid by reason of the enactment of this Act. \n \n \n “(b)   Form and Effect of Statement.— “(1)   Form of statement, etc.— The statement required by subsection (a) shall be filed at the place fixed for filing the return. Such statement shall be in such form, and shall include such information necessary or appropriate to show the increase in the amount of the tax required to be paid for the taxable year by reason of the enactment of this Act, as the Secretary of the Treasury or his delegate shall by regulations prescribe. \n \n “(2)   Treatment as amount shown on return.— The amount shown on a statement filed under subsection (a) as the increase in the amount of the tax required to be paid for the taxable year by reason of the enactment of this Act shall, for all purposes of the internal revenue laws, be treated as tax shown on the return. Notwithstanding the preceding sentence, that portion of the amount of increase in tax for any taxable year which is attributable to a decrease (by reason of the enactment of this Act) in the net operating loss for a succeeding taxable year shall not be treated as tax shown on the return. \n \n “(3)   Waiver of interest in case of payment on or before  december 15, 1955 .— If the taxpayer, on or before  December 15, 1955 , files the statement referred to in subsection (a) and pays in full that portion of the amount shown thereon for which the last date prescribed for payment is before  December 15, 1955 , then for purposes of computing interest (other than interest on overpayments) such portion shall be treated as having been paid on the last date prescribed for payment. This paragraph shall not apply if the amount shown on the statement as the increase in the amount of the tax required to be paid for the taxable year by reason of the enactment of this Act is greater than the actual increase unless the taxpayer establishes, to the satisfaction of the Secretary of the Treasury or his delegate, that his computation of the greater amount was based upon a reasonable interpretation and application of sections 452 and 462 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [sections 452 and 462 of this title], as those sections existed before the enactment of this Act. \n \n \n “(c)   Special Rules.— “(1)   Interest for period before enactment.— Interest shall not be imposed on the amount of any increase in tax resulting from the enactment of this Act for any period before the day after the date of the enactment of this Act [ June 15, 1955 ]. \n \n “(2)   Estimated tax.— Any addition to the tax under section 294(d) of the Internal Revenue Code of 1939 [section 294(d) of former Title 26, Internal Revenue Code], shall be computed as if this Act had not been enacted. In the case of any installment for which the last date prescribed for payment is before  December 15, 1955 , any addition to the tax under section 6654 of the Internal Revenue Code of 1986 [ section 6654 of this title ], shall be computed as if this Act had not been enacted. \n \n “(3)   Treatment of certain payments which taxpayer is required to make.— If— “(A)  the taxpayer is required to make a payment (or an additional payment) to another person by reason of the enactment of this Act, and \n \n “(B)  the Internal Revenue Code of 1986 [this title] prescribes a period, which expires after the close of the taxable year, within which the taxpayer must make such payment (or additional payment) if the amount thereof is to be taken into account (as a deduction or otherwise) in computing taxable income for such taxable year, \n \n\n then, subject to such regulations as the Secretary of the Treasury or his delegate may prescribe, if such payment (or additional payment) is made on or before  December 15, 1955 , it shall be treated as having been made within the period prescribed by such Code. \n \n “(4)   Treatment of certain dividends.— Subject to such regulations as the Secretary of the Treasury or his delegate may prescribe, for purposes of section 561(a)(1) of the Internal Revenue Code of 1986 [ section 561(a)(1) of this title ], dividends paid after the 15th day of the third month following the close of the taxable year and on or before  December 15, 1955 , may be treated as having been paid on the last day of the taxable year, but only to the extent (A) that such dividends are attributable to an increase in taxable income for the taxable year resulting from the enactment of this Act, and (B) elected by the taxpayer. \n \n “(5)   Determination of date prescribed.— For purposes of this section, the determination of the last date prescribed for payment or for filing a return shall be made without regard to any extension of time therefor and without regard to any provision of this section. \n \n “(6)   Regulations.— For requirement that the Secretary of the Treasury or his delegate shall prescribe all rules and regulations as may be necessary by reason of the enactment of this Act, see section 7805(a) of the Internal Revenue Code of 1986 [ section 7805(a) of this title ].”\nFor applicability of amendment by  section 701(e)(1) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CARRYOVERS'},
  'content': 'The amount of the taxable income of any new loss corporation for any post-change year which may be offset by pre-change losses shall not exceed the section 382 limitation for such year.\nIf the section 382 limitation for any post-change year exceeds the taxable income of the new loss corporation for such year which was offset by pre-change losses, the section 382 limitation for the next post-change year shall be increased by the amount of such excess.\nSubsection (a) shall not apply to the portion of the taxable income for such year which is allocable to the period in such year on or before the change date. Except as provided in subsection (h)(5) and in regulations, taxable income shall be allocated ratably to each day in the year.\nExcept as provided in paragraph (2), if the new loss corporation does not continue the business enterprise of the old loss corporation at all times during the 2-year period beginning on the change date, the section 382 limitation for any post-change year shall be zero.\nThe term “post-change year” means any taxable year ending after the change date.\nThe term “pre-change loss” shall include any carryover of disallowed interest described in section 163(j)(2) under rules similar to the rules of paragraph (1).\nExcept as otherwise provided in this subsection, the value of the old loss corporation is the value of the stock of such corporation (including any stock described in section 1504(a)(4)) immediately before the ownership change.\nIf a redemption or other corporate contraction occurs in connection with an ownership change, the value under paragraph (1) shall be determined after taking such redemption or other corporate contraction into account.\nExcept as otherwise provided in regulations, in determining the value of any old loss corporation which is a foreign corporation, there shall be taken into account only items treated as connected with the conduct of a trade or business in the United States.\nThe long-term tax-exempt rate shall be the highest of the adjusted Federal long-term rates in effect for any month in the 3-calendar-month period ending with the calendar month in which the change date occurs.\nTo the extent provided in regulations, the term “equity structure shift” includes taxable reorganization-type transactions, public offerings, and similar transactions.\nExcept as provided in subparagraphs (B)(i) and (C), in determining whether an ownership change has occurred, all stock owned by shareholders of a corporation who are not 5-percent shareholders of such corporation shall be treated as stock owned by 1 5-percent shareholder of such corporation.\nSubparagraph (A) shall be applied separately with respect to each group of shareholders (immediately before such equity structure shift) of each corporation which was a party to the reorganization involved in such equity structure shift.\nUnless a different proportion is established, acquisitions of stock after such equity structure shift shall be treated as being made proportionately from all shareholders immediately before such acquisition.\nExcept as provided in regulations, rules similar to the rules of subparagraph (B) shall apply in determining whether there has been an owner shift involving a 5-percent shareholder and whether such shift (or subsequent transaction) results in an ownership change.\nIf the old loss corporation has a net unrealized built-in gain, the section 382 limitation for any recognition period taxable year shall be increased by the recognized built-in gains for such taxable year.\nIf the old loss corporation has a net unrealized built-in loss, the recognized built-in loss for any recognition period taxable year shall be subject to limitation under this section in the same manner as if such loss were a pre-change loss.\nIf a redemption or other corporate contraction occurs in connection with an ownership change, to the extent provided in regulations, determinations under clause (i) shall be made after taking such redemption or other corporate contraction into account.\nAny item of income which is properly taken into account during the recognition period but which is attributable to periods before the change date shall be treated as a recognized built-in gain for the taxable year in which it is properly taken into account.\nAny amount which is allowable as a deduction during the recognition period (determined without regard to any carryover) but which is attributable to periods before the change date shall be treated as a recognized built-in loss for the taxable year for which it is allowable as a deduction.\nThe amount of the net unrealized built-in gain or loss shall be properly adjusted for amounts which would be treated as recognized built-in gains or losses under this paragraph if such amounts were properly taken into account (or allowable as a deduction) during the recognition period.\nThe term “recognition period” means, with respect to any ownership change, the 5-year period beginning on the change date.\nThe term “recognition period taxable year” means any taxable year any portion of which is in the recognition period.\nIf 80 percent or more in value of the stock of a corporation is acquired in 1 transaction (or in a series of related transactions during any 12-month period), for purposes of determining the net unrealized built-in loss, the fair market value of the assets of such corporation shall not exceed the grossed up amount paid for such stock properly adjusted for indebtedness of the corporation and other relevant items.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection where property held on the change date was acquired (or is subsequently transferred) in a transaction where gain or loss is not recognized (in whole or in part).\nExcept as otherwise provided in this section, the testing period is the 3-year period ending on the day of any owner shift involving a 5-percent shareholder or equity structure shift.\nIf there has been an ownership change under this section, the testing period for determining whether a 2nd ownership change has occurred shall not begin before the 1st day following the change date for such earlier ownership change.\nThe testing period shall not begin before the earlier of the 1st day of the 1st taxable year from which there is a carryforward of a loss or of an excess credit to the 1st post-change year or the taxable year in which the transaction being tested occurs. Except as provided in regulations, this paragraph shall not apply to any loss corporation which has a net unrealized built-in loss (determined after application of subsection (h)(3)(B)).\nThe term “loss corporation” means a corporation entitled to use a net operating loss carryover or having a net operating loss for the taxable year in which the ownership change occurs. Such term shall include any corporation entitled to use a carryforward of disallowed interest described in section 381(c)(20). Except to the extent provided in regulations, such term includes any corporation with a net unrealized built-in loss.\nThe term “new loss corporation” means a corporation which (after an ownership change) is a loss corporation. Nothing in this section shall be treated as implying that the same corporation may not be both the old loss corporation and the new loss corporation.\nTaxable income shall be computed with the modifications set forth in section 172(d).\nThe term “value” means fair market value.\nExcept as provided in regulations and subsection (e), the term “stock” means stock other than stock described in section 1504(a)(4).\nDeterminations of the percentage of stock of any corporation held by any person shall be made on the basis of value.\nThe term “5-percent shareholder” means any person holding 5 percent or more of the stock of the corporation at any time during the testing period.\nAny capital contribution received by an old loss corporation as part of a plan a principal purpose of which is to avoid or increase any limitation under this section shall not be taken into account for purposes of this section.\nFor purposes of subparagraph (A), any capital contribution made during the 2-year period ending on the change date shall, except as provided in regulations, be treated as part of a plan described in subparagraph (A).\nExcept as provided in regulations, any change in proportionate ownership which is attributable solely to fluctuations in the relative fair market values of different classes of stock shall not be taken into account.\nThe old loss corporation shall be treated as having substantial nonbusiness assets if at least ⅓ of the value of the total assets of such corporation consists of nonbusiness assets.\nA regulated investment company to which part I of subchapter M applies, a real estate investment trust to which part II of subchapter M applies, or a REMIC to which part IV of subchapter M applies, shall not be treated as a new loss corporation having substantial nonbusiness assets.\nFor purposes of this paragraph, the term “nonbusiness assets” means assets held for investment.\nFor purposes of this paragraph, stock and securities in any subsidiary corporation shall be disregarded and the parent corporation shall be deemed to own its ratable share of the subsidiary’s assets. For purposes of the preceding sentence, a corporation shall be treated as a subsidiary if the parent owns 50 percent or more of the combined voting power of all classes of stock entitled to vote, and 50 percent or more of the total value of shares of all classes of stock.\nIn applying section 108(e)(8) to any case to which subparagraph (A) applies, there shall not be taken into account any indebtedness for interest described in subparagraph (B).\nIf, during the 2-year period immediately following an ownership change to which this paragraph applies, an ownership change of the new loss corporation occurs, this paragraph shall not apply and the section 382 limitation with respect to the 2nd ownership change for any post-change year ending after the change date of the 2nd ownership change shall be zero.\nFor purposes of this paragraph, the term “title 11 or similar case” has the meaning given such term by section 368(a)(3)(A).\nA new loss corporation may elect, subject to such terms and conditions as the Secretary may prescribe, not to have the provisions of this paragraph apply.\nIf paragraph (5) does not apply to any reorganization described in subparagraph (G) of section 368(a)(1) or any exchange of debt for stock in a title 11 or similar case (as defined in section 368(a)(3)(A)), the value under subsection (e) shall reflect the increase (if any) in value of the old loss corporation resulting from any surrender or cancellation of creditors’ claims in the transaction.\nThe Secretary shall by regulation provide for the application of this section to the alternative tax net operating loss deduction under section 56(d).\nExcept as provided in regulations, any entity and any predecessor or successor entities of such entity shall be treated as 1 entity.\nParagraph (1) shall not apply in the case of any subsequent ownership change unless such ownership change is described in such paragraph.\nParagraph (1) shall not apply in the case of any ownership change if, immediately after such ownership change, any person (other than a voluntary employees’ beneficiary association under section 501(c)(9)) owns stock of the new loss corporation possessing 50 percent or more of the total combined voting power of all classes of stock entitled to vote, or of the total value of the stock of such corporation.\nRelated persons shall be treated as a single person for purposes of this paragraph.\nThe Emergency Economic Stabilization Act of 2008, referred to in subsec. (n)(1)(A), is div. A of  Pub. L. 110–343 ,  Oct. 3, 2008 ,  122 Stat. 3765 , which is classified principally to chapter 52 (§\u202f5201 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under  section 5201 of Title 12  and Tables.\n2017—Subsec. (d)(3).  Pub. L. 115–97, §\u202f13301(b)(2) , added par. (3).\nSubsec. (k)(1).  Pub. L. 115–97, §\u202f13301(b)(3) , inserted after first sentence “Such term shall include any corporation entitled to use a carryforward of disallowed interest described in section 381(c)(20).”\nSubsec. ( l )(3)(B)(iii).  Pub. L. 115–97, §\u202f11051(b)(3)(F) , substituted “section 121(d)(3)(C)” for “section 71(b)(2)”.\n2014—Subsec. ( l )(5)(F) to (H).  Pub. L. 113–295  redesignated subpars. (G) and (H) as (F) and (G), respectively, and struck out former subpar. (F) which related to a special rule for certain financial institutions for certain equity structure shifts and transactions occurring before  May 10, 1989 .\n2009—Subsec. (n).  Pub. L. 111–5  added subsec. (n).\n2004—Subsec. ( l )(4)(B)(ii).  Pub. L. 108–357  substituted “or a REMIC to which part IV of subchapter M applies,” for “a REMIC to which part IV of subchapter M applies, or a FASIT to which part V of subchapter M applies,”.\n1996—Subsec. ( l )(4)(B)(ii).  Pub. L. 104–188  substituted “a REMIC to which part IV of subchapter M applies, or a FASIT to which part V of subchapter M applies” for “or a REMIC to which part IV of subchapter M applies”.\n1993—Subsec. ( l )(5)(C).  Pub. L. 103–66  amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows:\n“(i)  In general .—In any case to which subparagraph (A) applies, 50 percent of the amount which, but for the application of section 108(e)(10)(B), would have been applied to reduce tax attributes under section 108(b) shall be so applied.\n“(ii)  Clarification with subparagraph (b) .—In applying clause (i), there shall not be taken into account any indebtedness for interest described in subparagraph (B).”\n1989—Subsec. (h)(3)(B)(i).  Pub. L. 101–239, §\u202f7205(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “If the amount of the net unrealized built-in gain or net unrealized built-in loss (determined without regard to this subparagraph) of any old loss corporation is not greater than 25 percent of the amount determined for purposes of subparagraph (A)(i)(I), the net unrealized built-in gain or net unrealized built-in loss shall be zero.”\nSubsec. (h)(6)(B).  Pub. L. 101–239, §\u202f7811(c)(5)(A)(i) , inserted “(determined without regard to any carryover)” after “during the recognition period”.\nSubsec. (h)(6)(C).  Pub. L. 101–239, §\u202f7811(c)(5)(A)(ii) , substituted “which would be treated as recognized built-in gains or losses under this paragraph if such amounts were properly taken into account (or allowable as a deduction) during the recognition period” for “treated as recognized built-in gains or losses under this paragraph”.\nSubsec. ( l )(3)(B)(i)(III).  Pub. L. 101–239, §\u202f7841(d)(11) , substituted “incident to divorce),” for “incident to divorce,”.\nSubsec. ( l )(3)(C).  Pub. L. 101–239, §\u202f7304(d)(1) , redesignated subpar. (D) as (C) and struck out former subpar. (C) which related to special rule for employee stock ownership plans.\nSubsec. ( l )(3)(C)(ii).  Pub. L. 101–239, §\u202f7815(h) , substituted “For purposes of subclause (III),” for “for purposes of subclause (III),” in concluding provisions.\nSubsec. ( l )(3)(D).  Pub. L. 101–239, §\u202f7304(d)(1) , redesignated subpar. (D) as (C).\nSubsec. ( l )(5)(F).  Pub. L. 101–73  substituted “on or after  May 10, 1989 ” for “after  December 31, 1989 ” in last sentence.\n1988—Subsec. (e)(2).  Pub. L. 100–647, §\u202f1006(d)(1)(A) , inserted “or other corporate contraction” after “redemption” in heading and in two places in text.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1006(d)(17)(A) , added par. (3).\nSubsec. (g)(1)(A).  Pub. L. 100–647, §\u202f1006(d)(21)(A) , struck out “new” after “stock of the”.\nSubsec. (g)(1)(B).  Pub. L. 100–647, §\u202f1006(d)(21)(B) , struck out “old” after “stock of the”.\nSubsec. (g)(4)(C).  Pub. L. 100–647, §\u202f1006(d)(2) , inserted “rules similar to” after “provided in regulations,”.\nSubsec. (h)(1)(C).  Pub. L. 100–647, §\u202f1006(d)(3)(A) , substituted “Special rules for certain section 338 gains” for “Section 338 gain” in heading and amended text generally. Prior to amendment, text read as follows: “The section 382 limitation for any taxable year in which gain is recognized by reason of an election under section 338 shall be increased by the excess of—\n“(i) the amount of such gain, over\n“(ii) the portion of such gain taken into account in computing recognized built-in gains for such taxable year.”\nSubsec. (h)(3)(A)(ii).  Pub. L. 100–647, §\u202f1006(d)(28)(A) , inserted “to the extent provided in regulations,” after “an ownership change,”.\nPub. L. 100–647, §\u202f1006(d)(1)(B) , inserted “or other corporate contractions” after “redemptions” in heading and “or other corporate contraction” after “redemption” in two places in text.\nSubsec. (h)(3)(B)(ii).  Pub. L. 100–647, §\u202f1006(d)(26) , inserted “except as provided in regulations,” after “under clause (i),”.\nSubsec. (h)(4).  Pub. L. 100–647, §\u202f1006(d)(20) , substituted “allowed as a carryforward” for “treated as a net operating loss” in heading and inserted “(or to the extent the amount so disallowed is attributable to capital losses, under rules similar to the rules for the carrying forward of net capital losses)” after “net operating losses” in subpar. (A).\nSubsec. (h)(5)(A).  Pub. L. 100–647, §\u202f1006(d)(3)(B) , substituted “recognized built-in gains to the extent such gains increased the section 382 limitation for the year (or recognized built-in losses to the extent such losses are treated as pre-change losses)” for “recognized built-in gains and losses”.\nSubsec. (h)(6).  Pub. L. 100–647, §\u202f1006(d)(22) , substituted “Treatment of certain built-in items” for “Secretary may treat certain deductions as built-in losses” in heading and amended text generally. Prior to amendment, text read as follows: “The Secretary may by regulation treat amounts which accrue on or before the change date but which are allowable as a deduction after such date as recognized built-in losses.”\nSubsec. (h)(9).  Pub. L. 100–647, §\u202f1006(d)(23) , substituted “was acquired (or is subsequently transferred)” for “is transferred”.\nSubsec. (i)(3).  Pub. L. 100–647, §\u202f1006(d)(4) , inserted “the earlier of” after “not begin before” and “or the taxable year in which the transaction being tested occurs” after “1st post-change year”.\nSubsec. (k)(1).  Pub. L. 100–647, §\u202f1006(d)(5)(A) , inserted “or having a net operating loss for the taxable year in which the ownership change occurs” after “operating loss carryover”.\nSubsec. (k)(2).  Pub. L. 100–647, §\u202f1006(d)(5)(B) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘old loss corporation’ means any corporation with respect to which there is an ownership change—\n“(A) which (before the ownership change) was a loss corporation, or\n“(B) with respect to which there is a pre-change loss described in subsection (d)(1)(B).”\nSubsec. ( l )(3)(A)(iv), (v).  Pub. L. 100–647, §\u202f1006(d)(6) , added cls. (iv) and (v) and struck out former cl. (iv) which read as follows: “except to the extent provided in regulations, paragraph (4) of section 318(a) shall apply to an option if such application results in an ownership change.”\nSubsec. ( l )(3)(C)(ii).  Pub. L. 100–647, §\u202f5077(a) , added subcl. (III) and concluding provisions.\nSubsec. ( l )(4)(B)(ii).  Pub. L. 100–647, §\u202f1006(t)(22)(A) , substituted “REMIC” for “real estate mortgage pool”.\nSubsec. ( l )(5)(A)(ii).  Pub. L. 100–647, §\u202f1006(d)(25) , substituted “stock of a controlling corporation” for “stock of controlling corporation”.\nPub. L. 100–647, §\u202f1006(d)(7) , substituted “after such ownership change and as a result of being shareholders or creditors immediately before such change” for “immediately after such ownership change”.\nSubsec. ( l )(5)(B).  Pub. L. 100–647, §\u202f1006(d)(27) , substituted “the pre-change losses and excess credits (within the meaning of section 383(a)(2)) which may be carried to a post-change year shall be computed” for “the net operating loss deduction under section 172(a) for any post-change year shall be determined”.\nSubsec. ( l )(5)(C).  Pub. L. 100–647, §\u202f1006(d)(18) , substituted “tax attributes” for “carryforwards” in heading and amended text generally. Prior to amendment, text read as follows: “In any case to which subparagraph (A) applies, the pre-change losses and excess credits (within the meaning of section 383(a)(2)) which may be carried to a post-change year shall be computed as if 50 percent of the amount which, but for the application of section 108(e)(10)(B), would have been includible in gross income for any taxable year had been so included.”\nSubsec. ( l )(5)(E).  Pub. L. 100–647, §\u202f1006(d)(19) , substituted “taken into account” for “of creditors taken into account” in heading and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “For purposes of subparagraph (A)(ii), stock transferred to a creditor in satisfaction of indebtedness shall be taken into account only if such indebtedness—”.\nSubsec. ( l )(5)(F).  Pub. L. 100–647, §\u202f4012(a)(3) , substituted “1989” for “1988” in last sentence.\nSubsec. ( l )(5)(F)(i)(I).  Pub. L. 100–647, §\u202f1006(d)(8)(A) , inserted “\u202f‘1504(a)(2)(B)’ for ‘1504(a)(2)’ and” after “by substituting”.\nSubsec. ( l )(5)(F)(ii)(III).  Pub. L. 100–647, §\u202f1006(d)(8)(B) , substituted “the amount of deposits in the new loss corporation immediately after the change” for “deposits described in subclause (II)”.\nSubsec. ( l )(5)(F)(iii)(I).  Pub. L. 100–647, §\u202f4012(b)(1)(B) , inserted “(as modified by section 368(a)(3)(D)(iv))” after “section 368(a)(3)(D)(ii)”.\nPub. L. 100–647, §\u202f1006(d)(29) , which directed amendment of subcl. (I) by substituting “section 368(a)(3)(D)(ii)” for “section 368(a)(D)(ii)”, could not be executed because “section 368(a)(3)(D)(ii)” appeared and “section 368(a)(D)(ii)” did not appear.\nSubsec. ( l )(6).  Pub. L. 100–647, §\u202f1006(d)(9) , substituted “shall reflect the increase (if any) in value of the old loss corporation resulting from any surrender or cancellation of creditors’ claims in the transaction” for “shall be the value of the new loss corporation immediately after the ownership change”.\nSubsec. ( l )(8).  Pub. L. 100–647, §\u202f1006(d)(10) , added par. (8).\nSubsec. (m)(4).  Pub. L. 100–647, §\u202f1006(d)(1)(C) , redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “providing for the treatment of corporate contractions as redemptions for purposes of subsections (e)(2) and (h)(3)(A), and”.\nSubsec. (m)(5).  Pub. L. 100–647, §\u202f1006(d)(24) , added par. (5).\nPub. L. 100–647, §\u202f1006(d)(1)(C) , redesignated former par. (5) as (4).\n1987—Subsec. (g)(4)(D).  Pub. L. 100–203, §\u202f10225(a) , added subpar. (D).\nSubsec. (h)(2)(B).  Pub. L. 100–203, §\u202f10225(b) , inserted at end “Such term includes any amount allowable as depreciation, amortization, or depletion for any period within the recognition period except to the extent the new loss corporation establishes that the amount so allowable is not attributable to the excess described in clause (ii).”\n1986— Pub. L. 99–514, §\u202f621(a) , in amending section generally, in subsec. (a), substituted provisions setting forth general rule that amount of taxable income of any new loss corporation for any post-change year which may be offset by pre-change losses shall not exceed section 382 limitation for such year for provisions relating to change in ownership of corporation and change in its business, description of persons owning corporation, attribution of ownership, and definition of “purchase”, in subsec. (b), substituted provisions relating to section 382 limitation for provisions relating to change in ownership as result of reorganization, in subsec. (c), substituted provisions relating to disallowance of carryforwards if continuity of business requirements are not met for provisions defining stock as all shares except nonvoting stock which is limited and preferred as to dividends, and added subsecs. (d) to (m).\nPub. L. 99–514, §\u202f621(e)(1) , repealed amendment by  Pub. L. 94–455, §\u202f806(e) . See 1976 Amendment note below.\n1984—Subsec. (b)(1).  Pub. L. 98–369 , in section as amended by  Pub. L. 94–455 , substituted “subparagraph (A), (B), (C), or (F) of section 368(a)(1) or subparagraph (D) or (G) of section 368(a)(1) (but only if the requirements of section 354(b)(1) are met)” for “section 368(a)(1)(A), (B), (C), (D) (but only if the requirements of section 354(b)(1) are met, or (F)”.\n1981—Subsec. (b)(7).  Pub. L. 97–34  designated existing provisions as subpar. (A) and added subpar. (B).\n1980—Subsec. (b)(7).  Pub. L. 96–589  added par. (7).\n1976— Pub. L. 94–455, §\u202f806(e) , which amended section generally, substituting provisions relating to special limitations on net operating loss carryovers based on continuity of trade or business conducted, for provisions relating to special limitations on net operating loss carryovers based on continuity of ownership, was repealed by  Pub. L. 99–514, §\u202f621(e)(1) . See Effective Date of 1986 and 1976 Amendment notes below.\n1964—Subsec. (a)(3).  Pub. L. 88–554  inserted reference to  section 318(a)(3)(C) of this title .\nAmendment by  section 11051(b)(3)(F) of Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nAmendment by section 13301(b)(2), (3) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13301(c) of Pub. L. 115–97 , set out as a note under  section 163 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1262(b) ,  Feb. 17, 2009 ,  123 Stat. 344 , provided that:  “The amendment made by this section [amending this section] shall apply to ownership changes after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nAmendment by  Pub. L. 108–357  effective  Jan. 1, 2005 , with exception for any FASIT in existence on  Oct. 22, 2004 , to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance, see  section 835(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 104–188  effective  Sept. 1, 1997 , see  section 1621(d) of Pub. L. 104–188 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 103–66  applicable to stock transferred after  Dec. 31, 1994 , in satisfaction of any indebtedness, except that such amendment inapplicable to stock transferred in satisfaction of any indebtedness if such transfer is in a title 11 or similar case filed on or before  Dec. 31, 1993 , see  section 13226(a)(3) of Pub. L. 103–66 , set out as a note under  section 108 of this title .\nAmendment by  section 7205(a) of Pub. L. 101–239  applicable, except as otherwise provided, to ownership changes and acquisitions after  Oct. 2, 1989 , in taxable years ending after such date, see  section 7205(c) of Pub. L. 101–239 , set out as a note under  section 56 of this title .\nPub. L. 101–239, title VII, §\u202f7304(d)(2) ,  Dec. 19, 1989 ,  103 Stat. 2354 , provided that:  “The amendments made by this subsection [amending this section] shall apply to acquisitions of employer securities after  July 12, 1989 , except that such amendments shall not apply to acquisitions after  July 12, 1989 , pursuant to a written binding contract in effect on  July 12, 1989 , and at all times thereafter before such acquisition.”\nAmendment by sections 7811(c)(5)(A) and 7815(h) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 101–73, title XIV, §\u202f1401(c)(2) ,  Aug. 9, 1989 ,  103 Stat. 550 , provided that:  “The amendment made by subsection (a)(2) [amending this section] shall apply to transactions on or after  May 10, 1989 .”\nPub. L. 100–647, title I, §\u202f1006(d)(1)(D) ,  Nov. 10, 1988 ,  102 Stat. 3395 , provided that:  “The amendments made by this paragraph [amending this section] shall apply with respect to ownership changes after  June 10, 1987 .”\nPub. L. 100–647, title I, §\u202f1006(d)(17)(B) ,  Nov. 10, 1988 ,  102 Stat. 3398 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to any ownership change after  June 10, 1987 . For purposes of the preceding sentence, any equity structure shift pursuant to a plan of reorganization adopted on or before  June 10, 1987 , shall be treated as occurring when such plan was adopted.”\nPub. L. 100–647, title I, §\u202f1006(d)(28)(B) ,  Nov. 10, 1988 ,  102 Stat. 3400 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply in the case of ownership changes on or after  June 21, 1988 .”\nAmendment by section 1006(d)(2)–(10), (18)–(27), (29), (t)(22)(A) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title IV, §\u202f4012(b)(1)(C)(ii) ,  Nov. 10, 1988 ,  102 Stat. 3657 , provided that:  “The amendment made by subparagraph (B) [amending this section] shall apply to any ownership change occurring after the date of the enactment of this Act [ Nov. 10, 1988 ] and before  January 1, 1990 .”\nPub. L. 100–647, title V, §\u202f5077(b) ,  Nov. 10, 1988 ,  102 Stat. 3683 , provided that: \n “(1)   In General .— The amendment made by subsection (a) [amending this section] shall apply to acquisition after  December 31, 1988 . \n \n “(2)   Exception .— The amendment made by subsection (a) shall not apply to acquisitions after  December 31, 1988 , pursuant to a binding written contract entered into on or before  October 21, 1988 .”\nPub. L. 100–203, title X, §\u202f10225(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–413 , provided that: \n “(1)   Subsection  (a).— The amendment made by subsection (a) [amending this section] shall apply in the case of stock treated as becoming worthless in taxable years beginning after  December 31, 1987 . \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending this section] shall apply in the case of ownership changes (as defined in section 382 of the Internal Revenue Code of 1986 as amended by subsection (a)) after  December 15, 1987 ; except that such amendment shall not apply in the case of any ownership change pursuant to a binding written contract which was in effect on  December 15, 1987 , and at all times thereafter before such ownership change.”\nPub. L. 99–514, title VI, §\u202f621(f) ,  Oct. 22, 1986 ,  100 Stat. 2266 , as amended by  Pub. L. 100–647, title I, §\u202f1006(d)(11) –(16), title VI, §\u202f6277(a), (b),  Nov. 10, 1988 ,  102 Stat. 3397 , 3398, 3753, 3754, provided that: \n “(1)   Amendments made by subsections  (a), (b),  and  (c).— “(A)   In general.— “(i)   Changes after 1986 .— The amendments made by subsections (a), (b), and (c) [amending this section and sections 318 and 383 of this title] shall apply to any ownership change after  December 31, 1986 . \n \n “(ii)   Plans of reorganization adopted before 1987 .— For purposes of clause (i), any equity structure shift pursuant to a plan of reorganization adopted before  January 1, 1987 , shall be treated as occurring when such plan was adopted. \n \n \n “(B)   Termination of old section 382 .— Except in a case described in any of the following paragraphs— “(i)  section 382(a) of the Internal Revenue Code of 1954 (as in effect before the amendment made by subsection (a) and the amendments made by section 806 of the Tax Reform Act of 1976 [ section 806 of Pub. L. 94–455 ]) shall not apply to any increase in percentage points occurring after  December 31, 1988 , and \n \n “(ii)  section 382(b) of such Code (as so in effect) shall not apply to any reorganization occurring pursuant to a plan of reorganization adopted after  December 31, 1986 . \n \n\n In no event shall sections 382(a) and (b) of such Code (as so in effect) apply to any ownership change described in subparagraph (A). \n \n “(C)   Coordination with section 382 (i).— For purposes of section 382(i) of the Internal Revenue Code of 1986 (as added by this section), any equity structure shift pursuant to a plan of reorganization adopted before  January 1, 1987 , shall be treated as occurring when such plan was adopted. \n \n \n “(2)   For amendments to tax reform act of 1976.— “(A)   In general .— The repeals made by subsection (e)(1) [repealing amendments by  Pub. L. 94–455, §\u202f806(e) , (f), amending this section and sections 108, 368, and 383 of this title] and the amendment made by subsection (e)(2) [repealing section 806(g)(2), (3) of  Pub. L. 94–455 , formerly set out as an Effective Date of 1976 Amendment note below] shall take effect on  January 1, 1986 . \n \n “(B)   Election to have amendments apply.— “(i)  If a taxpayer described in clause (ii) elects to have the provisions of this subparagraph apply, the amendments made by subsections (e) and (f) of section 806 of the Tax Reform Act of 1976 [amending this section and sections 108, 368, and 383 of this title] shall apply to the reorganization described in clause (ii). \n \n “(ii)  A taxpayer is described in this clause if the taxpayer filed a title 11 or similar case on  December 8, 1981 , filed a plan of reorganization on  February 5, 1986 , filed an amended plan on  March 14, 1986 , and received court approval for the amended plan and disclosure statement on  April 16, 1986 . \n \n \n “(C)   Application of old rules to certain debt .— In the case of debt of a corporation incorporated in Colorado on  November 8, 1924 , and reincorporated in Delaware in 1987, with headquarters in Denver, Colorado— “(i)  the amendments made by subsections (a), (b), and (c) shall not apply to any debt restructuring of such debt which was approved by the debtor’s Board of Directors and the lenders in 1986, and \n \n “(ii)  the amendments made by subsections (e) and (f) of section 806 of the Tax Reform Act of 1976 shall not apply to such debt restructuring, except that the amendment treated as part of such subsections under section 59(b) of the Tax Reform Act of 1984 (relating to qualified workouts) shall apply to such debt restructuring. \n \n \n “(D)   Special rule for oil and gas well drilling business .— In the case of a Texas corporation incorporated on  July 23, 1935 , in applying section 382 of the Internal Revenue Code of 1986 (as in effect before and after the amendments made by subsections (a), (b), and (c)) to a loan restructuring agreement during 1985, section 382(a)(5)(C) of the Internal Revenue Code of 1954 (as added by the amendments made by subsections (e) and (f) of section 806 of the Tax Reform Act of 1976) shall be applied as if it were in effect with respect to such restructuring. For purposes of the preceding sentence, in applying section 382 (as so in effect), if a person has a warrant to acquire stock, such stock shall be considered as owned by such person. \n \n \n “(3)   Testing period .— For purposes of determining whether there is an ownership change, the testing period shall not begin before the later of— “(A)   May 6, 1986 , or \n \n “(B)  in the case of an ownership change which occurs after  May 5, 1986 , and to which the amendments made by subsections (a), (b), and (c) do not apply, the first day following the date on which such ownership change occurs. \n \n \n “(4)   Special transition rules .— The amendments made by subsections (a), (b), and (c) shall not apply to any— “(A)  stock-for-debt exchanges and stock sales made pursuant to a plan of reorganization with respect to a petition for reorganization filed by a corporation under chapter 11 of title 11, United States Code, on  August 26, 1982 , and which filed with a United States district court a first amended and related plan of reorganization before  March 1, 1986 , or \n \n “(B)  ownership change of a Delaware corporation incorporated in August 1983, which may result from the exercise of put or call option under an agreement entered into on  September 14, 1983 , but only with respect to taxable years beginning after 1991 regardless of when such ownership change takes place. \n \n\n Any regulations prescribed under section 382 of the Internal Revenue Code of 1986 (as added by subsection (a)) which have the effect of treating a group of shareholders as a separate 5-percent shareholder by reason of a public offering shall not apply to any public offering before  January 1, 1989 , for the benefit of institutions described in section 591 of such Code. Unless the corporation otherwise elects, an underwriter of any offering of stock in a corporation before  September 19, 1986  ( January 1, 1989 , in the case of an offering for the benefit of an institution described in the preceding sentence), shall not be treated as acquiring any stock of such corporation by reason of a firm commitment underwriting to the extent the stock is disposed of pursuant to the offering (but in no event later than 60 days after the initial offering). \n \n “(5)   Bankruptcy proceedings .— Unless the taxpayer elects not to have the provisions of this paragraph apply, in the case of a reorganization described in subparagraph (G) of section 368(a)(1) of the Internal Revenue Code of 1986 or an exchange of debt for stock in a title 11 or similar case, as defined in section 368(a)(3) of such Code, the amendments made by subsections (a), (b), and (c) shall not apply to any ownership change resulting from such a reorganization or proceeding if a petition in such case was filed with the court before  August 14, 1986 . The determination as to whether an ownership change has occurred during the period beginning  January 1, 1987 , and ending on the final settlement of any reorganization or proceeding described in the preceding sentence shall be redetermined as of the time of such final settlement. \n \n “(6)   Certain plans .— The amendments made by subsections (a), (b), and (c) shall not apply to any ownership change with respect to— “(A)  the acquisition of a corporation the stock of which is acquired pursuant to a plan of divestiture which identified such corporation and its assets, and was agreed to by the board of directors of such corporation’s parent corporation on  May 17, 1985 , \n \n “(B)  a merger which occurs pursuant to a merger agreement (entered into before  September 24, 1985 ) and an application for approval by the Federal Home Loan Bank Board was filed on  October 4, 1985 , \n \n “(C)  a reorganization involving a party to a reorganization of a group of corporations engaged in enhanced oil recovery operations in California, merged in furtherance of a plan of reorganization adopted by a board of directors vote on  September 24, 1985 , and a Delaware corporation whose principal oil and gas producing fields are located in California, or \n \n “(D)  the conversion of a mutual savings and loan association holding a Federal charter dated  March 22, 1985 , to a stock savings and loan association pursuant to the rules and regulations of the Federal Home Loan Bank Board. \n \n \n “(7)   Ownership change of regulated air carrier .— The amendments made by subsections (a), (b), and (c) shall not apply to an ownership change of a regulated air carrier if— “(A)  on  July 16, 1986 , at least 40 percent of the outstanding common stock (excluding all preferred stock, whether or not convertible) of such carrier had been acquired by a parent corporation incorporated in March 1980 under the laws of Delaware, and \n \n “(B)  the acquisition (by or for such parent corporation) or retirement of the remaining common stock of such carrier is completed before the later of  March 31, 1987 , or 90 days after the requisite governmental approvals are finally granted, \n \n\n but only if the ownership change occurs on or before the later of  March 31, 1987 , or such 90th day. The aggregate reduction in tax for any taxable year by reason of this paragraph shall not exceed $10,000,000. The testing period for determining whether a subsequent ownership change has occurred shall not begin before the 1st day following an ownership change to which this paragraph applies. \n \n “(8)  The amendments made by subsections (a), (b), and (c) shall not apply to any ownership change resulting from the conversion of a Minnesota mutual savings bank holding a Federal charter dated  December 31, 1985 , to a stock savings bank pursuant to the rules and regulations of the Federal Home Loan Bank Board, and from the issuance of stock pursuant to that conversion to a holding company incorporated in Delaware on  February 21, 1984 . For purposes of determining whether any ownership change occurs with respect to the holding company or any subsidiary thereof (whether resulting from the transaction described in the preceding sentence or otherwise), any issuance of stock made by such holding company in connection with the transaction described in the preceding sentence shall not be taken into account. \n \n “(9)   Definitions .— Except as otherwise provided, terms used in this subsection shall have the same meaning as when used in section 382 of the Internal Revenue Code of 1986 (as amended by this section).”\n[ Pub. L. 100–647, title VI, §\u202f6277(c) ,  Nov. 10, 1988 ,  102 Stat. 3754 , provided that:  “The amendments made by this section [amending  section 621(f) of Pub. L. 99–514 , set out above] shall take effect as if included in section 621(f)(5) of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].” \n]\nPub. L. 98–369, div. A, title I, §\u202f62(b)(2) ,  July 18, 1984 ,  98 Stat. 583 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 4 of the Bankruptcy Tax Act of 1980 [ Pub. L. 96–589 ].”\nAmendment by  Pub. L. 97–34  applicable to any transfer made on or after  Jan. 1, 1981 , see  section 246(a) of Pub. L. 97–34 , set out as a note under  section 368 of this title .\nPub. L. 96–589, §\u202f2(d) ,  Dec. 24, 1980 ,  94 Stat. 3396 , provided that the amendment made by  section 2(b) of Pub. L. 96–589  is to subsec. (b) as in effect before its amendment by section 806 of the Tax Reform Act of 1976,  Pub. L. 94–455 .\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or before  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to transactions occurring after  Sept. 30, 1979 , in a specified manner, see section 7(a)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nPub. L. 94–455, title VIII, §\u202f806(g)(2) , (3),  Oct. 4, 1976 ,  90 Stat. 1605 , 1606, as amended by  Pub. L. 95–600, title III, §\u202f368(a) ,  Nov. 6, 1978 ,  92 Stat. 2857 ;  Pub. L. 95–615, §\u202f8 ,  Nov. 8, 1978 ,  92 Stat. 3098 ;  Pub. L. 96–167, §\u202f9(e) ,  Dec. 29, 1979 ,  93 Stat. 1279 ;  Pub. L. 97–119, title I, §\u202f111 ,  Dec. 29, 1981 ,  95 Stat. 1640 ;  Pub. L. 98–369, div. A, title I, §\u202f62(a) ,  July 18, 1984 ,  98 Stat. 583 , which provided an effective date for the amendments made by section 806(e), (f) of  Pub. L. 94–455  for purposes of applying sections 382(a) and 383 (as it relates to section 382(a)) of this title, was repealed by  Pub. L. 99–514, title VI, §\u202f621(e)(2) , (f)(2),  Oct. 22, 1986 ,  100 Stat. 2266 , eff.  Jan. 1, 1986 .\nAmendment by  Pub. L. 88–554  effective  Aug. 31, 1964 , except that for purposes of sections 302 and 304 of this title, such amendment shall not apply to distributions in payment for stock acquisitions or redemptions, if such acquisitions or redemptions occurred before  Aug. 31, 1964 , see  section 4(c) of Pub. L. 88–554 , set out as a note under  section 318 of this title .\nPub. L. 95–600, title III, §\u202f368 ,  Nov. 6, 1978 ,  92 Stat. 2857 , provided for delaying the effective date established by section 806(g)(2), (3) of  Pub. L. 94–455 , formerly set out above, by substituting “1980” for “1978”, with certain elections.\nPub. L. 111–5, div. B, title I, §\u202f1261 ,  Feb. 17, 2009 ,  123 Stat. 342 , provided that: \n “(a)   Findings .— Congress finds as follows: “(1)  The delegation of authority to the Secretary of the Treasury under section 382(m) of the Internal Revenue Code of 1986 does not authorize the Secretary to provide exemptions or special rules that are restricted to particular industries or classes of taxpayers. \n \n “(2)  Internal Revenue Service Notice 2008–83 is inconsistent with the congressional intent in enacting such section 382(m). \n \n “(3)  The legal authority to prescribe Internal Revenue Service Notice 2008–83 is doubtful. \n \n “(4)  However, as taxpayers should generally be able to rely on guidance issued by the Secretary of the Treasury legislation is necessary to clarify the force and effect of Internal Revenue Service Notice 2008–83 and restore the proper application under the Internal Revenue Code of 1986 of the limitation on built-in losses following an ownership change of a bank. \n \n \n “(b)   Determination of Force and Effect of Internal Revenue Service Notice  2008–83  Exempting Banks From Limitation on Certain Built–in Losses Following Ownership Change.— “(1)   In general .— Internal Revenue Service Notice 2008–83— “(A)  shall be deemed to have the force and effect of law with respect to any ownership change (as defined in section 382(g) of the Internal Revenue Code of 1986) occurring on or before  January 16, 2009 , and \n \n “(B)  shall have no force or effect with respect to any ownership change after such date. \n \n \n “(2)   Binding contracts .— Notwithstanding paragraph (1), Internal Revenue Service Notice 2008–83 shall have the force and effect of law with respect to any ownership change (as so defined) which occurs after  January 16, 2009 , if such change— “(A)  is pursuant to a written binding contract entered into on or before such date, or \n \n “(B)  is pursuant to a written agreement entered into on or before such date and such agreement was described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission required by reason of such ownership change.”\nPub. L. 99–514, title VI, §\u202f621(d) ,  Oct. 22, 1986 ,  100 Stat. 2266 , directed Secretary of the Treasury or his delegate to, not later than  Jan. 1, 1989 , conduct a study and report to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate with respect to treatment of depreciation, amortization, depletion, and other built-in deductions for purposes of sections 382 and 383 of this title, and, not later than  Jan. 1, 1988 , conduct a study and report to committees referred to above with respect to treatment of informal bankruptcy workouts for purposes of sections 108 and 382 of this title, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11832(3) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CARRYOVERS'},
  'content': 'Under regulations, if an ownership change occurs with respect to a corporation, the amount of any excess credit for any taxable year which may be used in any post-change year shall be limited to an amount determined on the basis of the tax liability which is attributable to so much of the taxable income as does not exceed the section 382 limitation for such post-change year to the extent available after the application of section 382 and subsections (b) and (c) of this section.\nIf an ownership change occurs with respect to a corporation, the amount of any net capital loss under section 1212 for any taxable year before the 1st post-change year which may be used in any post-change year shall be limited under regulations which shall be based on the principles applicable under section 382. Such regulations shall provide that any such net capital loss used in a post-change year shall reduce the section 382 limitation which is applied to pre-change losses under section 382 for such year.\nIf an ownership change occurs with respect to a corporation, the amount of any excess foreign taxes under section 904(c) for any taxable year before the 1st post-change taxable year shall be limited under regulations which shall be consistent with purposes of this section and section 382.\nFor purposes of this section, rules similar to the rules of subsections (b)(3) and (d)(1)(B) of section 382 shall apply.\nTerms used in this section shall have the same respective meanings as when used in section 382, except that appropriate adjustments shall be made to take into account that the limitations of this section apply to credits and net capital losses.\n1986— Pub. L. 99–514, §\u202f621(b) , amended section generally. Prior to amendment, section read as follows: “If—\n“(1) the ownership and business of a corporation are changed in the manner described in section 382(a)(1), or\n“(2) in the case of a reorganization specified in paragraph (2) of section 381(a), there is a change in ownership described in section 382(b)(1)(B),\nthen the limitations provided in section 382 in such cases with respect to the carryover of net operating losses shall apply in the same manner, as provided under regulations prescribed by the Secretary, with respect to any unused business credit of the corporation which can otherwise be carried forward under section 39, to any unused credit of the corporation which could otherwise be carried forward under section 30(g)(2), to any excess foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212.”\nPub. L. 99–514, §\u202f621(e)(1) , repealed amendment by  Pub. L. 94–455, §\u202f806(f)(2) . See 1976 Amendment note below.\n1984— Pub. L. 98–369, §\u202f474(r)(12)(A)(ii) , in catchline of section 383, as in effect prior to amendment by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , substituted “Special limitations on unused business credits, research credits, foreign taxes, and capital losses” for “Special limitations on carryovers of unused investment credits, work incentive program credits, new employee credits, alcohol fuel credits, research credits, employee stock ownership credits, foreign taxes, and capital losses”.\nPub. L. 98–369, §\u202f474(r)(12)(B)(ii) , in catchline of section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(b) of this title , substituted “business credits, research credits” for “investment credits, work incentive program credits”.\nPub. L. 98–369, §\u202f474(r)(12)(B)(ii) , in catchline of section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , substituted “business credits” for “investment credits” and struck out references to work incentive program credits, new employee credits, alcohol fuel credits, and employee stock ownership credits.\nPub. L. 98–369, §\u202f474(r)(12)(A)(i) , in section 383, as in effect prior to amendment by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , substituted “with respect to any unused business credit of the corporation which can otherwise be carried forward under section 39, to any unused credit of the corporation which could otherwise be carried forward under section 30(g)(2), to any excess foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212” for “with respect to any unused investment credit of the corporation which can otherwise be carried forward under section 46(b), to any unused work incentive program credit of the corporation which can otherwise be carried forward under section 50A(b), to any unused new employee credit of the corporation which could otherwise be carried forward under section 53(b), to any unused credit of the corporation which could otherwise be carried forward under section 44E(e)(2), to any unused credit of the corporation which could otherwise be carried forward under section 44F(g)(2), to any unused credit of the corporation which could otherwise be carried forward under section 44G(b)(2), to any excess foreign taxes of the corporation which can otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212”.\nPub. L. 98–369, §\u202f474(r)(12)(B)(i) , in section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(b) of this title , substituted “with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section 30(g)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212” for “with respect to any unused investment credit of the corporation under section 46(b), to any unused work incentive program credit of the corporation under section 50A(b), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212”.\nPub. L. 98–369, §\u202f474(r)(12)(B)(i) , in section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , substituted “with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section 30(g)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212” for “with respect to any unused investment credit of the corporation under section 46(b), to any unused work incentive program credit of the corporation under section 50A(b), to any unused new employee credit of the corporation under section 53(b), to any unused credit of the corporation under section 44E(e)(2), to any unused credit of the corporation under section 44F(g)(2), to any unused credit of the corporation under section 44G(b)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212”.\n1981— Pub. L. 97–34, §\u202f331(d)(1)(C)(ii) , (D)(ii), in catchlines of sections 383, as related to  section 382(a) of this title , before and after amendment by  Pub. L. 94–455, §\u202f806(f)(2) , inserted reference to employee stock ownership credits.\nPub. L. 97–34, §\u202f331(d)(1)(D)(i) , in section 383, as in effect prior to amendment by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted “to any unused credit of the corporation which could otherwise be carried forward under section 44G(b)(2),”.\nPub. L. 97–34, §\u202f331(d)(1)(C)(i) , in section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted “to any unused credit of the corporation under section 44G(b)(2),”.\nPub. L. 97–34, §\u202f221(b)(1)(C)(ii) , (D)(ii), in catchlines of sections 383, as related to  section 382(a) of this title , before and after amendment by  Pub. L. 94–455, §\u202f806(f)(2) , inserted reference to research credits.\nPub. L. 97–34, §\u202f221(b)(1)(D)(i) , in section 383, as in effect prior to amendment by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted “to any unused credit of the corporation which could otherwise be carried forward under section 44F(g)(2),” after “section 44E(e)(2),”.\nPub. L. 97–34, §\u202f221(b)(1)(C)(i) , in section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted “to any unused credit of the corporation under section 44F(g)(2),” after “section 44E(e)(2),”.\n1980— Pub. L. 96–223, §\u202f232(b)(2)(D) , in section 383, as in effect prior to amendment by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted reference to unused alcohol fuel credits in section catchline and reference to any unused credit of the corporation which could otherwise be carried forward under section 44E(e)(2) in text.\nPub. L. 96–223, §\u202f232(b)(2)(C) , in section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted reference to unused alcohol fuel credits in section catchline and reference to any unused credit of the corporation under section 44E(e)(2) in text.\nPub. L. 96–222 , in sections 383, as related to  section 382(a) of this title , before and after amendment by  Pub. L. 94–455, §\u202f806(f)(2) , substituted “section 53(b)” for “section 53(c)”.\n1977— Pub. L. 95–30, §\u202f202(d)(3)(C) , in section 383, as in effect prior to amendment by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted “to any unused new employee credit of the corporation which could otherwise be carried forward under section 53(c)” in text and “new employee credits,” in catchline.\nPub. L. 95–30, §\u202f202(d)(3)(B) , in section 383, as amended by  Pub. L. 94–455, §\u202f806(f)(2) , as related to  section 382(a) of this title , inserted “to any unused new employee credit of the corporation under section 53(c)” in text and “new employee credits,” in section catchline.\n1976— Pub. L. 94–455 , §§\u202f1031(b)(5), 1906(b)(13)(A), struck out “or his delegate” after “Secretary”, and substituted “section 904(c)” for “section 904(d)”, respectively, in section 383 set out first.\nPub. L. 94–455, §\u202f806(f)(2) , which substituted, in sections 383 as related to section 382(a) and (b) of this title, provisions that the net operating loss limitations in section 382 shall apply to unused investment credits under section 46(b), to unused work incentive program credits under section 50A(b), to excess foreign taxes under section 904(d) and to net capital losses under section 1212 for provisions that the net operating loss carryover limitations in section 382 shall apply, in the case of ownership changes described in section 382(a)(1) or reorganizations specified in section 381(a)(2) resulting in ownership changes described in section 382(b)(1)(B), to unused investment credits under section 46(b), to unused work incentive program credits under section 50A(B), to excess foreign taxes under section 904(c), and to net capital losses under section 1212, was repealed by  Pub. L. 99–514, §\u202f621(e)(1) . See Effective Date of 1986 and 1976 Amendment notes below.\nAmendment by  section 621(b) of Pub. L. 99–514  applicable to any ownership change after  Dec. 31, 1986 , except as otherwise provided, see  section 621(f) of Pub. L. 99–514 , as amended, set out as a note under  section 382 of this title .\nRepeal of amendment by  section 806(f)(1) of Pub. L. 94–455  effective  Jan. 1, 1986 , with certain exceptions, see  section 621(f)(2) of Pub. L. 99–514 , set out as a note under  section 382 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by section 221(b)(1)(C), (D) of  Pub. L. 97–34  applicable to amounts paid or incurred after  June 30, 1981 , see  section 221(d) of Pub. L. 97–34 , as amended, set out as an Effective Date note under  section 41 of this title .\nAmendment by section 331(d)(1)(C), (D) of  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 339 of Pub. L. 97–34 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 96–223  applicable to sales or uses after  Sept. 30, 1980 , in taxable years ending after such date, see  section 232(h)(1) of Pub. L. 96–223 , set out as an Effective Date note under  section 40 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 ,  Nov. 6, 1978 ,  92 Stat. 2763 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nFor effective date of amendment by  section 1031(b)(5) of Pub. L. 94–455 , see  section 1031(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nFor purposes of applying this section (as it relates to  section 382(a) of this title ) as amended by section 806(e), (f) of  Pub. L. 94–455 , the amendments made by section 806(e), (f) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1985 , with specified provisions for determining the beginning of the taxable years specified in  section 382(a)(1)(B)(ii) of this title , and this section (as it relates to  section 382(b) of this title ) as amended by section 806(e), (f) of  Pub. L. 94–455  to apply (and such sections as in effect prior to such amendment not to apply) to reorganizations pursuant to a plan of reorganization adopted by one or more of the parties thereto on or after  Jan. 1, 1986 , see section 806(g)(2), (3) of  Pub. L. 94–455 , as amended, formerly set out as a note under  section 382 of this title .\nPub. L. 92–178, title III, §\u202f302(c) ,  Dec. 10, 1971 ,  85 Stat. 521 , provided that:  “The amendments made by this section [enacting this section] shall be applicable only with respect to reorganizations and other changes in ownership occurring after the date of enactment of this Act [ Dec. 10, 1971 ] pursuant to a plan of reorganization or contract entered into on or after  September 29, 1971 .”\nFor election by taxpayer for application of prior law with respect to any acquisition or reorganization occurring before the end of the taxpayer’s first taxable year beginning after  June 30, 1978 , see  section 368 of Pub. L. 95–600 , set out as a Delay in Effective Date of 1976 Amendment note under  section 382 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CARRYOVERS'},
  'content': 'Subsection (a) shall not apply to the preacquisition loss of any corporation if such corporation and the gain corporation were members of the same controlled group at all times during the 5-year period ending on the acquisition date.\nIf either of the corporations referred to in paragraph (1) was not in existence throughout the 5-year period referred to in paragraph (1), the period during which such corporation was in existence (or if both, the shorter of such periods) shall be substituted for such 5-year period.\nAny item of income which is properly taken into account for any recognition period taxable year but which is attributable to periods before the acquisition date shall be treated as a recognized built-in gain for the taxable year in which it is properly taken into account and shall be taken into account in determining the amount of the net unrealized built-in gain.\nIn the case of a corporation with a net unrealized built-in loss, the term “preacquisition loss” includes any recognized built-in loss.\nThe term “gain corporation” means any corporation with a net unrealized built-in gain.\nThe term “control” means ownership of stock in a corporation which meets the requirements of section 1504(a)(2).\nExcept as provided in regulations and except for purposes of subsection (b), all corporations which are members of the same affiliated group immediately before the acquisition date shall be treated as 1 corporation. To the extent provided in regulations, section 1504 shall be applied without regard to subsection (b) thereof for purposes of the preceding sentence.\nAny reference in this section to a corporation shall include a reference to any predecessor or successor thereof.\nExcept as provided in regulations, the terms “net unrealized built-in gain”, “net unrealized built-in loss”, “recognized built-in loss”, “recognition period”, and “recognition period taxable year”, have the same respective meanings as when used in section 382(h), except that the acquisition date shall be taken into account in lieu of the change date.\nRules similar to the rules of subsection (a) shall also apply in the case of any excess credit (as defined in section 383(a)(2)) or net capital loss.\nIf any preacquisition loss may not offset a recognized built-in gain by reason of this section, such gain shall not be taken into account in determining under section 172(b)(2) the amount of such loss which may be carried to other taxable years. A similar rule shall apply in the case of any excess credit or net capital loss limited by reason of subsection (d).\n1989—Subsec. (e)(1).  Pub. L. 101–239  substituted “built-in gain” for “build-in gain”.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f2004(m)(1)(A) , amended subsec. (a) generally, making changes in substance and structure.\nSubsec. (b).  Pub. L. 100–647, §\u202f2004(m)(3) , substituted “corporations under common control” for “50 percent of gain corporation held” in heading and amended text generally. Prior to amendment, text read as follows: “Subsection (a) shall not apply if more than 50 percent of the stock (by vote and value) of the gain corporation was held throughout the 5-year period ending on the acquisition date—\n“(1) in any case described in subsection (a)(1), by members of the affiliated group referred to in subsection (a)(1), or\n“(2) in any case described in subsection (a)(2), by the acquiring corporation or members of such acquiring corporation’s affiliated group.\nFor purposes of the preceding sentence, stock described in section 1504(a)(4) shall not be taken into account.”\nSubsec. (c)(1)(A).  Pub. L. 100–647, §\u202f2004(m)(1)(D) , substituted “subsection (a)(1)(B)” for “subsection (a)(2)”.\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f2004(m)(1)(C) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘acquisition date’ means the date on which the gain corporation becomes a member of the affiliated group or, in any case described in subsection (a)(2), the date of the distribution or transfer in the liquidation or reorganization.”\nSubsec. (c)(4) to (8).  Pub. L. 100–647, §\u202f2004(m)(1)(B) , redesignated par. (4) as (8) and added pars. (4) to (7).\nSubsecs. (e), (f).  Pub. L. 100–647, §\u202f2004(m)(2) , (4), substituted “a corporation” for “the gain corporation” in subsec. (e)(2), redesignated subsec. (e) as (f), and added subsec. (e).\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10226(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–416 , provided that:  \n “The amendments made by this section [enacting this section] shall apply in cases where the acquisition date (as defined in section 384(c)(2) of the Internal Revenue Code of 1986 as added by this section) is after  December 15, 1987 ; except that such amendments shall not apply in the case of any transaction pursuant to— \n “(1)  a binding written contract in effect on or before  December 15, 1987 , or \n \n “(2)  a letter of intent or agreement of merger signed on or before  December 15, 1987 .”\nPub. L. 100–647, title II, §\u202f2004(m)(5) ,  Nov. 10, 1988 ,  102 Stat. 3607 , provided that:  “In any case where the acquisition date (as defined in section 384(c)(2) of the 1986 Code as amended by this subsection) is before  March 31, 1988 , the acquiring corporation may elect to have the amendments made by this subsection not apply. Such an election shall be made in such manner as the Secretary of the Treasury or his delegate shall prescribe and shall be made not later than the later of the due date (including extensions) for filing the return for the taxable year of the acquiring corporation in which the acquisition date occurs or the date 120 days after the date of the enactment of this Act [ Nov. 10, 1989 ]. Such an election, once made, shall be irrevocable.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN CORPORATE INTERESTS AS STOCK OR INDEBTEDNESS'},
  'content': 'The Secretary is authorized to prescribe such regulations as may be necessary or appropriate to determine whether an interest in a corporation is to be treated for purposes of this title as stock or indebtedness (or as in part stock and in part indebtedness).\nThe characterization (as of the time of issuance) by the issuer as to whether an interest in a corporation is stock or indebtedness shall be binding on such issuer and on all holders of such interest (but shall not be binding on the Secretary).\nExcept as provided in regulations, paragraph (1) shall not apply to any holder of an interest if such holder on his return discloses that he is treating such interest in a manner inconsistent with the characterization referred to in paragraph (1).\nThe Secretary is authorized to require such information as the Secretary determines to be necessary to carry out the provisions of this subsection.\n1992—Subsec. (c).  Pub. L. 102–486  added subsec. (c).\n1989—Subsec. (a).  Pub. L. 101–239  inserted “(or as in part stock and in part indebtedness)” before period at end.\n1976—Subsec. (a).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 102–486, title XIX, §\u202f1936(b) ,  Oct. 24, 1992 ,  106 Stat. 3032 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to instruments issued after the date of the enactment of this Act [ Oct. 24, 1992 ].”\nPub. L. 101–239, title VII, §\u202f7208(a)(2) ,  Dec. 19, 1989 ,  103 Stat. 2337 , provided that:  “Any regulations issued pursuant to the authority granted by the amendment made by paragraph (1) [amending this section] shall only apply with respect to instruments issued after the date on which the Secretary of the Treasury or his delegate provides public guidance as to the characterization of such instruments whether by regulation, ruling, or otherwise.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title I, §\u202f75(a) ,  July 18, 1984 ,  98 Stat. 594 ; amended  Pub. L. 99–514, title XVIII, §\u202f1805(c)(1) ,  Oct. 22, 1986 ,  100 Stat. 2810 , related to transfers of partnership and trust interests by corporations.\nRepeal effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as an Effective Date of 1988 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 391, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 131 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f22(a) ,  72 Stat. 1620 , related to effective date of section 301 et seq. of this title.\nSection 392,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 131 , related to effective date of section 331 et seq. of this title.\nSection 393,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 132 , related to effective date of section 351 et seq. of this title.\nSection 394,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 133 , related to effective date of section 381 et seq. of this title.\nSection 395,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 133 , related to special rules for application of this subchapter.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'A stock bonus, pension, profit-sharing, or annuity plan shall be considered as satisfying the requirements of subsection (a) for the period beginning with the date on which it was put into effect, or for the period beginning with the earlier of the date on which there was adopted or put into effect any amendment which caused the plan to fail to satisfy such requirements, and ending with the time prescribed by law for filing the return of the employer for his taxable year in which such plan or amendment was adopted (including extensions thereof) or such later time as the Secretary may designate, if all provisions of the plan which are necessary to satisfy such requirements are in effect by the end of such period and have been made effective for all purposes for the whole of such period.\nIf an employer adopts a stock bonus, pension, profit-sharing, or annuity plan after the close of a taxable year but before the time prescribed by law for filing the return of the employer for the taxable year (including extensions thereof), the employer may elect to treat the plan as having been adopted as of the last day of the taxable year. In the case of an individual who owns the entire interest in an unincorporated trade or business, and who is the only employee of such trade or business, any elective deferrals (as defined in section 402(g)(3)) under a qualified cash or deferred arrangement to which the preceding sentence applies, which are made by such individual before the time for filing the return of such individual for the taxable year (determined without regard to any extensions) ending after or with the end of the plan’s first plan year, shall be treated as having been made before the end of such first plan year.\nThe term “employee” includes, for any taxable year, an individual who is a self-employed individual for such taxable year.\nFor purposes of this section, the term “earned income” includes gains (other than any gain which is treated under any provision of this chapter as gain from the sale or exchange of a capital asset) and net earnings derived from the sale or other disposition of, the transfer of any interest in, or the licensing of the use of property (other than good will) by an individual whose personal efforts created such property.\nAn individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer. A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (1).\nFor purposes of this subsection, the term “self-employed individual” includes an individual described in section 3121(b)(20) (relating to certain fishermen).\nA trust forming part of a pension or profit-sharing plan which provides contributions or benefits for employees some or all of whom are owner-employees shall constitute a qualified trust under this section only if, in addition to meeting the requirements of subsection (a), the plan provides that contributions on behalf of any owner-employee may be made only with respect to the earned income of such owner-employee which is derived from the trade or business with respect to which such plan is established.\nFor purposes of this section and sections 402, 403, and 404, the term “annuity” includes a face-amount certificate, as defined in section 2(a)(15) of the Investment Company Act of 1940 (15 U.S.C., sec. 80a–2); but does not include any contract or certificate issued after  December 31, 1962 , which is transferable, if any person other than the trustee of a trust described in section 401(a) which is exempt from tax under section 501(a) is the owner of such contract or certificate.\nA profit-sharing or stock bonus plan, a pre-ERISA money purchase plan, or a rural cooperative plan shall not be considered as not satisfying the requirements of subsection (a) merely because the plan includes a qualified cash or deferred arrangement.\nA cash or deferred arrangement of any employer shall not be treated as a qualified cash or deferred arrangement if any other benefit (other than a de minimis financial incentive (not paid for with plan assets) provided to employees who elect to have the employer make contributions under the arrangement in lieu of receiving cash) is conditioned (directly or indirectly) on the employee electing to have the employer make or not make contributions under the arrangement in lieu of receiving cash. The preceding sentence shall not apply to any matching contribution (as defined in section 401(m)) made by reason of such an election.\nExcept as provided in clause (ii), any organization exempt from tax under this subtitle may include a qualified cash or deferred arrangement as part of a plan maintained by it.\nA cash or deferred arrangement shall not be treated as a qualified cash or deferred arrangement if it is part of a plan maintained by a State or local government or political subdivision thereof, or any agency or instrumentality thereof. This clause shall not apply to a rural cooperative plan or to a plan of an employer described in clause (iii).\nAn employer which is an Indian tribal government (as defined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accordance with section 7871(d)), an agency or instrumentality of an Indian tribal government or subdivision thereof, or a corporation chartered under Federal, State, or tribal law which is owned in whole or in part by any of the foregoing may include a qualified cash or deferred arrangement as part of a plan maintained by the employer.\nExcept as provided in section 401(m), any employer contribution made pursuant to an employee’s election under a qualified cash or deferred arrangement shall not be taken into account for purposes of determining whether any other plan meets the requirements of section 401(a) or 410(b). This subparagraph shall not apply for purposes of determining whether a plan meets the average benefit requirement of section 410(b)(2)(A)(ii).\nFor purposes of this subsection, the term “highly compensated employee” has the meaning given such term by section 414(q).\nA rural cooperative plan which includes a qualified cash or deferred arrangement shall not be treated as violating the requirements of section 401(a) or of paragraph (2) merely by reason of a hardship distribution or a distribution to a participant after attainment of age 59½. For purposes of this section, the term “hardship distribution” means a distribution described in paragraph (2)(B)(i)(IV) (without regard to the limitation of its application to profit-sharing or stock bonus plans).\nAny distribution of the excess contributions for any plan year shall be made to highly compensated employees on the basis of the amount of contributions by, or on behalf of, each of such employees.\nNo tax shall be imposed under section 72(t) on any amount required to be distributed under this paragraph.\nFor purposes of paragraph (2)(C), a matching contribution (within the meaning of subsection (m)) shall not be treated as forfeitable merely because such contribution is forfeitable if the contribution to which the matching contribution relates is treated as an excess contribution under subparagraph (B), an excess deferral under section 402(g)(2)(A), a permissible withdrawal under section 414(w), or an excess aggregate contribution under section 401(m)(6)(B).\nFor excise tax on certain excess contributions, see section 4979.\nFor purposes of this subsection, the term “compensation” has the meaning given such term by section 414(s).\nAn event described in this subparagraph is the termination of the plan without establishment or maintenance of another defined contribution plan (other than an employee stock ownership plan as defined in section 4975(e)(7)).\nA termination shall not be treated as described in subparagraph (A) with respect to any employee unless the employee receives a lump sum distribution by reason of the termination.\nAn employer shall be treated as meeting the requirements of clause (i)(II) for any year if, in lieu of the contributions described in such clause, the employer elects (pursuant to the terms of the arrangement) to make nonelective contributions of 2 percent of compensation for each employee who is eligible to participate in the arrangement and who has at least $5,000 of compensation from the employer for the year. If an employer makes an election under this subparagraph for any year, the employer shall notify employees of such election within a reasonable period of time before the 60th day before the beginning of such year.\nRules similar to the rules of subparagraphs (B) and (C) of section 408(p)(5) shall apply for purposes of this subparagraph.\nThe requirements of this subparagraph shall not be treated as met with respect to any year unless the employer notifies each employee eligible to participate, within a reasonable period of time before the 60th day before the beginning of such year (and, for the first year the employee is so eligible, the 60th day before the first day such employee is so eligible), of the rules similar to the rules of section 408(p)(5)(C) which apply by reason of subclause (I).\nThe requirements of this subparagraph are met for any year to which this paragraph applies if no contributions were made, or benefits were accrued, for services during such year under any qualified plan of the employer on behalf of any employee eligible to participate in the cash or deferred arrangement, other than contributions described in subparagraph (B).\nFor purposes of this paragraph, any term used in this paragraph which is also used in section 408(p) shall have the meaning given such term by such section.\nA plan meeting the requirements of this paragraph for any year shall not be treated as a top-heavy plan under section 416 for such year if such plan allows only contributions required under this paragraph.\nIn the case of an employer which applies an election under section 408(p)(2)(E)(i)(II) for purposes of the contribution requirements of this paragraph under subparagraph (B)(i)(I), rules similar to the rules of subparagraphs (B)(iii), (C)(ii)(IV), and (G) of section 408(p)(2) shall apply for purposes of subparagraphs (B)(i)(II) and (B)(ii) of this paragraph.\nThe requirements of this subparagraph are not met if, under the arrangement, the rate of matching contribution with respect to any elective contribution of a highly compensated employee at any rate of elective contribution is greater than that with respect to an employee who is not a highly compensated employee.\nThe requirements of this subparagraph are met if, under the arrangement, the employer is required, without regard to whether the employee makes an elective contribution or employee contribution, to make a contribution to a defined contribution plan on behalf of each employee who is not a highly compensated employee and who is eligible to participate in the arrangement in an amount equal to at least 3 percent of the employee’s compensation.\nAn arrangement shall not be treated as meeting the requirements of subparagraph (B) or (C) of this paragraph unless the requirements of subparagraphs (B) and (C) of paragraph (2) are met with respect to all employer contributions (including matching contributions) taken into account in determining whether the requirements of subparagraphs (B) and (C) of this paragraph are met.\nAn arrangement shall not be treated as meeting the requirements of subparagraph (B) or (C) unless such requirements are met without regard to subsection ( l ), and, for purposes of subsection ( l ), employer contributions under subparagraph (B) or (C) shall not be taken into account.\nClause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (B) or paragraph (13)(D)(i)(I) applied to the plan year.\nClause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subparagraph (C) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.\nAn arrangement shall be treated as meeting the contribution requirements under subparagraph (B) or (C) if any other plan maintained by the employer meets such requirements with respect to employees eligible under the arrangement.\nA qualified automatic contribution arrangement shall be treated as meeting the requirements of paragraph (3)(A)(ii).\nThe requirements of this subparagraph are met if, under the arrangement, each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation.\nThe rules of clauses (ii) and (iii) of paragraph (12)(B) shall apply for purposes of clause (i)(I).\nThe rules of subparagraphs (E)(ii) and (G) of paragraph (12) shall apply for purposes of subclauses (I) and (II) of clause (i).\nClause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (D)(i)(I) or paragraph (12)(B) applied to the plan year.\nClause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subparagraph (D)(i)(II) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.\nA distribution shall not be treated as failing to be made upon the hardship of an employee solely because the employee does not take any available loan under the plan.\nParagraph (2)(D)(ii) shall not apply to an employee unless the employee has met the requirement of section 410(a)(1)(A)(i) by the close of the last of the 12-month periods described in such paragraph.\nAn employer may elect to exclude all employees who are eligible to participate in a plan maintained by the employer solely by reason of paragraph (2)(D)(ii) from the application of the vesting and benefit requirements under subsections (b) and (c) of section 416.\nFor purposes of determining whether an employee described in clause (i) has a nonforfeitable right to employer contributions (other than contributions described in paragraph (3)(D)(i)) under the plan, each 12-month period for which the employee has at least 500 hours of service shall be treated as a year of service, and section 411(a)(6) shall be applied by substituting “at least 500 hours of service” for “more than 500 hours of service” in subparagraph (A) thereof.\nThis subparagraph (other than clause (iii)) shall cease to apply to any employee as of the first plan year beginning after the plan year in which the employee meets the requirements of paragraph (2)(D) without regard to paragraph (2)(D)(ii).\nParagraph (2)(D)(ii) shall not apply to employees described in section 410(b)(3).\nThe rules of section 410(a)(4) shall apply to an employee eligible to participate in an arrangement solely by reason of paragraph (2)(D)(ii).\n12-month periods shall be determined in the same manner as under the last sentence of section 410(a)(3)(A).\nA starter 401(k) deferral-only arrangement maintained by an eligible employer shall be treated as meeting the requirements of paragraph (3)(A)(ii).\nThe requirements of this subparagraph are met if, under the arrangement, each eligible employee is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation.\nFor purposes of this subparagraph, the term “qualified percentage” means, with respect to any employee, any percentage determined under the arrangement if such percentage is applied uniformly and is not less than 3 or more than 15 percent.\nIn the case of any calendar year beginning after  December 31, 2024 , the $6,000 amount under clause (i) shall be adjusted in the same manner as under section 402(g)(4), except that “2023” shall be substituted for “2005”.\nIn the case of an individual who has attained the age of 50 before the close of the taxable year, the limitation under clause (i)(II) shall be increased by the applicable amount determined under section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)).\nThe term “eligible employer” means any employer if the employer does not maintain a qualified plan with respect to which contributions are made, or benefits are accrued, for service in the year for which the determination is being made. If only individuals other than employees described in subparagraph (A) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees described in such subparagraph are eligible to participate.\nRules similar to the rules of section 408(p)(10) shall apply for purposes of clause (i).\nThe term “qualified plan” means a plan, contract, pension, account, or trust described in subparagraph (A) or (B) of paragraph (5) of section 219(g) (determined without regard to the last sentence of such paragraph (5)).\nThe term “eligible employee” means any employee of the employer who meets the minimum age and service conditions described in section 410(a)(1).\nThe employer may elect to exclude from such definition any employee described in paragraph (3) or (4) of section 410(b).\nThe term “excess contribution percentage” means the percentage of compensation which is contributed by the employer under the plan with respect to that portion of each participant’s compensation in excess of the integration level.\nThe term “base contribution percentage” means the percentage of compensation contributed by the employer under the plan with respect to that portion of each participant’s compensation not in excess of the integration level.\nFor purposes of this subparagraph, the excess and base benefit percentages shall be computed in the same manner as the excess and base contribution percentages under paragraph (2)(B), except that such determination shall be made on the basis of benefits attributable to employer contributions rather than contributions.\nAny reductions under clause (i) shall be based on the percentages of compensation replaced by the employer-derived portions of primary insurance amounts under the Social Security Act for participants with compensation in excess of covered compensation.\nThe term “offset plan” means any plan with respect to which the benefit attributable to employer contributions for each participant is reduced by an amount specified in the plan.\nThe term “integration level” means the amount of compensation specified under the plan (by dollar amount or formula) at or below which the rate at which contributions or benefits are provided (expressed as a percentage) is less than such rate above such amount.\nThe integration level for any year may not exceed the contribution and benefit base in effect under section 230 of the Social Security Act for such year.\nA plan’s integration level shall apply with respect to all participants in the plan.\nUnder rules prescribed by the Secretary, a defined benefit plan may specify multiple integration levels.\nThe term “compensation” has the meaning given such term by section 414(s).\nA participant’s final average compensation shall be determined by not taking into account in any year compensation in excess of the contribution and benefit base in effect under section 230 of the Social Security Act for such year.\nThe term “covered compensation” means, with respect to an employee, the average of the contribution and benefit bases in effect under section 230 of the Social Security Act for each year in the 35-year period ending with the year in which the employee attains the social security retirement age.\nFor purposes of clause (i), the determination for any year preceding the year in which the employee attains the social security retirement age shall be made by assuming that there is no increase in the bases described in clause (i) after the determination year and before the employee attains the social security retirement age.\nFor purposes of this subparagraph, the term “social security retirement age” has the meaning given such term by section 415(b)(8).\nIn determining whether a plan which includes employees of a railroad employer who are entitled to benefits under the Railroad Retirement Act of 1974 meets the requirements of this subsection, rules similar to the rules set forth in this subsection shall apply. Such rules shall take into account the employer-derived portion of the employees’ tier 2 railroad retirement benefits and any supplemental annuity under the Railroad Retirement Act of 1974.\nA defined contribution plan shall be treated as meeting the requirements of subsection (a)(4) with respect to the amount of any matching contribution or employee contribution for any plan year only if the contribution percentage requirement of paragraph (2) of this subsection is met for such plan year.\nIf two or more plans of an employer to which matching contributions, employee contributions, or elective deferrals are made are treated as one plan for purposes of section 410(b), such plans shall be treated as one plan for purposes of this subsection. If a highly compensated employee participates in two or more plans of an employer to which contributions to which this subsection applies are made, all such contributions shall be aggregated for purposes of this subsection.\nThe term “elective deferral” means any employer contribution described in section 402(g)(3).\nAny employee who is eligible to make an employee contribution (or, if the employer takes elective contributions into account, elective contributions) or to receive a matching contribution under the plan being tested under paragraph (1) shall be considered an eligible employee for purposes of this subsection.\nIf an employee contribution is required as a condition of participation in the plan, any employee who would be a participant in the plan if such employee made such a contribution shall be treated as an eligible employee on behalf of whom no employer contributions are made.\nIf an employer elects to apply section 410(b)(4)(B) in determining whether a plan meets the requirements of section 410(b), the employer may, in determining whether the plan meets the requirements of paragraph (2), exclude from consideration all eligible employees (other than highly compensated employees) who have not met the minimum age and service requirements of section 410(a)(1)(A).\nA plan shall not be treated as failing to meet the requirements of paragraph (1) for any plan year if, before the close of the following plan year, the amount of the excess aggregate contributions for such plan year (and any income allocable to such contributions through the end of such year) is distributed (or, if forfeitable, is forfeited). Such contributions (and such income) may be distributed without regard to any other provision of law.\nAny distribution of the excess aggregate contributions for any plan year shall be made to highly compensated employees on the basis of the amount of contributions on behalf of, or by, each such employee. Forfeitures of excess aggregate contributions may not be allocated to participants whose contributions are reduced under this paragraph.\nNo tax shall be imposed under section 72(t) on any amount required to be distributed under paragraph (6).\nAny distribution attributable to employee contributions shall not be included in gross income except to the extent attributable to income on such contributions.\nFor purposes of this subsection, the term “highly compensated employee” has the meaning given to such term by section 414(q).\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection and subsection (k), including regulations permitting appropriate aggregation of plans and contributions.\nFor purposes of subparagraph (A)(iii), subsection (a)(4), and section 410(b), matching contributions described in paragraph (4)(A)(iii) shall not fail to be treated as available to an employee solely because such employee does not have debt incurred under a qualified education loan (as defined in section 221(d)(1)).\nExcept as provided in clause (iii), a qualified student loan payment shall not be treated as a contribution to a plan under this title.\nSolely for purposes of meeting the requirements of paragraph (11)(B), (12), or (13) of this subsection, or paragraph (11)(B)(i)(II), (12)(B), (13)(D), or (16)(D) of subsection (k), a plan may treat a qualified student loan payment as an elective deferral or an elective contribution, whichever is applicable.\nIn determining whether a plan meets the requirements of subsection (k)(3)(A)(ii) for a plan year, the plan may apply the requirements of such subsection separately with respect to all employees who receive matching contributions described in paragraph (4)(A)(iii) for the plan year.\nThe employer may rely on an employee certification of payment under paragraph (4)(D)(ii).\nFor excise tax on certain excess contributions, see section 4979.\nThe Secretary shall prescribe such rules or regulations as may be necessary to coordinate the requirements of subsection (a)(13)(B) and section 414(p) (and the regulations issued by the Secretary of Labor thereunder) with the other provisions of this chapter.\nFor purposes of subparagraphs (E) and (G), a plan described in section 413(c) shall be treated as a single plan rather than as separate plans maintained by each employer in the plan.\nRules similar to the rules of paragraph (1)(B)(ii) shall apply for purposes of clause (i).\nIn the case of a defined contribution plan which provides benefits, rights, or features to a closed class of participants whose accruals under a defined benefit plan have been reduced or eliminated, the plan shall not fail to satisfy the requirements of subsection (a)(4) solely by reason of the composition of the closed class or the benefits, rights, or features provided to such closed class if the defined contribution plan and defined benefit plan otherwise meet the requirements of subparagraph (A) but for the fact that the make-whole contributions under the defined contribution plan are made in whole or in part through matching contributions.\nFor purposes of this paragraph, if a portion of a defined contribution plan described in subparagraph (A) or (C) is spun off to another employer, the treatment under subparagraph (A) or (C) of the spun-off plan shall continue with respect to the other employer if such plan continues to comply with the requirements of clauses (ii) (if the original plan was still within the 3-year period described in such clause at the time of the spin off) and (iii) of subparagraph (A), as determined for purposes of subparagraph (A) or (C), whichever is applicable.\nExcept as otherwise provided in paragraph (2)(C), the term “make-whole contributions” means nonelective allocations for each employee in the class which are reasonably calculated, in a consistent manner, to replace some or all of the retirement benefits which the employee would have received under the defined benefit plan and any other plan or qualified cash or deferred arrangement under subsection (k)(2) if no change had been made to such defined benefit plan and such other plan or arrangement. For purposes of the preceding sentence, consistency shall not be required with respect to employees who were subject to different benefit formulas under the defined benefit plan.\nReferences to a closed class of participants and similar references to a closed class shall include arrangements under which 1 or more classes of participants are closed, except that 1 or more classes of participants closed on different dates shall not be aggregated for purposes of determining the date any such class was closed.\nThe term “highly compensated employee” has the meaning given such term in section 414(q).\nFor exemption from tax of a trust qualified under this section, see section 501(a).\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.\nPub. L. 117–328, div. T, title I, §\u202f123 ,  Dec. 29, 2022 ,  136 Stat. 5313 , provided that, applicable to plan years beginning after  Dec. 31, 2027 , subsection (a)(35) of this section is amended by adding at the end the following new subparagraph:\n“(I)  ESOP rules relating to publicly traded securities .—In the case of an applicable defined contribution plan which is an employee stock ownership plan, an employer security shall be treated as described in subparagraph (G)(v) if—\n“(i) the security is the subject of priced quotations by at least 4 dealers, published and made continuously available on an interdealer quotation system (as such term is used in section 13 of the Securities Exchange Act of 1934) which has made the request described in section 6(j) of such Act to be treated as an alternative trading system,\n“(ii) the security is not a penny stock (as defined by section 3(a)(51) of such Act),\n“(iii) the security is issued by a corporation which is not a shell company (as such term is used in section 4(d)(6) of the Securities Act of 1933), a blank check company (as defined in section 7(b)(3) of such Act), or subject to bankruptcy proceedings,\n“(iv) the security has a public float (as such term is used in section 240.12b-2 of title 17, Code of Federal Regulations) which has a fair market value of at least $1,000,000 and constitutes at least 10 percent of the total shares issued and outstanding.\n“(v) in the case of a security issued by a domestic corporation, the issuer publishes, not less frequently than annually, financial statements audited by an independent auditor registered with the Public Company Accounting Oversight Board established under the Sarbanes-Oxley Act of 2002, and\n“(vi) in the case of a security issued by a foreign corporation, the security is represented by a depositary share (as defined under section 240.12b-2 of title 17, Code of Federal Regulations), or is issued by a foreign corporation incorporated in Canada and readily tradeable on an established securities market in Canada, and the issuer—\n“(I) is subject to, and in compliance with, the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m  or 78o(d)),\n“(II) is subject to, and in compliance with, the reporting requirements of section 230.257 of title 17, Code of Federal Regulations, or\n“(III) is exempt from such requirements under section 240.12g3–2(b) of title 17, Code of Federal Regulations.”\nSee 2022 Amendment note below.\nPub. L. 117–328, div. T, title I, §\u202f125(a)(2)(B)(ii) , (c), (f)(1),  Dec. 29, 2022 ,  136 Stat. 5315 , 5316, provided that, applicable to plan years beginning after  Dec. 31, 2024 , subsection (k) of this section is amended as follows:\n(1) in paragraph (2)(D)(ii), by striking “3” and inserting “2”; and\n(2) in paragraph (15)(B)(i), by inserting “,\u2000or by reason of such paragraph and section 202(c)(1)(B) of the Employee Retirement Income Security Act of 1974” after “paragraph (2)(D)(ii)”.\nSee 2022 Amendment notes below.\nPub. L. 117–328, div. T, title III, §\u202f334(a) , (b)(1), (e),  Dec. 29, 2022 ,  136 Stat. 5368 , 5370, 5372, provided that, applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , this section is amended as follows:\n(1) in subsection (a), by inserting after paragraph (38) the following new paragraph:\n“(39)  Qualified long-term care distributions\n“(A)  In general .—A trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust under this section solely by reason of allowing qualified long-term care distributions.\n“(B)  Qualified long-term care distribution .—For purposes of this paragraph—\n“(i)  In general .—The term ‘qualified long-term care distribution’ means so much of the distributions made during the taxable year as does not exceed, in the aggregate, the least of the following:\n“(I) The amount paid by or assessed to the employee during the taxable year for or with respect to certified long-term care insurance for the employee or the employee’s spouse (or other family member of the employee as provided by the Secretary by regulation).\n“(II) An amount equal to 10 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan.\n“(III) $2,500.\n“(ii)  Adjustment for inflation .—In the case of taxable years beginning after  December 31, 2024 , the $2,500 amount in clause (i)(II) shall be increased by an amount equal to—\n“(I) such dollar amount, multiplied by\n“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.\nIf any increase under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100.\n“(C)  Certified long-term care insurance .—The term ‘certified long-term care insurance’ means—\n“(i) a qualified long-term care insurance contract (as defined in section 7702B(b)) covering qualified long-term care services (as defined in section 7702B(c)),\n“(ii) coverage of the risk that an insured individual would become a chronically ill individual (within the meaning of section 101(g)(4)(B)) under a rider or other provision of a life insurance contract which satisfies the requirements of section 101(g)(3) (determined without regard to subparagraph (D) thereof), or\n“(iii) coverage of qualified long-term care services (as so defined) under a rider or other provision of an insurance or annuity contract which is treated as a separate contract under section 7702B(e) and satisfies the requirements of section 7702B(g),\nif such coverage provides meaningful financial assistance in the event the insured needs home-based or nursing home care. For purposes of the preceding sentence, coverage shall not be deemed to provide meaningful financial assistance unless benefits are adjusted for inflation and consumer protections are provided, including protection in the event the coverage is terminated.\n“(D)  Distributions must otherwise be includible .—Rules similar to the rules of section 402(l)(3) shall apply for purposes of this paragraph.\n“(E)  Long-term care premium statement.—\n“(i)  In general .—No distribution shall be treated as a qualified long-term care distribution unless a long-term care premium statement with respect to the employee has been filed with the plan.\n“(ii)  Long-term care premium statement .—For purposes of this paragraph, a long-term care premium statement is a statement provided by the issuer of long-term care coverage, upon request by the owner of such coverage, which includes—\n“(I) the name and taxpayer identification number of such issuer,\n“(II) a statement that the coverage is certified long-term care insurance,\n“(III) identification of the employee as the owner of such coverage,\n“(IV) identification of the individual covered and such individual’s relationship to the employee,\n“(V) the premiums owed for the coverage for the calendar year, and\n“(VI) such other information as the Secretary may require.\n“(iii)  Filing with secretary .—A long-term care premium statement will be accepted only if the issuer has completed a disclosure to the Secretary for the specific coverage product to which the statement relates. Such disclosure shall identify the issuer, type of coverage, and such other information as the Secretary may require which is included in the filing of the product with the applicable State authority.”; and\n(2) in subsection (k)(2)(B)(i), by striking “or” at the end of subclause (V), by adding “or” at the end of subclause (VI), and by adding at the end the following new subclause:\n“(VII) as provided in section 401(a)(39),”.\nSee 2022 Amendment notes below.\nThe Employee Retirement Income Security Act of 1974, referred to in subsec. (a)(12), (13)(C)(i)(II), (III), (iii)(II), (33)(C), (34), (35)(G)(iii), (36)(B), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Part 4 of subtitle B of title I of the Act is classified generally to part 4 (§\u202f1101 et seq.) of subtitle B of subchapter I of chapter 18 of Title 29, Labor. Title IV of the Act is classified generally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29. Sections 407, 412, 4021, 4050, and 4203 of the Act are classified to sections 1107, 1112, 1321, 1350, and 1383, respectively, of Title 29. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe Social Security Act, referred to in subsecs. (a)(15), ( l )(4)(C)(ii), (5)(A)(ii), (D)(ii), (E)(i), (F), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. Title II of the Social Security Act is classified generally to subchapter II (§\u202f401 et seq.) of Title 42. Sections 223(d) and 230 of the Social Security Act are classified to sections 423(d) and 430, respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 521 of the Unemployment Compensation Amendments of 1992, referred to in subsec. (a)(20), is  section 521 of Pub. L. 102–318 , which amended section 402(a) to (f) of this title generally, and, as so amended, subsec. (a) of section 402 does not contain a par. (6)(B).\nThe Railroad Retirement Act of 1974, referred to in subsec. ( l )(6), is  act Aug. 29, 1935, ch. 812 , as amended generally by  Pub. L. 93–445, title I, §\u202f101 ,  Oct. 16, 1974 ,  88 Stat. 1305 , which is classified generally to subchapter IV (§\u202f231 et seq.) of chapter 9 of Title 45, Railroads. For further details and complete classification of this Act to the Code, see Codification note set out preceding  section 231 of Title 45 ,  section 231t of Title 45 , and Tables.\nSection 472 of the Higher Education Act of 1965, as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997, referred to in subsec. (m)(4)(D), means  section 472 of Pub. L. 89–329 , which is classified to section 1087 ll  of Title 20, Education, as in effect on the day before the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\n2022—Subsec. (a)(9)(B)(iv).  Pub. L. 117–328, §\u202f327(a) , amended cl. (iv) generally. Prior to amendment, text read as follows: “If the designated beneficiary referred to in clause (iii)(I) is the surviving spouse of the employee—\n“(I) the date on which the distributions are required to begin under clause (iii)(III) shall not be earlier than the date on which the employee would have attained the applicable age, and\n“(II) if the surviving spouse dies before the distributions to such spouse begin, this subparagraph shall be applied as if the surviving spouse were the employee.”\nSubsec. (a)(9)(B)(iv)(I).  Pub. L. 117–328, §\u202f107(b) , substituted “the applicable age” for “age 72”.\nSubsec. (a)(9)(C)(i)(I).  Pub. L. 117–328, §\u202f107(a) , substituted “the applicable age” for “age 72”.\nSubsec. (a)(9)(C)(ii)(I).  Pub. L. 117–328, §\u202f107(b) , substituted “the applicable age” for “age 72”.\nSubsec. (a)(9)(C)(v).  Pub. L. 117–328, §\u202f107(c) , added cl. (v).\nSubsec. (a)(9)(H)(iv)(II).  Pub. L. 117–328, §\u202f337(a) , substituted “no beneficiary” for “no individual”.\nSubsec. (a)(9)(H)(v).  Pub. L. 117–328, §\u202f337(b) , inserted concluding provisions.\nSubsec. (a)(9)(J).  Pub. L. 117–328, §\u202f201(a) , added subpar. (J).\nSubsec. (a)(31)(B)(ii).  Pub. L. 117–328, §\u202f304(a) , substituted “$7,000” for “$5,000”.\nSubsec. (a)(35)(I).  Pub. L. 117–328, §\u202f123(a) , added subpar. (I).\nSubsec. (a)(39).  Pub. L. 117–328, §\u202f334(a) , added par. (39).\nSubsec. (b)(2).  Pub. L. 117–328, §\u202f317(a) , inserted at end “In the case of an individual who owns the entire interest in an unincorporated trade or business, and who is the only employee of such trade or business, any elective deferrals (as defined in section 402(g)(3)) under a qualified cash or deferred arrangement to which the preceding sentence applies, which are made by such individual before the time for filing the return of such individual for the taxable year (determined without regard to any extensions) ending after or with the end of the plan’s first plan year, shall be treated as having been made before the end of such first plan year.”\nSubsec. (b)(3).  Pub. L. 117–328, §\u202f316(a) , added par. (3).\nSubsec. (k)(2)(B)(i)(VII).  Pub. L. 117–328, §\u202f334(b)(1) , added subcl. (VII).\nSubsec. (k)(2)(D)(ii).  Pub. L. 117–328, §\u202f125(c) , substituted “2” for “3”.\nSubsec. (k)(4)(A).  Pub. L. 117–328, §\u202f113(a) , inserted “(other than a de minimis financial incentive (not paid for with plan assets) provided to employees who elect to have the employer make contributions under the arrangement in lieu of receiving cash)” after “any other benefit”.\nSubsec. (k)(11)(B)(i)(I).  Pub. L. 117–328, §\u202f117(g)(1) , inserted before comma at end “(after the application of any election under section 408(p)(2)(E)(i)(II))”.\nSubsec. (k)(11)(B)(i)(III), (IV).  Pub. L. 117–328, §\u202f116(b)(2) , (3), added subcl. (III), redesignated former subcl. (III) as (IV), and substituted “,\u2000(II), or (III)” for “or (II)” in subcl. (IV).\nSubsec. (k)(11)(E).  Pub. L. 117–328, §\u202f117(g)(2) , added subpar. (E).\nSubsec. (k)(12)(G).  Pub. L. 117–328, §\u202f401(b)(2) , substituted “the contribution requirements under subparagraph (B) or (C)” for “the requirements under subparagraph (A)(i)”.\nSubsec. (k)(13)(D)(iv).  Pub. L. 117–328, §\u202f401(b)(3) , substituted “and (G)” for “and (F)”.\nSubsec. (k)(14)(C).  Pub. L. 117–328, §\u202f312(a) , added subpar. (C).\nSubsec. (k)(15)(B)(i).  Pub. L. 117–328, §\u202f125(a)(2)(B)(ii) , in introductory provisions, inserted “,\u2000or by reason of such paragraph and section 202(c)(1)(B) of the Employee Retirement Income Security Act of 1974” after “paragraph (2)(D)(ii)”.\nSubsec. (k)(15)(B)(i)(II).  Pub. L. 117–328, §\u202f401(a)(2)(A) , substituted “paragraphs (2), (11), and (12) of subsection (m)” for “subsection (m)(2)”.\nSubsec. (k)(15)(B)(iii).  Pub. L. 117–328, §\u202f401(a)(2)(B) , substituted “under the plan” for “under the arrangement”.\nSubsec. (k)(15)(B)(iv).  Pub. L. 117–328, §\u202f401(a)(2)(C) , substituted “paragraph (2)(D)” for “section 410(a)(1)(A)(ii)”.\nSubsec. (k)(16).  Pub. L. 117–328, §\u202f121(a) , added par. (16).\nSubsec. (m)(4)(A)(iii).  Pub. L. 117–328, §\u202f110(a) , added cl. (iii).\nSubsec. (m)(4)(D).  Pub. L. 117–328, §\u202f110(b) , added subpar. (D).\nSubsec. (m)(12)(B), (C).  Pub. L. 117–328, §\u202f401(a)(1) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (m)(13), (14).  Pub. L. 117–328, §\u202f110(c) , added par. (13) and redesignated former par. (13) as (14).\n2020—Subsec. (a)(9)(I).  Pub. L. 116–136  added subpar. (I).\nSubsec. (a)(36).  Pub. L. 116–260  amended par. (36) generally. Prior to amendment, text read as follows: “A trust forming part of a pension plan shall not be treated as failing to constitute a qualified trust under this section solely because the plan provides that a distribution may be made from such trust to an employee who has attained age 59½ and who is not separated from employment at the time of such distribution.”\n2019—Subsec. (a)(9)(B)(iv)(I).  Pub. L. 116–94, §\u202f114(b) , substituted “age 72” for “age 70½”.\nSubsec. (a)(9)(C)(i)(I).  Pub. L. 116–94, §\u202f114(a) , substituted “age 72” for “age 70½”.\nSubsec. (a)(9)(C)(ii)(I).  Pub. L. 116–94, §\u202f114(b) , substituted “age 72” for “age 70½”.\nSubsec. (a)(9)(E).  Pub. L. 116–94, §\u202f401(a)(2) , amended subpar. (E) generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the term ‘designated beneficiary’ means any individual designated as a beneficiary by the employee.”\nSubsec. (a)(9)(H).  Pub. L. 116–94, §\u202f401(a)(1) , added subpar. (H).\nSubsec. (a)(26)(I).  Pub. L. 116–94, §\u202f205(b) , added subpar. (I).\nSubsec. (a)(36).  Pub. L. 116–94, §\u202f104(a) , substituted “age 59½” for “age 62”.\nSubsec. (a)(38).  Pub. L. 116–94, §\u202f109(a) , added par. (38).\nSubsec. (b).  Pub. L. 116–94, §\u202f201(a) , substituted “plan amendments” for “retroactive changes in plan” in heading, designated existing provisions as par. (1) and inserted heading, and added par. (2).\nSubsec. (k)(2)(B)(i)(VI).  Pub. L. 116–94, §\u202f109(b)(1) , added subcl. (VI).\nSubsec. (k)(2)(B)(iii).  Pub. L. 116–94, §\u202f109(b)(2) , added cl. (iii).\nSubsec. (k)(2)(D).  Pub. L. 116–94, §\u202f112(a)(1) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “which does not require, as a condition of participation in the arrangement, that an employee complete a period of service with the employer (or employers) maintaining the plan extending beyond the period permitted under section 410(a)(1) (determined without regard to subparagraph (B)(i) thereof).”\nSubsec. (k)(12)(A).  Pub. L. 116–94, §\u202f103(a)(1) , added cls. (i) and (ii) and struck out former cls. (i) and (ii) which read as follows:\n“(i) meets the contribution requirements of subparagraph (B) or (C), and\n“(ii) meets the notice requirements of subparagraph (D).”\nSubsec. (k)(12)(F), (G).  Pub. L. 116–94, §\u202f103(b) , added subpar. (F) and redesignated former subpar. (F) as (G).\nSubsec. (k)(13)(B).  Pub. L. 116–94, §\u202f103(a)(2) , substituted “means a cash or deferred arrangement—” for “means any cash or deferred arrangement which meets the requirements of subparagraphs (C) through (E).” and added cls. (i) and (ii).\nSubsec. (k)(13)(C)(iii).  Pub. L. 116–94, §\u202f102(a) , substituted “does not exceed 15 percent (10 percent during the period described in subclause (I))” for “does not exceed 10 percent” in introductory provisions.\nSubsec. (k)(13)(F).  Pub. L. 116–94, §\u202f103(c) , added subpar. (F).\nSubsec. (k)(15).  Pub. L. 116–94, §\u202f112(a)(2) , added par. (15).\nSubsecs. ( o ), (p).  Pub. L. 116–94, §\u202f205(a) , added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n2018—Subsec. (a)(2).  Pub. L. 115–141, §\u202f401(a)(69) , substituted “determination));” for “determination).;”.\nSubsec. (a)(15).  Pub. L. 115–141, §\u202f401(a)(70) , substituted “A trust” for “a trust” in introductory provisions.\nSubsec. (a)(32)(A).  Pub. L. 115–141, §\u202f401(a)(71) , substituted “section 430(j)(4) or 433(f)(5)” for “section section 430(j)(4) or 433(f)(5)” in two places.\nSubsec. (c)(2)(A)(iii).  Pub. L. 115–141, §\u202f401(a)(72) , substituted “subparagraph (A), (C), or (D) of section 3121(d)(3), without regard to section 1402(c)(2)” for “sections 3121(d)(3)(A), (C), or (D), without regard to paragraph (2) of section 1402(c)”.\nSubsec. (k)(2)(B)(i)(IV).  Pub. L. 115–123, §\u202f41114(b) , amended subcl. (IV) generally. Prior to amendment, subcl. (IV) read as follows: “in the case of contributions to a profit-sharing or stock bonus plan to which section 402(e)(3) applies, upon hardship of the employee, or”.\nSubsec. (k)(14).  Pub. L. 115–123, §\u202f41114(a) , added par. (14).\n2014—Subsec. (a)(9)(H).  Pub. L. 113–295  struck out subpar. (H) which related to a waiver from the minimum distribution requirements of subsec. (a)(9) during calendar year 2009 for certain defined contribution and individual retirement plans.\nSubsec. (a)(29).  Pub. L. 113–97, §\u202f202(c)(3)(A) , substituted “multiemployer plan or a CSEC plan” for “multiemployer plan”.\nSubsec. (a)(32)(A).  Pub. L. 113–97, §\u202f202(c)(5)(A) , substituted “430(j)(4) or 433(f)(5)” for “430(j)(4)” in two places.\nSubsec. (a)(32)(C).  Pub. L. 113–97, §\u202f202(c)(5)(B) , substituted “430(j)(3) or 433(f) by reason of section 430(j)(4)(A) or 433(f)(5), respectively” for “430(j)(3) by reason of section 430(j)(4)(A) thereof”.\nSubsec. (a)(33)(C).  Pub. L. 113–97, §\u202f202(c)(4) , substituted “multiemployer plans or CSEC plans” for “multiemployer plans”.\n2010—Subsec. (h).  Pub. L. 111–152  inserted at end “For purposes of this subsection, the term ‘dependent’ shall include any individual who is a child (as defined in section 152(f)(1)) of a retired employee who as of the end of the calendar year has not attained age 27.”\n2008—Subsec. (a)(9)(H).  Pub. L. 110–458, §\u202f201(a) , added subpar. (H).\nSubsec. (a)(29).  Pub. L. 110–458, §\u202f101(d)(2)(A) , struck out “on plans in at-risk status” after “limitations” in heading.\nSubsec. (a)(32)(C).  Pub. L. 110–458, §\u202f101(d)(2)(B) , substituted “section 430(j)(3)” for “section 430(j)” and “section 430(j)(4)(A)” for “paragraph (5)(A)”.\nSubsec. (a)(33)(B)(iii).  Pub. L. 110–458, §\u202f101(d)(2)(C)(i) , substituted “section 412(d)(2)” for “section 412(c)(2)”.\nSubsec. (a)(33)(D).  Pub. L. 110–458, §\u202f101(d)(2)(C)(ii) , substituted “section 412(b)(1), without regard to section 412(b)(2)” for “section 412(b)(2) (without regard to subparagraph (B) thereof)”.\nSubsec. (a)(35)(E)(iv).  Pub. L. 110–458, §\u202f109(a) , amended cl. (iv) generally. Prior to amendment, text read as follows: “For purposes of clause (iii), the term ‘one-participant retirement plan’ means a retirement plan that—\n“(I) on the first day of the plan year covered only one individual (or the individual and the individual’s spouse) and the individual owned 100 percent of the plan sponsor (whether or not incorporated), or covered only one or more partners (or partners and their spouses) in the plan sponsor,\n“(II) meets the minimum coverage requirements of section 410(b) without being combined with any other plan of the business that covers the employees of the business,\n“(III) does not provide benefits to anyone except the individual (and the individual’s spouse) or the partners (and their spouses),\n“(IV) does not cover a business that is a member of an affiliated service group, a controlled group of corporations, or a group of businesses under common control, and\n“(V) does not cover a business that uses the services of leased employees (within the meaning of section 414(n)).\nFor purposes of this clause, the term ‘partner’ includes a 2-percent shareholder (as defined in section 1372(b)) of an S corporation.”\nSubsec. (a)(37).  Pub. L. 110–245  added par. (37).\nSubsec. (k)(8)(E).  Pub. L. 110–458, §\u202f109(b)(2) , substituted “permissible withdrawal” for “erroneous automatic contribution” in heading and “a permissible withdrawal” for “an erroneous automatic contribution” in text.\nSubsec. (k)(13)(D)(i)(I).  Pub. L. 110–458, §\u202f109(b)(1) , substituted “such contributions as exceed 1 percent but do not” for “such compensation as exceeds 1 percent but does not”.\n2006—Subsec. (a)(5)(G).  Pub. L. 109–280, §\u202f861(a)(1) , (b)(1), substituted “Governmental” for “State and local governmental” in heading and “section 414(d))” for “section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof)” in text.\nSubsec. (a)(26)(G).  Pub. L. 109–280, §\u202f861(a)(1) , (b)(2), substituted “Exception for” for “Exception for state and local” in heading and “section 414(d))” for “section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof)” in text.\nSubsec. (a)(28)(B)(v).  Pub. L. 109–280, §\u202f901(a)(2)(A) , added cl. (v).\nSubsec. (a)(29).  Pub. L. 109–280, §\u202f114(a)(1) , amended heading and text of par. (29) generally, substituting provisions relating to benefit limitations on plans in at-risk status for provisions relating to security required upon adoption of plan amendment resulting in significant underfunding.\nSubsec. (a)(32)(A).  Pub. L. 109–280, §\u202f114(a)(2)(A) , substituted “section 430(j)(4)” for “412(m)(5)” in two places.\nSubsec. (a)(32)(C).  Pub. L. 109–280, §\u202f114(a)(2)(B) , substituted “section 430(j)” for “section 412(m)”.\nSubsec. (a)(33)(B)(i).  Pub. L. 109–280, §\u202f114(a)(3)(A) , which directed amendment of cl. (i) by substituting “funding target attainment percentage (as defined in section 430(d)(2))” for “funded current liability percentage (within the meaning of section 412( l )(8))”, was executed by making the substitution for “funded current liability percentage (as defined in section 412( l )(8))”, to reflect the probable intent of Congress.\nSubsec. (a)(33)(B)(iii).  Pub. L. 109–280, §\u202f114(a)(3)(B) , substituted “section 412(c)(2)” for “subsection 412(c)(8)”.\nSubsec. (a)(33)(D).  Pub. L. 109–280, §\u202f114(a)(3)(C) , substituted “section 412(b)(2) (without regard to subparagraph (B) thereof)” for “section 412(c)(11) (without regard to subparagraph (B) thereof)”.\nSubsec. (a)(35).  Pub. L. 109–280, §\u202f901(a)(1) , added par. (35).\nSubsec. (a)(36).  Pub. L. 109–280, §\u202f905(b) , added par. (36).\nSubsec. (k)(2)(B)(i)(V).  Pub. L. 109–280, §\u202f827(b)(1) , added subcl. (V).\nSubsec. (k)(3)(G).  Pub. L. 109–280, §\u202f861(a)(2) , (b)(3), inserted heading and struck out “maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof)” after “414(d))” in text.\nSubsec. (k)(8)(A)(i).  Pub. L. 109–280, §\u202f902(e)(3)(B)(i) , inserted “through the end of such year” after “such contributions”.\nSubsec. (k)(8)(E).  Pub. L. 109–280, §\u202f902(d)(2)(C) , (D), inserted “or erroneous automatic contribution” after “or contribution” in heading and inserted “an erroneous automatic contribution under section 414(w),” after “402(g)(2)(A),” in text.\nSubsec. (k)(13).  Pub. L. 109–280, §\u202f902(a) , added par. (13).\nSubsec. (m)(6)(A).  Pub. L. 109–280, §\u202f902(e)(3)(B)(ii) , inserted “through the end of such year” after “to such contributions”.\nSubsec. (m)(12), (13).  Pub. L. 109–280, §\u202f902(b) , added par. (12) and redesignated former par. (12) as (13).\n2004—Subsec. (a)(26)(C) to (I).  Pub. L. 108–311  redesignated subpars. (D) to (I) as (C) to (H), respectively, and struck out heading and text of former subpar. (C). Text read as follows: “In the case of contributions under section 401(k) or 401(m), employees who are eligible to contribute (or may elect to have contributions made on their behalf) shall be treated as benefiting under the plan.”\n2002—Subsec. (a)(30).  Pub. L. 107–147, §\u202f411 ( o )(2), substituted “402(g)(1)(A)” for “402(g)(1)”.\nSubsec. (a)(31)(C)(i).  Pub. L. 107–147, §\u202f411(q)(1) , inserted “is a qualified trust which is part of a plan which is a defined contribution plan and” before “agrees”.\n2001—Subsec. (a)(17).  Pub. L. 107–16, §\u202f611(c)(1) , substituted “$200,000” for “$150,000” in two places.\nSubsec. (a)(17)(B).  Pub. L. 107–16, §\u202f611(c)(2) , substituted “ July 1, 2001 ” for “ October 1, 1993 ” and substituted “$5,000” for “$10,000” in two places.\nSubsec. (a)(31).  Pub. L. 107–16, §\u202f657(a)(2)(A) , substituted “Direct” for “Optional direct” in heading.\nSubsec. (a)(31)(B).  Pub. L. 107–16, §\u202f657(a)(1) , added subpar. (B). Former subpar. (B) redesignated (C).\nPub. L. 107–16, §\u202f643(b) , inserted at end “The preceding sentence shall not apply to such distribution if the plan to which such distribution is transferred—\n“(i) agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible, or\n“(ii) is an eligible retirement plan described in clause (i) or (ii) of section 402(c)(8)(B).”\nPub. L. 107–16, §\u202f641(e)(3) , substituted “,\u2000403(a)(4), 403(b)(8), and 457(e)(16)” for “and 403(a)(4)”.\nSubsec. (a)(31)(C).  Pub. L. 107–16, §\u202f657(a)(2)(B) , substituted “Subparagraphs (A) and (B)” for “Subparagraph (A)”.\nPub. L. 107–16, §\u202f657(a)(1) , redesignated subpar. (B) as (C). Former subpar. (C) redesignated (D).\nSubsec. (a)(31)(D), (E).  Pub. L. 107–16, §\u202f657(a)(1) , redesignated subpars. (C) and (D) as (D) and (E), respectively.\nSubsec. (c)(2)(A).  Pub. L. 107–16, §\u202f611(g)(1) , inserted at end “For purposes of this part only (other than sections 419 and 419A), this subparagraph shall be applied as if the term ‘trade or business’ for purposes of section 1402 included service described in section 1402(c)(6).”\nSubsec. (k)(2)(B)(i)(I).  Pub. L. 107–16, §\u202f646(a)(1)(A) , substituted “severance from employment” for “separation from service”.\nSubsec. (k)(10).  Pub. L. 107–16, §\u202f646(a)(1)(C)(iii) , struck out “or disposition of assets or subsidiary” after “plan” in heading.\nSubsec. (k)(10)(A).  Pub. L. 107–16, §\u202f646(a)(1)(B) , reenacted heading without change and amended text generally, substituting present provisions for provisions including termination of plan, disposition of assets, and disposition of subsidiary as events described in this paragraph.\nSubsec. (k)(10)(B)(i).  Pub. L. 107–16, §\u202f646(a)(1)(C)(i) , substituted “A termination” for “An event” and “the termination” for “the event”.\nSubsec. (k)(10)(C).  Pub. L. 107–16, §\u202f646(a)(1)(C)(ii) , struck out heading and text of subpar. (C). Text read as follows: “An event shall not be treated as described in clause (ii) or (iii) of subparagraph (A) unless the transferor corporation continues to maintain the plan after the disposition.”\nSubsec. (k)(11)(B)(i)(I).  Pub. L. 107–16, §\u202f611(f)(3)(A) , substituted “the amount in effect under section 408(p)(2)(A)(ii)” for “$6,000”.\nSubsec. (k)(11)(E).  Pub. L. 107–16, §\u202f611(f)(3)(B) , struck out heading and text of subpar. (E). Text read as follows: “The Secretary shall adjust the $6,000 amount under subparagraph (B)(i)(I) at the same time and in the same manner as under section 408(p)(2)(E).”\nSubsec. (m)(9).  Pub. L. 107–16, §\u202f666(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection and subsection (k) including—\n“(A) such regulations as may be necessary to prevent the multiple use of the alternative limitation with respect to any highly compensated employee, and\n“(B) regulations permitting appropriate aggregation of plans and contributions.\nFor purposes of the preceding sentence, the term ‘alternative limitation’ means the limitation of section 401(k)(3)(A)(ii)(II) and the limitation of paragraph (2)(A)(ii) of this subsection.”\n2000—Subsec. (k)(10)(B)(ii).  Pub. L. 106–554  inserted at end “Such term includes a distribution of an annuity contract from—\n“(I) a trust which forms a part of a plan described in section 401(a) and which is exempt from tax under section 501(a), or\n“(II) an annuity plan described in section 403(a).”\n1997—Subsec. (a)(1).  Pub. L. 105–34, §\u202f1530(c)(1) , inserted “or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)),” after “stock bonus plans),”.\nSubsec. (a)(5)(G).  Pub. L. 105–34, §\u202f1505(a)(1) , added subpar. (G).\nSubsec. (a)(13)(C), (D).  Pub. L. 105–34, §\u202f1502(b) , added subpars. (C) and (D).\nSubsec. (a)(26)(H).  Pub. L. 105–34, §\u202f1505(a)(2) , amended heading and text of subpar. (H) generally. Prior to amendment, text read as follows:\n“(i)  In general .—An employer may elect to have this paragraph applied separately with respect to any classification of qualified public safety employees for whom a separate plan is maintained.\n“(ii)  Qualified public safety employee .—For purposes of this subparagraph, the term ‘qualified public safety employee’ means any employee of any police department or fire department organized and operated by a State or political subdivision if the employee provides police protection, firefighting services, or emergency medical services for any area within the jurisdiction of such State or political subdivision.”\nSubsec. (k)(3)(G).  Pub. L. 105–34, §\u202f1505(b) , added subpar. (G).\nSubsec. (k)(7)(B)(iii) to (v).  Pub. L. 105–34, §\u202f1525(a) , struck out “and” at end of cl. (iii), added cl. (iv), redesignated former cl. (iv) as (v), and in cl. (v), substituted “,\u2000(iii), or (iv)” for “or (iii)”.\nSubsec. (k)(11)(B)(iii).  Pub. L. 105–34, §\u202f1601(d)(2)(D) , added cl. (iii).\nSubsec. (k)(11)(D)(ii).  Pub. L. 105–34, §\u202f1601(d)(2)(A) , inserted “if such plan allows only contributions required under this paragraph” before period at end.\nSubsec. (k)(11)(E).  Pub. L. 105–34, §\u202f1601(d)(2)(B) , added subpar. (E).\nSubsec. (m)(11).  Pub. L. 105–34, §\u202f1601(d)(3) , substituted “Additional alternative” for “Alternative” in heading.\n1996—Subsec. (a)(5)(D)(ii).  Pub. L. 104–188, §\u202f1431(c)(1)(B) , substituted “section 414(q)(4)” for “section 414(q)(7)” in introductory provisions.\nSubsec. (a)(5)(F).  Pub. L. 104–188, §\u202f1445(a) , added subpar. (F).\nSubsec. (a)(9)(C).  Pub. L. 104–188, §\u202f1404(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the term ‘required beginning date’ means April 1 of the calendar year following the calendar year in which the employee attains age 70½. In the case of a governmental plan or church plan, the required beginning date shall be the later of the date determined under the preceding sentence or April 1 of the calendar year following the calendar year in which the employee retires. For purposes of this subparagraph, the term ‘church plan’ means a plan maintained by a church for church employees, and the term ‘church’ means any church (as defined in section 3121(w)(3)(A)) or qualified church-controlled organization (as defined in section 3121(w)(3)(B)).”\nSubsec. (a)(17)(A).  Pub. L. 104–188, §\u202f1431(b)(2) , struck out at end “In determining the compensation of an employee, the rules of section 414(q)(6) shall apply, except that in applying such rules, the term ‘family’ shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age 19 before the close of the year.”\nSubsec. (a)(20).  Pub. L. 104–188, §\u202f1704(t)(67) , substituted “section 521” for “section 211” in last sentence.\nSubsec. (a)(26)(A).  Pub. L. 104–188, §\u202f1432(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “A trust shall not constitute a qualified trust under this subsection unless such trust is part of a plan which on each day of the plan year benefits the lesser of—\n“(i) 50 employees of the employer, or\n“(ii) 40 percent or more of all employees of the employer.”\nSubsec. (a)(26)(G).  Pub. L. 104–188, §\u202f1432(b) , substituted “paragraph (2)(A) or (7)” for “paragraph (7)”.\nSubsec. (a)(28)(B)(v).  Pub. L. 104–188, §\u202f1401(b)(5) , struck out cl. (v) which read as follows:\n“(v)  Coordination with distribution rules .—Any distribution required by this subparagraph shall not be taken into account in determining whether a subsequent distribution is a lump sum distribution under section 402(d)(4)(A) or in determining whether section 402(c)(10) applies.”\nSubsec. (d).  Pub. L. 104–188, §\u202f1441(a) , amended subsec. (d) generally, substituting provisions relating to contribution limit on owner-employees for former provisions relating to additional requirements for qualification of trusts and plans benefiting owner-employees.\nSubsec. (h).  Pub. L. 104–188, §\u202f1704(a) , provided that, except as otherwise expressly provided, whenever in title XII of  Pub. L. 101–508  an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.  Section 12011(b) of title XII of Pub. L. 101–508  directed the amendment of this section without specifying that the amendment was to the Internal Revenue Code of 1986. See 1990 Amendment note below.\nSubsec. (k)(3)(A).  Pub. L. 104–188, §\u202f1433(c)(1) , in introductory provisions of cl. (ii) substituted “the plan year” for “such year” and “for the preceding plan year” for “for such plan year” and inserted at end of closing provisions of subpar. (A) “An arrangement may apply clause (ii) by using the plan year rather than the preceding plan year if the employer so elects, except that if such an election is made, it may not be changed except as provided by the Secretary.”\nSubsec. (k)(3)(E).  Pub. L. 104–188, §\u202f1433(d)(1) , added subpar. (E).\nSubsec. (k)(3)(F).  Pub. L. 104–188, §\u202f1459(a) , added subpar. (F).\nSubsec. (k)(4)(B).  Pub. L. 104–188, §\u202f1426(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows:\n“(B)  State and local governments and tax-exempt organizations not eligible .—A cash or deferred arrangement shall not be treated as a qualified cash or deferred arrangement if it is part of a plan maintained by—\n“(i) a State or local government or political subdivision thereof, or any agency or instrumentality thereof, or\n“(ii) any organization exempt from tax under this subtitle.\nThis subparagraph shall not apply to a rural cooperative plan.”\nSubsec. (k)(7)(B)(i).  Pub. L. 104–188, §\u202f1443(b) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any organization which—\n“(I) is exempt from tax under this subtitle or which is a State or local government or political subdivision thereof (or agency or instrumentality thereof), and\n“(II) is engaged primarily in providing electric service on a mutual or cooperative basis,”.\nSubsec. (k)(7)(C).  Pub. L. 104–188, §\u202f1443(a) , added subpar. (C).\nSubsec. (k)(8)(C).  Pub. L. 104–188, §\u202f1433(e)(1) , substituted “on the basis of the amount of contributions by, or on behalf of, each of such employees” for “on the basis of the respective portions of the excess contributions attributable to each of such employees”.\nSubsec. (k)(10)(B)(ii).  Pub. L. 104–188, §\u202f1401(b)(6) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows:\n“(ii)  Lump sum distribution .—For purposes of this subparagraph, the term ‘lump sum distribution’ has the meaning given such term by section 402(d)(4), without regard to clauses (i), (ii), (iii), and (iv) of subparagraph (A), subparagraph (B), or subparagraph (F) thereof.”\nSubsec. (k)(11).  Pub. L. 104–188, §\u202f1422(a) , added par. (11).\nSubsec. (k)(12).  Pub. L. 104–188, §\u202f1433(a) , added par. (12).\nSubsec. (m)(2)(A).  Pub. L. 104–188, §\u202f1433(c)(2) , inserted “for such plan year” after “highly compensated employees” in introductory provisions, inserted “for the preceding plan year” after “eligible employees” wherever appearing in cls. (i) and (ii), and inserted at end “This subparagraph may be applied by using the plan year rather than the preceding plan year if the employer so elects, except that if such an election is made, it may not be changed except as provided by the Secretary.”\nSubsec. (m)(3).  Pub. L. 104–188, §\u202f1433(d)(2) , inserted at end of closing provisions “Rules similar to the rules of subsection (k)(3)(E) shall apply for purposes of this subsection.”\nSubsec. (m)(5)(C).  Pub. L. 104–188, §\u202f1459(b) , added subpar. (C).\nSubsec. (m)(6)(C).  Pub. L. 104–188, §\u202f1433(e)(2) , substituted “on the basis of the amount of contributions on behalf of, or by, each such employee” for “on the basis of the respective portions of such amounts attributable to each of such employees”.\nSubsec. (m)(10).  Pub. L. 104–188, §\u202f1422(b) , added par. (10). Former par. (10) redesignated (11).\nSubsec. (m)(11).  Pub. L. 104–188, §\u202f1433(b) , added par. (11). Former par. (11) redesignated (12).\nPub. L. 104–188, §\u202f1422(b) , redesignated par. (10) as (11).\nSubsec. (m)(12).  Pub. L. 104–188, §\u202f1433(b) , redesignated par. (11) as (12).\n1994—Subsec. (a)(17)(B).  Pub. L. 103–465, §\u202f732(a) , reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows:\n“(i)  In general .—If, for any calendar year after 1994, the excess (if any) of—\n“(I) $150,000, increased by the cost-of-living adjustment for the calendar year, over\n“(II) the dollar amount in effect under subparagraph (A) for taxable years beginning in the calendar year,\nis equal to or greater than $10,000, then the $150,000 amount under subparagraph (A) (as previously adjusted under this subparagraph) for any taxable year beginning in any subsequent calendar year shall be increased by the amount of such excess, rounded to the next lowest multiple of $10,000.\n“(ii)  Cost-of-living adjustment .—The cost-of-living adjustment for any calendar year shall be the adjustment made under section 415(d) for such calendar year, except that the base period for purposes of section 415(d)(1)(A) shall be the calendar quarter beginning  October 1, 1993 .”\nSubsec. (a)(32).  Pub. L. 103–465, §\u202f751(a)(9)(C) , which directed amendment of subsec. (a) by adding par. (32) at end, was executed by adding par. (32) after par. (31) to reflect the probable intent of Congress.\nSubsec. (a)(33).  Pub. L. 103–465, §\u202f766(b) , which directed amendment of subsec. (a) by adding par. (33) at end, was executed by adding par. (33) after par. (32) to reflect the probable intent of Congress.\nSubsec. (a)(34).  Pub. L. 103–465, §\u202f776(d) , added par. (34).\n1993—Subsec. (a)(17).  Pub. L. 103–66  inserted par. heading, designated existing provisions as subpar. (A), inserted subpar. heading, substituted “$150,000” for “$200,000” in first sentence, struck out after first sentence “The Secretary shall adjust the $200,000 amount at the same time and in the same manner as under section 415(d).”, and added subpar. (B).\n1992—Subsec. (a)(20).  Pub. L. 102–318, §\u202f521(b)(5) , substituted “1 or more distributions within 1 taxable year to a distributee on account of a termination of the plan of which the trust is a part, or in the case of a profit-sharing or stock bonus plan, a complete discontinuance of contributions under such plan” for “a qualified total distribution described in section 402(a)(5)(E)(i)(I)” and inserted at end “For purposes of this paragraph, rules similar to the rules of section 402(a)(6)(B) (as in effect before its repeal by section 211 of the Unemployment Compensation Amendments of 1992) shall apply.”\nSubsec. (a)(28)(B)(v).  Pub. L. 102–318, §\u202f521(b)(6) , amended cl. (v) generally. Prior to amendment, cl. (v) read as follows: “Any distribution required by this subparagraph shall not be taken into account in determining whether—\n“(I) a subsequent distribution is a lump-sum distribution under section 402(e)(4)(A), or\n“(II) section 402(a)(5)(D)(iii) applies to a subsequent distribution.”\nSubsec. (a)(31).  Pub. L. 102–318, §\u202f522(a)(1) , added par. (31).\nSubsec. (k)(2)(B)(i)(IV).  Pub. L. 102–318, §\u202f521(b)(7) , substituted “402(e)(3)” for “402(a)(8)”.\nSubsec. (k)(10)(B)(ii).  Pub. L. 102–318, §\u202f521(b)(8) , substituted “402(d)(4)” for “402(e)(4)” and “subparagraph (F)” for “subparagraph (H)”.\n1990—Subsec. (h).  Pub. L. 101–508 , which directed that “section 401(h) is amended by inserting ‘,\u2000and subject to the provisions of section 420’\u202f” without specifying that amendment was to the Internal Revenue Code of 1986, was executed by making the insertion in subsec. (h) of this section. See 1996 Amendment note above.\n1989—Subsec. (a)(9)(C).  Pub. L. 101–140  struck out “(as defined in section 89(i)(4))” after “governmental or church plan” and inserted at end “For purposes of this subparagraph, the term ‘church plan’ means a plan maintained by a church for church employees, and the term ‘church’ means any church (as defined in section 3121(w)(3)(A)) or qualified church-controlled organization (as defined in section 3121(w)(3)(B)).”\nSubsec. (a)(28)(B)(ii)(II).  Pub. L. 101–239, §\u202f7811(h)(3) , made technical correction to directory language of  Pub. L. 100–647, §\u202f1011B(j)(1) , see 1988 Amendment note below.\nSubsec. (a)(29)(A)(i).  Pub. L. 101–239, §\u202f7881(i)(4)(A) , substituted “multiemployer plan) to which the requirements of section 412 apply” for “multiemployer plan)”.\nSubsec. (a)(29)(C)(i)(II).  Pub. L. 101–239, §\u202f7881(i)(1)(A) , substituted “plan amendment and any other plan amendments adopted after  December 22, 1987 , and before such plan amendment” for “plan amendment”.\nSubsec. (a)(30).  Pub. L. 101–239, §\u202f7811(g)(1) , moved par. (30) from a position after the undesignated closing par. to a position immediately after par. (29).\nSubsec. (h).  Pub. L. 101–239, §\u202f7311(a) , inserted at end “In no event shall the requirements of paragraph (1) be treated as met if the aggregate actual contributions for medical benefits, when added to actual contributions for life insurance protection under the plan, exceed 25 percent of the total actual contributions to the plan (other than contributions to fund past service credits) after the date on which the account is established.”\nSubsec. (k)(4)(B).  Pub. L. 101–239, §\u202f7816 ( l ), amended  Pub. L. 100–647, §\u202f6071(b)(2) , see 1988 Amendment note below.\n1988—Subsec. (a)(9)(C).  Pub. L. 100–647, §\u202f6053(a) , inserted at end “In the case of a governmental plan or church plan (as defined in section 89(i)(4)), the required beginning date shall be the later of the date determined under the preceding sentence or April 1 of the calendar year following the calendar year in which the employee retires.”\nSubsec. (a)(11)(E), (F).  Pub. L. 100–647, §\u202f1011A ( l ), redesignated subpar. (E), relating to cross reference, as (F).\nSubsec. (a)(17).  Pub. L. 100–647, §\u202f1011(d)(4) , inserted at end “In determining the compensation of an employee, the rules of section 414(q)(6) shall apply, except that in applying such rules, the term ‘family’ shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age 19 before the close of the year.”\nSubsec. (a)(22).  Pub. L. 100–647, §\u202f1011B(k)(1) , (2), substituted “is not readily tradable on an established market” for “is not publicly traded” in subpar. (A) and in last sentence, and inserted at end “For purposes of the preceding sentence, subsections (b), (c), (m), and ( o ) of section 414 shall not apply except for determining whether stock of the employer is not readily tradable on an established market.”\nSubsec. (a)(26)(F), (G).  Pub. L. 100–647, §\u202f1011(h)(3) , added subpars. (F) and (G). Former subpar. (F) redesignated (H).\nSubsec. (a)(26)(H).  Pub. L. 100–647, §\u202f6055(a) , added subpar. (H). Former subpar. (H) redesignated (I).\nPub. L. 100–647, §\u202f1011(h)(3) , redesignated former subpar. (F) as (H).\nSubsec. (a)(26)(I).  Pub. L. 100–647, §\u202f6055(a) , redesignated former subpar. (H) as (I).\nSubsec. (a)(27).  Pub. L. 100–647, §\u202f1011A(j) , inserted par. heading, designated existing provisions as subpar. (A), inserted subpar. (A) heading, and added subpar. (B).\nSubsec. (a)(28)(B)(ii)(II).  Pub. L. 100–647, §\u202f1011B(j)(1) , as amended by  Pub. L. 101–239, §\u202f7811(h)(3) , inserted “and within 90 days after the period during which the election may be made, the plan invests the portion of the participant’s account covered by the election in accordance with such election” after “clause (i)”.\nSubsec. (a)(28)(B)(iv).  Pub. L. 100–647, §\u202f1011B(d)(2) , amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows: “For purposes of this subparagraph, the term ‘qualified election period’ means the 5-plan-year period beginning with the plan year after the plan year in which the participant attains age 55 (or, if later, beginning with the plan year after the 1st plan year in which the individual 1st became a qualified participant).”\nSubsec. (a)(28)(B)(v).  Pub. L. 100–647, §\u202f1011B(j)(6) , added cl. (v).\nSubsec. (a)(30).  Pub. L. 100–647, §\u202f1011(c)(7)(A) , added par. (30) at end.\nSubsec. (k)(1), (2).  Pub. L. 100–647, §\u202f6071(a) , struck out “electric” after “or a rural”.\nSubsec. (k)(2)(B).  Pub. L. 100–647, §\u202f1011(k)(2)(A) , inserted “amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election” after “under which”.\nSubsec. (k)(2)(B)(i).  Pub. L. 100–647, §\u202f1011(k)(2)(B) , struck out “amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election” before “may not be”.\nPub. L. 100–647, §\u202f1011(k)(1)(A) , added subcl. (II), redesignated former subcls. (V) and (VI) as (III) and (IV), respectively, and struck out former subcls. (II) to (IV) which read as follows:\n“(II) termination of the plan without establishment of a successor plan,\n“(III) the date of the sale by a corporation of substantially all of the assets (within the meaning of section 409(d)(2)) used by such corporation in a trade or business of such corporation with respect to an employee who continues employment with the corporation acquiring such assets,\n“(IV) the date of the sale by a corporation of such corporation’s interest in a subsidiary (within the meaning of section 409(d)(3)) with respect to an employee who continues employment with such subsidiary,”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 100–647, §\u202f1011(k)(2)(C) , struck out “amounts” before “will not be”.\nSubsec. (k)(3)(A).  Pub. L. 100–647, §\u202f1011(k)(3)(B) , made technical correction to  Pub. L. 99–514, §\u202f1116(b)(4) . See 1986 Amendment note below.\nSubsec. (k)(3)(A)(ii).  Pub. L. 100–647, §\u202f1011(k)(3)(A) , inserted “eligible” before “highly compensated employees” in introductory text, in subcl. (I), and in two places in subcl. (II).\nSubsec. (k)(3)(C), (D).  Pub. L. 100–647, §\u202f1011(k)(4) , (5), redesignated subpar. (C), relating to employer contributions, as (D), and substituted “meet” for “meets” in cl. (ii)(I).\nSubsec. (k)(4)(A).  Pub. L. 100–647, §\u202f1011(k)(6) , struck out “provided by such employer” after “any other benefit”.\nSubsec. (k)(4)(B).  Pub. L. 100–647, §\u202f6071(b)(2) , as amended by  Pub. L. 101–239, §\u202f7816 ( l ), substituted “rural cooperative plan” for “rural electric cooperative plan” in last sentence.\nPub. L. 100–647, §\u202f1011(k)(9) , inserted at end “This subparagraph shall not apply to a rural electric cooperative plan.”\nSubsec. (k)(7).  Pub. L. 100–647, §\u202f6071(b)(1) , substituted “Rural cooperative plan” for “Rural electric cooperative plan” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection—\n“(A)  In general .—The term ‘rural cooperative plan’ means any pension plan—\n“(i) which is a defined contribution plan (as defined in section 414(i)), and\n“(ii) which is established and maintained by a rural cooperative.\n“(B)  Rural cooperative defined .—For purposes of subparagraph (A), the term ‘rural cooperative’ means—\n“(i) any organization which—\n“(I) is exempt from tax under this subtitle or which is a State or local government or political subdivision thereof (or agency or instrumentality thereof), and\n“(II) is engaged primarily in providing electric service on a mutual or cooperative basis,\n“(ii) any organization described in paragraph (4) or (6) of section 501(c) and at least 80 percent of the members of which are organizations described in clause (i), and\n“(iii) an organization which is a national association of organizations described in clause (i) or (ii).”\nPub. L. 100–647, §\u202f1011(e)(3) , amended par. (7) generally. Prior to amendment, par. (7) read as follows: “For purposes of this subsection, the term ‘rural electric cooperative plan’ means any pension plan—\n“(A) which is a defined contribution plan (as defined in section 414(i)), and\n“(B) which is established and maintained by a rural electric cooperative (as defined in section 457(d)(9)(B)) or a national association of such rural electric cooperatives.”\nSubsec. (k)(8)(E), (F).  Pub. L. 100–647, §\u202f1011(k)(7) , added subpar. (E) and redesignated former subpar. (E) as (F).\nSubsec. (k)(10).  Pub. L. 100–647, §\u202f1011(k)(1)(B) , added par. (10).\nSubsec. ( l )(2)(B)(i), (ii).  Pub. L. 100–647, §\u202f1011(g)(1)(A) , substituted “contributed by the employer under” for “contributed under”.\nSubsec. ( l )(3)(A)(ii).  Pub. L. 100–647, §\u202f1011(g)(1)(B) , inserted “attributable to employer contributions” after “basis of benefits”.\nSubsec. ( l )(5)(C).  Pub. L. 100–647, §\u202f1011(g)(2) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The term ‘average annual compensation’ means the greater of—\n“(i) the participant’s final average compensation (determined without regard to subparagraph (D)(ii)), or\n“(ii) the participant’s highest average annual compensation for any other period of at least 3 consecutive years.”\nSubsec. ( l )(5)(E).  Pub. L. 100–647, §\u202f1011(g)(3) , substituted “the social security retirement age” for “age 65” in cl. (i) and in two places in cl. (ii), and added cl. (iii).\nSubsec. (m)(1).  Pub. L. 100–647, §\u202f1011 ( l )(1), substituted “A defined contribution plan” for “A plan”.\nSubsec. (m)(2)(B).  Pub. L. 100–647, §\u202f1011 ( l )(3), substituted “contributions to which this subsection applies are made” for “such contributions are made”.\nSubsec. (m)(3).  Pub. L. 100–647, §\u202f1011 ( l )(2), inserted at end “If matching contributions are taken into account for purposes of subsection (k)(3)(A)(ii) for any plan year, such contributions shall not be taken into account under subparagraph (A) for such year.”\nSubsec. (m)(4)(A)(i), (ii).  Pub. L. 100–647, §\u202f1011 ( l )(4), substituted “a defined contribution plan” for “the plan”.\nSubsec. (m)(4)(B).  Pub. L. 100–647, §\u202f1011 ( l )(5)(A), substituted “section 402(g)(3)” for “section 402(g)(3)(A)”.\nSubsec. (m)(6)(C).  Pub. L. 100–647, §\u202f1011 ( l )(6), substituted “excess aggregate contributions” for “excess contributions” in heading.\nSubsec. (m)(7)(A).  Pub. L. 100–647, §\u202f1011 ( l )(7), substituted “paragraph (6)” for “paragraph (8)”.\n1987—Subsec. (a)(29).  Pub. L. 100–203  added par. (29).\n1986—Subsec. (a)(4).  Pub. L. 99–514, §\u202f1114(b)(7) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “if the contributions or the benefits provided under the plan do not discriminate in favor of employees who are—\n“(A) officers,\n“(B) shareholders, or\n“(C) highly compensated.\nFor purposes of this paragraph, there shall be excluded from consideration employees described in section 410(b)(3)(A) and (C).”\nSubsec. (a)(5).  Pub. L. 99–514, §\u202f1111(b) , amended par. (5) generally. Prior to amendment, par. (5) related to conditions which taken alone would not require a classification to be considered discriminatory and means of determining the basic or regular rate of compensation of an employee and whether two or more plans of an employer satisfy requirements of par. (4) when considered as a single plan.\nSubsec. (a)(8).  Pub. L. 99–514, §\u202f1119(a) , substituted “defined benefit plan” for “pension plan”.\nSubsec. (a)(9)(C).  Pub. L. 99–514, §\u202f1121(b) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “For purposes of this paragraph, the term ‘required beginning date’ means April 1 of the calendar year following the later of—\n“(i) the calendar year in which the employee attains age 70½, or\n“(ii) the calendar year in which the employee retires.\nClause (ii) shall not apply in the case of an employee who is a 5-percent owner (as defined in section 416(i)(1)(B)) at any time during the 5-plan-year period ending in the calendar year in which the employee attains age 70½. If the employee becomes a 5-percent owner during any subsequent plan year, the required beginning date shall be April 1 of the calendar year following the calendar year in which such subsequent plan year ends.”\nPub. L. 99–514, §\u202f1852(a)(4)(A) , substituted last 2 sentences for “Except as provided in section 409(d), clause (ii) shall not apply in the case of an employee who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains 70½.”\nSubsec. (a)(9)(G).  Pub. L. 99–514, §\u202f1852(a)(6) , added subpar. (G).\nSubsec. (a)(11)(A)(i).  Pub. L. 99–514, §\u202f1898(b)(3)(A) , substituted “who does not die before the annuity starting date” for “who retires under the plan”.\nSubsec. (a)(11)(B).  Pub. L. 99–514, §\u202f1898(b)(2)(A)(ii) , inserted at end “Clause (iii)(III) shall apply only with respect to the transferred assets (and income therefrom) if the plan separately accounts for such assets and any income therefrom.”\nSubsec. (a)(11)(B)(iii)(I).  Pub. L. 99–514, §\u202f1898(b)(7)(A) , inserted “(reduced by any security interest held by the plan by reason of a loan outstanding to such participant)”.\nPub. L. 99–514, §\u202f1898(b)(13)(A) , substituted “section 417(a)(2)” for “section 417(a)(2)(A)”.\nSubsec. (a)(11)(B)(iii)(III).  Pub. L. 99–514, §\u202f1898(b)(2)(A)(i) , inserted “(in a transfer after  December 31, 1984 )”.\nSubsec. (a)(11)(D), (E).  Pub. L. 99–514, §\u202f1145(a) , added subpar. (E) relating to exception for plans described in section 404(c) and redesignated former subpar. (D), relating to cross references, as (E).\nPub. L. 99–514, §\u202f1898(b)(14)(A) , added subpar. (D) and redesignated former subpar. (D), relating to cross references, as (E).\nSubsec. (a)(17).  Pub. L. 99–514, §\u202f1106(d)(1) , added par. (17).\nSubsec. (a)(20).  Pub. L. 99–514, §\u202f1852(b)(8) , substituted “qualified total distribution described in section 402(a)(5)(E)(i)(I)” for “qualifying rollover distribution (determined as if section 402(a)(5)(D)(i) did not contain subclause (II) thereof) described in section 402(a)(5)(A)(i) or 403(a)(4)(A)(i)”.\nSubsec. (a)(21).  Pub. L. 99–514, §\u202f1171(b)(5) , struck out par. (21) which read as follows: “A trust forming part of a tax credit employee stock ownership plan shall not fail to be considered a permanent program merely because employer contributions under the plan are determined solely by reference to the amount of credit which would be allowable under section 41 if the employer made the transfer described in section 41(c)(1)(B)”.\nSubsec. (a)(22).  Pub. L. 99–514, §\u202f1899A(10) , substituted “If” for “if”.\nPub. L. 99–514, §\u202f1176(a) , inserted at end “The requirements of subsection (e) of section 409 shall not apply to any employees of an employer who are participants in any defined contribution plan established and maintained by such employer if the stock of such employer is not publicly traded and the trade or business of such employer consists of publishing on a regular basis a newspaper for general circulation.”\nSubsec. (a)(23).  Pub. L. 99–514, §\u202f1174(c)(2)(A) , amended par. (23) generally. Prior to amendment, par. (23) read as follows: “A stock bonus plan which otherwise meets the requirements of this section shall not be considered to fail to meet the requirements of this section because it provides a cash distribution option to participants if that option meets the requirements of section 409(h), except that in applying section 409(h) for purposes of this paragraph, the term ‘employer securities’ shall include any securities of the employer held by the plan.”\nSubsec. (a)(26).  Pub. L. 99–514, §\u202f1112(b) , added par. (26).\nSubsec. (a)(27).  Pub. L. 99–514, §\u202f1136(a) , added par. (27).\nSubsec. (a)(28).  Pub. L. 99–514, §\u202f1175(a)(1) , added par. (28).\nSubsec. (c)(2)(A)(v).  Pub. L. 99–514, §\u202f1848(b) , substituted “section 404” for “sections 404 and 405(c)”.\nSubsec. (c)(6).  Pub. L. 99–514, §\u202f1143(a) , added par. (6).\nSubsec. (h).  Pub. L. 99–514, §\u202f1852(h)(1) , substituted “key employee” for “5-percent owner” in two places in par. (6) and amended last sentence generally, substituting “\u202f‘key employee’ means any employee, who” for “\u202f‘5-percent owner’ means any employee who,” and “key employee as defined in section 416(i)” for “5-percent owner (as defined in section 416(i)(1)(B))”.\nSubsec. (k)(1), (2).  Pub. L. 99–514, §\u202f1879(g)(1) , substituted “,\u2000a pre-ERISA money purchase plan, or a rural electric cooperative plan” for “(or a pre-ERISA money purchase plan)”.\nSubsec. (k)(2)(B).  Pub. L. 99–514, §\u202f1116(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “under which amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election may not be distributable to participants or other beneficiaries earlier than upon retirement, death, disability, or separation from service (or in the case of a profit sharing or stock bonus plan, hardship or the attainment of age 59½) and will not be distributable merely by reason of the completion of a stated period of participation or the lapse of a fixed number of years; and”.\nSubsec. (k)(2)(C).  Pub. L. 99–514, §\u202f1852(g)(3) , substituted “is nonforfeitable” for “are nonforfeitable”.\nSubsec. (k)(2)(D).  Pub. L. 99–514, §\u202f1116(b)(2) , added subpar. (D).\nSubsec. (k)(3).  Pub. L. 99–514, §\u202f1116(d)(3) , which directed that the last sentence of subpar. (B) be struck out was executed by striking out the last sentence of par. (3) as the probable intent of Congress because subpar. (B) is composed of only one sentence. Prior to being stricken, such last sentence read as follows: “For purposes of the preceding sentence, the compensation of any employee for a plan year shall be the amount of his compensation which is taken into account under the plan in calculating the contribution which may be made on his behalf for such plan year.”\nSubsec. (k)(3)(A).  Pub. L. 99–514, §\u202f1116(b)(4) , as amended by  Pub. L. 100–647, §\u202f1011(k)(3)(B) , substituted “any highly compensated employee” for “an employee” in concluding provisions.\nPub. L. 99–514, §\u202f1852(g)(2) , substituted “If an employee is a participant under 2 or more cash or deferred arrangements of the employer, for purposes of determining the deferral percentage with respect to such employee, all such cash or deferred arrangements shall be treated as 1 cash or deferred arrangement” for “The deferral percentage taken into account under this subparagraph for any employee who is a participant under 2 or more cash or deferred arrangements of the employer shall be the sum of the deferral percentages for such employee under each of such arrangements”.\nSubsec. (k)(3)(A)(i).  Pub. L. 99–514, §\u202f1112(d)(1) , struck out “subparagraph (A) or (B) of” before “section 410(b)(1)”.\nSubsec. (k)(3)(A)(ii).  Pub. L. 99–514, §\u202f1116(c)(2) , substituted “paragraph (5)” for “paragraph (4)”.\nPub. L. 99–514, §\u202f1116(a) , substituted “1.25” for “1.5” in subcl. (I), and “2 percentage points” for “3 percentage points” and “2” for “2.5” in subcl. (II).\nSubsec. (k)(3)(C).  Pub. L. 99–514, §\u202f1852(g)(1) , added subpar. (C) relating to treatment of cash or deferred arrangements.\nPub. L. 99–514, §\u202f1116(e) , added subpar. (C) relating to employer contributions.\nSubsec. (k)(4).  Pub. L. 99–514, §\u202f1116(b)(3) , added par. (4). Former par. (4) redesignated (5).\nSubsec. (k)(5).  Pub. L. 99–514, §\u202f1116(b)(3) , (d)(1), redesignated former par. (4) as (5) and substituted “the term ‘highly compensated employee’ has the meaning given such term by section 414(q)” for “the term ‘highly compensated employee’ means any employee who is more highly compensated than two-thirds of all eligible employees, taking into account only compensation which is considered in applying paragraph (3)”. Former par. (5) redesignated (6).\nSubsec. (k)(6).  Pub. L. 99–514, §\u202f1116(b)(3) , redesignated former par. (5) as (6). Former par. (6) redesignated (7).\nPub. L. 99–514, §\u202f1879(g)(2) , added par. (6).\nSubsec. (k)(7).  Pub. L. 99–514, §\u202f1116(b)(3) , redesignated former par. (6) as (7).\nSubsec. (k)(8).  Pub. L. 99–514, §\u202f1116(c)(1) , added par. (8).\nSubsec. (k)(9).  Pub. L. 99–514, §\u202f1116(d)(2) , added par. (9).\nSubsec. ( l ).  Pub. L. 99–514, §\u202f1111(a) , amended subsec. ( l ) generally, substituting provisions relating to permitted disparity in plan contributions or benefits for provisions relating to nondiscriminatory coordination of defined contribution plans with OASDI.\nSubsec. (m).  Pub. L. 99–514, §\u202f1117(a) , added subsec. (m) and redesignated former subsec. (m) as (n).\nPub. L. 99–514, §\u202f1898(c)(3) , added subsec. (m).\nSubsec. (n).  Pub. L. 99–514, §\u202f1117(a) , redesignated former subsec. (m) as (n). Former subsec. (n) redesignated ( o ).\nPub. L. 99–514, §\u202f1898(c)(3) , redesignated subsec. ( o ) as (n).\nSubsec. ( o ).  Pub. L. 99–514, §\u202f1117(a) , redesignated former subsec. (n) as ( o ).\nPub. L. 99–514, §\u202f1898(c)(3) , redesignated subsec. ( o ) as (n).\n1984—Subsec. (a)(9).  Pub. L. 98–369, §\u202f521(a)(1) , amended par. (9) generally, redesignating existing provisions as subpar. (A) and in subpar. (A) as so redesignated struck out “In the case of a plan which provides contributions or benefits for employees some or all of whom are employees within the meaning of subsection (c)(1)” before “a trust forming part of such plan”, substituted “the plan provides that the entire interest of each employee—” for “,\u2000under the plan, the entire interest of each employee—”, redesignated subpars. (A) and (B) as cls. (i) and (ii), respectively, in cl. (i) as so redesignated substituted provisions stating that a qualified plan provides that the entire interest will be distributed to the employee not later than the beginning date for former provisions which provided alternative dates for providing interest, in cl. (ii) as so redesignated substituted alternate distribution dates to be set in accordance with regulations for former provisions stating that a qualified plan shall be distributed not later than the taxable year in which the taxpayer attains age 70½, and struck out the par. following cl. (ii) which provided “A trust shall not be disqualified under this paragraph by reason of distributions under a designation, prior to the date of the enactment of this paragraph, by any employee under the plan of which such trust is a part, of a method of distribution which does not meet the terms of the preceding sentence.”, and added subpars. (B) to (F).\nPub. L. 98–369, §\u202f521(a)(2) , repealed amendment made by  Pub. L. 97–248, §\u202f242(a) . See 1982 Amendment note below.\nSubsec. (a)(10)(B)(iii).  Pub. L. 98–369, §\u202f524(d)(1) , added cl. (iii).\nSubsec. (a)(11).  Pub. L. 98–397, §\u202f203(a) , amended par. (11) generally, inserting provisions relating to preretirement survivor annuities, and substituting present four subpars. for former eight subpars.\nSubsec. (a)(13).  Pub. L. 98–397, §\u202f204(a) , designated existing provisions as subpar. (A), corrected the margin of subpar. (A), and added subpar. (B).\nSubsec. (a)(21).  Pub. L. 98–369, §\u202f474(r)(13) , substituted provisions relating to the amount of the credit which would be allowable under section 41 if the employer made the transfer described in section 41(c)(1)(B) for former provisions which had related to the amount of credit which would be allowable under section 46(a) if the employer made the transfer described in section 48(n)(1) or under section 44G if the employer made the transfer described in section 44G(c)(1)(B).\nSubsec. (a)(22).  Pub. L. 98–369, §\u202f491(e)(4) , substituted “section 409” for “section 409A”.\nSubsec. (a)(23).  Pub. L. 98–369, §\u202f491(e)(5) , substituted “section 409(h)” for “section 409A(h)” in two places.\nSubsec. (a)(24).  Pub. L. 98–369, §\u202f211(b)(5) , substituted “section 818(a)(6)” for “section 805(d)(6)”.\nSubsec. (a)(25).  Pub. L. 98–397, §\u202f301(b) , added par. (25).\nSubsec. (e).  Pub. L. 98–369, §\u202f713(d)(3) , repealed subsec. (e) which related to contributions for premiums on annuity, etc., contracts.\nSubsec. (f)(2).  Pub. L. 98–369, §\u202f713(c)(2)(A) , substituted “(as defined in section 408(n))” for “(as defined in subsection (d)(1))”.\nSubsec. (h)(6).  Pub. L. 98–369, §\u202f528(b) , added par. (6).\nSubsec. (k)(1), (2).  Pub. L. 98–369, §\u202f527(b)(1) , inserted “(or a pre-ERISA money purchase plan)”.\nSubsec. (k)(2)(B).  Pub. L. 98–369, §\u202f527(b)(3) , substituted “(or in the case of a profit sharing or stock bonus plan, hardship or the attainment of age 59½)” for “,\u2000hardship or the attainment of age 59½,”.\nSubsec. (k)(3)(A).  Pub. L. 98–369, §\u202f527(a) , struck out “qualified” before “cash or deferred arrangement”, substituted “shall not be treated as a qualified cash or deferred arrangement unless” for “shall be considered to satisfy the requirements of subsection (a)(4), with respect to the amount of contributions, and of subparagraph (B) of section 410(b)(1) for a plan year if”, designated provisions beginning “those employees” and ending “section 401(b)(1)” as cl. (i) and text following as cl. (ii), redesignated former cls. (i) and (ii) as subcls. (I) and (II) and inserted text following subcl. (II).\nSubsec. (k)(5).  Pub. L. 98–369, §\u202f527(b)(2) , added par. (5).\n1983—Subsec. (a)(21).  Pub. L. 97–448, §\u202f103(g)(2)(A) , designated part of existing provisions as subpar. (A) and added subpar. (B).\nSubsec. (c)(2)(A)(vi).  Pub. L. 98–21  added cl. (vi).\nSubsec. (d)(2).  Pub. L. 97–448, §\u202f306(a)(12) , substituted “paragraph (1)(B)” for “paragraph (9)(B)”.\nSubsec. (d)(5).  Pub. L. 97–448, §\u202f103(c)(10)(A) , substituted “Subparagraphs (A) and (B) shall not apply to contributions described in subsection (e), and shall not apply to any deductible employee contribution (as defined in section 72( o )(5))” for “Subparagraphs (A) and (B) do not apply to contributions described in subsection (e)” in second sentence.\nSubsec. (j)(3).  Pub. L. 97–448, §\u202f103(d)(2) , substituted “under subparagraph (A) of paragraph (2) shall be treated as beginning a new period of plan participation with respect only to such change” for “under subparagraph (A) of subsection (j)(2) shall be treated as beginning a new period of plan participation” in last sentence.\n1982—Subsec. (a)(9).  Pub. L. 97–248, §\u202f242(a) , which was repealed by  Pub. L. 98–369, §\u202f521(a)(2) , had amended par. (9) generally, redesignating existing provisions as subpar. (A), in subpar. (A), as so redesignated, struck out preliminary provision which limited the application of this paragraph to plans providing contributions or benefits for employees some or all of whom were employees within the meaning of subsec. (c)(1), redesignated former subpars. (A) and (B) as cls. (i) and (ii) of subpar. (A), in cl. (i), as so redesignated, substituted reference to a key employee who is a participant in a top-heavy plan for former reference to owner-employees (within the meaning of subsec. (c)(3)), redesignated former cls. (i) and (ii) of subpar. (B) as subcls. (I) and (II) of cl. (ii), struck out former provision that a trust would not be disqualified under this paragraph by reason of distributions under a designation, prior to the date of the enactment of this paragraph, by any employee under the plan of which such trust was a part, of a method of distribution which did not meet the terms of this paragraph, and adding subpar. (B).\nSubsec. (a)(10).  Pub. L. 97–248, §\u202f237(e)(1) , amended par. (10) generally, redesignating subpar. (B) as (A) and striking out former subpar. (A) relating to qualified trust as a trust forming part of such plan, for provisions relating to discriminatory plans with respect to nonapplicability of paragraph (3), the first and second sentences of paragraph (5) and  section 410 of this title .\nSubsec. (a)(10)(B).  Pub. L. 97–248, §\u202f240(b) , added subpar. (B).\nSubsec. (a)(17), (18).  Pub. L. 97–248, §\u202f237(b) , struck out pars. (17) and (18) which related, respectively, to a plan which provides contributions or benefits for employees some or all of whom are employees within the meaning of subsection (c)(1), or are shareholder-employees within the meaning of section 1379(d), and a trust which is part of a plan providing a defined benefit for employees some or all of whom are employees within the meaning of subsection (c)(1), or are shareholder-employees within the meaning of section 1379(d).\nSubsec. (a)(24).  Pub. L. 97–248  added par. (24).\nSubsec. (c)(1).  Pub. L. 97–248, §\u202f238(d)(1) , amended par. (1) generally, substituting in heading “Self-employed individual treated as employee” for “Employee”, adding subparagraph headings, and substituting provisions defining “employee” and “self-employed individual”, for provisions defining “employee”.\nSubsec. (c)(2)(A).  Pub. L. 97–248, §\u202f238(d)(2) , added cl. (v).\nSubsec. (d).  Pub. L. 97–248, §\u202f237(a) , redesignated pars. (9) to (11) as (1) to (3), respectively. Former pars. (1) to (7), which related to trusts created or organized before or after  October 10, 1962 , contributions under the plan, benefits under the plan for employees, contributions or benefits under the plan, limitations pursuant to the plan, applicability of requirements of subsec. (a)(4) of this section, and distributions under the plan, respectively, were struck out.\nSubsec. (j).  Pub. L. 97–248, §\u202f238(b) , struck out subsec. (j) which related to general requirements, regulation guidelines, applicable percentage, certain contributions and benefits not taken into account, definitions, and special rules with respect to defined benefit plans providing benefits for self-employed individuals and shareholder-employees.\nSubsecs. ( l ), ( o ).  Pub. L. 97–248, §\u202f249(a) , added subsec. ( l ) and redesignated former subsec. ( l ) as ( o ).\n1981—Subsec. (a)(17).  Pub. L. 97–34, §\u202f312(b)(1) , designated provision relating to the annual compensation of each employee as subpar. (A), and in subpar. (A) as so designated, substituted “$200,000” for “$100,000”, and added subpar. (B).\nSubsec. (a)(22).  Pub. L. 97–34, §\u202f338(a) , inserted “(other than a profit-sharing plan)” and substituted “if” for “If” and “such plan” for “said plan”.\nSubsec. (a)(23).  Pub. L. 97–34, §\u202f335 , substituted “409A(h), except that in applying section 409A(h) for purposes of this paragraph, the term ‘employer securities’ shall include any securities of the employer held by the plan” for “409A(h)(2)”.\nSubsec. (d)(4).  Pub. L. 97–34, §\u202f312(e)(2) , inserted provision making subpar. (B) inapplicable to any distribution to which section 72(m)(9) applies.\nSubsec. (d)(5).  Pub. L. 97–34, §\u202f314(a)(1) , inserted provision making subpar. (C) inapplicable to a distribution on account of the termination of the plan.\nSubsec. (e).  Pub. L. 97–34, §\u202f312(c)(2) , substituted “for such taxable year exceeds $15,000” for “for all such years exceeds $7,500”.\nSubsec. (j).  Pub. L. 97–34, §\u202f312(c)(3) , (4), substituted in par. (2)(A) “$100,000” for “$50,000” and in par. (3) inserted provision that for purposes of this paragraph, a change in the annual compensation taken into account under subpar. (A) of subsec. (j)(2) be treated as beginning a new period of plan participation.\n1980—Subsec. (a)(2).  Pub. L. 96–364 , §§\u202f208(e), 410(b), inserted provisions relating to applicability to multiemployer plans and return of contributions made by a mistake of law or fact, or return of withdrawal liability payment.\nSubsec. (a)(4).  Pub. L. 96–605, §\u202f225(b)(1) , substituted “section 410(b)(3)(A)” for “section 410(b)(2)(A)”.\nSubsec. (a)(12).  Pub. L. 96–364, §\u202f208(a) , substituted provisions relating to applicability to multiemployer plans subject to title IV of the Employee Retirement Income Security Act of 1974 of provisions of preceding sentence, for provisions relating to applicability of paragraph to multiemployer plans to extent determined by Corporation.\nSubsec. (a)(20).  Pub. L. 96–222, §\u202f101(a)(14)(E)(iii) , substituted “makes a qualifying rollover distribution (determined as if section 402(a)(5)(D)(i) did not contain subclause (II) thereof) described in section 402(a)(5)(A)(i) or 403(a)(4)(A)(i)” for “makes a payment or distribution described in section 402(a)(5)(i) or 403(a)(4)(i)”.\nSubsec. (a)(21).  Pub. L. 96–222, §\u202f101(a)(7)(L)(i)(V) , substituted “a tax credit employee stock ownership plan” for “an ESOP”.\nSubsec. (a)(22)(B).  Pub. L. 96–222, §\u202f101(a)(9) , substituted “are securities” for “as securities”.\nSubsec. (a)(23).  Pub. L. 96–605, §\u202f221(a) , added par. (23).\nSubsec. (d)(3)(B).  Pub. L. 96–605, §\u202f225(b)(2) , substituted in cl. (i) “section 410(b)(3)(A)” for “section 410(b)(2)(A)” and in cl. (ii) “section 410(b)(3)(C)” for “section 410(b)(2)(C)”.\n1978—Subsec. (a)(5).  Pub. L. 95–600, §\u202f152(e) , inserted provision that for purposes of determining whether one or more plans of the employer satisfy the requirements of section 410(b)(4), an employer may take into account all simplified employee pensions to which only the employer contributes.\nSubsec. (a)(21).  Pub. L. 95–600, §\u202f141(f)(3) , substituted “ESOP” for “employee stock option plan which satisfies the requirements of section 301(d) of the Tax Reduction Act of 1975” and “section 48(n)(1)” for “subsection (d)(6) or (e)(3) of section 301 of the Tax Reduction Act of 1975”.\nSubsec. (a)(22).  Pub. L. 95–600, §\u202f143(a) , added par. (22).\nSubsecs. (k), ( l ).  Pub. L. 95–600, §\u202f135(a) , added subsec. (k) and redesignated former subsec. (k) as ( l ).\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f803(b)(2), 1901(a)(56), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in pars. (5), (11), and (14), substituted references to  Sept. 2, 1974 , for references to the enactment of the Employee Retirement Income Security Act of 1974 in pars. (12), (13), (15), and (19), added par. (21), and inserted reference to par. (20) in provisions following par. (21), such addition of reference to par. (20) duplicating amendment by  Pub. L. 94–267, §\u202f1(c)(2) .\nPub. L. 94–267, §\u202f1(c)(2) , substituted “(19), and (20)” for “and (19)”.\nSubsec. (a)(20).  Pub. L. 94–267, §\u202f1(c)(1) , added par. (20).\nSubsecs. (b), (c), (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1505(b) , inserted reference to contracts (other than life, health, or accident, property, casualty, or liability insurance contracts) issued by an insurance company qualified to do a business in a State and struck out “or his delegate” after “Secretary”.\nSubsecs. (h), (i), (j).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1974—Subsec. (a).  Pub. L. 93–406, §\u202f1021(a)(2) , inserted provision that paragraphs (11), (12), (13), (14), (15), and (19) shall apply only in the case of a plan to which section 411 (relating to minimum vesting standards) applies without regard to subsection (e)(2) of this section.\nSubsec. (a)(3).  Pub. L. 93–406, §\u202f1016(a)(2)(A) , substituted provisions referring simply to a plan of which the trust is a part and the satisfaction by that plan of the requirements of section 410 (relating to minimum participation standards) for provisions referring to a trust, trusts, or trust or trusts and annuity plan or plans designated by the employer as constituting parts of a plan intended to qualify under subsec. (a) and spelling out the requisite coverage of the plan.\nSubsec. (a)(4).  Pub. L. 93–406, §\u202f1022(a) , struck out provisions referring to persons whose principal duties consist in supervising the work of other employees and inserted provisions directing the exclusion from consideration of employees described in section 410(b)(2) (A) and (C).\nSubsec. (a)(5).  Pub. L. 93–406 , §§\u202f1012(b), 1016(a)(2)(B), inserted provisions covering the determination of whether two or more plans of an employer satisfy the requirements of par. (4) when considered as a single plan and substituted “shall not be considered discriminatory within the meaning of paragraph (4) of section 410(b) (without regard to paragraph (1)(A) thereof)” for “shall not be considered discriminatory within the meaning of paragraph (3)(B) or (4)”.\nSubsec. (a)(7).  Pub. L. 93–406, §\u202f1016(a)(2)(C) , substituted provisions referring simply to the satisfaction by the plan of which a trust is a part of the requirements of section 411 (relating to minimum vesting standards) for provisions spelling out in detail the conditions which the plan had to satisfy in order that the trust forming part of that plan constitute a qualified trust under this section.\nSubsec. (a)(10)(A).  Pub. L. 93–406 , §§\u202f1022(b)(1), 2001(e)(4), inserted reference to section 410 in provisions preceding cl. (i) and substituted “subsection (e)” for “subsection (e)(3)(A)” in cl. (ii).\nSubsec. (a)(11).  Pub. L. 93–406, §\u202f1021(a)(1) , added par. (11).\nSubsec. (a)(12).  Pub. L. 93–406, §\u202f1021(b) , added par. (12).\nSubsec. (a)(13).  Pub. L. 93–406, §\u202f1021(c) , added par. (13).\nSubsec. (a)(14).  Pub. L. 93–406, §\u202f1021(d) , added par. (14).\nSubsec. (a)(15).  Pub. L. 93–406, §\u202f1021(e) , added par. (15).\nSubsec. (a)(16).  Pub. L. 93–406, §\u202f2004(a)(1) , added par. (16).\nSubsec. (a)(17).  Pub. L. 93–406, §\u202f2001(c) , added par. (17).\nSubsec. (a)(18).  Pub. L. 93–406, §\u202f2001(d)(1) , added par. (18).\nSubsec. (a)(19).  Pub. L. 93–406, §\u202f1021(f) , added par. (19).\nSubsec. (b).  Pub. L. 93–406, §\u202f1023 , substituted reference to the requirements of subsection (a) for the period beginning with the date on which a stock bonus, pension, profit-sharing, or annuity plan was put into effect, or for the period beginning with the earlier of the date on which there was adopted or put into effect any amendment which caused the plan to fail to satisfy such requirements, and ending with the time prescribed by law for filing the return of the employer for his taxable year in which such plan or amendment was adopted (including extensions thereof) or such later time as the Secretary or his delegate may designate for reference to the requirements of paragraphs (3), (4), (5), and (6) of subsection (a) for the period beginning with the date on which a stock bonus, pension, profit-sharing, or annuity plan was put into effect and ending with the 15th day of the third month following the close of the taxable year of the employer in which the plan was put in effect.\nSubsec. (d)(1).  Pub. L. 93–406, §\u202f1022(c) , (f), substituted “ October 10, 1962 ” for “the date of the enactment of this subsection” and “assets thereof are held by a bank or other person who demonstrates to the satisfaction of the Secretary or his delegate that the manner in which he will administer the trust will be consistent with the requirements of this section. A trust shall not be disqualified under this paragraph merely because a person (including the employer) other than the trustee or custodian so administering the trust” for “trustee is a bank, but a person (including the employer) other than a bank” and inserted reference to an insured credit union (within the meaning of section 101(6) of the Federal Credit Union Act) in definition of “bank”.\nSubsec. (d)(3).  Pub. L. 93–406, §\u202f1022(b)(2) , inserted reference to the section 410(a)(3) definition of “years of service” and substituted reference to employees included in a unit of employees covered by a collective-bargaining agreement described in section 410(b)(2)(A) and employees who are nonresident aliens described in section 410(b)(2)(C) for reference to employees whose customary employment was for not more than 20 hours in any one week or was for not more than 5 months in any calendar year.\nSubsec. (d)(4)(B).  Pub. L. 93–406, §\u202f2001(h)(1) , inserted “in excess of contributions made by an owner-employee as an employee” after “benefits”.\nSubsec. (d)(5).  Pub. L. 93–406, §\u202f2001(e)(1) , substituted “Subparagraphs (A) and (B) do not apply to contributions described in subsection (e)” for “Subparagraphs (A) and (B) shall not apply to any contribution which is not considered to be an excess contribution (as defined in subsection (e)(1)) by reason of the application of subsection (e)(3)”.\nSubsec. (d)(8).  Pub. L. 93–406, §\u202f2001(e)(2) , struck out par. (8) covering excess contributions.\nSubsec. (e).  Pub. L. 93–406, §\u202f2001(e)(3) , struck out pars. (1) and (2) which defined and described the effect of excess contributions, redesignated par. (3) as the entire subsec. (e) and in provisions as thus carried forward as the entire subsec. (e) substituted “$7,500” for “$2,500” and inserted references to section 4972(b).\nSubsec. (f).  Pub. L. 93–406, §\u202f1022(d) , expanded provisions to cover annuity contracts.\nSubsecs. (j), (k).  Pub. L. 93–406, §\u202f2001(d)(2) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1971—Subsec. (i).  Pub. L. 91–691  struck out “multi-employer” before “pension plans” in heading, and substituted “one or more employers” for “two or more employers who are not related (determined under regulations prescribed by the Secretary or his delegate)” in par. (1).\n1966—Subsec. (a)(10)(A)(ii).  Pub. L. 89–809, §\u202f204(b)(1)(A) , struck out “(determined without regard to section 404(a)(10))” after “deducted under section 404”.\nSubsec. (c)(2)(A).  Pub. L. 89–809, §\u202f204(c) , struck out “to the extent that such net earnings constitute earned income (as defined in section 911(b) but determined with the application of subparagraph (B))” after “The term ‘earned income’ means the net earnings from self-employment (as defined in section 1402(a))”, added cl. (i) and redesignated former cls. (i) to (ii) as (ii) to (iv), respectively, and struck out references to section 911(b) and subparagraph (B), as in effect for a taxable year beginning on  January 1, 1963 , in text following cl. (iv).\nSubsec. (c)(2)(B).  Pub. L. 89–809, §\u202f204(c) , struck out subpar. (B) relating to earned income when both personal services and capital are material income-producing factors. See subsec. (c)(2)(A)(i).\nSubsec. (c)(2)(C).  Pub. L. 89–809, §\u202f205(a) , added subpar. (C).\nSubsecs. (d)(5)(A), (B), (d)(6)(A), (e)(1)(A), (B)(i), (3).  Pub. L. 89–809, §\u202f204(b)(1)(B)  to (E), struck out “(determined without regard to section 404(a)(10))” wherever appearing.\n1965—Subsec. (d)(4)(B).  Pub. L. 89–97  substituted “section 72(m)(7)” for “section 213(g)(3)”.\n1964—Subsecs. (i), (j).  Pub. L. 88–272  added subsec. (i) and redesignated former subsec. (i) as (j).\n1962—Subsec. (a)(5).  Pub. L. 87–792, §\u202f2(1) , inserted provisions defining total compensation for purposes of par. (5) and par. (10) of this subsection.\nSubsec. (a)(7) to (10).  Pub. L. 87–792, §\u202f2(2) , added pars. (7) to (10).\nSubsecs. (c) to (g).  Pub. L. 87–792, §\u202f2(3) , added subsecs. (c) to (g). Former subsec. (c) redesignated (h).\nSubsec. (h).  Pub. L. 87–863  added subsec. (h). Former subsec. (h) redesignated (i).\nPub. L. 87–792, §\u202f2(3) , redesignated former subsec. (c) as (h).\nSubsec. (i).  Pub. L. 87–863  redesignated former subsec. (h) as (i).\nPub. L. 117–328, div. T, title I, §\u202f107(e) ,  Dec. 29, 2022 ,  136 Stat. 5289 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to distributions required to be made after  December 31, 2022 , with respect to individuals who attain age 72 after such date.”\nPub. L. 117–328, div. T, title I, §\u202f110(h) ,  Dec. 29, 2022 ,  136 Stat. 5293 , provided that:  “The amendments made by this section [amending this section and sections 403, 408, and 457 of this title] shall apply to contributions made for plan years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title I, §\u202f113(e) ,  Dec. 29, 2022 ,  136 Stat. 5296 , provided that:  “The amendments made by this section [amending this section and sections 403 and 4975 of this title and  section 1108 of Title 29 , Labor] shall apply with respect to plan years beginning after the date of enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title I, §\u202f116(c) ,  Dec. 29, 2022 ,  136 Stat. 5299 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to taxable years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title I, §\u202f117(h) ,  Dec. 29, 2022 ,  136 Stat. 5301 , provided that:  “The amendments made by this section [amending this section and sections 408 and 414 of this title] shall apply to taxable years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title I, §\u202f121(d) ,  Dec. 29, 2022 ,  136 Stat. 5311 , provided that:  “The amendments made by this section [amending this section and sections 403 and 416 of this title] shall apply to plan years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title I, §\u202f123(b) ,  Dec. 29, 2022 ,  136 Stat. 5314 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2027 .”\nPub. L. 117–328, div. T, title I, §\u202f125(f) ,  Dec. 29, 2022 ,  136 Stat. 5316 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section, sections 403 and 416 of this title and sections 1052 and 1053 of Title 29, Labor, and provisions set out as a note under this section] shall apply to plan years beginning after  December 31, 2024 . \n \n “(2)   Subsection ( d ) and ( e).— The amendments made by subsections (d) and (e) [amending  section 416 of this title  and provisions set out as a note under this section] shall take effect as if included in the enactment of section 112 of the Setting Every Community Up for Retirement Enhancement Act of 2019 [div. O of  Pub. L. 116–94 ].”\nPub. L. 117–328, div. T, title II, §\u202f201(b) ,  Dec. 29, 2022 ,  136 Stat. 5331 , provided that:  “This section [amending this section] shall apply to calendar years ending after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f304(b) ,  Dec. 29, 2022 ,  136 Stat. 5341 , provided that:  “The amendments made by this section [amending this section,  section 411 of this title , and  section 1053 of Title 29 , Labor] shall apply to distributions made after  December 31, 2023 .”\nPub. L. 117–328, div. T, title III, §\u202f312(d) ,  Dec. 29, 2022 ,  136 Stat. 5348 , provided that:  “The amendments made by this section [amending this section and sections 403 and 457 of this title] shall apply to plan years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f316(b) ,  Dec. 29, 2022 ,  136 Stat. 5352 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title III, §\u202f317(b) ,  Dec. 29, 2022 ,  136 Stat. 5352 , provided that:  “The amendment made by this section [amending this section] shall apply to plan years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f327(c) ,  Dec. 29, 2022 ,  136 Stat. 5360 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after  December 31, 2023 .”\nAmendment by section 334(a), (b)(1) of  Pub. L. 117–328  applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , see  section 334(e) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nPub. L. 117–328, div. T, title III, §\u202f337(c) ,  Dec. 29, 2022 ,  136 Stat. 5373 , provided that:  “The amendments made by this section [amending this section] shall apply to calendar years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nAmendment by section 401(a)(1), (2), (b)(2), (3) of  Pub. L. 117–328  effective as if included in the section of div. O of  Pub. L. 116–94  to which the amendment relates, see  section 401(c) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nPub. L. 116–260, div. EE, title II, §\u202f208(b) ,  Dec. 27, 2020 ,  134 Stat. 3066 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made before, on, or after the date of the enactment of this Act [ Dec. 27, 2020 ].”\nPub. L. 116–136, div. A, title II, §\u202f2203(c) ,  Mar. 27, 2020 ,  134 Stat. 344 , as amended by  Pub. L. 117–328, div. T, title V, §\u202f501(c)(2)(B) ,  Dec. 29, 2022 ,  136 Stat. 5389 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 402 of this title ] shall apply for calendar years beginning after  December 31, 2019 . \n \n “(2)   Provisions relating to plan or contract amendments.— “(A)   In general .— If this paragraph applies to any plan or contract amendment— “(i)  such plan or contract shall not fail to be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii) solely because the plan operates in accordance with this section, and \n \n “(ii)  except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such plan or contract shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(B)   Amendments to which paragraph applies.— “(i)   In general .— This paragraph shall apply to any amendment to any plan or annuity contract which— “(I)  is made pursuant to the amendments made by this section, and \n \n “(II)  is made on or before the last day of the first plan year beginning on or after  January 1, 2025 . \n \n\n \u2001\u2001In the case of a governmental plan, subclause (II) shall be applied by substituting ‘2027’ for ‘2025’. \n \n “(ii)   Conditions .— This paragraph shall not apply to any amendment unless during the period beginning on the effective date of the amendment and ending on  December 31, 2020 , the plan or contract is operated as if such plan or contract amendment were in effect.”\nPub. L. 116–94, div. M, §\u202f104(c) ,  Dec. 20, 2019 ,  133 Stat. 3095 , provided that:  “The amendments made by this section [amending this section and  section 457 of this title ] shall apply to plan years beginning after  December 31, 2019 .”\nPub. L. 116–94, div. O, title I, §\u202f102(b) ,  Dec. 20, 2019 ,  133 Stat. 3146 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2019 .”\nPub. L. 116–94, div. O, title I, §\u202f103(d) ,  Dec. 20, 2019 ,  133 Stat. 3147 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2019 .”\nPub. L. 116–94, div. O, title I, §\u202f109(e) ,  Dec. 20, 2019 ,  133 Stat. 3152 , provided that:  “The amendments made by this section [amending this section and sections 403 and 457 of this title] shall apply to plan years beginning after  December 31, 2019 .”\nPub. L. 116–94, div. O, title I, §\u202f112(b) ,  Dec. 20, 2019 ,  133 Stat. 3154 , as amended by  Pub. L. 117–328, div. T, title I, §\u202f125(d) ,  Dec. 29, 2022 ,  136 Stat. 5315 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2020 , except that, for purposes of paragraphs (2)(D)(ii) and (15)(B)(iii) of section 401(k) of the Internal Revenue Code of 1986 (as added by such amendments), 12-month periods beginning before  January 1, 2021 , shall not be taken into account.”\nPub. L. 116–94, div. O, title I, §\u202f114(d) ,  Dec. 20, 2019 ,  133 Stat. 3156 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to distributions required to be made after  December 31, 2019 , with respect to individuals who attain age 70½ after such date.”\nPub. L. 116–94, div. O, title II, §\u202f201(b) ,  Dec. 20, 2019 ,  133 Stat. 3162 , provided that:  “The amendments made by this section [amending this section] shall apply to plans adopted for taxable years beginning after  December 31, 2019 .”\nPub. L. 116–94, div. O, title II, §\u202f205(c) ,  Dec. 20, 2019 ,  133 Stat. 3173 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Dec. 20, 2019 ], without regard to whether any plan modifications referred to in such amendments are adopted or effective before, on, or after such date of enactment. \n \n “(2)   Special rules.— “(A)   Election of earlier application .— At the election of the plan sponsor, the amendments made by this section shall apply to plan years beginning after  December 31, 2013 . \n \n “(B)   Closed classes of participants .— For purposes of paragraphs (1)(A)(iii), (1)(B)(iii)(IV), and (2)(A)(iv) of section 401( o ) of the Internal Revenue Code of 1986 (as added by this section), a closed class of participants shall be treated as being closed before  April 5, 2017 , if the plan sponsor’s intention to create such closed class is reflected in formal written documents and communicated to participants before such date. \n \n “(C)   Certain post-enactment plan amendments .— A plan shall not be treated as failing to be eligible for the application of section 401( o )(1)(A), 401( o )(1)(B)(iii), or 401(a)(26) of such Code (as added by this section) to such plan solely because in the case of— “(i)  such section 401( o )(1)(A), the plan was amended before the date of the enactment of this Act to eliminate 1 or more benefits, rights, or features, and is further amended after such date of enactment to provide such previously eliminated benefits, rights, or features to a closed class of participants, or \n \n “(ii)  such section 401( o )(1)(B)(iii) or section 401(a)(26), the plan was amended before the date of the enactment of this Act to cease all benefit accruals, and is further amended after such date of enactment to provide benefit accruals to a closed class of participants. \n \n\n Any such section shall only apply if the plan otherwise meets the requirements of such section and in applying such section, the date the class of participants is closed shall be the effective date of the later amendment.”\nPub. L. 116–94, div. O, title IV, §\u202f401(b) ,  Dec. 20, 2019 ,  133 Stat. 3178 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to distributions with respect to employees who die after  December 31, 2019 . \n \n “(2)   Collective bargaining exception .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of enactment of this Act [ Dec. 20, 2019 ], the amendments made by this section shall apply to distributions with respect to employees who die in calendar years beginning after the earlier of— “(A)  the later of— “(i)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof agreed to on or after the date of the enactment of this Act), or \n \n “(ii)   December 31, 2019 , or \n \n \n “(B)   December 31, 2021 . \n \n\n For purposes of subparagraph (A)(i), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement. \n \n “(3)   Governmental plans .— In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), paragraph (1) shall be applied by substituting ‘ December 31, 2021 ’ for ‘ December 31, 2019 ’. \n \n “(4)   Exception for certain existing annuity contracts .— “(A)   In general .— The amendments made by this section shall not apply to a qualified annuity which is a binding annuity contract in effect on the date of enactment of this Act and at all times thereafter. \n \n “(B)   Qualified annuity .— For purposes of this paragraph, the term ‘qualified annuity’ means, with respect to an employee, an annuity— “(i)  which is a commercial annuity (as defined in section 3405(e)(6) of the Internal Revenue Code of 1986); \n \n “(ii)  under which the annuity payments are made over the life of the employee or over the joint lives of such employee and a designated beneficiary (or over a period not extending beyond the life expectancy of such employee or the joint life expectancy of such employee and a designated beneficiary) in accordance with the regulations described in section 401(a)(9)(A)(ii) of such Code (as in effect before such amendments) and which meets the other requirements of section 401(a)(9) of such Code (as so in effect) with respect to such payments; and \n \n “(iii)  with respect to which— “(I)  annuity payments to the employee have begun before the date of enactment of this Act, and the employee has made an irrevocable election before such date as to the method and amount of the annuity payments to the employee or any designated beneficiaries; or \n \n “(II)  if subclause (I) does not apply, the employee has made an irrevocable election before the date of enactment of this Act as to the method and amount of the annuity payments to the employee or any designated beneficiaries. \n \n \n \n \n “(5)   Exception for certain beneficiaries.— “(A)   In general .— If an employee dies before the effective date, then, in applying the amendments made by this section to such employee’s designated beneficiary who dies after such date— “(i)  such amendments shall apply to any beneficiary of such designated beneficiary; and \n \n “(ii)  the designated beneficiary shall be treated as an eligible designated beneficiary for purposes of applying section 401(a)(9)(H)(ii) of the Internal Revenue Code of 1986 (as in effect after such amendments). \n \n \n “(B)   Effective date .— For purposes of this paragraph, the term ‘effective date’ means the first day of the first calendar year to which the amendments made by this section apply to a plan with respect to employees dying on or after such date.”\nPub. L. 115–123, div. D, title II, §\u202f41114(c) ,  Feb. 9, 2018 ,  132 Stat. 161 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2018 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 113–97, §\u202f3 ,  Apr. 7, 2014 ,  128 Stat. 1101 , provided that:  “Unless otherwise specified in this Act [see Tables for classification], the provisions of this Act shall apply to years beginning after  December 31, 2013 .”\nPub. L. 111–192, title II, §\u202f202(c)(1) ,  June 25, 2010 ,  124 Stat. 1299 , provided that:  “The amendment made by subsection (a) [amending sections 1021, 1023, 1053, 1054, 1056, 1057, 1103, 1108, 1301, 1303, 1310, 1362, 1371, and 1423 of Title 29, Labor, and section 106 of 1978 Reorg. Plan No. 4, set out in the Appendix to Title 5, Government Organization and Employees, and as a note under  section 1001 of Title 29 , enacting provisions set out as a note under this section, and amending provisions set out as a note under  section 1021 of Title 29 ] shall take effect as if included in the Pension Protection Act of 2006 [ Pub. L. 109–280 ].”\nAmendment by sections 101(d)(2)(A)–(C) and 109(a)–(b)(2) of  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 110–458, title II, §\u202f201(c) ,  Dec. 23, 2008 ,  122 Stat. 5117 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 402 of this title ] shall apply for calendar years beginning after  December 31, 2008 . \n \n “(2)   Provisions relating to plan or contract amendments.— “(A)   In general .— If this paragraph applies to any pension plan or contract amendment, such pension plan or contract shall not fail to be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii) solely because the plan operates in accordance with this section. \n \n “(B)   Amendments to which paragraph applies.— “(i)   In general .— This paragraph shall apply to any amendment to any pension plan or annuity contract which— “(I)  is made pursuant to the amendments made by this section, and \n \n “(II)  is made on or before the last day of the first plan year beginning on or after  January 1, 2011 . \n \n\n \u2001\u2001In the case of a governmental plan, subclause (II) shall be applied by substituting ‘2012’ for ‘2011’. \n \n “(ii)   Conditions .— This paragraph shall not apply to any amendment unless during the period beginning on the effective date of the amendment and ending on  December 31, 2009 , the plan or contract is operated as if such plan or contract amendment were in effect.”\nPub. L. 110–245, title I, §\u202f104(d) ,  June 17, 2008 ,  122 Stat. 1627 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 403, 404, 414, and 457 of this title] shall apply with respect to deaths and disabilities occurring on or after  January 1, 2007 . \n \n “(2)   Provisions relating to plan amendments.— “(A)   In general .— If this subparagraph applies to any plan or contract amendment, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(iii). \n \n “(B)   Amendments to which subparagraph (A) applies.— “(i)   In general .— Subparagraph (A) shall apply to any amendment to any plan or annuity contract which is made— “(I)  pursuant to the amendments made by subsection (a) [amending this section] or pursuant to any regulation issued by the Secretary of the Treasury under subsection (a), and \n \n “(II)  on or before the last day of the first plan year beginning on or after  January 1, 2010 . \n \n\n \u2001\u2001In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this clause shall be applied by substituting ‘2012’ for ‘2010’ in subclause (II). \n \n “(ii)   Conditions .— This paragraph shall not apply to any amendment unless— “(I)  the plan or contract is operated as if such plan or contract amendment were in effect for the period described in clause (iii), and \n \n “(II)  such plan or contract amendment applies retroactively for such period. \n \n \n “(iii)   Period described .— The period described in this clause is the period— “(I)  beginning on the effective date specified by the plan, and \n \n “(II)  ending on the date described in clause (i)(II) (or, if earlier, the date the plan or contract amendment is adopted).”\nPub. L. 109–280, title I, §\u202f114(g) , as added by  Pub. L. 110–458, title I, §\u202f101(d)(3) ,  Dec. 23, 2008 ,  122 Stat. 5099 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 411, 414, 420, 4971, 4972, and 6059 of this title] shall apply to plan years beginning after 2007. \n \n “(2)   Excise tax .— The amendments made by subsection (e) [amending sections 4971 and 4972 of this title] shall apply to taxable years beginning after 2007, but only with respect to plan years described in paragraph (1) which end with or within any such taxable year.”\nAmendment by  section 827(b)(1) of Pub. L. 109–280  applicable to distributions after  Sept. 11, 2001 , with waiver of limitations if refund or credit of overpayment of tax resulting from such amendment is prevented before the close of the 1-year period beginning on  Aug. 17, 2006 , see  section 827(c) of Pub. L. 109–280 , set out as a note under  section 72 of this title .\nPub. L. 109–280, title VIII, §\u202f861(c) ,  Aug. 17, 2006 ,  120 Stat. 1021 , provided that:  “The amendments made by this section [amending this section and provisions set out as a note under this section] shall apply to any year beginning after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title IX, §\u202f901(c) ,  Aug. 17, 2006 ,  120 Stat. 1032 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section, sections 409 and 4980 of this title, and sections 1054 and 1107 of Title 29, Labor] shall apply to plan years beginning after  December 31, 2006 . \n \n “(2)   Special rule for collectively bargained agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified on or before the date of the enactment of this Act [ Aug. 17, 2006 ], paragraph (1) shall be applied to benefits pursuant to, and individuals covered by, any such agreement by substituting for ‘ December 31, 2006 ’ the earlier of— “(A)  the later of— “(i)   December 31, 2007 , or \n \n “(ii)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after such date of enactment), or \n \n \n “(B)   December 31, 2008 . \n \n \n “(3)   Special rule for certain employer securities held in an esop.— “(A)   In general .— In the case of employer securities to which this paragraph applies, the amendments made by this section [amending this section, sections 409 and 4980 of this title, and sections 1054 and 1107 of Title 29, Labor] shall apply to plan years beginning after the earlier of— “(i)   December 31, 2007 , or \n \n “(ii)  the first date on which the fair market value of such securities exceeds the guaranteed minimum value described in subparagraph (B)(ii). \n \n \n “(B)   Applicable securities .— This paragraph shall apply to employer securities which are attributable to employer contributions other than elective deferrals, and which, on  September 17, 2003 — “(i)  consist of preferred stock, and \n \n “(ii)  are within an employee stock ownership plan (as defined in section 4975(e)(7) of the Internal Revenue Code of 1986), the terms of which provide that the value of the securities cannot be less than the guaranteed minimum value specified by the plan on such date. \n \n \n “(C)   Coordination with transition rule .— In applying section 401(a)(35)(H) of the Internal Revenue Code of 1986 and section 204(j)(7) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(j)(7) ] (as added by this section) to employer securities to which this paragraph applies, the applicable percentage shall be determined without regard to this paragraph.”\nPub. L. 109–280, title IX, §\u202f902(g) ,  Aug. 17, 2006 ,  120 Stat. 1039 , provided that:  “The amendments made by this section [amending this section, sections 411, 414, 416, and 4979 of this title, and sections 1053, 1132, and 1144 of Title 29, Labor] shall apply to plan years beginning after  December 31, 2007 , except that the amendments made by subsection (f) [amending sections 1132 and 1144 of Title 29] shall take effect on the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title IX, §\u202f905(c) ,  Aug. 17, 2006 ,  120 Stat. 1051 , provided that:  “The amendments made by this section [amending this section and  section 1002 of Title 29 , Labor] shall apply to distributions in plan years beginning after  December 31, 2006 .”\nPub. L. 108–311, title IV, §\u202f407(c) ,  Oct. 4, 2004 ,  118 Stat. 1190 , provided that:  “The amendments made by this section [amending this section and  section 1377 of this title ] shall take effect as if included in the provisions of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 ] to which they relate.”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by section 611(c), (f)(3), (g)(1) of  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nAmendment by  section 641(e)(3) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nPub. L. 107–16, title VI, §\u202f643(d) ,  June 7, 2001 ,  115 Stat. 123 , provided that:  “The amendments made by this section [amending this section and sections 402 and 408 of this title] shall apply to distributions made after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f646(b) ,  June 7, 2001 ,  115 Stat. 126 , provided that:  “The amendments made by this section [amending this section and sections 403 and 457 of this title] shall apply to distributions after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f657(d) ,  June 7, 2001 ,  115 Stat. 137 , provided that:  “The amendments made by this section [amending this section,  section 402 of this title , and  section 1104 of Title 29 , Labor] shall apply to distributions made after final regulations implementing subsection (c)(2)(A) [set out as a note below] are prescribed [Final regulations implementing subsec. (c)(2)(A) became effective  Mar. 28, 2005 . See 69 F.R. 58017.].”\nPub. L. 107–16, title VI, §\u202f666(b) ,  June 7, 2001 ,  115 Stat. 144 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 2001 .”\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see section 1(a)(7) [title III, §\u202f316(e)] of  Pub. L. 106–554 , set out as a note under  section 51 of this title .\nPub. L. 105–34, title XV, §\u202f1502(c) ,  Aug. 5, 1997 ,  111 Stat. 1061 , provided that:  “The amendments made by this section [amending this section and  section 1056 of Title 29 , Labor] shall apply to judgments, orders, and decrees issued, and settlement agreements entered into, on or after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XV, §\u202f1505(d) ,  Aug. 5, 1997 ,  111 Stat. 1064 , as amended by  Pub. L. 105–206, title VI, §\u202f6015(b) ,  July 22, 1998 ,  112 Stat. 820 ;  Pub. L. 109–280, title VIII, §\u202f861(a)(2) ,  Aug. 17, 2006 ,  120 Stat. 1021 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 403 and 410 of this title] apply to taxable years beginning on or after the date of enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Treatment for years beginning before date of enactment .— A governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of 1986) shall be treated as satisfying the requirements of sections 401(a)(3), 401(a)(4), 401(a)(26), 401(k), 401(m), 403(b)(1)(D) and (b)(12)(A)(i), and 410 of such Code for all taxable years beginning before the date of enactment of this Act.”\nPub. L. 105–34, title XV, §\u202f1525(b) ,  Aug. 5, 1997 ,  111 Stat. 1072 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1997 .”\nPub. L. 105–34, title XV, §\u202f1530(d) ,  Aug. 5, 1997 ,  111 Stat. 1080 , provided that:  “The amendments made by this section [amending this section and sections 404, 415, 664, 674, 2055, 2056, 4947, 4975, 4978, and 4979A of this title] shall apply to transfers made by trusts to, or for the use of, an employee stock ownership plan after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by section 1601(d)(2)(A), (B), (3) of  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, and amendment by  section 1601(d)(2)(D) of Pub. L. 105–34  applicable to calendar years beginning after  Aug. 5, 1997 , see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by section 1401(b)(5), (6) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nPub. L. 104–188, title I, §\u202f1404(b) ,  Aug. 20, 1996 ,  110 Stat. 1792 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1422(c) ,  Aug. 20, 1996 ,  110 Stat. 1801 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1426(b) ,  Aug. 20, 1996 ,  110 Stat. 1802 , provided that:  “The amendment made by this section [amending this section] shall apply to plan years beginning after  December 31, 1996 , but shall not apply to any cash or deferred arrangement to which clause (i) of section 1116(f)(2)(B) of the Tax Reform Act of 1986 applies [ Pub. L. 99–514 , set out below].”\nAmendment by  section 1431(b)(2) of Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , and amendment by  section 1431(c)(1)(B) of Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , except that in determining whether an employee is a highly compensated employee for years beginning in 1997, amendment by section 1431(c)(1)(B) to be treated as having been in effect for years beginning in 1996, see  section 1431(d) of Pub. L. 104–188 , set out as a note under  section 414 of this title .\nPub. L. 104–188, title I, §\u202f1432(c) ,  Aug. 20, 1996 ,  110 Stat. 1804 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1433(f) ,  Aug. 20, 1996 ,  110 Stat. 1807 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 1998 . \n \n “(2)   Exceptions .— The amendments made by subsections (c), (d), and (e) [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1441(b) ,  Aug. 20, 1996 ,  110 Stat. 1808 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1443(c) ,  Aug. 20, 1996 ,  110 Stat. 1809 , provided that: \n “(1)   Distributions .— The amendments made by subsection (a) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Public utility districts .— The amendments made by subsection (b) [amending this section] shall apply to plan years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1445(b) ,  Aug. 20, 1996 ,  110 Stat. 1811 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1459(c) ,  Aug. 20, 1996 ,  110 Stat. 1820 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 1998 .”\nPub. L. 103–465, title VII, §\u202f732(e) ,  Dec. 8, 1994 ,  108 Stat. 5005 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 402, 408, and 415 of this title] shall apply to years beginning after  December 31, 1994 . \n \n “(2)   Rounding not to result in decreases .— The amendments made by this section providing for the rounding of indexed amounts shall not apply to any year to the extent the rounding would require the indexed amount to be reduced below the amount in effect for years beginning in 1994.”\nPub. L. 103–465, title VII, §\u202f751(b) ,  Dec. 8, 1994 ,  108 Stat. 5022 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 404, 412, and 4971 of this title] shall apply to plan years beginning after  December 31, 1994 . \n \n “(2)   Reference .— The amendment made by subsection (a)(11) [amending  section 404 of this title ] shall take effect on the date of the enactment of this Act [ Dec. 8, 1994 ].”\nPub. L. 103–465, title VII, §\u202f766(d) ,  Dec. 8, 1994 ,  108 Stat. 5037 , provided that:  “The amendments made by this section [amending this section and sections 1054 and 1322 of Title 29, Labor] shall apply to plan amendments adopted on or after the date of enactment of this Act [ Dec. 8, 1994 ].”\nAmendment by  section 776(d) of Pub. L. 103–465  effective with respect to distributions that occur in plan years commencing on or after  Jan. 1, 1996 , see  section 776(e) of Pub. L. 103–465 , set out as a note under  section 1056 of Title 29 , Labor.\nPub. L. 103–465, title VII, §\u202f781 ,  Dec. 8, 1994 ,  108 Stat. 5050 , provided that:  “Except as otherwise provided in this subtitle [subtitle F (§§\u202f750–781) of title VII of  Pub. L. 103–465 , enacting sections 1310, 1311, and 1350 of Title 29, Labor, amending this section, sections 404, 411, 412, 415, 417, 4971, and 4972 of this title, and sections 1053 to 1056, 1082, 1132, 1301, 1303, 1305, 1306, 1322, 1341, 1342, and 1343 of Title 29, and enacting provisions set out as notes under this section, sections 1, 411, 412, and 4972 of this title, and sections 1056, 1082, 1303, 1306, 1310, 1311, 1322, 1341, and 1342 of Title 29], the amendments made by this subtitle shall be effective on the date of enactment of this Act [ Dec. 8, 1994 ].”\nPub. L. 103–66, title XIII, §\u202f13212(d) ,  Aug. 10, 1993 ,  107 Stat. 472 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 404, 408, and 505 of this title] shall apply to benefits accruing in plan years beginning after  December 31, 1993 . \n \n “(2)   Collectively bargained plans .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of the enactment of this Act [ Aug. 10, 1993 ], the amendments made by this section shall not apply to contributions or benefits pursuant to such agreements for plan years beginning before the earlier of— “(A)  the latest of— “(i)   January 1, 1994 , \n \n “(ii)  the date on which the last of such collective bargaining agreements terminates (without regard to any extension, amendment, or modification of such agreements on or after such date of enactment), or \n \n “(iii)  in the case of a plan maintained pursuant to collective bargaining under the Railway Labor Act [ 45 U.S.C. 151  et seq.], the date of execution of an extension or replacement of the last of such collective bargaining agreements in effect on such date of enactment, or \n \n \n “(B)   January 1, 1997 . \n \n \n “(3)   Transition rule for state and local plans.— “(A)   In general .— In the case of an eligible participant in a governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of 1986), the dollar limitation under section 401(a)(17) of such Code shall not apply to the extent the amount of compensation which is allowed to be taken into account under the plan would be reduced below the amount which was allowed to be taken into account under the plan as in effect on  July 1, 1993 . \n \n “(B)   Eligible participant .— For purposes of subparagraph (A), an eligible participant is an individual who first became a participant in the plan during a plan year beginning before the 1st plan year beginning after the earlier of— “(i)  the plan year in which the plan is amended to reflect the amendments made by this section, or \n \n “(ii)   December 31, 1995 . \n \n \n “(C)   Plan must be amended to incorporate limits .— This paragraph shall not apply to any eligible participant of a plan unless the plan is amended so that the plan incorporates by reference the dollar limitation under section 401(a)(17) of the Internal Revenue Code of 1986, effective with respect to noneligible participants for plan years beginning after  December 31, 1995  (or earlier if the plan amendment so provides).”\nAmendment by section 521(b)(5)–(8) of  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nPub. L. 102–318, title V, §\u202f522(d) ,  July 3, 1992 ,  106 Stat. 315 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 402 to 404, 3402, 3405, 6047, and 6652 of this title] shall apply to distributions after  December 31, 1992 . \n \n “(2)   Transition rule for certain annuity contracts .— If, as of  July 1, 1992 , a State law prohibits a direct trustee-to-trustee transfer from an annuity contract described in section 403(b) of the Internal Revenue Code of 1986 which was purchased for an employee by an employer which is a State or a political subdivision thereof (or an agency or instrumentality of any 1 or more of either), the amendments made by this section shall not apply to distributions before the earlier of— “(A)  90 days after the first day after  July 1, 1992 , on which such transfer is allowed under State law, or \n \n “(B)   January 1, 1994 .”\nAmendment by  Pub. L. 101–508  applicable to transfers in taxable years beginning after  Dec. 31, 1990 , see  section 12011(c)(1) of Pub. L. 101–508 , set out as an Effective Date note under  section 420 of this title .\nPub. L. 101–239, title VII, §\u202f7311(b) ,  Dec. 19, 1989 ,  103 Stat. 2354 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to contributions after  October 3, 1989 . \n \n “(2)   Transition .— The amendment made by this section shall not apply to contributions made before  January 1, 1990 , if— “(A)  the employer requested before  October 3, 1989 , a private letter ruling or determination letter with respect to the qualification of the plan maintaining the account under section 401(h) of the Internal Revenue Code of 1986, \n \n “(B)  the request sets forth a method under which the amount of contributions to the account are to be determined on the basis of cost, \n \n “(C)  such method is permissible under section 401(h) of such Code under the provisions of General Counsel Memorandum 39785, and \n \n “(D)  the Internal Revenue Service issued before  October 4, 1989 , a private letter ruling, determination letter, or other letter providing that the specific plan involved qualifies under section 401(a) of such Code when such method is used, that contributions to the account are deductible, or acknowledging that the account would not adversely affect the qualified status of the plan (contingent on all phases of the particular plan being approved).”\nAmendment by sections 7811(g)(1), (h)(3) and 7816( l ) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 101–239, title VII, §\u202f7882 ,  Dec. 19, 1989 ,  103 Stat. 2445 , provided that:  “Except as otherwise provided in this subpart [subpart C (§§\u202f7881, 7882) of part V of title VII of  Pub. L. 101–239 , amending this section and sections 411 and 412 of this title, and sections 1002, 1021, 1023, 1054, 1082, 1083, 1085b, 1103, 1107, 1108, 1113, 1132, 1306, 1322, 1341, 1342, 1344, 1362, 1364, 1368, 1370, and 1371 of Title 29, Labor, enacting provisions set out as a note under  section 1054 of Title 29 , and amending provisions set out as notes under sections 404 and 412 of this title and sections 1021, 1301, 1322, and 1344 of Title 29], any amendment made by this subpart shall take effect as if included in the provision of the Pension Protection Act [ Pub. L. 100–203, title IX , subtitle D, part II, §§\u202f9302–9346] to which such amendment relates.”\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nPub. L. 100–647, title I, §\u202f1011(c)(7)(E) ,  Nov. 10, 1988 ,  102 Stat. 3458 , provided that: \n “(i)  Except as provided in clause (ii), the amendments made by this paragraph [amending this section and sections 403, 408, and 501 of this title] shall apply to plan years beginning after  December 31, 1987 . \n \n “(ii)  In the case of a plan described in section 1105(c)(2) of the Reform Act [ section 1105(c)(2) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 402 of this title ], the amendments made by this paragraph shall not apply to contributions made pursuant to an agreement described in such section for plan years beginning before the earlier of— “(I)  the later of  January 1, 1988 , or the date on which the last of such agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n “(II)   January 1, 1989 .”\nPub. L. 100–647, title I, §\u202f1011(k)(1)(C) ,  Nov. 10, 1988 ,  102 Stat. 3469 , provided that: \n “(i)  Subparagraph (A)(i) of section 401(k)(10) of the 1986 Code (as added by subparagraph (B)) shall apply to distributions after  October 16, 1987 . \n \n “(ii)  Subparagraph (B) of section 401(k)(10) of the 1986 Code (as added by subparagraph (B)) shall apply to distributions after  March 31, 1988 .”\nPub. L. 100–647, title I, §\u202f1011 ( l )(5)(B),  Nov. 10, 1988 ,  102 Stat. 3470 , provided that:  “The amendment made by this paragraph [amending this section] shall take effect as if included in the amendments made by section 1120 of the Reform Act [ Pub. L. 99–514 ].”\nAmendment by sections 1011(d)(4), (e)(3), (g)(1)–(3), (h)(3), (k)(1)(A), (B), (2)–(7), (9), ( l )(1)–(4), (6), (7), 1011A(j), ( l ), and 1011B(j)(1), (2), (6), (k)(1), (2) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6053(b) ,  Nov. 10, 1988 ,  102 Stat. 3696 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect as if included in the amendments made by section 1121 of the Reform Act [ Pub. L. 99–514 ].”\nPub. L. 100–647, title VI, §\u202f6055(b) ,  Nov. 10, 1988 ,  102 Stat. 3697 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by section 1112(b) of the Reform Act [ Pub. L. 99–514 ].”\nPub. L. 100–647, title VI, §\u202f6071(d) ,  Nov. 10, 1988 ,  102 Stat. 3705 , provided that:  “The amendments made by this section [amending this section and  section 457 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 100–203, title IX, §\u202f9341(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–371 , as amended by  Pub. L. 101–239, title VII, §\u202f7881(i)(5) ,  Dec. 19, 1989 ,  103 Stat. 2442 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [enacting  section 1085b of Title 29 , Labor, and amending this section] shall apply to plan amendments adopted after the date of the enactment of this Act [ Dec. 22, 1987 ]. \n \n “(2)   Collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of the enactment of this Act, the amendments made by this section shall not apply to plan amendments adopted pursuant to collective bargaining agreements ratified before the date of enactment (without regard to any extension, amendment, or modification of such agreements on or after such date of enactment).”\nAmendment by  section 1106(d)(1) of Pub. L. 99–514  applicable to benefits accruing in years beginning after  Dec. 31, 1988 , except as otherwise provided, see  section 1106(i)(5) of Pub. L. 99–514 , set out as a note under  section 415 of this title .\nPub. L. 99–514, title XI, §\u202f1111(c) ,  Oct. 22, 1986 ,  100 Stat. 2440 , as amended by  Pub. L. 100–647, title I, §\u202f1011(g)(4) ,  Nov. 10, 1988 ,  102 Stat. 3464 , provided that: \n “(1)   Subsection  (a).— The amendments made by subsection (a) [amending this section] shall apply to benefits attributable to plan years beginning after  December 31, 1988 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall apply to years beginning after  December 31, 1988 . \n \n “(3)   Special rule for collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to plan years beginning before the earlier of— “(A)  the later of— “(i)   January 1, 1989 , or \n \n “(ii)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n \n “(B)   January 1, 1991 .”\nPub. L. 99–514, title XI, §\u202f1112(e) ,  Oct. 22, 1986 ,  100 Stat. 2445 , as amended by  Pub. L. 100–647, title I, §\u202f1011(h)(6) –(9),  Nov. 10, 1988 ,  102 Stat. 3465 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 402, 404, 406, 407, 410, and 818 of this title] shall apply to plan years beginning after  December 31, 1988 . \n \n “(2)   Special rule for collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to plan years beginning before the earlier of— “(A)  the later of— “(i)   January 1, 1989 , or \n \n “(ii)  the date on which the last of such collective bargaining agreement terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n \n “(B)   January 1, 1991 . \n \n \n “(3)   Waiver of excise tax on reversions.— “(A)   In general .— If— “(i)  a plan is in existence on  August 16, 1986 , \n \n “(ii)  such plan would fail to meet the requirements of section 401(a)(26) of the Internal Revenue Code of 1986 (as added by subsection (b)) if such section were in effect for the plan year including  August 16, 1986 , and \n \n “(iii)  there is no transfer of assets to or liabilities from the plan or spinoff or merger involving such plan after  August 16, 1986 , \n \n\n then no tax shall be imposed under section 4980 of such Code on any employer reversion by reason of the termination or merger of such plan before the 1st year to which the amendment made by subsection (b) applies. \n \n “(B)   Interest rate for determining accrued benefit of highly compensated employees for certain purposes .— In the case of a termination, transfer, or distribution of assets of a plan described in subparagraph (A)(ii) before the 1st year to which the amendment made by subsection (b) applies— “(i)   Amount eligible for rollover, income averaging, or tax-free transfer .— For purposes of determining any eligible amount, the present value of the accrued benefit of any highly compensated employee shall be determined by using an interest rate not less than the highest of— “(I)  the applicable rate under the plan’s method in effect under the plan on  August 16, 1986 , \n \n “(II)  the highest rate (as of the date of the termination, transfer, or distribution) determined under any of the methods applicable under the plan at any time after  August 15, 1986 , and before the termination, transfer, or distribution in calculating the present value of the accrued benefit of an employee who is not a highly compensated employee under the plan (or any other plan used in determining whether the plan meets the requirements of section 401 of the Internal Revenue Code of 1986), or \n \n “(III)  5 percent. \n \n \n “(ii)   Eligible amount .— For purposes of clause (i), the term ‘eligible amount’ means any amount with respect to a highly compensated employee which— “(I)  may be rolled over under section 402(a)(5) of such Code, \n \n “(II)  is eligible for income averaging under section 402(e)(1) of such Code, or capital gains treatment under section 402(a)(2) or 403(a)(2) of such Code (as in effect before this Act), or \n \n “(III)  may be transferred to another plan without inclusion in gross income. \n \n \n “(iii)   Amounts subject to early withdrawal or excess distribution tax .— For purposes of sections 72(t) and 4980A of such Code, there shall not be taken into account the excess (if any) of— “(I)  the amount distributed to a highly compensated employee by reason of such termination or distribution, over \n \n “(II)  the amount determined by using the interest rate applicable under clause (i). \n \n \n “(iv)   Distributions of annuity contracts .— If an annuity contract purchased after  August 16, 1986 , is distributed to a highly compensated employee in connection with such termination or distribution, there shall be included in gross income for the taxable year of such distribution an amount equal to the excess of— “(I)  the purchase price of such contract, over \n \n “(II)  the present value of the benefits payable under such contract determined by using the interest rate applicable under clause (i). \n \n\n \u2001\u2001Such excess shall not be taken into account for purposes of sections 72(t) and 4980A of such Code. \n \n “(v)   Highly compensated employee .— For purposes of this subparagraph, the term ‘highly compensated employee’ has the meaning given such term by section 414(q) of such Code. \n \n \n \n “(4)   Special rule for plans which may not terminate .— To the extent provided in regulations prescribed by the Secretary of the Treasury or his delegate, if a plan is prohibited from terminating under title IV of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1301  et seq.] before the 1st year to which the amendment made by subsection (b) would apply, the amendment made by subsection (b) shall only apply to years after the 1st year in which the plan is able to terminate.”\nAmendment by  section 1114(b)(7) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , see  section 1114(c)(3) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nPub. L. 99–514, title XI, §\u202f1116(f) ,  Oct. 22, 1986 ,  100 Stat. 2457 , as amended by  Pub. L. 100–647, title I, §\u202f1011(k)(8) , (10),  Nov. 10, 1988 ,  102 Stat. 3470 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to years beginning after  December 31, 1988 . \n \n “(2)   Nondiscrimination rules.— “(A)   In general .— Except as provided in subparagraph (B), the amendments made by subsections (a), (b)(4), and (d) [amending this section], and the provisions of section 401(k)(4)(B) of the Internal Revenue Code of 1986 (as added by this section), shall apply to years beginning after  December 31, 1986 . \n \n “(B)   Transition rules for certain governmental and tax-exempt plans .— Subparagraph (B) of section 401(k)(4) of the Internal Revenue Code of 1986 (relating to governments and tax-exempt organizations not eligible for cash or deferred arrangements), as added by this section, shall not apply to any cash or deferred arrangement adopted by— “(i)  a State or local government or political subdivision thereof, or any agency or instrumentality thereof, before  May 6, 1986 , or \n \n “(ii)  a tax-exempt organization before  July 2, 1986 . \n \n\n In the case of an arrangement described in clause (i), the amendments made by subsections (a), (b)(4), and (d) shall apply to years beginning after  December 31, 1988 . If clause (i) or (ii) applies to any arrangement adopted by a governmental unit, then any cash or deferred arrangement adopted by such unit on or after the date referred to in the applicable clause shall be treated as adopted before such date. \n \n \n “(3)   Aggregation and excess contributions .— The amendments made by subsections (c) and (e) [amending this section] shall apply to years beginning after  December 31, 1986 . \n \n “(4)   Collective bargaining agreements.— “(A)   In general .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to years beginning before the earlier of— “(i)  the later of— “(I)   January 1, 1989 , or \n \n “(II)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n \n “(ii)   January 1, 1991 . \n \n \n “(B)   Special rule for nondiscrimination rules .— In the case of a plan described in subparagraph (A), the amendments and provisions described in paragraph (2) shall not apply to years beginning before the earlier of— “(i)  the date determined under subparagraph (A)(i)(II), or \n \n “(ii)   January 1, 1989 . \n \n \n \n “(5)   Special rule for qualified offset arrangements.— “(A)   In general .— A cash or deferred arrangement shall not be treated as failing to meet the requirements of section 401(k)(4) of the Internal Revenue Code of 1986 (as added by this section) to the extent such arrangement is part of a qualified offset arrangement consisting of such cash or deferred arrangement and a defined benefit plan. \n \n “(B)   Qualified offset arrangement .— For purposes of subparagraph (A), a cash or deferred arrangement is part of a qualified offset arrangement with a defined benefit plan to the extent such offset arrangement satisfies each of the following conditions with respect to the employer maintaining the arrangement on  April 16, 1986 , and at all times thereafter: “(i)  The benefit under the defined benefit plan is directly and uniformly conditioned on the initial elective deferrals (up to 4 percent of compensation). \n \n “(ii)  The benefit provided under the defined benefit plan (before the offset) is at least 60 percent of an employee’s cumulative elective deferrals (up to 4 percent of compensation). \n \n “(iii)  The benefit under the defined benefit plan is reduced by the benefit attributable to the employee’s elective deferrals under the plan (up to 4 percent of compensation) and the income allocable thereto. The interest rate used to calculate the reduction shall not exceed the greater of the rate under section 411(a)(11)(B)(ii) of such Code or the interest rate applicable under section 411(c)(2)(C)(iii) of such Code, taking into account section 411(c)(2)(D) of such Code. \n \n\n For purposes of applying section 401(k)(3) of such Code to the cash or deferred arrangement, the benefits under the defined benefit plan conditioned on initial elective deferrals may be treated as matching contributions under such rules as the Secretary of the Treasury or his delegate may prescribe. The Secretary shall provide rules for the application of this paragraph in the case of successor plans. \n \n “(C)   Definition of employer .— For purposes of this paragraph, the term ‘employer’ includes any research and development center which is federally funded and engaged in cancer research, but only with respect to employees of contractor-operators whose salaries are reimbursed as direct costs against the operator’s contract to perform work at such center. \n \n \n “(6)   Withdrawals on sale of assets .— Subclauses (II), (III), and (IV) of section 401(k)(2)(B)(i) of the Internal Revenue Code of 1986 (as added by subsection (b)(1)) shall apply to distributions after  December 31, 1984 . \n \n “(7)   Distributions before plan amendment.— “(A)   In general .— If a plan amendment is required to allow a plan to make any distribution described in section 401(k)(8) of the Internal Revenue Code of 1986, any such distribution which is made before the close of the 1st plan year for which such amendment is required to be in effect under section 1140 [set out as a note below], shall be treated as made in accordance with the provisions of such plan. \n \n “(B)   Distributions pursuant to model amendment.— “(i)   Secretary to prescribe amendment .— The Secretary of the Treasury or his delegate shall prescribe an amendment which allows a plan to make any distribution described in section 401(k)(8) of such Code. \n \n “(ii)   Adoption by plan .— If a plan adopts the amendment prescribed under clause (i) and makes a distribution in accordance with such amendment, such distribution shall be treated as made in accordance with the provisions of the plan.”\nPub. L. 99–514, title XI, §\u202f1117(d) ,  Oct. 22, 1986 ,  100 Stat. 2462 , as amended by  Pub. L. 100–647, title I, §\u202f1011 ( l )(12),  Nov. 10, 1988 ,  102 Stat. 3471 , provided that: \n “(1)   In general .— The amendments made by this section [enacting  section 4979 of this title  and amending this section and  section 414 of this title ] shall apply to plan years beginning after  December 31, 1986 . \n \n “(2)   Collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to plan years beginning before the earlier of— “(A)   January 1, 1989 , or \n \n “(B)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ). \n \n \n “(3)   Annuity contracts .— In the case of an annuity contract under section 403(b) of the Internal Revenue Code of 1986— “(A)  the amendments made by this section shall apply to plan years beginning after  December 31, 1988 , and \n \n “(B)  in the case of a collective bargaining agreement described in paragraph (2), the amendments made by this section shall not apply to years beginning before the earlier of— “(i)  the later of— “(I)   January 1, 1989 , or \n \n “(II)  the date determined under paragraph (2)(B), or \n \n \n “(ii)   January 1, 1991 . \n \n \n \n “(4)   Distributions before plan amendment.— “(A)   In general .— If a plan amendment is required to allow a plan to make any distribution described in section 401(m)(6) of the Internal Revenue Code of 1986, any such distribution which is made before the close of the 1st plan year for which such amendment is required to be in effect under section 1140 [set out as a note below] shall be treated as made in accordance with the provisions of the plan. \n \n “(B)   Distributions pursuant to model amendment.— “(i)   Secretary to prescribe amendment .— The Secretary of the Treasury or his delegate shall prescribe an amendment which allows a plan to make any distribution described in section 401(m)(6) of the Internal Revenue Code of 1986. \n \n “(ii)   Adoption by plan .— If a plan adopts the amendment prescribed under clause (i) and makes a distribution in accordance with such amendment, such distribution shall be treated as made in accordance with the provisions of the plan.”\nPub. L. 99–514, title XI, §\u202f1119(b) ,  Oct. 22, 1986 ,  100 Stat. 2463 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to plan years beginning after  December 31, 1985 .”\nPub. L. 99–514, title XI, §\u202f1121(d) ,  Oct. 22, 1986 ,  100 Stat. 2465 , as amended by  Pub. L. 100–647, title I, §\u202f1011A(a)(3) , (4),  Nov. 10, 1988 ,  102 Stat. 3472 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 402, 408, and 4974 of this title] shall apply to years beginning after  December 31, 1988 . \n \n “(2)   Subsection  (c).— The amendments made by subsection (c) [amending sections 402 and 408 of this title] shall apply to years beginning after  December 31, 1986 . \n \n “(3)   Collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to distributions to individuals covered by such agreements in years beginning before the earlier of— “(A)  the later of— “(i)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n “(ii)   January 1, 1989 , or \n \n \n “(B)   January 1, 1991 . \n \n \n “(4)   Transition rules.— “(A)  The amendments made by subsections (a) and (b) [amending this section and  section 4974 of this title ] shall not apply with respect to any benefits with respect to which a designation is in effect under section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 242(b)(2) of Pub. L. 97–248 , formerly set out as a note below]. \n \n “(B) (i)  Except as provided in clause (ii), the amendment made by subsection (b) [amending this section] shall not apply in the case of any individual who has attained age 70½ before  January 1, 1988 . \n \n “(ii)  Clause (i) shall not apply to any individual who is a 5-percent owner (as defined in section 416(i) of the Internal Revenue Code of 1986), at any time during— “(I)  the plan year ending with or within the calendar year in which such owner attains age 66½, and \n \n “(II)  any subsequent plan year. \n \n \n \n \n “(5)   Plans may incorporate section 401 (a) (9) requirements by reference .— Notwithstanding any other provision of law, except as provided in regulations prescribed by the Secretary of the Treasury or his delegate, a plan may incorporate by reference the requirements of section 401(a)(9) of the Internal Revenue Code of 1986.”\nPub. L. 99–514, title XI, §\u202f1136(c) ,  Oct. 22, 1986 ,  100 Stat. 2486 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1985 .”\nPub. L. 99–514, title XI, §\u202f1143(b) ,  Oct. 22, 1986 ,  100 Stat. 2490 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title XI, §\u202f1145(d) ,  Oct. 22, 1986 ,  100 Stat. 2491 , provided that:  “The amendments made by this section [amending this section,  section 1055 of Title 29 , Labor, and provisions set out as a note under  section 1001 of Title 29 ] shall apply as if included in the amendments made by the Retirement Equity Act of 1984 [ Pub. L. 98–397 ].”\nAmendment by  section 1171(b)(5) of Pub. L. 99–514  applicable to compensation paid or accrued after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 1171(c) of Pub. L. 99–514 , set out as a note under  section 38 of this title .\nPub. L. 99–514, title XI, §\u202f1174(c)(2)(B) ,  Oct. 22, 1986 ,  100 Stat. 2518 , provided that:  “The amendment made by this paragraph [amending this section] shall apply to distributions attributable to stock acquired after  December 31, 1986 .”\nPub. L. 99–514, title XI, §\u202f1175(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2519 , provided that:  “The amendment made by this subsection [amending this section] shall apply to stock acquired after  December 31, 1986 .”\nPub. L. 99–514, title XI, §\u202f1176(c) ,  Oct. 22, 1986 ,  100 Stat. 2520 , provided that:  “The amendment made by subsection (a) [amending this section] shall be effective  December 31, 1986 . The amendment made by subsection (b) [amending  section 409 of this title ] shall apply to acquisitions of securities after  December 31, 1986 .”\nPub. L. 99–514, title XVIII, §\u202f1852(h)(1) ,  Oct. 22, 1986 ,  100 Stat. 2869 , as amended by  Pub. L. 100–647, title I, §\u202f1018(t)(3)(C) ,  Nov. 10, 1988 ,  102 Stat. 3588 , provided that the amendment made by that section is effective for years beginning after  Dec. 31, 1985 .\nPub. L. 99–514, title XVIII, §\u202f1879(g)(3) ,  Oct. 22, 1986 ,  100 Stat. 2907 , provided that:  “The amendments made by this subsection [amending this section] shall apply to plan years beginning after  December 31, 1984 .”\nAmendment by sections 1848(b) and 1852(a)(4)(A), (6), (b)(8), (g), (h)(1) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1898(j) ,  Oct. 22, 1986 ,  100 Stat. 2957 , provided that:  “Except as otherwise provided in this section, any amendment made by this section [amending this section, sections 402, 411, 414, 415, 417, and 2503 of this title, and sections 1053 to 1056 of Title 29, Labor, and provisions set out as notes under  section 1001 of Title 29 ] shall take effect as if included in the provision of the Retirement Equity Act of 1984 [ Pub. L. 98–397 ] to which such amendment relates.”\nAmendment by  section 203(a) of Pub. L. 98–397  applicable to plan years beginning after  Dec. 31, 1984 , amendment by  section 204(a) of Pub. L. 98–397  effective  Jan. 1, 1985 , and amendment by  section 301(b) of Pub. L. 98–397  applicable to plan amendments made after  July 30, 1984 , but not applicable to the termination of a certain defined benefit plan, except as otherwise provided, see sections 302 and 303 of  Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 , Labor.\nNothing in amendment by  section 203(a) of Pub. L. 98–397  to prevent any distribution required by reason of a failure to comply with the terms of a loan made on or before  Aug. 18, 1985 , and secured by a portion of the participant’s accrued benefit, see  section 1898(b)(4)(C)(ii) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 417 of this title .\nAmendment by  section 211(b)(5) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 474(r)(13) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f491(f)(3) ,  July 18, 1984 ,  98 Stat. 853 , provided that:  “The amendments made by subsection (e) [redesignating section 409A as  section 409 of this title  and amending this section and sections 41, 415, 4975, and 6699 of this title] shall take effect on  January 1, 1984 .”\nPub. L. 98–369, div. A, title V, §\u202f521(e) ,  July 18, 1984 ,  98 Stat. 868 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 72, 403, and 408 of this title and repealing provisions set out as a note under this section] shall apply to years beginning after  December 31, 1984 . \n \n “(2)   Repeal of section 242 of tefra .— The amendment made by subsection (a)(2) [repealing  section 242 of Pub. L. 97–248 , which amended this section and enacted provisions formerly set out below] shall take effect as if included in the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ]. \n \n “(3)   Transition rule .— A trust forming part of a plan shall not be disqualified under paragraph (9) of section 401(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by subsection (a)(1), by reason of distributions under a designation (before  January 1, 1984 ) by any employee in accordance with a designation described in section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 (as in efffect [sic] before the amendments made by this Act) [formerly set out as an Effective Date of 1982 Amendment note below]. \n \n “(4)   Special rule for governmental plans .— In the case of a governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of 1986), paragraph (1) shall be applied by substituting ‘1986’ for ‘1984’. \n \n “(5)   Special rule for collective bargaining agreements .— In the case of a plan maintained pursuant to one or more collective bargaining agreements ratified on or before the date of the enactment of this Act [ July 18, 1984 ] between employee representatives and one or more employers, the amendments made by this section shall not apply to years beginning before the earlier of— “(A)  the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or \n \n “(B)   January 1, 1988 . \n \n\n For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement.”\nPub. L. 98–369, div. A, title V, §\u202f524(d)(2) ,  July 18, 1984 ,  98 Stat. 872 , provided that:  “The amendment made by this subsection [amending this section] shall apply to plan years beginning after  December 31, 1983 .”\nPub. L. 98–369, div. A, title V, §\u202f527(c) ,  July 18, 1984 ,  98 Stat. 876 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Subsection  (a).— “(A)   In general .— Except as provided in subparagraph (B), the amendment made by subsection (a) [amending this section] shall apply to plan years beginning after  December 31, 1984 . \n \n “(B)   Exception for certain existing plans .— The amendment made by subsection (a) shall not apply to any plan— “(i)  which was maintained by a State on  June 8, 1984 , and \n \n “(ii)  with respect to which a determination letter had been issued by the Secretary on  December 6, 1982 . \n \n \n \n “(2)   Subsection  (b).— “(A)   In general .— The amendments made by this section [amending this section] shall apply with respect to plan years beginning after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(B)   Transitional rule .— Rules similar to the rules under section 135(c)(2) of the Revenue Act of 1978 [ section 135(c)(2) of Pub. L. 95–600 , set out below] shall apply with respect to any pre-ERISA money purchase plan (as defined in section 401(k)(5) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) for plan years beginning after  December 31, 1979 , and on or before the date of the enactment of this Act.”\nPub. L. 98–369, div. A, title V, §\u202f528(c) ,  July 18, 1984 ,  98 Stat. 877 , provided that:  “The amendments made by this section [amending this section and  section 415 of this title ] shall apply to years beginning after  March 31, 1984 .”\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 124(d)(2) of Pub. L. 98–21 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title II, §\u202f242(b) ,  Sept. 3, 1982 ,  96 Stat. 521 , which prescribed the effective date for amendment by  section 242(a) of Pub. L. 97–248 , was repealed by  Pub. L. 98–369, div. A, title V, §\u202f521(a)(2) ,  July 18, 1984 ,  98 Stat. 867 .\nPub. L. 97–248, title II, §\u202f249(b) ,  Sept. 3, 1982 ,  96 Stat. 528 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 1983 .”\nPub. L. 97–248, title II, §\u202f254(b) ,  Sept. 3, 1982 ,  96 Stat. 533 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1981 .”\nAmendment by sections 237, 238, and 240 of  Pub. L. 97–248  applicable to years beginning after  Dec. 31, 1983 , see  section 241 of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title .\nAmendment by section 312(b)(1), (c)(2)–(4), (e)(2) of  Pub. L. 97–34  applicable to plans which include employees within the meaning of subsec. (c)(1) of this section with respect to taxable years beginning after  Dec. 31, 1981 , see  section 312(f)(1) of Pub. L. 97–34 , set out as a note under  section 72 of this title .\nPub. L. 97–34, title III, §\u202f314(a)(2) ,  Aug. 13, 1981 ,  95 Stat. 286 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to distributions after  December 31, 1980 , in taxable years beginning after such date.”\nPub. L. 97–34, title III, §\u202f338(b) ,  Aug. 13, 1981 ,  95 Stat. 298 , provided that:  “The amendment made by this section [amending this section] shall apply to acquisitions of securities after  December 31, 1979 .”\nPub. L. 97–34, title III, §\u202f339 ,  Aug. 13, 1981 ,  95 Stat. 299 , provided that:  “Except as otherwise provided, the amendments made by this subtitle [subtitle D (§§\u202f331–339) of title III of  Pub. L. 97–34 , enacting  section 44G of this title  and amending this section and sections 46, 48, 55, 56, 381, 383, 404, 409A, 415, 6096, 6411, 6511, and 6699 of this title] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 96–605, title II, §\u202f221(b) ,  Dec. 28, 1980 ,  94 Stat. 3528 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to plan years beginning after  December 31, 1980 .”\nPub. L. 96–605, title II, §\u202f225(c) ,  Dec. 28, 1980 ,  94 Stat. 3529 , provided that:  “The amendments made by this section [amending this section and sections 408 and 410 of this title] shall apply with respect to plan years beginning after  December 31, 1980 .”\nPub. L. 96–364, title IV, §\u202f410(c) ,  Sept. 26, 1980 ,  94 Stat. 1308 , provided that:  “The amendment made by this section [amending this section and  section 1103 of Title 29 , Labor] shall take effect on  January 1, 1975 , except that in the case of contributions received by a collectively bargained plan maintained by more than one employer before the date of enactment of this Act [ Sept. 26, 1980 ], any determination by the plan administrator that any such contribution was made by mistake of fact or law before such date shall be deemed to have been made on such date of enactment.”\nAmendment by section 208(a), (e) of  Pub. L. 96–364  effective  Sept. 26, 1980 , see  section 210(a) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f135(c)(1) ,  Nov. 6, 1978 ,  92 Stat. 2787 , provided that:  “The amendments made by this section [amending this section and  section 402 of this title ] shall apply to plan years beginning after  December 31, 1979 .”\nAmendment by  section 141(f)(3) of Pub. L. 95–600  effective with respect to qualified investment for taxable years beginning after  Dec. 31, 1978 , see  section 141(g)(1) of Pub. L. 95–600 , set out as an Effective Date note under  section 409 of this title .\nPub. L. 95–600, title I, §\u202f143(b) ,  Nov. 6, 1978 ,  92 Stat. 2796 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to acquisitions of securities after  December 31, 1979 .”\nAmendment by  section 152(e) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 152(h) of Pub. L. 95–600 , set out as a note under  section 408 of this title .\nAmendment by  section 803(b)(2) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1974 , see  section 803(j) of Pub. L. 94–455 , set out as a note under  section 46 of this title .\nPub. L. 94–455, title XV, §\u202f1505(c) ,  Oct. 4, 1976 ,  90 Stat. 1739 , provided that:  “The amendments made by this section [amending this section and  section 801 of this title ] apply for taxable years beginning after  December 31, 1975 .”\nAmendment by  section 1901(a)(56) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–267, §\u202f1(e) ,  Apr. 15, 1976 ,  90 Stat. 369 , provided that:  “The amendments made by this Act [amending this section and sections 402 to 404 and 805 of this title, and enacting provisions set out as a note under  section 402 of this title ] shall apply with respect to payments made to an employee on or after  July 4, 1974 .”\nAmendment by sections 1012(b) and 1016(a)(2) of  Pub. L. 93–406  applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , but, in the case of plans in existence on  Jan. 1, 1974 , amendment by sections 1012(b) and 196(a)(2) of  Pub. L. 93–406  applicable for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nPub. L. 93–406, title II, §\u202f1021(a)(1) , (b),  Sept. 2, 1974 ,  88 Stat. 935 , 937, provided that the amendment made by that section is effective with respect to plan years beginning after  Dec. 31, 1975 .\nPub. L. 93–406, title II, §\u202f1022(d) ,  Sept. 2, 1974 ,  88 Stat. 939 , provided that the amendment made by that section is effective as of  Jan. 1, 1974 .\nPub. L. 93–406, title II, §\u202f1022(f) ,  Sept. 2, 1974 ,  88 Stat. 940 , provided that the amendment made by that section is effective as of  Jan. 1, 1974 .\nPub. L. 93–406, title II, §\u202f1024 ,  Sept. 2, 1974 ,  88 Stat. 943 , provided that:  “Except as otherwise provided in section 1021, the amendments made by section 1021 [amending this section] shall apply to plan years to which part I applies. [For description of plan years to which part I applies, see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .] Except as otherwise provided in section 1022, the amendments made by section 1022 [amending this section and  section 6051 of this title ] shall apply to plan years to which part I applies. Section 1023 [amending this section] shall take effect on the date of the enactment of this Act [ Sept. 2, 1974 ].”\nPub. L. 93–406, title II, §\u202f2001(i)(2) –(4),  Sept. 2, 1974 ,  88 Stat. 958 , provided that: \n “(2)  The amendments made by subsection (c) [amending this section] apply to “(A)  taxable years beginning after  December 31, 1975 , and \n \n “(B)  any other taxable years beginning after  December 31, 1973 , for which contributions were made under the plan in excess of the amounts permitted to be made under sections 404(e) and 1379(b) [of this title] as in effect on the day before the date of the enactment of this Act [ Sept. 2, 1974 ]. \n \n \n “(3)  The amendments made by subsection (d) [amending this section] apply to taxable years beginning after  December 31, 1975 . \n \n “(4)  The amendments made by subsections (e) and (f) [enacting  section 4972 of this title  and amending this section and  section 72 of this title ] apply to contributions made in taxable years beginning after  December 31, 1975 .”\nAmendment by  section 2001(h)(1) of Pub. L. 93–406  applicable to taxable years ending after  Sept. 2, 1974 , see  section 2001(i)(6) of Pub. L. 93–406 , set out as a note under  section 72 of this title .\nAmendment by  section 2004(a)(1) of Pub. L. 93–406  applicable to years beginning after  Dec. 31, 1975 , see  section 2004(d) of Pub. L. 93–406 , set out as an Effective Date; Transitional Provisions note under  section 415 of this title .\nPub. L. 91–691, §\u202f1(b) ,  Jan. 12, 1971 ,  84 Stat. 2074 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 , but only with respect to contributions made after  December 31, 1954 .”\nPub. L. 89–809, title II, §\u202f204(d) ,  Nov. 13, 1966 ,  80 Stat. 1578 , as amended by  Pub. L. 90–607 ,  Oct. 21, 1968 ,  82 Stat. 1189 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 404 of this title ] shall apply with respect to taxable years beginning after  December 31, 1967 . The amendment made by subsection (c) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1967 , and in the case of a taxpayer who applies the averaging provisions of section 401(e)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for a taxable year beginning after  December 31, 1967 , the computation of the amount deductible under section 404 of such Code for any prior taxable year which began before  January 1, 1968 , shall be made, for purposes of such averaging provisions, as if the amendment made by subsection (c) were applicable to such prior taxable year.”\nPub. L. 89–809, title II, §\u202f205(b) ,  Nov. 13, 1966 ,  80 Stat. 1578 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Nov. 13, 1966 ].”\nAmendment by  Pub. L. 89–97  applicable to taxable years beginning after  Dec. 31, 1966 , see  section 106(e) of Pub. L. 89–97 , set out as a note under  section 213 of this title .\nPub. L. 88–272, title II, §\u202f219(b) ,  Feb. 26, 1964 ,  78 Stat. 58 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 , but only with respect to contributions made after  December 31, 1954 .”\nPub. L. 87–863, §\u202f2(c) ,  Oct. 23, 1962 ,  76 Stat. 1142 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 404 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 23, 1962 ].”\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nPub. L. 87–792, §\u202f1 ,  Oct. 10, 1962 ,  76 Stat. 809 , provided:  “That this Act [enacting sections 405 and 6047 of this title and amending this section and sections 37, 62, 72, 101, 104, 105, 172, 402 to 404, 503, 805, 1361, 2039, 2517, 3306, 3401, and 7207 of this title] may be cited as the ‘Self-Employed Individuals Tax Retirement Act of 1962’.”\nPub. L. 117–328, div. T, title I, §\u202f110(g) ,  Dec. 29, 2022 ,  136 Stat. 5293 , provided that:  \n “The Secretary of the Treasury (or such Secretary’s delegate) shall prescribe regulations for purposes of implementing the amendments made by this section, including regulations— \n “(1)  permitting a plan to make matching contributions for qualified student loan payments, as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 1986, as added by this section, at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually; \n \n “(2)  permitting employers to establish reasonable procedures to claim matching contributions for such qualified student loan payments under the plan, including an annual deadline (not earlier than 3 months after the close of each plan year) by which a claim must be made; and \n \n “(3)  promulgating model amendments which plans may adopt to implement matching contributions on such qualified student loan payments for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986.”\nPub. L. 117–328, div. T, title II, §\u202f202 ,  Dec. 29, 2022 ,  136 Stat. 5331 , provided that: \n “(a)   In General .— Not later than the date which is 18 months after the date of the enactment of this Act [ Dec. 29, 2022 ], the Secretary of the Treasury (or the Secretary’s delegate) shall amend the regulation issued by the Department of the Treasury relating to ‘Longevity Annuity Contracts’ (79 Fed. Reg. 37633 ( July 2, 2014 )), as follows: “(1)   Repeal 25-percent premium limit .— The Secretary (or delegate) shall amend Q&A–17(b)(3) of Treas. Reg. section 1.401(a)(9)–6 and Q&A–12(b)(3) of Treas. Reg. section 1.408–8 to eliminate the requirement that premiums for qualifying longevity annuity contracts be limited to 25 percent of an individual’s account balance, and to make such corresponding changes to the regulations and related forms as are necessary to reflect the elimination of this requirement. \n \n “(2)   Increase dollar limitation.— “(A)   In general .— The Secretary (or delegate) shall amend Q&A–17(b)(2)(i) of Treas. Reg. section 1.401(a)(9)–6 and Q&A–12(b)(2)(i) of Treas. Reg. section 1.408–8 to increase the dollar limitation on premiums for qualifying longevity annuity contracts from $125,000 to $200,000, and to make such corresponding changes to the regulations and related forms as are necessary to reflect this increase in the dollar limitation. \n \n “(B)   Adjustments for inflation .— The Secretary (or delegate) shall amend Q&A–17(d)(2)(i) of Treas. Reg. section 1.401(a)(9)–6 to provide that, in the case of calendar years beginning on or after January 1 of the second year following the year of enactment of this Act [div. T of  Pub. L. 117–328 , enacted in 2022], the $200,000 dollar limitation (as increased by subparagraph (A)) will be adjusted at the same time and in the same manner as the limits are adjusted under section 415(d) of the Internal Revenue Code of 1986, except that the base period shall be the calendar quarter beginning July 1 of the year of enactment of this Act, and any increase to such dollar limitation which is not a multiple of $10,000 will be rounded to the next lowest multiple of $10,000. \n \n \n “(3)   Facilitate joint and survivor benefits .— The Secretary (or delegate) shall amend Q&A–17(c) of Treas. Reg. section 1.401(a)(9)–6, and make such corresponding changes to the regulations and related forms as are necessary, to provide that, in the case of a qualifying longevity annuity contract which was purchased with joint and survivor annuity benefits for the individual and the individual’s spouse which were permissible under the regulations at the time the contract was originally purchased, a divorce occurring after the original purchase and before the annuity payments commence under the contract will not affect the permissibility of the joint and survivor annuity benefits or other benefits under the contract, or require any adjustment to the amount or duration of benefits payable under the contract, provided that any qualified domestic relations order (within the meaning of section 414(p) of the Internal Revenue Code of 1986) or, in the case of an arrangement not subject to section 414(p) of such Code or section 206(d) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1056(d) ], any divorce or separation instrument (as defined in subsection (b))— “(A)  provides that the former spouse is entitled to the survivor benefits under the contract; \n \n “(B)  provides that the former spouse is treated as a surviving spouse for purposes of the contract; \n \n “(C)  does not modify the treatment of the former spouse as the beneficiary under the contract who is entitled to the survivor benefits; or \n \n “(D)  does not modify the treatment of the former spouse as the measuring life for the survivor benefits under the contract. \n \n \n “(4)   Permit short free look period .— The Secretary (or delegate) shall amend Q&A–17(a)(4) of Treas. Reg. section 1.401(a)(9)–6 to ensure that such Q&A does not preclude a contract from including a provision under which an employee may rescind the purchase of the contract within a period not exceeding 90 days from the date of purchase. \n \n \n “(b)   Divorce or Separation Instrument .— For purposes of subsection (a)(3), the term ‘divorce or separation instrument’ means— “(1)  a decree of divorce or separate maintenance or a written instrument incident to such a decree; \n \n “(2)  a written separation agreement; or \n \n “(3)  a decree (not described in paragraph (1)) requiring a spouse to make payments for the support or maintenance of the other spouse. \n \n \n “(c)   Effective Dates, Enforcement, and Interpretations.— “(1)   Effective dates.— “(A)  Paragraphs (1) and (2) of subsection (a) shall be effective with respect to contracts purchased or received in an exchange on or after the date of the enactment of this Act. \n \n “(B)  Paragraphs (3) and (4) of subsection (a) shall be effective with respect to contracts purchased or received in an exchange on or after  July 2, 2014 . \n \n \n “(2)   Enforcement and interpretations .— Prior to the date on which the Secretary of the Treasury issues final regulations pursuant to subsection (a)— “(A)  the Secretary (or delegate) shall administer and enforce the law in accordance with subsection (a) and the effective dates in paragraph (1) of this subsection; and \n \n “(B)  taxpayers may rely upon their reasonable good faith interpretations of subsection (a). \n \n \n \n “(d)   Regulatory Successor Provision .— Any reference to a regulation under this section shall be treated as including a reference to any successor regulation thereto.”\nPub. L. 117–328, div. T, title II, §\u202f204 ,  Dec. 29, 2022 ,  136 Stat. 5334 , provided that: \n “(a)   Eliminating a Penalty on Partial Annuitization .— The Secretary of the Treasury (or the Secretary’s delegate) shall amend the regulations under section 401(a)(9) of the Internal Revenue Code of 1986 to provide that if an employee’s benefit is in the form of an individual account under a defined contribution plan, the plan may allow the employee to elect to have the amount required to be distributed from such account under such section for a year to be calculated as the excess of the total required amount for such year over the annuity amount for such year. \n \n “(b)   Definitions .— For purposes of this section— “(1)   Total required amount .— The term ‘total required amount’, with respect to a year, means the amount which would be required to be distributed under Treas. Reg. section 1.401(a)(9)–5 (or any successor regulation) for the year, determined by treating the account balance as of the last valuation date in the immediately preceding calendar year as including the value on that date of all annuity contracts which were purchased with a portion of the account and from which payments are made in accordance with Treas. Reg. section 1.401(a)(9)–6. \n \n “(2)   Annuity amount .— The term ‘annuity amount’, with respect to a year, is the total amount distributed in the year from all annuity contracts described in paragraph (1). \n \n \n “(c)   Conforming Regulatory Amendments .— The Secretary of the Treasury (or the Secretary’s delegate) shall amend the regulations under sections 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Revenue Code of 1986 to conform to the amendments described in subsection (a). Such conforming amendments shall treat all individual retirement plans (as defined in section 7701(a)(37) of such Code) which an individual holds as the owner, or which an individual holds as a beneficiary of the same decedent, as one such plan for purposes of the amendments described in subsection (a). Such conforming amendments shall also treat all contracts described in section 403(b) of such Code which an individual holds as an employee, or which an individual holds as a beneficiary of the same decedent, as one such contract for such purposes. \n \n “(d)   Effective Date .— The modifications and amendments required under subsections (a) and (c) shall be deemed to have been made as of the date of the enactment of this Act [ Dec. 29, 2022 ], and as of such date— “(1)  all applicable laws shall be applied in all respects as though the actions which the Secretary of the Treasury (or the Secretary’s delegate) is required to take under such subsections had been taken, and \n \n “(2)  until such time as such actions are taken, taxpayers may rely upon their reasonable good faith interpretations of this section.”\nPub. L. 117–328, div. T, title III, §\u202f327(b) ,  Dec. 29, 2022 ,  136 Stat. 5360 , provided that:  “The Secretary shall amend Q&A–5(a) of Treasury Regulation section 1.401(a)(9)–5 (or any successor regulation thereto) to provide that if the surviving spouse is the employee’s sole designated beneficiary and the spouse elects treatment under section 401(a)(9)(B)(iv), then the applicable distribution period for distribution calendar years after the distribution calendar year including the employee’s date of death is determined under the uniform lifetime table.”\nPub. L. 117–328, div. T, title III, §\u202f341 ,  Dec. 29, 2022 ,  136 Stat. 5375 , provided that:  \n “Not later than 2 years after the date of enactment of this Act [ Dec. 29, 2022 ], the Secretary of Labor and the Secretary of the Treasury (or such Secretaries’ delegates) shall adopt regulations providing that a plan (as defined in section 3 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002 )) may, but is not required to, consolidate 2 or more of the notices required under sections 404(c)(5)(B) and 514(e)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(c)(5)(B)  and  29 U.S.C. 1144(e)(3) ) and sections 401(k)(12)(D), 401(k)(13)(E), and 414(w)(4) of the Internal Revenue Code of 1986 into a single notice so long as the combined notice— “(1)  includes the required content; \n \n “(2)  clearly identifies the issues addressed therein; \n \n “(3)  is furnished at the time and with the frequency required for each such notice; and \n \n “(4)  is presented in a manner that is reasonably calculated to be understood by the average plan participant and that does not obscure or fail to highlight the primary information required for each notice. \n \n\n This section shall not be interpreted as preventing the consolidation of any other notices required under the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq.], or Internal Revenue Code of 1986, to the extent otherwise permitted by the Secretary of Labor or the Secretary of the Treasury (or either such Secretary’s delegate), as applicable.”\nPub. L. 115–123, div. D, title II, §\u202f41113 ,  Feb. 9, 2018 ,  132 Stat. 161 , provided that: \n “(a)   In General .— Not later than 1 year after the date of the enactment of this Act [ Feb. 9, 2018 ], the Secretary of the Treasury shall modify Treasury Regulation section 1.401(k)–1(d)(3)(iv)(E) to— “(1)  delete the 6-month prohibition on contributions imposed by paragraph (2) thereof, and \n \n “(2)  make any other modifications necessary to carry out the purposes of section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986. \n \n \n “(b)   Effective Date .— The revised regulations under this section shall apply to plan years beginning after  December 31, 2018 .”\nPub. L. 109–280, title VIII, §\u202f823 ,  Aug. 17, 2006 ,  120 Stat. 998 , provided that:  “The Secretary of the Treasury shall issue regulations under which a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986) shall, for all years to which section 401(a)(9) of such Code applies to such plan, be treated as having complied with such section 401(a)(9) if such plan complies with a reasonable good faith interpretation of such section 401(a)(9).”\nPub. L. 109–280, title VIII, §\u202f826 ,  Aug. 17, 2006 ,  120 Stat. 999 , provided that:  \n “Within 180 days after the date of the enactment of this Act [ Aug. 17, 2006 ], the Secretary of the Treasury shall modify the rules for determining whether a participant has had a hardship for purposes of section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986 to provide that if an event (including the occurrence of a medical expense) would constitute a hardship under the plan if it occurred with respect to the participant’s spouse or dependent (as defined in section 152 of such Code), such event shall, to the extent permitted under a plan, constitute a hardship if it occurs with respect to a person who is a beneficiary under the plan with respect to the participant. The Secretary of the Treasury shall issue similar rules for purposes of determining whether a participant has had— \n “(1)  a hardship for purposes of section 403(b)(11)(B) of such Code; or \n \n “(2)  an unforeseen financial emergency for purposes of sections 409A(a)(2)(A)(vi), 409A(a)(2)(B)(ii), and 457(d)(1)(A)(iii) of such Code.”\nPub. L. 107–16, title VI, §\u202f657(c)(2) ,  June 7, 2001 ,  115 Stat. 136 , provided that: \n “(A)   Automatic rollover safe harbor .— Not later than 3 years after the date of enactment of this Act [ June 7, 2001 ], the Secretary of Labor shall prescribe regulations providing for safe harbors under which the designation of an institution and investment of funds in accordance with section 401(a)(31)(B) of the Internal Revenue Code of 1986 is deemed to satisfy the fiduciary requirements of section 404(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(a) ). \n \n “(B)   Use of low-cost individual retirement plans .— The Secretary of the Treasury and the Secretary of Labor may provide, and shall give consideration to providing, special relief with respect to the use of low-cost individual retirement plans for purposes of transfers under section 401(a)(31)(B) of the Internal Revenue Code of 1986 and for other uses that promote the preservation of assets for retirement income purposes.”\nPub. L. 99–514, title XI, §\u202f1141 ,  Oct. 22, 1986 ,  100 Stat. 2490 , provided that:  \n “The Secretary of the Treasury or his delegate shall issue before  February 1, 1988 , such final regulations as may be necessary to carry out the amendments made by— \n “(1)  section 1111 [amending this section], relating to application of nondiscrimination rules to integrated plans, \n \n “(2)  section 1112 [amending this section and sections 402, 404, 406, 407, 410, and 818 of this title], relating to coverage requirements for qualified plans, \n \n “(3)  section 1113 [amending sections 410 and 411 of this title and sections 1052 to 1054 of Title 29, Labor], relating to minimum vesting standards, \n \n “(4)  section 1114 [amending this section, sections 106, 117, 120, 127, 129, 132, 274, 404A, 406, 407, 411, 414, 415, 423, 501, 505, and 4975 of this title, and  section 1108 of Title 29 ], relating to the definition of highly compensated employee, \n \n “(5)  section 1115 [amending  section 414 of this title ], relating to separate lines of business and the definition of compensation, \n \n “(6)  section 1116 [amending this section], relating to rules for section 401(k) plans, \n \n “(7)  section 1117 [enacting  section 4979 of this title  and amending this section and  section 414 of this title ], relating to nondiscrimination requirements for employer matching and employer contribution, \n \n “(8)  section 1120 [amending  section 403 of this title ], relating to nondiscrimination requirements for tax sheltered annuities, and \n \n “(9)  section 1133 [enacting section 4981A [now 4980A] of this title], relating to tax on excess distributions.”\nPub. L. 117–328, div. T, title I, §\u202f117(i) ,  Dec. 29, 2022 ,  136 Stat. 5301 , provided that: \n “(1)   In general .— The Secretary of the Treasury shall, not later than  December 31, 2024 , and annually thereafter, report to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and Means and Education and Labor [now Committee on Education and the Workforce] of the House of Representatives on the data described in paragraph (2), together with any recommendations the Secretary deems appropriate. \n \n “(2)   Data described .— For purposes of the report required under paragraph (1), the Secretary of the Treasury shall collect data and information on— “(A)  the number of plans described in section 408(p) or 401(k)(11) of the Internal Revenue Code of 1986 that are maintained or established during a year; \n \n “(B)  the number of participants eligible to participate in such plans for such year; \n \n “(C)  median contribution amounts for the participants described in subparagraph (B); \n \n “(D)  the types of investments that are most common under such plans; and \n \n “(E)  the fee levels charged in connection with the maintenance of accounts under such plans. \n \n\n Such data and information shall be collected separately for each type of plan. For purposes of collecting such data, the Secretary of the Treasury may use such data as is otherwise available to the Secretary for publication and may use such approaches as are appropriate under the circumstances, including the use of voluntary surveys and collaboration on studies.”\nPub. L. 117–328, div. T, title III, §\u202f305 ,  Dec. 29, 2022 ,  136 Stat. 5341 , provided that: \n “(a)   In General .— Except as otherwise provided in the Internal Revenue Code of 1986, regulations, or other guidance of general applicability prescribed by the Secretary of the Treasury or the Secretary’s delegate (referred to in this section as the ‘Secretary’), any eligible inadvertent failure to comply with the rules applicable under section 401(a), 403(a), 403(b), 408(p), or 408(k) of such Code may be self-corrected under the Employee Plans Compliance Resolution System (as described in Revenue Procedure 2021–30, or any successor guidance, and hereafter in this section referred to as the ‘EPCRS’), except to the extent that (1) such failure was identified by the Secretary prior to any actions which demonstrate a specific commitment to implement a self-correction with respect to such failure, or (2) the self-correction is not completed within a reasonable period after such failure is identified. For purposes of self-correction of an eligible inadvertent failure, the correction period under section 9.02 of Revenue Procedure 2021–30 (or any successor guidance), except as otherwise provided under such Code, regulations, or other guidance of general applicability prescribed by the Secretary, is indefinite and has no last day, other than with respect to failures identified by the Secretary prior to any actions which demonstrate a specific commitment to implement a self-correction with respect to such failure or with respect to a self-correction that is not completed within a reasonable period, as described in the preceding sentence. \n \n “(b)   Loan Errors .— In the case of an eligible inadvertent failure relating to a loan from a plan to a participant— “(1)  such failure may be self-corrected under subsection (a) according to the rules of section 6.07 of Revenue Procedure 2021–30 (or any successor guidance), including the provisions related to whether a deemed distribution must be reported on Form 1099–R, \n \n “(2)  the Secretary of Labor shall treat any such failure which is so self-corrected under subsection (a) as meeting the requirements of the Voluntary Fiduciary Correction Program of the Department of Labor if, with respect to the violation of the fiduciary standards of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq.], there is a similar loan error eligible for correction under EPCRS and the loan error is corrected in such manner, and \n \n “(3)  the Secretary of Labor may impose reporting or other procedural requirements with respect to parties that intend to rely on the Voluntary Fiduciary Correction Program for self-corrections described in paragraph (2). \n \n \n “(c)   EPCRS for IRAs .— The Secretary shall expand the EPCRS to allow custodians of individual retirement plans (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986) to address eligible inadvertent failures with respect to an individual retirement plan (as so defined), including (but not limited to)— “(1)  waivers of the excise tax which would otherwise apply under section 4974 of the Internal Revenue Code of 1986, and \n \n “(2)  rules permitting a nonspouse beneficiary to return distributions to an inherited individual retirement plan described in section 408(d)(3)(C) of the Internal Revenue Code of 1986 in a case where, due to an inadvertent error by a service provider, the beneficiary had reason to believe that the distribution could be rolled over without inclusion in income of any part of the distributed amount. \n \n \n “(d)   Correction Methods for Eligible Inadvertent Failures .— The Secretary shall issue guidance on correction methods that are required to be used to correct eligible inadvertent failures, including general principles of correction if a specific correction method is not specified by the Secretary. \n \n “(e)   Eligible Inadvertent Failure .— For purposes of this section— “(1)   In general .— Except as provided in paragraph (2), the term ‘eligible inadvertent failure’ means a failure that occurs despite the existence of practices and procedures which— “(A)  satisfy the standards set forth in section 4.04 of Revenue Procedure 2021–30 (or any successor guidance), or \n \n “(B)  satisfy similar standards in the case of an individual retirement plan. \n \n \n “(2)   Exception .— The term ‘eligible inadvertent failure’ shall not include any failure which is egregious, relates to the diversion or misuse of plan assets, or is directly or indirectly related to an abusive tax avoidance transaction. \n \n \n “(f)   Application of Certain Requirements for Correcting Errors .— This section shall not apply to any failure unless the correction of such failure under this section is made in conformity with the general principles that apply to corrections of such failures under the Internal Revenue Code of 1986, including regulations or other guidance issued thereunder and including those principles and corrections set forth in Revenue Procedure 2021–30 (or any successor guidance). \n \n “(g)   Issuance of Guidance .— The Secretary of the Treasury, or the Secretary’s delegate, shall revise Revenue Procedure 2021–30 (or any successor guidance) to take into account the provisions of this section not later than the date which is 2 years after the date of enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f334(f) ,  Dec. 29, 2022 ,  136 Stat. 5372 , provided that:  “The Secretary of the Treasury (or the Secretary’s delegate) shall issue such forms and guidance as are necessary to collect the filing required by section 401(a)(39)(E)(iii) of the Internal Revenue Code of 1986, as added by this section.”\nPub. L. 109–280, title I, §\u202f104 ,  Aug. 17, 2006 ,  120 Stat. 816 , as amended by  Pub. L. 111–192, title II, §\u202f202(b) ,  June 25, 2010 ,  124 Stat. 1298 ;  Pub. L. 113–97, title I, §\u202f103(b) ,  Apr. 7, 2014 ,  128 Stat. 1117 , provided that: \n “(a)   General Rule .— Except as provided in this section, if a plan in existence on  July 26, 2005 , was an eligible cooperative plan or an eligible charity plan for its plan year which includes such date, the amendments made by this subtitle [subtitle A (§§\u202f101 to 108) of title I of  Pub. L. 109–280 , enacting sections 1082 and 1083 of Title 29, Labor, amending sections 1021, 1023, 1053, 1054, 1056, 1103, 1108, 1132, 1301, 1303, 1310, 1362, 1371, and 1423 of Title 29 and section 106 of 1978 Reorg. Plan No. 4, set out in the Appendix to Title 5, Government Organization and Employees, and as a note under  section 1001 of Title 29 , and repealing sections 1057, 1082 to 1086 of Title 29] and subtitle B [subtitle B (§§\u202f111 to 116) of title I of  Pub. L. 109–280 , enacting sections 430 and 436 of this title, amending this section and sections 409A, 411, 412, 414, 420, 4971, 4972, and 6059 of this title, and amending provisions set out as a note under  section 412 of this title ] shall not apply to plan years beginning before the earlier of— “(1)  the first plan year for which the plan ceases to be an eligible cooperative plan or an eligible charity plan, or \n \n “(2)   January 1, 2017 . \n \n \n “(b)   Interest Rate .— In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(b)(5)(B) ] and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B) to an eligible cooperative plan or an eligible charity plan for plan years beginning after  December 31, 2007 , and before the first plan year to which such amendments apply, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act [ 29 U.S.C. 1083(h)(2)(C)(iii) ] and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used. \n \n “(c)   Eligible Cooperative Plan Defined .— For purposes of this section, a plan shall be treated as an eligible cooperative plan for a plan year if the plan is maintained by more than 1 employer and at least 85 percent of the employers are— “(1)  rural cooperatives (as defined in section 401(k)(7)(B) of such Code without regard to clause (iv) thereof), or \n \n “(2)  organizations which are— “(A)  cooperative organizations described in section 1381(a) of such Code which are more than 50-percent owned by agricultural producers or by cooperatives owned by agricultural producers, or \n \n “(B)  more than 50-percent owned, or controlled by, one or more cooperative organizations described in subparagraph (A). \n \n \n\n A plan shall also be treated as an eligible cooperative plan for any plan year for which it is described in section 210(a) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1060(a) ] and is maintained by a rural telephone cooperative association described in section 3(40)(B)(v) of such Act [ 29 U.S.C. 1002(40)(B)(v) ]. \n \n “(d)   Eligible Charity Plan Defined.— “(1)   In general .— For purposes of this section, a plan shall be treated as an eligible charity plan for a plan year if the plan is maintained by more than one employer (determined without regard to section 414(c) of the Internal Revenue Code) and 100 percent of the employers are described in section 501(c)(3) of such Code. \n \n “(2)   Election not to be an eligible charity plan .— A plan sponsor may elect for a plan to cease to be treated as an eligible charity plan for plan years beginning after  December 31, 2013 . Such election shall be made at such time and in such form and manner as shall be prescribed by the Secretary of the Treasury. Any such election may be revoked only with the consent of the Secretary of the Treasury. \n \n “(3)   Election to use funding options available to other plan sponsors.— “(A)  A plan sponsor that makes the election described in paragraph (2) may elect for a plan to apply the rules described in subparagraphs (B), (C), and (D) for plan years beginning after  December 31, 2013 . Such election shall be made at such time and in such form and manner as shall be prescribed by the Secretary of the Treasury. Any such election may be revoked only with the consent of the Secretary of the Treasury. \n \n “(B)  Under the rules described in this subparagraph, for the first plan year beginning after  December 31, 2013 , a plan has— “(i)  an 11-year shortfall amortization base, \n \n “(ii)  a 12-year shortfall amortization base, and \n \n “(iii)  a 7-year shortfall amortization base. \n \n \n “(C)  Under the rules described in this subparagraph, section 303(c)(2)(A) and (B) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(c)(2)(A) , (B)], and section 430(c)(2)(A) and (B) of the Internal Revenue Code of 1986 shall be applied by— “(i)  in the case of an 11-year shortfall amortization base, substituting ‘11-plan-year period’ for ‘7-plan-year period’ wherever such phrase appears, and \n \n “(ii)  in the case of a 12-year shortfall amortization base, substituting ‘12-plan-year period’ for ‘7-plan-year period’ wherever such phrase appears. \n \n \n “(D)  Under the rules described in this subparagraph, section 303(c)(7) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(c)(7) ] and section 430(c)(7) of the Internal Revenue Code of 1986 shall apply to a plan for which an election has been made under subparagraph (A). Such provisions shall apply in the following manner: “(i)  The first plan year beginning after  December 31, 2013 , shall be treated as an election year, and no other plan years shall be so treated. \n \n “(ii)  All references in section 303(c)(7) of such Act [ 29 U.S.C. 1083(c)(7) ] and section 430(c)(7) of such Code to ‘ February 28, 2010 ’ or ‘ March 1, 2010 ’ shall be treated as references to ‘ February 28, 2013 ’ or ‘ March 1, 2013 ’, respectively. \n \n \n “(E)  For purposes of this paragraph, the 11-year amortization base is an amount, determined for the first plan year beginning after  December 31, 2013 , equal to the unamortized principal amount of the shortfall amortization base (as defined in section 303(c)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(c)(3) ] and section 430(c)(3) of the Internal Revenue Code of 1986) that would have applied to the plan for the first plan beginning after  December 31, 2009 , if— “(i)  the plan had never been an eligible charity plan, \n \n “(ii)  the plan sponsor had made the election described in section 303(c)(2)(D)(i) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(c)(2)(D)(i) ] and in section 430(c)(2)(D)(i) of the Internal Revenue Code of 1986 to have section 303(c)(2)(D)(i) of such Act and section 430(c)(2)(D)(iii) of such Code apply with respect to the shortfall amortization base for the first plan year beginning after  December 31, 2009 , and \n \n “(iii)  no event had occurred under paragraph (6) or (7) of section 303(c) of such Act [ 29 U.S.C. 1083(c)(6) , (7)] or paragraph (6) or (7) of section 430(c) of such Code that, as of the first day of the first plan year beginning after  December 31, 2013 , would have modified the shortfall amortization base or the shortfall amortization installments with respect to the first plan year beginning after  December 31, 2009 . \n \n \n “(F)  For purposes of this paragraph, the 12-year amortization base is an amount, determined for the first plan year beginning after  December 31, 2013 , equal to the unamortized principal amount of the shortfall amortization base (as defined in section 303(c)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(c)(3) ] and section 430(c)(3) of the Internal Revenue Code of 1986) that would have applied to the plan for the first plan beginning after  December 31, 2010 , if— “(i)  the plan had never been an eligible charity plan, \n \n “(ii)  the plan sponsor had made the election described in section 303(c)(2)(D)(i) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(c)(2)(D)(i) ] and in section 430(c)(2)(D)(i) of the Internal Revenue Code of 1986 to have section 303(c)(2)(D)(i) of such Act and section 430(c)(2)(D)(iii) of such Code apply with respect to the shortfall amortization base for the first plan year beginning after  December 31, 2010 , and \n \n “(iii)  no event had occurred under paragraph (6) or (7) of section 303(c) of such Act [ 29 U.S.C. 1083(c)(6) , (7)] or paragraph (6) or (7) of section 430(c) of such Code that, as of the first day of the first plan year beginning after  December 31, 2013 , would have modified the shortfall amortization base or the shortfall amortization installments with respect to the first plan year beginning after  December 31, 2010 . \n \n \n “(G)  For purposes of this paragraph, the 7-year shortfall amortization base is an amount, determined for the first plan year beginning after  December 31, 2013 , equal to— “(i)  the shortfall amortization base for the first plan year beginning after  December 31, 2013 , without regard to this paragraph, minus \n \n “(ii)  the sum of the 11-year shortfall amortization base and the 12-year shortfall amortization base. \n \n \n \n “(4)   Retroactive election .— Not later than  December 31, 2014 , a plan sponsor may make a one-time, irrevocable, retroactive election to not be treated as an eligible charity plan. Such election shall be effective for plan years beginning after  December 31, 2007 , and shall be made by providing reasonable notice to the Secretary of the Treasury.”\n[ Pub. L. 111–192, title II, §\u202f202(c)(2) ,  June 25, 2010 ,  124 Stat. 1299 , provided that:  “The amendments made by subsection (b) [amending  section 104 of Pub. L. 109–280 , set out above] shall apply to plan years beginning after  December 31, 2007 , except that a plan sponsor may elect to apply such amendments to plan years beginning after  December 31, 2008 . Any such election shall be made at such time, and in such form and manner, as shall be prescribed by the Secretary of the Treasury, and may be revoked only with the consent of the Secretary of the Treasury.” \n]\nPub. L. 109–280, title I, §\u202f105 ,  Aug. 17, 2006 ,  120 Stat. 817 , provided that: \n “(a)   General Rule .— Except as provided in this section, if a plan in existence on  July 26, 2005 , was a PBGC settlement plan as of such date, the amendments made by this subtitle [subtitle A (§§\u202f101 to 108) of title I of  Pub. L. 109–280 , enacting sections 1082 and 1083 of Title 29, Labor, amending sections 1021, 1023, 1053, 1054, 1056, 1103, 1108, 1132, 1301, 1303, 1310, 1362, 1371, and 1423 of Title 29 and section 106 of 1978 Reorg. Plan No. 4, set out in the Appendix to Title 5, Government Organization and Employees, and as a note under  section 1001 of Title 29 , and repealing sections 1057, 1082 to 1086 of Title 29] and subtitle B [subtitle B (§§\u202f111 to 116) of title I of  Pub. L. 109–280 , enacting sections 430 and 436 of this title, amending this section and sections 409A, 411, 412, 414, 420, 4971, 4972, and 6059 of this title, and amending provisions set out as a note under  section 412 of this title ] shall not apply to plan years beginning before  January 1, 2014 . \n \n “(b)   Interest Rate .— In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(b)(5)(B) ] and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B), to a PBGC settlement plan for plan years beginning after  December 31, 2007 , and before  January 1, 2014 , the third segment rate determined under section 303(h)(2)(C)(iii) of such Act [ 29 U.S.C. 1083(h)(2)(C)(iii) ] and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used. \n \n “(c)  PBGC  Settlement Plan .— For purposes of this section, the term ‘PBGC settlement plan’ means a defined benefit plan (other than a multiemployer plan) to which section 302 of such Act [ 29 U.S.C. 1082 ] and section 412 of such Code apply and— “(1)  which was sponsored by an employer which was in bankruptcy, giving rise to a claim by the Pension Benefit Guaranty Corporation of not greater than $150,000,000, and the sponsorship of which was assumed by another employer that was not a member of the same controlled group as the bankrupt sponsor and the claim of the Pension Benefit Guaranty Corporation was settled or withdrawn in connection with the assumption of the sponsorship, or \n \n “(2)  which, by agreement with the Pension Benefit Guaranty Corporation, was spun off from a plan subsequently terminated by such Corporation under section 4042 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1342 ].”\nPub. L. 109–280, title I, §\u202f106 ,  Aug. 17, 2006 ,  120 Stat. 817 , provided that: \n “(a)   General Rule .— Except as provided in this section, if a plan is an eligible government contractor plan, this subtitle [subtitle A (§§\u202f101 to 108) of title I of  Pub. L. 109–280 , enacting sections 1082 and 1083 of Title 29, Labor, amending sections 1021, 1023, 1053, 1054, 1056, 1103, 1108, 1132, 1301, 1303, 1310, 1362, 1371, and 1423 of Title 29 and section 106 of 1978 Reorg. Plan No. 4, set out in the Appendix to Title 5, Government Organization and Employees, and as a note under  section 1001 of Title 29 , repealing sections 1057, 1082 to 1086 of Title 29, and enacting provisions set out as notes under this section and sections 1021, 1082, and 1083 of Title 29] and subtitle B [subtitle B (§§\u202f111 to 116) of title I of  Pub. L. 109–280 , enacting sections 430 and 436 of this title, amending this section and sections 409A, 411, 412, 414, 420, 4971, 4972, and 6059 of this title, enacting provisions set out as notes under sections 409A, 412, 430, and 436 of this title, and amending provisions set out as a note under  section 412 of this title ] shall not apply to plan years beginning before the earliest of— “(1)  the first plan year for which the plan ceases to be an eligible government contractor plan, \n \n “(2)  the effective date of the Cost Accounting Standards Pension Harmonization Rule, or \n \n “(3)   January 1, 2011 . \n \n \n “(b)   Interest Rate .— In applying section 302(b)(5)(B) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(b)(5)(B) ] and section 412(b)(5)(B) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle and subtitle B) to an eligible government contractor plan for plan years beginning after  December 31, 2007 , and before the first plan year to which such amendments apply, the third segment rate determined under section 303(h)(2)(C)(iii) of such Act [ 29 U.S.C. 1083(h)(2)(C)(iii) ] and section 430(h)(2)(C)(iii) of such Code (as added by such amendments) shall be used in lieu of the interest rate otherwise used. \n \n “(c)   Eligible Government Contractor Plan Defined .— For purposes of this section, a plan shall be treated as an eligible government contractor plan if it is maintained by a corporation or a member of the same affiliated group (as defined by section 1504(a) of the Internal Revenue Code of 1986), whose primary source of revenue is derived from business performed under contracts with the United States that are subject to the Federal Acquisition Regulations (chapter 1 of title 48, CFR) and that are also subject to the Defense Federal Acquisition Regulation Supplement (chapter 2 of title 48, CFR), and whose revenue derived from such business in the previous fiscal year exceeded $5,000,000,000, and whose pension plan costs that are assignable under those contracts are subject to sections 412 and 413 of the Cost Accounting Standards (48 CFR 9904.412 and 9904.413). \n \n “(d)   Cost Accounting Standards Pension Harmonization Rule .— The Cost Accounting Standards Board shall review and revise sections 412 and 413 of the Cost Accounting Standards (48 CFR 9904.412 and 9904.413) to harmonize the minimum required contribution under the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq.] of eligible government contractor plans and government reimbursable pension plan costs not later than  January 1, 2010 . Any final rule adopted by the Cost Accounting Standards Board shall be deemed the Cost Accounting Standards Pension Harmonization Rule.”\nPub. L. 109–280, title I, §\u202f107 , as added by  Pub. L. 111–192, title II, §\u202f202(a) ,  June 25, 2010 ,  124 Stat. 1297 , provided that: \n “(a)   In General .— If the plan sponsor of a plan to which section 104, 105, or 106 of this Act [see notes above] applies elects to have this section apply for any eligible plan year (in this section referred to as an ‘election year’), section 302 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082 ] and section 412 of the Internal Revenue Code of 1986 (as in effect before the amendments made by this subtitle [subtitle A (§§\u202f101 to 108) of title I of  Pub. L. 109–280 , enacting sections 1082 and 1083 of Title 29, Labor, amending sections 1021, 1023, 1053, 1054, 1056, 1103, 1108, 1132, 1301, 1303, 1310, 1362, 1371, and 1423 of Title 29 and section 106 of 1978 Reorg. Plan No. 4, set out in the Appendix to Title 5, Government Organization and Employees, and as a note under  section 1001 of Title 29 , and repealing sections 1057, 1082 to 1086 of Title 29] and subtitle B [subtitle B (§§\u202f111 to 116) of title I of  Pub. L. 109–280 , enacting sections 430 and 436 of this title, amending this section and sections 409A, 411, 412, 414, 420, 4971, 4972, and 6059 of this title, and amending provisions set out as a note under  section 412 of this title ]) shall apply to such year in the manner described in subsection (b) or (c), whichever is specified in the election. All references in this section to ‘such Act’ or ‘such Code’ shall be to such Act or such Code as in effect before the amendments made by this subtitle and subtitle B. \n \n “(b)   Application of  2  and  7  Rule .— In the case of an election year to which this subsection applies— “(1)  2- year lookback for determining deficit reduction contributions for certain plans .— For purposes of applying section 302(d)(9) of such Act [ 29 U.S.C. 1082(d)(9) ] and section 412( l )(9) of such Code, the funded current liability percentage (as defined in subparagraph (C) thereof) for such plan for such plan year shall be such funded current liability percentage of such plan for the second plan year preceding the first election year of such plan. \n \n “(2)   Calculation of deficit reduction contribution .— For purposes of applying section 302(d) of such Act [ 29 U.S.C. 1082(d) ] and section 412( l ) of such Code to a plan to which such sections apply (after taking into account paragraph (1))— “(A)  in the case of the increased unfunded new liability of the plan, the applicable percentage described in section 302(d)(4)(C) of such Act [ 29 U.S.C. 1082(d)(4)(C) ] and section 412( l )(4)(C) of such Code shall be the third segment rate described in sections 104(b), 105(b), and 106(b) of this Act [see notes above], and \n \n “(B)  in the case of the excess of the unfunded new liability over the increased unfunded new liability, such applicable percentage shall be determined without regard to this section. \n \n \n \n “(c)   Application of  15- year Amortization .— In the case of an election year to which this subsection applies, for purposes of applying section 302(d) of such Act [ 29 U.S.C. 1082(d) ] and section 412( l ) of such Code— “(1)  in the case of the increased unfunded new liability of the plan, the applicable percentage described in section 302(d)(4)(C) of such Act [ 29 U.S.C. 1082(d)(4)(C) ] and section 412( l )(4)(C) of such Code for any pre-effective date plan year beginning with or after the first election year shall be the ratio of— “(A)  the annual installments payable in each year if the increased unfunded new liability for such plan year were amortized over 15 years, using an interest rate equal to the third segment rate described in sections 104(b), 105(b), and 106(b) of this Act, to \n \n “(B)  the increased unfunded new liability for such plan year, and \n \n \n “(2)  in the case of the excess of the unfunded new liability over the increased unfunded new liability, such applicable percentage shall be determined without regard to this section. \n \n \n “(d)   Election.— “(1)   In general .— The plan sponsor of a plan may elect to have this section apply to not more than 2 eligible plan years with respect to the plan, except that in the case of a plan to which section 106 of this Act applies, the plan sponsor may only elect to have this section apply to 1 eligible plan year. \n \n “(2)   Amortization schedule .— Such election shall specify whether the rules under subsection (b) or (c) shall apply to an election year, except that if a plan sponsor elects to have this section apply to 2 eligible plan years, the plan sponsor must elect the same rule for both years. \n \n “(3)   Other rules .— Such election shall be made at such time, and in such form and manner, as shall be prescribed by the Secretary of the Treasury, and may be revoked only with the consent of the Secretary of the Treasury. \n \n \n “(e)   Definitions .— For purposes of this section— “(1)   Eligible plan year .— For purposes of this subparagraph, the term ‘eligible plan year’ means any plan year beginning in 2008, 2009, 2010, or 2011, except that a plan year beginning in 2008 shall only be treated as an eligible plan year if the due date for the payment of the minimum required contribution for such plan year occurs on or after the date of the enactment of this clause [ June 25, 2010 ]. \n \n “(2)   Pre-effective date plan year .— The term ‘pre-effective date plan year’ means, with respect to a plan, any plan year prior to the first year in which the amendments made by this subtitle and subtitle B apply to the plan. \n \n “(3)   Increased unfunded new liability .— The term ‘increased unfunded new liability’ means, with respect to a year, the excess (if any) of the unfunded new liability over the amount of unfunded new liability determined as if the value of the plan’s assets determined under subsection 302(c)(2) of such Act [ 29 U.S.C. 1082(c)(2) ] and section 412(c)(2) of such Code equaled the product of the current liability of the plan for the year multiplied by the funded current liability percentage (as defined in section 302(d)(8)(B) of such Act [ 29 U.S.C. 1082(d)(8)(B) ] and 412( l )(8)(B) of such Code) of the plan for the second plan year preceding the first election year of such plan. \n \n “(4)   Other definitions .— The terms ‘unfunded new liability’ and ‘current liability’ shall have the meanings set forth in section 302(d) of such Act [ 29 U.S.C. 1082(d) ] and section 412( l ) of such Code.”\nPub. L. 109–280, title VIII, §\u202f865 ,  Aug. 17, 2006 ,  120 Stat. 1025 , provided that: \n “(a)   In General .— In the case of any plan year ending after the date of the enactment of this Act [ Aug. 17, 2006 ], annuity payments provided with respect to any account maintained for a participant or beneficiary under a qualified church plan shall not fail to satisfy the requirements of section 401(a)(9) of the Internal Revenue Code of 1986 merely because the payments are not made under an annuity contract purchased from an insurance company if such payments would not fail such requirements if provided with respect to a retirement income account described in section 403(b)(9) of such Code. \n \n “(b)   Qualified Church Plan .— For purposes of this section, the term ‘qualified church plan’ means any money purchase pension plan described in section 401(a) of such Code which— “(1)  is a church plan (as defined in section 414(e) of such Code) with respect to which the election provided by section 410(d) of such Code has not been made, and \n \n “(2)  was in existence on  April 17, 2002 .”\nPub. L. 105–34, title XV, §\u202f1510 ,  Aug. 5, 1997 ,  111 Stat. 1068 , provided that: \n “(a)   In General .— Not later than  December 31, 1998 , the Secretary of the Treasury and the Secretary of Labor shall each issue guidance which is designed to— “(1)  interpret the notice, election, consent, disclosure, and time requirements (and related recordkeeping requirements) under the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq.] relating to retirement plans as applied to the use of new technologies by plan sponsors and administrators while maintaining the protection of the rights of participants and beneficiaries, and \n \n “(2)  clarify the extent to which writing requirements under the Internal Revenue Code of 1986 relating to retirement plans shall be interpreted to permit paperless transactions. \n \n \n “(b)   Applicability of Final Regulations .— Final regulations applicable to the guidance regarding new technologies described in subsection (a) shall not be effective until the first plan year beginning at least 6 months after the issuance of such final regulations.”\nPub. L. 104–188, title I, §\u202f1704(k) ,  Aug. 20, 1996 ,  110 Stat. 1882 , provided that: \n “(1)   In general .— For purposes of the Internal Revenue Code of 1986, a qualified football coaches plan— “(A)  shall be treated as a multiemployer collectively bargained plan, and \n \n “(B)  notwithstanding section 401(k)(4)(B) of such Code, may include a qualified cash and deferred arrangement under section 401(k) of such Code. \n \n \n “(2)   Qualified football coaches plan .— For purposes of this subsection, the term ‘qualified football coaches plan’ means any defined contribution plan which is established and maintained by an organization— “(A)  which is described in section 501(c) of such Code, \n \n “(B)  the membership of which consists entirely of individuals who primarily coach football as full-time employees of 4-year colleges or universities described in section 170(b)(1)(A)(ii) of such Code, and \n \n “(C)  which was in existence on  September 18, 1986 . \n \n \n “(3)   Effective date .— This subsection shall apply to years beginning after  December 22, 1987 .”\nPub. L. 100–647, title VI, §\u202f6065 ,  Nov. 10, 1988 ,  102 Stat. 3702 , provided that:  “In the case of plan years beginning before  January 1, 1993 , section 401(a)(26) of the 1986 Code shall not apply to any governmental plan (within the meaning of section 414(d) of such Code) with respect to employees who were participants in such plan on  July 14, 1988 .”\nPub. L. 100–203, title IX, §\u202f9343(a) ,  Dec. 22, 1987 ,  101 Stat. 1330–372 , provided that:  “Except to the extent specifically provided in the Internal Revenue Code of 1986 or as determined by the Secretary of the Treasury, titles I and IV of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq., 1301 et seq.] are not applicable in interpreting such Code.”\nPub. L. 104–188, title I, §\u202f1465 ,  Aug. 20, 1996 ,  110 Stat. 1825 , provided that:  \n “If any amendment made by this subtitle [subtitle D (§§\u202f1401–1465) of title I of  Pub. L. 104–188 , see Tables for classification] requires an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  January 1, 1998 , if— “(1)  during the period after such amendment takes effect and before such first plan year, the plan or contract is operated in accordance with the requirements of such amendment, and \n \n “(2)  such amendment applies retroactively to such period. \n \n\n In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this section shall be applied by substituting ‘2000’ for ‘1998’.”\nPub. L. 102–318, title V, §\u202f523 ,  July 3, 1992 ,  106 Stat. 315 , provided that:  \n “If any amendment made by this subtitle [subtitle B (§§\u202f521–523) of title V of  Pub. L. 102–318 , amending this section and sections 55, 62, 72, 219, 402 to 404, 406 to 408, 411, 414, 415, 457, 691, 871, 877, 1441, 3121, 3306, 3402, 3405, 4973, 4980A, 6047, 6652, and 7701 of this title] requires an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  January 1, 1994 , if— \n “(1)  during the period after such amendment takes effect and before such first plan year, the plan is operated in accordance with the requirements of such amendment, and \n \n “(2)  such plan amendment applies retroactively to such period.”\nPub. L. 99–514, title XI, §\u202f1140 ,  Oct. 22, 1986 ,  100 Stat. 2489 , as amended by  Pub. L. 101–239, title VII, §\u202f7861(c) ,  Dec. 19, 1989 ,  103 Stat. 2431 ;  Pub. L. 104–188, title I, §\u202f1704(t)(27) ,  Aug. 20, 1996 ,  110 Stat. 1888 , provided that: \n “(a)   In General .— If any amendment made by this subtitle, subtitle C [subtitles A (§§\u202f1101–1147) and C (§§\u202f1171–1177) of title XI of  Pub. L. 99–514 , enacting sections 2057, 4972, 4979, 4980, 4981A, and 6659A of this title, amending this section, sections 38, 56, 72, 106, 108, 117, 120, 127, 129, 132, 133, 219, 274, 402 to 404A, 406 to 411, 414 to 417, 423, 457, 501, 505, 818, 852, 3121, 3306, 3405, 4973 to 4975, 4979A, 6051, 6693, and 7701 of this title, and sections 1052 to 1055 and 1108 of Title 29, Labor, repealing sections 41 and 6699 of this title, and amending provisions set out as a note under  section 1001 of Title 29 ], or title XVIII of this Act [see Tables for classification] requires an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  January 1, 1989 , if— “(1)  during the period after such amendment takes effect and before such first plan year, the plan is operated in accordance with the requirements of such amendment or in accordance with an amendment prescribed by the Secretary and adopted by the plan, and \n \n “(2)  such plan amendment applies retroactively to the period after such amendment takes effect and such first plan year. \n \n\n A pension plan shall not be treated as failing to provide definitely determinable benefits or contributions, or to be operated in accordance with the provisions of the plan, merely because it operates in accordance with this provision. \n \n “(b)   Model Amendment.— “(1)   Secretary to prescribe amendment .— The Secretary of the Treasury or his delegate shall prescribe an amendment or amendments which allow a plan to meet the requirements of any amendment made by this subtitle or subtitle C— “(A)  which requires an amendment to such plan, and \n \n “(B)  is effective before the first plan year beginning after  December 31, 1988 . \n \n \n “(2)   Adoption by plan .— If a plan adopts the amendment or amendments prescribed under paragraph (1) and operates in accordance with such amendment or amendments, such plan shall not be treated as failing to provide definitely determinable benefits or contributions or to be operated in accordance with the provisions of the plan. \n \n \n “(c)   Special Rule for Collectively Bargained Plans .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , subsection (a) shall be applied by substituting for the first plan year beginning on or after  January 1, 1989 , the first plan year beginning after the later of— “(1)   December 31, 1988 , or \n \n “(2)  the earlier of— “(A)   December 31, 1990 , or \n \n “(B)  the date on which the last of such collective bargaining agreements terminate (without regard to any extension after  February 28, 1986 ). \n \n \n\n For purposes of paragraph (1)(B) [(2)(B)] and any other provision of this title [see Tables for classification], an agreement shall not be treated as terminated merely because the plan is amended pursuant to such agreement to meet the requirements of any amendment made by this title or title XVIII of this Act.”\nPub. L. 99–514, title XI, §\u202f1142 ,  Oct. 22, 1986 ,  100 Stat. 2490 , provided that:  “The Secretary of the Treasury or his delegate shall, not later than  May 1, 1987 , begin accepting applications for opinion letters with respect to master and prototype plans for qualified cash or deferred arrangements under section 401(k) of the Internal Revenue Code of 1986.”\nPub. L. 99–514, title XVIII, §\u202f1852(a)(4)(C) , as added by  Pub. L. 100–647, title I, §\u202f1018(t)(3)(A) ,  Nov. 10, 1988 ,  102 Stat. 3588 , provided that:  “An individual whose required beginning date would, but for the amendment made by subparagraph (A) [amending this section], occur after  December 31, 1986 , but whose required beginning date after such amendment occurs before  January 1, 1987 , shall be treated as if such individual had become a 5-percent owner during the plan year ending in 1986.”\nPub. L. 98–369, div. A, title V, §\u202f553 ,  July 18, 1984 ,  98 Stat. 897 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— For purposes of sections 401(a)(9), 408(a)(6) and (7), and 408(b)(3) and (4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]— “(1)  a trust, custodial account, or annuity or other contract forming part of a pension or profit-sharing plan, or a retirement annuity, or \n \n “(2)  a grantor of an individual retirement account or an individual retirement annuity, \n \n\n shall not be treated as failing to meet the requirements of such sections if such account, annuity, or contract was issued by an insurance company which, on  March 15, 1984 , was a party to a rehabilitation proceeding under the applicable State insurance law. \n \n “(b)   Limitation .— Subsection (a) shall apply only during the period during which— “(1)  the insurance company continues to be a party to the proceeding described in subsection (a), and \n \n “(2)  distributions under the trust, custodial account, or annuity or other contract may not be made by reason of such proceeding.”\nPub. L. 98–369, div. A, title V, §\u202f524(e) ,  July 18, 1984 ,  98 Stat. 872 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— If the Secretary of the Treasury or his delegate does not publish final regulations under section 416 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ]) before  January 1, 1985 , the Secretary shall publish before such date plan amendment provisions which may be incorporated in a plan to meet the requirements of section 401(a)(10)(B)(ii) of such Code. \n \n “(2)   Effect of incorporation .— If a plan is amended to incorporate the plan amendment provisions described in paragraph (1), such plan shall be treated as meeting the requirements of section 401(a)(10)(B)(ii) of the Internal Revenue Code of 1986 during the period such amendment is in effect but not later than 6 months after the final regulations described in paragraph (1) are published. \n \n “(3)   Failure by secretary to publish .— If the Secretary of the Treasury or his delegate does not publish plan amendment provisions described in paragraph (1), the plan shall be treated as meeting the requirements of section 401(a)(10)(B) of the Internal Revenue Code of 1986 if— “(A)  such plan is amended to incorporate such requirements by reference, except that \n \n “(B)  in the case of any optional requirement under section 416 of such Code, if such amendment does not specify the manner in which such requirement will be met, the employer shall be treated as having elected the requirement with respect to each employee which provides the maximum vested accrued benefit for such employee.”\nPub. L. 95–600, title I, §\u202f135(c)(2) ,  Nov. 6, 1978 ,  92 Stat. 2787 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of cash or deferred arrangements in existence on  June 27, 1974 — “(A)  the qualification of the plan and the trust under section 401 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]; \n \n “(B)  the exemption of the trust under section 501(a) of such Code; \n \n “(C)  the taxable year of inclusion in gross income of the employee of any amount so contributed by the employer to the trust; and \n \n “(D)  the excludability of the interest of the employee in the trust under sections 2039 and 2517 of such Code, \n \n\n shall be determined for plan years beginning before  January 1, 1980  in a manner consistent with Revenue Ruling 56–497 (1956–2 C.B. 284), Revenue Ruling 63–180 (1963–2 C.B. 189), and Revenue Ruling 68–89 (1968–1 C.B. 402).”\nPub. L. 93–406, title II, §\u202f2006 ,  Sept. 2, 1974 ,  88 Stat. 992 , as amended by  Pub. L. 94–455, title XV, §\u202f1506 ,  Oct. 4, 1976 ,  90 Stat. 1739 ;  Pub. L. 95–615, §\u202f5 ,  Nov. 8, 1978 ,  92 Stat. 3097 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Inclusion of Certain Contributions in Income.— Except in the case of plans or arrangements in existence on  June 27, 1974 , a contribution made before  January 1, 1980 , to an employees’ trust described in section 401(a), 403(a) or 405(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which is exempt from tax under section 501(a) of such Code, or under an arrangement which, but for the fact that it was not in existence on  June 27, 1974 , would be an arrangement described in subsection (b)(2) of this section, shall be treated as a contribution made by an employee if the contribution is made under an arrangement under which the contribution will be made only if the employee elects to receive a reduction in his compensation or to forego an increase in his compensation. \n \n “(b)   Administration in the Case of Certain Qualified Pension or Profit-Sharing Plans, Etc., in Existence on June  27, 1974.— No salary reduction regulations may be issued by the Secretary of the Treasury in final form before  January 1, 1980 , with respect to an arrangement which was in existence on  June 27, 1974 , and which, on that date— “(1)  provided for contributions to an employee’s trust described in section 401(a), 403(a), or 405(a) of the Internal Revenue Code of 1986 [subsec. (a) of this section,  section 403(a) of this title , or  section 405(a) of this title ] which is exempt from tax under section 501(a) of such Code [ section 501(a) of this title ], or \n \n “(2)  was maintained as part of an arrangement under which an employee was permitted to elect to receive part of his compensation in one or more alternative forms if one of such forms results in the inclusion of amounts in income under the Internal Revenue Code of 1986 [this title]. \n \n \n “(c)   Administration of Law With Respect to Certain Plans.— “(1)   Administration in the case of plans described in subsection  (b).— Until salary reduction regulations have been issued in final form, the law with respect to plans or arrangements described in subsection (b) shall be administered— “(A)  without regard to the proposed salary reduction regulations (37 FR 25938) and without regard to any other proposed salary reduction regulations, and \n \n “(B)  in the manner in which such law was administered before  January 1, 1972 . \n \n \n “(2)   Administration in the case of qualified profit-sharing plans.— In the case of plans or arrangements described in subsection (b), in applying this section to the tax treatment of contributions to qualified profit-sharing plans where the contributed amounts are distributable only after a period of deferral, the law shall be administered in a manner consistent with— “(A)  Revenue Ruling 56–497 (1956—2 C.B. 284), \n \n “(B)  Revenue Ruling 63–180 (1963—2 C.B. 189), and \n \n “(C)  Revenue Ruling 68–89 (1968—1 C.B. 402). \n \n \n \n “(d)   Limitation on Retroactivity of Final Regulations.— In the case of any salary reduction regulations which become final after  December 31, 1979 — “(1)  for purposes of chapter 1 of the Internal Revenue Code of 1986 (relating to normal taxes and surtaxes), such regulations shall not apply before  January 1, 1980 ; and \n \n “(2)  for purposes of chapter 21 of such Code (relating to Federal Insurance Contributions Act) and for purposes of chapter 24 of such Code (relating to collection of income tax at source on wages), such regulations shall not apply before the day on which such regulations are issued in final form. \n \n \n “(e)   Salary Reduction Regulations Defined.— For purpose of this section, the term ‘salary reduction regulations’ means regulations dealing with the includibility in gross income (at the time of contribution) of amounts contributed to a plan which includes a trust that qualifies under section 401(a) [subsec. (a) of this section], or a plan described in section 403(a) or 405(a), including plans or arrangements described in subsection (b)(2), if the contribution is made under an arrangement under which the contribution will be made only if the employee elects to receive a reduction in his compensation or to forego an increase in his compensation, or under an arrangement under which the employee is permitted to elect to receive part of his compensation in one or more alternative forms (if one of such forms results in the inclusion of amounts in income under the Internal Revenue Code of 1986).”\n[ Pub. L. 95–615, §\u202f210(b) ,  Nov. 8, 1978 ,  92 Stat. 3109 , provided that:  “Section 5 of this Act [amending  section 2006 of Pub. L. 93–406 , set out above] shall not apply with respect to any type of plan for any period for which rules for that type of plan are provided by the Revenue Act of 1978 [ Pub. L. 95–600 , see Short Title of 1978 Amendment note set out under  section 1 of this title ].” \n]\nProvisions relating to inflation adjustment of items in sections 25B, 45A, 219, 401, 402, 404, 408, 408A, 409, 414 to 416, 430, 432, 457, and 664 of this title for certain years were contained in the following:\n2023—Internal Revenue Notice 2022–55.\n2022—Internal Revenue Notice 2021–61.\n2021—Internal Revenue Notice 2020–79.\n2020—Internal Revenue Notice 2019–59.\n2019—Internal Revenue Notice 2018–83.\n2018—Internal Revenue Notice 2017–64.\n2017—Internal Revenue Notice 2016–62.\n2016—Internal Revenue Notice 2015–75.\n2015—Internal Revenue Notice 2014–70.\n2014—Internal Revenue Notice 2013–73.\n2013—Internal Revenue Notice 2012–67.\n2012—Internal Revenue Notice 2011–90.\n2011—Internal Revenue Notice 2010–78.\n2010—Internal Revenue Notice 2009–94.\n2009—Internal Revenue Notice 2008–102.\n2008—Internal Revenue Notice 2007–87.\n2007—Internal Revenue Notice 2006–98.\n2006—Internal Revenue Notice 2005–75.\n2005—Internal Revenue Notice 2004–72.\n2004—Internal Revenue Notice 2003–73.\n2003—Internal Revenue Notice 2002–71.\n2002—Internal Revenue Notice 2001–84.\n2001—Internal Revenue Notice 2000–66.\n2000—Internal Revenue Notice 99–55.\n1999—Internal Revenue Notice 98–53.\n1998—Internal Revenue Notice 97–58.\n1997—Internal Revenue Notice 96–55.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Except as otherwise provided in this section, any amount actually distributed to any distributee by any employees’ trust described in section 401(a) which is exempt from tax under section 501(a) shall be taxable to the distributee, in the taxable year of the distributee in which distributed, under section 72 (relating to annuities).\nContributions to an employees’ trust made by an employer during a taxable year of the employer which ends with or within a taxable year of the trust for which the trust is not exempt from tax under section 501(a) shall be included in the gross income of the employee in accordance with section 83 (relating to property transferred in connection with performance of services), except that the value of the employee’s interest in the trust shall be substituted for the fair market value of the property for purposes of applying such section.\nThe amount actually distributed or made available to any distributee by any trust described in paragraph (1) shall be taxable to the distributee, in the taxable year in which so distributed or made available, under section 72 (relating to annuities), except that distributions of income of such trust before the annuity starting date (as defined in section 72(c)(4)) shall be included in the gross income of the employee without regard to section 72(e)(5) (relating to amounts not received as annuities).\nA beneficiary of any trust described in paragraph (1) shall not be considered the owner of any portion of such trust under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners).\nIf 1 of the reasons a trust is not exempt from tax under section 501(a) is the failure of the plan of which it is a part to meet the requirements of section 401(a)(26) or 410(b), then a highly compensated employee shall, in lieu of the amount determined under paragraph (1) or (2) include in gross income for the taxable year with or within which the taxable year of the trust ends an amount equal to the vested accrued benefit of such employee (other than the employee’s investment in the contract) as of the close of such taxable year of the trust.\nFor purposes of this paragraph, the term “highly compensated employee” has the meaning given such term by section 414(q).\nExcept as provided in subparagraphs (B) and (C), paragraph (1) shall not apply to any transfer of a distribution made after the 60th day following the day on which the distributee received the property distributed.\nThe Secretary may waive the 60-day requirement under subparagraph (A) where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.\nIn the case of a qualified plan loan offset amount, paragraph (1) shall not apply to any transfer of such amount made after the due date (including extensions) for filing the return of tax for the taxable year in which such amount is treated as distributed from a qualified employer plan.\nFor purposes of clause (ii), the term “plan loan offset amount” means the amount by which the participant’s accrued benefit under the plan is reduced in order to repay a loan from the plan.\nThis subparagraph shall not apply to any plan loan offset amount unless such plan loan offset amount relates to a loan to which section 72(p)(1) does not apply by reason of section 72(p)(2).\nFor purposes of this subsection, the term “qualified employer plan” has the meaning given such term by section 72(p)(4).\nFor purposes of this title, a transfer to an eligible retirement plan described in clause (i) or (ii) of paragraph (8)(B) resulting in any portion of a distribution being excluded from gross income under paragraph (1) shall be treated as a rollover contribution described in section 408(d)(3).\nThe transfer of an amount equal to any portion of the proceeds from the sale of property received in the distribution shall be treated as the transfer of property received in the distribution.\nThe excess of fair market value of property on sale over its fair market value on distribution shall be treated as property received in the distribution.\nNo gain or loss shall be recognized on any sale described in subparagraph (A) to the extent that an amount equal to the proceeds is transferred pursuant to paragraph (1).\nThe term “qualified trust” means an employees’ trust described in section 401(a) which is exempt from tax under section 501(a).\nIf any distribution attributable to an employee is paid to the spouse of the employee after the employee’s death, the preceding provisions of this subsection shall apply to such distribution in the same manner as if the spouse were the employee.\nUnless a plan described in clause (v) of paragraph (8)(B) agrees to separately account for amounts rolled into such plan from eligible retirement plans not described in such clause, the plan described in such clause may not accept transfers or rollovers from such retirement plans.\nFor purposes of this paragraph, to the extent provided in rules prescribed by the Secretary, a trust maintained for the benefit of one or more designated beneficiaries shall be treated in the same manner as a designated beneficiary.\nAny individual who received a qualified distribution may, during the applicable period, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in paragraph (8)(B)) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under subsection (c) or section 403(a)(4), 403(b)(8), or 408(d)(3), as the case may be.\nRules similar to the rules of clauses (ii) and (iii) of section 72(t)(11)(C) shall apply for purposes of this subsection.\nFor purposes of subsections (a), (b), and (c), a stock bonus, pension, or profit-sharing trust which would qualify for exemption from tax under section 501(a) except for the fact that it is a trust created or organized outside the United States shall be treated as if it were a trust exempt from tax under section 501(a).\nFor purposes of subsection (a) and section 72, an alternate payee who is the spouse or former spouse of the participant shall be treated as the distributee of any distribution or payment made to the alternate payee under a qualified domestic relations order (as defined in section 414(p)).\nIf any amount is paid or distributed to an alternate payee who is the spouse or former spouse of the participant by reason of any qualified domestic relations order (within the meaning of section 414(p)), subsection (c) shall apply to such distribution in the same manner as if such alternate payee were the employee.\nFor purposes of this title, contributions made by an employer on behalf of an employee to a trust which is a part of a qualified cash or deferred arrangement (as defined in section 401(k)(2)) or which is part of a salary reduction agreement under section 403(b) shall not be treated as distributed or made available to the employee nor as contributions made to the trust by the employee merely because the arrangement includes provisions under which the employee has an election whether the contribution will be made to the trust or received by the employee in cash.\nFor purposes of subsection (a) and section 72, in the case of a distribution other than a lump sum distribution, the amount actually distributed to any distributee from a trust described in subsection (a) shall not include any net unrealized appreciation in securities of the employer corporation attributable to amounts contributed by the employee (other than deductible employee contributions within the meaning of section 72( o )(5)). This subparagraph shall not apply to a distribution to which subsection (c) applies.\nFor purposes of subsection (a) and section 72, in the case of any lump sum distribution which includes securities of the employer corporation, there shall be excluded from gross income the net unrealized appreciation attributable to that part of the distribution which consists of securities of the employer corporation. In accordance with rules prescribed by the Secretary, a taxpayer may elect, on the return of tax on which a lump sum distribution is required to be included, not to have this subparagraph apply to such distribution.\nFor purposes of subparagraphs (A) and (B), net unrealized appreciation and the resulting adjustments to basis shall be determined in accordance with regulations prescribed by the Secretary.\nThe provisions of this paragraph shall be applied without regard to community property laws.\nThis paragraph shall not apply to amounts described in subparagraph (A) of section 72(m)(5) to the extent that section 72(m)(5) applies to such amounts.\nFor purposes of this paragraph, the balance to the credit of an employee shall not include any amount payable to an alternate payee under a qualified domestic relations order (within the meaning of section 414(p)).\nFor purposes of this paragraph, the balance to the credit of an employee under a defined contribution plan shall not include any amount transferred from such defined contribution plan to a qualified cost-of-living arrangement (within the meaning of section 415(k)(2)) under a defined benefit plan.\nIf any distribution or payment of the balance to the credit of an employee would be treated as a lump-sum distribution, then, for purposes of this paragraph, the payment under a qualified domestic relations order (within the meaning of section 414(p)) of the balance to the credit of an alternate payee who is the spouse or former spouse of the employee shall be treated as a lump-sum distribution. For purposes of this clause, the balance to the credit of the alternate payee shall not include any amount payable to the employee.\nThe term “securities” means only shares of stock and bonds or debentures issued by a corporation with interest coupons or in registered form.\nThe term “securities of the employer corporation” includes securities of a parent or subsidiary corporation (as defined in subsections (e) and (f) of section 424) of the employer corporation.\nAny amount transferred in a direct trustee-to-trustee transfer in accordance with section 401(a)(31) shall not be includible in gross income for the taxable year of such transfer.\nThe term “eligible rollover distribution” has the same meaning as when used in subsection (c) of this section, paragraph (4) of section 403(a), subparagraph (A) of section 403(b)(8), or subparagraph (A) of section 457(e)(16). Such term shall include any distribution to a designated beneficiary which would be treated as an eligible rollover distribution by reason of subsection (c)(11), or section 403(a)(4)(B), 403(b)(8)(B), or 457(e)(16)(B), if the requirements of subsection (c)(11) were satisfied.\nThe term “eligible retirement plan” has the meaning given such term by subsection (c)(8)(B).\nNotwithstanding subsections (e)(3) and (h)(1)(B), the elective deferrals of any individual for any taxable year shall be included in such individual’s gross income to the extent the amount of such deferrals for the taxable year exceeds the applicable dollar amount. The preceding sentence shall not apply to the portion of such excess as does not exceed the designated Roth contributions of the individual for the taxable year.\nFor purposes of subparagraph (A), the applicable dollar amount is $15,000.\nExcept to the extent provided under rules prescribed by the Secretary, notwithstanding the distribution of any portion of an excess deferral from a plan under subparagraph (A)(ii), such portion shall, for purposes of applying section 401(k)(3)(A)(ii), be treated as an employer contribution.\nIf a plan distributes only a portion of any excess deferral and income allocable thereto, such portion shall be treated as having been distributed ratably from the excess deferral and the income.\nIn the case of taxable years beginning after  December 31, 2006 , the Secretary shall adjust the $15,000 amount under paragraph (1)(B) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning  July 1, 2005 , and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.\nThis subsection shall be applied without regard to community property laws.\nFor purposes of applying section 72, any amount includible in gross income for any taxable year under this subsection but which is not distributed from the plan during such taxable year shall not be treated as investment in the contract.\nFor purposes of this paragraph, the term “qualified organization” means any educational organization, hospital, home health service agency, health and welfare service agency, church, or convention or association of churches. Such term includes any organization described in section 414(e)(3)(B)(ii). Terms used in this subparagraph shall have the same meaning as when used in section 415(c)(4) (as in effect before the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001).\nFor purposes of this paragraph, the term “qualified employee” means any employee who has completed 15 years of service with the qualified organization.\nFor purposes of this paragraph, the term “years of service” has the meaning given such term by section 403(b).\nExcept as provided in section 401(k)(3)(D)(ii), any matching contribution described in section 401(m)(4)(A) which is made on behalf of a self-employed individual (as defined in section 401(c)) shall not be treated as an elective employer contribution under a qualified cash or deferred arrangement (as defined in section 401(k)) for purposes of this title.\nAny amount paid or distributed out of an individual retirement plan pursuant to a simplified employee pension shall be included in gross income by the payee or distributee, as the case may be, in accordance with the provisions of section 408(d) (or section 408A(d) in the case of an individual retirement plan designated as a Roth IRA).\nFor purposes of this section, except as otherwise provided in subsection (e)(4)(D)(i), the term “employee” includes a self-employed individual (as defined in section 401(c)(1)(B)) and the employer of such individual shall be the person treated as his employer under section 401(c)(4).\nFor purposes of subsection (e)(4), in the case of any transaction to which this subsection applies, the determination of net unrealized appreciation shall be made without regard to such transaction.\nRules similar to the rules of paragraphs (1) and (3) of subsection (h) shall apply to contributions and distributions with respect to a simple retirement account under section 408(p).\nIn the case of an employee who is an eligible retired public safety officer who makes the election described in paragraph (6) with respect to any taxable year of such employee, gross income of such employee for such taxable year does not include any distribution from an eligible retirement plan maintained by the employer described in paragraph (4)(B) to the extent that the aggregate amount of such distributions does not exceed the amount paid by such employee for qualified health insurance premiums for such taxable year.\nThe amount which may be excluded from gross income for the taxable year by reason of paragraph (1) shall not exceed $3,000.\nAn amount shall be treated as a distribution for purposes of paragraph (1) only to the extent that such amount would be includible in gross income without regard to paragraph (1).\nNotwithstanding section 72, in determining the extent to which an amount is treated as a distribution for purposes of subparagraph (A), the aggregate amounts distributed from an eligible retirement plan in a taxable year (up to the amount excluded under paragraph (1)) shall be treated as includible in gross income (without regard to subparagraph (A)) to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts to the credit of the eligible public safety officer in all eligible retirement plans maintained by the employer described in paragraph (4)(B) were distributed during such taxable year and all such plans were treated as 1 contract for purposes of determining under section 72 the aggregate amount which would have been so includible. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.\nFor purposes of paragraph (1), the term “eligible retirement plan” means a governmental plan (within the meaning of section 414(d)) which is described in clause (iii), (iv), (v), or (vi) of subsection (c)(8)(B).\nThe term “eligible retired public safety officer” means an individual who, by reason of disability or attainment of normal retirement age, is separated from service as a public safety officer with the employer who maintains the eligible retirement plan from which distributions subject to paragraph (1) are made.\nThe term “public safety officer” shall have the same meaning given such term by section 1204(9)(A) of the Omnibus Crime Control and Safe Streets Act of 1968 ( 42 U.S.C. 3796b(9)(A) ), 1 1 \u202fSee References in Text note below.  as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013.\nThe term “qualified health insurance premiums” means premiums for coverage for the eligible retired public safety officer, his spouse, and dependents (as defined in section 152), by an accident or health plan or qualified long-term care insurance contract (as defined in section 7702B(b)).\nParagraph (1) shall apply to a distribution without regard to whether payment of the premiums is made directly to the provider of the accident or health plan or qualified long-term care insurance contract by deduction from a distribution from the eligible retirement plan, or is made to the employee.\nIn the case of a payment made to the employee as described in clause (i), the employee shall include with the return of tax for the taxable year in which the distribution is made an attestation that the distribution does not exceed the amount paid by the employee for qualified health insurance premiums for such taxable year.\nAll eligible retirement plans of an employer shall be treated as a single plan.\nFor purposes of paragraph (1), an election is described in this paragraph if the election is made by an employee after separation from service with respect to amounts not distributed from an eligible retirement plan to have amounts from such plan distributed in order to pay for qualified health insurance premiums.\nA plan shall not be treated as violating the requirements of section 401, or as engaging in a prohibited transaction for purposes of section 503(b), merely because it provides for an election with respect to amounts that are otherwise distributable under the plan or merely because of a distribution made pursuant to an election described in subparagraph (A).\nThe amounts excluded from gross income under paragraph (1) shall not be taken into account under section 213.\nThe amounts excluded from gross income under paragraph (1) shall not be taken into account under section 162( l ).\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nSection 415(c)(4) (as in effect before the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001), referred to in subsec. (g)(7)(B), means  section 415(c)(4) of this title  prior to its repeal by  Pub. L. 107–16, title VI, §\u202f632(a)(3)(E) ,  June 7, 2001 ,  115 Stat. 114 .\nSection 1204(9)(A) of the Omnibus Crime Control and Safe Streets Act of 1968 ( 42 U.S.C. 3796b(9)(A) ), as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013, referred to in subsec. ( l )(4)(C), means  section 1204(9)(A) of Pub. L. 90–351  prior to its amendment by  Pub. L. 112–239, div. A, title X, §\u202f1086(b)(1)(E)(v)(I) ,  Jan. 2, 2013 ,  126 Stat. 1967 .  Section 1204(9)(A) of Pub. L. 90–351  was classified to  section 3796b(9)(A) of Title 42 , The Public Health and Welfare, prior to editorial reclassification and renumbering as  section 10284(9)(A) of Title 34 , Crime Control and Law Enforcement.  Section 10284(9)(A) of Title 34  was redesignated as section 10284(14)(A) and amended by  Pub. L. 117–61, §\u202f3(1) , (7)(A),  Nov. 18, 2021 ,  135 Stat. 1475 , 1476.\n2022—Subsec. (c)(12).  Pub. L. 117–328, §\u202f301(b)(2) , added par. (12).\nSubsec. (c)(13).  Pub. L. 117–328, §\u202f331(b)(2) , added par. (13).\nSubsec. (g)(1)(C).  Pub. L. 117–328, §\u202f603(b)(1) , struck out subpar. (C). Text read as follows: “In addition to subparagraph (A), in the case of an eligible participant (as defined in section 414(v)), gross income shall not include elective deferrals in excess of the applicable dollar amount under subparagraph (B) to the extent that the amount of such elective deferrals does not exceed the applicable dollar amount under section 414(v)(2)(B)(i) for the taxable year (without regard to the treatment of the elective deferrals by an applicable employer plan under section 414(v)).”\nSubsec. (h)(1)(C).  Pub. L. 117–328, §\u202f601(b)(1) , added subpar. (C).\nSubsec. (h)(3).  Pub. L. 117–328, §\u202f601(b)(2) , inserted “(or section 408A(d) in the case of an individual retirement plan designated as a Roth IRA)” before period at end.\nSubsec. ( l )(5)(A).  Pub. L. 117–328, §\u202f328(a) , amended subpar. (A) generally. Prior to amendment, text read as follows: “Paragraph (1) shall only apply to a distribution if payment of the premiums is made directly to the provider of the accident or health plan or qualified long-term care insurance contract by deduction from a distribution from the eligible retirement plan.”\n2020—Subsec. (c)(4).  Pub. L. 116–136  substituted “2020” for “2009” in two places in concluding provisions.\n2018—Subsec. (i).  Pub. L. 115–141  substituted “subsection (e)(4)(D)(i)” for “subparagraph (A) of subsection (d)(4)”.\n2017—Subsec. (c)(3).  Pub. L. 115–97, §\u202f13613(b)(1) , substituted “Time limit on transfers” for “Transfer must be made within 60 days of receipt” in heading.\nSubsec. (c)(3)(A).  Pub. L. 115–97, §\u202f13613(b)(2) , substituted “subparagraphs (B) and (C)” for “subparagraph (B)”.\nSubsec. (c)(3)(C).  Pub. L. 115–97, §\u202f13613(a) , added subpar. (C).\n2014—Subsec. (g)(1)(B).  Pub. L. 113–295  substituted “is $15,000.” for “shall be the amount determined in accordance with the following table:” and struck out table at end listing applicable dollar amounts for fiscal years 2002 to 2006 and thereafter.\n2013—Subsec. ( l )(4)(C).  Pub. L. 112–239  inserted “,\u2000as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013” before period at end.\n2008—Subsec. (c)(4).  Pub. L. 110–458, §\u202f201(b) , inserted concluding provisions.\nSubsec. (c)(11)(A).  Pub. L. 110–458, §\u202f108(f)(1)(A) , inserted “described in paragraph (8)(B)(iii)” after “eligible retirement plan” in introductory provisions.\nSubsec. (c)(11)(A)(i).  Pub. L. 110–458, §\u202f108(f)(2)(B) , struck out “for purposes of this subsection” after “eligible rollover distribution”.\nSubsec. (c)(11)(B).  Pub. L. 110–458, §\u202f108(f)(1)(B) , struck out “trust” before “designated beneficiary”.\nSubsec. (f)(2)(A).  Pub. L. 110–458, §\u202f108(f)(2)(A) , inserted at end “Such term shall include any distribution to a designated beneficiary which would be treated as an eligible rollover distribution by reason of subsection (c)(11), or section 403(a)(4)(B), 403(b)(8)(B), or 457(e)(16)(B), if the requirements of subsection (c)(11) were satisfied.”\nSubsec. (g)(2)(A)(ii).  Pub. L. 110–458, §\u202f109(b)(3) , inserted “through the end of such taxable year” after “such amount”.\nSubsec. ( l )(1).  Pub. L. 110–458, §\u202f108(j)(1)(A) , inserted “maintained by the employer described in paragraph (4)(B)” after “an eligible retirement plan” and struck out “of the employee, his spouse, or dependents (as defined in section 152)” after “qualified health insurance premiums”.\nSubsec. ( l )(3)(B).  Pub. L. 110–458, §\u202f108(j)(2) , substituted “all amounts to the credit of the eligible public safety officer in all eligible retirement plans maintained by the employer described in paragraph (4)(B) were distributed during such taxable year and all such plans were treated as 1 contract for purposes of determining under section 72 the aggregate amount which would have been so includible” for “all amounts distributed from all eligible retirement plans were treated as 1 contract for purposes of determining the inclusion of such distribution under section 72”.\nSubsec. ( l )(4)(D).  Pub. L. 110–458, §\u202f108(j)(1)(B) , inserted “(as defined in section 152)” after “dependents” and substituted “health plan” for “health insurance plan”.\nSubsec. ( l )(5)(A).  Pub. L. 110–458, §\u202f108(j)(1)(C) , substituted “health plan” for “health insurance plan”.\n2007—Subsec. (g)(7)(A)(ii)(II).  Pub. L. 110–172  substituted “permitted for prior taxable years by reason of this paragraph” for “for prior taxable years”. Amendment was executed to subsec. (g)(7)(A)(ii) as amended by  Pub. L. 109–135, §\u202f407(a)(1) , as the probable intent of Congress, notwithstanding  Pub. L. 110–172, §\u202f8(b) , which provided that the amendment take effect as if included in the provisions of  Pub. L. 107–16  to which it relates. See 2006 Amendment note and Effective Date of 2007 Amendment note below.\n2006—Subsec. (c)(2)(A).  Pub. L. 109–280, §\u202f822(a) , which directed the amendment of section 402(c)(2)(A) by substituting “or to an annuity contract described in section 403(b) and such trust or contract provides for separate accounting” for “which is part of a plan which is a defined contribution plan and which agrees to separately account” and inserting “(and earnings thereon)” after “so transferred”, without specifying the act to be amended, was executed to this section, which is section 402(c)(2)(A) of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\nSubsec. (c)(11).  Pub. L. 109–280, §\u202f829(a)(1) , added par. (11).\nSubsec. ( l ).  Pub. L. 109–280, §\u202f845(a) , added subsec. ( l ).\n2005—Subsec. (g)(1)(A).  Pub. L. 109–135, §\u202f407(a)(2) , inserted “to” after “shall not apply”.\nSubsec. (g)(7)(A)(ii).  Pub. L. 109–135, §\u202f407(a)(1) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “$15,000 reduced by amounts not included in gross income for prior taxable years by reason of this paragraph, or”.\n2002—Subsec. (c)(2).  Pub. L. 107–147, §\u202f411(q)(2) , inserted at end: “In the case of a transfer described in subparagraph (A) or (B), the amount transferred shall be treated as consisting first of the portion of such distribution that is includible in gross income (determined without regard to paragraph (1)).”\nSubsec. (g)(1)(C).  Pub. L. 107–147, §\u202f411 ( o )(1), added subpar. (C).\nSubsec. (g)(7)(B).  Pub. L. 107–147, §\u202f411(p)(6) , substituted “2001).” for “2001.”\nSubsec. (h)(2)(A).  Pub. L. 107–147, §\u202f411 ( l )(3), substituted “25 percent” for “15 percent”.\n2001—Subsec. (c)(2).  Pub. L. 107–16, §\u202f643(a) , inserted at end “The preceding sentence shall not apply to such distribution to the extent—\n“(A) such portion is transferred in a direct trustee-to-trustee transfer to a qualified trust which is part of a plan which is a defined contribution plan and which agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible, or\n“(B) such portion is transferred to an eligible retirement plan described in clause (i) or (ii) of paragraph (8)(B).”\nSubsec. (c)(3).  Pub. L. 107–16, §\u202f644(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply to any transfer of a distribution made after the 60th day following the day on which the distributee received the property distributed.”\nSubsec. (c)(4)(C).  Pub. L. 107–16, §\u202f636(b)(1) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “any hardship distribution described in section 401(k)(2)(B)(i)(IV).”\nSubsec. (c)(8)(B).  Pub. L. 107–16, §\u202f617(c) , inserted concluding provisions.\nSubsec. (c)(8)(B)(v).  Pub. L. 107–16, §\u202f641(a)(2)(A) , added cl. (v).\nSubsec. (c)(8)(B)(vi).  Pub. L. 107–16, §\u202f641(b)(2) , added cl. (vi).\nSubsec. (c)(9).  Pub. L. 107–16, §\u202f641(d) , struck out before period at end “;\u2000except that a trust or plan described in clause (iii) or (iv) of paragraph (8)(B) shall not be treated as an eligible retirement plan with respect to such distribution”.\nSubsec. (c)(10).  Pub. L. 107–16, §\u202f641(a)(2)(B) , added par. (10).\nSubsec. (f)(1).  Pub. L. 107–16, §\u202f641(e)(5) , struck out “from an eligible retirement plan” after “rollover distribution” in introductory provisions.\nSubsec. (f)(1)(A).  Pub. L. 107–16, §\u202f657(b) , inserted before comma at end “and that the automatic distribution by direct transfer applies to certain distributions in accordance with section 401(a)(31)(B)”.\nPub. L. 107–16, §\u202f641(e)(6) , substituted “an eligible retirement plan” for “another eligible retirement plan”.\nSubsec. (f)(1)(B).  Pub. L. 107–16, §\u202f641(e)(6) , substituted “an eligible retirement plan” for “another eligible retirement plan”.\nSubsec. (f)(1)(E).  Pub. L. 107–16, §\u202f641(c) , added subpar. (E).\nSubsec. (f)(2)(A).  Pub. L. 107–16, §\u202f641(e)(4) , substituted “,\u2000paragraph (4) of section 403(a), subparagraph (A) of section 403(b)(8), or subparagraph (A) of section 457(e)(16)” for “or paragraph (4) of section 403(a)”.\nSubsec. (g)(1).  Pub. L. 107–16, §\u202f611(d)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Notwithstanding subsections (e)(3) and (h)(1)(B), the elective deferrals of any individual for any taxable year shall be included in such individual’s gross income to the extent the amount of such deferrals for the taxable year exceeds $7,000.”\nSubsec. (g)(1)(A).  Pub. L. 107–16, title VI, §\u202f617(b)(1) , inserted at end “The preceding sentence shall not apply the portion of such excess as does not exceed the designated Roth contributions of the individual for the taxable year.”\nSubsec. (g)(2)(A).  Pub. L. 107–16, title VI, §\u202f617(b)(2) , inserted “(or would be included but for the last sentence thereof)” after “paragraph (1)”.\nSubsec. (g)(4).  Pub. L. 107–16, §\u202f611(d)(3)(A) , redesignated par. (5) as (4) and struck out heading and text of former par. (4). Text read as follows: “The limitation under paragraph (1) shall be increased (but not to an amount in excess of $9,500) by the amount of any employer contributions for the taxable year described in paragraph (3)(C).”\nSubsec. (g)(5).  Pub. L. 107–16, §\u202f611(d)(3)(A) , redesignated par. (6) as (5). Former par. (5) redesignated (4).\nPub. L. 107–16, §\u202f611(d)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The Secretary shall adjust the $7,000 amount under paragraph (1) at the same time and in the same manner as under section 415(d); except that any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.”\nSubsec. (g)(6).  Pub. L. 107–16, §\u202f611(d)(3)(A) , redesignated par. (7) as (6). Former par. (6) redesignated (5).\nSubsec. (g)(7).  Pub. L. 107–16, §\u202f611(d)(3)(A) , redesignated par. (8) as (7).\nSubsec. (g)(7)(B).  Pub. L. 107–16, §\u202f632(a)(3)(G) , inserted “(as in effect before the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001” before period at end.\nSubsec. (g)(8), (9).  Pub. L. 107–16, §\u202f611(d)(3)(A) , redesignated par. (9) as (8). Former par. (8) redesignated (7).\n1998—Subsec. (c)(4)(C).  Pub. L. 105–206  added subpar. (C).\n1997—Subsec. (g)(9).  Pub. L. 105–34  added par. (9).\n1996—Subsec. (c)(10).  Pub. L. 104–188, §\u202f1401(b)(2) , struck out par. (10) which read as follows:\n“(10)  Denial of averaging for subsequent distributions .—If paragraph (1) applies to any distribution paid to any employee, paragraphs (1) and (3) of subsection (d) shall not apply to any distribution (paid after such distribution) of the balance to the credit of the employee under the plan under which the preceding distribution was made (or under any other plan which, under subsection (d)(4)(C), would be aggregated with such plan).”\nSubsec. (d).  Pub. L. 104–188, §\u202f1401(a) , amended subsec. (d) generally, substituting provisions relating to taxability of beneficiary of certain foreign situs trusts for former provisions relating to tax on lump sum distributions.\nSubsec. (e)(3).  Pub. L. 104–188, §\u202f1450(a)(2) , inserted “or which is part of a salary reduction agreement under section 403(b)” after “section 401(k)(2))”.\nSubsec. (e)(4)(D).  Pub. L. 104–188, §\u202f1401(b)(1) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows:\n“(D)  Lump sum distribution .—For purposes of this paragraph, the term ‘lump sum distribution’ has the meaning given such term by subsection (d)(4)(A) (without regard to subsection (d)(4)(F)).”\nSubsec. (e)(5).  Pub. L. 104–188, §\u202f1401(b)(13) , struck out par. (5) which read as follows:\n“(5)  Taxability of beneficiary of certain foreign situs trusts .—For purposes of subsections (a), (b), and (c), a stock bonus, pension, or profit-sharing trust which would qualify for exemption from tax under section 501(a) except for the fact that it is a trust created or organized outside the United States shall be treated as if it were a trust exempt from tax under section 501(a).”\nSubsec. (g)(3)(A).  Pub. L. 104–188, §\u202f1704(t)(68) , substituted “subsection (e)(3)” for “subsection (a)(8)”.\nSubsec. (g)(3)(D).  Pub. L. 104–188, §\u202f1421(b)(9)(B) , added subpar. (D).\nSubsec. (k).  Pub. L. 104–188, §\u202f1421(b)(3)(A) , added subsec. (k).\n1994—Subsec. (g)(5).  Pub. L. 103–465  inserted before period at end “;\u2000except that any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500”.\n1992—Subsecs. (a) to (d).  Pub. L. 102–318, §\u202f521(a) , amended subsecs. (a) to (d) generally, substituting present provisions for former provisions which in subsec. (a) related to taxability of beneficiaries of exempt trusts, in subsec. (b) related to taxability of beneficiaries of nonexempt trusts, in subsec. (c) related to taxability of beneficiaries of certain foreign situs trusts, and subsec. (d) which had been previously repealed.\nSubsec. (e).  Pub. L. 102–318, §\u202f521 , amended subsec. (e) generally, substituting provisions relating to other rules applicable to exempt trusts for provisions relating to tax on lump sum distributions.\nSubsec. (e)(6).  Pub. L. 102–318, §\u202f522(c)(1) , added par. (6).\nSubsec. (f).  Pub. L. 102–318, §\u202f521(a) , amended subsec. (f) generally, substituting present provisions for provisions requiring a different time when explanation was to be provided and a different content of explanation to be given and using different definitions for “eligible rollover distribution” and “eligible retirement plan”.\nSubsec. (g)(1).  Pub. L. 102–318, §\u202f521(b)(9) , substituted “subsections (e)(3)” for “subsections (a)(8)”.\nSubsec. (i).  Pub. L. 102–318, §\u202f521(b)(10) , substituted “subsection (d)(4)” for “subsection (e)(4)”.\nSubsec. (j)(1).  Pub. L. 102–318, §\u202f521(b)(11) , substituted “(e)(4)” for “(a)(1) or (e)(4)(J)”.\n1990—Subsec. (a)(3)(B).  Pub. L. 101–508, §\u202f11801(c)(9)(I)(i) , substituted “section 424” for “section 425”.\nSubsec. (a)(6)(B)(i).  Pub. L. 101–508, §\u202f11801(c)(9)(I)(ii) , substituted “section 424(f)” for “section 425(f)”.\n1989—Subsec. (e)(7).  Pub. L. 101–239, §\u202f7811(i)(13) , added par. (7).\nSubsec. (g)(3).  Pub. L. 101–239, §\u202f7811(g)(2) , inserted “involving a one-time irrevocable election” after “similar arrangement” in last sentence.\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1011A(b)(8)(A) , substituted “paragraph (4)” for “paragraphs (2) and (4)”.\nSubsec. (a)(4).  Pub. L. 100–647, §\u202f1011A(b)(8)(B) , struck out “or (2)” after “under paragraph (1)”.\nSubsec. (a)(5)(D)(i).  Pub. L. 100–647, §\u202f1011A(b)(4)(C) , inserted at end “Any distribution described in section 401(a)(28)(B)(ii) shall be treated as meeting the requirements of subclauses (I) and (II).”\nPub. L. 100–647, §\u202f1011A(b)(4)(A) , repealed amendment by  Pub. L. 99–514, §\u202f1122(e)(1) , which had amended cl. (i) generally, and provided that the Internal Revenue Code of 1986 shall be applied and administered as if such amendment had not been enacted. See 1986 Amendment note and Effective Date of 1988 Amendment note below.\nSubsec. (a)(5)(D)(i)(I).  Pub. L. 100–647, §\u202f1011A(b)(4)(B) , inserted “is payable as provided in clause (i), (iii), or (iv) of subsection (e)(4)(A) (without regard to the second sentence thereof) and” after “(I) such distribution”.\nSubsec. (a)(5)(D)(iii).  Pub. L. 100–647, §\u202f1011A(b)(4)(D) , struck out “10-year” after “Denial of” in heading.\nSubsec. (a)(5)(F).  Pub. L. 100–647, §\u202f1011A(a)(1) , substituted “resulting in any portion of a distribution being excluded from gross income under subparagraph (A)” for “described in subparagraph (A)”.\nSubsec. (a)(6)(C).  Pub. L. 100–647, §\u202f1011A(b)(8)(C) , struck out “paragraph (2) of subsection (a), and” after “paragraph (5)(A) applies,”.\nSubsec. (a)(6)(E)(ii).  Pub. L. 100–647, §\u202f1011A(b)(8)(D) , substituted “then paragraphs (1) and (3) of subsection (e) shall” for “then paragraph (2) of subsection (a), and paragraphs (1) and (3) of subsection (e), shall”.\nSubsec. (a)(6)(G).  Pub. L. 100–647, §\u202f1018(t)(8)(A) , redesignated subpar. (G), relating to treatment of potential future vesting, as (I).\nSubsec. (a)(6)(H)(ii).  Pub. L. 100–647, §\u202f1011A(b)(5) , inserted at end “A deposit shall not be treated as a frozen deposit unless on at least 1 day during the 60-day period described in paragraph (5)(C) (without regard to this subparagraph) such deposit is described in the preceding sentence.”\nSubsec. (a)(6)(I).  Pub. L. 100–647, §\u202f1018(t)(8)(A) , redesignated subpar. (G), relating to treatment of potential future vesting, as (I).\nSubsec. (b)(2)(A).  Pub. L. 100–647, §\u202f1011(h)(4) , added subpar. (A) and struck out former subpar. (A) which related to trust which is not exempt from tax under section 501(a) because plan fails to meet requirements of section 410(b).\nSubsec. (b)(2)(B).  Pub. L. 100–647, §\u202f1011(h)(4) , added subpar. (B) and struck out former subpar. (B) which related to failure of plan to meet requirements of section 410(b) for more than 1 taxable year.\nSubsec. (e)(1)(A).  Pub. L. 100–647, §\u202f1011A(b)(8)(E) , struck out “ordinary income portion of a” after “subparagraph (B)) on the”.\nSubsec. (e)(1)(B).  Pub. L. 100–647, §\u202f1011A(b)(10) , inserted at end “For purposes of the preceding sentence, in determining the amount of tax under section 1(c), section 1(g) shall be applied without regard to paragraph (2)(B) thereof.”\nPub. L. 100–647, §\u202f1018(u)(1) , made technical correction to directory language of  Pub. L. 99–514, §\u202f104(b)(5) . See 1986 Amendment note below.\nPub. L. 100–647, §\u202f1018(u)(6) , related to execution of amendment by  Pub. L. 99–514, §\u202f1122(b)(2)(B) , see 1986 Amendment note below.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1018(u)(7) , related to execution of amendment by  Pub. L. 99–514, §\u202f1122(b)(2)(C) , see 1986 Amendment note below.\nSubsec. (e)(4)(A).  Pub. L. 100–647, §\u202f1011A(b)(8)(F) , in concluding provisions, substituted “A” for “Except for purposes of subsection (a)(2) and section 403(a)(2), a”, and struck out “subsection (a)(2) of this section, and subsection (a)(2) of section 403,” before “the balance to”.\nSubsec. (e)(4)(B)(i).  Pub. L. 100–647, §\u202f1011A(b)(6) , substituted “employee” for “taxpayer”.\nSubsec. (e)(4)(I).  Pub. L. 100–647, §\u202f1011A(c)(9) , struck out “clause (ii) of” after “amounts described in”.\nSubsec. (e)(4)(J).  Pub. L. 100–647, §\u202f1011A(b)(7) , amended last sentence generally. Prior to amendment, last sentence read as follows: “To the extent provided by the Secretary, a taxpayer may elect before any distribution not to have this paragraph apply with respect to such distribution.”\nSubsec. (e)(4)(L).  Pub. L. 100–647, §\u202f1011A(b)(8)(G) , struck out subpar. (L) which related to election to treat pre-1974 participation as post-1973 participation.\nSubsec. (e)(4)(M).  Pub. L. 100–647, §\u202f1011A(b)(8)(H) , struck out “,\u2000subsection (a)(2) of this section, and section 403(a)(2)” after “of this subsection”.\nSubsec. (e)(4)(O).  Pub. L. 100–647, §\u202f6068(a) , added subpar. (O).\nSubsec. (e)(5).  Pub. L. 100–647, §\u202f1011A(b)(8)(I) , struck out “and paragraph (2) of subsection (a)” after “of this subsection”.\nSubsec. (e)(6)(C).  Pub. L. 100–647, §\u202f1011A(b)(8)(J) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “For purposes of this paragraph, special lump sum treatment applies to any distribution if any portion of such distribution—\n“(i) is taxed under this subsection by reason of an election under paragraph (4)(B), or\n“(ii) is treated as long-term capital gain under subsection (a)(2) of this section or section 403(a)(2).”\nSubsec. (f)(1).  Pub. L. 100–647, §\u202f1018(t)(8)(C) , substituted “an eligible” for “a eligible”.\nSubsec. (g).  Pub. L. 100–647, §\u202f1011(c)(6)(B) , redesignated subsec. (g), relating to effect of disposition of stock by plan on net unrealized appreciation, as (j).\nPub. L. 100–647, §\u202f1011(c)(6)(A) , redesignated subsec. (g), relating to treatment of self-employed individuals, as (i).\nSubsec. (g)(2).  Pub. L. 100–647, §\u202f1011(c)(2) , substituted “Distribution” for “Required distribution” in heading.\nSubsec. (g)(2)(C).  Pub. L. 100–647, §\u202f1011(c)(1) , struck out “(and no tax shall be imposed under section 72(t))” after “in gross income”, in cl. (i), substituted “such income is distributed” for “such excess deferral is made” in cl. (ii), and inserted at end “No tax shall be imposed under section 72(t) on any distribution described in the preceding sentence.”\nSubsec. (g)(2)(D).  Pub. L. 100–647, §\u202f1011(c)(3) , added subpar. (D).\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1011(c)(4) , substituted “this subsection” for “this paragraph”.\nPub. L. 100–647, §\u202f1011(c)(11) , inserted at end “An employer contribution shall not be treated as an elective deferral described in subparagraph (C) if under the salary reduction agreement such contribution is made pursuant to a one-time irrevocable election made by the employee at the time of initial eligibility to participate in the agreement or is made pursuant to a similar arrangement specified in regulations.”\nSubsec. (g)(8)(A)(iii).  Pub. L. 100–647, §\u202f1011(c)(5)(A) , inserted “(determined in the manner prescribed by the Secretary)” after “prior taxable years”.\nSubsec. (g)(8)(D).  Pub. L. 100–647, §\u202f1011(c)(5)(B) , added subpar. (D).\nSubsec. (i).  Pub. L. 100–647, §\u202f1011(c)(6)(A) , redesignated subsec. (g), relating to treatment of self-employed individuals, as (i).\nSubsec. (j).  Pub. L. 100–647, §\u202f1011(c)(6)(B) , redesignated subsec. (g), relating to effect of disposition of stock by plan on net unrealized appreciation, as (j).\n1986—Subsec. (a)(2).  Pub. L. 99–514, §\u202f1122(b)(1)(A) , struck out par. (2) relating to capital gains treatment for portion of lump sum distribution.\nSubsec. (a)(5)(D)(i).  Pub. L. 99–514, §\u202f1122(e)(1) , amended cl. (i) generally, to read as follows: “Subparagraph (A) shall apply to a partial distribution only if the employee elects to have subparagraph (A) apply to such distribution and such distribution would be a lump sum distribution if subsection (e)(4)(A) were applied—\n“(I) by substituting ‘50 percent of the balance to the credit of an employee’ for ‘the balance to the credit of an employee’,\n“(II) without regard to clause (ii) thereof, the second sentence thereof, and subparagraph (B) of subsection (e)(4).\nAny distribution described in section 401(a)(28)(B)(ii) shall be treated as meeting the requirements of this clause.” This amendment was repealed by  Pub. L. 100–647, §\u202f1011A(b)(4)(A) . See 1988 Amendment note above.\nPub. L. 99–514, §\u202f1852(b)(2) , inserted at end “For purposes of subclause (I), the balance to the credit of the employee shall not include any accumulated deductible employee contributions (within the meaning of section 72( o )(5)).”\nSubsec. (a)(5)(D)(ii).  Pub. L. 99–514, §\u202f1852(b)(5) , substituted “a trust or plan described in subclause (III) or (IV)” for “a plan described in subclause (IV) or (V)”.\nSubsec. (a)(5)(D)(iii).  Pub. L. 99–514, §\u202f1122(b)(2)(A) , struck out “and capital gains treatment” in heading and amended text generally. Prior to amendment, cl. (iii) read as follows: “If an election under clause (i) is made with respect to any partial distribution paid to any employee—\n“(I) paragraph (2) of this subsection,\n“(II) paragraphs (1) and (3) of subsection (e), and\n“(III) paragraph (2) of section 403(a),\nshall not apply to any distribution (paid after such partial distribution) of the balance to the credit of such employee under the plan under which such partial distribution was made (or under any other plan which, under subsection (e)(4)(C), would be aggregated with such plan).”\nSubsec. (a)(5)(E)(v).  Pub. L. 99–514, §\u202f1852(b)(1) , substituted “of all or any portion of” for “of any portion of”.\nSubsec. (a)(5)(F).  Pub. L. 99–514, §\u202f1121(c)(1) , amended subpar. (F) generally. Prior to amendment, subpar. (F) heading read “Special rules” and text read as follows:\n“(i) Transfer treated as rollover contribution under section 408\n“For purposes of this title, a transfer resulting in any portion of a distribution being excluded from gross income under subparagraph (A) to an eligible retirement plan described in subclause (I) or (II) of subparagraph (E)(iv) shall be treated as a rollover contribution described in section 408(d)(3).\n“(ii) 5-percent owners\n“An eligible retirement plan described in subclause (III) or (IV) of subparagraph (E)(iv) shall not be treated as an eligible retirement plan for the transfer of a distribution if the employee is a 5-percent owner at the time such distribution is made. For purposes of the preceding sentence, the term ‘5-percent owner’ means any individual who is a 5-percent owner (as defined in section 416(i)(1)(B)) at any time during the 5 plan years preceding the plan year in which the distribution is made.”\nPub. L. 99–514, §\u202f1852(b)(6) , in cl. (i) substituted “a transfer resulting in any portion of a distribution being excluded from gross income under subparagraph (A)” for “a transfer described in subparagraph (A)”.\nPub. L. 99–514, §\u202f1875(c)(1)(A) , amended cl. (ii) generally. Prior to amendment, cl. (ii), key employees, read as follows: “An eligible retirement plan described in subclause (III) or (IV) of subparagraph (E)(iv) shall not be treated as an eligible retirement plan for the transfer of a distribution if any part of the distribution is attributable to contributions made on behalf of the employee while he was a key employee in a top-heavy plan. For purposes of the preceding sentence, the terms ‘key employee’ and ‘top-heavy plan’ have the same respective meanings as when used in section 416.”\nSubsec. (a)(5)(G).  Pub. L. 99–514, §\u202f1852(a)(5)(A) , added subpar. (G).\nSubsec. (a)(6)(D)(v).  Pub. L. 99–514, §\u202f1852(b)(7) , substituted “(7)” for “(7)(B)”.\nSubsec. (a)(6)(F).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(i) , substituted “paragraph (5)” for “paragraph (5)(A)”.\nSubsec. (a)(6)(G).  Pub. L. 99–514, §\u202f1898(a)(3) , added subpar. (G) relating to treatment of potential future vesting.\nPub. L. 99–272  added subpar. (G) relating to payments from certain pension plan termination trusts.\nSubsec. (a)(6)(H).  Pub. L. 99–514, §\u202f1122(e)(2)(A) , added subpar. (H).\nSubsec. (a)(7).  Pub. L. 99–514, §\u202f1852(b)(4) , inserted “;\u2000except that a trust or plan described in subclause (III) or (IV) of paragraph (5)(E)(iv) shall not be treated as an eligible retirement plan with respect to such distribution” after “the spouse were the employee”.\nSubsec. (a)(9).  Pub. L. 99–514, §\u202f1898(c)(1)(A) , substituted “any alternate payee who is the spouse or former spouse of the participant shall be treated” for “the alternate payee shall be treated”.\nSubsec. (b).  Pub. L. 99–514, §\u202f1112(c) , designated existing provisions as par. (1), inserted par. (1) heading, and added par. (2).\nPub. L. 99–514, §\u202f1852(c)(5) , substituted “section 72(e)(5)” for “section 72(e)(1)”.\nSubsec. (e)(1)(B).  Pub. L. 99–514, §\u202f1122(b)(2)(B) , and  Pub. L. 100–647, §\u202f1018(u)(6) , redesignated subpar. (C) as (B), substituted “Amount of tax” for “Initial separate tax” in heading and “The amount of tax imposed by subparagraph (A)” for “The initial separate tax”, and struck out former subpar. (B) which related to computation of tax on lump sum distributions.\nPub. L. 99–514, §\u202f104(b)(5) , as amended by  Pub. L. 100–647, §\u202f1018(u)(1) , struck out “the zero bracket amount applicable to such individual for the taxable year plus” after “amount equal to”.\nPub. L. 99–514, §\u202f1122(a)(2)(A) , (B), substituted “5” for “10” and “⅕” for “one-tenth”.\nSubsec. (e)(1)(C) to (E).  Pub. L. 99–514, §\u202f1122(b)(2)(B)(i) , redesignated subpars. (C) to (E) as (B) to (D), respectively.\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f1122(b)(2)(C) , and Pub. L. 100-647, §\u202f1018(u)(7), substituted “total taxable amount” for “ordinary income portion”.\nSubsec. (e)(4)(B).  Pub. L. 99–514, §\u202f1122(a)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of this section and section 403, no amount which is not an annuity contract may be treated as a lump sum distribution under subparagraph (A) unless the taxpayer elects for the taxable year to have all such amounts received during such year so treated at the time and in the manner provided under regulations prescribed by the Secretary. Not more than one election may be made under this subparagraph with respect to any individual after such individual has attained age 59½. No election may be made under this subparagraph by any taxpayer other than an individual, an estate, or a trust. In the case of a lump sum distribution made with respect to an employee to two or more trusts, the election under this subparagraph shall be made by the personal representative of the employee.”\nSubsec. (e)(4)(E).  Pub. L. 99–514, §\u202f1122(b)(2)(D) , struck out subpar. (E) defining “ordinary income portion” with respect to a lump sum distribution.\nSubsec. (e)(4)(F).  Pub. L. 99–514, §\u202f1852(b)(3)(B) , struck out subpar. (F) defining “employee”. See subsec. (g) of this section relating to treatment of self-employed individuals.\nSubsec. (e)(4)(H).  Pub. L. 99–514, §\u202f1122(b)(2)(E) , struck out “(but not for purposes of subsection (a)(2) or section 403(a)(2)(A))” after “For purposes of this subsection”.\nSubsec. (e)(4)(J).  Pub. L. 99–514, §\u202f1122(g) , inserted at end “To the extent provided by the Secretary, a taxpayer may elect before any distribution not to have this paragraph apply with respect to such distribution.”\nSubsec. (e)(4)(N).  Pub. L. 99–514, §\u202f1106(c)(2) , added subpar. (N).\nSubsec. (e)(6).  Pub. L. 99–514, §\u202f1898(a)(2) , added par. (6).\nSubsec. (f)(1).  Pub. L. 99–514, §\u202f1898(e)(1) , substituted “eligible rollover distribution” for “qualifying rollover distribution”.\nSubsec. (f)(2).  Pub. L. 99–514, §\u202f1898(e)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of this subsection, the terms ‘qualifying rollover distribution’ and ‘eligible retirement plan’ have the respective meanings given such terms by subsection (a)(5)(E).”\nSubsec. (g).  Pub. L. 99–514, §\u202f1854(f)(2) , added subsec. (g) relating to effect of disposition of stock by plan on net unrealized appreciation.\nPub. L. 99–514, §\u202f1852(b)(3)(A) , added subsec. (g) relating to treatment of self-employed individuals.\nPub. L. 99–514, §\u202f1105(a) , added subsec. (g) relating to limitation on exclusion for elective deferrals.\nSubsec. (h).  Pub. L. 99–514, §\u202f1108(b) , added subsec. (h).\n1984—Subsec. (a)(2).  Pub. L. 98–369, §\u202f1001(b)(3) , substituted “6 months” for “1 year”.\nSubsec. (a)(5)(A)(i).  Pub. L. 98–369, §\u202f522(a)(1) , substituted “any portion of the balance to the credit of an employee in a qualified trust is paid to him” for “the balance to the credit of an employee in a qualified trust is paid to him in a qualifying rollover distribution”.\nSubsec. (a)(5)(B).  Pub. L. 98–369, §\u202f522(d)(1)(A) , (2), substituted “qualified total distribution” for “qualifying rollover distribution”, and inserted “In the case of any partial distribution, the maximum amount transferred to which subparagraph (A) applies shall not exceed the portion of such distribution which is includible in gross income (determined without regard to subparagraph (A)).”\nSubsec. (a)(5)(D).  Pub. L. 98–369, §\u202f522(b) , added subpar. (D). Former subpar. (D) redesignated (E).\nSubsec. (a)(5)(D)(iv)(III)–(V).  Pub. L. 98–369, §\u202f491(d)(9) , struck out subcl. (III), which included a retirement bond described in section 409 within term “eligible retirement plan” and redesignated former subcls. (IV) and (V) and (III) and (IV), respectively.\nSubsec. (a)(5)(E).  Pub. L. 98–369, §\u202f522(b) , redesignated subpar. (D) as (E). Former subpar. (E) redesignated (F).\nSubsec. (a)(5)(E)(i).  Pub. L. 98–369, §\u202f522(d)(1)(B) , substituted “qualified total distribution” for “qualifying rollover distribution” in heading and text.\nSubsec. (a)(5)(E)(ii)(II).  Pub. L. 98–369, §\u202f522(d)(3) , substituted “gross income (determined without regard to this paragraph)” for “gross income”.\nSubsec. (a)(5)(E)(v).  Pub. L. 98–369, §\u202f522(d)(4) , substituted provision dealing with partial distribution for provision dealing with rollover of partial distributions of deductible employee contributions permitted.\nSubsec. (a)(5)(F).  Pub. L. 98–369, §\u202f522(b) , redesignated subpar. (E) as (F).\nSubsec. (a)(5)(F)(i).  Pub. L. 98–369, §\u202f522(d)(5) , substituted “subparagraph (E)(iv)” for “subparagraph (D)(iv)”.\nPub. L. 98–369, §\u202f491(d)(10) , substituted “or (II)” for “,\u2000(II), or (III)”.\nSubsec. (a)(5)(F)(ii).  Pub. L. 98–369, §\u202f522(d)(5) , substituted “subparagraph (E)(iv)” for “subparagraph (D)(iv)”.\nPub. L. 98–369, §\u202f491(d)(11) , substituted “(III) or (IV)” for “(IV) and (V)”.\nPub. L. 98–369, §\u202f713(c)(3) , substituted “Key employees” for “Self-employed individuals and owner-employees” in heading and “attributable to contributions made on behalf of the employee while he was a key employee in a top-heavy plan” for “attributable to a trust forming part of a plan under which the employee was an employee within the meaning of section 401(c)(1) at the time contributions were made on his behalf under the plan” in text, and inserted sentence adopting the meaning of “key employee” and “top-heavy plan” used in section 416.\nSubsec. (a)(6)(A), (B).  Pub. L. 98–369, §\u202f522(d)(6) , substituted “paragraph (5)(E)(i)” for “paragraph (5)(D)(i)”.\nSubsec. (a)(6)(D)(iii), (iv).  Pub. L. 98–369, §\u202f522(d)(7) , substituted “employee contributions (or, in the case of a partial distribution, the amount not includible in gross income)” for “employee contributions”.\nSubsec. (a)(6)(E)(i).  Pub. L. 98–369, §\u202f522(d)(1)(C) , (8), substituted “qualified total distribution” for “qualifying rollover distribution”, and “paragraph (5)(D) or (5)(E)(i)(II)” for “paragraph (5)(D)(i)(II)”.\nSubsec. (a)(6)(F).  Pub. L. 98–397, §\u202f204(c)(3) , added subpar. (F).\nSubsec. (a)(7).  Pub. L. 98–369, §\u202f522(c) , substituted provisions relating to rollover where spouse receives distributions after death of employee for provisions dealing with rollover where spouse receives lump-sum distribution at death of employee.\nSubsec. (a)(9).  Pub. L. 98–397, §\u202f204(c)(1) , added par. (9).\nSubsec. (e)(4)(L).  Pub. L. 98–369, §\u202f1001(b)(3) , substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (e)(4)(M).  Pub. L. 98–397, §\u202f204(c)(4) , added subpar. (M).\nSubsec. (e)(5).  Pub. L. 98–369, §\u202f491(c)(2) , added par. (5).\nSubsec. (f).  Pub. L. 98–397, §\u202f207(a) , added subsec. (f).\n1983—Subsec. (a)(5)(D)(v).  Pub. L. 97–448, §\u202f103(c)(8)(A) , added cl. (v).\nSubsec. (e)(1)(C).  Pub. L. 97–448, §\u202f101(b) , substituted “the zero bracket amount applicable to such an individual for the taxable year” for “$2,300”.\nSubsec. (e)(4)(A).  Pub. L. 97–448, §\u202f103(c)(7) , substituted “this subsection, subsection (a)(2) of this section, and subsection (a)(2) of section 403” for “this section and section 403” in last sentence.\nSubsec. (e)(4)(J).  Pub. L. 97–448, §\u202f103(c)(12)(D) , amended  Pub. L. 97–34, §\u202f311(c)(2) [see 1981 Amendment note below] , by substituting “section 72( o )(5)” for “section 77( o )(5)” in last sentence of subpar. (j).\n1981—Subsec. (a)(1).  Pub. L. 97–34, §\u202f311(c)(1) , inserted “(other than deductible employee contributions within the meaning of section 72( o )(5))”.\nPub. L. 97–34, §\u202f314(c)(1) , struck out “or made available” after “distributed” in three places.\nSubsec. (a)(5).  Pub. L. 97–34, §\u202f311(b)(3)(A) , inserted “(other than accumulated deductible employee contributions within the meaning of section 72( o )(5))” after “contributions” in subpar. (B) and added subcl. (III) in subpar. (D).\nSubsec. (e)(4).  Pub. L. 97–34, §\u202f311(b)(2) , (c)(2), added to subpar. (A) provision that for purposes of sections 402 and 403, the balance to the credit of the employee does not include the accumulated deductible employee contributions under the plan (within the meaning of section 72( o )(5)), and added subpar. (J) provision making subpar. (J) inapplicable to distributions of accumulated deductible employee contributions (within the meaning of section 77( o )(5)). See 1983 Amendment note above.\n1980—Subsec. (a)(6)(D)(iii).  Pub. L. 96–222, §\u202f101(a)(14)(E)(i) , substituted “may designate” for “many designate”.\nSubsec. (a)(6)(E).  Pub. L. 96–608  added subpar. (E).\nSubsec. (a)(7)(A)(i).  Pub. L. 96–222, §\u202f101(a)(14)(C) , substituted “qualifying rollover distribution attributable to an employee is paid to the spouse of the employee after” for “lump-sum distribution from a qualified trust is paid to the spouse of the employee on account of”.\n1978—Subsec. (a)(5).  Pub. L. 95–458, §\u202f4(a) , among other changes, substituted provision permitting tax-free treatment for any portion of a lump sum distribution from a qualified retirement plan which is deposited in an individual retirement account or another qualifying plan for provision which required transfer of all such property received.\nSubsec. (a)(5)(D)(i)(II).  Pub. L. 95–600, §\u202f157(h)(1) , substituted “subparagraphs (B) and (H) of subsection (e)(4)” for “subsection (e)(4)(B)”.\nSubsec. (a)(6).  Pub. L. 95–458, §\u202f4(c) , in provision preceding subpar. (A) struck out “For purposes of paragraph (5)(A)(i)”, in subpar. (A) substituted “For purposes of paragraph (5)(D)(i), a complete” for “A complete”, in subpar. (B) inserted “For purposes of paragraph (5)(D)(i)—” after “assets.—” in provision preceding cl. (i), and added subpar. (C).\nSubsec. (a)(6)(D).  Pub. L. 95–600, §\u202f157(f)(1) , added subpar. (D).\nSubsec. (a)(7).  Pub. L. 95–600, §\u202f157(g)(1) , added par. (7).\nSubsec. (a)(8).  Pub. L. 95–600, §\u202f135(b) , added par. (8).\nSubsec. (e)(1)(C).  Pub. L. 95–600, §\u202f101(d)(1) , substituted “$2,300” for “$2,200”.\n1977—Subsec. (e)(1)(C).  Pub. L. 95–30  substituted “amount equal to $2,200 plus one-tenth of the excess of” for “amount equal to one-tenth of the excess of” in provisions preceding cl. (i).\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(2).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455 , §§\u202f1402(b)(1)(C), 1906(b)(13)(A), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977 and struck out “or his delegate” after “Secretary”.\nSubsec. (a)(4).  Pub. L. 94–455, §\u202f1901(a)(57)(A) , substituted “basic pay” for “basic salary”, “civil service retirement laws” for “Civil Service Retirement Act ( 5 U.S.C. 2251 )”, and “ section 8331(3) of title 5 , United States Code” for “section 1(d) of such Act”.\nSubsec. (a)(5).  Pub. L. 94–267, §\u202f1(a)(2) , substituted “a payment” for “the lump-sum distribution”.\nSubsec. (a)(5)(A).  Pub. L. 94–267, §\u202f1(a)(1) , restructured provision by adding cl. (i) and designating existing provision as cl. (ii).\nSubsec. (a)(6).  Pub. L. 94–267, §\u202f1(a)(3) , added par. (6).\nSubsec. (a)(6)(A).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(a)(57)(B) , struck out subsec. (d) which related to certain trust agreements made before  Oct. 21, 1942 .\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(4)(A).  Pub. L. 94–455, §\u202f1901(a)(57)(C)(i) , substituted “Except for purposes of subsection (a)(2) and section 403(a)(2)” for “For purposes of this subparagraph”.\nSubsec. (e)(4)(B), (J).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(4)(L).  Pub. L. 94–455, §\u202f1402(b)(2) , substituted “1 year” for “9 months”.\nPub. L. 94–455 , §§\u202f1402(b)(1)(C), 1512(a), added subsec. (e)(4)(L) to be applicable to distributions and payments after  Dec. 31, 1975 , in taxable years beginning after  Dec. 31, 1975 , and provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\n1974—Subsec. (a)(2).  Pub. L. 93–406, §\u202f2005(b)(1) , substituted provisions covering capital gains treatment of portions of lump sum distributions determined through the application of a fraction formula susceptible of producing a phaseout of capital gains treatment for provisions covering capital gains treatment of portions of lump sum distributions determined on a fixed formula.\nSubsec. (a)(3)(C).  Pub. L. 93–406, §\u202f2005(c)(1) , struck out subsec. (a)(3)(C) which defined “total distribution payable”.\nSubsec. (a)(5).  Pub. L. 93–406 , §§\u202f2002(g)(5), 2005(c)(2), substituted provisions covering rollover amounts for provisions covering limitation on capital gains treatment.\nSubsec. (e).  Pub. L. 93–406, §\u202f2005(a) , substituted provisions covering tax on lump sum distributions for provisions covering plan termination distributions made after  Dec. 31, 1953 , and before  Jan. 1, 1955 .\n1969—Subsec. (a)(5).  Pub. L. 91–172, §\u202f515(a)(1) , added par. (5).\nSubsec. (b).  Pub. L. 91–172, §\u202f321(b)(1) , substituted provision for inclusion of contributions made by an employer to a nonexempt trust in the “gross income of the employee in accordance with section 83 (relating to property transferred in connection with performance of services), except that the value of the employee’s interest in the trust shall be substituted for the fair market value of the property for purposes of applying such section” for prior provision for inclusion in the “gross income of an employee for the taxable year in which the contribution is made to the trust in the case of an employee whose beneficial interest in such contribution is nonforfeitable at the time the contribution is made”, and provided that distributions of income of such trust before the annuity starting date (as defined in section 72(c)(4)) shall be included in the gross income of the employee without regard to section 72(e)(1) (relating to amount not received as annuities) and that a beneficiary of any such trust shall not be considered the owner of any portion of such trust under subpart E of part I of subch. J (relating to grantors and others treated as substantial owners).\n1964—Subsec. (a)(1).  Pub. L. 88–272, §\u202f232(e)(1) , struck out “except that section 72(e)(3) shall not apply” after “(relating to annuities)”.\nSubsec. (a)(3)(B).  Pub. L. 88–272, §\u202f221(c)(1) , substituted “subsections (e) and (f) of section 425” for “section 421(d)(2) and (3)”.\nSubsecs. (b), (d).  Pub. L. 88–272, §\u202f232(e)(2) , (3), struck out “except that section 72(e)(3) shall not apply” after “(relating to annuities)”.\n1962—Subsec. (a)(2).  Pub. L. 87–792  inserted sentence providing that this paragraph shall not apply to distributions paid to any distributee to the extent such distributions are attributable to contributions made on behalf of the employee while he was an employee within the meaning of section 401(c)(1).\n1960—Subsec. (a)(1).  Pub. L. 86–437, §\u202f2(a) , substituted “paragraphs (2) and (4)” for “paragraph (2)”.\nSubsec. (a)(4).  Pub. L. 86–437, §\u202f1 , added par. (4).\nPub. L. 117–328, div. T, title III, §\u202f301(c) ,  Dec. 29, 2022 ,  136 Stat. 5338 , provided that:  “The amendments made by this section [amending this section,  section 414 of this title , and  section 1056 of Title 29 , Labor] shall apply as of the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f328(b) ,  Dec. 29, 2022 ,  136 Stat. 5360 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nAmendment by  section 331(b)(2) of Pub. L. 117–328  applicable to recontributions of withdrawals for home purchases with respect to disasters the incident period (as defined in  section 72(t)(11)(F)(ii) of this title ) for which begins on or after the date which is 30 days after  Dec. 27, 2020 , see  section 331(b)(3) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nPub. L. 117–328, div. T, title VI, §\u202f601(e) ,  Dec. 29, 2022 ,  136 Stat. 5390 , provided that:  “The amendments made by this section [amending this section and sections 408 and 408A of this title] shall apply to taxable years beginning after  December 31, 2022 .”\nPub. L. 117–328, div. T, title VI, §\u202f603(c) ,  Dec. 29, 2022 ,  136 Stat. 5392 , provided that:  “The amendments made by this section [amending this section and sections 414 and 457 of this title] shall apply to taxable years beginning after  December 31, 2023 .”\nAmendment by  Pub. L. 116–136  applicable for calendar years beginning after  Dec. 31, 2019 , with additional provisions relating to plan or contract amendments, see  section 2203(c) of Pub. L. 116–136 , set out as a note under  section 401 of this title .\nPub. L. 115–97, title I, §\u202f13613(c) ,  Dec. 22, 2017 ,  131 Stat. 2166 , provided that:  “The amendments made by this section [amending this section] shall apply to plan loan offset amounts which are treated as distributed in taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 112–239  effective  Jan. 2, 2013 , and applicable to matters pending on  Jan. 2, 2013 , or filed or accruing after that date, with certain exceptions, see  section 1086(d) of Pub. L. 112–239 , set out as a note under  section 10251 of Title 34 , Crime Control and Law Enforcement.\nPub. L. 110–458, title I, §\u202f108(f)(2)(C) ,  Dec. 23, 2008 ,  122 Stat. 5109 , provided that:  “The amendments made by this paragraph [amending this section] shall apply with respect to plan years beginning after  December 31, 2009 .”\nAmendment by sections 108(f)(1)–(2)(B), (j) and 109(b)(3) of  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nAmendment by  section 201(b) of Pub. L. 110–458  applicable to calendar years beginning after  December 31, 2008 , with provisions relating to pension plan or contract amendments, see  section 201(c) of Pub. L. 110–458 , set out as a note under  section 401 of this title .\nPub. L. 110–172, §\u202f8(b) ,  Dec. 29, 2007 ,  121 Stat. 2484 , provided that:  “The amendments made by this section [amending this section and  section 3121 of this title ] shall take effect as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 ] to which they relate.”\nPub. L. 109–280, title VIII, §\u202f822(b) ,  Aug. 17, 2006 ,  120 Stat. 998 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–280, title VIII, §\u202f829(b) ,  Aug. 17, 2006 ,  120 Stat. 1002 , provided that:  “The amendments made by this section [amending this section and sections 403 and 457 of this title] shall apply to distributions after  December 31, 2006 .”\nPub. L. 109–280, title VIII, §\u202f845(c) ,  Aug. 17, 2006 ,  120 Stat. 1015 , provided that:  “The amendments made by this section [amending this section and sections 403 and 457 of this title] shall apply to distributions in taxable years beginning after  December 31, 2006 .”\nPub. L. 109–135, title IV, §\u202f407(c) ,  Dec. 21, 2005 ,  119 Stat. 2635 , provided that:  “The amendments made by this section [amending this section and  section 415 of this title ] shall take effect as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [ Pub. L. 107–16 ] to which they relate.”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by section 611(d)(1)–(3)(A) of  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nPub. L. 107–16, title VI, §\u202f617(f) ,  June 7, 2001 ,  115 Stat. 106 , provided that:  “The amendments made by this section [enacting  section 402A of this title  and amending this section and sections 408A, 6047, and 6051 of this title] shall apply to taxable years beginning after  December 31, 2005 .”\nAmendment by  section 632(a)(3)(G) of Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 632(a)(4) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nPub. L. 107–16, title VI, §\u202f636(b)(2) ,  June 7, 2001 ,  115 Stat. 117 , provided that:  “The amendment made by this subsection [amending this section] shall apply to distributions made after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f641(f) ,  June 7, 2001 ,  115 Stat. 121 , provided that: \n “(1)   Effective date .— The amendments made by this section [amending this section and sections 72, 219, 401, 403, 408, 415, 457, 3401, 3405, and 4973 of this title] shall apply to distributions after  December 31, 2001 . \n \n “(2)   Reasonable notice .— No penalty shall be imposed on a plan for the failure to provide the information required by the amendment made by subsection (c) [amending this section] with respect to any distribution made before the date that is 90 days after the date on which the Secretary of the Treasury issues a safe harbor rollover notice after the date of the enactment of this Act [ June 7, 2001 ], if the administrator of such plan makes a reasonable attempt to comply with such requirement. \n \n “(3)   Special rule .— Notwithstanding any other provision of law, subsections (h)(3) and (h)(5) of section 1122 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , set out as a note below] shall not apply to any distribution from an eligible retirement plan (as defined in clause (iii) or (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 1986) on behalf of an individual if there was a rollover to such plan on behalf of such individual which is permitted solely by reason of any amendment made by this section.”\nAmendment by  section 643(a) of Pub. L. 107–16  applicable to distributions made after  Dec. 31, 2001 , see  section 643(d) of Pub. L. 107–16 , set out as a note under  section 401 of this title .\nPub. L. 107–16, title VI, §\u202f644(c) ,  June 7, 2001 ,  115 Stat. 123 , provided that:  “The amendments made by this section [amending this section and  section 408 of this title ] shall apply to distributions after  December 31, 2001 .”\nAmendment by  section 657(b) of Pub. L. 107–16  applicable to distributions made after  Mar. 28, 2005 , see  section 657(d) of Pub. L. 107–16 , set out as a note under  section 401 of this title .\nPub. L. 105–206, title VI, §\u202f6005(c)(2)(C) ,  July 22, 1998 ,  112 Stat. 800 , provided that:  “The amendments made by this paragraph [amending this section and  section 403 of this title ] shall apply to distributions after  December 31, 1998 .”\nPub. L. 105–34, title XV, §\u202f1501(c)(1) ,  Aug. 5, 1997 ,  111 Stat. 1058 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1997 .”\nPub. L. 104–188, title I, §\u202f1401(c) ,  Aug. 20, 1996 ,  110 Stat. 1789 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 55, 62, 401, 406, 407, 691, 871, 877, and 4980A of this title] shall apply to taxable years beginning after  December 31, 1999 . \n \n “(2)   Retention of certain transition rules .— The amendments made by this section shall not apply to any distribution for which the taxpayer is eligible to elect the benefits of section 1122(h)(3) or (5) of the Tax Reform Act of 1986 [ Pub. L. 99–514 , set out below]. Notwithstanding the preceding sentence, individuals who elect such benefits after  December 31, 1999 , shall not be eligible for 5-year averaging under section 402(d) of the Internal Revenue Code of 1986 (as in effect immediately before such amendments).”\nAmendment by section 1421(b)(3)(A), (9)(B) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nAmendment by  section 1450(a)(2) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1450(a)(3) of Pub. L. 104–188 , set out in a Modifications of Subsection (b) of This Section note under  section 403 of this title .\nAmendment by  Pub. L. 103–465  applicable to years beginning after  Dec. 31, 1994 , and, to the extent of providing for the rounding of indexed amounts, not applicable to any year to the extent the rounding would require the indexed amount to be reduced below the amount in effect for years beginning in 1994, see  section 732(e) of Pub. L. 103–465 , set out as a note under  section 401 of this title .\nPub. L. 102–318, title V, §\u202f521(e) ,  July 3, 1992 ,  106 Stat. 313 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 55, 62, 72, 219, 401, 403, 406 to 408, 411, 414, 415, 457, 691, 871, 877, 1441, 3121, 3306, 3405, 4973, 4980A, and 7701 of this title] shall apply to distributions after  December 31, 1992 . \n \n “(2)   Special rule for partial distributions .— For purposes of section 402(a)(5)(D)(i)(II) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this section), a distribution before  January 1, 1993 , which is made before or at the same time as a series of periodic payments shall not be treated as one of such series if it is not substantially equal in amount to other payments in such series.”\nAmendment by  section 522(c)(1) of Pub. L. 102–318  applicable, except as otherwise provided, to distributions after  Dec. 31, 1992 , see  section 522(d) of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nPub. L. 101–239, title VII, §\u202f7811(i)(13) ,  Dec. 19, 1989 ,  103 Stat. 2411 , provided that the amendment made by that section is effective with respect to taxable years ending after  Dec. 19, 1989  (or, at the election of the taxpayer, beginning after  Dec. 31, 1986 ).\nAmendment by  section 7811(g)(2) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by sections 1011(c)(1)–(6)(B), (11), (h)(4), 1011A(a)(1), (b)(4)(A)–(D), (5)–(8), (10), (c)(9), and 1018(t)(8)(A), (C), (u)(1), (6), (7) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6068(b) ,  Nov. 10, 1988 ,  102 Stat. 3704 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 1984 .”\nAmendment by  section 104(b)(5) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XI, §\u202f1105(c) ,  Oct. 22, 1986 ,  100 Stat. 2419 , as amended by  Pub. L. 100–647, title I, §\u202f1011(c)(8) , (9),  Nov. 10, 1988 ,  102 Stat. 3458 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Deferrals under collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendment made by subsection (a) shall not apply to contributions made pursuant to such an agreement for taxable years beginning before the earlier of— “(A)  the date on which such agreement terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n “(B)   January 1, 1989 . \n \n\n Such contributions shall be taken into account for purposes of applying the amendment made by this section to other plans. \n \n “(3)   Distributions made before plan amendment.— “(A)   In general .— If a plan amendment is required to allow the plan to make any distribution described in section 402(g)(2)(A)(ii) of the Internal Revenue Code of 1986, any such distribution which is made before the close of the 1st plan year for which such amendment is required to be in effect under section 1140 [set out as a note under  section 401 of this title ] shall be treated as made in accordance with the provisions of such plan. \n \n “(B)   Distributions pursuant to model amendment.— “(i)   Secretary to prescribe amendment .— The Secretary of the Treasury or his delegate shall prescribe an amendment which allows a plan to make any distribution described in section 402(g)(2)(A)(ii) of such Code. \n \n “(ii)   Adoption by plan .— If a plan adopts the amendment prescribed under clause (i) and makes a distribution in accordance with such amendment, such distribution shall be treated as made in accordance with the provisions of the plan. \n \n \n \n “(4)   Special rule for taxable years of partnerships which include  january 1, 1987 .— In the case of the taxable year of any partnership which begins before  January 1, 1987 , and ends after  January 1, 1987 , elective deferrals (within the meaning of section 402(g)(3) of the Internal Revenue Code of 1986) made on behalf of a partner for such taxable year shall, for purposes of section 402(g)(3) of such Code, be treated as having been made ratably during such taxable year. \n \n “(5)   Cash or deferred arrangements .— The amendments made by this section [amending this section and  section 6051 of this title ] shall not apply to employer contributions made during 1987 and attributable to services performed during 1986 under a qualified cash or deferred arrangement (as defined in section 401(k) of the Internal Revenue Code of 1986) if, under the terms of such arrangement as in effect on  August 16, 1986 — “(A)  the employee makes an election with respect to such contribution before  January 1, 1987 , and \n \n “(B)  the employer identifies the amount of such contribution before  January 1, 1987 . \n \n \n “(6)   Reporting requirements .— The amendments made by subsection (b) [amending  section 6051 of this title ] shall apply to calendar years beginning after  December 31, 1986 .”\nAmendment by  section 1106(c)(2) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1106(i) of Pub. L. 99–514 , set out as a note under  section 415 of this title .\nAmendment by  section 1108(b) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1108(h) of Pub. L. 99–514 , set out as a note under  section 219 of this title .\nAmendment by  section 1112(c) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule regarding collective bargaining agreements ratified before  Mar. 1, 1986 , and with provision for waiver of excise tax on reversions, see  section 1112(e) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 1121(c)(1) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , with special provisions for plans maintained pursuant to collective bargaining agreements ratified before  Mar. 1, 1986 , and transition rules, see  section 1121(d) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 99–514, title XI, §\u202f1122(h) ,  Oct. 22, 1986 ,  100 Stat. 2470 , as amended by  Pub. L. 100–647, title I, §\u202f1011A(b)(11) –(15),  Nov. 10, 1988 ,  102 Stat. 3474 , 3475, provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 72, 403, and 408 of this title] shall apply to amounts distributed after  December 31, 1986 , in taxable years ending after such date. \n \n “(2)   Subsection  (c).— “(A)   Subsection  (c)(1).— The amendment made by subsection (c)(1) [amending  section 72 of this title ] shall apply to individuals whose annuity starting date is after  July 1, 1986 . \n \n “(B)   Subsection  (c)(2).— The amendment made by subsection (c)(2) [amending  section 72 of this title ] shall apply to individuals whose annuity starting date is after  December 31, 1986 , except that section 72(b)(3) of the Internal Revenue Code of 1986 (as added by such subsection) shall apply to individuals whose annuity starting date is after  July 1, 1986 . \n \n “(C)   Special rule for amounts not received as annuities .— In the case of any plan not described in section 72(e)(8)(D) of the Internal Revenue Code of 1986 (as added by subsection (c)(3)), the amendments made by subsection (c)(3) [amending  section 72 of this title ] shall apply to amounts received after  July 1, 1986 . \n \n \n “(3)   Special rule for individuals who attained age 50 before  january 1, 1986 .— “(A)   In general .— In the case of a lump sum distribution to which this paragraph applies— “(i)  the existing capital gains provisions shall continue to apply, and \n \n “(ii)  the requirement of subparagraph (B) of section 402(e)(4) of the Internal Revenue Code of 1986 (as amended by subsection (a)) that the distribution be received after attaining age 59½ shall not apply. \n \n \n “(B)   Computation of tax .— If subparagraph (A) applies to any lump sum distribution of any taxpayer for any taxable year, the tax imposed by section 1 of the Internal Revenue Code of 1986 on such taxpayer for such taxable year shall be equal to the sum of— “(i)  the tax imposed by such section 1 on the taxable income of the taxpayer (reduced by the portion of such lump sum distribution to which clause (ii) applies), plus \n \n “(ii)  20 percent of the portion of such lump sum distribution to which the existing capital gains provisions continue to apply by reason of this paragraph. \n \n \n “(C)   Lump sum distributions to which paragraph applies .— This paragraph shall apply to any lump sum distribution if— “(i)  such lump sum distribution is received by an employee who has attained age 50 before  January 1, 1986  or by an individual, estate, or trust with respect to such an employee, and \n \n “(ii)  the taxpayer makes an election under this paragraph. \n \n\n Not more than 1 election may be made under this paragraph with respect to an employee. An election under this subparagraph shall be treated as an election under section 402(e)(4)(B) of such Code for purposes of such Code. \n \n \n “(4)  5 -year phase-out of capital gains treatment.— “(A)  Notwithstanding the amendment made by subsection (b) [amending this section and  section 403 of this title ], if the taxpayer elects the application of this paragraph with respect to any distribution after  December 31, 1986 , and before  January 1, 1992 , the phase-out percentage of the amount which would have been treated, without regard to this subparagraph, as long-term capital gain under the existing capital gains provisions shall be treated as long-term capital gain. \n \n “(B)  For purposes of this paragraph— \n \n \n \n \n \n \n \u2001\u2001\u2001“In the case of distributions \u2001\u2001\u2001\u2001\u2001during calendar year: The phase-out percentage is: \n \n \n 1987 100\u202f\u202f \n 1988 95\u202f\u202f \n 1989 75\u202f\u202f \n 1990 50\u202f\u202f \n 1991 25. \n \n \n \n \n “(C)  No more than 1 election may be made under this paragraph with respect to an employee. An election under this paragraph shall be treated as an election under section 402(e)(4)(B) of the Internal Revenue Code of 1986 for purposes of such Code. \n \n \n “(5)   Election of 10-year averaging .— An employee who has attained age 50 before  January 1, 1986 , and elects the application of paragraph (3) or section 402(e)(1) of the Internal Revenue Code of 1986 (as amended by this Act) may elect to have such section applied by substituting ‘10 times’ for ‘5 times’ and ‘⅒’ for ‘⅕’ in subparagraph (B) thereof. For purposes of the preceding sentence, section 402(e)(1) of such Code shall be applied by using the rate of tax in effect under section 1 of the Internal Revenue Code of 1954 for taxable years beginning during 1986 and by including in gross income the zero bracket amount in effect under section 63(d) of such Code for such years. This paragraph shall also apply to an individual, estate, or trust which receives a distribution with respect to an employee described in this paragraph. \n \n “(6)   Existing capital gain provisions .— For purposes of paragraphs (3) and (4), the term ‘existing capital gains provisions’ means the provisions of paragraph (2) of section 402(a) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) and paragraph (2) of section 403(a) of such Code (as so in effect). \n \n “(7)   Subsection  (d).— The amendments made by subsection (d) [amending  section 403 of this title ] shall apply to taxable years beginning after  December 31, 1985 . \n \n “(8)   Frozen deposits .— The amendments made by subsection (e)(2) [amending this section and  section 408 of this title ] shall apply to amounts transferred to an employee before, on, or after the date of the enactment of this Act [ Oct. 22, 1986 ], except that in the case of an amount transferred on or before such date, the 60-day period referred to in section 402(a)(5)(C) of the Internal Revenue Code of 1986 shall not expire before the 60th day after the date of the enactment of this Act. \n \n “(9)   Special rule for state plans .— In the case of a plan maintained by a State which on  May 5, 1986 , permitted withdrawal by the employee of employee contributions (other than as an annuity), section 72(e) of the Internal Revenue Code of 1986 shall be applied— “(A)  without regard to the phrase ‘before separation from service’ in paragraph (8)(D), and \n \n “(B)  by treating any amount received (other than as an annuity) before or with the 1st annuity payment as having been received before the annuity starting date.”\nAmendment by section 1852(a)(5)(A), (b)(1)–(7), (c)(5) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1854(f)(4)(C) ,  Oct. 22, 1986 ,  100 Stat. 2882 , as amended by  Pub. L. 100–647, title I, §\u202f1011(c)(6)(C) ,  Nov. 10, 1988 ,  102 Stat. 3458 , provided that:  “The amendments made by paragraph (2) [amending this section] shall apply to any transaction occurring after  December 31, 1984 , except that in the case of any transaction occurring before the date of the enactment of this Act [ Oct. 22, 1986 ], the period under which proceeds are required to be invested under section 402(j) of the Internal Revenue Code of 1954 [now 1986] (as added by paragraph (2)) shall not end before the earlier of 1 year after the date of such transaction or 180 days after the date of the enactment of this Act.”\nPub. L. 99–514, title XVIII, §\u202f1875(c)(1)(B) ,  Oct. 22, 1986 ,  100 Stat. 2894 , provided that:  “The amendments made by subparagraph (A) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Oct. 22, 1986 ]. Such amendments shall apply also to distributions after 1983 and on or before the date of the enactment of this Act to individuals who are not 5-percent owners (as defined in section 402(a)(5)(F)(ii) of the Internal Revenue Code of 1954 [now 1986] (as amended by this paragraph)).”\nAmendment by section 1898(a)(2), (3), (c)(7)(A)(i), (e) of  Pub. L. 99–514  effective as if included in the provision of the Retirement Equity Act of 1984,  Pub. L. 98–397 , to which such amendment relates, except as otherwise provided, see  section 1898(j) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 1898(c)(1)(A) of Pub. L. 99–514  applicable to payments made after  Oct. 22, 1986 , see  section 1898(c)(1)(C) of Pub. L. 99–514 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 99–272  effective  Jan. 1, 1986 , with certain exceptions, see  section 11019 of Pub. L. 99–272 , set out as a note under  section 1341 of Title 29 , Labor.\nAmendment by  section 204 of Pub. L. 98–397  effective  Jan. 1, 1985 , and amendment by  section 207 of Pub. L. 98–397  applicable to plan years beginning after  Dec. 31, 1984 , except as otherwise provided, see sections 302 and 303 of  Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 , Labor.\nAmendment by section 491(d)(9)–(11) of  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f491(f)(2) ,  July 18, 1984 ,  98 Stat. 853 , provided that:  “The amendment made by subsection (c) [amending this section and  section 405 of this title ] shall apply to redemptions after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nPub. L. 98–369, div. A, title V, §\u202f522(e) ,  July 18, 1984 ,  98 Stat. 871 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1852(b)(9) ,  Oct. 22, 1986 ,  100 Stat. 2867 , provided that:  “The amendments made by this section [amending this section and sections 403, 408, and 409 of this title] shall apply to distributions made after the date of the enactment of this Act [ July 18, 1984 ], in taxable years ending after such date.”\nPub. L. 98–369, div. A, title VII, §\u202f713(c)(4) , as added by  Pub. L. 99–514, title XVIII, §\u202f1875(c)(2) ,  Oct. 22, 1986 ,  100 Stat. 2894 , provided that:  “The amendment made by paragraph (3) [amending this section] shall apply to distributions after  July 18, 1984 .”\nAmendment by  section 1001(b)(3) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by section 311(b)(2), (3)(A), (c) of  Pub. L. 97–34 , applicable to taxable years beginning after  Dec. 31, 1981 , see  section 311(i)(1) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nPub. L. 97–34, title III, §\u202f314(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 286 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 96–608, §\u202f2(b) ,  Dec. 28, 1980 ,  94 Stat. 3551 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— The amendment made by subsection (a) [amending this section] shall apply to payments made in taxable years beginning after  December 31, 1978 . \n \n “(2)   Transitional rule.— In the case of any payment made before  January 1, 1982 , in a taxable year beginning after  December 31, 1978 , which is treated as a qualifying rollover distribution (as defined in section 402(a)(5)(D)(i) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) by reason of the amendment made by subsection (a), the applicable period specified in section 402(a)(5)(C) of such Code shall not expire before the close of  December 31, 1981 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 101(d) of Pub. L. 95–600  effective with respect to taxable years beginning after  Dec. 31, 1978 , see  section 101(f)(1) of Pub. L. 95–600 , set out as a note under  section 1 of this title .\nAmendment by  section 135(b) of Pub. L. 95–600  applicable to plan years beginning after  December 31, 1979 , see  section 135(c)(1) of Pub. L. 95–600 , set out as a note under  section 401 of this title .\nPub. L. 95–600, title I, §\u202f157(f)(2) ,  Nov. 6, 1978 ,  92 Stat. 2807 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to qualifying rollover distributions (as defined in section 402(a)(5)(D)(i) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) completed after  December 31, 1978 , in taxable years ending after such date.”\nPub. L. 95–600, title I, §\u202f157(g)(4) ,  Nov. 6, 1978 ,  92 Stat. 2808 , provided that:  “The amendments made by this subsection [amending this section and sections 403 and 408 of this title] shall apply to lump-sum distributions completed after  December 31, 1978 , in taxable years ending after such date.”\nPub. L. 95–600, title I, §\u202f157(h)(3)(A) ,  Nov. 6, 1978 ,  92 Stat. 2808 , as amended by  Pub. L. 96–222, title I, §\u202f101(a)(14)(A) ,  Apr. 1, 1980 ,  94 Stat. 204 , provided that:  “The amendments made by this subsection [amending this section and  section 408 of this title ] shall apply to payments made in taxable years beginning after  December 31, 1977 .”\nPub. L. 95–458, §\u202f4(d) ,  Oct. 14, 1978 ,  92 Stat. 1260 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— The amendments made by subsections (a), (b), and (c) [amending this section and  section 403 of this title ] shall apply with respect to taxable years beginning after  December 31, 1974 . \n \n “(2)   Validation of certain attempted rollovers.— If the taxpayer— “(A)  attempted to comply with the requirements of section 402(a)(5) or 403(a)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for a taxable year beginning before the date of the enactment of this Act, [ Oct. 14, 1978 ], and \n \n “(B)  failed to meet the requirements of such section that all property received in the distribution be transferred, \n \n\n such section (as amended by this section) shall be applied by treating any transfer of property made on or before  December 31, 1978 , as if it were made on or before the 60th day after the day on which the taxpayer received such property. For purposes of the preceding sentence, a transfer of money shall be treated as a transfer of property received in a distribution to the extent that the amount of the money transferred does not exceed the highest fair market value of the property distributed during the 60-day period beginning on the date on which the taxpayer received such property.”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 94–455, title XV, §\u202f1512(b) ,  Oct. 4, 1976 ,  90 Stat. 1742 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions and payments made after  December 31, 1975 , in taxable years beginning after such date.”\nPub. L. 94–455, title XIX, §\u202f1901(a)(57)(C)(ii) ,  Oct. 4, 1976 ,  90 Stat. 1774 , provided that:  “The amendment made by clause (i) [amending this section] shall apply with respect to distributions or payments made after  December 31, 1973 , in taxable years beginning after such date.”\nAmendment by  Pub. L. 94–267  applicable with respect to payments made to an employee on or after  July 4, 1974 , see  section 1(e) of Pub. L. 94–267 , set out as a note under  section 401 of this title .\nPub. L. 93–406, title II, §\u202f2002(i)(3) ,  Sept. 2, 1974 ,  88 Stat. 971 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsection (g)(5) and (6) [amending this section and  section 403 of this title ] shall apply on and after the date of enactment of this Act [ Sept. 2, 1974 ] with respect to contributions to an employees’ trust described in section 401(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which is exempt from tax under section 501(a) of such Code or an annuity plan described in section 403(a) of such Code.”\nPub. L. 93–406, title II, §\u202f2005(d) ,  Sept. 2, 1974 ,  88 Stat. 992 , provided that:  “The amendments made by this section [amending this section and sections 46, 50A, 56, 62, 72, 101, 122, 403, 405, 406, 407, 871, 877, 901, 1304, and 1348 of this title] shall apply only with respect to distributions or payments made after  December 31, 1973 , in taxable years beginning after such date.”\nAmendment by  section 321(b)(1) of Pub. L. 91–172  applicable with respect to contributions made and premiums paid after  Aug. 1, 1969 , see  section 321(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 83 of this title .\nPub. L. 91–172, title V, §\u202f515(d) ,  Dec. 30, 1969 ,  83 Stat. 646 , provided that:  “The amendments made by this section [amending this section and sections 72, 403, 405, 406, 407 and 1304 of this title] shall apply to taxable years ending after  December 31, 1969 .”\nAmendment by  section 221(c)(1) of Pub. L. 88–272  applicable to taxable years ending after  Dec. 31, 1963 , see  section 221(e) of Pub. L. 88–272 , set out as a note under  section 421 of this title .\nAmendment by section 232(e)(1)–(3) of  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 232(g) of Pub. L. 88–272 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nPub. L. 86–437, §\u202f3 ,  Apr. 22, 1960 ,  74 Stat. 79 , provided that:  “The amendments made by this Act [amending this section and  section 871 of this title ] shall apply only with respect to taxable years beginning after  December 31, 1959 .”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1112 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 117–328, div. T, title III, §\u202f301(d) ,  Dec. 29, 2022 ,  136 Stat. 5338 , provided that:  \n “Plans, fiduciaries, employers, and plan sponsors are entitled to rely on— “(1)  a reasonable good faith interpretation of then existing administrative guidance for inadvertent benefit overpayment recoupments and recoveries that commenced before the date of enactment of this Act [ Dec. 29, 2022 ], and \n \n “(2)  determinations made before the date of enactment of this Act by the responsible plan fiduciary, in the exercise of its fiduciary discretion, not to seek recoupment or recovery of all or part of an inadvertent benefit overpayment. \n \n\n In the case of a benefit overpayment that occurred prior to the date of enactment of this Act, any installment payments by the participant or beneficiary to the plan or any reduction in periodic benefit payments to the participant or beneficiary, which were made in recoupment of such overpayment and which commenced prior to such date, may continue after such date. Nothing in this subsection shall relieve a fiduciary from responsibility for an overpayment that resulted from a breach of its fiduciary duties.”\nPub. L. 105–34, title XV, §\u202f1509 ,  Aug. 5, 1997 ,  111 Stat. 1068 , provided that:  “The Secretary of the Treasury or his delegate shall clarify that, under the Internal Revenue Service regulations protecting pension plans from disqualification by reason of the receipt of invalid rollover contributions under section 402(c) of the Internal Revenue Code of 1986, in order for the administrator of the plan receiving any such contribution to reasonably conclude that the contribution is a valid rollover contribution it is not necessary for the distributing plan to have a determination letter with respect to its status as a qualified plan under section 401 of such Code.”\nPub. L. 102–318, title V, §\u202f521(d) ,  July 3, 1992 ,  106 Stat. 313 , provided that:  “The Secretary of the Treasury or his delegate shall develop a model explanation which a plan administrator may provide to a recipient in order to meet the requirements of section 402(f) of the Internal Revenue Code of 1986.”\nPub. L. 100–647, title I, §\u202f1011(c)(10) ,  Nov. 10, 1988 ,  102 Stat. 3459 , provided that:  “Notwithstanding any other provision of law, a plan may incorporate by reference the dollar limitations under section 402(g) of the Internal Revenue Code of 1986.”\nPub. L. 100–647, title I, §\u202f1011A(a)(5) ,  Nov. 10, 1988 ,  102 Stat. 3472 , provided that:  “Section 402(a)(5)(F)(ii) of the Internal Revenue Code of 1954 shall not apply to distributions after  October 22, 1986 , and before the 1st taxable year beginning after 1986 which are attributable to benefits which accrued before  January 1, 1985 .”\nPub. L. 100–647, title I, §\u202f1011A(b)(4)(E) ,  Nov. 10, 1988 ,  102 Stat. 3473 , provided that:  “Section 402(a)(5)(D)(i)(II) of the 1986 Code (as in effect after the amendment made by subparagraph (A)) shall not apply to distributions after  December 31, 1986 , and before  March 31, 1988 .”\nPub. L. 99–514, title XI, §\u202f1124 ,  Oct. 22, 1986 ,  100 Stat. 2475 , as amended by  Pub. L. 100–647, title I, §\u202f1011A(d) ,  Nov. 10, 1988 ,  102 Stat. 3476 , provided that: \n “(a)   In General .— If an employee dies, separates from service, or becomes disabled before 1987 and an individual, trust, or estate receives a lump-sum distribution with respect to such employee after  December 31, 1986 , and before  March 16, 1987 , on account of such death, separation from service, or disability, then, for purposes of the Internal Revenue Code of 1986, such individual, estate, or trust may treat such distribution as if it were received in 1986. \n \n “(b)   Special Rule for Terminated Plan .— In the case of an individual, estate, or trust who receives with respect to an employee a distribution from a terminated plan which was maintained by a corporation organized under the laws of the State of Nevada, the principal place of business of which is Denver, Colorado, and which filed for relief from creditors under the United States Bankruptcy Code on  August 28, 1986 , the individual, estate, or trust may treat a lump sum distribution received from such plan before  June 30, 1987 , as if it were received in 1986. \n \n “(c)   Lump Sum Distribution .— For purposes of this section, the term ‘lump sum distribution’ has the meaning given such term by section 402(e)(4)(A) of the Internal Revenue Code of 1986, without regard to subparagraph (B) or (H) of section 402(e)(4) of such Code.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title V, §\u202f551 ,  July 18, 1984 ,  98 Stat. 896 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— For purposes of the Internal Revenue Code [of] 1986 [formerly I.R.C. 1954], if— “(1)  a distribution was made from a qualified terminated plan to an employee on  December 16, 1976 , and on  January 6, 1977 , such employee transferred all of the property received in such distribution to an individual retirement account (within the meaning of section 408(a) of such Code) established for the benefit of such employee, and \n \n “(2)  the remaining balance to the credit of such employee in such qualified terminated plan was distributed to such employee on  January 21, 1977 , and all the property received by such employee in such distribution was transferred by such employee to such individual retirement account on  January 21, 1977 , \n \n\n then such distributions shall be treated as qualifying rollover distributions (within the meaning of section 402(a)(5) of such Code) and shall not be includible in the gross income of such employee for the taxable year in which paid. \n \n “(b)   Qualified Terminated Plan .— For purposes of this section, the term ‘qualified terminated plan’ means a pension plan— “(1)  with respect to which a notice of sufficiency was issued by the Pension Benefit Guaranty Corporation on  December 2, 1976 , and \n \n “(2)  which was terminated by corporate action on  February 20, 1976 . \n \n \n “(c)   Refund or Credit of Overpayment Barred by Statute of Limitations .— Notwithstanding section 6511(a) of the Internal Revenue Code of 1986 or any other period of limitation or lapse of time, a claim for credit or refund of overpayment of the tax imposed by such Code which arises by reason of this section may be filed by any person at any time within the 1-year period beginning on the date of enactment of this Act [ July 18, 1984 ]. Sections 6511(b) and 6514 of such Code shall not apply to any claim for credit or refund filed under this subsection within such 1-year period.”\nPub. L. 95–600, title I, §\u202f157(h)(3)(B) ,  Nov. 6, 1978 ,  92 Stat. 2808 , as amended by  Pub. L. 96–222, title I, §\u202f101(a)(14)(A) , (D),  Apr. 1, 1980 ,  94 Stat. 204 , 205;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of any payment made during 1978 which is described in section 402(a)(5)(A) or 403(a)(4)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] by reason of the amendments made by this subsection [amending sections 402 and 408 of this title], the applicable period specified in section 402(a)(5)(C) of such Code (or in the case of an individual retirement annuity, such section as made applicable by section 403(a)(4)(B) of such code) shall not expire before the close of  December 31, 1980 .”\nPub. L. 94–267, §\u202f1(d) ,  Apr. 15, 1976 ,  90 Stat. 367 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— “(A)   Period for rollover contribution .— In the case of a payment described in section 402(a)(5)(A) (other than a payment described in section 402(a)(5)(A) as in effect on the day before the date of the enactment of this Act) [ Apr. 15, 1976 ] or section 403(a)(4)(A) (other than a payment described in section 403(a)(4)(A) as in effect on the day before the date of the enactment of this Act [ Apr. 15, 1976 ] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to distributions of the balance to the credit of the employee) which is contributed by an employee after the date of the enactment of this Act [ Apr. 15, 1976 ] to a trust, plan, account, annuity, or bond described in section 402(a)(5)(B) or 403(a)(4)(B) of such Code, the applicable period specified in section 402(a)(5)(B) or 403(a)(4)(B) of such Code (relating to rollover distributions to another plan or retirement account) shall not expire before  December 31, 1976 . \n \n “(B)   Time of contribution.—\n(i)  General rule .—If the initial portion of a payment the applicable period for which is determined under subparagraph (A) is contributed before  December 31, 1976 , by an individual to a trust, plan, account, annuity, or bond described in subparagraph (A) and the remaining portion of such payment is contributed by such individual to such a trust, plan, account, annuity, or bond not later than 30 days after the date a credit or refund is allowed by the Secretary of the Treasury or his delegate under section 6402 of the Internal Revenue Code of 1986 with respect to the contribution, then, for purposes of subparagraph (A) and sections 402(a)(5) and 403(a)(4) of such Code, at the election of the individual (made in accordance with regulations prescribed by the Secretary or his delegate), such remaining portion shall be considered to have been contributed on the date the initial portion of the payment was contributed. For purposes of this subparagraph, the initial portion of a payment is the amount by which such payment exceeds the amount of the tax imposed on such payment by chapter 1 of such Code (determined without regard to this subparagraph). [chapter 1 of this title]\n“(ii)  Regulations .—For purposes of this subparagraph, the tax imposed on a payment by chapter 1 of the Internal Revenue Code of 1986, and the date a credit or refund is allowed by the Secretary of the Treasury or his delegate under section 6402 with respect to a contribution, shall be determined under regulations prescribed by the Secretary of the Treasury or his delegate.\n“(C)  Period of limitations .—If an individual has made the election provided by subparagraph (B), then—\n“(i) the period provided by the Internal Revenue Code of 1986 for the assessment of any deficiency for the taxable year in which the payment described in subparagraph (A) was made and each subsequent taxable year for which tax is determined by reference to the treatment of such payment under such Code or the status under such Code of any trust, plan, account, annuity, or bond described in subparagraph (A) shall, to the extent attributable to such treatment, not expire before the expiration of 3 years from the date the Secretary of the Treasury or his delegate is notified by the individual (in such manner as the Secretary of the Treasury or his delegate may prescribe) that such individual has made (or failed to make) the contribution of the remaining portion of the payment within the period specified in subparagraph (B)(i), and\n“(ii) such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of section 6212(c) of such Code or the provisions of any other law or rule of law which would otherwise prevent such assessment.\n“(2)  Rollover contribution for certain property sold .—Sections 402(a)(5)(C) and 403(a)(4)(C) of the Internal Revenue Code of 1986 (relating to the requirement that rollover amount must consist of property received in a distribution) shall not apply with respect to that portion of the property received in a payment described in section 402(a)(5)(A) (other than a payment described in section 402(a)(5)(A) as in effect on the day before the date of the enactment of this Act [ Apr. 15, 1976 ] or 403(a)(4)(A) (other than a payment described in section 403(a)(4)(A) as in effect on the day before the date of the enactment of this Act) [ Apr. 15, 1976 ] of such Code which is sold or exchanged by the employee on or before the date of the enactment of this Act, [ Apr. 15, 1976 ], if the employee transfers an amount of cash equal to the proceeds received from the sale or exchange of such property in excess of the amount considered contributed by the employee (within the meaning of section 402(a)(4)(D)(i) of such Code).\n“(3)  Nonrecognition of gain or loss .—For purposes of the Internal Revenue Code of 1986 [this title] no gain or loss shall be recognized with respect to the sale or exchange of property described in paragraph (2) if the proceeds of such sale or exchange are transferred by an employee in accordance with this subsection and the applicable provisions of section 402(a)(5) or 403(a)(4) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'The term “qualified Roth contribution program” means a program under which an employee may elect to make, or to have made on the employee’s behalf, designated Roth contributions in lieu of all or a portion of elective deferrals the employee is otherwise eligible to make, or of matching contributions or nonelective contributions which may otherwise be made on the employee’s behalf, under the applicable retirement plan.\nAny rollover contribution to a designated Roth account under subparagraph (A) shall not be taken into account for purposes of paragraph (1).\nIn the case of an applicable retirement plan which includes a qualified Roth contribution program, this paragraph shall apply to a distribution from such plan other than from a designated Roth account which is contributed in a qualified rollover contribution (within the meaning of section 408A(e)) to the designated Roth account maintained under such plan for the benefit of the individual to whom the distribution is made.\nAny distribution to which this paragraph applies shall not be taken into account for purposes of paragraph (1).\nThe rules of subparagraphs (D), (E), and (F) of section 408A(d)(3) (as in effect for taxable years beginning after 2009) shall apply for purposes of this paragraph.\nAny qualified distribution from a designated Roth account shall not be includible in gross income.\nThe term “qualified distribution” has the meaning given such term by section 408A(d)(2)(A) (without regard to clause (iv) thereof).\nThe term “qualified distribution” shall not include any distribution of any excess deferral under section 402(g)(2) or any excess contribution under section 401(k)(8), and any income on the excess deferral or contribution.\nSection 72 shall be applied separately with respect to distributions and payments from a designated Roth account and other distributions and payments from the plan.\nNotwithstanding subparagraph (A)(ii), an individual on whose behalf a pension-linked emergency savings account is established who thereafter becomes a highly compensated employee (as so defined) may not make further contributions to such account, but retains the right to withdraw any account balance of such account in accordance with paragraphs (7) and (8).\nThe required notices under subparagraph (A) may be included with any other notice under the Employee Retirement Income Security Act of 1974, including under section 404(c)(5)(B) or 514(e)(3) of such Act, or under section 401(k)(13)(E) or 414(w)(4), if such other notice is provided to the participant at the time required for such notice.\nIf an employer makes any matching contributions to a defined contribution plan of which a pension-linked emergency savings account is part, subject to the limitations of paragraph (3), the employer shall make matching contributions on behalf of an eligible participant on account of the participant’s contributions to the pension-linked emergency savings account at the same rate as any other matching contribution on account of an elective contribution by such participant. The matching contributions shall be made to the participant’s account under the defined contribution plan which is not the pension-linked emergency savings account. Such matching contributions on account of contributions to the pension-linked emergency savings account shall not exceed the maximum account balance under paragraph (3)(A) for such plan year.\nFor purposes of any applicable limitation on matching contributions, any matching contributions made under the plan shall be treated first as attributable to the elective deferrals of the participant other than contributions to a pension-linked emergency savings account.\nFor purposes of subparagraph (A), the term “matching contribution” has the meaning given such term in section 401(m)(4).\nA pension-linked emergency savings account shall allow for withdrawal by the participant on whose behalf the account is established of the account balance, in whole or in part at the discretion of the participant, at least once per calendar month and for distribution of such withdrawal to the participant as soon as practicable after the date on which the participant elects to make such withdrawal.\nNo amounts shall be transferred by the participant from another account of the participant under any plan of the employer into the pension-linked emergency savings account of the participant.\nSubparagraph (F) of section 408A(d)(3) shall not apply (including by reason of subsection (c)(4)(D) of this section) to any rollover contribution of amounts in a pension-linked emergency savings account under subparagraph (A).\nIf any excess deferrals are distributed under section 402(g)(2)(A) to a participant, such amounts shall be distributed first from any pension-linked emergency savings account of the participant to the extent contributions were made to such account for the taxable year.\nExcept as provided in subparagraph (B), a distribution from a pension-linked emergency savings account shall not be treated as an eligible rollover distribution for purposes of sections 401(a)(31), 402(f), and 3405.\nIn the case of termination of employment of the participant, or termination by the plan sponsor of the pension-linked emergency savings account, except for purposes of 401(a)(31)(B), a distribution from a pension-linked emergency savings account which is contributed as provided in paragraph (8)(A)(i) shall be treated as an eligible rollover distribution.\nNotwithstanding section 411(d)(6), a plan which includes a pension-linked emergency savings account may cease to offer such accounts at any time.\nSection 403(b)(7)(A)(ii), referred to in subsec. (c)(4)(E)(iii), probably means  section 403(b)(7)(A)(ii) of this title  prior to amendment by  Pub. L. 116–94, div. O, title I, §\u202f109(c)(2) ,  Dec. 20, 2019 ,  133 Stat. 3151 .\nThe Employee Retirement Income Security Act of 1974, referred to in subsec. (e)(1)(A)(i), (5)(A), (C), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Sections 404, 514, and 801 of the Act are classifed to sections 1104, 1144, and 1193, respectively, of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe date of the enactment of the SECURE 2.0 Act of 2022, referred to in subsec. (e)(12), is the date of enactment of div. T of  Pub. L. 117–328 , which was approved  Dec. 29, 2022 .\n2022—Subsec. (a).  Pub. L. 117–328, §\u202f604(a) , added pars. (2) and (3) and redesignated former par. (2) as (4).\nSubsec. (b)(1).  Pub. L. 117–328, §\u202f604(b) , inserted “,\u2000or to have made on the employee’s behalf,” after “elect to make” and “,\u2000or of matching contributions or nonelective contributions which may otherwise be made on the employee’s behalf,” after “otherwise eligible to make”.\nSubsec. (c)(1).  Pub. L. 117–328, §\u202f604(c) , inserted “,\u2000matching contribution, or nonelective contribution” after “elective deferral” in introductory provisions.\nSubsec. (d)(5).  Pub. L. 117–328, §\u202f325(a) , added par. (5).\nSubsec. (e).  Pub. L. 117–328, §\u202f127(e)(1) , added subsec. (e). Former subsec. (e) redesignated (f).\nSubsec. (f).  Pub. L. 117–328, §\u202f127(e)(1) , redesignated subsec. (e) as (f).\nSubsec. (f)(3).  Pub. L. 117–328, §\u202f604(d) , added par. (3).\n2014—Subsec. (c)(4)(E)(iii).  Pub. L. 113–295  substituted “403(b)(7)(A)(ii)” for “403(b)(7)(A)(i)”.\n2013—Subsec. (c)(4)(E).  Pub. L. 112–240  added subpar. (E).\n2010—Subsec. (c)(4).  Pub. L. 111–240, §\u202f2112(a) , added par. (4).\nSubsec. (e)(1)(C).  Pub. L. 111–240, §\u202f2111(a) , added subpar. (C).\nSubsec. (e)(2).  Pub. L. 111–240, §\u202f2111(b) , amended par. (2) generally. Prior to amendment, text read as follows: “The term ‘elective deferral’ means any elective deferral described in subparagraph (A) or (C) of section 402(g)(3).”\nAmendment by  section 127 of Pub. L. 117–328  applicable to plan years beginning after  Dec. 31, 2023 , see  section 127(g) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nPub. L. 117–328, div. T, title III, §\u202f325(b) ,  Dec. 29, 2022 ,  136 Stat. 5359 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2023 . \n \n “(2)   Special rule .— The amendment made by this section shall not apply to distributions which are required with respect to years beginning before  January 1, 2024 , but are permitted to be paid on or after such date.”\nPub. L. 117–328, div. T, title VI, §\u202f604(e) ,  Dec. 29, 2022 ,  136 Stat. 5393 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 112–240, title IX, §\u202f902(b) ,  Jan. 2, 2013 ,  126 Stat. 2371 , provided that:  “The amendment made by this section [amending this section] shall apply to transfers after  December 31, 2012 , in taxable years ending after such date.”\nPub. L. 111–240, title II, §\u202f2111(c) ,  Sept. 27, 2010 ,  124 Stat. 2566 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2010 .”\nPub. L. 111–240, title II, §\u202f2112(b) ,  Sept. 27, 2010 ,  124 Stat. 2566 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [ Sept. 27, 2010 ].”\nSection applicable to taxable years beginning after  Dec. 31, 2005 , see  section 617(f) of Pub. L. 107–16 , set out as an Effective Date of 2001 Amendment note under  section 402 of this title .\nPub. L. 117–328, div. T, title I, §\u202f127(f) ,  Dec. 29, 2022 ,  136 Stat. 5329 , provided that:  \n “The Secretary of Labor and the Secretary of the Treasury (or a delegate of either such Secretary) shall have authority to issue regulations or other guidance, and to coordinate in developing regulations or other guidance, to carry out the purposes of this Act [div. T of  Pub. L. 117–328 , see Tables for classification], including— \n “(1)  adjustment of the limitation under section 801(d)(1) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1193(d)(1) ] and section 402A(e)(3) of the Internal Revenue Code of 1986, as added by this Act, to account for inflation; \n \n “(2)  expansion of corrections programs, if necessary; \n \n “(3)  model plan language and notices relating to pension-linked emergency savings accounts; and \n \n “(4)  with regard to interactions with section 401(k)(13) of the Internal Revenue Code of 1986.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'If an annuity contract is purchased by an employer for an employee under a plan which meets the requirements of section 404(a)(2) (whether or not the employer deducts the amounts paid for the contract under such section), the amount actually distributed to any distributee under the contract shall be taxable to the distributee (in the year in which so distributed) under section 72 (relating to annuities).\nTo the extent provided in section 402( l ), paragraph (1) shall not apply to the amount distributed under the contract which is otherwise includible in gross income under this subsection.\nFor purposes of this subsection, the term “employee” includes an individual who is an employee within the meaning of section 401(c)(1), and the employer of such individual is the person treated as his employer under section 401(c)(4).\nThe rules of paragraphs (2) through (7) and (11) and (9) of section 402(c) and section 402(f) shall apply for purposes of subparagraph (A).\nAny amount transferred in a direct trustee-to-trustee transfer in accordance with section 401(a)(31) shall not be includible in gross income for the taxable year of such transfer.\nTo the extent provided in section 402( l ), paragraph (1) shall not apply to the amount distributed under the contract which is otherwise includible in gross income under this subsection.\nIf for any taxable year of the employee this subsection applies to 2 or more annuity contracts purchased by the employer, such contracts shall be treated as one contract.\nFor purposes of this title, a custodial account which satisfies the requirements of section 401(f)(2) shall be treated as an organization described in section 401(a) solely for purposes of subchapter F and subtitle F with respect to amounts received by it (and income from investment thereof).\nFor purposes of this paragraph, the term “regulated investment company” means a domestic corporation which is a regulated investment company within the meaning of section 851(a).\nThe rules of paragraphs (2) through (7), (9), and (11) of section 402(c) and section 402(f) shall apply for purposes of subparagraph (A), except that section 402(f) shall be applied to the payor in lieu of the plan administrator.\nFor purposes of this paragraph, the term “retirement income account” means a defined contribution program established or maintained by a church, or a convention or association of churches, including an organization described in section 414(e)(3)(A), to provide benefits under section 403(b) for an employee described in paragraph (1) (including an employee described in section 414(e)(3)(B)) or his beneficiaries.\nUnder regulations prescribed by the Secretary, this subsection shall not apply to any annuity contract (or to any custodial account described in paragraph (7) or retirement income account described in paragraph (9)) unless requirements similar to the requirements of sections 401(a)(9) and 401(a)(31) are met (and requirements similar to the incidental death benefit requirements of section 401(a) are met) with respect to such annuity contract (or custodial account or retirement income account). Any amount transferred in a direct trustee-to-trustee transfer in accordance with section 401(a)(31) shall not be includible in gross income for the taxable year of the transfer.\nFor purposes of paragraph (1)(D), the term “church” has the meaning given to such term by section 3121(w)(3)(A). Such term shall include any qualified church-controlled organization (as defined in section 3121(w)(3)(B)).\nFor purposes of paragraph (1)(D), the requirements of subparagraph (A)(i) (other than those relating to section 401(a)(17)) shall not apply to a governmental plan (within the meaning of section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof).\nThis subsection shall not apply to an annuity contract unless such contract meets the requirements of section 401(a)(37).\nExcept in the case of a church plan, this subsection shall not be treated as failing to apply to an annuity contract solely by reason of such contract being purchased under a plan maintained by more than 1 employer.\nIn the case of a plan maintained by more than 1 employer, this subsection shall not be treated as failing to apply to an annuity contract held under such plan merely because of one or more employers failing to meet the requirements of this subsection if such plan satisfies rules similar to the rules of section 413(e)(2) with respect to any such employer failure.\nA plan shall not be treated as meeting the requirements of this subparagraph unless the plan satisfies rules similar to the rules of subparagraph (A) or (B) of section 413(e)(1), except in the case of a multiple employer plan maintained solely by any of the following: A State, a political subdivision of a State, or an agency or instrumentality of any one or more of the foregoing.\nA safe harbor deferral-only plan maintained by an eligible employer shall be treated as meeting the requirements of paragraph (12).\nThe requirements of this subparagraph are met if, under the plan, each eligible employee is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation.\nFor purposes of this subparagraph, the term “qualified percentage” means, with respect to any employee, any percentage determined under the plan if such percentage is applied uniformly and is not less than 3 or more than 15 percent.\nIn the case of any calendar year beginning after  December 31, 2024 , the $6,000 amount under clause (i) shall be adjusted in the same manner as under section 402(g)(4), except that “2023” shall be substituted for “2005”.\nIn the case of an individual who has attained the age of 50 before the close of the taxable year, the limitation under clause (i)(II) shall be increased by the applicable amount determined under section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)).\nThe term “eligible employer” means any employer if the employer does not maintain a qualified plan with respect to which contributions are made, or benefits are accrued, for service in the year for which the determination is being made. If only individuals other than employees described in subparagraph (A) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees described in such subparagraph are eligible to participate.\nRules similar to the rules of section 408(p)(10) shall apply for purposes of clause (i).\nThe term “qualified plan” means a plan, contract, pension, account, or trust described in subparagraph (A) or (B) of paragraph (5) of section 219(g) (determined without regard to the last sentence of such paragraph (5)).\nFor purposes of this paragraph, the term “eligible employee” means any employee of the employer other than an employee who is permitted to be excluded under paragraph (12)(A).\nA distribution shall not be treated as failing to be made upon the hardship of an employee solely because the employee does not take any available loan under the plan.\nPremiums paid by an employer for an annuity contract which is not subject to subsection (a) shall be included in the gross income of the employee in accordance with section 83 (relating to property transferred in connection with performance of services), except that the value of such contract shall be substituted for the fair market value of the property for purposes of applying such section. The preceding sentence shall not apply to that portion of the premiums paid which is excluded from gross income under subsection (b). In the case of any portion of any contract which is attributable to premiums to which this subsection applies, the amount actually paid or made available under such contract to any beneficiary which is attributable to such premiums shall be taxable to the beneficiary (in the year in which so paid or made available) under section 72 (relating to annuities).\nPub. L. 117–328, div. T, title I, §\u202f125(a)(2)(A) , (B)(i), (f)(1),  Dec. 29, 2022 ,  136 Stat. 5314–5316 , provided that, applicable to plan years beginning after  Dec. 31, 2024 , subsection (b)(12) of this section is amended as follows:\n(1) in the last sentence of subparagraph (A), by inserting “and section 202(c) of the Employee Retirement Income Security Act of 1974” after “under section 410(b)(4)”; and\n(2) by adding at the end the following new subparagraph:\n“(D) Rules relating to certain part-time employees\n“(i) In general\n“In the case of employees who are eligible to participate in the agreement solely by reason of section 202(c)(1)(B) of the Employee Retirement Income Security Act of 1974—\n“(I) notwithstanding section 401(a)(4), an employer shall not be required to make nonelective or matching contributions on behalf of such employees even if such contributions are made on behalf of other employees eligible to participate in the plan, and\n“(II) the employer may elect to exclude such employees from the application of subsections (a)(4), (k)(3), (k)(12), (k)(13), and (m)(2) of section 401 and section 410(b).”\nSee 2022 Amendment notes below.\nPub. L. 117–328, div. T, title III, §\u202f334(b)(2) –(4), (e),  Dec. 29, 2022 ,  136 Stat. 5370 , 5372, provided that, applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , this section is amended as follows:\n(1) in subsection (a), by adding at the end the following new paragraph:\n(6) Qualified long-term care distributions\n“An annuity contract shall not fail to be subject to this subsection solely by reason of allowing distributions to which section 401(a)(39) applies.”; and\n(2) in subsection (b)—\n(A) in paragraph (7)(A)(i), by striking “or” at the end of subclause (V), by striking “and” at the end of subclause (VI) and inserting “or”, and by adding at the end the following new subclause:\n“(VII) as provided for distributions to which section 401(a)(39) applies, and”; and\n(B) in paragraph (11), by striking “or” at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting “,\u2000or”, and by inserting after subparagraph (D) the following new subparagraph:\n“(E) for distributions to which section 401(a)(39) applies.”\nSee 2022 Amendment notes below.\n2022—Subsec. (a)(6).  Pub. L. 117–328, §\u202f334(b)(2) , added par. (6).\nSubsec. (b)(7).  Pub. L. 117–328, §\u202f128(b) , struck out “for regulated investment company stock” after “Custodial accounts” in heading.\nSubsec. (b)(7)(A).  Pub. L. 117–328, §\u202f128(a) , in introductory provisions, substituted “if the amounts are to be held in that custodial account and are invested in regulated investment company stock or a group trust intended to satisfy the requirements of Internal Revenue Service Revenue Ruling 81–100 (or any successor guidance)” for “if the amounts are to be invested in regulated investment company stock to be held in that custodial account”.\nSubsec. (b)(7)(A)(i)(V).  Pub. L. 117–328, §\u202f602(b)(1) , substituted “subject to the provisions of paragraph (17)” for “in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D))”.\nSubsec. (b)(7)(A)(i)(VII).  Pub. L. 117–328, §\u202f334(b)(3) , added subcl. (VII).\nSubsec. (b)(7)(D).  Pub. L. 117–328, §\u202f312(b)(1) , added subpar. (D).\nSubsec. (b)(11).  Pub. L. 117–328, §\u202f602(b)(2)(B) , in concluding provisions, struck out “Such contract may not provide for the distribution of any income attributable to such contributions in the case of hardship.” before “In determining”.\nPub. L. 117–328, §\u202f312(b)(2) , in concluding provisions, inserted at end “In determining whether a distribution is upon hardship of an employee, the administrator of the plan may rely on a written certification by the employee that the distribution is on account of a financial need of a type which is deemed in regulations prescribed by the Secretary to be an immediate and heavy financial need and is not in excess of the amount required to satisfy such financial need, and that the employee has no alternative means reasonably available to satisfy such financial need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee’s certification, and for procedures for addressing cases of employee misrepresentation.”\nSubsec. (b)(11)(B).  Pub. L. 117–328, §\u202f602(b)(2)(A) , substituted “subject to the provisions of paragraph (17), in” for “in”.\nSubsec. (b)(11)(E).  Pub. L. 117–328, §\u202f334(b)(4) , added subpar. (E).\nSubsec. (b)(12)(A).  Pub. L. 117–328, §\u202f125(a)(2)(B)(i) , which directed that the “last sentence” of subpar. (A) be amended by inserting “and section 202(c) of the Employee Retirement Income Security Act of 1974” after “under section 410(b)(4)”, was executed by making the insertion after “under section 410(b)(4)” in what had been the last sentence of concluding provisions prior to amendments by  Pub. L. 117–328 , §§\u202f110(e), 113(b), to reflect the probable intent of Congress. See notes below.\nPub. L. 117–328, §\u202f113(b) , in concluding provisions, inserted at end “A plan shall not fail to satisfy clause (ii) solely by reason of offering a de minimis financial incentive (not derived from plan assets) to employees to elect to have the employer make contributions pursuant to a salary reduction agreement.”\nPub. L. 117–328, §\u202f110(e) , in concluding provisions, inserted at end “The fact that the employer offers matching contributions on account of qualified student loan payments as described in section 401(m)(13) shall not be taken into account in determining whether the arrangement satisfies the requirements of clause (ii) (and any regulation thereunder).”\nSubsec. (b)(12)(D).  Pub. L. 117–328, §\u202f125(a)(2)(A) , added subpar. (D).\nSubsec. (b)(15).  Pub. L. 117–328, §\u202f106(a) , added par. (15).\nSubsec. (b)(16).  Pub. L. 117–328, §\u202f121(b) , added par. (16).\nSubsec. (b)(17).  Pub. L. 117–328, §\u202f602(a) , added par. (17).\n2019—Subsec. (b)(7)(A).  Pub. L. 116–94, §\u202f109(c)(2) , substituted “if the amounts are to be invested in regulated investment company stock to be held in that custodial account, and under the custodial account—” for “if—” and cls. (i) and (ii) for former cls. (i) and (ii) which read as follows:\n“(i) the amounts are to be invested in regulated investment company stock to be held in that custodial account, and\n“(ii) under the custodial account no such amounts may be paid or made available to any distributee (unless such amount is a distribution to which section 72(t)(2)(G) applies) before the employee dies, attains age 59½, has a severance from employment, becomes disabled (within the meaning of section 72(m)(7)), or in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)), encounters financial hardship.”\nSubsec. (b)(9)(B).  Pub. L. 116–94, §\u202f111(a) , inserted “(including an employee described in section 414(e)(3)(B))” after “employee described in paragraph (1)”.\nSubsec. (b)(11)(D).  Pub. L. 116–94, §\u202f109(c)(1) , added subpar. (D).\n2008—Subsec. (b)(14).  Pub. L. 110–245  added par. (14).\n2006—Subsec. (a)(2).  Pub. L. 109–280, §\u202f845(b)(1) , added par. (2).\nSubsec. (a)(4)(B).  Pub. L. 109–280, §\u202f829(a)(2) , inserted “and (11)” after “(7)”.\nSubsec. (b)(2).  Pub. L. 109–280, §\u202f845(b)(2) , added par. (2).\nSubsec. (b)(7)(A)(ii).  Pub. L. 109–280, §\u202f827(b)(2) , inserted “(unless such amount is a distribution to which section 72(t)(2)(G) applies)” after “distributee”.\nSubsec. (b)(8)(B).  Pub. L. 109–280, §\u202f829(a)(3) , substituted “,\u2000(9), and (11)” for “and (9)”.\nSubsec. (b)(11)(C).  Pub. L. 109–280, §\u202f827(b)(3) , added subpar. (C).\n2005—Subsec. (b)(9)(B).  Pub. L. 109–135  inserted “or” before “a convention”.\n2004—Subsec. (a)(4)(B).  Pub. L. 108–311, §\u202f404(e) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Rules similar to the rules of paragraphs (2) through (7) of section 402(c) shall apply for purposes of subparagraph (A).”\nSubsec. (b)(7)(A)(ii).  Pub. L. 108–311, §\u202f408(a)(11) , substituted “3121(a)(5)(D)” for “3121(a)(1)(D)”.\n2002—Subsec. (b)(1).  Pub. L. 107–147, §\u202f411(p)(1) , inserted concluding provisions and struck out former concluding provisions which read as follows: “then amounts contributed by such employer for such annuity contract on or after such rights become nonforfeitable shall be excluded from the gross income of the employee for the taxable year to the extent that the aggregate of such amounts does not exceed the applicable limit under section 415. The amount actually distributed to any distributee under such contract shall be taxable to the distributee (in the year in which so distributed) under section 72 (relating to annuities). For purposes of applying the rules of this subsection to amounts contributed by an employer for a taxable year, amounts transferred to a contract described in this paragraph by reason of a rollover contribution described in paragraph (8) of this subsection or section 408(d)(3)(A)(ii) shall not be considered contributed by such employer.”\nSubsec. (b)(3).  Pub. L. 107–147, §\u202f411(p)(3) , in first sentence, inserted “,\u2000and which precedes the taxable year by no more than five years” before period at end and, in second sentence, struck out “or any amount received by a former employee after the fifth taxable year following the taxable year in which such employee was terminated” after “this subsection applies”.\nSubsec. (b)(6).  Pub. L. 107–147, §\u202f411(p)(2) , struck out heading and text of par. (6). Text read as follows: “For purposes of this subsection and section 72(f) (relating to special rules for computing employees’ contributions to annuity contracts), if rights of the employee under an annuity contract described in subparagraphs (A) and (B) of paragraph (1) change from forfeitable to nonforfeitable rights, then the amount (determined without regard to this subsection) includible in gross income by reason of such change shall be treated as an amount contributed by the employer for such annuity contract as of the time such rights become nonforfeitable.”\n2001—Subsec. (b)(1).  Pub. L. 107–16, §\u202f642(b)(1) , substituted “section 408(d)(3)(A)(ii)” for “section 408(d)(3)(A)(iii)” in concluding provisions.\nPub. L. 107–16, §\u202f632(a)(2)(A) , substituted “the applicable limit under section 415” for “the exclusion allowance for such taxable year” in concluding provisions.\nSubsec. (b)(2).  Pub. L. 107–16, §\u202f632(a)(2)(B) , struck out par. (2), which described exclusion allowance for purposes of subsec. (b) providing general criteria, determination under section 415 rules, number of years of service for duly ordained, commissioned, or licensed ministers or lay employees, and alternative exclusion allowance for such ministers or lay employees.\nSubsec. (b)(3).  Pub. L. 107–16, §\u202f632(a)(2)(C) , inserted “or any amount received by a former employee after the fifth taxable year following the taxable year in which such employee was terminated” before period at end of second sentence.\nSubsec. (b)(7)(A)(ii).  Pub. L. 107–16, §\u202f646(a)(2)(A) , substituted “has a severance from employment” for “separates from service”.\nSubsec. (b)(8)(A)(ii).  Pub. L. 107–16, §\u202f641(b)(1) , substituted “such distribution to an eligible retirement plan described in section 402(c)(8)(B), and” for “such distribution to an individual retirement plan or to an annuity contract described in paragraph (1), and”.\nSubsec. (b)(8)(B).  Pub. L. 107–16, §\u202f641(e)(7) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Rules similar to the rules of paragraphs (2) through (7) of section 402(c) (including paragraph (4)(C) thereof) shall apply for purposes of subparagraph (A).”\nSubsec. (b)(11).  Pub. L. 107–16, §\u202f646(a)(2)(B) , substituted “severance from employment” for “separation from service” in heading.\nSubsec. (b)(11)(A).  Pub. L. 107–16, §\u202f646(a)(2)(A) , substituted “has a severance from employment” for “separates from service”.\nSubsec. (b)(13).  Pub. L. 107–16, §\u202f647(a) , added par. (13).\n2000—Subsec. (b)(3)(B).  Pub. L. 106–554  substituted “section 125, 132(f)(4), or” for “section 125 or”.\n1998—Subsec. (b)(8)(B).  Pub. L. 105–206  inserted “(including paragraph (4)(C) thereof)” after “section 402(c)”.\n1997—Subsec. (b)(1)(A)(iii).  Pub. L. 105–34, §\u202f1601(d)(6)(B) , added cl. (iii).\nSubsec. (b)(3).  Pub. L. 105–34, §\u202f1504(a)(1) , inserted at end “Such term includes—” and subpars. (A) and (B).\nSubsec. (b)(12)(C).  Pub. L. 105–34, §\u202f1505(c) , added subpar. (C).\n1996—Subsec. (b)(1)(E).  Pub. L. 104–188, §\u202f1450(c)(1) , amended subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: “in the case of a contract purchased under a plan which provides a salary reduction agreement, the plan meets the requirements of section 401(a)(30),”.\nSubsec. (b)(10).  Pub. L. 104–188, §\u202f1704(t)(69) , substituted “a direct” for “an direct” in last sentence.\n1992—Subsec. (a)(4)(A)(i).  Pub. L. 102–318, §\u202f521(b)(12)(A) , inserted before comma at end “in an eligible rollover distribution (within the meaning of section 402(c)(4))”.\nSubsec. (a)(4)(B).  Pub. L. 102–318, §\u202f521(b)(12)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Rules similar to the rules of subparagraphs (B) through (G) of section 402(a)(5) and of paragraphs (6) and (7) of section 402(a) shall apply for purposes of subparagraph (A).”\nSubsec. (a)(5).  Pub. L. 102–318, §\u202f522(c)(2) , added par. (5).\nSubsec. (b)(8)(A)(i).  Pub. L. 102–318, §\u202f521(b)(13)(A) , inserted before comma at end “in an eligible rollover distribution (within the meaning of section 402(c)(4))”.\nSubsec. (b)(8)(B) to (D).  Pub. L. 102–318, §\u202f521(b)(13)(B) , added subpar. (B) and struck out former subpars. (B) to (D), which related to special rules for partial distributions, applicability of certain similar rules, and eligibility for rollover treatment of required distributions.\nSubsec. (b)(10).  Pub. L. 102–318, §\u202f522(a)(3) , (c)(3), substituted “sections 401(a)(9) and 401(a)(31)” for “section 401(a)(9)” and inserted at end “Any amount transferred in an direct trustee-to-trustee transfer in accordance with section 401(a)(31) shall not be includible in gross income for the taxable year of the transfer.”\n1990—Subsec. (b)(12)(A).  Pub. L. 101–508  inserted “involving a one-time irrevocable election” after “similar arrangement” in second sentence.\n1988—Subsec. (b)(1)(D).  Pub. L. 100–647, §\u202f1011(m)(1)(B) , substituted “paragraph (12)” for “paragraph (10)”.\nSubsec. (b)(1)(E).  Pub. L. 100–647, §\u202f1011(c)(7)(B) , added subpar. (E).\nSubsec. (b)(10).  Pub. L. 100–647, §\u202f1011(m)(1)(A) , redesignated par. (10), relating to nondiscrimination requirements, as (12).\nSubsec. (b)(12).  Pub. L. 100–647, §\u202f1011(m)(1)(A) , redesignated par. (10), relating to nondiscrimination requirements, as (12).\nSubsec. (b)(12)(A).  Pub. L. 100–647, §\u202f1011(m)(2) , inserted “(17),” after “paragraphs (4), (5),” and “,\u2000section 401(m),” after “of section 401(a)” in cl. (i).\nPub. L. 100–647, §\u202f1011(c)(12) , inserted after cl. (ii) “For purposes of clause (i), a contribution shall be treated as not made pursuant to a salary reduction agreement if under the agreement it is made pursuant to a 1-time irrevocable election made by the employee at the time of initial eligibility to participate in the agreement or is made pursuant to a similar arrangement specified in regulations.”\nPub. L. 100–647, §\u202f6052(a)(1) , amended last sentence generally. Prior to amendment, last sentence read as follows: “For purposes of this subparagraph, students who normally work less than 20 hours per week may (subject to the conditions applicable under section 410(b)(4)) be excluded.”\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1122(d)(1) , substituted “Distributee taxable under section 72” for “General rule” in heading and amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Except as provided in paragraph (2), if an annuity contract is purchased by an employer for an employee under a plan which meets the requirements of section 404(a)(2) (whether or not the employer deducts the amounts paid for the contract under such section), the employee shall include in his gross income the amounts received under such contract for the year received as provided in section 72 (relating to annuities).”\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f1122(b)(1)(B) , struck out par. (2) which read as follows:\n“(A) General rule\n“If—\n“(i) an annuity contract is purchased by an employer for an employee under a plan described in paragraph (1);\n“(ii) such plan requires that refunds of contributions with respect to annuity contracts purchased under such plan be used to reduce subsequent premiums on the contracts under the plan; and\n“(iii) a lump sum distribution (as defined in section 402(e)(4)(A)) is paid to the recipient,\nso much of the total taxable amount (as defined in section 402(e)(4)(D)) of such distribution as is equal to the product of such total taxable amount multiplied by the fraction described in section 402(a)(2) shall be treated as a gain from the sale or exchange of a capital asset held for more than 6 months. For purposes of this paragraph, in the case of an individual who is an employee without regard to section 401(c)(1), determination of whether or not any distribution is a lump sum distribution shall be made without regard to the requirement that an election be made under subsection (e)(4)(B) of section 402, but no distribution to any taxpayer other than an individual, estate, or trust may be treated as a lump sum distribution under this paragraph.\n“(B) Cross reference\n“For imposition of separate tax on ordinary income portion of lump sum distribution, see section 402(e).”\nSubsec. (a)(4)(B).  Pub. L. 99–514, §\u202f1852(a)(5)(B)(i) , substituted “through (G)” for “through (F)”.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1122(d)(2) , amended second sentence generally. Prior to amendment, second sentence read as follows: “The employee shall include in his gross income the amounts received under such contract for the year received as provided in section 72 (relating to annuities)”.\nSubsec. (b)(1)(D).  Pub. L. 99–514, §\u202f1120(a) , added subpar. (D).\nSubsec. (b)(7)(A)(ii).  Pub. L. 99–514, §\u202f1123(c)(2) , inserted “in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(1)(D)),” after “section 72(m)(7)), or”.\nSubsec. (b)(7)(D).  Pub. L. 99–514, §\u202f1852(a)(3)(B) , struck out subpar. (D) “Distribution requirements” which read as follows: “For purposes of determining when the interest of an employee in a custodial account must be distributed, such account shall be treated in the same manner as an annuity contract.”\nSubsec. (b)(8)(C).  Pub. L. 99–514, §\u202f1852(b)(10) , inserted “and” before “(F)(i)”.\nSubsec. (b)(8)(D).  Pub. L. 99–514, §\u202f1852(a)(5)(B)(ii) , added subpar. (D).\nSubsec. (b)(10).  Pub. L. 99–514, §\u202f1120(b) , added par. (10) relating to nondiscrimination requirements.\nPub. L. 99–514, §\u202f1852(a)(3)(A) , added par. (10) relating to distribution requirements.\nSubsec. (b)(11).  Pub. L. 99–514, §\u202f1123(c)(1) , added par. (11).\nSubsec. (c).  Pub. L. 99–514, §\u202f1122(d)(3) , amended last sentence generally. Prior to amendment, last sentence read as follows: “The amount actually paid or made available to any beneficiary under such contract shall be taxable to him in the year in which so paid or made available under section 72 (relating to annuities).”\n1984—Subsec. (a)(2)(A).  Pub. L. 98–369, §\u202f1001(b)(4) , substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (a)(4)(A)(i).  Pub. L. 98–369, §\u202f522(a)(2) , substituted “any portion of the balance to the credit of an employee in an employee annuity described in paragraph (1) is paid to him,” for “the balance to the credit of an employee in an employee annuity described in paragraph (1) is paid to him in a qualifying rollover distribution.”\nSubsec. (a)(4)(B).  Pub. L. 98–369, §\u202f522(d)(9) , substituted “(B) through (F)” for “(B) through (E)”.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f491(d)(12) , struck out “or 409(b)(3)(C)” after “408(d)(3)(A)(iii)”.\nSubsec. (b)(7)(D).  Pub. L. 98–369, §\u202f521(c) , added subpar. (D).\nSubsec. (b)(8)(A)(i).  Pub. L. 98–369, §\u202f522(a)(3) , substituted “any portion of the balance to the credit of an employee in an annuity contract described in paragraph (1) is paid to him” for “the balance to the credit of an employee is paid to him in a qualifying distribution”.\nSubsec. (b)(8)(B).  Pub. L. 98–369, §\u202f522(d)(10) , substituted provisions relating to special rules for partial distributions for provisions relating to definition of qualifying distributions.\nSubsec. (b)(8)(C).  Pub. L. 98–369, §\u202f522(d)(11) , substituted “(F)(i)” for “(D)(v), and (E)(i)”.\n1983—Subsec. (b)(3).  Pub. L. 98–21  substituted “section 911” for “sections 105(d) and 911”.\nSubsec. (b)(8)(C).  Pub. L. 97–448  substituted “subparagraphs (B), (C), (D)(v), and (E)(i) of section 402(a)(5)” for “subparagraphs (B), (C), and (E)(i) of section 402(a)(5)”.\n1982—Subsec. (b)(2)(B).  Pub. L. 97–248, §\u202f251(a)(1) , (c)(3), substituted “home health service agencies, and certain churches, etc.” for “and home health service agencies”, and “(under section 415 without regard to section 415(c)(8))” for “(under section 415)”.\nSubsec. (b)(2)(C), (D).  Pub. L. 97–248, §\u202f251(a)(2) , added subpars. (C) and (D).\nSubsec. (b)(9).  Pub. L. 97–248, §\u202f251(b) , added par. (9).\n1981—Subsec. (b)(8)(B)(i).  Pub. L. 97–34  inserted “,\u2000or 1 or more distributions of accumulated deductible employee contributions (within the meaning of section 72( o )(5))” after “subsection (a)”.\n1980—Subsec. (b).  Pub. L. 96–222  substituted in par. (1) “409(b)(3)(C)” for “409(d)(3)(C)”, and in par. (7)(A) “which satisfies” for “which satisfied”.\n1978—Subsec. (a)(4).  Pub. L. 95–600, §\u202f157(g)(2) , in subpar. (B) substituted “paragraphs (6) and (7)” for “paragraph (6)”.\nPub. L. 95–458 , among other changes, substituted provision permitting tax free treatment for any portion of a lump sum distribution from a qualified retirement plan which is deposited in an individual retirement account or another qualifying plan for provision which required transfer of all such property received.\nSubsec. (a)(5).  Pub. L. 95–458  struck out par. (5) which related to special rules concerning time of termination of a profit-sharing plan and the treatment of the sale of a corporate subsidiary or assets as payment or distribution on account of termination of a plan of which an annuity trust was a part.\nSubsec. (b)(1).  Pub. L. 95–600, §\u202f156(b) , inserted provision relating to application of rules of this subsection to amounts contributed by an employer for a taxable year.\nSubsec. (b)(7)(A).  Pub. L. 95–600, §\u202f154(a) , struck out “the amounts are paid to provide a retirement benefit for that employee and are to be invested in regulated investment company stock to be held in that custodial account” after “contract for his employee if”, and added cls. (i) and (ii).\nSubsec. (b)(8).  Pub. L. 95–600, §\u202f156(a) , added par. (8).\n1976—Subsec. (a)(2)(A).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)  (1)(D), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (a)(4).  Pub. L. 94–455, §\u202f1901(a)(58) , reenacted provisions following subpar. (C) without substantive change.\nPub. L. 94–267, §\u202f1(b)(2) , substituted “a payment” for “the lump-sum distribution”.\nSubsec. (a)(4)(A).  Pub. L. 94–267, §\u202f1(b)(1) , restructured provisions by adding cl. (i) and designating existing provision as cl. (ii).\nSubsec. (a)(5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nPub. L. 94–267, §\u202f1(b)(3) , added par. (5).\nSubsec. (b)(1)(A)(ii).  Pub. L. 94–455, §\u202f1901(b)(8)(A) , substituted “educational organization described in section 170(b)(1)(A)(ii)” for “educational institution (as defined in section 151(e)(4))”.\nSubsec. (b)(4)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(7)(C).  Pub. L. 94–455, §\u202f1504(a) , struck out “,\u2000and which issues only redeemable stock” after “regulated investment company within the meaning of section 851(a)”.\n1974—Subsec. (a)(2).  Pub. L. 93–406, §\u202f2005(b)(2) , substituted “a lump sum distribution (as defined in section 4002(e)(4)(A)) is paid to the recipient” for “the total amounts payable by reason of an employee’s death or other separation from the service, or by reason of the death of an employee after the employee’s separation from the service, are paid to the payee within one taxable year of the payee” as cl. (iii) of subpar. (A), substituted “so much of the total taxable amount (as defined in section 402(e)(4)(D)) of such distribution as is equal to the product of such total taxable amount multiplied by the fraction described in section 402(a)(2) shall be treated as a gain from the sale or exchange of a capital asset held for more than 6 months. For purposes of this paragraph, in the case of an individual who is an employee without regard to section 401(c)(1), determination of whether or not any distribution is a lump sum distribution shall be made without regard to the requirement that an election be made under subsection (e)(4)(B) of section 402, but no distribution to any taxpayer other than an individual, estate, or trust may be treated as a lump sum distribution under this paragraph” for “then the amount of such payments, to the extent exceeding the amount contributed by the employee (determined by applying section 72(f)), which employee contributions shall be reduced by any amounts theretofore paid to him which were not includible in gross income, shall be considered a gain from the sale or exchange of a capital asset held for more than 6 months. This subparagraph shall not apply to amounts paid to any payee to the extent such amounts are attributable to contributions made on behalf of the employee while he was an employee within the meaning of section 401(c)(1)” following cl. (iii) of subpar. (A), substituted provisions setting out a cross reference to section 402(e) for provisions defining “total amounts” as subpar. (B), and struck out subpar. (C) setting out limitations on capital gains treatment.\nSubsec. (a)(4).  Pub. L. 93–406, §\u202f2002(g)(6) , added par. (4).\nSubsec. (b)(2).  Pub. L. 93–406, §\u202f2004(c)(4) , designated existing provisions as subpar. (A) and added subpar. (B).\nSubsec. (b)(7).  Pub. L. 93–406, §\u202f1022(e) , added par. (7).\n1969—Subsec. (a)(2)(C).  Pub. L. 91–172, §\u202f515(a)(2) , added subpar. (C).\nSubsec. (c).  Pub. L. 91–172, §\u202f321(b)(2) , consolidated provisions of subsec. (c) providing for taxability of beneficiary under a nonqualified annuity, the employees gross income to include amount contributed by employer for annuity contract in the year in which amount is contributed, the amount to be included as provided in  section 72 of this title  and of subsec. (d) providing for taxability of beneficiary under certain forfeitable contracts purchased by exempt organizations, including farmers’ cooperatives, the gross income to include amount contributed by employer after  Dec. 31, 1957 , in the year of change from forfeitable to nonforfeitable rights, the new provisions including premiums paid by an employer in accordance with section 83, except that value of the contract shall be substituted for fair market value of the property for purposes of applying such section 83, such provision not to be applicable to that portion of premiums paid which is excluded from gross income under subsec. (b) of this section.\nSubsec. (d).  Pub. L. 91–172, §\u202f321(b)(2) , struck out subsec. (d) providing for taxability of beneficiary under certain forfeitable contracts purchased by exempt organizations, including farmers’ cooperatives, gross income of the employee to include (amount contributed by employer after  Dec. 31, 1957 ), in year of change from forfeitable to nonforfeitable rights. See subsec. (c) of this section.\n1964—Subsecs. (a)(1), (b)(1), (c).  Pub. L. 88–272, §\u202f232(e)(4) –(6), struck out “except that section 72(e)(3) shall not apply” after “(relating to annuities)”.\n1962—Subsec. (a)(2)(A).  Pub. L. 87–792, §\u202f4(d)(1) , (2), substituted “described in paragraph (1)” for “which meets the requirements of section 401(a)(3), (4), (5), and (6)” in cl. (i), and inserted sentence at end thereof providing that this subparagraph shall not apply to amounts paid to any payee to the extent such amounts are attributable to contributions made on behalf of the employee while he was an employee within the meaning of section 401(c)(1).\nSubsec. (a)(3).  Pub. L. 87–792, §\u202f4(d)(3) , added par. (3).\n1961—Subsec. (b).  Pub. L. 87–370, §\u202f3(a)(3) , inserted “or public school” in heading.\nSubsec. (b)(1)(A).  Pub. L. 87–370, §\u202f3(a)(1) , included annuity contracts purchased for an employee, other than one described in clause (i) of this subpar., who performs services for an educational institution, as defined in  section 151(e)(4) of this title , by an employer which is a State, a political subdivision of a State, or an agency or instrumentality of either.\nSubsec. (b)(3).  Pub. L. 87–370 , §\u202f(3)(a)(2), substituted “the employer described in paragraph (1)(A)” for “the employer described in section 501(c)(3) and exempt from tax under section 501(a)”.\n1958—Subsec. (a)(1).  Pub. L. 85–866, §\u202f23(b) , substituted “which meets the requirements of section 404(a)(2) (whether or not the employer deducts the amounts paid for the contract under such section),” for “with respect to which the employer’s contribution is deductible under section 404(a)(2), or if an annuity contract is purchased for an employee by an employer described in section 501(c)(3) which is exempt from tax under section 501(a),”.\nSubsecs. (b) to (d).  Pub. L. 85–866, §\u202f23(a) , added subsec. (b), redesignated former subsec. (b) as (c), and added subsec. (d).\nPub. L. 117–328, div. T, title I, §\u202f106(h)(1) ,  Dec. 29, 2022 ,  136 Stat. 5289 , provided that:  “The amendments made by this section [amending this section, sections 6057 and 6058 of this title, and  section 1002 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2022 .”\nAmendment by  section 110(e) of Pub. L. 117–328  applicable to contributions made for plan years beginning after  Dec. 31, 2023 , see  section 110(h) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by  section 113(b) of Pub. L. 117–328  applicable with respect to plan years beginning after  Dec. 29, 2022 , see  section 113(e) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by  section 121(b) of Pub. L. 117–328  applicable to plan years beginning after  Dec. 31, 2023 , see  section 121(d) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by section 125(a)(2)(A), (B)(i) of  Pub. L. 117–328  applicable to plan years beginning after  Dec. 31, 2024 , see  section 125(f)(1) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title I, §\u202f128(c) ,  Dec. 29, 2022 ,  136 Stat. 5330 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts invested after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nAmendment by  section 312(b) of Pub. L. 117–328  applicable to plan years beginning after  Dec. 29, 2022 , see  section 312(d) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by section 334(b)(2)–(4) of  Pub. L. 117–328  applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , see  section 334(e) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nPub. L. 117–328, div. T, title VI, §\u202f602(c) ,  Dec. 29, 2022 ,  136 Stat. 5391 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2023 .”\nAmendment by  section 109(c) of Pub. L. 116–94  applicable to plan years beginning after  Dec. 31, 2019 , see  section 109(e) of Pub. L. 116–94 , set out as a note under  section 401 of this title .\nPub. L. 116–94, div. O, title I, §\u202f111(b) ,  Dec. 20, 2019 ,  133 Stat. 3152 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning before, on, or after the date of the enactment of this Act [ Dec. 20, 2019 ].”\nAmendment by  Pub. L. 110–245  applicable with respect to deaths and disabilities occurring on or after  Jan. 1, 2007 , see  section 104(d)(1) of Pub. L. 110–245 , set out as a note under  section 401 of this title .\nAmendment by section 827(b)(2), (3) of  Pub. L. 109–280  applicable to distributions after  Sept. 11, 2001 , with waiver of limitations if refund or credit of overpayment of tax resulting from such amendment is prevented before the close of the 1-year period beginning on  Aug. 17, 2006 , see  section 827(c) of Pub. L. 109–280 , set out as a note under  section 72 of this title .\nAmendment by section 829(a)(2), (3) of  Pub. L. 109–280  applicable to distributions after  Dec. 31, 2006 , see  section 829(b) of Pub. L. 109–280 , set out as a note under  section 402 of this title .\nAmendment by section 845(b)(1), (2) of  Pub. L. 109–280  applicable to distributions in taxable years beginning after  Dec. 31, 2006 , see  section 845(c) of Pub. L. 109–280 , set out as a note under  section 402 of this title .\nAmendment by  section 404(e) of Pub. L. 108–311  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 404(f) of Pub. L. 108–311 , set out as a note under  section 45A of this title .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  section 632(a)(2) of Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 632(a)(4) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nAmendment by section 641(b)(1), (e)(7) of  Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nAmendment by  section 642(b)(1) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 642(c) of Pub. L. 107–16 , set out as a note under  section 408 of this title .\nAmendment by  section 646(a)(2) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 646(b) of Pub. L. 107–16 , set out as a note under  section 401 of this title .\nPub. L. 107–16, title VI, §\u202f647(c) ,  June 7, 2001 ,  115 Stat. 127 , provided that:  “The amendments made by this section [amending this section and  section 457 of this title ] shall apply to trustee-to-trustee transfers after  December 31, 2001 .”\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 1(a)(7) [title III, §\u202f314(g)] of  Pub. L. 106–554 , set out as a note under  section 56 of this title .\nAmendment by  section 6005 of Pub. L. 105–206  applicable to distributions after  Dec. 31, 1998 , see  section 6005(c)(2)(C) of Pub. L. 105–206 , set out as a note under  section 402 of this title .\nPub. L. 105–34, title XV, §\u202f1504(a)(2) ,  Aug. 5, 1997 ,  111 Stat. 1063 , provided that:  “The amendment made by this subsection [amending this section] shall apply to years beginning after  December 31, 1997 .”\nAmendment by  section 1505(c) of Pub. L. 105–34  applicable to taxable years beginning on or after  Aug. 5, 1997 , with certain governmental plans treated as satisfying requirements for all taxable years beginning before  Aug. 5, 1997 , see  section 1505(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by  section 1601(d)(6)(B) of Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nPub. L. 104–188, title I, §\u202f1450(c)(2) ,  Aug. 20, 1996 ,  110 Stat. 1815 , provided that:  “The amendment made by this subsection [amending this section] shall apply to years beginning after  December 31, 1995 , except a contract shall not be required to meet any change in any requirement by reason of such amendment before the 90th day after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nAmendment by section 521(b)(12), (13) of  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by section 522(a)(3), (c)(2), (3) of  Pub. L. 102–318  applicable, except as otherwise provided, to distributions after  Dec. 31, 1992 , see  section 522(d) of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 101–508  effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989,  Pub. L. 101–239, title VII , to which such amendment relates, see  section 11701(n) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  section 1011(c)(7)(B) of Pub. L. 100–647  applicable to plan years beginning after  Dec. 31, 1987 , with exception in case of a plan described in  section 1105(c)(2) of Pub. L. 99–514 , see  section 1011(c)(7)(E) of Pub. L. 100–647 , set out as a note under  section 401 of this title .\nAmendment by section 1011(c)(12), (m)(1), (2) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6052(a)(2) ,  Nov. 10, 1988 ,  102 Stat. 3696 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendment made by section 1120(b) of the Reform Act [ Pub. L. 99–514 ].”\nPub. L. 99–514, title XI, §\u202f1120(c) ,  Oct. 22, 1986 ,  100 Stat. 2464 , as amended by  Pub. L. 100–647, title I, §\u202f1011(m)(3) ,  Nov. 10, 1988 ,  102 Stat. 3471 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to years beginning after  December 31, 1988 . \n \n “(2)   Collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to plan years beginning before the earlier of— “(A)   January 1, 1991 , or \n \n “(B)  the later of— “(i)   January 1, 1989 , or \n \n “(ii)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ).”\nAmendment by section 1122(b)(1)(B), (d) of  Pub. L. 99–514  applicable, except as otherwise provided, to amounts distributed after  Dec. 31, 1986 , in taxable years ending after such date, see  section 1122(h) of Pub. L. 99–514 , set out as a note under  section 402 of this title .\nAmendment by  section 1123(c) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , but only with respect to distributions from contracts described in subsec. (b) of this section which are attributable to assets other than assets held as of the close of the last year beginning before  Jan. 1, 1989 , with certain exceptions and transition rule, see  section 1123(e) of Pub. L. 99–514 , as amended, set out as a note under  section 72 of this title .\nPub. L. 99–514, title XVIII, §\u202f1852(a)(3)(C) ,  Oct. 22, 1986 ,  100 Stat. 2865 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to benefits accruing after  December 31, 1986 , in taxable years ending after such date.”\nAmendment by section 1852(a)(5)(B), (b)(10) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 491(d)(12) of Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  section 521(c) of Pub. L. 98–369  applicable to years beginning after  Dec. 31, 1984 , see  section 521(e) of Pub. L. 98–369 , set out as a note under  section 401 of this title .\nAmendment by  section 522 of Pub. L. 98–369  applicable to distributions made after  July 18, 1984 , in taxable years ending after that date, see  section 522(e) of Pub. L. 98–369 , set out as a note under  section 402 of this title .\nAmendment by  section 1001(b)(4) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under  section 105(d)(6) of this title  as in effect on the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title II, §\u202f251(e) ,  Sept. 3, 1982 ,  96 Stat. 531 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 ;  Pub. L. 114–113, div. Q, title III, §\u202f336(b)(1) ,  Dec. 18, 2015 ,  129 Stat. 3110 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and  section 415 of this title , and enacting a provision set out as a note below] shall apply to taxable years beginning after  December 31, 1981 . \n \n “(2)   Retirement income accounts .— The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1974 . \n \n “(3)   Section 415 amendments .— The amendments made by subsection (c) [amending  section 415 of this title ] shall apply to years beginning after  December 31, 1981 . \n \n “(4)   Correction period .— The amendment made by subsection (d) [enacting provisions set out below] shall take effect on  July 1, 1982 . \n \n “(5)   Special rule for existing defined benefit arrangements .— Any defined benefit arrangement which is established by a church or a convention or association of churches (including an organization described in section 414(e)(3)(B)(ii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) and which is in effect on the date of the enactment of this Act [ Sept. 3, 1982 ] shall not be treated as failing to meet the requirements of section 403(b) of such Code merely because it is a defined benefit arrangement, and shall be subject to the applicable limitations of section 415(b) of such Code as if it were a defined benefit plan under section 401(a) of such Code (and not to the limitations of section 415(c) of such Code)..[sic]”\n[ Pub. L. 114–113, div. Q, title III, §\u202f336(b)(2) ,  Dec. 18, 2015 ,  129 Stat. 3110 , provided that:  “The amendments made by this subsection [amending  section 251(e)(5) of Pub. L. 97–248 , set out above] shall apply to years beginning before, on, or after the date of the enactment of this Act [ Dec. 18, 2015 ].” \n]\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 311(i)(1) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f154(b) ,  Nov. 6, 1978 ,  92 Stat. 2801 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 95–600, title I, §\u202f156(d) ,  Nov. 6, 1978 ,  92 Stat. 2803 , as amended by  Pub. L. 96–222, title I, §\u202f101(a)(13)(A) ,  Apr. 1, 1980 ,  94 Stat. 204 , provided that:  “The amendments made by this section [amending this section and sections 219, 220, 408, 409, 2039, and 4973] shall apply to distributions or transfers made after  December 31, 1977 , in taxable years beginning after such date.”\nAmendment by  section 157(g)(2) of Pub. L. 95–600  applicable to lump-sum distributions completed after  Dec. 31, 1978 , in taxable years ending after such date, see  section 157(g)(4) of Pub. L. 95–600 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 95–458  applicable with respect to taxable years beginning after  Dec. 31, 1974 , see  section 4(d) of Pub. L. 95–458 , set out as a note under  section 402 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 94–455, title XIV, §\u202f1504(b) ,  Oct. 4, 1976 ,  90 Stat. 1738 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nAmendment by section 1901(a)(58), (b)(8)(A) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 94–267  applicable with respect to payments made to an employee on or after  July 4, 1974 , see  section 1(e) of Pub. L. 94–267 , set out as a note under  section 401 of this title .\nPub. L. 93–406, title II, §\u202f1022(e) ,  Sept. 2, 1974 ,  88 Stat. 940 , provided that the amendment made by that section is effective  Jan. 1, 1974 .\nAmendment by  section 2002(g)(6) of Pub. L. 93–406  applicable on and after  Sept. 2, 1974 , with respect to contributions to an employees’ trust described in section 401(a) which is exempt from tax under section 501(a) or an annuity plan described in section 403(a), see  section 2002(i)(3) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  section 2004(c)(4) of Pub. L. 93–406  applicable to years beginning after  Dec. 31, 1975 , see  section 2004(d) of Pub. L. 93–406 , set out as an Effective Date; Transition Provisions note under  section 415 of this title .\nAmendment by  section 2005(b)(2) of Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  section 321(b)(2) of Pub. L. 91–172  applicable with respect to contributions made and premiums paid after  Aug. 1, 1969 , see  section 321(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 83 of this title .\nAmendment by  section 515(a)(2) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 515(d) of Pub. L. 91–172 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 232(g) of Pub. L. 88–272 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nPub. L. 87–370, §\u202f3(b) ,  Oct. 4, 1961 ,  75 Stat. 801 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 .”\nPub. L. 85–866, §\u202f23(g) ,  Sept. 2, 1958 ,  72 Stat. 1623 , provided that:  “The amendments made by subsections (a), (b), (c), and (d) [amending this section and  section 101 of this title ] shall apply with respect to taxable years beginning after  December 31, 1957 . The amendments made by subsection (e) [amending  section 2039 of this title ] shall apply with respect to estates of decedents dying after  December 31, 1957 . The amendments made by subsection (f) [amending  section 2517 of this title ] shall apply with respect to calendar years after 1957.”\nPub. L. 117–328, div. T, title I, §\u202f106(e) ,  Dec. 29, 2022 ,  136 Stat. 5288 , provided that:  “The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations as may be necessary to clarify, in the case of plans to which section 403(b)(15) of the Internal Revenue Code of 1986 applies, the treatment of an employer departing such plan in connection with such employer’s failure to meet multiple employer plan requirements.”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1120 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title I, §\u202f106(h)(2) ,  Dec. 29, 2022 ,  136 Stat. 5289 , provided that:  “Nothing in the amendments made by subsection (a) [amending this section] shall be construed as limiting the authority of the Secretary of the Treasury or the Secretary’s delegate (determined without regard to such amendment) to provide for the proper treatment of a failure to meet any requirement applicable under the Internal Revenue Code of 1986 with respect to one employer (and its employees) in the case of a plan to which section 403(b)(15) of the Internal Revenue Code of 1986 applies.”\nPub. L. 117–328, div. T, title I, §\u202f106(g) ,  Dec. 29, 2022 ,  136 Stat. 5288 , provided that:  “Regarding any application of section 403(b) of the Internal Revenue Code of 1986 to an annuity contract purchased under a church plan (as defined in section 414(e) of such Code) maintained by more than 1 employer, or to any application of rules similar to section 413(e) of such Code to such a plan, no inference shall be made from section 403(b)(15)(A) of such Code (as added by this Act [div. T of  Pub. L. 117–328 ]) not applying to such plans.”\nPub. L. 116–94, div. O, title I, §\u202f110 ,  Dec. 20, 2019 ,  133 Stat. 3152 , provided that:  “Not later than six months after the date of enactment of this Act [ Dec. 20, 2019 ], the Secretary of the Treasury shall issue guidance to provide that, if an employer terminates the plan under which amounts are contributed to a custodial account under subparagraph (A) of section 403(b)(7), the plan administrator or custodian may distribute an individual custodial account in kind to a participant or beneficiary of the plan and the distributed custodial account shall be maintained by the custodian on a tax-deferred basis as a section 403(b)(7) custodial account, similar to the treatment of fully-paid individual annuity contracts under Revenue Ruling 2011–7, until amounts are actually paid to the participant or beneficiary. The guidance shall provide further (i) that the section 403(b)(7) status of the distributed custodial account is generally maintained if the custodial account thereafter adheres to the requirements of section 403(b) that are in effect at the time of the distribution of the account and (ii) that a custodial account would not be considered distributed to the participant or beneficiary if the employer has any material retained rights under the account (but the employer would not be treated as retaining material rights simply because the custodial account was originally opened under a group contract). Such guidance shall be retroactively effective for taxable years beginning after  December 31, 2008 .”\nPub. L. 107–16, title VI, §\u202f632(b)(3) ,  June 7, 2001 ,  115 Stat. 115 , provided that:  “In the case of taxable years beginning after  December 31, 1999 , and before  January 1, 2002 , a plan may disregard the requirement in the regulations regarding the exclusion allowance under section 403(b)(2) of the Internal Revenue Code of 1986 that contributions to a defined benefit pension plan be treated as previously excluded amounts for purposes of the exclusion allowance.”\nPub. L. 105–34, title XVI, §\u202f1601(d)(4) ,  Aug. 5, 1997 ,  111 Stat. 1089 , as amended by  Pub. L. 105–206, title VI, §\u202f6016(a)(2) ,  July 22, 1998 ,  112 Stat. 822 , provided that: \n “(A)  Paragraphs (7)(A)(ii) and (11) of section 403(b) of the Internal Revenue Code of 1986 shall not apply with respect to a distribution from a contract described in section 1450(b)(1) of such Act [ Pub. L. 104–188 , set out below] to the extent that such distribution is not includible in income by reason of— “(i)  in the case of distributions before  January 1, 1998 , section 403(b)(8) or (b)(10) of such Code (determined after the application of section 1450(b)(2) of such Act [ Pub. L. 104–188 , set out below]), and \n \n “(ii)  in the case of distributions on and after such date, such section 403(b)(10). \n \n \n “(B)  This paragraph shall apply as if included in section 1450 of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 , set out below].”\nPub. L. 104–188, title I, §\u202f1450(a) , (b),  Aug. 20, 1996 ,  110 Stat. 1814 , provided that: \n “(a)   Multiple Salary Reduction Agreements Permitted.— “(1)   General rule .— For purposes of section 403(b) of the Internal Revenue Code of 1986, the frequency that an employee is permitted to enter into a salary reduction agreement, the salary to which such an agreement may apply, and the ability to revoke such an agreement shall be determined under the rules applicable to cash or deferred elections under section 401(k) of such Code. \n \n “(2)   Constructive receipt .— \n [Amended  section 402 of this title .] \n \n “(3)   Effective date .— This subsection shall apply to taxable years beginning after  December 31, 1995 . \n \n \n “(b)   Treatment of Indian Tribal Governments.— “(1)   In general .— In the case of any contract purchased in a plan year beginning before  January 1, 1995 , section 403(b) of the Internal Revenue Code of 1986 shall be applied as if any reference to an employer described in section 501(c)(3) of the Internal Revenue Code of 1986 which is exempt from tax under section 501 of such Code included a reference to an employer which is an Indian tribal government (as defined by section 7701(a)(40) of such Code), a subdivision of an Indian tribal government (determined in accordance with section 7871(d) of such Code), an agency or instrumentality of an Indian tribal government or subdivision thereof, or a corporation chartered under Federal, State, or tribal law which is owned in whole or in part by any of the foregoing. \n \n “(2)   Rollovers .— Solely for purposes of applying section 403(b)(8) of such Code to a contract to which paragraph (1) applies, a qualified cash or deferred arrangement under section 401(k) of such Code shall be treated as if it were a plan or contract described in clause (ii) of section 403(b)(8)(A) of such Code.”\n[Amended  section 402 of this title .]\nPub. L. 100–647, title VI, §\u202f6052(b) ,  Nov. 10, 1988 ,  102 Stat. 3696 , provided that:  \n “In the case of plan years beginning in 1989, 1990, or 1991, determinations as to whether a plan meets the requirements of section 403(b)(12) of the 1986 Code may be made on the basis of a statistically valid random sample. The preceding sentence shall apply only if— \n “(1)  the sampling is conducted by an independent person in a manner not inconsistent with regulations prescribed by the Secretary, and \n \n “(2)  the statistical method and sample size result in a 95 percent probability that the results will have a margin of error not greater than 3 percent.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 97–248, title II, §\u202f251(d) ,  Sept. 3, 1982 ,  96 Stat. 531 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “A church plan (within the meaning of section 414(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) shall not be treated as not meeting the requirements of section 401 or 403 of such Code if— \n “(1)  by reason of any change in any law, regulation, ruling, or otherwise such plan is required to be amended to meet such requirements, and \n \n “(2)  such plan is so amended at the next earliest church convention or such other time as the Secretary of the Treasury or his delegate may prescribe.”\nPub. L. 96–222, title I, §\u202f101(a)(13)(B) ,  Apr. 1, 1980 ,  94 Stat. 204 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of any payment made during 1978 in a qualifying distribution described in section 403(b)(8) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the applicable period specified in section 402(a)(5)(C) of such Code shall not expire before the close of  December 31, 1980 .”\nApplicable period specified in  section 402(a)(5)(C) of this title  shall not expire before close of  Dec. 31, 1980  in case of any payment described in subsec. (a)(4)(A) of this section or  section 402(a)(5)(A) of this title , see  section 157(h)(3)(B) of Pub. L. 95–600 , set out as a note under  section 402 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'In the case of a plan which the Secretary of Labor finds to be collectively bargained, established or maintained by an employer doing business in not less than 40 States and engaged in the trade or business of furnishing or selling services described in section 168(i)(10)(C), with respect to which the rates have been established or approved by a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political subdivision thereof, and in the case of any employer which is a member of a controlled group with such employer, subparagraph (B) shall be applied by substituting for the words “plan amendment” the words “plan amendment or increase in benefits payable under title II of the Social Security Act”. For the purposes of this subparagraph, the term “controlled group” has the meaning provided by section 1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C).\nAny amount paid in a taxable year in excess of the amount deductible in such year under the foregoing limitations shall be deductible in the succeeding taxable years in order of time to the extent of the difference between the amount paid and deductible in each such succeeding year and the maximum amount deductible for such year under the foregoing limitations.\nIn the taxable year when paid, in an amount determined in accordance with paragraph (1), if the contributions are paid toward the purchase of retirement annuities, or retirement annuities and medical benefits as described in section 401(h), and such purchase is part of a plan which meets the requirements of section 401(a)(3), (4), (5), (6), (7), (8), (9), (11), (12), (13), (14), (15), (16), (17), 1 1 \u202fSee References in Text note below.  (19), (20), (22), (26), (27), (31), and (37) and, if applicable, the requirements of section 401(a)(10) and of section 401(d), and if refunds of premiums, if any, are applied within the current taxable year or next succeeding taxable year toward the purchase of such retirement annuities, or such retirement annuities and medical benefits.\nAny amount paid into the trust in any taxable year in excess of the limitation of clause (i) (or the corresponding provision of prior law) shall be deductible in the succeeding taxable years in order of time, but the amount so deductible under this clause in any 1 such succeeding taxable year together with the amount allowable under clause (i) shall not exceed the amount described in subclause (I) or (II) of clause (i), whichever is greater, with respect to such taxable year.\nFor purposes of this subparagraph, the term “stock bonus or profit-sharing trust” shall not include any trust designed to provide benefits upon retirement and covering a period of years, if under the plan the amounts to be contributed by the employer can be determined actuarially as provided in paragraph (1).\nIf the contributions are made to 2 or more stock bonus or profit-sharing trusts, such trusts shall be considered a single trust for purposes of applying the limitations in this subparagraph.\nExcept as provided by the Secretary, a defined contribution plan which is subject to the funding standards of section 412 shall be treated in the same manner as a stock bonus or profit-sharing plan for purposes of this subparagraph.\nIn the case of a profit-sharing plan, or a stock bonus plan in which contributions are determined with reference to profits, of a group of corporations which is an affiliated group within the meaning of section 1504, if any member of such affiliated group is prevented from making a contribution which it would otherwise have made under the plan, by reason of having no current or accumulated earnings or profits or because such earnings or profits are less than the contributions which it would otherwise have made, then so much of the contribution which such member was so prevented from making may be made, for the benefit of the employees of such member, by the other members of the group, to the extent of current or accumulated earnings or profits, except that such contribution by each such other member shall be limited, where the group does not file a consolidated return, to that proportion of its total current and accumulated earnings or profits remaining after adjustment for its contribution deductible without regard to this subparagraph which the total prevented contribution bears to the total current and accumulated earnings or profits of all the members of the group remaining after adjustment for all contributions deductible without regard to this subparagraph. Contributions made under the preceding sentence shall be deductible under subparagraph (A) of this paragraph by the employer making such contribution, and, for the purpose of determining amounts which may be carried forward and deducted under the second sentence of subparagraph (A) of this paragraph in succeeding taxable years, shall be deemed to have been made by the employer on behalf of whose employees such contributions were made.\nIf a stock bonus, pension, or profit-sharing trust would qualify for exemption under section 501(a) except for the fact that it is a trust created or organized outside the United States, contributions to such a trust by an employer which is a resident, or corporation, or other entity of the United States, shall be deductible under the preceding paragraphs.\nIf the plan is not one included in paragraph (1), (2), or (3), in the taxable year in which an amount attributable to the contribution is includible in the gross income of employees participating in the plan, but, in the case of a plan in which more than one employee participates only if separate accounts are maintained for each employee. For purposes of this section, any vacation pay which is treated as deferred compensation shall be deductible for the taxable year of the employer in which paid to the employee.\nFor purposes of paragraphs (1), (2), and (3), a taxpayer shall be deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).\nAny amount paid under the plans in any taxable year in excess of the limitation of subparagraph (A) shall be deductible in the succeeding taxable years in order of time, but the amount so deductible under this subparagraph in any 1 such succeeding taxable year together with the amount allowable under subparagraph (A) shall not exceed 25 percent of the compensation otherwise paid or accrued during such taxable year to the beneficiaries under the plans.\nThis paragraph shall not have the effect of reducing the amount otherwise deductible under paragraphs (1), (2), and (3), if no employee is a beneficiary under more than 1 trust or under a trust and an annuity plan.\nIf, in connection with 1 or more defined contribution plans and 1 or more defined benefit plans, no amounts (other than elective deferrals (as defined in section 402(g)(3))) are contributed to any of the defined contribution plans for the taxable year, then subparagraph (A) shall not apply with respect to any of such defined contribution plans and defined benefit plans.\nIn applying this paragraph, any single-employer plan covered under section 4021 of the Employee Retirement Income Security Act of 1974 shall not be taken into account.\nIn applying this paragraph, any multiemployer plan shall not be taken into account.\nFor purposes of this paragraph, a plan described in section 412(e)(3) shall be treated as a defined benefit plan.\nNotwithstanding the provisions of paragraphs (3) and (7), if contributions are paid into a trust which forms a part of an employee stock ownership plan (as described in section 4975(e)(7)), and such contributions are, on or before the time prescribed in paragraph (6), applied by the plan to the repayment of the principal of a loan incurred for the purpose of acquiring qualifying employer securities (as described in section 4975(e)(8)), such contributions shall be deductible under this paragraph for the taxable year determined under paragraph (6). The amount deductible under this paragraph shall not, however, exceed 25 percent of the compensation otherwise paid or accrued during the taxable year to the employees under such employee stock ownership plan. Any amount paid into such trust in any taxable year in excess of the amount deductible under this paragraph shall be deductible in the succeeding taxable years in order of time to the extent of the difference between the amount paid and deductible in each such succeeding year and the maximum amount deductible for such year under the preceding sentence.\nNotwithstanding the provisions of paragraphs (3) and (7), if contributions are made to an employee stock ownership plan (described in subparagraph (A)) and such contributions are applied by the plan to the repayment of interest on a loan incurred for the purpose of acquiring qualifying employer securities (as described in subparagraph (A)), such contributions shall be deductible for the taxable year with respect to which such contributions are made as determined under paragraph (6).\nThis paragraph shall not apply to an S corporation.\nA qualified gratuitous transfer (as defined in section 664(g)(1)) shall have no effect on the amount or amounts otherwise deductible under paragraph (3) or (7) or under this paragraph.\nFor purposes of paragraphs (3), (7), (8), and (9) and subsection (h)(1)(C), the term “compensation” shall include amounts treated as “participant’s compensation” under subparagraph (C) or (D) of section 415(c)(3).\nFor purposes of this section, any plan providing for deferred benefits (other than compensation) for employees, their spouses, or their dependents shall be treated as a plan deferring the receipt of compensation. In the case of such a plan, for purposes of this section, the determination of when an amount is includible in gross income shall be made without regard to any provisions of this chapter excluding such benefits from gross income.\nSubparagraph (A) shall not apply to any benefit provided through a welfare benefit fund (as defined in section 419(e)).\nIn the case of a self-employed individual described in section 401(c)(1), contributions which are allocable (determined under regulations prescribed by the Secretary) to the purchase of life, accident, health, or other insurance shall not be taken into account under paragraph (1), (2), or (3) of subsection (a).\nFor purposes of this section, any amount paid by an employer under section 4041(b), 4062, 4063, or 4064, or part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 shall be treated as a contribution to which this section applies by such employer to or under a stock bonus, pension, profit-sharing, or annuity plan.\nIn the case of a payment described in paragraph (1) made by an entity which is liable because it is a member of a commonly controlled group of corporations, trades, or businesses, within the meaning of subsection (b) or (c) of section 414, the fact that the entity did not directly employ participants of the plan with respect to which the liability payment was made shall not affect the deductibility of a payment which otherwise satisfies the conditions of section 162 (relating to trade or business expenses) or section 212 (relating to expenses for the production of income).\nExcept as otherwise provided in this paragraph, any payment described in paragraph (1) shall (subject to the last sentence of subsection (a)(1)(A)) be deductible under this section when paid.\nSubparagraph (A) shall not apply (and subsection (a)(1)(A) shall apply) to any payments described in paragraph (1) which are paid to terminate a plan under section 4041(b) of the Employee Retirement Income Security Act of 1974 to the extent such payments result in the assets of the plan being in excess of the total amount of benefits under such plan which are guaranteed by the Pension Benefit Guaranty Corporation under section 4022 of such Act.\nSubparagraph (A) shall not apply to any payment described in paragraph (1) which is made under section 4062(c) of such Act and such payment shall be deductible at such time as may be prescribed in regulations which are based on principles similar to the principles of subsection (a)(1)(A).\nFor purposes of this subsection, any reference to a section of the Employee Retirement Income Security Act of 1974 shall be treated as a reference to such section as in effect on the date of the enactment of the Retirement Protection Act of 1994.\nFor any taxable year for which the employer has a deduction under paragraph (1), the otherwise applicable limitations in subsection (a)(3)(A) shall be reduced by the amount of the allowable deductions under paragraph (1) with respect to participants in the trust subject to subsection (a)(3)(A).\nFor purposes of subsection (a)(7), a simplified employee pension shall be treated as if it were a separate stock bonus or profit-sharing trust.\nFor purposes of clause (i), (ii) or (iii) of subsection (a)(1)(A), and in computing the full funding limitation, there shall not be taken into account any adjustments under section 415(d)(1) for any year before the year for which such adjustment first takes effect.\nIn the case of a C corporation, there shall be allowed as a deduction for a taxable year the amount of any applicable dividend paid in cash by such corporation with respect to applicable employer securities. Such deduction shall be in addition to the deductions allowed under subsection (a).\nA dividend described in subparagraph (A)(iv) which is paid with respect to any employer security which is allocated to a participant shall not be treated as an applicable dividend unless the plan provides that employer securities with a fair market value of not less than the amount of such dividend are allocated to such participant for the year which (but for subparagraph (A)) such dividend would have been allocated to such participant.\nThe deduction under paragraph (1) shall be allowable in the taxable year of the corporation in which the dividend is paid or distributed to a participant or his beneficiary.\nFor purposes of subparagraph (A), an applicable dividend reinvested pursuant to clause (iii)(II) of paragraph (2)(A) shall be treated as paid in the taxable year of the corporation in which such dividend is reinvested in qualifying employer securities or in which the election under clause (iii) of paragraph (2)(A) is made, whichever is later.\nIn the case of an applicable dividend described in clause (iv) of paragraph (2)(A), the deduction under paragraph (1) shall be allowable in the taxable year of the corporation in which such dividend is used to repay the loan described in such clause.\nThe Secretary may disallow the deduction under paragraph (1) for any dividend if the Secretary determines that such dividend constitutes, in substance, an avoidance or evasion of taxation.\nA plan shall not be treated as violating the requirements of section 401, 409, or 4975(e)(7), or as engaging in a prohibited transaction for purposes of section 4975(d)(3), merely by reason of any payment or distribution described in paragraph (2)(A).\nThe term “employer securities” has the meaning given such term by section 409( l ).\nThe term “employee stock ownership plan” has the meaning given such term by section 4975(e)(7). Such term includes a tax credit employee stock ownership plan (as defined in section 409).\nIn accordance with section 411, an applicable dividend described in clause (iii)(II) of paragraph (2)(A) shall be subject to the requirements of section 411(a)(1).\nFor purposes of applying the limitations of this section, the amount of annual compensation of each employee taken into account under the plan for any year shall not exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B). For purposes of clause (i), (ii), or (iii) of subsection (a)(1)(A), and in computing the full funding limitation, any adjustment under the preceding sentence shall not be taken into account for any year before the year for which such adjustment first takes effect.\nEmployer contributions to a simple retirement account shall be treated as if they are made to a plan subject to the requirements of this section.\nContributions described in paragraph (1) shall be deductible in the taxable year of the employer with or within which the calendar year for which the contributions were made ends.\nFor purposes of this subsection, contributions shall be treated as made for a taxable year if they are made on account of the taxable year and are made not later than the time prescribed by law for filing the return for the taxable year (including extensions thereof).\nElective deferrals (as defined in section 402(g)(3)) shall not be subject to any limitation contained in paragraph (3), (7), or (9) of subsection (a) or paragraph (1)(C) of subsection (h) and such elective deferrals shall not be taken into account in applying any such limitation to any other contributions.\nIn making the computation under subparagraph (A)(ii), the plan’s actuary shall assume that the limitations under subsection ( l ) and section 415(b) shall apply.\nIn the case of a plan year during which a plan is covered under section 4021 of the Employee Retirement Income Security Act of 1974, the plan’s actuary may, notwithstanding subsection ( l ), take into account increases in the limitations which are expected to occur in succeeding plan years.\nFor purposes of determining the amount under paragraph (3) for any plan year, in the case of a plan which has 100 or fewer participants for the plan year, the liability of the plan attributable to benefit increases for highly compensated employees (as defined in section 414(q)) resulting from a plan amendment which is made or becomes effective, whichever is later, within the last 2 years shall not be taken into account in determining the target liability.\nFor purposes of determining the number of plan participants, all defined benefit plans maintained by the same employer (or any member of such employer’s controlled group (within the meaning of section 412(d)(3)) shall be treated as one plan, but only participants of such member or employer shall be taken into account.\nIn the case of a plan which, subject to section 4041 of the Employee Retirement Income Security Act of 1974, terminates during the plan year, the amount determined under paragraph (2) shall in no event be less than the amount required to make the plan sufficient for benefit liabilities (within the meaning of section 4041(d) of such Act).\nAny computation under this subsection for any plan year shall use the same actuarial assumptions which are used for the plan year under section 430 (determined by not taking into account any adjustment under clause (iv) of subsection (h)(2)(C) thereof).\nAny term used in this subsection which is also used in section 430 shall have the same meaning given such term by section 430.\nSolely for purposes of this subsection, a CSEC plan shall be treated as though section 430 applied to such plan and the minimum required contribution for any plan year shall be the amount described in section 412(a)(2)(D).\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nThe Social Security Act, referred to in subsec. (a)(1)(C), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Social Security Act is classified generally to subchapter II (§\u202f401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 401(a)(17), referred to in subsec. (a)(2), was repealed by  Pub. L. 97–248, title II, §\u202f237(b) ,  Sept. 3, 1982 ,  96 Stat. 511 . A new section 401(a)(17) was added by  Pub. L. 99–514, title XI, §\u202f1106(d)(1) ,  Oct. 22, 1986 ,  100 Stat. 2423 .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (a)(3)(A)(v)(II), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (a)(1)(D)(iv), (7)(C)(iv), (g)(1), (3)(B), (C), (4), and ( o )(3)(B)(ii), (5), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 , which is classified principally to chapter 18 (§\u202f1001 et seq.) of Title 29, Labor. Part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 is classified generally to part 1 (§\u202f1381 et seq.) of subtitle E of subchapter III of chapter 18 of Title 29. Sections 4021, 4022, 4041, 4062, 4063, and 4064 of the Employee Retirement Income Security Act of 1974 are classified to sections 1321, 1322, 1341, 1362, 1363, and 1364, respectively, of Title 29. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe date of the enactment of the Retirement Protection Act of 1994, referred to in subsec. (g)(4), is the date of enactment of subtitle F (§§\u202f750–781) of title VII of  Pub. L. 103–465 , which was approved  Dec. 8, 1994 .\n2014—Subsec. ( o )(8).  Pub. L. 113–97  added par. (8).\n2012—Subsec. ( o )(6).  Pub. L. 112–141  inserted “(determined by not taking into account any adjustment under clause (iv) of subsection (h)(2)(C) thereof)” before period at end.\n2008—Subsec. (a)(1)(D)(i).  Pub. L. 110–458, §\u202f108(b) , substituted “431(c)(6)(D)” for “431(c)(6)(C)”.\nSubsec. (a)(2).  Pub. L. 110–245  substituted “(31), and (37)” for “and (31)”.\nSubsec. (a)(7)(A).  Pub. L. 110–458, §\u202f108(a)(2) , in concluding provisions, substituted “the excess (if any) of the plan’s funding target (as defined in section 430(d)(1)) over the value of the plan’s assets (as determined under section 430(g)(3))” for “the plan’s funding shortfall determined under section 430” in last sentence and struck out second sentence which read as follows: “For purposes of clause (ii), if paragraph (1)(D) applies to a defined benefit plan for any plan year, the amount necessary to satisfy the minimum funding standard provided by section 412 with respect to such plan for such plan year shall not be less than the unfunded current liability of such plan under section 412( l ).”\nSubsec. (a)(7)(C)(iii).  Pub. L. 110–458, §\u202f108(c) , amended cl. (iii) generally. Prior to amendment, text read as follows: “In the case of employer contributions to 1 or more defined contribution plans, this paragraph shall only apply to the extent that such contributions exceed 6 percent of the compensation otherwise paid or accrued during the taxable year to the beneficiaries under such plans. For purposes of this clause, amounts carried over from preceding taxable years under subparagraph (B) shall be treated as employer contributions to 1 or more defined contributions to the extent attributable to employer contributions to such plans in such preceding taxable years.”\nSubsec. ( o )(2)(A)(ii).  Pub. L. 110–458, §\u202f108(a)(1)(A) , substituted “430(g)(3)” for “430(g)(2)”.\nSubsec. ( o )(4)(B).  Pub. L. 110–458, §\u202f108(a)(1)(B) , substituted “412(d)(3)” for “412(f)(4)”.\n2006—Subsec. (a)(1)(A).  Pub. L. 109–280, §\u202f801(a)(1) , (c)(1), inserted “in the case of a defined benefit plan other than a multiemployer plan, in an amount determined under subsection ( o ), and in the case of any other plan” after “section 501(a),” in introductory provisions and substituted “431” for “412” in two places in concluding provisions.\nSubsec. (a)(1)(B).  Pub. L. 109–280, §\u202f801(c)(2) , in introductory provisions, substituted “In the case of a multiemployer plan” for “In the case of a plan”, “431(c)(6)” for “412(c)(7)”, “431(c)(6)(A)(ii)” for “412(c)(7)(B)”, “431(c)(6)(A)(i)” for “412(c)(7)(A)”, and “431” for “412”, and, in cl. (i), substituted “431(c)(6)” for “412(c)(7)”.\nSubsec. (a)(1)(D).  Pub. L. 109–280, §\u202f802(a) , amended heading and text of subpar. (D) generally, substituting provisions relating to maximum amount deductible in the case of a defined benefit plan which is a multiemployer plan for provisions relating to maximum amount deductible in the case of any defined benefit plan and stating rule for plans with 100 or less participants, rule for determining number of participants, and rule for terminating plans.\nSubsec. (a)(1)(D)(i).  Pub. L. 109–280, §\u202f801(d)(1) , substituted “section 412( l )(8)(A), except that section 412( l )(8)(A) shall be applied for purposes of this clause by substituting ‘150 percent (140 percent in the case of a multiemployer plan) of current liability’ for ‘the current liability’ in clause (i).” for “section 412( l )”.\nSubsec. (a)(1)(F).  Pub. L. 109–280, §\u202f801(d)(2) , struck out heading and text of subpar. (F). Text read as follows: “An employer may elect to disregard subsections (b)(5)(B)(ii)(II) and ( l )(7)(C)(i)(IV) of section 412 solely for purposes of determining the interest rate used in calculating the maximum amount of the deduction allowable under this paragraph.”\nSubsec. (a)(7)(A).  Pub. L. 109–280, §\u202f801(c)(3)(A) , inserted at end “In the case of a defined benefit plan which is a single employer plan, the amount necessary to satisfy the minimum funding standard provided by section 412 shall not be less than the plan’s funding shortfall determined under section 430.”\nSubsec. (a)(7)(C)(iii).  Pub. L. 109–280, §\u202f803(a) , added cl. (iii).\nSubsec. (a)(7)(C)(iv).  Pub. L. 109–280, §\u202f801(b) , added cl. (iv).\nSubsec. (a)(7)(C)(v).  Pub. L. 109–280, §\u202f803(b) , added cl. (v).\nSubsec. (a)(7)(D).  Pub. L. 109–280, §\u202f801(c)(3)(B) , added subpar. (D) and struck out heading and text of former subpar. (D). Former text read as follows: “For purposes of this paragraph, any plan described in section 412(i) shall be treated as a defined benefit plan.”\nSubsec. ( o ).  Pub. L. 109–280, §\u202f801(a)(2) , added subsec. ( o ).\n2004—Subsec. (a)(1)(F).  Pub. L. 108–218  added subpar. (F).\n2002—Subsec. (a)(1)(D)(iv).  Pub. L. 107–147, §\u202f411(s) , substituted “Special rule for terminating plans” for “Plans maintained by professional service employers” in heading.\nSubsec. (a)(7)(C).  Pub. L. 107–147, §\u202f411 ( l )(4), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “This paragraph shall not have the effect of reducing the amount otherwise deductible under paragraphs (1), (2), and (3), if no employee is a beneficiary under more than 1 trust or under a trust and an annuity plan.”\nSubsec. (a)(12).  Pub. L. 107–147, §\u202f411 ( l )(1), substituted “(9) and subsection (h)(1)(C),” for “(9),”.\nSubsec. (k)(1).  Pub. L. 107–147, §\u202f411(w)(1)(A) , struck out “during the taxable year” after “such corporation”.\nSubsec. (k)(2)(B).  Pub. L. 107–147, §\u202f411(w)(1)(B) , substituted “(A)(iv)” for “(A)(iii)”.\nSubsec. (k)(4)(B), (C).  Pub. L. 107–147, §\u202f411(w)(1)(C) , (D), substituted “clause (iv)” for “clause (iii)” in subpar. (B), added a new subpar. (B), and redesignated former subpar. (B) as (C).\nSubsec. (k)(7).  Pub. L. 107–147, §\u202f411(w)(2) , added par. (7).\nSubsec. (n).  Pub. L. 107–147, §\u202f411 ( l )(2), substituted “subsection (a) or paragraph (1)(C) of subsection (h)” for “subsection (a),”.\n2001—Subsec. (a)(1)(A).  Pub. L. 107–16, §\u202f616(a)(2)(B)(i) , inserted “(other than a trust to which paragraph (3) applies)” after “pension trust” in introductory provisions.\nSubsec. (a)(1)(D).  Pub. L. 107–16, §\u202f652(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of any defined benefit plan (other than a multiemployer plan) which has more than 100 participants for the plan year, except as provided in regulations, the maximum amount deductible under the limitations of this paragraph shall not be less than the unfunded current liability determined under section 412( l ). For purposes of determining whether a plan has more than 100 participants, all defined benefit plans maintained by the same employer (or any member of such employer’s controlled group (within the meaning of section 412( l )(8)(C))) shall be treated as 1 plan, but only employees of such member or employer shall be taken into account.”\nSubsec. (a)(3)(A)(i)(I).  Pub. L. 107–16, §\u202f616(a)(1)(A) , substituted “25 percent” for “15 percent”.\nSubsec. (a)(3)(A)(v).  Pub. L. 107–16, §\u202f616(a)(2)(A) , amended cl. (v) generally, substituting present provisions for provisions which directed that the limitation of cl. (i) for any taxable year would be increased by the unused pre-87 limitation carryforwards and defined “unused pre-87 limitation carryforwards”.\nSubsec. (a)(3)(B).  Pub. L. 107–16, §\u202f616(b)(2)(A) , struck out at end “The term ‘compensation otherwise paid or accrued during the taxable year to all employees’ shall include any amount with respect to which an election under section 415(c)(3)(C) is in effect, but only to the extent that any contribution with respect to such amount is nonforfeitable.”\nSubsec. (a)(10)(B).  Pub. L. 107–16, §\u202f632(a)(3)(B) , struck out “,\u2000the exclusion allowance under section 403(b)(2),” after “deferrals under section 402(g)”.\nSubsec. (a)(12).  Pub. L. 107–16, §\u202f616(b)(1) , added par. (12).\nSubsec. (h)(1)(C).  Pub. L. 107–16, §\u202f616(a)(1)(B) , substituted “25 percent” for “15 percent” in two places.\nSubsec. (h)(2).  Pub. L. 107–16, §\u202f616(a)(2)(B)(ii) , (iii), substituted “certain trusts” for “stock bonus and profit-sharing trust” in heading and “trust subject to subsection (a)(3)(A)” for “stock bonus or profit-sharing trust” in text.\nSubsec. (k)(2)(A)(iii), (iv).  Pub. L. 107–16, §\u202f662(a) , added cl. (iii) and redesignated former cl. (iii) as (iv).\nSubsec. (k)(5)(A).  Pub. L. 107–16, §\u202f662(b) , inserted “avoidance or” before “evasion”.\nSubsec. ( l ).  Pub. L. 107–16, §\u202f611(c)(1) , substituted “$200,000” for “$150,000” in two places.\nSubsec. (n).  Pub. L. 107–16, §\u202f614(a) , added subsec. (n).\n1998—Subsec. (a)(9)(C), (D).  Pub. L. 105–206, §\u202f6015(d) , redesignated subpar. (C), relating to qualified gratuitous transfers, as (D) and inserted heading.\nSubsec. (a)(11).  Pub. L. 105–206, §\u202f7001(a) , added par. (11).\n1997—Subsec. (a)(3)(A)(i).  Pub. L. 105–34, §\u202f1601(d)(2)(C)(i) , substituted “not in excess of the greater of—” and subcls. (I) and (II) for “not in excess of 15 percent of the compensation otherwise paid or accrued during the taxable year to the beneficiaries under the stock bonus or profit-sharing plan.”\nSubsec. (a)(3)(A)(ii).  Pub. L. 105–34, §\u202f1601(d)(2)(C)(ii) , substituted “the amount described in subclause (I) or (II) of clause (i), whichever is greater, with respect to such taxable year.” for “15 percent of the compensation otherwise paid or accrued during such taxable year to the beneficiaries under the plan.”\nSubsec. (a)(9)(C).  Pub. L. 105–34, §\u202f1530(c)(2) , added subpar. (C) relating to qualified gratuitous transfers.\n1996—Subsec. (a)(2).  Pub. L. 104–188, §\u202f1704(t)(76) , struck out “(18),” after “(17),”.\nSubsec. (a)(9)(C).  Pub. L. 104–188, §\u202f1316(d)(1) , added subpar. (C) relating to S corporations.\nSubsec. (a)(10).  Pub. L. 104–188, §\u202f1461(b) , added par. (10).\nSubsec. (j)(1).  Pub. L. 104–188, §\u202f1704(q)(1) , substituted “(9)” for “(10)” in introductory provisions.\nSubsec. (k)(1).  Pub. L. 104–188, §\u202f1316(d)(2) , substituted “a C corporation” for “a corporation”.\nSubsec. ( l ).  Pub. L. 104–188, §\u202f1431(b)(3) , struck out at end “In determining the compensation of an employee, the rules of section 414(q)(6) shall apply, except that in applying such rules, the term ‘family’ shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age 19 before the close of the year.”\nSubsec. (m).  Pub. L. 104–188, §\u202f1421(b)(2) , added subsec. (m).\n1994—Subsec. (g)(4).  Pub. L. 103–465  substituted “the Retirement Protection Act of 1994” for “the Single-Employer Pension Plan Amendments Act of 1986”.\n1993—Subsec. ( l ).  Pub. L. 103–66  substituted “$150,000” for “$200,000” in first sentence and “The Secretary shall adjust the $150,000 amount at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B).” for “The Secretary shall adjust the $200,000 amount at the same time and in the same manner as under section 415(d).”\n1992—Subsec. (a)(2).  Pub. L. 102–318  substituted “(27), and (31)” for “and (27)”.\n1990—Subsec. (a)(1)(C).  Pub. L. 101–508  substituted “section 168(i)(10)(C)” for “section 167( l )(3)(A)(iii)”.\n1989—Subsec. (g)(1).  Pub. L. 101–239, §\u202f7841(b)(1) , inserted “4041(b),” after “under section”.\nSubsec. (k).  Pub. L. 101–239, §\u202f7302(a) , amended subsec. (k) generally, substituting “Deduction for dividends paid on certain employer securities” for “Dividends paid deductions” in heading and pars. (1) to (6) for former pars. (1) and (2) and concluding provisions.\n1988—Subsec. (a)(1)(D).  Pub. L. 100–647, §\u202f2005(b)(3) , struck out “(without regard to any reduction by the credit balance in the funding standard account)” after “under section 412( l )”.\nPub. L. 100–647, §\u202f2005(b)(1) , substituted “For purposes of determining whether a plan has more than 100 participants” for “For purposes of this subparagraph”.\nSubsec. (a)(7)(A).  Pub. L. 100–647, §\u202f2005(b)(2) , inserted at end “For purposes of clause (ii), if paragraph (1)(D) applies to a defined benefit plan for any plan year, the amount necessary to satisfy the minimum funding standard provided by section 412 with respect to such plan for such plan year shall not be less than the unfunded current liability of such plan under section 412( l ).”\nPub. L. 100–647, §\u202f1011A(e)(4)(A) , in introductory provisions, substituted “foregoing paragraphs” for “foregoing provisions” and inserted “or in connection with trusts or plans described in 2 or more of such paragraphs” after “defined benefit plans”.\nSubsec. (a)(8)(D).  Pub. L. 100–647, §\u202f1018(t)(5) , made technical correction to  Pub. L. 99–514, §\u202f1875(c)(7)(B) , see 1986 Amendment note below.\nSubsec. (h)(1)(C).  Pub. L. 100–647, §\u202f1011(f)(6) , inserted “(or during the taxable year in the case of a taxable year described in subparagraph (A)(ii))” after “within the taxable year”.\nSubsec. (h)(3).  Pub. L. 100–647, §\u202f1011A(e)(4)(B) , substituted “Coordination with subsection (a)(7)” for “Effect on limit on deductions” in heading and amended text generally. Prior to amendment, text read as follows: “For any taxable year for which the employer has a deduction under paragraph (1), the otherwise applicable 25 percent limitations in subsection (a)(7) shall be reduced by the amount of the allowable deductions under paragraph (1) with respect to participants in the stock bonus or profit-sharing trust.”\nSubsec. (k).  Pub. L. 100–647, §\u202f1011B(h)(3)(A) , inserted “(whether or not allocated to participants)” after “to employer securities” in par. (2)(C).\nPub. L. 100–647, §\u202f1011B(h)(6) , substituted “or as engaging in a prohibited transaction for purposes of section 4975(d)(3) merely by reason of any distribution or payment” for “merely by reason of any distribution” in third sentence.\nPub. L. 100–647, §\u202f1018(t)(4)(A) , substituted “evasion of taxation” for “avoidance of taxation” in fourth sentence.\nPub. L. 100–647, §\u202f1011B(h)(3)(B) , inserted at end “Paragraph (2)(C) shall not apply to dividends from employer securities which are allocated to any participant unless the plan provides that employer securities with a fair market value not less than the amount of such dividends are allocated to such participant for the year which (but for paragraph (2)(C)) such dividends would have been allocated to such participant.”\nSubsec. ( l ).  Pub. L. 100–647, §\u202f1011(d)(4) , inserted at end “In determining the compensation of an employee, the rules of section 414(q)(6) shall apply, except that in applying such rules, the term ‘family’ shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age 19 before the close of the year.”\nPub. L. 100–647, §\u202f1011(d)(1) , inserted at end “For purposes of clause (i), (ii), or (iii) of subsection (a)(1)(A), and in computing the full funding limitation, any adjustment under the preceding sentence shall not be taken into account for any year before the year for which such adjustment first takes effect.”\n1987—Subsec. (a)(1)(A)(iii).  Pub. L. 100–203, §\u202f9307(d) , inserted “the unfunded costs attributable to” after “to amortize”.\nSubsec. (a)(1)(D), (E).  Pub. L. 100–203, §\u202f9307(c) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (a)(5).  Pub. L. 100–203, §\u202f10201(b)(3) , inserted at end “For purposes of this section, any vacation pay which is treated as deferred compensation shall be deductible for the taxable year of the employer in which paid to the employee.”\nSubsec. (b)(2)(B).  Pub. L. 100–203, §\u202f10201(b)(2) , substituted “Exception” for “Exception for certain benefits” in heading and amended text generally. Prior to amendment, text read as follows: “Subparagraph (A) shall not apply to—\n“(i) any benefit provided through a welfare benefit fund (as defined in section 419(e)), or\n“(ii) any benefit with respect to which an election under section 463 applies.”\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1851(b)(2)(C)(i) , substituted “this chapter; but, if they would otherwise be deductible” for “section 162 (relating to trade or business expenses) or section 212 (relating to expenses for the production of income); but, if they satisfy the conditions of either of such sections”.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f1136(b) , substituted “(26), and (27)” for “and (26)”.\nPub. L. 99–514, §\u202f1112(d)(2) , substituted “(22), and (26)” for “and (22)”.\nSubsec. (a)(3)(A).  Pub. L. 99–514, §\u202f1131(a) , amended subpar. (A) generally, revising and restating as cls. (i) to (v) provisions formerly contained in single paragraph.\nSubsec. (a)(7).  Pub. L. 99–514, §\u202f1131(b) , amended par. (7) generally, revising and restating as subpars. (A) to (C) provisions formerly contained in single paragraph, and adding subpar. (D).\nSubsec. (a)(8)(C).  Pub. L. 99–514, §\u202f1875(c)(7)(A) , inserted “(determined without regard to the deductions allowed by this section)”.\nSubsec. (a)(8)(D).  Pub. L. 99–514, §\u202f1875(c)(7)(B) , as amended by  Pub. L. 100–647, §\u202f1018(t)(5) , struck out “(determined without regard to the deductions allowed by this section)” after “earned income of such individual”.\nPub. L. 99–514, §\u202f1848(c) , substituted “the deduction allowed by this section” for “the deductions allowed by this section and section 405(c)”.\nSubsec. (b).  Pub. L. 99–514, §\u202f1851(b)(2)(B)(i) , substituted “certain” for “unfunded” in heading.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1851(b)(2)(A) , (B)(ii), substituted “certain” for “unfunded” in heading, and in subpar. (B)(ii), substituted “any benefit” for “to any benefit”.\nSubsec. (d).  Pub. L. 99–514, §\u202f1851(b)(2)(C)(ii) , substituted “under this chapter” for “under section 162 or 212” in pars. (1) and (2).\nSubsec. (g)(3).  Pub. L. 99–272, §\u202f11011(c)(1) , amended par. (3) generally. Prior to the amendment, par. (3), coordination with subsection (a), read as follows: “Any payment described in paragraph (1) shall (subject to the last sentence of subsection (a)(1)(A)) be deductible under this section when paid.”\nSubsec. (g)(4).  Pub. L. 99–272, §\u202f11011(c)(2) , added par. (4).\nSubsec. (h)(1)(A), (B).  Pub. L. 99–514, §\u202f1108(c) , amended subpars. (A) and (B) generally. Prior to amendment, subpars. (A) and (B) read as follows:\n“(A) Contributions made for a calendar year are deductible for the taxable year with which or within which the calendar year ends.\n“(B) Contributions made within 3½ months after the close of a calendar year are treated as if they were made on the last day of such calendar year if they are made on account of such calendar year.”\nSubsec. (i).  Pub. L. 99–514, §\u202f1171(b)(6) , struck out subsec. (i) relating to the deductibility of unused portions of employee stock ownership credit.\nSubsec. (k).  Pub. L. 99–514, §\u202f1854(b)(2)(B) , struck out “during the taxable year” after “cash by such corporation” in introductory provisions.\nPub. L. 99–514, §\u202f1854(b)(4) , inserted “The Secretary may disallow the deduction under this subsection for any dividend if the Secretary determines that such dividend constitutes, in substance, an avoidance of taxation.”\nPub. L. 99–514, §\u202f1854(b)(3) , inserted “A plan to which this subsection applies shall not be treated as violating the requirements of section 401, 409, or 4975(e)(7) merely by reason of any distribution described in paragraph (2).”\nPub. L. 99–514, §\u202f1854(b)(2)(A) , inserted “Any deduction under subparagraph (A) or (B) of paragraph (2) shall be allowed in the taxable year of the corporation in which the dividend is paid or distributed to the participant under paragraph (2).”\nPub. L. 99–514, §\u202f1173(a)(2) , inserted “Any deduction under paragraph (2)(C) shall be allowable in the taxable year of the corporation in which the dividend is used to repay the loan described in such paragraph.”\nSubsec. (k)(2)(A), (B).  Pub. L. 99–514, §\u202f1854(b)(5) , inserted “or their beneficiaries”.\nSubsec. (k)(2)(C).  Pub. L. 99–514, §\u202f1173(a)(1) , added subpar. (C).\nSubsec. ( l ).  Pub. L. 99–514, §\u202f1106(d)(2) , added subsec. ( l ).\n1984—Subsec. (a)(8)(D).  Pub. L. 98–369, §\u202f713(d)(6) , inserted “(determined without regard to the deductions allowed by this section and section 405(c))”.\nSubsec. (a)(9), (10).  Pub. L. 98–369, §\u202f713(d)(4)(A) , struck out par. (9) relating to plans benefiting self-employed individuals and redesignated par. (10) as (9).\nSubsec. (b).  Pub. L. 98–369, §\u202f512(a) , amended subsec. (b) generally, inserting heading, redesignating former heading as par. (1) heading, designating existing provisions as par. (1), and in par. (1) as so designated, inserted “(including a plan described in paragraph (2))” after “compensation” and adding par. (2).\nSubsec. (e).  Pub. L. 98–369, §\u202f713(d)(9) , substituted “under paragraph (1), (2), or (3) of subsection (a)” for “under this section”.\nSubsec. (f).  Pub. L. 98–369, §\u202f713(b)(3) , repealed subsec. (f) which related to certain loan repayments considered as contributions.\nSubsec. (h)(4).  Pub. L. 98–369, §\u202f713(d)(5) , repealed par. (4) which related to effect on self-employed individuals or shareholder-employees.\nSubsec. (i).  Pub. L. 98–369, §\u202f474(r)(14) , in par. (1), substituted “If any portion of the employee stock ownership credit determined under section 41 for any taxable year has not, after the application of section 38(c), been allowed under section 38 for any taxable year, such portion shall be allowed as a deduction (without regard to any limitations provided under this section) for the last taxable year to which such portion could have been allowed as a credit under section 39” for “There shall be allowed as a deduction (without regard to any limitations provided under this section) for the last taxable year to which an unused employee stock ownership credit carryover (within the meaning of section 44G(b)(2)(A)) may be carried, an amount equal to the portion of such unused credit carryover which expires at the close of such taxable year”, and in par. (2), substituted references to section 41 and 41(c)(3) for references to section 44G and 44G(c)(3), respectively.\nSubsec. (k).  Pub. L. 98–369, §\u202f542(a) , added subsec. (k).\n1982—Subsec. (a)(2).  Pub. L. 97–248, §\u202f237(e)(2) , substituted “(8), (9)” for “(8)”, and “401(a)(10) and of section 401(d)” for “401(a)(9), (10), (17), and (18) and of section 401(d) (other than paragraph (1))”.\nSubsec. (a)(3)(B).  Pub. L. 97–248, §\u202f253(b) , inserted provision that “compensation otherwise paid or accrued during the taxable year to all employees” shall include any amount with respect to which an election under section 415(c)(3)(C) is in effect, but only to the extent that any contribution with respect to such amount is nonforfeitable.\nSubsec. (e).  Pub. L. 97–248, §\u202f238(a) , amended subsec. (e) generally, substituting provisions relating to contributions allocable to life insurance protection for self-employed individuals, for provisions relating to general requirements, contributions made under more than one plan, contributions allocable to insurance protection, and limitations of not lower than $750 or 100 percent of earned income with respect to special limitations for self-employed individuals.\nSubsec. (j).  Pub. L. 97–248, §\u202f235(f) , added subsec. (j).\n1981—Subsec. (a)(10).  Pub. L. 97–34, §\u202f333(a) , added par. (10).\nSubsec. (e).  Pub. L. 97–34, §\u202f312(a) , substituted in pars. (1) and (2)(A) “$15,000” for “$7,500”.\nSubsec. (i).  Pub. L. 97–34, §\u202f331(b) , added subsec. (i).\n1980—Subsec. (g).  Pub. L. 96–364  redesignated existing provisions as par. (1), inserted applicability to part 1 of subtitle E of title IV of Employee Retirement Income Security Act of 1974, and added pars. (2) and (3).\nSubsec. (h).  Pub. L. 96–222  inserted “or shareholder employees” after “individuals” in heading, and in par. (4) “or described in section 1379(b)(1)” after “of subsection (e)” and “or a shareholder-employee (as defined in section 1379(d))” after “section 401(c)(1)” and substituted in pars. (2) to (4) “paragraph (1)” for “subparagraph (1)”.\n1978—Subsec. (a)(2).  Pub. L. 95–600, §\u202f141(f)(9) , substituted “(20), and (22)” for “and (20)”.\nSubsec. (b).  Pub. L. 95–600, §\u202f133(b) , substituted “other plan” for “similar plan”.\nSubsec. (d).  Pub. L. 95–600, §\u202f133(a) , added subsec. (d).\nSubsec. (h).  Pub. L. 95–600, §\u202f152(f) , added subsec. (h).\n1976—Subsec. (a)(1)(B), (8)(C).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(2).  Pub. L. 94–267  substituted “(19), and (20)” for “and (19)”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(a)(59) , struck out subsec. (d) which related to the taxability of the beneficiary under certain forfeitable contracts purchased by exempt organizations.\nSubsec. (e)(2)(B), (3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(4).  Pub. L. 94–455, §\u202f1502(a)(2) , inserted provisions following subpar. (B).\n1974—Subsec. (a)(1).  Pub. L. 93–406, §\u202f1013(c)(1) , expanded subpars. (A), (B), and (C) to accommodate the increased minimum funding standards required by section 412.\nSubsec. (a)(2).  Pub. L. 93–406 , §§\u202f1016(a)(3), 2001(g)(2)(E), 2004(c)(1), inserted references to the requirements of section 401(a)(11), (12), (13), (14), (15), (16), (17), (18), and (19), and, if applicable, the requirements of section 401(a)(17) and (18).\nSubsec. (a)(3)(A).  Pub. L. 93–406, §\u202f2004(b) , inserted “,\u2000but the amount so deductible under this sentence in any one succeeding taxable year together with the amount so deductible under the first sentence of this subparagraph shall not exceed 25 percent of the compensation otherwise paid or accrued during such taxable year to the beneficiaries under the plan” after “If in any taxable year there is paid into the trust, or a similar trust then in effect, amounts less than the amounts deductible under the preceding sentence, the excess, or if no amount is paid, the amounts deductible, shall be carried forward and be deductible when paid in the succeeding taxable years in order of time, but the amount so deductible under this sentence in any such succeeding taxable year shall not exceed 15 percent of the compensation otherwise paid or accrued during such succeeding taxable year to the beneficiaries under the plan”.\nSubsec. (a)(6).  Pub. L. 93–406, §\u202f1013(c)(2) , substituted provisions covering only taxpayers operating on the accrual basis for provisions covering the time when contributions shall be deemed made.\nSubsec. (a)(7).  Pub. L. 93–406, §\u202f1013(c)(3) , inserted reference to the amount of contributions made to or under the trusts or plans to the extent such contributions do not exceed the amount of employer contributions necessary to satisfy the minimum funding standards provided by section 412 for the plan year which ends with or within such taxable year (or for any prior plan year) and substituted “25 percent” for “30 percent” in provision covering amounts paid into trusts or under an annuity plan in any taxable year in excess of the amount allowable with respect to such year.\nSubsec. (a)(9)(B)(ii).  Pub. L. 93–406, §\u202f2001(g)(2)(F) , substituted “the second sentence of paragraph (3)” for “paragraph (1)(D), the second and third sentences of paragraph (3), and the second sentence of paragraph (7)”.\nSubsec. (c).  Pub. L. 93–406, §\u202f2008(a) , (b), substituted “or pensions” for “and pensions” in par. (1), substituted “The first and third sentences of this subsection” for “This subsection” in provisions covering amounts contributed to a trust on or after any date on which such trust is qualified for exemption from tax under section 501(a), inserted provisions setting out specified treatment to be accorded individuals who before  July 1, 1974 , were participants in plans described in the subsections, and inserted provision that section 277 (relating to deductions incurred by certain membership organizations in transactions with members) does not apply to any trust described in the subsection.\nSubsec. (e)(1).  Pub. L. 93–406, §\u202f2001(a)(1) , substituted “subject to paragraphs (2) and (4), not exceed $7,500, or 15 percent” for “subject to the provisions of paragraph (2), not exceed $2,500, or 10 percent”.\nSubsec. (e)(2)(A).  Pub. L. 93–406, §\u202f2001(a)(2) , substituted “shall (subject to paragraph (4)) not exceed $7,500, or 15 percent” for “shall not exceed $2,500 or 10 percent”.\nSubsec. (e)(4).  Pub. L. 93–406, §\u202f2001(a)(3) , added par. (4).\nSubsec. (g).  Pub. L. 93–406, §\u202f4081(a) , added subsec. (g).\n1969—Subsec. (a)(5).  Pub. L. 91–172  substituted “If the plan is not one included in paragraph (1), (2), or (3), in the taxable year in which an amount attributable to the contribution is includible in the gross income of employees participating in the plan, but, in the case of a plan in which more than one employee participates only if separate accounts are maintained for each employee” for “In the taxable year when paid, if the plan is not one included in paragraph (1), (2), or (3), if the employees’ rights to or derived from such employer’s contribution or such compensation are nonforfeitable at the time the contribution or compensation is paid”.\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f204(a) , repealed par. (10) which provided for a special limitation on the amount allowed as a deduction for self-employed individuals.\nSubsec. (e).  Pub. L. 89–809, §\u202f204(b)(2) , (3), struck out references to par. (10) of subsec. (a) wherever appearing.\n1962—Subsec. (a)(2).  Pub. L. 87–863  inserted “,\u2000or retirement annuities and medical benefits as described in section 401(h),” after “purchase of retirement annuities”, and “,\u2000or such retirement annuities and medical benefits” after “such retirement annuities.”\nPub. L. 87–792, §\u202f3(a)(1) , substituted “(5), (6), (7), and (8), and, if applicable, the requirements of section 401(a)(9) and (10) and of section 401(d) (other than paragraph (1)),” for “(5), and (6),”.\nSubsec. (a)(8) to (10).  Pub. L. 87–792, §\u202f3(a)(2) , added pars. (8) to (10).\nSubsecs. (e), (f).  Pub. L. 87–792, §\u202f3(b) , added subsecs. (e) and (f).\n1958—Subsec. (a).  Pub. L. 85–866  substituted “income); but, if” for “income) but if” preceding par. (1).\nAmendment by  Pub. L. 113–97  applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as a note under  section 401 of this title .\nPub. L. 112–141, div. D, title II, §\u202f40211(c) ,  July 6, 2012 ,  126 Stat. 850 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section, sections 417, 420 and 430 of this title, and sections 1021, 1055, 1083, 1306, and 1310 of Title 29, Labor, and enacting provisions set out as a note under  section 1021 of Title 29 ] shall apply with respect to plan years beginning after  December 31, 2011 . \n \n “(2)   Rules with respect to elections.— “(A)   Adjusted funding target attainment percentage .— A plan sponsor may elect not to have the amendments made by this section apply to any plan year beginning before  January 1, 2013 , either (as specified in the election)— “(i)  for all purposes for which such amendments apply, or \n \n “(ii)  solely for purposes of determining the adjusted funding target attainment percentage under sections 436 of the Internal Revenue Code of 1986 and 206(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1056(g) ] for such plan year. \n \n\n A plan shall not be treated as failing to meet the requirements of sections 204(g) of such Act [ 29 U.S.C. 1054(g) ] and 411(d)(6) of such Code solely by reason of an election under this paragraph. \n \n “(B)   Opt out of existing elections .— If, on the date of the enactment of this Act [ July 6, 2012 ], an election is in effect with respect to any plan under sections 303(h)((2)(D)(ii) [sic] of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(h)(2)(D)(ii) ] and 430(h)((2)(D)(ii) [sic] of the Internal Revenue Code of 1986, then, notwithstanding the last sentence of each such section, the plan sponsor may revoke such election without the consent of the Secretary of the Treasury. The plan sponsor may make such revocation at any time before the date which is 1 year after such date of enactment and such revocation shall be effective for the 1st plan year to which the amendments made by this section apply and all subsequent plan years. Nothing in this subparagraph shall preclude a plan sponsor from making a subsequent election in accordance with such sections.”\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 110–245  applicable with respect to deaths and disabilities occurring on or after  Jan. 1, 2007 , see  section 104(d)(1) of Pub. L. 110–245 , set out as a note under  section 401 of this title .\nPub. L. 109–280, title VIII, §\u202f801(e) ,  Aug. 17, 2006 ,  120 Stat. 995 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 404A of this title ] shall apply to years beginning after  December 31, 2007 . \n \n “(2)   Special rules .— The amendments made by subsection (d) [amending this section] shall apply to years beginning after  December 31, 2005 .”\nPub. L. 109–280, title VIII, §\u202f802(b) ,  Aug. 17, 2006 ,  120 Stat. 996 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 2007 .”\nPub. L. 109–280, title VIII, §\u202f803(d) ,  Aug. 17, 2006 ,  120 Stat. 996 , provided that:  “The amendments made by this section [amending this section and  section 4972 of this title ] shall apply to contributions for taxable years beginning after  December 31, 2005 .”\nPub. L. 108–218, title I, §\u202f101(d) ,  Apr. 10, 2004 ,  118 Stat. 599 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section, sections 412 and 415 of this title, and sections 1082 and 1306 of Title 29, Labor] shall apply to plan years beginning after  December 31, 2003 . \n \n “(2)   Lookback rules .— For purposes of applying subsections (d)(9)(B)(ii) and (e)(1) of section 302 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(d)(9)(B)(ii) , (e)(1)] and subsections ( l )(9)(B)(ii) and (m)(1) of [former] section 412 of the Internal Revenue Code of 1986 to plan years beginning after  December 31, 2003 , the amendments made by this section may be applied as if such amendments had been in effect for all prior plan years. The Secretary of the Treasury may prescribe simplified assumptions which may be used in applying the amendments made by this section to such prior plan years. \n \n “(3)   Transition rule for section 415 limitation .— In the case of any participant or beneficiary receiving a distribution after  December 31, 2003 [,] and before  January 1, 2005 , the amount payable under any form of benefit subject to section 417(e)(3) of the Internal Revenue Code of 1986 and subject to adjustment under section 415(b)(2)(B) of such Code shall not, solely by reason of the amendment made by subsection (b)(4) [amending  section 415 of this title ], be less than the amount that would have been so payable had the amount payable been determined using the applicable interest rate in effect as of the last day of the last plan year beginning before  January 1, 2004 .”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  section 611(c)(1) of Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nPub. L. 107–16, title VI, §\u202f614(b) ,  June 7, 2001 ,  115 Stat. 102 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f616(c) ,  June 7, 2001 ,  115 Stat. 103 , provided that:  “The amendments made by this section [amending this section and  section 4972 of this title ] shall apply to years beginning after  December 31, 2001 .”\nAmendment by  section 632(a)(3)(B) of Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 632(a)(4) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nPub. L. 107–16, title VI, §\u202f652(c) ,  June 7, 2001 ,  115 Stat. 130 , provided that:  “The amendments made by this section [amending this section and  section 4972 of this title ] shall apply to plan years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f662(c) ,  June 7, 2001 ,  115 Stat. 142 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2001 .”\nAmendment by  section 6015(d) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–206, title VII, §\u202f7001(b) ,  July 22, 1998 ,  112 Stat. 827 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ July 22, 1998 ]. \n \n “(2)   Change in method of accounting .— In the case of any taxpayer required by the amendment made by subsection (a) [amending this section] to change its method of accounting for its first taxable year ending after the date of the enactment of this Act [ July 22, 1998 ]— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as made with the consent of the Secretary of the Treasury; and \n \n “(C)  the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the 3-taxable year period beginning with such first taxable year.”\nAmendment by  section 1530(c)(2) of Pub. L. 105–34  applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after  Aug. 5, 1997 , see  section 1530(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by  section 1601(d)(2)(C) of Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by section 1316(d)(1), (2) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 1316(f) of Pub. L. 104–188 , set out as a note under  section 170 of this title .\nAmendment by  section 1421(b)(2) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nAmendment by  section 1431(b)(3) of Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , see  section 1431(d)(2) of Pub. L. 104–188 , set out as a note under  section 414 of this title .\nPub. L. 104–188, title I, §\u202f1461(c) ,  Aug. 20, 1996 ,  110 Stat. 1824 , provided that:  “The amendments made by this section [amending this section and  section 1414 of this title ] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1704(q)(2) ,  Aug. 20, 1996 ,  110 Stat. 1887 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 713(d)(4)(A) of the Deficit Reduction Act of 1984 [ Pub. L. 98–369 ].”\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, to benefits accruing in plan years beginning after  Dec. 31, 1993 , see  section 13212(d) of Pub. L. 103–66 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 102–318  applicable, except as otherwise provided, to distributions after  Dec. 31, 1992 , see  section 522(d) of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–239, title VII, §\u202f7302(b) ,  Dec. 19, 1989 ,  103 Stat. 2352 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to employer securities acquired after  August 4, 1989 . \n \n “(2)   Securities acquired with certain loans .— The amendment made by this section shall not apply to employer securities acquired after  August 4, 1989 , which are acquired— “(A)  with the proceeds of any loan which was made pursuant to a binding written commitment in effect on  August 4, 1989 , and at all times thereafter before such loan is made, and \n \n “(B)  pursuant to a written binding contract (or tender offer registered with the Securities and Exchange Commission) in effect on  August 4, 1989 , and at all times thereafter before such securities are acquired.”\nPub. L. 101–239, title VII, §\u202f7841(b)(2) ,  Dec. 19, 1989 ,  103 Stat. 2428 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to payments made after  January 1, 1986 , in taxable years ending after such date.”\nAmendment by sections 1011(d)(1), (4), (f)(6), 1011A(e)(4), 1011B(h)(3), (6), and 1018(t)(4)(A), (5) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title II, §\u202f2005(e) ,  Nov. 10, 1988 ,  102 Stat. 3612 , as amended by  Pub. L. 101–239, title VII, §\u202f7812(d) ,  Dec. 19, 1989 ,  103 Stat. 2412 , provided that:  “The amendments made by this section [amending this section and sections 412, 414, and 4972 of this title and  section 1082 of Title 29 , Labor] shall take effect as if included in the amendments made by the provisions of the Omnibus Budget Reconciliation Act of 1987 [ Pub. L. 100–203 ] to which it relates, except that the amendment made by subsection (a)(1) [amending  section 4972 of this title ] shall take effect as if included in the amendment made by section 1131(c) of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nPub. L. 100–203, title IX, §\u202f9307(f) ,  Dec. 22, 1987 ,  101 Stat. 1330–359 , as amended by  Pub. L. 101–239, title VII, §\u202f7881(d)(3) ,  Dec. 19, 1989 ,  103 Stat. 2439 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 412 of this title  and  section 1082 of Title 29 , Labor] shall apply to years beginning after  December 31, 1987 . \n \n “(2)   Amortization of gains and losses .— Sections 412(b)(2)(B)(iv) and 412(b)(3)(B)(ii) of the Internal Revenue Code of 1986 and sections 302(b)(2)(B)(iv) and 302(b)(3)(B)(ii) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(b)(2)(B)(iv) , (3)(B)(ii)] (as amended by paragraphs (1)(A) and (2)(A) of subsection (a)) shall apply to gains and losses established in years beginning after  December 31, 1987 . For purposes of the preceding sentence, any gain or loss determined by a valuation occurring as of  January 1, 1988 , shall be treated as established in years beginning before 1988, or at the election of the employer, shall be amortized in accordance with Internal Revenue Service Notice 89–52.”\nPub. L. 100–203, title X, §\u202f10201(c)(1) ,  Dec. 22, 1987 ,  101 Stat. 1330–388 , provided that:  “The amendments made by this section [amending this section and sections 419 and 461 of this title, and repealing sections 81 and 463 of this title] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  section 1106(d)(2) of Pub. L. 99–514  applicable to benefits accruing in years beginning after  Dec. 31, 1988 , except as otherwise provided, see  section 1106(i)(5) of Pub. L. 99–514 , set out as a note under  section 415 of this title .\nAmendment by  section 1108(c) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1108(h) of Pub. L. 99–514 , set out as a note under  section 219 of this title .\nAmendment by  section 1112(d)(2) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule regarding collective bargaining agreements ratified before  Mar. 1, 1986 , and with provision for waiver of excise tax on reversions, see  section 1112(e) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 99–514, title XI, §\u202f1131(d) ,  Oct. 22, 1986 ,  100 Stat. 2478 , as amended by  Pub. L. 100–647, title I, §\u202f1011A(e)(3) ,  Nov. 10, 1988 ,  102 Stat. 3478 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 4972 of this title  and amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special rules for collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to contributions pursuant to any such agreement for taxable years beginning before the earlier of— “(A)   January 1, 1989 , or \n \n “(B)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ).”\nAmendment by  section 1171(b)(6) of Pub. L. 99–514  applicable to compensation paid or accrued after  Dec. 31, 1986 , in taxable years ending after such date, but this  section 404(i) of this title  to continue to apply with respect to credits under  section 41 of this title  attributable to compensation paid or accrued before  Jan. 1, 1987  (or under  section 38 of this title  with respect to qualified investment before  Jan. 1, 1983 ), see  section 1171(c) of Pub. L. 99–514 , set out as a note under  section 38 of this title .\nPub. L. 99–514, title XI, §\u202f1173(c)(1) ,  Oct. 22, 1986 ,  100 Stat. 2516 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to dividends paid in taxable years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by sections 1848(c), 1851(b)(2)(A)–(C)(ii), and 1854(b)(3)–(5) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 1854(b)(2) of Pub. L. 99–514  not applicable to dividends paid before  Jan. 1, 1986 , if the taxpayer treated such dividends in a manner inconsistent with such amendment on a return filed with the Secretary before  Oct. 22, 1986 , see  section 1854(b)(6) of Pub. L. 99–514 , set out as a note under  section 72 of this title .\nPub. L. 99–514, title XVIII, §\u202f1875(c)(7)(B) ,  Oct. 22, 1986 ,  100 Stat. 2895 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1984 .\nPub. L. 99–272, title XI, §\u202f11011(c)(3) ,  Apr. 7, 1986 ,  100 Stat. 258 , provided that:  “The amendments made by this subsection [amending this section] shall apply to payments made after  January 1, 1986 , in taxable years ending after such date.”\nAmendment by  section 474(r)(14) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title V, §\u202f512(c) ,  July 18, 1984 ,  98 Stat. 863 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 162 of this title ] shall apply to amounts paid or incurred after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Exception for certain extended vacation pay plans .— In the case of any extended vacation pay plan maintained pursuant to a collective bargaining agreement— “(A)  between employee representatives and 1 or more employers, and \n \n “(B)  in effect on  June 22, 1984 , \n \n\n the amendments made by this section shall not apply before the date on which such collective bargaining agreement terminates (determined without regard to any extension thereof agreed to after  June 22, 1984 ). For purposes of the preceding sentence, any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement.”\nPub. L. 98–369, div. A, title V, §\u202f542(d) ,  July 18, 1984 ,  98 Stat. 891 , provided that:  “The amendments made by this section [amending this section and sections 116 and 3405 of this title] shall apply to taxable years beginning after the date of enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f253(c) ,  Sept. 3, 1982 ,  96 Stat. 533 , provided that:  “The amendments made by this section [amending this section and  section 415 of this title ] shall apply to taxable years beginning after  December 31, 1981 .”\nAmendment by  section 235(f) of Pub. L. 97–248 , in the case of any plan which is not in existence on  July 1, 1982 , applicable to years ending after  July 1, 1982 , and in the case of any plan which is in existence on  July 1, 1982 , applicable to years beginning after  Dec. 31, 1982 , see  section 235(g)(1) of Pub. L. 97–248 , set out as a note under  section 415 of this title .\nAmendment by sections 237 and 238 of  Pub. L. 97–248  applicable to years beginning after  Dec. 31, 1983 , see  section 241 of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title .\nAmendment by  section 312(a) of Pub. L. 97–34  applicable to plans which include employees within the meaning of  section 401(c)(1) of this title  with respect to taxable years beginning after  Dec. 31, 1981 , see  section 312(f)(1) of Pub. L. 97–34 , set out as a note under  section 72 of this title .\nPub. L. 97–34, title III, §\u202f331(f)(2) ,  Aug. 13, 1981 ,  95 Stat. 295 , provided that:  “The amendments made by subsections (b) and (c) [amending this section and sections 56, 409A, and 6699 of this title] shall apply to taxable years ending after  December 31, 1982 .”\nAmendment by  Pub. L. 96–364  effective  Sept. 26, 1980 , see  section 210(a) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f133(c) ,  Nov. 6, 1978 ,  92 Stat. 2783 , as amended by  Pub. L. 96–222, title I, §\u202f101(a)(5) ,  Apr. 1, 1980 ,  94 Stat. 196 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to deductions for taxable years beginning after  December 31, 1978 . \n \n “(2)   Special rule for certain title insurance companies.— “(A)   In general.— In the case of a qualified title insurance company plan, the amendment made by subsection (a) [amending this section] shall apply to deductions for taxable years beginning after  December 31, 1979 . \n \n “(B)   Qualified title insurance company plan.— For purposes of subparagraph (A), the term ‘qualified title insurance company plan’ means a plan of a qualified title insurance company— “(i)  which defers the payment of amounts credited by such company to separate accounts for members of such company in consideration of their issuance of policies of title insurance, and \n \n “(ii)  under which no part of such amounts is payable to or withdrawable by the members until after the period for the adverse possession of real property under applicable State law. \n \n \n “(C)   Qualified title insurance company.— For purposes of subparagraph (B), the term ‘qualified title insurance company’ means an unincorporated title insurance company organized as a business trust— “(i)  which is engaged in the business of providing title insurance coverage on interests in and liens upon real property obtained by clients of the members of such company, and \n \n “(ii)  which is subject to tax under section 831 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nAmendment by  section 141(f)(9) of Pub. L. 95–600  effective with respect to qualified investment for taxable years beginning after  Dec. 31, 1978 , see  section 141(g)(1) of Pub. L. 95–600 , set out as an Effective Date note under  section 409 of this title .\nAmendment by  section 152(f) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 152(h) of Pub. L. 95–600 , set out as a note under  section 408 of this title .\nAmendment by  section 1502(a)(2) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1975 , see  section 1502(b) of Pub. L. 94–455 , set out as a note under  section 415 of this title .\nAmendment by  section 1901(a)(59) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 94–267  applicable with respect to payments made to an employee on or after  July 4, 1974 , see  section 1(e) of Pub. L. 94–267 , set out as a note under  section 401 of this title .\nAmendment by sections 1013(c) and 1016(a)(3) of  Pub. L. 93–406  applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , but, in the case of plans in existence on  Jan. 1, 1974 , amendment by sections 1013(c) and 1016(a)(3) of  Pub. L. 93–406  applicable for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nPub. L. 93–406, title II, §\u202f2001(i)(1) ,  Sept. 2, 1974 ,  88 Stat. 957 , provided that:  “The amendments made by subsections (a) [amending this section] and (b) [amending  section 1379 of this title ] apply to taxable years beginning after  December 31, 1973 .”\nAmendment by section 2001(g)(2)(E), (F) of  Pub. L. 93–406  applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see  section 2001(i)(5) of Pub. L. 93–406 , set out as a note under  section 72 of this title .\nPub. L. 93–406, title II, §\u202f2008(c) ,  Sept. 2, 1974 ,  88 Stat. 994 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending on or after  June 30, 1972 .”\nAmendment by section 2004(b), (c)(1) of  Pub. L. 93–406  applicable to years beginning after  Dec. 31, 1975 , see  section 2004(d) of Pub. L. 93–406 , set out as an Effective Date; Transition Provisions note under  section 415 of this title .\nAmendment by  section 4081(a) of Pub. L. 93–406  effective on  Sept. 2, 1974 , with exceptions specified in section 1461(b), (c) of Title 29, Labor, see  section 1461(a) of Title 29 .\nAmendment by  Pub. L. 91–172  applicable with respect to contributions made and premiums paid after  Aug. 1, 1969 , see  section 321(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 83 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1967 , see  section 204(d) of Pub. L. 89–809 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 87–863  applicable to taxable years beginning after  Oct. 23, 1962 , see  section 2(c) of Pub. L. 87–863 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1112 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 107–16, title VI, §\u202f658 ,  June 7, 2001 ,  115 Stat. 137 , provided that: \n “(a)   Not Considered Method of Accounting .— For purposes of section 446 of the Internal Revenue Code of 1986, a determination under section 404(a)(6) of such Code regarding the taxable year with respect to which a contribution to a multiemployer pension plan is deemed made shall not be treated as a method of accounting of the taxpayer. No deduction shall be allowed for any taxable year for any contribution to a multiemployer pension plan with respect to which a deduction was previously allowed. \n \n “(b)   Regulations .— The Secretary of the Treasury shall promulgate such regulations as necessary to clarify that a taxpayer shall not be allowed an aggregate amount of deductions for contributions to a multiemployer pension plan which exceeds the amount of such contributions made or deemed made under section 404(a)(6) of the Internal Revenue Code of 1986 to such plan. \n \n “(c)   Effective Date .— Subsection (a), and any regulations promulgated under subsection (b), shall be effective for years ending after the date of the enactment of this Act [ June 7, 2001 ].”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f713(d)(8) ,  July 18, 1984 ,  98 Stat. 958 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Sections 404(e) and 1379(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of the Tax Equity and Fiscal Responsibility Act of 1982 [ Sept. 3, 1982 ]) shall not apply to any plan to which section 401(j) of such Code applies (or would apply but for its repeal).”\nPub. L. 96–364, title IV, §\u202f408 ,  Sept. 26, 1980 ,  94 Stat. 1307 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  For purposes of subsection (g) of section 404 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to certain employer liability payments considered as contributions), as amended by section 205 of this Act, any payment made to a plan covering employees of a corporation operating a public transportation system shall be treated as a payment described in paragraph (1) of such subsection if— “(1)  such payment is made to fund accrued benefits under the plan in conjunction with an acquisition by a State (or agency or instrumentality thereof) of the stock or assets of such corporation, and \n \n “(2)  such acquisition is pursuant to a State public transportation law enacted after  June 30, 1979 , and before  January 1, 1980 . \n \n \n “(b)  The provisions of this section shall apply to payments made after  June 29, 1980 .”\nPub. L. 93–406, title II, §\u202f1022(j) ,  Sept. 2, 1974 ,  88 Stat. 942 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “Effective for taxable years beginning after  December 31, 1973 , if— “(1)  an employer is engaged in a trade or business in a foreign country, \n \n “(2)  such employer is required by the laws of that country to make payments, based on periods of service, to its employees or their beneficiaries after the employees’ retirement, death, or other separation from the service, and \n \n “(3)  such employer establishes a trust (whether organized within or outside the United States) for the purpose of funding the payments required by such law, \n \n\n then, in determining for purposes of paragraph (5) of section 404(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] the taxable year in which any contribution to or under the plan is includible in the gross income of the nonresident alien employees of such employer, such paragraph (5) shall be treated as not requiring that separate accounts be maintained for such nonresident alien employees.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Except as otherwise provided in this section, in the case of a qualified funded plan contributions are properly taken into account for the taxable year in which paid.\nIn the case of a qualified reserve plan, the amount properly taken into account for the taxable year is the reasonable addition for such year to a reserve for the taxpayer’s liability under the plan. Unless otherwise required or permitted in regulations prescribed by the Secretary, the reserve for the taxpayer’s liability shall be determined under the unit credit method modified to reflect the requirements of paragraphs (3) and (4). All benefits paid under the plan shall be charged to the reserve.\nIn the case of a plan which is or has been a qualified reserve plan, an amount equal to that portion of any decrease for the taxable year in the reserve which is not attributable to the payment of benefits shall be included in gross income.\nThe term “cumulative United States amount” means the aggregate amount determined with respect to the plan under this section for the taxable year and for all prior taxable years to which this section applies. Such determination shall be made for each taxable year without regard to the application of paragraph (1).\nThe term “cumulative foreign amount” means the aggregate amount allowed as a deduction under the appropriate foreign tax laws for the taxable year and all prior taxable years to which this section applies.\nIn determining the earnings and profits and accumulated profits of any foreign corporation with respect to a qualified foreign plan, except as provided in regulations, the amount determined under paragraph (1) with respect to any plan for any taxable year shall in no event exceed the amount allowed as a deduction under the appropriate foreign tax laws for such taxable year.\nThe term “qualified funded plan” means a qualified foreign plan which is not a qualified reserve plan.\nThe term “qualified reserve plan” means a qualified foreign plan with respect to which an election made by the taxpayer is in effect for the taxable year. An election under the preceding sentence shall be made in such manner and form as the Secretary may by regulations prescribe and, once made, may be revoked only with the consent of the Secretary.\nIf the deduction under foreign tax law is adjusted, the taxpayer shall notify the Secretary of such adjustment on or before the date prescribed by regulations, and the Secretary shall redetermine the amount of the tax for the year or years affected. In any case described in the preceding sentence, rules similar to the rules of subsection (c) of section 905 shall apply.\nExcept as provided in subparagraph (B), principles similar to those set forth in paragraphs (3) and (6) of section 431(c) shall apply for purposes of this section.\nIn the case of a qualified reserve plan, in lieu of taking rates of interest into account under subparagraph (A), the rate of interest for the plan shall be the rate selected by the taxpayer which is within the permissible range.\nAny rate selected by the taxpayer for the plan under this subparagraph shall remain in effect for such plan until the first taxable year for which such rate is no longer within the permissible range. At such time, the taxpayer shall select a new rate of interest which is within the permissible range applicable at such time.\nFor purposes of this subparagraph, the term “permissible range” means a rate of interest which is not more than 20 percent above, and not more than 20 percent below, the average rate of interest for long-term corporate bonds in the appropriate country for the 15-year period ending on the last day before the beginning of the taxable year.\nAny change in the method (but not the actuarial assumptions) used to determine the amount allowed as a deduction under subsection (a) shall be treated as a change in accounting method under section 446(e).\nFor purposes of section 481, any election under this section shall be treated as a change in the taxpayer’s method of accounting. In applying section 481 with respect to any such election, the period for taking into account any increase or decrease in accumulated profits, earnings and profits or taxable income resulting from the application of section 481(a)(2) shall be the year for which the election is made and the fourteen succeeding years.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section (including regulations providing for the coordination of the provisions of this section with section 404 in the case of a plan which has been subject to both of such sections).\n2018—Subsec. (c)(4)(B).  Pub. L. 115–141  struck out “and” at end.\n2006—Subsec. (g)(3)(A).  Pub. L. 109–280  substituted “paragraphs (3) and (6) of section 431(c)” for “paragraphs (3) and (7) of section 412(c)”.\n1988—Subsec. (d)(3).  Pub. L. 100–647  inserted “except as provided in regulations,” after “qualified foreign plan,”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1851(b)(2)(C)(iii) , substituted “under this chapter” for “under section 162, 212, or 404” in par. (1) and “they would otherwise be deductible” for “they satisfy the conditions of section 162” in par. (2).\nSubsec. (g)(1)(A).  Pub. L. 99–514, §\u202f1114(b)(8) , substituted “a highly compensated employee (within the meaning of section 414(q))” for “an officer, shareholder, or highly compensated”.\nAmendment by  Pub. L. 109–280  applicable to years beginning after  Dec. 31, 2007 , see  section 801(e)(1) of Pub. L. 109–280 , set out as a note under  section 404 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1114(b)(8) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , see  section 1114(c)(3) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by  section 1851(b)(2)(C)(iii) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 96–603, §\u202f2(e) ,  Dec. 28, 1980 ,  94 Stat. 3510 , as amended by  Pub. L. 97–448, title III, §\u202f305(a) ,  Jan. 12, 1983 ,  96 Stat. 2399 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— The amendments made by this section [enacting this section and  section 6689 of this title  and amending sections 679 and 905 of this title] shall apply with respect to employer contributions or accruals for taxable years beginning after  December 31, 1979 . \n \n “(2)   Election to apply amendments retroactively with respect to foreign subsidiaries.— “(A)   In general.— The taxpayer may elect to have the amendments made by this section [enacting this section and  section 6689 of this title  and amending sections 679 and 905 of this title] apply retroactively with respect to its foreign subsidiaries. \n \n “(B)   Scope of retroactive application.— Any election made under this paragraph shall apply with respect to all foreign subsidiaries of the taxpayer for the taxpayer’s open period. \n \n “(C)   Distributions by foreign subsidiary must be out of post-1971 earnings and profits.— The election under this paragraph shall apply to distributions made by a foreign subsidiary only if made out of accumulated profits (or earnings and profits) earned after  December 31, 1970 . \n \n “(D)   Revocation only with consent.— An election under this paragraph may be revoked only with the consent of the Secretary of the Treasury or his delegate. \n \n “(E)   Open period.— For purposes of this subsection, the term ‘open period’ means, with respect to any taxpayer, all taxable years which begin before  January 1, 1980 , and which begin after  December 31, 1971 , and for which, on  December 31, 1980 , the making of a refund, or the assessment of a deficiency, was not barred by any law or rule of law. \n \n \n “(3)   Allowance of prior deductions in case of certain funded branch plans.— “(A)   In general.— If— “(i)  the taxpayer elects to have this paragraph apply, and \n \n “(ii)  the taxpayer agrees to the assessment of all deficiencies (including interest thereon) arising from all erroneous deductions, \n \n\n then an amount equal to  1 ⁄ 15 th of the aggregate of the prior deductions which would have been allowable if the amendments made by this section [enacting this section and  section 6689 of this title  and amending sections 679 and 905 of this title] applied to taxable years beginning before  January 1, 1980 , shall be allowed as a deduction for the taxpayer’s first taxable year beginning in 1980, and an equal amount shall be allowed for each of the succeeding 14 taxable years. \n \n “(B)   Prior deduction.— For purposes of subparagraph (A), the term ‘prior deduction’ means a deduction with respect to a qualified funded plan (within the meaning of section 404A(f)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) of the taxpayer— “(i)  which the taxpayer claimed for a taxable year (or could have claimed if the amendments made by this section [enacting this section and  section 6689 of this title  and amending sections 679 and 905 of this title] applied to taxable years beginning before  January 1, 1980 ) beginning before  January 1, 1980 , \n \n “(ii)  which was not allowable, and \n \n “(iii)  with respect to which, on  December 1, 1980 , the assessment of a deficiency was not barred by any law or rule of law. \n \n \n \n “(4)   Time and manner for making elections.— “(A)   Time.— An election under paragraph (2) or (3) may be made only on or before the due date (including extensions) for filing the taxpayer’s return of tax under chapter 1 of the Internal Revenue Code of 1986 [section 1 et seq. of this title] for its first taxable year ending on or after  December 31, 1980 . \n \n “(B)   Manner.— An election under paragraph (2) may be made only by a statement attached to the taxpayer’s return for its first taxable year ending on or after  December 31, 1980 . An election under paragraph (3) may be made only if the taxpayer, on or before the last day for making the election, files with the Secretary of the Treasury or his delegate such amended return and such other information as the Secretary of the Treasury or his delegate may require, and agrees to the assessment of a deficiency for any closed year falling within the open period, to the extent such deficiency is attributable to the operation of such election.”\n[ Pub. L. 97–448, title III, §\u202f311(c)(1) ,  Jan. 12, 1983 ,  96 Stat. 2411 , provided that:  “The amendment made by subsection (a) of section 305 [amending par. (2)(E) of this note] shall take effect on  December 28, 1980 .” \n]\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Section, added  Pub. L. 87–792, §\u202f5(a) ,  Oct. 10, 1962 ,  76 Stat. 826 ; amended  Pub. L. 89–97, title I, §\u202f106(d)(5) ,  July 30, 1965 ,  79 Stat. 337 ;  Pub. L. 91–172, title V, §\u202f515(c)(1) ,  Dec. 30, 1969 ,  83 Stat. 645 ;  Pub. L. 93–406, title II , §§\u202f2004(c)(2), 2005(c)(11),  Sept. 2, 1974 ,  88 Stat. 986 , 992;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 ;  Pub. L. 97–34, title III, §\u202f313(a) , (b)(1),  Aug. 13, 1981 ,  95 Stat. 285 , 286;  Pub. L. 97–452, §\u202f2(c)(1) ,  Jan. 12, 1983 ,  96 Stat. 2478 ;  Pub. L. 98–369, div. A, title I, §\u202f42(a)(6) ,  July 18, 1984 ,  98 Stat. 557 , related to qualified bond purchase plans.\nRepeal applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 62 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f491(c)(1) , (f)(2),  July 18, 1984 ,  98 Stat. 848 , 853, provided that, applicable to redemptions after  July 18, 1984 , in taxable years ending after such date, subsec. (d)(3)(A) of this section, as in effect before its repeal, is amended to read as follows:\n“(A)  In general .—If—\n“(i) any qualified bond is redeemed,\n“(ii) any portion of the excess of the proceeds from such redemption over the basis of such bond is transferred to an individual retirement plan which is maintained for the benefit of the individual redeeming such bond, or to a qualified trust (as defined in section 402(a)(5)(D)(iii)) for the benefit of such individual, and\n“(iii) such transfer is made on or before the 60th day after the individual received the proceeds of such redemption,\nthen gross income shall not include the proceeds to the extent so transferred and the transfer shall be treated as a rollover contribution described in section 408(d)(3).”\nPub. L. 98–369, div. A, title IV, §\u202f491(f)(4) ,  July 18, 1984 ,  98 Stat. 853 , provided that:  \n “Notwithstanding— “(A)  subparagraph (D) of section 405(b)(1) of the Internal Revenue Code of 1954 (as in effect before its repeal by this section) [see above], and \n \n “(B)  the terms of any bond described in subsection (b) of such section 405, \n \n\n such a bond may be redeemed at any time after the date of the enactment of this Act [ July 18, 1984 ] in the same manner as if the individual redeeming the bond had attained age 59½.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': '1996—Subsec. (c).  Pub. L. 104–188, §\u202f1401(b)(7) , struck out subsec. (c) which related to treatment of termination of status as deemed employee.\nSubsec. (e)(2), (3).  Pub. L. 104–188, §\u202f1402(b)(2) , redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “Section 101(b) (relating to employees’ death benefits).”\n1992—Subsec. (c).  Pub. L. 102–318  substituted “402(d)” for “402(e)”.\n1989—Subsec. (a).  Pub. L. 101–239, §\u202f10201(b)(1) , substituted “3121( l )(6)” for “3121( l )(8)”.\nSubsec. (b)(1)(A).  Pub. L. 101–239, §\u202f7831(f) , made technical correction to  Pub. L. 99–514, §\u202f1114(b)(9)(A) , see 1986 Amendment note below.\nSubsec. (c).  Pub. L. 101–239, §\u202f7811(g)(3) , substituted “purposes of limitation” for “purposes limitation” in heading.\nSubsec. (c)(3).  Pub. L. 101–239, §\u202f10201(b)(2) , substituted “3121( l )(6)(B)” for “3121( l )(8)(B)”.\n1988—Subsec. (c).  Pub. L. 100–647, §\u202f1011A(b)(16) , struck out “of capital gain provisions and” after “service for purposes” in heading and substituted “applying section 402(e)” for “applying subsections (a)(2) and (e) of section 402, and section 403(a)(2)” in text.\nSubsec. (e).  Pub. L. 100–647, §\u202f1011A(b)(1)(C) , redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “Section 72(d) (relating to employees’ annuities).”\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1112(d)(3) , struck out “(without regard to paragraph (1)(A) thereof)” after “section 410(b)” in introductory text.\nSubsec. (b)(1)(A).  Pub. L. 99–514, §\u202f1114(b)(9)(A) , as amended by  Pub. L. 101–239, §\u202f7831(f) , substituted “a highly compensated employee (within the meaning of section 414(q))” for “an officer, shareholder, or person whose principal duties consist in supervising the work of other employees of a foreign affiliate of such American employer”.\nSubsec. (b)(1)(B).  Pub. L. 99–514, §\u202f1114(b)(9)(C) , inserted “(as so defined)” after “employee”.\nSubsec. (e)(5).  Pub. L. 99–514, §\u202f1852(e)(2)(C) , struck out par. (5) which read as follows: “Section 2517 (relating to certain annuities under qualified plans).”\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f491(d)(13) , substituted in introductory provision “or an annuity plan described in section 403(a)” for “,\u2000an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a)”.\nSubsec. (a)(3).  Pub. L. 98–369, §\u202f491(d)(14) , substituted “or 403(a)” for “,\u2000403(a), or 405(a)”.\nSubsec. (d).  Pub. L. 98–369, §\u202f491(d)(15)(A) , (B), substituted in introductory provision “section 404” for “sections 404 and 405(c)”, and “or annuity” for “annuity, or bond purchase”.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f491(d)(15)(C) , struck out “(or section 405(c))” after “section 404”.\n1983— Pub. L. 98–21, §\u202f321(e)(2)(D)(i) , substituted “Employees of foreign affiliates covered by section 3121( l ) agreements” for “Certain employees of foreign subsidiaries” in section catchline.\nSubsec. (a).  Pub. L. 98–21, §\u202f321(c) , amended subsec. (a) generally, substituting “American employer” for “domestic corporation” in heading and in text wherever appearing, inserting reference to  section 3121(h) of this title , inserting “or resident” after “citizen” wherever appearing, substituting “foreign affiliate” for “foreign subsidiary” wherever appearing, and “foreign affiliates” for “foreign subsidiaries”.\nSubsec. (b).  Pub. L. 98–21, §\u202f321(e)(2)(A) , substituted reference to an American employer for reference to a domestic corporation, and reference to an affiliate for reference to a subsidiary, wherever appearing.\nSubsec. (c).  Pub. L. 98–21, §\u202f321(e)(2)(A) , substituted reference to an American employer for reference to a domestic corporation, and reference to an affiliate for reference to a subsidiary, wherever appearing in provisions preceding par. (1) and in pars. (1) and (2).\nSubsec. (c)(3).  Pub. L. 98–21, §\u202f321(e)(2)(A) , (B), substituted “foreign affiliate by reason of which he is treated as an employee of such American employer, if he becomes an employee of another entity in which such American employer has not less than a 10-percent interest (within the meaning of section 3121( l )(8)(B)” for “foreign subsidiary by reason of which he is treated as an employee of such domestic corporation, if he becomes an employee of another corporation controlled by such domestic corporation”.\nSubsec. (d).  Pub. L. 98–21, §\u202f321(e)(2)(A) , (C), substituted references to an American employer for references to a domestic corporation and reference to an affiliate for a reference to a subsidiary wherever appearing, substituted “another taxpayer” for “another corporation” in provisions preceding par. (1), and substituted “any other taxpayer” for “any other corporation” in par. (1).\nSubsec. (e).  Pub. L. 98–21, §\u202f321(e)(2)(A) , substituted reference to an American employer for reference to a domestic corporation wherever appearing in provisions preceding par. (1).\n1976—Subsec. (b)(2)(A).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1974—Subsec. (b)(1).  Pub. L. 93–406, §\u202f1016(a)(4) , substituted “section 401(a)(4) and section 410(b) (without regard to paragraph (1)(A) thereof)” for “paragraphs (3)(B) and (4) of section 401(a)”.\nSubsec. (c).  Pub. L. 93–406, §\u202f2005(c)(12) , substituted “subsections (a)(2) and (e) of section 402” for “section 72(n), section 402(a)(2)”.\n1969—Subsec. (c).  Pub. L. 91–172  substituted “provisions and limitation of tax” for “provisions” in heading, and substituted “section 72(n), section 402(a)(2),” for “section 402(a)(2)” in text.\nAmendment by  section 1401(b)(7) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nAmendment by  section 1402(b)(2) of Pub. L. 104–188  applicable with respect to decedents dying after  Aug. 20, 1996 , see  section 1402(c) of Pub. L. 104–188 , set out as a note under  section 101 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 7811(g)(3) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 7831(f) of Pub. L. 101–239  effective as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 7831(g) of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 101–239, title X, §\u202f10201(c) ,  Dec. 19, 1989 ,  103 Stat. 2472 , provided that:  “The amendments made by this section [amending this section,  section 3121 of this title , and  section 410 of Title 42 , The Public Health and Welfare] shall apply with respect to any agreement in effect under section 3121( l ) of the Internal Revenue Code of 1986 on or after  June 15, 1989 , with respect to which no notice of termination is in effect on such date.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1112(d)(3) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule regarding collective bargaining agreements ratified before  Mar. 1, 1986 , and with provision for waiver of excise tax on reversions, see  section 1112(e) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by section 1114(b)(9)(A), (C) of  Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , see  section 1114(c)(3) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nPub. L. 99–514, title XVIII, §\u202f1852(e)(2)(E) ,  Oct. 22, 1986 ,  100 Stat. 2868 , provided that:  “The amendments made by this paragraph [amending this section and  section 407 of this title  and repealing  section 2517 of this title ] shall apply to transfers after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nPub. L. 98–21, title III, §\u202f321(f) ,  Apr. 20, 1983 ,  97 Stat. 120 , provided that: \n “(1) (A)  The amendments made by this section [amending this section and sections 407, 1402, 3121, and 6413 of this title and  section 410 of Title 42 , The Public Health and Welfare] (other than subsection (d) [amending  section 407 of this title ]) shall apply to agreements entered into after the date of the enactment of this Act [ Apr. 20, 1983 ]. \n \n “(B)  At the election of any American employer, the amendments made by this section (other than subsection (d)) shall also apply to any agreement entered into on or before the date of the enactment of this Act. Any such election shall be made at such time and in such manner as the Secretary may by regulations prescribe. \n \n \n “(2) (A)  The amendments made by subsection (d) [amending  section 407 of this title ] shall apply to plans established after the date of the enactment of this Act [ Apr. 20, 1983 ]. \n \n “(B)  At the election of any domestic parent corporation the amendments made by subsection (d) shall also apply to any plan established on or before the date of the enactment of this Act. Any such election shall be made at such time and in such manner as the Secretary may by regulations prescribe.”\nAmendment by  section 1016(a)(4) of Pub. L. 93–406  applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , but, in the case of plans in existence on  Jan. 1, 1974 , amendment by  Pub. L. 93–406  applicable for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transition of Rules note under  section 410 of this title .\nAmendment by  section 2005(c)(12) of Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 515(d) of Pub. L. 91–172 , set out as a note under  section 402 of this title .\nPub. L. 88–272, title II, §\u202f220(d) ,  Feb. 26, 1964 ,  78 Stat. 63 , provided that:  “The amendments made by subsections (a) [enacting this section], (b) [enacting  section 407 of this title ], and (c)(1) [amending the analysis preceding  section 401 of this title ] shall apply to taxable years ending after  December 31, 1963 . The amendments made by subsections (c)(2) [amending  section 3121 of this title ] and (3) [amending  section 409 of Title 42 , The Public Health and Welfare] shall apply to remuneration paid after  December 31, 1962 .”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by sections 1112 and 1114 of  Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'The domestic parent corporation of any domestic subsidiary is the domestic corporation which owns 80 percent or more of the outstanding voting stock of such domestic subsidiary.\nFor purposes of applying paragraph (5) of section 401(a) with respect to an individual who is treated as an employee of a domestic parent corporation under subsection (a), the total compensation of such individual shall be the remuneration paid to such individual by the domestic subsidiary which would constitute his total compensation if his services had been performed for such domestic parent corporation, and the basic or regular rate of compensation of such individual shall be determined under regulations prescribed by the Secretary.\n1996—Subsec. (c).  Pub. L. 104–188, §\u202f1401(b)(8) , struck out subsec. (c) which related to treatment of termination of status as deemed employee.\nSubsec. (e)(2), (3).  Pub. L. 104–188, §\u202f1402(b)(2) , redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “Section 101(b) (relating to employees’ death benefits).”\n1992—Subsec. (c).  Pub. L. 102–318  substituted “402(d)” for “402(e)”.\n1989—Subsec. (b)(1)(A).  Pub. L. 101–239, §\u202f7831(f) , made technical correction to  Pub. L. 99–514, §\u202f1114(b)(9)(B) , see 1986 Amendment note below.\nSubsec. (c).  Pub. L. 101–239, §\u202f7811(g)(3) , substituted “purposes of limitation” for “purposes limitation” in heading.\n1988—Subsec. (c).  Pub. L. 100–647, §\u202f1011A(b)(16) , struck out “of capital gain provisions and” after “service for purposes” in heading and substituted “applying section 402(e)” for “applying subsections (a)(2) and (e) of section 402, and section 403(a)(2)” in text.\nSubsec. (e).  Pub. L. 100–647, §\u202f1011A(b)(1)(C) , redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “Section 72(d) (relating to employees’ annuities).”\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1112(d)(3) , struck out “(without regard to paragraph (1)(A) thereof)” after “section 410(b)” in introductory text.\nSubsec. (b)(1)(A).  Pub. L. 99–514, §\u202f1114(b)(9)(B) , as amended by  Pub. L. 101–239, §\u202f7831(f) , substituted “a highly compensated employee (within the meaning of section 414(q))” for “an officer, shareholder, or person whose principal duties consist in supervising the work of other employees of a domestic subsidiary”.\nSubsec. (b)(1)(B).  Pub. L. 99–514, §\u202f1114(b)(9)(C) , inserted “(as so defined)” after “employee”.\nSubsec. (e)(5).  Pub. L. 99–514, §\u202f1852(e)(2)(D) , struck out par. (5) which read as follows: “Section 2517 (relating to certain annuities under qualified plans).”\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f491(d)(16) , substituted “or an annuity plan described in section 403(a)” for “,\u2000an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a)”.\nSubsec. (a)(1)(B).  Pub. L. 98–369, §\u202f491(d)(17) , substituted “or 403(a)” for “,\u2000403(a), or 405(a)”.\nSubsec. (d).  Pub. L. 98–369, §\u202f491(d)(18)(A) , (B), substituted in introductory provision “section 404” for “sections 404 and 405(a)”, and “or annuity” for “annuity, or bond purchase”.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f491(d)(18)(C) , struck out “(or section 405(c))” after “section 404”.\n1983—Subsec. (a)(1).  Pub. L. 98–21  inserted “or resident” after “citizen”, and inserted “or residents” after “citizens” in subpar. (A).\n1976—Subsec. (b)(2).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1974—Subsec. (b)(1).  Pub. L. 93–406, §\u202f1016(a)(5) , substituted “section 401(a)(4) and section 410(b) (without regard to paragraph (1)(A) thereof)” for “paragraphs (3)(B) and (4) of section 401(a)”.\nSubsec. (c).  Pub. L. 93–406, §\u202f2005(c)(13) , substituted “subsections (a)(2) and (e) of section 402” for “section 72(n), section 402(a)(2)”.\n1969—Subsec. (c).  Pub. L. 91–172  substituted “provisions and limitation of tax” for “provisions” in heading, and substituted “section 72(n), section 402(a)(2),” for “section 402(a)(2)” in text.\nAmendment by  section 1401(b)(8) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nAmendment by  section 1402(b)(2) of Pub. L. 104–188  applicable with respect to decedents dying after  Aug. 20, 1996 , see  section 1402(c) of Pub. L. 104–188 , set out as a note under  section 101 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 7811(g)(3) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 7831(f) of Pub. L. 101–239  effective as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 7831(g) of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1112(d)(3) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule regarding collective bargaining agreements ratified before  Mar. 1, 1986 , and with provision for waiver of excise tax on reversions, see  section 1112(e) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by section 1114(b)(9)(B), (C) of  Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , see  section 1114(c)(3) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by  section 1852(e)(2)(D) of Pub. L. 99–514  applicable to transfers after  Oct. 22, 1986 , see  section 1852(e)(2)(E) of Pub. L. 99–514 , set out as a note under  section 406 of this title .\nAmendment by  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 98–21  applicable to plans established after  Apr. 20, 1983 , except that at the election of any domestic parent corporation such amendment shall also apply to any plan established on or before  Apr. 20, 1983 , see  section 321(f) of Pub. L. 98–21  set out as a note under  section 406 of this title .\nAmendment by  section 1016(a)(5) of Pub. L. 93–406  applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , but, in the case of plans in existence on  Jan. 1, 1974 , amendment by  Pub. L. 93–406  applicable for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nAmendment by  section 2005(c)(13) of Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 515(d) of Pub. L. 91–172 , set out as a note under  section 402 of this title .\nSection applicable to taxable years ending after  Dec. 31, 1963 , see  section 220(d) of Pub. L. 88–272 , set out as a note under  section 406 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by sections 1112 and 1114 of  Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Except as otherwise provided in this subsection, any amount paid or distributed out of an individual retirement plan shall be included in gross income by the payee or distributee, as the case may be, in the manner provided under section 72.\nThis paragraph does not apply to any amount described in subparagraph (A)(i) received by an individual from an individual retirement account or individual retirement annuity if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in that subparagraph from an individual retirement account or an individual retirement annuity which was not includible in his gross income because of the application of this paragraph.\nIf any amount paid or distributed out of an individual retirement account or individual retirement annuity would meet the requirements of subparagraph (A) but for the fact that the entire amount was not paid into an eligible plan as required by clause (i) or (ii) of subparagraph (A), such amount shall be treated as meeting the requirements of subparagraph (A) to the extent it is paid into an eligible plan referred to in such clause not later than the 60th day referred to in such clause.\nFor purposes of clause (i), the term “eligible plan” means any account, annuity, contract, or plan referred to in subparagraph (A).\nThis paragraph shall not apply to any amount to the extent such amount is required to be distributed under subsection (a)(6) or (b)(3).\nFor purposes of this paragraph, rules similar to the rules of section 402(c)(7) (relating to frozen deposits) shall apply.\nIn the case of any payment or distribution out of a simple retirement account (as defined in subsection (p)) to which section 72(t)(6)(A) applies, this paragraph shall not apply unless such payment or distribution is paid into another simple retirement account.\nThe Secretary may waive the 60-day requirement under subparagraphs (A) and (D) where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.\nThe transfer of an individual’s interest in an individual retirement account or an individual retirement annuity to his spouse or former spouse under a divorce or separation instrument described in clause (i) of section 121(d)(3)(C) is not to be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest at the time of the transfer is to be treated as an individual retirement account of such spouse, and not of such individual. Thereafter such account or annuity for purposes of this subtitle is to be treated as maintained for the benefit of such spouse.\nNotwithstanding any other provision of this subsection or section 72(t), paragraph (1) and section 72(t)(1) shall apply to the transfer or distribution from a simplified employee pension of any contribution under a salary reduction arrangement described in subsection (k)(6) (or any income allocable thereto) before a determination as to whether the requirements of subsection (k)(6)(A)(iii) are met with respect to such contribution.\nFor purposes of paragraphs (4) and (5) and section 4973, any amount excludable or excluded from gross income under section 402(h) or 402(k) shall be treated as an amount allowable or allowed as a deduction under section 219.\nFor purposes of this paragraph, a distribution to an organization described in subparagraph (B)(i) shall be treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph).\nNotwithstanding section 72, in determining the extent to which a distribution is a qualified charitable distribution, the entire amount of the distribution shall be treated as includible in gross income without regard to subparagraph (A) to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts in all individual retirement plans of the individual were distributed during such taxable year and all such plans were treated as 1 contract for purposes of determining under section 72 the aggregate amount which would have been so includible. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.\nQualified charitable distributions which are not includible in gross income pursuant to subparagraph (A) shall not be taken into account in determining the deduction under section 170.\nNotwithstanding section 664(b), distributions made from a trust described in subclause (I) or (II) of clause (ii) shall be treated as ordinary income in the hands of the beneficiary to whom the annuity described in section 664(d)(1)(A) or the payment described in section 664(d)(2)(A) is paid.\nQualified charitable distributions made to fund a charitable gift annuity shall not be treated as an investment in the contract for purposes of section 72(c).\nIf any dollar amount increased under clause (i) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000.\nIn the case of an individual who is an eligible individual (as defined in section 223(c)) and who elects the application of this paragraph for a taxable year, gross income of the individual for the taxable year does not include a qualified HSA funding distribution to the extent such distribution is otherwise includible in gross income.\nFor purposes of this paragraph, the term “qualified HSA funding distribution” means a distribution from an individual retirement plan (other than a plan described in subsection (k) or (p)) of the employee to the extent that such distribution is contributed to the health savings account of the individual in a direct trustee-to-trustee transfer.\nExcept as provided in subclause (II), an individual may make an election under subparagraph (A) only for one qualified HSA funding distribution during the lifetime of the individual. Such an election, once made, shall be irrevocable.\nIf a qualified HSA funding distribution is made during a month in a taxable year during which an individual has self-only coverage under a high deductible health plan as of the first day of the month, the individual may elect to make an additional qualified HSA funding distribution during a subsequent month in such taxable year during which the individual has family coverage under a high deductible health plan as of the first day of the subsequent month.\nSubclauses (I) and (II) of clause (i) shall not apply if the individual ceased to be an eligible individual by reason of the death of the individual or the individual becoming disabled (within the meaning of section 72(m)(7)).\nThe term “testing period” means the period beginning with the month in which the qualified HSA funding distribution is contributed to a health savings account and ending on the last day of the 12th month following such month.\nNotwithstanding section 72, in determining the extent to which an amount is treated as otherwise includible in gross income for purposes of subparagraph (A), the aggregate amount distributed from an individual retirement plan shall be treated as includible in gross income to the extent that such amount does not exceed the aggregate amount which would have been so includible if all amounts from all individual retirement plans were distributed. Proper adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.\nAny individual retirement account is exempt from taxation under this subtitle unless such account has ceased to be an individual retirement account by reason of paragraph (2) or (3). Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations).\nIn any case in which any account ceases to be an individual retirement account by reason of subparagraph (A) as of the first day of any taxable year, paragraph (1) of subsection (d) applies as if there were a distribution on such first day in an amount equal to the fair market value (on such first day) of all assets in the account (on such first day).\nIf during any taxable year the owner of an individual retirement annuity borrows any money under or by use of such contract, the contract ceases to be an individual retirement annuity as of the first day of such taxable year. Such owner shall include in gross income for such year an amount equal to the fair market value of such contract as of such first day.\nIf, during any taxable year of the individual for whose benefit an individual retirement account is established, that individual uses the account or any portion thereof as security for a loan, the portion so used is treated as distributed to that individual.\nAny common trust fund or common investment fund of individual retirement account assets which is exempt from taxation under this subtitle does not cease to be exempt on account of the participation or inclusion of assets of a trust exempt from taxation under section 501(a) which is described in section 401(a).\nThis section shall be applied without regard to any community property laws.\nFor purposes of this section, a custodial account shall be treated as a trust if the assets of such account are held by a bank (as defined in subsection (n)) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which he will administer the account will be consistent with the requirements of this section, and if the custodial account would, except for the fact that it is not a trust, constitute an individual retirement account described in subsection (a). For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof.\nIn the case of any simplified employee pension, subsections (a)(1) and (b)(2) of this section shall be applied by increasing the amounts contained therein by the amount of the limitation in effect under section 415(c)(1)(A).\nThe requirements of this paragraph are met with respect to a simplified employee pension for a year if for such year the contributions made by the employer to simplified employee pensions for his employees do not discriminate in favor of any highly compensated employee (within the meaning of section 414(q)).\nFor purposes of subparagraph (A), there shall be excluded from consideration employees described in subparagraph (A) or (C) of section 410(b)(3).\nFor purposes of subparagraph (A), and except as provided in subparagraph (D), employer contributions to simplified employee pensions (other than contributions under an arrangement described in paragraph (6)) shall be considered discriminatory unless contributions thereto bear a uniform relationship to the compensation (not in excess of the first $200,000) of each employee maintaining a simplified employee pension.\nFor purposes of subparagraph (C), the rules of section 401( l )(2) shall apply to contributions to simplified employee pensions (other than contributions under an arrangement described in paragraph (6)).\nClause (i) shall not apply to a simplified employee pension unless an election described in clause (i)(I) is made or is in effect with respect to not less than 50 percent of the employees of the employer eligible to participate.\nClause (i) shall not apply to a simplified employee pension unless the requirements of section 401(a)(30) are met.\nThis paragraph shall not apply with respect to any year in the case of a simplified employee pension maintained by an employer with more than 25 employees who were eligible to participate (or would have been required to be eligible to participate if a pension was maintained) at any time during the preceding year.\nRules similar to the rules of section 401(k)(8) shall apply to any excess contribution under this paragraph. Any excess contribution under a simplified employee pension shall be treated as an excess contribution for purposes of section 4979.\nFor purposes of clause (i), the term “excess contribution” means, with respect to a highly compensated employee, the excess of elective employer contributions under this paragraph over the maximum amount of such contributions allowable under subparagraph (A)(iii).\nFor purposes of this paragraph, the term “highly compensated employee” has the meaning given such term by section 414(q).\nThis paragraph shall not apply to years beginning after  December 31, 1996 . The preceding sentence shall not apply to a simplified employee pension of an employer if the terms of simplified employee pensions of such employer, as in effect on  December 31, 1996 , provide that an employee may make the election described in subparagraph (A).\nAn individual retirement plan which is designated as a Roth IRA shall not be treated as a simplified employee pension under this subsection unless the employee elects for such plan to be so treated (at such time and in such manner as the Secretary may provide).\nThe terms “employee”, “employer”, and “owner-employee” shall have the respective meanings given such terms by section 401(c).\nExcept as provided in paragraph (2)(C), the term “compensation” has the meaning given such term by section 414(s).\nThe Secretary shall adjust the $450 amount in paragraph (2)(C) at the same time and in the same manner as under section 415(d) and shall adjust the $200,000 amount in paragraphs (3)(C) and (6)(D)(ii) at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B); except that any increase in the $450 amount which is not a multiple of $50 shall be rounded to the next lowest multiple of $50.\nFor excise tax on certain excess contributions, see section 4979.\nAn employer who makes a contribution on behalf of an employee to a simplified employee pension shall provide such simplified reports with respect to such contributions as the Secretary may require by regulations. The reports required by this subsection shall be filed at such time and in such manner, and information with respect to such contributions shall be furnished to the employee at such time and in such manner, as may be required by regulations.\nExcept as provided in this paragraph, no report shall be required under this section by an employer maintaining a qualified salary reduction arrangement under subsection (p).\nThe employer shall notify each employee immediately before the period for which an election described in subsection (p)(5)(C) may be made of the employee’s opportunity to make such election. Such notice shall include a copy of the description described in subparagraph (B).\nThe acquisition by an individual retirement account or by an individually-directed account under a plan described in section 401(a) of any collectible shall be treated (for purposes of this section and section 402) as a distribution from such account in an amount equal to the cost to such account of such collectible.\nSubject to the provisions of this subsection, designated nondeductible contributions may be made on behalf of an individual to an individual retirement plan.\nThe amount of the designated nondeductible contributions made on behalf of any individual for any taxable year shall not exceed the nondeductible limit for such taxable year.\nIf a taxpayer elects not to deduct an amount which (without regard to this clause) is allowable as a deduction under section 219 for any taxable year, the nondeductible limit for such taxable year shall be increased by such amount.\nFor purposes of this paragraph, the term “designated nondeductible contribution” means any contribution to an individual retirement plan for the taxable year which is designated (in such manner as the Secretary may prescribe) as a contribution for which a deduction is not allowable under section 219.\nAny designation under clause (i) shall be made on the return of tax imposed by chapter 1 for the taxable year.\nIn determining for which taxable year a designated nondeductible contribution is made, the rule of section 219(f)(3) shall apply.\nFor penalty where individual reports designated nondeductible contributions not made, see section 6693(b).\nAn employer shall be treated as meeting the requirements of subparagraph (A)(iii) for any year if, in lieu of the contributions described in such clause, the employer elects to make nonelective contributions of 2 percent of compensation for each employee who is eligible to participate in the arrangement and who has at least $5,000 of compensation from the employer for the year. If an employer makes an election under this subparagraph for any year, the employer shall notify employees of such election within a reasonable period of time before the 60-day period for such year under paragraph (5)(C).\nThe compensation taken into account under clause (i) for any year shall not exceed the limitation in effect for such year under section 401(a)(17).\nIn the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, and which makes the election under subparagraph (E)(i)(II) for any year, clause (i) shall be applied for such year by substituting “3 percent” for “2 percent”.\nThe term “eligible employer” means, with respect to any year, an employer which had no more than 100 employees who received at least $5,000 of compensation from the employer for the preceding year.\nAn eligible employer who establishes and maintains a plan under this subsection for 1 or more years and who fails to be an eligible employer for any subsequent year shall be treated as an eligible employer for the 2 years following the last year the employer was an eligible employer. If such failure is due to any acquisition, disposition, or similar transaction involving an eligible employer, the preceding sentence shall not apply.\nExcept as provided in subclause (IV), the term “applicable percentage” means 3 percent.\nAn employer may elect to apply a lower percentage (not less than 1 percent) for any year for all employees eligible to participate in the plan for such year if the employer notifies the employees of such lower percentage within a reasonable period of time before the 60-day election period for such year under paragraph (5)(C). An employer may not elect a lower percentage under this subclause for any year if that election would result in the applicable percentage being lower than the applicable percentage in more than 2 of the years in the 5-year period ending with such year.\nIf any year in the 5-year period described in subclause (II) is a year prior to the first year for which any qualified salary reduction arrangement is in effect with respect to the employer (or any predecessor), the employer shall be treated as if the level of the employer matching contribution was at the applicable percentage of compensation for such prior year.\nIn the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, and which makes the election under subparagraph (E)(i)(II) for any year, subclause (I) shall be applied for such year by substituting “4 percent” for “3 percent”.\nAn arrangement shall not be treated as a qualified salary reduction arrangement for any year if the employer (or any predecessor employer) maintained a qualified plan with respect to which contributions were made, or benefits were accrued, for service in any year in the period beginning with the year such arrangement became effective and ending with the year for which the determination is being made. If only individuals other than employees described in subparagraph (A) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees so described are eligible to participate.\nFor purposes of this subparagraph, the term “qualified plan” means a plan, contract, pension, or trust described in subparagraph (A) or (B) of section 219(g)(5).\nFor purposes of clause (i), the adjusted dollar amount is an amount equal to 110 percent of the dollar amount in effect under clause (i)(III) for calendar year 2024.\nIn the case of a year beginning after  December 31, 2005 , the Secretary shall adjust the $10,000 amount under clause (i)(III) at the same time and in the same manner as under section 415(d), except that the base period taken into account shall be the calendar quarter beginning  July 1, 2004 , and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500.\nIn the case of a year beginning after  December 31, 2024 , the Secretary shall adjust annually the adjusted dollar amount under clause (ii) in the manner provided under subclause (I) of this clause, except that the base period taken into account shall be the calendar quarter beginning  July 1, 2023 .\nAn eligible employer is described in this clause only if, during the 3-taxable-year period immediately preceding the 1st year the employer maintains the qualified salary reduction arrangement under this paragraph, neither the employer nor any member of any controlled group including the employer (or any predecessor of either) established or maintained any plan described in clause (i), (ii), or (iv) of section 219(g)(5)(A) with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are eligible to participate in such qualified salary reduction arrangement.\nThe term “qualified student loan payment” means a payment made by an employee in repayment of a qualified education loan (as defined in section 221(d)(1)) incurred by the employee to pay qualified higher education expenses, but only if the employee certifies to the employer making the matching contribution that such payment has been made on such a loan.\nThe term “qualified higher education expenses” has the same meaning as when used in section 401(m)(4)(D).\nAn eligible employer which had not more than 25 employees who received at least $5,000 of compensation from the employer for 1 or more years, and which has more than 25 such employees for any subsequent year, shall be treated for purposes of subparagraph (E)(i) as having 25 such employees for the 2 years following the last year the employer had not more than 25 such employees, and not as having made the election under subparagraph (E)(i)(II) for such 2 years. Rules similar to the second sentence of subparagraph (C)(i)(II) shall apply for purposes of this subparagraph.\nThe requirements of this paragraph are met with respect to a simple retirement account if the employee’s rights to any contribution to the simple retirement account are nonforfeitable. For purposes of this paragraph, rules similar to the rules of subsection (k)(4) shall apply.\nAn employer may elect to exclude from the requirement under subparagraph (A) employees described in section 410(b)(3).\nThe term “compensation” means amounts described in paragraphs (3) and (8) of section 6051(a). For purposes of the preceding sentence, amounts described in section 6051(a)(3) shall be determined without regard to section 3401(a)(3).\nIn the case of an employee described in subparagraph (B), the term “compensation” means net earnings from self-employment determined under section 1402(a) without regard to any contribution under this subsection. The preceding sentence shall be applied as if the term “trade or business” for purposes of section 1402 included service described in section 1402(c)(6).\nThe term “employee” includes an employee as defined in section 401(c)(1).\nThe term “year” means the calendar year.\nA plan shall not be treated as failing to satisfy the requirements of this subsection or any other provision of this title merely because the employer makes all contributions to the individual retirement accounts or annuities of a designated trustee or issuer. The preceding sentence shall not apply unless each plan participant is notified in writing (either separately or as part of the notice under subsection ( l )(2)(C)) that the participant’s balance may be transferred without cost or penalty to another individual account or annuity in accordance with subsection (d)(3)(G).\nAny matching contribution described in paragraph (2)(A)(iii) which is made on behalf of a self-employed individual (as defined in section 401(c)) shall not be treated as an elective employer contribution to a simple retirement account for purposes of this title.\nFor purposes of this paragraph, the term “transition period” means the period beginning on the date of any transaction described in subparagraph (A) and ending on the last day of the second calendar year following the calendar year in which such transaction occurs.\nSubject to the requirements of this paragraph, an employer may elect (in such form and manner as the Secretary may prescribe) at any time during a year to terminate the qualified salary reduction arrangement under paragraph (2), but only if the employer establishes and maintains (as of the day after the termination date) a safe harbor plan to replace the terminated arrangement.\nFor purposes of this paragraph, the transition year is the period beginning after the termination date and ending on the last day of the calendar year during which the termination occurs.\nFor purposes of this paragraph, the term “safe harbor plan” means a qualified cash or deferred arrangement which meets the requirements of paragraph (11), (12), (13), or (16) of section 401(k).\nAn individual retirement plan which is designated as a Roth IRA shall not be treated as a simple retirement account under this subsection unless the employee elects for such plan to be so treated (at such time and in such manner as the Secretary may provide).\nFor purposes of this title, a qualified employer plan shall not fail to meet any requirement of this title solely by reason of establishing and maintaining a program described in paragraph (1).\nThe term “qualified employer plan” has the meaning given such term by section 72(p)(4)(A)(i); except that such term shall also include an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A).\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nParagraph (6) or (7) of section 101 of the Federal Credit Union Act, referred to in subsec. (n)(2), is classified to section 1752(6), (7) of Title 12, Banks and Banking.\n2022—Subsec. (b).  Pub. L. 117–328, §\u202f107(d) , in concluding provisions, substituted “the applicable age (determined under section 401(a)(9)(C)(v) for the calendar year in which such taxable year begins)” for “age 72”.\nSubsec. (d)(3)(G).  Pub. L. 117–328, §\u202f332(b)(2) , substituted “72(t)(6)(A)” for “72(t)(6)”.\nSubsec. (d)(8)(F).  Pub. L. 117–328, §\u202f307(a) , added subpar. (F).\nSubsec. (d)(8)(G).  Pub. L. 117–328, §\u202f307(b) , added subpar. (G).\nSubsec. (e)(2)(A)(iii).  Pub. L. 117–328, §\u202f322(a) , added cl. (iii).\nSubsec. (k)(7) to (10).  Pub. L. 117–328, §\u202f601(b)(3) , added par. (7) and redesignated former pars. (7) to (9) as (8) to (10), respectively.\nSubsec. ( o )(5)(A).  Pub. L. 117–328, §\u202f401(b)(4) , substituted “section 219(b)” for “subsection (b)”.\nSubsec. (p)(2)(A).  Pub. L. 117–328, §\u202f116(a)(2) , inserted concluding provisions.\nSubsec. (p)(2)(A)(iv).  Pub. L. 117–328, §\u202f116(a)(1) , added cl. (iv). Former cl. (iv) redesignated (v).\nSubsec. (p)(2)(A)(v).  Pub. L. 117–328, §\u202f116(b)(1) , substituted “,\u2000(iii), or (iv)” for “or (iii)”.\nPub. L. 117–328, §\u202f116(a)(1) , redesignated cl. (iv) as (v).\nSubsec. (p)(2)(B)(iii).  Pub. L. 117–328, §\u202f117(d) , added cl. (iii).\nSubsec. (p)(2)(C)(ii)(I).  Pub. L. 117–328, §\u202f117(c)(1) , substituted “Except as provided in subclause (IV), the term” for “The term”.\nSubsec. (p)(2)(C)(ii)(II), (III).  Pub. L. 117–328, §\u202f117(c)(3) , substituted “the applicable percentage” for “3 percent”.\nSubsec. (p)(2)(C)(ii)(IV).  Pub. L. 117–328, §\u202f117(c)(2) , added subcl. (IV).\nSubsec. (p)(2)(E)(i) to (iii).  Pub. L. 117–328, §\u202f117(a) , substituted “dollar amount is—” and subcls. (I) to (III) for “amount is $10,000.” in cl. (i), added cl. (ii) and redesignated former cl. (ii) as (iii), and, in cl. (iii), designated existing provisions as subcl. (I), inserted subcl. heading, substituted “clause (i)(III)” for “clause (i)”, and added subcl. (II).\nSubsec. (p)(2)(E)(iv).  Pub. L. 117–328, §\u202f117(f) , added cl. (iv).\nSubsec. (p)(2)(F).  Pub. L. 117–328, §\u202f110(d) , added subpar. (F).\nSubsec. (p)(2)(G).  Pub. L. 117–328, §\u202f116(a)(4) , added subpar. (G).\nSubsec. (p)(2)(H).  Pub. L. 117–328, §\u202f117(e) , added subpar. (H).\nSubsec. (p)(8).  Pub. L. 117–328, §\u202f116(a)(3) , amended par. (8) generally. Prior to amendment, text read as follows: “In the case of any simple retirement account, subsections (a)(1) and (b)(2) shall be applied by substituting ‘the sum of the dollar amount in effect under paragraph (2)(A)(ii) of this subsection and the employer contribution required under subparagraph (A)(iii) or (B)(i) of paragraph (2) of this subsection, whichever is applicable’ for ‘the dollar amount in effect under section 219(b)(1)(A)’.”\nSubsec. (p)(11).  Pub. L. 117–328, §\u202f332(a) , added par. (11).\nSubsec. (p)(12).  Pub. L. 117–328, §\u202f601(c)(1) , added par. (12).\n2019—Subsec. (b).  Pub. L. 116–94, §\u202f114(c) , substituted “age 72” for “age 70½” in concluding provisions.\nSubsec. (c)(3).  Pub. L. 116–94, §\u202f101(a)(3) , added par. (3).\nSubsec. (d)(8)(A).  Pub. L. 116–94, §\u202f107(b) , inserted at end “The amount of distributions not includible in gross income by reason of the preceding sentence for a taxable year (determined without regard to this sentence) shall be reduced (but not below zero) by an amount equal to the excess of—” and added cls. (i) and (ii).\nSubsec. ( o )(5).  Pub. L. 116–94, §\u202f116(a)(1) , added par. (5).\n2018—Subsec. (a)(1).  Pub. L. 115–141, §\u202f401(a)(75) , inserted “or” after “subsection (d)(3)”.\nSubsec. (m)(3)(B).  Pub. L. 115–141, §\u202f401(a)(76) , substituted “section 5” for “section 7”.\n2017—Subsec. (d)(6).  Pub. L. 115–97  substituted “clause (i) of section 121(d)(3)(C)” for “subparagraph (A) of section 71(b)(2)”.\n2015—Subsec. (d)(8)(F).  Pub. L. 114–113, §\u202f112(a) , struck out subpar. (F). Text read as follows: “This paragraph shall not apply to distributions made in taxable years beginning after  December 31, 2014 .”\nSubsec. (p)(1)(B).  Pub. L. 114–113, §\u202f306(a) , inserted “except in the case of a rollover contribution described in subsection (d)(3)(G) or a rollover contribution otherwise described in subsection (d)(3) or in section 402(c), 403(a)(4), 403(b)(8), or 457(e)(16), which is made after the 2-year period described in section 72(t)(6),” before “with respect to which the only contributions allowed”.\n2014—Subsec. (d)(8)(F).  Pub. L. 113–295, §\u202f108(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\nSubsec. (p)(2)(E)(i).  Pub. L. 113–295, §\u202f221(a)(53) , amended cl. (i) generally. Prior to amendment, cl. (i) listed applicable dollar amounts for subsec. (p)(2)(A)(ii) for calendar years 2002 to 2005 and thereafter.\n2013—Subsec. (d)(8)(F).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (d)(8)(F).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (d)(8)(F).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2007—Subsec. (d)(8)(D).  Pub. L. 110–172  substituted “all amounts in all individual retirement plans of the individual were distributed during such taxable year and all such plans were treated as 1 contract for purposes of determining under section 72 the aggregate amount which would have been so includible” for “all amounts distributed from all individual retirement plans were treated as 1 contract under paragraph (2)(A) for purposes of determining the inclusion of such distribution under section 72”.\n2006—Subsec. (d)(8).  Pub. L. 109–280 , which directed the amendment of section 408(d) by adding par. (8), without specifying the act to be amended, was executed by making the addition to this section, which is section 408 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\nSubsec. (d)(9).  Pub. L. 109–432  added par. (9).\n2004—Subsec. (a)(1).  Pub. L. 108–311, §\u202f408(a)(12) , substituted “457(e)(16),” for “457(e)(16)”.\nSubsec. (n)(2).  Pub. L. 108–311, §\u202f408(a)(13) , substituted “paragraph (6) or (7) of section 101” for “section 101(6)”.\nSubsec. (p)(6)(A)(i).  Pub. L. 108–311, §\u202f404(d) , inserted at end “For purposes of the preceding sentence, amounts described in section 6051(a)(3) shall be determined without regard to section 3401(a)(3).”\n2002—Subsec. (k)(2)(C).  Pub. L. 107–147, §\u202f411(j)(1)(A) , substituted “$450” for “$300”.\nSubsec. (k)(8).  Pub. L. 107–147, §\u202f411(j)(1)(B) , substituted “$450” for “$300” in two places.\nSubsec. (q)(3)(A).  Pub. L. 107–147, §\u202f411(i)(1) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘qualified employer plan’ has the meaning given such term by section 72(p)(4); except such term shall not include a government plan which is not a qualified plan unless the plan is an eligible deferred compensation plan (as defined in section 457(b)).”\n2001—Subsec. (a)(1).  Pub. L. 107–16, §\u202f641(e)(8) , substituted “403(b)(8), or 457(e)(16)” for “or 403(b)(8),”.\nPub. L. 107–16, §\u202f601(b)(1) , substituted “on behalf of any individual in excess of the amount in effect for such taxable year under section 219(b)(1)(A)” for “in excess of $2,000 on behalf of any individual”.\nSubsec. (b).  Pub. L. 107–16, §\u202f601(b)(3) , substituted “the dollar amount in effect under section 219(b)(1)(A)” for “$2,000” in concluding provisions.\nSubsec. (b)(2)(B).  Pub. L. 107–16, §\u202f601(b)(2) , substituted “the dollar amount in effect under section 219(b)(1)(A)” for “$2,000”.\nSubsec. (d)(3)(A).  Pub. L. 107–16, §\u202f642(a) , inserted “or” at end of cl. (i), added cl. (ii) and concluding provisions, and struck out former cls. (ii) and (iii) which read as follows:\n“(ii) no amount in the account and no part of the value of the annuity is attributable to any source other than a rollover contribution (as defined in section 402) from an employee’s trust described in section 401(a) which is exempt from tax under section 501(a) or from an annuity plan described in section 403(a) (and any earnings on such contribution), and the entire amount received (including property and other money) is paid (for the benefit of such individual) into another such trust or annuity plan not later than the 60th day on which the individual receives the payment or the distribution; or\n“(iii)(I) the entire amount received (including money and other property) represents the entire interest in the account or the entire value of the annuity,\n“(II) no amount in the account and no part of the value of the annuity is attributable to any source other than a rollover contribution from an annuity contract described in section 403(b) and any earnings on such rollover, and\n“(III) the entire amount thereof is paid into another annuity contract described in section 403(b) (for the benefit of such individual) not later than the 60th day after he receives the payment or distribution.”\nSubsec. (d)(3)(D)(i).  Pub. L. 107–16, §\u202f642(b)(2) , substituted “(i) or (ii)” for “(i), (ii), or (iii)”.\nSubsec. (d)(3)(G).  Pub. L. 107–16, §\u202f642(b)(3) , reenacted heading without change and amended text of subpar. (G) generally. Prior to amendment, text read as follows: “This paragraph shall not apply to any amount paid or distributed out of a simple retirement account (as defined in subsection (p)) unless—\n“(i) it is paid into another simple retirement account, or\n“(ii) in the case of any payment or distribution to which section 72(t)(6) does not apply, it is paid into an individual retirement plan.”\nSubsec. (d)(3)(H).  Pub. L. 107–16, §\u202f643(c) , added subpar. (H).\nSubsec. (d)(3)(I).  Pub. L. 107–16, §\u202f644(b) , added subpar. (I).\nSubsec. (j).  Pub. L. 107–16, §\u202f601(b)(4) , struck out “$2,000” before “amounts”.\nSubsec. (k)(3)(C), (6)(D)(ii), (8).  Pub. L. 107–16, §\u202f611(c)(1) , substituted “$200,000” for “$150,000”.\nSubsec. (p)(2)(A)(ii).  Pub. L. 107–16, §\u202f611(f)(1) , substituted “the applicable dollar amount” for “$6,000”.\nSubsec. (p)(2)(E).  Pub. L. 107–16, §\u202f611(f)(2) , amended heading and text of subpar. (E) generally. Prior to amendment, text read as follows: “The Secretary shall adjust the $6,000 amount under subparagraph (A)(ii) at the same time and in the same manner as under section 415(d), except that the base period taken into account shall be the calendar quarter ending  September 30, 1996 , and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500.”\nSubsec. (p)(6)(A)(ii).  Pub. L. 107–16, §\u202f611(g)(2) , inserted at end “The preceding sentence shall be applied as if the term ‘trade or business’ for purposes of section 1402 included service described in section 1402(c)(6).”\nSubsec. (p)(8).  Pub. L. 107–16, §\u202f601(b)(5) , substituted “the dollar amount in effect under section 219(b)(1)(A)” for “$2,000”.\nSubsecs. (q), (r).  Pub. L. 107–16, §\u202f602(a) , added subsec. (q) and redesignated former subsec. (q) as (r).\n2000—Subsec. (d)(5).  Pub. L. 106–554  amended heading generally. Prior to amendment, heading read as follows: “Certain distributions of excess contributions after due date for taxable year”.\n1998—Subsec. (d)(7).  Pub. L. 105–206, §\u202f6018(b)(2) , inserted “or simple retirement accounts” after “pensions” in heading.\nSubsec. (d)(7)(B).  Pub. L. 105–206, §\u202f6018(b)(1) , inserted “or 402(k)” after “section 402(h)”.\nSubsec. (p)(2)(C)(i)(II).  Pub. L. 105–206, §\u202f6016(a)(1)(C)(i) , substituted “the preceding sentence shall not apply” for “the preceding sentence shall apply only in accordance with rules similar to the rules of section 410(b)(6)(C)(i)” in last sentence.\nSubsec. (p)(2)(D)(i).  Pub. L. 105–206, §\u202f6016(a)(1)(A) , struck out “or (B)” after “(A)” in last sentence.\nSubsec. (p)(2)(D)(iii).  Pub. L. 105–206, §\u202f6016(a)(1)(C)(ii) , struck out heading and text of cl. (iii). Text read as follows: “In the case of an employer who establishes and maintains a plan under this subsection for 1 or more years and who fails to meet any requirement of this subsection for any subsequent year due to any acquisition, disposition, or similar transaction involving another such employer, rules similar to the rules of section 410(b)(6)(C) shall apply for purposes of this subsection.”\nSubsec. (p)(8), (9).  Pub. L. 105–206, §\u202f6015(a) , redesignated par. (8), relating to matching contributions on behalf of self-employed individuals not treated as elective employer contributions, as (9).\nSubsec. (p)(10).  Pub. L. 105–206, §\u202f6016(a)(1)(B) , added par. (10).\n1997—Subsec. (i).  Pub. L. 105–34, §\u202f1601(d)(1)(A) , substituted “31 days” for “30 days” in concluding provisions.\nPub. L. 105–34, §\u202f302(d) , struck out “under regulations” after “may require” in introductory provisions and struck out “in such regulations” after “prescribes” in pars. (1) and (2)(B).\nSubsec. (k)(6)(H).  Pub. L. 105–34, §\u202f1601(d)(1)(B) , substituted “of an employer if the terms of simplified employee pensions of such employer” for “if the terms of such pension”.\nSubsec. ( l )(2)(B).  Pub. L. 105–34, §\u202f1601(d)(1)(C)(i) , inserted “and the issuer of an annuity established under such an arrangement” after “under subsection (p)” in introductory provisions and “or issuer” after “trustee” in cl. (i).\nSubsec. (m)(3).  Pub. L. 105–34, §\u202f304(a) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “In the case of an individual retirement account, paragraph (2) shall not apply to—\n“(A) any gold coin described in paragraph (7), (8), (9), or (10) of  section 5112(a) of title 31 ,\n“(B) any silver coin described in  section 5112(e) of title 31 , or\n“(C) any coin issued under the laws of any State.”\nSubsec. (p)(2)(D)(i).  Pub. L. 105–34, §\u202f1601(d)(1)(E) , inserted at end “If only individuals other than employees described in subparagraph (A) or (B) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees so described are eligible to participate.”\nSubsec. (p)(2)(D)(iii).  Pub. L. 105–34, §\u202f1601(d)(1)(F) , added cl. (iii).\nSubsec. (p)(5).  Pub. L. 105–34, §\u202f1601(d)(1)(G) , substituted “simple” for “simplified” in introductory provisions.\nSubsec. (p)(8).  Pub. L. 105–34, §\u202f1601(d)(1)(D) , added par. (8) relating to coordination with maximum limitation under subsection (a).\nPub. L. 105–34, §\u202f1501(b) , added par. (8) relating to matching contributions on behalf of self-employed individuals not treated as elective employer contributions.\n1996—Subsec. (d)(3)(G).  Pub. L. 104–188, §\u202f1421(b)(3)(B) , added subpar. (G).\nSubsec. (d)(5)(A).  Pub. L. 104–188, §\u202f1427(b)(3) , substituted “the dollar amount in effect under section 219(b)(1)(A)” for “$2,250” in introductory provisions.\nSubsec. (i).  Pub. L. 104–188, §\u202f1455(b)(1) , inserted “aggregating $10 or more in any calendar year” after “distributions” in introductory provisions.\nPub. L. 104–188, §\u202f1421(b)(6) , inserted at end “In the case of a simple retirement account under subsection (p), only one report under this subsection shall be required to be submitted each calendar year to the Secretary (at the time provided under paragraph (2)) but, in addition to the report under this subsection, there shall be furnished, within 30 days after each calendar year, to the individual on whose behalf the account is maintained a statement with respect to the account balance as of the close of, and the account activity during, such calendar year.”\nSubsec. (k)(2)(C).  Pub. L. 104–188, §\u202f1431(c)(1)(B) , substituted “section 414(q)(4)” for “section 414(q)(7)”.\nSubsec. (k)(6)(H).  Pub. L. 104–188, §\u202f1421(c) , added subpar. (H).\nSubsec. ( l ).  Pub. L. 104–188, §\u202f1421(b)(5) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsecs. (p), (q).  Pub. L. 104–188, §\u202f1421(a) , added subsec. (p) and redesignated former subsec. (p) as (q).\n1994—Subsec. (k)(8).  Pub. L. 103–465  inserted before period at end “;\u2000except that any increase in the $300 amount which is not a multiple of $50 shall be rounded to the next lowest multiple of $50”.\n1993—Subsec. (k)(3)(C), (6)(D)(ii).  Pub. L. 103–66, §\u202f13212(b)(1) , substituted “$150,000” for “$200,000”.\nSubsec. (k)(8).  Pub. L. 103–66, §\u202f13212(b)(2) , amended heading and text of par. (8) generally. Prior to amendment, text read as follows: “The Secretary shall adjust the $300 amount in paragraph (2)(C) and the $200,000 amount in paragraphs (3)(C) and (6)(D)(ii) at the same time and in the same manner as under section 415(d), except that in the case of years beginning after 1988, the $200,000 amount (as so adjusted) shall not exceed the amount in effect under section 401(a)(17).”\n1992—Subsec. (a)(1).  Pub. L. 102–318, §\u202f521(b)(16) , substituted “402(c)” for “402(a)(5), 402(a)(7)”.\nSubsec. (d)(3)(A)(ii).  Pub. L. 102–318, §\u202f521(b)(17) , amended clause (ii) generally. Prior to amendment, clause (ii) read as follows: “the entire amount received (including money and any other property) represents the entire amount in the account or the entire value of the annuity and no amount in the account and no part of the value of the annuity is attributable to any source other than a rollover contribution of a qualified total distribution (as defined in section 402(a)(5)(E)(i)) from an employee’s trust described in section 401(a) which is exempt from tax under section 501(a), or an annuity plan described in section 403(a) and any earnings on such sums and the entire amount thereof is paid into another such trust (for the benefit of such individual) or annuity plan not later than the 60th day on which he receives the payment or distribution; or”.\nSubsec. (d)(3)(B).  Pub. L. 102–318, §\u202f521(b)(18) , struck out at end “Clause (ii) of subparagraph (A) shall not apply to any amount paid or distributed out of an individual retirement account or an individual retirement annuity to which an amount was contributed which was treated as a rollover contribution by section 402(a)(7) (or in the case of an individual retirement annuity, such section as made applicable by section 403(a)(4)(B)).”\nSubsec. (d)(3)(F).  Pub. L. 102–318, §\u202f521(b)(19) , substituted “402(c)(7)” for “402(a)(6)(H)”.\n1989—Subsecs. (a)(6), (b)(3).  Pub. L. 101–239, §\u202f7811(m)(7) , struck out “(without regard to subparagraph (C)(ii) thereof)” after “section 401(a)(9)”.\nSubsec. (d)(6).  Pub. L. 101–239, §\u202f7841(a)(1) , substituted “his spouse or former spouse under a divorce or separation instrument described in subparagraph (A) of section 71(b)(2)” for “his former spouse under a divorce decree or under a written instrument incident to such divorce”.\n1988—Subsec. (d)(2)(C).  Pub. L. 100–647, §\u202f1011(b)(1) , substituted “in which the taxable year begins” for “with or within which the taxable year ends”.\nSubsec. (d)(3)(A).  Pub. L. 100–647, §\u202f1011A(a)(2)(A) , struck out at end “Clause (ii) shall not apply during the 5-year period beginning on the date of the qualified total distribution referred to in such clause if the individual was treated as a 5-percent owner with respect to such distribution under section 402(a)(5)(F)(ii).”\nSubsec. (d)(3)(E).  Pub. L. 100–647, §\u202f1018(t)(3)(D) , substituted “paragraph” for “subparagraph”.\nSubsec. (d)(4).  Pub. L. 100–647, §\u202f1011(b)(2) , substituted “Contributions” for “Excess contributions” in heading, struck out “to the extent that such contribution exceeds the amount allowable as a deduction under section 219” after “individual retirement annuity” in introductory provisions, and substituted “such contribution” for “such excess contribution” in subpars. (B) and (C) and in last sentence.\nSubsec. (d)(5).  Pub. L. 100–647, §\u202f1011(b)(3) , substituted “shall be computed without regard to section 219(g)” for “(after application of section 408( o )(2)(B)(ii)) shall be increased by the nondeductible limit under section 408( o )(2)(B)” in last sentence.\nSubsec. (d)(7).  Pub. L. 100–647, §\u202f1011(f)(5) , added par. (7).\nSubsec. (k)(3)(B).  Pub. L. 100–647, §\u202f1011(i)(5) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of subparagraph (A)—\n“(i) there shall be excluded from consideration employees described in subparagraph (A) or (C) of section 410(b)(3), and\n“(ii) an individual shall be considered a shareholder if he owns (with the application of section 318) more than 10 percent of the value of the stock of the employer.”\nSubsec. (k)(3)(C).  Pub. L. 100–647, §\u202f1011(f)(3)(C) , struck out “total” before “compensation”.\nSubsec. (k)(6)(A).  Pub. L. 100–647, §\u202f1011(f)(1) , substituted “Arrangements which qualify” for “In general” in heading and amended text generally. Prior to amendment, text read as follows: “A simplified employee pension shall not fail to meet the requirements of this subsection for a year merely because, under the terms of the pension—\n“(i) an employee may elect to have the employer make payments—\n“(I) as elective employer contributions to the simplified employee pension on behalf of the employee, or\n“(II) to the employee directly in cash,\n“(ii) an election described in clause (i)(I) is made or is in effect with respect to not less than 50 percent of the employees of the employer, and\n“(iii) the deferral percentage for such year of each highly compensated employee eligible to participate is not more than the product derived by multiplying the average of the deferral percentages for such year of all employees (other than highly compensated employees) eligible to participate by 1.25.”\nSubsec. (k)(6)(A)(iv).  Pub. L. 100–647, §\u202f1011(c)(7)(C) , added cl. (iv).\nSubsec. (k)(6)(B).  Pub. L. 100–647, §\u202f1011(f)(2) , inserted “who were eligible to participate (or would have been required to be eligible to participate if a pension was maintained)” after “than 25 employees”.\nSubsec. (k)(6)(D)(ii).  Pub. L. 100–647, §\u202f1011(f)(3)(A) , substituted “(not in excess of the first $200,000)” for “(within the meaning of section 414(s))”.\nSubsec. (k)(6)(F), (G).  Pub. L. 100–647, §\u202f1011(f)(4) , added subpar. (f) and redesignated former subpar. (F) as (G).\nSubsec. (k)(7)(B).  Pub. L. 100–647, §\u202f1011(f)(3)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘compensation’ means, in the case of an employee within the meaning of section 401(c)(1), earned income within the meaning of section 401(c)(2).”\nSubsec. (k)(8).  Pub. L. 100–647, §\u202f1011(f)(3)(D) , (10), substituted “paragraphs (3)(C) and (6)(D)(ii)” for “paragraph (3)(C)” and inserted “,\u2000except that in the case of years beginning after 1988, the $200,000 amount (as so adjusted) shall not exceed the amount in effect under section 401(a)(17)” after “under section 415(d)”.\nSubsec. (m)(3).  Pub. L. 100–647, §\u202f6057(a) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “In the case of an individual retirement account, paragraph (2) shall not apply to any gold coin described in paragraph (7), (8), (9), or (10) of  section 5112(a) of title 31  or any silver coin described in  section 5112(e) of title 31 .”\nSubsec. ( o )(4)(B)(iv).  Pub. L. 100–647, §\u202f1011(b)(1) , substituted “in which the taxable year begins” for “with or within which the taxable year ends”.\n1986—Subsecs. (a)(6), (b)(3).  Pub. L. 99–514, §\u202f1852(a)(1) , substituted “(without regard to subparagraph (C)(ii) thereof) and the incidental death benefit requirements of section 401(a)” for “(relating to required distributions)”.\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f1852(a)(7)(A) , substituted “paragraphs (1) through (6)” for “paragraphs (1) through (7)”.\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1102(c) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Except as otherwise provided in this subsection, any amount paid or distributed out of an individual retirement account or under an individual retirement annuity shall be included in gross income by the payee or distributee, as the case may be, for the taxable year in which the payment or distribution is received. Notwithstanding any other provision of this title (including chapters 11 and 12), the basis any person in such an account or annuity is zero.”\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1102(c) , substituted “Special rules for applying section 72” for “Distributions of annuity contracts” in heading and amended par. generally. Prior to amendment, par. (2) read as follows: “Paragraph (1) does not apply to any annuity contract which meets the requirements of paragraphs (1), (3), (4), and (5) of subsection (b) and which is distributed from an individual retirement account. Section 72 applies to any such annuity contract, and for purposes of section 72 the investment in such contract is zero.”\nSubsec. (d)(3)(A).  Pub. L. 99–514, §\u202f1875(c)(8)(C) , inserted at end “Clause (ii) shall not apply during the 5-year period beginning on the date of the qualified total distribution referred to in such clause if the individual was treated as a 5-percent owner with respect to such distribution under section 402(a)(5)(F)(ii).”\nSubsec. (d)(3)(A)(ii).  Pub. L. 99–514, §\u202f1875(c)(8)(A) , (B), struck out “(other than a trust forming part of a plan under which the individual was an employee within the meaning of section 401(c)(1) at the time contributions were made on his behalf under the plan)” after “section 501(a)” and struck out “(other than a plan under which the individual was an employee within the meaning of section 401(c)(1) at the time contributions were made on his behalf under the plan)” after “section 403(a)”.\nPub. L. 99–514, §\u202f1121(c)(2) , made amendment identical to  Pub. L. 99–514, §\u202f1875(c)(8)(A) , (B), see above.\nSubsec. (d)(3)(E).  Pub. L. 99–514, §\u202f1852(a)(5)(C) , added subpar. (E).\nSubsec. (d)(3)(F).  Pub. L. 99–514, §\u202f1122(e)(2)(B) , added subpar. (F).\nSubsec. (d)(5).  Pub. L. 99–514, §\u202f1102(b)(2) , inserted at end “For purposes of this paragraph, the amount allowable as a deduction under section 219 (after application of section 408( o )(2)(B)(ii)) shall be increased by the nondeductible limit under section 408( o )(2)(B).”\nSubsec. (d)(5)(A).  Pub. L. 99–514, §\u202f1875(c)(6)(A) , substituted “the dollar limitation in effect under section 415(c)(1)(A) for such taxable year” for “$15,000”.\nSubsec. (f).  Pub. L. 99–514, §\u202f1123(d)(2) , struck out subsec. (f) which related to additional tax on certain amounts included in gross income before age 59½.\nSubsec. (i).  Pub. L. 99–514, §\u202f1102(e)(2) , amended last sentence generally. Prior to amendment, last sentence read as follows: “The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by those regulations.”\nSubsec. (k)(2).  Pub. L. 99–514, §\u202f1108(d) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “This paragraph is satisfied with respect to a simplified employee pension for a calendar year only if for such year the employer contributes to the simplified employee pension of each employee who—\n“(A) has attained age 21, and\n“(B) has performed service for the employer during at least 3 of the immediately preceding 5 calendar years.\nFor purposes of this paragraph, there shall be excluded from consideration employees described in subparagraph (A) or (C) of section 410(b)(3).”\nSubsec. (k)(2)(A).  Pub. L. 99–514, §\u202f1898(a)(5) , substituted “age 21” for “age 25”.\nSubsec. (k)(3)(A).  Pub. L. 99–514, §\u202f1108(g)(4) , substituted “year” for “calendar year”.\nPub. L. 99–514, §\u202f1108(g)(1)(A) , substituted “any highly compensated employee (within the meaning of section 414(q))” for “any employee who is—\n“(i) an officer,\n“(ii) a shareholder,\n“(iii) a self-employed individual, or\n“(iv) highly compensated”.\nSubsec. (k)(3)(C).  Pub. L. 99–514, §\u202f1108(g)(1)(B) , inserted “and except as provided in subparagraph (D),” and “(other than contributions under an arrangement described in paragraph (6))”, and struck out end sentence which read as follows: “The Secretary shall annually adjust the $200,000 amount contained in the preceding sentence at the same time and in the same manner as he adjusts the dollar amount contained in section 415(c)(1)(A).”\nSubsec. (k)(3)(D), (E).  Pub. L. 99–514, §\u202f1108(g)(1)(C) , added subpar. (D) and struck out former subpar. (D), treatment of certain contributions and taxes, which read “Except as provided in this subparagraph, employer contributions do not meet the requirements of this paragraph unless such contributions meet the requirements of this paragraph without taking into account contributions or benefits under chapter 2 (relating to tax on self-employment income), chapter 21 (relating to Federal Insurance Contribution Act), title II of the Social Security Act, or any other Federal or State law. If the employer does not maintain an integrated plan at any time during the taxable year, OASDI contributions (as defined in section 401( l )(2)) may, for purposes of this paragraph, be taken into account as contributions by the employer to the employee’s simplified employee pension, but only if such contributions are so taken into account with respect to each employee maintaining a simplified employee pension.”, and former subpar. (E), integrated plan defined, which read “For purposes of subparagraph (D), the term ‘integrated plan’ means a plan which meets the requirements of section 401(a) or 403(a) but would not meet such requirements if contributions or benefits under chapter 2 (relating to tax on self-employment income), chapter 21 (relating to Federal Insurance Contributions Act), title II of the Social Security Act, or any other Federal or State law were not taken into account.”\nSubsec. (k)(6).  Pub. L. 99–514, §\u202f1108(a) , added par. (6).\nSubsec. (k)(7)(C).  Pub. L. 99–514, §\u202f1108(f) , added subpar. (C).\nSubsec. (k)(8).  Pub. L. 99–514, §\u202f1108(e) , added par. (8).\nSubsec. (k)(9).  Pub. L. 99–514, §\u202f1108(g)(6) , added par. (9).\nSubsec. (m)(3).  Pub. L. 99–514, §\u202f1144(a) , added par. (3).\nSubsecs. ( o ), (p).  Pub. L. 99–514, §\u202f1102(a) , added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f491(d)(19) , substituted “or 403(b)(8)” for “403(b)(8), 405(d)(3), or 409(b)(3)(C)”.\nSubsec. (a)(6).  Pub. L. 98–369, §\u202f521(b)(1) , added par. (6) and struck out former par. (6) which provided that the entire interest of an individual for whose benefit the trust is maintained will be distributed to him not later than the close of his taxable year in which he attains age 70½, or will be distributed, commencing before the close of such taxable year, in accordance with regulations prescribed by the Secretary, over (A) the life of such individual or the lives of such individual and his spouse, or (B) a period not extending beyond the life expectancy of such individual or the life expectancy of such individual and his spouse.\nSubsec. (a)(7).  Pub. L. 98–369, §\u202f521(b)(1) , struck out par. (7) which provided that if (A) an individual for whose benefit the trust is maintained dies before his entire interest has been distributed to him, or (B) distribution has been commenced as provided in paragraph (6) to his surviving spouse and such surviving spouse dies before the entire interest has been distributed to such spouse, the entire interest (or the remaining part of such interest if distribution thereof has commenced) will be distributed within 5 years after his death (or the death of the surviving spouse). The preceding sentence shall not apply if distributions over a term certain commenced before the death of the individual for whose benefit the trust was maintained and the term certain is for a period permitted under paragraph (6).\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f521(b)(2) , added par. (3) and struck out former par. (3) which provided that the entire interest of the owner will be distributed to him not later than the close of his taxable year in which he attains age 70½, or will be distributed, in accordance with regulations prescribed by the Secretary, over (A) the life of such owner or the lives of such owner and his spouse, or (B) a period not extending beyond the life expectancy of such owner or the life expectancy of such owner and his spouse.\nSubsec. (b)(4), (5).  Pub. L. 98–369, §\u202f521(b)(2) , redesignated par. (5) as (4) and struck out former par. (4) which provided that if (A) the owner dies before his entire interest has been distributed to him, or (B) distribution has been commenced as provided in paragraph (3) to his surviving spouse and such surviving spouse dies before the entire interest has been distributed to such spouse, the entire interest (or the remaining part of such interest if distribution thereof has commenced) will be distributed within 5 years after his death (or the death of the surviving spouse). The preceding sentence shall not apply if distributions over a term certain commenced before the death of the owner and the term certain is for a period permitted under paragraph (3).\nSubsec. (d)(3)(A)(i).  Pub. L. 98–369, §\u202f491(d)(20) , struck out “or retirement bond” before “for the benefit”.\nSubsec. (d)(3)(A)(ii).  Pub. L. 98–369, §\u202f522(d)(12) , substituted “rollover contribution of a qualified total distribution (as defined in section 402(a)(5)(E)(i)) from an employee’s trust” for “rollover contribution from an employee’s trust”.\nSubsec. (d)(3)(B).  Pub. L. 98–369, §\u202f491(d)(21) , substituted “or an individual retirement annuity” for “,\u2000individual retirement annuity, or a retirement bond”.\nSubsec. (d)(3)(C), (D).  Pub. L. 98–369, §\u202f713(g)(2) , designated the subpar. (C), as added by  section 335(a)(1) of Pub. L. 97–248 , relating to permitting partial rollovers, as subpar. (D).\nSubsec. (d)(3)(D)(ii).  Pub. L. 98–369, §\u202f491(d)(22) , struck out “bond,” after “annuity,”.\nSubsec. (d)(6).  Pub. L. 98–369, §\u202f491(d)(23) , substituted “or an individual retirement annuity” for “,\u2000individual retirement annuity, or retirement bond”, and “or annuity” for “,\u2000annuity, or bond”.\nSubsec. (h).  Pub. L. 98–369, §\u202f713(c)(2)(B) , substituted “(as defined in subsection (n))” for “(as defined in section 401(d)(1))”.\nSubsec. (i).  Pub. L. 98–369, §\u202f147(a) , inserted “(and the years to which they relate)”.\nSubsec. (k)(1).  Pub. L. 98–369, §\u202f713(f)(2) , amended par. (1) generally, designating existing provisions as subpar. (A) and adding subpar. (B).\nSubsec. (k)(3)(C).  Pub. L. 98–369, §\u202f713(f)(5)(B) , inserted provision which required annual adjustment of the $200,000 amount concurrently with the dollar amount adjustment in section 415(c)(1)(A).\nSubsec. (k)(3)(D).  Pub. L. 98–369, §\u202f713(j) , substituted in penultimate sentence “OASDI contributions (as defined in section 401( l )(2)” for “taxes paid under section 3111 (relating to tax on employers) with respect to an employee” and “as contributions by the employer to the employee’s simplified employee pension, but only if such contributions are so taken into account with respect to each employee maintaining a simplified employee pension” for “as a contribution by the employer to an employee’s simplified pension” and struck out third sentence which provided “If contributions are made to the simplified employee pension of an owner-employee, the preceding sentence shall not apply unless taxes paid by all such owner-employees under chapter 2, and the taxes which would be payable under chapter 2 by such owner-employees but for paragraphs (4) and (5) of section 1402(c), are taken into account as contributions by the employer on behalf of such owner-employees.”\nSubsec. (k)(3)(E).  Pub. L. 98–369, §\u202f491(d)(24) , substituted “or 403(a)” for “,\u2000403(a), or 405(a)”.\n1983—Subsec. (j).  Pub. L. 97–448, §\u202f103(d)(1)(B) , substituted “$17,000” for “$15,000” in provisions preceding par. (1).\nSubsec. (k)(3)(C)(ii).  Pub. L. 97–448, §\u202f103(d)(1)(A) , inserted “(other than an employee within the meaning of section 401(c)(1))” after “a simplified employee pension on behalf of each employee”.\nSubsecs. (m), (n).  Pub. L. 97–448, §\u202f103(e)(1) , amended directory language of  Pub. L. 97–34, §\u202f314(b)(1) , thereby correcting subsec. designations. See 1981 Amendment note below for subsecs. (m) and (n).\n1982—Subsec. (a)(2).  Pub. L. 97–248, §\u202f237(e)(3)(A) , substituted reference to subsection (n) of this section, for reference to section 401(d)(1).\nSubsec. (a)(7).  Pub. L. 97–248, §\u202f243(a)(1) , amended par. (7) generally, designating existing provisions as subpars. (A) and (B), in subpar. (B), as so designated, striking out “if” before “distribution”, in provisions following subpar. (B) substituting “will be distributed within 5 years after his death (or the death of the surviving spouse)” for “will, within 5 years after his death (or the death of the surviving spouse), be distributed, or applied to the purchase of an immediate annuity for his beneficiary or beneficiaries (or the beneficiary or beneficiaries of his surviving spouse) which will be payable for the life of such beneficiary or beneficiaries (or for a term certain not extending beyond the life expectancy of such beneficiary or beneficiaries) and which annuity will be immediately distributed to such beneficiary or beneficiaries”, and substituting “shall not apply” for “does not apply”.\nSubsec. (b)(4).  Pub. L. 97–248, §\u202f243(a)(2) , amended par. (4) generally, designating existing provisions, as subpars. (A) and (B), in subpar. (B), as so redesignated, striking out “if” before “distribution”, in provisions following subpar. (B) substituting “will be distributed within 5 years after his death (or the death of the surviving spouse)” for “will, within 5 years after his death (or the death of the surviving spouse), be distributed, or applied to the purchase of an immediate annuity for his beneficiary or beneficiaries (or the beneficiary or beneficiaries of his surviving spouse) which will be payable for the life of such beneficiary or beneficiaries (or for a term certain not extending beyond the life expectancy of such beneficiary or beneficiaries) and which annuity will be immediately distributed to such beneficiary or beneficiaries”, and substituting “shall not apply” for “shall have no application”.\nSubsec. (d)(3)(C).  Pub. L. 97–248, §\u202f243(b)(1)(A) , added subpar. (C) relating to denial of rollover treatment for inherited accounts.\nPub. L. 97–248, §\u202f335(a)(1) , added subpar. (C) relating to permitting partial rollovers.\nSubsec. (j).  Pub. L. 97–248, §\u202f238(d)(3) , amended subsec. (j) generally, substituting provisions increasing amount by the amount of the limitation in effect under section 415(c)(1)(A), for provisions increasing amount by substituting “$15,000” for “$2,000”.\nSubsec. (k)(1).  Pub. L. 97–248, §\u202f238(d)(4)(B) , struck out reference to par. (6) of this subsection.\nSubsec. (k)(3)(C).  Pub. L. 97–248, §\u202f238(d)(4)(C) , amended subpar. (C) generally, striking out cl. “(i)” designation and cl. (ii) which related to taking into account compensation in excess of $100,000 with respect to a simplified employee pension.\nSubsec. (k)(6).  Pub. L. 97–248, §\u202f238(d)(4)(A) , struck out par. (6) which related to prohibition on employer maintaining plan to which section 401(j) applies.\nSubsecs. (n), ( o ).  Pub. L. 97–248, §\u202f237(e)(3)(B) , added subsec. (n) and redesignated former subsec. (n) as ( o ).\n1981—Subsec. (a)(1).  Pub. L. 97–34, §\u202f313(b)(2) , inserted reference to section 405(d)(3).\nPub. L. 97–34, §\u202f311(g)(1)(A) , substituted “$2,000” for “$1,500”.\nSubsec. (b).  Pub. L. 97–34, §\u202f311(g)(1)(B) , substituted in par. (2)(B) and provision following par. (5) “$2,000” for “$1,500”.\nSubsec. (d)(4).  Pub. L. 97–34, §\u202f311(h)(2) , substituted section “219” for “219 or 220” in provision preceding subpar. (A) and in subpar. (B).\nSubsec. (d)(5)(A).  Pub. L. 97–34, §\u202f312(c)(5) , substituted “$15,000” for “$7,500”.\nPub. L. 97–34, §\u202f311(g)(2) , (h)(2), substituted “$2,250” for “$1,750” and “219” for “219 or 220” in two places.\nSubsec. (j).  Pub. L. 97–34, §\u202f312(c)(5) , substituted “$15,000” for “$7,500”.\nPub. L. 97–34, §\u202f311(g)(1)(C) , substituted “$2,000” for “$1,500”.\nSubsec. (k)(3)(C).  Pub. L. 97–34, §\u202f312(b)(2) , designated provision relating to compensation bearing a uniform relationship to total compensation as cl. (i), and in cl. (i) as so designated, substituted “$200,000” for “$100,000”, and added cl. (ii).\nSubsecs. (m), (n).  Pub. L. 97–34, §\u202f314(b)(1) , as amended by  Pub. L. 97–448, §\u202f103(e)(1) , added subsec. (m) and redesignated former subsec. (m) as (n).\n1980—Subsec. (a)(1).  Pub. L. 96–222, §\u202f101(a)(14)(B) , inserted reference to section 402(a)(7).\nSubsec. (d)(5).  Pub. L. 96–222, §\u202f101(a)(10)(C) , (14)(E)(ii), in subpar. (A) inserted provisions requiring that if employer contributions on behalf of the individual are paid for the taxable year to a simplified employee pension, the dollar amount of the preceding sentence be increased by the lessor of the amount of such contributions or $7,500 and restructured subpar. (B).\nSubsec. (j)(3).  Pub. L. 96–222, §\u202f101(a)(10)(J)(i) , struck out par. (3) which made reference to paragraph (5) of subsection (b).\nSubsec. (k).  Pub. L. 96–222, §\u202f101(a)(10)(A) , (F), (G), substituted in par. (1) “(5), and (6)” for “and (5)” and in par. (3)(D) “If the employer does not maintain an integrated plan at any time during the taxable year, taxes paid” for “Taxes paid”, inserted in par. (2) provisions requiring that for purposes of this paragraph there be excluded from consideration employees described in subparagraph (A) or (C) of section 410(b)(2) and pars. (3)(E) and (6), and redesignated former par. (6) as (7).\nSubsec. (k)(2), (3)(B)(i).  Pub. L. 96–605, §\u202f225(b)(3) , (4), substituted “section 410(b)(3)” for “section 410(b)(2)”.\n1978—Subsec. (a)(1).  Pub. L. 95–600, §\u202f156(c)(3) , inserted reference to section 403(b)(8).\nSubsec. (b)(2).  Pub. L. 95–600, §\u202f157(d)(1) , (e)(1)(A), designated existing provisions as subpars. (B) and (C) and added subpar. (A), and in subpar. (B) as so designated, inserted “on behalf of any individual” after “annual premium”, respectively.\nSubsec. (d)(3)(A)(iii).  Pub. L. 95–600, §\u202f156(c)(1) , added cl. (iii).\nSubsec. (d)(3)(B).  Pub. L. 95–600, §\u202f157(g)(3) , (h)(2), inserted provision relating to the applicability of clause (ii) of subparagraph (A) to any amount paid or distributed out of an individual retirement account or annuity to which an amount was contributed which was treated as a rollover contribution by section 402(a)(7) and substituted “1-year period” for “3-year period”.\nSubsec. (d)(4).  Pub. L. 95–600, §\u202f703(c)(4) , amended  Pub. L. 94–455, §\u202f1501(b)(5) . See 1976 Amendment note below.\nSubsec. (d)(5), (6).  Pub. L. 95–600, §\u202f157(c)(1) , added par. (5) and redesignated former par. (5) as (6).\nSubsecs. (j) to (m).  Pub. L. 95–600, §\u202f152(a) , added subsecs. (j) to ( l ) and redesignated former subsec. (j) as (m).\n1976—Subsecs. (a)(2), (6), (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1501(b)(2) , substituted “member (or spouse of an employee or member)” for “member”.\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f1501(b)(10) , substituted “Notwithstanding any other provision of this title (including chapters 11 and 12), the basis” for “The basis”.\nSubsec. (d)(4).  Pub. L. 94–455, §\u202f1501(b)(5) , as amended by  Pub. L. 95–600, §\u202f703(c)(4) , inserted reference to section 220 and substituted “In the case of such a distribution, for purposes of section 61, any net income described in subparagraph (C) shall be deemed to have been earned and receivable in the taxable year in which such excess contribution is made” for “Any net income described in subparagraph (C) shall be included in the gross income of the individual for the taxable year in which received”.\nSubsecs. (h), (i).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  section 107(d) of Pub. L. 117–328  applicable to distributions required to be made after  Dec. 31, 2022 , with respect to individuals who attain age 72 after such date, see  section 107(e) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by  section 110(d) of Pub. L. 117–328  applicable to contributions made for plan years beginning after  Dec. 31, 2023 , see  section 110(h) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by section 116(a), (b)(1) of  Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2023 , see  section 116(c) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by section 117(a), (c)–(f) of  Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2023 , see  section 117(h) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title III, §\u202f307(c) ,  Dec. 29, 2022 ,  136 Stat. 5345 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 117–328, div. T, title III, §\u202f322(b) ,  Dec. 29, 2022 ,  136 Stat. 5356 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ]. \n \n “(2)   No inference .— Nothing in the amendments made by this section shall be construed to infer the proper treatment under the Internal Revenue Code of 1986 of individual retirement plans as 1 contract in the case of any other provision of such Code to which the amendments made by this section do not apply.”\nAmendment by section 332(a), (b)(2) of  Pub. L. 117–328  applicable to plan years beginning after  Dec. 31, 2023 , see  section 332(c) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nAmendment by  section 401(b)(4) of Pub. L. 117–328  effective as if included in the section of div. O of  Pub. L. 116–94  to which the amendment relates, see  section 401(c) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nAmendment by section 601(b)(3), (c)(1) of  Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 601(e) of Pub. L. 117–328 , set out as a note under  section 402 of this title .\nPub. L. 116–94, div. O, title I, §\u202f101(e) ,  Dec. 20, 2019 ,  133 Stat. 3145 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section,  section 413 of this title , and sections 1002, 1023, 1024, and 1112 of Title 29, Labor] shall apply to plan years beginning after  December 31, 2020 . \n \n “(2)   Rule of construction .— Nothing in the amendments made by subsection (a) [amending this section and  section 413 of this title ] shall be construed as limiting the authority of the Secretary of the Treasury or the Secretary’s delegate (determined without regard to such amendment) to provide for the proper treatment of a failure to meet any requirement applicable under the Internal Revenue Code of 1986 with respect to one employer (and its employees) in a multiple employer plan.”\nAmendment by  section 107(b) of Pub. L. 116–94  applicable to distributions made for taxable years beginning after  Dec. 31, 2019 , see  section 107(d)(2) of Pub. L. 116–94 , set out in a note under  section 219 of this title .\nAmendment by  section 114(c) of Pub. L. 116–94  applicable to distributions required to be made after  Dec. 31, 2019 , with respect to individuals who attain age 70½ after such date, see  section 114(d) of Pub. L. 116–94 , set out as a note under  section 401 of this title .\nPub. L. 116–94, div. O, title I, §\u202f116(a)(2) ,  Dec. 20, 2019 ,  133 Stat. 3161 , provided that:  “The amendments made by this subsection [amending this section] shall apply to contributions after the date of the enactment of this Act [ Dec. 20, 2019 ].”\nAmendment by  Pub. L. 115–97  applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as a note under  section 61 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f112(b) ,  Dec. 18, 2015 ,  129 Stat. 3047 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title III, §\u202f306(b) ,  Dec. 18, 2015 ,  129 Stat. 3089 , provided that:  “The amendments made by this section [amending this section] shall apply to contributions made after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 113–295, div. A, title I, §\u202f108(b) ,  Dec. 19, 2014 ,  128 Stat. 4014 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 2013 .”\nAmendment by  section 221(a)(53) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title II, §\u202f208(b) ,  Jan. 2, 2013 ,  126 Stat. 2324 , provided that: \n “(1)   Effective date .— The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 2011 . \n \n “(2)   Special rules .— For purposes of subsections (a)(6), (b)(3), and (d)(8) of section 408 of the Internal Revenue Code of 1986, at the election of the taxpayer (at such time and in such manner as prescribed by the Secretary of the Treasury)— “(A)  any qualified charitable distribution made after  December 31, 2012 , and before  February 1, 2013 , shall be deemed to have been made on  December 31, 2012 , and \n \n “(B)  any portion of a distribution from an individual retirement account to the taxpayer after  November 30, 2012 , and before  January 1, 2013 , may be treated as a qualified charitable distribution to the extent that— “(i)  such portion is transferred in cash after the distribution to an organization described in section 408(d)(8)(B)(i) before  February 1, 2013 , and \n \n “(ii)  such portion is part of a distribution that would meet the requirements of section 408(d)(8) but for the fact that the distribution was not transferred directly to an organization described in section 408(d)(8)(B)(i).”\nPub. L. 111–312, title VII, §\u202f725(b) ,  Dec. 17, 2010 ,  124 Stat. 3316 , provided that: \n “(1)   Effective date .— The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 2009 . \n \n “(2)   Special rule .— For purposes of subsections (a)(6), (b)(3), and (d)(8) of section 408 of the Internal Revenue Code of 1986, at the election of the taxpayer (at such time and in such manner as prescribed by the Secretary of the Treasury) any qualified charitable distribution made after  December 31, 2010 , and before  February 1, 2011 , shall be deemed to have been made on  December 31, 2010 .”\nPub. L. 110–343, div. C, title II, §\u202f205(b) ,  Oct. 3, 2008 ,  122 Stat. 3865 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 2007 .”\nAmendment by  Pub. L. 110–172  effective as if included in the provisions of the Pension Protection Act of 2006,  Pub. L. 109–280 , to which such amendment relates, see  section 3(j) of Pub. L. 110–172 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 109–432  applicable to taxable years beginning after  Dec. 31, 2006 , see  section 307(c) of Pub. L. 109–432 , set out as a note under  section 223 of this title .\nPub. L. 109–280, title XII, §\u202f1201(c)(1) ,  Aug. 17, 2006 ,  120 Stat. 1066 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 2005 .”\nAmendment by  section 404(d) of Pub. L. 108–311  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 404(f) of Pub. L. 108–311 , set out as a note under  section 45A of this title .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  section 601(b) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 601(c) of Pub. L. 107–16 , set out as a note under  section 219 of this title .\nPub. L. 107–16, title VI, §\u202f602(c) ,  June 7, 2001 ,  115 Stat. 96 , provided that:  “The amendments made by this section [amending this section and  section 1003 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2002 .”\nAmendment by section 611(c)(1), (f)(1), (2), (g)(2) of  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nAmendment by  section 641(e)(8) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nPub. L. 107–16, title VI, §\u202f642(c) ,  June 7, 2001 ,  115 Stat. 122 , provided that: \n “(1)   Effective date .— The amendments made by this section [amending this section and  section 403 of this title ] shall apply to distributions after  December 31, 2001 . \n \n “(2)   Special rule .— Notwithstanding any other provision of law, subsections (h)(3) and (h)(5) of section 1122 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , set out as a note under  section 402 of this title ] shall not apply to any distribution from an eligible retirement plan (as defined in clause (iii) or (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 1986) on behalf of an individual if there was a rollover to such plan on behalf of such individual which is permitted solely by reason of the amendments made by this section.”\nAmendment by  section 643(c) of Pub. L. 107–16  applicable to distributions made after  Dec. 31, 2001 , see  section 643(d) of Pub. L. 107–16 , set out as a note under  section 401 of this title .\nAmendment by  section 644(b) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 644(c) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nAmendment by  section 6018(b) of Pub. L. 105–206  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see  section 6018(h) of Pub. L. 105–206 , set out as a note under  section 23 of this title .\nAmendment by sections 6015(a) and 6016(a)(1) of  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 302(d) of Pub. L. 105–34  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 302(f) of Pub. L. 105–34 , set out as a note under  section 219 of this title .\nPub. L. 105–34, title III, §\u202f304(b) ,  Aug. 5, 1997 ,  111 Stat. 831 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title XV, §\u202f1501(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 1058 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to years beginning after  December 31, 1996 .”\nAmendment by section 1601(d)(1)(A)–(C)(i), (D)–(G) of  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by section 1421(a), (b)(3)(B), (5), (6), (c) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nAmendment by  section 1427(b)(3) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1427(c) of Pub. L. 104–188 , set out as a note under  section 219 of this title .\nAmendment by  section 1431(c)(1)(B) of Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , except that in determining whether an employee is a highly compensated employee for years beginning in 1997, such amendment to be treated as having been in effect for years beginning in 1996, see  section 1431(d)(1) of Pub. L. 104–188 , set out as a note under  section 414 of this title .\nPub. L. 104–188, title I, §\u202f1455(e) ,  Aug. 20, 1996 ,  110 Stat. 1818 , provided that:  “The amendments made by this section [amending this section and sections 6047, 6652, 6693, and 6724 of this title] shall apply to returns, reports, and other statements the due date for which (determined without regard to extensions) is after  December 31, 1996 .”\nAmendment by  Pub. L. 103–465  applicable to years beginning after  Dec. 31, 1994 , and, to the extent of providing for the rounding of indexed amounts, not applicable to any year to the extent the rounding would require the indexed amount to be reduced below the amount in effect for years beginning in 1994, see  section 732(e) of Pub. L. 103–465 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, to benefits accruing in plan years beginning after  Dec. 31, 1993 , see  section 13212(d) of Pub. L. 103–66 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 7811(m)(7) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 101–239, title VII, §\u202f7841(a)(3) ,  Dec. 19, 1989 ,  103 Stat. 2428 , provided that:  “The amendments made by this subsection [amending this section and  section 414 of this title ] shall apply to transfers after the date of the enactment of this Act [ Dec. 19, 1989 ] in taxable years ending after such date.”\nAmendment by  section 1011(c)(7)(C) of Pub. L. 100–647  applicable to plan years beginning after  Dec. 31, 1987 , with exception in case of a plan described in  section 1105(c)(2) of Pub. L. 99–514 , see  section 1011(c)(7)(E) of Pub. L. 100–647 , set out as a note under  section 401 of this title .\nPub. L. 100–647, title I, §\u202f1011A(a)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3472 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to rollover contributions made in taxable years beginning after  December 31, 1986 .”\nAmendment by sections 1011(b)(1)–(3), (f)(1)–(5), (10), (i)(5) and 1018(t)(3)(D) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6057(b) ,  Nov. 10, 1988 ,  102 Stat. 3698 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to acquisitions after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by section 1102(a), (b)(2), (c), (e)(2) of  Pub. L. 99–514  applicable to contributions and distributions for taxable years beginning after  Dec. 31, 1986 , see  section 1102(g) of Pub. L. 99–514 , set out as a note under  section 219 of this title .\nAmendment by section 1108(a), (d)–(g)(1), (4), (6) of  Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , except that section 408(k)(3)(D) and (E) of the Internal Revenue Code of 1954 (as in effect before the amendments made by  section 1108 of Pub. L. 99–514 ) shall continue to apply for years beginning after  Dec. 31, 1986 , and before  Jan. 1, 1989 , except that employer contributions under an arrangement under section 408(k)(6) of the Internal Revenue Code of 1986 (as added by  section 1108 of Pub. L. 99–514 ) may not be integrated under section 408(k)(3)(D) and (E) of the Internal Revenue Code of 1954, see  section 1108(h) of Pub. L. 99–514 , as amended, set out as a note under  section 219 of this title .\nAmendment by  section 1121(c)(2) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , with special provisions for plans maintained pursuant to collective bargaining agreements ratified before  Mar. 1, 1986 , and transition rules, see  section 1121(d) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 1122(e)(2)(B) of Pub. L. 99–514  applicable, except as otherwise provided, to amounts distributed after  Dec. 31, 1986 , in taxable years ending after such date, see  section 1122(h) of Pub. L. 99–514 , set out as a note under  section 402 of this title .\nAmendment by  section 1123(d)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1123(e) of Pub. L. 99–514 , set out as a note under  section 72 of this title .\nPub. L. 99–514, title XI, §\u202f1144(b) ,  Oct. 22, 1986 ,  100 Stat. 2490 , provided that:  “The amendment made by this section [amending this section] shall apply to acquisitions after  December 31, 1986 .”\nAmendment by sections 1852(a)(1), (5)(C), (7)(A) and 1875(c)(8) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 1875(c)(6)(A) of Pub. L. 99–514  effective as if included in the amendments made by  section 238 of Pub. L. 97–248 , see  section 1875(c)(12) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nPub. L. 99–514, title XVIII, §\u202f1898(a)(5) ,  Oct. 22, 1986 ,  100 Stat. 2944 , provided that the amendment made by that section is effective with respect to plan years beginning after  Oct. 22, 1986 .\nAmendment by  section 147(a) of Pub. L. 98–369  applicable to contributions made after  Dec. 31, 1984 , see  section 147(d)(1) of Pub. L. 98–369 , set out as a note under  section 219 of this title .\nAmendment by section 491(d)(19)–(24) of  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  section 521(b) of Pub. L. 98–369  applicable to years beginning after  Dec. 31, 1984 , see  section 521(e) of Pub. L. 98–369 , set out as a note under  section 401 of this title .\nAmendment by  section 522(d)(12) of Pub. L. 98–369  applicable to distributions made after  July 18, 1984 , in taxable years ending after that date, see  section 522(e) of Pub. L. 98–369 , set out as a note under  section 402 of this title .\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by sections 237 and 238 of  Pub. L. 97–248  applicable to years beginning after  Dec. 31, 1983 , see  section 241 of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title .\nPub. L. 97–248, title II, §\u202f243(c) ,  Sept. 3, 1982 ,  96 Stat. 523 , as amended by  Pub. L. 98–369, div. A, title VII, §\u202f713(g)(1) ,  July 18, 1984 ,  98 Stat. 960 , provided that:  “The amendments made by this section [amending this section and sections 219 and 409 of this title] shall apply with respect to individuals dying after  December 31, 1983 .”\nPub. L. 97–248, title III, §\u202f335(b) ,  Sept. 3, 1982 ,  96 Stat. 628 , provided that:  “The amendments made by subsection (a) [amending this section and  section 409 of this title ] shall apply to distributions made after  December 31, 1982 , in taxable years ending after such date.”\nAmendment by section 311(g)(1)(A)–(C), (2), (h)(2) of  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 311(i) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nAmendment by section 312(b)(2), (c)(5) of  Pub. L. 97–34  applicable to plans which include employees within the meaning of section 401(c)(1) with respect to taxable years beginning after  Dec. 31, 1981 , see  section 312(f) of Pub. L. 97–34 , set out as a note under  section 72 of this title .\nAmendment by  section 313(b)(2) of Pub. L. 97–34  applicable to redemptions after  Aug. 13, 1981 , in taxable years ending after such date, see  section 313(c) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nPub. L. 97–34, title III, §\u202f314(b)(2) ,  Aug. 13, 1981 ,  95 Stat. 286 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to property acquired after  December 31, 1981 , in taxable years ending after such date.”\nAmendment by  Pub. L. 96–605  applicable with respect to plan years beginning after  Dec. 31, 1980 , see  section 225(c) of Pub. L. 96–605 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f152(h) ,  Nov. 6, 1978 ,  92 Stat. 2800 , provided that:  “The amendments made by this section [amending this section and sections 219, 401, 404, 414, and 415 of this title] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by section 156(c)(1), (3) of  Pub. L. 95–600  applicable to distributions or transfers made after  Dec. 31, 1977 , in taxable years beginning after such date, see  section 156(d) of Pub. L. 95–600 , set out as a note under  section 403 of this title .\nPub. L. 95–600, title I, §\u202f157(c)(2)(A) ,  Nov. 6, 1978 ,  92 Stat. 2805 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply to distributions in taxable years beginning after  December 31, 1975 .”\nPub. L. 95–600, title I, §\u202f157(d)(2) ,  Nov. 6, 1978 ,  92 Stat. 2806 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to contracts issued after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nAmendment by  section 157(h)(2) of Pub. L. 95–600  applicable to payments made in taxable years beginning after  Dec. 31, 1977 , see  section 157(h)(3)(A) of Pub. L. 95–600 , set out as a note under  section 402 of this title .\nPub. L. 95–600, title I, §\u202f157(e)(2) ,  Nov. 6, 1978 ,  92 Stat. 2806 , provided that:  “The amendments made by paragraph (1) [amending this section and  section 409 of this title ] shall apply to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 157(g)(3) of Pub. L. 95–600  applicable to lump-sum distributions completed after  Dec. 31, 1978 , in taxable years ending after such date, see  section 157(g)(4) of Pub. L. 95–600 , set out as a note under  section 402 of this title .\nAmendment by  section 703(c)(4) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 703(c)(5) of Pub. L. 95–600 , set out as a note under  section 219 of this title .\nAmendment by section 1501(b)(2), (5), (10) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1501(d) of Pub. L. 94–455 , set out as a note under  section 62 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1974 , see  section 2002(i)(1) of Pub. L. 93–406 , set out as a note under  section 219 of this title .\nPub. L. 117–328, div. T, title III, §\u202f324 ,  Dec. 29, 2022 ,  136 Stat. 5358 , provided that: \n “(a)   In General .— Not later than  January 1, 2025 , the Secretary of the Treasury or the Secretary’s delegate shall, to simplify, standardize, facilitate, and expedite the completion of rollovers to eligible retirement plans (as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986) and trustee-to-trustee transfers from individual retirement plans (as defined in section 7701(a)(37) of such Code), develop and issue— “(1)  guidance in the form of sample forms (including relevant procedures and protocols) for rollovers of eligible rollover distributions from a retirement to an eligible retirement plan which— “(A)  are written in a manner calculated to be understood by the average person, and \n \n “(B)  can be used by both distributing eligible retirement plans and receiving retirement plans, and \n \n \n “(2)  guidance in the form of sample forms (including relevant procedures and protocols) for trustee-to-trustee transfers of amounts from an individual retirement plan to another individual retirement plan which— “(A)  are written in a manner calculated to be understood by the average person, and \n \n “(B)  can be used by both transferring individual retirement plans and individual retirement plans receiving the transfer. \n \n \n \n “(b)   Other Requirements .— In developing the sample forms under subsection (a), the Secretary (or Secretary’s delegate) shall obtain relevant information from participants and plan sponsor representatives and consider potential coordination with sections 319 and 336 of this Act [div. T of  Pub. L. 117–328 ;  136 Stat. 5353 , 5373].”\nPub. L. 112–95, title XI, §\u202f1106 ,  Feb. 14, 2012 ,  126 Stat. 152 , as amended by  Pub. L. 113–243, §\u202f1 ,  Dec. 18, 2014 ,  128 Stat. 2863 ;  Pub. L. 114–113, div. Q, title III, §\u202f307(a) ,  Dec. 18, 2015 ,  129 Stat. 3089 , provided that: \n “(a)   General Rules.— “(1)   Rollover of airline payment amount .— If a qualified airline employee receives any airline payment amount and transfers any portion of such amount to a traditional IRA within 180 days of receipt of such amount (or, if later, within 180 days of the date of the enactment of this Act [ Feb. 14, 2012 ]), then such amount (to the extent so transferred) shall be treated as a rollover contribution described in section 402(c) of the Internal Revenue Code of 1986. A qualified airline employee making such a transfer may exclude from gross income the amount transferred, in the taxable year in which the airline payment amount was paid to the qualified airline employee by the commercial passenger airline carrier. \n \n “(2)   Transfer of amounts attributable to airline payment amount following rollover to roth ira .— A qualified airline employee who has contributed an airline payment amount to a Roth IRA that is treated as a qualified rollover contribution pursuant to section 125 of the Worker, Retiree, and Employer Recovery Act of 2008 [ Pub. L. 110–458 ,  26 U.S.C. 408A  note], may transfer to a traditional IRA, in a trustee-to-trustee transfer, all or any part of the contribution (together with any net income allocable to such contribution), and the transfer to the traditional IRA will be deemed to have been made at the time of the rollover to the Roth IRA, if such transfer is made within 180 days of the date of the enactment of this Act. A qualified airline employee making such a transfer may exclude from gross income the airline payment amount previously rolled over to the Roth IRA, to the extent an amount attributable to the previous rollover was transferred to a traditional IRA, in the taxable year in which the airline payment amount was paid to the qualified airline employee by the commercial passenger airline carrier. No amount so transferred to a traditional IRA may be treated as a qualified rollover contribution with respect to a Roth IRA within the 5-taxable year period beginning with the taxable year in which such transfer was made. \n \n “(3)   Extension of time to file claim for refund .— A qualified airline employee who excludes an amount from gross income in a prior taxable year under paragraph (1) or (2) may reflect such exclusion in a claim for refund filed within the period of limitation under section 6511(a) of such Code (or, if later,  April 15, 2015 ). \n \n “(4)   Overall limitation on amounts transferred to traditional iras.— “(A)   In general .— The aggregate amount of airline payment amounts which may be transferred to 1 or more traditional IRAs under paragraphs (1) and (2) with respect to any qualified employee for any taxable year shall not exceed the excess (if any) of— “(i)  90 percent of the aggregate airline payment amounts received by the qualified airline employee during the taxable year and all preceding taxable years, over \n \n “(ii)  the aggregate amount of such transfers to which paragraphs (1) and (2) applied for all preceding taxable years. \n \n \n “(B)   Special rules .— For purposes of applying the limitation under subparagraph (A)— “(i)  any airline payment amount received by the surviving spouse of any qualified employee, and any amount transferred to a traditional IRA by such spouse under subsection (d), shall be treated as an amount received or transferred by the qualified employee, and \n \n “(ii)  any amount transferred to a traditional IRA which is attributable to net income described in paragraph (2) shall not be taken into account. \n \n \n \n “(5)   Covered executives not eligible to make transfers .— Paragraphs (1) and (2) shall not apply to any transfer by a qualified airline employee (or any transfer authorized under subsection (d) by a surviving spouse of the qualified airline employee) if at any time during the taxable year of the transfer or any preceding taxable year the qualified airline employee held a position described in subparagraph (A) or (B) of section 162(m)(3) [probably means section 162(m)(3) of the Internal Revenue Code of 1986] with the commercial passenger airline carrier from whom the airline payment amount was received. \n \n “(6)   Special rule for certain airline payment amounts .— In the case of any amount which became an airline payment amount by reason of the amendments made by  section 1(b) of Public Law 113–243  ( 26 U.S.C. 408  note), paragraph (1) shall be applied by substituting ‘(or, if later, within the period beginning on  December 18, 2014 , and ending on the date which is 180 days after the date of enactment of the Protecting Americans from Tax Hikes Act of 2015 [ Dec. 18, 2015 ])’ for ‘(or, if later, within 180 days of the date of the enactment of this Act [ Feb. 14, 2012 ])’. \n \n \n “(b)   Treatment of Airline Payment Amounts and Transfers for Employment Taxes .— For purposes of chapter 21 of the Internal Revenue Code of 1986 and section 209 of the Social Security Act [ 42 U.S.C. 409 ], an airline payment amount shall not fail to be treated as a payment of wages by the commercial passenger airline carrier to the qualified airline employee in the taxable year of payment because such amount is excluded from the qualified airline employee’s gross income under subsection (a). \n \n “(c)   Definitions and Special Rules .— For purposes of this section— “(1)   Airline payment amount.— “(A)   In general .— The term ‘airline payment amount’ means any payment of any money or other property which is payable by a commercial passenger airline carrier to a qualified airline employee— “(i)  under the approval of an order of a Federal bankruptcy court in a case filed after  September 11, 2001 , and before  January 1, 2007 , or filed on  November 29, 2011 , and \n \n “(ii)  in respect of the qualified airline employee’s interest in a bankruptcy claim against the carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. \n \n\n \u2001\u2001The amount of such payment shall be determined without regard to any requirement to deduct and withhold tax from such payment under sections 3102(a) of the Internal Revenue Code of 1986 and 3402(a) of such Code. \n \n “(B)   Exception .— An airline payment amount shall not include any amount payable on the basis of the carrier’s future earnings or profits. \n \n \n “(2)   Qualified airline employee .— The term ‘qualified airline employee’ means an employee or former employee of a commercial passenger airline carrier who was a participant in a defined benefit plan maintained by the carrier which— “(A)  is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code, and \n \n “(B)  was terminated, became subject to the restrictions contained in paragraphs (2) and (3) of section 402(b) of the Pension Protection Act of 2006 [ Pub. L. 109–280 ,  26 U.S.C. 430  note], or was frozen effective  November 1, 2012 . \n \n \n “(3)   Traditional ira .— The term ‘traditional IRA’ means an individual retirement plan (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986) which is not a Roth IRA. \n \n “(4)   Roth ira .— The term ‘Roth IRA’ has the meaning given such term by section 408A(b) of such Code. \n \n \n “(d)   Surviving Spouse .— If a qualified airline employee died after receiving an airline payment amount, or if an airline payment amount was paid to the surviving spouse of a qualified airline employee in respect of the qualified airline employee, the surviving spouse of the qualified airline employee may take all actions permitted under section 125 of the Worker, Retiree and Employer Recovery Act of 2008 [ Pub. L. 110–458 ,  26 U.S.C. 408A  note], or under this section, to the same extent that the qualified airline employee could have done had the qualified airline employee survived. \n \n “(e)   Effective Date .— This section shall apply to transfers made after the date of the enactment of this Act [ Feb. 14, 2012 ] with respect to airline payment amounts paid before, on, or after such date.”\n[ Pub. L. 114–113, div. Q, title III, §\u202f307(b) ,  Dec. 18, 2015 ,  129 Stat. 3089 , provided that:  “The amendment made by this section [amending  section 1106 of Pub. L. 112–95 , set out above] shall take effect as if included in  Public Law 113–243  ( 26 U.S.C. 408  note).” \n]\nPub. L. 109–280, title VIII, §\u202f830 ,  Aug. 17, 2006 ,  120 Stat. 1002 , provided that: \n “(a)   In General .— The Secretary of the Treasury (or the Secretary’s delegate) shall make available a form (or modify existing forms) for use by individuals to direct that a portion of any refund of overpayment of tax imposed by chapter 1 of the Internal Revenue Code of 1986 be paid directly to an individual retirement plan (as defined in section 7701(a)(37) of such Code) of such individual. \n \n “(b)   Effective Date .— The form required by subsection (a) shall be made available for taxable years beginning after  December 31, 2006 .”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 95–600, title I, §\u202f157(c)(2)(B) ,  Nov. 6, 1978 ,  92 Stat. 2805 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of contributions for taxable years beginning before  January 1, 1978 , paragraph (5) of section 408(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied as if such paragraph did not contain any dollar limitation.”\nPub. L. 95–600, title I, §\u202f157(d)(3) ,  Nov. 6, 1978 ,  92 Stat. 2806 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of any annuity or endowment contract issued on or before the date of the enactment of this Act [ Nov. 6, 1978 ] which would be an individual retirement annuity within the meaning of section 408(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by paragraph (1) [amending subsec. (b)(2) of this section]) but for the fact that the premiums under the contract are fixed, at the election of the taxpayer an exchange before  January 1, 1981 , of that contract for an individual retirement annuity within the meaning of such section 408(b) (as amended by paragraph (1)) shall be treated as a nontaxable exchange which does not constitute a distribution.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Except as provided in this section, a Roth IRA shall be treated for purposes of this title in the same manner as an individual retirement plan.\nFor purposes of this title, the term “Roth IRA” means an individual retirement plan (as defined in section 7701(a)(37)) which is designated (in such manner as the Secretary may prescribe) at the time of establishment of the plan as a Roth IRA. Such designation shall be made in such manner as the Secretary may prescribe.\nNo deduction shall be allowed under section 219 for a contribution to a Roth IRA.\nSection 219(g)(4) shall apply for purposes of this paragraph.\nNo rollover contribution may be made to a Roth IRA unless it is a qualified rollover contribution.\nA qualified rollover contribution shall not be taken into account for purposes of paragraph (2).\nClause (i) shall not apply to any qualified rollover contribution described in subsection (e)(1)(C).\nFor purposes of this section, the rule of section 219(f)(3) shall apply.\nAny qualified distribution from a Roth IRA shall not be includible in gross income.\nA payment or distribution from a Roth IRA shall not be treated as a qualified distribution under subparagraph (A) if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individual’s spouse, or employer in the case of a simple retirement account (as defined in section 408(p)) or simplified employee pension (as defined in section 408(k)), made a contribution to a Roth IRA) established for such individual.\nThe term “qualified distribution” shall not include any distribution of any contribution described in section 408(d)(4) and any net income allocable to the contribution.\nThis paragraph shall apply to a distribution from an eligible retirement plan (as defined by section 402(c)(8)(B)) maintained for the benefit of an individual which is contributed to a Roth IRA maintained for the benefit of such individual in a qualified rollover contribution. This paragraph shall not apply to a distribution which is a qualified rollover contribution from a Roth IRA or a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A).\nThe conversion of an individual retirement plan (other than a Roth IRA) to a Roth IRA shall be treated for purposes of this paragraph as a distribution to which this paragraph applies.\nTrustees of Roth IRAs, trustees of individual retirement plans, persons subject to section 6047(d)(1), or all of the foregoing persons, whichever is appropriate, shall include such additional information in reports required under section 408(i) or 6047 as the Secretary may require to ensure that amounts required to be included in gross income under subparagraph (A) are so included.\nThe amount otherwise required to be included in gross income for any taxable year beginning in 2010 or the first taxable year in the 2-year period under subparagraph (A)(iii) shall be increased by the aggregate distributions from Roth IRAs for such taxable year which are allocable under paragraph (4) to the portion of such qualified rollover contribution required to be included in gross income under subparagraph (A)(i).\nThe amount required to be included in gross income for any taxable year under subparagraph (A)(iii) shall not exceed the aggregate amount required to be included in gross income under subparagraph (A)(iii) for all taxable years in the 2-year period (without regard to subclause (I)) reduced by amounts included for all preceding taxable years.\nIf the individual required to include amounts in gross income under such subparagraph dies before all of such amounts are included, all remaining amounts shall be included in gross income for the taxable year which includes the date of death.\nIf the spouse of the individual described in subclause (I) acquires the individual’s entire interest in any Roth IRA to which such qualified rollover contribution is properly allocable, the spouse may elect to treat the remaining amounts described in subclause (I) as includible in the spouse’s gross income in the taxable years of the spouse ending with or within the taxable years of such individual in which such amounts would otherwise have been includible. Any such election may not be made or changed after the due date for the spouse’s taxable year which includes the date of death.\nClause (i) shall apply only to the extent of the amount of the qualified rollover contribution includible in gross income under subparagraph (A)(i).\nSection 408(d)(2) shall be applied separately with respect to Roth IRAs and other individual retirement plans.\nFor purposes of this section, the term “qualified special purpose distribution” means any distribution to which subparagraph (F) of section 72(t)(2) applies.\nExcept as provided by the Secretary, if, on or before the due date for any taxable year, a taxpayer transfers in a trustee-to-trustee transfer any contribution to an individual retirement plan made during such taxable year from such plan to any other individual retirement plan, then, for purposes of this chapter, such contribution shall be treated as having been made to the transferee plan (and not the transferor plan).\nSubparagraph (A) shall not apply to the transfer of any contribution unless such transfer is accompanied by any net income allocable to such contribution.\nSubparagraph (A) shall apply to the transfer of any contribution only to the extent no deduction was allowed with respect to the contribution to the transferor plan.\nSubparagraph (A) shall not apply in the case of a qualified rollover contribution to which subsection (d)(3) applies (including by reason of subparagraph (C) thereof).\nFor purposes of this subsection, the due date for any taxable year is the date prescribed by law (including extensions of time) for filing the taxpayer’s return for such taxable year.\nFor purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA. The earnings and contributions of any qualified tuition program from which a qualified rollover contribution is made under subparagraph (C) shall be treated in the same manner as the earnings and contributions of a Roth IRA from which a qualified rollover contribution is made under subparagraph (A).\nSection 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by subparagraph (A).\nFor purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.\nIn the case of any payment or distribution out of a simple retirement account (as defined in section 408(p)) with respect to which an election has been made under section 408(p)(12) and to which 72(t)(6) applies, the term “qualified rollover contribution” shall not include any payment or distribution paid into an account other than another simple retirement account (as so defined).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title  and Internal Revenue Notices listed in a table under  section 401 of this title .\n2022—Subsec. (c)(2)(A).  Pub. L. 117–328, §\u202f401(b)(5) , struck out “(d)(1) or” before “(g) of such section”.\nSubsec. (c)(3)(E).  Pub. L. 117–328, §\u202f126(b)(2)(B) , added subpar. (E).\nSubsec. (c)(5)(B).  Pub. L. 117–328, §\u202f126(b)(2)(A) , designated existing provisions as cl. (i), inserted heading, and added cl. (ii).\nSubsec. (d)(2)(B).  Pub. L. 117–328, §\u202f601(d) , inserted “,\u2000or employer in the case of a simple retirement account (as defined in section 408(p)) or simplified employee pension (as defined in section 408(k)),” after “individual’s spouse”.\nSubsec. (e)(1).  Pub. L. 117–328, §\u202f126(b)(1)(C) , inserted at end of concluding provisions “The earnings and contributions of any qualified tuition program from which a qualified rollover contribution is made under subparagraph (C) shall be treated in the same manner as the earnings and contributions of a Roth IRA from which a qualified rollover contribution is made under subparagraph (A).”\nSubsec. (e)(1)(C).  Pub. L. 117–328, §\u202f126(b)(1)(A) , (B), added subpar. (C).\nSubsec. (e)(3).  Pub. L. 117–328, §\u202f601(c)(2) , added par. (3).\nSubsec. (f).  Pub. L. 117–328, §\u202f601(a) , struck out subsec. (f). Text read as follows: “For purposes of this section—\n“(1) a simplified employee pension or a simple retirement account may not be designated as a Roth IRA; and\n“(2) contributions to any such pension or account shall not be taken into account for purposes of subsection (c)(2)(B).”\n2019—Subsec. (c)(4) to (7).  Pub. L. 116–94  redesignated pars. (5) to (7) as (4) to (6), respectively, and struck out former par. (4). Prior to amendment, text of par. (4) read as follows: “Contributions to a Roth IRA may be made even after the individual for whom the account is maintained has attained age 70½.”\n2018—Subsec. (d)(3)(B).  Pub. L. 115–141, §\u202f401(a)(77) , inserted period at end.\nSubsec. (e)(2)(B).  Pub. L. 115–141, §\u202f401(a)(78) , substituted “subparagraph (A)” for “the subparagraph (A)”.\n2017—Subsec. (c)(3)(D)(ii).  Pub. L. 115–97, §\u202f11002(d)(1)(W) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (d)(6)(B)(iii).  Pub. L. 115–97, §\u202f13611(a) , added cl. (iii).\n2008—Subsec. (c)(3)(B).  Pub. L. 110–458, §\u202f108(d)(1) , in introductory provisions, struck out second “an” before “eligible” and “other than a Roth IRA” before “during any taxable year”, and inserted as concluding provisions “This subparagraph shall not apply to a qualified rollover contribution from a Roth IRA or to a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A).”\nSubsec. (c)(3)(C), (E).  Pub. L. 110–458, §\u202f108(h)(1) , redesignated subpar. (C) relating to inflation adjustment as subpar. (E).\nSubsec. (d)(3)(B).  Pub. L. 110–458, §\u202f108(d)(2) , struck out “(other than a Roth IRA)” after “section 402(c)(8)(B))” and inserted at end “This paragraph shall not apply to a distribution which is a qualified rollover contribution from a Roth IRA or a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A)”.\nSubsec. (e).  Pub. L. 110–245, §\u202f109(b) , amended subsec. (e), as in effect after amendment by  section 824(a) of Pub. L. 109–280 , by amending text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘qualified rollover contribution’ means a rollover contribution—\n“(1) to a Roth IRA from another such account,\n“(2) from an eligible retirement plan, but only if—\n“(A) in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and\n“(B) in the case of any eligible retirement plan (as defined in section 402(c)(8)(B) other than clauses (i) and (ii) thereof), such rollover contribution meets the requirements of section 402(c), 403(b)(8), or 457(e)(16), as applicable.\nFor purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.”\nPub. L. 110–245, §\u202f109(a) , amended subsec. (e), as in effect before amendment by  section 824(a) of Pub. L. 109–280 , by reenacting heading without change and amending text to read as follows: “For purposes of this section—\n“(1)  In general .—The term ‘qualified rollover contribution’ means a rollover contribution to a Roth IRA from another such account, or from an individual retirement plan, but only if such rollover contribution meets the requirements of section 408(d)(3). Such term includes a rollover contribution described in section 402A(c)(3)(A). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.\n“(2)  Military death gratuity.—\n“(A)  In general .—The term ‘qualified rollover contribution’ includes a contribution to a Roth IRA maintained for the benefit of an individual made before the end of the 1-year period beginning on the date on which such individual receives an amount under  section 1477 of title 10 , United States Code, or  section 1967 of title 38  of such Code, with respect to a person, to the extent that such contribution does not exceed—\n“(i) the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by\n“(ii) the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9).\n“(B)  Annual limit on number of rollovers not to apply .—Section 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by subparagraph (A).\n“(C)  Application of section  72.—For purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.” See 2006 Amendment note below.\n2006—Subsec. (c)(3)(B).  Pub. L. 109–222, §\u202f512(a)(1) , redesignated subpar. (C) as (B) and struck out former subpar. (B). Prior to amendment, text read as follows: “A taxpayer shall not be allowed to make a qualified rollover contribution to a Roth IRA from an individual retirement plan other than a Roth IRA during any taxable year if, for the taxable year of the distribution to which such contribution relates—\n“(i) the taxpayer’s adjusted gross income exceeds $100,000, or\n“(ii) the taxpayer is a married individual filing a separate return.\nThis subparagraph shall not apply to a qualified rollover contribution from a Roth IRA or to a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A).” See Effective Date of 2006 Amendment note below.\nPub. L. 109–280, §\u202f824(b)(1) , substituted “eligible retirement plan” for “IRA” in heading and “an eligible retirement plan (as defined by section 402(c)(8)(B))” for “individual retirement plan” in introductory provisions. See Effective Date of 2006 Amendment note below.\nSubsec. (c)(3)(B)(i).  Pub. L. 109–222, §\u202f512(a)(2) , substituted “except that any amount included in gross income under subsection (d)(3) shall not be taken into account, and” for “except that—\n“(I) any amount included in gross income under subsection (d)(3) shall not be taken into account; and\n“(II) any amount included in gross income by reason of a required distribution under a provision described in paragraph (5) shall not be taken into account for purposes of subparagraph (B)(i), and”.\nSubsec. (c)(3)(C).  Pub. L. 109–222, §\u202f512(a)(1) , redesignated subpar. (D), relating to marital status, as (C). Former subpar. (C) redesignated (B). See Effective Date of 2006 Amendment note below.\nPub. L. 109–280, §\u202f833(c) , added subpar. (C) relating to inflation adjustment.\nSubsec. (c)(3)(D), (E).  Pub. L. 110–458, §\u202f108(h)(2) , redesignated subpar. (E) as (D) and substituted “subparagraph (B)(ii)” for “subparagraph (C)(ii)”.\nSubsec. (d)(3).  Pub. L. 109–280, §\u202f824(b)(2)(E) , substituted “an eligible retirement plan” for “an IRA” in heading.\nSubsec. (d)(3)(A).  Pub. L. 109–280, §\u202f824(b)(2)(A) , substituted “sections 402(c), 403(b)(8), 408(d)(3), and 457(e)(16)” for “section 408(d)(3)” in introductory provisions.\nSubsec. (d)(3)(A)(iii).  Pub. L. 109–222, §\u202f512(b)(1) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “unless the taxpayer elects not to have this clause apply for any taxable year, any amount required to be included in gross income for such taxable year by reason of this paragraph for any distribution before  January 1, 1999 , shall be so included ratably over the 4-taxable year period beginning with such taxable year.”\nSubsec. (d)(3)(B).  Pub. L. 109–280, §\u202f824(b)(2)(B) , substituted “eligible retirement plan (as defined by section 402(c)(8)(B))” for “individual retirement plan”.\nSubsec. (d)(3)(D).  Pub. L. 109–280, §\u202f824(b)(2)(C) , (D), substituted “persons subject to section 6047(d)(1), or all of the foregoing persons” for “or both” and inserted “or 6047” after “408(i)”.\nSubsec. (d)(3)(E).  Pub. L. 109–222, §\u202f512(b)(2)(B) , substituted “2-year” for “4-year” in heading.\nSubsec. (d)(3)(E)(i).  Pub. L. 109–222, §\u202f512(b)(2)(A) , amended cl. (i) generally. Prior to amendment, text read as follows:\n“(I)  In general .—The amount required to be included in gross income for each of the first 3 taxable years in the 4-year period under subparagraph (A)(iii) shall be increased by the aggregate distributions from Roth IRAs for such taxable year which are allocable under paragraph (4) to the portion of such qualified rollover contribution required to be included in gross income under subparagraph (A)(i).\n“(II)  Limitation on aggregate amount included .—The amount required to be included in gross income for any taxable year under subparagraph (A)(iii) shall not exceed the aggregate amount required to be included in gross income under subparagraph (A)(iii) for all taxable years in the 4-year period (without regard to subclause (I)) reduced by amounts included for all preceding taxable years.”\nSubsec. (e).  Pub. L. 109–280, §\u202f824(a) , reenacted heading without change and amended text of subsec. (e) generally. Prior to amendments by  Pub. L. 109–280, §\u202f824(a) , and  Pub. L. 110–245, §\u202f109(a) , text read as follows: “For purposes of this section, the term ‘qualified rollover contribution’ means a rollover contribution to a Roth IRA from another such account, or from an individual retirement plan, but only if such rollover contribution meets the requirements of section 408(d)(3). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.” See 2008 Amendment note above.\n2001—Subsec. (e).  Pub. L. 107–16  inserted “Such term includes a rollover contribution described in section 402A(c)(3)(A).” after first sentence.\n1998—Subsec. (c)(3)(A).  Pub. L. 105–206, §\u202f6005(b)(1) , substituted “shall not exceed an amount equal to the amount determined under paragraph (2)(A) for such taxable year, reduced” for “shall be reduced” in introductory provisions.\nSubsec. (c)(3)(A)(ii).  Pub. L. 105–206, §\u202f6005(b)(2)(A) , inserted “or a married individual filing a separate return” after “joint return”.\nSubsec. (c)(3)(B).  Pub. L. 105–206, §\u202f6005(b)(2)(B)(i) , inserted “,\u2000for the taxable year of the distribution to which such contribution relates” after “if” in introductory provisions.\nSubsec. (c)(3)(B)(i).  Pub. L. 105–206, §\u202f6005(b)(2)(B)(ii) , struck out “for such taxable year” after “gross income”.\nSubsec. (c)(3)(C)(i).  Pub. L. 105–206, §\u202f7004(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “adjusted gross income shall be determined in the same manner as under section 219(g)(3), except that any amount included in gross income under subsection (d)(3) shall not be taken into account, and”.\nPub. L. 105–206, §\u202f6005(b)(2)(C) , struck out “and the deduction under section 219 shall be taken into account” after “taken into account”.\nSubsec. (c)(3)(C)(i)(II).  Pub. L. 105–277  substituted “,\u2000and” for period at end.\nSubsec. (d)(1).  Pub. L. 105–206, §\u202f6005(b)(5)(B) , substituted “Exclusion” for “General rules” in heading and amended text generally. Prior to amendment, text read as follows:\n“(A)  Exclusions from gross income .—Any qualified distribution from a Roth IRA shall not be includible in gross income.\n“(B)  Nonqualified distributions .—In applying section 72 to any distribution from a Roth IRA which is not a qualified distribution, such distribution shall be treated as made from contributions to the Roth IRA to the extent that such distribution, when added to all previous distributions from the Roth IRA, does not exceed the aggregate amount of contributions to the Roth IRA.”\nSubsec. (d)(2)(B).  Pub. L. 105–206, §\u202f6005(b)(3)(A) , added subpar. (B) and struck out heading and text of former subpar. (B). Text read as follows: “A payment or distribution shall not be treated as a qualified distribution under subparagraph (A) if—\n“(i) it is made within the 5-taxable year period beginning with the 1st taxable year for which the individual made a contribution to a Roth IRA (or such individual’s spouse made a contribution to a Roth IRA) established for such individual, or\n“(ii) in the case of a payment or distribution properly allocable (as determined in the manner prescribed by the Secretary) to a qualified rollover contribution from an individual retirement plan other than a Roth IRA (or income allocable thereto), it is made within the 5-taxable year period beginning with the taxable year in which the rollover contribution was made.”\nSubsec. (d)(2)(C).  Pub. L. 105–206, §\u202f6005(b)(3)(B) , added subpar. (C).\nSubsec. (d)(3)(A).  Pub. L. 105–206, §\u202f6005(b)(4)(A) , added cl. (iii) and concluding provisions and struck out former cl. (iii) which read as follows: “in the case of a distribution before  January 1, 1999 , any amount required to be included in gross income by reason of this paragraph shall be so included ratably over the 4-taxable year period beginning with the taxable year in which the payment or distribution is made.”\nSubsec. (d)(3)(D).  Pub. L. 105–206, §\u202f6005(b)(6)(B) , redesignated subpar. (E) as (D) and struck out heading and text of former subpar. (D). Text read as follows: “If, no later than the due date for filing the return of tax for any taxable year (without regard to extensions), an individual transfers, from an individual retirement plan (other than a Roth IRA), contributions for such taxable year (and any earnings allocable thereto) to a Roth IRA, no such amount shall be includible in gross income to the extent no deduction was allowed with respect to such amount.”\nSubsec. (d)(3)(E).  Pub. L. 105–206, §\u202f6005(b)(6)(B) , redesignated subpar. (F) as (E). Former subpar. (E) redesignated (D).\nSubsec. (d)(3)(F).  Pub. L. 105–206, §\u202f6005(b)(6)(B) , redesignated subpar. (G) as (F). Former subpar. (F) redesignated (E).\nPub. L. 105–206, §\u202f6005(b)(4)(B) , added subpar. (F).\nSubsec. (d)(3)(G).  Pub. L. 105–206, §\u202f6005(b)(6)(B) , redesignated subpar. (G) as (F).\nPub. L. 105–206, §\u202f6005(b)(4)(B) , added subpar. (G).\nSubsec. (d)(4).  Pub. L. 105–206, §\u202f6005(b)(5)(A) , substituted “Aggregation and ordering rules” for “Coordination with individual retirement accounts” in heading and amended text generally. Prior to amendment, text read as follows: “Section 408(d)(2) shall be applied separately with respect to Roth IRAs and other individual retirement plans.”\nSubsec. (d)(6).  Pub. L. 105–206, §\u202f6005(b)(6)(A) , added par. (6).\nSubsec. (d)(7).  Pub. L. 105–206, §\u202f6005(b)(7) , added par. (7).\nSubsec. (f).  Pub. L. 105–206, §\u202f6005(b)(9) , added subsec. (f).\nPub. L. 117–328, div. T, title I, §\u202f126(d) ,  Dec. 29, 2022 ,  136 Stat. 5317 , provided that:  “The amendments made by this section [amending this section and  section 529 of this title ] shall apply with respect to distributions after  December 31, 2023 .”\nAmendment by  section 401(b)(5) of Pub. L. 117–328  effective as if included in the section of div. O of  Pub. L. 116–94  to which the amendment relates, see  section 401(c) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nAmendment by section 601(a), (c)(2), (d) of  Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 601(e) of Pub. L. 117–328 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 116–94  applicable to contributions made for taxable years beginning after  Dec. 31, 2019 , see  section 107(d)(1) of div. O of Pub. L. 116–94 , set out in a note under  section 219 of this title .\nAmendment by  section 11002(d)(1)(W) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f13611(b) ,  Dec. 22, 2017 ,  131 Stat. 2165 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 110–458, title I, §\u202f108(h)(2) ,  Dec. 23, 2008 ,  122 Stat. 5109 , amended this section “[i]n the case of taxable years beginning after  December 31, 2009 ”.\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 110–245, title I, §\u202f109(d) ,  June 17, 2008 ,  122 Stat. 1633 , provided that: \n “(1)   In general .— Except as provided by paragraphs (2) and (3), the amendments made by this section [amending this section and  section 530 of this title ] shall apply with respect to deaths from injuries occurring on or after the date of the enactment of this Act [ June 17, 2008 ]. \n \n “(2)   Application of amendments to deaths from injuries occurring on or after  october 7, 2001 , and before enactment .— The amendments made by this section shall apply to any contribution made pursuant to section 408A(e)(2) or 530(d)(5) of the Internal Revenue Code of 1986, as amended by this Act, with respect to amounts received under  section 1477 of title 10 , United States Code, or under  section 1967 of title 38  of such Code, for deaths from injuries occurring on or after  October 7, 2001 , and before the date of the enactment of this Act if such contribution is made not later than 1 year after the date of the enactment of this Act. \n \n “(3)   Pension protection act changes .— Section 408A(e)(1) of the Internal Revenue Code of 1986 (as in effect after the amendments made by subsection (b)) shall apply to taxable years beginning after  December 31, 2007 .”\nPub. L. 109–280, title VIII, §\u202f824(b)(1) ,  Aug. 17, 2006 ,  120 Stat. 998 , provided that the amendment made by section 824(b)(1) amends this section as in effect before the Tax Increase Prevention and Reconciliation Act of 2005,  Pub. L. 109–222 . See below.\nPub. L. 109–280, title VIII, §\u202f824(c) ,  Aug. 17, 2006 ,  120 Stat. 999 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after  December 31, 2007 .”\nAmendment by  section 833(c) of Pub. L. 109–280  applicable to taxable years beginning after 2006, see  section 833(d) of Pub. L. 109–280 , set out as a note under  section 25B of this title .\nPub. L. 109–222, title V, §\u202f512(c) ,  May 17, 2006 ,  120 Stat. 366 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2005 , see  section 617(f) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Internal Revenue Service Restructuring and Reform Act of 1998,  Pub. L. 105–206 , to which such amendment relates, see  section 4002(k) of Pub. L. 105–277 , set out as a note under  section 1 of this title .\nAmendment by section 6005(b)(1)–(7), (9) of  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–206, title VII, §\u202f7004(b) ,  July 22, 1998 ,  112 Stat. 833 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nSection applicable to taxable years beginning after  Dec. 31, 1997 , see  section 302(f) of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 219 of this title .\nPub. L. 110–458, title I, §\u202f125 ,  Dec. 23, 2008 ,  122 Stat. 5115 , provided that: \n “(a)   General Rule .— If a qualified airline employee receives any airline payment amount and transfers any portion of such amount to a Roth IRA within 180 days of receipt of such amount (or, if later, within 180 days of the date of the enactment of this Act [ Dec. 23, 2008 ]), then such amount (to the extent so transferred) shall be treated as a qualified rollover contribution described in section 408A(e) of the Internal Revenue Code of 1986, and the limitations described in section 408A(c)(3) of such Code shall not apply to any such transfer. \n \n “(b)   Definitions and Special Rules .— For purposes of this section— “(1)   Airline payment amount.— “(A)   In general .— The term ‘airline payment amount’ means any payment of any money or other property which is payable by a commercial passenger airline carrier to a qualified airline employee— “(i)  under the approval of an order of a Federal bankruptcy court in a case filed after  September 11, 2001 , and before  January 1, 2007 , and \n \n “(ii)  in respect of the qualified airline employee’s interest in a bankruptcy claim against the carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. \n \n\n \u2001\u2001The amount of such payment shall be determined without regard to any requirement to deduct and withhold tax from such payment under sections 3102(a) and 3402(a). \n \n “(B)   Exception .— An airline payment amount shall not include any amount payable on the basis of the carrier’s future earnings or profits. \n \n \n “(2)   Qualified airline employee .— The term ‘qualified airline employee’ means an employee or former employee of a commercial passenger airline carrier who was a participant in a defined benefit plan maintained by the carrier which— “(A)  is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code, and \n \n “(B)  was terminated or became subject to the restrictions contained in paragraphs (2) and (3) of section 402(b) of the Pension Protection Act of 2006 [ Pub. L. 109–280 ,  26 U.S.C. 430  note]. \n \n \n “(3)   Reporting requirements .— If a commercial passenger airline carrier pays 1 or more airline payment amounts, the carrier shall, within 90 days of such payment (or, if later, within 90 days of the date of the enactment of this Act [ Dec. 23, 2008 ]), report— “(A)  to the Secretary of the Treasury, the names of the qualified airline employees to whom such amounts were paid, and \n \n “(B)  to the Secretary and to such employees, the years and the amounts of the payments. \n \n\n Such reports shall be in such form, and contain such additional information, as the Secretary may prescribe. \n \n \n “(c)   Effective Date .— This section shall apply to transfers made after the date of the enactment of this Act [ Dec. 23, 2008 ] with respect to airline payment amounts paid before, on, or after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'For purposes of paragraph (1), compensation of any participant in excess of the first $100,000 per year shall be disregarded.\nFor purposes of this subsection, the amount of compensation paid to a participant for any period is the amount of such participant’s compensation (within the meaning of section 415(c)(3)) for such period.\nNotwithstanding paragraph (1), the allocation to the account of any participant which is attributable to the basic employee plan credit or the credit allowed under section 41\u202f 1  (relating to the employee stock ownership credit) may be extended over whatever period may be necessary to comply with the requirements of section 415.\nA plan meets the requirements of this subsection only if it provides that each participant has a nonforfeitable right to any employer security allocated to his account.\nA plan meets the requirements of this subsection if it meets the requirements of paragraph (2) or (3), whichever is applicable.\nIf the employer has a registration-type class of securities, the plan meets the requirements of this paragraph only if each participant or beneficiary in the plan is entitled to direct the plan as to the manner in which securities of the employer which are entitled to vote and are allocated to the account of such participant or beneficiary are to be voted.\nIf the employer does not have a registration-type class of securities, the plan meets the requirements of this paragraph only if each participant or beneficiary in the plan is entitled to direct the plan as to the manner in which voting rights under securities of the employer which are allocated to the account of such participant or beneficiary are to be exercised with respect to any corporate matter which involves the voting of such shares with respect to the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction as the Secretary may prescribe in regulations.\nA plan meets the requirements of this subsection only if it is established on or before the due date (including any extension of such date) for the filing of the employer’s tax return for the first taxable year of the employer for which an employee plan credit is claimed by the employer with respect to the plan.\nA plan which otherwise meets the requirements of this section shall not be considered to have failed to meet the requirements of section 401(a) merely because it was not established by the close of the first taxable year of the employer for which an employee plan credit is claimed by the employer with respect to the plan.\nA plan meets the requirement of this subsection only if it provides that amounts which are transferred to the plan (because of the requirements of section 48(n)(1) or 41(c)(1)(B))\u202f 1  shall remain in the plan (and, if allocated under the plan, shall remain so allocated) even though part or all of the employee plan credit or the credit allowed under section 41\u202f 1  (relating to employee stock ownership credit) is recaptured or redetermined. For purposes of the preceding sentence, the references to section 48(n)(1)\u202f 1  and the employee plan credit shall refer to such section and credit as in effect before the enactment of the Tax Reform Act of 1984.\nA plan which otherwise meets the requirements of this subsection or of section 4975(e)(7) shall not be considered to have failed to meet the requirements of section 401(a) merely because under the plan the benefits may be distributed in cash or in the form of employer securities.\nA plan to which this subparagraph applies shall not be treated as failing to meet the requirements of this subsection or section 401(a) merely because it does not permit a participant to exercise the right described in paragraph (1)(A) if such plan provides that the participant entitled to a distribution has a right to receive the distribution in cash, except that such plan may distribute employer securities subject to a requirement that such securities may be resold to the employer under terms which meet the requirements of paragraph (1)(B).\nIn the case of a plan established and maintained by a bank (as defined in section 581) which is prohibited by law from redeeming or purchasing its own securities, the requirements of paragraph (1)(B) shall not apply if the plan provides that participants entitled to a distribution from the plan shall have a right to receive a distribution in cash.\nAn employer shall be deemed to satisfy the requirements of paragraph (1)(B) if it provides a put option for a period of at least 60 days following the date of distribution of stock of the employer and, if the put option is not exercised within such 60-day period, for an additional period of at least 60 days in the following plan year (as provided in regulations promulgated by the Secretary).\nIf an employer is required to repurchase employer securities as part of an installment distribution, the requirements of paragraph (1)(B) shall be treated as met if the amount to be paid for the employer securities is paid not later than 30 days after the exercise of the put option described in paragraph (4).\nParagraph (1)(A) shall not apply with respect to the portion of the participant’s account which the employee elected to have reinvested under section 401(a)(28)(B) or subparagraph (B) or (C) of section 401(a)(35).\nThe term “employer securities” means common stock issued by the employer (or by a corporation which is a member of the same controlled group) which is readily tradable on an established securities market.\nNoncallable preferred stock shall be treated as employer securities if such stock is convertible at any time into stock which meets the requirements of paragraph (1) or (2) (whichever is applicable) and if such conversion is at a conversion price which (as of the date of the acquisition by the tax credit employee stock ownership plan) is reasonable. For purposes of the preceding sentence, under regulations prescribed by the Secretary, preferred stock shall be treated as noncallable if after the call there will be a reasonable opportunity for a conversion which meets the requirements of the preceding sentence.\nFor purposes of this subsection, the term “controlled group of corporations” has the meaning given to such term by section 1563(a) (determined without regard to subsections (a)(4) and (e)(3)(C) of section 1563).\nFor purposes of subparagraph (A), if the common parent owns directly stock possessing at least 50 percent of the voting power of all classes of stock and at least 50 percent of each class of nonvoting stock in a first tier subsidiary, such subsidiary (and all other corporations below it in the chain which would meet the 80 percent test of section 1563(a) if the first tier subsidiary were the common parent) shall be treated as includible corporations.\nFor purposes of subparagraph (A), if the common parent owns directly stock possessing all of the voting power of all classes of stock and all of the nonvoting stock, in a first tier subsidiary, and if the first tier subsidiary owns directly stock possessing at least 50 percent of the voting power of all classes of stock, and at least 50 percent of each class of nonvoting stock, in a second tier subsidiary of the common parent, such second tier subsidiary (and all other corporations below it in the chain which would meet the 80 percent test of section 1563(a) if the second tier subsidiary were the common parent) shall be treated as includible corporations.\nNonvoting common stock of an employer described in the second sentence of section 401(a)(22) shall be treated as employer securities if an employer has a class of nonvoting common stock outstanding and the specific shares that the plan acquires have been issued and outstanding for at least 24 months.\nNo gain or loss shall be recognized to the taxpayer with respect to the transfer of employer securities to a tax credit employee stock ownership plan maintained by the taxpayer to the extent that such transfer is required under section 41(c)(1)(B), 1  or subparagraph (A) or (B) of section 48(n)(1). 1\nFor purposes of this subsection, the account balance of a participant shall not include any employer securities acquired with the proceeds of the loan described in section 404(a)(9) until the close of the plan year in which such loan is repaid in full.\nThe Secretary shall adjust the dollar amounts under paragraph (1)(C) at the same time and in the same manner as under section 415(d).\nAn employee stock ownership plan holding employer securities consisting of stock in an S corporation shall provide that no portion of the assets of the plan attributable to (or allocable in lieu of) such employer securities may, during a nonallocation year, accrue (or be allocated directly or indirectly under any plan of the employer meeting the requirements of section 401(a)) for the benefit of any disqualified person.\nIf a plan fails to meet the requirements of paragraph (1), the plan shall be treated as having distributed to any disqualified person the amount allocated to the account of such person in violation of paragraph (1) at the time of such allocation.\nFor excise tax relating to violations of paragraph (1) and ownership of synthetic equity, see section 4979A.\nNotwithstanding the employee trust exception in section 318(a)(2)(B)(i), an individual shall be treated as owning deemed-owned shares of the individual.\nIn the case of a disqualified person described in subparagraph (A)(i), any member of such person’s family with deemed-owned shares shall be treated as a disqualified person if not otherwise treated as a disqualified person under subparagraph (A).\nFor purposes of clause (i)(II), a person’s share of unallocated S corporation stock held by such plan is the amount of the unallocated stock which would be allocated to such person if the unallocated stock were allocated to all participants in the same proportions as the most recent stock allocation under the plan.\nThe term “employee stock ownership plan” has the meaning given such term by section 4975(e)(7).\nThe term “employer security” has the meaning given such term by section 409( l ).\nThe term “synthetic equity” means any stock option, warrant, restricted stock, deferred issuance stock right, or similar interest or right that gives the holder the right to acquire or receive stock of the S corporation in the future. Except to the extent provided in regulations, synthetic equity also includes a stock appreciation right, phantom stock unit, or similar right to a future cash payment based on the value of such stock or appreciation in such value.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.\nThe Secretary may, by regulation or other guidance of general applicability, provide that a nonallocation year occurs in any case in which the principal purpose of the ownership structure of an S corporation constitutes an avoidance or evasion of this subsection.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nSection 41, referred to in subsecs. (b)(1)(A), (4), (g), (i)(1)(A), and (m), which related to employee stock ownership credit, was repealed by  Pub. L. 99–514, title XI, §\u202f1171(a) ,  Oct. 22, 1986 ,  100 Stat. 2513 .  Section 30 of this title , relating to credit for increasing research activities, was renumbered section 41.\nSection 12 of the Securities Exchange Act of 1934, referred to in subsec. (e)(4), is classified to section 78 l  of Title 15, Commerce and Trade.\nSection 403(c)(1) of the Employee Retirement Income Security Act of 1974, referred to in subsecs. (j) and (k), is classified to  section 1103(c)(1) of Title 29 , Labor.\nThe enactment of the Tax Reform Act of 1984, referred to in subsecs. (g) and (k), means the enactment of div. A of  Pub. L. 98–369 , which was approved  July 18, 1984 .\nSubsec. (n) of section 48, referred to in subsecs. (g) and (m), was repealed by section 474( o )(15) of  Pub. L. 98–369 .\nA prior section 409, added  Pub. L. 93–406, title II, §\u202f2002(c) ,  Sept. 2, 1974 ,  88 Stat. 964 ; amended  Pub. L. 94–455, title XV, §\u202f1501(b)(6) , title XIX, §§\u202f1901(a)(60), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1736 , 1774, 1834;  Pub. L. 95–600, title I , §§\u202f156(c)(2), (3), 157(e)(1)(B),  Nov. 6, 1978 ,  92 Stat. 2803 , 2806;  Pub. L. 96–222, title I, §\u202f101(a)(14)(B) ,  Apr. 1, 1980 ,  94 Stat. 204 ;  Pub. L. 97–34, title III, §\u202f311(g)(1)(D) , (3),  Aug. 13, 1981 ,  95 Stat. 281 ;  Pub. L. 97–248, title II, §\u202f243(b)(1)(B) , title III, §\u202f335(a)(2),  Sept. 3, 1982 ,  96 Stat. 523 , 628;  Pub. L. 97–452, §\u202f2(c)(1) ,  Jan. 12, 1983 ,  96 Stat. 2478 ;  Pub. L. 98–369, div. A, title I, §\u202f42(a)(7) , title V, §\u202f522(d)(13),  July 18, 1984 ,  98 Stat. 557 , 871, related to retirement bonds, prior to repeal by  Pub. L. 98–369, div. A, title IV, §\u202f491(b) , (f)(1),  July 18, 1984 ,  98 Stat. 848 , 853, applicable to obligations issued after  Dec. 31, 1983 .\n2018—Subsec. (n)(1)(A)(i).  Pub. L. 115–141  substituted “securities,” for “securities,,,”.\n2014—Subsec. (q).  Pub. L. 113–295  struck out subsec. (q) which related to cross-references.\n2006—Subsec. (h)(7).  Pub. L. 109–280  inserted “or subparagraph (B) or (C) of section 401(a)(35)” before period at end.\n2002—Subsec. ( o )(1)(C)(ii).  Pub. L. 107–147  substituted “$800,000” for “$500,000” in two places and “$160,000” for “$100,000”.\n2001—Subsecs. (p), (q).  Pub. L. 107–16  added subsec. (p) and redesignated former subsec. (p) as (q).\n1997—Subsec. (h)(2).  Pub. L. 105–34  designated existing provisions as subpar. (A), inserted subpar. heading, struck out “In the case of an employer whose charter or bylaws restrict the ownership of substantially all outstanding employer securities to employees or to a trust described in section 401(a), a plan which otherwise meets the requirements of this subsection or section 4975(e)(7) shall not be considered to have failed to meet the requirements of this subsection or of section 401(a) merely because it does not permit a participant to exercise the right described in paragraph (1)(A) if such plan provides that participants entitled to a distribution from the plan shall have a right to receive such distribution in cash, except that such plan may distribute employer securities subject to a requirement that such securities may be resold to the employer under terms which meet the requirements of paragraph (1)(B).” after “employer securities.”, and added subpar. (B).\n1989—Subsec. ( l )(5).  Pub. L. 101–239, §\u202f7811(h)(1) , substituted “the second sentence” for “the last sentence”.\nSubsec. (n)(1).  Pub. L. 101–239, §\u202f7304(a)(2)(A)(i) , struck out “or section 2057” after “section 1042” in two places in introductory provisions.\nSubsec. (n)(1)(A)(i).  Pub. L. 101–239, §\u202f7304(a)(2)(A)(ii) , struck out “or any decedent if the executor of the estate of such decedent makes a qualified sale to which section 2057 applies” after “employer securities,”.\nSubsec. (n)(1)(A)(ii).  Pub. L. 101–239, §\u202f7304(a)(2)(A)(iii) , struck out “or the decedent” after “the taxpayer”.\nSubsec. (n)(2)(C)(i), (3)(A)(ii).  Pub. L. 101–239, §\u202f7304(a)(2)(B) , struck out “or section 2057” after “section 1042”.\n1988—Subsec. (d).  Pub. L. 100–647, §\u202f1011B(j)(3) , inserted “or to any distribution or reinvestment required under section 401(a)(28)” after “under section 401(a)(9)”.\nSubsec. (e)(5).  Pub. L. 100–647, §\u202f1018(t)(4)(H) , substituted “paragraph (3)” for “paragraph (2) or (3)”.\nSubsec. (h)(2).  Pub. L. 100–647, §\u202f1018(t)(4)(B) , substituted “paragraph (1)(B)” for “section 409( o )”.\nSubsec. (h)(7).  Pub. L. 100–647, §\u202f1011B(j)(5) , added par. (7).\nSubsec. ( l )(4), (5).  Pub. L. 100–647, §\u202f1011B(k)(3) , redesignated par. (4), relating to nonvoting common stock may be acquired in certain cases, as (5).\nSubsec. (n)(1).  Pub. L. 100–647, §\u202f1011B(g)(1) , made technical amendment to directory language of  Pub. L. 99–514, §\u202f1172(b)(1) . See 1986 Amendment note below.\nSubsec. (n)(2)(C)(i), (3)(A)(ii).  Pub. L. 100–647, §\u202f1011B(g)(2) , inserted “or section 2057” after “which section 1042”.\nSubsec. (n)(3)(C).  Pub. L. 100–647, §\u202f1018(t)(4)(C) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The term ‘nonallocation period’ means the 10-year period beginning on the later of—\n“(i) the date of the sale of the qualified securities, or\n“(ii) the date of the plan allocation attributable to the final payment of acquisition indebtedness incurred in connection with such sale.”\nSubsec. ( o )(1)(A).  Pub. L. 100–647, §\u202f1011B(i)(3) , substituted “if the participant and, if applicable pursuant to sections 401(a)(11) and 417, with the consent of the participant’s spouse elects” for “unless the participant otherwise elects”.\nSubsec. ( o )(1)(A)(ii).  Pub. L. 100–647, §\u202f1011B(i)(1) , substituted “distribution is required to begin under this clause” for “such year”.\n1986—Subsec. (a)(3).  Pub. L. 99–514, §\u202f1174(b)(2) , inserted reference to subsec. ( o ).\nSubsec. (d).  Pub. L. 99–514, §\u202f1899A(11) , substituted “participant’s” for “participants’s”.\nPub. L. 99–514, §\u202f1852(a)(4)(B) , inserted at end “This subsection shall not apply to any distribution required under section 401(a)(9).”\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1174(a)(1) , substituted “separation from service, or termination of the plan” for “or separation from service”.\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f1854(f)(1)(C) , (D), inserted “or beneficiary” after “participant” in two places and substituted “securities of the employer” for “employer securities”.\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f1854(f)(1)(B) –(D), inserted “or beneficiary” after “participant” in two places and substituted “securities of the employer” for “employer securities” and “any corporate matter which involves the voting of such shares with respect to the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction as the Secretary may prescribe in regulations” for “a corporate matter which (by law or charter) must be decided by more than a majority vote of outstanding common shares voted”.\nSubsec. (e)(5).  Pub. L. 99–514, §\u202f1854(f)(1)(A) , added par. (5).\nSubsec. (h)(2).  Pub. L. 99–514, §\u202f1854(f)(3)(C) , inserted “,\u2000except that such plan may distribute employer securities subject to a requirement that such securities may be resold to the employer under terms which meet the requirements of section 409( o )”.\nSubsec. (h)(5), (6).  Pub. L. 99–514, §\u202f1174(c)(1)(A) , added pars. (5) and (6).\nSubsec. ( l )(4).  Pub. L. 99–514, §\u202f1176(b) , added par. (4) relating to acquisition of nonvoting common stock.\nSubsec. (n).  Pub. L. 99–514, §\u202f1854(a)(3)(A) , added subsec. (n). Former subsec. (n) redesignated ( o ).\nSubsec. (n)(1).  Pub. L. 99–514, §\u202f1172(b)(1) , as amended by  Pub. L. 100–647, §\u202f1011B(g)(1) , inserted “or section 2057” in two places in introductory provisions, “or any decedent if the executor of the estate of such decedent makes a qualified sale to which section 2057 applies,” in subpar. (A)(i), and “or the decedent” in subpar. (A)(ii).\nSubsec. ( o ).  Pub. L. 99–514, §\u202f1174(b)(1) , added subsec. ( o ). Former subsec. ( o ) redesignated (p).\nPub. L. 99–514, §\u202f1854(a)(3)(A) , redesignated former subsec. (n) as ( o ).\nSubsec. (p).  Pub. L. 99–514, §\u202f1174(b)(1) , redesignated former subsec. ( o ) as (p).\n1984—Subsec. (b)(1)(A).  Pub. L. 98–369, §\u202f474(r)(15)(A) , (B), substituted “41” for “44G” and struck out “48(n)(1)(A) or” after “requirements of section”.\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f474(r)(15)(A) , substituted “41” for “44G”.\nSubsec. (g).  Pub. L. 98–369, §\u202f474(r)(15)(A) , (C), substituted “41” for “44G” in two places, and inserted provision directing that, for purposes of the preceding sentence, the references to section 48(n)(1) and the employee plan credit shall refer to such section and credit as in effect before the enactment of the Tax Reform Act of 1984.\nSubsec. (i)(1)(A).  Pub. L. 98–369, §\u202f474(r)(15)(A) , (D), substituted “41” for “44G”, and struck out “48(n)(1) or” after “taxable year under section”.\nSubsec. (k).  Pub. L. 98–369, §\u202f474(r)(15)(E) , inserted provision requiring that, for purposes of this subsection, the reference to the matching employee plan credit refer to such credit as in effect before the enactment of the Tax Reform Act of 1984.\nSubsec. (m).  Pub. L. 98–369, §\u202f474(r)(15)(A) , substituted “41” for “44G”.\nSubsec. (n)(3).  Pub. L. 98–369, §\u202f474(r)(15)(A) , substituted “41” for “44G”.\n1983—Subsec. (d)(2).  Pub. L. 97–448, §\u202f103(i) , struck out provisions covering the sale of substantially all of the stock of a subsidiary of the employer.\nSubsec. (h)(2).  Pub. L. 97–448, §\u202f103(h) , substituted “the requirements of this subsection or of section 401(a)” for “the requirements of section 401(a)”.\n1981—Subsec. (b).  Pub. L. 97–34, §\u202f331(c)(1)(A) , (B), inserted in par. (1)(A) reference to section 44G(c)(1)(B), and inserted in par. (4) “or the credit allowed under section 44G (relating to the employee stock ownership credit)” after “basic employee plan credit”.\nSubsec. (d).  Pub. L. 97–34, §\u202f337 , designated provision relating to death, disability, or separation from service as par. (1) and added pars. (2) and (3).\nSubsec. (g).  Pub. L. 97–34, §\u202f331(c)(1)(C) , (D), inserted reference to section 44G(c)(1)(B) and inserted “or the credit allowed under section 44G (relating to employee stock ownership credit)” after “employee plan credit”.\nSubsec. (h)(2).  Pub. L. 97–34, §\u202f334 , substituted “this subsection” for “this section” and inserted provision respecting receipt of distributions in cash where employer’s charter or bylaws restrict ownership of substantially all outstanding employer securities to employees or to a section 401(a) trust where a participant is not permitted to exercise the right described in par. (1)(A).\nSubsec. (h)(3), (4).  Pub. L. 97–34, §\u202f336 , added pars. (3) and (4).\nSubsec. (i)(1)(A).  Pub. L. 97–34, §\u202f331(c)(1)(E) , inserted reference to section 44G(c)(1)(B).\nSubsec. (m).  Pub. L. 97–34, §\u202f331(c)(1)(F) , inserted reference to section 44G(c)(1)(B).\nSubsec. (n)(2), (3).  Pub. L. 97–34, §\u202f331(c)(1)(G) , (H), inserted “or employee stock ownership credit” after “employee plan credit” in par. (2) and added par. (3).\n1980— Pub. L. 96–222, §\u202f101(a)(7)(L)(v)(VII) , substituted “tax credit employee stock ownership plans” for “ESOPS” in section catchline.\nSubsec. (a).  Pub. L. 96–222, §\u202f101(a)(7)(L)(ii)(I) , (v)(VI), substituted in heading and in text “tax credit employee stock ownership plan” for “ESOP”.\nSubsec. (b)(4).  Pub. L. 96–222, §\u202f101(a)(7)(L)(iii)(V) , substituted “employee plan credit” for “ESOP credit”.\nSubsec. (d).  Pub. L. 96–222, §\u202f101(a)(7)(F) , inserted “(or allocated to a participant’s account in connection with matched employer and employee contributions)” after “under subsection (b)”.\nSubsec. (f)(1).  Pub. L. 96–222, §\u202f101(a)(7)(I)(i) , substituted “only if it is established on or before the due date (including any extension of such date) for the filing of the employer’s tax return for the first taxable year of the employer for which an employee plan credit is claimed by the employer with respect to the plan” for “for a plan year only if it is established on or before the due date for the filing of the employer’s tax return for the taxable year (including any extension of such date) in which or with which the plan year ends”.\nSubsec. (f)(2).  Pub. L. 96–222, §\u202f101(a)(7)(I)(ii) , (L)(v)(VII), substituted “employee plan” for “ESOP” and inserted “with respect to the plan” after “by the employer”.\nSubsec. (g).  Pub. L. 96–222, §\u202f101(a)(7)(L)(iii)(V) , substituted “employee plan credit” for “ESOP credit”.\nSubsec. (h)(2).  Pub. L. 96–222, §\u202f101(a)(7)(E) , inserted “or of section 4975(e)(7)” after “the requirements of this section”.\nSubsecs. (j)(2), (k)(1).  Pub. L. 96–222, §\u202f101(a)(7)(L)(iii)(V) , substituted “employee plan credit” for “ESOP credit”.\nSubsec. ( l )(2)(B).  Pub. L. 96–222, §\u202f101(a)(7)(J)(i) , substituted “class of common stock” for “class of stock”.\nSubsec. ( l )(3).  Pub. L. 96–222, §\u202f101(a)(7)(J)(ii) , (L)(ii)(II), substituted “as employer securities” for “as meeting the requirements of paragraph (1)”, “paragraph (1) or (2)” for “paragraph (2)”, and “tax credit employee stock ownership plan” for “ESOP” and inserted provisions requiring preferred stock to be treated as noncallable if after the call there will be a reasonable opportunity for a conversion which meets the requirements of the preceding sentence.\nSubsec. ( l )(4).  Pub. L. 96–605  substituted in heading “Application to controlled group of corporations” for “Controlled group of corporations defined” and in subpar. (B) heading “Where common parent owns at least” for “Common parent may own only” and added subpar. (C).\nSubsec. (m).  Pub. L. 96–222, §\u202f101(a)(7)(D) , (L)(i), substituted provisions relating to nonrecognition of gain or loss on contribution of employer securities to a tax credit employee stock ownership plan for provisions relating to contributions of stock of a controlling corporation.\nSubsec. (n).  Pub. L. 96–222, §\u202f101(a)(7)(L)(iii)(V) , substituted “employee plan credit” for “ESOP credit” in pars. (1) and (2).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–280  applicable to plan years beginning after  Dec. 31, 2006 , with special rules for collectively bargained agreements and certain employer securities held in an ESOP, see  section 901(c) of Pub. L. 109–280 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nPub. L. 107–16, title VI, §\u202f656(d) ,  June 7, 2001 ,  115 Stat. 135 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 4975 and 4979A of this title] shall apply to plan years beginning after  December 31, 2004 . \n \n “(2)   Exception for certain plans .— In the case of any— “(A)  employee stock ownership plan established after  March 14, 2001 , or \n \n “(B)  employee stock ownership plan established on or before such date if employer securities held by the plan consist of stock in a corporation with respect to which an election under section 1362(a) of the Internal Revenue Code of 1986 is not in effect on such date, \n \n\n the amendments made by this section shall apply to plan years ending after  March 14, 2001 .”\nPub. L. 105–34, title I, §\u202f1506(c) ,  Aug. 5, 1997 ,  111 Stat. 1066 , provided that:  “The amendments made by this section [amending this section,  section 4975 of this title , and  section 1108 of Title 29 , Labor] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 101–239, title VII, §\u202f7304(a)(3) ,  Dec. 19, 1989 ,  103 Stat. 2353 , provided that:  “The amendments made by this subsection [amending this section and sections 4978 and 4979A of this title and repealing sections 2057 and 4978A of this title] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Dec. 19, 1989 ].”\nAmendment by  section 7811(h)(1) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XI, §\u202f1172(c) ,  Oct. 22, 1986 ,  100 Stat. 2515 , provided that:  “The amendments made by this section [enacting  section 2057 of this title  and amending this section and  section 4979A of this title ] shall apply to sales after the date of the enactment of this Act [ Oct. 22, 1986 ] with respect to which an election is made by the executor of an estate who is required to file the return of the tax imposed by the Internal Revenue Code of 1986 on a date (including extensions) after the date of the enactment of this Act.”\nPub. L. 99–514, title XI, §\u202f1174(a)(2) ,  Oct. 22, 1986 ,  100 Stat. 2516 , as amended by  Pub. L. 100–647, title I, §\u202f1011B(i)(2) ,  Nov. 10, 1988 ,  102 Stat. 3492 , provided that:  “The amendment made by this subsection [amending this section] shall apply to distributions after  December 31, 1984 .”\nPub. L. 99–514, title XI, §\u202f1174(b)(3) ,  Oct. 22, 1986 ,  100 Stat. 2517 , provided that:  “The amendments made by this subsection [amending this section] shall apply to distributions attributable to stock acquired after  December 31, 1986 .”\nPub. L. 99–514, title XI, §\u202f1174(c)(1)(B) ,  Oct. 22, 1986 ,  100 Stat. 2518 , provided that:  “The amendment made by this paragraph [amending this section] shall apply to distributions attributable to stock acquired after  December 31, 1986 , except that a plan may elect to have such amendment apply to all distributions after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by  section 1176(b) of Pub. L. 99–514  applicable to acquisitions of securities after  Dec. 31, 1986 , see  section 1176(c) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 1852(a)(4)(B) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1854(a)(3)(C) ,  Oct. 22, 1986 ,  100 Stat. 2874 , as amended by  Pub. L. 100–647, title I, §\u202f1018(t)(4)(G) ,  Nov. 10, 1988 ,  102 Stat. 3588 , provided that: \n “(i)  Except as provided in clause (ii), the amendments made by this paragraph [amending this section and  section 1042 of this title ] shall apply to sales of securities after the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(ii)  A taxpayer or executor may elect to have section 1042(b)(3) of the Internal Revenue Code of 1954 (as in effect before the amendment made by subparagraph (B)) apply to sales before the date of the enactment of this Act as if such section included the last sentence of section 409(n)(1) of the Internal Revenue Code of 1986 (as added by subparagraph (A)).”\nPub. L. 99–514, title XVIII, §\u202f1854(f)(4)(A) , (B),  Oct. 22, 1986 ,  100 Stat. 2882 , provided that: \n “(A)  The amendments made by paragraph (1)(A) and (3) [amending this section and sections 1042 and 4975 of this title] shall take effect on the date of the enactment of this Act [ Oct. 22, 1986 ].”\n“(B) The amendments made by subparagraphs (B), (C), and (D) of paragraph (1) [amending this section] shall apply after  December 31, 1986 , to stock acquired after  December 31, 1979 .”\nAmendment by  section 474(r)(15) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nRedesignation of section 409A as 409 by  section 491(e)(1) of Pub. L. 98–369  effective  Jan. 1, 1984 , see  section 491(f)(3) of Pub. L. 98–369 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 331(c)(1) of Pub. L. 97–34  applicable to taxable years ending after  Dec. 31, 1982 , see  section 331(f)(2) of Pub. L. 97–34 , set out as a note under  section 404 of this title .\nPub. L. 97–34, title III, §\u202f337(b) ,  Aug. 13, 1981 ,  95 Stat. 298 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions described in section 409A(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (or any corresponding provision of prior law) made after  March 29, 1975 .”\nAmendment by sections 334 and 336 of  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 339 of Pub. L. 97–34 , set out as a note under  section 401 of this title .\nPub. L. 96–605, title II, §\u202f224(b) ,  Dec. 28, 1980 ,  94 Stat. 3529 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to qualified investment for taxable years beginning after  December 31, 1978 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f141(g) ,  Nov. 6, 1978 ,  92 Stat. 2795 , as added by  Pub. L. 96–222, title I, §\u202f101(a)(7)(B) ,  Apr. 1, 1980 ,  94 Stat. 197 ; amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as otherwise provided in this subsection and subsection (h) [set out as an Effective Date of 1978 Amendment note under  section 4975 of this title ], the amendments made by this section [enacting sections 409A [now 409] and 6699 of this title and amending sections 46, 48, 56, 401, 404, 415, 805, 1504, and 4975 of this title] shall apply with respect to qualified investment for taxable years beginning after  December 31, 1978 . \n \n “(2)   Election to have amendments apply during 1978.— At the election of the taxpayer, paragraph (1) shall be applied by substituting ‘ December 31, 1977 ’ for ‘ December 31, 1978 ’; except that in the case of a plan in existence before  December 31, 1978 , any such election shall not affect the required allocation of employer securities attributable to qualified investment for taxable years beginning before  January 1, 1979 . An election under the preceding sentence shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. Such an election, once made, shall be irrevocable. \n \n “(3)   Voting right provisions.— Section 409A(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) [now section 409] shall apply to plans to which section 409A of such Code applies, beginning with the first day of such application. \n \n “(4)   Right to demand employer securities, etc.— Paragraphs (1)(A) and (2) of section 409A(h) of the Internal Revenue Code of 1986 (as added by subsection (a)) [now section 409] shall apply to distributions after  December 31, 1978 , made by a plan to which section 409A of such Code applies. \n \n “(5)   Subsection  (f)(7).— The amendment made by subsection (f)(7) [amending  section 415 of this title ] shall apply to years beginning after  December 31, 1978 . \n \n “(6)   Retroactive application of amendment made by subsection  (d).— In determining the regular tax deduction under [former] section 56(c) of the Internal Revenue Code of 1986 for any taxable year beginning before  January 1, 1979 , the amount of the credit allowable under section 38 of such Code shall be determined without regard to section 46(a)(2)(B) of such Code (as in effect before the enactment of the Energy Tax Act of 1978 [ Nov. 9, 1978 ]).”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Clause (i) shall only apply with respect to all compensation deferred under the plan for participants with respect to whom the failure relates.\nFor purposes of clause (i), the interest determined under this clause for any taxable year is the amount of interest at the underpayment rate plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture.\nIn the case of any specified employee, the requirement of subparagraph (A)(i) is met only if distributions may not be made before the date which is 6 months after the date of separation from service (or, if earlier, the date of death of the employee). For purposes of the preceding sentence, a specified employee is a key employee (as defined in section 416(i) without regard to paragraph (5) thereof) of a corporation any stock in which is publicly traded on an established securities market or otherwise.\nThe term “unforeseeable emergency” means a severe financial hardship to the participant resulting from an illness or accident of the participant, the participant’s spouse, or a dependent (as defined in section 152(a)) of the participant, loss of the participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant.\nThe requirement of subparagraph (A)(vi) is met only if, as determined under regulations of the Secretary, the amounts distributed with respect to an emergency do not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).\nThe requirements of this paragraph are met if the plan does not permit the acceleration of the time or schedule of any payment under the plan, except as provided in regulations by the Secretary.\nThe requirements of this paragraph are met if the requirements of subparagraphs (B) and (C) are met.\nThe requirements of this subparagraph are met if the plan provides that compensation for services performed during a taxable year may be deferred at the participant’s election only if the election to defer such compensation is made not later than the close of the preceding taxable year or at such other time as provided in regulations.\nIn the case of the first year in which a participant becomes eligible to participate in the plan, such election may be made with respect to services to be performed subsequent to the election within 30 days after the date the participant becomes eligible to participate in such plan.\nIn the case of any performance-based compensation based on services performed over a period of at least 12 months, such election may be made no later than 6 months before the end of the period.\nThe term “covered employee” means an individual described in section 162(m)(3) or an individual subject to the requirements of section 16(a) of the Securities Exchange Act of 1934.\nFor each taxable year that assets treated as transferred under this subsection remain set aside in a trust or other arrangement subject to paragraph (1), (2), or (3), any increase in value in, or earnings with respect to, such assets shall be treated as an additional transfer of property under this subsection (to the extent not previously included in income).\nFor purposes of subparagraph (A), the interest determined under this subparagraph for any taxable year is the amount of interest at the underpayment rate plus 1 percentage point on the underpayments that would have occurred had the amounts so required to be included in gross income by paragraph (1), (2), or (3) been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such amounts are not subject to a substantial risk of forfeiture.\nNothing in this section shall be construed to prevent the inclusion of amounts in gross income under any other provision of this chapter or any other rule of law earlier than the time provided in this section. Any amount included in gross income under this section shall not be required to be included in gross income under any other provision of this chapter or any other rule of law later than the time provided in this section.\nThe term “plan” includes any agreement or arrangement, including an agreement or arrangement that includes one person.\nThe rights of a person to compensation are subject to a substantial risk of forfeiture if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual.\nReferences to deferred compensation shall be treated as including references to income (whether actual or notional) attributable to such compensation or such income.\nExcept as provided by the Secretary, rules similar to the rules of subsections (b) and (c) of section 414 shall apply.\nAn arrangement under which an employee may receive qualified stock (as defined in section 83(i)(2)) shall not be treated as a nonqualified deferred compensation plan with respect to such employee solely because of such employee’s election, or ability to make an election, to defer recognition of income under section 83(i).\nSection 4041 of the Employee Retirement Income Security Act of 1974, referred to in subsec. (b)(3)(B)(iii), is classified to  section 1341 of Title 29 , Labor.\nSection 16(a) of the Securities Exchange Act of 1934, referred to in subsec. (b)(3)(D)(ii), is classified to  section 78p(a) of Title 15 , Commerce and Trade.\nA prior section 409A was renumbered  section 409 of this title .\n2018—Subsec. (b)(3)(B)(i).  Pub. L. 115–141  substituted comma for semicolon at end.\n2017—Subsec. (d)(7).  Pub. L. 115–97  added par. (7).\n2008—Subsec. (b)(3)(A)(ii).  Pub. L. 110–458  inserted “to an applicable covered employee” after “under the plan”.\n2006—Subsec. (b)(3).  Pub. L. 109–280, §\u202f116(a) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (b)(4), (5).  Pub. L. 109–280  redesignated pars. (3) and (4) as (4) and (5), respectively, and substituted “paragraph (1), (2), or (3)” for “paragraph (1) or (2)” wherever appearing.\n2005—Subsec. (a)(4)(C)(ii).  Pub. L. 109–135  struck out “first” after “requires that the”.\nAmendment by  Pub. L. 115–97  applicable to stock attributable to options exercised, or restricted stock units settled, after  Dec. 31, 2017 , see  section 13603(f)(1) of Pub. L. 115–97 , set out as a note under  section 83 of this title .\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 109–280, title I, §\u202f116(c) ,  Aug. 17, 2006 ,  120 Stat. 858 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers or other reservation of assets after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 109–135, title IV, §\u202f403(hh)(3)(A) ,  Dec. 21, 2005 ,  119 Stat. 2631 , provided that:  “Notwithstanding section 885(d)(1) of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 , set out below], subsection (b) of section 409A of the Internal Revenue Code of 1986 shall take effect on  January 1, 2005 .”\nPub. L. 108–357, title VIII, §\u202f885(d) ,  Oct. 22, 2004 ,  118 Stat. 1640 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 3401, 6041, and 6051 of this title] shall apply to amounts deferred after  December 31, 2004 . \n \n “(2)   Special rules.— “(A)   Earnings .— The amendments made by this section shall apply to earnings on deferred compensation only to the extent that such amendments apply to such compensation. \n \n “(B)   Material modifications .— For purposes of this subsection, amounts deferred in taxable years beginning before  January 1, 2005 , shall be treated as amounts deferred in a taxable year beginning on or after such date if the plan under which the deferral is made is materially modified after  October 3, 2004 , unless such modification is pursuant to the guidance issued under subsection (f) [set out as a note below]. \n \n \n “(3)   Exception for nonelective deferred compensation .— The amendments made by this section shall not apply to any nonelective deferred compensation to which section 457 of the Internal Revenue Code of 1986 does not apply by reason of section 457(e)(12) of such Code, but only if such compensation is provided under a nonqualified deferred compensation plan— “(A)  which was in existence on  May 1, 2004 , \n \n “(B)  which was providing nonelective deferred compensation described in such section 457(e)(12) on such date, and \n \n “(C)  which is established or maintained by an organization incorporated on  July 2, 1974 . \n \n\n If, after  May 1, 2004 , a plan described in the preceding sentence adopts a plan amendment which provides a material change in the classes of individuals eligible to participate in the plan, this paragraph shall not apply to any nonelective deferred compensation provided under the plan on or after the date of the adoption of the amendment.”\nFor special rules on applicability of amendments by subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .\nPub. L. 109–135, title IV, §\u202f403(hh)(3)(B) ,  Dec. 21, 2005 ,  119 Stat. 2631 , provided that:  “Not later than 90 days after the date of the enactment of this Act [ Dec. 21, 2005 ], the Secretary of the Treasury shall issue guidance under which a nonqualified deferred compensation plan which is in violation of the requirements of section 409A(b) of such Code shall be treated as not having violated such requirements if such plan comes into conformance with such requirements during such limited period as the Secretary may specify in such guidance.”\nPub. L. 108–357, title VIII, §\u202f885(e) ,  Oct. 22, 2004 ,  118 Stat. 1640 , provided that:  “Not later than 90 days after the date of the enactment of this Act [ Oct. 22, 2004 ], the Secretary of the Treasury shall issue guidance on what constitutes a change in ownership or effective control for purposes of section 409A of the Internal Revenue Code of 1986, as added by this section.”\nPub. L. 108–357, title VIII, §\u202f885(f) ,  Oct. 22, 2004 ,  118 Stat. 1641 , as amended by  Pub. L. 109–135, title IV, §\u202f403(hh)(4) ,  Dec. 21, 2005 ,  119 Stat. 2632 , provided that:  \n “Not later than 60 days after the date of the enactment of this Act [ Oct. 22, 2004 ], the Secretary of the Treasury shall issue guidance providing a limited period during which a nonqualified deferred compensation plan adopted before  January 1, 2005 , may, without violating the requirements of paragraphs (2), (3), and (4) of section 409A(a) of the Internal Revenue Code of 1986 (as added by this section), be amended— \n “(1)  to provide that a participant may terminate participation in the plan, or cancel an outstanding deferral election with regard to amounts deferred after  December 31, 2004 , but only if amounts subject to the termination or cancellation are includible in income of the participant as earned (or, if later, when no longer subject to substantial risk of forfeiture), and \n \n “(2)  to conform to the requirements of such section 409A with regard to amounts deferred after  December 31, 2004 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'A trust shall not constitute a qualified trust under section 401(a) if the plan of which it is a part excludes from participation (on the basis of age) employees who have attained a specified age.\nFor purposes of this subsection, the term “year of service” means a 12-month period during which the employee has not less than 1,000 hours of service. For purposes of this paragraph, computation of any 12-month period shall be made with reference to the date on which the employee’s employment commenced, except that, under regulations prescribed by the Secretary of Labor, such computation may be made by reference to the first day of a plan year in the case of an employee who does not complete 1,000 hours of service during the 12-month period beginning on the date his employment commenced.\nIn the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term “year of service” shall be such period as may be determined under regulations prescribed by the Secretary of Labor.\nFor purposes of this subsection, the term “hour of service” means a time of service determined under regulations prescribed by the Secretary of Labor.\nFor purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as 1,000 hours of service. The Secretary of Labor may prescribe regulations to carry out this subparagraph.\nExcept as otherwise provided in subparagraphs (B), (C), and (D), all years of service with the employer or employers maintaining the plan shall be taken into account in computing the period of service for purposes of paragraph (1).\nIn the case of any employee who has any 1-year break in service (as defined in section 411(a)(6)(A)) under a plan to which the service requirements of clause (i) of paragraph (1)(B) apply, if such employee has not satisfied such requirements, service before such break shall not be required to be taken into account.\nIn computing an employee’s period of service for purposes of paragraph (1) in the case of any participant who has any 1-year break in service (as defined in section 411(a)(6)(A)), service before such break shall not be required to be taken into account under the plan until he has completed a year of service (as defined in paragraph (3)) after his return.\nIf any years of service are not required to be taken into account by reason of a period of breaks in service to which clause (i) applies, such years of service shall not be taken into account in applying clause (i) to a subsequent period of breaks in service.\nFor purposes of clause (i), the term “nonvested participant” means a participant who does not have any nonforfeitable right under the plan to an accrued benefit derived from employer contributions.\nFor purposes of this subparagraph, the term “year” means the period used in computations pursuant to paragraph (3).\nFor purposes of this paragraph, the term “average benefit percentage” means, with respect to any group, the average of the benefit percentages calculated separately with respect to each employee in such group (whether or not a participant in any plan).\nThe term “benefit percentage” means the employer-provided contribution or benefit of an employee under all qualified plans maintained by the employer, expressed as a percentage of such employee’s compensation (within the meaning of section 414(s)).\nFor purposes of this paragraph, the term “qualified plan” means any plan which (without regard to this subsection) meets the requirements of section 401(a).\nIf employees not meeting the minimum age or service requirements of subsection (a)(1) (without regard to subparagraph (B) thereof) are covered under a plan of the employer which meets the requirements of paragraph (1) separately with respect to such employees, such employees may be excluded from consideration in determining whether any plan of the employer meets the requirements of paragraph (1).\nAn employee shall not be treated as meeting the age and service requirements described in this paragraph until the first date on which, under the plan, any employee with the same age and service would be eligible to commence participation in the plan.\nIf, under section 414(r), an employer is treated as operating separate lines of business for a year, the employer may apply the requirements of this subsection for such year separately with respect to employees in each separate line of business.\nSubparagraph (A) shall not apply with respect to any plan maintained by an employer unless such plan benefits such employees as qualify under a classification set up by the employer and found by the Secretary not to be discriminatory in favor of highly compensated employees.\nThe term “highly compensated employee” has the meaning given such term by section 414(q).\nIn the case of contributions which are subject to section 401(k) or 401(m), employees who are eligible to contribute (or elect to have contributions made on their behalf) shall be treated as benefiting under the plan (other than for purposes of paragraph (2)(A)(ii)).\nA plan maintained by an employer which has no employees other than highly compensated employees for any year shall be treated as meeting the requirements of this subsection for such year.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\nIf the church or convention or association of churches which maintains any church plan makes an election under this subsection (in such form and manner as the Secretary may by regulations prescribe), then the provisions of this title relating to participation, vesting, funding, etc. (as in effect from time to time) shall apply to such church plan as if such provisions did not contain an exclusion for church plans.\nAn election under this subsection with respect to any church plan shall be binding with respect to such plan, and, once made, shall be irrevocable.\nThe Railway Labor Act, referred to in subsec. (b)(3), is  act May 20, 1926, ch. 347 ,  44 Stat. 577 . Title II of the Railway Labor Act was added by  act Apr. 10, 1936, ch. 166 ,  49 Stat. 1189 , and is classified generally to subchapter II (§\u202f181 et seq.) of Title 45, Railroads. For complete classification of this Act to the Code, see  section 151 of Title 45  and Tables.\n2006—Subsec. (b)(3).  Pub. L. 109–280 , in concluding provisions, substituted “For purposes of subparagraph (B), management pilots who are not represented in accordance with title II of the Railway Labor Act shall be treated as covered by a collective bargaining agreement described in such subparagraph if the management pilots manage the flight operations of air pilots who are so represented and the management pilots are, pursuant to the terms of the agreement, included in the group of employees benefitting under the trust described in such subparagraph. Subparagraph (B) shall not apply in the case of a plan which provides contributions or benefits for employees whose principal duties are not customarily performed aboard an aircraft in flight (other than management pilots described in the preceding sentence).” for “Subparagraph (B) shall not apply in the case of a plan which provides contributions or benefits for employees whose principal duties are not customarily performed aboard aircraft in flight.”\n1997—Subsec. (c)(2).  Pub. L. 105–34  amended par. (2) generally. Prior to amendment, par. (2) read as follows: “A plan described in paragraph (1) shall be treated as meeting the requirements of this section, for purposes of section 401(a), if such plan meets the requirements of section 401(a)(3) as in effect on  September 1, 1974 .”\n1989—Subsec. (a)(2).  Pub. L. 101–239  struck out comma before period at end.\n1988—Subsec. (b)(4)(B).  Pub. L. 100–647, §\u202f1011(h)(1) , substituted “not meeting” for “do not meet” and struck out “and” before “are covered”.\nSubsec. (b)(4)(C).  Pub. L. 100–647, §\u202f1011(h)(11) , added subpar. (C).\nSubsec. (b)(6)(C)(i)(II).  Pub. L. 100–647, §\u202f3021(a)(13)(B) , inserted “or such plan meets such other requirements as the Secretary may prescribe by regulation” after “of a group)”.\nSubsec. (b)(6)(F), (G).  Pub. L. 100–647, §\u202f1011(h)(2) , added subpar. (F) and redesignated former subpar. (F) as (G).\n1986—Subsec. (a)(1)(B)(i).  Pub. L. 99–514, §\u202f1113(c) , substituted “2 years of service” for “3 years of service” in two places.\nSubsec. (a)(2).  Pub. L. 99–509  substituted a period for “unless—\n“(A) the plan is a—\n“(i) defined benefit plan, or\n“(ii) target benefit plan (as defined under regulations prescribed by the Secretary), and\n“(B) such employees begin employment with the employer after they have attained a specified age which is not more than 5 years before the normal retirement age under the plan.”\nSubsec. (a)(5)(B).  Pub. L. 99–514, §\u202f1113(d)(A) , substituted “2-year” for “3-year” in heading.\nSubsec. (b).  Pub. L. 99–514, §\u202f1112(a) , substituted “Minimum coverage requirements” for “Eligibility” as subsec. (b) heading and amended subsec. generally, revising and restating as pars. (1) to (6) provisions formerly contained in pars. (1) to (3).\n1984—Subsec. (a)(1)(A)(i).  Pub. L. 98–397, §\u202f202(a)(1) , substituted “21” for “25”.\nSubsec. (a)(1)(B)(ii).  Pub. L. 98–397, §\u202f202(a)(2) , substituted “\u202f‘26’ for ‘21’\u202f” for “\u202f‘30’ for ‘25’\u202f”.\nSubsec. (a)(5)(D).  Pub. L. 98–397, §\u202f202(d)(1) , amended subpar. (D) generally.\nSubsec. (a)(5)(E).  Pub. L. 98–397, §\u202f202(e)(1) , added subpar. (E).\n1981—Subsec. (b)(3)(C).  Pub. L. 97–34  substituted “section 911(d)(2)” for “section 911(b)”.\n1980—Subsec. (b)(2), (3).  Pub. L. 96–605  added par. (2), redesignated former par. (2) as (3) and substituted “paragraphs (1) and (2)” for “paragraph (1)”.\n1976—Subsec. (a)(2)(A)(ii).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(5)(C), (D).  Pub. L. 94–455, §\u202f1901(a)(61)(A) , substituted “purposes of paragraph (1)” for “purposes of subsection (a)(1)”.\nSubsec. (b)(1)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(1)(C).  Pub. L. 94–455, §\u202f1901(a)(61)(B) , substituted “ September 2, 1974 ,” for “the date of the enactment of the Employee Retirement Income Security Act of 1974”.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1901(a)(61)(C) , substituted “ September 1, 1974 ” for “the day before the date of the enactment of this section”.\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 109–280  applicable to years beginning before, on, or after  Aug. 17, 2006 , see  section 402(h)(2) of Pub. L. 109–280 , set out as a Special Funding Rules for Certain Plans Maintained by Commercial Airlines note under  section 430 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning on or after  Aug. 5, 1997 , with certain governmental plans treated as satisfying requirements for all taxable years beginning before  Aug. 5, 1997 , see  section 1505(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by section 1011(h)(1), (2), (11) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 3021(a)(13)(B) of Pub. L. 100–647  effective as if included in the amendments by  section 1151 of Pub. L. 99–514 , see  section 3021(d)(1) of Pub. L. 100–647 , set out as a note under  section 129 of this title .\nAmendment by  section 1112(a) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule regarding collective bargaining agreements ratified before  Mar. 1, 1986 , and with provision for waiver of excise tax on reversions, see  section 1112(e) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by section 1113(c), (d)(A) of  Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule for plans maintained pursuant to collective bargaining agreements ratified before  Mar. 1, 1986 , and not applicable to employees who do not have 1 hour of service in any plan year to which the amendment applies, see  section 1113(f) of Pub. L. 99–514 , as amended, set out as a note under  section 411 of this title .\nAmendment by  Pub. L. 99–509  applicable only with respect to plan years beginning on or after  January 1, 1988 , and only with respect to service performed on or after such date, see  section 9204(b) of Pub. L. 99–509 , set out as an Effective and Termination Dates of 1986 Amendments note under  section 623 of Title 29 , Labor.\nAmendment by  Pub. L. 98–397  applicable to plan years beginning after  Dec. 31, 1984 , except as otherwise provided, see sections 302 and 303 of  Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 , Labor.\nAmendment by  Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nAmendment by  Pub. L. 96–605  applicable with respect to plan years beginning after  December 31, 1980 , see  section 225(c) of Pub. L. 96–605 , set out as a note under  section 401 of this title .\nAmendment by  section 1901(a)(61) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 93–406, title II, §\u202f1017 ,  Sept. 2, 1974 ,  88 Stat. 932 , as amended by  Pub. L. 94–12, title IV, §\u202f402 ,  Mar. 29, 1975 ,  89 Stat. 47 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this part [part 1 (§§\u202f1011–1017) of subtitle A of title II of  Pub. L. 93–406 , enacting this section and sections 411, 412, 413, 414, and 4971 of this title, amending sections 275, 401, 404, 406, 407, 805, 6161, 6201, 6204, 6211, 6212, 6213, 6214, 6344, 6501, 6503, 6512, 6601, 6653, 6659 [now 6662], 6676, 6677, 6679, 6682, 6688, 6861, 6862, and 7422 of this title and enacting provisions set out as notes under this section and sections 411 and 412 of this title] shall apply for plan years beginning after the date of the enactment of this Act [ Sept. 2, 1974 ]. \n \n “(b)   Existing Plans .— Except as otherwise provided in subsections (c) through (i), in the case of a plan in existence on  January 1, 1974 , the amendments made by this part shall apply for plan years beginning after  December 31, 1975 . \n \n “(c)   Existing Plans Under Collective Bargaining Agreements.— “(1)   Application of vesting rules to certain plan provisions.— “(A)   Waiver of application .— In the case of a plan maintained on  January 1, 1974 , pursuant to one or more agreements which the Secretary of Labor finds to be collective bargaining agreements between employee representatives and one or more employers, during the special temporary waiver period the plan shall not be treated as not meeting the requirements of section 411(b)(1) or (2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] solely by reason of a supplementary or special plan provision (within the meaning of subparagraph (D)). \n \n “(B)   Special temporary waiver period .— For purposes of this paragraph, the term ‘special temporary waiver period’ means plan years beginning after  December 31, 1975 , and before the earlier of— “(i)  the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act [ Sept. 2, 1974 ]), or \n \n “(ii)   January 1, 1981 . \n \n\n \u2001\u2001For purposes of clause (i), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement contained in this Act [see Short Title note set out under  section 1001 of Title 29 , Labor] shall not be treated as a termination of such collective bargaining agreement. \n \n “(C)   Determination by secretary of labor required .— Subparagraph (A) shall not apply unless the Secretary of Labor determines that the participation and vesting rules in effect on the date of the enactment of this Act [ Sept. 2, 1974 ] are not less favorable to the employees, in the aggregate than the rules provided under sections 410 and 411 of the Internal Revenue Code of 1986. \n \n “(D)   Supplementary or special plan provisions .— For purposes of this paragraph, the term ‘supplementary or special plan provision’ means any plan provision which— “(i)  provides supplementary benefits, not in excess of one-third of the basic benefit, in the form of an annuity for the life of the participant, or \n \n “(ii)  provides that, under a contractual agreement based on medical evidence as to the effects of working in an adverse environment for an extended period of time, a participant having 25 years of service is to be treated as having 30 years of service. \n \n \n \n “(2)   Application of funding rules.— “(A)   In general .— In the case of a plan maintained on  January 1, 1974 , pursuant to one or more agreements which the Secretary of Labor finds to be collective bargaining agreements between employee representatives and one or more employers, section 412 of the Internal Revenue Code of 1986, and other amendments made by this part to the extent such amendments relate to such section 412, shall not apply during the special temporary waiver period (as defined in paragraph (1)(B)). \n \n “(B)   Waiver of underfunding .— In the case of a plan maintained on  January 1, 1974 , pursuant to one or more agreements which the Secretary of Labor finds to be collective bargaining agreements between employee representatives and one or more employers, if by reason of subparagraph (A) the requirements of section 401(a)(7) of the Internal Revenue Code of 1986 apply without regard to the amendment of such section 401(a)(7) by section 1016(a)(2)(C) of this Act [ Pub. L. 93–406 ], the plan shall not be treated as not meeting such requirements solely by reason of the application of the amendments made by sections 1011 and 1012 of this Act [enacting this section and  section 411 of this title ] or related amendments made by this part. \n \n “(C)   Labor organization conventions .— In the case of a plan maintained by a labor organization, which is exempt from tax under section 501(c)(5) of the Internal Revenue Code of 1986 exclusively for the benefit of its employees and their beneficiaries, section 412 of such Code and other amendments made by this part to the extent such amendments relate to such section 412, shall be applied by substituting for the term ‘ December 31, 1975 ’ in subsection (b), the earlier of— “(i)  the date on which the second convention of such labor organization held after the date of the enactment of this Act [ Sept. 2, 1974 ] ends, or \n \n “(ii)   December 31, 1980 , \n \n\n \u2001\u2001but in no event shall a date earlier than the later of  December 31, 1975 , or the date determined under subparagraph (A) or (B) be substituted. \n \n \n \n “(d)   Existing Plans May Elect New Provisions .— In the case of a plan in existence on  January 1, 1974 , the provisions of the Internal Revenue Code of 1986 relating to participation, vesting, funding, and form of benefit (as in effect from time to time) shall apply in the case of the plan year (which begins after the date of the enactment of this Act [ Sept. 2, 1974 ] but before the applicable effective date determined under subsection (b) or (c)) selected by the plan administrator and to all subsequent plan years, if the plan administrator elects (in such manner and at such time as the Secretary of the Treasury or his delegate shall by regulations prescribe) to have such provisions so apply. Any election made under this subsection, once made, shall be irrevocable. \n \n “(e)   Certain Definitions and Special Rules .— Section 414 of the Internal Revenue Code of 1986 (other than subsections (b) and (c) of such section 414), as added by section 1015(a) of this Act [ Pub. L. 93–406 ], shall take effect on the date of the enactment of this Act [ Sept. 2, 1974 ]. \n \n “(f)   Transitional Rules With Respect to Breaks in Service.— “(1)   Participation .— In the case of a plan to which section 410 of the Internal Revenue Code of 1986 [this section] applies, if any plan amendment with respect to breaks in service (which amendment is made or becomes effective after  January 1, 1974 , and before the date on which such section 410 first becomes effective with respect to such plan) provides that any employee’s participation in the plan would commence at any date later than the later of— “(A)  the date on which his participation would commence under the break in service rules of section 410(a)(5) of such Code, or \n \n “(B)  the date on which his participation would commence under the plan as in effect on  January 1, 1974 , \n \n\n \u2001such plan shall not constitute a plan described in section 403(a) or 405(a) of such Code and a trust forming a part of such plan shall not constitute a qualified trust under section 401(a) of such Code. \n \n “(2)   Vesting .— In the case of a plan to which section 411 of the Internal Revenue Code of 1986 applies, if any plan amendment with respect to breaks in service (which amendment is made or becomes effective after  January 1, 1974 , and before the date on which such section 411 first becomes effective with respect to such plan) provides that the nonforfeitable benefit derived from employer contributions to which any employee would be entitled is less than the lesser of the nonforfeitable benefit derived from employer contributions to which he would be entitled under— “(A)  the break in service rules of section 411(a)(6) of such Code, or \n \n “(B)  the plan as in effect on  January 1, 1974 , \n \n\n \u2001such plan shall not constitute a plan described in section 403(a) or 405(a) of such Code and a trust forming a part of such plan shall not constitute a qualified trust under section 401(a) of such Code. Subparagraph (B) shall not apply if the break in service rules under the plan would have been in violation of any law or rule of law in effect on  January 1, 1974 . \n \n \n “(g)  3- Year Delay for Certain Provisions .— Subparagraphs (B) and (C) of section 404(a)(1) shall apply only in the case of plan years beginning on or after 3 years after the date of the enactment of this Act [ Sept. 2, 1974 ]. \n \n “(h) (1)  Except as provided in paragraph (2), section 413 of the Internal Revenue Code of 1986 shall apply to plan years beginning after  December 31, 1953 . \n \n “(2) (A)  For plan years beginning before the applicable effective date of section 410 of such Code, the provisions of paragraphs (1) and (8) of subsection (b) of such section 413 shall be applied by substituting ‘401(a)(3)’ for ‘410’. \n \n “(B)  For plan years beginning before the applicable effective date of section 411 of such Code, the provisions of subsection (b)(2) of such section 413 shall be applied by substituting ‘401(a)(7)’ for ‘411(d)(3)’. \n \n “(C) (i)  The provisions of subsection (b)(4) of such section 413 shall not apply to plan years beginning before the applicable effective date of section 411 of such Code. \n \n “(ii)  The provisions of subsection (b)(5) (other than the second sentence thereof) of such section 413 shall not apply to plan years beginning before the applicable effective date of section 412 of such Code. \n \n \n \n \n “(i)   Contributions to H.R . 10  Plans .— Notwithstanding subsections (b) and (c)(2), in the case of a plan in existence on  January 1, 1974 , the amendment made by section 1013(c)(2) of this Act [amending  section 404(a)(6) of this title ] shall apply, with respect to a plan which provides contributions or benefits for employees some or all of whom are employees within the meaning of section 401(c)(1) of the Internal Revenue Code of 1986, for plan years beginning after  December 31, 1974 , but only if the employer (within the meaning of section 401(c)(4) of such Code) elects in such manner and at such time as the Secretary of the Treasury or his delegate shall by regulations prescribe, to have such amendment so apply. Any election made under this subsection, once made, shall be irrevocable.”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by sections 1112 and 1113 of  Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nSecretary of Labor, Secretary of the Treasury, and Equal Employment Opportunity Commission shall each issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 9203 of Pub. L. 99–509 , see  section 9204 of Pub. L. 99–509 , set out as a note under  section 623 of Title 29 , Labor.\nPub. L. 113–97, title I, §\u202f103(c) ,  Apr. 7, 2014 ,  128 Stat. 1120 , provided that:  \n “For purposes of the Internal Revenue Code of 1986, sections 4(b)(2) and 4021(b)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1003(b)(2) , 1321(b)(3)], and all other purposes, a plan shall be deemed to have made an irrevocable election under section 410(d) of the Internal Revenue Code of 1986 if— \n “(1)  the plan was established before  January 1, 2014 ; \n \n “(2)  the plan falls within the definition of a CSEC plan; \n \n “(3)  the plan sponsor does not make an election under section 210(f)(3)(A) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1060(f)(3)(A) ] and section 414(y)(3)(A) of the Internal Revenue Code of 1986, as added by this Act; and \n \n “(4)  the plan, plan sponsor, administrator, or fiduciary remits one or more premium payments for the plan to the Pension Benefit Guaranty Corporation for a plan year beginning after  December 31, 2013 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by  section 9203(a)(2) of Pub. L. 99–509  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 9204 of Pub. L. 99–509 , set out as a note under  section 623 of Title 29 , Labor.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'A plan satisfies the requirements of this paragraph if an employee’s rights in his accrued benefit derived from his own contributions are nonforfeitable.\nIn the case of a defined benefit plan, a plan satisfies the requirements of this paragraph if it satisfies the requirements of clause (ii) or (iii).\nA plan satisfies the requirements of this clause if an employee who has completed at least 5 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions.\nA plan satisfies the requirements of this clause if an employee has a nonforfeitable right to a percentage of the employee’s accrued benefit derived from employer contributions determined under the following table: \n \n \n \n \n \n \n \u2001\u2001\u2001Years of service: The nonforfeitable percentage is: \n \n \n 3 20\u202f\u202f \n 4 40\u202f\u202f \n 5 60\u202f\u202f \n 6 80\u202f\u202f \n 7 or more 100.\nIn the case of a defined contribution plan, a plan satisfies the requirements of this paragraph if it satisfies the requirements of clause (ii) or (iii).\nA plan satisfies the requirements of this clause if an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions.\nA plan satisfies the requirements of this clause if an employee has a nonforfeitable right to a percentage of the employee’s accrued benefit derived from employer contributions determined under the following table: \n \n \n \n \n \n \n \u2001\u2001\u2001Years of service: The nonforfeitable percentage is: \n \n \n 2 20\u202f\u202f \n 3 40\u202f\u202f \n 4 60\u202f\u202f \n 5 80\u202f\u202f \n 6 or more 100.\nA right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because the plan provides that it is not payable if the participant dies (except in the case of a survivor annuity which is payable as provided in section 401(a)(11)).\nA right to an accrued benefit derived from employer contributions shall not be treated as forfeitable solely because plan amendments may be given retroactive application as provided in section 412(d)(2).\nA right to an accrued benefit derived from employer contributions under a multiemployer plan shall not be treated as forfeitable solely because the plan provides that benefits accrued as a result of service with the participant’s employer before the employer had an obligation to contribute under the plan may not be payable if the employer ceases contributions to the multi\xademployer plan.\nA matching contribution (within the meaning of section 401(m)) shall not be treated as forfeitable merely because such contribution is forfeitable if the contribution to which the matching contribution relates is treated as an excess contribution under section 401(k)(8)(B), an excess deferral under section 402(g)(2)(A), a permissible withdrawal under section 414(w), or an excess aggregate contribution under section 401(m)(6)(B).\nFor purposes of this subsection, except as provided in subparagraph (C), the term “year of service” means a calendar year, plan year, or other 12-consecutive month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has completed 1,000 hours of service.\nFor purposes of this subsection, the term “hours of service” has the meaning provided by section 410(a)(3)(C).\nIn the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term “year of service” shall be such period as may be determined under regulations prescribed by the Secretary of Labor.\nFor purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as 1,000 hours of service. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph.\nFor purposes of this paragraph, the term “1-year break in service” means a calendar year, plan year, or other 12-consecutive-month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) during which the participant has not completed more than 500 hours of service.\nFor purposes of paragraph (4), in the case of any employee who has any 1-year break in service, years of service before such break shall not be required to be taken into account until he has completed a year of service after his return.\nFor purposes of paragraph (4), in the case of any participant in a defined contribution plan, or an insured defined benefit plan which satisfies the requirements of subsection (b)(1)(F), who has 5 consecutive 1-year breaks in service, years of service after such 5-year period shall not be required to be taken into account for purposes of determining the nonforfeitable percentage of his accrued benefit derived from employer contributions which accrued before such 5-year period.\nIf any years of service are not required to be taken into account by reason of a period of breaks in service to which clause (i) applies, such years of service shall not be taken into account in applying clause (i) to a subsequent period of breaks in service.\nFor purposes of clause (i), the term “nonvested participant” means a participant who does not have any nonforfeitable right under the plan to an accrued benefit derived from employer contributions.\nFor purposes of this subparagraph, the term “year” means the period used in computations pursuant to paragraph (5).\nThe accrued benefit of an employee shall not be less than the amount determined under subsection (c)(2)(B) with respect to the employee’s accumulated contributions.\nA plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of paragraph (2) if the nonforfeitable percentage of the accrued benefit derived from employer contributions (determined as of the later of the date such amendment is adopted, or the date such amendment becomes effective) of any employee who is a participant in the plan is less than such nonforfeitable percentage computed under the plan without regard to such amendment.\nA plan amendment changing any vesting schedule under the plan shall be treated as not satisfying the requirements of paragraph (2) unless each participant having not less than 3 years of service is permitted to elect, within a reasonable period after the adoption of such amendment, to have his nonforfeitable percentage computed under the plan without regard to such amendment.\nIf the present value of any nonforfeitable accrued benefit exceeds $7,000, a plan meets the requirements of this paragraph only if such plan provides that such benefit may not be immediately distributed without the consent of the participant.\nFor purposes of subparagraph (A), the present value shall be calculated in accordance with section 417(e)(3).\nThis paragraph shall not apply to any distribution of dividends to which section 404(k) applies.\nA plan shall not fail to meet the requirements of this paragraph if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term “rollover contributions” means any rollover contribution under sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).\nIn the case of an applicable defined benefit plan, such plan shall be treated as meeting the requirements of subsection (a)(2) only if an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions.\nThe term “applicable defined benefit plan” means a defined benefit plan under which the accrued benefit (or any portion thereof) is calculated as the balance of a hypothetical account maintained for the participant or as an accumulated percentage of the participant’s final average compensation.\nThe Secretary shall issue regulations which include in the definition of an applicable defined benefit plan any defined benefit plan (or any portion of such a plan) which has an effect similar to an applicable defined benefit plan.\nA defined benefits plan satisfies the requirements of this paragraph if the accrued benefit to which any participant is entitled upon his separation from the service is not less than a fraction of the annual benefit commencing at normal retirement age to which he would be entitled under the plan as in effect on the date of his separation if he continued to earn annually until normal retirement age the same rate of compensation upon which his normal retirement benefit would be computed under the plan, determined as if he had attained normal retirement age on the date on which any such determination is made (but taking into account no more than the 10 years of service immediately preceding his separation from service). Such fraction shall be a fraction, not exceeding 1, the numerator of which is the total number of his years of participation in the plan (as of the date of his separation from the service) and the denominator of which is the total number of years he would have participated in the plan if he separated from the service at the normal retirement age. For purposes of this subparagraph, social security benefits and all other relevant factors used to compute benefits shall be treated as remaining constant as of the current year for all years after such current year.\nNotwithstanding subparagraphs (A), (B), and (C) of this paragraph, a plan shall not be treated as not satisfying the requirements of this paragraph solely because the accrual of benefits under the plan does not become effective until the employee has two continuous years of service. For purposes of this subparagraph, the term “years of service” has the meaning provided by section 410(a)(3)(A).\nNotwithstanding the preceding subparagraphs, a defined benefit plan shall be treated as not satisfying the requirements of this paragraph if, under the plan, an employee’s benefit accrual is ceased, or the rate of an employee’s benefit accrual is reduced, because of the attainment of any age.\nA plan shall not be treated as failing to meet the requirements of this subparagraph solely because the plan imposes (without regard to age) a limitation on the amount of benefits that the plan provides or a limitation on the number of years of service or years of participation which are taken into account for purposes of determining benefit accrual under the plan.\nA plan shall not be treated as failing to meet the requirements of clause (i) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals.\nThe Secretary shall provide by regulation for the coordination of the requirements of this subparagraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor of highly compensated employees.\nA defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee’s account are not ceased, and the rate at which amounts are allocated to the employee’s account is not reduced, because of the attainment of any age.\nThe Secretary shall provide by regulation for the application of the requirements of this paragraph to target benefit plans.\nThe Secretary may provide by regulation for the coordination of the requirements of this paragraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor of highly compensated employees.\nFor purposes of determining an employee’s accrued benefit, the term “year of participation” means a period of service (beginning at the earliest date on which the employee is a participant in the plan and which is included in a period of service required to be taken into account under section 410(a)(5), determined without regard to section 410(a)(5)(E)) as determined under regulations prescribed by the Secretary of Labor which provide for the calculation of such period on any reasonable and consistent basis.\nFor purposes of this paragraph, except as provided in subparagraph (C), in the case of any employee whose customary employment is less than full time, the calculation of such employee’s service on any basis which provides less than a ratable portion of the accrued benefit to which he would be entitled under the plan if his customary employment were full time shall not be treated as made on a reasonable and consistent basis.\nFor purposes of this paragraph, in the case of any employee whose service is less than 1,000 hours during any calendar year, plan year or other 12-consecutive month period designated by the plan (and not prohibited under regulations prescribed by the Secretary of Labor) the calculation of his period of service shall not be treated as not made on a reasonable and consistent basis solely because such service is not taken into account.\nIn the case of any seasonal industry where the customary period of employment is less than 1,000 hours during a calendar year, the term “year of participation” shall be such period as determined under regulations prescribed by the Secretary of Labor.\nFor purposes of this subsection, in the case of any maritime industry, 125 days of service shall be treated as a year of participation. The Secretary of Labor may prescribe regulations to carry out the purposes of this subparagraph.\nA plan shall not be treated as failing to meet the requirements of paragraph (1)(H)(i) if a participant’s accrued benefit, as determined as of any date under the terms of the plan, would be equal to or greater than that of any similarly situated, younger individual who is or could be a participant.\nFor purposes of this subparagraph, a participant is similarly situated to any other individual if such participant is identical to such other individual in every respect (including period of service, compensation, position, date of hire, work history, and any other respect) except for age.\nIn determining the accrued benefit as of any date for purposes of this subparagraph, the subsidized portion of any early retirement benefit or retirement-type subsidy shall be disregarded.\nFor purposes of this subparagraph, the accrued benefit may, under the terms of the plan, be expressed as an annuity payable at normal retirement age, the balance of a hypothetical account, or the current value of the accumulated percentage of the employee’s final average compensation.\nAn applicable defined benefit plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the terms of the plan provide that any interest credit (or an equivalent amount) for any plan year shall be at a rate which is not greater than a market rate of return. A plan shall not be treated as failing to meet the requirements of this subclause merely because the plan provides for a reasonable minimum guaranteed rate of return or for a rate of return that is equal to the greater of a fixed or variable rate of return.\nAn applicable defined benefit plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the plan provides that an interest credit (or equivalent amount) of less than zero shall in no event result in the account balance or similar amount being less than the aggregate amount of contributions credited to the account.\nThe Secretary may provide by regulation for rules governing the calculation of a market rate of return for purposes of subclause (I) and for permissible methods of crediting interest to the account (including fixed or variable interest rates) resulting in effective rates of return meeting the requirements of subclause (I).\nIf, after  June 29, 2005 , an applicable plan amendment is adopted, the plan shall be treated as failing to meet the requirements of paragraph (1)(H) unless the requirements of clause (iii) are met with respect to each individual who was a participant in the plan immediately before the adoption of the amendment.\nFor purposes of clause (iii)(I), the plan shall credit the accumulation account or similar amount\u202f 1 1 \u202fSo in original. Probably should be “similar account”.  with the amount of any early retirement benefit or retirement-type subsidy for the plan year in which the participant retires if, as of such time, the participant has met the age, years of service, and other requirements under the plan for entitlement to such benefit or subsidy.\nThe term “applicable plan amendment” means an amendment to a defined benefit plan which has the effect of converting the plan to an applicable defined benefit plan.\nIf the benefits of 2 or more defined benefit plans established or maintained by an employer are coordinated in such a manner as to have the effect of the adoption of an amendment described in subclause (I), the sponsor of the defined benefit plan or plans providing for such coordination shall be treated as having adopted such a plan amendment as of the date such coordination begins.\nThe Secretary shall issue regulations to prevent the avoidance of the purposes of this subparagraph through the use of 2 or more plan amendments rather than a single amendment.\nFor purposes of this subparagraph, the term “applicable defined benefit plan” has the meaning given such term by section 411(a)(13).\nA plan shall not be treated as failing to meet the requirements of paragraph (1)(H)(i) solely because the plan provides offsets against benefits under the plan to the extent such offsets are otherwise allowable in applying the requirements of section 401(a).\nA plan shall not be treated as failing to meet the requirements of paragraph (1)(H) solely because the plan provides a disparity in contributions or benefits with respect to which the requirements of section 401( l ) are met.\nA plan shall not be treated as failing to meet the requirements of paragraph (1)(H) solely because the plan provides for indexing of accrued benefits under the plan.\nExcept in the case of any benefit provided in the form of a variable annuity, clause (i) shall not apply with respect to any indexing which results in an accrued benefit less than the accrued benefit determined without regard to such indexing.\nFor purposes of this subparagraph, the term “indexing” means, in connection with an accrued benefit, the periodic adjustment of the accrued benefit by means of the application of a recognized investment index or methodology.\nFor purposes of this paragraph, the terms “early retirement benefit” and “retirement-type subsidy” have the meaning given such terms in subsection (d)(6)(B)(i).\nFor purposes of this paragraph, any reference to the accrued benefit shall be a reference to such benefit accrued to date.\nFor purposes of subparagraphs (A), (B), and (C) of paragraph (1), in the case of an applicable defined benefit plan (as defined in subsection (a)(13)(C)) which provides variable interest crediting rates, the interest crediting rate which is treated as in effect and as the projected interest crediting rate shall be a reasonable projection of such variable interest crediting rate, not to exceed 6 percent.\nFor purposes of this section, an employee’s accrued benefit derived from employer contributions as of any applicable date is the excess, if any, of the accrued benefit for such employee as of such applicable date over the accrued benefit derived from contributions made by such employee as of such date.\nIn the case of a defined benefit plan, the accrued benefit derived from contributions made by an employee as of any applicable date is the amount equal to the employee’s accumulated contributions expressed as an annual benefit commencing at normal retirement age, using an interest rate which would be used under the plan under section 417(e)(3) (as of the determination date).\nThe Secretary is authorized to adjust by regulation the conversion factor described in subparagraph (B) from time to time as he may deem necessary. No such adjustment shall be effective for a plan year beginning before the expiration of 1 year after such adjustment is determined and published.\nFor purposes of this section, in the case of any defined benefit plan, if an employee’s accrued benefit is to be determined as an amount other than an annual benefit commencing at normal retirement age, or if the accrued benefit derived from contributions made by an employee is to be determined with respect to a benefit other than an annual benefit in the form of a single life annuity (without ancillary benefits) commencing at normal retirement age, the employee’s accrued benefit, or the accrued benefits derived from contributions made by an employee, as the case may be, shall be the actuarial equivalent of such benefit or amount determined under paragraph (1) or (2).\nSubsection (a) shall not apply to benefits which may not be provided for designated employees in the event of early termination of the plan under provisions of the plan adopted pursuant to regulations prescribed by the Secretary to preclude the discrimination prohibited by section 401(a)(4).\nIn the case of a defined benefit plan which permits voluntary employee contributions, the portion of an employee’s accrued benefit derived from such contributions shall be treated as an accrued benefit derived from employee contributions under a plan other than a defined benefit plan.\nA plan shall be treated as not satisfying the requirements of this section if the accrued benefit of a participant is decreased by an amendment of the plan, other than an amendment described in section 412(d)(2), or section 4281 of the Employee Retirement Income Security Act of 1974.\nClause (i) shall apply to plan mergers and other transactions having the effect of a direct transfer, including consolidations of benefits attributable to different employers within a multiple employer plan.\nNotwithstanding subsection (a)(8), an applicable plan shall not be treated as failing to meet any requirement of this subchapter, or as failing to have a uniform normal retirement age for purposes of this subchapter, solely because the plan provides for a normal retirement age described in paragraph (2).\nSubject to subparagraph (C), if, after  December 8, 2014 , an applicable plan is amended to expand the application of the normal retirement age described in subparagraph (A) to additional participants or to employees of additional employers maintaining the plan, such plan shall also be treated as an applicable plan with respect to such participants or employees.\nSection 4281 of the Employee Retirement Income Security Act of 1974, referred to in subsecs. (a)(3)(F)(i), (ii) and (d)(6)(A), is classified to  section 1441 of Title 29 , Labor.\nSection 4203 of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a)(4)(G)(i)(I), is classified to  section 1383 of Title 29 , Labor.\nSection 4205(b)(2)(A)(i) of such Act, referred to in subsec. (a)(4)(G)(i)(II), is classified to  section 1385(b)(2)(A)(i) of Title 29 , Labor.\nSection 4048 of such Act, referred to in subsec. (a)(4)(G)(ii), is classified to  section 1348 of Title 29 , Labor.\nThe Social Security Act, referred to in subsecs. (a)(9) and (b)(1)(G), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Social Security Act is classified generally to subchapter II (§\u202f401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2022—Subsec. (a)(11)(A).  Pub. L. 117–328, §\u202f304(a) , substituted “$7,000” for “$5,000”.\nSubsec. (b)(6).  Pub. L. 117–328, §\u202f348(a) , added par. (6).\n2018—Subsec. (a)(3)(F)(i).  Pub. L. 115–141, §\u202f401(b)(19) , struck out “under section 418D or” before “under section 4281”.\nSubsec. (a)(4)(A).  Pub. L. 115–141, §\u202f401(a)(82) , substituted semicolon for comma at end.\n2014—Subsec. (f).  Pub. L. 113–235  added subsec. (f).\n2008—Subsec. (a)(3)(C).  Pub. L. 110–458, §\u202f101(d)(2)(D)(i) , substituted “section 412(d)(2)” for “section 412(c)(2)”.\nSubsec. (a)(3)(G).  Pub. L. 110–458, §\u202f109(b)(2) , substituted “permissible withdrawal” for “erroneous automatic contribution” in heading and “a permissible withdrawal” for “an erroneous automatic contribution” in text.\nSubsec. (a)(13)(A).  Pub. L. 110–458, §\u202f107(b)(2) , substituted “subparagraph (B)” for “paragraph (2)” in cl. (i) and “subparagraph (C)” for paragraph (3) in concluding provisions, added cl. (ii), and struck out former cl. (ii) which read as follows: “the requirements of subsection (c) or section 417(e) with respect to contributions other than employee contributions,”.\nSubsec. (b)(5)(A)(iii).  Pub. L. 110–458, §\u202f107(b)(1)(A) , substituted “subparagraph” for “clause”.\nSubsec. (b)(5)(B)(i)(II).  Pub. L. 110–458, §\u202f107(b)(3) , amended subcl. (II) generally. Prior to amendment, text read as follows: “An interest credit (or an equivalent amount) of less than zero shall in no event result in the account balance or similar amount being less than the aggregate amount of contributions credited to the account.”\nSubsec. (b)(5)(C).  Pub. L. 110–458, §\u202f107(b)(1)(B) , inserted “otherwise” before “allowable”.\nSubsec. (d)(6)(A).  Pub. L. 110–458, §\u202f101(d)(2)(D)(ii) , substituted “section 412(d)(2)” for “section 412(e)(2)”.\n2006—Subsec. (a)(2).  Pub. L. 109–280, §\u202f904(a)(1) , reenacted heading without change and amended text of par. (2) generally, substituting provisions relating to vesting requirements under defined benefit plans and defined contribution plans for provisions relating to 5-year vesting and 3 to 7 year vesting under all plans.\nSubsec. (a)(3)(C).  Pub. L. 109–280, §\u202f114(b)(1) , substituted “412(c)(2)” for “412(c)(8)”.\nSubsec. (a)(3)(G).  Pub. L. 109–280, §\u202f902(d)(2)(A) , (B), inserted “or erroneous automatic contribution” after “or contribution” in heading and “an erroneous automatic contribution under section 414(w),” after “402(g)(2)(A),” in text.\nSubsec. (a)(12).  Pub. L. 109–280, §\u202f904(a)(2) , struck out par. (12), which related to faster vesting for matching contributions by employers.\nSubsec. (a)(13).  Pub. L. 109–280, §\u202f701(b)(2) , added par. (13).\nSubsec. (b)(1)(F).  Pub. L. 109–280, §\u202f114(b)(2) , substituted “subparagraphs (B) and (C) of section 412(e)(3)” for “paragraphs (2) and (3) of section 412(i)” in cl. (ii) and “subparagraphs (D), (E), and (F) of section 412(e)(3)” for “paragraphs (4), (5), and (6) of section 412(i)” in concluding provisions.\nSubsec. (b)(5).  Pub. L. 109–280, §\u202f701(b)(1) , added par. (5).\nSubsec. (d)(6)(A).  Pub. L. 109–280, §\u202f114(b)(3) , substituted “412(e)(2)” for “412(c)(8)”.\n2004—Subsec. (a)(12)(B).  Pub. L. 108–311  substituted “6 or more” for “6” in table.\n2001—Subsec. (a)(2).  Pub. L. 107–16, §\u202f633(a)(1) , substituted “Except as provided in paragraph (12), a plan” for “A plan” in introductory provisions.\nSubsec. (a)(11)(D).  Pub. L. 107–16, §\u202f648(a)(1) , added subpar. (D).\nSubsec. (a)(12).  Pub. L. 107–16, §\u202f633(a)(2) , added par. (12).\nSubsec. (d)(6)(B).  Pub. L. 107–16, §\u202f645(b)(1) , inserted after second sentence “The Secretary shall by regulations provide that this subparagraph shall not apply to any plan amendment which reduces or eliminates benefits or subsidies which create significant burdens or complexities for the plan and plan participants, unless such amendment adversely affects the rights of any participant in a more than de minimis manner.”\nSubsec. (d)(6)(D), (E).  Pub. L. 107–16, §\u202f645(a)(1) , added subpars. (D) and (E).\n1997—Subsec. (a)(7)(B)(i).  Pub. L. 105–34, §\u202f1071(a)(2)(A) , substituted “the dollar limit under section 411(a)(11)(A)” for “$3,500”.\nSubsec. (a)(11)(A).  Pub. L. 105–34, §\u202f1071(a)(1) , substituted “$5,000” for “$3,500”.\n1996—Subsec. (a)(2).  Pub. L. 104–188  substituted “subparagraph (A) or (B)” for “subparagraph (A), (B), or (C)” in introductory provisions and struck out subpar. (C) which read as follows: “ Multiemployer plans .—A plan satisfies the requirements of this subparagraph if—\n“(i) the plan is a multiemployer plan (within the meaning of section 414(f)), and\n“(ii) under the plan—\n“(I) an employee who is covered pursuant to a collective bargaining agreement described in section 414(f)(1)(B) and who has completed at least 10 years of service has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from employer contributions, and\n“(II) the requirements of subparagraph (A) or (B) are met with respect to employees not described in subclause (I).”\n1994—Subsec. (a)(11)(B).  Pub. L. 103–465  reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows:\n“(i)  In general .—For purposes of subparagraph (A), the present value shall be calculated—\n“(I) by using an interest rate no greater than the applicable interest rate if the vested accrued benefit (using such rate) is not in excess of $25,000, and\n“(II) by using an interest rate no greater than 120 percent of the applicable interest rate if the vested accrued benefit exceeds $25,000 (as determined under subclause (I)).\nIn no event shall the present value determined under subclause (II) be less than $25,000.\n“(ii)  Applicable interest rate .—For purposes of clause (i), the term ‘applicable interest rate’ means the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”\n1992—Subsec. (d)(3).  Pub. L. 102–318  inserted at end “For purposes of this paragraph, in the case of the complete discontinuance of contributions under a profit-sharing or stock bonus plan, such plan shall be treated as having terminated on the day on which the plan administrator notifies the Secretary (in accordance with regulations) of the discontinuance.”\n1989—Subsec. (a)(3)(G).  Pub. L. 101–239, §\u202f7861(a)(5)(A) , added subpar. (G).\nSubsec. (a)(4)(A).  Pub. L. 101–239, §\u202f7861(a)(6)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “years of service before age 18, except that in the case of a plan which does not satisfy subparagraph (A) or (B) of paragraph (2), the plan may not disregard any such year of service during which the employee was a participant;”.\nSubsec. (a)(7)(D).  Pub. L. 101–239, §\u202f7881(m)(1)(D) , added subpar. (D).\nSubsec. (a)(8)(B).  Pub. L. 101–239, §\u202f7871(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the latest of—\n“(i) the time a plan participant attains age 65,\n“(ii) in the case of a plan participant who commences participation in the plan within 5 years before attaining normal retirement age under the plan, the 5th anniversary of the time the plan participant commences participation in the plan, or\n“(iii) in the case of a plan participant not described in clause (ii), the 10th anniversary of the time the plan participant commences participation in the plan.”\nSubsec. (b)(2)(B).  Pub. L. 101–239, §\u202f7871(a)(1) , redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “ Disregard of subsidized portion of early retirement benefit .—A plan shall not be treated as failing to meet the requirements of subparagraph (A) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals.”\nSubsec. (b)(2)(C), (D).  Pub. L. 101–239, §\u202f7871(a)(1) , (2), redesignated subpar. (D) as (C) and substituted “this paragraph” for “this subparagraph”. Former subpar. (C) redesignated (B).\nSubsec. (c)(2)(B).  Pub. L. 101–239, §\u202f7881(m)(1)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows:\n“(i)  In general .—In the case of a defined benefit plan providing an annual benefit in the form of a single life annuity (without ancillary benefits) commencing at normal retirement age, the accrued benefit derived from contributions made by an employee as of any applicable date is the annual benefit equal to the employee’s accumulated contributions multiplied by the appropriate conversion factor.\n“(ii)  Appropriate conversion factor .—For purposes of clause (i), the term ‘appropriate conversion factor’ means the factor necessary to convert an amount equal to the accumulated contributions to a single life annuity (without ancillary benefits) commencing at normal retirement age and shall be 10 percent for a normal retirement age of 65 years. For other normal retirement ages the conversion factor shall be determined in accordance with regulations prescribed by the Secretary.”\nSubsec. (c)(2)(C)(iii).  Pub. L. 101–239, §\u202f7881(m)(1)(A) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “interest on the sum of the amounts determined under clauses (i) and (ii) compounded annually at the rate of 120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year) from the beginning of the first plan year to which subsection (a)(2) applies (by reason of the applicable effective date) to the date upon which the employee would attain normal retirement age.”\nSubsec. (c)(2)(E).  Pub. L. 101–239, §\u202f7881(m)(1)(C) , struck out subpar. (E) which read as follows: “ Limitation .—The accrued benefit derived from employee contributions shall not exceed the greater of—\n“(i) the employee’s accrued benefit under the plan, or\n“(ii) the accrued benefit derived from employee contributions determined as though the amounts calculated under clauses (ii) and (iii) of subparagraph (C) were zero.”\n1988—Subsec. (a)(11)(A).  Pub. L. 100–647  substituted “nonforfeitable” for “vested”.\n1987—Subsec. (c)(2)(C)(iii).  Pub. L. 100–203, §\u202f9346(b)(1) , substituted “120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year)” for “5 percent per annum”.\nSubsec. (c)(2)(D).  Pub. L. 100–203, §\u202f9346(b)(2) , struck out “,\u2000the rate of interest described in clause (iii) of subparagraph (C), or both” before “from time to time” in first sentence and struck out second sentence which read as follows: “The rate of interest described in clause (iii) of subparagraph (C), or both, from time to time as he may deem necessary. The rate of interest shall bear the relationship to 5 percent which the Secretary determines to be comparable to the relationship which the long-term money rates and investment yields for the last period of 10 calendar years ending at least 12 months before the beginning of the plan year bear to the long-term money rates and investment yields for the 10-calendar year period 1964 through 1973.”\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1898(d)(1)(A)(ii) , inserted reference to par. (11) in introductory text.\nPub. L. 99–509, §\u202f9202(b)(3) , substituted “subsection (b)(3), and also satisfies, in the case of a defined benefit plan, the requirements of subsection (b)(1) and, in the case of a defined contribution plan, the requirements of subsection (b)(2)” for “paragraph (2) of subsection (b), and in the case of a defined benefit plan, also satisfies the requirements of paragraph (1) of subsection (b)” in first sentence.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f1113(a) , amended par. (2) generally, substituting provisions covering 5-year vesting, 3 to 7 year vesting, and multiemployer plans, for former provisions which had covered 10-year vesting, 5- to 15-year vesting, and the “rule of 45”.\nSubsec. (a)(3)(D)(ii).  Pub. L. 99–514, §\u202f1898(a)(4)(A)(i) , substituted last sentence for former last sentence which read as follows: “In the case of a defined contribution plan, the plan provision required under this clause may provide that such repayment must be made before the participant has any one-year break in service commencing after the withdrawal.”\nSubsec. (a)(7)(C).  Pub. L. 99–514, §\u202f1898(a)(4)(A)(ii) , substituted last sentence for former last sentence which read as follows: “In the case of a defined contribution plan, the plan provision required under this subparagraph may provide that such repayment must be made before the participant has 5 consecutive 1-year breaks in service commencing after such withdrawal.”\nSubsec. (a)(8)(B).  Pub. L. 99–509, §\u202f9203(b)(2) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the latter of—\n“(i) the time a plan participant attains age 65, or\n“(ii) the 10th anniversary of the time a plan participant commenced participation in the plan.”\nSubsec. (a)(10)(B).  Pub. L. 99–514, §\u202f1113(d)(B) , substituted “3 years” for “5 years”.\nSubsec. (a)(11)(A).  Pub. L. 99–514, §\u202f1898(d)(1)(A)(i) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If the present value of any accrued benefit exceeds $3,500, such benefit shall not be treated as nonforfeitable if the plan provides that the present value of such benefit could be immediately distributed without the consent of the participant.”\nSubsec. (a)(11)(B).  Pub. L. 99–514, §\u202f1139(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of subparagraph (A), the present value shall be calculated by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”\nSubsec. (a)(11)(C).  Pub. L. 99–514, §\u202f1898(d)(2)(A) , added subpar. (C).\nSubsec. (b)(1).  Pub. L. 99–509, §\u202f9202(b)(1) , substituted “Defined benefit plans” for “General rules” in heading and added subpar. (H).\nSubsec. (b)(2) to (4).  Pub. L. 99–509, §\u202f9202(b)(2) , added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.\nSubsec. (d)(1)(A), (B).  Pub. L. 99–514, §\u202f1114(b)(10) , substituted “highly compensated employees (within the meaning of section 414(q))” for “officers, shareholders, or highly compensated”.\nSubsec. (d)(4).  Pub. L. 99–514, §\u202f1113(b) , repealed par. (4) which provided that a class year plan satisfied the requirements of subsec. (a)(2) if it provided that 100 percent of each employee’s right to or derived from the contributions of the employer on his behalf with respect to any plan year were nonforfeitable not later than the end of the 5th plan year following the plan year for which such contributions were made.\nPub. L. 99–514, §\u202f1898(a)(1)(A) , substituted “Class-year” for “Class year” in heading and amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The requirements of subsection (a)(2) shall be deemed to be satisfied in the case of a class year plan if such plan provides that 100 percent of each employee’s right to or derived from the contributions of the employer on his behalf with respect to any plan year are nonforfeitable not later than the end of the 5th plan year following the plan year for which such contributions were made. For purposes of this section, the term ‘class year plan’ means a profit-sharing, stock bonus, or money purchase plan which provides for the separate nonforfeitability of employees’ rights to or derived from the contributions for each plan year.”\nSubsec. (d)(6)(C).  Pub. L. 99–514, §\u202f1898(f)(1)(A) , added subpar. (C).\n1984—Subsec. (a)(4)(A).  Pub. L. 98–397, §\u202f202(b) , substituted “18” for “22”.\nSubsec. (a)(6)(C).  Pub. L. 98–397, §\u202f202(c) , substituted “5 consecutive 1-year breaks” for “1-year break”, in heading, and in text substituted “5 consecutive 1-year breaks in service” for “any 1-year break in service” and “such 5-year period” for “such break” in two places.\nSubsec. (a)(6)(D).  Pub. L. 98–397, §\u202f202(d)(2) , amended subpar. (D) generally.\nSubsec. (a)(6)(E).  Pub. L. 98–397, §\u202f202(e)(2) , added subpar. (E).\nSubsec. (a)(7)(B)(i).  Pub. L. 98–397, §\u202f205(b) , substituted “$3,500” for “$1,750”.\nSubsec. (a)(7)(C).  Pub. L. 98–397, §\u202f202(f) , substituted “5 consecutive 1-year breaks in service” for “any one-year break in service”.\nSubsec. (a)(11).  Pub. L. 98–397, §\u202f205(a) , added par. (11).\nSubsec. (b)(3)(A).  Pub. L. 98–397, §\u202f202(e)(3) , inserted “,\u2000determined without regard to section 410(a)(5)(E)”.\nSubsec. (d)(6).  Pub. L. 98–397, §\u202f301(a)(1) , designated existing provisions as subpar. (A) and added subpar. (B).\n1980—Subsec. (a).  Pub. L. 96–364, §\u202f206(1) –(4), in par. (3) added subpars. (E) and (F), and in par. (4) added subpar. (G).\nSubsec. (d)(6).  Pub. L. 96–364, §\u202f206(5) , inserted reference to section 4281 of the Employee Retirement Income Security Act of 1974.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1901(a)(62)(A)–(C), 1906(b)(13)(A), substituted “paragraph (8)” for “subsection (a)(8)” in provisions preceding par. (1), substituted references to  Sept. 2, 1974 , for references to the date of enactment of the Employee Retirement Income Security Act of 1974 in par. (3)(D)(iii), struck out “or his delegate” after “Secretary” in pars. (4)(C) and (7)(B), and substituted “(B)” for “(b)” in heading of par. (7)(C).\nSubsec. (b)(1)(D)(i).  Pub. L. 94–455, §\u202f1901(a)(62)(D) , substituted reference to  Sept. 2, 1974 , for reference to the date of enactment of the Employee Retirement Income Security Act of 1974.\nSubsecs. (c)(2)(B)(ii), (D), (d)(2), (3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(1)(C).  Pub. L. 94–455, §\u202f1901(a)(62)(D) , substituted reference to  Sept. 2, 1974 , for reference to the date of enactment of the Employee Retirement Income Security Act of 1974.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1901(a)(62)(E) , substituted reference to  Sept. 1, 1974 , for reference to the date before the date of enactment of the Employee Retirement Income Security Act of 1974.\nAmendment by  section 304(a) of Pub. L. 117–328  applicable to distributions made after  Dec. 31, 2023 , see  section 304(b) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title III, §\u202f348(c) ,  Dec. 29, 2022 ,  136 Stat. 5385 , provided that:  “The amendments made by this section [amending this section and  section 1054 of Title 29 , Labor] shall apply with respect to plan years beginning after the date of enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 113–235, div. P, §\u202f2(c) ,  Dec. 16, 2014 ,  128 Stat. 2829 , provided that:  “The amendments made by this section [amending this section and  section 1054 of Title 29 , Labor] shall apply to all periods before, on, and after the date of enactment of this Act [ Dec. 16, 2014 ].”\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nAmendment by  section 114(b) of Pub. L. 109–280  applicable to plan years beginning after 2007, see  section 114(g)(1) of Pub. L. 109–280 , as added by  Pub. L. 110–458 , set out as a note under  section 401 of this title .\nPub. L. 109–280, title VII, §\u202f701(e) ,  Aug. 17, 2006 ,  120 Stat. 991 , as amended by  Pub. L. 110–458, title I, §\u202f107(c)(2) ,  Dec. 23, 2008 ,  122 Stat. 5107 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 623, 1053, and 1054 of Title 29, Labor] shall apply to periods beginning on or after  June 29, 2005 . \n \n “(2)   Present value of accrued benefit .— The amendments made by subsections (a)(2) and (b)(2) [amending this section and  section 1053 of Title 29 ] shall apply to distributions made after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(3)   Vesting and interest credit requirements .— In the case of a plan in existence on  June 29, 2005 , the requirements of clause (i) of section 411(b)(5)(B) of the Internal Revenue Code of 1986, clause (i) of section 204(b)(5)(B) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(b)(5)(B) ], and clause (i) of section 4(i)(10)(B) of the Age Discrimination in Employment Act of 1967 [ 29 U.S.C. 623(i)(10)(B) ] (as added by this Act) and the requirements of 203(f)(2) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1053(f)(2) ] and section 411(a)(13)(B) of the Internal Revenue Code of 1986 (as so added) shall, for purposes of applying the amendments made by subsections (a) and (b) [amending this section and sections 1053 and 1054 of Title 29], apply to years beginning after  December 31, 2007 , unless the plan sponsor elects the application of such requirements for any period on or after  June 29, 2005 , and before the first year beginning after  December 31, 2007 . \n \n “(4)   Special rule for collectively bargained plans .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified on or before the date of the enactment of this Act [ Aug. 17, 2006 ], the requirements described in paragraph (3) shall, for purposes of applying the amendments made by subsections (a) and (b) [amending this section and sections 1053 and 1054 of Title 29], not apply to plan years beginning before the earlier of— “(A)  the later of— “(i)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of enactment), or \n \n “(ii)   January 1, 2008 , or \n \n \n “(B)   January 1, 2010 . \n \n \n “(5)   Conversions .— The requirements of clause (ii) of section 411(b)(5)(B) of the Internal Revenue Code of 1986, clause (ii) of section 204(b)(5)(B) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(b)(5)(B) ], and clause (ii) of section 4(i)(10)(B) of the Age Discrimination in Employment Act of 1967 [ 29 U.S.C. 623(i)(10)(B) ] (as added by this Act), shall apply to plan amendments adopted on or after, and taking effect on or after,  June 29, 2005 , except that the plan sponsor may elect to have such amendments apply to plan amendments adopted before, and taking effect on or after, such date. \n \n “(6)   Special rule for vesting requirements .— The requirements of section 203(f)(2) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1053(f)(2) ] and section 411(a)(13)(B) of the Internal Revenue Code of 1986 (as added by this Act)— “(A)  shall not apply to a participant who does not have an hour of service after the effective date of such requirements (as otherwise determined under this subsection); and \n \n “(B)  in the case of a plan other than a plan described in paragraph (3) or (4), shall apply to plan years ending on or after  June 29, 2005 .”\n[ Pub. L. 110–458, §\u202f107(c)(2)(B)(i) , which directed insertion of “the earlier of” after “before” in introductory provisions of  section 701(e)(4) of Pub. L. 109–280 , set out above, was executed by making the insertion after the second instance of “before” to reflect the probable intent of Congress.]\nAmendment by section 902(d)(2)(A), (B) of  Pub. L. 109–280  applicable to plan years beginning after  Dec. 31, 2007 , see  section 902(g) of Pub. L. 109–280 , set out as a note under  section 401 of this title .\nPub. L. 109–280, title IX, §\u202f904(c) ,  Aug. 17, 2006 ,  120 Stat. 1050 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (4), the amendments made by this section [amending this section and  section 1053 of Title 29 , Labor] shall apply to contributions for plan years beginning after  December 31, 2006 . \n \n “(2)   Collective bargaining agreements .— In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act [ Aug. 17, 2006 ], the amendments made by this section shall not apply to contributions on behalf of employees covered by any such agreement for plan years beginning before the earlier of— “(A)  the later of— “(i)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of the enactment); or \n \n “(ii)   January 1, 2007 ; or \n \n \n “(B)   January 1, 2009 . \n \n \n “(3)   Service required .— With respect to any plan, the amendments made by this section shall not apply to any employee before the date that such employee has 1 hour of service under such plan in any plan year to which the amendments made by this section apply. \n \n “(4)   Special rule for stock ownership plans .— Notwithstanding paragraph (1) or (2), in the case of an employee stock ownership plan (as defined in section 4975(e)(7) of the Internal Revenue Code of 1986) which had outstanding on  September 26, 2005 , a loan incurred for the purpose of acquiring qualifying employer securities (as defined in section 4975(e)(8) of such Code), the amendments made by this section shall not apply to any plan year beginning before the earlier of— “(A)  the date on which the loan is fully repaid, or \n \n “(B)  the date on which the loan was, as of  September 26, 2005 , scheduled to be fully repaid.”\nPub. L. 107–16, title VI, §\u202f633(c) ,  June 7, 2001 ,  115 Stat. 116 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 1053 of Title 29 , Labor] shall apply to contributions for plan years beginning after  December 31, 2001 . \n \n “(2)   Collective bargaining agreements .— In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified by the date of the enactment of this Act [ June 7, 2001 ], the amendments made by this section shall not apply to contributions on behalf of employees covered by any such agreement for plan years beginning before the earlier of— “(A)  the later of— “(i)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of the enactment); or \n \n “(ii)   January 1, 2002 ; or \n \n \n “(B)   January 1, 2006 . \n \n \n “(3)   Service required .— With respect to any plan, the amendments made by this section shall not apply to any employee before the date that such employee has 1 hour of service under such plan in any plan year to which the amendments made by this section apply.”\nPub. L. 107–16, title VI, §\u202f645(a)(3) ,  June 7, 2001 ,  115 Stat. 125 , provided that:  “The amendments made by this subsection [amending this section and  section 1054 of Title 29 , Labor] shall apply to years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f648(c) ,  June 7, 2001 ,  115 Stat. 128 , provided that:  “The amendments made by this section [amending this section,  section 457 of this title , and  section 1053 of Title 29 , Labor] shall apply to distributions after  December 31, 2001 .”\nPub. L. 105–34, title X, §\u202f1071(c) ,  Aug. 5, 1997 ,  111 Stat. 948 , provided that:  “The amendments made by this section [amending this section, sections 417 and 457 of this title, and sections 1053 to 1055 of Title 29, Labor] shall apply to plan years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–188, title I, §\u202f1442(c) ,  Aug. 20, 1996 ,  110 Stat. 1808 , provided that:  \n “The amendments made by this section [amending this section and  section 1053 of Title 29 , Labor] shall apply to plan years beginning on or after the earlier of— “(1)  the later of— “(A)   January 1, 1997 , or \n \n “(B)  the date on which the last of the collective bargaining agreements pursuant to which the plan is maintained terminates (determined without regard to any extension thereof after the date of the enactment of this Act [ Aug. 20, 1996 ]), or \n \n \n “(2)   January 1, 1999 . \n \n\n Such amendments shall not apply to any individual who does not have more than 1 hour of service under the plan on or after the 1st day of the 1st plan year to which such amendments apply.”\nPub. L. 103–465, title VII, §\u202f767(d) ,  Dec. 8, 1994 ,  108 Stat. 5040 , as amended by  Pub. L. 104–188, title I, §\u202f1449(a) ,  Aug. 20, 1996 ,  110 Stat. 1813 ;  Pub. L. 105–34, title XVI, §\u202f1604(b)(3) ,  Aug. 5, 1997 ,  111 Stat. 1097 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section, sections 415 and 417 of this title, and sections 1053 and 1055 of Title 29, Labor] shall apply to plan years and limitation years beginning after  December 31, 1994 ; except that an employer may elect to treat the amendments made by this section as being effective on or after the date of the enactment of this Act [ Dec. 8, 1994 ]. \n \n “(2)   No reduction in accrued benefits .— A participant’s accrued benefit shall not be considered to be reduced in violation of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] merely because (A) the benefit is determined in accordance with section 417(e)(3)(A) of such Code, as amended by this Act, or section 205(g)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1055(g)(3) ], as amended by this Act, or (B) the plan applies section 415(b)(2)(E) of such Code, as amended by this Act. \n \n “(3)   Section 415.— “(A)   Exception .— A plan that was adopted and in effect before  December 8, 1994 , shall not be required to apply the amendments made by subsection (b) [amending  section 415 of this title ] with respect to benefits accrued before the earlier of— “(i)  the later of the date a plan amendment applying the amendments made by subsection (b) is adopted or made effective, or \n \n “(ii)  the first day of the first limitation year beginning after  December 31, 1999 . \n \n\n Determinations under section 415(b)(2)(E) of the Internal Revenue Code of 1986 before such earlier date shall be made with respect to such benefits on the basis of such section as in effect on  December 7, 1994 , and the provisions of the plan as in effect on  December 7, 1994 , but only if such provisions of the plan meet the requirements of such section (as so in effect). \n \n “(B)   Timing of plan amendment .— A plan that operates in accordance with the amendments made by subsection (b) shall not be treated as failing to satisfy section 401(a) of the Internal Revenue Code of 1986 or as not being operated in accordance with the provisions of the plan until such date as the Secretary of the Treasury provides merely because the plan has not been amended to include the amendments made by subsection (b).”\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by section 7861(a)(5)(A), (6)(A) of  Pub. L. 101–239  effective as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 7863 of Pub. L. 101–239 , set out as a note under  section 106 of this title .\nPub. L. 101–239, title VII, §\u202f7871(a)(4) ,  Dec. 19, 1989 ,  103 Stat. 2435 , provided that:  “The amendments made by this subsection [amending this section and  section 1054 of Title 29 , Labor] shall take effect as if included in the amendments made by section 9202 of the Omnibus Budget Reconciliation Act of 1986 [ Pub. L. 99–509 ].”\nPub. L. 101–239, title VII, §\u202f7871(b)(3) ,  Dec. 19, 1989 ,  103 Stat. 2435 , provided that:  “The amendments made by this subsection [amending this section and  section 1002 of Title 29 , Labor] shall take effect as if included in the amendments made by section 9203 of the Omnibus Budget Reconciliation Act of 1986 [ Pub. L. 99–509 ].”\nAmendment by  section 7881(m)(1) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Pension Protection Act,  Pub. L. 100–203 , §§\u202f9302–9346, to which such amendment relates, see  section 7882 of Pub. L. 101–239 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to plan years beginning after  Dec. 31, 1987 , with plan amendments not required to be made before first plan year beginning on or after  Jan. 1, 1989 , if certain conditions are met, see  section 9346(c) of Pub. L. 100–203 , set out as a note under  section 1054 of Title 29 , Labor.\nPub. L. 99–514, title XI, §\u202f1113(f) , formerly §\u202f1113(e),  Oct. 22, 1986 ,  100 Stat. 2447 , as redesignated and amended by  Pub. L. 101–239, title VII, §\u202f7861(a)(3) , (4),  Dec. 19, 1989 ,  103 Stat. 2430 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 410 of this title  and sections 1052 to 1054 of Title 29, Labor] shall apply to plan years beginning after  December 31, 1988 . \n \n “(2)   Special rule for collective bargaining agreements .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  March 1, 1986 , the amendments made by this section shall not apply to employees covered by any such agreement in plan years beginning before the earlier of— “(A)  the later of— “(i)   January 1, 1989 , or \n \n “(ii)  the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after  February 28, 1986 ), or \n \n \n “(B)   January 1, 1991 . \n \n \n “(3)   Participation required .— The amendments made by this section shall not apply to any employee who does not have 1 hour of service in any plan year to which the amendments made by this section apply. \n \n “(4)   Repeal of class year vesting .— If a plan amendment repealing class year vesting is adopted after  October 22, 1986 , such amendment shall not apply to any employee for the 1st plan year to which the amendments made by subsections (b) and (e)(2) [amending this section and  section 1053 of Title 29 ] apply (and any subsequent plan year) if— “(A)  such plan amendment would reduce the nonforfeitable right of such employee for such year, and \n \n “(B)  such employee has at least 1 hour of service before the adoption of such plan amendment and after the beginning of such 1st plan year. \n \n\n This paragraph shall not apply to an employee who has 5 consecutive 1-year breaks in service (as defined in section 411(a)(6)(A) of the Internal Revenue Code of 1986) which include the 1st day of the 1st plan year to which the amendments made by subsection (b) and (e)(2) apply. A plan shall not be treated as failing to meet the requirements of section 401(a)(26) of such Code by reason of complying with the provisions of this paragraph.”\nAmendment by  section 1114(b)(10) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , see  section 1114(c)(3) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nPub. L. 99–514, title XI, §\u202f1139(d) ,  Oct. 22, 1986 ,  100 Stat. 2488 , as amended by  Pub. L. 100–647, title I, §\u202f1011A(k) ,  Nov. 10, 1988 ,  102 Stat. 3483 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 417 of this title  and sections 1053 and 1055 of Title 29, Labor] shall apply to distributions in plan years beginning after  December 31, 1984 , except that such amendments shall not apply to any distributions in plan years beginning after  December 31, 1984 , and before  January 1, 1987 , if such distributions were made in accordance with the requirements of the regulations issued under the Retirement Equity Act of 1984 [ Pub. L. 98–397 , see Short Title of 1984 Amendment note set out under  section 1001 of Title 29 ]. \n \n “(2)   Reduction in accrued benefits.— “(A)   In general .— If a plan— “(i)  adopts a plan amendment before the close of the first plan year beginning on or after  January 1, 1989 , which provides for the calculation of the present value of the accrued benefits in the manner provided by the amendments made by this section, and \n \n “(ii)  the plan reduces the accrued benefits for any plan year to which such plan amendment applies in accordance with such plan amendment, \n \n\n such reduction shall not be treated as a violation of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1054(g) ). \n \n “(B)   Special rule .— In the case of a plan maintained by a corporation incorporated on  April 11, 1934 , which is headquartered in Tarrant County, Texas— “(i)  such plan may be amended to remove the option of an employee to receive a lump sum distribution (within the meaning of section 402(e)(5) of such Code) if such amendment— “(I)  is adopted within 1 year of the date of the enactment of this Act [ Oct. 22, 1986 ], and \n \n “(II)  is not effective until 2 years after the employees are notified of such amendment, and \n \n \n “(ii)  the present value of any vested accrued benefit of such plan determined during the 3-year period beginning on the date of the enactment of this Act shall be determined under the applicable interest rate (within the meaning of section 411(a)(11)(B)(ii) of such Code), except that if such value (as so determined) exceeds $50,000, then the value of any excess over $50,000 shall be determined by using the interest rate specified in the plan as of  August 16, 1986 .”\nPub. L. 99–514, title XVIII, §\u202f1898(a)(1)(C) ,  Oct. 22, 1986 ,  100 Stat. 2942 , provided that:  “The amendments made by this paragraph [amending this section and  section 1053 of Title 29 , Labor] shall apply to contributions made for plan years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ]; except that, in the case of a plan described in section 302(b) of the Retirement Equity Act of 1984 [ section 302(b) of Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 ], such amendments shall not apply to any plan year to which the amendments made by such Act [see Short Title of 1984 Amendment note set out under  section 1001 of Title 29 ] do not apply by reason of such section 302(b).”\nAmendment by section 1898(a)(4)(A), (d)(1)(A), (2)(A), (f)(1)(A) of  Pub. L. 99–514  effective as if included in the provision of the Retirement Equity Act of 1984,  Pub. L. 98–397 , to which such amendment relates, except as otherwise provided, see  section 1898(j) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 9202(b) of Pub. L. 99–509  applicable only with respect to plan years beginning on or after  Jan. 1, 1988 , and only to employees who have 1 hour of service in any plan year to which amendment applies, with special rule for collectively bargained plans, and amendment by  section 9203(b)(2) of Pub. L. 99–509  applicable only with respect to plan years beginning on or after  Jan. 1, 1988 , and only with respect to service performed on or after such date, see section 9204(a), (b) of  Pub. L. 99–509 , set out as an Effective and Termination Dates of 1986 Amendments note under  section 623 of Title 29 , Labor.\nAmendment by  Pub. L. 98–397  applicable to plan years beginning after  Dec. 31, 1984 , except as otherwise provided, see sections 302 and 303 of  Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 , Labor.\nAmendment by  Pub. L. 96–364  effective  Sept. 26, 1980 , see  section 210(a) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nAmendment by  section 1901(a)(62) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nSection applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , and, in the case of plans in existence on  Jan. 1, 1974 , for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nPub. L. 109–280, title VII, §\u202f702 ,  Aug. 17, 2006 ,  120 Stat. 992 , provided that:  “The Secretary of the Treasury or his delegate shall, not later than 12 months after the date of the enactment of this Act [ Aug. 17, 2006 ], prescribe regulations for the application of the amendments made by, and the provisions of, this title [amending this section and sections 623, 1053, and 1054 of Title 29, Labor, and enacting provisions set out as notes under this section] in cases where the conversion of a plan to an applicable defined benefit plan is made with respect to a group of employees who become employees by reason of a merger, acquisition, or similar transaction.”\nPub. L. 109–280, title XI, §\u202f1102(b) ,  Aug. 17, 2006 ,  120 Stat. 1056 , provided that: \n “(1)   In general .— The Secretary of the Treasury shall modify the regulations under section 411(a)(11) of the Internal Revenue Code of 1986 and under section 205 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1055 ] to provide that the description of a participant’s right, if any, to defer receipt of a distribution shall also describe the consequences of failing to defer such receipt. \n \n “(2)   Effective date.— “(A)   In general .— The modifications required by paragraph (1) shall apply to years beginning after  December 31, 2006 . \n \n “(B)   Reasonable notice .— A plan shall not be treated as failing to meet the requirements of section 411(a)(11) of such Code or section 205 of such Act with respect to any description of consequences described in paragraph (1) made within 90 days after the Secretary of the Treasury issues the modifications required by paragraph (1) if the plan administrator makes a reasonable attempt to comply with such requirements.”\nPub. L. 107–16, title VI, §\u202f645(b)(3) ,  June 7, 2001 ,  115 Stat. 126 , provided that:  “Not later than  December 31, 2003 , the Secretary of the Treasury is directed to issue regulations under section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ], including the regulations required by the amendment made by this subsection [amending this section and  section 1054 of Title 29 , Labor]. Such regulations shall apply to plan years beginning after  December 31, 2003 , or such earlier date as is specified by the Secretary of the Treasury.”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by sections 1113 and 1114 of  Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nSecretary of Labor, Secretary of the Treasury, and Equal Employment Opportunity Commission shall each issue before  Feb. 1, 1988 , final regulations to carry out amendments made by sections 9202 and 9203 of  Pub. L. 99–509 , see  section 9204 of Pub. L. 99–509 , set out as a note under  section 623 of Title 29 , Labor.\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 109–280, title VII, §\u202f701(d) ,  Aug. 17, 2006 ,  120 Stat. 991 , as amended by  Pub. L. 110–458, title I, §\u202f107(c)(1) ,  Dec. 23, 2008 ,  122 Stat. 5107 , provided that:  \n “Nothing in the amendments made by this section [amending this section and sections 623, 1053, and 1054 of Title 29, Labor] shall be construed to create an inference with respect to— “(1)  the treatment of applicable defined benefit plans or conversions to applicable defined benefit plans under sections 204(b)(1)(H) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(b)(1)(H) ], 4(i)(1) of the Age Discrimination in Employment Act of 1967 [ 29 U.S.C. 623(i)(1) ], and 411(b)(1)(H) of the Internal Revenue Code of 1986, as in effect before such amendments, or \n \n “(2)  the determination of whether an applicable defined benefit plan fails to meet the requirements of sections 203(a)(2), 204(c), or 205(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1053(a)(2) , 1054(c), 1055(g)] or sections 411(a)(2), 411(c), or 417(e) of such Code, as in effect before such amendments, solely because the present value of the accrued benefit (or any portion thereof) of any participant is, under the terms of the plan, equal to the amount expressed as the balance in a hypothetical account or as an accumulated percentage of the participant’s final average compensation. \n \n\n For purposes of this subsection, the term ‘applicable defined benefit plan’ has the meaning given such term by section 203(f)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1053(f)(3) ] and section 411(a)(13)(C) of such Code, as in effect after such amendments.”\nPub. L. 116–260, div. EE, title II, §\u202f209 ,  Dec. 27, 2020 ,  134 Stat. 3066 , provided that:  “A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986) during any plan year which includes the period beginning on  March 13, 2020 , and ending on  March 31, 2021 , if the number of active participants covered by the plan on  March 31, 2021  is at least 80 percent of the number of active participants covered by the plan on  March 13, 2020 .”\nFor special rules on applicability of amendments by subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .\nPub. L. 109–280, title XI, §\u202f1107 ,  Aug. 17, 2006 ,  120 Stat. 1063 , provided that: \n “(a)   In General .— If this section applies to any pension plan or contract amendment— “(1)  such pension plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A), and \n \n “(2)  except as provided by the Secretary of the Treasury, such pension plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(b)   Amendments to Which Section Applies.— “(1)   In general .— This section shall apply to any amendment to any pension plan or annuity contract which is made— “(A)  pursuant to any amendment made by this Act [see Tables for classification] or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor under this Act, and \n \n “(B)  on or before the last day of the first plan year beginning on or after  January 1, 2009 . \n \n\n In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this paragraph shall be applied by substituting ‘2011’ for ‘2009’. \n \n “(2)   Conditions .— This section shall not apply to any amendment unless— “(A)  during the period— “(i)  beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan), and \n \n “(ii)  ending on the date described in paragraph (1)(B) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and \n \n \n “(B)  such plan or contract amendment applies retroactively for such period.”\nPub. L. 108–218, title I, §\u202f101(c) ,  Apr. 10, 2004 ,  118 Stat. 598 , as amended by  Pub. L. 109–280, title III, §\u202f301(c) ,  Aug. 17, 2006 ,  120 Stat. 920 ;  Pub. L. 110–458, title I, §\u202f103(a) ,  Dec. 23, 2008 ,  122 Stat. 5103 , provided that: \n “(1)   In general .— If this subsection applies to any plan or annuity contract amendment— “(A)  such plan or contract shall be treated as being operated in accordance with the terms of the plan or contract during the period described in paragraph (2)(B)(i), and \n \n “(B)  except as provided by the Secretary of the Treasury, such plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(2)   Amendments to which section applies.— “(A)   In general .— This subsection shall apply to any amendment to any plan or annuity contract which is made— “(i)  pursuant to any amendment made by this section [amending sections 404, 412, and 415 of this title and sections 1082 and 1306 of Title 29, Labor], and \n \n “(ii)  on or before the last day of the first plan year beginning on or after  January 1, 2009 . \n \n \n “(B)   Conditions .— This subsection shall not apply to any plan or annuity contract amendment unless— “(i)  during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and \n \n “(ii)  such plan or contract amendment applies retroactively for such period.”\nPub. L. 105–34, title XV, §\u202f1541 ,  Aug. 5, 1997 ,  111 Stat. 1085 , provided that: \n “(a)   In General .— If this section applies to any plan or contract amendment— “(1)  such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A), and \n \n “(2)  such plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 or section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(b)   Amendments to Which Section Applies.— “(1)   In general .— This section shall apply to any amendment to any plan or annuity contract which is made— “(A)  pursuant to any amendment made by this title [enacting sections 9811 and 9812 of this title, amending sections 101, 401 to 404, 408, 409, 410, 412, 414, 415, 512, 664, 674, 2055, 2056, 4947, 4972, 4975, 4978, 4979A, 4980D, 9801, 9802, and 9831 of this title, sections 1021, 1022, 1024, 1026 to 1028, 1056, 1082, 1107, 1108, and 1132 of Title 29, Labor, and  section 1320b–14 of Title 42 , The Public Health and Welfare, renumbering sections 9804 to 9806 of this title as sections 9831 to 9833, respectively, of this title, and amending provisions set out as a note under  section 412 of this title ] or subtitle H of title X [§§\u202f1071–1075, amending this section, sections 72, 132, 417, 457, 691, 2013, 2053, 4975, and 6018 of this title, and sections 1053 to 1055 of Title 29 and repealing  section 4980A of this title ], and \n \n “(B)  before the first day of the first plan year beginning on or after  January 1, 1999 . \n \n\n In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this paragraph shall be applied by substituting ‘2001’ for ‘1999’. \n \n “(2)   Conditions .— This section shall not apply to any amendment unless— “(A)  during the period— “(i)  beginning on the date the legislative amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative amendment, the effective date specified by the plan), and \n \n “(ii)  ending on the date described in paragraph (1)(B) (or, if earlier, the date the plan or contract amendment is adopted), \n \n\n \u2001\u2001the plan or contract is operated as if such plan or contract amendment were in effect, and \n \n “(B)  such plan or contract amendment applies retroactively for such period.”\nPub. L. 104–188, title I, §\u202f1449(d) ,  Aug. 20, 1996 ,  110 Stat. 1814 , provided that:  \n “In the case of a plan that was adopted and in effect before  December 8, 1994 , if— “(1)  a plan amendment was adopted or made effective on or before the date of the enactment of this Act [ Aug. 20, 1996 ] applying the amendments made by section 767 of the Uruguay Round Agreements Act [ Pub. L. 103–465 , see Effective Date of 1994 Amendment note set out above], and \n \n “(2)  within 1 year after the date of the enactment of this Act [ Aug. 20, 1996 ], a plan amendment is adopted which repeals the amendment referred to in paragraph (1), \n \n\n the amendment referred to in paragraph (1) shall not be taken into account in applying section 767(d)(3)(A) of the Uruguay Round Agreements Act, as amended by subsection (a).”\nFor provisions directing that if during the period beginning  Dec. 22, 1987 , and ending  June 21, 1988 , a plan was amended to reflect the amendments by  section 9346 of Pub. L. 100–203  and such plan is amended to reflect the amendments by  section 7881(m) of Pub. L. 101–239 , any plan amendments made to reflect the amendments by  section 7881(m) of Pub. L. 101–239  shall not be treated as reducing accrued benefits for purposes of subsection (d)(6) of this section or  section 1054(g) of Title 29 , Labor, see  section 7881(m)(3) of Pub. L. 101–239 , set out as a note under  section 1054 of Title 29 .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by sections 9202(b) and 9203(b)(2) of  Pub. L. 99–509  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 9204 of Pub. L. 99–509 , set out as a note under  section 623 of Title 29 , Labor.\nPub. L. 93–406, title II, §\u202f1012(c) ,  Sept. 2, 1974 ,  88 Stat. 913 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In the case of any plan maintained on  January 1, 1974 , if, not later than 2 years after the date of the enactment of this Act [ Sept. 2, 1974 ], the plan administrator petitions the Secretary of Labor, the Secretary of Labor may prescribe an alternate method which shall be treated as satisfying the requirements of subsection (a)(2) of section 411 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], or of subsection (b)(1) (other than subparagraph (D) thereof) of such section 411, or of both such provisions for a period of not more than 4 years. The Secretary may prescribe such alternate method only when he finds that— “(1)  the application of such requirements would increase the costs of the plan to such an extent that there would result a substantial risk to the voluntary continuation of the plan or a substantial curtailment of benefit levels or the levels of employees’ compensation, \n \n “(2)  the application of such requirements or discontinuance of the plan would be adverse to the interests of plan participants in the aggregate, and \n \n “(3)  a waiver or extension of time granted under [former] section 412(d) or (e) would be inadequate. \n \n\n In the case of any plan with respect to which an alternate method has been prescribed under the preceding provisions of this subsection for a period of not more than 4 years, if, not later than 1 year before the expiration of such period, the plan administrator petitions the Secretary of Labor for an extension of such alternate method, and the Secretary makes the findings required by the preceding sentence, such alternate method may be extended for not more than 3 years.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'A plan to which this section applies shall satisfy the minimum funding standard applicable to the plan for any plan year.\nExcept as provided in paragraph (2), the amount of any contribution required by this section (including any required installments under paragraphs (3) and (4) of section 430(j) or under section 433(f)) shall be paid by the employer responsible for making contributions to or under the plan.\nIf the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contributions.\nParagraph (1) shall not apply in the case of a multiemployer plan for any plan year in which the plan is in critical status pursuant to section 432. This paragraph shall only apply if the plan sponsor adopts a rehabilitation plan in accordance with section 432(e) and complies with such rehabilitation plan (and any modifications of the plan).\nThe Secretary may not waive under subparagraph (A) any portion of the minimum funding standard under subsection (a) for a plan year which is attributable to any waived funding deficiency for any preceding plan year.\nFor purposes of this section and part III of this subchapter, the term “waived funding deficiency” means the portion of the minimum funding standard under subsection (a) (determined without regard to the waiver) for a plan year waived by the Secretary and not satisfied by employer contributions.\nExcept as provided in subparagraph (C), the Secretary may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15) of the Employee Retirement Income Security Act of 1974) to provide security to such plan as a condition for granting or modifying a waiver under paragraph (1) or for granting an extension under section 433(d).\nAny security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13) of the Employee Retirement Income Security Act of 1974), or a member of such sponsor’s controlled group (within the meaning of section 4001(a)(14) of such Act).\nThe amount described in clause (i)(I) shall include any increase in such amount which would result if all applications for waivers or extensions with respect to the minimum funding standard under this subsection which are pending with respect to such plan were denied.\nIn the case of a defined benefit plan which is not a multiemployer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary not later than the 15th day of the 3rd month beginning after the close of such plan year.\nThe Secretary shall, before granting a waiver under this subsection, require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such waiver to each affected party (as defined in section 4001(a)(21) of the Employee Retirement Income Security Act of 1974). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of the Employee Retirement Income Security Act of 1974 and for benefit liabilities.\nThe Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).\nNo amendment of a plan which increases the liabilities of the plan by reason of any increase in benefits, any change in the accrual of benefits, or any change in the rate at which benefits become nonforfeitable under the plan shall be adopted if a waiver under this subsection or an extension of time under section 431(d) or section 433(d) is in effect with respect to the plan, or if a plan amendment described in subsection (d)(2) which reduces the accrued benefit of any participant has been made at any time in the preceding 12 months (24 months in the case of a multiemployer plan). If a plan is amended in violation of the preceding sentence, any such waiver, or extension of time, shall not apply to any plan year ending on or after the date on which such amendment is adopted.\nIf the funding method or a plan year for a plan is changed, the change shall take effect only if approved by the Secretary.\nFor purposes of this section, the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414.\nThis section applies with respect to a terminated multiemployer plan to which section 4021 of the Employee Retirement Income Security Act of 1974 applies until the last day of the plan year in which the plan terminates (within the meaning of section 4041A(a)(2) of such Act).\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (c)(4)(A), (B)(ii)(II), (6)(A), and (e)(1), (4), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 , which is classified principally to chapter 18 (§\u202f1001 et seq.) of Title 29, Labor. Title IV of the Act is classified generally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29. Sections 3, 4001, 4021, and 4041A of the Act are classified to sections 1002, 1301, 1321, and 1341a of Title 29, respectively. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe effective date of this section, referred to in subsec. (e)(1), probably means the effective date of  Pub. L. 109–280, §\u202f111(a) , which amended this section. See Effective Date of 2006 Amendment note below.\n2018—Subsec. (c)(1)(A).  Pub. L. 115–141, §\u202f401(a)(83) , inserted period at end of concluding provisions.\nSubsec. (c)(4)(B).  Pub. L. 115–141, §\u202f401(a)(84) , inserted “section” before “433(d)” in introductory provisions.\nSubsec. (c)(7)(B)(iii).  Pub. L. 115–141, §\u202f401(a)(85) , struck out comma after “subchapter D”.\n2014—Subsec. (a)(2)(A).  Pub. L. 113–97, §\u202f202(c)(2)(A) , substituted “multiemployer plan or a CSEC plan” for “multiemployer plan”.\nSubsec. (a)(2)(D).  Pub. L. 113–97, §\u202f202(c)(1) , added subpar. (D).\nSubsec. (b)(1).  Pub. L. 113–97, §\u202f202(c)(2)(B) , substituted “430(j) or under section 433(f)” for “430(j)”.\nSubsec. (c)(1)(A)(i).  Pub. L. 113–97, §\u202f202(c)(2)(A) , substituted “multiemployer plan or a CSEC plan, 10 percent” for “multiemployer plan, 10 percent”.\nSubsec. (c)(1)(B)(i).  Pub. L. 113–97, §\u202f202(c)(2)(A) , substituted “multiemployer plan or a CSEC plan” for “multiemployer plan”.\nSubsec. (c)(1)(B)(iii).  Pub. L. 113–97, §\u202f202(c)(2)(C) , added cl. (iii).\nSubsec. (c)(4)(A)(i).  Pub. L. 113–97, §\u202f202(c)(2)(D) , substituted “under paragraph (1) or for granting an extension under section 433(d)” for “under paragraph (1)”.\nSubsec. (c)(4)(B).  Pub. L. 113–97, §\u202f202(c)(2)(E) , substituted “waiver under this subsection or an extension under 433(d)” for “waiver under this subsection” in introductory provisions.\nSubsec. (c)(4)(B)(i)(I).  Pub. L. 113–97, §\u202f202(c)(2)(F) , substituted “waiver, modification, or extension” for “waiver or modification”.\nSubsec. (c)(4)(C).  Pub. L. 113–97, §\u202f202(c)(2)(G) , substituted “waivers or extensions” for “waivers” in heading.\nSubsec. (c)(4)(C)(i)(I).  Pub. L. 113–97, §\u202f202(c)(2)(I) , substituted “or the accumulated funding deficiency under section 433, whichever is applicable,” for “and” at end.\nSubsec. (c)(4)(C)(i)(II).  Pub. L. 113–97, §\u202f202(c)(2)(J) , substituted “430(e)(2) or 433(b)(2)(C), whichever is applicable, and” for “430(e)(2),”.\nSubsec. (c)(4)(C)(i)(III).  Pub. L. 113–97, §\u202f202(c)(2)(K) , added subcl. (III).\nSubsec. (c)(4)(C)(ii).  Pub. L. 113–97, §\u202f202(c)(2)(L) , substituted “for waivers or extensions with respect to” for “for waivers of”.\nPub. L. 113–97, §\u202f202(c)(2)(G) , substituted “waivers or extensions” for “waivers” in heading.\nSubsec. (c)(7)(A).  Pub. L. 113–97, §\u202f202(c)(2)(H) , substituted “section 431(d) or section 433(d)” for “section 431(d)”.\nSubsec. (d)(2).  Pub. L. 113–97, §\u202f202(c)(2)(H) , substituted “section 431(d) or section 433(d)” for “section 431(d)” in concluding provisions.\nPub. L. 113–97, §\u202f202(c)(2)(A) , substituted “multiemployer plan or a CSEC plan, any extension” for “multiemployer plan, any extension” in concluding provisions.\n2008—Subsec. (b)(3).  Pub. L. 110–458, §\u202f102(b)(2)(H) , substituted “the plan sponsor adopts” for “the plan adopts”.\nSubsec. (c)(1)(A)(i).  Pub. L. 110–458, §\u202f101(a)(2)(A) , substituted “the plan are” for “the plan is”.\nSubsec. (c)(7)(A).  Pub. L. 110–458, §\u202f101(a)(2)(B) , inserted “which reduces the accrued benefit of any participant” after “subsection (d)(2)”.\nSubsec. (d)(1).  Pub. L. 110–458, §\u202f101(a)(2)(C) , struck out “,\u2000the valuation date,” after “If the funding method”.\n2006— Pub. L. 109–280, §\u202f111(a) , reenacted heading without change and amended text generally, substituting provisions relating to minimum funding standard requirement, liability for contributions, variance from minimum funding standards, miscellaneous rules, and plans to which section applies, consisting of subsecs. (a) to (e), for provisions relating to general rule for satisfaction of minimum funding standard, funding standard account, special rules, variance from minimum funding standard, extension of amortization periods, requirements relating to waivers and extensions, alternative minimum funding standard, exceptions, certain insurance contract plans, certain terminated multiemployer plans, financial assistance, additional funding requirements for plans which are not multiemployer plans, quarterly contributions requirement, and imposition of lien where failure to make required contributions, consisting of subsecs. (a) to (n).\nSubsec. (b)(3).  Pub. L. 109–280, §\u202f212(c) , added par. (3).\nSubsec. (b)(5)(B)(ii)(II).  Pub. L. 109–280, §\u202f301(b)(1) , substituted “,\u20002005, 2006, and 2007” for “and 2005” in heading and “2008” for “2006” in text.\nSubsec. ( l )(7)(C)(i)(IV).  Pub. L. 109–280, §\u202f301(b)(2) , substituted “,\u20002005, 2006, and 2007” for “and 2005” in heading and “,\u20002005, 2006, or 2007” for “or 2005” in text.\n2005—Subsec. (m)(4)(B)(i).  Pub. L. 109–135  substituted “subsection (d)” for “subsection (c)”.\n2004—Subsec. (b)(5)(B)(ii)(I).  Pub. L. 108–218, §\u202f101(b)(1)(C) , inserted “or (III)” after “subclause (II)”.\nSubsec. (b)(5)(B)(ii)(II), (III).  Pub. L. 108–218, §\u202f101(b)(1)(A) , (B), added subcl. (II), redesignated former subcl. (II) as (III), and, in subcl. (III), inserted “or (II)” after “permissible under subclause (I)” and substituted “such subclause” for “subclause (I)” before period at end.\nSubsec. (b)(7)(F).  Pub. L. 108–218, §\u202f104(b) , added subpar. (F).\nSubsec. ( l )(7)(C)(i)(IV).  Pub. L. 108–218, §\u202f101(b)(2) , added subcl. (IV).\nSubsec. ( l )(12).  Pub. L. 108–218, §\u202f102(b) , added par. (12).\nSubsec. (m)(7).  Pub. L. 108–218, §\u202f101(b)(3) , amended heading and text of par. (7) generally, substituting provisions relating to special rule for 2002 for provisions relating to special rules for 2002 and 2004.\n2002—Subsec. (c)(9)(B)(ii).  Pub. L. 107–147, §\u202f411(v)(1)(A) , substituted “100 percent” for “125 percent”.\nSubsec. (c)(9)(B)(iv).  Pub. L. 107–147, §\u202f411(v)(1)(B) , added cl. (iv).\nSubsec. ( l )(7)(C)(i)(III).  Pub. L. 107–147, §\u202f405(a)(1) , added subcl. (III).\nSubsec. (m)(7).  Pub. L. 107–147, §\u202f405(a)(2) , added par. (7).\n2001—Subsec. (c)(7)(A)(i)(I).  Pub. L. 107–16, §\u202f651(a)(1) , substituted “in the case of plan years beginning before  January 1, 2004 , the applicable percentage” for “the applicable percentage”.\nSubsec. (c)(7)(F).  Pub. L. 107–16, §\u202f651(a)(2) , reenacted heading and introductory provisions without change and amended table generally, substituting present provisions for provisions which had set out applicable percentage of 155 in the case of any plan year beginning in 1999 or 2000, 160 in the case of any plan year beginning in 2001 or 2002, 165 in the case of any plan year beginning in 2003 or 2004, and 170 in the case of any plan year beginning in 2005 and succeeding years.\nSubsec. (c)(9).  Pub. L. 107–16, §\u202f661(a) , reenacted heading without change and amended text of par. (9) generally. Prior to amendment, text read as follows: “For purposes of this section, a determination of experience gains and losses and a valuation of the plan’s liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary.”\n1997—Subsec. (b)(2)(E).  Pub. L. 105–34, §\u202f1521(c)(1) , added subpar. (E).\nSubsec. (c)(7)(A)(i)(I).  Pub. L. 105–34, §\u202f1521(a)(A) , substituted “the applicable percentage” for “150 percent”.\nSubsec. (c)(7)(D).  Pub. L. 105–34, §\u202f1521(c)(3)(A) , inserted “and” at end of cl. (i), substituted a period for “,\u2000and” at end of cl. (ii), and struck out cl. (iii) which read as follows: “for the treatment under this section of contributions which would be required to be made under the plan but for the provisions of subparagraph (A)(i)(I).”\nSubsec. (c)(7)(F).  Pub. L. 105–34, §\u202f1521(a)(B) , added subpar. (F).\nSubsec. (m)(5)(E)(ii)(II).  Pub. L. 105–34, §\u202f1604(b)(2)(A) , substituted “subclause (I)” for “clause (i)”.\n1994—Subsec. (c)(5).  Pub. L. 103–465, §\u202f752(a) , designated existing provisions as subpar. (A), inserted subpar. heading, and added subpar. (B).\nSubsec. (c)(7)(A)(i)(I).  Pub. L. 103–465, §\u202f751(a)(10)(A) , inserted “(including the expected increase in current liability due to benefits accruing during the plan year)” after “current liability”.\nSubsec. (c)(7)(B).  Pub. L. 103–465, §\u202f751(a)(10)(C) , reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraphs (A) and (D), the term ‘current liability’ has the meaning given such term by subsection ( l )(7) (without regard to subparagraph (D) thereof).”\nSubsec. (c)(7)(E).  Pub. L. 103–465, §\u202f751(a)(10)(B) , added subpar. (E).\nSubsec. (c)(12).  Pub. L. 103–465, §\u202f753(a) , added par. (12).\nSubsec. ( l )(1).  Pub. L. 103–465, §\u202f751(a)(1)(A) , (2)(B), in introductory provisions, substituted “to which this subsection applies under paragraph (9)” for “which has an unfunded current liability”, and amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “Such increase shall not exceed the amount necessary to increase the funded current liability percentage to 100 percent.”\nSubsec. ( l )(1)(A)(ii).  Pub. L. 103–465, §\u202f751(a)(2)(A) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the sum of the charges for such plan year under subparagraphs (B) (other than clauses (iv) and (v) thereof), (C), and (D) of subsection (b)(2), reduced by the sum of the credits for such plan year under subparagraph (B)(i) of subsection (b)(3), plus”.\nSubsec. ( l )(2)(C).  Pub. L. 103–465, §\u202f751(a)(3) , added subpar. (C).\nSubsec. ( l )(2)(D).  Pub. L. 103–465, §\u202f751(a)(7)(B)(i) , added subpar. (D).\nSubsec. ( l )(3)(D), (E).  Pub. L. 103–465, §\u202f751(a)(4)(A) , added subpars. (D) and (E).\nSubsec. ( l )(4)(B)(i).  Pub. L. 103–465, §\u202f751(a)(4)(B) , (7)(B)(iii), inserted “,\u2000the unamortized portion of the additional unfunded old liability, the unamortized portion of each unfunded mortality increase,” after “old liability”.\nSubsec. ( l )(4)(C).  Pub. L. 103–465, §\u202f751(a)(5) , substituted “.40” for “.25” in cl. (i) and “60” for “35” in cl. (ii).\nSubsec. ( l )(5)(A).  Pub. L. 103–465, §\u202f751(a)(6)(A)(i) , substituted “greatest of” for “greater of” in introductory provisions.\nSubsec. ( l )(5)(A)(iii).  Pub. L. 103–465, §\u202f751(a)(6)(A)(ii) –(iv), added cl. (iii).\nSubsec. ( l )(5)(E).  Pub. L. 103–465, §\u202f751(a)(6)(B) , added subpar. (E).\nSubsec. ( l )(7)(C).  Pub. L. 103–465, §\u202f751(a)(7)(A) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “(C)  Interest rates used .—The rate of interest used to determine current liability shall be the rate of interest used under subsection (b)(5).”\nSubsec. ( l )(9).  Pub. L. 103–465, §\u202f751(a)(1)(B) , added par. (9).\nSubsec. ( l )(10).  Pub. L. 103–465, §\u202f751(a)(7)(B)(ii) , added par. (10).\nSubsec. ( l )(11).  Pub. L. 103–465, §\u202f751(a)(8) , added par. (11).\nSubsec. (m)(1).  Pub. L. 103–465, §\u202f754(a) , in introductory provisions, inserted “which has a funded current liability percentage (as defined in subsection ( l )(8)) for the preceding plan year of less than 100 percent” before “fails” and substituted “the plan year” for “any plan year”.\nSubsec. (m)(4)(D)(ii).  Pub. L. 103–465, §\u202f751(a)(6)(C)(i) , substituted “greatest of” for “greater of” in introductory provisions.\nSubsec. (m)(4)(D)(ii)(III).  Pub. L. 103–465, §\u202f751(a)(6)(C)(ii) –(iv), added subcl. (III).\nSubsec. (m)(5), (6).  Pub. L. 103–465, §\u202f751(a)(9)(A) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (n)(2).  Pub. L. 103–465, §\u202f768(a)(1) , inserted at end “This subsection shall not apply to any plan to which section 4021 of the Employee Retirement Income Security Act of 1974 does not apply (as such section is in effect on the date of the enactment of the Retirement Protection Act of 1994).”\nSubsec. (n)(3).  Pub. L. 103–465, §\u202f768(a)(2) , reenacted par. (3) heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of—\n“(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or\n“(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)—\n“(i) for plan years beginning after 1987, and\n“(ii) for which payment has not been made before the due date.”\nSubsec. (n)(4)(B).  Pub. L. 103–465, §\u202f768(a)(3) , struck out “60th day following the” before “due date”.\n1989—Subsec. (b)(5)(B)(iii).  Pub. L. 101–239, §\u202f7881(d)(1)(A) , struck out “for purposes of this section and for purposes of determining current liability,” before “the interest rate” in introductory provisions.\nSubsec. (c)(9).  Pub. L. 101–239, §\u202f7881(a)(6)(A) , substituted “Annual” for “3-year” in heading and “every year” for “every 3 years” in text.\nSubsec. (c)(10)(A).  Pub. L. 101–239, §\u202f7881(b)(1)(A) , substituted “Defined benefit plans” for “Plans” in heading and “defined benefit plan other” for “plan other” in introductory provisions.\nSubsec. (c)(10)(B).  Pub. L. 101–239, §\u202f7881(b)(2)(A) , substituted “Other” for “Multiemployer” in heading and “plan not described in subparagraph (A)” for “multiemployer plan” in text.\nSubsec. (d)(1)(A)(ii).  Pub. L. 101–239, §\u202f7881(b)(6)(A)(ii) , substituted “costs (including adjustments under subsection (b)(5)(B))” for “costs”.\nSubsec. (f)(4)(A).  Pub. L. 101–239, §\u202f7881(c)(1) , substituted “for benefit liabilities” for “the benefit liabilities”.\nSubsec. ( l )(3)(C)(ii)(II).  Pub. L. 101–239, §\u202f7881(a)(1)(A) , substituted “reducing (but not below zero)” for “reducing”.\nSubsec. ( l )(4)(B)(i).  Pub. L. 101–239, §\u202f7881(a)(2)(A) , substituted “liability and the unamortized portion of the unfunded existing benefit increase liability” for “liability”.\nSubsec. ( l )(5)(C).  Pub. L. 101–239, §\u202f7881(a)(3)(A) , substituted “the first plan year beginning after  December 31, 1988 ” for “ October 17, 1987 ”.\nSubsec. ( l )(7)(D)(iii)(III).  Pub. L. 101–239, §\u202f7881(a)(4)(A)(i) , added subcl. (III).\nSubsec. ( l )(7)(D)(iv).  Pub. L. 101–239, §\u202f7881(a)(4)(A)(ii) , added cl. (iv).\nSubsec. ( l )(8)(A)(ii).  Pub. L. 101–239, §\u202f7881(a)(5)(A)(i) , struck out “reduced by any credit balance in the funding standard account” after “under subsection (c)(2)”.\nSubsec. ( l )(8)(E).  Pub. L. 101–239, §\u202f7881(a)(5)(A)(ii) , added subpar. (E).\nSubsec. (m)(1).  Pub. L. 101–239, §\u202f7881(b)(3)(A) , substituted “defined benefit plan (other than” for “plan (other than” in introductory provisions.\nSubsec. (m)(1)(B).  Pub. L. 101–239, §\u202f7881(b)(6)(A)(i) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the rate under subsection (b)(5).”\nSubsec. (m)(4)(D).  Pub. L. 101–239, §\u202f7881(b)(4)(A) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “In the case of a plan with any unpredictable contingent event benefit liabilities—\n“(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and\n“(ii) each required installment shall be increased by the greater of—\n“(I) the amount of benefits described in subsection ( l )(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs, or\n“(II) 25 percent of the amount determined under subsection ( l )(5)(A)(ii) for the plan year.”\n1988—Subsec. ( l )(3)(C)(i), (iii).  Pub. L. 100–647, §\u202f2005(a)(2)(A) , (d)(1), amended cl. (i) identically, substituting “October 29” for “October 17” and amended cl. (iii) identically, substituting “October 28” for “October 16”.\n1987—Subsec. (b)(2).  Pub. L. 100–203, §\u202f9303(a)(2) , inserted at end “For additional requirements in the case of plans other than multiemployer plans, see subsection ( l ).”\nSubsec. (b)(2)(B)(iv).  Pub. L. 100–203, §\u202f9307(a)(1)(A) , substituted “5 plan years (15 plan years in the case of a multiemployer plan)” for “15 plan years”.\nSubsec. (b)(2)(B)(v).  Pub. L. 100–203, §\u202f9307(a)(1)(B) , substituted “10 plan years (30 plan years in the case of a multiemployer plan)” for “30 plan years”.\nSubsec. (b)(2)(C), (3)(B)(ii).  Pub. L. 100–203, §\u202f9307(a)(1)(A) , substituted “5 plan years (15 plan years in the case of a multiemployer plan)” for “15 plan years”.\nSubsec. (b)(3)(B)(iii).  Pub. L. 100–203, §\u202f9307(a)(1)(B) , substituted “10 plan years (30 plan years in the case of a multiemployer plan)” for “30 plan years”.\nSubsec. (b)(5).  Pub. L. 100–203, §\u202f9307(e)(1) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “The funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.”\nSubsec. (c)(2)(B).  Pub. L. 100–203, §\u202f9303(d)(1) , inserted at end “In the case of a plan other than a multiemployer plan, this subparagraph shall not apply, but the Secretary may by regulations provide that the value of any dedicated bond portfolio of such plan shall be determined by using the interest rate under subsection (b)(5).”\nSubsec. (c)(3).  Pub. L. 100–203, §\u202f9307(b)(1) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.”\nSubsec. (c)(7).  Pub. L. 100–203, §\u202f9301(a) , substituted “Full-funding” for “Full funding” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of paragraph (6), the term full funding limitation means the excess (if any) of—\n“(A) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over\n“(B) the lesser of the fair market value of the plan’s assets or the value of such assets determined under paragraph (2).”\nSubsec. (c)(10).  Pub. L. 100–203, §\u202f9304(a)(1) , amended par. (10) generally. Prior to amendment, par. (10) read as follows: “For purposes of this section, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this paragraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.”\nSubsec. (c)(11).  Pub. L. 100–203, §\u202f9305(b)(1) , added par. (11).\nSubsec. (d)(1).  Pub. L. 100–203, §\u202f9306(a)(1)(B) , struck out “substantial” after “in case of” in heading, and substituted “temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)” for “substantial business hardship” in text.\nPub. L. 100–203, §\u202f9306(b)(1) , substituted “more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan)” for “more than 5 of any 15”.\nPub. L. 100–203, §\u202f9306(c)(1)(A) , substituted “The interest rate used for purposes of computing the amortization charge described in subsection (b)(2)(C) for any plan year shall be—” and subpars. (A) and (B) for “The interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection shall be the rate determined under section 6621(b).”\nSubsec. (d)(2).  Pub. L. 100–203, §\u202f9306(a)(1)(B) , struck out “substantial” after “Determination of” in heading, and substituted “temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)” for “substantial business hardship” in introductory provisions.\nSubsec. (d)(4).  Pub. L. 100–203, §\u202f9306(a)(1)(A) , added par. (4).\nSubsec. (d)(5).  Pub. L. 100–203, §\u202f9306(a)(1)(C) , added par. (5).\nSubsec. (e).  Pub. L. 100–203, §\u202f9306(c)(1)(B) , substituted last two sentences for “The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b).”\nSubsec. (f)(3)(C)(i).  Pub. L. 100–203, §\u202f9306(e)(1) , substituted “$1,000,000” for “$2,000,000” at end.\nSubsec. (f)(4)(A).  Pub. L. 100–203, §\u202f9306(d)(1) , substituted “plan, and each participant, beneficiary, and alternate payee (within the meaning of section 414(p)(8)). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of such Act and the benefit liabilities.” for “plan.”\nSubsec. ( l ).  Pub. L. 100–203, §\u202f9303(a)(1) , added subsec. ( l ).\nSubsec. (m).  Pub. L. 100–203, §\u202f9304(b)(1) , added subsec. (m).\nSubsec. (n).  Pub. L. 100–203, §\u202f9304(e)(1) , added subsec. (n).\n1986—Subsec. (d)(1).  Pub. L. 99–272, §\u202f11015(b)(2)(A) , inserted provision that the interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection be the rate determined under section 6621(b).\nSubsec. (e).  Pub. L. 99–272, §\u202f11015(b)(2)(B) , inserted provision that the interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection be the rate determined under section 6621(b).\nSubsec. (f).  Pub. L. 99–272, §\u202f11015(a)(2) , substituted in heading “Requirements relating to waivers and extensions” for “Benefits may not be increased during waiver or extension period” and in par. (1) heading “Benefits may not be increased during waiver or extension period” for “In general”, and added par. (3).\nPub. L. 99–272, §\u202f11016(c)(4) , added par. (4).\n1984—Subsec. (a)(2).  Pub. L. 98–369  struck out “or 405(a)” after “section 403(a)”.\n1980—Subsec. (a).  Pub. L. 96–364, §\u202f208(c) , inserted provisions relating to plan years where multiemployer plan is in reorganization.\nSubsec. (b).  Pub. L. 96–364, §\u202f203(1) , (2), struck out in pars. (2)(B)(ii), (iii), and (3)(B)(i) provisions respecting applicability of multiemployer plans with 40 plan years and in pars. (2)(B)(iv) and (3)(B)(ii) provisions respecting applicability of multiemployer plans with 20 year plans and added pars. (6) and (7).\nSubsecs. (j), (k).  Pub. L. 96–364, §\u202f203(3) , added subsecs. (j) and (k).\n1976—Subsecs. (a) to (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (h).  Pub. L. 94–455, §\u202f1901(a)(63) , substituted reference to  Sept. 2, 1974 , for reference to the date of enactment of the Employee Retirement Income Security Act of 1974 in par. (5) and substituted reference to  Sept. 1, 1974 , for reference to the day before the date of enactment of the Employee Retirement Income Security Act of 1974 in the provisions following par. (6).\nSubsec. (i).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 113–97  applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 109–280, title I, §\u202f111(b) ,  Aug. 17, 2006 ,  120 Stat. 826 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2007 .”\nPub. L. 109–280, title II, §\u202f212(e) ,  Aug. 17, 2006 ,  120 Stat. 917 , as amended by  Pub. L. 110–458, title I, §\u202f102(b)(3)(B) , (C),  Dec. 23, 2008 ,  122 Stat. 5103 , provided that: \n “(1)   In general .— The amendments made by this section [enacting  section 432 of this title  and amending this section and  section 4971 of this title ] shall apply with respect to plan years beginning after 2007, except that the amendments made by subsection (b) [amending  section 4971 of this title ] shall apply to taxable years beginning after 2007, but only with respect to plan years beginning after 2007 which end with or within any such taxable year. \n \n “(2)   Special rule for certain notices .— In any case in which a plan’s actuary certifies that it is reasonably expected that a multiemployer plan will be in critical status under section 432(b)(3) of the Internal Revenue Code of 1986, as added by this section, with respect to the first plan year beginning after 2007, the notice required under subparagraph (D) of such section may be provided at any time after the date of enactment [ Aug. 17, 2006 ], so long as it is provided on or before the last date for providing the notice under such subparagraph. \n \n “(3)   Special rule for certain restored benefits .— In the case of a multiemployer plan— “(A)  with respect to which benefits were reduced pursuant to a plan amendment adopted on or after  January 1, 2002 , and before  June 30, 2005 , and \n \n “(B)  which, pursuant to the plan document, the trust agreement, or a formal written communication from the plan sponsor to participants provided before  June 30, 2005 , provided for the restoration of such benefits, \n \n\n the amendments made by this section shall not apply to such benefit restorations to the extent that any restriction on the providing or accrual of such benefits would otherwise apply by reason of such amendments.”\nPub. L. 109–280, title II, §\u202f221(c) ,  Aug. 17, 2006 ,  120 Stat. 919 , as amended by  Pub. L. 113–295, div. A, title I, §\u202f172(a) , (b),  Dec. 19, 2014 ,  128 Stat. 4024 , which provided that the provisions of, and the amendments made by, sections 201(b), 202, and 212 (enacting  section 432 of this title  and  section 1085 of Title 29 , Labor, amending this section,  section 4971 of this title , and sections 1082 and 1132 of Title 29, and enacting provisions set out as notes under this section and sections 1082 and 1084 of Title 29) were not applicable to plan years beginning after  Dec. 31, 2014 , and if a plan was operating under a funding improvement or rehabilitation plan under  section 1085 of Title 29  or  section 432 of this title  for its last year beginning before  Jan. 1, 2015 , such plan was to continue to operate under such funding improvement or rehabilitation plan during any period after  Dec. 31, 2014 , such funding improvement or rehabilitation plan was in effect and all provisions of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001  et seq.) or this title relating to the operation of such funding improvement or rehabilitation plan were to continue in effect during such period, was repealed by  Pub. L. 113–235, div. O, title I, §\u202f101(a) ,  Dec. 16, 2014 ,  128 Stat. 2774 .\n[ Pub. L. 113–295, div. A, title I, §\u202f172(c) ,  Dec. 19, 2014 ,  128 Stat. 4024 , provided that:  “The amendments made by this section [directing amendment of  section 221(c) of Pub. L. 109–280 , formerly set out above] shall apply to plan years beginning after  December 31, 2014 .” \n Those amendments could not be executed because of the intervening repeal of section 221(c) by  Pub. L. 113–235 .]\nAmendment by section 101(b)(1)–(3) of  Pub. L. 108–218  applicable, except as otherwise provided, to plan years beginning after  Dec. 31, 2003 , see  section 101(d) of Pub. L. 108–218 , set out as a note under  section 404 of this title .\nAmendment by  section 411(v)(1) of Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nPub. L. 107–16, title VI, §\u202f651(c) ,  June 7, 2001 ,  115 Stat. 129 , provided that:  “The amendments made by this section [amending this section and  section 1082 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f661(c) ,  June 7, 2001 ,  115 Stat. 142 , provided that:  “The amendments made by this section [amending this section and  section 1082 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2001 .”\nPub. L. 105–34, title XV, §\u202f1521(d)(1) ,  Aug. 5, 1997 ,  111 Stat. 1070 , provided that:  “The amendments made by this section [amending this section and  section 1082 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 1998 .”\nPub. L. 105–34, title XVI, §\u202f1604(b)(4) ,  Aug. 5, 1997 ,  111 Stat. 1097 , provided that:  “The amendments made by this subsection [amending this section,  section 6621 of this title ,  section 1082 of Title 29 , Labor, and provisions set out as a note under  section 411 of this title ] shall take effect as if included in the sections of the Uruguay Round Agreements Act [ Pub. L. 103–465 ] to which they relate.”\nAmendment by section 751(a)(1)–(9)(A), (10) of  Pub. L. 103–465  applicable to plan years beginning after  Dec. 31, 1994 , see  section 751(b)(1) of Pub. L. 103–465 , set out as a note under  section 401 of this title .\nPub. L. 103–465, title VII, §\u202f752(b) ,  Dec. 8, 1994 ,  108 Stat. 5023 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to changes in assumptions for plan years beginning after  October 28, 1993 . \n \n “(2)   Certain changes cease to be effective .— In the case of changes in assumptions for plan years beginning after  December 31, 1992 , and on or before  October 28, 1993 , such changes shall cease to be effective for plan years beginning after  December 31, 1994 , if— “(A)  such change would have required the approval of the Secretary of the Treasury had such amendment applied to such change, and \n \n “(B)  such change is not so approved.”\nPub. L. 103–465, title VII, §\u202f753(b) ,  Dec. 8, 1994 ,  108 Stat. 5023 , provided that:  “The amendment made by this section [amending this section] shall apply to plan years beginning after  December 31, 1994 , with respect to collective bargaining agreements in effect on or after  January 1, 1995 .”\nPub. L. 103–465, title VII, §\u202f754(b) ,  Dec. 8, 1994 ,  108 Stat. 5023 , provided that:  “The amendment made by this section [amending this section] shall apply to plan years beginning after the date of enactment of this Act [ Dec. 8, 1994 ].”\nPub. L. 103–465, title VII, §\u202f768(c) ,  Dec. 8, 1994 ,  108 Stat. 5041 , provided that:  “The amendments made by this section [amending this section and  section 1082 of Title 29 , Labor] shall be effective for installments and other payments required under section 412 of the Internal Revenue Code of 1986 or under part 3 of subtitle B [of title I] of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1081  et seq.] that become due on or after the date of enactment [ Dec. 8, 1994 ].”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Pension Protection Act,  Pub. L. 100–203 , §§\u202f9302–9346, to which such amendment relates, see  section 7882 of Pub. L. 101–239 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 100–647  effective as if included in the amendments made by the provisions of the Omnibus Budget Reconciliation Act of 1987,  Pub. L. 100–203 , to which it relates, see  section 2005(e) of Pub. L. 100–647 , as amended, set out as a note under  section 404 of this title .\nPub. L. 100–203, title IX, §\u202f9301(c)(1) , (2),  Dec. 22, 1987 ,  101 Stat. 1330–333 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1082 of Title 29 , Labor] shall apply to years beginning after  December 31, 1987 . \n \n “(2)   Regulations .— The Secretary of the Treasury or his delegate shall prescribe such regulations as are necessary to carry out the amendments made by this section no later than  August 15, 1988 .”\nPub. L. 100–203, title IX, §\u202f9303(e) ,  Dec. 22, 1987 ,  101 Stat. 1330–342 , as amended by  Pub. L. 101–239, title VII, §\u202f7881(a)(7) ,  Dec. 19, 1989 ,  103 Stat. 2436 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and  section 1082 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 1988 . \n \n “(2)   Subsections  (c)  and  (d).— The amendments made by subsections (c) [set out below] and (d) [amending this section and  section 1082 of Title 29 ] shall apply with respect to years beginning after  December 31, 1987 . \n \n “(3)   Special rule for steel companies.— “(A)   In general .— For any plan year beginning before  January 1, 1994 , any increase in the funding standard account under [former] section 412( l ) of the 1986 Code or section 302(d) of ERISA (as added by this section) [ 29 U.S.C. 1082(d) ] with respect to any steel employee plan shall not exceed the sum of— “(i)  the required percentage of the current liability under such plan, plus \n \n “(ii)  the amount determined under subparagraph (C)(i) for such plan year. \n \n \n “(B)   Required percentage .— For purposes of subparagraph (A), the term ‘required percentage’ means, with respect to any plan year, the excess (if any) of— “(i)  the sum of— “(I)  the funded current liability percentage as of the beginning of the 1st plan year beginning after  December 31, 1988  (determined without regard to any plan amendment adopted after  June 30, 1987 ), plus \n \n “(II)  1 percentage point for the plan year for which the determination under this paragraph is being made and for each prior plan year beginning after  December 31, 1988 , over \n \n \n “(ii)  the funded current liability percentage as of the beginning of the plan year for which such determination is being made. \n \n \n “(C)   Special rules for contingent events .— In the case of any unpredictable contingent event benefit with respect to which the event on which such benefits are contingent occurs after  December 17, 1987 — “(i)   Amortization amount .— For purposes of subparagraph (A)(ii), the amount determined under this clause for any plan year is the amount which would be determined if the unpredictable contingent event benefit liability were amortized in equal annual installments over 10 plan years (beginning with the plan year in which such event occurs). \n \n “(ii)   Benefit and contributions not taken into account .— For purposes of subparagraph (B), in determining the funded current liability percentage for any plan year, there shall not be taken into account— “(I)  the unpredictable contingent event benefit liability, or \n \n “(II)  any amount contributed to the plan which is attributable to clause (i) (and any income allocable to such amount). \n \n \n \n “(D)   Steel employee plan .— For purposes of this paragraph, the term ‘steel employee plan’ means any plan if— “(i)  such plan is maintained by a steel company, and \n \n “(ii)  substantially all of the employees covered by such plan are employees of such company. \n \n \n “(E)   Other definitions .— For purposes of this paragraph— “(i)   Steel company .— The term ‘steel company’ means any corporation described in section 806(b) of the Steel Import Stabilization Act [ section 806(b) of Pub. L. 98–573 ,  19 U.S.C. 2253  note]. \n \n “(ii)   Other definitions .— The terms ‘current liability’, ‘funded current liability percentage’, and ‘unpredictable contingent event benefit’ have the meanings given such terms by [former] section 412( l ) of the 1986 Code (as added by this section). \n \n \n “(F)   Special rule .— The provisions of this paragraph shall apply in the case of a company which was originally incorporated on  April 25, 1927 , in Michigan and reincorporated on  June 3, 1968 , in Delaware in the same manner as if such company were a steel company.”\nPub. L. 100–203, title IX, §\u202f9304(a)(3) ,  Dec. 22, 1987 ,  101 Stat. 1330–344 , provided that:  “The amendments made by this subsection [amending this section and  section 1082 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 1987 .”\nPub. L. 100–203, title IX, §\u202f9304(b)(3) ,  Dec. 22, 1987 ,  101 Stat. 1330–347 , provided that:  “The amendments made by this subsection [amending this section and  section 1082 of Title 29 ] shall apply with respect to plan years beginning after 1988.”\nPub. L. 100–203, title IX, §\u202f9304(e)(3) ,  Dec. 22, 1987 ,  101 Stat. 1330–351 , provided that:  “The amendments made by this subsection [amending this section and  section 1082 of Title 29 ] shall apply to plan years beginning after  December 31, 1987 .”\nPub. L. 100–203, title IX, §\u202f9305(d) ,  Dec. 22, 1987 ,  101 Stat. 1330–352 , provided that:  “The amendments made by this section [amending this section and sections 414 and 4971 of this title and  section 1082 of Title 29 ] shall apply with respect to plan years beginning after  December 31, 1987 .”\nPub. L. 100–203, title IX, §\u202f9306(f) ,  Dec. 22, 1987 ,  101 Stat. 1330–355 , as amended by  Pub. L. 101–239, title VII, §\u202f7881(c)(3) ,  Dec. 19, 1989 ,  103 Stat. 2439 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 1083, 1084, and 1085a of Title 29, Labor] shall apply in the case of— “(A)  any application submitted after  December 17, 1987 , and \n \n “(B)  any waiver granted pursuant to such an application. \n \n \n “(2)   Special rule for application requirement.— “(A)   In general .— The amendments made by subsections (a)(1)(A) and (a)(2)(A) [amending this section and  section 1083 of Title 29 ] shall apply to plan years beginning after  December 31, 1987 . \n \n “(B)   Transitional rule for years beginning in 1988 .— In the case of any plan year beginning during calendar 1988, [former] section 412(d)(4) of the 1986 Code and section 303(d)(1) of ERISA [ 29 U.S.C. 1083(d)(1) ] (as added by subsection (a)(1) [and (2)]) shall be applied by substituting ‘6th month’ for ‘3rd month’. \n \n \n “(3)   Subsection  (b).— The amendments made by subsection (b) [amending this section and  section 1083 of Title 29 ] shall apply to waivers for plan years beginning after  December 31, 1987 . For purposes of applying such amendments, the number of waivers which may be granted for plan years after  December 31, 1987 , shall be determined without regard to any waivers granted for plan years beginning before  January 1, 1988 . \n \n “(4)   Subsection  (d).— The amendments made by subsection (d) [amending this section and  section 1083 of Title 29 ] shall apply to applications submitted more than 90 days after the date of the enactment of this Act [ Dec. 22, 1987 ].”\nAmendment by section 9307(a)(1), (b)(1), (e)(1) of  Pub. L. 100–203  applicable to years beginning after  Dec. 31, 1987 , except that subsec. (b)(2)(B)(iv) and (3)(B)(ii) of this section (as amended by  section 9307(a)(1)(A) of Pub. L. 100–203 ) is applicable to gains and losses established in years beginning after  Dec. 31, 1987 , see  section 9307(f) of Pub. L. 100–203 , as amended, set out as a note under  section 404 of this title .\nPub. L. 99–272, title XI, §\u202f11015(a)(3) ,  Apr. 7, 1986 ,  100 Stat. 267 , provided that:  “The amendments made by this subsection [enacting  section 1085a of Title 29 , Labor, and amending this section and  section 1061 of Title 29 ] shall apply with respect to applications for waivers, extensions, and modifications filed on or after the date of the enactment of this Act [ Apr. 7, 1986 ].”\nAmendment by sections 11015(b)(2) and 11016(c)(4) of  Pub. L. 99–272  effective  Jan. 1, 1986 , with certain exceptions, see  section 11019 of Pub. L. 99–272 , set out as a note under  section 1341 of Title 29 .\nAmendment by  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 96–364  effective  Sept. 26, 1980 , see  section 210(a) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nAmendment by  section 1901(a)(63) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nSection applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , and, in the case of plans in existence on  Jan. 1, 1974 , for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nPub. L. 103–465, title VII, §\u202f769 ,  Dec. 8, 1994 ,  108 Stat. 5041 , as amended by  Pub. L. 105–34, title XV, §\u202f1508(a) ,  Aug. 5, 1997 ,  111 Stat. 1067 ;  Pub. L. 108–218, title II, §\u202f201(a) ,  Apr. 10, 2004 ,  118 Stat. 608 ;  Pub. L. 109–280, title I, §\u202f115(d)(1) , (e)(1),  Aug. 17, 2006 ,  120 Stat. 856 , provided that: \n “(a)   Funding Rules Not To Apply to Certain Plans .— Any changes made by this Act [ Pub. L. 103–465 ] to section 412 of the Internal Revenue Code of 1986 or to part 3 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1081  et seq.] shall not apply to— “(1)  a plan which is, on the date of enactment of this Act [ Dec. 8, 1994 ], subject to a restoration payment schedule order issued by the Pension Benefit Guaranty Corporation that meets the requirements of section 1.412(c)(1)–3 of the Treasury Regulations, or \n \n “(2)  a plan established by an affected air carrier (as defined under section 4001(a)(14)(C)(ii)(I) of such Act [ 29 U.S.C. 1301(a)(14)(C)(ii)(I) ]) and assumed by a new plan sponsor pursuant to the terms of a written agreement with the Pension Benefit Guaranty Corporation dated  January 5, 1993 , and approved by the United States Bankruptcy Court for the District of Delaware on  December 30, 1992 . \n \n \n “(b)   Change in Actuarial Method .— Any amortization installments for bases established under [former] section 412(b) of the Internal Revenue Code of 1986 and section 302(b) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(b) ] for plan years beginning after  December 31, 1987 , and before  January 1, 1993 , by reason of nonelective changes under the frozen entry age actuarial cost method shall not be included in the calculation of offsets under [former] section 412( l )(1)(A)(ii) of such Code and section 302(d)(1)(A)(ii) of such Act for the 1st 5 plan years beginning after  December 31, 1994 .”\n[ Pub. L. 109–280, title I, §\u202f115(d)(2) ,  Aug. 17, 2006 ,  120 Stat. 856 , provided that:  “The amendment made by paragraph (1) [amending  section 769 of Pub. L. 103–465 , set out above] shall apply to plan years beginning after  December 31, 2005 .” \n]\n[ Pub. L. 109–280, title I, §\u202f115(e)(2) ,  Aug. 17, 2006 ,  120 Stat. 856 , provided that:  “The amendment made by paragraph (1) [amending  section 769 of Pub. L. 103–465 , set out above] shall take effect on  December 31, 2007 , and shall apply to plan years beginning after such date.” \n]\n[ Pub. L. 108–218, title II, §\u202f201(b) ,  Apr. 10, 2004 ,  118 Stat. 608 , provided that:  “The amendments made by this section [amending  section 769 of Pub. L. 103–465 , set out above] shall apply to plan years beginning after  December 31, 2003 .” \n]\n[ Pub. L. 105–34, title XV, §\u202f1508(b) ,  Aug. 5, 1997 ,  111 Stat. 1068 , provided that:  “The amendment made by this section [amending  section 769 of Pub. L. 103–465 , set out above] shall apply to plan years beginning after  December 31, 1996 .” \n]\nPub. L. 100–203, title IX, §\u202f9303(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–342 , provided that:  “Effective with respect to plan years beginning after  December 31, 1987 , the provisions of the regulations prescribed under section 412(c)(2) of the 1986 Code which permit asset valuations to be based on a range between 85 percent and 115 percent of average value shall have no force and effect with respect to plans other than multiemployer plans (as defined in section 414(f) of the 1986 Code). The Secretary of the Treasury or his delegate shall amend such regulations to carry out the purposes of the preceding sentence.”\nFor special rules on applicability of amendments by subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .\nPub. L. 109–280, title II, §\u202f206 ,  Aug. 17, 2006 ,  120 Stat. 889 , provided that:  \n “In the case of a multiemployer plan that is a party to an agreement that was approved by the Pension Benefit Guaranty Corporation prior to  June 30, 2005 , and that— “(1)  increases benefits, and \n \n “(2)  provides for special withdrawal liability rules under section 4203(f) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1383 [(f)]), \n \n\n the amendments made by sections 201, 202, 211, and 212 of this Act [enacting sections 431 and 432 of this title and sections 1084 and 1085 of Title 29, Labor, and amending this section,  section 4971 of this title , and sections 1081, 1082, and 1132 of Title 29] shall not apply to the benefit increases under any plan amendment adopted prior to  June 30, 2005 , that are funded pursuant to such agreement if the plan is funded in compliance with such agreement (and any amendments thereto).”\nFor special rules on applicability of this section to certain plans maintained by commercial airlines, see  section 402 of Pub. L. 109–280 , set out as a note under  section 430 of this title .\nPub. L. 108–218, title I, §\u202f102(c) ,  Apr. 10, 2004 ,  118 Stat. 602 , provided that:  “An election under section 302(d)(12) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(d)(12) ] or [former] section 412( l )(12) of the Internal Revenue Code of 1986 (as added by this section) with respect to a plan shall not invalidate any obligation (pursuant to a collective bargaining agreement in effect on the date of the election) to provide benefits, to change the accrual of benefits, or to change the rate at which benefits become nonforfeitable under the plan.”\nPub. L. 105–34, title XV, §\u202f1521(d)(2) ,  Aug. 5, 1997 ,  111 Stat. 1070 , provided that:  \n “The unamortized balance (as of the close of the plan year preceding the plan’s first year beginning in 1999) of any amortization base established under [former] section 412(c)(7)(D)(iii) of such Code [ 26 U.S.C. 412(c)(7)(D)(iii) ] and section 302(c)(7)(D)(iii) of such Act [ 29 U.S.C. 1082(c)(7)(D)(iii) ] (as repealed by subsection (c)(3)) for any plan year beginning before 1999 shall be amortized in equal annual installments (until fully amortized) over a period of years equal to the excess of— \n “(A)  20 years, over \n \n “(B)  the number of years since the amortization base was established.”\nPub. L. 93–406, title II, §\u202f1013(d) ,  Sept. 2, 1974 ,  88 Stat. 923 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule .— In the case of any multiemployer plan (as defined in section 414(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) to which section 412 of such Code applies, if— “(A)  on  January 1, 1974 , the contributions under the plan were based on a percentage of pay, \n \n “(B)  the actuarial assumptions with respect to pay are reasonably related to past and projected experience, and \n \n “(C)  the rates of interest under the plan are determined on the basis of reasonable actuarial assumptions, \n \n\n \u2001the plan may elect (in such manner and at such time as may be provided under regulations prescribed by the Secretary of the Treasury or his delegate) to fund the unfunded past service liability under the plan existing as of the date 12 months following the first date on which such section 412 first applies to the plan by charging the funding standard account with an equal annual percentage of the aggregate pay of all participants in the plan in lieu of the level dollar charges to such account required under clauses (i), (ii), and (iii) of [former] section 412(b)(2)(B) of such Code and section 302(b)(2)(B)(i), (ii), and (iii) of this Act [section 1082(b)(2)(B)(i), (ii), and (iii) of Title 29, Labor]. \n \n “(2)   Limitation .— In the case of a plan which makes an election under paragraph (1), the aggregate of the charges required under such paragraph for a plan year shall not be less than the interest on the unfunded past service liabilities described in clauses (i), (ii), and (iii) of [former] section 412(b)(2)(B) of the Internal Revenue Code of 1986.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Section 410 shall be applied as if all employees of each of the employers who are parties to the collective-bargaining agreement and who are subject to the same benefit computation formula under the plan were employed by a single employer.\nSections 401(a)(4) and 411(d)(3) shall be applied as if all participants who are subject to the same benefit computation formula and who are employed by employers who are parties to the collective bargaining agreement were employed by a single employer.\nFor purposes of section 401(a), in determining whether the plan of an employer is for the exclusive benefit of his employees and their beneficiaries, all plan participants shall be considered to be his employees.\nSection 411 (other than subsection (d)(3)) shall be applied as if all employers who have been parties to the collective-bargaining agreement constituted a single employer, except that the application of any rules with respect to breaks in service shall be made under regulations prescribed by the Secretary of Labor.\nThe minimum funding standard provided by section 412 shall be determined as if all participants in the plan were employed by a single employer.\nEach applicable limitation provided by section 404(a) shall be determined as if all participants in the plan were employed by a single employer. The amounts contributed to or under the plan by each employer who is a party to the agreement, for the portion of his taxable year which is included within such a plan year, shall be considered not to exceed such a limitation if the anticipated employer contributions for such plan year (determined in a manner consistent with the manner in which actual employer contributions for such plan year are determined) do not exceed such limitation. If such anticipated contributions exceed such a limitation, the portion of each such employer’s contributions which is not deductible under section 404 shall be determined in accordance with regulations prescribed by the Secretary.\nFor purposes of this subsection, employees of employee representatives shall be treated as employees of an employer described in subsection (a)(1) if such representatives meet the requirements of sections 401(a)(4) and 410 with respect to such employees.\nNotwithstanding subsection (a), in the case of a plan (and trust forming part thereof) which covers any professional employee, paragraph (1) shall be applied by substituting “section 410(a)” for “section 410”, and paragraph (2) shall not apply.\nSection 410(a) shall be applied as if all employees of each of the employers who maintain the plan were employed by a single employer.\nFor purposes of sections 401(a) and 408(c), in determining whether the plan of an employer is for the exclusive benefit of his employees and their beneficiaries all plan participants shall be considered to be his employees.\nSection 411 shall be applied as if all employers who maintain the plan constituted a single employer, except that the application of any rules with respect to breaks in service shall be made under regulations prescribed by the Secretary of Labor.\nIn the case of a plan established after  December 31, 1988 , each employer shall be treated as maintaining a separate plan for purposes of section 412 unless such plan uses a method for determining required contributions which provides that any employer contributes not less than the amount which would be required if such employer maintained a separate plan.\nIn the case of a plan not described in subparagraph (A), the requirements of section 412 shall be determined as if all participants in the plan were employed by a single employer unless the plan administrator elects not later than the close of the first plan year of the plan beginning after the date of enactment of the Technical and Miscellaneous Revenue Act of 1988 to have the provisions of subparagraph (A) apply. An election under the preceding sentence shall take effect for the plan year in which made and, once made, may be revoked only with the consent of the Secretary.\nIn the case of a plan established after  December 31, 1988 , each applicable limitation provided by section 404(a) shall be determined as if each employer were maintaining a separate plan.\nIn the case of a plan not described in subparagraph (A), each applicable limitation provided by section 404(a) shall be determined as if all participants in the plan were employed by a single employer, except that if an election is made under paragraph (4)(B), subparagraph (A) shall apply to such plan.\nIf this subparagraph applies, the amounts contributed to or under the plan by each employer who maintains the plan (for the portion of the taxable year included within a plan year) shall be considered not to exceed any such limitation if the anticipated employer contributions for such plan year (determined in a reasonable manner not inconsistent with regulations prescribed by the Secretary) do not exceed such limitation. If such anticipated contributions exceed such a limitation, the portion of each such employer’s contributions which is not deductible under section 404 shall be determined in accordance with regulations prescribed by the Secretary.\nExcept as provided in subparagraph (B), allocations of amounts under paragraphs (4), (5), and (6) among the employers maintaining the plan shall not be inconsistent with regulations prescribed for this purpose by the Secretary.\nFor purposes of applying paragraphs (4)(A) and (6)(A), the assets and liabilities of each plan shall be treated as the assets and liabilities which would be allocated to a plan maintained by the employer if the employer withdrew from the multiple employer plan.\nThe requirements of section 412 shall be determined as if all participants in the plan were employed by a single employer.\nParagraphs (1), (2), (3), and (5) of subsection (c) shall apply.\nEach applicable limitation provided by section 404(a) shall be determined as if all participants in the plan were employed by a single employer. The amounts contributed to or under the plan by each employer who maintains the plan (for the portion of the taxable year included within a plan year) shall be considered not to exceed such applicable limitation if the anticipated employer contributions for such plan year of all employers (determined in a reasonable manner not inconsistent with regulations prescribed by the Secretary) do not exceed such limitation. If such anticipated contributions exceed such limitation, the portion of each such employer’s contributions which is not deductible under section 404 shall be determined in accordance with regulations prescribed by the Secretary.\nAllocations of amounts under paragraph (3) and subsection (c)(5) among the employers maintaining the plan shall not be inconsistent with the regulations prescribed for this purpose by the Secretary.\nIf the pooled plan provider of a plan described in paragraph (1)(B) does not perform substantially all of the administrative duties which are required of the provider under paragraph (3)(A)(i) for any plan year, the Secretary may provide that the determination as to whether the plan meets the requirements under this title applicable to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, shall be made in the same manner as would be made without regard to paragraph (1).\nThe Secretary may perform audits, examinations, and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this subsection.\nFor purposes of this paragraph, in determining whether a person meets the requirements of this paragraph to be a pooled plan provider with respect to any plan, all persons who perform services for the plan and who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one person.\nExcept with respect to the administrative duties of the pooled plan provider described in subparagraph (A)(i), each employer in a plan which has a pooled plan provider shall be treated as the plan sponsor with respect to the portion of the plan attributable to employees of such employer (or beneficiaries of such employees).\nAn employer or pooled plan provider shall not be treated as failing to meet a requirement of guidance issued by the Secretary under this paragraph if, before the issuance of such guidance, the employer or pooled plan provider complies in good faith with a reasonable interpretation of the provisions of this subsection to which such guidance relates.\nThe Secretary shall publish model plan language which meets the requirements of this subsection and of paragraphs (43) and (44) of section 3 of the Employee Retirement Income Security Act of 1974 and which may be adopted in order for a plan to be treated as a plan described in paragraph (1)(B).\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (b)(6) and (e), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 is classified generally to part 1 (§\u202f1381 et seq.) of subtitle E of subchapter III of chapter 18 of Title 29, Labor. Sections 3(43), (44), 402(a)(2), and 412 of the Act are classified to sections 1002(43), (44), 1102(a)(2), and 1112, respectively, of Title 29. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe date of enactment of the Technical and Miscellaneous Revenue Act of 1988, referred to in subsec. (c)(4)(B), is the date of enactment of  Pub. L. 100–647 , which was approved  Nov. 10, 1988 .\n2019—Subsec. (c)(2).  Pub. L. 116–94, §\u202f101(a)(2) , substituted “sections 401(a) and 408(c)” for “section 401(a)”.\nSubsec. (e).  Pub. L. 116–94, §\u202f101(a)(1) , added subsec. (e).\n2018—Subsec. (b)(6).  Pub. L. 115–141, §\u202f401(a)(86) , substituted “and section 4971(e)” for “and the last sentence of section 4971(a)” in concluding provisions.\n2014—Subsec. (d).  Pub. L. 113–97  added subsec. (d).\n1990—Subsec. (c)(7)(B).  Pub. L. 101–508  substituted “Assets” for “Asset” in heading.\n1988—Subsec. (b)(9).  Pub. L. 100–647, §\u202f1011(h)(10) , added par. (9).\nSubsec. (c).  Pub. L. 100–647, §\u202f6058(c) , struck out at end “Allocations of amounts under paragraphs (4), (5), and (6), among the employers maintaining the plan, shall not be inconsistent with regulations prescribed for this purpose by the Secretary.”\nSubsec. (c)(4).  Pub. L. 100–647, §\u202f6058(a) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The minimum funding standard provided by section 412 shall be determined as if all participants in the plan were employed by a single employer.”\nSubsec. (c)(6).  Pub. L. 100–647, §\u202f6058(b) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “Each applicable limitation provided by section 404(a) shall be determined as if all participants in the plan were employed by a single employer. The amounts contributed to or under the plan by each employer who maintains the plan, for the portion of this taxable year which is included within such a plan year, shall be considered not to exceed such a limitation if the anticipated employer contributions for such plan year (determined in a reasonable manner not inconsistent with regulations prescribed by the Secretary) do not exceed such limitation. If such anticipated contributions exceed such a limitation, the portion of each such employer’s contributions which is not deductible under section 404 shall be determined in accordance with regulations prescribed by the Secretary.”\nSubsec. (c)(7).  Pub. L. 100–647, §\u202f6058(c) , added par. (7).\n1980—Subsec. (b)(6).  Pub. L. 96–364  inserted provisions relating to withdrawal liability of employer.\n1976—Subsecs. (b), (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 116–94  applicable to plan years beginning after  Dec. 31, 2020 , and not to be construed as limiting the authority of the Secretary of the Treasury or the Secretary’s delegate to provide for the proper treatment of a failure to meet any requirement applicable under the Internal Revenue Code of 1986 with respect to one employer (and its employees) in a multiple employer plan, see  section 101(e) of Pub. L. 116–94 , set out as an Effective Date of 2019 Amendment note under  section 408 of this title .\nAmendment by  Pub. L. 113–97  applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as a note under  section 401 of this title .\nAmendment by  section 1011(h)(10) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6058(d) ,  Nov. 10, 1988 ,  102 Stat. 3699 , provided that:  “Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to plan years beginning after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by  Pub. L. 96–364  effective  Sept. 26, 1980 , see  section 210(a) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nSection applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , and, in the case of plans in existence on  Jan. 1, 1974 , for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nPub. L. 117–328, div. T, title I, §\u202f106(f) ,  Dec. 29, 2022 ,  136 Stat. 5288 , provided that: \n “(1)   Plan notifications .— The Secretary of the Treasury (or the Secretary’s delegate), in consultation with the Secretary of Labor, shall modify the model plan language published under section 413(e)(5) of the Internal Revenue Code of 1986 to include language that requires participating employers be notified that the plan is subject to the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq.] and that such employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees. \n \n “(2)   Model plans for multiple employer 403(b) plans .— For plans to which section 403(b)(15)(A) of the Internal Revenue Code of 1986 applies (other than a plan maintained for its employees by a State, a political subdivision of a State, or an agency or instrumentality of any one or more of the foregoing), the Secretary of the Treasury (or the Secretary’s delegate), in consultation with the Secretary of Labor, shall publish model plan language similar to model plan language published under section 413(e)(5) of such Code. \n \n “(3)   Educational outreach to employers exempt from tax .— The Secretary of the Treasury (or the Secretary’s delegate), in consultation with the Secretary of Labor, shall provide education and outreach to increase awareness to employers described in section 501(c)(3) of the Internal Revenue Code of 1986, and which are exempt from tax under section 501(a) of such Code, that multiple employer plans are subject to the Employee Retirement Income Security Act of 1974 and that such employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'For purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, all employees of all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C)) shall be treated as employed by a single employer. With respect to a plan adopted by more than one such corporation, the applicable limitations provided by section 404(a) shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary.\nIf application of paragraph (2) causes 2 or more entities to be a controlled group or to no longer be in a controlled group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.\nExcept as provided in paragraph (2), for purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, under regulations prescribed by the Secretary, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (b).\nNotwithstanding subparagraph (A), for purposes of this subsection and subsection (m), an organization that is a nonqualified church-controlled organization shall be aggregated with 1 or more other nonqualified church-controlled organizations, or with an organization that is not exempt from tax under section 501, and treated as a single employer with such other organization, if at least 80 percent of the directors or trustees of such other organization are either representatives of, or directly or indirectly controlled by, such nonqualified church-controlled organization. For purposes of this subparagraph, the term “nonqualified church-controlled organization” means a church-controlled tax-exempt organization described in section 501(c)(3) that is not a qualified church-controlled organization (as defined in section 3121(w)(3)(B)).\nThe church or convention or association of churches with which an organization described in subparagraph (A) is associated (within the meaning of subsection (e)(3)(D)), or an organization designated by such church or convention or association of churches, may elect to treat such organizations as a single employer for a plan year. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe.\nFor purposes of subparagraph (A), in the case of a church plan, an employer may elect to treat churches (as defined in section 403(b)(12)(B)) separately from entities that are not churches (as so defined), without regard to whether such entities maintain separate church plans. Such election, once made, shall apply to all succeeding plan years unless revoked with notice provided to the Secretary in such manner as the Secretary shall prescribe.\nFor purposes of this part, the term “governmental plan” means a plan established and maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The term “governmental plan” also includes any plan to which the Railroad Retirement Act of 1935 or 1937 applies and which is financed by contributions required under that Act and any plan of an international organization which is exempt from taxation by reason of the International Organizations Immunities Act ( 59 Stat. 669 ). The term “governmental plan” includes a plan which is established and maintained by an Indian tribal government (as defined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accordance with section 7871(d)), or an agency or instrumentality of either, and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the performance of commercial activities (whether or not an essential government function).\nFor purposes of this part, the term “church plan” means a plan established and maintained (to the extent required in paragraph (2)(B)) for its employees (or their benefici\xadaries) by a church or by a convention or association of churches which is exempt from tax under section 501.\nA plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches.\nA church or a convention or association of churches which is exempt from tax under section 501 shall be deemed the employer of any individual included as an employee under subparagraph (B).\nAn organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches.\nIf a plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 fails to meet one or more of the requirements of this subsection and corrects its failure to meet such requirements within the correction period, the plan shall be deemed to meet the requirements of this subsection for the year in which the correction was made and for all prior years.\nIf a correction is not made within the correction period, the plan shall be deemed not to meet the requirements of this subsection beginning with the date on which the earliest failure to meet one or more of such requirements occurred.\nFor purposes of sections 403(b)(1)(A) and 404(a)(10), a minister described in clause (i)(I) shall be treated as employed by the minister’s own employer which is an organization described in section 501(c)(3) and exempt from tax under section 501(a).\nIf a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry participates in a church plan (within the meaning of this section) and in the exercise of such ministry is employed by an employer not otherwise participating in such church plan, then such employer may exclude such minister from being treated as an employee of such employer for purposes of applying sections 401(a)(3), 401(a)(4), and 401(a)(5), as in effect on  September 1, 1974 , and sections 401(a)(4), 401(a)(5), 401(a)(26), 401(k)(3), 401(m), 403(b)(1)(D) (including section 403(b)(12)), and 410 to any stock bonus, pension, profit-sharing, or annuity plan (including an annuity described in section 403(b) or a retirement income account described in section 403(b)(9)). The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purpose of, and prevent the abuse of, this subparagraph.\nIf any compensation is taken into account in determining the amount of any contributions made to, or benefits to be provided under, any church plan, such compensation shall not also be taken into account in determining the amount of any contributions made to, or benefits to be provided under, any other stock bonus, pension, profit-sharing, or annuity plan which is not a church plan.\nIn the case of a contribution to a church plan made on behalf of a minister described in subparagraph (A)(i)(II), such contribution shall not be included in the gross income of the minister to the extent that such contribution would not be so included if the minister was an employee of a church.\nFor purposes of this subsection, all trades or businesses (whether or not incorporated) which are under common control within the meaning of subsection (c) are considered a single employer.\nNotwithstanding paragraph (1), a plan is a multiemployer plan on and after its termination date under title IV of the Employee Retirement Income Security Act of 1974 if the plan was a multiemployer plan under this subsection for the plan year preceding its termination date.\nFor any plan year which began before the date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, the term “multiemployer plan” means a plan described in this subsection as in effect immediately before that date.\nFor purposes of paragraph (1), in the case of any plan established by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments), where the contributions of employing units are designated as employee contributions but where any employing unit picks up the contributions, the contributions so picked up shall be treated as employer contributions.\nFor purposes of this part, the term “defined contribution plan” means a plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant’s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s account.\nFor purposes of this part, the term “defined benefit plan” means any plan which is not a defined contribution plan.\nA trust which forms a part of a plan shall not constitute a qualified trust under section 401 and a plan shall be treated as not described in section 403(a) unless in the case of any merger or consolidation of the plan with, or in the case of any transfer of assets or liabilities of such plan to, any other trust plan after  September 2, 1974 , each participant in the plan would (if the plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the plan had then terminated). The preceding sentence does not apply to any multiemployer plan with respect to any transaction to the extent that participants either before or after the transaction are covered under a multiemployer plan to which Title IV of the Employee Retirement Income Security Act of 1974 applies.\nA plan involved in a spin-off which is described in clause (ii), (iii), or (iv) shall not be taken into account for purposes of this paragraph, except that the amount determined under subparagraph (C)(ii) shall be increased by the amount of assets allocated to such plan.\nA plan is described in this clause if, after such spin-off, such plan is maintained by an employer who is not a member of the same controlled group as the employer maintaining the original plan.\nA plan as described in this clause if, after the spin-off, any employer maintaining such plan (and any member of the same controlled group as such employer) does not maintain any other plan remaining after the spin-off which is also maintained by another employer (or member of the same controlled group as such other employer) which maintained the plan in existence before the spin-off.\nA plan is described in this clause if, pursuant to the transaction involving the spin-off, the plan is terminated.\nFor purposes of this subparagraph, the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or ( o ).\nThis paragraph does not apply to any multiemployer plan with respect to any spin-off to the extent that participants either before or after the spin-off are covered under a multiemployer plan to which title IV of the Employee Retirement Income Security Act of 1974 applies.\nExcept as provided by the Secretary, rules similar to the rules of this paragraph shall apply to transactions similar to spin-offs.\nFor purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer.\nFor purposes of this subsection, the term “service organization” means an organization the principal business of which is the performance of services.\nThe term “organization” means a corporation, partnership, or other organization.\nIn determining ownership, the principles of section 318(a) shall apply, except that community property laws shall be disregarded for purposes of determining ownership.\nIf the application of clause (ii) causes two or more entities to be an affiliated service group, or to no longer be in an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies.\nIn the case of any leased employee, paragraph (1) shall apply only for purposes of determining whether the requirements listed in paragraph (3) are met for periods after the close of the period referred to in paragraph (2)(B).\nIn the case of a person who is an employee of the recipient (whether by reason of this subsection or otherwise), for purposes of the requirements listed in paragraph (3), years of service for the recipient shall be determined by taking into account any period for which such employee would have been a leased employee but for the requirements of paragraph (2)(B).\nThe term “highly compensated employee” has the meaning given such term by section 414(q).\nThe term “related persons” has the same meaning as when used in section 144(a)(3).\nThe rules of subsections (b), (c), (m), and ( o ) shall apply.\nEach plan shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders.\nDuring any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the plan administrator, by a court of competent jurisdiction, or otherwise), the plan administrator shall separately account for the amounts (hereinafter in this paragraph referred to as the “segregated amounts”) which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order.\nIf within the 18-month period described in subparagraph (E) the order (or modification thereof) is determined to be a qualified domestic relations order, the plan administrator shall pay the segregated amounts (including any interest thereon) to the person or persons entitled thereto.\nAny determination that an order is a qualified domestic relations order which is made after the close of the 18-month period described in subparagraph (E) shall be applied prospectively only.\nFor purposes of this paragraph, the 18-month period described in this subparagraph is the 18-month period beginning with the date on which the first payment would be required to be made under the domestic relations order.\nThe term “alternate payee” means any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.\nThis subsection shall not apply to any plan to which section 401(a)(13) does not apply. For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies.\nWith respect to the requirements of subsections (a) and (k) of section 401, section 403(b), section 409(d), and section 457(d), a plan shall not be treated as failing to meet such requirements solely by reason of payments to an alternative payee pursuant to a qualified domestic relations order.\nFor purposes of this title, a distribution or payment from a governmental plan (as defined in subsection (d)) or a church plan (as described in subsection (e)) or an eligible deferred compensation plan (within the meaning of section 457(b)) shall be treated as made pursuant to a qualified domestic relations order if it is made pursuant to a domestic relations order which meets the requirement of clause (i) of paragraph (1)(A).\nIf a distribution or payment from an eligible deferred compensation plan described in section 457(b) is made pursuant to a qualified domestic relations order, rules similar to the rules of section 402(e)(1)(A) shall apply to such distribution or payment.\nIn prescribing regulations under this subsection and section 401(a)(13), the Secretary of Labor shall consult with the Secretary.\nAn employee shall be treated as a 5-percent owner for any year if at any time during such year such employee was a 5-percent owner (as defined in section 416(i)(1)) of the employer.\nAn employee is in the top-paid group of employees for any year if such employee is in the group consisting of the top 20 percent of the employees when ranked on the basis of compensation paid during such year.\nFor purposes of this subsection, the term “compensation” has the meaning given such term by section 415(c)(3).\nSubsections (b), (c), (m), (n), and ( o ) shall be applied before the application of this subsection.\nFor purposes of this subsection and subsection (r), employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)) shall not be treated as employees.\nIn the case of a church plan (as defined in subsection (e)), no employee shall be considered an officer, a person whose principal duties consist of supervising the work of other employees, or a highly compensated employee for any year unless such employee is a highly compensated employee under paragraph (1) for such year.\nFor purposes of sections 129(d)(8) and 410(b), an employer shall be treated as operating separate lines of business during any year if the employer for bona fide business reasons operates separate lines of business.\nFor purposes of this subsection, the term “highly compensated employee percentage” means the percentage which highly compensated employees performing services for the line of business are of all employees performing services for the line of business.\nFor purposes of this subsection, benefits which are attributable to services provided to a line of business shall be treated as provided by such line of business.\nFor purposes of this subsection, the term “separate line of business” includes an operating unit in a separate geographic area separately operated for a bona fide business reason.\nThis subsection shall not apply in the case of any affiliated service group (within the meaning of section 414(m)).\nExcept as provided in this subsection, the term “compensation” has the meaning given such term by section 415(c)(3).\nAn employer may elect not to include as compensation any amount which is contributed by the employer pursuant to a salary reduction agreement and which is not includible in the gross income of an employee under section 125, 132(f)(4), 402(e)(3), 402(h), or 403(b).\nThe Secretary shall by regulation provide for alternative methods of determining compensation which may be used by an employer, except that such regulations shall provide that an employer may not use an alternative method if the use of such method discriminates in favor of highly compensated employees (within the meaning of subsection (q)).\nFor purposes of this subsection, the term “applicable provision” means any provision which specifically refers to this subsection.\nAll employees who are treated as employed by a single employer under subsection (b), (c), or (m) shall be treated as employed by a single employer for purposes of an applicable section. The provisions of subsection ( o ) shall apply with respect to the requirements of an applicable section.\nFor purposes of this subsection, the term “applicable section” means section 79, 106, 117(d), 125, 127, 129, 132, 137, 274(j), 505, or 4980B.\nThe amount determined under this subparagraph with respect to any plan is the maximum amount of the elective deferrals that the individual would have been permitted to make under the plan in accordance with the limitations referred to in paragraph (1)(A) during the period of qualified military service if the individual had continued to be employed by the employer during such period and received compensation as determined under paragraph (7). Proper adjustment shall be made to the amount determined under the preceding sentence for any elective deferrals actually made during the period of such qualified military service.\nFor purposes of this paragraph, the term “elective deferral” has the meaning given such term by section 402(g)(3); except that such term shall include any deferral of compensation under an eligible deferred compensation plan (as defined in section 457(b)).\nReferences in subparagraphs (A) and (B) to elective deferrals shall be treated as including references to employee contributions.\nIf any plan suspends the obligation to repay any loan made to an employee from such plan for any part of any period during which such employee is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code), whether or not qualified military service, such suspension shall not be taken into account for purposes of section 72(p), 401(a), or 4975(d)(1).\nFor purposes of this subsection, the term “qualified military service” means any service in the uniformed services (as defined in chapter 43 of title 38, United States Code) by any individual if such individual is entitled to reemployment rights under such chapter with respect to such service.\nFor purposes of this subsection, the term “individual account plan” means any defined contribution plan (including any tax-sheltered annuity plan under section 403(b), any simplified employee pension under section 408(k), any qualified salary reduction arrangement under section 408(p), and any eligible deferred compensation plan (as defined in section 457(b))).\nFor benefit accrual purposes, an employer sponsoring a retirement plan may treat an individual who dies or becomes disabled (as defined under the terms of the plan) while performing qualified military service with respect to the employer maintaining the plan as if the individual has resumed employment in accordance with the individual’s reemployment rights under chapter 43 of title 38, United States Code, on the day preceding death or disability (as the case may be) and terminated employment on the actual date of death or disability. In the case of any such treatment, and subject to subparagraphs (B) and (C), any full or partial compliance by such plan with respect to the benefit accrual requirements of paragraph (8) with respect to such individual shall be treated for purposes of paragraph (1) as if such compliance were required under such chapter 43.\nSubparagraph (A) shall apply only if all individuals performing qualified military service with respect to the employer maintaining the plan (as determined under subsections (b), (c), (m), and ( o )) who die or became disabled as a result of performing qualified military service prior to reemployment by the employer are credited with service and benefits on reasonably equivalent terms.\nThis subsection shall not apply to any retirement plan to which chapter 43 of title 38, United States Code, does not apply.\nFor purposes of this section, any reference to chapter 43 of title 38, United States Code, shall be treated as a reference to such chapter as in effect on  December 12, 1994  (without regard to any subsequent amendment).\nNotwithstanding subparagraph (A)(i), for purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii), 2 2 \u202fSee References in Text note below.  an individual shall be treated as having been severed from employment during any period the individual is performing service in the uniformed services described in section 3401(h)(2)(A).\nIf an individual elects to receive a distribution by reason of clause (i), the plan shall provide that the individual may not make an elective deferral or employee contribution during the 6-month period beginning on the date of the distribution.\nSubparagraph (A)(iii) shall apply only if all employees of an employer (as determined under subsections (b), (c), (m), and ( o )) performing service in the uniformed services described in section 3401(h)(2)(A) are entitled to receive differential wage payments on reasonably equivalent terms and, if eligible to participate in a retirement plan maintained by the employer, to make contributions based on the payments on reasonably equivalent terms. For purposes of applying this subparagraph, the provisions of paragraphs (3), (4), and (5) of section 410(b) shall apply.\nFor purposes of this paragraph, the term “differential wage payment” has the meaning given such term by section 3401(h)(2).\nAn applicable employer plan shall not be treated as failing to meet any requirement of this title solely because the plan permits an eligible participant to make additional elective deferrals in any plan year.\nIn the case of a year beginning after  December 31, 2006 , the Secretary shall adjust annually the $5,000 amount in subparagraph (B)(i) and the $2,500 amount in subparagraph (B)(ii) for increases in the cost-of-living at the same time and in the same manner as adjustments under section 415(d); except that the base period taken into account shall be the calendar quarter beginning  July 1, 2005 , and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500.\nIn the case of a year beginning after  December 31, 2024 , the Secretary shall adjust annually the dollar amount described in subparagraph (B)(iii) in the manner provided under clause (i) of this subparagraph, except that the base period taken into account shall be the calendar quarter beginning  July 1, 2023 .\nFor purposes of this paragraph, plans described in clauses (i), (ii), and (iv) of paragraph (6)(A) that are maintained by the same employer (as determined under subsection (b), (c), (m) or ( o )) shall be treated as a single plan, and plans described in clause (iii) of paragraph (6)(A) that are maintained by the same employer shall be treated as a single plan.\nAn applicable employer plan shall be treated as failing to meet the nondiscrimination requirements under section 401(a)(4) with respect to benefits, rights, and features unless the plan allows all eligible participants to make the same election with respect to the additional elective deferrals under this subsection.\nFor purposes of subparagraph (A), all plans maintained by employers who are treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 shall be treated as 1 plan, except that a plan described in clause (i) of section 410(b)(6)(C) shall not be treated as a plan of the employer until the expiration of the transition period with respect to such plan (as determined under clause (ii) of such section).\nThe term “elective deferral” has the meaning given such term by subsection (u)(2)(C).\nThis subsection shall not apply to a participant for any year for which a higher limitation applies to the participant under section 457(b)(3).\nExcept as provided in subparagraph (C), in the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000, paragraph (1) shall apply only if any additional elective deferrals are designated Roth contributions (as defined in section 402A(c)(1)) made pursuant to an employee election.\nIn the case of an applicable employer plan with respect to which subparagraph (A) applies to any participant for a plan year, paragraph (1) shall not apply to the plan unless the plan provides that any eligible participant may make the participant’s additional elective deferrals as designated Roth contributions.\nSubparagraph (A) shall not apply in the case of an applicable employer plan described in paragraph (6)(A)(iv).\nThe Secretary may provide by regulations that an eligible participant may elect to change the participant’s election to make additional elective deferrals if the participant’s compensation is determined to exceed the limitation under subparagraph (A) after the election is made.\nIn the case of a year beginning after  December 31, 2024 , the Secretary shall adjust annually the $145,000 amount in subparagraph (A) for increases in the cost-of-living at the same time and in the same manner as adjustments under 415(d); except that the base period taken into account shall be the calendar quarter beginning  July 1, 2023 , and any increase under this subparagraph which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000.\nSubparagraph (A) shall not apply to an election by an employee unless the election is made no later than the date which is 90 days after the date of the first elective contribution with respect to the employee under the arrangement.\nSubparagraph (A) shall not apply to any election by an employee unless the amount of any distribution by reason of the election is equal to the amount of elective contributions made with respect to the first payroll period to which the eligible automatic contribution arrangement applies to the employee and any succeeding payroll period beginning before the effective date of the election (and earnings attributable thereto).\nA withdrawal described in paragraph (1) (subject to the limitation of paragraph (2)(C)) shall not be taken into account for purposes of section 401(k)(3) or for purposes of applying the limitation under section 402(g)(1).\nExcept as provided in this subsection, the requirements of this title shall be applied to any defined benefit plan or applicable defined contribution plan which is part of an eligible combined plan in the same manner as if each such plan were not a part of the eligible combined plan. In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.\nThe benefit requirements of this subparagraph are met with respect to the defined benefit plan forming part of the eligible combined plan if the accrued benefit of each participant derived from employer contributions, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant’s final average pay. For purposes of this clause, final average pay shall be determined using the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer.\nIf the defined benefit plan under clause (i) is an applicable defined benefit plan as defined in section 411(a)(13)(B) which meets the interest credit requirements of section 411(b)(5)(B)(i), the plan shall be treated as meeting the requirements of clause (i) with respect to any plan year if each participant receives a pay credit for the year which is not less than the percentage of compensation determined in accordance with the following table: \n \n \n \n \n \n \n \u2001\u2001\u2001If the participant’s age as of the \u2001\u2001\u2001\u2001beginning of the year is— The percentage is— \n \n \n 30 or less 2\u202f\u202f \n Over 30 but less than 40 4\u202f\u202f \n 40 or over but less than 50 6\u202f\u202f \n 50 or over 8.\nFor purposes of this subparagraph, years of service shall be determined under the rules of paragraphs (4), (5), and (6) of section 411(a), except that the plan may not disregard any year of service because of a participant making, or failing to make, any elective deferral with respect to the qualified cash or deferred arrangement to which subparagraph (C) applies.\nAn applicable defined contribution plan shall not be treated as failing to meet the requirements of clause (i) because the employer makes nonelective contributions under the plan but such contributions shall not be taken into account in determining whether the requirements of clause (i)(II) are met.\nIn the case of a defined benefit plan or applicable defined contribution plan forming part of an eligible combined plan, the requirements of this subparagraph are met if all contributions and benefits under each such plan, and all rights and features under each such plan, must be provided uniformly to all participants.\nThe requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.\nThe requirements of this clause are met if the applicable defined contribution plan and defined benefit plan forming part of an eligible combined plan meet the requirements of sections 401(a)(4) and 410(b) without being combined with any other plan.\nA qualified cash or deferred arrangement which is included in an applicable defined contribution plan forming part of an eligible combined plan shall be treated as meeting the requirements of section 401(k)(3)(A)(ii) if the requirements of paragraph (2)(C) are met with respect to such arrangement.\nIn applying section 401(m)(11) to any matching contribution with respect to a contribution to which paragraph (2)(C) applies, the contribution requirement of paragraph (2)(C) and the notice requirements of paragraph (5)(B) shall be substituted for the requirements otherwise applicable under clauses (i) and (ii) of section 401(m)(11)(A).\nA defined benefit plan and applicable defined contribution plan forming part of an eligible combined plan for any plan year shall be treated as meeting the requirements of section 416 for the plan year.\nThe requirements of this subparagraph are met if the requirements of clauses (ii) and (iii) are met.\nThe requirements of this clause are met if each employee eligible to participate in the arrangement is, within a reasonable period before any year, given notice of the employee’s rights and obligations under the arrangement.\nSection 414(k) shall not apply to an eligible combined plan.\nAn eligible combined plan shall be treated as a single plan for purposes of sections 6058 and 6059.\nThe term “applicable defined contribution plan” means a defined contribution plan which includes a qualified cash or deferred arrangement.\nThe term “qualified cash or deferred arrangement” has the meaning given such term by section 401(k)(2).\nAll employers that are treated as a single employer under subsection (b) or (c) shall be treated as a single employer for purposes of determining if a plan was maintained by more than one employer under subparagraphs (B) and (C) of paragraph (1).\nIf a plan falls within the definition of a CSEC plan under this subsection (without regard to this paragraph), such plan shall be a CSEC plan unless the plan sponsor elects not later than the close of the first plan year of the plan beginning after  December 31, 2013 , not to be treated as a CSEC plan. An election under the preceding sentence shall take effect for such plan year and, once made, may be revoked only with the consent of the Secretary.\nIf a plan described in subparagraph (A) is treated as a CSEC plan, section 104 of the Pension Protection Act of 2006, as amended by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, shall cease to apply to such plan as of the first date as of which such plan is treated as a CSEC plan.\nParagraph (1) shall not apply to a transfer or merger unless the participant’s or beneficiary’s total accrued benefit immediately after the transfer or merger is equal to or greater than the participant’s or beneficiary’s total accrued benefit immediately before the transfer or merger, and such total accrued benefit is nonforfeitable after the transfer or merger.\nA plan or annuity contract shall not fail to be considered to be described in section 401(a) or 403(b) merely because such plan or annuity contract engages in a transfer or merger described in this subsection.\nThe term “church or convention or association of churches” includes an organization described in subparagraph (A) or (B)(ii) of subsection (e)(3).\nThe term “annuity contract” includes a custodial account described in section 403(b)(7) and a retirement income account described in section 403(b)(9).\nNothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the minimum funding standards under sections 412 and 430 or to prevent or restore an impermissible forfeiture in accordance with section 411.\nNotwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allocations previously made in excess of such limitations.\nThe Secretary may issue regulations or other guidance of general applicability specifying how benefit overpayments and their recoupment or non-recoupment from a participant or beneficiary shall be taken into account for purposes of satisfying any requirement applicable to a plan to which paragraph (1) applies.\nFor purposes of this subsection, the term “annual reminder notice” means the notice described in section 111(c) of the Employee Retirement Income Security Act of 1974.\nAny plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error.\nIf the requirements of paragraph (2)(B) are satisfied, the employer will not be required to provide eligible employees with the missed amount of elective deferrals resulting from a reasonable administrative error described in paragraph (2)(A)(i) or (ii) through a qualified nonelective contribution, or otherwise.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nPub. L. 117–328, div. T, title I, §\u202f109 ,  Dec. 29, 2022 ,  136 Stat. 5290 , provided that, applicable to taxable years beginning after  Dec. 31, 2024 , subsection (v)(2) of this section is amended as follows:\n(1) in subparagraph (B)—\n(A) in clause (i), by inserting the following before the period: “(the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year)”; and\n(B) in clause (ii), by inserting the following before the period: “(the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year)”;\n(2) in subparagraph (C), by adding at the end the following: “In the case of a year beginning after  December 31, 2025 , the Secretary shall adjust annually the adjusted dollar amounts applicable under clauses (i) and (ii) of subparagraph (E) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base period taken into account shall be the calendar quarter beginning  July 1, 2024 .”; and\n(3) by adding at the end the following new subparagraph:\n(E) Adjusted dollar amount\nFor purposes of subparagraph (B), the adjusted dollar amount is—\n(i) in the case of clause (i) of subparagraph (B), the greater of—\n(I) $10,000, or\n(II) an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause, or\n(ii) in the case of clause (ii) of subparagraph (B), the greater of—\n(I) $5,000, or\n(II) an amount equal to equal to 150 percent of the dollar amount which would be in effect under such clause for 2025 for eligible participants not described in the parenthetical in such clause.\nSee 2022 Amendment notes below.\nThe Railroad Retirement Act of 1935 or 1937, referred to in subsec. (d), means  act Aug. 29, 1935, ch. 812 ,  49 Stat. 867 , known as the Railroad Retirement Act of 1935. The Railroad Retirement Act of 1935 was amended generally by  act June 24, 1937, ch. 382, part I ,  50 Stat. 307 , and was known as the Railroad Retirement Act of 1937. The Railroad Retirement Act of 1937 was amended generally and redesignated the Railroad Retirement Act of 1974 by  Pub. L. 93–444, title I ,  Oct. 16, 1974 ,  88 Stat. 1305  and is classified generally to subchapter IV (§\u202f231 et seq.) of chapter 9 of Title 45, Railroads. For complete classification of this Act to the Code, see Tables.\nThe International Organizations Immunities Act ( 59 Stat. 669 ), referred to in subsec. (d), is  act Dec. 29, 1945, ch. 652, title I ,  59 Stat. 669 , which is classified principally to subchapter XVIII (§\u202f288 et seq.) of chapter 7 of Title 22, Foreign Relations and Intercourse. The Act also amended several other laws including the Internal Revenue Code of 1939. For exemption from taxation of income of international organizations and of the compensation of employees thereof, see sections 892 and 893 of this title. For complete classification of this Act to the Code, see Short Title note set out under  section 288 of Title 22  and Tables.\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (f)(3), (5), (6)(B), (F), ( l )(1), (2)(E), and (bb)(2)(B), (3), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 , which is classified principally to chapter 18 (§\u202f1001 et seq.) of Title 29, Labor. Title IV of the Act is classified principally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29. Sections 3(37)(A)(iii), 104(b), and 111(c) of the Act are classified to sections 1002(37)(A)(iii), 1024(b), and 1031(c), respectively, of Title 29. Section 4403(b) and (c) of the Employee Retirement Income Security Act of 1974 probably means section 4303(b) and (c) of such Act which is classified to section 1453(b) and (c) of Title 29. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe date of the enactment of the Multiemployer Pension Plan Amendments Act of 1980, referred to in subsec. (f)(4), (5), means the date of the enactment of  Pub. L. 96–364 , which was approved  Sept. 26, 1980 .\nEffective date of the Multiemployer Pension Plan Amendments Act of 1980, referred to in subsec. (f)(5), probably means the date of enactment of the Multiemployer Pension Plan Amendments Act of 1980, which was approved  Sept. 26, 1980 .\nThe Pension Protection Act of 2006, referred to in subsecs. (f)(6)(A) and (y)(1)(A), (3)(B), is  Pub. L. 109–280 ,  Aug. 17, 2006 ,  120 Stat. 780 . Section 104 of the Act is set out as a note under  section 401 of this title . For complete classification of this Act to the Code, see Short Title of 2006 Amendment note set out under  section 1001 of Title 29 , Labor, and Tables.\nSection 403(b)(7)(A)(ii), referred to in subsec. (u)(12)(B)(i), probably means  section 403(b)(7)(A)(ii) of this title  prior to amendment by  Pub. L. 116–94, div. O, title I, §\u202f109(c)(2) ,  Dec. 20, 2019 ,  133 Stat. 3151 .\nThe Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, referred to in subsec. (y)(1)(A)(ii), (3)(B), is  Pub. L. 111–192 ,  June 25, 2010 ,  124 Stat. 1280 . For complete classification of this Act to the Code, see Short Title of 2010 Amendment note set out under  section 1001 of Title 29 , Labor, and Tables.\n2022—Subsec. (b).  Pub. L. 117–328, §\u202f315(a)(1) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsec. (m)(6)(B).  Pub. L. 117–328, §\u202f315(a)(2)(A) , (B), designated existing provisions as cl. (i), inserted heading, and added cls. (ii) and (iii).\nSubsec. (m)(6)(B)(i).  Pub. L. 117–328, §\u202f315(a)(2)(C) , substituted “apply, except that community property laws shall be disregarded for purposes of determining ownership” for “apply”.\nSubsec. (p)(1)(B).  Pub. L. 117–328, §\u202f339(a)(2) , inserted concluding provisions.\nSubsec. (p)(1)(B)(ii).  Pub. L. 117–328, §\u202f339(a)(1) , inserted “or Tribal” after “State”.\nSubsec. (v)(2)(B)(i).  Pub. L. 117–328, §\u202f109(a)(1) , inserted before period at end “(the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year)”.\nSubsec. (v)(2)(B)(ii).  Pub. L. 117–328, §\u202f117(b)(1)(A) , substituted “except as provided in clause (iii), the applicable” for “the applicable”.\nPub. L. 117–328, §\u202f109(a)(2) , inserted before period at end “(the adjusted dollar amount, in the case of an eligible participant who would attain age 60 but would not attain age 64 before the close of the taxable year)”.\nSubsec. (v)(2)(B)(iii).  Pub. L. 117–328, §\u202f117(b)(1)(B) , added cl. (iii).\nSubsec. (v)(2)(C).  Pub. L. 117–328, §\u202f117(b)(2) , designated existing provisions as cl. (i), inserted heading, and added cl. (ii).\nPub. L. 117–328, §\u202f109(c) , inserted at end “In the case of a year beginning after  December 31, 2025 , the Secretary shall adjust annually the adjusted dollar amounts applicable under clauses (i) and (ii) of subparagraph (E) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base period taken into account shall be the calendar quarter beginning  July 1, 2024 .”\nSubsec. (v)(2)(E).  Pub. L. 117–328, §\u202f109(b) , added subpar. (E).\nSubsec. (v)(7).  Pub. L. 117–328, §\u202f603(a) , added par. (7).\nSubsec. (aa).  Pub. L. 117–328, §\u202f301(b)(1) , added subsec. (aa).\nSubsec. (bb).  Pub. L. 117–328, §\u202f320(b) , added subsec. (bb).\nSubsec. (cc).  Pub. L. 117–328, §\u202f350(a) , added subsec. (cc).\n2020—Subsec. (y)(1)(D).  Pub. L. 116–136  added subpar. (D).\n2018—Subsec. ( l )(2)(G).  Pub. L. 115–141, §\u202f401(a)(87) , substituted “depository institutions” for “banks” in heading.\nSubsec. (u)(6).  Pub. L. 115–141, §\u202f401(a)(88) , substituted “section 457(b)))” for “section 457(b))”.\nSubsec. (x)(1).  Pub. L. 115–141, §\u202f401(a)(89) , substituted “is” for “are”.\nSubsec. (y)(1)(C)(i).  Pub. L. 115–141, §\u202f401(a)(90) , struck out “of such Code” after “section 501(c)(3)”.\nSubsec. (y)(2).  Pub. L. 115–141, §\u202f401(a)(91) , substituted “subparagraphs” for “subparagraph”.\n2015—Subsec. (c).  Pub. L. 114–113, §\u202f336(a)(1) , designated existing provisions as par. (1), inserted heading, substituted “Except as provided in paragraph (2), for purposes” for “For purposes”, and added par. (2).\nSubsec. (z).  Pub. L. 114–113, §\u202f336(d)(1) , added subsec. (z).\n2014—Subsec. (n)(3)(C).  Pub. L. 113–295, §\u202f221(a)(19)(B)(i) , struck out “120,” after “117(d),”.\nSubsec. (t)(2).  Pub. L. 113–295, §\u202f221(a)(19)(B)(ii) , struck out “120,” after “117(d),”.\nSubsec. (v)(2)(B)(i), (ii).  Pub. L. 113–295, §\u202f221(a)(55) , amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) listed applicable dollar amounts for taxable years 2002 to 2006 and thereafter for an applicable employer plan other than a plan described in section 401(k)(11) or 408(p) and an applicable employer plan described in section 401(k)(11) or 408(p), respectively.\nSubsec. (y).  Pub. L. 113–97, §\u202f201 , added subsec. (y).\nSubsec. (y)(1)(C).  Pub. L. 113–235, §\u202f3(b)(1) , added subpar. (C).\nSubsec. (y)(2).  Pub. L. 113–235, §\u202f3(b)(2) , substituted “subparagraph (B) and (C) of paragraph (1)” for “paragraph (1)(B)”.\nSubsec. (y)(3).  Pub. L. 113–97, §\u202f203(a) , added par. (3).\n2008—Subsec. ( l )(2)(B)(i)(I).  Pub. L. 110–458, §\u202f101(d)(2)(E) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “the amount determined under section 431(c)(6)(A)(i) in the case of a multiemployer plan (and the sum of the funding shortfall and target normal cost determined under section 430 in the case of any other plan), over”.\nSubsec. ( l )(2)(G).  Pub. L. 110–289, §\u202f1604(b)(4) , which directed substitution of “bridge depository institution” for “bridge bank”, was executed by making the substitution wherever appearing in text, to reflect the probable intent of Congress.\nSubsec. (u).  Pub. L. 110–245, §\u202f105(b)(1)(B) , inserted “and to differential wage payments to members on active duty” after “USERRA” in heading.\nSubsec. (u)(9) to (11).  Pub. L. 110–245, §\u202f104(b) , added par. (9) and redesignated former pars. (9) and (10) as (10) and (11), respectively.\nSubsec. (u)(12).  Pub. L. 110–245, §\u202f105(b)(1)(A) , added par. (12).\nSubsec. (w)(3)(B) to (D).  Pub. L. 110–458, §\u202f109(b)(4) , inserted “and” after comma at end of subpar. (B), redesignated subpar. (D) as (C), and struck out former subpar. (C) which read as follows: “under which, in the absence of an investment election by the participant, contributions described in subparagraph (B) are invested in accordance with regulations prescribed by the Secretary of Labor under section 404(c)(5) of the Employee Retirement Income Security Act of 1974, and”.\nSubsec. (w)(5)(D), (E).  Pub. L. 110–458, §\u202f109(b)(5) , added subpars. (D) and (E).\nSubsec. (w)(6).  Pub. L. 110–458, §\u202f109(b)(6) , inserted “or for purposes of applying the limitation under section 402(g)(1)” before period at end.\nSubsec. (x)(1).  Pub. L. 110–458, §\u202f109(c)(1) , inserted at end “In the case of a termination of the defined benefit plan and the applicable defined contribution plan forming part of an eligible combined plan, the plan administrator shall terminate each such plan separately.”\n2007—Subsec. (f)(6)(A)(ii)(I).  Pub. L. 110–28, §\u202f6611(a)(2)(A) , substituted “for each of the 3 plan years immediately preceding the first plan year for which the election under this paragraph is effective with respect to the plan,” for “for each of the 3 plan years immediately before the date of enactment of the Pension Protection Act of 2006,”.\nSubsec. (f)(6)(B).  Pub. L. 110–28, §\u202f6611(a)(2)(B) , substituted “starting with any plan year beginning on or after  January 1, 1999 , and ending before  January 1, 2008 , as designated by the plan in the election made under subparagraph (A)(ii)” for “starting with the first plan year ending after the date of the enactment of the Pension Protection Act of 2006”.\nSubsec. (f)(6)(E).  Pub. L. 110–28, §\u202f6611(b)(2) , substituted “if it is a plan sponsored by an organization which is described in section 501(c)(5) and exempt from tax under section 501(a) and which was established in Chicago, Illinois, on  August 12, 1881 .” for “if it is a plan—\n“(i) that was established in Chicago, Illinois, on  August 12, 1881 ; and\n“(ii) sponsored by an organization described in section 501(c)(5) and exempt from tax under section 501(a).”\nSubsec. (f)(6)(F).  Pub. L. 110–28, §\u202f6611(a)(2)(C) , added subpar. (F).\n2006—Subsec. (d).  Pub. L. 109–280, §\u202f906(a)(1) , inserted at end “The term ‘governmental plan’ includes a plan which is established and maintained by an Indian tribal government (as defined in section 7701(a)(40)), a subdivision of an Indian tribal government (determined in accordance with section 7871(d)), or an agency or instrumentality of either, and all of the participants of which are employees of such entity substantially all of whose services as such an employee are in the performance of essential governmental functions but not in the performance of commercial activities (whether or not an essential government function).”\nSubsec. (f)(6).  Pub. L. 109–280, §\u202f1106(b) , added par. (6).\nSubsec. (h)(2).  Pub. L. 109–280, §\u202f906(b)(1)(C) , inserted “or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments),” after “foregoing,”.\nSubsec. ( l )(2)(B)(i)(I).  Pub. L. 109–280, §\u202f114(c) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “the amount determined under section 412(c)(7)(A)(i) with respect to the plan, over”.\nSubsec. (w).  Pub. L. 109–280, §\u202f902(d)(1) , added subsec. (w).\nSubsec. (x).  Pub. L. 109–280, §\u202f903(a) , added subsec. (x).\n2004—Subsec. (q)(7).  Pub. L. 108–311  substituted “subsection” for “section”.\n2002—Subsec. (v)(2)(D).  Pub. L. 107–147, §\u202f411 ( o )(3), added subpar. (D).\nSubsec. (v)(3)(A)(i).  Pub. L. 107–147, §\u202f411 ( o )(4), substituted “sections 401(a)(30), 402(h), 403(b), 408, 415(c), and 457(b)(2) (determined without regard to section 457(b)(3))” for “section 402(g), 402(h), 403(b), 404(a), 404(h), 408(k), 408(p), 415, or 457”.\nSubsec. (v)(3)(B).  Pub. L. 107–147, §\u202f411 ( o )(5), substituted “section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416” for “section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 403(b)(12), 408(k), 408(p), 408B, 410(b), or 416”.\nSubsec. (v)(4)(B).  Pub. L. 107–147, §\u202f411 ( o )(6), inserted before period at end “,\u2000except that a plan described in clause (i) of section 410(b)(6)(C) shall not be treated as a plan of the employer until the expiration of the transition period with respect to such plan (as determined under clause (ii) of such section)”.\nSubsec. (v)(5).  Pub. L. 107–147, §\u202f411 ( o )(7)(A), struck out “,\u2000with respect to any plan year,” before “a participant” in introductory provisions.\nSubsec. (v)(5)(A).  Pub. L. 107–147, §\u202f411 ( o )(7)(B), amended subpar. (A) generally. Prior to amendment, subpar (A) read as follows: “who has attained the age of 50 before the close of the plan year, and”.\nSubsec. (v)(5)(B).  Pub. L. 107–147, §\u202f411 ( o )(7)(C), substituted “plan (or other applicable) year” for “plan year”.\nSubsec. (v)(6)(C).  Pub. L. 107–147, §\u202f411 ( o )(8), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “This subsection shall not apply to an applicable employer plan described in subparagraph (A)(iii) for any year to which section 457(b)(3) applies.”\n2001—Subsec. (p)(10).  Pub. L. 107–16, §\u202f635(b) , substituted “section 409(d), and section 457(d)” for “and section 409(d)”.\nSubsec. (p)(11).  Pub. L. 107–16, §\u202f635(a) , in heading substituted “certain other plans” for “governmental and church plans” and in text inserted “or an eligible deferred compensation plan (within the meaning of section 457(b))” after “subsection (e))”.\nSubsec. (p)(12), (13).  Pub. L. 107–16, §\u202f635(c) , added par. (12) and redesignated former par. (12) as (13).\nSubsec. (v).  Pub. L. 107–16, §\u202f631(a) , added subsec. (v).\n2000—Subsec. (s)(2).  Pub. L. 106–554  substituted “section 125, 132(f)(4), 402(e)(3)” for “section 125, 402(e)(3)”.\n1998—Subsec. (q)(5).  Pub. L. 105–206  made technical amendment to  Pub. L. 104–188, §\u202f1434(c)(1)(E) . See 1996 Amendment note below.\n1997—Subsec. (e)(5)(A).  Pub. L. 105–34, §\u202f1601(d)(6)(A) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “For purposes of this part—\n“(i)  In general .—An employee of a church or a convention or association of churches shall include a duly ordained, commissioned, or licensed minister of a church who, in connection with the exercise of his or her ministry—\n“(I) is a self-employed individual (within the meaning of section 401(c)(1)(B)), or\n“(II) is employed by an organization other than an organization described in section 501(c)(3).\n“(ii)  Treatment as employer and employee.—\n“(I)  Self-employed .—A minister described in clause (i)(I) shall be treated as his or her own employer which is an organization described in section 501(c)(3) and which is exempt from tax under section 501(a).\n“(II)  Others .—A minister described in clause (i)(II) shall be treated as employed by an organization described in section 501(c)(3) and exempt from tax under section 501(a).”\nSubsec. (e)(5)(C).  Pub. L. 105–34, §\u202f1522(a)(1) , substituted “not otherwise participating” for “not eligible to participate”.\nSubsec. (e)(5)(E).  Pub. L. 105–34, §\u202f1522(a)(2) , added subpar. (E).\nSubsec. (n)(3)(C).  Pub. L. 105–34, §\u202f1601(h)(2)(D)(i) , inserted “137,” after “132,”.\nSubsec. (q)(7), (9).  Pub. L. 105–34, §\u202f1601(d)(7) , redesignated par. (7), relating to certain employees not considered highly compensated and excluded employees under pre-ERISA rules for church plans, as (9).\nSubsec. (t)(2).  Pub. L. 105–34, §\u202f1601(h)(2)(D)(ii) , inserted “137,” after “132,”.\n1996—Subsecs. (b), (c).  Pub. L. 104–188, §\u202f1421(b)(9)(C) , inserted “408(p),” after “408(k),”.\nSubsec. (e)(5).  Pub. L. 104–188, §\u202f1461(a) , added par. (5).\nSubsec. (m)(4)(B).  Pub. L. 104–188, §\u202f1421(b)(9)(C) , inserted “408(p),” after “408(k),”.\nSubsec. (n)(2)(C).  Pub. L. 104–188, §\u202f1454(a) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “such services are of a type historically performed, in the business field of the recipient, by employees.”\nSubsec. (n)(3)(B).  Pub. L. 104–188, §\u202f1421(b)(9)(C) , inserted “408(p),” after “408(k),”.\nSubsec. (q)(1).  Pub. L. 104–188, §\u202f1431(a) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “ In general .—The term ‘highly compensated employee’ means any employee who, during the year or the preceding year—\n“(A) was at any time a 5-percent owner,\n“(B) received compensation from the employer in excess of $75,000,\n“(C) received compensation from the employer in excess of $50,000 and was in the top-paid group of employees for such year, or\n“(D) was at any time an officer and received compensation greater than 50 percent of the amount in effect under section 415(b)(1)(A) for such year.\nThe Secretary shall adjust the $75,000 and $50,000 amounts under this paragraph at the same time and in the same manner as under section 415(d).”\nSubsec. (q)(2), (3).  Pub. L. 104–188, §\u202f1431(c)(1)(A) , redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: “ Special rule for current year .—In the case of the year for which the relevant determination is being made, an employee not described in subparagraph (B), (C), or (D) of paragraph (1) for the preceding year (without regard to this paragraph) shall not be treated as described in subparagraph (B), (C), or (D) of paragraph (1) unless such employee is a member of the group consisting of the 100 employees paid the greatest compensation during the year for which such determination is being made.”\nSubsec. (q)(4).  Pub. L. 104–188, §\u202f1434(b)(1) , amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “For purposes of this subsection—\n“(A)  In general .—The term ‘compensation’ means compensation within the meaning of section 415(c)(3).\n“(B)  Certain provisions not taken into account .—The determination under subparagraph (A) shall be made—\n“(i) without regard to sections 125, 402(e)(3), and 402(h)(1)(B), and\n“(ii) in the case of employer contributions made pursuant to a salary reduction agreement, without regard to section 403(b).”\nPub. L. 104–188, §\u202f1431(c)(1)(A) , redesignated par. (7) as (4).\nSubsec. (q)(5).  Pub. L. 104–188, §\u202f1434(c)(1)(E) , as amended by  Pub. L. 105–206, §\u202f6018(c) , struck out “under paragraph (4) or the number of officers taken into account under paragraph (5)” after “top-paid group” in introductory provisions.\nPub. L. 104–188, §\u202f1431(c)(1)(A) , redesignated par. (8) as (5) and struck out former par. (5) which read as follows: “ Special rules for treatment of officers.—\n“(A)  Not more than 50 officers taken into account .—For purposes of paragraph (1)(D), no more than 50 employees (or, if lesser, the greater of 3 employees or 10 percent of the employees) shall be treated as officers.\n“(B)  At least 1 officer taken into account .—If for any year no officer of the employer is described in paragraph (1)(D), the highest paid officer of the employer for such year shall be treated as described in such paragraph.”\nSubsec. (q)(6).  Pub. L. 104–188, §\u202f1431(b)(1) , (c)(1)(A), redesignated par. (9) as (6) and struck out former par. (6) which related to treatment of families of 5-percent owners or of highly compensated employees.\nSubsec. (q)(7).  Pub. L. 104–188, §\u202f1462(a) , added par. (7) relating to certain employees not considered highly compensated and excluded employees under pre-ERISA rules for church plans.\nPub. L. 104–188, §\u202f1431(c)(1)(A) , redesignated par. (10), relating to coordination with other provisions, as (7). Former par. (7) redesignated (4).\nSubsec. (q)(8) to (12).  Pub. L. 104–188, §\u202f1431(c)(1)(A) , redesignated pars. (8) to (11) as (5) to (8), respectively, and struck out par. (12) which related to simplified method for determining highly compensated employees.\nSubsec. (r)(2)(A).  Pub. L. 104–188, §\u202f1431(c)(1)(D) , substituted “subsection (q)(5)” for “subsection (q)(8)”.\nSubsec. (s)(2).  Pub. L. 104–188, §\u202f1434(b)(2) , inserted “not” after “elect” in heading and in text.\nSubsec. (u).  Pub. L. 104–188, §\u202f1704(n)(1) , added subsec. (u).\n1992—Subsec. (n)(5)(C)(iii)(I).  Pub. L. 102–318, §\u202f521(b)(20) , substituted “402(e)(3)” for “402(a)(8)”.\nSubsec. (q)(7)(B)(i).  Pub. L. 102–318, §\u202f521(b)(21) , substituted “402(e)(3)” for “402(a)(8)”.\nSubsec. (s)(2).  Pub. L. 102–318, §\u202f521(b)(22) , substituted “402(e)(3)” for “402(a)(8)”.\n1990—Subsec. (n)(2)(B).  Pub. L. 101–508  struck out “(6 months in the case of core health benefits)” after “1 year”.\n1989—Subsec. (n)(3)(C).  Pub. L. 101–239, §\u202f7813(b) , amended directory language of  Pub. L. 100–647, §\u202f3011(b)(4) , see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(6)(A) , struck out “89,” after “79,”.\nSubsec. (p)(10).  Pub. L. 101–239, §\u202f7811(m)(5) , inserted “section” before “403(b)”.\nSubsec. (p)(11).  Pub. L. 101–239, §\u202f7841(a)(2) , added par. (11) and redesignated former par. (11) as (12).\nSubsec. (r)(1).  Pub. L. 101–140, §\u202f204(b)(2) , substituted “sections 129(d)(8) and 410(b)” for “section 410(b)”.\nPub. L. 101–140, §\u202f203(a)(6)(B) , substituted “section 410(b)” for “sections 89 and 410(b)”.\nSubsec. (t)(2).  Pub. L. 101–239, §\u202f7813(b) , amended directory language of  Pub. L. 100–647, §\u202f3011(b)(5) , see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(6)(C) , struck out “89,” after “79,”.\n1988—Subsec. (k)(2).  Pub. L. 100–647, §\u202f1011A(b)(3) , inserted “72(d) (relating to treatment of employee contributions as separate contract),” after “purposes of sections”.\nSubsec. ( l ).  Pub. L. 100–647, §\u202f2005(c)(1) , (2), substituted “Merger” for “Mergers” in heading, designated existing provision as par. (1), inserted par. (1) heading, and added par. (2).\nSubsec. ( l )(2)(G).  Pub. L. 100–647, §\u202f6067(a) , added subpar. (G).\nSubsec. (m)(4)(A).  Pub. L. 100–647, §\u202f1011(h)(5) , substituted “(16), (17), and (26)” for “and (16)”.\nSubsec. (m)(4)(C), (D).  Pub. L. 100–647, §\u202f1011B(a)(16) , struck out subpars. (C) and (D) which read as follows:\n“(C) section 105(h), and\n“(D) section 125.”\nSubsec. (n)(3)(A).  Pub. L. 100–647, §\u202f1011(h)(5) , substituted “(16), (17), and (26)” for “and (16)”.\nSubsec. (n)(3)(C).  Pub. L. 100–647, §\u202f3011(b)(4) , as amended by  Pub. L. 101–239, §\u202f7813(b) , struck out “162(i)(2), 162(k),” after “132,” and substituted “505, and 4980B” for “and 505”.\nPub. L. 100–647, §\u202f1011B(a)(19) , inserted “162(i)(2), 162(k),” after “132,”.\nSubsec. ( o ).  Pub. L. 100–647, §\u202f1011(e)(4) , inserted “or any requirement under section 457” after “or (n)(3)”.\nSubsec. (p)(4)(B).  Pub. L. 100–647, §\u202f1018(t)(8)(E) , substituted “means the earlier of” for “means earlier of” and struck out “in” at beginning of cls. (i) and (ii).\nSubsec. (p)(9).  Pub. L. 100–647, §\u202f1018(t)(8)(G) , inserted at end “For purposes of this title, except as provided in regulations, any distribution from an annuity contract under section 403(b) pursuant to a qualified domestic relations order shall be treated in the same manner as a distribution from a plan to which section 401(a)(13) applies.”\nSubsec. (p)(10).  Pub. L. 100–647, §\u202f1018(t)(8)(F) , inserted “,\u2000403(b),” after “section 401”.\nSubsec. (q)(1).  Pub. L. 100–647, §\u202f1011(i)(1) , inserted at end “The Secretary shall adjust the $75,000 and $50,000 amounts under this paragraph at the same time and in the same manner as under section 415(d).”\nSubsec. (q)(1)(D).  Pub. L. 100–647, §\u202f1011(d)(8) , substituted “50” for “150” and “415(b)(1)(A)” for “415(c)(1)(A)”.\nSubsec. (q)(6)(C).  Pub. L. 100–647, §\u202f1011(i)(2) , added subpar. (C).\nSubsec. (q)(8).  Pub. L. 100–647, §\u202f1011(i)(4)(A) , inserted “or the number of officers taken into account under paragraph (5)” after “under paragraph (4)”.\nPub. L. 100–647, §\u202f1011(i)(3)(A)(ii) , substituted “Except as provided by the Secretary, the employer” for “The employer” in last sentence.\nSubsec. (q)(8)(F).  Pub. L. 100–647, §\u202f1011(i)(3)(A)(i) , struck out subpar. (F) which read as follows: “employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).”\nSubsec. (q)(11).  Pub. L. 100–647, §\u202f1011(i)(3)(B) , added par. (11).\nSubsec. (q)(12).  Pub. L. 100–647, §\u202f3021(b)(1) , added par. (12).\nSubsec. (r)(3).  Pub. L. 100–647, §\u202f3021(b)(2)(A) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is—\n“(A) not less than one-half, and\n“(B) not more than twice,\nthe percentage which highly compensated employees are of all employees of the employer. An employer shall be treated as meeting the requirements of subparagraph (A) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business.”\nSubsec. (s).  Pub. L. 100–647, §\u202f1011(j)(1) , substituted “any applicable provision” for “this part” in introductory provisions.\nSubsec. (s)(1).  Pub. L. 100–647, §\u202f1011(j)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘compensation’ means compensation for service performed for an employer which (taking into account the provisions of this chapter) is currently includible in gross income.”\nSubsec. (s)(2) to (4).  Pub. L. 100–647, §\u202f1011(j)(2) , added par. (4), redesignated former pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: “The Secretary shall prescribe regulations for the determination of the compensation of an employee who is a self-employed individual (within the meaning of section 401(c)(1)) which are based on the principles of paragraph (1).”\nSubsec. (t)(1).  Pub. L. 100–647, §\u202f1011B(a)(20) , struck out “of section 414” before “shall be treated” and “shall apply with”.\nSubsec. (t)(2).  Pub. L. 100–647, §\u202f3011(b)(5) , as amended by  Pub. L. 101–239, §\u202f7813(b) , struck out “162(i)(2), 162(k),” after “132,” and substituted “505, or 4980B” for “or 505”.\nPub. L. 100–647, §\u202f1011B(a)(17) , inserted “162(i)(2), 162(k),” after “132,”.\n1987—Subsec. (b).  Pub. L. 100–203  struck out “the minimum funding standard of section 412, the tax imposed by section 4971, and” after “one such corporation,”.\n1986—Subsec. (k)(2).  Pub. L. 99–514, §\u202f1117(c) , inserted reference to section 401(m) (relating to nondiscrimination tests for matching requirements and employee contributions).\nSubsec. (m)(2)(B)(ii).  Pub. L. 99–514, §\u202f1114(b)(11) , substituted “highly compensated employees (within the meaning of section 414(q))” for “officers, highly compensated employees, or owners”.\nSubsec. (m)(5).  Pub. L. 99–514, §\u202f1301(j)(4) , substituted “section 144(a)(3)” for “section 103(b)(6)(C)”.\nSubsec. (m)(7).  Pub. L. 99–514, §\u202f1852(f) , amended directory language of  Pub. L. 98–369, §\u202f526(d)(2) , to correct an error, and did not involve any change in text. See 1984 Amendment note below.\nSubsec. (n)(1).  Pub. L. 99–514, §\u202f1151(i)(1) , substituted “requirements” for “pension requirements”.\nPub. L. 99–514, §\u202f1146(b)(2) , struck out “except to the extent otherwise provided in regulations,” after “listed in paragraph (3),”.\nSubsec. (n)(2)(B).  Pub. L. 99–514, §\u202f1151(i)(2) , inserted “(6 months in the case of core health benefits)” after “1 year”.\nSubsec. (n)(3).  Pub. L. 99–514, §\u202f1151(i)(3) , substituted “Requirements” for “Pension requirements” in heading, substituted “requirements” for “pension requirements” in text, and added subpar. (C).\nSubsec. (n)(4).  Pub. L. 99–514, §\u202f1146(a)(2) , substituted “Time when first considered as employee” for “Time when leased employee is first considered as employee” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any leased employee, paragraph (1) shall apply only for purposes of determining whether the pension requirements listed in paragraph (3) are met for periods after the close of the 1-year period referred to in paragraph (2); except that years of service for the recipient shall be determined by taking into account the entire period for which the leased employee performed services for the recipient (or related persons).”\nSubsec. (n)(5).  Pub. L. 99–514, §\u202f1146(a)(1) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “This subsection shall not apply to any leased employee if such employee is covered by a plan which is maintained by the leasing organization if, with respect to such employee, such plan—\n“(A) is a money purchase pension plan with a nonintegrated employer contribution rate of at least 7½ percent, and\n“(B) provides for immediate participation and for full and immediate vesting.”\nSubsec. (n)(6).  Pub. L. 99–514, §\u202f1301(j)(4) , substituted “section 144(a)(3)” for “section 103(b)(6)(C)” in subpar. (A).\nPub. L. 99–514, §\u202f1146(a)(3) , substituted “Other rules” for “Related persons” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘related persons’ has the same meaning as when used in section 103(b)(6)(C).”\nSubsec. ( o ).  Pub. L. 99–514, §\u202f1146(b)(1) , inserted provision relating to regulations to minimize recordkeeping requirements in case of employer which has no top-heavy plans and uses the services of persons other than employees for an insignificant percentage of the employer’s total workload.\nSubsec. (p)(1)(B)(i).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(ii) , inserted “former spouse,”.\nSubsec. (p)(3)(B).  Pub. L. 99–514, §\u202f1899A(12) , struck out the comma after “benefits”.\nSubsec. (p)(4)(A).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(vi) , substituted “A” for “In the case of any payment before a participant has separated from service, a” in introductory provisions and inserted “in the case of any payment before a participant has separated from service,” in cl. (i).\nSubsec. (p)(4)(B).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(vii) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of this paragraph, the term ‘earliest retirement age’ has the meaning given such term by section 417(f)(3), except that in the case of any defined contribution plan, the earliest retirement age shall be the date which is 10 years before the normal retirement age (within the meaning of section 411(a)(8)).”\nSubsec. (p)(5).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(v) , struck out last sentence which read as follows: “A plan shall not be treated as failing to meet the requirements of subsection (a) or (k) of section 401 which prohibit payment of benefits before termination of employment solely by reason of payments to an alternate payee pursuant to a qualified domestic relations order.”\nSubsec. (p)(5)(A).  Pub. L. 99–514, §\u202f1898(c)(6)(A) , inserted “(and any spouse of the participant shall not be treated as a spouse of the participant for such purposes)”.\nSubsec. (p)(5)(B).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(iv) , substituted “the surviving former spouse” for “the surviving spouse”.\nSubsec. (p)(6)(A)(i).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(iii) , substituted “each alternate payee” for “any other alternate payee”.\nSubsec. (p)(7)(A).  Pub. L. 99–514, §\u202f1898(c)(2)(A)(i) , substituted “shall separately account for the amounts (hereinafter in this paragraph referred to as the ‘segregated amounts’)” for “shall segregate in a separate account in the plan or in an escrow account the amounts”.\nSubsec. (p)(7)(B).  Pub. L. 99–514, §\u202f1898(c)(2)(A)(ii) , substituted “the 18-month period described in subparagraph (E)” for “18 months” and “including any interest” for “plus any interest”.\nSubsec. (p)(7)(C).  Pub. L. 99–514, §\u202f1898(c)(2)(A)(iii) , substituted “the 18-month period described in subparagraph (E)” for “18 months” and “including any interest” for “plus any interest”.\nSubsec. (p)(7)(D).  Pub. L. 99–514, §\u202f1898(c)(2)(A)(iv) , inserted “described in subparagraph (E)”.\nSubsec. (p)(7)(E).  Pub. L. 99–514, §\u202f1898(c)(2)(A)(v) , added subpar. (E).\nSubsec. (p)(9).  Pub. L. 99–514, §\u202f1898(c)(4)(A) , added par. (9). Former par. (9) redesignated (11).\nSubsec. (p)(10).  Pub. L. 99–514, §\u202f1898(c)(7)(A)(v) , added par. (10).\nSubsec. (p)(11).  Pub. L. 99–514, §\u202f1898(c)(4)(A) , redesignated former par. (9) as (11).\nSubsec. (q).  Pub. L. 99–514, §\u202f1114(a) , added subsec. (q).\nSubsecs. (r), (s).  Pub. L. 99–514, §\u202f1115(a) , added subsecs. (r) and (s).\nSubsec. (t).  Pub. L. 99–514, §\u202f1151(e)(1) , added subsec. (t).\n1984—Subsec. (h)(1)(B).  Pub. L. 98–369, §\u202f491(d)(26) , struck out “or 405(a)” after “section 403(a)”.\nSubsec. ( l ).  Pub. L. 98–369, §\u202f491(d)(27) , struck out “or 405” after “section 403(a)”.\nSubsec. (m)(6)(B).  Pub. L. 98–369, §\u202f526(a)(1) , substituted “section 318(a)” for “section 267(c)”.\nSubsec. (m)(7).  Pub. L. 98–369, §\u202f526(d)(2) , as amended by  Pub. L. 99–514, §\u202f1852(f) , struck out par. (7) relating to regulations. See subsec. ( o ) of this section.\nSubsec. (n)(2).  Pub. L. 98–369 , §§\u202f526(b)(1), 713(i), made identical amendments, substituting “any person who is not an employee of the recipient and” for “any person” in text preceding subpar. (A).\nSubsec. ( o ).  Pub. L. 98–369, §\u202f526(d)(1) , added subsec. ( o ).\nSubsec. (p).  Pub. L. 98–397  added subsec. (p).\n1982—Subsecs. (b), (c).  Pub. L. 97–248, §\u202f240(c)(1) , inserted reference to section 416.\nSubsec. (m)(4)(B).  Pub. L. 97–248, §\u202f240(c)(2) , inserted reference to section 416.\nSubsec. (m)(5) to (7).  Pub. L. 97–248, §\u202f246(a) , added par. (5) and redesignated former pars. (5) and (6) as (6) and (7), respectively.\nSubsec. (n).  Pub. L. 97–248, §\u202f248(a) , added subsec. (n).\n1980—Subsec. (e).  Pub. L. 96–364, §\u202f407(b) , substituted provisions defining “church plan” with respect to general requirements, exclusion of certain plans, definitions and other provisions, and correction of failures to meet church plan requirements, for provisions defining “church plan” with respect to general requirements, certain unrelated business or multiemployer plans, and special temporary rules for certain church agencies under church plan.\nSubsec. (f).  Pub. L. 96–364, §\u202f207 , substituted provisions setting forth definition, cases of common control, continuation of status after termination, transitional rule, and special election with respect to a multiemployer plan, for provisions setting forth definition and special rules with respect to a multiemployer plan.\nSubsec. ( l ).  Pub. L. 96–364, §\u202f208(a) , substituted provisions relating to applicability to multiemployer plans subject to title IV of the Employee Retirement Income Security Act of 1974 of provisions of preceding sentence, for provisions relating to applicability of paragraph to multiemployer plans to extent determined by Corporation.\nSubsec. (m).  Pub. L. 96–605  and  Pub. L. 96–613  added an identical subsec. (m).\n1978—Subsecs. (b), (c).  Pub. L. 95–600  inserted “408(k),” after “sections 401,” wherever appearing.\n1976—Subsecs. (a) to (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(a)(64)(A) , substituted “Plan” for “plan” in heading.\nSubsec. (g)(2)(C).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. ( l ).  Pub. L. 94–455, §\u202f1901(a)(64)(B) , substituted reference to  Sept. 2, 1974 , for reference to the date of enactment of the Employee Retirement Income Security Act of 1974.\nPub. L. 117–328, div. T, title I, §\u202f109(d) ,  Dec. 29, 2022 ,  136 Stat. 5290 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2024 .”\nAmendment by  section 117(b) of Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2023 , see  section 117(h) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title III, §\u202f315(b) ,  Dec. 29, 2022 ,  136 Stat. 5352 , provided that:  “The amendments made by this section [amending this section] shall apply to plan years beginning after  December 31, 2023 .”\nPub. L. 117–328, div. T, title III, §\u202f320(c) ,  Dec. 29, 2022 ,  136 Stat. 5356 , provided that:  “The amendments made by this section [enacting  section 1030a of Title 29 , Labor, and amending this section, sections 664, 1027, and 1954 of Title 18, Crimes and Criminal Procedure, and sections 441 and 1031 of Title 29] shall apply to plan years beginning after  December 31, 2022 .”\nPub. L. 117–328, div. T, title III, §\u202f339(c) ,  Dec. 29, 2022 ,  136 Stat. 5375 , provided that:  “The amendments made by this section [amending this section and  section 1056 of Title 29 , Labor] shall apply to domestic relations orders received by plan administrators after  December 31, 2022 , including any such order which is submitted for reconsideration after such date.”\nPub. L. 117–328, div. T, title III, §\u202f350(b) ,  Dec. 29, 2022 ,  136 Stat. 5387 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to any errors with respect to which the date referred to in section 414(cc) (as added by this section) is after  December 31, 2023 . Prior to the application of any regulations or other guidance prescribed under paragraph (3) of section 414(cc) of the Internal Revenue Code of 1986 (as added by this section), taxpayers may rely upon their reasonable good faith interpretations of the provisions of such section.”\nAmendment by  section 603(a) of Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2023 , see  section 603(c) of Pub. L. 117–328 , set out as a note under  section 402 of this title .\nPub. L. 116–136, div. A, title III, §\u202f3609(c) ,  Mar. 27, 2020 ,  134 Stat. 414 , provided that:  “The amendments made by this section [amending this section and  section 1060 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2018 .”\nPub. L. 114–113, div. Q, title III, §\u202f336(a)(3) ,  Dec. 18, 2015 ,  129 Stat. 3110 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply to years beginning before, on, or after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title III, §\u202f336(d)(2) ,  Dec. 18, 2015 ,  129 Stat. 3113 , provided that:  “The amendment made by this subsection [amending this section] shall apply to transfers or mergers occurring after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 113–235, div. P, §\u202f3(c) ,  Dec. 16, 2014 ,  128 Stat. 2829 , provided that:  “The amendments made by this section [amending this section and  section 1060 of Title 29 , Labor] shall take effect as if included in the amendments made by the Cooperative and Small Employer Charity Pension Flexibility Act [ Pub. L. 113–97 ] ( 29 U.S.C. 401  note) [probably means  26 U.S.C. 401  note].”\nAmendment by  section 201 of Pub. L. 113–97  applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as a note under  section 401 of this title .\nPub. L. 113–97, title II, §\u202f203(b) ,  Apr. 7, 2014 ,  128 Stat. 1139 , provided that:  “The amendment made by this section [amending this section] shall apply as of the date of enactment of this Act [ Apr. 7, 2014 ].”\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nAmendment by  section 104(b) of Pub. L. 110–245  applicable with respect to deaths and disabilities occurring on or after  Jan. 1, 2007 , see  section 104(d)(1) of Pub. L. 110–245 , set out as a note under  section 401 of this title .\nAmendment by  section 105(b)(1) of Pub. L. 110–245  applicable to years beginning after  December 31, 2008 , see  section 105(b)(3) of Pub. L. 110–245 , set out as a note under  section 219 of this title .\nPub. L. 110–28, title VI, §\u202f6611(c) ,  May 25, 2007 ,  121 Stat. 181 , provided that:  “The amendments made by this section [amending this section and  section 1002 of Title 29 , Labor] shall take effect as if included in section 1106 of the Pension Protection Act of 2006 [ Pub. L. 109–280 ].”\nAmendment by  section 114(c) of Pub. L. 109–280  applicable to plan years beginning after 2007, see  section 114(g)(1) of Pub. L. 109–280 , as added by  Pub. L. 110–458 , set out as a note under  section 401 of this title .\nAmendment by  section 902(d)(1) of Pub. L. 109–280  applicable to plan years beginning after  Dec. 31, 2007 , see  section 902(g) of Pub. L. 109–280 , set out as a note under  section 401 of this title .\nPub. L. 109–280, title IX, §\u202f903(c) ,  Aug. 17, 2006 ,  120 Stat. 1048 , provided that:  “The amendments made by this section [amending this section and  section 1060 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2009 .”\nPub. L. 109–280, title IX, §\u202f906(c) ,  Aug. 17, 2006 ,  120 Stat. 1052 , provided that:  “The amendments made by this section [amending this section,  section 415 of this title , and sections 1002 and 1321 of Title 29, Labor] shall apply to any year beginning on or after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nPub. L. 107–16, title VI, §\u202f631(b) ,  June 7, 2001 ,  115 Stat. 113 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions in taxable years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f635(d) ,  June 7, 2001 ,  115 Stat. 117 , provided that:  “The amendment made by this section [amending this section] shall apply to transfers, distributions, and payments made after  December 31, 2001 .”\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 1(a)(7) [title III, §\u202f314(g)] of  Pub. L. 106–554 , set out as a note under  section 56 of this title .\nAmendment by  section 6018 of Pub. L. 105–206  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see  section 6018(h) of Pub. L. 105–206 , set out as a note under  section 23 of this title .\nPub. L. 105–34, title XV, §\u202f1522(b) ,  Aug. 5, 1997 ,  111 Stat. 1070 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 1997 .”\nAmendment by section 1601(d)(6)(A), (7), (h)(2)(D)(i), (ii) of  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by  section 1421(b)(9)(C) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nPub. L. 104–188, title I, §\u202f1431(d) ,  Aug. 20, 1996 ,  110 Stat. 1803 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section, sections 129, 401, 404, 408, and 416 of this title, and provisions set out as a note below] shall apply to years beginning after  December 31, 1996 , except that in determining whether an employee is a highly compensated employee for years beginning in 1997, such amendments shall be treated as having been in effect for years beginning in 1996. \n \n “(2)   Family aggregation .— The amendments made by subsection (b) [amending this section and sections 401 and 404 of this title] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1434(c) ,  Aug. 20, 1996 ,  110 Stat. 1807 , provided that:  “The amendments made by this section [amending this section and  section 415 of this title ] shall apply to years beginning after  December 31, 1997 .”\nPub. L. 104–188, title I, §\u202f1454(b) ,  Aug. 20, 1996 ,  110 Stat. 1817 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1996 , but shall not apply to any relationship determined under an Internal Revenue Service ruling issued before the date of the enactment of this Act [ Aug. 20, 1996 ] pursuant to section 414(n)(2)(C) of the Internal Revenue Code of 1986 (as in effect on the day before such date) not to involve a leased employee.”\nAmendment by  section 1461(a) of Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , see  section 1461(c) of Pub. L. 104–188 , set out as a note under  section 404 of this title .\nPub. L. 104–188, title I, §\u202f1462(c) ,  Aug. 20, 1996 ,  110 Stat. 1824 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1704(n)(3) ,  Aug. 20, 1996 ,  110 Stat. 1886 , provided that:  “The amendments made by this subsection [amending this section and  section 1108 of Title 29 , Labor] shall be effective as of  December 12, 1994 .”\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nPub. L. 101–508, title XI, §\u202f11703(b)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–517 , provided that:  “The amendment made by subsection (a) [probably means par. (1), which amended this section] shall take effect as if included in the amendments made by section 1151 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nAmendment by sections 7811(m)(5) and 7813(b) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 7841(a)(2) of Pub. L. 101–239  applicable to transfers after  Dec. 19, 1989 , in taxable years ending after such date, see  section 7841(a)(3) of Pub. L. 101–239 , set out as a note under  section 408 of this title .\nAmendment by  section 203(a)(6) of Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nAmendment by  section 204(b)(2) of Pub. L. 101–140  applicable to years beginning after  Dec. 31, 1988 , see  section 204(d)(1) of Pub. L. 101–140 , set out as a note under  section 129 of this title .\nAmendment by sections 1011(d)(8), (e)(4), (h)(5), (i)(1)–(4)(A), (j)(1), (2), 1011A(b)(3), 1011B(a)(16), (17), (19), (20), and 1018(t)(8)(E)–(G) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title II, §\u202f2005(c)(3) ,  Nov. 10, 1988 ,  102 Stat. 3612 , provided that: \n “(A)  Except as provided in subparagraph (B), the amendments made by this subsection [amending this section] shall apply with respect to transactions occurring after  July 26, 1988 . \n \n “(B)  The amendments made by this subsection shall not apply to any transaction occurring after  July 26, 1988 , if on or before such date the board of directors of the employer, approves such transaction or the employer took similar binding action.”\nAmendment by section 3011(b)(4), (5) of  Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1988 , but not applicable to any plan for any plan year to which  section 162(k) of this title  (as in effect on the day before  Nov. 10, 1988 ) did not apply by reason of  section 10001(e)(2) of Pub. L. 99–272 , see  section 3011(d) of Pub. L. 100–647 , set out as a note under  section 162 of this title .\nAmendment by section 3021(b)(1), (2)(A) of  Pub. L. 100–647  applicable to years beginning after  Dec. 31, 1986 , see  section 3021(d)(2) of Pub. L. 100–647 , set out as a note under  section 129 of this title .\nPub. L. 100–647, title VI, §\u202f6067(c) ,  Nov. 10, 1988 ,  102 Stat. 3703 , as amended by  Pub. L. 101–239, title VII, §\u202f7816(k) ,  Dec. 19, 1989 ,  103 Stat. 2421 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by section 2005(c) of this Act [amending this section].”\nAmendment by  Pub. L. 100–203  applicable with respect to plan years beginning after  Dec. 31, 1987 , see  section 9305(d) of Pub. L. 100–203 , set out as a note under  section 412 of this title .\nPub. L. 99–514, title XI, §\u202f1114(c) ,  Oct. 22, 1986 ,  100 Stat. 2452 , as amended by  Pub. L. 104–188, title I, §\u202f1431(c)(2) ,  Aug. 20, 1996 ,  110 Stat. 1803 ;  Pub. L. 107–16, title VI, §\u202f663(a) ,  June 7, 2001 ,  115 Stat. 142 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendment made by this section [amending this section and sections 106, 274, 423, and 501 of this title] shall apply to years beginning after  December 31, 1986 . \n \n “(2)   Conforming amendments to employee benefit provisions .— The amendments made by paragraphs (2), (3), (4), (5), and (16) of subsection (b) [amending sections 117, 120, 127, 129, 132, and 505 of this title] shall apply to years beginning after  December 31, 1987 . \n \n “(3)   Conforming amendments to pension provisions .— The amendments made by paragraphs (7), (8), (9), (10), (11), (12), and (15) of subsection (b) [amending this section and sections 401, 404A, 406, 407, 411, 415, and 4975 of this title and  section 1108 of Title 29 , Labor] shall apply to years beginning after  December 31, 1988 .”\n[ Pub. L. 107–16, title VI, §\u202f663(b) ,  June 7, 2001 ,  115 Stat. 143 , provided that:  “The repeal made by subsection (a) [repealing par. (4) of  section 1114(c) of Pub. L. 99–514 , set out above] shall apply to plan years beginning after  December 31, 2001 .” \n]\nPub. L. 99–514, title XI, §\u202f1115(b) ,  Oct. 22, 1986 ,  100 Stat. 2454 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1986 .”\nAmendment by  section 1117(c) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1986 , with special provisions for plans maintained pursuant to collective bargaining agreements ratified before  Mar. 1, 1986 , and for annuity contracts under  section 403(b) of this title , see  section 1117(d) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 99–514, title XI, §\u202f1146(c) ,  Oct. 22, 1986 ,  100 Stat. 2493 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Subsection  (a)(1).— The amendment made by subsection (a)(1) shall apply to services performed after  December 31, 1986 . \n \n “(3)   Recordkeeping requirements .— In the case of years beginning before the date of the enactment of this Act [ Oct. 22, 1986 ], the last sentence of section 414( o ) shall be applied without regard to the requirement that an insignificant percentage of the workload be performed by persons other than employees.”\nAmendment by section 1151(e)(1), (i) of  Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nAmendment by  section 1301(j)(4) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 1852(f) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by section 1898(c)(2)(A), (4)(A), (6)(A), (7)(A)(ii)–(vii) of  Pub. L. 99–514  effective as if included in the provision of the Retirement Equity Act of 1984,  Pub. L. 98–397 , to which such amendment relates, except as otherwise provided, see  section 1898(j) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 98–397  effective  Jan. 1, 1985 , except as otherwise provided, see  section 303(d) of Pub. L. 98–397 , set out as a note under  section 1001 of Title 29 , Labor.\nAmendment by section 491(d)(26), (27) of  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nPub. L. 98–369, div. A, title V, §\u202f526(a)(2) ,  July 18, 1984 ,  98 Stat. 874 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 98–369, div. A, title V, §\u202f526(b)(2) ,  July 18, 1984 ,  98 Stat. 874 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 98–369, div. A, title V, §\u202f526(d)(3) ,  July 18, 1984 ,  98 Stat. 875 , provided that:  “The amendments made by this subsection [amending this section] shall take effect on the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 713(i) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  section 240(c) of Pub. L. 97–248 , applicable to years beginning after  Dec. 31, 1983 , see  section 241(a) of Pub. L. 97–248 , set out as a note under  section 416 of this title .\nPub. L. 97–248, title II, §\u202f246(b) ,  Sept. 3, 1982 ,  96 Stat. 525 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 97–248, title II, §\u202f248(b) ,  Sept. 3, 1982 ,  96 Stat. 527 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 96–605, title II, §\u202f201(c) ,  Dec. 28, 1980 ,  94 Stat. 3527 , and  Pub. L. 96–613, §\u202f5(c) ,  Dec. 28, 1980 ,  94 Stat. 3582 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 105 and 125 of this title] shall apply to plan years ending after  November 30, 1980 . \n \n “(2)   Plans in existence on  november 30, 1980 .— In the case of a plan in existence on  November 30, 1980 , the amendments made by this section [amending this section and sections 105 and 125 of this title] shall apply to plan years beginning after  November 30, 1980 .”\nPub. L. 96–364, title IV, §\u202f407(c) ,  Sept. 26, 1980 ,  94 Stat. 1307 , provided that:  “The amendments made by this section [amending this section and  section 1002 of Title 29 , Labor] shall be effective as of  January 1, 1974 .”\nAmendment by sections 207 and 208(a) of  Pub. L. 96–364  effective  Sept. 26, 1980 , see  section 210(a) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 152(h) of Pub. L. 95–600 , set out as a note under  section 408 of this title .\nAmendment by  section 1901(a)(64) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nSection applicable, except as otherwise provided in section 1017(c) through (i) of  Pub. L. 93–406 , for plan years beginning after  Sept. 2, 1974 , and, in the case of plans in existence on  Jan. 1, 1974 , for plan years beginning after  Dec. 31, 1975 , see  section 1017 of Pub. L. 93–406 , set out as an Effective Date; Transitional Rules note under  section 410 of this title .\nPub. L. 109–280, title X, §\u202f1001 ,  Aug. 17, 2006 ,  120 Stat. 1052 , provided that:  \n “Not later than 1 year after the date of the enactment of this Act [ Aug. 17, 2006 ], the Secretary of Labor shall issue regulations under section 206(d)(3) of the Employee Retirement Security Act of 1974 [ 29 U.S.C. 1056(d)(3) ] and section 414(p) of the Internal Revenue Code of 1986 which clarify that— \n “(1)  a domestic relations order otherwise meeting the requirements to be a qualified domestic relations order, including the requirements of section 206(d)(3)(D) of such Act and section 414(p)(3) of such Code, shall not fail to be treated as a qualified domestic relations order solely because— “(A)  the order is issued after, or revises, another domestic relations order or qualified domestic relations order; or \n \n “(B)  of the time at which it is issued; and \n \n \n “(2)  any order described in paragraph (1) shall be subject to the same requirements and protections which apply to qualified domestic relations orders, including the provisions of section 206(d)(3)(H) of such Act and section 414(p)(7) of such Code.”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by sections 1114, 1115, and 1117 of  Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title V, §\u202f501(a) , (b),  Dec. 29, 2022 ,  136 Stat. 5388 , provided that: \n “(a)   In General .— If this section applies to any retirement plan or contract amendment— “(1)  such retirement plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and \n \n “(2)  except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such retirement plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(b)   Amendments to Which Section Applies.— “(1)   In general .— This section shall apply to any amendment to any retirement plan or annuity contract which is made— “(A)  pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act [div. T of  Pub. L. 117–328 , see Tables for classification]; and \n \n “(B)  on or before the last day of the first plan year beginning on or after  January 1, 2025 , or such later date as the Secretary of the Treasury may prescribe. \n \n\n In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), or an applicable collectively bargained plan, this paragraph shall be applied by substituting ‘2027’ for ‘2025’. For purposes of the preceding sentence, the term ‘applicable collectively bargained plan’ means a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of enactment of this Act [ Dec. 29, 2022 ]. \n \n “(2)   Conditions .— This section shall not apply to any amendment unless— “(A)  during the period— “(i)  beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan); and \n \n “(ii)  ending on the date described in paragraph (1)(B) (as modified by the second sentence of paragraph (1)) (or, if earlier, the date the plan or contract amendment is adopted), \n \n\n \u2001\u2001the plan or contract is operated as if such plan or contract amendment were in effect; and \n \n “(B)  such plan or contract amendment applies retroactively for such period.”\nPub. L. 116–94, div. O, title VI, §\u202f601 ,  Dec. 20, 2019 ,  133 Stat. 3181 , as amended by  Pub. L. 117–328, div. T, title V, §\u202f501(c)(1) ,  Dec. 29, 2022 ,  136 Stat. 5389 , provided that: \n “(a)   In General .— If this section applies to any retirement plan or contract amendment— “(1)  such retirement plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and \n \n “(2)  except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such retirement plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g) ] by reason of such amendment. \n \n \n “(b)   Amendments to Which Section Applies.— “(1)   In general .— This section shall apply to any amendment to any retirement plan or annuity contract which is made— “(A)  pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act [div. O of  Pub. L. 116–94 , see Tables for classification]; and \n \n “(B)  on or before the last day of the first plan year beginning on or after  January 1, 2025 , or such later date as the Secretary of the Treasury may prescribe. \n \n\n In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), or an applicable collectively bargained plan in the case of section 401 (and the amendments made thereby), this paragraph shall be applied by substituting ‘2027’ for ‘2025’. For purposes of the preceding sentence, the term ‘applicable collectively bargained plan’ means a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of enactment of this Act [ Dec. 20, 2019 ]. \n \n “(2)   Conditions .— This section shall not apply to any amendment unless— “(A)  during the period— “(i)  beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan); and \n \n “(ii)  ending on the date described in paragraph (1)(B) (as modified by the second sentence of paragraph (1)) (or, if earlier, the date the plan or contract amendment is adopted), \n \n\n \u2001\u2001the plan or contract is operated as if such plan or contract amendment were in effect; and \n \n “(B)  such plan or contract amendment applies retroactively for such period.”\nPub. L. 110–245, title I, §\u202f105(c) ,  June 17, 2008 ,  122 Stat. 1629 , provided that: \n “(1)   In general .— If this subsection applies to any plan or annuity contract amendment, such plan or contract shall be treated as being operated in accordance with the terms of the plan or contract during the period described in paragraph (2)(B)(i). \n \n “(2)   Amendments to which section applies.— “(A)   In general .— This subsection shall apply to any amendment to any plan or annuity contract which is made— “(i)  pursuant to any amendment made by subsection (b)(1) [amending this section], and \n \n “(ii)  on or before the last day of the first plan year beginning on or after  January 1, 2010 . \n \n\n In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this subparagraph shall be applied by substituting ‘2012’ for ‘2010’ in clause (ii). \n \n “(B)   Conditions .— This subsection shall not apply to any plan or annuity contract amendment unless— “(i)  during the period beginning on the date the amendment described in subparagraph (A)(i) takes effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect, and \n \n “(ii)  such plan or contract amendment applies retroactively for such period.”\nPub. L. 114–113, div. Q, title III, §\u202f336(a)(2) ,  Dec. 18, 2015 ,  129 Stat. 3110 , provided that:  “The rule of 26 CFR 1.414(c)–5(f) shall continue to apply to each paragraph of section 414(c) of the Internal Revenue Code of 1986, as amended by paragraph (1).”\nPub. L. 114–113, div. Q, title III, §\u202f336(c) ,  Dec. 18, 2015 ,  129 Stat. 3110 , provided that: \n “(1)   In general .— This subsection shall supersede any law of a State that relates to wage, salary, or payroll payment, collection, deduction, garnishment, assignment, or withholding which would directly or indirectly prohibit or restrict the inclusion in any church plan (as defined in section 414(e) of the Internal Revenue Code of 1986) of an automatic contribution arrangement. \n \n “(2)   Definition of automatic contribution arrangement .— For purposes of this subsection, the term ‘automatic contribution arrangement’ means an arrangement— “(A)  under which a participant may elect to have the plan sponsor or the employer make payments as contributions under the plan on behalf of the participant, or to the participant directly in cash, \n \n “(B)  under which a participant is treated as having elected to have the plan sponsor or the employer make such contributions in an amount equal to a uniform percentage of compensation provided under the plan until the participant specifically elects not to have such contributions made (or specifically elects to have such contributions made at a different percentage), and \n \n “(C)  under which the notice and election requirements of paragraph (3), and the investment requirements of paragraph (4), are satisfied. \n \n \n “(3)   Notice requirements.— “(A)   In general .— The plan sponsor of, or plan administrator or employer maintaining, an automatic contribution arrangement shall, within a reasonable period before the first day of each plan year, provide to each participant to whom the arrangement applies for such plan year notice of the participant’s rights and obligations under the arrangement which— “(i)  is sufficiently accurate and comprehensive to apprise the participant of such rights and obligations, and \n \n “(ii)  is written in a manner calculated to be understood by the average participant to whom the arrangement applies. \n \n \n “(B)   Election requirements .— A notice shall not be treated as meeting the requirements of subparagraph (A) with respect to a participant unless— “(i)  the notice includes an explanation of the participant’s right under the arrangement not to have elective contributions made on the participant’s behalf (or to elect to have such contributions made at a different percentage), \n \n “(ii)  the participant has a reasonable period of time, after receipt of the explanation described in clause (i) and before the first elective contribution is made, to make such election, and \n \n “(iii)  the notice explains how contributions made under the arrangement will be invested in the absence of any investment election by the participant. \n \n \n \n “(4)   Default investment .— If no affirmative investment election has been made with respect to any automatic contribution arrangement, contributions to such arrangement shall be invested in a default investment selected with the care, skill, prudence, and diligence that a prudent person selecting an investment option would use. \n \n “(5)   Effective date .— This subsection shall take effect on the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title III, §\u202f336(e) ,  Dec. 18, 2015 ,  129 Stat. 3113 , provided that: \n “(1)   In general .— In the case of— “(A)  a church plan (as defined in section 414(e) of the Internal Revenue Code of 1986), including a plan described in section 401(a) of such Code and a retirement income account described in section 403(b)(9) of such Code, and \n \n “(B)  an organization described in section 414(e)(3)(A) of such Code the principal purpose or function of which is the administration of such a plan or account, \n \n\n the assets of such plan, account, or organization (including any assets otherwise permitted to be commingled for investment purposes with the assets of such a plan, account, or organization) may be invested in a group trust otherwise described in Internal Revenue Service Revenue Ruling 81–100 (as modified by Internal Revenue Service Revenue Rulings 2004–67, 2011–1, and 2014–24), or any subsequent revenue ruling that supersedes or modifies such revenue ruling, without adversely affecting the tax status of the group trust, such plan, account, or organization, or any other plan or trust that invests in the group trust. \n \n “(2)   Effective date .— This subsection shall apply to investments made after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nFor special rules on applicability of amendments by subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .\nPub. L. 104–188, title I, §\u202f1457 ,  Aug. 20, 1996 ,  110 Stat. 1818 , provided that: \n “(a)   Development of Sample Language .— Not later than  January 1, 1997 , the Secretary of the Treasury shall develop— “(1)  sample language for inclusion in a form for the spousal consent required under section 417(a)(2) of the Internal Revenue Code of 1986 and section 205(c)(2) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1055(c)(2) ] which— “(A)  is written in a manner calculated to be understood by the average person, and \n \n “(B)  discloses in plain form— “(i)  whether the waiver to which the spouse consents is irrevocable, and \n \n “(ii)  whether such waiver may be revoked by a qualified domestic relations order, and \n \n \n \n “(2)  sample language for inclusion in a form for a qualified domestic relations order described in section 414(p)(1)(A) of such Code and section 206(d)(3)(B)(i) of such Act [ 29 U.S.C. 1056(d)(3)(B)(i) ] which— “(A)  meets the requirements contained in such sections, and \n \n “(B)  the provisions of which focus attention on the need to consider the treatment of any lump sum payment, qualified joint and survivor annuity, or qualified preretirement survivor annuity. \n \n \n \n “(b)   Publicity .— The Secretary of the Treasury shall include publicity for the sample language developed under subsection (a) in the pension outreach efforts undertaken by the Secretary.”\nPub. L. 104–188, title I, §\u202f1462(b) ,  Aug. 20, 1996 ,  110 Stat. 1824 , provided that:  “The Secretary of the Treasury may design nondiscrimination and coverage safe harbors for church plans.”\nPub. L. 101–140, title II, §\u202f204(b)(1) ,  Nov. 8, 1989 ,  103 Stat. 833 , provided that:  “In the case of any plan year beginning on or before the date the Secretary of the Treasury or his delegate issues guidelines and begins issuing determinations under section 414(r)(2)(C) of the Internal Revenue Code of 1986, an employer shall be treated as operating separate lines of business if the employer reasonably determines that it meets the requirements of section 414(r) (other than paragraph (2)(C) thereof) of such Code.”\n[ Pub. L. 101–140, title II, §\u202f204(d)(3) ,  Nov. 8, 1989 ,  103 Stat. 833 , provided that:  “The provisions of subsection (b)(1) [set out above] shall apply to years beginning after  December 31, 1986 .” \n]\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nPub. L. 100–647, title VI, §\u202f6067(b) ,  Nov. 10, 1988 ,  102 Stat. 3703 , directed Secretary of the Treasury or his delegate, in consultation with Federal Deposit Insurance Corporation, to conduct a study with respect to proper method of allocating assets in case of a transaction to which the amendment made by such section and, not later than  Jan. 1, 1990  (due date extended to  Jan. 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 ) to report results of such study to Committee on Ways and Means of House of Representatives and to Committee on Finance of Senate.\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'An arrangement or agreement meets the requirements of this subsection if such arrangement or agreement is an eligible automatic contribution arrangement (as defined in section 414(w)(3)) which meets the requirements of paragraphs (2) through (4).\nAn eligible automatic contribution arrangement meets the requirements of this paragraph if such arrangement allows employees to make permissible withdrawals (as defined in section 414(w)(2)).\nIn the case of any eligible automatic contribution arrangement (other than an arrangement that meets the requirements of paragraph (12) or (13) of section 401(k)), for plan years ending before  January 1, 2025 , subparagraph (A)(ii) shall be applied by substituting “10 percent” for “15 percent”.\nAn eligible automatic contribution arrangement meets the requirements of this paragraph if amounts contributed pursuant to such arrangement, and for which no investment is elected by the participant, are invested in accordance with the requirements of section 2550.404c-5 of title 29, Code of Federal Regulations (or any successor regulations).\nSubsection (a) shall not apply to any simple plan (within the meaning of section 401(k)(11)).\nSubparagraph (A) shall not apply in the case of an employer adopting after such date of enactment a plan maintained by more than one employer, and subsection (a) shall apply with respect to such employer as if such plan were a single plan.\nSubsection (a) shall not apply to any governmental plan (within the meaning of section 414(d)) or any church plan (within the meaning of section 414(e)).\nSubsection (a) shall not apply to any qualified cash or deferred arrangement, or any annuity contract purchased under a plan, while the employer maintaining such plan (and any predecessor employer) has been in existence for less than 3 years.\nSubsection (a) shall not apply to any qualified cash or deferred arrangement, or any annuity contract purchased under a plan, earlier than the date that is 1 year after the close of the first taxable year with respect to which the employer maintaining the plan normally employed more than 10 employees.\nIn the case of a plan maintained by more than 1 employer, subparagraphs (A) and (B) shall be applied separately with respect to each such employer, and all such employers to which subsection (a) applies (after the application of this paragraph) shall be treated as maintaining a separate plan for purposes of this section.\nThe date of the enactment of this section, and such date of enactment, referred to in subsec. (c)(2), is the date of enactment of  Pub. L. 117–328 , which was approved  Dec. 29, 2022 .\nPub. L. 117–328, div. T, title I, §\u202f101(c) ,  Dec. 29, 2022 ,  136 Stat. 5277 , provided that:  “The amendments made by this section [enacting this section] shall apply to plan years beginning after  December 31, 2024 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'For purposes of paragraph (1), the term “annual benefit” means a benefit payable annually in the form of a straight life annuity (with no ancillary benefits) under a plan to which employees do not contribute and under which no rollover contributions (as defined in sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)) are made.\nIf the benefit under the plan is payable in any form other than the form described in subparagraph (A), or if the employees contribute to the plan or make rollover contributions (as defined in sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)), the determinations as to whether the limitation described in paragraph (1) has been satisfied shall be made, in accordance with regulations prescribed by the Secretary by adjusting such benefit so that it is equivalent to the benefit described in subparagraph (A). For purposes of this subparagraph, any ancillary benefit which is not directly related to retirement income benefits shall not be taken into account; and that portion of any joint and survivor annuity which constitutes a qualified joint and survivor annuity (as defined in section 417) shall not be taken into account.\nIf the retirement income benefit under the plan begins before age 62, the determination as to whether the $160,000 limitation set forth in paragraph (1)(A) has been satisfied shall be made, in accordance with regulations prescribed by the Secretary, by reducing the limitation of paragraph (1)(A) so that such limitation (as so reduced) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a $160,000 annual benefit beginning at age 62.\nIf the retirement income benefit under the plan begins after age 65, the determination as to whether the $160,000 limitation set forth in paragraph (1)(A) has been satisfied shall be made, in accordance with regulations prescribed by the Secretary, by increasing the limitation of paragraph (1)(A) so that such limitation (as so increased) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a $160,000 annual benefit beginning at age 65.\nIn the case of a qualified participant, subparagraph (C) of this paragraph shall not apply.\nFor purposes of paragraph (1), a participant’s high 3 years shall be the period of consecutive calendar years (not more than 3) during which the participant had the greatest aggregate compensation from the employer. In the case of an employee within the meaning of section 401(c)(1), the preceding sentence shall be applied by substituting for “compensation from the employer” the following: “the participant’s earned income (within the meaning of section 401(c)(2) but determined without regard to any exclusion under section 911)”.\nThe provisions of subparagraph (A) shall apply to the limitations under paragraphs (1)(B) and (4), except that such subparagraph shall be applied with respect to years of service with an employer rather than years of participation in a plan.\nIn no event shall subparagraph (A) or (B) reduce the limitations referred to in paragraphs (1) and (4) to an amount less than ⅒ of such limitation (determined without regard to this paragraph).\nTo the extent provided in regulations, subparagraph (A) shall be applied separately with respect to each change in the benefit structure of a plan.\nExcept as provided in subparagraph (B), in the case of any participant who is a commercial airline pilot, if, as of the time of the participant’s retirement, regulations prescribed by the Federal Aviation Administration require an individual to separate from service as a commercial airline pilot after attaining any age occurring on or after age 60 and before age 62, paragraph (2)(C) shall be applied by substituting such age for age 62.\nIf a participant described in subparagraph (A) separates from service before age 60, the rules of paragraph (2)(C) shall apply.\nIn the case of a plan maintained for its employees by any State or political subdivision thereof, or by any agency or instrumentality of the foregoing, or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments), the limitation with respect to a qualified participant under this subsection shall not be less than the accrued benefit of the participant under the plan (determined without regard to any amendment of the plan made after  October 14, 1987 ).\nFor purposes of this paragraph, the term “qualified participant” means a participant who first became a participant in the plan maintained by the employer before  January 1, 1990 .\nThis paragraph shall not apply to any plan unless each employer maintaining the plan elects before the close of the 1st plan year beginning after  December 31, 1989 , to have this subsection (other than paragraph (2)(G)).\nAn election under clause (i) may be revoked not later than the last day of the third plan year beginning after the date of the enactment of this clause. The revocation shall apply to all plan years to which the election applied and to all subsequent plan years. Any amount paid by a plan in a taxable year ending after the revocation shall be includible in income in such taxable year under the rules of this chapter in effect for such taxable year, except that, for purposes of applying the limitations imposed by this section, any portion of such amount which is attributable to any taxable year during which the election was in effect shall be treated as received in such taxable year.\nIn the case of a governmental plan (as defined in section 414(d)) or a multiemployer plan (as defined in section 414(f)), subparagraph (B) of paragraph (1) shall not apply. Subparagraph (B) of paragraph (1) shall not apply to a plan maintained by an organization described in section 3121(w)(3)(A) except with respect to highly compensated benefits. For purposes of this paragraph, the term “highly compensated benefits” means any benefits accrued for an employee in any year on or after the first year in which such employee is a highly compensated employee (as defined in section 414(q)) of the organization described in section 3121(w)(3)(A). For purposes of applying paragraph (1)(B) to highly compensated benefits, all benefits of the employee otherwise taken into account (without regard to this paragraph) shall be taken into account.\nThe term “eligible rural electric cooperative plan” means a plan maintained by more than 1 employer, with respect to which at least 85 percent of the employers maintaining the plan are rural cooperatives described in clause (i) or (ii) of section 401(k)(7)(B) or are a national association of such a rural cooperative.\nAn employer maintaining an eligible rural cooperative plan may elect not to have subparagraph (A) apply to its employees.\nThe Secretary shall prescribe such regulations and other guidance as are necessary to limit the application of subparagraph (A) such that it does not result in increased benefits for highly compensated employees.\nThe term “participant’s compensation” means the compensation of the participant from the employer for the year.\nIn the case of an employee within the meaning of section 401(c)(1), subparagraph (A) shall be applied by substituting “the participant’s earned income (within the meaning of section 401(c)(2) but determined without regard to any exclusion under section 911)” for “compensation of the participant from the employer”.\nIn the case of an annuity contract described in section 403(b), the term “participant’s compensation” means the participant’s includible compensation determined under section 403(b)(3).\nNotwithstanding any other provision of this subsection, at the election of a participant who is an employee of a church or a convention or association of churches, including an organization described in section 414(e)(3)(B)(ii), contributions and other additions for an annuity contract or retirement income account described in section 403(b) with respect to such participant, when expressed as an annual addition to such participant’s account, shall be treated as not exceeding the limitation of paragraph (1) if such annual addition is not in excess of $10,000.\nThe total amount of additions with respect to any participant which may be taken into account for purposes of this subparagraph for all years may not exceed $40,000.\nIn the case of any individual described in subparagraph (B) performing services outside the United States, contributions and other additions for an annuity contract or retirement income account described in section 403(b) with respect to such employee, when expressed as an annual addition to such employee’s account, shall not be treated as exceeding the limitation of paragraph (1) if such annual addition is not in excess of $3,000. This subparagraph shall not apply with respect to any taxable year to any individual whose adjusted gross income for such taxable year (determined separately and without regard to community property laws) exceeds $17,000.\nFor purposes of this paragraph, the term “annual addition” has the meaning given such term by paragraph (2).\nFor purposes of this paragraph, the terms “church” and “convention or association of churches” have the same meaning as when used in section 414(e).\nFor purposes of paragraph (1)(B), in the case of an individual who for a taxable year excludes from gross income under section 131 a qualified foster care payment which is a difficulty of care payment, the participant’s compensation, or earned income, as the case may be, shall be increased by the amount so excluded.\nThe base period taken into account for purposes of paragraph (1)(A) is the calendar quarter beginning  July 1, 2001 .\nThe base period taken into account for purposes of paragraph (1)(B) with respect to individuals separating from service with the employer after  December 31, 1994 , is the calendar quarter beginning July 1 of the calendar year preceding the calendar year in which such separation occurs.\nThe base period taken into account for purposes of paragraph (1)(B) with respect to individuals separating from service with the employer before  January 1, 1995 , is the calendar quarter beginning October 1 of the calendar year preceding the calendar year in which such separation occurs.\nThe base period taken into account for purposes of paragraph (1)(C) is the calendar quarter beginning  July 1, 2001 .\nAny increase under subparagraph (A) of paragraph (1) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000. This subparagraph shall also apply for purposes of any provision of this title that provides for adjustments in accordance with the method contained in this subsection, except to the extent provided in such provision.\nAny increase under subparagraph (C) of paragraph (1) which is not a multiple of $1,000 shall be rounded to the next lowest multiple of $1,000.\nExcept as provided in subsection (f)(2), the Secretary, in applying the provisions of this section to benefits or contributions under more than one plan maintained by the same employer, and to any trusts, contracts, accounts, or bonds referred to in subsection (a)(2), with respect to which the participant has the control required under section 414(b) or (c), as modified by subsection (h), shall, under regulations prescribed by the Secretary, disqualify one or more trusts, plans, contracts, accounts, or bonds, or any combination thereof until such benefits or contributions do not exceed the limitations contained in this section. In addition to taking into account such other factors as may be necessary to carry out the purposes of subsection (f), the regulations prescribed under this paragraph shall provide that no plan which has been terminated shall be disqualified until all other trusts, plans, contracts, accounts, or bonds have been disqualified.\nFor purposes of applying subsections (b) and (c) of section 414 to this section, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1).\nWhere for the period before  January 1, 1976 , or (if later) the first day of the first plan year of the plan, the records necessary for the application of this section are not available, the Secretary may by regulations prescribe alternate methods for determining the amounts to be taken into account for such period.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including, but not limited to, regulations defining the term “year” for purposes of any provision of this section.\nAn arrangement shall not meet the requirements of this subparagraph if the Secretary finds that a pattern of discrimination exists with respect to participation.\nAn arrangement shall not meet the requirements of this paragraph if any key employee is eligible to participate.\nFor purposes of this subparagraph, the term “key employee” has the meaning given such term by section 416(i)(1), except that in the case of a plan other than a top-heavy plan (within the meaning of section 416(g)), such term shall not include an individual who is a key employee solely by reason of section 416(i)(1)(A)(i).\nIn the case of any repayment of contributions (including interest thereon) to the governmental plan with respect to an amount previously refunded upon a forfeiture of service credit under the plan or under another governmental plan maintained by a State or local government employer within the same State, any such repayment shall not be taken into account for purposes of this section.\nFor purposes of this section, any annuity contract described in section 403(b) for the benefit of a participant shall be treated as a defined contribution plan maintained by each employer with respect to which the participant has the control required under subsection (b) or (c) of section 414 (as modified by subsection (h)). For purposes of this section, any contribution by an employer to a simplified employee pension plan for an individual for a taxable year shall be treated as an employer contribution to a defined contribution plan for such individual for such year.\nFor purposes of this section, contributions allocated to any individual medical benefit account which is part of a pension or annuity plan shall be treated as an annual addition to a defined contribution plan for purposes of subsection (c). Subparagraph (B) of subsection (c)(1) shall not apply to any amount treated as an annual addition under the preceding sentence.\nIn determining whether a governmental plan (as defined in section 414(d)) meets the requirements of this section, benefits provided under a qualified governmental excess benefit arrangement shall not be taken into account. Income accruing to a governmental plan (or to a trust that is maintained solely for the purpose of providing benefits under a qualified governmental excess benefit arrangement) in respect of a qualified governmental excess benefit arrangement shall constitute income derived from the exercise of an essential governmental function upon which such governmental plan (or trust) shall be exempt from tax under section 115.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nThe Social Security Act, referred to in subsecs. (b)(8) and (d)(2)(B), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , as amended, which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. Sections 215(i)(2)(A) and 216( l ) of the Act enacted sections 415(i)(2)(A) and 416( l ) of Title 42, respectively. For complete classification of this Act to the Code, see Tables.\nThe date of the enactment of this clause, referred to in subsec. (b)(10)(C)(ii), is the date of enactment of  Pub. L. 104–188 , which was approved  Aug. 20, 1996 .\n2022—Subsec. (b)(12).  Pub. L. 117–328  added par. (12).\n2019—Subsec. (c)(8).  Pub. L. 116–94  added par. (8).\n2018—Subsec. (g).  Pub. L. 115–141  substituted “subsection (f)(2)” for “subsection (f)(3)”.\n2008—Subsec. (b)(2)(E)(v).  Pub. L. 110–458, §\u202f103(b)(2)(B)(i) , amended cl. (v) generally. Prior to amendment, cl. (v) read as follows: “For purposes of adjusting any benefit or limitation under subparagraph (B), (C), or (D), the mortality table used shall be the table prescribed by the Secretary. Such table shall be based on the prevailing commissioners’ standard table (described in section 807(d)(5)(A)) used to determine reserves for group annuity contracts issued on the date the adjustment is being made (without regard to any other subparagraph of section 807(d)(5)).”\nSubsec. (b)(2)(E)(vi).  Pub. L. 110–458, §\u202f122(a) , added cl. (vi).\nSubsec. (b)(10).  Pub. L. 110–458, §\u202f109(d)(1) , made technical correction to directory language of  Pub. L. 109–280, §\u202f906(b)(1)(B)(ii) . See 2006 Amendment note below.\nSubsec. (f)(2), (3).  Pub. L. 110–458, §\u202f108(g) , redesignated par. (3) as par. (2) and struck out former par. (2) which related to annual compensation taken into account for defined benefit plans.\n2006—Subsec. (b)(2)(E)(ii).  Pub. L. 109–280, §\u202f303(a) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “For purposes of adjusting any benefit under subparagraph (B) for any form of benefit subject to section 417(e)(3), the applicable interest rate (as defined in section 417(e)(3)) shall be substituted for ‘5 percent’ in clause (i), except that in the case of plan years beginning in 2004 or 2005, ‘5.5 percent’ shall be substituted for ‘5 percent’ in clause (i).”\nSubsec. (b)(2)(H)(i).  Pub. L. 109–280, §\u202f906(b)(1)(A)(i) , substituted “State, Indian tribal government (as defined in section 7701(a)(40)), or any political subdivision” for “State or political subdivision”.\nSubsec. (b)(2)(H)(ii)(I).  Pub. L. 109–280, §\u202f906(b)(1)(A)(ii) , substituted “State, Indian tribal government (as so defined), or any political subdivision” for “State or political subdivision” in two places.\nSubsec. (b)(3).  Pub. L. 109–280, §\u202f832(a) , struck out “both was an active participant in the plan and” before “had the greatest”.\nSubsec. (b)(10).  Pub. L. 109–280, §\u202f906(b)(1)(B)(ii) , as amended by  Pub. L. 110–458, §\u202f109(d)(1) , substituted “State, Indian tribal, and” for “State and” in heading.\nSubsec. (b)(10)(A).  Pub. L. 109–280, §\u202f906(b)(1)(B)(i) , inserted “or a governmental plan described in the last sentence of section 414(d) (relating to plans of Indian tribal governments),” after “foregoing,”.\nSubsec. (b)(11).  Pub. L. 109–280, §\u202f867(a) , inserted at end “Subparagraph (B) of paragraph (1) shall not apply to a plan maintained by an organization described in section 3121(w)(3)(A) except with respect to highly compensated benefits. For purposes of this paragraph, the term ‘highly compensated benefits’ means any benefits accrued for an employee in any year on or after the first year in which such employee is a highly compensated employee (as defined in section 414(q)) of the organization described in section 3121(w)(3)(A). For purposes of applying paragraph (1)(B) to highly compensated benefits, all benefits of the employee otherwise taken into account (without regard to this paragraph) shall be taken into account.”\nSubsec. (n)(1).  Pub. L. 109–280, §\u202f821(a)(1) , substituted “a participant” for “an employee” in introductory provisions.\nSubsec. (n)(3)(A).  Pub. L. 109–280, §\u202f821(a)(2) , inserted concluding provisions.\nSubsec. (n)(3)(B)(i), (ii).  Pub. L. 109–280, §\u202f821(c)(1) , substituted “nonqualified service credit” for “permissive service credit attributable to nonqualified service”.\nSubsec. (n)(3)(C).  Pub. L. 109–280, §\u202f821(c)(2) , substituted “service credit” for “service” in heading and “the term ‘nonqualified service credit’ means permissive service credit other than that allowed with respect to” for “the term ‘nonqualified service’ means service for which permissive service credit is allowed other than” in introductory provisions.\nSubsec. (n)(3)(C)(ii).  Pub. L. 109–280, §\u202f821(c)(3) , substituted “or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed” for “as determined under State law”.\nSubsec. (n)(3)(D).  Pub. L. 109–280, §\u202f821(b) , added subpar. (D).\n2005—Subsec. (c)(7)(C).  Pub. L. 109–135, §\u202f407(b) , substituted “$3,000. This subparagraph shall not apply with respect to any taxable year to any individual whose adjusted gross income for such taxable year (determined separately and without regard to community property laws) exceeds $17,000” for “the greater of $3,000 or the employee’s includible compensation determined under section 403(b)(3)”.\nSubsec. ( l )(1).  Pub. L. 109–135, §\u202f412(y) , substituted “individual medical benefit account” for “individual medical account”.\nSubsec. (n)(3)(C).  Pub. L. 109–135, §\u202f412(z) , substituted “clause” for “clauses” in concluding provisions.\n2004—Subsec. (b)(2)(E)(ii).  Pub. L. 108–218  inserted before period at end “,\u2000except that in the case of plan years beginning in 2004 or 2005, ‘5.5 percent’ shall be substituted for ‘5 percent’ in clause (i)”.\nSubsec. (c)(7)(C).  Pub. L. 108–311, §\u202f408(a)(17) , substituted “subparagraph (B)” for “subparagraph (D)”.\nSubsec. (d)(4)(A).  Pub. L. 108–311, §\u202f404(b)(2) , inserted at end “This subparagraph shall also apply for purposes of any provision of this title that provides for adjustments in accordance with the method contained in this subsection, except to the extent provided in such provision.”\n2002—Subsec. (c)(7).  Pub. L. 107–147  amended heading and text of par. (7) generally, substituting provisions relating to special rules relating to church plans for provisions relating to certain contributions by church plans not treated as exceeding limit and adding provisions relating to foreign missionaries and definitions of “church” and “convention or association of churches”.\n2001—Subsec. (a)(2).  Pub. L. 107–16, §\u202f632(a)(3)(C) , struck out “,\u2000and the amount of the contribution for such portion shall reduce the exclusion allowance as provided in section 403(b)(2)” before period at end.\nSubsec. (b)(1)(A).  Pub. L. 107–16, §\u202f611(a)(1)(A) , substituted “$160,000” for “$90,000”.\nSubsec. (b)(2)(A), (B).  Pub. L. 107–16, §\u202f641(e)(9) , substituted “403(b)(8), 408(d)(3), and 457(e)(16)” for “and 408(d)(3)”.\nSubsec. (b)(2)(C).  Pub. L. 107–16, §\u202f611(a)(1)(B) , (2), in heading substituted “$160,000” for “$90,000” and “age 62” for “the social security retirement age” and in text substituted “age 62” for “the social security retirement age” in two places, “$160,000” for “$90,000” in two places, and struck out at end “The reduction under this subparagraph shall be made in such manner as the Secretary may prescribe which is consistent with the reduction for old-age insurance benefits commencing before the social security retirement age under the Social Security Act.”\nSubsec. (b)(2)(D).  Pub. L. 107–16, §\u202f611(a)(1)(B) , (3), in heading substituted “$160,000” for “$90,000” and “age 65” for “the social security retirement age” and in text substituted “age 65” for “the social security retirement age” in two places and “$160,000” for “$90,000” in two places.\nSubsec. (b)(2)(F).  Pub. L. 107–16, §\u202f611(a)(5)(A) , struck out subpar. (F), which related to the application of subpars. (C) and (D) in the case of a governmental plan, a plan maintained by a tax-exempt organization, or a qualified merchant marine plan and defined “qualified merchant marine plan”.\nSubsec. (b)(7).  Pub. L. 107–16, §\u202f654(a)(2) , inserted “(other than a multiemployer plan)” after “defined benefit plan” in introductory provisions.\nPub. L. 107–16, §\u202f611(a)(1)(C) , substituted “one-half the amount otherwise applicable for such year under paragraph (1)(A) for ‘$160,000’\u202f” for “the greater of $68,212 or one-half the amount otherwise applicable for such year under paragraph (1)(A) for ‘$90,000’\u202f” in concluding provisions.\nSubsec. (b)(9).  Pub. L. 107–16, §\u202f611(a)(5)(B) , amended par. (9) generally, substituting present provisions for provisions which provided that, in the case of any participant who was a commercial airline pilot, the rule of par. (2)(F)(i)(II) would apply, and if, as of the time of the participant’s retirement, regulations prescribed by the Federal Aviation Administration required an individual to separate from service as a commercial airline pilot after attaining any age occurring on or after age 60 and before the social security retirement age, par. (2)(C) would be applied by substituting such age for the social security retirement age, and provisions which provided that if a participant separated from service before age 60, the rules of par. (2)(F) would apply.\nSubsec. (b)(10)(C)(i).  Pub. L. 107–16, §\u202f611(a)(5)(C) , struck out “applied without regard to paragraph (2)(F)” before period at end.\nSubsec. (b)(11).  Pub. L. 107–16, §\u202f654(a)(1) , amended heading and text of par. (11) generally. Prior to amendment, text read as follows: “In the case of a governmental plan (as defined in section 414(d)), subparagraph (B) of paragraph (1) shall not apply.”\nSubsec. (c)(1)(A).  Pub. L. 107–16, §\u202f611(b)(1) , substituted “$40,000” for “$30,000”.\nSubsec. (c)(1)(B).  Pub. L. 107–16, §\u202f632(a)(1) , substituted “100 percent” for “25 percent”.\nSubsec. (c)(2).  Pub. L. 107–16, §\u202f641(e)(10) , substituted “408(d)(3), and 457(e)(16)” for “and 408(d)(3)” in concluding provisions.\nSubsec. (c)(3)(E).  Pub. L. 107–16, §\u202f632(a)(3)(D) , added subpar. (E).\nSubsec. (c)(4).  Pub. L. 107–16, §\u202f632(a)(3)(E) , struck out par. (4), which related to special election for section 403(b) contracts purchased by educational organizations, hospitals, home health service agencies, certain churches, and other organizations.\nSubsec. (c)(7).  Pub. L. 107–16, §\u202f632(a)(3)(F) , amended par. (7) generally, redesignating cls. (i) and (ii) of subpar. (B) as subpars. (A) and (B), respectively, reenacting subpar. (C) without change, striking out former subpar. (A), which directed that any contribution or addition with respect to any participant, when expressed as an annual addition, which was allocable to the application of section 403(b)(2)(D) to such participant for such year, would be treated as not exceeding the limitations of par. (1), and striking out former subpar. (B), cl. (iii), which prohibited making of election under this subpar. for any year if an election had been made under former par. (4)(A) for such year.\nSubsec. (d)(1)(A).  Pub. L. 107–16, §\u202f611(a)(4)(A) , substituted “$160,000” for “$90,000”.\nSubsec. (d)(1)(C).  Pub. L. 107–16, §\u202f611(b)(2)(A) , substituted “$40,000” for “$30,000”.\nSubsec. (d)(3)(A).  Pub. L. 107–16, §\u202f611(a)(4)(B) , in heading substituted “$160,000” for “$90,000” and in text substituted “ July 1, 2001 ” for “ October 1, 1986 ”.\nSubsec. (d)(3)(D).  Pub. L. 107–16, §\u202f611(b)(2)(B) , in heading substituted “$40,000” for “$30,000” and in text substituted “ July 1, 2001 ” for “ October 1, 1993 ”.\nSubsec. (d)(4).  Pub. L. 107–16, §\u202f611(h) , reenacted heading without change and amended text of par. (4) generally. Prior to amendment, text read as follows: “Any increase under subparagraph (A) or (C) of paragraph (1) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.”\nSubsec. (f)(3).  Pub. L. 107–16, §\u202f654(b)(1) , added par. (3).\nSubsec. (g).  Pub. L. 107–16, §\u202f654(b)(2) , substituted “Except as provided in subsection (f)(3), the Secretary” for “The Secretary”.\nSubsec. (k)(4).  Pub. L. 107–16, §\u202f632(b)(1) , added par. (4).\n2000—Subsec. (c)(3)(D)(ii).  Pub. L. 106–554  substituted “section 125, 132(f)(4), or” for “section 125 or”.\n1997—Subsec. (b)(2)(G).  Pub. L. 105–34, §\u202f1527(a) , substituted “participant, subparagraph (C) of this paragraph shall not apply.” for “participant—\n“(i) subparagraph (C) shall not reduce the limitation of paragraph (1)(A) to an amount less than $50,000, and\n“(ii) the rules of subparagraph (F) shall apply.\nThe Secretary shall adjust the $50,000 amount in clause (i) at the same time and in the same manner as under section 415(d).”\nSubsec. (c)(6).  Pub. L. 105–34, §\u202f1530(c)(3) , inserted concluding provisions “The amount of any qualified gratuitous transfer (as defined in section 664(g)(1)) allocated to a participant for any limitation year shall not exceed the limitations imposed by this section, but such amount shall not be taken into account in determining whether any other amount exceeds the limitations imposed by this section.”\nSubsec. (e)(6), (7).  Pub. L. 105–34, §\u202f1530(c)(4) , added par. (6) and redesignated former par. (6) as (7).\nSubsec. (k)(3).  Pub. L. 105–34, §\u202f1526(b) , added par. (3).\nSubsec. (n).  Pub. L. 105–34, §\u202f1526(a) , added subsec. (n).\n1996—Subsec. (a)(1).  Pub. L. 104–188, §\u202f1452(c)(1) , inserted “or” at end of subpar. (A), struck out “,\u2000or” at end of subpar. (B), and struck out subpar. (C) which read as follows: “in any case in which an individual is a participant in both a defined benefit plan and a defined contribution plan maintained by the employer, the trust has been disqualified under subsection (g).”\nSubsec. (b)(2)(E)(i).  Pub. L. 104–188, §\u202f1449(b)(1) , substituted “For purposes of adjusting any limitation under subparagraph (C) and, except as provided in clause (ii), for purposes of adjusting any benefit under subparagraph (B),” for “Except as provided in clause (ii), for purposes of adjusting any benefit or limitation under subparagraph (B) or (C),”.\nSubsec. (b)(2)(E)(ii).  Pub. L. 104–188, §\u202f1449(b)(2) , substituted “For purposes of adjusting any benefit under subparagraph (B) for any form of benefit subject to section 417(e)(3),” for “For purposes of adjusting the benefit or limitation of any form of benefit subject to section 417(e)(3),”.\nSubsec. (b)(2)(I).  Pub. L. 104–188, §\u202f1444(c) , added subpar. (I).\nSubsec. (b)(5)(B).  Pub. L. 104–188, §\u202f1452(c)(2) , struck out “and subsection (e)” after “and (4)”.\nSubsec. (b)(10)(C).  Pub. L. 104–188, §\u202f1444(d) , designated existing provisions as cl. (i), inserted heading, and added cl. (ii).\nSubsec. (b)(11).  Pub. L. 104–188, §\u202f1444(a) , added par. (11).\nSubsec. (c)(3)(C).  Pub. L. 104–188, §\u202f1446(a) , inserted at end “If a defined contribution plan provides for the continuation of contributions on behalf of all participants described in clause (i) for a fixed or determinable period, this subparagraph shall be applied without regard to clauses (ii) and (iii).”\nSubsec. (c)(3)(D).  Pub. L. 104–188, §\u202f1434(a) , added subpar. (D).\nSubsec. (e).  Pub. L. 104–188, §\u202f1452(a) , struck out subsec. (e) which related to limitation in case of a defined benefit plan and a defined contribution plan for same employee.\nSubsec. (f)(1).  Pub. L. 104–188, §\u202f1452(c)(3) , in introductory provisions, substituted “subsections (b) and (c)” for “subsections (b), (c), and (e)”.\nSubsec. (g).  Pub. L. 104–188, §\u202f1452(c)(4) , in last sentence, substituted “subsection (f)” for “subsections (e) and (f)”.\nSubsec. (k)(1)(C) to (F).  Pub. L. 104–188, §\u202f1704(t)(75) , inserted “or” at end of subpar. (C), redesignated subpar. (F) as (D), and struck out former subpars. (D) and (E) which read as follows:\n“(D) an individual retirement account described in section 408(a),\n“(E) an individual retirement annuity described in section 408(b), or”.\nSubsec. (k)(2)(A)(i).  Pub. L. 104–188, §\u202f1452(c)(5) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any contribution made directly by an employee under such arrangement—\n“(I) shall not be treated as an annual addition for purposes of subsection (c), but\n“(II) shall be so treated for purposes of subsection (e), and”.\nSubsec. (k)(2)(A)(ii).  Pub. L. 104–188, §\u202f1452(c)(6) , substituted “subsection (c)” for “subsections (c) and (e)” before “shall not again”.\nSubsec. (m).  Pub. L. 104–188, §\u202f1444(b)(1) , added subsec. (m).\n1994—Subsec. (b)(2)(E).  Pub. L. 103–465, §\u202f767(b) , added cls. (i), (ii), and (v), redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively, and struck out former cl. (i) which read as follows: “For purposes of adjusting any benefit or limitation under subparagraph (B) or (C), the interest rate assumption shall not be less than the greater of 5 percent or the rate specified in the plan.”\nSubsec. (c)(1)(A).  Pub. L. 103–465, §\u202f732(b)(2) , struck out “(or, if greater, ¼ of the dollar limitation in effect under subsection (b)(1)(A))” after “$30,000”.\nSubsec. (d).  Pub. L. 103–465, §\u202f732(b)(1) , amended subsec. (d) generally, substituting present provisions for provisions authorizing annual cost-of-living adjustments, outlining base periods, and providing for a freeze on adjustment to defined contribution and benefit limits.\n1992—Subsecs. (b)(2)(A), (B), (c)(2).  Pub. L. 102–318  substituted “402(c)” for “402(a)(5)”.\n1989—Subsec. (c)(6).  Pub. L. 101–239  substituted “Special rule for employee stock ownership plans” for “Special limitation for employee stock ownership plan” in heading and amended text generally, substituting introductory provisions and subpars. (A) and (B) for former subpars. (A) to (C).\n1988—Subsec. (b)(2)(H)(ii).  Pub. L. 100–647, §\u202f6059(a) , substituted “15” for “20”.\nSubsec. (b)(5)(B).  Pub. L. 100–647, §\u202f1011(d)(6) , inserted “and subsection (e)” after “paragraphs (1)(B) and (4)”.\nSubsec. (b)(5)(D).  Pub. L. 100–647, §\u202f1011(d)(2) , substituted “subparagraph (A)” for “this paragraph”.\nSubsec. (b)(10).  Pub. L. 100–647, §\u202f6054(a) , added par. (10).\nSubsec. (c)(6)(A).  Pub. L. 100–647, §\u202f1011(d)(7) , substituted “paragraph (1)(A)” for “paragraph (c)(1)(A) (as adjusted for such year pursuant to subsection (d)(1))” and for “paragraph (c)(1)(A) (as so adjusted)”.\nSubsec. (k).  Pub. L. 100–647, §\u202f1018(t)(8)(D) , repealed  Pub. L. 99–514, §\u202f1899A(13) , see 1986 Amendment note below.\nSubsec. (k)(2)(C)(ii).  Pub. L. 100–647, §\u202f1011(d)(3)(A) , substituted “to such increase” for “to the arrangement”.\nSubsec. (k)(2)(D).  Pub. L. 100–647, §\u202f1011(d)(3)(B) , added subpar. (D) and struck out former subpar. (D) which read as follows: “An arrangement meets the requirements of this subparagraph only if it is elective, it is available under the same terms to all participants, and it provides that such election may be made in—\n“(i) the year in which the participant—\n“(I) attains the earliest retirement age under the defined benefit plan (determined without regard to any requirement of separation from service), or\n“(II) separates from service, or\n“(ii) both such years.”\nSubsec. ( l )(1).  Pub. L. 100–647, §\u202f1018(t)(3)(B) , made technical correction to directory language of  Pub. L. 99–514, §\u202f1852(h)(2) . See 1986 Amendment note below.\n1986—Subsec. (b)(2)(B).  Pub. L. 99–514, §\u202f1898(b)(15)(C) , substituted reference to section 417 for reference to section 401(a)(11)(G)(iii).\nSubsec. (b)(2)(C).  Pub. L. 99–514, §\u202f1106(b)(1)(A) , substituted in heading and in two places in text “the social security retirement age” for “age 62” and substituted new last sentence for “The reduction under this subparagraph shall not reduce the limitation of paragraph (1)(A) below—\n“(i) if the benefit begins at or after age 55, $75,000, or\n“(ii) if the benefit begins before age 55, the amount which is the equivalent of the $75,000 limitation for age 55.”\nSubsec. (b)(2)(D).  Pub. L. 99–514, §\u202f1106(b)(1)(A)(i) , substituted in heading and in two places in text “the social security retirement age” for “age 65”.\nSubsec. (b)(2)(E)(iii).  Pub. L. 99–514, §\u202f1875(c)(9) , substituted “this subsection” for “adjusting any benefit or limitation under subparagraph (B), (C), or (D)”.\nSubsec. (b)(2)(F) to (H).  Pub. L. 99–514, §\u202f1106(b)(2) , added subpars. (F) to (H).\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f1106(f) , substituted “Reduction for participation or service of less than 10 years” for “Reduction for service less than 10 years” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of an employee who has less than 10 years of service with the employer, the limitation referred to in paragraph (1), and the limitation referred to in paragraph (4), shall be the limitation determined under such paragraph (without regard to this paragraph), multiplied by a fraction, the numerator of which is the number of years (or part thereof) of service with the employer and the denominator of which is 10.”\nSubsec. (b)(8).  Pub. L. 99–514, §\u202f1106(b)(1)(B) , added par. (8).\nSubsec. (b)(9).  Pub. L. 99–514, §\u202f1106(b)(3) , added par. (9).\nSubsec. (c)(1)(A).  Pub. L. 99–514, §\u202f1106(a) , amended subpar. (A) generally, inserting “(or, if greater, ¼ of the dollar limitation in effect under subsection (b)(1)(A))”.\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f1108(g)(5) , substituted “which are excludable from gross income under section 408(k)(6)” for “allowable as a deduction under section 219(a), and without regard to deductible employee contributions within the meaning of section 72( o )(5)” in last sentence.\nPub. L. 99–514, §\u202f1106(e)(2) , inserted at end “Subparagraph (B) of paragraph (1) shall not apply to any contribution for medical benefits (within the meaning of section 419A(f)(2)) after separation from service which is treated as an annual addition.”\nSubsec. (c)(2)(B).  Pub. L. 99–514, §\u202f1106(e)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the lesser of—\n“(i) the amount of the employee contributions in excess of 6 percent of his compensation, or\n“(ii) one-half of the employee contributions, and”.\nSubsec. (c)(3)(C).  Pub. L. 99–514, §\u202f1875(c)(11) , substituted “any defined contribution plan” for “a profit-sharing or stock bonus plan”.\nSubsec. (c)(3)(C)(i).  Pub. L. 99–514, §\u202f1847(b)(4) , substituted “section 22(e)(3)” for “section 37(e)(3)”.\nSubsec. (c)(3)(C)(ii).  Pub. L. 99–514, §\u202f1114(b)(12) , substituted “a highly compensated employee (within the meaning of section 414(q))” for “an officer, owner, or highly compensated”.\nSubsec. (c)(4)(A) to (C).  Pub. L. 99–514, §\u202f1106(b)(4) , inserted “a health and welfare service agency,” after “a home health service agency,”.\nSubsec. (c)(6)(A).  Pub. L. 99–514, §\u202f1174(d)(1) , substituted “highly compensated employees (within the meaning of section 414(q))” for “the group of employees consisting of officers, shareholders owning more than 10 percent of the employer’s stock (determined under subparagraph (B)(iv)), or employees described in subparagraph (B)(iii)”.\nSubsec. (c)(6)(B)(iii), (iv).  Pub. L. 99–514, §\u202f1174(d)(2)(A) , struck out cls. (iii) and (iv) which read as follows:\n“(iii) an employee described in this clause is any participant whose compensation for a year exceeds an amount equal to twice the amount described in paragraph (1)(A) for such year (as adjusted for such year pursuant to subsection (d)(1)), determined without regard to subparagraph (A) of this paragraph, and\n“(iv) an individual shall be considered to own more than 10 percent of the employer’s stock if, without regard to stock held under the employee stock ownership plan, he owns (after application of section 1563(e)) more than 10 percent of the total combined voting power of all classes of stock entitled to vote or more than 10 percent of the total value of shares of all classes of stock.”\nSubsec. (c)(6)(C).  Pub. L. 99–514, §\u202f1174(d)(2)(B) , substituted “highly compensated employees (within the meaning of section 414(q))” for “the group of employees consisting of officers, shareholders owning more than 10 percent of the employer’s stock (determined under subparagraph (B)(iv)), or employees described in subparagraph (B)(iii)”.\nSubsec. (d)(1)(B), (C).  Pub. L. 99–514, §\u202f1106(g)(1) , redesignated subpar. (C) as (B) and struck out former subpar. (B), which related to the $30,000 amount in subsection (c)(1)(A).\nSubsec. (d)(2)(A).  Pub. L. 99–514, §\u202f1106(g)(2)(A) , substituted “subparagraph (A)” for “subparagraphs (A) and (B)”.\nSubsec. (d)(2)(B).  Pub. L. 99–514, §\u202f1106(g)(2)(B) , substituted “subparagraph (B)” for “subparagraph (C)”.\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1106(g)(3) , substituted “subparagraph (A)” for “subparagraph (A) or (B)”.\nSubsec. (k).  Pub. L. 99–514, §\u202f1899A(13) , which directed the general amendment of subsec. (k) by striking out par. (1) designation and redesignating subpars. (A) to (F) as pars. (1) to (6), respectively, was repealed by  Pub. L. 100–647, §\u202f1018(t)(8)(D) .\nSubsec. (k)(2).  Pub. L. 99–514, §\u202f1106(c)(1) , added par. (2) relating to contributions to provide cost-of-living protection under defined benefit plans.\nSubsec. ( l ).  Pub. L. 99–514, §\u202f1852(h)(3) , substituted “a pension or annuity plan” for “a defined benefit plan” in pars. (1) and (2)(A).\nPub. L. 99–514, §\u202f1852(h)(2) , as amended by  Pub. L. 100–647, §\u202f1018(t)(3)(B) , inserted at end of par. (1) “Subparagraph (B) of subsection (c)(1) shall not apply to any amount treated as an annual addition under the preceding sentence.”\n1984—Subsec. (a)(2).  Pub. L. 98–369, §\u202f491(d)(28) , struck out subpar. (D) which related to application of this section to a plan described in section 405(a), and in provision following subpar. (C) struck out “405(a),” after “403(b),”.\nSubsec. (b)(2)(A), (B).  Pub. L. 98–369, §\u202f491(d)(29) , (30), substituted “and 408(d)(3)” for “408(d)(3) and 409(b)(3)(C)”.\nSubsec. (b)(2)(C).  Pub. L. 98–369, §\u202f713(a)(1)(A) , substituted provision respecting determination as to whether $90,000 limitation has been satisfied by reducing the limitation of par. (1)(A) so that such limitation (as so reduced) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a $90,000 annual benefit beginning at age 62 for provision for such determination by adjusting the benefit so that it is equivalent to such a benefit beginning at age 62.\nSubsec. (b)(2)(D).  Pub. L. 98–369, §\u202f713(a)(1)(B) , substituted “limit” for “limitation” in heading, and in text substituted provision respecting determination as to whether $90,000 limitation has been satisfied by increasing the limitation of par. (1)(A) so that such limitation (as so increased) equals an annual benefit (beginning when such retirement income benefit begins) which is equivalent to a $90,000 annual benefit beginning at age 65 for provision for such determination by adjusting the benefit so that it is equivalent to such a benefit beginning at age 65.\nSubsec. (b)(2)(E).  Pub. L. 98–369, §\u202f713(a)(1)(C) , provided in cls. (i) and (iii) for adjustment of any limitation and substituted in cl. (ii) “any limitation” for “any benefit”.\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f491(d)(31) , substituted “and 408(d)(3)” for “405(d)(3), 408(d)(3), and 409(b)(3)(C)”.\nSubsec. (c)(3)(C).  Pub. L. 98–369, §\u202f713(k) , inserted in introductory text “in a profit-sharing or stock bonus plan”, and substituted in last sentence “if contributions made with respect to amounts treated as compensation under this subparagraph” for “if contributions made with respect to such participant”.\nSubsec. (c)(6)(B)(ii).  Pub. L. 98–369, §\u202f491(e)(6) , substituted “section 409” for “section 409A”.\nSubsec. (c)(6)(C).  Pub. L. 98–369, §\u202f713(d)(4)(B)(i) –(iii), substituted “paragraph (9)” for “paragraph (10)” of section 404(a), section “404(a)(9)(A)” for “404(a)(10)(A)”, and section “404(a)(9)(B)” for “404(a)(10)(B)”.\nSubsec. (c)(7), (8).  Pub. L. 98–369, §\u202f713(d)(7)(A) , redesignated par. (8) as (7), and struck out former par. (7) relating to certain level premium annuity contracts under plans benefiting owner-employees.\nSubsec. (d)(2)(A).  Pub. L. 98–369, §\u202f15(b) , substituted “1986” for “1984”.\nSubsec. (d)(3).  Pub. L. 98–369, §\u202f15(a) , substituted “ January 1, 1988 ” for “ January 1, 1986 ”.\nSubsec. (e)(3)(B)(ii)(II).  Pub. L. 98–369, §\u202f713(d)(7)(B) , struck out reference to subsec. (c)(8).\nSubsec. (e)(6)(C).  Pub. L. 98–369, §\u202f713(a)(3) , added subpar. (C).\nSubsec. (k)(1).  Pub. L. 98–369, §\u202f491(d)(32) , struck out subpars. (C) and (H), which included a qualified bond purchase plan described in section 405(a) and an individual retirement bond described in section 409 within the term “defined contribution plan” or “defined benefit plan”, respectively, and redesignated subpars. (D) to (G) as (C) to (F), respectively.\nSubsec. ( l ).  Pub. L. 98–369, §\u202f528(a) , added subsec. ( l ).\n1983—Subsec. (c)(3)(C)(i).  Pub. L. 98–21  substituted “section 37(e)(3)” for “section 105(d)(4)”.\n1982—Subsec. (b)(1)(A).  Pub. L. 97–248, §\u202f235(a)(1) , substituted “$90,000” for “$75,000”.\nSubsec. (b)(2)(C).  Pub. L. 97–248, §\u202f235(a)(3)(A) , (e)(1), (2), inserted provisions relating to reduction under this subparagraph, and substituted “$90,000” for “$75,000” and “62” for “55”, wherever appearing.\nSubsec. (b)(2)(D), (E).  Pub. L. 97–248, §\u202f235(e)(3) , (4), added subpars. (D) and (E).\nSubsec. (b)(7).  Pub. L. 97–248, §\u202f235(a)(3)(B) , substituted “the greater of $68,212 or one-half the amount otherwise applicable for such year under paragraph (1)(A) for ‘$90,000’\u202f” for “\u202f‘37,500’ for ‘75,000’\u202f”.\nSubsec. (c)(1)(A).  Pub. L. 97–248, §\u202f235(a)(2) , substituted “$30,000” for “$25,000”.\nSubsec. (c)(3).  Pub. L. 97–248, §\u202f253(a) , designated existing provisions as subpars. (A) and (B) and added subpar. (C).\nSubsec. (c)(4).  Pub. L. 97–248, §\u202f251(c)(1) , substituted “,\u2000home health service agencies, and certain churches, etc.” for “and home health service agencies” in heading, in subpar. (A) inserted “(as determined for purposes of section 403(b)(2))” after “by taking into account his service for the employer”, substituted “a home health service agency, or a church, convention or association of churches, or an organization described in section 414(e)(3)(B)(ii)” for “or a home health service agency” in subpars. (A), (B) and (C), respectively, and, in subpar. (D), added cl. (iv).\nSubsec. (c)(5).  Pub. L. 97–248, §\u202f238(d)(5) , struck out par. (5) relating to application with section 404(e)(4).\nSubsec. (c)(8).  Pub. L. 97–248, §\u202f251(c)(2) , added par. (8).\nSubsec. (d)(1).  Pub. L. 97–248, §\u202f235(b)(1) , substituted “benefit amounts” for “primary insurance amounts” in provision following subpar. (C).\nPub. L. 97–248, §\u202f235(b)(3) , substituted “$90,000” for “$75,000” in subpar. (A), and in subpar. (B) substituted “$30,000” for “$25,000”.\nSubsec. (d)(2)(A).  Pub. L. 97–248, §\u202f235(b)(2)(B) , substituted “1984” for “1974”.\nSubsec. (d)(3).  Pub. L. 97–248, §\u202f235(b)(2)(A) , added par. (3).\nSubsec. (e)(1).  Pub. L. 97–248, §\u202f235(c)(1) , substituted “1.0” for “1.4”.\nSubsec. (e)(2)(B).  Pub. L. 97–248, §\u202f235(c)(2)(A) , substituted provisions that for purposes of this subsection, the defined benefit plan fraction for any year has a denominator which is the lesser of the product of 1.25 multiplied by the dollar limitation in effect under subsec. (b)(1)(A) for such year, or the product of 1.4 multiplied by the amount which may be taken into account under subsec. (b)(1)(B) with respect to such individual under the plan for such year, for provisions that such benefit plan fraction had a denominator which was the projected annual benefit of the participant under the plan (determined as of the close of the year) if the plan provided the maximum benefit allowable under subsec. (b).\nSubsec. (e)(3)(B).  Pub. L. 97–248, §\u202f235(c)(2)(B) , substituted provision that the defined contribution plan fraction for any year has a denominator which, determined for such year and for each prior year of service with the employer, is the lesser of either the product of 1.25 multiplied by the dollar limitation in effect under subsec. (c)(1)(A) for such year (determined without regard to subsec. (c)(6)), or the product of 1.4 multiplied by the amount which may be taken into account under subsec. (c)(1)(B) (or subsec. (c)(7) or (8), if applicable) with respect to such individual under such plan for such year, for provision that the denominator of such fraction was the sum of the maximum amount of annual additions to the participant’s account which could have been made under subsec. (c) for such year and for each prior year of service with the employer (determined without regard to subsec. (c)(6)).\nSubsec. (e)(6).  Pub. L. 97–248, §\u202f235(d) , added par. (6).\n1981—Subsec. (a)(2).  Pub. L. 97–34, §\u202f311(g)(4)(A) , struck out in provision preceding subpar. (A) “Except as provided in paragraph (3)”, redesignated former subpar. (E) as (C), and in subpar. (C) as so designated, inserted “described in section 408(k), or”, redesignated former subpar. (F) as (D), struck out former subpars. (C), relating to an individual retirement account described under section 408(a), (D), relating to an individual retirement annuity described in section 408(b), and (G), relating to a retirement bond described in section 409, and in provision following subpar. (D), substituted “such a contract, plan, or pension,” for “such contract, annuity plan, account, annuity, plan, or bond” and “408(k)” for “408(a), 408(b), or 409”.\nSubsec. (a)(3).  Pub. L. 97–34, §\u202f311(h)(3) , struck out par. (3) which provided that par. (2) not apply to an account, annuity, or bond described in section 408(a), 408(b), or 409, established for the benefit of the spouse of the individual contributing to such account, or for such annuity or bond, if a deduction is allowed under section 220 to such individual with respect to such contribution for such year.\nSubsec. (c)(2).  Pub. L. 97–34, §\u202f311(g)(4)(B) , included in provision following subpar. (C) references to sections 403(b)(8) and 405(d)(3) and inserted “without regard to employee contributions to a simplified employee pension allowable as a deduction under section 219(a), and without regard to deductible employee contributions within the meaning of section 72( o )(5)”.\nSubsec. (c)(6)(C).  Pub. L. 97–34, §\u202f333(b)(1) , added subpar. (C).\nSubsec. (e)(5).  Pub. L. 97–34, §\u202f311(g)(4)(C) , struck out “,\u2000any individual retirement account described in section 408(a), any individual retirement annuity described in section 408(b), and any retirement bond described in section 409,” before “for the benefit”.\n1980—Subsec. (b)(7).  Pub. L. 96–222, §\u202f101(a)(11) , substituted in subpar. (C) “under which benefits are determined solely by reference to length of service, the particular years during which service was rendered, age at retirement, and date of retirement” for “benefits under which are determined by multiplying a specified amount (which is the same amount for each participant) by the number of the participant’s years of service” and inserted in text following subpar. (E) provisions requiring that this paragraph not apply to a participant for any period for which he is a participant under another plan to which this section applies which is maintained by an employer maintaining this plan.\nSubsec. (c)(6)(A).  Pub. L. 96–605  inserted “,\u2000or purchased with cash contributed,” after “securities contributed”.\nSubsec. (c)(6)(B)(i).  Pub. L. 96–222, §\u202f101(a)(7)(L)(i)(VII) , (iv)(I), substituted “a tax credit employee stock ownership plan” for “an ESOP” and struck out “leveraged” before “employee”.\nSubsec. (e)(5).  Pub. L. 96–222, §\u202f101(a)(10)(I) , inserted provisions requiring that for purposes of this section, any contribution by an employer to a simplified employee pension for an individual for a taxable year be treated as an employer contribution to a defined contribution plan for such individual for such year.\n1978—Subsec. (a)(2).  Pub. L. 95–600, §\u202f152(g)(1) , (2), as amended by  Pub. L. 96–222, §\u202f101(a)(10)(J)(iii) , added subpar. (E), redesignated former subpars. (E) and (F) as (F) and (G), respectively, and in provision following subpar. (G) as so redesignated, inserted “408(k),” after “408(b),”.\nSubsec. (b)(7).  Pub. L. 95–600, §\u202f153(a) , added par. (7).\nSubsec. (c)(6)(B)(i).  Pub. L. 95–600, §\u202f141(f)(7) , substituted “leveraged employee stock ownership plan (within the meaning of section 4975(e)(7)) or an ESOP” for “a plan which meets the requirements of section 4975(e)(7) or section 301(d) of the Tax Reduction Act of 1975”.\nSubsec. (c)(6)(B)(ii).  Pub. L. 95–600, §\u202f141(f)(7) , substituted “has the meaning given to such term by section 409A” for “means, in the case of an employee stock ownership plan within the meaning of section 4975(e)(7), qualifying employer securities within the meaning of section 4975(e)(8), but only if they are described in section 301(d)(9)(A) of the Tax Reduction Act of 1975, or, in the case of an employee stock ownership plan described in section 301(d)(2) of the Tax Reduction Act of 1975, employer securities within the meaning of section 301(d)(9)(A) of such Act”.\nSubsec. (e)(5).  Pub. L. 95–600, §\u202f152(g)(3) , inserted “any simplified employee pension,” after “section 408(b),”.\nSubsec. (k)(1)(G), (H).  Pub. L. 95–600, §\u202f152(g)(4) , added subpar. (G) and redesignated former subpar. (G) as (H).\n1976—Subsec. (a)(2).  Pub. L. 94–455, §\u202f1501(b)(3)(A) , substituted “Except as provided in paragraph (3), in the case” for “In the case”.\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f1501(b)(3)(B) , added par. (3).\nSubsec. (b)(2)(A).  Pub. L. 94–455, §\u202f1901(a)(65)(A) , inserted closing parenthesis after “409(b)(3)(C)”.\nSubsec. (b)(2)(B).  Pub. L. 94–455 , §§\u202f1901(a)(65)(B), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” and substituted “section 401(a)(11)(G)(iii)” for “section 401(a)(11)(H)(iii)”.\nSubsec. (b)(2)(C), (6).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(4).  Pub. L. 94–455 , §§\u202f1901(b)(8)(D), 1906(b)(13)(A), substituted “educational organizations” for “educational institutions” in the heading and “educational organization” for “educational institution” in subpars. (A), (B), and (C), struck out “or his delegate” after “Secretary” in subpar. (D)(i), and substituted “For purposes of this paragraph the term ‘educational organization’ means an educational organization described in section 170(b)(1)(A)(ii)” for “For purposes of this paragraph the term ‘educational institution’ means an educational institution as defined in section 151(e)(4)” in subpar. (D)(ii).\nSubsec. (c)(5).  Pub. L. 94–455, §\u202f1502(a)(1) , added par. (5).\nSubsec. (c)(6).  Pub. L. 94–455, §\u202f803(f)(1) , added par. (6).\nSubsec. (c)(7).  Pub. L. 94–455, §\u202f1511(a) , added par. (7).\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(3)(B).  Pub. L. 94–455, §\u202f803(f)(2) , substituted “with the employer determined without regard to paragraph (6) of such subsection)” for “with the employer”.\nSubsec. (e)(5).  Pub. L. 94–455, §\u202f803(b)(4) , substituted “For purposes of this section” for “For purposes of this subsection”.\nSubsecs. (g), (i), (j).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nPub. L. 117–328, div. T, title I, §\u202f119(b) ,  Dec. 29, 2022 ,  136 Stat. 5303 , provided that:  “The amendment made by this section [amending this section] shall apply to limitation years ending after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 116–94, div. O, title I, §\u202f116(b)(2) ,  Dec. 20, 2019 ,  133 Stat. 3161 , provided that:  “The amendment made by this subsection [amending this section] shall apply to plan years beginning after  December 31, 2015 .”\nPub. L. 110–458, title I, §\u202f103(b)(2)(B)(ii) ,  Dec. 23, 2008 ,  122 Stat. 5103 , provided that: \n “(I)  Except as provided in subclause (II), the amendment made by clause (i) [amending this section] shall apply to years beginning after  December 31, 2008 . \n \n “(II)  A plan sponsor may elect to have the amendment made by clause (i) apply to any year beginning after  December 31, 2007 , and before  January 1, 2009 , or to any portion of any such year.”\nAmendment by sections 108(g) and 109(d)(1) of  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 110–458, title I, §\u202f122(b) ,  Dec. 23, 2008 ,  122 Stat. 5114 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 2008 .”\nPub. L. 109–280, title III, §\u202f303(b) ,  Aug. 17, 2006 ,  120 Stat. 921 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions made in years beginning after  December 31, 2005 .”\nPub. L. 109–280, title VIII, §\u202f821(d) ,  Aug. 17, 2006 ,  120 Stat. 998 , provided that: \n “(1)   In general .— The amendments made by subsections (a) and (c) [amending this section] shall take effect as if included in the amendments made by section 1526 of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ]. \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall take effect as if included in the amendments made by section 647 of the Economic Growth and Tax Relief Reconciliation Act of 2001 [see  section 647(c) of Pub. L. 107–16 , set out as an Effective Date of 2001 Amendment note under  section 403 of this title ].”\nPub. L. 109–280, title VIII, §\u202f832(b) ,  Aug. 17, 2006 ,  120 Stat. 1003 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 2005 .”\nPub. L. 109–280, title VIII, §\u202f867(b) ,  Aug. 17, 2006 ,  120 Stat. 1025 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 2006 .”\nAmendment by section 906(b)(1)(A), (B) of  Pub. L. 109–280  applicable to any year beginning on or after  Aug. 17, 2006 , see  section 906(c) of Pub. L. 109–280 , set out as a note under  section 414 of this title .\nAmendment by  section 407(b) of Pub. L. 109–135  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 407(c) of Pub. L. 109–135 , set out as a note under  section 402 of this title .\nAmendment by  section 404(b)(2) of Pub. L. 108–311  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 404(f) of Pub. L. 108–311 , set out as a note under  section 45A of this title .\nAmendment by  Pub. L. 108–218  applicable, except as otherwise provided, to plan years beginning after  Dec. 31, 2003 , see  section 101(d) of Pub. L. 108–218 , set out as a note under  section 404 of this title .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nPub. L. 107–16, title VI, §\u202f611(i) ,  June 7, 2001 ,  115 Stat. 100 , as amended by  Pub. L. 107–147, title IV, §\u202f411(j)(3) ,  Mar. 9, 2002 ,  116 Stat. 47 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 401, 402, 404, 408, 457, 501, and 505 of this title] shall apply to years beginning after  December 31, 2001 . \n \n “(2)   Defined benefit plans .— The amendments made by subsection (a) [amending this section] shall apply to years ending after  December 31, 2001 .”\n“(3)  Special rule .—In the case of plan that, on  June 7, 2001 , incorporated by reference the limitation of section 415(b)(1)(A) of the Internal Revenue Code of 1986, section 411(d)(6) of such Code and section 204(g)(1) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1054(g)(1) ] do not apply to a plan amendment that—\n“(A) is adopted on or before  June 30, 2002 ,\n“(B) reduces benefits to the level that would have applied without regard to the amendments made by subsection (a) of this section, and\n“(C) is effective no earlier than the years described in paragraph (2).”\nAmendment by section 632(a)(1), (3)(C)–(F) of  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 632(a)(4) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nPub. L. 107–16, title VI, §\u202f632(b)(2) ,  June 7, 2001 ,  115 Stat. 115 , provided that: \n “(A)   In general .— The amendment made by paragraph (1) [amending this section] shall apply to limitation years beginning after  December 31, 1999 . \n \n “(B)   Exclusion allowance .— Effective for limitation years beginning in 2000, in the case of any annuity contract described in section 403(b) of the Internal Revenue Code of 1986, the amount of the contribution disqualified by reason of section 415(g) of such Code shall reduce the exclusion allowance as provided in section 403(b)(2) of such Code.”\nAmendment by section 641(e)(9), (10) of  Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nPub. L. 107–16, title VI, §\u202f654(c) ,  June 7, 2001 ,  115 Stat. 131 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 2001 .”\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 1(a)(7) [title III, §\u202f314(g)] of  Pub. L. 106–554 , set out as a note under  section 56 of this title .\nPub. L. 105–34, title XV, §\u202f1526(c) ,  Aug. 5, 1997 ,  111 Stat. 1073 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to permissive service credit contributions made in years beginning after  December 31, 1997 . \n \n “(2)   Transition rule.— “(A)   In general .— In the case of an eligible participant in a governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of 1986), the limitations of section 415(c)(1) of such Code shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of the plan as in effect on the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(B)   Eligible participant .— For purposes of subparagraph (A), an eligible participant is an individual who first became a participant in the plan before the first plan year beginning after the last day of the calendar year in which the next regular session (following the date of the enactment of this Act) of the governing body with authority to amend the plan ends.”\nPub. L. 105–34, title XV, §\u202f1527(b) ,  Aug. 5, 1997 ,  111 Stat. 1074 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 1996 .”\nAmendment by section 1530(c)(3), (4) of  Pub. L. 105–34  applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after  Aug. 5, 1997 , see  section 1530(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by  section 1434(a) of Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1997 , see  section 1434(c) of Pub. L. 104–188 , set out as a note under  section 414 of this title .\nPub. L. 104–188, title I, §\u202f1444(e) ,  Aug. 20, 1996 ,  110 Stat. 1811 , provided that: \n “(1)   In general .— The amendments made by subsections (a), (b), and (c) [amending this section and  section 457 of this title ] shall apply to years beginning after  December 31, 1994 . The amendments made by subsection (d) [amending this section] shall apply with respect to revocations adopted after the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Treatment for years beginning before  january 1, 1995 .— Nothing in the amendments made by this section shall be construed to imply that a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986) fails to satisfy the requirements of section 415 of such Code for any taxable year beginning before  January 1, 1995 .”\nPub. L. 104–188, title I, §\u202f1446(b) ,  Aug. 20, 1996 ,  110 Stat. 1811 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1449(c) ,  Aug. 20, 1996 ,  110 Stat. 1814 , provided that:  “The amendments made by this section [amending this section and provisions set out as a note under  section 411 of this title ] shall take effect as if included in the provisions of section 767 of the Uruguay Round Agreements Act [ Pub. L. 103–465 ].”\nPub. L. 104–188, title I, §\u202f1452(d) ,  Aug. 20, 1996 ,  110 Stat. 1816 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 416 and 4980A of this title] shall apply to limitation years beginning after  December 31, 1999 . \n \n “(2)   Excess distributions .— The amendment made by subsection (b) [amending  section 4980A of this title ] shall apply to years beginning after  December 31, 1996 .”\nAmendment by  section 732(b) of Pub. L. 103–465  applicable to years beginning after  Dec. 31, 1994 , and, to the extent of providing for the rounding of indexed amounts, not applicable to any year to the extent the rounding would require the indexed amount to be reduced below the amount in effect for years beginning in 1994, see  section 732(e) of Pub. L. 103–465 , set out as a note under  section 401 of this title .\nAmendment by  section 767(b) of Pub. L. 103–465  applicable to plan years and limitation years beginning after  Dec. 31, 1994 , except that employer may elect to treat such amendment as effective on or after  Dec. 8, 1994 , with provisions relating to reduction of accrued benefits, exception, and timing of plan amendment, see  section 767(d) of Pub. L. 103–465 , as amended, set out as a note under  section 411 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nPub. L. 101–239, title VII, §\u202f7304(c)(2) ,  Dec. 19, 1989 ,  103 Stat. 2354 , provided that:  “The amendment made by this subsection [amending this section] shall apply to years beginning after  July 12, 1989 .”\nAmendment by sections 1011(d)(2), (3), (6), (7) and 1018(t)(3)(B), (8)(D) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6054(b) ,  Nov. 10, 1988 ,  102 Stat. 3697 , as amended by  Pub. L. 101–239, title VII, §\u202f7816(h) ,  Dec. 19, 1989 ,  103 Stat. 2421 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendment made by this section [amending this section] shall apply to years beginning after  December 31, 1982 . \n \n “(2)   Election .— Section 415(b)(10)(C) of the 1986 Code (as added by subsection (a)) shall not apply to any year beginning before  January 1, 1990 .”\nPub. L. 100–647, title VI, §\u202f6059(b) ,  Nov. 10, 1988 ,  102 Stat. 3699 , provided that:  “The amendment made by this section [amending this section] shall apply as if included in the amendments made by section 1106(b)(2) of the Reform Act [ Pub. L. 99–514 ].”\nPub. L. 99–514, title XI, §\u202f1106(i) ,  Oct. 22, 1986 ,  100 Stat. 2425 , as amended by  Pub. L. 100–647, title I, §\u202f1011(d)(5) , title VI, §\u202f6062(a),  Nov. 10, 1988 ,  102 Stat. 3460 , 3700, provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 401, 402, 404, 416, and 818 of this title] shall apply to years beginning after  December 31, 1986 . \n \n “(2)   Collective bargaining agreements .— In the case of a plan in effect before  March 1, 1986 , pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers, the amendments made by this section (other than subsection (d)) shall not apply to contributions or benefits pursuant to such agreement in years beginning before  October 1, 1991 . \n \n “(3)   Right to higher accrued defined benefit preserved.— “(A)   In general .— In the case of an individual who is a participant (as of the 1st day of the 1st year to which the amendments made by this section apply) in a defined benefit plan which is in existence on  May 6, 1986 , and with respect to which the requirements of section 415 of the Internal Revenue Code of 1986 have been met for all plan years, if such individual’s current accrued benefit under the plan exceeds the limitation of subsection (b) of section 415 of such Code (as amended by this section), then (in the case of such plan), for purposes of subsections (b) and (e) of such section, the limitation of such subsection (b)(1)(A) with respect to such individual shall be equal to such current accrued benefit. \n \n “(B)   Current accrued benefit defined.— “(i)   In general .— For purposes of this paragraph, the term ‘current accrued benefit’ means the individual’s accrued benefit (at the close of the last year to which the amendments made by this section do not apply) when expressed as an annual benefit (within the meaning of section 415(b)(2) of such Code). \n \n “(ii)   Special rule .— For purposes of determining the amount of any individual’s current accrued benefit— “(I)  no change in the terms and conditions of the plan after  May 5, 1986 , and \n \n “(II)  no cost-of-living adjustment occurring after  May 5, 1986 , \n \n\n \u2001\u2001shall be taken into account. For purposes of subclause (I), any change in the terms and conditions of the plan pursuant to a collective bargaining agreement ratified before  May 6, 1986 , shall be treated as a change made before  May 6, 1986 . \n \n \n \n “(4)   Transition rule where the sum of defined contribution and defined benefit plan fractions exceeds 1.0 .— In the case of a plan which satisfied the requirements of section 415 of the Internal Revenue Code of 1986 for its last year beginning before  January 1, 1987 , the Secretary of the Treasury or his delegate shall prescribe regulations under which an amount is subtracted from the numerator of the defined contribution plan fraction (not exceeding such numerator) so that the sum of the defined benefit plan fraction and the defined contribution plan fraction computed under section 415(e)(1) of such Code does not exceed 1.0 for such year (determined as if the amendments made by this section were in effect for such year). \n \n “(5)   Effective date for subsection  (d).— “(A)   In general .— Except as provided in subparagraph (B), the amendment made by subsection (d) [amending sections 401, 404, 416, and 818 of this title] shall apply to benefits accruing in years beginning after  December 31, 1988 . \n \n “(B)   Collective bargaining agreements .— In the case of a plan described in paragraph (2), the amendments made by subsection (d) shall apply to benefits accruing in years beginning on or after the earlier of— “(i)  the later of— “(I)  the date determined under paragraph (2)(A), or \n \n “(II)   January 1, 1989 , or \n \n \n “(ii)   January 1, 1991 . \n \n \n \n “(6)   Special rule for amendment made by subsection  (e).— The amendment made by subsection (e) [amending this section] shall not require the recomputation, for purposes of section 415(e) of the Internal Revenue Code of 1986, of the annual addition for any year beginning before 1987.”\n[ Pub. L. 100–647, title VI, §\u202f6062(b) ,  Nov. 10, 1988 ,  102 Stat. 3700 , provided that:  “The amendment made by this section [amending  section 1106(i) of Pub. L. 99–514 , set out above] shall take effect as if included in the provisions of section 1106 of the Reform Act [ Pub. L. 99–514 ].” \n]\nAmendment by  section 1108(g)(5) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1108(h) of Pub. L. 99–514 , set out as a note under  section 219 of this title .\nAmendment by  section 1114(b)(12) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1988 , see  section 1114(c)(3) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nPub. L. 99–514, title XI, §\u202f1174(d)(3) ,  Oct. 22, 1986 ,  100 Stat. 2518 , provided that:  “The amendments made by this subsection [amending this section] shall apply to years beginning after  December 31, 1986 .”\nAmendment by sections 1847(b)(4), 1852(h)(2), (3), and 1875(c)(9), (11) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 1898(b)(15)(C) of Pub. L. 99–514  effective as if included in the provision of the Retirement Equity Act of 1984,  Pub. L. 98–397 , to which such amendment relates, except as otherwise provided, see  section 1898(j) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 15 of Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nAmendment by section 491(d)(28)–(32) of  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  section 491(e)(6) of Pub. L. 98–369  effective  Jan. 1, 1984 , see  section 491(f)(3) of Pub. L. 98–369 , set out as a note under  section 401 of this title .\nAmendment by  section 528(a) of Pub. L. 98–369  applicable to years beginning after  Mar. 31, 1984 , see  section 528(c) of Pub. L. 98–369 , set out as a note under  section 401 of this title .\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under  section 105(d)(6) of this title  as in effect on the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21 , set out as a note under  section 22 of this title .\nPub. L. 97–248, title II, §\u202f235(g) ,  Sept. 3, 1982 ,  96 Stat. 508 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(10) ,  Jan. 12, 1983 ,  96 Stat. 2404 ;  Pub. L. 98–369, div. A, title VII, §\u202f713(a)(2) , (4), (f)(3),  July 18, 1984 ,  98 Stat. 956 , 959;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— “(A)   New plans .— In the case of any plan which is not in existence on  July 1, 1982 , the amendments made by this section [amending this section and  section 404 of this title ] shall apply to years ending after  July 1, 1982 . \n \n “(B)   Existing plans.— “(i)  In the case of any plan which is in existence on  July 1, 1982 , the amendments made by this section [amending this section and  section 404 of this title ] shall apply to years beginning after  December 31, 1982 . \n \n “(ii)   Plan requirements .— A plan shall not be treated as failing to meet the requirements of section 401(a)(16) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for any year beginning before  January 1, 1984 , merely because such plan provides for benefit or contribution limits which are in excess of the limitations under section 415 of such Code, as amended by this section. The preceding sentence shall not apply to any plan which provides such limits in excess of the limitation under section 415 of such Code before such amendments. \n \n \n \n “(2)   Amendments related to cost-of-living adjustments.— “(A)   In general .— Except as provided in subparagraph (B), the amendments made by subsection (b) [amending this section] shall apply to adjustments for years beginning after  December 31, 1982 . \n \n “(B)   Adjustment procedures .— The amendments made by subsections (b)(1) and (b)(2)(B) [amending this section] shall apply to adjustments for years beginning after  December 31, 1985 . \n \n \n “(3)   Transition rule where the sum of defined contribution and defined benefit plan fractions exceeds 1.0 .— In the case of a plan which satisfied the requirements of section 415 of the Internal Revenue Code of 1986 for the last year beginning before  January 1, 1983 , the Secretary of the Treasury or his delegate shall prescribe regulations under which an amount is subtracted from the numerator of the defined contribution plan fraction (not exceeding such numerator) so that the sum of the defined benefit plan fraction and the defined contribution plan fraction computed under section 415(e)(1) of the Internal Revenue Code of 1986 (as amended by the Tax Equity and Fiscal Responsibility Act of 1982) does not exceed 1.0 for such year. A similar rule shall apply with respect to the last plan year beginning before  January 1, 1984 , for purposes of applying section 416(h) of the Internal Revenue Code of 1986. \n \n “(4)   Right to higher accrued defined benefit preserved.— “(A)   In general .— In the case of an individual who is a participant before  January 1, 1983 , in a defined benefit plan which is in existence on  July 1, 1982 , and with respect to which the requirements of section 415 of such Code have been met for all years, if such individual’s current accrued benefit under such plan exceeds the limitation of subsection (b) of section 415 of the Internal Revenue Code of 1986 (as amended by this section), then (in the case of such plan) for purposes of subsections (b) and (e) of such section, the limitation of such subsection (b) with respect to such individual shall be equal to such current accrued benefit. \n \n “(B)   Current accrued benefit defined.— “(i)   In general .— For purposes of this paragraph, the term ‘current accrued benefit’ means the individual’s accrued benefit (at the close of the last year beginning before  January 1, 1983 ) when expressed as an annual benefit (within the meaning of section 415(b)(2) of such Code as in effect before the amendments made by this Act). In the case of any plan described in the first sentence of paragraph (5), the preceding sentence shall be applied by substituting for ‘ January 1, 1983 ’ the applicable date determined under paragraph (5). \n \n “(ii)   Special rule .— For purposes of determining the amount of any individual’s current accrued benefit— “(I)  no change in the terms and conditions of the plan after  July 1, 1982 , and \n \n “(II)  no cost-of-living adjustment occurring after  July 1, 1982 , \n \n\n \u2001\u2001shall be taken into account. For purposes of subclause (I), any change in the terms and conditions of the plan pursuant to a collective bargaining agreement entered into before  July 1, 1982 , and ratified before  September 3, 1982 , shall be treated as a change made before  July 1, 1982 . \n \n \n \n “(5)   Special rule for collective bargaining agreements .— In the case of a plan maintained on the date of the enactment of this Act [ Sept. 3, 1982 ] pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers, the amendments made by this section [amending this section and  section 404 of this title ] and section 242 [amending  section 401 of this title  and enacting a provision set out as a note under  section 401 of this title ] (relating to age 70½) shall not apply to years beginning before the earlier of— “(A)  the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act [ Sept. 3, 1982 ]), or \n \n “(B)   January 1, 1986 . \n \n\n For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section and section 242 shall not be treated as a termination of such collective bargaining agreement.”\nAmendment by  section 238(d)(5) of Pub. L. 97–248  applicable to years beginning after  Dec. 31, 1983 , see  section 241 of Pub. L. 97–248 , set out as an Effective Date note under  section 416 of this title .\nAmendment by section 251(c)(1), (2) of  Pub. L. 97–248  applicable to years beginning after  Dec. 31, 1981 , see  section 251(e)(3) of Pub. L. 97–248 , set out as a note under  section 403 of this title .\nAmendment by  section 253(a) of Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 253(c) of Pub. L. 97–248 , set out as a note under  section 404 of this title .\nAmendment by section 311(g)(4), (h)(3) of  Pub. L. 97–34  applicable to years beginning after  Dec. 31, 1981 , see  section 311(i)(4) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nPub. L. 97–34, title III, §\u202f333(b)(2) ,  Aug. 13, 1981 ,  95 Stat. 297 , provided that:  “The amendment made by this subsection [amending this section] shall apply to years beginning after  December 31, 1981 .”\nPub. L. 96–605, title II, §\u202f222(b) ,  Dec. 28, 1980 ,  94 Stat. 3528 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to years beginning after  December 31, 1980 .”\nPub. L. 96–222, title I, §\u202f101(b)(1)(G) ,  Apr. 1, 1980 ,  94 Stat. 205 , provided that:  “The amendment made by subparagraph (I) of subsection (a)(10) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Apr. 1, 1980 ].”\nAmendment by section 101(a)(7)(L)(i)(VII), (iv)(i), (10)(J)(iii), (11) of  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 141(f)(7) of Pub. L. 95–600  effective for years beginning after  Dec. 31, 1978 , and with respect to qualified investment for taxable years beginning after  Dec. 31, 1978 , see  section 141(g)(1) of Pub. L. 95–600 , set out as an Effective Date note under  section 409 of this title .\nPub. L. 95–600, title I, §\u202f141(g)(5) , as added by  Pub. L. 96–222, title I, §\u202f101(a)(7)(B) ,  Apr. 1, 1980 ,  94 Stat. 197 , provided that:  “The amendment made by subsection (f)(7) [amending this section] shall apply to years beginning after  December 31, 1978 .”\nAmendment by  section 152(g) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 152(h) of Pub. L. 95–600 , set out as a note under  section 408 of this title .\nPub. L. 95–600, title I, §\u202f153(b) ,  Nov. 6, 1978 ,  92 Stat. 2801 , provided that:  “The amendment made by this section [amending this section] shall apply to years beginning after  December 31, 1978 .”\nAmendment by section 803(b)(4), (f) of  Pub. L. 94–455  effective for years beginning after  Dec. 31, 1975 , see  section 803(j) of Pub. L. 94–455 , set out as a note under  section 46 of this title .\nAmendment by  section 1501(b)(3) of Pub. L. 94–455  effective for years beginning after  Dec. 31, 1976 , see  section 1501(d) of Pub. L. 94–455 , set out as a note under  section 62 of this title .\nPub. L. 94–455, title XV, §\u202f1502(b) ,  Oct. 4, 1976 ,  90 Stat. 1738 , provided that:  “The amendment made by subsection (a)(1) [amending this section] shall apply to years beginning after  December 31, 1975 . The amendment made by subsection (a)(2) [amending  section 404 of this title ] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 94–455, title XV, §\u202f1511(b) ,  Oct. 4, 1976 ,  90 Stat. 1742 , provided that:  “The amendment made by this section [amending this section] shall apply for years beginning after  December 31, 1975 .”\nAmendment by section 1901(a)(65), (b)(8)(D) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 93–406, title II, §\u202f2004(d) ,  Sept. 2, 1974 ,  88 Stat. 987 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule .— The amendments made by this section [enacting this section, amending sections 401, 403, 404, 405, and 805 of this title, and enacting provisions set out as notes under this section] shall apply to years beginning after  December 31, 1975 . The Secretary of the Treasury shall prescribe such regulations as may be necessary to carry out the provisions of this paragraph. \n \n “(2)   Transition rule for defined benefit plans .— In the case of an individual who was an active participant in a defined benefit plan before  October 3, 1973 , if— “(A)  the annual benefit (within the meaning of section 415(b)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) payable to such participant on retirement does not exceed 100 percent of his annual rate of compensation on the earlier of (i)  October 2, 1973 , or (ii) the date on which he separated from the service of the employer, \n \n “(B)  such annual benefit is no greater than the annual benefit which would have been payable to such participant on retirement if (i) all the terms and conditions of such plan in existence on such date had remained in existence until such retirement, and (ii) his compensation taken into account for any period after  October 2, 1973 , had not exceeded his annual rate of compensation on such date, and \n \n “(C)  in the case of a participant who separated from the service of the employer prior to  October 2, 1973 , such annual benefit is no greater than his vested accrued benefit as of the date he separated from the service, \n \n\n then such annual benefit shall be treated as not exceeding the limitation of subsection (b) of section 415 of the Internal Revenue Code of 1986.”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 99–514, title XI, §\u202f1106(h) ,  Oct. 22, 1986 ,  100 Stat. 2425 , provided that:  “Notwithstanding any other provision of law, except as provided in regulations prescribed by the Secretary of the Treasury or his delegate, a plan may incorporate by reference the limitations under section 415 of the Internal Revenue Code of 1986.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 93–406, title II, §\u202f2004(a)(3) ,  Sept. 2, 1974 ,  88 Stat. 985 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In any case in which, on the date of enactment of this Act [ Sept. 2, 1974 ], an individual is a participant in both a defined benefit plan and a defined contribution plan maintained by the same employer, and the sum of the defined benefit plan fraction and the defined contribution plan fraction for the year during which such date occurs exceeds 1.4, the sum of such fractions may continue to exceed 1.4 if— “(A)  the defined benefit plan fraction is not increased, by amendment of the plan or otherwise, after \n \n “(B)  no contributions are made under the defined contribution plan after such date. \n \n\n A trust which is part of a pension, profit-sharing, or stock bonus plan described in the preceding sentence shall not be treated as not constituting a qualified trust under section 401(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] on account of the provisions of section 415(e) of such Code, as long as it is described in the preceding sentence of this subsection.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'A plan satisfies the requirements of this subparagraph if an employee who has completed at least 3 years of service with the employer or employers maintaining the plan has a nonforfeitable right to 100 percent of his accrued benefit derived from employer contributions.\nA plan satisfies the requirements of this subparagraph if an employee has a nonforfeitable right to a percentage of his accrued benefit derived from employer contributions determined under the following table: \n \n \n \n \n \n \n \u2001Years of service The nonforfeitable percentage is: \n \n \n 2 20 \n 3 40 \n 4 60 \n 5 80 \n 6 or more 100\nExcept to the extent inconsistent with the provisions of this subsection, the rules of section 411 shall apply for purposes of this subsection.\nA defined benefit plan meets the requirements of this subsection if the accrued benefit derived from employer contributions of each participant who is a non-key employee, when expressed as an annual retirement benefit, is not less than the applicable percentage of the participant’s average compensation for years in the testing period.\nExcept as provided in clause (ii) or (iii), years of service shall be determined under the rules of paragraphs (4), (5), and (6) of section 411(a).\nFor purposes of determining an employee’s years of service with the employer, any service with the employer shall be disregarded to the extent that such service occurs during a plan year when the plan benefits (within the meaning of section 410(b)) no key employee or former key employee.\nA participant’s testing period shall be the period of consecutive years (not exceeding 5) during which the participant had the greatest aggregate compensation from the employer.\nThe years taken into account under clause (i) shall be properly adjusted for years not included in a year of service.\nFor purposes of this paragraph, the term “annual retirement benefit” means a benefit payable annually in the form of a single life annuity (with no ancillary benefits) beginning at the normal retirement age under the plan.\nA defined contribution plan meets the requirements of the subsection if the employer contribution for the year for each participant who is a non-key employee is not less than 3 percent of such participant’s compensation (within the meaning of section 415). Employer matching contributions (as defined in section 401(m)(4)(A)) shall be taken into account for purposes of this subparagraph (and any reduction under this sentence shall not be taken into account in determining whether section 401(k)(4)(A) applies).\nThe percentage referred to in subparagraph (A) for any year shall not exceed the percentage at which contributions are made (or required to be made) under the plan for the year for the key employee for whom such percentage is the highest for the year.\nAny employees not meeting the age or service requirements of section 410(a)(1) (without regard to subparagraph (B) thereof) may be excluded from consideration in determining whether any plan of the employer meets the requirements of subparagraphs (A) and (B).\nA top-heavy plan shall not be treated as meeting the requirement of subsection (b) or (c) unless such plan meets such requirement without taking into account contributions or benefits under chapter 2 (relating to tax on self-employment income), chapter 21 (relating to Federal Insurance Contributions Act), title II of the Social Security Act, or any other Federal or State law.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section where the employer has 2 or more plans including (but not limited to) regulations to prevent inappropriate omissions or required duplication of minimum benefits or contributions.\nEach plan of an employer required to be included in an aggregation group shall be treated as a top-heavy plan if such group is a top-heavy group.\nThe employer may treat any plan not required to be included in an aggregation group under clause (i) as being part of such group if such group would continue to meet the requirements of sections 401(a)(4) and 410 with such plan being taken into account.\nIn the case of any distribution made for a reason other than severance from employment, death, or disability, subparagraph (A) shall be applied by substituting “5-year period” for “1-year period”.\nExcept to the extent provided in regulations, any rollover contribution (or similar transfer) initiated by the employee and made after  December 31, 1983 , to a plan shall not be taken into account with respect to the transferee plan for purposes of determining whether such plan is a top-heavy plan (or whether any aggregation group which includes such plan is a top-heavy group).\nIf any individual is a non-key employee with respect to any plan for any plan year, but such individual was a key employee with respect to such plan for any prior plan year, any accrued benefit for such employee (and the account of such employee) shall not be taken into account.\nTo the extent provided in regulations, this section shall be applied on the basis of any year specified in such regulations in lieu of plan years.\nIf any individual has not performed services for the employer maintaining the plan at any time during the 1-year period ending on the determination date, any accrued benefit for such individual (and the account of such individual) shall not be taken into account.\nThe term “top-heavy plan” shall not include a simple retirement account under section 408(p).\nFor purposes of this paragraph, the term “1-percent owner” means any person who would be described in clause (i) if “1 percent” were substituted for “5 percent” each place it appears in clause (i).\nThe rules of subsections (b), (c), and (m) of section 414 shall not apply for purposes of determining ownership in the employer.\nFor purposes of this paragraph, the term “compensation” has the meaning given such term by section 414(q)(4).\nThe term “non-key employee” means any employee who is not a key employee.\nThe requirements of subsections (b), (c), and (d) shall not apply with respect to any employee included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and 1 or more employers if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.\nThe terms “employee” and “key employee” include their beneficiaries.\nA simplified employee pension shall be treated as a defined contribution plan.\nIn the case of a simplified employee pension, at the election of the employer, paragraphs (1)(A)(ii) and (2)(B) of subsection (g) shall be applied by taking into account aggregate employer contributions in lieu of the aggregate of the accounts of employees.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nThe Federal Insurance Contributions Act, referred to in subsec. (e), is  act Aug. 16, 1954, ch. 736 , §§\u202f3101, 3102, 3111, 3112, 3121 to 3128,  68A Stat. 415 , which is classified generally to chapter 21 (§\u202f3101 et seq.) of this title. For complete classification of this Act to the Code, see  section 3128 of this title  and Tables.\nThe Social Security Act, referred to in subsec. (e), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Social Security Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2022—Subsec. (c)(2)(C).  Pub. L. 117–328, §\u202f310(a) , added subpar. (C).\nSubsec. (g)(4)(H).  Pub. L. 117–328, §\u202f125(e) , inserted “Such term shall not include a plan solely because such plan does not provide nonelective or matching contributions to employees described in section 401(k)(15)(B)(i).” before “If, but” in concluding provisions.\nPub. L. 117–328, §\u202f121(c) , substituted “arrangements or plans” for “arrangements” in heading and “and matching contributions with respect to which the requirements of paragraph (11), (12), or (13) of section 401(m) are met, or” for “,\u2000and” in cl. (i), added cl. (ii), and struck out former cl. (ii) which read as follows: “matching contributions with respect to which the requirements of section 401(m)(11) or 401(m)(12) are met.”\n2006—Subsec. (g)(4)(H)(i).  Pub. L. 109–280, §\u202f902(c)(1) , inserted “or 401(k)(13)” after “401(k)(12)”.\nSubsec. (g)(4)(H)(ii).  Pub. L. 109–280, §\u202f902(c)(2) , inserted “or 401(m)(12)” after “401(m)(11)”.\n2004—Subsec. (i)(1)(A).  Pub. L. 108–311  substituted “In the case of plan years” for “in the case of plan years” in concluding provisions.\n2002—Subsec. (c)(1)(C)(iii).  Pub. L. 107–147, §\u202f411(k)(1) , substituted “Exception for plan under which no key employee (or former key employee) benefits for plan year” for “Exception for frozen plan” in heading.\nSubsec. (g)(3)(B).  Pub. L. 107–147, §\u202f411(k)(2) , substituted “severance from employment” for “separation from service”.\n2001—Subsec. (c)(1)(C)(i).  Pub. L. 107–16, §\u202f613(e)(A) , substituted “clause (ii) or (iii)” for “clause (ii)”.\nSubsec. (c)(1)(C)(iii).  Pub. L. 107–16, §\u202f613(e)(B) , added cl. (iii).\nSubsec. (c)(2)(A).  Pub. L. 107–16, §\u202f613(b) , inserted at end “Employer matching contributions (as defined in section 401(m)(4)(A)) shall be taken into account for purposes of this subparagraph (and any reduction under this sentence shall not be taken into account in determining whether section 401(k)(4)(A) applies).”\nSubsec. (g)(3).  Pub. L. 107–16, §\u202f613(c)(1) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “For purposes of determining—\n“(A) the present value of the cumulative accrued benefit for any employee, or\n“(B) the amount of the account of any employee,\nsuch present value or amount shall be increased by the aggregate distributions made with respect to such employee under the plan during the 5-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which if it had not been terminated would have been required to be included in an aggregation group.”\nSubsec. (g)(4)(E).  Pub. L. 107–16, §\u202f613(c)(2) , in heading substituted “last year before determination date” for “last 5 years” and in text substituted “1-year period” for “5-year period”.\nSubsec. (g)(4)(H).  Pub. L. 107–16, §\u202f613(d) , added subpar. (H).\nSubsec. (i)(1)(A).  Pub. L. 107–16, §\u202f613(a)(1)(D) , in concluding provisions, substituted “in the case of plan years beginning after  December 31, 2002 , the $130,000 amount in clause (i) shall be adjusted at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning  July 1, 2001 , and any increase under this sentence which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000.” for “For purposes of clause (ii), if 2 employees have the same interest in the employer, the employee having greater annual compensation from the employer shall be treated as having a larger interest.”\nPub. L. 107–16, §\u202f613(a)(1)(A) , struck out “or any of the 4 preceding plan years” after “plan year” in introductory provisions.\nSubsec. (i)(1)(A)(i).  Pub. L. 107–16 , §\u202f\u202f613(a)(1)(B), added cl. (i) and struck out former cl. (i) which read as follows: “an officer of the employer having an annual compensation greater than 50 percent of the amount in effect under section 415(b)(1)(A) for any such plan year,”.\nSubsec. (i)(1)(A)(ii)–(iv).  Pub. L. 107–16, §\u202f613(a)(1)(C) , redesignated cls. (iii) and (iv) as (ii) and (iii), respectively, and struck out former cl. (ii) which read as follows: “1 of the 10 employees having annual compensation from the employer of more than the limitation in effect under section 415(c)(1)(A) and owning (or considered as owning within the meaning of section 318) the largest interests in the employer,”.\nSubsec. (i)(1)(B)(iii).  Pub. L. 107–16, §\u202f613(a)(2) , struck out “and subparagraph (A)(ii)” after “this subparagraph” in introductory provisions.\n1996—Subsec. (g)(4)(G).  Pub. L. 104–188, §\u202f1421(b)(7) , added subpar. (G).\nSubsec. (h).  Pub. L. 104–188, §\u202f1452(c)(7) , struck out subsec. (h) which related to adjustments in section 415 limits for top-heavy plans.\nSubsec. (i)(1)(A).  Pub. L. 104–188, §\u202f1431(c)(1)(C) , substituted “section 414(q)(5)” for “section 414(q)(8)” in closing provisions.\nSubsec. (i)(1)(D).  Pub. L. 104–188, §\u202f1431(c)(1)(B) , substituted “section 414(q)(4)” for “section 414(q)(7)”.\n1988—Subsec. (i)(1)(A).  Pub. L. 100–647, §\u202f1011(i)(4)(B) , inserted at end “For purposes of determining the number of officers taken into account under clause (i), employees described in section 414(q)(8) shall be excluded.”\nSubsec. (i)(1)(A)(i).  Pub. L. 100–647, §\u202f1011(d)(8) , substituted “50” for “150” and “415(b)(1)(A)” for “415(c)(1)(A)”.\nSubsec. (i)(1)(D).  Pub. L. 100–647, §\u202f1011(j)(3)(A) , added subpar. (D).\n1986—Subsec. (a)(3).  Pub. L. 99–514, §\u202f1106(d)(3)(A) , struck out par. (3) which read as follows: “the limitation on compensation requirement of subsection (d).”\nSubsec. (c)(2)(B)(ii), (iii).  Pub. L. 99–514, §\u202f1106(d)(3)(B)(ii) , redesignated cl. (iii) as (ii) and struck out former cl. (ii) which read as follows: “ Determination of percentage .—The determination referred to in clause (i) shall be determined for each key employee by dividing the contributions for such employee by so much of his total compensation for the year as does not exceed $200,000.”\nSubsec. (d).  Pub. L. 99–514, §\u202f1106(d)(3)(B)(i) , repealed subsec. (d) which provided for a $200,000 limitation on the amount of annual compensation of each employee taken into account.\nSubsec. (g)(4)(E).  Pub. L. 99–514, §\u202f1852(d)(2) , amended subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: “If any individual has not received any compensation from any employer maintaining the plan (other than benefits under the plan) at any time during the 5-year period ending on the determination date, any accrued benefit for such individual (and the account of such individual) shall not be taken into account.”\nSubsec. (g)(4)(F).  Pub. L. 99–514, §\u202f1118(a) , added subpar. (F).\nSubsec. (i)(1)(A).  Pub. L. 99–514, §\u202f1852(d)(1) , inserted at end “Such term shall not include any officer or employee of an entity referred to in section 414(d) (relating to governmental plans).”\n1984—Subsec. (c)(2)(C).  Pub. L. 98–369, §\u202f524(c)(1) , struck out subpar. (C) which provided that for purposes of this paragraph, any employer contribution attributable to a salary reduction or similar arrangement shall not be taken into account.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f713(f)(5)(A) , inserted “at the same time and”.\nSubsec. (f).  Pub. L. 98–369, §\u202f713(f)(6)(A) , substituted “required” for “require”.\nSubsec. (g)(3).  Pub. L. 98–369, §\u202f713(f)(4) , inserted at end “The preceding sentence shall also apply to distributions under a terminated plan which if it had not been terminated would have been required to be included in an aggregation group.”\nSubsec. (g)(4)(E).  Pub. L. 98–369, §\u202f524(b)(1) , added subpar. (E).\nSubsec. (i)(1)(A).  Pub. L. 98–369, §\u202f713(f)(1)(A) , (C), substituted in provisions preceding cl. (i) “an employee” for “any participant in an employer plan” and inserted at end thereof provision for treatment of an employee with the greater annual compensation as having a larger interest in the employer where, for purposes of cl. (ii), 2 employees have the same interest in the employer.\nSubsec. (i)(1)(A)(i).  Pub. L. 98–369, §\u202f524(a)(1) , inserted “having an annual compensation greater than 150 percent of the amount in effect under section 415(c)(1)(A) for any plan year”.\nSubsec. (i)(1)(A)(ii).  Pub. L. 98–369, §\u202f713(f)(1)(B) , required a key employee to have annual compensation from the employer of more than the limitation in effect under section 415(c)(1)(A).\nSubsec. (i)(1)(B)(iii).  Pub. L. 98–369, §\u202f713(f)(6)(B) , substituted subparagraph “(A)(ii)” for “(A)(ii)(II)”.\nSubsec. (i)(1)(C).  Pub. L. 98–369, §\u202f713(f)(1)(A) , substituted in heading “ownership in the employer” for “5-percent or 1-percent owners”.\nAmendment by  section 121(c) of Pub. L. 117–328  applicable to plan years beginning after  Dec. 31, 2023 , see  section 121(d) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by  section 125(e) of Pub. L. 117–328  effective as if included in the enactment of  section 112 of div. O of Pub. L. 116–94 , see  section 125(f)(2) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title III, §\u202f310(b) ,  Dec. 29, 2022 ,  136 Stat. 5347 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to plan years beginning after  December 31, 2023 .”\nAmendment by  Pub. L. 109–280  applicable to plan years beginning after  Dec. 31, 2007 , see  section 902(g) of Pub. L. 109–280 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nPub. L. 107–16, title VI, §\u202f613(f) ,  June 7, 2001 ,  115 Stat. 102 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning after  December 31, 2001 .”\nAmendment by  section 1421(b)(7) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nAmendment by section 1431(c)(1)(B), (C) of  Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1996 , except that in determining whether an employee is a highly compensated employee for years beginning in 1997, such amendment to be treated as having been in effect for years beginning in 1996, see  section 1431(d)(1) of Pub. L. 104–188 , set out as a note under  section 414 of this title .\nAmendment by  section 1452(c)(7) of Pub. L. 104–188  applicable to limitation years beginning after  Dec. 31, 1999 , see  section 1452(d) of Pub. L. 104–188 , set out as a note under  section 415 of this title .\nPub. L. 100–647, title I, §\u202f1011(j)(3)(B) ,  Nov. 10, 1988 ,  102 Stat. 3468 , provided that:  “The amendment made by this paragraph [amending this section] shall apply to years beginning after  December 31, 1988 .”\nAmendment by section 1011(d)(8), (i)(4)(B) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 1106(d)(3)(A), (B) of  Pub. L. 99–514  applicable to benefits accruing in years beginning after  Dec. 31, 1988 , except as otherwise provided, see  section 1106(i)(5) of Pub. L. 99–514 , set out as a note under  section 415 of this title .\nPub. L. 99–514, title XI, §\u202f1118(b) ,  Oct. 22, 1986 ,  100 Stat. 2463 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to plan years beginning after  December 31, 1986 .”\nAmendment by  section 1852(d) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title V, §\u202f524(a)(2) ,  July 18, 1984 ,  98 Stat. 872 , provided that:  “The amendment made by this subsection [amending this section] shall apply to plan years beginning after  December 31, 1983 .”\nPub. L. 98–369, div. A, title V, §\u202f524(b)(2) ,  July 18, 1984 ,  98 Stat. 872 , provided that:  “The amendment made by this subsection [amending this section] shall apply to plan years beginning after  December 31, 1984 .”\nPub. L. 98–369, div. A, title V, §\u202f524(c)(2) ,  July 18, 1984 ,  98 Stat. 872 , provided that:  “The amendment made by this subsection [amending this section] shall apply to plan years beginning after  December 31, 1984 .”\nAmendment by  section 713 of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f241 ,  Sept. 3, 1982 ,  96 Stat. 520 , provided that: \n “(a)   General Rule .— Except as provided in subsection (b), the amendments made by this part [part II (§§\u202f237–241) of subtitle C of title II of  Pub. L. 97–248 , enacting this section, amending sections 72, 401, 404, 408, 414, 415, and 1379 of this title, and repealing  section 4972 of this title ] shall apply to years beginning after  December 31, 1983 . \n \n “(b)   Allowance of Exclusion of Death Benefit for Self-Employed Individuals .— The amendment made by section 239 [amending  section 101 of this title ] shall apply with respect to decedents dying after  December 31, 1983 .”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Each plan shall provide to each participant, within the applicable period with respect to such participant (and consistent with such regulations as the Secretary may prescribe), a written explanation with respect to the qualified preretirement survivor annuity comparable to that required under subparagraph (A).\nThe requirements of this subsection shall not apply with respect to the qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit, as the case may be, if such benefit may not be waived (or another beneficiary selected) and if the plan fully subsidizes the costs of such benefit.\nFor purposes of subparagraph (A), a plan fully subsidizes the costs of a benefit if under the plan the failure to waive such benefit by a participant would not result in a decrease in any plan benefits with respect to such participant and would not result in increased contributions from such participant.\nA plan may provide the written explanation described in paragraph (3)(A) after the annuity starting date. In any case to which this subparagraph applies, the applicable election period under paragraph (6) shall not end before the 30th day after the date on which such explanation is provided.\nThe Secretary may by regulations limit the application of clause (i), except that such regulations may not limit the period of time by which the annuity starting date precedes the provision of the written explanation other than by providing that the annuity starting date may not be earlier than termination of employment.\nA plan may permit a participant to elect (with any applicable spousal consent) to waive any requirement that the written explanation be provided at least 30 days before the annuity starting date (or to waive the 30-day requirement under subparagraph (A)) if the distribution commences more than 7 days after such explanation is provided.\nIn the case of any defined contribution plan or participant described in clause (ii) or (iii) of section 401(a)(11)(B), the term “qualified preretirement survivor annuity” means an annuity for the life of the surviving spouse the actuarial equivalent of which is not less than 50 percent of the portion of the account balance of the participant (as of the date of death) to which the participant had a nonforfeitable right (within the meaning of section 411(a)).\nFor purposes of paragraphs (1) and (2), any security interest held by the plan by reason of a loan outstanding to the participant shall be taken into account in determining the amount of the qualified preretirement survivor annuity.\nA plan may provide that the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity will be immediately distributed if such value does not exceed the amount that can be distributed without the participant’s consent under section 411(a)(11). No distribution may be made under the preceding sentence after the annuity starting date unless the participant and the spouse of the participant (or where the participant has died, the surviving spouse) consents in writing to such distribution.\nFor purposes of paragraphs (1) and (2), the present value shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate.\nFor purposes of subparagraph (A), the term “applicable mortality table” means a mortality table, modified as appropriate by the Secretary, based on the mortality table specified for the plan year under subparagraph (A) of section 430(h)(3) (without regard to subparagraph (C) or (D) of such section).\nFor purposes of subparagraph (A), the term “applicable interest rate” means the adjusted first, second, and third segment rates applied under rules similar to the rules of section 430(h)(2)(C) (determined by not taking into account any adjustment under clause (iv) thereof) for the month before the date of the distribution or such other time as the Secretary may by regulations prescribe.\nFor purposes of subparagraph (C), the adjusted first, second, and third segment rates are the first, second, and third segment rates which would be determined under section 430(h)(2)(C) (determined by not taking into account any adjustment under clause (iv) thereof) if section 430(h)(2)(D) were applied by substituting the average yields for the month described in subparagraph (C) for the average yields for the 24-month period described in such section.\nThe term “vested participant” means any participant who has a nonforfeitable right (within the meaning of section 411(a)) to any portion of such participant’s accrued benefit.\nFor purposes of subparagraph (A), the first day of the first period for which a benefit is to be received by reason of disability shall be treated as the annuity starting date only if such benefit is not an auxiliary benefit.\nThe term “earliest retirement age” means the earliest date on which, under the plan, the participant could elect to receive retirement benefits.\nA plan may take into account in any equitable manner (as determined by the Secretary) any increased costs resulting from providing a qualified joint or survivor annuity or a qualified preretirement survivor annuity.\nIf the use of any participant’s accrued benefit (or any portion thereof) as security for a loan meets the requirements of subsection (a)(4), nothing in this section or section 411(a)(11) shall prevent any distribution required by reason of a failure to comply with the terms of such loan.\nNo consent of a spouse shall be effective for purposes of subsection (e)(1) or (e)(2) (as the case may be) unless requirements comparable to the requirements for spousal consent to an election under subsection (a)(1)(A) are met.\nIn prescribing regulations under this section and section 401(a)(11), the Secretary shall consult with the Secretary of Labor.\nFor purposes of subparagraph (A), the term “survivor annuity percentage” means the percentage which the survivor annuity under the plan’s qualified joint and survivor annuity bears to the annuity payable during the joint lives of the participant and the spouse.\n2014—Subsec. (e)(3)(D).  Pub. L. 113–295  substituted “if section 430(h)(2)(D)” for “if—\n“(i) section 430(h)(2)(D)”\nand “described in such section.” for “described in such section,” and struck out cls. (ii) and (iii) which applied  section 430(h)(2)(G)(i)(II) of this title  by substituting “section 417(e)(3)(A)(ii)(II)” for “section 412(b)(5)(B)(ii)(II)” and listed the applicable percentage under section 430(h)(2)(G) for plan years beginning in 2008 to 2011.\n2012—Subsec. (e)(3)(C), (D).  Pub. L. 112–141  substituted “section 430(h)(2)(C) (determined by not taking into account any adjustment under clause (iv) thereof)” for “section 430(h)(2)(C)”.\n2008—Subsec. (e)(3)(D)(i).  Pub. L. 110–458  substituted “subparagraph (C)” for “clause (ii)”.\n2006—Subsec. (a)(1)(A)(ii), (iii).  Pub. L. 109–280, §\u202f1004(a)(1) , added cl. (ii) and redesignated former cl. (ii) as (iii).\nSubsec. (a)(3)(A)(i).  Pub. L. 109–280, §\u202f1004(a)(3) , inserted “and of the qualified optional survivor annuity” before comma at end.\nSubsec. (a)(6)(A).  Pub. L. 109–280, §\u202f1102(a)(1)(A) , substituted “180-day” for “90-day”.\nSubsec. (e)(3).  Pub. L. 109–280, §\u202f302(b) , reenacted heading without change and amended text of par. (3) generally, substituting provisions relating to determination of present value by using the applicable mortality table and the applicable interest rate, provisions defining “applicable mortality table” and “applicable interest rate”, and provisions relating to determination of the adjusted first, second, and third segment rates, for provisions relating to determination of present value, provisions defining “applicable mortality table” and “applicable interest rate”, and provisions stating exception for a distribution from a plan that was adopted and in effect before the date of the enactment of the Retirement Protection Act of 1994.\nSubsec. (g).  Pub. L. 109–280, §\u202f1004(a)(2) , added subsec. (g).\n2002—Subsec. (e)(1).  Pub. L. 107–147, §\u202f411(r)(1)(A) , substituted “exceed the amount that can be distributed without the participant’s consent under section 411(a)(11)” for “exceed the dollar limit under section 411(a)(11)(A)”.\nSubsec. (e)(2)(A).  Pub. L. 107–147, §\u202f411(r)(1)(B) , substituted “exceeds the amount that can be distributed without the participant’s consent under section 411(a)(11)” for “exceeds the dollar limit under section 411(a)(11)(A)”.\n1997—Subsec. (e)(1), (2).  Pub. L. 105–34  substituted “dollar limit” for “$3,500” in headings of pars. (1) and (2) and “the dollar limit under section 411(a)(11)(A)” for “$3,500” in text of pars. (1) and (2)(A).\n1996—Subsec. (a)(7).  Pub. L. 104–188  added par. (7).\n1994—Subsec. (e)(3).  Pub. L. 103–465  amended par. (3) generally, substituting present provisions for provisions directing that present value be calculated by using a rate no greater than the applicable interest rate or 120 percent of such rate, depending upon amount of vested accrued benefit, and defining “applicable interest rate”.\n1989—Subsec. (a)(3)(B)(ii).  Pub. L. 101–239  added sentence at end and struck out former subcl. (V) which read as follows: “A reasonable period after separation from service in case of a participant who separates before attaining age 35.”\n1988—Subsec. (e)(3)(A).  Pub. L. 100–647  substituted “clause (ii)” for “subclause (II)” in last sentence.\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1898(b)(15)(A) , substituted “section 401(a)(11)” for “section 401(a)(ii)”.\nSubsec. (a)(1)(B).  Pub. L. 99–514, §\u202f1898(b)(4)(A)(i) , substituted “paragraphs (2), (3), and (4)” for “paragraphs (2) and (3)”.\nSubsec. (a)(2)(A).  Pub. L. 99–514, §\u202f1898(b)(6)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the spouse of the participant consents in writing to such election, and the spouse’s consent acknowledges the effect of such election and is witnessed by a plan representative or a notary public, or”.\nSubsec. (a)(3)(B).  Pub. L. 99–514, §\u202f1898(b)(5)(A) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Each plan shall provide to each participant, within the period beginning with the first day of the plan year in which the participant attains age 32 and ending with the close of the plan year preceding the plan year in which the participant attains age 35 (and consistent with such regulations as the Secretary may prescribe), a written explanation with respect to the qualified preretirement survivor annuity comparable to that required under subparagraph (A).”\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1898(b)(4)(A)(ii) , added par. (4). Former par. (4) redesignated (5).\nSubsec. (a)(5), (6).  Pub. L. 99–514, §\u202f1898(b)(4)(A)(ii) , (11)(A), redesignated former par. (4) as (5) and inserted in subpar. (A) “if such benefit may not be waived (or another beneficiary selected) and” before “if the plan”. Former par. (5) redesignated (6).\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f1898(b)(15)(B) , substituted “survivor annuity for the life of” for “survivor annuity or the life of”.\nPub. L. 99–514, §\u202f1898(b)(1)(A) , inserted “In the case of an individual who separated from service before the date of such individual’s death, subparagraph (A)(ii)(I) shall not apply.”\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f1898(b)(9)(A)(i) , substituted “the portion of the account balance of the participant (as of the date of death) to which the participant had a nonforfeitable right (within the meaning of section 411(a))” for “the account balance of the participant as of the date of death”.\nSubsec. (c)(3).  Pub. L. 99–514, §\u202f1898(b)(9)(A)(ii) , added par. (3).\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f1139(b) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For purposes of paragraphs (1) and (2), the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity shall be determined as of the date of the distribution and by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.”\nSubsec. (f)(1).  Pub. L. 99–514, §\u202f1898(b)(8)(A) , substituted “such participant’s accrued benefit” for “the accrued benefit derived from employer contributions”.\nSubsec. (f)(2).  Pub. L. 99–514, §\u202f1898(b)(12)(A) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘annuity starting date’ means the first day of the first period for which an amount is received as an annuity (whether by reason of retirement or disability).”\nSubsec. (f)(5).  Pub. L. 99–514, §\u202f1898(b)(4)(A)(iii) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (f)(6), (7).  Pub. L. 99–514, §\u202f1898(b)(10)(A) , added par. (6) and redesignated former par. (6) as (7).\nPub. L. 99–514, §\u202f1898(b)(4)(A)(iii) , redesignated former par. (5) as (6).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 112–141  applicable with respect to plan years beginning after  December 31, 2011 , except as otherwise provided, see  section 40211(c) of Pub. L. 112–141 , set out as a note under  section 404 of this title .\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 109–280, title III, §\u202f302(c) ,  Aug. 17, 2006 ,  120 Stat. 921 , provided that:  “The amendments made by this section [amending this section and  section 1055 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2007 .”\nPub. L. 109–280, title X, §\u202f1004(c) ,  Aug. 17, 2006 ,  120 Stat. 1055 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1055 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2007 . \n \n “(2)   Special rule for collectively bargained plans .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified on or before the date of the enactment of this Act [ Aug. 17, 2006 ], the amendments made by this section shall not apply to plan years beginning before the earlier of— “(A)  the later of— “(i)   January 1, 2008 , or \n \n “(ii)  the date on which the last collective bargaining agreement related to the plan terminates (determined without regard to any extension thereof after the date of enactment of this Act), or \n \n \n “(B)   January 1, 2009 .”\nPub. L. 109–280, title XI, §\u202f1102(a)(3) ,  Aug. 17, 2006 ,  120 Stat. 1056 , provided that:  “The amendments and modifications made or required by this subsection [amending this section and  section 1055 of Title 29 , Labor] shall apply to years beginning after  December 31, 2006 .”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  Pub. L. 105–34  applicable to plan years beginning after  Aug. 5, 1997 , see  section 1071(c) of Pub. L. 105–34 , set out as a note under  section 411 of this title .\nPub. L. 104–188, title I, §\u202f1451(c) ,  Aug. 20, 1996 ,  110 Stat. 1816 , provided that:  “The amendments made by this section [amending this section and  section 1055 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 1996 .”\nAmendment by  Pub. L. 103–465  applicable to plan years and limitation years beginning after  Dec. 31, 1994 , except that employer may elect to treat such amendment as effective on or after  Dec. 8, 1994 , with provisions relating to reduction of accrued benefits, exception, and timing of plan amendment, see  section 767(d) of Pub. L. 103–465 , as amended, set out as a note under  section 411 of this title .\nAmendment by  Pub. L. 101–239  effective as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 7863 of Pub. L. 101–239 , set out as a note under  section 106 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1139(b) of Pub. L. 99–514  applicable to distributions in plan years beginning after  Dec. 31, 1984 , except that such amendments shall not apply to any distributions in plan years beginning after  Dec. 31, 1984 , and before  Jan. 1, 1987 , if such distributions were made in accordance with the requirements of the regulations issued under the Retirement Equity Act of 1984,  Pub. L. 98–397 , with additional provisions relating to reductions in accrued benefits, see  section 1139(d) of Pub. L. 99–514 , set out as a note under  section 411 of this title .\nPub. L. 99–514, title XVIII, §\u202f1898(b)(4)(C) ,  Oct. 22, 1986 ,  100 Stat. 2946 , provided that: \n “(i)  The amendments made by this paragraph [amending this section and  section 1055 of Title 29 , Labor] shall apply with respect to loans made after  August 18, 1985 . \n \n “(ii)  In the case of any loan which was made on or before  August 18, 1985 , and which is secured by a portion of the participant’s accrued benefit, nothing in the amendments made by sections 103 and 203 of the Retirement Equity Act of 1984 [sections 103 and 203 of  Pub. L. 98–397 , enacting this section and amending  section 401 of this title  and  section 1055 of Title 29 ] shall prevent any distribution required by reason of a failure to comply with the terms of such loan. \n \n “(iii)  For purposes of this subparagraph, any loan which is revised, extended, renewed, or renegotiated after  August 18, 1985 , shall be treated as made after  August 18, 1985 .”\nPub. L. 99–514, title XVIII, §\u202f1898(b)(6)(C) ,  Oct. 22, 1986 ,  100 Stat. 2948 , provided that:  “The amendments made by this paragraph [amending this section and  section 1055 of Title 29 , Labor] shall apply to plan years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XVIII, §\u202f1898(b)(8)(C) , as added by  Pub. L. 101–239, title VII, §\u202f7862(d)(2) ,  Dec. 19, 1989 ,  103 Stat. 2434 , provided that:  “The amendments made by this paragraph [amending this section and  section 1055 of Title 29 , Labor] shall apply to distributions after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by section 1898(b)(1)(A), (5)(A), (9)(A), (10)(A), (11)(A), (12)(A), (15)(A), (B) of  Pub. L. 99–514  effective as if included in the provision of the Retirement Equity Act of 1984,  Pub. L. 98–397 , to which such amendment relates, except as otherwise provided, see  section 1898(j) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nSection applicable to plan years beginning after  Dec. 31, 1984 , except as otherwise provided, see sections 302 and 303 of  Pub. L. 98–397 , set out as an Effective Date of 1984 Amendment note under  section 1001 of Title 29 , Labor.\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Section 418, added  Pub. L. 96–364, title II, §\u202f202(a) ,  Sept. 26, 1980 ,  94 Stat. 1271 , related to reorganization status.\nSection 418A, added  Pub. L. 96–364, title II, §\u202f202(a) ,  Sept. 26, 1980 ,  94 Stat. 1274 , related to notice of reorganization and funding requirements.\nSection 418B, added  Pub. L. 96–364, title II, §\u202f202(a) ,  Sept. 26, 1980 ,  94 Stat. 1274 , related to minimum contribution requirement.\nSection 418C, added  Pub. L. 96–364, title II, §\u202f202(a) ,  Sept. 26, 1980 ,  94 Stat. 1278 , related to overburden credit against minimum contribution requirement.\nSection 418D, added  Pub. L. 96–364, title II, §\u202f202(a) ,  Sept. 26, 1980 ,  94 Stat. 1280 , related to adjustments in accrued benefits.\nPub. L. 113–235, div. O, title I, §\u202f108(c) ,  Dec. 16, 2014 ,  128 Stat. 2789 , provided that:  “The amendments made by this section [amending sections 418E and 431 of this title and sections 1084, 1301, and 1426 of Title 29, Labor, and repealing sections 418 to 418D of this title and sections 1421 to 1425 of Title 29] shall apply with respect to plan years beginning after  December 31, 2014 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'Notwithstanding section 411, in any case in which benefit payments under an insolvent multiemployer plan exceed the resource benefit level, any such payments of benefits which are not basic benefits shall be suspended, in accordance with this section, to the extent necessary to reduce the sum of such payments and the payments of such basic benefits to the greater of the resource benefit level or the level of basic benefits, unless an alternative procedure is prescribed by the Pension Benefit Guaranty Corporation under section 4022A(g)(5) of the Employee Retirement Income Security Act of 1974.\nA multiemployer plan is insolvent if the plan’s available resources are not sufficient to pay benefits under the plan when due for the plan year, or if the plan is determined to be insolvent under subsection (d).\nThe term “resource benefit level” means the level of monthly benefits determined under subsections (c)(1) and (3) and (d)(3) to be the highest level which can be paid out of the plan’s available resources.\nThe term “available resources” means the plan’s cash, marketable assets, contributions, withdrawal liability payments, and earnings, less reasonable administrative expenses and amounts owed for such plan year to the Pension Benefit Guaranty Corporation under section 4261(b)(2) of the Employee Retirement Income Security Act of 1974.\nThe term “insolvency year” means a plan year in which a plan is insolvent.\nThe plan sponsor of a plan in critical status, as described in section 432(b)(2), shall determine in writing the plan’s resource benefit level for each insolvency year, based on the plan sponsor’s reasonable projection of the plan’s available resources and the benefits payable under the plan.\nNotwithstanding paragraph (2), if a plan sponsor determines in writing a resource benefit level for a plan year which is below the level of basic benefits, the payment of all benefits other than basic benefits shall be suspended for that plan year.\nIf, by the end of an insolvency year, the plan sponsor determines in writing that the plan’s available resources in that insolvency year could have supported benefit payments above the resource benefit level for that insolvency year, the plan sponsor shall distribute the excess resources to the participants and beneficiaries who received benefit payments from the plan in that insolvency year, in accordance with regulations prescribed by the Secretary.\nFor purposes of this paragraph, the term “excess resources” means available resources above the amount necessary to support the resource benefit level, but no greater than the amount necessary to pay benefits for the plan year at the benefit levels under the plan.\nIf, by the end of an insolvency year, any benefit has not been paid at the resource benefit level, amounts up to the resource benefit level which were unpaid shall be distributed to the participants and beneficiaries, in accordance with regulations prescribed by the Secretary, to the extent possible taking into account the plan’s total available resources in that insolvency year.\nExcept as provided in paragraph (4) or (5), a plan is not required to make retroactive benefit payments with respect to that portion of a benefit which was suspended under this section.\nAs of the end of the first plan year in which a plan is in critical status, as described in section 432(b)(2), and at least every 3 plan years thereafter (unless the plan is no longer in critical status, as described in section 432(b)(2)), the plan sponsor shall compare the value of plan assets for that plan year with the total amount of benefit payments made under the plan for that plan year. Unless the plan sponsor determines that the value of plan assets exceeds 3 times the total amount of benefit payments, the plan sponsor shall determine whether the plan will be insolvent in any of the next 5 plan years. If the plan sponsor makes such a determination that the plan will be insolvent in any of the next 5 plan years, the plan sponsor shall make the comparison under this paragraph at least annually until the plan sponsor makes a determination that the plan will not be insolvent in any of the next 5 plan years.\nIf, at any time, the plan sponsor of a plan in critical status, as described in section 432(b)(2), reasonably determines, taking into account the plan’s recent and anticipated financial experience, that the plan’s available resources are not sufficient to pay benefits under the plan when due for the next plan year, the plan sponsor shall make such determination available to interested parties.\nThe plan sponsor of a plan in critical status, as described in section 432(b)(2), shall determine in writing for each insolvency year the resource benefit level and the level of basic benefits no later than 3 months before the insolvency year.\nNo later than 2 months before the first day of each insolvency year, the plan sponsor of a plan in critical status, as described in section 432(b)(2), shall notify the Secretary, the Pension Benefit Guaranty Corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries of the resource benefit level determined in writing for that insolvency year.\nIn any case in which the plan sponsor anticipates that the resource benefit level for an insolvency year may not exceed the level of basic benefits, the plan sponsor shall notify the Pension Benefit Guaranty Corporation.\nNotice required by this subsection shall be given in accordance with regulations prescribed by the Pension Benefit Guaranty Corporation, except that notice to the Secretary shall be given in accordance with regulations prescribed by the Secretary.\nThe Pension Benefit Guaranty Corporation may prescribe a time other than the time prescribed by this section for the making of a determination or the filing of a notice under this section.\nIf the plan sponsor of an insolvent plan for which the resource benefit level is above the level of basic benefits anticipates that, for any month in an insolvency year, the plan will not have funds sufficient to pay basic benefits, the plan sponsor may apply for financial assistance from the Pension Benefit Guaranty Corporation under section 4261 of the Employee Retirement Income Security Act of 1974.\nA plan sponsor who has determined a resource benefit level for an insolvency year which is below the level of basic benefits shall apply for financial assistance from the Pension Benefit Guaranty Corporation under section 4261 of the Employee Retirement Income Security Act of 1974.\nAny amount of any financial assistance from the Pension Benefit Guaranty Corporation to any plan, and any repayment of such amount, shall be taken into account under this subpart in such manner as determined by the Secretary.\nSection 4022A(g)(5) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is classified to  section 1322a(g)(5) of Title 29 , Labor.\nSection 4261 of the Employee Retirement Income Security Act of 1974, referred to in subsecs. (b)(3) and (f), is classified to  section 1431 of Title 29 , Labor.\nSection 101(f)(1) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (e)(1), is classified to  section 1021(f)(1) of Title 29 , Labor.\n2018— Pub. L. 115–141, §\u202f401(a)(92) , substituted “section 432(b)(2)” for “subsection 432(b)(2)” wherever appearing.\nSubsec. (d)(1).  Pub. L. 115–141, §\u202f401(a)(93) , substituted “section 432(b)(2),” for “section 432(b)(2),,”, “section 432(b)(2))” for “section 432(b)(2),)”, and “compare the value of plan assets for that plan year with” for “compare the value of plan assets (determined in accordance with section 418B(b)(3)(B)(ii)) for that plan year with”.\nSubsec. (e)(1)(A).  Pub. L. 115–141, §\u202f401(a)(94) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “notify the Secretary, the Pension Benefit Guaranty Corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries of that determination, and”.\n2014—Subsec. (c)(1).  Pub. L. 113–235, §\u202f108(b)(2)(A) , substituted “critical status, as described in subsection 432(b)(2),” for “reorganization”.\nSubsec. (c)(2).  Pub. L. 113–235, §\u202f108(b)(2)(B) , designated existing provisions as subpar. (A), struck out “(within the meaning of section 418(b)(6))” after “pay status”, and added subpar. (B).\nSubsec. (d).  Pub. L. 113–235, §\u202f108(b)(2)(A) , substituted “critical status, as described in subsection 432(b)(2),” for “reorganization” wherever appearing.\nSubsec. (d)(1).  Pub. L. 113–235, §\u202f108(b)(2)(C)(i) , which directed amendment of par. (1) by striking out “(determined in accordance with section 418B(3)(B)(ii))”, could not be executed because the phrase “(determined in accordance with section 418B(3)(B)(ii))” did not appear.\nSubsec. (d)(4).  Pub. L. 113–235, §\u202f108(b)(2)(C)(ii) , added par. (4).\nSubsec. (e)(1).  Pub. L. 113–235, §\u202f108(b)(2)(A) , substituted “critical status, as described in subsection 432(b)(2),” for “reorganization”.\nSubsec. (e)(1)(A).  Pub. L. 113–235, §\u202f108(b)(2)(D)(i) , which directed substitution of “the parties described in section 101(f)(1) of the Employee Retirement Income Security Act of 1974” for “the corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries”, could not be executed because the phrase “the corporation, the parties described in section 418A(a)(2), and the plan participants and beneficiaries” did not appear.\nSubsec. (e)(1)(B).  Pub. L. 113–235, §\u202f108(b)(2)(D)(ii) , substituted “section 101(f)(1) of the Employee Retirement Income Security Act of 1974” for “section 418A(a)(2) and the plan participants and beneficiaries”.\nSubsec. (e)(2).  Pub. L. 113–235, §\u202f108(b)(2)(A) , substituted “critical status, as described in subsection 432(b)(2),” for “reorganization”.\nSubsec. (h).  Pub. L. 113–235, §\u202f108(b)(2)(E) , added subsec. (h).\n2006—Subsec. (d)(1).  Pub. L. 109–280  substituted “5 plan years” for “3 plan years” the second place it appeared and inserted at end “If the plan sponsor makes such a determination that the plan will be insolvent in any of the next 5 plan years, the plan sponsor shall make the comparison under this paragraph at least annually until the plan sponsor makes a determination that the plan will not be insolvent in any of the next 5 plan years.”\nAmendment by  Pub. L. 113–235  applicable with respect to plan years beginning after  Dec. 31, 2014 , see  section 108(c) of div. O of Pub. L. 113–235 , set out as an Effective Date of Repeal note under  section 418 of this title .\nPub. L. 109–280, title II, §\u202f213(b) ,  Aug. 17, 2006 ,  120 Stat. 918 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to the determinations made in plan years beginning after 2007.”\nSection effective, with respect to each plan, on the first day of the first plan year beginning on or after the earlier of the date on which the last collective-bargaining agreement providing for employer contributions under the plan, which was in effect on  Sept. 26, 1980 , expires, without regard to extensions agreed to after such date, or 3 years after  Sept. 26, 1980 , see  section 210 of Pub. L. 96–364 , set out as a note under  section 194A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'The amount of the deduction allowable under subsection (a)(2) for any taxable year shall not exceed the welfare benefit fund’s qualified cost for the taxable year.\nIn the case of any welfare benefit fund, the qualified cost for any taxable year shall be reduced by such fund’s after-tax income for such taxable year.\nFor purposes of subparagraph (A), a benefit shall be treated as provided when such benefit would be includible in the gross income of the employee if provided directly by the employer (or would be so includible but for any provision of this chapter excluding such benefit from gross income).\nIn determining qualified direct costs with respect to any child care facility for purposes of subparagraph (A), in lieu of depreciation the adjusted basis of such facility shall be allowable as a deduction ratably over a period of 60 months beginning with the month in which the facility is placed in service.\nNo item may be taken into account more than once in determining the qualified cost of any welfare benefit fund.\nIn the case of any qualified nonguaranteed contract, subparagraph (A) shall not apply unless the amount of any experience rated refund or policy dividend payable to an employer with respect to a policy year is treated by the employer as received or accrued in the taxable year in which the policy year ends.\n2018—Subsec. (e)(3)(A).  Pub. L. 115–141  substituted “or (17)” for “(17), or (20)”.\n1988—Subsec. (a)(1).  Pub. L. 100–647  substituted “chapter” for “subchapter”.\n1987—Subsec. (e)(2)(D).  Pub. L. 100–203  struck out subpar. (D) which related to a benefit with respect to which an election under section 463 applies.\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1851(b)(2)(C)(iv)(I) , substituted “under this subchapter” for “under section 162 or 212”.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f1851(b)(2)(C)(iv)(II) , substituted “they would otherwise be deductible” for “they satisfy the requirements of either of such sections”.\nSubsec. (e)(4).  Pub. L. 99–514, §\u202f1851(a)(8)(A) , added par. (4).\nSubsec. (g)(1).  Pub. L. 99–514, §\u202f1851(a)(1) , substituted “such a relationship” for “such a plan”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10201(c)(1) of Pub. L. 100–203 , set out as a note under  section 404 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title V, §\u202f511(e) ,  July 18, 1984 ,  98 Stat. 862 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1851(a)(12) , (14),  Oct. 22, 1986 ,  100 Stat. 2862 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this subpart] shall apply to contributions paid or accrued after  December 31, 1985 , in taxable years ending after such date. \n \n “(2)   Special rule for collective bargaining agreements .— In the case of plan maintained pursuant to 1 or more collective bargaining agreements— “(A)  between employee representatives and 1 or more employers, and \n \n “(B)  in effect on  July 1, 1985  (or ratified on or before such date), \n \n\n the amendments made by this section shall not apply to years beginning before the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after  July 1, 1985 ). \n \n “(3)   Special rule for paragraph (2) .— For purposes of paragraph (2), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement. \n \n “(4)   Special effective date for contributions of facilities .— Notwithstanding paragraphs (1) and (2), the amendments made by this section shall apply in the case of— “(A)  any contribution after  June 22, 1984 , of a facility to a welfare benefit fund, and \n \n “(B)  any other contribution after  June 22, 1984 , to a welfare benefit fund to be used to acquire or improve a facility. \n \n \n “(5)   Binding contract exceptions to paragraph (4) .— Paragraph (4) shall not apply to any facility placed in service before  January 1, 1987 — “(A)  which is acquired or improved by the fund (or contributed to the fund) pursuant to a binding contract in effect on  June 22, 1984 , and at all times thereafter, or \n \n “(B)  the construction of which by or for the fund began before  June 22, 1984 . \n \n \n “(6)   Amendments related to tax on unrelated business income .— The amendments made by subsection (b) [amending  section 512 of this title ] shall apply with respect to taxable years ending after  December 31, 1985 . For purposes of section 15 of the Internal Revenue Code of 1954 [now 1986], such amendments shall be treated as a change in the rate of a tax imposed by chapter 1 of such Code. \n \n “(7)   Amendments related to excise taxes on certain welfare benefit plans .— The amendments made by subsection (c) [enacting  section 4976 of this title ] shall apply to benefits provided after  December 31, 1985 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1851(a)(8)(B) ,  Oct. 22, 1986 ,  100 Stat. 2860 , provided that:  “Except in the case of a reserve for post-retirement medical or life insurance benefits and any other arrangement between an insurance company and an employer under which the employer has a contractual right to a refund or dividend based solely on the experience of such employer, any account held for an employer by any person and defined as a fund in regulations issued pursuant to section 419(e)(3)(C) of the Internal Revenue Code of 1954 [now 1986] shall be considered a ‘fund’ no earlier than 6 months following the date such regulations are published in final form.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'No addition to any qualified asset account may be taken into account under section 419(c)(1)(B) to the extent such addition results in the amount in such account exceeding the account limit.\nThe account limit for any taxable year with respect to SUB or severance pay benefits is 75 percent of the average annual qualified direct costs for SUB or severance pay benefits for any 2 of the immediately preceding 7 taxable years (as selected by the fund).\nIn the case of any new plan for which SUB or severance pay benefits are not available to any key employee, the Secretary shall, by regulations, provide for an interim amount to be taken into account under paragraph (1).\nFor purposes of paragraph (3), any SUB or severance pay benefit payable to any individual shall not be taken into account to the extent such benefit is payable at an annual rate in excess of 150 percent of the limitation in effect under section 415(c)(1)(A).\nUnless there is an actuarial certification of the account limit determined under this subsection for any taxable year, the account limit for such taxable year shall not exceed the sum of the safe harbor limits for such taxable year.\nIn the case of short-term disability benefits, the safe harbor limit for any taxable year is 17.5 percent of the qualified direct costs (other than insurance premiums) for the immediately preceding taxable year with respect to such benefits.\nIn the case of medical benefits, the safe harbor limit for any taxable year is 35 percent of the qualified direct costs (other than insurance premiums) for the immediately preceding taxable year with respect to medical benefits.\nIn the case of SUB or severance pay benefits, the safe harbor limit for any taxable year is the amount determined under paragraph (3).\nIn the case of any long-term disability benefit or life insurance benefit, the safe harbor limit for any taxable year shall be the amount prescribed by regulations.\nFor purposes of this subsection, the term “applicable account limit” means an account limit for a qualified asset account with respect to medical benefits provided through a plan maintained by a bona fide association (as defined in section 2791(d)(3) of the Public Health Service Act ( 42 U.S.C. 300gg–91(d)(3) )).\nFor purposes of section 415, any amount attributable to medical benefits allocated to an account established under paragraph (1) shall be treated as an annual addition to a defined contribution plan for purposes of section 415(c). Subparagraph (B) of section 415(c)(1) shall not apply to any amount treated as an annual addition under the preceding sentence.\nFor purposes of this section, the term “key employee” means any employee who, at any time during the plan year or any preceding plan year, is or was a key employee as defined in section 416(i).\nNo reserve may be taken into account under subsection (c)(2) for post-retirement medical benefits or life insurance benefits to be provided to covered employees unless the plan meets the requirements of section 505(b) with respect to such benefits (whether or not such requirements apply to such plan). The preceding sentence shall not apply to any plan maintained pursuant to an agreement between employee representatives and 1 or more employers if the Secretary finds that such agreement is a collective bargaining agreement and that post-retirement medical benefits or life insurance benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.\nLife insurance benefits shall not be taken into account under subsection (c)(2) to the extent the aggregate amount of such benefits to be provided with respect to the employee exceeds $50,000.\nThe term “medical benefit” means a benefit which consists of the providing (directly or through insurance) of medical care (as defined in section 213(d)).\nThe term “life insurance benefit” includes any other death benefit.\nFor purposes of this section, the amount of the qualified asset account shall be the value of the assets in such account (as determined under regulations).\nThis subpart shall not apply in the case of any welfare benefit fund which is part of a 10 or more employer plan. The preceding sentence shall not apply to any plan which maintains experience-rating arrangements with respect to individual employers.\nThe account limit for any of the first 4 taxable years to which this section applies shall be increased by the applicable percentage of any existing excess reserves.\nFor purposes of subparagraph (A)— \n \n \n \n \n \n \n \u2001In the case of: The applicable percentage is: \n \n \n The first taxable year to which this section applies 80\u202f\u202f \n The second taxable year to which this section applies 60\u202f\u202f \n The third taxable year to which this section applies 40\u202f\u202f \n The fourth taxable year to which this section applies 20.\nThis paragraph shall apply only to a welfare benefit fund which, as of  July 18, 1984 , had assets set aside for purposes described in subsection (a).\nIn the case of any welfare benefit fund which is not an organization described in paragraph (7), (9), or (17) of section 501(c), the employer shall include in gross income for any taxable year an amount equal to such fund’s deemed unrelated income for the fund’s taxable year ending within the employer’s taxable year.\nFor purposes of paragraph (1), the deemed unrelated income of any welfare benefit fund shall be the amount which would have been its unrelated business taxable income under section 512(a)(3) if such fund were an organization described in paragraph (7), (9), or (17) of section 501(c).\nFor purposes of subsections (c)(4), (d)(2), and (e)(2), all welfare benefit funds of an employer shall be treated as 1 fund.\nFor purposes of this section (other than the provisions specified in subparagraph (A)), at the election of the employer, 2 or more welfare benefit funds of such employer may (to the extent not inconsistent with the purposes of this subpart and section 512) be treated as 1 fund.\nRules similar to the rules of subsections (b), (c), (m), and (n) of section 414 shall apply.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this subpart. Such regulations may provide that the plan administrator of any welfare benefit fund which is part of a plan to which more than 1 employer contributes shall submit such information to the employers contributing to the fund as may be necessary to enable the employers to comply with the provisions of this section.\n2018—Subsec. (c)(6)(B).  Pub. L. 115–141, §\u202f401(a)(96) , substituted “( 42 U.S.C. 300gg–91(d)(3) ))” for “( 42 U.S.C. 300gg–91(d)(3) )”.\nSubsec. (g)(1), (2).  Pub. L. 115–141, §\u202f401(b)(21)(B) , (C), substituted “or (17)” for “(17), or (20)”.\n2006—Subsec. (c)(6).  Pub. L. 109–280  added par. (6).\n1996—Subsec. (c)(3).  Pub. L. 104–188  substituted “severance” for “severence” in heading.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1018(u)(12) , made technical amendment to directory language of  Pub. L. 99–514, §\u202f1851(a)(6)(B) . See 1986 Amendment note below.\nSubsec. (f)(5).  Pub. L. 100–647, §\u202f1018(t)(2)(A) , repealed  Pub. L. 99–514, §\u202f1851(a)(4) . See 1986 Amendment note below.\nPub. L. 100–647, §\u202f1018(t)(1)(C) , substituted “account” for “accounts”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1851(a)(6)(B) , as amended by  Pub. L. 100–647, §\u202f1018(u)(12) , inserted “and section 512” after “this subpart”.\nSubsec. (c)(5)(A).  Pub. L. 99–514, §\u202f1851(a)(5) , substituted “under this subsection” for “under paragraph (1)”.\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1851(a)(2)(B) , inserted “The requirements of this paragraph shall apply to the first taxable year for which a reserve is taken into account under subsection (c)(2) and to all subsequent taxable years.”\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1851(a)(2)(A) , inserted “Subparagraph (B) of section 415(c)(1) shall not apply to any amount treated as an annual addition under the preceding sentence.”\nSubsec. (e).  Pub. L. 99–514, §\u202f1851(a)(3)(A) , amended subsec. (e) generally. Prior to amendment, par. (1), benefits must be nondiscriminatory, read as follows: “No reserve may be taken into account under subsection (c)(2) for post-retirement medical benefits or life insurance benefits to be provided to covered employees unless the plan meets the requirements of section 505(b)(1) with respect to such benefits.”, and par. (2), taxable life insurance benefits not taken into account, read as follows: “No life insurance benefit may be taken into account under subsection (c)(2) to the extent—\n“(A) such benefit is includible in gross income under section 79, or\n“(B) such benefit would be includible in gross income under section 101(b) (determined by substituting ‘$50,000’ for ‘$5,000’).”\nSubsec. (f)(5).  Pub. L. 99–514, §\u202f1851(a)(13) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “ Higher limit in case of collectively bargained plans .—Not later than  July 1, 1985 , the Secretary shall by regulations provide for special account limits in the case of any qualified asset account under a welfare benefit fund established under a collective bargaining agreement.”\nPub. L. 99–514, §\u202f1851(a)(4) , which directed amendment of par. (5) by substituting “welfare benefit fund maintained pursuant to” for “welfare benefit fund established under”, was repealed by  Pub. L. 100–647, §\u202f1018(t)(2)(A) .\nSubsec. (f)(7)(C), (D).  Pub. L. 99–514, §\u202f1851(a)(7) , added subpars. (C) and (D) and struck out former subpar. (C) which read as follows: “For purposes of this paragraph, the term ‘existing excess reserve’ means the excess (if any) of—\n“(i) the amount of assets set aside for purposes described in subsection (a) as of the close of the first taxable year ending after the date of the enactment of the Tax Reform Act of 1984, over\n“(ii) the account limit which would have applied under this section to such taxable year if this section had applied to such taxable year.”\nSubsec. (g)(3).  Pub. L. 99–514, §\u202f1851(a)(9) , added par. (3).\nSubsec. (h)(1).  Pub. L. 99–514, §\u202f1851(a)(6)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “At the election of the employer, 2 or more welfare benefit funds of such employer may be treated as 1 fund.”\nPub. L. 109–280, title VIII, §\u202f843(b) ,  Aug. 17, 2006 ,  120 Stat. 1010 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nFor provisions that nothing in amendment by section 401(b)(21)(B), (C) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1851(a)(3)(B) ,  Oct. 22, 1986 ,  100 Stat. 2859 , as amended by  Pub. L. 100–647, title I, §\u202f1018(t)(2)(D) ,  Nov. 10, 1988 ,  102 Stat. 3587 , provided that:  “Subsection (e) of section 419A, section 505, and section 4976(b)(1)(B) of the Internal Revenue Code of 1954 [now 1986] (as amended by subparagraph (A)) shall not apply to any group-term life insurance to the extent that the amendments made by section 223(a) of the Tax Reform Act of 1984 [ section 223(a) of Pub. L. 98–369 , amending  section 79 of this title ] do not apply to such insurance by reason of paragraph (2) of section 223(d) of such Act [set out as a note under  section 79 of this title ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.'},
  'content': 'No more than 1 transfer with respect to any plan during a taxable year may be treated as a qualified transfer for purposes of this section. If there is a transfer from a defined benefit plan to both a health benefits account and an applicable life insurance account during any taxable year, such transfers shall be treated as 1 transfer for purposes of this paragraph.\nThe amount of excess pension assets which may be transferred to an account in a qualified transfer shall not exceed the amount which is reasonably estimated to be the amount the employer maintaining the plan will pay (whether directly or through reimbursement) out of such account during the taxable year of the transfer for qualified current retiree liabilities.\nNo transfer made after  December 31, 2032 , shall be treated as a qualified transfer.\nAny assets transferred to a health benefits account, or an applicable life insurance account, in a qualified transfer (and any income allocable thereto) shall be used only to pay qualified current retiree liabilities (other than liabilities of key employees not taken into account under subsection (e)(1)(E)) for the taxable year of the transfer (whether directly or through reimbursement). In the case of a qualified future transfer or collectively bargained transfer to which subsection (f) applies, any assets so transferred may also be used to pay liabilities described in subsection (f)(2)(C).\nAny assets transferred to a health benefits account, or an applicable life insurance account, in a qualified transfer (and any income allocable thereto) which are not used as provided in subparagraph (A) shall be transferred out of the account to the transferor plan.\nFor purposes of this section, any amount paid out of a health benefits account, or an applicable life insurance account, shall be treated as paid first out of the assets and income described in subparagraph (A).\nThe requirements of this paragraph are met if the plan provides that the accrued pension benefits of any participant or beneficiary under the plan become nonforfeitable in the same manner which would be required if the plan had terminated immediately before the qualified transfer (or in the case of a participant who separated during the 1-year period ending on the date of the transfer, immediately before such separation).\nThe requirements of this paragraph are met if each group health plan or arrangement under which applicable health benefits are provided, and each group-term life insurance plan under which applicable life insurance benefits are provided, provides that the applicable employer cost for each taxable year during the cost maintenance period shall not be less than the higher of the applicable employer costs for each of the 2 taxable years immediately preceding the taxable year of the qualified transfer or, in the case of a transfer which involves a plan maintained by an employer described in subsection (f)(2)(E)(i)(III), if the plan meets the requirements of subsection (f)(2)(D)(i)(II).\nAn employer may elect to have this paragraph applied separately for applicable health benefits with respect to individuals eligible for benefits under title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible, and separately for applicable life insurance benefits with respect to individuals age 65 or older at any time during the taxable year and with respect to individuals under age 65 during the taxable year.\nFor purposes of this paragraph, the term “cost maintenance period” means the period of 5 taxable years (7 taxable years in the case of a transfer to which subsection (e)(7) applies) beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in two or more overlapping cost maintenance periods, this paragraph shall be applied by taking into account the highest applicable employer cost required to be provided under subparagraph (A) for such taxable year.\nThe Secretary shall prescribe such regulations as may be necessary to prevent an employer who significantly reduces retiree health coverage or retiree life insurance coverage, as the case may be, during the cost maintenance period from being treated as satisfying the minimum cost requirement of this subsection.\nAn eligible employer shall not be treated as failing to meet the requirements of this paragraph for any taxable year if, in lieu of any reduction of retiree health coverage permitted under the regulations prescribed under clause (i), the employer reduces applicable employer cost by an amount not in excess of the reduction in costs which would have occurred if the employer had made the maximum permissible reduction in retiree health coverage under such regulations. In applying such regulations to any subsequent taxable year, any reduction in applicable employer cost under this clause shall be treated as if it were an equivalent reduction in retiree health coverage.\nFor purposes of subclause (I), an employer shall be treated as an eligible employer for any taxable year if, for the preceding taxable year, the qualified current retiree liabilities of the employer with respect to applicable health benefits were at least 5 percent of the gross receipts of the employer. For purposes of this subclause, the rules of paragraphs (2), (3)(B), and (3)(C) of section 448(c) shall apply in determining the amount of an employer’s gross receipts.\nAn employer may not contribute any amount to a health benefits account or welfare benefit fund (as defined in section 419(e)(1)) with respect to qualified current retiree liabilities for which transferred assets are required to be used under subsection (c)(1).\nThe term “applicable life insurance benefits” means group-term life insurance coverage provided to retired employees who, immediately before the qualified transfer, are entitled to receive such coverage by reason of retirement and who are entitled to pension benefits under the plan, but only to the extent that such coverage is provided under a policy for retired employees and the cost of such coverage is excludable from the retired employee’s gross income under section 79.\nIf an employee is a key employee (within the meaning of section 416(i)(1)) with respect to any plan year ending in a taxable year, such employee shall not be taken into account in computing qualified current retiree liabilities for such taxable year or in calculating applicable employer cost under subsection (c)(3)(B).\nThe term “health benefits account” means an account established and maintained under section 401(h).\nThe term “applicable life insurance account” means a separate account established and maintained for amounts transferred under this section for qualified current retiree liabilities based on premiums for applicable life insurance benefits.\nIn the case of a qualified transfer, any assets so transferred shall not, for purposes of this section and sections 430 and 433, be treated as assets in the plan.\nIn the case of a transfer of an amount which is not more than 1.75 percent of the amount determined under paragraph (2)(A) by a plan which meets the requirements of subparagraph (B), paragraph (2)(B) shall be applied by substituting “110 percent” for “125 percent”.\nA plan is described in this subparagraph if, as of any valuation date in each of the 2 plan years immediately preceding the plan year in which the transfer occurs, the amount determined under paragraph (2)(A) exceeded 110 percent of the sum of the funding target and the target normal cost determined under section 430 for each such plan year.\nIn determining excess pension assets for purposes of this subsection, subsection (e)(2)(B) shall be applied by substituting “120 percent” for “125 percent”.\nIn determining excess pension assets for purposes of a collectively bargained transfer, subsection (e)(7) shall not apply.\nAn employer may elect, in lieu of the requirements of clause (i)(I), to meet the requirements of subsection (c)(3) with respect to applicable health benefits or applicable life insurance benefits by meeting the requirements of such subsection (as in effect before the amendments made by section 535 of the Tax Relief Extension Act of 1999) for each of the years described in the period under clause (i)(I). Such election may be made separately with respect to applicable health benefits and applicable life insurance benefits. In the case of an election with respect to applicable life insurance benefits, the first sentence of this clause shall be applied as if subsection (c)(3) as in effect before the amendments made by such Act applied to such benefits.\nFor purposes of this subparagraph, the term “collectively bargained employer cost” means the average cost per covered individual of providing collectively bargained health benefits, collectively bargained life insurance benefits, or both, as the case may be, as determined in accordance with the applicable collective bargaining agreement. Such agreement may provide for an appropriate reduction in the collectively bargained employer cost to take into account any portion of the collectively bargained health benefits, collectively bargained life insurance benefits, or both, as the case may be, that is provided or financed by a government program or other source.\nAny assets transferred to a health benefits account, or an applicable life insurance account, in a collectively bargained transfer (and any income allocable thereto) shall be used only to pay collectively bargained retiree liabilities (other than liabilities of key employees not taken into account under paragraph (6)(B)(iii)) for the taxable year of the transfer or for any subsequent taxable year during the collectively bargained cost maintenance period (whether directly or through reimbursement).\nIn applying subsection (b)(3) to any subsequent transfer during a taxable year in a transfer period or collectively bargained cost maintenance period, qualified current retiree liabilities shall be reduced by any such liabilities taken into account with respect to the qualified future transfer or collectively bargained transfer to which such period relates.\nFor purposes of this subsection, the term “transfer period” means, with respect to any transfer, a period of consecutive taxable years (not less than 2) specified in the election under paragraph (1) which begins and ends during the 10-taxable-year period beginning with the taxable year of the transfer.\nThe term “collectively bargained retiree liabilities” means the present value, as of the beginning of a taxable year and determined in accordance with the applicable collective bargaining agreement, of all collectively bargained health benefits, and collectively bargained life insurance benefits, (including administrative expenses) for such taxable year and all subsequent taxable years during the collectively bargained cost maintenance period.\nThe amount determined under clause (i) shall be reduced by the value (as of the close of the plan year preceding the year of the collectively bargained transfer) of the assets in all health benefits accounts, applicable life insurance accounts, or welfare benefit funds (as defined in section 419(e)(1)) set aside to pay for the collectively bargained retiree liabilities. The preceding sentence shall be applied separately for collectively bargained health benefits and collectively bargained life insurance benefits.\nIf an employee is a key employee (within the meaning of section 416(i)(1)) with respect to any plan year ending in a taxable year, such employee shall not be taken into account in computing collectively bargained retiree liabilities for such taxable year or in calculating collectively bargained employer cost under subsection (c)(3)(C).\nThe term “collectively bargained plan” means a group health plan or arrangement for retired employees and their spouses and dependents, or a group-term life insurance plan or arrangement for retired employees, that is maintained pursuant to 1 or more collective bargaining agreements.\nIn the case of an employer maintaining a plan which has made a qualified future transfer under this subsection, such employer may, not later than  December 31, 2021 , elect to terminate the transfer period with respect to such transfer effective as of any taxable year specified by the taxpayer that begins after the date of such election.\nAny assets transferred to a health benefits account, or an applicable life insurance account, in a qualified future transfer (and any income allocable thereto) which are not used as of the effective date of the election to terminate the transfer period with respect to such transfer under subparagraph (A), shall be transferred out of the account to the transferor plan within a reasonable period of time. The transfer required by this subparagraph shall be treated as an employer reversion for purposes of section 4980 (other than subsection (d) thereof), unless before the end of the 5-year period beginning after the original transfer period an equivalent amount is transferred back to such health benefits account, or applicable life insurance account, as the case may be. Any such transfer back pursuant to the preceding sentence may be made without regard to section 401(h)(1).\nThe requirements of subsection (c)(3) and paragraph (2)(D) shall apply with respect to a qualified future transfer without regard to any election under subparagraph (A) with respect to such transfer.\nThe requirements of paragraph (2)(B) shall apply without regard to any such election, and clause (i) thereof shall be applied by substituting “100 percent” for “120 percent” during the original transfer period.\nIn the case of a plan with respect to which there is an excess described in paragraph (2)(B)(ii) as of the valuation date of the plan year in the last year of the original transfer period, paragraph (2)(B) shall apply for 5 years after the original transfer period in the same manner as during a transfer period by substituting the applicable percentage for “120 percent” in clause (i) thereof.\nFor purposes of this subparagraph, the applicable percentage shall be determined under the following table: \n \n \n \n \n \n \n For the valuation date of the plan year in the following year after the original transfer period: The applicable percentage is: \n \n \n 1st 104 percent \n 2nd 108 percent \n 3rd 112 percent \n 4th 116 percent \n 5th 120 percent\nIf, as of the valuation date of any plan year in the first 4 years after the original transfer period with respect to a qualified future transfer, there would be no excess determined under this subparagraph were the applicable percentage 120 percent, then this subparagraph shall cease to apply with respect to the plan.\nFor purposes of this paragraph, the term “original transfer period” means the transfer period under this subsection with respect to a qualified future transfer determined without regard to the election under subparagraph (A).\nFor purposes of this section, section 430 shall be applied without regard to subsection (h)(2)(C)(iv) thereof.\nThe Social Security Act, referred to in subsec. (c)(3)(C), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title XVIII of the Act is classified generally to subchapter XVIII (§\u202f1395 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe Employee Retirement Income Security Act of 1974, referred to in subsec. (f)(1), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 , which is classified principally to chapter 18 (§\u202f1001 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nSubsection (c)(3) as in effect before the amendments made by section 535 of the Tax Relief Extension Act of 1999, referred to in subsec. (f)(2)(D)(ii), is subsec. (c)(3) of this section prior to its general amendment by  section 535(b)(1) of Pub. L. 106–170 .\n2022—Subsec. (b)(4).  Pub. L. 117–328, §\u202f606(a)(1) , substituted “ December 31, 2032 ” for “ December 31, 2025 ”.\nSubsec. (c)(3)(D).  Pub. L. 117–328, §\u202f606(a)(2)(B) , substituted “5 taxable years (7 taxable years in the case of a transfer to which subsection (e)(7) applies)” for “5 taxable years”.\nSubsec. (e)(7).  Pub. L. 117–328, §\u202f606(a)(2)(A) , added par. (7).\nSubsec. (f)(2)(B)(i).  Pub. L. 117–328, §\u202f606(a)(2)(C)(i) , designated existing provisions as subcl. (I), inserted heading, substituted “subsection (e)(2)(B)” for “subsection (e)(2)”, and added subcl. (II).\nSubsec. (f)(2)(D)(i)(I).  Pub. L. 117–328, §\u202f606(a)(2)(C)(ii) , substituted “4th year (the 6th year in the case of a transfer to which subsection (e)(7) applies)” for “4th year”.\n2020—Subsec. (f)(7).  Pub. L. 116–260  added par. (7).\n2018—Subsec. (c)(1)(A).  Pub. L. 115–141  substituted “subsection (e)(1)(E)” for “subsection (e)(1)(D)”.\n2015—Subsec. (b)(4).  Pub. L. 114–41  substituted “ December 31, 2025 ” for “ December 31, 2021 ”.\n2014—Subsec. (e)(5).  Pub. L. 113–97  substituted “sections 430 and 433” for “section 430” in heading and text.\n2012— Pub. L. 112–141, §\u202f40242(e)(1) , substituted “qualified current retiree liabilities” for “qualified current retiree health liabilities” wherever appearing in subsecs. (b) to (d), (e)(1), and (f).\nSubsec. (a).  Pub. L. 112–141, §\u202f40242(a) , inserted “,\u2000or an applicable life insurance account,” after “health benefits account”.\nSubsec. (b)(1)(A).  Pub. L. 112–141, §\u202f40242(g)(1) , struck out “in a taxable year beginning after  December 31, 1990 ” after “such plan”.\nPub. L. 112–141, §\u202f40242(e)(2) , inserted “,\u2000or an applicable life insurance account,” after “a health benefits account”.\nSubsec. (b)(2).  Pub. L. 112–141, §\u202f40242(g)(3) , struck out “(A) In general” before “No more than” and struck out heading and text of subpar. (B). Prior to amendment, text read as follows: “A transfer described in paragraph (4) shall not be taken into account for purposes of subparagraph (A).”\nSubsec. (b)(2)(A).  Pub. L. 112–141, §\u202f40242(e)(3)(A) , inserted at end “If there is a transfer from a defined benefit plan to both a health benefits account and an applicable life insurance account during any taxable year, such transfers shall be treated as 1 transfer for purposes of this paragraph.”\nSubsec. (b)(3).  Pub. L. 112–141, §\u202f40242(e)(3)(B) , inserted “to an account” after “may be transferred”.\nSubsec. (b)(4).  Pub. L. 112–141, §\u202f40242(g)(2) , redesignated par. (5) as (4) and struck out former par. (4) which related to a special rule for 1990.\nSubsec. (b)(5).  Pub. L. 112–141, §\u202f40242(g)(2) , redesignated par. (5) as (4).\nPub. L. 112–141, §\u202f40241(a) , substituted “ December 31, 2021 ” for “ December 31, 2013 ”.\nSubsec. (c)(1)(A).  Pub. L. 112–141, §\u202f40242(e)(2) , inserted “,\u2000or an applicable life insurance account,” after “a health benefits account”.\nSubsec. (c)(1)(B).  Pub. L. 112–141, §\u202f40242(e)(4) , inserted “or life insurance” after “health benefits” in heading.\nSubsec. (c)(1)(B)(i).  Pub. L. 112–141, §\u202f40242(e)(2) , inserted “,\u2000or an applicable life insurance account,” after “a health benefits account”.\nSubsec. (c)(1)(C).  Pub. L. 112–141, §\u202f40242(e)(2) , inserted “,\u2000or an applicable life insurance account,” after “a health benefits account”.\nSubsec. (c)(2).  Pub. L. 112–141, §\u202f40242(g)(4) , struck out “(A) In general” before “The requirements of”, realigned margins, and struck out heading and text of subpar. (B). Prior to amendment, text read as follows: “In the case of a qualified transfer described in subsection (b)(4), the requirements of this paragraph are met with respect to any participant who separated from service during the taxable year to which such transfer relates by recomputing such participant’s benefits as if subparagraph (A) had applied immediately before such separation.”\nSubsec. (c)(3)(A).  Pub. L. 112–141, §\u202f40242(c)(1) , inserted “,\u2000and each group-term life insurance plan under which applicable life insurance benefits are provided,” after “health benefits are provided”.\nSubsec. (c)(3)(B)(i).  Pub. L. 112–141, §\u202f40242(c)(2)(A)(i) , redesignated subcls. (I) and (II) as (II) and (III), respectively, and added subcl. (I).\nSubsec. (c)(3)(B)(ii).  Pub. L. 112–141, §\u202f40242(c)(2)(A)(ii) , substituted “was provided during such taxable year for the benefits with respect to which the determination under clause (i) is made.” for “for applicable health benefits was provided during such taxable year.”\nSubsec. (c)(3)(C).  Pub. L. 112–141, §\u202f40242(c)(2)(B) , inserted “for applicable health benefits” after “applied separately” and “,\u2000and separately for applicable life insurance benefits with respect to individuals age 65 or older at any time during the taxable year and with respect to individuals under age 65 during the taxable year” before the period at end.\nSubsec. (c)(3)(E)(i).  Pub. L. 112–141, §\u202f40242(c)(2)(C)(i) , inserted “or retiree life insurance coverage, as the case may be,” after “retiree health coverage”.\nSubsec. (c)(3)(E)(ii).  Pub. L. 112–141, §\u202f40242(c)(2)(C)(ii) , inserted “for retiree health coverage” after “cost reductions” in heading.\nSubsec. (c)(3)(E)(ii)(II).  Pub. L. 112–141, §\u202f40242(c)(2)(C)(iii) , inserted “with respect to applicable health benefits” after “liabilities of the employer”.\nSubsec. (d)(1)(A).  Pub. L. 112–141, §\u202f40242(e)(2) , inserted “,\u2000or an applicable life insurance account,” after “a health benefits account”.\nSubsec. (d)(2).  Pub. L. 112–141, §\u202f40242(g)(5) , struck out “after  December 31, 1990 ” after “may not contribute”.\nSubsec. (e)(1).  Pub. L. 112–141, §\u202f40242(e)(5)(B) , struck out “health” after “Qualified current retiree” in the heading.\nSubsec. (e)(1)(A).  Pub. L. 112–141, §\u202f40242(e)(5)(A) , inserted “and applicable life insurance benefits” after “applicable health benefits”.\nSubsec. (e)(1)(B).  Pub. L. 112–141, §\u202f40242(e)(6)(A) , inserted “(determined separately for applicable health benefits and applicable life insurance benefits)” after “shall be reduced by the amount” in introductory provisions.\nSubsec. (e)(1)(B)(i).  Pub. L. 112–141, §\u202f40242(e)(6)(C) , substituted “qualified current retiree liability” for “qualified current retiree health liability”.\nPub. L. 112–141, §\u202f40242(e)(6)(B) , which directed the insertion of “or applicable life insurance accounts” after “health benefit accounts”, was executed by making the insertion after “health benefits accounts” to reflect the probable intent of Congress.\nSubsec. (e)(1)(C)(i).  Pub. L. 112–141, §\u202f40242(b)(3)(B)(i) , substituted “by reason of retirement” for “upon retirement”.\nSubsec. (e)(1)(D), (E).  Pub. L. 112–141, §\u202f40242(b)(2) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (e)(4) to (6).  Pub. L. 112–141, §\u202f40242(b)(1) , added par. (4) and redesignated former pars. (4) and (5) as (5) and (6), respectively.\nSubsec. (f).  Pub. L. 112–141, §\u202f40242(e)(7) , struck out “health” after “retiree” in two places in the heading.\nSubsec. (f)(2)(B)(ii)(II).  Pub. L. 112–141, §\u202f40242(e)(8) , inserted “or applicable life insurance account, as the case may be,” after “health benefits account”.\nSubsec. (f)(2)(C)(ii).  Pub. L. 112–141, §\u202f40242(c)(2)(D) , substituted “collectively bargained retiree liabilities” for “collectively bargained retiree health liabilities”.\nSubsec. (f)(2)(D)(i)(I).  Pub. L. 112–141, §\u202f40242(c)(2)(E)(i) , (ii), inserted “,\u2000and each group-term life insurance plan or arrangement under which applicable life insurance benefits are provided,” after “applicable health benefits are provided” and “or applicable life insurance benefits, as the case may be,” after “provides applicable health benefits”.\nSubsec. (f)(2)(D)(i)(II).  Pub. L. 112–141, §\u202f40242(c)(2)(E)(iii) , (iv), struck out “group health” after “each collectively bargained” and inserted “or collectively bargained life insurance benefits” after “collectively bargained health benefits”.\nSubsec. (f)(2)(D)(ii).  Pub. L. 112–141, §\u202f40242(c)(2)(F) , inserted “with respect to applicable health benefits or applicable life insurance benefits” after “requirements of subsection (c)(3)” and inserted at end “Such election may be made separately with respect to applicable health benefits and applicable life insurance benefits. In the case of an election with respect to applicable life insurance benefits, the first sentence of this clause shall be applied as if subsection (c)(3) as in effect before the amendments made by such Act applied to such benefits.”\nSubsec. (f)(2)(D)(iii).  Pub. L. 112–141, §\u202f40242(c)(2)(G) , struck out “retiree” before “health benefits” in two places and inserted “,\u2000collectively bargained life insurance benefits, or both, as the case may be,” after “health benefits” in two places.\nSubsec. (f)(2)(E)(i)(III).  Pub. L. 112–141, §\u202f40242(e)(9) , inserted “defined benefit” before “plan maintained by an employer” and “health” before “benefit plans maintained by the employer”.\nSubsec. (f)(2)(E)(ii).  Pub. L. 112–141, §\u202f40242(e)(2) , inserted “,\u2000or an applicable life insurance account,” after “a health benefits account”.\nPub. L. 112–141, §\u202f40242(c)(2)(D) , substituted “collectively bargained retiree liabilities” for “collectively bargained retiree health liabilities”.\nSubsec. (f)(4).  Pub. L. 112–141, §\u202f40242(e)(10) , substituted “collectively bargained retiree liabilities” for “collectively bargained retiree health liabilities” in two places.\nSubsec. (f)(6)(A)(i).  Pub. L. 112–141, §\u202f40242(e)(11)(A) , inserted “,\u2000in the case of a transfer to a health benefits account,” before “his covered spouse and dependents”.\nSubsec. (f)(6)(A)(ii).  Pub. L. 112–141, §\u202f40242(e)(11) , inserted “,\u2000in the case of a transfer to a health benefits account,” before “his covered spouse and dependents” and substituted “plan” for “health plan”.\nSubsec. (f)(6)(B).  Pub. L. 112–141, §\u202f40242(e)(12)(C) , struck out “health” after “retiree” in the heading.\nPub. L. 112–141, §\u202f40242(e)(10) , substituted “collectively bargained retiree liabilities” for “collectively bargained retiree health liabilities” wherever appearing.\nSubsec. (f)(6)(B)(i).  Pub. L. 112–141, §\u202f40242(e)(12)(A) , inserted “,\u2000and collectively bargained life insurance benefits,” after “collectively bargained health benefits”.\nSubsec. (f)(6)(B)(ii).  Pub. L. 112–141, §\u202f40242(e)(12)(B)(ii) , which directed the insertion of “,\u2000applicable life insurance accounts,” after “health benefit accounts”, was executed by making the insertion after “health benefits accounts” to reflect the probable intent of Congress.\nPub. L. 112–141, §\u202f40242(e)(12)(B)(i) , inserted at end “The preceding sentence shall be applied separately for collectively bargained health benefits and collectively bargained life insurance benefits.”\nSubsec. (f)(6)(B)(iii).  Pub. L. 112–141, §\u202f40242(f) , substituted “416(i)(1)” for “416(I)(1)”.\nSubsec. (f)(6)(C).  Pub. L. 112–141, §\u202f40242(b)(3)(B)(ii)(I) , struck out “which are provided to” after “coverage” in introductory provisions.\nSubsec. (f)(6)(C)(i).  Pub. L. 112–141, §\u202f40242(b)(3)(B)(ii)(II) , (III), inserted “which are provided to” before “retired employees” and substituted “by reason of retirement” for “upon retirement”.\nSubsec. (f)(6)(C)(ii).  Pub. L. 112–141, §\u202f40242(b)(3)(B)(ii)(IV) , substituted “which will be provided at retirement to employees who are not retired employees at the time of the transfer and who” for “active employees who, following their retirement,”.\nSubsec. (f)(6)(D).  Pub. L. 112–141, §\u202f40242(b)(3)(A) , added subpar. (D). Former subpar. (D) redesignated (E).\nSubsec. (f)(6)(E).  Pub. L. 112–141, §\u202f40242(e)(13) , struck out “health” after “bargained” in heading, substituted “bargained” for “bargained health”, and inserted “,\u2000or a group-term life insurance plan or arrangement for retired employees,” after “dependents”.\nPub. L. 112–141, §\u202f40242(b)(3)(A) , redesignated subpar. (D) as (E).\nSubsec. (g).  Pub. L. 112–141, §\u202f40211(a)(2)(D) , added subsec. (g).\n2008—Subsec. (c)(1)(A).  Pub. L. 110–458, §\u202f108(i)(1) , inserted last sentence “In the case of a qualified future transfer or collectively bargained transfer to which subsection (f) applies, any assets so transferred may also be used to pay liabilities described in subsection (f)(2)(C).”\nSubsec. (f)(2)(D)(i)(I).  Pub. L. 110–458, §\u202f108(i)(2) , struck out “such” after “average amount of”.\n2007—Subsec. (c)(3)(A).  Pub. L. 110–28, §\u202f6613(a) , substituted “transfer or, in the case of a transfer which involves a plan maintained by an employer described in subsection (f)(2)(E)(i)(III), if the plan meets the requirements of subsection (f)(2)(D)(i)(II).” for “transfer.”\nSubsec. (e)(2)(B).  Pub. L. 110–28, §\u202f6612(b) , substituted “funding target” for “funding shortfall”.\nSubsec. (f)(2)(E)(i)(III).  Pub. L. 110–28, §\u202f6612(a) , substituted “subsection (c)(3)(E)(ii)(II)” for “subsection (c)(2)(E)(ii)(II)”.\n2006—Subsec. (a).  Pub. L. 109–280, §\u202f842(a)(1) , struck out “(other than a multiemployer plan)” after “defined benefit plan” in introductory provisions.\nSubsec. (e)(2).  Pub. L. 109–280, §\u202f114(d)(1) , reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘excess pension assets’ means the excess (if any) of—\n“(A) the amount determined under section 412(c)(7)(A)(ii), over\n“(B) the greater of—\n“(i) the amount determined under section 412(c)(7)(A)(i), or\n“(ii) 125 percent of current liability (as defined in section 412(c)(7)(B)).\nThe determination under this paragraph shall be made as of the most recent valuation date of the plan preceding the qualified transfer.”\nSubsec. (e)(4).  Pub. L. 109–280, §\u202f114(d)(2) , amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “In the case of a qualified transfer to a health benefits account—\n“(A) any assets transferred in a plan year on or before the valuation date for such year (and any income allocable thereto) shall, for purposes of section 412, be treated as assets in the plan as of the valuation date for such year, and\n“(B) the plan shall be treated as having a net experience loss under section 412(b)(2)(B)(iv) in an amount equal to the amount of such transfer (reduced by any amounts transferred back to the pension plan under subsection (c)(1)(B)) and for which amortization charges begin for the first plan year after the plan year in which such transfer occurs, except that such section shall be applied to such amount by substituting ‘10 plan years’ for ‘5 plan years’.”\nSubsec. (e)(5).  Pub. L. 109–280, §\u202f842(a)(2) , added par. (5).\nSubsec. (f).  Pub. L. 109–280, §\u202f841(a) , added subsec. (f).\n2004—Subsec. (b)(5).  Pub. L. 108–218  substituted “2013” for “2005”.\nSubsec. (c)(3)(E).  Pub. L. 108–357  designated existing provisions as cl. (i), inserted heading, and added cl. (ii).\n1999—Subsec. (b)(1)(C)(iii).  Pub. L. 106–170, §\u202f535(b)(2)(A) , substituted “cost” for “benefits”.\nSubsec. (b)(5).  Pub. L. 106–170, §\u202f535(a)(1) , substituted “made after  December 31, 2005 ” for “in any taxable year beginning after  December 31, 2000 ”.\nSubsec. (c)(3).  Pub. L. 106–170, §\u202f535(b)(1) , amended heading and text of par. (3) generally, substituting present provisions for provisions relating to maintenance of benefit requirements.\nSubsec. (e)(1)(D).  Pub. L. 106–170, §\u202f535(b)(2)(B) , substituted “or in calculating applicable employer cost under subsection (c)(3)(B)” for “and shall not be subject to the minimum benefit requirements of subsection (c)(3)”.\n1996— Pub. L. 104–188, §\u202f1704(a) , provided that, except as otherwise expressly provided, whenever in title XII of  Pub. L. 101–508  an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.  Section 12011(a) of title XII of Pub. L. 101–508  directed the amendment of part I of subchapter D of chapter 1 by adding this subpart, including this section, without specifying that amendment was to the Internal Revenue Code of 1986.\nSubsec. (e)(1)(C).  Pub. L. 104–188, §\u202f1704(t)(32) , substituted “means” for “mean”.\n1994—Subsec. (b)(1)(C)(iii).  Pub. L. 103–465, §\u202f731(c)(1) , substituted “benefits” for “cost”.\nSubsec. (b)(5).  Pub. L. 103–465, §\u202f731(a) , substituted “2000” for “1995”.\nSubsec. (c)(3).  Pub. L. 103–465, §\u202f731(b) , amended par. (3) generally, substituting present provisions for provisions outlining minimum cost requirements for plans, providing for elections to compute costs separately, and defining “applicable employer cost” and “cost maintenance period”.\nSubsec. (e)(1)(B).  Pub. L. 103–465, §\u202f731(c)(2) , reenacted subpar. (B) heading without change and amended text generally. Prior to amendment, text read as follows: “The amount determined under subparagraph (A) shall be reduced by any amount previously contributed to a health benefits account or welfare benefit fund (as defined in section 419(e)(1)) to pay for the qualified current retiree health liabilities. The portion of any reserves remaining as of the close of  December 31, 1990 , shall be allocated on a pro rata basis to qualified current retiree health liabilities.”\nSubsec. (e)(1)(D).  Pub. L. 103–465, §\u202f731(c)(3) , substituted “and shall not be subject to the minimum benefit requirements of subsection (c)(3)” for “or in calculating applicable employer cost under subsection (c)(3)(B)”.\nPub. L. 117–328, div. T, title VI, §\u202f606(c) ,  Dec. 29, 2022 ,  136 Stat. 5398 , provided that:  “The amendments made by this section [amending this section and sections 1021, 1103, and 1108 of Title 29, Labor] shall apply to transfers made after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nPub. L. 116–260, div. N, title II, §\u202f285(b) ,  Dec. 27, 2020 ,  134 Stat. 1989 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2019 .”\nAmendment by  Pub. L. 113–97  applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as a note under  section 401 of this title .\nAmendment by  section 40211(a)(2)(D) of Pub. L. 112–141  applicable with respect to plan years beginning after  December 31, 2011 , except as otherwise provided, see  section 40211(c) of Pub. L. 112–141 , set out as a note under  section 404 of this title .\nPub. L. 112–141, div. D, title II, §\u202f40241(c) ,  July 6, 2012 ,  126 Stat. 859 , provided that:  “The amendments made by this Act [probably should be “section”, amending this section and sections 1021, 1103, and 1108 of Title 29, Labor] shall take effect on the date of the enactment of this Act [ July 6, 2012 ].”\nPub. L. 112–141, div. D, title II, §\u202f40242(h) ,  July 6, 2012 ,  126 Stat. 864 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section,  section 79 of this title , and  section 1021 of Title 29 , Labor] shall apply to transfers made after the date of the enactment of this Act [ July 6, 2012 ]. \n \n “(2)   Conforming amendments relating to pension protection act .— The amendments made by subsections (b)(3)(B) and (f) [amending this section] shall take effect as if included in the amendments made by section 841(a) of the Pension Protection Act of 2006 [ Pub. L. 109–280 ].”\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 110–28, title VI, §\u202f6612(c) ,  May 25, 2007 ,  121 Stat. 181 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in the provisions of the Pension Protection Act of 2006 [ Pub. L. 109–280 ] to which they relate.”\nPub. L. 110–28, title VI, §\u202f6613(b) ,  May 25, 2007 ,  121 Stat. 181 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transfers after the date of the enactment of this Act [ May 25, 2007 ].”\nAmendment by  section 114(d) of Pub. L. 109–280  applicable to plan years beginning after 2007, see  section 114(g)(1) of Pub. L. 109–280 , as added by  Pub. L. 110–458 , set out as a note under  section 401 of this title .\nPub. L. 109–280, title VIII, §\u202f841(b) ,  Aug. 17, 2006 ,  120 Stat. 1009 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title VIII, §\u202f842(b) ,  Aug. 17, 2006 ,  120 Stat. 1009 , provided that:  “The amendment made by this section [amending this section] shall apply to transfers made in taxable years beginning after  December 31, 2006 .”\nPub. L. 108–357, title VII, §\u202f709(b)(3) ,  Oct. 22, 2004 ,  118 Stat. 1552 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 106–170, title V, §\u202f535(c) ,  Dec. 17, 1999 ,  113 Stat. 1935 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 1021, 1103, and 1108 of Title 29, Labor] shall apply to qualified transfers occurring after the date of the enactment of this Act [ Dec. 17, 1999 ]. \n \n “(2)   Transition rule .— If the cost maintenance period for any qualified transfer after the date of the enactment of this Act [ Dec. 17, 1999 ] includes any portion of a benefit maintenance period for any qualified transfer on or before such date, the amendments made by subsection (b) [amending this section] shall not apply to such portion of the cost maintenance period (and such portion shall be treated as a benefit maintenance period).”\nPub. L. 103–465, title VII, §\u202f731(d) ,  Dec. 8, 1994 ,  108 Stat. 5004 , provided that: \n “(1)   Extension .— The amendments made by subsections (a) and (c)(3) [amending this section] shall apply to taxable years beginning after  December 31, 1995 . \n \n “(2)   Benefits .— The amendments made by subsections (b) and (c)(1) and (2) [amending this section] shall apply to qualified transfers occurring after the date of the enactment of this Act [ Dec. 8, 1994 ].”\nPub. L. 101–508, title XII, §\u202f12011(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–571 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending  section 401 of this title ] shall apply to transfers in taxable years beginning after  December 31, 1990 . \n \n “(2)   Waiver of estimated tax penalties .— No addition to tax shall be made under section 6654 or section 6655 of the Internal Revenue Code of 1986 for the taxable year preceding the taxpayer’s 1st taxable year beginning after  December 31, 1990 , with respect to any underpayment to the extent such underpayment was created or increased by reason of [former] section 420(b)(4)(B) of such Code (as added by subsection (a)).”\nFor special rules on applicability of amendments by subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN STOCK OPTIONS'},
  'content': 'If the transfer of a share of stock to an individual pursuant to his exercise of an option would otherwise meet the requirements of section 422(a) or 423(a) except that there is a failure to meet any of the holding period requirements of section 422(a)(1) or 423(a)(1), then any increase in the income of such individual or deduction from the income of his employer corporation for the taxable year in which such exercise occurred attributable to such disposition, shall be treated as an increase in income or a deduction from income in the taxable year of such individual or of such employer corporation in which such disposition occurred. No amount shall be required to be deducted and withheld under chapter 24 with respect to any increase in income attributable to a disposition described in the preceding sentence.\nIf an amount is required to be included under section 423(c) in gross income of the estate of the deceased employee or of a person described in paragraph (1), there shall be allowed to the estate or such person a deduction with respect to the estate tax attributable to the inclusion in the taxable estate of the deceased employee of the net value for estate tax purposes of the option. For this purpose, the deduction shall be determined under section 691(c) as if the option acquired from the deceased employee were an item of gross income in respect of the decedent under section 691 and as if the amount includible in gross income under section 423(c) were an amount included in gross income under section 691 in respect of such item of gross income.\n2004—Subsec. (b).  Pub. L. 108–357, §\u202f251(b) , inserted at end “No amount shall be required to be deducted and withheld under chapter 24 with respect to any increase in income attributable to a disposition described in the preceding sentence.”\nSubsec. (d).  Pub. L. 108–357, §\u202f905(a) , added subsec. (d).\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(i)(I) , substituted “422(a) or 423(a)” for “422(a), 422A(a), 423(a), or 424(a)” in introductory provisions.\nSubsec. (a)(1).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(i)(II) , struck out “except as provided in section 422(c)(1),” before “no income”.\nSubsec. (a)(2).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(i)(III) , substituted “424(a)” for “425(a)”.\nSubsec. (b).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(ii) , substituted “422(a) or 423(a)” for “422(a), 422A(a), 423(a), or 424(a)” and “422(a)(1) or 423(a)(1),” for “422(a)(1), 422A(a)(1), 423(a)(1), or 424(a)(1),”.\nSubsec. (c)(1)(A).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(iii)(I) , substituted “422(a) and 423(a)” for “422(a), 422A(a), 423(a), and 424(a)”.\nSubsec. (c)(1)(B).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(iii)(II) , substituted “section 423(c)” for “sections 423(c) and 424(c)(1)”.\nSubsec. (c)(2), (3)(A).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(iii)(III) , substituted “423(c)” for “422(c)(1), 423(c), or 424(c)(1)” wherever appearing.\nSubsec. (c)(3)(B).  Pub. L. 101–508, §\u202f11801(c)(9)(B)(iii)(IV) , (V), substituted “section 423(c)” for “sections 422(c)(1), 423(c), and 424(c)(1)” and “such section” for “such sections”.\n1981—Subsecs. (a), (b), (c)(1)(A).  Pub. L. 97–34  inserted references to section 422A(a) in subsecs. (a), (b), and (c)(1)(A) and to section 422A(a)(1) in subsec. (b).\n1964— Pub. L. 88–272  amended section generally, and among other changes, inserted provisions relating to the effect of a qualifying transfer, and to the basis of shares acquired when an option is exercised by an estate, and omitted provisions relating to treatment of restricted stock options, a special rule where option price was between 85 percent and 95 percent of value of stock, acquisition of new stock, definitions, modification, extension, or renewal of option, and corporate reorganizations, liquidations, etc. See sections 421 to 425 of this title.\n1958—Subsec. (a).  Pub. L. 85–866, §\u202f25 , inserted sentence authorizing substitution of “grantor corporation” or “corporation issuing or assuming a stock option in a transaction to which subsection (g) is applicable” for “employer corporation”.\nSubsec. (d)(6)(C).  Pub. L. 85–320  added subpar. (C).\nSubsec. (d)(1)(A)(ii).  Pub. L. 85–866, §\u202f26(a)(1) , substituted “in the case of a variable price option” for “in case the purchase price of the stock under the option is fixed or determinable under a formula in which the only variable is the value of the stock at any time during a period of 6 months which includes the time the option is exercised” and inserted “fair” before “market value”.\nSubsec. (d)(7).  Pub. L. 85–866, §\u202f26(a)(2) , added par. (7).\nPub. L. 108–357, title II, §\u202f251(d) ,  Oct. 22, 2004 ,  118 Stat. 1459 , provided that:  “The amendments made by this section [amending this section, sections 423, 3121, 3231, and 3306 of this title, and  section 409 of Title 42 , The Public Health and Welfare] shall apply to stock acquired pursuant to options exercised after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title VIII, §\u202f905(b) ,  Oct. 22, 2004 ,  118 Stat. 1653 , provided that:  “The amendment made by this section [amending this section] shall apply to sales after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 97–34  applicable with respect to options granted on or after  Jan. 1, 1976 , and exercised on or after  Jan. 1, 1981 , or outstanding on  Jan. 1, 1981 , or granted on or after  Jan. 1, 1976 , and outstanding  Aug. 13, 1981 , see  section 251(c) of Pub. L. 97–34 , set out as an Effective Date note under  section 422 of this title .\nPub. L. 88–272, title II, §\u202f221(e) ,  Feb. 26, 1964 ,  78 Stat. 75 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as provided in paragraphs (2) and (3), the amendments made by this section [enacting sections 422 to 425 and 6039, amending this section, sections 402, 691, 6652, 6678, and the analysis preceding sections 401 and 6031, and renumbering section 3039 as 3040 of this title] shall apply to taxable years ending after  December 31, 1963 . \n \n “(2)  The amendments made by paragraphs (1) and (3) of subsection (b) [enacting section 3039, renumbering former section 3039 as 3040, and amending  section 6678 of this title ] and paragraph (2) of section 6652(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by paragraph (2) of subsection (b)), shall apply to stock transferred pursuant to options exercised on or after  January 1, 1964 . \n \n “(3)  In the case of an option granted after  December 31, 1963 , and before  January 1, 1965 — “(A)  paragraphs (1) and (2) of section 422(b) of the Internal Revenue Code of 1986 (as added by subsection (a)), shall not apply, and \n \n “(B)  paragraph (1) of section 425(h) of such Code (as added by subsection (a)), shall not apply to any change in the terms of such option made before  January 1, 1965 , to permit such option to qualify under paragraphs (3), (4), and (5) of such section 422(b).”\nAmendment by  section 25 of Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title I, §\u202f26(b) ,  Sept. 2, 1958 ,  72 Stat. 1624 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  September 30, 1958 .”\nPub. L. 85–320, §\u202f3 ,  Feb. 11, 1958 ,  72 Stat. 5 , provided that:  “The amendments made by this Act [amending this section and  section 1014 of this title ] shall apply with respect to taxable years ending after  December 31, 1956 , but only in the case of employees dying after such date.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN STOCK OPTIONS'},
  'content': 'If a share of stock is transferred pursuant to the exercise by an individual of an option which would fail to qualify as an incentive stock option under subsection (b) because there was a failure in an attempt, made in good faith, to meet the requirement of subsection (b)(4), the requirement of subsection (b)(4) shall be considered to have been met. To the extent provided in regulations by the Secretary, a similar rule shall apply for purposes of subsection (d).\nIf an insolvent individual holds a share of stock acquired pursuant to his exercise of an incentive stock option, and if such share is transferred to a trustee, receiver, or other similar fiduciary in any proceeding under title 11 or any other similar insolvency proceeding, neither such transfer, nor any other transfer of such share for the benefit of his creditors in such proceeding, shall constitute a disposition of such share for purposes of subsection (a)(1).\nSubsection (b)(6) shall not apply if at the time such option is granted the option price is at least 110 percent of the fair market value of the stock subject to the option and such option by its terms is not exercisable after the expiration of 5 years from the date such option is granted.\nFor purposes of subsection (a)(2), in the case of an employee who is disabled (within the meaning of section 22(e)(3)), the 3-month period of subsection (a)(2) shall be 1 year.\nFor purposes of this section, the fair market value of stock shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse.\nTo the extent that the aggregate fair market value of stock with respect to which incentive stock options (determined without regard to this subsection) are exercisable for the 1st time by any individual during any calendar year (under all plans of the individual’s employer corporation and its parent and subsidiary corporations) exceeds $100,000, such options shall be treated as options which are not incentive stock options.\nParagraph (1) shall be applied by taking options into account in the order in which they were granted.\nFor purposes of paragraph (1), the fair market value of any stock shall be determined as of the time the option with respect to such stock is granted.\nA prior section 422, added  Pub. L. 88–272, title II, §\u202f221(a) ,  Feb. 26, 1964 ,  78 Stat. 64 ; amended  Pub. L. 94–455, title VI, §\u202f603(a) , (b), title XIX, §\u202f1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1574 , 1834;  Pub. L. 96–589, §\u202f6(i)(3) ,  Dec. 24, 1980 ,  94 Stat. 3410 , related to qualified stock options, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11801(a)(20) ,  Nov. 5, 1990 ,  104 Stat. 1388–521 . For savings provision, see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\n2017—Subsec. (b).  Pub. L. 115–97  inserted at end of concluding provisions “Such term shall not include any option if an election is made under section 83(i) with respect to the stock received in connection with the exercise of such option.”\n1990— Pub. L. 101–508, §\u202f11801(c)(9)(A)(i) , renumbered  section 422A of this title  as this section.\nSubsec. (a)(2).  Pub. L. 101–508, §\u202f11801(c)(9)(C)(i) , substituted “424(a)” for “425(a)”.\nSubsec. (c)(5) to (8).  Pub. L. 101–508, §\u202f11801(c)(9)(C)(ii) , redesignated pars. (6) to (8) as (5) to (7), respectively, and struck out former par. (5) “Coordination with sections 422 and 424” which read as follows: “Sections 422 and 424 shall not apply to an incentive stock option.”\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1003(d)(1)(A) , inserted at end “Such term shall not include any option if (as of the time the option is granted) the terms of such option provide that it will not be treated as an incentive stock option.”\nSubsec. (b)(7).  Pub. L. 100–647, §\u202f1003(d)(2)(B) , struck out par. (7) which read as follows: “under the terms of the plan, the aggregate fair market value (determined at the time the option is granted) of the stock with respect to which incentive stock options are exercisable for the 1st time by such individual during any calendar year (under all such plans of the individual’s employer corporation and its parent and subsidiary corporations) shall not exceed $100,000.”\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f1003(d)(2)(C) , substituted “subsection (d)” for “paragraph (7) of subsection (b)”.\nSubsec. (d).  Pub. L. 100–647, §\u202f1003(d)(2)(A) , added subsec. (d).\n1986—Subsec. (b)(7).  Pub. L. 99–514, §\u202f321(a) , added par. (7) and struck out former par. (7) which read as follows: “such option by its terms is not exercisable while there is outstanding (within the meaning of subsection (c)(7)) any incentive stock option which was granted, before the granting of such option, to such individual to purchase stock in his employer corporation or in a corporation which (at the time of the granting of such option) is a parent or subsidiary corporation of the employer corporation, or in a predecessor corporation of any of such corporations; and”.\nSubsec. (b)(8).  Pub. L. 99–514, §\u202f321(a) , struck out par. (8) which read as follows: “in the case of an option granted after  December 31, 1980 , under the terms of the plan the aggregate fair market value (determined as of the time the option is granted) of the stock for which any employee may be granted incentive stock options in any calendar year (under all such plans of his employer corporation and its parent and subsidiary corporation) shall not exceed $100,000 plus any unused limit carryover to such year.”\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f321(b)(2) , substituted “paragraph (7) of subsection (b)” for “paragraph (8) of subsection (b) and paragraph (4) of this subsection”.\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f321(b)(1) , redesignated par. (5) as (4) and struck out former par. (4) relating to carryover of unused limit.\nSubsec. (c)(5), (6).  Pub. L. 99–514, §\u202f321(b)(1)(B) , redesignated pars. (6) and (8) as (5) and (6), respectively. Former par. (5) redesignated (4).\nSubsec. (c)(7).  Pub. L. 99–514, §\u202f321(b)(1) , redesignated par. (9) as (7) and struck out former par. (7) which provided that for purposes of subsec. (b)(7) any incentive stock option be treated as outstanding until such option was exercised in full or expired by reason of lapse of time.\nSubsec. (c)(8).  Pub. L. 99–514, §\u202f321(b)(1)(B) , redesignated par. (10) as (8). Former par. (8) redesignated (6).\nSubsec. (c)(9).  Pub. L. 99–514, §\u202f321(b)(1)(B) , redesignated par. (9) as (7).\nPub. L. 99–514, §\u202f1847(b)(5) , substituted “section 22(e)(3)” for “section 37(e)(3)”.\nSubsec. (c)(10).  Pub. L. 99–514, §\u202f321(b)(1)(B) , redesignated par. (10) as (8).\n1984—Subsec. (c)(9).  Pub. L. 98–369, §\u202f2662(f)(1) , substituted “section 37(e)(3)” for “section 105(d)(4)”.\nSubsec. (c)(10).  Pub. L. 98–369, §\u202f555(a)(1) , added par. (10).\n1983—Subsec. (b)(8).  Pub. L. 97–448, §\u202f102(j)(1) , substituted “granted incentive stock options” for “granted options”.\nSubsec. (c)(1).  Pub. L. 97–448, §\u202f102(j)(2) , substituted “Good faith efforts to value stock” for “Exercise of option when price is less than value of stock” as par. (1) heading and inserted sentence providing that, to the extent provided in regulations by the Secretary, a rule similar to that already enunciated in the paragraph applies for purposes of par. (8) of subsec. (b) and par. (4) of subsec. (c).\nSubsec. (c)(2)(A).  Pub. L. 97–448, §\u202f102(j)(3) , substituted “either of the periods” for “the 2-year period”.\nSubsec. (c)(4)(A)(ii).  Pub. L. 97–448, §\u202f102(j)(4) , substituted “granted incentive stock options” for “granted options”.\nAmendment by  Pub. L. 115–97  applicable to stock attributable to options exercised, or restricted stock units settled, after  Dec. 31, 2017 , see  section 13603(f)(1) of Pub. L. 115–97 , set out as a note under  section 83 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title III, §\u202f321(c) ,  Oct. 22, 1986 ,  100 Stat. 2220 , provided that:  “The amendments made by this section [amending this section] shall apply to options granted after  December 31, 1986 .”\nAmendment by  section 1847(b)(5) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title V, §\u202f555(c)(1) ,  July 18, 1984 ,  98 Stat. 898 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1855(a)(1) ,  Oct. 22, 1986 ,  100 Stat. 2882 , provided that:  “The amendment made by subsection (a)(1) [amending this section] shall apply to options granted after  March 20, 1984 , except that such subsection shall not apply to any incentive stock option granted before  September 20, 1984 , pursuant to a plan adopted or corporate action taken by the board of directors of the grantor corporation before  May 15, 1984 .”\nAmendment by  section 2662 of Pub. L. 98–369  effective as though included in the enactment of the Social Security Amendments of 1983,  Pub. L. 98–21 , see  section 2664(a) of Pub. L. 98–369 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title II, §\u202f251(c) ,  Aug. 13, 1981 ,  95 Stat. 259 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Options to which section applies.— “(A)   In general.— Except as provided in subparagraph (B), the amendments made by this section [enacting this section and amending sections 421, 425 [now 424], and 6039 of this title] shall apply with respect to options granted on or after  January 1, 1976 , and exercised on or after  January 1, 1981 , or outstanding on such date. \n \n “(B)   Election and designation of options.— In the case of an option granted before  January 1, 1981 , the amendments made by this section shall apply only if the corporation granting such option elects (in the manner and at the time prescribed by the Secretary of the Treasury or his delegate) to have the amendments made by this section apply to such option. The aggregate fair market value (determined at the time the option is granted) of the stock for which any employee was granted options (under all plans of his employer corporation and its parent and subsidiary corporations) to which the amendments made by this section apply by reason of this subparagraph shall not exceed $50,000 per calendar year ans shall not exceed $200,000 in the aggregate. \n \n \n “(2)   Changes in terms of options.— In the case of an option granted on or after  January 1, 1976 , and outstanding on the date of the enactment of this Act [ Aug. 13, 1981 ], paragraph (1) of section 425(h) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall not apply to any change in the terms of such option (or the terms of the plan under which granted, including shareholder approval) made within 1 year after such date of enactment to permit such option to qualify as a incentive stock option.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1003(d)(1)(B) ,  Nov. 10, 1988 ,  102 Stat. 3384 , provided that:  “In the case of an option granted after  December 31, 1986 , and on or before the date of the enactment of this Act [ Nov. 10, 1988 ], such option shall not be treated as an incentive stock option if the terms of such option are amended before the date 90 days after such date of enactment to provide that such option will not be treated as an incentive stock option.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN STOCK OPTIONS'},
  'content': 'An option for which an election is made under section 83(i) with respect to the stock received in connection with its exercise shall not be considered as granted pursuant an employee stock purchase plan.\n2017—Subsec. (b)(5).  Pub. L. 115–97, §\u202f13603(c)(1)(B)(i) , struck out “and” before “the plan may provide” and inserted “,\u2000and the rules of section 83(i) shall apply in determining which employees have a right to make an election under such section” before semicolon at end.\nSubsec. (d).  Pub. L. 115–97, §\u202f13603(c)(1)(B)(ii) , added subsec. (d).\n2014—Subsec. (a).  Pub. L. 113–295  struck out “after  December 31, 1963 ,” after “option granted” in introductory provisions.\n2004—Subsec. (c).  Pub. L. 108–357  inserted at end of concluding provisions “No amount shall be required to be deducted and withheld under chapter 24 with respect to any amount treated as compensation under this subsection.”\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f11801(c)(9)(D)(i) , struck out “(other than a restricted stock option granted pursuant to a plan described in section 424(c)(3)(B))” after “ December 31, 1963 ”.\nSubsec. (a)(2).  Pub. L. 101–508, §\u202f11801(c)(9)(D)(ii) , substituted “424(a)” for “425(a)”.\nSubsec. (b)(3).  Pub. L. 101–508, §\u202f11801(c)(9)(E) , substituted “424(d)” for “425(d)”.\n1986—Subsec. (b)(4)(D).  Pub. L. 99–514  substituted “highly compensated employees (within the meaning of section 414(q))” for “officers, persons whose principal duties consist of supervising the work of other employees, or highly compensated employees”.\n1984—Subsec. (a)(1).  Pub. L. 98–369  substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(E) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nAmendment by  Pub. L. 115–97  applicable to stock attributable to options exercised, or restricted stock units settled, after  Dec. 31, 2017 , see  section 13603(f)(1) of Pub. L. 115–97 , set out as a note under  section 83 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to stock acquired pursuant to options exercised after  Oct. 22, 2004 , see  section 251(d) of Pub. L. 108–357 , set out as a note under  section 421 of this title .\nAmendment by  Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1114(c)(1) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nSection applicable to taxable years ending after  Dec. 31, 1963 , see  section 221(e) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 421 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN STOCK OPTIONS'},
  'content': 'For purposes of this part, if stock is received by an individual in a distribution to which section 305, 354, 355, 356, or 1036 (or so much of section 1031 as relates to section 1036) applies, and such distribution was made with respect to stock transferred to him upon his exercise of the option, such stock shall be considered as having been transferred to him on his exercise of such option. A similar rule shall be applied in the case of a series of such distributions.\nThe acquisition of a share of stock in the name of the employee and another jointly with the right of survivorship or a subsequent transfer of a share of stock into such joint ownership shall not be deemed a disposition, but a termination of such joint tenancy (except to the extent such employee acquires ownership of such stock) shall be treated as a disposition by him occurring at the time such joint tenancy is terminated.\nFor purpose of subparagraph (A), the term “statutory option stock” means any stock acquired through the exercise of an incentive stock option or an option granted under an employee stock purchase plan.\nFor purposes of this part, the term “parent corporation” means any corporation (other than the employer corporation) in an unbroken chain of corporations ending with the employer corporation if, at the time of the granting of the option, each of the corporations other than the employer corporation owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.\nFor purposes of this part, the term “subsidiary corporation” means any corporation (other than the employer corporation) in an unbroken chain of corporations beginning with the employer corporation if, at the time of the granting of the option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.\nIn applying subsections (e) and (f) for purposes of sections 422(a)(2) and 423(a)(2), there shall be substituted for the term “employer corporation” wherever it appears in subsections (e) and (f) the term “grantor corporation” or the term “corporation issuing or assuming a stock option in a transaction to which section 424(a) applies”, as the case may be.\nFor purposes of this part, if the terms of any option to purchase stock are modified, extended, or renewed, such modification, extension, or renewal shall be considered as the granting of a new option.\nFor purposes of this part, if the grant of an option is subject to approval by stockholders, the date of grant of the option shall be determined as if the option had not been subject to such approval.\nFor provisions requiring the reporting of certain acts with respect to a qualified stock option, an incentive stock option, options granted under employer stock purchase plans, or a restricted stock option, see section 6039.\nA prior section 424, added  Pub. L. 88–272, title II, §\u202f221(a) ,  Feb. 26, 1964 ,  78 Stat. 69 ; amended  Pub. L. 94–455, title VI, §\u202f603(c) , title XIV, §\u202f1402(b)(1)(F), (2),  Oct. 4, 1976 ,  90 Stat. 1574 , 1732, related to restricted stock options, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11801(a)(21) ,  Nov. 5, 1990 ,  104 Stat. 1388–521 . For savings provisions, see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\n2018—Subsec. (g).  Pub. L. 115–141  substituted “sections 422(a)(2)” for “section 422(a)(2)”.\n1996—Subsec. (c)(3)(B).  Pub. L. 104–188  substituted “an incentive stock option or an option granted under an employee stock purchase plan” for “a qualified stock option, an incentive stock option, an option granted under an employee stock purchase plan, or a restricted stock option”.\n1990— Pub. L. 101–508, §\u202f11801(c)(9)(A)(i) , renumbered  section 425 of this title  as this section.\nSubsec. (a).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(i) , substituted “424(a)” for “425(a)”.\nSubsec. (c)(3)(A)(ii).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(ii) , substituted “422(a)(1) or 423(a)(1)” for “422(a)(1), 422A(a)(1), 423(a)(1), or 424(a)(1)”.\nSubsec. (d).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(iii) , substituted “422(b)(6) and 423(b)(3)” for “422(b)(7), 422A(b)(6), 423(b)(3), and 424(b)(3)”.\nSubsec. (g).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(iv) , substituted “422(a)(2) and 423(a)(2)” for “422(a)(2), 422A(a)(2), 423(a)(2), and 424(a)(2)” and “424(a)” for “425(a)”.\nSubsec. (h)(2).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(v)(I) , added par. (2) and struck out former par. (2) which related to special rules for sections 423 and 424 options and to an exception that such rules would not apply with respect to a modification, extension or renewal of a restricted stock option before  Jan. 1, 1964 , if the aggregate of the monthly fair market value for 12 consecutive months before date of modification, etc., divided by 12 is an amount less than 80% of the fair market value of such stock on the date of original granting or the date of modification, etc., whichever is higher.\nSubsec. (h)(3).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(v)(III) , struck out at end “If a restricted stock option is exercisable after the expiration of 10 years from the date such option is granted, subparagraph (B) shall not apply unless the terms of the option are also changed to make it not exercisable after the expiration of such period.”\nSubsec. (h)(3)(B).  Pub. L. 101–508, §\u202f11801(c)(9)(F)(v)(II) , substituted “section 423(b)(9)” for “sections 422(b)(6), 423(b)(9), and 424(b)(2)”.\n1989—Subsec. (c)(1).  Pub. L. 101–239  made technical correction to  Pub. L. 100–647, §\u202f1018 ( l )(2), see 1988 Amendment note below.\n1988—Subsec. (c)(1).  Pub. L. 100–647, §\u202f1018 ( l )(2), as amended by  Pub. L. 101–239 , substituted “paragraphs (2), (3), and (4)” for “paragraphs (2) and (3)”.\nSubsec. (c)(4).  Pub. L. 100–647, §\u202f1018 ( l )(1), added par. (4).\n1984—Subsec. (h)(3)(B).  Pub. L. 98–369  struck out reference to section 422A(b)(5).\n1983—Subsec. (c)(1).  Pub. L. 97–448, §\u202f102(j)(6)(B) , substituted “paragraphs (2) and (3)” for “paragraph (2)”.\nSubsec. (c)(3).  Pub. L. 97–448, §\u202f102(j)(6)(A) , added par. (3).\nSubsec. (j).  Pub. L. 97–448, §\u202f102(j)(5) , inserted reference to an incentive stock option.\n1981—Subsec. (d).  Pub. L. 97–34, §\u202f251(b)(2) , inserted reference to section 422A(b)(6).\nSubsec. (g).  Pub. L. 97–34, §\u202f251(b)(3) , inserted reference to section 422A(a)(2).\nSubsec. (h)(3)(B).  Pub. L. 97–34, §\u202f251(b)(4) , inserted reference to section 422A(b)(5).\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 98–369, div. A, title V, §\u202f555(c)(3) ,  July 18, 1984 ,  98 Stat. 898 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1855(a)(4) ,  Oct. 22, 1986 ,  100 Stat. 2882 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply with respect to modifications of options after  March 20, 1984 .”\nPub. L. 97–448, title I, §\u202f102(j)(6) ,  Jan. 12, 1983 ,  96 Stat. 2373 , provided that the amendment made by that section is effective only with respect to transfers after  March 15, 1982 .\nAmendment by  section 102(j)(5) of title I of Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to options granted on or after  Jan. 1, 1976 , and exercised on or after  Jan. 1, 1981 , or outstanding on  Jan. 1, 1981 , or granted on or after  Jan. 1, 1976 , and outstanding  Aug. 13, 1981 , see  section 251(c) of Pub. L. 97–34 , set out as an Effective Date note under  section 422 of this title .\nSection applicable to taxable years ending after  Dec. 31, 1963 , except in cases of options granted after  Dec. 31, 1963 , and before  Jan. 1, 1965 , in which case par. (1) of subsec. (h) shall not apply to any change in the terms of such option made before  Jan. 1, 1965 , to permit such option to qualify under pars. (3), (4), and (5) of section 422(b), see  section 221(e) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 421 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT LIMITATIONS'},
  'content': 'For purposes of this subsection, if any benefit attributable to services performed in a preceding plan year is increased by reason of any increase in compensation during the current plan year, the increase in such benefit shall be treated as having accrued during the current plan year.\nFor purposes of this section, the shortfall amortization charge for a plan for any plan year is the aggregate total (not less than zero) of the shortfall amortization installments for such plan year with respect to any shortfall amortization base which has not been fully amortized under this subsection.\nThe shortfall amortization installments are the amounts necessary to amortize the shortfall amortization base of the plan for any plan year in level annual installments over the 7-plan-year period beginning with such plan year.\nThe shortfall amortization installment for any plan year in the 7-plan-year period under subparagraph (A) with respect to any shortfall amortization base is the annual installment determined under subparagraph (A) for that year for that base.\nIn determining any shortfall amortization installment under this paragraph, the plan sponsor shall use the segment rates determined under subparagraph (C) of subsection (h)(2), applied under rules similar to the rules of subparagraph (B) of subsection (h)(2).\nThe shortfall amortization installments determined under this subparagraph are the amounts necessary to amortize the shortfall amortization base of the plan for the election year in level annual installments over the 15-plan-year period beginning with the election year (using the segment rates under subparagraph (C) for the election year).\nThe plan sponsor of a plan may elect to have this subparagraph apply to not more than 2 eligible plan years with respect to the plan, except that in the case of a plan described in section 106 of the Pension Protection Act of 2006, the plan sponsor may only elect to have this subparagraph apply to a plan year beginning in 2011.\nSuch election shall specify whether the amortization schedule under clause (ii) or (iii) shall apply to an election year, except that if a plan sponsor elects to have this subparagraph apply to 2 eligible plan years, the plan sponsor must elect the same schedule for both years.\nSuch election shall be made at such time, and in such form and manner, as shall be prescribed by the Secretary, and may be revoked only with the consent of the Secretary. The Secretary shall, before granting a revocation request, provide the Pension Benefit Guaranty Corporation an opportunity to comment on the conditions applicable to the treatment of any portion of the election year shortfall amortization base that remains unamortized as of the revocation date.\nFor purposes of this subparagraph, the term “eligible plan year” means any plan year beginning in 2008, 2009, 2010, or 2011, except that a plan year shall only be treated as an eligible plan year if the due date under subsection (j)(1) for the payment of the minimum required contribution for such plan year occurs on or after the date of the enactment of this subparagraph.\nFor increases in required contributions in cases of excess compensation or extraordinary dividends or stock redemptions, see paragraph (7).\nIn any case in which the value of plan assets of the plan (as reduced under subsection (f)(4)(A)) is equal to or greater than the funding target of the plan for the plan year, the shortfall amortization base of the plan for such plan year shall be zero.\nIn any case in which the funding shortfall of a plan for a plan year is zero, for purposes of determining the shortfall amortization charge for such plan year and succeeding plan years, the shortfall amortization bases for all preceding plan years (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero.\nIf there is an installment acceleration amount with respect to a plan for any plan year in the restriction period with respect to an election year under paragraph (2)(D), then the shortfall amortization installment otherwise determined and payable under such paragraph for such plan year shall, subject to the limitation under subparagraph (B), be increased by such amount.\nIf the installment acceleration amount for any plan year (determined without regard to clause (ii)) exceeds the limitation under clause (ii), then, subject to subclause (II), such excess shall be treated as an installment acceleration amount with respect to the succeeding plan year.\nIf any amount treated as an installment acceleration amount under subclause (I) or this subclause with respect any succeeding plan year, when added to other installment acceleration amounts (determined without regard to clause (ii)) with respect to the plan year, exceeds the limitation under clause (ii), the portion of such amount representing such excess shall be treated as an installment acceleration amount with respect to the next succeeding plan year.\nNo amount shall be carried under subclause (I) or (II) to a plan year which begins after the first plan year following the last plan year in the restriction period (or after the second plan year following such last plan year in the case of an election year with respect to which 15-year amortization was elected under paragraph (2)(D)).\nFor purposes of applying subclause (II), installment acceleration amounts for the plan year (determined without regard to any carryover under this clause) shall be applied first against the limitation under clause (ii) and then carryovers to such plan year shall be applied against such limitation on a first-in, first-out basis.\nIf during any calendar year assets are set aside or reserved (directly or indirectly) in a trust (or other arrangement as determined by the Secretary), or transferred to such a trust or other arrangement, by a plan sponsor for purposes of paying deferred compensation of an employee under a nonqualified deferred compensation plan (as defined in section 409A) of the plan sponsor, then, for purposes of clause (i), the amount of such assets shall be treated as remuneration of the employee includible in income for the calendar year unless such amount is otherwise includible in income for such year. An amount to which the preceding sentence applies shall not be taken into account under this paragraph for any subsequent calendar year.\nRemuneration shall be taken into account under clause (i) only to the extent attributable to services performed by the employee for the plan sponsor after  February 28, 2010 .\nThere shall not be taken into account under clause (i)(I) any amount includible in income with respect to the granting after  February 28, 2010 , of service recipient stock (within the meaning of section 409A) that, upon such grant, is subject to a substantial risk of forfeiture (as defined under section 83(c)(1)) for at least 5 years from the date of such grant.\nThe Secretary may by regulation provide for the application of this clause in the case of a person other than a corporation.\nAny remuneration payable on a commission basis solely on account of income directly generated by the individual performance of the individual to whom such remuneration is payable.\nAny remuneration consisting of nonqualified deferred compensation, restricted stock, stock options, or stock appreciation rights payable or granted under a written binding contract that was in effect on  March 1, 2010 , and which was not modified in any material respect before such remuneration is paid.\nThe term “employee” includes, with respect to a calendar year, a self-employed individual who is treated as an employee under section 401(c) for the taxable year ending during such calendar year, and the term “compensation” shall include earned income of such individual with respect to such self-employment.\nFor purposes of clause (i), there shall only be taken into account dividends declared, and redemptions occurring, after  February 28, 2010 .\nDividends paid by one member of a controlled group (as defined in section 412(d)(3)) to another member of such group shall not be taken into account under clause (i).\nRedemptions that are made pursuant to a plan maintained with respect to employees, or that are made on account of the death, disability, or termination of employment of an employee or shareholder, shall not be taken into account under clause (i).\nDividends and redemptions with respect to applicable preferred stock shall not be taken into account under clause (i) to the extent that dividends accrue with respect to such stock at a specified rate in all events and without regard to the plan sponsor’s income, and interest accrues on any unpaid dividends with respect to such stock.\nFor purposes of subclause (I), the term “applicable preferred stock” means preferred stock which was issued before  March 1, 2010  (or which was issued after such date and is held by an employee benefit plan subject to the provisions of title I of the Employee Retirement Income Security Act of 1974).\nThe term “plan sponsor” includes any member of the plan sponsor’s controlled group (as defined in section 412(d)(3)).\nIf a plan sponsor makes elections under paragraph (2)(D) with respect to 2 or more plans, the Secretary shall provide rules for the application of this paragraph to such plans, including rules for the ratable allocation of any installment acceleration amount among such plans on the basis of each plan’s relative reduction in the plan’s shortfall amortization installment for the first plan year in the amortization period described in subparagraph (A) (determined without regard to this paragraph).\nThe Secretary shall prescribe rules for the application of paragraph (2)(D) and this paragraph in any case where there is a merger or acquisition involving a plan sponsor making the election under paragraph (2)(D).\nExcept as provided in subsection (i)(1) with respect to plans in at-risk status, the funding target of a plan for a plan year is the present value of all benefits accrued or earned under the plan as of the beginning of the plan year.\nThe waiver amortization charge (if any) for a plan for any plan year is the aggregate total of the waiver amortization installments for such plan year with respect to the waiver amortization bases for each of the 5 preceding plan years.\nThe waiver amortization installments are the amounts necessary to amortize the waiver amortization base of the plan for any plan year in level annual installments over a period of 5 plan years beginning with the succeeding plan year.\nThe waiver amortization installment for any plan year in the 5-year period under subparagraph (A) with respect to any waiver amortization base is the annual installment determined under subparagraph (A) for that year for that base.\nIn determining any waiver amortization installment under this subsection, the plan sponsor shall use the segment rates determined under subparagraph (C) of subsection (h)(2), applied under rules similar to the rules of subparagraph (B) of subsection (h)(2).\nThe waiver amortization base of a plan for a plan year is the amount of the waived funding deficiency (if any) for such plan year under section 412(c).\nIn any case in which the funding shortfall of a plan for a plan year is zero, for purposes of determining the waiver amortization charge for such plan year and succeeding plan years, the waiver amortization bases for all preceding plan years (and all waiver amortization installments determined with respect to such bases) shall be reduced to zero.\nThe plan sponsor of a defined benefit plan which is not a multiemployer plan may elect to maintain a prefunding balance.\nIn the case of a defined benefit plan (other than a multiemployer plan) described in clause (ii), the plan sponsor may elect to maintain a funding standard carryover balance, until such balance is reduced to zero.\nExcept as provided in subparagraphs (B) and (C), in the case of any plan year in which the plan sponsor elects to credit against the minimum required contribution for the current plan year all or a portion of the prefunding balance or the funding standard carryover balance for the current plan year (not in excess of such minimum required contribution), the minimum required contribution for the plan year shall be reduced as of the first day of the plan year by the amount so credited by the plan sponsor. For purposes of the preceding sentence, the minimum required contribution shall be determined after taking into account any waiver under section 412(c).\nTo the extent that any plan has a funding standard carryover balance greater than zero, no amount of the prefunding balance of such plan may be credited under this paragraph in reducing the minimum required contribution.\nThis subparagraph shall not apply to any plan unless such plan is maintained exclusively by one or more organizations described in section 501(c)(3).\nFor purposes of subsection (c)(5), the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance, but only if an election under paragraph (3) applying any portion of the prefunding balance in reducing the minimum required contribution is in effect for the plan year.\nFor purposes of subsections (a), (c)(4)(B), and (d)(2)(A), the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance and the funding standard carryover balance.\nFor purposes of subsection (c)(4)(B), the value of plan assets shall not be deemed to be reduced for a plan year by the amount of the specified balance if, with respect to such balance, there is in effect for a plan year a binding written agreement with the Pension Benefit Guaranty Corporation which provides that such balance is not available to reduce the minimum required contribution for the plan year. For purposes of the preceding sentence, the term “specified balance” means the prefunding balance or the funding standard carryover balance, as the case may be.\nFor purposes of paragraph (3)(C)(i) of this subsection, the value of plan assets is deemed to be such amount, reduced by the amount of the prefunding balance.\nThe plan sponsor may elect to reduce by any amount the balance of the prefunding balance and the funding standard carryover balance for any plan year (but not below zero). Such reduction shall be effective prior to any determination of the value of plan assets for such plan year under this section and application of the balance in reducing the minimum required contribution for such plan for such plan year pursuant to an election under paragraph (2).\nTo the extent that any plan has a funding standard carryover balance greater than zero, no election may be made under subparagraph (A) with respect to the prefunding balance.\nA prefunding balance maintained by a plan shall consist of a beginning balance of zero, increased and decreased to the extent provided in subparagraphs (B) and (C), and adjusted further as provided in paragraph (8).\nAny excess contributions under clause (i) shall be properly adjusted for interest accruing for the periods between the first day of the current plan year and the dates on which the excess contributions were made, determined by using the effective interest rate for the preceding plan year and by treating contributions as being first used to satisfy the minimum required contribution.\nThe excess described in clause (i) with respect to any preceding plan year shall be reduced (but not below zero) by the amount of contributions an employer would be required to make under subsection (b), (c), or (e) of section 436 to avoid a benefit limitation which would otherwise be imposed under such paragraph for the preceding plan year. Any contribution which may be taken into account in satisfying the requirements of more than 1 of such paragraphs shall be taken into account only once for purposes of this clause.\nA funding standard carryover balance maintained by a plan shall consist of a beginning balance determined under subparagraph (B), decreased to the extent provided in subparagraph (C), and adjusted further as provided in paragraph (8).\nThe beginning balance of the funding standard carryover balance shall be the positive balance described in paragraph (1)(B)(ii)(II).\nIn determining the prefunding balance or the funding standard carryover balance of a plan as of the first day of the plan year, the plan sponsor shall, in accordance with regulations prescribed by the Secretary, adjust such balance to reflect the rate of return on plan assets for the preceding plan year. Notwithstanding subsection (g)(3), such rate of return shall be determined on the basis of fair market value and shall properly take into account, in accordance with such regulations, all contributions, distributions, and other plan payments made during such period.\nElections under this subsection shall be made at such times, and in such form and manner, as shall be prescribed in regulations of the Secretary.\nExcept as otherwise provided under this subsection, all determinations under this section for a plan year shall be made as of the valuation date of the plan for such plan year.\nExcept as provided in subparagraph (B), the valuation date of a plan for any plan year shall be the first day of the plan year.\nIf, on each day during the preceding plan year, a plan had 100 or fewer participants, the plan may designate any day during the plan year as its valuation date for such plan year and succeeding plan years. For purposes of this subparagraph, all defined benefit plans (other than multiemployer plans) maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only participants with respect to such employer or member shall be taken into account.\nIn the case of the first plan year of any plan, subparagraph (B) shall apply to such plan by taking into account the number of participants that the plan is reasonably expected to have on days during such first plan year.\nAny reference in subparagraph (B) to an employer shall include a reference to any predecessor of such employer.\nExcept as provided in subparagraph (B), the value of plan assets shall be the fair market value of the assets.\nFor purposes of this section, the term “effective interest rate” means, with respect to any plan for any plan year, the single rate of interest which, if used to determine the present value of the plan’s accrued or earned benefits referred to in subsection (d)(1), would result in an amount equal to the funding target of the plan for such plan year.\nThe term “first segment rate” means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 5-year period commencing with such month.\nThe term “second segment rate” means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during the 15-year period beginning at the end of the period described in clause (i).\nThe term “third segment rate” means, with respect to any month, the single rate of interest which shall be determined by the Secretary for such month on the basis of the corporate bond yield curve for such month, taking into account only that portion of such yield curve which is based on bonds maturing during periods beginning after the period described in clause (ii).\nIf a segment rate described in clause (i), (ii), or (iii) with respect to any applicable month (determined without regard to this clause) is less than the applicable minimum percentage, or more than the applicable maximum percentage, of the average of the segment rates described in such clause for years in the 25-year period ending with September 30 of the calendar year preceding the calendar year in which the plan year begins, then the segment rate described in such clause with respect to the applicable month shall be equal to the applicable minimum percentage or the applicable maximum percentage of such average, whichever is closest. The Secretary shall determine such average on an annual basis and may prescribe equivalent rates for years in any such 25-year period for which the rates described in any such clause are not available. Notwithstanding anything in this subclause, if the average of the first, second, or third segment rate for any 25-year period is less than 5 percent, such average shall be deemed to be 5 percent.\nFor purposes of subclause (I), the applicable minimum percentage and the applicable maximum percentage for a plan year beginning in a calendar year shall be determined in accordance with the following table: \n \n \n \n \n \n \n \n If the calendar year is: The applicable minimum percentage is: The applicable maximum percentage is: \n \n \n Any year in the period starting in 2012 and ending in 2019 90% 110% \n Any year in the period starting in 2020 and ending in 2030 95% 105% \n 2031 90% 110% \n 2032 85% 115% \n 2033 80% 120% \n 2034 75% 125% \n After 2034 70% 130%.\nThe term “corporate bond yield curve” means, with respect to any month, a yield curve which is prescribed by the Secretary for such month and which reflects the average, for the 24-month period ending with the month preceding such month, of monthly yields on investment grade corporate bonds with varying maturities and that are in the top 3 quality levels available.\nSolely for purposes of determining the minimum required contribution under this section, the plan sponsor may, in lieu of the segment rates determined under subparagraph (C), elect to use interest rates under the corporate bond yield curve. For purposes of the preceding sentence such curve shall be determined without regard to the 24-month averaging described in clause (i). Such election, once made, may be revoked only with the consent of the Secretary.\nFor purposes of this paragraph, the term “applicable month” means, with respect to any plan for any plan year, the month which includes the valuation date of such plan for such plan year or, at the election of the plan sponsor, any of the 4 months which precede such month. Any election made under this subparagraph shall apply to the plan year for which the election is made and all succeeding plan years, unless the election is revoked with the consent of the Secretary.\nThe Secretary shall publish for each month the corporate bond yield curve (and the corporate bond yield curve reflecting the modification described in section 417(e)(3)(D) for such month) and each of the rates determined under subparagraph (C) and the averages determined under subparagraph (C)(iv) for such month. The Secretary shall also publish a description of the methodology used to determine such yield curve and such rates which is sufficiently detailed to enable plans to make reasonable projections regarding the yield curve and such rates for future months based on the plan’s projection of future interest rates.\nExcept as provided in subparagraph (C) or (D), the Secretary shall by regulation prescribe mortality tables to be used in determining any present value or making any computation under this section. Such tables shall be based on the actual experience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary shall take into account results of available independent studies of mortality of individuals covered by pension plans.\nThe Secretary shall (at least every 10 years) make revisions in any table in effect under subparagraph (A) to reflect the actual experience of pension plans and projected trends in such experience.\nUpon request by the plan sponsor and approval by the Secretary, a mortality table which meets the requirements of clause (iii) shall be used in determining any present value or making any computation under this section during the period of consecutive plan years (not to exceed 10) specified in the request.\nThe plan sponsor shall submit a mortality table to the Secretary for approval under this subparagraph at least 7 months before the 1st day of the period described in clause (i).\nAny mortality table submitted to the Secretary for approval under this subparagraph shall be treated as in effect as of the 1st day of the period described in clause (i) unless the Secretary, during the 180-day period beginning on the date of such submission, disapproves of such table and provides the reasons that such table fails to meet the requirements of clause (iii). The 180-day period shall be extended upon mutual agreement of the Secretary and the plan sponsor.\nThe Secretary shall establish mortality tables which may be used (in lieu of the tables under subparagraph (A)) under this subsection for individuals who are entitled to benefits under the plan on account of disability. The Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before  January 1, 1995 , and for individuals whose disabilities occur in plan years beginning on or after such date.\nIn the case of disabilities occurring in plan years beginning after  December 31, 1994 , the tables under clause (i) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.\nThe Secretary shall (at least every 10 years) make revisions in any table in effect under clause (i) to reflect the actual experience of pension plans and projected trends in such experience.\nNo actuarial assumption used to determine the funding target for a plan to which this paragraph applies may be changed without the approval of the Secretary.\nFor purposes of subparagraph (A), the transition percentage shall be determined in accordance with the following table: \n \n \n \n \n \n \n \u2001If the consecutive number of years \u2001\u2001(including the plan year) the \u2001\u2001plan is in at-risk status is— The transition percentage is— \n \n \n 1 20\u202f\u202f \n 2 40\u202f\u202f \n 3 60\u202f\u202f \n 4 80.\nFor purposes of this paragraph, plan years beginning before 2008 shall not be taken into account.\nIf, on each day during the preceding plan year, a plan had 500 or fewer participants, the plan shall not be treated as in at-risk status for the plan year. For purposes of this paragraph, all defined benefit plans (other than multiemployer plans) maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only participants with respect to such employer or member shall be taken into account and the rules of subsection (g)(2)(C) shall apply.\nFor purposes of this section, the due date for any payment of any minimum required contribution for any plan year shall be 8½ months after the close of the plan year.\nAny payment required under paragraph (1) for a plan year that is made on a date other than the valuation date for such plan year shall be adjusted for interest accruing for the period between the valuation date and the payment date, at the effective rate of interest for the plan for such plan year.\nIn any case in which the plan has a funding shortfall for the preceding plan year, the employer maintaining the plan shall make the required installments under this paragraph and if the employer fails to pay the full amount of a required installment for the plan year, then the amount of interest charged under paragraph (2) on the underpayment for the period of underpayment shall be determined by using a rate of interest equal to the rate otherwise used under paragraph (2) plus 5 percentage points. In the case of plan years beginning in 2008, the funding shortfall for the preceding plan year may be determined using such methods of estimation as the Secretary may provide.\nThe period for which any interest is charged under this paragraph with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan.\nFor purposes of clause (i)(II), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid.\nThere shall be 4 required installments for each plan year.\nThe due dates for required installments are set forth in the following table: \n \n \n \n \n \n \n \n \u2001 \u2001In the case of the following required installment: \u2001The due date is: \n \n \n \u2001 1st April 15 \n \u2001 2nd July 15 \n \u2001 3rd October 15 \n \u2001 4th January 15 of the following year.\nThe amount of any required installment shall be 25 percent of the required annual payment.\nIn applying this paragraph to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this paragraph, the months which correspond thereto.\nThis subparagraph shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.\nThe Secretary shall prescribe regulations for the application of this paragraph in the case of a plan which has a valuation date other than the first day of the plan year.\nSubparagraph (D) shall be applied without regard to any increase under subsection (c)(7).\nA plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment under paragraph (3) to the extent that the value of the liquid assets paid in such installment is less than the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to be paid but for this paragraph).\nFor purposes of paragraph (3)(A), any portion of an installment that is treated as not paid under subparagraph (A) shall continue to be treated as unpaid until the close of the quarter in which the due date for such installment occurs.\nIf the amount of any required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the amount which, when added to prior installments for the plan year, is necessary to increase the funding target attainment percentage of the plan for the plan year (taking into account the expected increase in funding target due to benefits accruing or earned during the plan year) to 100 percent.\nThe term “base amount” means, with respect to any quarter, an amount equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending on the last day of such quarter.\nIf the amount determined under subclause (I) exceeds an amount equal to 2 times the sum of the adjusted disbursements from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satisfaction of the Secretary that such excess is the result of nonrecurring circumstances, the base amount with respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances.\nThe term “disbursements from the plan” means all disbursements from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses.\nThe term “liquid assets” means cash, marketable securities, and such other assets as specified by the Secretary in regulations.\nThe term “quarter” means, with respect to any required installment, the 3-month period preceding the month in which the due date for such installment occurs.\nThe Secretary may prescribe such regulations as are necessary to carry out this paragraph.\nThis subsection shall apply to a defined benefit plan (other than a multiemployer plan) covered under section 4021 of the Employee Retirement Income Security Act of 1974 for any plan year for which the funding target attainment percentage (as defined in subsection (d)(2)) of such plan is less than 100 percent.\nFor purposes of paragraph (1), the amount of the lien shall be equal to the aggregate unpaid balance of contribution payments required under this section and section 412 for which payment has not been made before the due date.\nA person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required contribution payment.\nThe lien imposed by paragraph (1) shall arise on the due date for the required contribution payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence.\nAny amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 of the Employee Retirement Income Security Act of 1974 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien.\nAny lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor).\nThe term “contribution payment” means, in connection with a plan, a contribution payment required to be made to the plan, including any required installment under paragraphs (3) and (4) of subsection (j).\nThe terms “due date” and “required installment” have the meanings given such terms by subsection (j).\nThe term “controlled group” means any group treated as a single employer under subsections (b), (c), (m), and ( o ) of section 414.\nIn the case of a qualified transfer (as defined in section 420), any assets so transferred shall not, for purposes of this section, be treated as assets in the plan.\nAn eligible newspaper plan sponsor of a plan under which no participant has had the participant’s accrued benefit increased (whether because of service or compensation) after  April 2, 2019 , may elect to have the alternative standards described in paragraph (4) apply to such plan.\nAn election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary.\nNotwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.\nNotwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year.\nFor purposes of this subsection, the term “United States Treasury obligation yield curve” means, with respect to any day, a yield curve which shall be prescribed by the Secretary for such day on interest-bearing obligations of the United States.\nThe shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).\nNotwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)).\nSubparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting “30-plan-year” for “7-plan-year” each place it appears.\nThe election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies.\nSubsection (i) shall not apply.\nA person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities.\nFor purposes of this subsection, the term “controlled group” means all persons treated as a single employer under subsection (b), (c), (m), or ( o ) of section 414 as of  December 20, 2019 .\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nSection 106 of the Pension Protection Act of 2006, referred to in subsec. (c)(2)(D)(iv)(I), is  section 106 of Pub. L. 109–280 , which is set out as a note under  section 401 of this title .\nThe date of the enactment of this subparagraph, referred to in subsec. (c)(2)(D)(v), is the date of enactment of  Pub. L. 111–192 , which was approved  June 25, 2010 .\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (c)(7)(E)(i)(I), (v)(II), (h)(5)(B)(i), (ii), and (k)(2), (4)(C), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Title I of the Act is classified generally to subchapter I (§\u202f1001 et seq.) of chapter 18 of Title 29, Labor. Title IV of the Act is classified principally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29. Sections 4001, 4006, 4021, 4043, and 4068 of the Act are classified to sections 1301, 1306, 1321, 1343, and 1368, respectively, of Title 29. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe Social Security Act, referred to in subsec. (h)(3)(D)(ii), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2021—Subsec. (c)(8).  Pub. L. 117–2, §\u202f9705(a) , added par. (8).\nSubsec. (h)(2)(C)(iv)(I).  Pub. L. 117–2, §\u202f9706(a)(2) , inserted at end “Notwithstanding anything in this subclause, if the average of the first, second, or third segment rate for any 25-year period is less than 5 percent, such average shall be deemed to be 5 percent.”\nSubsec. (h)(2)(C)(iv)(II).  Pub. L. 117–58  amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for calendar years 2012 to 2029 and after.\nPub. L. 117–2, §\u202f9706(a)(1) , amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for calendar years 2012 to 2023 and after.\nSubsec. (m).  Pub. L. 117–2, §\u202f9707(a) , amended subsec. (m) generally, revising special rules for community newspaper plans.\n2019—Subsec. (m).  Pub. L. 116–94  added subsec. (m).\n2018—Subsec. (c)(7)(E)(v)(II).  Pub. L. 115–141, §\u202f401(a)(99) , inserted “the” after “title I of”.\nSubsec. (h)(2)(F).  Pub. L. 115–141, §\u202f401(a)(100) , substituted “section 417(e)(3)(D)” for “section 417(e)(3)(D)(i)”.\n2017—Subsec. (c)(7)(D)(vii)(II).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2015—Subsec. (h)(2)(C)(iv)(II).  Pub. L. 114–74  amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for calendar years 2012 to 2020 and after.\n2014—Subsec. (c)(5).  Pub. L. 113–295, §\u202f221(a)(57)(C)(i) , struck out subpar. (A) designation and heading and subpar. (B) which related to a transition rule for plan years beginning after 2007 and before 2011.\nSubsec. (h)(2)(B)(i).  Pub. L. 113–159, §\u202f2003(d)(1) , substituted “the valuation date for the plan year” for “the first day of the plan year”.\nSubsec. (h)(2)(C)(iv)(II).  Pub. L. 113–159, §\u202f2003(a) , amended table generally. Prior to amendment, table related to applicable minimum and maximum percentages for calendar years 2012 to 2015 and after.\nSubsec. (h)(2)(G).  Pub. L. 113–295, §\u202f221(a)(57)(D)(i) , struck out subpar. (G) which related to a transition rule for plan years beginning in 2008 or 2009.\n2012—Subsec. (h)(2)(C)(iv).  Pub. L. 112–141, §\u202f40211(a)(1) , added cl. (iv).\nSubsec. (h)(2)(F).  Pub. L. 112–141, §\u202f40211(a)(2)(B) , inserted “and the averages determined under subparagraph (C)(iv)” after “subparagraph (C)”.\n2010—Subsec. (c)(1).  Pub. L. 111–192, §\u202f201(b)(3)(A) , substituted “any shortfall amortization base which has not been fully amortized under this subsection” for “the shortfall amortization bases for such plan year and each of the 6 preceding plan years”.\nSubsec. (c)(2)(D).  Pub. L. 111–192, §\u202f201(b)(1) , added subpar. (D).\nSubsec. (c)(7).  Pub. L. 111–192, §\u202f201(b)(2) , added par. (7).\nSubsec. (f)(3)(D).  Pub. L. 111–192, §\u202f204(b) , added subpar. (D).\nSubsec. (j)(3)(F).  Pub. L. 111–192, §\u202f201(b)(3)(B) , added subpar. (F).\n2008—Subsec. (b).  Pub. L. 110–458, §\u202f101(b)(2)(A) , amended subsec. (b) generally. Prior to amendment, text read as follows: “For purposes of this section, except as provided in subsection (i)(2) with respect to plans in at-risk status, the term ‘target normal cost’ means, for any plan year, the present value of all benefits which are expected to accrue or to be earned under the plan during the plan year. For purposes of this subsection, if any benefit attributable to services performed in a preceding plan year is increased by reason of any increase in compensation during the current plan year, the increase in such benefit shall be treated as having accrued during the current plan year.”\nSubsec. (c)(5)(B)(i).  Pub. L. 110–458, §\u202f202(b)(2) , added cl. (i) and struck out former cl. (i). Prior to amendment, text read as follows: “Except as provided in clauses (iii) and (iv), in the case of plan years beginning after 2007 and before 2011, only the applicable percentage of the funding target shall be taken into account under paragraph (3)(A) in determining the funding shortfall for the plan year for purposes of subparagraph (A).”\nSubsec. (c)(5)(B)(iii).  Pub. L. 110–458, §\u202f202(b)(1) , redesignated cl. (iv) as (iii) and struck out former cl. (iii). Prior to amendment, text read as follows: “Clause (i) shall not apply with respect to any plan year beginning after 2008 unless the shortfall amortization base for each of the preceding years beginning after 2007 was zero (determined after application of this subparagraph).”\nPub. L. 110–458, §\u202f101(b)(2)(B) , inserted “beginning” before “after 2008”.\nSubsec. (c)(5)(B)(iv).  Pub. L. 110–458, §\u202f202(b)(1) , redesignated cl. (iv) as (iii).\nSubsec. (c)(5)(B)(iv)(II).  Pub. L. 110–458, §\u202f101(b)(2)(C) , inserted “for such year” after “beginning in 2007)”.\nSubsec. (f)(3)(A).  Pub. L. 110–458, §\u202f101(b)(2)(D)(i) , struck out “as of the first day of the plan year” after “credited by the plan sponsor”.\nSubsec. (f)(4)(A).  Pub. L. 110–458, §\u202f101(b)(2)(D)(ii) , substituted “paragraph (3)” for “paragraph (2)”.\nSubsec. (f)(6)(B)(iii).  Pub. L. 110–458, §\u202f101(b)(2)(D)(iii) , substituted “subsection (b), (c), or (e) of section 436” for “paragraph (1), (2), or (4) of section 206(g)”.\nSubsec. (f)(6)(C).  Pub. L. 110–458, §\u202f101(b)(2)(D)(iv) , struck out “the sum of” after “by” in introductory provisions.\nSubsec. (f)(8).  Pub. L. 110–458, §\u202f101(b)(2)(D)(v) , struck out “of the Treasury” after “by the Secretary”.\nSubsec. (g)(3)(B).  Pub. L. 110–458, §\u202f121(b) , amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “Any such averaging shall be adjusted for contributions and distributions (as provided by the Secretary).”\nSubsec. (h)(2)(B).  Pub. L. 110–458, §\u202f101(b)(2)(E)(i) , (ii), in introductory provisions, inserted “and target normal cost” after “funding target” and substituted “benefits” for “liabilities”.\nSubsec. (h)(2)(F).  Pub. L. 110–458, §\u202f101(b)(2)(E)(iii) , (iv), substituted “section 417(e)(3)(D)(i) for such month)” for “section 417(e)(3)(D)(i)) for such month” and “subparagraph (C)” for “subparagraph (B)”.\nSubsec. (i)(2)(A).  Pub. L. 110–458, §\u202f101(b)(2)(F)(i)(I) , added subpar. (A) and struck out former subpar. (A) which read as follows: “the present value of all benefits which are expected to accrue or be earned under the plan during the plan year, determined using the additional actuarial assumptions described in paragraph (1)(B), plus”.\nSubsec. (i)(2)(B).  Pub. L. 110–458, §\u202f101(b)(2)(F)(i)(II) , substituted “the amount determined under subsection (b)(1)(A)(i) with respect to the plan for the plan year” for “the target normal cost (determined without regard to this paragraph) of the plan for the plan year”.\nSubsec. (i)(4)(B).  Pub. L. 110–458, §\u202f101(b)(2)(F)(ii) , substituted “subparagraph (A)” for “subparagraph (A)(ii)” in concluding provisions.\nSubsec. (j)(3)(A).  Pub. L. 110–458, §\u202f101(b)(2)(G)(i) , inserted at end “In the case of plan years beginning in 2008, the funding shortfall for the preceding plan year may be determined using such methods of estimation as the Secretary may provide.”\nSubsec. (j)(3)(D)(ii)(II).  Pub. L. 110–458, §\u202f101(b)(2)(G)(ii) , substituted “section 412(c)” for “section 302(c)”.\nSubsec. (j)(3)(E).  Pub. L. 110–458, §\u202f101(b)(2)(G)(iii) , (iv), substituted “,\u2000short years, and years with alternate valuation date” for “and short years” in heading and added cl. (iii).\nSubsec. (k)(1).  Pub. L. 110–458, §\u202f101(b)(2)(H)(i) , inserted “(as provided under paragraph (2))” after “applies” in introductory provisions.\nSubsec. (k)(6)(B).  Pub. L. 110–458, §\u202f101(b)(2)(H)(ii) , struck out “,\u2000except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under section 430” before period at end.\nPub. L. 117–58, div. H, title VI, §\u202f80602(c) ,  Nov. 15, 2021 ,  135 Stat. 1339 , provided that:  “The amendments made by this section [amending this section and sections 1021 and 1083 of Title 29, Labor] shall apply with respect to plan years beginning after  December 31, 2021 .”\nPub. L. 117–2, title IX, §\u202f9705(c) ,  Mar. 11, 2021 ,  135 Stat. 200 , provided that:  “The amendments made by this section [amending this section and  section 1083 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2018 .”\nPub. L. 117–2, title IX, §\u202f9706(c) ,  Mar. 11, 2021 ,  135 Stat. 201 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 1021 and 1083 of Title 29, Labor] shall apply with respect to plan years beginning after  December 31, 2019 . \n \n “(2)   Election not to apply .— A plan sponsor may elect not to have the amendments made by this section apply to any plan year beginning before  January 1, 2022 , either (as specified in the election)— “(A)  for all purposes for which such amendments apply, or \n \n “(B)  solely for purposes of determining the adjusted funding target attainment percentage under sections 436 of the Internal Revenue Code of 1986 and 206(g) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1056(g) ] for such plan year. \n \n\n A plan shall not be treated as failing to meet the requirements of sections 204(g) of such Act [ 29 U.S.C. 1054(g) ] and 411(d)(6) of such Code solely by reason of an election under this paragraph.”\nPub. L. 117–2, title IX, §\u202f9707(c) ,  Mar. 11, 2021 ,  135 Stat. 206 , provided that:  “The amendments made by this section [amending this section and  section 1083 of Title 29 , Labor] shall apply to plan years ending after  December 31, 2017 .”\nPub. L. 116–94, div. O, title I, §\u202f115(c) ,  Dec. 20, 2019 ,  133 Stat. 3161 , provided that:  “The amendments made by this section [amending this section and  section 1083 of Title 29 , Labor] shall apply to plan years ending after  December 31, 2017 .”\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 114–74, title V, §\u202f504(c) ,  Nov. 2, 2015 ,  129 Stat. 594 , provided that:  “The amendments made by this section [amending this section and sections 1021 and 1083 of Title 29, Labor] shall apply with respect to plan years beginning after  December 31, 2015 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 113–159, title II, §\u202f2003(e) ,  Aug. 8, 2014 ,  128 Stat. 1851 , provided that: \n “(1)   In general .— The amendments made by subsections (a), (b), and (d) [amending this section and sections 1021 and 1083 of Title 29, Labor] shall apply with respect to plan years beginning after  December 31, 2012 . \n \n “(2)   Elections .— A plan sponsor may elect not to have the amendments made by subsections (a), (b), and (d) apply to any plan year beginning before  January 1, 2014 , either (as specified in the election)— “(A)  for all purposes for which such amendments apply, or \n \n “(B)  solely for purposes of determining the adjusted funding target attainment percentage under sections 436 of the Internal Revenue Code of 1986 [ 26 U.S.C. 436 ] and 206(g) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1054(g)  [probably should be  29 U.S.C. 1056(g) ]) for such plan year. \n \n\n A plan shall not be treated as failing to meet the requirements of section 204(g) of such Act [ 29 U.S.C. 1054(g) ] and section 411(d)(6) of such Code [ 26 U.S.C. 411(d)(6) ] solely by reason of an election under this paragraph.”\nAmendment by  Pub. L. 112–141  applicable with respect to plan years beginning after  December 31, 2011 , except as otherwise provided, see  section 40211(c) of Pub. L. 112–141 , set out as a note under  section 404 of this title .\nPub. L. 111–192, title II, §\u202f201(c) ,  June 25, 2010 ,  124 Stat. 1296 , provided that:  “The amendments made by this section [amending this section and  section 1083 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2007 .”\nPub. L. 111–192, title II, §\u202f204(c) ,  June 25, 2010 ,  124 Stat. 1302 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 1083 of Title 29 , Labor] shall apply to plan years beginning after  August 31, 2009 . \n \n “(2)   Special rule .— In the case of a plan for which the valuation date is not the first day of the plan year, the amendments made by this section shall apply to plan years beginning after  December 31, 2008 .”\nPub. L. 110–458, title I, §\u202f101(b)(3) ,  Dec. 23, 2008 ,  122 Stat. 5096 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by paragraphs (1)(A) [amending  section 1083 of Title 29 , Labor], (1)(F)(i) [amending  section 1083 of Title 29 ], (2)(A) [amending this section], and (2)(F)(i) [amending this section] shall apply to plan years beginning after  December 31, 2008 .”\n“(B)  Election for earlier application .—The amendments made by such paragraphs shall apply to a plan for the first plan year beginning after  December 31, 2007 , if the plan sponsor makes the election under this subparagraph. An election under this subparagraph shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate may prescribe, and, once made, may be revoked only with the consent of the Secretary.”\nAmendment by section 101(b)(2)(B)–(E), (F)(ii)–(H) of  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 110–458, title I, §\u202f121(c) ,  Dec. 23, 2008 ,  122 Stat. 5114 , provided that:  “The amendments made by this section [amending this section and  section 1083 of Title 29 , Labor] shall take effect as if included in the provisions of the 2006 Act [ Pub. L. 109–280 ] to which the amendments relate.”\nPub. L. 110–458, title II, §\u202f202(c) ,  Dec. 23, 2008 ,  122 Stat. 5118 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 1083 of Title 29 , Labor] shall apply as if included in the enactment of sections 102 and 112, respectively, of the Pension Protection Act of 2006 [ Pub. L. 109–280 ].”\nPub. L. 109–280, title I, §\u202f112(b) ,  Aug. 17, 2006 ,  120 Stat. 846 , provided that:  “The amendments made by this section [enacting this section] shall apply with respect to plan years beginning after  December 31, 2007 .”\nPub. L. 116–136, div. A, title III, §\u202f3608 ,  Mar. 27, 2020 ,  134 Stat. 413 , provided that: \n “(a)   Delay in Payment of Minimum Required Contributions .— In the case of any minimum required contribution (as determined under section 430(a) of the Internal Revenue Code of 1986 and section 303(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1083(a) )) which (but for this section) would otherwise be due under section 430(j) of such Code (including quarterly contributions under paragraph (3) thereof) and section 303(j) of such Act ( 29 U.S.C. 1083(j) ) (including quarterly contributions under paragraph (3) thereof) during calendar year 2020— “(1)  the due date for such contributions shall be  January 1, 2021 , and \n \n “(2)  the amount of each such minimum required contribution shall be increased by interest accruing for the period between the original due date (without regard to this section) for the contribution and the payment date, at the effective rate of interest for the plan for the plan year which includes such payment date. \n \n \n “(b)   Benefit Restriction Status .— For purposes of section 436 of the Internal Revenue Code of 1986 and section 206(g) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1056(g) ), a plan sponsor may elect to treat the plan’s adjusted funding target attainment percentage for the last plan year ending before  January 1, 2020 , as the adjusted funding target attainment percentage for plan years which include calendar year 2020.”\nPub. L. 117–328, div. T, title III, §\u202f335 ,  Dec. 29, 2022 ,  136 Stat. 5372 , provided that: \n “(a)   In General .— Not later than 18 months after the date of the enactment of this Act [ Dec. 29, 2022 ], the Secretary of the Treasury (or the Secretary’s delegate) shall amend the regulation relating to ‘Mortality Tables for Determining Present Value Under Defined Benefit Pension Plans’ (82 Fed. Reg. 46388 ( October 5, 2017 )). Under such amendment, for valuation dates occurring during or after 2024, such mortality improvement rates shall not assume for years beyond the valuation date future mortality improvements at any age which are greater than .78 percent. The Secretary of the Treasury (or delegate) shall by regulation modify the .78 percent figure in the preceding sentence as necessary to reflect material changes in the overall rate of improvement projected by the Social Security Administration. \n \n “(b)   Effective Date .— The amendments required under subsection (a) shall be deemed to have been made as of the date of the enactment of this Act, and as of such date all applicable laws shall be applied in all respects as though the actions which the Secretary of the Treasury (or the Secretary’s delegate) is required to take under such subsection had been taken.”\nPub. L. 114–74, title V, §\u202f503 ,  Nov. 2, 2015 ,  129 Stat. 593 , provided that: \n “(a)   Credibility .— For purposes of subclause (I) of section 430(h)(3)(C)(iii) of the Internal Revenue Code of 1986 and subclause (I) of section 303(h)(3)(C)(iii) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(h)(3)(C)(iii) ], the determination of whether plans have credible information shall be made in accordance with established actuarial credibility theory, which— “(1)  is materially different from rules under such section of such Code, including Revenue Procedure 2007–37, that are in effect on the date of the enactment of this Act [ Nov. 2, 2015 ]; and \n \n “(2)  permits the use of tables that reflect adjustments to the tables described in subparagraphs (A) and (B) of section 430(h)(3) of such Code, and subparagraphs (A) and (B) of section 303(h)(3) of such Act, if such adjustments are based on the experience described in subclause (II) of section 430(h)(3)(C)(iii) of such Code and in subclause (II) of section 303(h)(3)(C)(iii) of such Act. \n \n \n “(b)   Effective Date .— This section shall apply to plan years beginning after  December 31, 2015 .”\nFor special rules on applicability of subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .\nPub. L. 109–280, title I, §\u202f115(a) –(c),  Aug. 17, 2006 ,  120 Stat. 855 , 856, provided that: \n “(a)   In General .— In the case of a plan that— “(1)  was not required to pay a variable rate premium for the plan year beginning in 1996, \n \n “(2)  has not, in any plan year beginning after 1995, merged with another plan (other than a plan sponsored by an employer that was in 1996 within the controlled group of the plan sponsor), and \n \n “(3)  is sponsored by a company that is engaged primarily in the interurban or interstate passenger bus service, \n \n\n the rules described in subsection (b) shall apply for any plan year beginning after  December 31, 2007 . \n \n “(b)   Modified Rules .— The rules described in this subsection are as follows: “(1)  For purposes of section 430(j)(3) of the Internal Revenue Code of 1986 and section 303(j)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083(j)(3) ], the plan shall be treated as not having a funding shortfall for any plan year. \n \n “(2)  For purposes of— “(A)  determining unfunded vested benefits under section 4006(a)(3)(E)(iii) of such Act [ 29 U.S.C. 1306(a)(3)(E)(iii) ], and \n \n “(B)  determining any present value or making any computation under section 412 of such Code or section 302 of such Act [ 29 U.S.C. 1082 ], \n \n \n\n the mortality table shall be the mortality table used by the plan. \n “(3)  [Former] Section 430(c)(5)(B) of such Code and [former] section 303(c)(5)(B) of such Act [ 29 U.S.C. 1083(c)(5)(B) ] (relating to phase-in of funding target for exemption from new shortfall amortization base) shall each be applied by substituting ‘2012’ for ‘2011’ therein and by substituting for the table therein the following: \n \n \n \n \n \n \n “In the case of a plan year beginning in calendar year: The applicable percentage is: \n \n \n 2008 90 percent\u202f\u202f \n 2009 92 percent\u202f\u202f \n 2010 94 percent\u202f\u202f \n 2011 96 percent. \n \n \n \n \n \n “(c)   Definitions .— Any term used in this section which is also used in section 430 of such Code or section 303 of such Act [ 29 U.S.C. 1083 ] shall have the meaning provided such term in such section. If the same term has a different meaning in such Code and such Act [ 29 U.S.C. 1001  et seq.], such term shall, for purposes of this section, have the meaning provided by such Code when applied with respect to such Code and the meaning provided by such Act when applied with respect to such Act.”\nPub. L. 109–280, title IV, §\u202f402 ,  Aug. 17, 2006 ,  120 Stat. 922 , as amended by  Pub. L. 110–28, title VI , §§\u202f6614(a), 6615(a),  May 25, 2007 ,  121 Stat. 181 ;  Pub. L. 110–458, title I , §§\u202f104(b), 126(a),  Dec. 23, 2008 ,  122 Stat. 5104 , 5116, provided that: \n “(a)   In General .— The plan sponsor of an eligible plan may elect to either— “(1)  have the rules of subsection (b) apply, or \n \n “(2)  have section 303 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1083 ] and section 430 of the Internal Revenue Code of 1986 applied to its first taxable year beginning in 2008 by amortizing the shortfall amortization base for such taxable year over a period of 10 plan years (rather than 7 plan years) beginning with such plan year and by using, in determining the funding target for each of the 10 plan years during such period, an interest rate of 8.25 percent (rather than the segment rates calculated on the basis of the corporate bond yield curve). \n \n \n “(b)   Alternative Funding Schedule.— “(1)   In general .— If an election is made under subsection (a)(1) to have this subsection apply to an eligible plan and the requirements of paragraphs (2) and (3) are met with respect to the plan— “(A)  in the case of any applicable plan year beginning before  January 1, 2008 , the plan shall not have an accumulated funding deficiency for purposes of section 302 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082 ] and sections 412 and 4971 of the Internal Revenue Code of 1986 if contributions to the plan for the plan year are not less than the minimum required contribution determined under subsection (e) for the plan for the plan year, and \n \n “(B)  in the case of any applicable plan year beginning on or after  January 1, 2008 , the minimum required contribution determined under sections 303 of such Act [ 29 U.S.C. 1083 ] and 430 of such Code shall, for purposes of sections 302 and 303 of such Act and sections 412, 430, and 4971 of such Code, be equal to the minimum required contribution determined under subsection (e) for the plan for the plan year. \n \n \n “(2)   Accrual restrictions.— “(A)   In general .— The requirements of this paragraph are met if, effective as of the first day of the first applicable plan year and at all times thereafter while an election under this section is in effect, the plan provides that— “(i)  the accrued benefit, any death or disability benefit, and any social security supplement described in the last sentence of section 411(a)(9) of such Code and section 204(b)(1)(G) of such Act [ 29 U.S.C. 1054(b)(1)(G) ], of each participant are frozen at the amount of such benefit or supplement immediately before such first day, and \n \n “(ii)  all other benefits under the plan are eliminated, \n \n\n \u2001\u2001but only to the extent the freezing or elimination of such benefits would have been permitted under section 411(d)(6) of such Code and section 204(g) of such Act if they had been implemented by a plan amendment adopted immediately before such first day. \n \n “(B)   Increases in section 415 limits .— If a plan provides that an accrued benefit of a participant which has been subject to any limitation under section 415 of such Code will be increased if such limitation is increased, the plan shall not be treated as meeting the requirements of this section unless, effective as of the first day of the first applicable plan year (or, if later, the date of the enactment of this Act [ Aug. 17, 2006 ]) and at all times thereafter while an election under this section is in effect, the plan provides that any such increase shall not take effect. A plan shall not fail to meet the requirements of section 411(d)(6) of such Code and section 204(g) of such Act solely because the plan is amended to meet the requirements of this subparagraph. \n \n \n “(3)   Restriction on applicable benefit increases.— “(A)   In general .— The requirements of this paragraph are met if no applicable benefit increase takes effect at any time during the period beginning on  July 26, 2005 , and ending on the day before the first day of the first applicable plan year. \n \n “(B)   Applicable benefit increase .— For purposes of this paragraph, the term ‘applicable benefit increase’ means, with respect to any plan year, any increase in liabilities of the plan by plan amendment (or otherwise provided in regulations provided by the Secretary) which, but for this paragraph, would occur during the plan year by reason of— “(i)  any increase in benefits, \n \n “(ii)  any change in the accrual of benefits, or \n \n “(iii)  any change in the rate at which benefits become nonforfeitable under the plan. \n \n \n \n “(4)   Exception for imputed disability service .— Paragraphs (2) and (3) shall not apply to any accrual or increase with respect to imputed service provided to a participant during any period of the participant’s disability occurring on or after the effective date of the plan amendment providing the restrictions under paragraph (2) (or on or after  July 26, 2005 , in the case of the restrictions under paragraph (3)) if the participant— “(A)  was receiving disability benefits as of such date, or \n \n “(B)  was receiving sick pay and subsequently determined to be eligible for disability benefits as of such date. \n \n \n \n “(c)   Definitions .— For purposes of this section— “(1)   Eligible plan .— The term ‘eligible plan’ means a defined benefit plan (other than a multiemployer plan) to which sections 302 of such Act [ 29 U.S.C. 1082 ] and 412 of such Code applies which is sponsored by an employer— “(A)  which is a commercial passenger airline, or \n \n “(B)  the principal business of which is providing catering services to a commercial passenger airline. \n \n \n “(2)   Applicable plan year .— The term ‘applicable plan year’ means each plan year to which the election under subsection (a)(1) applies under subsection (d)(1)(A). \n \n \n “(d)   Elections and Related Terms.— “(1)   Years for which election made.— “(A)   Alternative funding schedule .— If an election under subsection (a)(1) was made with respect to an eligible plan, the plan sponsor may select either a plan year beginning in 2006 or a plan year beginning in 2007 as the first plan year to which such election applies. The election shall apply to such plan year and all subsequent years. The election shall be made— “(i)  not later than  December 31, 2006 , in the case of an election for a plan year beginning in 2006, or \n \n “(ii)  not later than  December 31, 2007 , in the case of an election for a plan year beginning in 2007. \n \n \n “(B)  10  year amortization .— An election under subsection (a)(2) shall be made not later than  December 31, 2007 . \n \n “(C)   Election of new plan year for alternative funding schedule .— In the case of an election under subsection (a)(1), the plan sponsor may specify a new plan year in such election and the plan year of the plan may be changed to such new plan year without the approval of the Secretary of the Treasury. \n \n \n “(2)   Manner of election .— A plan sponsor shall make any election under subsection (a) in such manner as the Secretary of the Treasury may prescribe. Such election, once made, may be revoked only with the consent of such Secretary. \n \n \n “(e)   Minimum Required Contribution .— In the case of an eligible plan with respect to which an election is made under subsection (a)(1)— “(1)   In general .— In the case of any applicable plan year during the amortization period, the minimum required contribution shall be the amount necessary to amortize the unfunded liability of the plan, determined as of the first day of the plan year, in equal annual installments (until fully amortized) over the remainder of the amortization period. Such amount shall be separately determined for each applicable plan year. \n \n “(2)   Years after amortization period .— In the case of any plan year beginning after the end of the amortization period, section 302(a)(2)(A) of such Act [ 29 U.S.C. 1082(a)(2)(A) ] and section 412(a)(2)(A) of such Code shall apply to such plan, but the prefunding balance and funding standard carryover balance as of the first day of the first of such years under section 303(f) of such Act [ 29 U.S.C. 1083(f) ] and section 430(f) of such Code shall be zero. \n \n “(3)   Definitions .— For purposes of this section— “(A)   Unfunded liability .— The term ‘unfunded liability’ means the unfunded accrued liability under the plan, determined under the unit credit funding method. \n \n “(B)   Amortization period .— The term ‘amortization period’ means the 17-plan year period beginning with the first applicable plan year. \n \n \n “(4)   Other rules .— In determining the minimum required contribution and amortization amount under this subsection— “(A)  the provisions of section 302(c)(3) of such Act and section 412(c)(3) of such Code, as in effect before the date of enactment of this section [ Aug. 17, 2006 ], shall apply, \n \n “(B)  a rate of interest of 8.85 percent shall be used for all calculations requiring an interest rate, and \n \n “(C)  the value of plan assets shall be determined under sections 303(g)(3) of such Act [ 29 U.S.C. 1083(g)(3) ] and 430(g)(3) of such Code. \n \n \n “(5)   Special rule for certain plan spinoffs .— For purposes of subsection (b), if, with respect to any eligible plan to which this subsection applies— “(A)  any applicable plan year includes the date of the enactment of this Act, \n \n “(B)  a plan was spun off from the eligible plan during the plan year but before such date of enactment, \n \n\n the minimum required contribution under paragraph (1) for the eligible plan for such applicable plan year shall be an aggregate amount determined as if the plans were a single plan for that plan year (based on the full 12-month plan year in effect prior to the spin-off). The employer shall designate the allocation of such aggregate amount between such plans for the applicable plan year. \n \n \n “(f)   Special Rules for Certain Balances and Waivers .— In the case of an eligible plan with respect to which an election is made under subsection (a)(1)— “(1)   Funding standard account and credit balances .— Any charge or credit in the funding standard account under section 302 of such Act [ 29 U.S.C. 1082 ] or section 412 of such Code, and any prefunding balance or funding standard carryover balance under section 303 of such Act [ 29 U.S.C. 1083 ] or section 430 of such Code, as of the day before the first day of the first applicable plan year, shall be reduced to zero. \n \n “(2)   Waived funding deficiencies .— Any waived funding deficiency under sections 302 and 303 of such Act or section 412 of such Code, as in effect before the date of enactment of this section [ Aug. 17, 2006 ], shall be deemed satisfied as of the first day of the first applicable plan year and the amount of such waived funding deficiency shall be taken into account in determining the plan’s unfunded liability under subsection (e)(3)(A). In the case of a plan amendment adopted to satisfy the requirements of subsection (b)(2), the plan shall not be deemed to violate section 304(b) of such Act [ 29 U.S.C. 1084(b) ] or section 412(f) of such Code, as so in effect, by reason of such amendment or any increase in benefits provided to such plan’s participants under a separate plan that is a defined contribution plan or a multiemployer plan. \n \n \n “(g)   Other Rules for Plans Making Election Under This Section.— “(1)   Successor plans to certain plans .— If— “(A)  an election under paragraph (1) or (2) of subsection (a) is in effect with respect to any eligible plan, and \n \n “(B)  the eligible plan is maintained by an employer that establishes or maintains 1 or more other defined benefit plans (other than any multiemployer plan), and such other plans in combination provide benefit accruals to any substantial number of successor employees, \n \n\n the Secretary of the Treasury may, in the Secretary’s discretion, determine that any trust of which any other such plan is a part does not constitute a qualified trust under section 401(a) of the Internal Revenue Code of 1986 unless all benefit obligations of the eligible plan have been satisfied. For purposes of this paragraph, the term ‘successor employee’ means any employee who is or was covered by the eligible plan and any employees who perform substantially the same type of work with respect to the same business operations as an employee covered by such eligible plan. \n \n “(2)   Special rules for terminations.— “(A)  PBGC  liability limited .— \n [Amended  section 1322 of Title 29 , Labor.] \n \n “(B)   Termination premium .— In applying section 4006(a)(7)(A) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1306(a)(7)(A) ] to an eligible plan during any period in which an election under subsection (a)(1) is in effect— “(i)  ‘$2,500’ shall be substituted for ‘$1,250’ in such section if such plan terminates during the 5-year period beginning on the first day of the first applicable plan year with respect to such plan, and \n \n “(ii)  such section shall be applied without regard to subparagraph (B) of section 8101(d)(2) of the Deficit Reduction Act of 2005 [ Pub. L. 109–171 ,  29 U.S.C. 1306  note] (relating to special rule for plans terminated in bankruptcy). \n \n\n \u2001\u2001The substitution described in clause (i) shall not apply with respect to any plan if the Secretary of Labor determines that such plan terminated as a result of extraordinary circumstances such as a terrorist attack or other similar event. \n \n \n “(3)   Limitation on deductions under certain plans .— Section 404(a)(7)(C)(iv) of the Internal Revenue Code of 1986, as added by this Act, shall not apply with respect to any taxable year of a plan sponsor of an eligible plan if any applicable plan year with respect to such plan ends with or within such taxable year. \n \n “(4)   Notice .— In the case of a plan amendment adopted in order to comply with this section, any notice required under section 204(h) of such Act [ 29 U.S.C. 1054(h) ] or section 4980F(e) of such Code shall be provided within 15 days of the effective date of such plan amendment. This subsection shall not apply to any plan unless such plan is maintained pursuant to one or more collective bargaining agreements between employee representatives and 1 or more employers. \n \n \n “(h)   Exclusion of Certain Employees From Minimum Coverage Requirements.— “(1)   In general .— \n [Amended  section 410 of this title .] \n \n “(2)   Effective date .— The amendment made by this subsection [amending  section 410 of this title ] shall apply to years beginning before, on, or after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n \n “(i)   Extension of Special Rule for Additional Funding Requirements .— In the case of an employer which is a commercial passenger airline, section 302(d)(12) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1082(d)(12) ] and section 412( l )(12) of the Internal Revenue Code of 1986, as in effect before the date of the enactment of this Act [ Aug. 17, 2006 ], shall each be applied— “(1)  by substituting ‘ January 1, 2008 ’ for ‘ December 28, 2005 ’ in subparagraph (D)(i) thereof, and \n \n “(2)  without regard to subparagraph (D)(ii). \n \n \n “(j)   Effective Date .— Except as otherwise provided in this section, the provisions of and amendments made by this section [amending  section 410 of this title  and  section 1322 of Title 29 , Labor] shall apply to plan years ending after the date of the enactment of this Act [ Aug. 17, 2006 ].”\n[Amended  section 1322 of Title 29 , Labor.]\n[Amended  section 410 of this title .]\n[ Pub. L. 110–458, title I, §\u202f126(b) ,  Dec. 23, 2008 ,  122 Stat. 5116 , provided that:  “The amendment made by this section [amending  section 402(e)(4)(C) of Pub. L. 109–280 , set out above] shall apply to plan years beginning after  December 31, 2007 .” \n]\n[ Pub. L. 110–28, title VI, §\u202f6614(b) ,  May 25, 2007 ,  121 Stat. 181 , provided that:  “The amendment made by subsection (a) [amending  section 402(i)(1) of Pub. L. 109–280 , set out above] shall take effect as if included in section 402 of the Pension Protection Act of 2006 [ Pub. L. 109–280 ].” \n]\n[ Pub. L. 110–28, title VI, §\u202f6615(b) ,  May 25, 2007 ,  121 Stat. 181 , provided that:  “The amendment made by this section [amending  section 402(a)(2) of Pub. L. 109–280 , set out above] shall take effect as if included in the provisions of the Pension Protection Act of 2006 [ Pub. L. 109–280 ] to which such amendment relates.” \n]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT LIMITATIONS'},
  'content': 'For purposes of section 412, the accumulated funding deficiency of a multiemployer plan for any plan year is the amount, determined as of the end of the plan year, equal to the excess (if any) of the total charges to the funding standard account of the plan for all plan years (beginning with the first plan year for which this part applies to the plan) over the total credits to such account for such years.\nEach multiemployer plan to which this part applies shall establish and maintain a funding standard account. Such account shall be credited and charged solely as provided in this section.\nIn the case of any amount amortized under section 412(b) (as in effect on the day before the date of the enactment of the Pension Protection Act of 2006) over any period beginning with a plan year beginning before 2008 in lieu of the amortization described in paragraphs (2)(B) and (3)(B), such amount shall continue to be amortized under such section as so in effect.\nThe funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary of the Treasury) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.\nAny amount received by a multiemployer plan in payment of all or part of an employer’s withdrawal liability under part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 shall be considered an amount contributed by the employer to or under the plan. The Secretary may prescribe by regulation additional charges and credits to a multiemployer plan’s funding standard account to the extent necessary to prevent withdrawal liability payments from being unduly reflected as advance funding for plan liabilities.\nAny amount paid by a plan during a plan year to the Pension Benefit Guaranty Corporation pursuant to section 4222 of such Act or to a fund exempt under section 501(c)(22) pursuant to section 4223 of such Act shall reduce the amount of contributions considered received by the plan for the plan year.\nAny amount paid by an employer pending a final determination of the employer’s withdrawal liability under part 1 of subtitle E of title IV of such Act and subsequently refunded to the employer by the plan shall be charged to the funding standard account in accordance with regulations prescribed by the Secretary.\nIf an election is in effect under section 412(b)(7)(F) (as in effect on the day before the date of the enactment of the Pension Protection Act of 2006) for any plan year, the funding standard account shall be charged in the plan year to which the portion of the net experience loss deferred by such election was deferred with the amount so deferred (and paragraph (2)(B)(iii) shall not apply to the amount so charged).\nAny amount of any financial assistance from the Pension Benefit Guaranty Corporation to any plan, and any repayment of such amount, shall be taken into account under this section and section 412 in such manner as is determined by the Secretary.\nTo the extent that any plan amendment increases the unfunded past service liability under the plan by reason of an increase in benefits which are not payable as a life annuity but are payable under the terms of the plan for a period that does not exceed 14 years from the effective date of the amendment, paragraph (2)(B)(ii) shall be applied separately with respect to such increase in unfunded past service liability by substituting the number of years of the period during which such benefits are payable for “15”.\nNet investment losses shall be determined in the manner prescribed by the Secretary on the basis of the difference between actual and expected returns (including any difference attributable to any criminally fraudulent investment arrangement).\nThe determination as to whether an arrangement is a criminally fraudulent investment arrangement shall be made under rules substantially similar to the rules prescribed by the Secretary for purposes of section 165.\nIf this subparagraph and subparagraph (A) both apply for any plan year, the plan shall treat any reduction in unfunded accrued liability resulting from the application of this subparagraph as a separate experience amortization base, to be amortized in equal annual installments (until fully amortized) over a period of 30 plan years rather than the period such liability would otherwise be amortized over.\nThe solvency test under this paragraph is met only if the plan actuary certifies that the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period, taking into account the changes in the funding standard account under this paragraph.\nFor purposes of this part, normal costs, accrued liability, past service liabilities, and experience gains and losses shall be determined under the funding method used to determine costs under the plan.\nFor purposes of this part, the value of the plan’s assets shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary.\nThe value of a bond or other evidence of indebtedness which is not in default as to principal or interest may, at the election of the plan administrator, be determined on an amortized basis running from initial cost at purchase to par value at maturity or earliest call date. Any election under this subparagraph shall be made at such time and in such manner as the Secretary shall by regulations provide, shall apply to all such evidences of indebtedness, and may be revoked only with the consent of the Secretary.\nFor purposes of clause (i), assets shall not be reduced by any credit balance in the funding standard account.\nFor purposes of this paragraph, unless otherwise provided by the plan, the accrued liability under a multiemployer plan shall not include benefits which are not nonforfeitable under the plan after the termination of the plan (taking into consideration section 411(d)(3)).\nThe term “current liability” means all liabilities to employees and their beneficiaries under the plan.\nThe rate of interest used to determine current liability under this paragraph shall be the rate of interest determined under subparagraph (E).\nIn the case of plan years beginning before the first plan year to which the first tables prescribed under subclause (II) apply, the mortality table used in determining current liability under this paragraph shall be the table prescribed by the Secretary which is based on the prevailing commissioners’ standard table (described in section 807(d)(5)(A))\u202f 1 1 \u202fSee References in Text note below.  used to determine reserves for group annuity contracts issued on  January 1, 1993 .\nThe Secretary may by regulation prescribe for plan years beginning after  December 31, 1999 , mortality tables to be used in determining current liability under this subsection. Such tables shall be based upon the actual experience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary shall take into account results of available independent studies of mortality of individuals covered by pension plans.\nThe Secretary shall establish mortality tables which may be used (in lieu of the tables under clause (iv)) to determine current liability under this subsection for individuals who are entitled to benefits under the plan on account of disability. The Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before  January 1, 1995 , and for individuals whose disabilities occur in plan years beginning on or after such date.\nIn the case of disabilities occurring in plan years beginning after  December 31, 1994 , the tables under subclause (I) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.\nThe Secretary shall periodically (at least every 5 years) review any tables in effect under this subparagraph and shall, to the extent such Secretary determines necessary, by regulation update the tables to reflect the actual experience of pension plans and projected trends in such experience.\nIf any rate of interest used under the plan under subsection (b)(6) to determine cost is not within the permissible range, the plan shall establish a new rate of interest within the permissible range.\nExcept as provided in subclause (II), the term “permissible range” means a rate of interest which is not more than 5 percent above, and not more than 10 percent below, the weighted average of the rates of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year.\nIf the Secretary finds that the lowest rate of interest permissible under subclause (I) is unreasonably high, the Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under such subclause.\nFor purposes of this section, a determination of experience gains and losses and a valuation of the plan’s liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary.\nExcept as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year.\nThe valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 100 percent of the plan’s current liability (as defined in paragraph (6)(D) without regard to clause (iv) thereof).\nInformation under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.\nA change in funding method to use a prior year valuation, as provided in clause (ii), may not be made unless as of the valuation date within the prior plan year, the value of the assets of the plan are not less than 125 percent of the plan’s current liability (as defined in paragraph (6)(D) without regard to clause (iv) thereof).\nFor purposes of this section, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.\nIf the plan sponsor of a multiemployer plan submits to the Secretary an application for an extension of the period of years required to amortize any unfunded liability described in any clause of subsection (b)(2)(B) or described in subsection (b)(4), the Secretary may extend the amortization period for a period of time (not in excess of 10 years reduced by the number of years of any extension under paragraph (1) with respect to such unfunded liability) if the Secretary makes the determination described in subparagraph (B). Such extension shall be in addition to any extension under paragraph (1).\nThe Secretary shall act upon any application for an extension under this paragraph within 180 days of the submission of such application. If the Secretary rejects the application for an extension under this paragraph, the Secretary shall provide notice to the plan detailing the specific reasons for the rejection, including references to the criteria set forth above.\nThe Secretary shall, before granting an extension under this subsection, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such extension to each affected party (as defined in section 4001(a)(21) of the Employee Retirement Income Security Act of 1974) with respect to the affected plan. Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of such Act and for benefit liabilities.\nThe Secretary shall consider any relevant information provided by a person to whom notice was given under paragraph (1).\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (b)(7)(A) to (D), (8)(B)(ii)(II), (F) and (d)(3)(A), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Title IV of the Act is classified principally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29, Labor. Part 1 of subtitle E of title IV of the Act is classified generally to part 1 (§\u202f1381 et seq.) of subtitle E of subchapter III of chapter 18 of Title 29. Sections 302, 4001, 4222, 4223, 4243, and 4262 of the Act are classified to sections 1082, 1301, 1402, 1403, 1423, and 1432, respectively, of Title 29. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe date of the enactment of the Pension Protection Act of 2006, referred to in subsec. (b)(2)(D), (E), (3)(D), (4), (7)(E), is the date of enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\nThe Social Security Act, referred to in subsec. (c)(4)(A), (6)(D)(v)(II), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. Title II of the Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 807(d)(5), referred to in subsec. (c)(6)(D)(iv)(I), was repealed by  Pub. L. 115–97, title I, §\u202f13517(a)(2)(A) ,  Dec. 22, 2017 ,  131 Stat. 2144 .\nThe Pension Protection Act of 2006, referred to in subsec. (d)(2)(B)(i), is  Pub. L. 109–280 ,  Aug. 17, 2006 ,  120 Stat. 780 . For complete classification of this Act to the Code, see Short Title of 2006 Amendment note set out under  section 1001 of Title 29 , Labor, and Tables.\n2021—Subsec. (b)(8)(F).  Pub. L. 117–2  added subpar. (F).\n2018—Subsec. (d)(2)(B)(i).  Pub. L. 115–141  substituted “the Pension Protection Act of 2006” for “this Act”.\n2014—Subsec. (a).  Pub. L. 113–235, §\u202f108(b)(3)(A) , amended subsec. (a) generally. Prior to amendment, subsec. (a) related to accumulated funding deficiency of multiemployer plan.\nSubsec. (d)(1)(C).  Pub. L. 113–295 , which directed amendment of subpar. (C) by substituting “ December 31, 2015 ” for “ December 31, 2014 ”, could not be executed because of previous repeal of subpar. (C) by  Pub. L. 113–235, §\u202f101(b)(2) . See below.\nPub. L. 113–235, §\u202f101(b)(2) , struck out subpar. (C). Text read as follows: “The preceding provisions of this paragraph shall not apply with respect to any application submitted after  December 31, 2014 .”\n2010—Subsec. (b)(8).  Pub. L. 111–192  added par. (8).\nPub. L. 117–2, title IX, §\u202f9703(b) ,  Mar. 11, 2021 ,  135 Stat. 189 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1084 of Title 29 , Labor] shall take effect as of the first day of the first plan year ending on or after  February 29, 2020 , except that any election a plan makes pursuant to this section that affects the plan’s funding standard account for the first plan year beginning after  February 29, 2020 , shall be disregarded for purposes of applying the provisions of section 305 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085 ] and section 432 of the Internal Revenue Code of 1986 to such plan year. \n \n “(2)   Restrictions on benefit increases .— Notwithstanding paragraph (1), the restrictions on plan amendments increasing benefits in sections 304(b)(8)(D) of such Act [ 29 U.S.C. 1084(b)(8)(D) ] and 431(b)(8)(D) of such Code, as applied by the amendments made by this section, shall take effect on the date of enactment of this Act [ Mar. 11, 2021 ].”\nPub. L. 113–295, div. A, title I, §\u202f171(c) ,  Dec. 19, 2014 ,  128 Stat. 4023 , provided that:  “The amendments made by this section [amending this section and  section 1084 of Title 29 , Labor] shall apply to applications submitted under section 431(d)(1)(A) of the Internal Revenue Code of 1986 and section 304(d)(1)(C) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1084(d)(1)(C) ] after  December 31, 2014 .”\nAmendment by  section 108(b)(3)(A) of Pub. L. 113–235  applicable with respect to plan years beginning after  Dec. 31, 2014 , see  section 108(c) of div. O of Pub. L. 113–235 , set out as an Effective Date of Repeal note under  section 418 of this title .\nPub. L. 111–192, title II, §\u202f211(b) ,  June 25, 2010 ,  124 Stat. 1306 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1084 of Title 29 , Labor] shall take effect as of the first day of the first plan year ending after  August 31, 2008 , except that any election a plan makes pursuant to this section that affects the plan’s funding standard account for the first plan year beginning after  August 31, 2008 , shall be disregarded for purposes of applying the provisions of section 305 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085 ] and section 432 of the Internal Revenue Code of 1986 to such plan year. \n \n “(2)   Restrictions on benefit increases .— Notwithstanding paragraph (1), the restrictions on plan amendments increasing benefits in sections 304(b)(8)(D) of such Act [ 29 U.S.C. 1084(b)(8)(D) ] and 431(b)(8)(D) of such Code, as added by this section, shall take effect on the date of enactment of this Act [ June 25, 2010 ].”\nPub. L. 109–280, title II, §\u202f211(b) ,  Aug. 17, 2006 ,  120 Stat. 898 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section] shall apply to plan years beginning after 2007. \n \n “(2)   Special rule for certain amortization extensions .— If the Secretary of the Treasury grants an extension under section 304 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1084 ] and section 412(e) of the Internal Revenue Code of 1986 with respect to any application filed with the Secretary of the Treasury on or before  June 30, 2005 , the extension (and any modification thereof) shall be applied and administered under the rules of such sections as in effect before the enactment of this Act [ Aug. 17, 2006 ], including the use of the rate of interest determined under section 6621(b) of such Code.”\nFor applicability of this section to a multiemployer plan that is a party to an agreement that was approved by the Pension Benefit Guaranty Corporation prior to  June 30, 2005 , and that increases benefits and provides for certain withdrawal liability rules, see  section 206 of Pub. L. 109–280 , set out as a note under  section 412 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT LIMITATIONS'},
  'content': 'Any projection of activity in the industry or industries covered by the plan, including future covered employment and contribution levels, shall be based on information provided by the plan sponsor, which shall act reasonably and in good faith.\nClauses (i) and (ii) (other than the 2nd sentence of clause (i)) may be disregarded by a plan actuary in the case of any certification of whether a plan will be in critical status in a succeeding plan year, except that a plan sponsor may not elect to be in critical status for a plan year under paragraph (4) in any case in which the certification upon which such election would be based is made without regard to such clauses.\nAny failure of the plan’s actuary to certify the plan’s status under this subsection by the date specified in subparagraph (A) shall be treated for purposes of section 502(c)(2) of the Employee Retirement Income Security Act of 1974 as a failure or refusal by the plan administrator to file the annual report required to be filed with the Secretary under section 101(b)(1) of such Act.\nIn any case in which it is certified under subparagraph (A) that a multiemployer plan is or will be in endangered or critical status for a plan year or in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the endangered or critical status to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor. In any case in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall notify the Secretary of such election not later than 30 days after the date of such certification or such other time as the Secretary may prescribe by regulations or other guidance.\nThe Secretary, in consultation with the Secretary of Labor, shall prescribe a model notice that a multiemployer plan may use to satisfy the requirements under clauses (ii) and (iii).\nIn any case in which it is certified under subparagraph (A)(i) that a multiemployer plan will be in critical status for any of 5 succeeding plan years (but not for the current plan year) and the plan sponsor of such plan has not made an election to be in critical status for the plan year under paragraph (4), the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the projected critical status to the Pension Benefit Guaranty Corporation.\nFor purposes of this section, a plan in critical status shall be treated as in critical and declining status if the plan is described in one or more of subparagraphs (A), (B), (C), and (D) of paragraph (2) and the plan is projected to become insolvent within the meaning of section 418E during the current plan year or any of the 14 succeeding plan years (19 succeeding plan years if the plan has a ratio of inactive participants to active participants that exceeds 2 to 1 or if the funded percentage of the plan is less than 80 percent).\nIf an eligible multiemployer plan receiving special financial assistance under section 4262 of the Employee Retirement Income Security Act of 1974 meets the requirements of subsection (k)(2), notwithstanding the preceding paragraphs of this subsection, the plan shall be deemed to be in critical status for plan years beginning with the plan year in which the effective date for such assistance occurs and ending with the last plan year ending in 2051.\nParagraph (1) shall not apply to a plan year if such year is in a funding plan adoption period or funding improvement period by reason of the plan being in endangered status for a preceding plan year. For purposes of this section, such preceding plan year shall be the initial determination year with respect to the funding improvement plan to which it relates.\nNo accumulated funding deficiency for the last plan year during the funding improvement period (taking into account any extension of amortization periods under section 431(d)).\nIn the case of a plan in seriously endangered status, except as provided in paragraph (5), subparagraph (A)(i)(II) shall be applied by substituting “20 percent” for “33 percent”.\nIn the case of a plan in seriously endangered status, except as provided in paragraph (5), subparagraph (A) shall be applied by substituting “15-year period” for “10-year period”.\nIf the plan’s actuary certifies under subsection (b)(3)(A) for a plan year in any funding plan adoption period or funding improvement period that the plan is no longer in endangered status and is not in critical status, the funding plan adoption period or funding improvement period, whichever is applicable, shall end as of the close of the preceding plan year.\nIf the plan’s actuary certifies under subsection (b)(3)(A) for a plan year in any funding plan adoption period or funding improvement period that the plan is in critical status, the funding plan adoption period or funding improvement period, whichever is applicable, shall end as of the close of the plan year preceding the first plan year in the rehabilitation period with respect to such status.\nIf the plan’s actuary certifies under subsection (b)(3)(A) for the first plan year following the close of the period described in subparagraph (A) that the plan is in endangered status, the provisions of this subsection and subsection (d) shall be applied as if such first plan year were an initial determination year, except that the plan may not be amended in a manner inconsistent with the funding improvement plan in effect for the preceding plan year until a new funding improvement plan is adopted.\nNotwithstanding subparagraph (A)(ii), if, for any plan year ending after the date described in subparagraph (A)(ii), the plan actuary certifies (at the time of the annual certification under subsection (b)(3)(A) for such plan year) that, based on the terms of the plan and collective bargaining agreements in effect at the time of that annual certification, the plan is not projected to be able to meet the requirements of paragraph (3)(A) (without regard to paragraphs (3)(B) and (4)(B)), paragraphs (3)(B) and (4)(B) shall continue to apply for such year.\nThe plan sponsor shall annually update the funding improvement plan and shall file the update with the plan’s annual report under section 104 of the Employee Retirement Income Security Act of 1974.\nThe plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experience of the plan.\nA schedule of contribution rates provided by the plan sponsor and relied upon by bargaining parties in negotiating a collective bargaining agreement shall remain in effect for the duration of that collective bargaining agreement.\nThe date specified in this subparagraph is the date which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) or (B) expires.\nFor purposes of this section, the term “funding plan adoption period” means the period beginning on the date of the certification under subsection (b)(3)(A) for the initial determination year and ending on the day before the first day of the funding improvement period.\nA plan may not be amended after the date of the adoption of a funding improvement plan under subsection (c) so as to be inconsistent with the funding improvement plan.\nA plan may not be amended after the date of the adoption of a funding improvement plan under subsection (c) so as to increase benefits, including future benefit accruals, unless the plan actuary certifies that such increase is paid for out of additional contributions not contemplated by the funding improvement plan, and, after taking into account the benefit increase, the multiemployer plan still is reasonably expected to meet the applicable benchmark on the schedule contemplated in the funding improvement plan.\nParagraph (1) shall not apply to a plan year if such year is in a rehabilitation plan adoption period or rehabilitation period by reason of the plan being in critical status for a preceding plan year. For purposes of this section, such preceding plan year shall be the initial critical year with respect to the rehabilitation plan to which it relates.\nThe plan sponsor shall annually update the rehabilitation plan and shall file the update with the plan’s annual report under section 104 of the Employee Retirement Income Security Act of 1974.\nThe plan sponsor shall annually update any schedule of contribution rates provided under this subsection to reflect the experience of the plan.\nA schedule of contribution rates provided by the plan sponsor and relied upon by bargaining parties in negotiating a collective bargaining agreement shall remain in effect for the duration of that collective bargaining agreement.\nThe date specified in this subparagraph is the date which is 180 days after the date on which the collective bargaining agreement described in clause (ii) or (iii) expires.\nFor purposes of this section, the term “rehabilitation plan adoption period” means the period beginning on the date of the certification under subsection (b)(3)(A) for the initial critical year and ending on the day before the first day of the rehabilitation period.\nEach employer otherwise obligated to make a contribution for the initial critical year shall be obligated to pay to the plan for such year a surcharge equal to 5 percent of the contribution otherwise required under the applicable collective bargaining agreement (or other agreement pursuant to which the employer contributes). For each succeeding plan year in which the plan is in critical status for a consecutive period of years beginning with the initial critical year, the surcharge shall be 10 percent of the contribution otherwise so required.\nThe surcharges under subparagraph (A) shall be due and payable on the same schedule as the contributions on which the surcharges are based. Any failure to make a surcharge payment shall be treated as a delinquent contribution under section 515 of the Employee Retirement Income Security Act of 1974 and shall be enforceable as such.\nThe surcharge under this paragraph shall cease to be effective with respect to employees covered by a collective bargaining agreement (or other agreement pursuant to which the employer contributes), beginning on the effective date of a collective bargaining agreement (or other such agreement) that includes terms consistent with a schedule presented by the plan sponsor under paragraph (1)(B)(i), as modified under subparagraph (B) of paragraph (3).\nThe surcharge under this paragraph shall not apply to an employer until 30 days after the employer has been notified by the plan sponsor that the plan is in critical status and that the surcharge is in effect.\nNotwithstanding any provision of a plan to the contrary, the amount of any surcharge under this paragraph shall not be the basis for any benefit accrual under the plan.\nNotwithstanding section 411(d)(6), the plan sponsor shall, subject to the notice requirement under subparagraph (C), make any reductions to adjustable benefits which the plan sponsor deems appropriate, based upon the outcome of collective bargaining over the schedule or schedules provided under paragraph (1)(B)(i).\nExcept in the case of adjustable benefits described in clause (iv)(III), the plan sponsor of a plan in critical status shall not reduce adjustable benefits of any participant or beneficiary whose benefit commencement date is before the date on which the plan provides notice to the participant or beneficiary under subsection (b)(3)(D) for the initial critical year.\nThe plan sponsor shall include in the schedules provided to the bargaining parties an allowance for funding the benefits of participants with respect to whom contributions are not currently required to be made, and shall reduce their benefits to the extent permitted under this title and considered appropriate by the plan sponsor based on the plan’s then current overall funding status.\nExcept as provided in subparagraph (A)(iv)(III), nothing in this paragraph shall be construed to permit a plan to reduce the level of a participant’s accrued benefit payable at normal retirement age.\nNotwithstanding section 411(d)(6) and subject to subparagraphs (B) through (I), the plan sponsor of a plan in critical and declining status may, by plan amendment, suspend benefits which the sponsor deems appropriate.\nFor purposes of this subsection, the term “suspension of benefits” means the temporary or permanent reduction of any current or future payment obligation of the plan to any participant or beneficiary under the plan, whether or not in pay status at the time of the suspension of benefits.\nAny suspension of benefits made under subparagraph (A) shall remain in effect until the earlier of when the plan sponsor provides benefit improvements in accordance with subparagraph (E) or the suspension of benefits expires by its own terms.\nThe plan shall not be liable for any benefit payments not made as a result of a suspension of benefits under this paragraph.\nFor purposes of this paragraph, all references to suspensions of benefits, increases in benefits, or resumptions of suspended benefits with respect to participants shall also apply with respect to benefits of beneficiaries or alternative payees of participants.\nIn the case of a plan with 10,000 or more participants, not later than 60 days prior to the plan sponsor submitting an application to suspend benefits, the plan sponsor shall select a participant of the plan in pay status to act as a retiree representative. The retiree representative shall advocate for the interests of the retired and deferred vested participants and beneficiaries of the plan throughout the suspension approval process.\nThe plan shall provide for reasonable expenses by the retiree representative, including reasonable legal and actuarial support, commensurate with the plan’s size and funded status.\nDuties performed pursuant to subclause (I) shall not be subject to section 4975. The preceding sentence shall not apply to those duties associated with an application to suspend benefits pursuant to subparagraph (G) that are performed by the retiree representative who is also a plan trustee.\nThe projected value of the total liabilities for benefit improvements for participants and beneficiaries not in pay status by the date of the first day of the plan year in which the benefit improvements are proposed to take effect, as determined as of such date, may not exceed the projected value of the liabilities arising from benefit improvements for participants and beneficiaries with benefit commencement dates prior to the first day of such plan year, as so determined.\nThe plan sponsor shall equitably distribute any increase in total liabilities for benefit improvements in clause (i) to some or all of the participants and beneficiaries whose benefit commencement date is before the date of the first day of the plan year in which the benefit improvements are proposed to take effect, taking into account the relevant factors described in subparagraph (D)(vi) and the extent to which the benefits of the participants and beneficiaries were suspended.\nThe plan sponsor may increase liabilities of the plan through a resumption of benefits for participants and beneficiaries in pay status only if the plan sponsor equitably distributes the value of resumed benefits to some or all of the participants and beneficiaries in pay status, taking into account the relevant factors described in subparagraph (D)(vi).\nExcept for resumptions of suspended benefits described in clause (iii), the limitations on benefit improvements while a suspension of benefits is in effect under this paragraph shall be in addition to any other applicable limitations on increases in benefits imposed on a plan.\nFor purposes of this subparagraph, the term “benefit improvement” means, with respect to a plan, a resumption of suspended benefits, an increase in benefits, an increase in the rate at which benefits accrue, or an increase in the rate at which benefits become nonforfeitable under the plan.\nAny notice provided under clause (i) shall fulfill the requirement for notice of a significant reduction in benefits described in section 4980F.\nThe Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall in the guidance prescribed under clause (iii)(I) establish a model notice that a plan sponsor may use to meet the requirements of this subparagraph.\nThe plan sponsor of a plan in critical and declining status for a plan year that seeks to suspend benefits must submit an application to the Secretary of the Treasury for approval of the suspensions of benefits. If the plan sponsor submits an application for approval of the suspensions, the Secretary of the Treasury shall approve, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, the application upon finding that the plan is eligible for the suspensions and has satisfied the criteria of subparagraphs (C), (D), (E), and (F).\nNot later than 30 days after receipt of the application under clause (i), the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall publish a notice in the Federal Register soliciting comments from contributing employers, employee organizations, and participants and beneficiaries of the plan for which an application was made and other interested parties. The application for approval of the suspension of benefits shall be published on the website of the Department of the Treasury.\nThe Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall approve or deny any application for suspensions of benefits under this paragraph within 225 days after the submission of such application. An application for suspension of benefits shall be deemed approved unless, within such 225 days, the Secretary of the Treasury notifies the plan sponsor that it has failed to satisfy one or more of the criteria described in this paragraph. If the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, rejects a plan sponsor’s application, the Secretary of the Treasury shall provide notice to the plan sponsor detailing the specific reasons for the rejection, including reference to the specific requirement not satisfied. Approval or denial by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, of an application shall be treated as final agency action for purposes of  section 704 of title 5 , United States Code.\nIn evaluating whether the plan sponsor has met the criteria specified in clause (ii) of subparagraph (C), the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall review the plan sponsor’s consideration of factors under such clause.\nIn evaluating the plan sponsor’s application, the Secretary of the Treasury shall accept the plan sponsor’s determinations unless it concludes, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, that the plan sponsor’s determinations were clearly erroneous.\nNo suspension of benefits may take effect pursuant to this paragraph prior to a vote of the participants of the plan with respect to the suspension.\nNot later than 30 days after approval of the suspension by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, under subparagraph (G), the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall administer a vote of participants and beneficiaries of the plan. Except as provided in clause (v), the suspension shall go into effect following the vote unless a majority of all participants and beneficiaries of the plan vote to reject the suspension. The plan sponsor may submit a new suspension application to the Secretary of the Treasury for approval in any case in which a suspension is prohibited from taking effect pursuant to a vote under this subparagraph.\nIt is the sense of Congress that, depending on the size and resources of the plan and geographic distribution of the plan’s participants, the plan sponsor should take such steps as may be necessary to inform participants about proposed benefit suspensions through in-person meetings, telephone or internet-based communications, mailed information, or by other means.\nNot later than 30 days after a determination by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, that the plan is systemically important, the Participant and Plan Sponsor Advocate selected under section 4004 of the Employee Retirement Income Security Act of 1974 may submit recommendations to the Secretary of the Treasury with respect to the suspension or any revisions to the suspension.\nFor purposes of this subparagraph, a systemically important plan is a plan with respect to which the Pension Benefit Guaranty Corporation projects the present value of projected financial assistance payments exceeds $1,000,000,000 if suspensions are not implemented.\nFor calendar years beginning after 2015, there shall be substituted for the dollar amount specified in item (aa) an amount equal to the product of such dollar amount and a fraction, the numerator of which is the contribution and benefit base (determined under section 230 of the Social Security Act) for the preceding calendar year and the denominator of which is such contribution and benefit base for calendar year 2014. If the amount otherwise determined under this item is not a multiple of $1,000,000, such amount shall be rounded to the next lowest multiple of $1,000,000.\nIn any case in which a suspension goes into effect following a vote pursuant to clause (ii) (or following a determination under clause (v) that the plan is a systemically important plan), the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall issue a final authorization to suspend with respect to the suspension not later than 7 days after such vote (or, in the case of a suspension that goes into effect under clause (v), at a time sufficient to allow the implementation of the suspension prior to the end of the 90-day period described in clause (v)(I)).\nAn action by the plan sponsor challenging the denial of an application for suspension of benefits by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, may only be brought following such denial.\nAn action challenging a suspension of benefits under this paragraph may only be brought following a final authorization to suspend by the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, under subparagraph (H)(vi).\nA court shall review an action challenging a suspension of benefits under this paragraph in accordance with  section 706 of title 5 , United States Code.\nA court reviewing an action challenging a suspension of benefits under this paragraph may not grant a temporary injunction with respect to such suspension unless the court finds a clear and convincing likelihood that the plaintiff will prevail on the merits of the case.\nA participant or beneficiary affected by a benefit suspension under this paragraph shall not have a cause of action under this title.\nNo action challenging a suspension of benefits following the final authorization to suspend or the denial of an application for suspension of benefits pursuant to this paragraph may be brought after one year after the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action.\nA plan may not be amended after the date of the adoption of a rehabilitation plan under subsection (e) so as to be inconsistent with the rehabilitation plan.\nA plan may not be amended after the date of the adoption of a rehabilitation plan under subsection (e) so as to increase benefits, including future benefit accruals, unless the plan actuary certifies that such increase is paid for out of additional contributions not contemplated by the rehabilitation plan, and, after taking into account the benefit increase, the multiemployer plan still is reasonably expected to emerge from critical status by the end of the rehabilitation period on the schedule contemplated in the rehabilitation plan.\nSubparagraph (A) shall not apply to a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant or to any makeup payment in the case of a retroactive annuity starting date or any similar payment of benefits owed with respect to a prior period.\nAny benefit reductions under subsection (e)(8) or (f), or benefit reductions or suspensions while in critical and declining status under subsection (e)(9), unless the withdrawal occurs more than ten years after the effective date of a benefit suspension by a plan in critical and declining status, shall be disregarded in determining a plan’s unfunded vested benefits for purposes of determining an employer’s withdrawal liability under section 4201 of the Employee Retirement Income Security Act of 1974.\nAny surcharges under subsection (e)(7) shall be disregarded in determining the allocation of unfunded vested benefits to an employer under section 4211 of the Employee Retirement Income Security Act of 1974 and in determining the highest contribution rate under section 4219(c) of such Act, except for purposes of determining the unfunded vested benefits attributable to an employer under section 4211(c)(4) of such Act or a comparable method approved under section 4211(c)(5) of such Act.\nAny increase in the contribution rate (or other increase in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) that is required or made in order to enable the plan to meet the requirement of the funding improvement plan or rehabilitation plan shall be disregarded in determining the allocation of unfunded vested benefits to an employer under section 4211 of such Act and in determining the highest contribution rate under section 4219(c) of such Act, except for purposes of determining the unfunded vested benefits attributable to an employer under section 4211(c)(4) of such Act or a comparable method approved under section 4211(c)(5) of such Act.\nFor purposes of this paragraph, any increase in the contribution rate (or other increase in contribution requirements) shall be deemed to be required or made in order to enable the plan to meet the requirement of the funding improvement plan or rehabilitation plan except for increases in contribution requirements due to increased levels of work, employment, or periods for which compensation is provided or additional contributions are used to provide an increase in benefits, including an increase in future benefit accruals, permitted by subsection (d)(1)(B) or (f)(1)(B).\nIn the case of increases in the contribution rate (or other increases in contribution requirements unless due to increased levels of work, employment, or periods for which compensation is provided) disregarded pursuant to paragraph (3), this subsection shall cease to apply as of the expiration date of the collective bargaining agreement in effect when the plan emerges from endangered or critical status. Notwithstanding the preceding sentence, once the plan emerges from critical or endangered status, increases in the contribution rate disregarded pursuant to paragraph (3) shall continue to be disregarded in determining the highest contribution rate under section 4219(c) of such Act for plan years during which the plan was in endangered or critical status.\nThe Pension Benefit Guaranty Corporation shall prescribe simplified methods for the application of this subsection in determining withdrawal liability and payment amounts under section 4219(c) of such Act.\nIf, within 60 days of the due date for adoption of a funding improvement plan under subsection (c) or a rehabilitation plan under subsection (e), the plan sponsor of a plan in endangered status or a plan in critical status has not agreed on a funding improvement plan or rehabilitation plan, then any member of the board or group that constitutes the plan sponsor may require that the plan sponsor enter into an expedited dispute resolution procedure for the development and adoption of a funding improvement plan or rehabilitation plan.\nIn the case of an employer that contributes to a multiemployer plan with respect to both employees who are covered by one or more collective bargaining agreements and employees who are not so covered, if the plan is in endangered status or in critical status, benefits of and contributions for the nonbargained employees, including surcharges on those contributions, shall be determined as if those nonbargained employees were covered under the first to expire of the employer’s collective bargaining agreements in effect when the plan entered endangered or critical status.\nIn the case of an employer that contributes to a multiemployer plan only with respect to employees who are not covered by a collective bargaining agreement, this section shall be applied as if the employer were the bargaining party, and its participation agreement with the plan were a collective bargaining agreement with a term ending on the first day of the plan year beginning after the employer is provided the schedule or schedules described in subsections (c) and (e).\nThe term “accumulated funding deficiency” has the meaning given such term in section 431(a).\nThe term “active participant” means, in connection with a multiemployer plan, a participant who is in covered service under the plan.\nThe term “obligation to contribute” has the meaning given such term under section 4212(a) of the Employee Retirement Income Security Act of 1974.\nNotwithstanding any other provision of this section, the actuary’s determinations with respect to a plan’s normal cost, actuarial accrued liability, and improvements in a plan’s funded percentage under this section shall be based upon the unit credit funding method (whether or not that method is used for the plan’s actuarial valuation).\nThe term “plan sponsor” means, with respect to any multiemployer plan, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.\nIn the case of a plan described in section 404(c) (or a continuation of such plan), such term means the bargaining parties described in paragraph (1).\nThe term “benefit commencement date” means the annuity starting date (or in the case of a retroactive annuity starting date, the date on which benefit payments begin).\nSuch application shall be submitted in accordance with the requirements of such section, including any guidance issued thereunder by the Pension Benefit Guaranty Corporation.\nIn the case of a plan for which a suspension of benefits has been approved under subsection (e)(9), the application shall describe the manner in which suspended benefits will be reinstated in accordance with paragraph (2)(A) and guidance issued by the Secretary if the plan receives special financial assistance.\nFor purposes of clause (i), the interest rate limit is the rate specified in section 430(h)(2)(C)(iii) (disregarding modifications made under clause (iv) of such section) for the month in which the application for special financial assistance is filed by the eligible multiemployer plan or the 3 preceding months, with such specified rate increased by 200 basis points.\nIf a plan determines that use of one or more prior assumptions is unreasonable, the plan may propose in its application to change such assumptions, provided that the plan discloses such changes in its application and describes why such assumptions are no longer reasonable. The plan may not propose a change to the interest rate otherwise required under this subsection for eligibility or financial assistance amount.\nIn the case of a plan applying for special financial assistance under rules providing for temporary priority consideration, as provided in paragraph (4)(C), such plan’s application shall be submitted to the Secretary in addition to the Pension Benefit Guaranty Corporation.\nSpecial financial assistance received by the plan may be used to make benefit payments and pay plan expenses. Such assistance shall be segregated from other plan assets, and shall be invested by the plan in investment-grade bonds or other investments as permitted by regulations or other guidance issued by the Pension Benefit Guaranty Corporation.\nThe Pension Benefit Guaranty Corporation, in consultation with the Secretary, may impose, by regulation or other guidance, reasonable conditions on an eligible multiemployer plan receiving special financial assistance relating to increases in future accrual rates and any retroactive benefit improvements, allocation of plan assets, reductions in employer contribution rates, diversion of contributions and allocation of expenses to other benefit plans, and withdrawal liability.\nSpecial financial assistance received by the plan shall not be taken into account for determining contributions required under section 431.\nIf the plan becomes insolvent within the meaning of section 418E after receiving special financial assistance, the plan shall be subject to all rules applicable to insolvent plans.\nThe plan shall not be eligible to apply for a new suspension of benefits under subsection (e)(9)(G).\nFor purposes of subparagraph (A)(iii), the term “modified funded percentage” means the percentage equal to a fraction the numerator of which is current value of plan assets (as defined in section 3(26) of the Employee Retirement Income Security Act of 1974) and the denominator of which is current liabilities (as defined in section 431(c)(6)(D)).\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nThe Employee Retirement Income Security Act of 1974, referred to in text, is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 . Sections 3, 101, 103, 104, 502, 515, 4004, 4022A, 4201, 4203, 4211, 4212, 4219, 4233, 4245, and 4262 of the Act are classified to sections 1002, 1021, 1023, 1024, 1132, 1145, 1304, 1322a, 1381, 1383, 1391, 1392, 1399, 1413, 1426, and 1432, respectively, of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe enactment of the Pension Protection Act of 2006, referred to in subsec. (e)(4)(B)(i)(II), means the enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\nThe date of enactment of the Multiemployer Pension Reform Act of 2014, referred to in subsec. (e)(9)(D)(vii)(III), is the date of enactment of div. O of  Pub. L. 113–235 , which was approved  Dec. 16, 2014 .\nSection 230 of the Social Security Act, referred to in subsec. (e)(9)(H)(v)(III)(bb), is classified to  section 430 of Title 42 , The Public Health and Welfare.\nThe date of enactment of this subsection, referred to in subsec. (k)(3)(A)(ii), (iv), is the date of enactment of  Pub. L. 117–2 , which was approved  Mar. 11, 2021 .\n2021—Subsec. (a)(4).  Pub. L. 117–2, §\u202f9704(d)(1) , added par. (4).\nSubsec. (b)(7).  Pub. L. 117–2, §\u202f9704(d)(2) , added par. (7).\nSubsec. (k).  Pub. L. 117–2, §\u202f9704(d)(3) , added subsec. (k).\n2018—Subsec. (b)(3)(A)(i).  Pub. L. 115–141, §\u202f401(a)(102) , substituted “in endangered status for such plan year, or would be in endangered status for such plan year but for paragraph (5), whether or not” for “in endangered status for such plan year, whether or not”.\nSubsec. (b)(3)(B)(iv), (v).  Pub. L. 115–141, §\u202f401(a)(103) , redesignated cl. (iv), relating to projections of critical and declining status, as (v).\nSubsec. (b)(3)(D)(iv).  Pub. L. 115–141, §\u202f401(a)(104) , inserted comma after “Labor”.\nSubsec. (e)(8)(C)(iii).  Pub. L. 115–141, §\u202f401(a)(105) , substituted “The Secretary shall” for “the Secretary shall” in concluding provisions.\nSubsec. (f)(3).  Pub. L. 115–141, §\u202f401(a)(106) , amended introductory provisions generally. Prior to amendment, text read as follows: “During the rehabilitation plan adoption period—”.\nSubsec. (g)(1).  Pub. L. 115–141, §\u202f401(a)(107) , substituted “subsection (e)(9)” for “subsection (e)(9))”.\n2014—Subsec. (a)(3).  Pub. L. 113–235, §\u202f201(b)(1) , added par. (3).\nSubsec. (b)(1).  Pub. L. 113–235, §\u202f104(b)(1)(A) , substituted “the plan is not in critical status for the plan year and is not described in paragraph (5),” for “the plan is not in critical status for the plan year”.\nSubsec. (b)(3)(A)(i).  Pub. L. 113–235, §\u202f201(b)(3) , substituted “,\u2000whether” for “and whether” and inserted “,\u2000and whether or not the plan is or will be in critical and declining status for such plan year” before “,\u2000and” at end.\nPub. L. 113–235, §\u202f104(b)(3) , which directed insertion of “,\u2000or would be in endangered status for such plan year but for paragraph (5),” after “endangered status for a plan year”, could not be executed because the phrase “endangered status for a plan year” did not appear in cl. (i).\nPub. L. 113–235, §\u202f102(b)(2)(A) , substituted “or for any of the succeeding 5 plan years, and” for “,\u2000and” at end.\nSubsec. (b)(3)(B)(i).  Pub. L. 113–235, §\u202f102(b)(2)(B)(i) , substituted “Except as provided in clause (iv), in making the determinations” for “In making the determinations”.\nSubsec. (b)(3)(B)(iv).  Pub. L. 113–235, §\u202f201(b)(4) , added cl. (iv) relating to projections of critical and declining status.\nPub. L. 113–235, §\u202f102(b)(2)(B)(ii) , added cl. (iv) relating to projections relating to critical status in succeeding plan years.\nSubsec. (b)(3)(D)(i).  Pub. L. 113–235, §\u202f102(b)(3)(A)(ii) , inserted at end “In any case in which a plan sponsor elects to be in critical status for a plan year under paragraph (4), the plan sponsor shall notify the Secretary of the Treasury of such election not later than 30 days after the date of such certification or such other time as the Secretary of the Treasury may prescribe by regulations or other guidance.”\nPub. L. 113–235, §\u202f102(b)(3)(A)(i) , inserted “or in which a plan sponsor elects to be in critical status for a plan year under paragraph (4)” after “endangered or critical status for a plan year”.\nSubsec. (b)(3)(D)(iii).  Pub. L. 113–235, §\u202f104(b)(2)(B) , added cl. (iii). Former cl. (iii) redesignated (iv).\nSubsec. (b)(3)(D)(iv).  Pub. L. 113–235, §\u202f104(b)(2)(A) , (C), redesignated cl. (iii) as (iv) and substituted “clauses (ii) and (iii)” for “clause (ii)”.\nPub. L. 113–235, §\u202f102(b)(3)(B) , added cl. (iv).\nSubsec. (b)(3)(D)(v).  Pub. L. 113–235, §\u202f104(b)(2)(A) , redesignated cl. (iv) as (v).\nSubsec. (b)(4).  Pub. L. 113–235, §\u202f102(b)(1) , added par. (4).\nSubsec. (b)(5).  Pub. L. 113–235, §\u202f104(b)(1)(B) , added par. (5).\nSubsec. (b)(6).  Pub. L. 113–235, §\u202f201(b)(2) , added par. (6).\nSubsec. (c)(3)(A)(i)(I).  Pub. L. 113–235, §\u202f105(b)(1) , substituted “of the first plan year for which the plan is certified to be in endangered status pursuant to paragraph (b)(3)” for “of such period”.\nSubsec. (c)(3)(A)(ii).  Pub. L. 113–235, §\u202f105(b)(2) , substituted “the last plan year” for “any plan year”.\nSubsec. (c)(7).  Pub. L. 113–235, §\u202f107(b)(1) , amended par. (7) generally. Prior to amendment, par. (7) related to imposition of default schedule where failure to adopt funding improvement plan.\nSubsec. (d).  Pub. L. 113–235, §\u202f106(b) , amended subsec. (d) generally. Prior to amendment, subsec. (d) related to rules for operation of plan during adoption and improvement periods.\nSubsec. (e)(3)(C).  Pub. L. 113–235, §\u202f107(b)(2) , amended subpar. (C) generally. Prior to amendment, subpar. (C) related to imposition of default schedule where failure to adopt rehabilitation plan.\nSubsec. (e)(4)(B).  Pub. L. 113–235, §\u202f103(b) , amended subpar. (B) generally. Prior to amendment, subpar. (B) related to emergence of a plan from critical status.\nSubsec. (e)(9).  Pub. L. 113–235, §\u202f201(b)(5) , added par. (9).\nPub. L. 113–235, §\u202f109(b)(1) , struck out par. (9) which related to adjustments disregarded in withdrawal liability determination.\nSubsec. (f)(3).  Pub. L. 113–235, §\u202f109(b)(2)(A) , redesignated par. (4) as (3) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows “Any benefit reductions under this subsection shall be disregarded in determining a plan’s unfunded vested benefits for purposes of determining an employer’s withdrawal liability under section 4201 of the Employee Retirement Income Security Act of 1974.”\nSubsec. (f)(4).  Pub. L. 113–235, §\u202f109(b)(2)(B) , which directed amendment of par. (4) as redesignated by  section 109(b)(2)(A) of Pub. L. 113–235  by substituting “During the period beginning on the date of the certification under subsection (b)(3)(A) for the initial critical year and ending on the date of the adoption of a rehabilitation plan—” for “During the rehabilitation plan adoption period—”, could not be executed because there was no par. (4) after the amendment by  Pub. L. 113–295, §\u202f109(b)(2)(A) . See below.\nPub. L. 113–235, §\u202f109(b)(2)(A) , redesignated par. (4) as (3).\nSubsec. (g).  Pub. L. 113–235, §\u202f109(b)(4) , added subsec. (g). Former subsec. (g) redesignated (h).\nSubsec. (g)(1).  Pub. L. 113–235, §\u202f201(b)(6) , inserted “,\u2000or benefit reductions or suspensions while in critical and declining status under subsection (e)(9)), unless the withdrawal occurs more than ten years after the effective date of a benefit suspension by a plan in critical and declining status,” after “benefit reductions under subsection (e)(8) or (f)”.\nSubsecs. (h) to (j).  Pub. L. 113–235, §\u202f109(b)(3) , redesignated subsecs. (g) to (i) as (h) to (j), respectively.\n2008—Subsec. (b)(3)(C).  Pub. L. 110–458, §\u202f102(b)(2)(A) , substituted “section 101(b)(1)” for “section 101(b)(4)”.\nSubsec. (b)(3)(D)(iii).  Pub. L. 110–458, §\u202f102(b)(2)(B) , substituted “The Secretary, in consultation with the Secretary of Labor” for “The Secretary of Labor”.\nSubsec. (c)(3)(A)(ii).  Pub. L. 110–458, §\u202f102(b)(2)(C)(i) , substituted “section 431(d)” for “section 304(d)”.\nSubsec. (c)(7)(A)(ii).  Pub. L. 110–458, §\u202f102(b)(2)(C)(ii)(I) , substituted “to adopt a contribution schedule with terms consistent with the funding improvement plan and a schedule from the plan sponsor,” for “to agree on changes to contribution or benefit schedules necessary to meet the applicable benchmarks in accordance with the funding improvement plan,”.\nSubsec. (c)(7)(B).  Pub. L. 110–458, §\u202f102(b)(2)(C)(ii)(II) , added subpar. (B), and struck out former subpar. (B). Prior to amendment, text read as follows: “The date specified in this subparagraph is the earlier of the date—\n“(i) on which the Secretary of Labor certifies that the parties are at an impasse, or\n“(ii) which is 180 days after the date on which the collective bargaining agreement described in subparagraph (A) expires.”\nSubsec. (e)(3)(C)(i)(II).  Pub. L. 110–458, §\u202f102(b)(2)(D)(i)(I) , substituted “to adopt a contribution schedule with terms consistent with the rehabilitation plan and a schedule from the plan sponsor under paragraph (1)(B)(i),” for “contribution or benefit schedules with terms consistent with the rehabilitation plan and the schedule from the plan sponsor under paragraph (1)(B)(i),”.\nSubsec. (e)(3)(C)(ii).  Pub. L. 110–458, §\u202f102(b)(2)(D)(i)(II) , added cl. (ii) and struck out former cl. (ii). Prior to amendment, text read as follows: “The date specified in this clause is the earlier of the date—\n“(I) on which the Secretary of Labor certifies that the parties are at an impasse, or\n“(II) which is 180 days after the date on which the collective bargaining agreement described in clause (i) expires.”\nSubsec. (e)(4)(A)(ii).  Pub. L. 110–458, §\u202f102(b)(2)(D)(ii)(I) , struck out “the date of” after “in effect on”.\nSubsec. (e)(4)(B).  Pub. L. 110–458, §\u202f102(b)(2)(D)(ii)(II) , substituted “but taking” for “and taking”.\nSubsec. (e)(6).  Pub. L. 110–458, §\u202f102(b)(2)(D)(iii) , substituted “the last sentence of paragraph (1)” for “paragraph (1)(B)(i)” in introductory provisions and “establish” for “established” in concluding provisions.\nSubsec. (e)(8)(A)(i).  Pub. L. 110–458, §\u202f102(b)(2)(D)(iv)(I) , substituted “section 411(d)(6)” for “section 204(g)”.\nSubsec. (e)(8)(C)(i)(II).  Pub. L. 110–458, §\u202f102(b)(2)(D)(iv)(II) , inserted “of the Employee Retirement Income Security Act of 1974” after “section 4212(a)”.\nSubsec. (e)(8)(C)(iii).  Pub. L. 110–458, §\u202f102(b)(2)(D)(iv)(IV) , which directed substitution of “the Secretary” for “the Secretary of Labor” in last sentence, was executed by making the substitution for “The Secretary of Labor”, to reflect the probable intent of Congress.\nSubsec. (e)(8)(C)(iii)(I).  Pub. L. 110–458, §\u202f102(b)(2)(D)(iv)(III) , substituted “the Secretary, in consultation with the Secretary of Labor” for “the Secretary of Labor”.\nSubsec. (e)(9)(B).  Pub. L. 110–458, §\u202f102(b)(2)(D)(v) , substituted “the allocation of unfunded vested benefits to an employer” for “an employer’s withdrawal liability”.\nSubsec. (f)(2)(A)(i).  Pub. L. 110–458, §\u202f102(b)(2)(E) , substituted “section 411(a)(9)” for “411(b)(1)(A)” and inserted at end “to a participant or beneficiary whose annuity starting date (as defined in section 417(f)(2)) occurs after the date such notice is sent,”.\nSubsec. (g).  Pub. L. 110–458, §\u202f102(b)(2)(F) , inserted “under subsection (c)” after “for adoption of a funding improvement plan”.\nSubsec. (i)(3).  Pub. L. 110–458, §\u202f102(b)(2)(G)(i) , substituted “section 431(a)” for “section 412(a)”.\nSubsec. (i)(9).  Pub. L. 110–458, §\u202f102(b)(2)(G)(ii) , added par. (9) and struck out former par. (9). Prior to amendment, text read as follows: “In the case of a plan described under section 404(c), or a continuation of such a plan, the term ‘plan sponsor’ means the bargaining parties described under paragraph (1).”\nPub. L. 113–235, div. O, title I, §\u202f102(c) ,  Dec. 16, 2014 ,  128 Stat. 2777 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2014 .”\nPub. L. 113–235, div. O, title I, §\u202f103(c) ,  Dec. 16, 2014 ,  128 Stat. 2779 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2014 .”\nPub. L. 113–235, div. O, title I, §\u202f104(c) ,  Dec. 16, 2014 ,  128 Stat. 2781 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2014 .”\nPub. L. 113–235, div. O, title I, §\u202f105(c) ,  Dec. 16, 2014 ,  128 Stat. 2781 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2014 .”\nPub. L. 113–235, div. O, title I, §\u202f106(c) ,  Dec. 16, 2014 ,  128 Stat. 2783 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2014 .”\nPub. L. 113–235, div. O, title I, §\u202f107(c) ,  Dec. 16, 2014 ,  128 Stat. 2786 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply with respect to plan years beginning after  December 31, 2014 .”\nPub. L. 113–235, div. O, title I, §\u202f109(c) ,  Dec. 16, 2014 ,  128 Stat. 2792 , provided that:  “The amendments made by this section [amending this section and  section 1085 of Title 29 , Labor] shall apply to benefit reductions and increases in the contribution rate or other required contribution increases that go into effect during plan years beginning after  December 31, 2014  and to surcharges the obligation for which accrue on or after  December 31, 2014 .”\nPub. L. 113–235, div. O, title II, §\u202f201(c) ,  Dec. 16, 2014 ,  128 Stat. 2822 , provided that:  “The amendments made by this section [amending this section and sections 1021, 1085, 1303 and 1399 of Title 29, Labor] shall take effect on the date of the enactment of this Act [ Dec. 16, 2014 ].”\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nSection applicable with respect to plan years beginning after 2007, with special rules for certain notices and certain restored benefits, see  section 212(e) of Pub. L. 109–280 , set out as an Effective Date of 2006 Amendment note under  section 412 of this title .\nPub. L. 117–2, title IX, §\u202f9701 ,  Mar. 11, 2021 ,  135 Stat. 186 , provided that: \n “(a)   In General .— Notwithstanding the actuarial certification under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085(b)(3) ] and section 432(b)(3) of the Internal Revenue Code of 1986, if a plan sponsor of a multiemployer plan elects the application of this section, then, for purposes of section 305 of such Act and section 432 of such Code— “(1)  the status of the plan for its first plan year beginning during the period beginning on  March 1, 2020 , and ending on  February 28, 2021 , or the next succeeding plan year (as designated by the plan sponsor in such election), shall be the same as the status of such plan under such sections for the plan year preceding such designated plan year, and \n \n “(2)  in the case of a plan which was in endangered or critical status for the plan year preceding the designated plan year described in paragraph (1), the plan shall not be required to update its plan or schedules under section 305(c)(6) of such Act and section 432(c)(6) of such Code, or section 305(e)(3)(B) of such Act and section 432(e)(3)(B) of such Code, whichever is applicable, until the plan year following the designated plan year described in paragraph (1). \n \n \n “(b)   Exception for Plans Becoming Critical During Election .— If— “(1)  an election was made under subsection (a) with respect to a multiemployer plan, and \n \n “(2)  such plan has, without regard to such election, been certified by the plan actuary under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085(b)(3) ] and section 432(b)(3) of the Internal Revenue Code of 1986 to be in critical status for the designated plan year described in subsection (a)(1), then such plan shall be treated as a plan in critical status for such plan year for purposes of applying section 4971(g)(1)(A) of such Code, section 302(b)(3) of such Act [ 29 U.S.C. 1082(b)(3) ] (without regard to the second sentence thereof), and section 412(b)(3) of such Code (without regard to the second sentence thereof). \n \n \n “(c)   Election and Notice.— “(1)   Election .— An election under subsection (a)— “(A)  shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate may prescribe and, once made, may be revoked only with the consent of the Secretary, and \n \n “(B)  if made— “(i)  before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act [ 29 U.S.C. 1085(b)(3) ] and section 432(b)(3) of such Code, shall be included with such annual certification, and \n \n “(ii)  after such date, shall be submitted to the Secretary or the Secretary’s delegate not later than 30 days after the date of the election. \n \n \n \n “(2)   Notice to participants.— “(A)   In general .— Notwithstanding section 305(b)(3)(D) of the Employee Retirement Income Security Act of 1974 and section 432(b)(3)(D) of the Internal Revenue Code of 1986, if, by reason of an election made under subsection (a), the plan is in neither endangered nor critical status— “(i)  the plan sponsor of a multiemployer plan shall not be required to provide notice under such sections, and \n \n “(ii)  the plan sponsor shall provide to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor a notice of the election under subsection (a) and such other information as the Secretary of the Treasury (in consultation with the Secretary of Labor) may require— \u2001\u2001\u2001\u2001\u2001“(I)  if the election is made before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act and section 432(b)(3) of such Code, not later than 30 days after the date of the certification, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  if the election is made after such date, not later than 30 days after the date of the election. \n \n \n \n “(B)   Notice of endangered status .— Notwithstanding section 305(b)(3)(D) of such Act and section 432(b)(3)(D) of such Code, if the plan is certified to be in critical status for any plan year but is in endangered status by reason of an election made under subsection (a), the notice provided under such sections shall be the notice which would have been provided if the plan had been certified to be in endangered status.”\nPub. L. 117–2, title IX, §\u202f9702 ,  Mar. 11, 2021 ,  135 Stat. 188 , provided that: \n “(a)   In General .— If the plan sponsor of a multiemployer plan which is in endangered or critical status for a plan year beginning in 2020 or 2021 (determined after application of section 9701) elects the application of this section, then, for purposes of section 305 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085 ] and section 432 of the Internal Revenue Code of 1986, the plan’s funding improvement period or rehabilitation period, whichever is applicable, shall be extended by 5 years. \n \n “(b)   Definitions and Special Rules .— For purposes of this section— “(1)   Election .— An election under this section shall be made at such time, and in such manner and form, as (in consultation with the Secretary of Labor) the Secretary of the Treasury or the Secretary’s delegate may prescribe. \n \n “(2)   Definitions .— Any term which is used in this section which is also used in section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such sections. \n \n \n “(c)   Effective Date .— This section shall apply to plan years beginning after  December 31, 2019 .”\nPub. L. 113–235, div. O, title II, §\u202f201(b)(7) ,  Dec. 16, 2014 ,  128 Stat. 2822 , provided that:  “Not later than 180 days after the date of the enactment of this Act [ Dec. 16, 2014 ], the Secretary of the Treasury, in consultation with the Pension Benefit Guaranty Corporation and the Secretary of Labor, shall publish appropriate guidance to implement section 432(e)(9) of the Internal Revenue Code of 1986.”\nPub. L. 110–458, title II, §\u202f204 ,  Dec. 23, 2008 ,  122 Stat. 5118 , provided that: \n “(a)   In General .— Notwithstanding the actuarial certification under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085(b)(3) ] and section 432(b)(3) of the Internal Revenue Code of 1986, if a plan sponsor of a multiemployer plan elects the application of this section, then, for purposes of section 305 of such Act and section 432 of such Code— “(1)  the status of the plan for its first plan year beginning during the period beginning on  October 1, 2008 , and ending on  September 30, 2009 , shall be the same as the status of such plan under such sections for the plan year preceding such plan year, and \n \n “(2)  in the case of a plan which was in endangered or critical status for the preceding plan year described in paragraph (1), the plan shall not be required to update its plan or schedules under section 305(c)(6) of such Act and section 432(c)(6) of such Code, or section 305(e)(3)(B) of such Act and section 432(e)(3)(B) of such Code, whichever is applicable, until the plan year following the first plan year described in paragraph (1). \n \n\n If section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 did not apply to the preceding plan year described in paragraph (1), the plan actuary shall make a certification of the status of the plan under section 305(b)(3) of such Act and section 432(b)(3) of such Code for the preceding plan year in the same manner as if such sections had applied to such preceding plan year. \n \n “(b)   Exception for Plans Becoming Critical During Election .— If— “(1)  an election was made under subsection (a) with respect to a multiemployer plan, and \n \n “(2)  such plan has, without regard to such election, been certified by the plan actuary under section 305(b)(3) of such Act [ 29 U.S.C. 1085(b)(3) ] and section 432(b)(3) of such Code to be in critical status for the first plan year described in subsection (a)(1), \n \n\n then such plan shall be treated as a plan in critical status for such plan year for purposes of applying section 4971(g)(1)(A) of such Code, section 302(b)(3) of such Act [ 29 U.S.C. 1082(b)(3) ] (without regard to the second sentence thereof), and section 412(b)(3) of such Code (without regard to the second sentence thereof). \n \n “(c)   Election and Notice.— “(1)   Election .— An election under subsection (a) shall— “(A)  be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate may prescribe and, once made, may be revoked only with the consent of the Secretary, and \n \n “(B)  if the election is made— “(i)  before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act [ 29 U.S.C. 1085(b)(3) ] and section 432(b)(3) of such Code, be included with such annual certification, and \n \n “(ii)  after such date, be submitted to the Secretary or the Secretary’s delegate not later than 30 days after the date of the election. \n \n \n \n “(2)   Notice to participants.— “(A)   In general .— Notwithstanding section 305(b)(3)(D) of such Act and section 431(b)(3)(D) of such Code, if the plan is neither in endangered nor critical status by reason of an election made under subsection (a)— “(i)  the plan sponsor of a multiemployer plan shall not be required to provide notice under such sections, and \n \n “(ii)  the plan sponsor shall provide to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor a notice of the election and such other information as the Secretary of the Treasury (in consultation with the Secretary of Labor) may require— \u2001\u2001\u2001\u2001\u2001“(I)  if the election is made before the date the annual certification is submitted to the Secretary or the Secretary’s delegate under section 305(b)(3) of such Act and section 432(b)(3) of such Code, not later than 30 days after the date of the certification, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  if the election is made after such date, not later than 30 days after the date of the election. \n \n \n \n “(B)   Notice of endangered status .— Notwithstanding section 305(b)(3)(D) of such Act and section 431(b)(3)(D) of such Code, if the plan is certified to be in critical status for any plan year but is in endangered status by reason of an election made under subsection (a), the notice provided under such sections shall be the notice which would have been provided if the plan had been certified to be in endangered status.”\nPub. L. 110–458, title II, §\u202f205 ,  Dec. 23, 2008 ,  122 Stat. 5120 , provided that: \n “(a)   In General .— If the plan sponsor of a multiemployer plan which is in endangered or critical status for a plan year beginning in 2008 or 2009 (determined after application of section 204 [of  Pub. L. 110–458 , set out above]) elects the application of this section, then, for purposes of section 305 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085 ] and section 432 of the Internal Revenue Code of 1986— “(1)  except as provided in paragraph (2), the plan’s funding improvement period or rehabilitation period, whichever is applicable, shall be 13 years rather than 10 years, and \n \n “(2)  in the case of a plan in seriously endangered status, the plan’s funding improvement period shall be 18 years rather than 15 years. \n \n \n “(b)   Definitions and Special Rules .— For purposes of this section— “(1)   Election .— An election under this section shall be made at such time, and in such manner and form, as (in consultation with the Secretary of Labor) the Secretary of the Treasury or the Secretary’s delegate may prescribe. \n \n “(2)   Definitions .— Any term which is used in this section which is also used in section 305 of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1085 ] and section 432 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such sections. \n \n \n “(c)   Effective Date .— This section shall apply to plan years beginning after  December 31, 2007 .”\nFor applicability of this section to a multiemployer plan that is a party to an agreement that was approved by the Pension Benefit Guaranty Corporation prior to  June 30, 2005 , and that increases benefits and provides for certain withdrawal liability rules, see  section 206 of Pub. L. 109–280 , set out as a note under  section 412 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT LIMITATIONS'},
  'content': 'For purposes of section 412, the term “accumulated funding deficiency” for a CSEC plan means the excess of the total charges to the funding standard account for all plan years (beginning with the first plan year to which section 412 applies) over the total credits to such account for such years or, if less, the excess of the total charges to the alternative minimum funding standard account for such plan years over the total credits to such account for such years.\nEach plan to which this section applies shall establish and maintain a funding standard account. Such account shall be credited and charged solely as provided in this section.\nExcept as provided in subparagraph (B), the funding standard account (and items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs.\nAmortization schedules for amounts described in paragraphs (2) and (3) that are in effect as of the last day of the last plan year beginning before  January 1, 2014 , by reason of section 104 of the Pension Protection Act of 2006 shall remain in effect pursuant to their terms and this section, except that such amounts shall not be amortized again under this section.\nFor purposes of this section, normal costs, accrued liability, past service liabilities, and experience gains and losses shall be determined under the funding method used to determine costs under the plan.\nFor purposes of this section, the value of the plan’s assets shall be determined on the basis of any reasonable actuarial method of valuation which takes into account fair market value and which is permitted under regulations prescribed by the Secretary.\nThe Secretary may by regulations provide that the value of any dedicated bond portfolio of a plan shall be determined by using the interest rate under section 412(b)(5) (as in effect on the day before the enactment of the Pension Protection Act of 2006).\nAll funding methods available to CSEC plans under section 412 (as in effect on the day before the enactment of the Pension Protection Act of 2006) shall continue to be available under this section.\nIf the funding method for a plan is changed, the new funding method shall become the funding method used to determine costs and liabilities under the plan only if the change is approved by the Secretary. If the plan year for a plan is changed, the new plan year shall become the plan year for the plan only if the change is approved by the Secretary.\nNo actuarial assumption (other than the assumptions described in subsection (h)(3)) used to determine the current liability for a plan to which this subparagraph applies may be changed without the approval of the Secretary.\nFor purposes of this section, a determination of experience gains and losses and a valuation of the plan’s liability shall be made not less frequently than once every year, except that such determination shall be made more frequently to the extent required in particular cases under regulations prescribed by the Secretary.\nExcept as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year.\nThe valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 100 percent of the plan’s current liability.\nInformation under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.\nA change in funding method to use a prior year valuation, as provided in clause (ii), may not be made unless as of the valuation date within the prior plan year, the value of the assets of the plan are not less than 125 percent of the plan’s current liability.\nIn determining projected benefits, the funding method of a collectively bargained CSEC plan described in section 413(a) shall anticipate benefit increases scheduled to take effect during the term of the collective bargaining agreement applicable to the plan.\nA CSEC plan which uses a funding method that requires contributions in all years not less than those required under the entry age normal funding method may maintain an alternative minimum funding standard account for any plan year. Such account shall be credited and charged solely as provided in this subsection.\nThe alternative minimum funding standard account (and items therein) shall be charged or credited with interest in the manner provided under subsection (b)(5) with respect to the funding standard account.\nThe period for which interest is charged under this subsection with regard to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan (determined without regard to subsection (c)(9)).\nFor purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid.\nThere shall be 4 required installments for each plan year.\nThe amount of any required installment shall be 25 percent of the required annual payment.\nA plan to which this paragraph applies shall be treated as failing to pay the full amount of any required installment to the extent that the value of the liquid assets paid in such installment is less than the liquidity shortfall (whether or not such liquidity shortfall exceeds the amount of such installment required to be paid but for this paragraph).\nFor purposes of paragraph (1), any portion of an installment that is treated as not paid under subparagraph (A) shall continue to be treated as unpaid until the close of the quarter in which the due date for such installment occurs.\nIf the amount of any required installment is increased by reason of subparagraph (A), in no event shall such increase exceed the amount which, when added to prior installments for the plan year, is necessary to increase the funded current liability percentage (taking into account the expected increase in current liability due to benefits accruing during the plan year) to 100 percent.\nThe term “liquidity shortfall” means, with respect to any required installment, an amount equal to the excess (as of the last day of the quarter for which such installment is made) of the base amount with respect to such quarter over the value (as of such last day) of the plan’s liquid assets.\nThe term “base amount” means, with respect to any quarter, an amount equal to 3 times the sum of the adjusted disbursements from the plan for the 12 months ending on the last day of such quarter.\nIf the amount determined under subclause (I) exceeds an amount equal to 2 times the sum of the adjusted disbursements from the plan for the 36 months ending on the last day of the quarter and an enrolled actuary certifies to the satisfaction of the Secretary that such excess is the result of nonrecurring circumstances, the base amount with respect to such quarter shall be determined without regard to amounts related to those nonrecurring circumstances.\nThe term “disbursements from the plan” means all disbursements from the trust, including purchases of annuities, payments of single sums and other benefits, and administrative expenses.\nThe term “liquid assets” means cash, marketable securities and such other assets as specified by the Secretary in regulations.\nThe term “quarter” means, with respect to any required installment, the 3-month period preceding the month in which the due date for such installment occurs.\nThe Secretary may prescribe such regulations as are necessary to carry out this paragraph.\nIn applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto.\nThis subsection shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.\nThis subsection shall apply to a CSEC plan for any plan year for which the funded current liability percentage of such plan is less than 100 percent. This subsection shall not apply to any plan to which section 4021 of the Employee Retirement Income Security Act of 1974 does not apply (as such section is in effect on the date of the enactment of the Retirement Protection Act of 1994).\nA person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment.\nThe lien imposed by paragraph (1) shall arise on the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence.\nAny amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 of the Employee Retirement Income Security Act of 1974 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien.\nAny lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by any contributing employer (or any member of the controlled group of the contributing employer).\nThe terms “due date” and “required installment” have the meanings given such terms by subsection (f), except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under this section.\nThe term “controlled group” means any group treated as a single employer under subsections (b), (c), (m), and ( o ) of section 414.\nThe term “current liability” means all liabilities to employees and their beneficiaries under the plan.\nFor purposes of paragraph (1), any unpredictable contingent event benefit shall not be taken into account until the event on which the benefit is contingent occurs.\nThe rate of interest used to determine current liability under this section shall be the third segment rate determined under section 430(h)(2)(C).\nThe Secretary may by regulation prescribe mortality tables to be used in determining current liability under this subsection. Such tables shall be based upon the actual experience of pension plans and projected trends in such experience. In prescribing such tables, the Secretary shall take into account results of available independent studies of mortality of individuals covered by pension plans.\nThe Secretary shall periodically (at least every 5 years) review any tables in effect under this subsection and shall, to the extent the Secretary determines necessary, by regulation update the tables to reflect the actual experience of pension plans and projected trends in such experience.\nIn the case of plan years beginning after  December 31, 1995 , the Secretary shall establish mortality tables which may be used (in lieu of the tables under subparagraph (B)) to determine current liability under this subsection for individuals who are entitled to benefits under the plan on account of disability. The Secretary shall establish separate tables for individuals whose disabilities occur in plan years beginning before  January 1, 1995 , and for individuals whose disabilities occur in plan years beginning on or after such date.\nIn the case of disabilities occurring in plan years beginning after  December 31, 1994 , the tables under clause (i) shall apply only with respect to individuals described in such subclause who are disabled within the meaning of title II of the Social Security Act and the regulations thereunder.\nIn the case of a participant to whom this paragraph applies, only the applicable percentage of the years of service before such individual became a participant shall be taken into account in computing the current liability of the plan.\nFor purposes of this subparagraph, the applicable percentage shall be determined as follows: \n \n \n \n \n \n \n \n \u2001 If the years of participation are: The applicable percentage is: \n \n \n \u2001 1 20\u202f \n \u2001 2 40\u202f \n \u2001 3 60\u202f \n \u2001 4 80\u202f \n \u2001 5 or more 100.\nAn employer may elect not to have this subparagraph apply. Such an election, once made, may be revoked only with the consent of the Secretary.\nIn the case of a CSEC plan that uses a spread gain funding method, for purposes of this subsection, the term “normal cost” means normal cost as determined under the entry age normal funding method.\nIn the case of a CSEC plan that is in funding restoration status for a plan year, no amendment to such plan may take effect during such plan year if such amendment has the effect of increasing liabilities of the plan by means of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable. This paragraph shall not apply to any plan amendment that is required to comply with any applicable law. This paragraph shall cease to apply with respect to any plan year, effective as of the first day of the plan year (or if later, the effective date of the amendment) upon payment by the plan sponsor of a contribution to the plan (in addition to any contribution required under this section without regard to this paragraph) in an amount equal to the increase in the funding liability of the plan attributable to the plan amendment.\nThe sponsor of a CSEC plan shall establish a written funding restoration plan within 180 days of the receipt by the plan sponsor of a certification from the plan actuary that the plan is in funding restoration status for a plan year. Such funding restoration plan shall consist of actions that are calculated, based on reasonably anticipated experience and reasonable actuarial assumptions, to increase the plan’s funded percentage to 100 percent over a period that is not longer than the greater of 7 years or the shortest amount of time practicable. Such funding restoration plan shall take into account contributions required under this section (without regard to this paragraph). If a plan remains in funding restoration status for 2 or more years, such funding restoration plan shall be updated each year after the 1st such year within 180 days of receipt by the plan sponsor of a certification from the plan actuary that the plan remains in funding restoration status for the plan year.\nA CSEC plan shall be treated as in funding restoration status for a plan year if the plan’s funded percentage as of the beginning of such plan year is less than 80 percent.\nThe term “funding liability” for a plan year means the present value of all benefits accrued or earned under the plan as of the beginning of the plan year, based on the assumptions used by the plan pursuant to this section, including the interest rate described in subsection (b)(5)(A) (without regard to subsection (b)(5)(B)).\nThe term “spread gain funding method” has the meaning given such term under rules and forms issued by the Secretary.\nThe term “plan sponsor” means, with respect to a CSEC plan, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.\nSection 412 (as in effect on the day before the enactment of the Pension Protection Act of 2006), referred to in subsecs. (b)(2)(E), (c)(2)(B), (5)(A), and (f)(5)(B), means  section 412 of this title  as in effect on the day before the enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .  Section 111(a) of Pub. L. 109–280  generally amended section 412.\nSection 104 of the Pension Protection Act of 2006, referred to in subsec. (b)(6), is  section 104 of Pub. L. 109–280 , which is set out as a note under  section 401 of this title .\nThe Social Security Act, referred to in subsecs. (c)(4)(A) and (h)(3)(C)(ii), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. Title II of the Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe Employee Retirement Income Security Act of 1974, referred to in subsecs. (c)(5)(C)(ii)(II), (d), and (g)(2), (4)(C), is  Pub. L. 93–406 ,  Sept. 2, 1974 ,  88 Stat. 829 , which is classified principally to chapter 18 (§\u202f1001 et seq.) of Title 29, Labor. Title IV of the Act is classified principally to subchapter III (§\u202f1301 et seq.) of chapter 18 of Title 29. Sections 4001, 4006, 4021, and 4068 of the Act are classified to sections 1301, 1306, 1321, and 1368 of Title 29, respectively. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 29  and Tables.\nThe date of the enactment of the Retirement Protection Act of 1994, referred to in subsec. (g)(2), is the date of enactment of subtitle F of title VII of  Pub. L. 103–465 , which was approved  Dec. 8, 1994 .\n2018— Pub. L. 115–141, §\u202f401(a)(109)(A) , inserted “for CSEC plans” after “funding standards” in section catchline.\nSubsec. (c)(5)(C)(ii)(II).  Pub. L. 115–141, §\u202f401(a)(108) , inserted “of such Act” after “title IV”.\nSection applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as an Effective Date of 2014 Amendment note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES RELATING TO MINIMUM FUNDING STANDARDS AND BENEFIT LIMITATIONS'},
  'content': 'For purposes of section 401(a)(29), a defined benefit plan which is a single-employer plan (other than a CSEC plan) shall be treated as meeting the requirements of this section if the plan meets the requirements of subsections (b), (c), (d), and (e).\nParagraph (1) shall not apply to any amendment which provides for an increase in benefits under a formula which is not based on a participant’s compensation, but only if the rate of such increase is not in excess of the contemporaneous rate of increase in average wages of participants covered by the amendment.\nA defined benefit plan which is a single-employer plan shall provide that, in any case in which the plan’s adjusted funding target attainment percentage for a plan year is less than 60 percent, the plan may not pay any prohibited payment after the valuation date for the plan year.\nA defined benefit plan which is a single-employer plan shall provide that, during any period in which the plan sponsor is a debtor in a case under title 11, United States Code, or similar Federal or State law, the plan may not pay any prohibited payment. The preceding sentence shall not apply on or after the date on which the enrolled actuary of the plan certifies that the adjusted funding target attainment percentage of such plan (determined by not taking into account any adjustment of segment rates under section 430(h)(2)(C)(iv)) is not less than 100 percent.\nThe plan shall also provide that only 1 prohibited payment meeting the requirements of subparagraph (A) may be made with respect to any participant during any period of consecutive plan years to which the limitations under either paragraph (1) or (2) or this paragraph applies.\nFor purposes of this subparagraph, a participant and any beneficiary on his behalf (including an alternate payee, as defined in section 414(p)(8)) shall be treated as 1 participant. If the accrued benefit of a participant is allocated to such an alternate payee and 1 or more other persons, the amount under subparagraph (A) shall be allocated among such persons in the same manner as the accrued benefit is allocated unless the qualified domestic relations order (as defined in section 414(p)(1)(A)) provides otherwise.\nThis subsection shall not apply to any plan for any plan year if the terms of such plan (as in effect for the period beginning on  September 1, 2005 , and ending with such plan year) provide for no benefit accruals with respect to any participant during such period.\nA defined benefit plan which is a single-employer plan shall provide that, in any case in which the plan’s adjusted funding target attainment percentage for a plan year is less than 60 percent, benefit accruals under the plan shall cease as of the valuation date for the plan year.\nParagraph (1) shall cease to apply with respect to any plan year, effective as of the first day of the plan year, upon payment by the plan sponsor of a contribution (in addition to any minimum required contribution under section 430) equal to the amount sufficient to result in an adjusted funding target attainment percentage of 60 percent.\nFor purposes of this section, the adjusted funding target attainment percentage shall be determined by treating as an asset of the plan any security provided by a plan sponsor in a form meeting the requirements of subparagraph (B).\nThe security shall be released (and any amounts thereunder shall be refunded together with any interest accrued thereon) at such time as the Secretary may prescribe in regulations, including regulations for partial releases of the security by reason of increases in the adjusted funding target attainment percentage.\nNo prefunding balance or funding standard carryover balance under section 430(f) may be used under subsection (b), (c), or (e) to satisfy any payment an employer may make under any such subsection to avoid or terminate the application of any limitation under such subsection.\nSubject to subparagraph (C), in any case in which a benefit limitation under subsection (b), (c), (d), or (e) would (but for this subparagraph and determined without regard to subsection (b)(2), (c)(2), or (e)(2)) apply to such plan for the plan year, the plan sponsor of such plan shall be treated for purposes of this title as having made an election under section 430(f) to reduce the prefunding balance or funding standard carryover balance by such amount as is necessary for such benefit limitation to not apply to the plan for such plan year.\nSubparagraph (A) shall not apply with respect to a benefit limitation for any plan year if the application of subparagraph (A) would not result in the benefit limitation not applying for such plan year.\nWith respect to any benefit limitation under subsection (b), (c), or (e), subparagraph (A) shall only apply in the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers.\nSubsections (b), (c), and (e) shall not apply to a plan for the first 5 plan years of the plan. For purposes of this subsection, the reference in this subsection to a plan shall include a reference to any predecessor plan.\nIn any case in which a benefit limitation under subsection (b), (c), (d), or (e) has been applied to a plan with respect to the plan year preceding the current plan year, the adjusted funding target attainment percentage of the plan for the current plan year shall be presumed to be equal to the adjusted funding target attainment percentage of the plan for the preceding plan year until the enrolled actuary of the plan certifies the actual adjusted funding target attainment percentage of the plan for the current plan year.\nIn any case in which no certification of the adjusted funding target attainment percentage for the current plan year is made with respect to the plan before the first day of the 10th month of such year, for purposes of subsections (b), (c), (d), and (e), such first day shall be deemed, for purposes of such subsection, to be the valuation date of the plan for the current plan year and the plan’s adjusted funding target attainment percentage shall be conclusively presumed to be less than 60 percent as of such first day.\nUnless the plan provides otherwise, payments and accruals will resume effective as of the day following the close of the period for which any limitation of payment or accrual of benefits under subsection (d) or (e) applies.\nNothing in this subsection shall be construed as affecting the plan’s treatment of benefits which would have been paid or accrued but for this section.\nThe term “funding target attainment percentage” has the same meaning given such term by section 430(d)(2).\nThe term “adjusted funding target attainment percentage” means the funding target attainment percentage which is determined under paragraph (1) by increasing each of the amounts under subparagraphs (A) and (B) of section 430(d)(2) by the aggregate amount of purchases of annuities for employees other than highly compensated employees (as defined in section 414(q)) which were made by the plan during the preceding 2 plan years.\nIn the case of a plan for any plan year, if the funding target attainment percentage is 100 percent or more (determined without regard to the reduction in the value of assets under section 430(f)(4)), the funding target attainment percentage for purposes of paragraphs (1) and (2) shall be determined without regard to such reduction.\nIn the case of a plan which has designated a valuation date other than the first day of the plan year, the Secretary may prescribe rules for the application of this section which are necessary to reflect the alternate valuation date.\nFor purposes of this section, the term “single-employer plan” means a plan which is not a multiemployer plan.\nSection 4022 of the Employee Retirement Income Security Act of 1974, referred to in subsec. (d)(3)(A)(ii), is classified to  section 1322 of Title 29 , Labor.\nSection 412 of the Employee Retirement Income Security Act of 1974, referred to in subsec (f)(1)(B)(i), is classified to  section 1112 of Title 29 , Labor.\n2014—Subsec. (a).  Pub. L. 113–97  substituted “single-employer plan (other than a CSEC plan)” for “single-employer plan”.\nSubsec. (d)(2).  Pub. L. 113–159, §\u202f2003(c)(1) , substituted “of such plan (determined by not taking into account any adjustment of segment rates under section 430(h)(2)(C)(iv))” for “of such plan”.\nSubsec. (j)(3).  Pub. L. 113–295, §\u202f221(a)(57)(F)(i) , struck out par. (3) which related to a special rule for plan years beginning on or after  Oct. 1, 2008 , and before  Oct. 1, 2010 .\nPub. L. 113–295, §\u202f221(a)(57)(E)(i) , in par. (3) relating to application to plans which are fully funded without regard to reductions for funding balances, struck out subpar. (A) designation and heading and struck out subpars. (B) and (C) which related to a transition rule for plan years beginning after 2007 and before 2011 and a limitation for plan years beginning after 2008, respectively.\nSubsec. (m).  Pub. L. 113–295, §\u202f221(a)(57)(G)(i) , struck out subsec. (m). Text read as follows: “For purposes of this section, in the case of plan years beginning in 2008, the funding target attainment percentage for the preceding plan year may be determined using such methods of estimation as the Secretary may provide.”\n2010—Subsec. (j)(3).  Pub. L. 111–192  added par. (3) relating to a special rule for plan years beginning on or after  Oct. 1, 2008 , and before  Oct. 1, 2010 .\n2008—Subsec. (b)(2).  Pub. L. 110–458, §\u202f101(c)(2)(A) , substituted “section 430” for “section 303” in introductory provisions and “an adjusted funding” for “a funding” in subpar. (B).\nSubsec. (b)(3).  Pub. L. 110–458, §\u202f101(c)(2)(B) , inserted “benefit” after “event” in heading and substituted “an event” for “any event” in subpar. (B).\nSubsec. (d)(5).  Pub. L. 110–458, §\u202f101(c)(2)(C) , inserted concluding provisions.\nSubsec. (f)(1)(D).  Pub. L. 110–458, §\u202f101(c)(2)(D)(i) , inserted “adjusted” before “funding”.\nSubsec. (f)(2).  Pub. L. 110–458, §\u202f101(c)(2)(D)(ii) , substituted “prefunding balance or funding standard carryover balance under section 430(f)” for “prefunding balance under section 430(f) or funding standard carryover balance”.\nSubsec. (j)(3)(A).  Pub. L. 110–458, §\u202f101(c)(2)(E)(i) , struck out “without regard to this paragraph and” before “without regard to the reduction” and substituted “section 430(f)(4)” for “section 430(f)(4)(A)” and “paragraphs (1) and (2)” for “paragraph (1)”.\nSubsec. (j)(3)(C).  Pub. L. 110–458, §\u202f101(c)(2)(E)(ii) , substituted “without regard to the reduction in the value of assets under section 430(f)(4)” for “without regard to this paragraph” and inserted “beginning” before “after” in two places.\nSubsecs. (k) to (m).  Pub. L. 110–458, §\u202f101(c)(2)(F) , added subsecs. (k) and ( l ) and redesignated former subsec. (k) as (m).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 113–159, title II, §\u202f2003(c)(3) ,  Aug. 8, 2014 ,  128 Stat. 1850 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this subsection [amending this section and  section 1056 of Title 29 , Labor] shall apply to plan years beginning after  December 31, 2014 . \n \n “(B)   Collectively bargained plans .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements, the amendments made by this subsection shall apply to plan years beginning after  December 31, 2015 .”\nAmendment by  Pub. L. 113–97  applicable to years beginning after  Dec. 31, 2013 , see  section 3 of Pub. L. 113–97 , set out as a note under  section 401 of this title .\nPub. L. 111–192, title II, §\u202f203(c) ,  June 25, 2010 ,  124 Stat. 1300 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 1056 of Title 29 , Labor] shall apply to plan years beginning on or after  October 1, 2008 . \n \n “(2)   Special rule .— In the case of a plan for which the valuation date is not the first day of the plan year, the amendments made by this section shall apply to plan years beginning after  December 31, 2007 .”\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 109–280, title I, §\u202f113(b) ,  Aug. 17, 2006 ,  120 Stat. 852 , as amended by  Pub. L. 110–458, title I, §\u202f101(c)(3) ,  Dec. 23, 2008 ,  122 Stat. 5098 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this subpart] shall apply to plan years beginning after  December 31, 2007 . \n \n “(2)   Collective bargaining exception .— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before  January 1, 2008 , the amendments made by this section shall not apply to plan years beginning before the earlier of— “(A)  the later of— “(i)  the date on which the last collective bargaining agreement relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act [ Aug. 17, 2006 ]), or \n \n “(ii)  the first day of the first plan year to which the amendments made by this section [enacting this subpart] would (but for this paragraph) apply, or \n \n \n “(B)   January 1, 2010 . \n \n\n For purposes of subparagraph (A)(i), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement.”\nPub. L. 113–159, title II, §\u202f2003(c)(4) ,  Aug. 8, 2014 ,  128 Stat. 1850 , provided that: \n “(A)   In general .— If this paragraph applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii). \n \n “(B)   Amendments to which paragraph applies.— “(i)   In general .— This paragraph shall apply to any amendment to any plan or annuity contract which is made— “(I)  pursuant to the amendments made by this subsection [amending this section and  section 1056 of Title 29 , Labor], or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor under any provision as so amended, and \n \n “(II)  on or before the last day of the first plan year beginning on or after  January 1, 2016 , or such later date as the Secretary of the Treasury may prescribe. \n \n \n “(ii)   Conditions .— This subsection [amending this section and  section 1056 of Title 29 , Labor, and enacting provisions set out as a note under this section] shall not apply to any amendment unless, during the period— “(I)  beginning on the date that the amendments made by this subsection or the regulation described in clause (i)(I) takes effect (or in the case of a plan or contract amendment not required by such amendments or such regulation, the effective date specified by the plan), and \n \n “(II)  ending on the date described in clause (i)(II) (or, if earlier, the date the plan or contract amendment is adopted), \n \n\n the plan or contract is operated as if such plan or contract amendment were in effect, and such plan or contract amendment applies retroactively for such period. \n \n \n “(C)   Anti-cutback relief .— A plan shall not be treated as failing to meet the requirements of section 204(g) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1054(g) ) and section 411(d)(6) of the Internal Revenue Code of 1986 [ 26 U.S.C. 411(d)(6) ] solely by reason of a plan amendment to which this paragraph applies.”\nPub. L. 111–192, title II, §\u202f203(b) ,  June 25, 2010 ,  124 Stat. 1300 , provided that:  “Section 203 of the Worker, Retiree, and Employer Recovery Act of 2008 [ Pub. L. 110–458 , set out below] shall apply to a plan for any plan year in lieu of the amendments made by this section applying to sections 206(g)(4) of the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1056(g)(4) ] and 436(e) of the Internal Revenue Code of 1986 only to the extent that such section produces a higher adjusted funding target attainment percentage for such plan for such year.”\nPub. L. 110–458, title II, §\u202f203 ,  Dec. 23, 2008 ,  122 Stat. 5118 , provided that:  “In the case of the first plan year beginning during the period beginning on  October 1, 2008 , and ending on  September 30, 2009 , sections 206(g)(4)(A) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1056(g)(4)(A) ) and 436(e)(1) of the Internal Revenue Code of 1986 shall be applied by substituting the plan’s adjusted funding target attainment percentage for the preceding plan year for such percentage for such plan year but only if the adjusted funding target attainment percentage for the preceding plan year is greater.”\nFor special rules on applicability of amendments by subtitles A (§§\u202f101–108) and B (§§\u202f111–116) of title I of  Pub. L. 109–280  to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of  Pub. L. 109–280 , set out as notes under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ACCOUNTING PERIODS'},
  'content': 'Taxable income shall be computed on the basis of the taxpayer’s taxable year.\nFor purposes of this subtitle, the term “annual accounting period” means the annual period on the basis of which the taxpayer regularly computes his income in keeping his books.\nFor purposes of this subtitle, the term “calendar year” means a period of 12 months ending on December 31.\nFor purposes of this subtitle, the term “fiscal year” means a period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has made the election provided by subsection (f) the term means the annual period (varying from 52 to 53 weeks) so elected.\nThe Secretary may by regulation provide terms and conditions for the application of this subsection to a partnership, S corporation, or personal service corporation (within the meaning of section 441(i)(2)).\nThe Secretary shall prescribe such regulations as he deems necessary for the application of this subsection.\nFor purposes of this subtitle, the taxable year of any DISC shall be the taxable year of that shareholder (or group of shareholders with the same 12-month taxable year) who has the highest percentage of voting power.\nIf 2 or more shareholders (or groups) have the highest percentage of voting power under paragraph (1), the taxable year of the DISC shall be the same 12-month period as that of any such shareholder (or group).\nThe Secretary shall prescribe regulations under which paragraphs (1) and (2) shall apply to a change of ownership of a corporation after the taxable year of the corporation has been determined under paragraph (1) or (2) only if such change is a substantial change of ownership.\nFor purposes of this subsection, voting power shall be determined on the basis of total combined voting power of all classes of stock of the corporation entitled to vote.\nFor purposes of this subtitle, the taxable year of any personal service corporation shall be the calendar year unless the corporation establishes, to the satisfaction of the Secretary, a business purpose for having a different period for its taxable year. For purposes of this paragraph, any deferral of income to shareholders shall not be treated as a business purpose.\n2007—Subsec. (b)(4).  Pub. L. 110–172, §\u202f11(g)(7)(A) , struck out “FSC or” before “DISC filing”.\nSubsec. (h).  Pub. L. 110–172, §\u202f11(g)(7)(B) , struck out “FSC’s and” before “DISC’s” in heading and “FSC or” before “DISC” in pars. (1) and (2).\n1988—Subsec. (i)(2).  Pub. L. 100–647  inserted at end “A corporation shall not be treated as a personal service corporation unless more than 10 percent of the stock (by value) in such corporation is held by employee-owners (within the meaning of section 269A(b)(2), as modified by the preceding sentence). If a corporation is a member of an affiliated group filing a consolidated return, all members of such group shall be taken into account in determining whether such corporation is a personal service corporation.”\n1986—Subsec. (f)(2)(B)(iii).  Pub. L. 99–514, §\u202f104(b)(6) , struck out “and by adding the zero bracket amount,” after “in the short period,”.\nSubsec. (f)(3), (4).  Pub. L. 99–514, §\u202f806(d) , added par. (3) and redesignated former par. (3) as (4).\nSubsec. (i).  Pub. L. 99–514, §\u202f806(c)(1) , added subsec. (i).\n1984—Subsec. (b)(4).  Pub. L. 98–369, §\u202f803(a) , added par. (4).\nSubsec. (f)(2)(A).  Pub. L. 98–369, §\u202f474(b)(2) , substituted “section 15” for “section 21” in provisions preceding cl. (i).\nSubsec. (h).  Pub. L. 98–369, §\u202f803(b) , added subsec. (h).\n1977—Subsec. (f)(2)(B)(iii).  Pub. L. 95–30  substituted “multiplying the gross income for such short period (minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions as described in section 443(c)) by 365, by dividing the result by the number of days in the short period, and by adding the zero bracket amount” for “multiplying such income by 365 and dividing the result by the number of days in the short period”.\n1976—Subsec. (f)(3).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1964—Subsec. (f)(2)(A).  Pub. L. 88–272  inserted “,\u2000including,” before “or ending with reference to”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 104(b)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by section 806(c)(1), (d) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with special provisions applicable to taxpayers who are required to change their accounting periods, see  section 806(e) of Pub. L. 99–514 , set out as a note under  section 1378 of this title .\nAmendment by  section 474(b)(2) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 803 of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 805(a)(4) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years ending after  Dec. 31, 1963 , see  section 235(d) of Pub. L. 88–272 , set out as a note under  section 269 of this title .\nNothing in  section 806 of Pub. L. 99–514  or in any legislative history relating thereto to be construed as requiring the Secretary of the Treasury or his delegate to permit an automatic change of a taxable year, see  section 1008(e)(9) of Pub. L. 100–647 , set out as a note under  section 1378 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ACCOUNTING PERIODS'},
  'content': 'If a taxpayer changes his annual accounting period, the new accounting period shall become the taxpayer’s taxable year only if the change is approved by the Secretary. For purposes of this subtitle, if a taxpayer to whom section 441(g) applies adopts an annual accounting period (as defined in section 441(c)) other than a calendar year, the taxpayer shall be treated as having changed his annual accounting period.\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ACCOUNTING PERIODS'},
  'content': 'When the taxpayer, with the approval of the Secretary, changes his annual accounting period. In such a case, the return shall be made for the short period beginning on the day after the close of the former taxable year and ending at the close of the day before the day designated as the first day of the new taxable year.\nWhen the taxpayer is in existence during only part of what would otherwise be his taxable year.\nIf a return is made under paragraph (1) of subsection (a), the taxable income for the short period shall be placed on an annual basis by multiplying the modified taxable income for such short period by 12, dividing the result by the number of months in the short period. The tax shall be the same part of the tax computed on the annual basis as the number of months in the short period is of 12 months.\nApplication for the benefits of this paragraph shall be made in such manner and at such time as the regulations prescribed under subparagraph (D) may require; except that the time so prescribed shall not be later than the time (including extensions) for filing the return for the first taxable year which ends on or after the day which is 12 months after the first day of the short period. Such application, in case the return was filed without regard to this paragraph, shall be considered a claim for credit or refund with respect to the amount by which the tax is reduced under this paragraph.\nThe Secretary shall prescribe such regulations as he deems necessary for the application of this paragraph.\nFor purposes of this subsection the term “modified taxable income” means, with respect to any period, the gross income for such period minus the deductions allowed by this chapter for such period (but, in the case of a short period, only the adjusted amount of the deductions for personal exemptions).\nIn the case of a taxpayer other than a corporation, if a return is made for a short period by reason of subsection (a)(1) and if the tax is not computed under subsection (b)(2), then the exemptions allowed as a deduction under section 151 (and any deduction in lieu thereof) shall be reduced to amounts which bear the same ratio to the full exemptions as the number of months in the short period bears to 12.\n2004—Subsec. (e)(3) to (5).  Pub. L. 108–357  redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out former par. (3) which read as follows: “Undistributed foreign personal holding company income, see section 557.”\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f104(b)(7)(A) , struck out “,\u2000and adding the zero bracket amount” after “by the number of months in the short period”.\nSubsec. (b)(2)(A)(ii).  Pub. L. 99–514, §\u202f104(b)(7)(B) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the tax computed on the sum of the modified taxable income for the short period plus the zero bracket amount.”\nSubsec. (d).  Pub. L. 99–514, §\u202f701(e)(3) , substituted “and tax preferences” for “for tax preferences” in heading and amended text generally. Prior to amendment, subsec. (d) read as follows: “If a return is made for a short period by reason of subsection (a), then—\n“(1) in the case of a taxpayer other than a corporation, the alternative minimum taxable income for the short period shall be placed on an annual basis by multiplying that amount by 12 and dividing the result by the number of months in the short period, and the amount computed under paragraph (1) of section 55(a) shall be the same part of the tax computed on the annual basis as the number of months in the short period is of 12 months; and\n“(2) the $10,000 amount specified in section 56 (relating to minimum tax for tax preferences), modified as provided by section 58, shall be reduced to the amount which bears the same ratio to such specified amount as the number of days in the short period bears to 365.”\n1983—Subsec. (e).  Pub. L. 97–448  substituted “section 1398(d)(2)(E)” for “section 1398(d)(3)(E)”.\n1980—Subsec. (d)(2).  Pub. L. 96–222  struck out “in the case of a corporation,” before “the $10,000 amount”.\nSubsec. (e).  Pub. L. 96–589  inserted cross reference to section 1398(d)(3)(E) for returns for a period of less than 12 months in the case of a debtor’s election to terminate a taxable year.\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f703 ( o )(2), substituted “modified taxable income for such short period” for “gross income for such short period (minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions)”.\nSubsec. (b)(2).  Pub. L. 95–600, §\u202f703 ( o )(1), substituted in cl. (i) “modified taxable income” for “taxable income” in two places and in cl. (ii) “the sum of the modified taxable income” for “the taxable income” and “plus the zero bracket amount” for “without placing the taxable income on an annual basis”.\nSubsec. (b)(3).  Pub. L. 95–600, §\u202f703 ( o )(3), added par. (3).\nSubsec. (d).  Pub. L. 95–600, §\u202f421(e)(2) , substituted “Adjustment in computing minimum tax for tax preferences” for “Adjustment in exclusion for computing minimum tax for tax preferences” in heading, redesignated existing provisions as par. (2) and as so redesignated applied par. (2) to corporations, and added par. (1).\n1977—Subsec. (b)(1).  Pub. L. 95–30  substituted “multiplying the gross income for such short period (minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions) by 12, dividing the result by the number of months in the short period, and adding the zero bracket amount” for “multiplying such income by 12, and dividing the result by the number of months in the short period”.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f1204(c)(2) , struck out par. (3) which made termination of taxpayer’s taxable year under section 6851 as one of the circumstances under which a tax return for a period of less than 12 months shall be made.\nSubsec. (b)(2)(D).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d).  Pub. L. 94–455, §\u202f301(e) , substituted “$10,000” for “$30,000”.\nSubsec. (e)(5).  Pub. L. 94–455, §\u202f1607(b)(1)(C) , substituted “section 857(b)(2)(C)” for “section 857(b)(2)(D)”.\n1969—Subsecs. (d), (e).  Pub. L. 91–172  added subsec. (d) and redesignated former subsec. (d) as (e).\n1960—Subsec. (d)(5).  Pub. L. 86–779  added par. (5).\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  section 104(b)(7) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 701(e)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 97–448, title III, §\u202f311(b)(1) ,  Jan. 12, 1983 ,  96 Stat. 2411 , provided that:  “The amendment made by subsection (a) of section 304 [amending this section] shall take effect as if included in the amendments made by section 3 of the Bankruptcy Tax Act of 1980 [ section 3 of Pub. L. 96–589 , which amended this section and sections 6012 and 6103 of this title].”\nAmendment by  Pub. L. 96–589  applicable to bankruptcy cases commencing more than 90 days after  Dec. 24, 1980 , see  section 7(b) of Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title VII, §\u202f703 ( o )(4),  Nov. 6, 1978 ,  92 Stat. 2943 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 421(e)(2) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 421(g) of Pub. L. 95–600 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title III, §\u202f301(g)(1) ,  Oct. 4, 1976 ,  90 Stat. 1553 , provided that the amendment made by  section 301(e) of Pub. L. 94–455  is effective for items of tax preferences for taxable years beginning after  Dec. 31, 1975 , with certain exceptions.\nAmendment by  section 1204(c)(2) of Pub. L. 94–455  effective with respect to action taken under section 6851, 6861, or 6862 of this title where the notice and demand takes place after  Feb. 28, 1977 , see  section 1204(d) of Pub. L. 94–455 , as amended, set out as a note under  section 6851 of this title .\nFor effective date of amendment by  section 1607(b)(1)(C) of Pub. L. 94–455 , see  section 1608(c) of Pub. L. 94–455 , set out as a note under  section 857 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 301(c) of Pub. L. 91–172 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .\nFor applicability of amendment by  section 701(e)(3) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , see  section 1012(aa)(2) of Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ACCOUNTING PERIODS'},
  'content': 'Except as otherwise provided in this section, a partnership, S corporation, or personal service corporation may elect to have a taxable year other than the required taxable year.\nExcept as provided in paragraphs (2) and (3), an election may be made under subsection (a) only if the deferral period of the taxable year elected is not longer than 3 months.\nIn the case of an entity’s 1st taxable year beginning after  December 31, 1986 , an entity may elect a taxable year under subsection (a) which is the same as the entity’s last taxable year beginning in 1986.\nAn election under subsection (a) shall be made by the partnership, S corporation, or personal service corporation.\nAny election under subsection (a) shall remain in effect until the partnership, S corporation, or personal service corporation changes its taxable year or otherwise terminates such election. Any change to a required taxable year may be made without the consent of the Secretary.\nIf an election is terminated under subparagraph (A) or paragraph (3)(A), the partnership, S corporation, or personal service corporation may not make another election under subsection (a).\nSubparagraph (A) shall not apply to any tiered structure which consists only of partnerships or S corporations (or both) all of which have the same taxable year.\nFor purposes of this section, the term “required taxable year” means the taxable year determined under section 706(b), 1378, or 441(i) without taking into account any taxable year which is allowable by reason of business purposes. Solely for purposes of the preceding sentence, sections 706(b), 1378, and 441(i) shall be treated as in effect for taxable years beginning before  January 1, 1987 .\nFor purposes of this section, the term “personal service corporation” has the meaning given to such term by section 441(i)(2).\nThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations to prevent the avoidance of subsection (b)(2)(B) or (d)(2)(B) through the change in form of an entity.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f2004(e)(1)(A) , substituted “as otherwise provided in this section” for “as provided in subsections (b) and (c)”.\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f2004(e)(13) , inserted “except as provided in regulations,” before “the term”.\nSubsec. (d)(2)(A).  Pub. L. 100–647, §\u202f2004(e)(12) , inserted “or otherwise terminates such election” after “its taxable year”.\nSubsec. (d)(2)(B).  Pub. L. 100–647, §\u202f2004(e)(1)(C) , inserted “or paragraph (3)(A)” after “under subparagraph (A)”.\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f2004(e)(1)(B) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “No election may be made under subsection (a) with respect to an entity which is part of a tiered structure other than a tiered structure comprised of 1 or more partnerships or S corporations all of which have the same taxable year.”\nSubsecs. (f), (g).  Pub. L. 100–647, §\u202f2004(e)(2)(A) , added subsec. (f) and redesignated former subsec. (f) as (g).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10206(d) ,  Dec. 22, 1987 ,  101 Stat. 1330–403 , as amended by  Pub. L. 100–647, title II, §\u202f2004(e)(11) ,  Nov. 10, 1988 ,  102 Stat. 3602 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [enacting this section and sections 280H and 7519 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Required payments .— The amendments made by subsection (b) [enacting  section 7519 of this title ] shall apply to applicable election years beginning after  December 31, 1986 . \n \n “(3)   Elections .— Any election under section 444 of the Internal Revenue Code of 1986 (as added by subsection (a)) for an entity’s 1st taxable year beginning after  December 31, 1986 , shall not be required to be made before the 90th day after the date of the enactment of this Act [ Dec. 22, 1987 ]. \n \n “(4)   Special rule for existing entities electing s corporation status .— If a C corporation (within the meaning of section 1361(a)(2) of the Internal Revenue Code of 1986) with a taxable year other than the calendar year— “(A)  made an election after  September 18, 1986 , and before  January 1, 1988 , under section 1362 of such Code to be treated as an S corporation, and \n \n “(B)  elected to have the calendar year as the taxable year of the S corporation, \n \n\n then section 444(b)(2)(B) of such Code shall be applied by taking into account the deferral period of the last taxable year of the C corporation rather than the deferral period of the taxable year being changed. The preceding sentence shall apply only in the case of an election under section 444 of such Code made for a taxable year beginning before 1989.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books.\nIf no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the Secretary, does clearly reflect income.\nA taxpayer engaged in more than one trade or business may, in computing taxable income, use a different method of accounting for each trade or business.\nExcept as otherwise expressly provided in this chapter, a taxpayer who changes the method of accounting on the basis of which he regularly computes his income in keeping his books shall, before computing his taxable income under the new method, secure the consent of the Secretary.\n1984—Subsec. (f).  Pub. L. 98–369  added subsec. (f).\n1976—Subsecs. (b), (c), (e).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 98–369, div. A, title I, §\u202f161(b) ,  July 18, 1984 ,  98 Stat. 697 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ July 18, 1984 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'For rules requiring capitalization of certain preproductive period expenses, see section 263A.\nAny change in method of accounting made pursuant to this section shall be treated for purposes of section 481 as initiated by the taxpayer and made with the consent of the Secretary.\nFor purposes of paragraph (1), the term “annual accrual method of accounting” means a method under which revenues, costs, and expenses are computed on an accrual method of accounting and the preproductive period expenses incurred during the taxable year are charged to harvested crops or deducted in determining the taxable income for such years.\nFor purposes of paragraphs (1) and (2) of section 263A(e), any election under this subparagraph shall be treated as if it were an election under subsection (d)(3) of section 263A.\nUnless the Secretary otherwise consents, an election under this subparagraph may be made only for the corporation’s 1st taxable year which begins after  December 31, 1986 , and during which the corporation engages in a farming business. Any such election, once made, may be revoked only with the consent of the Secretary.\n2017—Subsec. (c).  Pub. L. 115–97, §\u202f13102(a)(5)(A)(i) , in introductory provisions, inserted “for any taxable year” after “not being a corporation”.\nSubsec. (c)(2).  Pub. L. 115–97, §\u202f13102(a)(5)(A)(ii) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “a corporation the gross receipts of which meet the requirements of subsection (d).”\nSubsec. (d).  Pub. L. 115–97, §\u202f13102(a)(5)(C) , redesignated subsec. (f) as (d) and struck out former subsec. (d) which related to gross receipts requirements.\nSubsec. (e).  Pub. L. 115–97, §\u202f13102(a)(5)(C) , redesignated subsec. (g) as (e) and struck out former subsec. (e) which related to members of the same family.\nSubsec. (f).  Pub. L. 115–97, §\u202f13102(a)(5)(C)(ii) , redesignated subsec. (f) as (d).\nPub. L. 115–97, §\u202f13102(a)(5)(B) , amended subsec. (f) generally. Prior to amendment, subsec. (f) related to coordination with section 481.\nSubsec. (g).  Pub. L. 115–97, §\u202f13102(a)(5)(C)(ii) , redesignated subsec. (g) as (e).\nSubsecs. (h), (i).  Pub. L. 115–97, §\u202f13102(a)(5)(C)(i) , struck out subsecs. (h) and (i) which related to exception for certain closely held corporations and suspense account for family corporations, respectively.\n1997—Subsec. (i)(3).  Pub. L. 105–34  redesignated par. (5) as (3) and struck out heading and text of former par. (3). Text read as follows: “If—\n“(A) the gross receipts of the corporation from the trade or business of farming for the year of the change or any subsequent taxable year, is less than\n“(B) such gross receipts for the taxpayer’s last taxable year beginning before the year of the change (or for the most recent taxable year for which a reduction in the suspense account was made under this paragraph),\nthe amount in the suspense account (after taking into account prior reductions) shall be reduced by the percentage by which the amount described in subparagraph (A) is less than the amount described in subparagraph (B).”\nSubsec. (i)(4).  Pub. L. 105–34  redesignated par. (6) as (4) and struck out heading and text of former par. (4). Text read as follows: “Any reduction in the suspense account under paragraph (3) shall be included in gross income for the taxable year of the reduction.”\nSubsec. (i)(5), (6).  Pub. L. 105–34  added par. (5) and redesignated former pars. (5) and (6) as (3) and (4), respectively.\n1990—Subsec. (g)(1)(A).  Pub. L. 101–508, §\u202f11702(b)(2) , substituted “trade or business of farming” for “qualified farming trade or business”.\nSubsec. (g)(4)(B).  Pub. L. 101–508, §\u202f11702(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘qualified farming trade or business’ means the trade or business of farming sugar cane.”\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1008(b)(5) , substituted “period expenses” for “period of expenses” in heading and in text.\nSubsec. (g)(1).  Pub. L. 100–647, §\u202f1008(b)(6) , substituted “qualified farming trade or business” for “trade or business of farming” in subpar. (A) and in concluding provisions.\n1987—Subsec. (c).  Pub. L. 100–203, §\u202f10205(a) , added subsec. (c), substituting “certain corporations” for “small business and family corporations” in heading and striking out former text which read as follows: “For purposes of subsection (a), a corporation shall be treated as not being a corporation if it is—\n“(1) an S corporation,\n“(2) a corporation of which at least 50 percent of the total combined voting power of all classes of stock entitled to vote, and at least 50 percent of the total number of shares of all other classes of stock of the corporation, are owned by members of the same family, or\n“(3) a corporation the gross receipts of which meet the requirements of subsection (e).”\nSubsec. (d).  Pub. L. 100–203, §\u202f10205(a) , added subsec. (d). Former subsec. (d) redesignated (e).\nSubsec. (e).  Pub. L. 100–203, §\u202f10205(c)(1) , substituted “subsection (d)” for “subsection (c)(2)”.\nPub. L. 100–203, §\u202f10205(a) , redesignated former subsec. (d) as (e) and struck out former subsec. (e), “Corporation having gross receipts of $1,000,000 or less”, which read as follows: “A corporation meets the requirements of this subsection if, for each prior taxable year beginning after  December 31, 1975 , such corporation (and any predecessor corporation) did not have gross receipts exceeding $1,000,000. For purposes of the preceding sentence, all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a)) shall be treated as one corporation.”\nSubsec. (h)(1).  Pub. L. 100–203, §\u202f10205(c)(2)(A) , substituted “A corporation is described in this subsection” for “This section shall not apply to any corporation”.\nSubsec. (h)(1)(A), (B).  Pub. L. 100–203, §\u202f10205(c)(2)(B) , (C), substituted “subsection (e)” for “subsection (d)” and “subsection (e)(1)” for “subsection (d)(1)” wherever appearing.\nSubsec. (i).  Pub. L. 100–203, §\u202f10205(b) , added subsec. (i).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f803(b)(7)(B) , which directed that subsec. (a) be amended by striking out “and with the capitalization of preproductive period of expenses described in subsection (b)”, was executed by striking out “and with the capitalization of preproductive period expenses described in subsection (b)” after “accrual method of accounting”, as the probable intent of Congress.\nSubsec. (b).  Pub. L. 99–514, §\u202f803(b)(7)(A) , in amending subsec. (b) generally, substituted in heading “period of expenses” for “period expenses” and in text the cross reference to section 263A for former par. (1) defining “preproductive period expenses”, par. (2) relating to exceptions, and par. (3) defining “preproductive period”.\nSubsec. (g)(1).  Pub. L. 99–514, §\u202f803(b)(7)(C) , substituted “Notwithstanding subsection (a) or section 263A, if” for “If”.\n1982—Subsec. (c)(1).  Pub. L. 97–354, §\u202f5(a)(28) , substituted “an S corporation” for “an electing small business corporation (within the meaning of section 1371(b))”.\nSubsec. (g)(1).  Pub. L. 97–248, §\u202f230(a)(1) , inserted “or qualified partnership” after “corporation” wherever appearing.\nSubsec. (g)(3).  Pub. L. 97–248, §\u202f230(a)(2) , designated existing provisions from “a corporation acquired” through “transferee corporation”, as subpar. (A), inserted “qualified” before “farming trade”, and added subpar. (B).\nSubsec. (g)(4).  Pub. L. 97–354, §\u202f5(a)(29) , substituted in subpar. (A)(i) “an S corporation” for “an electing small business corporation (within the meaning of section 1371(b))”.\nPub. L. 97–248, §\u202f230(a)(3) , added par. (4).\n1978—Subsec. (a).  Pub. L. 95–600 , §§\u202f353(a), 703(d), substituted in provisions following par. (2) “preproductive period expenses” for “preproductive expenses” and “nursery or sod farm” for “nursery”.\nSubsec. (f)(3).  Pub. L. 95–600, §\u202f701 ( l )(1), struck out “(except as otherwise provided in such regulations)” before “be taken” and inserted “(or the remaining taxable years where there is a stated future life of less than 10 taxable years)” after “10 taxable years”.\nSubsec. (g)(2).  Pub. L. 95–600, §\u202f703(d) , substituted “preproductive period expenses” for “preproductive expenses”.\nSubsec. (h).  Pub. L. 95–600, §\u202f351(a) , added subsec. (h).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with provision for preservation of suspense account rules with respect to any existing suspense accounts, see  section 13102(e) of Pub. L. 115–97 , set out as a note under  section 263A of this title .\nPub. L. 105–34, title X, §\u202f1081(b) ,  Aug. 5, 1997 ,  111 Stat. 950 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending after  June 8, 1997 .”\nAmendment by  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10205(d) ,  Dec. 22, 1987 ,  101 Stat. 1330–397 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the amendment by  Pub. L. 99–514  is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nAmendment by  Pub. L. 99–514  applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 97–248, title II, §\u202f230(b) ,  Sept. 3, 1982 ,  96 Stat. 496 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nPub. L. 95–600, title III, §\u202f351(b) ,  Nov. 6, 1978 ,  92 Stat. 2846 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1977 .”\nPub. L. 95–600, title III, §\u202f353(b) ,  Nov. 6, 1978 ,  92 Stat. 2847 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nPub. L. 95–600, title VII, §\u202f703 ( l )(4),  Nov. 6, 1978 ,  92 Stat. 2907 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by paragraphs (1) [amending this section] and (3) [amending  section 464 of this title ] shall take effect as if included in section 447 or 464 (as the case may be) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] at the time of the enactment of such sections [ Oct. 4, 1976 ].”\nAmendment by  section 703(d) of Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nPub. L. 94–455, title II, §\u202f207(c)(2) ,  Oct. 4, 1976 ,  90 Stat. 1541 , as amended by  Pub. L. 95–30, title IV, §\u202f404 ,  May 23, 1977 ,  91 Stat. 155 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by paragraph (1) [enacting this section] shall apply to taxable years beginning after  December 31, 1976 . \n \n “(B)   Special rule for certain corporations .— In the case of a corporation engaged in the trade or business of farming and with respect to which— “(i)  members of two families (within the meaning of paragraph (1) of [former] section 447(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by paragraph (1)) owned, on  October 4, 1976  (directly or through the application of such [former] section 447(d)), at least 65 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and at least 65 percent of the total number of shares of all other classes of stock of such corporation; or \n \n “(ii)  members of three families (within the meaning of paragraph (1) of such [former] section 447(d)) owned, on  October 4, 1976  (directly or through the application of such [former] section 447(d)), at least 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and at least 50 percent of the total number of shares of all other classes of stock of such corporation; and substantially all of the stock of such corporation which was not so owned (directly or through the application of such [former] section 447(d)), by members of such three families was owned, on  October 4, 1976 , directly— “(I)  by employees of the corporation or members of the families (within the meaning of section 267(c)(4) of such Code) of such employees, or \n \n “(II)  by a trust for the benefit of the employees of such corporation which is described in section 401(a) of such Code and which is exempt from taxation under section 501(a) of such Code, \n \n \n\n the amendments made by paragraph (1) shall apply to taxable years beginning after  December 31, 1977 .”\nPub. L. 95–600, title III, §\u202f352 ,  Nov. 6, 1978 ,  92 Stat. 2846 , provided that: \n “(a)   Application of Section .— This section shall apply to a taxpayer who— “(1)  is a farmer, nurseryman, or florist, \n \n “(2)  is on an accrual method of accounting, and \n \n “(3)  is not required by section 447 of the Internal Revenue Code of 1954 to capitalize preproductive period expenses. \n \n \n “(b)   Taxpayer May Not Be Required To Inventory Growing Crops .— A taxpayer to whom this section applies may not be required to inventory growing crops for any taxable year beginning after  December 31, 1977 . \n \n “(c)   Taxpayer May Elect To Change To Cash Method .— A taxpayer to whom this section applies may, for any taxable year beginning after  December 31, 1977  and before  January 1, 1981 , change to the cash receipts and disbursements method of accounting with respect to any trade or business in which the principal activity is growing crops. \n \n “(d)   Section  481  Of Code To Apply .— Any change in the way in which a taxpayer accounts for the costs of growing crops resulting from the application of subsection (b) or (c)— “(1)  shall not require the consent of the Secretary of the Treasury or his delegate, and \n \n “(2)  shall be treated, for purposes of section 481 of the Internal Revenue Code of 1954 as a change in the method of accounting initiated by the taxpayer. \n \n \n “(e)   Growing Crops .— For purposes of this section, the term ‘Growing crops’ does not include trees grown for lumber, pulp, or other nonlife purposes.”\nPub. L. 95–600, title VII, §\u202f703 ( l )(2),  Nov. 6, 1978 ,  92 Stat. 2906 , provided that:  \n “If— “(A)  a farming syndicate (within the meaning of [former] section 464(c) of the Internal Revenue Code of 1954 [now  26 U.S.C. 461(k) ]) was in existence on  December 31, 1975 , and \n \n “(B)  such syndicate elects an accrual method of accounting (including the capitalization of preproductive period expenses described in section 447(b) of such Code) for a taxable year beginning before  January 1, 1979 , \n \n\n then such election shall be treated as having been made with the consent of the Secretary of the Treasury or his delegate and, under regulations prescribed by the Secretary of the Treasury or his delegate, the net amount of the adjustments required by section 481(a) of such Code to be taken into account by the taxpayer in computing taxable income shall be taken into account in each of the 10 taxable years (or the remaining taxable years where there is a stated future life of less than 10 taxable years) beginning with the year of change.”\nPub. L. 94–455, title II, §\u202f207(c)(3) ,  Oct. 4, 1976 ,  90 Stat. 1541 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— If— “(i)  a corporation has computed its taxable income on an annual accrual method of accounting together with a static value method of accounting for deferred costs of growing crops for the 10 taxable years ending with its first taxable year beginning after  December 31, 1975 , \n \n “(ii)  such corporation raises crops which are harvested not less than 12 months after planting, and \n \n “(iii)  such corporation elects, within one year after the date of the enactment of this Act [ Oct. 4, 1976 ] and in such manner as the Secretary of the Treasury or his delegate prescribes, to change to the annual accrual method of accounting (within the meaning of section 447(g)(2) [now section 447(e)(2)] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) for taxable years beginning after  December 31, 1976 , \n \n\n such change shall be treated as having been made with the consent of the Secretary of the Treasury, and, under regulations prescribed by the Secretary of the Treasury or his delegate, the net amount of the adjustments required by section 481(a) of the Internal Revenue Code of 1986 to be taken into account by the taxpayer in computing taxable income shall (except as otherwise provided in such regulations) be taken into account in each of the 10 taxable years beginning with the year of change. \n \n “(B)   Coordination with section 447 of the code .— A corporation which elects under subparagraph (A) to change to the annual accrual method of accounting shall, for purposes of section 447(g) [now section 447(e)] of the Internal Revenue Code of 1986, be deemed to be a corporation which has computed its taxable income on an annual accrual method of accounting for its 10 taxable years ending with its first taxable year beginning after  December 31, 1975 . \n \n “(C)   Certain corporate reorganizations .— For purposes of this paragraph, if a corporation acquired substantially all the assets of a farming trade or business from another corporation in a transaction in which no gain or loss was recognized to the transferor or transferee corporation, the transferee corporation shall be deemed to have computed its taxable income on an annual accrual method of accounting together with a static value method of accounting for deferred costs of growing crops during the period for which the transferor corporation computed its taxable income from such trade or business on such accrual and static value method.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Paragraphs (1) and (2) of subsection (a) shall not apply to any farming business.\nParagraphs (1) and (2) of subsection (a) shall not apply to a qualified personal service corporation, and such a corporation shall be treated as an individual for purposes of determining whether paragraph (2) of subsection (a) applies to any partnership.\nParagraphs (1) and (2) of subsection (a) shall not apply to any corporation or partnership for any taxable year if such entity (or any predecessor) meets the gross receipts test of subsection (c) for such taxable year.\nA corporation or partnership meets the gross receipts test of this subsection for any taxable year if the average annual gross receipts of such entity for the 3-taxable-year period ending with the taxable year which precedes such taxable year does not exceed $25,000,000.\nAll persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or ( o ) of section 414 shall be treated as one person for purposes of paragraph (1).\nIf the entity was not in existence for the entire 3-year period referred to in paragraph (1), such paragraph shall be applied on the basis of the period during which such entity (or trade or business) was in existence.\nGross receipts for any taxable year of less than 12 months shall be annualized by multiplying the gross receipts for the short period by 12 and dividing the result by the number of months in the short period.\nGross receipts for any taxable year shall be reduced by returns and allowances made during such year.\nAny reference in this subsection to an entity shall include a reference to any predecessor of such entity.\nThe term “farming business” means the trade or business of farming (within the meaning of section 263A(e)(4)).\nThe term “farming business” includes the raising, harvesting, or growing of trees to which section 263A(c)(5) applies.\nThe term “tax shelter” has the meaning given such term by section 461(i)(3) (determined after application of paragraph (4) thereof). An S corporation shall not be treated as a tax shelter for purposes of this section merely by reason of being required to file a notice of exemption from registration with a State agency described in section 461(i)(3)(A), but only if there is a requirement applicable to all corporations offering securities for sale in the State that to be exempt from such registration the corporation must file such a notice.\nThis paragraph shall not apply to any amount if interest is required to be paid on such amount or there is any penalty for failure to timely pay such amount.\nThe Secretary shall prescribe regulations to permit taxpayers to determine amounts referred to in subparagraph (A) using computations or formulas which, based on experience, accurately reflect the amount of income that will not be collected by such person. A taxpayer may adopt, or request consent of the Secretary to change to, a computation or formula that clearly reflects the taxpayer’s experience. A request under the preceding sentence shall be approved if such computation or formula clearly reflects the taxpayer’s experience.\nFor purposes of this section, a trust subject to tax under section 511(b) shall be treated as a C corporation with respect to its activities constituting an unrelated trade or business.\nAny change in method of accounting made pursuant to this section shall be treated for purposes of section 481 as initiated by the taxpayer and made with the consent of the Secretary.\nThe Secretary shall prescribe such regulations as may be necessary to prevent the use of related parties, pass-thru entities, or intermediaries to avoid the application of this section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2017—Subsec. (b)(3).  Pub. L. 115–97, §\u202f13102(a)(2) , amended par. (3) generally. Prior to amendment, text read as follows: “Paragraphs (1) and (2) of subsection (a) shall not apply to any corporation or partnership for any taxable year if, for all prior taxable years beginning after  December 31, 1985 , such entity (or any predecessor) met the $5,000,000 gross receipts test of subsection (c).”\nSubsec. (c).  Pub. L. 115–97, §\u202f13102(a)(1) , substituted “Gross receipts test” for “$5,000,000 gross receipts test” in heading and amended introductory provisions and par. (1) generally. Prior to amendment, text read as follows: “For purposes of this section—\n“(1)  In general .—A corporation or partnership meets the $5,000,000 gross receipts test of this subsection for any prior taxable year if the average annual gross receipts of such entity for the 3-taxable-year period ending with such prior taxable year does not exceed $5,000,000.”\nSubsec. (c)(4).  Pub. L. 115–97, §\u202f13102(a)(3) , added par. (4).\nSubsec. (d)(7).  Pub. L. 115–97, §\u202f13102(a)(4) , amended par. (7) generally. Prior to amendment, par. (7) related to coordination with section 481.\n2002—Subsec. (d)(5).  Pub. L. 107–147  amended heading and text of par. (5) generally. Prior to amendment, text read as follows: “In the case of any person using an accrual method of accounting with respect to amounts to be received for the performance of services by such person, such person shall not be required to accrue any portion of such amounts which (on the basis of experience) will not be collected. This paragraph shall not apply to any amount if interest is required to be paid on such amount or there is any penalty for failure to timely pay such amount.”\n1988—Subsec. (c)(3)(D).  Pub. L. 100–647, §\u202f1008(a)(9) , added subpar. (D).\nSubsec. (d)(2).  Pub. L. 100–647, §\u202f6032(a) , inserted at end “To the extent provided in regulations which shall be prescribed by the Secretary, indirect holdings through a trust shall be taken into account under subparagraph (B).”\nSubsec. (d)(2)(B).  Pub. L. 100–647, §\u202f1008(a)(1)(A) , substituted “(or indirectly through 1 or more partnerships, S corporations, or qualified personal service corporations not described in paragraph (2) or (3) of subsection (a))” for “or indirectly”.\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f1008(a)(7) , inserted sentence at end relating to treatment of S corporation as tax shelter.\nSubsec. (d)(4)(C).  Pub. L. 100–647, §\u202f1008(a)(8) , substituted “90 percent or more of” for “substantially all of”.\nPub. L. 100–647, §\u202f1008(a)(2) , substituted “such group” for “all such members”.\nSubsec. (d)(8).  Pub. L. 100–647, §\u202f1008(a)(1)(B) , added par. (8).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13102(e) of Pub. L. 115–97 , set out as a note under  section 263A of this title .\nPub. L. 107–147, title IV, §\u202f403(b) ,  Mar. 9, 2002 ,  116 Stat. 41 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Mar. 9, 2002 ]. \n \n “(2)   Change in method of accounting .— In the case of any taxpayer required by the amendments made by this section to change its method of accounting for its first taxable year ending after the date of the enactment of this Act— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as made with the consent of the Secretary of the Treasury, and \n \n “(C)  the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period of 4 years (or if less, the number of taxable years that the taxpayer used the method permitted under section 448(d)(5) of such Code as in effect before the date of the enactment of this Act) beginning with such first taxable year.”\nAmendment by section 1008(a)(1), (2), (7)–(9) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6032(b) ,  Nov. 10, 1988 ,  102 Stat. 3695 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title VIII, §\u202f801(d) ,  Oct. 22, 1986 ,  100 Stat. 2348 , as amended by  Pub. L. 100–647, title I, §\u202f1008(a)(5) , (6),  Nov. 10, 1988 ,  102 Stat. 3437 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this section and amending  section 461 of this title ] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Election to retain cash method for certain transactions .— A taxpayer may elect not to have the amendments made by this section apply to any loan or lease, or any transaction with a related party (within the meaning of section 267(b) of the Internal Revenue Code of 1954, as in effect before the enactment of this Act), entered into on or before  September 25, 1985 . Any election under the preceding sentence may be made separately with respect to each transaction. \n \n “(3)   Certain contracts .— The amendments made by this section shall not apply to— “(A)  contracts for the acquisition or transfer of real property, and \n \n “(B)  contracts for services related to the acquisition or development of real property, \n \n\n but only if such contracts were entered into before  September 25, 1985 , and the sole element of the contract which has not been performed as of  September 25, 1985 , is payment for such property or services. \n \n “(4)   Treatment of affiliated group providing engineering services .— Each member of an affiliated group of corporations (within the meaning of section 1504(a) of the Internal Revenue Code of 1986) shall be allowed to use the cash receipts and disbursements method of accounting for any trade or business of providing engineering services with respect to taxable years ending after  December 31, 1986 , if the common parent of such group— “(A)  was incorporated in the State of Delaware in 1970, \n \n “(B)  was the successor to a corporation that was incorporated in the State of Illinois in 1949, and \n \n “(C)  used a method of accounting for long-term contracts of accounting [sic] for a substantial part of its income from the performance of engineering services. \n \n \n “(5)   Special rule for paragraphs (2) and (3) .— If any loan, lease, contract, or evidence of any transaction to which paragraph (2) or (3) applies is transferred after  June 10, 1987 , to a person other than a related party (within the meaning of paragraph (2)), paragraph (2) or (3) shall cease to apply on and after the date of such transfer.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'The amount of any item of gross income shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under the method of accounting used in computing taxable income, such amount is to be properly accounted for as of a different period.\nFor purposes of this section, the all events test is met with respect to any item of gross income if all the events have occurred which fix the right to receive such income and the amount of such income can be determined with reasonable accuracy.\nParagraph (1) shall not apply with respect to any item of gross income for which the taxpayer uses a special method of accounting provided under any other provision of this chapter, other than any provision of part V of subchapter P (except as provided in clause (ii) of paragraph (1)(B)).\nFor purposes of this subsection, in the case of a contract which contains multiple performance obligations, the allocation of the transaction price to each performance obligation shall be equal to the amount allocated to each performance obligation for purposes of including such item in revenue in the applicable financial statement of the taxpayer.\nFor purposes of paragraph (1), if the financial results of a taxpayer are reported on the applicable financial statement (as defined in paragraph (3)) for a group of entities, such statement shall be treated as the applicable financial statement of the taxpayer.\nExcept as otherwise provided in this paragraph, the election under paragraph (1)(B) shall be made at such time, in such form and manner, and with respect to such categories of advance payments, as the Secretary may provide.\nAn election under paragraph (1)(B) shall be effective for the taxable year with respect to which it is first made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to revoke such election. For purposes of this title, the computation of taxable income under an election made under paragraph (1)(B) shall be treated as a method of accounting.\nExcept as otherwise provided by the Secretary, the election under paragraph (1)(B) shall not apply with respect to advance payments received by the taxpayer during a taxable year if such taxpayer ceases to exist during (or with the close of) such taxable year.\nFor purposes of this subsection, an item of gross income is received by the taxpayer if it is actually or constructively received, or if it is due and payable to the taxpayer.\nFor purposes of this subsection, rules similar to subsection (b)(4) shall apply.\nIn the case of the death of a taxpayer whose taxable income is computed under an accrual method of accounting, any amount accrued only by reason of the death of the taxpayer shall not be included in computing taxable income for the period in which falls the date of the taxpayer’s death.\nFor purposes of subsection (a), tips included in a written statement furnished an employer by an employee pursuant to section 6053(a) shall be deemed to be received at the time the written statement including such tips is furnished to the employer.\nIn the case of insurance proceeds received as a result of destruction or damage to crops, a taxpayer reporting on the cash receipts and disbursements method of accounting may elect to include such proceeds in income for the taxable year following the taxable year of destruction or damage, if he establishes that, under his practice, income from such crops would have been reported in a following taxable year. For purposes of the preceding sentence, payments received under the Agricultural Act of 1949, as amended, or title II of the Disaster Assistance Act of 1988, as a result of (1) destruction or damage to crops caused by drought, flood, or any other natural disaster, or (2) the inability to plant crops because of such a natural disaster shall be treated as insurance proceeds received as a result of destruction or damage to crops. An election under this subsection for any taxable year shall be made at such time and in such manner as the Secretary prescribes.\nIn the case of income derived from the sale or exchange of livestock in excess of the number the taxpayer would sell if he followed his usual business practices, a taxpayer reporting on the cash receipts and disbursements method of accounting may elect to include such income for the taxable year following the taxable year in which such sale or exchange occurs if he establishes that, under his usual business practices, the sale or exchange would not have occurred in the taxable year in which it occurred if it were not for drought, flood, or other weather-related conditions, and that such conditions had resulted in the area being designated as eligible for assistance by the Federal Government.\nParagraph (1) shall apply only to a taxpayer whose principal trade or business is farming (within the meaning of section 6420(c)(3)).\nIf section 1033(e)(2) applies to a sale or exchange of livestock described in paragraph (1), the election under paragraph (1) shall be deemed valid if made during the replacement period described in such section.\nIn the case of a taxpayer the taxable income of which is computed under an accrual method of accounting, any income attributable to the sale or furnishing of utility services to customers shall be included in gross income not later than the taxable year in which such services are provided to such customers.\nAny interest not included in gross income by reason of paragraph (1) shall be treated as credited in the next calendar year.\nNo deduction shall be allowed to any qualified financial institution for interest not includible in gross income under paragraph (1) until such interest is includible in gross income.\nFor purposes of this subsection, the terms “qualified individual”, “qualified financial institution”, and “deposit” have the same respective meanings as when used in section 165( l ).\nFor purposes of this title, in the case of an individual on the cash receipts and disbursements method of accounting, a qualified prize option shall be disregarded in determining the taxable year for which any portion of the qualified prize is properly includible in gross income of the taxpayer.\nThe Secretary shall provide for the application of this subsection in the case of a partnership or other pass-through entity consisting entirely of individuals described in paragraph (1).\nAcquisition of control of a corporation shall be taken into account under this subsection with respect to a qualifying electric transmission transaction only if the principal trade or business of such corporation is a trade or business referred to in subparagraph (A).\nThe term “exempt utility property” shall not include any property which is located outside the United States.\nIn the case of a corporation which is a member of an affiliated group filing a consolidated return, any exempt utility property purchased by another member of such group shall be treated as purchased by such corporation for purposes of applying paragraph (1)(A).\nFor purposes of this subsection, the taxpayer shall be considered to have purchased any property if the unadjusted basis of such property is its cost within the meaning of section 1012.\nAn election under paragraph (1) shall be made at such time and in such manner as the Secretary may require and, once made, shall be irrevocable.\nSection 453 shall not apply to any qualifying electric transmission transaction with respect to which an election to apply this subsection is made.\nThe Agricultural Act of 1949, as amended, referred to in subsec. (f), is  act Oct. 31, 1949, ch. 792 ,  63 Stat. 1051 , as amended, which is classified principally to chapter 35A (§\u202f1421 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under  section 1421 of Title 7  and Tables.\nThe Disaster Assistance Act of 1988, referred to in subsec. (f), is  Pub. L. 100–387 ,  Aug. 11, 1988 ,  102 Stat. 924 . Title II of the Disaster Assistance Act of 1988 is set out as a note under  section 1421 of Title 7 . For complete classification of this Act to the Code, see Tables.\n2019—Subsec. (k)(3).  Pub. L. 116–94  substituted “ January 1, 2021 ” for “ January 1, 2018 ” in introductory provisions.\n2018—Subsec. (k)(3).  Pub. L. 115–123  substituted “ January 1, 2018 ” for “ January 1, 2017 ” in introductory provisions.\n2017—Subsecs. (b) to (k).  Pub. L. 115–97  first added subsec. (b) and then added subsec. (c) and correspondingly redesignated former subsecs. (b) to (i) first as (c) to (j) and then as (d) to (k), respectively.\n2015—Subsec. (i)(3).  Pub. L. 114–113  substituted “ January 1, 2017 ” for “ January 1, 2015 ” in introductory provisions.\n2014—Subsec. (i)(3).  Pub. L. 113–295  substituted “ January 1, 2015 ” for “ January 1, 2014 ” in introductory provisions.\n2013—Subsec. (i)(3).  Pub. L. 112–240  substituted “ January 1, 2014 ” for “ January 1, 2012 ” in introductory provisions.\n2010—Subsec. (i)(3).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2010 ” in introductory provisions.\n2008—Subsec. (i)(3).  Pub. L. 110–343, §\u202f109(a)(1) , inserted “(before  January 1, 2010 , in the case of a qualified electric utility)” after “ January 1, 2008 ” in introductory provisions.\nSubsec. (i)(4)(B)(ii).  Pub. L. 110–343, §\u202f109(b) , substituted “the date which is 4 years after the close of the taxable year in which the transaction occurs” for “ December 31, 2007 ”.\nSubsec. (i)(5)(C).  Pub. L. 110–343, §\u202f109(c) , added subpar. (C).\nSubsec. (i)(6) to (11).  Pub. L. 110–343, §\u202f109(a)(2) , added par. (6) and redesignated former pars. (6) to (10) as (7) to (11), respectively.\n2005—Subsec. (i)(3).  Pub. L. 109–58, §\u202f1305(a) , substituted “2008” for “2007” in introductory provisions.\nSubsec. (i)(4)(B)(ii).  Pub. L. 109–58, §\u202f1305(b) , substituted “ December 31, 2007 ” for “the close of the period applicable under subsection (a)(2)(B) as extended under paragraph (2)”.\n2004—Subsec. (e)(3).  Pub. L. 108–357, §\u202f311(c) , added par. (3).\nSubsec. (i).  Pub. L. 108–357, §\u202f909(a) , added subsec. (i).\n1998—Subsec. (h).  Pub. L. 105–277  added subsec. (h).\n1997—Subsec. (e).  Pub. L. 105–34  inserted “,\u2000flood, or other weather-related conditions” after “drought” in heading and substituted “drought, flood, or other weather-related conditions, and that such conditions” for “drought conditions, and that these drought conditions” in par. (1).\n1988—Subsec. (d).  Pub. L. 100–647, §\u202f6033(a) , inserted “or title II of the Disaster Assistance Act of 1988,” after “the Agricultural Act of 1949, as amended,”.\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f6030(a) , struck out “(other than livestock described in section 1231(b)(3))” after “exchange of livestock”.\nSubsecs. (f), (g).  Pub. L. 100–647, §\u202f1009(d)(3) , redesignated subsec. (f), relating to treatment of interest on frozen deposits in certain financial institutions, as (g).\n1986—Subsec. (f).  Pub. L. 99–514, §\u202f905(b) , added subsec. (f) relating to treatment of interest on frozen deposits in certain financial institutions.\nPub. L. 99–514, §\u202f821(a) , added subsec. (f) relating to special rule for utility services.\n1976—Subsec. (d).  Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 2102(a), (b), inserted reference to disaster payments in heading, provided that payments received under the Agricultural Act of 1949, as amended, be treated as insurance proceeds received as a result of destruction or damage to crops if the payments are received as the result of destruction or damage from drought, flood, or other natural disaster, or as the result of inability to plant crops because of drought, flood, or other natural disaster, and struck out “or his delegate” after “Secretary”.\nSubsec. (e).  Pub. L. 94–455, §\u202f2141(a) , added subsec. (e).\n1969—Subsec. (d).  Pub. L. 91–172  added subsec. (d).\n1965—Subsec. (c).  Pub. L. 89–97  added subsec. (c).\nPub. L. 116–94, div. Q, title I, §\u202f132(b) ,  Dec. 20, 2019 ,  133 Stat. 3233 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40414(b) ,  Feb. 9, 2018 ,  132 Stat. 152 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after  December 31, 2016 .”\nPub. L. 115–97, title I, §\u202f13221(c) –(e),  Dec. 22, 2017 ,  131 Stat. 2116 , 2117, provided that: \n “(c)   Effective Date .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(d)   Coordination With Section 481.— “(1)   In general .— In the case of any qualified change in method of accounting for the taxpayer’s first taxable year beginning after  December 31, 2017 — “(A)  such change shall be treated as initiated by the taxpayer, and \n \n “(B)  such change shall be treated as made with the consent of the Secretary of the Treasury. \n \n \n “(2)   Qualified change in method of accounting .— For purposes of this subsection, the term ‘qualified change in method of accounting’ means any change in method of accounting which— “(A)  is required by the amendments made by this section, or \n \n “(B)  was prohibited under the Internal Revenue Code of 1986 prior to such amendments and is permitted under such Code after such amendments. \n \n \n \n “(e)   Special Rules for Original Issue Discount .— Notwithstanding subsection (c), in the case of income from a debt instrument having original issue discount— “(1)  the amendments made by this section shall apply to taxable years beginning after  December 31, 2018 , and \n \n “(2)  the period for taking into account any adjustments under section 481 by reason of a qualified change in method of accounting (as defined in subsection (d)) shall be 6 years.”\nPub. L. 114–113, div. Q, title I, §\u202f191(b) ,  Dec. 18, 2015 ,  129 Stat. 3075 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f159(b) ,  Dec. 19, 2014 ,  128 Stat. 4022 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after  December 31, 2013 .”\nPub. L. 112–240, title IV, §\u202f411(b) ,  Jan. 2, 2013 ,  126 Stat. 2343 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after  December 31, 2011 .”\nPub. L. 109–58, title XIII, §\u202f1305(c) ,  Aug. 8, 2005 ,  119 Stat. 997 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to transactions occurring after the date of the enactment of this Act [ Aug. 8, 2005 ]. \n \n “(2)   Technical amendment .— The amendment made by subsection (b) [amending this section] shall take effect as if included in the amendments made by section 909 of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 , amending this section].”\nPub. L. 111–312, title VII, §\u202f705(b) ,  Dec. 17, 2010 ,  124 Stat. 3311 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after  December 31, 2009 .”\nPub. L. 110–343, div. B, title I, §\u202f109(d) ,  Oct. 3, 2008 ,  122 Stat. 3822 , provided that: \n “(1)   Extension .— The amendments made by subsection (a) [amending this section] shall apply to transactions after  December 31, 2007 . \n \n “(2)   Transfers of operational control .— The amendment made by subsection (b) [amending this section] shall take effect as if included in section 909 of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ]. \n \n “(3)   Exception for property located outside the united states .— The amendment made by subsection (c) [amending this section] shall apply to transactions after the date of the enactment of this Act [ Oct. 3, 2008 ].”\nPub. L. 108–357, title III, §\u202f311(d) ,  Oct. 22, 2004 ,  118 Stat. 1467 , provided that:  “The amendments made by this section [amending this section and  section 1033 of this title ] shall apply to any taxable year with respect to which the due date (without regard to extensions) for the return is after  December 31, 2002 .”\nPub. L. 108–357, title VIII, §\u202f909(b) ,  Oct. 22, 2004 ,  118 Stat. 1659 , provided that:  “The amendments made by this section [amending this section] shall apply to transactions occurring after the date of the enactment of this Act [ Oct. 22, 2004 ], in taxable years ending after such date.”\nPub. L. 105–277, div. J, title V, §\u202f5301(b) ,  Oct. 21, 1998 ,  112 Stat. 2681–918 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to any prize to which a person first becomes entitled after the date of enactment of this Act [ Oct. 21, 1998 ]. \n \n “(2)   Transition rule .— The amendment made by this section shall apply to any prize to which a person first becomes entitled on or before the date of enactment of this Act, except that in determining whether an option is a qualified prize option as defined in section 451(h)(2)(A) [now 451(j)(2)(A)] of the Internal Revenue Code of 1986 (as added by such amendment)— “(A)  clause (ii) of such section 451(h)(2)(A) [now 451(j)(2)(A)] shall not apply, and \n \n “(B)  such option shall be treated as a qualified prize option if it is exercisable only during all or part of the 18-month period beginning on  July 1, 1999 .”\nPub. L. 105–34, title IX, §\u202f913(c) ,  Aug. 5, 1997 ,  111 Stat. 878 , provided that:  “The amendments made by this section [amending this section and  section 1033 of this title ] shall apply to sales and exchanges after  December 31, 1996 .”\nAmendment by  section 1009(d)(3) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6030(b) ,  Nov. 10, 1988 ,  102 Stat. 3694 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to sales or exchanges occurring after  December 31, 1987 .”\nPub. L. 100–647, title VI, §\u202f6033(b) ,  Nov. 10, 1988 ,  102 Stat. 3695 , as amended by  Pub. L. 101–239, title VII, §\u202f7816(g) ,  Dec. 19, 1989 ,  103 Stat. 2421 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to payments received before, on, or after the date of enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 99–514, title VIII, §\u202f821(b) ,  Oct. 22, 1986 ,  100 Stat. 2373 , as amended by  Pub. L. 100–647, title I, §\u202f1008(h) ,  Nov. 10, 1988 ,  102 Stat. 3444 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Change in method of accounting .— If a taxpayer is required by the amendments made by this section to change its method of accounting for any taxable year— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as having been made with the consent of the Secretary, and \n \n “(C)  the adjustments under section 481 of the Internal Revenue Code of 1954 [now 1986] by reason of such change shall be taken into account ratably over a period no longer than the first 4 taxable years beginning after  December 31, 1986 . \n \n \n “(3)   Special rule for certain cycle billing .— If a taxpayer for any taxable year beginning before  August 16, 1986 , for purposes of chapter 1 of the Internal Revenue Code of 1986 took into account income from services described in section 451(f) [now 451(h)] of such Code (as added by subsection (a)) on the basis of the period in which the customers’ meters were read, then such treatment for such year shall be deemed to be proper. The preceding sentence shall also apply to any taxable year beginning after  August 16, 1986 , and before  January 1, 1987 , if the taxpayer treated such income in the same manner for the taxable year preceding such taxable year.”\nPub. L. 99–514, title IX, §\u202f905(c) ,  Oct. 22, 1986 ,  100 Stat. 2387 , as amended by  Pub. L. 100–647, title I, §\u202f1009(d)(2) ,  Nov. 10, 1988 ,  102 Stat. 3450 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending  section 165 of this title ] shall apply to taxable years beginning after  December 31, 1981 , and, except as provided in paragraph (2), the amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(2)   Special rules for subsection  (b).— “(A)  The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1982 , and before  January 1, 1987 , only if the qualified individual elects to have such amendment apply for all such taxable years. \n \n “(B)  In the case of interest attributable to the period beginning  January 1, 1983 , and ending  December 31, 1987 , the interest deduction of financial institutions shall be determined without regard to paragraph (3) of section 451(f) [now 451(h)] of the Internal Revenue Code of 1986 (as added by subsection (b)).”\nPub. L. 94–455, title XXI, §\u202f2102(c) ,  Oct. 4, 1976 ,  90 Stat. 1900 , provided that:  “The amendments made by this section [amending this section] shall apply to payments received after  December 31, 1973 , in taxable years ending after such date.”\nPub. L. 94–455, title XXI, §\u202f2141(b) ,  Oct. 4, 1976 ,  90 Stat. 1933 , provided that:  “The amendment made by this section [amending this section] applies to taxable years beginning after  December 31, 1975 .”\nPub. L. 91–172, title II, §\u202f215(b) ,  Dec. 30, 1969 ,  83 Stat. 573 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Dec. 30, 1969 ].”\nAmendment by  Pub. L. 89–97  applicable only with respect to tips received by employees after 1965, see  section 313(f) of Pub. L. 89–97 , set out as an Effective Date note under  section 6053 of this title .\nVoluntary separation incentives paid to members of Armed Forces under  10 U.S.C. 1175  as includable in gross income only for taxable year in which incentive is paid, see  section 662(b) of Pub. L. 102–190 , set out as a note under  section 1175 of Title 10 , Armed Forces.\nFor provisions relating to credit or refund of overpayments of tax, and assessment of underpayments of tax, due to amendments by  section 905 of Pub. L. 99–514  or  section 1009(d) of Pub. L. 100–647 , see  section 1009(d)(4) of Pub. L. 100–647 , set out as a note under  section 165 of this title .\nPub. L. 97–248, title II, §\u202f229 ,  Sept. 3, 1982 ,  96 Stat. 493 , as amended by  Pub. L. 98–369, div. A, title VII, §\u202f712(m) ,  July 18, 1984 ,  98 Stat. 955 , provided that: \n “(a)   In General .— The Secretary of the Treasury shall modify the income tax regulations relating to accounting for long-term contracts to— “(1)  clarify the time at which a contract is to be considered completed, \n \n “(2)  clarify when— “(A)  one agreement will be treated as more than one contract, and \n \n “(B)  two or more agreements will be treated as one contract, and \n \n \n “(3)  properly allocate all costs which directly benefit, or are incurred by reason of, the extended period long-term contract activities of the taxpayer. \n \n \n “(b)   Extended Period Long-Term Contracts Defined .— For purposes of this section— “(1)   In general .— The term ‘extended period long-term contract’ means any long-term contract which the taxpayer estimates (at the time such contract is entered into) will not be completed within the 2-year period beginning on the contract commencement date of such contract. \n \n “(2)   Certain construction contracts.— “(A)   In general .— The term ‘extended period long-term contract’ does not include any construction contract entered into by a taxpayer— “(i)  who estimates (at the time such contract is entered into) that such contract will be completed within the 3-year period beginning on the contract commencement date of such contract, or \n \n “(ii)  whose average annual gross receipts over the 3 taxable years preceding the taxable year in which such contract is entered into do not exceed $25,000,000. \n \n \n “(B)   Determination of taxpayer’s gross receipts .— For purposes of subparagraph (A), the gross receipts of— “(i)  all trades or businesses (whether or not incorporated) which are under common control with the taxpayer (within the meaning of section 52(b)), and \n \n “(ii)  all members of any controlled group of corporations of which the taxpayer is a member, \n \n\n \u2001\u2001for the 3 taxable years of such persons preceding the taxable year in which the contract described in subparagraph (A) is entered into shall be included in the gross receipts of the taxpayer for the period described in subparagraph (A). The Secretary shall prescribe regulations which provide attribution rules that take into account, in addition to the persons and entities described in the preceding sentence, taxpayers who engage in construction contracts through partnerships, joint ventures, and corporations. \n \n “(C)   Controlled group of corporations .— The term ‘controlled group of corporations’ has the meaning given to such term by section 1563(a), except that— “(i)  ‘more than 50 percent’ shall be substituted for ‘at least 80 percent’ each place it appears in section 1563(a)(1), and \n \n “(ii)  the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. \n \n \n \n “(3)   Construction contract .— The term ‘construction contract’ means any contract for the building, construction, reconstruction, or rehabilitation of, or the installation of any integral component to, improvements to real property. \n \n “(4)   Contract commencement date .— The term ‘contract commencement date’ means, with respect to any contract, the first date on which any costs (other than costs such as bidding expenses or expenses incurred in connection with negotiating the contract) allocable to such contract are incurred. \n \n \n “(c)   Effective Dates; Special Rules.— “(1)   In general .— The modifications to regulations which are required to be made under paragraphs (1) and (2) of subsection (a) shall apply with respect to taxable years ending after  December 31, 1982 . \n \n “(2)   Cost allocation.— “(A)   In general .— Any modification to Income Tax Regulation 1.451–3 made under subsection (a)(3) which requires additional costs to be allocated to a contract shall apply only to the applicable percentage of such additional costs incurred in taxable years beginning after  December 31, 1982 , with respect to contracts entered into after such date. \n \n “(B)   Applicable percentage .— For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table: \n \n \n \n \n \n \n \u2001“If the taxable year begins in \u2001\u2001calendar year: The applicable percentage is: \n \n \n 1983 33⅓\u202f\u202f \n 1984 66⅔\u202f\u202f \n 1985 or thereafter 100. \n \n \n \n \n \n “(3)   Special rules.— “(A)   Time of completion .— Any contract of a taxpayer which would (but for this paragraph) be treated as having been completed prior to the first taxable year of such taxpayer ending after  December 31, 1982 , solely by reason of any modification to regulations made under subsection (a)(1), shall be treated as having been completed on the first day of such taxable year. \n \n “(B)   Aggregation and severance .— Any contract of a taxpayer which would (but for this paragraph) be treated as having been completed prior to the first taxable year of such taxpayer ending after  December 31, 1982 — “(i)  solely by reason of any modification to regulations made under subsection (a)(2), or \n \n “(ii)  solely by reason of any modifications to regulations made under both paragraphs (1) and (2) of subsection (a), \n \n\n \u2001\u2001shall be treated as having been completed on the first day after  December 31, 1982 , on which any contract which was severed from such contract (by reason of the modifications made by subsection (a)(2)) is completed (determined after the application of any modifications to regulations made under subsection (a)(1)). \n \n \n “(4)   Underpayments of estimated tax for 1982 .— To the extent provided in regulations, no addition to tax shall be made under section 6654 or 6655 of the Internal Revenue Code of 1954 for the taxpayer’s first taxable year ending after  December 31, 1982 , by reason of a long-term contract, but only with respect to installments required to be paid before  April 13, 1983 .”\nPub. L. 95–600, title I, §\u202f132 ,  Nov. 6, 1978 ,  92 Stat. 2782 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— The taxable year of inclusion in gross income of any amount covered by a private deferred compensation plan shall be determined in accordance with the principles set forth in regulations, rulings, and judicial decisions relating to deferred compensation which were in effect on  February 1, 1978 . \n \n “(b)   Private Deferred Compensation Plan Defined.— “(1)   In general .— For purposes of this section, the term ‘private deferred compensation plan’ means a plan, agreement, or arrangement— “(A)  where the person for whom the service is performed is not a State (within the meaning of paragraph (1) of section 457(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) and not an organization which is exempt from tax under section 501 of such Code, and \n \n “(B)  under which the payment or otherwise making available of compensation is deferred. \n \n \n “(2)   Certain plans excluded .— Paragraph (1) shall not apply to— “(A)  a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust, exempt from tax under section 501(a) of such Code, \n \n “(B)  an annuity plan or contract described in section 403 of such Code, \n \n “(C)  a qualified bond purchase plan described in section 405(a) of such Code, \n \n “(D)  that portion of any plan which consists of a transfer of property described in section 83 (determined without regard to subsection (e) thereof of such Code, and \n \n “(E)  that portion of any plan which consists of a trust to which section 402(b) of such Code applies. \n \n \n \n “(c)   Effective Date .— This section shall apply to taxable years ending on or after  February 1, 1978 .”\nPub. L. 95–258, §\u202f1 ,  Apr. 7, 1978 ,  92 Stat. 195 , provided that: \n “(a)   In General .— In the case of a taxpayer reporting on the cash receipts and disbursements method of accounting, if— “(1) (A)  the taxpayer receives in his first taxable year beginning in 1978 payments under the Agricultural Act of 1949, as amended, [see Short Title note set out under  section 1421 of Title 7 , Agriculture], as a result of— “(i)  the destruction or damage to crops caused by drought, flood, or any other natural disaster, or \n \n “(ii)  the inability to plant crops because of such a natural disaster, and \n \n \n “(B)  the taxpayer establishes that, under his practice, income from such crops could have been reported for his last taxable year beginning in 1977, or \n \n \n “(2) (A)  the taxpayer receives in his first taxable year beginning in 1978 deficiency (or ‘target price’) payments under the Agricultural Act of 1949, as amended, for any 1977 crop, and \n \n “(B)  the fifth month of such crop’s marketing year ends before  December 1, 1977 , \n \n \n\n then the taxpayer may elect to include such proceeds in income for his last taxable year beginning in 1977. \n \n “(b)   Making and Effect of Election — An election under this section for any taxable year shall be made at such time and in such manner as the Secretary of the Treasury may by regulations prescribe and shall apply with respect to all proceeds described in subsection (a) which were received by the taxpayer.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 152 , related to prepaid income.\nRepeal effective with respect to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see section 3 of act  June 15, 1955 , set out as an Effective Date of 1955 Amendment note under  section 381 of this title .\nFor provisions concerning increase in tax in any taxable year ending on or before  June 15, 1955  by reason of enactment of act  June 15, 1955 , see section 4 of act  June 15, 1955 , set out as a note under  section 381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Except as otherwise provided in this section, income from an installment sale shall be taken into account for purposes of this title under the installment method.\nThe term “installment sale” means a disposition of property where at least 1 payment is to be received after the close of the taxable year in which the disposition occurs.\nAny dealer disposition (as defined in subsection ( l )).\nA disposition of personal property of a kind which is required to be included in the inventory of the taxpayer if on hand at the close of the taxable year.\nFor purposes of this section, the term “installment method” means a method under which the income recognized for any taxable year from a disposition is that proportion of the payments received in that year which the gross profit (realized or to be realized when payment is completed) bears to the total contract price.\nSubsection (a) shall not apply to any disposition if the taxpayer elects to have subsection (a) not apply to such disposition.\nExcept as otherwise provided by regulations, an election under paragraph (1) with respect to a disposition may be made only on or before the due date prescribed by law (including extensions) for filing the taxpayer’s return of the tax imposed by this chapter for the taxable year in which the disposition occurs. Such an election shall be made in the manner prescribed by regulations.\nAn election under paragraph (1) with respect to any disposition may be revoked only with the consent of the Secretary.\nExcept in the case of marketable securities, paragraph (1) shall apply only if the date of the second disposition is not more than 2 years after the date of the first disposition.\nFor purposes of this subsection, if the second disposition is not a sale or exchange, an amount equal to the fair market value of the property disposed of shall be substituted for the amount realized.\nIf paragraph (1) applies for any taxable year, payments received in subsequent taxable years by the person making the first disposition shall not be treated as the receipt of payments with respect to the first disposition to the extent that the aggregate of such payments does not exceed the amount treated as received by reason of paragraph (1).\nAny sale or exchange of stock to the issuing corporation shall not be treated as a first disposition.\nA compulsory or involuntary conversion (within the meaning of section 1033) and any transfer thereafter shall not be treated as a second disposition if the first disposition occurred before the threat or imminence of the conversion.\nThis subsection shall not apply to a second disposition (and any transfer thereafter) if it is established to the satisfaction of the Secretary that neither the first disposition nor the second disposition had as one of its principal purposes the avoidance of Federal income tax.\nThe period for assessing a deficiency with respect to a first disposition (to the extent such deficiency is attributable to the application of this subsection) shall not expire before the day which is 2 years after the date on which the person making the first disposition furnishes (in such manner as the Secretary may by regulations prescribe) a notice that there was a second disposition of the property to which this subsection may have applied. Such deficiency may be assessed notwithstanding the provisions of any law or rule of law which would otherwise prevent such assessment.\nThe term “marketable securities” means any security for which, as of the date of the disposition, there was a market on an established securities market or otherwise.\nExcept as provided in paragraph (4), the term “payment” does not include the receipt of evidences of indebtedness of the person acquiring the property (whether or not payment of such indebtedness is guaranteed by another person).\nThe term “depreciable property” means property of a character which (in the hands of the transferee) is subject to the allowance for depreciation provided in section 167.\nParagraph (1) shall not apply if it is established to the satisfaction of the Secretary that the disposition did not have as one of its principal purposes the avoidance of Federal income tax.\nFor purposes of this subsection, the term “related persons” has the meaning given to such term by section 1239(b), except that such term shall include 2 or more partnerships having a relationship to each other described in section 707(b)(1)(B).\nIf, in a liquidation to which section 331 applies, the shareholder receives (in exchange for the shareholder’s stock) an installment obligation acquired in respect of a sale or exchange by the corporation during the 12-month period beginning on the date a plan of complete liquidation is adopted and the liquidation is completed during such 12-month period, then, for purposes of this section, the receipt of payments under such obligation (but not the receipt of such obligation) by the shareholder shall be treated as the receipt of payment for the stock.\nFor purposes of subsection (e)(1)(A), disposition of property by the corporation shall be treated also as disposition of such property by the shareholder.\nFor purposes of subparagraph (A), in the case of a controlling corporate shareholder (within the meaning of section 368(c)) of a selling corporation, an obligation acquired in respect of a sale or exchange by the selling corporation shall be treated as so acquired by such controlling corporate shareholder. The preceding sentence shall be applied successively to each controlling corporate shareholder above such controlling corporate shareholder.\nFor purposes of paragraph (1), the term “recapture income” means, with respect to any installment sale, the aggregate amount which would be treated as ordinary income under section 1245 or 1250 (or so much of section 751 as relates to section 1245 or 1250) for the taxable year of the disposition if all payments to be received were received in the taxable year of disposition.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the provisions of this section.\nThe regulations prescribed under paragraph (1) shall include regulations providing for ratable basis recovery in transactions where the gross profit or the total contract price (or both) cannot be readily ascertained.\nAny disposition of personal property by a person who regularly sells or otherwise disposes of personal property of the same type on the installment plan.\nAny disposition of real property which is held by the taxpayer for sale to customers in the ordinary course of the taxpayer’s trade or business.\nThe disposition on the installment plan of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5)).\nAny dispositions described in clause (ii) on the installment plan if the taxpayer elects to have paragraph (3) apply to any installment obligations which arise from such dispositions. An election under this paragraph shall not apply with respect to an installment obligation which is guaranteed by any person other than an individual.\nAny carrying charges or interest with respect to a disposition described in subparagraph (A) or (B) which are added on the books of account of the seller to the established cash selling price of the property shall be included in the total contract price of the property and, if such charges or interest are not so included, any payments received shall be treated as applying first against such carrying charges or interest.\nIn the case of any installment obligation to which paragraph (2)(B) applies, the tax imposed by this chapter for any taxable year for which payment is received on such obligation shall be increased by the amount of interest determined in the manner provided under subparagraph (B).\nFor purposes of clause (i), the portion of any tax attributable to the receipt of any payment shall be determined without regard to any interest imposed under subparagraph (A).\nNo interest shall be determined for any payment received in the taxable year of the disposition from which the installment obligation arises.\nAny amount payable under this paragraph shall be taken into account in computing the amount of any deduction allowable to the taxpayer for interest paid or accrued during such taxable year.\nA prior section 453, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 154 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f27(a) ,  72 Stat. 1624 ;  Oct. 16, 1962 ,  Pub. L. 87–834, §\u202f13(f)(5) ,  76 Stat. 1035 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II , §§\u202f222(a), 231(b)(5),  78 Stat. 75 , 105;  Aug. 22, 1964 ,  Pub. L. 88–484, §\u202f1(b)(2) ,  78 Stat. 597 ;  Aug. 31, 1964 ,  Pub. L. 88–539, §\u202f3(a) , (b),  78 Stat. 746 ;  Sept. 12, 1966 ,  Pub. L. 89–570, §\u202f1(b)(5) ,  80 Stat. 762 ;  Nov. 13, 1966 ,  Pub. L. 89–809, title II, §\u202f202(c) ,  80 Stat. 1576 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title II, §\u202f211(b)(5) , title III, §\u202f301(b)(7), title IV, §\u202f412(a), title IX, §\u202f916(a),  83 Stat. 570 , 585, 608, 723;  Oct. 4, 1976 ,  Pub. L. 94–455, title II, §\u202f205(c)(1)(E) , title XIX, §§\u202f1901(a)(66), 1906(b)(13)(A), 1951(b)(7)(A),  90 Stat. 1535 , 1775, 1834, 1838;  Nov. 6, 1978 ,  Pub. L. 95–600, title VII, §\u202f703(j)(3) ,  92 Stat. 2941 ;  Apr. 1, 1980 ,  Pub. L. 96–222, title I, §\u202f104(a)(4)(H)(iv) ,  94 Stat. 217 ;  Apr. 2, 1980 ,  Pub. L. 96–223, title IV, §\u202f403(b)(2)(B) ,  94 Stat. 305 ;  Oct. 19, 1980 ,  Pub. L. 96–471, §\u202f2(c)(4) ,  94 Stat. 2254 , related to installment method in general, installment method for dealers in personal property, and gain or loss dispositions of installment obligations, prior to repeal by  Pub. L. 96–471, §\u202f2(a) ,  Oct. 19, 1980 ,  94 Stat. 2247 . See sections 453A and 453B of this title.\n2004—Subsec. (f)(4)(B).  Pub. L. 108–357  struck out “is issued by a corporation or a government or political subdivision thereof and” before “is readily tradable”.\n2000—Subsecs. (a), (d)(1), (i)(1), (k).  Pub. L. 106–573  repealed  Pub. L. 106–170, §\u202f536(a) . See 1999 Amendment notes below.\n1999—Subsec. (a).  Pub. L. 106–170, §\u202f536(a)(1) , which substituted “Use of installment method” for “General rule” in subsec. heading, designated existing provisions as par. (1) and inserted heading, and added heading and text of par. (2), text of which read as follows: “(2)  Accrual method taxpayer .—The installment method shall not apply to income from an installment sale if such income would be reported under an accrual method of accounting without regard to this section. The preceding sentence shall not apply to a disposition described in subparagraph (A) or (B) of subsection ( l )(2).”, was repealed by  Pub. L. 106–573, §\u202f2(a) . See Effective Date and Construction of 2000 Amendment note below.\nSubsecs. (d)(1), (i)(1), (k).  Pub. L. 106–170, §\u202f536(a)(2) , which substituted “(a)(1)” for “(a)” wherever appearing, was repealed by  Pub. L. 106–573 . See Effective Date and Construction of 2000 Amendment note below.\n1988—Subsec. (f)(1).  Pub. L. 100–647, §\u202f1018(u)(25) , substituted “subsections (g)” for “subsection (g)”.\nSubsec. (f)(8).  Pub. L. 100–647, §\u202f1018(u)(26) , substituted “payments to be” for “payment to be”.\nSubsec. (g)(1).  Pub. L. 100–647, §\u202f1006(i)(2)(B) , struck out “(within the meaning of section 1239(b))” after “between related persons”.\nPub. L. 100–647, §\u202f1006(i)(1) , added subpars. (A) to (C) and struck out former subpars. (A) and (B) which read as follows:\n“(A) subsection (a) shall not apply, and\n“(B) for purposes of this title—\n“(i) except as provided in clause (ii), all payments to be received shall be treated as received in the year of the disposition, and\n“(ii) in the case of any payments which are contingent as to amount but with respect to which the fair market value may not be reasonably ascertained—\n“(I) the basis shall be recovered ratably, and\n“(II) the purchaser may not increase the basis of any property acquired in such sale by any amount before such time as the seller includes such amount in income.”\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1006(i)(2)(A) , added par. (3).\nSubsec. (h)(1)(B).  Pub. L. 100–647, §\u202f1006(e)(7)(A) , substituted “to 1 person in 1 transaction” for “to one person” in concluding provisions.\nSubsec. (h)(1)(E).  Pub. L. 100–647, §\u202f1006(e)(7)(B) , substituted “section 368(c)” for “section 368(c)(1)”.\nSubsec. (j).  Pub. L. 100–647, §\u202f1008(g)(1) , redesignated subsec. (j), relating to current inclusion in case of revolving credit plans, etc., as (k).\nSubsec. (k).  Pub. L. 100–647, §\u202f2004(d)(5) , struck out “and section 453A” after “subsection (a)” in second sentence.\nPub. L. 100–647, §\u202f1008(g)(1) , redesignated subsec. (j), relating to current inclusion in case of revolving credit plans, etc., as (k).\nSubsec. ( l )(1)(A).  Pub. L. 100–647, §\u202f2004(d)(1) , inserted “of the same type” after “disposes of personal property”.\n1987—Subsec. (b)(2)(A).  Pub. L. 100–203, §\u202f10202(b)(1) , substituted “Dealer dispositions” for “Dealer disposition of personal property” in heading and amended text generally. Prior to amendment, text read as follows: “A disposition of personal property on the installment plan by a person who regularly sells or otherwise disposes of personal property on the installment plan.”\nSubsec. ( l ).  Pub. L. 100–203, §\u202f10202(b)(2) , added subsec. ( l ).\n1986—Subsec. (f)(1).  Pub. L. 99–514, §\u202f642(a)(3) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Except for purposes of subsections (g) and (h), the term ‘related person’ means a person whose stock would be attributed under section 318(a) (other than paragraph (4) thereof) to the person first disposing of the property.”\nSubsec. (f)(8).  Pub. L. 99–514, §\u202f642(b)(1) , added par. (8).\nSubsec. (g).  Pub. L. 99–514, §\u202f642(a)(1)(D) , substituted “controlled entity” for “80-percent owned entity” in heading.\nSubsec. (g)(1).  Pub. L. 99–514, §\u202f642(b)(2) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of an installment sale of depreciable property between related persons within the meaning of section 1239(b), subsection (a) shall not apply, and, for purposes of this title, all payments to be received shall be deemed received in the year of the disposition.”\nSubsec. (h).  Pub. L. 99–514, §\u202f631(e)(8)(C) , substituted “certain liquidations” for “section 337 liquidations” in heading.\nSubsec. (h)(1)(A).  Pub. L. 99–514, §\u202f631(e)(8)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If, in connection with a liquidation to which section 337 applies, in a transaction to which section 331 applies the shareholder receives (in exchange for the shareholder’s stock) an installment obligation acquired in respect of a sale or exchange by the corporation during the 12-month period set forth in section 337(a), then, for purposes of this section, the receipt of payments under such obligation (but not the receipt of such obligation) by the shareholder shall be treated as the receipt of payment for the stock.”\nSubsec. (h)(1)(B).  Pub. L. 99–514, §\u202f631(e)(8)(A) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Subparagraph (A) shall not apply to an installment obligation described in section 337(b)(1)(B) unless such obligation is also described in section 337(b)(2)(B).”\nSubsec. (h)(1)(E).  Pub. L. 99–514, §\u202f631(e)(8)(B) , substituted “subsidiaries” for “subsidiary” in heading and amended text generally. Prior to amendment, subpar. (E) read as follows: “For purposes of subparagraph (A), in any case to which section 337(c)(3) applies, an obligation acquired in respect of a sale or exchange by the selling corporation shall be treated as so acquired by the corporation distributing the obligation to the shareholder.”\nSubsec. (i)(2).  Pub. L. 99–514, §\u202f1809(c) , substituted “section 1245 or 1250 (or so much of section 751 as relates to section 1245 or 1250)” for “section 1245 or 1250”.\nSubsec. (j).  Pub. L. 99–514, §\u202f812(a) , added subsec. (j) relating to current inclusion in case of revolving credit plans, etc.\n1984—Subsec. (g).  Pub. L. 98–369, §\u202f421(b)(6)(C) , struck out “spouse or” after “property to” in heading.\nSubsec. (h)(1)(C).  Pub. L. 98–369, §\u202f421(b)(6)(B) , inserted “married to each other or are”.\nSubsec. (i).  Pub. L. 98–369, §\u202f112(a) , amended subsec. (i) generally, substituting provisions relating to recognition of recapture income in year of disposition for provisions relating to application of subsec. (a) in the case of an installment sale of section 179 property.\n1983—Subsec. (f)(6)(C).  Pub. L. 97–448  inserted “,\u2000when used in any provision of this section other than subsection (b)(1),” after “the term ‘payment’\u202f”.\n1981—Subsecs. (i), (j).  Pub. L. 97–34  added subsec. (i) and redesignated former subsec. (i) as (j).\nPub. L. 108–357, title VIII, §\u202f897(b) ,  Oct. 22, 2004 ,  118 Stat. 1649 , provided that:  “The amendment made by this section [amending this section] shall apply to sales occurring on or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 106–573, §\u202f2 ,  Dec. 28, 2000 ,  114 Stat. 3061 , provided that: \n “(a)   In General .— Subsection (a) of section 536 of the Ticket to Work and Work Incentives Improvement Act of 1999 (relating to modification of installment method and repeal of installment method for accrual method taxpayers) [ Pub. L. 106–170 , amending this section] is repealed effective with respect to sales and other dispositions occurring on or after the date of the enactment of such Act [ Dec. 17, 1999 ]. \n \n “(b)   Applicability .— The Internal Revenue Code of 1986 shall be applied and administered as if that subsection (and the amendments made by that subsection) had not been enacted.”\nPub. L. 106–170, title V, §\u202f536(c) ,  Dec. 17, 1999 ,  113 Stat. 1936 , provided that:  “The amendments made by this section [amending this section and  section 453A of this title ] shall apply to sales or other dispositions occurring on or after the date of the enactment of this Act [ Dec. 17, 1999 ].”\nAmendment by sections 1006(e)(7), (i)(1), (2), 1008(g)(1), and 1018(u)(25), (26) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 2004(d)(1), (5) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10202(e) ,  Dec. 22, 1987 ,  101 Stat. 1330–392 , as amended by  Pub. L. 100–647, title II, §\u202f2004(d)(3) , (4), (6),  Nov. 10, 1988 ,  102 Stat. 3599 , 3600, provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 56, 381, 453A, and 691 of this title and repealing  section 453C of this title ] shall apply to dispositions in taxable years beginning after  December 31, 1987 . \n \n “(2)   Special rules for dealers.— “(A)   In general .— In the case of dealer dispositions (within the meaning of section 453( l )(1) of the Internal Revenue Code of 1986 as added by this section), the amendments made by subsections (a) and (b) [amending this section and repealing  section 453C of this title ] shall apply to installment obligations arising from dispositions after  December 31, 1987 . \n \n “(B)   Special rules for obligations arising from dealer dispositions after  february 28, 1986 , and before  january 1, 1988 .— “(i)   In general .— In the case of an applicable installment obligation arising from a disposition described in subclause (I) or (II) of section 453C(e)(1)(A)(i) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this section) before  January 1, 1988 , the amendments made by subsections (a) and (b) shall apply to taxable years beginning after  December 31, 1987 . \n \n “(ii)   Change in method of accounting .— In the case of any taxpayer who is required by clause (i) to change its method of accounting for any taxable year with respect to obligations described in clause (i)— “(I)  such change shall be treated as initiated by the taxpayer, \n \n “(II)  such change shall be treated as made with the consent of the Secretary of the Treasury or his delegate, and \n \n “(III)  the net amount of adjustments required by section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period not longer than 4 taxable years. \n \n \n \n “(C)   Certain rules made applicable .— For purposes of this paragraph, rules similar to the rules of paragraphs (4) and (5) of section 812(c) of the Tax Reform Act of 1986 [ Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note below] (as added by the Technical and Miscellaneous Revenue Act of 1988 [ Pub. L. 100–647 ]) shall apply. \n \n \n “(3)   Special rule for nondealers.— “(A)   Election .— A taxpayer may elect, at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe, to have the amendments made by subsections (a) and (c) [amending sections 381, 453A, and 691 of this title and repealing  section 453C of this title ] apply to taxable years ending after  December 31, 1986 , with respect to dispositions and pledges occurring after  August 16, 1986 . \n \n “(B)   Pledging rules .— Except as provided in subparagraph (A)— “(i)   In general .— Section 453A(d) of the Internal Revenue Code of 1986 shall apply to any installment obligation which is pledged to secure any secured indebtedness (within the meaning of section 453A(d)(4) of such Code) after  December 17, 1987 , in taxable years ending after such date. \n \n “(ii)   Coordination with section 453c .— For purposes of section 453C of such Code (as in effect before its repeal), the face amount of any obligation to which section 453A(d) of such Code applies shall be reduced by the amount treated as payments on such obligation under section 453A(d) of such Code and the amount of any indebtedness secured by it shall not be taken into account. \n \n \n “(C)   Certain dispositions deemed made on 1st day of taxable year .— If the taxpayer makes an election under subparagraph (A), in the case of the taxpayer’s 1st taxable year ending after  December 31, 1986 — “(i)  dispositions after  August 16, 1986 , and before the 1st day of such taxable year shall be treated as made on such 1st day, and \n \n “(ii)  subsections (b)(2)(B) and (c)(4) of section 453A of such Code shall be applied separately with respect to such dispositions by substituting for ‘$5,000,000’ the amount which bears the same ratio to $5,000,000 as the number of days after  August 16, 1986 , and before such 1st day bears to 365. \n \n \n \n “(4)   Minimum tax .— The amendment made by subsection (d) [amending  section 56 of this title ] shall apply to dispositions in taxable years beginning after  December 31, 1986 . \n \n “(5)   Coordination with tax reform act of 1986 .— The amendments made by this section shall not apply to any installment obligation or to any taxpayer during any period to the extent the amendments made by section 811 of the Tax Reform Act of 1986 [ section 811 of Pub. L. 99–514 , amending former  section 453C of this title  and enacting provisions set out as a note under former  section 453C of this title ] do not apply to such obligation or during such period.”\nAmendment by  section 631(e)(8) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by section 642(a)(1)(D), (3), (b) of  Pub. L. 99–514  applicable to sales after  Oct. 22, 1986 , in taxable years ending after such date, but not applicable to sales made after  Aug. 14, 1986 , which are made pursuant to a binding contract in effect on  Aug. 14, 1986 , and at all times thereafter, see  section 642(c) of Pub. L. 99–514 , set out as a note under  section 1239 of this title .\nPub. L. 99–514, title VIII, §\u202f812(c) ,  Oct. 22, 1986 ,  100 Stat. 2372 , as amended by  Pub. L. 100–647, title I, §\u202f1008(g)(3) –(6),  Nov. 10, 1988 ,  102 Stat. 3443 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Sales of stock, etc .— Section 453(k)(2) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to sales after  December 31, 1986 , in taxable years ending after such date. \n \n “(3)   Change in method of accounting .— In the case of any taxpayer who made sales under a revolving credit plan and was on the installment method under section 453 or 453A of the Internal Revenue Code of 1986 for such taxpayer’s last taxable year beginning before  January 1, 1987 , the amendments made by this section [amending this section and  section 453A of this title ] shall be treated as a change in method of accounting for its 1st taxable year beginning after  December 31, 1986 , and— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as having been made with the consent of the Secretary, \n \n “(C)  the period for taking into account adjustments under section 481 of such Code by reason of such change shall be equal to 4 years, and \n \n “(D)  except as provided in paragraph (4), the amount taken into account in each of such 4 years shall be the applicable percentage (determined in accordance with the following table) of the net adjustment: \n \n \n \n \n \n \n \u2001“In the case of the: The applicable percentage is: \n \n \n 1st taxable year 15\u202f\u202f \n 2nd taxable year 25\u202f\u202f \n 3rd taxable year 30\u202f\u202f \n 4th taxable year 30. \n \n \n \n \n\n If the taxpayer’s last taxable year beginning before  January 1, 1987 , was the taxpayer’s 1st taxable year in which sales were made under a revolving credit plan, all adjustments under section 481 of such Code shall be taken into account in the taxpayer’s 1st taxable year beginning after  December 31, 1986 . \n \n “(4)   Acceleration of adjustments where contraction in amount of installment obligations.— “(A)   In general .— If the percentage determined under subparagraph (B) for any taxable year in the adjustment period exceeds the percentage which would otherwise apply under paragraph (3)(D) for such taxable year (determined after the application of this paragraph for prior taxable years in the adjustment period)— “(i)  the percentage determined under subparagraph (B) shall be substituted for the applicable percentage which would otherwise apply under paragraph (3)(D), and \n \n “(ii)  any increase in the applicable percentage by reason of clause (i) shall be applied to reduce the applicable percentage determined under paragraph (3)(D) for subsequent taxable years in the adjustment period (beginning with the 1st of such subsequent taxable years). \n \n \n “(B)   Determination of percentage .— For purposes of subparagraph (A), the percentage determined under this subparagraph for any taxable year in the adjustment period is the excess (if any) of— “(i)  the percentage determined by dividing the aggregate contraction in revolving installment obligations by the aggregate face amount of such obligations outstanding as of the close of the taxpayer’s last taxable year beginning before  January 1, 1987 , over \n \n “(ii)  the sum of the applicable percentages under paragraph (3)(D) (as modified by this paragraph) for prior taxable years in the adjustment period. \n \n \n “(C)   Aggregate contraction in revolving installment obligations .— For purposes of subparagraph (B), the aggregate contraction in revolving installment obligations is the amount by which— “(i)  the aggregate face amount of the revolving installment obligations outstanding as of the close of the taxpayer’s last taxable year beginning before  January 1, 1987 , exceeds \n \n “(ii)  the aggregate face amount of the revolving installment obligations outstanding as of the close of the taxable year involved. \n \n \n “(D)   Revolving installment obligations .— For purposes of this paragraph, the term ‘revolving installment obligations’ means installment obligations arising under a revolving credit plan. \n \n “(E)   Treatment of certain obligations disposed of on or before  october 26, 1987 .— For purposes of subparagraphs (B)(i) and (C)(i), in determining the aggregate face amount of revolving installment obligations outstanding as of the close of the taxpayer’s last taxable year beginning before  January 1, 1987 , there shall not be taken into account any obligation— “(i)  which was disposed of to an unrelated person on or before  October 26, 1987 , or \n \n “(ii)  was disposed of to an unrelated person on or after such date pursuant to a binding written contract in effect on  October 26, 1987 , and at all times thereafter before such disposition. \n \n\n For purposes of the preceding sentence, the term ‘unrelated person’ means any person who is not a related person (as defined in section 453(g) of the Internal Revenue Code of 1986). \n \n \n “(5)   Limitation on losses from sales of obligations under revolving credit plans .— If 1 or more obligations arising under a revolving credit plan and taken into account under paragraph (3) are disposed of during the adjustment period, then, notwithstanding any other provision of law— “(A)  no losses from such dispositions shall be recognized, and \n \n “(B)  the aggregate amount of the adjustment for taxable years in the adjustment period (in reverse order of time) shall be reduced by the amount of such losses. \n \n \n “(6)   Adjustment period .— For purposes of paragraphs (4) and (5), the adjustment period is the 4-year period under paragraph (3).”\nAmendment by  section 1809(c) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f112(b) ,  July 18, 1984 ,  98 Stat. 635 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply with respect to dispositions made after  June 6, 1984 . \n \n “(2)   Exception .— The amendments made by this section shall not apply with respect to any disposition conducted pursuant to a contract which was binding on  March 22, 1984 , and at all times thereafter. \n \n “(3)   Special rule for certain dispositions before  october 1, 1984 .— The amendments made by this section shall not apply to any disposition before  October 1, 1984 , of all or substantially all of the personal property of a cable television business pursuant to a written offer delivered by the seller on  June 20, 1984 , but only if the last payment under the installment contract is due no later than  October 1, 1989 .”\nAmendment by section 421(b)(6)(B), (C) of  Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nPub. L. 97–448, title III, §\u202f311(a) ,  Jan. 12, 1983 ,  96 Stat. 2411 , provided that:  “The amendments made by sections 301, 302, and 303 [amending this section and sections 453B and 1239 of this title] shall apply to dispositions made after  October 19, 1980 , in taxable years ending after such date.”\nAmendment by  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nPub. L. 96–471, §\u202f6(a) ,  Oct. 19, 1980 ,  94 Stat. 2256 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by sections 2 [enacting this section and sections 453A and 453B of this title and amending sections 311, 336, 337, 381, former section 453, and sections 453B, 481, 644, 691, and 1255 of this title] and 5 [amending  section 1239 of this title ] shall apply to dispositions made after the date of the enactment of this Act [ Oct. 19, 1980 ] in taxable years ending after such date. \n \n “(2)   For section 453 (e).— Section 453(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 2) shall apply to first dispositions made after  May 14, 1980 . \n \n “(3)   For section 453 (h).— Paragraphs (1) and (2) of section 453(h) of such Code (as amended by section 2) shall apply in the case of distributions of installment obligations after  March 31, 1980 . \n \n “(4)   For section 453 a.— Section 453A of the Internal Revenue Code of 1986 (as amended by section 2) shall apply to taxable years ending after the date of enactment of this Act [ Oct. 19, 1980 ]. \n \n “(5)   For section 453 b(f).— Section 453B(f) of the Internal Revenue Code of 1986 (as amended by section 2) shall apply to installment obligations becoming unenforceable after the date of the enactment of this Act [ Oct. 19, 1980 ]. \n \n “(6)   For section 2 (c).— The amendments made by section 2(c) [amending sections 336, 337, 453B, and former  section 453 of this title ] shall take effect as if included in the amendments made by section 403(b) of the Crude Oil Windfall Profit Tax Act of 1980 [see  section 403(b)(3) of Pub. L. 96–223 , set out as an Effective Date of 1980 Amendments note under  section 337 of this title ]. \n \n “(7)   Special rule for application of former section 453 to certain dispositions .— In the case of any disposition made on or before the date of the enactment of this Act [ Oct. 19, 1980 ] in any taxable year ending after such date, the provisions of section 453(b) of the Internal Revenue Code of 1986 [see subsec. (b) of former  section 453 of this title , set out below] as in effect before such date, shall be applied with respect to such disposition without regard to— “(A)  paragraph (2) of such section 453(b), and \n \n “(B)  any requirement that more than 1 payment be received.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'This section shall apply to any obligation which arises from the disposition of any property under the installment method, but only if the sales price of such property exceeds $150,000.\nAn installment obligation shall not be treated as described in paragraph (1) if it arises from a disposition described in section 453( l )(2)(B), but the provisions of section 453( l )(3) (relating to interest payments on timeshares and residential lots) shall apply to such obligation.\nFor purposes of paragraph (1), all sales or exchanges which are part of the same transaction (or a series of related transactions) shall be treated as 1 sale or exchange.\nIf an obligation to which this section applies is outstanding as of the close of any taxable year, the tax imposed by this chapter for such taxable year shall be increased by the amount of interest determined in the manner provided under paragraph (2).\nAny amount payable under this subsection shall be taken into account in computing the amount of any deduction allowable to the taxpayer for interest paid or accrued during the taxable year.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this subsection including regulations providing for the application of this subsection in the case of contingent payments, short taxable years, and pass-thru entities.\nIf any amount is treated as received under paragraph (1) with respect to any installment obligation, subsequent payments received on such obligation shall not be taken into account for purposes of section 453 to the extent that the aggregate of such subsequent payments does not exceed the aggregate amount treated as received under paragraph (1).\nFor purposes of this subsection indebtedness is secured by an installment obligation to the extent that payment of principal or interest on such indebtedness is directly secured (under the terms of the indebtedness or any underlying arrangements) by any interest in such installment obligation. A payment shall be treated as directly secured by an interest in an installment obligation to the extent an arrangement allows the taxpayer to satisfy all or a portion of the indebtedness with the installment obligation.\nProvisions similar to those comprising this section were contained in former  section 453 of this title .\n2017—Subsec. (c)(3).  Pub. L. 115–97  struck out “or 1201 (whichever is appropriate)” after “1(h)” in concluding provisions.\n1999—Subsec. (d)(4).  Pub. L. 106–170  inserted at end “A payment shall be treated as directly secured by an interest in an installment obligation to the extent an arrangement allows the taxpayer to satisfy all or a portion of the indebtedness with the installment obligation.”\n1993—Subsec. (c)(3).  Pub. L. 103–66  inserted at end “For purposes of applying the preceding sentence with respect to so much of the gain which, when recognized, will be treated as long-term capital gain, the maximum rate on net capital gain under section 1(h) or 1201 (whichever is appropriate) shall be taken into account.”\n1989—Subsec. (b)(2)(B).  Pub. L. 101–239, §\u202f7821(a)(1) , substituted “such obligations held by the taxpayer” for “obligations of the taxpayer described in paragraph (1)”.\nSubsec. (b)(3).  Pub. L. 101–239, §\u202f7815(g) , substituted “Exception for personal use and farm property” for “Exception for farm property” in heading and amended text generally. Prior to amendment, text read as follows: “An installment obligation shall not be treated as described in paragraph (1) if it arises from the disposition of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5).”\nPub. L. 101–239, §\u202f7812(c)(2) , substituted “(5)).” for “(5).”\nSubsec. (c)(5), (6).  Pub. L. 101–239, §\u202f7821(a)(4)(B) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (d)(1)(B).  Pub. L. 101–239, §\u202f7821(a)(3) , substituted “the time the proceeds” for “the proceeds”.\nSubsec. (d)(2)(B).  Pub. L. 101–239, §\u202f7821(a)(2) , substituted “the later of the times referred to in subparagraph (A) or (B) of paragraph (1)” for “such secured indebtedness was incurred”.\n1988— Pub. L. 100–647, §\u202f5076(b)(1) , struck out “of real property” after “rules for nondealers” in section catchline.\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f5076(a) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “This section shall apply to any obligation which arises from the disposition of real property under the installment method which is property used in the taxpayer’s trade or business or property held for the production of rental income, but only if the sales price of such property exceeds $150,000.”\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f2004(d)(7) , inserted “and subsection (c)(4)” after “of this paragraph” in last sentence.\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f2004(d)(8) , substituted “farm property” for “personal use and farm property” in heading and amended text generally. Prior to amendment, text read as follows: “An installment obligation shall not be treated as described in paragraph (1) if it arises from the disposition—\n“(A) by an individual of personal use property (within the meaning of section 1275(b)(3)), or\n“(B) of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5)).”\nSubsec. (c).  Pub. L. 100–647, §\u202f1008(g)(2) , substituted “453(k)” for “453(j)” in subsec. (c) as in effect on date before the date of enactment of  Pub. L. 100–203  ( Dec. 22, 1987 ).\nSubsec. (e).  Pub. L. 100–647, §\u202f2004(d)(2) , added subsec. (e).\n1987— Pub. L. 100–203  substituted “Special rules for nondealers of real property” for “Installment method for dealers in personal property” in section catchline and amended text generally, revising and restating as subsecs. (a) to (d) provisions of former subsecs. (a) to (c).\n1986—Subsec. (a)(2).  Pub. L. 99–514, §\u202f812(b)(1) , struck out last sentence which read as follows: “This paragraph shall not apply with respect to sales of personal property under a revolving credit type plan.”\nSubsec. (c).  Pub. L. 99–514, §\u202f812(b)(2) , added subsec. (c).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 106–170  applicable to sales or other dispositions occurring on or after  Dec. 17, 1999 , see  section 536(c) of Pub. L. 106–170 , set out as a note under  section 453 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nAmendment by sections 7812(c)(2) and 7815(g) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 7821(a)(1)–(3), (4)(B) of  Pub. L. 101–239  effective as if included in the provision of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 7823 of Pub. L. 101–239 , set out as a note under  section 26 of this title .\nAmendment by  section 1008(g)(2) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 2004(d)(2), (7), (8) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–647, title V, §\u202f5076(c) ,  Nov. 10, 1988 ,  102 Stat. 3683 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to sales after  December 31, 1988 . \n \n “(2)   Binding contract, etc .— The amendments made by this section shall not apply to any sale on or before  December 31, 1990 , if— “(A)  such sale is pursuant to a written binding contract in effect on  October 21, 1988 , and at all times thereafter before such sale, \n \n “(B)  such sale is pursuant to a letter of intent in effect on  October 21, 1988 , or \n \n “(C)  there is a board of directors or shareholder approval for such sale on or before  October 21, 1988 .”\nAmendment by  Pub. L. 100–203  applicable to dispositions in taxable years beginning after  Dec. 31, 1987 , with special rules for non-dealers and coordination with Tax Reform Act of 1986, see section 10202(e)(1), (3), (5) of  Pub. L. 100–203 , set out as a note under  section 453 of this title .\nFor effective date, see  section 6(a)(4) of Pub. L. 96–471 , set out as a note under  section 453 of this title .\nPub. L. 100–647, title VI, §\u202f6031 ,  Nov. 10, 1988 ,  102 Stat. 3695 , provided that: \n “(a)   General Rule .— Section 453A(d) of the 1986 Code (relating to pledges, etc., of installment obligations) shall not apply to any pledge after  December 17, 1987 , of an installment obligation to secure any indebtedness if such indebtedness is incurred to refinance indebtedness which was outstanding on  December 17, 1987 , and which was secured on such date and all times thereafter before such refinancing by a pledge of such installment obligation. \n \n “(b)   Limitation .— Subsection (a) shall not apply to the extent that the principal amount of the indebtedness resulting from the refinancing exceeds the principal amount of the refinanced indebtedness immediately before the refinancing. \n \n “(c)   Certain Refinancings Permitted .— For purposes of subsection (a), if— “(1)  a refinancing is attributable to the calling of indebtedness by the creditor, and \n \n “(2)  such refinancing is not with the creditor under the refinanced indebtedness or a person related to such creditor, \n \n\n such refinancing shall, to the extent the refinanced indebtedness qualifies under subsections (a) and (b), be treated as a continuation of such refinanced indebtedness.”\nFor provisions requiring change in accounting method in the case of any taxpayer who made sales under revolving credit plan and was on installment method under this section for such taxpayer’s last taxable year beginning before  Jan. 1, 1987 , see  section 812(c)(2) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 453 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'The basis of an installment obligation shall be the excess of the face value of the obligation over an amount equal to the income which would be returnable were the obligation satisfied in full.\nExcept as provided in section 691 (relating to recipients of income in respect of decedents), this section shall not apply to the transmission of installment obligations at death.\nSubsection (a) shall not apply to any distribution to which section 337(a) applies.\nIn the case of a disposition of an installment obligation by any person other than a life insurance company (as defined in section 816(a)) to such an insurance company or to a partnership of which such an insurance company is a partner, no provision of this subtitle providing for the nonrecognition of gain shall apply with respect to any gain resulting under subsection (a). If a corporation which is a life insurance company for the taxable year was (for the preceding taxable year) a corporation which was not a life insurance company, such corporation shall, for purposes of this subsection and subsection (a), be treated as having transferred to a life insurance company, on the last day of the preceding taxable year, all installment obligations which it held on such last day. A partnership of which a life insurance company becomes a partner shall, for purposes of this subsection and subsection (a), be treated as having transferred to a life insurance company, on the last day of the preceding taxable year of such partnership, all installment obligations which it holds at the time such insurance company becomes a partner.\nFor purposes of this subsection, the term “noninsurance business” means any activity which is not an insurance business.\nProvisions similar to those comprising this section were contained in former  section 453 of this title .\n2018— Pub. L. 115–141  substituted “loss on disposition” for “loss disposition” in section catchline.\n2017—Subsec. (e)(2)(B).  Pub. L. 115–97, §\u202f13512(b)(1)(A) , struck out “(as defined in section 806(b)(3))” before period at end.\nSubsec. (e)(3).  Pub. L. 115–97, §\u202f13512(b)(1)(B) , added par. (3).\n1990—Subsec. (d).  Pub. L. 101–508  substituted heading for one which read: “Effect of distribution in liquidations to which section 332 applies” and amended text generally. Prior to amendment, text read as follows: “If—\n“(1) an installment obligation is distributed in a liquidation to which section 332 (relating to complete liquidations of subsidiaries) applies, and\n“(2) the basis of such obligation in the hands of the distributee is determined under section 334(b)(1),\nthen no gain or loss with respect to the distribution of such obligation shall be recognized by the distributing corporation.”\n1988—Subsec. (h).  Pub. L. 100–647  added subsec. (h).\n1986—Subsec. (d).  Pub. L. 99–514, §\u202f631(e)(9) , amended subsec. (d) generally, substituting “liquidations to which section 332 applies” for “certain liquidations” in heading, striking out par. (1) designation, redesignating subpars. (A) and (B) as pars. (1) and (2), and striking out former par. (2) relating to liquidations to which section 337 applies.\nSubsec. (e)(2)(B).  Pub. L. 99–514, §\u202f1011(b)(1) , substituted “section 806(b)(3)” for “section 806(c)(3)”.\nSubsec. (g).  Pub. L. 99–514, §\u202f1842(c) , inserted “(other than a transfer in trust)”.\n1984—Subsec. (d)(2).  Pub. L. 98–369, §\u202f492(b)(3) , struck out “1251(c),” after “1250(a),” in provision following subpar. (B).\nPub. L. 98–369, §\u202f43(c)(2) , substituted “1254(a), or 1276(a)” for “or 1254(a)”.\nSubsec. (e)(1).  Pub. L. 98–369, §\u202f211(b)(6)(A) , substituted “section 816(a)” for “section 801(a)”.\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f211(b)(6)(B) , substituted “as not related to insurance business” for “as investment income” in heading, and in text substituted “as if such income were an item attributable to a noninsurance business (as defined in section 806(c)(3))” for “if such income would not otherwise be returnable as an item referred to in section 804(b) or as long-term capital gain, as if the income on such obligations were income specified in section 804(b)”.\nSubsec. (g).  Pub. L. 98–369, §\u202f421(b)(3) , added subsec. (g).\n1983—Subsec. (d)(2).  Pub. L. 97–448  substituted “under subsection (a)” for “under paragraph (1)” in second sentence.\n1980—Subsec. (d).  Pub. L. 96–471, §\u202f2(c)(3) , inserted last sentence providing that in the case of any installment obligation which would have met the requirements of subpars. (A) and (B) of par. (2) but for sections 337(f), gain shall be recognized to such corporation by reason of such distribution only to the extent gain would have been recognized under sections 337(f) if such corporation had sold or exchanged such installment obligation on the date of such distribution.\nPub. L. 115–97, title I, §\u202f13512(c) ,  Dec. 22, 2017 ,  131 Stat. 2143 , provided that:  “The amendments made by this section [amending this section and sections 465, 801, 804, 805, 842, and 953 of this title and repealing  section 806 of this title ] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 631(e)(9) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nPub. L. 99–514, title X, §\u202f1011(c)(1) ,  Oct. 22, 1986 ,  100 Stat. 2389 , provided that:  “The amendments made by this section [amending this section and sections 465, 801, 804 to 806, 813, and 815 of this title, enacting provisions set out as a note under  section 801 of this title , and amending provisions set out as a note under  section 806 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1842(c) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 43(c)(2) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  section 211(b)(6) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 421(b)(3) of Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nAmendment by  section 492(b)(3) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 492(d) of Pub. L. 98–369 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 97–448  applicable to dispositions made after  Oct. 19, 1980 , in taxable years ending after such date, see  section 311(a) of Pub. L. 97–448 , set out as a note under  section 453 of this title .\nFor effective date of amendment by  Pub. L. 96–471 , see  section 6(a)(6) of Pub. L. 96–471 , set out as an Effective Date note under  section 453 of this title .\nFor effective date, see section 6(a)(1), (5) of  Pub. L. 96–471 , set out as a note under  section 453 of this title .\nPub. L. 106–573, §\u202f2 ,  Dec. 28, 2000 ,  114 Stat. 3061 , provided that: \n “(a)   In General .— Subsection (a) of section 536 of the Ticket to Work and Work Incentives Improvement Act of 1999 (relating to modification of installment method and repeal of installment method for accrual method taxpayers) [ Pub. L. 106–170 , amending this section] is repealed effective with respect to sales and other dispositions occurring on or after the date of the enactment of such Act [ Dec. 17, 1999 ]. \n \n “(b)   Applicability .— The Internal Revenue Code of 1986 shall be applied and administered as if that subsection (and the amendments made by that subsection) had not been enacted.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title II, §\u202f217(b) ,  July 18, 1984 ,  98 Stat. 762 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If an election is made under section 453B(e)(2) before  January 1, 1984 , with respect to any installment obligation, any income from such obligation shall be treated as attributable to a noninsurance business (as defined in [former] section 806(c)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Section, added  Pub. L. 99–514, title VIII, §\u202f811(a) ,  Oct. 22, 1986 ,  100 Stat. 2365 ; amended  Pub. L. 100–647, title I, §\u202f1008(f)(1) –(5),  Nov. 10, 1988 ,  102 Stat. 3441 , 3442, related to treatment of certain indebtedness as payment on installment obligations.\nRepeal applicable to dispositions in taxable years beginning after  Dec. 31, 1987 , with special rules for dealers and non-dealers, and coordination with Tax Reform Act of 1986, see section 10202(e)(1)–(3), (5) of  Pub. L. 100–203 , set out as a note under  section 453 of this title .\nPub. L. 100–647, title I, §\u202f1008(f)(9) ,  Nov. 10, 1988 ,  102 Stat. 3442 , provided that:  “For purposes of applying the amendments made by this subsection [amending this section and provisions set out below] and the amendments made by section 10202 of the Revenue Act of 1987 [ Pub. L. 100–203 , amending sections 56, 381, 453, 453A, and 691 of this title and repealing this section], the provisions of this subsection shall be treated as having been enacted immediately before the enactment of the Revenue Act of 1987 [ Dec. 22, 1987 ].”\nPub. L. 99–514, title VIII, §\u202f811(c) ,  Oct. 22, 1986 ,  100 Stat. 2368 , as amended by  Pub. L. 100–647, title I, §\u202f1008(f)(6) –(8),  Nov. 10, 1988 ,  102 Stat. 3442 ;  Pub. L. 105–34, title X, §\u202f1088(a) ,  Aug. 5, 1997 ,  111 Stat. 959 , provided that: \n “(1)   In general .— Except as otherwise provided in this section, the amendments made by this section [enacting this section] shall apply to taxable years ending after  December 31, 1986 , with respect to dispositions after  February 28, 1986 . \n \n “[(2)  Repealed.  Pub. L. 105–34, title X, §\u202f1088(a) ,  Aug. 5, 1997 ,  111 Stat. 959 .] \n \n “(3)   Exception for certain obligations .— In applying the amendments made by this section to any installment obligation of a corporation incorporated on  January 13, 1928 , the following indebtedness shall not be taken into account in determining the allocable installment indebtedness of such corporation under section 453C of the Internal Revenue Code of 1986 (as added by this section): “(A)  12⅝ percent subordinated debentures with a total face amount of $175,000,000 issued pursuant to a trust indenture dated as of  September 1, 1985 . \n \n “(B)  A revolving credit term loan in the maximum amount of $130,000,000 made pursuant to a revolving credit and security agreement dated as of  September 6, 1985 , payable in various stages with final payment due on  August 31, 1992 . \n \n\n This paragraph shall also apply to indebtedness which replaces indebtedness described in this paragraph if such indebtedness does not exceed the amount and maturity of the indebtedness it replaces. \n \n “(4)   Special rule for residential condominium project .— For purposes of applying the amendments made by this section, the term applicable installment obligation (within the meaning of section 453C(e)(1) of the Internal Revenue Code of 1986) shall not include any obligation arising in connection with sales from a residential condominium project— “(A)  for which a contract to purchase land for the project was entered into at least 5 years before the date of the enactment of this Act, \n \n “(B)  with respect to which land for the project was purchased before  September 26, 1985 , \n \n “(C)  with respect to which building permits for the project were obtained, and construction commenced, before  September 26, 1985 , \n \n “(D)  in conjunction with which not less than 80 units of low-income housing are deeded to a tax-exempt organization designated by a local government, and \n \n “(E)  with respect to which at least $1,000,000 of expenses were incurred before  September 26, 1985 . \n \n \n “(5)   Special rule for qualified buyout .— The amendments made by this section shall apply for taxable years ending after  December 31, 1991 , to a corporation if— “(A)  such corporation was incorporated on  May 25, 1984 , for the purpose of acquiring all of the stock of another corporation, \n \n “(B)  such acquisition took place on  October 23, 1984 , \n \n “(C)  in connection with such acquisition, the corporation incurred indebtedness of approximately $151,000,000, and \n \n “(D)  substantially all of the stock of the corporation is owned directly or indirectly by employees of the corporation the stock of which was acquired on  October 23, 1984 . \n \n \n “(6)   Special rule for sales of real property by dealers .— In the case of installment obligations arising from the sale of real property in the ordinary course of the trade or business of the taxpayer, any gain attributable to allocable installment indebtedness allocated to any such installment obligations which arise (or are deemed to arise)— “(A)  in the 1st taxable year of the taxpayer ending after  December 31, 1986 , shall be taken into account ratably over the 3 taxable years beginning with such 1st taxable year, and \n \n “(B)  in the 2nd taxable year of the taxpayer ending after  December 31, 1986 , shall be taken into account ratably over the 2 taxable years beginning with such 2nd taxable year. \n \n \n “(7)   Special rule for sales of personal property by dealers .— In the case of installment obligations arising from the sale of personal property in the ordinary course of the trade or business of the taxpayer, solely for purposes of determining the time for payment of tax and interest payable with respect to such tax— “(A)  any increase in tax imposed by chapter 1 of the Internal Revenue Code of 1986 for the 1st taxable year of the taxpayer ending after  December 31, 1986 , by reason of the amendments made by this section shall be treated as imposed ratably over the 3 taxable years beginning with such 1st taxable year, and \n \n “(B)  any increase in tax imposed by such chapter 1 for the 2nd taxable year of the taxpayer ending after  December 31, 1986  (determined without regard to subparagraph (A)), by reason of the amendments made by this section shall be treated as imposed ratably over the 2 taxable years beginning with such 2nd taxable year. \n \n \n “(8)   Treatment of certain installment obligations .— Notwithstanding the amendments made by subtitle B of title III [ section 311 of Pub. L. 99–514 , amending sections 593, 631, 852, 1201, and 1445 of this title and enacting provisions set out as notes under sections 631 and 1201 of this title], gain with respect to installment payments received pursuant to notes issued in accordance with a note agreement dated as of  August 29, 1980 , where— “(A)  such note agreement was executed pursuant to an agreement of purchase and sale dated  April 25, 1980 , \n \n “(B)  more than ½ of the installment payments of the aggregate principal of such notes have been received by  August 29, 1986 , and \n \n “(C)  the last installment payment of the principal of such notes is due  August 29, 1989 , \n \n\n shall be taxed at a rate of 28 percent. \n \n “(9)   Special rules .— For purposes of section 453C of the 1986 Code (as added by subsection (a))— “(A)   Revolving credit plans, etc .— The term ‘applicable installment obligation’ shall not include any obligation arising out of any disposition or sale described in paragraph (1) or (2) of section 453(k) of such Code (as added by section 812(a)). \n \n “(B)   Certain dispositions deemed made on first day of taxable year .— In the case of a taxpayer’s 1st taxable year ending after  December 31, 1986 , dispositions after  February 28, 1986 , and before the 1st day of such taxable year shall be treated as made on such 1st day.”\n[ Pub. L. 105–34, title X, §\u202f1088(b) ,  Aug. 5, 1997 ,  111 Stat. 959 , as amended by  Pub. L. 105–206, title VI, §\u202f6010(q) ,  July 22, 1998 ,  112 Stat. 817 , provided that:\n[“(1)  In general .—The amendment made by this section [amending  section 811(c) of Pub. L. 99–514 , set out above] shall apply to taxable years beginning more than 1 year after the date of the enactment of this Act [ Aug. 5, 1997 ].\n[“(2)  Coordination with section 481 .—In the case of any taxpayer required by this section to change its method of accounting for any taxable year—\n[“(A) such changes shall be treated as initiated by the taxpayer,\n[“(B) such changes shall be treated as made with the consent of the Secretary of the Treasury, and\n[“(C) the net amount of the adjustments required to be taken into account under section 481(a) of the Internal Revenue Code of 1986 shall be taken into account ratably over the 4 taxable year period beginning with the first taxable year beginning more than 1 year after the date of the enactment of this Act.”]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'If, in the case of a taxpayer owning any non-interest-bearing obligation issued at a discount and redeemable for fixed amounts increasing at stated intervals or owning an obligation described in paragraph (2) of subsection (c), the increase in the redemption price of such obligation occurring in the taxable year does not (under the method of accounting used in computing his taxable income) constitute income to him in such year, such taxpayer may, at his election made in his return for any taxable year, treat such increase as income received in such taxable year. If any such election is made with respect to any such obligation, it shall apply also to all such obligations owned by the taxpayer at the beginning of the first taxable year to which it applies and to all such obligations thereafter acquired by him and shall be binding for all subsequent taxable years, unless on application by the taxpayer the Secretary permits him, subject to such conditions as the Secretary deems necessary, to change to a different method. In the case of any such obligations owned by the taxpayer at the beginning of the first taxable year to which his election applies, the increase in the redemption price of such obligations occurring between the date of acquisition (or, in the case of an obligation described in paragraph (2) of subsection (c), the date of acquisition of the series E bond involved) and the first day of such taxable year shall also be treated as income received in such taxable year.\n1983—Subsec. (c)(2).  Pub. L. 97–452  substituted “chapter 31 of title 31” for “the Second Liberty Bond Act”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” in two places.\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1901(c)(2) , struck out “,\u2000a Territory,” after “a State”.\n1959—Subsec. (c)(2).  Pub. L. 86–346  designated existing provisions as cl. (A), inserted “of the United States” after “an obligation” and struck out “the maturity value of” before “such series E bond” and “which matures not more than 10 years from the date of maturity of such series E bond” after “income obligation” in such cl. (A), and added cl. (B).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Prepaid subscription income to which this section applies shall be included in gross income for the taxable years during which the liability described in subsection (d)(2) exists.\nThis section shall apply to prepaid subscription income if and only if the taxpayer makes an election under this section with respect to the trade or business in connection with which such income is received. The election shall be made in such manner as the Secretary may by regulations prescribe. No election may be made with respect to a trade or business if in computing taxable income the cash receipts and disbursements method of accounting is used with respect to such trade or business.\nAn election made under this section shall apply to all prepaid subscription income received in connection with the trade or business with respect to which the taxpayer has made the election; except that the taxpayer may, to the extent permitted under regulations prescribed by the Secretary, include in gross income for the taxable year of receipt the entire amount of any prepaid subscription income if the liability from which it arose is to end within 12 months after the date of receipt. An election made under this section shall not apply to any prepaid subscription income received before the first taxable year for which the election is made.\nA taxpayer may, with the consent of the Secretary, make an election under this section at any time.\nA taxpayer may, without the consent of the Secretary, make an election under this section for his first taxable year in which he receives prepaid subscription income in the trade or business. Such election shall be made not later than the time prescribed by law for filing the return for the taxable year (including extensions thereof) with respect to which such election is made.\nAn election under this section shall be effective for the taxable year with respect to which it is first made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election. For purposes of this title, the computation of taxable income under an election made under this section shall be treated as a method of accounting.\nThe term “prepaid subscription income” means any amount (includible in gross income) which is received in connection with, and is directly attributable to, a liability which extends beyond the close of the taxable year in which such amount is received, and which is income from a subscription to a newspaper, magazine, or other periodical.\nThe term “liability” means a liability to furnish or deliver a newspaper, magazine, or other periodical.\nPrepaid subscription income shall be treated as received during the taxable year for which it is includible in gross income under section 451 (without regard to this section).\nNotwithstanding the provisions of this section, any taxpayer who has, for taxable years prior to the first taxable year to which this section applies, reported his income under an established and consistent method or practice of accounting for prepaid subscription income (to which this section would apply if an election were made) may continue to report his income for taxable years to which this title applies in accordance with such method or practice.\n1976—Subsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (c)(3)(B).  Pub. L. 94–455, §\u202f1901(a)(67) , substituted “for his first taxable year in which he receives prepaid subscription income in the trade or business” for “for his first taxable year (i) which begins after  December 31, 1957 , and (ii) in which he receives prepaid subscription income in the trade or business”.\nAmendment by  section 1901(a)(67) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 85–866, title I, §\u202f28(c) ,  Sept. 2, 1958 ,  72 Stat. 1626 , provided that:  “The amendments made by subsections (a) and (b) [enacting this section] shall apply with respect to taxable years beginning after  December 31, 1957 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Prepaid dues income to which this section applies shall be included in gross income for the taxable years during which the liability described in subsection (e)(2) exists.\nThis section shall apply to prepaid dues income if and only if the taxpayer makes an election under this section with respect to the trade or business in connection with which such income is received. The election shall be made in such manner as the Secretary may by regulations prescribe. No election may be made with respect to a trade or business if in computing taxable income the cash receipts and disbursements method of accounting is used with respect to such trade or business.\nAn election made under this section shall apply to all prepaid dues income received in connection with the trade or business with respect to which the taxpayer has made the election; except that the taxpayer may, to the extent permitted under regulations prescribed by the Secretary, include in gross income for the taxable year of receipt the entire amount of any prepaid dues income if the liability from which it arose is to end within 12 months after the date of receipt. Except as provided in subsection (d), and election made under this section shall not apply to any prepaid dues income received before the first taxable year for which the election is made.\nA taxpayer may, with the consent of the Secretary, make an election under this section at any time.\nA taxpayer may, without the consent of the Secretary, make an election under this section for its first taxable year in which it receives prepaid dues income in the trade or business. Such election shall be made not later than the time prescribed by law for filing the return for the taxable year (including extensions thereof) with respect to which such election is made.\nAn election under this section shall be effective for the taxable year with respect to which it is first made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election. For purposes of this title, the computation of taxable income under an election made under this section shall be treated as a method of accounting.\nIf a taxpayer makes an election under this section with respect to prepaid dues income, such taxpayer shall include in gross income, for each taxable year to which such election applies, not only that portion of prepaid dues income received in such year otherwise includible in gross income for such year under this section, but shall also include in gross income for such year an additional amount equal to the amount of prepaid dues income received in the 3 taxable years preceding the first taxable year to which such election applies which would have been included in gross income in the taxable year had the election been effective 3 years earlier.\nA taxpayer who makes an election with respect to prepaid dues income, and who includes in gross income for any taxable year to which the election applies an additional amount computed under paragraph (1), shall be permitted to deduct, for such taxable year and for each of the 4 succeeding taxable years, an amount equal to one-fifth of such additional amount, but only to the extent that such additional amount was also included in the taxpayer’s gross income during any of the 3 taxable years preceding the first taxable year to which such election applies.\nThe term “prepaid dues income” means any amount (includible in gross income) which is received by a membership organization in connection with, and is directly attributable to, a liability to render services or make available membership privileges over a period of time which extends beyond the close of the taxable year in which such amount is received.\nThe term “liability” means a liability to render services or make available membership privileges over a period of time which does not exceed 36 months, which liability shall be deemed to exist ratably over the period of time that such services are required to be rendered, or that such membership privileges are required to be made available.\nPrepaid dues income shall be treated as received during the taxable year for which it is includible in gross income under section 451 (without regard to this section).\n1976—Subsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (c)(3)(B).  Pub. L. 94–455, §\u202f1901(a)(68) , substituted “for its first taxable year” for “for its first taxable year (i) which begins after  December 31, 1960 , and (ii)”.\nAmendment by  section 1901(a)(68) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 87–109, §\u202f2 ,  July 26, 1961 ,  75 Stat. 224 , provided that:  “The amendments made by this Act [enacting this section] shall apply with respect to taxable years beginning after  December 31, 1960 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'To the extent provided in section 72(t)(9), section 72(t) shall apply to any amount includible in gross income under this subsection.\nIn the case of a plan of an eligible employer described in subsection (e)(1)(A), to the extent provided in section 402( l ), paragraph (1) shall not apply to amounts otherwise includible in gross income under this subsection.\nThe maximum amount of the compensation of any one individual which may be deferred under subsection (a) during any taxable year shall not exceed the amount in effect under subsection (b)(2)(A) (as modified by any adjustment provided under subsection (b)(3)).\nA plan meets the minimum distribution requirements of this paragraph if such plan meets the requirements of section 401(a)(9).\nAn eligible deferred compensation plan of an employer described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely by reason of making a distribution described in subsection (e)(9)(A).\nThe performance of service includes performance of service as an independent contractor and the person (or governmental unit) for whom such services are performed shall be treated as the employer.\nThe term “participant” means an individual who is eligible to defer compensation under the plan.\nThe term “beneficiary” means a beneficiary of the participant, his estate, or any other person whose interest in the plan is derived from the participant.\nThe term “includible compensation” has the meaning given to the term “participant’s compensation” by section 415(c)(3).\nCompensation shall be taken into account at its present value.\nThe amount of includible compensation shall be determined without regard to any community property laws.\nGains from the disposition of property shall be treated as income attributable to such property.\nA participant shall not be required to include in gross income any portion of the entire amount payable to such participant solely by reason of the transfer of such portion from 1 eligible deferred compensation plan to another eligible deferred compensation plan.\nA plan shall not be treated as described in subparagraph (A)(ii) if the aggregate amount of length of service awards accruing with respect to any year of service for any bona fide volunteer exceeds $6,000.\nIn the case of taxable years beginning after  December 31, 2017 , the Secretary shall adjust the $6,000 amount under clause (ii) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning  July 1, 2016 , and any increase under this paragraph that is not a multiple of $500 shall be rounded to the next lowest multiple of $500.\nIn the case of a plan described in subparagraph (A)(ii) which is a defined benefit plan (as defined in section 414(j)), the limitation under clause (ii) shall apply to the actuarial present value of the aggregate amount of length of service awards accruing with respect to any year of service. Such actuarial present value with respect to any year shall be calculated using reasonable actuarial assumptions and methods, assuming payment will be made under the most valuable form of payment under the plan with payment commencing at the later of the earliest age at which unreduced benefits are payable under the plan or the participant’s age at the time of the calculation.\nFor purposes of this paragraph, the term “qualified services” means fire fighting and prevention services, emergency medical services, and ambulance services.\nThis section shall not apply to nonelective deferred compensation attributable to services not performed as an employee.\nFor purposes of subparagraph (A), deferred compensation shall be treated as nonelective only if all individuals (other than those who have not satisfied any applicable initial service requirement) with the same relationship to the payor are covered under the same plan with no individual variations or options under the plan.\nThe term “eligible employer” shall not include a church (as defined in section 3121(w)(3)(A)) or qualified church-controlled organization (as defined in section 3121(w)(3)(B)).\nSubsections (b)(2) and (c)(1) shall not apply to any qualified governmental excess benefit arrangement (as defined in section 415(m)(3)), and benefits provided under such an arrangement shall not be taken into account in determining whether any other plan is an eligible deferred compensation plan.\nThe applicable dollar amount is $15,000.\nIn the case of taxable years beginning after  December 31, 2006 , the Secretary shall adjust the $15,000 amount under subparagraph (A) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning  July 1, 2005 , and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.\nThe rules of paragraphs (2) through (7), (9), and (11) of section 402(c) and section 402(f) shall apply for purposes of subparagraph (A).\nRollovers under this paragraph shall be reported to the Secretary in the same manner as rollovers from qualified retirement plans (as defined in section 4974(c)).\nThe term “plan” includes any agreement or arrangement.\nThe rights of a person to compensation are subject to a substantial risk of forfeiture if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual.\nThe portion of an applicable employment retention plan described in this paragraph with respect to any participant is that portion of the plan which provides benefits payable to the participant not in excess of twice the applicable dollar limit determined under subsection (e)(15).\nParagraph (2)(F) shall only apply to the portion of the plan described in subparagraph (A) for years preceding the year in which such portion is paid or otherwise made available to the participant.\nA plan shall not be treated for purposes of this title as providing for the deferral of compensation for any year with respect to the portion of the plan described in subparagraph (A).\nA plan maintained by an eligible employer described in subsection (e)(1)(A) shall not be treated as an eligible deferred compensation plan unless all assets and income of the plan described in subsection (b)(6) are held in trust for the exclusive benefit of participants and their beneficiaries.\nFor purposes of this subsection, custodial accounts and contracts described in section 401(f) shall be treated as trusts under rules similar to the rules under section 401(f).\nA plan described in paragraph (1) shall not be treated as an eligible deferred compensation plan unless such plan meets the requirements of section 401(a)(37).\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\nPub. L. 117–328, div. T, title III, §\u202f334(b)(5) , (e),  Dec. 29, 2022 ,  136 Stat. 5370 , 5372, provided that, applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , subsection (d)(1)(A) of this section is amended by striking “or” at the end of clause (iii), by striking the comma at the end of clause (iv) and inserting “,\u2000or”, and by adding at the end the following new clause:\n“(v) as provided in section 401(a)(39),”.\nSee 2022 Amendment note below.\nSection 8101 of the Elementary and Secondary Education Act of 1965, referred to in subsec. (e)(11)(D)(ii)(I), is classified to  section 7801 of Title 20 , Education.\n2022—Subsec. (b).  Pub. L. 117–328, §\u202f110(f) , inserted at end of concluding provisions “A plan which is established and maintained by an employer which is described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely because the plan, or another plan maintained by the employer which meets the requirements of section 401(a) or 403(b), provides for matching contributions on account of qualified student loan payments as described in section 401(m)(13).”\nSubsec. (b)(4).  Pub. L. 117–328, §\u202f306(a) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “which provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month,”.\nSubsec. (d)(1)(A)(v).  Pub. L. 117–328, §\u202f334(b)(5) , added cl. (v).\nSubsec. (d)(4).  Pub. L. 117–328, §\u202f312(c) , added par. (4).\nSubsec. (e)(18)(A)(ii).  Pub. L. 117–328, §\u202f603(b)(2) , inserted “the lesser of any designated Roth contributions made by the participant to the plan or” before “the applicable dollar amount”.\n2019—Subsec. (d)(1)(A)(i).  Pub. L. 116–94, §\u202f104(b) , inserted “(in the case of a plan maintained by an employer described in subsection (e)(1)(A), age 59½)” before comma at end.\nSubsec. (d)(1)(A)(iv).  Pub. L. 116–94, §\u202f109(d)(1) , added cl. (iv).\nSubsec. (d)(1)(D).  Pub. L. 116–94, §\u202f109(d)(2) , added subpar. (D).\n2018—Subsec. (f)(4)(C)(i).  Pub. L. 115–141  substituted “section 8101” for “section 9101” and “( 20 U.S.C. 7801 )),” for “( 20 U.S.C. 7801 ),”.\n2017—Subsec. (e)(11)(B)(ii).  Pub. L. 115–97, §\u202f13612(a) , substituted “$6,000” for “$3,000”.\nSubsec. (e)(11)(B)(iii).  Pub. L. 115–97, §\u202f13612(b) , added cl. (iii).\nSubsec. (e)(11)(B)(iv).  Pub. L. 115–97, §\u202f13612(c) , added cl. (iv).\n2015—Subsec. (e)(11)(D)(ii)(I).  Pub. L. 114–95  substituted “section 8101 of the Elementary and Secondary Education Act of 1965” for “section 9101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 )”.\n2014—Subsec. (e)(15)(A).  Pub. L. 113–295  substituted “is $15,000.” for “shall be the amount determined in accordance with the following table:” and struck out table at end listing applicable dollar amounts for taxable years beginning in 2002.\n2008—Subsec. (g)(4).  Pub. L. 110–245  added par. (4).\n2006—Subsec. (a)(3).  Pub. L. 109–280, §\u202f845(b)(3) , added par. (3).\nSubsec. (e)(11)(D).  Pub. L. 109–280, §\u202f1104(a)(1) , added subpar. (D).\nSubsec. (e)(16)(B).  Pub. L. 109–280, §\u202f829(a)(4) , substituted “,\u2000(9), and (11)” for “and (9)”.\nSubsec. (f)(2)(F).  Pub. L. 109–280, §\u202f1104(b)(1) , added subpar. (F).\nSubsec. (f)(4).  Pub. L. 109–280, §\u202f1104(b)(2) , added par. (4).\n2002—Subsec. (e)(5).  Pub. L. 107–147, §\u202f411(p)(5) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘includible compensation’ means compensation for service performed for the employer which (taking into account the provisions of this section and other provisions of this chapter) is currently includible in gross income.”\nSubsec. (e)(18).  Pub. L. 107–147, §\u202f411 ( o )(9), added par. (18).\n2001—Subsec. (a).  Pub. L. 107–16, §\u202f649(b)(1) , reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, text read as follows: “In the case of a participant in an eligible deferred compensation plan, any amount of compensation deferred under the plan, and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income is paid or otherwise made available to the participant or other beneficiary.”\nSubsec. (b)(2).  Pub. L. 107–16, §\u202f641(a)(1)(B) , inserted “(other than rollover amounts)” after “taxable year” in introductory provisions.\nSubsec. (b)(2)(A).  Pub. L. 107–16, §\u202f611(e)(1)(A) , substituted “the applicable dollar amount” for “$7,500”.\nSubsec. (b)(2)(B).  Pub. L. 107–16, §\u202f632(c)(1) , substituted “100 percent” for “33⅓ percent”.\nSubsec. (b)(3)(A).  Pub. L. 107–16, §\u202f611(e)(1)(B) , substituted “twice the dollar amount in effect under subsection (b)(2)(A)” for “$15,000”.\nSubsec. (c).  Pub. L. 107–16, §\u202f615(a) , amended heading and text of subsec. (c) generally, substituting present provisions for provisions which stated that the maximum amount of compensation that an individual could defer under subsec. (a) during any taxable year could not exceed the applicable dollar amount, as modified by any adjustment provided under subsec. (b)(3), and provided for coordination with certain other deferrals.\nSubsec. (c)(1).  Pub. L. 107–16, §\u202f611(e)(1)(A) , substituted “the applicable dollar amount” for “$7,500”.\nSubsec. (c)(2).  Pub. L. 107–16, §\u202f611(d)(3)(B) , substituted “402(g)(7)(A)(iii)” for “402(g)(8)(A)(iii)” in concluding provisions.\nSubsec. (d)(1).  Pub. L. 107–16, §\u202f641(a)(1)(C) , added subpar. (C) and concluding provisions.\nSubsec. (d)(1)(A)(ii).  Pub. L. 107–16, §\u202f646(a)(3) , substituted “has a severance from employment” for “is separated from service”.\nSubsec. (d)(2).  Pub. L. 107–16, §\u202f649(a) , reenacted heading without change and amended text of par. (2) generally, substituting present provisions for provisions which stated that a plan would meet the minimum distribution requirements of this par. if plan met the requirements of section 401(a)(9), if plan met additional distribution requirements in the case of a deceased participant, and if any distribution payable over a period of more than 1 year would only be made in substantially nonincreasing amounts.\nSubsec. (d)(3).  Pub. L. 107–16, §\u202f649(b)(2)(B) , added par. (3).\nSubsec. (e)(9).  Pub. L. 107–16, §\u202f649(b)(2)(A) , in heading substituted “Benefits of tax exempt organization plans not treated as made available by reason of certain elections, etc.” for “Benefits not treated as made available by reason of certain elections, etc.” and inserted introductory provisions.\nSubsec. (e)(9)(A)(i).  Pub. L. 107–16, §\u202f648(b) , substituted “the portion of such amount which is not attributable to rollover contributions (as defined in section 411(a)(11)(D))” for “such amount”.\nSubsec. (e)(15).  Pub. L. 107–16, §\u202f611(e)(2) , amended heading and text of par. (15) generally. Prior to amendment, text read as follows: “The Secretary shall adjust the $7,500 amount specified in subsections (b)(2) and (c)(1) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter ending  September 30, 1994 , and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.”\nSubsec. (e)(16).  Pub. L. 107–16, §\u202f641(a)(1)(A) , added par. (16).\nSubsec. (e)(17).  Pub. L. 107–16, §\u202f647(b) , added par. (17).\n1997—Subsec. (e)(9)(A).  Pub. L. 105–34  substituted “dollar limit” for “$3,500” in heading and “the dollar limit under section 411(a)(11)(A)” for “$3,500” in cl. (i).\n1996—Subsec. (b)(6).  Pub. L. 104–188, §\u202f1448(b) , inserted “except as provided in subsection (g),” before “which provides that” in introductory provisions.\nSubsec. (c)(2)(B)(i).  Pub. L. 104–188, §\u202f1421(b)(3)(C) , substituted “section 402(h)(1)(B) or (k)” for “section 402(h)(1)(B)”.\nSubsec. (e)(9).  Pub. L. 104–188, §\u202f1447(a) , amended par. (9) generally. Prior to amendment, par. (9) read as follows: “ Benefits not treated as made available by reason of certain elections .—If—\n“(A) the total amount payable to a participant under the plan does not exceed $3,500, and\n“(B) no additional amounts may be deferred under the plan with respect to the participant,\nthe amount payable to the participant under the plan shall not be treated as made available merely because such participant may elect to receive a lump sum payable after separation from service and within 60 days of the election.”\nSubsec. (e)(11).  Pub. L. 104–188, §\u202f1458(a) , amended par. (11) generally. Prior to amendment, par. (11) read as follows: “ Certain plans excepted .—Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as a plan not providing for the deferral of compensation.”\nSubsec. (e)(14).  Pub. L. 104–188, §\u202f1444(b)(2) , added par. (14).\nSubsec. (e)(15).  Pub. L. 104–188, §\u202f1447(b) , added par. (15).\nSubsec. (f)(2)(E).  Pub. L. 104–188, §\u202f1444(b)(3) , added subpar. (E).\nSubsec. (g).  Pub. L. 104–188, §\u202f1448(a) , added subsec. (g).\n1992—Subsec. (c)(2)(B)(i).  Pub. L. 102–318  substituted “402(e)(3)” for “402(a)(8)”.\n1989—Subsec. (d)(1)(A)(iii).  Pub. L. 101–239, §\u202f7811(g)(4) , substituted “,\u2000and” for period at end.\nSubsec. (d)(2)(B)(i)(I).  Pub. L. 101–239, §\u202f7811(g)(5) , inserted “and” at end.\nSubsec. (e)(13).  Pub. L. 101–239, §\u202f7816(j) , substituted “Special rule for churches” for “Exception for church plans” in heading and amended text generally. Prior to amendment, text read as follows: “The term ‘eligible deferred compensation plan’ shall not include a plan maintained by a church for church employees. For purposes of this paragraph, the term ‘church’ has the meaning given such term by section 3121(w)(3)(A), including a qualified church-controlled organization (as defined in section 3121(w)(3)(B)).”\n1988—Subsec. (c)(2).  Pub. L. 100–647, §\u202f1011(e)(1) , struck out “and paragraphs (2) and (3) of subsection (b)” after “of this subsection”.\nPub. L. 100–647, §\u202f6071(c) , substituted “rural cooperative plan” for “rural electric cooperative plan” in last sentence.\nSubsec. (d)(1)(A).  Pub. L. 100–647, §\u202f1011(e)(2) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the plan provides that amounts payable under the plan will be made available to participants or other beneficiaries not earlier than when the participant is separated from service with the employer or is faced with an unforeseeable emergency (determined in the manner prescribed by the Secretary by regulation), and”.\nSubsec. (d)(2)(B)(i)(I).  Pub. L. 100–647, §\u202f1011(e)(10) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “at least ⅔ of the total amount payable with respect to the participant will be paid during the life expectancy of such participant (determined as of the commencement of the distribution), and”.\nSubsec. (d)(10).  Pub. L. 100–647, §\u202f6064(a)(2) , amended subsec. (d), as in effect on the day before the date of enactment of  Pub. L. 99–514  ( Oct. 22, 1986 ), by adding par. (10) reading as follows:  “Certain plans excepted .—Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as a plan not providing for the deferral of compensation.”\nSubsec. (d)(11).  Pub. L. 100–647, §\u202f6064(b)(2) , amended subsec. (d), as in effect on the day before the date of enactment of  Pub. L. 99–514  ( Oct. 22, 1986 ), by adding par. (11) reading as follows:  “Exception for nonelective deferred compensation of nonemployees.—\n“(A)  In general .—This section shall not apply to nonelective deferred compensation attributable to services not performed as an employee.\n“(B)  Nonelective deferred compensation .—For purposes of subparagraph (a), deferred compensation shall be treated as nonelective only if all individuals (other than those who have not satisfied any applicable initial service requirement) with the same relationship to the payor are covered under the same plan with no individual variations or options under the plan.”\nSubsec. (e)(9).  Pub. L. 100–647, §\u202f1011(e)(9) , inserted “after separation from service and” after “lump sum payable” in concluding provisions.\nSubsec. (e)(11).  Pub. L. 100–647, §\u202f6064(a)(1) , added par. (11).\nSubsec. (e)(12).  Pub. L. 100–647, §\u202f6064(b)(1) , added par. (12).\nSubsec. (e)(13).  Pub. L. 100–647, §\u202f6064(c) , added par. (13).\n1986— Pub. L. 99–514  amended section generally, substituting “Deferred compensation plans of State and local governments and tax-exempt organizations” for “Deferred compensation plans with respect to service for State and local governments” as section catchline and revising and restating as subsecs. (a) to (c), (e), and (f) provisions formerly contained in subsecs. (a) to (e) and adding provisions comprising subsec. (d).\n1984—Subsec. (e)(2).  Pub. L. 98–369, §\u202f491(d)(33) , struck out subpar. (C) which provided that par. (1) of this subsection not apply to a qualified bond purchase plan described in section 405(a), and redesignated subpars. (D) and (E) as (C) and (D), respectively.\n1980—Subsec. (d)(9)(B).  Pub. L. 96–222  in cl. (i) struck out “described in section 501(c)(12)” after “any organization” and substituted “electric service on a mutual or cooperative basis” for “electric service” and in cl. (ii) substituted “paragraph (4) or (6) of section 501(a)” for “section 501(c)(6)” and “at least 80 percent of the members” for “all the members”.\nAmendment by  section 110(f) of Pub. L. 117–328  applicable to contributions made for plan years beginning after  Dec. 31, 2023 , see  section 110(h) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nPub. L. 117–328, div. T, title III, §\u202f306(b) ,  Dec. 29, 2022 ,  136 Stat. 5343 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 29, 2022 ].”\nAmendment by  section 312(c) of Pub. L. 117–328  applicable to plan years beginning after  Dec. 29, 2022 , see  section 312(d) of Pub. L. 117–328 , set out as a note under  section 401 of this title .\nAmendment by  section 334(b)(5) of Pub. L. 117–328  applicable to distributions made after the date which is 3 years after  Dec. 29, 2022 , see  section 334(e) of Pub. L. 117–328 , set out as a note under  section 72 of this title .\nAmendment by  section 603(b)(2) of Pub. L. 117–328  applicable to taxable years beginning after  Dec. 31, 2023 , see  section 603(c) of Pub. L. 117–328 , set out as a note under  section 402 of this title .\nAmendment by  section 104(b) of Pub. L. 116–94  applicable to plan years beginning after  Dec. 31, 2019 , see  section 104(c) of Pub. L. 116–94 , set out as a note under  section 401 of this title .\nAmendment by  section 109(d) of Pub. L. 116–94  applicable to plan years beginning after  Dec. 31, 2019 , see  section 109(e) of Pub. L. 116–94 , set out as a note under  section 401 of this title .\nPub. L. 115–97, title I, §\u202f13612(d) ,  Dec. 22, 2017 ,  131 Stat. 2166 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 114–95  effective  Dec. 10, 2015 , except with respect to certain noncompetitive programs and competitive programs, see  section 5 of Pub. L. 114–95 , set out as a note under  section 6301 of Title 20 , Education.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 110–245  applicable with respect to deaths and disabilities occurring on or after  Jan. 1, 2007 , see  section 104(d)(1) of Pub. L. 110–245 , set out as a note under  section 401 of this title .\nAmendment by  section 829(a)(4) of Pub. L. 109–280  applicable to distributions after  Dec. 31, 2006 , see  section 829(b) of Pub. L. 109–280 , set out as a note under  section 402 of this title .\nAmendment by  section 845(b)(3) of Pub. L. 109–280  applicable to distributions in taxable years beginning after  Dec. 31, 2006 , see  section 845(c) of Pub. L. 109–280 , set out as a note under  section 402 of this title .\nPub. L. 109–280, title XI, §\u202f1104(d) ,  Aug. 17, 2006 ,  120 Stat. 1060 , as amended by  Pub. L. 110–458, title I, §\u202f111(a) ,  Dec. 23, 2008 ,  122 Stat. 5113 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 623 and 1002 of Title 29, Labor] shall take effect on the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(2)   Tax amendments .— The amendments made by subsections (a)(1) and (b) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(3)  ERISA  amendments .— The amendment made by subsection (c) [amending  section 1002 of Title 29 , Labor] shall apply to plan years ending after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(4)   Construction .— Nothing in the amendments made by this section [amending this section and sections 623 and 1002 of Title 29, Labor] shall alter or affect the construction of the Internal Revenue Code of 1986, the Employee Retirement Income Security Act of 1974 [ 29 U.S.C. 1001  et seq.], or the Age Discrimination in Employment Act of 1967 [ 29 U.S.C. 621  et seq.] as applied to any plan, arrangement, or conduct to which such amendments do not apply.”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by section 611(d)(3)(B), (e) of  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nPub. L. 107–16, title VI, §\u202f615(b) ,  June 7, 2001 ,  115 Stat. 102 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to years beginning after  December 31, 2001 .”\nPub. L. 107–16, title VI, §\u202f632(c)(2) ,  June 7, 2001 ,  115 Stat. 115 , provided that:  “The amendment made by this subsection [amending this section] shall apply to years beginning after  December 31, 2001 .”\nAmendment by section 641(a)(1)(A)–(C) of  Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 641(f)(1) of Pub. L. 107–16 , set out as a note under  section 402 of this title .\nAmendment by  section 646(a)(3) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 646(b) of Pub. L. 107–16 , set out as a note under  section 401 of this title .\nAmendment by  section 647(b) of Pub. L. 107–16  applicable to trustee-to-trustee transfers after  Dec. 31, 2001 , see  section 647(c) of Pub. L. 107–16 , set out as a note under  section 403 of this title .\nAmendment by  section 648(b) of Pub. L. 107–16  applicable to distributions after  Dec. 31, 2001 , see  section 648(c) of Pub. L. 107–16 , set out as a note under  section 411 of this title .\nPub. L. 107–16, title VI, §\u202f649(c) ,  June 7, 2001 ,  115 Stat. 128 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to distributions after  December 31, 2001 .”\nAmendment by  Pub. L. 105–34  applicable to plan years beginning after  Aug. 5, 1997 , see  section 1071(c) of Pub. L. 105–34 , set out as a note under  section 411 of this title .\nAmendment by  section 1421(b)(3)(C) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nAmendment by section 1444(b)(2), (3) of  Pub. L. 104–188  applicable to years beginning after  Dec. 31, 1994 , see  section 1444(e) of Pub. L. 104–188 , set out as a note under  section 415 of this title .\nPub. L. 104–188, title I, §\u202f1447(c) ,  Aug. 20, 1996 ,  110 Stat. 1812 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–188, title I, §\u202f1448(c) ,  Aug. 20, 1996 ,  110 Stat. 1813 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to assets and income described in section 457(b)(6) of the Internal Revenue Code of 1986 held by a plan on and after the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Transition rule .— In the case of a plan in existence on the date of the enactment of this Act, a trust need not be established by reason of the amendments made by this section before  January 1, 1999 .”\nPub. L. 104–188, title I, §\u202f1458(c)(1) ,  Aug. 20, 1996 ,  110 Stat. 1820 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to accruals of length of service awards after  December 31, 1996 .”\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1011(e)(9) ,  Nov. 10, 1988 ,  102 Stat. 3461 , provided that the amendment made by that section is effective for years beginning after  Dec. 31, 1988 .\nAmendment by section 1011(e)(1), (2), (10) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6064(d) ,  Nov. 10, 1988 ,  102 Stat. 3701 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1987 . \n \n “(2)   Exception for certain collectively bargained plans.— “(A)   In general .— Section 457 of the 1986 Code (as in effect before and after the amendments made by section 1107 of the Reform Act [ Pub. L. 99–514 ]) shall not apply to nonelective deferred compensation provided under a plan in existence on  December 31, 1987 , and maintained pursuant to a collective bargaining agreement. \n \n “(B)   Nonelective plan .— For purposes of this paragraph, a nonelective plan is a plan which covers a broad group of employees and under which the covered employees earn nonelective deferred compensation under a definite, fixed and uniform benefit formula. \n \n “(C)   Termination .— This paragraph shall cease to apply to a plan as of the effective date of the first material modification of the plan agreed to after  December 31, 1987 . \n \n \n “(3)   Treatment of certain nonelective deferred compensation .— Section 457 of the 1986 Code shall not apply to amounts deferred under a nonelective deferred compensation plan maintained by an eligible employer described in section 457(e)(1)(A) of the 1986 Code (as in effect after the Reform Act [ Pub. L. 99–514 ])— “(A)  if such amounts were deferred from periods before  July 14, 1988 , or \n \n “(B)  if— “(i)  such amounts are deferred from periods on or after such date pursuant to an agreement which— “(I)  was in writing on such date, and \n \n “(II)  on such date provides for a deferral for each taxable year covered by the agreement of a fixed amount or of an amount determined pursuant to a fixed formula, and \n \n \n “(ii)  the individual with respect to whom the deferral is made was covered under such agreement on such date. \n \n \n\n Subparagraph (B) shall not apply to any taxable year ending after the date on which any modification of the amount or formula described in subparagraph (B)(i)(II) agreed to in writing before  January 1, 1989 , is effective. The preceding sentence shall not apply to a modification agreed to in writing before  January 1, 1989 , which does not increase any benefit of a participant. Amounts described in the first sentence of this paragraph shall be taken into account for purposes of applying section 457 of the 1986 Code to other amounts deferred under any eligible deferred compensation plan. \n \n “(4)   Study .— The Secretary of the Treasury or his delegate shall conduct a study on the tax treatment of deferred compensation paid by State and local governments and tax-exempt organizations (including deferred compensation paid to independent contractors). Not later than  January 1, 1990 , the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the study conducted under this paragraph together with such recommendations as he may deem advisable.”\n[The due date for the report on the study referred to in  section 6064(d)(4) of Pub. L. 100–647 , set out above, extended to  Jan. 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 .]\nAmendment by  section 6071(c) of Pub. L. 100–647  applicable to taxable years beginning after  Nov. 10, 1988 , see  section 6071(d) of Pub. L. 100–647 , set out as a note under  section 401 of this title .\nPub. L. 99–514, title XI, §\u202f1107(c) ,  Oct. 22, 1986 ,  100 Stat. 2430 , as amended by  Pub. L. 100–647, title I, §\u202f1011(e)(6) , (7),  Nov. 10, 1988 ,  102 Stat. 3461 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1988 . \n \n “(2)   Transfers and cash-outs .— Paragraphs (9) and (10) of section 457(e) of the Internal Revenue Code of 1986 (as amended by this section) shall apply to taxable years beginning after  December 31, 1986 . \n \n “(3)   Application to tax-exempt organizations.— “(A)   In general .— Except as provided in subparagraph (B), the application of section 457 of the Internal Revenue Code of 1986 by reason of the amendments made by this section to deferred compensation plans established and maintained by organizations exempt from tax shall apply to taxable years beginning after  December 31, 1986 . \n \n “(B)   Existing deferrals and arrangements .— Section 457 of such Code shall not apply to amounts deferred under a plan described in subparagraph (A) which— “(i)  were deferred from taxable years beginning before  January 1, 1987 , or \n \n “(ii)  are deferred from taxable years beginning after  December 31, 1986 , pursuant to an agreement which— “(I)  was in writing on  August 16, 1986 , \n \n “(II)  on such date provides for a deferral for each taxable year covered by the agreement of a fixed amount or of an amount determined pursuant to a fixed formula. \n \n \n\n Clause (ii) shall not apply to any taxable year ending after the date on which any modification to the amount or formula described in subclause (II) is effective. Amounts described in the first sentence shall be taken into account for applying section 457 to other amounts deferred under any deferred compensation plan. This subparagraph shall only apply to individuals who were covered under the plan and agreement on  August 16, 1986 . \n \n \n “(4)   Deferred compensation plans for state judges .— The amendments made by this section shall not apply to any qualified State judicial plan (as defined in section 131(c)(3)(B) of the Revenue Act of 1978 [set out as a note below] as amended by section 252 of the Tax Equity and Fiscal Responsibility Act of 1982). \n \n “(5)   Special rule for certain deferred compensation plans .— The amendments made by this section shall not apply— “(A)  to employees on  August 16, 1986 , of a nonprofit corporation organized under the laws of the State of Alabama maintaining a deferred compensation plan with respect to which the Internal Revenue Service issued a ruling dated  March 17, 1976 , that the plan would not affect the tax-exempt status of the corporation, or \n \n “(B)  to to [sic] individuals eligible to participate on  August 16, 1986 , in a deferred compensation plan with respect to which a letter dated  November 6, 1975 , submitted the original plan to the Internal Revenue Service, an amendment was submitted on  November 19, 1975 , and the Internal Revenue Service responded with a letter dated  December 24, 1975 , \n \n\n but only with respect to deferrals under such plan.”\nAmendment by  Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title I, §\u202f131(c)(1) ,  Nov. 6, 1978 ,  92 Stat. 2782 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 109–280, title VIII, §\u202f825 ,  Aug. 17, 2006 ,  120 Stat. 999 , provided that:  “An individual shall not be precluded from participating in an eligible deferred compensation plan by reason of having received a distribution under section 457(e)(9) of the Internal Revenue Code of 1986, as in effect prior to the enactment of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 ,  Aug. 20, 1996 ].”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1100–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 95–600, title I, §\u202f131(c)(2) ,  Nov. 6, 1978 ,  92 Stat. 2782 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— In the case of any taxable year beginning after  December 31, 1978 , and before  January 1, 1982 — “(i)  any amount of compensation deferred under a plan of a State providing for a deferral of compensation (other than a plan described in section 457(e)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income is paid or otherwise made available to the participant or other beneficiary, but \n \n “(ii)  the maximum amount of the compensation of any one individual which may be excluded from gross income by reason of clause (i) and by reason of section 457(a) of such Code during any such taxable year shall not exceed the lesser of— “(I)  $7,500, or \n \n “(II)  33⅓ percent of the participant’s includible compensation. \n \n \n \n “(B)   Application of catch-up provisions in certain cases .— If, in the case of any participant for any taxable year, all of the plans are eligible State deferred compensation plans, then clause (ii) of subparagraph (A) of this paragraph shall be applied with the modification provided by paragraph (3) of section 457(b) of such Code. \n \n “(C)   Applications of certain coordination provisions .— In applying clause (ii) of subparagraph (A) of this paragraph and section 403(b)(2)(A)(ii) of such Code, rules similar to the rules of section 457(c)(2) of such Code shall apply. \n \n “(D)   Meaning of terms .— Except as otherwise provided in this paragraph, terms used in this paragraph shall have the same meaning as when used in section 457 of such Code.”\nPub. L. 95–600, title I, §\u202f131(c)(3) , as added by  Pub. L. 97–248, title II, §\u202f252 ,  Sept. 3, 1982 ,  96 Stat. 532 , and amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— The amendments made by this section [enacting this section and provisions set out as notes under this section] shall not apply to any qualified State judicial plan. \n \n “(B)   Qualified state judicial plan .— For purposes of subparagraph (A), the term ‘qualified State judicial plan’ means any retirement plan of a State for the exclusive benefit of judges or their beneficiaries if— “(i)  such plan has been continuously in existence since  December 31, 1978 , \n \n “(ii)  under such plan, all judges eligible to benefit under the plan— “(I)  are required to participate, and \n \n “(II)  are required to contribute the same fixed percentage of their basic or regular rate of compensation as judge, \n \n \n “(iii)  under such plan, no judge has an option as to contributions or benefits the exercise of which would affect the amount of includible compensation, \n \n “(iv)  the retirement payments of a judge under the plan are a percentage of the compensation of judges of that State holding similar positions, and \n \n “(v)  the plan during any year does not pay benefits with respect to any participant which exceed the limitations of section 415(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Any compensation which is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be includible in gross income when there is no substantial risk of forfeiture of the rights to such compensation.\nFor purposes of paragraph (1)(B)(i), the interest determined under this paragraph for any taxable year is the amount of interest at the underpayment rate under section 6621 plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture.\nThe rights of a person to compensation shall be treated as subject to a substantial risk of forfeiture only if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual.\nTo the extent provided in regulations prescribed by the Secretary, if compensation is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition.\nParagraph (3)(B) shall not apply to any compensation to which clause (i) applies.\nThe term “nonqualified deferred compensation plan” has the meaning given such term under section 409A(d), except that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.\nCompensation shall not be treated as deferred for purposes of this section if the service provider receives payment of such compensation not later than 12 months after the end of the taxable year of the service recipient during which the right to the payment of such compensation is no longer subject to a substantial risk of forfeiture.\nIn the case of a foreign corporation with income which is taxable under section 882, this section shall not apply to compensation which, had such compensation been paid in cash on the date that such compensation ceased to be subject to a substantial risk of forfeiture, would have been deductible by such foreign corporation against such income.\nRules similar to the rules of paragraphs (5) and (6) of section 409A(d) shall apply.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations disregarding a substantial risk of forfeiture in cases where necessary to carry out the purposes of this section.\n2018—Subsec. (d)(4).  Pub. L. 115–141  substituted “case of a foreign” for “case a foreign” and “been paid” for “had been paid”.\nPub. L. 110–343, div. C, title VIII, §\u202f801(d) ,  Oct. 3, 2008 ,  122 Stat. 3931 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending  section 26 of this title ] shall apply to amounts deferred which are attributable to services performed after  December 31, 2008 . \n \n “(2)   Application to existing deferrals .— In the case of any amount deferred to which the amendments made by this section do not apply solely by reason of the fact that the amount is attributable to services performed before  January 1, 2009 , to the extent such amount is not includible in gross income in a taxable year beginning before 2018, such amounts shall be includible in gross income in the later of— “(A)  the last taxable year beginning before 2018, or \n \n “(B)  the taxable year in which there is no substantial risk of forfeiture of the rights to such compensation (determined in the same manner as determined for purposes of section 457A of the Internal Revenue Code of 1986, as added by this section). \n \n \n “(3)   Accelerated payments .— No later than 120 days after the date of the enactment of this Act [ Oct. 3, 2008 ], the Secretary shall issue guidance providing a limited period of time during which a nonqualified deferred compensation arrangement attributable to services performed on or before  December 31, 2008 , may, without violating the requirements of section 409A(a) of the Internal Revenue Code of 1986, be amended to conform the date of distribution to the date the amounts are required to be included in income. \n \n “(4)   Certain back-to-back arrangements .— If the taxpayer is also a service recipient and maintains one or more nonqualified deferred compensation arrangements for its service providers under which any amount is attributable to services performed on or before  December 31, 2008 , the guidance issued under paragraph (4) shall permit such arrangements to be amended to conform the dates of distribution under such arrangement to the date amounts are required to be included in the income of such taxpayer under this subsection. \n \n “(5)   Accelerated payment not treated as material modification .— Any amendment to a nonqualified deferred compensation arrangement made pursuant to paragraph (4) or (5) shall not be treated as a material modification of the arrangement for purposes of section 409A of the Internal Revenue Code of 1986.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'A taxpayer who is on an accrual method of accounting may elect not to include in the gross income for the taxable year the income attributable to the qualified sale of any magazine, paperback, or record which is returned to the taxpayer before the close of the merchandise return period.\nThe term “magazine” includes any other periodical.\nThe term “paperback” means any book which has a flexible outer cover and the pages of which are affixed directly to such outer cover. Such term does not include a magazine.\nThe term “record” means a disc, tape, or similar object on which musical, spoken, or other sounds are recorded.\nIf a taxpayer makes qualified sales of more than one category of merchandise in connection with the same trade or business, this section shall be applied as if the qualified sales of each such category were made in connection with a separate trade or business. For purposes of the preceding sentence, magazines, paperbacks, and records shall each be treated as a separate category of merchandise.\nA repurchase by the taxpayer shall be treated as an adjustment of the sales price rather than as a resale.\nThis section shall apply to qualified sales of magazines, paperbacks, or records, as the case may be, if and only if the taxpayer makes an election under this section with respect to the trade or business in connection with which such sales are made. An election under this section may be made without the consent of the Secretary. The election shall be made in such manner as the Secretary may by regulations prescribe and shall be made for any taxable year not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).\nAn election made under this section shall apply to all qualified sales of magazines, paperbacks, or records, as the case may be, made in connection with the trade or business with respect to which the taxpayer has made the election.\nAn election under this section shall be effective for the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election.\nExcept to the extent inconsistent with the provisions of this section, for purposes of this subtitle, the computation of taxable income under an election made under this section shall be treated as a method of accounting.\nIn applying section 481(c) with respect to any election under this section which applies to magazines, the period for taking into account any decrease in taxable income resulting from the application of section 481(a)(2) shall be the taxable year for which the election is made and the 4 succeeding taxable years.\nIn the case of any election under this section which applies to paperbacks or records, in lieu of applying section 481, the taxpayer shall establish a suspense account for the trade or business for the taxable year for which the election is made.\nThe opening balance of the account described in paragraph (1) for the first taxable year to which the election applies shall be the largest dollar amount of returned merchandise which would have been taken into account under this section for any of the 3 immediately preceding taxable years if this section had applied to such preceding 3 taxable years. This paragraph and paragraph (3) shall be applied by taking into account only amounts attributable to the trade or business for which such account is established.\nIn the case of any reduction under paragraph (3)(A) in the account for the taxable year, an amount equal to such reduction shall be excluded from gross income for such taxable year.\nIn the case of any increase under paragraph (3)(B) in the account for the taxable year, an amount equal to such increase shall be included in gross income for such taxable year.\nThe application of this subsection with respect to a taxpayer which is a party to any transaction with respect to which there is nonrecognition of gain or loss to any party to the transaction by reason of subchapter C shall be determined under regulations prescribed by the Secretary.\n2018—Subsec. (b)(9).  Pub. L. 115–141, §\u202f401(a)(114) , substituted “Repurchase” for “Repurchased” in heading.\nSubsec. (c)(1).  Pub. L. 115–141, §\u202f401(a)(115) , substituted “regulations prescribe” for “regulations prescribed”.\nPub. L. 95–600, title III, §\u202f372(c) ,  Nov. 6, 1978 ,  92 Stat. 2862 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  September 30, 1979 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'In the case of any long-term contract, the taxable income from such contract shall be determined under the percentage of completion method (as modified by subsection (b)).\nIn the case of any long-term contract, the Secretary may prescribe a simplified procedure for allocation of costs to such contract in lieu of the method of allocation under subsection (c).\nThis paragraph shall not apply to any closely held pass-thru entity.\nThis paragraph shall not apply to any contract unless substantially all of the income from such contract is from sources in the United States.\nThe term “closely held pass-thru entity” means any pass-thru entity if, at any time during any taxable year for which there is income under the contract, 50 percent or more (by value) of the beneficial interests in such entity are held (directly or indirectly) by or for 5 or fewer persons. For purposes of the preceding sentence, rules similar to the constructive ownership rules of section 1563(e) shall apply.\nIn the case of any long-term contract with respect to which an election under this paragraph is in effect, the 10-percent method shall apply in determining the taxable income from such contract.\nThe 10-percent method is the percentage of completion method, modified so that any item which would otherwise be taken into account in computing taxable income with respect to a contract for any taxable year before the 10-percent year is taken into account in the 10-percent year.\nThe term “10-percent year” means the 1st taxable year as of the close of which at least 10 percent of the estimated total contract costs have been incurred.\nAn election under this paragraph shall apply to all long-term contracts of the taxpayer which are entered into during the taxable year in which the election is made or any subsequent taxable year.\nThis paragraph shall not apply to any taxpayer which uses a simplified procedure for allocation of costs under paragraph (3)(A).\nThe 10-percent method shall be taken into account for purposes of applying the look-back method of paragraph (2) to any taxpayer making an election under this paragraph.\nThe term “contract year” means any taxable year for which income is taken into account under the contract.\nThe look-back income (or loss) is the amount which would be the taxable income (or loss) under the contract if the allocation method set forth in paragraph (2)(A) were used in determining taxable income.\nThe amounts taken into account after the completion of the contract shall be determined without regard to any discounting under the 2nd sentence of paragraph (2).\nThis paragraph shall only apply if the taxpayer makes an election under this subparagraph. Unless revoked with the consent of the Secretary, such an election shall apply to all long-term contracts completed during the taxable year for which election is made or during any subsequent taxable year.\nThe adjusted overpayment rate for any interest accrual period is the overpayment rate in effect under section 6621 for the calendar quarter in which such interest accrual period begins.\nIn the case of a long-term contract, all costs (including research and experimental costs) which directly benefit, or are incurred by reason of, the long-term contract activities of the taxpayer shall be allocated to such contract in the same manner as costs are allocated to extended period long-term contracts under section 451 and the regulations thereunder.\nIn the case of a cost-plus long-term contract or a Federal long-term contract, any cost not allocated to such contract under paragraph (1) shall be allocated to such contract if such cost is identified by the taxpayer (or a related person), pursuant to the contract or Federal, State, or local law or regulation, as being attributable to such contract.\nExcept as provided in subparagraphs (B) and (C), in the case of a long-term contract, interest costs shall be allocated to the contract in the same manner as interest costs are allocated to property produced by the taxpayer under section 263A(f).\nIn applying section 263A(f) for purposes of subparagraph (A), paragraph (1)(B)(iii) of such section shall be applied on a contract-by-contract basis; except that, in the case of a taxpayer described in subparagraph (B)(i)(II) of this paragraph, paragraph (1)(B)(iii) of section 263A(f) shall be applied on a property-by-property basis.\nSolely for purposes of determining the percentage of completion under subsection (b)(1)(A), the cost of qualified property shall be taken into account as a cost allocated to the contract as if subsection (k) of section 168 had not been enacted.\nFor purposes of paragraph (1), the rules of section 168(h)(2)(D) (relating to certain taxable entities not treated as instrumentalities) shall apply.\nFor purposes of paragraph (1)(B)(ii), in the case of any taxpayer which is not a corporation or a partnership, the gross receipts test of section 448(c) shall be applied in the same manner as if each trade or business of such taxpayer were a corporation or partnership.\nAny change in method of accounting made pursuant to paragraph (1)(B)(ii) shall be treated as initiated by the taxpayer and made with the consent of the Secretary. Such change shall be effected on a cut-off basis for all similarly classified contracts entered into on or after the year of change.\nFor purposes of this subsection, the term “construction contract” means any contract for the building, construction, reconstruction, or rehabilitation of, or the installation of any integral component to, or improvements of, real property.\nThe term “long-term contract” means any contract for the manufacture, building, installation, or construction of property if such contract is not completed within the taxable year in which such contract is entered into.\nFor purposes of this section, the term “contract commencement date” means, with respect to any contract, the first date on which any costs (other than bidding expenses or expenses incurred in connection with negotiating the contract) allocable to such contract are incurred.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations to prevent the use of related parties, pass-thru entities, intermediaries, options, or other similar arrangements to avoid the application of this section.\nThe date of the enactment of the Revenue Reconciliation Act of 1989, referred to in subsec. (e)(4), is the date of enactment of title VII of  Pub. L. 101–239 , which was approved  Dec. 19, 1989 .\n2018—Subsec. (b)(2)(A).  Pub. L. 115–141  inserted comma after “first”.\n2017—Subsec. (c)(6)(B)(ii).  Pub. L. 115–97, §\u202f13201(b)(2)(A) , substituted “ January 1, 2027  ( January 1, 2028 ” for “ January 1, 2020  ( January 1, 2021 ”.\nSubsec. (e)(1)(B).  Pub. L. 115–97, §\u202f13102(d)(1)(A) , in introductory provisions, inserted “(other than a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3))” after “taxpayer”.\nSubsec. (e)(1)(B)(ii).  Pub. L. 115–97, §\u202f13102(d)(1)(B) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “whose average annual gross receipts for the 3 taxable years preceding the taxable year in which such contract is entered into do not exceed $10,000,000.”\nSubsec. (e)(2).  Pub. L. 115–97, §\u202f13102(d)(2) , added par. (2) and struck out former par. (2) which related to determination of taxpayer’s gross receipts.\nSubsec. (e)(3) to (6).  Pub. L. 115–97, §\u202f13102(d)(2) , redesignated pars. (4) to (6) as (3) to (5), respectively, and struck out former par. (3) which related to controlled group of corporations.\n2015—Subsec. (c)(6)(B)(ii).  Pub. L. 114–113, §\u202f143(b)(6)(I) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “is placed in service after  December 31, 2009 , and before  January 1, 2011  ( January 1, 2012 , in the case of property described in section 168(k)(2)(B)), or after  December 31, 2012 , and before  January 1, 2016  ( January 1, 2017 , in the case of property described in section 168(k)(2)(B)).”\nSubsec. (c)(6)(B)(ii).  Pub. L. 114–113, §\u202f143(a)(2) , substituted “ January 1, 2016  ( January 1, 2017 ” for “ January 1, 2015  ( January 1, 2016 ”.\n2014—Subsec. (c)(6)(B)(ii).  Pub. L. 113–295  substituted “ January 1, 2015  ( January 1, 2016 ” for “ January 1, 2014  ( January 1, 2015 ”.\n2013—Subsec. (c)(6)(B)(ii).  Pub. L. 112–240  inserted “,\u2000or after  December 31, 2012 , and before  January 1, 2014  ( January 1, 2015 , in the case of property described in section 168(k)(2)(B))” before period at end.\n2010—Subsec. (c)(6).  Pub. L. 111–240  added par. (6).\n1997—Subsec. (b)(2)(C).  Pub. L. 105–34, §\u202f1211(b)(1) , substituted “the adjusted overpayment rate (as defined in paragraph (7))” for “the overpayment rate established by section 6621”.\nSubsec. (b)(6).  Pub. L. 105–34, §\u202f1211(a) , added par. (6).\nSubsec. (b)(7).  Pub. L. 105–34, §\u202f1211(b)(2) , added par. (7).\n1996—Subsec. (b)(1).  Pub. L. 104–188, §\u202f1704(t)(28) , which directed that par. (1) be amended by substituting “the look-back method of paragraph (2)” for “the look-back method of paragraph (3)”, could not be executed, because that phrase does not appear in text. See 1989 Amendment note below.\nSubsec. (e)(6)(B).  Pub. L. 104–188, §\u202f1702(h)(15) , substituted “section 168(e)(2)(A)(ii)” for “section 167(k)”.\n1990—Subsec. (e)(6)(A)(i).  Pub. L. 101–508  substituted “section 168(e)(2)(A)(ii)” for “section 167(k)”.\n1989—Subsec. (a).  Pub. L. 101–239, §\u202f7621(a) , substituted “Requirement that percentage of completion method be used” for “Percentage of completion-capitalized cost method” in heading and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—In the case of any long-term contract—\n“(A) 90 percent of the items with respect to such contract shall be taken into account under the percentage of completion method (as modified by subsection (b)), and\n“(B) 10 percent of the items with respect to such contract shall be taken into account under the taxpayer’s normal method of accounting.\n“(2) 90  percent look-back method to apply .—Upon completion of any long-term contract (or, with respect to any amount properly taken into account after completion of the contract, when such amount is so properly taken into account), the taxpayer shall pay (or shall be entitled to receive) interest determined by applying the look-back method of subsection (b)(3) to 90 percent of the items with respect to the contract.”\nSubsec. (a)(2).  Pub. L. 101–239, §\u202f7811(e)(1) , inserted “(or, with respect to any amount properly taken into account after completion of the contract, when such amount is so properly taken into account)” after “any long-term contract”.\nSubsec. (b)(1).  Pub. L. 101–239, §\u202f7621(c)(2)(A) , substituted “paragraph (3)” for “paragraph (4)”.\nPub. L. 101–239, §\u202f7621(c)(2)(B) , which directed the amendment of par. (1) by substituting “paragraph (2)” for “paragraph (3)”, was executed by making the substitution in subpar. (B) and concluding provisions to reflect the probable intent of Congress.\nPub. L. 101–239, §\u202f7621(c)(1) , redesignated par. (2) as (1) and struck out former par. (1) which read as follows: “ Subsection  (a)  not to apply where percentage of completion method used .—Subsection (a) shall not apply to any long-term contract with respect to which amounts includible in gross income are determined under the percentage of completion method.”\nSubsec. (b)(2).  Pub. L. 101–239, §\u202f7621(c)(1) , redesignated par. (3) as (2). Former par. (2) redesignated (1).\nPub. L. 101–239, §\u202f7811(e)(4) , (6), inserted two sentences at end.\nSubsec. (b)(2)(B).  Pub. L. 101–239, §\u202f7811(e)(2) , substituted “any amount properly taken into account” for “any amount received or accrued” and “is so properly taken into account” for “is so received or accrued”.\nSubsec. (b)(3).  Pub. L. 101–239, §\u202f7621(c)(1) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nPub. L. 101–239, §\u202f7811(e)(3) , in concluding provisions, substituted “any amount properly taken into account” for “any amount received or accrued” and “such amount was properly taken into account” for “such amount was received or accrued”.\nSubsec. (b)(3)(B).  Pub. L. 101–239, §\u202f7621(c)(3) , substituted “Paragraph (1)(B)” for “Paragraph (2)(B) and subsection (a)(2)” in introductory provisions.\nSubsec. (b)(4).  Pub. L. 101–239, §\u202f7621(c)(1) , redesignated par. (5) as (4). Former par. (4) redesignated (3).\nSubsec. (b)(4)(A)(i).  Pub. L. 101–239, §\u202f7621(c)(4)(A) , substituted “paragraph (2)” for “paragraph (3)”.\nSubsec. (b)(4)(A)(ii).  Pub. L. 101–239, §\u202f7621(c)(4)(B) , substituted “paragraph (2)(B)” for “paragraph (3)(B)” in introductory provisions.\nSubsec. (b)(4)(A)(ii)(I).  Pub. L. 101–239, §\u202f7621(c)(4)(C) , substituted “paragraph (2)(A)” for “paragraph (3)(A)”.\nSubsec. (b)(4)(A)(iii).  Pub. L. 101–239, §\u202f7621(c)(4)(A) , substituted “paragraph (2)” for “paragraph (3)” in two places.\nSubsec. (b)(5).  Pub. L. 101–239, §\u202f7621(b) , added par. (5).\nPub. L. 101–239, §\u202f7621(c)(1) , redesignated former par. (5) as (4).\nSubsec. (e)(2)(C).  Pub. L. 101–239, §\u202f7811(e)(5) , added subpar. (C).\nSubsec. (e)(5).  Pub. L. 101–239, §\u202f7621(c)(5) , inserted introductory provisions and struck out former introductory provisions which read as follows: “In the case of any residential construction contract which is not a home construction contract, subsection (a) shall be applied—”.\nSubsec. (e)(6)(A).  Pub. L. 101–239, §\u202f7815(e)(1)(A) , substituted “activities referred to in paragraph (4) with respect to” for “the building, construction, reconstruction, or rehabilitation of”.\nSubsec. (e)(6)(A)(i).  Pub. L. 101–239, §\u202f7815(e)(1)(B) , added cl. (i) and struck out former cl. (i) which read as follows: “dwelling units contained in buildings containing 4 or fewer dwelling units, and”.\n1988—Subsec. (a)(1)(A).  Pub. L. 100–647, §\u202f5041(a)(1) , substituted “90” for “70”.\nSubsec. (a)(1)(B).  Pub. L. 100–647, §\u202f5041(a)(2) , substituted “10” for “30”.\nSubsec. (a)(2).  Pub. L. 100–647, §\u202f5041(a)(1) , substituted “90” for “70” in heading and in text.\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1008(c)(2)(B) , substituted “Except as provided in paragraph (4), in” for “In”.\nSubsec. (b)(2)(B).  Pub. L. 100–647, §\u202f1008(c)(4)(B) , inserted “(or, with respect to any amount received or accrued after completion of the contract, when such amount is so received or accrued)” after “contract”.\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1008(c)(4)(A) , inserted at end “For purposes of the preceding sentence, any amount received or accrued after completion of the contract shall be taken into account by discounting (using the Federal mid-term rate determined under section 1274(d) as of the time such amount was received or accrued) such amount to its value as of the completion of the contract. The taxpayer may elect with respect to any contract to have the preceding sentence not apply to such contract.”\nPub. L. 100–647, §\u202f1008(c)(1)(A) , substituted “paragraph” for “subparagraph”.\nSubsec. (b)(3)(B).  Pub. L. 100–647, §\u202f1008(c)(1)(B) , substituted “subparagraph (A)” for “paragraph (1)” in two places.\nSubsec. (b)(3)(C).  Pub. L. 100–647, §\u202f1008(c)(1)(C) , substituted “subparagraph (B)” for “paragraph (1)”.\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1008(c)(2)(A) , added par. (4).\nSubsec. (b)(5).  Pub. L. 100–647, §\u202f5041(d) , added par. (5).\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f5041(b)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Subsections (a), (b), and (c)(1) and (2) shall not apply to any construction contract entered into by a taxpayer—\n“(A) who estimates (at the time such contract is entered into) that such contract will be completed within the 2-year period beginning on the contract commencement date of such contract, and\n“(B) whose average annual gross receipts for the 3 taxable years preceding the taxable year in which such contract is entered into do not exceed $10,000,000.”\nSubsec. (e)(5).  Pub. L. 100–647, §\u202f5041(b)(2) , added par. (5).\nSubsec. (e)(6).  Pub. L. 100–647, §\u202f5041(b)(3) , added par. (6).\nSubsec. (h).  Pub. L. 100–647, §\u202f5041(c) , added subsec. (h).\n1987—Subsec. (a).  Pub. L. 100–203  substituted “70 percent” for “40 percent” in par. (1)(A) and in heading and text of par. (2), and “30 percent” for “60 percent” in par. (1)(B).\nAmendment by  section 13102(d) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with provision for exemption from percentage completion for long-term contracts, see  section 13102(e) of Pub. L. 115–97 , set out as a note under  section 263A of this title .\nAmendment by  section 13201 of Pub. L. 115–97  applicable to property acquired and placed in service after  Sept. 27, 2017 , and specified plants planted or grafted after  Sept. 27, 2017 , see  section 13201(h) of Pub. L. 115–97 , set out as a note under  section 168 of this title .\nAmendment by  section 143(a)(2) of Pub. L. 114–113  applicable to property placed in service after  Dec. 31, 2014 , in taxable years ending after such date, see  section 143(a)(5) of Pub. L. 114–113 , set out as a note under  section 168 of this title .\nAmendment by  section 143(b)(6)(I) of Pub. L. 114–113  applicable to property placed in service after  Dec. 31, 2015 , in taxable years ending after such date, see  section 143(b)(7) of Pub. L. 114–113 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 113–295  applicable to property placed in service after  Dec. 31, 2013 , in taxable years ending after such date, see  section 125(e) of Pub. L. 113–295 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 112–240  applicable to property placed in service after  Dec. 31, 2012 , in taxable years ending after such date, see  section 331(f) of Pub. L. 112–240 , set out as a note under  section 168 of this title .\nPub. L. 111–240, title II, §\u202f2023(b) ,  Sept. 27, 2010 ,  124 Stat. 2559 , provided that:  “The amendment made by this section [amending this section] shall apply to property placed in service after  December 31, 2009 .”\nPub. L. 105–34, title XII, §\u202f1211(c) ,  Aug. 5, 1997 ,  111 Stat. 1000 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to contracts completed in taxable years ending after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall apply for purposes of section 167(g) of the Internal Revenue Code of 1986 to property placed in service after  September 13, 1995 .”\nAmendment by  section 1702(h)(15) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nPub. L. 101–239, title VII, §\u202f7621(d) ,  Dec. 19, 1989 ,  103 Stat. 2376 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to contracts entered into on or after  July 11, 1989 . \n \n “(2)   Binding bids .— The amendments made by this section shall not apply to any contract resulting from the acceptance of a bid made before  July 11, 1989 . The preceding sentence shall apply only if the bid could not have been revoked or altered at any time on or after  July 11, 1989 . \n \n “(3)   Special rule for certain ship contracts .— The amendments made by this section shall not apply in the case of a qualified ship contract (as defined in section 10203(b)(2)(B) of the Revenue Act of 1987 [ Pub. L. 100–203 , set out below]).”\nAmendment by sections 7811(e) and 7815(e)(1) of  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by section 1008(c)(1), (2), (4) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title V, §\u202f5041(e) ,  Nov. 10, 1988 ,  102 Stat. 3675 , as amended by  Pub. L. 101–239, title VII, §\u202f7815(e)(3) ,  Dec. 19, 1989 ,  103 Stat. 2419 , provided that: \n “(1)   Subsections  (a), (b),  and  (c).— “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by subsections (a), (b), and (c) [amending this section and  section 56 of this title ] shall apply to contracts entered into on or after  June 21, 1988 . \n \n “(B)   Binding bids .— The amendments made by subsections (a), (b), and (c) shall not apply to any contract resulting from the acceptance of a bid made before  June 21, 1988 . The preceding sentence shall apply only if the bid could not have been revoked or altered at any time on or after  June 21, 1988 . \n \n “(C)   Special rule for certain ship contracts .— The amendments made by subsections (a) and (b) [amending this section and  section 56 of this title ] shall not apply in the case of a qualified ship contract (as defined in section 10203(b)(2)(B) of the Revenue Act of 1987 [ Pub. L. 100–203 , set out below]). \n \n \n “(2)   Subsection  (d).— The amendment made by subsection (d) [amending this section] shall apply as if included in the amendments made by section 804 of the Reform Act [ Pub. L. 99–514 ]; except that such amendment shall not apply to any contract completed in a taxable year ending before the date of the enactment of this Act [ Nov. 10, 1988 ], if the due date (determined with regard to extensions) for the return for such year is before such date of enactment.”\nPub. L. 100–203, title X, §\u202f10203(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–394 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to contracts entered into after  October 13, 1987 . \n \n “(2)   Special rule for certain ship contracts.— “(A)   In general .— The amendments made by this section shall not apply in the case of a qualified ship contract. \n \n “(B)   Qualified ship contract .— For purposes of subparagraph (A), the term ‘qualified ship contract’ means any contract for the construction in the United States of not more than 5 ships if— “(i)  such ships will not be constructed (directly or indirectly) for the Federal Government, and \n \n “(ii)  the taxpayer reasonably expects to complete such contract within 5 years of the contract commencement date (as defined in section 460(g) of the Internal Revenue Code of 1986).”\nPub. L. 99–514, title VIII, §\u202f804(d) ,  Oct. 22, 1986 ,  100 Stat. 2361 , as amended by  Pub. L. 100–647, title I, §\u202f1008(c)(3) ,  Nov. 10, 1988 ,  102 Stat. 3439 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section] shall apply to any contract entered into after  February 28, 1986 . \n \n “(2)   Clarification of treatment of independent research and development expenses.— “(A)   In general .— For periods before, on, or after the date of enactment of this Act [ Oct. 22, 1986 ]— “(i)  any independent research and development expenses taken into account in determining the total contract price shall not be severable from the contract, and \n \n “(ii)  any independent research and development expenses shall not be treated as amounts chargeable to capital account. \n \n \n “(B)   Independent research and development expenses .— For purposes of subparagraph (A), the term ‘independent research and development expenses’ has the meaning given to such term by section 460(c)(5) of the Internal Revenue Code of 1986, as added by this section.”\nPub. L. 99–514, title VIII, §\u202f804(b) ,  Oct. 22, 1986 ,  100 Stat. 2361 , provided that:  “The Secretary of the Treasury or his delegate shall modify the income tax regulations relating to accounting for long-term contracts to carry out the provisions of section 460 of the Internal Revenue Code of 1986 (as added by subsection (a)).”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 108–357, title VII, §\u202f708 ,  Oct. 22, 2004 ,  118 Stat. 1550 , as amended by  Pub. L. 109–135, title IV, §\u202f403(s) ,  Dec. 21, 2005 ,  119 Stat. 2628 , provided that: \n “(a)   In General .— In the case of a qualified naval ship contract, the taxable income of such contract during the 5-taxable year period beginning with the taxable year in which the construction commencement date occurs shall be determined under a method identical to the method used in the case of a qualified ship contract (as defined in section 10203(b)(2)(B) of the Revenue Act of 1987 [ Pub. L. 100–203 , set out as an Effective Date of 1987 Amendment note above]). \n \n “(b)   Recapture of Tax Benefit .— In the case of a qualified naval ship contract to which subsection (a) applies, the taxpayer’s tax imposed by chapter 1 of the Internal Revenue Code of 1986 for the first taxable year following the 5-taxable year period described in subsection (a) shall be increased by the excess (if any) of— “(1)  the amount of tax which would have been imposed during such period if this section had not been enacted, over \n \n “(2)  the amount of tax so imposed during such period. \n \n \n “(c)   Qualified Naval Ship Contract .— For purposes of this section: “(1)   In general .— The term ‘qualified naval ship contract’ means any contract or portion thereof that is for the construction in the United States of 1 ship or submarine for the Federal Government if the taxpayer reasonably expects the acceptance date will occur no later than 9 years after the construction commencement date. \n \n “(2)   Acceptance date .— The term ‘acceptance date’ means the date 1 year after the date on which the Federal Government issues a letter of acceptance or other similar document for the ship or submarine. \n \n “(3)   Construction commencement date .— The term ‘construction commencement date’ means the date on which the physical fabrication of any section or component of the ship or submarine begins in the taxpayer’s shipyard. \n \n \n “(d)   Certain Adjustments Not to Apply .— Section 481 of the Internal Revenue Code of 1986 shall not apply with respect to any change in the method of accounting which is required by this section. \n \n “(e)   Effective Date .— This section shall apply to contracts for ships or submarines with respect to which the construction commencement date occurs after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAllocable costs (within the meaning of subsec. (c) of this section) with respect to any property to include contributions paid to or under a pension or annuity plan whether or not such contributions represent past service costs, see  section 10204 of Pub. L. 100–203 , set out as a note under  section 263A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'The amount of any deduction or credit allowed by this subtitle shall be taken for the taxable year which is the proper taxable year under the method of accounting used in computing taxable income.\nIn the case of the death of a taxpayer whose taxable income is computed under an accrual method of accounting, any amount accrued as a deduction or credit only by reason of the death of the taxpayer shall not be allowed in computing taxable income for the period in which falls the date of the taxpayer’s death.\nIf the taxable income is computed under an accrual method of accounting, then, at the election of the taxpayer, any real property tax which is related to a definite period of time shall be accrued ratably over that period.\nA taxpayer may, without the consent of the Secretary, make an election under this subsection for his first taxable year in which he incurs real property taxes. Such an election shall be made not later than the time prescribed by law for filing the return for such year (including extensions thereof).\nA taxpayer may, with the consent of the Secretary, make an election under this subsection at any time.\nIn the case of a taxpayer whose taxable income is computed under an accrual method of accounting, to the extent that the time for accruing taxes is earlier than it would be but for any action of any taxing jurisdiction taken after  December 31, 1960 , then, under regulations prescribed by the Secretary, such taxes shall be treated as accruing at the time they would have accrued but for such action by such taxing jurisdiction.\nUnder regulations prescribed by the Secretary, paragraph (1) shall be inapplicable to any item of tax to the extent that its application would (but for this paragraph) prevent all persons (including successors in interest) from ever taking such item into account.\nExcept as provided in regulations prescribed by the Secretary, amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends or interest on their deposits or withdrawable accounts (if such amounts paid or credited are withdrawable on demand subject only to customary notice to withdraw) by a mutual savings bank not having capital stock represented by shares, a domestic building and loan association, or a cooperative bank shall not be allowed as a deduction for the taxable year to the extent such amounts are paid or credited for periods representing more than 12 months. Any such amount not allowed as a deduction as the result of the application of the preceding sentence shall be allowed as a deduction for such other taxable year as the Secretary determines to be consistent with the preceding sentence.\nThis subsection shall not apply to points paid in respect of any indebtedness incurred in connection with the purchase or improvement of, and secured by, the principal residence of the taxpayer to the extent that, under regulations prescribed by the Secretary, such payment of points is an established business practice in the area in which such indebtedness is incurred, and the amount of such payment does not exceed the amount generally charged in such area.\nFor purposes of this title, in determining whether an amount has been incurred with respect to any item during any taxable year, the all events test shall not be treated as met any earlier than when economic performance with respect to such item occurs.\nIf the liability of the taxpayer requires the taxpayer to provide property or services, economic performance occurs as the taxpayer provides such property or services.\nIn the case of any other liability of the taxpayer, economic performance occurs at the time determined under regulations prescribed by the Secretary.\nIn making a determination under subparagraph (A)(iv), the treatment of such item on financial statements shall be taken into account.\nThis paragraph shall not apply to any item described in subparagraph (C) of paragraph (2).\nFor purposes of this subsection, the all events test is met with respect to any item if all events have occurred which determine the fact of liability and the amount of such liability can be determined with reasonable accuracy.\nThis subsection shall not apply to any item for which a deduction is allowable under a provision of this title which specifically provides for a deduction for a reserve for estimated expenses.\nIn the case of a tax shelter, economic performance shall be determined without regard to paragraph (3) of subsection (h).\nIn the case of a tax shelter, economic performance with respect to amounts paid during the taxable year for drilling an oil or gas well shall be treated as having occurred within a taxable year if drilling of the well commences before the close of the 90th day after the close of the taxable year.\nIn the case of a tax shelter which is a partnership, in applying section 704(d) to a deduction or loss for any taxable year attributable to an item which is deductible by reason of subparagraph (A), the term “cash basis” shall be substituted for the term “adjusted basis”.\nUnder regulations prescribed by the Secretary, in the case of a tax shelter other than a partnership, the aggregate amount of the deductions allowable by reason of subparagraph (A) for any taxable year shall be limited in a manner similar to the limitation under clause (i).\nIn the case of the trade or business of farming (as defined in section 464(e)), in determining whether an entity is a tax shelter, the definition of farming syndicate in subsection (k) shall be substituted for subparagraphs (A) and (B) of paragraph (3).\nFor purposes of this subsection, the term “economic performance” has the meaning given such term by subsection (h).\nIf a taxpayer other than a C corporation receives any applicable subsidy for any taxable year, any excess farm loss of the taxpayer for the taxable year shall not be allowed.\nAny loss which is disallowed under paragraph (1) shall be treated as a deduction of the taxpayer attributable to farming businesses in the next taxable year.\nThe term “farming business” has the meaning given such term in section 263A(e)(4).\nFor purposes of subparagraph (A)(i), there shall not be taken into account any deduction for any loss arising by reason of fire, storm, or other casualty, or by reason of disease or drought, involving any farming business.\nThe Secretary may prescribe such additional reporting requirements as the Secretary determines appropriate to carry out the purposes of this subsection.\nThis subsection shall be applied before the application of section 469.\nFor purposes of this subsection, the term “farming” has the meaning given to such term by section 464(e).\nAny loss which is disallowed under paragraph (1) shall be treated as a net operating loss for the taxable year for purposes of determining any net operating loss carryover under section 172(b) for subsequent taxable years.\nDeductions for losses from sales or exchanges of capital assets shall not be taken into account under subparagraph (A)(i).\nThe Secretary shall prescribe such additional reporting requirements as the Secretary determines necessary to carry out the purposes of this subsection.\nThis subsection shall be applied after the application of section 469.\nPub. L. 117–169, title I, §\u202f13903(b) ,  Aug. 16, 2022 ,  136 Stat. 2014 , provided that, applicable to taxable years beginning after  Dec. 31, 2026 , subsection (l)(1) of this section is amended by striking “ January 1, 2027 ” each place it appears and inserting “ January 1, 2029 ”. See 2022 Amendment note below.\nPub. L. 117–2, title IX, §\u202f9041 ,  Mar. 11, 2021 ,  135 Stat. 122 , provided that, applicable to taxable years beginning after  December 31, 2025 , subsection (l)(1) of this section is amended by striking “ January 1, 2026 ” each place it appears and inserting “ January 1, 2027 ”. See 2021 Amendment note below.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Food, Conservation, and Energy Act of 2008, referred to in subsec. (j)(3)(A), is  Pub. L. 110–246 ,  June 18, 2008 ,  122 Stat. 1651 . Title I of the Act is classified principally to chapter 113 (§\u202f8701 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under  section 8701 of Title 7  and Tables.\nSubsec. (c) of  section 464 of this title , which was transferred to this section and redesignated subsec. (j) by  Pub. L. 113–295, §\u202f221(a)(58)(B)(i) , was based on  Pub. L. 94–455, title II, §\u202f207(a)(1) ,  Oct. 4, 1976 ,  90 Stat. 1536 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2022—Subsec. ( l )(1).  Pub. L. 117–169  substituted “ January 1, 2029 ” for “ January 1, 2027 ” in two places.\n2021—Subsec. ( l )(1).  Pub. L. 117–2  substituted “ January 1, 2027 ” for “ January 1, 2026 ” in two places.\n2020—Subsec. ( l )(1).  Pub. L. 116–136, §\u202f2304(a) , amended par. (1) generally. Prior to amendment, text read as follows: “In the case of taxable year of a taxpayer other than a corporation beginning after  December 31, 2017 , and before  January 1, 2026 —\n“(A) subsection (j) (relating to limitation on excess farm losses of certain taxpayers) shall not apply, and\n“(B) any excess business loss of the taxpayer for the taxable year shall not be allowed.”\nSubsec. ( l )(2).  Pub. L. 116–136, §\u202f2304(b)(1) , substituted “a net operating loss for the taxable year for purposes of determining any net operating loss carryover under section 172(b) for subsequent taxable years” for “a net operating loss carryover to the following taxable year under section 172”.\nSubsec. ( l )(3)(A).  Pub. L. 116–136, §\u202f2304(b)(2)(B) , inserted concluding provisions.\nSubsec. ( l )(3)(A)(i).  Pub. L. 116–136, §\u202f2304(b)(2)(A) , inserted “and without regard to any deduction allowable under section 172 or 199A” after “under paragraph (1)”.\nSubsec. ( l )(3)(B), (C).  Pub. L. 116–136, §\u202f2304(b)(3) , added subpar. (B) and redesignated former subpar. (B) as (C).\n2018—Subsec. (i)(4).  Pub. L. 115–141, §\u202f401(a)(117)(B) , substituted “subsection (k)” for “subsection (j)”.\nSubsecs. (j), (k).  Pub. L. 115–141, §\u202f401(a)(117)(A) , redesignated subsec. (j) relating to farming syndicate defined as (k).\n2017—Subsec. ( l ).  Pub. L. 115–97  added subsec. ( l ).\n2014—Subsec. (i)(4).  Pub. L. 113–295, §\u202f221(a)(58)(B)(iii) , substituted “subsection (j)” for “section 464(c)”.\nSubsec. (j).  Pub. L. 113–295, §\u202f221(a)(58)(B)(i) , transferred subsec. (c) of  section 464 of this title , relating to farming syndicate defined, to the end of this section and redesignated it as subsec. (j).\nSubsec. (j)(1).  Pub. L. 113–295, §\u202f221(a)(58)(B)(ii)(I) , substituted “For purposes of subsection (i)(4)” for “For purposes of this section” in introductory provisions.\nSubsec. (j)(3), (4).  Pub. L. 113–295, §\u202f221(a)(58)(B)(ii)(II) , added pars. (3) and (4).\n2008—Subsec. (j).  Pub. L. 110–246, §\u202f15351(a) , added subsec. (j) relating to limitation on excess farm losses of certain taxpayers.\n2005—Subsec. (i)(3)(C).  Pub. L. 109–135  substituted “section 6662(d)(2)(C)(ii)” for “section 6662(d)(2)(C)(iii)”.\n1996—Subsec. (i)(3)(C).  Pub. L. 104–188, §\u202f1704(t)(78) , substituted “section 6662(d)(2)(C)(iii)” for “section 6662(d)(2)(C)(ii)”.\nPub. L. 104–188, §\u202f1704(t)(24) , amended directory language of  Pub. L. 101–239 . See 1989 Amendment note below.\n1990—Subsec. (i)(3)(C).  Pub. L. 101–508  amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “any tax shelter (within the meaning of section 6662(d)(2)(C)(ii)).”\n1989—Subsec. (i)(3)(C).  Pub. L. 101–239 , as amended by  Pub. L. 104–188, §\u202f1704(t)(24) , substituted “section 6662(d)(2)(C)(ii)” for “section 6661(b)(2)(C)(ii)”.\n1988—Subsec. (h)(5)(B), (C).  Pub. L. 100–647, §\u202f1018(u)(5) , amended  Pub. L. 99–514, §\u202f823(b)(1) . See 1986 Amendment note below.\nSubsec. (i)(2).  Pub. L. 100–647, §\u202f1008(a)(3) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “In the case of a tax shelter, economic performance with respect to the act of drilling an oil or gas well shall be treated as having occurred within a taxable year if drilling of the well commences before the close of the 90th day after the close of the taxable year.”\n1987—Subsec. (h)(5).  Pub. L. 100–203  substituted “items” for “cases to which other provisions of this title specifically apply” in heading and amended text generally. Prior to amendment, text read as follows: “This subsection shall not apply to any item to which any of the following provisions apply:\n“(A) Section 463 (relating to vacation pay).\n“(B) Any other provisions of this title which specifically provides for a deduction for a reserve for estimated expenses.”\n1986—Subsec. (h)(5)(A).  Pub. L. 99–514, §\u202f805(c)(5) , redesignated subpar. (B) as (A) and struck out former subpar. (A) which referred to subsec. (c) or (f) of section 166.\nSubsec. (h)(5)(B).  Pub. L. 99–514, §\u202f823(b)(1) , as amended by  Pub. L. 100–647, §\u202f1018(u)(5) , redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “Section 466 (relating to discount coupons).”\nPub. L. 99–514, §\u202f805(c)(5) , redesignated subpar. (C) as (B). Former subpar. (B) redesignated (A).\nSubsec. (h)(5)(C).  Pub. L. 99–514, §\u202f823(b)(1) , as amended by  Pub. L. 100–647, §\u202f1018(u)(5) , redesignated subpar. (C) as (B).\nPub. L. 99–514, §\u202f805(c)(5) , redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).\nSubsec. (h)(5)(D).  Pub. L. 99–514, §\u202f805(c)(5) , redesignated subpar. (D) as (C).\nSubsec. (i).  Pub. L. 99–514, §\u202f801(b)(1) , substituted “Special rules for tax shelters” for “Tax shelters may not deduct items earlier than when economic performance occurs” in heading.\nSubsec. (i)(1).  Pub. L. 99–514, §\u202f801(b)(1) , substituted “Recurring item exception not to apply” for “In general” in heading and amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In the case of a tax shelter computing taxable income under the cash receipts and disbursements method of accounting, such tax shelter shall not be allowed a deduction under this chapter with respect to any item any earlier than the time when such item would be treated as incurred under subsection (h) (determined without regard to paragraph (3) thereof).”\nSubsec. (i)(2).  Pub. L. 99–514, §\u202f801(b)(1) , amended par. (2) generally, substituting provisions relating to special rule for spudding of oil or gas wells for former provisions consisting of subpars. (A) to (D) which related to deduction of items when economic performance occurs on or before 90th day after close of the taxable year to the extent of cash basis.\nPub. L. 99–514, §\u202f1807(a)(1) , substituted “on or before the 90th day” for “within 90 days” in heading and substituted “before the close of the 90th day after the close of the taxable year” for “within 90 days after the close of the taxable year” in subpar. (A).\nSubsec. (i)(4).  Pub. L. 99–514, §\u202f801(b)(2) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “In the case of the trade or business of farming (as defined in section 464(e))—\n“(A) any tax shelter described in paragraph (3)(C) shall be treated as a farming syndicate for purposes of section 464; except that this subparagraph shall not apply for purposes of determining the income of an individual meeting the requirements of section 464(c)(2),\n“(B) section 464 shall be applied before this subsection, and\n“(C) in determining whether an entity is a tax shelter, the definition of farming syndicate in section 464(c) shall be substituted for subparagraphs (A) and (B) of paragraph (3).”\nSubsec. (i)(4)(A).  Pub. L. 99–514, §\u202f1807(a)(2) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “section 464 shall be applied to any tax shelter described in paragraph (3)(C),”.\n1984—Subsec. (f)(4).  Pub. L. 98–369, §\u202f91(e) , inserted “determined after application of subsection (h)”.\nSubsecs. (h), (i).  Pub. L. 98–369, §\u202f91(a) , added subsecs. (h) and (i).\n1976—Subsec. (c)(2), (3).  Pub. L. 94–455 , §§\u202f1901(a)(69)(A), (B), 1906(b)(13)(A), redesignated par. (3) as (2), substituted “in which he” for “which begins after  December 31, 1953 , and ends after the date of the enactment of this title in which the taxpayer”, and struck out “or his delegate” after “Secretary” wherever appearing. Former par. (2), which related to special limitations on the applicability of par. (1), was struck out.\nSubsecs. (d), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (g).  Pub. L. 94–455, §\u202f208(a) , added subsec. (g).\n1964—Subsec. (f).  Pub. L. 88–272  added subsec. (f).\n1962—Subsec. (e).  Pub. L. 87–876  added subsec. (e).\n1960—Subsec. (d).  Pub. L. 86–781  added subsec. (d).\nPub. L. 117–169, title I, §\u202f13903(b)(2) ,  Aug. 16, 2022 ,  136 Stat. 2014 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2026 .”\nPub. L. 117–2, title IX, §\u202f9041(b) ,  Mar. 11, 2021 ,  135 Stat. 122 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2025 .”\nPub. L. 116–136, div. A, title II, §\u202f2304(c) ,  Mar. 27, 2020 ,  134 Stat. 356 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Technical amendments .— The amendments made by subsection (b) [amending this section] shall take effect as if included in the provisions of  Public Law 115–97  to which they relate.”\nPub. L. 115–97, title I, §\u202f11012(b) ,  Dec. 22, 2017 ,  131 Stat. 2072 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15351(b) ,  May 22, 2008 ,  122 Stat. 1525 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15351(b),  June 18, 2008 ,  122 Stat. 1664 , 2287, provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 101–239, title VII, §\u202f7721(d) ,  Dec. 19, 1989 ,  103 Stat. 2400 , provided that:  “The amendments made by this section [enacting sections 6662 to 6665 of this title, amending this section and sections 1274, 5684, 5761, 6013, 6222, 6601, 6621, 6653, 6672, and 7519 of this title, and repealing sections 6659, 6659A, 6660, 6661, and former  section 6662 of this title ] shall apply to returns the due date for which (determined without regard to extensions) is after  December 31, 1989 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10201(c)(1) of Pub. L. 100–203 , set out as a note under  section 404 of this title .\nAmendment by  section 801(b) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 801(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 448 of this title .\nAmendment by  section 805(c)(5) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain changes required in method of accounting, see  section 805(d) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nAmendment by  section 823 of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with changes required in the method of accounting, see  section 823(c) of Pub. L. 99–514 , set out as an Effective Date of Repeal note under  section 466 of this title .\nAmendment by section 1807(a)(1), (2) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f91(g) –(i),  July 18, 1984 ,  98 Stat. 608 , 609, as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1807(a)(3)(B), (4)(F), (5), (6),  Oct. 22, 1986 ,  100 Stat. 2095 , 2811, 2813, 2814, provided that: \n “(g)   Effective Dates.— “(1)   In general .— Except as provided in this subsection and subsections (h) and (i), the amendments made by this section [enacting sections 88, 468, and 468A of this title and amending this section and  section 172 of this title ] shall apply to amounts with respect to which a deduction would be allowable under chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (determined without regard to such amendments) after— “(A)  in the case of amounts to which section 461(h) of such Code (as added by such amendments) applies, the date of the enactment of this Act [ July 18, 1984 ], and \n \n “(B)  in the case of amounts to which section 461(i) of such Code (as so added) applies, after  March 31, 1984 . \n \n \n “(2)   Taxpayer may elect earlier application.— “(A)   In general .— In the case of amounts described in paragraph (1)(A), a taxpayer may elect to have the amendments made by this section apply to amounts which— “(i)  are incurred on or before the date of the enactment of this Act [ July 18, 1984 ] (determined without regard to such amendments), and \n \n “(ii)  are incurred after the date of the enactment of this Act (determined with regard to such amendments). \n \n\n \u2001\u2001The Secretary of the Treasury or his delegate may by regulations provide that (in lieu of an election under the preceding sentence) a taxpayer may (subject to such conditions as such regulations may provide) elect to have subsection (h) of section 461 of such Code apply to the taxpayer’s entire taxable year in which occurs  July 19, 1984 . \n \n “(B)   Election treated as change in the method of accounting .— For purposes of section 481 of the Internal Revenue Code of 1986, if an election is made under subparagraph (A) with respect to any amount, the application of the amendments made by this section shall be treated as a change in method of accounting— “(i)  initiated by the taxpayer, \n \n “(ii)  made with the consent of the Secretary of the Treasury, and \n \n “(iii)  with respect to which section 481 of such Code shall be applied by substituting a 3-year adjustment period for a 10-year adjustment period. \n \n \n \n “(3)   Section 461( h)  to apply in certain cases .— Notwithstanding paragraph (1), section 461(h) of the Internal Revenue Code of 1986 (as added by this section) shall be treated as being in effect to the extent necessary to carry out any amendments made by this section which take effect before section 461(h). \n \n “(4)   Effective date for treatment of mining and solid waste reclamation and closing costs .— Except as otherwise provided in subsection (h), the amendments made by subsection (b) [enacting  section 468 of this title ] shall take effect on the date of the enactment of this Act [ July 18, 1984 ] with respect to taxable years ending after such date. \n \n “(5)   Rules for nuclear decommissioning costs .— The amendments made by subsections (c) and (f) [enacting sections 88 and 468A of this title] shall take effect on the date of the enactment of this Act [ July 18, 1984 ] with respect to taxable years ending after such date. \n \n “(6)   Modification of net operating loss carryback period .— The amendments made by subsection (d) [amending  section 172 of this title ] shall apply to losses for taxable years beginning after  December 31, 1983 . \n \n \n “(h)   Exception for Certain Existing Activities and Contracts .— If— “(1)   Existing accounting practices .— If, on  March 1, 1984 , any taxpayer was regularly computing his deduction for mining reclamation activities under a current cost method of accounting (as determined by the Secretary of the Treasury or his delegate), the liability for reclamation activities— “(A)  for land disturbed before the date of the enactment of this Act [ July 18, 1984 ], or \n \n “(B)  to which paragraph (2) applies, \n \n\n shall be treated as having been incurred when the land was disturbed. \n \n “(2)   Fixed price supply contract.— “(A)   In general .— In the case of any fixed price supply contract entered into before  March 1, 1984 , the amendments made by subsection (b) [enacting  section 468 of this title ] shall not apply to any minerals extracted from such property which are sold pursuant to such contract. \n \n “(B)   No extension or renegotiation .— Subparagraph (A) shall not apply— “(i)  to any extension of any contract beyond the period such contract was in effect on  March 1, 1984 , or \n \n “(ii)  to any renegotiation of, or other change in, the terms and conditions of such contract in effect on  March 1, 1984 . \n \n \n \n \n “(i)   Transitional Rule for Accrued Vacation Pay.— “(1)   In general .— In the case of any taxpayer— “(A)  with respect to whom a deduction was allowable (other than under section 463 of the Internal Revenue Code of 1986) for vested accrued vacation pay for the last taxable year ending before the date of the enactment of this Act [ July 18, 1984 ], and \n \n “(B)  who elects the application of section 463 of such Code for the first taxable year ending after the date of the enactment of this Act, \n \n\n then, for purposes of section 463(b) of such Code, the opening balance of the taxpayer with respect to any vested accrued vacation pay shall be determined under section 463(b)(1) of such Code. \n \n “(2)   Vested accrued vacation pay .— For purposes of this subsection, the term ‘vested accrued vacation pay’ means any amount allowable under section 162(a) of such Code with respect to vacation pay of employees of the taxpayer (determined without regard to section 463 of such Code).”\nAmendment by  section 1901(a)(69) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title II, §\u202f208(b) ,  Oct. 4, 1976 ,  90 Stat. 1542 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to amounts paid after  December 31, 1975 , in taxable years ending after such date. \n \n “(2)   Certain amounts paid before 1977 .— The amendment made by subsection (a) [amending this section] shall not apply to amounts paid before  January 1, 1977 , pursuant to a binding contract or written loan commitment which existed on  September 16, 1975  (and at all times thereafter), and which required prepayment of such amounts by the taxpayer.”\nPub. L. 88–272, title II, §\u202f223(b) ,  Feb. 26, 1964 ,  78 Stat. 76 , provided that:  \n “Except as provided in subsections (c) and (d) [set out below]— \n “(1)  the amendment made by subsection (a)(1) [amending this section] shall apply to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 , and \n \n “(2)  the amendment made by subsection (a)(2) [amending section 43 of the Internal Revenue Code of 1939] shall apply to taxable years to which the Internal Revenue Code of 1939 applies.”\nPub. L. 87–876, §\u202f3(b) ,  Oct. 24, 1962 ,  76 Stat. 1199 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply only with respect to taxable years ending after  December 31, 1962 .”\nPub. L. 86–781, §\u202f6(b) ,  Sept. 14, 1960 ,  74 Stat. 1021 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1960 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1807(a)(8) ,  Oct. 22, 1986 ,  100 Stat. 2816 , provided that:  \n “For purposes of section 461(h) of the Internal Revenue Code of 1954 [now 1986], economic performance shall be treated as occurring on the date of a payment to an insurance company if— \n “(A)  such payment was made before  November 23, 1985 , for indemnification against a tort liability relating to personal injury or death caused by inhalation or ingestion of dust from asbestos-containing insulation products, \n \n “(B)  such insurance company is unrelated to taxpayer, \n \n “(C)  such payment is not refundable, and \n \n “(D)  the taxpayer is not engaged in the mining of asbestos nor is any member of any affiliated group which includes the taxpayer so engaged.”\nPub. L. 99–514, title XVIII, §\u202f1807(c) ,  Oct. 22, 1986 ,  100 Stat. 2817 , provided that:  \n “A taxpayer shall be allowed to use the cash receipts and disbursements method of accounting for taxable years ending after  January 1, 1982 , if such taxpayer— \n “(1)  is a partnership which was founded in 1936, \n \n “(2)  has over 1,000 professional employees, \n \n “(3)  used a long-term contract method of accounting for a substantial part of its income from the performance of architectural and engineering services, and \n \n “(4)  is headquartered in Chicago, Illinois.”\nPub. L. 88–272, title II, §\u202f223(c) ,  Feb. 26, 1964 ,  78 Stat. 76 , provided that: \n “(1)  The amendments made by subsection (a) [amending this section and section 43 of the Internal Revenue Code of 1939] shall not apply to any transfer of money or other property described in subsection (a) made in a taxable year beginning before  January 1, 1964 , if the taxpayer elects, in the manner provided by regulations prescribed by the Secretary of the Treasury or his delegate, to have this paragraph apply. Such an election— “(A)  must be made within one year after the date of the enactment of this Act [ Feb. 26, 1964 ], \n \n “(B)  may not be revoked after the expiration of such one-year period, and \n \n “(C)  shall apply to all transfers described in the first sentence of this paragraph (other than transfers described in paragraph (2)). \n \n\n In the case of any transfer to which this paragraph applies, the deduction shall be allowed only for the taxable year in which the contest with respect to such transfer is settled. \n \n “(2)  Paragraph (1) shall not apply to any transfer if the assessment of any deficiency which would result from the application of the election in respect of such transfer is, on the date of the election under paragraph (1), prevented by the operation of any law or rule of law. \n \n “(3)  If the taxpayer makes an election under paragraph (1), and if, on the date of such election, the assessment of any deficiency which results from the application of the election in respect of any transfer is not prevented by the operation of any law or rule of law, the period within which assessment of such deficiency may be made shall not expire earlier than 2 years after the date of the enactment of this Act [ Feb. 26, 1964 ].”\nPub. L. 88–272, title II, §\u202f223(d) ,  Feb. 26, 1964 ,  78 Stat. 77 , provided that:  \n “The amendments made by subsection (a) [amending this section and section 43 of the Internal Revenue Code of 1939] shall not apply to any transfer of money or other property described in subsection (a) made in a taxable year beginning before  January 1, 1964 , if— “(1)  no deduction has been allowed in respect of such transfer for any taxable year before the taxable year in which the contest with respect to such transfer is settled, and \n \n “(2)  refund or credit of any overpayment which would result from the application of such amendments to such transfer is prevented by the operation of any law or rule of law. \n \n\n In the case of any transfer to which this subsection applies, the deduction shall be allowed for the taxable year in which the contest with respect to such transfer is settled.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736   68A Stat. 158 , related to reserves for estimated expenses.\nRepeal effective with respect to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see section 3 of Act  June 15, 1955 , set out as an Effective Date of 1955 Amendment note under  section 381 of this title .\nFor provisions concerning increase in tax in any taxable year ending on or before  June 15, 1955  by reason of enactment of act  June 15, 1955 , see section 4 of act  June 15, 1955 , set out as a note under  section 381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Section, added  Pub. L. 93–625, §\u202f4(a) ,  Jan. 3, 1974 ,  88 Stat. 2109 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 ;  Pub. L. 98–369, div. A, title V, §\u202f561(a) ,  July 18, 1984 ,  98 Stat. 901 ;  Pub. L. 99–514, title XI, §\u202f1165(a) ,  Oct. 22, 1986 ,  100 Stat. 2511 , related to deduction allowable for accrual basis taxpayers under  section 162(a) of this title  with respect to vacation pay.\nRepeal applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10201(c)(1) of Pub. L. 100–203 , set out as an Effective Date of 1987 Amendment note under  section 404 of this title .\nPub. L. 100–203, title X, §\u202f10201(c)(2) ,  Dec. 22, 1987 ,  101 Stat. 1330–388 , provided that:  \n “In the case of any taxpayer who elected to have section 463 of the Internal Revenue Code of 1986 apply for such taxpayer’s last taxable year beginning before  January 1, 1988 , and who is required to change his method of accounting by reason of the amendments made by this section [amending sections 404, 419, and 461 of this title, repealing sections 81 and 463 of this title, and enacting provisions set out as a note under  section 404 of this title ]— \n “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as having been made with the consent of the Secretary, and \n \n “(C)  the net amount of adjustments required by section 481 of such Code to be taken into account by the taxpayer— “(i)  shall be reduced by the balance in the suspense account under section 463(c) of such Code as of the close of such last taxable year, and \n \n “(ii)  shall be taken into account over the 4-taxable year period beginning with the taxable year following such last taxable year as follows: \n \n \n \n \n \n \n \u2001“In the case of the: The percentage taken into account is: \n \n \n 1st year 25\u202f\u202f \n 2nd year 5\u202f\u202f \n 3rd year 35\u202f\u202f \n 4th year 35. \n \n \n \n \n\n Notwithstanding subparagraph (C)(ii), if the period the adjustments are required to be taken into account under section 481 of such Code is less than 4 years, such adjustments shall be taken into account ratably over such shorter period.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'In the case of any taxpayer to whom subsection (d) applies, a deduction (otherwise allowable under this chapter) for amounts paid for feed, seed, fertilizer, or other similar farm supplies shall only be allowed for the taxable year in which such feed, seed, fertilizer, or other supplies are actually used or consumed, or, if later, for the taxable year for which allowable as a deduction (determined without regard to this section).\nSubsection (a) shall not apply to any amount paid for supplies which are on hand at the close of the taxable year on account of fire, storm, or other casualty, or on account of disease or drought.\nThe term “excess prepaid farm supplies” means the prepaid farm supplies for the taxable year to the extent the amount of such supplies exceeds 50 percent of the deductible farming expenses for the taxable year (other than prepaid farm supplies).\nThe term “prepaid farm supplies” means any amounts which are described in subsection (a) or (b) and would be allowable for a subsequent taxable year under the rules of subsections (a) and (b).\nThe term “deductible farming expenses” means any amount allowable as a deduction under this chapter (including any amount allowable as a deduction for depreciation or amortization) which is properly allocable to the trade or business of farming.\nFor purposes of this section, the term “farming” means the cultivation of land or the raising or harvesting of any agricultural or horticultural commodity including the raising, shearing, feeding, caring for, training, and management of animals. For purposes of the preceding sentence, trees (other than trees bearing fruit or nuts) shall not be treated as an agricultural or horticultural commodity.\n2018— Pub. L. 115–141, §\u202f401(a)(118) , inserted “expenses” after “farming” in section catchline.\nSubsec. (d)(2)(B)(iii).  Pub. L. 115–141, §\u202f401(a)(119) , substituted “section 461(k)(2)(E)” for “subsection (c)(2)(E)”.\n2014—Subsecs. (a), (b).  Pub. L. 113–295, §\u202f221(a)(58)(A) , substituted “any taxpayer to whom subsection (d) applies” for “any farming syndicate (as defined in subsection (c))” in subsec. (a) and in introductory provisions of subsec. (b).\nSubsec. (c).  Pub. L. 113–295, §\u202f221(a)(58)(C)(i) , redesignated subsec. (d) as (c). Former subsec. (c) transferred to  section 461 of this title .\nPub. L. 113–295, §\u202f221(a)(58)(B)(i) , transferred subsec. (c) defining the term “farming syndicate” to  section 461 of this title  and redesignated it as subsec. (j) of that section.\nSubsec. (d).  Pub. L. 113–295, §\u202f221(a)(58)(D) , struck out “Subsections (a) and (b) to apply to” before “Certain persons” in heading, redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1). Prior to amendment, text of par. (1) read as follows: “In the case of a taxpayer to whom this subsection applies, subsections (a) and (b) shall apply to the excess prepaid farm supplies of such taxpayer in the same manner as if such taxpayer were a farming syndicate.”\nPub. L. 113–295, §\u202f221(a)(58)(C)(i) , redesignated subsec. (f) as (d). Former subsec. (d) redesignated (c).\nSubsec. (e).  Pub. L. 113–295, §\u202f221(a)(58)(C) , added subsec. (e) and struck out former subsec. (e) which defined the terms “farming” and “limited entrepreneur” for purposes of this section.\nSubsec. (f).  Pub. L. 113–295, §\u202f221(a)(58)(C)(i) , redesignated subsec. (f) as (d).\nSubsec. (g).  Pub. L. 113–295, §\u202f221(a)(58)(C)(i) , struck out subsec. (g). Text read as follows: “Except as provided in subsection (f), subsections (a) and (b) shall not apply to any taxable year beginning after  December 31, 1986 .”\n1997—Subsec. (f)(3)(B)(i).  Pub. L. 105–34  substituted “section 121” for “section 1034”.\n1988—Subsec. (g).  Pub. L. 100–647  added subsec. (g).\n1986— Pub. L. 99–514, §\u202f404(b)(1) , substituted “for certain farming” for “in case of farming syndicates” in section catchline.\nSubsec. (d).  Pub. L. 99–514, §\u202f803(b)(8) , substituted “Exception” for “Exceptions” as heading and amended text generally. Prior to amendment, text read as follows: “Subsection (a) shall not apply to—\n“(1) any amount paid for supplies which are on hand at the close of the taxable year on account of fire, storm, flood, or other casualty or on account of disease or drought, or\n“(2) any amount required to be charged to capital account under section 278.”\nSubsec. (f).  Pub. L. 99–514, §\u202f404(a) , added subsec. (f).\n1982—Subsec. (c)(1)(A), (B).  Pub. L. 97–354  substituted “an S corporation” for “an electing small business corporation (as defined in section 1371(b))”.\n1978—Subsec. (c)(2).  Pub. L. 95–600  substituted in subpar. (E) “(or a spouse of any such member)” for “(within the meaning of section 267(c)(4))” and provided that for purposes of subpar. (E) the term “family” has the meaning given to such term by section 267(c)(4).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the amendment by  section 803(b)(8) of Pub. L. 99–514  is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nPub. L. 99–514, title IV, §\u202f404(c) ,  Oct. 22, 1986 ,  100 Stat. 2224 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or incurred after  March 1, 1986 , in taxable years beginning after such date.”\nAmendment by  section 803(b)(8) of Pub. L. 99–514  applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 95–600  effective as if included in this section or  section 447 of this title  at the time of their enactment,  Oct. 4, 1976 , see section 701( l )(4) of  Pub. L. 95–600 , set out as a note under  section 447 of this title .\nPub. L. 94–455, title II, §\u202f207(a)(3) ,  Oct. 4, 1976 ,  90 Stat. 1537 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this subsection [enacting this section] shall apply to taxable years beginning after  December 31, 1975 . \n \n “(B)   Transitional rule .— In the case of a farming syndicate in existence on  December 31, 1975 , and for which there was no change of membership throughout its taxable year beginning in 1976, the amendments made by this subsection shall apply to taxable years beginning after  December 31, 1976 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Any loss from an activity to which this section applies not allowed under this section for the taxable year shall be treated as a deduction allocable to such activity in the first succeeding taxable year.\nExcept to the extent provided in regulations, for purposes of paragraph (1)(B), amounts borrowed shall not be considered to be at risk with respect to an activity if such amounts are borrowed from any person who has an interest in such activity or from a related person to a person (other than the taxpayer) having such an interest.\nSubparagraph (A) shall not apply to an interest as a creditor in the activity.\nIn the case of amounts borrowed by a corporation from a shareholder, subparagraph (A) shall not apply to an interest as a shareholder.\nNotwithstanding any other provision of this section, a taxpayer shall not be considered at risk with respect to amounts protected against loss through nonrecourse financing, guarantees, stop loss agreements, or other similar arrangements.\nIf in any taxable year the taxpayer has a loss from an activity to which subsection (a) applies, the amount with respect to which a taxpayer is considered to be at risk (within the meaning of subsection (b)) in subsequent taxable years with respect to that activity shall be reduced by that portion of the loss which (after the application of subsection (a)) is allowable as a deduction.\nNotwithstanding any other provision of this subsection, in the case of an activity of holding real property, a taxpayer shall be considered at risk with respect to the taxpayer’s share of any qualified nonrecourse financing which is secured by real property used in such activity.\nIn the case of a partnership, a partner’s share of any qualified nonrecourse financing of such partnership shall be determined on the basis of the partner’s share of liabilities of such partnership incurred in connection with such financing (within the meaning of section 752).\nThe term “qualified person” has the meaning given such term by section 49(a)(1)(D)(iv).\nFor purposes of clause (i), section 49(a)(1)(D)(iv) shall be applied without regard to subclause (I) thereof (relating to financing from related persons) if the financing from the related person is commercially reasonable and on substantially the same terms as loans involving unrelated persons.\nThe activity of holding real property includes the holding of personal property and the providing of services which are incidental to making real property available as living accommodations.\nThe activity of holding real property shall not include the holding of mineral property.\nRules similar to the rules of subparagraphs (B) and (C) of paragraph (3) shall apply for purposes of this paragraph.\nThe Secretary shall prescribe regulations under which activities described in subparagraph (A) shall be aggregated or treated as separate activities.\nIn the case of an activity described in subparagraph (A), subsection (b)(3) shall apply only to the extent provided in regulations prescribed by the Secretary.\nFor purposes of subparagraph (A), a corporation shall not be considered to be actively engaged in equipment leasing unless 50 percent or more of the gross receipts of the corporation for the taxable year is attributable, under regulations prescribed by the Secretary, to equipment leasing.\nFor purposes of subparagraph (A), the component members of a controlled group of corporations shall be treated as a single corporation.\nDuring the entire year, the group had at least 3 full-time employees substantially all of the services of whom were services directly related to the equipment leasing activity of the qualified leasing members.\nDuring the year, the qualified leasing members in the aggregate entered into at least 5 separate equipment leasing transactions.\nDuring the year, the qualified leasing members in the aggregate had at least $1,000,000 in gross receipts from equipment leasing.\nThe term “equipment leasing” does not include the leasing of master sound recordings, and other similar contractual arrangements with respect to tangible or intangible assets associated with literary, artistic, or musical properties.\nThe terms “controlled group of corporations” and “component member” have the same meanings as when used in section 1563. The determination of the taxable years taken into account with respect to any controlled group of corporations shall be made in a manner consistent with the manner set forth in section 1563.\nFor purposes of clause (iii) of subparagraph (C), there shall not be taken into account any deduction in respect of compensation for personal services rendered by any employee (other than a non-owner employee) of the taxpayer or any member of such employee’s family (within the meaning of section 318(a)(1)).\nClause (iii) of subparagraph (C) shall not apply to any insurance business of a qualified life insurance company.\nFor purposes of subclause (I), the term “insurance business” means any business which is not a noninsurance business (within the meaning of section 453B(e)(3)).\nFor purposes of subclause (I), the term “qualified life insurance company” means any company which would be a life insurance company as defined in section 816 if unearned premiums were not taken into account under subsections (a)(2) and (c)(2) of section 816.\nThe term “non-owner employee” means any employee who does not own, at any time during the taxable year, more than 5 percent in value of the outstanding stock of the taxpayer. For purposes of the preceding sentence, section 318 shall apply, except that “5 percent” shall be substituted for “50 percent” in section 318(a)(2)(C).\nA business involving the use, exploitation, sale, lease, or other disposition of property described in subclause (II) of clause (ii) shall not constitute an excluded business by reason of such subclause if the taxpayer is at risk with respect to all amounts paid or incurred (or chargeable to capital account) in such business.\nFor purposes of subclause (II) of clause (ii), the provision of radio, television, cable television, or similar services pursuant to a license or franchise granted by the Federal Communications Commission or any other Federal, State, or local authority shall not constitute an excluded business by reason of such subclause.\nExcept as provided in subparagraph (G), the component members of an affiliated group of corporations shall be treated as a single taxpayer.\nThe term “affiliated group of corporations” means an affiliated group (as defined in section 1504(a)) which files or is required to file consolidated income tax returns.\nThe term “component member” means an includible corporation (as defined in section 1504) which is a member of the affiliated group.\nNothing in this paragraph shall permit any loss of a member of an affiliated group to be used as an offset against the income of any other member of such group which is a personal holding company (as defined in section 542(a)) or a personal service corporation (as defined in section 269A(b) but determined by substituting “5 percent” for “10 percent” in section 269A(b)(2)).\nFor purposes of this section, the term “loss” means the excess of the deductions allowable under this chapter for the taxable year (determined without regard to the first sentence of subsection (a)) and allocable to an activity to which this section applies over the income received or accrued by the taxpayer during the taxable year from such activity (determined without regard to subsection (e)(1)(A)).\n2017—Subsec. (c)(7)(D)(v)(II).  Pub. L. 115–97  substituted “section 453B(e)(3)” for “section 806(b)(3)”.\n2014—Subsec. (c)(3)(A).  Pub. L. 113–295  substituted “This” for “In the case of taxable years beginning after  December 31, 1978 , this”.\n2004—Subsec. (c)(7)(B).  Pub. L. 108–357  inserted “or” at end of cl. (i), redesignated cl. (iii) as (ii), and struck out former cl. (ii) which read as follows: “a foreign personal holding company (as defined in section 552(a)), or”.\n1990—Subsec. (b)(6)(D).  Pub. L. 101–508, §\u202f11813(b)(15) , substituted “49(a)(1)(D)(iv)” for “46(c)(8)(D)(iv)” wherever appearing.\nSubsec. (c)(1)(E).  Pub. L. 101–508, §\u202f11815(b)(3) , substituted “section 613(e)(2)” for “section 613(e)(3)”.\n1986—Subsec. (b)(3)(C).  Pub. L. 99–514, §\u202f201(d)(7)(A) , struck out “defined” after “person” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of subparagraph (A), the term ‘related person’ has the meaning given such term by section 168(e)(4).”\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f503(b) , added par. (6).\nSubsec. (c)(3)(D), (E).  Pub. L. 99–514, §\u202f503(a) , redesignated subpar. (E) as (D) and struck out former subpar. (D) which read as follows: “In the case of activities described in subparagraph (A), the holding of real property (other than mineral property) shall be treated as a separate activity, and subsection (a) shall not apply to losses from such activity. For purposes of the preceding sentence, personal property and services which are incidental to making real property available as living accommodations shall be treated as part of the activity of holding such real property.”\nSubsec. (c)(7)(D)(v)(II).  Pub. L. 99–514, §\u202f1011(b)(1) , substituted “section 806(b)(3)” for “section 806(c)(3)”.\n1984—Subsec. (a)(1)(B).  Pub. L. 98–369, §\u202f721(x)(2) , substituted “a C corporation” for “a corporation”.\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f432(c) , designated existing provisions as subpar. (A), in subpar. (A) as so designated struck out subpar. designations “(A)” and “(B)” and substituted provisions that, except as provided by regulation, amounts borrowed shall not be considered to be at risk if such amounts are borrowed from any person who has an interest in the activity or from a related person to a person (other than the taxpayer) having such an interest for provision that such amounts would not be considered to be at risk if borrowed from a person who had an interest (other than as a creditor) in such activity or who had a relationship to the taxpayer specified in  section 267(b) of this title , and added subpars. (B) and (C).\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f432(b) , designated existing provisions as subpar. (A), in subpar. (A) as so designated, redesignated former subpars. (A) to (E) as cls. (i) to (v), respectively, struck out provision that a partner’s interest in a partnership or a shareholder’s interest in an S corporation had to be treated as a single activity to the extent that the partnership or the S corporation was engaged in activities described in any subparagraph of this paragraph, and added subpar. (B).\nSubsec. (c)(7).  Pub. L. 98–369, §\u202f432(a) , added par. (7).\n1982—Subsec. (a)(1).  Pub. L. 97–354, §\u202f5(a)(31)(A) , redesignated subpar. (C) as (B). Former subpar. (B), relating to an electing small business corporation, was struck out.\nSubsec. (a)(3).  Pub. L. 97–354, §\u202f5(a)(31)(B) , substituted “paragraph (1)(B)” for “paragraph (1)(C)” in heading and text.\nSubsec. (c)(2).  Pub. L. 97–354, §\u202f5(a)(31)(C) , substituted “an S corporation” for “an electing small business corporation” the first place appearing and “the S corporation” for “an electing small business corporation” the second place appearing.\nSubsec. (c)(3)(B)(ii).  Pub. L. 97–354, §\u202f5(a)(31)(D) , substituted “an S corporation” for “electing small business corporation (as defined in section 1371(b))”.\nSubsec. (c)(4)(A).  Pub. L. 97–354, §\u202f5(a)(31)(E) , substituted “subsection (a)(1)(B)” for “subsection (a)(1)(C)”.\n1980—Subsec. (a)(1)(C), (3).  Pub. L. 96–222, §\u202f102(a)(1)(A) , struck out in par. (1)(C) “(determined by reference to the rules contained in section 318 rather than under section 544)” after “of section 542(a)” and added par. (3).\nSubsec. (b)(5).  Pub. L. 96–222, §\u202f102(a)(1)(D)(iii) , substituted “to which subsection (a) applies” for “to which this section applies”.\nSubsec. (c)(3)(D).  Pub. L. 96–222, §\u202f102(a)(1)(D)(ii) , struck out provisions relating to equipment leasing by closely-held corporations.\nSubsec. (c)(4) to (6).  Pub. L. 96–222, §\u202f102(a)(1)(D)(i) , added pars. (4) to (6).\nSubsec. (d).  Pub. L. 96–222, §\u202f102(a)(1)(B) , inserted “(determined without regard to subsection (e)(1)(A)” after “from such activity”.\nSubsec. (e)(2)(A).  Pub. L. 96–222, §\u202f102(a)(1)(C) , inserted “by reason of losses” after “with respect to the activity”.\n1978— Pub. L. 95–600, §\u202f201(c)(1) , substituted “Deductions limited to amount at risk” for “Deductions limited to amount at risk in case of certain activities” in section catchline.\nSubsec. (a).  Pub. L. 95–600, §\u202f202 , redesignated existing provisions as par. (1), substituted provisions relating to limitations with respect to an individual, an electing small business corporation defined under  section 1371(b) of this title , and a corporation meeting the stock ownership requirements of  section 542(a)(2) of this title  and the rules of  section 318 of this title , for provisions relating to limitations with respect to a taxpayer other than a corporation which is neither an electing small business corporation defined under  section 1371(b) of this title , nor a personal holding company defined under  section 542 of this title , and added par. (2).\nSubsec. (c)(1)(E).  Pub. L. 95–618, §\u202f402(d)(1) , added subpar. (E).\nSubsec. (c)(2)(E).  Pub. L. 95–618, §\u202f402(d)(2) , added subpar. (E).\nSubsec. (c)(3).  Pub. L. 95–600, §\u202f201(a) , added par. (3).\nSubsec. (d).  Pub. L. 95–600, §\u202f701(k)(2) , substituted “(determined without regard to the first sentence of subsection (a))” for “(determined without regard to this section)”.\nSubsec. (e).  Pub. L. 95–600, §\u202f203 , added subsec. (e).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as a note under  section 453B of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  section 11813(b)(15) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  section 201(d)(7)(A) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(7)(A) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nPub. L. 99–514, title V, §\u202f503(c) ,  Oct. 22, 1986 ,  100 Stat. 2244 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to losses incurred after  December 31, 1986 , with respect to property placed in service by the taxpayer after  December 31, 1986 . \n \n “(2)   Special rule for losses of s corporation, partnership, or pass-thru entity .— In the case of an interest in an S corporation, a partnership, or other pass-thru entity acquired after  December 31, 1986 , the amendments made by this section shall apply to losses after  December 31, 1986 , which are attributable to property placed in service by the S corporation, partnership, or pass-thru entity on, before, or after  January 1, 1986 . \n \n “(3)   Special rule for athletic stadium .— The amendments made by this section shall not apply to any losses incurred by a taxpayer with respect to the holding of a multi-use athletic stadium in Pittsburgh, Pennsylvania, which the taxpayer acquired in a sale for which a letter of understanding was entered into before  April 16, 1986 .”\nAmendment by  section 1011(b)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1011(c)(1) of Pub. L. 99–514 , set out as a note under  section 453B of this title .\nPub. L. 98–369, div. A, title IV, §\u202f432(d) ,  July 18, 1984 ,  98 Stat. 815 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1983 ; except that any loss from an activity described in section 465(c)(7)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this section) which (but for the amendments made by this section) would have been treated as a deduction for the taxpayer’s first taxable year beginning after  December 31, 1983 , under section 465(a)(2) of such Code shall be allowed as a deduction for such first taxable year notwithstanding such amendments.”\nAmendment by  section 721(x)(2) of Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 95–618  applicable with respect to wells commenced on or after  Oct. 1, 1978 , in taxable years ending on or after such date, see  section 402(e) of Pub. L. 95–618 , set out as a note under  section 263 of this title .\nPub. L. 95–600, title II, §\u202f204(a) ,  Nov. 6, 1978 ,  92 Stat. 2817 , provided that:  “The amendments made by this subtitle [amending this section and  section 704 of this title  and enacting provisions set out as notes under this section and  section 704 of this title ] shall apply to taxable years beginning after  December 31, 1978 .”\nPub. L. 95–600, title VII, §\u202f701(k)(3) ,  Nov. 6, 1978 ,  92 Stat. 2906 , provided that:  “The amendments made by this subsection [amending this section and provisions set out below] shall take effect on  October 4, 1976 .”\nPub. L. 94–455, title II, §\u202f204(c) ,  Oct. 4, 1976 ,  90 Stat. 1532 , as amended by  Pub. L. 95–600, title VII, §\u202f701(k)(1) ,  Nov. 6, 1978 ,  92 Stat. 2906 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [enacting this section] shall apply to losses attributable to amounts paid or incurred in taxable years beginning after  December 31, 1975 . For purposes of this subsection, any amount allowed or allowable for depreciation or amortization for any period shall be treated as an amount paid or incurred in such period. \n \n “(2)   Special transitional rules for movies and video tapes.— “(A)   In general .— In the case of any activity described in section 465(c)(1)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the amendments made by this section shall not apply to— “(i)  deductions for depreciation or amortization with respect to property the principal production of which began before  September 11, 1975 , and for the purchase of which there was on  September 11, 1975 , and at all times thereafter a binding contract, and \n \n “(ii)  deductions attributable to producing or distributing property the principal production of which began before  September 11, 1975 . \n \n \n “(B)   Exception for certain agreements where principal photography begin before 1976 .— In the case of any activity described in section 465(c)(1)(A) of the Internal Revenue Code of 1986, the amendments made by this section shall not apply to deductions attributable to the producing of a film the principal photography of which began on or before  December 31, 1975 , if— “(i)  on  September 10, 1975 , there was an agreement with the director or a principal motion picture star, or on or before  September 10, 1975 , there had been expended (or committed to the production) an amount not less than the lower of $100,000 or 10 percent of the estimated costs of producing the film, and \n \n “(ii)  the production takes place in the United States. \n \n \n\n Subparagraph (A) shall apply only to taxpayers who held their interests on  September 10, 1975 . Subparagraph (B) shall apply only to taxpayers who held their interests on  December 31, 1975 . \n \n “(3)   Special transitional rules for leasing activities.— “(A)   Rule for leases other than operating leases .— In the case of any activity described in section 465(c)(1)(C) of the Internal Revenue Code of 1986, the amendments made by this section shall not apply with respect to— “(i)  leases entered into before  January 1, 1976 , and \n \n “(ii)  leases where the property was ordered by the lessor or lessee before  January 1, 1976 . \n \n \n “(B)   Holding of interests for purposes of subparagraph (a) .— Subparagraph (A) shall apply only to taxpayers who held their interests in the property on  December 31, 1975 . \n \n “(C)   Special rule for operating leases .— In the case of a lease described in section 46(e)(3)(B) of the Internal Revenue Code of 1986— “(i)  subparagraph (A) shall be applied by substituting ‘ May 1, 1976 ’ for ‘ January 1, 1976 ’ each place it appears therein, and \n \n “(ii)  subparagraph (B) shall be applied by substituting ‘ April 30, 1976 ’ for ‘ December 31, 1975 ’.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 95–600, title II, §\u202f204(b) ,  Nov. 6, 1978 ,  92 Stat. 2817 , as amended by  Pub. L. 96–222, title I, §\u202f102(a)(1)(E) ,  Apr. 1, 1980 ,  94 Stat. 208 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Recapture provisions .— If the amount for which the taxpayer is at risk in any activity as of the close of the taxpayer’s last taxable year beginning before  January 1, 1979 , is less than zero, section 465(e)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by section 203 of this Act) shall be applied with respect to such activity of the taxpayer by substituting such negative amount for zero. \n \n “(2)   Special transitional rules for leasing activities.— “(A)   Rule for leases .— In the case of any activity described in section 465(c)(1)(C) of such Code in which a corporation described in section 465(a)(1)(C) of such Code is engaged, the amendments made by this subtitle [amending sections 465 and 704 of this title and enacting provisions set out as notes under sections 465 and 704 of this title] shall not apply with respect to— “(i)  leases entered into before  November 1, 1978 , and \n \n “(ii)  leases where the property was ordered by the lessor or lessee before  November 1, 1978 . \n \n \n “(B)   Holding of interests for purposes of subparagraph (a) .— Subparagraph (A) shall apply only to taxpayers who held their interests in the property on  October 31, 1978 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Section, added  Pub. L. 95–600, title III, §\u202f373(a) ,  Nov. 6, 1978 ,  92 Stat. 2863 ; amended  Pub. L. 96–222, title I, §\u202f103(a)(16) ,  Apr. 1, 1980 ,  94 Stat. 214 , related to qualified discount coupons redeemed after close of taxable year.\nPub. L. 99–514, title VIII, §\u202f823(c) ,  Oct. 22, 1986 ,  100 Stat. 2374 , provided: \n “(1)   In general .— The amendments made by this section [amending  section 461 of this title  and repealing this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Change in method of accounting .— In the case of any taxpayer who elected to have section 466 of the Internal Revenue Code of 1954 [now 1986] apply for such taxpayer’s last taxable year beginning before  January 1, 1987 , and is required to change its method of accounting by reason of the amendments made by this section for any taxable year— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as having been made with the consent of the Secretary, and \n \n “(C)  the net amount of adjustments required by section 481 of the Internal Revenue Code of 1986 to be taken into account by the taxpayer shall— “(i)  be reduced by the balance in the suspense account under section 466(e) of such Code as of the close of such last taxable year, and \n \n “(ii)  be taken into account over a period not longer than 4 years.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'In the case of any section 467 rental agreement to which this paragraph applies, the portion of the rent which accrues during any taxable year shall be that portion of the constant rental amount with respect to such agreement which is allocable to such taxable year.\nFor purposes of this subsection, the term “leaseback or long-term agreement” means any agreement described in subsection (b)(4)(A).\nThe term “constant rental amount” means, with respect to any section 467 rental agreement, the amount which, if paid as of the close of each lease period under the agreement, would result in an aggregate present value equal to the present value of the aggregate payments required under the agreement.\nA transaction is a leaseback transaction if it involves a leaseback to any person who had an interest in such property at any time within 2 years before such leaseback (or to a related person).\nIn the case of property to which section 168 does not apply, subparagraph (A) shall be applied as if section 168 applies to such property.\nFor purposes of computing present value and interest under subsection (a)(2), the rate used shall be equal to 110 percent of the applicable Federal rate determined under section 1274(d) (compounded semiannually) which is in effect at the time the agreement is entered into with respect to debt instruments having a maturity equal to the term of the agreement.\nThe term “related person” has the meaning given to such term by section 465(b)(3)(C).\nExcept as provided in regulations prescribed by the Secretary, there shall not be taken into account in computing the term of any agreement for purposes of this section any extension which is solely at the option of the lessee.\nUnder regulations prescribed by the Secretary, rules comparable to the rules of this section shall also apply in the case of any agreement where the amount paid under the agreement for the use of property decreases during the term of the agreement.\nUnder regulations prescribed by the Secretary, rules comparable to the rules of subsection (a)(2) shall also apply in the case of payments for services which meet requirements comparable to the requirements of subsection (d). The preceding sentence shall not apply to any amount to which section 404 or 404A (or any other provision specified in regulations) applies.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations providing for the application of this section in the case of contingent payments.\n2003—Subsec. (c)(5)(C).  Pub. L. 108–27  struck out “,\u2000341(e)(12),” after “170(e)”.\n1988—Subsec. (c)(5)(C).  Pub. L. 100–647, §\u202f1005(c)(10) , made technical correction to directory language of  Pub. L. 99–514, §\u202f511(d)(2)(A) . See 1986 Amendment note below.\nSubsec. (e)(3)(A).  Pub. L. 100–647, §\u202f1002(i)(2)(H) , at end of table inserted item relating to any railroad grading or tunnel bore.\n1986—Subsec. (b)(4)(A).  Pub. L. 99–514, §\u202f1807(b)(2)(A) , substituted “statutory recovery period” for “statutory recover period”.\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f1807(b)(2)(B) , substituted “subsection (b)(4)(A)” for “subsection (b)(3)(A)”.\nSubsec. (c)(5)(C).  Pub. L. 99–514, §\u202f631(e)(10) , struck out “453B(d)(2),” after “341(e)(12),”.\nPub. L. 99–514, §\u202f511(d)(2)(A) , as amended by  Pub. L. 100–647, §\u202f1005(c)(10) , struck out “163(d),” after “sections”.\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1807(b)(2)(C) , substituted “section 1274(c)(4)(C)” for “section 1274(c)(2)(C)”.\nSubsec. (e)(3)(A).  Pub. L. 99–514, §\u202f201(d)(8)(A) , in amending subpar. (A) generally, included in table 7-year property, 15-year and 20-year property, and residential rental property and nonresidential real property having recovery periods of 7, 15, and 19 years, respectively, and struck out from table low-income housing, 15-year public utility property, and 19-year real property having recovery periods of 15, 15, and 19 years, respectively.\nPub. L. 99–514, §\u202f1879(f)(1) , substituted “19-year real property” and “19 years” for “18-year real property” and “18 years”, respectively.\nSubsec. (e)(3)(B).  Pub. L. 99–514, §\u202f201(d)(8)(A) , in amending subpar. (B) generally, substituted in heading “not depreciable under section 168” for “which is not recovery property” and in text “In the case of property to which section 168 does not apply, subparagraph (A) shall be applied as if section 168 applies to such property.” for “In the case of any property, which is not recovery property, subparagraph (A) shall be applied as if such property were recovery property.”\nSubsec. (e)(5).  Pub. L. 99–514, §\u202f201(d)(8)(B) , substituted “section 465(b)(3)(C)” for “section 168(e)(4)(D)”.\nPub. L. 99–514, §\u202f1807(b)(2)(D) , substituted “section 168(e)(4)(D)” for “section 168(d)(4)(D)”.\nSubsec. (g).  Pub. L. 99–514, §\u202f1807(b)(1) , inserted at end “The preceding sentence shall not apply to any amount to which section 404 or 404A (or any other provision specified in regulations) applies.”\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(8) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(8) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 511(d)(2)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 511(e) of Pub. L. 99–514 , set out as a note under  section 163 of this title .\nAmendment by  section 631(e)(10) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 1807(b) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(f)(2) ,  Oct. 22, 1986 ,  100 Stat. 2906 , provided that:  “The amendments made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by  section 103 of Public Law 99–121 .”\nPub. L. 98–369, div. A, title I, §\u202f92(c) ,  July 18, 1984 ,  98 Stat. 612 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section] shall apply with respect to agreements entered into after  June 8, 1984 . \n \n “(2)   Exceptions .— The amendments made by this section shall not apply— “(A)  to any agreement entered into pursuant to a written agreement which was binding on  June 8, 1984 , and at all times thereafter, \n \n “(B)  subject to the provisions of paragraph (3), to any agreement to lease property if— “(i)  there was in effect a firm plan, evidenced by a board of directors’ resolution, memorandum of agreement, or letter of intent on  March 15, 1984 , to enter into such an agreement, and \n \n “(ii)  construction of the property was commenced (but such property was not placed in service) on or before  March 15, 1984 , and \n \n \n “(C)  to any agreement to lease property if— “(i)  the lessee of such property adopted a firm plan to lease the property, evidenced by a resolution of the Finance Committee of the Board of Directors of such lessee, on  February 10, 1984 , \n \n “(ii)  the sum of the present values of the rents payable by the lessee under the lease at the inception thereof equals at least $91,223,034, assuming for purposes of this clause— “(I)  the annual discount rate is 12.6 percent, \n \n “(II)  the initial payment of rent occurs 12 months after the commencement of the lease, and \n \n “(III)  subsequent payments of rents occur on the anniversary date of the initial payment, and \n \n \n “(iii)  during— “(I)  the first 5 years of the lease, at least 9 percent of the rents payable by the lessee under the agreement are paid, and \n \n “(II)  the second 5 years of the lease, at least 16.25 percent of the rents payable by the lessee under the agreement are paid. \n \n\n \u2001\u2001Paragraph (3)(B)(ii)(II) shall apply for purposes of clauses (ii) and (iii) of subparagraph (C), as if, as of the beginning of the last stage, the separate agreements were treated as 1 single agreement relating to all property covered by the agreements, including any property placed in service before the property to which the agreement for the last stage relates. If the lessor under the agreement described in subparagraph (C) leases the property from another person, this exception shall also apply to any agreement between the lessor and such person which is integrally related to, and entered into at the same time as, such agreement, and which calls for comparable payments of rent over the primary term of the agreement. \n \n \n \n “(3)   Schedule of deemed rental payments.— “(A)   In general .— In any case to which paragraph (2)(B) applies, for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the lessor shall be treated as having received or accrued (and the lessee shall be treated as having paid or incurred) rents equal to the greater of— “(i)  the amount of rents actually paid under the agreement during the taxable year, or \n \n “(ii)  the amount of rents determined in accordance with the schedule under subparagraph (B) for such taxable year. \n \n \n “(B)   Schedule.— “(i)   In general .— The schedule under this subparagraph is as follows: \n \n \n \n \n \n \n \u2001“Portion of lease term: Cumulative percentage of total rent deemed paid: \n \n \n 1st ⅕ 10\u202f\u202f \n 2nd ⅕ 25\u202f\u202f \n 3rd ⅕ 45\u202f\u202f \n 4th ⅕ 70\u202f\u202f \n Last ⅕ 100. \n \n \n \n \n “(ii)   Operating rules .— For purposes of this schedule— “(I)  the rent allocable to each taxable year within any portion of a lease term described in such schedule shall be a level pro rata amount properly allocable to such taxable year, and \n \n “(II)  any agreement relating to property which is to be placed in service in 2 or more stages shall be treated as 2 or more separate agreements. \n \n \n \n “(C)   Paragraph not to apply .— This paragraph shall not apply to any agreement if the sum of the present values of all payments under the agreement is greater than the sum of the present value of all the payments deemed to be paid or received under the schedule under subparagraph (B). For purposes of computing any present value under this subparagraph, the annual discount rate shall be equal to 12 percent, compounded semiannually.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'The opening balance of any reserve for its first taxable year shall be zero.\nAny amount paid by the taxpayer during any taxable year for qualified reclamation or closing costs allocable to portions of the reserve property for which the election under paragraph (1) was in effect shall be charged to the appropriate reserve as of the close of the taxable year.\nA reserve shall be increased each taxable year by the amount allowable as a deduction under paragraph (1) for such taxable year which is allocable to such reserve.\nThis paragraph shall be applied after all adjustments to the reserve have been made for the taxable year.\nIf the election under subsection (a)(1) is not in effect for 1 or more taxable years in which the reserved property is disturbed (or production occurs), items with respect to the reserve property shall be allocated to the reserve in such manner as the Secretary may prescribe by regulations.\nThe taxpayer may revoke an election under subsection (a)(1) with respect to any property. Such revocation, once made, shall be irrevocable.\nAny revocation under subparagraph (A) shall be made at such time and in such manner as the Secretary may prescribe.\nThe term “current reclamation costs” means the amount which the taxpayer would be required to pay for qualified reclamation costs if the reclamation activities were performed currently.\nThe term “current closing costs” means the amount which the taxpayer would be required to pay for qualified closing costs if the closing activities were performed currently.\nClause (i) shall not apply to that portion of any property which is disturbed after the property is listed in the national contingency plan established under section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.\nThe term “property” has the meaning given such term by section 614.\nThe term “reserve property” means any property with respect to which a reserve is established under subsection (a)(1).\nThe Surface Mining Control and Reclamation Act of 1977, referred to in subsec. (d)(2)(A), is  Pub. L. 95–87 ,  Aug. 3, 1977 ,  91 Stat. 445 . Title V of that Act is classified generally to subchapter V (§\u202f1251 et seq.) of chapter 25 of Title 30, Mineral Lands and Mining. Sections 511 and 528 of that Act are classified to sections 1261 and 1278, respectively, of Title 30. For complete classification of this Act to the Code, see Short Title note set out under  section 1201 of Title 30  and Tables.\nThe Solid Waste Disposal Act, referred to in subsec. (d)(2)(B)(i), is title II of  Pub. L. 89–272 ,  Oct. 20, 1965 ,  79 Stat. 997 , as amended generally by  Pub. L. 94–580, §\u202f2 ,  Oct. 21, 1976 ,  90 Stat. 2795 , which is classified generally to chapter 82 (§\u202f6901 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 6901 of Title 42  and Tables.\nSection 105 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, referred to in subsec. (d)(2)(B)(ii), is classified to  section 9605 of Title 42 .\n1990—Subsec. (a)(2)(B).  Pub. L. 101–508  amended subpar. (B) generally, substituting present provisions for provisions providing for increase for interest and a phase-in of interest rates for taxable years ending before 1987.\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1807(a)(3)(C) , substituted “this section” for “this subsection”.\nSubsec. (a)(2)(D).  Pub. L. 99–514, §\u202f1807(a)(3)(A) , added subpar. (D).\nSubsec. (d)(2)(B)(ii).  Pub. L. 99–514, §\u202f1899A(14) , substituted “Comprehensive Environmental Response, Compensation, and Liability Act of 1980” for “Comprehensive Environmental, Compensation, and Liability Act of 1980”.\nAmendment by section 1807(a)(3)(A), (C) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection effective  July 18, 1984 , with respect to taxable years ending after such date, except as otherwise provided, see  section 91(g)(4) of Pub. L. 98–369 , as amended, set out as an Effective Date of 1984 Amendment note under  section 461 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'If the taxpayer elects the application of this section, there shall be allowed as a deduction for any taxable year the amount of payments made by the taxpayer to a Nuclear Decommissioning Reserve Fund (hereinafter referred to as the “Fund”) during such taxable year.\nThe amount which a taxpayer may pay into the Fund for any taxable year shall not exceed the ruling amount applicable to such taxable year.\nIn addition to any deduction under subsection (a), there shall be allowable as a deduction for any taxable year the amount of the nuclear decommissioning costs with respect to which economic performance (within the meaning of section 461(h)(2)) occurs during such taxable year.\nNo deduction shall be allowed for any payment to the Fund unless the taxpayer requests, and receives, from the Secretary a schedule of ruling amounts. For purposes of the preceding sentence, the taxpayer shall request a schedule of ruling amounts upon each renewal of the operating license of the nuclear powerplant.\nThe Secretary shall at least once during the useful life of the nuclear powerplant (or, more frequently, upon the request of the taxpayer) review, and revise if necessary, the schedule of ruling amounts determined under paragraph (1).\nEach taxpayer who elects the application of this section shall establish a Nuclear Decommissioning Reserve Fund with respect to each nuclear powerplant to which such election applies.\nThe tax imposed by subparagraph (A) shall be in lieu of any other taxation under this subtitle of the income from assets in the Fund.\nExcept as provided in subsection (f), the Fund shall not accept any payments (or other amounts) other than payments with respect to which a deduction is allowable under subsection (a).\nUnder regulations prescribed by the Secretary, for purposes of section 4951 (and so much of this title as relates to such section), the Fund shall be treated in the same manner as a trust described in section 501(c)(21).\nIn any case in which the Fund violates any provision of this section or section 4951, the Secretary may disqualify such Fund from the application of this section. In any case to which this paragraph applies, the Fund shall be treated as having distributed all of its funds on the date such determination takes effect.\nUpon substantial completion of the nuclear decommissioning of the nuclear powerplant with respect to which a Fund relates, the taxpayer shall terminate such Fund.\nNotwithstanding subsection (b), any taxpayer maintaining a Fund to which this section applies with respect to a nuclear power plant may transfer into such Fund not more than an amount equal to the present value of the portion of the total nuclear decommissioning costs with respect to such nuclear power plant previously excluded for such nuclear power plant under subsection (d)(2)(A) as in effect immediately before the date of the enactment of this subsection.\nExcept as provided in subparagraph (C), the deduction allowed by subsection (a) for any transfer permitted by this subsection shall be allowed ratably over the remaining estimated useful life (within the meaning of subsection (d)(2)(A)) of the nuclear power plant beginning with the taxable year during which the transfer is made.\nNo deduction shall be allowed for any transfer under this subsection of an amount for which a deduction was previously allowed to the taxpayer (or a predecessor) or a corresponding amount was not included in gross income of the taxpayer (or a predecessor). For purposes of the preceding sentence, a ratable portion of each transfer shall be treated as being from previously deducted or excluded amounts to the extent thereof.\nNo gain or loss shall be recognized on any transfer described in paragraph (1).\nIf appreciated property is transferred in a transfer described in paragraph (1), the amount of the deduction shall not exceed the adjusted basis of such property.\nParagraph (1) shall not apply to any transfer unless the taxpayer requests from the Secretary a new schedule of ruling amounts in connection with such transfer.\nNotwithstanding any other provision of law, the taxpayer’s basis in any Fund to which this section applies shall not be increased by reason of any transfer permitted by this subsection.\nFor purposes of this section, the term “nuclear powerplant” includes any unit thereof.\nFor purposes of this section, a taxpayer shall be deemed to have made a payment to the Fund on the last day of a taxable year if such payment is made on account of such taxable year and is made within 2½ months after the close of such taxable year.\nThe date of the enactment of this subsection, referred to in subsec. (f)(1), is the date of enactment of  Pub. L. 109–58 , which was approved  Aug. 8, 2005 .\n2005—Subsec. (b).  Pub. L. 109–58, §\u202f1310(a) , reenacted heading without change and amended text of subsec. (b) generally. Prior to amendment, text read as follows: “The amount which a taxpayer may pay into the Fund for any taxable year shall not exceed the lesser of—\n“(1) the amount of nuclear decommissioning costs allocable to the Fund which is included in the taxpayer’s cost of service for ratemaking purposes for such taxable year, or\n“(2) the ruling amount applicable to such taxable year.”\nSubsec. (d)(1).  Pub. L. 109–58, §\u202f1310(c) , inserted at end “For purposes of the preceding sentence, the taxpayer shall request a schedule of ruling amounts upon each renewal of the operating license of the nuclear powerplant.”\nSubsec. (d)(2)(A).  Pub. L. 109–58, §\u202f1310(b)(2) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “fund that portion of the nuclear decommissioning costs of the taxpayer with respect to the nuclear powerplant which bears the same ratio to the total nuclear decommissioning costs with respect to such nuclear powerplant as the period for which the Fund is in effect bears to the estimated useful life of such nuclear powerplant, and”.\nSubsec. (e)(2)(A).  Pub. L. 109–58, §\u202f1310(e)(1) , substituted “rate of 20 percent” for “rate set forth in subparagraph (B)” in introductory provisions.\nSubsec. (e)(2)(B) to (D).  Pub. L. 109–58, §\u202f1310(e)(2) , (3), redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out heading and text of former subpar. (B). Text read as follows: “For purposes of subparagraph (A), the rate set forth in this subparagraph is—\n“(i) 22 percent in the case of taxable years beginning in calendar year 1994 or 1995, and\n“(ii) 20 percent in the case of taxable years beginning after  December 31, 1995 .”\nSubsec. (e)(3).  Pub. L. 109–58, §\u202f1310(d) , substituted “Except as provided in subsection (f), the Fund” for “The Fund”.\nSubsecs. (f) to (h).  Pub. L. 109–58, §\u202f1310(b)(1) , added subsec. (f) and redesignated former subsecs. (f) and (g) as (g) and (h), respectively.\n1996—Subsec. (e)(2)(A).  Pub. L. 104–188  provided that the amendment made by  section 1917(b)(1) of Pub. L. 102–486  shall be applied as if “at a rate” appeared instead of “at the rate” in the material proposed to be stricken. See 1992 Amendment note below.\n1992—Subsec. (e)(2)(A).  Pub. L. 102–486, §\u202f1917(b)(1) , which directed that subpar. (A) be amended by striking “at the rate equal to the highest rate of tax specified in section 11(b)” and inserting “at the rate set forth in subparagraph (B)”, was executed by making the substitution for “at a rate equal to the highest rate of tax specified in section 11(b)”. See 1996 Amendment note above.\nSubsec. (e)(2)(B) to (D).  Pub. L. 102–486, §\u202f1917(b)(2) , added subpar. (B) and redesignated former subpars. (B) and (C) as (C) and (D), respectively.\nSubsec. (e)(4)(C).  Pub. L. 102–486, §\u202f1917(a) , struck out before period at end “described in section 501(c)(21)(B)(ii)”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1807(a)(4)(E)(i) , substituted “this section” for “this subsection”.\nSubsec. (c)(1)(A).  Pub. L. 99–514, §\u202f1807(a)(4)(B) , substituted “subsection (e)(4)(B)” for “subsection (e)(2)(B)”.\nSubsec. (d).  Pub. L. 99–514, §\u202f1807(a)(4)(E)(ii) , substituted “this section” for “this subsection” in introductory text.\nSubsec. (e).  Pub. L. 99–514, §\u202f1807(a)(4)(E)(iii) , substituted “Reserve Fund” for “Trust Fund” in heading.\nSubsec. (e)(1).  Pub. L. 99–514, §\u202f1807(a)(4)(E)(iv) , substituted “this section” for “this subsection” and “Reserve Fund” for “Trust Fund”.\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f1807(a)(4)(C) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “There is imposed on the gross income of the Fund for any taxable year a tax at a rate equal to the maximum rate in effect under section 11(b), except that—\n“(A) there shall not be included in the gross income of the Fund any payment to the Fund with respect to which a deduction is allowable under subsection (a), and\n“(B) there shall be allowed as a deduction any amount paid by the Fund described in paragraph (4)(B) (other than to the taxpayer).”\nSubsec. (e)(4)(C).  Pub. L. 99–514, §\u202f1807(a)(4)(D) , added subpar. (C).\nSubsec. (e)(6).  Pub. L. 99–514, §\u202f1807(a)(4)(E)(v) , substituted “this section” for “this subsection” in two places and “this paragraph” for “this subparagraph”.\nSubsec. (f).  Pub. L. 99–514, §\u202f1807(a)(4)(E)(vi) , substituted “For purposes of this section, the” for “The”.\nSubsec. (g).  Pub. L. 99–514, §\u202f1807(a)(4)(A)(i) , added subsec. (g).\nPub. L. 109–58, title XIII, §\u202f1310(f) ,  Aug. 8, 2005 ,  119 Stat. 1009 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 102–486, title XIX, §\u202f1917(c) ,  Oct. 24, 1992 ,  106 Stat. 3025 , provided that: \n “(1)   Subsection  (a).— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1992 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1993 . Section 15 of the Internal Revenue Code of 1986 shall not apply to any change in rate resulting from the amendment made by subsection (b).”\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection effective  July 18, 1984 , with respect to taxable years ending after such date, see  section 91(g)(5) of Pub. L. 98–369 , as amended, set out as an Effective Date of 1984 Amendment note under  section 461 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1807(a)(4)(A)(ii) ,  Oct. 22, 1986 ,  100 Stat. 2812 , provided that:  “To the extent provided in regulations prescribed by the Secretary of the Treasury or his delegate, subsection (g) of section 468A of the Internal Revenue Code of 1954 [now 1986] (as added by clause (i)) shall be applied with respect to any payment on account of a taxable year beginning before  January 1, 1987 , as if it did not contain the requirement that the payment be made within 2½ months after the close of the taxable year. Such regulations may provide that, to the extent such payment to the Fund is made more than 2½ months after the close of the taxable year, any adjustment to the tax attributable to such payment shall not affect the amount of interest payable with respect to periods before the payment is made. Such regulations may provide appropriate adjustments to the deduction allowed under such section 468A for any such taxable year to take into account the fact that the payment to the Fund is made more than 2½ months after the close of the taxable year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'For purposes of section 461(h), economic performance shall be deemed to occur as qualified payments are made by the taxpayer to a designated settlement fund.\nThere is imposed on the gross income of any designated settlement fund for any taxable year a tax at a rate equal to the maximum rate in effect for such taxable year under section 1(e).\nThe tax imposed by paragraph (1) shall be in lieu of any other taxation under this subtitle of income from assets in the designated settlement fund.\nNo deduction shall be allowable for any qualified payment by the taxpayer of any amounts received from the settlement of any insurance claim to the extent such amounts are excluded from the gross income of the taxpayer.\nThe term “related person” means a person related to the taxpayer within the meaning of section 267(b).\nThis section (other than subsection (g)) shall not apply with respect to any liability of the taxpayer arising under any workers’ compensation Act or any contested liability of the taxpayer within the meaning of section 461(f).\nExcept as provided in regulations, any payment in respect of a liability described in subsection (d)(2)(D) (and not described in subsection (e)) to a trust fund or escrow fund which is not a designated settlement fund shall not be treated as constituting economic performance.\nExcept as provided in paragraph (2), nothing in any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to current income tax. The Secretary shall prescribe regulations providing for the taxation of any such account or fund whether as a grantor trust or otherwise.\nThe Comprehensive Environmental Response, Compensation, and Liability Act of 1980, referred to in subsec. (g)(2)(B), is  Pub. L. 96–510 ,  Dec. 11, 1980 ,  94 Stat. 2767 , which is classified principally to chapter 103 (§\u202f9601 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 9601 of Title 42  and Tables.\n2006—Subsec. (g).  Pub. L. 109–222  reenacted heading without change and amended text of subsec. (g) generally. Prior to amendment, text read as follows: “Nothing in any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to current income tax. The Secretary shall prescribe regulations providing for the taxation of any such account or fund whether as a grantor trust or otherwise.”\nSubsec. (g)(3).  Pub. L. 109–432  struck out heading and text of par. (3). Text read as follows: “Paragraph (2) shall not apply to accounts and funds established after  December 31, 2010 .”\n1990—Subsec. (e).  Pub. L. 101–508  substituted “This section (other than subsection (g))” for “This section”.\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1018(f)(4)(B) , substituted “No other” for “no other” in concluding provisions.\nSubsec. (b)(2)(B).  Pub. L. 100–647, §\u202f1018(f)(4)(A) , substituted “a corporation.” for “the corporation,”.\nSubsec. (d)(1)(A).  Pub. L. 100–647, §\u202f1018(f)(1) , inserted “(or any related person)” after “taxpayer”.\nSubsec. (d)(2)(A).  Pub. L. 100–647, §\u202f1018(f)(2) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is established pursuant to a court order,”.\nSubsec. (d)(2)(E).  Pub. L. 100–647, §\u202f1018(f)(1) , inserted “(or any related person)” after “taxpayer”.\nSubsec. (g).  Pub. L. 100–647, §\u202f1018(f)(5)(A) , added subsec. (g).\nPub. L. 109–432, div. A, title IV, §\u202f409(b) ,  Dec. 20, 2006 ,  120 Stat. 2963 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 201 of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ].”\nPub. L. 109–222, title II, §\u202f201(b) ,  May 17, 2006 ,  120 Stat. 348 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to accounts and funds established after the date of the enactment of this Act [ May 17, 2006 ].”\nAmendment by  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 48 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1807(a)(7)(C) ,  Oct. 22, 1986 ,  100 Stat. 2816 , as amended by  Pub. L. 100–647, title I, §\u202f1018(f)(3) ,  Nov. 10, 1988 ,  102 Stat. 3582 , provided that:  \n “In the case of any settlement fund which is established for claimants against a corporation which filed a petition for reorganization under chapter 11 of title 11, United States Code, on  August 26, 1982 , and which filed with a United States district court a first amended and restated plan of reorganization before  March 1, 1986 — \n “(i)  any portion of such fund which is established pursuant to a court order and with qualified payments, which meets the requirements of subparagraphs (C) and (D) of section 468B(d)(2) of the Internal Revenue Code of 1954 [now 1986] (as added by this paragraph), and with respect to which an election is made under subparagraph (F) thereof, shall be treated as a designated settlement fund for purposes of section 468B of such Code, \n \n “(ii)  such corporation (or any successor thereof) shall be liable for the tax imposed by section 468B of such Code on such portion of the fund (and the fund shall not be liable for such tax), such tax shall be deductible by the corporation, and the rate of tax under section 468B of such Code for any taxable year shall be equal to 15 percent, and \n \n “(iii)  any transaction by any portion of the fund not described in clause (i) shall be treated as a transaction made by the corporation.”\nPub. L. 99–514, title XVIII, §\u202f1807(a)(7)(D) ,  Oct. 22, 1986 ,  100 Stat. 2816 , provided that nothing in any provision of law be construed as providing that an escrow account, settlement fund, or similar fund established after  Aug. 16, 1986 , not be subject to current income tax and that if contributions to such account or fund are not deductible then the account or fund be taxed as a grantor trust, prior to repeal by  Pub. L. 100–647, title I, §\u202f1018(f)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3582 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Except as otherwise provided in this section, any loss or credit from an activity which is disallowed under subsection (a) shall be treated as a deduction or credit allocable to such activity in the next taxable year.\nExcept as provided in paragraph (7), the term “passive activity” includes any rental activity.\nThe term “passive activity” shall not include any working interest in any oil or gas property which the taxpayer holds directly or through an entity which does not limit the liability of the taxpayer with respect to such interest.\nIf any taxpayer has any loss for any taxable year from a working interest in any oil or gas property which is treated as a loss which is not from a passive activity, then any net income from such property (or any property the basis of which is determined in whole or in part by reference to the basis of such property) for any succeeding taxable year shall be treated as income of the taxpayer which is not from a passive activity. If the preceding sentence applies to the net income from any property for any taxable year, any credits allowable under subpart B (other than section 27) or D of part IV of subchapter A for such taxable year which are attributable to such property shall be treated as credits not from a passive activity to the extent the amount of such credits does not exceed the regular tax liability of the taxpayer for the taxable year which is allocable to such net income.\nParagraphs (2) and (3) shall be applied without regard to whether or not the taxpayer materially participates in the activity.\nFor purposes of paragraph (1)(A), the term “trade or business” includes any activity involving research or experimentation (within the meaning of section 174).\nFor purposes of this paragraph, the term “real property trade or business” means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business.\nIn the case of a closely held C corporation, the requirements of subparagraph (B) shall be treated as met for any taxable year if more than 50 percent of the gross receipts of such corporation for such taxable year are derived from real property trades or businesses in which the corporation materially participates.\nFor purposes of subparagraph (B), personal services performed as an employee shall not be treated as performed in real property trades or businesses. The preceding sentence shall not apply if such employee is a 5-percent owner (as defined in section 416(i)(1)(B)) in the employer.\nFor purposes of subparagraph (A), any income, gain, or loss which is attributable to an investment of working capital shall be treated as not derived in the ordinary course of a trade or business.\nEarned income (within the meaning of section 911(d)(2)(A)) shall not be taken into account in computing the income or loss from a passive activity for any taxable year.\nFor purposes of paragraphs (1) and (2), income from dividends shall be reduced by the amount of any dividends received deduction under section 243 or 245.\nIf a taxpayer ceases for any taxable year to be a closely held C corporation or personal service corporation, this section shall continue to apply to losses and credits to which this section applied for any preceding taxable year in the same manner as if such taxpayer continued to be a closely held C corporation or personal service corporation, whichever is applicable.\nIf the taxpayer and the person acquiring the interest bear a relationship to each other described in section 267(b) or section 707(b)(1), then subparagraph (A) shall not apply to any loss of the taxpayer until the taxable year in which such interest is acquired (in a transaction described in subparagraph (A)) by another person who does not bear such a relationship to the tax\xadpayer.\nTo the extent provided in regulations, income or gain from the activity for preceding taxable years shall be taken into account under subparagraph (A)(ii) for the taxable year to the extent necessary to prevent the avoidance of this section.\nIn the case of an installment sale of an entire interest in an activity to which section 453 applies, paragraph (1) shall apply to the portion of such losses for each taxable year which bears the same ratio to all such losses as the gain recognized on such sale during such taxable year bears to the gross profit from such sale (realized or to be realized when payment is completed).\nExcept as provided in regulations, no interest in a limited partnership as a limited partner shall be treated as an interest with respect to which a taxpayer materially participates.\nA taxpayer shall be treated as materially participating in any farming activity for a taxable year if paragraph (4) or (5) of section 2032A(b) would cause the requirements of section 2032A(b)(1)(C)(ii) to be met with respect to real property used in such activity if such taxpayer had died during the taxable year.\nIn determining whether a taxpayer materially participates, the participation of the spouse of the taxpayer shall be taken into account.\nIn the case of any natural person, subsection (a) shall not apply to that portion of the passive activity loss or the deduction equivalent (within the meaning of subsection (j)(5)) of the passive activity credit for any taxable year which is attributable to all rental real estate activities with respect to which such individual actively participated in such taxable year (and if any portion of such loss or credit arose in another taxable year, in such other taxable year).\nThe aggregate amount to which paragraph (1) applies for any taxable year shall not exceed $25,000.\nIn the case of any taxpayer, the $25,000 amount under paragraph (2) shall be reduced (but not below zero) by 50 percent of the amount by which the adjusted gross income of the taxpayer for the taxable year exceeds $100,000.\nIn the case of any portion of the passive activity credit for any taxable year which is attributable to the rehabilitation credit determined under section 47, subparagraph (A) shall be applied by substituting “$200,000” for “$100,000”.\nSubparagraph (A) shall not apply to any portion of the passive activity credit for any taxable year which is attributable to any credit determined under section 42.\nIn the case of taxable years of an estate ending less than 2 years after the date of the death of the decedent, this subsection shall apply to all rental real estate activities with respect to which such decedent actively participated before his death.\nFor purposes of subparagraph (A), the $25,000 amount under paragraph (2) shall be reduced by the amount of the exemption under paragraph (1) (without regard to paragraph (3)) allowable to the surviving spouse of the decedent for the taxable year ending with or within the taxable year of the estate.\nAn individual shall not be treated as actively participating with respect to any interest in any rental real estate activity for any period if, at any time during such period, such interest (including any interest of the spouse of the individual) is less than 10 percent (by value) of all interests in such activity.\nExcept as provided in regulations, no interest as a limited partner in a limited partnership shall be treated as an interest with respect to which the taxpayer actively participates.\nIn determining whether a taxpayer actively participates, the participation of the spouse of the taxpayer shall be taken into account.\nThe term “closely held C corporation” means any C corporation described in section 465(a)(1)(B).\nThe term “regular tax liability” has the meaning given such term by section 26(b).\nThe passive activity loss and the passive activity credit (and the $25,000 amount under subsection (i)) shall be allocated to activities, and within activities, on a pro rata basis in such manner as the Secretary may prescribe.\nThe deduction equivalent of credits from a passive activity for any taxable year is the amount which (if allowed as a deduction) would reduce the regular tax liability for such taxable year by an amount equal to such credits.\nThe passive activity loss of a taxpayer shall be computed without regard to qualified residence interest (within the meaning of section 163(h)(3)).\nThe term “rental activity” means any activity where payments are principally for the use of tangible property.\nFor purposes of determining gain or loss from a disposition of any property to which subsection (g)(1) applies, the transferor may elect to increase the basis of such property immediately before the transfer by an amount equal to the portion of any unused credit allowable under this chapter which reduced the basis of such property for the taxable year in which such credit arose. If the taxpayer elects the application of this paragraph, such portion of the passive activity credit of such taxpayer shall not be allowed for any taxable year.\nIf a passive activity involves the use of a dwelling unit to which section 280A(c)(5) applies for any taxable year, any income, deduction, gain, or loss allocable to such use shall not be taken into account for purposes of this section for such taxable year.\nExcept as provided in regulations, all members of an affiliated group which files a consolidated return shall be treated as 1 corporation.\nThis section shall be applied separately with respect to items attributable to each publicly traded partnership (and subsection (i) shall not apply with respect to items attributable to any such partnership). The preceding sentence shall not apply to any credit determined under section 42, or any rehabilitation credit determined under section 47, attributable to a publicly traded partnership to the extent the amount of any such credits exceeds the regular tax liability attributable to income from such partnership.\nFor purposes of subsection (g), a taxpayer shall not be treated as having disposed of his entire interest in an activity of a publicly traded partnership until he disposes of his entire interest in such partnership.\nFor purposes of this section, a regulated investment company (as defined in section 851) holding an interest in a qualified publicly traded partnership (as defined in section 851(h)) shall be treated as a taxpayer described in subsection (a)(2) with respect to items attributable to such interest.\n2021—Subsec. (i)(3)(E)(ii).  Pub. L. 117–2  substituted “85(c), 135, and 137” for “135 and 137”.\n2020—Subsec. (i)(3)(E)(iii).  Pub. L. 116–260  struck out “222,” after “221,”.\n2018—Subsecs. (c)(3)(B), (d)(2)(A)(ii).  Pub. L. 115–141, §\u202f401(d)(1)(D)(ii) , substituted “27” for “27(a)”.\nSubsec. (i)(3)(C).  Pub. L. 115–141, §\u202f401(d)(5)(B)(i) , redesignated subpar. (D) as (C) and struck out former subpar. (C). Prior to amendment, text of subpar. (C) read as follows: “Subparagraph (A) shall not apply to any portion of the passive activity loss for any taxable year which is attributable to the commercial revitalization deduction under section 1400I.”\nSubsec. (i)(3)(D).  Pub. L. 115–141, §\u202f401(d)(5)(B)(i) , (ii), redesignated subpar. (E) as (D) and amended it generally. Prior to amendment, subpar. related to ordering rules to reflect exceptions and separate phase-outs. Former subpar. (D) redesignated (C).\nSubsec. (i)(3)(E), (F).  Pub. L. 115–141, §\u202f401(d)(5)(B)(i) , redesignated subpar. (F) as (E). Former subpar. (E) redesignated (D).\nSubsec. (i)(6)(B).  Pub. L. 115–141, §\u202f401(d)(5)(B)(iii)(I) , substituted “or rehabilitation credit” for “,\u2000rehabilitation credit, or commercial revitalization deduction” in heading.\nSubsec. (i)(6)(B)(iii).  Pub. L. 115–141, §\u202f401(d)(5)(B)(iii)(II) –(IV), struck out cl. (iii) which read as follows: “any deduction under section 1400I (relating to commercial revitalization deduction).”\n2017—Subsec. (i)(3)(F)(iii).  Pub. L. 115–97, §\u202f14202(b)(3) , substituted “222, and 250” for “and 222”.\nPub. L. 115–97, §\u202f13305(b)(1) , struck out “199,” after “sections”.\n2014—Subsec. (e)(4).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,” after “section 243”.\nSubsec. (m).  Pub. L. 113–295, §\u202f221(a)(60)(A) , struck out subsec. (m) which related to a phase-in of disallowance of losses and credits for interest held before the date of enactment of the Tax Reform Act of 1986.\n2004—Subsec. (i)(3)(F)(iii).  Pub. L. 108–357, §\u202f102(d)(5) , inserted “199,” before “219,”.\nSubsec. (k)(4).  Pub. L. 108–357, §\u202f331(g) , added par. (4).\n2002—Subsec. (i)(3)(E)(ii) to (iv).  Pub. L. 107–147  added cls. (ii) to (iv) and struck out former cls. (ii) to (iv) which read as follows:\n“(ii) second to the portion of the passive activity credit to which subparagraph (B) or (D) does not apply,\n“(iii) third to the portion of such credit to which subparagraph (B) applies,\n“(iv) fourth to the portion of such loss to which subparagraph (C) applies, and”.\n2001—Subsec. (i)(3)(F)(iii).  Pub. L. 107–16  substituted “,\u2000221, and 222” for “and 221”.\n2000—Subsec. (i)(3)(C) to (F).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(b)(1), (2)] , added subpar. (C), redesignated former subpars. (C) to (E) as (D) to (F), respectively, and generally amended heading and text of subpar. (E), as redesignated. Prior to amendment, text read as follows: “If subparagraph (B) or (C) applies for any taxable year, paragraph (1) shall be applied—\n“(i) first to the passive activity loss,\n“(ii) second to the portion of the passive activity credit to which subparagraph (B) or (C) does not apply,\n“(iii) third to the portion of such credit to which subparagraph (B) applies, and\n“(iv) then to the portion of such credit to which subparagraph (C) applies.”\nSubsec. (i)(6)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(b)(3)(B)] , substituted “,\u2000rehabilitation credit, or commercial revitalization deduction” for “or rehabilitation credit” in heading.\nSubsec. (i)(6)(B)(iii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(b)(3)(A)] , added cl. (iii).\n1998—Subsec. (i)(3)(E)(iii).  Pub. L. 105–277  amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “any amount allowable as a deduction under section 219, and”.\n1996—Subsec. (c)(3)(B).  Pub. L. 104–188, §\u202f1704(d)(1) , inserted at end “If the preceding sentence applies to the net income from any property for any taxable year, any credits allowable under subpart B (other than section 27(a)) or D of part IV of subchapter A for such taxable year which are attributable to such property shall be treated as credits not from a passive activity to the extent the amount of such credits does not exceed the regular tax liability of the taxpayer for the taxable year which is allocable to such net income.”\nSubsec. (g)(1)(A).  Pub. L. 104–188, §\u202f1704(e)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If all gain or loss realized on such disposition is recognized, the excess of—\n“(i) the sum of—\n“(I) any loss from such activity for such taxable year (determined after application of subsection (b)), plus\n“(II) any loss realized on such disposition, over\n“(ii) net income or gain for such taxable year from all passive activities (determined without regard to losses described in clause (i)),\nshall be treated as a loss which is not from a passive activity.”\nSubsec. (i)(3)(E)(ii).  Pub. L. 104–188, §\u202f1807(c)(4) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the amount excludable from gross income under section 135,”.\n1993—Subsec. (c)(2).  Pub. L. 103–66, §\u202f13143(b)(1) , substituted “Except as provided in paragraph (7), the” for “The”.\nSubsec. (c)(7).  Pub. L. 103–66, §\u202f13143(a) , added par. (7).\nSubsec. (i)(3)(E)(iv).  Pub. L. 103–66, §\u202f13143(b)(2) , inserted “or any loss allowable by reason of subsection (c)(7)” after “loss”.\n1990—Subsec. (i)(3)(B), (6)(B)(ii).  Pub. L. 101–508, §\u202f11813(b)(16)(A) , substituted “rehabilitation credit determined under section 47” for “rehabilitation investment credit (within the meaning of section 48( o ))”.\nSubsec. (k)(1).  Pub. L. 101–508, §\u202f11813(b)(16)(B) , substituted “rehabilitation credit determined under section 47” for “rehabilitation investment credit (within the meaning of section 48( o ))”.\nSubsec. (m)(3)(A).  Pub. L. 101–508, §\u202f11704(a)(6) , substituted “pre-enactment” for “preenactment”.\n1989—Subsec. (i)(3)(B), (C).  Pub. L. 101–239  added subpars. (B) and (C) and struck out former subpars. (B) and (C) which read as follows:\n“(B)  Special phase-out of low-income housing and rehabilitation credits .—In the case of any portion of the passive activity credit for any taxable year which is attributable to any credit to which paragraph (6)(B) applies, subparagraph (A) shall be applied by substituting ‘$200,000’ for ‘$100,000’.\n“(C)  Ordering rule to reflect separate phase-outs .—If subparagraph (B) applies for any taxable year, paragraph (1) shall be applied—\n“(i) first to the passive activity loss,\n“(ii) second to the portion of the passive activity credit to which subparagraph (B) does not apply, and\n“(iii) then to the portion of such credit to which subparagraph (B) applies.”\nSubsec. (i)(3)(D), (E).  Pub. L. 101–239  added subpar. (D) and redesignated former subpar. (D) as (E).\n1988—Subsec. (e)(1)(A)(ii).  Pub. L. 100–647, §\u202f1005(a)(1) , inserted “not derived in the ordinary course of a trade or business which is” after “gain or loss”.\nSubsec. (g)(1)(A).  Pub. L. 100–647, §\u202f1005(a)(2)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If all gain or loss realized on such disposition is recognized, any loss from such activity which has not previously been allowed as a deduction (and in the case of a passive activity for the taxable year, any loss realized on such disposition) shall not be treated as a passive activity loss and shall be allowable as a deduction against income in the following order:\n“(i) Income or gain from the passive activity for the taxable year (including any gain recognized on the disposition).\n“(ii) Net income or gain for the taxable year from all passive activities.\n“(iii) Any other income or gain.”\nSubsec. (g)(1)(C).  Pub. L. 100–647, §\u202f1005(a)(2)(B) , substituted “Income from prior years” for “Coordination with section 1211” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any loss realized on the disposition of an interest in a passive activity, section 1211 shall be applied before subparagraph (A) is applied.”\nSubsec. (g)(2)(A).  Pub. L. 100–647, §\u202f1005(a)(3) , substituted “paragraph (1)(A)” for “paragraph (1)” and “to losses described in paragraph (1)(A)” for “to such losses”.\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1005(a)(4) , substituted “(realized or to be realized” for “realized (or to be realized)” and “is completed)” for “is completed”.\nSubsec. (h)(4).  Pub. L. 100–647, §\u202f1005(a)(5) , inserted “only” before “if”.\nSubsec. (i)(1).  Pub. L. 100–647, §\u202f1005(a)(6) , substituted “in such taxable year (and if any portion of such loss or credit arose in another taxable year, in such other taxable year)” for “in the taxable year in which such portion of such loss or credit arose”.\nSubsec. (i)(3)(D).  Pub. L. 100–647, §\u202f6009(c)(3) , added cl. (ii) and redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively.\nSubsec. (i)(6)(C).  Pub. L. 100–647, §\u202f1005(a)(7) , substituted “Except as provided in regulations, no” for “No”.\nSubsec. (j)(6)(A).  Pub. L. 100–647, §\u202f1005(a)(8) , inserted “with respect to which a deduction has not been allowed by reason of subsection (a)” after “to such interest”.\nSubsec. (j)(10), (11).  Pub. L. 100–647, §\u202f1005(a)(9) , added pars. (10) and (11).\nSubsec. (j)(12).  Pub. L. 100–647, §\u202f1005(a)(11) , added par. (12).\nSubsec. (k)(3).  Pub. L. 100–647, §\u202f2004(g) , added par. (3).\nSubsec. (m).  Pub. L. 100–647, §\u202f1005(a)(12) , substituted “interest” for “interests” in heading.\nSubsec. (m)(1).  Pub. L. 100–647, §\u202f1005(a)(12) , added par. (1) and struck out former par. (1) which read as follows: “In the case of any passive activity loss or credit for any taxable year beginning in calendar years 1987 through 1990 which—\n“(A) is attributable to a pre-enactment interest, but\n“(B) is not attributable to a carryforward to such taxable year of any loss or credit which was disallowed under this section for a preceding taxable year,\nthere shall be disallowed under subsection (a) only the applicable percentage of the amount which (but for this subsection) would have been disallowed under subsection (a) for such taxable year.”\nSubsec. (m)(2).  Pub. L. 100–647, §\u202f1005(a)(12) , added par. (2) and struck out former par. (2) which resulted in substituting “65”, “40”, “20”, and “10” for “35”, “60”, “80”, and “90”, respectively, in second column.\nSubsec. (m)(3)(A).  Pub. L. 100–647, §\u202f1005(a)(12) , added subpar. (A) and struck out former subpar. (A) which read as follows: “The portion of the passive activity loss for any taxable year which is attributable to pre-enactment interests shall be equal to the lesser of—\n“(i) the passive activity loss for such taxable year, or\n“(ii) the passive activity loss for such taxable year determined by taking into account only pre-enactment interests.\nFor purposes of this subparagraph, the deduction equivalent (within the meaning of subsection (j)(5)) of a passive activity credit shall be taken into account.”\n1987—Subsecs. (k) to (m).  Pub. L. 100–203  added subsec. (k) and redesignated former subsecs. (k) and ( l ) as ( l ) and (m), respectively.\nAmendment by  Pub. L. 117–2  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 9042(c) of Pub. L. 117–2 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 104(c) of div. EE of Pub. L. 116–260 , set out as a note under  section 25A of this title .\nAmendment by  section 13305(b)(1) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  section 14202(b)(3) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 14202(c) of Pub. L. 115–97 , set out as a note under  section 172 of this title .\nAmendment by  section 221(a)(41)(G) of Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 102(d)(5) of Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nPub. L. 108–357, title III, §\u202f331(h) ,  Oct. 22, 2004 ,  118 Stat. 1477 , provided that:  “The amendments made by this section [amending this section and sections 851 and 7704 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], to which such amendment relates, see  section 412(e) of Pub. L. 107–147 , set out as a note under  section 151 of this title .\nAmendment by  Pub. L. 107–16  applicable to payments made in taxable years beginning after  Dec. 31, 2001 , see  section 431(d) of Pub. L. 107–16 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nPub. L. 104–188, title XVII, §\u202f1704(d)(2) ,  Aug. 20, 1996 ,  110 Stat. 1878 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 104–188, title XVII, §\u202f1704(e)(2) ,  Aug. 20, 1996 ,  110 Stat. 1879 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1807(c)(4) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as an Effective Date note under  section 23 of this title .\nPub. L. 103–66, title XIII, §\u202f13143(c) ,  Aug. 10, 1993 ,  107 Stat. 441 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1993 .”\nAmendment by  section 11813(b)(16) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 101–239, title VII, §\u202f7109(b) ,  Dec. 19, 1989 ,  103 Stat. 2322 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after  December 31, 1989 , in taxable years ending after such date. \n \n “(2)   Special rule where interest held in pass-thru entity .— In the case of a taxpayer who holds an indirect interest in property described in paragraph (1), the amendments made by this section shall apply only if such interest is acquired after  December 31, 1989 .”\nAmendment by section 1005(a)(1)–(9), (11), (12) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(g) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  section 6009(c)(3) of Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 6009(d) of Pub. L. 100–647 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 100–203  effective as if included in the amendments made by section 501 of the Tax Reform Act of 1986,  Pub. L. 99–514 , see  section 10212(c) of Pub. L. 100–203 , set out as a note under  section 58 of this title .\nPub. L. 99–514, title V, §\u202f501(c) ,  Oct. 22, 1986 ,  100 Stat. 2241 , as amended by  Pub. L. 100–647, title I, §\u202f1005(a)(10) , title IV, §\u202f4003(b)(2),  Nov. 10, 1988 ,  102 Stat. 3388 , 3644, provided that: \n “(1)   In general .— The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special rule for carryovers .— The amendments made by this section shall not apply to any loss, deduction, or credit carried to a taxable year beginning after  December 31, 1986 , from a taxable year beginning before  January 1, 1987 . \n \n “[(3)  Repealed.  Pub. L. 100–647, title IV, §\u202f4003(b)(2) ,  Nov. 10, 1988 ,  102 Stat. 3644 .] \n \n “(4)   Income from sales of passive activities in taxable years beginning before  january 1, 1987 .— If— “(A)  gain is recognized in a taxable year beginning after  December 31, 1986 , from a sale or exchange of an interest in an activity in a taxable year beginning before  January 1, 1987 , and \n \n “(B)  such gain would have been treated as gain from a passive activity had section 469 of the Internal Revenue Code of 1986 (as added by this section) been in effect for the taxable year in which the sale or exchange occurred and for all succeeding taxable years, \n \n\n then such gain shall be treated as gain from a passive activity for purposes of such section.”\nAmendment by section 401(d)(5)(B)(i)–(iii) of  Pub. L. 115–141  not applicable to certain qualified community assets acquired, wages paid or incurred, qualified revitalization buildings placed in service, or property acquired before  Jan. 1, 2010 , see  section 401(d)(5)(C) of Pub. L. 115–141 , set out as a note under former  section 1400E of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11813(b)(16) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1005(c)(11) ,  Nov. 10, 1988 ,  102 Stat. 3392 , provided that:  \n “If— “(A)  any amount was disallowed as a deduction under section 163(d) of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of the Reform Act [ Oct. 22, 1986 ]), \n \n “(B)  such amount would (but for this paragraph) be treated as investment interest paid or accrued by the taxpayer in the taxpayer’s first taxable year beginning after  December 31, 1986 , and \n \n “(C)  the taxpayer makes an election under this paragraph at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe, \n \n\n to the extent such amount is attributable to an activity subject to the limitations of section 469 of the 1986 Code, such amount shall not be treated as investment interest but shall be treated as a deduction allocable to such activity for such first taxable year. [Former] Subsection (m) of section 469 of the 1986 Code and section 501(c)(2) of the Reform Act [ Pub. L. 99–514 , set out as an Effective Date note above] shall not apply to any amount so treated.”\nPub. L. 99–514, title V, §\u202f502 ,  Oct. 22, 1986 ,  100 Stat. 2241 , as amended by  Pub. L. 99–509, title VIII, §\u202f8073(a) ,  Oct. 21, 1986 ,  100 Stat. 1965 ;  Pub. L. 100–647, title I, §\u202f1005(b) ,  Nov. 10, 1988 ,  102 Stat. 3389 , provided that: \n “(a)   General Rule .— Any loss sustained by a qualified investor with respect to an interest in a qualified low-income housing project for any taxable year in the relief period shall not be treated as a loss from a passive activity for purposes of section 469 of the Internal Revenue Code of 1986. \n \n “(b)   Relief Period .— For purposes of subsection (a), the term ‘relief period’ means the period beginning with the taxable year in which the investor made his initial investment in the qualified low-income housing project and ending with whichever of the following is the earliest— “(1)  the 6th taxable year after the taxable year in which the investor made his initial investment, \n \n “(2)  the 1st taxable year after the taxable year in which the investor is obligated to make his last investment, or \n \n “(3)  the taxable year preceding the 1st taxable year for which such project ceased to be a qualified low-income housing project. \n \n \n “(c)   Qualified Low-Income Housing Project .— For purposes of this section, the term ‘qualified low-income housing project’ means any project if— “(1)  such project meets the requirements of clause (i), (ii), (iii), or (iv) of section 1250(a)(1)(B) [of the Internal Revenue Code of 1986] as of the date placed in service and for each taxable year thereafter which begins after 1986 and for which a passive loss may be allowable with respect to such project, \n \n “(2)  the operator certifies to the Secretary of the Treasury or his delegate that such project met the requirements of paragraph (1) on the date of the enactment of this Act [ Oct. 22, 1986 ] (or, if later, when placed in service) and annually thereafter, \n \n “(3)  such project is constructed or acquired pursuant to a binding written contract entered into on or before  August 16, 1986 , and \n \n “(4)  such project is placed in service before  January 1, 1989 . \n \n \n “(d)   Qualified Investor .— For purposes of this section— “(1)   In general .— The term ‘qualified investor’ means any natural person who holds (directly or through 1 or more entities) an interest in a qualified low-income housing project— “(A)  if— “(i)  in the case of a project placed in service on or before  August 16, 1986 , such person held an interest in such project on  August 16, 1986 , and such person made his initial investment after  December 31, 1983 , or \n \n “(ii)  in the case of a project placed in service after  August 16, 1986 , such person made his initial investment after  December 31, 1983 , and such person held an interest in such project on  December 31, 1986 , and \n \n \n “(B)  if such investor is required to make payments after  December 31, 1986 , of 50 percent or more of the total original obligated investment for such interest. \n \n\n For purposes of subparagraph (A), a person shall be treated as holding an interest on  August 16, 1986 , or  December 31, 1986 , if on such date such person had a binding contract to acquire such interest. \n \n “(2)   Treatment of estates .— The estate of a decedent shall succeed to the treatment under this section of the decedent but only with respect to the 1st 2 taxable years of such estate ending after the date of the decedent’s death. \n \n “(3)   Special rule for certain partnerships .— In the case of any property which is held by a partnership— “(A)  which placed such property in service on or after  December 31, 1985 , and before  August 17, 1986 , and continuously held such property through the close of the taxable year for which the determination is being made, and \n \n “(B)  which was not treated as a new partnership or as terminated at any time on or after the date on which such property was placed in service and through the close of the taxable year for which the determination is being made, \n \n\n paragraph (1)(A)(i) shall be applied by substituting ‘ December 31, 1988 ’ for ‘ August 16, 1986 ’ the 2nd place it appears. \n \n “(4)   Special rule for certain rural housing .— In the case of any interest in a qualified low-income housing project which— “(A)  is assisted under section 515 of the Housing Act of 1949 [ 42 U.S.C. 1485 ] (relating to the Farmers’ Home Administration Program), and \n \n “(B)  is located in a town with a population of less than 10,000 and which is not part of a metropolitan statistical area, \n \n\n paragraph (1)(B) shall be applied by substituting ‘35 percent’ for ‘50 percent’ and subsection (b)(1) shall be applied by substituting ‘5th taxable year’ for ‘6th taxable year’. The preceding sentence shall not apply to any interest unless, on  December 31, 1986 , at least one-half of the number of payments required with respect to such interest remain to be paid. \n \n \n “(e)   Special Rules.— “(1)   Where more than 1 building in project .— If there is more than 1 building in any project, the determination of when such project is placed in service shall be based on when the 1st building in such project is placed in service. \n \n “(2)   Only cash and other property taken into account .— In determining the amount any person invests in (or is obligated to invest in) any interest, only cash and other property shall be taken into account. \n \n “(3)   Coordination with credit .— No low-income housing credit shall be determined under section 42 of the Internal Revenue Code of 1986 with respect to any project with respect to which any person has been allowed any benefit under this section.”\n[ Pub. L. 99–509, title VIII, §\u202f8073(b) ,  Oct. 21, 1986 ,  100 Stat. 1965 , provided that:  “The amendment made by subsection (a) [amending  section 502 of Pub. L. 99–514 , set out above] shall take effect as if included in section 502 of the Tax Reform Act of 1986 on the date of its enactment [ Oct. 22, 1986 ].” \n]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Except as otherwise provided in this section, a tax-exempt use loss for any taxable year shall not be allowed.\nAny tax-exempt use loss with respect to any tax-exempt use property which is disallowed under subsection (a) for any taxable year shall be treated as a deduction with respect to such property in the next taxable year.\nSuch term shall not include any property which would (but for this subparagraph) be tax-exempt use property solely by reason of section 168(h)(6).\nFor treatment of partnerships as leases to which section 168(h) applies, see section 7701(e).\nThe arrangements referred to in this subparagraph include a defeasance arrangement, a loan by the lessee to the lessor or any lender, a deposit arrangement, a letter of credit collateralized with cash or cash equivalents, a payment undertaking agreement, prepaid rent (within the meaning of the regulations under section 467), a sinking fund arrangement, a guaranteed investment contract, financial guaranty insurance, and any similar arrangement (whether or not such arrangement provides credit support).\nExcept as otherwise provided in this subparagraph, the term “allowable amount” means an amount equal to 20 percent of the lessor’s adjusted basis in the property at the time the lease is entered into.\nTo the extent provided in regulations, a higher percentage shall be permitted under clause (i) where necessary because of the credit-worthiness of the lessee. In no event may such regulations permit a percentage of more than 50 percent.\nIf under the lease the lessee has the option to purchase the property for a fixed price or for other than the fair market value of the property (determined at the time of exercise), the allowable amount at the time such option may be exercised may not exceed 50 percent of the price at which such option may be exercised.\nFor purposes of subparagraph (A)(ii), the fair market value at the end of the lease term shall be reduced to the extent that a person other than the lessor bears a risk of loss in the value of the property.\nThis paragraph shall not apply to any lease with a lease term of 5 years or less.\nThe Secretary may by regulations provide that the requirements of this paragraph are not met where the lessee bears more than a minimal risk of loss.\nThis paragraph shall not apply to any lease with a lease term of 5 years or less.\nIf during the taxable year a taxpayer disposes of the taxpayer’s entire interest in tax-exempt use property (or former tax-exempt use property), rules similar to the rules of section 469(g) shall apply for purposes of this section.\nThis section shall be applied before the application of section 469.\nThe terms “lessor”, “lessee”, and “lender” each include any related party (within the meaning of section 197(f)(9)(C)(i)).\nThe term “lease term” has the meaning given to such term by section 168(i)(3).\nThe term “lender” means, with respect to any lease, a person that makes a loan to the lessor which is secured (or economically similar to being secured) by the lease or the leased property.\nThe term “loan” includes any similar arrangement.\n2018—Subsec. (d)(2)(B).  Pub. L. 115–141  substituted “subparagraph (A)(ii)” for “clause (ii)”.\n2007—Subsec. (c)(2).  Pub. L. 110–172, §\u202f7(c)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘tax-exempt use property’ has the meaning given to such term by section 168(h), except that such section shall be applied—\n“(A) without regard to paragraphs (1)(C) and (3) thereof, and\n“(B) as if property described in—\n“(i) section 167(f)(1)(B),\n“(ii) section 167(f)(2), and\n“(iii) section 197 intangible,\nwere tangible property.\nSuch term shall not include property which would (but for this sentence) be tax-exempt use property solely by reason of section 168(h)(6) if any credit is allowable under section 42 or 47 with respect to such property.”\nSubsec. (d)(1)(A).  Pub. L. 110–172, §\u202f7(c)(2) , in introductory provisions, substituted “(at all times during the lease term)” for “(at any time during the lease term)”.\nAmendment by  Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 7(e) of Pub. L. 110–172 , set out as a note under  section 1092 of this title .\nPub. L. 108–357, title VIII, §\u202f849 ,  Oct. 22, 2004 ,  118 Stat. 1606 , as amended by  Pub. L. 109–135, title IV, §\u202f403(ff) ,  Dec. 21, 2005 ,  119 Stat. 2631 , provided that: \n “(a)   In General .— Except as provided in this section, the amendments made by this part [part III (§§\u202f847–849) of subtitle B of title VIII of  Pub. L. 108–357 , enacting this section and amending sections 167, 168, and 197 of this title] shall apply to leases entered into after  March 12, 2004 , and in the case of property treated as tax-exempt use property other than by reason of a lease, to property acquired after  March 12, 2004 . \n \n “(b)   Exception.— “(1)   In general .— The amendments made by this part shall not apply to qualified transportation property. \n \n “(2)   Qualified transportation property .— For purposes of paragraph (1), the term ‘qualified transportation property’ means domestic property subject to a lease with respect to which a formal application— “(A)  was submitted for approval to the Federal Transit Administration (an agency of the Department of Transportation) after  June 30, 2003 , and before  March 13, 2004 , \n \n “(B)  is approved by the Federal Transit Administration before  January 1, 2006 , and \n \n “(C)  includes a description of such property and the value of such property. \n \n \n “(3)   Exchanges and conversion of tax-exempt use property .— Section 470(e)(4) of the Internal Revenue Code of 1986, as added by section 848, shall apply to property exchanged or converted after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(4)   Intangibles and indian tribal governments .— The amendments made subsections (b)(2), (b)(3), and (e) of section 847 [amending sections 167, 168, and 197 of this title], and the treatment of property described in clauses (ii) and (iii) of section 470(c)(2)(B) of the Internal Revenue Code of 1986 (as added by section 848) as tangible property, shall apply to leases entered into after  October 3, 2004 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'Whenever in the opinion of the Secretary the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventories shall be taken by such taxpayer on such basis as the Secretary may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting the income.\nFor purposes of this subsection, the term “applicable financial statement” has the meaning given the term in section 451(b)(3).\nIn the case of any taxpayer which is not a corporation or a partnership, the gross receipts test of section 448(c) shall be applied in the same manner as if each trade or business of such taxpayer were a corporation or partnership.\nAny change in method of accounting made pursuant to this subsection shall be treated for purposes of section 481 as initiated by the taxpayer and made with the consent of the Secretary.\nFor rules relating to capitalization of direct and indirect costs of property, see section 263A.\n2017—Subsecs. (c), (d).  Pub. L. 115–97  added subsec. (c) and redesignated former subsec. (c) as (d).\n1997—Subsecs. (b), (c).  Pub. L. 105–34  added subsec. (b) and redesignated former subsec. (b) as (c).\n1986— Pub. L. 99–514  designated existing provisions as subsec. (a) and added subsec. (b).\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13102(e) of Pub. L. 115–97 , set out as a note under  section 263A of this title .\nPub. L. 105–34, title IX, §\u202f961(b)(1) ,  Aug. 5, 1997 ,  111 Stat. 891 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nIf any interest costs incurred after  Dec. 31, 1986 , are attributable to costs incurred before  Jan. 1, 1987 , the amendment by  Pub. L. 99–514  is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by  section 803 of Pub. L. 99–514 ) or, if applicable, section 266 of such Code, see  section 7831(d)(2) of Pub. L. 101–239 , set out as an Effective Date note under  section 263A of this title .\nAmendment by  Pub. L. 99–514  applicable to costs incurred after  Dec. 31, 1986 , in taxable years ending after such date, except as otherwise provided, see  section 803(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 263A of this title .\nPub. L. 105–34, title IX, §\u202f961(b)(2) ,  Aug. 5, 1997 ,  111 Stat. 891 , provided that:  \n “In the case of any taxpayer permitted by this section [amending this section and enacting provisions set out as a note above] to change its method of accounting to a permissible method for any taxable year— \n “(A)  such changes shall be treated as initiated by the taxpayer, \n \n “(B)  such changes shall be treated as made with the consent of the Secretary of the Treasury, and \n \n “(C)  the period for taking into account the adjustments under section 481 [ 26 U.S.C. 481 ] by reason of such change shall be 4 years.”\nPub. L. 97–34, title II, §\u202f238 ,  Aug. 13, 1981 ,  95 Stat. 254 , directed Secretary of the Treasury to conduct a study of methods of tax accounting for inventory with a view towards development of simplified methods and to report to Congress, not later than  Dec. 31, 1982 , prior to repeal by  Pub. L. 100–647, title VI, §\u202f6252(a)(2) ,  Nov. 10, 1988 ,  102 Stat. 3752 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'A taxpayer may use the method provided in subsection (b) (whether or not such method has been prescribed under section 471) in inventorying goods specified in an application to use such method filed at such time and in such manner as the Secretary may prescribe. The change to, and the use of, such method shall be in accordance with such regulations as the Secretary may prescribe as necessary in order that the use of such method may clearly reflect income.\nThe beginning inventory for the first taxable year for which the method described in subsection (b) is used shall be valued at cost. Any change in the inventory amount resulting from the application of the preceding sentence shall be taken into account ratably in each of the 3 taxable years beginning with the first taxable year for which the method described in subsection (b) is first used.\nThe Secretary shall prescribe regulations permitting the use of suitable published governmental indexes in such manner and circumstances as determined by the Secretary for purposes of the method described in subsection (b).\nExcept as otherwise provided in regulations, all members of the same group of financially related corporations shall be treated as 1 taxpayer for purposes of subsections (c) and (e)(2).\n1984—Subsec. (g).  Pub. L. 98–369  added subsec. (g).\n1981—Subsec. (d).  Pub. L. 97–34, §\u202f236(a) , substituted “3-year averaging for increases in inventory value” for “Preceding closing inventory” in heading, substituted first sentence reading “The beginning inventory for the first taxable year for which the method described in subsection (b) is used shall be valued at cost.” for “In determining income for the taxable year preceding the taxable year for which the method described in subsection (b) is first used, the closing inventory of such preceding year of the goods specified in the application referred to in subsection (a) shall be at cost.” and inserted “Any change in the inventory amount resulting from the application of the preceding sentence shall be taken into account ratably in each of the 3 taxable years beginning with the first taxable year for which the method described in subsection (b) is first used.”\nSubsec. (f).  Pub. L. 97–34, §\u202f235 , added subsec. (f).\n1976—Subsecs. (a), (c), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(b)(36)(A) , struck out subsec. (f) which provided for a cross reference relating to involuntary liquidation and replacement of LIFO inventories.\nPub. L. 98–369, div. A, title I, §\u202f95(b) ,  July 18, 1984 ,  98 Stat. 616 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ July 18, 1984 ].”\nPub. L. 97–34, title II, §\u202f236(b) ,  Aug. 13, 1981 ,  95 Stat. 252 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nAmendment by  section 1901(b)(36)(A) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'The term “qualified inventory interruption” means a regulation, request, or interruption described in subparagraph (B) but only to the extent provided in the notice published pursuant to subparagraph (B).\nThe term “liquidation year” means the taxable year in which occurs the qualified liquidation to which this section applies.\nThe term “replacement year” means any taxable year in the replacement period; except that such term shall not include any taxable year after the taxable year in which replacement of the liquidated goods is completed.\nThe term “LIFO method” means the method of inventorying goods described in section 472.\nAn election under subsection (a) shall be made subject to such conditions, and in such manner and form and at such time, as the Secretary may prescribe by regulation.\nAn election under this section shall be irrevocable and shall be binding for the liquidation year and for all determinations for prior and subsequent taxable years insofar as such determinations are affected by the adjustments under this section.\nIf the closing inventory of the taxpayer for any replacement year reflects an increase over the opening inventory of such goods for such year, the goods reflecting such increase shall be considered, in the order of their acquisition, as having been acquired in replacement of the goods most recently liquidated (whether or not in a qualified liquidation) and not previously replaced.\nIn the case of any qualified liquidation, any goods considered under paragraph (1) as having been acquired in replacement of the goods liquidated in such liquidation shall be taken into purchases and included in the closing inventory of the taxpayer for the replacement year at the inventory cost basis of the goods replaced.\nSolely for purposes of determining interest on any overpayment or underpayment attributable to an adjustment made under this section, such overpayment or underpayment shall be treated as an overpayment or underpayment (as the case may be) for the replacement year.\nThe Secretary shall prescribe such regulations as may be necessary to coordinate the provisions of this section with the provisions of section 472.\nPub. L. 96–223, title IV, §\u202f403(a)(3) ,  Apr. 2, 1980 ,  94 Stat. 304 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by paragraphs (1) and (2) [enacting this section] shall apply to qualified liquidations (within the meaning of section 473(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) in taxable years ending after  October 31, 1979 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'An eligible small business may elect to use the simplified dollar-value method of pricing inventories for purposes of the LIFO method.\nFor purposes of this section, a taxpayer is an eligible small business for any taxable year if the average annual gross receipts of the taxpayer for the 3 preceding taxable years do not exceed $5,000,000. For purposes of the preceding sentence, rules similar to the rules of section 448(c)(3) shall apply.\nIn the case of a taxpayer which is a member of a controlled group, all persons which are component members of such group shall be treated as 1 taxpayer for purposes of determining the gross receipts of the taxpayer.\nFor purposes of subparagraph (A), persons shall be treated as being component members of a controlled group if such persons would be treated as a single employer under section 52.\nThe election under this section may be made without the consent of the Secretary.\nThe term “LIFO method” means the method provided by section 472(b).\n1986— Pub. L. 99–514  amended section generally, substituting provisions relating to election by eligible small business to use simplified dollar-value method of pricing inventories for purposes of LIFO method for provisions relating to election by eligible small business which uses dollar-value method of pricing inventories under method provided by  section 472(b) of this title  to use one inventory pool for any trade or business of such eligible small business.\nPub. L. 99–514, title VIII, §\u202f802(c) ,  Oct. 22, 1986 ,  100 Stat. 2350 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Treatment of taxpayers who made elections under existing section 474 .— The amendments made by this section shall not apply to any taxpayer who made an election under section 474 of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) for any period during which such election is in effect. Notwithstanding any provision of such section 474 (as so in effect), an election under such section may be revoked without the consent of the Secretary.”\nPub. L. 97–34, title II, §\u202f237(c) ,  Aug. 13, 1981 ,  95 Stat. 253 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1981 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'METHODS OF ACCOUNTING'},
  'content': 'A security shall not be treated as described in subparagraph (A), (B), or (C) of paragraph (1), as the case may be, unless such security is clearly identified in the dealer’s records as being described in such subparagraph before the close of the day on which it was acquired, originated, or entered into (or such other time as the Secretary may by regulations prescribe).\nIf a security ceases to be described in paragraph (1) at any time after it was identified as such under paragraph (2), subsection (a) shall apply to any changes in value of the security occurring after the cessation.\nTo the extent provided in regulations, subparagraph (A) of paragraph (1) shall not apply to any security described in subparagraph (D) or (E) of subsection (c)(2) which is held by a dealer in such securities.\nThe term “hedge” means any position which manages the dealer’s risk of interest rate or price changes or currency fluctuations, including any position which is reasonably expected to become a hedge within 60 days after the acquisition of the position.\nParagraph (2)(C) shall not include any nonfinancial customer paper.\nThe rules of sections 263(g), 263A, and 1256(a) shall not apply to securities to which subsection (a) applies, and section 1091 shall not apply (and section 1092 shall apply) to any loss recognized under subsection (a).\nAny gain or loss with respect to a security under subsection (a)(2) shall be treated as ordinary income or loss.\nIn the case of a dealer in commodities who elects the application of this subsection, this section shall apply to commodities held by such dealer in the same manner as this section applies to securities held by a dealer in securities.\nAn election under this subsection may be made without the consent of the Secretary. Such an election, once made, shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\nAny security to which subparagraph (A) applies and which was acquired in the normal course of the taxpayer’s activities as a trader in securities shall not be taken into account in applying section 1259 to any position to which subparagraph (A) does not apply.\nRules similar to the rules of subsections (b)(4) and (d) shall apply to securities held by a person in any trade or business with respect to which an election under this paragraph is in effect. Subsection (d)(3) shall not apply under the preceding sentence for purposes of applying sections 1402 and 7704.\nIn the case of a person who is engaged in a trade or business as a trader in commodities and who elects to have this paragraph apply to such trade or business, paragraph (1) shall apply to commodities held by such trader in connection with such trade or business in the same manner as paragraph (1) applies to securities held by a trader in securities.\nThe elections under paragraphs (1) and (2) may be made separately for each trade or business and without the consent of the Secretary. Such an election, once made, shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\n2002—Subsec. (g)(3).  Pub. L. 107–147  substituted “described in section” for “described in sections”.\n2000—Subsec. (g)(3).  Pub. L. 106–554  substituted “267(b) or” for “267(b) of”.\n1999—Subsec. (c)(3).  Pub. L. 106–170  substituted “manages” for “reduces”.\n1998—Subsec. (c)(4).  Pub. L. 105–206, §\u202f7003(a) , added par. (4).\nSubsec. (f)(1)(D).  Pub. L. 105–206, §\u202f6010(a)(3) , inserted at end “Subsection (d)(3) shall not apply under the preceding sentence for purposes of applying sections 1402 and 7704.”\nSubsec. (g)(3).  Pub. L. 105–206, §\u202f7003(b) , added par. (3).\n1997—Subsecs. (e) to (g).  Pub. L. 105–34  added subsecs. (e) and (f) and redesignated former subsec. (e) as (g).\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  section 6010(a)(3) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–206, title VII, §\u202f7003(c) ,  July 22, 1998 ,  112 Stat. 833 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ July 22, 1998 ]. \n \n “(2)   Change in method of accounting .— In the case of any taxpayer required by the amendments made by this section to change its method of accounting for its first taxable year ending after the date of the enactment of this Act— “(A)  such change shall be treated as initiated by the taxpayer; \n \n “(B)  such change shall be treated as made with the consent of the Secretary of the Treasury; and \n \n “(C)  the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the 4-taxable-year period beginning with such first taxable year.”\nPub. L. 105–34, title X, §\u202f1001(d) ,  Aug. 5, 1997 ,  111 Stat. 907 , as amended by  Pub. L. 105–206, title VI, §\u202f6010(a)(4) ,  July 22, 1998 ,  112 Stat. 813 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting  section 1259 of this title  and amending this section] shall apply to any constructive sale after  June 8, 1997 . \n \n “(2)   Exception for sales of positions, etc. held before  june 9, 1997 .— If— “(A)  before  June 9, 1997 , the taxpayer entered into any transaction which is a constructive sale of any appreciated financial position, and \n \n “(B)  before the close of the 30-day period beginning on the date of the enactment of this Act [ Aug. 5, 1997 ] or before such later date as may be specified by the Secretary of the Treasury, such transaction and position are clearly identified in the taxpayer’s records as offsetting, \n \n\n such transaction and position shall not be taken into account in determining whether any other constructive sale after  June 8, 1997 , has occurred. The preceding sentence shall cease to apply as of the date such transaction is closed or the taxpayer ceases to hold such position. \n \n “(3)   Special rule .— In the case of a decedent dying after  June 8, 1997 , if— “(A)  there was a constructive sale on or before such date of any appreciated financial position, \n \n “(B)  the transaction resulting in such constructive sale of such position remains open (with respect to the decedent or any related person)— “(i)  for not less than 2 years after the date of such transaction (whether such period is before or after  June 8, 1997 ), and \n \n “(ii)  at any time during the 3-year period ending on the date of the decedent’s death, and \n \n \n “(C)  such transaction is not closed before the close of the 30th day after the date of the enactment of this Act, \n \n\n then, for purposes of such Code [probably means the Internal Revenue Code of 1986], such position (and the transaction resulting in such constructive sale) shall be treated as property constituting rights to receive an item of income in respect of a decedent under section 691 of such Code. Section 1014(c) of such Code shall not apply to so much of such position’s or property’s value (as included in the decedent’s estate for purposes of chapter 11 of such Code) as exceeds its fair market value as of the date such transaction is closed. \n \n “(4)   Election of mark to market by securities traders and traders and dealers in commodities.— “(A)   In general .— The amendments made by subsection (b) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act. \n \n “(B)  4- year spread of adjustments .— In the case of a taxpayer who elects under subsection (e) or (f) of section 475 of the Internal Revenue Code of 1986 (as added by this section) to change its method of accounting for the taxable year which includes the date of the enactment of this Act— “(i)  any identification required under such subsection with respect to securities and commodities held on the date of the enactment of this Act shall be treated as timely made if made on or before the 30th day after such date of enactment, and \n \n “(ii)  the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of such Code shall be taken into account ratably over the 4-taxable year period beginning with such first taxable year.”\nPub. L. 103–66, title XIII, §\u202f13223(c) ,  Aug. 10, 1993 ,  107 Stat. 484 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending  section 988 of this title ] shall apply to all taxable years ending on or after  December 31, 1993 . \n \n “(2)   Change in method of accounting .— In the case of any taxpayer required by this section to change its method of accounting for any taxable year— “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as made with the consent of the Secretary, and \n \n “(C)  except as provided in paragraph (3), the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the 5-taxable year period beginning with the first taxable year ending on or after  December 31, 1993 . \n \n \n “(3)   Special rule for floor specialists and market makers.— “(A)   In general .— If— “(i)  a taxpayer (or any predecessor) used the last-in first-out (LIFO) method of accounting with respect to any qualified securities for the 5-taxable year period ending with its last taxable year ending before  December 31, 1993 , and \n \n “(ii)  any portion of the net amount described in paragraph (2)(C) is attributable to the use of such method of accounting, \n \n\n then paragraph (2)(C) shall be applied by taking such portion into account ratably over the 15-taxable year period beginning with the first taxable year ending on or after  December 31, 1993 . \n \n “(B)   Qualified security .— For purposes of this paragraph, the term ‘qualified security’ means any security acquired— “(i)  by a floor specialist (as defined in section 1236(d)(2) of the Internal Revenue Code of 1986) in connection with the specialist’s duties as a specialist on an exchange, but only if the security is one in which the specialist is registered with the exchange, or \n \n “(ii)  by a taxpayer who is a market maker in connection with the taxpayer’s duties as a market maker, but only if— “(I)  the security is included on the National Association of Security Dealers Automated Quotation System, \n \n “(II)  the taxpayer is registered as a market maker in such security with the National Association of Security Dealers, and \n \n “(III)  as of the last day of the taxable year preceding the taxpayer’s first taxable year ending on or after  December 31, 1993 , the taxpayer (or any predecessor) has been actively and regularly engaged as a market maker in such security for the 2-year period ending on such date (or, if shorter, the period beginning 61 days after the security was listed in such quotation system and ending on such date).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADJUSTMENTS'},
  'content': 'In the case of any change described in subsection (a), the taxpayer may, in such manner and subject to such conditions as the Secretary may by regulations prescribe, take the adjustments required by subsection (a)(2) into account in computing the tax imposed by this chapter for the taxable year or years permitted under such regulations.\nIn the case of an eligible terminated S corporation, any adjustment required by subsection (a)(2) which is attributable to such corporation’s revocation described in paragraph (2)(A)(ii) shall be taken into account ratably during the 6-taxable year period beginning with the year of change.\nThe date of the enactment of the Tax Cuts and Jobs Act and the date of such enactment, referred to in subsec. (d)(2), probably mean the date of enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\n2017—Subsec. (d).  Pub. L. 115–97  added subsec. (d).\n2014—Subsec. (b)(3)(C).  Pub. L. 113–295  struck out subpar. (C) which read as follows: “In applying section 7807(b)(1), the provisions of chapter 1 (other than subchapter E, relating to self-employment income) and chapter 2 of the Internal Revenue Code of 1939 shall be treated as the corresponding provisions of the Internal Revenue Code of 1939.”\n1980—Subsec. (d).  Pub. L. 96–471  struck out subsec. (d) which provided that this section was not to apply to a change to which  section 453 of this title , relating to change to installment method, applied.\n1976—Subsecs. (b)(1), (2).  Pub. L. 94–455, §\u202f1901(a)(70)(B) , struck out “,\u2000other than the amount of such adjustments to which paragraph (4) or (5) applies,” after “required by subsection (a)(2)”.\nSubsec. (b)(4), (5), (6).  Pub. L. 94–455, §\u202f1901(a)(70)(A) , struck out par. (4) which related to special rule for pre-1954 general adjustments, par. (5) which related to special rule for pre-1954 adjustments in case of certain decedents, and par. (6) which related to the application of the special rule for pre-1954 general adjustments.\nSubsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1969—Subsec. (b)(3)(A).  Pub. L. 91–172  substituted “loss carryback or carryover” for “loss carryover”.\n1958—Subsec. (a)(2).  Pub. L. 85–866, §\u202f29(a)(1) , inserted “unless the adjustment is attributable to a change in the method of accounting initiated by the taxpayer”, after “does not apply”.\nSubsec. (b)(1).  Pub. L. 85–866, §\u202f29(b)(1) –(3), inserted “,\u2000other than the amount of such adjustments to which paragraph (4) or (5) applies,” after “subsection (a)(2)” and substituted “the aggregate increase in the taxes” for “the aggregate of the taxes” and “which would result if one-third of such increase in taxable income” for “which would result if one-third of such increase”.\nSubsec. (b)(2).  Pub. L. 85–866, §\u202f29(b)(1) , (4), inserted “other than the amount of such adjustments to which paragraph (4) or (5) applies,” after “subsection (a)(2)”, wherever appearing and “(or under the corresponding provisions of prior revenue laws)” after “the net increase in the taxes under this Chapter”.\nSubsec. (b)(3)(A).  Pub. L. 85–866, §\u202f29(b)(5) , substituted “paragraph (1) or (2)” for “paragraph (2)”, wherever appearing.\nSubsec. (b)(4) to (6).  Pub. L. 85–866, §\u202f29(a)(2) , added pars. (4) to (6).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nFor effective date of amendment by  Pub. L. 96–471 , see  section 6(a)(1) of Pub. L. 96–471 , set out as an Effective Date note under  section 453 of this title .\nAmendment by  section 1901(a)(70) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to net capital losses sustained in taxable years beginning after  Dec. 31, 1969 , see  section 512(g) of Pub. L. 91–172 , set out as a note under  section 1212 of this title .\nPub. L. 85–866, title I, §\u202f29(d) ,  Sept. 2, 1958 ,  72 Stat. 1629 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 381 of this title ] shall apply with respect to any change in a method of accounting where the year of the change (within the meaning of section 481 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) is a taxable year beginning after  December 31, 1953 , and ending after  August 16, 1954 . \n \n “(2)   Exception for certain agreements .— The amendments made by subsections (a), (b)(I), and (c) [amending this section and  section 381 of this title ] shall not apply if before the date of the enactment of this Act [ Sept. 2, 1958 ]— “(A)  the taxpayer applied for a change in the method of accounting in the manner provided by regulations prescribed by the Secretary of the Treasury or his delegate, and \n \n “(B)  the taxpayer and the Secretary of the Treasury or his delegate agreed to the terms and conditions for making the change.”\nPub. L. 101–239, title VII, §\u202f7816(m) ,  Dec. 19, 1989 ,  103 Stat. 2421 , provided that:  “If, for the 1st taxable year beginning on or after  January 1, 1987 , a qualified group self-insurers’ fund changes its treatment of policyholder dividends to take into account such dividends no earlier than the date that the State regulatory authority determines the amount of the policyholder dividend that may be paid, then such change shall be treated as a change in a method of accounting and no adjustment under section 481(a) of the Internal Revenue Code of 1986 shall be made with respect to such change in method of accounting.”\nPub. L. 86–459 ,  May 13, 1960 ,  74 Stat. 124 , authorized any person who computed taxable income under the accrual method of accounting for his most recent taxable year ending on or before  June 22, 1959 , and who treated dealer reserve income for such taxable year as accruable for a subsequent taxable year, to elect before  Sept. 1, 1960 , to have  section 481 of this title  apply to the treatment for income tax purposes of dealer reserve income.\nPub. L. 85–866, title I, §\u202f29(e) ,  Sept. 2, 1958 ,  72 Stat. 1629 , authorized an election by certain taxpayers, who, for any taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , and before  Sept. 2, 1958 , computed their taxable incomes using different accounting methods in succeeding taxable years, to return to their first method of accounting, where the election was made within six months after  Sept. 2, 1958 . Claims for refunds of overpayments of tax resulting from the election were to be filed within one year after the date of the election. Such an election was to be considered a consent to an assessment of a deficiency resulting from the election, where the assessment is made within one year after the date of the election.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADJUSTMENTS'},
  'content': 'In any case of two or more organizations, trades, or businesses (whether or not incorporated, whether or not organized in the United States, and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the Secretary may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among such organizations, trades, or businesses, if he determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades, or businesses. In the case of any transfer (or license) of intangible property (within the meaning of section 367(d)(4)), the income with respect to such transfer or license shall be commensurate with the income attributable to the intangible. For purposes of this section, the Secretary shall require the valuation of transfers of intangible property (including intangible property transferred with other property or services) on an aggregate basis or the valuation of such a transfer on the basis of the realistic alternatives to such a transfer, if the Secretary determines that such basis is the most reliable means of valuation of such transfers.\n2018— Pub. L. 115–141  substituted “section 367(d)(4)” for “section 936(h)(3)(B)”.\n2017— Pub. L. 115–97  inserted at end “For purposes of this section, the Secretary shall require the valuation of transfers of intangible property (including intangible property transferred with other property or services) on an aggregate basis or the valuation of such a transfer on the basis of the realistic alternatives to such a transfer, if the Secretary determines that such basis is the most reliable means of valuation of such transfers.”\n1986— Pub. L. 99–514  inserted at end “In the case of any transfer (or license) of intangible property (within the meaning of section 936(h)(3)(B)), the income with respect to such transfer or license shall be commensurate with the income attributable to the intangible.”\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 115–97  applicable to transfers in taxable years beginning after  Dec. 31, 2017 , see  section 14221(c)(1) of Pub. L. 115–97 , set out as a note under  section 367 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only with respect to transfers after  Nov. 16, 1985 , or licenses granted after such date, or before such date with respect to property not in existence or owned by the taxpayer on such date, except that for purposes of [former]  section 936(h)(5)(C) of this title , such amendment applicable to taxable years beginning after  Dec. 31, 1986 , without regard to when the transfer or license was made, see  section 1231(g)(2) of Pub. L. 99–514 , set out as a note under  section 367 of this title .\nFor requirement that, not later than 180 days after  July 18, 1984 , the Secretary of the Treasury modify the safe harbor interest rates applicable under the regulations prescribed under this section so that such rates are consistent with the rates applicable under  section 483 of this title  by reason of the amendments made by  Pub. L. 98–369 , see  section 44(b)(2) of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 101–508, title XI, §\u202f11316 ,  Nov. 5, 1990 ,  104 Stat. 1388–458 , directed Secretary of the Treasury or his delegate to conduct a study of the application and administration of section 482 of the Internal Revenue Code of 1986 and not later than  Mar. 1, 1992 , submit to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate a report on the study, together with such recommendations as he deemed advisable.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADJUSTMENTS'},
  'content': 'For purposes of this section, a debt instrument of the purchaser which is given in consideration for the sale or exchange of property shall not be treated as a payment, and any payment due under such debt instrument shall be treated as due under the contract for the sale or exchange.\nFor purposes of this subsection, the term “debt instrument” has the meaning given such term by section 1275(a)(1).\nThis section shall not apply to any debt instrument for which an issue price is determined under section 1273(b) (other than paragraph (4) thereof) or section 1274.\nThis section shall not apply to any payment on account of the sale or exchange of property if it can be determined at the time of such sale or exchange that the sales price cannot exceed $3,000.\nIn the case of the purchaser, the tax treatment of amounts paid on account of the sale or exchange of property shall be made without regard to this section if any such amounts are treated under section 163(b) as if they included interest.\nIn the case of any transfer described in section 1235(a) (relating to sale or exchange of patents), this section shall not apply to any amount contingent on the productivity, use, or disposition of the property transferred.\nIn the case of any qualified sale, the discount rate used in determining the total unstated interest rate under subsection (b) shall not exceed 6 percent, compounded semiannually.\nFor purposes of this subsection, the term “qualified sale” means any sale or exchange of land by an individual to a member of such individual’s family (within the meaning of section 267(c)(4)).\nParagraph (1) shall not apply to any qualified sale between individuals made during any calendar year to the extent that the sales price for such sale (when added to the aggregate sales price for prior qualified sales between such individuals during the calendar year) exceeds $500,000.\nParagraph (1) shall not apply to any sale or exchange if any party to such sale or exchange is a nonresident alien individual.\n1986—Subsec. (d)(3).  Pub. L. 99–514  substituted “for which an issue price is determined under section 1273(b) (other than paragraph (4) thereof) or section 1274” for “to which section 1272 applies”.\n1985—Subsec. (b).  Pub. L. 99–121, §\u202f101(a)(2)(A) , struck out “120 percent of” after “discount rate equal to” in closing provisions.\nSubsec. (c)(1)(B).  Pub. L. 99–121, §\u202f101(a)(2)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “under which, using a discount rate equal to 110 percent of the applicable Federal rate determined under section 1274(d), there is total unstated interest.”\nSubsec. (e).  Pub. L. 99–121, §\u202f102(c)(1) , (2), redesignated subsec. (f) as (e), and as so redesignated substituted “6 percent” for “7 percent” in par. (1). Former subsec. (e), which related to the interest rates in the case of the sales of principal residences or farm lands, was struck out.\nSubsec. (f).  Pub. L. 99–121, §\u202f102(c)(1) , redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).\nSubsecs. (g), (h).  Pub. L. 99–121, §\u202f102(c)(1) , (3), redesignated subsec. (h) as (g) and amended it generally, designating existing undesignated cross reference as par. (3), and adding pars. (1) and (2). Former subsec. (g) redesignated (f).\n1984—Subsec. (a).  Pub. L. 98–369  amended subsec. (a) generally, substituting “For purposes of this title, in the case of any payment (1) under any contract for the sale or exchange of any property, and (2) to which this section applies, there shall be treated as interest that portion of the total unstated interest under such contract which, as determined in a manner consistent with the method of computing interest under section 1272(a), is properly allocable to such payment” for “For purposes of this title, in the case of any contract for the sale or exchange of property there shall be treated as interest that part of a payment to which this section applies which bears the same ratio to the amount of such payment as the total unstated interest under such contract bears to the total of the payments to which this section applies which are due under such contract”.\nSubsec. (b).  Pub. L. 98–369  amended subsec. (b) generally, substituting provisions directing that the present value of a payment be determined under the rules of section 1274(b)(2) using a discount rate equal to 120 percent of the applicable Federal rate determined under section 1274(d) for provisions which had directed that the present value of a payment be determined, as of the date of the sale or exchange, by discounting such payment at the rate, and in the manner, provided in regulations prescribed by the Secretary and that such regulations provide for discounting on the basis of 6-month brackets and provide that the present value of any interest payment due not more than 6 months after the date of the sale or exchange was to have been an amount equal to 100 percent of such payment.\nSubsec. (c).  Pub. L. 98–369  substituted “subsection (a) applies” for “section applies” in heading.\nSubsec. (c)(1).  Pub. L. 98–369  substituted “under which, using a discount rate equal to 110 percent of the applicable Federal rate determined under section 1274(d), there is total unstated interest” for “under which, using a rate provided by regulations prescribed by the Secretary for purposes of this subparagraph, there is total unstated interest”, in subpar. (B), and struck out provision formerly set out following subpar. (B) which had directed that any rate prescribed for determining whether there was total unstated interest for purposes of subpar. (B) be at least one percentage point lower than the rate prescribed for purposes of subsec. (b)(2).\nSubsec. (c)(2).  Pub. L. 98–369  substituted “Treatment of other debt instruments” for “Treatment of other evidence of indebtedness” in heading and, in text, substituted “a debt instrument of the purchaser which is given in consideration for the sale or exchange of property shall not be treated as a payment, and any payment due under such debt instrument” for “an evidence of indebtedness of the purchaser given in consideration for the sale or exchange of property shall not be considered a payment, and any payment due under such evidence of indebtedness”.\nSubsec. (c)(3).  Pub. L. 98–369  added par. (3).\nSubsec. (d).  Pub. L. 98–369  amended subsec. (d) generally, substituting provisions relating to exceptions and limitations for provisions which related to payments indefinite as to time, liability, or amount.\nSubsec. (e).  Pub. L. 98–369  amended subsec. (e) generally, substituting provisions relating to interest rates in case of sale of principal residence or farm land for provision relating to changes in terms of contract.\nSubsec. (f).  Pub. L. 98–369  amended subsec. (f) generally, substituting provisions relating to maximum rate of interest on certain transfers of land between related parties for provisions which related to exceptions and limitations now covered in subsec. (d) of this section.\nSubsec. (g).  Pub. L. 98–369  amended subsec. (g) generally, substituting provisions which related to calling for the promulgation of regulations by the Secretary for provisions which related to the maximum rate of interest on certain transfers of land between related parties now covered in subsec. (f) of this section.\nSubsec. (h).  Pub. L. 98–369  added subsec. (h).\n1983—Subsec. (g)(4).  Pub. L. 97–448  substituted “Paragraph (1)” for “This section”.\n1981—Subsec. (g).  Pub. L. 97–34  added subsec. (g).\n1976—Subsecs. (b), (c)(1)(B), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f)(3).  Pub. L. 94–455, §\u202f1901(b)(3)(B) , substituted “all of the gain, if any, on such” for “no part of any gain on such” and “ordinary income” for gain from the sale or exchange of property other than a capital asset”.\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 99–121  applicable to sales and exchanges after  June 30, 1985 , in taxable years ending after such date, see  section 105(a)(1) of Pub. L. 99–121 , set out as a note under  section 1274 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , and applicable to sales or exchanges after  Dec. 31, 1984 , but not applicable to any sale or exchange pursuant to a written contract which was binding on  Mar. 1, 1984 , and at all times thereafter before the sale or exchange, see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title I, §\u202f126(b) ,  Aug. 13, 1981 ,  95 Stat. 202 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to payments made after  June 30, 1981 , pursuant to sales or exchanges after such date.”\nAmendment by  section 1901(b)(3)(B) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nSection applicable to payments made after  Dec. 31, 1963 , on account of sales or exchanges of property after  June 30, 1963 , other than a sale or exchange pursuant to written contract, including an irrevocable written option, entered into before  July 1, 1963 , see  section 224(d) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 163 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1803(a)(9) ,  Oct. 22, 1986 ,  100 Stat. 2794 , provided that:  “In the case of any sale or exchange before  July 1, 1985 , to which section 483(f) of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of  Public Law 99–121  [ Oct. 11, 1985 ]) applies, such section shall be treated as providing that the discount rate to be used for purposes of section 483(c)(1) of such Code shall be 6 percent, compounded semiannually.”\nProvisions, respecting treatment of debt instruments received in exchange for property, relating to special rules for sales after  Dec. 31, 1984 , and before  July 1, 1985 , general rule for assumptions of loans, exception for assumptions of loans made on or before  Oct. 15, 1984 , and exception for assumptions of loans with respect to certain property, see section 44(b)(4)–(7) of  Pub. L. 98–369 , as amended, set out as an Effective Date note under  section 1271 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULE'},
  'content': 'An organization described in subsection (c) or (d) or section 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.\nAn organization exempt from taxation under subsection (a) shall be subject to tax to the extent provided in parts II, III, and VI of this subchapter, but (notwithstanding parts II, III, and VI of this subchapter) shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.\nThe following organizations are referred to in subsection (a): Religious or apostolic associations or corporations, if such associations or corporations have a common treasury or community treasury, even if such associations or corporations engage in business for the common benefit of the members, but only if the members thereof include (at the time of filing their returns) in their gross income their entire pro rata shares, whether distributed or not, of the taxable income of the association or corporation for such year. Any amount so included in the gross income of a member shall be treated as a dividend received.\nFor purposes of subsection (c)(5), the term “agricultural” includes the art or science of cultivating land, harvesting crops or aquatic resources, or raising livestock.\nThe term “lobbying expenditures” means expenditures for the purpose of influencing legislation (as defined in section 4911(d)).\nThe lobbying ceiling amount for any organization for any taxable year is 150 percent of the lobbying nontaxable amount for such organization for such taxable year, determined under section 4911.\nThe term “grass roots expenditures” means expenditures for the purpose of influencing legislation (as defined in section 4911(d) without regard to paragraph (1)(B) thereof).\nThe grass roots ceiling amount for any organization for any taxable year is 150 percent of the grass roots nontaxable amount for such organization for such taxable year, determined under section 4911.\nFor rules regarding affiliated organizations, see section 4911(f).\nFor purposes of this subsection, the term “qualified amateur sports organization” means any organization organized and operated exclusively to foster national or international amateur sports competition if such organization is also organized and operated primarily to conduct national or international competition in sports or to support and develop amateur athletes for national or international competition in sports.\nAn organization described in paragraph (3) or (4) of subsection (c) shall be exempt from tax under subsection (a) only if no substantial part of its activities consists of providing commercial-type insurance.\nFor purposes of this subsection, the issuance of annuity contracts shall be treated as providing insurance.\nThe term “startup capital” means any capital contributed to, and any program-related investments (within the meaning of section 4944(c)) made in, the risk pool before such pool commences operations.\nThe term “nonmember charitable organization” means any organization which is described in subsection (c)(3) and exempt from tax under subsection (a) and which is not a member of the risk pool and does not benefit (directly or indirectly) from the insurance coverage provided by the pool to its members.\nAn organization shall not fail to be treated as organized and operated exclusively for a charitable purpose for purposes of subsection (c)(3) solely because a hospital which is owned and operated by such organization participates in a provider-sponsored organization (as defined in section 1855(d) of the Social Security Act), whether or not the provider-sponsored organization is exempt from tax. For purposes of subsection (c)(3), any person with a material financial interest in such a provider-sponsored organization shall be treated as a private shareholder or individual with respect to the hospital.\nThe exemption from tax under subsection (a) with respect to any organization described in paragraph (2), and the eligibility of any organization described in paragraph (2) to apply for recognition of exemption under subsection (a), shall be suspended during the period described in paragraph (3).\nNo deduction shall be allowed under any provision of this title, including sections 170, 545(b)(2), 642(c), 2055, 2106(a)(2), and 2522, with respect to any contribution to an organization described in paragraph (2) during the period described in paragraph (3).\nNotwithstanding section 7428 or any other provision of law, no organization or other person may challenge a suspension under paragraph (1), a designation or identification described in paragraph (2), the period of suspension described in paragraph (3), or a denial of a deduction under paragraph (4) in any administrative or judicial proceeding relating to the Federal tax liability of such organization or other person.\nIf the credit or refund of any overpayment of tax described in subparagraph (A)(iii) is prevented at any time by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the 1-year period beginning on the date of the last determination described in subparagraph (A)(ii).\nIf the tax exemption of any organization is suspended under this subsection, the Internal Revenue Service shall update the listings of tax-exempt organizations and shall publish appropriate notice to taxpayers of such suspension and of the fact that contributions to such organization are not deductible during the period of such suspension.\nFor purposes of subparagraph (A)(ii), the applicable percentage is 50 percent.\nIn addition to the requirements under paragraph (1), an organization with respect to which the provision of credit counseling services is a substantial purpose and which is described in paragraph (4) of subsection (c) shall not be exempt from tax under subsection (a) unless such organization notifies the Secretary, in such manner as the Secretary may by regulations prescribe, that it is applying for recognition as a credit counseling organization.\nThe term “debt management plan services” means services related to the repayment, consolidation, or restructuring of a consumer’s debt, and includes the negotiation with creditors of lower interest rates, the waiver or reduction of fees, and the marketing and processing of debt management plans.\nA written policy requiring the organization to provide, without discrimination, care for emergency medical conditions (within the meaning of section 1867 of the Social Security Act ( 42 U.S.C. 1395dd )) to individuals regardless of their eligibility under the financial assistance policy described in subparagraph (A).\nAn organization meets the requirement of this paragraph only if the organization does not engage in extraordinary collection actions before the organization has made reasonable efforts to determine whether the individual is eligible for assistance under the financial assistance policy described in paragraph (4)(A).\nThe Secretary shall issue such regulations and guidance as may be necessary to carry out the provisions of this subsection, including guidance relating to what constitutes reasonable efforts to determine the eligibility of a patient under a financial assistance policy for purposes of paragraph (6).\nSections 306A and 306B of the Rural Electrification Act of 1936, referred to in subsec. (c)(12)(B)(iv), are classified to sections 936a and 936b, respectively, of Title 7, Agriculture. Section 311 of the Act was classified to  section 940a of Title 7  prior to repeal by  Pub. L. 104–127, title VII, §\u202f780 ,  Apr. 4, 1996 ,  110 Stat. 1151 .\nThe date of the enactment of this subparagraph, referred to in subsec. (c)(12)(H)(vii), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nThe Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (c)(12)(J)(i), is  Pub. L. 93–288 ,  May 22, 1974 ,  88 Stat. 143 , which is classified principally to chapter 68 (§\u202f5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 5121 of Title 42  and Tables.\nSection 831(b)(2)(B)(ii), referred to in subsec. (c)(15)(C), was redesignated section 831(b)(2)(C)(ii) by  Pub. L. 114–113, div. Q, title III, §\u202f333(a)(1)(B) ,  Dec. 18, 2015 ,  129 Stat. 3106 .\nThe Federal Mine Safety and Health Act of 1977, referred to in subsec. (c)(21)(D)(i), is  Pub. L. 91–173 ,  Dec. 30, 1969 ,  83 Stat. 742 , as amended by  Pub. L. 95–164 ,  Nov. 9, 1977 ,  91 Stat. 1290 . Part C of title IV of the Act is classified generally to part C (§\u202f931 et seq.) of subchapter IV of chapter 22 of Title 30, Mineral Lands and Mining. For complete classification of this Act to the Code, see Short Title note set out under  section 801 of Title 30  and Tables.\nSection 4223 of the Employee Retirement Income Security Act of 1974, referred to in subsec. (c)(22)(A)(i), (C), (D), is classified to  section 1403 of Title 29 , Labor.\nSection 4049 of the Employee Retirement Income Security Act of 1974, referred to in subsec. (c)(24), was classified to  section 1349 of Title 29 , prior to its repeal by  Pub. L. 100–203, title IX, §\u202f9312(a) ,  Dec. 22, 1987 ,  101 Stat. 1330–361 .\nThe date of the enactment of the Single-Employer Pension Plan Amendments Act of 1986, referred to in subsec. (c)(24), is the date of enactment of title XI of  Pub. L. 99–272 , which was approved  Apr. 7, 1986 .\nThe date of enactment of this subparagraph, referred to in subsec. (c)(27)(B)(iii)(I), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nSection 15(j) of the Railroad Retirement Act of 1974, referred to in subsec. (c)(28), is classified to  section 231n(j) of Title 45 , Railroads.\nSection 1322 of the Patient Protection and Affordable Care Act, referred to in subsec. (c)(29)(A), (B)(ii), is classified to  section 18042 of Title 42 , The Public Health and Welfare.\nThe Federal Credit Union Act, referred to in subsec. ( l )(1), is  act June 26, 1934, ch. 750 ,  48 Stat. 1216 , as amended. Title III of the Federal Credit Union Act is classified generally to subchapter III (§\u202f1795 et seq.) of chapter 14 of Title 12, Banks and Banking. For complete classification of this Act to the Code, see  section 1751 of Title 12  and Tables.\nSections 21A and 21B of the Federal Home Loan Bank Act, referred to in subsec. ( l )(2), (3), are classified to former section 1441a and section 1441b, respectively, of Title 12, Banks and Banking. Section 21A of the Act was repealed by  Pub. L. 111–203, title III, §\u202f364(b) ,  July 21, 2010 ,  124 Stat. 1555 .\nSections 1181(b) and 1855(d) of the Social Security Act, referred to in subsecs. ( l )(4) and ( o ), are classified to sections 1320e(b) and 1395w–25(d), respectively, of Title 42, The Public Health and Welfare.\nSections 212(a)(3)(B) and 219 of the Immigration and Nationality Act, referred to in subsec. (p)(2)(A), (C)(i), are classified to sections 1182(a)(3)(B) and 1189, respectively, of Title 8, Aliens and Nationality.\nThe International Emergency Economic Powers Act, referred to in subsec. (p)(2)(B), is title II of  Pub. L. 95–223 ,  Dec. 28, 1977 ,  91 Stat. 1626 , which is classified generally to chapter 35 (§\u202f1701 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see Short Title note set out under  section 1701 of Title 50  and Tables.\nSection 5 of the United Nations Participation Act of 1945, referred to in subsec. (p)(2)(B), is classified to  section 287c of Title 22 , Foreign Relations and Intercourse.\nSection 140(d)(2) of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989, referred to in subsec. (p)(2)(C)(i), is classified to  section 2656f(d)(2) of Title 22 , Foreign Relations and Intercourse.\nThe date of the enactment of this subsection, referred to in subsec. (p)(3)(A)(ii), is the date of enactment of  Pub. L. 108–121 , which was approved  Nov. 11, 2003 .\nThe date of the enactment of this subsection, referred to in subsec. (q)(2)(B)(ii), is the date of enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\n2019—Subsec. (c)(12)(J).  Pub. L. 116–94  added subpar. (J).\n2018—Subsec. (c)(12)(E).  Pub. L. 115–141, §\u202f109(b) , substituted “means—” for “means the Federal Energy Regulatory Commission and references to such term shall be treated as including the Public Utility Commission of Texas with respect to any ERCOT utility (as defined in section 212(k)(2)(B) of the Federal Power Act ( 16 U.S.C. 824k(k)(2)(B) )).” and added cls. (i) and (ii).\nSubsec. (c)(12)(I).  Pub. L. 115–123  added subpar. (I).\nSubsec. (c)(14)(B)(iv).  Pub. L. 115–141, §\u202f401(a)(122) , inserted period at end.\nSubsec. (c)(19)(B).  Pub. L. 115–141, §\u202f401(a)(123) , substituted “widows,” for “widows,,”.\nSubsec. (f)(3)(B).  Pub. L. 115–141, §\u202f401(a)(124) , substituted “section 115” for “section 115(a)”.\nSubsec. (p)(4).  Pub. L. 115–141, §\u202f401(b)(22) , struck out “,\u2000556(b)(2)” after “545(b)(2)”.\n2015—Subsec. (h)(4)(E) to (G).  Pub. L. 114–113  added subpar. (E) and redesignated former subpars. (E) and (F) as (F) and (G), respectively.\n2014—Subsec. (c)(20).  Pub. L. 113–295, §\u202f221(a)(19)(B)(iii) , struck out par. (20) which read as follows: “an organization or trust created or organized in the United States, the exclusive function of which is to form part of a qualified group legal services plan or plans, within the meaning of section 120. An organization or trust which receives contributions because of section 120(c)(5)(C) shall not be prevented from qualifying as an organization described in this paragraph merely because it provides legal services or indemnification against the cost of legal services unassociated with a qualified group legal services plan.”\nSubsec. (s).  Pub. L. 113–295, §\u202f221(a)(62) , struck out subsec. (s). Text read as follows: “For nonexemption of Communist-controlled organizations, see section 11(b) of the Internal Security Act of 1950 ( 64 Stat. 997 ;  50 U.S.C. 790(b) ).”\n2010—Subsec. (c)(9).  Pub. L. 111–152  inserted at end “For purposes of providing for the payment of sick and accident benefits to members of such an association and their dependents, the term ‘dependent’ shall include any individual who is a child (as defined in section 152(f)(1)) of a member who as of the end of the calendar year has not attained age 27.”\nSubsec. (c)(29).  Pub. L. 111–148, §\u202f1322(h)(1) , added par. (29).\nSubsec. ( l )(4).  Pub. L. 111–148, §\u202f6301(f) , added par. (4).\nSubsec. (r).  Pub. L. 111–148, §\u202f9007(a) , added subsec. (r). Former subsec. (r) redesignated (s).\nSubsec. (r)(5)(A).  Pub. L. 111–148, §\u202f10903(a) , substituted “the amounts generally billed” for “the lowest amounts charged”.\nSubsec. (s).  Pub. L. 111–148, §\u202f9007(a) , redesignated subsec. (r) as (s).\n2006—Subsec. (c)(21)(C).  Pub. L. 109–280, §\u202f862(a) , amended introductory provisions and cls. (i) and (ii) generally. Prior to amendment, introductory provisions and cls. (i) and (ii) read as follows: “Payments described in subparagraph (A)(i)(IV) may be made from such trust during a taxable year only to the extent that the aggregate amount of such payments during such taxable year does not exceed the lesser of—\n“(i) the excess (if any) (as of the close of the preceding taxable year) of—\n“(I) the fair market value of the assets of the trust, over\n“(II) 110 percent of the present value of the liability described in subparagraph (A)(i)(I) of such person, or\n“(ii) the excess (if any) of—\n“(I) the sum of a similar excess determined as of the close of the last taxable year ending before the date of the enactment of this subparagraph plus earnings thereon as of the close of the taxable year preceding the taxable year involved, over\n“(II) the aggregate payments described in subparagraph (A)(i)(IV) made from the trust during all taxable years beginning after the date of the enactment of this subparagraph.”\nSubsecs. (q), (r).  Pub. L. 109–280, §\u202f1220(a) , which directed the amendment of section 501 by adding subsec. (q) and redesignating former subsec. (q) as (r), without specifying the act to be amended, was executed by making the amendments to this section, which is section 501 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n2005—Subsec. (c)(12)(C).  Pub. L. 109–58, §\u202f1304(a) , struck out concluding provisions which read as follows: “Clauses (ii) through (v) shall not apply to taxable years beginning after  December 31, 2006 .”\nSubsec. (c)(12)(F).  Pub. L. 109–135, §\u202f412(bb)(1) , substituted “subparagraph (C)(iv)” for “subparagraph (C)(iii)”.\nSubsec. (c)(12)(G).  Pub. L. 109–135, §\u202f412(bb)(2) , substituted “subparagraph (C)(v)” for “subparagraph (C)(iv)”.\nSubsec. (c)(12)(H)(x).  Pub. L. 109–58, §\u202f1304(b) , struck out cl. (x) which read as follows: “This subparagraph shall not apply to taxable years beginning after  December 31, 2006 .”\nSubsec. (c)(22)(B)(ii).  Pub. L. 109–135, §\u202f412(cc) , substituted “clause (ii) of paragraph (21)(D)” for “clause (ii) of paragraph (21)(B)”.\n2004—Subsec. (c)(12)(C).  Pub. L. 108–357, §\u202f319(a)(1) , added cls. (ii) to (v) and concluding provisions and struck out former cl. (ii) which read as follows: “from the prepayment of a loan under section 306A, 306B, or 311 of the Rural Electrification Act of 1936 (as in effect on  January 1, 1987 ).”\nSubsec. (c)(12)(E) to (G).  Pub. L. 108–357, §\u202f319(a)(2) , added subpars. (E) to (G).\nSubsec. (c)(12)(H).  Pub. L. 108–357, §\u202f319(b) , added subpar. (H).\nSubsec. (c)(15)(A).  Pub. L. 108–218, §\u202f206(a) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “Insurance companies or associations other than life (including interinsurers and reciprocal underwriters) if the net written premiums (or, if greater, direct written premiums) for the taxable year do not exceed $350,000.”\nSubsec. (c)(15)(C).  Pub. L. 108–218, §\u202f206(b) , inserted before period at end “,\u2000except that in applying section 831(b)(2)(B)(ii) for purposes of this subparagraph, subparagraphs (B) and (C) of section 1563(b)(2) shall be disregarded”.\n2003—Subsec. (c)(19)(B).  Pub. L. 108–121, §\u202f105(a) , substituted “,\u2000widowers, ancestors, or lineal descendants” for “or widowers”.\nSubsecs. (p), (q).  Pub. L. 108–121, §\u202f108(a) , added subsec. (p) and redesignated former subsec. (p) as (q).\n2001—Subsec. (c)(18)(D)(iii).  Pub. L. 107–16, §\u202f611(d)(3)(C) , struck out “(other than paragraph (4) thereof)” after “section 402(g)”.\nSubsec. (c)(28).  Pub. L. 107–90  added par. (28).\n1998—Subsec. (n)(3).  Pub. L. 105–206, §\u202f6023(6) , substituted “subparagraph (E)(ii)” for “subparagraph (C)(ii)” in concluding provisions.\nSubsec. ( o ).  Pub. L. 105–206, §\u202f6023(7) , substituted “section 1855(d)” for “section 1853(e)”.\n1997—Subsec. (c)(26).  Pub. L. 105–34, §\u202f101(c) , inserted concluding provisions “A spouse and any qualifying child (as defined in section 24(c)) of an individual described in subparagraph (B) (without regard to this sentence) shall be treated as described in subparagraph (B).”\nSubsec. (c)(27).  Pub. L. 105–34, §\u202f963(a) , (b), designated existing provisions as subpar. (A), redesignated former subpar. (A) as cl. (i), redesignated subpar. (B) as cl. (ii) and former cls. (i) and (ii) of subpar. (B) as subcls. (I) and (II), respectively, of cl. (ii), redesignated subpar. (C) as cl. (iii) and former cls. (i) and (ii) of subpar. (C) as subcls. (I) and (II), respectively, of cl. (iii), and added subpar. (B).\nSubsec. (e)(1)(A).  Pub. L. 105–34, §\u202f974(a) , inserted “(including the purchase of patron accounts receivable on a recourse basis)” after “billing and collection”.\nSubsecs. ( o ), (p).  Pub. L. 105–33  added subsec. ( o ) and redesignated former subsec. ( o ) as (p).\n1996—Subsec. (c)(4).  Pub. L. 104–168  designated existing provisions as subpar. (A) and added subpar. (B).\nSubsec. (c)(21)(D)(ii)(III).  Pub. L. 104–188, §\u202f1704(j)(5) , substituted “section 101(7)” for “section 101(6)” and “1752(7)” for “1752(6)”.\nSubsec. (c)(26).  Pub. L. 104–191, §\u202f341(a) , added par. (26).\nSubsec. (c)(27).  Pub. L. 104–191, §\u202f342(a) , added par. (27).\nSubsecs. (n), ( o ).  Pub. L. 104–188, §\u202f1114(a) , added subsec. (n) and redesignated former subsec. (n) as ( o ).\n1993—Subsec. (c)(2).  Pub. L. 103–66, §\u202f13146(b) , inserted at end “Rules similar to the rules of subparagraph (G) of paragraph (25) shall apply for purposes of this paragraph.”\nSubsec. (c)(25)(G).  Pub. L. 103–66, §\u202f13146(a) , added subpar. (G).\n1992—Subsec. (c)(21).  Pub. L. 102–486  amended par. (21) generally, substituting present provisions consisting of subpars. (A) to (D) for former provisions consisting of subpars. (A) and (B).\n1989—Subsec. ( l ).  Pub. L. 101–73  amended subsec. ( l ) generally. Prior to amendment, subsec. ( l ) read as follows: “The organization described in this subsection is the Central Liquidity Facility established under title III of the Federal Credit Union Act ( 12 U.S.C. 1795  et seq.).”\n1988—Subsec. (c)(1).  Pub. L. 100–647, §\u202f1018(u)(15) , substituted “Any” for “any”.\nSubsec. (c)(12)(B)(iv).  Pub. L. 100–647, §\u202f2003(a)(1) , added cl. (iv).\nSubsec. (c)(12)(C).  Pub. L. 100–647, §\u202f2003(a)(2) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “In the case of a mutual or cooperative electric company, subparagraph (A) shall be applied without taking into account any income received or accrued from qualified pole rentals.”\nSubsec. (c)(17)(A)(ii), (iii), (18)(B), (C).  Pub. L. 100–647, §\u202f1018(u)(34) , made technical amendments to  Pub. L. 99–154, §\u202f1114(b)(14) . See 1986 Amendment note below.\nSubsec. (c)(18)(D)(iv).  Pub. L. 100–647, §\u202f1011(c)(7)(D) , added cl. (iv).\nSubsec. (c)(23).  Pub. L. 100–647, §\u202f1018(u)(14) , substituted “Any” for “any”.\nSubsec. (c)(25)(A).  Pub. L. 100–647, §\u202f1016(a)(1)(A) , inserted at end “For purposes of clause (iii), the term ‘real property’ shall not include any interest as a tenant in common (or similar interest) and shall not include any indirect interest.”\nSubsec. (c)(25)(C)(v).  Pub. L. 100–647, §\u202f1016(a)(3)(B) , struck out cl. (v) which read as follows: “any organization described in this paragraph.”\nSubsec. (c)(25)(D).  Pub. L. 100–647, §\u202f1016(a)(2) , substituted “A corporation or trust shall in no event be treated as described in subparagraph (A) unless such corporation or trust permits its shareholders or beneficiaries” for “A corporation or trust described in this paragraph must permit its shareholders or beneficiaries” in introductory text.\nSubsec. (c)(25)(E), (F).  Pub. L. 100–647, §\u202f1016(a)(3)(A) , (4), added subpars. (E) and (F).\nSubsec. (e)(1)(A).  Pub. L. 100–647, §\u202f6202(a) , inserted “(including the purchasing of insurance on a group basis)” after “purchasing”.\nSubsec. (m)(3)(E).  Pub. L. 100–647, §\u202f1010(b)(4)(A) , added subpar. (E).\nSubsec. (m)(5).  Pub. L. 100–647, §\u202f1010(b)(4)(B) , added par. (5).\n1987—Subsec. (c)(3).  Pub. L. 100–203  inserted “(or in opposition to)” after “in behalf of”.\n1986—Subsec. (c)(1)(A)(i).  Pub. L. 99–514, §\u202f1899A(15) , substituted “ July 18, 1984 ” for “the date of the enactment of the Tax Reform Act of 1984”.\nSubsec. (c)(14)(B)(iv).  Pub. L. 99–514, §\u202f1879(k)(1) , added cl. (iv).\nSubsec. (c)(15).  Pub. L. 99–514, §\u202f1024(b) , amended par. (15) generally. Prior to amendment, par. (15) read as follows: “Mutual insurance companies or associations other than life or marine (including inter-insurers and reciprocal underwriters) if the gross amount received during the taxable year from the items described in section 822(b) (other than paragraph (1)(D) thereof) and premiums (including deposits and assessments) does not exceed $150,000.”\nSubsec. (c)(17)(A)(ii), (iii), (18)(B), (C).  Pub. L. 99–514, §\u202f1114(b)(14) , as amended by  Pub. L. 100–647, §\u202f1018(u)(34) , substituted “highly compensated employees (within the meaning of section 414(q))” for “officers, shareholders, persons whose principal duties consist of supervising the work of other employees, or highly compensated employees”.\nSubsec. (c)(18)(D).  Pub. L. 99–514, §\u202f1109(a) , added subpar. (D).\nSubsec. (c)(24).  Pub. L. 99–272  added par. (24).\nSubsec. (c)(25).  Pub. L. 99–514, §\u202f1603(a) , added par. (25).\nSubsecs. (m), (n).  Pub. L. 99–514, §\u202f1012(a) , added subsec. (m) and redesignated former subsec. (m) as (n).\n1984—Subsec. (c)(1).  Pub. L. 98–369, §\u202f2813(b)(2) , designated existing provisions as subpar. (A) and added subpar. (B).\nSubsec. (c)(1)(A).  Pub. L. 98–369, §\u202f1079 , substituted provisions referring to corporations exempt from Federal income taxes under any Act of Congress as amended and supplemented before  July 18, 1984 , or under this title without regard to any provision of law not contained in this title and not contained in a revenue Act for provisions referring to corporations exempt from Federal income taxes under any Act of Congress as amended and supplemented.\nSubsec. (k).  Pub. L. 98–369, §\u202f1032(a) , added subsec. (k). Former subsec. (k) redesignated ( l ).\nSubsec. ( l ).  Pub. L. 98–369, §\u202f2813(b)(1) , added subsec. ( l ). Former subsec. ( l ) redesignated (m).\nPub. L. 98–369, §\u202f1032(a) , redesignated former subsec. (k) as ( l ).\nSubsec. (m).  Pub. L. 98–369, §\u202f2813(b)(1) , redesignated former subsec. ( l ) as (m).\n1983—Subsec. (c)(23).  Pub. L. 97–448  substituted “75 percent” for “25 percent”.\n1982—Subsec. (c)(19).  Pub. L. 97–248, §\u202f354(a)(1) , substituted “past or present members of the Armed Forces of the United States” for “war veterans” after “A post or organization of”.\nSubsec. (c)(19)(B).  Pub. L. 97–248, §\u202f354(a)(2) , substituted “past or present members of the Armed Forces of the United States” for “war veterans” wherever appearing, struck out “veterans (but not war veterans), or are” after “individuals who are”, and substituted “or of cadets” for “or such individuals” before “,\u2000and”.\nSubsec. (c)(23).  Pub. L. 97–248, §\u202f354(b) , added par. (23).\nSubsecs. (j), (k).  Pub. L. 97–248, §\u202f286(a) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1981—Subsec. (c)(21)(B)(iii).  Pub. L. 97–119  substituted “established under section 9501” for “established under section 3 of the Black Lung Benefits Revenue Act of 1977”.\n1980—Subsec. (c)(12).  Pub. L. 96–605  designated existing provision as subpar. (A), struck out provision that, in the case of any mutual or cooperative telephone company, the 85 per cent or more income requirement be applied without taking into account any income received or accrued from a nonmember telephone company for the performance of communication services which involve members of such mutual or cooperative telephone company, and added subpars. (B) to (D).\nSubsec. (c)(21).  Pub. L. 96–222  substituted “Federal Mine Safety and Health Act of 1977” for “Federal Coal Mine Health and Safety Act of 1969”.\nSubsec. (c)(22).  Pub. L. 96–364  added par. (22).\nSubsec. (i).  Pub. L. 96–601  inserted provision that the restriction on religious discrimination not apply to an auxiliary of a fraternal beneficiary society if the society is described in subsec. (c)(8) of this section, is exempt from income tax under subsec. (a) of this section, and limits its membership to the members of a particular religion or to a club which in good faith limits its membership to the members of a particular religion in order to further the teachings or principles of that religion, and not to exclude individuals of a particular race or color.\n1978—Subsec. (c)(12).  Pub. L. 95–345  inserted provision relating to applicability of statutory provisions to mutual or cooperative telephone company of income received or accrued from a nonmember telephone company.\nSubsec. (c)(20).  Pub. L. 95–600, §\u202f703(b)(2) , substituted “this paragraph” for “section 501(c)(20)”.\nSubsec. (c)(21).  Pub. L. 95–227  added par. (21).\nSubsecs. (g), (i).  Pub. L. 95–600, §\u202f703(g)(2)(B) , redesignated subsec. (g), which was added by  section 2(a) of Pub. L. 94–568 , as subsec. (i). Former subsec. (i), relating to cross reference, redesignated (j).\nSubsecs. (i), (j).  Pub. L. 95–600, §\u202f703(g)(2)(A) , amended  Pub. L. 95–600, §\u202f2(a) . See 1976 Amendment note below.\n1976—Subsec. (c)(3).  Pub. L. 94–455 , §§\u202f1313(a), 1307(d)(1)(A), inserted “or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment)” after “educational purposes” and inserted “(except as otherwise provided in subsection (h))” after “influence legislation”.\nSubsec. (c)(7).  Pub. L. 94–568, §\u202f1(a) , struck out requirement that clubs be “operated exclusively” for specified purposes but required that substantially all of club activities be for specified purposes.\nSubsec. (c)(17), (18).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(20).  Pub. L. 94–455, §\u202f2134(b) , added par. (20).\nSubsec. (e)(1)(A).  Pub. L. 94–455, §\u202f1312(a) , inserted “clinical” after “food”.\nSubsec. (g).  Pub. L. 94–568, §\u202f2(a) , added subsec. (g) relating to prohibition of discrimination by certain social clubs.\nPub. L. 94–455, §\u202f2113(a) , added subsec. (g) defining agricultural. Former subsec. (g) redesignated (h).\nSubsec. (h).  Pub. L. 94–455 , §§\u202f1307(a)(1), 2113(a), added subsec. (h). Former subsec. (g), relating to cross reference, redesignated (h) and further redesignated (i).\nSubsec. (i).  Pub. L. 94–568, §\u202f2(a) , as amended by  Pub. L. 95–600, §\u202f703(g)(2)(A) , added subsec. (i). Former subsec. (i) redesignated (j).\nPub. L. 94–455, §\u202f1307(a)(1) , redesignated subsec. (h), relating to cross reference, as (i).\nSubsec. (j).  Pub. L. 94–568, §\u202f2(a) , as amended by  Pub. L. 95–600, §\u202f703(g)(2)(A) , redesignated subsec. (i), relating to cross reference, as (j).\n1975—Subsec. (b).  Pub. L. 93–625  inserted references to part VI of this subchapter.\n1974—Subsecs. (f), (g).  Pub. L. 93–310  added subsec. (f) and redesignated former subsec. (f) as (g).\n1972—Subsec. (c)(19).  Pub. L. 92–418  added par. (19).\n1970—Subsec. (c)(13). Pub. L., 91–618 substituted “corporation chartered solely for the purpose of disposal of bodies by burial or cremation which is not permitted” for “corporation chartered solely for burial purposes as a cemetery corporation and is not permitted”.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f101(j)(3) , struck out reference to section 504.\nSubsec. (b).  Pub. L. 91–172, §\u202f101(j)(4) , inserted reference to certain other activities in heading and to part III in text, and struck out reference to tax on unrelated income.\nSubsec. (c).  Pub. L. 91–172 , §§\u202f101(j)(5), 121(b)(6)(A), substituted “part IV” for “part III” after “Corporations organized by an association subject to” and added par. 18.\nSubsec. (c)(9).  Pub. L. 91–172, §\u202f121(b)(5)(A) , inserted reference to designated beneficiaries and struck out reference to 85 percent or more income of voluntary employees’ beneficiary associations.\nSubsec. (c)(10).  Pub. L. 91–172, §\u202f121(b)(5)(A) , substituted provisions concerning domestic fraternal societies, orders, or associations, operating under the lodge system, for provisions covering voluntary employees’ beneficiary associations which would pay benefits to designated beneficiaries of members.\nSubsec. (e).  Pub. L. 91–172, §\u202f101(j)(6) , substituted “section 170(b)(1)(A)(iii)” for “section 503(b)(5)” in last sentence.\n1968—Subsecs. (e), (f).  Pub. L. 90–364  added subsec. (e) and redesignated former subsec. (e) as (f).\n1966—Subsec. (c)(6).  Pub. L. 89–800  inserted reference to professional football leagues (whether or not administering a pension fund for football players).\nSubsec. (c)(14).  Pub. L. 89–352  designated as subpar. (A) provisions covering credit unions which were formerly set out preceding subpar. (A), designated as subpar. (B) and clauses (i), (ii), and (iii) thereunder provisions covering corporation or associations without capital stock organized before  Sept. 1, 1957 , which formerly were set out as provisions preceding subpar. (A) and as subpars. (A), (B), and (C), respectively, and added subpar. (C).\n1962—Subsec. (c)(15).  Pub. L. 87–834  substituted “$150,000” for “$75,000”.\n1960—Subsec. (c)(14).  Pub. L. 86–428  substituted “ September 1, 1957 ” for “ September 1, 1951 ”.\nSubsec. (c)(17).  Pub. L. 86–667  added par. (17).\n1956—Subsec. (c)(15). Act  Mar. 13, 1956 , substituted “the items described in section 822(b) (other than paragraph (1)(D) thereof)” for “interest, dividends, rents,”.\nPub. L. 116–94, div. Q, title III, §\u202f301(b) ,  Dec. 20, 2019 ,  133 Stat. 3248 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–141, div. U, title I, §\u202f109(c) ,  Mar. 23, 2018 ,  132 Stat. 1171 , provided that:  “The amendments made by this section [amending this section and  section 1361 of this title ] shall take effect as if included in section 319 of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ].”\nAmendment by  Pub. L. 115–123  applicable to taxable years beginning after  Feb. 9, 2018 , see  section 40501(c)(2) of Pub. L. 115–123 , set out in a note under  section 45J of this title .\nAmendment by  Pub. L. 114–113  applicable to contributions made on and after  Dec. 18, 2015 , see  section 331(c) of Pub. L. 114–113 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–148, title IX, §\u202f9007(f) ,  Mar. 23, 2010 ,  124 Stat. 858 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [enacting  section 4959 of this title  and amending this section and  section 6033 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Mar. 23, 2010 ]. \n \n “(2)   Community health needs assessment .— The requirements of section 501(r)(3) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to taxable years beginning after the date which is 2 years after the date of the enactment of this Act. \n \n “(3)   Excise tax .— The amendments made by subsection (b) [enacting  section 4959 of this title ] shall apply to failures occurring after the date of the enactment of this Act.”\nPub. L. 111–148, title X, §\u202f10903(b) ,  Mar. 23, 2010 ,  124 Stat. 1016 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Mar. 23, 2010 ].”\nPub. L. 109–280, title VIII, §\u202f862(b) ,  Aug. 17, 2006 ,  120 Stat. 1021 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–280, title XII, §\u202f1220(c) ,  Aug. 17, 2006 ,  120 Stat. 1089 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 513 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(2)   Transition rule for existing organizations .— In the case of any organization described in paragraph (3) or (4) of section 501(c) of the Internal Revenue Code of 1986 and with respect to which the provision of credit counseling services is a substantial purpose on the date of the enactment of this Act, the amendments made by this section shall apply to taxable years beginning after the date which is 1 year after the date of the enactment of this Act.”\nPub. L. 109–58, title XIII, §\u202f1304(c) ,  Aug. 8, 2005 ,  119 Stat. 997 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 108–357, title III, §\u202f319(e) ,  Oct. 22, 2004 ,  118 Stat. 1473 , provided that:  “The amendments made by this section [amending this section and sections 512 and 1381 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–218, title II, §\u202f206(e) ,  Apr. 10, 2004 ,  118 Stat. 611 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 831 of this title ] shall apply to taxable years beginning after  December 31, 2003 . \n \n “(2)   Transition rule for companies in receivership or liquidation .— In the case of a company or association which— “(A)  for the taxable year which includes  April 1, 2004 , meets the requirements of section 501(c)(15)(A) of the Internal Revenue Code of 1986, as in effect for the last taxable year beginning before  January 1, 2004 , and \n \n “(B)  on  April 1, 2004 , is in a receivership, liquidation, or similar proceeding under the supervision of a State court, \n \n\n the amendments made by this section shall apply to taxable years beginning after the earlier of the date such proceeding ends or  December 31, 2007 .”\nPub. L. 108–121, title I, §\u202f105(b) ,  Nov. 11, 2003 ,  117 Stat. 1338 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 11, 2003 ].”\nPub. L. 108–121, title I, §\u202f108(b) ,  Nov. 11, 2003 ,  117 Stat. 1341 , provided that:  “The amendments made by this section [amending this section] shall apply to designations made before, on, or after the date of the enactment of this Act [ Nov. 11, 2003 ].”\nAmendment by  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nAmendment by  section 101(c) of Pub. L. 105–34  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 101(e) of Pub. L. 105–34 , set out as an Effective Date note under  section 24 of this title .\nPub. L. 105–34, title IX, §\u202f963(c) ,  Aug. 5, 1997 ,  111 Stat. 892 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title IX, §\u202f974(b) ,  Aug. 5, 1997 ,  111 Stat. 898 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 105–33, title IV, §\u202f4041(b) ,  Aug. 5, 1997 ,  111 Stat. 360 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–191, title III, §\u202f341(b) ,  Aug. 21, 1996 ,  110 Stat. 2070 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 104–191, title III, §\u202f342(b) ,  Aug. 21, 1996 ,  110 Stat. 2071 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 21, 1996 ].”\nPub. L. 104–188, title I, §\u202f1114(b) ,  Aug. 20, 1996 ,  110 Stat. 1760 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 104–168, title XIII, §\u202f1311(d)(3) ,  July 30, 1996 ,  110 Stat. 1478 , provided that: \n “(A)   In general .— The amendment made by subsection (b) [amending this section] shall apply to inurement occurring on or after  September 14, 1995 . \n \n “(B)   Binding contracts .— The amendment made by subsection (b) shall not apply to any inurement occurring before  January 1, 1997 , pursuant to a written contract which was binding on  September 13, 1995 , and at all times thereafter before such inurement occurred.”\nPub. L. 103–66, title XIII, §\u202f13146(c) ,  Aug. 10, 1993 ,  107 Stat. 443 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning on or after  January 1, 1994 .”\nAmendment by  Pub. L. 102–486  applicable to taxable years beginning after  Dec. 31, 1991 , see  section 1940(d) of Pub. L. 102–486 , set out as a note under  section 192 of this title .\nPub. L. 101–73, title XIV, §\u202f1402(b) ,  Aug. 9, 1989 ,  103 Stat. 551 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 9, 1989 ].”\nAmendment by  section 1011(c)(7)(D) of Pub. L. 100–647  applicable to plan years beginning after  Dec. 31, 1987 , with exception in case of a plan described in  section 1105(c)(2) of Pub. L. 99–514 , see  section 1011(c)(7)(E) of Pub. L. 100–647 , set out as a note under  section 401 of this title .\nPub. L. 100–647, title I, §\u202f1016(a)(1)(B) ,  Nov. 10, 1988 ,  102 Stat. 3573 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply with respect to property acquired by the organization after  June 10, 1987 , except that such amendment shall not apply to any property acquired after  June 10, 1987 , pursuant to a binding written contract in effect on  June 10, 1987 , and at all times thereafter before such acquisition.”\nAmendment by sections 1010(b)(4), 1016(a)(2)–(4), and 1018(u)(14), (15), (34) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title II, §\u202f2003(a)(3) ,  Nov. 10, 1988 ,  102 Stat. 3598 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after the date of the enactment of the Omnibus Budget Reconciliation Act of 1986 [ Oct. 21, 1986 ].”\nPub. L. 100–647, title VI, §\u202f6202(b) ,  Nov. 10, 1988 ,  102 Stat. 3730 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to purchases before, on, or after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by  Pub. L. 100–203  applicable with respect to activities after  Dec. 22, 1987 , see  section 10711(c) of Pub. L. 100–203 , set out as a note under  section 170 of this title .\nAmendment by  section 1012(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1012(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 833 of this title .\nAmendment by  section 1024(b) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  section 1109(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1109(c) of Pub. L. 99–514 , set out as a note under  section 219 of this title .\nAmendment by  section 1114(b)(14) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1114(c)(1) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nPub. L. 99–514, title XVI, §\u202f1603(c) ,  Oct. 22, 1986 ,  100 Stat. 2769 , provided that:  “The amendments made by this section [amending this section and  section 514 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title XVIII, §\u202f1879(k)(2) ,  Oct. 22, 1986 ,  100 Stat. 2909 , provided that:  “The amendments made by this subsection [amending this section] shall apply to taxable years ending after  August 13, 1981 .”\nAmendment by  Pub. L. 99–272  effective  Jan. 1, 1986 , with certain exceptions, see  section 11019 of Pub. L. 99–272 , set out as a note under  section 1341 of Title 29 , Labor.\nAmendment by  section 1032 of Pub. L. 98–369  applicable to taxable years beginning after  July 18, 1984 , see  section 1032(c) of Pub. L. 98–369 , set out as a note under  section 170 of this title .\nAmendment by  section 2813(b) of Pub. L. 98–369  effective  Oct. 1, 1979 , see  section 2813(c) of Pub. L. 98–369 , set out as an Effective Date note under  section 1795k of Title 12 , Banks and Banking.\nAmendment by  Pub. L. 97–448  effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 311(d) of Pub. L. 97–448 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f286(c) ,  Sept. 3, 1982 ,  96 Stat. 570 , provided that:  “The amendments made by this section [amending this section and sections 170, 2055, and 2522 of this title] shall take effect on  October 5, 1976 .”\nPub. L. 97–248, title III, §\u202f354(c) ,  Sept. 3, 1982 ,  96 Stat. 641 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Sept. 3, 1982 ].”\nAmendment by  Pub. L. 97–119  effective  Jan. 1, 1982 , see  section 103(d)(1) of Pub. L. 97–119 , set out as an Effective Date note under  section 9501 of this title .\nPub. L. 96–605, title I, §\u202f106(c)(1) ,  Dec. 28, 1980 ,  94 Stat. 3524 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to all taxable years to which the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies.”\nPub. L. 96–601, §\u202f3(b) ,  Dec. 24, 1980 ,  94 Stat. 3496 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  October 20, 1976 .”\nAmendment by  Pub. L. 96–364  applicable to taxable years ending after  Sept. 26, 1980 , see  section 210(c) of Pub. L. 96–364 , set out as an Effective Date note under  section 194A of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as an Effective Date of 1980 Amendment note under  section 32 of this title .\nAmendment by section 703(b)(2), (g)(2)(B) of  Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nPub. L. 95–600, title VII, §\u202f703(g)(2)(C) ,  Nov. 6, 1978 ,  92 Stat. 2940 , provided that:  “The amendments made by this paragraph [amending this section] shall take effect on  October 20, 1976 , as if included in  Public Law 94–568 .”\nPub. L. 95–345, §\u202f1(b) ,  Aug. 15, 1978 ,  92 Stat. 481 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1974 .”\nAmendment by  Pub. L. 95–227  applicable with respect to contributions, acts, and expenditures made after  Dec. 31, 1977 , in and for taxable years beginning after such date, see  section 4(f) of Pub. L. 95–227 , set out as a note under  section 192 of this title .\nPub. L. 94–568, §\u202f1(d) ,  Oct. 20, 1976 ,  90 Stat. 2697 , provided that:  “The amendments made by this section [amending this section and sections 277 and 512 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 20, 1976 ].”\nPub. L. 94–568, §\u202f2(b) ,  Oct. 20, 1976 ,  90 Stat. 2697 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 20, 1976 ].”\nPub. L. 94–455, title XIII, §\u202f1307(e) ,  Oct. 4, 1976 ,  90 Stat. 1728 , provided that:  \n “The amendments made by this section [amending this section and sections 170, 275, 2055, 2106, 2522, 6104, 6161, 6201, 6211, 6212, 6213, 6214, 6344, 6501, 6512, 6601, and 7422 of this title and enacting sections 504 and 4911 of this title] shall apply— \n “(1)  except as otherwise specified in paragraph (2), in the case of amendments to subtitle A, to taxable years beginning after  December 31, 1976 ; \n \n “(2)  in the case of the amendments made by subsection (a)(2) [enacting  section 504 of this title ], to activities occurring after the date of the enactment of this Act [ Oct. 4, 1976 ]; \n \n “(3)  in the case of amendments to chapter 11, to the estates of decedents dying after  December 31, 1976 ; \n \n “(4)  in the case of amendments to chapter 12, to gifts in calendar years beginning after  December 31, 1976 ; \n \n “(5)  in the case of amendments to subtitle D, to taxable years beginning after  December 31, 1976 ; and \n \n “(6)  in the case of amendments to subtitle F, on and after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 94–455, title XIII, §\u202f1312(b) ,  Oct. 4, 1976 ,  90 Stat. 1730 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 1976 .”\nPub. L. 94–455, title XIII, §\u202f1313(d) ,  Oct. 4, 1976 ,  90 Stat. 1730 , provided that:  “The amendments made by this section [amending this section and sections 170, 2055, and 2522 of this title] shall apply on the day following the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 94–455, title XXI, §\u202f2113(b) ,  Oct. 4, 1976 ,  90 Stat. 1907 , provided that:  “The amendment made by this section [amending this section] applies to taxable years ending after  December 31, 1975 .”\nPub. L. 94–455, title XXI, §\u202f2134(e) ,  Oct. 4, 1976 ,  90 Stat. 1928 , as amended by  Pub. L. 95–600, title VII, §\u202f703(b)(1) ,  Nov. 6, 1978 ,  92 Stat. 2939 ;  Pub. L. 97–34, title VIII, §\u202f802(b) ,  Aug. 13, 1981 ,  95 Stat. 349 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), the amendments made by this section [enacting  section 120 of this title  and amending this section] shall apply to taxable years beginning after  December 31, 1976 . \n \n “(2)   Notice requirement.— For purposes of [former] section 120(d)(7) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] the time prescribed by the Secretary of the Treasury by regulations for giving the notice required by section 120(c)(4) of such Code shall not expire before the 90th day after the day on which regulations prescribed under such section 120(c)(4) first become final. \n \n “(3)   Existing plans.— “(A)  For purposes of [former] section 120 of the Internal Revenue Code of 1986, a written group legal services plan which was in existence on  June 4, 1976 , shall be considered as satisfying the requirements of subsections (b) and (c) of such section 120 for the period ending with the compliance date (determined under subparagraph (B)). \n \n “(B)   Compliance date.— For purposes of this paragraph, the term ‘compliance date’ means— “(i)  the date occurring 180 days after the date of the enactment of this Act [ Oct. 4, 1976 ], or \n \n “(ii)  if later, in the case of a plan which is maintained pursuant to one or more agreements which the Secretary of Labor finds to be collective bargaining agreements, the earlier of  December 31, 1981 , or the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act [ Oct. 4, 1976 ]).”\nAmendment by  Pub. L. 93–625  applicable to taxable years beginning after  Dec. 31, 1974 , see  section 10(e) of Pub. L. 93–625 , set out as an Effective Date note under  section 527 of this title .\nPub. L. 93–310, §\u202f3(b) ,  June 8, 1974 ,  88 Stat. 235 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years ending after  December 31, 1973 .”\nPub. L. 92–418, §\u202f1(c) ,  Aug. 29, 1972 ,  86 Stat. 656 , provided that:  “The amendments made by this section [amending this section and  section 512 of this title ] shall apply to taxable years beginning after  December 31, 1969 .”\nPub L. 91–618, §\u202f2,  Dec. 31, 1970 ,  84 Stat. 1855 , provided that: “The amendment made by the first section of this Act [amending this section] shall apply to taxable years ending after the date of enactment of this Act [ Dec. 31, 1970 ].”\nAmendment by  section 101(j)(3) of Pub. L. 91–172  effective  Jan. 1, 1970 , except that amendment of subsec. (a) of this section applicable to taxable years beginning after  Dec. 31, 1969 , see section 101(k)(1), (2)(B) of  Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by section 121(b)(5)(A), (6)(A) of  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nPub. L. 90–364, title I, §\u202f109(b) ,  June 28, 1968 ,  82 Stat. 270 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ June 28, 1968 ].”\nPub. L. 89–800, §\u202f6(c) ,  Nov. 8, 1966 ,  80 Stat. 1516 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Nov. 8, 1966 ].”\nPub. 89–352, §\u202f3,  Feb. 2, 1966 ,  80 Stat. 4 , provided in part that: “The amendment made by the first section of this Act [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Feb. 2, 1966 ].”\nPub. L. 87–834, §\u202f8(h) ,  Oct. 16, 1962 ,  76 Stat. 999 , provided that:  “The amendments made by this section [enacting sections 823 to 826 of this title, amending this section and sections 821, 822, 832, 841, 1016, and 1201 of this title, and redesignating former section 823 as  section 822(f) of this title ] (other than by subsection (f) [amending  section 831 of this title ]) shall apply with respect to taxable years beginning after  December 31, 1962 .”\nPub. L. 86–667, §\u202f6 ,  July 14, 1960 ,  74 Stat. 536 , provided that: \n “(a)  Except as provided in subsection (b), the amendments made by this Act [amending this section and sections 503, 511, 513, and 514 of this title] shall apply to taxable years beginning after  December 31, 1959 . \n \n “(b)  In the case of loans, the amendments made by section 2 of this Act [amending  section 503 of this title ] shall apply only to loans made, renewed, or continued after  December 31, 1959 .”\nPub. L. 86–428, §\u202f2 ,  Apr. 22, 1960 ,  74 Stat. 54 , provided that:  “The amendment made by this Act [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1959 .”\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note under  section 316 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions that nothing in amendment by  section 401(b)(22) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 111–148, title IX, §\u202f9007(c) ,  Mar. 23, 2010 ,  124 Stat. 857 , provided that:  “The Secretary of the Treasury or the Secretary’s delegate shall review at least once every 3 years the community benefit activities of each hospital organization to which section 501(r) of the Internal Revenue Code of 1986 (as added by this section) applies.”\nPub. L. 111–148, title IX, §\u202f9007(e) ,  Mar. 23, 2010 ,  124 Stat. 858 , provided that: \n “(1)   Report on levels of charity care .— The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall submit to the Committees on Ways and Means, Education and Labor [now Committee on Education and the Workforce], and Energy and Commerce of the House of Representatives and to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate an annual report on the following: “(A)  Information with respect to private tax-exempt, taxable, and government-owned hospitals regarding— “(i)  levels of charity care provided, \n \n “(ii)  bad debt expenses, \n \n “(iii)  unreimbursed costs for services provided with respect to means-tested government programs, and \n \n “(iv)  unreimbursed costs for services provided with respect to non-means tested government programs. \n \n \n “(B)  Information with respect to private tax-exempt hospitals regarding costs incurred for community benefit activities. \n \n \n “(2)   Report on trends.— “(A)   Study .— The Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall conduct a study on trends in the information required to be reported under paragraph (1). \n \n “(B)   Report .— Not later than 5 years after the date of the enactment of this Act [ Mar. 23, 2010 ], the Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall submit a report on the study conducted under subparagraph (A) to the Committees on Ways and Means, Education and Labor [now Committee on Education and the Workforce], and Energy and Commerce of the House of Representatives and to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate.”\nPub. L. 107–134, title I, §\u202f104 ,  Jan. 23, 2002 ,  115 Stat. 2431 , provided that: \n “(a)   In General .— For purposes of the Internal Revenue Code of 1986— “(1)  payments made by an organization described in section 501(c)(3) of such Code by reason of the death, injury, wounding, or illness of an individual incurred as the result of the terrorist attacks against the United States on  September 11, 2001 , or an attack involving anthrax occurring on or after  September 11, 2001 , and before  January 1, 2002 , shall be treated as related to the purpose or function constituting the basis for such organization’s exemption under section 501 of such Code if such payments are made in good faith using a reasonable and objective formula which is consistently applied; and \n \n “(2)  in the case of a private foundation (as defined in section 509 of such Code), any payment described in paragraph (1) shall not be treated as made to a disqualified person for purposes of section 4941 of such Code. \n \n \n “(b)   Effective Date .— This section shall apply to payments made on or after  September 11, 2001 .”\nPub. L. 104–168, title XIII, §\u202f1311(b)(2) ,  July 30, 1996 ,  110 Stat. 1478 , provided that:  “In the case of an organization operating on a cooperative basis which, before the date of the enactment of this Act [ July 30, 1996 ], was determined by the Secretary of the Treasury or his delegate, to be described in section 501(c)(4) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, the allocation or return of net margins or capital to the members of such organization in accordance with its incorporating statute and bylaws shall not be treated for purposes of such Code as the inurement of the net earnings of such organization to the benefit of any private shareholder or individual. The preceding sentence shall apply only if such statute and bylaws are substantially as such statute and bylaws were in existence on the date of the enactment of this Act.”\nPub. L. 100–647, title I, §\u202f1013(i) ,  Nov. 10, 1988 ,  102 Stat. 3559 , provided that:  “In accordance with section 1302 of the Reform Act [ Pub. L. 99–514 , set out as a note below], each amendment and other provision of this Act [see Tables for classification] which applies to private activity bonds shall, unless otherwise expressly provided, apply to qualified 501(c)(3) bonds.”\nPub. L. 100–647, title VI, §\u202f6203 ,  Nov. 10, 1988 ,  102 Stat. 3730 , provided that:  “Subparagraph (A) of section 501(c)(12) of the 1986 Code shall be applied without taking into account any income attributable to the cancellation of any loan originally made or guaranteed by the United States (or any agency or instrumentality thereof) if such cancellation occurs after 1986 and before 1990.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XIII, §\u202f1302 ,  Oct. 22, 1986 ,  100 Stat. 2658 , provided that:  “Nothing in the treatment of section 501(c)(3) bonds as private activity bonds under the amendments made by this title [enacting sections 141 to 150 and 7703 of this title, amending sections 2, 22, 25, 32, 86, 103, 105, 152, 153, 163, 172, 194, 269A, 414, 879, 1016, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title, repealing sections 103A, 1391 to 1397, and 6039B of this title, enacting provisions set out as notes under sections 141 and 148 of this title, and amending provisions set out as a note under  section 103A of this title ] shall be construed as indicating how section 501(c)(3) bonds will be treated in future legislation, and any change in future legislation applicable to private activity bonds shall apply to section 501(c)(3) bonds only if expressly provided in such legislation.”\nPub. L. 99–514, title XVI, §\u202f1605 ,  Oct. 22, 1986 ,  100 Stat. 2769 , provided that: \n “(a)   In General .— For purposes of the Internal Revenue Code of 1986, an organization shall be treated as an organization organized and operated exclusively for charitable purposes if such organization— “(1)  is organized and operated exclusively— “(A)  to provide for (directly or by arranging for and supervising the performance by independent contractors)— “(i)  reviewing technology disclosures from qualified organizations, \n \n “(ii)  obtaining protection for such technology through patents, copyrights, or other means, and \n \n “(iii)  licensing, sale, or other exploitation of such technology, \n \n \n “(B)  to distribute the income therefrom, to such qualified organizations after paying expenses and other amounts as agreed with the originating qualified organizations, and \n \n “(C)  to make research grants to such qualified organizations, \n \n \n “(2)  regularly provides the services and research grants described in paragraph (1) exclusively to 1 or more qualified organizations, except that research grants may be made to such qualified organizations through an organization which is controlled by 1 or more organizations each of which— “(A)  is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 or the income of which is excluded from taxation under section 115 of such Code, and \n \n “(B)  may be a recipient of the services or research grants described in paragraph (1), \n \n \n “(3)  derives at least 80 percent of its gross revenues from providing services to qualified organizations located in the same State as the State in which such organization has its principal office, and \n \n “(4)  was incorporated on  July 20, 1981 . \n \n \n “(b)   Qualified Organizations .— For purposes of this section, the term ‘qualified organization’ has the same meaning given to such term by subparagraphs (A) and (B) of section 41(e)(6) (as redesignated by section 231(d)(2)) of the Internal Revenue Code of 1986. \n \n “(c)   Treatment of Investment in a Technology Transfer Service Organization.— “(1)   In general .— A qualified investment made by a private foundation in an organization described in subparagraph (C) shall be treated as an investment described in section 4944(c) of the Internal Revenue Code of 1986 and shall not result in imposition of taxes under section 4941, 4943, 4944, 4945, or 507(c) of such Code. \n \n “(2)   Definitions .— For purposes of this subsection— “(A)   Qualified investment .— The term ‘qualified investment’ means a transfer by a private foundation of— “(i)  all of the patents, copyrights, know-how, and other technology or rights thereto of the private foundation, and \n \n “(ii)  investment assets, net receivables, and cash not exceeding $35,000,000, \n \n\n \u2001\u2001to such organization in exchange for debt. \n \n “(B)   Private foundation .— The term ‘private foundation’ means— “(i)  a nonprofit corporation which was incorporated before 1913 which is described in sections 501(c)(3) and 509(a) of such Code, and which is exempt from taxation under section 501(a) of such Code, and \n \n “(ii)  the principal purposes of which are to support research by and to provide technology transfer services to organizations described in section 170(b)(1)(A) of such Code— \u2001\u2001\u2001\u2001\u2001“(I)  which are exempt from taxation under section 501(a) of such Code, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the income of which is excluded from taxation under section 115 of such Code. \n \n \n \n “(C)   Technology transfer organization .— The term ‘technology transfer organization’ means a corporation established after the date of the enactment of this Act [ Oct. 22, 1986 ]— “(i)  which is organized and operated to advance the public welfare through the provision of technology transfer services to research organizations, \n \n “(ii)  no part of the net earnings of which inures to the benefit of, or is distributable to, any private shareholder, individual, or entity, other than a private foundation or research organization, \n \n “(iii)  which does not participate in, or intervene in (including the publishing or distributing of statements) any political campaign on behalf of any candidate for public office, \n \n “(iv)  no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and \n \n “(v)  upon liquidation or dissolution of which all of its net assets can be distributed only to research organizations. \n \n \n \n \n “(d)   Effective Date .— This section shall take effect on the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 94–455, title XIII, §\u202f1313(c) ,  Oct. 4, 1976 ,  90 Stat. 1730 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “An organization which (without regard to the amendments made by this section [amending this section and sections 170, 2055, and 2522 of this title]) is an organization described in section 170(c)(2)(B), 501(c)(3), 2055(a)(2), or 2522(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall not be treated as an organization not so described as a result of the amendments made by this section.”\nPub. L. 93–406, title II, §\u202f1022(i) ,  Sept. 2, 1974 ,  88 Stat. 942 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule .— Effective for taxable years beginning after  December 31, 1973 , for purposes of section 501(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to exemption from tax), any trust forming part of a pension, profit-sharing, or stock bonus plan all of the participants of which are residents of the Commonwealth of Puerto Rico shall be treated as an organization described in section 401(a) of such Code if such trust— “(A)  forms part of a pension, profit-sharing, or stock bonus plan, and \n \n “(B)  is exempt from income tax under the laws of the Commonwealth of Puerto Rico. \n \n \n “(2)   Election to have provisions of, and amendments made by, title ii of this act apply.— “(A)  If the administrator of a pension, profit-sharing, or stock bonus plan which is created or organized in Puerto Rico elects, at such time and in such manner as the Secretary of the Treasury may require, to have the provisions of this paragraph apply, for plan years beginning after the date of election any trust forming a part of such plan shall be treated as a trust created or organized in the United States for purposes of section 401(a) of the Internal Revenue Code of 1986. \n \n “(B)  An election under subparagraph (A), once made, is irrevocable. \n \n “(C)  This paragraph applies to plan years beginning after the date of enactment of this Act [ Sept. 2, 1974 ] \n \n “(D)  The source of any distributions made under a plan which makes an election under this paragraph to participants and beneficiaries residing outside of the United States shall be determined, for purposes of subchapter N of chapter 1 of the Internal Revenue Code of 1986 by the Secretary of the Treasury in accordance with regulations prescribed by him. For purposes of this subparagraph the United States means the United States as defined in section 7701(a)(9) of the Internal Revenue Code of 1986.”\nPub. L. 89–44, title VIII, §\u202f811 ,  June 21, 1965 ,  79 Stat. 169 , provided that certain corporations, associations, or organizations organized and operated exclusively for the purpose of providing an exchange for the sale of poultry growers of a particular locality shall be treated for purposes of this title as an exempt organization and that such exemption shall apply to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , which begin before  Jan. 1, 1966 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULE'},
  'content': 'An organization operated for the primary purpose of carrying on a trade or business for profit shall not be exempt from taxation under section 501 on the ground that all of its profits are payable to one or more organizations exempt from taxation under section 501.\n1969— Pub. L. 91–172  redesignated first sentence of existing provisions as subsec. (a), and substantial portion of second sentence as subsec. (b)(1), and, in subsec. (b)(1) as so redesignated, inserted reference to  section 512 of this title , and added pars. (2) and (3).\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULE'},
  'content': 'An organization described in paragraph (17) or (18) of section 501(c), or described in section 401(a) and referred to in section 4975(g) (2) or (3), shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction.\nAn organization described in paragraph (1) shall be denied exemption from taxation under section 501(a) by reason of paragraph (1) only for taxable years after the taxable year during which it is notified by the Secretary that it has engaged in a prohibited transaction, unless such organization entered into such prohibited transaction with the purpose of diverting corpus or income of the organization from its exempt purposes, and such transaction involved a substantial part of the corpus or income of such organization.\nAny organization described in subsection (a)(1) which is denied exemption under section 501(a) by reason of subsection (a) of this section, with respect to any taxable year following the taxable year in which notice of denial of exemption was received, may, under regulations prescribed by the Secretary, file claim for exemption, and if the Secretary, pursuant to such regulations, is satisfied that such organization will not knowingly again engage in a prohibited transaction, such organization shall be exempt with respect to taxable years after the year in which such claim is filed.\n2014—Subsec. (a)(1).  Pub. L. 113–295, §\u202f221(a)(63)(A) , amended par. (1) generally. Prior to amendment, text read as follows:\n“(A) An organization described in section 501(c)(17) shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after  December 31, 1959 .\n“(B) An organization described in section 401(a) which is referred to in section 4975(g) (2) or (3) shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after  March 1, 1954 .\n“(C) An organization described in section 501(c)(18) shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after  December 31, 1969 .”\nSubsec. (a)(2).  Pub. L. 113–295, §\u202f221(a)(63)(B) , which directed amendment of par. (2) by substituting “described in paragraph (1)” for “described in section 501(c)(17) or (18) or paragraph (a)(1)(B)”, was executed by making the substitution for “described in section 501(c)(17) or (18) or paragraph (1)(B)” to reflect the probable intent of Congress.\nSubsec. (c).  Pub. L. 113–295, §\u202f221(a)(63)(C) , substituted “described in subsection (a)(1)” for “described in section 501(c)(17) or (18) or subsection (a)(1)(B)”.\n1990—Subsec. (d).  Pub. L. 101–508  struck out subsec. (d) “Special rule for loans” which read as follows: “For purposes of the application of subsection (b)(1), in the case of a loan by a trust described in section 401(a), the following rules shall apply with respect to a loan made before  March 1, 1954 , which would constitute a prohibited transaction if made on or after  March 1, 1954 :\n“(1) If any part of the loan is repayable prior to  December 31, 1955 , the renewal of such part of the loan for a period not extending beyond  December 31, 1955 , on the same terms, shall not be considered a prohibited transaction.\n“(2) If the loan is repayable on demand, the continuation of the loan without the receipt of adequate security and a reasonable rate of interest beyond  December 31, 1955 , shall be considered a prohibited transaction.”\n1976—Subsecs. (a)(2), (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1974—Subsec. (a)(1)(A).  Pub. L. 93–406, §\u202f2003(b)(1) , substituted “section 501(c)(17)” for “section 501(c)(17) or (18)”.\nSubsec. (a)(1)(B).  Pub. L. 93–406, §\u202f2003(b)(2) , inserted “which is referred to in section 4975(g)(2) or (3)”.\nSubsec. (a)(2).  Pub. L. 93–406, §\u202f2003(b)(3) , substituted “or paragraph (1)(B)” for “or section 401”.\nSubsec. (c).  Pub. L. 93–406, §\u202f2003(b)(4) , substituted “or subsection (a)(1)(B)” for “or section 401”.\nSubsec. (g).  Pub. L. 93–406, §\u202f2003(b)(5) , struck out subsec. (g) which covered trusts benefiting certain owner-employees.\n1969—Subsec. (a)(1)(A).  Pub. L. 91–172 , §§\u202f101(j)(7), 121(b)(6)(B)(ii), redesignated subpar. (B) as (A) and inserted reference to section 501(c)(18). Former subpar. (A), referring to organizations described in section 501(c)(3) and to prohibited transactions engaged in after  July 1, 1950 , was struck out.\nSubsec. (a)(1)(B).  Pub. L. 91–172, §\u202f101(j)(7) , redesignated subpar. (C) as (B). Former subpar. (B), referring to organizations described in section 501(c)(17) was amended by addition of a reference to section 501(c)(18), and redesignated as subpar. (A).\nSubsec. (a)(1)(C).  Pub. L. 91–172 , §§\u202f101(j)(7), 121(b)(6)(B)(i), added subpar. (C). Former subpar. (C), dealing with organizations described in section 401(a) and with prohibited transactions engaged in after  Mar. 1, 1954 , was redesignated as subpar. (B).\nSubsec. (a)(2).  Pub. L. 91–172 , §§\u202f101(j)(8), 121(b)(6)(B)(ii), struck out reference to organizations described in section 501(c)(3), and inserted references to organizations described in section 501(c)(18).\nSubsec. (b).  Pub. L. 91–172, §\u202f101(j)(14) , redesignated subsec. (c) as (b). Former subsec. (b), setting out the organizations to which section applied, was struck out.\nSubsec. (c).  Pub. L. 91–172 , §§\u202f101(j)(9), (14), 121(b)(6)(B)(ii), redesignated subsec. (d) as (c), struck out reference to organizations described in section 501(c)(3), and inserted reference to organizations described in section 501(c)(17). Former subsec. (c) redesignated (b).\nSubsec. (d).  Pub. L. 91–172, §\u202f101(j)(10) , (14), redesignated subsec. (g) as (d) and substituted “subsection (b)(1)” for “subsection (c)(1).” Former subsec. (d) redesignated (c).\nSubsec. (e).  Pub. L. 91–172, §\u202f101(j)(11) , (14), redesignated subsec. (h) as (e), modified heading to read: “Special rules”, substituted “subsection (b)(1)” for “subsection (c)(1)” in text preceding par. (1) and in par. (3), and in text preceding par. (1) struck out “acquired by a trust described in section 401(a) or section 501(c)(17)”. Former subsec. (e), covering the disallowance of certain charitable deductions, was struck out.\nSubsec. (f).  Pub. L. 91–172, §\u202f101(j)(12) , (14), redesignated subsec. (i) as (f) and substituted “Subsection (b)(1)” for “Subsection (c)(1)” and “subsection (e)” for “subsection (h)”. Former subsec. (f), defining “gift or bequest”, was struck out.\nSubsec. (g).  Pub. L. 91–172, §\u202f101(j)(13) , (14), redesignated subsec. (j) as (g) and substituted “subsection (b)” for “subsection (c)” in par. (1). Former subsec. (g) redesignated (d).\nSubsecs. (h) to (j).  Pub. L. 91–172, §\u202f101(j)(14) , redesignated subsecs. (h), (i), and (j) as (e), (f), and (g), respectively. Former subsecs. (e) and (f) were struck out and former subsec. (g) was redesignated (d).\n1962—Subsec. (j).  Pub. L. 87–792  added subsec. (j).\n1960—Subsec. (a)(1).  Pub. L. 86–667, §\u202f2(a)(1) , denied exemption to an organization described in section 501(c)(17) if it has engaged in a prohibited transaction after  Dec. 31, 1959 .\nSubsecs. (a)(2), (b), (d).  Pub. L. 86–667, §\u202f2(a)(2) , (b), (c), included organizations described in section 501(c)(17).\nSubsec. (h).  Pub. L. 86–667, §\u202f2(d) , included trusts described in section 501(c)(17).\n1958—Subsec. (h).  Pub. L. 85–866, §\u202f30(a) , added subsec. (h).\nSubsec. (i).  Pub. L. 85–866, §\u202f30(b) , added subsec. (i).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 93–406  effective  Jan. 1, 1975 , but with provision for an election to be exercised by an organization so as to constitute a savings clause with reference to the amendment, see  section 2003(c) of Pub. L. 93–406 , set out as an Effective Date; Savings Provisions note under  section 4975 of this title .\nAmendment by section 101(j)(7)–(14) of  Pub. L. 91–172  effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by  section 121(b)(6)(B) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 86–667  applicable to taxable years beginning after  Dec. 31, 1959 , and in the case of loans, the amendments to this section made by  Pub. L. 86–667  are applicable only to loans made, renewed, or continued after  Dec. 31, 1959 , see  section 6 of Pub. L. 86–667 , set out as a note under  section 501 of this title .\nPub. L. 85–866, title I, §\u202f30(c) ,  Sept. 2, 1958 ,  72 Stat. 1631 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  March 15, 1956 . The amendment made by subsection (b) [amending this section] shall apply with respect to taxable years ending after the date of the enactment of this Act [ Sept. 2, 1958 ], but only with respect to periods after such date. \n \n “(2)   Exceptions .— Nothing in subsection (a) [amending this section] shall be construed to make any transaction a prohibited transaction which, under announcements of the Internal Revenue Service made with respect to section 503(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] before the date of the enactment of this Act [ Sept. 2, 1958 ], would not constitute a prohibited transaction. In the case of any bond, debenture, note, or certificate or other evidence of indebtedness acquired before the date of the enactment of this Act [ Sept. 2, 1958 ], by a trust described in section 401(a) of such Code which is held on such date, paragraphs (2) and (3) of section 503(h) of such Code shall be treated as satisfied if such requirements would have been satisfied if such obligation had been acquired on such date of enactment [ Sept. 2, 1958 ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULE'},
  'content': 'The Secretary shall prescribe such regulations as may be necessary or appropriate to prevent the avoidance of subsection (a), including regulations relating to a direct or indirect transfer of all or part of the assets of an organization to an organization controlled (directly or indirectly) by the same person or persons who control the transferor organization.\nSubsection (a) shall not apply to any organization which is a disqualified organization within the meaning of section 501(h)(5) (relating to churches, etc.) for the taxable year immediately preceding the first taxable year for which such organization is described in paragraph (2) of subsection (a).\nA prior section 504, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 168 ;  Oct. 22, 1968 ,  Pub. L. 90–630, §\u202f6(a) ,  82 Stat. 1330 , related to denial of exemption, prior to repeal by  Pub. L. 91–172, title I, §\u202f101(j)(15) ,  Dec. 30, 1969 ,  83 Stat. 527 . For effective date of repeal, see  section 101(k)(2)(B) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\n1987— Pub. L. 100–203, §\u202f10711(b)(2)(A) , substituted “substantial lobbying or because of political activities” for “substantial lobbying” in section catchline.\nSubsec. (a)(2).  Pub. L. 100–203, §\u202f10711(b)(1) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “is not an organization described in section 501(c)(3) by reason of carrying on propaganda, or otherwise attempting, to influence legislation,”.\nAmendment by  Pub. L. 100–203  applicable with respect to activities after  Dec. 22, 1987 , see  section 10711(c) of Pub. L. 100–203 , set out as a note under  section 170 of this title .\nPub. L. 94–455, title XIII, §\u202f1307(a)(3) ,  Oct. 4, 1976 ,  90 Stat. 1722 , provided that:  “It is the intent of Congress that enactment of this section [amending section 501 and enacting  section 504 of this title ] is not to be regarded in any way as an approval or disapproval of the decision of the Court of Appeals for the Tenth Circuit in Christian Echoes National Ministry, Inc. versus United States, 470 F.2d 849 (1972), or of the reasoning in any of the opinions leading to that decision.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULE'},
  'content': 'An organization described in section 501(c)(9) which is part of a plan shall not be exempt from tax under section 501(a) unless such plan meets the requirements of subsection (b) of this section.\nParagraph (1) shall not apply to any organization which is part of a plan maintained pursuant to an agreement between employee representatives and 1 or more employers if the Secretary finds that such agreement is a collective bargaining agreement and that such plan was the subject of good faith bargaining between such employee representatives and such employer or employers.\nIn the case of any benefit for which a provision of this chapter other than this subsection provides nondiscrimination rules, paragraph (1) shall not apply but the requirements of this subsection shall be met only if the nondiscrimination rules so provided are satisfied with respect to such benefit.\nAt the election of the employer, 2 or more plans of such employer may be treated as 1 plan for purposes of this subsection.\nFor purposes of this subsection, the determination as to whether an individual is a highly compensated individual shall be made under rules similar to the rules for determining whether an individual is a highly compensated employee (within the meaning of section 414(q)).\nFor purposes of this subsection, the term “compensation” has the meaning given such term by section 414(s).\nA plan shall not be treated as meeting the requirements of this subsection unless under the plan the annual compensation of each employee taken into account for any year does not exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B). This paragraph shall not apply in determining whether the requirements of section 79(d) are met.\nIn the case of any organization in existence on  July 18, 1984 , the time for giving notice under paragraph (1) shall not expire before the date 1 year after such date of the enactment.\n2018— Pub. L. 115–141, §\u202f401(b)(21)(D)(i) , substituted “paragraph (9) or (17)” for “paragraph (9), (17), or (20)” in section catchline.\nSubsec. (a).  Pub. L. 115–141, §\u202f401(b)(21)(D)(ii) , substituted “section 501(c)(9)” for “paragraph (9) or (20) of section 501(c)” in heading.\nSubsec. (a)(1).  Pub. L. 115–141, §\u202f401(b)(21)(D)(iii) , substituted “section 501(c)(9)” for “paragraph (9) or (20) of subsection (c) of section 501”.\nSubsec. (c)(1).  Pub. L. 115–141, §\u202f401(b)(21)(D)(iv) , substituted “paragraph (9) or (17)” for “paragraph (9), (17), or (20)” in introductory provisions.\n2001—Subsec. (b)(7).  Pub. L. 107–16  substituted “$200,000” for “$150,000” in two places.\n1993—Subsec. (b)(7).  Pub. L. 103–66  substituted “Compensation limit” for “$200,000 compensation limit” in heading and “exceed $150,000. The Secretary shall adjust the $150,000 amount at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B).” for “exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time and in the same manner as under section 415(d).” in text.\n1989—Subsec. (a)(1).  Pub. L. 101–140, §\u202f203(a)(2) , amended par. (1) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(27)(C) , had not been enacted, see 1988 Amendment note below.\nSubsec. (b)(2).  Pub. L. 101–140, §\u202f203(a)(2) , amended par. (2) to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , had not been enacted, see 1988 Amendment note below.\nPub. L. 101–140, §\u202f203(a)(1) , amended par. (2) to read as if amendments by  Pub. L. 99–514, §\u202f1151(g)(6) , had not been enacted, see 1986 Amendment note below.\nSubsec. (b)(7).  Pub. L. 101–140, §\u202f204(c) , inserted at end “This paragraph shall not apply in determining whether the requirements of section 79(d) are met.”\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1011B(a)(27)(C) , inserted at end “This paragraph shall not apply to any organization by reason of a failure to meet the requirements of subsection (b) with respect to a benefit to which section 89 applies.”\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1011B(a)(31)(B) , substituted “there shall be” for “there may be” and “who are” for “who may be”.\nSubsec. (b)(7).  Pub. L. 100–647, §\u202f1011B(a)(32) , added par. (7).\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1851(c)(1) , struck out “of an employer” before “shall”.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f1851(c)(4) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Paragraph (1) shall not apply to any organization which is part of a plan maintained pursuant to 1 or more collective bargaining agreements between 1 or more employee organizations and 1 or more employers.”\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1851(c)(2) , (3), substituted “as otherwise provided in this subsection” for “as provided in paragraph (2)” in introductory provision, and in subpar. (B) substituted “highly compensated individuals” for “highly compensated employees”.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1151(g)(6) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of paragraph (1), there may be excluded from consideration—\n“(A) employees who have not completed 3 years of service,\n“(B) employees who have not attained age 21,\n“(C) seasonal employees or less than half-time employees,\n“(D) employees not included in the plan who are included in a unit of employees covered by an agreement between employee representatives and 1 or more employers which the Secretary finds to be a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining between such employee representatives and such employer or employers, and\n“(E) employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).”\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1151(e)(2)(B) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “For purposes of this subsection—\n“(A)  Aggregation of plans .—At the election of the employer, 2 or more plans of such employer may be treated as 1 plan.\n“(B)  Treatment of related employers .—Rules similar to the rules of subsections (b), (c), (m), and (n) of section 414 shall apply. For purposes of the preceding sentence, section 414(n) shall be applied without regard to paragraph (5).”\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f1114(b)(16) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “For purposes of this subsection, the term ‘highly compensated individual’ has the meaning given such term by section 105(h)(5). For purposes of the preceding sentence, section 105(h)(5) shall be applied by substituting ‘10 percent’ for ‘25 percent’.”\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f1151(j)(3) , added par. (6).\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f1899A(16) , substituted “ July 18, 1984 ” for “the date of the enactment of the Tax Reform Act of 1984”.\nAmendment by  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 611(i)(1) of Pub. L. 107–16 , set out as a note under  section 415 of this title .\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, to benefits accruing in plan years beginning after  Dec. 31, 1993 , see  section 13212(d) of Pub. L. 103–66 , set out as a note under  section 401 of this title .\nAmendment by section 203(a)(1), (2) of  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nPub. L. 101–140, title II, §\u202f204(d)(4) ,  Nov. 8, 1989 ,  103 Stat. 833 , provided that:  “The amendment made by subsection (c) [amending this section] shall take effect as if included in the amendment made by section 1011B(a)(32) of the Technical and Miscellaneous Revenue Act of 1988 [ Pub. L. 100–647 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1114(b)(16) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1987 , see  section 1114(c)(2) of Pub. L. 99–514 , set out as a note under  section 414 of this title .\nAmendment by section 1151(e)(2)(B), (g)(6), (j)(3) of  Pub. L. 99–514  applicable, with certain qualifications and exceptions, to years beginning after  Dec. 31, 1988 , see  section 1151(k) of Pub. L. 99–514 , as amended, set out as a note under  section 79 of this title .\nAmendment by  section 1851(c) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title V, §\u202f513(c) ,  July 18, 1984 ,  98 Stat. 865 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section] shall apply to years beginning after  December 31, 1984 . \n \n “(2)   Treatment of certain benefits in pay status as of  january 1, 1985 .— For purposes of determining whether a plan meets the requirements of section 505(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)), there may (at the election of the employer) be excluded from consideration all disability or severance payments payable to individuals who are in pay status as of  January 1, 1985 . The preceding sentence shall not apply to any payment to the extent such payment is increased by any plan amendment adopted after  June 22, 1984 .”\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1114 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULE'},
  'content': 'An organization described in section 501(c)(4) shall, not later than 60 days after the organization is established, notify the Secretary (in such manner as the Secretary shall by regulation prescribe) that it is operating as such.\nNot later than 60 days after receipt of such a notice, the Secretary shall send to the organization an acknowledgment of such receipt.\nThe Secretary may, for reasonable cause, extend the 60-day period described in subsection (a).\nThe Secretary shall impose a reasonable user fee for submission of the notice under subsection (a).\nUpon request by an organization to be treated as an organization described in section 501(c)(4), the Secretary may issue a determination with respect to such treatment. Such request shall be treated for purposes of section 6104 as an application for exemption from taxation under section 501(a).\nPub. L. 114–113, div. Q, title IV, §\u202f405(f) ,  Dec. 18, 2015 ,  129 Stat. 3120 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 6033 and 6652 of this title] shall apply to organizations which are described in section 501(c)(4) of the Internal Revenue Code of 1986 and organized after the date of the enactment of this Act [ Dec. 18, 2015 ]. \n \n “(2)   Certain existing organizations .— In the case of any other organization described in section 501(c)(4) of such Code, the amendments made by this section shall apply to such organization only if, on or before the date of the enactment of this Act— “(A)  such organization has not applied for a written determination of recognition as an organization described in section 501(c)(4) of such Code, and \n \n “(B)  such organization has not filed at least one annual return or notice required under subsection (a)(1) or (i) (as the case may be) of section 6033 of such Code. \n \n\n In the case of any organization to which the amendments made by this section apply by reason of the preceding sentence, such organization shall submit the notice required by section 506(a) of such Code, as added by this Act, not later than 180 days after the date of the enactment of this Act.”\nPub. L. 114–113, div. Q, title IV, §\u202f405(e) ,  Dec. 18, 2015 ,  129 Stat. 3119 , provided that:  “Notwithstanding any other provision of law, any fees collected pursuant to section 506(e) of the Internal Revenue Code of 1986, as added by subsection (a), shall not be expended by the Secretary of the Treasury or the Secretary’s delegate unless provided by an appropriations Act.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PRIVATE FOUNDATIONS'},
  'content': 'For purposes of this part, in the case of a transfer of assets of any private foundation to another private foundation pursuant to any liquidation, merger, redemption, recapitalization, or other adjustment, organization, or reorganization, the transferee foundation shall not be treated as a newly created organization.\nFor purposes of paragraph (1), the term “substantial contributor” means any person who contributed or bequeathed an aggregate amount of more than $5,000 to the private foundation, if such amount is more than 2 percent of the total contributions and bequests received by the foundation before the close of the taxable year of the foundation in which the contribution or bequest is received by the foundation from such person. In the case of a trust, the term “substantial contributor” also means the creator of the trust.\nFor purposes of clause (i), the term “related person” means, with respect to any person, any other person who would be a disqualified person (within the meaning of section 4946) by reason of his relationship to such person. In the case of a contributor which is a corporation, the term also includes any officer or director of such corporation.\nFor purposes of this section, the determination as to whether and to what extent there would have been any increase in tax shall be made in accordance with regulations prescribed by the Secretary.\nFor purposes of subsection (c), the value of the net assets shall be determined at whichever time such value is higher: (1) the first day on which action is taken by the organization which culminates in its ceasing to be a private foundation, or (2) the date on which it ceases to be a private foundation.\nFor purposes of determining liability for the tax imposed by subsection (c) in the case of assets transferred by the private foundation, such tax shall be deemed to have been imposed on the first day on which action is taken by the organization which culminates in its ceasing to be a private foundation.\n1984—Subsec. (d)(2)(C).  Pub. L. 98–369  added subpar. (C).\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\nPub. L. 98–369, div. A, title III, §\u202f313(b) ,  July 18, 1984 ,  98 Stat. 787 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nSection effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as a note under  section 4940 of this title .\nPub. L. 95–170, §\u202f3 ,  Nov. 12, 1977 ,  91 Stat. 1352 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In determining whether a person is a substantial contributor within the meaning of section 507(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for purposes of applying section 4941 of such Code (relating to taxes on self-dealing), contributions made before  October 9, 1969 , which— “(1)  were made on account of or in lieu of payments required under a lease in effect before such date, and \n \n “(2)  were coincident with or by reason of the reduction in the required payments under such lease, \n \n\n shall not be taken into account. For purposes of applying section 507(d)(2)(B)(iv) of such Code, the preceding sentence shall be treated as having taken effect on  January 1, 1970 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PRIVATE FOUNDATIONS'},
  'content': 'Except as provided in subsection (c), any organization (including an organization in existence on  October 9, 1969 ) which is described in section 501(c)(3) and which does not notify the Secretary, at such time and in such manner as the Secretary may by regulations prescribe, that it is not a private foundation shall be presumed to be a private foundation.\nParagraph (1) shall not apply if the entire amount of the unpaid portion of the tax imposed by section 507(c) is abated by the Secretary under section 507(g).\nA sponsoring organization (as defined in section 4966(d)(1)) shall give notice to the Secretary (in such manner as the Secretary may provide) whether such organization maintains or intends to maintain donor advised funds (as defined in section 4966(d)(2)) and the manner in which such organization plans to operate such funds.\n2006—Subsec. (f).  Pub. L. 109–280 , which directed the addition of subsec. (f) to section 508, without specifying the act to be amended, was executed by making the addition to this section, which is section 508 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n2004—Subsec. (d)(1), (2).  Pub. L. 108–357  struck out “556(b)(2),” after “545(b)(2),”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(a)(71)(A) , struck out last sentence providing that for purposes of paragraph (2), the time prescribed for giving notice under this subsection shall not expire before the 90th day after the day on which regulations first prescribed under this subsection become final.\nSubsec. (a)(1), (2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” in three places after “Secretary”.\nSubsec. (b).  Pub. L. 94–455 , §§\u202f1901(a)(71)(A), 1906(b)(13)(A), struck out “or his delegate” in two places after “Secretary” and “The time prescribed for giving notice under this subsection shall not expire before the 90th day after the day on which regulations first prescribed under this subsection become final” after “a private foundation”.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(2)(A).  Pub. L. 94–455, §\u202f1901(b)(8)(E) , substituted “(A) educational organizations described in section 170(b)(1)(A)(ii), and” for “(A) educational organizations which normally maintain a regular faculty and curriculum and normally have a regularly enrolled body of pupils or students in attendance at the place where their educational activities are regularly carried on; and” after “(b) or both—”.\nSubsec. (c)(2)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(2)(A).  Pub. L. 94–455, §\u202f1901(a)(71)(C) , substituted “(e)(2)” for “(e)(2)(B) and (C)” after “regard to subsection”.\nSubsec. (d)(3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(2)(A).  Pub. L. 94–455, §\u202f1901(a)(71)(B) , struck out subpar. (A) relating to taxable years beginning before 1972, and redesignated subpars. (B) and (C) as (A) and (B), respectively.\nSubsec. (e)(2)(B).  Pub. L. 94–455, §\u202f1901(a)(71)(B) , redesignated subpar. (C) as (B) and substituted “(A)” for “(B)” after “described in subparagraph”.\nSubsec. (e)(2)(C).  Pub. L. 94–455, §\u202f1901(a)(71)(B) , redesignated subpar. (C) as (B).\nPub. L. 109–280, title XII, §\u202f1235(b)(2) ,  Aug. 17, 2006 ,  120 Stat. 1102 , provided that:  “The amendment made by this subsection [amending this section] shall apply to organizations applying for tax-exempt status after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by section 1901(a)(71)(A)–(C), (b)(8)(E) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nSection effective  Jan. 1, 1970 , except that subsecs. (a), (b), and (c) effective  Oct. 9, 1969 , see section 101(k)(1), (3) of  Pub. L. 91–172 , set out as a note under  section 4940 of this title .\nLimits on inclusion of provisions inconsistent with subsec. (e) of this section in governing instruments, see section 101( l )(6) of  Pub. L. 91–172 , set out as a note under  section 4940 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PRIVATE FOUNDATIONS'},
  'content': 'For purposes of this title, if an organization is a private foundation (within the meaning of subsection (a)) on  October 9, 1969 , or becomes a private foundation on any subsequent date, such organization shall be treated as a private foundation for all periods after  October 9, 1969 , or after such subsequent date, unless its status as such is terminated under section 507.\nFor purposes of this part, an organization the status of which as a private foundation is terminated under section 507 shall (except as provided in section 507(b)(2)) be treated as an organization created on the day after the date of such termination.\nFor purposes of subsection (d), the term “gross investment income” means the gross amount of income from interest, dividends, payments with respect to securities loans (as defined in section 512(a)(5)), rents, and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. Such term shall also include income from sources similar to those in the preceding sentence.\nFor each taxable year beginning after the date of the enactment of this subsection, the organization provides to each supported organization such information as the Secretary may require to ensure that such organization is responsive to the needs or demands of the supported organization.\nThe organization is not operated in connection with any supported organization that is not organized in the United States.\nIf the organization is operated in connection with an organization that is not organized in the United States on the date of the enactment of this subsection, clause (i) shall not apply until the first day of the third taxable year of the organization beginning after the date of the enactment of this subsection.\nThe date of the enactment of this subsection, referred to in subsec. (f)(1)(A), (B)(ii), is the date of enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\nSections 1221(a)(2) and 1241(a), (b) of  Pub. L. 109–280 , which directed the amendment of section 509 without specifying the act to be amended, were executed to this section, which is section 509 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.\n2006—Subsec. (a)(3)(B).  Pub. L. 109–280, §\u202f1241(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “is operated, supervised, or controlled by or in connection with one or more organizations described in paragraph (1) or (2), and”. See Codification note above.\nSubsec. (e).  Pub. L. 109–280, §\u202f1221(a)(2) , inserted at end “Such term shall also include income from sources similar to those in the preceding sentence.” See Codification note above.\nSubsec. (f).  Pub. L. 109–280, §\u202f1241(b) , added subsec. (f). See Codification note above.\n1978—Subsec. (e).  Pub. L. 95–345  inserted provision relating to payments with respect to securities loans.\n1975—Subsec. (a)(2)(B).  Pub. L. 94–81  designated existing provisions as cl. (i) and added cl. (ii).\nPub. L. 109–280, title XII, §\u202f1221(c) ,  Aug. 17, 2006 ,  120 Stat. 1089 , provided that:  “The amendments made by this section [amending this section and  section 4940 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 109–280, title XII, §\u202f1241(e) ,  Aug. 17, 2006 ,  120 Stat. 1103 , provided that: \n “(1)   In general .— The amendments made by subsections (a) and (b) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 17, 2006 ]. \n \n “(2)   Charitable trusts which are type iii supporting organizations .— Subsection (c) [enacting provisions set out as a note below] shall take effect— “(A)  in the case of trusts operated in connection with an organization described in paragraph (1) or (2) of section 509(a) of the Internal Revenue Code of 1986 on the date of the enactment of this Act, on the date that is one year after the date of the enactment of this Act, and \n \n “(B)  in the case of any other trust, on the date of the enactment of this Act.”\nPub. L. 95–345, §\u202f2(e) ,  Aug. 15, 1978 ,  92 Stat. 483 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by this section [enacting  section 1058 of this title  and amending sections 509, 512, 514, 851, and 4940 of this title] apply with respect to— \n “(1)  amounts received after  December 31, 1976 , as payments with respect to securities loans (as defined in section 512(a)(5) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), and \n \n “(2)  transfers of securities, under agreements described in section 1058 of such Code, occurring after such date.”\nPub. L. 94–81, §\u202f3(b) ,  Aug. 9, 1975 ,  89 Stat. 418 , provided that:  “The amendment made by this section [amending this section] shall apply to unrelated business taxable income derived from trades and businesses which are acquired by the organization after  June 30, 1975 .”\nSection effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as a note under  section 4940 of this title .\nApplicability of subsec. (a) of this section to testamentary trusts, see section 101( l )(7) of  Pub. L. 91–172 , set out as a note under  section 4940 of this title .\nPub. L. 109–280, title XII, §\u202f1241(c) ,  Aug. 17, 2006 ,  120 Stat. 1103 , provided that:  \n “For purposes of section 509(a)(3)(B)(iii) of the Internal Revenue Code of 1986, an organization which is a trust shall not be considered to be operated in connection with any organization described in paragraph (1) or (2) of section 509(a) of such Code solely because— \n “(1)  it is a charitable trust under State law, \n \n “(2)  the supported organization (as defined in section 509(f)(3) of such Code) is a beneficiary of such trust, and \n \n “(3)  the supported organization (as so defined) has the power to enforce the trust and compel an accounting.”\nPub. L. 109–280, title XII, §\u202f1241(d) ,  Aug. 17, 2006 ,  120 Stat. 1103 , provided that: \n “(1)   In general .— The Secretary of the Treasury shall promulgate new regulations under section 509 of the Internal Revenue Code of 1986 on payments required by type III supporting organizations which are not functionally integrated type III supporting organizations. Such regulations shall require such organizations to make distributions of a percentage of either income or assets to supported organizations (as defined in section 509(f)(3) of such Code) in order to ensure that a significant amount is paid to such organizations. \n \n “(2)   Type iii supporting organization; functionally integrated type iii supporting organization .— For purposes of paragraph (1), the terms ‘type III supporting organization’ and ‘functionally integrated type III supporting organization’ have the meanings given such terms under subparagraphs (A) and (B) section 4943(f)(5) of the Internal Revenue Code of 1986 (as added by this Act), respectively.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS'},
  'content': 'There is hereby imposed for each taxable year on the unrelated business taxable income (as defined in section 512) of every organization described in paragraph (2) a tax computed as provided in section 11. In making such computation for purposes of this section, the term “taxable income” as used in section 11 shall be read as “unrelated business taxable income”.\nThe tax imposed by paragraph (1) shall apply in the case of any organization (other than a trust described in subsection (b) or an organization described in section 501(c)(1)) which is exempt, except as provided in this part or part II (relating to private foundations), from taxation under this subtitle by reason of section 501(a).\nThe tax imposed by paragraph (1) shall apply in the case of any college or university which is an agency or instrumentality of any government or any political subdivision thereof, or which is owned or operated by a government or any political subdivision thereof, or by any agency or instrumentality of one or more governments or political subdivisions. Such tax shall also apply in the case of any corporation wholly owned by one or more such colleges or universities.\nThere is hereby imposed for each taxable year on the unrelated business taxable income of every trust described in paragraph (2) a tax computed as provided in section 1(e). In making such computation for purposes of this section, the term “taxable income” as used in section 1 shall be read as “unrelated business taxable income” as defined in section 512.\nThe tax imposed by paragraph (1) shall apply in the case of any trust which is exempt, except as provided in this part or part II (relating to private foundations), from taxation under this subtitle by reason of section 501(a) and which, if it were not for such exemption, would be subject to subchapter J (sec. 641 and following, relating to estates, trusts, beneficiaries, and decedents).\n1988—Subsec. (d).  Pub. L. 100–647  struck out subsec. (d) which read as follows: “ Tax Preferences .—\n“(1)  Organizations taxable at corporate rates .—If an organization is subject to tax on unrelated business taxable income pursuant to subsection (a), the tax imposed by section 56 shall apply to such organizations with respect to items of tax preference which enter into the computation of unrelated business taxable income in the same manner as section 56 applies to corporations.\n“(2)  Organizations taxable as trusts .—If an organization is subject to tax on unrelated business taxable income pursuant to subsection (b), the taxes imposed by section 55 shall apply to such organization with respect to items of tax preference which enter into the computation of unrelated business taxable income.”\n1982—Subsec. (d)(2).  Pub. L. 97–248  substituted “section 55” for “section 55 and section 56 (as the case may be)”.\n1978—Subsec. (a)(1).  Pub. L. 95–600, §\u202f301(b)(5)(A) , substituted “a tax” for “a normal tax and a surtax”.\nSubsec. (a)(2).  Pub. L. 95–600, §\u202f301(b)(5)(B) , substituted “tax” for “taxes” wherever appearing.\nSubsec. (d).  Pub. L. 95–600, §\u202f421(e)(3) , substituted provisions relating to organizations taxable at corporate rates and organizations taxable as trusts, for provisions relating to imposition of the tax imposed by  section 56 of this title  to an organization subject to tax under this section for tax preferences computed in unrelated business taxable income.\n1977—Subsec. (b)(1).  Pub. L. 95–30  substituted “section 1(e)” for “section 1(d)”.\n1969—Subsec. (a)(2)(A).  Pub. L. 91–172, §\u202f121(a)(1) , removed reference, in heading, to pars. (2), (3), (5), (6), (14)(B), (C), and (17) of  section 501(c) of this title , and, in text, struck out exemptions to churches, conventions, or associations of churches, from the imposition of tax on their unrelated business income, made corporations organized under  section 501(c)(1) of this title  (i.e. organized under Acts of Congress), exempt from such tax, but made all such exemptions subservient to the exceptions in part II and  section 501(a) of this title .\nSubsec. (b)(1).  Pub. L. 91–172, §\u202f803(d)(2) , substituted section 1(d) for section 1 in reference to section under which the computation of the tax dealing with the imposition of tax on the unrelated business taxable income of trusts, is computed.\nSubsec. (b)(2).  Pub. L. 91–172, §\u202f121(a)(2) , pluralized “trust” in heading and in text made the imposition of tax on the unrelated business income of exempt trusts subject to provisions of part II, and, for purposes of determining trusts exempt from taxation, substituted reference to section 501(a) for reference to “section 501(c)(3) or (17) or section 401(a)”.\nSubsec. (c).  Pub. L. 91–172, §\u202f121(a)(3) , added subsec. (c). Former subsec. (c), covering the effective date, was struck out.\nSubsec. (d).  Pub. L. 91–172, §\u202f301(b)(8) , added subsec. (d).\n1966—Subsec. (a)(2)(A).  Pub. L. 89–352  inserted “(14)(B) or (C),” after “(6),” in heading and in text.\n1960—Subsec. (a)(2).  Pub. L. 86–667, §\u202f3(a) , included organizations described in section 501(c)(17) within subpar. (A).\nSubsec. (b).  Pub. L. 86–667, §\u202f3(b) , inserted a reference to section 501(c)(17).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nAmendment by section 301(b)(5)(A), (B) of  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  section 421(e)(3) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 421(g) of Pub. L. 95–600 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 91–172, title I, §\u202f121(g) ,  Dec. 30, 1969 ,  83 Stat. 549 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and sections 48, 501, 502, 503, 512 to 514, 681, 801, 810, 1443, 1504, and 7605 of this title] (other than by subsections (b)(3) and (e) [enacting sections 277 and 6050 of this title]) shall apply to taxable years beginning after  December 31, 1969 . The amendments made by subsection (b)(3) [enacting  section 277 of this title ] shall apply to taxable years beginning after  December 31, 1970 . The amendments made by subsection (e) [enacting  section 6050 of this title ] shall apply with respect to transfers of property after  December 31, 1969 . Where an organization makes a bargain purchase of property before  October 9, 1969 , which is subject to a mortgage which was placed on the property more than 5 years before the purchase, and the organization paid the seller a total amount no greater than the amount of the seller’s cost (including attorneys’ fees) directly related to the transfer of such property to the organization (but in any event no more than 10 percent of the value of the seller’s equity in the property), the indebtedness secured by such mortgage shall not be treated, notwithstanding the amendments made by subsection (d)(1) [amending  section 514 of this title ], as acquisition indebtedness for purposes of section 514(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] during a period of 10 years following the date of the transaction.”\nAmendment by  section 301(b)(8) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 301(c) of Pub. L. 91–172 , set out as a note under  section 5 of this title .\nAmendment by  section 803(d)(2) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1970 , see  section 803(f) of Pub. L. 91–172 , set out as a note under  section 1 of this title .\nPub. L. 89–352, §\u202f3 ,  Feb. 2, 1966 ,  80 Stat. 4 , provided in part that:  “The amendment made by section 2 [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Feb. 2, 1966 ].”\nAmendment by  Pub. L. 86–667  applicable to taxable years beginning after  Dec. 31, 1959 , see  section 6 of Pub. L. 86–667 , set out as a note under  section 501 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS'},
  'content': 'Except as otherwise provided in this subsection, the term “unrelated business taxable income” means the gross income derived by any organization from any unrelated trade or business (as defined in section 513) regularly carried on by it, less the deductions allowed by this chapter which are directly connected with the carrying on of such trade or business, both computed with the modifications provided in subsection (b).\nIn the case of an organization described in paragraph (7), (9), or (17) of section 501(c), the term “unrelated business taxable income” means the gross income (excluding any exempt function income), less the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income), both computed with the modifications provided in paragraphs (6), (10), (11), and (12) of subsection (b). For purposes of the preceding sentence, the deductions provided by sections 243 and 245 (relating to dividends received by corporations) shall be treated as not directly connected with the production of gross income.\nIn the case of a corporation described in section 501(c)(2), the income of which is payable to an organization described in paragraph (7), (9), or (17) of section 501(c), subparagraph (A) shall apply as if such corporation were the organization to which the income is payable. For purposes of the preceding sentence, such corporation shall be treated as having exempt function income for a taxable year only if it files a consolidated return with such organization for such year.\nIf property used directly in the performance of the exempt function of an organization described in paragraph (7), (9), or (17) of section 501(c) is sold by such organization, and within a period beginning 1 year before the date of such sale, and ending 3 years after such date, other property is purchased and used by such organization directly in the performance of its exempt function, gain (if any) from such sale shall be recognized only to the extent that such organization’s sales price of the old property exceeds the organization’s cost of purchasing the other property. For purposes of this subparagraph, the destruction in whole or in part, theft, seizure, requisition, or condemnation of property, shall be treated as the sale of such property, and rules similar to the rules provided by subsections (b), (c), (e), and (j) of section 1034 (as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) shall apply.\nIn the case of any organization described in paragraph (9) or (17) of section 501(c), a set-aside for any purpose specified in clause (ii) of subparagraph (B) may be taken into account under subparagraph (B) only to the extent that such set-aside does not result in an amount of assets set aside for such purpose in excess of the account limit determined under section 419A (without regard to subsection (f)(6) thereof) for the taxable year (not taking into account any reserve described in section 419A(c)(2)(A) for post-retirement medical benefits).\nThis subparagraph shall not apply to any organization if substantially all of the contributions to such organization are made by employers who were exempt from tax under this chapter throughout the 5-taxable year period ending with the taxable year in which the contributions are made.\nIn the case of an organization described in section 501(c)(19), the term “unrelated business taxable income” does not include any amount attributable to payments for life, sick, accident, or health insurance with respect to members of such organizations or their dependents which is set aside for the purpose of providing for the payment of insurance benefits or for a purpose specified in section 170(c)(4). If an amount set aside under the preceding sentence is used during the taxable year for a purpose other than a purpose described in the preceding sentence, such amount shall be included, under paragraph (1), in unrelated business taxable income for the taxable year.\nIf a trade or business regularly carried on by a partnership of which an organization is a member is an unrelated trade or business with respect to such organization, such organization in computing its unrelated business taxable income shall, subject to the exceptions, additions, and limitations contained in subsection (b), include its share (whether or not distributed) of the gross income of the partnership from such unrelated trade or business and its share of the partnership deductions directly connected with such gross income.\nIf the taxable year of the organization is different from that of the partnership, the amounts to be included or deducted in computing the unrelated business taxable income under paragraph (1) shall be based upon the income and deductions of the partnership for any taxable year of the partnership ending within or with the taxable year of the organization.\nFor purposes of this subsection, the term “dues” means any payment (whether or not designated as dues) which is required to be made in order to be recognized by the organization as a member of the organization.\nExcept as provided in regulations, for purposes of paragraph (1), the basis of any stock acquired by purchase (as defined in section 1361(e)(1)(C)) shall be reduced by the amount of any dividends received by the organization with respect to the stock.\nThis subsection shall not apply to employer securities (within the meaning of section 409( l )) held by an employee stock ownership plan described in section 4975(e)(7).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of the Taxpayer Relief Act of 1997, referred to in subsec. (a)(3)(D), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nThe date of the enactment of the Tax Reform Act of 1984, referred to in subsec. (a)(3)(E)(ii)(II), (III), is the date of enactment of division A of  Pub. L. 98–369 , which was approved  July 18, 1984 .\nThe date of the enactment of this subparagraph, referred to in subsec. (b)(13)(E)(iii)(I), is the date of enactment of  Pub. L. 109–280 , which was approved  Aug. 17, 2006 .\nSections 101(39), 107, 117(a), (b), and 121(d) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, referred to in subsec. (b)(19)(B)(ii)(I), (C)(i), (D)(i), (ii)(I), (V), are classified to sections 9601(39), 9607, 9617(a), (b), and 9621(d), respectively, of Title 42, The Public Health and Welfare.\nThe date of the enactment of this paragraph, referred to in subsec. (b)(19)(C)(i), (D)(i), (ii)(V), (E)(ii)(IV), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\n2019—Subsec. (a)(7).  Pub. L. 116–94  struck out par. (7) which related to increases in unrelated business taxable income for certain fringe benefit expenses.\n2018—Subsec. (a)(3).  Pub. L. 115–141, §\u202f401(b)(21)(G) , substituted “or (17)” for “(17), or (20)” in heading.\nSubsec. (a)(3)(A).  Pub. L. 115–141, §\u202f401(b)(21)(E) , substituted “or (17)” for “(17), or (20)”.\nSubsec. (a)(3)(B)(ii).  Pub. L. 115–141, §\u202f401(b)(21)(F) , substituted “or (17)” for “,\u2000(17), or (20)”.\nSubsec. (a)(3)(C), (D).  Pub. L. 115–141, §\u202f401(b)(21)(E) , substituted “or (17)” for “(17), or (20)”.\nSubsec. (a)(3)(E).  Pub. L. 115–141, §\u202f401(b)(21)(F) , (H), substituted “or (17)” for “,\u2000(17), or (20)” in subpar. heading and text of cl. (i).\nSubsec. (b)(19)(H)(iii).  Pub. L. 115–141, §\u202f401(a)(126) , substituted “clause (i)” for “clause (i)(II)”.\n2017—Subsec. (a)(6).  Pub. L. 115–97, §\u202f13702(a) , added par. (6).\nSubsec. (a)(7).  Pub. L. 115–97, §\u202f13703(a) , added par. (7).\nSubsec. (d)(2)(B).  Pub. L. 115–97, §\u202f11002(d)(1)(Y) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2015—Subsec. (b)(13)(E)(iv).  Pub. L. 114–113  struck out cl. (iv). Text read as follows: “This subparagraph shall not apply to payments received or accrued after  December 31, 2014 .”\n2014—Subsec. (a)(3)(A).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,” after “sections 243”.\nSubsec. (b)(13)(E)(iv).  Pub. L. 113–295, §\u202f131(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (b)(13)(E)(iv).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (b)(13)(E)(iv).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (b)(13)(E)(iv).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2006—Subsec. (b)(13)(E), (F).  Pub. L. 109–280 , which directed the amendment of section 512(b)(13) by adding subpar. (E) and redesignating former subpar. (E) as (F), without specifying the act to be amended, was executed by making the amendments to this section, which is section 512 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n2005—Subsec. (b)(1).  Pub. L. 109–135, §\u202f412(dd) , substituted “subsection (a)(5)” for “section 512(a)(5)”.\nSubsec. (b)(18), (19).  Pub. L. 109–135, §\u202f412(ee)(1) , redesignated par. (18), relating to treatment of gain or loss on sale or exchange of certain brownfield sites, as (19).\n2004—Subsec. (b)(18).  Pub. L. 108–357, §\u202f702(a) , added par. (18) relating to treatment of gain or loss on sale or exchange of certain brownfield sites.\nPub. L. 108–357, §\u202f319(c) , added par. (18) relating to treatment of mutual or cooperative electric companies.\nSubsec. (e)(1).  Pub. L. 108–357, §\u202f233(d) , inserted “1361(c)(2)(A)(vi) or” before “1361(c)(6)” in introductory provisions.\n1998—Subsec. (b)(13)(A).  Pub. L. 105–206, §\u202f6010(j)(1) , inserted “or accrues” after “receives” in first sentence.\nSubsec. (b)(13)(B)(i)(I).  Pub. L. 105–206, §\u202f6010(j)(2) , struck out “(as defined in section 513A(a)(5)(A))” after “exempt purposes”.\nSubsec. (b)(17)(B)(ii)(II).  Pub. L. 105–206, §\u202f6023(8) , substituted “rule” for “Rule” in subcl. heading.\n1997—Subsec. (a)(3)(D).  Pub. L. 105–34, §\u202f312(d)(5) , inserted “(as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997)” after “1034”.\nSubsec. (b)(13).  Pub. L. 105–34, §\u202f1041(a) , amended par. (13) generally. Prior to amendment, par. (13) related to inclusion in gross income of controlling organization of amounts of interest, annuities, royalties, and rents derived from a controlled organization.\nSubsec. (e)(1).  Pub. L. 105–34, §\u202f1601(c)(4)(D) , substituted “section 1361(c)(6)” for “section 1361(c)(7)”.\nSubsec. (e)(2).  Pub. L. 105–34, §\u202f1601(c)(4)(A) , substituted “as defined in section 1361(e)(1)(C)” for “within the meaning of section 1012”.\nSubsec. (e)(3).  Pub. L. 105–34, §\u202f1523(a) , added par. (3).\n1996—Subsec. (b)(17).  Pub. L. 104–188, §\u202f1603(a) , added par. (17).\nSubsec. (d).  Pub. L. 104–188, §\u202f1115(a) , added subsec. (d).\nSubsec. (e).  Pub. L. 104–188, §\u202f1316(c) , added subsec. (e).\n1993—Subsec. (b)(1).  Pub. L. 103–66, §\u202f13148(a) , inserted “amounts received or accrued as consideration for entering into agreements to make loans,” before “and annuities”.\nSubsec. (b)(5).  Pub. L. 103–66, §\u202f13148(b) , in second sentence, substituted “all gains or losses recognized, in connection with the organization’s investment activities, from” for “all gains on”, struck out “,\u2000written by the organization in connection with its investment activities,” after “termination of options”, and inserted before period at end “or real property and all gains or losses from the forfeiture of good-faith deposits (that are consistent with established business practice) for the purchase, sale, or lease of real property in connection with the organization’s investment activities”.\nSubsec. (b)(16).  Pub. L. 103–66, §\u202f13147(a) , added par. (16).\nSubsec. (c)(2), (3).  Pub. L. 103–66, §\u202f13145(a) , redesignated par. (3) as (2), substituted “paragraph (1)” for “paragraph (1) or (2)”, and struck out heading and text of former par. (2). Text read as follows: “Notwithstanding any other provision of this section—\n“(A) any organization’s share (whether or not distributed) of the gross income of a publicly traded partnership (as defined in section 469(k)(2)) shall be treated as gross income derived from an unrelated trade or business, and\n“(B) such organization’s share of the partnership deductions shall be allowed in computing unrelated business taxable income.”\n1990—Subsec. (b)(14).  Pub. L. 101–508  struck out par. (14) which read as follows: “Except as provided in paragraph (4), in the case of a church, or convention or association of churches, for taxable years beginning before  January 1, 1976 , there shall be excluded all gross income derived from a trade or business and all deductions directly connected with the carrying on of such trade or business if such trade or business was carried on by such organization or its predecessor before  May 27, 1969 .”\n1988—Subsec. (a)(3)(E)(ii)(II).  Pub. L. 100–647  substituted “subclause (I)” for “subclause (II)” and a period for comma at end.\n1987—Subsec. (c).  Pub. L. 100–203  substituted “for partnerships” for “applicable to partnerships” in heading and amended text generally. Prior to amendment, text read as follows: “If a trade or business regularly carried on by a partnership of which an organization is a member is an unrelated trade or business with respect to such organization, such organization in computing its unrelated business taxable income shall, subject to the exceptions, additions, and limitations contained in subsection (b), include its share (whether or not distributed) of the gross income of the partnership from such unrelated trade or business and its share of the partnership deductions directly connected with such gross income. If the taxable year of the organization is different from that of the partnership, the amounts to be so included or deducted in computing the unrelated business taxable income shall be based upon the income and deductions of the partnership for any taxable year of the partnership ending within or with the taxable year of the organization.”\n1986—Subsec. (a)(3)(E)(i).  Pub. L. 99–514, §\u202f1851(a)(10)(A) , substituted “determined under section 419A (without regard to subsection (f)(6) thereof)” for “determined under section 419A(c)”.\nSubsec. (a)(3)(E)(ii).  Pub. L. 99–514, §\u202f1851(a)(10)(B) , (C), redesignated cl. (iii) as (ii), in subcl. I substituted “an existing reserve” for “a existing reserve”, and substituted new subcl. (II) for former subcl. (II) which read as follows: “For purposes of subclause (I), the term ‘existing reserve or post-retirement medical or life insurance benefit’ means the amount of assets set aside as of the close of the last plan year ending before the date of the enactment of the Tax Reform Act of 1984 for purposes of post-retirement medical benefits or life insurance benefits to be provided to covered employees.” Former cl. (ii), which provided that no set aside for assets used in the provision of benefits described in cl. (ii) of subpar. (B), could be taken into account, was struck out.\nSubsec. (a)(3)(E)(iii), (iv).  Pub. L. 99–514, §\u202f1851(a)(10)(B) , (D), redesignated former cl. (iv) as (iii) and substituted “subparagraph shall not” for “paragraph shall not”. Former cl. (iii) redesignated (ii).\n1984—Subsec. (a)(3).  Pub. L. 98–369, §\u202f511(b)(1)(A) , substituted “paragraph (7), (9), (17), or (20) of section 501(c)” for “section 501(c)(7) or (9)” wherever appearing in heading and in text.\nSubsec. (a)(3)(B)(ii).  Pub. L. 98–369, §\u202f511(b)(1)(B) , substituted “paragraph (9), (17), or (20) of section 501(c)” for “section 501(c)(9)”.\nSubsec. (a)(3)(C), (D).  Pub. L. 98–369, §\u202f511(b)(1)(A) , substituted in subpars. (C) and (D) “paragraph (7), (9), (17), or (20) of section 501(c)” for “section 501(c)(7) or (9)” wherever appearing.\nSubsec. (a)(3)(E).  Pub. L. 98–369, §\u202f511(b)(2) , added subpar. (E).\n1983—Subsec. (b)(10).  Pub. L. 97–448  substituted “10 percent” for “5 percent”.\n1978—Subsec. (a)(5).  Pub. L. 95–345, §\u202f2(b) , added par. (5).\nSubsec. (b)(1).  Pub. L. 95–345, §\u202f2(a)(2) , inserted provision relating to payments with respect to securities loans.\n1976—Subsec. (a)(3)(A).  Pub. L. 94–568  provided that for purposes of the general rule, the deductions provided by sections 243, 244, and 245 (relating to dividends received by corporations) shall be treated as not directly connected with the production of gross income.\nSubsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(5).  Pub. L. 94–396  inserted provision relating to exclusion of gains on the lapse or termination of options to buy or sell securities.\nSubsec. (b)(13), (14).  Pub. L. 94–455, §\u202f1951(b)(8)(A) , redesignated pars. (15) and (16) as (13) and (14), respectively. Former pars. (13) and (14), relating to exceptions, additions, and limitations applicable in determining unrelated business taxable income, were struck out.\nSubsec. (b)(15).  Pub. L. 94–455 , §§\u202f1901(b)(8)(F), 1906(b)(13)(A), 1951(b)(8)(A), redesignated par. (17) as (15) and substituted in subpar. (B) “educational organization described in section 170(b)(1)(A)(ii)” for “educational institution (as defined in section 151(e)(4))” after “order or by an”, and struck out “or his delegate” after “Secretary”. Former par. (15) redesignated (13).\nSubsec. (b)(16), (17).  Pub. L. 94–455, §\u202f1951(b)(8)(A) , redesignated pars. (16) and (17) as (14) and (15), respectively.\n1972—Subsec. (a)(4).  Pub. L. 92–418  added par. (4).\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f121(b)(1) , designated existing provisions as pars. (1) and (2)(B) and added pars. (2)(A) and (3).\nSubsec. (b).  Pub. L. 91–172, §\u202f121(b)(2)(D) , substituted “Modifications” for “Exceptions, additions, and limitations”, in heading, and, in text preceding par. (1) substituted “The modifications referred to in subsection (a)” for “The exceptions, additions, and limitations applicable in determining unrelated business taxable income”.\nSubsec. (b)(3)(A).  Pub. L. 91–172, §\u202f121(b)(2)(A) , inserted reference to exceptions set out in subsec. (b)(3)(B) in text preceding cl. (i), substituted “property described in section 1245(a)(3)(C)” for “personal property leased with the real property” in parenthetical of cl. (i), and added cl. (ii).\nSubsec. (b)(3)(B).  Pub. L. 91–172, §\u202f121(b)(2)(A) , added subpar. (B).\nSubsec. (b)(3)(C).  Pub. L. 91–172, §\u202f121(b)(2)(A) , substituted “rents excluded under subparagraph (A)” for “such rents”.\nSubsec. (b)(4).  Pub. L. 91–172, §\u202f121(b)(2)(A) , inserted reference to pars. (1), (3) and (5) of this subsec., and substituted “debt financed property” for “a business lease”.\nSubsec. (b)(12).  Pub. L. 91–172, §\u202f121(b)(2)(B) , made the allowance of the specific $1,000 deduction inapplicable for the purposes of computing the net operating loss under  section 172 of this title  and par. (6) of this subsec., and provided for the allowance of specific deductions equal to the lower of $1,000 or the gross income derived from any unrelated trade or business carried on by a parish, individual church, district, or other local unit.\nSubsec. (b)(15) to (17).  Pub. L. 91–172, §\u202f121(b)(2)(C) , added pars. (15) to (17).\n1966—Subsec. (a).  Pub. L. 89–809  substituted “,\u2000the unrelated business taxable income shall be its unrelated business taxable income which is effectively connected with the conduct of a trade or business within the United States” for “,\u2000the unrelated business taxable income shall be its unrelated business taxable income derived from sources within the United States determined under subchapter N (sec. 861 and following), relating to tax based on income from sources within or without the United States”.\n1964—Subsec. (b)(14).  Pub. L. 88–380  added par. (14).\n1958—Subsec. (b)(13).  Pub. L. 85–367  added par. (13).\nPub. L. 116–94, div. Q, title III, §\u202f302(b) ,  Dec. 20, 2019 ,  133 Stat. 3248 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by  section 13703 of Public Law 115–97 .”\nAmendment by  section 11002(d)(1)(Y) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nPub. L. 115–97, title I, §\u202f13702(b) ,  Dec. 22, 2017 ,  131 Stat. 2168 , provided that: \n “(1)   In general .— Except to the extent provided in paragraph (2), the amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Carryovers of net operating losses .— If any net operating loss arising in a taxable year beginning before  January 1, 2018 , is carried over to a taxable year beginning on or after such date— “(A)  subparagraph (A) of section 512(a)(6) of the Internal Revenue Code of 1986, as added by this Act, shall not apply to such net operating loss, and \n \n “(B)  the unrelated business taxable income of the organization, after the application of subparagraph (B) of such section, shall be reduced by the amount of such net operating loss.”\nPub. L. 115–97, title I, §\u202f13703(b) ,  Dec. 22, 2017 ,  131 Stat. 2169 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts paid or incurred after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title I, §\u202f114(b) ,  Dec. 18, 2015 ,  129 Stat. 3049 , provided that:  “The amendment made by this section [amending this section] shall apply to payments received or accrued after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f131(b) ,  Dec. 19, 2014 ,  128 Stat. 4018 , provided that:  “The amendment made by this section [amending this section] shall apply to payments received or accrued after  December 31, 2013 .”\nAmendment by  section 221(a)(41)(G) of Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  section 221(a)(41)(G) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title III, §\u202f319(b) ,  Jan. 2, 2013 ,  126 Stat. 2332 , provided that:  “The amendment made by this section [amending this section] shall apply to payments received or accrued after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f747(b) ,  Dec. 17, 2010 ,  124 Stat. 3320 , provided that:  “The amendment made by this section [amending this section] shall apply to payments received or accrued after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f306(b) ,  Oct. 3, 2008 ,  122 Stat. 3868 , provided that:  “The amendment made by this section [amending this section] shall apply to payments received or accrued after  December 31, 2007 .”\nPub. L. 109–280, title XII, §\u202f1205(c)(1) ,  Aug. 17, 2006 ,  120 Stat. 1067 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to payments received or accrued after  December 31, 2005 .”\nPub. L. 108–357, title II, §\u202f233(e) ,  Oct. 22, 2004 ,  118 Stat. 1435 , provided that:  “The amendments made by this section [amending this section and sections 1361 and 4975 of this title] shall take effect on the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  section 319(c) of Pub. L. 108–357  applicable to taxable years beginning after  Oct. 22, 2004 , see  section 319(e) of Pub. L. 108–357 , set out as a note under  section 501 of this title .\nPub. L. 108–357, title VII, §\u202f702(d) ,  Oct. 22, 2004 ,  118 Stat. 1546 , provided that:  “The amendments made by this section [amending this section and  section 514 of this title ] shall apply to any gain or loss on the sale, exchange, or other disposition of any property acquired by the taxpayer after  December 31, 2004 .”\nAmendment by  section 6023(8) of Pub. L. 105–206  effective  July 22, 1998 , see  section 6023(32) of Pub. L. 105–206 , set out as a note under  section 34 of this title .\nAmendment by section 6010(j)(1), (2) of  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 312(d)(5) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see section 312(d)[(e)] of  Pub. L. 105–34 , set out as a note under  section 121 of this title .\nPub. L. 105–34, title X, §\u202f1041(b) ,  Aug. 5, 1997 ,  111 Stat. 939 , as amended by  Pub. L. 105–206, title VI, §\u202f6010(j)(3) ,  July 22, 1998 ,  112 Stat. 815 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Binding contracts .— The amendments made by this section shall not apply to any amount received or accrued during the first 2 taxable years beginning on or after the date of the enactment of this Act if such amount is received or accrued pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such amount is received or accrued. The preceding sentence shall not apply to any amount which would (but for the exercise of an option to accelerate payment of such amount) be received or accrued after such 2 taxable years.”\nPub. L. 105–34, title XV, §\u202f1523(b) ,  Aug. 5, 1997 ,  111 Stat. 1071 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by section 1601(c)(4)(A), (D) of  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nPub. L. 104–188, title I, §\u202f1115(b) ,  Aug. 20, 1996 ,  110 Stat. 1761 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Transitional rule .— If— “(A)  for purposes of applying part III of subchapter F of chapter 1 of the Internal Revenue Code of 1986 to any taxable year beginning before  January 1, 1987 , an agricultural or horticultural organization did not treat any portion of membership dues received by it as income derived in an unrelated trade or business, and \n \n “(B)  such organization had a reasonable basis for not treating such dues as income derived in an unrelated trade or business, \n \n\n then, for purposes of applying such part III to any such taxable year, in no event shall any portion of such dues be treated as derived in an unrelated trade or business. \n \n “(3)   Reasonable basis .— For purposes of paragraph (2), an organization shall be treated as having a reasonable basis for not treating membership dues as income derived in an unrelated trade or business if the taxpayer’s treatment of such dues was in reasonable reliance on any of the following: “(A)  Judicial precedent, published rulings, technical advice with respect to the organization, or a letter ruling to the organization. \n \n “(B)  A past Internal Revenue Service audit of the organization in which there was no assessment attributable to the reclassification of membership dues for purposes of the tax on unrelated business income. \n \n “(C)  Long-standing recognized practice of agricultural or horticultural organizations.”\nAmendment by  section 1316(c) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 1316(f) of Pub. L. 104–188 , set out as a note under  section 170 of this title .\nPub. L. 104–188, title I, §\u202f1603(b) ,  Aug. 20, 1996 ,  110 Stat. 1836 , provided that:  “The amendment made by this section [amending this section] shall apply to amounts included in gross income in any taxable year beginning after  December 31, 1995 .”\nPub. L. 103–66, title XIII, §\u202f13145(b) ,  Aug. 10, 1993 ,  107 Stat. 443 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to partnership years beginning on or after  January 1, 1994 .”\nPub. L. 103–66, title XIII, §\u202f13147(b) ,  Aug. 10, 1993 ,  107 Stat. 444 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property acquired on or after  January 1, 1994 .”\nPub. L. 103–66, title XIII, §\u202f13148(c) ,  Aug. 10, 1993 ,  107 Stat. 444 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts received on or after  January 1, 1994 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10213(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–407 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to partnership interests acquired after  December 17, 1987 .”\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1985 , with such amendments treated as a change in the rate of tax imposed by chapter 1 of this title for purposes of  section 15 of this title , see  section 511(e)(6) of Pub. L. 98–369 , set out as an Effective Date note under  section 419 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 95–345  applicable with respect to amounts received after  Dec. 31, 1976 , as payments with respect to securities loans (as defined in subsec. (a)(5) of this section), and transfers of securities, under agreements described in  section 1058 of this title , occurring after such date, see  section 2(e) of Pub. L. 95–345 , set out as a note under  section 509 of this title .\nAmendment by  Pub. L. 94–568  applicable to taxable years beginning after  Oct. 20, 1976 , see  section 1(d) of Pub. L. 94–568 , set out as a note under  section 501 of this title .\nAmendment by  section 1901(b)(8)(F) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(b)(8)(A) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nPub. L. 94–396, §\u202f1(b) ,  Sept. 3, 1976 ,  90 Stat. 1201 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to gain from options which lapse or terminate on or after  January 1, 1976 , in taxable years ending on or after such date.”\nAmendment by  Pub. L. 92–418  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 1(c) of Pub. L. 92–418 , set out as a note under  section 501 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nPub. L. 88–380, §\u202f2 ,  July 17, 1964 ,  78 Stat. 333 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply with respect to taxable years beginning after  December 31, 1963 .”\nPub. L. 85–367, §\u202f1(b) ,  Apr. 7, 1958 ,  72 Stat. 80 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years of trusts beginning after  December 31, 1955 .”\nFor provisions that nothing in amendment by section 401(b)(21)(E)–(H) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 108–357, title VII, §\u202f702(c) ,  Oct. 22, 2004 ,  118 Stat. 1546 , provided that:  “Nothing in the amendments made by this section [amending this section and  section 514 of this title ] shall affect any duty, liability, or other requirement imposed under any other Federal or State law. Notwithstanding section 128(b) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 [ 42 U.S.C. 9628(b) ], a certification provided by the Environmental Protection Agency or an appropriate State agency (within the meaning of section 198(c)(4) of the Internal Revenue Code of 1986) shall not affect the liability of any person under section 107(a) of such Act [ 42 U.S.C. 9607(a) ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 94–455, title XIX, §\u202f1951(b)(8)(B) ,  Oct. 4, 1976 ,  90 Stat. 1839 , provided that:  “Notwithstanding subparagraph (A) [amending this section], income received in a taxable year beginning after  December 31, 1975 , shall be excluded from gross income in determining unrelated business taxable income, if such income would have been excluded by paragraph (13) or (14) of section 512(b) if received in a taxable year beginning before such date. Any deductions directly connected with income excluded under the preceding sentence in determining unrelated business taxable income shall also be excluded for such purpose.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS'},
  'content': 'For purposes of this section, the term “trade or business” includes any activity which is carried on for the production of income from the sale of goods or the performance of services. For purposes of the preceding sentence, an activity does not lose identity as a trade or business merely because it is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which may, or may not, be related to the exempt purposes of the organization. Where an activity carried on for profit constitutes an unrelated trade or business, no part of such trade or business shall be excluded from such classification merely because it does not result in profit.\nThe term “unrelated trade or business” does not include qualified public entertainment activities of an organization described in paragraph (2)(C), or qualified convention and trade show activities of an organization described in paragraph (3)(C).\nThe term “public entertainment activity” means any entertainment or recreational activity of a kind traditionally conducted at fairs or expositions promoting agricultural and educational purposes, including, but not limited to, any activity one of the purposes of which is to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment.\nFor purposes of this paragraph, the term “qualifying organization” means an organization which is described in section 501(c) (3), (4), or (5) which regularly conducts, as one of its substantial exempt purposes, an agricultural and educational fair or exposition.\nThe term “convention and trade show activity” means any activity of a kind traditionally conducted at conventions, annual meetings, or trade shows, including, but not limited to, any activity one of the purposes of which is to attract persons in an industry generally (without regard to membership in the sponsoring organization) as well as members of the public to the show for the purpose of displaying industry products or to stimulate interest in, and demand for, industry products or services, or to educate persons engaged in the industry in the development of new products and services or new rules and regulations affecting the industry.\nThe term “qualified convention and trade show activity” means a convention and trade show activity carried out by a qualifying organization described in subparagraph (C) in conjunction with an international, national, State, regional, or local convention, annual meeting, or show conducted by an organization described in subparagraph (C) if one of the purposes of such organization in sponsoring the activity is the promotion and stimulation of interest in, and demand for, the products and services of that industry in general or to educate persons in attendance regarding new developments or products and services related to the exempt activities of the organization, and the show is designed to achieve such purpose through the character of the exhibits and the extent of the industry products displayed.\nFor purposes of this paragraph, the term “qualifying organization” means an organization described in section 501(c)(3), (4), (5), or (6) which regularly conducts as one of its substantial exempt purposes a show which stimulates interest in, and demand for, the products of a particular industry or segment of such industry or which educates persons in attendance regarding new developments or products and services related to the exempt activities of the organization.\nAn organization described in section 501(c) (3), (4), or (5) shall not be considered as not entitled to the exemption allowed under section 501(a) solely because of qualified public entertainment activities conducted by it.\nThe term “unrelated trade or business” does not include any trade or business which consists of conducting bingo games.\nIn the case of a mutual or cooperative telephone or electric company, the term “unrelated trade or business” does not include engaging in qualified pole rentals (as defined in section 501(c)(12)(D)).\nThe term “low cost article” means any article which has a cost not in excess of $5 to the organization which distributes such item (or on whose behalf such item is distributed).\nIf more than 1 item is distributed by or on behalf of an organization to a single distributee in any calendar year, the aggregate of the items so distributed in such calendar year to such distributee shall be treated as 1 article for purposes of subparagraph (A).\nThe term “unrelated trade or business” does not include the activity of soliciting and receiving qualified sponsorship payments.\nThe term “qualified sponsorship payment” means any payment made by any person engaged in a trade or business with respect to which there is no arrangement or expectation that such person will receive any substantial return benefit other than the use or acknowledgement of the name or logo (or product lines) of such person’s trade or business in connection with the activities of the organization that receives such payment. Such a use or acknowledgement does not include advertising such person’s products or services (including messages containing qualitative or comparative language, price information, or other indications of savings or value, an endorsement, or an inducement to purchase, sell, or use such products or services).\nThe term “qualified sponsorship payment” does not include any payment if the amount of such payment is contingent upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events.\nFor purposes of this subsection, to the extent that a portion of a payment would (if made as a separate payment) be a qualified sponsorship payment, such portion of such payment and the other portion of such payment shall be treated as separate payments.\nThe term “unrelated trade or business” includes the provision of debt management plan services (as defined in section 501(q)(4)(B)) by any organization other than an organization which meets the requirements of section 501(q).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2017—Subsec. (h)(2)(C)(ii).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2006—Subsec. (j).  Pub. L. 109–280 , which directed the addition of subsec. (j) to section 513, without specifying the act to be amended, was executed by making the addition to this section, which is section 513 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n1997—Subsec. (i).  Pub. L. 105–34  added subsec. (i).\n1993—Subsec. (h)(2)(C)(ii).  Pub. L. 103–66  substituted “calendar year 1992” for “calendar year 1989”.\n1990—Subsec. (h)(2)(C)(ii).  Pub. L. 101–508  inserted before period at end “,\u2000by substituting ‘calendar year 1987’ for ‘calendar year 1989’ in subparagraph (B) thereof”.\n1986—Subsec. (d)(3)(B).  Pub. L. 99–514, §\u202f1602(a) , inserted “or to educate persons in attendance regarding new developments or products and services related to the exempt activities of the organization”.\nSubsec. (d)(3)(C).  Pub. L. 99–514, §\u202f1602(b) , substituted “section 501(c)(3), (4), (5), or (6)” for “section 501(c)(5) or (6)” and inserted “or which educates persons in attendance regarding new developments or products and services related to the exempt activities of the organization”.\nSubsec. (h).  Pub. L. 99–514, §\u202f1601(a) , added subsec. (h).\n1980—Subsec. (g).  Pub. L. 96–605  added subsec. (g).\n1978—Subsec. (f).  Pub. L. 95–502  added subsec. (f).\n1976—Subsec. (d).  Pub. L. 94–455, §\u202f1305(a) , added subsec. (d).\nSubsec. (e).  Pub. L. 94–455, §\u202f1311(a) , added subsec. (e).\n1969—Subsec. (a)(2).  Pub. L. 91–172, §\u202f121(b)(4) , inserted reference to local associations of employees described in  section 501(c)(4) of this title  and organized before  May 27, 1969 .\nSubsec. (c).  Pub. L. 91–172, §\u202f121(c) , substituted “Advertising, etc., activities” for “Special rule for certain publishing businesses”, in heading, and, in text, substituted provisions extending definition of trade or business to include any activity carried on for the production of income from the sale of goods or the performance of services, for provisions referring to publishing businesses carried on by an organization during a taxable year beginning before  Jan. 1, 1953 .\n1960—Subsec. (b)(2).  Pub. L. 86–667  included trusts described in section 501(c)(17).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–280  applicable to taxable years beginning after  Aug. 17, 2006 , with transition rule for existing organizations, see  section 1220(c) of Pub. L. 109–280 , set out as a note under  section 501 of this title .\nPub. L. 105–34, title IX, §\u202f965(b) ,  Aug. 5, 1997 ,  111 Stat. 894 , provided that:  “The amendment made by this section [amending this section] shall apply to payments solicited or received after  December 31, 1997 .”\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13201(c) of Pub. L. 103–66 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XVI, §\u202f1601(b) ,  Oct. 22, 1986 ,  100 Stat. 2767 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions of low cost articles and exchanges and rentals of member lists after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XVI, §\u202f1602(c) ,  Oct. 22, 1986 ,  100 Stat. 2768 , provided that:  “The amendments made by this section [amending this section] shall apply to activities in taxable years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 96–605, title I, §\u202f106(c)(2) ,  Dec. 29, 1980 ,  94 Stat. 3524 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 95–502, title III, §\u202f301(b) ,  Oct. 21, 1978 ,  92 Stat. 1702 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 94–455, title XIII, §\u202f1305(b) ,  Oct. 4, 1976 ,  90 Stat. 1717 , provided that:  “The amendments made by subsection (a) [amending this section] apply to qualified public entertainment activities in taxable years beginning after  December 31, 1962 , and to qualified convention and trade show activities in taxable years beginning after the date of enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 94–455, title XIII, §\u202f1311(b) ,  Oct. 4, 1976 ,  90 Stat. 1730 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply to all taxable years to which the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [this title] applies.”\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nAmendment by  Pub. L. 86–667  applicable to taxable years beginning after  Dec. 31, 1959 , see  section 6 of Pub. L. 86–667 , set out as a note under  section 501 of this title .\nPub. L. 98–369, div. A, title III, §\u202f311 ,  July 18, 1984 ,  98 Stat. 786 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1834,  Oct. 22, 1986 ,  100 Stat. 2095 , 2852, provided that: \n “(a)   General Rule .— For purposes of section 513 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (defining unrelated trade or business), the term ‘unrelated trade or business’ does not include any trade or business which consists of conducting any game of chance if— “(1)  such game of chance is conducted by a nonprofit organization, \n \n “(2)  the conducting of such game by such organization does not violate any State or local law, and \n \n “(3)  as of  October 5, 1983 — “(A)  there was a State law (originally enacted on  April 22, 1977 ) in effect which permitted the conducting of such game of chance by such nonprofit organization, but \n \n “(B)  the conducting of such game of chance by organizations which were not nonprofit organizations would have violated such law. \n \n \n \n “(b)   Effective Date .— Subsection (a) shall apply to games of chance conducted after  June 30, 1981 , in taxable years ending after such date.”\n[ Pub. L. 99–514, title XVIII, §\u202f1834 ,  Oct. 22, 1986 ,  100 Stat. 2852 , as amended by  Pub. L. 100–647, title VI, §\u202f6201 ,  Nov. 10, 1988 ,  102 Stat. 3730 , provided in part that:  “The amendment made by this section [amending  section 311 of Pub. L. 98–369 , set out above] shall apply to games of chance conducted after  October 22, 1986 , in taxable years ending after such date” \n.]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS'},
  'content': 'There shall be included with respect to each debt-financed property as an item of gross income derived from an unrelated trade or business an amount which is the same percentage (but not in excess of 100 percent) of the total gross income derived during the taxable year from or on account of such property as (A) the average acquisition indebtedness (as defined in subsection (c)(7)) for the taxable year with respect to the property is of (B) the average amount (determined under regulations prescribed by the Secretary) of the adjusted basis of such property during the period it is held by the organization during such taxable year.\nThere shall be allowed as a deduction with respect to each debt-financed property an amount determined by applying (except as provided in the last sentence of this paragraph) the percentage derived under paragraph (1) to the sum determined under paragraph (3). The percentage derived under this paragraph shall not be applied with respect to the deduction of any capital loss resulting from the carryback or carryover of net capital losses under section 1212.\nThe sum referred to in paragraph (2) is the sum of the deductions under this chapter which are directly connected with the debt-financed property or the income therefrom, except that if the debt-financed property is of a character which is subject to the allowance for depreciation provided in section 167, the allowance shall be computed only by use of the straight-line method.\nFor purposes of applying paragraphs (1) (A), (C), and (D), the use of any property by an exempt organization which is related to an organization shall be treated as use by such organization.\nIf an organization acquires real property for the principal purpose of using the land (commencing within 10 years of the time of acquisition) in the manner described in paragraph (1)(A) and at the time of acquisition the property is in the neighborhood of other property owned by the organization which is used in such manner, the real property acquired for such future use shall not be treated as debt-financed property so long as the organization does not abandon its intent to so use the land within the 10-year period. The preceding sentence shall not apply for any period after the expiration of the 10-year period, and shall apply after the first 5 years of the 10-year period only if the organization establishes to the satisfaction of the Secretary that it is reasonably certain that the land will be used in the described manner before the expiration of the 10-year period.\nIf an organization for any taxable year has not used land in the manner to satisfy the actual use condition of subparagraph (B) before the time prescribed by law (including extensions thereof) for filing the return for such taxable year, the tax for such year shall be computed without regard to the application of subparagraph (B), but if and when such use condition is satisfied, the provisions of subparagraph (B) shall then be applied to such taxable year. If the actual use condition of subparagraph (B) is satisfied for any taxable year after such time for filing the return, and if credit or refund of any overpayment for the taxable year resulting from the satisfaction of such use condition is prevented at the close of the taxable year in which the use condition is satisfied, by the operation of any law or rule of law (other than chapter 74, relating to closing agreements and compromises), credit or refund of such overpayment may nevertheless be allowed or made if claim therefor is filed before the expiration of 1 year after the close of the taxable year in which the use condition is satisfied.\nIn applying this paragraph to a church or convention or association of churches, in lieu of the 10-year period referred to in subparagraphs (A) and (B) a 15-year period shall be applied, and subparagraphs (A) and (B)(ii) shall apply whether or not the acquired land meets the neighborhood test.\nWhere property (no matter how acquired) is acquired subject to a mortgage or other similar lien, the amount of the indebtedness secured by such mortgage or lien shall be considered as an indebtedness of the organization incurred in acquiring such property even though the organization did not assume or agree to pay such indebtedness.\nWhere property subject to a mortgage is acquired by an organization by bequest or devise, the indebtedness secured by the mortgage shall not be treated as acquisition indebtedness during a period of 10 years following the date of the acquisition. If an organization acquires property by gift subject to a mortgage which was placed on the property more than 5 years before the gift, which property was held by the donor more than 5 years before the gift, the indebtedness secured by such mortgage shall not be treated as acquisition indebtedness during a period of 10 years following the date of such gift. This subparagraph shall not apply if the organization, in order to acquire the equity in the property by bequest, devise, or gift, assumes and agrees to pay the indebtedness secured by the mortgage, or if the organization makes any payment for the equity in the property owned by the decedent or the donor.\nFor purposes of this section, an extension, renewal, or refinancing of an obligation evidencing a pre-existing indebtedness shall not be treated as the creation of a new indebtedness.\nFor purposes of this section, the term “acquisition indebtedness” does not include indebtedness the incurrence of which is inherent in the performance or exercise of the purpose or function constituting the basis of the organization’s exemption, such as the indebtedness incurred by a credit union described in section 501(c)(14) in accepting deposits from its members.\nFor purposes of this section, the term “average acquisition indebtedness” for any taxable year with respect to a debt-financed property means the average amount, determined under regulations prescribed by the Secretary of the acquisition indebtedness during the period the property is held by the organization during the taxable year, except that for the purpose of computing the percentage of any gain or loss to be taken into account on a sale or other disposition of debt-financed property, such term means the highest amount of the acquisition indebtedness with respect to such property during the 12-month period ending with the date of the sale or other disposition.\nExcept as provided in subparagraph (B), the term “acquisition indebtedness” does not, for purposes of this section, include indebtedness incurred by a qualified organization in acquiring or improving any real property. For purposes of this paragraph, an interest in a mortgage shall in no event be treated as real property.\nRules similar to the rules of subparagraph (B)(vi) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities.\nExcept as provided in regulations, a partnership may without violating the requirements of this subparagraph provide for chargebacks with respect to disproportionate losses previously allocated to qualified organizations and disproportionate income previously allocated to other partners. Any chargeback referred to in the preceding sentence shall not be at a ratio in excess of the ratio under which the loss or income (as the case may be) was allocated.\nTo the extent provided in regulations, a partnership may without violating the requirements of this subparagraph provide for reasonable preferred returns or reasonable guaranteed payments.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph, including regulations which may provide for exclusion or segregation of items.\nFor purposes of this subparagraph, the term “disqualified holder” means any shareholder (or beneficiary) which is not described in clause (i) or (ii) of subparagraph (C).\nFor purposes of clauses (iii) and (iv) of subparagraph (B), a lease to a person described in such clause (iii) or (iv) shall be disregarded if no more than 25 percent of the leasable floor space in a building (or complex of buildings) is covered by the lease and if the lease is on commercially reasonable terms.\nClause (v) of subparagraph (B) shall not apply if the financing is on commercially reasonable terms.\nIn the case of a qualifying sale by a financial institution, except as provided in regulations, clauses (i) and (ii) of subparagraph (B) shall not apply with respect to financing provided by such institution for such sale.\nFor purposes of this subparagraph, the term “foreclosure property” means any real property acquired by the financial institution as the result of having bid on such property at foreclosure, or by operation of an agreement or process of law, after there was a default (or a default was imminent) on indebtedness which such property secured.\nFor purposes of this subtitle, if the property was acquired in a complete or partial liquidation of a corporation in exchange for its stock, the basis of the property shall be the same as it would be in the hands of the transferor corporation, increased by the amount of gain recognized to the transferor corporation upon such distribution and by the amount of any gain to the organization which was included, on account of such distribution, in unrelated business taxable income under subsection (a).\nWhere debt-financed property is held for purposes described in subsection (b)(1)(A), (B), (C), or (D) as well as for other purposes, proper allocation shall be made with respect to basis, indebtedness, and income and deductions. The allocations required by this section shall be made in accordance with regulations prescribed by the Secretary to the extent proper to carry out the purposes of this section.\nFor purposes of this section, the term “real property” includes personal property of the lessor leased by it to a lessee of its real estate if the lease of such personal property is made under, or in connection with, the lease of such real estate.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations to prevent the circumvention of any provision of this section through the use of segregated asset accounts.\nThe Tax Reform Act of 1976, referred to in subsec. (b)(3)(C)(iii), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 , which was enacted  Oct. 4, 1976 . For complete classification of this Act to the Code, see Tables.\nThe date of the enactment of the American Jobs Creation Act of 2004, referred to in subsec. (c)(6)(A)(ii), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nThe Small Business Investment Act of 1958, referred to in subsec. (c)(6)(A)(ii), is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. Section 303(a) of the Act is classified to  section 683(a) of Title 15 . For complete classification of this Act to the Code, see Short Title note set out under  section 661 of Title 15  and Tables.\n2006—Subsec. (c)(9)(C)(iv).  Pub. L. 109–280  added cl. (iv).\n2005—Subsec. (b)(1)(E).  Pub. L. 109–135  substituted “section 512(b)(19)” for “section 512(b)(18)”.\n2004—Subsec. (b)(1)(E).  Pub. L. 108–357, §\u202f702(b) , added subpar. (E).\nSubsec. (c)(6).  Pub. L. 108–357, §\u202f247(a) , reenacted heading without change and amended text of par. (6) generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘acquisition indebtedness’ does not include an obligation, to the extent that it is insured by the Federal Housing Administration, to finance the purchase, rehabilitation, or construction of housing for low and moderate income persons.”\n1993—Subsec. (c)(9)(A).  Pub. L. 103–66, §\u202f13144(b)(1) , inserted at end “For purposes of this paragraph, an interest in a mortgage shall in no event be treated as real property.”\nSubsec. (c)(9)(B).  Pub. L. 103–66, §\u202f13144(b)(2) , struck out at end “For purposes of this paragraph, an interest in a mortgage shall in no event be treated as real property.”\nSubsec. (c)(9)(G), (H).  Pub. L. 103–66, §\u202f13144(a) , added subpars. (G) and (H).\n1989—Subsec. (c)(9)(E), (F).  Pub. L. 101–239  redesignated the subpar. (E), relating to special rules for organizations described in section 501(c)(25), as (F).\n1988—Subsec. (c)(9)(B).  Pub. L. 100–647, §\u202f1016(a)(6) , substituted “this paragraph” for “clause (vi)” in last sentence.\nPub. L. 100–647, §\u202f1018(u)(13)(A) , amended directory language of  Pub. L. 99–514, §\u202f1878(e)(1) , (3), to clarify that general amendment by section 1878(e)(3) included concluding provision as well as cl. (vi) and that amendment by section 1878(e)(1) should have been to the concluding provisions as amended by section 1878(e)(3).\nSubsec. (c)(9)(E).  Pub. L. 100–647, §\u202f1016(a)(5)(A) , added subpar. (E) relating to special rules for organizations described in section 501(c)(25).\nSubsec. (c)(9)(E)(i).  Pub. L. 100–647, §\u202f2004(h)(2) , in subsec. (c)(9)(E), relating to certain allocations permitted, redesignated subcls. (II) and (III) as (I) and (II), respectively, and struck out former subcl. (I) which read as follows: “the allocation of items to any partner other than a qualified organization cannot result in such partner having a share of the overall partnership loss for any taxable year greater than such partner’s share of the overall partnership income for the taxable year for which such partner’s income share will be the smallest,”.\nSubsec. (c)(9)(E)(iii).  Pub. L. 100–647, §\u202f2004(h)(1) , in subsec. (c)(9)(E) relating to certain allocations permitted, added cl. (iii).\n1987—Subsec. (c)(9)(B)(vi).  Pub. L. 100–203, §\u202f10214(a) , amended cl. (vi) generally. Prior to amendment, cl. (vi) read as follows: “the real property is held by a partnership (which does not fail to meet the requirements of clauses (i) through (v)), and—\n“(I) any partner of the partnership is not a qualified organization, and\n“(II) the principal purpose of any allocation to any partner of the partnership which is a qualified organization which is not a qualified allocation (within the meaning of section 168(h)(6)) is the avoidance of income tax.”\nSubsec. (c)(9)(E).  Pub. L. 100–203, §\u202f10214(b) , added subpar. (E).\n1986—Subsec. (c)(9)(B).  Pub. L. 99–514, §\u202f1878(e)(1) , as amended by  Pub. L. 100–647, §\u202f1018(u)(13)(A) , which directed amendment of penultimate sentence by substituting “is unrelated business taxable income” for “would be unrelated business taxable income (determined without regard to this paragraph)”, was executed by making the substitution for “would be unrelated business taxable income (determined without regard to this paragraph”, as the probable intent of Congress.\nPub. L. 99–514, §\u202f1878(e)(3) , as amended by  Pub. L. 100–647, §\u202f1018(u)(13)(B) , amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “For purposes of clause (vi)(I), an organization shall not be treated as a qualified organization if any income of such organization would be unrelated business taxable income (determined without regard to this paragraph).”\nSubsec. (c)(9)(B)(vi).  Pub. L. 99–514, §\u202f1878(e)(3) , as amended by  Pub. L. 100–647, §\u202f1018(u)(13)(B) , amended cl. (vi) generally. Prior to amendment, cl. (vi) read as follows: “the real property is held by a partnership unless the partnership meets the requirements of clauses (i) through (v) and unless—\n“(I) all of the partners of the partnership are qualified organizations, or\n“(II) each allocation to a partner of the partnership which is a qualified organization is a qualified allocation (within the meaning of section 168(j)(9)).”\nSubsec. (c)(9)(B)(vi)(II).  Pub. L. 99–514, §\u202f201(d)(9) , substituted “section 168(h)(6)” for “section 168(j)(9)”.\nSubsec. (c)(9)(C)(i).  Pub. L. 99–514, §\u202f1878(e)(2) , substituted “section 509(a)(3)” for “section 509(a)”.\nSubsec. (c)(9)(C)(iii).  Pub. L. 99–514, §\u202f1603(b) , added cl. (iii).\n1984—Subsec. (c)(9).  Pub. L. 98–369, §\u202f1034(a) , amended par. (9) generally, substituting provisions relating to real property acquired by a qualified organization for provisions relating to real property acquired by a qualified trust, with “qualified organization” expanded to include trusts constituting qualified trusts under  section 401 of this title  as well as organizations described in  section 170(b)(1)(A)(ii) of this title  and their affiliated support organizations described in  section 509(a) of this title .\nSubsec. (c)(9)(B)(iii).  Pub. L. 98–369, §\u202f174(b)(5)(B) , inserted reference to section 707(b).\nSubsec. (g).  Pub. L. 98–369, §\u202f1034(b) , added subsec. (g).\n1980—Subsec. (c)(9).  Pub. L. 96–605  added par. (9).\n1978—Subsec. (c)(8).  Pub. L. 95–345  added par. (8).\n1976—Subsecs. (a)(1), (b)(3)(A), (B)(ii).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(3)(C)(iii).  Pub. L. 94–455, §\u202f1901(a)(72)(C) , substituted “(as defined in this section immediately before the enactment of the Tax Reform Act of 1976)” for “as (defined in subsection (f))” after “is a business lease”.\nSubsec. (c)(1).  Pub. L. 94–455, §\u202f1901(a)(72)(A) , struck out exception following subpar. (C) that in any taxable year beginning before  January 1, 1972 , any acquisition indebtedness incurred prior to  June 28, 1966 , would not be taken into account except for business lease indebtedness of certain organizations.\nSubsec. (c)(2)(C).  Pub. L. 94–455, §\u202f1308(a) , added subpar. (C).\nSubsecs. (c)(7), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1901(a) (72(B), struck out subsec. (f) relating to definition of business lease, special rules applicable to such leases, and exceptions to the definition and applicable rules, and redesignated subsec. (h) as (f).\nSubsec. (g).  Pub. L. 94–455, §\u202f1901(a)(72)(B) , struck out subsec. (g) relating to definition and special rules applicable to business lease indebtedness.\nSubsec. (h).  Pub. L. 94–455, §\u202f1901(a)(72)(B) , redesignated subsec. (h) as (f).\n1975—Subsec. (b)(3)(D).  Pub. L. 93–625  struck out last sentence providing for allowance and payment of interest on any overpayment for a taxable year resulting from application of subpar. (B) after actual use condition was satisfied at rate of 4 in lieu of 6 percent per annum.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f121(d)(1) , substituted “Unrelated debt-financed income” for “Business leases” in heading and substituted in text material covering unrelated debt-financed income and deductions for material covering business lease rents and deductions.\nSubsecs. (b) to (e).  Pub. L. 91–172, §\u202f121(d)(1) , (3)(A), added subsecs. (b), (c), (d) and (e). Former subsecs. (b), (c), and (d) redesignated (f), (g), and (h), respectively.\nSubsec. (f).  Pub. L. 91–172, §\u202f121(d)(3)(A) , (B), redesignated subsec. (b) as subsec. (f), and, in par. (1) of subsec. (f) as so redesignated, substituted reference to subsec. (g) for reference to subsec. (c).\nSubsecs. (g), (h).  Pub. L. 91–172, §\u202f121(d)(3)(A) , redesignated subsecs. (c) and (d) as (g) and (h), respectively.\n1960—Subsec. (c)(8).  Pub. L. 86–667  added par. (8).\nPub. L. 109–280, title VIII, §\u202f866(b) ,  Aug. 17, 2006 ,  120 Stat. 1025 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning on or after the date of enactment of this Act [ Aug. 17, 2006 ].”\nPub. L. 108–357, title II, §\u202f247(b) ,  Oct. 22, 2004 ,  118 Stat. 1449 , provided that:  “The amendment made by this section [amending this section] shall apply to indebtedness incurred after the date of the enactment of this Act [ Oct. 22, 2004 ] by a small business investment company licensed after the date of the enactment of this Act.”\nAmendment by  section 702(b) of Pub. L. 108–357  applicable to any gain or loss on the sale, exchange, or other disposition of any property acquired by the taxpayer after  Dec. 31, 2004 , see  section 702(d) of Pub. L. 108–357 , set out as a note under  section 512 of this title .\nPub. L. 103–66, title XIII, §\u202f13144(c) ,  Aug. 10, 1993 ,  107 Stat. 442 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to acquisitions on or after  January 1, 1994 . \n \n “(2)   Small leases .— The provisions of section 514(c)(9)(G)(i) of the Internal Revenue Code of 1986 shall, in addition to any leases to which the provisions apply by reason of paragraph (1), apply to leases entered into on or after  January 1, 1994 .”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1016(a)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3575 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply with respect to interests in the organization acquired after  June 10, 1987 , except that such amendment shall not apply to any such interest acquired after  June 10, 1987 , pursuant to a binding written contract in effect on  June 10, 1987 , and at all times thereafter before such acquisition.”\nAmendment by sections 1016(a)(6) and 1018(u)(13) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(h) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10214(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–408 , provided that:  \n “The amendments made by this section [amending this section] shall apply to— “(1)  property acquired by the partnership after  October 13, 1987 , and \n \n “(2)  partnership interests acquired after  October 13, 1987 , \n \n\n except that such amendments shall not apply in the case of any property (or partnership interest) acquired pursuant to a written binding contract in effect on  October 13, 1987 , and at all times thereafter before such property (or interest) is acquired.”\nAmendment by  section 201(d)(9) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(9) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 1603(b) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1603(c) of Pub. L. 99–514 , set out as a note under  section 501 of this title .\nAmendment by  section 1878(e) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 174(b)(5)(B) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1983 , in taxable years ending after that date, see  section 174(c)(2)(A) of Pub. L. 98–369 , set out as a note under  section 267 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1034(c) ,  July 18, 1984 ,  98 Stat. 1040 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to indebtedness incurred after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(2)   Exception for indebtedness on certain property acquired before  january 1, 1985 .— “(A)  The amendment made by subsection (a) [amending this section] shall not apply to any indebtedness incurred before  January 1, 1985 , by a partnership described in subparagraph (B) if such indebtedness is incurred with respect to property acquired (directly or indirectly) by such partnership before such date. \n \n “(B)  A partnership is described in this subparagraph if— “(i)  before  October 21, 1983 , the partnership was organized, a request for exemption with respect to such partnership was filed with the Department of Labor, and a private placement memorandum stating the maximum number of units in the partnership that would be offered had been circulated, \n \n “(ii)  the interest in the property to be acquired, directly or indirectly (including through acquiring an interest in another partnership) by such partnership was described in such private placement memorandum, and \n \n “(iii)  the marketing of partnership interests in such partnership is completed not later than 2 years after the later of the date of enactment of this Act [ July 18, 1984 ] or the date of publication in the Federal Register of such exemption by the Department of Labor and the aggregate number of units in such partnership sold does not exceed the amount described in clause (i). \n \n \n \n “(3)   Exception for indebtedness on certain property acquired before  january 1, 1986 .— “(A)  The amendment made by subsection (a) [amending this section] shall not apply to any indebtedness incurred before  January 1, 1986 , by a partnership described in subparagraph (B) if such indebtedness is incurred with respect to property acquired (directly or indirectly) by such partnership before such date. \n \n “(B)  A partnership is described in this paragraph if— “(i)  before  March 6, 1984 , the partnership was organized and publicly announced, the maximum amount of interests which would be sold in such partnership, and \n \n “(ii)  the marketing of partnership interests in such partnership is completed not later than the 90th day after the date of the enactment of this Act [ July 18, 1984 ] and the aggregate amount of interests in such partnership sold does not exceed the maximum amount described in clause (i). \n \n\n For purposes of clause (i), the maximum amount taken into account shall be the greatest of the amounts shown in the registration statement, prospectus, or partnership agreement. \n \n “(C)   Binding contracts .— For purposes of this paragraph, property shall be deemed to have been acquired before  January 1, 1986 , if such property is acquired pursuant to a written contract which, on  January 1, 1986 , and at all times thereafter, required the acquisition of such property and such property is placed in service not later than 6 months after the date such contract was entered into.”\nPub. L. 96–605, title I, §\u202f110(c) ,  Dec. 28, 1980 ,  94 Stat. 3526 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1980 .”\nPub. L. 96–605, title I, §\u202f110(b) ,  Dec. 28, 1980 ,  94 Stat. 3526 , provided that:  “The amendment made by subsection (a) [amending this section] shall not be considered a precedent with respect to extending such amendment (or similar rules) to any other person.”\nAmendment by  Pub. L. 95–345  applicable with respect to amounts received after  Dec. 31, 1976 , as payments with respect to securities loans (as defined in  section 512(a)(5) of this title ), and transfers of securities, under agreements described in  section 1058 of this title , occurring after such date, see  section 2(e) of Pub. L. 95–345 , set out as a note under  section 509 of this title .\nPub. L. 94–455, title XIII, §\u202f1308(b) ,  Oct. 4, 1976 ,  90 Stat. 1729 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 1969 .”\nAmendment by  section 1901(a)(72) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 93–625  effective  July 1, 1975 , and applicable to amounts outstanding on such date or arising thereafter, see  section 7(e) of Pub. L. 93–625 , set out as an Effective Date note under  section 6621 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , and to the manner of treatment to be accorded indebtednesses secured by certain mortgages on properties bargain-purchased before  Oct. 9, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nAmendment by  Pub. L. 86–667  applicable to taxable years beginning after  Dec. 31, 1959 , see  section 6 of Pub. L. 86–667 , set out as a note under  section 501 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVI, §\u202f1607 ,  Oct. 22, 1986 ,  100 Stat. 2771 , provided that:  “For purposes of applying section 514(c) of the Internal Revenue Code of 1986, with respect to a disposition during calendar year 1986 or calendar year 1987 of land acquired during calendar year 1984, the term ‘acquisition indebtedness’ does not include indebtedness incurred in connection with bonds issued after  January 1, 1984 , and before  July 19, 1984 , on behalf of an organization which is a community college and which is described in section 511(a)(2)(B) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAXATION OF BUSINESS INCOME OF CERTAIN EXEMPT ORGANIZATIONS'},
  'content': 'The amount of taxes imposed by foreign countries and possessions of the United States shall be allowed as a credit against the tax of an organization subject to the tax imposed by section 511 to the extent provided in section 901; and in the case of the tax imposed by section 511, the term “taxable income” as used in section 901 shall be read as “unrelated business taxable income”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'FARMERS’ COOPERATIVES'},
  'content': 'A farmers’ cooperative organization described in subsection (b)(1) shall be exempt from taxation under this subtitle except as otherwise provided in part I of subchapter T (sec. 1381 and following). Notwithstanding part I of subchapter T (sec. 1381 and following), such an organization shall be considered an organization exempt from income taxes for purposes of any law which refers to organizations exempt from income taxes.\nThe farmers’ cooperatives exempt from taxation to the extent provided in subsection (a) are farmers’, fruit growers’, or like associations organized and operated on a cooperative basis (A) for the purpose of marketing the products of members or other producers, and turning back to them the proceeds of sales, less the necessary marketing expenses, on the basis of either the quantity or the value of the products furnished by them, or (B) for the purpose of purchasing supplies and equipment for the use of members or other persons, and turning over such supplies and equipment to them at actual cost, plus necessary expenses.\nExemption shall not be denied any such association because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal rate of interest in the State of incorporation or 8 percent per annum, whichever is greater, on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the association, upon dissolution or otherwise, beyond the fixed dividends) is owned by producers who market their products or purchase their supplies and equipment through the association.\nExemption shall not be denied any such association because there is accumulated and maintained by it a reserve required by State law or a reasonable reserve for any necessary purpose.\nExemption shall not be denied any such association which markets the products of nonmembers in an amount the value of which does not exceed the value of the products marketed for members, or which purchases supplies and equipment for nonmembers in an amount the value of which does not exceed the value of the supplies and equipment purchased for members, provided the value of the purchases made for persons who are neither members nor producers does not exceed 15 percent of the value of all its purchases.\nBusiness done for the United States or any of its agencies shall be disregarded in determining the right to exemption under this section.\nExemption shall not be denied any such association because such association computes its net earnings for purposes of determining any amount available for distribution to patrons in the manner described in paragraph (1) of section 1388(j).\nFor treatment of value-added processing involving animals, see section 1388(k).\n2004—Subsec. (b)(7).  Pub. L. 108–357  added par. (7).\n1986—Subsec. (b)(6).  Pub. L. 99–272  added par. (6).\n1962—Subsec. (a).  Pub. L. 87–834  substituted “part I of subchapter T (sec. 1381 and following)” for “section 522” in two places.\nPub. L. 108–357, title III, §\u202f316(c) ,  Oct. 22, 2004 ,  118 Stat. 1469 , provided that:  “The amendments made by this section [amending this section and  section 1388 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 99–272  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 13210(c) of Pub. L. 99–272 , set out as a note under  section 1388 of this title .\nAmendment by  Pub. L. 87–834  applicable, except as otherwise provided, to taxable years of organizations described in  section 1381(a) of this title  beginning after  Dec. 31, 1962 , see  section 17(c) of Pub. L. 87–834 , set out as an Effective Date note under  section 1381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'FARMERS’ COOPERATIVES'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 177 , related to tax on farmers’ cooperatives.\nRepeal applicable, except as otherwise provided, to taxable years of organizations described in  section 1381(a) of this title  beginning after  Dec. 31, 1962 , see  section 17(c) of Pub. L. 87–834 , set out as an Effective Date note under  section 1381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SHIPOWNERS’ PROTECTION AND INDEMNITY ASSOCIATIONS'},
  'content': 'There shall not be included in gross income the receipts of shipowners’ mutual protection and indemnity associations not organized for profit, and no part of the net earnings of which inures to the benefit of any private shareholder; but such corporations shall be subject as other persons to the tax on their taxable income from interest, dividends, and rents.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'POLITICAL ORGANIZATIONS'},
  'content': 'A political organization shall be subject to taxation under this subtitle only to the extent provided in this section. A political organization shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.\nA tax is hereby imposed for each taxable year on the political organization taxable income of every political organization. Such tax shall be computed by multiplying the political organization taxable income by the highest rate of tax specified in section 11(b).\nThe term “political organization” means a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.\nThe term “exempt function” means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. Such term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under section 162(a).\nThe term “contributions” has the meaning given to such term by section 271(b)(2).\nThe term “expenditures” has the meaning given to such term by section 271(b)(3).\nAn organization shall not fail to be treated as a qualified State or local political organization solely because such organization makes de minimis errors in complying with the State reporting requirements and the public inspection requirements described in subparagraph (A) as long as the organization corrects such errors within a reasonable period after the organization becomes aware of such errors.\nFor purposes of this subsection and subsection (e)(1), a separate segregated fund (within the meaning of  section 610 of title 18  or of any similar State statute, or within the meaning of any State statute which permits the segregation of dues moneys for exempt functions (within the meaning of subsection (e)(2))) which is maintained by an organization described in section 501(c) which is exempt from tax under section 501(a) shall be treated as a separate organization.\nFor purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any Federal, State, or local elective public office, for use by such individual exclusively for the preparation and circulation of such individual’s newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.\nIn the case of a political organization, which is a principal campaign committee, paragraph (1) of subsection (b) shall be applied by substituting “the appropriate rates” for “the highest rate”.\nThe notice required under paragraph (1) shall be transmitted not later than 24 hours after the date on which the organization is established or, in the case of any material change in the information required under paragraph (3), not later than 30 days after such material change.\nIn the case of an organization failing to meet the requirements of paragraph (1) for any period, the taxable income of such organization shall be computed by taking into account any exempt function income (and any deductions directly connected with the production of such income) or, in the case of a failure relating to a material change, by taking into account such income and deductions only during the period beginning on the date on which the material change occurs and ending on the date on which notice is given under this subsection. For purposes of the preceding sentence, the term “exempt function income” means any amount described in a subparagraph of subsection (c)(3), whether or not segregated for use for an exempt function.\nThis subsection shall not apply to any person required (without regard to this subsection) to report under the Federal Election Campaign Act of 1971 ( 52 U.S.C. 30101  et seq.) as a political committee.\nFor purposes of this subsection, a person shall be treated as having made an expenditure or contribution if the person has contracted or is otherwise obligated to make the expenditure or contribution.\nAny report required under paragraph (2) with respect to any calendar year shall be filed in electronic form.\nThe Secretary shall make any notice described in subsection (i)(1) or report described in subsection (j)(7) available for public inspection on the Internet not later than 48 hours after such notice or report has been filed (in addition to such public availability as may be made under section 6104(d)(7)).\nSection 610 of title 18 , referred to in subsec. (f)(3), was repealed by  Pub. L. 94–283, title II, §\u202f201(a) ,  May 11, 1976 ,  90 Stat. 496 .\nThe Federal Election Campaign Act of 1971, referred to in subsecs. (i)(6) and (j)(5)(A), is  Pub. L. 92–225 ,  Feb. 7, 1972 ,  86 Stat. 3 , which is classified principally to chapter 301 (§\u202f30101 et seq.) of Title 52, Voting and Elections. Section 301 of the Act is classified to  section 30101 of Title 52 . For complete classification of this Act to the Code, see Tables.\n2019—Subsec. (j)(7).  Pub. L. 116–25  struck out “if the organization has, or has reason to expect to have, contributions exceeding $50,000 or expenditures exceeding $50,000 in such calendar year” after “electronic form”.\n2017—Subsec. (b).  Pub. L. 115–97  struck out par. (1) designation and heading and struck out par. (2) which related to alternative tax in case of capital gains.\n2014—Subsec. (h)(2)(A)(i).  Pub. L. 113–295, §\u202f220 ( l )(1), substituted “( 52 U.S.C. 30102(e) )” for “( 2 U.S.C. 432(e) )”.\nSubsecs. (i)(6), (j)(5)(A).  Pub. L. 113–295, §\u202f220 ( l )(2), substituted “( 52 U.S.C. 30101  et seq.)” for “( 2 U.S.C. 431  et seq.)”.\n2002—Subsec. (e)(5).  Pub. L. 107–276, §\u202f2(b) , added par. (5).\nSubsec. (i)(1)(A).  Pub. L. 107–276, §\u202f6(c) , substituted “electronically” for “,\u2000electronically and in writing,”.\nSubsec. (i)(1)(B).  Pub. L. 107–276, §\u202f6(g)(1) , which directed the insertion of “or, in the case of any material change in the information required under paragraph (3), for the period beginning on the date on which the material change occurs and ending on the date on which such notice is given” after “given”, was executed by making the insertion after “given” the second time appearing, to reflect the probable intent of Congress.\nSubsec. (i)(2).  Pub. L. 107–276, §\u202f6(g)(2) , inserted “or, in the case of any material change in the information required under paragraph (3), not later than 30 days after such material change” after “established”.\nSubsec. (i)(3)(E), (F).  Pub. L. 107–276, §\u202f6(f) , added subpar. (E) and redesignated former subpar. (E) as (F).\nSubsec. (i)(4).  Pub. L. 107–276, §\u202f6(g)(3) , which directed the insertion of “or, in the case of a failure relating to a material change, by taking into account such income and deductions only during the period beginning on the date on which the material change occurs and ending on the date on which notice is given under this subsection” before period at end, was executed by making the insertion before period at end of first sentence, to reflect the probable intent of Congress.\nPub. L. 107–276, §\u202f6(a) , inserted at end “For purposes of the preceding sentence, the term ‘exempt function income’ means any amount described in a subparagraph of subsection (c)(3), whether or not segregated for use for an exempt function.”\nSubsec. (i)(5)(C).  Pub. L. 107–276, §\u202f1(a) , added subpar. (C).\nSubsec. (j)(1).  Pub. L. 107–276, §\u202f6(b) , inserted at end “For purposes of subtitle F, the amount imposed by this paragraph shall be assessed and collected in the same manner as penalties imposed by section 6652(c).”\nSubsec. (j)(3)(A).  Pub. L. 107–276, §\u202f6(e)(1)(A) , inserted “,\u2000date, and purpose” after “The amount”.\nSubsec. (j)(3)(B).  Pub. L. 107–276, §\u202f6(e)(1)(B) , inserted “and date” after “the amount”.\nSubsec. (j)(5)(C) to (F).  Pub. L. 107–276, §\u202f2(a) , added subpar. (C) and redesignated former subpars. (C) to (E) as (D) to (F), respectively.\nSubsec. (j)(7).  Pub. L. 107–276, §\u202f6(e)(2) , added par. (7).\nSubsec. (k).  Pub. L. 107–276, §\u202f6(e)(3) , added subsec. (k). Former subsec. (k) redesignated ( l ).\nPub. L. 107–276, §\u202f5(a) , added subsec. (k).\nSubsec. ( l ).  Pub. L. 107–276, §\u202f6(e)(3) , redesignated subsec. (k) as ( l ).\n2000—Subsec. (i).  Pub. L. 106–230, §\u202f1(a) , added subsec. (i).\nSubsec. (j).  Pub. L. 106–230, §\u202f2(a) , added subsec. (j).\n1988—Subsec. (e)(2).  Pub. L. 100–647  inserted at end “Such term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under section 162(a).”\n1986—Subsec. (g)(1).  Pub. L. 99–514, §\u202f112(b)(1)(A) , substituted “paragraph (3)” for “section 24(c)(2)”.\nSubsec. (g)(3).  Pub. L. 99–514, §\u202f112(b)(1)(B) , added par. (3).\n1984—Subsec. (g)(1).  Pub. L. 98–369, §\u202f474(r)(16) , substituted “section 24(c)(2)” for “section 41(c)(2)”.\nSubsec. (h)(2)(B).  Pub. L. 98–369, §\u202f722(c) , inserted “Nothing in this subsection shall be construed to require any designation where there is only one political committee with respect to a candidate.”\n1981—Subsec. (h).  Pub. L. 97–34  added subsec. (h).\n1978—Subsec. (b)(1).  Pub. L. 95–600  substituted “Such tax shall be computed by multiplying the political organization taxable income by the highest rate of tax specified in section 11(b)” for “Such tax shall consist of a normal tax and a surtax computed as provided in section 11 as though the political organization were a corporation and as though the political organization taxable income were the taxable income referred to in section 11” and struck out provision that for purposes of this subsection, the surtax exemption provided by section 11(d) not be allowed.\nSubsec. (c)(3)(D).  Pub. L. 95–502  added subpar. (D).\n1976—Subsec. (b)(2).  Pub. L. 94–455  substituted “net capital gain” for “net section 1201 gain” after “organization has a”.\nPub. L. 116–25, title III, §\u202f3101(d) ,  July 1, 2019 ,  133 Stat. 1015 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 6011, 6033, and 6104 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ July 1, 2019 ]. \n \n “(2)   Transitional relief.— “(A)   Small organizations.— “(i)   In general .— In the case of any small organizations, or any other organizations for which the Secretary of the Treasury or the Secretary’s delegate (hereafter referred to in this paragraph as the ‘Secretary’) determines the application of the amendments made by this section would cause undue burden without a delay, the Secretary may delay the application of such amendments, but such delay shall not apply to any taxable year beginning on or after the date that is 2 years after the enactment of this Act. \n \n “(ii)   Small organization .— For purposes of clause (i), the term ‘small organization’ means any organization— “(I)  the gross receipts of which for the taxable year are less than $200,000; and \n \n “(II)  the aggregate gross assets of which at the end of the taxable year are less than $500,000. \n \n \n \n “(B)   Organizations filing form 990–t .— In the case of any organization described in section 511(a)(2) of the Internal Revenue Code of 1986 which is subject to the tax imposed by section 511(a)(1) of such Code on its unrelated business taxable income, or any organization required to file a return under section 6033 of such Code and include information under subsection (e) thereof, the Secretary may delay the application of the amendments made by this section, but such delay shall not apply to any taxable year beginning on or after the date that is 2 years after the enactment of this Act.”\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 107–276, §\u202f1(b) ,  Nov. 2, 2002 ,  116 Stat. 1929 , provided that:  “The amendments made by subsection (a) [amending this section] shall take effect as if included in the amendments made by  Public Law 106–230 .”\nPub. L. 107–276, §\u202f2(c) ,  Nov. 2, 2002 ,  116 Stat. 1931 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in the amendments made by  Public Law 106–230 .”\nPub. L. 107–276, §\u202f5(b) ,  Nov. 2, 2002 ,  116 Stat. 1932 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to any tax assessed or amount imposed after  June 30, 2000 .”\nPub. L. 107–276, §\u202f6(h)(1) , (2),  Nov. 2, 2002 ,  116 Stat. 1934 , provided that: \n “(1)   Subsections  (a)  and  (b).— The amendments made by subsections (a) and (b) [amending this section] shall apply to failures occurring on or after the date of the enactment of this Act [ Nov. 2, 2002 ]. \n \n “(2)   Subsection  (c).— The amendments made by subsection (c) [amending this section] shall take effect as if included in the amendments made by  Public Law 106–230 .”\nPub. L. 107–276, §\u202f6(h)(4) –(6),  Nov. 2, 2002 ,  116 Stat. 1934 , provided that: \n “(4)   Subsections  (e)(1)  and  (f).— The amendments made by subsections (e)(1) and (f) [amending this section] shall apply to reports and notices required to be filed more than 30 days after the date of the enactment of this Act [ Nov. 2, 2002 ]. \n \n “(5)   Subsections  (e)(2)  and  (e)(3).— The amendments made by subsections (e)(2) and (e)(3) [amending this section] shall apply to reports required to be filed on or after  June 30, 2003 . \n \n “(6)   Subsection  (g).— “(A)   In general .— The amendments made by subsection (g) [amending this section] shall apply to material changes on or after the date of the enactment of this Act. \n \n “(B)   Transition rule .— In the case of a material change occurring during the 30-day period beginning on the date of the enactment of this Act, a notice under section 527(i) of the Internal Revenue Code of 1986 (as amended by this Act) shall not be required to be filed under such section before the later of— “(i)  30 days after the date of such material change, or \n \n “(ii)  45 days after the date of the enactment of this Act [ Nov. 2, 2002 ].”\nPub. L. 106–230, §\u202f1(d) ,  July 1, 2000 ,  114 Stat. 479 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 6104 and 6652 of this title] shall take effect on the date of the enactment of this section [ July 1, 2000 ]. \n \n “(2)   Organizations already in existence .— In the case of an organization established before the date of the enactment of this section, the time to file the notice under section 527(i)(2) of the Internal Revenue Code of 1986, as added by this section, shall be 30 days after the date of the enactment of this section. \n \n “(3)   Information availability .— The amendment made by subsection (b)(2) [amending  section 6104 of this title ] shall take effect on the date that is 45 days after the date of the enactment of this section.”\nPub. L. 106–230, §\u202f2(d) ,  July 1, 2000 ,  114 Stat. 482 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to expenditures made and contributions received after the date of the enactment of this Act [ July 1, 2000 ], except that such amendment shall not apply to expenditures made, or contributions received, after such date pursuant to a contract entered into on or before such date.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 474(r)(16) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f722(c) ,  July 18, 1984 ,  98 Stat. 973 , provided that the amendment made by that section is effective for taxable years beginning after  Dec. 31, 1981 .\nPub. L. 97–34, title I, §\u202f128(b) ,  Aug. 13, 1981 ,  95 Stat. 203 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1981 .”\nAmendment by  section 301(b)(6) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nPub. L. 95–502, title III, §\u202f302(b) ,  Oct. 21, 1978 ,  92 Stat. 1703 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1974 , except that notwithstanding any other provision of law to the contrary, no amounts held at the date of enactment of this bill [ Oct. 21, 1978 ] by an organization described in section 527(e)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] in escrow, in separate accounts for the payment of Federal taxes, or in any other fund which are proceeds described in section 527(c)(3)(D) of such Code may be used, directly or indirectly, to make a contribution or expenditure (as defined in section 301(e) and (f) of the Federal Election Campaign Act of 1971;  2 U.S.C. 431 [(e) and] (f) [now  52 U.S.C. 30101(8)  and (9)]) in connection with any election held before  January 1, 1979 . \n \n “(2)  Such amounts as described in (1) above shall not be considered as security or collateral for any loan by any State or national bank or any other person or organization.”\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 93–625, §\u202f10(e) ,  Jan. 3, 1975 ,  88 Stat. 2119 , provided that:  “The amendments made by subsections (a), (b), (c), and (d) [enacting this section and amending sections 501 and 6012 of this title] shall apply to taxable years beginning after  December 31, 1974 .”\nPub. L. 107–276, §\u202f4 ,  Nov. 2, 2002 ,  116 Stat. 1932 , provided that: \n “(a)   In General .— The Secretary of the Treasury, in consultation with the Federal Election Commission, shall publicize— “(1)  the effect of the amendments made by this Act [amending this section and sections 6012, 6033, 6104, and 7207 of this title], and \n \n “(2)  the interaction of requirements to file a notification or report under section 527 of the Internal Revenue Code of 1986 and reports under the Federal Election Campaign Act of 1971 [ 52 U.S.C. 30101  et seq.]. \n \n \n “(b)   Information .— Information provided under subsection (a) shall be included in any appropriate form, instruction, notice, or other guidance issued to the public by the Secretary of the Treasury or the Federal Election Commission regarding reporting requirements of political organizations (as defined in section 527 of the Internal Revenue Code of 1986) or reporting requirements under the Federal Election Campaign Act of 1971 [ 52 U.S.C. 30101  et seq.].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN HOMEOWNERS ASSOCIATIONS'},
  'content': 'A homeowners association (as defined in subsection (c)) shall be subject to taxation under this subtitle only to the extent provided in this section. A homeowners association shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.\nA tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association. Such tax shall be equal to 30 percent of the homeowners association taxable income (32 percent of such income in the case of a timeshare association).\nThe term “condominium management association” means any organization meeting the requirement of subparagraph (A) of paragraph (1) with respect to a condominium proj\xadect substantially all of the units of which are used by individuals for residences.\nThe term “residential real estate management association” means any organization meeting the requirements of subparagraph (A) of paragraph (1) with respect to a subdivision, development, or similar area substantially all the lots or buildings of which may only be used by individuals for residences.\nThe term “timeshare association” means any organization (other than a condominium management association) meeting the requirement of subparagraph (A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property.\n1997—Subsec. (b).  Pub. L. 105–34, §\u202f966(d) , which directed amendment of subsec. (b) by inserting before the period “(32 percent of such income in the case of a timeshare association)”, was executed by making the insertion before the period at end to reflect the probable intent of Congress.\nSubsec. (c)(1).  Pub. L. 105–34, §\u202f966(a)(1)(A) , substituted “,\u2000a residential real estate management association, or a timeshare association” for “or a residential real estate management association” in introductory provisions.\nSubsec. (c)(1)(B)(iii).  Pub. L. 105–34, §\u202f966(a)(1)(B) , added cl. (iii).\nSubsec. (c)(1)(C).  Pub. L. 105–34, §\u202f966(a)(1)(C) , inserted before comma at end “and, in the case of a timeshare association, for activities provided to or on behalf of members of the association”.\nSubsec. (c)(4).  Pub. L. 105–34, §\u202f966(a)(2) , added par. (4). Former par. (4) redesignated (5).\nSubsec. (c)(5).  Pub. L. 105–34, §\u202f966(c) , inserted concluding provisions “In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.”\nPub. L. 105–34, §\u202f966(a)(2) , redesignated par. (4) as (5).\nSubsec. (d)(3)(C).  Pub. L. 105–34, §\u202f966(b) , added subpar. (C).\n1980—Subsec. (b).  Pub. L. 96–605  substituted provision that all income of a homeowners association be taxed at a rate of 30 per cent for provision that all income of a homeowners association be taxed a sum computed by multiplying the homeowners association taxable income by the highest rate of tax specified in  section 11(b) of this title  and struck out provision providing for alternative tax in case of capital gains.\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f301(b)(7) , substituted “Such tax shall be computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b)” for “Such tax shall consist of a normal tax and a surtax computed as provided in section 11 as though the homeowners association were a corporation and as though the homeowners association taxable income were the taxable income referred to in section 11” and struck out provision that for purposes of this subsection, the surtax exemption provided by section 11(d) not be allowed.\nSubsec. (b)(2)(B).  Pub. L. 95–600, §\u202f403(c)(2) , substituted provision related to amount being determined according to section 1201(a) for provision requiring an amount of 30 percent.\nSubsec. (c)(2).  Pub. L. 95–600, §\u202f701(n)(1) , substituted “by individuals for residences” for “as residences”.\nPub. L. 105–34, title IX, §\u202f966(e) ,  Aug. 5, 1997 ,  111 Stat. 895 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1996 .”\nPub. L. 96–605, title I, §\u202f105(b) ,  Dec. 28, 1980 ,  94 Stat. 3523 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1980 .”\nAmendment by  section 301(b)(7) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nPub. L. 95–600, title IV, §\u202f403(d)(3) ,  Nov. 6, 1978 ,  92 Stat. 2869 , provided that:  “The amendments made by paragraphs (2), (3), and (4) of subsection (c) [amending this section and sections 857 and 904 of this title] shall take effect on the date of the enactment of this Act [ Nov. 6, 1978 ].”\nPub. L. 95–600, title VII, §\u202f701(n)(2) ,  Nov. 6, 1978 ,  92 Stat. 2907 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1973 .”\nPub. L. 94–455, title XXI, §\u202f2101(e) ,  Oct. 4, 1976 ,  90 Stat. 1899 , provided that:  “Except as provided in subsection (f)(2) [set out as a note under  section 216 of this title ], the amendments made by this section [enacting this section and amending sections 216 and 6012 of this title] shall apply to taxable years beginning after  December 31, 1973 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN SAVINGS ENTITIES'},
  'content': 'A qualified tuition program shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such program shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).\nA program shall not be treated as a qualified tuition program unless it provides that purchases or contributions may only be made in cash.\nA program shall not be treated as a qualified tuition program unless it provides separate accounting for each designated beneficiary.\nA program shall not be treated as a qualified tuition program unless it provides that any contributor to, or designated beneficiary under, such program may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.\nA program shall not be treated as a qualified tuition program if it allows any interest in the program or any portion thereof to be used as security for a loan.\nA program shall not be treated as a qualified tuition program unless it provides adequate safeguards to prevent contributions on behalf of a designated beneficiary in excess of those necessary to provide for the qualified higher education expenses of the beneficiary.\nIf the aggregate amount of contributions described in subparagraph (A) during the calendar year by a donor exceeds the limitation for such year under section 2503(b), such aggregate amount shall, at the election of the donor, be taken into account for purposes of such section ratably over the 5-year period beginning with such calendar year.\nAny distribution under a qualified tuition program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.\nNo amount shall be includible in gross income under subparagraph (A) by reason of a distribution which consists of providing a benefit to the distributee which, if paid for by the distributee, would constitute payment of a qualified higher education expense.\nIn the case of any taxable year beginning before  January 1, 2004 , clauses (i) and (ii) shall not apply with respect to any distribution during such taxable year under a qualified tuition program established and maintained by 1 or more eligible educational institutions.\nAny benefit furnished to a designated beneficiary under a qualified tuition program shall be treated as a distribution to the beneficiary for purposes of this paragraph.\nAny change in the designated beneficiary of an interest in a qualified tuition program shall not be treated as a distribution for purposes of subparagraph (A) if the new beneficiary is a member of the family of the old beneficiary.\nClause (i)(I) shall not apply to any transfer if such transfer occurs within 12 months from the date of a previous transfer to any qualified tuition program for the benefit of the designated beneficiary.\nIn the case of a beneficiary who receives a refund of any qualified higher education expenses from an eligible educational institution, subparagraph (A) shall not apply to that portion of any distribution for the taxable year which is recontributed to a qualified tuition program of which such individual is a beneficiary, but only to the extent such recontribution is made not later than 60 days after the date of such refund and does not exceed the refunded amount.\nClause (i) shall only apply to so much of any distribution as does not exceed the amount applicable to the designated beneficiary under section 408A(c)(2) for the taxable year (reduced by the amount of aggregate contributions made during the taxable year to all individual retirement plans maintained for the benefit of the designated beneficiary).\nThis subparagraph shall not apply to any distribution described in clause (i) to the extent that the aggregate amount of such distributions with respect to the designated beneficiary for such taxable year and all prior taxable years exceeds $35,000.\nNo amount shall be includible in the gross estate of any individual for purposes of chapter 11 by reason of an interest in a qualified tuition program.\nSubparagraph (A) shall not apply to amounts distributed on account of the death of a beneficiary.\nIn the case of a donor who makes the election described in paragraph (2)(B) and who dies before the close of the 5-year period referred to in such paragraph, notwithstanding subparagraph (A), the gross estate of the donor shall include the portion of such contributions properly allocable to periods after the date of death of the donor.\nExcept as provided in subparagraph (B), in no event shall a distribution from a qualified tuition program be treated as a taxable gift.\nThe tax imposed by section 530(d)(4) shall apply to any payment or distribution from a qualified tuition program in the same manner as such tax applies to a payment or distribution from a Coverdell education savings account. This paragraph shall not apply to any payment or distribution in any taxable year beginning before  January 1, 2004 , which is includible in gross income but used for qualified higher education expenses of the designated beneficiary.\nAny reference in this subsection to the term “qualified higher education expense” shall include a reference to expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.\nAny reference in this subsection to the term “qualified higher education expense” shall include a reference to expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act ( 29 U.S.C. 50 ).\nAny reference in this subsection to the term “qualified higher education expense” shall include a reference to amounts paid as principal or interest on any qualified education loan (as defined in section 221(d)) of the designated beneficiary or a sibling of the designated beneficiary.\nThe amount of distributions treated as a qualified higher education expense under this paragraph with respect to the loans of any individual shall not exceed $10,000 (reduced by the amount of distributions so treated for all prior taxable years).\nFor purposes of subparagraph (B) and subsection (d), amounts treated as a qualified higher education expense with respect to the loans of a sibling of the designated beneficiary shall be taken into account with respect to such sibling and not with respect to such designated beneficiary.\nFor purposes of this paragraph, the term “sibling” means an individual who bears a relationship to the designated beneficiary which is described in section 152(d)(2)(B).\nEach officer or employee having control of the qualified tuition program or their designee shall make such reports regarding such program to the Secretary and to designated beneficiaries with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this paragraph shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.\nIn the case of any distribution described in subsection (c)(3)(E), the officer or employee having control of the qualified tuition program (or their designee) shall provide a report to the trustee of the Roth IRA to which the distribution is made. Such report shall be filed at such time and in such manner as the Secretary may require and shall include information with respect to the contributions, distributions, and earnings of the qualified tuition program as of the date of the distribution described in subsection (c)(3)(A), together with such other matters as the Secretary may require.\nIn the case of an individual who is an eligible student (as defined in section 25A(b)(3)) for any academic period, such term shall also include reasonable costs for such period (as determined under the qualified tuition program) incurred by the designated beneficiary for room and board while attending such institution. For purposes of subsection (b)(6), a designated beneficiary shall be treated as meeting the requirements of this clause.\nAn interest in a qualified tuition program shall not be treated as debt for purposes of section 514.\nNotwithstanding any other provision of this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section and to prevent abuse of such purposes, including regulations under chapters 11, 12, and 13 of this title.\nThe date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, referred to in subsec. (e)(3)(B)(ii)(I), is the date of enactment of  Pub. L. 107–16 , which was approved  June 7, 2001 .\nThe date of the enactment of this paragraph, referred to in subsec. (e)(5)(A), probably means the date of enactment of  Pub. L. 105–34 , which enacted subsec. (e)(5) and which was approved  Aug. 5, 1997 .\nThe Higher Education Act of 1965, referred to in subsec. (e)(5), is  Pub. L. 89–329 ,  Nov. 8, 1965 ,  79 Stat. 1219 . Title IV of the Act is classified generally to subchapter IV (§\u202f1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under  section 1001 of Title 20  and Tables.\n2022—Subsec. (c)(3)(E).  Pub. L. 117–328, §\u202f126(a) , added subpar. (E).\nSubsec. (d).  Pub. L. 117–328, §\u202f126(c) , designated existing provisions as par. (1), inserted heading, substituted “by this paragraph” for “by this subsection”, and added par. (2).\n2019—Subsec. (c)(8).  Pub. L. 116–94, §\u202f302(a) , added par. (8).\nSubsec. (c)(9).  Pub. L. 116–94, §\u202f302(b)(1) , added par. (9).\n2018—Subsec. (c)(3)(B)(v).  Pub. L. 115–141, §\u202f101 ( l )(15), substituted “American Opportunity” for “Hope” in heading.\nSubsec. (c)(6).  Pub. L. 115–141, §\u202f401(a)(127) , substituted “a Coverdell” for “an Coverdell”.\nSubsec. (e)(3)(A).  Pub. L. 115–141, §\u202f401(a)(128) , substituted comma for semicolon at end of cl. (i) and inserted “,\u2000and” at end of cl. (ii).\n2017—Subsec. (c)(3)(C)(i).  Pub. L. 115–97, §\u202f11025(a) , added subcl. (III) and inserted concluding provisions.\nSubsec. (c)(7).  Pub. L. 115–97, §\u202f11032(a)(1) , added par. (7).\nSubsec. (e)(3)(A).  Pub. L. 115–97, §\u202f11032(a)(2) , inserted at end of concluding provisions “The amount of cash distributions from all qualified tuition programs described in subsection (b)(1)(A)(ii) with respect to a beneficiary during any taxable year shall, in the aggregate, include not more than $10,000 in expenses described in subsection (c)(7) incurred during the taxable year.”\n2015—Subsec. (c)(3)(D).  Pub. L. 114–113, §\u202f302(c)(1) , added subpar. (D).\nPub. L. 114–113, §\u202f302(b)(1) , struck out subpar. (D). Text read as follows: “For purposes of applying section 72—\n“(i) to the extent provided by the Secretary, all qualified tuition programs of which an individual is a designated beneficiary shall be treated as one program,\n“(ii) except to the extent provided by the Secretary, all distributions during a taxable year shall be treated as one distribution, and\n“(iii) except to the extent provided by the Secretary, the value of the contract, income on the contract, and investment in the contract shall be computed as of the close of the calendar year in which the taxable year begins.”\nSubsec. (e)(3)(A)(iii).  Pub. L. 114–113, §\u202f302(a)(1) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “expenses paid or incurred in 2009 or 2010 for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary’s family during any of the years the beneficiary is enrolled at an eligible educational institution.”\n2014—Subsec. (b)(4).  Pub. L. 113–295  substituted “Limited” for “No” in heading and “may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.” for “may not directly or indirectly direct the investment of any contributions to the program (or any earnings thereon).” in text.\n2009—Subsec. (e)(3)(A).  Pub. L. 111–5  added cl. (iii) and concluding provisions.\n2006—Subsec. (f).  Pub. L. 109–280 , which directed the addition of subsec. (f) to section 529, without specifying the act to be amended, was executed by making the addition to this section, which is section 529 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n2005—Subsec. (c)(6).  Pub. L. 109–135  substituted “Coverdell education savings account” for “education individual retirement account”.\n2004—Subsec. (c)(5)(B).  Pub. L. 108–311, §\u202f406(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The taxes imposed by chapters 12 and 13 shall apply to a transfer by reason of a change in the designated beneficiary under the program (or a rollover to the account of a new beneficiary) only if the new beneficiary is a generation below the generation of the old beneficiary (determined in accordance with section 2651).”\nSubsec. (e)(2)(B).  Pub. L. 108–311, §\u202f207(21) , substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.\n2002—Subsec. (e)(3)(B)(i).  Pub. L. 107–147  substituted “subsection (b)(6)” for “subsection (b)(7)”.\n2001— Pub. L. 107–16, §\u202f402(a)(4)(D) , struck out “State” before “tuition” in section catchline.\nSubsec. (a).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (b).  Pub. L. 107–16, §\u202f402(a)(4)(C) , substituted “Qualified tuition” for “Qualified State tuition” in heading.\nSubsec. (b)(1).  Pub. L. 107–16, §\u202f402(a)(1) , (4)(A), in introductory provisions, substituted “qualified tuition” for “qualified State tuition” and inserted “or by 1 or more eligible educational institutions” after “thereof”, and added concluding provisions.\nSubsec. (b)(1)(A)(ii).  Pub. L. 107–16, §\u202f402(a)(2) , inserted “in the case of a program established and maintained by a State or agency or instrumentality thereof,” before “may make”.\nSubsec. (b)(2).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (b)(3) to (7).  Pub. L. 107–16, §\u202f402(a)(3)(A) , (4)(A), redesignated pars. (4) to (7) as (3) to (6), respectively, substituted “qualified tuition” for “qualified State tuition” wherever appearing, and struck out heading and text of former par. (3). Text read as follows: “A program shall not be treated as a qualified State tuition program unless it imposes a more than de minimis penalty on any refund of earnings from the account which are not—\n“(A) used for qualified higher education expenses of the designated beneficiary,\n“(B) made on account of the death or disability of the designated beneficiary, or\n“(C) made on account of a scholarship (or allowance or payment described in section 135(d)(1)(B) or (C)) received by the designated beneficiary to the extent the amount of the refund does not exceed the amount of the scholarship, allowance, or payment.”\nSubsec. (c)(1)(A), (3)(A).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (c)(3)(B).  Pub. L. 107–16, §\u202f402(b)(1) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “Any benefit furnished to a designated beneficiary under a qualified tuition program shall be treated as a distribution to the beneficiary.”\nPub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (c)(3)(B)(vi).  Pub. L. 107–22  substituted “Coverdell education savings” for “education individual retirement” in heading.\nSubsec. (c)(3)(C).  Pub. L. 107–16, §\u202f402(c)(3) , inserted “or programs” after “beneficiaries” in heading.\nSubsec. (c)(3)(C)(i).  Pub. L. 107–16, §\u202f402(c)(1) , substituted “transferred—” for “transferred”, added subcl. (I), and designated existing provisions “to the credit” as subcl. (II).\nPub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (c)(3)(C)(ii).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (c)(3)(C)(iii).  Pub. L. 107–16, §\u202f402(c)(2) , added cl. (iii).\nSubsec. (c)(3)(D)(i).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (c)(3)(D)(ii).  Pub. L. 107–16, §\u202f402(g)(1) , inserted “except to the extent provided by the Secretary,” before “all distributions”.\nSubsec. (c)(3)(D)(iii).  Pub. L. 107–16, §\u202f402(g)(2) , inserted “except to the extent provided by the Secretary,” before “the value”.\nSubsec. (c)(6).  Pub. L. 107–16, §\u202f402(a)(3)(B) , added par. (6).\nSubsecs. (d), (e)(1)(A), (C).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (e)(2)(D).  Pub. L. 107–16, §\u202f402(d) , added subpar. (D).\nSubsec. (e)(3)(A).  Pub. L. 107–16, §\u202f402(f) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘qualified higher education expenses’ means tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution.”\nSubsec. (e)(3)(B)(i).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (e)(3)(B)(ii).  Pub. L. 107–16, §\u202f402(e) , reenacted heading without change and amended text of cl. (ii) generally. Prior to amendment, text read as follows: “The amount treated as qualified higher education expenses by reason of the preceding sentence shall not exceed the minimum amount (applicable to the student) included for room and board for such period in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965,  20 U.S.C. 1087 ll , as in effect on the date of the enactment of this paragraph) for the eligible educational institution for such period.”\nSubsec. (e)(4).  Pub. L. 107–16, §\u202f402(a)(4)(A) , substituted “qualified tuition” for “qualified State tuition”.\n2000—Subsec. (e)(3)(B).  Pub. L. 106–554  struck out “under guaranteed plans” after “students” in heading.\n1998—Subsec. (c)(3)(A).  Pub. L. 105–206, §\u202f6004(c)(2) , substituted “section 72” for “section 72(b)”.\nSubsec. (e)(2).  Pub. L. 105–206, §\u202f6004(c)(3) , reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘member of the family’ means—\n“(A) an individual who bears a relationship to another individual which is a relationship described in paragraphs (1) through (8) of section 152(a), and\n“(B) the spouse of any individual described in subparagraph (A).”\n1997—Subsec. (b)(5).  Pub. L. 105–34, §\u202f211(b)(4) , inserted “directly or indirectly” after “may not”.\nSubsec. (c)(2).  Pub. L. 105–34, §\u202f211(b)(3)(A)(i) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “In no event shall a contribution to a qualified State tuition program on behalf of a designated beneficiary be treated as a taxable gift for purposes of chapter 12.”\nSubsec. (c)(3)(A).  Pub. L. 105–34, §\u202f211(d) , substituted “section 72(b)” for “section 72”.\nSubsec. (c)(4).  Pub. L. 105–34, §\u202f211(b)(3)(B) , amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “The value of any interest in any qualified State tuition program which is attributable to contributions made by an individual to such program on behalf of any designated beneficiary shall be includible in the gross estate of the contributor for purposes of chapter 11.”\nSubsec. (c)(5).  Pub. L. 105–34, §\u202f211(b)(3)(A)(ii) , amended heading and text of par. (5) generally. Prior to amendment, text read as follows: “For purposes of section 2503(e), the waiver (or payment to an educational institution) of qualified higher education expenses of a designated beneficiary under a qualified State tuition program shall be treated as a qualified transfer.”\nSubsec. (d).  Pub. L. 105–34, §\u202f211(e)(2)(A) , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows:\n“(d)  Reporting Requirements.—\n“(1)  In general .—If there is a distribution to any individual with respect to an interest in a qualified State tuition program during any calendar year, each officer or employee having control of the qualified State tuition program or their designee shall make such reports as the Secretary may require regarding such distribution to the Secretary and to the designated beneficiary or the individual to whom the distribution was made. Any such report shall include such information as the Secretary may prescribe.\n“(2) Timing of reports.—Any report required by this subsection—\n“(A) shall be filed at such time and in such matter as the Secretary prescribes, and\n“(B) shall be furnished to individuals not later than January 31 of the calendar year following the calendar year to which such report relates.”\nSubsec. (e)(1)(B).  Pub. L. 105–34, §\u202f1601(h)(1)(A) , substituted “subsection (c)(3)(C)” for “subsection (c)(2)(C)”.\nSubsec. (e)(1)(C).  Pub. L. 105–34, §\u202f1601(h)(1)(B) , inserted “(or agency or instrumentality thereof)” after “local government”.\nSubsec. (e)(2).  Pub. L. 105–34, §\u202f211(b)(1) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘member of the family’ has the same meaning given such term as section 2032A(e)(2).”\nSubsec. (e)(3).  Pub. L. 105–34, §\u202f211(a) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “The term ‘qualified higher education expenses’ means tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution (as defined in section 135(c)(3)).”\nSubsec. (e)(5).  Pub. L. 105–34, §\u202f211(b)(2) , added par. (5).\nAmendment by  Pub. L. 117–328  applicable with respect to distributions after  Dec. 31, 2023 , see  section 126(d) of Pub. L. 117–328 , set out as a note under  section 408A of this title .\nAmendment by  Pub. L. 116–94  applicable to distributions made after  Dec. 31, 2018 , see  section 302(c) of Pub. L. 116–94 , set out as a note under  section 221 of this title .\nAmendment by section 101( l )(15) of  Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nPub. L. 115–97, title I, §\u202f11025(b) ,  Dec. 22, 2017 ,  131 Stat. 2076 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [ Dec. 22, 2017 ].”\nPub. L. 115–97, title I, §\u202f11032(b) ,  Dec. 22, 2017 ,  131 Stat. 2082 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions made after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title III, §\u202f302(a)(2) ,  Dec. 18, 2015 ,  129 Stat. 3086 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title III, §\u202f302(b)(2) ,  Dec. 18, 2015 ,  129 Stat. 3086 , provided that:  “The amendment made by this subsection [amending this section] shall apply to distributions after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title III, §\u202f302(c)(2) ,  Dec. 18, 2015 ,  129 Stat. 3087 , provided that: \n “(A)   In general .— The amendment made by this subsection [amending this section] shall apply with respect to refunds of qualified higher education expenses after  December 31, 2014 . \n \n “(B)   Transition rule .— In the case of a refund of qualified higher education expenses received after  December 31, 2014 , and before the date of the enactment of this Act [ Dec. 18, 2015 ], section 529(c)(3)(D) of the Internal Revenue Code of 1986 (as added by this subsection) shall be applied by substituting ‘not later than 60 days after the date of the enactment of this subparagraph [ Dec. 18, 2015 ]’ for ‘not later than 60 days after the date of such refund’.”\nPub. L. 113–295, div. B, title I, §\u202f105(b) ,  Dec. 19, 2014 ,  128 Stat. 4064 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 111–5, div. B, title I, §\u202f1005(b) ,  Feb. 17, 2009 ,  123 Stat. 316 , provided that:  “The amendments made by this section [amending this section] shall apply to expenses paid or incurred after  December 31, 2008 .”\nAmendment by  section 207(21) of Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  section 406(a) of Pub. L. 108–311  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 406(h) of Pub. L. 108–311 , set out as a note under  section 55 of this title .\nAmendment by  Pub. L. 107–22  effective  July 26, 2001 , see  section 1(c) of Pub. L. 107–22 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 402(h) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title II, §\u202f211(f) ,  Aug. 5, 1997 ,  111 Stat. 812 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 135 and 6693 of this title] shall take effect on  January 1, 1998 . \n \n “(2)   Expenses to include room and board .— The amendment made by subsection (a) shall take effect as if included in the amendments made by section 1806 of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 ]. \n \n “(3)   Eligible educational institution .— The amendment made by subsection (b)(2) [amending this section] shall apply to distributions after  December 31, 1997 , with respect to expenses paid after such date (in taxable years ending after such date), for education furnished in academic periods beginning after such date. \n \n “(4)   Coordination with education savings bonds .— The amendment made by subsection (c) [amending  section 135 of this title ] shall apply to taxable years beginning after  December 31, 1997 . \n \n “(5)   Estate and gift tax changes.— “(A)   Gift tax changes .— Paragraphs (2) and (5) of section 529(c) of the Internal Revenue Code of 1986, as amended by this section, shall apply to transfers (including designations of new beneficiaries) made after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(B)   Estate tax changes .— Paragraph (4) of such section 529(c) shall apply to estates of decedents dying after  June 8, 1997 . \n \n \n “(6)   Transition rule for pre- august 20, 1996  contracts .— In the case of any contract issued prior to  August 20, 1996 , section 529(c)(3)(C) of the Internal Revenue Code of 1986 shall be applied for taxable years ending after  August 20, 1996 , without regard to the requirement that a distribution be transferred to a member of the family or the requirement that a change in beneficiaries may be made only to a member of the family.”\nAmendment by section 1601(h)(1)(A), (B) of  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nPub. L. 104–188, title I, §\u202f1806(c) ,  Aug. 20, 1996 ,  110 Stat. 1898 , as amended by  Pub. L. 105–34, title XVI, §\u202f1601(h)(1)(C) ,  Aug. 5, 1997 ,  111 Stat. 1092 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending  section 135 of this title ] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Transition rule .— If— “(A)  a State or agency or instrumentality thereof maintains, on the date of the enactment of this Act, a program under which persons may purchase tuition credits or certificates on behalf of, or make contributions for education expenses of, a designated beneficiary, and \n \n “(B)  such program meets the requirements of a qualified State tuition program before the later of— “(i)  the date which is 1 year after such date of enactment, or \n \n “(ii)  the first day of the first calendar quarter after the close of the first regular session of the State legislature that begins after such date of enactment, \n \n\n then such program (as in effect on  August 20, 1996 ) shall be treated as a qualified State tuition program with respect to contributions (and earnings allocable thereto) pursuant to contracts entered into under such program before the first date on which such program meets such requirements (determined without regard to this paragraph) and the provisions of such program (as so in effect) shall apply in lieu of section 529(b) of the Internal Revenue Code of 1986 with respect to such contributions and earnings. \n \n\n For purposes of subparagraph (B)(ii), if a State has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN SAVINGS ENTITIES'},
  'content': 'A qualified ABLE program shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such program shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).\nA program shall not be treated as a qualified ABLE program unless it provides separate accounting for each designated beneficiary.\nA program shall not be treated as a qualified ABLE program unless it provides that any designated beneficiary under such program may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.\nA program shall not be treated as a qualified ABLE program if it allows any interest in the program or any portion thereof to be used as security for a loan.\nA program shall not be treated as a qualified ABLE program unless it provides adequate safeguards to prevent aggregate contributions on behalf of a designated beneficiary in excess of the limit established by the State under section 529(b)(6). For purposes of the preceding sentence, aggregate contributions include contributions under any prior qualified ABLE program of any State or agency or instrumentality thereof.\nThe term “poverty line” has the meaning given such term by section 673 of the Community Services Block Grant Act ( 42 U.S.C. 9902 ).\nAny distribution under a qualified ABLE program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.\nSubparagraph (A) shall not apply to any amount paid or distributed from an ABLE account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into another ABLE account for the benefit of the same designated beneficiary or an eligible individual who is a member of the family of the designated beneficiary.\nAny change in the designated beneficiary of an interest in a qualified ABLE program during a taxable year shall not be treated as a distribution for purposes of subparagraph (A) if the new beneficiary is an eligible individual for such taxable year and a member of the family of the former beneficiary.\nClause (i) shall not apply to any transfer if such transfer occurs within 12 months from the date of a previous transfer to any qualified ABLE program for the benefit of the designated beneficiary.\nIn no event shall a distribution from an ABLE account to such account’s designated beneficiary be treated as a taxable gift.\nThe taxes imposed by chapters 12 and 13 shall not apply to a transfer by reason of a change in the designated beneficiary under subsection (c)(1)(C).\nThe tax imposed by this chapter for any taxable year on any taxpayer who receives a distribution from a qualified ABLE program which is includible in gross income shall be increased by 10 percent of the amount which is so includible.\nSubparagraph (A) shall not apply if the payment or distribution is made to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary.\nIf an ABLE account is established for a designated beneficiary, no account subsequently established for such beneficiary shall be treated as an ABLE account. The preceding sentence shall not apply in the case of an account established for purposes of a rollover described in paragraph (1)(C)(i) of this section if the transferor account is closed as of the end of the 60th day referred to in paragraph (1)(C)(i).\nEach officer or employee having control of the qualified ABLE program or their designee shall make such reports regarding such program to the Secretary and to designated beneficiaries with respect to contributions, distributions, the return of excess contributions, and such other matters as the Secretary may require.\nFor research purposes, the Secretary shall make available to the public reports containing aggregate information, by diagnosis and other relevant characteristics, on contributions and distributions from the qualified ABLE program. In carrying out the preceding sentence an item may not be made available to the public if such item can be associated with, or otherwise identify, directly or indirectly, a particular individual.\nA qualified ABLE program shall submit a notice to the Secretary upon the establishment of an ABLE account. Such notice shall contain the name of the designated beneficiary and such other information as the Secretary may require.\nFor purposes of section 103 of the Stephen Beck, Jr., ABLE Act of 2014, States shall submit electronically on a monthly basis to the Commissioner of Social Security, in the manner specified by the Commissioner, statements on relevant distributions and account balances from all ABLE accounts.\nThe reports and notices required by paragraphs (1), (2), and (3) shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.\nNo inference may be drawn from a disability certification for purposes of establishing eligibility for benefits under title II, XVI, or XIX of the Social Security Act.\nThe term “designated beneficiary” in connection with an ABLE account established under a qualified ABLE program means the eligible individual who established an ABLE account and is the owner of such account.\nThe term “member of the family” means, with respect to any designated beneficiary, an individual who bears a relationship to such beneficiary which is described in section 152(d)(2)(B). For purposes of the preceding sentence, a rule similar to the rule of section 152(f)(1)(B) shall apply.\nThe term “qualified disability expenses” means any expenses related to the eligible individual’s blindness or disability which are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses, which are approved by the Secretary under regulations and consistent with the purposes of this section.\nThe term “ABLE account” means an account established by an eligible individual, owned by such eligible individual, and maintained under a qualified ABLE program.\nSubject to any outstanding payments due for qualified disability expenses, upon the death of the designated beneficiary, all amounts remaining in the qualified ABLE account not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the account, net of any premiums paid from the account or paid by or on behalf of the beneficiary to a Medicaid Buy-In program under any State Medicaid plan established under title XIX of the Social Security Act, shall be distributed to such State upon filing of a claim for payment by such State. For purposes of this paragraph, the State shall be a creditor of an ABLE account and not a beneficiary. Subsection (c)(3) shall not apply to a distribution under the preceding sentence.\nPub. L. 117–328, div. T, title I, §\u202f124 ,  Dec. 29, 2022 ,  136 Stat. 5314 , provided that, applicable to taxable years beginning after  Dec. 31, 2025 , paragraphs (1)(A) and (2)(A)(i)(II) of subsection (e) of this section are amended by striking “age 26” and inserting “age 46”. See 2022 Amendment note below.\nThe Stephen Beck, Jr., ABLE Act of 2014, referred to in subsec. (d)(4), is div. B of  Pub. L. 113–295 ,  Dec. 19, 2014 ,  128 Stat. 4056 , also known as the “Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014”.  Section 103 of div. B of Pub. L. 113–295  is set out as a note under this section.\nThe Social Security Act, referred to in subsecs. (e)(1)(A), (2) and (f), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Titles II, XVI, and XIX of the Act are classified generally to subchapters II (§\u202f401 et seq.), XVI (§\u202f1381 et seq.), and XIX (§\u202f1396 et seq.), respectively, of chapter 7 of Title 42, The Public Health and Welfare. Sections 1614 and 1861 of the Act are classified to sections 1382c and 1395x, respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2022—Subsec. (e)(1)(A), (2)(A)(i)(II).  Pub. L. 117–328  substituted “age 46” for “age 26”.\n2018—Subsec. (c)(1)(D).  Pub. L. 115–141, §\u202f101 ( o ), struck out subpar. (D) which related to operating rules.\nSubsec. (d)(4).  Pub. L. 115–141, §\u202f401(a)(129) , substituted “Stephen Beck, Jr., ABLE Act of 2014” for “Achieving a Better Life Experience Act of 2014”.\nSubsec. (e)(4).  Pub. L. 115–141, §\u202f401(a)(130) , substituted “section 152(d)(2)(B)” for “subparagraph section 152(d)(2)(B)”.\n2017—Subsec. (b)(2).  Pub. L. 115–97, §\u202f11024(a)(2) , inserted at end of concluding provisions “A designated beneficiary (or a person acting on behalf of such beneficiary) shall maintain adequate records for purposes of ensuring, and shall be responsible for ensuring, that the requirements of subparagraph (B)(ii) are met.”\nSubsec. (b)(2)(B).  Pub. L. 115–97, §\u202f11024(a)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “except in the case of contributions under subsection (c)(1)(C), if such contribution to an ABLE account would result in aggregate contributions from all contributors to the ABLE account for the taxable year exceeding the amount in effect under section 2503(b) for the calendar year in which the taxable year begins.”\nSubsec. (b)(7).  Pub. L. 115–97, §\u202f11024(a)(3) , added par. (7).\n2015—Subsec. (b)(1)(B) to (D).  Pub. L. 114–113, §\u202f303(a) , inserted “and” at end of subpar. (B), redesignated subpar. (D) as (C), and struck out former subpar. (C) which read as follows: “which allows for the establishment of an ABLE account only for a designated beneficiary who is a resident of such State or a resident of a contracting State, and”.\nSubsec. (c)(1)(C)(i).  Pub. L. 114–113, §\u202f303(c)(2) , substituted “member of the family” for “family member”.\nSubsec. (d)(3).  Pub. L. 114–113, §\u202f303(b)(1) , struck out “and State of residence” after “the name”.\nSubsec. (d)(4).  Pub. L. 114–113, §\u202f303(c)(1) , substituted “section 103” for “section 4”.\nSubsec. (e)(7).  Pub. L. 114–113, §\u202f303(b)(2) , struck out par. (7). Text read as follows: “The term ‘contracting State’ means a State without a qualified ABLE program which has entered into a contract with a State with a qualified ABLE program to provide residents of the contracting State access to a qualified ABLE program.”\nPub. L. 117–328, div. T, title I, §\u202f124(b) ,  Dec. 29, 2022 ,  136 Stat. 5314 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2025 .”\nAmendment by section 101( o ) of  Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 22, 2017 , see  section 11024(c) of Pub. L. 115–97 , set out as a note under  section 25B of this title .\nPub. L. 114–113, div. Q, title III, §\u202f303(d) ,  Dec. 18, 2015 ,  129 Stat. 3087 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nSection applicable to taxable years beginning after  Dec. 31, 2014 , see  section 102(f)(1) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 552a of Title 5 , Government Organization and Employees.\nPub. L. 113–295, div. B, title I, §\u202f102(f)(2) ,  Dec. 19, 2014 ,  128 Stat. 4062 , provided that:  “The Secretary of the Treasury (or the Secretary’s designee) shall promulgate the regulations or other guidance required under section 529A(g) of the Internal Revenue Code of 1986, as added by subsection (a), not later than 6 months after the date of the enactment of this Act [ Dec. 19, 2014 ].”\nPub. L. 113–295, div. B, title I, §\u202f101 ,  Dec. 19, 2014 ,  128 Stat. 4056 , provided that:  \n “The purposes of this title [title I of div. B of  Pub. L. 113–295 , enacting this section, amending sections 26, 529, 877A, 4965, 4973, and 6693, of this title,  section 552a of Title 5 , Government Organization and Employees, sections 521, 541, and 707 of Title 11, Bankruptcy, and  section 5517 of Title 12 , Banks and Banking, and enacting provisions set out as notes under this section,  section 529 of this title ,  section 552a of Title 5 , and  section 521 of Title 11 ] are as follows: \n “(1)  To encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life. \n \n “(2)  To provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act [ 42 U.S.C. 1396  et seq.], the supplemental security income program under title XVI of such Act [ 42 U.S.C. 1381  et seq.], the beneficiary’s employment, and other sources.”\nPub. L. 113–295, div. B, title I, §\u202f103 ,  Dec. 19, 2014 ,  128 Stat. 4063 , provided that: \n “(a)   Account Funds Disregarded for Purposes of Certain Other Means-Tested Federal Programs .— Notwithstanding any other provision of Federal law that requires consideration of 1 or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit authorized by such provision to be provided to or for the benefit of such individual, any amount (including earnings thereon) in the ABLE account (within the meaning of section 529A of the Internal Revenue Code of 1986) of such individual, any contributions to the ABLE account of the individual, and any distribution for qualified disability expenses (as defined in subsection (e)(5) of such section) shall be disregarded for such purpose with respect to any period during which such individual maintains, makes contributions to, or receives distributions from such ABLE account, except that, in the case of the supplemental security income program under title XVI of the Social Security Act [ 42 U.S.C. 1381  et seq.]— “(1)  a distribution for housing expenses (within the meaning of such subsection) shall not be so disregarded, and \n \n “(2)  in the case of such program, any amount (including such earnings) in such ABLE account shall be considered a resource of the designated beneficiary to the extent that such amount exceeds $100,000. \n \n \n “(b)   Suspension of SSI Benefits During Periods of Excessive Account Funds.— “(1)   In general .— The benefits of an individual under the supplemental security income program under title XVI of the Social Security Act shall not be terminated, but shall be suspended, by reason of excess resources of the individual attributable to an amount in the ABLE account (within the meaning of section 529A of the Internal Revenue Code of 1986) of the individual not disregarded under subsection (a) of this section. \n \n “(2)   No impact on medicaid eligibility .— An individual who would be receiving payment of such supplemental security income benefits but for the application of paragraph (1) shall be treated for purposes of title XIX of the Social Security Act [ 42 U.S.C. 1396  et seq.] as if the individual continued to be receiving payment of such benefits. \n \n \n “(c)   Effective Date .— This section shall take effect on the date of the enactment of this Act [ Dec. 19, 2014 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CERTAIN SAVINGS ENTITIES'},
  'content': 'A Coverdell education savings account shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, the Coverdell education savings account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).\nSuch term shall include any contribution to a qualified tuition program (as defined in section 529(b)) on behalf of the designated beneficiary (as defined in section 529(e)(1)); but there shall be no increase in the investment in the contract for purposes of applying section 72 by reason of any portion of such contribution which is not includible in gross income by reason of subsection (d)(2).\nThe term “school” means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law.\nThe term “computer technology or equipment” means computer software (as defined by section 197(e)(3)(B)), computer or peripheral equipment (as defined by section 168(i)(2)(B)), and fiber optic cable related to computer use.\nAn individual shall be deemed to have made a contribution to an education individual retirement account on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).\nFor purposes of paragraph (1), the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.\nAny distribution shall be includible in the gross income of the distributee in the manner as provided in section 72.\nNo amount shall be includible in gross income under paragraph (1) if the qualified education expenses of the designated beneficiary during the taxable year are not less than the aggregate distributions during the taxable year.\nIf such aggregate distributions exceed such expenses during the taxable year, the amount otherwise includible in gross income under paragraph (1) shall be reduced by the amount which bears the same ratio to the amount which would be includible in gross income under paragraph (1) (without regard to this subparagraph) as the qualified education expenses bear to such aggregate distributions.\nNo deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified education expenses to the extent taken into account in determining the amount of the exclusion under this paragraph.\nRules similar to the rules of paragraphs (2), (4), and (5) of section 529(c) shall apply for purposes of this section.\nThe tax imposed by this chapter for any taxable year on any taxpayer who receives a payment or distribution from a Coverdell education savings account which is includible in gross income shall be increased by 10 percent of the amount which is so includible.\nParagraph (1) shall not apply to any amount paid or distributed from a Coverdell education savings account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into another Coverdell education savings account for the benefit of the same beneficiary or a member of the family (within the meaning of section 529(e)(2)) of such beneficiary who has not attained age 30 as of such date. The preceding sentence shall not apply to any payment or distribution if it applied to any prior payment or distribution during the 12-month period ending on the date of the payment or distribution.\nAny change in the beneficiary of a Coverdell education savings account shall not be treated as a distribution for purposes of paragraph (1) if the new beneficiary is a member of the family (as so defined) of the old beneficiary and has not attained age 30 as of the date of such change.\nRules similar to the rules of paragraphs (7) and (8) of section 220(f) shall apply. In applying the preceding sentence, members of the family (as so defined) of the designated beneficiary shall be treated in the same manner as the spouse under such paragraph (8).\nIn any case in which a distribution is required under subsection (b)(1)(E), any balance to the credit of a designated beneficiary as of the close of the 30-day period referred to in such subsection for making such distribution shall be deemed distributed at the close of such period.\nThe last sentence of paragraph (5) shall not apply with respect to amounts treated as a rollover by subparagraph (A).\nFor purposes of applying section 72 in the case of a distribution which is includible in gross income under paragraph (1), the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.\nRules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to any Coverdell education savings account.\nThis section shall be applied without regard to any community property laws.\nFor purposes of this section, a custodial account shall be treated as a trust if the assets of such account are held by a bank (as defined in section 408(n)) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which he will administer the account will be consistent with the requirements of this section, and if the custodial account would, except for the fact that it is not a trust, constitute an account described in subsection (b)(1). For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof.\nThe trustee of a Coverdell education savings account shall make such reports regarding such account to the Secretary and to the beneficiary of the account with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required.\nThe date of the enactment of this section, referred to in subsec. (d)(4)(B)(iv), is the date of enactment of  Pub. L. 105–34 , which enacted this section and was approved  Aug. 5, 1997 .\n2018—Subsec. (b)(3)(A)(iii).  Pub. L. 115–141, §\u202f401(b)(23)(A) , struck out “(as defined in section 170(e)(6)(F)(i))” before “or Internet”.\nSubsec. (b)(3)(C).  Pub. L. 115–141, §\u202f401(b)(23)(B) , added subpar. (C).\nSubsec. (d)(2)(C).  Pub. L. 115–141, §\u202f101 ( l )(16), substituted “American Opportunity” for “Hope” in heading.\nSubsec. (d)(9)(B).  Pub. L. 115–141, §\u202f401(a)(131) , substituted “by” for “by the”.\n2008—Subsec. (d)(9).  Pub. L. 110–245  added par. (9).\n2005—Subsec. (b)(2)(A)(ii).  Pub. L. 109–135, §\u202f412(ff)(2) , substituted “paragraph (3)” for “paragraph (4)”.\nSubsec. (b)(3) to (5).  Pub. L. 109–135, §\u202f412(ff)(1) , redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out former par. (3) which read as follows: “The term ‘eligible educational institution’ has the meaning given such term by section 529(e)(5).”\n2004—Subsec. (d)(2)(C)(i).  Pub. L. 108–311, §\u202f404(a) , struck out “higher” after “qualified” in introductory provisions.\nSubsec. (d)(4)(B)(iii).  Pub. L. 108–311, §\u202f406(b) , substituted “designated beneficiary” for “account holder”.\n2003—Subsec. (d)(4)(B)(iv), (v).  Pub. L. 108–121  added cl. (iv) and redesignated former cl. (iv) as (v).\n2002—Subsec. (d)(4)(B)(iv).  Pub. L. 107–147  substituted “by application of paragraph (2)(C)(i)(II)” for “because the taxpayer elected under paragraph (2)(C) to waive the application of paragraph (2)”.\n2001— Pub. L. 107–22, §\u202f1(a)(5) , amended section catchline generally, substituting “Coverdell education savings” for “Education individual retirement”.\nSubsec. (a).  Pub. L. 107–22, §\u202f1(a)(2) , substituted “A Coverdell education savings account” for “An education individual retirement account” and “the Coverdell education savings account” for “the education individual retirement account”.\nSubsec. (b)(1).  Pub. L. 107–22, §\u202f1(a)(1) , (3), in heading, substituted “Coverdell education savings account” for “Education individual retirement account” and, in introductory provisions, substituted “\u202f‘Coverdell education savings account’\u202f” for “\u202f‘education individual retirement account’\u202f” and “designated as a Coverdell education savings account” for “designated as an education individual retirement account”.\nPub. L. 107–16, §\u202f401(d) , inserted concluding provisions.\nPub. L. 107–16, §\u202f401(c)(3)(A) , struck out “higher” before “education expenses” in introductory provisions.\nSubsec. (b)(1)(A)(iii).  Pub. L. 107–16, §\u202f401(a)(1) , substituted “$2,000” for “$500”.\nSubsec. (b)(2).  Pub. L. 107–16, §\u202f401(c)(1) , amended heading and text of par. (2) generally, substituting present provisions for provisions which defined “qualified higher education expenses” as having the meaning given such term by section 529(e)(3), reduced as provided in section 25A(g)(2), and including amounts paid or incurred to purchase tuition credits or certificates, or to make contributions to an account, under a qualified State tuition program for the benefit of the beneficiary of the account.\nSubsec. (b)(2)(B).  Pub. L. 107–16, §\u202f402(a)(4)(A) , (C), in heading, substituted “Qualified tuition” for “Qualified State tuition” and in text, substituted “qualified tuition” for “qualified State tuition”.\nSubsec. (b)(4).  Pub. L. 107–16, §\u202f401(c)(2) , added par. (4).\nSubsec. (b)(5).  Pub. L. 107–16, §\u202f401(f)(1) , added par. (5).\nSubsec. (c)(1).  Pub. L. 107–16, §\u202f401(e) , substituted “In the case of a contributor who is an individual, the maximum amount the contributor” for “The maximum amount which a contributor” in introductory provisions.\nSubsec. (c)(1)(A)(ii).  Pub. L. 107–16, §\u202f401(b)(1) , substituted “$190,000” for “$150,000”.\nSubsec. (c)(1)(B).  Pub. L. 107–16, §\u202f401(b)(2) , substituted “$30,000” for “$10,000”.\nSubsec. (d)(2).  Pub. L. 107–16, §\u202f401(c)(3)(B) , struck out “higher” before “education” in heading.\nSubsec. (d)(2)(A), (B).  Pub. L. 107–16, §\u202f401(c)(3)(A) , struck out “higher” before “education”.\nSubsec. (d)(2)(C).  Pub. L. 107–16, §\u202f401(g)(1) , amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “A taxpayer may elect to waive the application of this paragraph for any taxable year.”\nSubsec. (d)(2)(D).  Pub. L. 107–16, §\u202f401(g)(2)(C) , in heading, substituted “deduction, credit, or exclusion” for “credit or deduction” and in text, substituted “,\u2000credit, or exclusion” for “or credit”.\nSubsec. (d)(4)(A).  Pub. L. 107–22, §\u202f1(a)(1) , substituted “a Coverdell education savings account” for “an education individual retirement account”.\nSubsec. (d)(4)(C).  Pub. L. 107–16, §\u202f401(f)(2)(B) , substituted “certain date” for “due date of return” in heading.\nSubsec. (d)(4)(C)(i).  Pub. L. 107–16, §\u202f401(f)(2)(A) , added cl. (i) and struck out former cl. (i) which read as follows: “such distribution is made on or before the day prescribed by law (including extensions of time) for filing the beneficiary’s return of tax for the taxable year or, if the beneficiary is not required to file such a return, the 15th day of the 4th month of the taxable year following the taxable year; and”.\nSubsec. (d)(5).  Pub. L. 107–22, §\u202f1(a)(1) , (4), substituted “distributed from a Coverdell education savings account” for “distributed from an education individual retirement account” and “another Coverdell education savings account” for “another education individual retirement account”.\nSubsec. (d)(6).  Pub. L. 107–22, §\u202f1(a)(1) , substituted “a Coverdell education savings account” for “an education individual retirement account”.\nSubsec. (e).  Pub. L. 107–22, §\u202f1(a)(4) , substituted “Coverdell education savings account” for “education individual retirement account”.\nSubsec. (h).  Pub. L. 107–22, §\u202f1(a)(1) , substituted “a Coverdell education savings account” for “an education individual retirement account”.\n2000—Subsec. (d)(4)(B)(iii).  Pub. L. 106–554  substituted a comma for a semicolon before “or” at end.\n1998—Subsec. (b)(1).  Pub. L. 105–206, §\u202f6004(d)(1) , inserted “an individual who is” before “the designated beneficiary” in introductory provisions.\nSubsec. (b)(1)(E).  Pub. L. 105–206, §\u202f6004(d)(2)(A) , amended subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: “Upon the death of the designated beneficiary, any balance to the credit of the beneficiary shall be distributed within 30 days after the date of death to the estate of such beneficiary.”\nSubsec. (d)(1).  Pub. L. 105–206, §\u202f6004(d)(3)(A) , substituted “section 72” for “section 72(b)”.\nSubsec. (d)(2)(D).  Pub. L. 105–206, §\u202f6004(d)(5) , added subpar. (D).\nSubsec. (d)(4)(B)(iv).  Pub. L. 105–206, §\u202f6004(d)(6) , added cl. (iv).\nSubsec. (d)(4)(C).  Pub. L. 105–206, §\u202f6004(d)(7) , substituted “Contributions” for “Excess contributions” in heading and amended text of introductory provisions and cl. (i) generally. Prior to amendment, text read as follows: “Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year on behalf of a designated beneficiary to the extent that such contribution exceeds $500 if—\n“(i) such distribution is received on or before the day prescribed by law (including extensions of time) for filing such contributor’s return for such taxable year, and”.\nSubsec. (d)(5).  Pub. L. 105–206, §\u202f6004(d)(8)(A) , added first sentence and struck out former first sentence which read as follows: “Paragraph (1) shall not apply to any amount paid or distributed from an education individual retirement account to the extent that the amount received is paid into another education individual retirement account for the benefit of the same beneficiary or a member of the family (within the meaning of section 529(e)(2)) of such beneficiary not later than the 60th day after the date of such payment or distribution.”\nSubsec. (d)(6).  Pub. L. 105–206, §\u202f6004(d)(8)(B) , inserted before period at end “and has not attained age 30 as of the date of such change”.\nSubsec. (d)(7).  Pub. L. 105–206, §\u202f6004(d)(2)(B) , inserted at end “In applying the preceding sentence, members of the family (as so defined) of the designated beneficiary shall be treated in the same manner as the spouse under such paragraph (8).”\nSubsec. (d)(8).  Pub. L. 105–206, §\u202f6004(d)(2)(C) , added par. (8).\nAmendment by section 101( l )(16) of  Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 110–245  applicable with respect to deaths from injuries occurring on or after  June 17, 2008 , with provision for application of amendment to deaths from injuries occurring on or after  Oct. 7, 2001 , and before  June 17, 2008 , see section 109(d)(1), (2) of  Pub. L. 110–245 , set out as a note under  section 408A of this title .\nAmendment by  section 404(a) of Pub. L. 108–311  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 404(f) of Pub. L. 108–311 , set out as a note under  section 45A of this title .\nAmendment by  section 406(b) of Pub. L. 108–311  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 406(h) of Pub. L. 108–311 , set out as a note under  section 55 of this title .\nPub. L. 108–121, title I, §\u202f107(b) ,  Nov. 11, 2003 ,  117 Stat. 1339 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  Pub. L. 107–22  effective  July 26, 2001 , see  section 1(c) of Pub. L. 107–22 , set out as a note under  section 26 of this title .\nAmendment by section 401(a)(1), (b)–(g)(1), (2)(C) of  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 401(h) of Pub. L. 107–16 , set out as a note under  section 25A of this title .\nAmendment by section 402(a)(4)(A), (C) of  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 402(h) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1997 , see  section 213(f) of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 26 of this title .\nFor provisions that nothing in amendment by  section 401(b)(23) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the accumulated taxable income (as defined in section 535) of each corporation described in section 532, an accumulated earnings tax equal to 20 percent of the accumulated taxable income.\n2013— Pub. L. 112–240  substituted “20 percent” for “15 percent”.\n2003— Pub. L. 108–27  substituted “equal to 15 percent of the accumulated taxable income.” for “equal to the product of the highest rate of tax under section 1(c) and the accumulated taxable income.”\n2001— Pub. L. 107–16  substituted “equal to the product of the highest rate of tax under section 1(c) and the accumulated taxable income.” for “equal to 39.6 percent of the accumulated taxable income.”\n1993— Pub. L. 103–66, §\u202f13202(b) , substituted “39.6 percent” for “36 percent”.\nPub. L. 103–66, §\u202f13201(b)(1) , substituted “36 percent” for “28 percent”.\n1988— Pub. L. 100–647  amended section generally. Prior to amendment, section read as follows: “In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the accumulated taxable income (as defined in section 535) of every corporation described in section 532, an accumulated earnings tax equal to the sum of—\n“(1) 27½ percent of the accumulated taxable income not in excess of $100,000, plus\n“(2) 38½ percent of the accumulated taxable income in excess of $100,000.”\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 102(d)(1) of Pub. L. 112–240 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2000 , see  section 101(d)(1) of Pub. L. 107–16 , set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see sections 13201(c) and 13202(c) of  Pub. L. 103–66 , set out as notes under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1001(a)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3349 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after  December 31, 1987 . Such amendment shall not be treated as a change in a rate of tax for purposes of section 15 of the 1986 Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'The accumulated earnings tax imposed by section 531 shall apply to every corporation (other than those described in subsection (b)) formed or availed of for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.\nThe application of this part to a corporation shall be determined without regard to the number of shareholders of such corporation.\n2005—Subsec. (b)(2) to (4).  Pub. L. 109–135  redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follow: “a foreign personal holding company (as defined in section 552),”.\n1997—Subsec. (b)(4).  Pub. L. 105–34  substituted “section 1297” for “section 1296”.\n1986—Subsec. (b)(4).  Pub. L. 99–514  added par. (4).\n1984—Subsec. (c).  Pub. L. 98–369  added subsec. (c).\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 105–34, title XI, §\u202f1124 ,  Aug. 5, 1997 ,  111 Stat. 978 , provided that:  \n “The amendments made by this subtitle [subtitle C (§§\u202f1121–1124) of title XI of  Pub. L. 105–34 , enacting  section 1296 of this title , amending this section and sections 542, 551, 852, 1291, 1293, 1296 to 1298, and 4982 of this title, redesignating subpart C of part VI of subchapter P of this chapter as subpart D of part VI of subchapter P of this chapter, and renumbering sections 1296 and 1297 of this title as sections 1297 and 1298, respectively, of this title] shall apply to— \n “(1)  taxable years of United States persons beginning after  December 31, 1997 , and \n \n “(2)  taxable years of foreign corporations ending with or within such taxable years of United States persons.”\nAmendment by  Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as an Effective Date note under  section 1291 of this title .\nPub. L. 98–369, div. A, title I, §\u202f58(c) ,  July 18, 1984 ,  98 Stat. 576 , provided that:  “The amendments made by this section [amending this section and  section 535 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ July 18, 1984 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'For purposes of section 532, the fact that the earnings and profits of a corporation are permitted to accumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid the income tax with respect to shareholders, unless the corporation by the preponderance of the evidence shall prove to the contrary.\nThe fact that any corporation is a mere holding or investment company shall be prima facie evidence of the purpose to avoid the income tax with respect to shareholders.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'Before mailing the notice of deficiency referred to in subsection (a), the Secretary may send by certified mail or registered mail a notification informing the taxpayer that the proposed notice of deficiency includes an amount with respect to the accumulated earnings tax imposed by section 531.\nWithin such time (but not less than 30 days) after the mailing of the notification described in subsection (b) as the Secretary may prescribe by regulations, the taxpayer may submit a statement of the grounds (together with facts sufficient to show the basis thereof) on which the taxpayer relies to establish that all or any part of the earnings and profits have not been permitted to accumulate beyond the reasonable needs of the business.\nIf pursuant to section 6861(a) a jeopardy assessment is made before the mailing of the notice of deficiency referred to in subsection (a), for purposes of this section such notice of deficiency shall, to the extent that it informs the taxpayer that such deficiency includes the accumulated earnings tax imposed by section 531, constitute the notification described in subsection (b), and in that event the statement described in subsection (c) may be included in the taxpayer’s petition to the Tax Court.\n1976—Subsec. (a)(1), (2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b).  Pub. L. 94–455 , §§\u202f1901(a)(73)(A), 1906(b)(13)(A), struck out “In the case of a notice of deficiency to which subsection (e)(2) applies and which is mailed on or before the 30th day after the date of enactment of this sentence, the notification referred to in the preceding sentence may be mailed at any time on or before such 30th day” after “section 531”, and “or his delegate” after “Secretary”.\nSubsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e).  Pub. L. 94–455, §\u202f1901(a)(73)(B) , struck out subsec. (e) relating to application of provisions of section.\n1958—Subsec. (b).  Pub. L. 85–866  inserted “certified mail or” before “registered mail”.\n1955—Subsec. (b). Act  Aug. 11, 1955 , §\u202f5, inserted second sentence relating to notice of deficiency to which subsec. (e)(2) applies.\nSubsec. (e). Act  Aug. 11, 1955 , §\u202f4, permitted, in certain instances, application of this section to cases involving taxable years to which prior revenue laws apply.\nAmendment by  section 1901(a)(73) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 85–866  applicable only if mailing occurred after  Sept. 2, 1958 , see  section 89(d) of Pub. L. 85–866 , set out as a note under  section 7502 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'For purposes of this subtitle, the term “accumulated taxable income” means the taxable income, adjusted in the manner provided in subsection (b), minus the sum of the dividends paid deduction (as defined in section 561) and the accumulated earnings credit (as defined in subsection (c)).\nThere shall be allowed as a deduction Federal income and excess profits taxes and income, war profits, and excess profits taxes of foreign countries and possessions of the United States (to the extent not allowable as a deduction under section 275(a)(4)), accrued during the taxable year or deemed to be paid by a domestic corporation under section 960 for the taxable year, but not including the accumulated earnings tax imposed by section 531 or the personal holding company tax imposed by section 541.\nThe deduction for charitable contributions provided under section 170 shall be allowed without regard to section 170(b)(2).\nThe special deductions for corporations provided in part VIII (except section 248) of subchapter B (section 241 and following, relating to the deduction for dividends received by corporations, etc.) shall not be allowed.\nThe net operating loss deduction provided in section 172 shall not be allowed.\nExcept as provided in subparagraph (B), there shall be allowed as a deduction an amount equal to the net capital loss for the taxable year (determined without regard to paragraph (7)(A)).\nThe net capital loss for any taxable year shall be treated as a short-term capital loss in the next taxable year.\nNo allowance shall be made for the capital loss carryback or carryforward provided in section 1212.\nParagraphs (5) and (7)(A) shall not apply.\nThere shall be allowed as a deduction the net short-term capital gain for the taxable year to the extent such gain does not exceed the amount of any capital loss carryover to such taxable year under section 1212 (determined without regard to paragraph (7)(B)).\nFor purposes of subchapter C, the accumulated earnings and profits at any time shall not be less than they would be if this subsection had applied to the computation of earnings and profits for all taxable years beginning after  July 18, 1984 .\nIn the case of a foreign corporation, paragraph (6) shall be applied by taking into account only gains and losses which are effectively connected with the conduct of a trade or business within the United States and are not exempt from tax under treaty.\nThere shall be allowed as a deduction the amount of the corporation’s income for the taxable year which is included in the gross income of a United States shareholder under section 951(a). In the case of any corporation the accumulated taxable income of which would (but for this sentence) be determined without allowance of any deductions, the deduction under this paragraph shall be allowed and shall be appropriately adjusted to take into account any deductions which reduced such inclusion.\nFor purposes of subsection (a), in the case of a corporation other than a mere holding or investment company the accumulated earnings credit is (A) an amount equal to such part of the earnings and profits for the taxable year as are retained for the reasonable needs of the business, minus (B) the deduction allowed by subsection (b)(6). For purposes of this paragraph, the amount of the earnings and profits for the taxable year which are retained is the amount by which the earnings and profits for the taxable year exceed the dividends paid deduction (as defined in section 561) for such year.\nThe credit allowable under paragraph (1) shall in no case be less than the amount by which $250,000 exceeds the accumulated earnings and profits of the corporation at the close of the preceding taxable year.\nIn the case of a corporation the principal function of which is the performance of services in the field of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting, subparagraph (A) shall be applied by substituting “$150,000” for “$250,000”.\nIn the case of a corporation which is a mere holding or investment company, the accumulated earnings credit is the amount (if any) by which $250,000 exceeds the accumulated earnings and profits of the corporation at the close of the preceding taxable year.\nFor purposes of paragraphs (2) and (3), the accumulated earnings and profits at the close of the preceding taxable year shall be reduced by the dividends which under section 563(a) (relating to dividends paid after the close of the taxable year) are considered as paid during such taxable year.\nFor limitation on credit provided in paragraph (2) or (3) in the case of certain controlled corporations, see section 1561.\nThe term “United States-owned foreign corporation” has the meaning given to such term by section 904(h)(6).\n2017—Subsec. (b)(1).  Pub. L. 115–97, §\u202f14301(c)(4) , substituted “section 960” for “section 902(a) or 960(a)(1)”.\nSubsec. (c)(5).  Pub. L. 115–97, §\u202f13001(b)(5)(B) , amended par. (5) generally. Prior to amendment, text read as follows: “For denial of credit provided in paragraph (2) or (3) where multiple corporations are formed to avoid tax, see section 1551, and for limitation on such credit in the case of certain controlled corporations, see section 1561.”\n2014—Subsec. (b)(1).  Pub. L. 113–295  substituted “section 531 or the personal holding company tax imposed by section 541.” for “section 531, the personal holding company tax imposed by section 541, or the taxes imposed by corresponding sections of a prior income tax law.”\n2005—Subsec. (b)(10).  Pub. L. 109–135  added par. (10).\n2004—Subsec. (d)(2).  Pub. L. 108–357  substituted “section 904(h)(6)” for “section 904(g)(6)”.\n1990—Subsec. (c)(5).  Pub. L. 101–508  substituted “section 1561” for “sections 1561 and 1564”.\n1986—Subsec. (b)(5)(C)(i), (8)(C).  Pub. L. 99–514, §\u202f1899A(17) , substituted “ July 18, 1984 ” for “the date of the enactment of the Tax Reform Act of 1984”.\nSubsec. (b)(9).  Pub. L. 99–514, §\u202f1225(a) , added par. (9).\n1984—Subsec. (b)(5).  Pub. L. 98–369, §\u202f58(b) , designated existing provisions as subpar. (A), substituted “Except as provided in subparagraph (B), there shall be allowed as a deduction an amount equal to the net capital loss for the taxable year (determined without regard to paragraph (7)(A)” for “There shall be allowed as deductions losses from sales or exchanges of capital assets during the taxable year which are disallowed as deductions under section 1211(a)” in subpar. (A) as so redesignated, and added subpars. (B) and (C).\nSubsec. (b)(6).  Pub. L. 98–369, §\u202f58(b) , divided existing par. (6) into subpars. (A) and (B) and substituted references to the application of paragraph (7) for references to capital loss carryback and carryover provided in section 1212.\nSubsec. (b)(7).  Pub. L. 98–369, §\u202f58(b) , substituted “Capital loss carryovers” for “Capital loss” in heading, redesignated existing provisions as subpar. (B), and added subpar. (A).\nSubsec. (b)(8).  Pub. L. 98–369, §\u202f58(b) , added par. (8).\nSubsec. (d).  Pub. L. 98–369, §\u202f125(a) , added subsec. (d).\n1981—Subsec. (c)(2).  Pub. L. 97–34, §\u202f232(a) , designated existing provisions as subpar. (A), substituted “$250,000” for “$150,000”, and added subpar. (B).\nSubsec. (c)(3).  Pub. L. 97–34, §\u202f232(b)(1) , substituted “$250,000” for “$150,000”.\n1976—Subsec. (b)(1).  Pub. L. 94–455 , §§\u202f1033(b)(3), 1901(a)(74), struck out “(other than the excess profits tax imposed by subchapter E of chapter 2 of the Internal Revenue Code of 1939 for taxable years beginning after  December 31, 1940 )” after “income and excess profits taxes”, and substituted “section 902(a) or 960(a)(1)” for “section 902(a)(1) or 960(a)(1)(C)” after “domestic corporation under”.\nSubsec. (b)(6).  Pub. L. 94–455, §\u202f1901(b)(33)(D) , substituted “Net” for “Long-term” after “(6)”.\nSubsec. (b)(8).  Pub. L. 94–455, §\u202f1901(b)(20)(A) , struck out par. (8) relating to allowance of deduction by bank affiliates.\nSubsec. (b)(9), (10).  Pub. L. 94–455, §\u202f1901(b)(32)(C) , struck out par. (9) relating to allowance of deduction for distributions of divested stock, and struck out par. (10) relating to special adjustment on disposition of antitrust stock received as a dividend.\n1975—Subsec. (c)(2), (3).  Pub. L. 94–12  substituted “$150,000” for “$100,000”.\n1969—Subsec. (b)(6).  Pub. L. 91–172, §\u202f512(f)(5) , substituted “capital loss carryback or carryover” for “capital loss carryover” and “capital loss carryback and carryover” for “capital loss carryover” in subpar. (B).\nSubsec. (b)(7).  Pub. L. 91–172, §\u202f512(f)(6) , substituted “Capital loss” for “Capital loss carryover” in heading and “capital loss carryback or carryover” for “capital loss carryover” in text.\nSubsec. (c)(5).  Pub. L. 91–172, §\u202f401(b)(2)(C) , substituted “section 1551, and for limitation on such credit in the case of certain controlled corporations, see sections 1561 and 1564” for “section 1551”.\n1964—Subsec. (b)(1).  Pub. L. 88–272  substituted “section 275(a)(4)” for “section 164(b)(6)”.\n1962—Subsec. (b)(1).  Pub. L. 87–834  substituted “accrued during the taxable year or deemed to be paid by a domestic corporation under section 902(a)(1) or 960(a)(1)(C) for the taxable year” for “accrued during the taxable year”.\nSubsec. (b)(9), (10).  Pub. L. 87–403  added pars. (9) and (10).\n1958—Subsec. (b)(2).  Pub. L. 85–866, §\u202f31(a) , struck out “the limitation in” after “without regard to”.\nSubsec. (b)(6)(B).  Pub. L. 85–866, §\u202f31(a) , substituted “in taxable income the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year (determined without regard to the capital loss carryover provided in section 1212)” for “such excess in taxable income”.\nSubsec. (c)(2), (3).  Pub. L. 85–866, §\u202f205(a) , substituted “$100,000” for “$60,000”.\nAmendment by  section 13001(b)(5)(B) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 14301(c)(4) of Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title IV, §\u202f402(c) ,  Oct. 22, 2004 ,  118 Stat. 1492 , provided that:  “The amendments made by this section [amending this section and sections 904 and 936 of this title] shall apply to losses for taxable years beginning after  December 31, 2006 .”\nPub. L. 99–514, title XII, §\u202f1225(c) ,  Oct. 22, 1986 ,  100 Stat. 2559 , as amended by  Pub. L. 100–647, title I, §\u202f1012(k) ,  Nov. 10, 1988 ,  102 Stat. 3513 , provided that:  “The amendments made by this section [amending this section and  section 545 of this title ] shall apply to gains and losses realized on or after  January 1, 1986 .”\nAmendment by  section 58(b) of Pub. L. 98–369  applicable to taxable years beginning after  July 18, 1984 , see  section 58(c) of Pub. L. 98–369 , set out as a note under  section 532 of this title .\nPub. L. 98–369, div. A, title I, §\u202f125(b) ,  July 18, 1984 ,  98 Stat. 647 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to distributions and interest payments received by a United States-owned foreign corporation (within the meaning of section 535(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) on or after  May 23, 1983 , in taxable years ending on or after such date. \n \n “(2)   Corporations in existence on  may 23, 1983 .— In the case of a United States-owned foreign corporation (as so defined) in existence on  May 23, 1983 , the amendment made by subsection (a) shall apply to taxable years beginning after  December 31, 1984 .”\nPub. L. 97–34, title II, §\u202f232(c) ,  Aug. 13, 1981 ,  95 Stat. 250 , provided that:  “The amendments made by this section [amending this section and sections 243, 1551, and 1561 of this title] shall apply to taxable years beginning after  December 31, 1981 .”\nFor effective date of amendment by  section 1033(b)(3) of Pub. L. 94–455 , see  section 1033(c) of Pub. L. 94–455 , set out as a note under  section 960 of this title .\nAmendment by section 1901(a)(74), (b)(20)(A), (32)(C), (33)(D) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–12, title III, §\u202f305(c) ,  Mar. 29, 1975 ,  89 Stat. 45 , provided that:  “The amendments made by section 304 [amending this section and sections 243, 1551, and 1561 of this title] apply to taxable years beginning after  December 31, 1974 .”\nAmendment by  section 401(b)(2)(C) of Pub. L. 91–172  applicable with respect to taxable years beginning after  Dec. 31, 1969 , see  section 401(h)(2) of Pub. L. 91–172 , set out as a note under  section 1561 of this title .\nAmendment by section 512(f)(5), (6) of  Pub. L. 91–172  applicable with respect to net capital losses sustained in taxable years beginning after  Dec. 31, 1969 , see  section 512(g) of Pub. L. 91–172 , set out as a note under  section 1212 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 207(c) of Pub. L. 88–272 , set out as a note under  section 164 of this title .\nAmendment by  Pub. L. 87–834  applicable in respect of any distribution received by a domestic corporation after  Dec. 31, 1964 , and in respect of any distribution received by a domestic corporation before  Jan. 1, 1965 , in a taxable year of such corporation beginning after  Dec. 31, 1962 , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after  Dec. 31, 1962 , see  section 9(e) of Pub. L. 87–834 , set out as an Effective Date note under  section 78 of this title .\nAmendment by  Pub. L. 87–403  applicable only with respect to distributions made after  Feb. 2, 1962 , see  section 3(g) of Pub. L. 87–403 , set out as a note under  section 312 of this title .\nAmendment by  section 31 of Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title II, §\u202f205(b) ,  Sept. 2, 1958 ,  72 Stat. 1680 , provided that:  “The amendments made by subsection (a) [amending this section and  section 1551 of this title ] shall apply with respect to taxable years beginning after  December 31, 1957 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'Section 443(b) (relating to computation of tax on change of annual accounting period) shall not apply in the computation of the accumulated earnings tax imposed by section 531.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS'},
  'content': 'The term “section 303 redemption needs” means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year thereafter, the amount needed (or reasonably anticipated to be needed) to make a redemption of stock included in the gross estate of the decedent (but not in excess of the maximum amount of stock to which section 303(a) may apply).\nIn applying paragraphs (1) and (2), the discharge of any obligation incurred to make a redemption described in such paragraphs shall be treated as the making of such redemption.\nThe accumulation of reasonable amounts for the payment of reasonably anticipated product liability losses (as defined in section 172(f) (as in effect before the date of enactment of the Tax Cuts and Jobs Act)), as determined under regulations prescribed by the Secretary, shall be treated as accumulated for the reasonably anticipated needs of the business.\nThe application of this part to any taxable year before the first taxable year specified in paragraph (1) shall be made without regard to the fact that distributions in redemption coming within the terms of such paragraphs were subsequently made.\nSection 172(f), referred to in subsec. (b)(4), was repealed by  Pub. L. 115–97, title I, §\u202f13302(c)(2)(A) ,  Dec. 22, 2017 ,  131 Stat. 2122 .\nThe date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (b)(4), probably means the date of enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\n2017—Subsec. (b)(4).  Pub. L. 115–97  inserted “(as in effect before the date of enactment of the Tax Cuts and Jobs Act)” after “as defined in section 172(f)”.\n1996—Subsec. (b)(4).  Pub. L. 104–188  substituted “section 172(f)” for “section 172(i)”.\n1978—Subsec. (b)(4), (5).  Pub. L. 95–600  added par. (4) and redesignated former par. (4) as (5).\n1976—Subsec. (b)(2).  Pub. L. 94–455, §\u202f1901(a)(75)(A) , struck out “with respect to taxable years of the corporation ending after  May 26, 1969 ” after “\u202f‘redemption needs’ means”.\nSubsec. (b)(4).  Pub. L. 94–455, §\u202f1901(a)(75)(B) , struck out “or (2)” after “paragraph (1)”.\n1969— Pub. L. 91–172  designated existing provisions as subsec. (a)(1) and added subsecs. (a)(2), (3) and (b).\nAmendment by  Pub. L. 115–97  applicable to net operating losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13302(e) of Pub. L. 115–97 , set out as a note under  section 172 of this title .\nAmendment by  Pub. L. 95–600  applicable with respect to taxable years beginning after  Sept. 30, 1979 , see  section 371(d) of Pub. L. 95–600 , set out as a note under  section 172 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–172, title IX, §\u202f906(b) ,  Dec. 30, 1969 ,  83 Stat. 715 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to the tax imposed under section 531 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to taxable years ending after  May 26, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the undistributed personal holding company income (as defined in section 545) of every personal holding company (as defined in section 542) a personal holding company tax equal to 20 percent of the undistributed personal holding company income.\n2013— Pub. L. 112–240  substituted “20 percent” for “15 percent”.\n2003— Pub. L. 108–27  substituted “equal to 15 percent of the undistributed personal holding company income.” for “equal to the product of the highest rate of tax under section 1(c) and the undistributed personal holding company income.”\n2001— Pub. L. 107–16  substituted “equal to the product of the highest rate of tax under section 1(c) and the undistributed personal holding company income.” for “equal to 39.6 percent of the undistributed personal holding company income.”\n1993— Pub. L. 103–66, §\u202f13202(b) , substituted “39.6 percent” for “36 percent”.\nPub. L. 103–66, §\u202f13201(b)(2) , substituted “36 percent” for “28 percent”.\n1990— Pub. L. 101–508  struck out “(38.5 percent in the case of taxable years beginning in 1987)” after “28 percent”.\n1986— Pub. L. 99–514  substituted “28 percent (38.5 percent in the case of taxable years beginning in 1987)” for “50 percent”.\n1981— Pub. L. 97–34  substituted “50 percent” for “70 percent”.\n1964— Pub. L. 88–272  reduced the tax from 75 percent of undistributed income not in excess of $2,000, and 85 percent when in excess of $2,000, to 70 percent.\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012 , see  section 102(d)(1) of Pub. L. 112–240 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2000 , see  section 101(d) of Pub. L. 107–16 , set out as an Effective and Termination Dates of 2001 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see sections 13201(c) and 13202(c) of  Pub. L. 103–66 , set out as notes under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 101(f)(1) of Pub. L. 97–34 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272  set out as a note under  section 316 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'At least 60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a)), and\nAt any time during the last half of the taxable year more than 50 percent in value of its outstanding stock is owned, directly or indirectly, by or for not more than 5 individuals. For purposes of this paragraph, an organization described in section 401(a), 501(c)(17), or 509(a) or a portion of a trust permanently set aside or to be used exclusively for the purposes described in section 642(c) or a corresponding provision of a prior income tax law shall be considered an individual.\nIn the case of an affiliated group of corporations filing or required to file a consolidated return under section 1501 for any taxable year, the adjusted ordinary gross income requirement of subsection (a)(1) of this section shall, except as provided in paragraphs (2) and (3), be applied for such year with respect to the consolidated adjusted ordinary gross income and the consolidated personal holding company income of the affiliated group. No member of such an affiliated group shall be considered to meet such adjusted ordinary gross income requirement unless the affiliated group meets such requirement.\nParagraph (1) shall not apply to an affiliated group of corporations if any member of the affiliated group (including the common parent corporation) is a corporation excluded from the definition of personal holding company under subsection (c).\nIn the case of an affiliated group of corporations filing or required to file a consolidated return under section 1501 for any taxable year, there shall be excluded from consolidated personal holding company income and consolidated adjusted ordinary gross income for purposes of this part dividends received by a member of the affiliated group from a life insurance company taxable under section 801 that is not a member of the affiliated group solely by reason of the application of paragraph (2) of subsection (b) of section 1504.\nFor purposes of subsection (c)(6)(B), in the case of a lending or finance company which meets the requirements of subsection (c)(6)(A), there shall not be treated as personal holding company income the lawful income received from a corporation which meets the requirements of subsection (c)(6) and which is a member of the same affiliated group (as defined in section 1504) of which such company is a member.\nThe Small Business Investment Act of 1958, referred to in subsec. (c)(7), is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to this Code, see Short Title note set out under  section 661 of Title 15  and Tables.\n2018—Subsec. (c)(5).  Pub. L. 115–141, §\u202f401(a)(132) , substituted semicolon for comma at end.\nSubsec. (c)(7).  Pub. L. 115–141, §\u202f401(a)(133) , substituted “a small business investment” for “A small business investment”.\n2004—Subsec. (c)(5).  Pub. L. 108–357, §\u202f413(b)(1)(A) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “a foreign personal holding company as defined in section 552;”.\nSubsec. (c)(7) to (10).  Pub. L. 108–357, §\u202f413(b)(1)(B) –(D), redesignated pars. (8) and (9) as (7) and (8), respectively, inserted “and” at end of par. (7), substituted period for “;\u2000and” at end of par. (8), and struck out former pars. (7) and (10) relating to foreign corporations whose outstanding stock during the last half of the taxable year is owned, directly or indirectly, by nonresident aliens and passive foreign investment companies, respectively.\n1997—Subsec. (c)(10).  Pub. L. 105–34  substituted “section 1297” for “section 1296”.\n1986—Subsec. (c)(10).  Pub. L. 99–514  added par. (10).\n1984—Subsec. (b)(5).  Pub. L. 98–369  substituted “section 801” for “section 802”.\n1982—Subsec. (c)(6)(C)(ii).  Pub. L. 97–248, §\u202f293(a) , struck out “but not $1,000,000” after “exceeds $500,000”.\nSubsec. (d)(1)(B)(i).  Pub. L. 97–248, §\u202f293(b) , substituted “144 months” for “60 months” after “remaining maturity exceeds”, designated existing provisions from “the loans” through “transferor’s trade or business, or” as subcl. (I), and added subcl. (II).\nSubsec. (d)(1)(C).  Pub. L. 97–248, §\u202f293(c) , added subpar. (C).\n1980—Subsec. (c)(9).  Pub. L. 96–589 , added par. (9).\n1976—Subsec. (a)(2).  Pub. L. 94–455, §\u202f1901(a)(76)(A) , struck out last sentence providing that the preceding sentence shall not apply in the case of an organization or trust organized or created before  July 1, 1950 , if at all times on or after  July 1, 1950 , and before the close of the taxable year such organization or trust has owned all of the common stock and at least 80 percent of the total number of shares of all other classes of stock of the corporation.\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1901(a)(76)(B) , struck out “other than an affiliated group of railroad corporations the common parent of which would be eligible to file a consolidated return under section 141 of the Internal Revenue Act of 1942” after “group of corporations”.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1901(a)(76)(C) , struck out “without regard to subparagraphs (D) and (E) thereof” after “meaning of section 7701(a)(19)”.\nSubsec. (c)(8).  Pub. L. 94–455, §\u202f1901(a)(76)(D) , inserted “( 15 U.S.C. 661  and following)” after “Small Business Investment Act of 1958”.\n1974—Subsec. (b)(5).  Pub. L. 93–480  added par. (5).\n1969—Subsec. (a)(2).  Pub. L. 91–172  substituted “section 401(a), 501(c)(17), or 509(a)” for “section 503(b)” in the list of sections that contain the description of organizations that may be considered as individuals for the purpose of establishing stock ownership, and struck out provisions which would have kept an organization or trust created before  July 1, 1950 , from being so designated if it had been denied exemption under section 504 or an unlimited charitable deduction under  section 681(c) of this title .\n1966—Subsec. (c)(7).  Pub. L. 89–809  substituted requirement that the foreign corporation be other than a corporation which has income to which section 543(a)(7) applies for the taxable year for requirement that the foreign corporation’s gross income from sources within the United States for the period specified in section 861(a)(2)(B) be less than 50 percent of its total gross income from all sources, and expanded the devices included in methods of indirect ownership to encompass foreign estates, foreign trusts, and foreign partnerships.\n1964—Subsec. (a)(1).  Pub. L. 88–272, §\u202f225(b) , substituted “60 percent of its adjusted ordinary gross income (as defined in section 543(b)(2)) for the taxable year is personal holding company income (as defined in section 543(a))” for “80 percent of its gross income for the taxable year is personal holding company income as defined in section 543”.\nSubsec. (b).  Pub. L. 88–272, §\u202f225(k)(1) , substituted “adjusted ordinary gross income” for “gross income”, wherever appearing.\nSubsec. (c)(2), (6) to (11).  Pub. L. 88–272, §\u202f225(c)(1) , (2), inserted among the exceptions, domestic building and loan associations within section 7701(a)(19) without regard to subpars. (D) and (E) thereof, added par. (6), redesignated former pars. (10) and (11) as (7) and (8), respectively, and omitted former pars. (6) to (9) which related to licensed personal finance companies, lending companies, loan or investment corporations, and finance companies, respectively.\nSubsec. (d).  Pub. L. 88–272, §\u202f225(c)(3) , added subsec. (d).\n1962—Subsec. (c)(7).  Pub. L. 87–768  substituted “authorized to engage in and actively and regularly engaged in the small loan business (consumer finance business)” for “authorized to engage in the small loan business”, inserted provisions excepting from the definition of “personal holding company” a lending company that received 80 percent or more of its gross income from lawful income from domestic subsidiary corporations (of which stock possessing at least 80 percent of the voting power of all classes of stock and of which at least 80 percent of each class of the nonvoting stock is owned directly by such lending company), which are themselves excepted under pars. (6), (7), (8), or (9) of this subsection, increased the maximum amount of the loan where no limit is prescribed from $500 to $1,500, and eliminated provisions which required loans to mature in not more than 36 months, and which limited interest, discount and other charges to not more than an amount equal to simple interest at 3 percent per month payable in advance and computed only on unpaid balances.\n1959—Subsec. (c)(11).  Pub. L. 86–376  added par. (11).\n1955—Subsec. (a)(2). Act  Aug. 12, 1955 , §\u202f3, inserted sentence at end excepting from consideration as “individuals” certain charitable foundations created before  July 1, 1950 .\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as a note under  section 532 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as an Effective Date note under  section 1291 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nPub. L. 97–248, title II, §\u202f293(d) ,  Sept. 3, 1982 ,  96 Stat. 575 , provided that: \n “(1)   Subsection  (a).— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1981 . \n \n “(2)   Subsections  (b)  and  (c).— The amendments made by subsections (b) and (c) [amending this section] shall apply to taxable years beginning after  December 31, 1980 .”\nAmendment by  Pub. L. 96–589  applicable to bankruptcy cases or similar judicial proceedings commenced after  Dec. 31, 1980 , with exception permitting the debtor to make the amendment applicable to such cases or judicial proceedings commenced after  Sept. 30, 1979 , see section 7(d)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 93–480, §\u202f3(b) ,  Oct. 26, 1974 ,  88 Stat. 1454 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1973 .”\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 101(k)(2)(B) of Pub. L. 91–172 , set out as a note under  section 4940 of this title .\nAmendment by  Pub. L. 89–809  with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by section 225(b), (c)(2), (3), (k)(1) of  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , and amendment by  section 225(c)(1) of Pub. L. 88–272  applicable to taxable years beginning after  Oct. 16, 1962 , see section 225( l ) of  Pub. L. 88–272 , set out as a note under  section 316 of this title .\nPub. L. 87–768, §\u202f2 ,  Oct. 9, 1962 ,  76 Stat. 766 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply with respect to taxable years beginning after  December 31, 1961 .”\nPub. L. 86–376, §\u202f3(b) ,  Sept. 23, 1959 ,  73 Stat. 700 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1958 .”\nAct Aug. 12, 1955, ch. 871, §\u202f4 ,  69 Stat. 718 , provided that:  “The amendment made by section 3 of this Act [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1954 .”\nPub. L. 95–600, title VII, §\u202f701 ( o ),  Nov. 6, 1978 ,  92 Stat. 2907 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The last sentence of section 542(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to stock ownership requirement) shall not apply in the case of an organization or trust organized or created before  July 1, 1950 , if at all times on or after  July 1, 1950 , and before the close of the taxable year such organization or trust has owned all of the common stock and at least 80 percent of the total number of shares of all other classes of stock of the corporation. \n \n “(2)   Effective date .— The provisions of paragraph (1) shall apply with respect to taxable years beginning after  December 31, 1976 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'Amounts includible in computing the taxable income of the corporation under part I of subchapter J (sec. 641 and following, relating to estates, trusts, and beneficiaries).\nFrom the gross income consisting of compensation described in subparagraph (D) of paragraph (3) subtract the amount allowable as deductions for the items described in clauses (i), (ii), (iii), and (iv) of subparagraph (A) to the extent allocable, under regulations prescribed by the Secretary, to such gross income. The amount subtracted under this subparagraph shall not exceed such gross income.\nThe term “adjusted income from mineral, oil, and gas royalties” means the gross income from mineral, oil, and gas royalties (including production payments and overriding royalties), reduced by the amount subtracted under paragraph (2)(B) of this subsection in respect of such royalties.\nIn the case of an insurance company other than a life insurance company, the term “gross income” as used in this part means the gross income, as defined in section 832(b)(1), increased by the amount of losses incurred, as defined in section 832(b)(5), and the amount of expenses incurred, as defined in section 832(b)(6), and decreased by the amount deductible under section 832(c)(7) (relating to tax-free interest).\nThe requirements of this paragraph are met if the royalties described in paragraph (1) constitute at least 50 percent of the ordinary gross income of the corporation for the taxable year.\nFor purposes of subparagraph (A), a deduction shall not be treated as allowable under section 162 if it is specifically allowable under another section.\nFor purposes of this paragraph, the term “affiliated group” has the meaning given such term by section 1504(a).\nSection 3(a)(4) and (5) of the Securities and Exchange Act of 1934, referred to in subsec. (a)(1)(E), is classified to section 78c(a)(4) and (5) of Title 15, Commerce and Trade.\n2018—Subsec. (a)(2)(B)(ii).  Pub. L. 115–141, §\u202f401(a)(134) , substituted “section 563(c)” for “section 563(d)”.\nSubsec. (d)(5)(A)(ii).  Pub. L. 115–141, §\u202f401(a)(135) , substituted “section 563(c)” for “section 563(d)”.\n2014—Subsec. (a)(1)(C) to (E).  Pub. L. 113–295  added subpar. (C) and redesignated former subpars. (C) and (D) as (D) and (E), respectively.\n2006—Subsec. (a)(1)(B).  Pub. L. 109–304  substituted “chapter 533 or 535 of title 46, United States Code” for “section 511 or 607 of the Merchant Marine Act, 1936 (46 U.S.C. App. 1161 or 1177)”.\n2004—Subsec. (b)(1).  Pub. L. 108–357  inserted “and” at end of subpar. (A), substituted a period for “,\u2000and” at end of subpar. (B), and struck out subpar. (C) which read as follows: “in the case of a foreign corporation all of the outstanding stock of which during the last half of the taxable year is owned by nonresident alien individuals (whether directly or indirectly through foreign estates, foreign trusts, foreign partnerships, or other foreign corporations), all items of income which would, but for this subparagraph, constitute personal holding company income under any paragraph of subsection (a) other than paragraph (7) thereof:”.\n1999—Subsec. (a)(1)(D)(i).  Pub. L. 106–170  substituted “1221(a)(1)” for “1221(1)”.\n1998—Subsec. (d)(5)(A)(ii).  Pub. L. 105–206  substituted “section 563(d)” for “section 563(c)”.\n1996—Subsec. (a)(2)(B)(ii).  Pub. L. 104–188  substituted “563(d)” for “563(c)”.\n1988—Subsec. (a)(1)(D).  Pub. L. 100–647, §\u202f6279(a) , added subpar. (D).\nSubsec. (c).  Pub. L. 100–647, §\u202f1010(f)(5) , substituted “other than life insurance companies” for “other than life or mutual” in heading and “other than a life insurance company” for “other than life or mutual” in text.\n1986—Subsec. (a)(1)(B).  Pub. L. 99–514, §\u202f1899A(18) , substituted “46 U.S.C. App.” for “46 U.S.C.”.\nSubsec. (a)(1)(C).  Pub. L. 99–514, §\u202f645(a)(1) , added subpar. (C).\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f645(a)(4)(A) , inserted “This paragraph shall not apply to active business computer software royalties.”\nSubsec. (b)(3)(E).  Pub. L. 99–514, §\u202f645(a)(4)(B) , added subpar. (E).\nSubsec. (d).  Pub. L. 99–514, §\u202f645(a)(2) , added subsec. (d).\n1984—Subsec. (a)(1)(C).  Pub. L. 98–369  struck out subpar. (C) providing for nonapplication of par. (1) to dividends to which section 302(b)(4) would apply if the corporation were an individual.\n1982—(a)(1)(C).  Pub. L. 97–248  added subpar. (C).\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1901(b)(32)(D) , inserted in subpar. (B) “( 46 U.S.C. 1161  or 1177)” after “Merchant Marine Act, 1936”, and struck out subpar. (C) relating to a dividend distribution of divested stock.\nSubsec. (a)(4).  Pub. L. 94–553  struck out “(other than by reason of section 2 or 6 thereof)” after “title 17 of the United States Code”.\nSubsec. (a)(5)(B).  Pub. L. 94–455, §\u202f211(a) , inserted “In the case of a producer who actually participates in the production of the film, such term includes an interest in the proceeds or profits from the film, but only to the extent such interest is attributable to such active participation”.\nSubsec. (a)(6).  Pub. L. 94–455, §\u202f2106(a) , redesignated existing provisions as subpars. (A), (B), and (C) and, as redesignated, inserted in subpar. (A) “tangible” after “right to use” and in subpar. (C) inserted exclusions from income embodied in cl. (ii).\nSubsec. (b)(2)(A), (B), (D).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1966—Subsec. (a)(2).  Pub. L. 89–809, §\u202f206(b)(1) , struck out provision that royalties received for the use of, or for the privilege of using, a patent, invention, model, or design, secret formula, process, or other similar property right be treated as rent if such property right is also used by the corporation receiving such royalties in the manufacture or production of tangible personal property held for lease to customers and if the amount constituting rent from such leases to customers meets the requirement of subparagraph (A).\nSubsec. (b)(1)(C).  Pub. L. 89–809, §\u202f104(h)(2) , added subpar. (C).\nSubsec. (b)(2)(D).  Pub. L. 89–809, §\u202f206(b)(2) , added subpar. (D).\nSubsec. (b)(3).  Pub. L. 89–809, §\u202f206(a) , struck out “amounts constituting personal holding company income under subsection (a)(6), nor copyright royalties (as defined in subsection (a)(4)), nor produced film rents (as defined in subsection (a)(5)(B)).” after “but does not include”, and added subpars. (A) to (D).\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f225(d) , amended subsec. (a) generally, and among other changes, substituted “adjusted ordinary gross income” for “gross income”, provided, relative to rental income, that in addition to the 50-percent test of par. (2)(A), now applied on the basis of adjusted income from rents and adjusted ordinary gross income, a second test for exclusion shall be whether the sum on the dividends paid during the taxable year, the dividends paid on the last day of the year, and the consent dividends for the taxable year, equals or exceeds the amount by which the personal holding company income for the year exceeds 10 percent of the ordinary gross income, relative to mineral, oil, and gas royalties, that in addition to the 50-percent test of par. (3)(A), now applied on the basis of adjusted ordinary gross income, and the 15-percent test of par. (3)(C), from which test have been excluded deductions “specifically allowable under sections other than section 162” and is also now applied on the basis of adjusted gross income, the royalties shall be excluded if the personal holding company income for the taxable year is not more than 10 percent of the ordinary gross income, relative to copyright royalties, retained the 50-percent test as in par. (4)(A), making it applicable to ordinary gross income, included in the computation of the income for the taxable year the adjusted income from rents and the adjusted income from mineral, oil, and gas royalties, excluded from the sum of deductions allocable to royalties, deductions specifically allowable under sections other than 162, and changed the requirement that deductions constitute 50 percent or more of gross income to provide that they must equal 25 percent of ordinary gross income reduced by royalties paid and by depreciation deductions with respect to copyrights, relative to produced film rents, that they be treated on their own basis and not as rentals, and defined “produced film rents”, relative to use of corporation property by shareholders, that personal holding company income includes copyright royalties and the adjusted income from mineral, oil, and gas royalties, eliminated gains from the sale or other disposition of any interest in an estate or trust, from the sale or exchange of stock or securities, and from futures transactions in any commodity, and also definition of “rents”. See subsec. (b)(3).\nSubsec. (a)(2).  Pub. L. 88–484  inserted sentence requiring royalties received for the use of, or for the privilege of using, a patent, invention, model, or design (whether or not patented), secret formula or process, or any other similar property right to be treated as rent, if such property right is also used by the corporation receiving such royalties in the manufacture or production of tangible personal property held for lease to customers, and if the amount (computed without regard to this sentence) constituting rent from such leases to customers meets the requirements of subparagraph (A).\nSubsec. (b).  Pub. L. 88–272, §\u202f225(d) , added subsec. (b). Former subsec. (b), which provided that gross income and personal holding company income determined with respect to transactions relating to gains from stock and security transactions, and with respect to transactions relating to gains from commodity transactions, should include only the excess of gains over losses from such transactions, was struck out.\nSubsec. (d).  Pub. L. 88–272, §\u202f225(k)(2) , struck out subsec. (d) which related to special adjustment on disposition of antitrust stock received as a dividend.\n1962—Subsec. (a)(1).  Pub. L. 87–403  prescribed conditions making inapplicable the provisions of the paragraph to dividend distribution of divested stock.\nSubsec. (d).  Pub. L. 87–403  added subsec. (d).\n1960—Subsec. (a)(1).  Pub. L. 86–435, §\u202f1(b)(1) , excluded copyright royalties.\nSubsec. (a)(6).  Pub. L. 86–435, §\u202f1(b)(2) , inserted sentence providing that copyright royalties constitute personal holding company income.\nSubsec. (a)(9).  Pub. L. 86–435, §\u202f1(a) , added par. (9).\nPub. L. 113–295, div. B, title II, §\u202f207(b) ,  Dec. 19, 2014 ,  128 Stat. 4072 , provided that:  “The amendments made by this Act [probably means this section,  section 207 of title II of div. B of Pub. L. 113–295 , which amended this section] shall apply to taxable years ending on or after the date of the enactment of this Act [ Dec. 19, 2014 ].”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  section 1010(f)(5) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6279(b) ,  Nov. 10, 1988 ,  102 Stat. 3754 , provided that:  “The amendments made by this section [amending this section] shall apply to interest received after the date of the enactment of this Act [ Nov. 10, 1988 ], in taxable years ending after such date.”\nPub. L. 99–514, title VI, §\u202f645(e) ,  Oct. 22, 1986 ,  100 Stat. 2292 , provided that:  “The amendments made by subsection (a) [amending this section and  section 553 of this title ] shall apply to royalties received before, on, and after  December 31, 1986 .”\nAmendment by  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .\nAmendment by  Pub. L. 94–553  effective  Jan. 1, 1978 , see  section 102 of Pub. L. 94–553 , set out as an Effective Date note preceding  section 101 of Title 17 , Copyrights.\nPub. L. 94–455, title II, §\u202f211(b) ,  Oct. 4, 1976 ,  90 Stat. 1545 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending on or after  December 31, 1975 .”\nAmendment by  section 1901(b)(32)(D) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2106(b) ,  Oct. 4, 1976 ,  90 Stat. 1903 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nAmendment by  section 104(h)(2) of Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nPub. L. 89–809, title II, §\u202f206(c) ,  Nov. 13, 1966 ,  80 Stat. 1579 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 13, 1966 ]. Such amendments shall also apply, at the election of the taxpayer (made at such time and in such manner as the Secretary or his delegate may prescribe), to taxable years beginning on or before such date and ending after  December 31, 1965 .”\nPub. L. 88–484, §\u202f3(b) ,  Aug. 22, 1964 ,  78 Stat. 598 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1963 .”\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272 , set out as a note under  section 316 of this title .\nAmendment by  Pub. L. 87–403  applicable only with respect to distributions made after  Feb. 2, 1962 , see  section 3(g) of Pub. L. 87–403 , set out as a note under  section 312 of this title .\nPub. L. 86–435, §\u202f2 ,  Apr. 22, 1960 ,  74 Stat. 78 , provided that:  “The amendments made by the first section of this Act [amending this section and sections 544 and 553 of this title] shall apply only with respect to taxable years beginning after  December 31, 1959 .”\nPub. L. 100–647, title VI, §\u202f6280 ,  Nov. 10, 1988 ,  102 Stat. 3754 , provided that: \n “(a)   General Rule .— For purposes of subtitle A of the 1986 Code, the term ‘personal holding company income’ shall not include any dividend received by a qualified bank holding company from a 25-percent owned bank during any taxable year ending in 1989 or 1990. \n \n “(b)  $3,000,000  Limitation .— The aggregate amount excluded from the personal holding company income of any qualified bank holding company under subsection (a) for the taxable year shall not exceed $3,000,000. \n \n “(c)   Qualified Bank Holding Company .— For purposes of this section, the term ‘qualified bank holding company’ means any bank holding company (as defined in section 2(a) of the Bank Holding Company Act of 1956 [ 12 U.S.C. 1841(a) ]) if 80 percent or more (by value) of the assets of such company at all times during the taxable year consist of stock in 1 or more 25-percent owned banks. \n \n “(d)  25- Percent Owned Bank .— For purposes of this section, the term ‘25-percent owned bank’ means any bank (as defined in section 581 of the 1986 Code) if at least 25 percent of the stock of such bank (by vote and value) is owned by the bank holding company.”\nPub. L. 99–514, title VI, §\u202f645(b) –(d),  Oct. 22, 1986 ,  100 Stat. 2292 , provided that: \n “(b)   Special Rules for Broker-Dealers .— In the case of a broker-dealer which is part of an affiliated group which files a consolidated Federal income tax return, the common parent of which was incorporated in Nevada on  January 27, 1972 , the personal holding company income (within the meaning of section 543 of the Internal Revenue Code of 1986) of such broker-dealer, shall not include any interest received after the date of the enactment of this Act [ Oct. 22, 1986 ] with respect to— “(1)  any securities or money market instruments held as inventory, \n \n “(2)  margin accounts, or \n \n “(3)  any financing for a customer secured by securities or money market instruments. \n \n \n “(c)   Special Rule for Royalties Received by Qualified Taxpayer.— “(1)   In general .— Any qualified royalty received or accrued in taxable years beginning after  December 31, 1981 , by a qualified taxpayer shall be treated in the same manner as a royalty with respect to software is treated under the amendments made by this section [amending this section and  section 553 of this title ]. \n \n “(2)   Qualified taxpayer .— For purposes of this subsection, a qualified taxpayer is any taxpayer incorporated on  September 7, 1978 , which is engaged in the trade or business of manufacturing dolls and accessories. \n \n “(3)   Qualified royalty .— For purposes of this subsection, the term ‘qualified royalty’ means any royalty arising from an agreement entered into in 1982 which permits the licensee to manufacture and sell dolls and accessories. \n \n \n “(d)   Special Rule for Treatment of Active Business Computer Royalties for S Corporation Purposes .— In the case of a taxpayer which was incorporated on  May 3, 1977 , in California and which elected to be taxed as an S corporation for its taxable year ending on  December 31, 1985 , any active business computer royalties (within the meaning of section 543(d) of the Internal Revenue Code of 1986 as added by this Act) which are received by the taxpayer in taxable years beginning after  December 31, 1984 , shall not be treated as passive investment income (within the meaning of section 1362(d)(3)(D) [now section 1362(d)(3)(C)]) for purposes of subchapter S of chapter 1 of such Code.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be considered as being owned proportionately by its shareholders, partners, or beneficiaries.\nAn individual shall be considered as owning the stock owned, directly or indirectly, by or for his family or by or for his partner. For purposes of this paragraph, the family of an individual includes only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants.\nIf any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock.\nStock constructively owned by a person by reason of the application of paragraph (1) or (3), shall, for purposes of applying paragraph (1) or (2), be treated as actually owned by such person; but stock constructively owned by an individual by reason of the application of paragraph (2) shall not be treated as owned by him for purposes of again applying such paragraph in order to make another the constructive owner of such stock.\nIf stock may be considered as owned by an individual under either paragraph (2) or (3) it shall be considered as owned by him under paragraph (3).\n1964— Pub. L. 88–272  substituted “section 543(a)(7)” for “section 543(a)(5)”, and “section 543(a)(4)” for “section 543(a)(9),” wherever appearing.\n1960—Subsec. (a).  Pub. L. 86–435, §\u202f1(c)(1) , inserted reference to section 543(a)(9) in introductory provisions.\nSubsec. (a)(4)(B).  Pub. L. 86–435, §\u202f1(c)(2) , included reference to section 543(a)(9).\nSubsec. (b).  Pub. L. 86–435, §\u202f1(d) , added par. (4), and inserted reference to par. (4) in last sentence.\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see section 225( l )(1) of  Pub. L. 88–272  set out as a note under  section 316 of this title .\nAmendment by  Pub. L. 86–435  applicable only with respect to taxable years beginning after  Dec. 31, 1959 , see  section 2 of Pub. L. 86–435 , set out as a note under  section 543 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'For purposes of this part, the term “undistributed personal holding company income” means the taxable income of a personal holding company adjusted in the manner provided in subsections (b), (c), and (d), minus the dividends paid deduction as defined in section 561. In the case of a personal holding company which is a foreign corporation, not more than 10 percent in value of the outstanding stock of which is owned (within the meaning of section 958(a)) during the last half of the taxable year by United States persons, the term “undistributed personal holding company income” means the amount determined by multiplying the undistributed personal holding company income (determined without regard to this sentence) by the percentage in value of its outstanding stock which is the greatest percentage in value of its outstanding stock so owned by United States persons on any one day during such period.\nThere shall be allowed as a deduction Federal income and excess profits taxes and income, war profits and excess profits taxes of foreign countries and possessions of the United States (to the extent not allowable as a deduction under section 275(a)(4)), accrued during the taxable year or deemed to be paid by a domestic corporation under section 960 for the taxable year, but not including the accumulated earnings tax imposed by section 531 or the personal holding company tax imposed by section 541.\nThe deduction for charitable contributions provided under section 170 shall be allowed, but in computing such deduction the limitations in section 170(b)(1)(A), (B), (D), and (E) shall apply, and section 170(b)(2) and (d)(1) shall not apply. For purposes of this paragraph, the term “contribution base” when used in section 170(b)(1) means the taxable income computed with the adjustments (other than the 10-percent limitation) provided in section 170(b)(2) and (d)(1) and without deduction of the amount disallowed under paragraph (6) of this subsection.\nThe special deductions for corporations provided in part VIII (except section 248) of subchapter B (section 241 and following, relating to the deduction for dividends received by corporations, etc.) shall not be allowed.\nThe net operating loss deduction provided in section 172 shall not be allowed, but there shall be allowed as a deduction the amount of the net operating loss (as defined in section 172(c)) for the preceding taxable year computed without the deductions provided in part VIII (except section 248) of subchapter B.\nIn the case of a foreign corporation, paragraph (5) shall be applied by taking into account only gains and losses which are effectively connected with the conduct of a trade or business within the United States and are not exempt from tax under treaty.\nIn the case of a foreign corporation all of the outstanding stock of which during the last half of the taxable year is owned by nonresident alien individuals (whether directly or indirectly through foreign estates, foreign trusts, foreign partnerships, or other foreign corporations), the taxable income for purposes of subsection (a) shall be the income which constitutes personal holding company income under section 543(a)(7), reduced by the deductions attributable to such income, and adjusted, with respect to such income, in the manner provided in subsection (b).\n2017—Subsec. (b)(1).  Pub. L. 115–97  substituted “section 960” for “section 902(a) or 960(a)(1)”.\n2014—Subsec. (b)(1).  Pub. L. 113–295  substituted “section 531 or the personal holding company tax imposed by section 541.” for “section 531, the personal holding company tax imposed by section 541, or the taxes imposed by corresponding sections of a prior income tax law.”\n2006—Subsec. (b)(2).  Pub. L. 109–280 , which directed the substitution of “(D), and (E)” for “and (D)” in section 545(b)(2), without specifying the act to be amended, was executed by making the substitution in subsec. (b)(2) of this section, which is section 545 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n1990—Subsecs. (c), (d).  Pub. L. 101–508  redesignated subsec. (d) as (c) and struck out former subsec. (c) which related to a special adjustment to taxable income for amounts used or set aside to pay or retire qualified indebtedness.\n1986—Subsec. (b)(7).  Pub. L. 99–514  added par. (7).\n1983—Subsec. (b)(2).  Pub. L. 97–448  substituted “10-percent” for “5-percent”.\n1976—Subsec. (b)(1).  Pub. L. 94–455 , §§\u202f1033(b)(4), 1901(a)(77)(A), struck out “(other than excess profits tax imposed by subchapter E of chapter 2 of the Internal Revenue Code of 1939 for taxable years beginning after  December 31, 1940 )” after “Federal income and excess profits taxes”; substituted “902(a) or 960(a)(1)” for “902(a)(1) or 960(a)(1)(C)” after “corporation under section”; and struck out provisions after “prior income tax law” relating to election by taxpayer who paid Federal income and excess profits taxes to deduct payments, when made, for purposes of computing subchapter A net income or, for a taxable year ending after  June 30, 1954 , to deduct such taxes when accrued, such election being irrevocable and applied to taxable year for which election was made and to all subsequent taxable years.\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1901(b)(20)(B)(ii) , substituted “paragraph (6)” for “paragraph (8)” after “amount disallowed under”.\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f1901(b)(33)(D) , substituted “Net” for “Long-term” after “(5)”.\nSubsec. (b)(6).  Pub. L. 94–455 , §§\u202f1901(b)(20)(B)(i), 1906(b)(13)(A), struck out par. (6) relating to deduction allowed to bank affiliates, redesignated former par. (8) as (6) and, as redesignated, struck out “or his delegate” in two places after “Secretary”.\nSubsec. (b)(7).  Pub. L. 94–455, §\u202f1901(a)(77)(B) , struck out par. (7) relating to payment of indebtedness incurred prior to  January 1, 1934 .\nSubsec. (b)(8).  Pub. L. 94–455, §\u202f1901(b)(20)(B)(i) , redesignated par. (8) as (6).\nSubsec. (b)(9).  Pub. L. 94–455, §\u202f1951(b)(9)(A) , struck out par. (9) relating to the deduction of the amount of a lien in favor of the United States.\nSubsec. (b)(10), (11).  Pub. L. 94–455, §\u202f1901(b)(32)(E) , struck out par. (10) relating to deduction for distributions of divested stock, and struck out par. (11) relating to special adjustment on the disposition of antitrust stock received as a dividend.\nSubsec. (c)(2)(A).  Pub. L. 94–455, §\u202f1901(a)(77)(C) , substituted “ February 26, 1964 ” for “the date of enactment of this subsection” after “years ending before”.\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(5).  Pub. L. 94–455, §\u202f1901(b)(20)(B)(iii) , substituted “subsection (b)(6)” for “subsection (b)(8)” after “company income under”.\n1969—Subsec. (b)(2).  Pub. L. 91–172  substituted “section 170(b)(1)(A), (B), and (D)”, “section 170(b)(2) and (d)(1)” for “section 170(b)(1)(A) and (B)” and “section 170(b)(2) and (5)”, respectively, in provisions of first sentence setting out the sections appropriate to the computation of the deduction, and in provisions of second sentence describing applicability of terms for purposes of this paragraph, substituted “contribution base” and “section 170(b)(2) and (d)(1)” for “adjusted gross income” and “the first sentence of section 170(b)(2) and (5),” respectively.\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f104(h)(3)(A) , substituted “in the manner provided in subsections (b), (c), and (d)” for “in the manner provided in subsection (b) and (c)” and inserted provisions governing the case of a personal holding company which is a foreign corporation, not more than 10 percent in value of the outstanding stock of which is owned (within the meaning of section 958(a)) during the last half of the taxable year by United States persons.\nSubsec. (b)(9).  Pub. L. 89–719  substituted “section 6323(f)” for “section 6323(a)(1), (2), or (3)”.\nSubsec. (d).  Pub. L. 89–809, §\u202f104(h)(3)(B) , added subsec. (d).\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f225(i)(1) , inserted reference to subsection (c).\nSubsec. (b)(1), (2).  Pub. L. 88–272 , §§\u202f207(b)(5), 209(c)(2), substituted “section 275(a)(4)” for “section 164(b)(6)” in par. (1), and inserted reference to section 170(b)(5) in par. (2).\nSubsec. (c).  Pub. L. 88–272, §\u202f225(i)(2) , added subsec. (c).\n1962—Subsec. (b)(1).  Pub. L. 87–834  substituted “accrued during the taxable year or deemed to be paid by a domestic corporation under section 902(a)(1) or 960(a)(1)(C) for the taxable year” for “accrued during the taxable year”.\nSubsec. (b)(10), (11).  Pub. L. 87–403  added pars. (10) and (11).\n1958—Subsec. (b)(2).  Pub. L. 85–866, §\u202f32(a) , substituted in first sentence “,\u2000but in computing such deduction the limitations in section 170(b)(1)(A) and (B) shall apply, and section 170(b) shall not apply” for “but with the limitations in section 170(b)(1)(A) and (B) (in lieu of the limitation in section 170(b)(2)”, and inserted in second sentence “(other than the 5-percent limitation)” and “the first sentence” after “with the adjustments” and “provided in”, respectively.\nSubsec. (b)(4).  Pub. L. 85–866, §\u202f32(b) , inserted “computed without the deductions provided in part VIII (except section 248) of subchapter B”.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–280  applicable to contributions made in taxable years beginning after  Dec. 31, 2005 , see  section 1206(c) of Pub. L. 109–280 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 99–514  applicable to gains and losses realized on or after  Jan. 1, 1986 , see  section 1225(c) of Pub. L. 99–514 , as amended, set out as a note under  section 535 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nFor effective date of amendment by  section 1033(b)(4) of Pub. L. 94–455 , see  section 1033(c) of Pub. L. 94–455 , set out as a note under  section 960 of this title .\nAmendment by section 1901(a)(77), (b)(20)(B), (32)(E), (33)(D) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(b)(9)(A) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455  set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 201(g) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 89–719  applicable after  Nov. 2, 1966 , regardless of when the title or lien of the United States arose or when the lien or interest of another person was acquired, except in a case in which a lien or title derived from enforcement of a lien held by the United States has been enforced by a civil action or suit which has become final by judgment, sale, or agreement before  Nov. 2, 1966 , or in a case in which the amendment would impair a priority held by any person other than the United States holding a lien or interest prior to  Nov. 2, 1966 , operate to increase the liability of such person, or shorten the time for bringing suit with respect to transactions occurring before  Nov. 2, 1966 , see section 114(a)–(e) of  Pub. L. 89–719 , set out as a note under  section 6323 of this title .\nAmendment by  section 207(b)(5) of Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 207(c) of Pub. L. 88–272 , set out as a note under  section 164 of this title .\nAmendment by  section 209(c)(2) of Pub. L. 88–272  applicable to contributions paid in taxable years beginning after  Dec. 31, 1963 , see  section 209(f)(1) of Pub. L. 88–272 , set out as a note under  section 170 of this title .\nAmendment by section 225(i)(1), (2) of  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see section 225( l )(1) of  Pub. L. 88–272  set out as a note under  section 316 of this title .\nAmendment by  Pub. L. 87–834  applicable in respect of any distribution received by a domestic corporation after  Dec. 31, 1964 , and in respect of any distribution received by a domestic corporation before  Jan. 1, 1965 , in a taxable year of such corporation beginning after  Dec. 31, 1962 , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after  Dec. 31, 1962 , see  section 9(e) of Pub. L. 87–834 , set out as an Effective Date note under  section 78 of this title .\nAmendment by  Pub. L. 87–403  applicable only with respect to distributions made after  Feb. 2, 1962 , see  section 3(g) of Pub. L. 87–403 , set out as a note under  section 312 of this title .\nAmendment by  section 32(a) of Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title I, §\u202f32(c) ,  Sept. 2, 1958 ,  72 Stat. 1632 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (b) of this section [amending this section] shall apply with respect to adjustments under section 545(b)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for taxable years beginning after  December 31, 1957 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 94–455, title XIX, §\u202f1951(b)(9)(B) ,  Oct. 4, 1976 ,  90 Stat. 1839 , provided that:  “Notwithstanding subparagraph (A) [amending this section], if any amount was deducted under paragraph (9) of section 545(b) in a taxable year beginning before  January 1, 1977 , on account of a lien which is satisfied or released in a taxable year beginning on or after such date, the amount so deducted shall be included in income, for purposes of section 545, as provided in the second sentence of such paragraph. Shareholders of any corporation which has amounts included in its income by reason of the preceding sentence may elect to compute the income tax on dividends attributable to amounts so included as provided in the third sentence of such paragraph.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'Section 443(b) (relating to computation of tax on change of annual accounting period) shall not apply in the computation of the personal holding company tax imposed by section 541.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PERSONAL HOLDING COMPANIES'},
  'content': 'If a determination (as defined in subsection (c)) with respect to a taxpayer establishes liability for personal holding company tax imposed by section 541 (or by a corresponding provision of a prior income tax law) for any taxable year, a deduction shall be allowed to the taxpayer for the amount of deficiency dividends (as defined in subsection (d)) for the purpose of determining the personal holding company tax for such year, but not for the purpose of determining interest, additional amounts, or assessable penalties computed with respect to such personal holding company tax.\nThe deficiency dividend deduction shall be allowed as of the date the claim for the deficiency dividend deduction is filed.\nIf the allowance of a deficiency dividend deduction results in an overpayment of personal holding company tax for any taxable year, credit or refund with respect to such overpayment shall be made as if on the date of the determination 2 years remained before the expiration of the period of limitation on the filing of claim for refund for the taxable year to which the overpayment relates. No interest shall be allowed on a credit or refund arising from the application of this section.\nFor purposes of this section, the term “deficiency dividends” means the amount of the dividends paid by the corporation on or after the date of the determination and before filing claim under subsection (e), which would have been includible in the computation of the deduction for dividends paid under section 561 for the taxable year with respect to which the liability for personal holding company tax exists, if distributed during such taxable year. No dividends shall be considered as deficiency dividends for purposes of subsection (a) unless distributed within 90 days after the determination.\nDeficiency dividends paid in any taxable year (to the extent of the portion thereof taken into account under subsection (a) in determining personal holding company tax) shall not be included in the amount of dividends paid for such year for purposes of computing the dividends paid deduction for such year and succeeding years.\nDeficiency dividends paid in any taxable year (to the extent of the portion thereof taken into account under subsection (a) in determining personal holding company tax) shall not be allowed for purposes of section 563(b) in the computation of the dividends paid deduction for the taxable year preceding the taxable year in which paid.\nNo deficiency dividend deduction shall be allowed under subsection (a) unless (under regulations prescribed by the Secretary) claim therefor is filed within 120 days after the determination.\nIf the corporation files a claim, as provided in subsection (e), the running of the statute of limitations provided in section 6501 on the making of assessments, and the bringing of distraint or a proceeding in court for collection, in respect of the deficiency and all interest, additional amounts, or assessable penalties, shall be suspended for a period of 2 years after the date of the determination.\nNo deficiency dividend deduction shall be allowed under subsection (a) if the determination contains a finding that any part of the deficiency is due to fraud with intent to evade tax, or to wilful failure to file an income tax return within the time prescribed by law or prescribed by the Secretary in pursuance of law.\n1976—Subsecs. (c)(3), (e), (g).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (h).  Pub. L. 94–455, §\u202f1901(a)(78) , struck out subsec. (h) relating to the effective date of provisions concerning deduction of deficiency dividends.\nAmendment by  section 1901(a)(78) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 551, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 193 ;  Pub. L. 88–272, title II, §\u202f225(f)(4) ,  Feb. 26, 1964 ,  78 Stat. 88 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(79) , (b)(1)(F)(i), (12)(A),  Oct. 4, 1976 ,  90 Stat. 1777 , 1790, 1795;  Pub. L. 98–369, div. A, title I, §\u202f132(b) ,  July 18, 1984 ,  98 Stat. 666 ;  Pub. L. 99–514, title XII, §\u202f1235(e) , title XVIII, §\u202f1810(h)(2),  Oct. 22, 1986 ,  100 Stat. 2575 , 2829;  Pub. L. 100–647, title I, §\u202f1012(bb)(1)(A) , (B),  Nov. 10, 1988 ,  102 Stat. 3533 ;  Pub. L. 105–34, title XI, §\u202f1122(d)(2) ,  Aug. 5, 1997 ,  111 Stat. 977 , provided for taxation of foreign personal holding company income to United States shareholders.\nSection 552, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 195 ;  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 ;  Pub. L. 98–369, div. A, title I, §\u202f132(c)(2) ,  July 18, 1984 ,  98 Stat. 666 ;  Pub. L. 99–514, title XII, §\u202f1222(b) , title XVIII, §\u202f1810(h)(1),  Oct. 22, 1986 ,  100 Stat. 2557 , 2829;  Pub. L. 100–647, title I, §\u202f1012(bb)(1)(C) ,  Nov. 10, 1988 ,  102 Stat. 3533 , defined “foreign personal holding company”.\nSection 553, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 195 ;  Pub. L. 86–435, §\u202f1(e) ,  Apr. 22, 1960 ,  74 Stat. 78 ;  Pub. L. 88–272, title II, §\u202f225(e) ,  Feb. 26, 1964 ,  78 Stat. 85 ;  Pub. L. 94–455, title XIX, §\u202f1901(b)(32)(F) ,  Oct. 4, 1976 ,  90 Stat. 1800 ;  Pub. L. 99–514, title VI, §\u202f645(a)(3) ,  Oct. 22, 1986 ,  100 Stat. 2291 , related to determination of foreign personal holding company income.\nSection 554, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 196 ;  Pub. L. 88–272, title II, §\u202f225(e) ,  Feb. 26, 1964 ,  78 Stat. 86 ;  Pub. L. 98–369, div. A, title I, §\u202f132(a) ,  July 18, 1984 ,  98 Stat. 665 , related to constructive ownership of stock and treatment of convertible securities as outstanding stock.\nSection 555,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 196 , related to determination of gross income of foreign personal holding companies.\nSection 556, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 196 ;  Pub. L. 85–866, title I, §\u202f33(a) , (b)(1), (c)(1),  Sept. 2, 1958 ,  72 Stat. 1632 ;  Pub. L. 87–403, §\u202f3(e) ,  Feb. 2, 1962 ,  76 Stat. 7 ;  Pub. L. 88–272, title II , §§\u202f207(b)(6), 209(c)(2),  Feb. 26, 1964 ,  78 Stat. 42 , 46;  Pub. L. 91–172, title II, §\u202f201(a)(2)(B) ,  Dec. 30, 1969 ,  83 Stat. 558 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(80), (b)(32)(G), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1778 , 1800, 1834;  Pub. L. 97–448, title I, §\u202f102(m)(2) ,  Jan. 12, 1983 ,  96 Stat. 2374 ;  Pub. L. 101–508, title XI, §\u202f11802(d)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–529 , related to undistributed foreign personal holding company income.\nSection 557,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 198 , related to inapplicability of  section 443(b) of this title  in the computation of income.\nSection 558, added  Pub. L. 85–866, title I, §\u202f33(d)(1) ,  Sept. 2, 1958 ,  72 Stat. 1632 , related to returns of officers, directors, and shareholders of foreign personal holding companies.\nRepeal applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTION FOR DIVIDENDS PAID'},
  'content': 'In determining the deduction for dividends paid, the rules provided in section 562 (relating to rules applicable in determining dividends eligible for dividends paid deduction) and section 563 (relating to dividends paid after the close of the taxable year) shall be applicable.\n1976—Subsec. (b).  Pub. L. 94–455  redesignated existing provisions of par. (1) as subsec. (b) and struck out par. (2) relating to special adjustment on disposition of antitrust stock as a dividend.\n1962—Subsec. (b).  Pub. L. 87–403  designated existing provisions as par. (1) and added par. (2).\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 87–403  applicable only with respect to distributions made after  Feb. 2, 1962 , see  section 3(g) of Pub. L. 87–403 , set out as a note under  section 312 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTION FOR DIVIDENDS PAID'},
  'content': 'For purposes of this part, the term “dividend” shall, except as otherwise provided in this section, include only dividends described in section 316 (relating to definition of dividends for purposes of corporate distributions).\nExcept in the case of a publicly offered regulated investment company (as defined in section 67(c)(2)(B)) or a publicly offered REIT, the amount of any distribution shall not be considered as a dividend for purposes of computing the dividends paid deduction, unless such distribution is pro rata, with no preference to any share of stock as compared with other shares of the same class, and with no preference to one class of stock as compared with another class except to the extent that the former is entitled (without reference to waivers of their rights by shareholders) to such preference. In the case of a distribution by a regulated investment company (other than a publicly offered regulated investment company (as so defined)) to a shareholder who made an initial investment of at least $10,000,000 in such company, such distribution shall not be treated as not being pro rata or as being preferential solely by reason of an increase in the distribution by reason of reductions in administrative expenses of the company.\nFor purposes of this subsection, the term “publicly offered REIT” means a real estate investment trust which is required to file annual and periodic reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934.\nIn the case where a corporation which is a member of an affiliated group of corporations filing or required to file a consolidated return for a taxable year is required to file a separate personal holding company schedule for such taxable year, a distribution by such corporation to another member of the affiliated group shall be considered as a dividend for purposes of computing the dividends paid deduction if such distribution would constitute a dividend under the other provisions of this section to a recipient which is not a member of an affiliated group.\nThe Securities Exchange Act of 1934, referred to in subsec. (c)(2), is  act June 6, 1934, ch. 404 ,  48 Stat. 881 , which is classified principally to chapter 2B (§\u202f78a et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 78a of Title 15  and Tables.\n2015—Subsec. (c).  Pub. L. 114–113, §\u202f314(a) , (b), designated existing provisions as par. (1), inserted heading and “or a publicly offered REIT” after “a publicly offered regulated investment company (as defined in section 67(c)(2)(B))” in text, and added par. (2).\nSubsec. (e).  Pub. L. 114–113, §\u202f315(a) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsec. (e)(1).  Pub. L. 114–113, §\u202f320(b) , substituted “deduction—” for “deduction, the earnings and profits of such trust for any taxable year beginning after  December 31, 1980 , shall be increased by the total amount of gain (if any) on the sale or exchange of real property by such trust during such taxable year.” and added subpars. (A) and (B).\n2010—Subsec. (c).  Pub. L. 111–325  substituted “Except in the case of a publicly offered regulated investment company (as defined in section 67(c)(2)(B)), the amount” for “The amount” in first sentence and inserted “(other than a publicly offered regulated investment company (as so defined))” after “regulated investment company” in second sentence.\n2004—Subsec. (b)(1).  Pub. L. 108–357  struck out “or a foreign personal holding company described in section 552” after “section 542” in introductory provisions.\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1804(d)(1) , inserted at end “Except to the extent provided in regulations, the preceding sentence shall not apply in the case of any mere holding or investment company which is not a regulated investment company.”\nSubsec. (c).  Pub. L. 99–514, §\u202f657(a) , inserted at end “In the case of a distribution by a regulated investment company to a shareholder who made an initial investment of at least $10,000,000 in such company, such distribution shall not be treated as not being pro rata or as being preferential solely by reason of an increase in the distribution by reason of reductions in administrative expenses of the company.”\n1983—Subsec. (e).  Pub. L. 97–448  added subsec. (e).\n1982—Subsec. (b)(1).  Pub. L. 97–248  inserted sentence at end providing that, for purposes of subpar. (A), a liquidation includes a redemption of stock to which section 302 applies.\n1964—Subsec. (b).  Pub. L. 88–272  designated existing provisions as subpars. (A) and (B) of par. (1), excepted personal holding companies in section 542, and foreign personal holding companies in section 552 therefrom, and added par. (2).\nPub. L. 114–113, div. Q, title III, §\u202f314(c) ,  Dec. 18, 2015 ,  129 Stat. 3093 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions in taxable years beginning after  December 31, 2014 .”\nPub. L. 114–113, div. Q, title III, §\u202f315(b) ,  Dec. 18, 2015 ,  129 Stat. 3093 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions in taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title III, §\u202f320(c) ,  Dec. 18, 2015 ,  129 Stat. 3097 , provided that:  “The amendments made by this section [amending this section and  section 857 of this title ] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 111–325, title III, §\u202f307(c) ,  Dec. 22, 2010 ,  124 Stat. 3550 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions in taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f657(b) ,  Oct. 22, 1986 ,  100 Stat. 2299 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XVIII, §\u202f1804(d)(2) ,  Oct. 22, 1986 ,  100 Stat. 2800 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to distributions after  September 27, 1985 .”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–248  applicable to distributions after  Aug. 31, 1982 , with exceptions for certain partial liquidations, see  section 222(f) of Pub. L. 97–248 , set out as a note under  section 302 of this title .\nAmendment  Pub. L. 88–272  applicable to distributions made in any taxable year of the distributing corporation beginning after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272 , set out as a note under  section 316 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTION FOR DIVIDENDS PAID'},
  'content': 'In the determination of the dividends paid deduction for purposes of the accumulated earnings tax imposed by section 531, a dividend paid after the close of any taxable year and on or before the 15th day of the fourth month following the close of such taxable year shall be considered as paid during such taxable year.\nFor the purpose of applying section 562(a), with respect to distributions under subsection (a) or (b) of this section, a distribution made after the close of a taxable year and on or before the 15th day of the fourth month following the close of the taxable year shall be considered as made on the last day of such taxable year.\n2015— Pub. L. 114–41  substituted “fourth month” for “third month” wherever appearing.\n2004—Subsecs. (c), (d).  Pub. L. 108–357  redesignated subsec. (d) as (c), substituted “subsection (a) or (b)” for “subsection (a), (b), or (c)”, and struck out former subsec. (c) which related to foreign personal holding company tax.\n1989—Subsec. (c).  Pub. L. 101–239, §\u202f7401(b)(1) , added subsec. (c). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 101–239, §\u202f7401(b)(2) , substituted “subsection (a), (b), or (c)” for “subsection (a) or (b)”.\nPub. L. 101–239, §\u202f7401(b)(1) , redesignated former subsec. (c) as (d).\n1969—Subsec. (b)(2).  Pub. L. 91–172  substituted “20 percent” for “10 percent”.\nAmendment by  Pub. L. 114–41  applicable to returns for taxable years beginning after  Dec. 31, 2015 , with special rule for certain C corporations, see  section 2006(a)(3) of Pub. L. 114–41 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 101–239  applicable to taxable years of foreign corporations beginning after  July 10, 1989 , with special rules for any foreign corporation required by the amendments made by  section 7401 of Pub. L. 101–239  to change its taxable year for its first taxable year beginning after  July 10, 1989 , see  section 7401(d) of Pub. L. 101–239 , set out as an Effective Date note under  section 898 of this title .\nPub. L. 91–172, title IX, §\u202f914(b) ,  Dec. 30, 1969 ,  83 Stat. 723 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTION FOR DIVIDENDS PAID'},
  'content': 'For purposes of computing the dividends paid deduction under section 561, in the case of a personal holding company the dividend carryover for any taxable year shall be the dividend carryover to such taxable year, computed as provided in subsection (b), from the two preceding taxable years.\n1976—Subsec. (c).  Pub. L. 94–455  struck out subsec. (c) which related to the determination of dividend carryover from taxable years to which this subtitle does not apply.\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTION FOR DIVIDENDS PAID'},
  'content': 'If any person owns consent stock (as defined in subsection (f)(1)) in a corporation on the last day of the taxable year of such corporation, and such person agrees, in a consent filed with the return of such corporation in accordance with regulations prescribed by the Secretary, to treat as a dividend the amount specified in such consent, the amount so specified shall, except as provided in subsection (b), constitute a consent dividend for purposes of section 561 (relating to the deduction for dividends paid).\nIf a distribution by a corporation consists in part of consent dividends and in part of money or other property, the entire amount specified in the consents and the amount of such money or other property shall be considered together for purposes of applying this title.\nIn the case of a consent dividend which, if paid in money would be subject to the provisions of section 1441 (relating to withholding of tax on nonresident aliens) or section 1442 (relating to withholding of tax on foreign corporations), this section shall not apply unless the consent is accompanied by money, or such other medium of payment as the Secretary may by regulations authorize, in an amount equal to the amount that would be required to be deducted and withheld under sections 1441 or 1442 if the consent dividend had been, on the last day of the taxable year of the corporation, paid to the shareholder in money as a dividend. The amount accompanying the consent shall be credited against the tax imposed by this subtitle on the shareholder.\nConsent stock, for purposes of this section, means the class or classes of stock entitled, after the payment of preferred dividends, to a share in the distribution (other than in complete or partial liquidation) within the taxable year of all the remaining earnings and profits, which share constitutes the same proportion of such distribution regardless of the amount of such distribution.\nPreferred dividends, for purposes of this section, means a distribution (other than in complete or partial liquidation), limited in amount, which must be made on any class of stock before a further distribution (other than in complete or partial liquidation) of earnings and profits may be made within the taxable year.\n1976—Subsecs. (a), (e).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS'},
  'content': 'For purposes of sections 582 and 584, the term “bank” means a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia) or of any State, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under authority of the Comptroller of the Currency, and which is subject by law to supervision and examination by State or Federal authority having supervision over banking institutions. Such term also means a domestic building and loan association.\n1976— Pub. L. 94–455  substituted “or of any State” for “of any State, or of any Territory” after “District of Columbia)” and struck out “,\u2000Territorial,” after “examination by State”.\n1962— Pub. L. 87–722  substituted “authority of the Comptroller of the Currency” for “section 11(k) of the Federal Reserve Act ( 38 Stat. 262 ;  12 U.S.C. 248(k) )”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS'},
  'content': 'Notwithstanding sections 165(g)(1) and 166(e), subsections (a) and (b) of section 166 (relating to allowance of deduction for bad debts) shall apply in the case of a bank to a debt which is evidenced by a security as defined in section 165(g)(2)(C).\nFor purposes of section 165(g)(1), where the taxpayer is a bank and owns directly at least 80 percent of each class of stock of another bank, stock in such other bank shall not be treated as a capital asset.\nFor purposes of this subtitle, in the case of a financial institution referred to in paragraph (2), the sale or exchange of a bond, debenture, note, or certificate or other evidence of indebtedness shall not be considered a sale or exchange of a capital asset. For purposes of the preceding sentence, any regular or residual interest in a REMIC shall be treated as an evidence of indebtedness.\nFor purposes of subparagraph (A), the term “business development corporation” means a corporation which was created by or pursuant to an act of a State legislature for purposes of promoting, maintaining, and assisting the economy and industry within such State on a regional or statewide basis by making loans to be used in trades and businesses which would generally not be made by banks within such region or State in the ordinary course of their business (except on the basis of a partial participation), and which is operated primarily for such purposes.\nIn the case of a foreign corporation referred to in subparagraph (A)(i), paragraph (1) shall only apply to gains and losses which are effectively connected with the conduct of a banking business in the United States.\nThe Small Business Investment Act of 1958, referred to in subsec. (c)(2)(A)(iii), is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under  section 661 of Title 15  and Tables.\n2004—Subsec. (c)(1).  Pub. L. 108–357  struck out “,\u2000and any regular interest in a FASIT,” before “shall be treated”.\n1996—Subsec. (c)(1).  Pub. L. 104–188  inserted “,\u2000and any regular interest in a FASIT,” after “REMIC”.\n1990—Subsec. (c)(1).  Pub. L. 101–508, §\u202f11801(c)(11)(A) , substituted “paragraph (2)” for “paragraph (5)”.\nSubsec. (c)(2).  Pub. L. 101–508, §\u202f11801(a)(25) , (c)(11)(B), redesignated par. (5) as (2) and struck out former par. (2) “Transitional rule for banks” which read as follows: “In the case of a bank, if the net long-term capital gains of the taxable year from sales or exchanges of qualifying securities exceed the net short-term capital losses of the taxable year from such sales or exchanges, such excess shall be considered as gain from the sale of a capital asset held for more than 6 months to the extent it does not exceed the net gain on sales and exchanges described in paragraph (1).”\nSubsec. (c)(3).  Pub. L. 101–508, §\u202f11801(a)(25) , struck out par. (3) “Special rules” which read as follows: “For purposes of this subsection—\n“(A) The term ‘qualifying security’ means a bond, debenture, note, or certificate or other evidence of indebtedness held by a bank on  July 11, 1969 .\n“(B) The amount treated as capital gain or loss from the sale or exchange of a qualifying security shall be determined by multiplying the amount of capital gain or loss from the sale or exchange of such security (determined without regard to this subsection) by a fraction, the numerator of which is the number of days before  July 12, 1969 , that such security was held by the bank, and the denominator of which is the number of days the security was held by the bank.”\nSubsec. (c)(4).  Pub. L. 101–508, §\u202f11801(a)(25) , struck out par. (4) “Transitional rule for banks” which read as follows: “In the case of a corporation which would be a bank except for the fact that it is a foreign corporation, the net gain, if any, for the taxable year on sales and exchanges described in paragraph (1) shall be considered as gain from the sale or exchange of a capital asset to the extent such net gain does not exceed the portion of any capital loss carryover to such taxable year which is attributable to capital losses on sales or exchanges described in paragraph (1) for a taxable year beginning before  July 12, 1969 . For purposes of the preceding sentence, the portion of a net capital loss for a taxable year which is attributable to capital losses on sales or exchanges described in paragraph (1) is the amount of the net capital loss on such sales or exchanges for such taxable year (but not in excess of the net capital loss for such taxable year).”\nSubsec. (c)(5).  Pub. L. 101–508, §\u202f11801(c)(11)(B) , redesignated par. (5) as (2).\n1988—Subsec. (a).  Pub. L. 100–647  substituted “subsections (a) and (b) of section 166” for “subsections (a), (b), and (c) of section 166”.\n1986—Subsec. (c)(1).  Pub. L. 99–514, §\u202f901(d)(3)(A) , substituted “referred to in paragraph (5)” for “to which section 585, 586, or 593 applies”.\nPub. L. 99–514, §\u202f671(b)(4) , inserted “For purposes of the preceding sentence, any regular or residual interest in a REMIC shall be treated as an evidence of indebtedness.”\nSubsec. (c)(5).  Pub. L. 99–514, §\u202f901(d)(3)(B) , added par. (5).\n1984—Subsec. (c)(2).  Pub. L. 98–369  substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1976—Subsec. (c)(2).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(G) , (2), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1044(a) , added par. (4).\n1969— Pub. L. 91–172, §\u202f433(c) , substituted “Bad debts, losses, and gains with respect to securities held by financial institutions” for “Bad debt and loss deduction with respect to securities held by banks” in section catchline.\nSubsec. (c).  Pub. L. 91–172, §\u202f433(a) , redesignated existing provisions as par. (1), inserted reference to sections 585, 586 and 593, and added pars. (2) and (3).\n1958—Subsec. (c).  Pub. L. 85–866  struck out “with interest coupons or in registered form,” before “exceed the gains”.\nAmendment by  Pub. L. 108–357  effective  Jan. 1, 2005 , with exception for any FASIT in existence on  Oct. 22, 2004 , to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance, see  section 835(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 104–188  effective  Sept. 1, 1997 , see  section 1621(d) of Pub. L. 104–188 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 671(b)(4) of Pub. L. 99–514  effective  Jan. 1, 1987 , see  section 675(a) of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 860A of this title .\nAmendment by  section 901(d)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 94–455, title X, §\u202f1044(b) ,  Oct. 4, 1976 ,  90 Stat. 1643 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  July 11, 1969 . \n \n “(2)  If the refund or credit of any overpayment attributable to the application of the amendment made by subsection (a) to any taxable year is otherwise prevented by the operation of any law or rule of law (other than section 7122 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], relating to compromises) on the day which is one year after the date of the enactment of this Act [ Oct. 4, 1976 ], such credit or refund shall be nevertheless allowed or made if claim therefor is filed on or before such day.”\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 91–172, title IV, §\u202f433(d) ,  Dec. 30, 1969 ,  83 Stat. 624 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1243 of this title ] shall apply to taxable years beginning after  July 11, 1969 . \n \n “(2)   Election for small business investment companies and business development corporations .— Notwithstanding paragraph (1), in the case of a financial institution described in section 586(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the amendments made by this section [amending this section and  section 1243 of this title ] shall not apply for its taxable years beginning after  July 11, 1969 , and before  July 11, 1974 , unless the taxpayer so elects at such time and in such manner as shall be prescribed by the Secretary of the Treasury or his delegate. Such election shall be irrevocable and shall apply to all such taxable years.”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 202 , related to deductions by certain taxpayers of dividends paid to the United States or any instrumentality thereof exempt from Federal income taxes on the preferred stock of the corporation owned by the United States or such instrumentality.\nRepeal effective with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS'},
  'content': 'A common trust fund shall not be subject to taxation under this chapter and for purposes of this chapter shall not be considered a corporation.\nNo gain or loss shall be realized by the common trust fund by the admission or withdrawal of a participant. The admission of a participant shall be treated with respect to the participant as the purchase of, or an exchange for, the participating interest. The withdrawal of any participating interest by a participant shall be treated as a sale or exchange of such interest by the participant.\nIf the taxable year of the common trust fund is different from that of a participant, the inclusions with respect to the taxable income of the common trust fund, in computing the taxable income of the participant for its taxable year, shall be based upon the taxable income of the common trust fund for any taxable year of the common trust fund ending within or with the taxable year of the participant.\nThe benefit of the deduction for net operating losses provided by section 172 shall not be allowed to a common trust fund, but shall be allowed to the participants in the common trust fund under regulations prescribed by the Secretary.\nThe basis of any asset received by a regulated investment company in a transfer referred to in paragraph (1)(A) shall be the same as it would be in the hands of the common trust fund.\nThe basis of the stock which is received in an exchange referred to in paragraph (1)(B) shall be the same as that of the property exchanged. If stock in more than one regulated investment company is received in such exchange, the basis determined under the preceding sentence shall be allocated among the stock in each such company on the basis of respective fair market values.\nIn determining whether the transfer referred to in paragraph (1)(A) is in exchange solely for stock in one or more regulated investment companies, the assumption by any such company of a liability of the common trust fund shall be disregarded.\nFor purposes of clause (i), the term “assumed liabilities” means any liability of the common trust fund assumed by any regulated investment company in connection with the transfer referred to in paragraph (1)(A).\nFor purposes of this paragraph, in determining the amount of any liability assumed, the rules of section 357(d) shall apply.\nThis subsection shall not apply to any common trust fund which would not meet the requirements of section 368(a)(2)(F)(ii) if it were a corporation. For purposes of the preceding sentence, Government securities shall not be treated as securities of an issuer in applying the 25-percent and 50-percent test and such securities shall not be excluded for purposes of determining total assets under clause (iv) of section 368(a)(2)(F).\nFor purposes of this subtitle, the taxable year of any common trust fund shall be the calendar year.\n2003—Subsec. (c).  Pub. L. 108–27  inserted concluding provisions.\n1999—Subsec. (h)(3)(A).  Pub. L. 106–36, §\u202f3001(c)(1)(A) , struck out “,\u2000and the fact that any property transferred by the common trust fund is subject to a liability,” before “shall be disregarded”.\nSubsec. (h)(3)(B)(ii).  Pub. L. 106–36, §\u202f3001(c)(1)(B) , added cl. (ii) and struck out heading and text of former cl. (ii). Text read as follows: “For purposes of clause (i), the term ‘assumed liabilities’ means the aggregate of—\n“(I) any liability of the common trust fund assumed by any regulated investment company in connection with the transfer referred to in paragraph (1)(A), and\n“(II) any liability to which property so transferred is subject.”\nSubsec. (h)(3)(C).  Pub. L. 106–36, §\u202f3001(c)(1)(B) , added subpar. (C).\n1996—Subsecs. (h), (i).  Pub. L. 104–188  added subsec. (h) and redesignated former subsec. (h) as (i).\n1988—Subsec. (h).  Pub. L. 100–647  added subsec. (h).\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f612(b)(2)(B) , substituted “1 year” for “6 months” wherever appearing in pars. (1) and (2).\nPub. L. 99–514, §\u202f612(b)(2)(A) , amended subsec. (c) generally, restating subpars. (A) to (C) of former par. (1) as pars. (1) to (3) and striking out former par. (2) which read as follows: “The proportionate share of each participant in the amount of dividends or interest received by the common trust fund and to which section 116 or 128 applies shall be considered for purposes of such section as having been received by such participant.”\n1984—Subsec. (c)(1)(A), (B).  Pub. L. 98–369  substituted “6 months” for “1 year”, wherever appearing, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1983—Subsec. (c)(2).  Pub. L. 97–448  reenacted par. (2) without change.\n1981—Subsec. (c)(2).  Pub. L. 97–34, §\u202f301(b)(6)(A) , inserted reference to “interest” in heading and text, which continued the amendment made by  Pub. L. 96–223 .\nPub. L. 97–34, §\u202f301(b)(3) , inserted “or 128” after “section 116”.\n1980—Subsec. (c)(2).  Pub. L. 96–223  inserted “or interest” after “dividends” in heading and text.\n1977—Subsec. (d)(4).  Pub. L. 95–30  struck out par. (4) relating to standard deduction.\n1976—Subsec. (a).  Pub. L. 94–414  inserted provision relating to treatment of two or more bank members of same affiliated group.\nSubsec. (a)(1).  Pub. L. 94–455, §\u202f2138 , designated existing provisions relating to trustee, executor, administrator and guardian as subpar. (A) and added subpar. (B).\nSubsec. (c)(1)(A), (B).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year” wherever appearing.\nPub. L. 94–455, §\u202f1402(b)(1)(H) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1901(b)(1)(G) , struck out provisions relating to partially tax exempt interest and election of a common trust fund to amortize premiums on bonds and other obligations.\nSubsec. (e).  Pub. L. 94–455, §\u202f2131(d) , inserted “The admission of a participant shall be treated with respect to the participant as the purchase of, or exchange for, the participating interest”.\nSubsec. (g).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1964—Subsec. (c)(2).  Pub. L. 88–272  struck out “section 34 or” before “section 116 applies”.\n1962—Subsec. (a)(2).  Pub. L. 87–722  inserted “or the Comptroller of the Currency” after “the Board of Governors of the Federal Reserve System”.\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 106–36  applicable to transfers after  Oct. 18, 1998 , see  section 3001(e) of Pub. L. 106–36 , set out as a note under  section 351 of this title .\nPub. L. 104–188, title I, §\u202f1805(b) ,  Aug. 20, 1996 ,  110 Stat. 1895 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transfers after  December 31, 1995 .”\nPub. L. 100–647, title I, §\u202f1008(e)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3440 , provided that:  \n “The amendment made by subparagraph (A) [amending this section] shall take effect as if included in the amendments made by section 806 of the Reform Act [ Pub. L. 99–514 ], except that section 806(e)(1) [set out as a note under  section 1378 of this title ] shall be applied by substituting ‘ December 31, 1987 ’ for ‘ December 31, 1986 ’. For purposes of section 806(e)(2) of the Reform Act [set out as a note under  section 1378 of this title ]— \n “(i)  a participant in a common trust fund shall be treated in the same manner as a partner, and \n \n “(ii)  subparagraph (C) thereof shall be applied by substituting ‘ December 31, 1987 ’ for ‘ December 31, 1986 ’ and as if it did not contain the election to include all income in the short taxable year.”\nPub. L. 99–514, title VI, §\u202f612(b)(2)(B) ,  Oct. 22, 1986 ,  100 Stat. 2250 , provided that:  “If the amendments made by section 1001 of the Tax Reform Act of 1984 [ Pub. L. 98–369 , amending this section and sections 166, 341, 402, 403, 423, 582, 631, 642, 702, 818, 852, 856, 857, 1222, 1223, 1231, 1232, 1233, 1234, 1235, 1246, 1247, and 1248 of this title] cease to apply [see Effective Date of 1984 Amendment note below], effective with respect to property to which such amendments do not apply, subsection (c) of section 584 is amended by striking out ‘6 months’ each place it appears and inserting in lieu thereof ‘1 year’.”\nAmendment by  section 612(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as a note under  section 301 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 301(b)(3) of Pub. L. 97–34  applicable to taxable years ending after  Sept. 30, 1981 , and amendment by  section 301(b)(6)(A) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 301(d) of Pub. L. 97–34 , set out as a note under  section 265 of this title .\nAmendment by  Pub. L. 96–223  applicable with respect to taxable years beginning after  Dec. 31, 1980 , and before  Jan. 1, 1982 , see  section 404(c) of Pub. L. 96–223 , set out as a note under  section 265 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title XXI, §\u202f2131(f)(6) ,  Oct. 4, 1976 ,  90 Stat. 1925 , provided that:  “The amendments made by subsections (d) and (e) [amending this section and  section 683 of this title ] shall take effect on  April 8, 1976 , in taxable years ending on or after such date.”\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by  section 1901(b)(1)(G) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .\nPub. L. 94–414, §\u202f2 ,  Sept. 17, 1976 ,  90 Stat. 1273 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nAmendment by  Pub. L. 88–272  applicable with respect to dividends received after  Dec. 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS'},
  'content': 'Except as provided in subsection (c), a bank shall be allowed a deduction for a reasonable addition to a reserve for bad debts. Such deduction shall be in lieu of any deduction under section 166(a).\nThe term “bank” means any bank (as defined in section 581).\nThe term “bank” also includes any corporation to which subparagraph (A) would apply except for the fact that it is a foreign corporation. In the case of any such foreign corporation, this section shall apply only with respect to loans outstanding the interest on which is effectively connected with the conduct of a banking business within the United States.\nFor purposes of subsection (a), the reasonable addition to the reserve for bad debts of any financial institution to which this section applies shall be an amount determined by the taxpayer which shall not exceed the addition to the reserve for losses on loans determined under the experience method as provided in paragraph (2).\nThe Secretary shall define the term loan and prescribe such regulations as may be necessary to carry out the purposes of this section.\nIn the case of a large bank, this section shall not apply (and no deduction shall be allowed under any other provision of this subtitle for any addition to a reserve for bad debts).\nClause (i) shall not apply to the 1st taxable year referred to in subparagraph (A)(iii)(I) if the taxpayer elects a higher percentage in accordance with such subparagraph.\nFor purposes of clause (i), the term “financially troubled bank” means any bank if, for the taxable year, the nonperforming loan percentage of such bank exceeds 75 percent.\nThe term “nonperforming loan” means any loan which is considered to be nonperforming by the primary Federal regulatory agency with respect to the bank.\nThe term “equity” means the equity of the bank as determined for Federal regulatory purposes.\nFor purposes of applying section 6655(e)(2)(A)(i) with respect to any installment, the determination under subparagraph (B) of whether an adjustment is required to be taken into account under subparagraph (A) shall be made as of the last day prescribed for payment of such installment.\nThe term “parent-subsidiary controlled group” means any controlled group of corporations described in section 1563(a)(1). In determining the average adjusted bases of assets held by such a group, interests held by one member of such group in another member of such group shall be disregarded.\nThe term “disqualification year” means, with respect to any bank, the 1st taxable year beginning after  December 31, 1986 , for which such bank was a large bank if such bank maintained a reserve for bad debts for the preceding taxable year.\nIn the case of a parent-subsidiary controlled group, any election under this section shall be made separately by each member of such group.\n1996—Subsec. (a)(2)(A).  Pub. L. 104–188  struck out “other than an organization to which section 593 applies” after “section 581)”.\n1990—Subsec. (b)(1).  Pub. L. 101–508, §\u202f11801(c)(12)(C) , substituted “shall not exceed the addition to the reserve for losses on loans determined under the experience method as provided in paragraph (2).” for “shall not exceed the greater of—\n“(A) for taxable years beginning before 1988 the addition to the reserve for losses on loans determined under the percentage method as provided in paragraph (2), or\n“(B) the addition to the reserve for losses on loans determined under the experience method as provided in paragraph (3).”\nSubsec. (b)(2).  Pub. L. 101–508, §\u202f11801(a)(26) , (c)(12)(D), redesignated par. (3) as (2) and struck out former par. (2) which related to use of percentage method for determining amount to add to reserve for bad debts.\nSubsec. (b)(3).  Pub. L. 101–508, §\u202f11801(c)(12)(D) , (E), redesignated par. (4) as (3), substituted heading for one which read: “Regulations; definition of eligible loan, etc.”, and amended text generally. Prior to amendment, text read as follows: “The Secretary shall define the terms ‘loan’ and ‘eligible loan’ and prescribe such regulations as may be necessary to carry out the purposes of this section; except that the term ‘eligible loan’ shall not include—\n“(A) a loan to a bank (as defined in section 581),\n“(B) a loan to a domestic branch of a foreign corporation to which subsection (a)(2) applies,\n“(C) a loan secured by a deposit (i) in the lending bank, or (ii) in an institution described in subparagraph (A) or (B) if the lending bank has control over withdrawal of such deposit,\n“(D) a loan to or guaranteed by the United States, a possession or instrumentality thereof, or a State or a political subdivision thereof,\n“(E) a loan evidenced by a security as defined in section 165(g)(2)(C),\n“(F) a loan of Federal funds, and\n“(G) commercial paper, including short-term promissory notes which may be purchased on the open market.” Former par. (3) redesignated (2).\nSubsec. (b)(4).  Pub. L. 101–508, §\u202f11801(c)(12)(D) , redesignated par. (4) as (3).\n1988—Subsec. (c)(3)(A)(iii)(I).  Pub. L. 100–647, §\u202f1009(a)(2)(B) , substituted “such higher percentage of such net amount as the taxpayer may elect” for “such greater amount as the taxpayer may designate”.\nSubsec. (c)(3)(B)(ii).  Pub. L. 100–647, §\u202f1009(a)(2)(C) , substituted “elects a higher percentage” for “designates an amount”.\nSubsec. (c)(4).  Pub. L. 100–647, §\u202f1009(a)(3) , inserted at end “If the amount of the reserve referred to in subparagraph (B) as of the close of any taxable year exceeds the outstanding balance (as of such time) of the loans referred to in subparagraph (B), such excess shall be included in gross income for such taxable year.”\nSubsec. (c)(5)(C).  Pub. L. 100–647, §\u202f1009(a)(2)(A) , added subpar. (C).\n1987—Subsec. (c)(3)(C).  Pub. L. 100–203  substituted “section 6655(e)(2)(A)(i)” for “section 6655(d)(3)”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f901(a)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “This section shall apply to the following financial institutions:\n“(1) any bank (as defined in section 581) other than an organization to which section 593 applies, and\n“(2) any corporation to which paragraph (1) would apply except for the fact that it is a foreign corporation, and in the case of any such foreign corporation this section shall apply only with respect to loans outstanding the interest on which is effectively connected with the conduct of a banking business within the United States.”\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f901(d)(1) , substituted “subsection (a)” for “section 166(c)”.\nSubsec. (c).  Pub. L. 99–514, §\u202f901(a)(2) , added subsec. (c).\n1981—Subsec. (b)(2).  Pub. L. 97–34  defined “allowable percentage” to mean 1.0 percent for taxable years beginning in 1982 and 0.6 percent for taxable years beginning after 1982, previously so applicable for taxable years beginning after 1981 and redefined “base year” by substituting the last taxable year beginning before 1976 for taxable years beginning after 1975 but before 1983, for the last taxable year beginning before 1976 for taxable years after 1975 but before 1982; and the last taxable year beginning before 1983 for taxable years beginning after 1982, for the last taxable year beginning before 1982 for taxable years beginning after 1981.\n1976—Subsec. (b)(3), (4).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–203, title X, §\u202f10301(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–429 , provided that:  “The amendments made by this section [amending this section and sections 6201, 6425, 6601, 6651, and 6655 of this title and repealing  section 6154 of this title ] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nPub. L. 97–34, title II, §\u202f267(b) ,  Aug. 13, 1981 ,  95 Stat. 267 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after 1981.”\nPub. L. 91–172, title IV, §\u202f431(d) ,  Dec. 30, 1969 ,  83 Stat. 620 , provided that:  “The amendments made by subsections (a) [enacting this section and  section 586 of this title ] and (c) [amending  section 166 of this title ] shall apply to taxable years beginning after  July 11, 1969 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS'},
  'content': 'Section, added  Pub. L. 91–172, title IV, §\u202f431(a) ,  Dec. 30, 1969 ,  83 Stat. 618 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to reserves for losses on loans of small business investment companies, etc.\nRepeal applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 166 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'In the case of mutual savings banks, cooperative banks, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, there shall be allowed as deductions in computing taxable income amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends or interest on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw.\n1981— Pub. L. 97–34  designated existing provisions as subsec. (a), inserted heading “In general”, and added subsec. (b).\n1962— Pub. L. 87–834  included other savings institutions chartered and supervised as savings and loan or similar associations under Federal or State law, and authorized amounts paid as interest as a deduction.\nPub. L. 97–34, title II, §\u202f246(d) ,  Aug. 13, 1981 ,  95 Stat. 256 , provided that:  “The amendments made by section 245 [amending this section and  section 593 of this title ] shall apply with respect to taxable years ending after the date of the enactment of this Act [ Aug. 13, 1981 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 205 , authorized a deduction by mutual savings banks for repayment of loans made before  Sept. 1, 1951 , by the United States or any agency or instrumentality thereof, or any mutual fund established under the authority of the laws of any State.\nRepeal effective with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'This section shall apply to an association or bank referred to in paragraph (1) only if it meets the requirements of section 7701(a)(19)(C).\nSubject to subparagraphs (B) and (C), the amount determined under this paragraph for the taxable year shall be an amount equal to 8 percent of the taxable income for such year.\nThe amount determined under subparagraph (A) shall be reduced (but not below 0) by the amount determined under paragraph (1)(A).\nThe amount determined under this paragraph shall not exceed the amount necessary to increase the balance at the close of the taxable year of the reserve for losses on qualifying real property loans to 6 percent of such loans outstanding at such time.\nThe amount determined under this paragraph for the taxable year shall be computed in the same manner as is provided with respect to additions to the reserves for losses on loans of banks under section 585(b)(2).\nEach taxpayer described in subsection (a) which uses the reserve method of accounting for bad debts shall establish and maintain a reserve for losses on qualifying real property loans, a reserve for losses on nonqualifying loans, and a supplemental reserve for losses on loans. For purposes of this title, such reserves shall be treated as reserves for bad debts, but no deduction shall be allowed for any addition to the supplemental reserve for losses on loans.\nNotwithstanding the second sentence of paragraph (1), any amount allocated pursuant to paragraph (5) (as in effect immediately before the enactment of the Tax Reform Act of 1976) during a taxable year beginning before  January 1, 1977 , to the reserve for losses on qualifying real property loans out of the surplus, undivided profits, and bad debt reserves (determined as of  December 31, 1962 ) attributable to the period before the first taxable year beginning after  December 31, 1951 , shall not be treated as a reserve for bad debts for any purpose other than determining the amount referred to in subsection (b)(1)(B), and for such purpose such amount shall be treated as remaining in such reserve.\nAny debt becoming worthless or partially worthless in respect of a qualifying real property loan shall be charged to the reserve for losses on such loans, and any debt becoming worthless or partially worthless in respect of a nonqualifying loan shall be charged to the reserve for losses on nonqualifying loans; except that any such debt may, at the election of the taxpayer, be charged in whole or in part to the supplemental reserve for losses on loans.\nThe term “nonqualifying loan” means any loan which is not a qualifying real property loan.\nThe term “loan” means debt, as the term “debt” is used in section 166.\nA regular or residual interest in a REMIC shall be treated as a qualifying real property loan; except that, if less than 95 percent of the assets of such REMIC are qualifying real property loans (determined as if the taxpayer held the assets of the REMIC), such interest shall be so treated only in the proportion which the assets of such REMIC consist of such loans. For purposes of determining whether any interest in a REMIC qualifies under the preceding sentence, any interest in another REMIC held by such REMIC shall be treated as a qualifying real property loan under principles similar to the principles of the preceding sentence, except that if such REMIC’s are part of a tiered structure, they shall be treated as 1 REMIC for purposes of this paragraph.\nIf any distribution is treated under paragraph (1) as having been made out of the reserves described in subparagraphs (B) and (C) of such paragraph, the amount charged against such reserve shall be the amount which, when reduced by the amount of tax imposed under this chapter and attributable to the inclusion of such amount in gross income, is equal to the amount of such distribution; and the amount so charged against such reserve shall be included in gross income of the taxpayer.\nSubsections (a), (b), (c), and (d) shall not apply to any taxable year beginning after  December 31, 1995 .\nIf, during any taxable year beginning after  December 31, 1995 , a taxpayer to which paragraph (1) applied is not a bank (as defined in section 581), paragraph (1) shall apply to the reserves described in paragraph (2)(A)(ii) and the supplemental reserve; except that such reserves shall be taken into account ratably over the 6-taxable year period beginning with such taxable year.\nA taxpayer meets the residential loan requirement of this subparagraph for any taxable year if the principal amount of the residential loans made by the taxpayer during such year is not less than the base amount for such year.\nFor purposes of this paragraph, the term “residential loan” means any loan described in clause (v) of section 7701(a)(19)(C) but only if such loan is incurred in acquiring, constructing, or improving the property described in such clause.\nFor purposes of subparagraph (B), the base amount is the average of the principal amounts of the residential loans made by the taxpayer during the 6 most recent taxable years beginning on or before  December 31, 1995 . At the election of the taxpayer who made such loans during each of such 6 taxable years, the preceding sentence shall be applied without regard to the taxable year in which such principal amount was the highest and the taxable year in such principal amount was the lowest. Such an election may be made only for the first taxable year beginning after such date, and, if made for such taxable year, shall apply to the succeeding taxable year unless revoked with the consent of the Secretary.\nIn the case of a taxpayer which is a member of any controlled group of corporations described in section 1563(a)(1), subparagraph (B) shall be applied with respect to such group.\nFor purposes of determining the net amount of adjustments referred to in section 585(c)(3)(A)(iii), there shall be taken into account only the excess (if any) of the reserve for bad debts as of the close of the last taxable year before the disqualification year over the balance taken into account by such taxpayer under paragraph (2)(A)(ii) of this subsection.\nThe balance taken into account by a taxpayer under paragraph (2)(A)(ii) of this subsection and the supplemental reserve shall be treated as items described in section 381(c).\nThe Secretary shall prescribe such regulations as may be necessary to carry out this subsection and subsection (e), including regulations providing for the application of such subsections in the case of acquisitions, mergers, spin-offs, and other reorganizations.\nThe Tax Reform Act of 1976, referred to in subsec. (c)(2), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 , which was enacted  Oct. 4, 1976 . For complete classification of this Act to the Code, see Tables.\nSection 5(e) of the Federal Deposit Insurance Act, referred to in subsec. (e)(1), is classified to  section 1815(e) of Title 12 , Banks and Banking.\n2018—Subsec. (b)(2)(D)(iv).  Pub. L. 115–141  struck out “(determined without regard to section 596)” after “received deduction”.\n1997—Subsec. (e)(1)(A).  Pub. L. 105–34  inserted “(and, in the case of an S corporation, the accumulated adjustments account, as defined in section 1368(e)(1))” after “1951,”.\n1996—Subsec. (b)(1)(A), (3).  Pub. L. 104–188, §\u202f1704(t)(51) , provided that the amendment made by  section 11801(c)(12)(F) of Pub. L. 101–508  shall be applied as if “and (3)” appeared instead of “and (E)”. See 1990 Amendment note below.\nSubsec. (e)(1).  Pub. L. 104–188, §\u202f1616(b)(7)(A) , substituted “by a taxpayer having a balance described in subsection (g)(2)(A)(ii)” for “by a domestic building and loan association or an institution that is treated as a mutual savings bank under section 591(b)” in introductory provisions.\nPub. L. 104–188, §\u202f1616(b)(7)(C) –(E), in closing provisions, substituted “a taxpayer having a balance described in subsection (g)(2)(A)(ii)” for “the association or an institution that is treated as a mutual savings bank under section 591(b)” after “complete liquidation of” and for “an association” after “an interest in” and inserted at end “This paragraph shall not apply to any distribution of all of the stock of a bank (as defined in section 581) to another corporation if, immediately after the distribution, such bank and such other corporation are members of the same affiliated group (as defined in section 1504) and the provisions of section 5(e) of the Federal Deposit Insurance Act (as in effect on  December 31, 1995 ) or similar provisions are in effect.”\nSubsec. (e)(1)(B).  Pub. L. 104–188, §\u202f1616(b)(7)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “then out of the reserve for losses on qualifying real property loans, to the extent additions to such reserve exceed the additions which would have been allowed under subsection (b)(3),”.\nSubsecs. (f), (g).  Pub. L. 104–188, §\u202f1616(a) , added subsecs. (f) and (g).\n1990—Subsec. (b).  Pub. L. 101–508, §\u202f11801(c)(12)(F) , which directed the amendment of pars. (1)(A) and (E) by substituting “section 585(b)(2)” for “section 585(b)(3)”, was executed to pars. (1)(A) and (3). See 1996 Amendment note above.\n1989—Subsec. (e)(1).  Pub. L. 101–73  amended last sentence generally. Prior to amendment, last sentence read as follows: “This paragraph shall not apply to any transaction to which section 381 (relating to carryovers in certain corporate acquisitions) applies, or to any distribution to the Federal Savings and Loan Insurance Corporation in redemption of an interest in an association, if such interest was originally received by the Federal Savings and Loan Insurance Corporation in exchange for financial assistance pursuant to section 406(f) of the National Housing Act (12 U.S.C. sec. 1729(f)).”\n1988—Subsec. (b)(2)(D)(v).  Pub. L. 100–647, §\u202f1003(c)(3) , added cl. (v).\nSubsec. (d)(4).  Pub. L. 100–647, §\u202f1006(t)(25)(B) , inserted at end “For purposes of determining whether any interest in a REMIC qualifies under the preceding sentence, any interest in another REMIC held by such REMIC shall be treated as a qualifying real property loan under principles similar to the principles of the preceding sentence, except that if such REMIC’s are part of a tiered structure, they shall be treated as 1 REMIC for purposes of this paragraph.”\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f901(b)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “This section shall apply to any mutual savings bank, domestic building and loan association, or cooperative bank without capital stock organized and operated for mutual purposes and without profit.”\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f901(d)(2)(A) , (B), in introductory provisions, substituted “subsection (a)” for “section 166(c)” and in subpar. (B), substituted “paragraph (2) or (3), whichever is the larger” for “paragraph (2), (3), or (4), whichever amount is the largest” in introductory provisions and “paragraph (3)” for “paragraph (4)” in cl. (i).\nSubsec. (b)(2)(A).  Pub. L. 99–514, §\u202f901(b)(2)(A) , added subpar. (A) and struck out former subpar. (A) which provided that subject to subpars. (B), (C), and (D), the amount determined under par. (2) was to be an amount equal to applicable percentage of taxable income for such year determined under a table which fixed specific percentages for taxable years 1976, 1977, 1978, and 1979 or thereafter.\nSubpar. (b)(2)(B).  Pub. L. 99–514, §\u202f901(b)(2)(A) , added subpar. (B), which incorporated provisions of former subpar. (C), relating to reducing amounts referred to in par. (1)(A), and struck out former subpar. (B) which provided for reduction of applicable percentage in certain cases.\nSubsec. (b)(2)(C).  Pub. L. 99–514, §\u202f901(b)(2)(A) , (B), redesignated former subpar. (D) as (C) and struck out former subpar. (C) which related to reduction for amounts referred to in par. (1)(A). See par. (1)(B).\nSubsec. (b)(2)(D).  Pub. L. 99–514, §\u202f901(b)(2)(B) , (d)(2)(B), redesignated subpar. (E) as (D) and substituted in cl. (iv) “8 percent” for “the applicable percentage (determined under subparagraphs (A) and (B))”. Former subpar. (D) redesignated (C).\nSubsec. (b)(2)(E).  Pub. L. 99–514, §\u202f901(b)(2)(B) , redesignated subpar. (E) as (D).\nPub. L. 99–514, §\u202f311(b)(2) , redesignated former cl. (v) as (iv), and struck out former cl. (iv) which read as follows: “by excluding from gross income an amount equal to the lesser of  18 ⁄ 46  of the net long-term capital gain for the taxable year or  18 ⁄ 46  of the net long-term capital gain for the taxable year from the sale or exchange of property other than property described in clause (iii), and”.\nSubsec. (b)(3), (4).  Pub. L. 99–514, §\u202f901(b)(3) , redesignated par. (4) as (3) and struck out former par. (3) which read as follows: “The amount determined under this paragraph to be a reasonable addition to the reserve for losses on qualifying real property loans shall be computed in the same manner as is provided with respect to additions to the reserves for losses on loans of banks under section 585(b)(2), reduced by the amount referred to in paragraph (1)(A) for the taxable year.”\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f901(b)(3) , struck out par. (5) which read as follows: “For purposes of paragraph (3), the amount deemed to be the balance of the reserve for losses on loans at the beginning of the taxable year shall be the total of the balances at such time of the reserve for losses on nonqualifying loans, the reserve for losses on qualifying real property loans, and the supplemental reserve for losses on loans.”\nSubsec. (d)(4).  Pub. L. 99–514, §\u202f671(b)(2) , added par. (4).\nSubsec. (e)(1)(B).  Pub. L. 99–514, §\u202f901(d)(2)(C) , substituted “subsection (b)(3)” for “subsection (B)(4)”.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f245(c)(1) , struck out “not having capital stock represented by shares” after “mutual savings bank”.\nSubsec. (b)(2)(B).  Pub. L. 97–34, §\u202f245(b)(1) , inserted “which is not described in section 591(b)” after “mutual savings bank” in cls. (i) and (ii) and in last sentence.\nSubsec. (b)(2)(C).  Pub. L. 97–34, §\u202f245(b)(2) , inserted “which are not described in section 591(b)” after “mutual savings banks” in cl. (i).\nSubsec. (e)(1).  Pub. L. 97–34, §\u202f245(c)(2) , inserted “or an institution that is treated as a mutual savings bank under section 591(b)” after “domestic building and loan association” and “liquidation of the association”.\nPub. L. 97–34, §\u202f243 , inserted provisions making par. (1) inapplicable to any distribution to the Federal Savings and Loan Insurance Corporation in redemption of an interest in an association, if such interest was originally received by the Corporation in exchange for financial assistance pursuant to  section 1729(f) of title 12 .\n1980—Subsec. (b)(2)(E)(iv).  Pub. L. 96–222  substituted “ 18 ⁄ 46 ” for “⅜” in two places.\n1976—Subsec. (b)(2)(A).  Pub. L. 94–455, §\u202f1901(a)(84)(A) , struck from the percentage table the years 1969 to 1975, inclusive.\nSubsec. (b)(2)(E)(i).  Pub. L. 94–455, §\u202f1901(a)(84)(D) , substituted “subsection (e)” for “subsection (f)” after “by reason of”.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1901(a)(84)(B) , added par. (2). Former par. (2), relating to allocation of pre-1963 reserves for bad debts, was struck out.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f1901(a)(84)(B) , redesignated par. (6) as par. (3). Former par. (3), relating to the method of allocation to reserves for bad debts, was struck out.\nSubsec. (c)(4), (5).  Pub. L. 94–455, §\u202f1901(a)(84)(B) , struck out par. (4) which defined “pre-1963 reserves”, and struck out par. (5) which related to certain pre-1952 surplus.\nSubsec. (c)(6).  Pub. L. 94–455, §\u202f1901(a)(84)(B) , redesignated par. (6) as (3).\nSubsecs. (d) to (f).  Pub. L. 94–455, §\u202f1901(a)(84)(C) , struck out subsec. (d) relating to the determination of taxable income for taxpayer which uses the reserve method of accounting for bad debts for taxable years beginning in 1962 and ending in 1963, and redesignated subsecs. (e) and (f) as (d) and (e), respectively.\nSubsecs. (e), (f).  Pub. L. 94–455, §\u202f1901(a)(84)(C) , redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).\n1969—Subsec. (b)(1)(A).  Pub. L. 91–172, §\u202f432(a)(1) , inserted provisions for the method of computing the amount of the reasonable addition to the reserve for losses on nonqualifying loans.\nSubsec. (b)(2).  Pub. L. 91–172, §\u202f432(a)(2) , substituted a table of applicable percentages of the taxable income for each year up to 1979 and thereafter for the amount in excess of 60 percent over the amount referred to in former subsec. (b)(1)(A), transferred the remaining provisions of former subsec. (b)(2) to subpart (D), and added subpars. (B) to (E).\nSubsec. (b)(3).  Pub. L. 91–172, §\u202f432(a)(2) , substantially changed method of computation of the amount by conforming it to the method of determining the additions to the reserves for losses on loans of banks under section 585(b)(2).\nSubsec. (b)(4).  Pub. L. 91–172, §\u202f432(a)(2) , changed method of computation of the amount by conforming it to the method of determining the additions to the reserves for losses on loans of banks under section 585(b)(3).\nSubsec. (b)(5).  Pub. L. 91–172, §\u202f432(a)(2) , substituted provisions relating to determination of reserve for percentage method for provisions relating to limitation in case of certain domestic building and loan associations.\nSubsec. (f).  Pub. L. 91–172, §\u202f432(b) , excepted the application of par. (1) to any transaction to which  section 381 of this title  applied.\n1962— Pub. L. 87–834  amended section generally. Prior to such amendment, section read as follows:\n“§\u202f593. Additions to reserve for bad debts\n“In the case of a mutual savings bank not having capital stock represented by shares, a domestic building and loan association, and a cooperative bank without capital stock organized and operated for mutual purposes and without profit, the reasonable addition to a reserve for bad debts under section 166(c) shall be determined with due regard to the amount of the taxpayer’s surplus or bad debt reserves existing at the close of  December 31, 1951 . In the case of a taxpayer described in the preceding sentence, the reasonable addition to a reserve for bad debts for any taxable year shall in no case be less than the amount determined by the taxpayer as the reasonable addition for such year; except that the amount determined by the taxpayer under this sentence shall not be greater than the lesser of—\n“(1) the amount of its taxable income for the taxable year, computed without regard to this section, or\n“(2) the amount by which 12 percent of the total deposits or withdrawable accounts of its depositors at the close of such year exceeds the sum of its surplus, undivided profits, and reserves at the beginning of the taxable year.”\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nPub. L. 104–188, title I, §\u202f1616(c) ,  Aug. 20, 1996 ,  110 Stat. 1857 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 50, 52, 57, 246, 291, 585, 860E, 992, 1038, 1042, 1277, and 1361 of this title and repealing sections 595 and 596 of this title] shall apply to taxable years beginning after  December 31, 1995 . \n \n “(2)   Subsection  (b)(7)(B).— The amendments made by subsection (b)(7)(B) [amending this section] shall not apply to any distribution with respect to preferred stock if— “(A)  such stock is outstanding at all times after  October 31, 1995 , and before the distribution, and \n \n “(B)  such distribution is made before the date which is 1 year after the date of the enactment of this Act [ Aug. 20, 1996 ] (or, in the case of stock which may be redeemed, if later, the date which is 30 days after the earliest date that such stock may be redeemed). \n \n \n “(3)   Subsection  (b)(8).— The amendment made by subsection (b)(8) [repealing  section 595 of this title ] shall apply to property acquired in taxable years beginning after  December 31, 1995 . \n \n “(4)   Subsection  (b)(10).— The amendments made by subsection (b)(10) [amending  section 860E of this title ] shall not apply to any residual interest held by a taxpayer if such interest has been held by such taxpayer at all times after  October 31, 1995 .”\nPub. L. 101–73, title XIV, §\u202f1401(c)(6) ,  Aug. 9, 1989 ,  103 Stat. 550 , provided that:  “The amendment made by subsection (b)(3) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 9, 1989 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title III, §\u202f311(c) ,  Oct. 22, 1986 ,  100 Stat. 2219 , as amended by  Pub. L. 100–647, title I, §\u202f1003(c)(2) ,  Nov. 10, 1988 ,  102 Stat. 3384 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and sections 631, 852, 1201, and 1445 of this title] shall apply to taxable years beginning after  December 31, 1986 ; except that the amendment made by subsection (b)(4) [amending  section 1445 of this title ] shall apply to payments made after  December 31, 1986 .”\nAmendment by  section 671(b)(2) of Pub. L. 99–514  effective  Jan. 1, 1987 , see  section 675(a) of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 860A of this title .\nAmendment by section 901(b)(1)–(3), (d)(2) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nPub. L. 97–34, title II, §\u202f246(b) ,  Aug. 13, 1981 ,  95 Stat. 256 , provided that:  “The amendment made by section 243 [amending this section] shall apply to any distribution made on or after  January 1, 1981 .”\nAmendment by section 245(b), (c) of  Pub. L. 97–34  applicable with respect to taxable years ending after  Aug. 13, 1981 , see  section 246(d) of Pub. L. 97–34 , set out as a note under  section 591 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–172, title IV, §\u202f432(e) ,  Dec. 30, 1969 ,  83 Stat. 623 , provided that:  “The amendments made by this section [amending this section and  section 7701 of this title ] shall be effective for taxable years beginning after  July 11, 1969 .”\nPub. L. 87–834, §\u202f6(g)(1) ,  Oct. 16, 1962 ,  76 Stat. 984 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1962 , except that section 593(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to distributions after  December 31, 1962 , in taxable years ending after such date.”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFederal Savings and Loan Insurance Corporation abolished and its functions transferred, see sections 401 to 406 of  Pub. L. 101–73 , set out as a note under  section 1437 of Title 12 , Banks and Banking.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'Subsection (a) shall apply only if the life insurance department would, if it were treated as a separate corporation, qualify as a life insurance company under section 816.\n2017—Subsec. (a).  Pub. L. 115–97  substituted “tax imposed by section 11” for “taxes imposed by section 11 or section 1201(a)” in introductory provisions.\n1984—Subsec. (b).  Pub. L. 98–369  substituted “section 816” for “section 801”.\n1956—Subsec. (a)(2). Act  Mar. 13, 1956 , substituted “the income” for “the taxable income (as defined in section 803)”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note under  section 821 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'Section 595, added  Pub. L. 87–834, §\u202f6(b) ,  Oct. 16, 1962 ,  76 Stat. 982 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to foreclosure on property securing loans, including provisions relating to nonrecognition of gain or loss as result of foreclosure, character of property, basis, and regulatory authority.\nSection 596, added  Pub. L. 91–172, title IV, §\u202f434(a) ,  Dec. 30, 1969 ,  83 Stat. 624 ; amended  Pub. L. 99–514, title IX, §\u202f901(d)(4)(D) ,  Oct. 22, 1986 ,  100 Stat. 2380 , provided that in case of organization to which  section 593 of this title  applied and which computed additions to reserve for losses on loans for taxable year under  section 593(b)(2) of this title , total amount allowed under sections 243, 244, and 245 of this title for taxable year as deduction with respect to dividends received was to be reduced by amount equal to 8 percent of such total amount.\nRepeal of section 595 applicable to property acquired in taxable years beginning after  Dec. 31, 1995 , and repeal of section 596 applicable to taxable years beginning after  Dec. 31, 1995 , see section 1616(c)(1), (3) of  Pub. L. 104–188 , set out as an Effective Date of 1996 Amendment note under  section 593 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'The treatment for purposes of this chapter of any transaction in which Federal financial assistance is provided with respect to a bank or domestic building and loan association shall be determined under regulations prescribed by the Secretary.\nIn the case of any transaction not described in paragraph (1), the regulations prescribed under subsection (a) shall provide for the proper treatment of Federal financial assistance and appropriate adjustments to basis or other tax attributes in connection with such assistance.\nNo regulations prescribed under this section shall permit the utilization of any deduction (or other tax benefit) if such amount was in effect reimbursed by nontaxable Federal financial assistance.\nFor purposes of this section, the term “domestic building and loan association” has the meaning given such term by section 7701(a)(19) without regard to subparagraph (C) thereof.\nSection 406 of the National Housing Act, referred to in subsec. (c)(1), which was classified to  section 1729 of Title 12 , Banks and Banking, was repealed by  Pub. L. 101–73, title IV, §\u202f407 ,  Aug. 9, 1989 ,  103 Stat. 363 .\nSections 11(f) and 13(c) of the Federal Deposit Insurance Act, referred to in subsec. (c)(2), are classified to sections 1821(f) and 1823(c), respectively, of Title 12.\n2018—Subsec. (c)(1).  Pub. L. 115–141  struck out “or section 21A of the Federal Home Loan Bank Act” after “National Housing Act”.\n1990—Subsec. (c).  Pub. L. 101–508  substituted “For purposes of” for “The purposes of”.\n1989— Pub. L. 101–73, §\u202f1401(b)(1) , repealed amendment made by  Pub. L. 99–514, §\u202f904(b)(1) , see 1986 Amendment note below.\nPub. L. 101–73, §\u202f1401(a)(3)(A) , amended section generally, substituting present provisions for former provisions which contained section catchline that read “FSLIC or FDIC financial assistance” and which provided: in subsec. (a) for an exclusion from gross income; in subsec. (b) for no reduction in basis of assets; in subsec. (c) for a reduction of tax attributes by 50 percent of amounts excludable under subsection (a); and in subsec. (d) for a definition of “domestic building and loan association”.\nSubsec. (b)(2).  Pub. L. 101–239  substituted “in connection with such assistance” for “to reflect such treatment”.\n1988— Pub. L. 100–647, §\u202f4012(b)(2)(D)(i) , substituted “FSLIC or FDIC” for “FSLIC” in section catchline.\nSubsec. (a).  Pub. L. 100–647, §\u202f4012(b)(2)(A) , inserted at end “Gross income of a bank does not include any amount of money or other property received from the Federal Deposit Insurance Corporation pursuant to sections 13(c), 15(c)(1), and 15(c)(2) of the Federal Deposit Insurance Act ( 12 U.S.C. 1821(f)  and 1823(c)(1) and (c)(2)), regardless of whether any note or other instrument is issued in exchange therefor.”\nSubsec. (b).  Pub. L. 100–647, §\u202f4012(b)(2)(C) , substituted “association or bank” for “association”.\nSubsec. (c).  Pub. L. 100–647, §\u202f4012(c)(1) , added subsec. (c).\nSubsec. (d).  Pub. L. 100–647, §\u202f4012(b)(2)(B) , which directed amendment of section 597(b), as amended by  section 4012(c)(1) of Pub. L. 100–647 , by adding at the end thereof subsec. (d), was executed by adding subsec. (d) at the end of section 597, as amended by  section 4012(c)(1) of Pub. L. 100–647 , as the probable intent of Congress.\n1986— Pub. L. 99–514, §\u202f904(b)(1) , (c)(2)(A), as amended by  Pub. L. 100–647, title IV, §\u202f4012(a)(2) , which (applicable to transfers after  Dec. 31, 1989 , in taxable years ending after such date, with exceptions) directed repeal of this section, was repealed by  Pub. L. 101–73, §\u202f1401(b)(1) , (c)(4), eff.  Oct. 22, 1986 , and I.R.C. of 1986 applicable as if the amendments made by such section had not been enacted.\nPub. L. 101–239, title VII, §\u202f7841(e)(2) ,  Dec. 19, 1989 ,  103 Stat. 2429 , provided that:  “The amendment made by this subsection [amending this section] shall apply as if included in the amendments made by section 1401 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 [ Pub. L. 101–73 ].”\nPub. L. 101–73, title XIV, §\u202f1401(c)(3) –(5),  Aug. 9, 1989 ,  103 Stat. 550 , provided that: \n “(3)   Subsection  (a)(3).— “(A)   In general .— The amendments made by subsection (a)(3) [amending this section and repealing provisions set out below] shall apply to any amount received or accrued by the financial institution on or after  May 10, 1989 , except that such amendments shall not apply to transfers on or after such date pursuant to an acquisition to which the amendment made by subsection (a)(1) [amending  section 368 of this title ] does not apply. \n \n “(B)   Interim rule .— In the case of any payment pursuant to a transaction on or after  May 10, 1989 , and before the date on which the Secretary of the Treasury (or his delegate) takes action in exercise of his regulatory authority under section 597 of the Internal Revenue Code of 1986 (as amended by subsection (a)(3)), the taxpayer may rely on the legislative history for the amendments made by subsection (a)(3) in determining the proper treatment of such payment. \n \n \n “(4)   Subsection  (b)(1).— The provisions of subsection (b)(1) [set out below] shall take effect on the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]. \n \n “(5)   Subsection  (b)(2).— The amendment made by subsection (b)(2) [amending provisions set out below] shall take effect on the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988 [ Nov. 10, 1988 ].”\nPub. L. 100–647, title IV, §\u202f4012(b)(2)(E) ,  Nov. 10, 1988 ,  102 Stat. 3658 , provided that:  \n “The amendments made by this paragraph [amending this section] shall apply to any transfer— \n “(i)  after the date of the enactment of this Act [ Nov. 10, 1988 ], and before  January 1, 1990 , unless such transfer is pursuant to an acquisition occurring on or before such date of enactment, and \n \n “(ii)  after  December 31, 1989 , if such transfer is pursuant to an acquisition occurring after such date of enactment and before  January 1, 1990 .”\nPub. L. 100–647, title IV, §\u202f4012(c)(3) ,  Nov. 10, 1988 ,  102 Stat. 3660 , as amended by  Pub. L. 101–73, title XIV, §\u202f1401(b)(2) ,  Aug. 9, 1989 ,  103 Stat. 549 , provided that:  \n “The amendments made by this subsection [amending this section and provisions set out below] shall apply to any transfer— “(A)  after  December 31, 1988 , and before  January 1, 1990 , unless such transfer is pursuant to an acquisition occurring before  January 1, 1989 , and \n \n “(B)  after  December 31, 1989 , if such transfer is pursuant to an acquisition occurring after  December 31, 1988 , and before  January 1, 1990 . \n \n\n In the case of any bank or any institution treated as a domestic building and loan association for purposes of section 597 of the 1986 Code by reason of the amendment made by subsection (b)(2)(B), the amendments made by this subsection shall also apply to any transfer before  January 1, 1989 , to which the amendments made by subsection (b)(2) [amending this section] apply.”\nPub. L. 99–514, title IX, §\u202f904(c)(2) ,  Oct. 22, 1986 ,  100 Stat. 2385 , as amended by  Pub. L. 100–647, title IV, §\u202f4012(a)(2) , (c)(2),  Nov. 10, 1988 ,  102 Stat. 3656 , 3660, which provided that repeal of this section was to be applicable to transfers after  Dec. 31, 1989 , in taxable years ending after such date, with exceptions, and which related to clarification of treatment of amounts excluded under this section, was repealed by  Pub. L. 101–73, title XIV, §\u202f1401(a)(3)(B) , (b)(1),  Aug. 9, 1989 ,  103 Stat. 549 .\nPub. L. 97–34, title II, §\u202f246(c) ,  Aug. 13, 1981 ,  95 Stat. 256 , provided that:  “The amendment made by section 244 [enacting this section] shall apply to any payment made on or after  January 1, 1981 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFederal Savings and Loan Insurance Corporation abolished and its functions transferred, see sections 401 to 406 of  Pub. L. 101–73 , set out as a note under  section 1437 of Title 12 , Banks and Banking.\nPub. L. 101–73, title XIV, §\u202f1401(b)(1) ,  Aug. 9, 1989 ,  103 Stat. 549 , provided that:  “Section 904 of the Tax Reform Act of 1986 [ Pub. L. 99–514 , amending  section 368 of this title , repealing this section and enacting provisions set out as notes under sections 368 and 597 of this title] (other than subsection (c)(2)(B) thereof [ section 904(c)(2)(B) of Pub. L. 99–514 , formerly set out as a note above]) is hereby repealed and the Internal Revenue Code of 1986 shall be applied as if the amendments made by such section had not been enacted.”\nPub. L. 101–73, title XIV, §\u202f1401(c)(7) ,  Aug. 9, 1989 ,  103 Stat. 550 , provided that:  “Any reference to the Federal Savings and Loan Insurance Corporation in section 597 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [ Aug. 9, 1989 ]) shall be treated as including a reference to the Resolution Trust Corporation and the FSLIC Resolution Fund.”\nPub. L. 101–73, title XIV, §\u202f1403 ,  Aug. 9, 1989 ,  103 Stat. 551 , which required the Secretary of the Treasury to submit annual reports to the Senate and to the Committee on Ways and Means of the House of Representatives on transactions with respect to which Federal financial assistance subject to this section was provided, terminated, effective  May 15, 2000 , pursuant to  section 3003 of Pub. L. 104–66 , as amended, set out as a note under  section 1113 of Title 31 , Money and Finance. See, also, page 142 of House Document No. 103–7.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MUTUAL SAVINGS BANKS, ETC.'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 206 , related to a special deduction for bank affiliates.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'In the case of mines, oil and gas wells, other natural deposits, and timber, there shall be allowed as a deduction in computing taxable income a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such reasonable allowance in all cases to be made under regulations prescribed by the Secretary. For purposes of this part, the term “mines” includes deposits of waste or residue, the extraction of ores or minerals from which is treated as mining under section 613(c). In any case in which it is ascertained as a result of operations or of development work that the recoverable units are greater or less than the prior estimate thereof, then such prior estimate (but not the basis for depletion) shall be revised and the allowance under this section for subsequent taxable years shall be based on such revised estimate.\nIn the case of a lease, the deduction under this section shall be equitably apportioned between the lessor and lessee.\nIn the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant.\nIn the case of property held in trust, the deduction under this section shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each.\nIn the case of an estate, the deduction under this section shall be apportioned between the estate and the heirs, legatees, and devisees on the basis of the income of the estate allocable to each.\nFor other rules applicable to depreciation of improvements, see section 167.\n1976—Subsec. (a).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1958—Subsec. (d)(4).  Pub. L. 85–866  substituted “devisees” for “devises”.\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'Except as otherwise provided in this subchapter, the basis on which depletion is to be allowed in respect of any property shall be the adjusted basis provided in section 1011 for the purpose of determining the gain upon the sale or other disposition of such property.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property. Such allowance shall not exceed 50 percent (100 percent in the case of oil and gas properties) of the taxpayer’s taxable income from the property (computed without allowance for depletion and without any deduction under section 199A). For purposes of the preceding sentence, the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property shall be decreased by an amount equal to so much of any gain which (1) is treated under section 1245 (relating to gain from disposition of certain depreciable property) as ordinary income, and (2) is properly allocable to the property. In no case shall the allowance for depletion under section 611 be less than it would be if computed without reference to this section.\nAsbestos (if paragraph (1)(B) does not apply), brucite, coal, lignite, perlite, sodium chloride, and wollastonite.\nClay and shale used or sold for use in the manufacture of sewer pipe or brick, and clay, shale, and slate used or sold for use as sintered or burned lightweight aggregates.\nThe term “gross income from the property” means, in the case of a property other than an oil or gas well and other than a geothermal deposit, the gross income from mining.\nThe term “mining” includes not merely the extraction of the ores or minerals from the ground but also the treatment processes considered as mining described in paragraph (4) (and the treatment processes necessary or incidental thereto), and so much of the transportation of ores or minerals (whether or not by common carrier) from the point of extraction from the ground to the plants or mills in which such treatment processes are applied thereto as is not in excess of 50 miles unless the Secretary finds that the physical and other requirements are such that the ore or mineral must be transported a greater distance to such plants or mills.\nThe term “extraction of the ores or minerals from the ground” includes the extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. The preceding sentence shall not apply to any such extraction of the mineral or ore by a purchaser of such waste or residue or of the rights to extract ores or minerals therefrom.\nUnless such processes are otherwise provided for in paragraph (4) (or are necessary or incidental to processes so provided for), the following treatment processes shall not be considered as “mining”: electrolytic deposition, roasting, calcining, thermal or electric smelting, refining, polishing, fine pulverization, blending with other materials, treatment effecting a chemical change, thermal action, and molding or shaping.\nExcept as provided in section 613A, in the case of any oil or gas well, the allowance for depletion shall be computed without reference to this section.\nFor purposes of paragraph (1), the term “geothermal deposit” means a geothermal reservoir consisting of natural heat which is stored in rocks or in an aqueous liquid or vapor (whether or not under pressure). Such a deposit shall in no case be treated as a gas well for purposes of this section or section 613A, and this section shall not apply to a geothermal deposit which is located outside the United States or its possessions.\nIn the case of any geothermal deposit, the term “gross income from the property” shall, for purposes of this section, not include any amount described in section 613A(d)(5).\n2018—Subsec. (a).  Pub. L. 115–141  substituted “any deduction under section 199A” for “the deduction under section 199A”.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13305(b)(4) , struck out “and without the deduction under section 199” after “without allowance for depletion”.\nPub. L. 115–97, §\u202f11011(d)(3) , inserted “and without the deduction under section 199A” after “without the deduction under section 199”.\n2005—Subsec. (c)(4)(H).  Pub. L. 109–135  inserted “(including in situ retorting)” after “and retorting”.\n2004—Subsec. (a).  Pub. L. 108–357 , which directed the insertion of “and without the deduction under section 199” after “without allowances for depletion”, was executed by making the insertion after “without allowance for depletion”, to reflect the probable intent of Congress.\n1996—Subsec. (e)(1)(B).  Pub. L. 104–188  substituted “subsection (b).” for “subsection (b),”.\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f11522(a) , inserted “(100 percent in the case of oil and gas properties)” after “50 percent”.\nSubsec. (e)(1)(B).  Pub. L. 101–508, §\u202f11815(b)(2) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the applicable percentage (determined under the table contained in paragraph (2)) shall be deemed to be the percentage specified in subsection (b).”\nSubsec. (e)(2) to (4).  Pub. L. 101–508, §\u202f11815(b)(1) , redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which related to the applicable percentage depletion for geothermal deposits.\n1986—Subsec. (e)(4).  Pub. L. 99–514  added par. (4).\n1978—Subsec. (c)(1).  Pub. L. 95–618, §\u202f403(a)(2)(A) , inserted “and other than a geothermal deposit” after “oil or gas well”.\nSubsec. (e).  Pub. L. 95–618, §\u202f403(a)(1) , added subsec. (e).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsec. (c)(2), (4)(I).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1975—Subsec. (b)(1).  Pub. L. 94–12, §\u202f501(b)(2)(A) , struck out subpar. (A) “oil and gas wells” and redesignated former subpars. (B) and (C) as (A) and (B), respectively.\nSubsec. (b)(3), (4).  Pub. L. 94–12, §\u202f501(b)(2)(B) , substituted “(1)(B)” for “(1)(C)” wherever appearing.\nSubsec. (b)(7).  Pub. L. 94–12, §\u202f501(b)(2)  (B), (C), substituted “(1)(B)” for “(1)(C)” in provisions preceding subpar. (A) and added subpar. (C).\nSubsec. (d).  Pub. L. 94–12, §\u202f501(b)(1) , substituted provisions denying the percentage depletion allowance in the case of oil and gas wells except as provided in section 613A for provisions governing the application of percentage depletion rates to certain taxable years ending in 1954.\n1974—Subsec. (c)(4)(E).  Pub. L. 93–499  inserted reference to decarbonation of trona.\n1969—Subsec. (b).  Pub. L. 91–172, §\u202f501(a) , reduced the percentage depletion rate on oil and gas wells from 27½ percent to 22 percent, reduced to 22 percent other minerals formerly receiving percentage depletion at a rate of 23 percent, added molybdenum in the category of minerals subject to the 22 percent depletion rate, reduced to 14 percent the rate on minerals formerly receiving depletion at a 15 percent rate except in the case of domestic gold, silver, oil shale, copper, and iron ore, and inserted provision that for percentage depletion purposes, minerals other than sodium chloride, extracted from brine pumped from a saline perennial lake within the United States are not to be considered minerals from an inexhaustible source.\nSubsec. (c)(4)(H), (I).  Pub. L. 91–172, §\u202f502(a) , added subpar. (H) and redesignated former subpar. (H) as (I).\n1966—Subsec. (b)(2)(B).  Pub. L. 89–809, §\u202f207(a)(1) , inserted “clay, laterite, and nephelite syenite” after “anorthosite”.\nSubsec. (b)(3)(B).  Pub. L. 89–809 , §§\u202f207(a)(2), 209(a)(2), substituted “if neither paragraph (2)(B), (5), or (6)(B) applies” for “if paragraph (5)(B) does not apply”.\nSubsec. (b)(5).  Pub. L. 89–809, §\u202f209(a)(1) , added par. (5). Former par. (5) redesignated (6).\nSubsec. (b)(6).  Pub. L. 89–809 , §§\u202f208(a)(1), 209(a)(1), (3), (4), redesignated par. (5) as (6), struck out “mollusk shells (including clam shells and oyster shells),”, substituted “shale (except shale described in paragraph (5)), and stone (except stone described in paragraph (7))” for “shale, and stone, except stone described in paragraph (6)” in subpar. (A), and struck out “building or paving brick,” and “sewer pipe,” in subpar. (B). Former par. (6) redesignated (7).\nSubsec. (b)(7).  Pub. L. 89–809 , §§\u202f208(a)(2), 209(a)(1), (5), redesignated par. (6) as (7) and inserted “mollusk shells (including clam shells and oyster shells),” after “marble,” and “(other than slate to which paragraph (5) applies)” after “any other such mineral”.\nSubsec. (c)(4)(G).  Pub. L. 89–809, §\u202f209(b) , substituted “paragraph (5) or (6)(B)” for “paragraph (5)(B)”.\n1964—Subsec. (b)(2)(B), (6).  Pub. L. 88–571  inserted “beryllium” after “antimony” in par. (2)(B), and deleted “beryl” after “bauxite” in pars. (2)(B) and (6).\n1962—Subsec. (a).  Pub. L. 87–834  inserted provisions requiring the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property to be decreased by an amount equal to so much of any gain which is treated under section 1245 as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231, and is properly allocable to the property.\n1960—Subsec. (b)(3).  Pub. L. 86–564, §\u202f302(a)(1) , limited the 15 percent allowance for ball clay, bentonite, china clay, and sagger clay to cases where paragraph (5)(B) does not apply, and authorized a 15 percent allowance, if paragraph (5)(B) does not apply, for clay used or sold for use for purposes dependent on its refractory properties.\nSubsec. (b)(5).  Pub. L. 86–564, §\u202f302(a)(2) , substituted provisions authorizing a 5 percent allowance for clay used, or sold for use, in the manufacture of building or paving brick, drainage and roofing tile, sewer pipe, flower pots, and kindred products for provisions which authorized a 5 percent allowance for brick and tile clay.\nSubsec. (b)(6).  Pub. L. 86–564, §\u202f302(a)(3) , struck out provisions which authorized a 15 percent allowance for refractory and fire clay. See subsec. (b)(3) of this section.\nSubsec. (c)(2).  Pub. L. 86–564, §\u202f302(b)(1) , substituted “the treatment processes considered as mining described in paragraph (4) (and the treatment processes necessary or incidental thereto)” for “the ordinary treatment processes normally applied by mine owners or operators in order to obtain the commercially marketable mineral product or products”, and “such treatment processes” for “the ordinary treatment processes”.\nSubsec. (c)(4).  Pub. L. 86–564, §\u202f302(b)(2) , substituted “The following treatment processes where applied by the mine owner or operator shall be considered as mining to the extent they are applied to the ore or mineral in respect of which he is entitled to a deduction for depletion under section 611” for “The term ‘ordinary treatment processes’ includes the following” in opening provisions, included cleaning in subpar. (B), substituted “ores or minerals which” for “minerals which” and included substantially equivalent processes in subpar. (C), included uranium and minerals which are not customarily sold in the form of the crude mineral product and substituted “from the ore or the mineral or minerals from other material from the mine or other natural deposit” for “from the ore, including the furnacing of quicksilver ores” in subpar. (D), included the furnacing of quicksilver ores in subpar. (E), and added subpars. (F) to (H).\nSubsec. (c)(5).  Pub. L. 86–564, §\u202f302(b)(2) , added par. (5).\n1958—Subsec. (d).  Pub. L. 85–866  added subsec. (d).\nAmendment by  Pub. L. 115–141  effective as if included in  section 11011 of Pub. L. 115–97 , see  section 101(d)(1) of Pub. L. 115–141 , set out as a note under  section 62 of this title .\nAmendment by  section 11011(d)(3) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as a note under  section 62 of this title .\nAmendment by  section 13305(b)(4) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nPub. L. 101–508, title XI, §\u202f11522(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–486 , provided that:  “The amendments made by this section [amending this section and sections 613A and 614 of this title] shall apply to taxable years beginning after  December 31, 1990 .”\nPub. L. 99–514, title IV, §\u202f412(a)(3) ,  Oct. 22, 1986 ,  100 Stat. 2227 , provided that:  “The amendment made by this subsection [amending this section and  section 613A of this title ] shall apply to amounts received or accrued after  August 16, 1986 , in taxable years ending after such date.”\nPub. L. 95–618, title IV, §\u202f403(c) ,  Nov. 9, 1978 ,  92 Stat. 3204 , provided that:  “The amendments made by this section [amending this section and sections 613A and 614 of this title] shall take effect on  October 1, 1978 , and shall apply to taxable years ending on or after such date.”\nAmendment by  section 1901(b)(3)(K) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 94–12  effective  Jan. 1, 1975 , applicable to taxable years ending after  Dec. 31, 1974 , see  section 501(c) of Pub. L. 94–12 , set out as an Effective Note under  section 613A of this title .\nPub. L. 93–499, §\u202f2(b) ,  Oct. 29, 1974 ,  88 Stat. 1550 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1970 .”\nPub. L. 91–172, title V, §\u202f501(b) ,  Dec. 30, 1969 ,  83 Stat. 630 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  October 9, 1969 .”\nPub. L. 91–172, title V, §\u202f502(b) ,  Dec. 30, 1969 ,  83 Stat. 630 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 30, 1969 ].”\nPub. L. 89–809, title II, §\u202f207(b) ,  Nov. 13, 1966 ,  80 Stat. 1579 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 13, 1966 ].”\nPub. L. 89–809, title II, §\u202f208(b) ,  Nov. 13, 1966 ,  80 Stat. 1579 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 13, 1966 ].”\nPub. L. 89–809, title II, §\u202f209(c) ,  Nov. 13, 1966 ,  80 Stat. 1580 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 13, 1966 ].”\nPub. L. 88–571, §\u202f6(b) ,  Sept. 2, 1964 ,  78 Stat. 860 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1963 .”\nAmendment by  Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nPub. L. 86–564, title III, §\u202f302(c) ,  June 30, 1960 ,  74 Stat. 293 , as amended by  Pub. L. 86–781, §\u202f4 ,  Sept. 14, 1960 ,  74 Stat. 1018 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(c)   Effective Date.— “(1)   In general .— Except as provided in paragraph (2), the amendments made by subsections (a) and (b) [amending this section] shall be applicable only with respect to taxable years beginning after  December 31, 1960 . \n \n “(2)   Calcium carbonates, etc.— “(A)   Election for past years .— In the case of calcium carbonates or other minerals when used in making cement, if an election is made by the taxpayer under subparagraph (C)— “(i)  the amendments made by subsection (b) [amending this section] shall apply to taxable years with respect to which such election is effective and \n \n “(ii)  provisions having the same effect as the amendments made by subsection (b) [amending this section] shall be deemed to be included in the Internal Revenue Code of 1939 and shall apply to taxable years with respect to which such election is effective in lieu of the corresponding provisions of such Code. \n \n \n “(B)   Years to which applicable .— An election made under subparagraph (C) to have the provisions of this paragraph apply shall be effective for all taxable years beginning before  January 1, 1961 , in respect of which— “(i)  the assessment of a deficiency, \n \n “(ii)  the refund or credit of an overpayment, or \n \n “(iii)  the commencement of a suit for recovery of a refund under section 7405 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [ section 7405 of this title ], \n \n\n \u2001\u2001is not prevented on the date of the enactment of this paragraph [ Sept. 14, 1960 ] by the operation of any law or rule of law. Such election shall also be effective for any taxable year beginning before  January 1, 1961 , in respect of which an assessment of a deficiency has been made but not collected on or before the date of the enactment of this paragraph. \n \n “(C)   Time and manner of election .— An election to have the provisions of this paragraph apply shall be made by the taxpayer on or before the 60th day after the date of publication in the Federal Register of final regulations issued under authority of subparagraph (F), and shall be made in such form and manner as the Secretary of the Treasury or his delegate shall prescribe by regulations. Such election, if made, may not be revoked. \n \n “(D)   Statutes of limitation .— Notwithstanding any other law, the period within which an assessment of a deficiency attributable to the application of the amendments made by subsection (b) [amending this section] may be made with respect to any taxable year to which such amendments apply under an election made under subparagraph (C), and the period within which a claim for refund or credit of an overpayment attributable to the application of such amendments may be made with respect to any such taxable year, shall not expire prior to one year after the last day for making an election under subparagraph (C). An election by a taxpayer under subparagraph (C) shall be considered as a consent to the application of the provisions of this subparagraph. \n \n “(E)   Terms; applicability of other laws .— Except where otherwise distinctly expressed or manifestly intended, terms used in this paragraph shall have the same meaning as when used in the Internal Revenue Code of 1986 [this title] (or corresponding provisions of the Internal Revenue Code of 1939) and all provisions of law shall apply with respect to this paragraph as if this paragraph were a part of such Code (or corresponding provisions of the Internal Revenue Code of 1939). \n \n “(F)   Regulations .— The Secretary of the Treasury or his delegate shall prescribe such regulations as may be necessary to carry out the provisions of this paragraph.”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nFor provisions that nothing in amendment by section 11815(b)(1), (2) of  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 87–312 ,  Sept. 26, 1961 ,  75 Stat. 674 , provided for the election of, and procedure for, a differing rate of depletion for clay and shale used in the manufacture of clay products, such election to be effective for all taxable years beginning before  Jan. 1, 1961 , in respect of which the assessment of a deficiency, a refund or credit of overpayment, or the commencement of a suit for recovery is not prevented on  Sept. 26, 1961 , by operation of any law or rule of law, and also effective for any taxable year beginning before Jan. 1961, in respect of which an assessment of a deficiency has been made but not collected on or before  Sept. 26, 1961 .\nPub. L. 87–321, §\u202f2 ,  Sept. 26, 1961 ,  75 Stat. 683 , provided for an election of, and procedures for, a differing rate of depletion for quartzite and clay used in production of refractory products, such election to be effective on and after  Jan. 1, 1951 , for all taxable years beginning before  Jan. 1, 1961 , in respect of which the assessment of a deficiency, the refund or credit of an overpayment, or the commencement of a suit for recovery is not prevented on  Sept. 26, 1961 , by the operation of any law or rule of law, and also effective on and after  Jan. 1, 1951 , for any taxable year beginning before  Jan. 1, 1961 , in respect of which an assessment of a deficiency has been made but not collected on or before  Sept. 26, 1961 .\nPub. L. 85–866, title I, §\u202f36(b) ,  Sept. 2, 1958 ,  72 Stat. 1633 , provided for the filing of a claim within 6 months of  Sept. 2, 1958 , and for the refund or credit of any overpayment, without interest, if such refund or credit, resulting from the addition of subsec. (d) of this section, was prevented on  Sept. 2, 1958 , or within 6 months thereof, by the operation of any law or rule of law other than certain specified sections of the Internal Revenue Codes of 1939 and 1954.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'Except as otherwise provided in this section, the allowance for depletion under section 611 with respect to any oil or gas well shall be computed without regard to section 613.\nThe allowance for depletion under section 611 shall be computed in accordance with section 613 with respect to any qualified natural gas from geopressured brine, and 10 percent shall be deemed to be specified in subsection (b) of section 613 for purposes of subsection (a) of such section.\nThe term “natural gas sold under a fixed contract” means domestic natural gas sold by the producer under a contract, in effect on  February 1, 1975 , and at all times thereafter before such sale, under which the price for such gas cannot be adjusted to reflect to any extent the increase in liabilities of the seller for tax under this chapter by reason of the repeal of percentage depletion for gas. Price increases after  February 1, 1975 , shall be presumed to take increases in tax liabilities into account unless the taxpayer demonstrates to the contrary by clear and convincing evidence.\nThe term “regulated natural gas” means domestic natural gas produced and sold by the producer, before  July 1, 1976 , subject to the jurisdiction of the Federal Power Commission, the price for which has not been adjusted to reflect to any extent the increase in liability of the seller for tax under this chapter by reason of the repeal of percentage depletion for gas. Price increases after  February 1, 1975 , shall be presumed to take increases in tax liabilities into account unless the taxpayer demonstrates the contrary by clear and convincing evidence.\nFor purposes of subparagraph (A), the tentative quantity is 1,000 barrels.\nFor purposes of paragraph (1), the depletable natural gas quantity of any taxpayer for any taxable year shall be equal to 6,000 cubic feet multiplied by the number of barrels of the taxpayer’s depletable oil quantity to which the taxpayer elects to have this paragraph apply. The taxpayer’s depletable oil quantity for any taxable year shall be reduced by the number of barrels with respect to which an election under this paragraph applies. Such election shall be made at such time and in such manner as the Secretary shall by regulations prescribe.\nIf the taxpayer elects to have this subparagraph apply for any taxable year, the rules of subparagraph (A) shall apply to the average daily marginal production of domestic crude oil or domestic natural gas of the taxpayer to which paragraph (1) would have applied without regard to this paragraph.\nFor purposes of this paragraph, the term “heavy oil” means domestic crude oil produced from any property if such crude oil had a weighted average gravity of 20 degrees API or less (corrected to 60 degrees Fahrenheit).\nIf the taxpayer’s average daily production of domestic crude oil exceeds his depletable oil quantity, the allowance under paragraph (1)(A) with respect to oil produced during the taxable year from each property in the United States shall be that amount which bears the same ratio to the amount of depletion which would have been allowable under section 613(a) for all of the taxpayer’s oil produced from such property during the taxable year (computed as if section 613 applied to all of such production at the rate specified in paragraph (1) or (6), as the case may be) as his depletable oil quantity bears to the aggregate number of barrels representing the average daily production of domestic crude oil of the taxpayer for such year.\nIf the taxpayer’s average daily production of domestic natural gas exceeds his depletable natural gas quantity, the allowance under paragraph (1)(B) with respect to natural gas produced during the taxable year from each property in the United States shall be that amount which bears the same ratio to the amount of depletion which would have been allowable under section 613(a) for all of the taxpayer’s natural gas produced from such property during the taxable year (computed as if section 613 applied to all of such production at the rate specified in paragraph (1) or (6), as the case may be) as the amount of his depletable natural gas quantity in cubic feet bears to the aggregate number of cubic feet representing the average daily production of domestic natural gas of the taxpayer for such year.\nIf both oil and gas are produced from the property during the taxable year, for purposes of subparagraphs (A) and (B) the taxable income from the property, in applying the taxable income limitation in section 613(a), shall be allocated between the oil production and the gas production in proportion to the gross income during the taxable year from each.\nIn the case of a partnership, the depletion allowance shall be computed separately by the partners and not by the partnership. The partnership shall allocate to each partner his proportionate share of the adjusted basis of each partnership oil or gas property. The allocation is to be made as of the later of the date of acquisition of the oil or gas property by the partnership, or  January 1, 1975 . A partner’s proportionate share of the adjusted basis of partnership property shall be determined in accordance with his interest in partnership capital or income and, in the case of property contributed to the partnership by a partner, section 704(c) (relating to contributed property) shall apply in determining such share. Each partner shall separately keep records of his share of the adjusted basis in each oil and gas property of the partnership, adjust such share of the adjusted basis for any depletion taken on such property, and use such adjusted basis each year in the computation of his cost depletion or in the computation of his gain or loss on the disposition of such property by the partnership. For purposes of section 732 (relating to basis of distributed property other than money), the partnership’s adjusted basis in mineral property shall be an amount equal to the sum of the partners’ adjusted basis in such property as determined under this paragraph.\nFor purposes of this subsection, persons who are members of the same controlled group of corporations shall be treated as one taxpayer.\nIf 50 percent or more of the beneficial interest in two or more corporations, trusts, or estates is owned by the same or related persons (taking into account only persons who own at least 5 percent of such beneficial interest), the tentative quantity determined under paragraph (3)(B) shall be allocated among all such entities in proportion to the respective production of domestic crude oil during the period in question by such entities.\nIn the case of individuals who are members of the same family, the tentative quantity determined under paragraph (3)(B) shall be allocated among such individuals in proportion to the respective production of domestic crude oil during the period in question by such individuals.\nIn applying this subsection to a taxable year which is not a calendar year, each portion of such taxable year which occurs during a single calendar year shall be treated as if it were a short taxable year.\nIn applying this subsection, there shall not be taken into account the production of natural gas with respect to which subsection (b) applies.\nIn the case of an S corporation, the allowance for depletion with respect to any oil or gas property shall be computed separately by each shareholder.\nThe S corporation shall allocate to each shareholder his pro rata share of the adjusted basis of the S corporation in each oil or gas property held by the S corporation. The allocation shall be made as of the later of the date of acquisition of the property by the S corporation, or the first day of the first taxable year of the S corporation to which the Subchapter S Revision Act of 1982 applies. Each shareholder shall separately keep records of his share of the adjusted basis in each oil and gas property of the S corporation, adjust such share of the adjusted basis for any depletion taken on such property, and use such adjusted basis each year in the computation of his cost depletion or in the computation of his gain or loss on the disposition of such property by the S corporation. In the case of any distribution of oil or gas property to its shareholders by the S corporation, the corporation’s adjusted basis in the property shall be an amount equal to the sum of the shareholders’ adjusted bases in such property, as determined under this subparagraph.\nIf the taxpayer or one or more related persons engages in the refining of crude oil, subsection (c) shall not apply to the taxpayer for a taxable year if the average daily refinery runs of the taxpayer and such persons for the taxable year exceed 75,000 barrels. For purposes of this paragraph, the average daily refinery runs for any taxable year shall be determined by dividing the aggregate refinery runs for the taxable year by the number of days in the taxable year.\nIn the case of any oil or gas property to which subsection (c) applies, for purposes of section 613, the term “gross income from the property” shall not include any lease bonus, advance royalty, or other amount payable without regard to production from property.\nThe term “crude oil” includes a natural gas liquid recovered from a gas well in lease separators or field facilities.\nThe term “natural gas” means any product (other than crude oil) of an oil or gas well if a deduction for depletion is allowable under section 611 with respect to such product.\nThe term “domestic” refers to production from an oil or gas well located in the United States or in a possession of the United States.\nThe term “barrel” means 42 United States gallons.\nSection 503 of the Natural Gas Policy Act of 1978, referred to in subsec. (b)(3)(C)(i), which was classified to  section 3413 of Title 15 , Commerce and Trade, was repealed by  Pub. L. 101–60, §\u202f3(b)(5) ,  July 26, 1989 ,  103 Stat. 159 , effective  Jan. 1, 1993 .\nThe Subchapter S Revision Act of 1982, referred to in subsec. (c)(11)(B), is  Pub. L. 97–354 ,  Oct. 19, 1982 ,  96 Stat. 1669 , which is classified principally to subchapter S (§\u202f1361 et seq.) of chapter 1 of this title. For complete classification of this Act to the Code, see Short Title of 1982 Amendments note set out under  section 1 of this title  and Tables.\n2018—Subsec. (c)(6)(H).  Pub. L. 115–141, §\u202f401(b)(26) , struck out subpar. (H) which related to temporary suspension of taxable income limit with respect to marginal production.\nSubsec. (c)(7)(B).  Pub. L. 115–141, §\u202f401(a)(136) , substituted “taxpayer’s natural gas” for “taxpayers natural gas”.\n2017—Subsec. (d)(1).  Pub. L. 115–97, §\u202f13305(b)(5) , redesignated subpars. (C) to (F) as (B) to (E), respectively, and struck out former subpar. (B) which read as follows: “any deduction allowable under section 199,”.\nPub. L. 115–97, §\u202f11011(d)(4) , added subpar. (C) and redesignated former subpars. (C) to (E) as (D) to (F), respectively.\n2010—Subsec. (c)(6)(H)(ii).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\n2008—Subsec. (c)(6)(H).  Pub. L. 110–343  substituted “for any taxable year—” for “for any taxable year beginning after  December 31, 1997 , and before  January 1, 2008 .” and added cls. (i) and (ii).\n2006—Subsec. (c)(6)(H).  Pub. L. 109–432  substituted “2008” for “2006”.\n2005—Subsec. (c)(6)(C).  Pub. L. 109–58, §\u202f1322(a)(3)(B) , substituted “section 45K(d)(2)(C)” for “section 29(d)(2)(C)” in concluding provisions.\nSubsec. (d)(1)(B) to (E).  Pub. L. 109–135  added subpar. (B) and redesignated former subpars. (B) to (D) as (C) to (E), respectively.\nSubsec. (d)(4).  Pub. L. 109–58, §\u202f1328(a) , reenacted heading without change and amended text of par. (4) generally. Prior to amendment, text read as follows: “If the taxpayer or a related person engages in the refining of crude oil, subsection (c) shall not apply to such taxpayer if on any day during the taxable year the refinery runs of the taxpayer and such person exceed 50,000 barrels.”\n2004—Subsec. (c)(6)(H).  Pub. L. 108–311  substituted “2006” for “2004”.\n2002—Subsec. (c)(6)(H).  Pub. L. 107–147  substituted “2004” for “2002”.\n1999—Subsec. (c)(6)(H).  Pub. L. 106–170  substituted “ January 1, 2002 ” for “ January 1, 2000 ”.\n1997—Subsec. (c)(6)(H).  Pub. L. 105–34  added subpar. (H).\n1996—Subsec. (c)(3)(A)(i).  Pub. L. 104–188  struck out “the table contained in” before “subparagraph (B)”.\n1990—Subsec. (c)(1).  Pub. L. 101–508, §\u202f11815(a)(1)(A) , substituted “15 percent” for “the applicable percentage (determined in accordance with the table contained in paragraph (5))” in concluding provisions.\nSubsec. (c)(3)(A).  Pub. L. 101–508, §\u202f11523(b)(2) , struck out at end “Clause (ii) shall not apply after  December 31, 1983 .”\nSubsec. (c)(3)(A)(ii).  Pub. L. 101–508, §\u202f11523(b)(1) , added cl. (ii) and struck out former cl. (ii) which read as follows: “the taxpayer’s average daily secondary or tertiary production for the taxable year.”\nSubsec. (c)(3)(B).  Pub. L. 101–508, §\u202f11815(a)(1)(B) , amended subpar. (B) generally, substituting present provisions for provisions which set out a phase-out table for determining tentative quantity in barrels.\nSubsec. (c)(5).  Pub. L. 101–508, §\u202f11815(a)(1)(C) , struck out par. (5) which provided table of applicable percentages for purposes of par. (1).\nSubsec. (c)(6).  Pub. L. 101–508, §\u202f11523(a) , amended par. (6) generally, providing for an increase in percentage depletion allowance for marginal production, and substituting provisions relating to oil and gas produced from marginal properties for former provisions which related to oil and gas resulting from secondary or tertiary processes.\nSubsec. (c)(7)(A), (B).  Pub. L. 101–508, §\u202f11815(a)(2)(A) , substituted “specified in paragraph (1)” for “specified in paragraph (5)”.\nSubsec. (c)(7)(C).  Pub. L. 101–508, §\u202f11522(b)(1) , substituted “taxable income” for “50-percent” before “limitation”.\nSubsec. (c)(7)(E).  Pub. L. 101–508, §\u202f11815(a)(1)(C) , struck out subpar. (E) which provided special rules relating to production from secondary or tertiary recovery processes.\nSubsec. (c)(8)(B), (C).  Pub. L. 101–508, §\u202f11815(a)(2)(B) , which directed amendment of subpars. (B) and (C) by substituting “determined under paragraph (3)(B)” for “determined under the table contained in paragraph (3)(B)”, was executed by making the substitution for “determined under the table in paragraph (3)(B)” as the probable intent of Congress.\nSubsec. (c)(9).  Pub. L. 101–508, §\u202f11815(a)(2)(B) , which directed amendment of par. (9) by substituting “determined under paragraph (3)(B)” for “determined under the table contained in paragraph (3)(B)”, could not be executed because that phrase did not appear after execution of amendment by  Pub. L. 101–508, §\u202f11521(a) . See below.\nPub. L. 101–508, §\u202f11521(a) , redesignated par. (11) as (9) and struck out former par. (9) which related to transfer of oil or gas property.\nSubsec. (c)(10).  Pub. L. 101–508, §\u202f11521(a) , redesignated par. (12) as (10) and struck out former par. (10) which related to transfers by individuals to corporations.\nSubsec. (c)(11).  Pub. L. 101–508, §\u202f11521(a) , redesignated par. (13) as (11). Former par. (11) redesignated (9).\nSubsec. (c)(11)(C), (D).  Pub. L. 101–508, §\u202f11521(b) , struck out subpars. (C) and (D) which related to coordination with the transfer rules of former pars. (9) and (10).\nSubsec. (c)(12), (13).  Pub. L. 101–508, §\u202f11521(a) , redesignated pars. (12) and (13) as (10) and (11), respectively.\n1986—Subsec. (d)(1).  Pub. L. 99–514, §\u202f104(b)(9) , struck out “(reduced in the case of an individual by the zero bracket amount)” after “taxable income” in introductory provisions.\nSubsec. (d)(5).  Pub. L. 99–514, §\u202f412(a)(1) , added par. (5).\n1984—Subsec. (c)(2).  Pub. L. 98–369, §\u202f25(b)(1) , struck out last sentence providing that in applying this paragraph, there shall not be taken into account any production of crude oil or natural gas resulting from secondary or tertiary processes (as defined in regulations prescribed by the Secretary).\nSubsec. (c)(3)(A).  Pub. L. 98–369, §\u202f25(b)(2) , inserted at end “Clause (ii) shall not apply after  December 31, 1983 .”\nSubsec. (c)(7)(D).  Pub. L. 98–369, §\u202f71(b) , substituted “property contributed to the partnership by a partner, section 704(c) (relating to contributed property) shall apply in determining such share” for “an agreement described in section 704(c)(2) (relating to effect of partnership agreement on contributed property), such share shall be determined by taking such agreement into account” in fourth sentence.\nSubsec. (c)(7)(E).  Pub. L. 98–369, §\u202f25(b)(3) , inserted at end “This subparagraph shall not apply after  December 31, 1983 .”\nSubsec. (c)(9)(A).  Pub. L. 98–369, §\u202f25(b)(4) , substituted “this subsection” for “paragraph (1)”.\n1983—Subsec. (c)(10)(E).  Pub. L. 97–448, §\u202f202(d)(1) , inserted provision that “oil and gas property” includes, in the case of any property, necessary production equipment for such property which is in place when the property is transferred.\nSubsec. (d)(2).  Pub. L. 97–448, §\u202f202(d)(2) , inserted “(excluding bulk sales of aviation fuels to the Department of Defense)” after “any product derived from oil or natural gas”.\n1982—Subsec. (c)(13).  Pub. L. 97–354  added par. (13).\n1980—Subsec. (c)(10) to (12).  Pub. L. 96–603  added par. (10) and redesignated former pars. (10) and (11) as (11) and (12), respectively.\n1978—Subsec. (b)(1)(C).  Pub. L. 95–618, §\u202f403(a)(2)(B) , struck out subpar. (C) which related to a computation in accordance with section 613 with respect to any geothermal deposit in the United States or in a possession of the United States which is determined to be a gas well.\nSubsec. (b)(2), (3).  Pub. L. 95–618, §\u202f403(b)(1) , (2), added par. (2), redesignated former par. (2) as (3) and, as so redesignated, added subpar. (C).\n1977—Subsec. (d)(1).  Pub. L. 95–30  inserted “(reduced in the case of an individual by the zero bracket amount)” after “the taxpayer’s taxable income” in introductory provisions.\n1976—Subsec. (b)(1)(C).  Pub. L. 94–455, §\u202f1901(a)(86)(A) , struck out “within the meaning of section 613(b)(1)(A)” after “determined to be a gas well”.\nSubsec. (c)(2), (4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(6)(A)(i).  Pub. L. 94–455, §\u202f1901(a)(86)(B) , substituted “determined without” for “determined with”.\nSubsec. (c)(7)(D).  Pub. L. 94–455, §\u202f2115(c)(1) , inserted provision relating to the method to be employed by the partners in computing the depletion allowance.\nSubsec. (c)(7)(E).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(9)(B).  Pub. L. 94–455, §\u202f2115(b)(1) , (e), added cls. (iii) to (vi) and provision following cl. (vi).\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f2115(b)(2) , substituted in subpar. (A) reference to any depletion on production from an oil or gas property which is subject to the provisions of subsection (c) for reference to depletion with respect to production of oil and gas subject to the provisions of subsection (c), and added subpar. (D).\nSubsec. (d)(2).  Pub. L. 94–455, §\u202f2115(a) , inserted “(excluding bulk sales of such items to commercial or industrial users)” before “,\u2000or any product derived” and inserted provisions following subpar. (B) relating to the application of this paragraph where combined gross receipts from the sale of oil, natural gas, or any product derived therefrom, for the taxable year of all retail outlets taken into account do not exceed $5,000,000 and relating to the exclusion of sales made outside the United States.\nSubsec. (d)(3).  Pub. L. 94–455, §\u202f2115(d) , inserted provision following subpar. (C) relating to the determination of a significant ownership interest of a corporation, partnership, trust, or estate.\nAmendment by  section 11011(d)(4) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11011(e) of Pub. L. 115–97 , set out as a note under  section 62 of this title .\nAmendment by  section 13305(b)(5) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , except as provided by transition rule, see  section 13305(c) of Pub. L. 115–97 , set out as a note under  section 74 of this title .\nPub. L. 111–312, title VII, §\u202f706(b) ,  Dec. 17, 2010 ,  124 Stat. 3312 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 109–432, div. A, title I, §\u202f118(b) ,  Dec. 20, 2006 ,  120 Stat. 2942 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  section 1322(a)(3)(B) of Pub. L. 109–58  applicable to credits determined under the Internal Revenue Code of 1986 for taxable years ending after  Dec. 31, 2005 , see  section 1322(c)(1) of Pub. L. 109–58 , set out as a note under  section 45K of this title .\nPub. L. 109–58, title XIII, §\u202f1328(b) ,  Aug. 8, 2005 ,  119 Stat. 1020 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nPub. L. 108–311, title III, §\u202f314(b) ,  Oct. 4, 2004 ,  118 Stat. 1181 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 107–147, title VI, §\u202f607(b) ,  Mar. 9, 2002 ,  116 Stat. 60 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 106–170, title V, §\u202f504(b) ,  Dec. 17, 1999 ,  113 Stat. 1921 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1999 .”\nPub. L. 105–34, title IX, §\u202f972(b) ,  Aug. 5, 1997 ,  111 Stat. 898 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 101–508, title XI, §\u202f11521(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–486 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers after  October 11, 1990 .”\nAmendment by  section 11522(b)(1) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11522(c) of Pub. L. 101–508 , set out as a note under  section 613 of this title .\nPub. L. 101–508, title XI, §\u202f11523(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–487 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1990 .”\nAmendment by  section 104(b)(9) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 412(a)(1) of Pub. L. 99–514  applicable to amounts received or accrued after  Aug. 16, 1986 , in taxable years ending after such date, see  section 412(a)(3) of Pub. L. 99–514 , set out as a note under  section 613 of this title .\nPub. L. 98–369, div. A, title I, §\u202f25(c)(2) ,  July 18, 1984 ,  98 Stat. 507 , provided that:  “The amendments made by subsection (b) [amending this section] shall take effect on  January 1, 1984 .”\nAmendment by  section 71(b) of Pub. L. 98–369  applicable with respect to property contributed to the partnership after  Mar. 31, 1984 , in taxable years ending after such date, see  section 71(c) of Pub. L. 98–369 , set out as a note under  section 704 of this title .\nAmendment by  section 202(d)(1) of Pub. L. 97–448  applicable to transfers in taxable years ending after  Dec. 31, 1974 , but only for purposes of applying this section to periods after  Dec. 31, 1979 , and amendment by  section 202(d)(2) of Pub. L. 97–448  applicable to bulk sales after  Sept. 18, 1982 , see  section 203(b)(3) of Pub. L. 97–448 , set out as a note under  section 6652 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nPub. L. 96–603, §\u202f3(b) ,  Dec. 28, 1980 ,  94 Stat. 3513 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to transfers in taxable years ending after  December 31, 1974 , but only for purposes of applying section 613A of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to periods after  December 31, 1979 .”\nAmendment by  Pub. L. 95–618  effective on  Oct. 1, 1978 , and applicable to taxable years ending on or after such date, see  section 403(c) of Pub. L. 95–618 , set out as a note under  section 613 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  section 1901(a)(86) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2115(f) ,  Oct. 4, 1976 ,  90 Stat. 1910 , provided that:  “The amendments made by this section [amending this section and sections 703 and 705 of this title] shall take effect on  January 1, 1975 , and shall apply to taxable years ending after  December 31, 1974 .”\nPub. L. 94–12, title V, §\u202f501(c) ,  Mar. 29, 1975 ,  89 Stat. 53 , provided that:  “The amendments made by this section [enacting this section and amending sections 613 and 703 of this title] shall take effect on  January 1, 1975 , and shall apply to taxable years ending after  December 31, 1974 .”\nFor provisions that nothing in amendment by  section 401(b)(26) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11815(a) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nThe Federal Power Commission was terminated, and its functions, personnel, property, funds, etc., were transferred to the Secretary of Energy (except for certain functions which were transferred to the Federal Energy Regulatory Commission) by sections 7151(b), 7171(a), 7172(a), 7291, and 7293 of Title 42, The Public Health and Welfare.\nPub. L. 95–618, title IV, §\u202f403(d) ,  Nov. 9, 1978 ,  92 Stat. 3204 , provided that:  “Any allowance for depletion allowed by reason of the amendments made by subsection (b) [amending this section] shall not be treated as a credit, exemption, deduction, or comparable adjustment applicable to the computation of any Federal tax which is specifically allowable with respect to any high-cost natural gas (or category thereof) for purposes of section 107(d) of the Natural Gas Policy Act of 1978 [ section 3317(d) of Title 15 , Commerce and Trade].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'For the purpose of computing the depletion allowance in the case of mines, wells, and other natural deposits, the term “property” means each separate interest owned by the taxpayer in each mineral deposit in each separate tract or parcel of land.\nAny election provided in paragraph (2) shall be made for each operating mineral interest, in the manner prescribed by the Secretary by regulations, not later than the time prescribed by law for filing the return (including extensions thereof) for the first taxable year in which any expenditure for development or operation in respect of such operating mineral interest is made by the taxpayer after the acquisition of such interest.\nAny election under paragraph (2) shall be for all purposes of this subtitle and shall be binding on the taxpayer for all subsequent taxable years.\nExcept in the case of oil and gas wells and geothermal deposits, if a single tract or parcel of land contains a mineral deposit which is being extracted, or will be extracted, by means of two or more mines for which expenditures for development or operation have been made by the taxpayer, then the taxpayer may elect to allocate to such mines, under regulations prescribed by the Secretary, all of the tract or parcel of land and of the mineral deposit contained therein, and to treat as a separate property that portion of the tract or parcel of land and of the mineral deposit so allocated to each mine. A separate property formed pursuant to an election under this paragraph shall be treated as a separate property for all purposes of this subtitle (including this paragraph). A separate property so formed may, under regulations prescribed by the Secretary, be included as a part of an aggregation in accordance with paragraphs (1) and (3). The election provided by this paragraph may not be made with respect to any property which is a part of an aggregation formed by the taxpayer under paragraph (1) except with the consent of the Secretary.\nFor purposes of this section, the term “operating mineral interest” includes only an interest in respect of which the costs of production of the mineral are required to be taken into account by the taxpayer for purposes of computing the taxable income limitation provided for in section 613, or would be so required if the mine, well, or other natural deposit were in the production stage.\nIf a taxpayer owns two or more separate nonoperating mineral interests in a single tract or parcel of land or in two or more adjacent tracts or parcels of land, the Secretary shall, on showing by the taxpayer that a principal purpose is not the avoidance of tax, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests in each separate kind of mineral deposit as one property. If such permission is granted for any taxable year, the taxpayer shall treat such interests as one property for all subsequent taxable years unless the Secretary consents to a different treatment.\nFor purposes of this subsection, the term “nonoperating mineral interests” includes only interests which are not operating mineral interests.\n2014—Subsec. (b)(3)(C).  Pub. L. 113–295, §\u202f221(a)(65)(A) , struck out subpar. (C) which related to a special rule for voluntary or compulsory unitization or pooling arrangements entered into in taxable years beginning before  Jan. 1, 1964 .\nSubsec. (b)(4)(A).  Pub. L. 113–295, §\u202f221(a)(65)(B) , which directed amendment of par. (4) by striking out “whichever of the following years is later: The first taxable year beginning after  December 31, 1963 , or”, was executed by striking out “whichever of the following taxable years is the later: The first taxable year beginning after  December 31, 1963 , or” before “the first taxable year” in subpar. (A), to reflect the probable intent of Congress.\nSubsec. (b)(5).  Pub. L. 113–295, §\u202f221(a)(65)(A) , struck out par. (5). Text read as follows: “If, on the day preceding the first day of the first taxable year beginning after  December 31, 1963 , the taxpayer has any operating mineral interests which he treats under subsection (d) of this section (as in effect before the amendments made by the Revenue Act of 1964), such treatment shall be continued and shall be deemed to have been adopted pursuant to paragraphs (1) and (2) of this subsection (as amended by such Act).”\n1990—Subsec. (d).  Pub. L. 101–508  substituted “taxable income” for “50 percent”.\n1978—Subsec. (b).  Pub. L. 95–618, §\u202f403(a)(2)(C) , inserted “or geothermal deposits” after “gas wells” in heading and introductory provisions.\nSubsec. (c).  Pub. L. 95–618, §\u202f403(a)(2)(D) , substituted “oil and gas wells and geothermal deposits” for “oil and gas wells” wherever appearing.\n1976—Subsecs. (b)(3)(A), (4)(A), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(2).  Pub. L. 94–455 , §§\u202f1901(a)(87)(B), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing and “, but the provisions of paragraph (4) shall not apply with respect to such separate property” after “in accordance with paragraphs (1) and (3)”.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f1901(a)(87)(C) , among other changes, struck out references to the first taxable year beginning after  Dec. 31, 1957 , and provisions relating to elections for taxable years beginning before  Jan. 1, 1958 , relating to election after final regulations, and relating to statute of limitations.\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1901(a)(87)(A)(i) , struck out par. (4) which related to a special rule as to deductions under  section 615(a) of this title  prior to aggregation.\n1964—Subsec. (b).  Pub. L. 88–272, §\u202f226(a) , amended subsec. (b) generally, and among other changes, substituted provisions stating that except as otherwise provided, all of the taxpayer’s operating mineral interests in a separate tract or parcel of land will be combined and treated as one property, that the taxpayer may not combine any operating mineral interest in one tract or parcel of land with an operating mineral interest in another tract or parcel of land, that if he has more than one operating mineral interest in a single tract of land he may elect to treat one or more of such interests as separate properties, limited, however, to one combination of interests in a single tract of land, and providing, in the event the election in par. (2) is made with respect to any tract of land, for the treatment of interests discovered or acquired by the taxpayer in such a tract after the taxable year for which the election is made, for provisions which permitted a taxpayer who owned two or more separate operating mineral interests which constituted all or a part of an operating unit, to elect to form one aggregation and treat as one property any two or more of these interests, treating as separate properties any interests which he did not include in the one aggregation, to aggregate separate interests whether or not in a single tract of land, or contiguous tracts of land, and which forbade him to form more than one aggregation within a single operating unit, inserted provisions in par. (3) relating to unitization or pooling arrangements, and in par (5), providing that if the taxpayer has operating mineral interests on the day preceding the first day of the first taxable year beginning after  Dec. 31, 1963 , which he treats under subsec. (d) of this section as in effect before amendment by  Pub. L. 88–272 , he shall continue such treatment and it shall be deemed adopted pursuant to pars. (1) and (2) of this subsection, and struck out provisions defining “operating mineral interests”, and providing for termination of election with respect to mines, excepting oil and gas wells. For definition of “operating mineral interests”, see subsec. (d) of this section.\nSubsec. (c).  Pub. L. 88–272, §\u202f226(b)(1) , (2), struck out par. (5) which defined operating mineral interests, and “1958” before “Special rules” in heading.\nSubsec. (d).  Pub. L. 88–272, §\u202f226(b)(3) , amended subsec. (d) generally, substituting the definition of operating mineral interests, for provisions relating to the 1939 Code treatment respecting operating mineral interest in case of oil and gas wells.\nSubsec. (e)(2).  Pub. L. 88–272, §\u202f226(b)(4) , struck out “within the meaning of subsection (b)(3)” at end.\n1958—Subsec. (b)(4).  Pub. L. 85–866, §\u202f37(a) , added par. (4).\nSubsecs. (c) to (e).  Pub. L. 85–866, §\u202f37(b) –(d), added subsecs. (c) and (d), redesignated former subsec. (c) as (e), and substituted in first sentence of par. (1) “or in two or more adjacent tracts” for “or in two or more contiguous tracts” and “shall, on showing by the taxpayer that a principal purpose is not the avoidance of tax, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests in each separate kind of mineral deposit as one property” for “may, on showing of undue hardship, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests as one property”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11522(c) of Pub. L. 101–508 , set out as a note under  section 613 of this title .\nAmendment by  Pub. L. 95–618  effective  Oct. 1, 1978 , and applicable to taxable years ending on or after such date, see  section 403(c) of Pub. L. 95–618 , set out as a note under  section 613 of this title .\nPub. L. 94–455, title XIX, §\u202f1901(a)(87)(A)(ii) ,  Oct. 4, 1976 ,  90 Stat. 1779 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by clause (i) [amending this section] shall apply with respect to elections to form aggregations of operating mineral interests made under section 614(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for taxable years beginning after  December 31, 1976 .”\nPub. L. 88–272, title II, §\u202f226(d) ,  Feb. 26, 1964 ,  78 Stat. 97 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after  December 31, 1963 .”\nPub. L. 85–866, title I, §\u202f37(e) ,  Sept. 2, 1958 ,  72 Stat. 1638 , provided that:  “The amendments made by subsections (a) and (c) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 . The amendments made by subsection (b) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 , except that such amendments shall, at the election of the taxpayer made in conformity with such amendments, apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 . The amendment made by subsection (d) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 , except that with respect to any taxpayer such amendment shall, at the election of the taxpayer, apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nPub. L. 88–272, title II, §\u202f226(c) ,  Feb. 26, 1964 ,  78 Stat. 96 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “For purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]— \n “(1)   Fair market value rule .— Except as provided in paragraph (2), if a taxpayer has a section 614(b) aggregation, then the adjusted basis (as of the first day of the first taxable year beginning after  December 31, 1963 ) of each property included in such aggregation shall be determined by multiplying the adjusted basis of the aggregation by a fraction— “(A)  the numerator of which is the fair market value of such property, and \n \n “(B)  the denominator of which is the fair market value of such aggregation. \n \n\n For purposes of this paragraph, the adjusted basis and the fair market value of the aggregation, and the fair market value of each property included therein, shall be determined as of the day preceding the first day of the first taxable year which begins after  December 31, 1963 . \n \n “(2)   Allocation of adjustments, etc .— If the taxpayer makes an election under this paragraph with respect to any section 614(b) aggregation, then the adjusted basis (as of the first day of the first taxable year beginning  December 31, 1963 ) of each property included in such aggregation shall be the adjusted basis of such property at the time it was first included in the aggregation by the taxpayer, adjusted for that portion of those adjustments to the basis of the aggregation which are reasonably attributable to such property. If, under the preceding sentence, the total of the adjusted bases of the interests included in the aggregation exceeds the adjusted basis of the aggregation (as of the day preceding the first day of the first taxable year which begins after  December 31, 1963 ), the adjusted bases of the properties which include such interests shall be adjusted, under regulations prescribed by the Secretary of the Treasury or his delegate, so that the total of the adjusted bases of such interests equals the adjusted basis of the aggregation. An election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. \n \n “(3)   Definitions .— For purposes of this subsection— “(A)   Section  614(b)  aggregation.— The term ‘section 614(b) aggregation’ means any aggregation to which section 614(b)(1)(A) of the Internal Revenue Code of 1986 (as in effect before the amendments made by subsection (a) of this section) applied for the day preceding the first day of the first taxable year beginning after  December 31, 1963 . \n \n “(B)   Property .— The term ‘property’ has the same meaning as is applicable, under section 614 of the Internal Revenue Code of 1986, to the taxpayer for the first taxable year beginning after  December 31, 1963 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 211 ;  July 6, 1960 ,  Pub. L. 86–594, §\u202f1 ,  74 Stat. 333 ;  Sept. 12, 1966 ,  Pub. L. 89–570, §\u202f2(a) ,  80 Stat. 763 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title V, §\u202f504(a) ,  83 Stat. 632 , related to pre-1970 exploration expenditures.\nRepeal effective with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'Except as provided in subsections (b) and (d), there shall be allowed as a deduction in computing taxable income all expenditures paid or incurred during the taxable year for the development of a mine or other natural deposit (other than an oil or gas well) if paid or incurred after the existence of ores or minerals in commercially marketable quantities has been disclosed. This section shall not apply to expenditures for the acquisition or improvement of property of a character which is subject to the allowance for depreciation provided in section 167, but allowances for depreciation shall be considered, for purposes of this section, as expenditures.\nAt the election of the taxpayer, made in accordance with regulations prescribed by the Secretary, expenditures described in subsection (a) paid or incurred during the taxable year shall be treated as deferred expenses and shall be deductible on a ratable basis as the units of produced ores or minerals benefited by such expenditures are sold. In the case of such expenditures paid or incurred during the development stage of the mine or deposit, the election shall apply only with respect to the excess of such expenditures during the taxable year over the net receipts during the taxable year from the ores or minerals produced from such mine or deposit. The election under this subsection, if made, must be for the total amount of such expenditures, or the total amount of such excess, as the case may be, with respect to the mine or deposit, and shall be binding for such taxable year.\nThe amount of expenditures which are treated under subsection (b) as deferred expenses shall be taken into account in computing the adjusted basis of the mine or deposit, except that such amount, and the adjustments to basis provided in section 1016(a)(9), shall be disregarded in determining the adjusted basis of the property for the purpose of computing a deduction for depletion under section 611.\nFor election of 10-year amortization of expenditures allowable as a deduction under subsection (a), see section 59(e).\n1988—Subsec. (e).  Pub. L. 100–647  substituted “section 59(e)” for “section 58(i)”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f411(b)(2)(C)(i) , inserted reference to subsec. (d).\nSubsecs. (d), (e).  Pub. L. 99–514, §\u202f411(b)(2)(A) , added subsec. (d) and redesignated former subsec. (d) as (e).\n1982—Subsec. (d).  Pub. L. 97–248  added subsec. (d).\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to costs paid or incurred after  Dec. 31, 1986 , in taxable years ending after such date, with transition rule, see  section 411(c) of Pub. L. 99–514  set out as a note under  section 263 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEDUCTIONS'},
  'content': 'At the election of the taxpayer, expenditures paid or incurred during the taxable year for the purpose of ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral, and paid or incurred before the beginning of the development stage of the mine, shall be allowed as a deduction in computing taxable income. This subsection shall apply only with respect to the amount of such expenditures which, but for this subsection, would not be allowable as a deduction for the taxable year. This subsection shall not apply to expenditures for the acquisition or improvement of property of a character which is subject to the allowance for depreciation provided in section 167, but allowances for depreciation shall be considered, for purposes of this subsection, as expenditures paid or incurred. In no case shall this subsection apply with respect to amounts paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of oil or gas or of any mineral with respect to which a deduction for percentage depletion is not allowable under section 613.\nAny election under this subsection shall be made in such manner as the Secretary may by regulations prescribe.\nThe election provided by paragraph (1) for the taxable year may be made at any time before the expiration of the period prescribed for making a claim for credit or refund of the tax imposed by this chapter for the taxable year. Such an election for the taxable year shall apply to all expenditures described in paragraph (1) paid or incurred by the taxpayer during the taxable year or during any subsequent taxable year. Such an election may not be revoked unless the Secretary consents to such revocation.\nThe statutory period for the assessment of any deficiency for any taxable year, to the extent such deficiency is attributable to an election or revocation of an election under this subsection, shall not expire before the last day of the 2-year period beginning on the day after the date on which such election or revocation of election is made; and such deficiency may be assessed at any time before the expiration of such 2-year period, notwithstanding any law or rule of law which would otherwise prevent such assessment.\nAny election under this subsection shall be made in such manner as the Secretary may by regulations prescribe.\nThe election provided by paragraph (1) for any taxable year may be made or changed not later than the time prescribed by law for filing the return (including extensions thereof) for such taxable year.\nIf an election has been made under subsection (a) with respect to expenditures relating to a mining property and the taxpayer receives or accrues a bonus or a royalty with respect to such property, then the deduction for depletion under section 611 with respect to the bonus or royalty shall be disallowed until the amount of depletion which would be allowable but for this subsection equals the amount of the adjusted exploration expenditures with respect to the property to which the bonus or royalty relates.\nParagraphs (1), (2), and (3) of section 1245(b) (relating to exceptions and limitations with respect to gain from disposition of certain depreciable property) shall apply in respect of this subsection in the same manner and with the same effect as if references in section 1245(b) to section 1245 or any provision thereof were references to this subsection or the corresponding provisions of this subsection and as if references to section 1245 property were references to mining property.\nThis subsection shall apply notwithstanding any other provision of this subtitle.\nThis subsection shall not apply to any disposition to which section 1254 applies.\nThe basis of any property shall not be reduced by the amount of any depletion which would be allowable but for the application of this section.\nThe Secretary shall prescribe such regulations as he may deem necessary to provide for adjustments to the basis of property to reflect gain recognized under subsection (d)(1).\nThe term “mining property” means any property (within the meaning of section 614 after the application of subsections (c) and (e) thereof) with respect to which any expenditures allowed as a deduction under subsection (a)(1) are properly chargeable.\nA transaction which constitutes a disposal of coal or iron ore under section 631(c) shall be treated as a disposition. In such a case, the excess referred to in subsection (d)(1)(B) shall be treated as equal to the gain (if any) referred to in section 631(c).\nIn the case of any property or mine received by the taxpayer in a distribution with respect to part or all of his interest in a partnership, the adjusted exploration expenditures with respect to such property or mine include the adjusted exploration expenditures (not otherwise included under subsection (f)(1)) with respect to such property or mine immediately prior to such distribution, but the adjusted exploration expenditures with respect to any such property or mine shall be reduced by the amount of gain to which section 751(b) applied realized by the partnership (as constituted after the distribution) on the distribution of such property or mine.\nIn the case of any property or mine held by a partnership after a distribution to a partner to which section 751(b) applied, the adjusted exploration expenditures with respect to such property or mine shall, under regulations prescribed by the Secretary, be reduced by the amount of gain to which section 751(b) applied realized by such partner with respect to such distribution on account of such property or mine.\nFor election of 10-year amortization of expenditures allowable as a deduction under this section, see section 59(e).\n1990—Subsecs. (i), (j).  Pub. L. 101–508  redesignated subsec. (j) as (i) and struck out former subsec. (i) which related to deduction of certain pre-1970 exploration expenditures.\n1988—Subsec. (j).  Pub. L. 100–647  substituted “section 59(e)” for “section 58(i)”.\n1986—Subsec. (d)(5).  Pub. L. 99–514, §\u202f413(b) , added par. (5).\nSubsec. (h).  Pub. L. 99–514, §\u202f411(b)(2)(B) , amended subsec. (h) generally, substituting provisions relating to special rules for foreign exploration for provisions relating to limitations.\n1982—Subsec. (h)(3)(B).  Pub. L. 97–248, §\u202f224(c)(8) , inserted “338,” after “334(b),”.\nSubsec. (j).  Pub. L. 97–248, §\u202f201(d)(9)(D) , formerly §\u202f201(c)(9)(D), added subsec. (j).\n1976—Subsec. (a)(2)(A).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(2)(B).  Pub. L. 94–455 , §§\u202f1901(a)(89), 1906(b)(13)(A), substituted “may not be revoked unless” for “may not be revoked after the last day of the third month following the month in which the final regulations issued under the authority of this subsection are published in the Federal Register, unless”, and struck out “or his delegate” after “Secretary”.\nSubsec. (b)(2)(A).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(1).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsecs. (d)(2), (e)(2), (g)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (h)(1).  Pub. L. 94–455, §\u202f1901(b)(21)(C) , substituted “and subsection (a) of section 615 (as in effect before the enactment of the Tax Reform Act of 1976)” for “and section 615(a) and the amounts which are or have been treated as deferred expenses under section 615(b)”.\nSubsec. (h)(3).  Pub. L. 94–455, §\u202f1901(b)(21)(D) , struck out “and all amounts treated as deferred expenses which were paid or incurred” after “amounts deducted” in introductory provisions, redesignated subpar. (C) as (B), and in subpar. (B) as so redesignated, substituted “374(b)(1)” for “373(b)(1)”. Former subpar. (B), which related to the application of par. (2)(B) where the taxpayer would be entitled under section 381(c)(10) to deduct expenses deferred under section 615(b) had the distributor or transferor corporation elected to defer such expenses, was struck out.\nSubsec. (i).  Pub. L. 94–455, §\u202f1901(b)(21)(E) , added subsec. (i).\n1969— Pub. L. 91–172, §\u202f504(b)(1) , substituted “Deduction and recapture of certain mining exploration expenditures” for “Additional exploration expenditures in the case of domestic mining” in heading.\nSubsec. (a)(1).  Pub. L. 91–172, §\u202f504(b)(2) , struck out reference to United States, the Outer Continental Shelf and the Outer Continental Shelf Lands Act from general rule dealing with allowance of deductions for expenditures in ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral.\nSubsec. (h).  Pub. L. 91–172, §\u202f504(b)(3) , substituted provisions imposing limitations on the operation of this section for provision making cross reference to subsecs. (f) and (g) of section 615.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 411(b)(2)(B) of Pub. L. 99–514  applicable to costs paid or incurred after  Dec. 31, 1986 , in taxable years ending after such date, with transition rule, see  section 411(c) of Pub. L. 99–514  set out as a note under  section 263 of this title .\nAmendment by  section 413(b) of Pub. L. 99–514  applicable to any disposition of property placed in service by taxpayer after  Dec. 31, 1986 , but inapplicable if such property was acquired pursuant to written contract entered into before  Sept. 26, 1985 , and binding at all times thereafter, see  section 413(c) of Pub. L. 99–514 , set out as a note under  section 1254 of this title .\nAmendment by  section 201(d)(9)(D) of Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nAmendment by  section 224(c)(8) of Pub. L. 97–248  applicable to any target corporation with respect to which the acquisition date occurs after  Aug. 31, 1982 , with special rules for certain acquisitions before  Sept. 1, 1982 , and certain acquisitions of financial institutions in which there was a binding contract on  July 22, 1982 , to acquire control, see  section 224(d) of Pub. L. 97–248 , set out as an Effective Date note under  section 338 of this title .\nAmendment by section 1901(a)(89), (b)(3)(K), (21)(C)–(E) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to exploration expenditures paid or incurred after  Dec. 31, 1969 , and for purposes of this section, elections under  section 615(e) of this title , effective with respect to exploration expenditures paid or incurred before  Jan. 1, 1970 , to be treated as an election under subsec. (a) of this section with respect to exploration expenditures paid or incurred after  Dec. 31, 1969 , see  section 504(d) of Pub. L. 91–172 , set out as a note under  section 243 of this title .\nPub. L. 89–570, §\u202f3 ,  Sept. 12, 1966 ,  80 Stat. 764 , provided that:  “The amendments made by this Act [enacting this section and amending sections 170, 301, 312, 341, 453, 615, 703, and 751 of this title] shall apply to taxable years ending after the date of the enactment of this Act [ Sept. 12, 1966 ] but only in respect of expenditures paid or incurred after such date.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 212 , related to payments to encourage exploration, development, and mining for defense purposes.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SALES AND EXCHANGES'},
  'content': 'If the taxpayer so elects on his return for a taxable year, the cutting of timber (for sale or for use in the taxpayer’s trade or business) during such year by the taxpayer who owns, or has a contract right to cut, such timber (providing he has owned such timber or has held such contract right for a period of more than 1 year) shall be considered as a sale or exchange of such timber cut during such year. If such election has been made, gain or loss to the taxpayer shall be recognized in an amount equal to the difference between the fair market value of such timber, and the adjusted basis for depletion of such timber in the hands of the taxpayer. Such fair market value shall be the fair market value as of the first day of the taxable year in which such timber is cut, and shall thereafter be considered as the cost of such cut timber to the taxpayer for all purposes for which such cost is a necessary factor. If a taxpayer makes an election under this subsection, such election shall apply with respect to all timber which is owned by the taxpayer or which the taxpayer has a contract right to cut and shall be binding on the taxpayer for the taxable year for which the election is made and for all subsequent years, unless the Secretary, on showing of undue hardship, permits the taxpayer to revoke his election; such revocation, however, shall preclude any further elections under this subsection except with the consent of the Secretary. For purposes of this subsection and subsection (b), the term “timber” includes evergreen trees which are more than 6 years old at the time severed from the roots and are sold for ornamental purposes.\nIn the case of the disposal of timber held for more than 1 year before such disposal, by the owner thereof under any form or type of contract by virtue of which such owner either retains an economic interest in such timber or makes an outright sale of such timber, the difference between the amount realized from the disposal of such timber and the adjusted depletion basis thereof, shall be considered as though it were a gain or loss, as the case may be, on the sale of such timber. In determining the gross income, the adjusted gross income, or the taxable income of the lessee, the deductions allowable with respect to rents and royalties shall be determined without regard to the provisions of this subsection. In the case of disposal of timber with a retained economic interest, the date of disposal of such timber shall be deemed to be the date such timber is cut, but if payment is made to the owner under the contract before such timber is cut the owner may elect to treat the date of such payment as the date of disposal of such timber. For purposes of this subsection, the term “owner” means any person who owns an interest in such timber, including a sublessor and a holder of a contract to cut timber.\n2004—Subsec. (b).  Pub. L. 108–357 , in heading, struck out “with a retained economic interest” after “timber”, in first sentence, substituted “either retains an economic interest in such timber or makes an outright sale of such timber” for “retains an economic interest in such timber”, and, in third sentence, substituted “In the case of disposal of timber with a retained economic interest, the date of disposal” for “The date of disposal”.\n1986—Subsec. (c).  Pub. L. 99–514  substituted “If for the taxable year of such gain or loss the maximum rate of tax imposed by this chapter on any net capital gain is less than such maximum rate for ordinary income, such owner” for “Such owner”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f1001(c)(1) , (e), substituted “on the first day of such year and for a period of more than 6 months before such cutting” for “for a period of more than 1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsecs. (b), (c).  Pub. L. 98–369, §\u202f1001(c)(2) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nPub. L. 98–369, §\u202f178(a) , inserted “or coal” after “iron ore” wherever appearing in last sentence of subsec. (c).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455 , §§\u202f1402(b)(1)(I), (3), 1906(b)(13)(A), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977 and struck out “before the beginning of such year” before “) shall be considered as a sale” effective for taxable years beginning after  Dec. 31, 1976 , and “or his delegate” after “Secretary” wherever appearing.\nSubsec. (b).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(I) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (c).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(I) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\n1964— Pub. L. 88–272, §\u202f227(b)(1) , inserted reference to domestic iron ore in heading.\nSubsec. (c).  Pub. L. 88–272, §\u202f227(a)(1) , inserted “or domestic iron ore” in heading, “or iron ore mined in the United States” after “coal (including lignite)”, “or iron ore” after “coal” wherever appearing, and provided that the subsection shall not apply to any disposal of iron ore to a person whose relationship to the person disposing of such ore would result in the disallowance of losses under section 267 of 717(b), or to a person owned or controlled by the same interests which own or control the person disposing of such iron ore.\nPub. L. 108–357, title III, §\u202f315(c) ,  Oct. 22, 2004 ,  118 Stat. 1469 , provided that:  “The amendments made by this section [amending this section] shall apply to sales after  December 31, 2004 .”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 311(c) of Pub. L. 99–514 , set out as a note under  section 593 of this title .\nPub. L. 98–369, div. A, title I, §\u202f178(b) ,  July 18, 1984 ,  98 Stat. 712 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to dispositions after  September 30, 1985 . \n \n “(2)   Special rule for fixed contracts.— “(A)   In general .— The amendment made by subsection (a) shall not apply to any disposition of an interest in coal by a person to a related person if such coal is subsequently sold before  January 1, 1990 , by either such person— “(i)  to a person who is not a related person with respect to either such person, and \n \n “(ii)  pursuant to a qualified fixed contract. \n \n \n “(B)   Allocation where more than 1 contract .— If, for any taxable year, there is a disposition described in subparagraph (A) which is not specifically allocable to a qualified fixed contract or to a contract which is not a qualified fixed contract, such disposition shall be treated as first allocable to the qualified fixed contract. \n \n “(C)   Qualified fixed contract defined .— The term ‘qualified fixed contract’ means any contract for the sale of coal which— “(i)  was entered into before  June 12, 1984 , \n \n “(ii)  is binding at all times thereafter, and \n \n “(iii)  cannot be adjusted to reflect to any extent the increase in liabilities of the person disposing of the coal for tax under chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] by reason of the amendment made by subsection (a). \n \n \n “(D)   Related person .— For purposes of this paragraph, the term ‘related person’ means a person who bears a relationship to another person described in the last sentence of section 631(c). ”\nAmendment by  section 1001(c) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 94–455, title XIV, §\u202f1402(b)(3) ,  Oct. 4, 1976 ,  90 Stat. 1733 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1976 .\nAmendment by  Pub. L. 88–272  applicable with respect to amounts received or accrued in taxable years beginning after  Dec. 31, 1963 , attributable to iron ore mined in such years, see  section 227(c) of Pub. L. 88–272 , set out as a note under  section 272 of this title .\nPub. L. 108–357, title I, §\u202f102(c) ,  Oct. 22, 2004 ,  118 Stat. 1428 , provided that:  “Any election under section 631(a) of the Internal Revenue Code of 1986 made for a taxable year ending on or before the date of the enactment of this Act [ Oct. 22, 2004 ] may be revoked by the taxpayer for any taxable year ending after such date. For purposes of determining whether such taxpayer may make a further election under such section, such election (and any revocation under this section) shall not be taken into account.”\nPub. L. 99–514, title III, §\u202f311(d)(2) ,  Oct. 22, 1986 ,  100 Stat. 2220 , provided that:  “Any election under section 631(a) of the Internal Revenue Code of 1954 made (whether by a corporation or a person other than a corporation) for a taxable year beginning before  January 1, 1987 , may be revoked by the taxpayer for any taxable year ending after  December 31, 1986 . For purposes of determining whether the taxpayer may make a further election under such section, such election (and any revocation under this paragraph) shall not be taken into account.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SALES AND EXCHANGES'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 214 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title VIII, §\u202f803(d)(4) ,  83 Stat. 684 , related to tax in case of sale of oil and gas properties.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MINERAL PRODUCTION PAYMENTS'},
  'content': 'A production payment carved out of mineral property shall be treated, for purposes of this subtitle, as if it were a mortgage loan on the property, and shall not qualify as an economic interest in the mineral property. In the case of a production payment carved out for exploration or development of a mineral property, the preceding sentence shall apply only if and to the extent gross income from the property (for purposes of section 613) would be realized, in the absence of the application of such sentence, by the person creating the production payment.\nA production payment retained on the sale of a mineral property shall be treated, for purposes of this subtitle, as if it were a purchase money mortgage loan and shall not qualify as an economic interest in the mineral property.\nA production payment retained in a mineral property by the lessor in a leasing transaction shall be treated, for purposes of this subtitle, insofar as the lessee (or his successors in interest) is concerned, as if it were a bonus granted by the lessee to the lessor payable in installments. The treatment of the production payment in the hands of the lessor shall be determined without regard to the provisions of this subsection.\nAs used in this section, the term “mineral property” has the meaning assigned to the term “property” in section 614(a).\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.\n1976—Subsec. (e).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 91–172, title V, §\u202f503(c) ,  Dec. 30, 1969 ,  83 Stat. 631 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule.— The amendments made by this section [enacting this section] shall apply with respect to mineral production payments created on or after  August 7, 1969 , other than mineral production payments created before  January 1, 1971 , pursuant to a binding contract entered into before  August 7, 1969 . \n \n “(2)   Election.— At the election of the taxpayer (made at such time and in such manner as the Secretary of the Treasury or his delegate prescribes by regulations), the amendments made by this section shall apply with respect to all mineral production payments which the taxpayer carved out of mineral properties after the beginning of his last taxable year ending before  August 7, 1969 . No interest shall be allowed on any refund or credit of any overpayment resulting from such election for any taxable year ending before  August 7, 1969 . \n \n “(3)   Special rule.— With respect to a taxpayer who does not elect the treatment provided in paragraph (2) and who carves out one or more mineral production payments on or after  August 7, 1969 , during the taxable year which includes such date, the amendments made by this section shall apply to such production payments only to the extent the aggregate amount of such production payments exceeds the lesser of— “(A)  the excess of “(i)  the aggregate amount of production payments carved out and sold by the taxpayer during the 12-month period immediately preceding his taxable year which includes  August 7, 1969 , over \n \n “(ii)  the aggregate amount of production payments carved out before  August 7, 1969 , by the taxpayer during his taxable year which includes such date, or \n \n \n “(B)  the amount necessary to increase the amount of the taxpayer’s gross income, within the meaning of chapter 1 of subtitle A of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [this title], for the taxable year which includes  August 7, 1969 , to an amount equal to the amount of deductions (other than any deduction under section 172 of such Code) allowable for such year under such chapter. \n \n\n The preceding sentence shall not apply for purposes of determining the amount of any deduction allowable under section 611 or the amount of foreign tax credit allowable under section 904 of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The taxable income of an estate or trust shall be computed in the same manner as in the case of an individual, except as otherwise provided in this part. The tax shall be computed on such taxable income and shall be paid by the fiduciary. For purposes of this subsection, a foreign trust or foreign estate shall be treated as a nonresident alien individual who is not present in the United States at any time.\nIf a portion of an electing small business trust ceases to be treated as a separate trust under paragraph (1), any carryover or excess deduction of the separate trust which is referred to in section 642(h) shall be taken into account by the entire trust.\nFor purposes of this subsection, the term “electing small business trust” has the meaning given such term by section 1361(e)(1).\n2017—Subsec. (c)(2)(E).  Pub. L. 115–97  added subpar. (E).\n2007—Subsec. (c)(2)(C)(iv).  Pub. L. 110–28  added cl. (iv).\n1998—Subsecs. (c), (d).  Pub. L. 105–206  redesignated subsec. (d) as (c) and struck out heading and text of former subsec. (c). Text read as follows:\n“(1)  General rule .—For purposes of this part, the taxable income of a trust does not include the amount of any includible gain as defined in section 644(b) reduced by any deductions properly allocable thereto.\n“(2)  Cross reference .—\n“For the taxation of any includible gain, see section 644.”\n1997—Subsec. (b).  Pub. L. 105–34  inserted at end “For purposes of this subsection, a foreign trust or foreign estate shall be treated as a nonresident alien individual who is not present in the United States at any time.”\n1996—Subsec. (d).  Pub. L. 104–188  added subsec. (d).\n1977—Subsec. (a).  Pub. L. 95–30  substituted “section 1(e)” for “section 1(d)” in introductory provisions.\n1976—Subsec. (c).  Pub. L. 94–455  added subsec. (c).\n1969—Subsec. (a).  Pub. L. 91–172  substituted “The tax imposed by section 1(d)” for “The taxes imposed by this chapter on individuals”.\nPub. L. 115–97, title I, §\u202f13542(b) ,  Dec. 22, 2017 ,  131 Stat. 2154 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 110–28, title VIII, §\u202f8236(b) ,  May 25, 2007 ,  121 Stat. 199 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nPub. L. 104–188, title I, §\u202f1317(a) ,  Aug. 20, 1996 ,  110 Stat. 1787 , provided that:  “Except as otherwise provided in this subtitle [subtitle C (§§\u202f1301–1317) of title I of  Pub. L. 104–188 ], the amendments made by this subtitle [amending this section and sections 170, 404, 512, 1042, 1237, 1361, 1362, 1366 to 1368, 1371, 1375, 1377, 1504, 6037, and 6233 of this title and repealing sections 6241 to 6245 of this title] shall apply to taxable years beginning after  December 31, 1996 .”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 94–455  applicable to transfers in trust made after  May 21, 1976 , see  section 701(h) of Pub. L. 94–455 , set out as a note under  section 667 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1970 , see  section 803(f) of Pub. L. 91–172 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'An estate or trust shall be allowed the credit against tax for taxes imposed by foreign countries and possessions of the United States, to the extent allowed by section 901, only in respect of so much of the taxes described in such section as is not properly allocable under such section to the beneficiaries.\nAn estate shall be allowed a deduction of $600.\nExcept as otherwise provided in this paragraph, a trust shall be allowed a deduction of $100.\nA trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $300.\nIn the case of any taxable year in which the exemption amount under section 151(d) is zero, clause (i) shall be applied by substituting “$4,150” for “the exemption amount under section 151(d)”.\nIn the case of any taxable year beginning in a calendar year after 2018, the $4,150 amount in subparagraph (A) shall be increased in the same manner as provided in section 6334(d)(4)(C).\nThe deductions allowed by this subsection shall be in lieu of the deductions allowed under section 151 (relating to deduction for personal exemption).\nIn the case of an estate or trust (other than a trust meeting the specifications of subpart B), there shall be allowed as a deduction in computing its taxable income (in lieu of the deduction allowed by section 170(a), relating to deduction for charitable, etc., contributions and gifts) any amount of the gross income, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, paid for a purpose specified in section 170(c) (determined without regard to section 170(c)(2)(A)). If a charitable contribution is paid after the close of such taxable year and on or before the last day of the year following the close of such taxable year, then the trustee or administrator may elect to treat such contribution as paid during such taxable year. The election shall be made at such time and in such manner as the Secretary prescribes by regulations.\nIn the case of a pooled income fund (as defined in paragraph (5)), there shall also be allowed as a deduction in computing its taxable income any amount of the gross income attributable to gain from the sale of a capital asset held for more than 1 year, without limitation, which pursuant to the terms of the governing instrument is, during the taxable year, permanently set aside for a purpose specified in section 170(c).\nTo the extent that the amount otherwise allowable as a deduction under this subsection consists of gain described in section 1202(a), proper adjustment shall be made for any exclusion allowable to the estate or trust under section 1202. In the case of a trust, the deduction allowed by this subsection shall be subject to section 681 (relating to unrelated business income).\nIn the case of a private foundation which is not exempt from taxation under section 501(a) for the taxable year, the provisions of this subsection shall not apply and the provisions of section 170 shall apply.\nThe benefit of the deduction for net operating losses provided by section 172 shall be allowed to estates and trusts under regulations prescribed by the Secretary.\nAn estate or trust shall be allowed the deduction for depreciation and depletion only to the extent not allowable to beneficiaries under sections 167(d) and 611(b).\nThe benefit of the deductions for amortization provided by sections 169 and 197 shall be allowed to estates and trusts in the same manner as in the case of an individual. The allowable deduction shall be apportioned between the income beneficiaries and the fiduciary under regulations prescribed by the Secretary.\nAmounts allowable under section 2053 or 2054 as a deduction in computing the taxable estate of a decedent shall not be allowed as a deduction (or as an offset against the sales price of property in determining gain or loss) in computing the taxable income of the estate or of any other person, unless there is filed, within the time and in the manner and form prescribed by the Secretary, a statement that the amounts have not been allowed as deductions under section 2053 or 2054 and a waiver of the right to have such amounts allowed at any time as deductions under section 2053 or 2054. Rules similar to the rules of the preceding sentence shall apply to amounts which may be taken into account under section 2621(a)(2) or 2622(b). This subsection shall not apply with respect to deductions allowed under part II (relating to income in respect of decedents).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2018—Subsec. (c)(1).  Pub. L. 115–141  substituted “other than” for “other then”.\n2017—Subsec. (b)(2)(C)(iii).  Pub. L. 115–97  added cl. (iii).\n2014—Subsec. (b)(2)(C)(i)(I).  Pub. L. 113–295  substituted “section 68(b)(1)(C)” for “section 151(d)(3)(C)(iii)”.\n2002—Subsec. (b).  Pub. L. 107–134  reenacted heading without change and amended text of subsec. (b) generally. Prior to amendment, text read as follows: “An estate shall be allowed a deduction of $600. A trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $300. All other trusts shall be allowed a deduction of $100. The deductions allowed by this subsection shall be in lieu of the deductions allowed under section 151 (relating to deduction for personal exemption).”\n1996—Subsec. (g).  Pub. L. 104–188  substituted “under section 2621(a)(2)” for “under 2621(a)(2)”.\n1993—Subsec. (c)(4).  Pub. L. 103–66, §\u202f13113(d)(2) , amended heading and text of par. (4) generally. Prior to amendment, text read as follows: “In the case of a trust, the deduction allowed by this subsection shall be subject to section 681 (relating to unrelated business income).”\nSubsec. (f).  Pub. L. 103–66, §\u202f13261(f)(2) , substituted “sections 169 and 197” for “section 169”.\n1990—Subsec. (e).  Pub. L. 101–508, §\u202f11812(b)(9) , substituted “167(d)” for “167(h)”.\nSubsec. (f).  Pub. L. 101–508, §\u202f11801(c)(6)(B) , substituted “section 169” for “sections 169, 184, 187, and 188”.\n1989—Subsec. (g).  Pub. L. 101–239  inserted after first sentence “Rules similar to the rules of the preceding sentence shall apply to amounts which may be taken into account under 2621(a)(2) or 2622(b).”\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f112(b)(2) , amended subsec. (a) generally, substituting “Foreign tax credit allowed” for “Credits against tax” in heading, striking out designation and heading for par. (1), and striking out par. (2) which read as follows: “An estate or trust shall not be allowed the credit against tax for political contributions provided by section 24.”\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f301(b)(6) , in heading, substituted “Coordination with section 681” for “Adjustments”, and in text struck out first sentence which read as follows: “To the extent that the amount otherwise allowable as a deduction under this subsection consists of gain from the sale or exchange of capital assets held for more than 6 months, proper adjustment shall be made for any deduction allowable to the estate or trust under section 1202 (relating to deduction for excess of capital gains over capital losses).”\nSubsec. (j).  Pub. L. 99–514, §\u202f612(b)(3) , struck out subsec. (j) which provided a cross reference to section 116(c)(3).\n1984—Subsec. (a)(2).  Pub. L. 98–369, §\u202f474(r)(17) , substituted “section 24” for “section 41”.\nSubsec. (c)(3), (4).  Pub. L. 98–369, §\u202f1001(b)(8) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1981—Subsec. (f).  Pub. L. 97–34  substituted “and 188” for “188, and 191”.\n1978—Subsecs. (i) to (k).  Pub. L. 95–600  redesignated subsecs. (j) and (k) as (i) and (j), respectively. Former subsec. (i), which did not allow estates or trusts the deduction for contributions to candidates for public office provided by section 218, was struck out.\n1977—Subsec. (k).  Pub. L. 95–30  struck out par. (1) which made a cross reference to section 142(b)(4) for disallowance of the standard deduction in the case of estates and trusts and struck out “(2)” at beginning of single remaining cross reference.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(b)(1)(H)(i) , redesignated former pars. (2) and (3) as (1) and (2), respectively. Former par. (1), relating to the credit against tax for partially tax-exempt interest, was struck out.\nSubsec. (c)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(3), (4).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nSubsec. (c)(3), (4).  Pub. L. 94–455, §\u202f1402(b)(1)(J) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsecs. (c)(5), (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 1951(c)(2)(B), 2124(a)(3)(B), substituted “sections 169, 184, 187, 188, and 191” for “sections 168, 169, 184, 187, and 188”, and struck out “or his delegate” after “Secretary”.\nSubsec. (g).  Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 2009(d), inserted “(or as an offset against the sales price of property in determining gain or loss)” after “shall not be allowed as a deduction”, and struck out “or his delegate” after “Secretary”.\nSubsec. (h).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsecs. (j), (k).  Pub. L. 94–528  added subsec. (j) and redesignated former subsec. (j) as (k).\n1971—Subsec. (a)(3).  Pub. L. 92–178, §\u202f701(b) , added par. (3).\nSubsec. (f).  Pub. L. 92–178, §\u202f303(c)(4) , inserted reference to section 188.\nSubsecs. (i), (j).  Pub. L. 92–178, §\u202f702(b) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1969—Subsec. (c).  Pub. L. 91–172, §\u202f201(b) , designated existing provisions, with minor changes, as par. (1) and added pars. (2) to (6).\nSubsec. (f).  Pub. L. 91–172, §\u202f704(b)(2) , struck out reference to emergency or grain storage facilities both in heading and in text, and inserted reference to sections 184 and 187 in text.\n1966—Subsec. (g).  Pub. L. 89–621  inserted “or of any other person” after “shall not be allowed as a deduction in computing the taxable income of the estate”.\n1964—Subsec. (a)(3).  Pub. L. 88–272, §\u202f201(d)(6)(A) , struck out par. (3) which related to dividends received by individuals.\nSubsec. (i).  Pub. L. 88–272, §\u202f201(d)(6)(B) , designated existing provisions as par. (1) and added par. (2).\n1962—Subsec. (e).  Pub. L. 87–834  substituted a reference to section 167(h) for a reference to section 167(g).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11041(f)(1) of Pub. L. 115–97 , set out as a note under  section 151 of this title .\nAmendment by  Pub. L. 113–295  effective as if included in the provision of the American Taxpayer Relief Act of 2012,  Pub. L. 112–240 , to which such amendment relates, see  section 202(f) of Pub. L. 113–295 , set out as a note under  section 55 of this title .\nPub. L. 107–134, title I, §\u202f116(b) ,  Jan. 23, 2002 ,  115 Stat. 2440 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending on or after  September 11, 2001 .”\nAmendment by  section 13113(d)(2) of Pub. L. 103–66  applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nAmendment by  section 13261(f)(2) of Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nAmendment by  section 11812(b)(9) of Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  section 112(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 301(b)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  section 612(b)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as a note under  section 301 of this title .\nAmendment by  section 474(r)(17) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 1001(b)(8) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after such date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nPub. L. 95–600, title I, §\u202f113(d) ,  Nov. 6, 1978 ,  92 Stat. 2778 , provided that:  “The amendments made by this section [amending this section and  section 24 of this title  and repealing  section 218 of this title ] shall apply with respect to contributions the payment of which is made after  December 31, 1978 , in taxable years beginning after such date.”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by  section 1901(b)(1)(H)(i) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(c)(2)(B) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1952(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nPub. L. 94–455, title XX, §\u202f2009(e)(4) ,  Oct. 4, 1976 ,  90 Stat. 1896 , provided that:  “The amendment made by subsection (d) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 94–455, title XXI, §\u202f2124(a)(4) ,  Oct. 4, 1976 ,  90 Stat. 1918 , provided that:  “The amendments made by this subsection [enacting  section 191 of this title  and amending this section and sections 1082, 1245, and 1250 of this title] shall apply with respect to additions to capital account made after  June 14, 1976  and before  June 15, 1981 .”\nPub. L. 94–528, §\u202f1(b) ,  Oct. 17, 1976 ,  90 Stat. 2483 , provided that:  “The amendments made by subsection (a) [amending this section] shall take effect on  October 1, 1977 , and shall apply to amounts distributed during taxable years ending after  December 31, 1963 .”\nPub. L. 92–178, title III, §\u202f303(d) ,  Dec. 10, 1971 ,  85 Stat. 522 , provided that:  “The amendments made by this section [enacting  section 188 of this title  and amending this section and sections 57, 1082, 1245, and 1250 of this title] shall apply to taxable years ending after  December 31, 1971 .”\nPub. L. 92–178, title VII, §\u202f703 ,  Dec. 10, 1971 ,  85 Stat. 562 , provided that:  “The amendments made by this title [enacting sections 24 and 218 of this title and amending this section] shall apply to taxable years ending after  December 31, 1971 , but only with respect to political contributions, payment of which is made after such date.”\nAmendment by  section 201(b) of Pub. L. 91–172  applicable with respect to amounts paid, permanently set aside, or to be used for a charitable purpose in taxable years beginning after  Dec. 31, 1969 , except that subsec. (c)(5) applicable to transfers in trust made after  July 31, 1969 , see  section 201(g) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAmendment by  section 704(b)(2) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1968 , see  section 704(c) of Pub. L. 91–172 , set out as an Effective Date note under  section 169 of this title .\nPub. L. 89–621, §\u202f2(b) ,  Oct. 4, 1966 ,  80 Stat. 873 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 4, 1966 ], but only with respect to amounts paid or incurred, and losses sustained, after such date.”\nAmendment by  Pub. L. 88–272  applicable to dividends received after  December 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1961 , and ending after  Oct. 16, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'No deduction shall be taken under sections 651 and 661 (relating to additional deductions).\nNo deduction shall be taken under section 642(b) (relating to deduction for personal exemptions).\nGains from the sale or exchange of capital assets shall be excluded to the extent that such gains are allocated to corpus and are not (A) paid, credited, or required to be distributed to any beneficiary during the taxable year, or (B) paid, permanently set aside, or to be used for the purposes specified in section 642(c). Losses from the sale or exchange of capital assets shall be excluded, except to the extent such losses are taken into account in determining the amount of gains from the sale or exchange of capital assets which are paid, credited, or required to be distributed to any beneficiary during the taxable year. The exclusion under section 1202 shall not be taken into account.\nFor purposes only of subpart B (relating to trusts which distribute current income only), there shall be excluded those items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, does not pay or credit to any beneficiary by reason of his determination that such dividends are allocable to corpus under the terms of the governing instrument and applicable local law.\nThere shall be included any tax-exempt interest to which section 103 applies, reduced by any amounts which would be deductible in respect of disbursements allocable to such interest but for the provisions of section 265 (relating to disallowance of certain deductions).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this part, including regulations to prevent avoidance of such purposes.\nFor purposes of this subpart and subparts B, C, and D, the term “income”, when not preceded by the words “taxable”, “distributable net”, “undistributed net”, or “gross”, means the amount of income of the estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law shall not be considered income.\nFor purposes of this part, the term “beneficiary” includes heir, legatee, devisee.\nAny election under this paragraph shall apply to all distributions made by the estate or trust during a taxable year and shall be made on the return of such estate or trust for such taxable year.\nThis subsection shall not apply to any distribution described in section 663(a).\nAn election under paragraph (1) shall be made on or before the 65th day after the close of the taxable year of the trust and in such manner as the Secretary may prescribe.\nFor purposes of this part, any amount paid to a United States person which is derived directly or indirectly from a foreign trust of which the payor is not the grantor shall be deemed in the year of payment to have been directly paid by the foreign trust to such United States person.\nThe term “cash” includes foreign currencies and cash equivalents.\nA person is related to another person if the relationship between such persons would result in a disallowance of losses under section 267 or 707(b). In applying section 267 for purposes of the preceding sentence, section 267(c)(4) shall be applied as if the family of an individual includes the spouses of the members of the family.\nIf any person described in paragraph (1)(B) is related to more than one person, the grantor or beneficiary to whom the treatment under this subsection applies shall be determined under regulations prescribed by the Secretary.\nThe term “United States person” does not include any entity exempt from tax under this chapter.\nAny trust which is treated under this subsection as making a distribution shall be treated as not described in section 651.\nIn the case of the use of any trust property other than a loan of cash or marketable securities, paragraph (1) shall not apply to the extent that the trust is paid the fair market value of such use within a reasonable period of time of such use.\nIf any loan (or use of property) is taken into account under paragraph (1), any subsequent transaction between the trust and the original borrower regarding the principal of the loan (by way of complete or partial repayment, satisfaction, cancellation, discharge, or otherwise) or the return of such property shall be disregarded for purposes of this title.\n2010—Subsec. (i)(1).  Pub. L. 111–147, §\u202f533(a) , substituted “(or permits the use of any other trust property) directly or indirectly to or by” for “directly or indirectly to” in introductory provisions and inserted “(or the fair market value of the use of such property)” after “the amount of such loan” in concluding provisions.\nSubsec. (i)(2)(E).  Pub. L. 111–147, §\u202f533(b) , added subpar. (E).\nSubsec. (i)(3).  Pub. L. 111–147, §\u202f533(d) , struck out “regarding loan principal” after “transactions” in heading and inserted “(or use of property)” after “If any loan” and “or the return of such property” after “otherwise)”.\n1996—Subsec. (a)(7).  Pub. L. 104–188, §\u202f1906(b) , added par. (7).\nSubsec. (h).  Pub. L. 104–188, §\u202f1904(c)(1) , added subsec. (h).\nSubsec. (i).  Pub. L. 104–188, §\u202f1906(c)(1) , added subsec. (i).\n1993—Subsec. (a)(3).  Pub. L. 103–66  inserted at end “The exclusion under section 1202 shall not be taken into account.”\n1989—Subsec. (a)(6)(A).  Pub. L. 101–239, §\u202f7811(f)(1) , substituted “section 265(a)(1)” for “section 265(1)”.\nSubsec. (a)(6)(C).  Pub. L. 101–239, §\u202f7811(b)(1) , struck out “(i)” after “such a trust,” and “,\u2000and (ii) the deduction under section 1202 (relating to deduction for excess of capital gains over capital losses) shall not be taken into account” before period at end.\nSubsec. (a)(6)(D).  Pub. L. 101–239, §\u202f7811(b)(2) , struck out subpar. (D) which read as follows: “Effective for distributions made in taxable years beginning after  December 31, 1975 , the undistributed net income of each foreign trust for each taxable year beginning on or before  December 31, 1975 , remaining undistributed at the close of the last taxable year beginning on or before  December 31, 1975 , shall be redetermined by taking into account the deduction allowed by section 1202.”\n1988—Subsec. (g)(1).  Pub. L. 100–647, §\u202f1014(d)(3)(A) , struck out at end “The preceding sentence shall apply only to the extent the payments of estimated tax made by the trust for the taxable year exceed the tax imposed by this chapter shown on its return for the taxable year.”\nSubsec. (g)(2).  Pub. L. 100–647, §\u202f1014(d)(3)(B) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “An election under paragraph (1) may be made—\n“(A) only on the trust’s return of the tax imposed by this chapter for the taxable year, and\n“(B) only if such return is filed on or before the 65th day after the close of the taxable year.”\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1014(d)(4) , added par. (3).\n1986—Subsec. (a)(3).  Pub. L. 99–514, §\u202f301(b)(7) , struck out “The deduction under section 1202 (relating to deduction for excess of capital gains over capital losses) shall not be taken into account.”\nSubsec. (a)(7).  Pub. L. 99–514, §\u202f612(b)(4) , struck out par. (7), dividends or interest, which read as follows: “There shall be included the amount of any dividends or interest excluded from gross income pursuant to section 116 (relating to partial exclusion of dividends) or section 128 (relating to certain interest).”\nSubsec. (d).  Pub. L. 99–514, §\u202f1806(c)(1) , redesignated subsec. (d), relating to treatment of property distributed in kind, as (e). Former subsec. (e) redesignated (f).\nSubsec. (e).  Pub. L. 99–514, §\u202f1806(a) , (c)(1), redesignated subsec. (d) relating to treatment of property distributed in kind as (e) and amended par. (3)(B) generally, substituting “shall apply to all distributions made by the estate or trust during a taxable year and shall be made on the return of such estate or trust for such taxable year” for “shall be made by the estate or trust on its return for the taxable year for which the distribution was made”. Former subsec. (e) redesignated (f).\nSubsec. (f).  Pub. L. 99–514, §\u202f1806(c)(2) , redesignated subsec. (e) as (f).\nSubsec. (g).  Pub. L. 99–514, §\u202f1404(b) , added subsec. (g).\n1984—Subsec. (d).  Pub. L. 98–369, §\u202f81(a) , added subsec. (d) relating to treatment of property distributed in kind.\nPub. L. 98–369, §\u202f722(h)(3) , added subsec. (d) relating to coordination with back-up withholding.\nSubsec. (e).  Pub. L. 98–369, §\u202f82(a) , added subsec. (e).\n1983—Subsec. (a)(7).  Pub. L. 97–448  substituted “section 116 (relating to partial exclusion of dividends) or section 128 (relating to certain interest)” for “section 116 (relating to partial exclusion of dividends or interest received) or section 128 (relating to interest on certain savings certificates)”.\nSubsec. (d).  Pub. L. 98–67  repealed amendments made by  Pub. L. 97–248 . See 1982 Amendment note below.\n1982—Subsec. (d).  Pub. L. 97–248  provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after  June 30, 1983 , this section is amended by adding subsec. (d) relating to coordination with withholding on interest and dividends. Section 102(a), (b) of  Pub. L. 98–67, title I ,  Aug. 5, 1983 ,  97 Stat. 369 , repealed subtitle A (§§\u202f301–308) of title III of  Pub. L. 97–248  as of the close of  June 30, 1983 , and provided that the Internal Revenue Code of 1954 (this title) shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted.\n1981—Subsec. (a)(7).  Pub. L. 97–34, §\u202f301(b)(6)(A) , inserted reference to “interest” in heading and text, which continued the amendment made by  Pub. L. 96–223 .\nPub. L. 97–34, §\u202f301(b)(4) , inserted “or section 128 (relating to interest on certain savings certificates)” after “received)”.\n1980—Subsec. (a)(7).  Pub. L. 96–223  inserted “or interest” after “dividends” in heading and text.\n1976—Subsec. (a)(6)(C).  Pub. L. 94–455, §\u202f1013(c)(1) , struck out “created by a United States person” after “foreign trust”.\nSubsec. (a)(6)(D).  Pub. L. 94–455, §\u202f1013(c)(2) , added subpar. (D).\nSubsec. (d).  Pub. L. 94–455, §\u202f1013(e)(2) , struck out subsec. (a) which defined a foreign trust created by a United States person.\n1962—Subsec. (a)(6).  Pub. L. 87–834, §\u202f7(a)(1) , substituted “Income of foreign trust” for “Foreign income” in heading, designated existing provisions as subpar. (A), and added subpars. (B) and (C).\nSubsec. (d).  Pub. L. 87–834, §\u202f7(a)(2) , added subsec. (d).\nPub. L. 111–147, title V, §\u202f533(e) ,  Mar. 18, 2010 ,  124 Stat. 114 , provided that:  “The amendments made by this section [amending this section and  section 679 of this title ] shall apply to loans made, and uses of property, after the date of the enactment of this Act [ Mar. 18, 2010 ].”\nPub. L. 104–188, title I, §\u202f1904(d) ,  Aug. 20, 1996 ,  110 Stat. 1912 , provided that: \n “(1)   In general .— Except as provided by paragraph (2), the amendments made by this section [amending this section and sections 665, 672, and 901 of this title] shall take effect on the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(2)   Exception for certain trusts .— The amendments made by this section shall not apply to any trust— “(A)  which is treated as owned by the grantor under section 676 or 677 (other than subsection (a)(3) thereof) of the Internal Revenue Code of 1986, and \n \n “(B)  which is in existence on  September 19, 1995 . \n \n\n The preceding sentence shall not apply to the portion of any such trust attributable to any transfer to such trust after  September 19, 1995 .”\nPub. L. 104–188, title I, §\u202f1906(d)(2) , (3),  Aug. 20, 1996 ,  110 Stat. 1916 , provided that: \n “(2)   Abusive transactions .— The amendment made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 20, 1996 ]. \n \n “(3)   Loans from trusts .— The amendment made by subsection (c) [amending this section and  section 7872 of this title ] shall apply to loans of cash or marketable securities made after  September 19, 1995 .”\nAmendment by  Pub. L. 103–66  applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 301(b)(7) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  section 612(b)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as a note under  section 301 of this title .\nPub. L. 99–514, title XIV, §\u202f1404(d) ,  Oct. 22, 1986 ,  100 Stat. 2714 , provided that:  “The amendments made by this section [amending this section and sections 6215, 6601, and 6654 of this title and repealing  section 6152 of this title ] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by section 1806(a), (c) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f81(b) ,  July 18, 1984 ,  98 Stat. 598 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to distributions after  June 1, 1984 , in taxable years ending after such date. \n \n “(2)   Time for making election .— In the case of any distribution before the date of the enactment of this Act [ July 18, 1984 ]— “(A)  the time for making an election under section 643(d)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section) shall not expire before  January 1, 1985 , and \n \n “(B)  the requirement that such election be made on the return of the estate or trust shall not apply.”\nPub. L. 98–369, div. A, title I, §\u202f82(b) ,  July 18, 1984 ,  98 Stat. 598 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1806(b) ,  Oct. 22, 1986 ,  100 Stat. 2811 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  March 1, 1984 ; except that, in the case of a trust which was irrevocable on  March 1, 1984 , such amendment shall so apply only to that portion of the trust which is attributable to contributions to corpus after  March 1, 1984 .”\nPub. L. 98–369, div. A, title VII, §\u202f722(h)(5) ,  July 18, 1984 ,  98 Stat. 976 , provided that: \n “(A)  Except as provided in this paragraph, the amendments made by this subsection [amending this section and sections 3405, 3406, and 6041 of this title] shall apply as if included in the amendments made by the Interest and Dividend Tax Compliance Act of 1983 [ Pub. L. 98–67 ]. \n \n “(B)  The amendments made by paragraph (4) [amending sections 3405 and 6041 of this title] shall apply to payments or distributions after  December 31, 1984 , unless the payor elects to have such amendments apply to payments or distributions before  January 1, 1985 .”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 301(b)(4) of Pub. L. 97–34  applicable to taxable years ending after  Sept. 30, 1981 , and amendment by  section 301(b)(6)(A) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 301(d) of Pub. L. 97–34 , set out as a note under  section 265 of this title .\nAmendment by  Pub. L. 96–223  applicable with respect to taxable years beginning after  Dec. 31, 1980 , and before  Jan. 1, 1982 , see  section 404(c) of Pub. L. 96–223 , set out as a note under  section 265 of this title .\nFor effective date of amendment by  section 1013(e)(2) of Pub. L. 94–455 , see  section 1013(f)(1) of Pub. L. 94–455 , set out as an Effective Date note under  section 679 of this title .\nPub. L. 94–455, title X, §\u202f1013(f)(2) ,  Oct. 4, 1976 ,  90 Stat. 1617 , provided that:  “The amendments made by subsection (c) [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 87–834, §\u202f7(j) ,  Oct. 16, 1962 ,  76 Stat. 989 , provided that:  “The amendments made by this section [amending this section and sections 665, 666, and 668 of this title and enacting  section 669 of this title ] (other than by subsections (f), (g) and (h) [enacting sections 6048 and 6677 of this title and amending  section 7701 of this title ]), shall apply with respect to distributions made after  December 31, 1962 .”\nPub. L. 100–647, title X, §\u202f1018(e) ,  Nov. 10, 1988 ,  102 Stat. 3581 , provided that:  \n “If— “(1)  on a return for the 1st taxable year of the trusts involved beginning after  March 1, 1984 , 2 or more trusts were treated as a single trust for purposes of the tax imposed by chapter 1 of the Internal Revenue Code of 1954 [now 1986], \n \n “(2)  such trusts would have been required to be so treated but for the amendment made by section 1806(b) of the Reform Act [ Pub. L. 99–514 , which amended provisions set out as an Effective Date of 1984 Amendment note above], and \n \n “(3)  such trusts did not accumulate any income during such taxable year and did not make any accumulation distributions during such taxable year, \n \n\n then, notwithstanding the amendment made by section 1806(b) of the Reform Act, such trusts shall be treated as one trust for purposes of such taxable year.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'For purposes of this subtitle, the taxable year of any trust shall be the calendar year.\nSubsection (a) shall not apply to a trust exempt from taxation under section 501(a) or to a trust described in section 4947(a)(1).\nA prior section 644, added  Pub. L. 94–455, title VII, §\u202f701(e)(1) ,  Oct. 4, 1976 ,  90 Stat. 1578 ; amended  Pub. L. 95–600, title VII, §\u202f701(p)(1) –(3),  Nov. 6, 1978 ,  92 Stat. 2908 ;  Pub. L. 96–471, §\u202f2(b)(4) ,  Oct. 19, 1980 ,  94 Stat. 2254 ;  Pub. L. 99–514, title XV, §\u202f1511(c)(5) ,  Oct. 22, 1986 ,  100 Stat. 2745 , related to special rule for gain on property transferred to trust at less than fair market value, prior to repeal by  Pub. L. 105–34, title V, §\u202f507(b)(1) ,  Aug. 5, 1997 ,  111 Stat. 856 .\n1997— Pub. L. 105–34  renumbered  section 645 of this title  as this section.\nPub. L. 105–34, title V, §\u202f507(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 857 , provided that:  “The amendments made by subsection (b) [amending  section 706 of this title , repealing  section 644 of this title , and renumbering  section 645 of this title  as this section] shall apply to sales or exchanges after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 99–514, title XIV, §\u202f1403(c) ,  Oct. 22, 1986 ,  100 Stat. 2713 , provided that: \n “(1)   Effective date .— The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Transition rule .— With respect to any trust beneficiary who is required to include in gross income amounts under sections 652(a) or 662(a) of the Internal Revenue Code of 1986 in the 1st taxable year of the beneficiary beginning after  December 31, 1986 , by reason of any short taxable year of the trust required by the amendments made by this section, such income shall be ratably included in the income of the trust beneficiary over the 4-taxable year period beginning with such taxable year.”\nPub. L. 100–647, title I, §\u202f1014(c) ,  Nov. 10, 1988 ,  102 Stat. 3559 , provided that: \n “(1)  If a beneficiary of a trust to which section 664 of the 1986 Code applies elects (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have this paragraph apply, such beneficiary shall be entitled to the benefits of section 1403(c)(2) of the Reform Act [ Pub. L. 99–514 , set out as an Effective Date; Transition Rule note above] with respect to amounts included in gross income under section 664(b) of the 1986 Code in the same manner as if such amounts were included in gross income under section 652(a) of the 1986 Code. \n \n “(2)  Any trust beneficiary may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to waive the benefits of section 1403(c)(2) of the Reform Act. \n \n “(3) (A)  For purposes of determining the gross income of any pass-thru entity, such pass-thru entity shall not be allowed the benefits of section 806(e)(2)(C) [ Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 1378 of this title ] (other than with respect to income from a common trust fund) or 1403(c)(2) of the Reform Act if such pass-thru entity is required to change its taxable year by reason of the amendments made by section 806 or 1403 of the Reform Act [ Pub. L. 99–514 , which enacted this section and amended sections 267, 441, 706, and 1378 of this title]. \n \n “(B)  For purposes of subparagraph (A), the term ‘pass-thru entity’ means any trust, partnership, S corporation, or common trust fund. \n \n \n “(4)  If any trust was required to change its taxable year by the amendments made by section 1403 of the Reform Act [ Pub. L. 99–514 , which enacted this section], such change shall be treated as initiated by such trust and approved by the Secretary of the Treasury or his delegate.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'For purposes of this subtitle, if both the executor (if any) of an estate and the trustee of a qualified revocable trust elect the treatment provided in this section, such trust shall be treated and taxed as part of such estate (and not as a separate trust) for all taxable years of the estate ending after the date of the decedent’s death and before the applicable date.\nThe term “qualified revocable trust” means any trust (or portion thereof) which was treated under section 676 as owned by the decedent of the estate referred to in subsection (a) by reason of a power in the grantor (determined without regard to section 672(e)).\nThe election under subsection (a) shall be made not later than the time prescribed for filing the return of tax imposed by this chapter for the first taxable year of the estate (determined with regard to extensions) and, once made, shall be irrevocable.\nA prior section 645 was renumbered  section 644 of this title .\n1998— Pub. L. 105–206  renumbered  section 646 of this title  as this section.\nPub. L. 105–34, title XIII, §\u202f1305(d) ,  Aug. 5, 1997 ,  111 Stat. 1041 , provided that:  “The amendments made by this section [enacting this section and amending  section 2652 of this title ] shall apply with respect to estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'If an election under this section is in effect with respect to any Settlement Trust, the provisions of this section shall apply in determining the income tax treatment of the Settlement Trust and its beneficiaries with respect to the Settlement Trust.\nThere is hereby imposed on the taxable income of an electing Settlement Trust, other than its net capital gain, a tax at the lowest rate specified in section 1(c). 1 1 \u202fSee References in Text note below.\nIn the case of an electing Settlement Trust with a net capital gain for the taxable year, a tax is hereby imposed on such gain at the rate of tax which would apply to such gain if the taxpayer were subject to a tax on its other taxable income at only the lowest rate specified in section 1(c).\nA Settlement Trust may elect to have the provisions of this section apply to the trust and its beneficiaries.\nIn the case of an electing Settlement Trust, no amount shall be includible in the gross income of a beneficiary of such trust by reason of a contribution to such trust.\nThe earnings and profits of the sponsoring Native Corporation shall not be reduced on account of any contribution to such Settlement Trust.\nFor purposes of this section, the surrender of an interest in a Native Corporation or an electing Settlement Trust in order to accomplish the whole or partial redemption of the interest of a shareholder or beneficiary in such corporation or trust, or to accomplish the whole or partial liquidation of such corporation or trust, shall be deemed to be a transfer permitted by section 7(h) of the Alaska Native Claims Settlement Act.\nFor purposes of this title, the taxable income of an electing Settlement Trust shall be determined under section 641(b) without regard to any deduction under section 651 or 661.\nThe term “electing Settlement Trust” means a Settlement Trust which has made the election, effective for a taxable year, described in subsection (c).\nThe term “Native Corporation” has the meaning given such term by section 3(m) of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602(m) ).\nThe term “Settlement Common Stock” has the meaning given such term by section 3(p) of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602(p) ).\nThe term “Settlement Trust” means a trust that constitutes a settlement trust under section 3(t) of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602(t) ).\nThe term “sponsoring Native Corporation” means the Native Corporation which transfers assets to an electing Settlement Trust.\nAny loss that would otherwise be recognized by a shareholder upon a disposition of a share of stock of a sponsoring Native Corporation shall be reduced (but not below zero) by the per share loss adjustment factor. The per share loss adjustment factor shall be the aggregate of all contributions to all electing Settlement Trusts sponsored by such Native Corporation made on or after the first day each trust is treated as an electing Settlement Trust expressed on a per share basis and determined as of the day of each such contribution.\nFor information required with respect to electing Settlement Trusts and sponsoring Native Corporations, see section 6039H.\nSection 1(c), referred to in subsec. (b), to be treated, for purposes of the rate of tax, as a reference to the corresponding rate bracket under  section 1(j)(2)(C) of this title , see  section 1(j)(2)(F) of this title .\nThe date of the enactment of this section, referred to in subsec. (c)(2)(A), is the date of enactment of  Pub. L. 107–16 , which was approved  June 7, 2001 .\nA prior section 646 was renumbered  section 645 of this title .\nPub. L. 107–16, title VI, §\u202f671(d) ,  June 7, 2001 ,  115 Stat. 148 , provided that:  “The amendments made by this section [enacting this section and  section 6039H of this title ] shall apply to taxable years ending after the date of the enactment of this Act [ June 7, 2001 ] and to contributions made to electing Settlement Trusts for such year or any subsequent year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'If the amount of income required to be distributed currently exceeds the distributable net income of the trust for the taxable year, the deduction shall be limited to the amount of the distributable net income. For this purpose, the computation of distributable net income shall not include items of income which are not included in the gross income of the trust and the deductions allocable thereto.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Subject to subsection (b), the amount of income for the taxable year required to be distributed currently by a trust described in section 651 shall be included in the gross income of the beneficiaries to whom the income is required to be distributed, whether distributed or not. If such amount exceeds the distributable net income, there shall be included in the gross income of each beneficiary an amount which bears the same ratio to distributable net income as the amount of income required to be distributed to such beneficiary bears to the amount of income required to be distributed to all beneficiaries.\nThe amounts specified in subsection (a) shall have the same character in the hands of the beneficiary as in the hands of the trust. For this purpose, the amounts shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income of the trust as the total of each class bears to the total distributable net income of the trust, unless the terms of the trust specifically allocate different classes of income to different beneficiaries. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary.\nIf the taxable year of a beneficiary is different from that of the trust, the amount which the beneficiary is required to include in gross income in accordance with the provisions of this section shall be based upon the amount of income of the trust for any taxable year or years of the trust ending within or with his taxable year.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The amount determined under subsection (a) shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income of the estate or trust as the total of each class bears to the total distributable net income of the estate or trust in the absence of the allocation of different classes of income under the specific terms of the governing instrument. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduction allowed under section 642(c)) shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary.\nNo deduction shall be allowed under subsection (a) in respect of any portion of the amount allowed as a deduction under that subsection (without regard to this subsection) which is treated under subsection (b) as consisting of any item of distributable net income which is not included in the gross income of the estate or trust.\n1983—Subsec. (a).  Pub. L. 98–67  repealed amendments made by  Pub. L. 97–248 . See 1982 Amendment note below.\n1982—Subsec. (a).  Pub. L. 97–248  provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after  June 30, 1983 , subsec. (a) is amended by inserting at end “For purposes of paragraph (1), the amount of distributable net income shall be computed without the deduction allowed by section 642(c).”. Section 102(a), (b) of  Pub. L. 98–67, title I ,  Aug. 5, 1983 ,  97 Stat. 369 , repealed subtitle A (§§\u202f301–308) of title III of  Pub. L. 97–248  as of the close of  June 30, 1983 , and provided that the Internal Revenue Code of 1954 (this title) shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The amount of income for the taxable year required to be distributed currently to such beneficiary, whether distributed or not. If the amount of income required to be distributed currently to all beneficiaries exceeds the distributable net income (computed without the deduction allowed by section 642(c), relating to deduction for charitable, etc., purposes) of the estate or trust, then, in lieu of the amount provided in the preceding sentence, there shall be included in the gross income of the beneficiary an amount which bears the same ratio to distributable net income (as so computed) as the amount of income required to be distributed currently to such beneficiary bears to the amount required to be distributed currently to all beneficiaries. For purposes of this section, the phrase “the amount of income for the taxable year required to be distributed currently” includes any amount required to be paid out of income or corpus to the extent such amount is paid out of income for such taxable year.\nThe amounts determined under subsection (a) shall have the same character in the hands of the beneficiary as in the hands of the estate or trust. For this purpose, the amounts shall be treated as consisting of the same proportion of each class of items entering into the computation of distributable net income as the total of each class bears to the total distributable net income of the estate or trust unless the terms of the governing instrument specifically allocate different classes of income to different beneficiaries. In the application of the preceding sentence, the items of deduction entering into the computation of distributable net income (including the deduction allowed under section 642(c)) shall be allocated among the items of distributable net income in accordance with regulations prescribed by the Secretary. In the application of this subsection to the amount determined under paragraph (1) of subsection (a), distributable net income shall be computed without regard to any portion of the deduction under section 642(c) which is not attributable to income of the taxable year.\nIf the taxable year of a beneficiary is different from that of the estate or trust, the amount to be included in the gross income of the beneficiary shall be based on the distributable net income of the estate or trust and the amounts properly paid, credited, or required to be distributed to the beneficiary during any taxable year or years of the estate or trust ending within or with his taxable year.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Any amount which, under the terms of the governing instrument, is properly paid or credited as a gift or bequest of a specific sum of money or of specific property and which is paid or credited all at once or in not more than 3 installments. For this purpose an amount which can be paid or credited only from the income of the estate or trust shall not be considered as a gift or bequest of a specific sum of money.\nAny amount paid or permanently set aside or otherwise qualifying for the deduction provided in section 642(c) (computed without regard to sections 508(d), 681, and 4948(c)(4)).\nAny amount paid, credited, or distributed in the taxable year, if section 651 or section 661 applied to such amount for a preceding taxable year of an estate or trust because credited or required to be distributed in such preceding taxable year.\nIf within the first 65 days of any taxable year of an estate or a trust, an amount is properly paid or credited, such amount shall be considered paid or credited on the last day of the preceding taxable year.\nParagraph (1) shall apply with respect to any taxable year of an estate or a trust only if the executor of such estate or the fiduciary of such trust (as the case may be) elects, in such manner and at such time as the Secretary prescribes by regulations, to have paragraph (1) apply for such taxable year.\nFor the sole purpose of determining the amount of distributable net income in the application of sections 661 and 662, in the case of a single trust having more than one beneficiary, substantially separate and independent shares of different beneficiaries in the trust shall be treated as separate trusts. Rules similar to the rules of the preceding provisions of this subsection shall apply to treat substantially separate and independent shares of different beneficiaries in an estate having more than 1 beneficiary as separate estates. The existence of such substantially separate and independent shares and the manner of treatment as separate trusts or estates, including the application of subpart D, shall be determined in accordance with regulations prescribed by the Secretary.\n1997—Subsec. (b).  Pub. L. 105–34, §\u202f1306(a) , inserted “an estate or” before “a trust” in pars. (1) and (2).\nSubsec. (b)(2).  Pub. L. 105–34, §\u202f1306(b) , substituted “the executor of such estate or the fiduciary of such trust (as the case may be)” for “the fiduciary of such trust”.\nSubsec. (c).  Pub. L. 105–34, §\u202f1307(a) , (b), inserted “estates or” before “trusts” in heading, “Rules similar to the rules of the preceding provisions of this subsection shall apply to treat substantially separate and independent shares of different beneficiaries in an estate having more than 1 beneficiary as separate estates.” before last sentence, and “or estates” after “trusts” in last sentence.\n1976—Subsecs. (b)(2), (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1969—Subsec. (a)(2).  Pub. L. 91–172, §\u202f101(j)(17) , substituted “sections 508(d), 681, and 4948(c)(4)” for “section 681”.\nSubsec. (b)(2).  Pub. L. 91–172, §\u202f331(b) , incorporated existing provisions of subpar. (C) of former first sentence making subsec. (b) applicable only to a trust where the fiduciary elected to have the subsec. apply and part of former second sentence making the election applicable in accordance with prescribed regulations; substituted provisions for regulations to spell out manner and time of election for part of former second sentence requiring the election to be made not later than the time prescribed by law for filing the return for the year, including any extension; and omitted: subpars. (A) and (B) of former first sentence which had provided for application of subsec. (b) only to a trust “(A) which was in existence prior to  January 1, 1954 ” and “(B) which, under the terms of its governing instrument, may not distribute in any taxable year amounts in excess of the income of the preceding taxable year”; part of former second sentence which required the election to be made for first taxable year to which this part is applicable; and third sentence that “If such election is made with respect to a taxable year, this subsection shall apply to all amounts properly paid or credited within the first 65 days of all subsequent taxable years of such trust.”\nPub. L. 105–34, title XIII, §\u202f1306(c) ,  Aug. 5, 1997 ,  111 Stat. 1041 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XIII, §\u202f1307(c) ,  Aug. 5, 1997 ,  111 Stat. 1041 , provided that:  “The amendments made by this section [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 101(j)(17) of Pub. L. 91–172  effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by  section 331(b) of Pub. L. 91–172  applicable to taxable years beginning before  Jan. 1, 1970 , see  section 331(d) of Pub. L. 91–172 , set out as a note under  section 665 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Notwithstanding any other provision of this subchapter, the provisions of this section shall, in accordance with regulations prescribed by the Secretary, apply in the case of a charitable remainder annuity trust and a charitable remainder unitrust.\nA charitable remainder annuity trust and a charitable remainder unitrust shall, for any taxable year, not be subject to any tax imposed by this subtitle.\nIn the case of a charitable remainder annuity trust or a charitable remainder unitrust which has unrelated business taxable income (within the meaning of section 512, determined as if part III of subchapter F applied to such trust) for a taxable year, there is hereby imposed on such trust or unitrust an excise tax equal to the amount of such unrelated business taxable income.\nThe tax imposed by subparagraph (A) shall be treated as imposed by chapter 42 for purposes of this title other than subchapter E of chapter 42.\nFor purposes of this paragraph, the references in section 6212(c)(1) to section 4940 shall be deemed to include references to this paragraph.\nFor purposes of determining the amount of any charitable contribution, the remainder interest of a charitable remainder annuity trust or charitable remainder unitrust shall be computed on the basis that an amount equal to 5 percent of the net fair market value of its assets (or a greater amount, if required under the terms of the trust instrument) is to be distributed each year. In the case of the early termination of a trust which is a charitable remainder unitrust by reason of subsection (d)(3), the valuation of interests in such trust for purposes of this section shall be made under rules similar to the rules of the preceding sentence.\nIf a trust would, but for a qualified contingency, meet the requirements of paragraph (1)(A) or (2)(A) of subsection (d), such trust shall be treated as meeting such requirements.\nFor purposes of determining the amount of any charitable contribution (or the actuarial value of any interest), a qualified contingency shall not be taken into account.\nFor purposes of this subsection, the term “qualified contingency” means any provision of a trust which provides that, upon the happening of a contingency, the payments described in paragraph (1)(A) or (2)(A) of subsection (d) (as the case may be) will terminate not later than such payments would otherwise terminate under the trust.\nFor purposes of subparagraph (A), the term “5-percent shareholder” means any person who owns (directly or through the application of section 318(a)) more than 5 percent of the outstanding stock of the corporation which issued such qualified employer securities or of any corporation which is a member of the same controlled group of corporations (within the meaning of section 409( l )(4)) as such corporation. For purposes of the preceding sentence, section 318(a) shall be applied without regard to the exception in paragraph (2)(B)(i) thereof.\nFor excise tax on allocations described in subparagraph (A), see section 4979A.\nThe Secretary shall adjust annually the $30,000 amount under subparagraph (A)(i) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning  October 1, 1993 , and any increase under this subparagraph which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.\nFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table under  section 401 of this title .\n2018—Subsec. (g)(3)(E).  Pub. L. 115–141  substituted “limitation under section 415(c)” for “limitations under sections 415(c) and (e)”.\n2015—Subsec. (e).  Pub. L. 114–113  substituted “of interests” for “for purposes of charitable contribution” in heading and inserted at end of text “In the case of the early termination of a trust which is a charitable remainder unitrust by reason of subsection (d)(3), the valuation of interests in such trust for purposes of this section shall be made under rules similar to the rules of the preceding sentence.”\n2006—Subsec. (c).  Pub. L. 109–432  amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “A charitable remainder annuity trust and a charitable remainder unitrust shall, for any taxable year, not be subject to any tax imposed by this subtitle, unless such trust, for such year, has unrelated business taxable income (within the meaning of section 512, determined as if part III of subchapter F applied to such trust).”\nSubsec. (g)(3)(E).  Pub. L. 109–280  inserted “(determined on the basis of fair market value of securities when allocated to participants)” after “paragraph (7)”.\n2001—Subsec. (g)(3)(E).  Pub. L. 107–16, §\u202f632(a)(3)(H)(i) , substituted “applicable limitation under paragraph (7)” for “limitations under section 415(c)”.\nSubsec. (g)(7).  Pub. L. 107–16, §\u202f632(a)(3)(H)(ii) , added par. (7).\n2000—Subsec. (d)(1)(C), (2)(C).  Pub. L. 106–554  struck out period after “(as defined by subsection (g))”. See 1997 Amendment notes below.\n1998—Subsec. (d)(1)(C), (2)(C).  Pub. L. 105–206  inserted “,\u2000and” at end.\n1997—Subsec. (d)(1)(A).  Pub. L. 105–34, §\u202f1089(a)(1) , inserted “nor more than 50 percent” after “not less than 5 percent”.\nSubsec. (d)(1)(B).  Pub. L. 105–34, §\u202f1530(c)(5) , inserted “and other than qualified gratuitous transfers described in subparagraph (C)” after “subparagraph (A)”.\nPub. L. 105–34, §\u202f1089(b)(1) , struck out “and” at end.\nSubsec. (d)(1)(C).  Pub. L. 105–34, §\u202f1530(a) , which directed amendment of subpar. (C) by striking period at end and inserting “or, to the extent the remainder interest is in qualified employer securities (as defined in subsection (g)(4)), all or part of such securities are to be transferred to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined by subsection (g)).”, was executed by making the insertion after “for such a use” to reflect the probable intent of Congress. Subpar. (C) did not contain a period after amendment by  Pub. L. 105–34, §\u202f1089(b)(1) . See below.\nPub. L. 105–34, §\u202f1089(b)(1) , struck out period after “for such a use”.\nSubsec. (d)(1)(D).  Pub. L. 105–34, §\u202f1089(b)(1) , added subpar. (D).\nSubsec. (d)(2)(A).  Pub. L. 105–34, §\u202f1089(a)(1) , inserted “nor more than 50 percent” after “not less than 5 percent”.\nSubsec. (d)(2)(B).  Pub. L. 105–34, §\u202f1530(c)(5) , inserted “and other than qualified gratuitous transfers described in subparagraph (C)” after “subparagraph (A)”.\nPub. L. 105–34, §\u202f1089(b)(2) , struck out “and” at end.\nSubsec. (d)(2)(C).  Pub. L. 105–34, §\u202f1530(a) , which directed amendment of subpar. (C) by striking period at end and inserting “or, to the extent the remainder interest is in qualified employer securities (as defined in subsection (g)(4)), all or part of such securities are to be transferred to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined by subsection (g)).”, was executed by making the insertion after “for such a use” to reflect the probable intent of Congress. Subpar. (C) did not contain a period after amendment by  Pub. L. 105–34, §\u202f1089(b)(2) . See below.\nPub. L. 105–34, §\u202f1089(b)(2) , struck out period after “for such a use”.\nSubsec. (d)(2)(D).  Pub. L. 105–34, §\u202f1089(b)(2) , added subpar. (D).\nSubsec. (d)(4).  Pub. L. 105–34, §\u202f1089(b)(4) , added par. (4).\nSubsec. (g).  Pub. L. 105–34, §\u202f1530(b) , added subsec. (g).\n1984—Subsec. (f).  Pub. L. 98–369  added subsec. (f).\n1976—Subsec. (a).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 114–113, div. Q, title III, §\u202f344(b) ,  Dec. 18, 2015 ,  129 Stat. 3115 , provided that:  “The amendment made by this section [amending this section] shall apply to terminations of trusts occurring after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 109–432, div. A, title IV, §\u202f424(b) ,  Dec. 20, 2006 ,  120 Stat. 2974 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 109–280, title VIII, §\u202f868(b) ,  Aug. 17, 2006 ,  120 Stat. 1025 , provided that:  “The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 17, 2006 ].”\nAmendment by  Pub. L. 107–16  applicable to years beginning after  Dec. 31, 2001 , see  section 632(a)(4) of Pub. L. 107–16 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title X, §\u202f1089(a)(2) ,  Aug. 5, 1997 ,  111 Stat. 960 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to transfers in trust after  June 18, 1997 .”\nPub. L. 105–34, title X, §\u202f1089(b)(6) ,  Aug. 5, 1997 ,  111 Stat. 961 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section and  section 2055 of this title ] shall apply to transfers in trust after  July 28, 1997 . \n \n “(B)   Special rule for certain decedents .— The amendments made by this subsection shall not apply to transfers in trust under the terms of a will (or other testamentary instrument) executed on or before  July 28, 1997 , if the decedent— “(i)  dies before  January 1, 1999 , without having republished the will (or amended such instrument) by codicil or otherwise, or \n \n “(ii)  was on  July 28, 1997 , under a mental disability to change the disposition of his property and did not regain his competence to dispose of such property before the date of his death.”\nAmendment by section 1530(a), (b), (c)(5) of  Pub. L. 105–34  applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after  Aug. 5, 1997 , see  section 1530(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 98–369 , applicable to transfers after  Dec. 31, 1978 , see  section 1022(e)(2) of Pub. L. 98–369 , set out as a note under  section 2055 of this title .\nSection applicable to transfers in trust made after  July 31, 1969 , see section 201(g)(5), set out as an Effective Date of 1969 Amendment note under  section 170 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'In the case of a qualified trust, any distribution in any taxable year beginning after the date of the enactment of this subsection shall be computed without regard to any undistributed net income.\nThe term “taxes imposed on the trust” means the amount of the taxes which are imposed for any taxable year of the trust under this chapter (without regard to this subpart or part IV of subchapter A) and which, under regulations prescribed by the Secretary, are properly allocable to the undistributed portions of distributable net income and gains in excess of losses from sales or exchanges of capital assets. The amount determined in the preceding sentence shall be reduced by any amount of such taxes deemed distributed under section 666(b) and (c) to any beneficiary.\nIn the case of any foreign trust, the term “taxes imposed on the trust” includes the amount, reduced as provided in the last sentence of paragraph (1), of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on such foreign trust which, as determined under paragraph (1), are so properly allocable. Under rules or regulations prescribed by the Secretary, in the case of any foreign trust of which the settlor or another person would be treated as owner of any portion of the trust under subpart E but for section 672(f), the term “taxes imposed on the trust” includes the allocable amount of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the settlor or such other person in respect of trust income.\nThe date of the enactment of this subsection, referred to in subsec. (c)(1), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\n1997—Subsec. (b).  Pub. L. 105–34, §\u202f507(a)(2) , inserted “except as provided in subsection (c),” after “subpart,” in introductory provisions.\nSubsec. (c).  Pub. L. 105–34, §\u202f507(a)(1) , added subsec. (c).\nSubsec. (d)(1).  Pub. L. 105–34, §\u202f1604(g)(2) , struck out “or 669(d) and (e)” after “666(b) and (c)”.\n1996—Subsec. (c).  Pub. L. 104–188, §\u202f1904(c)(2) , struck out subsec. (c) which read as follows: “ Special Rule Applicable to Distributions by Certain Foreign Trusts .—For purposes of this subpart, any amount paid to a United States person which is from a payor who is not a United States person and which is derived directly or indirectly from a foreign trust created by a United States person shall be deemed in the year of payment to have been directly paid by the foreign trust.”\nSubsec. (d)(2).  Pub. L. 104–188, §\u202f1904(b)(1) , inserted at end “Under rules or regulations prescribed by the Secretary, in the case of any foreign trust of which the settlor or another person would be treated as owner of any portion of the trust under subpart E but for section 672(f), the term ‘taxes imposed on the trust’ includes the allocable amount of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the settlor or such other person in respect of trust income.”\n1990—Subsec. (e).  Pub. L. 101–508  amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this subpart—\n“(1) in the case of a trust (other than a foreign trust created by a United States person), the term ‘preceding taxable year’ does not include any taxable year of the trust—\n“(A) which precedes by more than 5 years the taxable year of the trust in which an accumulation distribution is made, if it is made in a taxable year beginning before  January 1, 1974 , or\n“(B) which begins before  January 1, 1969 , in the case of an accumulation distribution made during a taxable year beginning after  December 31, 1973 , and\n“(2) in the case of a foreign trust created by a United States person, such term does not include any taxable year of the trust to which this part does not apply.\nIn the case of a preceding taxable year with respect to which a trust qualifies (without regard to this subpart) under the provisions of subpart B, for purposes of the application of this subpart to such trust for such taxable year, such trust shall, in accordance with regulations prescribed by the Secretary, be treated as a trust to which subpart C applies.”\n1986—Subsec. (d)(1).  Pub. L. 99–514  substituted “part IV” for “subpart A of part IV”.\n1978—Subsec. (d).  Pub. L. 95–600  designated existing provisions as par. (1), defined “taxes imposed on the trust” to mean imposition of taxes without regard to subpart A of part IV of subchapter (A), and added par. (2).\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f701(b) , (c), inserted provisions that for purposes of sec. 667 the amounts specified in par. (2) of sec. 661(a) not include amounts paid, credited, or required to be distributed to a beneficiary from a trust as income accumulated before the birth of such beneficiary or before such beneficiary reaches 21, and that if the amounts paid, credited, or required to be distributed by the trust for the taxable year do not exceed the income of the trust for such year, there be no accumulation distribution for such year.\nSubsecs. (d), (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e)(1).  Pub. L. 94–455, §\u202f701(d)(2) , struck out provision that preceding taxable year does not include any taxable year of the trust which begins before  Jan. 1, 1969 , in the case of a capital gain distribution made during a taxable year beginning after  Dec. 31, 1968 .\nSubsecs. (f), (g).  Pub. L. 94–455, §\u202f701(d)(3) , struck out subsec. (f) which related to undistributed capital gains, and subsec. (g) which related to capital gain distribution.\n1971—Subsec. (g).  Pub. L. 92–178  struck out “for such taxable year” after “undistributed capital gain” in introductory text.\n1969—Subsec. (a)(2).  Pub. L. 91–172  inserted “attributable to such distributable net income” after “on the trust”.\nSubsec. (b).  Pub. L. 91–172  substituted “Accumulation distribution” for “Accumulation distributions of trusts other than certain foreign trusts” in heading, combined existing provisions of subsecs. (b) and (c) defining “accumulation distribution” in the case of a trust (other than a foreign trust created by a United States person) and of a foreign trust created by a United States person, respectively, in provisions now designated as pars. (1) and (2), deleting “the amount (if in excess of $2,000)” before “by which” in introductory text and inserting “(but not below zero)” in par. (2), and deleted second sentence providing that for purposes of this subsection, the amount specified in par. (2) of section 661(a) shall be determined without regard to section 666 and excepting from “accumulation distributions”: accumulations before birth or attainment of age 21; distributions for emergency needs; distributions, where beneficiary attained specified age or ages and there were not more than 4 distributions, at intervals of 4 or more years; and final distribution of trust was made more than 9 years after date of last transfer to the trust.\nSubsec. (c).  Pub. L. 91–172  substituted “Special rule applicable to distributions by certain foreign trusts” for “Accumulation distribution of certain foreign trusts” in heading, inserted introductory phrase “For purposes of this subpart”, reenacted provisions of former third sentence as the subsection, struck out first sentence which defined in the case of a foreign trust created by a United States person the term “accumulation distribution”, (see subsec. (b) of this section), and deleted second sentence which stated that “For purposes of this subsection, the amount specified in paragraph (2) of section 661(a) shall be determined without regard to section 666.”\nSubsec. (d).  Pub. L. 91–172  substituted “taxable year of the trust” for “taxable year on the trust”, “allocable to the undistributed portions of distributable net income and gains to excess of losses from sales or exchanges of capital assets” for “allocable to the undistributed portion of the distributable net income”, and “reduced by any amount of such taxes deemed distributed under section 666(b) and (c) or 669(d) and (e) to any beneficiary” for “reduced by any amount of such taxes allowed, under sections 667 and 668, as a credit to any beneficiary on account of any accumulation distribution determined for any taxable year”.\nSubsec. (e).  Pub. L. 91–172  substituted provisions of first sentence contained in pars. 1(A) to (C) and (2) for prior first sentence which read “For purposes of this subpart, the term ‘preceding taxable year’ does not include any taxable year of the trust to which this part does not apply” and reenacted provisions of second sentence.\nSubsecs. (f), (g).  Pub. L. 91–172  added subsecs. (f) and (g).\n1962—Subsec. (b).  Pub. L. 87–834, §\u202f7(b)(1) , substituted “Accumulation distributions of trusts other than certain foreign trusts” for “Accumulation distribution” in heading, and inserted “in the case of a trust (other than a foreign trust created by a United States person),” after “purposes of this subpart,”.\nSubsecs. (c) to (e).  Pub. L. 87–834, §\u202f7(b)(2) , added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.\nPub. L. 105–34, title V, §\u202f507(c)(1) ,  Aug. 5, 1997 ,  111 Stat. 857 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to distributions in taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 104–188  effective  Aug. 20, 1996 , with exception for certain trusts, see  section 1904(d) of Pub. L. 104–188 , set out as a note under  section 643 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 95–600, title VII, §\u202f701(q)(3)(A) ,  Nov. 6, 1978 ,  92 Stat. 2910 , provided that:  “The amendments made by paragraph (1) [amending this section and  section 667 of this title ] shall apply to distributions made in taxable years beginning after  December 31, 1975 .”\nAmendment by section 701(b), (c), (d)(2), (3) of  Pub. L. 94–455  applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see section 701(h), set out as a note under  section 667 of this title .\nPub. L. 92–178, title III, §\u202f306(a) ,  Dec. 10, 1971 ,  85 Stat. 524 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1968 .\nPub. L. 91–172, title III, §\u202f331(d) ,  Dec. 30, 1969 ,  83 Stat. 598 , as amended by  Pub. L. 92–178, title III, §\u202f306(b) ,  Dec. 10, 1971 ,  85 Stat. 524 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   General rule.— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 663, 666 to 669, and 6401 of this title] shall apply to taxable years beginning after  December 31, 1968 . \n \n “(2)   Exceptions.— “(A)  Amounts paid, credited, or required to be distributed by a trust (other than a foreign trust created by a United States person) on or before the last day of a taxable year of the trust beginning before  January 1, 1974 , shall not be deemed to be accumulation distributions to the extent that such amounts were accumulated by a trust in taxable years of such trust beginning before  January 1, 1969 , and would have been excepted from the definition of an accumulation distribution by reason of paragraph (1), (2), (3), or (4) of section 665(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as in effect on  December 31, 1968 , if they had been distributed on the last day of the last taxable year of the trust beginning before  January 1, 1969 . \n \n “(B)  For taxable years of a trust beginning before  January 1, 1970 , the first sentence of section 666(a) of the Internal Revenue Code of 1986 (as amended by this section) shall not apply, and the amount of the accumulation distribution of the trust for such taxable years shall be deemed to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of each of the preceding taxable years to the extent that such amount exceeds the total of any undistributed net income for any taxable years intervening between the taxable year with respect of which the accumulation distribution is determined and such preceding taxable year. \n \n “(C)  In the case of a trust which was in existence on  December 31, 1969 , section 669 of the Internal Revenue Code of 1986, as amended by this section, shall not apply to capital gain distributions made to a beneficiary before  January 1, 1973 . If the beneficiary receives capital gain distributions from more than one such trust before  January 1, 1973 , the preceding sentence shall apply to capital gain distributions from only one such trust, such one to be designated by the taxpayer in accordance with regulations prescribed by the Secretary or his delegate. For purposes of the preceding sentence, capital gain distributions received from a trust qualifying under section 2056(b)(5) of the Internal Revenue Code of 1986 by a surviving spouse (who is the beneficiary of only one such trust) shall be disregarded.”\nAmendment of section by  Pub. L. 87–834  applicable with respect to distributions made after  Dec. 31, 1962 , see  section 7(j) of Pub. L. 87–834 , set out as a note under  section 643 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'In the case of a trust which is subject to subpart C, the amount of the accumulation distribution of such trust for a taxable year shall be deemed to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of each of the preceding taxable years, commencing with the earliest of such years, to the extent that such amount exceeds the total of any undistributed net income for all earlier preceding taxable years. The amount deemed to be distributed in any such preceding taxable year under the preceding sentence shall not exceed the undistributed net income for such preceding taxable year. For purposes of this subsection, undistributed net income for each of such preceding taxable years shall be computed without regard to such accumulation distribution and without regard to any accumulation distribution determined for any succeeding taxable year.\nIf any portion of an accumulation distribution for any taxable year is deemed under subsection (a) to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of any preceding taxable year, and such portion of such distribution is not less than the undistributed net income for such preceding taxable year, the trust shall be deemed to have distributed on the last day of such preceding taxable year an additional amount within the meaning of paragraph (2) of section 661(a). Such additional amount shall be equal to the taxes (other than the tax imposed by section 55) imposed on the trust for such preceding taxable year attributable to the undistributed net income. For purposes of this subsection, the undistributed net income and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income shall be computed without regard to such accumulation distribution and without regard to any accumulation distribution determined for any succeeding taxable year.\nIf any portion of an accumulation distribution for any taxable year is deemed under subsection (a) to be an amount within the meaning of paragraph (2) of section 661(a) distributed on the last day of any preceding taxable year and such portion of the accumulation distribution is less than the undistributed net income for such preceding taxable year, the trust shall be deemed to have distributed on the last day of such preceding taxable year an additional amount within the meaning of paragraph (2) of section 661(a). Such additional amount shall be equal to the taxes (other than the tax imposed by section 55) imposed on the trust for such taxable year attributable to the undistributed net income multiplied by the ratio of the portion of the accumulation distribution to the undistributed net income of the trust for such year. For purposes of this subsection, the undistributed net income and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income shall be computed without regard to the accumulation distribution and without regard to any accumulation distribution determined for any succeeding taxable year.\nIf adequate records are not available to determine the proper application of this subpart to an amount distributed by a trust, such amount shall be deemed to be an accumulation distribution consisting of undistributed net income earned during the earliest preceding taxable year of the trust in which it can be established that the trust was in existence.\nNo refund or credit shall be allowed to a trust or a beneficiary of such trust for any preceding taxable year by reason of a distribution deemed to have been made by such trust in such year under this section.\n1980—Subsec. (c).  Pub. L. 96–222  inserted “(other than the tax imposed by section 55)” after “equal to the taxes”.\n1978—Subsec. (b).  Pub. L. 95–600  inserted “(other than the tax imposed by section 55)” after “equal to the taxes”.\n1976—Subsec. (e).  Pub. L. 94–455  added subsec. (e).\n1969—Subsec. (a).  Pub. L. 91–172  substituted in first sentence “In the case of a trust which is subject to subpart (C)” for “In the case of a trust (other than a foreign trust created by a United States person) which for a taxable year beginning after  December 31, 1953 , is subject to subpart (C)”, “for a taxable year” for “for such taxable year”, and “undistributed net income for all earlier preceding taxable years” for “undistributed net incomes for any taxable years intervening between the taxable year with respect to which the accumulation distribution is determined and such preceding taxable year” and in second sentence “for such” for “of such”, inserted in first sentence “,\u2000commencing with the earliest of such years,” after “preceding taxable years”, struck out “5” before “preceding taxable years” in first and third sentences and last sentence which read as follows: “In the case of a foreign trust created by a United States person, this subsection shall apply to the preceding taxable years of the trust without regard to any provision of the preceding sentences which would (but for this sentence) limit its application to the 5 preceding taxable years.”\nSubsec. (b).  Pub. L. 91–172  inserted “attributable to the undistributed net income” after “taxable year” in second sentence and “attributable to such undistributed net income” before “shall be computed” in third sentence.\nSubsec. (c).  Pub. L. 91–172  inserted “attributable to the undistributed net income” before “multiplied by the ratio” in second sentence and “attributable to such undistributed net income” before “shall be computed” in third sentence.\nSubsec. (d).  Pub. L. 91–172  added subsec. (d).\n1962—Subsec. (a).  Pub. L. 87–834  inserted “(other than a foreign trust created by a United States person)” after “In the case of a trust”, and inserted sentence making this subsection applicable, in the case of a foreign trust created by a United States person, to the preceding taxable years of the trust without regard to any provision of the preceding sentences of this subsection which would (but for this sentence) limit its application to the 5 preceding taxable years.\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 421(g) of Pub. L. 95–600 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 94–455  applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see  section 701(h) of Pub. L. 94–455 , set out as a note under  section 667 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1968 , except that for taxable years of a trust beginning before  Jan. 1, 1970 , first sentence of subsec. (a) not applicable and amount of accumulation distribution stated, see section 331(d)(1), (2)(B) of  Pub. L. 91–172 , set out as a note under  section 665 of this title .\nAmendment by  Pub. L. 87–834  applicable with respect to distributions made after  Dec. 31, 1962 , see  section 7(j) of Pub. L. 87–834 , set out as a note under  section 643 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'For purposes of paragraph (1), the taxable income of the beneficiary for any taxable year shall be deemed to be not less than zero.\nFor purposes of paragraph (1), if the amount of the undistributed net income deemed distributed in any preceding taxable year of the trust is less than 25 percent of the amount of the accumulation distribution divided by the number of preceding taxable years to which the accumulation distribution is allocated under section 666(a), the number of preceding taxable years of the trust with respect to which an amount is deemed distributed to a beneficiary under section 666(a) shall be determined without regard to such year.\nIn computing the partial tax under paragraph (1) for any beneficiary, the income of such beneficiary for each of his prior taxable years shall include amounts previously deemed distributed to such beneficiary in such year under section 666 as a result of prior accumulation distributions (whether from the same or another trust).\nIn the case of accumulation distributions made from more than one trust which are includible in the income of a beneficiary in the same taxable year, the distributions shall be deemed to have been made consecutively in whichever order the beneficiary shall determine.\nFor purposes of this paragraph, the term “partial tax” means the partial tax imposed by subsection (a)(2) determined under this subsection without regard to this paragraph.\nFor purposes of this paragraph, the pre-death portion of the partial tax shall be an amount which bears the same ratio to the partial tax as the portion of the accumulation distribution which is attributable to the period before the date of the death of the decedent or the date of the generation-skipping transfer bears to the total accumulation distribution.\nIf, in the same prior taxable year of the beneficiary in which any part of the accumulation distribution from a trust (hereinafter in this paragraph referred to as “third trust”) is deemed under section 666(a) to have been distributed to such beneficiary, some part of prior distributions by each of 2 or more other trusts is deemed under section 666(a) to have been distributed to such beneficiary, then subsections (b) and (c) of section 666 shall not apply with respect to such part of the accumulation distribution from such third trust.\nFor purposes of paragraph (1), an accumulation distribution from a trust to a beneficiary shall be taken into account only if such distribution, when added to any prior accumulation distributions from such trust which are deemed under section 666(a) to have been distributed to such beneficiary for the same prior taxable year of the beneficiary, equals or exceeds $1,000.\nIn determining the increase in tax under subsection (b)(1)(D) for any computation year, the taxes described in section 665(d)(2) which are deemed distributed under section 666(b) or (c) and added under subsection (b)(1)(C) to the taxable income of the beneficiary for any computation year shall, except as provided in subparagraphs (B) and (C), be treated as a credit against the increase in tax for such computation year under subsection (b)(1)(D).\nIf the beneficiary did not choose the benefits of subpart A of part III of subchapter N with respect to the computation year, the beneficiary may in lieu of treating the amounts described in subparagraph (A) (without regard to subparagraph (C)) as a credit may treat such amounts as a deduction in computing the beneficiary’s taxable income under subsection (b)(1)(C) for the computation year.\nFor purposes of determining under subparagraph (A) the amount treated as a credit for any computation year, the limitations under subpart A of part III of subchapter N shall be applied separately with respect to amounts added under subsection (b)(1)(C) to the taxable income of the beneficiary for such computation year. For purposes of computing the increase in tax under subsection (b)(1)(D) for any computation year for which the beneficiary did not choose the benefits of subpart A of part III of subchapter N, the beneficiary shall be treated as having chosen such benefits for such computation year.\nThe items of income, deduction, and credit of the Trust shall retain their character (subject to the application of section 904(f)(5)) to the extent necessary to apply this paragraph.\nFor purposes of this paragraph, the term “computation year” means any of the three taxable years remaining after application of subsection (b)(1)(B).\nIn the case of a distribution from a trust to a nonresident alien individual or to a foreign corporation, the first sentence of subsection (a) shall be applied as if the reference to the determination of character under section 662(b) applied to all amounts instead of just to tax-exempt interest.\n1986—Subsec. (b)(2).  Pub. L. 99–514  amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of paragraph (1), the taxable income of the beneficiary for any taxable year shall be deemed to be not less than—\n“(A) in the case of a beneficiary who is an individual, the zero bracket amount for such year, or\n“(B) in the case of a beneficiary who is a corporation, zero.”\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f701(q)(1)(C) , inserted in last sentence “(other than the amount of taxes described in section 665(d)(2))” after “taxes”.\nSubsec. (b)(6).  Pub. L. 95–600, §\u202f702 ( o )(1), added par. (6).\nSubsec. (d).  Pub. L. 95–600, §\u202f701(q)(1)(B) , added subsec. (d).\nSubsec. (e).  Pub. L. 95–600, §\u202f701(r)(1) , added subsec. (e).\n1977—Subsec. (b)(2).  Pub. L. 95–30  substituted “not less than (A) in the case of a beneficiary who is an individual, the zero bracket amount for such year, or (B) in the case of a beneficiary who is a corporation, zero” for “not less than zero”.\n1976— Pub. L. 94–455 , §§\u202f701(a)(1), 1014(a), substituted provisions relating to the treatment of amounts deemed distributed by trust in preceding years for provisions that no refund or credit be allowed to a trust for any preceding taxable year by reason of a distribution deemed to have been made by such trust in such year under section 666 or 669 and that there be allowed as a credit against the tax imposed by this subtitle on the beneficiary an amount equal to the amount of the taxes deemed distributed to such beneficiary by the trust under sections 666(b) and (c) and 669(d) and (e) during preceding taxable years of the trust on the last day of which the beneficiary was in being, reduced by the amount of the taxes deemed distributed to such beneficiary for such preceding taxable years to the extent that such taxes are taken into account under sections 668(b)(1) and 669(b) in determining the amount of the tax imposed by section 668. See  section 666(e) of this title .\n1969—Subsec. (a).  Pub. L. 91–172  incorporated existing provisions of first sentence in provisions designated as subsec. (a), included distributions made under  section 669 of this title , and struck out provisions for credit of taxes imposed on the trust against tax of beneficiary. See subsec. (b) of this section.\nSubsec. (b).  Pub. L. 91–172  incorporated provision of first sentence for credit of taxes imposed on the trust against tax of beneficiary, and provided for interest free credit and method of computation of its amount. The second sentence had provided that the amount of taxes which may not be refunded or credited to the trust shall be an amount equal to the excess of (1) the taxes imposed on the trust for any preceding taxable year (computed without regard to the accumulation distribution for the taxable year) over (2) the amount of taxes for such preceding taxable year imposed on the undistributed portion of distributable net income of the trust for such preceding taxable year after the application of this subpart on account of the accumulation distribution determined for such taxable year.\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by section 701(q)(1)(B), (C) of  Pub. L. 95–600  applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see  section 701(q)(3)(A) of Pub. L. 95–600 , set out as a note under  section 665 of this title .\nPub. L. 95–600, title VII, §\u202f702 ( o )(2),  Nov. 6, 1978 ,  92 Stat. 2937 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendment made by paragraph (1) [amending this section] shall apply— \n “(A)  in the case of the tax imposed by chapter 11 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954, section 2001 et seq. of this title], to the estates of decedents dying after  December 31, 1979 , and \n \n “(B)  in the case of the tax imposed by chapter 13 [section 2601 et seq. of this title], to any generation-skipping transfer (within the meaning of section 2611(a) of such Code) made after  June 11, 1976 .”\nPub. L. 95–600, title VII, §\u202f701(r)(2) ,  Nov. 6, 1978 ,  92 Stat. 2911 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to distributions made in taxable years beginning after  December 31, 1975 .”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title VII, §\u202f701(h) ,  Oct. 4, 1976 ,  90 Stat. 1580 , provided that:  “The amendments made by subsections (a), (b), (c), (d), and (f) of this section [amending this section and sections 665, 666, 1302, and 6401 of this title and repealing sections 668 and 669 of this title] shall apply to distributions made in taxable years beginning after  December 31, 1975 . The amendments made by subsection (e) of this section [enacting  section 644 of this title  and amending  section 641 of this title ] shall apply to transfers in trust made after  May 21, 1976 .”\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1968 , see  section 331(d) of Pub. L. 91–172 , set out as a note under  section 665 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The interest charge determined under this section with respect to any distribution is the amount of interest which would be determined on the partial tax computed under section 667(b) for the period described in paragraph (2) using the rates and the method under section 6621 applicable to underpayments of tax.\nFor purposes of paragraph (1), the period described in this paragraph is the period which begins on the date which is the applicable number of years before the date of the distribution and which ends on the date of the distribution.\nFor purposes of this subsection, the term “undistributed income year” means any prior taxable year of the trust for which there is undistributed net income, other than a taxable year during all of which the beneficiary receiving the distribution was not a citizen or resident of the United States.\nNotwithstanding section 666, for purposes of this subsection, an accumulation distribution from the trust shall be treated as reducing proportionately the undistributed net income for undistributed income years.\nThe total amount of the interest charge shall not, when added to the total partial tax computed under section 667(b), exceed the amount of the accumulation distribution (other than the amount of tax deemed distributed by section 666(b) or (c)) in respect of which such partial tax was determined.\nThe interest charge determined under this section shall not be allowed as a deduction for purposes of any tax imposed by this title.\nA prior section 668, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 225 ;  Oct. 16, 1962 ,  Pub. L. 87–834, §\u202f7(d) ,  76 Stat. 986 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title III, §\u202f331(a) ,  83 Stat. 594 , related to treatment of amounts deemed distributed in preceding years, prior to repeal by  Pub. L. 94–455, title VII, §\u202f701(a)(3) ,  Oct. 4, 1976 ,  90 Stat. 1577 . See  section 667 of this title .\n1996—Subsec. (a).  Pub. L. 104–188  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of the tax determined under section 667(a), the interest charge is an amount equal to 6 percent of the partial tax computed under section 667(b) multiplied by a fraction—\n“(1) the numerator of which is the sum of the number of taxable years between each taxable year to which the distribution is allocated under section 666(a) and the taxable year of the distribution (counting in each case the taxable year to which the distribution is allocated but not counting the taxable year of the distribution), and\n“(2) the denominator of which is the number of taxable years to which the distribution is allocated under section 666(a).”\n1990—Subsec. (c).  Pub. L. 101–508  substituted heading for one which read “Special rules” and amended text generally, restating provisions of former par. (1) as entire subsection and striking out former par. (2) which provided that for purposes of this section, undistributed net income existing in a trust as of  January 1, 1977 , would be treated as allocated under section 666(a) to the first taxable year beginning after  December 31, 1976 .\nPub. L. 104–188, title I, §\u202f1906(d)(1) ,  Aug. 20, 1996 ,  110 Stat. 1916 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 94–455, title X, §\u202f1014(d) ,  Oct. 4, 1976 ,  90 Stat. 1617 , provided that:  “The amendments made by this section [enacting this section and amending  section 667 of this title ] shall apply to taxable years beginning after  December 31, 1976 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Section, acts  Oct. 16, 1962 ,  Pub. L. 87–834, §\u202f7(e) ,  76 Stat. 986 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title III, §\u202f331(a) ,  83 Stat. 596 , related to the treatment of capital gain deemed distributed in preceding years.\nRepeal applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see  section 701(h) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 667 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Where it is specified in this subpart that the grantor or another person shall be treated as the owner of any portion of a trust, there shall then be included in computing the taxable income and credits of the grantor or the other person those items of income, deductions, and credits against tax of the trust which are attributable to that portion of the trust to the extent that such items would be taken into account under this chapter in computing taxable income or credits against the tax of an individual. Any remaining portion of the trust shall be subject to subparts A through D. No items of a trust shall be included in computing the taxable income and credits of the grantor or of any other person solely on the grounds of his dominion and control over the trust under section 61 (relating to definition of gross income) or any other provision of this title, except as specified in this subpart.\nPub. L. 99–514, title VI, §\u202f646 ,  Oct. 22, 1986 ,  100 Stat. 2292 , as amended by  Pub. L. 100–647, title I, §\u202f1006(k) ,  Nov. 10, 1988 ,  102 Stat. 3411 , provided that: \n “(a)   General Rule .— For purposes of the Internal Revenue Code of 1986, if the entity described in subsection (b) makes an election under subsection (c), such entity shall be treated as a trust to which subpart E of part 1 of subchapter J of chapter 1 of such Code applies. \n \n “(b)   Entity .— An entity is described in this subsection if— “(1)  such entity was created in 1906 as a common law trust and is governed by the trust laws of the State of Minnesota, \n \n “(2)  such entity is exclusively engaged in the leasing of mineral property and activities incidental thereto, and \n \n “(3)  income interests in such entity are publicly traded as of  October 22, 1986 , on a national stock exchange. \n \n \n “(c)   Election.— “(1)   In general .— An election under this subsection to have the provisions of this section apply— “(A)  shall be made by the board of trustees of the entity before  January 1, 1991 , and \n \n “(B)  shall not be valid unless accompanied by an agreement described in paragraph (2). \n \n \n “(2)   Agreement.— “(A)   In general .— The agreement described in this paragraph is a written agreement signed by the board of trustees of the entity which provides that the entity will not acquire any additional property other than property described in subparagraph (B). \n \n “(B)   Permissible acquisitions .— Property is described in this paragraph if it is— “(i)  surface rights to property the acquisition of which— \u2001\u2001\u2001\u2001\u2001“(I)  is necessary to mine mineral rights held on  October 22, 1986 , and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  is required by a written binding agreement between the entity and an unrelated person entered into on or before  October 22, 1986 , \n \n \n “(ii)  surface rights to property which are not described in clause (i) and which— \u2001\u2001\u2001\u2001\u2001“(I)  are acquired in an exchange to which section 1031 [probably means  section 1031 of this title ] applies, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  are necessary to mine mineral rights held on  October 22, 1986 , \n \n \n “(iii)  tangible personal property incidental to the leasing of mineral property and activities incidental thereto, or \n \n “(iv)  part of any required reserves of the entity. \n \n \n \n “(3)   Beginning of period for which election is in effect .— The period during which an election is in effect under this subsection shall begin on the 1st day of the 1st taxable year beginning after the date of the enactment of this Act [ Oct. 22, 1986 ] and following the taxable year in which the election is made. \n \n “(4)   Manner of election .— Any election under this subsection shall be made in such manner as the Secretary of the Treasury or his delegate may prescribe. \n \n \n “(d)   Special Rules for Taxation of Trust.— “(1)   Election treated as a liquidation .— If an election is made under subsection (c) with respect to any entity— “(A)  such entity shall be treated as having been liquidated into a trust immediately before the period described in subsection (c)(3) in a liquidation to which section 333 of the Internal Revenue Code of 1954 (as in effect before the amendments made by this Act) applies, and \n \n “(B)  for purposes of section 333 of such Code (as so in effect)— “(i)  any person holding an income interest in such entity as of such time shall be treated as a qualified electing shareholder, and \n \n “(ii)  the earnings and profits, and the value of money or stock or securities, of such entity shall be apportioned ratably among persons described in clause (i). \n \n \n\n The amendments made by subtitle D of this title [subtitle D (§§\u202f631–634) of title VI of  Pub. L. 99–514 , see Tables for classification] and section 1804 of this Act [see Tables for classification] shall not apply to any liquidation under this paragraph. \n \n “(2)   Termination of election .— If an entity ceases to be described in subsection (b) or violates any term of the agreement described in subsection (c)(2), the entity shall, for purposes of the Internal Revenue Code of 1986, be treated as a corporation for the taxable year in which such cessation or violation occurs and for all subsequent taxable years. \n \n “(3)   Trust ceasing to exist .— Paragraph (2) shall not apply if the trust ceases to be described in subsection (b) or violates the agreement in subsection (c)(2) because the trust ceases to exist. \n \n \n “(e)   Special Rule for Persons Holding Income Interests .— In applying subpart E of part I of subchapter J of chapter 1 of the Internal Revenue Code of 1986 to any entity to which this section applies— “(1)  a reversionary interest shall not be taken into account until it comes into possession, and \n \n “(2)  all items of income, gain, loss, deduction, and credit shall be allocated to persons holding income interests for the period of the allocation.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'For purposes of this subpart, the term “adverse party” means any person having a substantial beneficial interest in the trust which would be adversely affected by the exercise or nonexercise of the power which he possesses respecting the trust. A person having a general power of appointment over the trust property shall be deemed to have a beneficial interest in the trust.\nFor purposes of this subpart, the term “nonadverse party” means any person who is not an adverse party.\nA person shall be considered to have a power described in this subpart even though the exercise of the power is subject to a precedent giving of notice or takes effect only on the expiration of a certain period after the exercise of the power.\nFor purposes of paragraph (1)(A), an individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.\nNotwithstanding any other provision of this subpart, this subpart shall apply only to the extent such application results in an amount (if any) being currently taken into account (directly or through 1 or more entities) under this chapter in computing the income of a citizen or resident of the United States or a domestic corporation.\nExcept as provided in regulations, paragraph (1) shall not apply to any portion of a trust distributions from which are taxable as compensation for services rendered.\nIn the case of any transfer directly or indirectly from a partnership or foreign corporation which the transferee treats as a gift or bequest, the Secretary may recharacterize such transfer in such circumstances as the Secretary determines to be appropriate to prevent the avoidance of the purposes of this subsection.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, including regulations providing that paragraph (1) shall not apply in appropriate cases.\n1998—Subsec. (f)(3)(B).  Pub. L. 105–206  substituted “section 1297” for “section 1296”.\n1996—Subsec. (c).  Pub. L. 104–188, §\u202f1904(a)(2) , inserted “subsection (f) and” before “sections 674” in closing provisions.\nSubsec. (f).  Pub. L. 104–188, §\u202f1904(a)(1) , amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “ Special Rule Where Grantor is Foreign Person.—\n“(1)  In general .—If—\n“(A) but for this subsection, a foreign person would be treated as the owner of any portion of a trust, and\n“(B) such trust has a beneficiary who is a United States person,\nsuch beneficiary shall be treated as the grantor of such portion to the extent such beneficiary has made transfers of property by gift (directly or indirectly) to such foreign person. For purposes of the preceding sentence, any gift shall not be taken into account to the extent such gift would be excluded from taxable gifts under section 2503(b).\n“(2)  Regulations .—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.”\n1990—Subsec. (f).  Pub. L. 101–508  added subsec. (f).\n1988—Subsec. (e).  Pub. L. 100–647  amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this subpart, if a grantor’s spouse is living with the grantor at the time of the creation of any power or interest held by such spouse, the grantor shall be treated as holding such power or interest.”\n1986—Subsec. (e).  Pub. L. 99–514  added subsec. (e).\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 104–188  effective  Aug. 20, 1996 , with exception for certain trusts, see  section 1904(d) of Pub. L. 104–188 , set out as a note under  section 643 of this title .\nPub. L. 101–508, title XI, §\u202f11343(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–472 , provided that:  \n “The amendments made by this section [amending this section] shall apply to— \n “(1)  any trust created after the date of the enactment of this Act [ Nov. 5, 1990 ], and \n \n “(2)  any portion of a trust created on or before such date which is attributable to amounts contributed to the trust after such date.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XIV, §\u202f1401(b) ,  Oct. 22, 1986 ,  100 Stat. 2711 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to transfers in trust made after  March 1, 1986 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The grantor shall be treated as the owner of any portion of a trust in which he has a reversionary interest in either the corpus or the income therefrom, if, as of the inception of that portion of the trust, the value of such interest exceeds 5 percent of the value of such portion.\nFor purposes of subsection (a), the value of the grantor’s reversionary interest shall be determined by assuming the maximum exercise of discretion in favor of the grantor.\nAny postponement of the date specified for the reacquisition of possession or enjoyment of the reversionary interest shall be treated as a new transfer in trust commencing with the date on which the postponement is effective and terminating with the date prescribed by the postponement. However, income for any period shall not be included in the income of the grantor by reason of the preceding sentence if such income would not be so includible in the absence of such postponement.\n1988—Subsecs. (c), (d).  Pub. L. 100–647  added subsecs. (c) and (d).\n1986— Pub. L. 99–514  amended section generally, substituting “the value of such interest exceeds 5 percent of the value of such portion” for “the interest will or may reasonably be expected to take effect in possession or enjoyment within 10 years commencing with the date of the transfer of that portion of the trust” in subsec. (a), adding subsec. (b), striking out subsec. (c) which provided that the grantor not be treated under subsec. (a) as the owner of any portion of a trust where his reversionary interest in such portion was not to take effect in possession or enjoyment until the death of the persons to whom the income therefrom was payable, and subsec. (d) which provided that any postponement of the date specified for the reacquisition of possession or enjoyment of the reversionary interest be treated as a new transfer in trust commencing with the date on which the postponement was effected and terminating with the date prescribed by the postponement.\n1969—Subsec. (b).  Pub. L. 91–172  struck out provisions relating to trusts where the income was payable to a charitable beneficiary for at least a two-year period.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XIV, §\u202f1402(c) ,  Oct. 22, 1986 ,  100 Stat. 2712 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 674, 676, and 677 of this title] shall apply with respect to transfers in trust made after  March 1, 1986 . \n \n “(2)   Transfers pursuant to property settlement agreement .— The amendments made by this section shall not apply to any transfer in trust made after  March 1, 1986 , pursuant to a binding property settlement agreement entered into on or before  March 1, 1986 , which required the taxpayer to establish a grantor trust and for the transfer of a specified sum of money or property to the trust by the taxpayer. This paragraph shall apply only to the extent of the amount required to be transferred under the agreement described in the preceding sentence.”\nAmendment by  Pub. L. 91–172  applicable to transfers in trust made after  April 22, 1969 , see  section 201(g)(3) of Pub. L. 91–172 , set out as a note under  section 170 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The grantor shall be treated as the owner of any portion of a trust in respect of which the beneficial enjoyment of the corpus or the income therefrom is subject to a power of disposition, exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party.\nA power described in section 677(b) to the extent that the grantor would not be subject to tax under that section.\nA power, the exercise of which can only affect the beneficial enjoyment of the income for a period commencing after the occurrence of an event such that a grantor would not be treated as the owner under section 673 if the power were a reversionary interest; but the grantor may be treated as the owner after the occurrence of the event unless the power is relinquished.\nA power exercisable only by will, other than a power in the grantor to appoint by will the income of the trust where the income is accumulated for such disposition by the grantor or may be so accumulated in the discretion of the grantor or a nonadverse party, or both, without the approval or consent of any adverse party.\nA power to determine the beneficial enjoyment of the corpus or the income therefrom if the corpus or income is irrevocably payable for a purpose specified in section 170(c) (relating to definition of charitable contributions) or to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined in section 664(g)(1)).\nA power to allocate receipts and disbursements as between corpus and income, even though expressed in broad language.\nSubsection (a) shall not apply to a power solely exercisable (without the approval or consent of any other person) by a trustee or trustees, none of whom is the grantor or spouse living with the grantor, to distribute, apportion, or accumulate income to or for a beneficiary or beneficiaries, or to, for, or within a class of beneficiaries, whether or not the conditions of paragraph (6) or (7) of subsection (b) are satisfied, if such power is limited by a reasonably definite external standard which is set forth in the trust instrument. A power does not fall within the powers described in this subsection if any person has a power to add to the beneficiary or beneficiaries or to a class of beneficiaries designated to receive the income or corpus except where such action is to provide for after-born or after-adopted children.\n1997—Subsec. (b)(4).  Pub. L. 105–34  inserted before period “or to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined in section 664(g)(1))”.\n1988—Subsec. (c).  Pub. L. 100–647  inserted at end “For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this subsection to the grantor shall be treated as including a reference to such individual.”\n1986—Subsec. (b)(2).  Pub. L. 99–514  substituted “occurrence of event” for “expiration of 10-year period” in heading and in text substituted “the occurrence of an event” for “the expiration of a period” and “the occurrence of the event” for “the expiration of the period”.\nAmendment by  Pub. L. 105–34  applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after  Aug. 5, 1997 , see  section 1530(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable with respect to transfers in trust made after  Mar. 1, 1986 , except for transfers pursuant to a certain binding property settlement agreement, see  section 1402(c) of Pub. L. 99–514 , set out as a note under  section 673 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'A power exercisable by the grantor or a nonadverse party, or both, without the approval or consent of any adverse party enables the grantor or any person to purchase, exchange, or otherwise deal with or dispose of the corpus or the income therefrom for less than an adequate consideration in money or money’s worth.\nA power exercisable by the grantor or a nonadverse party, or both, enables the grantor to borrow the corpus or income, directly or indirectly, without adequate interest or without adequate security except where a trustee (other than the grantor) is authorized under a general lending power to make loans to any person without regard to interest or security.\nThe grantor has directly or indirectly borrowed the corpus or income and has not completely repaid the loan, including any interest, before the beginning of the taxable year. The preceding sentence shall not apply to a loan which provides for adequate interest and adequate security, if such loan is made by a trustee other than the grantor and other than a related or subordinate trustee subservient to the grantor. For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this paragraph to the grantor shall be treated as including a reference to such individual.\nA power of administration is exercisable in a nonfiduciary capacity by any person without the approval or consent of any person in a fiduciary capacity. For purposes of this paragraph, the term “power of administration” means any one or more of the following powers: (A) a power to vote or direct the voting of stock or other securities of a corporation in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; (B) a power to control the investment of the trust funds either by directing investments or reinvestments, or by vetoing proposed investments or reinvestments, to the extent that the trust funds consist of stocks or securities of corporations in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; or (C) a power to reacquire the trust corpus by substituting other property of an equivalent value.\n1988—Par. (3).  Pub. L. 100–647  inserted at end “For periods during which an individual is the spouse of the grantor (within the meaning of section 672(e)(2)), any reference in this paragraph to the grantor shall be treated as including a reference to such individual.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'The grantor shall be treated as the owner of any portion of a trust, whether or not he is treated as such owner under any other provision of this part, where at any time the power to revest in the grantor title to such portion is exercisable by the grantor or a non-adverse party, or both.\nSubsection (a) shall not apply to a power the exercise of which can only affect the beneficial enjoyment of the income for a period commencing after the occurrence of an event such that a grantor would not be treated as the owner under section 673 if the power were a reversionary interest. But the grantor may be treated as the owner after the occurrence of such event unless the power is relinquished.\n1986—Subsec. (b)(2).  Pub. L. 99–514  substituted “occurrence of event” for “expiration of 10-year period” in heading and in text substituted “the occurrence of an event” for “the expiration of a period” and “the occurrence of such event” for “the expiration of such period”.\nAmendment by  Pub. L. 99–514  applicable with respect to transfers in trust made after  Mar. 1, 1986 , except for transfers pursuant to a certain binding property settlement agreement, see  section 1402(c) of Pub. L. 99–514 , set out as a note under  section 673 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Income of a trust shall not be considered taxable to the grantor under subsection (a) or any other provision of this chapter merely because such income in the discretion of another person, the trustee, or the grantor acting as trustee or co-trustee, may be applied or distributed for the support or maintenance of a beneficiary (other than the grantor’s spouse) whom the grantor is legally obligated to support or maintain, except to the extent that such income is so applied or distributed. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income for the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the grantor under section 662.\n1986—Subsec. (a).  Pub. L. 99–514  substituted “the occurrence of an event” for “the expiration of a period” and “the occurrence of the event” for “the expiration of the period” in last sentence.\n1969—Subsec. (a)(1) to (3).  Pub. L. 91–172, §\u202f332(a)(1) , inserted “or the grantor’s spouse” after “the grantor” in pars. (1), (2), and (3).\nSubsec. (b).  Pub. L. 91–172, §\u202f332(a)(2) , inserted “(other than the grantor’s spouse)” after “beneficiary”.\nAmendment by  Pub. L. 99–514  applicable with respect to transfers in trust made after  Mar. 1, 1986 , except for transfers pursuant to a certain binding property settlement agreement, see  section 1402(c) of Pub. L. 99–514 , set out as a note under  section 673 of this title .\nPub. L. 91–172, title III, §\u202f332(b) ,  Dec. 30, 1969 ,  83 Stat. 599 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply in respect of property transferred in trust after  October 9, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Subsection (a) shall not apply with respect to a power over income, as originally granted or thereafter modified, if the grantor of the trust or a transferor (to whom section 679 applies) is otherwise treated as the owner under the provisions of this subpart other than this section.\nSubsection (a) shall not apply to a power which enables such person, in the capacity of trustee or cotrustee, merely to apply the income of the trust to the support or maintenance of a person whom the holder of the power is obligated to support or maintain except to the extent that such income is so applied. In cases where the amounts so applied or distributed are paid out of corpus or out of other than income of the taxable year, such amounts shall be considered to be an amount paid or credited within the meaning of paragraph (2) of section 661(a) and shall be taxed to the holder of the power under section 662.\nSubsection (a) shall not apply with respect to a power which has been renounced or disclaimed within a reasonable time after the holder of the power first became aware of its existence.\nFor provision under which beneficiary of trust is treated as owner of the portion of the trust which consists of stock in an S corporation, see section 1361(d).\n2000—Subsec. (e).  Pub. L. 106–554  substituted “an S corporation” for “an electing small business corporation”.\n1983—Subsec. (e).  Pub. L. 97–448  added subsec. (e).\n1976—Subsec. (b).  Pub. L. 94–455  substituted “if the grantor of the trust or a transferor (to whom section 679 applies) is otherwise treated as the owner under the provisions of this subpart other than this section” for “if the grantor of the trust is otherwise treated as the owner under sections 671 to 677, inclusive”.\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nFor effective date of amendment by  Pub. L. 94–455 , see  section 1013(f)(1) of Pub. L. 94–455 , set out as an Effective Date note under  section 679 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'A United States person who directly or indirectly transfers property to a foreign trust (other than a trust described in section 6048(a)(3)(B)(ii)) shall be treated as the owner for his taxable year of the portion of such trust attributable to such property if for such year there is a United States beneficiary of any portion of such trust.\nTo any transfer by reason of the death of the transferor.\nTo any transfer of property to a trust in exchange for consideration of at least the fair market value of the transferred property. For purposes of the preceding sentence, consideration other than cash shall be taken into account at its fair market value.\nPrincipal payments by the trust on any obligation referred to in subparagraph (A) shall be taken into account on and after the date of the payment in determining the portion of the trust attributable to the property transferred.\nIf a nonresident alien individual has a residency starting date within 5 years after directly or indirectly transferring property to a foreign trust, this section and section 6048 shall be applied as if such individual transferred to such trust on the residency starting date an amount equal to the portion of such trust attributable to the property transferred by such individual to such trust in such transfer.\nFor purposes of this section, undistributed net income for periods before such individual’s residency starting date shall be taken into account in determining the portion of the trust which is attributable to property transferred by such individual to such trust but shall not otherwise be taken into account.\nFor purposes of this paragraph, an individual’s residency starting date is the residency starting date determined under section 7701(b)(2)(A).\nA beneficiary shall not be treated as a United States person in applying this section with respect to any transfer of property to foreign trust if such beneficiary first became a United States person more than 5 years after the date of such transfer.\nFor purposes of paragraph (1)(A), if any United States person who directly or indirectly transfers property to the trust is directly or indirectly involved in any agreement or understanding (whether written, oral, or otherwise) that may result in the income or corpus of the trust being paid or accumulated to or for the benefit of a United States person, such agreement or understanding shall be treated as a term of the trust.\nFor purposes of this subsection, a loan of cash or marketable securities (or the use of any other trust property) directly or indirectly to or by any United States person (whether or not a beneficiary under the terms of the trust) shall be treated as paid or accumulated for the benefit of a United States person. The preceding sentence shall not apply to the extent that the United States person repays the loan at a market rate of interest (or pays the fair market value of the use of such property) within a reasonable period of time.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\n2010—Subsec. (c)(1).  Pub. L. 111–147, §\u202f531(a) , inserted concluding provisions.\nSubsec. (c)(4), (5).  Pub. L. 111–147, §\u202f531(b) , (c), added pars. (4) and (5).\nSubsec. (c)(6).  Pub. L. 111–147, §\u202f533(c) , added par. (6).\nSubsecs. (d), (e).  Pub. L. 111–147, §\u202f532(a) , added subsec. (d) and redesignated former subsec. (d) as (e).\n1998—Subsec. (a)(1).  Pub. L. 105–206  provided that the amendment made by  section 1903(b) of Pub. L. 104–188  shall be applied as if “or” in the material proposed to be stricken were capitalized. See 1996 Amendment note below.\n1997—Subsec. (a)(3)(C)(ii), (iii).  Pub. L. 105–34  inserted “,\u2000owner,” after “grantor”.\n1996—Subsec. (a)(1).  Pub. L. 104–188, §\u202f1903(b) , which directed that subsec. (a) of this section be amended by substituting “section 6048(a)(3)(B)(ii)” for “section 404(a)(4) or 404A”, was executed to par. (1) by making the substitution for “section 404(a)(4) Or section 404A” to reflect the probable intent of Congress. See 1998 Amendment note above.\nSubsec. (a)(2)(B).  Pub. L. 104–188, §\u202f1903(a)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “ Transfers where gain is recognized to transferor .—To any sale or exchange of the property at its fair market value in a transaction in which all of the gain to the transferor is realized at the time of the transfer and is recognized either at such time or is returned as provided in section 453.”\nSubsec. (a)(3).  Pub. L. 104–188, §\u202f1903(a)(2) , added par. (3).\nSubsec. (a)(4), (5).  Pub. L. 104–188, §\u202f1903(c) , added pars. (4) and (5).\nSubsec. (c)(2)(A).  Pub. L. 104–188, §\u202f1903(e) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “in the case of a foreign corporation, more than 50 percent of the total combined voting power of all classes of stock entitled to vote of such corporation is owned (within the meaning of section 958(a)) or is considered to be owned (within the meaning of section 958(b)) by United States shareholders (as defined in section 951(b)),”.\nSubsec. (c)(3).  Pub. L. 104–188, §\u202f1903(d) , added par. (3).\nSubsec. (d).  Pub. L. 104–188, §\u202f1903(f) , added subsec. (d).\n1980—Subsec. (a)(1).  Pub. L. 96–603  inserted “Or section 404A” after “section 404(a)(4)”.\nPub. L. 111–147, title V, §\u202f532(b) ,  Mar. 18, 2010 ,  124 Stat. 114 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers of property after the date of the enactment of this Act [ Mar. 18, 2010 ].”\nAmendment by  section 533(c) of Pub. L. 111–147  applicable to loans made, and uses of property, after  Mar. 18, 2010 , see  section 533(e) of Pub. L. 111–147 , set out as a note under  section 643 of this title .\nAmendment by  section 6018 of Pub. L. 105–206  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see  section 6018(h) of Pub. L. 105–206 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nPub. L. 104–188, title I, §\u202f1903(g) ,  Aug. 20, 1996 ,  110 Stat. 1910 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers of property after  February 6, 1995 .”\nAmendment by  Pub. L. 96–603  applicable with respect to employer contributions or accruals for taxable years beginning after  Dec. 31, 1979 , election to apply amendments retroactively with respect to foreign subsidiaries, allowance or prior deductions in case of certain funded branch plans, and time and manner for making elections, see  section 2(e) of Pub. L. 96–603 , set out as an Effective Date note under  section 404A of this title .\nPub. L. 94–455, title X, §\u202f1013(f)(1) ,  Oct. 4, 1976 ,  90 Stat. 1616 , provided that:  \n “The amendments made by this section (other than subsection (c)) [enacting this section and amending sections 643, 678, 6048, and 6678 of this title] shall apply to taxable years ending after  December 31, 1975 , but only in the case of— \n “(A)  foreign trusts created after  May 21, 1974 , and \n \n “(B)  transfers of property to foreign trusts after  May 21, 1974 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'In computing the deduction allowable under section 642(c) to a trust, no amount otherwise allowable under section 642(c) as a deduction shall be allowed as a deduction with respect to income of the taxable year which is allocable to its unrelated business income for such year. For purposes of the preceding sentence, the term “unrelated business income” means an amount equal to the amount which, if such trust were exempt from tax under section 501(a) by reason of section 501(c)(3), would be computed as its unrelated business taxable income under section 512 (relating to income derived from certain business activities and from certain property acquired with borrowed funds).\nFor disallowance of certain charitable, etc., deductions otherwise allowable under section 642(c), see sections 508(d) and 4948(c)(4).\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f121(d)(2)(B) , substituted reference to certain property acquired with borrowed funds for reference to certain leases.\nSubsec. (b).  Pub. L. 91–172, §\u202f101(j)(18) , (19), redesignated subsec. (d) as (b) and substituted “sections 518(d) and 4948(c)(4)” for “section 503(e)”. Former subsec. (b), dealing generally with the operation of trusts, was struck out.\nSubsec. (c).  Pub. L. 91–172, §\u202f101(j)(18) , struck out subsec. (c) dealing with accumulated income.\nSubsec. (d).  Pub. L. 91–172, §\u202f101(j)(19) , redesignated subsec. (d) as (b).\n1968—Subsec. (c).  Pub. L. 90–630  inserted provision that par. (1) does not apply to income attributable to property transferred to a trust before  January 1, 1951 , by the creator thereof if the trust was irrevocable on such date and if the income is required to be accumulated pursuant to the mandatory terms of the instrument creating the trust.\nAmendment by section 101(j)(18), (19) of  Pub. L. 91–172  effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by  section 121(d)(2)(B) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nPub. L. 90–630, §\u202f6(c) ,  Oct. 22, 1968 ,  82 Stat. 1330 , provided that:  “The amendments made by subsection (a) [amending  section 504 of this title ] and (b) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 . For purposes of sections 3814 and 162(g)(4) of the Internal Revenue Code of 1939, provisions having the same effect as such amendments shall be treated as included in such sections effective with respect to taxable years beginning after  December 31, 1950 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Section,  Aug. 16, 1954, ch. 736 ,  68A Stat. 234 ;  Pub. L. 98–369, div. A, title IV, §\u202f422(d)(2) ,  July 18, 1984 ,  98 Stat. 798 , related to income of an estate or trust in case of divorce.\nRepeal applicable to any divorce or separation instrument (as defined in former  section 71(b)(2) of this title  as in effect before  Dec. 22, 2017 ) executed after  Dec. 31, 2018 , and to such instruments executed on or before  Dec. 31, 2018 , and modified after  Dec. 31, 2018 , if the modification expressly provides that the amendment made by  section 11051 of Pub. L. 115–97  applies to such modification, see  section 11051(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 61 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Except as provided in subsection (b), if property is transferred to a trust in exchange for an interest in other trust property and if the trust would be an investment company (within the meaning of section 351) if it were a corporation, then gain shall be recognized to the transferor.\nSubsection (a) shall not apply to any transfer to a pooled income fund (within the meaning of section 642(c)(5)).\n1976— Pub. L. 94–455  substituted provisions relating to use of trust as an exchange fund for provisions setting forth rule that this part applies only to taxable years beginning after  Dec. 31, 1953 , and ending after the date of the enactment of this title and exceptions thereto.\nAmendment of section by  Pub. L. 94–455  effective on  Apr. 8, 1976 , in taxable years ending on or after such date, see  section 2131(f)(6) of Pub. L. 94–455 , set out as a note under  section 584 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671.\nIf a trust which is not a foreign trust becomes a foreign trust, such trust shall be treated for purposes of this section as having transferred, immediately before becoming a foreign trust, all of its assets to a foreign trust.\nAnother  section 1131(b) of Pub. L. 105–34  amended sections 367, 721, and 1035 of this title.\n2010— Pub. L. 111–312  amended catchline, introductory provisions of subsec. (a), and subsec. (b) to read as if amendment by  Pub. L. 107–16, §\u202f542(e)(1)(A) –(C), had never been enacted. See 2001 Amendment note below. Prior to amendment, subsec. (b) read as follows: “ Exceptions .—\n“(1)  Transfers to certain trusts .—Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any United States person is treated as the owner of such trust under section 671.\n“(2)  Lifetime transfers to nonresident aliens .—Subsection (a) shall not apply to a lifetime transfer to a nonresident alien.”\n2001— Pub. L. 107–16, §\u202f542(e)(1)(A) –(C), amended section by inserting “and nonresident aliens” after “estates” in section catchline and “or to a nonresident alien” after “or trust” in introductory provisions of subsec. (a) and amending subsec. (b) generally. Prior to amendment, text of subsec. (b) read as follows: “Subsection (a) shall not apply to a transfer to a trust by a United States person to the extent that any person is treated as the owner of such trust under section 671.”\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nAmendment by  Pub. L. 107–16  applicable to transfers after  Dec. 31, 2009 , see  section 542(f)(2) of Pub. L. 107–16 , set out as a note under  section 121 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ESTATES, TRUSTS, AND BENEFICIARIES'},
  'content': 'Section 1(e) shall be applied to each qualified funeral trust by treating each beneficiary’s interest in each such trust as a separate trust.\nNo gain or loss shall be recognized to a purchaser of a contract described in subsection (b)(1) by reason of any payment from such trust to such purchaser by reason of cancellation of such contract. If any payment referred to in the preceding sentence consists of property other than money, the basis of such property in the hands of such purchaser shall be the same as the trust’s basis in such property immediately before the payment.\nThe Secretary may prescribe rules for simplified reporting of all trusts having a single trustee and of trusts terminated during the year.\n2008—Subsecs. (c) to (f).  Pub. L. 110–317  redesignated subsecs. (d) to (f) as (c) to (e), respectively, and struck out former subsec. (c), which related to dollar limitation on contributions to qualified funeral trusts.\n1998—Subsec. (b).  Pub. L. 105–206, §\u202f6013(b)(1) , inserted concluding provisions.\nSubsec. (f).  Pub. L. 105–206, §\u202f6013(b)(2) , inserted “and of trusts terminated during the year” before period at end.\nPub. L. 110–317, §\u202f9(c) ,  Aug. 29, 2008 ,  122 Stat. 3530 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 29, 2008 ].”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title XIII, §\u202f1309(c) ,  Aug. 5, 1997 ,  111 Stat. 1043 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years ending after the date of the enactment of this Act [ Aug. 5, 1997 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME IN RESPECT OF DECEDENTS'},
  'content': 'If a right, described in paragraph (1), to receive an amount is transferred by the estate of the decedent or a person who received such right by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent, there shall be included in the gross income of the estate or such person, as the case may be, for the taxable period in which the transfer occurs, the fair market value of such right at the time of such transfer plus the amount by which any consideration for the transfer exceeds such fair market value. For purposes of this paragraph, the term “transfer” includes sale, exchange, or other disposition, or the satisfaction of an installment obligation at other than face value, but does not include transmission at death to the estate of the decedent or a transfer to a person pursuant to the right of such person to receive such amount by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent.\nThe right, described in paragraph (1), to receive an amount shall be treated, in the hands of the estate of the decedent or any person who acquired such right by reason of the death of the decedent, or by bequest, devise, or inheritance from the decedent, as if it had been acquired by the estate or such person in the transaction in which the right to receive the income was originally derived and the amount includible in gross income under paragraph (1) or (2) shall be considered in the hands of the estate or such person to have the character which it would have had in the hands of the decedent if the decedent had lived and received such amount.\nIn any case to which the first sentence of paragraph (2) applies by reason of subparagraph (A), if the decedent and the obligor were related persons (within the meaning of section 453(f)(1)), the fair market value of the installment obligation shall be treated as not less than its face amount.\nFor purposes of subparagraph (A), an installment obligation which becomes unenforceable shall be treated as if it were canceled.\nIn the case of the deduction specified in section 611, to the person described in subsection (a)(1)(A), (B), or (C) who, in the manner described therein, receives the income to which the deduction relates, in the taxable year when such income is received.\nA person who includes an amount in gross income under subsection (a) shall be allowed, for the same taxable year, as a deduction an amount which bears the same ratio to the estate tax attributable to the net value for estate tax purposes of all the items described in subsection (a)(1) as the value for estate tax purposes of the items of gross income or portions thereof in respect of which such person included the amount in gross income (or the amount included in gross income, whichever is lower) bears to the value for estate tax purposes of all the items described in subsection (a)(1).\nIn the case of an estate or trust, the amount allowed as a deduction under subparagraph (A) shall be computed by excluding from the gross income of the estate or trust the portion (if any) of the items described in subsection (a)(1) which is properly paid, credited, or to be distributed to the beneficiaries during the taxable year.\nIn the case of any tax imposed by chapter 13 on a taxable termination or a direct skip occurring as a result of the death of the transferor, there shall be allowed a deduction (under principles similar to the principles of this subsection) for the portion of such tax attributable to items of gross income of the trust which were not properly includible in the gross income of the trust for periods before the date of such termination.\nFor purposes of sections 1(h), 1202, and 1211, the amount taken into account with respect to any item described in subsection (a)(1) shall be reduced (but not below zero) by the amount of the deduction allowable under paragraph (1) of this subsection with respect to such item.\nFor application of this section to income in respect of a deceased partner, see section 753.\n2017—Subsec. (c)(4).  Pub. L. 115–97  struck out “1201,” after “1(h),”.\n2014—Subsec. (d)(1)(A).  Pub. L. 113–295  struck out “after  December 31, 1953 , and” after “annuitant died”.\n2004—Subsec. (c)(4).  Pub. L. 108–311  struck out “of any gain” before “taken into account”.\n1997—Subsec. (c)(1)(C).  Pub. L. 105–34  struck out heading and text of subpar. (C). Text read as follows: “For purposes of this subsection, no deduction shall be allowed for the portion of the estate tax attributable to the increase in such tax under section 4980A(d).”\n1996—Subsec. (c)(5).  Pub. L. 104–188, §\u202f1704(t)(73) , provided that  section 521(b)(27) of Pub. L. 102–318  shall be applied as if “Section 691(c)(5)” appeared instead of “Section 691(c)”. See 1992 Amendment note below.\nPub. L. 104–188, §\u202f1401(b)(9) , struck out par. (5) which read as follows:\n“(5)  Coordination with section 402 (d).—For purposes of section 402(d) (other than paragraph (1)(C) thereof), the total taxable amount of any lump sum distribution shall be reduced by the amount of the deduction allowable under paragraph (1) of this subsection which is attributable to the total taxable amount (determined without regard to this paragraph).”\n1993—Subsec. (c)(4).  Pub. L. 103–66  inserted “1202,” after “1201,”.\n1992—Subsec. (c)(5).  Pub. L. 102–318 , which directed that section 691(c) be amended “in the text and heading” by substituting “402(d)” for “402(e)”, was executed by making the substitution in subsec. (c)(5). See 1996 Amendment note above.\n1990—Subsec. (c)(4).  Pub. L. 101–508  substituted “1(h)” for “1(j)”.\n1989—Subsec. (c)(5).  Pub. L. 101–239  substituted “paragraph (1)(C)” for “paragraph (1)(D)”.\n1988—Subsec. (c)(1)(C).  Pub. L. 100–647  added subpar. (C).\n1987—Subsec. (a)(4), (5)(A).  Pub. L. 100–203  struck out “or 453A” after “section 453”.\n1986—Subsec. (c)(3).  Pub. L. 99–514, §\u202f1432(a)(3) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For purposes of this section—\n“(A) the tax imposed by section 2601 or any State inheritance tax described in section 2602(c)(5)(B) on any generation-skipping transfer shall be treated as a tax imposed by section 2001 on the estate of the deemed transferor (as defined in section 2612(a));\n“(B) any property transferred in such a transfer shall be treated as if it were included in the gross estate of the deemed transferor at the value of such property taken into account for purposes of the tax imposed by section 2601; and\n“(C) under regulations prescribed by the Secretary, any item of gross income subject to the tax imposed under section 2601 shall be treated as income described in subsection (a) if such item is not properly includible in the gross income of the trust on or before the date of the generation-skipping transfer (within the meaning of section 2611(a)) and if such transfer occurs at or after the death of the deemed transferor (as so defined).”\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f301(b)(8) , substituted “capital gain provisions” for “capital gain deduction, etc.” in heading and in text substituted “1(j), 1201, and 1211” for “1201, 1202, and 1211, and for purposes of section 57(a)(9)”.\n1984—Subsec. (b).  Pub. L. 98–369  substituted “section 27” for “section 33” in provisions preceding par. (1) and in provisions of par. (1) preceding subpar. (A).\n1981—Subsec. (c)(3)(A).  Pub. L. 97–34  substituted “section 2602(c)(5)(B)” for “section 2602(c)(5)(C)”.\n1980—Subsec. (a)(4).  Pub. L. 96–471, §\u202f2(b)(5) , substituted “reportable by the decedent on the installment method under section 453 or 453A” for “received by a decedent on the sale or other disposition of property, the income from which was properly reportable by the decedent on the installment basis under section 453” in text preceding subpar. (A) and “section 453B” for “section 453(d)” in subpars. (A) and (B).\nSubsec. (a)(5).  Pub. L. 96–471, §\u202f3 , added par. (5).\nSubsec. (c)(2)(A), (C).  Pub. L. 96–223  repealed the amendments made by  Pub. L. 94–455, §\u202f2005(a)(4) . See 1976 Amendment notes below.\nSubsec. (c)(5).  Pub. L. 96–222  added par. (5).\n1978—Subsec. (c)(4).  Pub. L. 95–600  added par. (4).\n1976—Subsec. (c)(1)(B).  Pub. L. 94–455, §\u202f1901(a)(91) , struck out provision that this subparagraph applies to same taxable years, and to same extent, as is provided in  section 683 of this title .\nSubsec. (c)(2)(A).  Pub. L. 94–455, §\u202f2005(a)(4)(A) , substituted “Federal and State estate taxes (within the meaning of section 1023(f)(3))” for “the tax imposed on the estate of the decedent or any prior decedent under section 2001 or 2101, reduced by the credits against such tax”. See Repeals note below.\nSubsec. (c)(2)(C).  Pub. L. 94–455, §\u202f2005(a)(4)(B) , substituted “which bears the same ratio to the estate tax as such net value bears to the value of the gross estate” for “equal to the excess of the estate tax over the estate tax computed without including in the gross estate such net value”. See Repeals note below.\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f2006(b)(3) , added par. (3).\nSubsec. (d)(3)(A), (B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsecs. (e), (f).  Pub. L. 94–455, §\u202f1951(b)(10)(A) , redesignated subsec. (f) as (e) and struck out former subsec. (e) relating to certain installment obligations transmitted at death.\n1964—Subsec. (c)(2)(B).  Pub. L. 88–272  substituted “421(c)(2), relating to the deduction for estate tax with respect to stock options to which part II of subchapter D applies” for “421(d)(6)(B), relating to the deduction for estate tax with respect to restricted stock options”.\nSubsecs. (e), (f).  Pub. L. 88–570  added subsec. (e) and redesignated former subsec. (e) as (f).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–311  effective as if included in section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003,  Pub. L. 108–27 , see  section 402(b) of Pub. L. 108–311 , set out a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying after  Dec. 31, 1996 , see  section 1073(c) of Pub. L. 105–34 , set out as an Effective Date of Repeal note under  section 4980A of this title .\nAmendment by  section 1401(b)(9) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 103–66  applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to dispositions in taxable years beginning after  Dec. 31, 1987 , with special rules for non-dealers and coordination with Tax Reform Act of 1986, see section 10202(e)(1), (3), (5) of  Pub. L. 100–203 , set out as a note under  section 453 of this title .\nAmendment by  section 301(b)(8) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  section 1432(a)(3) of Pub. L. 99–514  applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as an Effective Date note under  section 2601 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , but inapplicable under certain conditions under will executed before date which is 30 days after  Aug. 13, 1981 , or under trust created by such date, see  section 403(e) of Pub. L. 97–34 , set out as a note under  section 2056 of this title .\nFor effective date of amendment by  section 2(b)(5) of Pub. L. 96–471 , see  section 6(a)(1) of Pub. L. 96–471 , set out as an Effective Date note under  section 453 of this title .\nPub. L. 96–471, §\u202f6(b) ,  Oct. 19, 1980 ,  94 Stat. 2256 , provided:  “The amendment made by section 3 [amending this section] shall apply in the case of decedents dying after the date of the enactment of this Act [ Oct. 19, 1980 ].”\nAmendment by  Pub. L. 96–223  (repealing  section 2005(a)(4) of Pub. L. 94–455  and the amendments made thereby, which had amended this section) applicable in respect of decedents dying after  Dec. 31, 1976 , and except for certain elections, this title to be applied and administered as if those repealed provisions had not been enacted, see section 401(b), (e) of  Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nPub. L. 96–222, title I, §\u202f101(b)(1)(D) ,  Apr. 1, 1980 ,  94 Stat. 205 , provided that:  “The amendment made by subsection (a)(7) [probably means subsection (a)(8), which amended this section and  section 2039 of this title ] shall apply with respect to the estates of decedents dying after the date of the enactment of this Act [ Apr. 1, 1980 ].”\nPub. L. 95–600, title VII, §\u202f702(b)(2) ,  Nov. 6, 1978 ,  92 Stat. 2925 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply with respect to decedents dying after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nAmendment by  section 1901(a)(91) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(b)(10)(A) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nAmendment by section 2005(a)(4)(A), (B) of  Pub. L. 94–455  applicable in respect of decedents dying after  Dec. 31, 1979 , see  section 2005(f)(1) of Pub. L. 94–455 , set out as a note under  section 1015 of this title .\nFor effective date of amendment by  section 2006(b)(3) of Pub. L. 94–455 , see  section 2006(c) of Pub. L. 94–455 , set out as an Effective Date note under  section 2601 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years ending after  Dec. 31, 1963 , see  section 221(e) of Pub. L. 88–272 , set out as a note under  section 421 of this title .\nPub. L. 94–455, §\u202f2005(a)(4) , cited as a credit to this section, and the amendments made thereby, were repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  94 Stat. 299 , resulting in the text of this section reading as it read prior to enactment of section 2005(a)(4). See Effective Date of 1980 Amendments and Revival of Prior Law note above.\nPub. L. 94–455, title XIX, §\u202f1951(b)(10)(B) ,  Oct. 4, 1976 ,  90 Stat. 1839 , provided that:  “Notwithstanding subparagraph (A) [amending this section], any election made under section 691(e) to have subsection (a)(4) of such section apply in the case of an installment obligation shall continue to be effective with respect to taxable years beginning after  December 31, 1976 . Section 691(c) shall not apply in respect of any amount included in gross income by reason of the preceding sentence. The liability under bond filed under section 44(d) of the Internal Revenue Code of 1939 (or corresponding provisions of prior law) in respect of which such an election applies is hereby released with respect to taxable years to which such election applies.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME IN RESPECT OF DECEDENTS'},
  'content': 'For purposes of this section, in the case of an individual who was in a missing status within the meaning of section 6013(f)(3)(A), the date of his death shall be treated as being not earlier than the date on which a determination of his death is made under  section 556 of title 37  of the United States Code. Except in the case of the combat zone designated for purposes of the Vietnam conflict, the preceding sentence shall not cause subsection (a)(1) to apply for any taxable year beginning more than 2 years after the date designated under section 112 as the date of termination of combatant activities in a combat zone.\nFor purposes of paragraph (2), any multinational force in which the United States is participating shall be treated as an ally of the United States.\nIf, but for this paragraph, the amount of tax not imposed by paragraph (1) with respect to a specified terrorist victim is less than $10,000, then such victim shall be treated as having made a payment against the tax imposed by this chapter for such victim’s last taxable year in an amount equal to the excess of $10,000 over the amount of tax not so imposed.\nThe provisions of this subsection shall apply to any astronaut whose death occurs in the line of duty, except that paragraph (3)(B) shall be applied by using the date of the death of the astronaut rather than  September 11, 2001 .\n2014—Subsec. (a)(1).  Pub. L. 113–295  struck out “after  June 24, 1950 ” after “combat zone”.\n2003— Pub. L. 108–121, §\u202f110(a)(3)(A) , inserted “,\u2000astronauts,” after “Forces” in section catchline.\nSubsec. (d)(5).  Pub. L. 108–121, §\u202f110(a)(1) , added par. (5).\n2002— Pub. L. 107–134, §\u202f101(c)(1) , amended section catchline generally. Prior to amendment, catchline read as follows: “Income taxes on members of Armed Forces on death”.\nSubsec. (c).  Pub. L. 107–134, §\u202f113(b)(2) , struck out “sustained overseas” after “injuries” in heading.\nSubsec. (c)(1).  Pub. L. 107–134, §\u202f113(b)(1) , struck out “outside the United States” before “in a terroristic or military action” in introductory provisions.\nSubsec. (d).  Pub. L. 107–134, §\u202f101(a) , added subsec. (d).\n1986—Subsec. (b).  Pub. L. 99–514  amended last sentence generally. Prior to amendment, sentence read as follows: “The preceding sentence shall not cause subsection (a)(1) to apply for any taxable year beginning—\n“(1) after  December 31, 1982 , in the case of service in the combat zone designated for purposes of the Vietnam conflict, or\n“(2) more than 2 years after the date designated under section 112 as the date of termination of combatant activities in that zone, in the case of any combat zone other than that referred to in paragraph (1).”\n1984—Subsec. (c).  Pub. L. 98–259  added subsec. (c).\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f722(g)(2) , which directed amendment of par. (1) of this section by substituting “as a result of wounds or injury which was incurred while the individual was a military or civilian employee of the United States and which was incurred” for “as a result of wounds or injury incurred” was executed to par. (1) of subsec. (c) to reflect the probable intent of Congress.\nSubsec. (c)(2)(A).  Pub. L. 98–369, §\u202f722(g)(3) , inserted “which a preponderance of the evidence indicates was”.\n1983—Subsec. (b)(1).  Pub. L. 97–448  substituted “ December 31, 1982 ” for “ January 2, 1978 ”.\n1976—Subsec. (b).  Pub. L. 94–569  substituted “to apply for any taxable year beginning” for “to apply for any taxable year beginning more than 2 years after” in provisions preceding par. (1), substituted “after  January 2, 1978 ” for “the date of enactment of this subsection” in par. (1), and substituted “more than 2 years after the date designated” for “the date designated” in par. (2).\nPub. L. 94–455  substituted “of members” for “on members” in heading.\n1975—Subsec. (a).  Pub. L. 93–597, §\u202f4(a)(1) , (2), designated existing provisions as subsec. (a), added heading, and in subsec. (a) as so designated, struck out “during an induction period (as defined in section 112(c)(5))”, respectively.\nSubsec. (b).  Pub. L. 93–597, §\u202f4(a)(3) , added subsec. (b).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–121  applicable with respect to any astronaut whose death occurs after  Dec. 31, 2002 , see  section 110(a)(4) of Pub. L. 108–121 , set out as a note under  section 5 of this title .\nPub. L. 107–134, title I, §\u202f101(d) ,  Jan. 23, 2002 ,  115 Stat. 2429 , provided that: \n “(1)   Effective date .— The amendments made by this section [amending this section and sections 5 and 6013 of this title] shall apply to taxable years ending before, on, or after  September 11, 2001 . \n \n “(2)   Waiver of limitations .— If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [ Jan. 23, 2002 ] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.”\nAmendment by  section 113(b) of Pub. L. 107–134  applicable to taxable years ending on or after  Sept. 11, 2001 , see  section 113(c) of Pub. L. 107–134 , set out as a note under  section 104 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 1708(b) of Pub. L. 99–514 , set out as a note under  section 2 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f722(g)(5) ,  July 18, 1984 ,  98 Stat. 975 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— The amendments made by this subsection [amending this section and enacting and amending provisions set out below] shall take effect as if they were included in the amendments made by  section 1 of Public Law 98–259  [amending this section and enacting provisions set out below]. \n \n “(B)   Statute of limitations waived .— Notwithstanding section 6511 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the time for filing a claim for credit or refund of any overpayment of tax resulting from the amendments made by this subsection shall not expire before the date 1 year after the date of the enactment of this Act [ July 18, 1984 ].”\nPub. L. 98–259, §\u202f1(b) ,  Apr. 10, 1984 ,  98 Stat. 143 , as amended by  Pub. L. 98–369, div. A, title VII, §\u202f722(g)(1) ,  July 18, 1984 ,  98 Stat. 974 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply with respect to all taxable years (whether beginning before, on, or after the date of enactment of this Act [ Apr. 10, 1984 ]) of individuals dying after  November 17, 1978 , as a result of wounds or injuries incurred after such date. \n \n “(2)   Statute of limitations waived .— Notwithstanding section 6511 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the time for filing a claim for credit or refund of any overpayment of tax resulting from the amendment made by subsection (a) shall not expire before the date 1 year after the date of the enactment of this Act.”\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 93–597, §\u202f4(b) ,  Jan. 2, 1975 ,  88 Stat. 1952 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years ending on or after  February 28, 1961 .”\nPub. L. 93–597, §\u202f4(c) ,  Jan. 2, 1975 ,  88 Stat. 1952 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “If the refund or credit of any overpayment for any taxable year ending on or after  February 28, 1961 , resulting from the application of section 692 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a) of this section) is prevented at any time before the expiration of one year after the date of the enactment of this Act [ Jan. 2, 1975 ] by the operation of any law or rule of law, but would not have been so prevented if claim for refund or credit therefor were made on the due date for the return for the taxable year of his death (or any later year), refund or credit of such overpayment may, nevertheless, be made or allowed if claim therefor is filed before the expiration of such one-year period.”\nPub. L. 98–369, div. A, title VII, §\u202f722(g)(4) ,  July 18, 1984 ,  98 Stat. 974 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “For purposes of section 692(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the Director General of the Multinational Force and Observers in the Sinai who died on  February 15, 1984 , shall be treated as if he were a civilian employee of the United States while he served as such Director General.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'A partnership as such shall not be subject to the income tax imposed by this chapter. Persons carrying on business as partners shall be liable for income tax only in their separate or individual capacities.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'The character of any item of income, gain, loss, deduction, or credit included in a partner’s distributive share under paragraphs (1) through (7) of subsection (a) shall be determined as if such item were realized directly from the source from which realized by the partnership, or incurred in the same manner as incurred by the partnership.\nIn any case where it is necessary to determine the gross income of a partner for purposes of this title, such amount shall include his distributive share of the gross income of the partnership.\nFor rules relating to procedures for determining the tax treatment of partnership items see subchapter C of chapter 63 (section 6221 and following).\n2003—Subsec. (a)(5).  Pub. L. 108–27  amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends with respect to which there is a deduction under part VIII of subchapter B,”.\n1986—Subsec. (a)(5).  Pub. L. 99–514  amended par. (5) generally. Prior to amendment, par. (5) read as follows: “dividends or interest with respect to which there is an exclusion under section 116 or 128, or a deduction under part VIII of subchapter B,”.\n1984—Subsec. (a)(1), (2).  Pub. L. 98–369  substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1983—Subsec. (a)(5).  Pub. L. 97–448  substituted “an exclusion under section 116 or 128,” for “provided an exclusion under section 116 or 128”.\n1982—Subsec. (d).  Pub. L. 97–248  added subsec. (d).\n1981—Subsec. (a)(5).  Pub. L. 97–34, §\u202f301(b)(6)(C) , inserted reference to “interest” in heading and text which continued the amendment made by  Pub. L. 96–223 .\nPub. L. 97–34, §\u202f301(b)(5) , inserted “or 128” after “section 116”.\n1980—Subsec. (a)(5).  Pub. L. 96–223  inserted “or interest” after “dividends”.\n1976—Subsec. (a)(1), (2).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(L) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (a)(7) to (9).  Pub. L. 94–455 , §§\u202f1901(b)(1)(I)(i), 1906(b)(13)(A), redesignated pars. (8) and (9) as (7) and (8), respectively, and in par. (7), as so redesignated, struck out “or his delegate” after “Secretary”. Former par. (7), which related to partially tax-exempt interest on obligations of the United States or its instrumentalities, was struck out.\nSubsec. (b).  Pub. L. 94–455, §\u202f1901(b)(1)(I)(ii) , substituted “paragraphs (1) through (7)” for “paragraphs (1) through (8)”.\n1964—Subsec. (a)(5).  Pub. L. 88–272  struck out “a credit under section 34,” before “an exclusion”.\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as a note under  section 301 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title IV, §\u202f407(a) ,  Sept. 3, 1982 ,  96 Stat. 670 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by sections 402, 403, and 404 [enacting sections 6221 to 6234 of this title and  section 1508 of Title 28 , Judiciary and Judicial Procedure, amending this section and sections 6031, 6213, 6216, 6422, 6501, 6504, 6511, 6512, 6515, 7422, 7451, 7456, 7459, 7482, and 7485 of this title and  section 1346 of Title 28 , and enacting provisions set out as a note under  section 6031 of this title ] shall apply to partnership taxable years beginning after the date of the enactment of this Act [ Sept. 3, 1982 ]. \n \n “(2)  [Former] Section 6232 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to periods after  December 31, 1982 . \n \n “(3)  The amendments made by sections 402, 403, and 404 shall apply to any partnership taxable year (or in the case of [former] section 6232 of such Code, to any period) ending after the date of the enactment of this Act [ Sept. 3, 1982 ] if the partnership, each partner, and each indirect partner requests such application and the Secretary of the Treasury or his delegate consents to such application.”\nAmendment by  section 301(b)(5) of Pub. L. 97–34  applicable to taxable years ending after  Sept. 30, 1981 , and amendment by  section 301(b)(6)(C) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 301(d) of Pub. L. 97–34 , set out as a note under  section 265 of this title .\nAmendment by  Pub. L. 96–223  applicable with respect to taxable years beginning after  Dec. 31, 1980 , and before  Jan. 1, 1982 , see  section 404(c) of Pub. L. 96–223 , set out as a note under  section 265 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by section 1901(b)(1)(I)(i), (ii) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 88–272  applicable with respect to dividends received after  Dec. 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': '1993—Subsec. (b)(1).  Pub. L. 103–66  substituted “subsection (b)(5) or (c)(3)” for “subsection (b)(5)”.\n1988—Subsec. (b)(1).  Pub. L. 100–647  substituted “subsection (b)(5)” for “subsection (b)(5) or (d)(4)”.\n1986—Subsec. (b).  Pub. L. 99–514  struck out former pars. (1) and (3) which related to elections under sections 57(c) and 163(d), respectively, and redesignated former pars. (2), (4), and (5), as pars. (1), (2), and (3), respectively.\n1980—Subsec. (b).  Pub. L. 96–589  inserted reference to section 108(b)(5) and (d)(4).\n1977—Subsec. (a)(2).  Pub. L. 95–30  struck out subpar. (A) which made reference to the standard deduction provided in section 141, and redesignated subpars. (B) to (G) as (A) to (F), respectively.\n1976—Subsec. (a)(2)(G).  Pub. L. 94–455, §\u202f2115(c)(2) , substituted “wells” for “production subject to the provisions of section 613A(c)”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1901(b)(21)(F) , struck out “under section 615 (relating to pre-1970 exploration expenditures),” after “of the United States, and any election”.\n1975—Subsec. (a)(2)(G).  Pub. L. 94–12  added subpar. (G).\n1971—Subsec. (b).  Pub. L. 92–178  substituted “,” for “or” after “(relating to pre-1970 exploration expenditures)” and inserted “under section 57(c) (relating to definition of net lease), or under section 163(d) (relating to limitation on interest on investment indebtedness)” after “(relating to deduction and recapture of certain mining exploration expenditures)”.\n1969—Subsec. (b).  Pub. L. 91–172  substituted “(relating to pre-1970 exploration expenditures) or under section 617 (relating to deduction and recapture of certain mining exploration expenditures)” for “(relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining)”.\n1966—Subsec. (b).  Pub. L. 89–570  provided for election under section 615 (relating to exploration expenditures) or under section 617 (relating to additional exploration expenditures in the case of domestic mining).\nAmendment by  Pub. L. 103–66  applicable to discharges after  Dec. 31, 1992 , in taxable years ending after such date, see  section 13150(d) of Pub. L. 103–66 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 511(d)(2)(B) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 511(e) of Pub. L. 99–514 , set out as a note under  section 163 of this title .\nAmendment by  section 701(e)(4)(E) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or after  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to transactions occurring after  Sept. 30, 1979 ; in a specified manner, see section 7(a)(1), (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  section 1901(b)(21)(F) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 2115(c)(2) of Pub. L. 94–455  effective on  Jan. 1, 1975  and applicable to taxable years ending after  Dec. 31, 1974 , see  section 2115(f) of Pub. L. 94–455 , set out as a note under  section 613A of this title .\nAmendment by  Pub. L. 94–12  effective  Jan. 1, 1975 , to apply to taxable years ending after  Dec. 31, 1974 , see  section 501(c) of Pub. L. 94–12 , set out as an Effective Date note under  section 613A of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to exploration expenditures paid or incurred after  Dec. 31, 1969 , see  section 504(d)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 243 of this title .\nAmendment by  Pub. L. 89–570  applicable to taxable years ending after  Sept. 12, 1966 , but only in respect of expenditures paid or incurred after such date, see  section 3 of Pub. L. 89–570 , set out as an Effective Date note under  section 617 of this title .\nFor applicability of amendment by  section 701(e)(4)(E) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'A partner’s distributive share of income, gain, loss, deduction, or credit shall, except as otherwise provided in this chapter, be determined by the partnership agreement.\nUnder regulations prescribed by the Secretary, rules similar to the rules of paragraph (1) shall apply to contributions by a partner (using the cash receipts and disbursements method of accounting) of accounts payable and other accrued but unpaid items. Any reference in paragraph (1) or (2) to the contributing partner shall be treated as including a reference to any successor of such partner.\nA partner’s distributive share of partnership loss (including capital loss) shall be allowed only to the extent of the adjusted basis of such partner’s interest in the partnership at the end of the partnership year in which such loss occurred.\nAny excess of such loss over such basis shall be allowed as a deduction at the end of the partnership year in which such excess is repaid to the partnership.\nIn determining the amount of any loss under paragraph (1), there shall be taken into account the partner’s distributive share of amounts described in paragraphs (4) and (6) of section 702(a).\nIn the case of a charitable contribution of property whose fair market value exceeds its adjusted basis, subparagraph (A) shall not apply to the extent of the partner’s distributive share of such excess.\nIn the case of any partnership interest created by gift, the distributive share of the donee under the partnership agreement shall be includible in his gross income, except to the extent that such share is determined without allowance of reasonable compensation for services rendered to the partnership by the donor, and except to the extent that the portion of such share attributable to donated capital is proportionately greater than the share of the donor attributable to the donor’s capital. The distributive share of a partner in the earnings of the partnership shall not be diminished because of absence due to military service.\nFor purposes of this subsection, an interest purchased by one member of a family from another shall be considered to be created by gift from the seller, and the fair market value of the purchased interest shall be considered to be donated capital. The “family” of any individual shall include only his spouse, ancestors, and lineal descendants, and any trusts for the primary benefit of such persons.\nFor rules in the case of the sale, exchange, liquidation, or reduction of a partner’s interest, see section 706(c)(2).\n2017—Subsec. (d).  Pub. L. 115–97  designated first and second sentences of existing provisions as pars. (1) and (2), respectively, inserted headings, and added par. (3).\n2015—Subsec. (e).  Pub. L. 114–74  substituted “Partnership interests created by gift” for “Family partnerships” in heading, redesignated pars. (2) and (3) as (1) and (2), respectively, substituted “this subsection” for “this section” in par. (2), and struck out former par. (1). Prior to amendment, text of par. (1) read as follows: “A person shall be recognized as a partner for purposes of this subtitle if he owns a capital interest in a partnership in which capital is a material income-producing factor, whether or not such interest was derived by purchase or gift from any other person.”\n2004—Subsec. (c)(1)(C).  Pub. L. 108–357  added subpar. (C).\n1997—Subsec. (c)(1)(B).  Pub. L. 105–34  substituted “7 years” for “5 years” in introductory provisions.\n1992—Subsec. (c)(1)(B).  Pub. L. 102–486  substituted “is distributed (directly or indirectly)” for “is distributed”.\n1989—Subsec. (c).  Pub. L. 101–239  amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Under regulations prescribed by the Secretary, income, gain, loss, and deduction with respect to property contributed to the partnership by a partner shall be shared among partners so as to take account of the variation between the basis of the property to the partnership and its fair market value at the time of contribution. Under regulations prescribed by the Secretary, rules similar to the rules of the preceding sentence shall apply to contributions by a partner (using the cash receipts and disbursements method of accounting) of accounts payable and other accrued but unpaid items.”\n1984—Subsec. (c).  Pub. L. 98–369  amended subsec. (c) generally, substituting provisions directing that, under regulations prescribed by the Secretary, income, gain, loss, and deduction with respect to property contributed to the partnership by a partner be shared among partners so as to take account of the variation between the basis of the property to the partnership and its fair market value at the time of contribution, and that similar rules apply to contributions by a partner (using the cash receipts and disbursements method of accounting) of accounts payable and other accrued but unpaid items for provisions which had directed that, if the partnership agreement so provided, depreciation, depletion, or gain or loss with respect to property contributed to the partnership by a partner would under regulations prescribed by the Secretary, be shared among the partners so as to take account of the variation between the basis of the property to the partnership and its fair market value at the time of contribution, and struck out provisions which had directed that in determining a partner’s distributive share of items described in section 702(a), depreciation, depletion, or gain or loss with respect to property contributed to the partnership by a partner would, except to the extent otherwise provided, be allocated among the partners in the same manner as if such property had been purchased by the partnership and that if the partnership agreement did not provide otherwise, depreciation, depletion, or gain or loss with respect to undivided interests in property contributed to a partnership would be determined as though such undivided interests had not been contributed to the partnership.\n1978—Subsec. (d).  Pub. L. 95–600  struck out provisions relating to adjusted basis of a partner’s interest.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f213(c)(2) , substituted “except as otherwise provided in this chapter” for “except as otherwise provided in this section”.\nSubsec. (b).  Pub. L. 94–455, §\u202f213(d) , among other changes, substituted “Determination of distributive share” for “Distributive share determined by income or loss ratio” in heading, in provisions preceding par. (1) “the partner’s interest in the partnership (determined by taking into account all facts and circumstances)” for “his distributive share of taxable income or loss of the partnership, as described in section 702(a)(9), for the taxable year”, and in par. (2) provision relating to a lack of substantial economic effect in a partnership agreement for provisions relating to the partnership agreement’s purpose being the avoidance or evasion of taxes.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d).  Pub. L. 94–455, §\u202f213(e) , inserted provision relating to the determination of the adjusted basis of a partner’s liability where there is no personal liability and the applicability of such determination where  section 465 of this title  applies or the principal activity of the partnership is real estate investment.\nSubsec. (f).  Pub. L. 94–455, §\u202f213(c)(3)(A) , added subsec. (f).\nPub. L. 115–97, title I, §\u202f13503(b) ,  Dec. 22, 2017 ,  131 Stat. 2141 , provided that:  “The amendments made by this section [amending this section] shall apply to partnership taxable years beginning after  December 31, 2017 .”\nPub. L. 114–74, title XI, §\u202f1102(c) ,  Nov. 2, 2015 ,  129 Stat. 639 , provided that:  “The amendments made by this section [amending this section and  section 761 of this title ] shall apply to partnership taxable years beginning after  December 31, 2015 .”\nPub. L. 108–357, title VIII, §\u202f833(d)(1) ,  Oct. 22, 2004 ,  118 Stat. 1592 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to contributions made after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 105–34, title X, §\u202f1063(b) ,  Aug. 5, 1997 ,  111 Stat. 947 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section and  section 737 of this title ] shall apply to property contributed to a partnership after  June 8, 1997 . \n \n “(2)   Binding contracts .— The amendment made by subsection (a) shall not apply to any property contributed pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such contribution if such contract provides for the contribution of a fixed amount of property.”\nPub. L. 102–486, title XIX, §\u202f1937(c) ,  Oct. 24, 1992 ,  106 Stat. 3033 , provided that:  “The amendments made by this section [enacting  section 737 of this title  and amending this section and  section 731 of this title ] shall apply to distributions on or after  June 25, 1992 .”\nPub. L. 101–239, title VII, §\u202f7642(b) ,  Dec. 19, 1989 ,  103 Stat. 2381 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply in the case of property contributed to the partnership after  October 3, 1989 , in taxable years ending after such date.”\nPub. L. 98–369, div. A, title I, §\u202f71(c) ,  July 18, 1984 ,  98 Stat. 589 , provided that:  “The amendments made by this section [amending this section and sections 613A and 743 of this title] shall apply with respect to property contributed to the partnership after  March 31, 1984 , in taxable years ending after such date.”\nAmendment by  Pub. L. 95–600  and enactment of provision set out as a note under this section by  section 201(b)(2) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 204(a) of Pub. L. 95–600 , set out as a note under  section 465 of this title .\nAmendment by section 213(c)(2), (c)(3)(A), (d) of  Pub. L. 94–455  applicable in the case of partnership taxable years beginning after  Dec. 31, 1975 , see  section 213(f)(1) of Pub. L. 94–455 , set out as an Effective Date note under  section 709 of this title .\nAmendment by  section 213(e) of Pub. L. 94–455  applicable to liabilities incurred after  Dec. 31, 1976 , see  section 213(f)(2) of Pub. L. 94–455 , set out as an Effective Date note under  section 709 of this title .\nPub. L. 95–600, title II, §\u202f201(b)(2) ,  Nov. 6, 1978 ,  92 Stat. 2816 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In the case of a loss which was not allowed for any taxable year by reason of the last 2 sentences of section 704(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the date of the enactment of this Act [ Nov. 6, 1978 ]), such loss shall be treated as a deduction (subject to section 465(a) of such Code) for the first taxable year beginning after  December 31, 1978 . Section 465(a) of such Code (as amended by this section) shall not apply with respect to partnership liabilities to which the last 2 sentences of section 704(d) of such Code (as in effect on the day before the date of enactment of this Act) did not apply because of the provisions of section 213(f)(2) of the Tax Reform Act of 1976 [set out as a note under  section 709 of this title ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'The Secretary shall prescribe by regulations the circumstances under which the adjusted basis of a partner’s interest in a partnership may be determined by reference to his proportionate share of the adjusted basis of partnership property upon a termination of the partnership.\n1984—Subsec. (a)(3).  Pub. L. 98–369  substituted “for any partnership oil and gas property to the extent such deduction does not exceed the proportionate share of the adjusted basis of such property allocated to such partner under section 613A(c)(7)(D)” for “under section 611 with respect to oil and gas wells”.\n1976—Subsec. (a)(3).  Pub. L. 94–455, §\u202f2115(c)(3) , added par. (3).\nSubsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nPub. L. 98–369, div. A, title VII, §\u202f722(e)(3)(A) ,  July 18, 1984 ,  98 Stat. 974 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect on  January 1, 1975 .”\nAmendment by  section 2115(c)(3) of Pub. L. 94–455  effective on  Jan. 1, 1975 , and applicable to taxable years ending after  Dec. 31, 1974 , see  section 2115(f) of Pub. L. 94–455 , set out as a note under  section 613A of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'In computing the taxable income of a partner for a taxable year, the inclusions required by section 702 and section 707(c) with respect to a partnership shall be based on the income, gain, loss, deduction, or credit of the partnership for any taxable year of the partnership ending within or with the taxable year of the partner.\nThe taxable year of a partnership shall be determined as though the partnership were a taxpayer.\nA partnership may have a taxable year not described in subparagraph (B) if it establishes, to the satisfaction of the Secretary, a business purpose therefor. For purposes of this subparagraph, any deferral of income to partners shall not be treated as a business purpose.\nA partner may not change to a taxable year other than that of a partnership in which he is a principal partner unless he establishes, to the satisfaction of the Secretary, a business purpose therefor.\nFor the purpose of this subsection, a principal partner is a partner having an interest of 5 percent or more in partnership profits or capital.\nThe term “majority interest taxable year” means the taxable year (if any) which, on each testing day, constituted the taxable year of 1 or more partners having (on such day) an aggregate interest in partnership profits and capital of more than 50 percent.\nExcept as provided in regulations necessary to prevent the avoidance of this section, if, by reason of paragraph (1)(B)(i), the taxable year of a partnership is changed, such partnership shall not be required to change to another taxable year for either of the 2 taxable years following the year of change.\nExcept as provided in regulations, for purposes of determining the taxable year to which a partnership is required to change by reason of this subsection, changes in taxable years of other persons required by this subsection, section 441(i), section 584(i), section 644, or section 1378(a) shall be taken into account.\nExcept in the case of a termination of a partnership and except as provided in paragraph (2) of this subsection, the taxable year of a partnership shall not close as the result of the death of a partner, the entry of a new partner, the liquidation of a partner’s interest in the partnership, or the sale or exchange of a partner’s interest in the partnership.\nThe taxable year of a partnership shall close with respect to a partner whose entire interest in the partnership terminates (whether by reason of death, liquidation, or otherwise).\nThe taxable year of a partnership shall not close (other than at the end of a partnership’s taxable year as determined under subsection (b)(1)) with respect to a partner who sells or exchanges less than his entire interest in the partnership or with respect to a partner whose interest is reduced (whether by entry of a new partner, partial liquidation of a partner’s interest, gift, or otherwise).\nExcept as provided in paragraphs (2) and (3), if during any taxable year of the partnership there is a change in any partner’s interest in the partnership, each partner’s distributive share of any item of income, gain, loss, deduction, or credit of the partnership for such taxable year shall be determined by the use of any method prescribed by the Secretary by regulations which takes into account the varying interests of the partners in the partnership during such taxable year.\nFor purposes of this subsection, the taxable year of a partnership shall be determined without regard to subsection (c)(2)(A).\n2018—Subsec. (b)(5).  Pub. L. 115–141  substituted “section 584(i)” for “section 584(h)”.\n1997—Subsec. (b)(5).  Pub. L. 105–34, §\u202f507(b)(2) , substituted “section 644” for “section 645”.\nSubsec. (c)(2).  Pub. L. 105–34, §\u202f1246(b) , substituted “Treatment of dispositions” for “Partner who retires or sells interest in partnership” as heading.\nSubsec. (c)(2)(A).  Pub. L. 105–34, §\u202f1246(a) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “The taxable year of a partnership shall close—\n“(i) with respect to a partner who sells or exchanges his entire interest in a partnership, and\n“(ii) with respect to a partner whose interest is liquidated, except that the taxable year of a partnership with respect to a partner who dies shall not close prior to the end of the partnership’s taxable year.”\n1988—Subsec. (b)(1)(B)(i).  Pub. L. 100–647, §\u202f1008(e)(1)(A) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the taxable year of 1 or more of its partners who have an aggregate interest in partnership profits and capital of greater than 50 percent,”.\nSubsec. (b)(1)(B)(iii).  Pub. L. 100–647, §\u202f1008(e)(2) , substituted “unless the Secretary by regulations prescribes another period” for “or such other period as the Secretary may prescribe in regulations”.\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1008(e)(1)(B) , substituted “Majority interest taxable year; limitation on required changes” for “Application of majority interest rule” in heading and amended text generally. Prior to amendment, text read as follows: “Clause (i) of paragraph (1)(B) shall not apply to any taxable year of a partnership unless the period which constitutes the taxable year of 1 or more of its partners who have an aggregate interest in partnership profits and capital of greater than 50 percent has been the same for—\n“(A) the 3-taxable year period of such partner or partners ending on or before the beginning of such taxable year of the partnership, or\n“(B) if the partnership has not been in existence during all of such 3-taxable year period, the taxable years of such partner or partners ending with or within the period of existence.\nThis paragraph shall apply without regard to whether the same partners or interests are taken into account in determining the 50 percent interest during any period.”\nSubsec. (b)(5).  Pub. L. 100–647, §\u202f1008(e)(3) , added par. (5).\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f806(a)(3) , struck out “Adoption of” before “taxable year” in heading.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f806(a)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The taxable year of a partnership shall be determined as though the partnership were a taxpayer. A partnership may not change to, or adopt, a taxable year other than that of all its principal partners unless it establishes, to the satisfaction of the Secretary, a business purpose therefor.”\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f806(a)(2) , added par. (4).\nSubsec. (d)(2)(A)(i).  Pub. L. 99–514, §\u202f1805(a)(1)(A) , substituted “such item” for “each such item”.\nSubsec. (d)(2)(B).  Pub. L. 99–514, §\u202f1805(a)(1)(B) , in introductory provisions, struck out “which are described in paragraph (1) and” after “the following items”.\nSubsec. (d)(2)(C)(i).  Pub. L. 99–514, §\u202f1805(a)(2) , substituted “the first day of the taxable year” for “the first day of such taxable year”.\n1984—Subsec. (c)(2)(A).  Pub. L. 98–369, §\u202f72(b)(1) , struck out last sentence providing that such partner’s distributive share of item described in section 702(a) for such year shall be determined, under regulations prescribed by the Secretary, for the period ending with such sale, exchange, or liquidation.\nSubsec. (c)(2)(B).  Pub. L. 98–369, §\u202f72(b)(2) , struck out “,\u2000but such partner’s distributive share of items described in section 702(a) shall be determined by taking into account his varying interests in the partnership during the taxable year” after “otherwise)”.\nSubsec. (d).  Pub. L. 98–369, §\u202f72(a) , added subsec. (d).\n1976—Subsec. (b)(1), (2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(2).  Pub. L. 94–455 , §§\u202f213(c)(1), 1906(b)(13)(A), substituted “or with respect to a partner whose interest is reduced (whether by entry of a new partner, partial liquidation of a partner’s interest, gift, or otherwise)” for “or with respect to a partner whose interest is reduced”, in par. (B), and struck out “or his delegate” after “Secretary” in par. (A).\nAmendment by  section 507(b)(2) of Pub. L. 105–34  applicable to sales or exchanges after  Aug. 5, 1997 , see  section 507(c)(2) of Pub. L. 105–34 , set out as a note under  section 644 of this title .\nPub. L. 105–34, title XII, §\u202f1246(c) ,  Aug. 5, 1997 ,  111 Stat. 1030 , provided that:  “The amendments made by this section [amending this section] shall apply to partnership taxable years beginning after  December 31, 1997 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 806(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with special provisions applicable to taxpayers who are required to change their accounting periods, see  section 806(e) of Pub. L. 99–514 , set out as a note under  section 1378 of this title .\nAmendment by  section 1805(a) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f72(c) ,  July 18, 1984 ,  98 Stat. 591 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by this section [amending this section] shall apply— \n “(1)  in the case of items described in section 706(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)), to amounts attributable to periods after  March 31, 1984 , and \n \n “(2)  in the case of items described in section 706(d)(3) of such Code (as added by subsection (a)), to amounts paid or accrued by the other partnership after  March 31, 1984 .”\nAmendment by  section 213(c)(1) of Pub. L. 94–455  applicable in the case of partnership taxable years beginning after  Dec. 31, 1975 , see  section 213(f) of Pub. L. 94–455 , set out as an Effective Date note under  section 709 of this title .\nNothing in  section 806 of Pub. L. 99–514  or in any legislative history relating thereto to be construed as requiring the Secretary of the Treasury or his delegate to permit an automatic change of a taxable year, see  section 1008(e)(9) of Pub. L. 100–647 , set out as a note under  section 1378 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'If a partner engages in a transaction with a partnership other than in his capacity as a member of such partnership, the transaction shall, except as otherwise provided in this section, be considered as occurring between the partnership and one who is not a partner.\nFor purposes of paragraphs (1) and (2) of this subsection, the ownership of a capital or profits interest in a partnership shall be determined in accordance with the rules for constructive ownership of stock provided in section 267(c) other than paragraph (3) of such section.\nTo the extent determined without regard to the income of the partnership, payments to a partner for services or the use of capital shall be considered as made to one who is not a member of the partnership, but only for the purposes of section 61(a) (relating to gross income) and, subject to section 263, for purposes of section 162(a) (relating to trade or business expenses).\n1986—Subsec. (a)(2)(B)(iii).  Pub. L. 99–514, §\u202f1805(b) , substituted “sale or exchange of property” for “sale of property”.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1812(c)(3)(B) , inserted at end “For purposes of section 267(a)(2), partnerships described in subparagraph (B) of this paragraph shall be treated as persons specified in section 267(b).”\nSubsec. (b)(1)(A).  Pub. L. 99–514, §\u202f1812(c)(3)(A) , substituted “a person” for “a partner”.\nSubsec. (b)(2)(A).  Pub. L. 99–514, §\u202f1812(c)(3)(A) , substituted “a person” for “a partner”.\nPub. L. 99–514, §\u202f642(a)(2) , substituted “50 percent” for “80 percent”.\nSubsec. (b)(2)(B).  Pub. L. 99–514, §\u202f642(a)(2) , substituted “50 percent” for “80 percent”.\n1984—Subsec. (a).  Pub. L. 98–369  designated existing provisions as par. (1) and added par. (2).\n1976—Subsec. (b)(2).  Pub. L. 94–455, §\u202f1901(b)(3)(C) , substituted “as ordinary income” for “as gain from the sale or exchange of property other than a capital asset”.\nSubsec. (c).  Pub. L. 94–455, §\u202f213(b)(3) , substituted “and, subject to section 263, for purposes of section 162(a)” for “and section 162(a)”.\nAmendment by  section 642(a)(2) of Pub. L. 99–514  applicable to sales after  Oct. 22, 1986 , in taxable years ending after such date, but not applicable to sales made after  Aug. 14, 1986 , which are made pursuant to a binding contract in effect on  Aug. 14, 1986 , and at all times thereafter, see  section 642(c) of Pub. L. 99–514 , set out as a note under  section 1239 of this title .\nAmendment by sections 1805(b) and 1812(c)(3)(B) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1812(c)(3)(A) ,  Oct. 22, 1986 ,  100 Stat. 2834 , provided that the amendment made by that section is effective with respect to sales or exchanges after  Sept. 27, 1985 .\nPub. L. 98–369, div. A, title I, §\u202f73(b) ,  July 18, 1984 ,  98 Stat. 592 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply— “(A)  in the case of arrangements described in section 707(a)(2)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a)), to services performed or property transferred after  February 29, 1984 , and \n \n “(B)  in the case of transfers described in section 707(a)(2)(B) of such Code (as so amended), to property transferred after  March 31, 1984 . \n \n \n “(2)   Binding contract exception .— The amendment made by subsection (a) shall not apply to a transfer of property described in section 707(a)(2)(B)(i) if such transfer is pursuant to a binding contract in effect on  March 31, 1984 , and at all times thereafter before the transfer. \n \n “(3)   Exception for certain transfers .— The amendment made by subsection (a) shall not apply to a transfer of property described in section 707(a)(2)(B)(i) that is made before  December 31, 1984 , if— “(A)  such transfer was proposed in a written private offering memorandum circulated before  February 28, 1984 ; \n \n “(B)  the out-of-pocket costs incurred with respect to such offering exceeded $250,000 as of  February 28, 1984 ; \n \n “(C)  the encumbrances placed on such property in anticipation of such transfer all constitute obligations for which neither the partnership nor any partner is liable; and \n \n “(D)  the transferor of such property is the sole general partner of the partnership.”\nAmendment by  section 213(b)(3) of Pub. L. 94–455  applicable in the case of partnership taxable years beginning after  Dec. 31, 1975 , see  section 213(f)(1) of Pub. L. 94–455 , set out as an Effective Date note under  section 709 of this title .\nAmendment by  section 1901(b)(3)(C) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'For purposes of this subchapter, an existing partnership shall be considered as continuing if it is not terminated.\nFor purposes of subsection (a), a partnership shall be considered as terminated only if no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership.\nIn the case of the merger or consolidation of two or more partnerships, the resulting partnership shall, for purposes of this section, be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50 percent in the capital and profits of the resulting partnership.\nIn the case of a division of a partnership into two or more partnerships, the resulting partnerships (other than any resulting partnership the members of which had an interest of 50 percent or less in the capital and profits of the prior partnership) shall, for purposes of this section, be considered a continuation of the prior partnership.\n2017—Subsec. (b)(1).  Pub. L. 115–97  struck out dash after “only if” and subpar. (A) designation before “no part” and struck out subpar. (B) which read as follows: “within a 12-month period there is a sale or exchange of 50 percent or more of the total interest in partnership capital and profits”.\nAmendment by  Pub. L. 115–97  applicable to partnership taxable years beginning after  Dec. 31, 2017 , see  section 13504(c) of Pub. L. 115–97 , set out as a note under  section 168 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF TAX LIABILITY'},
  'content': 'Except as provided in subsection (b), no deduction shall be allowed under this chapter to the partnership or to any partner for any amounts paid or incurred to organize a partnership or to promote the sale of (or to sell) an interest in such partnership.\nIn any case in which a partnership is liquidated before the end of the period to which paragraph (1)(B) applies, any deferred expenses attributable to the partnership which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.\n2005—Subsec. (b)(1).  Pub. L. 109–135  substituted “partnership” for “taxpayer” in introductory provisions and before “shall be allowed” in subpar. (A).\n2004—Subsec. (b).  Pub. L. 108–357  substituted “Deduction” for “Amortization” in heading, added par. (2), redesignated former par. (2) as (3), and amended heading and text of par. (1) generally. Prior to amendment, text of par. (1) read as follows: “Amounts paid or incurred to organize a partnership may, at the election of the partnership (made in accordance with regulations prescribed by the Secretary), be treated as deferred expenses. Such deferred expenses shall be allowed as a deduction ratably over such period of not less than 60 months as may be selected by the partnership (beginning with the month in which the partnership begins business), or if the partnership is liquidated before the end of such 60-month period, such deferred expenses (to the extent not deducted under this section) may be deducted to the extent provided in section 165.”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 108–357  applicable to amounts paid or incurred after  Oct. 22, 2004 , see  section 902(d) of Pub. L. 108–357 , set out as a note under  section 195 of this title .\nPub. L. 94–455, title II, §\u202f213(f) ,  Oct. 4, 1976 ,  90 Stat. 1548 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending sections 179, 704, 706, 707, and 761 of this title] shall apply in the case of partnership taxable years beginning after  December 31, 1975 . \n \n “(2)   Subsection  (e).— The amendment made by subsection (e) [amending  section 704 of this title ] shall apply to liabilities incurred after  December 31, 1976 . \n \n “(3)   Section 709 (b)  of the code .— Section 709(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by the amendment made by subsection (b)(1) of this section) shall apply in the case of amounts paid or incurred in taxable years beginning after  December 31, 1976 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership.\nSubsection (a) shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351) if the partnership were incorporated.\nThe Secretary may provide by regulations that subsection (a) shall not apply to gain realized on the transfer of property to a partnership if such gain, when recognized, will be includible in the gross income of a person other than a United States person.\nFor regulatory authority to treat intangibles transferred to a partnership as sold, see section 367(d)(3).\nAnother  section 1131(b) of Pub. L. 105–34  enacted  section 684 of this title .\n1997—Subsec. (c).  Pub. L. 105–34, §\u202f1131(b)(3) , added subsec. (c).\nSubsec. (d).  Pub. L. 105–34, §\u202f1131(b)(5)(B) , added subsec. (d).\n1976— Pub. L. 94–455  designated existing provisions as subsec. (a), added subsec. (a) heading “General rule”, and added subsec. (b).\nPub. L. 94–455, title XXI, §\u202f2131(f)(3) –(5),  Oct. 4, 1976 ,  90 Stat. 1924 , 1925, provided that: \n “(3)  Except as provided in paragraph (4), the amendments made by subsections (b) and (c) [amending this section and sections 722 and 723 of this title] shall apply to transfers made after  February 17, 1976 , in taxable years ending after such date. \n \n “(4)  The amendments made by subsections (b) and (c) shall not apply to transfers to a partnership made on or before the 90th day after the date of the enactment of this Act [ Oct. 4, 1976 ] if— “(A)  either— “(i)  a ruling request with respect to such transfers was filed with the Internal Revenue Service before  March 27, 1976 , or \n \n “(ii)  a registration statement with respect to such transfers was filed with the Securities and Exchange Commission before  March 27, 1976 , \n \n \n “(B)  the securities transferred were deposited on or before the 60th day after the date of the enactment of this Act [ Oct. 4, 1976 ], and \n \n “(C)  either— “(i)  the aggregate value (determined as of the close of the 60th day referred to in subparagraph (B), or, if earlier, the close of the deposit period) of the securities so transferred does not exceed $100,000,000, or \n \n “(ii)  the securities transferred were all on deposit on  February 29, 1976 , pursuant to a registration statement referred to in subparagraph (A)(ii). \n \n \n \n “(5)  If no registration statement was required to be filed with the Securities and Exchange Commission with respect to the transfer of securities to any partnership, then paragraph (4) shall be applied to such transfers— “(A)  as if paragraph (4) did not contain subparagraph (A)(ii) thereof, and \n \n “(B)  by substituting ‘$25,000,000’ for ‘$100,000,000’ in subparagraph (C)(i) thereof.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The basis of an interest in a partnership acquired by a contribution of property, including money, to the partnership shall be the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recognized under section 721(b) to the contributing partner at such time.\n1984— Pub. L. 98–369  inserted “under section 721(b)” after “gain recognized”.\n1976— Pub. L. 94–455  inserted “increased by the amount (if any) of gain recognized to the contributing partner at such time” after “at the time of the contribution”.\nPub. L. 98–369, div. A, title VII, §\u202f722(f)(2) ,  July 18, 1984 ,  98 Stat. 974 , provided that:  “The amendments made by paragraph (1) [amending this section and  section 723 of this title ] shall take effect as if included in the amendments made by section 2131 of the Tax Reform Act of 1976 [ Pub. L. 94–455 ].”\nFor effective date of amendment made by  Pub. L. 94–455 , see section 2131(f)(3)–(5) of  Pub. L. 94–455 , set out as a note under  section 721 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The basis of property contributed to a partnership by a partner shall be the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recognized under section 721(b) to the contributing partner at such time.\n1984— Pub. L. 98–369  inserted “under section 721(b)” after “gain recognized”.\n1976— Pub. L. 94–455  inserted “increased by the amount (if any) of gain recognized to the contributing partner at such time” after “at the time of the contribution”.\nAmendment by  Pub. L. 98–369  effective as if included in amendments made by section 2131 of the Tax Reform Act of 1976,  Pub. L. 94–455 , see  section 722(f)(2) of Pub. L. 98–369 , set out as a note under  section 722 of this title .\nFor effective date of amendment made by  Pub. L. 94–455 , see section 2131(f)(3)–(5) of  Pub. L. 94–455 , set out as a note under  section 721 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The term “unrealized receivable” has the meaning given such term by section 751(c) (determined by treating any reference to the partnership as referring to the partner).\nThe term “inventory item” has the meaning given such term by section 751(d) (determined by treating any reference to the partnership as referring to the partner and by applying section 1231 without regard to any holding period therein provided).\nIf any property described in subsection (a), (b), or (c) is disposed of in a nonrecognition transaction, the tax treatment which applies to such property under such subsection shall also apply to any substituted basis property resulting from such transaction. A similar rule shall also apply in the case of a series of non-recognition transactions.\nSubparagraph (A) shall not apply to any stock in a C corporation received in an exchange described in section 351.\n1997—Subsec. (d)(2).  Pub. L. 105–34  substituted “section 751(d)” for “section 751(d)(2)”.\n1996—Subsec. (d)(3)(B).  Pub. L. 104–188  substituted “Subparagraph” for “Subparagaph”.\nPub. L. 105–34, title X, §\u202f1062(c) ,  Aug. 5, 1997 ,  111 Stat. 947 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 731, 732, 735, and 751 of this title] shall apply to sales, exchanges, and distributions after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Binding contracts .— The amendments made by this section shall not apply to any sale or exchange pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such sale or exchange.”\nPub. L. 98–369, div. A, title I, §\u202f74(d)(1) ,  July 18, 1984 ,  98 Stat. 594 , provided that:  “The amendment made by subsection (a) [enacting this section] shall apply to property contributed to a partnership after  March 31, 1984 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'No gain or loss shall be recognized to a partnership on a distribution to a partner of property, including money.\nThe term “marketable securities” means financial instruments and foreign currencies which are, as of the date of the distribution, actively traded (within the meaning of section 1092(d)(1)).\nThe term “financial instrument” includes stocks and other equity interests, evidences of indebtedness, options, forward or futures contracts, notional principal contracts, and derivatives.\nThe term “eligible partner” means any partner who, before the date of the distribution, did not contribute to the partnership any property other than assets described in clause (i).\nThe term “eligible partner” shall not include the transferor or transferee in a nonrecognition transaction involving a transfer of any portion of an interest in a partnership with respect to which the transferor was not an eligible partner.\nAny increase in basis attributable to the gain described in subparagraph (A)(ii) shall be allocated to marketable securities in proportion to their respective amounts of unrealized appreciation before such increase.\nSections 733 and 734 shall be applied as if no gain were recognized, and no adjustment were made to the basis of property, under this subsection.\nIn the case of a distribution of a marketable security which is an unrealized receivable (as defined in section 751(c)) or an inventory item (as defined in section 751(d)), any gain recognized under this subsection shall be treated as ordinary income to the extent of any increase in the basis of such security attributable to the gain described in paragraph (4)(A)(ii).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, including regulations to prevent the avoidance of such purposes.\nThis section shall not apply to the extent otherwise provided by section 736 (relating to payments to a retiring partner or a deceased partner’s successor in interest), section 751 (relating to unrealized receivables and inventory items), and section 737 (relating to recognition of precontribution gain in case of certain distributions).\nSection 2(a)(32) of the Investment Company Act of 1940, referred to in subsec. (c)(2)(B)(i)(II), is classified to  section 80a–2(a)(32) of Title 15 , Commerce and Trade.\n1997—Subsecs. (a)(2)(B), (c)(6).  Pub. L. 105–34  substituted “section 751(d)” for “section 751(d)(2)”.\n1994—Subsecs. (c), (d).  Pub. L. 103–465  added subsec. (c) and redesignated former subsec. (c) as (d).\n1992—Subsec. (c).  Pub. L. 102–486  substituted “,\u2000section 751” for “and section 751” and inserted before period at end “,\u2000and section 737 (relating to recognition of precontribution gain in case of certain distributions)”.\nAmendment by  Pub. L. 105–34  applicable to sales, exchanges, and distributions after  Aug. 5, 1997 , but not applicable to any sale or exchange pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such sale or exchange, see  section 1062(c) of Pub. L. 105–34 , set out as a note under  section 724 of this title .\nPub. L. 103–465, title VII, §\u202f741(c) ,  Dec. 8, 1994 ,  108 Stat. 5009 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and  section 737 of this title ] shall apply to distributions after the date of the enactment of this Act [ Dec. 8, 1994 ]. \n \n “(2)   Certain distributions before  january 1, 1995 .— The amendments made by this section shall not apply to any marketable security distributed before  January 1, 1995 , by the partnership which held such security on  July 27, 1994 . \n \n “(3)   Distributions in liquidation of partner’s interest .— The amendments made by this section shall not apply to the distribution of a marketable security in liquidation of a partner’s interest in a partnership if— “(A)  such liquidation is pursuant to a written contract which was binding on  July 15, 1994 , and at all times thereafter before the distribution, and \n \n “(B)  such contract provides for the purchase of such interest not later than a date certain for— “(i)  a fixed value of marketable securities that are specified in the contract, or \n \n “(ii)  other property. \n \n \n\n The preceding sentence shall not apply if the partner has the right to elect that such distribution be made other than in marketable securities. \n \n “(4)   Distributions in complete liquidation of publicly traded partnerships.— “(A)   In general .— The amendments made by this section shall not apply to the distribution of a marketable security in a qualified partnership liquidation if— “(i)  the marketable securities were received by the partnership in a nonrecognition transaction in exchange for substantially all of the assets of the partnership, \n \n “(ii)  the marketable securities are distributed by the partnership within 90 days after their receipt by the partnership, and \n \n “(iii)  the partnership is liquidated before the beginning of the 1st taxable year of the partnership beginning after  December 31, 1997 . \n \n \n “(B)   Qualified partnership liquidation .— For purposes of subparagraph (A), the term ‘qualified partnership liquidation’ means— “(i)  a complete liquidation of a publicly traded partnership (as defined in section 7704(b) of the Internal Revenue Code of 1986) which is an existing partnership (as defined in section 10211(c)(2) of the Revenue Act of 1987 [ Pub. L. 100–203 , set out as an Effective Date note under  section 7704 of this title ]), and \n \n “(ii)  a complete liquidation of a partnership which is related to a partnership described in clause (i) if such liquidation is related to a complete liquidation of the partnership described in clause (i). \n \n \n \n “(5)   Marketable securities .— For purposes of this subsection, the term ‘marketable securities’ has the meaning given such term by section 731(c) of the Internal Revenue Code of 1986, as added by this section.”\nAmendment by  Pub. L. 102–486  applicable to distributions on or after  June 25, 1992 , see  section 1937(c) of Pub. L. 102–486 , set out as a note under  section 704 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The basis of property (other than money) distributed by a partnership to a partner other than in liquidation of the partner’s interest shall, except as provided in paragraph (2), be its adjusted basis to the partnership immediately before such distribution.\nThe basis to the distributee partner of property to which paragraph (1) is applicable shall not exceed the adjusted basis of such partner’s interest in the partnership reduced by any money distributed in the same transaction.\nThe basis of property (other than money) distributed by a partnership to a partner in liquidation of the partner’s interest shall be an amount equal to the adjusted basis of such partner’s interest in the partnership reduced by any money distributed in the same transaction.\nFor purposes of subsections (a), (b), and (c), a partner who acquired all or a part of his interest by a transfer with respect to which the election provided in section 754 is not in effect, and to whom a distribution of property (other than money) is made with respect to the transferred interest within 2 years after such transfer, may elect, under regulations prescribed by the Secretary, to treat as the adjusted partnership basis of such property the adjusted basis such property would have if the adjustment provided in section 743(b) were in effect with respect to the partnership property. The Secretary may by regulations require the application of this subsection in the case of a distribution to a transferee partner, whether or not made within 2 years after the transfer, if at the time of the transfer the fair market value of the partnership property (other than money) exceeded 110 percent of its adjusted basis to the partnership.\nThis section shall not apply to the extent that a distribution is treated as a sale or exchange of property under section 751(b) (relating to unrealized receivables and inventory items).\nThe amount of the reduction under paragraph (1) shall not exceed the amount by which the sum of the aggregate adjusted bases of the property and the amount of money of the distributed corporation exceeds the corporate partner’s adjusted basis in the stock of the distributed corporation.\nNo reduction under paragraph (1) in the basis of any property shall exceed the adjusted basis of such property (determined without regard to such reduction).\nFor purposes of this subsection, the term “control” means ownership of stock meeting the requirements of section 1504(a)(2).\nFor purposes of paragraph (1), if a corporation acquires (other than in a distribution from a partnership) stock the basis of which is determined (by reason of being distributed from a partnership) in whole or in part by reference to subsection (a)(2) or (b), the corporation shall be treated as receiving a distribution of such stock from a partnership.\nIf the property held by a distributed corporation is stock in a corporation which the distributed corporation controls, this subsection shall be applied to reduce the basis of the property of such controlled corporation. This subsection shall be reapplied to any property of any controlled corporation which is stock in a corporation which it controls.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations to avoid double counting and to prevent the abuse of such purposes.\n1999—Subsec. (f).  Pub. L. 106–170  added subsec. (f).\n1997—Subsec. (c).  Pub. L. 105–34, §\u202f1061(a) , amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “The basis of distributed properties to which subsection (a)(2) or subsection (b) is applicable shall be allocated—\n“(1) first to any unrealized receivables (as defined in section 751(c)) and inventory items (as defined in section 751(d)(2)) in an amount equal to the adjusted basis of each such property to the partnership (or if the basis to be allocated is less than the sum of the adjusted bases of such properties to the partnership, in proportion to such bases), and\n“(2) to the extent of any remaining basis, to any other distributed properties in proportion to their adjusted bases to the partnership.”\nSubsec. (c)(1)(A)(i).  Pub. L. 105–34, §\u202f1062(b)(3) , substituted “section 751(d)” for “section 751(d)(2)”.\n1976—Subsec. (d).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 106–170, title V, §\u202f538(b) ,  Dec. 17, 1999 ,  113 Stat. 1940 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by this section [amending this section] shall apply to distributions made after  July 14, 1999 . \n \n “(2)   Partnerships in existence on  July 14, 1999 .— In the case of a corporation which is a partner in a partnership as of  July 14, 1999 , the amendment made by this section shall apply to any distribution made (or treated as made) to such partner from such partnership after  June 30, 2001 , except that this paragraph shall not apply to any distribution after the date of the enactment of this Act [ Dec. 17, 1999 ] unless the partner makes an election to have this paragraph apply to such distribution on the partner’s return of Federal income tax for the taxable year in which such distribution occurs.”\nPub. L. 105–34, title X, §\u202f1061(b) ,  Aug. 5, 1997 ,  111 Stat. 946 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 1062(b)(3) of Pub. L. 105–34  applicable to sales, exchanges, and distributions after  Aug. 5, 1997 , but not applicable to any sale or exchange pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such sale or exchange, see  section 1062(c) of Pub. L. 105–34 , set out as a note under  section 724 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The basis of partnership property shall not be adjusted as the result of a distribution of property to a partner unless the election, provided in section 754 (relating to optional adjustment to basis of partnership property), is in effect with respect to such partnership or unless there is a substantial basis reduction with respect to such distribution.\nThe allocation of basis among partnership properties where subsection (b) is applicable shall be made in accordance with the rules provided in section 755.\nFor purposes of this section, there is a substantial basis reduction with respect to a distribution if the sum of the amounts described in subparagraphs (A) and (B) of subsection (b)(2) exceeds $250,000.\nFor regulations to carry out this subsection, see section 743(d)(2).\nFor purposes of this section, a securitization partnership (as defined in section 743(f)) shall not be treated as having a substantial basis reduction with respect to any distribution of property to a partner.\n2005—Subsec. (a).  Pub. L. 109–135, §\u202f403(bb)(1) , inserted “with respect to such distribution” before period at end.\nSubsec. (b).  Pub. L. 109–135, §\u202f403(bb)(2) , reenacted heading without change and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “In the case of a distribution of property to a partner, a partnership, with respect to which the election provided in section 754 is in effect or unless there is a substantial basis reduction, shall—”.\n2004— Pub. L. 108–357, §\u202f833(c)(5)(A) , substituted “Adjustment to basis of undistributed partnership property where section 754 election or substantial basis reduction” for “Optional adjustment to basis of undistributed partnership property” in section catchline.\nSubsec. (a).  Pub. L. 108–357, §\u202f833(c)(1) , inserted “or unless there is a substantial basis reduction” before period at end.\nSubsec. (b).  Pub. L. 108–357, §\u202f833(c)(2) , inserted “or unless there is a substantial basis reduction” after “section 754 is in effect” in introductory provisions.\nSubsec. (d).  Pub. L. 108–357, §\u202f833(c)(3) , added subsec. (d).\nSubsec. (e).  Pub. L. 108–357, §\u202f833(c)(4) , added subsec. (e).\n1984—Subsec. (b).  Pub. L. 98–369  inserted at end “Paragraph (1)(B) shall not apply to any distributed property which is an interest in another partnership with respect to which the election provided in section 754 is not in effect.”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f833(d)(3) ,  Oct. 22, 2004 ,  118 Stat. 1592 , provided that:  “The amendments made by subsection (c) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 98–369, div. A, title I, §\u202f78(b) ,  July 18, 1984 ,  98 Stat. 597 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions after  March 1, 1984 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'Gain or loss on the disposition by a distributee partner of unrealized receivables (as defined in section 751(c)) distributed by a partnership, shall be considered as ordinary income or as ordinary loss, as the case may be.\nGain or loss on the sale or exchange by a distributee partner of inventory items (as defined in section 751(d)) distributed by a partnership shall, if sold or exchanged within 5 years from the date of the distribution, be considered as ordinary income or as ordinary loss, as the case may be.\nIn determining the period for which a partner has held property received in a distribution from a partnership (other than for purposes of subsection (a)(2)), there shall be included the holding period of the partnership, as determined under section 1223, with respect to such property.\nFor purposes of this section, section 751(d) (defining inventory item) shall be applied without regard to any holding period in section 1231(b).\nIf any property described in subsection (a) is disposed of in a nonrecognition transaction, the tax treatment which applies to such property under such subsection shall also apply to any substituted basis property resulting from such transaction. A similar rule shall also apply in the case of a series of nonrecognition transactions.\nSubparagraph (A) shall not apply to any stock in a C corporation received in an exchange described in section 351.\n1997—Subsecs. (a)(2), (c)(1).  Pub. L. 105–34  substituted “section 751(d)” for “section 751(d)(2)”.\n1984—Subsec. (c).  Pub. L. 98–369  added subsec. (c).\n1976—Subsec. (a)(1), (2).  Pub. L. 94–455  substituted “as ordinary income or as ordinary loss, as the case may be” for “gain or loss from the sale or exchange of property other than a capital asset”.\nAmendment by  Pub. L. 105–34  applicable to sales, exchanges, and distributions after  Aug. 5, 1997 , but not applicable to any sale or exchange pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such sale or exchange, see  section 1062(c) of Pub. L. 105–34 , set out as a note under  section 724 of this title .\nPub. L. 98–369, div. A, title I, §\u202f74(d)(2) ,  July 18, 1984 ,  98 Stat. 594 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to property distributed after  March 31, 1984 , in taxable years ending after such date.”\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'Payments made in liquidation of the interest of a retiring partner or a deceased partner shall, to the extent such payments (other than payments described in paragraph (2)) are determined, under regulations prescribed by the Secretary, to be made in exchange for the interest of such partner in partnership property, be considered as a distribution by the partnership and not as a distributive share or guaranteed payment under subsection (a).\n1993—Subsec. (b)(3).  Pub. L. 103–66, §\u202f13262(a) , added par. (3).\nSubsec. (c).  Pub. L. 103–66, §\u202f13262(b)(2)(B) , struck out heading and text of subsec. (c). Text read as follows: “For limitation on the tax attributable to certain gain connected with section 1248 stock, see section 751(e).”\n1978—Subsec. (c).  Pub. L. 95–600  added subsec. (c).\n1976—Subsec. (b)(1).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 103–66, title XIII, §\u202f13262(c) ,  Aug. 10, 1993 ,  107 Stat. 541 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 751 of this title ] shall apply in the case of partners retiring or dying on or after  January 5, 1993 . \n \n “(2)   Binding contract exception .— The amendments made by this section shall not apply to any partner retiring on or after  January 5, 1993 , if a written contract to purchase such partner’s interest in the partnership was binding on  January 4, 1993 , and at all times thereafter before such purchase.”\nAmendment by  Pub. L. 95–600  applicable to transfers beginning after  Oct. 9, 1975 , and to sales, exchanges, and distributions taking place after  Oct. 9, 1975 , see  section 701(u)(13)(C) of Pub. L. 95–600 , set out as a note under  section 751 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The adjusted basis of a partner’s interest in a partnership shall be increased by the amount of any gain recognized by such partner under subsection (a). For purposes of determining the basis of the distributed property (other than money), such increase shall be treated as occurring immediately before the distribution.\nAppropriate adjustments shall be made to the adjusted basis of the partnership in the contributed property referred to in subsection (b) to reflect gain recognized under subsection (a).\nIf any portion of the property distributed consists of property which had been contributed by the distributee partner to the partnership, such property shall not be taken into account under subsection (a)(1) and shall not be taken into account in determining the amount of the net precontribution gain. If the property distributed consists of an interest in an entity, the preceding sentence shall not apply to the extent that the value of such interest is attributable to property contributed to such entity after such interest had been contributed to the partnership.\nThis section shall not apply to the extent section 751(b) applies to such distribution.\nFor treatment of marketable securities as money for purposes of this section, see section 731(c).\n1997—Subsec. (b)(1).  Pub. L. 105–34  substituted “7 years” for “5 years”.\n1996— Pub. L. 104–188  provided that  section 1937(a) of Pub. L. 102–486 , shall be applied as if “Subpart B” appeared instead of “Subpart C”.  Section 1937(a) of Pub. L. 102–486  directed amendment of subpart C of this part by adding this section at the end thereof.\n1994—Subsec. (c)(1).  Pub. L. 103–465, §\u202f741(b)(1) , amended last sentence generally. Prior to amendment, last sentence read as follows: “Except for purposes of determining the amount recognized under subsection (a), such increase shall be treated as occurring immediately before the distribution.”\nSubsec. (e).  Pub. L. 103–465, §\u202f741(b)(2) , added subsec. (e).\nAmendment by  Pub. L. 105–34  applicable to property contributed to a partnership after  June 8, 1997 , but not applicable to any property contributed pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such contribution if such contract provides for the contribution of a fixed amount of property, see  section 1063(b) of Pub. L. 105–34 , set out as a note under  section 704 of this title .\nAmendment by  Pub. L. 103–465  applicable to distributions after  Dec. 8, 1994 , and not applicable to certain distributions before  Jan. 1, 1995 , distributions in liquidation of partner’s interest, or distributions in complete liquidation of publicly traded partnerships, see  section 741(c) of Pub. L. 103–465 , set out as a note under  section 731 of this title .\nSection applicable to distributions on or after  June 25, 1992 , see  section 1937(c) of Pub. L. 102–486 , set out as an Effective Date of 1992 Amendment note under  section 704 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'In the case of a sale or exchange of an interest in a partnership, gain or loss shall be recognized to the transferor partner. Such gain or loss shall be considered as gain or loss from the sale or exchange of a capital asset, except as otherwise provided in section 751 (relating to unrealized receivables and inventory items).\n2002— Pub. L. 107–147  struck out “which have appreciated substantially in value” after “inventory items”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The basis of an interest in a partnership acquired other than by contribution shall be determined under part II of subchapter O (sec. 1011 and following).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The basis of partnership property shall not be adjusted as the result of a transfer of an interest in a partnership by sale or exchange or on the death of a partner unless the election provided by section 754 (relating to optional adjustment to basis of partnership property) is in effect with respect to such partnership or unless the partnership has a substantial built-in loss immediately after such transfer.\nThe allocation of basis among partnership properties where subsection (b) is applicable shall be made in accordance with the rules provided in section 755.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of paragraph (1) and section 734(d), including regulations aggregating related partnerships and disregarding property acquired by the partnership in an attempt to avoid such purposes.\nFor purposes of this section, an electing investment partnership shall not be treated as having a substantial built-in loss with respect to any transfer occurring while the election under paragraph (6)(A) is in effect.\nIn the case of a transfer of an interest in an electing investment partnership, the transferee partner’s distributive share of losses (without regard to gains) from the sale or exchange of partnership property shall not be allowed except to the extent that it is established that such losses exceed the loss (if any) recognized by the transferor (or any prior transferor to the extent not fully offset by a prior disallowance under this paragraph) on the transfer of the partnership interest.\nLosses disallowed under paragraph (2) shall not decrease the transferee partner’s basis in the partnership interest.\nIn the case of a transferee partner whose basis in property distributed by the partnership is reduced under section 732(a)(2), the amount of the loss recognized by the transferor on the transfer of the partnership interest which is taken into account under paragraph (2) shall be reduced by the amount of such basis reduction.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this subsection, including regulations for applying this subsection to tiered partnerships.\nFor purposes of this section, a securitization partnership shall not be treated as having a substantial built-in loss with respect to any transfer.\nFor purposes of paragraph (1), the term “securitization partnership” means any partnership the sole business activity of which is to issue securities which provide for a fixed principal (or similar) amount and which are primarily serviced by the cash flows of a discrete pool (either fixed or revolving) of receivables or other financial assets that by their terms convert into cash in a finite period, but only if the sponsor of the pool reasonably believes that the receivables and other financial assets comprising the pool are not acquired so as to be disposed of.\nSection 3(a)(1)(A), (c)(1), (7) of the Investment Company Act of 1940, referred to in subsec. (e)(5)(B), is classified to section 80a–3(a)(1)(A), (c)(1), (7) of Title 15, Commerce and Trade.\n2017—Subsec. (d)(1).  Pub. L. 115–97, §\u202f13502(a) , amended par. (1) generally. Prior to amendment, text read as follows: “For purposes of this section, a partnership has a substantial built-in loss with respect to a transfer of an interest in a partnership if the partnership’s adjusted basis in the partnership property exceeds by more than $250,000 the fair market value of such property.”\nSubsec. (e)(4) to (7).  Pub. L. 115–97, §\u202f13504(b)(2) , redesignated pars. (5) to (7) as (4) to (6), respectively, and struck out former par. (4). Prior to amendment, text of par. (4) read as follows: “This subsection shall be applied without regard to any termination of a partnership under section 708(b)(1)(B).”\n2004— Pub. L. 108–357, §\u202f833(b)(6)(A) , substituted “Special rules where section 754 election or substantial built-in loss” for “Optional adjustment to basis of partnership property” in section catchline.\nSubsec. (a).  Pub. L. 108–357, §\u202f833(b)(1) , inserted “or unless the partnership has a substantial built-in loss immediately after such transfer” before period at end.\nSubsec. (b).  Pub. L. 108–357, §\u202f833(b)(2) , inserted “or which has a substantial built-in loss immediately after such transfer” after “section 754 is in effect” in introductory provisions.\nSubsec. (d).  Pub. L. 108–357, §\u202f833(b)(3) , added subsec. (d).\nSubsec. (e).  Pub. L. 108–357, §\u202f833(b)(4)(A) , added subsec. (e).\nSubsec. (f).  Pub. L. 108–357, §\u202f833(b)(5) , added subsec. (f).\n1984—Subsec. (b).  Pub. L. 98–369  substituted “property contributed to the partnership by a partner, section 704(c) (relating to contributed property) shall apply in determining such share” for “an agreement described in section 704(c)(2) (relating to effect of partnership agreement on contributed property), such share shall be determined by taking such agreement into account” in penultimate sentence.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 115–97, title I, §\u202f13502(b) ,  Dec. 22, 2017 ,  131 Stat. 2141 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers of partnership interests after  December 31, 2017 .”\nAmendment by  section 13504(b)(2) of Pub. L. 115–97  applicable to partnership taxable years beginning after  Dec. 31, 2017 , see  section 13504(c) of Pub. L. 115–97 , set out as a note under  section 168 of this title .\nPub. L. 108–357, title VIII, §\u202f833(d)(2) ,  Oct. 22, 2004 ,  118 Stat. 1592 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by subsection (b) [amending this section and  section 6031 of this title ] shall apply to transfers after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(B)   Transition rule .— In the case of an electing investment partnership which is in existence on  June 4, 2004 , section 743(e)(6)(H) [now 743(e)(5)(H)] of the Internal Revenue Code of 1986, as added by this section, shall not apply to such partnership and section 743(e)(6)(I) [now 743(e)(5)(I)] of such Code, as so added, shall be applied by substituting ‘20 years’ for ‘15 years’.”\nAmendment by  Pub. L. 98–369  applicable with respect to property contributed to the partnership after  Mar. 31, 1984 , in taxable years ending after such date, see  section 71(c) of Pub. L. 98–369 , set out as a note under  section 704 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'Inventory items of the partnership shall be considered to have appreciated substantially in value if their fair market value exceeds 120 percent of the adjusted basis to the partnership of such property.\nFor purposes of subparagraph (A), there shall be excluded any inventory property if a principal purpose for acquiring such property was to avoid the provisions of this subsection relating to inventory items.\nFor purposes of applying this section and sections 731 and 741 to any amount resulting from the reference to section 1248(a) in the second sentence of subsection (c), in the case of an individual, the tax attributable to such amount shall be limited in the manner provided by subsection (b) of section 1248 (relating to gain from certain sales or exchanges of stock in certain foreign corporation).\n2018—Subsec. (c).  Pub. L. 115–141  substituted “and sections” for “and, sections” in two places in concluding provisions.\n2004—Subsec. (d)(2) to (4).  Pub. L. 108–357  inserted “and” at end of par. (2), redesignated par. (4) as (3) and substituted “paragraph (1) or (2)” for “paragraph (1), (2), or (3)”, and struck out former par. (3) which read as follows: “any other property of the partnership which, if sold or exchanged by the partnership, would result in a gain taxable under subsection (a) of section 1246 (relating to gain on foreign investment company stock), and”.\n1999—Subsec. (d)(1).  Pub. L. 106–170  substituted “section 1221(a)(1)” for “section 1221(1)”.\n1998—Subsec. (c).  Pub. L. 105–206  substituted “731, 732,” for “731” wherever appearing in concluding provisions.\n1997—Subsec. (a)(2).  Pub. L. 105–34, §\u202f1062(a) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “inventory items of the partnership which have appreciated substantially in value,”.\nSubsec. (b)(1).  Pub. L. 105–34, §\u202f1062(b)(1)(A) , added subpars. (A) and (B) and struck out former subpars. (A) and (B) which read as follows:\n“(A) partnership property described in subsection (a)(1) or (2) in exchange for all or a part of his interest in other partnership property (including money), or\n“(B) partnership property (including money) other than property described in subsection (a)(1) or (2) in exchange for all or a part of his interest in partnership property described in subsection (a)(1) or (2),”.\nSubsec. (b)(3).  Pub. L. 105–34, §\u202f1062(b)(1)(B) , added par. (3).\nSubsec. (d).  Pub. L. 105–34, §\u202f1062(b)(2) , amended heading and text of subsec. (d) generally. Prior to amendment, subsec. (d) consisted of pars. (1) and (2) relating to inventory items which have appreciated substantially in value.\n1993—Subsec. (c).  Pub. L. 103–66, §\u202f13262(b)(1) , in concluding provisions, substituted “section 731 or 741” for “section 731, 736, or 741” in two places and “,\u2000sections 731 and 741 (but not for purposes of section 736)” for “sections 731, 736, and 741” in two places.\nSubsec. (d)(1).  Pub. L. 103–66, §\u202f13206(e)(1) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “Inventory items of the partnership shall be considered to have appreciated substantially in value if their fair market value exceeds—\n“(A) 120 percent of the adjusted basis to the partnership of such property, and\n“(B) 10 percent of the fair market value of all partnership property, other than money.”\nSubsec. (e).  Pub. L. 103–66, §\u202f13262(b)(2)(A) , substituted “sections 731 and 741” for “sections 731, 736, and 741”.\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f1899A(19) , substituted “section 617(f)(2)), stock” for “section 617(f)(2), stock” in second sentence.\nPub. L. 99–514, §\u202f201(d)(10) , struck out “section 1245 recovery property (as defined in section 1245(a)(5)),” before “stock in certain foreign corporations” in second sentence.\n1984—Subsec. (c).  Pub. L. 98–369, §\u202f492(b)(4) , struck out “farm recapture property (as defined in section 1251(e)(1)),” before “farm land”, and “1251(c),” after “1250(a),” in second sentence.\nPub. L. 98–369, §\u202f43(c)(3) , inserted last sentence.\nSubsec. (f).  Pub. L. 98–369, §\u202f76(a) , added subsec. (f).\n1983—Subsec. (c).  Pub. L. 97–448  inserted reference to section 1245 recovery property (as defined in section 1245(a)(5)) in second sentence.\n1978—Subsec. (c).  Pub. L. 95–618  substituted “oil, gas, or geothermal property” for “oil or gas property” in second sentence.\nSubsec. (e).  Pub. L. 95–600  added subsec. (e).\n1976—Subsec. (b)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c).  Pub. L. 94–455 , §§\u202f205(b), 1042(c)(2), 1101(d)(2), 1901(a)(93), 2110(a), in second sentence, inserted reference to stock in a DISC (as described in section 992(a)), reference to stock in certain foreign corporations (as described in section 1248), and reference to farm land (as defined in section 1252(a)), franchises, trademarks or trade names (referred to in section 1253(a)), and an oil or gas property (described in section 1254), substituted “1252(a), 1253(a), or 1254(a)” for “or 1252(a)”, and inserted “1248(a),” after “1245(a),” and “995(c),” after “617(d)(1),”.\n1969—Subsec. (c).  Pub. L. 91–172 , in second sentence, substituted “section 1250 property (as defined in section 1250(c)), farm recapture property (as defined in section 1251(e)(1)), and farm land (as defined in section 1252(a))”, and “1250(a), 1251(c), or 1252(a)”, for “and section 1250 property (as defined in section 1250(c))” and “1250(a)”, respectively.\n1966—Subsec. (c).  Pub. L. 89–570 , in second sentence, inserted reference to mining property (as defined in section 617(f)(2)) and to section 617(d)(1).\n1964—Subsec. (c).  Pub. L. 88–272 , in second sentence, inserted reference to section 1250.\n1962—Subsec. (c).  Pub. L. 87–834, §\u202f13(f)(1) , defined “unrealized receivables” for purposes of this section and section 731, 736, and 741, as including section 1245 property, but only to the extent of the amount which would be treated as gain to which section 1245(a) would apply if (at the time of the transaction described in this section or section 731, 736, or 741, as the case may be) such property had been sold by the partnership at its fair market value.\nSubsec. (d)(2).  Pub. L. 87–834, §\u202f14(b)(2) , added subpar. (C), redesignated former subpar. (C) as (D), and substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)”.\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to sales, exchanges, and distributions after  Aug. 5, 1997 , but not applicable to any sale or exchange pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before such sale or exchange, see  section 1062(c) of Pub. L. 105–34 , set out as a note under  section 724 of this title .\nPub. L. 103–66, title XIII, §\u202f13206(e)(2) ,  Aug. 10, 1993 ,  107 Stat. 467 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to sales, exchanges, and distributions after  April 30, 1993 .”\nAmendment by section 13262(b)(1) and (2)(A) of  Pub. L. 103–66  applicable in the case of partners retiring or dying on or after  Jan. 5, 1993 , with a binding contract exception, see  section 13262(c) of Pub. L. 103–66 , set out as a note under  section 736 of this title .\nAmendment by  section 201(d)(10) of Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  section 201(d)(10) of Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  section 43(c)(3) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nPub. L. 98–369, div. A, title I, §\u202f76(b) ,  July 18, 1984 ,  98 Stat. 595 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to distributions, sales, and exchanges made after  March 31, 1984 , in taxable years ending after such date.”\nAmendment by  section 492(b)(4) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 492(d) of Pub. L. 98–369 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 95–618  applicable with respect to wells commenced on or after  Oct. 1, 1978 , in taxable years ending on or after such date, see  section 402(e) of Pub. L. 95–618 , set out as a note under  section 263 of this title .\nPub. L. 95–600, title VII, §\u202f701(u)(13)(C) ,  Nov. 6, 1978 ,  92 Stat. 2918 , provided that:  “The amendments made by this paragraph [amending this section and  section 736 of this title ] shall apply to transfers beginning after  October 9, 1975 , and to sales, exchanges, and distributions taking place after such date.”\nAmendment by  section 205(b) of Pub. L. 94–455  effective for taxable years ending after  Dec. 31, 1975 , see  section 205(e) of Pub. L. 94–455 , set out as an Effective Date note under  section 1254 of this title .\nAmendment by  section 1042(c)(2) of Pub. L. 94–455  applicable to transfers beginning after  Oct. 9, 1975 , and to sales, exchanges and distributions taking place after that date, see  section 1042(e)(1) of Pub. L. 94–455 , set out as a note under  section 367 of this title .\nAmendment by  section 1101(d)(2) of Pub. L. 94–455  applicable to sales, exchanges, or other dispositions after  Dec. 31, 1975 , in taxable years ending after such date, see  section 1101(g)(4) of Pub. L. 94–455 , set out as a note under  section 995 of this title .\nAmendment by  section 1901(a)(93) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2110(b) ,  Oct. 4, 1976 ,  90 Stat. 1905 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Subsection (a) [amending this section] shall apply to transactions described in sections 731, 736, 741, or 751 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which occur after  December 31, 1976 , in taxable years ending after that date.”\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 211(c) of Pub. L. 91–172 , set out as a note under  section 301 of this title .\nAmendment by  Pub. L. 89–570  applicable to taxable years ending after  Sept. 12, 1966 , but only in respect of expenditures paid or incurred after such date see  section 3 of Pub. L. 89–570 , set out as an Effective Date note under  section 617 of this title .\nAmendment by  Pub. L. 88–272  applicable to dispositions after  Dec. 31, 1963 , in taxable years ending after such date, see  section 231(c) of Pub. L. 88–272 , set out as an Effective Date note under  section 1250 of this title .\nAmendment by  section 13(f)(1) of Pub. L. 87–834  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 13(g) of Pub. L. 87–834 , set out as an Effective Date note under  section 1245 of this title .\nAmendment by  section 14(b)(2) of Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 14(c) of Pub. L. 87–834 , set out as a note under  section 312 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'Any increase in a partner’s share of the liabilities of a partnership, or any increase in a partner’s individual liabilities by reason of the assumption by such partner of partnership liabilities, shall be considered as a contribution of money by such partner to the partnership.\nAny decrease in a partner’s share of the liabilities of a partnership, or any decrease in a partner’s individual liabilities by reason of the assumption by the partnership of such individual liabilities, shall be considered as a distribution of money to the partner by the partnership.\nFor purposes of this section, a liability to which property is subject shall, to the extent of the fair market value of such property, be considered as a liability of the owner of the property.\nIn the case of a sale or exchange of an interest in a partnership, liabilities shall be treated in the same manner as liabilities in connection with the sale or exchange of property not associated with partnerships.\nPub. L. 98–369, div. A, title I, §\u202f79 ,  July 18, 1984 ,  98 Stat. 597 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— Section 752 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (and the regulations prescribed thereunder) shall be applied without regard to the result reached in the case of Raphan vs the United States, 3 Cl. Ct. 457 (1983). \n \n “(b)   Regulations .— In amending the regulations prescribed under section 752 of such Code to reflect subsection (a), the Secretary of the Treasury or his delegate shall prescribe regulations relating to liabilities, including the treatment of guarantees, assumptions, indemnity agreements, and similar arrangements.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'The amount includible in the gross income of a successor in interest of a deceased partner under section 736(a) shall be considered income in respect of a decedent under section 691.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': 'If a partnership files an election, in accordance with regulations prescribed by the Secretary, the basis of partnership property shall be adjusted, in the case of a distribution of property, in the manner provided in section 734 and, in the case of a transfer of a partnership interest, in the manner provided in section 743. Such an election shall apply with respect to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable year with respect to which such election was filed and all subsequent taxable years. Such election may be revoked by the partnership, subject to such limitations as may be provided by regulations prescribed by the Secretary.\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CONTRIBUTIONS, DISTRIBUTIONS, AND TRANSFERS'},
  'content': '2004—Subsec. (c).  Pub. L. 108–357  added subsec. (c).\n1976—Subsecs. (a), (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\nPub. L. 108–357, title VIII, §\u202f834(b) ,  Oct. 22, 2004 ,  118 Stat. 1592 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [ Oct. 22, 2004 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITIONS'},
  'content': 'For purposes of this subtitle, the term “partner” means a member of a partnership. In the case of a capital interest in a partnership in which capital is a material income-producing factor, whether a person is a partner with respect to such interest shall be determined without regard to whether such interest was derived by gift from any other person.\nFor purposes of this subchapter, a partnership agreement includes any modifications of the partnership agreement made prior to, or at, the time prescribed by law for the filing of the partnership return for the taxable year (not including extensions) which are agreed to by all the partners, or which are adopted in such other manner as may be provided by the partnership agreement.\nFor purposes of this subchapter, the term “liquidation of a partner’s interest” means the termination of a partner’s entire interest in a partnership by means of a distribution, or a series of distributions, to the partner by the partnership.\nFor rules in the case of the sale, exchange, liquidation, or reduction of a partner’s interest, see sections 704(b) and 706(c)(2).\n2015—Subsec. (b).  Pub. L. 114–74  inserted at end “In the case of a capital interest in a partnership in which capital is a material income-producing factor, whether a person is a partner with respect to such interest shall be determined without regard to whether such interest was derived by gift from any other person.”\n2007—Subsecs. (f), (g).  Pub. L. 110–28  added subsec. (f) and redesignated former subsec. (f) as (g).\n1986—Subsec. (e).  Pub. L. 99–514  substituted “Distributions of partnership interests” for “Distributions” in heading, substituted “Except as otherwise provided in regulations, for purposes of” for “For purposes of” in introductory provision, and “any distribution of an interest in a partnership” for “any distribution” in closing provisions.\n1984—Subsecs. (e), (f).  Pub. L. 98–369  added subsec. (e) and redesignated former subsec. (e) as (f).\n1980—Subsec. (a)(3).  Pub. L. 96–222  added par. (3).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (e).  Pub. L. 94–455, §\u202f213(c)(3)(B) , added subsec. (e).\nAmendment by  Pub. L. 114–74  applicable to partnership taxable years beginning after  Dec. 31, 2015 , see  section 1102(c) of Pub. L. 114–74 , set out as a note under  section 704 of this title .\nPub. L. 110–28, title VIII, §\u202f8215(c) ,  May 25, 2007 ,  121 Stat. 194 , provided that:  “The amendments made by this section [amending this section,  section 1402 of this title , and  section 411 of Title 42 , The Public Health and Welfare] shall apply to taxable years beginning after  December 31, 2006 .”\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to distributions, sales, and exchanges made after  Mar. 31, 1984 , in taxable years ending after such date, see  section 75(e) of Pub. L. 98–369 , set out as an Effective Date note under  section 386 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 213(c)(3)(B) of Pub. L. 94–455  applicable in the case of partnership taxable years beginning after  Dec. 31, 1975 , see  section 213(f)(1) of Pub. L. 94–455 , set out as a note under  section 709 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 771, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1002 , related to application of subchapter to electing large partnerships.\nA prior section 771,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 253 , related to the effective date for this subchapter, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1901(a)(94) ,  Oct. 4, 1976 ,  90 Stat. 1780 .\nSection 772, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1002 ; amended  Pub. L. 109–58, title XIII, §\u202f1322(a)(3)(I) , (J),  Aug. 8, 2005 ,  119 Stat. 1012 , related to simplified flow-through for partners of electing large partnerships.\nSection 773, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1004 , related to computations of taxable income at partnership level of electing large partnerships.\nSection 774, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1005 ; amended  Pub. L. 105–206, title VI, §\u202f6012(c) ,  July 22, 1998 ,  112 Stat. 819 , related to other modifications of electing large partnerships.\nSection 775, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1006 ; amended  Pub. L. 106–170, title V, §\u202f532(c)(2)(G) ,  Dec. 17, 1999 ,  113 Stat. 1930 , defined “electing large partnership”.\nSection 776, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1007 , related to special rules for electing large partnerships holding oil and gas properties.\nSection 777, added  Pub. L. 105–34, title XII, §\u202f1221(a) ,  Aug. 5, 1997 ,  111 Stat. 1008 , related to regulations under this part.\nRepeal applicable to returns filed for partnership taxable years beginning after  Dec. 31, 2017 , with certain exceptions, see  section 1101(g) of Pub. L. 114–74 , set out as an Effective Date note under  section 6221 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'A tax is hereby imposed for each taxable year on the life insurance company taxable income of every life insurance company. Such tax shall consist of a tax computed as provided in section 11 as though the life insurance company taxable income were the taxable income referred to in section 11.\nA prior section 801, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 112 ; amended  Pub. L. 87–858, §\u202f3(a) ,  Oct. 23, 1962 ,  76 Stat. 1134 ;  Pub. L. 91–172, title I, §\u202f121(b)(5)(B) ,  Dec. 30, 1969 ,  83 Stat. 541 ;  Pub. L. 93–406, title II, §\u202f2002(g)(11) ,  Sept. 2, 1974 ,  88 Stat. 970 ;  Pub. L. 94–455, title XV, §\u202f1505(a) , title XIX, §§\u202f1901(c)(6), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1738 , 1803, 1834;  Pub. L. 95–600, title VII, §\u202f703(j)(4) ,  Nov. 6, 1978 ,  92 Stat. 2941 , defined “life insurance company” and related terms, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) . See  section 816 of this title .\nAnother prior section 801, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 255 ;  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 36 , contained provisions similar to this section, prior to the the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\nA prior section 802, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 115 ; amended  Pub. L. 87–858, §\u202f3(b)(1) ,  Oct. 23, 1962 ,  76 Stat. 1136 ;  Pub. L. 88–272, title II, §\u202f235(c)(1) ,  Feb. 26, 1964 ,  78 Stat. 126 ;  Pub. L. 91–172, title V, §\u202f511(c)(1) ,  Dec. 30, 1969 ,  83 Stat. 637 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(95) , (b)(33)(E),  Oct. 4, 1976 ,  90 Stat. 1780 , 1801;  Pub. L. 95–600, title III, §\u202f301(b)(8) ,  Nov. 6, 1978 ,  92 Stat. 2821 , contained provisions similar to this section, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 802, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 255 ;  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 38 ;  July 24, 1956, ch. 696 , §§\u202f1, 2(b),  70 Stat. 633 ;  Mar. 17, 1958 ,  Pub. L. 85–345 , §§\u202f1, 2(a),  72 Stat. 36 , contained provision similar to this section, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f13001(b)(2)(G) , struck out par. (1) designation and heading “In general” and struck out par. (2) which related to alternative tax in case of capital gains.\nSubsec. (a)(2)(C).  Pub. L. 115–97, §\u202f13512(b)(3) , which directed striking out subpar. (C) of par. (2), could not be executed because of the prior amendment by  section 13001(b)(2)(G) of Pub. L. 115–97 , which struck out par. (2). See above.\nSubsec. (c).  Pub. L. 115–97, §\u202f13514(b) , struck out subsec. (c) which referred to  section 815 of this title  for taxation of distributions from pre-1984 policyholders surplus account.\n1986—Subsec. (a)(2)(C).  Pub. L. 99–514  substituted “the amount allowable as a deduction under paragraph (2)” for “the amounts allowable as deductions under paragraphs (2) and (3)” in text and struck from heading “special life insurance company deduction and” before “small”.\nAmendment by  section 13001(b)(2)(G) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13512(b)(3) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as a note under  section 453B of this title .\nPub. L. 115–97, title I, §\u202f13514(c) ,  Dec. 22, 2017 ,  131 Stat. 2144 , provided that:  “The amendments made by this section [amending this section and repealing  section 815 of this title ] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1011(c)(1) of Pub. L. 99–514 , set out as a note under  section 453B of this title .\nPub. L. 98–369, div. A, title II, §\u202f215 ,  July 18, 1984 ,  98 Stat. 758 , provided that:  “The amendments made by this subtitle [subtitle A (§§\u202f211–219) of title II of div. A of  Pub. L. 98–369 , amending this part, enacting  section 845 of this title , amending sections 72, 80, 243, 381, 401, 453B, 542, 594, 832, 841, 844, 891, 953, 1016, 1035, 1201, 1232A, 1351, 1503, 1504, 1561, 1563, 4371, 6501, 6511, 6601, and 6611 of this title, and enacting provisions set out as notes under this section and sections 453B, 806, 807, 809, 814, 816, 845, and 6655 of this title] shall apply to taxable years beginning after  December 31, 1983 .”\nPub. L. 115–97, title I, §\u202f13514(d) ,  Dec. 22, 2017 ,  131 Stat. 2144 , provided that:  \n “In the case of any stock life insurance company which has a balance (determined as of the close of such company’s last taxable year beginning before  January 1, 2018 ) in an existing policyholders surplus account (as defined in section 815 of the Internal Revenue Code of 1986, as in effect before its repeal), the tax imposed by section 801 of such Code for the first 8 taxable years beginning after  December 31, 2017 , shall be the amount which would be imposed by such section for such year on the sum of— \n “(1)  life insurance company taxable income for such year (within the meaning of such section 801 but not less than zero), plus \n \n “(2)  ⅛ of such balance.”\nPub. L. 100–647, title VI, §\u202f6076 ,  Nov. 10, 1988 ,  102 Stat. 3706 , provided that: \n “(a)   Treatment for Taxable Years Beginning Before  1987.— In the case of any taxable year beginning before  January 1, 1987 , a deficiency shall not be assessed against (and if assessed, shall not be collected from) any qualified group self-insurers’ fund to the extent such deficiency is attributable to the timing of policyholder dividend deductions. \n \n “(b)   Qualified Group Self-Insurers’ Fund .— For purposes of this section, the term ‘qualified group self-insurers’ fund’ means any group of 2 or more employers which has been in existence for not less than 2 years, and who enter into agreements to pool their liabilities under the State workers’ disability compensation laws for the purpose of qualifying as a self-insurer under such laws, if— “(1)  the group has received a certificate of approval from, and is subject to regulation by, the State board or agency that is responsible for administering the State workers’ disability compensation laws, \n \n “(2)  each employer who is a member of the group, by written agreement, is jointly and severally bound to assume and discharge, by payment, any lawful judgment or award entered by a court of competent jurisdiction or by the State agency responsible for administering the State workers’ disability compensation laws against a member of the group, \n \n “(3)  the group is prohibited by State law or regulation from using the monies collected for a purpose other than to pay, or to reserve against, claims under the State workers’ disability compensation laws and expenses, \n \n “(4)  the group is prohibited by State law or regulation from taking projected investment income into account in determining members’ premiums, \n \n “(5)  the group is required by State law or regulation to submit to the State board or agency that is responsible for administering the State workers’ disability compensation laws an audited financial statement, \n \n “(6)  the group’s investments are limited by State law or regulation to bonds, notes, or other evidences of indebtedness issued, assumed or guaranteed by the United States of America, or by an agency or instrumentality thereof, certificates of deposit in a federally insured bank, shares or savings deposits in a federally insured savings and loan association or credit union, and certificates of deposit issued by a commercial bank duly chartered under State law, and other investments which are approved by the State board or agency that is responsible for administering the State workers’ disability compensation laws, and \n \n “(7)  the group exclusively covers workers’ compensation liability, is not a commercial insurance carrier or company licensed by the State board, agency, or commissioner responsible for regulating and licensing insurance carriers and companies; and is not subject to filing under the regulatory statements of the National Association of Insurance Commissioners.”\nPub. L. 99–514, title X, §\u202f1011(d) ,  Oct. 22, 1986 ,  100 Stat. 2390 , as amended by  Pub. L. 100–647, title I, §\u202f1010(a)(2) , (3),  Nov. 10, 1988 ,  102 Stat. 3450 , 3451, provided that: \n “(1)   In general .— Notwithstanding the amendments made by subtitle B of title III [amending sections 593, 631, 852, 1201, and 1445 of this title and enacting provisions set out as notes under sections 631 and 1201 of this title], any gain recognized by a qualified life insurance company on the redemption at maturity of any market discount bond (as defined in section 1278 of the Internal Revenue Code of 1986) which was issued before  July 19, 1984 , and acquired by such company on or before  September 25, 1985 , shall be subject to tax at the rate of 31.6 percent. The preceding sentence shall apply only if the tax determined under the preceding sentence is less than the tax which would otherwise be imposed. \n \n “(2)   Qualified life insurance company .— For purposes of paragraph (1), the term ‘qualified life insurance company’ means any life insurance company subject to tax under part I of subchapter L of chapter 1 of the Internal Revenue Code of 1986.”\nPub. L. 99–514, title XVIII, §\u202f1829 ,  Oct. 22, 1986 ,  100 Stat. 2851 , provided that:  “No interest shall be payable for any period before  July 19, 1984 , on any underpayment of a tax imposed by the Internal Revenue Code of 1954 [now 1986], to the extent such underpayment was created or increased by any provision of subtitle A of title II of the Tax Reform Act of 1984 [see Effective Date note above] (relating to taxation of life insurance companies).”\nPub. L. 99–514, title XVIII, §\u202f1830 ,  Oct. 22, 1986 ,  100 Stat. 2851 , provided that:  “In the case of any taxable year beginning before  January 1, 1982 , in applying the provisions of section 255(c)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 255(c)(2) of Pub. L. 97–248 ,  96 Stat. 534 , formerly set out as a note under  section 809 of this title ], the Internal Revenue Service shall give full and complete effect to the terms of any modified coinsurance contract. The terms to be given effect within the meaning of this provision shall include, but are not limited to, the effective date and investment income rate as stated in such contract.”\nPub. L. 99–514, title XVIII, §\u202f1879(q) ,  Oct. 22, 1986 ,  100 Stat. 2911 , provided that: \n “(1)   Moratorium on collection activities .— During the period beginning on the date of the enactment of this Act [ Oct. 22, 1986 ] and ending on  August 16, 1987 , the Secretary of the Treasury or his delegate— “(A)  shall suspend any pending audit of any self-insured workers’ compensation fund where the audit involves the issue of whether such fund is a mutual insurance company, \n \n “(B)  shall not initiate any audit of any such fund involving such issue, and \n \n “(C)  shall take no steps to collect from such fund any underpayment, interest, or penalty involving such issue. \n \n \n “(2)   Suspension of running of interest .— No interest shall be payable under chapter 67 of the Internal Revenue Code of 1986 on any underpayment by a self-insured workers’ compensation fund involving such issue for the period beginning on  August 16, 1986 , and ending on  August 16, 1987 . \n \n “(3)   Additional time to file tax court proceeding .— If the period during which a petition involving such issue could have been filed with the Tax Court by any self-insured workers’ compensation fund had not expired before  August 16, 1986 , such period shall not expire before  August 16, 1987 . \n \n “(4)   Self-insured workers’ compensation fund .— For purposes of this subsection, the term ‘self-insured workers’ compensation fund’ means any self-insured workers’ compensation fund established pursuant to applicable State law regulating self-insured workers’ compensation funds.”\nPub. L. 98–369, title II, §\u202f216 ,  July 18, 1984 ,  98 Stat. 758 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1822,  Oct. 22, 1986 ,  100 Stat. 2095 , 2844;  Pub. L. 100–647, title I, §\u202f1018(i) ,  Nov. 10, 1988 ,  102 Stat. 3583 , provided that: \n “(a)   Recomputation of Reserves.— “(1)   In general .— As of the beginning of the first taxable year beginning after  December 31, 1983 , for purposes of subchapter L of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (other than section 816 thereof), the reserve for any contract shall be recomputed as if the amendments made by this subtitle [see Effective Date note above] had applied to such contract when it was issued. \n \n “(2)   Premiums earned .— For the first taxable year beginning after  December 31, 1983 , in determining ‘premiums earned on insurance contracts during the taxable year’ as provided in section 832(b)(4) of the Internal Revenue Code of 1986, life insurance reserves which are included in unearned premiums on outstanding business at the end of the preceding taxable year shall be determined as provided in section 807 of the Internal Revenue Code of 1986, as amended by this subtitle, as though section 807 was applicable to such reserves in such preceding taxable year. \n \n “(3)   Issuance date for group contracts .— For purposes of this subsection, the issuance date of any group contract shall be determined under [former] section 807(e)(2) of the Internal Revenue Code of 1986 (as added by this subtitle), except that if such issuance date cannot be determined, the issuance date shall be determined on the basis prescribed by the Secretary of the Treasury or his delegate for purposes of this subsection. \n \n \n “(b)   Fresh Start.— “(1)   In general .— Except as provided in paragraph (2), in the case of any insurance company, any change in the method of accounting (and any change in the method of computing reserves) between such company’s first taxable year beginning after  December 31, 1983 , and the preceding taxable year which is required solely by the amendments made by this subtitle [see Effective Date note above] shall be treated as not being a change in the method of accounting (or change in the method of computing reserves) for purposes of the Internal Revenue Code of 1986. The preceding sentence shall apply for purposes of computing the earnings and profits of any insurance company for its 1st taxable year beginning in 1984. The preceding sentence shall be applied by substituting ‘1985’ for ‘1984’ in the case of an insurance company which is a member of a controlled group (as defined in [former] section 806(d)(3)), the common parent of which is “(A)  a company having its principal place of business in Alabama and incorporated in Delaware on  November 29, 1979 , or \n \n “(B)  a company having its principal place of business in Houston, Texas, and incorporated in Delaware on  June 9, 1947 . \n \n \n “(2)   Treatment of adjustments from years before 1984.— “(A)   Adjustments attributable to decreases in reserves .— No adjustment under [former] section 810(d) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ]) attributable to any decrease in reserves as a result of a change in a taxable year beginning before 1984 shall be taken into account in any taxable year beginning after 1983. \n \n “(B)   Adjustments attributable to increases in reserves.— “(i)   In general .— Any adjustment under [former] section 810(d) of the Internal Revenue Code of 1986 (as so in effect) attributable to an increase in reserves as a result of a change in a taxable year beginning before 1984 shall be taken into account in taxable years beginning after 1983 to the extent that— \u2001\u2001\u2001\u2001\u2001“(I)  the amount of the adjustments which would be taken into account under such section in taxable years beginning after 1983 without regard to this subparagraph, exceeds \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the amount of any fresh start adjustment attributable to contracts for which there was such an increase in reserves as a result of such change. \n \n \n “(ii)   Fresh start adjustment .— For purposes of clause (i), the fresh start adjustment with respect to any contract is the excess (if any) of— \u2001\u2001\u2001\u2001\u2001“(I)  the reserve attributable to such contract as of the close of the taxpayer’s last taxable year beginning before  January 1, 1984 , over \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the reserve for such contract as of the beginning of the taxpayer’s first taxable year beginning after 1983 as recomputed under subsection (a) of this section. \n \n \n \n “(C)   Related income inclusions not taken into account to the extent deduction disallowed under subparagraph  (b).— No premium shall be included in income to the extent such premium is directly related to an increase in a reserve for which a deduction is disallowed by subparagraph (B). \n \n \n “(3)   Reinsurance transactions, and reserve strengthening, after  september 27, 1983 .— “(A)   In general .— Paragraph (1) shall not apply (and section 807(f) of the Internal Revenue Code of 1986 as amended by this subtitle shall apply)— “(i)  to any reserve transferred pursuant to— \u2001\u2001\u2001\u2001\u2001“(I)  a reinsurance agreement entered into after  September 27, 1983 , and before  January 1, 1984 , or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  a modification of a reinsurance agreement made after  September 27, 1983 , and before  January 1, 1984 , and \n \n \n “(ii)  to any reserve strengthening reported for Federal income tax purposes after  September 27, 1983 , for a taxable year ending before  January 1, 1984 . \n \n\n \u2001\u2001Clause (ii) shall not apply to the computation of reserves on any contract issued if such computation employs the reserve practice used for purposes of the most recent annual statement filed before  September 27, 1983 , for the type of contract with respect to which such reserves are set up. For purposes of this subparagraph, if the reinsurer’s taxable year is not a calendar year, the first day of the reinsurer’s first taxable year beginning after  December 31, 1983 , shall be substituted for ‘ January 1, 1984 ’ each place it appears. \n \n “(B)   Treatment of reserve attributable to section 818 (c)  election .— In the case of any reserve described in subparagraph (A), for purposes of section 807(f) of the Internal Revenue Code of 1986, any change in the treatment of any contract to which an election under section 818(c) of such Code (as in effect on the day before the date of the enactment of this Act) applied shall be treated as a change in the basis for determining the amount of any reserve. \n \n “(C)  10- year spread inapplicable where no 10-year spread under prior law .— In the case of any item to which section 807(f) of such Code applies by reason of subparagraph (A) or (B), such item shall be taken into account for the first taxable year beginning after  December 31, 1983  (in lieu of over the 10-year period otherwise provided in such section) unless the item would have been required to be taken into account over a period of 10 taxable years under [former] section 810(d) of such Code (as in effect on the day before the date of the enactment of this Act). \n \n “(D)   Disallowance of special life insurance company deduction and small life insurance company deduction .— Any amount included in income under section 807(f) of such Code by reason of subparagraph (A) or (B) (and any income attributable to expenses transferred in connection with the transfer of reserves described in subparagraph (A)) shall not be taken into account for purposes of determining the amount of special life insurance company deduction and the small life insurance company deduction. \n \n “(E)   Disallowance of deductions under [former] section 809 (d).— No deduction shall be allowed under paragraph (5) or (6) of [former] section 809(d) of such Code (as in effect before the amendments made by this subtitle) with respect to any amount described in either such paragraph which is transferred in connection with the transfer of reserves described in subparagraph (A). \n \n \n “(4)   Elections under section 818 (c)  after  september 27, 1983 , not to take effect.— “(A)   In general .— Except as provided in subparagraph (B), any election after  September 27, 1983 , under section 818(c) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) shall not take effect. \n \n “(B)   Exception for certain contracts issued under plan of insurance first filed after  march 1, 1982 , and before  september 28, 1983 .— Paragraph (3) and subparagraph (A) of this paragraph shall not apply to any election under such section 818(c) if more than 95 percent of the reserves computed in accordance with such election are attributable to risks under life insurance contracts issued by the taxpayer under a plan of insurance first filed after  March 1, 1982 , and before  September 28, 1983 . \n \n “(C)   Section 818( c ) elections made by certain acquired companies.— “(i)   In general .— If the case of any corporation— \u2001\u2001\u2001\u2001\u2001“(I)  which made an election under such section 818(c ) before  September 28, 1983 , and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  which was acquired in a qualified stock purchase (as defined in section 338(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) before  December 31, 1983 , \n \n \n\n \u2001\u2001the fact that such corporation is treated as a new corporation under section 338 of such Code shall not result in the election described in subclause (I) not applying to such new corporation. \n “(ii)   Time for making section 818( c ) or 338 election .— In the case of any corporation described in clause (i), the time for making an election under section 818(c) of such Code (with respect to the first taxable year of the corporation beginning in 1983 and ending after  September 28, 1983 ), or making an election under section 338 of such Code with respect to the qualified stock purchase described in clause (i)(II), shall not expire before the close of the 60th day after the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]. \n \n “(iii)   Statute of limitations .— In the case of any such election under section 818(c) or 338 of such Code which would not have been timely made but for clause (ii), the period for assessing any deficiency attributable to such election (or for filing claim for credit or refund of any overpayment attributable to such election) shall not expire before the date 2 years after the date of the enactment of this Act [ July 18, 1984 ]. \n \n \n \n “(5)   Recapture of reinsurance after  december 31, 1983 .— If (A) insurance or annuity contracts in force on  December 31, 1983 , are subject to a conventional coinsurance agreement entered into after  December 31, 1981 , and before  January 1, 1984 , and (B) such contracts are recaptured by the reinsured in any taxable year beginning after  December 31, 1983 , then— “(i)  if the amount of the reserves with respect to the recaptured contracts, computed at the date of recapture, that the reinsurer would have taken into account under [former] section 810(c) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) exceeds the amount of the reserves with respect to the recaptured contracts, computed at the date of recapture, taken into account by the reinsurer under section 807(c) of the Internal Revenue Code of 1986 (as amended by this subtitle), such excess (but not greater than the amount of such excess if computed on  January 1, 1984 ) shall be taken into account by the reinsurer under the method described in section 807(f)(1)(B)(ii) of the Internal Revenue Code of 1986 (as amended by this subtitle) commencing with the taxable year of recapture, and \n \n “(ii)  the amount, if any, taken into account by the reinsurer under clause (i) for purposes of part I of subchapter L of chapter 1 of the Internal Revenue Code of 1986 shall be taken into account by the reinsured under the method described in section 807(f)(1)(B)(i) of the Internal Revenue Code of 1986 (as amended by this subtitle) commencing with the taxable year of recapture. \n \n\n The excess described in clause (i) shall be reduced by any portion of such excess to which section 807(f) of the Internal Revenue Code of 1986 applies by reason of paragraph (3) of this subsection. For purposes of this paragraph, the term ‘reinsurer’ refers to the taxpayer that held reserves with respect to the recaptured contracts as of the end of the taxable year preceding the first taxable year beginning after  December 31, 1983 , and the term ‘reinsured’ refers to the taxpayer to which such reserves are ultimately transferred upon termination. \n \n \n “(c)   Election Not To Have Reserves Recomputed.— “(1)   In general .— If a qualified life insurance company makes an election under this paragraph— “(A)  subsection (a) shall not apply to such company, and \n \n “(B)  as of the beginning of the first taxable year beginning after  December 31, 1983 , and thereafter, the reserve for any contract issued before the first day of such taxable year by such company shall be the statutory reserve for such contract (within the meaning of [former] section 809(b)(4)(B)(i) of the Internal Revenue Code of 1986). \n \n \n “(2)   Election with respect to contracts issued after 1983 and before 1989.— “(A)   In general .— If— “(i)  a qualified life insurance company makes an election under paragraph (1), and \n \n “(ii)  the tentative LICTI (within the meaning of [former] section 806(c) of such Code) of such company for its first taxable year beginning after  December 31, 1983 , does not exceed $3,000,000 (determined with regard to this paragraph), \n \n\n \u2001\u2001such company may elect under this paragraph to have the reserve for any contract issued on or after the first day of such first taxable year and before  January 1, 1989 , be equal to the greater of the statutory reserve for such contract (adjusted as provided in subparagraph (B)) or the net surrender value of such contract (as defined in section 807(e)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]). \n \n “(B)   Adjustment to reserves .— If this paragraph applies to any contract, the opening and closing statutory reserves for such contract shall be adjusted as provided under the principles of section 805(c)(1) of such Code (as in effect for taxable years beginning in 1982 and 1983), except that section 805(c)(1)(B)(ii) of such Code (as so in effect) shall be applied by substituting— “(i)  the prevailing State assumed interest rate (within the meaning of section 807(c)(4) of such Code), for \n \n “(ii)  the adjusted reserves rate. \n \n \n \n “(3)   Qualified life insurance company .— For purposes of this subsection, the term ‘qualified life insurance company’ means any life insurance company which, as of  December 31, 1983 , had assets of less than $100,000,000 (determined in the same manner as under [former] section 806(b)(3) of such Code). \n \n “(4)   Special rules for controlled groups .— For purposes of applying the dollar limitations of paragraphs (2) and (3), rules similar to the rules of [former] section 806(d) of such Code shall apply. \n \n “(5)   Elections .— Any election under paragraph (1) or (2)— “(A)  shall be made at such time and in such manner as the Secretary of the Treasury may prescribe, and \n \n “(B)  once made, shall be irrevocable.”\nPub. L. 98–369, div. A, title II, §\u202f217(e) ,  July 18, 1984 ,  98 Stat. 762 , provided that:  “If, during the 10-year period ending on  December 31, 1983 , a company has, as authorized by the law of the State in which the company is domiciled, been operating as a mutual life insurance company with shareholders, such company shall be treated as a stock life insurance company.”\nPub. L. 98–369, div. A, title II, §\u202f217(g) ,  July 18, 1984 ,  98 Stat. 763 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Effective for taxable years beginning after  December 31, 1981 , and before  January 1, 1984 , subsections (c)(1)(F) and (d)(12) of section 809 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ]) shall not apply to dividends to policyholders reimbursed to the taxpayer by a reinsurer in respect of accident and health policies reinsured under a reinsurance agreement entered into before  June 30, 1955 , pursuant to the direction of the National Association of Insurance Commissioners and approved by the State insurance commissioner of the taxpayer’s State of domicile. For purposes of subchapter L of chapter 1 of such Code (as in effect on the day before the date of the enactment of this Act) any such dividends shall be treated as dividends of the reinsurer and not the taxpayer.”\nPub. L. 98–369, div. A, title II, §\u202f231 ,  July 18, 1984 ,  98 Stat. 776 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Revenue Reports .— Not later than  July 1, 1985 , and July 1 of each calendar year thereafter, the Secretary of the Treasury shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on— “(1)  the aggregate amount of revenue received under part I of subchapter L of chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for the most recent taxable years for which data are available, \n \n “(2)  a comparison between the amount of such revenue and the amount anticipated by reason of changes made by the Tax Equity and Fiscal Responsibility Act of 1982 [ Pub. L. 97–248 ] or the Life Insurance Tax Act of 1984 [probably means title II of div. A of  Pub. L. 98–369 ], and \n \n “(3)  the reasons for any difference between such aggregate revenues and anticipated revenues. \n \n \n “(b)   Report With Respect to Segment Balance, Etc.— “(1)   In general .— The Secretary of the Treasury (in consultation with the Joint Committee on Taxation, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate) shall conduct a full and complete study of the operation of part I of subchapter L of chapter 1 of the Internal Revenue Code of 1986 during 1984, 1985, and 1986. Such study shall also include an analysis of life insurance products and the taxation thereof. Such study shall also include an analysis of whether part I of such subchapter L operates as a disincentive to growing companies. \n \n “(2)   Items to be included .— The study conducted under paragraph (1) shall include— “(A)  an analysis of the portion of the taxes paid by mutual life insurance companies and stock life insurance companies, and \n \n “(B)  any other data considered relevant by either stock life insurance companies or mutual life insurance companies in determining appropriate segment balance, such as the respective amounts of the following items held by each segment of the industry— “(i)  equity, \n \n “(ii)  life insurance reserves, \n \n “(iii)  other types of reserves, \n \n “(iv)  dividends paid to policyholders and shareholders, \n \n “(v)  pension business, \n \n “(vi)  total assets, and \n \n “(vii)  gross receipts. \n \n \n\n Such report shall also include an analysis of the extent to which taxes paid by stockholders of life insurance companies shall be included in analyzing segment balance. \n \n “(3)   Reports.— “(A)   Interim reports .— The Secretary of the Treasury shall submit interim reports on the study conducted under this subsection to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate not later than  July 1, 1986 , 1987, and 1988. \n \n “(B)   Final report .— Not later than  January 1, 1989 , the Secretary of the Treasury shall submit a final report on the study conducted under this subsection to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. \n \n \n \n “(c)   Authority To Require Data .— The Secretary of the Treasury shall have authority to require reporting of such data with respect to life insurance companies and their products as may be necessary to carry out the purposes of this section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'Each net decrease in reserves which is required by section 807(a) to be taken into account under this paragraph.\nAll amounts not includible under paragraph (1) or (2) which under this subtitle are includible in gross income.\nExcept as provided in subparagraph (B), the term “return premiums” does not include any policyholder dividends.\nSubparagraph (A) shall not apply to amounts of premiums or other consideration returned to another life insurance company in respect of indemnity reinsurance.\nA prior section 803, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 256 ;  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 39 , related to income and deductions in the case of life insurance companies, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 112 .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'For purposes of this part, the term “life insurance deductions” means the general deductions provided in section 805.\nA prior section 804, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 115 ; amended  Pub. L. 87–858, §\u202f3(b)(2) ,  Oct. 23, 1962 ,  76 Stat. 1137 ;  Pub. L. 88–272, title II, §\u202f214(b)(3) ,  Feb. 26, 1964 ,  78 Stat. 55 ;  Pub. L. 91–172, title IV, §\u202f401(b)(2)(D) ,  Dec. 30, 1969 ,  83 Stat. 602 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(96) , (b)(1)(J)(i), (iii), (K), (M), (33)(F),  Oct. 4, 1976 ,  90 Stat. 1780 , 1791, 1801, defined the term “taxable investment income” and provided for the computation of such income, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 804, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 258 ;  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 41 , related to reserve and other policy liability deductions, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n2017— Pub. L. 115–97  substituted “means the general deductions provided in section 805.” for “means—\n“(1) the general deductions provided in section 805, and\n“(2) the small life insurance company deduction (if any) determined under section 806(a).”\n1986—Pars. (2), (3).  Pub. L. 99–514  redesignated par. (3) as (2), substituted “section 806(a)” for “section 806(b)”, and struck out former par. (2), which read as follows: “the special life insurance company deduction determined under section 806(a), and”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as a note under  section 453B of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1011(c)(1) of Pub. L. 99–514 , set out as a note under  section 453B of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'All claims and benefits accrued, and all losses incurred (whether or not ascertained), during the taxable year on insurance and annuity contracts.\nThe net increase in reserves which is required by section 807(b) to be taken into account under this paragraph.\nThe deduction for policyholder dividends (determined under section 808(c)).\nExcept as provided in clause (ii), the term “100 percent dividend” means any dividend if the percentage used for purposes of determining the deduction allowable under section 243 or 245(b) is 100 percent.\nThe term “100 percent dividend” does not include any distribution by a corporation which is not an insurance company to the extent such distribution is out of tax-exempt interest, or out of the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies, or out of dividends which are not 100 percent dividends (determined with the application of this clause as if it applies to distributions by all corporations including insurance companies).\nFor purposes of this subparagraph, the term “prorated amounts” means tax-exempt interest, the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies, and dividends other than 100 percent dividends.\nRules similar to the rules of this subsection shall apply in the case of 100 percent dividends paid by an insurance company which is not a life insurance company.\nSubparagraph (A)(i) (and not subparagraph (A)(ii)) shall apply to any dividend received by a foreign corporation from a domestic corporation which would be a 100 percent dividend if section 1504(b)(3) did not apply for purposes of applying section 243(b)(2).\nThe consideration (other than consideration arising out of indemnity reinsurance) in respect of the assumption by another person of liabilities under insurance and annuity contracts.\nSubject to the modifications provided by subsection (b), all other deductions allowed under this subtitle for purposes of computing taxable income.\nIn applying section 163 (relating to deduction for interest), no deduction shall be allowed for interest in respect of items described in section 807(c).\nSection 171 shall not apply.\nFor rules relating to amortizable bond premium, see section 811(b).\nExcept as provided in subsection (a)(4), the deductions for dividends received provided by sections 243 and 245 shall not be allowed.\nAnother  section 1084(b) of Pub. L. 105–34  amended sections 101 and 264 of this title.\nA prior section 805, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 118 ; amended  Pub. L. 87–792, §\u202f7(g) ,  Oct. 10, 1962 ,  76 Stat. 829 ;  Pub. L. 88–571, §\u202f5(a) ,  Sept. 2, 1964 ,  78 Stat. 860 ;  Pub. L. 91–172, title IX, §\u202f907(a)(1) ,  Dec. 30, 1969 ,  83 Stat. 715 ;  Pub. L. 93–406, title II , §§\u202f1016(a)(6), 2002(g)(9), 2004(c)(3),  Sept. 2, 1974 ,  88 Stat. 929 , 970, 986;  Pub. L. 94–267 , §\u202f(1)(c)(4),  Apr. 15, 1976 ,  90 Stat. 367 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(97) ,  Oct. 4, 1976 ,  90 Stat. 1780 ;  Pub. L. 95–600, title I , §§\u202f141(f)(9), 155(a),  Nov. 6, 1978 ,  92 Stat. 2795 , 2801;  Pub. L. 97–248, title II , §§\u202f257(a), 260(b), 261, 264(a)–(c)(1),  Sept. 3, 1982 ,  96 Stat. 537 , 540, 543, 544, related to policy and other contract liability requirements, prior to general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 805, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 258 ;  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 43 , authorized a special interest deduction, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n2017—Subsec. (a)(4)(B)(i).  Pub. L. 115–97, §\u202f13512(b)(5) , redesignated cl. (ii) as (i) and struck out former cl. (i) which read as follows: “the small life insurance company deduction,”.\nSubsec. (a)(4)(B)(ii).  Pub. L. 115–97, §\u202f13512(b)(5) , redesignated cl. (iii) as (ii). Former cl. (ii) redesignated (i).\nPub. L. 115–97, §\u202f13511(b)(4) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the operations loss deduction provided by section 810,”.\nSubsec. (a)(4)(B)(iii), (iv).  Pub. L. 115–97, §\u202f13512(b)(5) , redesignated cls. (iii) and (iv) as (ii) and (iii), respectively.\nSubsec. (a)(5).  Pub. L. 115–97, §\u202f13511(b)(5) , struck out par. (5) which provided for the operations loss deduction determined under section 810.\nSubsec. (b)(2)(A)(iii).  Pub. L. 115–97, §\u202f13512(b)(6) , redesignated cl. (iv) as (iii) and struck out former cl. (iii) which read as follows: “the small life insurance company deduction,”.\nSubsec. (b)(2)(A)(iv).  Pub. L. 115–97, §\u202f13512(b)(6) , redesignated cl. (v) as (iv). Former cl. (iv) redesignated (iii).\nPub. L. 115–97, §\u202f13511(b)(6) , amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows: “any operations loss carryback to the taxable year under section 810, and”.\nSubsec. (b)(2)(A)(v).  Pub. L. 115–97, §\u202f13512(b)(6) , redesignated cl. (v) as (iv).\nSubsec. (b)(4), (5).  Pub. L. 115–97, §\u202f13511(a) , redesignated par. (5) as (4) and struck out former par. (4) which did not allow the net operating loss deduction provided in section 172, except as provided by section 844.\n2014—Subsec. (a)(4)(A).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,” after “sections 243” in introductory provisions.\nSubsec. (a)(4)(B).  Pub. L. 113–295, §\u202f221(a)(41)(I) , struck out “,\u2000244(a),” after “sections 243(a)(1)” in introductory provisions and in cl. (iii).\nSubsec. (a)(4)(C)(i), (D)(i).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,” after “section 243”.\nSubsec. (b)(5).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,” after “sections 243”.\n1997—Subsec. (a)(4)(C)(ii).  Pub. L. 105–34, §\u202f1084(b)(1)(A) , inserted “,\u2000or out of the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,” after “tax-exempt interest”.\nSubsec. (a)(4)(D)(iii).  Pub. L. 105–34, §\u202f1084(b)(1)(B) , substituted “,\u2000the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies, and” for “and”.\nSubsec. (a)(4)(F).  Pub. L. 105–34, §\u202f1084(b)(1)(C) , added subpar. (F).\n1996—Subsec. (a)(4)(E).  Pub. L. 104–188  substituted “243(b)(2)” for “243(b)(5)”.\n1987—Subsec. (a)(4)(B).  Pub. L. 100–203  substituted “shall be the percentage determined under section 246(b)(3) of the life insurance company taxable income (and such limitation shall be applied as provided in section 246(b)(3))” for “shall be 80 percent of the life insurance company taxable income”.\n1986—Subsec. (a)(4)(B).  Pub. L. 99–514, §\u202f611(a)(5) , substituted “80 percent” for “85 percent” in introductory provisions.\nSubsec. (a)(4)(B)(i).  Pub. L. 99–514, §\u202f1011(b)(4) , struck out “the special life insurance company deduction and” before “the small life”.\nSubsec. (a)(4)(C) to (E).  Pub. L. 99–514, §\u202f1821(p) , added subpars. (C) and (D), redesignated former subpar. (D) as (E), and struck out former subpar. (C) which read as follows: “For purposes of subparagraph (A), the term ‘100 percent dividend’ means any dividend if the percentage used for purposes of determining the deduction allowable under section 243 or 244 is 100 percent. Such term does not include any dividend to the extent it is a distribution out of tax-exempt interest or out of dividends which are not 100 percent dividends (determined with the application of this sentence).”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f805(c)(6) , redesignated par. (3) as (2). Former par. (2), which provided that section 166(c) (relating to reserve for bad debts) shall not apply, was struck out.\nSubsec. (b)(2)(A)(iii).  Pub. L. 99–514, §\u202f1011(b)(4) , which directed that subsec. (b)(3)(A)(iii) be amended by striking out “the special life insurance company deduction and” before “the small life”, was executed to subsec. (b)(2)(A)(iii) to reflect the probable intent of Congress and the redesignation of subsec. (b)(3) as (b)(2) by  Pub. L. 99–514, §\u202f805(c)(6) .\nSubsec. (b)(3) to (6).  Pub. L. 99–514, §\u202f805(c)(6) , redesignated pars. (3) to (6) as (2) to (5), respectively.\nAmendment by section 13511(a), (b)(4)–(6) of  Pub. L. 115–97  applicable to losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13511(c) of Pub. L. 115–97 , set out as a note under  section 381 of this title .\nAmendment by section 13512(b)(5), (6) of  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as a note under  section 453B of this title .\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to contracts issued after  June 8, 1997 , in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see  section 1084(d) of Pub. L. 105–34 , set out as a note under  section 101 of this title .\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 100–203  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10221(e)(2) of Pub. L. 100–203 , as amended, set out as a note under  section 243 of this title .\nAmendment by  section 611(a)(5) of Pub. L. 99–514  applicable to dividends received or accrued after  Dec. 31, 1986 , in taxable years ending after such date, see  section 611(b)(1) of Pub. L. 99–514 , set out as a note under  section 246 of this title .\nAmendment by  section 805(c)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain changes required in method of accounting, see  section 805(d) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nAmendment by  section 1011(b)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1011(c)(1) of Pub. L. 99–514 , set out as a note under  section 453B of this title .\nAmendment by  section 1821(p) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title II, §\u202f211(a) ,  July 18, 1984 ,  98 Stat. 724 ; amended  Pub. L. 99–514, title X, §\u202f1011(a) , (b)(5)–(8), (11)(A),  Oct. 22, 1986 ,  100 Stat. 2388 , 2389, related to small life insurance company deduction.\nA prior section 806, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 120 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to certain changes in reserves and assets, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 806,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 258 , related to adjustment for certain reserves, prior to the general revision of this part by  act Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 36 .\nRepeal applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 453B of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'In no event shall the reserves determined under subparagraphs (A) or (B) for any contract as of any time exceed the amount which would be taken into account with respect to such contract as of such time in determining statutory reserves (as defined in paragraph (4)).\nIn no event shall any amount or item be taken into account more than once in determining any reserve under this subchapter.\nThe amount of the reserve determined under this paragraph with respect to any contract shall be determined by using the tax reserve method applicable to such contract.\nThe CRVM in the case of a contract covered by the CRVM.\nThe CARVM in the case of a contract covered by the CARVM.\nIn the case of any noncancellable accident and health insurance contract, the reserve method prescribed by the National Association of Insurance Commissioners which covers such contract as of the date the reserve is determined.\nThe term “CRVM” means the Commissioners’ Reserve Valuation Method prescribed by the National Association of Insurance Commissioners which is applicable to the contract and in effect as of the date the reserve is determined.\nThe term “CARVM” means the Commissioners’ Annuities Reserve Valuation Method prescribed by the National Association of Insurance Commissioners which is applicable to the contract and in effect as of the date the reserve is determined.\nNothing in any reserve method described under this paragraph shall permit any increase in the reserve because the net premium (computed on the basis of assumptions required under this subsection) exceeds the actual premiums or other consideration charged for the benefit.\nThe term “statutory reserves” means the aggregate amount set forth in the annual statement with respect to items described in section 807(c). Such term shall not include any reserve attributable to a deferred and uncollected premium if the establishment of such reserve is not permitted under section 811(c).\nIn the case of a pension plan contract, the balance in the policyholder’s fund shall be treated as the net surrender value of such contract. For purposes of the preceding sentence, such balance shall be determined with regard to any penalty or forfeiture which would be imposed on surrender but without regard to any market value adjustment.\nFor purposes of this part, the amount of the life insurance reserve for any qualified supplemental benefit shall be computed separately as though such benefit were under a separate contract.\nIn the case of any qualified foreign contract, the amount of the reserve shall be not less than the minimum reserve required by the laws, regulations, or administrative guidance of the regulatory authority of the foreign country referred to in subparagraph (B) (but not to exceed the net level reserves for such contract).\nIn the case of a life insurance contract issued before  January 1, 1989 , under an existing plan of insurance, the life insurance reserve for any benefit to which this paragraph applies shall be computed separately under subsection (d)(1) from any other reserve under the contract.\nThis paragraph applies to any term insurance or annuity benefit with respect to which the requirements of clauses (i) and (ii) of paragraph (3)(C) are met.\nFor purposes of this paragraph, the term “existing plan of insurance” means, with respect to any contract, any plan of insurance which was filed by the company using such contract in one or more States before  January 1, 1984 , and is on file in the appropriate State for such contract.\nFor purposes of this paragraph, the items referred to in this subparagraph are the items described in subsection (c) which consist of unearned premiums and premiums received in advance under insurance contracts not described in section 816(b)(1)(B).\nThe Secretary shall require reporting (at such time and in such manner as the Secretary shall prescribe) with respect to the opening balance and closing balance of reserves and with respect to the method of computing reserves for purposes of determining income.\nExcept as provided in section 381(c)(22) (relating to carryovers in certain corporate readjustments), if for any taxable year the taxpayer is not a life insurance company, the balance of any adjustments under this subsection shall be taken into account for the preceding taxable year.\nAnother  section 1084(b) of Pub. L. 105–34  amended sections 101 and 264 of this title.\nA prior section 807,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 259 , related to adjustment for certain reserves, prior to the general revision of this part by  act Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 36 .\n2018—Subsec. (e)(5)(A)(i).  Pub. L. 115–141  substituted “subparagraph (B)” for “subparagraph (C)”.\n2017—Subsec. (c).  Pub. L. 115–97, §\u202f13517(a)(1) , directed the general amendment of the second sentence of subsec. (c), which was executed by substituting “For purposes of paragraph (3), the appropriate rate of interest is the highest rate or rates permitted to be used to discount the obligations by the National Association of Insurance Commissioners as of the date the reserve is determined.” for “For purposes of paragraph (3), the appropriate rate of interest for any obligation is whichever of the following rates is the highest as of the time such obligation first did not involve life, accident, or health contingencies: the applicable Federal interest rate under subsection (d)(2)(B)(i), the prevailing State assumed interest rate under subsection (d)(2)(B)(ii), or the rate of interest assumed by the company in determining the guaranteed benefit.” in concluding provisions.\nSubsec. (d)(1), (2).  Pub. L. 115–97, §\u202f13517(a)(2)(A) , (C), added pars. (1) and (2) and struck out former pars. (1) and (2) which read as follows:\n“(1)  In general .—For purposes of this part (other than section 816), the amount of the life insurance reserves for any contract shall be the greater of—\n“(A) the net surrender value of such contract, or\n“(B) the reserve determined under paragraph (2).\nIn no event shall the reserve determined under the preceding sentence for any contract as of any time exceed the amount which would be taken into account with respect to such contract as of such time in determining statutory reserves (as defined in paragraph (6)).\n“(2)  Amount of reserve .—The amount of the reserve determined under this paragraph with respect to any contract shall be determined by using—\n“(A) the tax reserve method applicable to such contract,\n“(B) the greater of—\n“(i) the applicable Federal interest rate, or\n“(ii) the prevailing State assumed interest rate, and\n“(C) the prevailing commissioners’ standard tables for mortality and morbidity adjusted as appropriate to reflect the risks (such as substandard risks) incurred under the contract which are not otherwise taken into account.”\nSubsec. (d)(3)(A)(iii).  Pub. L. 115–97, §\u202f13517(a)(2)(D) , substituted “,\u2000the reserve method prescribed by the National Association of Insurance Commissioners which covers such contract as of the date the reserve is determined” for “(other than a qualified long-term care insurance contract, as defined in section 7702B(b)), a 2-year full preliminary term method”.\nSubsec. (d)(3)(A)(iv)(I).  Pub. L. 115–97, §\u202f13517(a)(2)(E) , substituted “(as of the date the reserve is determined)” for “(as of the date of issuance)”.\nSubsec. (d)(3)(A)(iv)(II).  Pub. L. 115–97, §\u202f13517(a)(2)(F) , substituted “as of the date the reserve is determined for” for “as of the date of the issuance of”.\nSubsec. (d)(3)(B).  Pub. L. 115–97, §\u202f13517(a)(2)(G) , (H), substituted “applicable to the contract and in effect as of the date the reserve is determined” for “in effect on the date of the issuance of the contract” in cls. (i) and (ii).\nSubsec. (d)(4) to (6).  Pub. L. 115–97, §\u202f13517(a)(2)(A) , (B), redesignated par. (6) as (4) and struck out former pars. (4) and (5) which related to applicable Federal and prevailing State assumed interest rates and prevailing commissioners’ standard tables, respectively.\nSubsec. (e)(2).  Pub. L. 115–97, §\u202f13517(a)(3)(C) , amended par. (2) generally. Prior to amendment, par. (2) related to supplemental benefits.\nPub. L. 115–97, §\u202f13517(a)(3)(A) , (B), redesignated par. (3) as (2) and struck out former par. (2) which related to issuance date in case of group contracts.\nSubsec. (e)(3), (4).  Pub. L. 115–97, §\u202f13517(a)(3)(B) , redesignated pars. (4) and (6) as (3) and (4), respectively. Former par. (3) redesignated (2).\nSubsec. (e)(5).  Pub. L. 115–97, §\u202f13517(a)(3)(A) , (B), redesignated par. (7) as (5) and struck out former par. (5) which related to treatment of substandard risks.\nSubsec. (e)(6).  Pub. L. 115–97, §\u202f13517(a)(3)(D) , added par. (6). Former par. (6) redesignated (4).\nSubsec. (e)(7).  Pub. L. 115–97, §\u202f13517(a)(3)(B) , redesignated par. (7) as (5).\nSubsec. (f)(1).  Pub. L. 115–97, §\u202f13513(a) , amended par. (1) generally. Prior to amendment, par. (1) related to 10-year spread method of computation.\n2014—Subsec. (e)(7)(B), (C).  Pub. L. 113–295  redesignated subpar. (C) as (B) and struck out former subpar. (B) which related to transitional rule.\n2004—Subsecs. (a)(2)(B), (b)(1)(B).  Pub. L. 108–218, §\u202f205(b)(1) , struck out “the sum of (i)” before “the amount” and struck out “plus (ii) any excess described in section 809(a)(2) for the taxable year,” after “to which section 264(f) applies,”.\nSubsec. (d)(1).  Pub. L. 108–218, §\u202f205(b)(2)(A) , substituted “paragraph (6)” for “section 809(b)(4)(B)” in concluding provisions.\nSubsec. (d)(6).  Pub. L. 108–218, §\u202f205(b)(2)(B) , added par. (6).\n1997—Subsec. (a)(2)(B).  Pub. L. 105–34, §\u202f1084(b)(2)(A) , substituted “interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,” for “interest,”.\nSubsec. (b)(1)(B).  Pub. L. 105–34, §\u202f1084(b)(2)(B) , substituted “interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,” for “interest,”.\n1996—Subsec. (d)(3)(A)(iii).  Pub. L. 104–191  inserted “(other than a qualified long-term care insurance contract, as defined in section 7702B(b))” after “insurance contract”.\nSubsec. (d)(3)(B)(ii).  Pub. L. 104–188  substituted “Commissioners’ Annuities” for “Commissoners’ Annuities”.\n1990—Subsec. (e)(7).  Pub. L. 101–508  added par. (7).\n1987—Subsec. (c).  Pub. L. 100–203, §\u202f10241(b)(2)(A) , substituted “whichever of the following rates is the highest as of the time such obligation first did not involve life, accident, or health contingencies: the applicable Federal interest rate under subsection (d)(2)(B)(i), the prevailing State assumed interest rate under subsection (d)(2)(B)(ii), or the rate of interest assumed by the company in determining the guaranteed benefit.” for “the higher of the prevailing State assumed interest rate as of the time such obligation first did not involve life, accident, or health contingencies or the rate of interest assumed by the company (as of such time) in determining the guaranteed benefit.” in third to last sentence.\nSubsec. (d)(2)(B).  Pub. L. 100–203, §\u202f10241(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the prevailing State assumed interest rate, and”.\nSubsec. (d)(4).  Pub. L. 100–203, §\u202f10241(b)(1) , substituted “Applicable Federal interest rate; prevailing State assumed interest rate” for “Prevailing State assumed interest rate” in heading and amended text generally, revising and restating as subpars. (A) and (B) provisions of former subpars. (A) to (D).\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f1023(b) , inserted at end “For purposes of paragraph (2) and section 805(a)(1), the amount of the unpaid losses (other than losses on life insurance contracts) shall be the amount of the discounted unpaid losses as defined in section 846.”\nPub. L. 99–514, §\u202f1821(a) , inserted at end “In no case shall the amount determined under paragraph (3) for any contract be less than the net surrender value of such contract.”\nSubsec. (d)(5)(C).  Pub. L. 99–514, §\u202f1821(s) , inserted at end “When the Secretary by regulation changes the table applicable to a type of contract, the new table shall be treated (for purposes of subparagraph (B) and for purposes of determining the issue dates of contracts for which it shall be used) as if it were a new prevailing commissioner’s standard table adopted by the twenty-sixth State as of a date (no earlier than the date the regulation is issued) specified by the Secretary.”\nPub. L. 115–97, title I, §\u202f13513(b) ,  Dec. 22, 2017 ,  131 Stat. 2143 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13517(c) ,  Dec. 22, 2017 ,  131 Stat. 2147 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 808, 811, 846, 848, 954, and 7702 of this title] shall apply to taxable years beginning after  December 31, 2017 . \n \n “(2)   Transition rule .— For the first taxable year beginning after  December 31, 2017 , the reserve with respect to any contract (as determined under section 807(d) of the Internal Revenue Code of 1986) at the end of the preceding taxable year shall be determined as if the amendments made by this section had applied to such reserve in such preceding taxable year. \n \n “(3)   Transition relief.— “(A)   In general .— If— “(i)  the reserve determined under section 807(d) of the Internal Revenue Code of 1986 (determined after application of paragraph (2)) with respect to any contract as of the close of the year preceding the first taxable year beginning after  December 31, 2017 , differs from \n \n “(ii)  the reserve which would have been determined with respect to such contract as of the close of such taxable year under such section determined without regard to paragraph (2), \n \n\n then the difference between the amount of the reserve described in clause (i) and the amount of the reserve described in clause (ii) shall be taken into account under the method provided in subparagraph (B). \n \n “(B)   Method .— The method provided in this subparagraph is as follows: “(i)  If the amount determined under subparagraph (A)(i) exceeds the amount determined under subparagraph (A)(ii), 1/8 of such excess shall be taken into account, for each of the 8 succeeding taxable years, as a deduction under section 805(a)(2) or 832(c)(4) of such Code, as applicable. \n \n “(ii)  If the amount determined under subparagraph (A)(ii) exceeds the amount determined under subparagraph (A)(i), 1/8 of such excess shall be included in gross income, for each of the 8 succeeding taxable years, under section 803(a)(2) or 832(b)(1)(C) of such Code, as applicable.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 108–218, title II, §\u202f205(c) ,  Apr. 10, 2004 ,  118 Stat. 610 , provided that:  “The amendments made by this section [amending this section and sections 808, 812, 817, and 842 of this title and repealing  section 809 of this title ] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by  Pub. L. 105–34  applicable to contracts issued after  June 8, 1997 , in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see  section 1084(d) of Pub. L. 105–34 , set out as a note under  section 101 of this title .\nAmendment by  Pub. L. 104–191  applicable to contracts issued after  Dec. 31, 1997 , see  section 321(f) of Pub. L. 104–191 , set out as an Effective Date note under  section 7702B of this title .\nPub. L. 101–508, title XI, §\u202f11302(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–450 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning on or after  September 30, 1990 .”\nPub. L. 100–203, title X, §\u202f10241(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–420 , provided that:  “The amendments made by this section [amending this section and  section 812 of this title ] shall apply to contracts issued in taxable years beginning after  December 31, 1987 .”\nAmendment by  section 1023(b) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1023(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 846 of this title .\nAmendment by section 1821(a), (s) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title II, §\u202f217(f) ,  July 18, 1984 ,  98 Stat. 763 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Mortality and morbidity tables .— In the case of a contract issued by an assessment life insurance company, the mortality and morbidity tables used in computing statutory reserves for such contract shall be used for purposes of paragraph (2)(C) of section 807(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this subtitle [subtitle A (§§\u202f211–219) of title II of div. A of  Pub. L. 98–369 ]) if such tables were— “(A)  in use since 1965, and \n \n “(B)  developed on the basis of the experience of assessment life insurance companies in the State in which such assessment life insurance company is domiciled. \n \n \n “(2)   Treatment of certain mutual assessment life insurance companies .— In the case of any contract issued by a mutual assessment life insurance company which— “(A)  has been in existence since 1965, and \n \n “(B)  operates under chapter 13 or 14 of the Texas Insurance Code, \n \n\n for purposes of part I of subchapter L of chapter 1 of the Internal Revenue Code of 1986, the amount of the life insurance reserves for such contract shall be equal to the amount taken into account with respect to such contract in determining statutory reserves. \n \n “(3)   Statutory reserves .— For purposes of this subsection, the term ‘statutory reserves’ has the meaning given to such term by [former] section 809(b)(4)(B) of such Code.”\nPub. L. 98–369, div. A, title II, §\u202f217(n) ,  July 18, 1984 ,  98 Stat. 766 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1823,  Oct. 22, 1986 ,  100 Stat. 2095 , 2845, provided that:  \n “A company shall be treated as meeting the requirements of section 807(d)(3)(A)(iii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this Act, with respect to any directly-written noncancellable accident and health insurance contract (whether under existing or new plans of insurance) for any taxable year if— \n “(1)  such company— “(A)  was using the net level reserve method to compute at least 99 percent of its statutory reserves on such contracts as of  December 31, 1982 , and \n \n “(B)  received more than half its total direct premiums in 1982 from directly-written noncancellable accident and health insurance, \n \n \n “(2)  after  December 31, 1983 , and through such taxable year, such company has continuously used the net level reserve method for computing at least 99 percent of its tax and statutory reserves on such contracts, and \n \n “(3)  for any such contract for which the company does not use the net level reserve method, such company uses the same method for computing tax reserves as such company uses for computing its statutory reserves.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'For purposes of this part, the term “policyholder dividend” means any dividend or similar distribution to policyholders in their capacity as such.\nThe deduction for policyholder dividends for any taxable year shall be an amount equal to the policyholder dividends paid or accrued during the taxable year.\nThe term “premium adjustment” means any reduction in the premium under an insurance or annuity contract which (but for the reduction) would have been required to be paid under the contract.\nThe term “experience-rated refund” means any refund or credit based on the experience of the contract or group involved.\nThe amount determined under paragraph (1) of subsection (c) for the year of change shall (before any reduction under paragraph (2) of subsection (c)) be reduced by so much of the accelerated policyholder dividends deduction for such year as does not exceed the 1984 fresh-start adjustment for policyholder dividends (to the extent such adjustment was not previously taken into account under this subsection).\nFor purposes of this subsection, the term “year of change” means the taxable year in which the change in business practices which results in the accelerated policyholder dividends deduction takes effect.\nFor purposes of this subsection, the term “accelerated policyholder dividends deduction” means the amount which (but for this subsection) would be determined for the taxable year under paragraph (1) of subsection (c) but which would have been determined (under such paragraph) for a later taxable year under the business practices of the taxpayer as in effect at the close of the preceding taxable year.\nFor purposes of this subsection, the term “1984 fresh-start adjustment for policyholder dividends” means the amounts held as of  December 31, 1983 , by the taxpayer as reserves for dividends to policyholders under section 811(b) (as in effect on the day before the date of the enactment of the Tax Reform Act of 1984) other than for dividends which accrued before  January 1, 1984 . Such amounts shall be properly reduced to reflect the amount of previously nondeductible policyholder dividends (as determined under section 809(f) as in effect on the day before the date of the enactment of the Tax Reform Act of 1984).\nThis subsection shall be applied separately with respect to each line of business of the taxpayer.\nThis subsection shall not apply to a mere change in the amount of policyholder dividends.\nThis subsection shall not apply to any policyholder dividend paid or accrued with respect to a policy issued after  December 31, 1983 .\nFor purposes of subparagraph (A), any policy issued after  December 31, 1983 , in exchange for a substantially similar policy issued on or before such date shall be treated as issued before  January 1, 1984 . A similar rule shall apply in the case of a series of exchanges.\nThis subsection shall not apply to any policyholder dividend paid or accrued with respect to a group policy issued in connection with a plan to provide welfare benefits to employees (within the meaning of section 419(e)(2)).\nThe term “prevailing State assumed interest rate” means, with respect to any contract, the highest assumed interest rate permitted to be used in computing life insurance reserves for insurance contracts or annuity contracts (as the case may be) under the insurance laws of at least 26 States. For purposes of the preceding sentence, the effect of nonforfeiture laws of a State on interest rates for reserves shall not be taken into account.\nThe prevailing State assumed interest rate with respect to any contract shall be determined as of the beginning of the calendar year in which the contract was issued.\nThe date of enactment of the Tax Reform Act of 1984, referred to in subsec. (f)(4), is the date of enactment of  Pub. L. 98–369, div. A , which was approved  July 18, 1984 .\n2017—Subsec. (g).  Pub. L. 115–97  added subsec. (g).\n2004—Subsec. (c).  Pub. L. 108–218  reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—Except as limited by paragraph (2), the deduction for policyholder dividends for any taxable year shall be an amount equal to the policyholder dividends paid or accrued during the taxable year.\n“(2)  Reduction in case of mutual companies .—In the case of a mutual life insurance company, the deduction for policyholder dividends for any taxable year shall be reduced by the amount determined under section 809.”\n1986—Subsec. (d)(1)(B).  Pub. L. 99–514, §\u202f1821(b) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “determined at a rate in excess of the prevailing State assumed interest rate for such contract.”\nSubsec. (f).  Pub. L. 99–514, §\u202f1821(c) , added subsec. (f).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with transition rule and transition relief, see  section 13517(c) of Pub. L. 115–97 , set out as a note under  section 807 of this title .\nAmendment by  Pub. L. 108–218  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 205(c) of Pub. L. 108–218 , set out as a note under  section 807 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title II, §\u202f211(a) ,  July 18, 1984 ,  98 Stat. 733 ; amended  Pub. L. 99–514, title XVIII, §\u202f1821(d) –(h), (r),  Oct. 22, 1986 ,  100 Stat. 2839 , 2840, 2843;  Pub. L. 100–647, title I, §\u202f1018(u)(47) ,  Nov. 10, 1988 ,  102 Stat. 3593 ;  Pub. L. 107–147, title VI, §\u202f611(a) ,  Mar. 9, 2002 ,  116 Stat. 61 , related to reduction in certain deductions of mutual life insurance companies.\nA prior section 809, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 121 ; amended  Pub. L. 87–59, §\u202f2(a) , (b),  June 27, 1961 ,  75 Stat. 120 ;  Pub. L. 87–790, §\u202f3(a) ,  Oct. 10, 1962 ,  76 Stat. 808 ;  Pub. L. 87–858, §\u202f3(b)(3) , (c),  Oct. 23, 1962 ,  76 Stat. 1137 ;  Pub. L. 88–272, title II , §§\u202f214(b)(4), 228(a),  Feb. 26, 1964 ,  78 Stat. 55 , 98;  Pub. L. 91–172, title II, §\u202f201(a)(2)(C) , title IX, §\u202f907(c)(2)(B),  Dec. 30, 1969 ,  83 Stat. 558 , 717;  Pub. L. 94–455, title XV, §\u202f1508(a) , title XIX, §§\u202f1901(a)(98), (b)(1)(J)(iv), (L)–(N), 33(G), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1741 , 1781, 1791, 1801, 1834;  Pub. L. 97–248, title II , §§\u202f255(b)(2)–(4), 259(a), 264(c)(2), (3),  Sept. 3, 1982 ,  96 Stat. 534 , 538, 544;  Pub. L. 97–448, title I, §\u202f102(m)(1) ,  Jan. 12, 1983 ,  96 Stat. 2374 , related to general provisions regarding gain and loss from operations, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nRepeal applicable to taxable years beginning after  Dec. 31, 2004 , see  section 205(c) of Pub. L. 108–218 , set out as an Effective Date of 2004 Amendment note under  section 807 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title II, §\u202f211(a) ,  July 18, 1984 ,  98 Stat. 738 ; amended  Pub. L. 111–92, §\u202f13(c) ,  Nov. 6, 2009 ,  123 Stat. 2994 ;  Pub. L. 113–295, div. A, title II, §\u202f221(a)(41)(J) ,  Dec. 19, 2014 ,  128 Stat. 4044 , related to operations loss deduction.\nA prior section 810, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 125 ; amended  Pub. L. 91–172, title I, §\u202f121(b)(5)(B) , title IX, §\u202f907(a)(2),  Dec. 30, 1969 ,  83 Stat. 541 , 715, related to rules for certain reserves, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nRepeal applicable to losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13511(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'In the case of any bond (as defined in section 171(d)), the amount of bond premium, and the amortizable bond premium for the taxable year, shall be determined under section 171(b) as if the election set forth in section 171(c) had been made.\nIn no case shall the amount of premium on a convertible evidence of indebtedness include any amount attributable to the conversion features of the evidence of indebtedness.\nIf any return of a corporation made under this part is for a period of less than the entire calendar year (referred to in this subsection as “short period”), then section 443 shall not apply in respect to such period, but life insurance company taxable income shall be determined, under regulations prescribed by the Secretary, on an annual basis by a ratable daily projection of the appropriate figures for the short period.\nA prior section 811, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 126 ; amended  Pub. L. 97–248, title II, §\u202f255(b)(1) ,  Sept. 3, 1982 ,  96 Stat. 533 ;  Pub. L. 98–369, div. A, title VII, §\u202f714(a) ,  July 18, 1984 ,  98 Stat. 960 , related to dividends to policyholders, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 811,  act Aug. 16, 1954, ch. 736, §\u202f811 , as added  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 44 ; amended  July 24, 1956, ch. 696, §\u202f2(c) ,  70 Stat. 633 ;  Mar. 17, 1958 ,  Pub. L. 85–345, §\u202f2(c) ,  72 Stat. 37 , imposed a tax on the life insurance company taxable income of all life insurance companies for taxable years beginning after  Dec. 31, 1957 , prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n2017—Subsec. (d)(1).  Pub. L. 115–97  substituted “the interest rate in effect under section 808(g)” for “the greater of the prevailing State assumed interest rate or applicable Federal interest rate in effect under section 807”.\n1988—Subsec. (d)(1).  Pub. L. 100–647  substituted “the greater of the prevailing State assumed interest rate or applicable Federal interest rate in effect under section 807 for the contract” for “the prevailing State assumed interest rate for the contract”.\n1984—Subsec. (b)(3).  Pub. L. 98–369, §\u202f42(a)(8) , substituted “section 1273” for “section 1232(b)”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with transition rule and transition relief, see  section 13517(c) of Pub. L. 115–97 , set out as a note under  section 807 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  section 42(a)(8) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'For purposes of section 805(a)(4), the term “company’s share” means, with respect to any taxable year beginning after  December 31, 2017 , 70 percent.\nFor purposes of section 807, the term “policyholder’s share” means, with respect to any taxable year beginning after  December 31, 2017 , 30 percent.\nAnother  section 1084(b) of Pub. L. 105–34  amended sections 101 and 264 of this title.\nA prior section 812, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 127 ; amended  Pub. L. 87–858, §\u202f3(d)(1) ,  Oct. 23, 1962 ,  76 Stat. 1137 ;  Pub. L. 88–571, §\u202f1(a) ,  Sept. 2, 1964 ,  78 Stat. 857 ;  Pub. L. 94–455, title VIII, §\u202f806(d)(1) , title XIX, §\u202f1901(a)(99),  Oct. 4, 1976 ,  90 Stat. 1598 , 1781;  Pub. L. 97–34, title II, §\u202f207(b) ,  Aug. 13, 1981 ,  95 Stat. 225 , related to operations loss deductions, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 812,  act Aug. 16, 1954, ch. 736, §\u202f812 , as added  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 45 , related to reserve and other policy liability deduction, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n2017— Pub. L. 115–97  amended section generally. Prior to amendment, section consisted of subsecs. (a) to (f), relating to definition of company’s share and policyholders’ share as pertaining to net and gross investment incomes.\n2014—Subsec. (e)(2)(A).  Pub. L. 113–295  struck out “,\u2000244,” after “section 243”.\n2004—Subsec. (b)(3)(A).  Pub. L. 108–218  substituted “section 808” for “sections 808 and 809”.\n1997—Subsec. (d)(1)(D).  Pub. L. 105–34  added subpar. (D).\n1996—Subsec. (g).  Pub. L. 104–188  struck out subsec. (g) which read as follows: “ Treatment of Interest Partially Tax-Exempt Under Section  133.—For purposes of this section and subsections (a) and (b) of section 807, the terms ‘gross investment income’ and ‘tax-exempt interest’ shall not include any interest received with respect to a securities acquisition loan (as defined in section 133(b)). Such interest shall not be included in life insurance gross income for purposes of subsection (b)(3).”\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f2004(p)(2) , substituted “In any case where neither the prevailing State assumed interest rate nor the applicable Federal interest rate is used, another appropriate rate shall be used for purposes of subparagraph (A).” for “In any case where the prevailing State assumed rate is not used, another appropriate rate shall be treated as the prevailing State assumed rate for purposes of subparagraph (A).”\nSubsec. (e).  Pub. L. 100–647, §\u202f1018(h)(1) , amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this section, the term ‘gross investment income’ shall not include any dividend received by the life insurance company which is a 100-percent dividend (as defined in section 805(a)(4)(C)). Such term also shall not include any dividend described in section 805(a)(4)(D) (relating to certain dividends in the case of foreign corporations).”\n1987—Subsec. (b)(2).  Pub. L. 100–203  substituted “at the greater of the prevailing State assumed rate or the applicable Federal interest rate” for “at the prevailing State assumed rate or, where such rate is not used, another appropriate rate” in subpar. (A), and inserted provision at end that in any case where the prevailing State assumed rate is not used, another appropriate rate be treated as the prevailing State assumed rate for purposes of subpar. (A).\n1986—Subsec. (b)(2).  Pub. L. 99–514, §\u202f1821(i)(1) , inserted “or, where such rate is not used, another appropriate rate” after “assumed rate”, in subpar. (A) and added subpar. (D).\nSubsec. (b)(3)(B).  Pub. L. 99–514, §\u202f1821(i)(2) , struck out “(including tax-exempt interest)” after “insurance gross income” in cl. (ii) and inserted at end “For purposes of subparagraph (B)(ii), life insurance gross income shall be determined by including tax-exempt interest and by applying section 807(a)(2)(B) as if it did not contain clause (i) thereof.”\nSubsec. (c).  Pub. L. 99–514, §\u202f1821(i)(3) , amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “For purposes of this section, the term ‘net investment income’ means 90 percent of gross investment income.”\nSubsec. (g).  Pub. L. 99–514, §\u202f1821(i)(4) , added subsec. (g).\nPub. L. 115–97, title I, §\u202f13518(c) ,  Dec. 22, 2017 ,  131 Stat. 2148 , provided that:  “The amendments made by this section [amending this section and  section 817A of this title ] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–218  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 205(c) of Pub. L. 108–218 , set out as a note under  section 807 of this title .\nAmendment by  Pub. L. 105–34  applicable to contracts issued after  June 8, 1997 , in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see  section 1084(d) of Pub. L. 105–34 , set out as a note under  section 101 of this title .\nAmendment by  section 1602(b)(1) of Pub. L. 104–188  applicable to loans made after  Aug. 20, 1996 , with exception, and provisions relating to certain refinancings, see  section 1602(c) of Pub. L. 104–188 , set out as an Effective Date of Repeal note under former  section 133 of this title .\nPub. L. 100–647, title I, §\u202f1018(h)(2) ,  Nov. 10, 1988 ,  102 Stat. 3583 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 211 of the Tax Reform Act of 1984 [ Pub. L. 98–369 ].”\nAmendment by  section 2004(p)(2) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 100–203  applicable to contracts issued in taxable years beginning after  Dec. 31, 1987 , see  section 10241(c) of Pub. L. 100–203 , set out as a note under  section 807 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title II, §\u202f211(a) ,  July 18, 1984 ,  98 Stat. 743 ; amended  Pub. L. 99–514, title X, §\u202f1011(b)(9) , title XVIII, §\u202f1821(j),  Oct. 22, 1986 ,  100 Stat. 2389 , 2841;  Pub. L. 100–647, title I, §\u202f1010(a)(1) ,  Nov. 10, 1988 ,  102 Stat. 3450 , related to foreign life insurance companies.\nA prior section 813,  act Aug. 16, 1954, ch. 736, §\u202f813 , as added  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 46 , related to adjustment for certain reserves, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\nRepeal applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10242(d) of Pub. L. 100–203 , set out as an Effective Date of 1987 Amendment note under  section 816 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'If the aggregate fair market value of all the invested assets and tangible property which are separately accounted for by the domestic life insurance company in the branch account established pursuant to subsection (c) exceeds the aggregate adjusted basis of such assets for purposes of determining gain, then the domestic life insurance company shall be treated as having sold all such assets on the first day of the first taxable year for which the election is in effect at their fair market value on such first day. Notwithstanding any other provision of this chapter, the net gain shall be recognized to the domestic life insurance company on the deemed sale described in the preceding sentence.\nAny payment, transfer, reimbursement, credit, or allowance which is made from a separate account established pursuant to subsection (c) to one or more other accounts of a domestic life insurance company as reimbursement for costs incurred for or with respect to the insurance (or reinsurance) of risks accounted for in such separate account shall be taken into account by the domestic life insurance company in the same manner as if such payment, transfer, reimbursement, credit, or allowance had been received from a separate person.\nExcept as provided in subparagraph (B), any amount directly or indirectly transferred or credited from a branch account established pursuant to subsection (c) to one or more other accounts of such company shall, unless such transfer or credit is a reimbursement to which paragraph (1) applies, be added to the income of the domestic life insurance company.\nFor purposes of this paragraph, in the case of a prior taxable year beginning before  January 1, 1984 , the term “tentative LICTI” means life insurance company taxable income determined under this part (as in effect for such year) without regard to this paragraph.\nNo income, war profits, or excess profits taxes paid or accrued to any foreign country or possession of the United States which is attributable to income excluded under subsection (a) shall be taken into account for purposes of subpart A of part III of subchapter N (relating to foreign tax credit) or allowable as a deduction.\nFor purposes of sections 881, 882, and 1442, each contiguous country life insurance branch shall be treated as a foreign corporation. Such sections shall be applied to each such branch in the same manner as if such sections contained the provisions of any treaty to which the United States and the contiguous country are parties, to the same extent such provisions would apply if such branch were incorporated in such contiguous country.\nA taxpayer may make the election provided by this subsection with respect to any contiguous country for any taxable year. An election made under this subsection for any taxable year shall remain in effect for all subsequent taxable years, except that it may be revoked with the consent of the Secretary. The election provided by this subsection shall be made not later than the time prescribed by law for filing the return for the taxable year (including extensions thereof) with respect to which such election is made, and such election and any approved revocation thereof shall be made in the manner provided by the Secretary.\nAt the election of a domestic stock life insurance company which has a contiguous country life insurance branch described in subsection (b) (without regard to the mutual requirement in subsection (b)(3)), the assets of such branch may be transferred to a foreign corporation organized under the laws of the contiguous country without the application of section 367. Subsection (a) shall apply to the stock of such foreign corporation as if such domestic company were a mutual company and as if the stock were an item described in subsection (c). Subsection (e)(2) shall apply to amounts transferred or credited to such domestic company as if such domestic company and such foreign corporation constituted one domestic mutual life insurance company. The insurance contracts which may be transferred pursuant to this subsection shall include only those which are similar to the types of insurance contracts issued by a mutual life insurance company. Notwithstanding the first sentence of this subsection, if the aggregate fair market value of the invested assets and tangible property which are separately accounted for by the domestic life insurance company in the branch account exceeds the aggregate adjusted basis of such assets for purposes of determining gain, the domestic life insurance company shall be deemed to have sold all such assets on the first day of the taxable year for which the election under this subsection applies and the net gain shall be recognized to the domestic life insurance company on the deemed sale, but not in excess of the proportion of such net gain which equals the proportion which the aggregate fair market value of such assets which are transferred pursuant to this subsection is of the aggregate fair market value of all such assets.\n2017—Subsec. (f)(1).  Pub. L. 115–97  redesignated subpar. (A) as par. (1), struck out subpar. (A) heading “In general”, and struck out subpar. (B). Prior to amendment, text of subpar. (B) read as follows: “For purposes of sections 78 and 902, where any amount is added to the life insurance company taxable income of the domestic life insurance company by reason of subsection (e)(2), the contiguous country life insurance branch shall be treated as a foreign corporation. Any amount so added shall be treated as a dividend paid by a foreign corporation, and the taxes paid to any foreign country or possession of the United States with respect to such amount shall be deemed to have been paid by such branch.”\n1997—Subsec. (h).  Pub. L. 105–34  struck out “or 1491” after “section 367”.\nPub. L. 98–369, div. A, title II, §\u202f217(a) ,  July 18, 1984 ,  98 Stat. 762 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “For purposes of section 814 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to contiguous country branches of domestic life insurance companies)— \n “(1)  any election under section 819A of such Code (as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ]) shall be treated as an election under such section 814, and \n \n “(2)  any reference to a provision of such section 814 shall be treated as including a reference to the corresponding provision of such section 819A.”\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'Section, added  Pub. L. 98–369, div. A, title II, §\u202f211(a) ,  July 18, 1984 ,  98 Stat. 747 ; amended  Pub. L. 99–514, title X, §\u202f1011(b)(10) , title XVIII, §\u202f1821(k)(1), (2),  Oct. 22, 1986 ,  100 Stat. 2389 , 2841;  Pub. L. 100–647, title I, §\u202f1010(j)(1) ,  Nov. 10, 1988 ,  102 Stat. 3456 ;  Pub. L. 108–357, title VII, §\u202f705(a) ,  Oct. 22, 2004 ,  118 Stat. 1549 ;  Pub. L. 113–295, div. A, title II, §\u202f221(a)(41)(G) ,  Dec. 19, 2014 ,  128 Stat. 4044 , related to distributions to shareholders from pre-1984 policyholders surplus account.\nA prior section 815, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 129 ; amended  Pub. L. 87–790, §\u202f3(b) ,  Oct. 10, 1962 ,  76 Stat. 808 ;  Pub. L. 87–858, §\u202f3(b)(4) , (e),  Oct. 23, 1962 ,  76 Stat. 1137 ;  Pub. L. 88–571 , §§\u202f2, 3(a), 4(a),  Sept. 2, 1964 ,  78 Stat. 857 , 859;  Pub. L. 90–225, §\u202f4(a) , (b),  Dec. 27, 1967 ,  81 Stat. 733 , 734;  Pub. L. 91–172, title IX, §\u202f907(b) ,  Dec. 30, 1969 ,  83 Stat. 715 ;  Pub. L. 94–331, §\u202f1(a) ,  June 30, 1976 ,  90 Stat. 781 ;  Pub. L. 94–455, title XIX , §§\u202f1901(b)(1)(O), (24), (33)(H), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1791 , 1798, 1801, 1834, contained provisions similar to this section, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nRepeal applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13514(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 801 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'For purposes of this subsection, subsection (a), and subsection (c), the amount of any reserve (or portion thereof) for any taxable year shall be the mean of such reserve (or portion thereof) at the beginning and end of the taxable year.\nFor purposes only of determining under subsection (a) whether or not an insurance company is a life insurance company, the life insurance reserves, and the total reserves, shall each be reduced by an amount equal to the mean of the aggregates, at the beginning and end of the taxable year, of the policy loans outstanding with respect to contracts for which life insurance reserves are maintained.\nFor purposes of this part, guaranteed renewable life, accident, and health insurance shall be treated in the same manner as noncancellable life, accident, and health insurance.\nFor purposes only of determining under subsection (a) whether or not an insurance company is a life insurance company, amounts set aside and held at interest to satisfy obligations under contracts which do not contain permanent guarantees with respect to life, accident, or health contingencies shall not be included in reserves described in paragraph (1) or (3) of subsection (c).\nA burial or funeral benefit insurance company engaged directly in the manufacture of funeral supplies or the performance of funeral services shall not be taxable under this part but shall be taxable under section 831.\nFor purposes of this section and section 842(b)(2)(B)(i), the terms “life insurance reserves” and “total reserves” shall not include deficiency reserves.\nA prior section 816,  act Aug. 16, 1954, ch. 736, §\u202f816 , as added  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 46 , related to taxation of foreign life insurance companies, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n1988—Subsec. (g).  Pub. L. 100–647, §\u202f1010(f)(6) , substituted “section 831” for “section 821 or section 831”.\nSubsec. (h).  Pub. L. 100–647, §\u202f2004(q)(1) , substituted “section 842(b)(2)(B)(i)” for “section 842(c)(1)(A)”.\n1987—Subsec. (h).  Pub. L. 100–203  substituted “section 842(c)(1)(A)” for “section 813(a)(4)(B)”.\n1986—Subsec. (h).  Pub. L. 99–514  added subsec. (h).\nAmendment by  section 1010(f)(6) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(q)(1) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10242(d) ,  Dec. 22, 1987 ,  101 Stat. 1330–423 , provided that:  “The amendments made by this section [amending this section and sections 842, 864, and 4371 of this title and repealing  section 813 of this title ] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title II, §\u202f217(i) ,  July 18, 1984 ,  98 Stat. 764 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 ;  Pub. L. 100–647, title I, §\u202f1010(h)(1) ,  Nov. 10, 1988 ,  102 Stat. 3455 , provided that: \n “(1)   In general .— A mutual life insurance company may elect to treat all individual noncancellable (or guaranteed renewable) accident and health insurance contracts as though they were cancellable for purposes of section 816 of subchapter L of chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(2)   Effect of election on subsidiaries of electing parent .— For purposes of determining the amount of the small life insurance company deduction of any controlled group which includes a mutual company which made an election under paragraph (1), the taxable income of such electing company shall be taken into account under [former] section 806(b)(2) of the Internal Revenue Code of 1986 (relating to phaseout of small life insurance company deduction). \n \n “(3)   Election .— An election under paragraph (1) shall apply to the company’s first taxable year beginning after  December 31, 1983 , and all taxable years thereafter. \n \n “(4)   Time and manner .— An election under paragraph (1) shall be made— “(A)  on the return of the taxpayer for its first taxable year beginning after  December 31, 1983 , and \n \n “(B)  in such manner as the Secretary of the Treasury or his delegate may prescribe.”\n[ Pub. L. 100–647, title I, §\u202f1010(h)(2) , (3),  Nov. 10, 1988 ,  102 Stat. 3455 , provided that:\n[“(2)  Effective date .—The amendment made by this subsection [amending  section 217(i) of Pub. L. 98–369 , set out above] shall apply to taxable years beginning after  December 31, 1986 , and before  January 1, 1992 .\n[“(3)  Revenue loss limited .—The decrease in the amount of Federal revenue by reason of the amendment made by this subsection shall not exceed $300,000 per taxable year.”]'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'A pension plan contract which is not a life, accident, or health, property, casualty, or liability insurance contract shall be treated as a contract which provides for the payments of annuities for purposes of subsection (d).\nFor purposes of subsection (b)(1)(A) of section 816, the reflection of the investment return and the market value of the segregated asset account shall be considered an assumed rate of interest.\nUnder regulations prescribed by the Secretary, such additional separate computations shall be made, with respect to the items separately accounted for in accordance with subsection (c), as may be necessary to carry out the purposes of this section and this part.\nFor purposes of subchapter L, section 72 (relating to annuities), and section 7702(a) (relating to definition of life insurance contract), a variable contract (other than a pension plan contract) which is otherwise described in this section and which is based on a segregated asset account shall not be treated as an annuity, endowment, or life insurance contract for any period (and any subsequent period) for which the investments made by such account are not, in accordance with regulations prescribed by the Secretary, adequately diversified.\nTo the extent that any segregated asset account with respect to a variable life insurance contract is invested in securities issued by the United States Treasury, the investments made by such account shall be treated as adequately diversified for purposes of paragraph (1).\nNothing in this subsection shall be construed as prohibiting the use of independent investment advisors.\nIn determining whether a segregated asset account is adequately diversified for purposes of paragraph (1), each United States Government agency or instrumentality shall be treated as a separate issuer.\nA prior section 817, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 132 ; amended  Pub. L. 94–455, title XIV, §\u202f1402(b)(1)(M) , (2), title XIX, §§\u202f1901(a)(100), 1951(b)(11)(A),  Oct. 4, 1976 ,  90 Stat. 1732 , 1781, 1839, related to rules regarding certain gains and losses, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 817,  act Aug. 16, 1954, ch. 736, §\u202f817 , as added  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 46 , related to denial of double deductions, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\n2004—Subsec. (c).  Pub. L. 108–218 , in introductory provisions, struck out “(other than section 809)” after “For purposes of this part”.\n1997—Subsec. (h)(2)(A).  Pub. L. 105–34, §\u202f1271(b)(8)(A) , substituted “851(b)(3)” for “851(b)(4)”.\nSubsec. (h)(2)(B).  Pub. L. 105–34, §\u202f1271(b)(8)(B) , substituted “851(b)(3)(A)(i)” for “851(b)(4)(A)(i)”.\n1996—Subsec. (d)(2)(C).  Pub. L. 104–188, §\u202f1611(a)(1) , added subpar. (C).\nSubsec. (d)(3)(C).  Pub. L. 104–188, §\u202f1611(a)(2) , added subpar. (C).\n1988—Subsec. (h)(6).  Pub. L. 100–647  added par. (6).\n1986—Subsec. (d).  Pub. L. 99–514, §\u202f1821(t)(1) , inserted at end “Paragraph (3) shall be applied without regard to whether there is a guarantee, and obligations under such guarantee which exceed obligations under the contract without regard to such guarantee shall be accounted for as part of the company’s general account.”\nSubsec. (h)(1).  Pub. L. 99–514, §\u202f1821(m)(2) , struck out last sentence which read as follows: “For purposes of this paragraph and paragraph (2), beneficial interests in a regulated investment company or in a trust shall not be treated as 1 investment if all of the beneficial interests in such company or trust are held by 1 or more segregated asset accounts of 1 or more insurance companies.”\nSubsec. (h)(3) to (5).  Pub. L. 99–514, §\u202f1821(m)(1) , added pars. (3) and (4), redesignated former par. (4) as (5), and struck out former par. (3) which read as follows: “In the case of a segregated asset account with respect to variable life insurance contracts, paragraph (1) shall not apply in the case of securities issued by the United States Treasury which are owned by a regulated investment company or by a trust all the beneficial interests in which are held by 1 or more segregated asset accounts of the company issuing the contract.”\nAmendment by  Pub. L. 108–218  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 205(c) of Pub. L. 108–218 , set out as a note under  section 807 of this title .\nPub. L. 105–34, title XII, §\u202f1271(c) ,  Aug. 5, 1997 ,  111 Stat. 1037 , provided that:  “The amendments made by this section [amending this section and sections 851 and 1092 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–188, title I, §\u202f1611(b) ,  Aug. 20, 1996 ,  110 Stat. 1846 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1995 .”\nPub. L. 100–647, title VI, §\u202f6080(b) ,  Nov. 10, 1988 ,  102 Stat. 3710 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nPub. L. 99–514, title XVIII, §\u202f1821(t)(2) ,  Oct. 22, 1986 ,  100 Stat. 2844 , provided that:  \n “The amendment made by paragraph (1) [amending this section] shall apply— \n “(A)  to contracts issued after  December 31, 1986 , and \n \n “(B)  to contracts issued before  January 1, 1987 , if such contract was treated as a variable contract on the taxpayer’s return.”\nAmendment by  section 1821(m) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as a note under  section 801 of this title .\nPub. L. 100–647, title I, §\u202f1010(i) ,  Nov. 10, 1988 ,  102 Stat. 3455 , provided that:  \n “Section 817(h) of the 1986 Code shall not apply until  January 1, 1989 , with respect to a variable contract (as defined in section 817(d) of the 1986 Code) if— \n “(1)  such contract provides for the payment of an immediate annuity (as defined in section 72(u)(4) of the 1986 Code), \n \n “(2)  such contract was outstanding on  September 12, 1986 , and \n \n “(3)  the segregated asset account on which such contract is based was, on  September 12, 1986 , wholly invested in deposits insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.”\nPub. L. 117–328, div. T, title II, §\u202f203 ,  Dec. 29, 2022 ,  136 Stat. 5333 , provided that: \n “(a)   In General .— Not later than the date which is 7 years after the date of the enactment of this Act [ Dec. 29, 2022 ], the Secretary of the Treasury (or the Secretary’s delegate) shall amend the regulation issued by the Department of the Treasury relating to ‘Income Tax; Diversification Requirements for Variable Annuity, Endowment, and Life Insurance Contracts’, 54 Fed. Reg. 8728 ( March 2, 1989 ), and make any necessary corresponding amendments to other regulations, in order to facilitate the use of exchange-traded funds as investment options under variable contracts within the meaning of section 817(d) of the Internal Revenue Code of 1986, in accordance with subsections (b) and (c) of this section. \n \n “(b)   Designate Certain Authorized Participants and Market Makers as Eligible Investors .— The Secretary of the Treasury (or the Secretary’s delegate) shall amend Treas. Reg. section 1.817–5(f)(3) to provide that satisfaction of the requirements in Treas. Reg. section 1.817–5(f)(2)(i) with respect to an exchange-traded fund shall not be prevented by reason of beneficial interests in such a fund being held by 1 or more authorized participants or market makers. \n \n “(c)   Define Relevant Terms .— In amending Treas. Reg. section 1.817–5(f)(3) in accordance with subsection (b), the Secretary of the Treasury (or the Secretary’s delegate) shall provide definitions consistent with the following: “(1)   Exchange-traded fund .— The term ‘exchange-traded fund’ means a regulated investment company, partnership, or trust— “(A)  that is registered with the Securities and Exchange Commission as an open-end investment company or a unit investment trust; \n \n “(B)  the shares of which can be purchased or redeemed directly from the fund only by an authorized participant; and \n \n “(C)  the shares of which are traded throughout the day on a national stock exchange at market prices that may or may not be the same as the net asset value of the shares. \n \n \n “(2)   Authorized participant .— The term ‘authorized participant’ means a financial institution that is a member or participant of a clearing agency registered under section 17A(b) of the Securities Exchange Act of 1934 [ 15 U.S.C. 78q–1(b) ] that enters into a contractual relationship with an exchange-traded fund pursuant to which the financial institution is permitted to purchase and redeem shares directly from the fund and to sell such shares to third parties, but only if the contractual arrangement or applicable law precludes the financial institution from— “(A)  purchasing the shares for its own investment purposes rather than for the exclusive purpose of creating and redeeming such shares on behalf of third parties; and \n \n “(B)  selling the shares to third parties who are not market makers or otherwise described in Treas. Reg. section 1.817–5(f) (1) and (3). \n \n \n “(3)   Market maker .— The term ‘market maker’ means a financial institution that is a registered broker or dealer under section 15(b) of the Securities Exchange Act of 1934 [ 15 U.S.C. 78 o (b)] that maintains liquidity for an exchange-traded fund on a national stock exchange by being always ready to buy and sell shares of such fund on the market, but only if the financial institution is contractually or legally precluded from selling or buying such shares to or from persons who are not authorized participants or otherwise described in Treas. Reg. section 1.817–5(f) (2) and (3). \n \n \n “(d)   Effective Date .— This section shall apply to segregated asset account investments made on or after the date which is 7 years after the date of the enactment of this Act.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'In the case of a modified guaranteed contract, clause (ii) of section 807(e)(1)(A) shall not apply.\nFor purposes of paragraph (1), the term “segregated asset” means any asset held as part of a segregated account referred to in subsection (d)(1) under a modified guaranteed contract.\nFor purposes of applying section 816(b)(1)(A) to any modified guaranteed contract, an assumed rate of interest shall include a rate of interest determined, from time to time, with reference to a market rate of interest.\n2017—Subsec. (e)(2).  Pub. L. 115–97  substituted “and 807(d)(2)(B)” for “,\u2000807(d)(2)(B), and 812”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13518(c) of Pub. L. 115–97 , set out as a note under  section 812 of this title .\nPub. L. 104–188, title I, §\u202f1612(c) ,  Aug. 20, 1996 ,  110 Stat. 1847 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1995 . \n \n “(2)   Treatment of net adjustments .— Except as provided in paragraph (3), in the case of any taxpayer required by the amendments made by this section to change its calculation of reserves to take into account market value adjustments and to mark segregated assets to market for any taxable year— “(A)  such changes shall be treated as a change in method of accounting initiated by the taxpayer, \n \n “(B)  such changes shall be treated as made with the consent of the Secretary, and \n \n “(C)  the adjustments required by reason of section 481 of the Internal Revenue Code of 1986, shall be taken into account as ordinary income by the taxpayer for the taxpayer’s first taxable year beginning after  December 31, 1995 . \n \n \n “(3)   Limitation on loss recognition and on deduction for reserve increases.— “(A)   Limitation on loss recognition.— “(i)   In general .— The aggregate loss recognized by reason of the application of section 481 of the Internal Revenue Code of 1986 with respect to section 817A(b) of such Code (as added by this section) for the first taxable year of the taxpayer beginning after  December 31, 1995 , shall not exceed the amount included in the taxpayer’s gross income for such year by reason of the excess (if any) of— “(I)  the amount of life insurance reserves as of the close of the prior taxable year, over \n \n “(II)  the amount of such reserves as of the beginning of such first taxable year, \n \n\n \u2001\u2001to the extent such excess is attributable to subsection (a) of such section 817A. Notwithstanding the preceding sentence, the adjusted basis of each segregated asset shall be determined as if all such losses were recognized. \n \n “(ii)   Disallowed loss allowed over period .— The amount of the loss which is not allowed under clause (i) shall be allowed ratably over the period of 7 taxable years beginning with the taxpayer’s first taxable year beginning after  December 31, 1995 . \n \n \n “(B)   Limitation on deduction for increase in reserves.— “(i)   In general .— The deduction allowed for the first taxable year of the taxpayer beginning after  December 31, 1995 , by reason of the application of section 481 of such Code with respect to section 817A(a) of such Code (as added by this section) shall not exceed the aggregate built-in gain recognized by reason of the application of such section 481 with respect to section 817A(b) of such Code (as added by this section) for such first taxable year. \n \n “(ii)   Disallowed deduction allowed over period .— The amount of the deduction which is disallowed under clause (i) shall be allowed ratably over the period of 7 taxable years beginning with the taxpayer’s first taxable year beginning after  December 31, 1995 . \n \n “(iii)   Built-in gain .— For purposes of this subparagraph, the built-in gain on an asset is the amount equal to the excess of— “(I)  the fair market value of the asset as of the beginning of the first taxable year of the taxpayer beginning after  December 31, 1995 , over \n \n “(II)  the adjusted basis of such asset as of such time.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'LIFE INSURANCE COMPANIES'},
  'content': 'For purposes of paragraphs (1) and (2), the term “property” does not include insurance and annuity contracts and property described in paragraph (1) of section 1221(a).\nFor purposes of this part, the term “insurance or annuity contract” includes any contract supplementary thereto.\nIf an election under section 1504(c)(2) is in effect with respect to an affiliated group for the taxable year, all items of the members of such group which are not life insurance companies shall not be taken into account in determining the amount of the tentative LICTI of members of such group which are life insurance companies.\nIn the case of a life insurance company filing or required to file a consolidated return under section 1501 with respect to any affiliated group for any taxable year, any determination under this part with respect to any dividend paid by one member of such group to another member of such group shall be made as if such group was not filing a consolidated return.\nUnder regulations, in applying sections 861, 862, and 863 to a life insurance company, the deduction for policyholder dividends (determined under section 808(c)), reserve adjustments under subsections (a) and (b) of section 807, and death benefits and other amounts described in section 805(a)(1) shall be treated as items which cannot definitely be allocated to an item or class of gross income.\nOn or before  September 15, 1985 , any life insurance company may elect to treat items described in paragraph (1) as properly apportioned or allocated among items of gross income to the extent (and in the manner) prescribed in regulations.\nAny election under subparagraph (A), once made, may be revoked only with the consent of the Secretary.\nFor purposes of part I of subchapter N, items described in any paragraph of section 807(c) shall be treated as amounts which are not interest.\nAny reference to a life insurance contract shall be treated as including a reference to a qualified accelerated death benefit rider on such contract.\nFor purposes of this subsection, the term “qualified accelerated death benefit rider” means any rider on a life insurance contract if the only payments under the rider are payments meeting the requirements of section 101(g).\nParagraph (1) shall not apply to any rider which is treated as a long-term care insurance contract under section 7702B.\nSection 165 of the Internal Revenue Code of 1939, referred to in subsec. (a)(1), (2), was classified to section 165 of former Title 26, Internal Revenue Code. Section 101 of the Internal Revenue Code of 1939, referred to in subsec. (a)(4) was classified to section 101 of former Title 26, Internal Revenue Code. Sections 101 and 165 were repealed by  section 7851(a)(1)(A) of this title . For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title . See, also,  section 7851(e) of this title  for provision that references in the 1986 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1986 Code, which is then applicable.\nA prior section 818, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 133 ; amended  Pub. L. 88–272, title II, §\u202f228(b)(1) ,  Feb. 26, 1964 ,  78 Stat. 98 ;  Pub. L. 91–688, §\u202f1(a) ,  Jan. 12, 1971 ,  84 Stat. 2072 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(101), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1781 , 1834;  Pub. L. 97–248, title II , §§\u202f258(a), 260(a), 262, 267(a),  Sept. 3, 1982 ,  96 Stat. 538–540 , 550, related to accounting provisions generally, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) .\nAnother prior section 818,  act Aug. 16, 1954, ch. 736, §\u202f818 , as added  Mar. 13, 1956, ch. 83, §\u202f2 ,  70 Stat. 46 , related to certain new insurance companies, prior to the general revision of this part by  Pub. L. 86–69, §\u202f2(a) .\nA prior section 819, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 136 ; amended  Pub. L. 89–809, title I, §\u202f104(i)(3) ,  Nov. 13, 1966 ,  80 Stat. 1561 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(102), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1781 , 1834, related to foreign life insurance companies, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) . See  section 813 of this title .\nA prior section 819A, added  Pub. L. 94–455, title X, §\u202f1043(a) ,  Oct. 4, 1976 ,  90 Stat. 1639 , related to contiguous country branches of domestic life insurance companies, prior to the general revision of this part by  Pub. L. 98–369, §\u202f211(a) . See  section 814 of this title .\nA prior section 820, added  Pub. L. 86–69, §\u202f2(a) ,  June 25, 1959 ,  73 Stat. 137 ; amended  Pub. L. 94–455, title XIX , §§\u202f1901(a)(103), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1782 , 1834, related to optional treatment of policies reinsured under modified coinsurance contracts, prior to repeal by  Pub. L. 97–248, title II, §\u202f255(a) , (c),  Sept. 3, 1982 ,  96 Stat. 533 , 534, applicable to taxable years beginning after  Dec. 31, 1981 , with exception.\nA prior section 821, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 260 ;  Mar. 30, 1955, ch. 18, §\u202f2 ,  69 Stat. 14 ;  Mar. 13, 1956, ch. 83, §\u202f3(a)(1) , (2),  70 Stat. 47 ;  Mar. 29, 1956, ch. 115, §\u202f2 ,  70 Stat. 66 ;  Mar. 29, 1957 ,  Pub. L. 85–12, §\u202f2 ,  71 Stat. 9 ;  June 30, 1958 ,  Pub. L. 85–475, §\u202f2 ,  72 Stat. 259 ;  June 30, 1959 ,  Pub. L. 86–75, §\u202f2 ,  73 Stat. 157 ;  June 30, 1960 ,  Pub. L. 86–564, title II, §\u202f201 ,  74 Stat. 290 ;  June 30, 1961 ,  Pub. L. 87–72, §\u202f2 ,  75 Stat. 193 ;  June 28, 1962 ,  Pub. L. 87–508, §\u202f2 ,  76 Stat. 114 ;  Oct. 16, 1962 ,  Pub. L. 87–834, §\u202f8(a) ,  76 Stat. 989 ;  June 29, 1963   Pub. L. 88–52, §\u202f2 ,  77 Stat. 72 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title I, §\u202f123(a) ,  78 Stat. 29 ;  Nov. 13, 1966 ,  Pub. L. 89–809, title I, §\u202f104(i)(4) ,  80 Stat. 1562 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title IX, §\u202f901(b) , title XV, §\u202f1507(b)(1), title XIX, §§\u202f1901(a)(104), 1906(b)(13)(A),  90 Stat. 1607 , 1739, 1782, 1834;  May 23, 1977 ,  Pub. L. 95–30, title II, §\u202f201(3) , (4),  91 Stat. 141 ;  Nov. 6, 1978 ,  Pub. L. 95–600, title III, §\u202f301(b)(9) ,  92 Stat. 2821 ;  Aug. 13, 1981 ,  Pub. L. 97–34, title II, §\u202f231(b)(1) , (2),  95 Stat. 249 , related to tax on mutual insurance companies to which former part II applied, prior to repeal by  Pub. L. 99–514, title X, §\u202f1024(a)(1) ,  Oct. 22, 1986 ,  100 Stat. 2405 , effective for taxable years beginning after  Dec. 31, 1986 .\nA prior section 822 was renumbered  section 834 of this title  by  Pub. L. 99–514, title X, §\u202f1024(a)(3) ,  Oct. 22, 1986 ,  100 Stat. 2405 .\nA prior section 823, added  Pub. L. 87–834, §\u202f8(c) ,  Oct. 16, 1962 ,  76 Stat. 992 ; amended  Pub. L. 91–172, title IX, §\u202f907(c)(2)(B) ,  Dec. 30, 1969 ,  83 Stat. 717 , related to determination of statutory underwriting income or loss, prior to repeal by  Pub. L. 99–514, title X, §\u202f1024(a)(1) ,  Oct. 22, 1986 ,  100 Stat. 2405 , effective for taxable years beginning after  Dec. 31, 1986 .\nAnother prior section 823,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 263 , which defined “net premiums” and “dividends to policyholders”, was redesignated  section 822(f) of this title  by  section 8(b)(4) of Pub. L. 87–834 .\nA prior section 824, added  Pub. L. 87–834, §\u202f8(c) ,  Oct. 16, 1962 ,  76 Stat. 993 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to adjustments to provide protection against losses, prior to repeal by  Pub. L. 99–514, title X, §\u202f1024(a)(1) ,  Oct. 22, 1986 ,  100 Stat. 2405 , effective for taxable years beginning after  Dec. 31, 1986 .\nA prior section 825, added  Pub. L. 87–834, §\u202f8(c) ,  Oct. 16, 1962 ,  76 Stat. 995 ; amended  Pub. L. 91–172  title IX, §\u202f907(c)(2)(C), (D),  Dec. 30, 1969 ,  83 Stat. 717 ;  Pub. L. 94–455, title VIII, §\u202f806(d)(2) , title XIX, §\u202f1901(a)(106),  Oct. 4, 1976 ,  90 Stat. 1599 , 1782;  Pub. L. 97–34, title II, §\u202f207(b) ,  Aug. 13, 1981 ,  95 Stat. 225 , related to unused loss deduction, prior to repeal by  Pub. L. 99–514, title X, §\u202f1024(a)(1) ,  Oct. 22, 1986 ,  100 Stat. 2405 , effective for taxable years beginning after  Dec. 31, 1986 .\nA prior section 826 was renumbered  section 835 of this title  by  Pub. L. 99–514, title X, §\u202f1024(a)(3) ,  Oct. 22, 1986 ,  100 Stat. 2405 .\n1999—Subsec. (b)(2).  Pub. L. 106–170, §\u202f532(c)(3) , substituted “section 1221(a)(2)” for “section 1221(2)”.\nSubsec. (c)(3).  Pub. L. 106–170, §\u202f532(c)(1)(D) , substituted “section 1221(a)” for “section 1221”.\n1996—Subsec. (g).  Pub. L. 104–191  added subsec. (g).\n1988—Subsec. (a)(6).  Pub. L. 100–647, §\u202f1011(e)(5)(A) , in subpar. (A) substituted “eligible deferred compensation plan” for “eligible State deferred compensation plan”, and in subpar. (B), inserted “or any organization (other than a governmental unit) exempt from tax under this subtitle,” after “foregoing,” and substituted “agency or instrumentality, or organization” for “or agency or instrumentality”.\nSubsec. (f)(3).  Pub. L. 100–647, §\u202f1010(k) , added par. (3).\n1986—Subsec. (a)(3).  Pub. L. 99–514, §\u202f1136(b) , substituted “(26), and (27)” for “and (26)”.\nPub. L. 99–514, §\u202f1112(d)(4) , substituted “(22), and (26)” for “and (22)”.\nPub. L. 99–514, §\u202f1106(d)(3)(C) , inserted “(17),” after “(16),”.\nSubsec. (a)(6)(A).  Pub. L. 99–514, §\u202f1821(n) , in amending subpar. (A) generally, inserted “an eligible State deferred compensation plan (within the meaning of section 457(b)), or”.\nSubsec. (e).  Pub. L. 99–514, §\u202f1821 ( o ), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “If an election under section 1504(c)(2) is in effect with respect to an affiliated group for the taxable year, all items of the members of such group which are not life insurance companies shall not be taken into account in determining the amount of the tentative LICTI of members of such group which are life insurance companies.”\n1984—Subsec. (b)(1)(A).  Pub. L. 98–369, §\u202f1001(b)(10) , (e), substituted “6 months” for “1 year” in two places, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 104–191, title III, §\u202f332(b) ,  Aug. 21, 1996 ,  110 Stat. 2069 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall take effect on  January 1, 1997 . \n \n “(2)   Issuance of rider not treated as material change .— For purposes of applying sections 101(f), 7702, and 7702A of the Internal Revenue Code of 1986 to any contract— “(A)  the issuance of a qualified accelerated death benefit rider (as defined in section 818(g) of such Code (as added by this Act)), and \n \n “(B)  the addition of any provision required to conform an accelerated death benefit rider to the requirements of such section 818(g), \n \n\n shall not be treated as a modification or material change of such contract.”\nPub. L. 100–647, title I, §\u202f1011(e)(5)(B) ,  Nov. 10, 1988 ,  102 Stat. 3461 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to contracts issued after  December 31, 1986 .”\nAmendment by  section 1010(k) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1106(d)(3)(C) of Pub. L. 99–514  applicable to benefits accruing in years beginning after  Dec. 31, 1988 , except as otherwise provided, see  section 1106(i)(5) of Pub. L. 99–514  set out as a note under  section 415 of this title .\nAmendment by  section 1112(d)(4) of Pub. L. 99–514  applicable to plan years beginning after  Dec. 31, 1988 , with special rule regarding collective bargaining agreements ratified before  Mar. 1, 1986 , and with provision for waiver of the excise tax on reversions, see  section 1112(e) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by section 1821(n), ( o ) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nSecretary of the Treasury or his delegate to issue before  Feb. 1, 1988 , final regulations to carry out amendments made by  section 1112 of Pub. L. 99–514 , see  section 1141 of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'OTHER INSURANCE COMPANIES'},
  'content': 'Taxes computed as provided in section 11 shall be imposed for each taxable year on the taxable income of every insurance company other than a life insurance company.\nIn lieu of the tax otherwise applicable under subsection (a), there is hereby imposed for each taxable year on the income of every insurance company to which this subsection applies a tax computed by multiplying the taxable investment income of such company for such taxable year by the rates provided in section 11(b).\nFor purposes of clause (i)(II), any interest in the insurance company referred to in such clause which is held (directly or indirectly) by an individual who is a spouse of the specified holder, and who is a citizen of the United States, shall be treated as held by the specified holder.\nThe term “relevant specified assets” means, with respect to any specified holder with respect to any insurance company, the aggregate amount of the specified assets, with respect to such insurance company, any interest in which is held (directly or indirectly) by any spouse or specified relation of such specified holder. Such term shall not include any specified asset solely by reason of an interest in such asset which was acquired by such spouse or specified relation by bequest, devise, or inheritance from a decedent during the taxable year of the insurance company or the preceding taxable year. For purposes of this subclause, the term “specified relation” means any individual with respect to whom the specified holder bears a relationship described in subclause (I) or (II) of clause (iii).\nThe term “specified assets” means, with respect to any insurance company, the trades or businesses, rights, or assets with respect to which the net written premiums (or direct written premiums) of such insurance company are paid.\nAn indirect interest includes any interest held through a trust, estate, partnership, or corporation.\nExcept as otherwise provided by the Secretary in regulations or other guidance, 2 percentage points or less shall be treated as de minimis.\nIn the case of reinsurance or any fronting, intermediary, or similar arrangement, the term “policyholder” means each policyholder of the underlying direct written insurance with respect to such reinsurance or arrangement.\nFor purposes of this section, the term “insurance company” has the meaning given to such term by section 816(a).\nEvery insurance company for which an election is in effect under subsection (b) for any taxable year shall furnish to the Secretary at such time and in such manner as the Secretary shall prescribe such information for such taxable year as the Secretary shall require with respect to the requirements of subsection (b)(2)(A)(ii).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2018—Subsec. (b)(2)(B)(i)(II).  Pub. L. 115–141, §\u202f101(r)(1) , substituted “relevant specified assets” for “specified assets”.\nSubsec. (b)(2)(B)(ii), (iii).  Pub. L. 115–141, §\u202f101(r)(2) , added cls. (ii) and (iii). Former cl. (ii) redesignated (iv).\nSubsec. (b)(2)(B)(iv).  Pub. L. 115–141, §\u202f101(r)(2) , (3)(A), redesignated cl. (ii) as (iv) and substituted “this subparagraph” for “clause (i)(II)” in introductory provisions.\nSubsec. (b)(2)(B)(iv)(I).  Pub. L. 115–141, §\u202f101(r)(3)(B) , amended subcl. (I) generally. Prior to amendment, text read as follows: “The term ‘specified holder’ means, with respect to any insurance company, any individual who holds (directly or indirectly) an interest in such insurance company and who is a spouse or lineal descendant (including by adoption) of an individual who holds an interest (directly or indirectly) in the specified assets with respect to such insurance company.”\nSubsec. (b)(2)(D), (E).  Pub. L. 115–141, §\u202f101(r)(4) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (c).  Pub. L. 115–141, §\u202f401(a)(142) , substituted “section 816(a).” for “section 816(a)).”\n2017—Subsec. (b)(2)(D)(ii).  Pub. L. 115–97, §\u202f11002(d)(1)(AA) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (b)(3).  Pub. L. 115–97, §\u202f13511(b)(2)(B) , struck out “except as provided in section 844,” after “part,” in introductory provisions.\nSubsec. (e).  Pub. L. 115–97, §\u202f13001(b)(2)(H) , redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1) which read as follows: “For alternative tax in case of capital gains, see section 1201(a).”\n2015—Subsec. (b)(2)(A).  Pub. L. 114–113, §\u202f333(a)(1)(A) , (C), (b)(1), struck out “(including interinsurers and reciprocal underwriters)” after “other than life” in introductory provisions, substituted “$2,200,000” for “$1,200,000” in cl. (i), added cl. (ii), redesignated former cl. (ii) as (iii), and, in concluding provisions, substituted “clause (iii)” for “clause (ii)” and “clauses (i) and (ii)” for “clause (i)”.\nSubsec. (b)(2)(B), (C).  Pub. L. 114–113, §\u202f333(a)(1)(B) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (b)(2)(C)(i).  Pub. L. 114–113, §\u202f333(a)(2) , substituted “For purposes of this paragraph—” for “For purposes of subparagraph (A),”, inserted subcl. (I) designation before “in determining”, and added subcl. (II).\nSubsec. (b)(2)(D).  Pub. L. 114–113, §\u202f333(b)(2) , added subpar. (D).\nSubsecs. (d), (e).  Pub. L. 114–113, §\u202f333(a)(3) , added subsec. (d) and redesignated former subsec. (d) as (e).\n2004—Subsec. (b)(2)(A)(i).  Pub. L. 108–218, §\u202f206(d) , struck out “exceed $350,000 but” after “taxable year”.\nSubsecs. (c), (d).  Pub. L. 108–218, §\u202f206(c) , added subsec. (c) and redesignated former subsec. (c) as (d).\n1988—Subsec. (b)(2)(A).  Pub. L. 100–647, §\u202f1010(f)(1) , inserted at end “The election under clause (ii) shall apply to the taxable year for which made and for all subsequent taxable years for which the requirements of clause (i) are met. Such an election, once made, may be revoked only with the consent of the Secretary.”\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1010(f)(9) , added par. (3).\n1986— Pub. L. 99–514  amended section generally, substituting provisions imposing taxes on insurance companies other than life insurance companies, with an alternative tax on certain small companies, for provisions imposing taxes on insurance companies (other than life or mutual), mutual marine insurance companies, and certain mutual fire or flood insurance companies, with an election for multiple line companies to be taxed on total income.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(a)(107) , substituted “on the taxable income” for “or the taxable income”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\n1966—Subsec. (b).  Pub. L. 89–809, §\u202f104(i)(6)(A) , redesignated subsec. (c) as (b). Former subsec. (b), which excepted foreign insurance companies other than life or mutual insurance companies, foreign mutual marine insurance companies, and foreign mutual fire insurance companies not carrying on an insurance business within the United States and provided that they would be taxable as other foreign corporations, was struck out.\nSubsecs. (c), (d).  Pub. L. 89–809, §\u202f104(i)(6)(B) , redesignated subsec. (d) as (c) and added item (2). Former subsec. (c) redesignated (b).\n1962— Pub. L. 87–834, §\u202f8(g)(4)(B) , substituted “and certain mutual fire or flood insurance companies” for “and mutual fire insurance companies issuing perpetual policies” in section catchline.\nSubsec. (a).  Pub. L. 87–834, §\u202f8(e)(1) , included flood insurance companies, and substituted provisions authorizing imposition of the tax on those companies whose principal business is the issuance of policies for which the premium deposits are the same, regardless of the length of the term for which the policies are written, if the unabsorbed portion of such premium deposits not required for losses, expenses, or establishment of reserves is returned or credited to the policyholder on cancellation or expiration of the policy for provisions which authorized imposition of tax on those companies which issued policies for which the sole premium charged is a single deposit which (except for such deduction of underwriting costs as may be provided) is refundable on cancellation or expiration of the policy.\nSubsecs. (c), (d).  Pub. L. 87–834, §\u202f8(f) , added subsec. (c) and redesignated former subsec. (c) as (d).\nAmendment by  section 101(r) of Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  section 11002(d)(1)(AA) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 13001(b)(2)(H) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13511(b)(2)(B) of Pub. L. 115–97  applicable to losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13511(c) of Pub. L. 115–97 , set out as a note under  section 381 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f333(c) ,  Dec. 18, 2015 ,  129 Stat. 3108 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2016 .”\nAmendment by  Pub. L. 108–218  applicable to taxable years beginning after  Dec. 31, 2003 , with exception for companies in receivership or liquidation, see  section 206(e) of Pub. L. 108–218 , set out as a note under  section 501 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title X, §\u202f1024(e) ,  Oct. 22, 1986 ,  100 Stat. 2409 , provided that:  “The amendments made by this section [amending this section and sections 501, 832, 834, 835, 841, 842, 844, 891, 1201, 1504, and 1563 of this title, redesignating former sections 822 and 826 of this title as sections 834 and 835 of this title, respectively, and repealing sections 821, 823, 824, and 825 of this title] (and the provisions of subsection (d) [set out below]) shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1901(a)(107) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 8(h) of Pub. L. 87–834 , set out as a note under  section 501 of this title .\nPub. L. 99–514, title X, §\u202f1024(d) ,  Oct. 22, 1986 ,  100 Stat. 2408 , as amended by  Pub. L. 100–647, title I, §\u202f1010(f)(8) ,  Nov. 10, 1988 ,  102 Stat. 3454 , provided that: \n “(1)   Treatment of amounts in protection against loss account .— In the case of any insurance company which had a protection against loss account for its last taxable year beginning before  January 1, 1987 , there shall be included in the gross income of such company for any taxable year beginning after  December 31, 1986 , the amount which would have been included in gross income for such taxable year under section 824 of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]). For purposes of the preceding sentence, no addition to such account shall be made for any taxable year beginning after  December 31, 1986 . In the case of a company taxable under section 831(b) of the Internal Revenue Code of 1986 (as amended by subsection (a)), any amount included in gross income under this paragraph shall be treated as gross investment income. \n \n “(2)   Transitional rule for unused loss carryover under section 825 .— Any unused loss carryover under section 825 of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) which— “(A)  is from a taxable year beginning before  January 1, 1987 , and \n \n “(B)  could have been carried under such section to a taxable year beginning after  December 31, 1986 , but for the repeal made by subsection (a)(1) [repealing sections 821 and 823 to 825 of this title], \n \n\n shall be included in the net operating loss deduction under section 832(c)(10) of such Code without regard to the limitations of [former] section 844(b) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'OTHER INSURANCE COMPANIES'},
  'content': 'In the case of an insurance company subject to the tax imposed by section 831, the term “taxable income” means the gross income as defined in subsection (b)(1) less the deductions allowed by subsection (c).\nThe term “investment income” means the gross amount of income earned during the taxable year from interest, dividends, and rents, computed as follows: To all interest, dividends, and rents received during the taxable year, add interest, dividends, and rents due and accrued at the end of the taxable year, and deduct all interest, dividends, and rents due and accrued at the end of the preceding taxable year.\nThe term “underwriting income” means the premiums earned on insurance contracts during the taxable year less losses incurred and expenses incurred.\nExcept as provided in clause (ii), subparagraph (B) shall not apply to any dividend or interest received or accrued on any stock or obligation acquired before  August 8, 1986 .\nThe term “prorated amounts” means tax-exempt interest and dividends with respect to which a deduction is allowable under section 243 or 245 (other than 100 percent dividends).\nThe term “100 percent dividend” means any dividend if the percentage used for purposes of determining the deduction allowable under section 243 or 245(b) is 100 percent.\nA dividend received by a foreign corporation from a domestic corporation which would be a 100 percent dividend if section 1504(b)(3) did not apply for purposes of applying section 243(b)(2) shall be treated as a 100 percent dividend.\nIn the case of any 100 percent dividend paid to an insurance company to which this part applies by any insurance company, the amount of the decrease in the deductions of the payee company by reason of the portion of such dividend attributable to prorated amounts shall be reduced (but not below zero) by the amount of the decrease in the deductions (or increase in income) of the payor company attributable to the application of this section or section 805(a)(4)(A) to such amounts.\nThe term “expenses incurred” means all expenses shown on the annual statement approved by the National Association of Insurance Commissioners, and shall be computed as follows: To all expenses paid during the taxable year, add expenses unpaid at the end of the taxable year and deduct expenses unpaid at the end of the preceding taxable year. For purposes of this subchapter, the term “expenses unpaid” shall not include any unpaid loss adjustment expenses shown on the annual statement, but such unpaid loss adjustment expenses shall be included in unpaid losses. For the purpose of computing the taxable income subject to the tax imposed by section 831, there shall be deducted from expenses incurred (as defined in this paragraph) all expenses incurred which are not allowed as deductions by subsection (c).\nSubparagraph (B) of paragraph (4) shall be applied with respect to insurance contracts described in section 816(b)(1)(B) by substituting “100 percent” for “80 percent” each place it appears in such subparagraph (B), and subparagraph (C) of paragraph (4) shall be applied by not taking such contracts into account.\nExcept as provided in section 381(c)(22) (relating to carryovers in certain corporate readjustments), if, for any taxable year beginning before  January 1, 1993 , the taxpayer ceases to be an insurance company taxable under section 831(a), the aggregate adjustments which would be made under paragraph (4)(C) for such taxable year and subsequent taxable years but for such cessation shall be made for the taxable year preceding such cessation year.\nThe term “undiscounted unearned premiums” means the unearned premiums shown in the yearly statement filed by the taxpayer for the year ending with or within such taxable year.\nThe term “applicable interest rate” means the annual rate determined under 846(c)(2) for the calendar year in which the premiums are received.\nNothing in this section shall permit the same item to be deducted more than once.\nThe deduction under paragraph (1) shall be allowed only to the extent that tax and loss bonds are purchased in an amount equal to the tax benefit attributable to such deduction, as determined under regulations prescribed by the Secretary, on or before the date that any taxes (determined without regard to this subsection) due for the taxable year for which the deduction is allowed are due to be paid. If a deduction would be allowed but for the fact that tax and loss bonds were not timely purchased, such deduction shall be allowed to the extent such purchases are made within a reasonable time, as determined by the Secretary, if all interest and penalties, computed as if this sentence did not apply, are paid.\nEach company which writes mortgage guaranty insurance shall, for purposes of this part, establish and maintain a mortgage guaranty account.\nThere shall be added to the mortgage guaranty account for each taxable year an amount equal to the amount allowed as a deduction for the taxable year under paragraph (1).\nThe provisions of this subsection shall also apply in all respects to a company which writes lease guaranty insurance or insurance on obligations the interest on which is excludable from gross income under section 103. In applying this subsection to such a company, any reference to mortgage guaranty insurance contained in this section shall be deemed to be a reference also to lease guaranty insurance and to insurance on obligations the interest on which is excludable from gross income under section 103; and in the case of insurance on obligations the interest on which is excludable from gross income under section 103, the references in paragraph (1) to “losses resulting from adverse economic cycles” include losses from declining revenues related to such obligations (as well as losses resulting from adverse economic cycles), and the time specified in subparagraph (A) of paragraph (5) shall be the twentieth preceding taxable year.\nIn the case of an insurance company subject to tax under section 831(a) filing or required to file a consolidated return under section 1501 with respect to any affiliated group for any taxable year, any determination under this part with respect to any dividend paid by one member of such group to another member of such group shall be made as if such group were not filing a consolidated return.\nSection 821, referred to in subsec. (b)(7)(D), was repealed by  Pub. L. 99–514, title X, §\u202f1024(a)(1) ,  Oct. 22, 1986 ,  100 Stat. 2405 .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (b)(7)(D), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nAnother  section 1084(b) of Pub. L. 105–34  amended sections 101 and 264 of this title.\n2018—Subsec. (b)(7)(E)(ii)(II).  Pub. L. 115–141  substituted period for comma at end.\n2017—Subsec. (b)(5)(B).  Pub. L. 115–97, §\u202f13515(a) , substituted “the applicable percentage” for “15 percent” in introductory provisions and inserted “For purposes of this subparagraph, the applicable percentage is 5.25 percent divided by the highest rate in effect under section 11(b).” at end of concluding provisions.\nSubsec. (c)(5).  Pub. L. 115–97, §\u202f13001(b)(2)(I) , struck out “sec. 1201 and following,” before “relating to capital gains and losses” in introductory provisions.\n2014—Subsec. (b)(5)(B)(ii), (D)(i), (ii)(I).  Pub. L. 113–295, §\u202f221(a)(41)(G) , struck out “,\u2000244,”after “sections 243” in subpar. (B)(ii) and after “section 243” in subpar. (D)(i), (ii)(I).\nSubsec. (e).  Pub. L. 113–295, §\u202f221(a)(69)(A) , struck out “of taxable years beginning after  December 31, 1966 ,” after “In the case” in introductory provisions.\nSubsec. (e)(6).  Pub. L. 113–295, §\u202f221(a)(69)(B) , substituted “The” for “In the case of any taxable year beginning after  December 31, 1970 , the”.\n1997—Subsec. (b)(5)(B)(iii).  Pub. L. 105–34 , which directed amendment of subpar. (B) by adding cl. (iii) at the end, was executed by adding cl. (iii) after cl. (ii) to reflect the probable intent of Congress.\n1996—Subsec. (b)(5)(C)(ii)(II), (D)(ii)(II).  Pub. L. 104–188, §\u202f1702(h)(3) , substituted “243(b)(2)” for “243(b)(5)”.\nSubsec. (b)(7)(A).  Pub. L. 104–188, §\u202f1704(t)(45) , provided that  section 11303(b)(1) of Pub. L. 101–508  shall be applied as if “paragraph” appeared instead of “subparagraph” in the material proposed to be stricken. See 1990 Amendment note below.\n1990—Subsec. (b)(4).  Pub. L. 101–508, §\u202f11303(a) , substituted “section 807.” for “section 807, pertaining to the life, burial, or funeral insurance, or annuity business of an insurance company subject to the tax imposed by section 831 and not qualifying as a life insurance company under section 816.” in first sentence after subpar. (C).\nSubsec. (b)(5)(A).  Pub. L. 101–508, §\u202f11305(a) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “The term ‘losses incurred’ means losses incurred during the taxable year on insurance contracts, computed as follows:\n“(i) To losses paid during the taxable year, add salvage and reinsurance recoverable outstanding at the end of the preceding taxable year and deduct salvage and reinsurance recoverable outstanding at the end of the taxable year.\n“(ii) To the result so obtained, add all unpaid losses on life insurance contracts plus all discounted unpaid losses (as defined in section 846) outstanding at the end of the taxable year and deduct unpaid losses on life insurance contracts plus all discounted unpaid losses outstanding at the end of the preceding taxable year.”\nSubsec. (b)(7)(A).  Pub. L. 101–508, §\u202f11303(b)(2) , substituted “such contracts into account” for “such amounts into account”.\nPub. L. 101–508, §\u202f11303(b)(1) , which directed the substitution of “insurance contracts described in section 816(b)(1)(B)” for “amounts included in unearned premiums under the 2nd sentence of such subparagraph”, was executed by making the substitution for “amounts included in unearned premiums under the 2nd sentence of such paragraph”. See 1996 Amendment note above.\n1988—Subsec. (b)(5)(B)(ii)(II).  Pub. L. 100–647, §\u202f1010(d)(2) , inserted “(directly or indirectly)” after “attributable”.\nSubsec. (b)(7)(C).  Pub. L. 100–647, §\u202f1010(c)(1) , substituted “insurance company taxable under section 831(a)” for “nonlife insurance company” in heading and “section 831(a)” for “this part” in text.\nSubsec. (b)(7)(D), (E).  Pub. L. 100–647, §\u202f1010(c)(2) , added subpars. (D) and (E).\nSubsec. (e)(5)(A).  Pub. L. 100–647, §\u202f1010(c)(3) , struck out “and” after “preceding taxable year,”.\nSubsec. (e)(5)(B).  Pub. L. 100–647, §\u202f1010(c)(3) , which directed amendment of subpar. (B) by substituting a comma for the period at end, could not be executed because there was no period at end of subpar. (B).\nSubsec. (g).  Pub. L. 100–647, §\u202f1010(d)(1) , added subsec. (g).\n1986—Subsec. (b)(1)(C).  Pub. L. 99–514, §\u202f1024(c)(1) , substituted “exclusively issuing perpetual policies” for “described in section 831(a)(3)(A)”.\nSubsec. (b)(1)(D).  Pub. L. 99–514, §\u202f1024(c)(2) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “in the case of a mutual fire or flood insurance company described in section 831(a)(3)(B), an amount equal to 2 percent of the premiums earned on insurance contracts during the taxable year with respect to policies described in section 831(a)(3)(B) after deduction of premium deposits returned or credited during the same taxable year, and”.\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1024(c)(3) , substituted “paragraph (1)(D)” for “section 831(a)(3)(B)” in two places and amended last sentence generally, substituting “described in paragraph (1)(D) or issuing exclusively perpetual policies” for “referred to in paragraph (3) of section 831(a)” and “described in subparagraph (C) or (D) of paragraph (1)” for “referred to in such paragraph (3)”.\nSubsec. (b)(4)(B), (C).  Pub. L. 99–514, §\u202f1021(a) , added subpars. (B) and (C) and struck out former subpar. (B) which read as follows: “To the result so obtained, add unearned premiums on outstanding business at the end of the preceding taxable year and deduct unearned premiums on outstanding business at the end of the taxable year.”\nSubsec. (b)(5)(A).  Pub. L. 99–514, §\u202f1022(a) , in amending par. (5) generally, designated existing provisions of par. (5) as subpar. (A), inserted subpar. heading “In general”, and redesignated former subpars. (A) and (B) as cls. (i) and (ii).\nSubsec. (b)(5)(A)(ii).  Pub. L. 99–514, §\u202f1023(a)(1) , amended cl. (ii) generally, inserting “on life insurance contracts plus all discounted unpaid losses (as defined in section 846)” and “on life insurance contracts plus all discounted unpaid losses”.\nSubsec. (b)(5)(B) to (E).  Pub. L. 99–514, §\u202f1022(a) , in amending par. (5) generally, added subpars. (B) to (E). Former subpar. (B) redesignated (A)(ii).\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f1023(a)(2) , inserted second sentence defining “expenses unpaid”.\nSubsec. (b)(7), (8).  Pub. L. 99–514, §\u202f1021(b) , added pars. (7) and (8).\nSubsec. (c)(5).  Pub. L. 99–514, §\u202f1024(c)(4) , substituted “section 834(b)” for “section 822(b)”.\nSubsec. (c)(11).  Pub. L. 99–514, §\u202f1024(c)(5) , substituted “subsection (b)(1)(C)” for “section 831(a)(3)(A)” and “subsection (b)(1)(D)” for “section 831(a)(3)(B)”.\nSubsec. (f).  Pub. L. 99–514, §\u202f1024(c)(6) , added subsec. (f).\n1984—Subsec. (b)(4).  Pub. L. 98–369 , in provisions following subpar. (B), substituted “section 816(b) but determined as provided in section 807” and “section 816” for “section 801(b)” and “section 801”, respectively.\n1982—Subsec. (e)(2).  Pub. L. 97–248  struck out “,\u2000as if no election to make installment payments under section 6152 is made” after “due to be paid”.\n1976—Subsec. (b)(1), (6).  Pub. L. 94–455, §\u202f1901(a)(108) , substituted “Association” for “Convention”.\nSubsec. (c)(5)(A).  Pub. L. 94–455, §\u202f1901(b)(1)(T) , struck out “or to the deductions provided in section 242 for partially tax-exempt interest” after “exchanges of capital assets”.\nSubsec. (c)(12).  Pub. L. 94–455, §\u202f1901(b)(1)(U) , struck out “partially tax-exempt interest and to” after “and following, relating to”.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1974—Subsec. (e)(6).  Pub. L. 93–483  added par. (6).\n1968—Subsec. (b)(1)(E).  Pub. L. 90–240, §\u202f5(a) , added subpar. (E).\nSubsec. (c)(13).  Pub. L. 90–240, §\u202f5(b) , added par. (13).\nSubsec. (e).  Pub. L. 90–240, §\u202f5(c) , added subsec. (e).\n1966—Subsec. (d).  Pub. L. 89–809  redesignated subsec. (e) as (d). Former subsec. (d), having reference to the taxable income of foreign insurance companies other than life or mutual and foreign mutual marine, was struck out.\nSubsec. (e).  Pub. L. 89–809  redesignated subsec. (e) as (d).\n1964—Subsec. (c)(10).  Pub. L. 88–272  inserted reference to part I of subchapter D.\n1962—Subsec. (b)(1)(C).  Pub. L. 87–834, §\u202f8(e)(3) , (5), substituted “section 831(a)(3)(A)” for “section 831(a)”.\nSubsec. (b)(1)(D).  Pub. L. 87–834, §\u202f8(e)(5) , added subpar. (D).\nSubsec. (b)(4).  Pub. L. 87–834, §\u202f8(e)(2) , inserted provisions defining unearned premiums of mutual fire or flood insurance companies, and which require premiums paid by the subscriber of a mutual flood insurance company to be treated, for purposes of computing the taxable income of such subscriber, in the same manner as premiums paid by a policyholder to a mutual fire insurance company referred to in par. (3) of  section 831(a) of this title .\nSubsec. (c)(11).  Pub. L. 87–834, §\u202f8(e)(4) , substituted “section 831(a)(3)(A)” for “section 831(a)”, and inserted definition of “dividends and similar distributions”.\n1956—Subsec. (b)(4). Act  Mar. 13, 1956 , §\u202f3(b)(1), substituted “section 801(b)” for “section 806”.\nSubsec. (c). Act  Mar. 13, 1956 , §\u202f3(b)(2), (3), substituted “the items described in section 822(b) (other than paragraph (1)(D) thereof) and net premiums received. In the application of section 1212” for “interest, dividends, rents, and net premiums received. In the application of section 1211” in par. (5), and authorized the deduction for depletion in par. (8).\nAmendment by  section 13001(b)(2)(I) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 115–97, title I, §\u202f13515(b) ,  Dec. 22, 2017 ,  131 Stat. 2144 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by section (a)(41)(G) of  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to contracts issued after  June 8, 1997 , in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see  section 1084(d) of Pub. L. 105–34 , set out as a note under  section 101 of this title .\nAmendment by  section 1702(h)(3) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 101–508, title XI, §\u202f11303(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–450 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning on or after  September 30, 1990 . \n \n “(2)   Amendments treated as change in method of accounting .— In the case of any taxpayer who is required by reason of the amendments made by this section to change his method of computing reserves— “(A)  such change shall be treated as a change in a method of accounting, \n \n “(B)  such change shall be treated as initiated by the taxpayer, \n \n “(C)  such change shall be treated as having been made with the consent of the Secretary, and \n \n “(D)  the net adjustments which are required by section 481 of the Internal Revenue Code of 1986 to be taken into account by the taxpayer shall be taken into account over a period not to exceed 4 taxable years beginning with the taxpayer’s first taxable year beginning on or after  September 30, 1990 . \n \n \n “(3)   Coordination with section  832(b)(4)(C).— The amendments made by this section shall not affect the application of section 832(b)(4)(C) of the Internal Revenue Code of 1986.”\nPub. L. 101–508, title XI, §\u202f11305(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–451 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 846 of this title ] shall apply to taxable years beginning after  December 31, 1989 . \n \n “(2)   Amendments treated as change in method of accounting.— “(A)   In general .— In the case of any taxpayer who is required by reason of the amendments made by this section to change his method of computing losses incurred— “(i)  such change shall be treated as a change in a method of accounting, \n \n “(ii)  such change shall be treated as initiated by the taxpayer, and \n \n “(iii)  such change shall be treated as having been made with the consent of the Secretary. \n \n \n “(B)   Adjustments .— In applying section 481 of the Internal Revenue Code of 1986 with respect to the change referred to in subparagraph (A)— “(i)  only 13 percent of the net amount of adjustments (otherwise required by such section 481 to be taken into account by the taxpayer) shall be taken into account, and \n \n “(ii)  the portion of such net adjustments which is required to be taken into account by the taxpayer (after the application of clause (i)) shall be taken into account over a period not to exceed 4 taxable years beginning with the taxpayer’s 1st taxable year beginning after  December 31, 1989 . \n \n \n \n “(3)   Treatment of companies which took into account salvage recoverable .— In the case of any insurance company which took into account salvage recoverable in determining losses incurred for its last taxable year beginning before  January 1, 1990 , 87 percent of the discounted amount of estimated salvage recoverable as of the close of such last taxable year shall be allowed as a deduction ratably over its 1st 4 taxable years beginning after  December 31, 1989 . \n \n “(4)   Special rule for overestimates .— If for any taxable year beginning after  December 31, 1989 — “(A)  the amount of the section 481 adjustment which would have been required without regard to paragraph (2) and any discounting, exceeds \n \n “(B)  the sum of the amount of salvage recovered taken into account under section 832(b)(5)(A)(i) for the taxable year and any preceding taxable year beginning after  December 31, 1989 , attributable to losses incurred with respect to any accident year beginning before 1990 and the undiscounted amount of estimated salvage recoverable as of the close of the taxable year on account of such losses, \n \n\n 87 percent of such excess (adjusted for discounting used in determining the amount of salvage recoverable as of the close of the last taxable year of the taxpayer beginning before  January 1, 1990 ) shall be included in gross income for such taxable year. \n \n “(5)   Effect on earnings and profits .— The earnings and profits of any insurance company for its 1st taxable year beginning after  December 31, 1989 , shall be increased by the amount of the section 481 adjustment which would have been required but for paragraph (2). For purposes of applying sections 56, [former] 902, 952(c)(1), and 960 of the Internal Revenue Code of 1986, earnings and profits of a corporation shall be determined by applying the principles of paragraph (2)(B).”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title X, §\u202f1021(c) ,  Oct. 22, 1986 ,  100 Stat. 2397 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special transitional rule for title insurance companies .— For the 1st taxable year beginning after  December 31, 1986 , in the case of premiums attributable to title insurance— “(A)   In general .— The unearned premiums at the end of the preceding taxable year as defined in paragraph (4) of section 832(b) [of the Internal Revenue Code of 1986] shall be determined as if the amendments made by this section had applied to such unearned premiums in the preceding taxable year and by using the interest rate and premium recognition pattern applicable to years ending in calendar year 1987. \n \n “(B)   Fresh start .— Except as provided in subparagraph (C), any difference between— “(i)  the amount determined to be unearned premiums for the year preceding the first taxable year of a title insurance company beginning after  December 31, 1986 , determined without regard to subparagraph (A), and \n \n “(ii)  such amount determined with regard to subparagraph (A), \n \n\n shall not be taken into account for purposes of the Internal Revenue Code of 1986. \n \n “(C)   Effect on earnings and profits .— The earnings and profits of any insurance company for its 1st taxable year beginning after  December 31, 1986 , shall be increased by the amount of the difference determined under subparagraph (A) with respect to such company.”\nPub. L. 99–514, title X, §\u202f1022(b) ,  Oct. 22, 1986 ,  100 Stat. 2399 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1023(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1023(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 846 of this title .\nAmendment by section 1024(c)(1)–(6) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 234(e) of Pub. L. 97–248 , set out as a note under  section 6655 of this title .\nAmendment by section 1901(a)(108), (b)(1)(T), (U) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 90–240, §\u202f5(e) ,  Jan. 2, 1968 ,  81 Stat. 778 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a), (b), (c), and (d) [amending this section and  section 381 of this title ] shall apply to taxable years beginning after  December 31, 1966 , except that so much of section 832(e)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by the amendment made by subsection (c)) as provides for payment of interest and penalties for failure to make a timely purchase of tax and loss bonds shall not apply with respect to any period during which such bonds are not available for purchase.”\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nPub. L. 88–272, title II, §\u202f228(d) ,  Feb. 26, 1964 ,  78 Stat. 99 , provided that:  “The amendment made by subsection (a) [amending former  section 809 of this title ] shall apply to taxable years beginning after  December 31, 1961 . The amendment made by subsection (c) [amending this section] shall apply to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 .”\nAmendment by  Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 8(h) of Pub. L. 87–834 , set out as a note under  section 501 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note under  section 316 of this title .\nPub. L. 104–188, title I, §\u202f1702(c)(4) ,  Aug. 20, 1996 ,  110 Stat. 1869 , provided that:  “The earnings and profits of any insurance company to which section 11305(c)(3) of the Revenue Reconciliation Act of 1990 [ Pub. L. 101–508 , set out above] applies shall be determined without regard to any deduction allowed under such section; except that, for purposes of applying sections 56 and [former] 902, and subpart F of part III of subchapter N of chapter 1 of the Internal Revenue Code of 1986, such deduction shall be taken into account.”\nPub. L. 100–647, title I, §\u202f1010(d)(3) ,  Nov. 10, 1988 ,  102 Stat. 3453 , provided that:  \n “For purposes of section 832(b)(5)(C)(i) of the 1986 Code, any stock or obligation acquired on or after  August 8, 1986 , by an insurance company subject to the tax imposed by section 831 of the 1986 Code (hereinafter in this paragraph referred to as the ‘acquiring company’) from another insurance company so subject (hereinafter in this paragraph referred to as the ‘transferor company’) shall be treated as acquired on the date on which such stock or obligation was acquired by the transferor company if— “(A)  the transferor company acquired such stock or obligation before  August 8, 1986 , and \n \n “(B)  at all times after the date on which such stock or obligation was acquired by the transferor company and before the date of the acquisition by the acquiring company, the transferor company and the acquiring company were members of the same affiliated group filing a consolidated return. \n \n\n For purposes of the preceding sentence, the date on which the stock or obligation was acquired by the transferor company shall be determined with regard to any prior application of the preceding sentence. For purposes of this paragraph, if the acquiring corporation or transferor corporation was a party to a reorganization described in section 368(a)(1)(F) of the 1986 Code, any reference to such corporation shall include a reference to any predecessor thereof involved in such reorganization.”\nPub. L. 99–514, title X, §\u202f1025 ,  Oct. 22, 1986 ,  100 Stat. 2409 , directed Secretary of the Treasury or his delegate to conduct a study of the treatment of policyholder dividends by mutual property and casualty insurance companies, the treatment of property and casualty insurance companies under the minimum tax, and the operation and effect of, and revenue raised by, the amendments made by this subtitle, and not later than  Jan. 1, 1989  (due date extended to  Jan. 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 ), such Secretary to submit to Committee on Ways and Means of House of Representatives, Committee on Finance of Senate, and Joint Committee on Taxation, the results of such study, together with such recommendations as he determined to be appropriate.\nPub. L. 99–514, title X, §\u202f1031 ,  Oct. 22, 1986 ,  100 Stat. 2409 , as amended by  Pub. L. 100–647, title I, §\u202f1010(g) ,  Nov. 10, 1988 ,  102 Stat. 3455 , provided that: \n “(a)   Certain Physicians’ and Surgeons’ Mutual Protection and Interindemnity Arrangements or Associations.— “(1)   Treatment of arrangements or associations.— “(A)   Capital contributions .— There shall not be included in the gross income of any eligible physicians’ and surgeons’ mutual protection and interindemnity arrangement or association any initial payment (whether made in a lump sum or a series of substantially equal payments over a period of not more than 6 years) made during any taxable year to such arrangement or association by a member joining such arrangement or association which— “(i)  does not release such member from obligations to pay current or future dues, assessments, or premiums; and \n \n “(ii)  is a condition precedent to receiving benefits of membership. \n \n\n \u2001\u2001Such initial payment shall be included in the gross income of such arrangement or association for such taxable year if it is reasonable to expect that such payment will be deductible pursuant to paragraph (2) by any member of such arrangement or association. \n \n “(B)   Return of contributions.— “(i)   In general .— The repayment to any member of any amount of any payment excluded under subparagraph (A) shall not be treated as policyholder dividend, and is not deductible by the arrangement or association. \n \n “(ii)   Source of returns .— Except in the case of the termination of a member’s interest in the arrangement or association, any amount distributed to any member shall be treated as paid out of surplus in excess of amounts excluded under subparagraph (A). \n \n \n \n “(2)   Deduction for members of eligible arrangements or associations.— “(A)   Payment as trade or business expenses .— To the extent not otherwise allowable under the Internal Revenue Code of 1986, any member of any eligible arrangement or association may treat any initial payment referred to in paragraph (1) made during a taxable year to such arrangement or association as an ordinary and necessary expense incurred in connection with a trade or business for purposes of the deduction allowable under section 162, to the extent such payment does not exceed the amount which would be payable to an independent insurance company for similar annual insurance coverage (as determined by the Secretary), and further reduced by any annual dues, assessments, or premiums paid during such taxable year. Such deduction shall not be allowable as to any initial payment referred to in paragraph (1) made to an eligible arrangement or association by any person who is a member of any other eligible arrangement or association on or after the effective date of the Tax Reform Act of 1986. Any excess amount not allowed as a deduction for the taxable year in which such payment was made pursuant to the limitation contained in the 1st sentence of this subparagraph shall, subject to such limitation, be allowable as a deduction in any of the 5 succeeding taxable years, in order of time, to the extent not previously allowed as a deduction under this sentence. \n \n “(B)   Refunds of initial payments .— Any amount attributable to any initial payment referred to in paragraph (1) to such arrangement or association described in paragraph (1) which is later refunded for any reason shall be included in the gross income of the recipient in the taxable year received, to the extent a deduction for such payment was allowed. Any amount refunded in excess of such payment shall be included in gross income except to the extent otherwise excluded from income by the Internal Revenue Code of 1986. \n \n \n “(3)   Eligible arrangements or associations .— The terms ‘eligible physicans’ [sic] and surgeons’ mutual protection and interindemnity arrangement or association’ and ‘eligible arrangement or association’ mean and are limited to any mutual protection and interindemnity arrangement or association that provides only medical malpractice liability protection for its members or medical malpractice liability protection in conjunction with protection against other liability claims incurred in the course of, or related to, the professional practice of a physician or surgeon and which— “(A)  was operative and was providing such protection, or had received a permit for the offer and sale of memberships, under the laws of any State before  January 1, 1984 , \n \n “(B)  is not subject to regulation by any State insurance department, \n \n “(C)  has a right to make unlimited assessments against all members to cover current claims and losses, and \n \n “(D)  is not a member of, nor subject to protection by, any insurance guaranty plan or association of any State. \n \n \n \n “(b)   Effective Date .— The provisions of subsection (a) shall apply to payments made to and receipts of physicians’ and surgeons’ mutual protection and interindemnity arrangements or associations, and refunds of payments by such arrangements or associations, after the date of the enactment of this Act [ Oct. 22, 1986 ], in taxable years ending after such date.”\nPub. L. 90–240, §\u202f5(g) ,  Jan. 2, 1968 ,  81 Stat. 779 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  In the case of taxable years beginning before 1967, a company shall treat additions to a reserve, required by State law or regulations for mortgage guaranty insurance losses resulting from adverse economic cycles, as unearned premiums for purposes of section 832(b)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], but the amount so treated as unearned premiums in a taxable year shall not exceed 50 percent of premiums earned on insurance contracts (as defined in section 832(b)(4) of such Code), determined without regard to amounts added to the reserve, with respect to mortgage guaranty insurance for such year. The amount of unearned premiums at the close of 1966 shall be determined without regard to the preceding sentence for the purpose of applying section 832(b)(4) of such Code to 1967. Additions to such a reserve shall not be treated as unearned premiums for any taxable year beginning after 1966. \n \n “(2)  If a mortgage guaranty insurance company made additions to a reserve which were so treated as unearned premiums described in paragraph (1), such company, in taxable years beginning after 1966, shall include in gross income (in addition to the items specified in section 832(b)(1) of such Code) the sum of the following amounts until there is included in gross income an amount equal to the aggregate additions to the reserve described in paragraph (1) for taxable years beginning before 1967: “(A)  an amount (if any) equal to the excess of losses incurred (as defined in section 832(b)(5) of such Code) for the taxable year over 35 percent of premiums earned on insurance contracts during the taxable year (as defined in section 832(b)(4) of such Code), determined without regard to amounts added to the reserve referred to in paragraph (1), with respect to mortgage guaranty insurance, \n \n “(B)  the amount (if any) remaining which was added to the reserve for the tenth preceding taxable year, and \n \n “(C)  the excess (if any) of— “(i)  the aggregate of amounts so treated as unearned premiums for all taxable years beginning before 1967 less the total of the amounts included in gross income under this paragraph for prior taxable years and the amounts included in gross income under subparagraphs (A) and (B) for the taxable year, over \n \n “(ii)  the aggregate of the additions made for taxable years beginning before 1967 which remain in the reserve at the close of the taxable year. \n \n \n\n Amounts shall be taken into account on a first-in-time basis. For purposes of section 832(e) of such Code and this paragraph, if part of the reserve is reduced under State law or regulation, such reduction shall first apply to the extent of amounts added to the reserve for taxable years beginning before 1967, and only then to amounts added thereafter. \n \n “(3)  The provisions of this subsection shall apply to taxable years beginning after  December 31, 1956 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'OTHER INSURANCE COMPANIES'},
  'content': 'Such organization shall be taxable under this part in the same manner as if it were a stock insurance company.\nThe deduction determined under subsection (b) for any taxable year shall be allowed.\nSubparagraph (B) of paragraph (4) of section 832(b) shall be applied by substituting “100 percent” for “80 percent”, and subparagraph (C) of such paragraph (4) shall not apply.\nThe deduction determined under paragraph (1) for any taxable year shall not exceed taxable income for such taxable year (determined without regard to such deduction).\nThe adjusted surplus as of the beginning of the organization’s 1st taxable year beginning after  December 31, 1986 , shall be its surplus as of such time. For purposes of the preceding sentence and subsection (c)(3)(C), the term “surplus” means the excess of the total assets over total liabilities as shown on the annual statement.\nThe term “adjusted net operating loss” means the net operating loss for any taxable year determined with the adjustments set forth in subparagraph (C).\nAny determination under this subsection shall be made by only taking into account items attributable to the health-related business of the taxpayer.\nFor purposes of subsection (b), the adjusted surplus of any organization meeting the requirements of this paragraph as of the beginning of the 1st taxable year for which it meets such requirements shall be its surplus as of such time.\nParagraph (2) shall be applied to an organization described in subparagraph (B) as if it were a Blue Cross or Blue Shield organization.\nNotwithstanding the preceding paragraphs, paragraphs (2) and (3) of subsection (a) shall not apply to any organization unless such organization’s percentage of total premium revenue expended on reimbursement for clinical services and for activities that improve health care quality provided to enrollees under its policies during such taxable year (as reported under section 2718 of the Public Health Service Act) is not less than 85 percent.\nSection 2718 of the Public Health Service Act, referred to in subsec. (c)(5), is classified to  section 300gg–18 of Title 42 , The Public Health and Welfare.\n2014—Subsec. (b)(3)(E).  Pub. L. 113–295  struck out “,\u2000244,” after “sections 243” in cl. (ii) and in concluding provisions.\nSubsec. (c)(5).  Pub. L. 113–235  substituted “paragraphs (2) and (3) of subsection (a)” for “this section” and inserted “and for activities that improve health care quality” after “clinical services”.\n2010—Subsec. (c)(5).  Pub. L. 111–148  added par. (5).\n1997—Subsec. (b)(1)(A)(i).  Pub. L. 105–34, §\u202f1604(d)(2)(A)(i) , inserted “and liabilities incurred during the taxable year under cost-plus contracts” before the comma.\nSubsec. (b)(1)(A)(ii).  Pub. L. 105–34, §\u202f1604(d)(2)(A)(ii) , inserted “or in connection with the administration of cost-plus contracts” before the last comma.\n1996—Subsec. (c)(4).  Pub. L. 104–191  added par. (4).\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 113–235, div. N, §\u202f102(b) ,  Dec. 16, 2014 ,  128 Stat. 2773 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 111–148, title IX, §\u202f9016(b) ,  Mar. 23, 2010 ,  124 Stat. 872 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nPub. L. 105–34, title XVI, §\u202f1604(d)(2)(B) ,  Aug. 5, 1997 ,  111 Stat. 1098 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall take effect as if included in the amendments made by section 1012 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nPub. L. 104–191, title III, §\u202f351(b) ,  Aug. 21, 1996 ,  110 Stat. 2071 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years ending after  December 31, 1996 .”\nPub. L. 99–514, title X, §\u202f1012(c) ,  Oct. 22, 1986 ,  100 Stat. 2393 , as amended by  Pub. L. 100–647, title I, §\u202f1010(b)(1) , (2),  Nov. 10, 1988 ,  102 Stat. 3451 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending  section 501 of this title ] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Study of fraternal beneficiary associations .— The Secretary of the Treasury or his delegate shall conduct a study of organizations described in section 501(c)(8) of the Internal Revenue Code of 1986 and which received gross annual insurance premiums in excess of $25,000,000 for the taxable years of such organizations which ended during 1984. Not later than  January 1, 1988 , the Secretary of the Treasury shall submit to the Committee on Ways and Means of the House of Representatives, the Committee on Finance of the Senate, and the Joint Committee on Taxation the results of such study, together with such recommendations as he determines to be appropriate. The Secretary of the Treasury shall have authority to require the furnishing of such information as may be necessary to carry out the purposes of this paragraph. \n \n “(3)   Special rules for existing blue cross or blue shield organizations.— “(A)   In general .— In the case of any existing Blue Cross or Blue Shield organization (as defined in section 833(c)(2) of the Internal Revenue Code of 1986 as added by this section)— “(i)  no adjustment shall be made under section 481 (or any other provision) of such Code on account of a change in its method of accounting for its 1st taxable year beginning after  December 31, 1986 , and \n \n “(ii)  for purposes of determining gain or loss, the adjusted basis of any asset held on the 1st day of such taxable year shall be treated as equal to its fair market value as of such day. \n \n \n “(B)   Treatment of certain distributions .— For purposes of section 833(b)(3)(B), the surplus of any organization as of the beginning of its 1st taxable year beginning after  December 31, 1986 , shall be increased by the amount of any distribution (other than to policyholders) made by such organization after  August 16, 1986 , and before the beginning of such taxable year. \n \n “(C)   Reserve weakening after  august 16, 1986 .— Any reserve weakening after  August 16, 1986 , by an existing Blue Cross or Blue Shield organization shall be treated as occurring in such organization’s 1st taxable year beginning after  December 31, 1986 . \n \n \n “(4)   Other special rules.— “(A)  The amendments made by this section shall not apply with respect to that portion of the business of Mutual of America which is attributable to pension business. \n \n “(B)  The amendments made by this section shall not apply to that portion of the business of the Teachers Insurance Annuity Association-College Retirement Equities Fund which is attributable to pension business. \n \n “(C)  The amendments made by this section shall not apply to— “(i)  the retirement fund of the YMCA, \n \n “(ii)  the Missouri Hospital Plan, \n \n “(iii)  administrative services performed by municipal leagues, and \n \n “(iv)  dental benefit coverage provided by a Delta Dental Plans Association organization through contracts with independent professional service providers so long as the provision of such coverage is the principal activity of such organization. \n \n \n “(D)  For purposes of this paragraph, the term ‘pension business’ means the administration of any plan described in section 401(a) of the Internal Revenue Code of 1954 [now 1986] which includes a trust exempt from tax under section 501(a), any plan under which amounts are contributed by an individual’s employer for an annuity contract described in section 403(b) of such Code, any individual retirement plan described in section 408 of such Code, and any eligible deferred compensation plan to which section 457(a) of such Code applies.”\n[The due date for the report referred to in  section 1012(c)(2) of Pub. L. 99–514 , set out above, extended to  July 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 .]\nPub. L. 105–277, div. J, title IV, §\u202f4003(g) ,  Oct. 21, 1998 ,  112 Stat. 2681–910 , provided that:  “Rules similar to the rules of section 1.1502–75(d)(5) of the Treasury Regulations shall apply with respect to any organization described in section 1042(b) of the 1997 Act [ section 1042(b) of Pub. L. 105–34 , set out below].”\nPub. L. 105–34, title X, §\u202f1042 ,  Aug. 5, 1997 ,  111 Stat. 939 , provided that: \n “(a)   In General .— Subparagraphs (A) and (B) of section 1012(c)(4) of the Tax Reform Act of 1986 [ Pub. L. 99–514 , set out as an Effective Date note above] shall not apply to any taxable year beginning after  December 31, 1997 . \n \n “(b)   Special Rules .— In the case of an organization to which section 501(m) of the Internal Revenue Code of 1986 applies solely by reason of the amendment made by subsection (a)— “(1)  no adjustment shall be made under section 481 (or any other provision) of such Code on account of a change in its method of accounting for its first taxable year beginning after  December 31, 1997 , and \n \n “(2)  for purposes of determining gain or loss, the adjusted basis of any asset held on the 1st day of such taxable year shall be treated as equal to its fair market value as of such day. \n \n \n “(c)   Reserve Weakening After June  8, 1997.— Any reserve weakening after  June 8, 1997 , by an organization described in subsection (b) shall be treated as occurring in such organization’s 1st taxable year beginning after  December 31, 1997 . \n \n “(d)   Regulations .— The Secretary of the Treasury or his delegate may prescribe rules for providing proper adjustments for organizations described in subsection (b) with respect to short taxable years which begin during 1998 by reason of section 843 of the Internal Revenue Code of 1986.”\nPub. L. 100–647, title I, §\u202f1010(b)(3) ,  Nov. 10, 1988 ,  102 Stat. 3451 , provided that:  “The Secretary of the Treasury or his delegate may prescribe rules providing proper adjustments for taxpayers which become subject to subchapter L of chapter 1 of the 1986 Code by reason of the amendments made by section 1012 of the Reform Act [ Pub. L. 99–514 , enacting this section and amending  section 501 of this title ] with respect to short taxable years which begin during 1987 by reason of section 843 of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'OTHER INSURANCE COMPANIES'},
  'content': 'For purposes of section 831(b), the term “taxable investment income” means the gross investment income, minus the deductions provided in subsection (c).\nThe amount of interest which under section 103 is excluded for the taxable year from gross income.\nInvestment expenses paid or accrued during the taxable year. If any general expenses are in part assigned to or included in the investment expenses, the total deduction under this paragraph shall not exceed one-fourth of 1 percent of the mean of the book value of the invested assets held at the beginning and end of the taxable year plus one-fourth of the amount by which taxable investment income (computed without any deduction for investment expenses allowed by this paragraph, for tax-free interest allowed by paragraph (1), or for dividends received allowed by paragraph (7)), exceeds 3¾ percent of the book value of the mean of the invested assets held at the beginning and end of the taxable year.\nTaxes (as provided in section 164), and other expenses, paid or accrued during the taxable year exclusively on or with respect to the real estate owned by the company. No deduction shall be allowed under this paragraph for any amount paid out for new buildings, or for permanent improvements or betterments made to increase the value of any property.\nThe depreciation deduction allowed by section 167.\nAll interest paid or accrued within the taxable year on indebtedness, except on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from taxation under this subtitle.\nThe special deductions allowed by part VIII (except section 248) of subchapter B (sec. 241 and following, relating to dividends received). In applying section 246(b) (relating to limitation on aggregate amount of deductions for dividends received) for purposes of this paragraph, the reference in such section to “taxable income” shall be treated as a reference to “taxable investment income”.\nThe deduction allowed by section 611 (relating to depletion).\nThe deduction under subsection (c)(3) or (4) on account of any real estate owned and occupied in whole or in part by a mutual insurance company subject to the tax imposed by section 831 shall be limited to an amount which bears the same ratio to such deduction (computed without regard to this paragraph) as the rental value of the space not so occupied bears to the rental value of the entire property.\nNothing in this part shall permit the same item to be deducted more than once.\nThe term “net premiums” means gross premiums (including deposits and assessments) written or received on insurance contracts during the taxable year less return premiums and premiums paid or incurred for reinsurance. Amounts returned where the amount is not fixed in the insurance contract but depends on the experience of the company or the discretion of the management shall not be included in return premiums but shall be treated as dividends to policyholders under paragraph (2).\nThe term “dividends to policyholders” means dividends and similar distributions paid or declared to policyholders. For purposes of the preceding sentence, the term “paid or declared” shall be construed according to the method regularly employed in keeping the books of the insurance company.\n2017—Subsec. (b)(1)(D).  Pub. L. 115–97  struck out “sec. 1201 and following,” before “relating to capital gains and losses”.\n1986— Pub. L. 99–514, §\u202f1024(a)(3) , renumbered  section 822 of this title  as this section.\nSubsec. (a).  Pub. L. 99–514, §\u202f1024(c)(7) , amended subsec. (a) generally. Prior to amendment, subsec. (a), definitions, read as follows: “For purposes of this part—\n“(1) The term ‘taxable investment income’ means the gross investment income, minus the deductions provided in subsection (c).\n“(2) The term ‘investment loss’ means the amount by which the deductions provided in subsection (c) exceed the gross investment income.”\nSubsec. (d).  Pub. L. 99–514, §\u202f1024(c)(8) , substituted “section 831” for “section 821” in pars. (1) and (2), and inserted “except in the case of discount which is original issue discount (as defined in section 1273)” at end of last sentence in par.\n1976—Subsec. (c)(2).  Pub. L. 94–455, §\u202f1901(b)(1)(P) , struck out “partially tax-exempt interest and” before “dividends received allowed by”.\nSubsec. (c)(5).  Pub. L. 94–455, §\u202f1901(a)(105)(A) , struck out “(other than obligations of the United States issued after  September 24, 1917 , and originally subscribed for by the taxpayer)” after “purchase or carry obligations”.\nSubsec. (c)(6)(A).  Pub. L. 94–455, §\u202f1901(b)(1)(Q) , struck out “or to the deduction provided in section 242 for partially tax-exempt interest” after “exchanges of capital assets”.\nSubsec. (c)(7).  Pub. L. 94–455, §\u202f1901(b)(1)(R) , struck out “partially tax-exempt interest and to” after “and following, relating to”.\nSubsec. (d)(2).  Pub. L. 94–455 , §§\u202f1901(a)(105)(B), (b)(1)(S), 1906(b)(13)(A), struck out in subpar. (B) “or his delegate” after “Secretary” and substituted in provisions preceding subpar. (A) “and the deduction provided in subsection (c)(1)” for “,\u2000the deduction provided in subsection (c)(1), and the deduction allowed by section 242 (relating to partially tax-exempt interest)” and in provisions following subpar. (B) “No accrual” for “For taxable years beginning after  December 31, 1962 , no accrual”.\n1966—Subsecs. (e), (f).  Pub. L. 89–809  redesignated subsec. (f) as (e). Former subsec. (e), dealing with foreign mutual insurance companies other than life or marine, was struck out.\n1964—Subsec. (d)(2).  Pub. L. 88–272  provided that for taxable years beginning after  Dec. 31, 1962 , no accrual of discount shall be required under par. (2) on any bond.\n1962— Pub. L. 87–834, §\u202f8(b)(1) , substituted “Determination of taxable investment income” for “Determination of mutual insurance company taxable income” in section catchline.\nSubsec. (a).  Pub. L. 87–834, §\u202f8(b)(1) , defined “taxable investment income” and “investment loss” for purposes of this part, and struck out provisions which defined “mutual insurance company taxable income” for purposes of  section 821 of this title , which provisions are now contained in  section 821(b) of this title .\nSubsec. (c).  Pub. L. 87–834, §\u202f8(b)(2) , (3), substituted “taxable investment income” for “mutual insurance company taxable income” in opening provisions and in pars. (2) and (6)(A), and inserted sentence in par. (7) providing that in applying section 246(b) (relating to limitations on aggregate amount of deductions for dividends received) for purposes of par. (7), reference in such section to “taxable income” shall be treated as a reference to “taxable investment income”.\nSubsec. (e).  Pub. L. 87–834, §\u202f8(b)(2) , substituted “taxable investment income” for “mutual insurance company taxable income”.\nSubsec. (f).  Pub. L. 87–834, §\u202f8(b)(4) , added subsec. (f). Provisions of subsec. (f) were formerly contained in  section 823 of this title .\n1956—Subsec. (b). Act  Mar. 13, 1956 , §\u202f3(a)(3), principally included royalties, and the income from a trade or business other than the insurance business carried on by the insurance company in “gross investment income”.\nSubsec. (c). Act  Mar. 13, 1956 , §\u202f3(a)(4), (5), (6), clarified the deduction for real estate expenses in par. (3), substituted in par. (6) “the sum of the items described in subsection (b) (other than paragraph (1)(D) thereof) and net premiums received. In the application of section 1212” for “the sum of interest, dividends, rents, and net premiums received. In the application of section 1211”, and inserted pars. (8) and (9).\nSubsec. (d)(1). Act  Mar. 13, 1956 , §\u202f3(a)(7), substituted “subsection (c)(3) or (4)” for “subsection (e)(3) or (4)”.\nSubsec. (e). Act  Mar. 13, 1956 , §\u202f3(a)(8), substituted “items described in subsection (b) (other than paragraph (1)(D) thereof” for “interest, dividends, rents,”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by section 1901(a)(105), (b)(1)(P)–(S) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 8(h) of Pub. L. 87–834 , set out as a note under  section 501 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note set out under  section 316 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'OTHER INSURANCE COMPANIES'},
  'content': 'Except as otherwise provided in this section, any mutual insurance company which is an interinsurer or reciprocal underwriter (hereinafter in this section referred to as a “reciprocal”) subject to the taxes imposed by section 831(a) may, under regulations prescribed by the Secretary, elect to be subject to the limitation provided in subsection (b). Such election shall be effective for the taxable year for which made and for all succeeding taxable years, and shall not be revoked except with the consent of the Secretary.\nThe deduction for amounts paid or incurred in the taxable year to the attorney-in-fact by a reciprocal making the election provided in subsection (a) shall be limited to, but in no case increased by, the deductions of the attorney-in-fact allocable, in accordance with regulations prescribed by the Secretary, to the income received by the attorney-in-fact from the reciprocal.\nAny reciprocal electing to be subject to the limitation provided in subsection (b) shall be credited with so much of the tax paid by the attorney-in-fact as is attributable, under regulations prescribed by the Secretary, to the income received by the attorney-in-fact from the reciprocal in such taxable year.\nAny increase in the taxable income of a reciprocal attributable to the limits provided in subsection (b) shall be taxed at the highest rate of tax specified in section 11(b).\nIf for any taxable year an attorney-in-fact is allowed a credit or refund for taxes paid with respect to which credit or refund to the reciprocal resulted under subsection (d), the taxes of such reciprocal for such taxable year shall be properly adjusted under regulations prescribed by the Secretary.\nNothing in this section shall increase or decrease the taxes imposed by this chapter on the income of the attorney-in-fact.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1010(f)(2) , substituted “section 831(a)” for “section 821(a)”.\nSubsec. (f).  Pub. L. 100–647, §\u202f1010(f)(3) , substituted “subsection (d)” for “subsection (e)”.\n1986— Pub. L. 99–514, §\u202f1024(a)(3) , renumbered  section 826 of this title  as this section.\nSubsec. (d).  Pub. L. 99–514, §\u202f1024(c)(9)(A) , redesignated subsec. (e) as (d) and struck out former subsec. (d), special rule, which read as follows: “In applying section 824(d)(1)(D), any amount which was added to the protection against loss account by reason of an election under this section shall be treated as having been added by reason of section 824(a)(1)(A).”\nSubsec. (e).  Pub. L. 99–514, §\u202f1024(c)(9) , redesignated subsec. (f) as (e), substituted “Benefits of graduated rates” for “Surtax exemption” in heading, and amended text generally. Prior to amendment, text read as follows: “Any increase in taxable income of a reciprocal attributable to the limitation provided in subsection (b) shall be taxed without regard to the surtax exemption provided in section 821(a)(2).” Former subsec. (e) redesignated (d).\nSubsecs. (f) to (h).  Pub. L. 99–514, §\u202f1024(c)(9)(A) , redesignated subsecs. (f) to (h) as (e) to (g), respectively.\n1978—Subsec. (c)(1).  Pub. L. 95–600  substituted “the tax imposed by section 11” for “the taxes imposed by section 11(b) and (c)”.\n1976—Subsecs. (a), (b), (c)(2), (e), (g).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nSection applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 8(h) of Pub. L. 87–834 , set out as an Effective Date of 1962 Amendment note under  section 501 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': '1986— Pub. L. 99–514  substituted “section 801 or 831” for “section 801, 821, or 831” in introductory provisions, redesignated par. (3) as (2), and struck out former par. (2) which read as follows: “in the case of the tax imposed by section 821(a), the mutual insurance company taxable income (as defined in section 821(b)); and in the case of the tax imposed by section 821(c), the taxable investment income (as defined in section 822(a)), and”.\n1984— Pub. L. 98–369  substituted “section 801” for “section 802”, wherever appearing, and “section 801(b)” for “section 802(b)”.\n1966— Pub. L. 89–809  substituted “For purposes of the preceding sentence (and for purposes of applying section 906 with respect to a foreign corporation subject to tax under this subchapter), the term ‘taxable income’ as used in section 904” for “For purposes of the preceding sentence, the term ‘taxable income’ as used in section 904”.\n1962— Pub. L. 87–834  added par. (2) and redesignated former par. (2) as (3).\n1959— Pub. L. 86–69  struck out reference to  section 811 of this title  in first sentence, and substituted “section 802, the life insurance company taxable income (as defined in section 802(b)), and” for “section 802 or 811, the net investment income (as defined in section 803(c))” in par. (1).\n1956—Act  Mar. 13, 1956 , inserted references to section 811.\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 8(h) of Pub. L. 87–834 , set out as a note under  section 501 of this title .\nAmendment by  Pub. L. 86–69  applicable only with respect to taxable years beginning after  Dec. 31, 1957 , see  section 4 of Pub. L. 86–69 , set out as a note under  section 381 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note under  section 316 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'If a foreign company carrying on an insurance business within the United States would qualify under part I or II of this subchapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation, such company shall be taxable under such part on its income effectively connected with its conduct of any trade or business within the United States. With respect to the remainder of its income which is from sources within the United States, such a foreign company shall be taxable as provided in section 881.\nIn the case of a company taxable under part I, the term “total insurance liabilities” means the sum of the total reserves (as defined in section 816(c)) plus (to the extent not included in total reserves) the items referred to in paragraphs (3), (4), (5), and (6) of section 807(c).\nIn the case of a company taxable under part II, the term “total insurance liabilities” means the sum of unearned premiums and unpaid losses.\nIf the foreign company makes an election under this paragraph, such company’s worldwide current investment yield shall be taken into account in lieu of the domestic investment yield for purposes of paragraph (1)(B).\nAn election under this paragraph shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\nThe reduction under subparagraph (A) shall not exceed the increase in taxes under part I or II (as the case may be) by reason of the increase in effectively connected income of the company resulting from subsection (b).\nEach domestic asset/liability percentage, and each domestic investment yield, for any taxable year shall be based on such representative data with respect to domestic insurance companies for the second preceding taxable year as the Secretary considers appropriate.\n2017—Subsec. (c).  Pub. L. 115–97  redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1). Prior to amendment, text of par. (1) read as follows: “In the case of a foreign company taxable under part I, subsection (b) shall be applied before computing the small life insurance company deduction.”\n2004—Subsec. (c)(3), (4).  Pub. L. 108–218  redesignated par. (4) as (3) and struck out heading and text of former par. (3). Text read as follows: “For purposes of section 809, the equity base of any foreign mutual life insurance company as of the close of any taxable year shall be increased by the excess of—\n“(A) the required United States assets of the company (determined under subsection (b)(2)), over\n“(B) the mean of the assets held in the United States during the taxable year.”\n1989—Subsec. (c)(4).  Pub. L. 101–239  substituted “yields” for “yeilds” in heading.\n1988—Subsec. (b)(3)(B).  Pub. L. 100–647, §\u202f2004(q)(2)(A) , struck out “held for the production of such income” after “same companies”.\nSubsec. (b)(4)(B)(ii).  Pub. L. 100–647, §\u202f2004(q)(2)(B) , struck out “held for the production of investment income” after “United States)”.\nSubsec. (d)(4).  Pub. L. 100–647, §\u202f2004(q)(3) , added par. (4).\n1987— Pub. L. 100–203  substituted “companies” for “corporations” in section catchline and amended text generally. Prior to amendment, text read as follows: “If a foreign corporation carrying on an insurance business within the United States would qualify under part I or II of this subchapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation, such corporation shall be taxable under such part on its income effectively connected with its conduct of any trade or business within the United States. With respect to the remainder of its income, which is from sources within the United States, such a foreign corporation shall be taxable as provided in section 881.”\n1986— Pub. L. 99–514  struck out reference to part III of this subchapter.\n1966— Pub. L. 89–809  substituted provisions covering the taxability of foreign corporations that are carrying on an insurance business within the United States which would qualify under part I, II, or III of this subchapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation for provisions that the gross income of insurance companies subject to the tax imposed by section 802 or 831 shall not be determined in the manner provided in part I of subchapter N (relating to determination of sources of income).\n1959— Pub. L. 86–69  struck out reference to section 811.\n1956—Act  Mar. 13, 1956 , inserted reference to section 811.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as a note under  section 453B of this title .\nAmendment by  Pub. L. 108–218  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 205(c) of Pub. L. 108–218 , set out as a note under  section 807 of this title .\nAmendment by  Pub. L. 101–239  effective as if included in the provision of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 7823 of Pub. L. 101–239 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 100–203  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10242(d) of Pub. L. 100–203 , set out as a note under  section 816 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  Pub. L. 89–809  with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 86–69  applicable only with respect to taxable years beginning after  Dec. 31, 1957 , see  section 4 of Pub. L. 86–69 , set out as a note under  section 381 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note under  section 316 of this title .\nPub. L. 99–514, title XII, §\u202f1244 ,  Oct. 22, 1986 ,  100 Stat. 2581 , directed Secretary of the Treasury or his delegate to conduct a study to determine whether United States reinsurance corporations are placed at a significant competitive disadvantage with foreign reinsurance corporations by existing treaties between the United States and foreign countries, and to report before  Jan. 1, 1988 , the results of such study to Committee on Finance of United States Senate and Committee on Ways and Means of House of Representatives.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'For purposes of this subtitle, the annual accounting period for each insurance company subject to a tax imposed by this subchapter shall be the calendar year. Under regulations prescribed by the Secretary, an insurance company which joins in the filing of a consolidated return (or is required to so file) may adopt the taxable year of the common parent corporation even though such year is not a calendar year.\n1976— Pub. L. 94–455  inserted provision permitting an insurance company which joins in the filing of a consolidated return to adopt the taxable year of the common parent corporation even though such year is not a calendar year.\nAmendment by  Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1980 , see  section 1507(c)(1) of Pub. L. 94–455 , set out as a note under  section 1504 of this title .\nSection applicable only to taxable years beginning after  Dec. 31, 1954 , see Effective Date of 1956 Amendment note set out under  section 316 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'Section, added  Pub. L. 91–172, title IX, §\u202f907(c)(1) ,  Dec. 30, 1969 ,  83 Stat. 716 ; amended  Pub. L. 94–455, title XIX , §§\u202f1901(b)(25), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1798 , 1834;  Pub. L. 98–369, div. A, title II, §\u202f211(b)(11) ,  July 18, 1984 ,  98 Stat. 755 ;  Pub. L. 99–514, title X, §\u202f1024(c)(12) , title XVIII, §\u202f1899A(20),  Oct. 22, 1986 ,  100 Stat. 2408 , 2959;  Pub. L. 101–239, title VII, §\u202f7841(d)(16) ,  Dec. 19, 1989 ,  103 Stat. 2429 , related to special loss carryover rules.\nRepeal applicable to losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13511(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'If the Secretary determines that any reinsurance contract has a significant tax avoidance effect on any party to such contract, the Secretary may make proper adjustments with respect to such party to eliminate such tax avoidance effect (including treating such contract with respect to such party as terminated on December 31 of each year and reinstated on January 1 of the next year).\n2004—Subsec. (a).  Pub. L. 108–357  substituted “amount, source, or character” for “source and character” in concluding provisions.\nPub. L. 108–357, title VIII, §\u202f803(b) ,  Oct. 22, 2004 ,  118 Stat. 1569 , provided that:  “The amendments made by this section [amending this section] shall apply to any risk reinsured after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 98–369, div. A, title II, §\u202f217(d) ,  July 18, 1984 ,  98 Stat. 762 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Subsection (a) of section 845 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this title) shall apply with respect to any risk reinsured on or after  September 27, 1983 . \n \n “(2)  Subsection (b) of section 845 of such Code (as so added) shall apply with respect to risks reinsured after  December 31, 1984 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'The amount of the discounted unpaid losses as of the end of any taxable year shall be the sum of the discounted unpaid losses (as of such time) separately computed under this section with respect to unpaid losses in each line of business attributable to each accident year.\nIn no event shall the amount of the discounted unpaid losses with respect to any line of business attributable to any accident year exceed the aggregate amount of unpaid losses with respect to such line of business for such accident year included on the annual statement filed by the taxpayer for the year ending with or within the taxable year.\nExcept as otherwise provided in this subsection, the term “undiscounted unpaid losses” means the unpaid losses shown in the annual statement filed by the taxpayer for the year ending with or within the taxable year of the taxpayer.\nFor purposes of this section, the rate of interest determined under this subsection shall be the annual rate determined by the Secretary under paragraph (2).\nThe annual rate determined by the Secretary under this paragraph for any calendar year shall be a rate determined on the basis of the corporate bond yield curve (as defined in section 430(h)(2)(D)(i), determined by substituting “60-month period” for “24-month period” therein).\nFor each determination year, the Secretary shall determine a loss payment pattern for each line of business by reference to the historical loss payment pattern applicable to such line of business. Any loss payment pattern determined by the Secretary shall apply to the accident year ending with the determination year and to each of the 4 succeeding accident years.\nIn the case of any line of business not described in subparagraph (A)(ii), losses paid after the 1st year following the accident year shall be treated as paid equally in the 2nd and 3rd year following the accident year.\nThe period taken into account under subparagraph (A)(ii) shall be extended to the extent required under subclause (II).\nThe amount of losses which would have been treated as paid in the 10th year after the accident year shall be treated as paid in such 10th year and each subsequent year in an amount equal to the amount of the average of the losses treated as paid in the 7th, 8th, and 9th years after the accident year (or, if lesser, the portion of the unpaid losses not theretofore taken into account). To the extent such unpaid losses have not been treated as paid before the 24th year after the accident year, they shall be treated as paid in such 24th year.\nFor purposes of this section, the term “determination year” means calendar year 1987 and each 5th calendar year thereafter.\nThe term “accident year” means the calendar year in which the incident occurs which gives rise to the related unpaid loss.\nThe term “unpaid losses” includes any unpaid loss adjustment expenses shown on the annual statement.\nThe term “annual statement” means the annual statement approved by the National Association of Insurance Commissioners which the taxpayer is required to file with insurance regulatory authorities of a State.\nThe term “line of business” means a category for the reporting of loss payment patterns determined on the basis of the annual statement for fire and casualty insurance companies for the calendar year ending with or within the taxable year, except that the multiple peril lines shall be treated as a single line of business.\nThe term “multiple peril lines” means the lines of business relating to farmowners multiple peril, homeowners multiple peril, commercial multiple peril, ocean marine, aircraft (all perils) and boiler and machinery.\n2017—Subsec. (c)(2).  Pub. L. 115–97, §\u202f13523(a) , amended par. (2) generally. Prior to amendment, text read as follows:\n“(A)  In general .—The annual rate determined by the Secretary under this paragraph for any calendar year shall be a rate equal to the average of the applicable Federal mid-term rates (as defined in section 1274(d) but based on annual compounding) effective as of the beginning of each of the calendar months in the test period.\n“(B)  Test period .—For purposes of subparagraph (A), the test period is the most recent 60-calendar-month period ending before the beginning of the calendar year for which the determination is made; except that there shall be excluded from the test period any month beginning before  August 1, 1986 .”\nSubsec. (d)(3)(B) to (G).  Pub. L. 115–97, §\u202f13523(b) , added subpar. (B) and struck out former subpars. (B) to (G) which related to treatment of certain losses, special rule for certain long-tail lines, long-tail line of business, special rule for international and reinsurance lines of business, adjustments if loss experience information available for longer periods, and special rule for 9th year if negative or zero, respectively.\nSubsecs. (e), (f).  Pub. L. 115–97, §\u202f13523(c) , redesignated subsecs. (f) and (g) as (e) and (f), respectively, and struck out former subsec. (e) which related to election to use company’s historical payment pattern.\nSubsec. (f)(6)(A).  Pub. L. 115–97, §\u202f13517(b)(3) , substituted “except that the limitation of subsection (a)(3) shall apply, and” for “except that—\n“(i) the prevailing State assumed interest rate shall be the rate in effect for the year in which the loss occurred rather than the year in which the contract was issued, and\n“(ii) the limitation of subsection (a)(3) shall apply in lieu of the limitation of the last sentence of section 807(d)(1), and”.\nSubsec. (g).  Pub. L. 115–97, §\u202f13523(c) , redesignated subsec. (g) as (f).\n1990—Subsec. (g).  Pub. L. 101–508  inserted “and” at end of par. (1), redesignated par. (3) as (2), and struck out former par. (2) which required regulations providing proper treatment of salvage and reinsurance recoverable attributable to unpaid losses.\n1988—Subsec. (f)(6)(B).  Pub. L. 100–647, §\u202f1010(e)(1) , substituted “paid in the middle of the year” for “paid during the year”.\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1010(e)(2) , added par. (3).\nAmendment by  section 13517(b)(3) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with transition rule and transition relief, see  section 13517(c) of Pub. L. 115–97 , set out as a note under  section 807 of this title .\nPub. L. 115–97, title I, §\u202f13523(d) ,  Dec. 22, 2017 ,  131 Stat. 2152 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 11305(c)(1) of Pub. L. 101–508 , set out as a note under  section 832 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title X, §\u202f1023(e) ,  Oct. 22, 1986 ,  100 Stat. 2404 , as amended by  Pub. L. 100–647, title I, §\u202f1010(e)(3) ,  Nov. 10, 1988 ,  102 Stat. 3453 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending sections 807 and 832 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Transitional rule .— For the first taxable year beginning after  December 31, 1986 — “(A)  the unpaid losses and the expenses unpaid (as defined in paragraphs (5)(B) and (6) of section 832(b) of the Internal Revenue Code of 1986) at the end of the preceding taxable year, and \n \n “(B)  the unpaid losses as defined in sections 807(c)(2) and 805(a)(1) of such Code at the end of the preceding taxable year, \n \n\n shall be determined as if the amendments made by this section had applied to such unpaid losses and expenses unpaid in the preceding taxable year and by using the interest rate and loss payment patterns applicable to accident years ending with calendar year 1987. For subsequent taxable years, such amendments shall be applied with respect to such unpaid losses and expenses unpaid by using the interest rate and loss payment patterns applicable to accident years ending with calendar year 1987. \n \n “(3)   Fresh start.— “(A)   In general .— Except as otherwise provided in this paragraph, any difference between— “(i)  the amount determined to be the unpaid losses and expenses unpaid for the year preceding the 1st taxable year of an insurance company beginning after  December 31, 1986 , determined without regard to paragraph (2), and \n \n “(ii)  such amount determined with regard to paragraph (2), \n \n\n shall not be taken into account for purposes of the Internal Revenue Code of 1986. \n \n “(B)   Reserve strengthening in years after 1985 .— Subparagraph (A) shall not apply to any reserve strengthening in a taxable year beginning in 1986, and such strengthening shall be treated as occurring in the taxpayer’s 1st taxable year beginning after  December 31, 1986 . \n \n “(C)   Effect on earnings and profits .— The earnings and profits of any insurance company for its 1st taxable year beginning after  December 31, 1986 , shall be increased by the amount of the difference determined under subparagraph (A) with respect to such company. \n \n \n “(4)   Application of fresh start to companies which become subject to section 831 (a)  tax in later taxable year .— If— “(A)  an insurance company was not subject to tax under section 831(a) of the Internal Revenue Code of 1986 for its 1st taxable year beginning after  December 31, 1986 , by reason of being— “(i)  subject to tax under section 831(b) of such Code, or \n \n “(ii)  described in section 501(c) of such Code and exempt from tax under section 501(a) of such Code, and \n \n \n “(B)  such company becomes subject to tax under such section 831(a) for any later taxable year, \n \n\n paragraph (2) and subparagraphs (A) and (C) of paragraph (3) shall be applied by treating such later taxable year as its 1st taxable year beginning after  December 31, 1986 , and by treating the calendar year in which such later taxable year begins as 1987; and paragraph (3)(B) shall not apply.”\nPub. L. 115–97, title I, §\u202f13523(e) ,  Dec. 22, 2017 ,  131 Stat. 2152 , provided that:  \n “For the first taxable year beginning after  December 31, 2017 — “(1)  the unpaid losses and the expenses unpaid (as defined in paragraphs (5)(B) and (6) of section 832(b) of the Internal Revenue Code of 1986) at the end of the preceding taxable year, and \n \n “(2)  the unpaid losses as defined in sections 807(c)(2) and 805(a)(1) of such Code at the end of the preceding taxable year, \n \n\n shall be determined as if the amendments made by this section [amending this section] had applied to such unpaid losses and expenses unpaid in the preceding taxable year and by using the interest rate and loss payment patterns applicable to accident years ending with calendar year 2018, and any adjustment shall be taken into account ratably in such first taxable year and the 7 succeeding taxable years. For subsequent taxable years, such amendments shall be applied with respect to such unpaid losses and expenses unpaid by using the interest rate and loss payment patterns applicable to accident years ending with calendar year 2018.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'Section, added  Pub. L. 100–647, title VI, §\u202f6077(a) ,  Nov. 10, 1988 ,  102 Stat. 3707 ; amended  Pub. L. 101–239, title VII, §\u202f7816(n) ,  Dec. 19, 1989 ,  103 Stat. 2422 ;  Pub. L. 115–97, title I, §\u202f12001(b)(8)(B) ,  Dec. 22, 2017 ,  131 Stat. 2093 , related to special estimated tax payments.\nPub. L. 115–97, title I, §\u202f13516(b) ,  Dec. 22, 2017 ,  131 Stat. 2144 , provided that:  “The amendments made by this section [repealing this section] shall apply to taxable years beginning after  December 31, 2017 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS OF GENERAL APPLICATION'},
  'content': 'Paragraph (2) of subsection (a) shall be applied with respect to so much of the specified policy acquisition expenses of an insurance company for any taxable year as does not exceed $5,000,000 by substituting “60-month” for “180-month”.\nIf the specified policy acquisition expenses of an insurance company exceed $10,000,000 for any taxable year, the $5,000,000 amount under paragraph (1) shall be reduced (but not below zero) by the amount of such excess.\nParagraph (1) shall not apply to any specified policy acquisition expenses for any taxable year which are attributable to premiums or other consideration under any reinsurance contract.\nThe term “general deductions” means the deductions provided in part VI of subchapter B (sec. 161 and following, relating to itemized deductions) and in part I of subchapter D (sec. 401 and following, relating to pension, profit sharing, stock bonus plans, etc.).\nIn the case of an insurance company subject to tax under part II of this subchapter, all computations entering into determinations of net premiums for any taxable year shall be made in the manner required under section 811(a) for life insurance companies.\nNet premiums shall be determined without regard to section 808(e) and without regard to other similar amounts treated as paid to, and returned by, the policyholder.\nExcept as otherwise provided in this paragraph, the term “specified insurance contract” means any life insurance, annuity, or noncancellable accident and health insurance contract (or any combination thereof).\nAny annuity contract combined with noncancellable accident and health insurance shall be treated as a noncancellable accident and health insurance contract and not as an annuity contract.\nThe rules of section 816(e) shall apply for purposes of this section.\nA contract which reinsures another contract shall be treated in the same manner as the reinsured contract.\nAn annuity or life insurance contract which includes a qualified long-term care insurance contract as a part of or a rider on such annuity or life insurance contract shall be treated as a specified insurance contract not described in subparagraph (A) or (B) of subsection (c)(1).\nNothing in any provision of law (other than this section or section 197) shall require the capitalization of any ceding commission incurred on or after  September 30, 1990 , under any contract which reinsures a specified insurance contract.\nExcept as provided in paragraph (2), the Secretary may provide that a type of insurance contract will be treated as a separate category for purposes of this section (and prescribe a percentage applicable to such category) if the Secretary determines that the deferral of acquisition expenses for such type of contract which would otherwise result under this section is substantially greater than the deferral of acquisition expenses which would have resulted if actual acquisition expenses (including indirect expenses) and the actual useful life for such type of contract had been used.\nIf the Secretary exercises his authority with respect to any type of contract under paragraph (1), the Secretary shall adjust the percentage which would otherwise have applied under subsection (c)(1) to the category which includes such type of contract so that the exercise of such authority does not result in a decrease in the amount of revenue received under this chapter by reason of this section for any fiscal year.\n2017—Subsec. (a)(2).  Pub. L. 115–97, §\u202f13519(a)(1) , substituted “180-month” for “120-month”.\nSubsec. (b)(1).  Pub. L. 115–97, §\u202f13519(b) , substituted “180-month” for “120-month”.\nSubsec. (c)(1)(A).  Pub. L. 115–97, §\u202f13519(a)(2) , substituted “2.09 percent” for “1.75 percent”.\nSubsec. (c)(1)(B).  Pub. L. 115–97, §\u202f13519(a)(3) , which directed substitution of “2.45 percent” for “2.05 percent” in par. (2), was executed to par. (1)(B) to reflect the probable intent of Congress.\nSubsec. (c)(1)(C).  Pub. L. 115–97, §\u202f13519(a)(4) , which directed substitution of “9.2 percent” for “7.7 percent” in par. (3), was executed to par. (1)(C) to reflect the probable intent of Congress. Subsec. (c) does not contain a par. (3).\nSubsec. (e)(1)(B)(iii).  Pub. L. 115–97, §\u202f13517(b)(4) , substituted “807(e)(3)” for “807(e)(4)”.\nSubsec. (i).  Pub. L. 115–97, §\u202f12001(b)(8)(C) , struck out subsec. (i). Text read as follows: “For purposes of determining adjusted current earnings under section 56(g), acquisition expenses with respect to contracts described in clause (iii) of subsection (e)(1)(B) shall be capitalized and amortized in accordance with the treatment generally required under generally accepted accounting principles as if this subsection applied to such contracts for all taxable years.”\n2014—Subsec. (j).  Pub. L. 113–295  struck out subsec. (j). Text read as follows: “In the case of any taxable year which includes  September 30, 1990 , the amount taken into account as the net premiums (or negative capitalization amount) with respect to any category of specified insurance contracts shall be the amount which bears the same ratio to the amount which (but for this subsection) would be so taken into account as the number of days in such taxable year on or after  September 30, 1990 , bears to the total number of days in such taxable year.”\n2006—Subsec. (e)(6).  Pub. L. 109–280  added par. (6).\n2003—Subsec. (e)(1)(B)(v).  Pub. L. 108–173  added cl. (v).\n2000—Subsec. (e)(1)(B)(iv).  Pub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(b)(10)] , substituted “an Archer MSA” for “a Archer MSA”.\nPub. L. 106–554, §\u202f1(a)(7) [title II, §\u202f202(a)(5)] , substituted “Archer MSA” for “medical savings account”.\n1996—Subsec. (e)(1)(B)(iv).  Pub. L. 104–191  added cl. (iv).\n1993—Subsec. (g).  Pub. L. 103–66  substituted “this section or section 197” for “this section”.\nAmendment by  section 12001(b)(8)(C) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13517(b)(4) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with transition rule and transition relief, see  section 13517(c) of Pub. L. 115–97 , set out as a note under  section 807 of this title .\nPub. L. 115–97, title I, §\u202f13519(c) ,  Dec. 22, 2017 ,  131 Stat. 2148 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to net premiums for taxable years beginning after  December 31, 2017 . \n \n “(2)   Transition rule .— Specified policy acquisition expenses first required to be capitalized in a taxable year beginning before  January 1, 2018 , will continue to be allowed as a deduction ratably over the 120-month period beginning with the first month in the second half of such taxable year.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–280  applicable to contracts issued after  Dec. 31, 1996 , but only with respect to taxable years beginning after  Dec. 31, 2009 , and to specified policy acquisition expenses determined for taxable years beginning after  Dec. 31, 2009 , see section 844(g)(1), (4) of  Pub. L. 109–280 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 108–173  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 1201(k) of Pub. L. 108–173 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 104–191  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 301(j) of Pub. L. 104–191 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nPub. L. 101–508, title XI, §\u202f11301(d)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–449 , provided that:  “The amendments made by subsections (a) and (c) [enacting this section] shall apply to taxable years ending on or after  September 30, 1990 . Any capitalization required by reason of such amendments shall not be treated as a change in method of accounting for purposes of the Internal Revenue Code of 1986.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATED INVESTMENT COMPANIES'},
  'content': 'A corporation which meets the requirements of subsections (b)(3) and (c) at the close of any quarter shall not lose its status as a regulated investment company because of a discrepancy during a subsequent quarter between the value of its various investments and such requirements unless such discrepancy exists immediately after the acquisition of any security or other property and is wholly or partly the result of such acquisition. A corporation which does not meet such requirements at the close of any quarter by reason of a discrepancy existing immediately after the acquisition of any security or other property which is wholly or partly the result of such acquisition during such quarter shall not lose its status for such quarter as a regulated investment company if such discrepancy is eliminated within 30 days after the close of such quarter and in such cases it shall be considered to have met such requirements at the close of such quarter for purposes of applying the preceding sentence.\nFor purposes of clause (i)(II), the period described in this clause is the period beginning on the first date that the failure to satisfy the requirements of subsection (b)(3) occurs as a result of the ownership of such assets and ending on the earlier of the date on which the corporation disposes of such assets or the end of the first quarter when there is no longer a failure to satisfy such subsection.\nFor purposes of subtitle F, a tax imposed by this subparagraph shall be treated as an excise tax with respect to which the deficiency procedures of such subtitle apply.\nIf the Securities and Exchange Commission determines, in accordance with regulations issued by it, and certifies to the Secretary not earlier than 60 days prior to the close of the taxable year of a management company or a business development company described in subsection (a)(1), that such investment company is principally engaged in the furnishing of capital to other corporations which are principally engaged in the development or exploitation of inventions, technological improvements, new processes, or products not previously generally available, such investment company may, in the computation of 50 percent of the value of its assets under subparagraph (A) of subsection (b)(3) for any quarter of such taxable year, include the value of any securities of an issuer, whether or not the investment company owns more than 10 percent of the outstanding voting securities of such issuer, the basis of which, when added to the basis of the investment company for securities of such issuer previously acquired, did not exceed 5 percent of the value of the total assets of the investment company at the time of the subsequent acquisition of securities. The preceding sentence shall not apply to the securities of an issuer if the investment company has continuously held any security of such issuer (or of any predecessor company of such issuer as determined under regulations prescribed by the Secretary) for 10 or more years preceding such quarter of such taxable year.\nThe provisions of this subsection shall not apply at the close of any quarter of a taxable year to an investment company if at the close of such quarter more than 25 percent of the value of its total assets is represented by securities of issuers with respect to each of which the investment company holds more than 10 percent of the outstanding voting securities of such issuer and in respect of each of which or any predecessor thereof the investment company has continuously held any security for 10 or more years preceding such quarter unless the value of its total assets so represented is reduced to 25 percent or less within 30 days after the close of such quarter.\nFor purposes of this subsection, unless the Securities and Exchange Commission determines otherwise, a corporation shall be considered to be principally engaged in the development or exploitation of inventions, technological improvements, new processes, or products not previously generally available, for at least 10 years after the date of the first acquisition of any security in such corporation or any predecessor thereof by such investment company if at the date of such acquisition the corporation or its predecessor was principally so engaged, and an investment company shall be considered at any date to be furnishing capital to any company whose securities it holds if within 10 years prior to such date it has acquired any of such securities, or any securities surrendered in exchange therefor, from such other company or predecessor thereof. For purposes of the certification under this subsection, the Securities and Exchange Commission shall have authority to issue such rules, regulations and orders, and to conduct such investigations and hearings, either public or private, as it may deem appropriate.\nThe terms used in this subsection shall have the same meaning as in subsections (b)(3) and (c) of this section.\nIn the case of a regulated investment company (within the meaning of subsection (a)) having more than one fund, each fund of such regulated investment company shall be treated as a separate corporation for purposes of this title (except with respect to the definitional requirement of subsection (a)).\nFor purposes of paragraph (1) the term “fund” means a segregated portfolio of assets, the beneficial interests in which are owned by the holders of a class or series of stock of the regulated investment company that is preferred over all other classes or series in respect of such portfolio of assets.\nFor purposes of this section, the term “qualified publicly traded partnership” means a publicly traded partnership described in section 7704(b) other than a partnership which would satisfy the gross income requirements of section 7704(c)(2) if qualifying income included only income described in subsection (b)(2)(A).\nThe Investment Company Act of 1940, as amended, referred to in subsecs. (a)(1), (b)(2)(A), (c)(6), and (f)(1), is title I of  act Aug. 22, 1940, ch. 686 ,  54 Stat. 789 , which is classified generally to subchapter I (§\u202f80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. Section 2(a)(36) of the Act is classified to  section 80a–2(a)(36) of Title 15 . For complete classification of this Act to the Code, see  section 80a–51 of Title 15  and Tables.\n2017—Subsec. (b).  Pub. L. 115–97  substituted “section 951(a)(1)(A)” for “section 951(a)(1)(A)(i)” in concluding provisions.\n2014—Subsec. (d)(2)(A).  Pub. L. 113–295  inserted “of this paragraph” after “subparagraph (B)(i)” in introductory provisions.\n2010—Subsec. (d).  Pub. L. 111–325, §\u202f201(a) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsec. (i).  Pub. L. 111–325, §\u202f201(b) , added subsec. (i).\n2004—Subsec. (b).  Pub. L. 108–357, §\u202f331(b) , inserted “(other than a qualified publicly traded partnership as defined in subsection (h))” after “derived from a partnership” in concluding provisions.\nSubsec. (b)(2).  Pub. L. 108–357, §\u202f331(a) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “at least 90 percent of its gross income is derived from dividends, interest, payments with respect to securities loans (as defined in section 512(a)(5)), and gains from the sale or other disposition of stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies; and”.\nSubsec. (b)(3)(B).  Pub. L. 108–357, §\u202f331(f) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “not more than 25 percent of the value of its total assets is invested in the securities (other than Government securities or the securities of other regulated investment companies) of any one issuer, or of two or more issuers which the taxpayer controls and which are determined, under regulations prescribed by the Secretary, to be engaged in the same or similar trades or businesses or related trades or businesses.”\nSubsec. (c)(5), (6).  Pub. L. 108–357, §\u202f331(c) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (h).  Pub. L. 108–357, §\u202f331(d) , added subsec. (h).\n1997—Subsec. (b).  Pub. L. 105–34, §\u202f1271(b)(1) , in concluding provisions, substituted “paragraph (2), amounts excludable” for “paragraphs (2) and (3), amounts excludable” and struck out “In the case of the taxable year in which a regulated investment company is completely liquidated, there shall not be taken into account under paragraph (3) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation.” at end.\nSubsec. (b)(2).  Pub. L. 105–34, §\u202f1271(a) , inserted “and” at end.\nSubsec. (b)(3), (4).  Pub. L. 105–34, §\u202f1271(a) , redesignated par. (4) as (3) and struck out former par. (3) which read as follows: “less than 30 percent of its gross income is derived from the sale or disposition of any of the following which was held for less than 3 months:\n“(A) stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended),\n“(B) options, futures, or forward contracts (other than options, futures, or forward contracts on foreign currencies), or\n“(C) foreign currencies (or options, futures, or forward contracts on foreign currencies) but only if such currencies (or options, futures, or forward contracts) are not directly related to the company’s principal business of investing in stock or securities (or options and futures with respect to stocks or securities), and”.\nSubsec. (c).  Pub. L. 105–34, §\u202f1271(b)(2) , substituted “subsection (b)(3)” for “subsection (b)(4)” in heading and introductory provisions.\nSubsec. (d).  Pub. L. 105–34, §\u202f1271(b)(3) , substituted “subsections (b)(3)” for “subsections (b)(4)”.\nSubsec. (e)(1).  Pub. L. 105–34, §\u202f1271(b)(4) , substituted “subsection (b)(3)” for “subsection (b)(4)”.\nSubsec. (e)(4).  Pub. L. 105–34, §\u202f1271(b)(5) , substituted “subsections (b)(3)” for “subsections (b)(4)”.\nSubsec. (g).  Pub. L. 105–34, §\u202f1271(b)(6) , redesignated subsec. (h) as (g) and struck out former subsec. (g) which provided for treatment of certain hedging transactions.\nSubsec. (g)(3).  Pub. L. 105–34, §\u202f1271(b)(7) , struck out par. (3) which provided special rule for abnormal redemptions.\nSubsec. (h).  Pub. L. 105–34, §\u202f1271(b)(6) , redesignated subsec. (h) as (g).\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1006(m)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “which, at all times during the taxable year, is registered under the Investment Company Act of 1940, as amended ( 15 U.S.C. 80a–1  to 80b–2), as a management company, business development company, or unit investment trust, or”.\nSubsec. (b).  Pub. L. 100–647, §\u202f1006(n)(1) , (5), inserted at end “Income derived from a partnership or trust shall be treated as described in paragraph (2) only to the extent such income is attributable to items of income of the partnership or trust (as the case may be) which would be described in paragraph (2) if realized by the regulated investment company in the same manner as realized by the partnership or trust. In the case of the taxable year in which a regulated investment company is completely liquidated, there shall not be taken into account under paragraph (3) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation.”\nPub. L. 100–647, §\u202f1006(n)(2)(B) , substituted “which are not directly related” for “which are not ancillary” in last sentence.\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1006(n)(2)(A) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “less than 30 percent of its gross income is derived from the sale or other disposition of stock or securities held for less than 3 months; and”.\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f1006(m)(2) , substituted “a management company or a business development company described in subsection (a)(1)” for “a registered management company or registered business development company”.\nSubsec. (g)(2)(A)(i).  Pub. L. 100–647, §\u202f1006(n)(4) , substituted “contractual obligation” for “contractual option”.\nSubsec. (h).  Pub. L. 100–647, §\u202f1006 ( o )(1), redesignated subsec. (q) as (h).\nSubsec. (h)(3).  Pub. L. 100–647, §\u202f1006 ( o )(2), added par. (3).\nSubsec. (q).  Pub. L. 100–647, §\u202f1006 ( o )(1), redesignated subsec. (q) as (h).\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f652(a) , substituted “as a management company, business development company, or unit investment trust” for “either as a management company or as a unit investment trust”.\nSubsec. (b).  Pub. L. 99–514, §\u202f1235(f)(3) , inserted “or 1293(a)” and “or 1293(c) (as the case may be)”, in concluding provision.\nPub. L. 99–514, §\u202f653(c) , inserted before last sentence “For purposes of paragraph (2), the Secretary may by regulation exclude from qualifying income foreign currency gains which are not ancillary to the company’s principal business of investing in stock or securities (or options and futures with respect to stock or securities).”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f653(b) , inserted “(as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies”.\nSubsec. (e)(1).  Pub. L. 99–514, §\u202f652(b) , substituted “registered management company or registered business development company” for “registered management company”.\nSubsec. (g).  Pub. L. 99–514, §\u202f653(a) , added subsec. (g).\nSubsec. (q).  Pub. L. 99–514, §\u202f654(a) , added subsec. (q).\n1984—Subsec. (a).  Pub. L. 98–369  struck out “(other than a personal holding company as defined in section 542)” after “any domestic corporation” in introductory provisions.\n1983—Subsec. (b).  Pub. L. 97–424  substituted “section 103(a)” for “section 103(a)(1)” after “gross income under”.\n1978—Subsec. (b).  Pub. L. 95–600  required that for purposes of pars. (2) and (3), amounts excludable from gross income under section 103(a)(1) shall be treated as included in gross income.\nSubsec. (b)(2).  Pub. L. 95–345  inserted provision relating to payments with respect to securities loans.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1901(a)(109)(A) , struck out “ 54 Stat. 789 ;” before “ 15 U.S.C. 80a–1  to 80b–2)”.\nSubsec. (b)(1), (4)(B).  Pub. L. 94–455, §\u202f1901(a)(109)(B) , struck out “which began after  December 31, 1941 ” after “previous taxable year” in par. (1), and “or his delegate” after “Secretary” in par. (4)(B).\nSubsecs. (c), (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\n1975—Subsec. (b).  Pub. L. 94–12  inserted provisions directing that, for purposes of par. (2), there shall be treated as dividends amounts included in gross income under section 951(a)(1)(A)(i) for the taxable year to the extent that, under section 959(a)(1), there is a distribution out of earnings and profits of the taxable year which are attributable to the amounts so included.\n1969—Subsec. (f).  Pub. L. 91–172  added subsec. (f).\n1958—Subsec. (e)(1).  Pub. L. 85–866, §\u202f38(a) , substituted “not earlier than 60 days” for “not less than 60 days” in first sentence.\nSubsec. (e)(2).  Pub. L. 85–866, §\u202f38(b) , substituted “issuer” for “issues”.\nPub. L. 115–97, title I, §\u202f14212(c) ,  Dec. 22, 2017 ,  131 Stat. 2217 , provided that:  “The amendments made by this section [amending this section and sections 951, 952, 953, 964, and 970 of this title and repealing  section 955 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.”\nAmendment by  Pub. L. 113–295  effective as if included in the provision of the Regulated Investment Company Modernization Act of 2010,  Pub. L. 111–325 , to which such amendment relates, with savings provision in certain cases of an election by a regulated investment company under  section 852(b)(8) of this title , see  section 205(f) of Pub. L. 113–295 , set out as a note under  section 852 of this title .\nPub. L. 111–325, title II, §\u202f201(d) ,  Dec. 22, 2010 ,  124 Stat. 3541 , provided that:  “The amendments made by this section [amending this section and  section 852 of this title ] shall apply to taxable years with respect to which the due date (determined with regard to any extensions) of the return of tax for such taxable year is after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Oct. 22, 2004 , see  section 331(h) of Pub. L. 108–357 , set out as a note under  section 469 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning after  Aug. 5, 1997 , see  section 1271(c) of Pub. L. 105–34 , set out as a note under  section 817 of this title .\nPub. L. 100–647, title I, §\u202f1006(n)(2)(C) ,  Nov. 10, 1988 ,  102 Stat. 3415 , provided that:  “Subparagraph (C) of section 851(b)(3) of the 1986 Code (as amended by subparagraph (A)), and the amendment made by subparagraph (B) [amending this section], shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by section 1006(m), (n)(1), (2)(A), (4), (5), ( o ) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f652(c) ,  Oct. 22, 1986 ,  100 Stat. 2297 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title VI, §\u202f653(d) ,  Oct. 22, 1986 ,  100 Stat. 2298 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title VI, §\u202f654(b) ,  Oct. 22, 1986 ,  100 Stat. 2298 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(2)   Treatment of certain existing series funds .— In the case of a regulated investment company which has more than one fund on the date of the enactment of this act, and has before such date been treated for Federal income tax purposes as a single corporation— “(A)  the amendment made by subsection (a), and the resulting treatment of each fund as a separate corporation, shall not give rise to the realization or recognition of income or loss by such regulated investment company, its funds, or its shareholders, and \n \n “(B)  the tax attributes of such regulated investment company shall be appropriately allocated among its funds.”\nAmendment by  section 1235(f)(3) of Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as an Effective Date note under  section 1291 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1982 , with certain exceptions, see  section 1071(a)(5) of Pub. L. 98–369 , set out as a note under  section 852 of this title .\nPub. L. 95–600, title VII, §\u202f701(s)(3) ,  Nov. 6, 1978 ,  92 Stat. 2911 , provided that:  “The amendments made by this section [amending this section and  section 852 of this title ] shall apply to taxable years beginning after  December 31, 1975 .”\nAmendment by  Pub. L. 95–345  applicable with respect to amounts received after  Dec. 31, 1976 , as payments with respect to securities loans (as defined in  section 512(a)(5) of this title ), and transfers of securities, under agreements described in  section 1058 of this title , occurring after such date, see  section 2(e) of Pub. L. 95–345 , set out as a note under  section 509 of this title .\nAmendment by  section 1901(a)(109) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1975 , and to taxable years of United States shareholders (within the meaning of  section 951(b) of this title ) within which or with which such taxable years of such foreign corporations end, see  section 602(f) of Pub. L. 94–12 , set out as an Effective Date note under  section 954 of this title .\nPub. L. 91–172, title IX, §\u202f908(b) ,  Dec. 30, 1969 ,  83 Stat. 718 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years of unit investment trusts ending after  December 31, 1968 , and to taxable years of holders of interests in such trusts ending with or within such taxable years of such trusts. The enactment of this section shall not be construed to result in the realization of gain or loss by any unit investment trust or by any holder of an interest in a unit investment trust.”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATED INVESTMENT COMPANIES'},
  'content': 'There is hereby imposed for each taxable year upon the investment company taxable income of every regulated investment company a tax computed as provided in section 11, as though the investment company taxable income were the taxable income referred to in section 11.\nThere is hereby imposed for each taxable year in the case of every regulated investment company a tax, determined as provided in section 11(b), on the excess, if any, of the net capital gain over the deduction for dividends paid (as defined in section 561) determined with reference to capital gain dividends only.\nA capital gain dividend shall be treated by the shareholders as a gain from the sale or exchange of a capital asset held for more than 1 year.\nExcept as provided in clause (ii), a capital gain dividend is any dividend, or part thereof, which is reported by the company as a capital gain dividend in written statements furnished to its shareholders.\nExcept as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported capital gain dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported capital gain dividend amount bears to the aggregate reported amount.\nIn the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting “post-December reported amount” for “aggregate reported amount” and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.\nThe term “reported capital gain dividend amount” means the amount reported to its shareholders under clause (i) as a capital gain dividend.\nThe term “excess reported amount” means the excess of the aggregate reported amount over the net capital gain of the company for the taxable year.\nThe term “aggregate reported amount” means the aggregate amount of dividends reported by the company under clause (i) as capital gain dividends for the taxable year (including capital gain dividends paid after the close of the taxable year described in section 855).\nThe term “post-December reported amount” means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.\nIf there is an increase in the excess described in subparagraph (A) for the taxable year which results from a determination (as defined in section 860(e)), the company may, subject to the limitations of this subparagraph, increase the amount of capital gain dividends reported under clause (i).\nTo the extent provided in regulations, subparagraphs (A) and (B) shall not apply to losses incurred on the sale or exchange of shares of stock in a regulated investment company pursuant to a plan which provides for the periodic liquidation of such shares.\nExcept as otherwise provided by regulations, subparagraph (B) shall not apply with respect to a regular dividend paid by a regulated investment company which declares exempt-interest dividends on a daily basis in an amount equal to at least 90 percent of its net tax-exempt interest and distributes such dividends on a monthly or more frequent basis.\nIn the case of a regulated investment company (other than a company described in clause (i)) which regularly distributes at least 90 percent of its net tax-exempt interest, the Secretary may by regulations prescribe that subparagraph (B) (and subparagraph (C) to the extent it relates to subparagraph (B)) shall be applied on the basis of a holding period requirement shorter than 6 months; except that such shorter holding period requirement shall not be shorter than the greater of 31 days or the period between regular distributions of exempt-interest dividends.\nExcept as provided in clause (ii), an exempt-interest dividend is any dividend or part thereof (other than a capital gain dividend) paid by a regulated investment company and reported by the company as an exempt-interest dividend in written statements furnished to its shareholders.\nExcept as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported exempt-interest dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported exempt-interest dividend amount bears to the aggregate reported amount.\nIn the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting “post-December reported amount” for “aggregate reported amount” and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.\nThe term “reported exempt-interest dividend amount” means the amount reported to its shareholders under clause (i) as an exempt-interest dividend.\nThe term “excess reported amount” means the excess of the aggregate reported amount over the exempt interest of the company for the taxable year.\nThe term “aggregate reported amount” means the aggregate amount of dividends reported by the company under clause (i) as exempt-interest dividends for the taxable year (including exempt-interest dividends paid after the close of the taxable year described in section 855).\nThe term “post-December reported amount” means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.\nThe term “exempt interest” means, with respect to any regulated investment company, the excess of the amount of interest excludable from gross income under section 103(a) over the amounts disallowed as deductions under sections 265 and 171(a)(2).\nSection 311(b) shall not apply to any distribution by a regulated investment company to which this part applies, if such distribution is in redemption of its stock upon the demand of the shareholder.\nExcept as otherwise provided by the Secretary, a regulated investment company may elect for any taxable year to treat any portion of any qualified late-year loss for such taxable year as arising on the first day of the following taxable year for purposes of this title.\nFor purposes of this paragraph, the term “late-year ordinary loss” means the sum of any post-October specified loss and any post-December ordinary loss.\nThe earnings and profits of a regulated investment company for any taxable year (but not its accumulated earnings and profits) shall not be reduced by any amount which is not allowable as a deduction (other than by reason of section 265 or 171(a)(2)) in computing its taxable income for such taxable year.\nClause (i) shall not apply to a net capital loss to which subparagraph (A) applies.\nFor purposes of this subsection, the term “regulated investment company” includes a domestic corporation which is a regulated investment company determined without regard to the requirements of subsection (a).\nAny qualified designated distribution shall not be included in the amount of dividends paid for purposes of computing the dividends paid deduction for any taxable year.\nAny interest payable under subparagraph (A) may be assessed and collected at any time during the period during which any tax imposed for the taxable year in which the determination is made may be assessed and collected.\nThe provisions of this subsection shall not apply if the determination contains a finding that the failure to meet any requirement of this part was due to fraud with intent to evade tax.\nFor purposes of this subsection, the term “determination” has the meaning given to such term by section 860(e). Such term also includes a determination by the investment company filed with the Secretary that the provisions of this part do not apply to the investment company for a taxable year.\nThe term “load charge” means any sales or similar charge incurred by a person in acquiring stock of a regulated investment company. Such term does not include any charge incurred by reason of the reinvestment of a dividend.\nThe term “reinvestment right” means any right to acquire stock of 1 or more regulated investment companies without the payment of a load charge or with the payment of a reduced charge.\nIf the taxpayer acquires stock in a regulated investment company from another person in a transaction in which gain or loss is not recognized, the taxpayer shall succeed to the treatment of such other person under this subsection.\nFor purposes of this subsection, the term “qualified fund of funds” means a regulated investment company if (at the close of each quarter of the taxable year) at least 50 percent of the value of its total assets is represented by interests in other regulated investment companies.\nThe Investment Company Act of 1940, referred to in subsec. (d), is title I of  act Aug. 22, 1940, ch. 686 ,  54 Stat. 789 , which is classified generally to subchapter I (§\u202f80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 80a–51 of Title 15  and Tables.\n2018—Subsec. (a)(1)(B).  Pub. L. 115–141, §\u202f401(a)(144) , substituted “265 and” for “265,”.\nSubsec. (b)(2)(D).  Pub. L. 115–141, §\u202f401(a)(145) , substituted “The deduction” for “the deduction”.\n2017—Subsec. (b)(1).  Pub. L. 115–97, §\u202f13001(b)(4) , struck out “In the case of a regulated investment company which is a personal holding company (as defined in section 542) or which fails to comply for the taxable year with regulations prescribed by the Secretary for the purpose of ascertaining the actual ownership of its stock, such tax shall be computed at the highest rate of tax specified in section 11(b).” at end.\nSubsec. (b)(3)(A).  Pub. L. 115–97, §\u202f13001(b)(2)(J) , substituted “section 11(b)” for “section 1201(a)”.\n2014—Subsec. (b)(8)(C) to (G).  Pub. L. 113–295, §\u202f205(c)(1) , added subpars. (C) to (F), redesignated former subpar. (E) as (G), and struck out former subpars. (C) and (D) which related to post-October capital loss and late-year ordinary loss, respectively.\nSubsec. (b)(8)(G)(i).  Pub. L. 113–295, §\u202f205(c)(2) , substituted “and (E)” for “,\u2000(D)(i)(I), and (D)(ii)(I)”.\nSubsec. (c)(2).  Pub. L. 113–295, §\u202f205(c)(3) , in introductory provisions, substituted “,\u2000without regard to any capital loss” for “,\u2000and without regard to any capital loss” and inserted “,\u2000and with such other adjustments as the Secretary may prescribe” after “section 1212(a)(3)(A)”.\nPub. L. 113–295, §\u202f205(a)(2) , in introductory provisions, substituted “October 31, without regard to” for “October 31 and without regard to” and inserted “,\u2000and without regard to any capital loss arising on the first day of the taxable year by reason of clauses (ii) and (iii) of section 1212(a)(3)(A)” after “subsection (b)(8)(D))”.\n2010—Subsec. (b)(2)(G).  Pub. L. 111–325, §\u202f201(c) , added subpar. (G).\nSubsec. (b)(3)(C).  Pub. L. 111–325, §\u202f301(a)(1) , amended subpar. (C) generally. Prior to amendment, subpar. (C) related to definition of capital gain dividend.\nSubsec. (b)(4)(E).  Pub. L. 111–325, §\u202f309(a) , (b), substituted “Exception to holding period requirement for certain regularly declared exempt-interest dividends” for “Authority to shorten required holding period” in heading, added cl. (i), inserted cl. (ii) designation and heading before “In the case of”, and inserted “(other than a company described in clause (i))” after “regulated investment company”.\nSubsec. (b)(5)(A).  Pub. L. 111–325, §\u202f301(b) , amended subpar. (A) generally. Prior to amendment, text read as follows: “An exempt-interest dividend means any dividend or part thereof (other than a capital gain dividend) paid by a regulated investment company and designated by it as an exempt-interest dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including exempt-interest dividends paid after the close of the taxable year as described in section 855) is greater than the excess of—\n“(i) the amount of interest excludable from gross income under section 103(a), over\n“(ii) the amounts disallowed as deductions under sections 265 and 171(a)(2),\nthe portion of such distribution which shall constitute an exempt-interest dividend shall be only that proportion of the amount so designated as the amount of such excess for such taxable year bears to the amount so designated.”\nSubsec. (b)(8).  Pub. L. 111–325, §\u202f308(a) , amended par. (8) generally. Prior to amendment, text read as follows: “To the extent provided in regulations, the taxable income of a regulated investment company (other than a company to which an election under section 4982(e)(4) applies) shall be computed without regard to any net foreign currency loss attributable to transactions after October 31 of such year, and any such net foreign currency loss shall be treated as arising on the 1st day of the following taxable year.”\nSubsec. (b)(10).  Pub. L. 111–325, §\u202f308(b)(1) , struck out par. (10). Text read as follows: “To the extent provided in regulations, the taxable income of a regulated investment company (other than a company to which an election under section 4982(e)(4) applies) shall be computed without regard to any net reduction in the value of any stock of a passive foreign investment company with respect to which an election under section 1296(k) is in effect occurring after October 31 of the taxable year, and any such reduction shall be treated as occurring on the first day of the following taxable year.”\nSubsec. (c)(1).  Pub. L. 111–325, §\u202f302(a) , amended par. (1) generally. Prior to amendment, text read as follows: “The earnings and profits of a regulated investment company for any taxable year (but not its accumulated earnings and profits) shall not be reduced by any amount which is not allowable as a deduction in computing its taxable income for such taxable year. For purposes of this subsection, the term ‘regulated investment company’ includes a domestic corporation which is a regulated investment company determined without regard to the requirements of subsection (a).”\nSubsec. (c)(2).  Pub. L. 111–325, §\u202f308(b)(2) , in introductory provisions, substituted “For purposes of applying this chapter to distributions made by a regulated investment company with respect to any calendar year, the earnings and profits of such company shall be determined without regard to any net capital loss attributable to the portion of the taxable year after October 31 and without regard to any late-year ordinary loss (as defined in subsection (b)(8)(D)).” for “For purposes of applying this chapter to distributions made by a regulated investment company with respect to any calendar year, the earnings and profits of such company shall be determined without regard to any net capital loss (or net foreign currency loss) attributable to transactions after October 31 of such year, without regard to any net reduction in the value of any stock of a passive foreign investment company with respect to which an election under section 1296(k) is in effect occurring after October 31 of such year, and with such other adjustments as the Secretary may by regulations prescribe.”\nSubsec. (c)(4).  Pub. L. 111–325, §\u202f302(b)(1) , added par. (4).\nSubsec. (f)(1)(C).  Pub. L. 111–325, §\u202f502(a) , substituted “acquires, during the period beginning on the date of the disposition referred to in subparagraph (B) and ending on January 31 of the calendar year following the calendar year that includes the date of such disposition,” for “subsequently acquires”.\nSubsec. (g).  Pub. L. 111–325, §\u202f303(a) , added subsec. (g).\n2007—Subsec. (b)(4)(C).  Pub. L. 110–172  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the rules of paragraphs (3) and (4) of section 246(c) shall apply in determining the period for which the taxpayer has held any share of stock; except that ‘6 months’ shall be substituted for each number of days specified in subparagraph (B) of section 246(c)(3).”\n2006—Subsec. (b)(3)(E).  Pub. L. 109–222  added subpar. (E).\n1999—Subsec. (c)(3).  Pub. L. 106–170, §\u202f566(a)(1) , added par. (3).\nSubsec. (e)(1).  Pub. L. 106–170, §\u202f566(c) , inserted at end “If the determination under subparagraph (A) is solely as a result of the failure to meet the requirements of subsection (a)(2), the preceding sentence shall also apply for purposes of applying subsection (a)(2) to the non-RIC year and the amount referred to in paragraph (2)(A)(i) shall be the portion of the accumulated earnings and profits which resulted in such failure.”\n1997—Subsec. (b)(3)(D)(iii).  Pub. L. 105–34, §\u202f1254(b)(2) , substituted “by the difference between the amount of such includible gains and the tax deemed paid by such shareholder in respect of such shares under clause (ii).” for “by 65 percent of so much of such amounts as equals the amount subject to tax in accordance with section 1201(a).”\nSubsec. (b)(10).  Pub. L. 105–34, §\u202f1122(c)(2) , added par. (10).\nSubsec. (c)(2).  Pub. L. 105–34, §\u202f1122(c)(3) , inserted “,\u2000without regard to any net reduction in the value of any stock of a passive foreign investment company with respect to which an election under section 1296(k) is in effect occurring after October 31 of such year,” after “October 31 of such year”.\n1996—Subsec. (b)(5)(C).  Pub. L. 104–188  struck out subpar. (C). Prior to amendment, subpar. (C) read as follows:\n“(C)  Interest on certain loans used to acquire employer securities .—For purposes of this section—\n“(i) 50 percent of the amount of any loan of the regulated investment company which qualifies as a securities acquisition loan (as defined in section 133) shall be treated as an obligation described in section 103(a), and\n“(ii) 50 percent of the interest received on such loan shall be treated as interest excludable from gross income under section 103.”\n1993—Subsec. (b)(3)(D)(iii).  Pub. L. 103–66  substituted “65 percent” for “66 percent”.\n1989—Subsec. (b)(9).  Pub. L. 101–239, §\u202f7204(c)(1) , added par. (9).\nSubsec. (f).  Pub. L. 101–239, §\u202f7204(b)(1) , added subsec. (f).\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1006 ( l )(8), inserted at end “The Secretary may waive the requirements of paragraph (1) for any taxable year if the regulated investment company establishes to the satisfaction of the Secretary that it was unable to meet such requirements by reason of distributions previously made to meet the requirements of section 4982.”\nSubsec. (b)(3)(C).  Pub. L. 100–647, §\u202f1006 ( l )(4), substituted “net capital loss or net long-term capital loss” for “net capital loss” in two places in third sentence, and “computing the taxable income of the regulated investment company” for “computing regulated investment company taxable income” in fourth sentence.\nSubsec. (b)(5)(C).  Pub. L. 100–647, §\u202f1011B(h)(4) , substituted “section” for “paragraph”.\nSubsec. (b)(6).  Pub. L. 100–647, §\u202f1006 ( l )(1)(A), redesignated par. (6), relating to time certain dividends are taken into account, as (7).\nSubsec. (b)(7).  Pub. L. 100–647, §\u202f1006 ( l )(9), substituted “in October, November, or December” for “in December” and “in such a month” for “in such month”, in introductory text, “on December 31 of such calendar year” for “on such date” in subpars. (A) an (B), and “during January” for “before February 1” in last sentence.\nPub. L. 100–647, §\u202f1006 ( l )(1)(A), redesignated par. (6), relating to time certain dividends are taken into account, as (7).\nSubsec. (b)(8).  Pub. L. 100–647, §\u202f1006 ( l )(7), added par. (8).\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f1006 ( l )(3), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “A regulated investment company shall be treated as having sufficient earnings and profits to treat as a dividend any distribution (other than in a redemption to which section 302(a) applies) which is treated as a dividend by such company. The preceding sentence shall not apply to the extent that the amount distributed during any calendar year by the company exceeds the required distribution for such calendar year (as determined under section 4982).”\nSubsec. (e)(1).  Pub. L. 100–647 , §§\u202f1006( l )(10), 1018(p), amended par. (1) identically, substituting “subsection (a)(2)” for “subsection (a)(3)” in last sentence.\n1986—Subsec. (a)(2), (3).  Pub. L. 99–514, §\u202f1878(j)(1) , redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “the investment company complies for such year with regulations prescribed by the Secretary for the purpose of ascertaining the actual ownership of its outstanding stock, and”.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1878(j)(2) , substituted last sentence for former last sentence which read as follows: “In the case of a regulated investment company which is a personal holding company (as defined in section 542), that tax shall be computed at the highest rate of tax specified in section 11(b).”\nSubsec. (b)(3)(C).  Pub. L. 99–514, §\u202f655(a)(1) , substituted “60 days” for “45 days”.\nPub. L. 99–514, §\u202f651(b)(3) , inserted provision for determination of the amount of the net capital gain for a taxable year (to which an election under section 4982(e)(4) does not apply) and made such provision applicable also for purposes of computing regulated investment company taxable income.\nSubsec. (b)(3)(D)(i).  Pub. L. 99–514, §\u202f655(a)(1) , substituted “60 days” for “45 days”.\nSubsec. (b)(3)(D)(iii).  Pub. L. 99–514, §\u202f311(b)(1) , substituted “66 percent” for “72 percent”.\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1804(c)(5) , substituted “6 months or less” for “less than 31 days” in heading.\nSubsec. (b)(4)(B)(ii).  Pub. L. 99–514, §\u202f1804(c)(1) , substituted “6 months or less” for “less than 31 days”.\nSubsec. (b)(4)(C).  Pub. L. 99–514, §\u202f1804(c)(2) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “For purposes of this paragraph, the rules of paragraphs (3) and (4) of section 246(c) shall apply in determining the period for which the taxpayer held any share of stock; except that for the number of days specified in subparagraph (B) of section 246(c)(3) there shall be substituted—\n“(i) ‘6 months’ for purposes of subparagraph (A), and\n“(ii) ‘30 days’ for purposes of subparagraph (B).”\nSubsec. (b)(4)(D).  Pub. L. 99–514, §\u202f1804(c)(3) , substituted “subparagraphs (A) and (B)” for “subparagraph (A)”.\nSubsec. (b)(4)(E).  Pub. L. 99–514, §\u202f1804(c)(4) , added subpar. (E).\nSubsec. (b)(5)(A).  Pub. L. 99–514, §\u202f655(a)(2) , substituted “60 days” for “45 days”.\nSubsec. (b)(5)(C).  Pub. L. 99–514, §\u202f1173(b)(1)(B) , added subpar. (C).\nSubsec. (b)(6).  Pub. L. 99–514, §\u202f651(b)(1)(A) , added par. (6) relating to time certain dividends are taken into account.\nPub. L. 99–514, §\u202f631(e)(11) , added par. (6) relating to inapplicability of section 311(b) to certain distributions.\nSubsec. (c).  Pub. L. 99–514, §\u202f651(b)(2) , amended subsec. (c) generally, designating existing provisions as par. (1), inserting heading, and adding par. (2).\nSubsec. (e)(3)(A).  Pub. L. 99–514, §\u202f1511(c)(6) , substituted “the underpayment rate established under section 6621” for “the annual rate established under section 6621”.\n1984—Subsec. (a)(3).  Pub. L. 98–369, §\u202f1071(a)(3) , added par. (3).\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f1071(a)(2) , inserted provision that in the case of a regulated investment company which is a personal holding company (as defined in section 542), that tax shall be computed at the highest rate of tax specified in section 11.\nSubsec. (b)(2)(F).  Pub. L. 98–369, §\u202f1071(b)(1) , added subpar. (F).\nSubsec. (b)(3)(B).  Pub. L. 98–369, §\u202f1001(b)(11) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (b)(4)(A)(i).  Pub. L. 98–369, §\u202f55(a)(1) , substituted “subparagraph (B) or (D) of paragraph (3) provides that any amount with respect to any share is to be treated as long-term capital gain” for “under subparagraph (B) or (D) of paragraph (3) a shareholder of a regulated investment company is required, with respect to any share, to treat any amount as a long-term capital gain”.\nSubsec. (b)(4)(A)(ii).  Pub. L. 98–369, §\u202f55(a)(1) , substituted “6 months or less” for “less than 31 days”.\nSubsec. (b)(4)(C).  Pub. L. 98–369, §\u202f55(a)(2) , substituted “the rules of paragraphs (3) and (4) of section 246(c) shall apply in determining the period for which the taxpayer held any share of stock;” for “the rules of section 246(c)(3) shall apply in determining whether any share of stock has been held for less than 31 days;” and substituted provisions dealing with the applicable number of days for former provisions which set forth different applicable days.\nSubsec. (b)(4)(D).  Pub. L. 98–369, §\u202f55(a)(3) , added subpar. (D).\nSubsec. (e).  Pub. L. 98–369, §\u202f1071(a)(4) , added subsec. (e).\n1983—Subsec. (b)(5).  Pub. L. 97–424  substituted “section 103(a)” for “section 103(a)(1)” wherever appearing.\n1980—Subsec. (b)(3)(D)(iii).  Pub. L. 96–222  substituted “72 percent” for “70 percent”.\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f301(b)(11) , substituted “a tax” for “a normal tax and surtax”.\nSubsec. (b)(3)(C).  Pub. L. 95–600, §\u202f362(c) , inserted “,\u2000except that, if there is an increase in the excess described in subparagraph (A) of this paragraph for such year which results from a determination (as defined in section 860(e)), such designation may be made with respect to such increase at any time before the expiration of 120 days after the date of such determination” after “amount so designated”.\nSubsec. (b)(4).  Pub. L. 95–600, §\u202f701(s)(2) , designated first sentence, including subpars. (A) and (B), as subpar. (A), cls. (i) and (ii); added subpar. (A) heading and substituted “shall, to the extent of the amount described in clause (i), be treated as a long-term capital loss” for “shall, to the extent of the amount described in subparagraph (A) of this paragraph, be treated as loss from the sale or exchange of a capital asset held for more than 1 year”; added subpar. (B); and designated second sentence as subpar. (C).\n1976—Subsec. (a)(1).  Pub. L. 94–455 , §§\u202f1901(b)(6)(B), 2137(a), designated existing provisions as introductory material and subpar. (A) and added subpar. (B).\nSubsec. (a)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1901(b)(1)(V) , struck out provision relating to the computation of the normal tax under  section 11 of this title .\nSubsec. (b)(2)(A).  Pub. L. 94–455, §\u202f1901(b)(33)(I) , substituted “the amount of the net capital gain, if any” for “the excess, if any, of the net long-term capital gain over the short-term capital loss”.\nSubsec. (b)(2)(D).  Pub. L. 94–455, §\u202f2137(b) , inserted reference to exempt-interest dividends.\nSubsec. (b)(3)(A).  Pub. L. 94–455, §\u202f1901(b)(33)(J)(i) , among other changes, struck out reference to the sum of the net short-term capital loss.\nSubsec. (b)(3)(B).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(N) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (b)(3)(C).  Pub. L. 94–455, §\u202f1901(a)(110)(A) , (b)(33)(J)(ii), substituted “net capital gain” for “excess of the net long-term capital gain over the net short-term capital loss” in two places and struck out provision requiring for purpose of the deduction for capital gains dividends paid, the deductions shall in the case of a taxable year beginning before  Jan. 1, 1975 , first be made from the amount subject to tax in accordance with section 1201(a)(1)(B), to the extent thereof, and then from the amount subject to tax in accordance with section 1201(a)(1)(A).\nSubsec. (b)(3)(D)(iii).  Pub. L. 94–455, §\u202f1901(a)(110)(B)(i) , struck out “by 75 percent of so much of such amounts as equals the amount subject to tax in accordance with section 1201(a)(1)(A) and” after “his long term capital gains,” and “(72 percent in the case of a taxable year beginning after  December 31, 1969 , and before  January 1, 1971 )” after “by 70 percent” and substituted “section 1201(a)” for “section 1201(a)(1)(B) or (2)”.\nSubsec. (b)(3)(D)(v).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(4).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(N) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f2137(c) , added par. (5).\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(a)(110)(C) , (b)(33)(N), inserted in par. (1) “( 15 U.S.C. 80a–1  and following)” after “Investment company Act of 1940” and substituted in provision following par. (2) “capital gain net income” for “net capital gain”.\n1969—Subsec. (b)(3)(A).  Pub. L. 91–172, §\u202f511(c)(2)(A) , substituted “determined as provided in section 1201(a), on” for “of 25 percent of”.\nSubsec. (b)(3)(C).  Pub. L. 91–172, §\u202f511(c)(2)(B) , inserted provision requiring for the purposes of the deduction for capital gains dividends paid the deduction shall, in the case of a taxable year beginning before  Jan. 1, 1975 , first be made from the amount subject to tax in accordance with section 1201(a)(1)(B), to the extent thereof, and then from the amount subject to tax in accordance with section 1201(a)(1)(A).\nSubsec. (b)(3)(D).  Pub. L. 91–172, §\u202f511(c)(2)(C) , (D), struck out “of 25 percent” in cl. (ii), substituted reference in cl. (iii) to the increase of the adjusted basis of shares in the hands of the shareholder, with respect to the amounts required by this subpar., by 75 percent of so much of such amounts as equals the amount subject to tax in accordance with section 1201(a)(1)(A) and by 70 percent (72 percent in the case of a taxable year beginning after  Dec. 31, 1969 , and before  Jan. 1, 1971 ) of so much of such amounts as equals the amount subject to tax in accordance with section 1201(a)(1)(B) or (2), for reference to the increase of the adjusted basis of shares in the hand of the shareholder by 75 percent of the amounts required by this subpar. to be included in computing his long-term capital gains.\n1964—Subsec. (b)(3)(C), (D)(i).  Pub. L. 88–272, §\u202f229(a)(1) , (2), substituted “45 days” for “30 days”.\nSubsec. (d).  Pub. L. 88–272, §\u202f229(b) , added subsec. (d).\n1960—Subsec. (a).  Pub. L. 86–779, §\u202f10(b)(2) , substituted “this part” for “this subchapter”.\nSubsec. (b)(3)(C).  Pub. L. 86–779, §\u202f10(b)(3) , substituted “For purposes of this part, a capital gain dividend is” for “A capital gain dividend means”.\n1958—Subsec. (a).  Pub. L. 85–866, §\u202f101(a) , inserted “(other than subsection (c) of this section)”.\nSubsec. (b)(4).  Pub. L. 85–866, §\u202f39(a) , added par. (4).\nSubsec. (c).  Pub. L. 85–866, §\u202f101(b) , inserted sentence defining regulated investment company.\n1956—Subsec. (b)(3)(D). Act  July 11, 1956 , added subpar. (D).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 113–295, div. A, title II, §\u202f205(f) ,  Dec. 19, 2014 ,  128 Stat. 4027 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section, sections 851, 855, and 4982 of this title, and provisions set out as a note under  section 1212 of this title ] shall take effect as if included in the provision of the Regulated Investment Company Modernization Act of 2010 [ Pub. L. 111–325 ] to which they relate. \n \n “(2)   Savings provision .— In the case of an election by a regulated investment company under section 852(b)(8) of the Internal Revenue Code of 1986 with respect to any taxable year beginning before the date of the enactment of this Act [ Dec. 19, 2014 ], such company may treat the amendments made by paragraphs (1) and (2) of subsection (c) [amending this section] as not applying with respect to any such election.”\nAmendment by  section 201(c) of Pub. L. 111–325  applicable to taxable years with respect to which the due date (determined with regard to any extensions) of the return of tax for such taxable year is after  Dec. 22, 2010 , see  section 201(d) of Pub. L. 111–325 , set out as a note under  section 851 of this title .\nPub. L. 111–325, title III, §\u202f301(h) ,  Dec. 22, 2010 ,  124 Stat. 3547 , provided that:  “The amendments made by this section [amending this section and sections 853, 853A, 854, 855, 860, and 871 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nPub. L. 111–325, title III, §\u202f302(c) ,  Dec. 22, 2010 ,  124 Stat. 3548 , provided that:  “The amendments made by this section [amending this section and  section 871 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nPub. L. 111–325, title III, §\u202f303(b) ,  Dec. 22, 2010 ,  124 Stat. 3548 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nPub. L. 111–325, title III, §\u202f308(c) ,  Dec. 22, 2010 ,  124 Stat. 3551 , provided that:  “The amendments made by this section [amending this section and  section 871 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nPub. L. 111–325, title III, §\u202f309(c) ,  Dec. 22, 2010 ,  124 Stat. 3552 , provided that:  “The amendments made by this section [amending this section] shall apply to losses incurred on shares of stock for which the taxpayer’s holding period begins after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nPub. L. 111–325, title V, §\u202f502(b) ,  Dec. 22, 2010 ,  124 Stat. 3555 , provided that:  “The amendment made by this section [amending this section] shall apply to charges incurred in taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nPub. L. 109–222, title V, §\u202f505(d) ,  May 17, 2006 ,  120 Stat. 357 , provided that:  “The amendments made by this section [amending this section and sections 871, 897, and 1445 of this title] shall apply to taxable years of qualified investment entities beginning after  December 31, 2005 , except that no amount shall be required to be withheld under section 1441, 1442, or 1445 of the Internal Revenue Code of 1986 with respect to any distribution before the date of the enactment of this Act [ May 17, 2006 ] if such amount was not otherwise required to be withheld under any such section as in effect before such amendments.”\nPub. L. 106–170, title V, §\u202f566(d) ,  Dec. 17, 1999 ,  113 Stat. 1950 , provided that:  “The amendments made by this section [amending this section and  section 857 of this title ] shall apply to distributions after  December 31, 2000 .”\nAmendment by section 1122(c)(2), (3) of  Pub. L. 105–34  applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as a note under  section 532 of this title .\nPub. L. 105–34, title XII, §\u202f1263 ,  Aug. 5, 1997 ,  111 Stat. 1036 , provided that:  “The amendments made by this part [probably means subtitle D (§§\u202f1251–1263) of title XII of  Pub. L. 105–34 , amending this section and sections 856 and 857 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 1602(b)(1) of Pub. L. 104–188  applicable to loans made after  Aug. 20, 1996 , with exception and provisions relating to certain refinancings, see  section 1602(c) of Pub. L. 104–188 , set out as an Effective Date of Repeal note under former  section 133 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning on or after  Jan. 1, 1993 , see  section 13221(d) of Pub. L. 103–66  set out as a note under  section 11 of this title .\nPub. L. 101–239, title VII, §\u202f7204(b)(2) ,  Dec. 19, 1989 ,  103 Stat. 2335 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to charges incurred after  October 3, 1989 , in taxable years ending after such date.”\nPub. L. 101–239, title VII, §\u202f7204(c)(2) ,  Dec. 19, 1989 ,  103 Stat. 2335 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to dividends in cases where the stock becomes ex-dividend after the date of the enactment of this Act [ Dec. 19, 1989 ].”\nPub. L. 100–647, title I, §\u202f1006 ( l )(9),  Nov. 10, 1988 ,  102 Stat. 3414 , provided that the amendment made by that section is effective with respect to dividends declared in 1988 and subsequent calendar years.\nAmendment by sections 1006( l )(1)(A), (3), (4), (7), (8), (10), 1011B(h)(4), and 1018(p) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 311(b)(1) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 311(c) of Pub. L. 99–514 , set out as a note under  section 593 of this title .\nAmendment by  section 631(e)(11) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by section 651(b)(1)(A), (2), (3) of  Pub. L. 99–514  applicable to calendar years beginning after  Dec. 31, 1986 , see  section 651(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 4982 of this title .\nPub. L. 99–514, title VI, §\u202f655(b) ,  Oct. 22, 1986 ,  100 Stat. 2299 , provided that:  “The amendments made by subsection (a) [amending this section and sections 853 to 855 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 99–514, title XI, §\u202f1173(c)(2)(A) ,  Oct. 22, 1986 ,  100 Stat. 2516 , provided that:  “The amendments made by subsection (b)(1) [amending this section and former  section 133 of this title ] shall apply to loans used to acquire employer securities after the date of the enactment of this Act [ Oct. 22, 1986 ], including loans used to refinance loans used to acquire employer securities before such date if such loans were used to acquire employer securities after  May 23, 1984 .”\nAmendment by  section 1511(c)(6) of Pub. L. 99–514  applicable for purposes of determining interest for periods after  Dec. 31, 1986 , see  section 1511(d) of Pub. L. 99–514 , set out as a note under  section 47 of this title .\nPub. L. 99–514, title XVIII, §\u202f1804(c)(6) ,  Oct. 22, 1986 ,  100 Stat. 2800 , provided that:  “The amendments made by this subsection [amending this section] shall apply to stock with respect to which the taxpayer’s holding period begins after  March 28, 1985 .”\nAmendment by  section 1878(j) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f55(c) ,  July 18, 1984 ,  98 Stat. 572 , provided that:  “The amendments made by this section [amending this section and  section 857 of this title ] shall apply to losses incurred with respect to shares of stock and beneficial interests with respect to which the taxpayer’s holding period begins after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 1001(b)(11) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1071(a)(5) ,  July 18, 1984 ,  98 Stat. 1051 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   In general .— Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section and  section 851 of this title ] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(B)   Investment companies which were regulated investment companies for years ending before  november 8, 1983 .— In the case of any investment company to which the provisions of part I of subchapter M of chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applied for any taxable year ending before  November 8, 1983 , for purposes of section 852(a)(3)(B) of the Internal Revenue Code of 1986 (as amended by this subsection), no earnings and profits accumulated in any taxable year ending before  January 1, 1984 , shall be taken into account. \n \n “(C)   Investment companies beginning business in 1983 .— In the case of an investment company which began business in 1983 (and was not a successor corporation), earnings and profits accumulated during its first taxable year shall not be taken into account for purposes of section 852(a)(3)(B) of such Code (as so amended). \n \n “(D)   Investment companies registering before  november 8, 1983 .— In the case of any investment company— “(i)  which, during the period after  December 31, 1981 , and before  November 8, 1983 — “(I)  was engaged in the active conduct of a trade or business, \n \n “(II)  sold substantially all of its operating assets, and \n \n “(III)  registered under the Investment Company Act of 1940 [15 U.S.C. §\u202f80a–1 et seq.] as either a management company or a unit investment trust, and \n \n \n “(ii)  to which the provisions of part I of subchapter M of chapter 1 of the Internal Revenue Code of 1986 applied for its first taxable year beginning after  November 8, 1983 , \n \n\n for purposes of section 852(a)(3)(A) of such Code (as amended by paragraph (3)), the provisions of part I of subchapter M of chapter 1 of such Code shall be treated as applying to such investment company for its first taxable year ending after  November 8, 1983 . For purposes of the preceding sentence, all members of an affiliated group (as defined in section 1504(a) of such Code) filing a consolidated return shall be treated as 1 taxpayer.”\nPub. L. 98–369, div. A, title X, §\u202f1071(b)(2) ,  July 18, 1984 ,  98 Stat. 1052  provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 301(b)(11) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  section 362(c) of Pub. L. 95–600  applicable with respect to determinations (as defined in  section 860(e) of this title ) after  Nov. 6, 1978 , see  section 362(e) of Pub. L. 95–600 , set out as an Effective Date note under  section 860 of this title .\nAmendment by  section 701(s)(2) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 701(s)(3) of Pub. L. 95–600 , set out as a note under  section 851 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by section 1901(a)(110)(A), (C), (b)(1)(V), (6)(B), (33)(I), (J), (N) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .\nPub. L. 94–455, title XIX, §\u202f1901(a)(110)(B)(ii) ,  Oct. 4, 1976 ,  90 Stat. 1783 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by clause (i) [amending this section] shall not be considered to affect the amount of any increase in the basis of stock under the provisions of section 852(b)(3)(D)(iii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which is based upon amounts subject to tax under section 1201 of such Code [former  section 1201 of this title ] in taxable years beginning before  January 1, 1975 .”\nPub. L. 94–455, title XXI, §\u202f2137(e) ,  Oct. 4, 1976 ,  90 Stat. 1931 , provided that:  “The amendments made by this section [amending this section and sections 103 and 265 of this title] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 91–172, title V, §\u202f511(d) ,  Dec. 30, 1969 ,  83 Stat. 638 , provided that:  “The amendments made by this section [amending this section and sections 802, 857, 1201, 1222, and 1378 of this title] shall apply to taxable years beginning after  December 31, 1969 .”\nPub. L. 88–272, title II, §\u202f229(c) ,  Feb. 26, 1964 ,  78 Stat. 99 , provided that:  “The amendments made by subsection (a) [amending this section and sections 853, 854, and 855 of this title] shall apply to taxable years of regulated investment companies ending on or after the date of the enactment of this Act [ Feb. 26, 1964 ]. The amendment made by subsection (b) [amending this section] shall apply to taxable years of regulated investment companies ending after  December 31, 1963 .”\nAmendment of section by  Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .\nPub. L. 85–866, title I, §\u202f39(b) ,  Sept. 2, 1958 ,  72 Stat. 1638 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after  December 31, 1957 , but only with respect to shares of stock acquired after  December 31, 1957 .”\nPub. L. 85–866, title I, §\u202f101(c) ,  Sept. 2, 1958 ,  72 Stat. 1674 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to taxable years of regulated investment companies beginning on or after  March 1, 1958 .”\nAct July 11, 1956, ch. 573, §\u202f2(b) ,  70 Stat. 530 , provided that:  “The amendment made by this section [amending this section] shall apply only with respect to taxable years of regulated investment companies beginning after  December 31, 1956 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATED INVESTMENT COMPANIES'},
  'content': 'The election provided in subsection (a) shall be made in such manner as the Secretary may prescribe by regulations.\nThis section shall not apply to any tax with respect to which the regulated investment company is not allowed a credit under section 901 by reason of subsection (k) or ( l ) of such section.\n2010—Subsec. (c).  Pub. L. 111–325, §\u202f301(c)(1)(B) , substituted “Statements” for “Notice” in heading.\nPub. L. 111–325, §\u202f301(c)(1)(A) , which directed amendment by substituting “so reported by the company in a written statement furnished to such shareholder” for “so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of the taxable year”, was executed by making the substitution for “so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year” in concluding provisions to reflect the probable intent of Congress.\nSubsec. (d).  Pub. L. 111–325, §\u202f301(c)(2) , struck out “and notifying shareholders” after “election” in heading and “and the notice to shareholders required by subsection (c)” after “subsection (a)” in text.\n2005—Subsec. (e).  Pub. L. 109–135  amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: “This section shall not apply to any tax with respect to which the regulated investment company is not allowed a credit under section 901 by reason of section 901(k).”\n1998—Subsec. (c).  Pub. L. 105–206, §\u202f6010(k)(2) , struck out at end “Such notice shall also include the amount of such taxes which (without regard to the election under this section) would not be allowable as a credit under section 901(a) to the regulated investment company by reason of section 901(k).”\nSubsecs. (e), (f).  Pub. L. 105–206, §\u202f6010(k)(1) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1997—Subsec. (c).  Pub. L. 105–34  inserted at end “Such notice shall also include the amount of such taxes which (without regard to the election under this section) would not be allowable as a credit under section 901(a) to the regulated investment company by reason of section 901(k).”\n1986—Subsec. (c).  Pub. L. 99–514  substituted “60 days” for “45 days”.\n1976—Subsec. (d).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1964—Subsec. (c).  Pub. L. 88–272  substituted “45 days” for “30 days”.\nAmendment by  Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 301(h) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title X, §\u202f1053(c) ,  Aug. 5, 1997 ,  111 Stat. 943 , provided that:  “The amendments made by this section [amending this section and  section 901 of this title ] shall apply to dividends paid or accrued more than 30 days after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Oct. 22, 1986 , see  section 655(b) of Pub. L. 99–514 , set out as a note under  section 852 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years of regulated investment companies ending on or after  Feb. 26, 1964 , see  section 229(c) of Pub. L. 88–272 , set out as a note under  section 852 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATED INVESTMENT COMPANIES'},
  'content': 'The amount treated as a distribution of money received by a shareholder under subsection (b)(2)(A) (and as credits allowed to such shareholder under subsection (b)(2)(B)) shall not exceed the amount so reported by the regulated investment company in a written statement furnished to such shareholder.\nThe election provided in subsection (a) shall be made in such manner as the Secretary may prescribe.\nIf the ownership of a tax credit bond is separated from the credit with respect to such bond, subsection (a) shall be applied by reference to the instruments evidencing the entitlement to the credit rather than the tax credit bond.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including methods for determining a shareholder’s proportionate share of credits.\nSections 54, 54A, and 54AA, referred to in subsecs. (a) and (e)(1), were repealed by  Pub. L. 115–97, title I, §\u202f13404(a) ,  Dec. 22, 2017 ,  131 Stat. 2138 .\nSection 1397E, referred to in subsec. (a), was repealed by  Pub. L. 115–97, title I, §\u202f13404(c)(1) ,  Dec. 22, 2017 ,  131 Stat. 2138 .\nSubpart H of part IV of subchapter A of this chapter, referred to in subsec. (e)(1)(A)(iii), is subpart H (§\u202f54) of part IV of subchapter A of chapter 1 of this title, which was repealed by  Pub. L. 115–97, title I, §\u202f13404(a) ,  Dec. 22, 2017 ,  131 Stat. 2138 .\n2014—Subsec. (a).  Pub. L. 113–295, §\u202f209(h)(2) , in concluding provisions, substituted “with respect to some or all of the credits” for “with respect to credits” and inserted “(determined without regard to this section and sections 54(c), 54A(c)(1), 54AA(c)(1), and 1397E(c))” after “credits allowable”.\nSubsec. (a)(2).  Pub. L. 113–295, §\u202f209(h)(1) , inserted “(determined after the application of this section)” before comma at end.\nSubsec. (b).  Pub. L. 113–295, §\u202f209(h)(3) , amended subsec. (b) generally. Prior to amendment, subsec. (b) consisted of pars. (1) to (3) relating to effects of elections under subsec. (a).\nSubsec. (c).  Pub. L. 113–295, §\u202f209(h)(4) , amended subsec. (c) generally. The amendment was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 ( Pub. L. 111–5, div. B, title I ) to which it relates. As enacted by  Pub. L. 111–5, §\u202f1541(a) , subsec. (c) read as follows: “ Notice to Shareholders .—For purposes of subsection (b)(3), the shareholder’s proportionate share of—\n“(1) credits described in subsection (a), and\n“(2) gross income in respect of such credits,\nshall not exceed the amounts so designated by the regulated investment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year.”\nSubsec. (e)(1)(A)(ii).  Pub. L. 113–295, §\u202f209(h)(5) , inserted “other than a qualified bond described in section 54AA(g)” after “as defined in section 54AA(d))”.\n2010—Subsec. (c).  Pub. L. 111–325, §\u202f301(d)(1) , which directed substitution of “Statements” for “Notice” in heading and “so reported by the regulated investment company in a written statement furnished to such shareholder” for “so designated by the regulated investment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year” in text, could not be executed to the text because the words “so reported by the regulated investment company in a written statement furnished to such shareholder” already appeared after the subsequent general amendment of subsec. (c) by  Pub. L. 113–295  which was effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 ( Pub. L. 111–5, div. B, title I ) to which it relates. However, the substitution was executed to the heading to reflect the probable intent of Congress. See 2014 Amendment note above and Effective Date of 2014 Amendment note below.\nSubsec. (d).  Pub. L. 111–325, §\u202f301(d)(2) , struck out “and notifying shareholders” after “election” in heading and “and the notice to shareholders required by subsection (c)” after “subsection (a)” in text.\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5, div. B, title I , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 301(h) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nPub. L. 111–5, div. B, title I, §\u202f1541(c) ,  Feb. 17, 2009 ,  123 Stat. 362 , provided that:  “The amendments made by this section [enacting this section and amending sections 54 and 54A of this title] shall apply to taxable years ending after the date of the enactment of this Act [ Feb. 17, 2009 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATED INVESTMENT COMPANIES'},
  'content': 'For purposes of section 1(h)(11) (relating to maximum rate of tax on dividends) and section 243 (relating to deductions for dividends received by corporations), a capital gain dividend (as defined in section 852(b)(3)) received from a regulated investment company shall not be considered as a dividend.\nThe aggregate amount which may be reported as dividends under subparagraph (A) shall not exceed the aggregate dividends received by the company for the taxable year.\nIn computing the amount of aggregate dividends received, there shall only be taken into account dividends received from domestic corporations.\nIn determining the amount of any dividend for purposes of this paragraph, a dividend received from a regulated investment company shall be subject to the limitations prescribed in this section.\nFor purposes of this subsection, the term “qualified dividend income” has the meaning given such term by section 1(h)(11)(B).\n2010—Subsec. (b)(1)(A).  Pub. L. 111–325, §\u202f301(e)(1)(A) , in concluding provisions, substituted “reported by the regulated investment company as eligible for such deduction in written statements furnished to its shareholders” for “designated under this subparagraph by the regulated investment company”.\nSubsec. (b)(1)(B)(i).  Pub. L. 111–325, §\u202f301(e)(1)(B) , in concluding provisions, substituted “reported by the regulated investment company as qualified dividend income in written statements furnished to its shareholders” for “designated by the regulated investment company”.\nSubsec. (b)(1)(C)(i).  Pub. L. 111–325, §\u202f301(e)(1)(C) , substituted “reported” for “designated”.\nSubsec. (b)(1)(C)(ii).  Pub. L. 111–325, §\u202f301(e)(1)(D) , substituted “reported” for “designated” in introductory provisions.\nSubsec. (b)(2) to (5).  Pub. L. 111–325, §\u202f301(e)(2) , redesignated pars. (3) to (5) as (2) to (4), respectively, and struck out former par. (2). Prior to amendment, text read as follows: “The amount of any distribution by a regulated investment company which may be taken into account as qualified dividend income for purposes of section 1(h)(11) and as dividends for purposes of the deduction under section 243 shall not exceed the amount so designated by the company in a written notice to its shareholders mailed not later than 60 days after the close of its taxable year.”\n2004—Subsec. (b)(1)(B)(i).  Pub. L. 108–311, §\u202f402(a)(5)(A)(ii) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the maximum rate under section 1(h)(11), rules similar to the rules of subparagraph (A) shall apply.”\nSubsec. (b)(1)(B)(iii), (iv).  Pub. L. 108–311, §\u202f402(a)(5)(A)(i) , struck out cls. (iii) and (iv) which related to dividends from real estate investment trusts and dividends from qualified foreign corporations, respectively.\nSubsec. (b)(1)(C).  Pub. L. 108–311, §\u202f402(a)(5)(B) , amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “The aggregate amount which may be designated as dividends under subparagraph (A) or (B) shall not exceed the aggregate dividends received by the company for the taxable year.”\nSubsec. (b)(2).  Pub. L. 108–311, §\u202f402(a)(5)(C) , substituted “as qualified dividend income for purposes of section 1(h)(11) and as dividends for purposes of” for “as a dividend for purposes of the maximum rate under section 1(h)(11) and”.\nSubsec. (b)(5).  Pub. L. 108–311, §\u202f402(a)(5)(D) , amended heading and text of par. (5) generally. Prior to amendment, text read as follows: “For purposes of paragraph (1)(B), an amount shall be treated as a dividend only if the amount is qualified dividend income (within the meaning of section 1(h)(11)(B)).”\n2003—Subsec. (a).  Pub. L. 108–27, §\u202f302(c)(1) , inserted “section 1(h)(11) (relating to maximum rate of tax on dividends) and” after “For purposes of”.\nSubsec. (b)(1)(B).  Pub. L. 108–27, §\u202f302(c)(2) , added subpar. (B). Former subpar. (B) redesignated (C).\nSubsec. (b)(1)(C).  Pub. L. 108–27, §\u202f302(c)(2) , (3), redesignated subpar. (B) as (C) and substituted “subparagraph (A) or (B)” for “subparagraph (A)”.\nSubsec. (b)(2).  Pub. L. 108–27, §\u202f302(c)(4) , inserted “the maximum rate under section 1(h)(11) and” after “for purposes of”.\nSubsec. (b)(5).  Pub. L. 108–27, §\u202f302(c)(5) , added par. (5).\n1988—Subsec. (b)(3).  Pub. L. 100–647  substituted “Aggregate dividends” for “Definitions” in heading and amended text generally, substituting subpars. (A) to (C) for former subpars. (A) and (B).\n1987—Subsec. (b)(1)(A).  Pub. L. 100–203  inserted “and such dividend shall be treated as received from a corporation which is not a 20-percent owned corporation” before period at end.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f612(b)(6)(A) , which directed that “section 116 (relating to an exclusion for dividends received by individuals), and” be struck out, was executed by striking out “section 116 (relating to an exclusion for dividends received by individuals) and” before “section 243” as the probable intent of Congress.\nSubsec. (b)(1)(B), (C).  Pub. L. 99–514, §\u202f612(b)(6)(B)(i) , (ii), redesignated subpar. (C) as (B), struck out “or (B)” before “shall not exceed”, and struck out former subpar. (B), exclusion under section 116, which read as follows: “If the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the exclusion under section 116, rules similar to the rules of subparagraph (A) shall apply.”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f655(a)(4) , substituted “60 days” for “45 days”.\nPub. L. 99–514, §\u202f612(b)(6)(B)(iii) , struck out “the exclusion under section 116 and” before “the deduction under section 243”.\nSubsec. (b)(3)(B).  Pub. L. 99–514, §\u202f612(b)(6)(B)(iv) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘aggregate dividends received’ includes only dividends received from domestic corporations other than dividends described in section 116(b) (relating to dividends excluded from gross income). In determining the amount of any dividend for purposes of this subparagraph, the rules provided in section 116(c) (relating to certain distributions) shall apply.”\n1984—Subsec. (b).  Pub. L. 98–369, §\u202f16(a) , repealed amendments made by  Pub. L. 97–34, §\u202f302(c) . See 1981 Amendment note below.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f52(a) , increased the required amount of dividends by substituting provisions directing that in any case in which (i) a dividend is received from a regulated investment company (other than a dividend to which subsection (a) applies), and (ii) such investment company meets the requirements of section 852(a) for the taxable year during which it paid such dividend, then, in computing any deduction under section 243, there shall be taken into account only that portion of such dividend thus designated by the regulated investment company, that if the aggregate dividends received by a regulated investment company during any taxable year are less than 95 percent of its gross income, then, in computing the exclusion under section 116, similar rules applied, and that the aggregate amount which may be designated thus dividends shall not exceed the aggregate dividends received by the company for the taxable year for provisions which had directed that in the case of a dividend received from a regulated investment company (other than a dividend to which subsection (a) applied) (A) if such investment company met the requirements of section 852(a) for the taxable year during which it paid such dividend; and (B) the aggregate dividends received by such company during such taxable year were less than 75 percent of its gross income, then, in computing the exclusion under section 116 and the deduction under section 243, there was taken into account only that portion of the dividend which bore the same ratio to the amount of such dividend as the aggregate dividends received by such company during such taxable year to its gross income for such taxable year.\nSubsec. (b)(3)(A).  Pub. L. 98–369, §\u202f52(c) , substituted provisions directing that in the case of 1 or more sales or other dispositions of stock and securities, the term “gross income” include only the excess of (i) the net short-term capital gain from such sales or dispositions, over (ii) the net long-term capital loss from such sales or dispositions for provisions which had directed that the term “gross income” not include gain from the sale or other disposition of stock or securities.\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f52(b) , added par. (4).\n1981—Subsec. (b).  Pub. L. 97–34, §\u202f302(c)(4) , (d)(1), provided for general amendment of subsec. (b) so as to include provisions relating to taxable interest described in  section 128 of this title , applicable to taxable years beginning after  Dec. 31, 1984 .  Section 16(a) of Pub. L. 98–369 , repealed  section 302(c) of Pub. L. 97–34 , and provided that this title shall be applied and administered as if section 302(c), and the amendments made by section 302(c), had not been enacted.\n1980—Subsec. (b).  Pub. L. 96–223, §\u202f404(b)(6) , temporarily substituted “Other dividends and taxable interest” for “Other dividends” in heading, substituted “Deduction under section 243” for “General rule” in heading for par. (1), struck out “the exclusion under section 116 and” after “in computing” in text of par. (1) following subpar. (B), added par. (2), redesignated former pars. (2) and (3) as (3) and (4), respectively, and, in par. (4) as so redesignated, substituted “116(b)(2)” for “116(b)” and “116(c)(2)” for “116(c)” in subpar. (B) and added subpar. (C).\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f201(d)(8) , struck out “section 34(a) (relating to credit for dividends received by individuals),” before “section 116” and the comma before “and”.\nSubsec. (b).  Pub. L. 88–272 , §§\u202f201(d)(9), (10), 229(a)(4), substituted “45 days” for “30 days” in par. (2), and struck out “the credit under section 34(a),” before “the exclusion” in par. (1), and “the credit under section 34,” before “the exclusion” in par. (2).\nAmendment by  Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 301(h) of Pub. L. 111–325 , set out as an Effective Date of 2010 Amendment note under  section 852 of this title .\nPub. L. 111–325, title III, §\u202f301(i) ,  Dec. 22, 2010 ,  124 Stat. 3547 , provided that:  “Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 [ Pub. L. 108–27 , which was repealed by  Pub. L. 112–240, title I, §\u202f102(a) ,  Jan. 2, 2013 ,  126 Stat. 2318 , was formerly set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title ] shall apply to the amendments made by subparagraphs (B) and (D) of subsection (e)(1) [amending this section] to the same extent and in the same manner as section 303 of such Act applies to the amendments made by section 302 of such Act [amending this section and sections 1, 163, 301, 306, 338, 467, 531, 541, 584, 702, 857, 1255, and 1257 of this title and repealing  section 341 of this title ].”\nAmendment by  Pub. L. 108–311  effective as if included in section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003,  Pub. L. 108–27 , see  section 402(b) of Pub. L. 108–311 , set out a note under  section 1 of this title .\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to dividends received or accrued after  Dec. 31, 1987 , in taxable years ending after such date, see  section 10221(e)(1) of Pub. L. 100–203 , set out as a note under  section 243 of this title .\nAmendment by  section 612(b)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as a note under  section 301 of this title .\nAmendment by  section 655(a)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Oct. 22, 1986 , see  section 655(b) of Pub. L. 99–514 , set out as a note under  section 852 of this title .\nAmendment by  section 16(a) of Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f52(d) ,  July 18, 1984 ,  98 Stat. 565 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years of regulated investment companies beginning after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  Pub. L. 96–223  applicable with respect to taxable years beginning after  Dec. 31, 1980 , and before  Jan. 1, 1982 , see  section 404(c) of Pub. L. 96–223 , set out as a note under  section 265 of this title .\nAmendment by section 201(d)(8)–(10) of  Pub. L. 88–272  applicable to dividends received after  Dec. 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .\nAmendment by  section 229(a)(4) of Pub. L. 88–272  applicable to taxable years of regulated investment companies ending on or after  Feb. 26, 1964 , see  section 229(c) of Pub. L. 88–272 , set out as a note under  section 852 of this title .\nPub. L. 108–311, title IV, §\u202f402(a)(5)(F) ,  Oct. 4, 2004 ,  118 Stat. 1185 , provided that:  “With respect to any taxable year of a regulated investment company or real estate investment trust ending on or before  November 30, 2003 , the period for providing notice of the qualified dividend amount to shareholders under [former, as to 854(b)(2)] sections 854(b)(2) and 857(c)(2)(C) of the Internal Revenue Code of 1986, as amended by this section, shall not expire before the date on which the statement under section 6042(c) of such Code is required to be furnished with respect to the last calendar year beginning in such taxable year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATED INVESTMENT COMPANIES'},
  'content': 'Except as provided in section 852(b)(7), amounts to which subsection (a) is applicable shall be treated as received by the shareholder in the taxable year in which the distribution is made.\nIf an investment company to which section 853 is applicable for the taxable year makes a distribution as provided in subsection (a) of this section, the shareholders shall consider the amounts described in section 853(b)(2) allocable to such distribution as paid or received, as the case may be, in the taxable year in which the distribution is made.\nThe Investment Company Act of 1940, referred to in subsec. (a), is title I of  act Aug. 22, 1940, ch. 686 ,  54 Stat. 789 , which is classified generally to subchapter I (§\u202f80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 80a–51 of Title 15  and Tables.\n2014—Subsec. (a)(1).  Pub. L. 113–295  inserted “on or” before “before” in introductory provisions.\n2010—Subsec. (a).  Pub. L. 111–325, §\u202f304(c) , in concluding provisions, inserted at end “For purposes of paragraph (2), a dividend attributable to any short-term capital gain with respect to which a notice is required under the Investment Company Act of 1940 shall be treated as the same type of dividend as a capital gain dividend.”\nPub. L. 111–325, §\u202f301(g)(2) , substituted “and (c)” for “,\u2000(c) and (d)” in concluding provisions.\nSubsec. (a)(1).  Pub. L. 111–325, §\u202f304(a) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “declares a dividend prior to the time prescribed by law for the filing of its return for a taxable year (including the period of any extension of time granted for filing such return), and”.\nSubsec. (a)(2).  Pub. L. 111–325, §\u202f304(b) , substituted “the first dividend payment of the same type of dividend” for “the first regular dividend payment”.\nSubsecs. (c), (d).  Pub. L. 111–325, §\u202f301(g)(1) , redesignated subsec. (d) as (c) and struck out former subsec. (c). Text of former subsec. (c) read as follows: “In the case of amounts to which subsection (a) is applicable, any notice to shareholders required under this part with respect to such amounts shall be made not later than 60 days after the close of the taxable year in which the distribution is made.”\n1988—Subsec. (b).  Pub. L. 100–647  substituted “section 852(b)(7)” for “section 852(b)(6)”.\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f651(b)(1)(B) , substituted “Except as provided in section 852(b)(6), amounts” for “Amounts”.\nSubsec. (c).  Pub. L. 99–514, §\u202f655(a)(5) , substituted “60 days” for “45 days”.\n1976—Subsec. (a).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1964—Subsec. (c).  Pub. L. 88–272  substituted “45 days” for “30 days”.\n1960—Subsec. (c).  Pub. L. 86–779  substituted “this part” for “this subchapter”.\nAmendment by  Pub. L. 113–295  effective as if included in the provision of the Regulated Investment Company Modernization Act of 2010,  Pub. L. 111–325 , to which such amendment relates, with savings provision in certain cases of an election by a regulated investment company under  section 852(b)(8) of this title , see  section 205(f) of Pub. L. 113–295 , set out as a note under  section 852 of this title .\nAmendment by  section 301(g) of Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 301(h) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nPub. L. 111–325, title III, §\u202f304(d) ,  Dec. 22, 2010 ,  124 Stat. 3549 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions in taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 651(b)(1)(B) of Pub. L. 99–514  applicable to calendar years beginning after  Dec. 31, 1986 , see  section 651(d) of Pub. L. 99–514 , set out as an Effective Date note under  section 4982 of this title .\nAmendment by  section 655(a)(5) of Pub. L. 99–514  applicable to taxable years beginning after  Oct. 22, 1986 , see  section 655(b) of Pub. L. 99–514 , set out as a note under  section 852 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years of regulated investment companies ending on or after  Feb. 26, 1964 , see  section 229(c) of Pub. L. 88–272 , set out as a note under  section 852 of this title .\nAmendment by  Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE INVESTMENT TRUSTS'},
  'content': 'The conditions described in paragraphs (1) to (4), inclusive, of subsection (a) must be met during the entire taxable year, and the condition described in paragraph (5) must exist during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months.\nWhere a real estate investment trust receives or accrues, with respect to real or personal property, any amount which would be excluded from the term “rents from real property” solely because the tenant of the real estate investment trust receives or accrues, directly or indirectly, from subtenants any amount the determination of which depends in whole or in part on the income or profits derived by any person from such property, only a proportionate part (determined pursuant to regulations prescribed by the Secretary) of the amount received or accrued by the real estate investment trust from that tenant will be excluded from the term “rents from real property”.\nFor purposes of subparagraph (A), the term “qualified rents” means any amount which would be treated as rents from real property if received by the real estate investment trust.\nIf the amount described in subparagraph (A) with respect to a property for any taxable year exceeds 1 percent of all amounts received or accrued during such taxable year directly or indirectly by the real estate investment trust with respect to such property, the impermissible tenant service income of the trust with respect to the property shall include all such amounts.\nFor purposes of subparagraph (A), the amount treated as received for any service (or management or operation) shall not be less than 150 percent of the direct cost of the trust in furnishing or rendering the service (or providing the management or operation).\nFor purposes of paragraphs (2) and (3) of subsection (c), amounts described in subparagraph (A) shall be included in the gross income of the corporation, trust, or association.\nThe requirements of this subparagraph are met with respect to any property if at least 90 percent of the leased space of the property is rented to persons other than taxable REIT subsidiaries of such trust and other than persons described in paragraph (2)(B).\nClause (i) shall apply only to the extent that the amounts paid to the trust as rents from real property (as defined in paragraph (1) without regard to paragraph (2)(B)) from such property are substantially comparable to such rents paid by the other tenants of the trust’s property for comparable space.\nIf the requirements of clause (i) are met at a time referred to in clause (iii), such requirements shall continue to be treated as met so long as there is no increase in the space leased to any taxable REIT subsidiary of such trust or to any person described in paragraph (2)(B).\nIf there is an increase referred to in clause (v) during any calendar quarter with respect to any property, the requirements of clause (iii) shall be treated as met during the quarter and the succeeding quarter if such requirements are met at the close of such succeeding quarter.\nThe term “eligible independent contractor” means, with respect to any qualified lodging facility or qualified health care property (as defined in subsection (e)(6)(D)(i)), any independent contractor if, at the time such contractor enters into a management agreement or other similar service contract with the taxable REIT subsidiary to operate such qualified lodging facility or qualified health care property, such contractor (or any related person) is actively engaged in the trade or business of operating qualified lodging facilities or qualified health care properties, respectively, for any person who is not a related person with respect to the real estate investment trust or the taxable REIT subsidiary.\nThe term “qualified lodging facility” means any lodging facility unless wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility.\nThe term “lodging facility” includes customary amenities and facilities operated as part of, or associated with, the lodging facility so long as such amenities and facilities are customary for other properties of a comparable size and class owned by other owners unrelated to such real estate investment trust.\nReferences in this paragraph to operating a property shall be treated as including a reference to managing the property.\nPersons shall be treated as related to each other if such persons are treated as a single employer under subsection (a) or (b) of section 52.\nFor purposes of this part, the term “foreclosure property” means any real property (including interests in real property), and any personal property incident to such real property, acquired by the real estate investment trust as the result of such trust having bid in such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was default (or default was imminent) on a lease of such property or on an indebtedness which such property secured. Such term does not include property acquired by the real estate investment trust as a result of indebtedness arising from the sale or other disposition of property of the trust described in section 1221(a)(1) which was not originally acquired as foreclosure property.\nExcept as provided in paragraph (3), property shall cease to be foreclosure property with respect to the real estate investment trust as of the close of the 3d taxable year following the taxable year in which the trust acquired such property.\nIf the real estate investment trust establishes to the satisfaction of the Secretary that an extension of the grace period is necessary for the orderly liquidation of the trust’s interests in such property, the Secretary may grant one extension of the grace period for such property. Any such extension shall not extend the grace period beyond the close of the 3d taxable year following the last taxable year in the period under paragraph (2).\nProperty shall be treated as foreclosure property for purposes of this part only if the real estate investment trust so elects (in the manner provided in regulations prescribed by the Secretary) on or before the due date (including any extensions of time) for filing its return of tax under this chapter for the taxable year in which such trust acquires such property. A real estate investment trust may revoke any such election for a taxable year by filing the revocation (in the manner provided by the Secretary) on or before the due date (including any extension of time) for filing its return of tax under this chapter for the taxable year. If a trust revokes an election for any property, no election may be made by the trust under this paragraph with respect to the property for any subsequent taxable year.\nThe term “foreclosure property” shall include any qualified health care property acquired by a real estate investment trust as the result of the termination of a lease of such property (other than a termination by reason of a default, or the imminence of a default, on the lease).\nFor purposes of clause (i), the term “health care facility” means a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility (as defined in section 7872(g)(4)), or other licensed facility which extends medical or nursing or ancillary services to patients and which, immediately before the termination, expiration, default, or breach of the lease of or mortgage secured by such facility, was operated by a provider of such services which was eligible for participation in the medicare program under title XVIII of the Social Security Act with respect to such facility.\nAn election under subsection (c)(1) made by a corporation, trust, or association shall terminate if the corporation, trust, or association is not a real estate investment trust to which the provisions of this part apply for the taxable year with respect to which the election is made, or for any succeeding taxable year unless paragraph (5) applies. Such termination shall be effective for the taxable year for which the corporation, trust, or association is not a real estate investment trust to which the provisions of this part apply, and for all succeeding taxable years.\nAn election under subsection (c)(1) made by a corporation, trust, or association may be revoked by it for any taxable year after the first taxable year for which the election is effective. A revocation under this paragraph shall be effective for the taxable year in which made and for all succeeding taxable years. Such revocation must be made on or before the 90th day after the first day of the first taxable year for which the revocation is to be effective. Such revocation shall be made in such manner as the Secretary shall prescribe by regulations.\nExcept as provided in paragraph (4), if a corporation, trust, or association has made an election under subsection (c)(1) and such election has been terminated or revoked under paragraph (1) or paragraph (2), such corporation, trust, or association (and any successor corporation, trust, or association) shall not be eligible to make an election under subsection (c)(1) for any taxable year prior to the fifth taxable year which begins after the first taxable year for which such termination or revocation is effective.\nFor purposes of subsection (a)(6), a corporation, trust, or association is closely held if the stock ownership requirement of section 542(a)(2) is met.\nParagraphs (5) and (6) of subsection (a) shall not apply to the 1st taxable year for which an election is made under subsection (c)(1) by any corporation, trust, or association.\nExcept as provided in clause (ii), in determining whether the stock ownership requirement of section 542(a)(2) is met for purposes of paragraph (1)(A), any stock held by a qualified trust shall be treated as held directly by its beneficiaries in proportion to their actuarial interests in such trust and shall not be treated as held by such trust.\nClause (i) shall not apply to any qualified trust if one or more disqualified persons (as defined in section 4975(e)(2), without regard to subparagraphs (B) and (I) thereof) with respect to such qualified trust hold in the aggregate 5 percent or more in value of the interests in the real estate investment trust and such real estate investment trust has accumulated earnings and profits attributable to any period for which it did not qualify as a real estate investment trust.\nIf any entity qualifies as a real estate investment trust for any taxable year by reason of subparagraph (A), such entity shall not be treated as a personal holding company for such taxable year for purposes of part II of subchapter G of this chapter.\nA real estate investment trust is a pension-held REIT if such trust would not have qualified as a real estate investment trust but for the provisions of this paragraph and if such trust is predominantly held by qualified trusts.\nFor purposes of this paragraph, the term “qualified trust” means any trust described in section 401(a) and exempt from tax under section 501(a).\nFor purposes of this subsection, the term “qualified REIT subsidiary” means any corporation if 100 percent of the stock of such corporation is held by the real estate investment trust. Such term shall not include a taxable REIT subsidiary.\nFor purposes of this subtitle, if any corporation which was a qualified REIT subsidiary ceases to meet the requirements of paragraph (2), such corporation shall be treated as a new corporation acquiring all of its assets (and assuming all of its liabilities) immediately before such cessation from the real estate investment trust in exchange for its stock.\nSolely for purposes of subsection (c) of this section and section 857(b)(6), any income derived from a shared appreciation provision shall be treated as gain recognized on the sale of the secured property.\nThe term “secured property” means the real property referred to in subparagraph (A).\nThe term “lodging facility” has the meaning given to such term by subsection (d)(9)(D)(ii).\nThe term “health care facility” has the meaning given to such term by subsection (e)(6)(D)(ii).\nFor purposes of paragraph (1)(A), securities meet the requirements of this paragraph if such securities are straight debt, as defined in section 1361(c)(5) (without regard to subparagraph (B)(iii) thereof).\nThe Secretary is authorized to provide guidance (including through the issuance of a written determination, as defined in section 6110(b)) that an arrangement shall not be considered a security held by the trust for purposes of applying subclause (III) of subsection (c)(4)(B)(iv) notwithstanding that such arrangement otherwise could be considered a security under subparagraph (F) of subsection (c)(5).\nNotwithstanding this subsection or any other provision of this part, any section 988 gain derived by a corporation, trust, or association from dealing, or engaging in substantial and regular trading, in securities (as defined in section 475(c)(2)) shall constitute gross income which does not qualify under paragraph (2) or (3) of subsection (c). This paragraph shall not apply to income which does not constitute gross income by reason of subsection (c)(5)(G).\nThe date of the enactment of this subparagraph, referred to in subsec. (c)(2)(I), is the date of enactment of  Pub. L. 110–246 , which was approved  June 18, 2008 .\nThe Investment Company Act of 1940, referred to in subsec. (c)(5)(F), is title I of  act Aug. 22, 1940, ch. 686 ,  54 Stat. 789 , which is classified generally to subchapter I (§\u202f80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see  section 80a–51 of Title 15  and Tables.\nThe date of the enactment of this paragraph and such date of enactment, referred to in subsec. (c)(10), is the date of enactment of  Pub. L. 110–246 , which was approved  June 18, 2008 .\nThe Social Security Act, referred to in subsec. (e)(6)(D)(ii), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , as amended. Title XVIII of the Act is classified generally to subchapter XVIII (§\u202f1395 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nThe date of the enactment of this subparagraph, referred to in subsec. (m)(3)(B), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2018—Subsec. (c)(7)(A), (B).  Pub. L. 115–141, §\u202f401(a)(146) , in introductory provisions, substituted “paragraph (4)(B)(iv)” for “paragraph (4)(B)(iii)”.\nSubsec. (c)(9)(A).  Pub. L. 115–141, §\u202f101(n)(1) , designated existing provisions as cl. (i), inserted heading, and added cl. (ii).\nSubsec. (c)(9)(B).  Pub. L. 115–141, §\u202f101(n)(2) , amended subpar. (B) generally. Prior to amendment, subpar. (B) related to certain personal property mortgaged in connection with real property.\nSubsec. (m)(1), (3)(A), (4).  Pub. L. 115–141, §\u202f401(a)(147) , in introductory provisions, substituted “subsection (c)(4)(B)(iv)” for “subsection (c)(4)(B)(iii)”.\nSubsec. (m)(5).  Pub. L. 115–141, §\u202f401(a)(147) , substituted “subsection (c)(4)(B)(iv)” for “subsection (c)(4)(B)(iii)”.\nSubsec. (m)(6).  Pub. L. 115–141, §\u202f401(b)(28) , struck out par. (6) which related to transition rule.\n2015—Subsec. (c)(3)(H).  Pub. L. 114–113, §\u202f317(a)(2) , inserted “(other than a nonqualified publicly offered REIT debt instrument)” after “real estate asset”.\nSubsec. (c)(4)(B)(ii).  Pub. L. 114–113, §\u202f312(a) , substituted “20 percent” for “25 percent”.\nSubsec. (c)(4)(B)(iii), (iv).  Pub. L. 114–113, §\u202f317(a)(3) , added cl. (iii) and redesignated former cl. (iii) as (iv).\nSubsec. (c)(5)(B).  Pub. L. 114–113, §\u202f317(a)(1) , (b), inserted “or on interests in real property” after “interests in mortgages on real property”, substituted “,\u2000shares” for “and shares”, and inserted “,\u2000and debt instruments issued by publicly offered REITs” before period at end of first sentence.\nSubsec. (c)(5)(G)(i).  Pub. L. 114–113, §\u202f319(b)(2)(A) , struck out “which is clearly identified pursuant to section 1221(a)(7)” after “of section 1221(b)(2)(A))”.\nSubsec. (c)(5)(G)(ii).  Pub. L. 114–113, §\u202f319(b)(2)(B) , struck out before period at end “,\u2000but only if such transaction is clearly identified as such before the close of the day on which it was acquired, originated, or entered into (or such other time as the Secretary may prescribe)”.\nSubsec. (c)(5)(G)(iii).  Pub. L. 114–113, §\u202f319(a) , added cl. (iii).\nSubsec. (c)(5)(G)(iv).  Pub. L. 114–113, §\u202f319(b)(1) , added cl. (iv).\nSubsec. (c)(5)(L).  Pub. L. 114–113, §\u202f317(a)(4) , added subpar. (L).\nSubsec. (c)(8).  Pub. L. 114–113, §\u202f311(b) , added par. (8). Former par. (8) redesignated (9).\nSubsec. (c)(9).  Pub. L. 114–113, §\u202f318(a) , added par. (9). Former par. (9) redesignated (10).\nPub. L. 114–113, §\u202f311(b) , redesignated par. (8) as (9).\nSubsec. (c)(10).  Pub. L. 114–113, §\u202f318(a) , redesignated par. (9) as (10).\nSubsec. (e)(4)(C).  Pub. L. 114–113, §\u202f321(a)(3) , inserted “or through a taxable REIT subsidiary” after “receive any income”.\n2008—Subsec. (c)(2)(I).  Pub. L. 110–246, §\u202f15313(a) , added subpar. (I).\nSubsec. (c)(4).  Pub. L. 110–289, §\u202f3032(a) , inserted “(including a discrepancy caused solely by the change in the foreign currency exchange rate used to value a foreign asset)” after “such requirements” in first sentence of concluding provisions.\nSubsec. (c)(4)(B)(ii).  Pub. L. 110–289, §\u202f3041 , substituted “than 25 percent” for “than 20 percent” and “REIT subsidiaries,” for “REIT subsidiaries (in the case of a quarter which closes on or before the termination date, 25 percent in the case of a timber real estate investment trust), and”.\nPub. L. 110–246, §\u202f15314(a) , inserted “(in the case of a quarter which closes on or before the termination date, 25 percent in the case of a timber real estate investment trust)” after “REIT subsidiaries”.\nSubsec. (c)(5)(G).  Pub. L. 110–289, §\u202f3031(b) , amended subpar. (G) generally. Prior to amendment, text read as follows: “Except to the extent provided by regulations, any income of a real estate investment trust from a hedging transaction (as defined in clause (ii) or (iii) of section 1221(b)(2)(A)) which is clearly identified pursuant to section 1221(a)(7), including gain from the sale or disposition of such a transaction, shall not constitute gross income under paragraph (2) to the extent that the transaction hedges any indebtedness incurred or to be incurred by the trust to acquire or carry real estate assets.”\nSubsec. (c)(5)(H).  Pub. L. 110–246, §\u202f15312(a) , added subpar. (H).\nSubsec. (c)(5)(I).  Pub. L. 110–246, §\u202f15313(b) , added subpar. (I).\nSubsec. (c)(5)(J).  Pub. L. 110–289, §\u202f3031(c) , added subpar. (J).\nSubsec. (c)(5)(K).  Pub. L. 110–289, §\u202f3032(b) , added subpar. (K).\nSubsec. (c)(8).  Pub. L. 110–246, §\u202f15312(b) , added par. (8).\nSubsec. (d)(8)(B).  Pub. L. 110–289, §\u202f3061(a) , amended subpar. (B) generally. Prior to amendment, text read as follows: “The requirements of this subparagraph are met with respect to an interest in real property which is a qualified lodging facility leased by the trust to a taxable REIT subsidiary of the trust if the property is operated on behalf of such subsidiary by a person who is an eligible independent contractor.”\nSubsec. (d)(9)(A), (B).  Pub. L. 110–289, §\u202f3061(b) , amended subpars. (A) and (B) generally. Prior to amendment, subpar. (A) defined “eligible independent contractor” with respect to any qualified lodging facility and subpar. (B) set forth reasons by which a person would not fail to be treated as an independent contractor with respect to any qualified lodging facility.\nSubsec. ( l )(3).  Pub. L. 110–289, §\u202f3061(c) , inserted “or a health care facility” after “a lodging facility” and “or health care facility” after “such lodging facility” in concluding provisions.\nSubsec. (n).  Pub. L. 110–289, §\u202f3031(a) , added subsec. (n).\n2007—Subsec. (d)(9)(D)(ii).  Pub. L. 110–172, §\u202f9(b) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘lodging facility’ means a hotel, motel, or other establishment more than one-half of the dwelling units in which are used on a transient basis.”\nSubsec. ( l )(2).  Pub. L. 110–172, §\u202f11(a)(18) , in concluding provisions, inserted last sentence and struck out former last sentence which read as follows: “The rule of section 856(c)(7) shall apply for purposes of subparagraph (B).”\n2005—Subsec. (c)(7).  Pub. L. 109–135, §\u202f403(d)(1) , reenacted heading without change and amended text generally. Prior to amendment, text consisted of subpars. (A) to (C) relating to rules of application for a corporation, trust, or association that fails to satisfy the requirements of paragraph (4) of this subsection.\nSubsec. (g)(5)(A).  Pub. L. 109–135, §\u202f412(hh) , substituted “paragraph (2), (3), or (4) of subsection (c)” for “subsection (c)(6) or (c)(7) of section 856”.\nSubsec. (m)(6).  Pub. L. 109–135, §\u202f403(d)(2) , added par. (6).\n2004—Subsec. (c)(5)(E).  Pub. L. 108–357, §\u202f835(b)(4) , struck out last sentence which read as follows: “The principles of the preceding provisions of this subparagraph shall apply to regular interests in a FASIT.”\nSubsec. (c)(5)(G).  Pub. L. 108–357, §\u202f243(d) , reenacted heading without change and amended text of subpar. (G) generally. Prior to amendment, subpar. (G) provided that, except to the extent provided by regulations, payment to a real estate investment trust under an interest rate swap or cap agreement, option, futures contract, forward rate agreement, or any similar financial instrument, entered into by the trust in a transaction to reduce the interest rate risks with respect to any indebtedness incurred or to be incurred by the trust to acquire or carry real estate assets, and gain from the sale or other disposition of any such investment, would be treated as income qualifying under par. (2).\nSubsec. (c)(6)(A).  Pub. L. 108–357, §\u202f243(f)(2) , added subpar. (A) and struck out former subpar. (A) which read as follows: “the nature and amount of each item of its gross income described in such paragraphs is set forth in a schedule attached to its income tax return for such taxable year;”.\nSubsec. (c)(6)(B), (C).  Pub. L. 108–357, §\u202f243(f)(2) , redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “the inclusion of any incorrect information in the schedule referred to in subparagraph (A) is not due to fraud with intent to evade tax; and”.\nSubsec. (c)(7).  Pub. L. 108–357, §\u202f243(f)(1) , added par. (7).\nPub. L. 108–357, §\u202f243(a)(1) , struck out par. (7) which provided that securities of an issuer which were straight debt would not be taken into account in applying paragraph (4)(B)(iii)(III), if the issuer was an individual, if the only securities of such issuer which were held by the trust or a taxable REIT subsidiary of the trust were straight debt, or if the issuer was a partnership and the trust held at least a 20 percent profits interest in the partnership.\nSubsec. (d)(8)(A).  Pub. L. 108–357, §\u202f243(b) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “The requirements of this subparagraph are met with respect to any property if at least 90 percent of the leased space of the property is rented to persons other than taxable REIT subsidiaries of such trust and other than persons described in section 856(d)(2)(B). The preceding sentence shall apply only to the extent that the amounts paid to the trust as rents from real property (as defined in paragraph (1) without regard to paragraph (2)(B)) from such property are substantially comparable to such rents made by the other tenants of the trust’s property for comparable space.”\nSubsec. (g)(1).  Pub. L. 108–357, §\u202f243(f)(3)(A) , inserted “unless paragraph (5) applies” before “.\u2000Such termination”.\nSubsec. (g)(5).  Pub. L. 108–357, §\u202f243(f)(3)(B) , added par. (5).\nSubsec. (m).  Pub. L. 108–357, §\u202f243(a)(2) , added subsec. (m).\n2000—Subsec. (c)(7).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f319(9)] , substituted “paragraph (4)(B)(iii)(III)” for “paragraph (4)(B)(ii)(III)” in introductory provisions.\nSubsec. ( l )(4)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f319(10)] , substituted “subsection (d)(9)(D)(ii)” for “paragraph (9)(D)(ii)”.\n1999—Subsec. (c)(2)(D), (3)(C).  Pub. L. 106–170, §\u202f532(c)(2)(H) , (I), substituted “section 1221(a)(1)” for “section 1221(1)”.\nSubsec. (c)(4)(B).  Pub. L. 106–170, §\u202f541(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “not more than 25 percent of the value of its total assets is represented by securities (other than those includible under subparagraph (A)) for purposes of this calculation limited in respect of any one issuer to an amount not greater in value than 5 percent of the value of the total assets of the trust and to not more than 10 percent of the outstanding voting securities of such issuer.”\nSubsec. (c)(7).  Pub. L. 106–170, §\u202f541(b) , added par. (7).\nSubsec. (d)(1).  Pub. L. 106–170, §\u202f542(b)(3)(A)(i) , substituted “fair market values” for “adjusted bases” in two places in concluding provisions.\nSubsec. (d)(2)(B).  Pub. L. 106–170, §\u202f542(b)(2) , inserted “except as provided in paragraph (8),” after “(B)” in introductory provisions.\nSubsec. (d)(2)(B)(i).  Pub. L. 106–170, §\u202f542(b)(3)(B)(i) , substituted “value” for “number”.\nSubsec. (d)(3).  Pub. L. 106–170, §\u202f561(a) , inserted concluding provisions.\nSubsec. (d)(7)(C)(i).  Pub. L. 106–170, §\u202f542(a) , inserted “or through a taxable REIT subsidiary of such trust” after “income”.\nSubsec. (d)(8), (9).  Pub. L. 106–170, §\u202f542(b)(1) , added pars. (8) and (9).\nSubsec. (e)(1).  Pub. L. 106–170, §\u202f532(c)(2)(J) , substituted “section 1221(a)(1)” for “section 1221(1)”.\nSubsec. (e)(6).  Pub. L. 106–170, §\u202f551(a) , added par. (6).\nSubsec. (i)(2).  Pub. L. 106–170, §\u202f543(b) , inserted at end “Such term shall not include a taxable REIT subsidiary.”\nSubsec. (j)(2)(B).  Pub. L. 106–170, §\u202f532(c)(2)(K) , substituted “section 1221(a)(1)” for “section 1221(1)”.\nSubsec. ( l ).  Pub. L. 106–170, §\u202f543(a) , added subsec. ( l ).\n1997—Subsec. (a)(6).  Pub. L. 105–34, §\u202f1251(b)(2) , inserted “subject to the provisions of subsection (k),” before “which is not”.\nSubsec. (c)(3)(I).  Pub. L. 105–34, §\u202f1255(a)(1) , inserted “and” at end.\nSubsec. (c)(4).  Pub. L. 105–34, §\u202f1255(a)(2) , (3), redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “less than 30 percent of its gross income is derived from the sale or other disposition of—\n“(A) stock or securities held for less than 1 year;\n“(B) property in a transaction which is a prohibited transaction; and\n“(C) real property (including interests in real property and interests in mortgages on real property) held for less than 4 years other than—\n“(i) property compulsorily or involuntarily converted within the meaning of section 1033, and\n“(ii) property which is foreclosure property within the definition of section 856(e); and”.\nSubsec. (c)(5).  Pub. L. 105–34, §\u202f1255(a)(3) , redesignated par. (6) as (5). Former par. (5) redesignated (4).\nSubsec. (c)(5)(G).  Pub. L. 105–34, §\u202f1258 , amended heading and text of subpar. (G) generally. Prior to amendment, text read as follows: “Except to the extent provided by regulations, any—\n“(i) payment to a real estate investment trust under a bona fide interest rate swap or cap agreement entered into by the real estate investment trust to hedge any variable rate indebtedness of such trust incurred or to be incurred to acquire or carry real estate assets, and\n“(ii) any gain from the sale or other disposition of such agreement,\nshall be treated as income qualifying under paragraph (2).”\nPub. L. 105–34, §\u202f1255(b)(1) , struck out “and such agreement shall be treated as a security for purposes of paragraph (4)(A)” after “under paragraph (2)” in concluding provisions.\nSubsec. (c)(6), (7).  Pub. L. 105–34, §\u202f1255(a)(3) , redesignated par. (7) as (6). Former par. (6) redesignated (5).\nSubsec. (c)(8).  Pub. L. 105–34, §\u202f1255(a)(2) , struck out heading and text of par. (8). Text read as follows: “In the case of the taxable year in which a real estate investment trust is completely liquidated, there shall not be taken into account under paragraph (4) any gain from the sale, exchange, or distribution of any property after the adoption of the plan of complete liquidation.”\nSubsec. (d)(2).  Pub. L. 105–34, §\u202f1252(a) , added subpar. (C) and struck out former subpar. (C) and concluding provisions which read as follows:\n“(C) any amount received or accrued, directly or indirectly, with respect to any real or personal property if the real estate investment trust furnishes or renders services to the tenants of such property, or manages or operates such property, other than through an independent contractor from whom the trust itself does not derive or receive any income.\nSubparagraph (C) shall not apply with respect to any amount if such amount would be excluded from unrelated business taxable income under section 512(b)(3) if received by an organization described in section 511(a)(2).”\nSubsec. (d)(5).  Pub. L. 105–34, §\u202f1253 , substituted “except that—” and subpars. (A) and (B) for “except that ‘10 percent’ shall be substituted for ‘50 percent’ in subparagraph (C) of section 318(a)(2) and 318(a)(3).”\nSubsec. (d)(7).  Pub. L. 105–34, §\u202f1252(b) , added par. (7).\nSubsec. (e)(2).  Pub. L. 105–34, §\u202f1257(a)(1) , which directed amendment of par. (2) by substituting “as of the close of the 3d taxable year following the taxable year in which the trust acquired such property” for “on the date which is 2 years after the date the trust acquired such property”, was executed by making the substitution for “on the date which is 2 years after the date such trust acquired such property” to reflect the probable intent of Congress.\nSubsec. (e)(3).  Pub. L. 105–34, §\u202f1257(a)(2) , substituted “grant one extension” for “grant one or more extensions” and “Any such extension shall not extend the grace period beyond the close of the 3d taxable year following the last taxable year in the period under paragraph (2).” for “Any such extension shall not extend the grace period beyond the date which is 6 years after the date such trust acquired such property.”\nSubsec. (e)(4).  Pub. L. 105–34, §\u202f1257(c) , inserted concluding provisions “For purposes of subparagraph (C), property shall not be treated as used in a trade or business by reason of any activities of the real estate investment trust with respect to such property to the extent that such activities would not result in amounts received or accrued, directly or indirectly, with respect to such property being treated as other than rents from real property.”\nSubsec. (e)(5).  Pub. L. 105–34, §\u202f1257(b) , substituted “A real estate investment trust may revoke any such election for a taxable year by filing the revocation (in the manner provided by the Secretary) on or before the due date (including any extension of time) for filing its return of tax under this chapter for the taxable year. If a trust revokes an election for any property, no election may be made by the trust under this paragraph with respect to the property for any subsequent taxable year.” for “Any such election shall be irrevocable.”\nSubsec. (i)(2).  Pub. L. 105–34, §\u202f1262 , struck out “at all times during the period such corporation was in existence” after “real estate investment trust”.\nSubsec. (j)(4).  Pub. L. 105–34, §\u202f1261(a) , added par. (4). Former par. (4) redesignated (5).\nSubsec. (j)(5).  Pub. L. 105–34, §\u202f1261(a) , redesignated par. (4) as (5).\nSubsec. (j)(5)(A)(ii).  Pub. L. 105–34, §\u202f1261(b) , inserted before period at end “or appreciation in value as of any specified date”.\nSubsec. (k).  Pub. L. 105–34, §\u202f1251(b)(1) , added subsec. (k).\n1996—Subsec. (a)(4).  Pub. L. 104–188, §\u202f1704(t)(35) , substituted “section 582(c)(2)” for “section 582(c)(5)”.\nSubsec. (c)(6)(E).  Pub. L. 104–188, §\u202f1621(b)(5) , inserted at end “The principles of the preceding provisions of this subparagraph shall apply to regular interests in a FASIT.”\n1993—Subsec. (h)(3).  Pub. L. 103–66  added par. (3).\n1988—Subsec. (c)(6)(D).  Pub. L. 100–647, §\u202f1006(t)(11) , struck out subpar. (D), as added by  Pub. L. 99–514, §\u202f671(b)(1) , which read as follows: “A regular or residual interest in a REMIC shall be treated as an interest in real property, and any amount includible in gross income with respect to such an interest shall be treated as interest; except that, if less than 95 percent of the assets of such REMIC are interests in real property (determined as if the taxpayer held such assets), such interest shall be so treated only in the proportion which the assets of the REMIC consist of such interests.”\nSubsec. (c)(6)(D)(i)(I).  Pub. L. 100–647, §\u202f1006(p)(1) , substituted “debt instrument (within the meaning of section 1275(a)(1))” for “debt instrument”.\nSubsec. (c)(6)(D)(ii)(I).  Pub. L. 100–647, §\u202f1006(p)(5) , substituted “stock (or certificates of beneficial interests) in such trust” for “stock in such trust”.\nSubsec. (c)(6)(E), (F).  Pub. L. 100–647, §\u202f1006(t)(11) , added subpar. (E) and redesignated former subpar. (E) as (F).\nSubsec. (c)(6)(G).  Pub. L. 100–647, §\u202f1006(p)(4)(A) , added subpar. (G).\nSubsec. (c)(8).  Pub. L. 100–647, §\u202f1006(p)(3) , added par. (8).\nSubsec. (d)(6)(A).  Pub. L. 100–647, §\u202f1006(q)(1) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “If—\n“(i) a real estate investment trust receives or accrues, with respect to real or personal property, amounts from a tenant which derives substantially all of its income with respect to such property from the subleasing of substantially all of such property, and\n“(ii) such tenant receives or accrues, directly or indirectly, from subtenants only amounts which are qualified rents,\nthen the amounts that the trust receives or accrues from the tenant shall not be excluded from the term ‘rents from real property’ solely by reason of being based on the income or profits of such tenant.”\nSubsec. (f).  Pub. L. 100–647, §\u202f1006(q)(2) , amended subsec. (f) generally, making changes in content and structure.\n1986—Subsec. (a)(4).  Pub. L. 99–514, §\u202f901(d)(4)(E) , substituted “referred to in section 582(c)(5)” for “to which section 585, 586, or 593 applies”.\nSubsec. (a)(6).  Pub. L. 99–514, §\u202f661(a)(1) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “which would not be a personal holding company (as defined in section 542) if all of its adjusted ordinary gross income (as defined in section 543(b)(2)) constituted personal holding company income (as defined in section 543); and”.\nSubsec. (c)(3)(I).  Pub. L. 99–514, §\u202f662(b)(1) , added subpar. (I).\nSubsec. (c)(6)(B).  Pub. L. 99–514, §\u202f662(b)(2) , inserted “Such term also includes any property (not otherwise a real estate asset) attributable to the temporary investment of new capital, but only if such property is stock or a debt instrument, and only for the 1-year period beginning on the date the real estate trust receives such capital.”\nSubsec. (c)(6)(D).  Pub. L. 99–514, §\u202f671(b)(1) , added subpar. (D) relating to REMIC interest. Former subpar. (D) redesignated (E).\nPub. L. 99–514, §\u202f662(b)(3) , added subpar. (D) relating to qualified temporary investment income. Former subpar. (D) redesignated (E).\nSubsec. (c)(6)(E).  Pub. L. 99–514 , §§\u202f662(b)(3), 671(b)(1), made identical redesignations of former subpar. (D) as (E).\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f663(a) , (b)(3), inserted reference to par. (6) in subpar. (A) and inserted at end “Subparagraph (C) shall not apply with respect to any amount if such amount would be excluded from unrelated business taxable income under section 512(b)(3) if received by an organization described in section 511(a)(2).”\nSubsec. (d)(6).  Pub. L. 99–514, §\u202f663(b)(1) , added par. (6).\nSubsec. (f).  Pub. L. 99–514, §\u202f663(b)(2) , amended subsec. (f) generally, restating former introductory provisions and par. (1) as introductory provisions of par. (1) and as subpar. (A), restating provisions of par. (2), adding subpar. (1)(B), and striking out former concluding provisions which read as follows: “The provisions of this subsection shall apply only with respect to amounts received or accrued pursuant to loans made after  May 27, 1976 . For purposes of the preceding sentence, a loan is considered to be made before  May 28, 1976 , if such loan is made pursuant to a binding commitment entered into before  May 28, 1976 .”\nSubsec. (h).  Pub. L. 99–514, §\u202f661(a)(2) , added subsec. (h).\nSubsec. (i).  Pub. L. 99–514, §\u202f662(a) , added subsec. (i).\nSubsec. (j).  Pub. L. 99–514, §\u202f662(c) , added subsec. (j).\n1984—Subsec. (c)(4)(A).  Pub. L. 98–369  substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1978—Subsec. (c)(2)(H).  Pub. L. 95–600, §\u202f363(a)(1) , added subpar. (H).\nSubsec. (c)(3)(D).  Pub. L. 95–600, §\u202f701(t)(2) , inserted “(other than gain from prohibited transactions)” after “on, and gain”.\nSubsec. (c)(3)(H).  Pub. L. 95–600, §\u202f363(a)(2) , added subpar. (H).\nSubsec. (c)(4)(B).  Pub. L. 95–600, §\u202f363(a)(3) , substituted “property in a transaction which is a prohibited transaction” for “section 1221(1) property (other than foreclosure property)”.\nSubsec. (e)(3).  Pub. L. 95–600, §\u202f363(c) , substituted “the Secretary may grant one or more extensions of the grace period for such property” for “the Secretary may extend the grace period for such property” and “shall not extend the grace period beyond the date which is 6 years after the date such trust acquired such property” for “shall be for a period of not more than one year, and not more than two extensions shall be granted with respect to any property”.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1603(a), 1604(f)(1), (2), in introductory provisions substituted “this title” for “this subtitle” and “a corporation, trust, or association” for “an unincorporated trust or an unincorporated association”, in par. (1) inserted “or directors” after “trustees”, and in par. (4) substituted reference to which is neither (A) a financial institution to which section 585, 586, or 593 applies, nor (B) an insurance company to which subchapter L applies for reference to which does not hold any property primarily for sale to customers in the ordinary course of its trade or business.\nSubsec. (c).  Pub. L. 94–455, §\u202f1604(f)(3)(A) , in introductory provision substituted “A corporation, trust, or association” for “A trust or association”.\nSubsec. (c)(1).  Pub. L. 94–455 , §§\u202f1604(k)(2)(A), 1901(a)(111)(A), struck out reference to which began after  Dec. 31, 1960  and inserted reference to such election has not been terminated or revoked under subsec. (g).\nSubsec. (c)(2).  Pub. L. 94–455 , §§\u202f1603(c)(2), 1604(a), (c)(1), in introductory provision substituted “95 percent (90 percent for taxable years beginning before  January 1, 1980 ) of its gross income (excluding gross income from prohibited transactions)” for “90 percent of its gross income”, in subpar. (D) inserted reference to which is not property not described in section 1221(1), and added subpar. (G).\nSubsec. (c)(3).  Pub. L. 94–455 , §§\u202f1603(c)(1), (3), 1604(c)(1), in introductory provision inserted “(excluding gross income from prohibited transactions) 75 percent of its gross income”, in subpar. (C) inserted reference to which is not property described in section 1221(1), and added subpar. (G).\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455 , §§\u202f1402(b)(1)(O), 1604(d), in subpar. (A) provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977, added subpar. (B), and redesignated former subpar. (B) as (C), and in subpar. (C) as so redesignated, substituted “(including interest in real property and interest in mortgages on real property” for “(including interest in real property)” and inserted reference to property which is foreclosure property within the definition of section 856(e).\nSubsec. (c)(6)(C).  Pub. L. 94–455, §\u202f1604(e) , inserted reference to options to acquire land or improvements thereon, and options to acquire leaseholds of land or improvements thereon.\nSubsec. (c)(6)(D).  Pub. L. 94–455, §\u202f1901(a)(111)(B) , inserted “( 15 U.S.C. 80a–1  and following)” after “,\u2000as amended”.\nSubsec. (c)(7).  Pub. L. 94–455, §\u202f1602(a) , added par. (7).\nSubsec. (d).  Pub. L. 94–455, §\u202f1604(b) , among other changes, inserted provisions including in definition of rents from real property charges for services customarily furnished or rendered in connection with rental of real property and rent attributable to personal property which is leased under, or in connection with, a lease of real property, provisions relating to the computation of the amount of rent attributable to personal property, and provisions relating to the special rule for certain contingent rents.\nSubsec. (e)(1).  Pub. L. 94–455, §\u202f1603(c)(4) , inserted provision relating to the exclusion, from definition of foreclosure property, of property acquired by the real estate investment trust or other disposition of property of the trust described in  section 1221(1) of this title .\nSubsec. (e)(3), (5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” each time appearing.\nSubsec. (f).  Pub. L. 94–455, §\u202f1604(g) , added subsec. (f).\nSubsec. (g).  Pub. L. 94–455, §\u202f1604(k)(1) , added subsec. (g).\n1975—Subsec. (a)(4).  Pub. L. 93–625, §\u202f6(b) , inserted “(other than foreclosure property, as defined in subsection (e))” after “property”.\nSubsec. (c)(2)(F), (3)(F).  Pub. L. 93–625, §\u202f6(d)(1) , added subpar. (F) to pars. (2) and (3).\nSubsec. (e).  Pub. L. 93–625, §\u202f6(a) , added subsec. (e).\n1964—Subsec. (a)(6).  Pub. L. 88–272  substituted “adjusted ordinary gross income (as defined in section 543(b)(2))” for “gross income”.\nSubsec. (d).  Pub. L. 88–554  inserted reference to subparagraph (C) of  section 318(a)(3) of this title .\nAmendment by  section 101(n) of Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  section 311(b) of Pub. L. 114–113  applicable to distributions on or after  December 7, 2015 , except distributions pursuant to transactions described in ruling requests pending before the Internal Revenue Service as of such date, see  section 311(c) of Pub. L. 114–113 , set out as a note under  section 355 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f312(b) ,  Dec. 18, 2015 ,  129 Stat. 3091 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 114–113, div. Q, title III, §\u202f317(c) ,  Dec. 18, 2015 ,  129 Stat. 3094 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title III, §\u202f318(b) ,  Dec. 18, 2015 ,  129 Stat. 3095 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title III, §\u202f319(c) ,  Dec. 18, 2015 ,  129 Stat. 3096 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 114–113, div. Q, title III, §\u202f321(c) ,  Dec. 18, 2015 ,  129 Stat. 3098 , provided that:  “The amendments made by this section [amending this section and  section 857 of this title ] shall apply to taxable years beginning after  December 31, 2015 .”\nPub. L. 110–289, div. C, title II, §\u202f3071 ,  July 30, 2008 ,  122 Stat. 2902 , provided that: \n “(a)   In General .— Except as otherwise provided in this section, the amendments made by this title [amending this section and  section 857 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(b)  REIT  Income Tests.— “(1)  The amendments made by section 3031(a) and (c) [amending this section] shall apply to gains and items of income recognized after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(2)  The amendment made by section 3031(b) [amending this section] shall apply to transactions entered into after the date of the enactment of this Act [ July 30, 2008 ]. \n \n \n “(c)   Conforming Foreign Currency Revisions.— “(1)  The amendment made by section 3033(a) [amending  section 857 of this title ] shall apply to gains recognized after the date of the enactment of this Act [ July 30, 2008 ]. \n \n “(2)  The amendment made by section 3033(b) [amending  section 857 of this title ] shall apply to gains and deductions recognized after the date of the enactment of this Act [ July 30, 2008 ]. \n \n \n “(d)   Dealer Sales .— The amendments made by subtitle C [subtitle C (§§\u202f3051, 3052) of title II of div. C of  Pub. L. 110–289 , amending  section 857 of this title ] shall apply to sales made after the date of the enactment of this Act [ July 30, 2008 ].”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15312(c) ,  May 22, 2008 ,  122 Stat. 1504 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15312(c),  June 18, 2008 ,  122 Stat. 1664 , 2266, provided that:  “The amendments made by subsection (a) [amending this section] shall apply to dispositions in taxable years beginning after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–234, title XV, §\u202f15313(c) ,  May 22, 2008 ,  122 Stat. 1504 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15313(c),  June 18, 2008 ,  122 Stat. 1664 , 2266, provided that:  “The amendments by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–234, title XV, §\u202f15314(b) ,  May 22, 2008 ,  122 Stat. 1504 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15314(b),  June 18, 2008 ,  122 Stat. 1664 , 2266, provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nAmendment by  section 9(b) of Pub. L. 110–172  effective as if included in the provision of the Tax Relief Extension Act of 1999,  Pub. L. 106–170 , to which such amendment relates, see  section 9(c) of Pub. L. 110–172 , set out as a note under  section 45 of this title .\nAmendments by section 403(d)(1), (2) of  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title II, §\u202f243(g) ,  Oct. 22, 2004 ,  118 Stat. 1445 , as amended by  Pub. L. 109–135, title IV, §\u202f403(d)(4) ,  Dec. 21, 2005 ,  119 Stat. 2622 , provided that: \n “(1)   Subsections  (a)  and  (b).— The amendments made by subsections (a) and (b) [amending this section] shall apply to taxable years beginning after  December 31, 2000 . \n \n “(2)   Subsections  (c)  and  (e).— The amendments made by subsections (c) and (e) [amending  section 857 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(3)   Subsection  (d).— The amendment made by subsection (d) [amending this section] shall apply to transactions entered into after  December 31, 2004 . \n \n “(4)   Subsection  (f).— “(A)  The amendment made by paragraph (1) of subsection (f) [amending this section] shall apply to failures with respect to which the requirements of subparagraph (A) or (B) of section 856(c)(7) of the Internal Revenue Code of 1986 (as added by such paragraph) are satisfied after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(B)  The amendment made by paragraph (2) of subsection (f) [amending this section] shall apply to failures with respect to which the requirements of paragraph (6) of section 856(c) of the Internal Revenue Code of 1986 (as amended by such paragraph) are satisfied after the date of the enactment of this Act. \n \n “(C)  The amendments made by paragraph (3) of subsection (f) [amending this section] shall apply to failures with respect to which the requirements of paragraph (5) of section 856(g) of the Internal Revenue Code of 1986 (as added by such paragraph) are satisfied after the date of the enactment of this Act. \n \n “(D)  The amendment made by paragraph (4) of subsection (f) [amending  section 857 of this title ] shall apply to taxable years ending after the date of the enactment of this Act. \n \n “(E)  The amendments made by paragraph (5) of subsection (f) [amending  section 860 of this title ] shall apply to statements filed after the date of the enactment of this Act.”\nAmendment by  section 835(b)(4) of Pub. L. 108–357  effective  Jan. 1, 2005 , with exception for any FASIT in existence on  Oct. 22, 2004 , to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance, see  section 835(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by section 532(c)(2)(H)–(K) of  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 106–170, title V, §\u202f542(b)(3)(A)(ii) ,  Dec. 17, 1999 ,  113 Stat. 1943 , provided that:  “The amendment made by this subparagraph [amending this section] shall apply to taxable years beginning after  December 31, 2000 .”\nPub. L. 106–170, title V, §\u202f542(b)(3)(B)(ii) ,  Dec. 17, 1999 ,  113 Stat. 1943 , provided that:  “The amendment made by this subparagraph [amending this section] shall apply to amounts received or accrued in taxable years beginning after  December 31, 2000 , except for amounts paid pursuant to leases in effect on  July 12, 1999 , or pursuant to a binding contract in effect on such date and at all times thereafter.”\nPub. L. 106–170, title V, §\u202f546 ,  Dec. 17, 1999 ,  113 Stat. 1946 , provided that: \n “(a)   In General .— The amendments made by this subpart [subpart A (§§\u202f541–547) of part II of subtitle C of title V of  Pub. L. 106–170 , amending this section and sections 163 and 857 of this title] shall apply to taxable years beginning after  December 31, 2000 . \n \n “(b)   Transitional Rules Related to Section  541.— “(1)   Existing arrangements.— “(A)   In general .— Except as otherwise provided in this paragraph, the amendment made by section 541 [amending this section] shall not apply to a real estate investment trust with respect to— “(i)  securities of a corporation held directly or indirectly by such trust on  July 12, 1999 ; \n \n “(ii)  securities of a corporation held by an entity on  July 12, 1999 , if such trust acquires control of such entity pursuant to a written binding contract in effect on such date and at all times thereafter before such acquisition; \n \n “(iii)  securities received by such trust (or a successor) in exchange for, or with respect to, securities described in clause (i) or (ii) in a transaction in which gain or loss is not recognized; and \n \n “(iv)  securities acquired directly or indirectly by such trust as part of a reorganization (as defined in section 368(a)(1) of the Internal Revenue Code of 1986) with respect to such trust if such securities are described in clause (i), (ii), or (iii) with respect to any other real estate investment trust. \n \n \n “(B)   New trade or business or substantial new assets .— Subparagraph (A) shall cease to apply to securities of a corporation as of the first day after  July 12, 1999 , on which such corporation engages in a substantial new line of business, or acquires any substantial asset, other than— “(i)  pursuant to a binding contract in effect on such date and at all times thereafter before the acquisition of such asset; \n \n “(ii)  in a transaction in which gain or loss is not recognized by reason of section 1031 or 1033 of the Internal Revenue Code of 1986; or \n \n “(iii)  in a reorganization (as so defined) with another corporation the securities of which are described in paragraph (1)(A) of this subsection. \n \n \n “(C)   Limitation on transition rules .— Subparagraph (A) shall cease to apply to securities of a corporation held, acquired, or received, directly or indirectly, by a real estate investment trust as of the first day after  July 12, 1999 , on which such trust acquires any additional securities of such corporation other than— “(i)  pursuant to a binding contract in effect on  July 12, 1999 , and at all times thereafter; or \n \n “(ii)  in a reorganization (as so defined) with another corporation the securities of which are described in paragraph (1)(A) of this subsection. \n \n \n \n “(2)   Tax-free conversion .— If— “(A)  at the time of an election for a corporation to become a taxable REIT subsidiary, the amendment made by section 541 does not apply to such corporation by reason of paragraph (1); and \n \n “(B)  such election first takes effect before  January 1, 2004 , \n \n\n such election shall be treated as a reorganization qualifying under section 368(a)(1)(A) of such Code.”\nPub. L. 106–170, title V, §\u202f551(b) ,  Dec. 17, 1999 ,  113 Stat. 1949 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2000 .”\nPub. L. 106–170, title V, §\u202f561(b) ,  Dec. 17, 1999 ,  113 Stat. 1950 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2000 .”\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning after  Aug. 5, 1997 , see  section 1263 of Pub. L. 105–34 , set out as a note under  section 852 of this title .\nAmendment by  section 1621(b)(5) of Pub. L. 104–188  effective  Sept. 1, 1997 , see  section 1621(d) of Pub. L. 104–188 , set out as a note under  section 26 of this title .\nPub. L. 103–66, title XIII, §\u202f13149(b) ,  Aug. 10, 1993 ,  107 Stat. 446 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1993 .”\nPub. L. 100–647, title I, §\u202f1006(p)(2) ,  Nov. 10, 1988 ,  102 Stat. 3416 , provided that:  “Notwithstanding section 669 of the Reform Act [ Pub. L. 99–514 , set out below], the amendment made by section 662(c) of the Reform Act [amending this section] shall apply to taxable years beginning after  December 31, 1986 , but only in the case of obligations acquired after  October 22, 1986 .”\nPub. L. 100–647, title I, §\u202f1006(p)(4)(B) ,  Nov. 10, 1988 ,  102 Stat. 3417 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by section 1006(p)(1), (3), (5), (q), (t)(11) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f669 ,  Oct. 22, 1986 ,  100 Stat. 2308 , as amended by  Pub. L. 100–647, title I, §\u202f1018(u)(29) ,  Nov. 10, 1988 ,  102 Stat. 3591 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this subtitle [subtitle G (§§\u202f661–668) of title VI of  Pub. L. 99–514 , amending this section and sections 857 to 860, 4981, and 6697 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(b)   Section  668.— The amendments made by section 668 [amending sections 857, 858, and 4981 of this title] shall apply to calendar years beginning after  December 31, 1986 . \n \n “(c)   Retention of Existing Transitional Rule .— The amendment made by section 663(b)(2) [amending this section] shall not apply with respect to amounts received or accrued pursuant to loans made before  May 28, 1976 . For purposes of the preceding sentence, a loan is considered to be made before  May 28, 1976 , if such loan is made pursuant to a binding commitment entered into before  May 28, 1976 .”\nAmendment by  section 671(b)(1) of Pub. L. 99–514  effective  Jan. 1, 1987 , see  section 675(a) of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 860A of this title .\nAmendment by  section 901(d)(4)(E) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 95–600, title II, §\u202f363(d) ,  Nov. 6, 1978 ,  92 Stat. 2854 , provided that:  “The amendments made by subsections (a) [amending this section] and (b) [amending  section 857 of this title ] shall apply to taxable years ending after the date of the enactment of this Act [ Nov. 6, 1978 ]. The amendment made by subsection (c) [amending this section] shall apply to extensions granted after the date of the enactment of this Act with respect to periods beginning after  December 31, 1977 .”\nAmendment by  section 701(t)(2) of Pub. L. 95–600  effective  Oct. 4, 1976 , see  section 701(t)(5) of Pub. L. 95–600 , set out as a note under  section 859 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 94–455, title XVI, §\u202f1608(d) ,  Oct. 4, 1976 ,  90 Stat. 1758 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as provided in paragraphs (2) and (3), the amendments made by sections 1603, 1604, and 1605 [enacting sections 860 and 4981 of this title and amending this section and sections 275, 857, 858, 6161, 6211 to 6214, 6344, 6512, 6601, and 7422 of this title] shall apply to taxable years of real estate investment trusts beginning after the date of the enactment of this Act [ Oct. 4, 1976 ]. \n \n “(2)  If, as a result of a determination (as defined in section 859(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), occurring after the date of enactment of this Act [ Oct. 4, 1976 ], with respect to the real estate investment trust, such trust does not meet the requirement of section 856(a)(4) of the Internal Revenue Code of 1986 (as in effect before the amendment of such section by this Act) for any taxable year beginning on or before the date of the enactment of this Act, such trust may elect, within 60 days after such determination in the manner provided in regulations prescribed by the Secretary of the Treasury or his delegate, to have the provisions of section 1603 (other than paragraphs (1), (2), (3), and (4) of section 1603(c)) apply with respect to such taxable year. Where the provisions of section 1603 apply to a real estate investment trust with respect to any taxable year beginning on or before the date of the enactment of this Act— “(A)  credit or refund of any overpayment of tax which results from the application of section 1603 to such taxable year shall be made as if on the date of the determination (as defined in section 859(c) of the Internal Revenue Code of 1986) 2 years remained before the expiration of the period of limitation prescribed by section 6511 of such Code on the filing of claim for refund for the taxable year to which the overpayment relates, \n \n “(B)  the running of the statute of limitations provided in section 6501 of such Code on the making of assessments, and the bringing of distraint or a proceeding in court for collection, in respect of any deficiency (as defined in section 6211 of such Code) established by such a determination, and all interest, additions to tax, additional amounts, or assessable penalties in respect thereof, shall be suspended for a period of 2 years after the date of such determination, and \n \n “(C)  the collection of any deficiency (as defined in section 6211 of such Code) established by such determination and all interest, additions to tax, additional amounts, and assessable penalties in respect thereof shall, except in cases of jeopardy, be stayed until the expiration of 60 days after the date of such determination. \n \n\n No distraint or proceeding in court shall be begun for the collection of an amount the collection of which is stayed under subparagraph (C) during the period for which the collection of such amount is stayed. \n \n “(3)  Section 856(g)(3) of the Internal Revenue Code of 1986, as added by section 1604 of this Act, shall not apply with respect to a termination of an election, filed by a taxpayer under section 856(c)(1) of such Code on or before the date of the enactment of this Act [ Oct. 4, 1976 ], unless the provisions of part II of subchapter M of chapter 1 of subtitle A of such Code apply to such taxpayer for a taxable year ending after the date of the enactment of this Act for which such election is in effect.”\nPub. L. 93–625, §\u202f6(e) ,  Jan. 3, 1975 ,  88 Stat. 2114 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and  section 857 of this title ] apply to foreclosure property acquired after  December 31, 1973 . Notwithstanding the provisions of section 856(e)(5) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a) of this section) any taxpayer required to make an election with respect to foreclosure property sooner than 90 days after the date of enactment of this Act [ Jan. 3, 1975 ], may make that election at any time before the 91st day after the date of enactment of this Act.”\nAmendment by  Pub. L. 88–554  effective  Aug. 31, 1964 , except that for purposes of sections 302 and 304 of this title, such amendments shall not apply to distributions in payment for stock acquisitions or redemptions, if such acquisitions or redemptions occurred before  Aug. 31, 1964 , see  section 4(c) of Pub. L. 88–554 , set out as a note under  section 318 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272 , set out as a note under  section 316 of this title .\nPub. L. 86–779, §\u202f10(k) ,  Sept. 14, 1960 ,  74 Stat. 1009 , provided that:  “The amendments made by this section [enacting this section and sections 857 and 858 and amending sections 11, 34, 116, 243, 318, 443, 852, 855, and 1504 of this title] shall apply with respect to taxable years of real estate investment trusts beginning after  December 31, 1960 .”\nFor provisions that nothing in amendment by  section 401(b)(28) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 106–170, title V, §\u202f547 ,  Dec. 17, 1999 ,  113 Stat. 1947 , provided that:  “The Secretary of the Treasury shall conduct a study to determine how many taxable REIT subsidiaries are in existence and the aggregate amount of taxes paid by such subsidiaries. The Secretary shall submit a report to the Congress describing the results of such study.”\nPub. L. 94–455, title XVI, §\u202f1608(b) ,  Oct. 4, 1976 ,  90 Stat. 1757 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by section 1602 [amending this section and  section 857 of this title ] shall apply to taxable years of real estate investment trusts beginning after the date of the enactment of this Act [ Oct. 4, 1976 ]. In addition, the amendments made by section 1602 shall apply to a taxable year of a real estate investment trust beginning before the date of the enactment of this Act if, as the result of a determination (as defined in section 859(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) with respect to such trust occurring after the date of the enactment of this Act, such trust for such taxable years does not meet the requirements of section 856(c)(2) or section 856(c)(3), or of both such sections, of such Code as in effect for such taxable year. In any case, the amendment made by section 1602(a) requiring a schedule to be attached to the income tax return of certain real estate investment trusts shall apply only to taxable years of such trusts beginning after the date of the enactment of this Act. If the amendments made by section 1602 apply to a taxable year ending on or before the date of enactment of this Act, the reference to paragraph (2)(B) in section 857(b)(5) of such Code, as amended, shall be considered to be a reference to paragraph (2)(C) of section 857(b) of such Code, as in effect immediately before the enactment of this Act.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE INVESTMENT TRUSTS'},
  'content': 'There is hereby imposed for each taxable year on the real estate investment trust taxable income of every real estate investment trust a tax computed as provided in section 11, as though the real estate investment trust taxable income were the taxable income referred to in section 11.\nA capital gain dividend shall be treated by the shareholders or holders of beneficial interests as a gain from the sale or exchange of a capital asset held for more than 1 year.\nFor purposes of this part, a capital gain dividend is any dividend, or part thereof, which is designated by the real estate investment trust as a capital gain dividend in a written notice mailed to its shareholders or holders of beneficial interests at any time before the expiration of 30 days after the close of its taxable year (or mailed to its shareholders or holders of beneficial interests with its annual report for the taxable year); except that, if there is an increase in the excess described in subparagraph (A)(ii) of this paragraph for such year which results from a determination (as defined in section 860(e)), such designation may be made with respect to such increase at any time before the expiration of 120 days after the date of such determination. If the aggregate amount so designated with respect to a taxable year of the trust (including capital gain dividends paid after the close of the taxable year described in section 858) is greater than the net capital gain of the taxable year, the portion of each distribution which shall be a capital gain dividend shall be only that proportion of the amount so designated which such net capital gain bears to the aggregate amount so designated. For purposes of this subparagraph, the amount of the net capital gain for any taxable year which is not a calendar year shall be determined without regard to any net capital loss attributable to transactions after December 31 of such year, and any such net capital loss shall be treated as arising on the 1st day of the next taxable year. To the extent provided in regulations, the preceding sentence shall apply also for purposes of computing the taxable income of the real estate investment trust.\nFor purposes of this paragraph, the term “undistributed capital gain” means the excess of the net capital gain over the deduction for dividends paid (as defined in section 561) determined with reference to capital gain dividends only.\nA tax is hereby imposed for each taxable year on the net income from foreclosure property of every real estate investment trust. Such tax shall be computed by multiplying the net income from foreclosure property by the highest rate of tax specified in section 11(b).\nThere is hereby imposed for each taxable year of every real estate investment trust a tax equal to 100 percent of the net income derived from prohibited transactions.\nThe determination of whether property is described in section 1221(a)(1) shall be made without regard to this paragraph.\nIn the case of a sale on or before the termination date, the sale of property which is not a prohibited transaction through the application of subparagraph (D) shall be considered property held for investment or for use in a trade or business and not property described in section 1221(a)(1) for all purposes of this subtitle. For purposes of the preceding sentence, the reference to subparagraph (D) shall be a reference to such subparagraph as in effect on the day before the enactment of the Housing Assistance Tax Act of 2008, as modified by subparagraph (G) as so in effect.\nFor purposes of this paragraph, the term “termination date” has the meaning given such term by section 856(c)(10).\nThere is hereby imposed for each taxable year of the real estate investment trust a tax equal to 100 percent of redetermined rents, redetermined deductions, excess interest, and redetermined TRS service income.\nThe term “redetermined rents” means rents from real property (as defined in section 856(d)) to the extent the amount of the rents would (but for subparagraph (F)) be reduced on distribution, apportionment, or allocation under section 482 to clearly reflect income as a result of services furnished or rendered by a taxable REIT subsidiary of the real estate investment trust to a tenant of such trust.\nClause (i) shall not apply to amounts described in section 856(d)(7)(A) with respect to a property to the extent such amounts do not exceed the one percent threshold described in section 856(d)(7)(B) with respect to such property.\nClause (i) shall not apply to any service rendered by a taxable REIT subsidiary of a real estate investment trust to a tenant of such trust if the gross income of such subsidiary from such service is not less than 150 percent of such subsidiary’s direct cost in furnishing or rendering the service.\nThe Secretary may waive the tax otherwise imposed by subparagraph (A) if the trust establishes to the satisfaction of the Secretary that rents charged to tenants were established on an arms’ length basis even though a taxable REIT subsidiary of the trust provided services to such tenants.\nThe term “redetermined deductions” means deductions (other than redetermined rents) of a taxable REIT subsidiary of a real estate investment trust to the extent the amount of such deductions would (but for subparagraph (F)) be decreased on distribution, apportionment, or allocation under section 482 to clearly reflect income as between such subsidiary and such trust.\nThe term “excess interest” means any deductions for interest payments by a taxable REIT subsidiary of a real estate investment trust to such trust to the extent that the interest payments are in excess of a rate that is commercially reasonable.\nThe term “redetermined TRS service income” means gross income of a taxable REIT subsidiary of a real estate investment trust attributable to services provided to, or on behalf of, such trust (less deductions properly allocable thereto) to the extent the amount of such income (less such deductions) would (but for subparagraph (F)) be increased on distribution, apportionment, or allocation under section 482.\nClause (i) shall not apply with respect to gross income attributable to services furnished or rendered to a tenant of the real estate investment trust (or to deductions properly allocable thereto).\nThe imposition of tax under subparagraph (A) shall be in lieu of any distribution, apportionment, or allocation under section 482.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph. Until the Secretary prescribes such regulations, real estate investment trusts and their taxable REIT subsidiaries may base their allocations on any reasonable method.\nTo the extent provided in regulations, subparagraph (A) shall not apply to any loss incurred on the sale or exchange of shares of stock of, or beneficial interest in, a real estate investment trust pursuant to a plan which provides for the periodic liquidation of such shares or interests.\nFor purposes of section 243 (relating to deductions for dividends received by corporations), a dividend received from a real estate investment trust which meets the requirements of this part shall not be considered a dividend.\nThe amount of any distribution by a real estate investment trust which may be taken into account as qualified dividend income shall not exceed the amount so designated by the trust in a written notice to its shareholders mailed not later than 60 days after the close of its taxable year.\nFor purposes of this paragraph, the term “qualified dividend income” has the meaning given such term by section 1(h)(11)(B).\nA real estate investment trust shall be treated as having sufficient earnings and profits to treat as a dividend any distribution (other than in a redemption to which section 302(a) applies) which is treated as a dividend by such trust. The preceding sentence shall not apply to the extent that the amount distributed during any calendar year by the trust exceeds the required distribution for such calendar year (as determined under section 4981).\nFor purposes of this subsection, the term “real estate investment trust” includes a domestic corporation, trust, or association which is a real estate investment trust determined without regard to the requirements of subsection (a).\nFor special rules for determining the earnings and profits of a real estate investment trust for purposes of the deduction for dividends paid, see section 562(e)(1).\nEach real estate investment trust shall each taxable year comply with regulations prescribed by the Secretary for the purposes of ascertaining the actual ownership of the outstanding shares, or certificates of beneficial interest, of such trust.\nIf a real estate investment trust fails to comply with the requirements of paragraph (1) for a taxable year, such trust shall pay (on notice and demand by the Secretary and in the same manner as tax) a penalty of $25,000.\nIf any failure under paragraph (1) is due to intentional disregard of the requirement under paragraph (1), the penalty under subparagraph (A) shall be $50,000.\nThe Secretary may require a real estate investment trust to take such actions as the Secretary determines appropriate to ascertain actual ownership if the trust fails to meet the requirements of paragraph (1). If the trust fails to take such actions, the trust shall pay (on notice and demand by the Secretary and in the same manner as tax) an additional penalty equal to the penalty determined under subparagraph (A) or (B), whichever is applicable.\nNo penalty shall be imposed under this paragraph with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.\nThe aggregate amount of dividends designated by a real estate investment trust under subsections (b)(3)(C) and (c)(2)(A) with respect to any taxable year may not exceed the dividends paid by such trust with respect to such year. For purposes of the preceding sentence, dividends paid after the close of the taxable year described in section 858 shall be treated as paid with respect to such year.\nThe Secretary may prescribe regulations or other guidance requiring the proportionality of the designation of particular types of dividends among shares or beneficial interests of a real estate investment trust.\nFor provisions relating to excise tax based on certain real estate investment trust taxable income not distributed during the taxable year, see section 4981.\nThe date of enactment of the Housing Assistance Tax Act of 2008, referred to in subsec. (b)(6)(I), is the date of enactment of div. C of  Pub. L. 110–289 , which was approved  July 30, 2008 .\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2018—Subsec. (b)(6)(J).  Pub. L. 115–141  substituted “section 856(c)(10)” for “section 856(c)(8)”.\n2017—Subsec. (b)(3)(A), (B).  Pub. L. 115–97, §\u202f13001(b)(2)(K)(i) , redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which related to alternative tax in case of capital gains.\nSubsec. (b)(3)(C).  Pub. L. 115–97, §\u202f13001(b)(2)(K)(i) , redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).\nSubsec. (b)(3)(C)(i), (ii), (iv).  Pub. L. 115–97, §\u202f13001(b)(2)(K)(ii) , substituted “paragraph (1)” for “subparagraph (A)(ii)” in cl. (i) and “the tax imposed by paragraph (1) on undistributed capital gain” for “the tax imposed by subparagraph (A)(ii)” in cls. (ii) and (iv).\nSubsec. (b)(3)(D).  Pub. L. 115–97, §\u202f13001(b)(2)(K)(i) , redesignated subpar. (E) as (D). Former subpar. (D) redesignated (C).\nSubsec. (b)(3)(E).  Pub. L. 115–97, §\u202f13001(b)(2)(K)(i) , (iii), redesignated subpar. (F) as (E) and substituted “subparagraph (A) or (C)” for “subparagraph (B) or (D)”. Former subpar. (E) redesignated (D).\nSubsec. (b)(3)(F).  Pub. L. 115–97, §\u202f13001(b)(2)(K)(iv) , added subpar. (F). Former subpar. (F) redesignated (E).\n2015—Subsec. (b)(3)(F).  Pub. L. 114–113, §\u202f322(a)(2)(B) , inserted “or subparagraph (A)(ii) or (C) of section 897(k)(2)” after “897(h)(1)”.\nSubsec. (b)(6)(C).  Pub. L. 114–113, §\u202f313(b)(1) , in introductory provisions, struck out “and which is described in section 1221(a)(1)” after “(as defined in section 856(c)(5)(B))”.\nSubsec. (b)(6)(C)(iii)(IV), (V).  Pub. L. 114–113, §\u202f313(a)(1) , added subcls. (IV) and (V).\nSubsec. (b)(6)(C)(v).  Pub. L. 114–113, §\u202f321(a)(1) , inserted “or a taxable REIT subsidiary” before period at end.\nSubsec. (b)(6)(D).  Pub. L. 114–113, §\u202f313(b)(1) , in introductory provisions, struck out “and which is described in section 1221(a)(1)” after “(as defined in section 856(c)(5)(B))”.\nSubsec. (b)(6)(D)(iv)(IV), (V).  Pub. L. 114–113, §\u202f313(a)(3) , added subcls. (IV) and (V).\nSubsec. (b)(6)(D)(v).  Pub. L. 114–113, §\u202f321(a)(2) , struck out “,\u2000in the case of a sale on or before the termination date,” before “a taxable REIT subsidiary”.\nSubsec. (b)(6)(F).  Pub. L. 114–113, §\u202f313(b)(2) , amended subpar. (F) generally. Prior to amendment, text read as follows: “In determining whether or not any sale constitutes a ‘prohibited transaction’ for purposes of subparagraph (A), the fact that such sale does not meet the requirements of subparagraph (C) or (D) shall not be taken into account; and such determination, in the case of a sale not meeting such requirements, shall be made as if subparagraphs (C), (D), and (E) had not been enacted.”\nSubsec. (b)(6)(G) to (J).  Pub. L. 114–113, §\u202f313(a)(2) , added subpars. (G) and (H) and redesignated former subpars. (G) and (H) as (I) and (J), respectively.\nSubsec. (b)(7)(A).  Pub. L. 114–113, §\u202f321(b)(1) , substituted “excess interest, and redetermined TRS service income” for “and excess interest”.\nSubsec. (b)(7)(B)(i), (C).  Pub. L. 114–113, §\u202f321(b)(3) , substituted “subparagraph (F)” for “subparagraph (E)”.\nSubsec. (b)(7)(E) to (G).  Pub. L. 114–113, §\u202f321(b)(2) , added subpar. (E) and redesignated former subpars. (E) and (F) as (F) and (G), respectively.\nSubsec. (d)(1).  Pub. L. 114–113, §\u202f320(a)(1) , amended par. (1) generally. Prior to amendment, text read as follows: “The earnings and profits of a real estate investment trust for any taxable year (but not its accumulated earnings) shall not be reduced by any amount which is not allowable in computing its taxable income for such taxable year. For purposes of this subsection, the term ‘real estate investment trust’ includes a domestic corporation, trust, or association which is a real estate investment trust determined without regard to the requirements of subsection (a).”\nSubsec. (d)(4), (5).  Pub. L. 114–113, §\u202f320(a)(2) , added pars. (4) and (5).\nSubsecs. (g), (h).  Pub. L. 114–113, §\u202f316(a) , added subsec. (g) and redesignated former subsec. (g) as (h).\n2008—Subsec. (b)(3)(A)(ii).  Pub. L. 110–246, §\u202f15311(c) , substituted “rates” for “rate”.\nSubsec. (b)(4)(B)(i).  Pub. L. 110–289, §\u202f3033(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “gain from the sale or other disposition of foreclosure property described in section 1221(a)(1) and the gross income for the taxable year derived from foreclosure property (as defined in section 856(e)), but only to the extent such gross income is not described in subparagraph (A), (B), (C), (D), (E), or (G) of section 856(c)(3), over”.\nSubsec. (b)(6)(B)(i).  Pub. L. 110–289, §\u202f3033(b) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the term ‘net income derived from prohibited transactions’ means the excess of the gain from prohibited transactions over the deductions allowed by this chapter which are directly connected with prohibited transactions;”.\nSubsec. (b)(6)(C).  Pub. L. 110–289, §\u202f3051(a)(3) , substituted “real estate asset (as defined in section 856(c)(5)(B)) and which is described in section 1221(a)(1) if” for “real estate asset as defined in section 856(c)(5)(B) if” in introductory provisions.\nSubsec. (b)(6)(C)(i).  Pub. L. 110–289, §\u202f3051(a)(1) , substituted “2 years” for “4 years”.\nSubsec. (b)(6)(C)(ii).  Pub. L. 110–289, §\u202f3051(a)(2) , substituted “2-year period” for “4-year period”.\nSubsec. (b)(6)(C)(iii)(III).  Pub. L. 110–289, §\u202f3052(1) , added subcl. (III).\nSubsec. (b)(6)(C)(iv).  Pub. L. 110–289, §\u202f3051(a)(1) , substituted “2 years” for “4 years”.\nSubsec. (b)(6)(D).  Pub. L. 110–289, §\u202f3051(a)(3) , substituted “real estate asset (as defined in section 856(c)(5)(B)) and which is described in section 1221(a)(1) if” for “real estate asset (as defined in section 856(c)(5)(B)) if” in introductory provisions.\nSubsec. (b)(6)(D)(i).  Pub. L. 110–289, §\u202f3051(a)(1) , substituted “2 years” for “4 years”.\nSubsec. (b)(6)(D)(ii), (iii).  Pub. L. 110–289, §\u202f3051(a)(2) , substituted “2-year period” for “4-year period” in introductory provisions.\nSubsec. (b)(6)(D)(iv)(III).  Pub. L. 110–289, §\u202f3052(2) , added subcl. (III).\nSubsec. (b)(6)(D)(v).  Pub. L. 110–246, §\u202f15315(b) , inserted “,\u2000or, in the case of a sale on or before the termination date, a taxable REIT subsidiary” after “any income”.\nSubsec. (b)(6)(G).  Pub. L. 110–289, §\u202f3051(b) , redesignated subpar. (H) as (G), inserted at end “For purposes of the preceding sentence, the reference to subparagraph (D) shall be a reference to such subparagraph as in effect on the day before the enactment of the Housing Assistance Tax Act of 2008, as modified by subparagraph (G) as so in effect.”, and struck out former subpar. (G). Prior to amendment, text of subpar. (G) read as follows:\n“(i)  In general .—In the case of the sale of a real estate asset (as defined in section 856(c)(5)(B)) to a qualified organization (as defined in section 170(h)(3)) exclusively for conservation purposes (within the meaning of section 170(h)(1)(C)), subparagraph (D) shall be applied—\n“(I) by substituting ‘2 years’ for ‘4 years’ in clause (i), and\n“(II) by substituting ‘2-year period’ for ‘4-year period’ in clauses (ii) and (iii).\n“(ii)  Termination .—This subparagraph shall not apply to sales after the termination date.”\nPub. L. 110–246, §\u202f15315(a) , added subpar. (G).\nSubsec. (b)(6)(H), (I).  Pub. L. 110–289, §\u202f3051(b)(1) , redesignated subpar. (I) as (H). Former subpar. (H) redesignated (G).\nPub. L. 110–246, §\u202f15315(c) , (d), added subpars. (H) and (I).\n2007—Subsec. (b)(8)(B).  Pub. L. 110–172  amended heading and text generally. Prior to amendment, text read as follows: “For purposes of this paragraph, the rules of paragraphs (3) and (4) of section 246(c) shall apply in determining the period for which the taxpayer has held any share of stock or beneficial interest; except that ‘6 months’ shall be substituted for the number of days specified in subparagraph (B) of section 246(c)(3).”\n2005—Subsec. (b)(2)(E).  Pub. L. 109–135, §\u202f403(d)(3) , substituted “section 856(c)(7)(C), and section 856(g)(5)” for “section 856(c)(7)(B)(iii), and section 856(g)(1).”\nSubsec. (b)(6)(E).  Pub. L. 109–135, §\u202f412(ii)(1) , substituted “subparagraphs (C) and (D)” for “subparagraph (C)” in introductory provisions.\nSubsec. (b)(6)(F).  Pub. L. 109–135, §\u202f412(ii)(2) , substituted “subparagraph (C) or (D)” for “subparagraph (C) of this paragraph” and “subparagraphs (C), (D), and (E)” for “subparagraphs (C) and (D)”.\n2004—Subsec. (b)(2)(E).  Pub. L. 108–357, §\u202f243(f)(4) , substituted “(7) of this subsection, section 856(c)(7)(B)(iii), and section 856(g)(1).” for “(7)”.\nSubsec. (b)(3)(F).  Pub. L. 108–357, §\u202f418(b) , added subpar. (F).\nSubsec. (b)(5)(A)(i).  Pub. L. 108–357, §\u202f243(e) , substituted “95 percent” for “90 percent”.\nSubsec. (b)(6)(D) to (F).  Pub. L. 108–357, §\u202f321(a) , added subpar. (D) and redesignated former subpars. (D) and (E) as (E) and (F), respectively.\nSubsec. (b)(7)(B)(ii) to (vii).  Pub. L. 108–357, §\u202f243(c) , redesignated cls. (iii) to (vii) as (ii) to (vi), respectively, and struck out former cl. (ii), which related to exception for amounts received by a REIT for services furnished or rendered by a taxable REIT subsidiary that were described in  section 856(d)(1)(B) of this title , or from a taxable REIT subsidiary that were described in par. (7)(C)(ii) of such section.\nSubsec. (c)(2).  Pub. L. 108–311, §\u202f402(a)(5)(E) , reenacted heading without change and amended text generally. Prior to amendment, text related to rules applicable to dividends received from real estate investment trusts for purposes of  section 1(h)(11) of this title .\n2003—Subsec. (c).  Pub. L. 108–27  reenacted subsec. heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of section 243 (relating to deductions for dividends received by corporations), a dividend received from a real estate investment trust which meets the requirements of this part shall not be considered as a dividend.”\n2002—Subsec. (b)(7)(B)(i).  Pub. L. 107–147, §\u202f417(13) , substituted “section 856(d)” for “subsection 856(d)”.\nPub. L. 107–147, §\u202f413(a)(1) , substituted “to the extent the amount of the rents” for “the amount of which”.\nSubsec. (b)(7)(C).  Pub. L. 107–147, §\u202f413(a)(2) , substituted “to the extent the amount” for “if the amount”.\n2000—Subsec. (b)(7)(B)(ii).  Pub. L. 106–554  amended heading and text of cl. (ii) generally. Prior to amendment, text read as follows: “Clause (i) shall not apply to amounts received directly or indirectly by a real estate investment trust for services described in paragraph (1)(B) or (7)(C)(i) of section 856(d).”\n1999—Subsec. (a)(1)(A)(i), (ii).  Pub. L. 106–170, §\u202f556(a) , substituted “90 percent” for “95 percent (90 percent for taxable years beginning before  January 1, 1980 )”.\nSubsec. (b)(2)(E).  Pub. L. 106–170, §\u202f545(b) , substituted “paragraphs (5) and (7)” for “paragraph (5)”.\nSubsec. (b)(4)(B)(i).  Pub. L. 106–170, §\u202f532(c)(2)(L) , substituted “section 1221(a)(1)” for “section 1221(1)”.\nSubsec. (b)(5)(A)(i).  Pub. L. 106–170, §\u202f556(b) , substituted “90 percent” for “95 percent (90 percent in the case of taxable years beginning before  January 1, 1980 )”.\nSubsec. (b)(6)(B)(iii).  Pub. L. 106–170, §\u202f532(c)(2)(M) , substituted “section 1221(a)(1)” for “section 1221(1)”.\nSubsec. (b)(7) to (9).  Pub. L. 106–170, §\u202f545(a) , added par. (7) and redesignated former pars. (7) and (8) as (8) and (9), respectively.\nSubsec. (d)(3)(A).  Pub. L. 106–170, §\u202f566(a)(2) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “shall be treated for purposes of this subsection and subsection (a)(2)(B) as made from the earliest earnings and profits accumulated in any taxable year to which the provisions of this part did not apply rather than the most recently accumulated earnings and profits, and”.\nSubsec. (d)(3)(B).  Pub. L. 106–170, §\u202f566(b) , inserted “and section 858” before period at end.\n1998—Subsec. (d)(3)(A).  Pub. L. 105–206  substituted “earliest earnings and profits accumulated in any taxable year to which the provisions of this part did not apply” for “earliest accumulated earnings and profits (other than earnings and profits to which subsection (a)(2)(A) applies)”.\n1997—Subsec. (a)(2), (3).  Pub. L. 105–34, §\u202f1251(a)(1) , redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “the real estate investment trust complies for such year with regulations prescribed by the Secretary for the purpose of ascertaining the actual ownership of the outstanding shares, or certificates of beneficial interest, of such trust, and”.\nSubsec. (b)(3)(D), (E).  Pub. L. 105–34, §\u202f1254(a) , added subpar. (D) and redesignated former subpar. (D) as (E).\nSubsec. (b)(5).  Pub. L. 105–34, §\u202f1255(b)(2) , substituted “section 856(c)(6)” for “section 856(c)(7)” in introductory provisions.\nSubsec. (b)(6)(C).  Pub. L. 105–34, §\u202f1255(b)(3) , substituted “section 856(c)(5)(B)” for “section 856(c)(6)(B)” in introductory provisions.\nSubsec. (b)(6)(C)(iii).  Pub. L. 105–34, §\u202f1260 , substituted “(other than sales of foreclosure property or sales to which section 1033 applies)” for “(other than foreclosure property)” in subcls. (I) and (II).\nSubsec. (b)(7)(A)(i).  Pub. L. 105–34, §\u202f1254(b)(1) , substituted “subparagraph (B) or (D)” for “subparagraph (B)”.\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f1256 , added par. (3).\nSubsec. (e)(2)(B) to (D).  Pub. L. 105–34, §\u202f1259 , redesignated subpar. (C) as (B) and substituted a comma for period at end, added subpars. (C) and (D), and struck out former subpar. (B) which read as follows: “in the case of a real estate investment trust using the cash receipts and disbursements method of accounting, the amount (if any) by which—\n“(i) the amounts includible in gross income with respect to instruments to which section 1274 (relating to certain debt instruments issued for property) applies, exceed\n“(ii) the amount of money and the fair market value of other property received during the taxable year under such instruments; plus”.\nSubsecs. (f), (g).  Pub. L. 105–34, §\u202f1251(a)(2) , added subsec. (f) and redesignated former subsec. (f) as (g).\n1990—Subsec. (b)(3)(C).  Pub. L. 101–508  amended  Pub. L. 100–647, §\u202f1018(u)(28) . See 1988 Amendment note below.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1006(s)(4) , inserted at end “The Secretary may waive the requirements of paragraph (1) for any taxable year if the real estate investment trust establishes to the satisfaction of the Secretary that it was unable to meet such requirements by reason of distributions previously made to meet the requirements of section 4981.”\nSubsec. (b)(3)(C).  Pub. L. 100–647, §\u202f1018(u)(28) , as amended by  Pub. L. 101–508 , substituted “such net capital loss shall” for “such net capital loss such”.\nPub. L. 100–647, §\u202f1006(s)(2) , substituted “the taxable income of the real estate investment trust” for “real estate investment trust taxable income”.\nSubsec. (b)(8).  Pub. L. 100–647, §\u202f1006(s)(5) , substituted “in October, November, or December” for “in December” and “in such a month” for “in such month” in introductory text, “on December 31 of such calendar year” for “on such date”, in subpars. (A) and (B), and “during January” for “before February 1” in last sentence.\nSubsec. (e)(2)(B)(i).  Pub. L. 100–647, §\u202f1006(r) , substituted “with respect to instruments” for “as original issue discount on instruments”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f661(b) , struck out “and” at end of par. (1), substituted “,\u2000and” for the period at end of par. (2), and added par. (3) and last sentence.\nSubsec. (a)(1)(B).  Pub. L. 99–514, §\u202f664(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the sum of—\n“(i) the amount of any penalty imposed on the real estate investment trust by section 6697 which is paid by such trust during the taxable year; and\n“(ii) the net loss derived from prohibited transactions,”.\nSubsec. (b)(2)(F).  Pub. L. 99–514, §\u202f666(b)(2) , struck out “and there shall be included an amount equal to any net loss derived from prohibited transactions” after “prohibited transactions”.\nSubsec. (b)(3)(C).  Pub. L. 99–514, §\u202f668(b)(3) , inserted at end “For purposes of this subparagraph, the amount of the net capital gain for any taxable year which is not a calendar year shall be determined without regard to any net capital loss attributable to transactions after December 31 of such year, and any such net capital loss such be treated as arising on the 1st day of the next taxable year. To the extent provided in regulations, the preceding sentence shall apply also for purposes of computing real estate investment trust taxable income.”\nPub. L. 99–514, §\u202f665(a)(2) , (b)(1), inserted “(or mailed to its shareholders or holders of beneficial interests with its annual report for the taxable year)”, struck out last sentence which read as follows: “For purposes of this subparagraph, the net capital gain shall be deemed not to exceed the real estate investment trust taxable income (determined without regard to the deduction for dividends paid (as defined in section 561) for the taxable year).”\nSubsec. (b)(3)(D).  Pub. L. 99–514, §\u202f665(a)(1) , added subpar. (D).\nSubsec. (b)(6)(B)(ii).  Pub. L. 99–514, §\u202f666(b)(1) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the term ‘net loss derived from prohibited transactions’ means the excess of the deductions allowed by this chapter which are directly connected with prohibited transactions over the gain from prohibited transactions; and”.\nSubsec. (b)(6)(C)(ii).  Pub. L. 99–514, §\u202f666(a)(2) , substituted “30 percent” for “20 percent”.\nSubsec. (b)(6)(C)(iii).  Pub. L. 99–514, §\u202f666(a)(1) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “during the taxable year the trust does not make more than 5 sales of property (other than foreclosure property); and”.\nSubsec. (b)(6)(C)(v).  Pub. L. 99–514, §\u202f666(a)(3) , added cl. (v).\nSubsec. (b)(8).  Pub. L. 99–514, §\u202f668(b)(1)(A) , added par. (8).\nSubsec. (c).  Pub. L. 99–514, §\u202f612(b)(7) , which directed that “section 116 (relating to an exclusion for dividends received by individuals), and” be struck out, was executed by striking out “section 116 (relating to an exclusion for dividends received by individuals) and” before “section 243” as the probable intent of Congress.\nSubsec. (d).  Pub. L. 99–514, §\u202f668(b)(2) , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “The earnings and profits of a real estate investment trust for any taxable year (but not its accumulated earnings and profits) shall not be reduced by any amount which is not allowable as a deduction in computing its taxable income for such taxable year. For purposes of this subsection, the term ‘real estate investment trust’ includes a domestic corporation, trust, or association which is a real estate investment trust determined without regard to the requirements of subsection (a).”\nSubsecs. (e), (f).  Pub. L. 99–514, §\u202f664(b) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1984—Subsec. (b)(3)(B).  Pub. L. 98–369, §\u202f1001(b)(13) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (b)(7).  Pub. L. 98–369, §\u202f55(b) , substituted provisions relating to loss on sale or exchange of stock held 6 months or less for provisions which related to loss on sale or exchange of stock held 31 days or less.\nPub. L. 98–369, §\u202f1001(b)(13) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (c).  Pub. L. 98–369, §\u202f16(a) , repealed amendments made by  Pub. L. 97–34, §\u202f302(c) . See 1981 Amendment note below.\n1981—Subsec. (c).  Pub. L. 97–34, §\u202f302(c)(5) , (d)(1), provided for general amendment of subsec. (c) so as to include provisions relating to treatment for  section 128 of this title , adjustments to gross income and aggregate interest received, and notice to shareholders, applicable to taxable years beginning after  Dec. 31, 1984 .  Section 16(a) of Pub. L. 98–369 , repealed  section 302(c) of Pub. L. 97–34 , and provided that this title shall be applied and administered as if section 302(c), and the amendments made by section 302(c), had not been enacted.\n1980—Subsec. (b)(4)(A).  Pub. L. 96–222  substituted provisions computing the tax on the net income from foreclosure property of every real estate investment trust by multiplying the net income from foreclosure property by the highest rate of tax specified in section 11(b) for provisions determining the tax on the net income from foreclosure of property of every real estate investment trust by applying section 11 to such income as if such income constituted the taxable income of a corporation taxable under section 11 and struck out provisions requiring that for purposes of the preceding sentence, the surtax exemption be zero.\nSubsec. (c).  Pub. L. 96–223  temporarily substituted “Limitations applicable to dividends received from real estate investment trusts” for “Restrictions applicable to dividends received from real estate investment trusts” in heading, designated existing provisions as par. (1), substituted “(1)  Capital gain dividend.— For purposes of section 116 (relating to exclusion for dividends and interest received by individuals), a capital gain dividend (as defined in subsection (b)(3)(C)) received from a real estate investment trust shall not be considered a dividend” for “For purposes of section 116 (relating to an exclusion for dividends received by individuals) and section 243 (relating to deductions for dividends received by corporations), a dividend received from a real estate investment trust which meets the requirements of this part shall not be considered as a dividend” in par. (1) as so designated, and added pars. (2) to (6).\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f301(b)(12) , substituted “a tax” for “a normal tax and surtax”.\nSubsec. (b)(3)(A)(ii).  Pub. L. 95–600, §\u202f403(c)(3) , substituted “a tax determined at the rate provided in section 1201(a) on” for “a tax of 30 percent of”.\nSubsec. (b)(3)(C).  Pub. L. 95–600, §\u202f362(d)(3) , substituted “section 860(e)” for “section 859(c)”.\nSubsec. (b)(6)(C) to (E).  Pub. L. 95–600, §\u202f363(b) , added subpars. (C) to (E).\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1604(j), (k)(2)(B), 1906(b)(13)(A), substituted “(other than subsection (d) of this section and subsection (g) of section 856)” for “(other than subsection (d) of this section)” in provisions preceding par. (1), in par. (1) redesignated existing subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), added subpar. (B), in both cls. (i) and (ii) of subpar. (A) as redesignated raised the percentage to 95 percent for taxable years beginning on and after  Jan. 1, 1980 , and, in cl. (i) of subpar. (A) as redesignated, inserted provision for the exclusion of net capital gain, and struck out “or his delegate” after “Secretary” in par. (2).\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1901(b)(1)(V) , struck out provision that, for purposes of computing the normal tax under section 11, the taxable income and the dividends paid deduction of such real estate investment trust for the taxable year (computed without regard to capital gains dividends) would be reduced by the deduction provided by section 22 (relating to partially tax-exempt interest.\nSubsec. (b)(2).  Pub. L. 94–455 , §§\u202f1602(b)(2), 1603(c)(5), 1606(a), (d), 1607(b)(1)(A), (2), struck out subpar. (A) which provided for the exclusion of the excess, if any, of the net long-term capital gain over the net short-term capital loss, and subpar. (E) which prohibited the allowance of the net operating loss deduction provided in section 172, redesignated subpars. (B), (C), (D), and (F) as subpars. (A), (B), (C), and (D), respectively, added subpars. (E) and (F), and in subpar. (B) as redesignated substituted “subparagraph (D)” for “paragraph (F)” and struck out “shall be computed without regard to capital gains dividends and” after “shall be allowed, but”.\nSubsec. (b)(3)(A).  Pub. L. 94–455, §\u202f1607(a) , substituted provisions setting an alternative tax in case of capital gains under which, if for any taxable year, a real estate investment trust has a net capital gain, then, in lieu of the tax imposed by subsection (b)(1), there is imposed a tax (if such tax is less than the tax imposed by such subsection) to consist of the sum of a tax, computed as provided in subsection (b)(1), on the real estate investment trust taxable income (determined by excluding such net capital gain and by computing the deduction for dividends paid without regard to capital gain dividends), and a tax of 30 percent of the excess of the net capital gain over the deduction for dividends paid (as defined in section 561) determined with reference to capital gains dividends only, for provisions posing a tax for each taxable year determined as provided in section 1201(a), on the excess, if any, of the net long-term capital gain over the sum of the net short-term capital loss and the deduction for dividends paid (as defined in section 561) determined with reference to capital gains dividends only.\nSubsec. (b)(3)(B).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(P) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (b)(3)(C).  Pub. L. 94–455 , §§\u202f1601(c), 1607(b)(3), 1901(a)(112), (b)(33)(K), inserted “;\u2000except that, if there is an increase in the excess described in subparagraph (A)(ii) of this paragraph for such year which results from a determination (as defined in section 859(c)), such designation may be made with respect to such increase at any time before the expiration of 120 days after the date of such determination” after “30 days after the close of its taxable year”, substituted “net capital gain” for “excess of the net long-term capital gain over the net short-term capital loss” in provision covering the portion of distributions which shall be capital gain dividends, inserted provision that the net capital gain be deemed not to exceed the real estate investment trust taxable income, and struck out provision which specified the source of deductions for dividends paid in the case of taxable years beginning before  Jan. 1, 1975 .\nSubsec. (b)(4)(B)(i).  Pub. L. 94–455, §\u202f1604(c)(2) , inserted reference to subparagraph (G) of section 856(c)(3).\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f1602(b)(1) , added par. (5). Former par. (5) redesignated (7) and amended.\nSubsec. (b)(6).  Pub. L. 94–455, §\u202f1603(b) , added par. (6).\nSubsec. (b)(7).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455 , §§\u202f1402(b)(1)(P), 1602(b)(1), redesignated par. (5) as (7) and provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (d).  Pub. L. 94–455, §\u202f1604(f)(3)(B) , substituted “a domestic corporation, trust,” for “a domestic unincorporated trust”.\nSubsec. (e).  Pub. L. 94–455, §\u202f1605(b)(2) , added subsec. (e).\n1975—Subsec. (a)(1).  Pub. L. 93–625, §\u202f6(d)(2) , incorporated existing par. (1) provisions in par. (1) introductory text and provisions designated as subpar. (A), substituted in subpar. (A) “(determined without regard to the deduction for dividends paid (as defined in section 561))” for “(determined without regard to subsection (b)(2)(C))”, and added subpar. (B).\nSubsec. (b)(2)(C).  Pub. L. 93–625, §\u202f6(d)(4) , provided for computation of deduction for dividends paid without regard to that portion of such deduction which is attributable to the amount excluded under subparagraph (F).\nSubsec. (b)(2)(F).  Pub. L. 93–625, §\u202f6(d)(3) , added subpar. (F).\nSubsec. (b)(4), (5).  Pub. L. 93–625, §\u202f6(c) , added par. (4) and redesignated former par. (4) as (5).\n1969—Subsec. (b)(3)(A).  Pub. L. 91–172, §\u202f511(c)(3)(A) , substituted “determined as provided in section 1201(a), on” for “of 25 percent of.”\nSubsec. (b)(3)(C).  Pub. L. 91–172, §\u202f511(c)(3)(B) , inserted provision requiring for the purposes of the deduction for capital gains dividends paid, in the case of a taxable year beginning before  Jan. 1, 1975 , the deduction for dividends paid shall first be made from the amount subject to tax in accordance with section 1201(a)(1)(B), to the extent thereof, and then from the amount subject to tax in accordance with section 1201(a)(1)(A).\n1964—Subsec. (c).  Pub. L. 88–272  struck out “section 34(a) (relating to credit for dividends received by individuals),” before “section 116” and the comma before “and”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f313(c) ,  Dec. 18, 2015 ,  129 Stat. 3092 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 18, 2015 ]. \n \n “(2)   Application of safe harbors.— “(A)   In general .— Except as provided in subparagraph (B), the amendments made by subsection (b) [amending this section] shall take effect as if included in section 3051 of the Housing Assistance Tax Act of 2008 [ Pub. L. 110–289 ]. \n \n “(B)   Retroactive application of no inference not applicable to certain timber property previously treated as not inventory property .— The amendment made by subsection (b)(2) [amending this section] shall not apply to any sale of property to which section 857(b)(6)(G) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) applies.”\nPub. L. 114–113, div. Q, title III, §\u202f316(b) ,  Dec. 18, 2015 ,  129 Stat. 3094 , provided that:  “The amendments made by this section [amending this section] shall apply to distributions in taxable years beginning after  December 31, 2015 .”\nAmendment by  section 320(a) of Pub. L. 114–113  applicable to taxable years beginning after  Dec. 31, 2015 , see  section 320(c) of Pub. L. 114–113 , set out as a note under  section 562 of this title .\nAmendment by section 321(a)(1), (2), (b) of  Pub. L. 114–113  applicable to taxable years beginning after  Dec. 31, 2015 , see  section 321(c) of Pub. L. 114–113 , set out as a note under  section 856 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f322(c)(1) ,  Dec. 18, 2015 ,  129 Stat. 3102 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section and  section 897 of this title ] shall take effect on the date of enactment [ Dec. 18, 2015 ] and shall apply to— “(A)  any disposition on and after the date of the enactment of this Act, and \n \n “(B)  any distribution by a real estate investment trust on or after the date of the enactment of this Act which is treated as a deduction for a taxable year of such trust ending after such date.”\nAmendment by  section 3033(a) of Pub. L. 110–289  applicable to gains recognized after  July 30, 2008 , and amendment by  section 3033(b) of Pub. L. 110–289  applicable to gains and deductions recognized after  July 30, 2008 , see  section 3071(c) of Pub. L. 110–289 , set out as a note under  section 856 of this title .\nAmendment by sections 3051 and 3052 of  Pub. L. 110–289  applicable to sales made after  July 30, 2008 , see  section 3071(d) of Pub. L. 110–289 , set out as a note under  section 856 of this title .\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nAmendment by  section 15311(c) of Pub. L. 110–246  applicable to taxable years ending after  June 18, 2008 , see  section 15311(d) of Pub. L. 110–246 , set out as a note under  section 55 of this title .\nPub. L. 110–234, title XV, §\u202f15315(e) ,  May 22, 2008 ,  122 Stat. 1505 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15315(e),  June 18, 2008 ,  122 Stat. 1664 , 2267, provided that:  “The amendments made by this section [amending this section] shall apply to dispositions in taxable years beginning after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nAmendment by  section 403(d)(3) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by section 243(c), (e) of  Pub. L. 108–357  applicable to taxable years beginning after  Oct. 22, 2004 , and amendment by  section 243(f)(4) of Pub. L. 108–357  applicable to taxable years ending after  Oct. 22, 2004 , see section 243(g)(2), (4)(D) of  Pub. L. 108–357 , set out as a note under  section 856 of this title .\nPub. L. 108–357, title III, §\u202f321(b) ,  Oct. 22, 2004 ,  118 Stat. 1474 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title IV, §\u202f418(c) ,  Oct. 22, 2004 ,  118 Stat. 1513 , as amended by  Pub. L. 109–135, title IV, §\u202f403(p)(2) ,  Dec. 21, 2005 ,  119 Stat. 2626 , provided that:  \n “The amendments made by this section [amending this section and  section 897 of this title ] shall apply to— \n “(1)  any distribution by a real estate investment trust which is treated as a deduction for a taxable year of such trust beginning after the date of the enactment of this Act [ Oct. 22, 2004 ], and \n \n “(2)  any distribution by a real estate investment trust made after such date which is treated as a deduction under section 860 [probably means section 860 of the Internal Revenue Code of 1986] for a taxable year of such trust beginning on or before such date.”\nAmendment by  Pub. L. 108–311  effective as if included in section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003,  Pub. L. 108–27 , see  section 402(b) of Pub. L. 108–311 , set out a note under  section 1 of this title .\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nPub. L. 107–147, title IV, §\u202f413(b) ,  Mar. 9, 2002 ,  116 Stat. 54 , provided that:  “The amendments made by this section [amending this section] shall take effect as if included in section 545 of the Tax Relief Extension Act of 1999 [ Pub. L. 106–170 ].”\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Ticket to Work and Work Incentives Improvement Act of 1999,  Pub. L. 106–170 , to which such amendment relates, see section 1(a)(7) [title III, §\u202f311(d)] of  Pub. L. 106–554 , set out as a note under  section 280C of this title .\nAmendment by section 532(c)(2)(L), (M) of  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  section 545 of Pub. L. 106–170  applicable to taxable years beginning after  Dec. 31, 2000 , see  section 546(a) of Pub. L. 106–170 , set out as a note under  section 856 of this title .\nPub. L. 106–170, title V, §\u202f556(c) ,  Dec. 17, 1999 ,  113 Stat. 1949 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2000 .”\nAmendment by section 566(a)(2), (b) of  Pub. L. 106–170  applicable to distributions after  Dec. 31, 2000 , see  section 566(d) of Pub. L. 106–170 , set out as a note under  section 852 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning after  Aug. 5, 1997 , see  section 1263 of Pub. L. 105–34 , set out as a note under  section 852 of this title .\nPub. L. 100–647, title I, §\u202f1006(s)(5) ,  Nov. 10, 1988 ,  102 Stat. 3419 , provided that the amendment made by that section is effective with respect to dividends declared in 1988 and subsequent calendar years.\nAmendment by sections 1006(r), (s)(2), (4) and 1018(u)(28) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 612(b)(7) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 612(c) of Pub. L. 99–514 , set out as a note under  section 301 of this title .\nAmendments by sections 661(b), 664, 665(a), (b)(1), and 666 of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 669(a) of Pub. L. 99–514 , set out as a note under  section 856 of this title .\nAmendment by section 668(b)(1)(A), (2), (3) of  Pub. L. 99–514  applicable to calendar years beginning after  Dec. 31, 1986 , see  section 669(b) of Pub. L. 99–514 , set out as a note under  section 856 of this title .\nAmendment by  section 16(a) of Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nAmendment by  section 55(b) of Pub. L. 98–369  applicable to losses incurred with respect to shares of stock and beneficial interest with respect to which the taxpayer’s holding period begins after  July 18, 1984 , see  section 55(c) of Pub. L. 98–369 , set out as a note under  section 852 of this title .\nAmendment by  section 1001(b)(13) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 96–223  applicable with respect to taxable years beginning after  Dec. 31, 1980 , and before  Jan. 1, 1982 , see  section 404(c) of Pub. L. 96–223 , set out as a note under  section 265 of this title .\nAmendment by  section 301(b)(12) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  section 362(d)(3) of Pub. L. 95–600  applicable with respect to determinations (as defined in  section 860(e) of this title ) after  Nov. 6, 1978 , see  section 362(e) of Pub. L. 95–600 , set out as an Effective Date note under  section 860 of this title .\nAmendment by  section 363(b) of Pub. L. 95–600  applicable to taxable years ending after  Nov. 6, 1978 , see  section 363(d) of Pub. L. 95–600 , set out as a note under  section 856 of this title .\nAmendment by  section 403(c)(3) of Pub. L. 95–600  effective on  Nov. 6, 1978 , see  section 403(d)(3) of Pub. L. 95–600 , set out as a note under  section 528 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 94–455, title XVI, §\u202f1608(a) ,  Oct. 4, 1976 ,  90 Stat. 1757 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by section 1601 [enacting sections 859 and 6697 of this title and amending this section and sections 316, 381, 6422, 6503, and 6515 of this title] shall apply with respect to determinations (as defined in section 859(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) occurring after the date of the enactment of this Act [ Oct. 4, 1976 ]. If the amendments made by section 1601 apply to a taxable year ending on or before the date of enactment of this Act: \n “(1)  the reference to [former] section 857(b)(3)(A)(ii) in sections 857(b)(3)(C) [now 857(b)(3)(B)] and 859(b)(1)(B) of such Code as amended, shall be considered to be a reference to [former] section 857(b)(3)(A) of such Code, as in effect immediately before the enactment of this Act [ Oct. 4, 1976 ], and \n \n “(2)  the reference to section 857(b)(2)(B) in section 859(a) of such Code, as amended, shall be considered to be a reference to section 857(b)(2)(C) of such Code, as in effect immediately before the enactment of this Act [ Oct. 4, 1976 ].”\nFor effective date of amendment by section 1602(b)(1), (2) of  Pub. L. 94–455 , see  section 1608(b) of Pub. L. 94–455 , set out as a Trust Not Disqualified in Certain Cases Where Income Tests Not Met note under  section 856 of this title .\nFor effective date of amendment by sections 1603, 1604, and 1605 of  Pub. L. 94–455 , see  section 1608(d) of Pub. L. 94–455 , set out as a note under  section 856 of this title .\nPub. L. 94–455, title XVI, §\u202f1608(c) ,  Oct. 4, 1976 ,  90 Stat. 1757 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by sections 1606 and 1607 [amending this section and sections 46, 172, and 443 of this title] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 4, 1976 ]; except that in the case of a taxpayer which has a net operating loss (as defined in section 172(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) for any taxable year ending after the date of enactment of this Act [ Oct. 4, 1976 ] for which the provisions of part II of subchapter M of chapter 1 of subtitle A of such Code apply to such taxpayer, such loss shall not be a net operating loss carryback under section 172 of such Code to any taxable year ending on or before the date of enactment of this Act [ Oct. 4, 1976 ].”\nAmendment by section 1901(a)(112), (b)(1)(V), (33)(K) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 93–625  applicable to foreclosure property acquired after  Dec. 31, 1973 , see  section 6(e) of Pub. L. 93–625 , set out as a note under  section 856 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to taxable years beginning after  Dec. 31, 1969 , see  section 511(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 852 of this title .\nAmendment by  Pub. L. 88–272  applicable with respect to dividends received after  Dec. 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .\nSection applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as a note under  section 856 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE INVESTMENT TRUSTS'},
  'content': 'Except as provided in section 857(b)(9), amounts to which subsection (a) applies shall be treated as received by the shareholder or holder of a beneficial interest in the taxable year in which the distribution is made.\nIn the case of amounts to which subsection (a) applies, any notice to shareholders or holders of beneficial interests required under this part with respect to such amounts shall be made not later than 30 days after the close of the taxable year in which the distribution is made (or mailed to its shareholders or holders of beneficial interests with its annual report for the taxable year).\n2014—Subsec. (b).  Pub. L. 113–295  substituted “857(b)(9)” for “857(b)(8)”.\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1018(u)(27) , made technical correction to directory language of  Pub. L. 99–514 , see 1986 Amendment note below.\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f668(b)(1)(B) , as amended by  Pub. L. 100–647, §\u202f1018(u)(27) , substituted “Except as provided in section 857(b)(8), amounts” for “Amounts”.\nSubsec. (c).  Pub. L. 99–514, §\u202f665(b)(2) , inserted “(or mailed to its shareholders or holders of beneficial interests with its annual report for the taxable year)”.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1604(h), 1906(b)(13)(A), inserted “(and specifies in dollar amounts)” after “to the extent the trust elects in such return” and substituted “paid only during such taxable year” for “paid during such taxable year”, and struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 665(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , and by  section 668(b)(1)(B) of Pub. L. 99–514  applicable to calendar years beginning after  Dec. 31, 1986 , see  section 669 of Pub. L. 99–514 , set out as a note under  section 856 of this title .\nFor effective date of amendment by  section 1604(h) of Pub. L. 94–455 , see  section 1608(d) of Pub. L. 94–455 , set out as a note under  section 856 of this title .\nSection applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as a note under  section 856 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE INVESTMENT TRUSTS'},
  'content': 'Notwithstanding section 442, an entity which has not engaged in any active trade or business may change its accounting period to a calendar year without the approval of the Secretary if such change is in connection with an election under section 856(c).\nA prior section 859, added  Pub. L. 94–455, title XVI, §\u202f1601(a)(1) ,  Oct. 4, 1976 ,  90 Stat. 1742 ; amended  Pub. L. 95–600, title VII, §\u202f701(t)(4) ,  Nov. 6, 1978 ,  92 Stat. 2912 , related to a deduction for deficiency dividends, prior to repeal by  Pub. L. 95–600, title III, §\u202f362(d)(6) ,  Nov. 6, 1978 ,  92 Stat. 2852 . See  section 860 of this title .\n1986— Pub. L. 99–514  designated existing provisions as subsec. (a) and added subsec. (b).\n1978— Pub. L. 95–600, §\u202f701(t)(1) , designated existing provisions as par. (1), substituted “change to any accounting period” for “change to or adopt any annual accounting period”, and added par. (2) and provision for nonapplicability of par. (2) to a real estate investment trust for any taxable year beginning on or before  Oct. 4, 1976 .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 669 of Pub. L. 99–514 , set out as a note under  section 856 of this title .\nRepeal of prior  section 859 of this title  and redesignation of  section 860 of this title  as this section by  section 362(d)(6) of Pub. L. 95–600  applicable with respect to determinations (as defined in  section 860(e) of this title ) after  Nov. 6, 1978 , see  section 362(e) of Pub. L. 95–600 , set out as an Effective Date note under  section 860 of this title .\nPub. L. 95–600, title VII, §\u202f701(t)(5) ,  Nov. 6, 1978 ,  92 Stat. 2912 , provided that:  “The amendments made by this subsection [amending this section and sections 275, 856, 6212, and 6501 of this title] shall take effect on  October 4, 1976 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'PROVISIONS WHICH APPLY TO BOTH REGULATED INVESTMENT COMPANIES AND REAL ESTATE INVESTMENT TRUSTS'},
  'content': 'If a determination with respect to any qualified investment entity results in any adjustment for any taxable year, a deduction shall be allowed to such entity for the amount of deficiency dividends for purposes of determining the deduction for dividends paid (for purposes of section 852 or 857, whichever applies) for such year.\nIf the allowance of a deficiency dividend deduction results in an overpayment of tax for any taxable year, credit or refund with respect to such overpayment shall be made as if on the date of the determination 2 years remained before the expiration of the period of limitations on the filing of claim for refund for the taxable year to which the overpayment relates.\nFor purposes of this section, the term “deficiency dividends” means a distribution of property made by the qualified investment entity on or after the date of the determination and before filing claim under subsection (g), which would have been includible in the computation of the deduction for dividends paid under section 561 for the taxable year with respect to which the liability for tax resulting from the determination exists if distributed during such taxable year. No distribution of property shall be considered as deficiency dividends for purposes of subsection (a) unless distributed within 90 days after the determination, and unless a claim for a deficiency dividend deduction with respect to such distribution is filed pursuant to subsection (g).\nThe amount of deficiency dividends qualifying as capital gain dividends paid by a qualified investment entity for the taxable year with respect to which the liability for tax resulting from the determination exists shall not exceed the amount by which (i) the increase referred to in subparagraph (B) of paragraph (1) or (2) of subsection (d) (whichever applies), exceeds (ii) the amount of any dividends paid during such taxable year which are designated or reported (as the case may be) as capital gain dividends after such determination.\nDeficiency dividends paid in any taxable year shall not be included in the amount of dividends paid for such year for purposes of computing the dividends paid deduction for such year.\nDeficiency dividends paid in any taxable year shall not be allowed for purposes of section 855(a) or 858(a) in the computation of the dividends paid deduction for the taxable year preceding the taxable year in which paid.\nNo deficiency dividend deduction shall be allowed under subsection (a) unless (under regulations prescribed by the Secretary) claim therefore is filed within 120 days after the date of the determination.\nIf the qualified investment entity files a claim as provided in subsection (g), the running of the statute of limitations provided in section 6501 on the making of assessments, and the bringing of distraint or a proceeding in court for collection, in respect of the deficiency established by a determination under this section, and all interest, additions to tax, additional amounts, or assessable penalties in respect thereof, shall be suspended for a period of 2 years after the date of the determination.\nNo deficiency dividend deduction shall be allowed under subsection (a) if the determination contains a finding that any part of any deficiency attributable to an adjustment with respect to the taxable year is due to fraud with intent to evade tax or to willful failure to file an income tax return within the time prescribed by law or prescribed by the Secretary in pursuance of law.\nSection 857(b)(3)(A), referred to in subsec. (d)(2)(B), relating to alternative tax in case of capital gains, was repealed by  Pub. L. 115–97, title I, §\u202f13001(b)(2)(K)(i) ,  Dec. 22, 2017 ,  131 Stat. 2096 . Subsec. (b)(3)(B) of section 857, relating to treatment of capital gain dividends by shareholders, was redesignated subsec. (b)(3)(A) of that section.\nA prior section 860 was renumbered  section 859 of this title .\n2018—Subsec. (f)(2)(A)(ii).  Pub. L. 115–141, §\u202f401(a)(149) , substituted “decrease” for “decreased”.\nSubsec. (i).  Pub. L. 115–141, §\u202f401(a)(150) , substituted “willful” for “willfull”.\n2010—Subsec. (f)(2)(B).  Pub. L. 111–325, §\u202f301(a)(2) , inserted “or reported (as the case may be)” after “designated”.\nSubsec. (j).  Pub. L. 111–325, §\u202f501(b) , struck out subsec. (j). Text read as follows: “For assessable penalty with respect to liability for tax of a regulated investment company which is allowed a deduction under subsection (a), see section 6697.”\n2004—Subsec. (e)(4).  Pub. L. 108–357  added par. (4).\n1986—Subsec. (j).  Pub. L. 99–514  substituted “regulated investment company” for “qualified investment entity”.\n1980—Subsec. (f).  Pub. L. 96–222  substituted in heading “Deficiency” for “Efficiency” and in par. (2)(A)(i) “(computed without regard” for “computed without regard”.\nAmendment by  section 301(a)(2) of Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 301(h) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nPub. L. 111–325, title V, §\u202f501(c) ,  Dec. 22, 2010 ,  124 Stat. 3554 , provided that:  “The amendments made by this section [amending this section and repealing  section 6697 of this title ] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ].”\nAmendment by  Pub. L. 108–357  applicable to statements filed after  Oct. 22, 2004 , see  section 243(g)(4)(E) of Pub. L. 108–357 , set out as a note under  section 856 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 669 of Pub. L. 99–514 , set out as a note under  section 856 of this title .\nPub. L. 95–600, title III, §\u202f362(e) ,  Nov. 6, 1978 ,  92 Stat. 2852 , as amended by  Pub. L. 96–222, title I, §\u202f103(a)(11)(A) ,  Apr. 1, 1980 ,  94 Stat. 212 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [enacting this section, amending sections 316, 381, 852, 857, 6422, 6503, 6515, and 6697 of this title, repealing  section 859 of this title , and redesignating prior section 860 as 859 of this title] shall apply with respect to determinations (as defined in section 860(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) after the date of the enactment of this Act [ Nov. 6, 1978 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'Except as otherwise provided in this part, a REMIC shall not be subject to taxation under this subtitle (and shall not be treated as a corporation, partnership, or trust for purposes of this subtitle).\nThe income of any REMIC shall be taxable to the holders of interests in such REMIC as provided in this part.\n1988—Subsec. (a).  Pub. L. 100–647  substituted “this subtitle” for “this chapter” in two places.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f675(a) –(c),  Oct. 22, 1986 ,  100 Stat. 2320 , as amended by  Pub. L. 100–647, title I, §\u202f1006(w)(1) ,  Nov. 10, 1988 ,  102 Stat. 3427 , provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this subtitle [subtitle H (§§\u202f671–675) of title VI of  Pub. L. 99–514 , enacting this part and amending sections 582, 593, 856, 1272, 6049, and 7701 of this title] shall take effect on  January 1, 1987 . \n \n “(b)   Rules for Accruing Original Issue Discount .— The amendment made by section 672 [amending  section 1272 of this title ] shall apply to debt instruments issued after  December 31, 1986 , in taxable years ending after such date. \n \n “(c)   Treatment of Taxable Mortgage Pools.— “(1)   In general .— The amendment made by section 673 [amending  section 7701 of this title ] shall take effect on  January 1, 1992 . \n \n “(2)   Treatment of existing entities .— The amendment made by section 673 shall not apply to any entity in existence on  December 31, 1991 . The preceding sentence shall cease to apply with respect to any entity as of the 1st day after  December 31, 1991 , on which there is a substantial transfer of cash or other property to such entity. \n \n “(3)   Special rule for coordination with wash-sale rules .— Notwithstanding paragraphs (1) and (2), for purposes of applying section 860F(d) of the Internal Revenue Code of 1986 (as added by this part [this subtitle]), the amendment made by section 673 shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title VI, §\u202f675(d) , as added by  Pub. L. 100–647, title I, §\u202f1006(w)(2) ,  Nov. 10, 1988 ,  102 Stat. 3427 , directed Secretary of the Treasury to conduct a study of the operation of the amendments made by this part [this subtitle] and their competitive impact on savings and loan institutions and similar financial institutions and, not later than  Jan. 1, 1990 , report to Congress, prior to repeal by  Pub. L. 101–508, title XI, §\u202f11832(5) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'In determining the tax under this chapter of any holder of a regular interest in a REMIC, such interest (if not otherwise a debt instrument) shall be treated as a debt instrument.\nThe amounts includible in gross income with respect to any regular interest in a REMIC shall be determined under the accrual method of accounting.\nFor special rules in determining inclusion of original issue discount on regular interests, see section 1272(a)(6).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'In determining the tax under this chapter of any holder of a residual interest in a REMIC, such holder shall take into account his daily portion of the taxable income or net loss of such REMIC for each day during the taxable year on which such holder held such interest.\nThe basis of any person’s residual interest in a REMIC shall be increased by the amount of the taxable income of such REMIC taken into account under subsection (a) by such person with respect to such interest.\nAny amount taken into account under subsection (a) by any holder of a residual interest in a REMIC shall be treated as ordinary income or ordinary loss, as the case may be.\nThe amount of the net loss of any REMIC taken into account by a holder under subsection (a) with respect to any calendar quarter shall not exceed the adjusted basis of such holder’s residual interest in such REMIC as of the close of such calendar quarter (determined without regard to the adjustment under subsection (d)(2)(B) for such calendar quarter).\nAny loss disallowed by reason of subparagraph (A) shall be treated as incurred by the REMIC in the succeeding calendar quarter with respect to such holder.\nFor special treatment of income in excess of daily accruals, see section 860E.\n1988—Subsec. (b)(1).  Pub. L. 100–647, §\u202f1006(t)(21) , substituted “and, except as provided in regulations, in the same manner” for “and in the same manner” in introductory provisions.\nSubsec. (b)(1)(E).  Pub. L. 100–647, §\u202f1006(t)(8)(C) , added subpar. (E).\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f1006(t)(1) , substituted “ordinary” for “ordinary income” in heading and amended text generally. Prior to amendment, text read as follows: “Any amount included in the gross income of any holder of a residual interest in a REMIC by reason of subsection (a) shall be treated as ordinary income.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'An entity (otherwise meeting the requirements of subsection (a)) may elect to be treated as a REMIC for its 1st taxable year. Such an election shall be made on its return for such 1st taxable year. Except as provided in paragraph (2), such an election shall apply to the taxable year for which made and all subsequent taxable years.\nIf any entity ceases to be a REMIC at any time during the taxable year, such entity shall not be treated as a REMIC for such taxable year or any succeeding taxable year.\n1990—Subsec. (a).  Pub. L. 101–508  inserted closing parenthesis before period at end.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1006(t)(19) , inserted at end “In the case of a qualified liquidation (as defined in section 860F(a)(4)(A)), paragraph (4) shall not apply during the liquidation period (as defined in section 860F(a)(4)(B).”\nSubsec. (a)(4).  Pub. L. 100–647, §\u202f1006(t)(2)(A)(i) , substituted “3rd month beginning after” for “4th month ending after”.\nPub. L. 100–647, §\u202f1006(t)(2)(A)(ii) , substituted “and at all times thereafter” for “and each quarter ending thereafter”.\nSubsec. (a)(6).  Pub. L. 100–647, §\u202f1006(t)(16)(A) , added par. (6).\nPub. L. 100–647, title I, §\u202f1006(t)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3419 , provided that:  “The amendment made by subparagraph (A)(ii) [amending this section] shall take effect on  January 1, 1988 .”\nPub. L. 100–647, title I, §\u202f1006(t)(16)(D)(i) ,  Nov. 10, 1988 ,  102 Stat. 3425 , provided that:  “The amendments made by subparagraph (A) [amending this section] shall apply in the case of any REMIC where the start-up day (as defined in section 860G(a)(9) of the 1986 Code, as in effect on the day before the date of the enactment of this Act [ Nov. 10, 1988 ]) is after  March 31, 1988 ; except that such amendments shall not apply in the case of a REMIC formed pursuant to a binding written contract in effect on such date.”\nAmendment by section 1006(t)(2)(A)(i), (19) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'The taxable income of any holder of a residual interest in a REMIC for any taxable year shall in no event be less than the excess inclusion for such taxable year.\nAll members of an affiliated group filing a consolidated return shall be treated as 1 taxpayer for purposes of this subsection.\nIf the holder of any residual interest in a REMIC is an organization subject to the tax imposed by section 511, the excess inclusion of such holder for any taxable year shall be treated as unrelated business taxable income of such holder for purposes of section 511.\nFor purposes of this paragraph, the term “Federal long-term rate” means the Federal long-term rate which would have applied to the residual interest under section 1274(d) (determined without regard to paragraph (2) thereof) if it were a debt instrument.\nA tax is hereby imposed on any transfer of a residual interest in a REMIC to a disqualified organization.\nThe tax imposed by paragraph (1) on any transfer shall be paid by the transferor; except that, where such transfer is through an agent for a disqualified organization, such tax shall be paid by such agent.\nAny tax imposed by this paragraph with respect to any excess inclusion of any pass-thru entity for any taxable year shall, for purposes of this title (other than this subsection), be applied against (and operate to reduce) the amount included in gross income with respect to the residual interest involved.\nFor purposes of subtitle F, the taxes imposed by this subsection shall be treated as excise taxes with respect to which the deficiency procedures of such subtitle apply.\nExcept as provided in regulations, with respect to any variable contract (as defined in section 817), there shall be no adjustment in the reserve to the extent of any excess inclusion.\n2022—Subsec. (a)(4)(A).  Pub. L. 117–169  substituted “55(b)(1)(D)” for “55(b)(2)”.\n2020—Subsec. (a)(3)(B).  Pub. L. 116–136  substituted “subsection (a)(2)(B)(ii)(I) and the second sentence of subsection (b)(2) of section 172.” for “the 2nd sentence of section 172(b)(2).”\n2017—Subsec. (e)(2)(B), (6)(A)(ii).  Pub. L. 115–97  substituted “section 11(b)” for “section 11(b)(1)”.\n1996—Subsec. (a)(1).  Pub. L. 104–188, §\u202f1616(b)(10)(A) , substituted “The” for “Except as provided in paragraph (2), the”.\nSubsec. (a)(2).  Pub. L. 104–188, §\u202f1616(b)(10)(B) , (C), redesignated par. (3) as (2), struck out “,\u2000except that paragraph (2) shall be applied separately with respect to each corporation which is a member of such group and to which section 593 applies” after “of this subsection”, and struck out former par. (2) which read as follows: “ Exception for certain financial institutions .—Paragraph (1) shall not apply to any organization to which section 593 applies. The Secretary may by regulations provide that the preceding sentence shall not apply where necessary or appropriate to prevent avoidance of tax imposed by this chapter.”\nSubsec. (a)(3).  Pub. L. 104–188, §\u202f1616(b)(10)(B) , redesignated par. (5) as (3). Former par. (3) redesignated (2).\nSubsec. (a)(4).  Pub. L. 104–188, §\u202f1616(b)(10)(B) , (D), redesignated par. (6) as (4), struck out at end “The preceding sentence shall not apply to any organization to which section 593 applies, except to the extent provided in regulations prescribed by the Secretary under paragraph (2).”, and struck out former par. (4) which related to certain subsidiaries being treated as single corporations to which section 593 applied.\nSubsec. (a)(5).  Pub. L. 104–188, §\u202f1616(b)(10)(B) , redesignated par. (5) as (3).\nSubsec. (a)(6).  Pub. L. 104–188, §\u202f1616(b)(10)(B) , redesignated par. (6) as (4).\nPub. L. 104–188, §\u202f1704(h)(1) , added par. (6).\n1988—Subsec. (a)(3), (4).  Pub. L. 100–647, §\u202f1006(t)(15) , added pars. (3) and (4).\nSubsec. (a)(5).  Pub. L. 100–647, §\u202f1006(t)(27) , added par. (5).\nSubsec. (c)(2)(B).  Pub. L. 100–647, §\u202f1006(t)(13) , (17), substituted “issue price of the residual interest (adjusted for contributions)” for “issue price of residual interest” in introductory text, and in cl. (ii) inserted “(but not below zero)” after “decreased”.\nSubsec. (d).  Pub. L. 100–647, §\u202f1006(t)(23) , inserted at end “Rules similar to the rules of the preceding sentence shall apply also in the case of regulated investment companies, common trust funds, and organizations to which part I of subchapter T applies.”\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(t)(16)(B) , added subsec. (e).\nSubsec. (f).  Pub. L. 100–647, §\u202f1006(t)(26) , added subsec. (f).\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 116–136  applicable to taxable years beginning after  Dec. 31, 2017 , and to taxable years beginning on or before  Dec. 31, 2017 , to which net operating losses arising in taxable years beginning after  Dec. 31, 2017 , are carried, see  section 2303(d)(1) of Pub. L. 116–136 , set out in a note under  section 172 of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 1616(b)(10) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , but not applicable to any residual interest held by a taxpayer if such interest has been held by such taxpayer at all times since  Oct. 31, 1995 , see section 1616(c)(1), (4) of  Pub. L. 104–188 , set out as a note under  section 593 of this title .\nPub. L. 104–188, title I, §\u202f1704(h)(2) ,  Aug. 20, 1996 ,  110 Stat. 1881 , provided that:  “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 671 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ] unless the taxpayer elects to apply such amendment only to taxable years beginning after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 100–647, title I, §\u202f1006(t)(16)(D)(ii) –(iv),  Nov. 10, 1988 ,  102 Stat. 3425 , provided that: \n “(ii)  The amendments made by subparagraphs (B) and (C) [amending this section and  section 26 of this title ] (except to the extent they relate to paragraph (6) of section 860E(e) of the 1986 Code as added by such amendments) shall apply to transfers after  March 31, 1988 ; except that such amendments shall not apply to any transfer pursuant to a binding written contract in effect on such date. \n \n “(iii)  Except as provided in clause (iv), the amendments made by subparagraphs (B) and (C) (to the extent they relate to paragraph (6) of section 860E(e) of the 1986 Code as so added) shall apply to excess inclusions for periods after  March 31, 1988  but only to the extent such inclusions are— “(I)  allocable to an interest in a pass-thru entity acquired after  March 31, 1988 , or \n \n “(II)  allocable to an interest in a pass-thru entity acquired on or before  March 31, 1988 , but attributable to a residual interest acquired by the pass-thru entity after  March 31, 1988 . \n \n\n For purposes of the preceding sentence, any interest in a pass-thru entity (or residual interest) acquired after  March 31, 1988 , pursuant to a binding written contract in effect on such date shall be treated as acquired before such date. \n “(iv)  In the case of any real estate investment trust, regulated investment company, common trust fund, or publicly traded partnership, no tax shall be imposed under section 860E(e)(6) of the 1986 Code (as added by the amendment made by subparagraph (B)) for any taxable year beginning before  January 1, 1989 .”\nAmendment by section 1006(t)(13), (15), (17), (23), (26), (27) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'There is hereby imposed for each taxable year of a REMIC a tax equal to 100 percent of the net income derived from prohibited transactions.\nThe receipt of any income attributable to any asset which is neither a qualified mortgage nor a permitted investment.\nThe receipt by the REMIC of any amount representing a fee or other compensation for services.\nGain from the disposition of any cash flow investment other than pursuant to any qualified liquidation.\nFor purposes of paragraph (1), the term “net income derived from prohibited transactions” means the excess of the gross income from prohibited transactions over the deductions allowed by this chapter which are directly connected with such transactions; except that there shall not be taken into account any item attributable to any prohibited transaction for which there was a loss.\nNo gain or loss shall be recognized to the transferor on the transfer of any property to a REMIC in exchange for regular or residual interests in such REMIC.\nThe adjusted bases of the regular and residual interests received in a transfer described in subparagraph (A) shall be equal to the aggregate adjusted bases of the property transferred in such transfer. Such amount shall be allocated among such interests in proportion to their respective fair market values.\nThe basis of any property received by a REMIC in a transfer described in paragraph (1)(A) shall be its fair market value immediately after such transfer.\nFor purposes of subtitle F, a REMIC shall be treated as a partnership (and holders of residual interests in such REMIC shall be treated as partners). Any return required by reason of the preceding sentence shall include the amount of the daily accruals determined under section 860E(c). Such return shall be filed by the REMIC. The determination of who may sign such return shall be made without regard to the first sentence of this subsection.\n1996—Subsec. (a)(5).  Pub. L. 104–188  substituted “paragraph (2)” for “paragraph (1)” in introductory provisions.\n1988—Subsec. (a)(2)(A).  Pub. L. 100–647, §\u202f1006(t)(3)(B)(i) , struck out at end “Notwithstanding the preceding sentence, the term ‘prohibited transaction’ shall not include any disposition required to prevent default on a regular interest where the threatened default resulted from a default on 1 or more qualified mortgages.”\nSubsec. (a)(2)(A)(i).  Pub. L. 100–647, §\u202f1006(t)(3)(A) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the substitution of a qualified replacement mortgage for a qualified mortgage,”.\nSubsec. (a)(2)(A)(iii), (C).  Pub. L. 100–647, §\u202f1006(t)(22)(B) , (C), substituted “REMIC” for “real estate mortgage pool”.\nSubsec. (a)(2)(D).  Pub. L. 100–647, §\u202f1006(t)(3)(C) , struck out “described in subsection (b)” before period at end.\nSubsec. (a)(5).  Pub. L. 100–647, §\u202f1006(t)(3)(B)(ii) , added par. (5).\nSubsec. (b)(1)(A).  Pub. L. 100–647, §\u202f1006(t)(4) , substituted “the transfer of any property to a REMIC in exchange for regular or residual interests in such REMIC” for “the transfer of any property to a REMIC”.\nSubsec. (b)(1)(C)(ii).  Pub. L. 100–647, §\u202f1006(t)(22)(D) , substituted “REMIC” for “real estate mortgage pool”.\nSubsec. (b)(1)(D)(ii).  Pub. L. 100–647, §\u202f1006(t)(14) , (22)(E), amended cl. (ii) identically, substituting “REMIC” for “real estate mortgage pool”.\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(t)(18)(A) , inserted at end “Such return shall be filed by the REMIC. The determination of who may sign such return shall be made without regard to the first sentence of this subsection.”\nPub. L. 100–647, title I, §\u202f1006(t)(18)(B) ,  Nov. 10, 1988 ,  102 Stat. 3426 , provided that:  “Unless the REMIC otherwise elects, the amendment made by subparagraph (A) [amending this section] shall not apply to any REMIC where the start-up day (as defined in section 860G(a)(9) of the 1986 Code as in effect on the day before the date of the enactment of this Act [ Nov. 10, 1988 ]) is before the date of the enactment of this Act.”\nAmendment by section 1006(t)(3), (4), (14), (22)(B)–(E) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REAL ESTATE MORTGAGE INVESTMENT CONDUITS'},
  'content': 'The term “residual interest” means an interest in a REMIC which is issued on the startup day, which is not a regular interest, and which is designated as a residual interest.\nThe term “cash flow investment” means any investment of amounts received under qualified mortgages for a temporary period before distribution to holders of interests in the REMIC.\nThe term “qualified reserve asset” means any intangible property which is held for investment and as part of a qualified reserve fund.\nA reserve shall not be treated as a qualified reserve for any taxable year (and all subsequent taxable years) if more than 30 percent of the gross income from the assets in such fund for the taxable year is derived from the sale or other disposition of property held for less than 3 months. For purposes of the preceding sentence, gain on the disposition of a qualified reserve asset shall not be taken into account if the disposition giving rise to such gain is required to prevent default on a regular interest where the threatened default resulted from a default on 1 or more qualified mortgages.\nThe term “startup day” means the day on which the REMIC issues all of its regular and residual interests. To the extent provided in regulations, all interests issued (and all transfers to the REMIC) during any period (not exceeding 10 days) permitted in such regulations shall be treated as occurring on the day during such period selected by the REMIC for purposes of this paragraph.\nThe issue price of any regular or residual interest in a REMIC shall be determined under section 1273(b) in the same manner as if such interest were a debt instrument; except that if the interest is issued for property, paragraph (3) of section 1273(b) shall apply whether or not the requirements of such paragraph are met.\nA tax is hereby imposed for each taxable year on the net income from foreclosure property of each REMIC. Such tax shall be computed by multiplying the net income from foreclosure property by the highest rate of tax specified in section 11(b).\nFor purposes of this part, the term “net income from foreclosure property” means the amount which would be the REMIC’s net income from foreclosure property under section 857(b)(4)(B) if the REMIC were a real estate investment trust.\nExcept as provided in paragraph (2), if any amount is contributed to a REMIC after the startup day, there is hereby imposed a tax for the taxable year of the REMIC in which the contribution is received equal to 100 percent of the amount of such contribution.\n2018—Subsec. (a)(3)(A)(iii)(III).  Pub. L. 115–141  substituted comma for period at end.\n2005—Subsec. (a)(3).  Pub. L. 109–135, §\u202f403(cc)(2) , inserted concluding provisions and struck out former concluding provisions which read as follows: “For purposes of subparagraph (A), any obligation secured by stock held by a person as a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as so defined) shall be treated as secured by an interest in real property, and any reverse mortgage loan (and each balance increase on such loan meeting the requirements of subparagraph (A)(iii)) shall be treated as an obligation secured by an interest in real property. For purposes of subparagraph (A), if more than 50 percent of the obligations transferred to, or purchased by, the REMIC are originated by the United States or any State (or any political subdivision, agency, or instrumentality of the United States or any State) and are principally secured by an interest in real property, then each obligation transferred to, or purchased by, the REMIC shall be treated as secured by an interest in real property.”\nSubsec. (a)(3)(A)(iii)(I).  Pub. L. 109–135, §\u202f403(cc)(1) , substituted “a reverse mortgage loan or other obligation” for “the obligation”.\n2004—Subsec. (a)(1).  Pub. L. 108–357, §\u202f835(b)(5)(A) , inserted at end of concluding provisions “An interest shall not fail to qualify as a regular interest solely because the specified principal amount of the regular interest (or the amount of interest accrued on the regular interest) can be reduced as a result of the nonoccurrence of 1 or more contingent payments with respect to any reverse mortgage loan held by the REMIC if, on the startup day for the REMIC, the sponsor reasonably believes that all principal and interest due under the regular interest will be paid at or prior to the liquidation of the REMIC.”\nSubsec. (a)(3).  Pub. L. 108–357, §\u202f835(b)(7) , inserted at end of concluding provisions “For purposes of subparagraph (A), if more than 50 percent of the obligations transferred to, or purchased by, the REMIC are originated by the United States or any State (or any political subdivision, agency, or instrumentality of the United States or any State) and are principally secured by an interest in real property, then each obligation transferred to, or purchased by, the REMIC shall be treated as secured by an interest in real property.”\nPub. L. 108–357, §\u202f835(b)(5)(B) , inserted before period at end of concluding provisions “,\u2000and any reverse mortgage loan (and each balance increase on such loan meeting the requirements of subparagraph (A)(iii)) shall be treated as an obligation secured by an interest in real property”.\nSubsec. (a)(3)(A)(iii).  Pub. L. 108–357, §\u202f835(b)(8)(A) , added cl. (iii).\nSubsec. (a)(3)(B) to (D).  Pub. L. 108–357, §\u202f835(b)(6) , inserted “and” at end of subpar. (B), substituted period for “,\u2000and” at end of subpar. (C), and struck out subpar. (D) which read as follows: “any regular interest in a FASIT which is transferred to, or purchased by, the REMIC as described in clauses (i) and (ii) of subparagraph (A) but only if 95 percent or more of the value of the assets of such FASIT is at all times attributable to obligations described in subparagraph (A) (without regard to such clauses).”\nSubsec. (a)(7)(B).  Pub. L. 108–357, §\u202f835(b)(8)(B) , reenacted heading without change and amended text of subpar. (B) generally. Prior to amendment, text read as follows: “For purposes of subparagraph (A), the term ‘qualified reserve fund’ means any reasonably required reserve to provide for full payment of expenses of the REMIC or amounts due on regular interests in the event of defaults on qualified mortgages or lower than expected returns on cash flow investments. The amount of any such reserve shall be promptly and appropriately reduced as payments of qualified mortgages are received.”\n1996—Subsec. (a)(3)(D).  Pub. L. 104–188  added subpar. (D).\n1990—Subsec. (a)(3)(A).  Pub. L. 101–508  struck out comma after “secured” in introductory provisions.\n1989—Subsec. (a)(3).  Pub. L. 101–239  substituted “subparagraph (A)” for “this subparagraph” in last sentence.\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1006(t)(5)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘regular interest’ means an interest in a REMIC the terms of which are fixed on the startup day, and which—\n“(A) unconditionally entitles the holder to receive a specified principal amount (or other similar amount), and\n“(B) provides that interest payments (or other similar amounts), if any, at or before maturity are payable based on a fixed rate (or to the extent provided in regulations, at a variable rate).\nAn interest shall not fail to meet the requirements of subparagraph (A) merely because the timing (but not the amount) of the principal payments (or other similar amounts) may be contingent on the extent of prepayments on qualified mortgages and the amount of income from permitted investments.”\nSubsec. (a)(2).  Pub. L. 100–647, §\u202f1006(t)(5)(B) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “The term ‘residual interest’ means an interest in a REMIC which is not a regular interest and is designated as a residual interest.”\nSubsec. (a)(3).  Pub. L. 100–647, §\u202f1006(t)(6)(B) , inserted at end “For purposes of this subparagraph, any obligation secured by stock held by a person as a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as so defined) shall be treated as secured by an interest in real property.”\nSubsec. (a)(3)(A).  Pub. L. 100–647, §\u202f1006(t)(6)(A) , struck out “directly or indirectly,”.\nSubsec. (a)(3)(A)(i).  Pub. L. 100–647, §\u202f1006(t)(5)(C)(i) , substituted “on the startup day in exchange for regular or residual interests in the REMIC” for “on or before the startup day”.\nSubsec. (a)(3)(A)(ii).  Pub. L. 100–647, §\u202f1006(t)(5)(C)(ii) , inserted before comma at end “if, except as provided in regulations, such purchase is pursuant to a fixed-price contract in effect on the startup day”.\nSubsec. (a)(3)(C).  Pub. L. 100–647, §\u202f1006(t)(5)(C)(iii) , substituted “on the startup day in exchange for regular or residual interests in the REMIC” for “on or before the startup day”.\nSubsec. (a)(4)(A).  Pub. L. 100–647, §\u202f1006(t)(5)(D) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which would be described in paragraph (3)(A) if it were transferred to the REMIC on or before the startup day, and”.\nSubsec. (a)(7)(B).  Pub. L. 100–647, §\u202f1006(t)(7) , inserted before period at end of first sentence “or lower than expected returns on cash flow investments”.\nSubsec. (a)(8).  Pub. L. 100–647, §\u202f1006(t)(8)(A) , substituted “section 856(e) (without regard to paragraph (5) thereof)” for “section 856(e)” in subpar. (A) and amended last sentence generally. Prior to amendment, last sentence read as follows: “Property shall cease to be foreclosure property with respect to the REMIC on the date which is 1 year after the date such real estate mortgage pool acquired such property.”\nSubsec. (a)(9).  Pub. L. 100–647, §\u202f1006(t)(5)(E) , amended par. (9) generally. Prior to amendment, par. (9) read as follows: “The term ‘startup day’ means any day selected by a REMIC which is on or before the 1st day on which interests in such REMIC are issued.”\nSubsec. (c).  Pub. L. 100–647, §\u202f1006(t)(8)(B) , added subsec. (c). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 100–647, §\u202f1006(t)(9)(A) , added subsec. (d). Former subsec. (d) redesignated (e).\nPub. L. 100–647, §\u202f1006(t)(8)(B) , redesignated former subsec. (c) as (d).\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(t)(9)(A) , redesignated former subsec. (d) as (e).\nSubsec. (e)(4), (5).  Pub. L. 100–647, §\u202f1006(t)(10) , added pars. (4) and (5).\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 108–357  effective  Jan. 1, 2005 , with exception for any FASIT in existence on  Oct. 22, 2004 , to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance, see  section 835(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 104–188  effective  Sept. 1, 1997 , see  section 1621(d) of Pub. L. 104–188 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1006(t)(5)(F) ,  Nov. 10, 1988 ,  102 Stat. 3421 , provided that:  “The amendments made by this paragraph [amending this section] shall not apply to any REMIC where the startup day (as defined in section 860G(a)(9) of the 1986 Code as in effect on the day before the date of the enactment of this Act [ Nov. 10, 1988 ]) is before  July 1, 1987 .”\nPub. L. 100–647, title I, §\u202f1006(t)(9)(B) ,  Nov. 10, 1988 ,  102 Stat. 3422 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall not apply to any REMIC where the startup day (as defined in section 860G(a)(9) of the 1986 Code as in effect on the day before the date of the enactment of this Act [ Nov. 10, 1988 ]) is before  July 1, 1987 .”\nAmendment by section 1006(t)(6)–(8)(B), (10) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 860H, added  Pub. L. 104–188, title I, §\u202f1621(a) ,  Aug. 20, 1996 ,  110 Stat. 1858 , set forth general rules relating to taxation of a FASIT.\nSection 860I, added  Pub. L. 104–188, title I, §\u202f1621(a) ,  Aug. 20, 1996 ,  110 Stat. 1859 , related to gain recognition on contributions to a FASIT and in other cases.\nSection 860J, added  Pub. L. 104–188, title I, §\u202f1621(a) ,  Aug. 20, 1996 ,  110 Stat. 1860 , prohibited offset of certain FASIT inclusions by non-FASIT losses.\nSection 860K, added  Pub. L. 104–188, title I, §\u202f1621(a) ,  Aug. 20, 1996 ,  110 Stat. 1861 , related to treatment of transfers of high-yield interests to disqualified holders.\nSection 860L, added  Pub. L. 104–188, title I, §\u202f1621(a) ,  Aug. 20, 1996 ,  110 Stat. 1862 ; amended  Pub. L. 105–34, title XVI, §\u202f1601(f)(6) ,  Aug. 5, 1997 ,  111 Stat. 1091 , defined terms and set forth special rules relating to FASITs.\nRepeal effective  Jan. 1, 2005 , with exception for any FASIT in existence on  Oct. 22, 2004 , to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance, see  section 835(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN INCOME'},
  'content': 'Rentals or royalties from property located in the United States or from any interest in such property, including rentals or royalties for the use of or for the privilege of using in the United States patents, copyrights, secret processes and formulas, good will, trade-marks, trade brands, franchises, and other like property.\nGains, profits, and income from the disposition of a United States real property interest (as defined in section 897(c)).\nGains, profits, and income derived from the purchase of inventory property (within the meaning of section 865(i)(1)) without the United States (other than within a possession of the United States) and its sale or exchange within the United States.\nAny social security benefit (as defined in section 86(d)).\nFrom the items of gross income specified in subsection (a) as being income from sources within the United States there shall be deducted the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of any expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income. The remainder, if any, shall be included in full as taxable income from sources within the United States. In the case of an individual who does not itemize deductions, an amount equal to the standard deduction shall be considered a deduction which cannot definitely be allocated to some item or class of gross income.\nFor purposes of subsection (a)(2)(B), if the foreign corporation has no gross income from any source for the 3-year period (or part thereof) specified, the requirements of such subsection shall be applied with respect to the taxable year of such corporation in which the payment of the dividend is made.\nParagraph (1) shall not apply to a lease between two members of the same controlled group of corporations (as defined in section 1563) if any member of such group is a domestic common carrier by railroad or a switching or terminal company all of whose stock is owned by one or more domestic common carriers by railroad.\nNo credit shall be allowed under section 901 for any payments to foreign countries with respect to any amount received by the taxpayer with respect to railroad rolling stock which is subject to paragraph (1).\nFor treatment of interest paid by the branch of a foreign corporation, see section 884(f).\n2018—Subsec. (a)(2)(A).  Pub. L. 115–141  struck out “other than a corporation which has an election in effect under section 936” after “corporation”.\n2017—Subsec. (a)(2).  Pub. L. 115–97, §\u202f13002(e)(2) , substituted “100/65th” for “100/80th” and “100/50th” for “100/70th” in concluding provisions.\nSubsec. (a)(2)(B).  Pub. L. 115–97, §\u202f13002(e)(1) , substituted “100/50th” for “100/70th”.\n2010—Subsec. (a)(1).  Pub. L. 111–226, §\u202f217(a) , redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which read as follows: “interest from a resident alien individual or domestic corporation, if such individual or corporation meets the 80-percent foreign business requirements of subsection (c)(1),”.\nSubsec. (a)(9).  Pub. L. 111–240  added par. (9).\nSubsecs. (c) to (f).  Pub. L. 111–226, §\u202f217(c)(1) , redesignated subsecs. (d) to (f) as (c) to (e), respectively, and struck out former subsec. (c) which related to foreign business requirements.\n2004—Subsec. (a)(1)(C).  Pub. L. 108–357  added subpar. (C).\n2001—Subsec. (a)(3).  Pub. L. 107–16  struck out “except for purposes of sections 79 and 105 and subchapter D,” after “In addition,” in concluding provisions.\n1997—Subsec. (a)(3).  Pub. L. 105–34  inserted concluding provisions “In addition, except for purposes of sections 79 and 105 and subchapter D, compensation for labor or services performed in the United States shall not be deemed to be income from sources within the United States if the labor or services are performed by a nonresident alien individual in connection with the individual’s temporary presence in the United States as a regular member of the crew of a foreign vessel engaged in transportation between the United States and a foreign country or a possession of the United States.”\n1996—Subsec. (e)(1)(A).  Pub. L. 104–188  provided that the amendment made by  section 11813(b)(17) of Pub. L. 101–508  shall be applied as if the material stricken by such amendment included the closing parenthesis after “section 48(a)(5)”. See 1990 Amendment note below.\n1990—Subsec. (a)(1)(A), (B).  Pub. L. 101–508, §\u202f11801(a)(29) , (c)(14), inserted “and” at end of subpar. (A), substituted a period for a comma at end of subpar. (B), and struck out subpars. (C) and (D) which read as follows:\n“(C) interest on a debt obligation which was part of an issue with respect to which an election has been made under subsection (c) of section 4912 (as in effect before  July 1, 1974 ) and which, when issued (or treated as issued under subsection (c)(2) of such section), had a maturity not exceeding 15 years and, when issued, was purchased by one or more underwriters with a view to distribution through resale, but only with respect to interest attributable to periods after the date of such election, and\n“(D) interest on a debt obligation which was part of an issue which—\n“(i) was part of an issue outstanding on  April 1, 1971 ,\n“(ii) was guaranteed by a United States person,\n“(iii) was treated under chapter 41 as a debt obligation of a foreign obligor,\n“(iv) as of  June 30, 1974 , had a maturity of not more than 15 years, and\n“(v) when issued, was purchased by one or more underwriters for the purpose of distribution through resale.”\nSubsec. (e)(1)(A).  Pub. L. 101–508, §\u202f11813(b)(17) , which directed the substitution of “which is section 1245 property (as defined in section 1245(a)(3))” for “which is section 38 property (or would be section 38 property but for section 48(a)(5)”, was executed by making the substitution for “which is section 38 property (or would be section 38 property but for section 48(a)(5))”. See 1996 Amendment note above.\nSubsec. (e)(2).  Pub. L. 101–508, §\u202f11801(c)(6)(C) , substituted “all of whose stock is owned by one or more domestic common carriers by railroad” for “referred to in subparagraph (B) of section 184(d)(1)”.\n1989—Subsec. (a)(6).  Pub. L. 101–239, §\u202f7811(i)(2) , substituted “865(i)(1)” for “865(h)(1)”.\nSubsec. (e)(1).  Pub. L. 101–239, §\u202f7841(d)(9) , substituted “section 862(a)” for “section 826(a)” in introductory provisions.\n1988—Subsec. (a)(2)(B).  Pub. L. 100–647, §\u202f1012(q)(7) , substituted “other than income described in section 884(d)(2)” for “other than under section 884(d)(2)” in two places.\nSubsec. (a)(2)(C).  Pub. L. 100–647, §\u202f1012(q)(15) , substituted “section 243(e)” for “section 243(d)”.\nSubsec. (a)(6).  Pub. L. 100–647, §\u202f1018(u)(39) , substituted “inventory property” for “personal property” in heading.\nSubsec. (a)(7).  Pub. L. 100–647, §\u202f1012(i)(10) , amended par. (7) generally. Prior to amendment, par. (7) read as follows: “Amounts received as underwriting income (as defined in section 832(b)(3)) derived from the insurance of United States risks (as defined in section 953(a)).”\nSubsec. (c)(1)(B).  Pub. L. 100–647, §\u202f1012(g)(3) , inserted “or, in the case of a corporation, is attributable to income so derived by a subsidiary of such corporation” after parenthetical in cl. (i), struck out “or chain of subsidiaries of such corporation” after “by a subsidiary” in cl. (ii), and inserted sentence at end defining “subsidiary”.\nSubsec. (c)(2)(B)(ii).  Pub. L. 100–647, §\u202f1012(i)(14)(B) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “such section shall be applied by substituting ‘10 percent’ for ‘50 percent’ each place it appears.”\nSubsec. (f).  Pub. L. 100–647, §\u202f1012(g)(9) , added subsec. (f).\n1987—Subsec. (a)(2).  Pub. L. 100–203, §\u202f10221(d)(4)(B) , inserted at end “In the case of any dividend from a 20-percent owned corporation (as defined in section 243(c)(2)), subparagraph (B) shall be applied by substituting ‘100/80th’ for ‘100/70th’.”\nSubsec. (a)(2)(B).  Pub. L. 100–203, §\u202f10221(d)(4)(A) , which directed that subpar. (B) be amended by substituting “100/70th” for “100/85th”, was executed by substituting “100/70th” for “100/85ths” to reflect the probable intent of Congress.\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1241(b)(1)(A) , substituted “noncorporate residents or domestic corporations” for “residents, corporate or otherwise,” in introductory text.\nSubsec. (a)(1)(A).  Pub. L. 99–514, §\u202f1214(a)(1) , (c)(5)(A), amended subpar. (B) generally and redesignated it as (A). Prior to amendment and redesignation, former subpar. (B) read as follows: “interest received from a resident alien individual or a domestic corporation, when it is shown to the satisfaction of the Secretary that less than 20 percent of the gross income from all sources of such individual or such corporation has been derived from sources within the United States, as determined under the provisions of this part, for the 3-year period ending with the close of the taxable year of such individual or such corporation preceding the payment of such interest, or for such part of such period as may be applicable,”. Former subpar. (A), which read “interest on amounts described in subsection (c) received by a nonresident alien individual or a foreign corporation, if such interest is not effectively connected with the conduct of a trade or business within the United States,”, was struck out.\nSubsec. (a)(1)(B).  Pub. L. 99–514, §\u202f1241(b)(1)(B) , redesignated subpar. (D), as previously redesignated and amended by §\u202f1214(c)(5)(A), (B) of  Pub. L. 99–514 , as (B) and struck out former subpar. (B) [previously (C)] which read as follows: “interest received from a foreign corporation (other than interest paid or credited by a domestic branch of a foreign corporation, if such branch is engaged in the commercial banking business), when it is shown to the satisfaction of the Secretary that less than 50 percent of the gross income from all sources of such foreign corporation for the 3-year period ending with the close of its taxable year preceding the payment of such interest (or for such part of such period as the corporation has been in existence) was effectively connected with the conduct of a trade or business within the United States,”.\nPub. L. 99–514, §\u202f1214(c)(5)(A) , (B), redesignated former subpar. (F) as (D), substituted in cl. (ii), “subparagraph (B) of section 871(i)(3)” for “paragraph (2) of subsection (c)”, and redesignated former subpar. (C) as (B). Former subpar. (B) redesignated (A).\nSubsec. (a)(1)(C).  Pub. L. 99–514, §\u202f1241(b)(1)(B) , redesignated subpar. (E), as previously redesignated by  §\u202f1214(c)(5)(A) of Pub. L. 99–514 , as (C) and struck out former subpar. (C) [previously (D)] which read as follows: “in the case of interest received from a foreign corporation (other than interest paid or credited by a domestic branch of a foreign corporation, if such branch is engaged in the commercial banking business), 50 percent or more of the gross income of which from all sources for the 3-year period ending with the close of its taxable year preceding the payment of such interest (or for such part of such period as the corporation has been in existence) was effectively connected with the conduct of a trade or business within the United States, an amount of such interest which bears the same ratio to such interest as the gross income of such foreign corporation for such period which was not effectively connected with the conduct of a trade or business within the United States bears to its gross income from all sources,”.\nPub. L. 99–514, §\u202f1214(c)(5)(A) , redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).\nSubsec. (a)(1)(D).  Pub. L. 99–514, §\u202f1214(c)(5)(A) , redesignated subpar. (H) as (F).  Pub. L. 99–514, §\u202f1241(b)(1)(B) , then redesignated such subpar. (F) as (D). The original subpar. (D) was redesignated (C) and struck out, and the original subpar. (F) was redesignated (D), then (B).\nSubsec. (a)(1)(E).  Pub. L. 99–514, §\u202f1241(b)(1)(B) , redesignated subpar. (E), as previously redesignated by  §\u202f1214(c)(5)(A) of Pub. L. 99–514 , as (C).\nPub. L. 99–514, §\u202f1214(c)(5)(A) , redesignated subpar. (G) as (E) and struck out former subpar. (E) which read as follows: “income derived by a foreign central bank of issue from bankers’ acceptances,”.\nSubsec. (a)(1)(F).  Pub. L. 99–514 , §§\u202f1214(c)(5)(A), 1241(b)(1)(B), redesignated successively former subpar. (F) as (D) and (B), respectively.\nSubsec. (a)(1)(G).  Pub. L. 99–514 , §§\u202f1214(c)(5)(A), 1241(b)(1)(B), redesignated successively former subpar. (G) as (E) and (C), respectively.\nSubsec. (a)(1)(H).  Pub. L. 99–514 , §§\u202f1214(c)(5)(A), 1241(b)(1)(B), redesignated successively former subpar. (H) as (F) and (D), respectively.\nSubsec. (a)(2)(A).  Pub. L. 99–514, §\u202f1214(b) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “from a domestic corporation other than a corporation which has an election in effect under section 936, and other than a corporation less than 20 percent of whose gross income is shown to the satisfaction of the Secretary to have been derived from sources within the United States, as determined under the provisions of this part, for the 3-year period ending with the close of the taxable year of such corporation preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence), or”.\nSubsec. (a)(2)(B).  Pub. L. 99–514, §\u202f1241(b)(2) , substituted “25 percent” for “50 percent” and inserted “(or treated as effectively connected other than under section 884(d)(2))” in two places.\nSubsec. (a)(6).  Pub. L. 99–514, §\u202f1211(b)(1)(B) , substituted “inventory property (within the meaning of section 865(h)(1))” for “personal property”.\nSubsec. (b).  Pub. L. 99–514, §\u202f104(b)(11) , substituted “the standard deduction” for “the zero bracket amount”.\nSubsec. (c).  Pub. L. 99–514, §\u202f1214(a)(2) , amended subsec. (c) generally, substituting provisions relating to foreign business requirements for provisions relating to interest on deposits.\nSubsec. (d).  Pub. L. 99–514, §\u202f1214(c)(5)(C) , amended subsec. (d) generally, substituting provision for special rule for application of subsec. (a)(2)(B) for former provision for special rules for application of subsec. (a), pars. (1)(B) to (1)(D) and (2)(B), pars. (1) and (2) thereof relating to new entities and transition rule provisions.\nSubsecs. (e), (f).  Pub. L. 99–514, §\u202f1212(d) , redesignated subsec. (f) as (e) and struck out former subsec. (e) relating to treatment of income from certain leased aircraft, vessels, and spacecraft as income from sources within the United States.\n1983—Subsec. (a)(8).  Pub. L. 98–21  added par. (8).\n1980—Subsec. (a)(5).  Pub. L. 96–499  substituted “Disposition of United States real property interest” for “Sale or exchange of real property” in heading and “disposition of a United States real property interest (as defined in section 897(c))” for “sale or exchange of real property located in the United States” in text.\nSubsec. (e).  Pub. L. 96–605  substituted provision directing that income from certain leased aircraft, vessels, and spacecraft be treated as income from sources within the United States for provision permitting the taxpayer to elect to treat income from certain aircraft and vessels as income from sources within the United States and prescribing the manner of revocating such an election.\n1978—Subsec. (a)(1)(F).  Pub. L. 95–600, §\u202f540(a) , designated existing provisions as cl. (i) and added cl. (ii).\nSubsec. (f).  Pub. L. 95–600, §\u202f370(a) , added subsec. (f).\n1977—Subsec. (b).  Pub. L. 95–30  provided that, in the case of an individual who does not itemize deductions, an amount equal to the zero bracket amount shall be considered a deduction which cannot definitely be allocated to some item or class of gross income.\n1976—Subsec. (a)(1).  Pub. L. 94–455 , §§\u202f1901(c)(7), 1904(b)(10)(B), struck out “,\u2000any Territory, any political subdivision of a Territory,” after “United States” in provisions preceding subpar. (A) and, in subpar. (G), substituted “subsection (c) of section 4912 (as in effect before  July 1, 1974 )” for “section 4912(c)” and “subsection (c)(2) of such section” for “section 4912(c)(2)”.\nSubsec. (a)(2)(A).  Pub. L. 94–455 , §§\u202f1051(h)(3), 1906(b)(13)(A), substituted “other than a corporation which has an election in effect under section 936” for “other than a corporation entitled to the benefits of section 931” and struck out “or his delegate” after “Secretary”.\nSubsec. (a)(2)(D).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (a)(5), (6).  Pub. L. 94–455, §\u202f1901(b)(26)(A) , substituted “sale or exchange” for “sale” in headings and text.\nSubsec. (a)(7).  Pub. L. 94–455, §\u202f1036(a) , added par. (7).\nSubsec. (c)(3).  Pub. L. 94–455, §\u202f1041 , struck out provision that subsecs. (a)(1)(A) and (c) would cease to apply effective with respect to amounts paid or credited after  Dec. 31, 1976 .\nSubsec. (e)(1).  Pub. L. 94–455, §\u202f1901(b)(26)(B) , substituted “sale, exchange, or other disposition” for “sale or other disposition”.\nSubsecs. (e)(2), (3).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1975—Subsec. (a)(1)(H).  Pub. L. 93–625, §\u202f9(a) , added subpar. (H).\nSubsec. (c)(3).  Pub. L. 93–625, §\u202f8 , substituted “1976” for “1975”.\n1971—Subsec. (a)(1)(G).  Pub. L. 92–9  added subpar. (G).\nSubsec. (a)(2)(D).  Pub. L. 92–178, §\u202f503 , added subpar. (D).\nSubsec. (e).  Pub. L. 92–178, §\u202f314(a) , added subsec. (e).\n1969—Subsec. (a)(1)(C), (D).  Pub. L. 91–172, §\u202f435(a)(1) , struck out “after  December 31, 1972 ,” after “interest paid or credited” in parenthetical after “interest received from a foreign corporation”.\nSubsec. (c)(3).  Pub. L. 91–172, §\u202f435(a)(2) , substituted “1975” for “1972”.\n1966—Subsec. (a)(1)(A).  Pub. L. 89–809, §\u202f102(a)(1)(A) , substituted “interest on amounts described in subsection (c) received by a nonresident alien individual or a foreign corporation, if such interest is not effectively connected with the conduct of a trade or business within the United States” for “interest on deposits with persons carrying on the banking business paid to persons not engaged in business within the United States”.\nSubsec. (a)(1)(B).  Pub. L. 89–809, §\u202f102(a)(2) , struck out interest received from a resident foreign corporation, and substituted “gross income from all sources of such individual or such corporation” for “gross income of such resident payor or domestic corporation”, and “taxable year of such individual or such corporation” for “taxable year of such payor”.\nSubsec. (a)(1)(C) to (F).  Pub. L. 89–809, §\u202f102(a)(2) , added subpars. (C), (D), and (F), and redesignated former subpar. (C) as (E).\nSubsec. (a)(2)(B).  Pub. L. 89–809, §\u202f102(b) , substituted “50 percent of the gross income from all sources” for “50 percent of the gross income”, “effectively connected with the conduct of a trade or business within the United States” for “derived from sources within the United States as determined from the provisions of this part”, and “ratio to such dividends as the gross income of the corporation for such period which was effectively connected with the conduct of a trade or business within the United States bears to its gross income from all sources” for “ratio to such dividends as the gross income of the corporation for such period derived from sources within the United States bears to its gross income from all sources” and inserted “(other than dividends for which a deduction is allowable under section 245(b))” after “dividends” and “(and only to the extent)” after “extent”.\nSubsec. (a)(3)(C)(ii).  Pub. L. 89–809, §\u202f102(c) , inserted “an individual who is a citizen or resident of the United States, a domestic partnership, or” before “a domestic corporation” and “individual, partnership, or” after “United States by such”.\nSubsecs. (c), (d).  Pub. L. 89–809, §\u202f102(a)(1)(B) , (3), added subsecs. (c) and (d).\n1962—Subsec. (a)(2)(B).  Pub. L. 87–834  substituted “to the extent exceeding the amount which is 100/85ths of the amount of the deduction allowable under section 245 in respect of such dividends” for “to the extent exceeding the amount of the deduction allowable under section 245 in respect of such dividends.”\n1960—Subsec. (a)(2)(C).  Pub. L. 86–779  added subpar. (C).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13002(f) of Pub. L. 115–97 , set out as a note under  section 243 of this title .\nPub. L. 111–240, title II, §\u202f2122(d) ,  Sept. 27, 2010 ,  124 Stat. 2568 , provided that:  “The amendments made by this section [amending this section and sections 862 and 864 of this title] shall apply to guarantees issued after the date of the enactment of this Act [ Sept. 27, 2010 ].”\nPub. L. 111–226, title II, §\u202f217(d) ,  Aug. 10, 2010 ,  124 Stat. 2402 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 871, 904, and 2104 of this title] shall apply to taxable years beginning after  December 31, 2010 . \n \n “(2)   Grandfather rule for outstanding debt obligations.— “(A)   In general .— The amendments made by this section shall not apply to payments of interest on obligations issued before the date of the enactment of this Act [ Aug. 10, 2010 ]. \n \n “(B)   Exception for related party debt .— Subparagraph (A) shall not apply to any interest which is payable to a related person (determined under rules similar to the rules of section 954(d)(3)). \n \n “(C)   Significant modifications treated as new issues .— For purposes of subparagraph (A), a significant modification of the terms of any obligation (including any extension of the term of such obligation) shall be treated as a new issue.”\nPub. L. 108–357, title IV, §\u202f410(b) ,  Oct. 22, 2004 ,  118 Stat. 1500 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2003 .”\nPub. L. 107–16, title VI, §\u202f621(b) ,  June 7, 2001 ,  115 Stat. 111 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to remuneration for services performed in plan years beginning after  December 31, 2001 .”\nAmendment by  Pub. L. 105–34  applicable to remuneration for services performed in taxable years beginning after  Dec. 31, 1997 , see  section 1174(c) of Pub. L. 105–34 , set out as a note under  section 7701 of this title .\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  section 11813(b)(17) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  section 7811(i)(2) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to dividends received or accrued after  Dec. 31, 1987 , in taxable years ending after such date, see  section 10221(e)(1) of Pub. L. 100–203 , set out as a note under  section 243 of this title .\nAmendment by  section 104(b)(11) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1211(b)(1)(B) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nAmendment by  section 1212(d) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with special rules for certain leased property and for certain ships leased by United States Navy, see  section 1212(f) of Pub. L. 99–514 , set out as a note under  section 863 of this title .\nPub. L. 99–514, title XII, §\u202f1214(d) ,  Oct. 22, 1986 ,  100 Stat. 2543 , as amended by  Pub. L. 100–647, title I, §\u202f1012(g)(1)(A) , (2),  Nov. 10, 1988 ,  102 Stat. 3500 , 3501, provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 871, 881, 1441, and 6049 of this title] shall apply to payments made in a taxable year of the payor beginning after  December 31, 1986 . \n \n “(2)   Treatment of certain interest.— “(A)   In general .— The amendments made by this section shall not apply to any interest paid or accrued on any obligation outstanding on  December 31, 1985 . The preceding sentence shall not apply to any interest paid pursuant to any extension or renewal of such an obligation agreed to after  December 31, 1985 . \n \n “(B)   Special rule for related payee .— If the payee of any interest to which subparagraph (A) applies is related (within the meaning of section 904(d)(2)(H) of the Internal Revenue Code of 1986) to the payor, such interest shall be treated for purposes of section 904 of such Code as if the payor were a controlled foreign corporation (within the meaning of section 957(a) of such Code). \n \n \n “(3)   Transitional rule.— “(A)   Years before 1988 .— In applying the amendments made by this section to any payment made by a corporation in a taxable year of such corporation beginning before  January 1, 1988 , the requirements of clause (ii) of [former] section 861(c)(1)(B) of the Internal Revenue Code of 1986 (relating to active business requirements), as amended by this section, shall not apply to gross income of such corporation for taxable years beginning before  January 1, 1987 . \n \n “(B)   Years after 1987 .— In applying the amendments made by this section to any payment made by a corporation in a taxable year of such corporation beginning after  December 31, 1987 , the testing period for purposes of [former] section 861(c) of such Code (as so amended) shall not include any taxable year beginning before  January 1, 1987 . \n \n \n “(4)   Certain dividends.— “(A)   In general .— The amendments made by this section shall not apply to any dividend paid before  January 1, 1991 , by a qualified corporation with respect to stock which was outstanding on  May 31, 1985 . \n \n “(B)   Qualified corporation .— For purposes of subparagraph (A), the term ‘qualified corporation’ means any business systems corporation which— “(i)  was incorporated in Delaware in February, 1979, \n \n “(ii)  is headquartered in Garden City, New York, and \n \n “(iii)  the parent corporation of which is a resident of Sweden.”\n[ Pub. L. 100–647, title I, §\u202f1012(g)(1)(B) ,  Nov. 10, 1988 ,  102 Stat. 3500 , provided that:  “A taxpayer may elect not to have the amendment made by subparagraph (A) [amending  section 1214(d)(1) of Pub. L. 99–514 , set out above] apply and to have section 1214(d)(1) of the Reform Act [ section 1214(d)(1) of Pub. L. 99–514 , set out above] apply as in effect before such amendment. Such election shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe.” \n]\nAmendment by  section 1241(b) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1241(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 884 of this title .\nAmendment by  Pub. L. 98–21  applicable to benefits received after  Dec. 31, 1983 , in taxable years ending after such date, except for any portion of a lump-sum payment of social security benefits received after  Dec. 31, 1983 , if the generally applicable payment date for such portion was before  Jan. 1, 1984 , see  section 121(g) of Pub. L. 98–21 , set out as an Effective Date note under  section 86 of this title .\nPub. L. 96–605, title I, §\u202f104(b) ,  Dec. 28, 1980 ,  94 Stat. 3523 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property first leased after the date of the enactment of this Act [ Dec. 28, 1980 ].”\nAmendment by  Pub. L. 96–499  applicable to dispositions after  June 18, 1980 , see  section 1125(a) of Pub. L. 96–499 , set out as an Effective Date note under  section 897 of this title .\nPub. L. 95–600, title III, §\u202f370(b) ,  Nov. 6, 1978 ,  92 Stat. 2858 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to all railroad rolling stock placed in service with respect to the taxpayer after the date of the enactment of this Act [ Nov. 6, 1978 ]. \n \n “(2)   Election to extend section 861( f) [now 861(e)] to railroad rolling stock placed in service before date of enactment. “(A)   In general .— At the election of the taxpayer, the amendment made by subsection (a) shall also apply, for taxable years beginning after the date of the enactment of this Act, to all railroad rolling stock placed in service with respect to the taxpayer on or before such date of enactment. Such an election may not be revoked except with the consent of the Secretary of the Treasury or his delegate. \n \n “(B)   Manner and time of election and revocation .— An election under subparagraph (A), and any revocation of such an election, shall be made in such manner and at such time as the Secretary of the Treasury or his delegate may by regulations prescribe.”\nPub. L. 95–600, title V, §\u202f540(b) ,  Nov. 6, 1978 ,  92 Stat. 2887 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 6, 1978 ].”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title I, §\u202f1036(c) ,  Oct. 4, 1976 ,  90 Stat. 1633 , provided that:  “The amendments made by this section [amending this section and  section 862 of this title ] shall apply to taxable years beginning after  December 31, 1976 .”\nFor effective date of amendment by  section 1051(h)(3) of Pub. L. 94–455 , see  section 1051(i)(1) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by section 1901(b)(26)(A), (B), (c)(7) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1904(b)(10)(B) of Pub. L. 94–455  effective on first day of first month which begins more than 90 days after date of enactment of this Act [ Oct. 4, 1976 ], see  section 1904(d) of Pub. L. 94–455 , set out as a note under  section 4041 of this title .\nPub. L. 93–625, §\u202f9(c) ,  Jan. 3, 1975 ,  88 Stat. 2116 , provided that:  “The amendment made by subsection (a) [amending this section] applies to interest paid after the date of enactment of this Act [ Jan. 3, 1975 ], and the amendment made by subsection (b) [amending  section 2104 of this title ] applies with respect to estates of decedents dying after such date.”\nPub. L. 92–9, §\u202f3(a)(3) ,  Apr. 1, 1971 ,  85 Stat. 15 , provided that:  “The amendments made by this subsection [amending this section and  section 4912 of this title ] shall take effect on the date of the enactment of this Act [ Apr. 1, 1971 ].”\nPub. L. 92–178, title III, §\u202f314(c) ,  Dec. 10, 1971 ,  85 Stat. 528 , provided that:  “The amendments made by this section [amending this section and  section 862 of this title ] shall apply to taxable years ending after  August 15, 1971 , but only with respect to leases entered into after such date.”\nAmendment by  section 503 of Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before  Jan. 1, 1972 , see  section 507 of Pub. L. 92–178 , set out as an Effective Date note under  section 991 of this title .\nPub. L. 91–172, title IV, §\u202f435(a)(1) ,  Dec. 30, 1969 ,  83 Stat. 625 , provided that the amendment made by that section is effective with respect to amounts paid or credited after  Dec. 31, 1969 .\nPub. L. 89–809, title I, §\u202f102(e) ,  Nov. 13, 1966 ,  80 Stat. 1547 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendments made by subsections (a), (c), and (d) [amending this section and sections 864 and 895 of this title] shall apply with respect to taxable years beginning after  December 31, 1966 ; except that in applying section 864(c)(4)(B)(iii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (d)) with respect to a binding contract entered into on or before  February 24, 1966 , activities in the United States on or before such date in negotiating or carrying out such contract shall not be taken into account. \n \n “(2)  The amendments made by subsection (b) [amending this section] shall apply with respect to amounts received after  December 31, 1966 .”\nAmendment by  Pub. L. 87–834  applicable in respect of any distribution received by a domestic corporation after  Dec. 31, 1964 , and in respect of any distribution received by a domestic corporation before  Jan. 1, 1965 , in a taxable year of such corporation beginning after  Dec. 31, 1962 , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after  Dec. 31, 1962 , see  section 9(e) of Pub. L. 87–834 , set out as an Effective Date note under  section 78 of this title .\nAmendment by  Pub. L. 86–779  applicable to dividends received after  Dec. 31, 1959 , in taxable years ending after such date, see  section 3(c) of Pub. L. 86–779 , set out as a note under  section 243 of this title .\nPub. L. 92–9, §\u202f1(a) ,  Apr. 1, 1971 ,  85 Stat. 13 , provided that:  “This Act [amending this section and sections 4911, 4912, 4914 to 4916, 4919 to 4921, 6651, 6680, and 6681 of this title and enacting provisions set out as notes under this section and sections 6680 and 6681 of this title] may be cited as the ‘Interest Equalization Tax Extension Act of 1971’.”\nPub. L. 89–809, title I, §\u202f101 ,  Nov. 13, 1966 ,  80 Stat. 1541 , provided that:  “This title [enacting sections 877, 896, 906, 981, 2107, 2108, and 6683 of this title, amending this section and sections 1, 11, 116, 154, 245, 301, 512, 542, 543, 545, 819, 821, 822, 831, 832, 841, 842, 864, 871, 872, 873, 874, 875, 881, 882, 884, 894, 895, 901, 904, 911, 931, 932, 952, 953, 1248, 1249, 1441, 1442, 1461, 2014, 2101, 2102, 2104, 2105, 2106, 2501, 2511, 3401, 6015, 6016, 6018, 6501, 6513, and 7701 of this title, redesignating former section 877 as 878, repealing section 1493, and enacting provisions set out as notes under this section and sections 11, 871, 874, 894, 901, 904, 931, 2101, 2501, and 6501 of this title] may be cited as the ‘Foreign Investors Tax Act of 1966’.”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nSubsec. (a)(2)(B) of this section to be applied by substituting “100/80ths” for the fraction specified therein with regard to dividends received or accrued during 1987, see  section 1006(b)(1)(B) of Pub. L. 100–647  set out as a note under  section 245 of this title .\nPub. L. 100–647, title I, §\u202f1012(aa)(2) –(4),  Nov. 10, 1988 ,  102 Stat. 3531 , 3532, provided that: \n “(2)   Certain amendments to apply notwithstanding treaties .— The following amendments made by the Reform Act [ Pub. L. 99–514 ] shall apply notwithstanding any treaty obligation of the United States in effect on the date of the enactment of the Reform Act [ Oct. 22, 1986 ]: “(A)  The amendments made by section 1201 of the Reform Act [amending sections 864, 904, and 954 of this title]. \n \n “(B)  The amendments made by title VII of the Reform Act [enacting sections 53 and 55 to 59 of this title and amending sections 5, 12, 26, 28, 29, 38, 48, 173, 174, 263, 381, 443, 703, 882, 897, 904, 936, 1016, 1363, 1366, 1561, 6154, 6425, and 6655 of this title] to the extent such amendments relate to the alternative minimum tax foreign tax credit. \n \n \n “(3)   Certain amendments not to apply to the extent inconsistent with treaties .— The following amendments made by the Reform Act [ Pub. L. 99–514 ] shall not apply to the extent the application of such amendments would be contrary to any treaty obligation of the United States in effect on the date of the enactment of the Reform Act [ Oct. 22, 1986 ]: “(A)  The amendments made by section 1211 of the Reform Act [enacting  section 865 of this title  and amending this section and sections 862 to 864, 871, 881, and 904 of this title] to the extent— “(i)  such amendments apply in the case of an individual treated as a resident of a foreign country under a treaty obligation of the United States as so in effect, or \n \n “(ii)  such amendments relate to income of a nonresident from the sale or exchange of inventory property which would otherwise be sourced under section 865(e)(2) of the 1986 Code. \n \n \n “(B)  The amendments made by section 1212(a) of the Reform Act [amending  section 863 of this title ]; except for purposes of determining the amount of the foreign tax credit. \n \n “(C)  The amendments made by subsections (b) and (c) of section 1212 of the Reform Act [enacting  section 887 of this title  and amending sections 872 and 883 of this title]. \n \n “(D)  The amendments made by section 1214 of the Reform Act [amending this section and sections 871, 881, 1441, and 6049 of this title]; except for purposes of determining the amount of the foreign tax credit. \n \n “(E)  The amendment made by section 1241(a) of the Reform Act [enacting  section 884 of this title  and renumbering former section 884 as 885] to the extent that, under a treaty obligation of the United States, interest described in section 884(f)(1)(A) of the 1986 Code (as added by such amendment) which is in excess of amounts deducted would be treated as other than United States source. \n \n “(F)  The amendment made by section 1241(b)(2)(A) of the Reform Act [amending this section]. \n \n “(G)  The amendment made by section 1241(a) of the Reform Act [enacting  section 884 of this title  and renumbering former section 884 as 885] to the extent such amendment relates to section 884(f)(1)(B) of the 1986 Code. \n \n “(H)  The amendments made by section 1242 of the Reform Act [amending  section 864 of this title ] to the extent they relate to paragraph (7) of section 864(c) of the 1986 Code. \n \n “(I)  The amendment made by section 1247(a) of the Reform Act [amending  section 892 of this title ]. \n \n “(J)  The amendments made by section 123 of the Reform Act [amending sections 74, 117, 1441, and 7871 of this title]. \n \n \n “(4)   Treatment of technical corrections .— For purposes of paragraphs (2) and (3), any amendment made by this title [see Tables for classification] shall be treated as if it had been included in the provision of the Reform Act [ Pub. L. 99–514 ] to which such amendment relates.”\nPub. L. 100–647, title IV, §\u202f4009 ,  Nov. 10, 1988 ,  102 Stat. 3653 , provided that: \n “(a)   General Rule .— For purposes of sections 861(b), 862(b), and 863(b) of the 1986 Code, qualified research and experimental expenditures shall be allocated and apportioned as follows: “(1)  Any qualified research and experimental expenditures expended solely to meet legal requirements imposed by a political entity with respect to the improvement or marketing of specific products or processes for purposes not reasonably expected to generate gross income (beyond de minimis amounts) outside the jurisdiction of the political entity shall be allocated only to gross income from sources within such jurisdiction. \n \n “(2)  In the case of any qualified research and experimental expenditures (not allocated under paragraph (1)) to the extent— “(A)  that such expenditures are attributable to activities conducted in the United States, 64 percent of such expenditures shall be allocated and apportioned to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States, and \n \n “(B)  that such expenditures are attributable to activities conducted outside the United States, 64 percent of such expenditures shall be allocated and apportioned to income from sources outside the United States and deducted from such income in determining the amount of taxable income from sources outside the United States. \n \n \n “(3)  The remaining portion of qualified research and experimental expenditures (not allocated under paragraphs (1) and (2)) shall be apportioned, at the annual election of the taxpayer, on the basis of gross sales or gross income, except that, if the taxpayer elects to apportion on the basis of gross income, the amount apportioned to income from sources outside the United States shall be at least 30 percent of the amount which would be so apportioned on the basis of gross sales. \n \n \n “(b)   Qualified Research and Experimental Expenditures .— For purposes of this section, the term ‘qualified research and experimental expenditures’ means amounts which are research and experimental expenditures within the meaning of section 174 of the 1986 Code. For purposes of this subsection, rules similar to the rules of [former] subsection (c) of section 174 of the 1986 Code shall apply. \n \n “(c)   Special Rules for Expenditures Attributable to Activities Conducted in Space, Etc.— “(1)   In general .— Any qualified research and experimental expenditures described in paragraph (2)— “(A)  if incurred by a United States person, shall be allocated and apportioned under this section in the same manner as if they were attributable to activities conducted in the United States, and \n \n “(B)  if incurred by a person other than a United States person, shall be allocated and apportioned under this section in the same manner as if they were attributable to activities conducted outside the United States. \n \n \n “(2)   Description of expenditures .— For purposes of paragraph (1), qualified research and experimental expenditures are described in this paragraph if such expenditures are attributable to activities conducted— “(A)  in space, \n \n “(B)  on or under water not within the jurisdiction (as recognized by the United States) of a foreign country, possession of the United States, or the United States, or \n \n “(C)  in Antarctica. \n \n \n \n “(d)   Affiliated Group.— “(1)  Except as provided in paragraph (2), the allocation and apportionment required by subsection (a) shall be determined as if all members of the affiliated group (as defined in subsection (e)(5) of section 864 of the 1986 Code) were a single corporation. \n \n “(2)  For purposes of the allocation and apportionment required by subsection (a)— “(A)  sales and gross income from products produced in whole or in part in a possession by an electing corporation (within the meaning of [former] section 936(h)(5)(E) of the 1986 Code); and \n \n “(B)  dividends from an electing corporation, \n \n\n shall not be taken into account, except that this paragraph shall not apply to sales of (and gross income and dividends attributable to sales of) products with respect to which an election under [former] section 936(h)(5)(F) of the 1986 Code is not in effect. \n \n “(3)  The qualified research and experimental expenditures taken into account for purposes of subsection (a) shall be adjusted to reflect the amount of such expenditures included in computing the cost-sharing amount (determined under [former] section 936(h)(5)(C)(i)(I) of the 1986 Code). \n \n “(4)  The Secretary of the Treasury or his delegate may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations providing for the source of gross income and the allocation and apportionment of deductions to take into account the adjustments required by paragraph (3). \n \n “(5)  Paragraph (6) of section 864(e) of the 1986 Code shall not apply to qualified research and experimental expenditures. \n \n \n “(e)   Years to Which Section Applies.— “(1)   In general .— Except as provided in this subsection, this section shall apply to the taxpayer’s 1st taxable year beginning after  August 1, 1987 . \n \n “(2)   Reduction in amounts to which section applies .— Notwithstanding paragraph (1), this section shall only apply to that portion of the qualified research and experimental expenditures for the taxable year referred to in paragraph (1) which bears the same ratio to the total amount of such expenditures as— “(A)  the lesser of 4 months or the number of months in the taxable year, bears to \n \n “(B)  the number of months in the taxable year.”\nPub. L. 99–514, title XII, §\u202f1216 ,  Oct. 22, 1986 ,  100 Stat. 2549 , provided that: \n “(a)   General Rule .— For purposes of section 861(b), section 862(b), and section 863(b) of the Internal Revenue Code of 1954 [now 1986], notwithstanding section 864(e) of such Code— “(1)  50 percent of all amounts allowable as a deduction for qualified research and experimental expenditures shall be apportioned to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States, and \n \n “(2)  the remaining portion of such amounts shall be apportioned on the basis of gross sales or gross income. \n \n\n The preceding sentence shall not apply to any expenditures described in section 1.861–8(e)(3)(i)(B) of the Income Tax Regulations. \n \n “(b)   Qualified Research and Experimental Expenditures .— For purposes of this section— “(1)   In general .— The term ‘qualified research and experimental expenditures’ means amounts— “(A)  which are research and experimental expenditures within the meaning of section 174 of such Code, and \n \n “(B)  which are attributable to activities conducted in the United States. \n \n \n “(2)   Treatment of depreciation, etc .— Rules similar to the rules of [former] section 174(c) of such Code shall apply. \n \n \n “(c)   Effective Date .— This section shall apply to taxable years beginning after  August 1, 1986 , and on or before  August 1, 1987 .”\nPub. L. 98–369, div. A, title I, §\u202f126 ,  July 18, 1984 ,  98 Stat. 648 , as amended by  Pub. L. 99–272, title XIII, §\u202f13211 ,  Apr. 7, 1986 ,  100 Stat. 324 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— For purposes of section 861(b), section 862(b), and section 863(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], all amounts allowable as a deduction for qualified research and experimental expenditures shall be allocated to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States. \n \n “(b)   Qualified Research and Experimental Expenditures .— For purposes of this section— “(1)   In general .— The term ‘qualified research and experimental expenditures’ means amounts— “(A)  which are research and experimental expenditures within the meaning of section 174 of such Code, and \n \n “(B)  which are attributable to activities conducted in the United States. \n \n \n “(2)   Treatment of depreciation, etc .— Rules similar to the rules of [former] subsection (c) of section 174 of such Code shall apply. \n \n \n “(c)   Effective Dates.— “(1)   In general .— This section shall apply to taxable years beginning after  August 13, 1983 , and on or before  August 1, 1986 . \n \n “(2)   Special rule .— If the taxpayer’s 4th taxable year beginning after  August 13, 1981 , is not described in paragraph (1), this section shall apply also to such 4th taxable year.”\nPub. L. 89–809, title I, §\u202f110 ,  Nov. 13, 1966 ,  80 Stat. 1575 , provided that:  “No amendment made by this title [see Short Title note above] shall apply in any case where its application would be contrary to any treaty obligation of the United States. For purposes of the preceding sentence, the extension of a benefit provided by any amendment made by this title shall not be deemed to be contrary to a treaty obligation of the United States.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN INCOME'},
  'content': 'From the items of gross income specified in subsection (a) there shall be deducted the expenses, losses, and other deductions properly apportioned or allocated thereto, and a ratable part of any expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income. The remainder, if any, shall be treated in full as taxable income from sources without the United States. In the case of an individual who does not itemize deductions, an amount equal to the standard deduction shall be considered a deduction which cannot definitely be allocated to some item or class of gross income.\n2010—Subsec. (a)(9).  Pub. L. 111–240  added par. (9).\n1989—Subsec. (a)(6).  Pub. L. 101–239  substituted “865(i)(1)” for “865(h)(1)”.\n1988—Subsec. (c).  Pub. L. 100–647  repealed subsec. (c) which read as follows:\n“(c)  Cross reference .—For source of amounts attributable to certain aircraft and vessels, see section 861(e).”\n1986—Subsec. (a)(6).  Pub. L. 99–514, §\u202f1211(b)(1)(C) , substituted “inventory property (within the meaning of section 865(h)(1))” for “personal property”.\nSubsec. (b).  Pub. L. 99–514, §\u202f104(b)(12) , substituted “the standard deduction” for “the zero bracket amount”.\n1981—Subsec. (a)(8).  Pub. L. 97–34  added par. (8).\n1977—Subsec. (b).  Pub. L. 95–30  provided that, in the case of an individual who does not itemize deductions, an amount equal to the zero bracket amount shall be considered a deduction which cannot definitely be allocated to some item or class of gross income.\n1976—Subsec. (a)(5), (6).  Pub. L. 94–455, §\u202f1901(b)(26)(C) , inserted “or exchange” after “sale”.\nSubsec. (a)(7).  Pub. L. 94–455, §\u202f1036(b) , added par. (7).\n1971—Subsec. (c).  Pub. L. 92–178  added subsec. (c).\nAmendment by  Pub. L. 111–240  applicable to guarantees issued after  Sept. 27, 2010 , see  section 2122(d) of Pub. L. 111–240 , set out as a note under  section 861 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 104(b)(12) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1211(b)(1)(C) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nAmendment by  Pub. L. 97–34  applicable to dispositions after  June 18, 1980 , in taxable years ending after such date, see  section 831(i) of Pub. L. 97–34 , set out as a note under  section 897 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  section 1036(b) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 1036(c) of Pub. L. 94–455 , set out as a note under  section 861 of this title .\nAmendment by  section 1901(b)(26)(C) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 92–178  applicable to taxable years ending after  Aug. 15, 1971 , but only with respect to leases entered into after such date, see  section 314(c) of Pub. L. 92–178 , set out as a note under  section 861 of this title .\nFor nonapplication of amendment by  section 1211(b)(1)(C) of Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor allocation and apportionment of qualified research and experimental expenditures for purposes of sections 861 to 863 of this title, see  section 4009 of Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor rule governing allocation under subsec. (b) of this section of amounts allowable as a deduction for qualified research and experimental expenditures during taxable years beginning after  Aug. 1, 1986 , and on or before  Aug. 1, 1987 , see  section 1216 of Pub. L. 99–514 , set out as a note under  section 861 of this title .\nFor purposes of subsec. (b) of this section, all amounts allowable as a deduction for qualified research and experimental expenditures are to be allocated to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States for taxable years beginning after  Aug. 13, 1983 , and on or before  Aug. 1, 1986 , see  section 126 of Pub. L. 98–369 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN INCOME'},
  'content': 'Items of gross income, expenses, losses, and deductions, other than those specified in sections 861(a) and 862(a), shall be allocated or apportioned to sources within or without the United States, under regulations prescribed by the Secretary. Where items of gross income are separately allocated to sources within the United States, there shall be deducted (for the purpose of computing the taxable income therefrom) the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of other expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income. The remainder, if any, shall be included in full as taxable income from sources within the United States.\nAll transportation income attributable to transportation which begins and ends in the United States shall be treated as derived from sources within the United States.\nIn the case of any United States person, 50 percent of any international communications income shall be sourced in the United States and 50 percent of such income shall be sourced outside the United States.\nExcept as provided in regulations or clause (ii), in the case of any person other than a United States person, any international communications income shall be sourced outside the United States.\nIn the case of any person (other than a United States person) who maintains an office or other fixed place of business in the United States, any international communications income attributable to such office or other fixed place of business shall be sourced in the United States.\nFor purposes of this section, the term “international communications income” includes all income derived from the transmission of communications or data from the United States to any foreign country (or possession of the United States) or from any foreign country (or possession of the United States) to the United States.\n2017—Subsec. (b).  Pub. L. 115–97  inserted at end of concluding provisions “Gains, profits, and income from the sale or exchange of inventory property described in paragraph (2) shall be allocated and apportioned between sources within and without the United States solely on the basis of the production activities with respect to the property.”\n1997—Subsec. (c)(2)(B).  Pub. L. 105–34  inserted concluding provisions “In the case of transportation income derived from, or in connection with, a vessel, this subparagraph shall only apply if the taxpayer is a citizen or resident alien.”\n1989—Subsec. (b)(2), (3).  Pub. L. 101–239  substituted “865(i)(1)” for “865(h)(1)”.\n1988— Pub. L. 100–647, §\u202f1012(e)(3)(A) , substituted “Special rules for determining source” for “Item not specified in section 861 or 862” in section catchline.\nSubsec. (e)(2).  Pub. L. 100–647, §\u202f1012(f) , substituted “foreign country (or possession of the United States)” for “foreign country” in two places.\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1212(e) , substituted “services” for “transportation or other services”.\nSubsec. (b)(2), (3).  Pub. L. 99–514, §\u202f1211(b)(1)(A) , substituted “inventory property (within the meaning of section 865(h)(1))” for “personal property”.\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f1212(a) , amended par. (2) generally, in subpar. (A) substituting provisions relating to other transportation having United States connections for provisions relating to transportation between United States and any possession, and in subpar. (B) substituting provisions relating to special rule for personal service income for provisions relating to special rule for certain lessors of aircraft.\nSubsecs. (d), (e).  Pub. L. 99–514, §\u202f1213(a) , added subsecs. (d) and (e).\n1984—Subsec. (c).  Pub. L. 98–369  added subsec. (c).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b).  Pub. L. 94–455 , §§\u202f1901(b)(26)(C), (D), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in introductory provisions, and inserted “or exchange” after “sale” in pars. (2) and (3), and “or exchanged” after “sold” in par. (2) wherever appearing.\nPub. L. 115–97, title I, §\u202f14303(b) ,  Dec. 22, 2017 ,  131 Stat. 2225 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 105–34  applicable to remuneration for services performed in taxable years beginning after  Dec. 31, 1997 , see  section 1174(c) of Pub. L. 105–34 , set out as a note under  section 7701 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1211(b)(1)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nPub. L. 99–514, title XII, §\u202f1212(f) ,  Oct. 22, 1986 ,  100 Stat. 2539 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting  section 887 of this title  and amending this section and sections 861, 872, and 883 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special rule for certain leased property .— The amendments made by subsections (a) and (d) [amending this section and  section 861 of this title ] shall not apply to any income attributable to property held by the taxpayer on  January 1, 1986 , if such property was first leased by the taxpayer before  January 1, 1986 , in a lease to which section 863(c)(2)(B) or 861(e) of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) applied. \n \n “(3)   Special rule for certain ships leased by the united states navy.— “(A)   In general .— In the case of any property described in subparagraph (B), paragraph (2) shall be applied by substituting ‘1987’ for ‘1986’ each place it appears. \n \n “(B)   Property to which paragraph applies .— Property described in this subparagraph consists of 4 ships which are to be leased by the United States Navy and which are the subject of Internal Revenue Service rulings bearing the following dates and which involved the following amount of financing, respectively: \n \n \n \n \n \n \n \n \n \n \n “ March 5, 1986 $176,844,000\u2000\u2000 \n \u2000\u202f February 5, 1986 64,567,000\u2000\u2000 \n \u2000\u202f April 22, 1986 64,598,000\u2000\u2000 \n \u2000\u202f May 22, 1986 175,300,000.”\nPub. L. 99–514, title XII, §\u202f1213(b) ,  Oct. 22, 1986 ,  100 Stat. 2541 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 98–369, div. A, title I, §\u202f124(b) ,  July 18, 1984 ,  98 Stat. 647 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to transportation beginning after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nAmendment by section 1901(b)(26)(C), (D) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nFor nonapplication of amendments by sections 1211(b)(1)(A) and 1212(a) of  Pub. L. 99–514  to the extent application of such amendments would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor allocation and apportionment of qualified research and experimental expenditures for purposes of sections 861 to 863 of this title, see  section 4009 of Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor rule governing allocation under subsec. (b) of this section of amounts allowable as a deduction for qualified research and experimental expenditures during taxable years beginning after  Aug. 1, 1986 , and on or before  Aug. 1, 1987 , see  section 1216 of Pub. L. 99–514 , set out as a note under  section 861 of this title .\nFor purposes of subsec. (b) of this section, all amounts allowable as a deduction for qualified research and experimental expenditures are to be allocated to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States for taxable years beginning after  Aug. 13, 1983 , and on or before  Aug. 1, 1986 , see  section 126 of Pub. L. 98–369 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN INCOME'},
  'content': 'For purposes of this part, the term “produced” includes created, fabricated, manufactured, extracted, processed, cured, or aged.\nTrading in stocks or securities through a resident broker, commission agent, custodian, or other independent agent.\nTrading in stocks or securities for the taxpayer’s own account, whether by the taxpayer or his employees or through a resident broker, commission agent, custodian, or other agent, and whether or not any such employee or agent has discretionary authority to make decisions in effecting the transactions. This clause shall not apply in the case of a dealer in stocks or securities.\nTrading in commodities through a resident broker, commission agent, custodian, or other independent agent.\nTrading in commodities for the taxpayer’s own account, whether by the taxpayer or his employees or through a resident broker, commission agent, custodian, or other agent, and whether or not any such employee or agent has discretionary authority to make decisions in effecting the transactions. This clause shall not apply in the case of a dealer in commodities.\nClauses (i) and (ii) shall apply only if the commodities are of a kind customarily dealt in on an organized commodity exchange and if the transaction is of a kind customarily consummated at such place.\nSubparagraphs (A)(i) and (B)(i) shall apply only if, at no time during the taxable year, the taxpayer has an office or other fixed place of business in the United States through which or by the direction of which the transactions in stocks or securities, or in commodities, as the case may be, are effected.\nAll income, gain, or loss from sources within the United States (other than income, gain, or loss to which paragraph (2) applies) shall be treated as effectively connected with the conduct of a trade or business within the United States.\nNotwithstanding any other provision of this subtitle, if a nonresident alien individual or foreign corporation owns, directly or indirectly, an interest in a partnership which is engaged in any trade or business within the United States, gain or loss on the sale or exchange of all (or any portion of) such interest shall be treated as effectively connected with the conduct of such trade or business to the extent such gain or loss does not exceed the amount determined under subparagraph (B).\nIf a partnership described in subparagraph (A) holds any United States real property interest (as defined in section 897(c)) at the time of the sale or exchange of the partnership interest, then the gain or loss treated as effectively connected income under subparagraph (A) shall be reduced by the amount so treated with respect to such United States real property interest under section 897.\nFor purposes of this paragraph, the term “sale or exchange” means any sale, exchange, or other disposition.\nThe Secretary shall prescribe such regulations or other guidance as the Secretary determines appropriate for the application of this paragraph, including with respect to exchanges described in section 332, 351, 354, 355, 356, or 361.\nFor purposes of the provisions set forth in paragraph (2), if any person acquires (directly or indirectly) a trade or service receivable from a related person, any income of such person from the trade or service receivable so acquired shall be treated as if it were interest on a loan to the obligor under the receivable.\nThe Secretary shall prescribe such regulations as may be necessary to prevent the avoidance of the provisions of this subsection or section 956(c)(3).\nThe taxable income of each member of an affiliated group shall be determined by allocating and apportioning interest expense of each member as if all members of such group were a single corporation.\nAll allocations and apportionments of interest expense shall be determined using the adjusted bases of assets rather than on the basis of the fair market value of the assets or gross income.\nFor purposes of allocating and apportioning any deductible expense, any tax-exempt asset (and any income from such an asset) shall not be taken into account. A similar rule shall apply in the case of the portion of any dividend (other than a qualifying dividend as defined in section 243(b)) equal to the deduction allowable under section 243 or 245(a) with respect to such dividend and in the case of a like portion of any stock the dividends on which would be so deductible and would not be qualifying dividends (as so defined).\nIf, by reason of holding stock in a nonaffiliated 10-percent owned corporation, the taxpayer is treated under clause (iii) as owning stock in another corporation with respect to which the stock ownership requirements of clause (ii) are met, the adjustment under subparagraph (A) shall include an adjustment for the amount of the earnings and profits (or deficit therein) of such other corporation which are attributable to the stock the taxpayer is so treated as owning and to the period during which the taxpayer is treated as owning such stock.\nThe stock ownership requirements of this clause are met with respect to any corporation if members of the taxpayer’s affiliated group own (directly or through the application of clause (iii)) 10 percent or more of the total combined voting power of all classes of stock of such corporation entitled to vote.\nFor purposes of this subparagraph, stock owned (directly or indirectly) by a corporation, partnership, or trust shall be treated as being owned proportionately by its shareholders, partners, or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence, shall, for purposes of applying such sentence, be treated as actually owned by such person.\nFor purposes of this paragraph, proper adjustment shall be made to the earnings and profits of any corporation to take into account any earnings and profits included in gross income under section 951 or under any other provision of this title and reflected in the adjusted basis of the stock.\nFor purposes of subparagraph (A), any corporation described in subparagraph (C) shall be treated as an includible corporation for purposes of section 1504 only for purposes of applying such section separately to corporations so described. This subparagraph shall not apply for purposes of paragraph (6).\nExpenses other than interest which are not directly allocable or apportioned to any specific income producing activity shall be allocated and apportioned as if all members of the affiliated group were a single corporation.\nFor purposes of this section, the term “qualified research and experimental expenditures” means amounts which are research and experimental expenditures within the meaning of section 174. For purposes of this paragraph, rules similar to the rules of subsection (c)\u202f 2 2 \u202fSee References in Text note below.  of section 174 shall apply. Any qualified research and experimental expenditures treated as deferred expenses under subsection (b)\u202f 2  of section 174 shall be taken into account under this subsection for the taxable year for which such expenditures are allowed as a deduction under such subsection.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this subsection, including regulations relating to the determination of whether any expenses are attributable to activities conducted in the United States or outside the United States and regulations providing such adjustments to the provisions of this subsection as may be appropriate in the case of cost-sharing arrangements and contract research.\nThis subsection shall apply to the taxpayer’s first taxable year (beginning on or before  August 1, 1994 ) following the taxpayer’s last taxable year to which Revenue Procedure 92–56 applies or would apply if the taxpayer elected the benefits of such Revenue Procedure.\nSection 2(a) of the Bank Holding Company Act of 1956, referred to in subsec. (e)(5)(D)(i), is classified to  section 1841(a) of Title 12 , Banks and Banking.\nSection 174, referred to in subsec. (g)(2), was amended generally by  Pub. L. 115–97, title I, §\u202f13206(a) ,  Dec. 22, 2017 ,  131 Stat. 2111 . Provisions similar to those contained in former subsec. (c) of section 174 are now contained in subsec. (c)(1) of section 174. For provisions similar to those contained in former subsec. (b) of section 174 relating to amortization of certain research and experimental expenditures, see subsecs. (a) and (b) of section 174.\nSection 936, referred to in subsec. (g)(4)(B), (C), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(1)(C) ,  Mar. 23, 2018 ,  132 Stat. 1206 .\n2021—Subsec. (f).  Pub. L. 117–2  struck out subsec. (f) which related to election to allocate interest and other expenses on worldwide basis.\n2018—Subsec. (d)(5).  Pub. L. 115–141, §\u202f401(d)(1)(D)(x) , amended par. (5) generally. Prior to amendment, par. (5) related to certain provisions that did not apply to any amount treated as interest under par. (1) or (6).\nSubsec. (d)(8).  Pub. L. 115–141, §\u202f401(a)(152) , substituted “section 956(c)(3)” for “section 956(b)(3)”.\nSubsec. (e)(5)(A).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xvii)(IV) , struck out “(determined without regard to paragraph (4) of section 1504(b))” after “section 1504” in introductory provisions.\nSubsec. (f)(1)(C)(i).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xvii)(V) , substituted “paragraph (2)” for “paragraphs (2) and (4)”.\nSubsec. (f)(2).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xvii)(V) , which directed amendment of par. (2) by substituting “paragraph (2)” for “paragraphs (2) and (4)”, was executed by making the substitution for “paragraph (4)”, to reflect the probable intent of Congress.\n2017—Subsec. (c)(1)(A).  Pub. L. 115–97, §\u202f13501(a)(2)(A) , substituted “(7), and (8)” for “and (7)”.\nSubsec. (c)(1)(B).  Pub. L. 115–97, §\u202f13501(a)(2)(B) , substituted “(7), or (8)” for “or (7)”.\nSubsec. (c)(8).  Pub. L. 115–97, §\u202f13501(a)(1) , added par. (8).\nSubsec. (e)(2).  Pub. L. 115–97, §\u202f14502(a) , amended par. (2) generally. Prior to amendment, text read as follows: “All allocations and apportionments of interest expense shall be made on the basis of assets rather than gross income.”\n2010—Subsec. (c)(4)(B)(ii).  Pub. L. 111–240  substituted “dividends, interest, or amounts received for the provision of guarantees of indebtedness” for “dividends or interest”.\nSubsec. (e)(5)(A).  Pub. L. 111–226  inserted at end “Notwithstanding the preceding sentence, a foreign corporation shall be treated as a member of the affiliated group if—” and added cls. (i) and (ii).\nSubsec. (f)(5)(D), (6).  Pub. L. 111–147  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2009—Subsec. (f)(5)(D), (6).  Pub. L. 111–92, §\u202f15(a) , substituted “ December 31, 2017 ” for “ December 31, 2010 ”.\nSubsec. (f)(7).  Pub. L. 111–92, §\u202f15(b) , struck out par. (7). Text read as follows: “In the case of the first taxable year to which this subsection applies, the increase (if any) in the amount of the interest expense allocable to sources within the United States by reason of the application of this subsection shall be 30 percent of the amount of such increase determined without regard to this paragraph.”\n2008—Subsec. (f)(5)(D), (6).  Pub. L. 110–289, §\u202f3093(a) , substituted “ December 31, 2010 ” for “ December 31, 2008 ”.\nSubsec. (f)(7).  Pub. L. 110–289, §\u202f3093(b) , added par. (7).\n2004—Subsec. (c)(4)(B).  Pub. L. 108–357, §\u202f894(a) , added concluding provisions.\nSubsec. (d)(2).  Pub. L. 108–357, §\u202f413(c)(12) , redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which read as follows: “Part III of subchapter G of this chapter (relating to foreign personal holding companies).”\nSubsec. (d)(5)(A)(i).  Pub. L. 108–357, §\u202f403(b)(6) , substituted “(C)(iii)(II)” for “(C)(iii)(III)”.\nSubsec. (e)(3).  Pub. L. 108–357, §\u202f101(b)(6) , struck out “(A) In general” before “For purposes” and struck out heading and text of subpar. (B). Text read as follows: “For purposes of allocating and apportioning any interest expense, there shall not be taken into account any qualifying foreign trade property (as defined in section 943(a)) which is held by the taxpayer for lease or rental in the ordinary course of trade or business for use by the lessee outside the United States (as defined in section 943(b)(2)).”\nSubsec. (e)(7)(B).  Pub. L. 108–357, §\u202f401(b)(1) , inserted “and in other circumstances where such allocation would be appropriate to carry out the purposes of this subsection” before comma at end.\nSubsec. (e)(7)(F), (G).  Pub. L. 108–357, §\u202f401(b)(2) , added subpar. (F) and redesignated former subpar. (F) as (G).\nSubsecs. (f), (g).  Pub. L. 108–357, §\u202f401(a) , added subsec. (f) and redesignated former subsec. (f) as (g).\n2000—Subsec. (e)(3).  Pub. L. 106–519  designated existing provisions as subpar. (A), inserted heading, and added subpar. (B).\n1999—Subsecs. (c)(4)(B)(iii), (d)(3)(A), (6)(A).  Pub. L. 106–170  substituted “section 1221(a)(1)” for “section 1221(1)”.\n1997—Subsec. (b)(2)(A)(ii).  Pub. L. 105–34  struck out “,\u2000or in the case of a corporation (other than a corporation which is, or but for section 542(c)(7), 542(c)(10), or 543(b)(1)(C) would be, a personal holding company) the principal business of which is trading in stocks or securities for its own account, if its principal office is in the United States” after “dealer in stocks or securities”.\n1993—Subsec. (f)(1)(B).  Pub. L. 103–66, §\u202f13234(a) , substituted “50 percent” for “64 percent” in cls. (i) and (ii).\nSubsec. (f)(4)(D).  Pub. L. 103–66, §\u202f13234(b)(2) , substituted “subparagraph (B) or (C)” for “subparagraph (C)”.\nSubsec. (f)(5), (6).  Pub. L. 103–66, §\u202f13234(b)(1) , added pars. (5) and (6) and struck out heading and text of former par. (5). Text read as follows:\n“(A)  In general .—This subsection shall apply to the taxpayer’s first 3 taxable years beginning after  August 1, 1989 , and on or before  August 1, 1992 .\n“(B)  Reduction .—Notwithstanding subparagraph (A), in the case of the taxpayer’s first taxable year beginning after  August 1, 1991 , this subsection shall only apply to qualified research and experimental expenditures incurred during the first 6 months of such taxable year.”\n1991—Subsec. (f)(5).  Pub. L. 102–227  amended par. (5) generally. Prior to amendment, par. (5) read as follows: “This subsection shall apply to the taxpayer’s first 2 taxable years beginning after  August 1, 1989 , and on or before  August 1, 1991 .”\n1990—Subsec. (f)(5).  Pub. L. 101–508  substituted “Years” for “Year” in heading and amended text generally. Prior to amendment, text read as follows:\n“(A)  In general .—Except as provided in this paragraph, this subsection shall apply to the taxpayer’s first taxable year beginning after  August 1, 1989 , and before  August 2, 1990 .\n“(B)  Reduction .—Notwithstanding subparagraph (A), this subsection shall only apply to that portion of the qualified research and experimental expenditures for the taxable year referred to in subparagraph (A) which bears the same ratio to the total amount of such expenditures as—\n“(i) the lesser of 9 months or the number of months in the taxable year, bears to\n“(ii) the number of months in the taxable year.”\n1989—Subsec. (f).  Pub. L. 101–239  added subsec. (f).\n1988—Subsec. (b)(2)(A)(ii).  Pub. L. 100–647, §\u202f1012(p)(30) , substituted “section 542(c)(7), 542(c)(10),” for “section 542(c)(7)”.\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f1012(g)(5) , struck out at end “In applying this paragraph and paragraph (4), interest referred to in section 861(a)(1)(A) shall be considered income from sources within the United States.”\nSubsec. (c)(4)(B)(i), (ii).  Pub. L. 100–647, §\u202f1012(d)(10) , struck out “(including any gain or loss realized on the sale or exchange of such property)” after “section 862(a)(4)” in cl. (i) and “,\u2000or gain or loss from the sale or exchange of stock or notes, bonds, or other evidences of indebtedness” after “dividends or interest” in cl. (ii).\nSubsec. (c)(4)(B)(iii).  Pub. L. 100–647, §\u202f1012(d)(7) , added cl. (iii).\nSubsec. (c)(6).  Pub. L. 100–647, §\u202f1012(r)(2) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “For purposes of this title, any income or gain of a nonresident alien individual or a foreign corporation for any taxable year which is attributable to a sale or exchange of property or the performance of services (or any other transaction) in any other taxable year shall be treated as effectively connected with the conduct of a trade or business within the United States if it would have been so treated if such income or gain were taken into account in such other taxable year.”\nSubsec. (c)(7).  Pub. L. 100–647, §\u202f1012(r)(1) , amended par. (7) generally. Prior to amendment, par. (7) read as follows: “For purposes of this title, if any property ceases to be used or held for use in connection with the conduct of a trade or business within the United States, the determination of whether any income or gain attributable to a sale or exchange of such property occurring within 10 years after such cessation is effectively connected with the conduct of a trade or business within the United States shall be made as if such sale or exchange occurred immediately before such cessation.”\nSubsec. (d)(5)(A)(i).  Pub. L. 100–647, §\u202f1012(a)(1)(B) , substituted “(C)(iii)(III)” for “(C)(iii)”.\nSubsec. (e).  Pub. L. 100–647, §\u202f1012(h)(6)(B) , struck out “(except as provided in regulations)” after “subchapter”.\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f1012(h)(2)(A) , struck out “from sources outside the United States” after “affiliated group”.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1012(h)(3) , inserted sentence at end and struck out former last sentence which read as follows: “A similar rule shall apply in the case of any dividend (other than a qualifying dividend as defined in section 243(b)) for which a deduction is allowable under section 243 or 245(a) and any stock the dividends on which would be so deductible and would not be qualifying dividends (as so defined).”\nSubsec. (e)(4).  Pub. L. 100–647, §\u202f1012(h)(1) , substituted “nonaffiliated 10-percent owned corporations” for “certain corporations” in heading and amended text generally. Prior to amendment, text read as follows: “For purposes of allocating and apportioning expenses on the basis of assets, the adjusted basis of any asset which is stock in a corporation which is not included in the affiliated group and in which members of the affiliated group own 10 percent or more of the total combined voting power of all classes of stock entitled to vote in such corporation shall be—\n“(A) increased by the amount of the earnings and profits of such corporation attributable to such stock and accumulated during the period the taxpayer held such stock, or\n“(B) reduced (but not below zero) by any deficit in earnings and profits of such corporation attributable to such stock for such period.”\nSubsec. (e)(5)(B).  Pub. L. 100–647, §\u202f1012(h)(4)(B) , inserted at end “This subparagraph shall not apply for purposes of paragraph (6).”\nSubsec. (e)(5)(D).  Pub. L. 100–647, §\u202f1012(h)(4)(A) , added subpar. (D).\nSubsec. (e)(6).  Pub. L. 100–647, §\u202f1012(h)(5) , substituted “directly allocable or apportioned” for “directly allocable and apportioned”.\nSubsec. (e)(7)(D) to (F).  Pub. L. 100–647, §\u202f1012(h)(6)(A) , added subpars. (D) to (F).\n1987—Subsec. (c)(4)(C).  Pub. L. 100–203  inserted “or part II” after “part I”.\n1986— Pub. L. 99–514, §\u202f1215(b)(1) , inserted “and special rules” in section catchline.\nSubsec. (c)(1)(A).  Pub. L. 99–514, §\u202f1242(b)(1) , inserted reference to pars. (6) and (7).\nSubsec. (c)(1)(B).  Pub. L. 99–514, §\u202f1242(b)(2) , inserted “paragraph (6) or (7) or in”.\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f1899A(21) , inserted a comma between “section 871(h)” and “section 881(a)”.\nSubsec. (c)(4)(B)(iii).  Pub. L. 99–514, §\u202f1211(b)(2) , struck out cl. (iii), which read as follows: “is derived from the sale or exchange (without the United States) through such office or other fixed place of business of personal property described in section 1221(1), except that this clause shall not apply if the property is sold or exchanged for use, consumption, or disposition outside the United States and an office or other fixed place of business of the taxpayer outside the United States participated materially in such sale or exchange.”\nSubsec. (c)(6), (7).  Pub. L. 99–514, §\u202f1242(a) , added pars. (6) and (7).\nSubsec. (d)(5)(A)(i).  Pub. L. 99–514, §\u202f1201(d)(4) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “Subparagraphs (A), (B), (C), and (D) of section 904(d)(2) (relating to interest income to which separate limitation applies) and subparagraph (J) of section 904(d)(3) (relating to interest from members of same affiliated group).”\nPub. L. 99–514, §\u202f1810(c)(3) , inserted “and subparagraph (J) of section 904(d)(3) (relating to interest from members of same affiliated group)”.\nSubsec. (d)(5)(A)(ii).  Pub. L. 99–514, §\u202f1223(b)(1) , substituted “less than 5 percent or $1,000,000” for “less than 10 percent”.\nSubsec. (d)(5)(A)(iii).  Pub. L. 99–514, §\u202f1221(a)(2) , amended cl. (iii) generally, substituting “section 954(c)(2) (relating to certain export financing)” for “section 954(c)(3) (relating to certain income derived in active conduct of trade or business)”.\nSubsec. (d)(5)(A)(iv).  Pub. L. 99–514, §\u202f1221(a)(2) , amended cl. (iv) generally, substituting “Clause (i) of section 954(c)(3)(A) (relating to” for “Subparagraphs (A) and (B) of section 954(c)(4) (relating to exception for”.\nSubsec. (d)(5)(B).  Pub. L. 99–514, §\u202f1275(c)(7) , amended subpar. (B) generally, striking out cl. (i) heading, substituting “An amount” for “Any amount”, and striking out cl. (ii), Virgin Islands corporations, which read as follows: “Subsection (b) of section 934 shall not apply to any amount treated as interest under paragraph (1) unless such amount is from sources within the Virgin Islands (determined after the application of paragraph (1)).”\nSubsec. (d)(7), (8).  Pub. L. 99–514, §\u202f1810(c)(2) , added par. (7) and redesignated former par. (7) as (8).\nSubsec. (e).  Pub. L. 99–514, §\u202f1215(a) , added subsec. (e).\n1984—Subsec. (c)(2).  Pub. L. 98–369, §\u202f127(c) , substituted “section 871(a)(1), section 871(h) section 881(a), or section 881(c)” for “section 871(a)(1) or section 881(a)”.\nSubsec. (d).  Pub. L. 98–369, §\u202f123(a) , added subsec. (d).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(a)(113)(A) , substituted in heading “Produced” for “Sale, etc.” and struck out in text provisions relating to the definition of sale and sold.\nSubsec. (c)(4)(B)(i).  Pub. L. 94–455, §\u202f1901(a)(113)(B) , substituted “sale or exchange” for “sale”.\nSubsec. (c)(4)(B)(iii).  Pub. L. 94–455, §\u202f1901(a)(113)(B) , (C), substituted “sold or exchanged” for “sold” and “sale or exchange” for “sale” wherever appearing.\nSubsec. (c)(5)(C).  Pub. L. 94–455, §\u202f1901(a)(113)(B) , substituted “sale or exchange” for “sale” wherever appearing.\n1966— Pub. L. 89–809  designated existing provisions as subsec. (a) and added subsecs. (b) and (c).\nPub. L. 117–2, title IX, §\u202f9671(b) ,  Mar. 11, 2021 ,  135 Stat. 184 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 115–97, title I, §\u202f13501(c)(1) ,  Dec. 22, 2017 ,  131 Stat. 2141 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to sales, exchanges, and dispositions on or after  November 27, 2017 .”\nPub. L. 115–97, title I, §\u202f14502(b) ,  Dec. 22, 2017 ,  131 Stat. 2235 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 111–240  applicable to guarantees issued after  Sept. 27, 2010 , see  section 2122(d) of Pub. L. 111–240 , set out as a note under  section 861 of this title .\nPub. L. 111–226, title II, §\u202f216(b) ,  Aug. 10, 2010 ,  124 Stat. 2400 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 10, 2010 ].”\nPub. L. 111–147, title V, §\u202f551(b) ,  Mar. 18, 2010 ,  124 Stat. 117 , provided that:  “The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Mar. 18, 2010 ].”\nPub. L. 111–92, §\u202f15(c) ,  Nov. 6, 2009 ,  123 Stat. 2996 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2010 .”\nPub. L. 110–289, div. C, title III, §\u202f3093(c) ,  July 30, 2008 ,  122 Stat. 2912 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  section 101(b)(6) of Pub. L. 108–357  applicable to transactions after  Dec. 31, 2004 , see  section 101(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nPub. L. 108–357, title IV, §\u202f401(c) ,  Oct. 22, 2004 ,  118 Stat. 1491 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nPub. L. 108–357, title IV, §\u202f403(c) ,  Oct. 22, 2004 ,  118 Stat. 1494 , provided that:  “The amendments made by this section [amending this section and  section 904 of this title ] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 108–357, title IV, §\u202f403(d) , as added by  Pub. L. 109–135, title IV, §\u202f403 ( l ),  Dec. 21, 2005 ,  119 Stat. 2625 , provided that:  \n “If the taxpayer elects (at such time and in such form and manner as the Secretary of the Treasury may prescribe) to have the rules of this subsection apply— \n “(1)  the amendments made by this section [amending this section and  section 904 of this title ] shall not apply to taxable years beginning after  December 31, 2002 , and before  January 1, 2005 , and \n \n “(2)  in the case of taxable years beginning after  December 31, 2004 , clause (iv) of section 904(d)(4)(C) of the Internal Revenue Code of 1986 (as amended by this section) shall be applied by substituting ‘ January 1, 2005 ’ for ‘ January 1, 2003 ’ both places it appears.”\n[Amendment by  Pub. L. 109–135  adding  section 403(d) of Pub. L. 108–357 , set out above, effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as an Effective Date of 2005 Amendment note under  section 26 of this title .]\nAmendment by  section 413(c)(12) of Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 108–357, title VIII, §\u202f894(b) ,  Oct. 22, 2004 ,  118 Stat. 1647 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 106–519  applicable to transactions after  Sept. 30, 2000 , with special rules relating to existing foreign sales corporations, see  section 5 of Pub. L. 106–519 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title XI, §\u202f1162(b) ,  Aug. 5, 1997 ,  111 Stat. 987 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 102–227, title I, §\u202f101(b) ,  Dec. 11, 1991 ,  105 Stat. 1686 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  August 1, 1989 .”\nPub. L. 101–508, title XI, §\u202f11401(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–472 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  August 1, 1989 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–203  applicable to taxable years beginning after  Dec. 31, 1987 , see  section 10242(d) of Pub. L. 100–203 , set out as a note under  section 816 of this title .\nAmendment by  section 1201(d)(4) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1201(e) of Pub. L. 99–514 , set out as a note under  section 904 of this title .\nAmendment by  section 1211(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nPub. L. 99–514, title XII, §\u202f1215(c) ,  Oct. 22, 1986 ,  100 Stat. 2545 , as amended by  Pub. L. 100–647, title I, §\u202f1012(h)(7) ,  Nov. 10, 1988 ,  102 Stat. 3504 ;  Pub. L. 104–191, title V, §\u202f521(a) ,  Aug. 21, 1996 ,  110 Stat. 2103 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Transitional rules.— “(A)   General phase-in.— “(i)   In general .— In the case of the 1st 3 taxable years of the taxpayer beginning after  December 31, 1986 , the amendments made by this section shall not apply to interest expenses paid or accrued by the taxpayer during the taxable year with respect to an aggregate amount of indebtedness which does not exceed the general phase-in amount. \n \n “(ii)   General phase-in amount .— Except as provided in clause (iii), the general phase-in amount for purposes of clause (i) is the applicable percentage (determined under the following table) of the aggregate amount of indebtedness of the taxpayer outstanding on  November 16, 1985 : \n \n \n \n \n \n \n \n \n \n \n \u2001 The applicable \n “In the case of the: percentage is: \n 1st taxable year 75\u202f \n 2nd taxable year 50\u202f \n 3rd taxable year 25. \n \n \n \n \n “(iii)   Lower limit where taxpayer reduces indebtedness .— For purposes of applying this subparagraph to interest expenses attributable to any month, the general phase-in amount shall in no event exceed the lowest amount of indebtedness of the taxpayer outstanding as of the close of any preceding month beginning after  November 16, 1985 . To the extent provided in regulations, the average amount of indebtedness outstanding during any month shall be used (in lieu of the amount outstanding as of the close of such month) for purposes of the preceding sentence. \n \n \n “(B)   Consolidation rule not to apply to certain interest.— “(i)   In general .— In the case of the 1st 5 taxable years of the taxpayer beginning after  December 31, 1986 — “(I)  subparagraph (A) shall not apply for purposes of paragraph (1) of section 864(e) of the Internal Revenue Code of 1986 (as added by this section), but \n \n “(II)  such paragraph (1) shall not apply to interest expenses paid or accrued by the taxpayer during the taxable year with respect to an aggregate amount of indebtedness which does not exceed the special phase-in amount. \n \n \n “(ii)   Special phase-in amount .— The special phase-in amount for purposes of clause (i) is the sum of— “(I)  the general phase-in amount as determined for purposes of subparagraph (A), \n \n “(II)  the 5-year phase-in amount, and \n \n “(III)  the 4-year phase-in amount. \n \n\n \u2001\u2001For purposes of applying this subparagraph to interest expense attributable to any month, the special phase-in amount shall in no event exceed the limitation determined under subparagraph (A)(iii). \n \n “(iii)  5- year phase-in amount .— The 5-year phase-in amount is the lesser of— “(I)  the applicable percentage (determined under the following table for purposes of this subclause) of the 5-year debt amount, or \n \n “(II)  the applicable percentage (determined under the following table for purposes of this subclause) of the 5-year debt amount reduced by paydowns: \n \n \n \n \n \n \n \n “In the case of the: The applicable percentage for purposes of subclause (I) is: The applicable percentage for purposes of subclause (II) is: \n \n \n 1st taxable year 8⅓ \u200010\u202f \n 2nd taxable year 16⅔ \u200025\u202f \n 3rd taxable year 25 \u200050\u202f \n 4th taxable year 33⅓ 100\u202f \n 5th taxable year 16⅔ 100. \n \n \n \n \n \n “(iv)  4- year phase-in amount .— The 4-year phase-in amount is the lesser of— “(I)  the applicable percentage (determined under the following table for purposes of this subclause) of the 4-year debt amount, or \n \n “(II)  the applicable percentage (determined under the following table for purposes of this subclause) of the 4-year debt amount reduced by paydowns to the extent such paydowns exceed the 5-year debt amount: \n \n \n \n \n \n \n \n “In the case of the: The applicable percentage for purposes of subclause (I) is: The applicable percentage for purposes of subclause (II) is: \n \n \n 1st taxable year 5 6¼ \n 2nd taxable year 10 16⅔ \n 3rd taxable year 15 37½ \n 4th taxable year 20 100 \n 5th taxable year 0 \u20000.\u202f \n \n \n \n \n \n “(v)  5- year debt amount .— The term ‘5-year debt amount’ means the excess (if any) of— “(I)  the amount of the outstanding indebtedness of the taxpayer on  May 29, 1985 , over \n \n “(II)  the amount of the outstanding indebtedness of the taxpayer as of the close of  December 31, 1983 . \n \n\n \u2001\u2001The 5-year debt amount shall not exceed the aggregate amount of indebtedness of the taxpayer outstanding on  November 16, 1985 . \n \n “(vi)  4- year debt amount .— The term ‘4-year debt amount’ means the excess (if any) of— “(I)  the amount referred to in clause (v)(II), over \n \n “(II)  the amount of the outstanding indebtedness of the taxpayer as of the close of  December 31, 1982 . \n \n\n \u2001\u2001The 4-year debt amount shall not exceed the aggregate amount of indebtedness of the taxpayer outstanding on  November 16, 1985 , reduced by the 5-year debt amount. \n \n “(vii)   Paydowns .— For purposes of applying this subparagraph to interest expenses attributable to any month, the term ‘paydowns’ means the excess (if any) of— “(I)  the aggregate amount of indebtedness of the taxpayer outstanding on  November 16, 1985 , over \n \n “(II)  the lowest amount of indebtedness of the taxpayer outstanding as of the close of any preceding month beginning after  November 16, 1985  (or, to the extent provided in regulations under subparagraph (A)(iii), the average amount of indebtedness outstanding during any such month). \n \n \n \n “(C)   Coordination of subparagraphs (a) and (b) .— In applying subparagraph (B), there shall first be taken into account indebtedness to which subparagraph (A) applies. \n \n “(D)   Special rules.— “(i)  In the case of the 1st 9 taxable years of the taxpayer beginning after  December 31, 1986 , the amendments made by this section shall not apply to interest expenses paid or accrued by the taxpayer during the taxable year with respect to an aggregate amount of indebtedness which does not exceed the applicable percentage (determined under the following table) of the indebtedness described in clause (iii) or (iv): \n \n \n \n \n \n \n \u2001\u2001“In the case of the: The applicable percentage is: \n \n \n 1st taxable year 90\u202f\u202f \n 2nd taxable year 80\u202f\u202f \n 3rd taxable year 70\u202f\u202f \n 4th taxable year 60\u202f\u202f \n 5th taxable year 50\u202f\u202f \n 6th taxable year 40\u202f\u202f \n 7th taxable year 30\u202f\u202f \n 8th taxable year 20\u202f\u202f \n 9th taxable year 10. \n \n \n \n \n “(ii)  The provisions of this subparagraph shall apply in lieu of the provisions of subparagraphs (A) and (B). \n \n “(iii)   Indebtedness outstanding on  may 29, 1985 .— Indebtedness is described in this clause if it is indebtedness (which was outstanding on  May 29, 1985 ) of a corporation incorporated on  June 13, 1917 , which has its principal place of business in Bartlesville, Oklahoma. \n \n “(iv)   Indebtedness outstanding on  may 29, 1985 .— Indebtedness is described in this clause if it is indebtedness (which was outstanding on  May 29, 1985 ) of a member of an affiliated group (as defined in section 1504(a) [of the Internal Revenue Code of 1986]), the common parent of which was incorporated on  August 26, 1926 , and has its principal place of business in Harrison, New York. \n \n \n “(E)   Treatment of affiliated group .— For purposes of this paragraph, all members of the same affiliated group of corporations (as defined in section 864(e)(5)(A) of the Internal Revenue Code of 1986, as added by this section) shall be treated as 1 taxpayer whether or not such members filed a consolidated return. \n \n “(F)   Election to have paragraph not apply .— A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have this paragraph not apply. In the case of members of the same affiliated group (as so defined), such an election may be made only if each member consents to such election. \n \n \n “(3)   Special rule.— “(A)   In general .— In the case of a qualified corporation, in lieu of applying paragraph (2), the amendments made by this section shall not apply to interest expenses allocable to any indebtedness to the extent such indebtedness does not exceed $500,000,000 if— “(i)  the indebtedness was incurred to develop or improve existing property that is owned by the taxpayer on  November 16, 1985 , and was acquired with the intent to develop or improve the property, \n \n “(ii)  the loan agreement with respect to the indebtedness provides that the funds are to be utilized for purposes of developing or improving the above property, and \n \n “(iii)  the debt to equity ratio of the companies that join in the filing of the consolidated return is less than 15 percent. \n \n \n “(B)   Qualified corporation .— For purposes of subparagraph (A), the term ‘qualified corporation’ means a corporation— “(i)  which was incorporated in Delaware on  June 29, 1964 , \n \n “(ii)  the principal subsidiary of which is a resident of Arkansas, and \n \n “(iii)  which is a member of an affiliated group the average daily United States production of oil of which is less than 50,000 barrels and the average daily United States refining of which is less than 150,000 barrels. \n \n \n \n “(4)   Special rules for subsidiary .— The amendments made by this section shall not apply to interest on up to the applicable dollar amount of indebtedness of a subsidiary incorporated on  February 11, 1975 , the indebtedness of which on  May 6, 1986 , included— “(A)  $100,000,000 face amount of 11¾ percent notes due in 1990, \n \n “(B)  $100,000,000 of 8¾ percent notes due in 1989, \n \n “(C)  6¾ percent Japanese yen notes due in 1991, and \n \n “(D)  5⅜ percent Swiss franc bonds due in 1994. \n \n\n For purposes of this paragraph, the term ‘applicable dollar amount’ means $600,000,000 in the case of taxable years beginning in 1987 through 1991, $500,000,000 in the case of the taxable year beginning in 1992, $400,000,000 in the case of the taxable year beginning in 1993, $300,000,000 in the case of the taxable year beginning in 1994, $200,000,000 in the case of the taxable year beginning in 1995, $100,000,000 in the case of the taxable year beginning in 1996, and zero in the case of taxable years beginning after 1996. \n \n “[(5)  Repealed.  Pub. L. 104–191, title V, §\u202f521(a) ,  Aug. 21, 1996 ,  110 Stat. 2103 .] \n \n “(6)   Special rules for allocating general and administrative expenses.— “(A)   In general .— In the case of an affiliated group of domestic corporations the common parent of which has its principal office in New Brunswick, New Jersey, and has a certificate of organization which was filed with the Secretary of the State of New Jersey on  November 10, 1887 , the amendments made by this section shall not apply to the phase-in percentage of general and administrative expenses paid or incurred in its 1st 3 taxable years beginning after  December 31, 1986 . \n \n “(B)   Phase-in percentage .— For purposes of subparagraph (A): \n \n \n \n \n \n \n \n \n \n \n “In the case of taxable The phase-in \n \u2001years beginning in: percentage is: \n 1987 75 \n 1988 50 \n 1989 25.”\n[ Pub. L. 104–191, title V, §\u202f521(b) ,  Aug. 21, 1996 ,  110 Stat. 2103 , provided that:\n[“(1)  In general .—The amendment made by this section [amending  section 1215(c) of Pub. L. 99–514 , set out above] shall apply to taxable years beginning after  December 31, 1995 .\n[“(2)  Special rule .—In the case of the first taxable year beginning after  December 31, 1995 , the pre-effective date portion of the interest expense of the corporation referred to in such paragraph (5) of such section 1215(c) [of  Pub. L. 99–514 ] for such taxable year shall be allocated and apportioned without regard to such amendment. For purposes of the preceding sentence, the pre-effective date portion is the amount which bears the same ratio to the interest expense for such taxable year as the number of days during such taxable year before the date of the enactment of this Act [ Aug. 21, 1996 ] bears to 366.”]\nAmendment by  section 1221(a)(2) of Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1221(g) of Pub. L. 99–514 , set out as a note under  section 954 of this title .\nPub. L. 99–514, title XII, §\u202f1223(c) ,  Oct. 22, 1986 ,  100 Stat. 2558 , provided that:  “The amendments made by this section [amending this section and sections 881 and 954 of this title] shall apply to taxable years beginning after  December 31, 1986 .”\nPub. L. 99–514, title XII, §\u202f1242(c) ,  Oct. 22, 1986 ,  100 Stat. 2580 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1275(c)(7) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by section 1810(c)(2), (3) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f123(c) ,  July 18, 1984 ,  98 Stat. 646 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 956 of this title ] shall apply to accounts receivable and evidences of indebtedness transferred after  March 1, 1984 , in taxable years ending after such date. \n \n “(2)   Transitional rule .— The amendments made by this section shall not apply to accounts receivable and evidences of indebtedness acquired after  March 1, 1984 , and before  March 1, 1994 , by a Belgian corporation in existence on  March 1, 1984 , in any taxable year ending after such date, but only to the extent that the amount includible in gross income by reason of section 956 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to such corporation for all such taxable years is not reduced by reason of this paragraph by more than the lesser of— “(A)  $15,000,000 or \n \n “(B)  the amount of the Belgian corporation’s adjusted basis on  March 1, 1984 , in stock of a foreign corporation formed to issue bonds outside the United States to the public.”\nAmendment by  section 127(c) of Pub. L. 98–369  applicable to interest received after  July 18, 1984 , with respect to obligations issued after such date, in taxable years ending after such date, see  section 127(g)(1) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , except that in applying  section 864(c)(4)(B)(iii) of this title  with respect to a binding contract entered into on or before  Feb. 24, 1966 , activities in the United States on or before such date in negotiating or carrying out such contract shall not be taken into account, see  section 102(e)(1) of Pub. L. 89–809 , set out as a note under  section 861 of this title .\nFor provisions that nothing in amendment by section 401(d)(1)(D)(x), (xvii)(IV), (V) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor applicability of amendment by  section 1201(d)(4) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , and for nonapplication of amendments by sections 1211(b)(2) and 1242(a) of  Pub. L. 99–514  to the extent application of such amendments would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2) to (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN INCOME'},
  'content': 'Gain (in excess of the depreciation adjustments) from the sale of depreciable personal property shall be sourced as if such property were inventory property.\nThe term “United States depreciation adjustments” means the portion of the depreciation adjustments to the adjusted basis of the property which are attributable to the depreciation deductions allowable in computing taxable income from sources in the United States.\nThe term “depreciable personal property” means any personal property if the adjusted basis of such property includes depreciation adjustments.\nThe term “depreciation adjustments” means adjustments reflected in the adjusted basis of any property on account of depreciation deductions (whether allowed with respect to such property or other property and whether allowed to the taxpayer or to any other person).\nThe term “depreciation deductions” means any deductions for depreciation or amortization or any other deduction allowable under any provision of this chapter which treats an otherwise capital expenditure as a deductible expense.\nFor purposes of paragraph (1), the term “intangible” means any patent, copyright, secret process or formula, goodwill, trademark, trade brand, franchise, or other like property.\nTo the extent this section applies to the sale of goodwill, payments in consideration of such sale shall be treated as from sources in the country in which such goodwill was generated.\nNotwithstanding paragraph (1), any gain from the sale of an intangible shall be sourced under subsection (c) to the extent such gain does not exceed the depreciation adjustments with respect to such intangible.\nParagraph (2) of subsection (c) shall not apply to any gain from the sale of an intangible.\nIn the case of income not sourced under subsection (b), (c), (d)(1)(B) or (3), or (f), if a United States resident maintains an office or other fixed place of business in a foreign country, income from sales of personal property attributable to such office or other fixed place of business shall be sourced outside the United States.\nSubparagraph (A) shall not apply unless an income tax equal to at least 10 percent of the income from the sale is actually paid to a foreign country with respect to such income.\nNotwithstanding any other provisions of this part, if a nonresident maintains an office or other fixed place of business in the United States, income from any sale of personal property (including inventory property) attributable to such office or other fixed place of business shall be sourced in the United States. The preceding sentence shall not apply for purposes of section 971 (defining export trade corporation).\nSubparagraph (A) shall not apply to any sale of inventory property which is sold for use, disposition, or consumption outside the United States if an office or other fixed place of business of the taxpayer in a foreign country materially participated in the sale.\nThe principles of section 864(c)(5) shall apply in determining whether a taxpayer has an office or other fixed place of business and whether a sale is attributable to such an office or other fixed place of business.\nThe term “nonresident” means any person other than a United States resident.\nFor purposes of this section, a United States citizen or resident alien shall not be treated as a nonresident with respect to any sale of personal property unless an income tax equal to at least 10 percent of the gain derived from such sale is actually paid to a foreign country with respect to that gain.\nThe term “inventory property” means personal property described in paragraph (1) of section 1221(a).\nThe term “sale” includes an exchange or any other disposition.\nAny possession of the United States shall be treated as a foreign country.\nThe term “affiliate” means a member of the same affiliated group (within the meaning of section 1504(a) without regard to section 1504(b)).\nIn the case of a partnership, except as provided in regulations, this section shall be applied at the partner level.\n2018—Subsec. (j)(3).  Pub. L. 115–141  substituted “and 933” for “,\u2000933, and 936”.\n2017—Subsec. (h)(1)(B).  Pub. L. 115–97  substituted “907” for “902, 907,”.\n1999—Subsec. (i)(1).  Pub. L. 106–170  substituted “section 1221(a)” for “section 1221”.\n1996—Subsec. (b)(2).  Pub. L. 104–188  substituted “863” for “863(b)”.\n1993—Subsec. (b).  Pub. L. 103–66  inserted at end “Notwithstanding the preceding sentence, any income from the sale of any unprocessed timber which is a softwood and was cut from an area in the United States shall be sourced in the United States and the rules of sections 862(a)(6) and 863(b) shall not apply to any such income. For purposes of the preceding sentence, the term ‘unprocessed timber’ means any log, cant, or similar form of timber.”\n1990—Subsec. (c)(3)(B).  Pub. L. 101–508  substituted “section 168(g)(4)” for “section 48(a)(2)(B)”.\n1988—Subsec. (d)(2).  Pub. L. 100–647, §\u202f1012(d)(12) , inserted “franchise,” after “trade brand,”.\nSubsec. (d)(4).  Pub. L. 100–647, §\u202f1012(d)(1) , added par. (4).\nSubsec. (e)(1)(A).  Pub. L. 100–647, §\u202f1012(d)(2) , (9), substituted “(d)(1)(B) or (3)” for “(d)” and “in a foreign country” for first reference to “outside the United States”.\nSubsec. (e)(2)(B).  Pub. L. 100–647, §\u202f1012(d)(5) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Subparagraph (A) shall not apply to—\n“(i) any sale of inventory property which is sold for use, disposition, or consumption outside the United States if an office or other fixed place of business of the taxpayer outside the United States materially participated in the sale, or\n“(ii) any amount included in gross income under section 951(a)(1)(A).”\nSubsec. (f).  Pub. L. 100–647, §\u202f1012(d)(4) , amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “If—\n“(1) a United States resident sells stock in an affiliate which is a foreign corporation,\n“(2) such affiliate is engaged in the active conduct of a trade or business, and\n“(3) such sale occurs in the foreign country in which the affiliate derived more than 50 percent of its gross income for the 3-year period ending with the close of the affiliate’s taxable year immediately preceding the year during which such sale occurred,\nany gain from such sale shall be sourced outside the United States.”\nSubsec. (g)(1)(A)(i).  Pub. L. 100–647, §\u202f1012(d)(11) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any individual who has a tax home (as defined in section 911(d)(3)) in the United States, and”.\nSubsec. (g)(1)(A)(ii).  Pub. L. 100–647, §\u202f1012(d)(3)(A) , struck out “partnership,” after “corporation,”.\nSubsec. (g)(3).  Pub. L. 100–647, §\u202f1012(d)(6)(A) , added par. (3).\nSubsec. (h).  Pub. L. 100–647, §\u202f1012(d)(8) , added subsec. (h) and redesignated former subsec. (h) as (i).\nPub. L. 100–647, §\u202f1012(d)(3)(B) , added par. (5) to subsec. (h) prior to redesignation as subsec. (i).\nSubsec. (i).  Pub. L. 100–647, §\u202f1012(d)(8) , redesignated former subsec. (h) as (i). Former subsec. (i) redesignated (j).\nPub. L. 100–647, §\u202f1012(d)(6)(B) , added par. (3) to subsec. (i) prior to redesignation as subsec. (j).\nSubsec. (i)(5).  Pub. L. 100–647, §\u202f1012(d)(3)(B) , added par. (5) to subsec. (h) prior to redesignation as subsec. (i).\nSubsec. (j).  Pub. L. 100–647, §\u202f1012(d)(8) , redesignated former subsec. (i) as (j). Former subsec. (j) redesignated (k).\nSubsec. (j)(3).  Pub. L. 100–647, §\u202f1012(d)(6)(B) , added par. (3) to subsec. (i) prior to redesignation as subsec. (j).\nSubsec. (k).  Pub. L. 100–647, §\u202f1012(d)(8) , redesignated former subsec. (j) as (k).\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 104–188, title I, §\u202f1704(f)(4)(B) ,  Aug. 20, 1996 ,  110 Stat. 1880 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall take effect as if included in the amendments made by section 1211 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nPub. L. 103–66, title XIII, §\u202f13239(e) ,  Aug. 10, 1993 ,  107 Stat. 509 , provided that:  “The amendments made by this section [amending this section and sections 927, 954, and 993 of this title] shall apply to sales, exchanges, or other dispositions after the date of the enactment of this Act [ Aug. 10, 1993 ].”\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title I, §\u202f1012(d)(5) ,  Nov. 10, 1988 ,  102 Stat. 3497 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1987 .\nAmendment by section 1012(d)(1)–(4), (6), (8), (9), (11), (12) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XII, §\u202f1211(c) ,  Oct. 22, 1986 ,  100 Stat. 2536 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this section, amending sections 861 to 864, 871, 881, and 904 of this title, and enacting provisions set out below] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special rule for foreign persons .— In the case of any foreign person other than any controlled foreign corporations (within the meaning of section 957(a) of the Internal Revenue Code of 1954 [now 1986]), the amendments made by this section shall apply to transactions entered into after  March 18, 1986 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor nonapplication of amendment by  section 1211(a) of Pub. L. 99–514  (enacting this section) to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nPub. L. 99–514, title XII, §\u202f1211(d) ,  Oct. 22, 1986 ,  100 Stat. 2536 , directed Secretary of the Treasury or his delegate to conduct a study of source rules for sales of inventory property and, not later than  Sept. 30, 1987  (due date extended to  Jan. 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 ), to submit to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate a report of such study (together with recommendations he deemed advisable).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'In the case of a nonresident alien individual present in the United States for a period or periods aggregating 183 days or more during the taxable year, there is hereby imposed for such year a tax of 30 percent of the amount by which his gains, derived from sources within the United States, from the sale or exchange at any time during such year of capital assets exceed his losses, allocable to sources within the United States, from the sale or exchange at any time during such year of capital assets. For purposes of this paragraph, gains and losses shall be taken into account only if, and to the extent that, they would be recognized and taken into account if such gains and losses were effectively connected with the conduct of a trade or business within the United States, except that such gains and losses shall be determined without regard to section 1202 and such losses shall be determined without the benefits of the capital loss carryover provided in section 1212. Any gain or loss which is taken into account in determining the tax under paragraph (1) or subsection (b) shall not be taken into account in determining the tax under this paragraph. For purposes of the 183-day requirement of this paragraph, a nonresident alien individual not engaged in trade or business within the United States who has not established a taxable year for any prior period shall be treated as having a taxable year which is the calendar year.\nA nonresident alien individual engaged in trade or business within the United States during the taxable year shall be taxable as provided in section 1 or 55 on his taxable income which is effectively connected with the conduct of a trade or business within the United States.\nIn determining taxable income for purposes of paragraph (1), gross income includes only gross income which is effectively connected with the conduct of a trade or business within the United States.\nFor purposes of this section, a nonresident alien individual who (without regard to this subsection) is not engaged in trade or business within the United States and who is temporarily present in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act, as amended ( 8 U.S.C. 1101(a)(15)(F) , (J), (M), or (Q)), shall be treated as a nonresident alien individual engaged in trade or business within the United States, and any income described in the second sentence of section 1441(b) which is received by such individual shall, to the extent derived from sources within the United States, be treated as effectively connected with the conduct of a trade or business within the United States.\nIf an election has been made under paragraph (1) and such election has been revoked, a new election may not be made under such paragraph for any taxable year before the 5th taxable year which begins after the first taxable year for which such revocation is effective, unless the Secretary consents to such new election.\nAn election under paragraph (1), and any revocation of such an election, may be made only in such manner and at such time as the Secretary may by regulations prescribe.\nExcept as provided in subparagraph (B), the term “original issue discount obligation” means any bond or other evidence of indebtedness having original issue discount (within the meaning of section 1273).\nAny obligation payable 183 days or less from the date of original issue (without regard to the period held by the taxpayer).\nAny obligation the interest on which is exempt from tax under section 103 or under any other provision of law without regard to the identity of the holder.\nThe determination of the amount of the original issue discount which accrues during any period shall be made under the rules of section 1272 (or the corresponding provisions of prior law) without regard to any exception for short-term obligations.\nExcept to the extent provided in regulations prescribed by the Secretary, the determination of whether any amount described in subsection (a)(1)(C) is from sources within the United States shall be made at the time of the payment (or sale or exchange) as if such payment (or sale or exchange) involved the payment of interest.\nThe provisions of section 1286 (relating to the treatment of stripped bonds and stripped coupons as obligations with original issue discount) shall apply for purposes of this section.\nIn the case of any portfolio interest received by a nonresident individual from sources within the United States, no tax shall be imposed under paragraph (1)(A) or (1)(C) of subsection (a).\nThe term “portfolio interest” shall not include any interest described in paragraph (2) which is received by a 10-percent shareholder.\nThe term “related person” means any person who is related to the debtor within the meaning of section 267(b) or 707(b)(1), or who is a party to any arrangement undertaken for a purpose of avoiding the application of this paragraph.\nSubparagraph (A) shall not apply to the payment of interest on any obligation which is issued on or before the date of the publication of the Secretary’s determination under such subparagraph.\nFor purposes of this subsection, the term “registered form” has the same meaning given such term by section 163(f).\nNo tax shall be imposed under paragraph (1)(A) or (1)(C) of subsection (a) on any amount described in paragraph (2).\nNo tax shall be imposed under paragraph (1)(A) of subsection (a) on the proceeds from a wager placed in any of the following games: blackjack, baccarat, craps, roulette, or big-6 wheel. The preceding sentence shall not apply in any case where the Secretary determines by regulation that the collection of the tax is administratively feasible.\nExcept as provided in subparagraph (B), no tax shall be imposed under paragraph (1)(A) of subsection (a) on any interest-related dividend received from a regulated investment company which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid.\nExcept as provided in clause (ii), an interest related dividend is any dividend, or part thereof, which is reported by the company as an interest related dividend in written statements furnished to its shareholders.\nExcept as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported interest related dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported interest related dividend amount bears to the aggregate reported amount.\nIn the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting “post-December reported amount” for “aggregate reported amount” and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.\nThe term “reported interest related dividend amount” means the amount reported to its shareholders under clause (i) as an interest related dividend.\nThe term “excess reported amount” means the excess of the aggregate reported amount over the qualified net interest income of the company for the taxable year.\nThe term “aggregate reported amount” means the aggregate amount of dividends reported by the company under clause (i) as interest related dividends for the taxable year (including interest related dividends paid after the close of the taxable year described in section 855).\nThe term “post-December reported amount” means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.\nFor purposes of subparagraph (C), the term “qualified net interest income” means the qualified interest income of the regulated investment company reduced by the deductions properly allocable to such income.\nFor purposes of this paragraph, the term “10-percent shareholder” has the meaning given such term by subsection (h)(3)(B).\nExcept as provided in subparagraph (B), no tax shall be imposed under paragraph (1)(A) of subsection (a) on any short-term capital gain dividend received from a regulated investment company which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid.\nSubparagraph (A) shall not apply in the case of any nonresident alien individual subject to tax under subsection (a)(2).\nExcept as provided in clause (ii), the term “short-term capital gain dividend” means any dividend, or part thereof, which is reported by the company as a short-term capital gain dividend in written statements furnished to its shareholders.\nExcept as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported short-term capital gain dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported short-term capital gain dividend amount bears to the aggregate reported amount.\nIn the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting “post-December reported amount” for “aggregate reported amount” and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.\nThe term “reported short-term capital gain dividend amount” means the amount reported to its shareholders under clause (i) as a short-term capital gain dividend.\nThe term “excess reported amount” means the excess of the aggregate reported amount over the qualified short-term gain of the company for the taxable year.\nThe term “aggregate reported amount” means the aggregate amount of dividends reported by the company under clause (i) as short-term capital gain dividends for the taxable year (including short-term capital gain dividends paid after the close of the taxable year described in section 855).\nThe term “post-December reported amount” means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.\nFor purposes of subparagraph (C), the term “qualified short-term gain” means the excess of the net short-term capital gain of the regulated investment company for the taxable year over the net long-term capital loss (if any) of such company for such taxable year. For purposes of this subparagraph, the net short-term capital gain of the regulated investment company shall be computed by treating any short-term capital gain dividend includible in gross income with respect to stock of another regulated investment company as a short-term capital gain.\nExcept as provided in clause (iv), a corporation meets the 80-percent foreign business requirements of this subparagraph if it is shown to the satisfaction of the Secretary that at least 80 percent of the gross income from all sources of such corporation for the testing period is active foreign business income.\nFor purposes of this subsection, the term “testing period” means the 3-year period ending with the close of the taxable year of the corporation preceding the payment (or such part of such period as may be applicable). If the corporation has no gross income for such 3-year period (or part thereof), the testing period shall be the taxable year in which the payment is made.\nThe corporation referred to in paragraph (1)(A) and all of such corporation’s subsidiaries shall be treated as one corporation.\nFor purposes of subparagraph (A), the term “subsidiary” means any corporation in which the corporation referred to in subparagraph (A) owns (directly or indirectly) stock meeting the requirements of section 1504(a)(2) (determined by substituting “50 percent” for “80 percent” each place it appears and without regard to section 1504(b)(3)).\nThe Secretary may issue such regulations or other guidance as is necessary or appropriate to carry out the purposes of this section, including regulations or other guidance which provide for the proper application of the aggregation rules described in paragraph (3).\nFor purposes of subsection (a), sections 881 and 4948(a), and chapters 3 and 4, a dividend equivalent shall be treated as a dividend from sources within the United States.\nThe term “long party” means, with respect to any underlying security of any notional principal contract, any party to the contract which is entitled to receive any payment pursuant to such contract which is contingent upon, or determined by reference to, the payment of a dividend from sources within the United States with respect to such underlying security.\nThe term “short party” means, with respect to any underlying security of any notional principal contract, any party to the contract which is not a long party with respect to such underlying security.\nThe term “underlying security” means, with respect to any notional principal contract, the security with respect to which the dividend referred to in paragraph (2)(B) is paid. For purposes of this paragraph, any index or fixed basket of securities shall be treated as a single security.\nFor purposes of this subsection, the term “payment” includes any gross amount which is used in computing any net amount which is transferred to or from the taxpayer.\nIn the case of any chain of dividend equivalents one or more of which is subject to tax under subsection (a) or section 881, the Secretary may reduce such tax, but only to the extent that the taxpayer can establish that such tax has been paid with respect to another dividend equivalent in such chain, or is not otherwise due, or as the Secretary determines is appropriate to address the role of financial intermediaries in such chain. For purposes of this paragraph, a dividend shall be treated as a dividend equivalent.\nFor purposes of chapters 3 and 4, each person that is a party to any contract or other arrangement that provides for the payment of a dividend equivalent shall be treated as having control of such payment.\nSection 207 of the Social Security Act, referred to in subsec. (a)(3)(A), is classified to  section 407 of Title 42 , The Public Health and Welfare.\nThe Trade Act of 1974, referred to in subsec. (f)(2)(B), is  Pub. L. 93–618 ,  Jan. 3, 1975 ,  88 Stat. 1978 . Title V of the Trade Act of 1974 is classified generally to subchapter V (§\u202f2461 et seq.) of chapter 12 of Title 19, Customs Duties. For complete classification of this Act to the Code, see  section 2101 of Title 19  and Tables.\nThe date of the enactment of this subsection, referred to in subsec. ( l )(1)(A)(i), (iii), (B)(iv)(I)(aa), is the date of enactment of  Pub. L. 111–226 , which was approved  Aug. 10, 2010 .\nThe date of the enactment of this subsection, referred to in subsec. (m)(3)(B), is the date of enactment of  Pub. L. 111–147 , which was approved  Mar. 18, 2010 .\n2018—Subsec. (a)(3).  Pub. L. 115–141  struck out concluding provisions which read as follows: “For treatment of certain citizens of possessions of the United States, see section 932(c).”\n2015—Subsec. (k)(1)(C)(v).  Pub. L. 114–113  struck out cl. (v). Text read as follows: “The term ‘interest related dividend’ shall not include any dividend with respect to any taxable year of the company beginning after  December 31, 2014 .”\nSubsec. (k)(2)(C)(v).  Pub. L. 114–113  struck out cl. (v). Text read as follows: “The term ‘short-term capital gain dividend’ shall not include any dividend with respect to any taxable year of the company beginning after  December 31, 2014 .”\n2014—Subsec. (a)(1)(B).  Pub. L. 113–295, §\u202f221(a)(71) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “gains described in section 631(b) or (c), and gains on transfers described in section 1235 made on or before  October 4, 1966 ,”.\nSubsec. (k)(1)(C)(v), (2)(C)(v).  Pub. L. 113–295, §\u202f132(a) , substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (k)(1)(C)(v), (2)(C)(v).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (h)(2).  Pub. L. 111–147, §\u202f502(b)(1) , amended par. (2) generally. Prior to amendment, par. (2) defined portfolio interest to also include interest on certain obligations not in registered form.\nSubsec. (h)(3)(A).  Pub. L. 111–147, §\u202f502(b)(2)(A) , struck out “subparagraph (A) or (B) of” before “paragraph (2)”.\nSubsec. (i)(2)(B).  Pub. L. 111–226, §\u202f217(b)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “A percentage of any dividend paid by a domestic corporation meeting the 80-percent foreign business requirements of section 861(c)(1) equal to the percentage determined for purposes of section 861(c)(2)(A).”\nSubsec. (k)(1)(A).  Pub. L. 111–325, §\u202f302(b)(2) , inserted “which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid” before period at end.\nSubsec. (k)(1)(C).  Pub. L. 111–325, §\u202f301(f)(1) , substituted introductory provisions, cls. (i) to (iv), and cl. (v) heading and “The term ‘interest related dividend’ shall not include any dividend with respect to” for “For purposes of this paragraph, the term ‘interest-related dividend’ means any dividend (or part thereof) which is designated by the regulated investment company as an interest-related dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including amounts so designated with respect to dividends paid after the close of the taxable year described in section 855) is greater than the qualified net interest income of the company for such taxable year, the portion of each distribution which shall be an interest-related dividend shall be only that portion of the amounts so designated which such qualified net interest income bears to the aggregate amount so designated. Such term shall not include any dividend with respect to”.\nPub. L. 111–312, §\u202f748(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (k)(2)(A).  Pub. L. 111–325, §\u202f302(b)(2) , inserted “which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid” before period at end.\nSubsec. (k)(2)(C).  Pub. L. 111–325, §\u202f301(f)(2) , substituted introductory provisions, cls. (i) to (iv), and cl. (v) heading and “The term ‘short-term capital gain dividend’ shall not include any dividend with respect to” for “For purposes of this paragraph, the term ‘short-term capital gain dividend’ means any dividend (or part thereof) which is designated by the regulated investment company as a short-term capital gain dividend in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year of the company (including amounts so designated with respect to dividends paid after the close of the taxable year described in section 855) is greater than the qualified short-term gain of the company for such taxable year, the portion of each distribution which shall be a short-term capital gain dividend shall be only that portion of the amounts so designated which such qualified short-term gain bears to the aggregate amount so designated. Such term shall not include any dividend with respect to”.\nPub. L. 111–312, §\u202f748(a) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (k)(2)(D).  Pub. L. 111–325, §\u202f308(b)(3) , substituted “For purposes of this subparagraph, the net short-term capital gain of the regulated investment company shall be computed by treating any short-term capital gain dividend includible in gross income with respect to stock of another regulated investment company as a short-term capital gain.” for “For purposes of this subparagraph—\n“(i) the net short-term capital gain of the regulated investment company shall be computed by treating any short-term capital gain dividend includible in gross income with respect to stock of another regulated investment company as a short-term capital gain, and\n“(ii) the excess of the net short-term capital gain for a taxable year over the net long-term capital loss for a taxable year (to which an election under section 4982(e)(4) does not apply) shall be determined without regard to any net capital loss or net short-term capital loss attributable to transactions after October 31 of such year, and any such net capital loss or net short-term capital loss shall be treated as arising on the 1st day of the next taxable year.\nTo the extent provided in regulations, clause (ii) shall apply also for purposes of computing the taxable income of the regulated investment company.”\nSubsec. ( l ).  Pub. L. 111–226, §\u202f217(b)(2) , added subsec. ( l ). Former subsec. ( l ) redesignated (m).\nPub. L. 111–147, §\u202f541(a) , added subsec. ( l ). Former subsec. ( l ) redesignated (m).\nSubsec. (m).  Pub. L. 111–226, §\u202f217(b)(2) , redesignated subsec. ( l ) as (m). Former subsec. (m) redesignated (n).\nPub. L. 111–147, §\u202f541(a) , redesignated subsec. ( l ) as (m).\nSubsec. (n).  Pub. L. 111–226, §\u202f217(b)(2) , redesignated subsec. (m) as (n).\n2008—Subsec. (k)(1)(C), (2)(C).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2006—Subsec. (k)(2)(E).  Pub. L. 109–222  added subpar. (E).\n2004—Subsec. (i)(2)(D).  Pub. L. 108–357, §\u202f409(a) , added subpar. (D).\nSubsecs. (k), ( l ).  Pub. L. 108–357, §\u202f411(a)(1) , added subsec. (k) and redesignated former subsec. (k) as ( l ).\n2000—Subsec. (f)(2)(B).  Pub. L. 106–554  inserted opening parenthesis before “19 U.S.C.”.\n1999—Subsec. (h)(4)(C)(iv).  Pub. L. 106–170  substituted “to manage” for “to reduce”.\n1998—Subsec. (f)(2)(B).  Pub. L. 105–206  substituted “ 19 U.S.C. 2461  et seq.)” for “( 19 U.S.C. 2462 )”.\n1996—Subsec. (b)(1).  Pub. L. 104–188, §\u202f1401(b)(10) , substituted “section 1 or 55” for “section 1, 55, or 402(d)(1)”.\nSubsec. (f)(2)(B).  Pub. L. 104–188, §\u202f1954(b)(1) , substituted “under title V” for “within the meaning of section 502”.\n1994—Subsec. (a)(3)(A).  Pub. L. 103–465  substituted “85 percent” for “one-half”.\nSubsec. (c).  Pub. L. 103–296  substituted “(J), (M), or (Q)” for “(J), or (M)” in two places.\n1993—Subsec. (a)(2).  Pub. L. 103–66, §\u202f13113(d)(5) , inserted “such gains and losses shall be determined without regard to section 1202 and” after “except that” in second sentence.\nSubsec. (h)(2)(B)(ii).  Pub. L. 103–66, §\u202f13237(c)(1) , substituted “paragraph (5)” for “paragraph (4)”.\nSubsec. (h)(4) to (7).  Pub. L. 103–66, §\u202f13237(a)(1) , added par. (4) and redesignated former pars. (4) to (6) as (5) to (7), respectively.\n1992—Subsec. (a)(1)(B).  Pub. L. 102–318, §\u202f521(b)(28) , struck out “402(a)(2), 403(a)(2), or” before “631(b)”.\nSubsec. (b)(1).  Pub. L. 102–318, §\u202f521(b)(29) , substituted “402(d)(1)” for “402(e)(1)”.\nSubsec. (k)(1).  Pub. L. 102–318, §\u202f521(b)(30) , substituted “402(e)(2)” for “402(a)(4)”.\n1988—Subsec. (c).  Pub. L. 100–647, §\u202f1001(d)(2)(B) , substituted “the second sentence of section 1441(b)” for “section 1441(b)(1) or (2)”, and “(F), (J), or (M)” for “(F) or (J)” in two places.\nSubsecs. (j), (k).  Pub. L. 100–647, §\u202f6134(a)(1) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1810(d)(3)(A) , substituted “subsection (h)” for “subsection (i)” in introductory provisions.\nSubsec. (a)(1)(C).  Pub. L. 99–514, §\u202f1810(e)(2)(A) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “in the case of—\n“(i) a sale or exchange of an original issue discount obligation, the amount of any gain not in excess of the original issue discount accruing while such obligation was held by the nonresident alien individual (to the extent such discount was not theretofore taken into account under clause (ii)), and\n“(ii) the payment of interest on an original issue discount obligation, an amount equal to the original issue discount accrued on such obligation since the last payment of interest thereon (except that such original issue discount shall be taken into account under this clause only to the extent that the tax thereon does not exceed the interest payment less the tax imposed by subparagraph (A) thereon), and”.\nSubsec. (a)(1)(D).  Pub. L. 99–514, §\u202f1211(b)(4) , struck out “or from payments which are treated as being so contingent under subsection (e),” after “sold or exchanged,”.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f301(b)(9) , struck out “such gains and losses shall be determined without regard to section 1202 (relating to deduction for capital gains) and” after “United States, except that”.\nSubsec. (a)(3).  Pub. L. 99–272  inserted at end “For treatment of certain citizens of possessions of the United States, see section 932(c).”\nSubsec. (e).  Pub. L. 99–514, §\u202f1211(b)(5) , struck out subsec. (e) which related to gains from sale or exchange of certain intangible property, par. (1) treating payments as contingent on use, etc., and par. (2) containing source rule.\nSubsec. (h)(2).  Pub. L. 99–514, §\u202f1810(d)(1)(A) , (3)(B), inserted “which would be subject to tax under subsection (a) but for this subsection and” in introductory provisions and substituted “receives a statement” for “has received a statement” in subpar. (B)(ii).\nSubsec. (h)(3)(C)(ii), (iii).  Pub. L. 99–514, §\u202f1810(d)(2) , added cl. (ii) and redesignated former cl. (ii) as (iii).\nSubsecs. (i), (j).  Pub. L. 99–514, §\u202f1214(c)(1) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f127(a)(2) , substituted “Except as provided in subsection (i), there” for “There”.\nSubsec. (a)(1)(A).  Pub. L. 98–369, §\u202f42(a)(9) , substituted “section 1273” for “section 1232(b)”.\nSubsec. (a)(1)(C).  Pub. L. 98–369, §\u202f128(a)(1) , amended subpar. (C) generally, substituting in cl. (i), “a sale or exchange of an original issue discount obligation, the amount of any gain not in excess of the original issue discount accruing while such obligation was held by the nonresident alien individual (to the extent such discount was not theretofore taken into account under clause (ii)), and” for “bonds or other evidences of indebtedness issued after  September 28, 1965 , and before  April 1, 1972 , amounts which under section 1232(a)(2)(B) are considered as ordinary income, and, in the case of corporate obligations issued after  May 27, 1969 , and before  April 1, 1972 , amounts which would be so considered but for the fact the obligations were issued after  May 27, 1969 ,”, substituting in cl. (ii), “the payment of interest on an original issue discount obligation, an amount equal to the original issue discount accrued on such obligation since the last payment of interest thereon (except that such original issue discount shall be taken into account under this clause only to the extent that the tax thereon does not exceed the interest payment less the tax imposed by subparagraph (A) thereon), and” for “bonds or other evidences of indebtedness issued after  March 31, 1972 , and payable more than 6 months from the date of original issue (without regard to the period held by the taxpayer), amounts which under section 1232(a)(2)(B) would be considered as ordinary income but for the fact such obligations were issued after  May 27, 1969 , and”, and striking out cl. (iii) which required that in the case of the payment of interest on an obligation described in cl. (ii), an amount equal to the original issue discount, but not in excess of such interest less the tax imposed by subpar. (A) thereon, accrued on such obligation since the last payment of interest thereon, be included for purpose of the 30 percent tax.\nSubsec. (g).  Pub. L. 98–369, §\u202f128(a)(2) , added subsec. (g). Former subsec. (g), relating to cross references, redesignated (h).\nSubsec. (g)(6) to (8).  Pub. L. 98–369, §\u202f412(b)(1) , amended subsec. (g), relating to cross references, by striking out par. (6) referring to section 6015(j) for the requirement of making a declaration of estimated tax by certain nonresident alien individuals and redesignating pars. (7) and (8) as (6) and (7), respectively.\nSubsec. (h).  Pub. L. 98–369, §\u202f127(a) , added subsec. (h). Former subsec. (h), relating to cross references, redesignated (i).\nPub. L. 98–369, §\u202f128(a)(2) , redesignated subsec. (g), relating to cross references, as (h).\nSubsec. (i).  Pub. L. 98–369, §\u202f127(a)(1) , redesignated subsec. (h), relating to cross references, as (i).\n1983—Subsec. (a)(3).  Pub. L. 98–21, §\u202f121(c)(1) , added par. (3).\nSubsec. (a)(3)(A).  Pub. L. 98–21, §\u202f335(b)(2)(B) , inserted “(notwithstanding section 207 of the Social Security Act)” after “income”.\n1981—Subsec. (g)(6).  Pub. L. 97–34  substituted “6015(j)” for “6015(i)”.\n1980—Subsec. (b)(1).  Pub. L. 96–222  substituted “55” for “section 55”.\nSubsec. (f).  Pub. L. 96–605  designated existing provision as par. (1), inserted heading “In general” and redesignated par. (1) as subpar. (A), cls. (A) and (B) of subpar. (A) as so redesignated as cls. (i) and (ii), and par. (2) as subpar. (B), and added par. (2).\nSubsec. (g)(8).  Pub. L. 96–499  added par. (8).\n1978—Subsec. (b)(1).  Pub. L. 95–600 , §§\u202f401(b)(3), 421(e)(4), substituted “section 1, section 55, or 402(e)(1)” for “section 1, 402(e)(1), or 1201(b)”.\n1976—Subsec. (a)(1)(C)(i), (ii).  Pub. L. 94–455, §\u202f1901(b)(3)(I) , substituted “ordinary income” for “gain from the sale or exchange of property which is not a capital asset”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”, each time appearing.\nSubsec. (g)(7).  Pub. L. 94–455, §\u202f1012(a)(2) , added par. (7).\n1974—Subsec. (b)(1).  Pub. L. 93–406  inserted reference to section 402(e)(1).\n1971—Subsec. (a)(1)(A).  Pub. L. 92–178, §\u202f313(a) , inserted “(other than original issue discount as defined in section 1232(b))” after “interest”.\nSubsec. (a)(1)(C).  Pub. L. 92–178, §\u202f313(b) , designated existing provisions as cl. (i), inserted “and before  April 1, 1972 ,” after “ September 28, 1965 ,”, substituted “section 1232(a)(2)(B)” for “section 1232”, and inserted “,\u2000in the case of corporate obligations issued after  May 27, 1969 , and before  April 1, 1972 , amounts which would be so considered but for the fact the obligations were issued after  May 27, 1969 ,”, and added cls. (ii) and (iii).\n1966—Subsecs. (a), (b).  Pub. L. 89–809  consolidated the substance of former subsecs. (a) to (c) and, as part of the consolidation, revised the overall income tax treatment of nonresident alien individuals by substituting provisions dividing their income for tax purposes into two basic groups according to whether or not the income is effectively connected with a United States trade or business for provisions calling for different tax treatment based upon whether or not they are, or are not, engaged in a trade or business in the United States, with a further breakdown of those not engaged in trade or business in the United States as to whether their income is over or under $21,200.\nSubsec. (c).  Pub. L. 89–809  redesignated subsec. (d) as (c) and inserted provisions that any income described in section 1441(b)(1) or (2) which is received by such individual shall, to the extent derived from sources within the United States, be treated as effectively connected with the conduct of a trade or business within the United States. Substance of former subsec. (c) revised and incorporated into subsecs. (a) and (b).\nSubsecs. (d) to (f).  Pub. L. 89–809  added subsecs. (d) to (f) and redesignated former subsecs. (d) and (e) as (c) and (g), respectively.\nSubsec. (g).  Pub. L. 89–809  redesignated former subsec. (e) as (g), added pars. (2) and (4) to (6), and redesignated former pars. (1) and (2) as (3) and (1), respectively.\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f113(b)(2) , substituted “30 percent tax” for “and gross income of not more than $15,400” in heading.\nSubsec. (b).  Pub. L. 88–272 , §§\u202f113(b)(1), (3), 201(d)(12), substituted “$19,000 in the case of a taxable year beginning in 1964 or more than $21,200 in the case of a taxable year beginning after 1964” for “$15,400”, “the credit under section 35” for “the sum of the credits under sections 34 and 35” in text, and “Regular tax” for “and gross income of more than $15,400” in heading.\n1961—Subsecs. (d), (e).  Pub. L. 87–256  added subsec. (d) and redesignated former subsec. (d) as (e).\n1960—Subsec. (d).  Pub. L. 86–437  substituted “Cross references” for “Doubling of tax” in heading, and inserted cross reference to section 402(a)(4).\n1958—Subsec. (a)(1).  Pub. L. 85–866, §\u202f40(a) , inserted “section 403(a)(2),” after “section 402(a)(2),”.\nSubsec. (b).  Pub. L. 85–866, §\u202f41(a) , inserted last par. covering former provisions of par. (3), which was struck out by the amendment, and containing new provisions with references to credits under section 34 and 35 and exclusion under  section 116 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f125(b) ,  Dec. 18, 2015 ,  129 Stat. 3054 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f132(b) ,  Dec. 19, 2014 ,  128 Stat. 4018 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nAmendment by  section 221(a)(71) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 112–240, title III, §\u202f320(b) ,  Jan. 2, 2013 ,  126 Stat. 2332 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nAmendment by  section 301(f) of Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 301(h) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nAmendment by  section 302(b)(2) of Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 302(c) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nAmendment by  section 308(b)(3) of Pub. L. 111–325  applicable to taxable years beginning after  Dec. 22, 2010 , see  section 308(c) of Pub. L. 111–325 , set out as a note under  section 852 of this title .\nPub. L. 111–312, title VII, §\u202f748(b) ,  Dec. 17, 2010 ,  124 Stat. 3320 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2009 .”\nAmendment by  Pub. L. 111–226  applicable to taxable years beginning after  Dec. 31, 2010 , with certain exceptions, see  section 217(d) of Pub. L. 111–226 , set out as a note under  section 861 of this title .\nAmendment by section 502(b)(1), (2)(A) of  Pub. L. 111–147  applicable to obligations issued after the date which is 2 years after  Mar. 18, 2010 , see  section 502(f) of Pub. L. 111–147 , set out as a note under  section 149 of this title .\nPub. L. 111–147, title V, §\u202f541(b) ,  Mar. 18, 2010 ,  124 Stat. 117 , provided that:  “The amendments made by this section [amending this section] shall apply to payments made on or after the date that is 180 days after the date of the enactment of this Act [ Mar. 18, 2010 ].”\nPub. L. 110–343, div. C, title II, §\u202f206(c) ,  Oct. 3, 2008 ,  122 Stat. 3865 , provided that:  “The amendments made by this section [amending this section] shall apply to dividends with respect to taxable years of regulated investment companies beginning after  December 31, 2007 .”\nAmendment by  Pub. L. 109–222  applicable to taxable years of qualified investment entities beginning after  December 31, 2005 , except that no amount shall be required to be withheld under section 1441, 1442, or 1445 of the Internal Revenue Code of 1986 with respect to any distribution before  May 17, 2006  if such amount was not otherwise required to be withheld under any such section as in effect before such amendments, see  section 505(d) of Pub. L. 109–222 , set out as a note under  section 852 of this title .\nPub. L. 108–357, title IV, §\u202f409(b) ,  Oct. 22, 2004 ,  118 Stat. 1500 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made after  December 31, 2004 .”\nPub. L. 108–357, title IV, §\u202f411(d) ,  Oct. 22, 2004 ,  118 Stat. 1505 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 881, 897, 1441, 1442, and 2105 of this title] shall apply to dividends with respect to taxable years of regulated investment companies beginning after  December 31, 2004 . \n \n “(2)   Estate tax treatment .— The amendment made by subsection (b) [amending  section 2105 of this title ] shall apply to estates of decedents dying after  December 31, 2004 . \n \n “(3)   Certain other provisions .— The amendments made by subsection (c) [amending  section 897 of this title ] (other than paragraph (1) thereof) shall take effect after  December 31, 2004 .”\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  section 1401(b)(10) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nAmendment by  section 1954(b)(1) of Pub. L. 104–188  applicable to articles entered on or after  Oct. 1, 1996 , with provisions relating to retroactive application, see  section 1953 of Pub. L. 104–188 , set out as an Effective Date note under  section 2461 of Title 19 , Customs Duties.\nPub. L. 103–465, title VII, §\u202f733(b) ,  Dec. 8, 1994 ,  108 Stat. 5006 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to benefits paid after  December 31, 1994 , in taxable years ending after such date.”\nPub. L. 103–296, title III, §\u202f320(c) ,  Aug. 15, 1994 ,  108 Stat. 1535 , provided that:  “The amendments made by this subsection [probably means this section, which amended this section, sections 872, 1441, 3121, 3231, 3306, and 7701 of this title, and  section 410 of Title 42 , The Public Health and Welfare] shall take effect with the calendar quarter following the date of the enactment of this Act [ Aug. 15, 1994 ].”\nAmendment by  section 13113(d)(5) of Pub. L. 103–66  applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as a note under  section 53 of this title .\nPub. L. 103–66, title XIII, §\u202f13237(d) ,  Aug. 10, 1993 ,  107 Stat. 508 , provided that:  “The amendments made by this section [amending this section and sections 881, 1441, 1442, and 2105 of this title] shall apply to interest received after  December 31, 1993 ; except that the amendments made by subsection (b) [amending  section 2105 of this title ] shall apply to the estates of decedents dying after  December 31, 1993 .”\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 1001(d)(2)(B) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6134(b) ,  Nov. 10, 1988 ,  102 Stat. 3721 , provided that:  “The amendments made by subsection (a) [amending this section and  section 1441 of this title ] shall take effect on the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by  section 301(b)(9) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by section 1211(b)(4), (5) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nAmendment by  section 1214(c)(1) of Pub. L. 99–514  applicable to payments made in taxable year of payor beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1214(d) of Pub. L. 99–514 , as amended, set out as a note under  section 861 of this title .\nAmendment by section 1810(d)(1)(A), (2), (3)(A), (B), (e)(2)(A) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–272, title XII, §\u202f12103(c) ,  Apr. 7, 1986 ,  100 Stat. 285 , provided that:  “The amendments made by this section [amending this section and  section 932 of this title ] shall apply to benefits received after  December 31, 1983 , in taxable years ending after such date.”\nAmendment by  section 42(a)(9) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nPub. L. 98–369, div. A, title I, §\u202f127(g) ,  July 18, 1984 ,  98 Stat. 652 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 ;  Pub. L. 100–647, title VI, §\u202f6128(a) ,  Nov. 10, 1988 ,  102 Stat. 3716 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 163, 864, 881, 1441, 1442, and 2105 of this title] shall apply to interest received after the date of the enactment of this Act [ July 18, 1984 ] with respect to obligations issued after such date, in taxable years ending after such date. \n \n “(2)   Subsection  (d).— The amendment made by subsection (d) [amending  section 2105 of this title ] shall apply to obligations issued after the date of the enactment of this Act [ July 18, 1984 ] with respect to the estates of decedents dying after such date. \n \n “(3)   Special rule for certain united states affiliate obligations.— “(A)   In general .— For purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], payments of interest on a United States affiliate obligation to an applicable CFC in existence on or before  June 22, 1984 , shall be treated as payments to a resident of the country in which the applicable CFC is incorporated. \n \n “(B)   Exception .— Subparagraph (A) shall not apply to any applicable CFC which did not meet requirements which are based on the principles set forth in Revenue Rulings 69–501, 69–377, 70–645, and 73–110 as such principles are applied in Revenue Ruling 86–6, except that the maximum debt-to-equity ratio described in such Revenue Rulings shall be increased from 5-to-1 to 25-to-1. \n \n “(C)   Definitions.— “(i)  The term ‘applicable CFC’ has the meaning given such term by section 121(b)(2)(D) of this Act [set out as a note under  section 904 of this title ], except that such section shall be applied by substituting ‘the date of interest payment’ for ‘ March 31, 1984 ,’ in clause (i) thereof. \n \n “(ii)  The term ‘United States affiliate obligation’ means an obligation described in section 121(b)(2)(F) of this Act [set out as a note under  section 904 of this title ] which was issued before  June 22, 1984 .”\n[ Pub. L. 100–647, title VI, §\u202f6128(b) ,  Nov. 10, 1988 ,  102 Stat. 3716 , provided that:  “The amendment made by subsection (a) [amending  section 127(g) of Pub. L. 98–369 , set out above] shall apply to taxable years ending after the date of the enactment of this Act [ Nov. 10, 1988 ].” \n]\nPub. L. 98–369, div. A, title I, §\u202f128(d) ,  July 18, 1984 ,  98 Stat. 655 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 163 and 881 of this title] shall apply to payments made on or after the 60th day after the date of the enactment of this Act [ July 18, 1984 ] with respect to obligations issued after  March 31, 1972 . \n \n “(2)   Subsection  (c).— The amendment made by subsection (c) [amending  section 163 of this title ] shall apply to obligations issued after  June 9, 1984 .”\nAmendment by  section 412(b)(1) of Pub. L. 98–369  applicable with respect to taxable years beginning after  Dec. 31, 1984 , see  section 414(a)(1) of Pub. L. 98–369 , set out as a note under  section 6654 of this title .\nAmendment by  section 121(c)(1) of Pub. L. 98–21  applicable to benefits received after  Dec. 31, 1983 , in taxable years ending after such date, except for any portion of a lump-sum payment of social security benefits received after  Dec. 31, 1983 , if the generally applicable payment date for such portion was before  Jan. 1, 1984 , see  section 121(g) of Pub. L. 98–21 , set out as an Effective Date note under  section 86 of this title .\nPub. L. 97–34, title VII, §\u202f725(d) ,  Aug. 13, 1981 ,  95 Stat. 346 , provided that:  “The amendments made by this section [amending this section and sections 6015, 6153, 6654, and 7701 of this title] shall apply to estimated tax for taxable years beginning after  December 31, 1980 .”\nPub. L. 96–605, title II, §\u202f227(b) ,  Dec. 28, 1980 ,  94 Stat. 3530 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts received after  July 1, 1979 .”\nAmendment by  Pub. L. 96–499  applicable to dispositions after  June 18, 1980 , see  section 1125(a) of Pub. L. 96–499 , set out as an Effective Date note under  section 897 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 401(b)(3) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 401(c) of Pub. L. 95–600 , set out as a note under  section 3 of this title .\nAmendment by  section 421(e)(4) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 421(g) of Pub. L. 95–600 , set out as a note under  section 5 of this title .\nAmendment by  section 1012(a)(2) of Pub. L. 94–455  applicable to taxable years ending on or after  Dec. 31, 1975 , see  section 1012(d) of Pub. L. 94–455 , set out as a note under  section 6013 of this title .\nAmendment by  section 1901(b)(3)(I) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nPub. L. 92–178, title III, §\u202f313(f) ,  Dec. 10, 1971 ,  85 Stat. 528 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments to section 871 and 881 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] made by this section shall apply with respect to taxable years beginning after  December 31, 1966 . The amendments to sections 1441 and 1442 of such Code made by this section shall apply with respect to payments occurring on or after  April 1, 1972 .”\nPub. L. 89–809, title I, §\u202f103(n) ,  Nov. 13, 1966 ,  80 Stat. 1555 , provided that: \n “(1)  The amendments made by this section (other than the amendments made by subsections (h), (i), and (k)) [amending this section and sections 1, 116, 154, 872 to 874, 875, 932, 6015, and 7701 of this title, redesignating section 877 as 878, enacting  section 877 of this title , and repealing  section 1493 of this title ] shall apply with respect to taxable years beginning after  December 31, 1966 . \n \n “(2)  The amendments made by subsection (h) [amending  section 1441 of this title ] shall apply with respect to payments made in taxable years of recipients beginning after  December 31, 1966 . \n \n “(3)  The amendments made by subsection (i) [amending  section 1461 of this title ] shall apply with respect to payments occurring after  December 31, 1966 . \n \n “(4)  The amendments made by subsection (k) [amending  section 3401 of this title ] shall apply with respect to remuneration paid after  December 31, 1966 .”\nAmendment by  section 113(b)(1) of Pub. L. 88–272  effective, except for purposes of  section 21 of this title , with respect to taxable years beginning after  Dec. 31, 1963 , see  section 131 of Pub. L. 88–272 , set out as a note under  section 1 of this title .\nAmendment by  section 201(d)(12) of Pub. L. 88–272  applicable with respect to dividends received after  Dec. 31, 1964 , in taxable years ending after such date, see  section 201(e) of Pub. L. 88–272 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 87–256  applicable to taxable years beginning after  Dec. 31, 1961 , see  section 110(h)(1) of Pub. L. 87–256 , set out as a note under  section 117 of this title .\nAmendment by  Pub. L. 86–437  applicable only with respect to taxable years beginning after  Dec. 31, 1959 , see  section 3 of Pub. L. 86–437 , set out as a note under  section 402 of this title .\nPub. L. 85–866, title I, §\u202f40(c) ,  Sept. 2, 1958 ,  72 Stat. 1639 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply only with respect to taxable years ending after the date of the enactment of this Act [ Sept. 2, 1958 ]. The amendments made by subsection (b) [amending  section 1441 of this title ] shall take effect on the day following the date of the enactment of this Act [ Sept. 2, 1958 ].”\nPub. L. 85–866, title I, §\u202f41(c) ,  Sept. 2, 1958 ,  72 Stat. 1639 , provided that:  “The amendments made by this section [amending this section and  section 35 of this title ] shall apply only with respect to taxable years beginning after  December 31, 1957 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor nonapplication of amendments by sections 1211(b)(4), (5) and 1214(c)(1) of  Pub. L. 99–514  to the extent application of such amendments would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'Gross income derived by an individual resident of a foreign country from the international operation of a ship or ships if such foreign country grants an equivalent exemption to individual residents of the United States.\nGross income derived by an individual resident of a foreign country from the international operation of aircraft if such foreign country grants an equivalent exemption to individual residents of the United States.\nIncome derived by a nonresident alien individual from a series E or series H United States savings bond, if such individual acquired such bond while a resident of the Ryukyu Islands or the Trust Territory of the Pacific Islands.\nGross income derived by a nonresident alien individual from a legal wagering transaction initiated outside the United States in a parimutuel pool with respect to a live horse race or dog race in the United States.\nIncome to which paragraphs (1) and (2) apply shall include income which is derived from the rental on a full or bareboat basis of a ship or ships or aircraft, as the case may be.\nThe Secretary may provide that this subsection be applied separately with respect to income from different types of transportation.\nTo the extent provided in regulations, a possession of the United States shall be treated as a foreign country for purposes of this subsection.\nSection 101 of the Immigration and Nationality Act, referred to in subsec. (b)(3), is classified to  section 1101 of Title 8 , Aliens and Nationality.\n2004—Subsec. (b)(5) to (8).  Pub. L. 108–357  added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.\n1994—Subsec. (b)(3).  Pub. L. 103–296  substituted “(F), (J), or (Q)” for “(F) or (J)”.\n1989—Subsec. (b)(7).  Pub. L. 101–239  added par. (7).\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1012(s)(2)(A) , inserted “,\u2000except where the context clearly indicates otherwise” after “individual”.\nSubsec. (b)(1), (2).  Pub. L. 100–647, §\u202f1012(e)(2)(B) , (5), substituted “to individual residents of the United States” for “to citizens of the United States and to corporations organized in the United States” and “international operation” for “operation”.\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1212(c)(1) , added par. (1) and struck out former par. (1), ships under foreign flag, which read as follows: “Earnings derived from the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States.”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1212(c)(1) , added par. (2) and struck out former par. (2), aircraft of foreign registry, which read as follows: “Earnings derived from the operation of aircraft registered under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States.”\nSubsec. (b)(5), (6).  Pub. L. 99–514, §\u202f1212(c)(2) , added pars. (5) and (6).\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f103(b)(1) , limited the inclusion of gross income which is derived from sources within the United States to such income which is not effectively connected with the conduct of a trade or business within the United States and inserted provision including gross income without the limitation as to source which is effectively connected with the conduct of a trade or business within the United States.\nSubsec. (b)(3)(B).  Pub. L. 89–809, §\u202f103(b)(2) , substituted “by a domestic corporation, a domestic partnership, or an individual who is a citizen or resident of the United States” for “by a domestic corporation”.\nSubsec. (b)(4).  Pub. L. 89–809, §\u202f102(b)(3) , added par. (4).\n1961—Subsec. (b)(3).  Pub. L. 87–256  added par. (3).\nPub. L. 108–357, title IV, §\u202f419(c) ,  Oct. 22, 2004 ,  118 Stat. 1513 , provided that:  “The amendments made by this section [amending this section and  section 883 of this title ] shall apply to wagers made after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 103–296  effective with calendar quarter following  Aug. 15, 1994 , see  section 320(c) of Pub. L. 103–296 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1212(f) of Pub. L. 99–514 , set out as a note under  section 863 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 87–256  applicable to taxable years beginning after  Dec. 31, 1961 , see  section 110(h)(1) of Pub. L. 87–256 , set out as a note under  section 117 of this title .\nFor nonapplication of amendment by section 1212(c)(1), (2) of  Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor termination of Trust Territory of the Pacific Islands, see note set out preceding  section 1681 of Title 48 , Territories and Insular Possessions.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'In the case of a nonresident alien individual, the deductions shall be allowed only for purposes of section 871(b) and (except as provided by subsection (b)) only if and to the extent that they are connected with income which is effectively connected with the conduct of a trade or business within the United States; and the proper apportionment and allocation of the deductions for this purpose shall be determined as provided in regulations prescribed by the Secretary.\nThe deduction allowed by section 165 for casualty or theft losses described in paragraph (2) or (3) of section 165(c), but only if the loss is of property located within the United States.\nThe deduction for charitable contributions and gifts allowed by section 170.\nThe deduction for personal exemptions allowed by section 151, except that only one exemption shall be allowed under section 151 unless the taxpayer is a resident of a contiguous country or is a national of the United States.\nFor rule that certain foreign taxes are not to be taken into account in determining deduction or credit, see section 906(b)(1).\n1998—Subsec. (b)(1).  Pub. L. 105–277  amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The deduction for losses allowed by section 165(c)(3), but only if the loss is of property located within the United States.”\n1984—Subsec. (b)(1).  Pub. L. 98–369  substituted “for losses” for “,\u2000for losses of property not connected with the trade or business if arising from certain casualties or theft,”.\n1977—Subsec. (c).  Pub. L. 95–30  struck out par. (1) which made a cross reference to section 142(b)(1) for disallowance of the standard deduction and struck out “(2)” at beginning of single remaining cross reference.\n1976—Subsec. (a).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1972—Subsec. (b)(3).  Pub. L. 92–580  substituted exception that only one exemption be allowed under section 151 unless the taxpayer is a resident of a contiguous country or is a national of the United States, for exception that in the case of a non-resident alien individual who is not a resident of a contiguous country only one exception be allowed under section 151.\n1966— Pub. L. 89–809  amended section generally, substituting “connected with income which is effectively connected with the conduct of a trade or business within the United States” for “connected with income from sources within the United States” in subsec. (a), striking out provisions relating to the deduction of losses not connected with a trade or business but incurred in transactions entered into for profit in subsec. (b), making the casualty loss deduction available even if the property giving rise to the loss is not effectively connected with the conduct of a trade or business in the United States if the property is located in this country, making the charitable contribution deduction available even though not related to the trade or business, and adding subsec. (c)(2) making a cross reference to section 906(b)(1) for rule that certain foreign taxes are not to be taken into account in determining deduction or credit.\nAmendment by  Pub. L. 105–277  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 4004(c)(1) of Pub. L. 105–277 , set out as a note under  section 172 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 711(c)(2)(A)(v) of Pub. L. 98–369 , set out as a note under  section 165 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 92–580  applicable to taxable years beginning after  Dec. 31, 1971 , see  section 1(c) of Pub. L. 92–580 , set out as a note under  section 152 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as a note under  section 871 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'A nonresident alien individual shall receive the benefit of the deductions and credits allowed to him in this subtitle only by filing or causing to be filed with the Secretary a true and accurate return, in the manner prescribed in subtitle F (sec. 6001 and following, relating to procedure and administration), including therein all the information which the Secretary may deem necessary for the calculation of such deductions and credits. This subsection shall not be construed to deny the credits provided by sections 31 and 33 for tax withheld at source or the credit provided by section 34 for certain uses of gasoline and special fuels.\nThe benefit of the deduction for exemptions under section 151 may, in the discretion of the Secretary, and under regulations prescribed by the Secretary, be received by a non-resident alien individual entitled thereto, by filing a claim therefor with the withholding agent.\nExcept as provided in section 906, a nonresident alien individual shall not be allowed the credits against the tax for taxes of foreign countries and possessions of the United States allowed by section 901.\n1984—Subsec. (a).  Pub. L. 98–369  substituted reference to section “33” for “32” and “34” for “39”.\n1983—Subsec. (a).  Pub. L. 97–424  substituted “and special fuels” for “,\u2000special fuels, and lubricating oil”.\n1976—Subsecs. (a), (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1970—Subsec. (a).  Pub. L. 91–258  included provision against construction of subsec. (a) to deny credit provided by section 39 for certain uses of special fuels.\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f103(d) , struck out “of his total income received from all sources in the United States” after “true and accurate return”.\nSubsec. (c).  Pub. L. 89–809, §\u202f106(a)(3) , substituted “Foreign tax credit” for “Foreign tax credit not allowed” in heading and inserted reference to an exception provided in section 906.\n1965—Subsec. (a).  Pub. L. 89–44  inserted “or the credit provided by section 39 for certain uses of gasoline and lubricating oil”.\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–424  applicable with respect to articles sold after  Jan. 6, 1983 , see  section 515(c) of Pub. L. 97–424 , set out as a note under  section 34 of this title .\nAmendment by  Pub. L. 91–258  effective  July 1, 1970 , see  section 211(a) of Pub. L. 91–258 , set out as a note under  section 4041 of this title .\nAmendment by  section 103(d) of Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as a note under  section 871 of this title .\nPub. L. 89–809, title I, §\u202f106(a)(6) ,  Nov. 13, 1966 ,  80 Stat. 1569 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this subsection [enacting  section 906 of this title  and amending this section and  section 901 of this title ] shall apply with respect to taxable years beginning after  Dec. 31, 1966 . In applying section 904 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to section 906 of such Code, no amount may be carried from or to any taxable year beginning before  Jan. 1, 1967 , and no such year shall be taken into account.”\nAmendment by  Pub. L. 89–44  applicable to taxable years beginning on or after  July 1, 1965 , see  section 809(f) of Pub. L. 89–44 , set out as a note under  section 6420 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': '1966— Pub. L. 89–809  designated existing provisions as par. (1), substituted reference to nonresident alien individuals or foreign corporations for reference simply to nonresident alien individuals, and added par. (2).\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as a note under  section 871 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'This subpart shall not apply to any alien individual who is a bona fide resident of Puerto Rico, Guam, American Samoa, or the Northern Mariana Islands during the entire taxable year and such alien shall be subject to the tax imposed by section 1.\n1986— Pub. L. 99–514, §\u202f1272(b) , inserted “,\u2000Guam, American Samoa, or the Northern Mariana Islands” in section catchline.\nSubsec. (a).  Pub. L. 99–514, §\u202f1272(b) , amended subsec. (a) generally, substituting “General rule” for “No application to certain alien residents of Puerto Rico” in heading and inserting references to residents of Guam, American Samoa, and the Northern Mariana Islands in text.\nSubsec. (b).  Pub. L. 99–514, §\u202f1272(b) , amended subsec. (b) generally, inserting references to Guam, American Samoa, and the Northern Mariana Islands.\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title ..'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'Every nonresident alien individual to whom this section applies and who, within the 10-year period immediately preceding the close of the taxable year, lost United States citizenship shall be taxable for such taxable year in the manner provided in subsection (b) if the tax imposed pursuant to such subsection (after any reduction in such tax under the last sentence of such subsection) exceeds the tax which, without regard to this section, is imposed pursuant to section 871.\nSubparagraphs (A) and (B) of subsection (a)(2) shall not apply to an individual described in paragraph (2) or (3).\nGains on the sale or exchange of property (other than stock or debt obligations) located in the United States.\nGains on the sale or exchange of stock issued by a domestic corporation or debt obligations of United States persons or of the United States, a State or political subdivision thereof, or the District of Columbia.\nIn the case of any exchange of property to which this paragraph applies, notwithstanding any other provision of this title, such property shall be treated as sold for its fair market value on the date of such exchange, and any gain shall be recognized for the taxable year which includes such date.\nSubparagraph (A) shall not apply if the individual enters into an agreement with the Secretary which specifies that any income or gain derived from the property acquired in the exchange (or any other property which has a basis determined in whole or part by reference to such property) during such 10-year period shall be treated as from sources within the United States. If the property transferred in the exchange is disposed of by the person acquiring such property, such agreement shall terminate and any gain which was not recognized by reason of such agreement shall be recognized as of the date of such disposition.\nTo the extent provided in regulations prescribed by the Secretary, subparagraph (B) shall be applied by substituting the 15-year period beginning 5 years before the loss of United States citizenship for the 10-year period referred to therein. In the case of any exchange occurring during such 5 years, any gain recognized under this subparagraph shall be recognized immediately after such loss of citizenship.\nIf stock in the corporation referred to in subparagraph (A) (or any other stock which has a basis determined in whole or part by reference to such stock) is disposed of during the 10-year period referred to in subsection (a) and while the property referred to in subparagraph (A) is held by such corporation, a pro rata share of such property (determined on the basis of the value of such stock) shall be treated as sold by the corporation immediately before such disposition.\nThe Secretary shall require such information reporting as is necessary to carry out the purposes of this paragraph.\nAny long-term resident of the United States who ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)) shall be treated for purposes of this section and sections 2107, 2501, and 6039G in the same manner as if such resident were a citizen of the United States who lost United States citizenship on the date of such cessation or commencement.\nFor purposes of this subsection, the term “long-term resident” means any individual (other than a citizen of the United States) who is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the event described in paragraph (1) occurs. For purposes of the preceding sentence, an individual shall not be treated as a lawful permanent resident for any taxable year if such individual is treated as a resident of a foreign country for the taxable year under the provisions of a tax treaty between the United States and the foreign country and does not waive the benefits of such treaty applicable to residents of the foreign country.\nSubsection (c) shall not apply to an individual who is treated as provided in paragraph (1).\nSolely for purposes of determining any tax imposed by reason of this subsection, property which was held by the long-term resident on the date the individual first became a resident of the United States shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable.\nThis subsection shall not apply to an individual who is described in a category of individuals prescribed by regulation by the Secretary.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out this subsection, including regulations providing for the application of this subsection in cases where an alien individual becomes a resident of the United States during the 10-year period after being treated as provided in paragraph (1).\nIf the Secretary establishes that it is reasonable to believe that an individual’s loss of United States citizenship would, but for this section, result in a substantial reduction for the taxable year in the taxes on his probable income for such year, the burden of proving for such taxable year that such loss of citizenship did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle B shall be on such individual.\nThis section shall not apply to any individual to whom this section would otherwise apply for any taxable year during the 10-year period referred to in subsection (a) in which such individual is physically present in the United States at any time on more than 30 days in the calendar year ending in such taxable year, and such individual shall be treated for purposes of this title as a citizen or resident of the United States, as the case may be, for such taxable year.\nAn individual is described in this subparagraph if, for each year in the 10-year period ending on the date of loss of United States citizenship or termination of residency, the individual was physically present in the United States for 30 days or less. The rule of section 7701(b)(3)(D) shall apply for purposes of this subparagraph.\nThis section shall not apply to any individual whose expatriation date (as defined in section 877A(g)(3)) is on or after the date of the enactment of this subsection.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of this subsection, referred to in subsec. (h), is the date of enactment of  Pub. L. 110–245 , which was approved  June 17, 2008 .\nA prior section 877 was renumbered  section 878 of this title .\n2018—Subsec. (d)(4)(B)(i).  Pub. L. 115–141  substituted “in section 957” for “in 957”.\n2014—Subsec. (e)(2).  Pub. L. 113–295  struck out “subparagraph (A) or (B) of” after “event described in”.\n2008—Subsec. (e)(1).  Pub. L. 110–245, §\u202f301(c)(2)(A) , amended par. (1) generally. Prior to amendment, text read as follows: “Any long-term resident of the United States who—\n“(A) ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)), or\n“(B) commences to be treated as a resident of a foreign country under the provisions of a tax treaty between the United States and the foreign country and who does not waive the benefits of such treaty applicable to residents of the foreign country,\nshall be treated for purposes of this section and sections 2107, 2501, and 6039G in the same manner as if such resident were a citizen of the United States who lost United States citizenship on the date of such cessation or commencement.”\nSubsec. (h).  Pub. L. 110–245, §\u202f301(d) , added subsec. (h).\n2005—Subsec. (g)(2)(C).  Pub. L. 109–135  substituted “section 7701(b)(3)(D)” for “section 7701(b)(3)(D)(ii)”.\n2004—Subsec. (a).  Pub. L. 108–357, §\u202f804(a)(1) , reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, subsec. (a) stated general rule on taxation of nonresident alien individuals who lost United States citizenship and provided that an individual would be treated as having a tax avoidance purpose if the average annual net income tax was greater than $100,000 or the net worth of the individual was $500,000 or more.\nSubsec. (c).  Pub. L. 108–357, §\u202f804(a)(2) , amended heading and text of subsec. (c) generally, substituting provisions setting forth exceptions for dual citizens and certain minors for provisions relating to inapplicability of presumption of tax avoidance to dual citizens, long-term foreign residents, minors who renounced citizenship upon reaching age of majority, and individuals specified in regulations.\nSubsec. (g).  Pub. L. 108–357, §\u202f804(c) , added subsec. (g).\n1997—Subsec. (d)(2)(B).  Pub. L. 105–34, §\u202f1602(g)(1) , substituted “the 10-year period beginning on the date the individual loses United States citizenship” for “the 10-year period described in subsection (a)” in introductory provisions.\nSubsec. (d)(2)(D).  Pub. L. 105–34, §\u202f1602(g)(2) , inserted at end “In the case of any exchange occurring during such 5 years, any gain recognized under this subparagraph shall be recognized immediately after such loss of citizenship.”\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f1602(g)(3) , inserted “and the period applicable under paragraph (2)” after “subsection (a)” in introductory provisions.\nSubsec. (d)(4)(A).  Pub. L. 105–34, §\u202f1602(g)(4)(C) , struck out “during the 10-year period referred to in subsection (a),” before “any income or gain” in concluding provisions.\nSubsec. (d)(4)(A)(i).  Pub. L. 105–34, §\u202f1602(g)(4)(A) , inserted “during the 10-year period beginning on the date the individual loses United States citizenship” after “contributes property”.\nSubsec. (d)(4)(A)(ii).  Pub. L. 105–34, §\u202f1602(g)(4)(B) , inserted “immediately before such contribution” after “from such property”.\nSubsec. (e)(1).  Pub. L. 105–34, §\u202f1602(h)(3) , substituted “6039G” for “6039F” in concluding provisions.\n1996—Subsec. (a).  Pub. L. 104–191, §\u202f511(a) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows:\n“(a)  In General .—Every nonresident alien individual who at any time after  March 8, 1965 , and within the 10-year period immediately preceding the close of the taxable year lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle B, shall be taxable for such taxable year in the manner provided in subsection (b) if the tax imposed pursuant to such subsection exceeds the tax which, without regard to this section, is imposed pursuant to section 871.”\nSubsec. (a)(1).  Pub. L. 104–191, §\u202f511(d)(2) , inserted “(after any reduction in such tax under the last sentence of such subsection)” after “such subsection”.\nSubsec. (b).  Pub. L. 104–191, §\u202f511(d)(1) , inserted at end “The tax imposed solely by reason of this section shall be reduced (but not below zero) by the amount of any income, war profits, and excess profits taxes (within the meaning of section 903) paid to any foreign country or possession of the United States on any income of the taxpayer on which tax is imposed solely by reason of this section.”\nPub. L. 104–188  substituted “section 1 or 55” for “section 1, 55, or 402(d)(1)”.\nSubsec. (b)(1).  Pub. L. 104–191, §\u202f511(b)(2) , substituted “subsection (d)” for “subsection (c)”.\nSubsec. (c).  Pub. L. 104–191, §\u202f511(b)(1) , added subsec. (c). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 104–191, §\u202f511(c) , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows:\n“(d)  Special Rules of Source .—For purposes of subsection (b), the following items of gross income shall be treated as income from sources within the United States:\n“(1)  Sale of property .—Gains on the sale or exchange of property (other than stock or debt obligations) located in the United States.\n“(2)  Stock or debt obligations .—Gains on the sale or exchange of stock issued by a domestic corporation or debt obligations of United States persons or of the United States, a State or political subdivision thereof, or the District of Columbia.\nFor purposes of this section, gain on the sale or exchange of property which has a basis determined in whole or in part by reference to property described in paragraph (1) or (2) shall be treated as gain described in paragraph (1) or (2).”\nPub. L. 104–191, §\u202f511(b)(1) , redesignated subsec. (c) as (d) and struck out former subsec. (d) which read as follows:\n“(d)  Exception for Loss of Citizenship for Certain Causes .—Subsection (a) shall not apply to a nonresident alien individual whose loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended ( 8 U.S.C. 1401(b) , 1482, or 1487).”\nSubsecs. (e), (f).  Pub. L. 104–191, §\u202f511(f)(1) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1992—Subsec. (b).  Pub. L. 102–318  substituted “402(d)(1)” for “402(e)(1)”.\n1986—Subsec. (c).  Pub. L. 99–514  inserted at end “For purposes of this section, gain on the sale or exchange of property which has a basis determined in whole or in part by reference to property described in paragraph (1) or (2) shall be treated as gain described in paragraph (1) or (2).”\n1980—Subsec. (b).  Pub. L. 96–222  substituted “55, or 402(e)(1)” for “section 55, 402(e)(1), or section 1201(b)”.\n1978—Subsec. (b).  Pub. L. 95–600  substituted “section 1, section 55,” for “section 1”.\n1976—Subsecs. (b)(2), (e).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1974—Subsec. (b).  Pub. L. 93–406  inserted reference to section 402(e)(1).\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008,  Pub. L. 110–245 , to which such amendment relates, see  section 213(d) of Pub. L. 113–295 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 110–245  applicable to any individual whose expatriation date is on or after  June 17, 2008 , see  section 301(g)(1) of Pub. L. 110–245 , set out as an Effective Date note under  section 2801 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title VIII, §\u202f804(f) ,  Oct. 22, 2004 ,  118 Stat. 1573 , provided that:  “The amendments made by this section [amending this section and sections 2107, 2501, 6039G, and 7701 of this title] shall apply to individuals who expatriate after  June 3, 2004 .”\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996,  Pub. L. 104–191 , to which such amendment relates, see  section 1602(i) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nPub. L. 104–191, title V, §\u202f511(g) ,  Aug. 21, 1996 ,  110 Stat. 2100 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 2107 and 2501 of this title] shall apply to— “(A)  individuals losing United States citizenship (within the meaning of section 877 of the Internal Revenue Code of 1986) on or after  February 6, 1995 , and \n \n “(B)  long-term residents of the United States with respect to whom an event described in [former] subparagraph (A) or (B) of section 877(e)(1) of such Code occurs on or after  February 6, 1995 . \n \n \n “(2)   Ruling requests .— In no event shall the 1-year period referred to in section 877(c)(1)(B) of such Code, as amended by this section, expire before the date which is 90 days after the date of the enactment of this Act [ Aug. 21, 1996 ]. \n \n “(3)   Special rule.— “(A)   In general .— In the case of an individual who performed an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act ( 8 U.S.C. 1481(a)(1) –(4)) before  February 6, 1995 , but who did not, on or before such date, furnish to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of such act, the amendments made by this section and section 512 [enacting  section 6039F of this title ] shall apply to such individual except that the 10-year period described in section 877(a) of such Code shall not expire before the end of the 10-year period beginning on the date such statement is so furnished. \n \n “(B)   Exception .— Subparagraph (A) shall not apply if the individual establishes to the satisfaction of the Secretary of the Treasury that such loss of United States citizenship occurred before  February 6, 1994 .”\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1999 , with retention of certain transition rules, see  section 1401(c) of Pub. L. 104–188 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nPub. L. 99–514, title XII, §\u202f1243(b) ,  Oct. 22, 1986 ,  100 Stat. 2581 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to sales or exchanges of property received in exchanges after  September 25, 1985 .”\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 421(g) of Pub. L. 95–600 , set out as a note under  section 5 of this title .\nAmendment by  Pub. L. 93–406  applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nSection applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as an Effective Date of 1966 Amendment note under  section 871 of this title .\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'All property of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market value.\nThe amount which would (but for this paragraph) be includible in the gross income of any individual by reason of paragraph (1) shall be reduced (but not below zero) by $600,000.\nIf any amount as adjusted under clause (i) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.\nIf the taxpayer elects the application of this subsection with respect to any property treated as sold by reason of subsection (a), the time for payment of the additional tax attributable to such property shall be extended until the due date of the return for the taxable year in which such property is disposed of (or, in the case of property disposed of in a transaction in which gain is not recognized in whole or in part, until such other date as the Secretary may prescribe).\nFor purposes of paragraph (1), the additional tax attributable to any property is an amount which bears the same ratio to the additional tax imposed by this chapter for the taxable year solely by reason of subsection (a) as the gain taken into account under subsection (a) with respect to such property bears to the total gain taken into account under subsection (a) with respect to all property to which subsection (a) applies.\nThe due date for payment of tax may not be extended under this subsection later than the due date for the return of tax imposed by this chapter for the taxable year which includes the date of death of the expatriate (or, if earlier, the time that the security provided with respect to the property fails to meet the requirements of paragraph (4), unless the taxpayer corrects such failure within the time specified by the Secretary).\nNo election may be made under paragraph (1) with respect to any property unless adequate security is provided with respect to such property.\nNo election may be made under paragraph (1) unless the taxpayer makes an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of any tax imposed by reason of this section.\nAn election under paragraph (1) shall only apply to property described in the election and, once made, is irrevocable.\nFor purposes of section 6601, the last date for the payment of tax shall be determined without regard to the election under this subsection.\nIn the case of any eligible deferred compensation item, the payor shall deduct and withhold from any taxable payment to a covered expatriate with respect to such item a tax equal to 30 percent thereof.\nFor purposes of subparagraph (A), the term “taxable payment” means with respect to a covered expatriate any payment to the extent it would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States. A deferred compensation item shall be taken into account as a payment under the preceding sentence when such item would be so includible.\nParagraphs (1) and (2) shall not apply to any deferred compensation item to the extent attributable to services performed outside the United States while the covered expatriate was not a citizen or resident of the United States.\nRules similar to the rules of subchapter B of chapter 3 shall apply for purposes of this subsection.\nAny item subject to the withholding tax imposed under paragraph (1) shall be subject to tax under section 871.\nAny item subject to withholding under paragraph (1) shall not be subject to withholding under section 1441 or chapter 24.\nFor purposes of paragraph (1), the term “specified tax deferred account” means an individual retirement plan (as defined in section 7701(a)(37)) other than any arrangement described in subsection (k) or (p) of section 408, a qualified tuition program (as defined in section 529), a qualified ABLE program (as defined in section 529A), a Coverdell education savings account (as defined in section 530), a health savings account (as defined in section 223), and an Archer MSA (as defined in section 220).\nFor purposes of this subsection, the term “taxable portion” means, with respect to any distribution, that portion of the distribution which would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States.\nFor purposes of this subsection, the term “nongrantor trust” means the portion of any trust that the individual is not considered the owner of under subpart E of part I of subchapter J. The determination under the preceding sentence shall be made immediately before the expatriation date.\nThis subsection shall apply to a nongrantor trust only if the covered expatriate was a beneficiary of the trust on the day before the expatriation date.\nThe term “covered expatriate” means an expatriate who meets the requirements of subparagraph (A), (B), or (C) of section 877(a)(2).\nIn the case of any covered expatriate who is subject to tax as a citizen or resident of the United States for any period beginning after the expatriation date, such individual shall not be treated as a covered expatriate during such period for purposes of subsections (d)(1) and (f) and section 2801.\nThe term “long-term resident” has the meaning given to such term by section 877(e)(2).\nThe term “early distribution tax” means any increase in tax imposed under section 72(t), 220(f)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), 529A(c)(3), or 530(d)(4).\nSolely for purposes of determining any tax imposed by reason of subsection (a), property which was held by an individual on the date the individual first became a resident of the United States (within the meaning of section 7701(b)) shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable.\nIf the expatriation of any individual would result in the recognition of gain under section 684, this section shall be applied after the application of section 684.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2018—Subsec. (g)(6).  Pub. L. 115–141  substituted “220(f)(4)” for “220(e)(4)”.\n2017—Subsec. (a)(3)(B)(i)(II).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B) thereof”.\n2014—Subsec. (e)(2).  Pub. L. 113–295, §\u202f102(e)(2)(A) , inserted “a qualified ABLE program (as defined in section 529A),” after “529),”.\nSubsec. (g)(6).  Pub. L. 113–295, §\u202f102(e)(2)(B) , inserted “529A(c)(3),” after “529(c)(6),”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 113–295  applicable to taxable years beginning after  Dec. 31, 2014 , see  section 102(f)(1) of Pub. L. 113–295 , set out as a note under  section 552a of Title 5 , Government Organization and Employees.\nSection applicable to any individual whose expatriation date is on or after  June 17, 2008 , see  section 301(g)(1) of Pub. L. 110–245 , set out as a note under  section 2801 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'For special provisions relating to foreign educational, charitable, and other exempt organizations, see sections 512(a) and 4948.\n1969— Pub. L. 91–172  substituted provisions requiring reference to organizations in sections 512(a) and 4948 for provisions requiring reference to trusts in section 512(a), and struck out reference to unrelated business income.\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 101(k)(2)(B) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'Subsection (a) shall not apply for any taxable year for which an election under subsection (g) or (h) of section 6013 (relating to election to treat nonresident alien individual as resident of the United States) is in effect.\nThe term “community income” means income which, under applicable community property laws, is treated as community income.\nThe term “community property laws” means the community property laws of a State, a foreign country, or a possession of the United States.\nThe determination of marital status shall be made under section 7703(a).\n1986—Subsec. (c)(3).  Pub. L. 99–514  substituted “section 7703(a)” for “section 143(a)”.\n1984— Pub. L. 98–369, §\u202f139(b)(1) , substituted “nonresident alien individuals” for “a resident or citizen of the United States who is married to a nonresident alien individual” in section catchline.\nSubsec. (a).  Pub. L. 98–369, §\u202f139(a) , substituted in provision preceding par. (1) “married couple 1 or both of whom are nonresident alien individuals” for “citizen or resident of the United States who is married to a nonresident alien individual”.\n1981—Subsec. (a)(1).  Pub. L. 97–34  substituted “section 911(d)(2)” for “section 911(b)”.\nAmendment by  Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nPub. L. 98–369, div. A, title I, §\u202f139(c) ,  July 18, 1984 ,  98 Stat. 677 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nAmendment by  Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1976 , see  section 1012(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 6013 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'If, on or after the date of the enactment of this paragraph, an increase in the rate of the Commonwealth of Puerto Rico’s withholding tax which is generally applicable to dividends paid to United States corporations not engaged in a trade or business in the Commonwealth to a rate greater than 10 percent takes effect, this paragraph shall not apply to dividends received on or after the effective date of the increase.\nFor purposes of paragraph (1), the rules of section 318(a)(2) shall apply except that “5 percent” shall be substituted for “50 percent” in subparagraph (C) thereof.\nIn the case of any portfolio interest received by a foreign corporation from sources within the United States, no tax shall be imposed under paragraph (1) or (3) of subsection (a).\nFor purposes of this subsection, the term “portfolio interest” shall not include any interest which is treated as not being portfolio interest under the rules of section 871(h)(4).\nFor purposes of this subsection, the term “controlled foreign corporation” has the meaning given to such term by section 957(a).\nUnder rules similar to the rules of section 871(h)(6), the Secretary may provide that this subsection shall not apply to payments of interest described in section 871(h)(6).\nFor purposes of this subsection, the term “registered form” has the meaning given such term by section 163(f).\nNo tax shall be imposed under paragraph (1) or (3) of subsection (a) on any amount described in section 871(i)(2).\nExcept as provided in subparagraph (B), no tax shall be imposed under paragraph (1) of subsection (a) on any interest-related dividend (as defined in section 871(k)(1)) received from a regulated investment company.\nThe rules of subsection (c)(5)(A) shall apply to any interest-related dividend received by a controlled foreign corporation (within the meaning of section 957(a)) to the extent such dividend is attributable to interest received by the regulated investment company which is described in clause (ii) of section 871(k)(1)(E) (and not described in clause (i) or (iii) of such section).\nNo tax shall be imposed under paragraph (1) of subsection (a) on any short-term capital gain dividend (as defined in section 871(k)(2)) received from a regulated investment company.\nFor doubling of tax on corporations of certain foreign countries, see section 891.\nFor special rules for original issue discount, see section 871(g).\nThe date of the enactment of this paragraph, referred to in subsec. (b)(2)(B), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\n2010—Subsec. (c)(2).  Pub. L. 111–147  amended par. (2) generally. Prior to amendment, par. (2) defined portfolio interest to also include interest on certain obligations not in registered form.\n2005—Subsec. (e)(1)(C).  Pub. L. 109–135  inserted “interest-related dividend received by a controlled foreign corporation” after “shall apply to any”.\n2004—Subsec. (b).  Pub. L. 108–357, §\u202f420(c)(1) , substituted “possessions” for “Guam and Virgin Islands corporations” in heading.\nSubsec. (b)(1).  Pub. L. 108–357, §\u202f420(c)(2) , substituted “Guam, American Samoa, the Northern Mariana Islands, and the Virgin Islands” for “In general” in heading.\nSubsec. (b)(2), (3).  Pub. L. 108–357, §\u202f420(a) , added par. (2) and redesignated former par. (2) as (3).\nSubsecs. (e), (f).  Pub. L. 108–357, §\u202f411(a)(2) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1993—Subsec. (c)(2)(B)(ii).  Pub. L. 103–66, §\u202f13237(c)(2) , substituted “section 871(h)(5)” for “section 871(h)(4)”.\nSubsec. (c)(4), (5).  Pub. L. 103–66, §\u202f13237(a)(2) , added par. (4) and redesignated former par. (4) as (5). Former par. (5) redesignated (6).\nSubsec. (c)(6).  Pub. L. 103–66, §\u202f13237(a)(2) , (c)(3), redesignated par. (5) as (6) and substituted “section 871(h)(6)” for “section 871(h)(5)” in two places. Former par. (6) redesignated (7).\nSubsec. (c)(7).  Pub. L. 103–66, §\u202f13237(a)(2) , redesignated par. (6) as (7).\n1988—Subsec. (c)(4)(A)(ii) to (v).  Pub. L. 100–647  added cls. (ii) and (iii) and struck out former cls. (ii) to (v), which read as follows:\n“(ii) Paragraph (4) of section 954(b) (relating to corporations not formed or availed of to avoid tax).\n“(iii) Subparagraph (B) of section 954(c)(3) (relating to certain income derived in active conduct of trade or business).\n“(iv) Subparagraph (C) of section 954(c)(3) (relating to certain income derived by an insurance company).\n“(v) Subparagraphs (A) and (B) of section 954(c)(4) (relating to exception for certain income received from related persons).”\n1986—Subsec. (a)(3)(A).  Pub. L. 99–514, §\u202f1810(e)(2)(B) , amended subpar. (A) generally, striking out “any gain not in excess of” before “the original issue discount”.\nSubsec. (a)(3)(B).  Pub. L. 99–514, §\u202f1810(e)(2)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the payment of interest on an original issue discount obligation, an amount equal to the original issue discount accrued on such obligation since the last payment of interest thereon (except that such original issue discount shall be taken into account under this subparagraph only to the extent that the tax thereon does not exceed the interest payment less the tax imposed by paragraph (1) thereon), and”.\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1211(b)(6) , struck out “or from payments which are treated as being so contingent under section 871(e),” after “sold or exchanged,”.\nSubsec. (b)(1).  Pub. L. 99–514, §\u202f1273(b)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “For purposes of this section, a corporation created or organized in Guam or the Virgin Islands or under the law of Guam or the Virgin Islands shall not be treated as a foreign corporation for any taxable year if—\n“(A) at all times during such taxable year less than 25 percent in value of the stock of such corporation is owned (directly or indirectly) by foreign persons, and\n“(B) at least 20 percent of the gross income of such corporation is shown to the satisfaction of the Secretary to have been derived from sources within Guam or the Virgin Islands (as the case may be) for the 3-year period ending with the close of the preceding taxable year of such corporation (or for such part of such period as the corporation has been in existence).”\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1273(b)(1) , (2)(A), redesignated par. (3) as (2) and struck out former par. (2) which provided that par. (1) of this subsection not apply with respect to income tax liability incurred to Guam.\nSubsec. (b)(2)(A).  Pub. L. 99–514, §\u202f1899A(22) , substituted “paragraph” for “Paragraph”.\nSubsec. (b)(3), (4).  Pub. L. 99–514, §\u202f1273(b)(2)(A) , redesignated par. (3) as (2) and struck out par. (4) which provided a cross reference to sections 934 and 934A.\nSubsec. (c).  Pub. L. 99–514, §\u202f1899A(68) , made clarifying amendment to directory language of  Pub. L. 98–369, §\u202f127(b)(1) . See 1984 Amendment note below.\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f1810(d)(1)(B) , (3)(C), inserted “which would be subject to tax under subsection (a) but for this subsection and” in introductory provisions and substituted “receives a statement” for “has received a statement” in subpar. (B)(ii).\nSubsec. (c)(3)(C).  Pub. L. 99–514, §\u202f1899A(23) , inserted a closing parenthesis following “section 864(d)(4)”.\nSubsec. (c)(4)(A)(i).  Pub. L. 99–514, §\u202f1223(b)(2) , substituted “less than 5 percent or $1,000,000” for “less than 10 percent”.\nSubsecs. (d), (e).  Pub. L. 99–514, §\u202f1214(c)(2) , added subsec. (d) and redesignated former subsec. (d) as (e).\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f127(b)(2) , substituted “Except as provided in subsection (c), there” for “There” in introductory provision.\nSubsec. (a)(1).  Pub. L. 98–369, §\u202f42(a)(10) , substituted “section 1273” for “section 1232(b)”.\nSubsec. (a)(3).  Pub. L. 98–369, §\u202f128(b)(1) , amended par. (3) generally, substituting in subpar. (A), “a sale or exchange of an original issue discount obligation, the amount of any gain not in excess of the original issue discount accruing while such obligation was held by the foreign corporation (to the extent such discount was not theretofore taken into account under subparagraph (B)), and” for “bonds or other evidences of indebtedness issued after  September 28, 1965 , and before  April 1, 1972 , amounts which under section 1232(a)(2)(B) are considered as ordinary income, and, in the case of corporate obligations issued after  May 27, 1969 , and before  April 1, 1972 , amounts which would be so considered but for the fact the obligations were issued after  May 27, 1969 ,”, substituting in subpar. (B), “the payment of interest on an original issue discount obligation, an amount equal to the original issue discount accrued on such obligation since the last payment of interest thereon (except that such original issue discount shall be taken into account under this subparagraph only to the extent that the tax thereon does not exceed the interest payment less the tax imposed by paragraph (1) thereon), and” for “bonds or other evidences of indebtedness issued after  March 31, 1972 , and payable more than 6 months from the date of original issue (without regard to the period held by the taxpayer), amounts which under section 1232(a)(2)(B) would be considered as ordinary income but for the fact such obligations were issued after  May 27, 1969 , and”, and striking out subpar. (C) which required that in the case of the payment of interest on an obligation described in subpar. (B), an amount equal to the original issue discount, but not in excess of such interest less the tax imposed by par. (1) thereon, accrued on such obligation since the last payment of interest thereon, be included for purpose of the 30 percent tax.\nSubsec. (b).  Pub. L. 98–369, §\u202f130(a) , amended subsec. (b) generally, substituting provision establishing an exception for certain Guam and Virgin Islands corporations for provision establishing an exception for Guam corporations.\nSubsec. (c).  Pub. L. 98–369, §\u202f127(b)(1) , as amended by  Pub. L. 99–514, §\u202f1899A(68) , added subsec. (c). Former subsec. (c) redesignated (d).\nPub. L. 98–369, §\u202f128(b)(2) , amended subsec. (c) generally, substituting in heading “Cross reference” for “Doubling of tax” and inserting provision directing that for special rules for original issue discount, see section 871(g).\nSubsec. (d).  Pub. L. 98–369, §\u202f127(b)(1) , as amended by  Pub. L. 99–514, §\u202f1899A(68) , redesignated subsec. (c) as (d).\n1976—Subsec. (a)(3)(A), (B).  Pub. L. 94–455  substituted “ordinary income” for “gain from the sale or exchange of property which is not a capital asset”.\n1972—Subsecs. (b), (c).  Pub. L. 92–606  added subsec. (b) and redesignated former subsec. (b) as (c).\n1971—Subsec. (a)(1).  Pub. L. 92–178, §\u202f313(a) , inserted “(other than original issue discount as defined in section 1232(b))” after “interest”.\nSubsec. (a)(3).  Pub. L. 92–178, §\u202f313(c) , designated existing provisions as subpar. (A), inserted “and before  April 1, 1972 ,” after “ September 28, 1965 ,”, substituted “section 1232(a)(2)(B)” for “section 1232”, and inserted “,\u2000in the case of corporate obligations issued after  May 27, 1969 , and before  April 1, 1972 , amounts which would be so considered but for the fact that the obligations were issued after  May 27, 1969 ,”, and added subpars. (B) and (C).\n1966—Subsec. (a).  Pub. L. 89–809  substantially revised the income tax treatment of foreign corporations, substituted the concept of amounts received from sources within the United States by foreign corporations but not effectively connected with the conduct of a trade or business within the United States for the concept of amounts received from sources within the United States by foreign corporations not engaged in trade or business within the United States as the amount upon which the existing 30 percent levy should be imposed, and added contingent income received from the sale of patents and other intangibles and amounts of original issue discount which are treated as ordinary income received on retirement or sale or exchange of bonds or other evidences of indebtedness issued after  Sept. 28, 1965 , to the specified types of fixed or determinable income.\nAmendment by  Pub. L. 111–147  applicable to obligations issued after the date which is 2 years after  Mar. 18, 2010 , see  section 502(f) of Pub. L. 111–147 , set out as a note under  section 149 of this title .\nAmendment by  section 411(a)(2) of Pub. L. 108–357  applicable to dividends with respect to taxable years of regulated investment companies beginning after  Dec. 31, 2004 , see  section 411(d)(1) of Pub. L. 108–357 , set out as a note under  section 871 of this title .\nPub. L. 108–357, title IV, §\u202f420(d) ,  Oct. 22, 2004 ,  118 Stat. 1514 , provided that:  “The amendments made by this section [amending this section and  section 1442 of this title ] shall apply to dividends paid after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 103–66  applicable to interest received after  Dec. 31, 1993 , see  section 13237(d) of Pub. L. 103–66 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1211(b)(6) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nAmendment by  section 1214(c)(2) of Pub. L. 99–514  applicable to payments made in taxable year of payor beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1214(d) of Pub. L. 99–514 , as amended, set out as a note under  section 861 of this title .\nAmendment by  section 1223(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1223(c) of Pub. L. 99–514 , set out as a note under  section 864 of this title .\nAmendment by section 1273(b)(1), (2)(A) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by section 1810(d)(1)(B), (3)(C), (e)(2)(B) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 42(a)(10) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  section 127(b) of Pub. L. 98–369  applicable to interest received after  July 18, 1984 , with respect to obligations issued after such date, in taxable years after such date, see  section 127(g)(1) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by  section 128(b) of Pub. L. 98–369  applicable to payments made on or after the 60th day after  July 18, 1984 , with respect to obligations issued after  Mar. 31, 1972 , see  section 128(d)(1) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nPub. L. 98–369, div. A, title I, §\u202f130(d) ,  July 18, 1984 ,  98 Stat. 661 , provided that:  “The amendments made by this section [amending this section and sections 1442 and 7651 of this title] shall apply to payments made after  March 1, 1984 , in taxable years ending after such date.”\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–606, §\u202f2 ,  Oct. 31, 1972 ,  86 Stat. 1497 , provided in part that:  “The amendments made by section 1(e)(1) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1971 .”\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 313(f) of Pub. L. 92–178 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nFor nonapplication of amendments by sections 1211(b)(6) and 1214(c)(2) of  Pub. L. 99–514  to the extent application of such amendments would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'A foreign corporation engaged in trade or business within the United States during the taxable year shall be taxable as provided in section 11, 55, or 59A, 1 1 \u202fSo in original. The comma probably should not appear.  on its taxable income which is effectively connected with the conduct of a trade or business within the United States.\nIn determining taxable income for purposes of paragraph (1), gross income includes only gross income which is effectively connected with the conduct of a trade or business within the United States.\nFor special tax treatment of gain or loss from the disposition by a foreign corporation of a United States real property interest, see section 897.\nIn the case of a foreign corporation, the deductions shall be allowed only for purposes of subsection (a) and (except as provided by subparagraph (B)) only if and to the extent that they are connected with income which is effectively connected with the conduct of a trade or business within the United States; and the proper apportionment and allocation of the deductions for this purpose shall be determined as provided in regulations prescribed by the Secretary.\nThe deduction for charitable contributions and gifts provided by section 170 shall be allowed whether or not connected with income which is effectively connected with the conduct of a trade or business within the United States.\nA foreign corporation shall receive the benefit of the deductions and credits allowed to it in this subtitle only by filing or causing to be filed with the Secretary a true and accurate return, in the manner prescribed in subtitle F, including therein all the information which the Secretary may deem necessary for the calculation of such deductions and credits. The preceding sentence shall not apply for purposes of the tax imposed by section 541 (relating to personal holding company tax), and shall not be construed to deny the credit provided by section 33 for tax withheld at source or the credit provided by section 34 for certain uses of gasoline.\nExcept as provided by section 906, foreign corporations shall not be allowed the credit against the tax for taxes of foreign countries and possessions of the United States allowed by section 901.\nFor rule that certain foreign taxes are not to be taken into account in determining deduction or credit, see section 906(b)(1).\nParagraphs (2) and (3) of section 871(d) shall apply in respect of elections under this subsection in the same manner and to the same extent as they apply in respect of elections under section 871(d).\nIf any foreign corporation has no office or place of business in the United States but has an agent in the United States, the return required under section 6012 shall be made by the agent.\n2022—Subsec. (a)(1).  Pub. L. 117–169  inserted “,\u200055,” after “section 11”.\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f14401(d)(2) , which directed insertion of “or 59A,” after “section 11,”, was executed by making the insertion after “section 11” to reflect the probable intent of Congress and the amendment by  Pub. L. 115–97, §\u202f12001(b)(14) . See below.\nPub. L. 115–97, §\u202f13001(b)(2)(L) , struck out “or 1201(a)” before “on its taxable income”.\nPub. L. 115–97, §\u202f12001(b)(14) , struck out “,\u200055,” after “section 11”.\n2014—Subsec. (a)(1).  Pub. L. 113–295  struck out “,\u200059A” after “section 11, 55”.\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f2001(c)(2) , inserted reference to section 59A.\nSubsec. (b).  Pub. L. 100–647, §\u202f1012(s)(2)(B) , inserted “,\u2000except where the context clearly indicates otherwise” after “foreign corporation”.\nSubsec. (e).  Pub. L. 100–647, §\u202f6133(a) , substituted “interest on obligations of the United States which is not portfolio interest (as defined in section 881(c)(2))” for “interest on obligations of the United States”, and struck out at end “The preceding sentence shall not apply to any Guam corporation which is treated as not being a foreign corporation by section 881(b)(1) for the taxable year.”\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f701(e)(4)(F) , inserted reference to section 55.\nSubsec. (e).  Pub. L. 99–514, §\u202f1236(a) , inserted “The preceding sentence shall not apply to any Guam corporation which is treated as not being a foreign corporation by section 881(b)(1) for the taxable year.”\n1984—Subsec. (c)(2).  Pub. L. 98–369  substituted reference to section “33” for “32” and “34” for “39”.\n1983—Subsec. (c)(2).  Pub. L. 97–424  struck out “and lubricating oil” after “gasoline”.\n1980—Subsec. (a)(3).  Pub. L. 96–499  added par. (3).\n1978—Subsec. (a).  Pub. L. 95–600  substituted in subsec. (a) heading “Imposition of tax” for “Normal tax and surtax” and in par. (1) heading “In general” for “Imposition of tax”.\n1976—Subsecs. (c)(1)(A), (2), (d).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1966— Pub. L. 89–809  substantially revised the income tax treatment of foreign corporations, introduced the concept of taxable income effectively connected with the conduct of a trade or business within the United States into provisions dealing with the imposition of tax, substituted a concept of gross income that included gross income derived from sources within the United States not effectively connected with the conduct of a trade or business within the United States and gross income effectively connected with the conduct of a trade or business within the United States for a concept of gross income that included only gross income from sources within the United States, and inserted provisions for an election to treat real property income as income connected with United States business, treatment of interest on United States obligations received by banks organized in possessions, and the returns of tax by agents, and inserted cross reference to section 906(b)(1).\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by  section 12001(b)(14) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13001(b)(2)(L) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 14401(d)(2) of Pub. L. 115–97  applicable to base erosion payments (as defined in  section 59A(d) of this title ) paid or accrued in taxable years beginning after  Dec. 31, 2017 , see  section 14401(e) of Pub. L. 115–97 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 701(e)(4)(F) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Superfund Revenue Act of 1986,  Pub. L. 99–499, title V , to which it relates, see  section 2001(e) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–647, title VI, §\u202f6133(c) ,  Nov. 10, 1988 ,  102 Stat. 3721 , provided that:  “The amendments made by this subsection [probably means ‘this section’, which amended sections 882 and 884 of this title] shall apply to taxable years beginning after  December 31, 1988 .”\nAmendment by  section 701(e)(4)(F) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 99–514, title XII, §\u202f1236(b) ,  Oct. 22, 1986 ,  100 Stat. 2576 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  November 16, 1985 .”\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–424  applicable with respect to articles sold after  Jan. 6, 1983 , see  section 515(c) of Pub. L. 97–424 , set out as a note under  section 34 of this title .\nAmendment by  Pub. L. 96–499  applicable to disposition after  June 18, 1980 , see  section 1125(a) of Pub. L. 96–499 , set out as an Effective Date note under  section 897 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nFor applicability of amendment by  section 701(e)(4)(F) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'Gross income derived by a corporation organized in a foreign country from the international operation of a ship or ships if such foreign country grants an equivalent exemption to corporations organized in the United States.\nGross income derived by a corporation organized in a foreign country from the international operation of aircraft if such foreign country grants an equivalent exemption to corporations organized in the United States.\nEarnings derived from payments by a common carrier for the use on a temporary basis (not expected to exceed a total of 90 days in any taxable year) of railroad rolling stock owned by a corporation of a foreign country which grants an equivalent exemption to corporations organized in the United States.\nThe rules of paragraphs (6), (7), and (8) of section 872(b) shall apply for purposes of this subsection.\nFor purposes of this subsection, there shall not be taken into account any failure of a foreign country to grant an exemption to a corporation organized in the United States if such corporation is subject to tax by such foreign country on a residence basis pursuant to provisions of foreign law which meets such standards (if any) as the Secretary may prescribe.\nThe earnings derived from the ownership or operation of a communications satellite system by a foreign entity designated by a foreign government to participate in such ownership or operation shall be exempt from taxation under this subtitle, if the United States, through its designated entity, participates in such system pursuant to the Communications Satellite Act of 1962 ( 47 U.S.C. 701  and following).\nParagraph (1) or (2) of subsection (a) (as the case may be) shall not apply to any foreign corporation if 50 percent or more of the value of the stock of such corporation is owned by individuals who are not residents of such foreign country or another foreign country meeting the requirements of such paragraph.\nParagraph (1) shall not apply to any foreign corporation which is a controlled foreign corporation (as defined in section 957(a)).\nParagraph (1) shall not apply to any corporation which is organized in a foreign country meeting the requirements of paragraph (1) or (2) of subsection (a) (as the case may be) and the stock of which is primarily and regularly traded on an established securities market in such foreign country, another foreign country meeting the requirements of such paragraph, or the United States.\nAny stock in another corporation which is owned (directly or indirectly) by a corporation meeting the requirements of subparagraph (A) shall be treated as owned by individuals who are residents of the foreign country in which the corporation meeting the requirements of subparagraph (A) is organized.\nFor purposes of paragraph (1), stock owned (directly or indirectly) by or for a corporation, partnership, trust, or estate shall be treated as being owned proportionately by its shareholders, partners, or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person.\nThe Communications Satellite Act of 1962, referred to in subsec. (b), is  Pub. L. 87–624 ,  Aug. 31, 1962 ,  76 Stat. 419 , which is classified generally to chapter 6 (§\u202f701 et seq.) of Title 47, Telecommunications. For complete classification of this Act to the Code, see Short Title note set out under  section 701 of Title 47  and Tables.\n2004—Subsec. (a)(4).  Pub. L. 108–357  substituted “(6), (7), and (8)” for “(5), (6), and (7)”.\n1989—Subsec. (a)(4).  Pub. L. 101–239, §\u202f7811(i)(8)(D) , substituted “(5), (6), and (7)” for “(5) and (6)”.\nSubsec. (a)(5).  Pub. L. 101–239, §\u202f7811(i)(10) , added par. (5).\n1988—Subsec. (a)(1), (2).  Pub. L. 100–647, §\u202f1012(e)(2)(A) , (5), struck out “to citizens of the United States and” after “exemption” and substituted “international operation” for “operation”.\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f1012(e)(1)(B) , substituted “Paragraph (1) or (2) of subsection (a) (as the case may be)” for “Paragraphs (1) and (2) of subsection (a)” and “such paragraph” for “such paragraphs (1) and (2)”.\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f1012(e)(1)(A) , substituted “Special rules” for “Exception” in heading and amended text generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply to any foreign corporation—\n“(A) the stock of which is primarily and regularly traded on an established securities market in the foreign country in which such corporation is organized, or\n“(B) which is wholly owned (either directly or indirectly) by another corporation meeting the requirements of subparagraph (A) and is organized in the same foreign country as such other corporation.”\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f1212(c)(3) , added par. (1) and struck out former par. (1), ships under foreign flag, which read as follows: “Earnings derived from the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States.”\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f1212(c)(3) , added par. (2) and struck out former par. (2), aircraft of foreign registry, which read as follows: “Earnings derived from the operation of aircraft registered under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States.”\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1212(c)(4) , added par. (4).\nSubsec. (c).  Pub. L. 99–514, §\u202f1212(c)(5) , added subsec. (c).\n1975—Subsec. (a)(3).  Pub. L. 94–164  added par. (3).\n1968— Pub. L. 90–622  designated existing provisions as subsec. (a), added subsec. (a) heading, and added subsec. (b).\nAmendment by  Pub. L. 108–357  applicable to wagers made after  Oct. 22, 2004 , see  section 419(c) of Pub. L. 108–357 , set out as a note under  section 872 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1212(f) of Pub. L. 99–514 , set out as a note under  section 863 of this title .\nPub. L. 94–164, §\u202f6(b) ,  Dec. 23, 1975 ,  89 Stat. 976 , provided that:  “The amendment made by this section [amending this section] shall apply to payments made after  November 18, 1974 .”\nPub. L. 90–622, §\u202f1(b) ,  Oct. 22, 1968 ,  82 Stat. 1311 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1966 .”\nFor nonapplication of amendment by section 1212(c)(3)–(5) of  Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'In addition to the tax imposed by section 882 for any taxable year, there is hereby imposed on any foreign corporation a tax equal to 30 percent of the dividend equivalent amount for the taxable year.\nThe increase under subparagraph (A) for any taxable year shall not exceed the accumulated effectively connected earnings and profits as of the close of the preceding taxable year.\nThe term “U.S. assets” means the money and aggregate adjusted bases of property of the foreign corporation treated as connected with the conduct of a trade or business in the United States under regulations prescribed by the Secretary. For purposes of the preceding sentence, the adjusted basis of any property shall be its adjusted basis for purposes of computing earnings and profits.\nThe term “U.S. liabilities” means the liabilities of the foreign corporation treated as connected with the conduct of a trade or business in the United States under regulations prescribed by the Secretary.\nThe regulations prescribed under subparagraphs (A) and (B) shall be consistent with the allocation of deductions under section 882(c)(1).\nThe term “effectively connected earnings and profits” means earnings and profits (without diminution by reason of any distributions made during the taxable year) which are attributable to income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business within the United States.\nIf a foreign corporation is subject to the tax imposed by subsection (a) for any taxable year (determined after the application of any treaty), no tax shall be imposed by section 871(a), 881(a), 1441, or 1442 on any dividends paid by such corporation out of its earnings and profits for such taxable year.\nThe Secretary may, in his sole discretion, treat a foreign corporation as being a qualified resident of a foreign country if such corporation establishes to the satisfaction of the Secretary that such corporation meets such requirements as the Secretary may establish to ensure that individuals who are not residents of such foreign country do not use the treaty between such foreign country and the United States in a manner inconsistent with the purposes of this subsection.\nThis section shall not apply to an international organization (as defined in section 7701(a)(18)).\nFor purposes of this subsection, the term “allocable interest” means any interest which is allocable to income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations providing for appropriate adjustments in the determination of the dividend equivalent amount in connection with the distribution to shareholders or transfer to a controlled corporation of the taxpayer’s U.S. assets and other adjustments in such determination as are necessary or appropriate to carry out the purposes of this section.\nThe FSC Repeal and Extraterritorial Income Exclusion Act of 2000, referred to in subsec. (d)(2)(B), is  Pub. L. 106–519 ,  Nov. 15, 2000 ,  114 Stat. 2423 . For complete classification of this Act to the Code, see Short Title of 2000 Amendments note set out under  section 1 of this title  and Tables.\nA prior section 884 was renumbered  section 885 of this title .\n2007—Subsec. (d)(2)(B).  Pub. L. 110–172  inserted “(as in effect before their repeal by the FSC Repeal and Extraterritorial Income Exclusion Act of 2000)” before comma at end.\n1996—Subsec. (f)(1).  Pub. L. 104–188, §\u202f1704(f)(3)(A)(ii) , substituted “reasonably expected to be allocable interest” for “reasonably expected to be deductible under section 882 in computing the effectively connected taxable income of such foreign corporation” in closing provisions.\nSubsec. (f)(1)(B).  Pub. L. 104–188, §\u202f1704(f)(3)(A)(i) , substituted “to the extent that the allocable interest exceeds the interest described in subparagraph (A)” for “to the extent the amount of interest allowable as a deduction under section 882 in computing the effectively connected taxable income of such foreign corporation exceeds the interest described in subparagraph (A)”.\nSubsec. (f)(2).  Pub. L. 104–188, §\u202f1704(f)(3)(A)(iii) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “ Effectively connected taxable income .—For purposes of this subsection, the term ‘effectively connected taxable income’ means taxable income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business within the United States.”\n1988—Subsec. (b)(2)(B).  Pub. L. 100–647, §\u202f1012(q)(1)(A) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The increase under subparagraph (A) for any taxable year shall not exceed the aggregate reductions under paragraph (1) for prior taxable years to the extent not previously taken into account under subparagraph (A).”\nSubsec. (d)(2)(E).  Pub. L. 100–647, §\u202f6133(b) , added subpar. (E).\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f1012(q)(2)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “No income tax treaty between the United States and a foreign country shall exempt any foreign corporation from the tax imposed by subsection (a) (or reduce the amount thereof) unless—\n“(A) such foreign corporation is a qualified resident of such foreign country, or\n“(B) such foreign corporation is not a qualified resident of such foreign country but such income tax treaty permits a withholding tax on dividends described in section 861(a)(2)(B) which are paid by such foreign corporation.”\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1012(q)(2)(B) , substituted “withholding tax” for “2nd tier withholding tax” in heading and amended text generally. Prior to amendment, text read as follows:\n“(A)  In general .—If a foreign corporation is not exempt for any taxable year from the tax imposed by subsection (a) by reason of a treaty, no tax shall be imposed by section 871(a), 881(a), 1441, or 1442 on any dividends paid by such corporation during the taxable year.\n“(B)  Limitation on certain treaty benefits .—No foreign corporation which is not a qualified resident of a foreign country shall be entitled to claim benefits under any income tax treaty between the United States and such foreign country with respect to dividends—\n“(i) which are paid by such foreign corporation and with respect to which such foreign corporation is otherwise required to deduct and withhold tax under section 1441 or 1442, or\n“(ii) which are received by such foreign corporation and are described in section 861(a)(2)(B).”\nSubsec. (e)(4)(A)(i), (ii).  Pub. L. 100–647, §\u202f1012(q)(5) , substituted “50 percent or more” for “more than 50 percent” in cl. (i) and “citizens or residents of the United States” for “the United States” in cl. (ii).\nSubsec. (e)(4)(C), (D).  Pub. L. 100–647, §\u202f1012(q)(4) , added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (e)(5).  Pub. L. 100–647, §\u202f1012(q)(6) , added par. (5).\nSubsec. (f)(1).  Pub. L. 100–647, §\u202f1012(f)(3)(A) , (14), substituted “this subtitle” for “sections 871, 881, 1441, and 1442” and inserted “(or having gross income treated as effectively connected with the conduct of a trade or business in the United States)” after “United States”.\nPub. L. 100–647, §\u202f1012(q)(2)(C)(i) , (3)(B), inserted sentence at end and struck out former last sentence which read as follows: “Rules similar to the rules of subsection (e)(3)(B) shall apply to interest described in the preceding sentence.”\nSubsec. (f)(3).  Pub. L. 100–647, §\u202f1012(q)(2)(C)(ii) , added par. (3).\nSection 1704(f)(3)(B) of Pub. L. 104–188  provided that:  “The amendments made by subparagraph (A) [amending this section] shall take effect as if included in the amendments made by section 1241(a) of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nAmendment by section 1012(q)(1)(A), (2)–(6), (14) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 6133(b) of Pub. L. 100–647  applicable to taxable years beginning after  Dec. 31, 1988 , see  section 6133(c) of Pub. L. 100–647 , set out as a note under  section 882 of this title .\nSection 1241(e) of Pub. L. 99–514  provided that:  “The amendments made by this section [enacting  section 884 of this title , renumbering former section 884 as  section 885 of this title , and amending sections 861 and 906 of this title] shall apply to taxable years beginning after  December 31, 1986 .”\nSection 1012(q)(1)(B) of Pub. L. 100–647 , as amended by  Pub. L. 101–239, title VII, §\u202f7811(i)(5) ,  Dec. 19, 1989 ,  103 Stat. 2410 , provided that:  “For purposes of applying section 884 of the 1986 Code, the earnings and profits of any corporation shall be determined without regard to any increase in earnings and profits under sections 1023(e)(3)(C) [ section 1023(e)(3)(C) of Pub. L. 99–514 , set out as an Effective Date note under  section 846 of this title ] and 1021(c)(2)(C) of the Reform Act [ Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 832 of this title ] or arising from section 832(b)(4)(C) of the 1986 Code.”\nFor nonapplication of amendment by  section 1241(a) of Pub. L. 99–514  (enacting this section) to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': '1986— Pub. L. 99–514  renumbered  section 884 of this title  as this section.\n1969— Pub. L. 91–172  redesignated pars. (2) to (6) as (1) to (5), respectively. Former par. (1), referring to section 512(a), was struck out.\n1966—Par. (1).  Pub. L. 89–809  redesignated par. (4) as (1). Former par. (1) redesignated (6).\nPar. (2).  Pub. L. 89–809  redesignated par. (3) as (2) and substituted “foreign corporations carrying on an insurance business within the United States, see section 842” for “foreign insurance companies, see subchapter L (sec. 801 and following)”. Former par. (2) redesignated (3).\nPar. (3).  Pub. L. 89–809  redesignated former par. (2) as (3) and, in par. (3) as so redesignated, substituted “section 864(b)” for “section 871(c)”. Former par. (3) redesignated (2).\nPars. (4), (5).  Pub. L. 89–809  added pars. (4) and (5). Former par. (4) redesignated (1).\nPar. (6).  Pub. L. 89–809  redesignated former par. (1) as (6).\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 101(k)(2)(B) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'In the case of any nonresident alien individual or foreign corporation, there is hereby imposed for each taxable year a tax equal to 4 percent of such individual’s or corporation’s United States source gross transportation income for such taxable year.\nExcept as provided in paragraphs (2) and (3), the term “United States source gross transportation income” means any gross income which is transportation income (as defined in section 863(c)(3)) to the extent such income is treated as from sources in the United States under section 863(c)(2). To the extent provided in regulations, such term does not include any income of a kind to which an exemption under paragraph (1) or (2) of section 883(a) would not apply.\nThe term “United States source gross transportation income” shall not include any income taxable under section 871(b) or 882.\nThe term “United States source gross transportation income” does not include any income taxable in a possession of the United States under the provisions of this title as made applicable in such possession.\nAny income taxable under this section shall not be taxable under section 871, 881, or 882.\n1989—Subsec. (b)(1).  Pub. L. 101–239, §\u202f7811(i)(8)(B) , substituted “paragraphs (2) and (3)” for “paragraph (2)”.\nSubsec. (b)(3).  Pub. L. 101–239, §\u202f7811(i)(8)(A) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (b)(4).  Pub. L. 101–239, §\u202f7811(i)(8)(A) , (9), redesignated former par. (3) as (4) and substituted “United States source gross transportation income” for “transportation income” in introductory provisions and in subpar. (A).\n1988—Subsec. (b)(1).  Pub. L. 100–647  substituted “under section 863(c)(2)” for “under section 863(c)” and inserted at end “To the extent provided in regulations, such term does not include any income of a kind to which an exemption under paragraph (1) or (2) of section 883(a) would not apply.”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1212(f) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 863 of this title .\nFor nonapplication of amendment by  section 1212(b)(1) of Pub. L. 99–514  (enacting this section) to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'Whenever the President finds that, under the laws of any foreign country, citizens or corporations of the United States are being subjected to discriminatory or extraterritorial taxes, the President shall so proclaim and the rates of tax imposed by sections 1, 3, 11, 801, 831, 852, 871, and 881 shall, for the taxable year during which such proclamation is made and for each taxable year thereafter, be doubled in the case of each citizen and corporation of such foreign country; but the tax at such doubled rate shall be considered as imposed by such sections as the case may be. In no case shall this section operate to increase the taxes imposed by such sections (computed without regard to this section) to an amount in excess of 80 percent of the taxable income of the taxpayer (computed without regard to the deductions allowable under section 151 and under part VIII of subchapter B). Whenever the President finds that the laws of any foreign country with respect to which the President has made a proclamation under the preceding provisions of this section have been modified so that discriminatory and extraterritorial taxes applicable to citizens and corporations of the United States have been removed, he shall so proclaim, and the provisions of this section providing for doubled rates of tax shall not apply to any citizen or corporation of such foreign country with respect to any taxable year beginning after such proclamation is made.\n1986— Pub. L. 99–514  struck out reference to section 821.\n1984— Pub. L. 98–369  substituted “801” for “802”.\n1959— Pub. L. 86–69  struck out reference to section 811.\n1956—Act  Mar. 13, 1956 , inserted reference to section 811.\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 86–69  applicable only with respect to taxable years beginning after  Dec. 31, 1957 , see  section 4 of Pub. L. 86–69 , set out an Effective Date note under  section 381 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note under  section 316 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'For purposes of this title, a foreign government shall be treated as a corporate resident of its country. A foreign government shall be so treated for purposes of any income tax treaty obligation of the United States if such government grants equivalent treatment to the Government of the United States.\nThe income of international organizations received from investments in the United States in stocks, bonds, or other domestic securities owned by such international organizations, or from interest on deposits in banks in the United States of moneys belonging to such international organizations, or from any other source within the United States, shall not be included in gross income and shall be exempt from taxation under this subtitle.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\n1990—Subsec. (a)(2)(A).  Pub. L. 101–508  made clarifying amendment to  Pub. L. 100–647, §\u202f1012(t)(1) . See 1988 Amendment note below.\n1988—Subsec. (a)(2)(A).  Pub. L. 100–647, §\u202f1012(t)(1) , (2), as amended by  Pub. L. 101–508 , amended cl. (ii) generally and added cl. (iii). Prior to amendment, cl. (ii) read as follows: “received from or by a controlled commercial entity.”\nSubsec. (a)(3).  Pub. L. 100–647, §\u202f1012(t)(3) , added par. (3).\n1986— Pub. L. 99–514  amended section generally. Prior to amendment, section read as follows: “The income of foreign governments or international organizations received from investments in the United States in stocks, bonds, or other domestic securities, owned by such foreign governments or by international organizations, or from interest on deposits in banks in the United States of moneys belonging to such foreign governments or international organizations, or from any other source within the United States, shall not be included in gross income and shall be exempt from taxation under this subtitle.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XII, §\u202f1247(b) ,  Oct. 22, 1986 ,  100 Stat. 2584 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to amounts received on or after  July 1, 1986 , except that no amount shall be required to be deducted and withheld by reason of the amendment made by subsection (a) from any payment made before the date of the enactment of this Act [ Oct. 22, 1986 ].”\nFor nonapplication of amendment by  section 1247(a) of Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'The Secretary of State shall certify to the Secretary of the Treasury the names of the foreign countries which grant an equivalent exemption to the employees of the Government of the United States performing services in such foreign countries, and the character of the services performed by employees of the Government of the United States in foreign countries.\n1988—Subsec. (c).  Pub. L. 100–647  added subsec. (c).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'The provisions of this title shall be applied to any taxpayer with due regard to any treaty obligation of the United States which applies to such taxpayer.\nFor relationship between treaties and this title, see section 7852(d).\nFor purposes of applying any exemption from, or reduction of, any tax provided by any treaty to which the United States is a party with respect to income which is not effectively connected with the conduct of a trade or business within the United States, a nonresident alien individual or a foreign corporation shall be deemed not to have a permanent establishment in the United States at any time during the taxable year. This subsection shall not apply in respect of the tax computed under section 877(b).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to determine the extent to which a taxpayer to which paragraph (1) does not apply shall not be entitled to benefits under any income tax treaty of the United States with respect to any payment received by, or income attributable to any activities of, an entity organized in any jurisdiction (including the United States) that is treated as a partnership or is otherwise treated as fiscally transparent for purposes of this title (including a common investment trust under section 584, a grantor trust, or an entity that is disregarded for purposes of this title) and is treated as fiscally nontransparent for purposes of the tax laws of the jurisdiction of residence of the taxpayer.\n1997—Subsec. (c).  Pub. L. 105–34  added subsec. (c).\n1988—Subsec. (a).  Pub. L. 100–647  substituted “Treaty provisions” for “Income affected by treaty” in heading and amended text generally. Prior to amendment, text read as follows: “Income of any kind, to the extent required by any treaty obligation of the United States, shall not be included in gross income and shall be exempt from taxation under this subtitle.”\n1966— Pub. L. 89–809  designated existing provisions as subsec. (a), added subsec. (b), and substituted “affected by treaty” for “exempt under treaty” in section catchline.\nPub. L. 105–34, title X, §\u202f1054(b) ,  Aug. 5, 1997 ,  111 Stat. 944 , provided that:  “The amendments made by this section [amending this section] shall apply upon the date of enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 89–809, title I, §\u202f105(d) ,  Nov. 13, 1966 ,  80 Stat. 1565 , provided that:  “The amendments made by this section (other than subsections (d) and (f)) [amending this section and enacting  section 896 of this title ] shall apply with respect to taxable years beginning after  December 31, 1966 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'Income derived by a foreign central bank of issue from obligations of the United States or of any agency or instrumentality thereof (including beneficial interests, participations, and other instruments issued under section 302(c) of the Federal National Mortgage Association Charter Act ( 12 U.S.C. 1717 )) which are owned by such foreign central bank of issue, or derived from interest on deposits with persons carrying on the banking business, shall not be included in gross income and shall be exempt from taxation under this subtitle unless such obligations or deposits are held for, or used in connection with, the conduct of commercial banking functions or other commercial activities. For purposes of the preceding sentence the Bank for International Settlements shall be treated as a foreign central bank of issue.\n1966— Pub. L. 89–809  exempted income derived from obligations of agencies or instrumentalities of the United States and income derived from interest on deposits with persons carrying on the banking business, inserted “(including beneficial interests, participations, and other instruments issued under section 302(c) of the Federal National Mortgage Association Charter Act ( 12 U.S.C. 1717 )),” and inserted sentence requiring the Bank for International Settlements to be treated as a foreign central bank of issue.\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , except that in applying  section 864(c)(4)(B)(iii) of this title  with respect to a binding contract entered into on or before  Feb. 24, 1966 , activities in the United States on or before such date in negotiating or carrying out such contract shall not be taken into account, see  section 102(e)(1) of Pub. L. 89–809 , set out as a note under  section 861 of this title .\nPub. L. 87–29, §\u202f1(c) ,  May 4, 1961 ,  75 Stat. 64 , provided that:  “The amendments made by subsections (a) and (b) [enacting this section and amending analysis preceding  section 891 of this title ] shall be effective with respect to income received in taxable years beginning after  December 31, 1960 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'No proclamation shall be issued by the President pursuant to this section unless, at least 30 days prior to such proclamation, he has notified the Senate and the House of Representatives of his intention to issue such proclamation.\nThe Secretary shall prescribe such regulations as he deems necessary or appropriate to implement this section.\nThe date of enactment of this section, referred to in the provisions following subsec. (a)(3), is the date of enactment of  Pub. L. 89–809 , which was approved  Nov. 13, 1966 .\n1976—Subsec. (e).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nSection applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 105(d) of Pub. L. 89–809 , set out as an Effective Date of 1966 Amendment note under  section 894 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'In the case of an individual, a loss shall be taken into account under subsection (a) only to the extent such loss would be taken into account under section 165(c) (determined without regard to subsection (a) of this section).\nIf any class of stock of a corporation is regularly traded on an established securities market, stock of such class shall be treated as a United States real property interest only in the case of a person who, at some time during the shorter of the periods described in paragraph (1)(A)(ii), held more than 5 percent of such class of stock.\nParagraph (1)(A)(ii) shall be applied by substituting “any corporation (whether foreign or domestic)” for “any domestic corporation”.\nUnder regulations prescribed by the Secretary, assets held by a partnership, trust, or estate shall be treated as held proportionately by its partners or beneficiaries. Any asset treated as held by a partner or beneficiary by reason of this subparagraph which is used or held for use by the partnership, trust, or estate in a trade or business shall be treated as so used or held by the partner or beneficiary. Any asset treated as held by a partner or beneficiary by reason of this subparagraph shall be so treated for purposes of applying this subparagraph successively to partnerships, trusts, or estates which are above the first partnership, trust, or estate in a chain thereof.\nFor purposes of subparagraph (A), the term “controlling interest” means 50 percent or more of the fair market value of all classes of stock of a corporation.\nThe term “interest in real property” includes fee ownership and co-ownership of land or improvements thereon, leaseholds of land or improvements thereon, options to acquire land or improvements thereon, and options to acquire leaseholds of land or improvements thereon.\nThe term “real property” includes movable walls, furnishings, and other personal property associated with the use of the real property.\nFor purposes of determining under paragraph (3) whether any person holds more than 5 percent of any class of stock and of determining under paragraph (5) whether a person holds a controlling interest in any corporation, section 318(a) shall apply (except that paragraphs (2)(C) and (3)(C) of section 318(a) shall be applied by substituting “5 percent” for “50 percent”).\nExcept to the extent otherwise provided in regulations, notwithstanding any other provision of this chapter, gain shall be recognized by a foreign corporation on the distribution (including a distribution in liquidation or redemption) of a United States real property interest in an amount equal to the excess of the fair market value of such interest (as of the time of the distribution) over its adjusted basis.\nExcept to the extent otherwise provided in subsection (d) and paragraph (2) of this subsection, any nonrecognition provision shall apply for purposes of this section to a transaction only in the case of an exchange of a United States real property interest for an interest the sale of which would be subject to taxation under this chapter.\nFor purposes of this subsection, the term “nonrecognition provision” means any provision of this title for not recognizing gain or loss.\nUnder regulations prescribed by the Secretary, the amount of any money, and the fair market value of any property, received by a nonresident alien individual or foreign corporation in exchange for all or part of its interest in a partnership, trust, or estate shall, to the extent attributable to United States real property interests, be considered as an amount received from the sale or exchange in the United States of such property.\nAny distribution by a qualified investment entity to a nonresident alien individual, a foreign corporation, or other qualified investment entity shall, to the extent attributable to gain from sales or exchanges by the qualified investment entity of United States real property interests, be treated as gain recognized by such nonresident alien individual, foreign corporation, or other qualified investment entity from the sale or exchange of a United States real property interest. Notwithstanding the preceding sentence, any distribution by a qualified investment entity to a nonresident alien individual or a foreign corporation with respect to any class of stock which is regularly traded on an established securities market located in the United States shall not be treated as gain recognized from the sale or exchange of a United States real property interest if such individual or corporation did not own more than 5 percent of such class of stock at any time during the 1-year period ending on the date of such distribution.\nThe term “United States real property interest” does not include any interest in a domestically controlled qualified investment entity.\nIn the case of a domestically controlled qualified investment entity, rules similar to the rules of subsection (d) shall apply to the foreign ownership percentage of any gain.\nThe term “domestically controlled qualified investment entity” means any qualified investment entity in which at all times during the testing period less than 50 percent in value of the stock was held directly or indirectly by foreign persons.\nThe term “foreign ownership percentage” means that percentage of the stock of the qualified investment entity which was held (directly or indirectly) by foreign persons at the time during the testing period during which the direct and indirect ownership of stock by foreign persons was greatest.\nIf an interest in a domestically controlled qualified investment entity is disposed of in an applicable wash sale transaction, the taxpayer shall, for purposes of this section, be treated as having gain from the sale or exchange of a United States real property interest in an amount equal to the portion of the distribution described in subparagraph (B) with respect to such interest which, but for the disposition, would have been treated by the taxpayer as gain from the sale or exchange of a United States real property interest under paragraph (1).\nA transaction shall not be treated as an applicable wash sales transaction if the nonresident alien individual, foreign corporation, or qualified investment entity receives the distribution described in clause (i)(I) with respect to either the interest which was disposed of, or acquired, in the transaction.\nA transaction shall not be treated as an applicable wash sales transaction if it involves the disposition of any class of stock in a qualified investment entity which is regularly traded on an established securities market within the United States but only if the nonresident alien individual, foreign corporation, or qualified investment entity did not own more than 5 percent of such class of stock at any time during the 1-year period ending on the date of the distribution described in clause (i)(I).\nAny election under paragraph (1), once made, may be revoked only with the consent of the Secretary.\nThe election provided by paragraph (1) shall be the exclusive remedy for any person claiming discriminatory treatment with respect to this section, section 1445, and section 6039C.\nIn the case of any disposition of stock in a real estate investment trust, paragraphs (3) and (6)(C) of subsection (c) shall each be applied by substituting “more than 10 percent” for “more than 5 percent”.\nIn the case of any distribution from a real estate investment trust, subsection (h)(1) shall be applied by substituting “10 percent” for “5 percent”.\nFor purposes of subparagraphs (B)(i) and (D), the constructive ownership rules under subsection (c)(6)(C) shall apply.\nFor purposes of subparagraph (B), the term “applicable percentage” means the percentage of the value of the interests (other than interests held solely as a creditor) in the qualified shareholder held by applicable investors.\nFor purposes of this paragraph, an applicable investor’s proportionate share of USRPI gain shall be determined on the basis of such investor’s share of partnership items of income or gain (excluding gain allocated under section 704(c)), whichever results in the largest proportionate share. If the investor’s share of partnership items of income or gain (excluding gain allocated under section 704(c)) may vary during the period such investor is a partner in the partnership, such share shall be the highest share such investor may receive.\nFor purposes of this section, a qualified foreign pension fund shall not be treated as a nonresident alien individual or a foreign corporation. For purposes of the preceding sentence, an entity all the interests of which are held by a qualified foreign pension fund shall be treated as such a fund.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\nSection 2 of the Investment Company Act of 1940, referred to in subsec. (h)(4)(E)(ii)(II), is classified to  section 80a–2 of Title 15 , Commerce and Trade.\nSection 857(b)(3)(F), referred to in subsec. (k)(2)(C)(ii), was redesignated section 857(b)(3)(E) and a new subsec. (b)(3)(F) added by  Pub. L. 115–97, title I, §\u202f13001(b)(2)(K)(i) , (iv),  Dec. 22, 2017 ,  131 Stat. 2096 , 2097.\n2022—Subsec. (a)(2)(A)(i).  Pub. L. 117–169  substituted “55(b)(1)(D)” for “55(b)(2)”.\n2018—Subsec. (a)(1)(A).  Pub. L. 115–141, §\u202f401(a)(155) , substituted “section 871(b)(1)” for “section 871(B)(1)”.\nSubsec. (h)(4)(A)(ii).  Pub. L. 115–141, §\u202f101(p)(6) , repealed  Pub. L. 114–113, §\u202f322(b)(2) , and provided that cl. (ii) shall be applied as if amendment had never been enacted. See 2015 Amendment note below.\nSubsec. (k)(2).  Pub. L. 115–141, §\u202f401(a)(156) , substituted “United States real property interest” for “USRPI” in heading.\nSubsec. (k)(2)(B).  Pub. L. 115–141, §\u202f101(p)(1)(A) , substituted “one” for “1” in introductory provisions.\nSubsec. (k)(2)(B)(i).  Pub. L. 115–141, §\u202f101(p)(1)(A) , added cl. (i) and struck out former cl. (i) which read as follows: “subparagraph (A)(i) shall not apply to so much of the stock of a real estate investment trust held by a qualified shareholder as bears the same ratio to the value of the interests (other than interests held solely as a creditor) held by such applicable investors in the qualified shareholder bears to value of all interests (other than interests held solely as a creditor) in the qualified shareholder, and”.\nSubsec. (k)(2)(B)(ii).  Pub. L. 115–141, §\u202f101(p)(1)(A) , substituted “the applicable percentage of the” for “a percentage equal to the ratio determined under clause (i) of the”.\nSubsec. (k)(2)(D).  Pub. L. 115–141, §\u202f101(p)(2) , substituted “subsection” for “paragraph” in introductory provisions.\nSubsec. (k)(2)(E).  Pub. L. 115–141, §\u202f101(p)(3) , substituted “and (D)” for “and (C) and paragraph (4)”.\nSubsec. (k)(2)(F).  Pub. L. 115–141, §\u202f101(p)(1)(B) , added subpar. (F).\nSubsec. (k)(3)(B)(i).  Pub. L. 115–141, §\u202f101(p)(4) , substituted “which—” for “which, under the comprehensive income tax treaty described in subparagraph (A)(i), is eligible”, added subcl. (I), and inserted “(II) is eligible under such treaty” before “for a reduced rate”.\nSubsec. (k)(3)(B)(ii)(II).  Pub. L. 115–141, §\u202f101(p)(5)(A) , inserted “and” at end.\nSubsec. (k)(3)(B)(ii)(III).  Pub. L. 115–141, §\u202f101(p)(5)(B) , substituted “domestic corporation” for “United States corporation”.\nSubsec. ( l ).  Pub. L. 115–141, §\u202f101(q)(1) , substituted “Exception for qualified foreign pension funds” for “Exception for interests held by foreign pension funds” in heading.\nSubsec. ( l )(1).  Pub. L. 115–141, §\u202f101(q)(1) , amended par. (1) generally. Prior to amendment, text read as follows: “This section shall not apply to any United States real property interest held directly (or indirectly through 1 or more partnerships) by, or to any distribution received from a real estate investment trust by—\n“(A) a qualified foreign pension fund, or\n“(B) any entity all of the interests of which are held by a qualified foreign pension fund.”\nSubsec. ( l )(2)(B).  Pub. L. 115–141, §\u202f101(q)(2) , amended subpar.(B) generally. Prior to amendment, subpar. (B) read as follows: “which is established to provide retirement or pension benefits to participants or beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered,”.\nSubsec. ( l )(2)(D).  Pub. L. 115–141, §\u202f101(q)(3) , substituted “with respect to which annual information about its beneficiaries is provided, or is otherwise available, to the relevant tax authorities” for “provides annual information reporting about its beneficiaries to the relevant tax authorities”.\nSubsec. ( l )(2)(E)(i).  Pub. L. 115–141, §\u202f101(q)(4)(A) , substituted “such entity or arrangement” for “such entity”.\nSubsec. ( l )(2)(E)(ii).  Pub. L. 115–141, §\u202f101(q)(4)(B) , substituted “,\u2000or such income is excluded from the gross income of such entity or arrangement or is taxed at a reduced rate” for “or such income is taxed at a reduced rate”.\n2017—Subsec. (a)(2)(A).  Pub. L. 115–97  substituted “section 55(b)(1)” for “section 55(b)(1)(A)” in introductory provisions.\n2015—Subsec. (c)(1)(A).  Pub. L. 114–113, §\u202f322(a)(2)(A) , inserted “or subsection (k)” after “subparagraph (B)” in introductory provisions.\nSubsec. (c)(1)(B)(iii).  Pub. L. 114–113, §\u202f325(a) , added cl. (iii).\nSubsec. (h)(4).  Pub. L. 114–113, §\u202f322(b)(1)(B) , inserted “and special rules” after “Definitions” in heading.\nSubsec. (h)(4)(A).  Pub. L. 114–113, §\u202f133(a) , struck out cl. (i) designation and heading before “The term ‘qualified investment entity’ means—”, redesignated subcls. (I) and (II) of former cl. (i) as cls. (i) and (ii), respectively, and struck out former cl. (ii). Prior to amendment, text of cl. (ii) read as follows: “Clause (i)(II) shall not apply after  December 31, 2014 . Notwithstanding the preceding sentence, an entity described in clause (i)(II) shall be treated as a qualified investment entity for purposes of applying paragraphs (1) and (5) and section 1445 with respect to any distribution by the entity to a nonresident alien individual or a foreign corporation which is attributable directly or indirectly to a distribution to the entity from a real estate investment trust.”\nSubsec. (h)(4)(A)(ii).  Pub. L. 114–113, §\u202f322(b)(2) , which directed insertion of “and for purposes of determining whether a real estate investment trust is a domestically controlled qualified investment entity under this subsection” after “real estate investment trust”, was repealed by  Pub. L. 115–141, §\u202f101(p)(6) , with cl. (ii) to be applied as if amendment had never been enacted.\nSubsec. (h)(4)(E).  Pub. L. 114–113, §\u202f322(b)(1)(A) , added subpar. (E).\nSubsec. (k).  Pub. L. 114–113, §\u202f322(a)(1) , added subsec. (k).\nSubsec. ( l ).  Pub. L. 114–113, §\u202f323(a) , added subsec. ( l ).\n2014—Subsec. (h)(4)(A)(ii).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (h)(4)(A)(ii).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (h)(4)(A)(ii).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (h)(4)(A)(ii).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2006—Subsec. (h)(1).  Pub. L. 109–222, §\u202f505(a)(1) , in first sentence, substituted “a nonresident alien individual, a foreign corporation, or other qualified investment entity” for “a nonresident alien individual or a foreign corporation” and “such nonresident alien individual, foreign corporation, or other qualified investment entity” for “such nonresident alien individual or foreign corporation” and inserted second sentence and struck out former second sentence which read as follows: “Notwithstanding the preceding sentence, any distribution by a real estate investment trust with respect to any class of stock which is regularly traded on an established securities market located in the United States shall not be treated as gain recognized from the sale or exchange of a United States real property interest if the shareholder did not own more than 5 percent of such class of stock at any time during the 1-year period ending on the date of the distribution.”\nSubsec. (h)(4)(A)(i)(II).  Pub. L. 109–222, §\u202f504(a) , inserted “which is a United States real property holding corporation or which would be a United States real property holding corporation if the exceptions provided in subsections (c)(3) and (h)(2) did not apply to interests in any real estate investment trust or regulated investment company” after “any regulated investment company”.\nSubsec. (h)(4)(A)(ii).  Pub. L. 109–222, §\u202f505(a)(2) , inserted at end “Notwithstanding the preceding sentence, an entity described in clause (i)(II) shall be treated as a qualified investment entity for purposes of applying paragraphs (1) and (5) and section 1445 with respect to any distribution by the entity to a nonresident alien individual or a foreign corporation which is attributable directly or indirectly to a distribution to the entity from a real estate investment trust.”\nSubsec. (h)(5).  Pub. L. 109–222, §\u202f506(a) , added par. (5).\n2005—Subsec. (h)(1).  Pub. L. 109–135  substituted “any distribution by a real estate investment trust with respect to any class of stock” for “any distribution by a REIT with respect to any class of stock” and “the 1-year period ending on the date of the distribution” for “the taxable year”.\n2004—Subsec. (h).  Pub. L. 108–357, §\u202f411(c)(5) , substituted “certain investment entities” for “REITS” in heading.\nSubsec. (h)(1).  Pub. L. 108–357, §\u202f418(a) , inserted at end “Notwithstanding the preceding sentence, any distribution by a REIT with respect to any class of stock which is regularly traded on an established securities market located in the United States shall not be treated as gain recognized from the sale or exchange of a United States real property interest if the shareholder did not own more than 5 percent of such class of stock at any time during the taxable year.”\nPub. L. 108–357, §\u202f411(c)(1) , substituted “qualified investment entity” for “REIT” in two places.\nSubsec. (h)(2).  Pub. L. 108–357, §\u202f411(c)(2) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘United States real property interest’ does not include any interest in a domestically-controlled REIT.”\nSubsec. (h)(3).  Pub. L. 108–357, §\u202f411(c)(2) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “In the case of a domestically-controlled REIT, rules similar to the rules of subsection (d) shall apply to the foreign ownership percentage of any gain.”\nSubsec. (h)(4)(A).  Pub. L. 108–357, §\u202f411(c)(3) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘REIT’ means a real estate investment trust.”\nSubsec. (h)(4)(B).  Pub. L. 108–357, §\u202f411(c)(3) , amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘domestically-controlled REIT’ means a REIT in which at all times during the testing period less than 50 percent in value of the stock was held directly or indirectly by foreign persons.”\nSubsec. (h)(4)(C), (D)(iii).  Pub. L. 108–357, §\u202f411(c)(4) , substituted “qualified investment entity” for “REIT”.\n1996—Subsec. (f).  Pub. L. 104–188  struck out subsec. (f) which read as follows:\n“(f)  Distributions by Domestic Corporations to Foreign Shareholders .—If a domestic corporation distributes a United States real property interest to a nonresident alien individual or a foreign corporation in a distribution to which section 301 applies, notwithstanding any other provision of this chapter, the basis of such United States real property interest in the hands of such nonresident alien individual or foreign corporation shall not exceed—\n“(1) the adjusted basis of such property before the distribution, increased by\n“(2) the sum of—\n“(A) any gain recognized by the distributing corporation on the distribution, and\n“(B) any tax paid under this chapter by the distributee on such distribution.”\n1993—Subsec. (a)(2).  Pub. L. 103–66  substituted “Minimum” for “21-percent minimum” in heading and “the taxable excess for purposes of section 55(b)(1)(A) shall not be less than” for “the amount determined under section 55(b)(1)(A) shall not be less than 21 percent of” in subpar. (A).\n1990—Subsec. (k).  Pub. L. 101–508  struck out subsec. (k) which read as follows: “If—\n“(1) a foreign corporation adopts, or has adopted, a plan of liquidation described in section 334(b)(2)(A), and\n“(2) the 12-month period described in section 334(b)(2)(B) for the acquisition by purchase of the stock of the foreign corporation, began after  December 31, 1979 , and before  November 26, 1980 ,\nthen such foreign corporation may make an election to be treated, for the period following  June 18, 1980 , as a domestic corporation pursuant to section 897(i)(1). Notwithstanding an election under the preceding sentence, any selling shareholder of such corporation shall be considered to have sold the stock of a foreign corporation.”\n1988—Subsec. ( l ).  Pub. L. 100–647  struck out subsec. ( l ) which provided special rule for certain United States shareholders of liquidating foreign corporations.\n1986—Subsec. (a)(2).  Pub. L. 99–514, §\u202f701(e)(4)(G) , substituted “21-percent” for “20-percent” in heading and amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “In the case of any nonresident alien individual, the amount determined under section 55(a)(1) for the taxable year shall not be less than 20 percent of the lesser of—\n“(i) the individual’s alternative minimum taxable income (as defined in section 55(b)) for the taxable year, or\n“(ii) the individual’s net United States real property gain for the taxable year.”\nSubsec. (d).  Pub. L. 99–514, §\u202f631(e)(12) , in heading, struck out “,\u2000etc.,” after “distributions”, and in text, struck out heading and designation for par. (1), redesignated subpar. (A) as par. (1), redesignated subpar. (B) as par. (2) and substituted “paragraph (1)” for “subparagraph (A)” in introductory provisions, redesignated cl. (i) and its subcls. (I) and (II) as subpar. (A) and cls. (i) and (ii), respectively, redesignated cl. (ii) as subpar. (B), and struck out former par. (2) which provided that section 337 not apply to any sale or exchange of a United States real property interest by a foreign corporation.\nSubsec. (i)(1), (4).  Pub. L. 99–514, §\u202f1810(f)(1) , inserted reference to section 1445.\n1982—Subsec. (a)(2)(A).  Pub. L. 97–248  substituted “section 55(a)(1) for the taxable year shall not be less than 20 percent of the lesser of—” for “section 55(a)(1)(A) for the taxable year shall not be less than 20 percent of whichever of the following is the least:” in introductory provisions, in cl. (i) struck out “(1)” after “section 55(b)” and inserted “or” at the end, in cl. (ii) substituted a period for a comma and struck out “or” at the end, and struck out former cl. (iii), which had provided for the amount of $60,000 as a third alternative.\n1981—Subsec. (c)(1)(A)(i).  Pub. L. 97–34, §\u202f831(a)(1) , defined “United States real property interest” to also mean an interest in real property located in the Virgin Islands.\nSubsec. (c)(4)(B).  Pub. L. 97–34, §\u202f831(b) , substituted “Assets” for “Interests” in heading and in first sentence “Under regulations prescribed by the Secretary, assets held by a partnership, trust or estate shall be treated as held” for “United States real property interests held by a partnership, trust, or estate shall be treated as owned” before “proportionately by its partners or beneficiaries”, and inserted provisions respecting treatment of an asset as used or held for use in a trade or business by a partner or beneficiary when used or held by the partnership, trust, or estate in a trade or business and attributing chain treatment of such trade or business to partnership, trust, or estate which are above the first such entity.\nSubsec. (d)(1)(B).  Pub. L. 97–34, §\u202f831(c) , substituted “Exceptions” for “Exception where there is a carryover basis” in heading, inserted introductory text “Gain shall not be recognized under subparagraph (A)”, inserted cls. (i)(I) and (ii), and substituted cl. (i)(II) the basis of the distributed property in the hands of the distributee is no greater than the adjusted basis of such property before the distribution, increased by the amount of gain (if any) recognized by the distributing corporation” for subpar. (B) provision “Subparagraph (A) shall not apply if the basis of the distributed property in the hands of the distributee is the same as the adjusted basis of such property before the distribution increased by the amount of any gain recognized by the distributing corporation.”\nSubsec. (i).  Pub. L. 97–34, §\u202f831(d) , in par. (1)(A) substituted “holds a United States real property interest” for “has a permanent establishment in the United States”, in par. (1)(B) substituted “treaty obligation of the United States the foreign corporation is entitled to nondiscriminatory treatment with respect to that interest” for “treaty, such permanent establishment may not be treated less favorably than domestic corporations carrying on the same activities”, in par. (3) inserted subpar. (A), designated existing provisions as subpar. (B), in subpar. (B) substituted “such other conditions as the Secretary may prescribe by regulations with respect to the corporation or its shareholders” for “such conditions as may be prescribed by the Secretary”, and prescribed percentage interest required for making the requisite election and application of constructive ownership rules in determining existence of the required percentage of a class of interest.\nSubsecs. (j) to ( l ).  Pub. L. 97–34, §\u202f831(f) , (g), added subsecs. (j) to ( l ).\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 10101(f) of Pub. L. 117–169 , set out as a note under  section 11 of this title .\nAmendment by section 101(p)(1)–(6), (q) of  Pub. L. 115–141  effective as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015, div. Q of  Pub. L. 114–113 , to which such amendment relates, see  section 101(s) of Pub. L. 115–141 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f133(b) ,  Dec. 18, 2015 ,  129 Stat. 3055 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall take effect on  January 1, 2015 . Notwithstanding the preceding sentence, such amendments shall not apply with respect to the withholding requirement under section 1445 of the Internal Revenue Code of 1986 for any payment made before the date of the enactment of this Act [ Dec. 18, 2015 ]. \n \n “(2)   Amounts withheld on or before date of enactment .— In the case of a regulated investment company— “(A)  which makes a distribution after  December 31, 2014 , and before the date of the enactment of this Act, and \n \n “(B)  which would (but for the second sentence of paragraph (1)) have been required to withhold with respect to such distribution under section 1445 of such Code, \n \n\n such investment company shall not be liable to any person to whom such distribution was made for any amount so withheld and paid over to the Secretary of the Treasury.”\nAmendment by section 322(a)(1), (2)(A) of  Pub. L. 114–113  effective  Dec. 18, 2015 , and applicable to any disposition on and after  Dec. 18, 2015 , and any distribution by a real estate investment trust on or after such date which is treated as a deduction for a taxable year of such trust ending after such date, see  section 322(c)(1) of Pub. L. 114–113 , set out as a note under  section 857 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f322(c)(2) , (3),  Dec. 18, 2015 ,  129 Stat. 3102 ; as amended by  Pub. L. 115–141, div. U, title I, §\u202f101(p)(6) , (7),  Mar. 23, 2018 ,  132 Stat. 1167 , provided that: \n “(2)   Determination of domestic control .— The amendments made by subsection (b)(1) [amending this section] shall apply with respect to testing periods (as defined in section 897(h)(4)(D) of the Internal Revenue Code of 1986) ending on or after the date of the enactment of this Act [ Dec. 18, 2015 ].”\n[(3) Repealed.  Pub. L. 115–141, div. U, title I, §\u202f101(p)(6) ,  Mar. 23, 2018 ,  132 Stat. 1167 .]\nPub. L. 114–113, div. Q, title III, §\u202f323(c) ,  Dec. 18, 2015 ,  129 Stat. 3103 , provided that:  “The amendments made by this section [amending this section and  section 1445 of this title ] shall apply to dispositions and distributions after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 114–113, div. Q, title III, §\u202f325(b) ,  Dec. 18, 2015 ,  129 Stat. 3103 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions on or after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nPub. L. 113–295, div. A, title I, §\u202f133(b) ,  Dec. 19, 2014 ,  128 Stat. 4018 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall take effect on  January 1, 2014 . Notwithstanding the preceding sentence, such amendment shall not apply with respect to the withholding requirement under section 1445 of the Internal Revenue Code of 1986 for any payment made before the date of the enactment of this Act [ Dec. 19, 2014 ]. \n \n “(2)   Amounts withheld on or before date of enactment .— In the case of a regulated investment company— “(A)  which makes a distribution after  December 31, 2013 , and before the date of the enactment of this Act, and \n \n “(B)  which would (but for the second sentence of paragraph (1)) have been required to withhold with respect to such distribution under section 1445 of such Code, \n \n\n such investment company shall not be liable to any person to whom such distribution was made for any amount so withheld and paid over to the Secretary of the Treasury.”\nPub. L. 112–240, title III, §\u202f321(b) ,  Jan. 2, 2013 ,  126 Stat. 2332 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall take effect on  January 1, 2012 . Notwithstanding the preceding sentence, such amendment shall not apply with respect to the withholding requirement under section 1445 of the Internal Revenue Code of 1986 for any payment made before the date of the enactment of this Act [ Jan. 2, 2013 ]. \n \n “(2)   Amounts withheld on or before date of enactment .— In the case of a regulated investment company— “(A)  which makes a distribution after  December 31, 2011 , and before the date of the enactment of this Act; and \n \n “(B)  which would (but for the second sentence of paragraph (1)) have been required to withhold with respect to such distribution under section 1445 of such Code, \n \n\n such investment company shall not be liable to any person to whom such distribution was made for any amount so withheld and paid over to the Secretary of the Treasury.”\nPub. L. 111–312, title VII, §\u202f749(b) ,  Dec. 17, 2010 ,  124 Stat. 3320 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall take effect on  January 1, 2010 . Notwithstanding the preceding sentence, such amendment shall not apply with respect to the withholding requirement under section 1445 of the Internal Revenue Code of 1986 for any payment made before the date of the enactment of this Act [ Dec. 17, 2010 ]. \n \n “(2)   Amounts withheld on or before date of enactment .— In the case of a regulated investment company— “(A)  which makes a distribution after  December 31, 2009 , and before the date of the enactment of this Act [ Dec. 17, 2010 ]; and \n \n “(B)  which would (but for the second sentence of paragraph (1)) have been required to withhold with respect to such distribution under section 1445 of such Code, \n \n\n such investment company shall not be liable to any person to whom such distribution was made for any amount so withheld and paid over to the Secretary of the Treasury.”\nPub. L. 110–343, div. C, title II, §\u202f208(b) ,  Oct. 3, 2008 ,  122 Stat. 3865 , as amended by  Pub. L. 113–295, div. A, title II, §\u202f211(a) ,  Dec. 19, 2014 ,  128 Stat. 4032 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall take effect on  January 1, 2008 . Notwithstanding the preceding sentence, such amendment shall not apply with respect to the withholding requirement under section 1445 of the Internal Revenue Code of 1986 for any payment made before  October 4, 2008 . \n \n “(2)   Amounts withheld on or before date of enactment .— In the case of a regulated investment company— “(A)  which makes a distribution after  December 31, 2007 , and before  October 4, 2008 , and \n \n “(B)  which would (but for the second sentence of paragraph (1)) have been required to withhold with respect to such distribution under section 1445 of such Code, \n \n\n such investment company shall not be liable to any person to whom such distribution was made for any amount so withheld and paid over to the Secretary of the Treasury.”\nPub. L. 109–222, title V, §\u202f504(b) ,  May 17, 2006 ,  120 Stat. 355 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the provisions of section 411 of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ] to which it relates.”\nAmendment by  section 505(a) of Pub. L. 109–222  applicable to taxable years of qualified investment entities beginning after  Dec. 31, 2005 , except that no amount shall be required to be withheld under section 1441, 1442, or 1445 of the Internal Revenue Code of 1986 with respect to any distribution before  May 17, 2006  if such amount was not otherwise required to be withheld under any such section as in effect before such amendments, see  section 505(d) of Pub. L. 109–222 , set out as a note under  section 852 of this title .\nPub. L. 109–222, title V, §\u202f506(c) ,  May 17, 2006 ,  120 Stat. 358 , provided that:  “The amendments made by this section [amending this section and  section 1445 of this title ] shall apply to taxable years beginning after  December 31, 2005 , except that such amendments shall not apply to any distribution, or substitute dividend payment, occurring before the date that is 30 days after the date of the enactment of this Act [ May 17, 2006 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  section 411(c)(1) of Pub. L. 108–357  applicable to dividends with respect to taxable years of regulated investment companies beginning after  Dec. 31, 2004 , and amendment by section 411(c)(2)–(5) of  Pub. L. 108–357  effective after  Dec. 31, 2004 , see section 411(d)(1), (3) of  Pub. L. 108–357 , set out as a note under  section 871 of this title .\nAmendment by  section 418(a) of Pub. L. 108–357  applicable to any distribution by a real estate investment trust which is either treated as a deduction for a taxable year of such trust beginning after  Oct. 22, 2004 , or made after  Oct. 22, 2004 , and treated as a deduction under  section 860 of this title  for a taxable year of such trust beginning on or before  Oct. 22, 2004 , see  section 418(c) of Pub. L. 108–357 , as amended, set out as a note under  section 857 of this title .\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13203(d) of Pub. L. 103–66 , set out as a note under  section 55 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 631(e)(12) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 701(e)(4)(G) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 1810(f)(1) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nPub. L. 97–34, title VIII, §\u202f831(i) ,  Aug. 13, 1981 ,  95 Stat. 355 , provided that:  “The amendments made by this section [amending this section and sections 862 and 6039C of this title and provisions set out as a note below] shall apply to dispositions after  June 18, 1980 , in taxable years ending after such date.”\nPub. L. 96–499, title XI, §\u202f1125(a) , (b),  Dec. 5, 1980 ,  94 Stat. 2690 , provided that: \n “(a)   In general.— Except as provided in subsection (b), the amendments made by this subtitle [subtitle C (§§\u202f1121–1125) of title XI of  Pub. L. 96–499 , enacting this section and provisions set out as notes under this section, and amending sections 861, 871, 882 of this title] shall apply to dispositions after  June 18, 1980 . \n \n “(b)   Reporting.— The amendments made by section 1123 [enacting  section 6039C of this title  and amending  section 6652 of this title ] shall apply to 1980 and subsequent calendar years. In applying such amendments to 1980, such calendar year shall be treated as beginning on  June 19, 1980 , and ending on  December 31, 1980 .”\nPub. L. 115–141, div. U, title I, §\u202f101(p)(6) ,  Mar. 23, 2018 ,  132 Stat. 1167 , provided that:  “Section 322 of the Protecting Americans from Tax Hikes Act of 2015 [div. Q of  Pub. L. 114–113 ] is amended by striking subsections (b)(2) [amending this section] and (c)(3) [formerly set out in a note under this section], and the Internal Revenue Code of 1986 shall be applied as if such subsections, and amendments made thereby, had never been enacted.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor applicability of amendment by  section 701(e)(4)(G) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XII, §\u202f1228 ,  Oct. 22, 1986 ,  100 Stat. 2560 , as amended by  Pub. L. 100–647, title I, §\u202f1012(m) ,  Nov. 10, 1988 ,  102 Stat. 3513 , provided that: \n “(a)   In General .— For purposes of section 897 of the Internal Revenue Code of 1986, gain shall not be recognized on the transfer, sale, exchange, or other disposition, of shares of stock of a United States real property holding company, if— “(1)  such United States real property holding company is a Delaware corporation incorporated on  January 17, 1984 , \n \n “(2)  the transfer, sale, exchange, or other disposition is to any member of a qualified ownership group, \n \n “(3)  the recipient of the share of stock elects, for purposes of such section 897, a carryover basis in the transferred shares, \n \n “(4)  the transfer, sale, exchange, or other disposition is part of a single integrated plan, whereby the stock of the corporation described in paragraph (1) becomes owned directly by the 2 corporations specifically referred to in subsection (b) or by such 2 corporations and by 1 or both of their jointly owned direct subsidiaries, \n \n “(5)  within 20 days after each transfer, sale, exchange, or other disposition, the person making such transfer, sale, exchange, or other disposition notifies the Internal Revenue Service of the transaction, the date of the transaction, the basis of the stock involved, the holding period for such stock, and such other information as the Internal Revenue Service may require, and \n \n “(6)  the integrated plan is completed before the date 4 years after the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988 [ Nov. 10, 1988 ]. \n \n\n In the case of any underpayment attributable to a failure to meet any requirement of this subsection, the period during which such underpayment may be assessed shall in no event expire before the date 5 years after the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988. \n \n “(b)   Member of a Qualified Ownership Group .— For purposes of this section, the term ‘member of a qualified ownership group’ means a corporation incorporated on  June 16, 1890 , under the laws of the Netherlands or a corporation incorporated on  October 18, 1897 , under the laws of the United Kingdom or any corporation owned directly or indirectly by either or both such corporations. \n \n “(c)  [Repealed.  Pub. L. 100–647, title I, §\u202f1012(m)(2) ,  Nov. 10, 1988 ,  102 Stat. 3513 .] \n \n “(d)   Effective Date .— The provisions of this section shall take effect on the date of the enactment of this section [ Oct. 22, 1986 ].”\nPub. L. 96–499, title XI, §\u202f1125(c) ,  Dec. 5, 1980 ,  94 Stat. 2690 , as amended by  Pub. L. 97–34, title VIII, §\u202f831(h) ,  Aug. 13, 1981 ,  95 Stat. 355 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), after  December 31, 1984 , nothing in section 894(a) or 7852(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] or in any other provision of law shall be treated as requiring, by reason of any treaty obligation of the United States, an exemption from (or reduction of) any tax imposed by section 871 or 882 of such Code on a gain described in section 897 of such Code. \n \n “(2)   Special rule for treaties renegotiated before 1985.— If— “(A)  any treaty (hereinafter in this paragraph referred to as the ‘old treaty’) is renegotiated to resolve conflicts between such treaty and the provisions of section 897 of the Internal Revenue Code of 1986, and \n \n “(B)  the new treaty is signed on or after  January 1, 1981 , and before  January 1, 1985 , \n \n\n then paragraph (1) shall be applied with respect to obligations under the old treaty by substituting for ‘ December 31, 1984 ’ the date (not later than 2 years after the new treaty was signed) specified in the new treaty (or accompanying exchange of notes).”\nPub. L. 96–499, title XI, §\u202f1125(d) ,  Dec. 5, 1980 ,  94 Stat. 2691 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— In the case of any disposition after  December 31, 1979 , of a United States real property interest (as defined in section 897(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) to a related person (within the meaning of section 453(f)(1) of such Code), the basis of the interest in the hands of the person acquiring it shall be reduced by the amount of any nontaxed gain. \n \n “(2)   Nontaxed gain.— For purposes of paragraph (1), the term ‘nontaxed gain’ means any gain which is not subject to tax under section 871(b)(1) or 882(a)(1) of such Code— “(A)  because the disposition occurred before  June 19, 1980 , or \n \n “(B)  because of any treaty obligation of the United States.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'NONRESIDENT ALIENS AND FOREIGN CORPORATIONS'},
  'content': 'For purposes of this title, the taxable year of any specified foreign corporation shall be the required year determined under subsection (c).\nFor purposes of subparagraph (A), the rules of subsections (a) and (b) of section 958 shall apply in determining ownership.\nThe term “United States shareholder” has the meaning given to such term by section 951(b), except that, in the case of a foreign corporation having related person insurance income (as defined in section 953(c)(2)), the Secretary may treat any person as a United States shareholder for purposes of this section if such person is treated as a United States shareholder under section 953(c)(1).\nA specified foreign corporation may elect, in lieu of the taxable year under paragraph (1)(A), a taxable year beginning 1 month earlier than the majority U.S. shareholder year.\n2004—Subsec. (b)(1)(A).  Pub. L. 108–357, §\u202f413(c)(13)(A) , amended subpar. (A) generally. Prior to amendment, subpar (A) read as follows:\n“(A) which is—\n“(i) treated as a controlled foreign corporation for any purpose under subpart F of part III of this subchapter, or\n“(ii) a foreign personal holding company (as defined in section 552), and”.\nSubsec. (b)(2)(B).  Pub. L. 108–357, §\u202f413(c)(13)(B) , struck out “and sections 551(f) and 554, whichever are applicable,” after “section 958”.\nSubsec. (b)(3).  Pub. L. 108–357, §\u202f413(c)(13)(C) , reenacted heading without change, struck out “(A) In general” before “The term”, and struck out heading and text of subpar. (B). Text read as follows: “In the case of any foreign personal holding company (as defined in section 552) which is not a specified foreign corporation by reason of paragraph (1)(A)(i), the term ‘United States shareholder’ means any person who is treated as a United States shareholder under section 551.”\nSubsec. (c).  Pub. L. 108–357, §\u202f413(c)(13)(D) , reenacted heading without change and amended text of subsec. (c) generally, substituting provisions stating general rule and relating to 1-month deferral and majority U.S. shareholder year, consisting of pars. (1) to (3), for provisions stating general rule and relating to 1-month deferral and majority U.S. shareholder year, consisting of par. (1), and provisions relating to required year in the case of a foreign personal holding company, consisting of par. (2).\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 101–239, title VII, §\u202f7401(d) ,  Dec. 19, 1989 ,  103 Stat. 2357 , provided that: \n “(1)   In general .— The amendments made by this section [enacting this section and amending  section 563 of this title ] shall apply to taxable years of foreign corporations beginning after  July 10, 1989 . \n \n “(2)   Special rules .— If any foreign corporation is required by the amendments made by this section to change its taxable year for its first taxable year beginning after  July 10, 1989 — “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as having been made with the consent of the Secretary of the Treasury or his delegate, and \n \n “(C)  if, by reason of such change, any United States person is required to include in gross income for 1 taxable year amounts attributable to 2 taxable years of such foreign corporation, the amount which would otherwise be required to be included in gross income for such 1 taxable year by reason of the short taxable year of the foreign corporation resulting from such change shall be included in gross income ratably over the 4-taxable-year period beginning with such 1 taxable year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'If the taxpayer chooses to have the benefits of this subpart, the tax imposed by this chapter shall, subject to the limitation of section 904, be credited with the amounts provided in the applicable paragraph of subsection (b) plus, in the case of a corporation, the taxes deemed to have been paid under section 960. Such choice for any taxable year may be made or changed at any time before the expiration of the period prescribed for making a claim for credit or refund of the tax imposed by this chapter for such taxable year. The credit shall not be allowed against any tax treated as a tax not imposed by this chapter under section 26(b).\nIn the case of a citizen of the United States and of a domestic corporation, the amount of any income, war profits, and excess profits taxes paid or accrued during the taxable year to any foreign country or to any possession of the United States; and\nIn the case of a resident of the United States and in the case of an individual who is a bona fide resident of Puerto Rico during the entire taxable year, the amount of any such taxes paid or accrued during the taxable year to any possession of the United States; and\nIn the case of an alien resident of the United States and in the case of an alien individual who is a bona fide resident of Puerto Rico during the entire taxable year, the amount of any such taxes paid or accrued during the taxable year to any foreign country; and\nIn the case of any nonresident alien individual not described in section 876 and in the case of any foreign corporation, the amount determined pursuant to section 906; and\nIn the case of any person described in paragraph (1), (2), (3), or (4), who is a member of a partnership or a beneficiary of an estate or trust, the amount of his proportionate share of the taxes (described in such paragraph) of the partnership or the estate or trust paid or accrued during the taxable year to a foreign country or to any possession of the United States, as the case may be. Under rules or regulations prescribed by the Secretary, in the case of any foreign trust of which the settlor or another person would be treated as owner of any portion of the trust under subpart E but for section 672(f), the allocable amount of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the settlor or such other person in respect of trust income.\nFor purposes of this subpart, dividends from a DISC or former DISC (as defined in section 992(a)) shall be treated as dividends from a foreign corporation to the extent such dividends are treated under part I as income from sources without the United States.\nFor purposes of paragraph (1), the term “foreign mineral income” means income derived from the extraction of minerals from mines, wells, or other natural deposits, the processing of such minerals into their primary products, and the transportation, distribution, or sale of such minerals or primary products. Such term includes, but is not limited to\u202f 1 1 \u202fSo in original. Probably should be followed by a comma.  that portion of the taxpayer’s distributive share of the income of partnerships attributable to foreign mineral income.\nFor purposes of paragraph (1), a corporation shall be treated as a possessions corporation for any period during which an election under section 936 (as in effect on the day before the date of the enactment of the Tax Technical Corrections Act of 2018) applied to such corporation, during which section 931 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1976) applied to such corporation, or during which section 957(c) (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986) applied to such corporation.\nSections 275 and 78 shall not apply to any tax which is not allowable as a credit under subsection (a) by reason of this subsection.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, including regulations which treat income paid through 1 or more entities as derived from a foreign country to which this subsection applies if such income was, without regard to such entities, derived from such country.\nFor purposes of this paragraph, the term “withholding tax” includes any tax determined on a gross basis; but does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis.\nThe Secretary may prescribe such regulations as may be appropriate to carry out this paragraph, including regulations to prevent the abuse of the exception provided by this paragraph and to treat other taxes as qualified taxes.\nFor purposes of this subsection, the rules of paragraphs (3) and (4) of section 246(c) shall apply.\nIf a person’s holding period is reduced by reason of the application of the rules of section 246(c)(4) to any contract for the bona fide sale of stock, the determination of whether such person’s holding period meets the requirements of paragraph (2) with respect to taxes deemed paid under section 960 shall be made as of the date such contract is entered into.\nSections 275 and 78 shall not apply to any tax which is not allowable as a credit under subsection (a) by reason of this subsection.\nParagraph (1) shall not apply to any qualified tax with respect to any property held in the active conduct in a foreign country of a business as a dealer in such property.\nThe Secretary may prescribe such regulations as may be appropriate to carry out this paragraph, including regulations to prevent the abuse of the exception provided by this paragraph and to treat other taxes as qualified taxes.\nThe Secretary may by regulation provide that paragraph (1) shall not apply to property where the Secretary determines that the application of paragraph (1) to such property is not necessary to carry out the purposes of this subsection.\nRules similar to the rules of paragraphs (5), (6), and (7) of subsection (k) shall apply for purposes of this subsection.\nHolding periods shall be determined for purposes of this subsection without regard to section 1235 or any similar rule.\nThe basis difference with respect to any relevant foreign asset shall be allocated to taxable years using the applicable cost recovery method under this chapter.\nIn the case of a relevant foreign asset with respect to which the amount described in clause (i)(II) exceeds the amount described in clause (i)(I), such excess shall be taken into account under this subsection as a basis difference of a negative amount.\nIn the case of a covered asset acquisition described in paragraph (2)(A), the covered asset acquisition shall be treated for purposes of this subparagraph as occurring at the close of the acquisition date (as defined in section 338(h)(2)).\nFor purposes of this section, the term “relevant foreign asset” means, with respect to any covered asset acquisition, any asset (including any goodwill, going concern value, or other intangible) with respect to such acquisition if income, deduction, gain, or loss attributable to such asset is taken into account in determining the foreign income tax referred to in paragraph (1).\nFor purposes of this section, the term “foreign income tax” means any income, war profits, or excess profits tax paid or accrued to any foreign country or to any possession of the United States.\nSections 275 and 78 shall not apply to any tax which is not allowable as a credit under subsection (a) by reason of this subsection.\nThe Secretary may issue such regulations or other guidance as is necessary or appropriate to carry out the purposes of this subsection, including to exempt from the application of this subsection certain covered asset acquisitions, and relevant foreign assets with respect to which the basis difference is de minimis.\nSection 936, referred to in subsec. (g)(2), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(1)(C) ,  Mar. 23, 2018 ,  132 Stat. 1206 .\nThe date of the enactment of the Tax Technical Corrections Act of 2018, referred to in subsec. (g)(2), is the date of enactment of div. U of  Pub. L. 115–141 , which was approved  Mar. 23, 2018 .\nThe date of the enactment of the Tax Reform Act of 1976, referred to in subsec. (g)(2), is the date of enactment of  Pub. L. 94–455 , which was approved  Oct. 4, 1976 .\nThe date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (g)(2), is the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\nThe Arms Export Control Act, referred to in subsec. (j)(2)(A)(i), is  Pub. L. 90–269 ,  Oct. 22, 1968 ,  82 Stat. 1320 , which is classified principally to chapter 39 (§\u202f2751 et seq.) of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under  section 2751 of Title 22  and Tables.\nSection 6(j) of the Export Administration Act of 1979, referred to in subsec. (j)(2)(A)(iv), was classified to  section 4605(j) of Title 50 , War and National Defense, prior to repeal by  Pub. L. 115–232, div. A, title XVII, §\u202f1766(a) ,  Aug. 13, 2018 ,  132 Stat. 2232 .\nSections 15(a) and 15C(a) of the Securities Exchange Act of 1934, referred to in subsec. (k)(4)(A)(i), (ii), are classified to sections 78 o (a) and 78 o –5(a), respectively, of Title 15, Commerce and Trade.\n2018—Subsec. (g)(2).  Pub. L. 115–141  inserted “(as in effect on the day before the date of the enactment of the Tax Technical Corrections Act of 2018)” after “section 936”.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f14301(c)(7) , substituted “section 960” for “sections 902 and 960”.\nSubsec. (e)(2).  Pub. L. 115–97, §\u202f14301(c)(8) , substituted “but is not limited to that portion” for “but is not limited to—\n“(A) dividends received from a foreign corporation in respect of which taxes are deemed paid by the taxpayer under section 902, to the extent such dividends are attributable to foreign mineral income, and\n“(B) that portion”.\nSubsec. (f).  Pub. L. 115–97, §\u202f14301(c)(9) , substituted “section 960” for “sections 902 and 960” in introductory provisions.\nSubsec. (j)(1)(A).  Pub. L. 115–97, §\u202f14301(c)(10) , struck out “902 or” after “under section”.\nSubsec. (j)(1)(B).  Pub. L. 115–97, §\u202f14301(c)(11) , substituted “section 960” for “sections 902 and 960”.\nSubsec. (k)(2).  Pub. L. 115–97, §\u202f14301(c)(12) , struck out “,\u2000902,” after “under section 853” in introductory provisions.\nSubsec. (k)(6).  Pub. L. 115–97, §\u202f14301(c)(13) , struck out “902 or” after “under section”.\nSubsec. (m)(1)(B).  Pub. L. 115–97, §\u202f14301(c)(14) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “in the case of a foreign income tax paid by a section 902 corporation (as defined in section 909(d)(5)), shall not be taken into account for purposes of section 902 or 960.”\n2010—Subsecs. (m), (n).  Pub. L. 111–226  added subsec. (m) and redesignated former subsec. (m) as (n).\n2007—Subsec. (h).  Pub. L. 110–172  struck out subsec. (h), which read as follows: “No credit shall be allowed under this section for any income, war profits, and excess profits taxes paid or accrued with respect to the foreign trade income (within the meaning of section 923(b)) of a FSC, other than section 923(a)(2) non-exempt income (within the meaning of section 927(d)(6)).”\n2005—Subsec. ( l )(2)(C)(i).  Pub. L. 109–135  struck out “if such security were stock” after “paragraph (4) thereof”.\n2004—Subsec. (b)(5).  Pub. L. 108–357, §\u202f405(b) , substituted “any person” for “any individual”.\nSubsec. (k).  Pub. L. 108–357, §\u202f832(b) , inserted “on dividends” after “taxes” in heading.\nSubsec. (k)(1)(A)(i).  Pub. L. 108–311, §\u202f406(g)(1) , substituted “31-day period” for “30-day period”.\nSubsec. (k)(3)(B).  Pub. L. 108–311, §\u202f406(g)(2) , substituted “91-day period” for “90-day period” and “31-day period” for “30-day period”.\nSubsecs. ( l ), (m).  Pub. L. 108–357, §\u202f832(a) , added subsec. ( l ) and redesignated former subsec. ( l ) as (m).\n2000—Subsec. (j)(5).  Pub. L. 106–200  added par. (5).\n1998—Subsec. (k)(4)(A).  Pub. L. 105–206  substituted “business as a securities dealer” for “securities business” in introductory provisions.\n1997—Subsec. (k).  Pub. L. 105–34, §\u202f1053(a) , added subsec. (k). Former subsec. (k) redesignated ( l ).\nSubsec. ( l ).  Pub. L. 105–34, §\u202f1053(a) , redesignated subsec. (k) as ( l ).\nSubsec. ( l )(4).  Pub. L. 105–34, §\u202f1142(e)(4) , which directed amendment of subsec. (k)(4) by substituting “foreign corporation or partnership” for “foreign corporation”, was executed to subsec. ( l )(4) to reflect the probable intent of Congress and the redesignation of subsec. (k) as ( l ) by  Pub. L. 105–34, §\u202f1053(a) . See above.\n1996—Subsec. (b)(5).  Pub. L. 104–188  inserted at end “Under rules or regulations prescribed by the Secretary, in the case of any foreign trust of which the settlor or another person would be treated as owner of any portion of the trust under subpart E but for section 672(f), the allocable amount of any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the settlor or such other person in respect of trust income.”\n1993—Subsec. (j)(2)(C).  Pub. L. 103–149  struck out heading and text of subpar. (C). Text read as follows:\n“(i)  In general .—In addition to any period during which this subsection would otherwise apply to South Africa, this subsection shall apply to South Africa during the period—\n“(I) beginning on  January 1, 1988 , and\n“(II) ending on the date the Secretary of State certifies to the Secretary of the Treasury that South Africa meets the requirements of section 311(a) of the Comprehensive Anti-Apartheid Act of 1986 (as in effect on the date of the enactment of this subparagraph).\n“(ii)  South africa defined .—For purposes of clause (i), the term ‘South Africa’ has the meaning given to such term by paragraph (6) of section 3 of the Comprehensive Anti-Apartheid Act of 1986 (as so in effect).”\n1988—Subsec. (g)(2).  Pub. L. 100–647, §\u202f1012(j) , inserted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” after “section 957(c)”.\nSubsec. (j)(3).  Pub. L. 100–647, §\u202f2003(c)(1) , inserted “,\u2000etc.” at end of heading and substituted “Sections 275 and 78” for “Section 275” in text.\n1987—Subsec. (j)(1).  Pub. L. 100–203, §\u202f10231(b) , substituted “during which” for “to which” in subpar. (A) and “such country” for “any country so identified” in subpar. (B).\nSubsec. (j)(2)(C).  Pub. L. 100–203, §\u202f10231(a) , added subpar. (C).\n1986—Subsec. (h).  Pub. L. 99–514, §\u202f1876(p)(2) , inserted closing parenthesis after “section 927(d)(6)”.\nSubsec. (i).  Pub. L. 99–514, §\u202f1204(a) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (i)(3).  Pub. L. 99–514, §\u202f112(b)(3) , substituted “section 642(a)” for “section 642(a)(1)”.\nSubsec. (j).  Pub. L. 99–509  added subsec. (j). Former subsec. (j) redesignated (k).\nPub. L. 99–514, §\u202f1204(a) , redesignated former subsec. (i) as (j).\nSubsec. (k).  Pub. L. 99–509  redesignated former subsec. (j) as (k).\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f612(e)(1) , substituted “section 26(b)” for “section 25(b)”.\nPub. L. 98–369, §\u202f474(r)(20) , substituted “The credit shall not be allowed against any tax treated as a tax not imposed by this chapter under section 25(b)” for “The credit shall not be allowed against the tax imposed by section 56 (relating to corporate minimum tax), against the tax imposed for the taxable year under section 72(m)(5)(B) (relating to 10 percent tax on premature distributions to owner-employees) section 72(q)(1) (relating to 5-percent tax on premature distributions under annuity contracts),, against the tax imposed by section 402(e) (relating to tax on lump sum distributions), against the tax imposed for the taxable year by section 408(f) (relating to additional tax on income from certain retirement accounts), against the tax imposed by section 531 (relating to the tax on accumulated earnings), against the additional tax imposed for the taxable year under section 1351 (relating to recoveries of foreign expropriation losses), or against the personal holding company tax imposed by section 541”.\nPub. L. 98–369, §\u202f713(c)(1)(C) , substituted “premature distributions to key employees” for “premature distributions to owner-employees”.\nSubsecs. (h), (i).  Pub. L. 98–369, §\u202f801(d)(1) , added subsec. (h) and redesignated former subsec. (h) as (i).\n1982—Subsec. (a).  Pub. L. 97–248  substituted “(relating to corporate minimum tax)” for “(relating to minimum tax for tax preferences)” after “section 56”, and inserted “section 72(q)(1) (relating to 5-percent tax on premature distributions under annuity contracts),” after “owner employees)”.\n1978—Subsec. (g)(1).  Pub. L. 95–600, §\u202f701(u)(1)(A) , inserted provisions prohibiting a deduction for any tax of a foreign country or possession of the United States which is paid or accrued with respect to any distribution from a corporation if a dividends received deduction is allowable with respect to that distribution from a corporation under part VIII of subchapter B.\nSubsec. (g)(2).  Pub. L. 95–600, §\u202f701(u)(1)(B) , inserted provision relating to application of  section 957(c) of this title .\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1031(b)(1), 1901(b)(37)(A), struck out “under section 1333 (relating to war loss recoveries) or” after “imposed for the taxable year” and “applicable” after “subject to the”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1031(b)(1) , struck out “applicable” after “Subject to the”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1051(d)(1) , struck out provisions relating to corporations receiving a large percentage of their gross receipts from sources within a possession of the United States and a corporation organized under the China Trade Act, 1922 (15 U.S.C. chapter 4).\nSubsecs. (g), (h).  Pub. L. 94–455 , §§\u202f1051(d)(2), 1901(b)(1)(H)(iii), added subsec. (g), redesignated former subsec. (g) as (h), and, as redesignated, substituted “section 642(a)(1)” for “section 642(a)(2)” in par. (3).\n1975—Subsecs. (f), (g).  Pub. L. 94–12  added subsec. (f) and redesignated former subsec. (f) as (g).\n1974—Subsec. (a).  Pub. L. 93–460  inserted references to the tax imposed for the taxable year under section 72(m)(5)(B) (relating to 10 percent tax on premature distributions to owner-employees), the tax imposed for the taxable year by section 408(f) (relating to additional tax on income from certain retirement accounts), and the tax imposed by section 402(e) (relating to tax on lump sum distributions).\n1971—Subsec. (d).  Pub. L. 92–178  inserted provision for treatment of dividends from a DISC or former DISC as dividends from a foreign corporation to the extent such dividends are treated under part I as income from sources without the United States.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f301(b)(9) , inserted “against the tax imposed by section 56 (relating to minimum tax for tax preferences),” after “not be allowed” in last sentence.\nSubsecs. (e), (f).  Pub. L. 91–172, §\u202f506(a) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1966—Subsec. (a).  Pub. L. 89–384  added the additional tax imposed under section 1351 (relating to recoveries of foreign expropriation losses) to the list of taxes against which the foreign tax credit may not be allowed.\nSubsec. (b)(3).  Pub. L. 89–809, §\u202f106(b)(1) , struck out provisions which made the allowance of the credit dependent upon whether the foreign country of which the alien resident was a citizen or subject, in imposing such taxes, allowed a similar credit to citizens of the United States residing in such country.\nSubsec. (b)(4), (5).  Pub. L. 89–809, §\u202f106(a)(4) , (5), added par. (4), redesignated former par. (4) as (5) and inserted reference to par. (4).\nSubsecs. (c) to (e).  Pub. L. 89–809, §\u202f106(b)(2) , added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.\n1964—Subsec. (d)(1).  Pub. L. 88–272  inserted reference to section 275.\n1962—Subsec. (a).  Pub. L. 87–834, §\u202f12(b)(1) , substituted “sections 902 and 960” for “section 902”.\nSubsec. (d)(4).  Pub. L. 87–834, §\u202f9(d)(3) , added par. (4).\n1960—Subsec. (a).  Pub. L. 86–780, §\u202f3(a) , (b), inserted “applicable” before “limitation” and substituted “Such choice for any taxable year may be made or changed at any time before the expiration of the period prescribed for making a claim for credit or refund of the tax imposed by this chapter for such taxable year” for “Such choice may be made or changed at any time prior to the expiration of the period prescribed for making a claim for credit or refund of the tax against which the credit is allowable.”\nSubsec. (b).  Pub. L. 86–780, §\u202f3(b) , inserted “applicable” before “limitation”.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 111–226, title II, §\u202f212(b) ,  Aug. 10, 2010 ,  124 Stat. 2398 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to covered asset acquisitions (as defined in section 901(m)(2) of the Internal Revenue Code of 1986, as added by this section) after  December 31, 2010 . \n \n “(2)   Transition rule .— The amendments made by this section shall not apply to any covered asset acquisition (as so defined) with respect to which the transferor and the transferee are not related if such acquisition is— “(A)  made pursuant to a written agreement which was binding on  January 1, 2011 , and at all times thereafter, \n \n “(B)  described in a ruling request submitted to the Internal Revenue Service on or before  July 29, 2010 , or \n \n “(C)  described on or before  January 1, 2011 , in a public announcement or in a filing with the Securities and Exchange Commission. \n \n \n “(3)   Related persons .— For purposes of this subsection, a person shall be treated as related to another person if the relationship between such persons is described in section 267 or 707(b) of the Internal Revenue Code of 1986.”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title IV, §\u202f405(c) ,  Oct. 22, 2004 ,  118 Stat. 1498 , provided that:  “The amendments made by this section [amending this section and  section 902 of this title ] shall apply to taxes of foreign corporations for taxable years of such corporations beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title VIII, §\u202f832(c) ,  Oct. 22, 2004 ,  118 Stat. 1588 , provided that:  “The amendments made by this section [amending this section] shall apply to amounts paid or accrued more than 30 days after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 108–311  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 406(h) of Pub. L. 108–311 , set out as a note under  section 55 of this title .\nPub. L. 106–200, title VI, §\u202f601(b) ,  May 18, 2000 ,  114 Stat. 305 , provided that:  “The amendment made by this section [amending this section] shall apply on or after  February 1, 2001 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 1053(a) of Pub. L. 105–34  applicable to dividends paid or accrued more than 30 days after  Aug. 5, 1997 , see  section 1053(c) of Pub. L. 105–34 , set out as a note under  section 853 of this title .\nAmendment by  section 1142(e)(4) of Pub. L. 105–34  applicable to annual accounting periods beginning after  Aug. 5, 1997 , see  section 1142(f) of Pub. L. 105–34 , set out as a note under  section 318 of this title .\nAmendment by  Pub. L. 104–188  effective  Aug. 20, 1996 , with exception for certain trusts, see  section 1904(d) of Pub. L. 104–188 , set out as a note under  section 643 of this title .\nAmendment by  section 1012(j) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title II, §\u202f2003(c)(2) ,  Nov. 10, 1988 ,  102 Stat. 3598 , provided that:  “The amendments made by paragraph (1) [amending this section] shall take effect on  January 1, 1987 .”\nPub. L. 100–203, title X, §\u202f10231(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–419 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  section 112(b)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title XII, §\u202f1204(b) ,  Oct. 22, 1986 ,  100 Stat. 2532 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to foreign taxes paid or accrued in taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1876(p)(2) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–509, title VIII, §\u202f8041(c) ,  Oct. 21, 1986 ,  100 Stat. 1963 , provided that:  “The amendments made by this section [amending this section and  section 952 of this title ] shall take effect on  January 1, 1987 .”\nAmendment by  section 474(r)(20) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 612(e)(1) of Pub. L. 98–369  applicable to interest paid or accrued after  Dec. 31, 1984 , on indebtedness incurred after  Dec. 31, 1984 , see  section 612(g) of Pub. L. 98–369 , set out as an Effective Date note under  section 25 of this title .\nAmendment by  section 713(c)(1)(C) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  section 801(d)(1) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  section 201(d)(8)(A) of Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nAmendment by  section 265(b)(2)(A)(iv) of Pub. L. 97–248  applicable to distributions after  Dec. 31, 1982 , see  section 265(c)(2) of Pub. L. 97–248 , set out as a note under  section 72 of this title .\nPub. L. 95–600, title VII, §\u202f701(u)(1)(C) ,  Nov. 6, 1978 ,  92 Stat. 2913 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply as if included in section 901(g) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as added by section 1051(d)(2) of the Tax Reform Act of 1976 [ section 1051(d)(2) of Pub. L. 94–455 ]. The amendments made by subparagraph (B) [amending this section] shall apply to distributions made after the date of the enactment of this Act [ Nov. 6, 1978 ] in taxable years ending after such date.”\nAmendment by  section 1031(b)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , with certain exceptions, see  section 1031(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nAmendment by  section 1051(d)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , with certain exceptions, and the provisions of subsec. (g) not to apply to any tax imposed by a possession of the United States with respect to the complete liquidation occurring before  Jan. 1, 1979 , of a corporation to the extent that such tax is attributable to earnings and profits accumulated by such corporation during periods ending before  Jan. 1, 1976 , see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by section 1901(b)(1)(H)(iii), (37)(A) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years ending after  Dec. 31, 1974 , see  section 601(d) of Pub. L. 94–12 , set out as an Effective Date note under  section 907 of this title .\nAmendment by  section 2001(g)(2)(C) of Pub. L. 93–406 , which inserted reference to the tax imposed for the taxable year under section 72(m)(5)(B) (relating to 10 percent tax on premature distributions to owner-employees), applicable to distributions made in taxable years beginning after  Dec. 31, 1975 , see  section 2001(i)(4) of Pub. L. 93–406 , set out as a note under  section 72 of this title .\nAmendment by  section 2002(g)(3) of Pub. L. 93–406 , which inserted reference to the tax imposed for the taxable year by section 408(f) (relating to additional tax on income from certain retirement accounts), effective on  Jan. 1, 1975 , see  section 2002(i)(2) of Pub. L. 93–406 , set out as an Effective Date note under  section 4973 of this title .\nAmendment by  section 2005(c)(5) of Pub. L. 93–406 , which inserted reference to the tax imposed for the taxable year under section 402(e) (relating to tax on lump sum distributions), applicable only with respect to distributions or payments made after  Dec. 31, 1973 , in taxable years beginning after  Dec. 31, 1973 , see  section 2005(d) of Pub. L. 93–406 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before  Jan. 1, 1972 , see  section 507 of Pub. L. 92–178 , set out as an Effective Date note under  section 991 of this title .\nAmendment by  section 301(b)(9) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1969 , see  section 301(c) of Pub. L. 91–172 , set out as a note under  section 5 of this title .\nPub. L. 91–172, title V, §\u202f506(c) ,  Dec. 30, 1969 ,  83 Stat. 635 , provided that:  “The amendments made by this section [amending this section and  section 904 of this title ] shall apply with respect to taxable years beginning after  December 31, 1969 .”\nAmendment by section 106(a)(4), (5) of  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 106(a)(6) of Pub. L. 89–809 , set out as a note under  section 874 of this title .\nPub. L. 89–809, title I, §\u202f106(b)(4) ,  Nov. 13, 1966 ,  80 Stat. 1570 , provided that:  “The amendments made by this subsection (other than paragraph (3)) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1966 . The amendment made by paragraph (3) [amending  section 2014 of this title ] shall apply with respect to estates of decedents dying after the date of enactment of this Act [ Nov. 13, 1966 ].”\nAmendment by  Pub. L. 89–384  applicable with respect to amounts received after  December 31, 1964 , in respect of foreign expropriation losses (as defined in  section 1351(b) of this title ) sustained after  December 31, 1958 , see  section 2 of Pub. L. 89–384 , set out as an Effective Date note under  section 1351 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 207(c) of Pub. L. 88–272 , set out as a note under  section 164 of this title .\nAmendment by  section 9(d)(3) of Pub. L. 87–834  applicable in respect of any distribution received by a domestic corporation after  Dec. 31, 1964 , and in respect of any distribution received by a domestic corporation before  Jan. 1, 1965 , in a taxable year of such corporation beginning after  Dec. 31, 1962 , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after  Dec. 31, 1962 , see  section 9(e) of Pub. L. 87–834 , set out as an Effective Date note under  section 78 of this title .\nAmendment by  section 12(b)(1) of Pub. L. 87–834  applicable with respect to taxable years of foreign corporations beginning after  Dec. 31, 1962 , and to taxable years of United States shareholders within which or with which such taxable years of such foreign corporations end, see  section 12(c) of Pub. L. 87–834 , set out as an Effective Date note under  section 951 of this title .\nAmendment by  section 3(a) of Pub. L. 86–780  applicable to taxable years beginning after  Dec. 31, 1960 , and amendment by  section 3(b) of Pub. L. 86–780  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 4 of Pub. L. 86–780 , set out as a note under  section 904 of this title .\nAmendment by  section 4(b)(8)(A) of Pub. L. 103–149  not to be construed as affecting any of the transitional rules contained in Revenue Ruling 92–62 which apply by reason of the termination of the period for which subsec. (j) of this section was applicable to South Africa, see  section 4(b)(8)(B) of Pub. L. 103–149  set out in a Repeal of Chapter; South African Democratic Transition Support note under  section 5001 of Title 22 , Foreign Relations and Intercourse.\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 286 ;  Pub. L. 86–780, §\u202f6(b)(2) ,  Sept. 14, 1960 ,  74 Stat. 1016 ;  Pub. L. 87–834, §\u202f9(a) ,  Oct. 16, 1962 ,  76 Stat. 999 ;  Pub. L. 91–684 , §§\u202f1, 2,  Jan. 12, 1971 ,  84 Stat. 2068 , 2069;  Pub. L. 94–12, title VI, §\u202f602(c)(6) ,  Mar. 29, 1975 ,  89 Stat. 59 ;  Pub. L. 94–455, title X, §\u202f1033(a) ,  Oct. 4, 1976 ,  90 Stat. 1626 ;  Pub. L. 99–514, title XII, §\u202f1202(a) ,  Oct. 22, 1986 ,  100 Stat. 2528 ;  Pub. L. 100–647, title I, §\u202f1012(b)(1) , (2),  Nov. 10, 1988 ,  102 Stat. 3496 ;  Pub. L. 105–34, title XI , §§\u202f1113(a), 1163(a),  Aug. 5, 1997 ,  111 Stat. 970 , 987;  Pub. L. 108–357, title IV, §\u202f405(a) ,  Oct. 22, 2004 ,  118 Stat. 1498 , related to deemed paid credit where domestic corporation owns 10 percent or more of voting stock of foreign corporation.\nRepeal applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 78 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of this part and of sections 164(a) and 275(a), the term “income, war profits, and excess profits taxes” shall include a tax paid in lieu of a tax on income, war profits, or excess profits otherwise generally imposed by any foreign country or by any possession of the United States.\n2004— Pub. L. 108–357  substituted “164(a)” for “114, 164(a),”.\n2000— Pub. L. 106–519  substituted “114, 164(a),” for “164(a)”.\n1988— Pub. L. 100–647  substituted “this part” for “this subpart”.\n1964— Pub. L. 88–272  substituted “sections 164(a) and 275(a)” for “section 164(b)”.\nAmendment by  Pub. L. 108–357  applicable to transactions after  Dec. 31, 2004 , see  section 101(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 106–519  applicable to transactions after  Sept. 30, 2000 , with special rules relating to existing foreign sales corporations, see  section 5 of Pub. L. 106–519 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 207(c) of Pub. L. 88–272 , set out as a note under  section 164 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'The total amount of the credit taken under section 901(a) shall not exceed the same proportion of the tax against which such credit is taken which the taxpayer’s taxable income from sources without the United States (but not in excess of the taxpayer’s entire taxable income) bears to his entire taxable income for the same taxable year.\nFor purposes of subsection (a), the taxable income in the case of an individual, estate, or trust shall be computed without any deduction for personal exemptions under section 151 or 642(b).\nTaxable income from sources outside the United States shall include gain from the sale or exchange of capital assets only to the extent of foreign source capital gain net income.\nThe Secretary may by regulations modify the application of this paragraph and paragraph (3) to the extent necessary to properly reflect any capital gain rate differential under section 1(h) and the computation of net capital gain.\nThe term “gain from the sale or exchange of capital assets” includes any gain so treated under section 1231.\nThere is a capital gain rate differential for any year if subsection (h) of section 1 applies to such taxable year.\nAny amount by which all taxes paid or accrued to foreign countries or possessions of the United States for any taxable year for which the taxpayer chooses to have the benefits of this subpart exceed the limitation under subsection (a) shall be deemed taxes paid or accrued to foreign countries or possessions of the United States in the first preceding taxable year and in any of the first 10 succeeding taxable years, in that order and to the extent not deemed taxes paid or accrued in a prior taxable year, in the amount by which the limitation under subsection (a) for such preceding or succeeding taxable year exceeds the sum of the taxes paid or accrued to foreign countries or possessions of the United States for such preceding or succeeding taxable year and the amount of the taxes for any taxable year earlier than the current taxable year which shall be deemed to have been paid or accrued in such preceding or subsequent taxable year (whether or not the taxpayer chooses to have the benefits of this subpart with respect to such earlier taxable year). Such amount deemed paid or accrued in any year may be availed of only as a tax credit and not as a deduction and only if the taxpayer for such year chooses to have the benefits of this subpart as to taxes paid or accrued for that year to foreign countries or possessions of the United States. This subsection shall not apply to taxes paid or accrued with respect to amounts described in subsection (d)(1)(A).\nThe term “passive category income” means passive income and specified passive category income.\nThe term “general category income” means income other than income described in paragraph (1)(A), foreign branch income, and passive category income.\nExcept as otherwise provided in this subparagraph, the term “passive income” means any income received or accrued by any person which is of a kind which would be foreign personal holding company income (as defined in section 954(c)).\nExcept as provided in clause (iii), subparagraph (E)(ii), or paragraph (3)(H), the term “passive income” includes any amount includible in gross income under section 1293 (relating to certain passive foreign investment companies).\nIn determining whether any income is of a kind which would be foreign personal holding company income, the rules of section 864(d)(6) shall apply only in the case of income of a controlled foreign corporation.\nThe Secretary shall by regulation specify for purposes of this subparagraph the treatment of financial services income received or accrued by partnerships and by other pass-thru entities which are not members of a financial services group.\nIf any foreign corporation is a noncontrolled 10-percent owned foreign corporation with respect to the taxpayer, any inclusion under section 1293 with respect to such corporation shall be treated as a dividend from such corporation.\nIn the case of taxable years beginning after  December 31, 2006 , tax imposed under the law of a foreign country or possession of the United States on an amount which does not constitute income under United States tax principles shall be treated as imposed on income described in paragraph (1)(B).\nIn the case of taxes paid or accrued in taxable years beginning after  December 31, 2004 , and before  January 1, 2007 , a taxpayer may elect to treat tax imposed under the law of a foreign country or possession of the United States on an amount which does not constitute income under United States tax principles as tax imposed on income described in subparagraph (C) or (I) of paragraph (1).\nAny such election shall apply to the taxable year for which made and all subsequent taxable years described in subclause (I) unless revoked with the consent of the Secretary.\nFor purposes of this paragraph, the term “related person” has the meaning given such term by section 954(d)(3), except that such section shall be applied by substituting “the person with respect to whom the determination is being made” for “controlled foreign corporation” each place it appears.\nThe term “foreign branch income” means the business profits of such United States person which are attributable to 1 or more qualified business units (as defined in section 989(a)) in 1 or more foreign countries. For purposes of the preceding sentence, the amount of business profits attributable to a qualified business unit shall be determined under rules established by the Secretary.\nSuch term shall not include any income which is passive category income.\nExcept as otherwise provided in this paragraph, dividends, interest, rents, and royalties received or accrued by the taxpayer from a controlled foreign corporation in which the taxpayer is a United States shareholder shall not be treated as passive category income.\nAny amount included in gross income under section 951(a)(1)(A) shall be treated as passive category income to the extent the amount so included is attributable to passive category income.\nAny interest, rent, or royalty which is received or accrued from a controlled foreign corporation in which the taxpayer is a United States shareholder shall be treated as passive category income to the extent it is properly allocable (under regulations prescribed by the Secretary) to passive category income of the controlled foreign corporation.\nIf a controlled foreign corporation meets the requirements of section 954(b)(3)(A) (relating to de minimis rule) for any taxable year, for purposes of this paragraph, none of its foreign base company income (as defined in section 954(a) without regard to section 954(b)(5)) and none of its gross insurance income (as defined in section 954(b)(3)(C)) for such taxable year shall be treated as passive category income, except that this sentence shall not apply to any income which (without regard to this sentence) would be treated as financial services income. Solely for purposes of applying subparagraph (D), passive income of a controlled foreign corporation shall not be treated as passive category income if the requirements of section 954(b)(4) are met with respect to such income.\nFor purposes of this paragraph, the term “dividend” includes any amount included in gross income in section 951(a)(1)(B). Any amount included in gross income under section 78 to the extent attributable to amounts included in gross income in section 951(a)(1)(A) shall not be treated as a dividend but shall be treated as included in gross income under section 951(a)(1)(A).\nIn the case of any distribution from a controlled foreign corporation to a United States shareholder, rules similar to the rules of subparagraph (A) shall apply in determining the extent to which earnings and profits of the controlled foreign corporation which are attributable to dividends received from a noncontrolled 10-percent owned foreign corporation may be treated as income in a separate category.\nThe rules of section 316 shall apply.\nThe Secretary may prescribe regulations regarding the treatment of distributions out of earnings and profits for periods before the taxpayer’s acquisition of the stock to which the distributions relate.\nIf the Secretary determines that the proper subparagraph of paragraph (1) in which a dividend is described has not been substantiated, such dividend shall be treated as income described in paragraph (1)(A).\nRules similar to the rules of paragraph (3)(F) shall apply for purposes of this paragraph.\nRules similar to subparagraph (A) also shall apply to any carryforward under subsection (c) from a taxable year beginning before  January 1, 2003 , of tax allocable to a dividend from a noncontrolled 10-percent owned foreign corporation with respect to the taxpayer. The Secretary may by regulations provide for the allocation of any carryback of tax allocable to a dividend from a noncontrolled 10-percent owned foreign corporation from a taxable year beginning on or after  January 1, 2003 , to a taxable year beginning before such date for purposes of allocating such dividend among the separate categories in effect for the taxable year to which carried.\nThe term “controlled foreign corporation” has the meaning given such term by section 957 (taking into account section 953(c)).\nThe term “United States shareholder” has the meaning given such term by section 951(b) (taking into account section 953(c)).\nThis paragraph shall not apply to any item of income to which subsection (h)(10) or section 865(h) applies.\nThe Secretary may issue such regulations or other guidance as is necessary or appropriate to carry out the purposes of this paragraph, including regulations or other guidance which provides that related items of income may be aggregated for purposes of this paragraph.\nThis paragraph shall apply to an applicable disposition in the same manner as if it were a disposition of property described in subparagraph (A), except that the exception contained in subparagraph (C)(i) shall not apply.\nFor purposes of clause (i), the term “applicable disposition” means any disposition of any share of stock in a controlled foreign corporation in a transaction or series of transactions if, immediately before such transaction or series of transactions, the taxpayer owned more than 50 percent (by vote or value) of the stock of the controlled foreign corporation. Such term shall not include a disposition described in clause (iii) or (iv), except that clause (i) shall apply to any gain recognized on any such disposition.\nA disposition shall not be treated as an applicable disposition under clause (ii) if it is part of a transaction or series of transactions in which the taxpayer (or any member of an affiliated group of corporations filing a consolidated return under section 1501 which includes the taxpayer) acquires the assets of a controlled foreign corporation in exchange for the shares of the controlled foreign corporation in a liquidation described in section 332 or a reorganization described in section 368(a)(1).\nFor purposes of this subparagraph, the term “controlled foreign corporation” has the meaning given such term by section 957.\nFor purposes of this subparagraph, ownership of stock shall be determined under the rules of subsections (a) and (b) of section 958.\nFor purposes of this chapter, in the case of amounts of income from sources without the United States which are treated under section 666 (without regard to subsections (b) and (c) thereof if the taxpayer chose to take a deduction with respect to the amounts described in such subsections under section 667(d)(1)(B)) as having been distributed by a foreign trust in a preceding taxable year, that portion of such amounts equal to the amount of any overall foreign loss sustained by the beneficiary in a year prior to the taxable year of the beneficiary in which such distribution is received from the trust shall be treated as income from sources within the United States (and not income from sources without the United States) to the extent that such loss was not used under this subsection in prior taxable years, or in the current taxable year, against other income of the beneficiary.\nThe amount of the separate limitation losses for any taxable year shall reduce income from sources within the United States for such taxable year only to the extent the aggregate amount of such losses exceeds the aggregate amount of the separate limitation incomes for such taxable year.\nThe separate limitation losses for any taxable year (to the extent such losses do not exceed the separate limitation incomes for such year) shall be allocated among (and operate to reduce) such incomes on a proportionate basis.\nAny loss from sources in the United States for any taxable year (to the extent such loss does not exceed the separate limitation incomes from such year) shall be allocated among (and operate to reduce) such incomes on a proportionate basis. This subparagraph shall be applied after subparagraph (B).\nThe term “income category” means each separate category of income described in subsection (d)(1).\nThe term “separate limitation income” means, with respect to any income category, the taxable income from sources outside the United States, separately computed for such category.\nThe term “separate limitation loss” means, with respect to any income category, the loss from such category determined under the principles of section 907(c)(4)(B).\nIf any separate limitation loss for any taxable year is allocated against any separate limitation income for such taxable year, except to the extent provided in regulations, rules similar to the rules of paragraph (3) shall apply to any disposition of property if gain from such disposition would be in the income category with respect to which there was such separate limitation loss.\nFor purposes of subparagraph (A), the term “domestic loss” means the amount by which the gross income for the taxable year from sources within the United States is exceeded by the sum of the deductions properly apportioned or allocated thereto (determined without regard to any carryback from a subsequent taxable year).\nFor purposes of subparagraph (A), the term “qualified taxable year” means any taxable year for which the taxpayer chose the benefits of this subpart.\nAny income from sources within the United States that is treated as income from sources without the United States under paragraph (1) shall be allocated among and increase the income categories in proportion to the loss from sources within the United States previously allocated to those income categories.\nFor purposes of this paragraph, the term “income category” has the meaning given such term by subsection (f)(5)(E)(i).\nThe Secretary shall prescribe such regulations as may be necessary to coordinate the provisions of this subsection with the provisions of subsection (f).\nIf any pre-2018 unused overall domestic loss is taken into account under paragraph (1) for any applicable taxable year, the taxpayer may elect to have such paragraph applied to such loss by substituting a percentage greater than 50 percent (but not greater than 100 percent) for 50 percent in subparagraph (B) thereof.\nFor purposes of this paragraph, the term “applicable taxable year” means any taxable year of the taxpayer beginning after  December 31, 2017 , and before  January 1, 2028 .\nAny amount described in subparagraph (A) of paragraph (1) shall be treated as derived from sources within the United States to the extent such amount is attributable to income of the United States-owned foreign corporation from sources within the United States.\nThe United States source ratio of any dividend paid or accrued by a United States-owned foreign corporation shall be treated as derived from sources within the United States.\nFor purposes of this subsection, the term “dividend” includes any gain treated as a dividend under section 1248.\nThis subsection shall be applied before subsection (f).\nIn the case of any dividend treated as not from sources within the United States under section 861(a)(2)(A), the corporation paying such dividend shall be treated for purposes of this subsection as a United States-owned foreign corporation.\nAmounts included in gross income under section 951(a)(1) shall be treated as a dividend under subparagraph (A)(ii) only if dividends paid by each corporation (the stock in which is taken into account in determining whether the shareholder is a United States shareholder in the United States-owned foreign corporation), if paid to the United States shareholder, would be treated under a treaty obligation of the United States as arising from sources outside the United States (applied without regard to this subsection).\nThe term “creditable foreign taxes” means any taxes for which a credit is allowable under section 901; except that such term shall not include any tax unless such tax is shown on a payee statement furnished to such individual.\nThe term “payee statement” has the meaning given to such term by section 6724(d)(2).\nThis subsection shall not apply to any estate or trust.\nFor increase of limitation under subsection (a) for taxes paid with respect to amounts received which were included in the gross income of the taxpayer for a prior taxable year as a United States shareholder with respect to a controlled foreign corporation, see section 960(c).\nSection 902, referred to in subsec. (d)(1), (2)(E)(i), (F)(ii), was repealed by  Pub. L. 115–97, title I, §\u202f14301(a) , (d),  Dec. 22, 2017 ,  131 Stat. 2221 , 2225, applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.\nThe FSC Repeal and Extraterritorial Income Exclusion Act of 2000, referred to in subsec. (d)(2)(B)(v), is  Pub. L. 106–519 ,  Nov. 15, 2000 ,  114 Stat. 2423 . For complete classification of this Act to the Code, see Short Title of 2000 Amendments note set out under  section 1 of this title  and Tables.\nSection 172(h), referred to in subsec. (f)(2)(B)(i), was repealed by  Pub. L. 101–508, title XI, §\u202f11811(b)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–532 .\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (f)(2)(B)(i), is the date of enactment of  Pub. L. 101–508, title XI , which was approved  Nov. 5, 1990 .\nSection 936, referred to in subsec. (g)(1), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(1)(C) ,  Mar. 23, 2018 ,  132 Stat. 1206 .\n2018—Subsec. (b)(4), (5).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xiii) , redesignated par. (5) as (4) and struck out former par. (4). Prior to amendment, text of par. (4) read as follows: “For purposes of subsection (a), in the case of a corporation, the taxable income shall not include any portion thereof taken into account for purposes of the credit (if any) allowed by section 936 (without regard to subsections (a)(4) and (i) thereof).”\nSubsec. (d)(2)(B)(ii).  Pub. L. 115–141, §\u202f401(a)(157) , inserted “subparagraph (E)(ii), or paragraph (3)(H),” after “Except as provided in clause (iii),” and struck out “,\u2000except as provided in subparagraph (E)(iii) or paragraph (3)(I),” after “includes”.\nSubsec. (f)(1).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xiv) , struck out “and section 936” after “subpart” in introductory provisions.\n2017—Subsec. (b)(2)(C).  Pub. L. 115–97, §\u202f13001(b)(2)(M)(i) , struck out “or 1201(a)” after “under section 1(h)”.\nSubsec. (b)(3)(D).  Pub. L. 115–97, §\u202f13001(b)(2)(M)(ii) , added subpar. (D) and struck out former subpar. (D). Prior to amendment, text read as follows: “There is a capital gain rate differential for any taxable year if—\n“(i) in the case of a taxpayer other than a corporation, subsection (h) of section 1 applies to such taxable year, or\n“(ii) in the case of a corporation, any rate of tax imposed by section 11, 511, or 831(a) or (b) (whichever applies) exceeds the alternative rate of tax under section 1201(a) (determined without regard to the last sentence of section 11(b)(1)).”\nSubsec. (b)(3)(E).  Pub. L. 115–97, §\u202f13001(b)(2)(M)(iii) , added subpar. (E) and struck out former subpar. (E) which related to rate differential portion for corporations and taxpayers other than corporations.\nSubsec. (b)(5).  Pub. L. 115–97, §\u202f14101(d) , added par. (5).\nSubsec. (c).  Pub. L. 115–97, §\u202f14201(b)(2)(C) , inserted at end “This subsection shall not apply to taxes paid or accrued with respect to amounts described in subsection (d)(1)(A).”\nSubsec. (d)(1)(A).  Pub. L. 115–97, §\u202f14201(b)(2)(A) , added subpar. (A). Former subpar. (A) redesignated (B), then (C).\nSubsec. (d)(1)(B).  Pub. L. 115–97, §\u202f14302(a) , added subpar. (B). Former subpar. (B) redesignated (C), then (D).\nPub. L. 115–97, §\u202f14201(b)(2)(A) , redesignated subpar. (A) as (B). Former subpar. (B) redesignated (C).\nSubsec. (d)(1)(C).  Pub. L. 115–97, §\u202f14302(a) , redesignated subpar. (B) as (C). Former subpar. (C) redesignated (D).\nPub. L. 115–97, §\u202f14201(b)(2)(A) , redesignated subpar. (B) as (C).\nSubsec. (d)(1)(D).  Pub. L. 115–97, §\u202f14302(a) , redesignated subpar. (C) as (D).\nSubsec. (d)(2)(A)(ii).  Pub. L. 115–97, §\u202f14302(b)(2) , substituted “income described in paragraph (1)(A), foreign branch income, and” for “income described in paragraph (1)(A) and”.\nPub. L. 115–97, §\u202f14201(b)(2)(B) , inserted “income described in paragraph (1)(A) and” before “passive category income”.\nSubsec. (d)(2)(E)(i).  Pub. L. 115–97, §\u202f14301(c)(15)(A) , amended cl. (i) generally. Prior to amendment, text read as follows: “The term ‘noncontrolled section 902 corporation’ means any foreign corporation with respect to which the taxpayer meets the stock ownership requirements of section 902(a) (or, for purposes of applying paragraph (3) or (4), the requirements of section 902(b)). A controlled foreign corporation shall not be treated as a noncontrolled section 902 corporation with respect to any distribution out of its earnings and profits for periods during which it was a controlled foreign corporation.”\nSubsec. (d)(2)(E)(ii).  Pub. L. 115–97, §\u202f14301(c)(15)(B) , substituted “noncontrolled 10-percent owned foreign corporation” for “non-controlled section 902 corporation”.\nSubsec. (d)(2)(J).  Pub. L. 115–97, §\u202f14302(b)(1) , added subpar. (J).\nSubsec. (d)(4).  Pub. L. 115–97, §\u202f14301(c)(16) , substituted “noncontrolled 10-percent owned foreign corporations” for “noncontrolled section 902 corporations” in heading and “noncontrolled 10-percent owned foreign corporation” for “noncontrolled section 902 corporation” wherever appearing in text.\nSubsec. (d)(6)(A).  Pub. L. 115–97, §\u202f14301(c)(17) , substituted “907” for “902, 907,” in concluding provisions.\nSubsec. (g)(5).  Pub. L. 115–97, §\u202f14304(a) , added par. (5).\nSubsec. (h)(10)(A).  Pub. L. 115–97, §\u202f14301(c)(18) , substituted “sections 907 and 960” for “sections 902, 907, and 960” in concluding provisions.\nSubsec. (k).  Pub. L. 115–97, §\u202f14301(c)(19) , amended subsec. (k) generally. Prior to amendment, text read as follows:\n“(1) For increase of limitation under subsection (a) for taxes paid with respect to amounts received which were included in the gross income of the taxpayer for a prior taxable year as a United States shareholder with respect to a controlled foreign corporation, see section 960(b).\n“(2) For modification of limitation under subsection (a) for purposes of determining the amount of credit which can be taken against the alternative minimum tax, see section 59(a).”\n2014—Subsec. (d)(2)(J).  Pub. L. 113–295, §\u202f221(a)(72) , struck out subpar. (J) which related to a transition rule for taxes paid or accrued in a taxable year beginning before  Jan. 1, 1987 .\nSubsec. (h)(7).  Pub. L. 113–295, §\u202f219(c) , struck out “as ordinary income under section 1246 or” after “gain treated”.\n2013—Subsecs. (i) to ( l ).  Pub. L. 112–240  redesignated subsecs. (j) to ( l ) as (i) to (k), respectively, and struck out former subsec. (i). Text read as follows: “In the case of any taxable year of an individual to which section 26(a)(2) does not apply, for purposes of subsection (a), the tax against which the credit is taken is such tax reduced by the sum of the credits allowable under subpart A of part IV of subchapter A of this chapter (other than sections 23, 24, 25A(i), 25B, 30 30B,, and 30D).”\n2010—Subsec. (d)(6), (7).  Pub. L. 111–226, §\u202f213(a) , added par. (6) and redesignated former par. (6) as (7).\nSubsec. (h)(9).  Pub. L. 111–226, §\u202f217(c)(2) , amended par. (9) generally. Prior to amendment, text read as follows: “For purposes of this subsection—\n“(A) in the case of interest treated as not from sources within the United States under section 861(a)(1)(A), the corporation paying such interest shall be treated as a United States-owned foreign corporation, and\n“(B) in the case of any dividend treated as not from sources within the United States under section 861(a)(2)(A), the corporation paying such dividend shall be treated as a United States-owned foreign corporation.”\nSubsec. (i).  Pub. L. 111–148, §\u202f10909(b)(2)(K) , (c), as amended by  Pub. L. 111–312 , temporarily struck out “23,” after “than sections”. See Effective and Termination Dates of 2010 Amendment note below.\n2009—Subsec. (i).  Pub. L. 111–5, §\u202f1144(b)(1)(E) , inserted “30B,” after “30”.\nPub. L. 111–5, §\u202f1142(b)(1)(E) , substituted “25B, 30, and 30D” for “and 25B”.\nPub. L. 111–5, §\u202f1004(b)(5) , inserted “25A(i),” after “24,”.\n2007—Subsec. (d)(2)(B)(v).  Pub. L. 110–172, §\u202f11(g)(10) , inserted “and” at end of subcl. (I), redesignated subcl. (III) as (II), substituted “a former FSC (as defined in section 922)” for “a FSC (or a former FSC)” in subcl. (II), struck out former subcl. (II), which read as follows: “taxable income attributable to foreign trade income (within the meaning of section 923(b)), and”, and added concluding provisions.\nSubsec. (f)(3)(D)(iv).  Pub. L. 110–172, §\u202f11(f)(3) , substituted “an affiliated group” for “a controlled group”.\n2005—Subsec. (d)(2)(D).  Pub. L. 109–135, §\u202f403 ( o ), inserted “as in effect before its repeal” after “section 954(f)”.\nSubsec. (g)(2).  Pub. L. 109–135, §\u202f403(k) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “For purposes of this subsection—\n“(A)  In general .—The term ‘overall domestic loss’ means any domestic loss to the extent such loss offsets taxable income from sources without the United States for the taxable year or for any preceding taxable year by reason of a carryback. For purposes of the preceding sentence, the term ‘domestic loss’ means the amount by which the gross income for the taxable year from sources within the United States is exceeded by the sum of the deductions properly apportioned or allocated thereto (determined without regard to any carryback from a subsequent taxable year).\n“(B)  Taxpayer must have elected foreign tax credit for year of loss .—The term ‘overall domestic loss’ shall not include any loss for any taxable year unless the taxpayer chose the benefits of this subpart for such taxable year.”\nSubsec. (i).  Pub. L. 109–135, §\u202f402(i)(3)(G) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of an individual, for purposes of subsection (a), the tax against which the credit is taken is such tax reduced by the sum of the credits allowable under subpart A of part IV of subchapter A of this chapter (other than sections 23, 24, and 25B). This subsection shall not apply to taxable years beginning during 2000, 2001, 2002, 2003, 2004, or 2005.”\n2004—Subsec. (c).  Pub. L. 108–357, §\u202f417(a) , struck out “in the second preceding taxable year,” before “in the first preceding taxable year” and substituted “and in any of the first 10” for “,\u2000and in the first, second, third, fourth, or fifth”.\nSubsec. (d)(1).  Pub. L. 108–357, §\u202f404(a) , reenacted heading without change and amended text of par. (1) generally, substituting provisions relating to applicability of subsecs. (a), (b), and (c) and sections 902, 907, and 960 to passive category income and general category income, for provisions relating to applicability of subsecs. (a), (b), and (c) and sections 902, 907, and 960 to passive income, high withholding tax interest, financial services income, shipping income, certain dividends from a DISC or former DISC, taxable income attributable to foreign trade income, certain distributions from a FSC or a former FSC, and income other than income previously described.\nSubsec. (d)(1)(E).  Pub. L. 108–357, §\u202f403(b)(1) , struck out subpar. (E) which read as follows: “in the case of a corporation, dividends from noncontrolled section 902 corporations out of earnings and profits accumulated in taxable years beginning before  January 1, 2003 ,”.\nSubsec. (d)(2)(A).  Pub. L. 108–357, §\u202f404(b) , added subpar. (A). Former subpar. (A) redesignated (B).\nSubsec. (d)(2)(A)(ii).  Pub. L. 108–357, §\u202f413(c)(14) , reenacted heading without change and amended text of cl. (ii) generally. Prior to amendment, text read as follows: “Except as provided in clause (iii), the term ‘passive income’ includes any amount includible in gross income under section 551 or, except as provided in subparagraph (E)(iii) or paragraph (3)(I), section 1293 (relating to certain passive foreign investment companies).”\nSubsec. (d)(2)(B).  Pub. L. 108–357, §\u202f404(b) , redesignated subpar. (A) as (B) and struck out former subpar. (B), which defined the term “high withholding tax interest”.\nSubsec. (d)(2)(B)(iii).  Pub. L. 108–357, §\u202f404(f)(1) , redesignated subcls. (II) and (III) as (I) and (II), respectively, and struck out former subcl. (I) which read as follows: “any income described in a subparagraph of paragraph (1) other than subparagraph (A),”.\nSubsec. (d)(2)(B)(v).  Pub. L. 108–357, §\u202f404(c) , added cl. (v).\nSubsec. (d)(2)(C).  Pub. L. 108–357, §\u202f404(d) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (d)(2)(C)(iii).  Pub. L. 108–357, §\u202f403(b)(2) , inserted “and” at end of subcl. (I), redesignated subcl. (III) as (II), and struck out former subcl. (II) which read as follows: “any dividend from a noncontrolled section 902 corporation out of earnings and profits accumulated in taxable years beginning before  January 1, 2003 , and”.\nSubsec. (d)(2)(D).  Pub. L. 108–357, §\u202f404(d) , redesignated subpar. (C) as (D) and struck out heading and text of former subpar. (D). Text read as follows: “The term ‘shipping income’ means any income received or accrued by any person which is of a kind which would be foreign base company shipping income (as defined in section 954(f) as in effect before its repeal). Such term does not include any financial services income.”\nPub. L. 108–357, §\u202f403(b)(3) , substituted “Such term does not include any financial services income” for “Such term does not include any dividend from a noncontrolled section 902 corporation out of earnings and profits accumulated in taxable years beginning before  January 1, 2003  and does not include any financial services income”.\nSubsec. (d)(2)(D)(i).  Pub. L. 108–357, §\u202f404(f)(2) , inserted “or” at end of subcl. (I), added subcl. (II), and struck out former subcls. (II) and (III) which read as follows:\n“(II) passive income (determined without regard to subclauses (I) and (III) of subparagraph (A)(iii)), or\n“(III) export financing interest which (but for subparagraph (B)(ii)) would be high withholding tax interest.”\nSubsec. (d)(2)(D)(iii).  Pub. L. 108–357, §\u202f404(f)(3) , which directed striking out of cl. (iii) “as so redesignated and amended by section 404(b)(3)”, was executed by striking out heading and text of cl. (iii) as amended by section 403(b)(2) and redesignated by section 404(d), to reflect the probable intent of Congress. Text read as follows: “The term ‘financial services income’ does not include—\n“(I) any high withholding tax interest, and\n“(II) any export financing interest not described in clause (i)(III).”\nSubsec. (d)(2)(E)(i).  Pub. L. 108–357, §\u202f403(b)(4)(A) , inserted “or (4)” after “paragraph (3)”.\nSubsec. (d)(2)(E)(ii), (iii).  Pub. L. 108–357, §\u202f403(b)(4)(B) , redesignated cl. (iii) as (ii) and struck out heading and text of former cl. (ii). Text read as follows: “If a foreign corporation is a noncontrolled section 902 corporation with respect to the taxpayer, taxes on high withholding tax interest (to the extent imposed at a rate in excess of 5 percent) shall not be treated as foreign taxes for purposes of determining the amount of foreign taxes deemed paid by the taxpayer under section 902.”\nSubsec. (d)(2)(E)(iv).  Pub. L. 108–357, §\u202f403(b)(4)(B) , struck out heading and text of cl. (iv). Text read as follows: “All noncontrolled section 902 corporations which are not passive foreign investment companies (as defined in section 1297) shall be treated as one noncontrolled section 902 corporation for purposes of paragraph (1).”\nSubsec. (d)(2)(H) to (J).  Pub. L. 108–357, §\u202f404(e) , added subpar. (H) and redesignated former subpars. (H) and (I) as (I) and (J), respectively.\nSubsec. (d)(2)(K).  Pub. L. 108–357, §\u202f404(f)(5) , added subpar. (K).\nSubsec. (d)(3).  Pub. L. 108–357, §\u202f404(f)(4) , reenacted heading without change and amended text of par. (3) generally, substituting provisions consisting of subpars. (A) to (H) for former subpars. (A) to (I) which contained similar provisions.\nSubsec. (d)(3)(F)(i).  Pub. L. 108–357, §\u202f403(b)(5) , substituted “or (D)” for “(D), or (E)”.\nSubsec. (d)(4).  Pub. L. 108–357, §\u202f403(a) , reenacted heading without change and amended text of par. (4) generally, substituting provisions relating to dividends from noncontrolled section 902 corporations, earnings and profits of controlled foreign corporations, and setting forth special rules, for provisions relating to treatment of applicable dividends, defining the term “applicable dividend”, and setting forth special rules.\nSubsec. (f)(3)(D).  Pub. L. 108–357, §\u202f895(a) , added subpar. (D).\nSubsec. (g).  Pub. L. 108–357, §\u202f402(a) , added subsec. (g). Former subsec. (g) redesignated (h).\nSubsec. (h).  Pub. L. 108–357, §\u202f402(a) , redesignated subsec. (g) as (h). Former subsec. (h) redesignated (i).\nPub. L. 108–311  substituted “2003, 2004, or 2005” for “or 2003”.\nSubsec. (h)(1)(A).  Pub. L. 108–357, §\u202f413(c)(15)(A) , inserted “or” at end of cl. (i), redesignated cl. (iii) as (ii), and struck out former cl. (ii) which read as follows: “section 551 (relating to foreign personal holding company income taxed to United States shareholders), or”.\nSubsec. (h)(2).  Pub. L. 108–357, §\u202f413(c)(15)(B) , struck out “foreign personal holding or” before “passive foreign investment” in heading.\nSubsecs. (i), (j).  Pub. L. 108–357, §\u202f402(a) , redesignated subsecs. (h) and (i) as (i) and (j), respectively. Former subsec. (j) redesignated (k).\nSubsec. (k).  Pub. L. 108–357, §\u202f402(a) , redesignated subsec. (j) as (k). Former subsec. (k) redesignated ( l ).\nSubsec. (k)(3)(A)(i).  Pub. L. 108–357, §\u202f404(f)(6) , which directed amendment of subsec. (j)(3)(A)(i) by substituting “subsection (d)(2)(B)” for “subsection (d)(2)(A)”, was executed to subsec. (k)(3)(A)(i) to reflect the probable intent of Congress and the amendment by  Pub. L. 108–357, §\u202f402(a) . See above.\nSubsec. ( l ).  Pub. L. 108–357, §\u202f402(a) , redesignated subsec. (k) as ( l ).\n2002—Subsec. (h).  Pub. L. 107–147, §\u202f601(b)(1) , substituted “during 2000, 2001, 2002, or 2003” for “during 2000 or 2001”.\nPub. L. 107–147, §\u202f417(23)(B) , amended directory language of  Pub. L. 107–16, §\u202f618(b)(2)(D) . See 2001 Amendment note below.\n2001—Subsec. (h).  Pub. L. 107–16, §\u202f618(b)(2)(D) , as amended by  Pub. L. 107–147, §\u202f417(23)(B) , substituted “,\u200024, and 25B” for “and 24”.\nPub. L. 107–16, §\u202f202(f)(2)(C) , substituted “sections 23 and 24” for “section 24”.\nPub. L. 107–16, §\u202f201(b)(2)(G) , inserted “(other than section 24)” after “chapter”.\n1999—Subsec. (h).  Pub. L. 106–170  inserted at end “This subsection shall not apply to taxable years beginning during 2000 or 2001.”\n1997—Subsec. (b)(2)(C).  Pub. L. 105–34, §\u202f311(c)(3) , added subpar. (C).\nSubsec. (d)(1)(E).  Pub. L. 105–34, §\u202f1105(a)(1) , amended subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: “in the case of a corporation, dividends from each noncontrolled section 902 corporation,”.\nSubsec. (d)(2)(C)(i)(II).  Pub. L. 105–34, §\u202f1163(b) , substituted “subclauses (I) and (III)” for “subclause (I)”.\nSubsec. (d)(2)(C)(iii)(II), (D).  Pub. L. 105–34, §\u202f1105(a)(3) , inserted “out of earnings and profits accumulated in taxable years beginning before  January 1, 2003 ” after “corporation”.\nSubsec. (d)(2)(E)(i).  Pub. L. 105–34, §\u202f1111(b) , struck out “and except as provided in regulations, the taxpayer was a United States shareholder in such corporation” after “was a controlled foreign corporation”.\nSubsec. (d)(2)(E)(iv).  Pub. L. 105–34, §\u202f1105(a)(2) , added cl. (iv).\nSubsec. (d)(4) to (6).  Pub. L. 105–34, §\u202f1105(b) , added par. (4) and redesignated former pars. (4) and (5) as (5) and (6), respectively.\nSubsecs. (j), (k).  Pub. L. 105–34, §\u202f1101(a) , added subsec. (j) and redesignated former subsec. (j) as (k).\n1996—Subsec. (d)(3)(G).  Pub. L. 104–188, §\u202f1501(b)(1) , (12), amended subpar. (G) identically, substituting “section 951(a)(1)(B)” for “subparagraph (B) or (C) of section 951(a)(1)”.\nPub. L. 104–188, §\u202f1703(i)(1) , substituted “subparagraph (B) or (C) of section 951(a)(1)” for “section 951(a)(1)(B)”.\nSubsec. (f)(2)(B)(i).  Pub. L. 104–188, §\u202f1704(t)(36) , inserted “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “section 172(h)”.\n1993—Subsec. (b)(4).  Pub. L. 103–66, §\u202f13227(d) , inserted before period at end “(without regard to subsections (a)(4) and (i) thereof)”.\nSubsec. (d)(2)(A)(iii)(II) to (IV).  Pub. L. 103–66, §\u202f13235(a)(2) , inserted “and” at end of subcl. II, substituted “income.” for “income, and” in subcl. III, and struck out subcl. (IV) which read as follows: “any foreign oil and gas extraction income (as defined in section 907(c)).”\n1990—Subsec. (b)(3)(D)(i).  Pub. L. 101–508, §\u202f11101(d)(5)(A) , substituted “subsection (h)” for “subsection (j)”.\nSubsec. (b)(3)(E)(iii)(I).  Pub. L. 101–508, §\u202f11101(d)(5)(B) , substituted “section 1(h)” for “section 1(j)”.\nSubsec. (e).  Pub. L. 101–508, §\u202f11801(a)(31) , struck out subsec. (e) which related to transitional rules for carrybacks and carryovers for taxpayers on the per-country limitation.\n1989—Subsec. (d)(1)(H).  Pub. L. 101–239, §\u202f7811(i)(1) , substituted “interest or carrying charges (as defined in section 927(d)(1)) derived from a transaction which results in foreign trade income (as defined in section 923(b))” for “qualified interest and carrying charges (as defined in section 245(c))”.\nSubsecs. (i), (j).  Pub. L. 101–239, §\u202f7402(a) , added subsec. (i) and redesignated former subsec. (i) as (j).\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1003(b)(2)(A) , amended par. (2) generally, substituting general provisions and provisions setting special rules where there is a capital gain rate differential for provisions for corporations and for other taxpayers.\nSubsec. (b)(3)(D).  Pub. L. 100–647, §\u202f1003(b)(2)(B) , added subpar. (D) and struck out former subpar. (D), Rate differential portion, which read as follows: “The ‘rate differential portion’ of foreign source net capital gain, net capital gain, or the excess of net capital gain from sources within the United States over net capital gain, as the case may be, is the same proportion of such amount as the excess of the highest rate of tax specified in section 11(b) over the alternative rate of tax under section 1201(a) bears to the highest rate of tax specified in section 11(b).”\nSubsec. (b)(3)(D)(ii).  Pub. L. 100–647, §\u202f2004 ( l ), substituted “section 11(b)(1)” for “section 11(b)”.\nSubsec. (b)(3)(E).  Pub. L. 100–647, §\u202f1003(b)(2)(B) , added subpar. (E).\nSubsec. (d)(1)(E).  Pub. L. 100–647, §\u202f1012(a)(11) , inserted “in the case of a corporation,” before “dividends”.\nSubsec. (d)(2)(A)(ii).  Pub. L. 100–647, §\u202f1012(a)(6)(A) , (p)(29)(A), substituted “Except as provided in clause (iii), the term” for “The term” and “or, except as provided in subparagraph (E)(iii) or paragraph (3)(I), section 1293” for “or section 1293”.\nSubsec. (d)(2)(A)(iv).  Pub. L. 100–647, §\u202f1012(a)(6)(B) , added cl. (iv).\nSubsec. (d)(2)(B)(iii).  Pub. L. 100–647, §\u202f1012(a)(8) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “The Secretary may by regulations provide that amounts (not otherwise high withholding tax interest) shall be treated as high withholding tax interest where necessary to prevent avoidance of the purposes of this subparagraph.”\nSubsec. (d)(2)(C).  Pub. L. 100–647, §\u202f1012(a)(1)(A) , amended subpar. (C) generally, revising and restating as cls. (i) to (iii) provisions of former cls. (i) to (iv).\nSubsec. (d)(2)(D).  Pub. L. 100–647, §\u202f1012(a)(2) , provided for exclusion from term “shipping income” any dividend from a noncontrolled section 902 corporation and any financial services income.\nSubsec. (d)(2)(E)(i).  Pub. L. 100–647, §\u202f1012(a)(10) , inserted “and except as provided in regulations, the taxpayer was a United States shareholder in such corporation” before period at end.\nSubsec. (d)(2)(E)(iii).  Pub. L. 100–647, §\u202f1012(p)(29)(B) , added cl. (iii).\nSubsec. (d)(2)(I)(ii).  Pub. L. 100–647, §\u202f1012(a)(9) , substituted “except that—” for “except to the extent that—”, added subcls. (I) to (III), and struck out former subcls. (I) and (II) which read as follows:\n“(I) the taxpayer establishes to the satisfaction of the Secretary that such taxes were paid or accrued with respect to shipping income, or\n“(II) in the case of an entity meeting the requirements of subparagraph (C)(ii), the taxpayer establishes to the satisfaction of the Secretary that such taxes were paid or accrued with respect to financial services income, and”.\nSubsec. (d)(3)(E).  Pub. L. 100–647, §\u202f1012(a)(4) , inserted first sentence, struck out former first sentence which read “If a controlled foreign corporation meets the requirements of section 954(b)(3)(A) (relating to de minimis rule) for any taxable year, for purposes of this paragraph, none of its income for such taxable year shall be treated as income in a separate category.”, and in second sentence substituted “passive income” for “income (other than high withholding tax interest and dividends from a noncontrolled section 902 corporation)”.\nSubsec. (d)(3)(F).  Pub. L. 100–647, §\u202f1012(a)(7) , amended subpar. (F) generally. Prior to amendment, subpar. (F) read as follows: “For purposes of this paragraph, the term ‘separate category’ means any category of income described in subparagraph (A), (B), (C), (D), or (E) of paragraph (1).”\nSubsec. (d)(3)(H).  Pub. L. 100–647, §\u202f1012(a)(3) , added subpar. (H).\nSubsec. (d)(3)(I).  Pub. L. 100–647, §\u202f1012(p)(11) , added subpar. (I).\nSubsec. (f)(5)(F).  Pub. L. 100–647, §\u202f1012(c) , added subpar. (F).\nSubsec. (g)(9)(A).  Pub. L. 100–647, §\u202f1012(q)(12) , substituted “861(a)(1)(A)” for “861(a)(1)(B)”.\nSubsec. (g)(10), (11).  Pub. L. 100–647, §\u202f1012(bb)(4)(A) , added par. (10) and redesignated former par. (10) as (11).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f104(b)(13) , struck out last sentence “For purposes of the preceding sentence, in the case of an individual the entire taxable income shall be reduced by an amount equal to the zero bracket amount.”\nSubsec. (b)(3)(C).  Pub. L. 99–514, §\u202f1211(b)(3) , redesignated subpar. (E) as (C) and struck out former subpar. (C), exception for gain from the sale of certain personal property, which read as follows: “There shall be included as gain from sources within the United States any gain from sources without the United States from the sale or exchange of a capital asset which is personal property which—\n“(i) in the case of an individual, is sold or exchanged outside of the country (or possession) of the individual’s residence,\n“(ii) in the case of a corporation, is stock in a second corporation sold or exchanged other than in a country (or possession) in which such second corporation derived more than 50 percent of its gross income for the 3-year period ending with the close of such second corporation’s taxable year immediately preceding the year during which the sale or exchange occurred, or\n“(iii) in the case of any taxpayer, is personal property (other than stock in a corporation) sold or exchanged other than in a country (or possession) in which such property is used in a trade or business of the taxpayer or in which such taxpayer derived more than 50 percent of its gross income for the 3-year period ending with the close of its taxable year immediately preceding the year during which the sale or exchange occurred,\nunless such gain is subject to an income, war profits, or excess profits tax of a foreign country or possession of the United States, and the rate of tax applicable to such gain is 10 percent or more of the gain from the sale or exchange (computed under this chapter).”\nSubsec. (b)(3)(D).  Pub. L. 99–514, §\u202f1211(b)(3) , redesignated subpar. (F) as (D) and struck out former subpar. (D), gain from liquidation of certain foreign corporations, which read as follows: “Subparagraph (C) shall not apply with respect to a distribution in liquidation of a foreign corporation to which part II of subchapter C applies if such corporation derived less than 50 percent of its gross income from sources within the United States for the 3-year period ending with the close of such corporation’s taxable year immediately preceding the year during which the distribution occurred.”\nSubsec. (b)(3)(E), (F).  Pub. L. 99–514, §\u202f1211(b)(3) , redesignated former subpars. (E) and (F) as (C) and (D), respectively.\nSubsec. (d).  Pub. L. 99–514, §\u202f1201(d)(1) , substituted “certain categories of income” for “certain interest income and income from DISC, former DISC, FSC, or former FSC” in heading.\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f1201(a) , (d)(2), (3), inserted “and sections 902, 907, and 960” in introductory provisions, added subpars. (A) to (E), struck out former subpar. (A) which read “the interest income described in paragraph (2)”, redesignated former subpars. (B), (C), (D), and (E) as (F), (G), (H), and (I), respectively, and in subpar. (I), substituted “in any of the preceding subparagraphs” for “in subparagraph (A), (B), (C), or (D)”.\nPub. L. 99–514, §\u202f1899A(24) , made technical correction clarifying heading. See 1984 Amendment note below.\nSubsec. (d)(1)(D).  Pub. L. 99–514, §\u202f1876(d)(2) , amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “distributions from a FSC (or former FSC) out of earnings and profits attributable to foreign trade income (within the meaning of section 923(b)), and”.\nSubsec. (d)(2).  Pub. L. 99–514, §\u202f1201(b) , added par. (2) and struck out former par. (2), interest income to which applicable, which read as follows: “For purposes of this subsection, the interest income described in this paragraph is interest other than interest—\n“(A) derived from any transaction which is directly related to the active conduct by the taxpayer of a trade or business in a foreign country or a possession of the United States,\n“(B) derived in the conduct by the taxpayer of a banking, financing, or similar business,\n“(C) received from a corporation in which the taxpayer (or one or more includible corporations in an affiliated group, as defined in section 1504, of which the taxpayer is a member) owns, directly or indirectly, at least 10 percent of the voting stock, or\n“(D) received on obligations acquired as a result of the disposition of a trade or business actively conducted by the taxpayer in a foreign country or possession of the United States or as a result of the disposition of stock or obligations of a corporation in which the taxpayer owned at least 10 percent of the voting stock.\nFor purposes of subparagraph (C), stock owned, directly or indirectly, by or for a foreign corporation, shall be considered as being proportionately owned by its shareholders. For purposes of this subsection, interest (after the operation of section 904(d)(3)) received from a designated payor corporation described in section 904(d)(3)(E)(iii) by a taxpayer which owns directly or indirectly less than 10 percent of the voting stock of such designated payor corporation shall be treated as interest described in subparagraph (A) to the extent such interest would have been so treated had such taxpayer received it from other than a designated payor corporation.”\nPub. L. 99–514, §\u202f1810(b)(3) , inserted at end “For purposes of this subsection, interest (after the operation of section 904(d)(3)) received from a designated payor corporation described in section 904(d)(3)(E)(iii) by a taxpayer which owns directly or indirectly less than 10 percent of the voting stock of such designated payor corporation shall be treated as interest described in subparagraph (A) to the extent such interest would have been so treated had such taxpayer received it from other than a designated payor corporation.”\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1201(b) , added par. (3) and struck out former par. (3) treating as interest certain amounts attributable to United States-owned foreign corporations, etc., subpars. thereof relating to following subject matter: (A) general provisions, (B) separate limitation interest, (C) exception where designated corporation has small amount of separate limitation interest, (D) treatment of certain interest, (E) designated payor corporation, (F) determination of year to which amount is attributable, (G) ordering rules, (H) dividend, (I) interest and dividends from members of same affiliated group, and (J) distributions through other entities.\nSubsec. (d)(3)(C).  Pub. L. 99–514, §\u202f1810(b)(1) , inserted at end “The preceding sentence shall not apply to any amount includible in gross income under section 551 or 951.”\nSubsec. (d)(3)(E).  Pub. L. 99–514, §\u202f1810(b)(4)(A) , inserted at end:\n“(iv) any other corporation formed or availed of for purposes of avoiding the provisions of this paragraph.\nFor purposes of this paragraph, the rules of paragraph (9) of subsection (g) shall apply.”\nSubsec. (d)(3)(I).  Pub. L. 99–514, §\u202f1810(b)(2) , redesignated subpar. (I) as (J) and added a new subpar. (I), interest and dividends from members of same affiliated group, which read as follows: “For purposes of this paragraph, dividends and interest received or accrued by the designated payor corporation from another member of the same affiliated group (determined under section 1504 without regard to subsection (b)(3) thereof) shall be treated as separate limitation interest if (and only if) such amounts are attributable (directly or indirectly) to separate limitation interest of any other member of such group.”\nSubsec. (d)(3)(J).  Pub. L. 99–514, §\u202f1810(b)(2) , redesignated subpar. (I) as (J) and struck out former subpar. (J), interest from members of same affiliated group, which read as follows: “For purposes of this paragraph, interest received or accrued by the designated payor corporation from another member of the same affiliated group (determined under section 1504 without regard to subsection (b)(3) thereof) shall not be treated as separate limitation interest, unless such interest is attributable directly or indirectly to separate limitation interest of such other member.”\nSubsec. (d)(4), (5).  Pub. L. 99–514, §\u202f1201(b) , added pars. (4) and (5).\nSubsec. (f)(5).  Pub. L. 99–514, §\u202f1203(a) , added par. (5).\nSubsec. (g)(1)(A)(iii).  Pub. L. 99–514, §\u202f1235(f)(4)(A) , added cl. (iii).\nSubsec. (g)(2).  Pub. L. 99–514, §\u202f1235(f)(4)(B) , substituted “holding or passive foreign investment company” for “holding company” in heading.\nSubsec. (g)(9), (10).  Pub. L. 99–514, §\u202f1810(a)(1)(A) , added par. (9) and redesignated former par. (9) as (10).\nSubsec. (i)(2).  Pub. L. 99–514, §\u202f701(e)(4)(H) , struck out “by an individual” after “can be taken” and substituted “section 59(a)” for “section 55(c)”.\n1984—Subsec. (d).  Pub. L. 98–369, §\u202f801(d)(2)(C) , which directed amendment of par. (1) heading by substituting “Separate application of section with respect to certain interest income and income from DISC, former DISC, FSC, or former FSC” for “Application of section in case of certain interest income and dividends from a DISC or former DISC” was executed to subsec. (d) heading to reflect the probable intent of Congress.\nSubsec. (d)(1)(B) to (E).  Pub. L. 98–369, §\u202f801(d)(2)(A) , (B), struck out “and” after “United States,” at end of subpar. (B), substituted “taxable income attributable to foreign trade income (within the meaning of section 923(b)),” for “income other than the interest income described in paragraph (2) and dividends described in subparagraph (B),” in subpar. (C), and added subpars. (D) and (E).\nSubsec. (d)(3).  Pub. L. 98–369, §\u202f122(a) , added par. (3).\nSubsec. (g).  Pub. L. 98–369, §\u202f121(a) , added subsec. (g). Former subsec. (g) redesignated (h).\nPub. L. 98–369, §\u202f474(r)(21) , amended subsec. (g) generally, substituting “Coordination with nonrefundable personal credits” for “Coordination with credit for the elderly” in heading and in text substituting “reduced by the sum of the credits allowable under subpart A of part IV of subchapter A of this chapter” for “reduced by the amount of the credit (if any) for the taxable year allowable under section 37 (relating to credit for the elderly and the permanently and totally disabled)”.\nSubsecs. (h), (i).  Pub. L. 98–369, §\u202f121(a) , redesignated former subsecs. (g) and (h) as (h) and (i), respectively.\n1983—Subsec. (g).  Pub. L. 98–21  substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”.\n1982—Subsec. (f)(4) to (6).  Pub. L. 97–248  struck out par. (4) which provided for the determination of foreign oil related loss where section 907 was applicable, redesignated par. (5) as (4), and purported to redesignate par. (6) as (5). However, subsec. (f) did not contain a par. (6).\n1980—Subsec. (b)(3)(F).  Pub. L. 96–222, §\u202f104(a)(3)(D)(i) , redesignated subpar. (E) “Rate differential portion”, added by  Pub. L. 95–600 , as (F).\n1978—Subsec. (b)(2).  Pub. L. 95–600 , §§\u202f403(c)(4)(A), 701(u)(2)(A), (3)(A), in subpar. (A) substituted “this section” for “subsection (a)”, “the rate differential portion” for “three eighths” wherever appearing, and “for purposes of determining taxable income from sources without the United States, any net capital loss (and any amount which is a short term capital loss under section 1212(a))” for “any net capital loss”.\nSubsec. (b)(3).  Pub. L. 95–600 , §§\u202f403(c)(4)(B), 701(u)(2)(B), (C), as amended by  Pub. L. 96–222, §\u202f104(a)(3)(D)(ii) , substituted “There” for “For purposes of this paragraph, there”, added subpar. (D), redesignated former subpar. (D), relating to section 1231 gains, as subpar. (E), and added another subpar. (E), relating to rate differential portion. See 1980 Amendment note above.\nSubsec. (f)(2)(A).  Pub. L. 95–600, §\u202f701(u)(4)(A) , struck out provision relating to capital loss carrybacks and carryovers.\nSubsec. (f)(4).  Pub. L. 95–600, §\u202f701(u)(4)(B) , (8)(C), substituted in introductory provisions “In making the separate computation under this subsection with respect to foreign oil related income which is required by section 907(b)” for “In the case of a corporation to which section 907(b)(1) applies” and in subpar. (A) struck out provision relating to capital loss carrybacks and carryovers.\nSubsec. (f)(5).  Pub. L. 95–600, §\u202f701(q)(2) , added par. (5).\nSubsec. (h).  Pub. L. 95–600, §\u202f421(e)(6) , designated existing provisions as par. (1) and added par. (2).\n1977—Subsec. (a).  Pub. L. 95–30  provided that, for purposes of determining the maximum total amount of the credit taken under section 901(a), in the case of an individual, the entire taxable income shall be reduced by an amount equal to the zero bracket amount.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1031(a) , struck out provisions allowing the per-country limitation, made the overall limitation applicable to all taxpayers to determine their foreign tax credit limitation, and inserted reference to section 901(a).\nSubsec. (b).  Pub. L. 94–455 , §§\u202f1031(a), 1034(a), 1051(e), redesignated subsec. (c) as (b)(1), inserted provisions that the net United States capital losses would offset net foreign capital gains and, in the case of corporations, that only  30 ⁄ 48  of the net foreign source gain would be included in the foreign tax credit limitation, and that the gain from the sale or exchange of personal property outside the United States would be considered United States source income unless one of three exceptions applied, and added par. (4).\nSubsec. (c).  Pub. L. 94–455, §\u202f1031(a) , redesignated subsec. (d) as (c), and amended the redesignated subsec. (c) generally to conform to the elimination of the per-country limitation in subsec. (a). Former subsec. (c) redesignated (b)(1).\nSubsec. (d).  Pub. L. 94–455, §\u202f1031(a) , redesignated subsec. (f)(1), (2), as (d). Former subsec. (d) redesignated (c).\nSubsec. (e).  Pub. L. 94–455, §\u202f1031(a) , added subsec. (e). Former subsec. (e) was eliminated in view of the amendment of subsec. (a).\nSubsec. (f).  Pub. L. 94–455 , §§\u202f1031(a), 1032(a), 1901(b)(10)(B), added subsec. (f), and substituted “section 172(h)” for “section 172(k)(1)” in pars. (2)(B)(i) and (4)(B)(i). Former subsec. (f)(1), (2), was redesignated (d). Former subsecs. (f)(3), (4), (5) were omitted.\nSubsec. (g).  Pub. L. 94–455 , §§\u202f1032(a), 503(b)(1), added subsec. (g). Former subsec. (f) redesignated (g), and further redesignated (h).\nSubsec. (h).  Pub. L. 94–455, §\u202f503(b)(1) , redesignated former subsec. (g) as (h).\n1971—Subsec. (f).  Pub. L. 92–178, §\u202f502(b)(2) , inserted “and dividends from a DISC or former DISC” after “interest income” in the heading.\nSubsec. (f)(1).  Pub. L. 92–178, §\u202f502(b)(2) , inserted “each of the following items of income” in introductory text, added subpar. (B), and redesignated former subpar. (B) as (C), inserting therein provisions respecting dividends described in subparagraph (B).\nSubsec. (f)(3).  Pub. L. 92–178, §\u202f502(b)(3) , provided that the limitation provided by subsec. (a)(2) shall not apply to dividends described in paragraph (1)(B) and substituted “limitation provided by subsection (a)(2) applies with respect to income described in paragraph (1)(B) and (C)” for “limitation provided by subsection (a)(2) applies with respect to income other than the interest income described in paragraph (2)”.\nSubsec. (f)(5).  Pub. L. 92–178, §\u202f502(b)(4) , added par. (5).\n1969—Subsec. (b)(1).  Pub. L. 91–172, §\u202f506(b)(1) , substituted “(A) with the consent of the Secretary or his delegate with respect to any taxable year or (B) for the taxpayer’s first taxable year beginning after  December 31, 1969 ” for “with the consent of the Secretary or his delegate with respect to any taxable year”.\nSubsec. (b)(2).  Pub. L. 91–172, §\u202f506(b)(2) , substituted “Except in a case to which paragraph (1)(B) applies, if the taxpayer” for “If a taxpayer”.\n1966—Subsec. (f)(2).  Pub. L. 89–809  inserted reference to includible corporations in an affiliated group, as defined in section 1504, of which the taxpayer is a member and inserted reference to both direct and indirect ownership in subpar. (C) and inserted provision that, for purposes of subpar. (C), stock owned directly or indirectly by or for a foreign corporation shall be considered as being proportionately owned by its shareholders.\n1964—Subsec. (g)(2).  Pub. L. 88–272  substituted “section 1503(b)” for “section 1503(d)”.\n1962—Subsec. (f).  Pub. L. 87–834, §\u202f10(a) , added subsec. (f). Former subsec. (f) redesignated (g).\nSubsec. (g).  Pub. L. 87–834 , §§\u202f10(a), 12(b)(2), redesignated former subsec. (f) as (g), designated existing provisions as par. (2), and added par. (1).\n1960—Subsec. (a).  Pub. L. 86–780, §\u202f1(a) , designated existing provisions as par. (1), inserted introductory clause “In the case of any taxpayer who elects the limitation provided by this paragraph” and inserted “foreign”, “or possession of the United States” and “or possession” therein and added par. (2).\nSubsec. (b).  Pub. L. 86–780, §\u202f1(a) , added subsec. (b). Former subsec. (b) redesignated (c).\nSubsec. (c).  Pub. L. 86–780, §\u202f1(b) , redesignated former subsec. (b) as (c) and inserted “applicable” before “limitation” therein. Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 86–780, §\u202f1(c) , redesignated former subsec. (c) as (d) and inserted “applicable” before “limitation” in two places.\nSubsecs. (e), (f).  Pub. L. 86–780, §\u202f1(d) , added subsecs. (e) and (f).\n1958—Subsec. (c).  Pub. L. 85–866  added subsec. (c).\nAmendment by  section 13001(b)(2)(M) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 14101(d) of Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , and applicable to deductions with respect to taxable years ending after  Dec. 31, 2017 , see  section 14101(f) of Pub. L. 115–97 , set out as an Effective Date note under  section 245A of this title .\nPub. L. 115–97, title I, §\u202f14201(d) ,  Dec. 22, 2017 ,  131 Stat. 2213 , provided that:  “The amendments made by this section [enacting  section 951A of this title  and amending this section and  section 960 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.”\nAmendment by section 14301(c)(15)–(19) of  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 115–97, title I, §\u202f14302(c) ,  Dec. 22, 2017 ,  131 Stat. 2225 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f14304(b) ,  Dec. 22, 2017 ,  131 Stat. 2226 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 113–295, div. A, title II, §\u202f219(d) ,  Dec. 19, 2014 ,  128 Stat. 4035 , provided that:  “The amendments made by this section [amending this section,  section 199 of this title , and provisions set out as a note under  section 114 of this title ] shall take effect as if included in the provision of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ] to which they relate.”\nAmendment by  section 221(a)(72) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2011 , see  section 104(d) of Pub. L. 112–240 , set out as a note under  section 23 of this title .\nPub. L. 111–226, title II, §\u202f213(b) ,  Aug. 10, 2010 ,  124 Stat. 2399 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 10, 2010 ].”\nAmendment by  section 217(c)(2) of Pub. L. 111–226  applicable to taxable years beginning after  Dec. 31, 2010 , with certain exceptions, see  section 217(d) of Pub. L. 111–226 , set out as an Effective Date of 2010 Amendment note under  section 861 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  section 1004(b)(5) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1004(d) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1142(b)(1)(E) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  section 1144(b)(1)(E) of Pub. L. 111–5  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 1144(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nPub. L. 110–172, §\u202f11(f)(4) ,  Dec. 29, 2007 ,  121 Stat. 2489 , provided that:  “The amendments made by this subsection [amending this section and sections 1298 and 9502 of this title] shall take effect as if included in the provisions of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ] to which they relate.”\nAmendment by  section 402(i)(3)(G) of Pub. L. 109–135  subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16, §\u202f901 , in the same manner as the provisions of such Act to which such amendment relates, see  section 402(i)(3)(H) of Pub. L. 109–135 , set out as a note under  section 23 of this title . Title IX of  Pub. L. 107–16  was repealed by  Pub. L. 112–240, title I, §\u202f101(a)(1) ,  Jan. 2, 2013 ,  126 Stat. 2315 .\nAmendment by  section 402(i)(3)(G) of Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates and applicable to taxable years beginning after  Dec. 31, 2005 , see  section 402(m) of Pub. L. 109–135 , set out as a note under  section 23 of this title .\nAmendments by section 403(k), ( o ) of  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as an Effective Date of 2005 Amendment note under  section 26 of this title .\nAmendment by  section 402(a) of Pub. L. 108–357  applicable to losses for taxable years beginning after  Dec. 31, 2006 , see  section 402(c) of Pub. L. 108–357 , set out as a note under  section 535 of this title .\nAmendment by section 403(a), (b)(1)–(5) of  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2002 , see  section 403(c) of Pub. L. 108–357 , set out as a note under  section 864 of this title .\nAmendment by section 403(a), (b)(1)–(5) of  Pub. L. 108–357  not applicable to taxable years beginning after  Dec. 31, 2002 , and before  Jan. 1, 2005 , with a specific provision for application of subsec. (d)(4)(C)(iv) of this section, if taxpayer so elects, see  section 403(d) of Pub. L. 108–357 , set out as a note under  section 864 of this title .\nPub. L. 108–357, title IV, §\u202f404(g) ,  Oct. 22, 2004 ,  118 Stat. 1497 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 . \n \n “(2)   Transitional rule relating to income tax base difference .— Section 904(d)(2)(H)(ii) of the Internal Revenue Code of 1986, as added by subsection (e), shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by section 413(c)(14), (15) of  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 108–357, title IV, §\u202f417(c) ,  Oct. 22, 2004 ,  118 Stat. 1512 , provided that: \n “(1)   Carryback .— The amendments made by subsections (a)(1) and (b)(1) [amending this section and  section 907 of this title ] shall apply to excess foreign taxes arising in taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(2)   Carryover .— The amendments made by subsections (a)(2) and (b)(2) [amending this section and  section 907 of this title ] shall apply to excess foreign taxes which (without regard to the amendments made by this section [amending this section and  section 907 of this title ]) may be carried to any taxable year ending after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 108–357, title VIII, §\u202f895(b) ,  Oct. 22, 2004 ,  118 Stat. 1648 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 312(c) of Pub. L. 108–311 , set out as a note under  section 26 of this title .\nAmendment by  section 601(b)(1) of Pub. L. 107–147  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 601(c) of Pub. L. 107–147 , set out as a note under  section 26 of this title .\nAmendment by sections 201(b), 202(f), and 618(b) of  Pub. L. 107–16  inapplicable to taxable years beginning during 2004 or 2005, see  section 312(b)(2) of Pub. L. 108–311 , set out as a note under  section 23 of this title .\nAmendment by sections 201(b), 202(f), and 618(b) of  Pub. L. 107–16  inapplicable to taxable years beginning during 2002 and 2003, see  section 601(b)(2) of Pub. L. 107–147 , set out as a note under  section 23 of this title .\nAmendment by  section 201(b)(2)(G) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 201(e)(2) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nAmendment by  section 202(f)(2)(C) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 202(g)(1) of Pub. L. 107–16 , set out as a note under  section 23 of this title .\nAmendment by  section 618(b)(2)(D) of Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 618(d) of Pub. L. 107–16 , set out as a note under  section 24 of this title .\nAmendment by  Pub. L. 106–170  applicable to taxable years beginning after  Dec. 31, 1998 , see  section 501(c) of Pub. L. 106–170 , set out as a note under  section 24 of this title .\nAmendment by  section 311(c)(3) of Pub. L. 105–34  applicable to taxable years ending after  May 6, 1997 , see  section 311(d) of Pub. L. 105–34 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title XI, §\u202f1101(b) ,  Aug. 5, 1997 ,  111 Stat. 963 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 105–34, title XI, §\u202f1105(c) ,  Aug. 5, 1997 ,  111 Stat. 968 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2002 .”\nPub. L. 105–34, title XI, §\u202f1111(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 969 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XI, §\u202f1163(c) ,  Aug. 5, 1997 ,  111 Stat. 987 , provided that:  “The amendments made by this section [amending this section and  section 902 of this title ] shall take effect on the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 104–188, title I, §\u202f1501(d) ,  Aug. 20, 1996 ,  110 Stat. 1826 , provided that:  “The amendments made by this section [amending this section and sections 951, 956, 959, 989, and 1297 of this title and repealing  section 956A of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end.”\nAmendment by  section 1703(i)(1) of Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  section 13227(d) of Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1993 , see  section 13227(f) of Pub. L. 103–66  set out as a note under  section 56 of this title .\nPub. L. 103–66, title XIII, §\u202f13235(c) ,  Aug. 10, 1993 ,  107 Stat. 505 , provided that:  “The amendments made by this section [amending this section and sections 907 and 954 of this title] shall apply to taxable years beginning after  December 31, 1992 .”\nAmendment by  section 11101(d)(5) of Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , see  section 11101(e) of Pub. L. 101–508 , set out as a note under  section 1 of this title .\nPub. L. 101–239, title VII, §\u202f7402(b) ,  Dec. 19, 1989 ,  103 Stat. 2358 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  July 10, 1989 .”\nAmendment by  section 7811(i)(1) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1012(bb)(4)(B) ,  Nov. 10, 1988 ,  102 Stat. 3535 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall take effect as if included in the amendment made by section 121 of the Tax Reform Act of 1984 [ Pub. L. 98–369 ].”\nAmendment by sections 1003(b)(2) and 1012(a)(1)(A), (2)–(4), (6)–(11), (c), (p)(11), (29), (q)(12) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 2004( l ) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  section 104(b)(13) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 701(e)(4)(H) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nPub. L. 99–514, title XII, §\u202f1201(e) ,  Oct. 22, 1986 ,  100 Stat. 2525 , as amended by  Pub. L. 100–647, title I, §\u202f1012(a)(5) ,  Nov. 10, 1988 ,  102 Stat. 3495 ;  Pub. L. 101–239, title VII, §\u202f7404(a) ,  Dec. 19, 1989 ,  103 Stat. 2361 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section and sections 864 and 954 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “[(2)  Repealed.  Pub. L. 101–239, title VII, §\u202f7404(a) ,  Dec. 19, 1989 ,  103 Stat. 2361 .] \n \n “(3)   Special rule for taxpayer with overall foreign loss.— “(A)   In general .— If a taxpayer incorporated on  June 20, 1928 , the principal headquarters of which is in Minneapolis, Minnesota, sustained an overall foreign loss (as defined in section 904(f)(2) of the Internal Revenue Code of 1954 [now 1986]) in taxable years beginning before  January 1, 1986 , in connection with 2 separate trades or businesses which the taxpayer had, during 1985, substantially disposed of in tax-free transactions pursuant to section 355 of such Code, then an amount, not to exceed $40,000,000 of foreign source income, which, but for this paragraph, would not be treated as overall limitation income, shall be so treated. \n \n “(B)   Substantial disposition .— For purposes of this paragraph, a taxpayer shall be treated as having substantially disposed of a trade or business if the retained portion of such business had sales of less than 10 percent of the annual sales of such business for taxable years ending in 1985.”\n[ Pub. L. 101–239, title VII, §\u202f7404(b) , (c),  Dec. 19, 1989 ,  103 Stat. 2361 , provided that:\n[“(b)  Effective Date .—The repeal made by subsection (a) [amending  section 1201(e) of Pub. L. 99–514 , set out above] shall apply to taxable years beginning after  December 31, 1989 .\n[“(c)  Exception for Certain Taxpayers With Substantial Loan Loss Reserves.—\n[“(1)  In general .—The repeal made by subsection (a) shall not apply to any taxpayer if, on any financial statement filed by such taxpayer for regulatory purposes with respect to any quarter ending during the period beginning on  March 31, 1989 , and ending on  December 31, 1989 , such taxpayer showed loss reserves against its qualified loans equal to at least 25 percent of the amount of such loans.\n[“(2)  Definitions and special rules .—For purposes of this subsection—\n[“(A)  Qualified loan .—The term ‘qualified loan’ has the meaning given such term by section 1201(e)(2)(H) of the Tax Reform Act of 1986 [ Pub. L. 99–514 , formerly set out above] (as in effect before its repeal by subsection (a)).\n[“(B)  Parent-subsidiary controlled groups .—In the case of any taxpayer which is a member of a parent-subsidiary controlled group (as defined in section 585(c)(5)(A) [ 26 U.S.C. 585(c)(5)(A) ]), this subsection shall be applied by treating all members of such group as 1 taxpayer.”]\nPub. L. 99–514, title XII, §\u202f1203(b) ,  Oct. 22, 1986 ,  100 Stat. 2532 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to losses incurred in taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1211(b)(3) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1211(c) of Pub. L. 99–514 , set out as an Effective Date note under  section 865 of this title .\nAmendment by  section 1235(f)(4) of Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as an Effective Date note under  section 1291 of this title .\nPub. L. 99–514, title XVIII, §\u202f1810(a)(1)(B) ,  Oct. 22, 1986 ,  100 Stat. 2822 , provided that:  \n “The amendment made by subparagraph (A) [amending this section] shall take effect on  March 28, 1985 . In the case of any taxable year ending after such date of any corporation treated as a United States-owned foreign corporation by reason of the amendment made by subparagraph (A)— \n “(i)  only income received or accrued by such corporation after such date shall be taken into account under section 904(g) of the Internal Revenue Code of 1954 [now 1986]; except that \n \n “(ii)  paragraph (5) of such section 904(g) shall be applied by taking into account all income received or accrued by such corporation during such taxable year.”\nPub. L. 99–514, title XVIII, §\u202f1810(b)(4)(B) ,  Oct. 22, 1986 ,  100 Stat. 2824 , provided that: \n “(i)  The amendment made by subparagraph (A) [amending this section] insofar as it adds the last sentence to subparagraph (E) of section 905(d)(3) [904(d)(3)] shall take effect on  March 28, 1985 . In the case of any taxable year ending after such date of any corporation treated as a designated payor corporation by reason of the amendment made by subparagraph (A)— “(I)  only income received or accrued by such corporation after such date shall be taken into account under section 904(d)(3) of the Internal Revenue Code of 1954 [now 1986]; except that \n \n “(II)  subparagraph (C) of such section 904(d)(3) shall be applied by taking into account all income received or accrued by such corporation during such taxable year. \n \n \n “(ii)  The amendment made by subparagraph (A) insofar as it adds clause (iv) to subparagraph (E) of section 904(d)(3) shall take effect on  December 31, 1985 . For purposes of such amendment, the rule of the second sentence of clause (i) shall be applied by taking into account  December 31, 1985 , in lieu of  March 28, 1985 .”\nAmendment by sections 1810(b)(1)–(3) and 1876(d)(2) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f121(b) ,  July 18, 1984 ,  98 Stat. 640 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1810(a)(2), (3),  Oct. 22, 1986 ,  100 Stat. 2095 , 2822, provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [ July 18, 1984 ]. In the case of any taxable year of any United States-owned foreign corporation ending after the date of the enactment of this Act— “(A)  only income received or accrued by such foreign corporation after such date of enactment shall be taken into account under section 904(g) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)); except that \n \n “(B)  paragraph (5) of such section 904(g) (relating to exception where small amount of United States source income) shall be applied by taking into account all income received or accrued by such foreign corporation during such taxable year. \n \n \n “(2)   Special rule for applicable cfc.— “(A)   In general .— In the case of qualified interest received or accrued by an applicable CFC before  January 1, 1992 — “(i)  such interest shall not be taken into account under section 904(g) of the Internal Revenue Code of 1986 (as added by subsection (a)), except that \n \n “(ii)  such interest shall be taken into account for purposes of applying paragraph (5) of such section 904(g) (relating to exception where small amount of United States source income). \n \n \n “(B)   Qualified interest .— For purposes of subparagraph (A), the term ‘qualified interest’ means— “(i)  the aggregate amount of interest received or accrued during any taxable year by an applicable CFC on United States affiliate obligations held by such applicable CFC, multiplied by, \n \n “(ii)  a fraction (not in excess of 1)— “(I)  the numerator of which is the sum of the aggregate principal amount of United States affiliate obligations held by the applicable CFC on  March 31, 1984 , but not in excess of the applicable limit, and \n \n “(II)  the denominator of which is the average daily principal amount of United States affiliate obligations held by such applicable CFC during the taxable year. \n \n \n\n Proper adjustments shall be made to the numerator described in clause (ii)(I) for original issue discount accruing after  March 31, 1984 , on CFC obligations and United States affiliate obligations. \n \n “(C)   Adjustment for retirement of cfc obligations .— The amount described in subparagraph (B)(ii)(I) for any taxable year shall be reduced by the sum of— “(i)  the excess of (I) the aggregate principal amount of CFC obligations which are outstanding on  March 31, 1984 , but only with respect to obligations issued before  March 8, 1984 , or issued after  March 7, 1984 , by the applicable CFC pursuant to a binding commitment in effect on  March 7, 1984 , over (II) the average daily outstanding principal amount during the taxable year of the CFC obligations described in subclause (I), and \n \n “(ii)  the portion of the equity of such applicable CFC allocable to the excess described in clause (i) (determined on the basis of the debt-equity ratio of such applicable CFC on  March 31, 1984 ). \n \n \n “(D)   Applicable cfc .— For purposes of this paragraph, the term ‘applicable CFC’ means any controlled foreign corporation (within the meaning of section 957)— “(i)  which was in existence on  March 31, 1984 , and \n \n “(ii)  the principal purpose of which on such date consisted of the issuing of CFC obligations (or short-term borrowing from nonaffiliated persons) and lending the proceeds of such obligations (or such borrowing) to affiliates. \n \n \n “(E)   Affiliates; united states affiliates .— For purposes of this paragraph— “(i)   Affiliate .— The term ‘affiliate’ means any person who is a related person (within the meaning of section 482 of the Internal Revenue Code of 1986) to the applicable CFC. \n \n “(ii)   United states affiliate .— The term ‘United States affiliate’ means any United States person which is an affiliate of the applicable CFC. \n \n “(iii)   Treatment of certain foreign corporations engaged in business in united states .— For purposes of clause (ii), a foreign corporation shall be treated as a United States person with respect to any interest payment made by such corporation if— “(I)  at least 50 percent of the gross income from all sources of such corporation for the 3-year period ending with the close of its last taxable year ending on or before  March 31, 1984 , was effectively connected with the conduct of a trade or business within the United States, and \n \n “(II)  at least 50 percent of the gross income from all sources of such corporation for the 3-year period ending with the close of its taxable year preceding the payment of such interest was effectively connected with the conduct of a trade or business within the United States. \n \n \n \n “(F)   United states affiliate obligations .— For purposes of this paragraph, the term ‘United States affiliate obligations’ means any obligation of (and payable by) a United States affiliate. \n \n “(G)   CFC obligation .— For purposes of this paragraph, the term ‘CFC obligation’ means any obligation of (and issued by) a CFC if— “(i)  the requirements of clause (i) of [former] section 163(f)(2)(B) of the Internal Revenue Code of 1986 are met with respect to such obligation, and \n \n “(ii)  in the case of an obligation issued after  December 31, 1982 , the requirements of clause (ii) of such [former] section 163(f)(2)(B) are met with respect to such obligation. \n \n \n “(H)   Treatment of obligations with original issue discount .— For purposes of this paragraph, in the case of any obligation with original issue discount, the principal amount of such obligation as of any day shall be treated as equal to the revised issue price as of such day (as defined in section 1278(a)(4) of the Internal Revenue Code of 1986). \n \n “(I)   Applicable limit .— For purposes of subparagraph (B)(ii)(I), the term ‘applicable limit’ means the sum of— “(i)  the equity of the applicable CFC on  March 31, 1984 , and \n \n “(ii)  the aggregate principal amount of CFC obligations outstanding on  March 31, 1984 , which were issued by an applicable CFC— “(I)  before  March 8, 1984 , or \n \n “(II)  after  March 7, 1984 , pursuant to a binding commitment in effect on  March 7, 1984 . \n \n \n \n \n “(3)   Exception for certain term obligations .— The amendments made by subsection (a) shall not apply to interest on any term obligations held by a foreign corporation on  March 7, 1984 . The preceding sentence shall not apply to any United States affiliate obligation (as defined in paragraph (2)(F)) held by an applicable CFC (as defined in paragraph (2)(D)). \n \n “(4)   Definitions .— Any term used in this subsection which is also used in section 904(g) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall have the meaning given such term by such section 904(g). \n \n “(5)   Separate application of section 904 in case of income covered by transitional rules .— Subsections (a), (b), and (c) of section 904 of the Internal Revenue Code of 1986 shall be applied separately to any amount not treated as income derived from sources within the United States but which (but for the provisions of paragraph (2) or (3) of this subsection) would be so treated under the amendments made by subsection (a). Any such separate application shall be made before any separate application required under section 904(d) of such Code. \n \n “(6)   Application of paragraph (5) delayed in certain cases .— In the case of a foreign corporation— “(A)  which is a subsidiary of a domestic corporation which has been engaged in manufacturing for more than 50 years, and \n \n “(B)  which issued certificates with respect to obligations on— “(i)   September 24, 1979 , denominated in French francs, \n \n “(ii)   September 10, 1981 , denominated in Swiss francs, \n \n “(iii)   July 14, 1982 , denominated in Swiss francs, and \n \n “(iv)   December 1, 1982 , denominated in United States dollars, \n \n\n with a total principal amount of less than 200,000,000 United States dollars.[,] \n \n\n then paragraph (5) shall not apply to the proceeds from relending such obligations or related capital before  January 1, 1986 .”\nPub. L. 98–369, div. A, title I, §\u202f122(b) ,  July 18, 1984 ,  98 Stat. 644 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(2)   Special rules for interest income.— “(A)   In general .— Interest income received or accrued by a designated payor corporation shall be taken into account for purposes of the amendment made by subsection (a) only in taxable years beginning after the date of the enactment of this Act. \n \n “(B)   Exception for investment after  june 22, 1984 .— Notwithstanding subparagraph (A), the amendment made by subsection (a) shall apply to interest income received or accrued by a designated payor corporation after the date of enactment of this Act if it is attributable to investment in the designated payor corporation after  June 22, 1984 . \n \n \n “(3)   Term obligations of designated payor corporation which is not applicable cfc .— In the case of any designated payor corporation which is not an applicable CFC (as defined in section 121(b)(2)(D) [ section 121(b)(2)(D) of Pub. L. 98–369 , set out above]), any interest received or accrued by such corporation on a term obligation held by such corporation on  March 7, 1984 , shall not be taken into account.”\nAmendment by  section 474(r)(21) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 801(d)(2) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1983 , except that if an individual’s annuity starting date was deferred under  section 105(d)(6) of this title  as in effect on the day before  Apr. 20, 1983 , such deferral shall end on the first day of such individual’s first taxable year beginning after  Dec. 31, 1983 , see  section 122(d) of Pub. L. 98–21 , set out as a note under  section 22 of this title .\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , except that former subsec. (f)(4), which had provided for the determination of foreign oil related loss where  section 907 of this title  was applicable, shall continue to apply in certain instances where the taxpayer has had a foreign loss from an activity not related to oil and gas, see  section 211(e) of Pub. L. 97–248 , set out as a note under  section 907 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 403(c)(4) of Pub. L. 95–600  effective on  Nov. 6, 1978 , see  section 403(d)(3) of Pub. L. 95–600 , set out as a note under  section 528 of this title .\nAmendment by  section 421(e)(6) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 421(g) of Pub. L. 95–600 , set out as note under  section 5 of this title .\nAmendment by  section 701(a)(8)(C) of Pub. L. 95–600  applicable, in the case of individuals, to taxable years ending after  Dec. 31, 1974 , and, in the case of corporations, to taxable years ending after  Dec. 31, 1976 , see  section 701(u)(8)(D) of Pub. L. 95–600 , set out as a note under  section 907 of this title .\nPub. L. 95–600, title VII, §\u202f701(q)(3)(B) ,  Nov. 6, 1978 ,  92 Stat. 2910 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by paragraph (2) [amending this section] shall take effect as if included in section 904(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as such provision was added to such Code by section 1032(a) of the Tax Reform Act of 1976 [ section 1032(a) of Pub. L. 94–455 ].”\nPub. L. 95–600, title VII, §\u202f701(u)(2)(D) ,  Nov. 6, 1978 ,  92 Stat. 2913 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 95–600, title VII, §\u202f701(u)(3)(B) ,  Nov. 6, 1978 ,  92 Stat. 2913 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 95–600, title VII, §\u202f701(u)(4)(C) ,  Nov. 6, 1978 ,  92 Stat. 2914 , provided that:  \n “The amendments made by this paragraph [amending this section] shall apply— \n “(i)  to overall foreign losses sustained in taxable years beginning after  December 31, 1975 , and \n \n “(ii)  to foreign oil related losses sustained in taxable years ending after  December 31, 1975 .”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  section 503(b)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as a note under  section 3 of this title .\nPub. L. 94–455, title X, §\u202f1031(c) ,  Oct. 4, 1976 ,  90 Stat. 1623 , as amended by  Pub. L. 95–600, title VII, §\u202f701(u)(6) , (7)(B)(ii),  Nov. 6, 1978 ,  92 Stat. 2914 , 2916;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 243, 383, 901, 907, 960, 1351, 1503, 6038, and 6501 of this title] shall apply to taxable years beginning after  December 31, 1975 . \n \n “(2)   Exception for certain mining operations .— In the case of a domestic corporation or includible corporation in an affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) which has as of  October 1, 1975 — “(A)  been engaged in the active conduct of the trade or business of the extraction of minerals (of a character with respect to which a deduction for depletion is allowable under section 613 of such Code) outside the United States or its possessions for less than 5 years preceding the date of enactment of this Act [ Oct. 4, 1976 ], \n \n “(B)  had deductions properly apportioned or allocated to its gross income from such trade or business in excess of such gross income in at least 2 taxable years, \n \n “(C)  80 percent of its gross receipts are from the sale of such minerals, and \n \n “(D)  made commitments for substantial expansion of such mineral extraction activities, \n \n\n the amendments made by this section [amending this section and sections 243, 383, 901, 907, 960, 1351, 1503, 6038, and 6501 of this title] shall apply to taxable years beginning after  December 31, 1978 . In the case of a loss sustained in a taxable year beginning before  January 1, 1979 , by any corporation to which this paragraph applies, if section 904(a)(1) of such Code (as in effect before the enactment of this Act [ Oct. 4, 1976 ]) applies with respect to such taxable year, the provisions of section 904(f) of such Code shall be applied with respect to such loss under the principles of such section 904(a)(1). \n \n “(3)   Exception for income from possessions .— In the case of gross income from sources within a possession of the United States (and the deductions properly apportioned or allocated thereto), the amendments made by this section [amending this section and sections 243, 383, 901, 907, 960, 1351, 1503, 6038, and 6501 of this title] shall apply to taxable years beginning after  December 31, 1978 . \n \n “(4)   Carrybacks and carryovers in the case of mining operations and income from a possession .— In the case of a taxpayer to whom paragraph (2) or (3) of this subsection applies, section 904(e) of such Code [ section 904(e) of this title ] shall apply except that ‘ January 1, 1979 ’ shall be substituted for ‘ January 1, 1976 ’ each place it appears therein. If such a taxpayer elects the overall limitation for a taxable year beginning before  January 1, 1979 , such section 904(e) shall be applied by substituting ‘the January 1, of the last year for which such taxpayer is on the per-country limitation’ for ‘ January 1, 1976 ’ each place it appears therein.”\nPub. L. 94–455, title X, §\u202f1032(c) ,  Oct. 4, 1976 ,  90 Stat. 1626 , as amended by  Pub. L. 95–600, title VII, §\u202f701(u)(5) , (7)(A), (B)(i),  Nov. 6, 1978 ,  92 Stat. 2914 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2), (3), and (5), the amendment made by subsection (a) [amending this section] shall apply to losses sustained in taxable years beginning after  December 31, 1975 . The amendment made by subsection (b)(1) [amending  section 907 of this title ] shall apply to taxable years beginning after  December 31, 1975 . The amendment made by subsection (b)(2) [amending  section 907 of this title ] shall apply to losses sustained in taxable years ending after  December 31, 1975 . \n \n “(2)   Obligations of foreign governments.— The amendments made by subsection (a) [amending this section] shall not apply to losses on the sale, exchange, or other disposition of bonds, notes, or other evidences of indebtedness issued before  May 14, 1976 , by a foreign government or instrumentality thereof for the acquisition of property located in that country or stock of a corporation (created or organized in or under the laws of that foreign country) or indebtedness of such corporation. \n \n “(3)  Substantial worthlessness before enactment.— The amendments made by subsection (a) [amending this section] shall not apply to losses incurred on the loss from stock or indebtedness of a corporation in which the taxpayer owned at least 10 percent of the voting stock and which has sustained losses in 3 out of the last 5 taxable years beginning before  January 1, 1976 , which has sustained an overall loss for those 5 years, and with respect to which the taxpayer has terminated or will terminate all operations by reason of sale, liquidation, or other disposition before  January 1, 1977 , of such corporation or its assets. \n \n “(4)   Limitation based on deficit in earnings and profits.— If paragraph (3) would apply to a taxpayer but for the fact that the loss is sustained after  December 31, 1976 , and if the loss is sustained in a taxable year beginning before  January 1, 1979 , the amendments made by subsection (a) [amending this section] shall not apply to such loss to the extent that there was on  December 31, 1975 , a deficit in earnings and profits in the corporation from which the loss arose. For purposes of the preceding sentence, there shall be taken into account only earnings and profits of the corporation which (A) were accumulated in taxable years of the corporation beginning after  December 31, 1962 , and during the period in which the stock of such corporation from which the loss arose was held by the taxpayer and (B) are attributable to such stock. \n \n “(5)   Foreign oil related losses.— The amendment made by subsection (a) [amending this section] shall apply to foreign oil related losses sustained in taxable years ending after  December 31, 1975 . \n \n “(6)   Recapture of possession losses during transitional period where taxpayer is on a per-country basis.— “(A)  Application of paragraph.— This paragraph shall apply if— “(i)  the taxpayer sustained a loss in a possession of the United States in a taxable year beginning after  December 31, 1975 , and before  January 1, 1979 , \n \n “(ii)  such loss is attributable to a trade or business engaged in by the taxpayer in such possession on  January 1, 1976 , and \n \n “(iii)  the taxpayer chooses to have the benefits of subpart A of part III of subchapter N apply for such taxable year and section 904(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the enactment of this Act [ Oct. 4, 1976 ]) applies with respect to such taxable year. \n \n \n “(B)   No recapture during transition period.— In any case to which this paragraph applies, for purposes of determining the liability for tax of the taxpayer for taxable years beginning before  January 1, 1979 , section 904(f) of the Internal Revenue Code of 1986 shall not apply with respect to the loss described in subparagraph (A)(i). \n \n “(C)   Recapture of loss after the transition period .— In any case to which this paragraph applies— “(i)  for purposes of determining the liability for tax of the taxpayer for taxable years beginning after  December 31, 1978 , section 904(f) of the Internal Revenue Code of 1986 [subsec. (f) of this section] shall be applied with respect to the loss described in subparagraph (A)(i) under the principles of section 904(a)(1) of such Code (as in effect before the enactment of this Act [ Oct. 4, 1976 ]); but \n \n “(ii)  in the case of any taxpayer and any possession, the aggregate amount to which such section 904(f) applies by reason of clause (i) shall not exceed the sum of the net incomes of all affiliated corporations from such possession for taxable years of such affiliated corporations beginning after  December 31, 1975 , and before  January 1, 1979 . \n \n \n “(D)   Taxpayers not engaged in trade or business on  january 1, 1976 .— In any case to which this paragraph applies but for the fact that the taxpayer was not engaged in a trade or business in such possession on  January 1, 1976 , for purposes of determining the liability for tax of the taxpayer for taxable years beginning before  January 1, 1979 ; if section 904(a)(1) of such Code (as in effect before the enactment of this Act [ Oct. 4, 1976 ]) applies with respect to such taxable year, the provisions of section 904(f) of such Code shall be applied with respect to the loss described in subparagraph (A)(i) under the principles of such section 904(a)(1). \n \n “(E)   Affiliated corporation defined.— For purposes of subparagraph (C)(ii), the term ‘affiliated corporation’ means a corporation which, for the taxable year for which the net income is being determined, was not a member of the same affiliated group (within the meaning of section 1504 of the Internal Revenue Code of 1986) as the taxpayer but would have been a member of such group but for the application of subsection (b) of such section 1504.”\nPub. L. 94–455, title X, §\u202f1034(b) ,  Oct. 4, 1976 ,  90 Stat. 1630 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1975 , except that the provisions of section 904(b)(3)(C) shall only apply to sales or exchanges made after  November 12, 1975 .”\nAmendment by  section 1051(e) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , with certain exceptions, see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by  section 1901(b)(10) of Pub. L. 94–455  applicable with respect to taxable years ending after  Oct. 4, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before  Jan. 1, 1972 , see  section 507 of Pub. L. 92–178 , set out as a note under  section 991 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to taxable years beginning after  Dec. 31, 1969 , see  section 506(c) of Pub. L. 91–172 , set out as a note under  section 901 of this title .\nPub. L. 89–809, title I, §\u202f106(c)(2) ,  Nov. 13, 1966 ,  80 Stat. 1571 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply to interest received after  December 31, 1965 , in taxable years ending after such date.”\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 234(c) of Pub. L. 88–272 , set out as a note under  section 1503 of this title .\nPub. L. 87–834, §\u202f10(b) ,  Oct. 16, 1962 ,  76 Stat. 1003 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after the date of the enactment of this Act [ Oct. 16, 1962 ], but only with respect to interest resulting from transactions consummated after  April 2, 1962 .”\nPub. L. 86–780, §\u202f4 ,  Sept. 14, 1960 ,  74 Stat. 1013 , provided that:  “The amendments made by the first section [amending this section], section 2 [amending  section 1503 of this title ], and subsection (a) of section 3 of this Act [amending  section 901 of this title ] shall apply with respect to taxable years beginning after  December 31, 1960 . The amendment made by subsection (b) of section 3 of this Act [amending  section 901 of this title ] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 . The amendments made by subsection (c) of section 3 of this Act [enacting  section 6501 of this title ] shall apply with respect to taxable years beginning after  December 31, 1957 .”\nPub. L. 85–866, title I, §\u202f42(c) ,  Sept. 2, 1958 ,  72 Stat. 1640 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 6611 of this title ] shall apply only with respect to taxable years beginning after  December 31, 1957 .”\nFor provisions that nothing in amendment by section 401(d)(1)(D)(xiii), (xiv) of  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  section 11801(a)(31) of Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor applicability of amendments by sections 701(e)(4)(H) and 1201(a), (b), (d)(1)–(3) of  Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , and for nonapplication of amendment by  section 1211(b)(3) of Pub. L. 99–514  to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2)–(4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XII, §\u202f1205 ,  Oct. 22, 1986 ,  100 Stat. 2532 , provided that: \n “(a)   Determination of Excess Credits.— “(1)   In general .— Any taxes paid or accrued in a taxable year beginning after 1986 may be treated under section 904(c) of the Internal Revenue Code of 1954 as paid or accrued in a taxable year beginning before 1987 only to the extent such taxes would be so treated if the tax imposed by chapter 1 of such Code for the taxable year beginning after 1986 were determined by applying section 1 or 11 of such Code (as the case may be) as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(2)   Adjustments .— Under regulations prescribed by the Secretary of the Treasury or his delegate proper adjustments shall be made in the application of paragraph (1) to take into account— “(A)  the repeal of the zero bracket amount, and \n \n “(B)  the changes in the treatment of capital gains. \n \n \n \n “(b)   Coordination With Separate Baskets .— Any taxes paid or accrued in a taxable year beginning after 1986 which (after the application of subsection (a)) are treated as paid or accrued in a taxable year beginning before 1987 shall be treated as imposed on income described in section 904(d)(1)(E) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]). No taxes paid or accrued in a taxable year beginning after 1986 with respect to high withholding tax interest (as defined in section 904(d)(2)(B) of the Internal Revenue Code of 1986 as amended by this Act) may be treated as paid or accrued in a taxable year beginning before 1987.”\nPub. L. 99–514, title XVIII, §\u202f1810(a)(4) ,  Oct. 22, 1986 ,  100 Stat. 2822 , provided that:  “Section 904(g) of the Internal Revenue Code of 1954 shall apply notwithstanding any treaty obligation of the United States to the contrary (whether entered into on, before, or after the date of the enactment of this Act [ Oct. 22, 1986 ]) unless (in the case of a treaty entered into after the date of the enactment of this Act) such treaty by specific reference to such section 904(g) clearly expresses the intent to override the provisions of such section.”\nPub. L. 99–514, title XVIII, §\u202f1810(a)(5) ,  Oct. 22, 1986 ,  100 Stat. 2823 , as amended by  Pub. L. 100–647, title I, §\u202f1018(g)(1) ,  Nov. 10, 1988 ,  102 Stat. 3582 , provided that:  “For purposes of section 121(b)(5) of the Tax Reform Act of 1984 [ Pub. L. 98–369 , set out above] (relating to separate application of section 904 [of the Internal Revenue Code of 1954 [now 1986]] in case of income covered by transitional rules), any carryover under section 904(c) of the Internal Revenue Code of 1954 [now 1986] allowed to a taxpayer which was incorporated on  August 31, 1962 , attributable to taxes paid or accrued in taxable years beginning in 1981, 1982, 1983, or 1984, with respect to amounts included in gross income under section 951 of such Code in respect of a controlled foreign corporation which was incorporated on  May 27, 1977 , shall be treated as taxes paid or accrued on income separately treated under such section 121(b)(5).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'The credits provided in this subpart may, at the option of the taxpayer and irrespective of the method of accounting employed in keeping his books, be taken in the year in which the taxes of the foreign country or the possession of the United States accrued, subject, however, to the conditions prescribed in subsection (c). If the taxpayer elects to take such credits in the year in which the taxes of the foreign country or the possession of the United States accrued, the credits for all subsequent years shall be taken on the same basis, and no portion of any such taxes shall be allowed as a deduction in the same or any succeeding year.\nExcept as provided in subparagraph (B), in making the redetermination under paragraph (1), no credit shall be allowed for accrued taxes not paid before the date referred to in subparagraph (B) of paragraph (1).\nThe amount of tax (if any) due on any redetermination under paragraph (1) shall be paid by the taxpayer on notice and demand by the Secretary, and the amount of tax overpaid (if any) shall be credited or refunded to the taxpayer in accordance with subchapter B of chapter 66 (section 6511 et seq.).\nIn the case of any tax accrued but not paid, the Secretary, as a condition precedent to the allowance of the credit provided in this subpart, may require the taxpayer to give a bond, with sureties satisfactory to and approved by the Secretary, in such sum as the Secretary may require, conditioned on the payment by the taxpayer of any amount of tax found due on any such redetermination. Any such bond shall contain such further conditions as the Secretary may require.\nIn any redetermination under paragraph (1) by the Secretary of the amount of tax due from the taxpayer for the year or years affected by a refund, the amount of the taxes refunded for which credit has been allowed under this section shall be reduced by the amount of any tax described in section 901 imposed by the foreign country or possession of the United States with respect to such refund; but no credit under this subpart, or deduction under section 164, shall be allowed for any taxable year with respect to any such tax imposed on the refund. No interest shall be assessed or collected on any amount of tax due on any redetermination by the Secretary, resulting from a refund to the taxpayer, for any period before the receipt of such refund, except to the extent interest was paid by the foreign country or possession of the United States on such refund for such period.\n2017—Subsec. (c)(1).  Pub. L. 115–97, §\u202f14301(c)(20) , struck out “The Secretary may prescribe adjustments to the pools of post-1986 foreign income taxes and the pools of post-1986 undistributed earnings under sections 902 and 960 in lieu of the redetermination under the preceding sentence.” at end of concluding provisions.\nSubsec. (c)(2)(B)(i).  Pub. L. 115–97, §\u202f14301(c)(21) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “shall be taken into account—\n“(I) in the case of taxes deemed paid under section 902 or section 960, for the taxable year in which paid (and no redetermination shall be made under this section by reason of such payment), and\n“(II) in any other case, for the taxable year to which such taxes relate, and”.\n1997—Subsec. (c).  Pub. L. 105–34  amended heading and text of subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “If accrued taxes when paid differ from the amounts claimed as credits by the taxpayer, or if any tax paid is refunded in whole or in part, the taxpayer shall notify the Secretary, who shall redetermine the amount of the tax for the year or years affected. The amount of tax due on such redetermination, if any, shall be paid by the taxpayer on notice and demand by the Secretary, or the amount of tax overpaid, if any, shall be credited or refunded to the taxpayer in accordance with subchapter B of chapter 66 (sec. 6511 and following). In the case of such a tax accrued but not paid, the Secretary, as a condition precedent to the allowance of this credit, may require the taxpayer to give a bond, with sureties satisfactory to and to be approved by the Secretary, in such sum as the Secretary may require, conditioned on the payment by the taxpayer of any amount of tax found due on any such redetermination; and the bond herein prescribed shall contain such further conditions as the Secretary may require. In such redetermination by the Secretary of the amount of tax due from the taxpayer for the year or years affected by a refund, the amount of the taxes refunded for which credit has been allowed under this section shall be reduced by the amount of any tax described in section 901 imposed by the foreign country or possession of the United States with respect to such refund; but no credit under this subpart, and no deduction under section 164 (relating to deduction for taxes) shall be allowed for any taxable year with respect to such tax imposed on the refund. No interest shall be assessed or collected on any amount of tax due on any redetermination by the Secretary, resulting from a refund to the taxpayer, for any period before the receipt of such refund, except to the extent interest was paid by the foreign country or possession of the United States on such refund for such period.”\n1982—Subsec. (c).  Pub. L. 97–248, §\u202f343(a) , struck out provision that, although no interest can be assessed or collected on any amount of tax due on any redetermination by the Secretary, resulting from a refund to the taxpayer, for any period before the receipt of such refund, except to the extent interest has been paid by the foreign country or possession of the United States on such refund for such period, that prohibition does not apply (with respect to any period after the refund or adjustment in the foreign taxes) if the taxpayer fails to notify the Secretary (on or before the date prescribed by regulations for giving such notice) unless it is shown that such failure is due to reasonable cause and not due to willful neglect.\n1980—Subsec. (c).  Pub. L. 96–603  inserted provision that the preceding sentence not apply, with respect to any period after the refund or adjustment in the foreign taxes, if the taxpayer fails to notify the Secretary, on or before the date prescribed by regulations for giving such notice, unless it is shown that such failure is due to reasonable cause and not due to willful neglect.\n1976—Subsec. (b).  Pub. L. 94–455 , §§\u202f1901(a)(114), 1906(b)(13)(A), struck out provision allowing credits to be taken for tax on royalties paid, accrued and derived from sources within the United Kingdom of Britain and Northern Ireland and struck out “or his delegate” after “Secretary”, in two places.\nSubsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” in eight places.\n1958—Subsec. (b).  Pub. L. 85–866  inserted sentence deeming recipient of a royalty or other amount for use of copyright, patent, and other like property derived from sources within United Kingdom, to have paid or accrued taxes paid or accrued to United Kingdom with respect to royalty if recipient elects to include in its gross income the amount of such United Kingdom tax.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 105–34, title XI, §\u202f1102(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 966 , provided that:  “The amendment made by subsection (a)(2) [amending this section] shall apply to taxes which relate to taxable years beginning after  December 31, 1997 .”\nPub. L. 97–248, title III, §\u202f343(b) ,  Sept. 3, 1982 ,  96 Stat. 635 , provided that:  “The amendment made by subsection (a) [amending this section] shall have the same effect as if the last sentence of section 905(c) had never been enacted.”\nAmendment by  Pub. L. 96–603  applicable with respect to employer contributions or accruals for taxable years beginning after  Dec. 31, 1979 , election to apply amendments retroactively with respect to foreign subsidiaries, allowance or prior deductions in case of certain funded branch plans, and time and manner for making elections, see  section 2(e) of Pub. L. 96–603 , set out as an Effective Date note under  section 404A of this title .\nAmendment by  section 1901(a)(114) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 85–866, title I, §\u202f103(c) ,  Sept. 2, 1958 ,  72 Stat. 1675 , provided that:  “The amendment made by subsection (a) of this section [amending section 131(e) of Internal Revenue Code of 1939] shall apply for all taxable years beginning on or after  January 1, 1950 , as to which section 131 of the Internal Revenue Code of 1939 is the applicable provision. The amendment made by subsection (b) of this section [amending this section] shall apply with respect to taxable years beginning after  December 31, 1953 , and ending after  August 16, 1954 . No interest shall be allowed or paid on any overpayment resulting from the amendments made by subsections (a) and (b) of this section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'A nonresident alien individual or a foreign corporation engaged in trade or business within the United States during the taxable year shall be allowed a credit under section 901 for the amount of any income, war profits, and excess profits taxes paid or accrued during the taxable year to any foreign country or possession of the United States with respect to income effectively connected with the conduct of a trade or business within the United States.\n2017—Subsec. (a).  Pub. L. 115–97, §\u202f14301(c)(22) , struck out “(or deemed, under section 902, paid or accrued during the taxable year)” after “paid or accrued during the taxable year”.\nSubsec. (b)(4), (5).  Pub. L. 115–97, §\u202f14301(c)(23) , struck out pars. (4) and (5) which read as follows:\n“(4) For purposes of sections 902(a) and 78, a foreign corporation choosing the benefits of this subpart which receives dividends shall, with respect to such dividends, be treated as a domestic corporation.\n“(5) For purposes of section 902, any income, war profits, and excess profits taxes paid or accrued (or deemed paid or accrued) to any foreign country or possession of the United States with respect to income effectively connected with the conduct of a trade or business within the United States shall not be taken into account, and any accumulated profits attributable to such income shall not be taken into account.”\n2007—Subsec. (b)(5) to (7).  Pub. L. 110–172  redesignated pars. (6) and (7) as (5) and (6), respectively, and struck out former par. (5) which read as follows: “No credit shall be allowed under this section for any income, war profits, and excess profits taxes paid or accrued with respect to the foreign trade income (within the meaning of section 923(b)) of a FSC.”\n1988—Subsec. (b)(6), (7).  Pub. L. 100–647  redesignated par. (6), relating to credit against tax imposed by section 884, as (7).\n1986—Subsec. (b)(6).  Pub. L. 99–514, §\u202f1876(d)(3) , added par. (6) relating to credit for income, war profits, and excess profits taxes paid or accrued to a foreign country or possession of the United States.\nPub. L. 99–514, §\u202f1241(c) , added par. (6) relating to credit against tax imposed by section 884.\n1984—Subsec. (b)(5).  Pub. L. 98–369  added par. (5).\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1241(c) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1241(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 884 of this title .\nAmendment by  section 1876(d)(3) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nSection applicable with respect to taxable years beginning after  Dec. 31, 1966 , and, in applying  section 904 of this title  with respect to this section, no amount to be carried from or to any taxable year beginning before  Jan. 1, 1967 , and no such year to be taken into account, see  section 106(a)(6) of Pub. L. 89–809 , set out as an Effective Date of 1966 Amendment note under  section 874 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of clause (i), the net operating loss deduction allowable for the taxable year under section 172(a) shall not be taken into account.\nFor purposes of subparagraph (B)(ii)(I), foreign oil extraction losses shall be determined under this paragraph as in effect on the day before the date of the enactment of the Energy Improvement and Extension Act of 2008.\nThe term “oil and gas extraction taxes” means any income, war profits, and excess profits tax paid or accrued (or deemed to have been paid under section 960) during the taxable year with respect to foreign oil and gas extraction income (determined without regard to paragraph (4)) or loss which would be taken into account for purposes of section 901 without regard to this section.\nFor purposes of this chapter, in determining the amount of taxable income in the case of foreign oil and gas extraction income, if the oil or gas is disposed of, or is acquired other than from the government of a foreign country, at a posted price (or other pricing arrangement) which differs from the fair market value for such oil or gas, such fair market value shall be used in lieu of such posted price (or other pricing arrangement).\nIf the amount of the foreign oil and gas taxes paid or accrued during any taxable year exceeds the limitation provided by subsection (a) for such taxable year (hereinafter in this subsection referred to as the “unused credit year”), such excess shall be deemed to be foreign oil and gas taxes paid or accrued in the first preceding taxable year and in any of the first 10 succeeding taxable years, in that order and to the extent not deemed tax paid or accrued in a prior taxable year by reason of the limitation imposed by paragraph (2). Such amount deemed paid or accrued in any taxable year may be availed of only as a tax credit and not as a deduction and only if the taxpayer for such year chooses to have the benefits of this subpart as to taxes paid or accrued for that year to foreign countries or possessions.\nIn the case of any unused credit year beginning before  January 1, 2009 , this subsection, as in effect on the day before the date of the enactment of the Energy Improvement and Extension Act of 2008, shall apply to unused oil and gas extraction taxes carried from such unused credit year to a taxable year beginning after  December 31, 2008 .\nIn the case of any unused credit year beginning in 2009, the amendments made to this subsection by the Energy Improvement and Extension Act of 2008 shall be treated as being in effect for any preceding year beginning before  January 1, 2009 , solely for purposes of determining how much of the unused foreign oil and gas taxes for such unused credit year may be deemed paid or accrued in such preceding year.\nThe date of the enactment of the Energy Improvement and Extension Act of 2008, referred to in subsecs. (c)(4)(B)(ii)(II), (D)(iv) and (f)(4)(A), is the date of enactment of div. B of  Pub. L. 110–343 , which was approved  Oct. 3, 2008 .\nSection 172(h), referred to in subsec. (c)(4)(D)(iii)(I), was repealed by  Pub. L. 101–508, title XI, §\u202f11811(b)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–532 .\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (c)(4)(D)(iii)(I), is the date of enactment of  Pub. L. 101–508, title XI , which was approved  Nov. 5, 1990 .\nThe Energy Improvement and Extension Act of 2008, referred to in subsec. (f)(4)(B), is div. B of  Pub. L. 110–343 ,  Oct. 3, 2008 ,  122 Stat. 3807 . For the amendments made to subsec. (f) of this section by the Act, see 2008 Amendment notes below.\n2018—Subsec. (c)(3)(C).  Pub. L. 115–141, §\u202f401(a)(158) , substituted comma for period at end.\nSubsec. (f)(1).  Pub. L. 115–141, §\u202f401(a)(159) , substituted “years,” for “year,”.\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97, §\u202f14301(c)(24) , struck out “902 or” after “under section”.\nSubsec. (c)(3)(A).  Pub. L. 115–97, §\u202f14301(c)(25)(A) , added subpar. (A) and struck out former subpar. (A) which read as follows: “dividends and interest from a foreign corporation in respect of which taxes are deemed paid by the taxpayer under section 902,”.\nSubsec. (c)(3)(B).  Pub. L. 115–97, §\u202f14301(c)(25)(B) , substituted “section 960” for “section 960(a)”.\nSubsec. (c)(5).  Pub. L. 115–97, §\u202f14301(c)(26) , struck out “902 or” after “under section”.\nSubsec. (f)(2)(B)(i).  Pub. L. 115–97, §\u202f14301(c)(27) , struck out “902 or” after “under section”.\n2014—Subsec. (f)(4)(A).  Pub. L. 113–295  substituted “this subsection, as in effect on the day before the date of the enactment of the Energy Improvement and Extension Act of 2008, shall apply to unused oil and gas extraction taxes carried from such unused credit year to a taxable year beginning after  December 31, 2008 .” for “this subsection shall be applied to any unused oil and gas extraction taxes carried from such unused credit year to a year beginning after  December 31, 2008 —\n“(i) by substituting ‘oil and gas extraction taxes’ for ‘foreign oil and gas taxes’ each place it appears in paragraphs (1), (2), and (3), and\n“(ii) by computing, for purposes of paragraph (2)(A), the limitation under subparagraph (A) for the year to which such taxes are carried by substituting ‘foreign oil and gas extraction income’ for ‘foreign oil and gas income’ in subsection (a).”\n2008—Subsecs. (a), (b).  Pub. L. 110–343, §\u202f402(a) , amended subsecs. (a) and (b) generally. Prior to amendment, subsec. (a) related to reduction in amount of oil and gas extraction taxes paid or accrued for purposes of section 901 and subsec. (b) excepted certain amounts of foreign oil related income taxes paid or accrued to any foreign country from the definition of “income, war profits, and excess profits taxes”.\nSubsec. (c)(4).  Pub. L. 110–343, §\u202f402(b) , amended par. (4) generally. Prior to amendment, par. (4) provided for recapture of foreign oil and gas extraction losses by recharacterizing later extraction income.\nSubsec. (f).  Pub. L. 110–343, §\u202f402(c)(1) , substituted “foreign oil and gas taxes” for “oil and gas extraction taxes” wherever appearing.\nSubsec. (f)(4).  Pub. L. 110–343, §\u202f402(c)(2) , added par. (4).\n2004—Subsec. (f)(1).  Pub. L. 108–357, §\u202f417(b)(3) , struck out at end “For purposes of this subsection, the terms ‘second preceding taxable year’, and ‘first preceding taxable year’ do not include any taxable year ending before  January 1, 1975 .”\nPub. L. 108–357, §\u202f417(b)(2) , substituted “and in any of the first 10” for “,\u2000and in the first, second, third, fourth, or fifth”.\nPub. L. 108–357, §\u202f417(b)(1) , struck out “in the second preceding taxable year,” before “in the first preceding taxable year”.\n1996—Subsec. (c)(4)(B)(iii)(I).  Pub. L. 104–188  inserted “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “section 172(h)”.\n1993—Subsec. (c)(1), (2).  Pub. L. 103–66  inserted concluding provisions.\n1990—Subsec. (e).  Pub. L. 101–508, §\u202f11801(a)(32) , struck out subsec. (e) which read as follows:\n“(1)  Credits arising in taxable years beginning before  january 1, 1983 .—The amount of taxes paid or accrued in any taxable year beginning before  January 1, 1983  (hereinafter in this paragraph referred to as the ‘excess credit year’) which under section 904(c) or 907(f) may be deemed paid or accrued in a taxable year beginning after  December 31, 1982 , shall not exceed the amount which could have been deemed paid or accrued if sections 907(b), 907(f), and 904(f)(4) (as in effect on the day before the date of the enactment of the Tax Equity and Fiscal Responsibility Act of 1982) remained in effect for taxable years beginning after  December 31, 1982 .\n“(2)  Carryback of credits arising in taxable years beginning after  december 31, 1982 .—The amount of the taxes paid or accrued in a taxable year beginning after  December 31, 1982 , which may be deemed paid or accrued under section 904(c) or 907(f) in a taxable year beginning before  January 1, 1983 , shall not exceed the amount which could have been deemed paid or accrued if sections 907(b), 907(f), and 904(f)(4) (as in effect on the day before the date of the enactment of the Tax Equity and Fiscal Responsibility Act of 1982) remained in effect for taxable years beginning after  December 31, 1982 .”\nSubsec. (f)(3)(C).  Pub. L. 101–508, §\u202f11801(a)(32) , struck out subpar. (C) which read as follows: “For purposes of determining the amount of the unused oil and gas extraction taxes which under paragraph (1) may be deemed paid or accrued in any taxable year ending before  January 1, 1977 , subparagraph (A) of paragraph (2) shall be applied as if the amendment made by section 1035(a) of the Tax Reform Act of 1976 applied to such taxable year.”\n1988—Subsec. (c)(3).  Pub. L. 100–647, §\u202f1012(g)(6)(B) , struck out “and dividends described in subparagraph (B)” after “described in subparagraph (A)” in closing provisions.\nSubsec. (c)(3)(B) to (D).  Pub. L. 100–647, §\u202f1012(g)(6)(A) , redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: “dividends from a domestic corporation which are treated under section 861(a)(2)(A) as income from sources without the United States,”.\n1982—Subsec. (b).  Pub. L. 97–248, §\u202f211(c)(1) , added subsec. (b). Former subsec. (b), which had provided that section 904 be applied separately with respect to foreign oil related income and other taxable income, was struck out.\nSubsec. (c)(2).  Pub. L. 97–248, §\u202f211(b) , in subpar. (A) substituted “the processing of minerals extracted (by the taxpayer or by any other person) from oil or gas wells into their primary products” for “the extraction (by the taxpayer or any other person) of minerals from oil or gas wells”, deleted subpar. (B) which had provided that foreign oil related income meant the taxable income derived from sources outside the United States and its possessions from the processing of minerals from oil or gas wells into their primary products, redesignated subpar. (C) as (B), redesignated subpar. (D) as (C) and in subpar. (C) as so redesignated struck out “or” at the end, redesignated subpar. (E) as (D) and in subpar. (D) as so redesignated substituted “disposition” for “sale or exchange”, and “or (C), or” for “(C), or (D)”, struck out the period at the end, and added subpar. (E).\nSubsec. (c)(4).  Pub. L. 97–248, §\u202f211(a) , substituted provisions regarding the recapture of foreign oil and gas extraction losses by recharacterization of later extraction income for provisions that if, for any foreign country for any taxable year, the taxpayer would have had a net operating loss if only items from sources within such country (including deductions properly apportioned or allocated thereto) which related to the extraction of minerals from oil or gas wells had been taken into account, such items would not be taken into account in computing foreign oil and gas extraction income for such year, but would be taken into account in computing foreign oil related income for such year.\nSubsec. (e).  Pub. L. 97–248, §\u202f211(d)(1) , substituted rules regarding credits arising in taxable years beginning before  Jan. 1, 1983 , for rules regarding taxable years ending after  Dec. 31, 1974 , in par. (1), and in par. (2) substituted rules regarding carryback of credits arising in taxable years beginning after  Dec. 31, 1982 , for rules regarding taxable years ending after  Dec. 31, 1975 .\nSubsec. (f)(1).  Pub. L. 97–248, §\u202f211(d)(2)(A) , substituted “such excess” for “so much of such excess as does not exceed 2 percent of foreign oil and gas extraction income for such taxable year” in first sentence, and struck out former provision that had directed that the above substitution be made regarding taxes deemed paid or accrued in any taxable year which ended in 1975, 1976, or 1977.\nSubsec. (f)(2)(B).  Pub. L. 97–248, §\u202f211(d)(2)(B)(i) , substituted “provided by section 904 for such taxable year” for “provided by section 904 on taxes paid or accrued with respect to foreign oil-related income for such taxable year” in the introductory provisions, and in cl. (i) substituted “the United States during such taxable year” for “the United States with respect to such income during such taxable year”.\nSubsec. (f)(3)(A).  Pub. L. 97–248, §\u202f211(d)(2)(B)(ii) , substituted “section 904(c)” for “section 904(c) with respect to oil-related income”.\nSubsec. (f)(3)(B).  Pub. L. 97–248, §\u202f211(d)(2)(B)(iii) , struck out “oil-related” after “determining the amount of”.\n1978—Subsec. (a)(2).  Pub. L. 95–600 , §§\u202f301(b)(14), 701(u)(8)(A), designated existing provisions as subpar. (A), inserted applicability to corporations and generally reworked applicable formula, and added subpar. (B).\nSubsec. (b).  Pub. L. 95–600, §\u202f701(u)(8)(B) , substituted provisions relating to applicability of section 904 separately to foreign oil related income and other taxable income for provisions relating to applicability of section 904 to corporations and other taxpayers.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1035(a) , substituted “oil and gas extraction taxes” for “income, war profits, and excess profits taxes” after “the amount of any” and, in par. (2), substituted “the percentage which is the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11” for provisions giving the percentage multiplier for years ending 1975, 1976, and after 1976.\nSubsec. (b).  Pub. L. 94–455 , §§\u202f1032(b)(1), 1035(b), inserted provisions making a distinction between corporations and other taxpayers and rules applicable to each and, as amended, struck out provision requiring the overall limitation, rather than the per-country limitation, be applied in the case of a corporation to foreign oil-related income and, a taxpayer other than a corporation, to foreign oil and gas extraction income.\nSubsec. (c)(5).  Pub. L. 94–455, §\u202f1035(d)(2) , added par. (5).\nSubsec. (e)(1).  Pub. L. 94–455, §\u202f1031(b)(6)(A) , substituted “(d) and (e) of section 904 (as in effect on the day before the date of enactment of the Tax Reform Act of 1976)” for “(d) and (e) of section 904” after “In applying subsections”.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f1031(b)(6) , substituted “(d) and (e) of section 904 (as in effect on the day before the date of enactment of the Tax Reform Act of 1976)” for “(d) and (e) of section 904” after “In applying subsections”, “section 904(a)(1) (as so in effect)” for “section 904(a)(1)” after “provided by section” and, in subpar. (A), “section 904(e)(2) (as so in effect)” for “section 904(e)(2)” after “sentence of section”.\nSubsec. (f).  Pub. L. 94–455 , §§\u202f1032(b)(2), 1035(d)(1), added subsec. (f). Former subsec. (f), relating to recapture of foreign oil related loss, was struck out.\nSubsec. (g).  Pub. L. 94–455 , §§\u202f1032(b)(2), 1035(d)(1), 1052(c)(4), struck out subsec. (g) relating to Western Hemisphere trade corporations which are members of an affiliated group.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the Energy Improvement and Extension Act of 2008,  Pub. L. 110–343, div. B , to which such amendment relates, see  section 210(h) of Pub. L. 113–295 , set out as a note under  section 45 of this title .\nPub. L. 110–343, div. B, title IV, §\u202f402(e) ,  Oct. 3, 2008 ,  122 Stat. 3854 , provided that:  “The amendments made by this section [amending this section and  section 6501 of this title ] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  section 417(b)(1) of Pub. L. 108–357  applicable to excess foreign taxes arising in taxable years beginning after  Oct. 22, 2004 , and amendment by  section 417(b)(2) of Pub. L. 108–357  applicable to excess foreign taxes which may be carried to any taxable year ending after  Oct. 22, 2004 , see  section 417(c) of Pub. L. 108–357 , set out as a note under  section 904 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13235(c) of Pub. L. 103–66 , set out as a note under  section 904 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title II, §\u202f211(e) ,  Sept. 3, 1982 ,  96 Stat. 450 , as amended by  Pub. L. 97–448, title III, §\u202f306(a)(5) ,  96 Stat. 2401 ;  Pub. L. 98–369, div. A, title VII, §\u202f712(e) ,  July 18, 1984 ,  98 Stat. 947 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 904 of this title ] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(2)   Retention of old sections 907 (b)  and 904 (f) (4) where taxpayer had separate basket foreign loss.— “(A)   In general.— If, after applying old sections 907(b) and 904(f)(4) to a taxable year beginning before  January 1, 1983 , the taxpayer had a separate basket foreign loss, such loss shall not be recaptured from income of a kind not taken into account in computing the amount of such separate basket foreign loss more rapidly than ratably over the 8-year period (or such shorter period as the taxpayer may select) beginning with the first taxable year beginning after  December 31, 1982 . \n \n “(B)   Definitions.— For purposes of this paragraph— “(i)  The term ‘separate basket foreign loss’ means any foreign loss attributable to activities taken into account (or not taken into account) in determining foreign oil related income (as defined in old section 907(c)(2)). \n \n “(ii)  An ‘old’ section is such section as in effect on the day before the date of the enactment of this Act [ Sept. 3, 1982 ].”\nAmendment by  section 301(b)(14) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nPub. L. 95–600, title VII, §\u202f701(u)(8)(D) ,  Nov. 6, 1978 ,  92 Stat. 2916 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(i)  The amendments made by this paragraph [amending this section and  section 904 of this title ] shall apply, in the case of individuals, to taxable years ending after  December 31, 1974 , and, in the case of corporations, to taxable years ending after  December 31, 1976 . \n \n “(ii)  In the case of any taxable year ending after  December 31, 1975 , with respect to foreign oil related income (within the meaning of section 907(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), the overall limitation provided by section 904(a)(2) of such Code shall apply and the per-country limitation provided by section 904(a)(1) of such Code shall not apply.”\nAmendment by  section 1031(b)(6)(A) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , with exceptions for certain mining operations, income from possessions, and carryback and carryover in the case of mining operations and income from a possession, see  section 1031(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nAmendment by  section 1032(b)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , and amendment by  section 1032(b)(2) of Pub. L. 94–455  applicable to losses sustained in taxable years beginning after  Dec. 31, 1975 , see  section 1032(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nPub. L. 94–455, title X, §\u202f1035(e) ,  Oct. 4, 1976 ,  90 Stat. 1633 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  December 31, 1976 . \n \n “(2)  The amendment made by subsection (b) [amending this section] shall apply to taxable years ending after  December 31, 1974 ; except that the last sentence of section 907(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall only apply to taxable years ending after  December 31, 1975 . \n \n “(3)  The amendment made by subsection (c) [enacting provisions set out below] shall apply to taxable years beginning after  June 29, 1976 . \n \n “(4)  The amendments made by subsection (d) [amending this section] shall apply to taxes paid or accrued during taxable years ending after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nAmendment by  section 1052(c)(4) of Pub. L. 94–455  effective with respect to taxable years beginning after  December 31, 1979 , see  section 1052(d) of Pub. L. 94–455 , set out as a note under  section 170 of this title .\nPub. L. 94–12, title VI, §\u202f601(d) ,  Mar. 29, 1975 ,  89 Stat. 58 , provided that:  \n “The amendments made by this section [enacting this section and amending  section 901 of this title ] shall apply to taxable years ending after  December 31, 1974 ; except that— \n “(1)  the second sentence of section 907(b) shall apply to taxable years ending after  December 31, 1975 , and \n \n “(2)  the provisions of section 907(f) shall apply to losses sustained in taxable years ending after  December 31, 1975 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 94–455, title X, §\u202f1035(c) ,  Oct. 4, 1976 ,  90 Stat. 1631 , as amended by  Pub. L. 95–600, title VII , §§\u202f701(u)(9), 703(h)(1),  Nov. 6, 1978 ,  92 Stat. 2916 , 2940;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  For purposes of section 901 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], there shall be treated as income, war profits, and excess profits taxes to be taken into account under section 907(a) of such Code amounts designated as income taxes of a foreign government by such government (which otherwise would not be treated as taxes for purposes of section 901 of such Code) with respect to production-sharing contracts for the extraction of foreign oil or gas. \n \n “(2)  The amounts specified in paragraph (1) shall not exceed the lessor of— “(A)  the product of the foreign oil and gas extraction income (as defined in section 907(c) of such Code) with respect to all such production-sharing contracts multiplied by the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11 of such Code, or \n \n “(B)  the excess of the total amount of foreign oil and gas extraction income (as so defined) for the taxable year multiplied by the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11 of such Code over the amount of any income, war profits, and excess profits taxes paid or accrued (or deemed to have been paid) without regard to paragraph (1) during the taxable year with respect to foreign oil and gas extraction income. \n \n \n “(3)  The production-sharing contracts taken into account for purposes of paragraph (1) shall be those contracts which were entered into before  April 8, 1976 , for the sharing of foreign oil and gas production with a foreign government (or an entity owned by such government) with respect to which amounts claimed as taxes paid or accrued to such foreign government for taxable years beginning before  June 30, 1976 , will not be disallowed as taxes. A contract described in the preceding sentence shall be taken into account under paragraph (1) only with respect to amounts (A) paid or accrued to the foreign government before  January 1, 1978 , and (B) attributable to income earned before such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section 275(a)(4) and section 78 shall not apply to any amount of taxes denied credit under subsection (a).\n2017—Subsec. (a).  Pub. L. 115–97  struck out “902 or” after “or under section” in introductory provisions.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 94–455, title X, §\u202f1066(a) ,  Oct. 4, 1976 ,  90 Stat. 1654 , provided that: \n “(1)   General rule .— The amendments made by this part (other than by section 1065) [enacting this section and  section 999 of this title  and amending sections 952 and 995 of this title] apply to participation in or cooperation with an international boycott more than 30 days after the date of enactment of this Act [ Oct. 4, 1976 ]. \n \n “(2)   Existing contracts .— In the case of operations which constitute participation in or cooperation with an international boycott and which are carried out in accordance with the terms of a binding contract entered into before  September 2, 1976 , the amendments made by this part (other than by section 1065) apply to such participation or cooperation after  December 31, 1977 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'If there is a foreign tax credit splitting event with respect to a foreign income tax paid or accrued by the taxpayer, such tax shall not be taken into account for purposes of this title before the taxable year in which the related income is taken into account under this chapter by the taxpayer.\nIn the case of any foreign income tax not taken into account by reason of subsection (a) or (b), except as otherwise provided by the Secretary, such tax shall be so taken into account in the taxable year referred to in such subsection (other than for purposes of section 986(a)) as a foreign income tax paid or accrued in such taxable year.\nThere is a foreign tax credit splitting event with respect to a foreign income tax if the related income is (or will be) taken into account under this chapter by a covered person.\nThe term “foreign income tax” means any income, war profits, or excess profits tax paid or accrued to any foreign country or to any possession of the United States.\nThe term “related income” means, with respect to any portion of any foreign income tax, the income (or, as appropriate, earnings and profits) to which such portion of foreign income tax relates.\n2017—Subsec. (b).  Pub. L. 115–97, §\u202f14301(c)(29)(A) , (C), (D), substituted “specified 10-percent owned foreign corporations” for “section 902 corporations” in heading, “specified 10-percent owned foreign corporation (as defined in section 245A(b) without regard to paragraph (2) thereof)” for “section 902 corporation” in introductory provisions, and “by such specified 10-percent owned foreign corporation or a domestic corporation which is a United States shareholder with respect to such specified 10-percent owned foreign corporation.” for “by such section 902 corporation or a domestic corporation which meets the ownership requirements of subsection (a) or (b) of section 902 with respect to such section 902 corporation.” in concluding provisions.\nSubsec. (b)(1).  Pub. L. 115–97, §\u202f14301(c)(29)(B) , struck out “902 or” after “for purposes of section”.\nSubsec. (d)(5).  Pub. L. 115–97, §\u202f14301(c)(30) , struck out par. (5). Text read as follows: “The term ‘section 902 corporation’ means any foreign corporation with respect to which one or more domestic corporations meets the ownership requirements of subsection (a) or (b) of section 902.”\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 111–226, title II, §\u202f211(c) ,  Aug. 10, 2010 ,  124 Stat. 2395 , provided that:  \n “The amendments made by this section [enacting this section] shall apply to— “(1)  foreign income taxes (as defined in section 909(d) of the Internal Revenue Code of 1986, as added by this section) paid or accrued in taxable years beginning after  December 31, 2010 ; and \n \n “(2)  foreign income taxes (as so defined) paid or accrued by a [former] section 902 corporation (as so defined) in taxable years beginning on or before such date (and not deemed paid under section 902(a) or 960 of such Code on or before such date), but only for purposes of applying sections 902 and 960 with respect to periods after such date. \n \n\n Section 909(b)(2) of the Internal Revenue Code of 1986, as added by this section, shall not apply to foreign income taxes described in paragraph (2).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'The term “foreign earned income” with respect to any individual means the amount received by such individual from sources within a foreign country or countries which constitute earned income attributable to services performed by such individual during the period described in subparagraph (A) or (B) of subsection (d)(1), whichever is applicable.\nThe foreign earned income of an individual which may be excluded under subsection (a)(1) for any taxable year shall not exceed the amount of foreign earned income computed on a daily basis at an annual rate equal to the exclusion amount for the calendar year in which such taxable year begins.\nFor purposes of applying subparagraph (A), amounts received shall be considered received in the taxable year in which the services to which the amounts are attributable are performed.\nIn applying subparagraph (A) with respect to amounts received from services performed by a husband or wife which are community income under community property laws applicable to such income, the aggregate amount which may be excludable from the gross income of such husband and wife under subsection (a)(1) for any taxable year shall equal the amount which would be so excludable if such amounts did not constitute community income.\nThe exclusion amount for any calendar year is $80,000.\nThe Secretary may issue regulations or other guidance providing for the adjustment of the percentage under subparagraph (A)(i) on the basis of geographic differences in housing costs relative to housing costs in the United States.\nExcept as provided in clause (ii), only housing expenses incurred with respect to that abode which bears the closest relationship to the tax home of the individual shall be taken into account under paragraph (1).\nTo the extent the housing cost amount of any individual for any taxable year is not attributable to employer provided amounts, such amount shall be treated as a deduction allowable in computing adjusted gross income to the extent of the limitation of subparagraph (B).\nThe amount not allowable as a deduction for any taxable year under subparagraph (A) by reason of the limitation of subparagraph (B) shall be treated as a deduction allowable in computing adjusted gross income for the succeeding taxable year (and only for the succeeding taxable year) to the extent of the limitation of clause (ii) for such succeeding taxable year.\nFor purposes of this paragraph, the term “employer provided amounts” means any amount paid or incurred on behalf of the individual by the individual’s employer which is foreign earned income included in the individual’s gross income for the taxable year (without regard to this section).\nFor purposes of this paragraph, an individual’s foreign earned income for any taxable year shall be determined without regard to the limitation of subparagraph (A) of subsection (b)(2).\nThe term “earned income” means wages, salaries, or professional fees, and other amounts received as compensation for personal services actually rendered, but does not include that part of the compensation derived by the taxpayer for personal services rendered by him to a corporation which represents a distribution of earnings or profits rather than a reasonable allowance as compensation for the personal services actually rendered.\nIn the case of a taxpayer engaged in a trade or business in which both personal services and capital are material income-producing factors, under regulations prescribed by the Secretary, a reasonable allowance as compensation for the personal services rendered by the taxpayer, not in excess of 30 percent of his share of the net profits of such trade or business, shall be considered as earned income.\nThe term “tax home” means, with respect to any individual, such individual’s home for purposes of section 162(a)(2) (relating to traveling expenses while away from home). An individual shall not be treated as having a tax home in a foreign country for any period for which his abode is within the United States, unless such individual is serving in an area designated by the President of the United States by Executive order as a combat zone for purposes of section 112 in support of the Armed Forces of the United States.\nNo deduction or exclusion from gross income under this subtitle or credit against the tax imposed by this chapter (including any credit or deduction for the amount of taxes paid or accrued to a foreign country or possession of the United States) shall be allowed to the extent such deduction, exclusion, or credit is properly allocable to or chargeable against amounts excluded from gross income under subsection (a).\nThe sum of the amount excluded under subsection (a) and the amount deducted under subsection (c)(4)(A) for the taxable year shall not exceed the individual’s foreign earned income for such year.\nSubparagraph (A) shall not apply to any individual during any period in which such individual’s activities are not in violation of the regulations described in subparagraph (B).\nAn election under subsection (a) shall apply to the taxable year for which made and to all subsequent taxable years unless revoked under paragraph (2).\nA taxpayer may revoke an election made under paragraph (1) for any taxable year after the taxable year for which such election was made. Except with the consent of the Secretary, any taxpayer who makes such a revocation for any taxable year may not make another election under this section for any subsequent taxable year before the 6th taxable year after the taxable year for which such revocation was made.\nTerms used in this paragraph which are also used in section 1(h) shall have the respective meanings given such terms by section 1(h), except that in applying subparagraph (B) the adjustments under part VI of subchapter A shall be taken into account.\nFor administrative and penal provisions relating to the exclusions provided for in this section, see sections 6001, 6011, 6012(c), and the other provisions of subtitle F.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Trading with the Enemy Act, referred to in subsec. (d)(8)(B)(i), is  act Oct. 6, 1917, ch. 106 ,  40 Stat. 411 , which is classified principally to chapter 53 (§\u202f4301 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see  section 4301 of Title 50  and Tables.\nThe International Emergency Economic Powers Act, referred to in subsec. (d)(8)(B)(i), is  Pub. L. 95–223, title II ,  Dec. 28, 1977 ,  91 Stat. 1626 , which is classified generally to chapter 35 (§\u202f1701 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see Short Title note set out under  section 1701 of Title 50  and Tables.\n2018–Subsec. (d)(3).  Pub. L. 115–123  inserted before period at end “,\u2000unless such individual is serving in an area designated by the President of the United States by Executive order as a combat zone for purposes of section 112 in support of the Armed Forces of the United States”.\nSubsec. (d)(8)(B)(i).  Pub. L. 115–141  substituted “( 50 U.S.C. 4301  et seq.)” for “(50 U.S.C. App. 1 et seq.)”.\n2017—Subsec. (b)(2)(D)(ii)(II).  Pub. L. 115–97, §\u202f11002(d)(9) , substituted “for ‘2016’ in subparagraph (A)(ii)” for “for ‘1992’ in subparagraph (B)”.\nSubsec. (f)(1)(B).  Pub. L. 115–97, §\u202f12001(b)(3)(E)(i) , substituted “section 55(b)(1)(B)” for “section 55(b)(1)(A)(ii)” and “section 55(b)(1)(A)” for “section 55(b)(1)(A)(i)” in introductory provisions.\nSubsec. (f)(2)(B).  Pub. L. 115–97, §\u202f12001(b)(3)(E)(ii) , substituted “section 55(b)(1)(B)” for “section 55(b)(1)(A)(ii)” in introductory provisions and in cl. (i).\n2014—Subsec. (b)(2)(D)(i).  Pub. L. 113–295, §\u202f221(a)(73) , amended cl. (i) generally. Prior to amendment, cl. (i) listed exclusion amounts for calendar years beginning from 1998 to 2002 and thereafter.\nSubsec. (f)(1).  Pub. L. 113–295, §\u202f215(a) , inserted concluding provisions.\nSubsec. (f)(2)(B)(ii).  Pub. L. 113–295, §\u202f202(b) , substituted “described in section 1(h)(1)(B), and the reference in section 55(b)(3)(C)(ii) to the excess described in section 1(h)(1)(C)(ii), shall each be treated as a reference to each such excess as determined” for “described in section 1(h)(1)(B) shall be treated as a reference to such excess as determined”.\n2007—Subsec. (f).  Pub. L. 110–172  amended heading and text generally, substituting provisions relating to determination of tax liability, special rules for determining regular tax and alternative minimum tax, and definitions for former provisions relating to determination of tax liability and tentative minimum tax.\n2006—Subsec. (b)(2)(D)(ii).  Pub. L. 109–222, §\u202f515(a)(1) , substituted “2005” for “2007” in introductory provisions.\nSubsec. (b)(2)(D)(ii)(II).  Pub. L. 109–222, §\u202f515(a)(2) , substituted “2004” for “2006”.\nSubsec. (c)(1)(A).  Pub. L. 109–222, §\u202f515(b)(2)(A) , inserted “to the extent such expenses do not exceed the amount determined under paragraph (2)” after “the taxable year”.\nSubsec. (c)(1)(B)(i).  Pub. L. 109–222, §\u202f515(b)(1) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “16 percent of the salary (computed on a daily basis) of an employee of the United States who is compensated at a rate equal to the annual rate paid for step 1 of grade GS–14, multiplied by”.\nSubsec. (c)(2) to (4).  Pub. L. 109–222, §\u202f515(b)(2)(B) , added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.\nSubsec. (d)(4).  Pub. L. 109–222, §\u202f515(b)(2)(C)(i) , substituted “,\u2000(c)(1)(B)(ii), and (c)(2)(A)(ii)” for “and (c)(1)(B)(ii)” in concluding provisions.\nSubsec. (d)(7).  Pub. L. 109–222, §\u202f515(b)(2)(C)(ii) , which directed substitution of “subsection (c)(4)” for “subsection (c)(3)”, was executed by substituting “subsection (c)(4)(A)” for “subsection (c)(3)(A)” to reflect the probable intent of Congress.\nSubsecs. (f), (g).  Pub. L. 109–222, §\u202f515(c) , added subsec. (f) and redesignated former subsec. (f) as (g).\n1997—Subsec. (b)(2)(A).  Pub. L. 105–34, §\u202f1172(a)(1) , substituted “equal to the exclusion amount for the calendar year in which such taxable year begins” for “of $70,000”.\nSubsec. (b)(2)(D).  Pub. L. 105–34, §\u202f1172(a)(2) , added subpar. (D).\n1986—Subsec. (b)(2)(A).  Pub. L. 99–514, §\u202f1233(a) , in amending subpar. (A) generally, substituted “an annual rate of $70,000” for “the annual rate set forth in the following table for each day of the taxable year within the applicable period described in subparagraph (A) or (B) of subsection (d)(1):\nSubsec. (d)(8), (9).  Pub. L. 99–514, §\u202f1233(b) , added par. (8) and redesignated former par. (8) as (9).\n1984—Subsec. (b)(2)(A).  Pub. L. 98–369  amended table by striking out item which set the annual rate at $75,000 for taxable years beginning in 1982, substituted item setting the annual rate at $80,000 for taxable years beginning in 1983, 1984, 1985, 1986, or 1987 for items which had set annual rates of $80,000 for taxable years beginning in 1983, $85,000 for taxable years beginning in 1984, $90,000 for taxable years beginning in 1985, and $95,000 for taxable years beginning in 1986 and thereafter, and added items setting annual rates of $85,000 for taxable years beginning in 1988, $90,000 for taxable years beginning in 1989, and $95,000 for taxable years beginning in 1990 and thereafter.\n1983—Subsec. (c)(3)(B)(ii).  Pub. L. 97–448, §\u202f101(c)(2) , substituted “subsection (a)” for “subsection (a)(1)”.\nSubsec. (d)(7), (8).  Pub. L. 97–448, §\u202f101(c)(1) , added par. (7) and redesignated former par. (7) as (8).\n1981— Pub. L. 97–34  amended section generally, modifying the eligibility standards of existing law, replacing the existing system of deduction for excess living costs with an exclusion of a portion of foreign earned income, and providing for an individual’s election to exclude a portion of his income or to deduct an amount for housing, based on his housing expenses.\n1980— Pub. L. 96–595  §\u202f4(c)(1), inserted “or from charitable services” after “camps” in section catchline.\nSubsec. (a).  Pub. L. 96–595, §\u202f4(a) , inserted “or who performs qualified charitable services in a lesser developed country,” after “hardship area”.\nPub. L. 96–222, §\u202f108(a)(1)(C) , (D), substituted “a foreign country or” for “qualified foreign” in par. (2) and, in provisions following par. (2), substituted “his gross income any deduction,” for “his gross income” and “other than the deduction allowed by section 217” for “other than the deductions allowed by sections 217”.\nSubsec. (c)(1)(A).  Pub. L. 96–595, §\u202f4(b)(1) , substituted “Dollar limitations” for “In general” in heading, redesignated existing provisions as cl. (i), and in cl. (i) as so redesignated, inserted “Camp residents—In the case of an individual who resides in a camp located in a hardship area” before “the amount excluded”, and added cls. (ii) and (iii).\nSubsec. (c)(1)(D), (E).  Pub. L. 96–595, §\u202f4(b)(2) , added subpars. (D) and (E).\n1978— Pub. L. 95–615, §\u202f202(g)(1) , formerly §\u202f202(f)(1), substituted “Income earned by individuals in certain camps” for “Earned income from sources without the United States” in section catchline.\nSubsec. (a).  Pub. L. 95–615, §\u202f202(a) , in introductory provisions inserted reference to an individual described in section 913(a) who, because of his employment, resides in a camp located in a hardship area, in par. (1) substituted reference to amounts received from sources within a foreign country or countries for reference to amounts received from sources without the United States, in par. (2) substituted reference to amounts received from sources within qualified foreign countries for reference to amounts received from sources without the United States, and in provisions following par. (2) struck out “any deductions (other than those allowed by section 151, relating to personal exemptions),” after “deduction from his gross income” and inserted “,\u2000other than the deductions allowed by sections 217 (relating to moving expenses)” after “subsection”.\nPub. L. 95–600, §\u202f701(u)(10)(A) , inserted provisions setting forth formula for determining amount of reduction of taxes, and struck out provisions relating to the credit against taxes.\nSubsec. (c)(1)(A).  Pub. L. 95–615, §\u202f202(b) , substituted “The amount excluded” for “Except as provided in subparagraphs (B) and (C), the amount excluded” and “an annual rate of $20,000 for days during which he resides in a camp” for “an annual rate of $15,000”.\nSubsec. (c)(1)(B).  Pub. L. 95–615, §\u202f202(b) , substituted provisions relating to conditions upon which an individual will be considered to reside in a camp because of his employment for provisions which related to the amount excluded from the gross income of an individual performing qualified charitable services.\nSubsec. (c)(1)(C).  Pub. L. 95–615, §\u202f202(b) , substituted provisions relating to definition of “hardship area” for provisions which related to the amount excluded from the gross income of an individual performing both qualified charitable services and other services.\nSubsec. (c)(1)(D).  Pub. L. 95–615, §\u202f202(b) , struck out subpar. (D) which defined “qualified charitable services”.\nSubsec. (c)(7).  Pub. L. 95–615, §\u202f202(c) , added par. (7).\nPub. L. 95–600, §\u202f703(e) , redesignated former par. (8) as (7). Such par. (8) was subsequently repealed by  section 202(e) of Pub. L. 95–615  without taking into account the redesignation of par. (8) as (7) by  Pub. L. 95–600 . See 1978 Amendment note for subsec. (c)(8) below.\nSubsec. (c)(8).  Pub. L. 95–615, §\u202f202(e) , struck out par. (8) which related to the nonexclusion under subsec. (a) of any amount attributable to services performed in a foreign country or countries if such amount was received outside of the foreign country or countries where such services were performed and if one of the purposes was the avoidance of any tax imposed by such foreign country or countries on such amount.\nSubsec. (d).  Pub. L. 95–615, §\u202f202(d)(1) , redesignated subsec. (e) as (d), inserted “for the taxable year” after “section apply”, and struck out provision that an election was applicable to the taxable year for which made and to all subsequent taxable years. Former subsec. (d), which related to the computation of tax imposed by section 1 or section 1201 if an individual earned income which was excluded from gross income under subsec. (a) and which defined “net taxable income” and “net excluded earned income”, was struck out.\nSubsec. (d)(1).  Pub. L. 95–600, §\u202f401(b)(4) , struck out provisions respecting applicability of  section 1201 of this title .\nSubsecs. (e), (f).  Pub. L. 95–615, §\u202f202(d)(1) , (2), redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).\n1977—Subsec. (d)(1)(B).  Pub. L. 95–30  substituted “on the sum of (i) the amount of net excluded earned income, and (ii) the zero bracket amount” for “on the amount of net excluded earned income”.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1011(b)(1), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in par. (1), and in provisions following par. (2), inserted “or as a credit against the tax imposed by this chapter any credit for the amount of taxes paid or accrued to a foreign country or possession of the United States, to the extent that such deductions or credit is” after “personal exemptions)”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(1).  Pub. L. 94–455, §\u202f1011(a) , reduced the amount excludable from individual’s gross income from $20,000 to $15,000 and $20,000 for employees of charitable organizations, added special rule to be applied to income from charitable sources and other sources combined, inserted definition of “qualified charitable services”, and struck out provisions relating to $25,000 exclusion for individual who has been a bona fide resident in a foreign country for an uninterrupted period of 3 years.\nSubsec. (c)(7).  Pub. L. 94–455, §\u202f1901(a)(115) , struck out par. (7) relating to certain noncash remuneration from sources outside the United States.\nSubsec. (c)(8).  Pub. L. 94–455, §\u202f1011(b)(2) , added par. (8).\nSubsecs. (d) to (f).  Pub. L. 94–455, §\u202f1011(b)(3) , added subsecs. (d) and (e) and redesignated former subsec. (d) as (f).\n1966—Subsec. (d).  Pub. L. 89–809  designated existing text as par. (1) and added par. (2).\n1964—Subsec. (c)(1)(B).  Pub. L. 88–272  substituted “$25,000” for “$35,000”.\n1962—Subsec. (a).  Pub. L. 87–834  substituted “which constitute earned income attributable to services performed during such uninterrupted period” for “if such amounts constitute earned income (as defined in subsection (b)) attributable to such period” in par. (1), and “which constitute earned income attributable to services performed during such 18-month period” for “if such amounts constitute earned income (as defined in subsection (b)) attributable to such period” in par. (2), inserted provisions in pars. (1) and (2) requiring the amount excluded under such paragraphs to be computed by applying the special rules contained in subsec. (c), and eliminated provisions from par. (2) which limited the amount excluded under such paragraph to not more than $20,000 if the 18-month period includes the entire taxable year, and to not more than an amount which bears the same ratio to $20,000 as the number of days in the part of the taxable year within the 18-month period bears to the total number of days in such year if the 18-month period does not include the entire taxable year.\nSubsecs. (c), (d).  Pub. L. 87–834  added subsec. (c) and redesignated former subsec. (c) as (d).\n1958—Subsec. (c).  Pub. L. 85–866  added subsec. (c).\nPub. L. 115–123, div. D, title II, §\u202f41116(b) ,  Feb. 9, 2018 ,  132 Stat. 162 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  section 11002(d)(9) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 12001(b)(3)(E) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 202(b) of Pub. L. 113–295  effective as if included in the provision of the American Taxpayer Relief Act of 2012,  Pub. L. 112–240 , to which such amendment relates, see  section 202(f) of Pub. L. 113–295 , set out as a note under  section 55 of this title .\nAmendment by  section 215(a) of Pub. L. 113–295  effective as if included in the provisions of the Tax Technical Corrections Act of 2007,  Pub. L. 110–172 , to which such amendment relates, see  section 215(c) of Pub. L. 113–295 , set out as a note under  section 56 of this title .\nAmendment by  section 221(a)(73) of Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 110–172  effective as if included in the provisions of the Tax Increase Prevention and Reconciliation Act of 2005,  Pub. L. 109–222 , to which such amendment relates, with certain exceptions, see  section 4(d) of Pub. L. 110–172 , set out as a note under  section 355 of this title .\nPub. L. 109–222, title V, §\u202f515(d) ,  May 17, 2006 ,  120 Stat. 368 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nPub. L. 105–34, title XI, §\u202f1172(b) ,  Aug. 5, 1997 ,  111 Stat. 988 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nPub. L. 99–514, title XII, §\u202f1233(c) ,  Oct. 22, 1986 ,  100 Stat. 2565 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 98–369  applicable to taxable years ending after  Dec. 31, 1983 , see  section 18(a) of Pub. L. 98–369 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title I, §\u202f115 ,  Aug. 13, 1981 ,  95 Stat. 196 , provided that:  “The amendments made by this subtitle [subtitle B (§§\u202f111–115) of title I of  Pub. L. 97–34 , amending this section and sections 37, 43, 62, 63, 105, 119, 410, 879, 1034, 1302, 1303, 1304, 1402, 3401, 6012, and 6091 of this title and repealing  section 913 of this title ] (other than section 114 [amending  section 208 of Pub. L. 95–615 , set out below]) shall apply with respect to taxable years beginning after  December 31, 1981 .”\nPub. L. 96–595, §\u202f4(d) ,  Dec. 24, 1980 ,  94 Stat. 3467 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1978 .”\nAmendment by  section 107(a)(3)(B) of Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by section 108(a)(1)(A), (C), (D) of  Pub. L. 96–222  effective as if included in the Foreign Earned Income Act of 1978,  Pub. L. 95–615 , see  section 108(a)(2)(A) of Pub. L. 96–222 , set out as a note under  section 3 of this title .\nAmendment by  section 401(b)(4) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 401(c) of Pub. L. 95–600 , set out as a note under  section 3 of this title .\nPub. L. 95–600, title VII, §\u202f701(u)(10)(B) ,  Nov. 6, 1978 ,  92 Stat. 2917 , as amended by  Pub. L. 96–222, title I, §\u202f107(a)(1)(B) ,  Apr. 1, 1980 ,  94 Stat. 222 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning in calendar year 1978 but only in the case of taxpayers who make an election under section 209(c) of the Foreign Earned Income Act of 1978 [ section 209(c) of Pub. L. 95–615 , set out below].”\nAmendment by  section 703(e) of Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nPub. L. 95–615, title II, §\u202f209 ,  Nov. 8, 1978 ,  92 Stat. 3109 , provided that: \n “(a)   General Rule .— Except as provided in subsections (b) and (c), the amendments made by this title [see  section 201(a) of Pub. L. 95–615 , set out as a Short Title of 1978 Amendment note under  section 1 of this title ] shall apply to taxable years beginning after  December 31, 1977 . \n \n “(b)   Wage Withholding .— The amendment made by section 207(a) [amending  section 3401 of this title ] shall apply to remuneration paid after the date of the enactment of this Act. [ Nov. 8, 1978 ]. \n \n “(c)   Election of Prior Law.— “(1)  A taxpayer may elect not to have the amendments made by this title [see  section 201(a) of Pub. L. 95–615 , set out as a Short Title of 1978 Amendment note under  section 1 of this title ] apply with respect to any taxable year beginning after  December 31, 1977 , and before  January 1, 1979 . \n \n “(2)  An election under this subsection shall be filed with a taxpayer’s timely filed return for the first taxable year beginning after  December 31, 1977 .”\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title X, §\u202f1011(d) ,  Oct. 4, 1976 ,  90 Stat. 1611 , as amended by  Pub. L. 95–30, title III, §\u202f302 ,  May 23, 1977 ,  91 Stat. 152 ;  Pub. L. 95–615, §\u202f4(a) ,  Nov. 8, 1978 ,  92 Stat. 3097 , provided that:  “The amendments made by this section [amending this section and  section 36 of this title ] shall apply to taxable years beginning after  December 31, 1977 .”\nAmendment by  section 1901(a)(115) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 88–272, title II, §\u202f237(b) ,  Feb. 26, 1964 ,  78 Stat. 128 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1964 .”\nPub. L. 87–834, §\u202f11(c)(1) ,  Oct. 16, 1962 ,  76 Stat. 1005 , provided that:  \n “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  September 4, 1962 , but only with respect to amounts— \n “(A)  received after  March 12, 1962 , which are attributable to services performed after  December 31, 1962 , or \n \n “(B)  received after  December 31, 1962 , which are attributable to services performed on or before  December 31, 1962 , unless on  March 12, 1962 , there existed a right (whether forfeitable or nonforfeitable) to receive such amounts.”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1957 , see  section 72(c) of Pub. L. 85–866  set out as a note under  section 6012 of this title .\nSection 703(e) of Pub. L. 95–600 , cited as a credit to this section, was repealed by  Pub. L. 96–222, title I, §\u202f107(a)(3)(B) ,  Apr. 1, 1980 ,  94 Stat. 223 . See 1978 Amendment note for subsec. (c)(7) of this section set out above.\nPub. L. 99–514, title XII, §\u202f1232(a) ,  Oct. 22, 1986 ,  100 Stat. 2563 , provided that:  “Nothing in the Panama Canal Treaty (or in any agreement implementing such Treaty) shall be construed as exempting (in whole or in part) any citizen or resident of the United States from any tax under the Internal Revenue Code of 1954 or 1986. The preceding sentence shall apply to all taxable years whether beginning before, on, or after the date of the enactment of this Act [ Oct. 22, 1986 ] (or in the case of any tax not imposed with respect to a taxable year, to taxable events after the date of enactment of this Act.)”\nRules similar to the rules of  section 913(j)(4) of this title  to apply for the purposes of applying this section for taxable years beginning in 1977 or 1978 in the case of an individual who leaves a foreign country after  Aug. 31, 1978 , see  section 1(b) of Pub. L. 96–608 , set out as an Effective Date of 1980 Amendment note under  section 913 of this title .\nPub. L. 95–615, §\u202f4(b) ,  Nov. 8, 1978 ,  92 Stat. 3097 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If for any taxable year beginning in 1977— “(1)  an individual is entitled to the benefits of section 911 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and \n \n “(2)  such individual chooses to take to any extent the benefits of section 901 of such Code, \n \n\n then such individual shall be treated for such taxable year as an individual for whom an unused zero bracket amount computation is provided by section 63(e) of such Code.”\nPub. L. 95–615, title II, §\u202f208 ,  Nov. 8, 1978 ,  92 Stat. 3108 , as amended by  Pub. L. 97–34, title I, §\u202f114 ,  Aug. 13, 1981 ,  95 Stat. 195 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 ;  Pub. L. 101–508, title XI, §\u202f11833 ,  Nov. 5, 1990 ,  104 Stat. 1388–560 , provided that: \n “(a)   General Rule .— As soon as practicable after  December 31, 1993 , and as soon as practicable after the close of each fifth calendar year thereafter, the Secretary of the Treasury shall transmit a report to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate on the operation and effects of sections 911 and 912 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(b)   Information From Federal Agencies .— Each agency of the Federal Government which pays allowances excludable from gross income under section 912 of such Code shall keep such records and furnish to the Secretary of the Treasury such information as he determines to be necessary to carry out his responsibility under subsection (a).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'In the case of civilian officers or employees of the Government of the United States stationed outside the continental United States (other than Alaska), amounts (other than amounts received under title II of the Overseas Differentials and Allowances Act) received as cost-of-living allowances in accordance with regulations approved by the President (or in the case of judicial officers or employees of the United States, in accordance with rules similar to such regulations).\nThe Foreign Service Act of 1980, referred to in par. (1)(A), is  Pub. L. 96–465 ,  Oct. 17, 1980 ,  94 Stat. 2071 . Chapter 9 of title I of the Foreign Service Act of 1980 is classified generally to subchapter IX (§\u202f4081 et seq.) of chapter 52 of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under  section 3901 of Title 22  and Tables.\nTitle II of the Overseas Differentials and Allowances Act, referred to in pars. (1)(C) and (2), was title II of  Pub. L. 86–707 ,  Sept. 6, 1960 ,  74 Stat. 793 , which was repealed and reenacted as sections 5922 to 5925 of Title 5, Government Organization and Employees, by  Pub. L. 89–554 ,  Sept. 6, 1966 ,  80 Stat. 378 .\nSections 1(e) and (f) and 22 of the Administrative Expenses Act of 1946, referred to in par. (1)(D), were repealed and the provisions thereof reenacted as sections 5726(b), 5727(b) to (e), and 5913 of Title 5, by  Pub. L. 89–554 ,  Sept. 6, 1966 ,  80 Stat. 378 .\nThe Peace Corps Act, referred to in par. (3), is  Pub. L. 87–293 ,  Sept. 22, 1961 ,  75 Stat. 612 , which is classified principally to chapter 34 (§\u202f2501 et seq.) of Title 22, Foreign Relations and Intercourse. Sections 5 and 6 of that act are classified to sections 2504 and 2505 of Title 22. For complete classification of this act to the Code, see Short Title note set out under  section 2501 of Title 22  and Tables.\n2018—Par. (1)(B).  Pub. L. 115–141  substituted “( 50 U.S.C. 3505 )” for “(50 U.S.C., sec. 403e)”.\n1988—Par. (2).  Pub. L. 100–647  inserted “(or in the case of judicial officers or employees of the United States, in accordance with rules similar to such regulations)” after “President”.\n1980—Par. (1)(A).  Pub. L. 96–465  substituted reference to chapter 9 of title I of the Foreign Service Act of 1980 for reference to title IX of the Foreign Service Act of 1946.\n1961—Par. (3).  Pub. L. 87–293  added par. (3).\n1960— Pub. L. 86–707  exempted foreign areas allowances received under section 4 of the Central Intelligence Agency Act of 1949, title II of the Overseas Differentials and Allowances Act, subsection (e) or (f) of the first section of the Administrative Expenses Act of 1946, or section 22 of such Act, provided that amounts received as post differentials shall not be exempt and in provisions relating to cost-of-living allowances excluded Alaska from term “continental United States” and amounts received under title II of the Overseas Differentials and Allowances Act.\nPub. L. 100–647, title VI, §\u202f6137(b) ,  Nov. 10, 1988 ,  102 Stat. 3723 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to allowances received after  October 12, 1987 , in taxable years ending after such date.”\nAmendment by  Pub. L. 96–465  effective  Feb. 15, 1981 , except as otherwise provided, see  section 2403 of Pub. L. 96–465 , set out as an Effective Date note under  section 3901 of Title 22 , Foreign Relations and Intercourse.\nPub. L. 87–293, title II, §\u202f201(d) ,  Sept. 22, 1961 ,  75 Stat. 625 , provided that:  “The amendments made by subsections (a) and (b) of this section [amending this section and  section 1303 of this title ] shall apply with respect to taxable years ending after  March 1, 1961 . The amendment made by subsection (c) [amending  section 3401 of this title ] shall apply with respect to remuneration paid after the date of the enactment of this Act [ Sept. 22, 1961 ].”\n[ Section 201(d) of Pub. L. 87–293  was repealed by  Pub. L. 89–572, §\u202f5(a) ,  Sept. 13, 1966 ,  80 Stat. 765 . Such repeal not deemed to affect amendments contained in such provisions, see sections 5(b) of  Pub. L. 89–572 , set out as a note under former  section 2515 of Title 22 , Foreign Relations and Intercourse.]\nPub. L. 86–707, title V, §\u202f523(b) ,  Sept. 6, 1960 ,  74 Stat. 802 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Paragraphs (1) and (2) of section 912 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by subsection (a) of this section, shall apply only with respect to amounts received on or after the date of the enactment of this Act [ Sept. 6, 1960 ] in taxable years ending on or after such date.”\nSection 201(a) of Pub. L. 87–293 , cited as a credit to this section, was repealed by  Pub. L. 89–572, §\u202f5(a) ,  Sept. 13, 1966 ,  80 Stat. 765 . Such repeal not deemed to affect amendments to this section contained in such provisions, and continuation in full force and effect until modified by appropriate authority of all determinations, authorization, regulations, orders, contracts, agreements, and other actions issued undertaken, or entered into under authority of the repealed provisions, see  section 5(b) of Pub. L. 89–572 , set out as a note under former  section 2515 of Title 22 , Foreign Relations and Intercourse.\nPub. L. 99–514, title XII, §\u202f1232(b) ,  Oct. 22, 1986 ,  100 Stat. 2564 , provided that:  “Employees of the Panama Canal Commission and civilian employees of the Defense Department of the United States stationed in Panama may exclude from gross income allowances which are comparable to the allowances excludable under section 912(1) of the Internal Revenue Code of 1986 by employees of the State Department of the United States stationed in Panama. The preceding sentence shall apply to taxable years beginning after  December 31, 1986 .”\nFunction of determining the portion of living allowances constituting basic compensation for Peace Corps volunteers or volunteer leaders under par. (3) of this section delegated by President to Director of Peace Corps to be performed in consultation with the Secretary of the Treasury, see section 1–104 of Ex. Ord. No. 12137,  May 16, 1979 , 44 F.R. 29023, set out as a note under  section 2501 of Title 22 , Foreign Relations and Intercourse.\nAuthority of President under par. (2) of this section delegated to Secretary of Defense with respect to military departments, and to Secretary of Transportation with respect to Coast Guard when it is not operating as a service in the Navy, concerning civilian employees of nonappropriated fund instrumentalities of the armed forces, see section 201 of Ex. Ord. No. 11137,  Jan. 7, 1964 , as amended, set out as a note under  section 5921 of Title 5 , Government Organization and Employees.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 95–615, title II, §\u202f203(a) ,  Nov. 8, 1978 ,  92 Stat. 3100 ; amended  Pub. L. 96–222, title I, §\u202f108(a)(1)(B) , (F),  Apr. 1, 1980 .  94 Stat. 223 , 225;  Pub. L. 96–608, §\u202f1(a) ,  Dec. 28, 1980 ,  94 Stat. 3550 , related to a deduction for certain expenses of living abroad.\nRepeal applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 911 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section 921, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 985 , provided for exclusion from gross income of exempt foreign trade income.\nA prior section 921, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 290 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1901(a)(116) ,  90 Stat. 1784 , defined Western Hemisphere trade corporation, prior to repeal by  Pub. L. 94–455, title X, §\u202f1052(b) ,  Oct. 4, 1976 ,  90 Stat. 1648 , effective with respect to taxable years beginning after  Dec. 31, 1979 .\nSection 922, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 986 , defined FSC’s.\nA prior section 922, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 291 ;  Dec. 10, 1971 ,  Pub. L. 92–178, title V, §\u202f502(c) ,  85 Stat. 550 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title X, §\u202f1052(a) , (c)(1),  90 Stat. 1647 , 1648;  Nov. 6, 1978 ,  Pub. L. 95–600, title III, §\u202f301(b)(15) ,  92 Stat. 2822 , related to a special deduction for a Western Hemisphere trade corporation, prior to repeal by  Pub. L. 94–455, title X, §\u202f1052(b) ,  Oct. 4, 1976 ,  90 Stat. 1648 , effective with respect to taxable years beginning after  Dec. 31, 1979 .\nSection 923, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 986 ; amended  Pub. L. 99–514, title XVIII, §\u202f1876(b)(3) ,  Oct. 22, 1986 ,  100 Stat. 2898 , related to exempt foreign trade income.\nSection 924, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 987 ; amended  Pub. L. 99–514, title XVIII, §\u202f1876(e)(2) , ( l ),  Oct. 22, 1986 ,  100 Stat. 2899 , 2901, related to foreign trading gross receipts.\nSection 925, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 990 , related to transfer pricing rules.\nSection 926, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 991 , related to distributions to shareholders.\nSection 927, added  Pub. L. 98–369, div. A, title VIII, §\u202f801(a) ,  July 18, 1984 ,  98 Stat. 991 ; amended  Pub. L. 99–514, title XVIII, §\u202f1876(a)(1) , (e)(1), (f)(1), (p)(5),  Oct. 22, 1986 ,  100 Stat. 2897 , 2899, 2902;  Pub. L. 100–647, title I, §\u202f1012(bb)(8)(A) ,  Nov. 10, 1988 ,  102 Stat. 3536 ;  Pub. L. 101–508, title XI, §\u202f11704(a)(10) ,  Nov. 5, 1990 ,  104 Stat. 1388–518 ;  Pub. L. 103–66, title XIII, §\u202f13239(a) ,  Aug. 10, 1993 ,  107 Stat. 509 ;  Pub. L. 105–34, title XI, §\u202f1171(a) ,  Aug. 5, 1997 ,  111 Stat. 987 , related to other definitions and special rules.\nRepeal applicable to transactions after  Sept. 30, 2000 , with special rules relating to existing foreign sales corporations, see  section 5 of Pub. L. 106–519 , set out as an Effective Date of 2000 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of this section, the term “specified possession” means Guam, American Samoa, and the Northern Mariana Islands.\nAmounts paid for services performed as an employee of the United States (or any agency thereof) shall be treated as not described in paragraph (1) or (2) of subsection (a).\n2004—Subsec. (d).  Pub. L. 108–357  amended heading and text of subsec. (d) generally, substituting provisions relating to employees of the United States for provisions consisting of pars. (1) to (3) relating to special rules concerning employees of the United States, determination of source of income, and determination of residency.\n1986— Pub. L. 99–514  amended section generally, substituting provisions relating to income from sources within Guam, American Samoa, or the Northern Mariana Islands, for former provisions relating to income from sources within possessions of the United States, which had declared in: subsec. (a), general rule as to gross income, including requirements relating to 3-year period and trade or business; subsec. (b), rule as to amounts received in United States; subsec. (c), definition of “possession of the United States”; subsec. (d), general rule allowing deductions only to extent connected with income from sources within United States, and specific exceptions to limitations of general rule; subsec. (e), deduction for personal exemption; subsec. (f), allowance of deductions and credits; subsec. (g), foreign tax credit; subsec. (h), provisions relating to employees of United States.\n1984—Subsec. (d)(2)(B).  Pub. L. 98–369  substituted “for losses” for “,\u2000for losses of property not connected with the trade or business if arising from certain casualties or theft,”.\n1977—Subsec. (d)(3).  Pub. L. 95–30  struck out par. (3) which made a cross reference to section 142(b)(2) for disallowance of the standard deduction.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1051(c)(1) , struck out all references to domestic corporations and made subsection applicable only to individual citizens.\nSubsec. (c).  Pub. L. 94–455, §\u202f1051(c)(2) , substituted “Commonwealth of Puerto Rico, the Virgin Islands of the United States, or Guam” for “Virgin Islands of the United States, and such term when used with respect to citizens of the United States does not include Puerto Rico or Guam” after “does not include the”.\nSubsec. (d)(1).  Pub. L. 94–455 , §§\u202f1051(c)(3), 1906(b)(13)(A), substituted “a citizen of the United States” for “persons” after “in the case of” and struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455 , §§\u202f1051(c)(3), 1906(b)(13)(A), substituted “A citizen of the United States” for “Persons” after “Allowance of deductions and credits” and struck out in two places “or his delegate” after “Secretary”.\nSubsecs. (h), (i).  Pub. L. 94–455, §\u202f1901(a)(117) , redesignated subsec. (i) as (h). Former subsec. (h), relating to the status of a citizen of the United States who has been interned by the enemy, was struck out.\n1972—Subsec. (c).  Pub. L. 92–606  substituted “Puerto Rico or Guam” for “Puerto Rico”.\n1971—Subsec. (a).  Pub. L. 92–178  provided for non-application of section in the case of a corporation for a taxable year for which it is a DISC or in which it owns at any time stock in a DISC or former DISC.\n1966—Subsec (d).  Pub. L. 89–809  made applicable to United States citizens and domestic corporations engaged in trade or business in possessions, who qualify for the special tax treatment of income qualifying for the exclusion relating to income from United States possessions, provisions which allow deductions to nonresident aliens or foreign corporations engaged in trade or business in the United States by allowing deductions only where they are allocable to income effectively connected with the trade or business in the United States and by spelling out the exceptions allowing deductions whether or not connected with income from sources within the United States in the case of losses not connected with the trade or business but incurred in transactions entered into for profit, casualty losses, and charitable contributions.\nAmendment by  Pub. L. 108–357  applicable to taxable years ending after  Oct. 22, 2004 , see  section 908(d)(1) of Pub. L. 108–357 , set out as an Effective Date note under  section 937 of this title .\nPub. L. 99–514, title XII, §\u202f1277 ,  Oct. 22, 1986 ,  100 Stat. 2600 , as amended by  Pub. L. 100–647, title I, §\u202f1012(z) ,  Nov. 10, 1988 ,  102 Stat. 3530 , provided that: \n “(a)   In General .— Except as otherwise provided in this section, the amendments made by this subtitle [subtitle G (§§\u202f1271–1277) of title XII of  Pub. L. 99–514 , enacting  section 932 of this title , amending this section and sections 28, 32, 48, 63, 153, 246, 338, 864, 876, 881, 933, 934, 936, 957, 1402, 1442, 3401, 6091, 7651, 7654, and 7655 of this title, repealing sections 932, 934A, and 935 of this title, and enacting provisions set out as notes under this section and  section 932 of this title ] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(b)   Special Rule for Guam, American Samoa, and the Northern Mariana Islands .— The amendments made by this subtitle shall apply with respect to Guam, American Samoa, or the Northern Mariana Islands (and to residents thereof and corporations created or organized therein) only if (and so long as) an implementing agreement under section 1271 [set out below] is in effect between the United States and such possession. \n \n “(c)   Special Rules for the Virgin Islands.— “(1)   In general .— The amendments made by section 1275(c) [amending sections 28, 48, 338, 864, and 934 of this title and repealing  section 934A of this title ] shall apply with respect to the Virgin Islands (and residents thereof and corporations created or organized therein) only if (and so long as) an implementing agreement is in effect between the United States and the Virgin Islands with respect to the establishment of rules under which the evasion or avoidance of United States income tax shall not be permitted or facilitated by such possession. Any such implementing agreement shall be executed on behalf of the United States by the Secretary of the Treasury, after consultation with the Secretary of the Interior. \n \n “(2)   Section 1275 (b).— “(A)   In general .— The amendment made by section 1275(b) [amending  section 7651 of this title ] shall apply with respect to— “(i)  any taxable year beginning after  December 31, 1986 , and \n \n “(ii)  any pre-1987 open year. \n \n \n “(B)   Special rules .— In the case of any pre-1987 open year— “(i)  the amendment made by section 1275(b) shall not apply to income from sources in the Virgin Islands or income effectively connected with the conduct of a trade or business in the Virgin Islands, and \n \n “(ii)  the taxpayer shall be allowed a credit— \u2001\u2001\u2001\u2001\u2001“(I)  against any additional tax imposed by subtitle A of the Internal Revenue Code of 1954 [now 1986] (by reason of the amendment made by section 1275(b)) on income not described in clause (i), \n \n \u2001\u2001\u2001\u2001\u2001“(II)  for any tax paid to the Virgin Islands before the date of the enactment of this Act [ Oct. 22, 1986 ] and attributable to such income. \n \n \n\n \u2001For purposes of clause (ii)(II), any tax paid before  January 1, 1987 , pursuant to a process in effect before  August 16, 1986 , shall be treated as paid before the date of the enactment of this Act. \n \n “(C)   Pre-1987 open year .— For purposes of this paragraph, the term ‘pre-1987 open year’ means any taxable year beginning before  January 1, 1987 , if on the date of the enactment of this Act [ Oct. 22, 1986 ] the assessment of a deficiency of income tax for such taxable year is not barred by any law or rule of law. \n \n “(D)   Exception .— In the case of any pre-1987 open year, the amendment made by section 1275(b) shall not apply to any domestic corporation if— “(i)  during the fiscal year which ended  May 31, 1986 , such corporation was actively engaged directly or through a subsidiary in the conduct of a trade or business in the Virgin Islands and such trade or business consists of business related to marine activities, and \n \n “(ii)  such corporation was incorporated on  March 31, 1983 , in Delaware. \n \n \n “(E)   Exception for certain transactions.— “(i)   In general .— In the case of any pre-1987 open year, the amendment made by section 1275(b) shall not apply to any income derived from transactions described in clause (ii) by 1 or more corporations which were formed in Delaware on or about  March 6, 1981 , and which have owned 1 or more office buildings in St. Thomas, United States Virgin Islands, for at least 5 years before the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(ii)   Description of transactions .— The transactions described in this clause are— \u2001\u2001\u2001\u2001\u2001“(I)  the redemptions of limited partnership interests for cash and property described in an agreement (as amended) dated  March 12, 1981 , \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the subsequent disposition of the properties distributed in such redemptions, and \n \n \u2001\u2001\u2001\u2001\u2001“(III)  interest earned before  January 1, 1987 , on bank deposits of proceeds received from such redemptions to the extent such deposits are located in the United States Virgin Islands. \n \n \n “(iii)   Limitation .— The aggregate reduction in tax by reason of this subparagraph shall not exceed $8,312,000. If the taxes which would be payable as the result of the application of the amendment made by section 1275(b) to pre-1987 open years exceeds the limitation of the preceding sentence, such excess shall be treated as attributable to income received in taxable years in reverse chronological order. \n \n \n \n \n “(d)   Report on Implementing Agreements .— If, during the 1-year period beginning on the date of the enactment of this Act [ Oct. 22, 1986 ], any implementing agreement described in subsection (b) or (c) is not executed, the Secretary of the Treasury or his delegate shall report to the Committee on Finance of the United States Senate, the Committee on Ways and Means, and the Committee on Interior and Insular Affairs [now Committee on Natural Resources] of the House of Representatives with respect to— “(1)  the status of such negotiations, and \n \n “(2)  the reason why such agreement has not been executed. \n \n \n “(e)   Treatment of Certain United States Persons .— Except as otherwise provided in regulations prescribed by the Secretary of the Treasury or his delegate, if a United States person becomes a resident of Guam, American Samoa, or the Northern Mariana Islands, the rules of section 877(c) of the Internal Revenue Code of 1954 [now 1986] shall apply to such person during the 10-year period beginning when such person became such a resident. Notwithstanding subsection (b), the preceding sentence shall apply to dispositions after  December 31, 1985 , in taxable years ending after such date. \n \n “(f)   Exemption From Withholding .— Notwithstanding subsection (b), the modification of section 884 of the Internal Revenue Code of 1986 by reason of the amendment to section 881 of such Code by section 1273(b)(1) of this Act shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 711(c)(2)(A)(v) of Pub. L. 98–369 , set out as a note under  section 165 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  section 1051(c) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1975 , with certain exceptions, see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nAmendment by  section 1901(a)(117) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–606, §\u202f2 ,  Oct. 31, 1972 ,  86 Stat. 1497 , provided in part that:  “The amendments made by section 1 [enacting sections 935 and 6688 of this title, amending this section, sections 932, 7654, and 7701 of this title, and  section 1421i of Title 48 , Territories and Insular Possessions, and enacting provisions set out as notes under sections 881 and 1442 of this title] (other than section 1(e)) [amending sections 881 and 1442 of this title] shall apply with respect to taxable years beginning after  December 31, 1972 .”\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before  Jan. 1, 1972 , see  section 507 of Pub. L. 92–178 , set out as an Effective Date note under  section 991 of this title .\nPub. L. 89–809, title I, §\u202f107(b) ,  Nov. 13, 1966 ,  80 Stat. 1571 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to taxable years beginning after  December 31, 1966 .”\nPub. L. 99–514, title XII, §\u202f1271 ,  Oct. 22, 1986 ,  100 Stat. 2591 , provided that: \n “(a)   In General .— Except as provided in subsection (b), nothing in the laws of the United States shall prevent Guam, American Samoa, or the Northern Mariana Islands from enacting tax laws (which shall apply in lieu of the mirror system) with respect to income— “(1)  from sources within, or effectively connected with the conduct of a trade or business within, any such possession, or \n \n “(2)  received or accrued by any resident of such possession. \n \n \n “(b)   Agreements To Alleviate Certain Problems Relating to Tax Administration .— Subsection (a) shall apply to Guam, American Samoa, or the Northern Mariana Islands only if (and so long as) an implementing agreement is in effect between the United States and such possession with respect to— “(1)  the elimination of double taxation involving taxation by such possession and taxation by the United States, \n \n “(2)  the establishment of rules under which the evasion or avoidance of United States income tax shall not be permitted or facilitated by such possession, \n \n “(3)  the exchange of information between such possession and the United States for purposes of tax administration, and \n \n “(4)  the resolution of other problems arising in connection with the administration of the tax laws of such possession or the United States. \n \n\n Any such implementing agreement shall be executed on behalf of the United States by the Secretary of the Treasury after consultation with the Secretary of the Interior. \n \n “(c)   Revenues Not To Decrease .— The total amount of the revenue received by any possession referred to in subsection (a) pursuant to its tax laws during the implementation year and each of the 4 fiscal years thereafter shall not be less than the revenue (adjusted for inflation) which was received by such possession pursuant to tax laws for its last fiscal year before the implementation year. \n \n “(d)   Nondiscriminatory Treatment Required .— Nothing in any tax law of a possession referred to in subsection (a) may discriminate against any United States person or any resident (corporate or otherwise) of any other possession. \n \n “(e)   Enforcement.— “(1)   In general .— If the Secretary of the Treasury (after consultation with the Secretary of the Interior) determines that any possession has failed to comply with subsection (c) or (d), the Secretary of the Treasury shall so notify the Governor of such possession in writing. If such possession does not comply with subsection (c) or (d) (as the case may be) within 90 days of such notification, the Secretary of the Treasury shall notify the Congress of such noncompliance. Unless the Congress by law provides otherwise, the mirror system of taxation shall be reinstated in such possession and shall be in full force and effect for taxable years beginning after such notification to the Congress. \n \n “(2)   Special rule for revenue requirements .— If the failure to comply with subsection (c) is for good cause and does not jeopardize the fiscal integrity of the possession, the Secretary may waive the requirements of subsection (c) for such period as he determines appropriate. \n \n \n “(f)   Definitions and Special Rules.— “(1)   Implementation year .— For purposes of this section, the term ‘implementation year’ means the 1st fiscal year of the possession in which the tax laws authorized by subsection (a) take effect. \n \n “(2)   Mirror system .— For purposes of this section, the mirror system of taxation consists of the provisions of law (in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) which make the provisions of the income tax laws of the United States (as in effect from time to time) in effect in a possession of the United States. \n \n “(3)   Special rule for northern mariana islands .— Notwithstanding the provisions of the last clause of  section 601(a) of Public Law 94–241  [ 48 U.S.C. 1801  note], the Commonwealth of the Northern Mariana Islands may elect to continue its mirror system of taxation without regard to whether Guam enacts tax laws under the authority provided in subsection (a).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Each individual to whom this subsection applies for the taxable year shall file his income tax return for the taxable year with both the United States and the Virgin Islands.\nIn the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the United States shall be treated as including the Virgin Islands.\nEach individual to whom subsection (a) applies for the taxable year shall pay the applicable percentage of the taxes imposed by this chapter for such taxable year (determined without regard to paragraph (3)) to the Virgin Islands.\nFor purposes of paragraph (1), the term “applicable percentage” means the percentage which Virgin Islands adjusted gross income bears to adjusted gross income.\nFor purposes of subparagraph (A), the term “Virgin Islands adjusted gross income” means adjusted gross income determined by taking into account only income derived from sources within the Virgin Islands and deductions properly apportioned or allocable thereto.\nThere shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the taxes required to be paid to the Virgin Islands under paragraph (1) which are so paid.\nEach individual to whom this subsection applies for the taxable year shall file an income tax return for the taxable year with the Virgin Islands.\nIn the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the Virgin Islands shall be treated as including the United States.\nIn the case of a joint return, this section shall be applied on the basis of the residence of the spouse who has the greater adjusted gross income (determined without regard to community property laws) for the taxable year.\nIn applying this section for purposes of determining income tax liability incurred to the Virgin Islands, the provisions of this section shall not be affected by the provisions of Federal law referred to in section 934(a).\nA prior section 932, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 292 ;  Nov. 13, 1966 ,  Pub. L. 89–809, title I, §\u202f103(m) ,  80 Stat. 1554 ;  Oct. 31, 1972 ,  Pub. L. 92–606, §\u202f1(f)(2) , (3),  86 Stat. 1497 ;  Apr. 7, 1986 ,  Pub. L. 99–272, title XII, §\u202f12103(a) ,  100 Stat. 285 , related to income taxation of citizens of possessions of the United States, prior to repeal by  Pub. L. 99–514, title XII, §\u202f1272(d)(1) ,  Oct. 22, 1986 ,  100 Stat. 2594 .\n2004—Subsecs. (a)(1)(A)(i), (c)(1)(A), (4)(A).  Pub. L. 108–357  substituted “during the entire taxable year” for “at the close of the taxable year”.\n1988—Subsec. (c)(2).  Pub. L. 100–647, §\u202f1012(w)(3) , substituted “an income tax return” for “his income tax return”.\nSubsec. (c)(4).  Pub. L. 100–647, §\u202f1012(w)(2) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “In the case of an individual who is a bona fide resident of the Virgin Islands at the close of the taxable year and who, on his return of income tax to the Virgin Islands, reports income from all sources and identifies the source of each item shown on such return, for purposes of calculating income tax liability to the United States gross income shall not include any amount included in gross income on such return.”\nSubsec. (e).  Pub. L. 100–647, §\u202f1012(w)(1) , substituted current heading for “Section not to apply to tax imposed in Virgin Islands” and amended text generally. Prior to amendment, text read as follows: “This section shall not apply for purposes of determining income tax liability incurred to the Virgin Islands.”\nAmendment by  Pub. L. 108–357  applicable to taxable years ending after  Oct. 22, 2004 , see  section 908(d)(1) of Pub. L. 108–357 , set out as an Effective Date note under  section 937 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nEnactment of section 932 and repeal of prior section 932 applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 931 of this title .\nPub. L. 99–514, title XII, §\u202f1274(c) ,  Oct. 22, 1986 ,  100 Stat. 2598 , as amended by  Pub. L. 100–647, title I, §\u202f1012(w)(4) ,  Nov. 10, 1988 ,  102 Stat. 3530 , provided that:  “The Secretary of the Treasury or his delegate shall prescribe such regulations as may be necessary or appropriate for applying the Internal Revenue Code of 1986 [this title] for purposes of determining tax liability incurred to the Virgin Islands.”\nPub. L. 99–514, title XII, §\u202f1274(b) ,  Oct. 22, 1986 ,  100 Stat. 2597 , provided that:  “Nothing in any provision of Federal law shall prevent the Virgin Islands from imposing on any person nondiscriminatory local income taxes. Any taxes so imposed shall be treated in the same manner as State and local income taxes under section 164 of the Internal Revenue Code of 1954 [now 1986] and shall not be treated as taxes to which section 901 of such Code applies.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'In the case of an individual who is a bona fide resident of Puerto Rico during the entire taxable year, income derived from sources within Puerto Rico (except amounts received for services performed as an employee of the United States or any agency thereof); but such individual shall not be allowed as a deduction from his gross income any deductions (other than the deduction under section 151, relating to personal exemptions), or any credit, properly allocable to or chargeable against amounts excluded from gross income under this paragraph.\nIn the case of an individual citizen of the United States who has been a bona fide resident of Puerto Rico for a period of at least 2 years before the date on which he changes his residence from Puerto Rico, income derived from sources therein (except amounts received for services performed as an employee of the United States or any agency thereof) which is attributable to that part of such period of Puerto Rican residence before such date; but such individual shall not be allowed as a deduction from his gross income any deductions (other than the deduction for personal exemptions under section 151), or any credit, properly allocable to or chargeable against amounts excluded from gross income under this paragraph.\n1986— Pub. L. 99–514  inserted “,\u2000or any credit,” in pars. (1) and (2).\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Tax liability incurred to the Virgin Islands pursuant to this subtitle, as made applicable in the Virgin Islands by the Act entitled “An Act making appropriations for the naval service for the fiscal year ending  June 30, 1922 , and for other purposes”, approved  July 12, 1921  ( 48 U.S.C. 1397 ), or pursuant to section 28(a) of the Revised Organic Act of the Virgin Islands, approved  July 22, 1954  ( 48 U.S.C. 1642 ), shall not be reduced or remitted in any way, directly or indirectly, whether by grant, subsidy, or other similar payment, by any law enacted in the Virgin Islands, except to the extent provided in subsection (b).\nExcept as provided in paragraph (2), subsection (a) shall not apply with respect to so much of the tax liability referred to in subsection (a) as is attributable to income derived from sources within the Virgin Islands or income effectively connected with the conduct of a trade or business within the Virgin Islands.\nParagraph (1) shall not apply to any liability payable to the Virgin Islands under section 932(b).\nIn the case of a qualified foreign corporation, subsection (a) shall not apply with respect to so much of the tax liability referred to in subsection (a) as is attributable to income which is derived from sources outside the United States and which is not effectively connected with the conduct of a trade or business within the United States.\nThe determination as to whether income is derived from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall be made under regulations prescribed by the Secretary.\n2004—Subsec. (b)(4).  Pub. L. 108–357  struck out “the Virgin Islands or” before “the United States” in two places.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1275(c)(2)(A) , struck out “or (c) or in section 934A” after “subsection (b)”.\nSubsec. (b).  Pub. L. 99–514, §\u202f1275(c)(1) , (2)(B), added subsec. (b) and struck out former subsec. (b) which excepted from subsec. (a) domestic or Virgin Islands corporations to the extent they derived income from sources without the United States under certain conditions.\nSubsec. (c).  Pub. L. 99–514, §\u202f1275(c)(1) , struck out subsec. (c) which provided an exception to subsec. (a) of this section for individual citizens of the United States residing in the Virgin Islands to the extent their income is derived from sources within the Virgin Islands.\nSubsec. (d).  Pub. L. 99–514, §\u202f1275(c)(1) , struck out subsec. (d) which related to requirement to supply information.\nSubsec. (e).  Pub. L. 99–514, §\u202f1275(a)(2)(A) , struck out subsec. (e) which provided for tax treatment of intangible property income of certain domestic corporations.\nSubsec. (f).  Pub. L. 99–514, §\u202f1275(a)(2)(A) , struck out subsec. (f) which provided a transitional rule for applying subsec. (b)(2) of this section with respect to taxable years beginning after  Dec. 31, 1982 , and before  Jan. 1, 1985 .\nPub. L. 99–514, §\u202f1876(f)(2) , struck out subsec. (f) which provided that subsec. (a) of this section not apply in the case of a Virgin Islands corporation which is a FSC.\n1984—Subsec. (f).  Pub. L. 98–369  added subsec. (f) relating to FSC.\n1983—Subsec. (a).  Pub. L. 97–455  inserted “or in section 934A” after “subsection (b) or (c)”.\n1982—Subsec. (b)(2).  Pub. L. 97–248, §\u202f213(b)(1) , substituted “65 percent” for “50 percent”.\nSubsec. (e).  Pub. L. 97–248, §\u202f213(b)(2) , added subsec. (e).\nSubsec. (f).  Pub. L. 97–248, §\u202f213(b)(2) , added a temporary subsec. (f) which provided that in applying subsec. (b)(2) with respect to taxable years beginning after  December 31, 1982 , and before  January 1, 1985 , “55 percent” shall be substituted for “65 percent” for taxable years beginning in calendar year 1983 and “60 percent” shall be substituted for “65 percent” for taxable years beginning in calendar year 1984.\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f1901(a)(118) , struck out “For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” in two places.\nAmendment by  Pub. L. 108–357  applicable to taxable years ending after  Oct. 22, 2004 , see  section 908(d)(1) of Pub. L. 108–357 , set out as an Effective Date note under  section 937 of this title .\nAmendment by section 1275(a)(2)(A), (c)(1), (2) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by  section 1876(f)(2) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nPub. L. 97–455, §\u202f1(e) ,  Jan. 12, 1983 ,  96 Stat. 2498 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting section 934A and amending this section] shall apply to amounts received after the date of the enactment of this Act [ Jan. 12, 1983 ] in taxable years ending after such date. \n \n “(2)   Withholding .— The amendment made by subsection (b) [enacting  section 1444 of this title ] shall apply to payments made after the date of the enactment of this Act.”\nAmendment by  Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , except that so much of this section to which former section 936(h)(6) applied by reason of subsec. (e)(4) of this section was applicable to taxable years ending after  July 1, 1982 , see section 213(e)(1), (2) of  Pub. L. 97–248  set out as a note under  section 246 of this title .\nAmendment by  section 1901(a)(118) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 86–779, §\u202f4(e)(1) ,  Sept. 14, 1960 ,  74 Stat. 1000 , provided that:  “The amendments made by subsection (a) [enacting this section] shall apply to tax liability incurred with respect to taxable years beginning on or after  January 1, 1960 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 97–455, §\u202f1(a) ,  Jan. 12, 1983 ,  96 Stat. 2497 , related to income tax rate on Virgin Islands source income.\nRepeal applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 931 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 92–606, §\u202f1(a) ,  Oct. 31, 1972 ,  86 Stat. 1494 ; amended  Pub. L. 108–357, title VIII, §\u202f908(c)(4) ,  Oct. 22, 2004 ,  118 Stat. 1656 , related to coordination of United States and Guam individual income taxes.\nPub. L. 108–357, title IX, §\u202f908(c)(4) , (d),  Oct. 22, 2004 ,  118 Stat. 1656 , 1657, applicable to taxable years ending after  Oct. 22, 2004 , amended section, as in effect before the effective date of its repeal, in introductory provisions of subsec. (a), by substituting “who, during the entire taxable year” for “for the taxable year who”, in subsecs. (a)(1) and (b)(1)(B), by inserting “bona fide” before “resident”, in subsec. (b)(1)(A), by inserting “(other a bona fide resident of Guam during the entire taxable year)” after “United States”, and, in subsection (b)(2), by striking out “residence and” before “citizenship”.\nRepeal applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 931 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 94–455, title X, §\u202f1051(b) ,  Oct. 4, 1976 ,  90 Stat. 1643 ; amended  Pub. L. 94–455, title XIX, §\u202f1901(b)(37)(B) ,  Oct. 4, 1976 ,  90 Stat. 1803 ;  Pub. L. 95–600, title VII, §\u202f701(u)(11)(A) , (B),  Nov. 6, 1978 ,  92 Stat. 2917 ;  Pub. L. 97–248, title II, §\u202f201(d)(8)(B) , formerly §\u202f201(c)(8)(B), §\u202f213(a),  Sept. 3, 1982 ,  96 Stat. 420 , 452, renumbered §\u202f201(d)(8)(B),  Pub. L. 97–448, title III, §\u202f306(a)(1)(A)(i) ,  Jan. 12, 1983 ,  96 Stat. 2400 ;  Pub. L. 98–369, div. A, title IV, §\u202f474(r)(22) , title VII, §\u202f712(g), title VIII, §\u202f801(d)(11),  July 18, 1984 ,  98 Stat. 843 , 947, 997;  Pub. L. 99–499, title V, §\u202f516(b)(1)(B) ,  Oct. 17, 1986 ,  100 Stat. 1770 ;  Pub. L. 99–514, title II, §\u202f231(d)(3)(G) , title VII, §\u202f701(e)(4)(I), title XII, §§\u202f1231(a)–(d), (f), 1275(a)(1), title XVIII, §\u202f1812(c)(4)(C),  Oct. 22, 1986 ,  100 Stat. 2179 , 2343, 2561–2563, 2598, 2835;  Pub. L. 100–647, title I , §§\u202f1002(h)(3), 1012(h)(2)(B), (j), (n)(4), (5), title VI, §\u202f6132(a),  Nov. 10, 1988 ,  102 Stat. 3370 , 3502, 3512, 3515, 3721;  Pub. L. 101–382, title II, §\u202f227(a) ,  Aug. 20, 1990 ,  104 Stat. 661 ;  Pub. L. 101–508, title XI, §\u202f11704(a)(11) ,  Nov. 5, 1990 ,  104 Stat. 1388–518 ;  Pub. L. 103–66, title XIII, §\u202f13227(a) , (b),  Aug. 10, 1993 ,  107 Stat. 489 , 490;  Pub. L. 104–188, title I , §§\u202f1601(a), 1704(t)(37), (80),  Aug. 20, 1996 ,  110 Stat. 1827 , 1889, 1891;  Pub. L. 108–357, title IV, §\u202f402(b)(2) ,  Oct. 22, 2004 ,  118 Stat. 1492 ;  Pub. L. 110–172, §\u202f11(g)(12) ,  Dec. 29, 2007 ,  121 Stat. 2490 ;  Pub. L. 113–295, div. A, title II, §\u202f221(a)(12)(G) ,  Dec. 19, 2014 ,  128 Stat. 4038 ;  Pub. L. 115–97, title I, §\u202f14221(a) ,  Dec. 22, 2017 ,  131 Stat. 2218 , related to Puerto Rico and possession tax credit.\nFor provisions that nothing in repeal by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'If, for any taxable year, an individual takes the position for United States income tax reporting purposes that the individual became, or ceases to be, a bona fide resident of a possession specified in subsection (a)(1), such individual shall file with the Secretary, at such time and in such manner as the Secretary may prescribe, notice of such position.\nIf, for any of an individual’s 3 taxable years ending before the individual’s first taxable year ending after the date of the enactment of this subsection, the individual took a position described in paragraph (1), the individual shall file with the Secretary, at such time and in such manner as the Secretary may prescribe, notice of such position.\nThe date of the enactment of this subsection, referred to in subsec. (c)(2), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nPub. L. 108–357, title VIII, §\u202f908(d) ,  Oct. 22, 2004 ,  118 Stat. 1657 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending sections 931, 932, 934, 935, 957, and 6688 of this title] shall apply to taxable years ending after the date of the enactment of this Act [ Oct. 22, 2004 ]. \n \n “(2)  183- day rule .— Section 937(a)(1) of the Internal Revenue Code of 1986 (as added by this section) shall apply to taxable years beginning after the date of the enactment of this Act. \n \n “(3)   Sourcing .— Section 937(b)(2) of such Code (as so added) shall apply to income earned after the date of the enactment of this Act.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section 941, added  Pub. L. 106–519, §\u202f3(b) ,  Nov. 15, 2000 ,  114 Stat. 2424 , related to qualifying foreign trade income.\nA prior section 941, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 293 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title X, §\u202f1053(a) , title XIX, §\u202f1906(b)(1)(A),  90 Stat. 1648 , 1834, set forth provisions authorizing special deduction for China Trade Act corporations, prior to repeal by  Pub. L. 94–455, title X, §\u202f1053(c) , (e),  Oct. 4, 1976 ,  90 Stat. 1649 , effective with respect to taxable years beginning after  Dec. 31, 1977 .\nSection 942, added  Pub. L. 106–519, §\u202f3(b) ,  Nov. 15, 2000 ,  114 Stat. 2426 , defined “foreign trading gross receipts” and set forth economic process requirements.\nA prior section 942,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 294 , disallowed foreign tax credit authorized by section 901 to any corporation organized under the China Trade Act, prior to repeal by  Pub. L. 94–455, title X, §\u202f1053(c) , (e),  Oct. 4, 1976 ,  90 Stat. 1649 , effective with respect to taxable years beginning after  Dec. 31, 1977 .\nSection 943, added  Pub. L. 106–519, §\u202f3(b) ,  Nov. 15, 2000 ,  114 Stat. 2428 ; amended  Pub. L. 107–147, title IV, §\u202f417(14) ,  Mar. 9, 2002 ,  116 Stat. 56 , set forth other definitions and special rules for purposes of this subpart.\nA prior section 943, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 294 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title X, §\u202f1053(b) ,  90 Stat. 1648 , set forth provisions relating to exclusion from gross income of residents of Formosa or Hong Kong of amounts distributed as dividends by China Trade Act corporations, prior to repeal by  Pub. L. 94–455, title X, §\u202f1053(c) , (e),  Oct. 4, 1976 ,  90 Stat. 1649 , effective with respect to taxable years beginning after  Dec. 31, 1977 .\nRepeal applicable to transactions after  Dec. 31, 2004 , see  section 101(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of this title, the term “United States shareholder” means, with respect to any foreign corporation, a United States person (as defined in section 957(c)) who owns (within the meaning of section 958(a)), or is considered as owning by applying the rules of ownership of section 958(b), 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation, or 10 percent or more of the total value of shares of all classes of stock of such foreign corporation.\nIf, but for this subsection, an amount would be included in the gross income of a United States shareholder for any taxable year both under subsection (a)(1)(A)(i) and under section 1293 (relating to current taxation of income from certain passive foreign investment companies), such amount shall be included in the gross income of such shareholder only under subsection (a)(1)(A).\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f14215(a) , substituted “at any time” for “for an uninterrupted period of 30 days or more” in introductory provisions.\nSubsec. (a)(1)(A).  Pub. L. 115–97, §\u202f14212(b)(1)(A) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the sum of—\n“(i) his pro rata share (determined under paragraph (2)) of the corporation’s subpart F income for such year,\n“(ii) his pro rata share (determined under section 955(a)(3) as in effect before the enactment of the Tax Reduction Act of 1975) of the corporation’s previously excluded subpart F income withdrawn from investment in less developed countries for such year, and\n“(iii) his pro rata share (determined under section 955(a)(3)) of the corporation’s previously excluded subpart F income withdrawn from foreign base company shipping operations for such year; and”.\nSubsec. (a)(3).  Pub. L. 115–97, §\u202f14212(b)(2) , struck out par. (3). Text read as follows: “For purposes of paragraph (1)(A)(iii), the pro rata share of any United States shareholder of the previously excluded subpart F income of a controlled foreign corporation withdrawn from investment in foreign base company shipping operations shall not exceed an amount—\n“(A) which bears the same ratio to his pro rata share of such income withdrawn (as determined under section 955(a)(3)) for the taxable year, as\n“(B) the part of such year during which the corporation is a controlled foreign corporation bears to the entire year.”\nSubsec. (b).  Pub. L. 115–97, §\u202f14214(a) , inserted “,\u2000or 10 percent or more of the total value of shares of all classes of stock of such foreign corporation” after “such foreign corporation”.\nPub. L. 115–97, §\u202f14101(e)(1) , substituted “title” for “subpart”.\n2007—Subsecs. (c), (d).  Pub. L. 110–172  redesignated subsec. (d) as (c) and struck out heading and text of former subsec. (c). Text read as follows:\n“(1)  In general .—The foreign trade income of a FSC and any deductions which are apportioned or allocated to such income shall not be taken into account under this subpart.\n“(2)  Foreign trade income .—For purposes of this subsection, the term ‘foreign trade income’ has the meaning given such term by section 923(b), but does not include section 923(a)(2) non-exempt income (within the meaning of section 927(d)(6)).”\n2004—Subsecs. (c) to (f).  Pub. L. 108–357  redesignated subsecs. (e) and (f) as (c) and (d), respectively, and struck out former subsecs. (c) and (d), which related to coordination of provisions with election of a foreign investment company to distribute income and coordination with foreign personal holding company provisions, respectively.\n1997—Subsec. (a)(2).  Pub. L. 105–34  inserted concluding provisions “For purposes of subparagraph (B), any gain included in the gross income of any person as a dividend under section 1248 shall be treated as a distribution received by such person with respect to the stock involved.”\n1996—Subsec. (a)(1)(A) to (C).  Pub. L. 104–188  inserted “and” at end of subpar. (A), substituted period for “;\u2000and” at end of subpar. (B), and struck out subpar. (C) which read as follows: “the amount determined under section 956A with respect to such shareholder for such year (but only to the extent not excluded from gross income under section 959(a)(3)).”\n1993—Subsec. (a)(1)(B).  Pub. L. 103–66, §\u202f13232(c)(1) , substituted “the amount determined under section 956 with respect to such shareholder for such year (but only to the extent not excluded from gross income under section 959(a)(2)); and” for “his pro rata share (determined under section 956(a)(2)) of the corporation’s increase in earnings invested in United States property for such year (but only to the extent not excluded from gross income under section 959(a)(2)); and”.\nSubsec. (a)(1)(C).  Pub. L. 103–66, §\u202f13231(a) , added subpar. (C).\nSubsec. (a)(4).  Pub. L. 103–66, §\u202f13232(c)(2) , struck out heading and text of par. (4). Text read as follows: “For purposes of paragraph (1)(B), the pro rata share of any United States shareholder in the increase of the earnings of a controlled foreign corporation invested in United States property shall not exceed an amount (A) which bears the same ratio to his pro rata share of such increase (as determined under section 956(a)(2)) for the taxable year, as (B) the part of such year during which the corporation is a controlled foreign corporation bears to the entire year.”\n1988—Subsec. (b).  Pub. L. 100–647  substituted “section 957(c)” for “section 957(d)”.\n1986—Subsec. (e)(1).  Pub. L. 99–514, §\u202f1876(c)(2) , struck out last sentence which read as follows: “For purposes of the preceding sentence, income described in paragraph (2) or (3) of section 921(d) shall be treated as derived from sources within the United States.”\nSubsec. (f).  Pub. L. 99–514, §\u202f1235(c) , added subsec. (f).\n1984—Subsec. (d).  Pub. L. 98–369, §\u202f132(c)(1) , amended subsec. (d) generally, substituting provision that, if a United States shareholder is required to include in gross income an amount under both subsec. (a)(1)(A)(ii) of this section and  section 551(b) of this title , such amount be included only under subsec. (a)(1)(A)(ii) of this section for provision that, if a United States shareholder is subject to tax under  section 551(b) of this title , such shareholder not be required to include as gross income any amount under subsec. (a) of this section.\nSubsec. (e).  Pub. L. 98–369, §\u202f801(d)(4) , added subsec. (e).\n1976—Subsec. (a)(1).  Pub. L. 94–455  struck out “beginning after  December 31, 1962 ” after “during any taxable year”.\n1975—Subsec. (a)(1)(A)(i).  Pub. L. 94–12, §\u202f602(a)(3)(B) , struck out “except as provided in section 963,” before “his pro rata share”.\nSubsec. (a)(1)(A)(ii).  Pub. L. 94–12, §\u202f602(c)(3) , substituted “(determined under section 955(a)(3) as in effect before the enactment of the Tax Reduction Act of 1975)” for “(determined under section 955(a)(3))”.\nSubsec. (a)(1)(A)(iii).  Pub. L. 94–12, §\u202f602(d)(2)(A) , added cl. (iii).\nSubsec. (a)(3).  Pub. L. 94–12, §\u202f602(c)(4) , (d)(2)(B), substituted “paragraph (i)(A)(iii)” for “paragraph (1)(A)(ii)” and “foreign base company shipping operations” for “less developed countries”.\nAmendment by  section 14101(e)(1) of Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , see  section 14101(f) of Pub. L. 115–97 , set out as an Effective Date note under  section 245A of this title .\nAmendment by section 14212(b)(1)(A), (2) of  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14212(c) of Pub. L. 115–97 , set out as a note under  section 851 of this title .\nPub. L. 115–97, title I, §\u202f14214(b) ,  Dec. 22, 2017 ,  131 Stat. 2218 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2017 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nPub. L. 115–97, title I, §\u202f14215(b) ,  Dec. 22, 2017 ,  131 Stat. 2218 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2017 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 105–34, title XI, §\u202f1112(a)(2) ,  Aug. 5, 1997 ,  111 Stat. 969 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to dispositions after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 104–188  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end, see  section 1501(d) of Pub. L. 104–188 , set out as a note under  section 904 of this title .\nPub. L. 103–66, title XIII, §\u202f13231(e) ,  Aug. 10, 1993 ,  107 Stat. 501 , provided that:  “The amendments made by this section [enacting  section 956A of this title  and amending this section and sections 959, 989, 1293, 1296, and 1297 of this title] shall apply to taxable years of foreign corporations beginning after  September 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.”\nPub. L. 103–66, title XIII, §\u202f13232(d) ,  Aug. 10, 1993 ,  107 Stat. 502 , provided that:  “The amendments made by this section [amending this section and  section 956 of this title ] shall apply to taxable years of controlled foreign corporations beginning after  September 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of controlled foreign corporations end.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1235(c) of Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as an Effective Date note under  section 1291 of this title .\nAmendment by  section 1876(c)(2) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f132(d)(2)(A) ,  July 18, 1984 ,  98 Stat. 667 , provided that:  “The amendment made by paragraph (1) of subsection (c) [amending this section] shall apply to taxable years of United States shareholders beginning after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 801(d)(4) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1975 , and to taxable years of United States shareholders (within the meaning of 951(b) of this title) within which or with which such taxable years of such foreign corporations end, see  section 602(f) of Pub. L. 94–12 , set out as a note under  section 954 of this title .\nPub. L. 87–834, §\u202f12(c) ,  Oct. 16, 1962 ,  76 Stat. 1031 , provided that:  “The amendments made by this section [enacting this section and sections 952 to 964 and 970 to 972 of this title and amending sections 901, 904, and 1016 of this title] shall apply with respect to taxable years of foreign corporations beginning after  December 31, 1962 , and to taxable year of United States shareholders within which or with which such taxable years of such foreign corporations end.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Each person who is a United States shareholder of any controlled foreign corporation for any taxable year of such United States shareholder shall include in gross income such shareholder’s global intangible low-taxed income for such taxable year.\nThe term “tested loss” means, with respect to any controlled foreign corporation for any taxable year of such controlled foreign corporation, the excess (if any) of the amount described in subparagraph (A)(ii) over the amount described in subparagraph (A)(i).\nSection 952(c)(1)(A) shall be applied by increasing the earnings and profits of the controlled foreign corporation by the tested loss of such corporation.\nThe term “specified tangible property” means, except as provided in subparagraph (B), any tangible property used in the production of tested income.\nIn the case of property used both in the production of tested income and income which is not tested income, such property shall be treated as specified tangible property in the same proportion that the gross income described in subsection (c)(1)(A) produced with respect to such property bears to the total gross income produced with respect to such property.\nThe pro rata shares referred to in subsections (b), (c)(1)(A), and (c)(1)(B), respectively, shall be determined under the rules of section 951(a)(2) in the same manner as such section applies to subpart F income and shall be taken into account in the taxable year of the United States shareholder in which or with which the taxable year of the controlled foreign corporation ends.\nA person shall be treated as a United States shareholder of a controlled foreign corporation for any taxable year of such person only if such person owns (within the meaning of section 958(a)) stock in such foreign corporation on the last day in the taxable year of such foreign corporation on which such foreign corporation is a controlled foreign corporation.\nA foreign corporation shall be treated as a controlled foreign corporation for any taxable year if such foreign corporation is a controlled foreign corporation at any time during such taxable year.\nExcept as provided in subparagraph (B), any global intangible low-taxed income included in gross income under subsection (a) shall be treated in the same manner as an amount included under section 951(a)(1)(A) for purposes of applying sections 168(h)(2)(B), 535(b)(10), 851(b), 904(h)(1), 959, 961, 962, 993(a)(1)(E), 996(f)(1), 1248(b)(1), 1248(d)(1), 6501(e)(1)(C), 6654(d)(2)(D), and 6655(e)(4).\nThe Secretary shall provide rules for the application of subparagraph (A) to other provisions of this title in any case in which the determination of subpart F income is required to be made at the level of the controlled foreign corporation.\nThe date of the enactment of this section, referred to in subsec. (d)(3), is the date of the enactment of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 .\nSection applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14201(d) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 904 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'In the case of a controlled foreign corporation, subpart F income does not include any item of income from sources within the United States which is effectively connected with the conduct by such corporation of a trade or business within the United States unless such item is exempt from taxation (or is subject to a reduced rate of tax) pursuant to a treaty obligation of the United States. For purposes of this subsection, any exemption (or reduction) with respect to the tax imposed by section 884 shall not be taken into account.\nFor purposes of subsection (a), the subpart F income of any controlled foreign corporation for any taxable year shall not exceed the earnings and profits of such corporation for such taxable year.\nThe amount included in the gross income of any United States shareholder under section 951(a)(1)(A) for any taxable year and attributable to a qualified activity shall be reduced by the amount of such shareholder’s pro rata share of any qualified deficit.\nFor purposes of this subparagraph, the term “qualified insurance company” means any controlled foreign corporation predominantly engaged in the active conduct of an insurance business in the taxable year and in the prior taxable years in which the deficit arose.\nFor purposes of this paragraph, the term “qualified financial institution” means any controlled foreign corporation predominantly engaged in the active conduct of a banking, financing, or similar business in the taxable year and in the prior taxable year in which the deficit arose.\nAn election may be made under this clause to have section 953(a) applied for purposes of this title without regard to the same country exception under paragraph (1)(A) thereof. Such election, once made, may be revoked only with the consent of the Secretary.\nIn the case of an affiliated group of corporations (within the meaning of section 1504 but without regard to section 1504(b)(3) and by substituting “more than 50 percent” for “at least 80 percent” each place it appears), no election may be made under subclause (I) for any controlled foreign corporation unless such election is made for all other controlled foreign corporations who are members of such group and who were created or organized under the laws of the same country as such controlled foreign corporation. For purposes of clause (v), in determining whether any controlled corporation described in the preceding sentence is a qualified insurance company, all such corporations shall be treated as 1 corporation.\nA controlled foreign corporation may elect to reduce the amount of its subpart F income for any taxable year which is attributable to any qualified activity by the amount of any deficit in earnings and profits of a qualified chain member for a taxable year ending with (or within) the taxable year of such controlled foreign corporation to the extent such deficit is attributable to such activity. To the extent any deficit reduces subpart F income under the preceding sentence, such deficit shall not be taken into account under subparagraph (B).\nThis subparagraph shall be applied after subparagraphs (A) and (B).\nIf the subpart F income of any controlled foreign corporation for any taxable year was reduced by reason of paragraph (1)(A), any excess of the earnings and profits of such corporation for any subsequent taxable year over the subpart F income of such foreign corporation for such taxable year shall be recharacterized as subpart F income under rules similar to the rules applicable under section 904(f)(5).\nFor purposes of this subsection, earnings and profits of any controlled foreign corporation shall be determined without regard to paragraphs (4), (5), and (6) of section 312(n). Under regulations, the preceding sentence shall not apply to the extent it would increase earnings and profits by an amount which was previously distributed by the controlled foreign corporation.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of subsection (a)(5), including regulations which treat income paid through 1 or more entities as derived from a foreign country to which section 901(j) applies if such income was, without regard to such entities, derived from such country.\nThe Foreign Corrupt Practices Act of 1977, referred to in subsec. (a), is title I of  Pub. L. 95–213 ,  Dec. 19, 1977 ,  91 Stat. 1494 , which enacted sections 78dd–1 to 78dd–3 of Title 15, Commerce and Trade, and amended sections 78m and 78ff of Title 15. For complete classification of this Act to the Code, see Short Title of 1977 Amendment note set out under  section 78a of Title 15  and Tables.\nClause (iii), referred to in subsec. (c)(1)(B)(ii), means cl. (iii) of subsec. (c)(1)(B), which was amended by  Pub. L. 115–97, §\u202f14211(b)(1) . As amended, subcl. (I) was struck out and subcls. (II) and (III) were redesignated (I) and (II), respectively. See 2017 Amendment note below.\n2017—Subsec. (c)(1)(B)(i).  Pub. L. 115–97, §\u202f14212(b)(1)(C) , substituted “section 951(a)(1)(A)” for “section 951(a)(1)(A)(i)”.\nSubsec. (c)(1)(B)(iii).  Pub. L. 115–97, §\u202f14211(b)(1) , redesignated subcls. (II) to (V) as (I) to (IV), respectively, and struck out former subcl. (I) which read as follows: “foreign base company oil related income,”.\n2007—Subsec. (b).  Pub. L. 110–172  struck out second sentence which read as follows: “For purposes of the preceding sentence, income described in paragraph (2) or (3) of section 921(d) shall be treated as derived from sources within the United States.”\n2005—Subsec. (c)(1)(B)(ii).  Pub. L. 109–135  substituted “subclause (II) or (III) of clause (iii)” for “clause (iii)(III) or (IV)” and “clause (iii)(I)” for “clause (iii)(II)” in concluding provisions.\n2004—Subsec. (c)(1)(B)(iii).  Pub. L. 108–357  redesignated subcls. (II) to (VI) as (I) to (V), respectively, and struck out former subcl. (I) which read as follows: “foreign base company shipping income,”.\n1997—Subsec. (b).  Pub. L. 105–34  inserted at end “For purposes of this subsection, any exemption (or reduction) with respect to the tax imposed by section 884 shall not be taken into account.”\n1988—Subsec. (c)(1)(B)(ii).  Pub. L. 100–647, §\u202f1012(i)(24) , inserted at end “In determining the deficit attributable to qualified activities described in clause (iii)(III) or (IV), deficits in earnings and profits (to the extent not previously taken into account under this section) for taxable years beginning after 1962 and before 1987 also shall be taken into account. In the case of the qualified activity described in clause (iii)(II), the rule of the preceding sentence shall apply, except that ‘1982’ shall be substituted for ‘1962’.”\nSubsec. (c)(1)(B)(iii)(III) to (VI).  Pub. L. 100–647, §\u202f1012(i)(22) , (23), added subcls. (III) and (IV), redesignated former subcl. (III) as (V) and substituted “insurance income or foreign personal holding company income,” for “insurance income”, and redesignated former subcl. (IV) as (VI).\nSubsec. (c)(1)(B)(vii).  Pub. L. 100–647, §\u202f6131(a) , added cl. (vii).\nSubsec. (c)(1)(C).  Pub. L. 100–647, §\u202f1012(i)(25)(A) , added subpar. (C).\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f1012(i)(16) , added par. (3).\n1986—Subsec. (a).  Pub. L. 99–509, §\u202f8041(b)(1) , added par. (5) and last sentence.\nSubsec. (a)(1).  Pub. L. 99–514, §\u202f1221(b)(3)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the income derived from the insurance of United States risks (as determined under section 953), and”.\nSubsec. (b).  Pub. L. 99–514, §\u202f1876(c)(1) , inserted last sentence.\nSubsec. (c).  Pub. L. 99–514, §\u202f1221(f) , added subsec. (c) and struck out former subsec. (c) which read as follows: “For purposes of subsection (a), the subpart F income of any controlled foreign corporation for any taxable year shall not exceed the earnings and profits of such corporation for such year reduced by the amount (if any) by which—\n“(1) an amount equal to—\n“(A) the sum of the deficits in earnings and profits for prior taxable years beginning after  December 31, 1962 , plus\n“(B) the sum of the deficits in earnings and profits for taxable years beginning after  December 31, 1959 , and before  January 1, 1963  (reduced by the sum of the earnings and profits for such taxable years); exceeds\n“(2) an amount equal to the sum of the earnings and profits for prior taxable years beginning after  December 31, 1962 , allocated to other earnings and profits under section 959(c)(3).\nFor purposes of the preceding sentence, any deficit in earnings and profits for any prior taxable year shall be taken into account under paragraph (1) for any taxable year only to the extent it has not been taken into account under such paragraph for any preceding taxable year to reduce earnings and profits of such preceding year.”\nSubsec. (d).  Pub. L. 99–509, §\u202f8041(b)(2) , added subsec. (d).\nPub. L. 99–514, §\u202f1221(f) , struck out subsec. (d), special rule in case of indirect ownership, which read as follows: “For purposes of subsection (c), if—\n“(1) a United States shareholder owns (within the meaning of section 958(a)) stock of a foreign corporation, and by reason of such ownership owns (within the meaning of such section) stock of any other foreign corporation, and\n“(2) any of such foreign corporations has a deficit in earnings and profits for the taxable year,\nthen the earnings and profits for the taxable year of each such foreign corporation which is a controlled foreign corporation shall, with respect to such United States shareholder, be properly reduced to take into account any deficit described in paragraph (2) in such manner as the Secretary shall prescribe by regulations.”\n1982—Subsec. (a).  Pub. L. 97–248  inserted provision that the payments referred to in par. (4) are payments which would be unlawful under the Foreign Corrupt Practices Act of 1977 if the payor were a United States person.\n1976—Subsec. (a)(3).  Pub. L. 94–455, §\u202f1062(a) , added par. (3).\nSubsec. (a)(4).  Pub. L. 94–455, §\u202f1065(a)(1) , added par. (4).\nSubsec. (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1966—Subsec. (b).  Pub. L. 89–809  substituted “In the case of a controlled foreign corporation, subpart F income does not include any item of income from sources within the United States which is effectively connected with the conduct by such corporation of a trade or business within the United States unless such item is exempt from taxation (or is subject to a reduced rate of tax) pursuant to a treaty obligation of the United States” for “Subpart F income does not include any item includible in gross income under this chapter (other than this subpart) as income derived from sources within the United States of a foreign corporation engaged in trade or business in the United States”.\nPub. L. 115–97, title I, §\u202f14211(c) ,  Dec. 22, 2017 ,  131 Stat. 2217 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2017 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 14212(b)(1)(C) of Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14212(c) of Pub. L. 115–97 , set out as a note under  section 851 of this title .\nPub. L. 108–357, title IV, §\u202f415(d) ,  Oct. 22, 2004 ,  118 Stat. 1511 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nPub. L. 105–34, title XI, §\u202f1112(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 970 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by section 1012(i)(16), (22)–(25)(A) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6131(b) ,  Nov. 10, 1988 ,  102 Stat. 3720 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in the amendments made by section 1221(f) of the Reform Act [ Pub. L. 99–514 ].”\nAmendment by section 1221(b)(3)(A), (f) of  Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1221(g) of Pub. L. 99–514 , set out as a note under  section 954 of this title .\nAmendment by  section 1876(c)(1) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 99–509  effective  Jan. 1, 1987 , see  section 8041(c) of Pub. L. 99–509 , set out as a note under  section 901 of this title .\nAmendment by  Pub. L. 97–248  applicable to payments made after  Sept. 3, 1982 , see  section 288(c) of Pub. L. 97–248 , set out as a note under  section 162 of this title .\nAmendment by  section 1062 of Pub. L. 94–455  applicable to participation in or cooperation with an international boycott more than 30 days after  Oct. 4, 1976 , see  section 1066(a) of Pub. L. 94–455 , set out as a note under  section 908 of this title .\nPub. L. 94–455, title X, §\u202f1066(b) ,  Oct. 4, 1976 ,  90 Stat. 1654 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by section 1065 [amending this section and sections 995 and 964 of this title] apply to payments described in section 162(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] made more than 30 days after the date of enactment of this Act [ Oct. 4, 1976 ].”\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nPub. L. 100–647, title I, §\u202f1012(i)(6) ,  Nov. 10, 1988 ,  102 Stat. 3508 , provided that:  “For purposes of applying section 952(c)(1)(A) of the 1986 Code, the earnings and profits of any corporation shall be determined without regard to any increase in earnings and profits under section 1023(e)(3)(C) of the Reform Act [ Pub. L. 99–514 , set out as an Effective Date note under  section 846 of this title ].”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Such term shall not include any exempt insurance income (as defined in subsection (e)).\nFor purposes of this subsection, the term “related person insurance income” means any insurance income (within the meaning of subsection (a)) attributable to a policy of insurance or reinsurance with respect to which the person (directly or indirectly) insured is a United States shareholder in the foreign corporation or a related person to such a shareholder.\nParagraph (1) shall not apply to any foreign corporation for a taxable year of such corporation if the related person insurance income (determined on a gross basis) of such corporation for such taxable year is less than 20 percent of its insurance income (as so determined) for such taxable year determined without regard to those provisions of subsection (a)(1) which limit insurance income to income from countries other than the country in which the corporation was created or organized.\nExcept as provided in subclause (II), any election under subparagraph (C) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\nIf a foreign corporation which made an election under subparagraph (C) for any taxable year is a disqualified corporation for any subsequent taxable year, such election shall not apply to any taxable year beginning after such subsequent taxable year.\nThe tax imposed by section 4371 shall not apply with respect to any related person insurance income treated as effectively connected with the conduct of a trade or business within the United States under subparagraph (C).\nFor purposes of this paragraph the term “disqualified corporation” means, with respect to any taxable year, any foreign corporation which is a controlled foreign corporation for an uninterrupted period of 30 days or more during such taxable year (determined without regard to this subsection) but only if a United States shareholder (determined without regard to this subsection) owns (within the meaning of section 958(a)) stock in such corporation at some time during such taxable year.\nThe Secretary shall prescribe regulations providing for such modifications to the provisions of this subpart as may be necessary or appropriate by reason of subparagraph (A).\nExcept as provided in subparagraph (B), the term “related person” has the meaning given such term by section 954(d)(3).\nIn the case of any policy of insurance covering liability arising from services performed as a director, officer, or employee of a corporation or as a partner or employee of a partnership, the person performing such services and the entity for which such services are performed shall be treated as related persons.\nExcept as provided in subparagraph (B), an election under paragraph (1) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\nIf a corporation which made an election under paragraph (1) for any taxable year fails to meet the requirements of subparagraphs (A), (B), and (C), of paragraph (1) for any subsequent taxable year, such election shall not apply to any taxable year beginning after such subsequent taxable year.\nIf any corporation treated as a domestic corporation under this subsection is treated as a member of an affiliated group for purposes of chapter 6 (relating to consolidated returns), any loss of such corporation shall be treated as a dual consolidated loss for purposes of section 1503(d) without regard to paragraph (2)(B) thereof.\nFor purposes of section 367, any foreign corporation making an election under paragraph (1) shall be treated as transferring (as of the 1st day of the 1st taxable year to which such election applies) all of its assets to a domestic corporation in connection with an exchange to which section 354 applies.\nEarnings and profits of the foreign corporation accumulated in taxable years beginning before  January 1, 1988 , shall not be included in the gross income of the persons holding stock in such corporation by reason of subparagraph (A).\nFor purposes of this title, any distribution made by a corporation to which an election under paragraph (1) applies out of earnings and profits accumulated in taxable years beginning before  January 1, 1988 , shall be treated as a distribution made by a foreign corporation.\nThe provisions specified in clause (iv) shall be applied without regard to paragraph (1), except that, in the case of a corporation to which an election under paragraph (1) applies, only earnings and profits accumulated in taxable years beginning before  January 1, 1988 , shall be taken into account.\nIf a corporation makes an election under paragraph (1), the amount of tax imposed by this chapter for the 1st taxable year to which such election applies shall be increased by the amount determined under subparagraph (B).\nSuch term shall not include income attributable to the issuing (or reinsuring) of an exempt contract as the result of any arrangement whereby another corporation receives a substantially equal amount of premiums or other consideration in respect of issuing (or reinsuring) a contract which is not an exempt contract.\nThe term “exempt contract” means an insurance or annuity contract issued or reinsured by a qualifying insurance company or qualifying insurance company branch in connection with property in, liability arising out of activity in, or the lives or health of residents of, a country other than the United States.\nThe term “applicable home country risks” means risks in connection with property in, liability arising out of activity in, or the lives or health of residents of, the home country of the qualifying insurance company or qualifying insurance company branch, as the case may be, issuing or reinsuring the contract covering the risks.\nThe term “home country” means, with respect to a controlled foreign corporation, the country in which such corporation is created or organized.\nThe term “home country” means, with respect to a qualified business unit (as defined in section 989(a)), the country in which the principal office of such unit is located and in which such unit is licensed, authorized, or regulated by the applicable insurance regulatory body to sell insurance, reinsurance, or annuity contracts to persons other than related persons (as defined in section 954(d)(3)) in such country.\nIn determining insurance income for purposes of subsection (c), exempt insurance income shall not include income derived from exempt contracts which cover risks other than applicable home country risks.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection and section 954(i).\nFor income exempt from foreign personal holding company income, see section 954(i).\n2017—Subsec. (b)(1)(A).  Pub. L. 115–97, §\u202f13512(b)(8) , redesignated subpar. (B) as (A) and struck out former subpar. (A) which read as follows: “The small life insurance company deduction.”\nSubsec. (b)(1)(B).  Pub. L. 115–97, §\u202f13512(b)(8) , redesignated subpar. (C) as (B). Former subpar. (B) redesignated (A).\nPub. L. 115–97, §\u202f13511(b)(7) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Section 805(a)(5) (relating to operations loss deduction).”\nSubsec. (b)(1)(C).  Pub. L. 115–97, §\u202f13512(b)(8) , redesignated subpar. (C) as (B).\nSubsec. (c)(1)(C).  Pub. L. 115–97, §\u202f14212(b)(1)(D) , substituted “section 951(a)(1)(A)” for “section 951(a)(1)(A)(i)”.\nSubsec. (d)(4)(B)(iv)(II).  Pub. L. 115–97, §\u202f14212(b)(3) , struck out before period at end “or amounts referred to in clause (ii) or (iii) of section 951(a)(1)(A)”.\n2015—Subsec. (e)(10), (11).  Pub. L. 114–113  redesignated par. (11) as (10) and struck out former par. (10). Prior to amendment, text of par. (10) read as follows: “This subsection and section 954(i) shall apply only to taxable years of a foreign corporation beginning after  December 31, 1998 , and before  January 1, 2015 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends. If this subsection does not apply to a taxable year of a foreign corporation beginning after  December 31, 2014  (and taxable years of United States shareholders ending with or within such taxable year), then, notwithstanding the preceding sentence, subsection (a) shall be applied to such taxable years in the same manner as it would if the taxable year of the foreign corporation began in 1998.”\n2014—Subsec. (e)(10).  Pub. L. 113–295  substituted “ January 1, 2015 ” for “ January 1, 2014 ” and “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (e)(10).  Pub. L. 112–240  substituted “ January 1, 2014 ” for “ January 1, 2012 ” and “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (e)(10).  Pub. L. 111–312  substituted “ January 1, 2012 ” for “ January 1, 2010 ” and “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (e)(10).  Pub. L. 110–343  substituted “ January 1, 2010 ” for “ January 1, 2009 ” and “ December 31, 2009 ” for “ December 31, 2008 ”.\n2006—Subsec. (e)(10).  Pub. L. 109–222  substituted “ January 1, 2009 ” for “ January 1, 2007 ” and “ December 31, 2008 ” for “ December 31, 2006 ”.\n2002—Subsec. (e)(10).  Pub. L. 107–147  substituted “ January 1, 2007 ” for “ January 1, 2002 ” and “ December 31, 2006 ” for “ December 31, 2001 ”.\n1999—Subsec. (e)(10).  Pub. L. 106–170  substituted “taxable years” for “the first taxable year”, “ January 1, 2002 ” for “ January 1, 2000 ”, and “within which any such” for “within which such”, and inserted at end “If this subsection does not apply to a taxable year of a foreign corporation beginning after  December 31, 2001  (and taxable years of United States shareholders ending with or within such taxable year), then, notwithstanding the preceding sentence, subsection (a) shall be applied to such taxable years in the same manner as it would if the taxable year of the foreign corporation began in 1998.”\n1998—Subsec. (a).  Pub. L. 105–277, §\u202f1005(b)(1)(A) , amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “For purposes of section 952(a)(1), the term ‘insurance income’ means any income which—\n“(1) is attributable to the issuing (or reinsuring) of any insurance or annuity contract—\n“(A) in connection with property in, liability arising out of activity in, or in connection with the lives or health of residents of, a country other than the country under the laws of which the controlled foreign corporation is created or organized, or\n“(B) in connection with risks not described in subparagraph (A) as the result of any arrangement whereby another corporation receives a substantially equal amount of premiums or other consideration in respect of issuing (or reinsuring) a contract described in subparagraph (A), and\n“(2) would (subject to the modifications provided by paragraphs (1) and (2) of subsection (b)) be taxed under subchapter L of this chapter if such income were the income of a domestic insurance company.”\nSubsec. (b)(3), (4).  Pub. L. 105–277, §\u202f1005(b)(3) , added par. (3) and redesignated former par. (3) as (4).\nSubsec. (e).  Pub. L. 105–277, §\u202f1005(b)(1)(B) , added subsec. (e).\n1989—Subsec. (d)(3).  Pub. L. 101–239  substituted “for purposes of section 1503(d) without regard to paragraph (2)(B) thereof” for “(as defined in section 1503(d))”.\n1988—Subsec. (b)(1).  Pub. L. 100–647, §\u202f1012(i)(7)(A) , redesignated par. (2) as (1) and struck out former par. (1) which read as follows: “A corporation which would, if it were a domestic insurance corporation, be taxable under part II of subchapter L shall apply subsection (a) as if it were taxable under part III of subchapter L.”\nSubsec. (b)(1)(A).  Pub. L. 100–647, §\u202f1012(i)(7)(B) , added subpar. (A) and struck out former subpar. (A) which read as follows: “The special life insurance company deduction and the small life insurance company deduction.”\nSubsec. (b)(2) to (4).  Pub. L. 100–647, §\u202f1012(i)(7)(A) , (C), redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out “(other than those taken into account under paragraph (3))” after “and deductions” in par. (3). Former par. (2) redesignated (1).\nSubsec. (c)(1)(C).  Pub. L. 100–647, §\u202f1012(i)(2)(A) , added subpar. (C).\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f1012(i)(3)(A) , (4)(B), (5), substituted “insurance income (within the meaning of subsection (a)) attributable” for “insurance income attributable”, “with respect to which the person (directly or indirectly) insured is” for “with respect to which the primary insured is”, and “related person” for “related person (within the meaning of section 954(d)(3))”.\nSubsec. (c)(3)(A).  Pub. L. 100–647, §\u202f1012(i)(3)(B) , (4)(B), substituted “persons who are (directly or indirectly) insured” for “persons who are the primary insured” and “to any such person” for “(within the meaning of section 954(d)(3)) to any such primary insured”.\nSubsec. (c)(3)(B).  Pub. L. 100–647, §\u202f1012(i)(8) , substituted “related person insurance income (determined on a gross basis)” for “related person insurance income” and “its insurance income (as so determined)” for “its insurance income”.\nSubsec. (c)(3)(C).  Pub. L. 100–647, §\u202f1012(i)(1)(A) , (9), substituted “all benefits (other than with respect to section 884)” for “all benefits” and “granted by the United States under any treaty” for “under any income tax treaty” in cl. (i)(II) and inserted at end “An election under this subparagraph made for any taxable year shall not be effective if the corporation (or any predecessor thereof) was a disqualified corporation for the taxable year for which the election was made or for any prior taxable year beginning after 1986.”\nSubsec. (c)(3)(D)(i).  Pub. L. 100–647, §\u202f1012(i)(1)(B) , substituted “Period during which election in effect” for “Election irrevocable” in heading and amended text generally. Prior to amendment, text read as follows: “Any election under subparagraph (C) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.”\nSubsec. (c)(3)(E).  Pub. L. 100–647, §\u202f1012(i)(1)(C) , added subpar. (E).\nSubsec. (c)(5).  Pub. L. 100–647, §\u202f1012(i)(2)(B) , added par. (5) and redesignated former par. (5) as (6).\nSubsec. (c)(6).  Pub. L. 100–647, §\u202f1012(i)(4)(A) , added par. (6) and redesignated former par. (6) as (7).\nPub. L. 100–647, §\u202f1012(i)(2)(B) , redesignated former par. (5) as (6).\nSubsec. (c)(7).  Pub. L. 100–647, §\u202f1012(i)(21) , added par. (7) and struck out former par. (7) “Regulations”, which read as follows: “The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations preventing the avoidance of this subsection through cross insurance arrangements or otherwise.”\nPub. L. 100–647, §\u202f1012(i)(4)(A) , redesignated former par. (6) as (7).\nSubsec. (c)(8).  Pub. L. 100–647, §\u202f1012(i)(21) , added par. (8).\nSubsec. (d).  Pub. L. 100–647, §\u202f6135(a) , added subsec. (d).\n1986— Pub. L. 99–514, §\u202f1221(b)(3)(D) , substituted “Insurance income” for “Income from insurance of United States risks” in section catchline.\nSubsec. (a).  Pub. L. 99–514, §\u202f1221(b)(1) , amended subsec. (a) generally, substituting provisions defining “insurance income” for former provisions defining “income derived from the insurance of United States risks”.\nSubsec. (c).  Pub. L. 99–514, §\u202f1221(b)(2) , added subsec. (c).\n1984—Subsec. (a)(2).  Pub. L. 98–369, §\u202f211(b)(13)(D) , substituted “and (2)” for “,\u2000(2), and (3)”.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f211(b)(13)(A) , redesignated par. (2) as (1). Former par. (1), which provided that the application of part I of subchapter L of this chapter, life insurance company taxable income was the gain from operations as defined in section 809(b), was struck out.\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f211(b)(13)(B) , in amending par. (2) generally, substituted\n“(A) The special life insurance company deduction and the small life insurance company deduction.\n“(B) Section 805(a)(5) (relating to operations loss deduction).\n“(C) Section 832(c)(5) (relating to certain capital losses).”\nfor\n“(A) Section 809(d)(4) (operations loss deduction).\n“(B) Section 809(d)(5) (certain nonparticipating contracts).\n“(C) Section 809(d)(6) (group life, accident, and health insurance).”\nand struck out\n“(D) Section 809(d)(10) (small business deduction).\n“(E) Section 817(b) (gain on property held on  December 31, 1958 , and certain substituted property acquired after 1958).\n“(F) Section 832(c)(5) (certain capital losses).”\nPub. L. 98–369, §\u202f211(b)(13)(A) , redesignated par. (3) as (2). Former par. (2) redesignated (1).\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f211(b)(13)(A) , redesignated par. (4) as (3). Former par. (3) redesignated (2).\nSubsec. (b)(3)(A).  Pub. L. 98–369, §\u202f211(b)(13)(C)(i) , substituted “section 803(a)(1)” for “section 809(c)(1)”.\nSubsec. (b)(3)(B).  Pub. L. 98–369, §\u202f211(b)(13)(C)(ii) , substituted “section 803(a)(2)” for “section 809(c)(2)”.\nSubsec. (b)(3)(C).  Pub. L. 98–369, §\u202f211(b)(13)(C)(iii) , substituted “section 805(a)(2)” for “section 809(d)(2)”.\nSubsec. (b)(4), (5).  Pub. L. 98–369, §\u202f211(b)(13)(A) , (E), redesignated par. (5) as (4) and substituted “paragraph (3)” for “paragraph (4)”. Former par. (4) redesignated (3).\n1976—Subsec. (b)(5).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1966—Subsec. (b)(3)(F).  Pub. L. 89–809  substituted “832(c)(5)” for “832(b)(5)”.\nAmendment by  section 13511(b)(7) of Pub. L. 115–97  applicable to losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13511(c) of Pub. L. 115–97 , set out as a note under  section 381 of this title .\nAmendment by  section 13512(b)(8) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13512(c) of Pub. L. 115–97 , set out as a note under  section 453B of this title .\nAmendment by section 14212(b)(1)(D), (3) of  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14212(c) of Pub. L. 115–97 , set out as a note under  section 851 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f128(c) ,  Dec. 18, 2015 ,  129 Stat. 3054 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2014 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.”\nPub. L. 113–295, div. A, title I, §\u202f134(c) ,  Dec. 19, 2014 ,  128 Stat. 4019 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2013 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.”\nPub. L. 112–240, title III, §\u202f322(c) ,  Jan. 2, 2013 ,  126 Stat. 2332 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2011 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.”\nPub. L. 111–312, title VII, §\u202f750(c) ,  Dec. 17, 2010 ,  124 Stat. 3320 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 2009 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.”\nPub. L. 107–147, title VI, §\u202f614(c) ,  Mar. 9, 2002 ,  116 Stat. 62 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years beginning after  December 31, 2001 .”\nPub. L. 106–170, title V, §\u202f503(c) ,  Dec. 17, 1999 ,  113 Stat. 1921 , provided that:  “The amendments made by this section [amending this section and  section 954 of this title ] shall apply to taxable years beginning after  December 31, 1999 .”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1012(i)(3)(C) ,  Nov. 10, 1988 ,  102 Stat. 3508 , provided that:  “The amendments made by this paragraph [amending this section] to the extent such amendments add the phrase ‘(directly or indirectly)’ shall apply only to taxable years beginning after  December 31, 1987 .”\nAmendment by section 1012(i)(1), (2), (4), (5), (7)–(9), (21) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6135(b) ,  Nov. 10, 1988 ,  102 Stat. 3723 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1221(g) of Pub. L. 99–514 , set out as a note under  section 954 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'If the sum of the foreign base company income (determined without regard to paragraph (5)) and the gross insurance income for the taxable year exceeds 70 percent of gross income, the entire gross income for the taxable year shall, subject to the provisions of paragraphs (4) and (5), be treated as foreign base company income or insurance income (whichever is appropriate).\nFor purposes of subparagraphs (A) and (B), the term “gross insurance income” means any item of gross income taken into account in determining insurance income under section 953.\nFor purposes of subsection (a) and section 953, foreign base company income and insurance income shall not include any item of income received by a controlled foreign corporation if the taxpayer establishes to the satisfaction of the Secretary that such income was subject to an effective rate of income tax imposed by a foreign country greater than 90 percent of the maximum rate of tax specified in section 11.\nFor purposes of subsection (a), the foreign personal holding company income, the foreign base company sales income, and the foreign base company services income shall be reduced, under regulations prescribed by the Secretary, so as to take into account deductions (including taxes) properly allocable to such income. Except to the extent provided in regulations prescribed by the Secretary, any interest which is paid or accrued by the controlled foreign corporation to any United States shareholder in such corporation (or any controlled foreign corporation related to such a shareholder) shall be allocated first to foreign personal holding company income which is passive income (within the meaning of section 904(d)(2)) of such corporation to the extent thereof. The Secretary may, by regulations, provide that the preceding sentence shall apply also to interest paid or accrued to other persons.\nDividends, interest, royalties, rents, and annuities.\nThe excess of foreign currency gains over foreign currency losses (as defined in section 988(b)) attributable to any section 988 transactions. This subparagraph shall not apply in the case of any transaction directly related to the business needs of the controlled foreign corporation.\nAny income equivalent to interest, including income from commitment fees (or similar amounts) for loans actually made.\nNet income from notional principal contracts.\nAny item of income, gain, deduction, or loss from a notional principal contract entered into for purposes of hedging any item described in any preceding subparagraph shall not be taken into account for purposes of this subparagraph but shall be taken into account under such other subparagraph.\nPayments in lieu of dividends which are made pursuant to an agreement to which section 1058 applies.\nThis subparagraph shall apply with respect to amounts received for services under a particular contract only if at some time during the taxable year 25 percent or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for the individual who has performed, is to perform, or may be designated (by name or by description) as the one to perform, such services.\nForeign personal holding company income shall not include rents and royalties which are derived in the active conduct of a trade or business and which are received from a person other than a related person (within the meaning of subsection (d)(3)). For purposes of the preceding sentence, rents derived from leasing an aircraft or vessel in foreign commerce shall not fail to be treated as derived in the active conduct of a trade or business if, as determined under regulations prescribed by the Secretary, the active leasing expenses are not less than 10 percent of the profit on the lease.\nForeign personal holding company income shall not include any interest which is derived in the conduct of a banking business and which is export financing interest (as defined in section 904(d)(2)(G)).\nSubparagraph (A) shall not apply in the case of any interest, rent, or royalty to the extent such interest, rent, or royalty reduces the payor’s subpart F income or creates (or increases) a deficit which under section 952(c) may reduce the subpart F income of the payor or another controlled foreign corporation.\nSubparagraph (A)(i) shall not apply to any dividend with respect to any stock which is attributable to earnings and profits of the distributing corporation accumulated during any period during which the person receiving such dividend did not hold such stock either directly, or indirectly through a chain of one or more subsidiaries each of which meets the requirements of subparagraph (A)(i).\nIn the case of any sale by a controlled foreign corporation of an interest in a partnership with respect to which such corporation is a 25-percent owner, such corporation shall be treated for purposes of this subsection as selling the proportionate share of the assets of the partnership attributable to such interest. The Secretary shall prescribe such regulations as may be appropriate to prevent abuse of the purposes of this paragraph, including regulations providing for coordination of this paragraph with the provisions of subchapter K.\nFor purposes of this paragraph, the term “25-percent owner” means a controlled foreign corporation which owns directly 25 percent or more of the capital or profits interest in a partnership. For purposes of the preceding sentence, if a controlled foreign corporation is a shareholder or partner of a corporation or partnership, the controlled foreign corporation shall be treated as owning directly its proportionate share of any such capital or profits interest held directly or indirectly by such corporation or partnership. If a controlled foreign corporation is treated as owning a capital or profits interest in a partnership under constructive ownership rules similar to the rules of section 958(b), the controlled foreign corporation shall be treated as owning such interest directly for purposes of this subparagraph.\nCommodities with respect to which gains and losses are not taken into account under paragraph (2)(C) in computing a controlled foreign corporation’s foreign personal holding company income shall not be taken into account in applying the substantially all test under paragraph (1)(C)(ii) to such corporation.\nThe Secretary shall prescribe such regulations as are appropriate to carry out the purposes of paragraph (1)(C) in the case of transactions involving related parties.\nFor purposes of this subsection, dividends, interest, rents, and royalties received or accrued from a controlled foreign corporation which is a related person shall not be treated as foreign personal holding company income to the extent attributable or properly allocable (determined under rules similar to the rules of subparagraphs (C) and (D) of section 904(d)(3)) to income of the related person which is neither subpart F income nor income treated as effectively connected with the conduct of a trade or business in the United States. For purposes of this subparagraph, interest shall include factoring income which is treated as income equivalent to interest for purposes of paragraph (1)(E). The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph, including such regulations as may be necessary or appropriate to prevent the abuse of the purposes of this paragraph.\nSubparagraph (A) shall not apply in the case of any interest, rent, or royalty to the extent such interest, rent, or royalty creates (or increases) a deficit which under section 952(c) may reduce the subpart F income of the payor or another controlled foreign corporation.\nSubparagraph (A) shall apply to taxable years of foreign corporations beginning after  December 31, 2005 , and before  January 1, 2026 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.\nFor purposes of determining foreign base company sales income in situations in which the carrying on of activities by a controlled foreign corporation through a branch or similar establishment outside the country of incorporation of the controlled foreign corporation has substantially the same effect as if such branch or similar establishment were a wholly owned subsidiary corporation deriving such income, under regulations prescribed by the Secretary the income attributable to the carrying on of such activities of such branch or similar establishment shall be treated as income derived by a wholly owned subsidiary of the controlled foreign corporation and shall constitute foreign base company sales income of the controlled foreign corporation.\nFor purposes of subsection (c)(1), foreign personal holding company income shall not include qualified banking or financing income of an eligible controlled foreign corporation.\nNo income of an eligible controlled foreign corporation not described in clause (ii) or (iii) of paragraph (2)(B) (or of a qualified business unit of such corporation) shall be treated as qualified banking or financing income unless more than 30 percent of such corporation’s or unit’s gross income is derived directly from the active and regular conduct of a lending or finance business from transactions with customers which are not related persons and which are located within such corporation’s or unit’s home country.\nThe term “qualified banking or financing income” shall not include income derived from 1 or more transactions with customers located in a country other than the home country of the eligible controlled foreign corporation or a qualified business unit of such corporation unless such corporation or unit conducts substantial activity with respect to a banking, financing, or similar business in its home country.\nThe term “customer” means, with respect to any controlled foreign corporation or qualified business unit, any person which has a customer relationship with such corporation or unit and which is acting in its capacity as such.\nThe term “home country” means, with respect to any controlled foreign corporation, the country under the laws of which the corporation was created or organized.\nThe term “home country” means, with respect to any qualified business unit, the country in which such unit maintains its principal office.\nThe determination of where a customer is located shall be made under rules prescribed by the Secretary.\nThe term “qualified business unit” has the meaning given such term by section 989(a).\nThe term “related person” has the meaning given such term by subsection (d)(3).\nParagraph (1) shall not apply to income described in subsection (c)(2)(C)(ii) of a dealer in securities (within the meaning of section 475) which is an eligible controlled foreign corporation described in paragraph (2)(B)(iii).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, subsection (c)(1)(B)(i), subsection (c)(2)(C)(ii), and the last sentence of subsection (e)(2).\nFor purposes of subsection (c)(1), foreign personal holding company income shall not include qualified insurance income of a qualifying insurance company.\nThe amount of the reserve under clause (i) shall be the foreign statement reserve for the contract (less any catastrophe, deficiency, equalization, or similar reserves), if, pursuant to a ruling request submitted by the taxpayer or as provided in published guidance, the Secretary determines that the factors taken into account in determining the foreign statement reserve provide an appropriate means of measuring income.\nIn no event shall the reserve determined under this paragraph for any contract as of any time exceed the amount which would be taken into account with respect to such contract as of such time in determining foreign statement reserves (less any catastrophe, deficiency, equalization, or similar reserves).\nFor purposes of this subsection, any term used in this subsection which is also used in section 953(e) shall have the meaning given such term by section 953.\nSections 15(a) and 15C(a) of the Securities Exchange Act of 1934, referred to in subsec. (h)(2)(B)(iii), are classified to sections 78 o (a) and 78 o –5(a), respectively, of Title 15, Commerce and Trade.\n2020—Subsec. (c)(6)(C).  Pub. L. 116–260  substituted “ January 1, 2026 ” for “ January 1, 2021 ”.\n2019—Subsec. (c)(6)(C).  Pub. L. 116–94  substituted “ January 1, 2021 ” for “ January 1, 2020 ”.\n2017—Subsec. (a)(5).  Pub. L. 115–97, §\u202f14211(a) , struck out par. (5) which read as follows: “the foreign base company oil related income for the taxable year (determined under subsection (g) and reduced as provided in subsection (b)(5)).”\nSubsec. (b)(4).  Pub. L. 115–97, §\u202f14211(b)(2)(A) , struck out at end “The preceding sentence shall not apply to foreign base company oil-related income described in subsection (a)(5).”\nSubsec. (b)(5).  Pub. L. 115–97, §\u202f14211(b)(2)(B) , which directed substitution of “and the foreign base company services income” for “the foreign base company services income, and the foreign base company oil related income”, was executed by making the substitution for “the foreign base company services income,, and the foreign base company oil related income” to reflect the probable intent of Congress.\nSubsec. (b)(6).  Pub. L. 115–97, §\u202f14211(b)(2)(C) , struck out par. (6). Text read as follows: “Income of a corporation which is foreign base company oil related income shall not be considered foreign base company income of such corporation under paragraph (2), or (3) of subsection (a).”\nSubsec. (g).  Pub. L. 115–97, §\u202f14211(b)(3) , struck out subsec. (g) which related to foreign base company oil related income.\nSubsec. (i)(5)(B).  Pub. L. 115–97, §\u202f13517(b)(5) , substituted “shall apply,” for “shall be substituted for the prevailing State assumed interest rate,”.\n2015—Subsec. (c)(6)(C).  Pub. L. 114–113, §\u202f144(a) , substituted “ January 1, 2020 ” for “ January 1, 2015 ”.\nSubsec. (h)(9).  Pub. L. 114–113, §\u202f128(b) , struck out par. (9). Text read as follows: “This subsection, subsection (c)(2)(C)(ii), and the last sentence of subsection (e)(2) shall apply only to taxable years of a foreign corporation beginning after  December 31, 1998 , and before  January 1, 2015 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.”\n2014—Subsec. (c)(6)(C).  Pub. L. 113–295, §\u202f135(a) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\nSubsec. (h)(9).  Pub. L. 113–295, §\u202f134(b) , substituted “ January 1, 2015 ” for “ January 1, 2014 ”.\n2013—Subsec. (c)(6)(C).  Pub. L. 112–240, §\u202f323(a) , substituted “ January 1, 2014 ” for “ January 1, 2012 ”.\nSubsec. (h)(9).  Pub. L. 112–240, §\u202f322(b) , substituted “ January 1, 2014 ” for “ January 1, 2012 ”.\n2010—Subsec. (c)(6)(C).  Pub. L. 111–312, §\u202f751(a) , substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\nSubsec. (h)(9).  Pub. L. 111–312, §\u202f750(a) , substituted “ January 1, 2012 ” for “ January 1, 2010 ”.\n2008—Subsec. (c)(6)(C).  Pub. L. 110–343, §\u202f304(a) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\nSubsec. (h)(9).  Pub. L. 110–343, §\u202f303(b) , substituted “ January 1, 2010 ” for “ January 1, 2009 ”.\n2007—Subsec. (c)(1)(F).  Pub. L. 110–172, §\u202f11(a)(19) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Any item of income, gain, deduction, or loss from a notional principal contract entered into for purposes of hedging any item described in any preceding subparagraph shall not be taken into account for purposes of this subparagraph but shall be taken into account under such other subparagraph.”\nSubsec. (c)(1)(H), (I).  Pub. L. 110–172, §\u202f11(a)(20) , redesignated subpar. (I) as (H).\nSubsec. (c)(2)(C)(ii).  Pub. L. 110–172, §\u202f11(g)(15)(B) , substituted “section 956(c)(2)(I)” for “section 956(c)(2)(J)”.\nSubsec. (c)(6)(B), (C).  Pub. L. 110–172, §\u202f4(a) , added subpar. (B) and redesignated former subpar. (B) as (C).\n2006—Subsec. (c)(6).  Pub. L. 109–222, §\u202f103(b)(1) , added par.(6).\nSubsec. (c)(6)(A).  Pub. L. 109–432 , in first sentence, substituted “which is neither subpart F income nor income treated as effectively connected with the conduct of a trade or business in the United States” for “which is not subpart F income” and, in last sentence, substituted “The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph, including such regulations as may be necessary or appropriate to prevent the abuse of the purposes of this paragraph” for “The Secretary shall prescribe such regulations as may be appropriate to prevent the abuse of the purposes of this paragraph”.\nSubsec. (h)(9).  Pub. L. 109–222, §\u202f103(a)(2) , substituted “ January 1, 2009 ” for “ January 1, 2007 ”.\n2005—Subsec. (c)(1)(C)(i).  Pub. L. 109–135, §\u202f412 ( ll ), substituted “paragraph (5)(A)” for “paragraph (4)(A)”.\nSubsec. (c)(1)(F).  Pub. L. 109–135, §\u202f412(mm) , struck out “Net income from notional principal contracts.” before “Any item of income”.\nSubsec. (c)(4)(B).  Pub. L. 109–135, §\u202f403(m) , inserted at end “If a controlled foreign corporation is treated as owning a capital or profits interest in a partnership under constructive ownership rules similar to the rules of section 958(b), the controlled foreign corporation shall be treated as owning such interest directly for purposes of this subparagraph.”\n2004—Subsec. (a)(4).  Pub. L. 108–357, §\u202f415(a)(1) , struck out par. (4) which read as follows: “the foreign base company shipping income for the taxable year (determined under subsection (f) and reduced as provided in subsection (b)(5)), and”.\nSubsec. (b)(5).  Pub. L. 108–357, §\u202f415(c)(2)(A) , struck out “the foreign base company shipping income,” after “the foreign base company services income,,”.\nSubsec. (b)(6) to (8).  Pub. L. 108–357, §\u202f415(c)(2)(B) , (C), redesignated par. (8) as (6) and struck out former pars. (6) and (7) which set forth special rules and special exclusion for foreign base company shipping income.\nSubsec. (c)(1)(C)(i), (ii).  Pub. L. 108–357, §\u202f414(a) , amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) read as follows:\n“(i) arise out of bona fide hedging transactions reasonably necessary to the conduct of any business by a producer, processor, merchant, or handler of a commodity in the manner in which such business is customarily and usually conducted by others,\n“(ii) are active business gains or losses from the sale of commodities, but only if substantially all of the controlled foreign corporation’s business is as an active producer, processor, merchant, or handler of commodities, or”.\nSubsec. (c)(1)(I).  Pub. L. 108–357, §\u202f413(b)(2) , added subpar. (I).\nSubsec. (c)(2)(A).  Pub. L. 108–357, §\u202f415(b) , inserted at end “For purposes of the preceding sentence, rents derived from leasing an aircraft or vessel in foreign commerce shall not fail to be treated as derived in the active conduct of a trade or business if, as determined under regulations prescribed by the Secretary, the active leasing expenses are not less than 10 percent of the profit on the lease.”\nSubsec. (c)(2)(C)(i).  Pub. L. 108–357, §\u202f414(c) , inserted “and transactions involving physical settlement” after “(including hedging transactions”.\nSubsec. (c)(4).  Pub. L. 108–357, §\u202f412(a) , added par. (4).\nSubsec. (c)(5).  Pub. L. 108–357, §\u202f414(b) , added par. (5).\nSubsec. (f).  Pub. L. 108–357, §\u202f415(a)(2) , struck out subsec. (f) which defined “foreign base company shipping income” for purposes of subsec. (a)(4).\nSubsec. (h)(3)(E).  Pub. L. 108–357, §\u202f416(a) , added subpar. (E).\n2002—Subsec. (c)(1)(B).  Pub. L. 107–147, §\u202f417(24)(B)(ii) , which directed the amendment of  Pub. L. 106–170, §\u202f532(c)(2)(Q) , was executed to that section as if the amendment were retroactive to the effective date of the amendment by  Pub. L. 106–170  to reflect the probable intent of Congress. See 1999 Amendment note below.\nSubsec. (h)(9).  Pub. L. 107–147, §\u202f614(a)(2) , substituted “ January 1, 2007 ” for “ January 1, 2002 ”.\nSubsec. (i)(4)(B).  Pub. L. 107–147, §\u202f614(b)(1) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The amount of the reserve of a qualifying insurance company or qualifying insurance company branch for any life insurance or annuity contract shall be equal to the greater of—\n“(i) the net surrender value of such contract (as defined in section 807(e)(1)(A)), or\n“(ii) the reserve determined under paragraph (5).”\n1999—Subsec. (c)(1)(B).  Pub. L. 106–170, §\u202f532(c)(2)(Q) , as amended by  Pub. L. 107–147, §\u202f417(24)(B)(ii) , substituted “section 1221(a)(1)” for “section 1221(1)” in concluding provisions.\nSubsec. (h)(9).  Pub. L. 106–170, §\u202f503(a) , substituted “taxable years” for “the first taxable year”, “ January 1, 2002 ” for “ January 1, 2000 ”, and “within which any such” for “within which such”.\n1998—Subsec. (c)(1)(B)(i).  Pub. L. 105–277, §\u202f1005(e) , inserted “other than property which gives rise to income not treated as foreign personal holding company income by reason of subsection (h) or (i) for the taxable year” before comma at end.\nSubsec. (c)(2)(C).  Pub. L. 105–277, §\u202f1005(c) , amended heading and text of subpar. (C), generally. Prior to amendment, text read as follows: “Except as provided in subparagraph (A), (E), or (G) of paragraph (1) or by regulations, in the case of a regular dealer in property (within the meaning of paragraph (1)(B)), forward contracts, option contracts, or similar financial instruments (including notional principal contracts and all instruments referenced to commodities), there shall not be taken into account in computing foreign personal holding income any item of income, gain, deduction, or loss from any transaction (including hedging transactions) entered into in the ordinary course of such dealer’s trade or business as such a dealer.”\nSubsec. (e)(2).  Pub. L. 105–277, §\u202f1005(d) , inserted “or” at end of subpar. (A), substituted a period for “,\u2000or” at end of subpar. (B), and inserted concluding provisions.\nSubsec. (e)(2)(C).  Pub. L. 105–277, §\u202f4003(j) , substituted “(h)(9)” for “(h)(8)”.\nPub. L. 105–277, §\u202f1005(d) , struck out subpar. (C) which read as follows: “in the case of taxable years described in subsection (h)(9), the active conduct by a controlled foreign corporation of a banking, financing, insurance, or similar business, but only if the corporation is predominantly engaged in the active conduct of such business (within the meaning of subsection (h)(3)) or is a qualifying insurance company.”\nSubsec. (h).  Pub. L. 105–277, §\u202f1005(a) , amended heading and text of subsec. (h) generally. Prior to amendment, text consisted of pars. (1) to (9) relating to special rule for income derived in active conduct of banking, financing, or similar businesses, principles for determining applicable income, meaning of “predominantly engaged” for purposes of the special rule, methods of determining unearned premiums and reserves, definitions of certain terms for purposes of subsec. (h), anti-abuse rules, coordination with  section 953 of this title , and taxable year applicability of subsec. (h).\nSubsec. (i).  Pub. L. 105–277, §\u202f1005(b)(2) , added subsec. (i).\n1997—Subsec. (c)(1)(B).  Pub. L. 105–34, §\u202f1051(a)(2) , in concluding provisions, struck out “In the case of any regular dealer in property, gains and losses from the sale or exchange of any such property or arising out of bona fide hedging transactions reasonably necessary to the conduct of the business of being a dealer in such property shall not be taken into account under this subparagraph.” before “Gains and losses” and “also” after “section 1221(1)”.\nSubsec. (c)(1)(F), (G).  Pub. L. 105–34, §\u202f1051(a)(1) , added subpars. (F) and (G).\nSubsec. (c)(2)(C).  Pub. L. 105–34, §\u202f1051(b) , added subpar. (C).\nSubsec. (e)(2)(C).  Pub. L. 105–34, §\u202f1175(b) , added subpar. (C).\nSubsec. (h).  Pub. L. 105–34, §\u202f1175(a) , added subsec. (h).\n1996—Subsec. (c)(3)(A)(i).  Pub. L. 104–188  amended directory language of  Pub. L. 101–239, §\u202f7811(i)(3)(A) . See 1989 Amendment note below.\n1993—Subsec. (b)(8).  Pub. L. 103–66, §\u202f13235(a)(3)(B) , struck out “(1),” after “such corporation under paragraph”.\nSubsec. (c)(3)(C).  Pub. L. 103–66, §\u202f13233(a)(1) , added subpar. (C).\nSubsec. (d)(4).  Pub. L. 103–66, §\u202f13239(d) , added par. (4).\nSubsec. (f).  Pub. L. 103–66, §\u202f13235(b) , inserted at end of concluding provisions “Except as provided in paragraph (1), such term shall not include any dividend or interest income which is foreign personal holding company income (as defined in subsection (c)).”\nSubsec. (g)(1).  Pub. L. 103–66, §\u202f13235(a)(3)(A) , inserted at end “Such term shall not include any foreign personal holding company income (as defined in subsection (c)).”\n1989—Subsec. (c)(3)(A).  Pub. L. 101–239, §\u202f7811(i)(3)(C) , inserted at end “To the extent provided in regulations, payments made by a partnership with 1 or more corporate partners shall be treated as made by such corporate partners in proportion to their respective interests in the partnership.”\nSubsec. (c)(3)(A)(i).  Pub. L. 101–239, §\u202f7811(i)(3)(A) , as amended by  Pub. L. 104–188 , substituted “is a corporation created” for “is created” after “person which (I)”.\nSubsec. (c)(3)(A)(ii).  Pub. L. 101–239, §\u202f7811(i)(3)(B) , substituted “from a corporation which is a related person” for “from a related person”.\n1988—Subsec. (b)(6), (7).  Pub. L. 100–647, §\u202f1012(i)(12) , struck out “(determined without regard to the exclusion under paragraph (2) of this subsection)” after “paragraph (4) of subsection (a)”.\nSubsec. (c)(1)(B).  Pub. L. 100–647, §\u202f1012(i)(18) , (20), added cl. (ii), redesignated former cl. (ii) as (iii), added closing provisions, and struck out former closing provisions which read as follows: “This subparagraph shall not apply to gain from the sale or exchange of any property which, in the hands of the taxpayer, is property described in section 1221(1) or to gain from the sale or exchange of any property by a regular dealer in such property.”\nSubsec. (c)(3)(B).  Pub. L. 100–647, §\u202f1012(i)(25)(B) , inserted before period at end “or creates (or increases) a deficit which under section 952(c) may reduce the subpart F income of the payor or another controlled foreign corporation”.\nSubsec. (d)(3).  Pub. L. 100–647, §\u202f1012(i)(14)(A) , substituted “more than 50 percent” for “50 percent or more” in last two sentences.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1018(u)(38) , related to execution of amendment by  Pub. L. 99–514, §\u202f1221(b)(3)(B) , see 1986 Amendment note below.\n1986—Subsec. (a)(5).  Pub. L. 99–514, §\u202f1221(c)(3)(A)(ii) , substituted “determined under subsection (g)” for “determined under subsection (h)”.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1221(c)(1) , struck out par. (2), exclusion for reinvested shipping income, which read as follows: “For purposes of subsection (a), foreign base company income does not include foreign base company shipping income to the extent that the amount of such income does not exceed the increase for the taxable year in qualified investments in foreign base company shipping operations of the controlled foreign corporation (as determined under subsection (g)).”\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f1223(a) , amended par. (3) generally. Prior to amendment, par. (3), special rule where foreign base company income is less than 10 percent or more than 70 percent of gross income, read as follows: “For purposes of subsection (a)—\n“(A) If the foreign base company income (determined without regard to paragraphs (2) and (5)) is less than 10 percent of gross income, no part of the gross income of the taxable year shall be treated as foreign base company income.\n“(B) If the foreign base company income (determined without regard to paragraphs (2) and (5)) exceeds 70 percent of gross income, the entire gross income of the taxable year shall, subject to the provisions of paragraphs (2), (4), and (5), be treated as foreign base company income.”\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1221(d) , amended par. (4) generally. Prior to amendment, par. (4), exception for foreign corporations not availed of to reduce taxes, read as follows: “For purposes of subsection (a), foreign base company income does not include any item of income received by a controlled foreign corporation if it is established to the satisfaction of the Secretary that neither—\n“(A) the creation or organization of such controlled foreign corporation under the laws of the foreign country in which it is incorporated (or, in the case of a controlled foreign corporation which is an acquired corporation, the acquisition of such corporation created or organized under the laws of the foreign country in which it is incorporated), nor\n“(B) the effecting of the transaction giving rise to such income through the controlled foreign corporation,\nhas as one of its significant purposes a substantial reduction of income, war profits, or excess profits or similar taxes. The preceding sentence shall not apply to foreign base company oil related income described in subsection (a)(5).”\nSubsec. (b)(5).  Pub. L. 99–514, §\u202f1201(c) , inserted at end “Except to the extent provided in regulations prescribed by the Secretary, any interest which is paid or accrued by the controlled foreign corporation to any United States shareholder in such corporation (or any controlled foreign corporation related to such a shareholder) shall be allocated first to foreign personal holding company income which is passive income (within the meaning of section 904(d)(2)) of such corporation to the extent thereof. The Secretary may, by regulations, provide that the preceding sentence shall apply also to interest paid or accrued to other persons.”\nSubsec. (c).  Pub. L. 99–514, §\u202f1221(a)(1) , amended subsec. (c) generally, substituting pars. (1) to (3) for former provisions which had provided: in par. (1), a reference to definition of “foreign personal holding company income” contained in section 553; in par. (2), that all rents would be included in “foreign personal holding company income” without regard to whether or not such rents constituted 50 percent or more of gross income; in par. (3), for exclusion of certain income derived in active conduct of a trade or business; and in par. (4), exclusion of certain income received from related persons from being included in “foreign personal holding company income”. See subsec. (c)(3).\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1221(e) , added subpars. (A) and (B) and concluding provisions and struck out former subpars. (A) to (C) and concluding provisions which read as follows:\n“(A) such person is an individual, partnership, trust, or estate which controls the controlled foreign corporation;\n“(B) such person is a corporation which controls, or is controlled by, the controlled foreign corporation; or\n“(C) such person is a corporation which is controlled by the same person or persons which control the controlled foreign corporation.\nFor purposes of the preceding sentence, control means the ownership, directly or indirectly, of stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote. For purposes of this paragraph, the rules for determining ownership of stock prescribed by section 958 shall apply.”\nSubsec. (e).  Pub. L. 99–514, §\u202f1810(k) , in amending subsec. (e) generally, designated existing provisions as par. (1), added par. heading, and substituted subpar. (A) and (B) designations for prior par. (1) and (2) designations, struck out provisions relating to nonapplicability of preceding sentence to services performed in connection with manufactured or grown or extracted property, and provisions determining the place of performance of services for purposes of paragraph (2) with respect to any policy of insurance and reinsurance, and added pars. (2) and (3).\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f1221(b)(3)(B) , and  Pub. L. 100–647, §\u202f1018(u)(38) , struck out par. (3) as enacted by  section 1810(k) of Pub. L. 99–514 , which read as follows: “For purposes of paragraph (1), in the case of any services performed with respect to any policy of insurance or reinsurance with respect to which the primary insured is a related person (within the meaning of section 864(d)(4))—\n“(A) such primary insured shall be treated as a related person for purposes of paragraph (1)(A) (whether or not the requirements of subsection (d)(3) are met),\n“(B) such services shall be treated as performed in the country within which the insured hazards, risks, losses, or liabilities occur, and\n“(C) except as otherwise provided in regulations by the Secretary, rules similar to the rules of section 953(b) shall be applied in determining the income from such services.”\nSubsec. (f).  Pub. L. 99–514, §\u202f1221(c)(2) , inserted last sentence.\nSubsecs. (g), (h).  Pub. L. 99–514, §\u202f1221(c)(3)(A)(i) , redesignated subsec. (h) as (g) and struck out former subsec. (g), increase in qualified investments in foreign base company shipping operations, which read as follows: “For purposes of subsection (b)(2), the increase for any taxable year in qualified investments in foreign base company shipping operations of any controlled foreign corporation is the amount by which—\n“(1) the qualified investments in foreign base company shipping operations (as defined in section 955(b)) of the controlled foreign corporation at the close of the taxable year, exceed\n“(2) the qualified investments in foreign base company shipping operations (as so defined) of the controlled foreign corporation at the close of the preceding taxable year.”\n1984—Subsec. (e).  Pub. L. 98–369, §\u202f137(a) , inserted provision that for purposes of par. (2) services performed with respect to any insurance or reinsurance policy be treated as performed in the country of risk.\nSubsec. (h)(1).  Pub. L. 98–369, §\u202f712(f) , substituted “paragraphs (2) and (3) of section 907(c)” for “section 907(c)(2)”.\n1982—Subsec. (a)(5).  Pub. L. 97–248, §\u202f212(a) , (e), added par. (5).\nSubsec. (b)(4).  Pub. L. 97–248, §\u202f212(d) , inserted at end “The preceding sentence shall not apply to foreign base company oil related income described in subsection (a)(5).”\nSubsec. (b)(5).  Pub. L. 97–248, §\u202f212(b)(1) , substituted “,\u2000the foreign base company shipping income, and the foreign base company oil related income” for “and the foreign base company shipping income”.\nSubsec. (b)(8).  Pub. L. 97–248, §\u202f212(b)(2) , added par. (8).\nSubsec. (h).  Pub. L. 97–248, §\u202f212(c) , added subsec. (h).\n1976—Subsecs. (b)(4), (5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(7).  Pub. L. 94–455, §\u202f1024(a) , added par. (7).\nSubsec. (c)(3)(C).  Pub. L. 94–455, §\u202f1023(a) , added subpar. (C).\n1975—Subsec. (a)(4).  Pub. L. 94–12, §\u202f602(d)(1)(A) , added par. (4).\nSubsec. (b)(1).  Pub. L. 94–12, §\u202f602(c)(1) , struck out subsec. (b)(1) which related to the exclusion of certain dividends, interest, and gains from qualified investments in less developed countries.\nSubsec. (b)(2).  Pub. L. 94–12, §\u202f602(d)(1)(B) , substituted “foreign base company shipping income to the extent that the amount of such income does not exceed the increase for the taxable year in qualified investments in foreign base company shipping operations of the controlled foreign corporation (as determined under subsection (g))” for “income derived from, or in connection with, the use (or hiring or leasing for use) of any aircraft or vessel in foreign commerce, or the performance of services directly related to the use of any such aircraft or vessel” in text and “Exclusion for reinvested shipping income” for “Exclusion of certain shipping income” in heading.\nSubsec. (b)(3).  Pub. L. 94–12, §\u202f602(d)(1)(C) , (D), (e), substituted “10 percent” for “30 percent” in heading, substituted “paragraphs (2) and (5)” for “paragraphs (1) and (5)” and “10 percent” for “30 percent” in subpar. (A), and substituted “paragraphs (2) and (5)” for “paragraphs (1) and (5)” and “paragraphs (2), (4), and (5)” for “paragraphs (1), (2), (4), and (5)” in subpar. (B).\nSubsec. (b)(5).  Pub. L. 94–12, §\u202f602(d)(1)(E) , substituted “the foreign base company services income, and the foreign base company shipping income” for “and the foreign base company services income”.\nSubsec. (b)(6).  Pub. L. 94–12, §\u202f602(d)(1)(F) , added par. (6).\nSubsec. (d)(1).  Pub. L. 94–12, §\u202f602(b) , provided that for purposes of subsec. (d) personal property does not include agricultural commodities which are not grown in the United States in commercially marketable quantities.\nSubsecs. (f), (g).  Pub. L. 94–12, §\u202f602(c)(2) , (d)(1)(G), added subsecs. (f) and (g).\n1969—Subsec. (b)(4).  Pub. L. 91–172  inserted reference to a foreign corporation which is an acquired corporation, and made the effecting of a transaction giving rise to foreign base income through the controlled foreign corporation subject to the Secretary’s power to disallow inclusion of any item of such income where such inclusion will have one of the effects prescribed by this section.\nPub. L. 116–260, div. EE, title I, §\u202f111(b) ,  Dec. 27, 2020 ,  134 Stat. 3050 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2020 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nPub. L. 116–94, div. Q, title I, §\u202f145(b) ,  Dec. 20, 2019 ,  133 Stat. 3236 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2019 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 13517(b)(5) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , with transition rule and transition relief, see  section 13517(c) of Pub. L. 115–97 , set out as a note under  section 807 of this title .\nAmendment by section 14211(a), (b)(2), (3) of  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 14211(c) of Pub. L. 115–97 , set out as a note under  section 952 of this title .\nAmendment by  section 128(b) of Pub. L. 114–113  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2014 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends, see  section 128(c) of Pub. L. 114–113 , set out as a note under  section 953 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f144(b) ,  Dec. 18, 2015 ,  129 Stat. 3065 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2014 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 134(b) of Pub. L. 113–295  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2013 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends, see  section 134(c) of Pub. L. 113–295 , set out as a note under  section 953 of this title .\nPub. L. 113–295, div. A, title I, §\u202f135(b) ,  Dec. 19, 2014 ,  128 Stat. 4019 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2013 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 322(b) of Pub. L. 112–240  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2011 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends, see  section 322(c) of Pub. L. 112–240 , set out as a note under  section 953 of this title .\nPub. L. 112–240, title III, §\u202f323(b) ,  Jan. 2, 2013 ,  126 Stat. 2333 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2011 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 750(a) of Pub. L. 111–312  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2009 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends, see  section 750(c) of Pub. L. 111–312 , set out as a note under  section 953 of this title .\nPub. L. 111–312, title VII, §\u202f751(b) ,  Dec. 17, 2010 ,  124 Stat. 3321 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2009 , and to taxable years of United States shareholders with or within which any such taxable year of such foreign corporation ends.”\nPub. L. 110–343, div. C, title III, §\u202f304(b) ,  Oct. 3, 2008 ,  122 Stat. 3867 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2007 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 4(a) of Pub. L. 110–172  effective as if included in the provisions of the Tax Increase Prevention and Reconciliation Act of 2005,  Pub. L. 109–222 , to which such amendment relates, with certain exceptions, see  section 4(d) of Pub. L. 110–172 , set out as a note under  section 355 of this title .\nPub. L. 109–432, div. A, title IV, §\u202f426(a)(2) ,  Dec. 20, 2006 ,  120 Stat. 2974 , provided that:  “The amendments made by this subsection [amending this section] shall take effect as if included in section 103(b) of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ].”\nPub. L. 109–222, title I, §\u202f103(b)(2) ,  May 17, 2006 ,  120 Stat. 347 , provided that:  “The amendment made by this subsection [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2005 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 403(m) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 108–357, title IV, §\u202f412(b) ,  Oct. 22, 2004 ,  118 Stat. 1506 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 413(b)(2) of Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 108–357, title IV, §\u202f414(d) ,  Oct. 22, 2004 ,  118 Stat. 1511 , provided that:  “The amendments made by this section [amending this section] shall apply to transactions entered into after  December 31, 2004 .”\nAmendment by section 415(a), (b), (c)(2) of  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 415(d) of Pub. L. 108–357 , set out as a note under  section 952 of this title .\nPub. L. 108–357, title IV, §\u202f416(b) ,  Oct. 22, 2004 ,  118 Stat. 1512 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of such foreign corporations beginning after  December 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of such foreign corporations end.”\nAmendment by section 614(a)(2), (b)(1) of  Pub. L. 107–147  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 614(c) of Pub. L. 107–147 , set out as a note under  section 953 of this title .\nAmendment by  section 503(a) of Pub. L. 106–170  applicable to taxable years beginning after  Dec. 31, 1999 , see  section 503(c) of Pub. L. 106–170 , set out as a note under  section 953 of this title .\nAmendment by  section 532(c)(2)(Q) of Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  section 4003(j) of Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nPub. L. 105–34, title X, §\u202f1051(c) ,  Aug. 5, 1997 ,  111 Stat. 940 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XI, §\u202f1175(c) ,  Aug. 5, 1997 ,  111 Stat. 993 , provided that:  “The amendments made by this section [amending this section] shall apply to the first full taxable year of a foreign corporation beginning after  December 31, 1997 , and before  January 1, 1999 , and to taxable years of United States shareholders with or within which such taxable year of such foreign corporation ends.”\nPub. L. 103–66, title XIII, §\u202f13233(a)(2) ,  Aug. 10, 1993 ,  107 Stat. 502 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years of controlled foreign corporations beginning after  September 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of controlled foreign corporations end.”\nAmendment by section 13235(a)(3) and (b) of  Pub. L. 103–66  applicable to taxable years beginning after  Dec. 31, 1992 , see  section 13235(c) of Pub. L. 103–66 , set out as a note under  section 904 of this title .\nAmendment by  section 13239(d) of Pub. L. 103–66  applicable to sales, exchanges, or other dispositions after  Aug. 10, 1993 , see  section 13239(e) of Pub. L. 103–66 , set out as a note under  section 865 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1201(c) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1201(e) of Pub. L. 99–514 , set out as a note under  section 904 of this title .\nPub. L. 99–514, title XII, §\u202f1221(g) ,  Oct. 22, 1986 ,  100 Stat. 2555 , as amended by  Pub. L. 100–647, title I, §\u202f1012(i)(13) ,  Nov. 10, 1988 ,  102 Stat. 3509 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 864, 952, 953, 955, and 957 of this title] shall apply to taxable years of foreign corporations beginning after  December 31, 1986 . \n \n “(2)   Special rule for repeal of exclusion for reinvestment shipping income.— “(A)   In general .— In the case of any qualified controlled foreign corporation— “(i)  the amendments made by subsection (c) [amending this section and  section 955 of this title ] shall apply to taxable years ending on or after  January 1, 1992 , and \n \n “(ii)  [former] sections 955(a)(1)(A) and 955(a)(2)(A) of the Internal Revenue Code of 1986 (as amended by subsection (c)(3)) shall be applied by substituting ‘ending before 1992’ for ‘beginning before 1987’. \n \n \n “(B)   Qualified controlled foreign corporation .— For purposes of subparagraph (A), the term ‘qualified controlled foreign corporation’ means any controlled foreign corporation (as defined in section 957 of such Code)— “(i)  if the United States agent of such corporation is a domestic corporation incorporated on  March 13, 1951 , and \n \n “(ii)  if— “(I)  the certificate of incorporation of such corporation is dated  November 23, 1963 , and \n \n “(II)  such corporation has a wholly owned subsidiary and its certificate of incorporation is dated  November 2, 1965 . \n \n \n \n \n “(3)   Exception for certain reinsurance contracts.— “(A)   In general .— In the case of the 1st 3 taxable years of a qualified controlled foreign insurer beginning after  December 31, 1986 , the amendments made by this section shall not apply to the phase-in percentage of any qualified reinsurance income. \n \n “(B)   Phase-in percentage .— For purposes of subparagraph (A): \n \n \n \n \n \n \n \n \n \n \n \u2001 “In the case of taxable The phase-in \n \u2001\u2000 years beginning in: percentage is: \n 1987 75\u202f\u202f \n 1988 50\u202f\u202f \n 1989 25. \n \n \n \n \n “(C)   Qualified controlled foreign insurer .— For purposes of this paragraph, the term ‘qualified controlled foreign insurer’ means— “(i)  any controlled foreign corporation which on  August 16, 1986 , was a member of an affiliated group (as defined in section 1504(a) of the Internal Revenue Code of 1986 without regard to subsection (b)(3) thereof) which had as its common parent a corporation incorporated in Delaware on  June 9, 1967 , with executive offices in New York, New York, or \n \n “(ii)  any controlled foreign corporation which on  August 16, 1986 , was a member of an affiliated group (as so defined) which had as its common parent a corporation incorporated in Delaware on  November 3, 1981 , with executive offices in Philadelphia, Pennsylvania. \n \n \n “(D)   Qualified reinsurance income .— For purposes of this paragraph, the term ‘qualified reinsurance income’ means any insurance income attributable to risks (other than risks described in section 953(a) or 954(e) of such Code as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]) assumed under a reinsurance contract. For purposes of this subparagraph, insurance income shall mean the underwriting income (as defined in section 832(b)(3) of such Code) and investment income derived from an amount of assets (to be segregated and separately identified) equivalent to the ordinary and necessary insurance reserves and necessary surplus equal to ⅓ of earned premium attributable to such contracts. For purposes of this paragraph, the amount of qualified reinsurance income shall not exceed the amount of insurance income from reinsurance contracts for calendar year 1985. In the case of controlled foreign corporations described in subparagraph (C)(ii), the preceding sentence shall not apply and the qualified reinsurance income of any such corporation shall not exceed such corporation’s proportionate share of $27,000,000 (determined on the basis of respective amounts of qualified reinsurance income determined without regard to this subparagraph).”\nAmendment by  section 1223(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1223(c) of Pub. L. 99–514 , set out as a note under  section 864 of this title .\nAmendment by  section 1810(k) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f137(b) ,  July 18, 1984 ,  98 Stat. 672 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to taxable years of controlled foreign corporations beginning after the date of the enactment of this Act [ July 18, 1984 ].”\nAmendment by  section 712(f) of Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title II, §\u202f212(f) ,  Sept. 3, 1982 ,  96 Stat. 452 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 1982 , and to taxable years of United States shareholders in which, or with which, such taxable years of foreign corporations end.”\nPub. L. 94–455, title X, §\u202f1023(b) ,  Oct. 4, 1976 ,  90 Stat. 1620 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 1975 , and to taxable years of United States shareholders (within the meaning of section 951(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) within which or with which such taxable years of such foreign corporations end.”\nPub. L. 94–455, title X, §\u202f1024(b) ,  Oct. 4, 1976 ,  90 Stat. 1620 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 1975 , and to taxable years of United States shareholders (within the meaning of section 951(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) within which or with which such taxable years of such foreign corporations end.”\nPub. L. 94–12, title VI, §\u202f602(f) ,  Mar. 29, 1975 ,  89 Stat. 64 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [enacting  section 955 of this title , amending this section and sections 851, 902, and 951 of this title, and repealing section 963 and former  section 955 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 1975 , and to taxable years of United States shareholders (within the meaning of 951(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) within which or with which such taxable years of such foreign corporations end.”\nPub. L. 91–172, title IX, §\u202f909(b) ,  Dec. 30, 1969 ,  83 Stat. 718 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after  October 9, 1969 .”\nFor applicability of amendment by  section 1201(c) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XII, §\u202f1227 ,  Oct. 22, 1986 ,  100 Stat. 2560 , provided that: \n “(a)   In General .— For purposes of section 954(c)(3)(A) of the Internal Revenue Code of 1986, any dividends received by a qualified controlled foreign corporation (within the meaning of section 951 of such Code) during any of its 1st 5 taxable years beginning after  December 31, 1986 , with respect to its 32.7 percent interest in a Brazilian corporation shall be treated as if such Brazilian corporation were a related person to the qualified controlled foreign corporation to the extent the Brazilian corporation’s income is attributable to its interest in the trade or business of mining in Brazil. \n \n “(b)   Qualified Controlled Foreign Corporation .— For purposes of this section, a qualified controlled foreign corporation is a corporation the greater than 99 percent shareholder of which is a company originally incorporated in Montana on  July 9, 1951  (the name of which was changed on  August 10, 1966 ). \n \n “(c)   Effective Date .— The amendment made by this section shall apply to dividends received after  December 31, 1986 .”\nPub. L. 105–34, title XI, §\u202f1175 ,  Aug. 5, 1997 ,  111 Stat. 990 , amending this section and enacting provisions set out as a note above, was subject to line item veto by the President, Cancellation No. 97–1, signed  Aug. 11, 1997 , 62 F.R. 43266,  Aug. 12, 1997 . For decision holding line item veto unconstitutional, see  Clinton v. City of New York , 524 U.S. 417, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 94–12, title VI, §\u202f602(d)(3)(A) ,  Mar. 29, 1975 ,  89 Stat. 62 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 ;  Pub. L. 99–514, title XII, §\u202f1221(c)(3)(B) , (C),  Oct. 22, 1986 ,  100 Stat. 2553 ;  Pub. L. 100–647, title I, §\u202f1012(i)(11) ,  Nov. 10, 1988 ,  102 Stat. 3509 , related to withdrawal of previously excluded subpart F income from qualified investment.\nA prior section 955, added  Pub. L. 87–834, §\u202f12(a) ,  Oct. 16, 1962 ,  76 Stat. 1013 , related to investments in less developed countries and dealing with less developed country corporations, prior to repeal by  Pub. L. 94–12, title VI, §\u202f602(c)(5) ,  Mar. 29, 1975 ,  89 Stat. 59 .\nRepeal applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14212(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 851 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'In applying subsection (a) to any taxable year, there shall be disregarded any item of United States property which was acquired by the controlled foreign corporation before the first day on which such corporation was treated as a controlled foreign corporation. The aggregate amount of property disregarded under the preceding sentence shall not exceed the portion of the applicable earnings of such controlled foreign corporation which were accumulated during periods before such first day.\nFor purposes of this paragraph, the term “trade or service receivable” and “related person” have the respective meanings given to such terms by section 864(d).\nFor purposes of subsection (a), a controlled foreign corporation shall, under regulations prescribed by the Secretary, be considered as holding an obligation of a United States person if such controlled foreign corporation is a pledgor or guarantor of such obligations.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations to prevent the avoidance of the provisions of this section through reorganizations or otherwise.\n2018—Subsec. (c)(2)(E).  Pub. L. 115–141, §\u202f401(a)(162) , substituted “which are contracts described in section 953(e)(2)” for “which are not contracts described in section 953(a)(1)”.\nSubsec. (e).  Pub. L. 115–141, §\u202f401(a)(163) , substituted “provisions” for “provisons”.\n2007—Subsec. (c)(2).  Pub. L. 110–172, §\u202f11(g)(15)(A)(ii) , substituted “subparagraphs (I), (J), and (K)” for “subparagraphs (J), (K), and (L)” in concluding provisions.\nSubsec. (c)(2)(I) to (M).  Pub. L. 110–172, §\u202f11(g)(15)(A)(i) , redesignated subpars. (J) to (M) as (I) to (L), respectively, and struck out former subpar. (I) which read as follows: “to the extent provided in regulations prescribed by the Secretary, property which is otherwise United States property which is held by a FSC and which is related to the export activities of such FSC;”.\n2004—Subsec. (c)(2).  Pub. L. 108–357, §\u202f407(b) , substituted “,\u2000(K), and (L)” for “and (K)” in concluding provisions.\nSubsec. (c)(2)(A).  Pub. L. 108–357, §\u202f837(a) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “obligations of the United States, money, or deposits with persons carrying on the banking business;”.\nSubsec. (c)(2)(L), (M).  Pub. L. 108–357, §\u202f407(a) , added subpars. (L) and (M).\n1997—Subsec. (b)(1)(A).  Pub. L. 105–34, §\u202f1601(e) , inserted “to the extent such amount was accumulated in prior taxable years” after “section 316(a)(1)”.\nSubsec. (c)(2).  Pub. L. 105–34, §\u202f1173(a) , added subpars. (J) and (K) and concluding provisions.\n1996—Subsec. (b)(1).  Pub. L. 104–188, §\u202f1501(b)(2) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘applicable earnings’ has the meaning given to such term by section 956A(b), except that the provisions of such section excluding earnings and profits accumulated in taxable years beginning before  October 1, 1993 , shall be disregarded.”\nSubsec. (b)(3).  Pub. L. 104–188, §\u202f1501(b)(3) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Rules similar to the rules of section 956A(e) shall apply for purposes of this section.”\n1993—Subsec. (a).  Pub. L. 103–66, §\u202f13232(a)(2) , added subsec. (a) and struck out former subsec. (a) which consisted of introductory provisions and pars. (1) to (3) setting out general rules for calculating amount of earnings of a controlled foreign corporation invested in United States and pro rata share of the increase for any taxable year in earnings of such a corporation invested in United States property.\nSubsecs. (b) to (d).  Pub. L. 103–66, §\u202f13232(a) , added subsec. (b) and redesignated former subsecs. (b) and (c) as (c) and (d), respectively.\nSubsec. (e).  Pub. L. 103–66, §\u202f13232(b) , added subsec. (e).\n1986—Subsec. (b)(3)(A).  Pub. L. 99–514  inserted “(other than subparagraph (H) thereof)”.\n1984—Subsec. (b)(2)(I).  Pub. L. 98–369, §\u202f801(d)(8) , added subpar. (I).\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f123(b) , added par. (3).\n1976—Subsec. (b)(2)(F) to (H).  Pub. L. 94–455, §\u202f1021(a) , added subpars. (F) and (G) and redesignated former subpar. (F) as (H).\nSubsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nPub. L. 108–357, title IV, §\u202f407(c) ,  Oct. 22, 2004 ,  118 Stat. 1499 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nPub. L. 108–357, title VIII, §\u202f837(b) ,  Oct. 22, 2004 ,  118 Stat. 1596 , provided that:  “The amendment made by this section [amending this section] shall take effect on the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 105–34, title XI, §\u202f1173(b) ,  Aug. 5, 1997 ,  111 Stat. 989 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 1997 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.”\nAmendment by  section 1601(e) of Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end, see  section 1501(d) of Pub. L. 104–188 , set out as a note under  section 904 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years of controlled foreign corporations beginning after  Sept. 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of controlled foreign corporations end, see  section 13232(d) of Pub. L. 103–66 , set out as a note under  section 951 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 123(b) of Pub. L. 98–369  applicable to accounts receivable and evidences of indebtedness transferred after  Mar. 1, 1984 , in taxable years ending after such date, with an exception, see  section 123(c) of Pub. L. 98–369 , set out as a note under  section 864 of this title .\nAmendment by  section 801(d)(8) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nPub. L. 94–455, title X, §\u202f1021(c) ,  Oct. 4, 1976 ,  90 Stat. 1619 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and  section 958 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 1975 , and to taxable years of United States shareholders (within the meaning of section 951(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) within which or with which such taxable years of such foreign corporations end. In determining for purposes of any taxable year referred to in the preceding sentence the amount referred to in section 956(a)(2)(A) of the Internal Revenue Code of 1986 for the last taxable year of a corporation beginning before  January 1, 1976 , the amendments made by this section shall be deemed also to apply to such last taxable year.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 103–66, title XIII, §\u202f13231(b) ,  Aug. 10, 1993 ,  107 Stat. 496 ; amended  Pub. L. 104–188, title I, §\u202f1703(i)(2) , (3),  Aug. 20, 1996 ,  110 Stat. 1876 , related to earnings invested in excess passive assets.\nRepeal by  Pub. L. 104–188  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end, see  section 1501(d) of Pub. L. 104–188 , set out as an Effective Date of 1996 Amendment note under  section 904 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes only of taking into account income described in section 953(a) (relating to insurance income), the term “controlled foreign corporation” includes not only a foreign corporation as defined by subsection (a) but also one of which more than 25 percent of the total combined voting power of all classes of stock (or more than 25 percent of the total value of stock) is owned (within the meaning of section 958(a)), or is considered as owned by applying the rules of ownership of section 958(b), by United States shareholders on any day during the taxable year of such corporation, if the gross amount of premiums or other consideration in respect of the reinsurance or the issuing of insurance or annuity contracts not described in section 953(e)(2) exceeds 75 percent of the gross amount of all premiums or other consideration in respect of all risks.\n2018—Subsec. (b).  Pub. L. 115–141  substituted “contracts not described in section 953(e)(2)” for “contracts described in section 953(a)(1)”.\n2017—Subsec. (a).  Pub. L. 115–97  substituted “title” for “subpart” in introductory provisions.\n2004—Subsec. (c).  Pub. L. 108–357, §\u202f908(c)(5)(B) , struck out “derived from sources within a possession, was effectively connected with the conduct of a trade or business within a possession, or” after “whether income was” in concluding provisions.\nSubsec. (c)(2)(B).  Pub. L. 108–357, §\u202f908(c)(5)(A) , substituted “active conduct of a” for “conduct of an active”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1222(a)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of this subpart, the term ‘controlled foreign corporation’ means any foreign corporation of which more than 50 percent of the total combined voting power of all classes of stock entitled to vote is owned (within the meaning of section 958(a)), or is considered as owned by applying the rules of ownership of section 958(b), by United States shareholders on any day during the taxable year of such foreign corporation.”\nSubsec. (b).  Pub. L. 99–514, §\u202f1222(a)(2) , inserted “(or more than 25 percent of the total value of stock)”.\nPub. L. 99–514, §\u202f1221(b)(3)(C) , substituted “insurance income” for “income derived from insurance of United States risks”.\nSubsec. (c).  Pub. L. 99–514, §\u202f1273(a) , added par. (2) and concluding provisions and struck out former pars. (2) and (3) which read as follows:\n“(2) with respect to a corporation organized under the laws of the Virgin Islands, such term does not include an individual who is a bona fide resident of the Virgin Islands and whose income tax obligation under this subtitle for the taxable year is satisfied pursuant to section 28(a) of the Revised Organic Act of the Virgin Islands, approved  July 22, 1954  ( 48 U.S.C. 1642 ), by paying tax on income derived from all sources both within and outside the Virgin Islands into the treasury of the Virgin Islands, and\n“(3) with respect to a corporation organized under the laws of any other possession of the United States, such term does not include an individual who is a bona fide resident of any such other possession and whose income derived from sources within possessions of the United States is not, by reason of section 931(a), includible in gross income under this subtitle for the taxable year.”\nPub. L. 99–514, §\u202f1224(a) , redesignated subsec. (d) as (c) and struck out former subsec. (c) which provided circumstances under which for purposes of this subpart, the term “controlled foreign corporation” would not include certain corporations created or organized in Puerto Rico or a possession of the United States or under the laws of Puerto Rico or a possession of the United States.\nSubsec. (d).  Pub. L. 99–514, §\u202f1224(a) , redesignated subsec. (d) as (c).\n1976—Subsec. (c)  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , see  section 14101(f) of Pub. L. 115–97 , set out as an Effective Date note under  section 245A of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years ending after  Oct. 22, 2004 , see  section 908(d)(1) of Pub. L. 108–357 , set out as an Effective Date note under  section 937 of this title .\nAmendment by  section 1221(b)(3)(C) of Pub. L. 99–514  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1221(g) of Pub. L. 99–514 , set out as a note under  section 954 of this title .\nPub. L. 99–514, title XII, §\u202f1222(c) ,  Oct. 22, 1986 ,  100 Stat. 2557 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 552 of this title ] shall apply to taxable years of foreign corporations beginning after  December 31, 1986 ; except that for purposes of applying sections 951(a)(1)(B) and 956 of the Internal Revenue Code of 1986, such amendments shall take effect on  August 16, 1986 . \n \n “(2)   Transitional rule .— In the case of any corporation treated as a controlled foreign corporation by reason of the amendments made by this section, property acquired before  August 16, 1986 , shall not be taken into account under section 956(b) of the Internal Revenue Code of 1986. \n \n “(3)   Special rule for beneficiary of trust .— In the case of an individual— “(A)  who is a beneficiary of a trust which was established on  December 7, 1979 , under the laws of a foreign jurisdiction, and \n \n “(B)  who was not a citizen or resident of the United States on the date the trust was established, \n \n\n amounts which are included in the gross income of such beneficiary under section 951(a) of the Internal Revenue Code of 1986 with respect to stock held by the trust (and treated as distributed to the trust) shall be treated as the first amounts which are distributed by the trust to such beneficiary and as amounts to which section 959(a) of such Code applies.”\nPub. L. 99–514, title XII, §\u202f1224(b) ,  Oct. 22, 1986 ,  100 Stat. 2558 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 1986 ; except that for purposes of applying sections 951(a)(1)(B) and 956 of the Internal Revenue Code of 1986, such amendments shall take effect on  August 16, 1986 . \n \n “(2)   Transitional rule .— In the case of any corporation treated as a controlled foreign corporation by reason of the amendment made by subsection (a), property acquired before  August 16, 1986 , shall not be taken into account under section 956(b) of the Internal Revenue Code of 1986.”\nAmendment by  section 1273(a) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of subparagraph (B) of paragraph (1), stock owned, directly or indirectly, by or for a foreign corporation, foreign partnership, or foreign trust or foreign estate (within the meaning of section 7701(a)(31)) shall be considered as being owned proportionately by its shareholders, partners, or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person.\nFor purposes of applying paragraph (1) in the case of a foreign mutual insurance company, the term “stock” shall include any certificate entitling the holder to voting power in the corporation.\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f14301(c)(31) , substituted “960” for “960(a)(1)” in introductory provisions.\nSubsec. (b).  Pub. L. 115–97, §\u202f14213(a)(2) , substituted “Paragraph (1)” for “Paragraphs (1) and (4)” in concluding provisions.\nSubsec. (b)(4).  Pub. L. 115–97, §\u202f14213(a)(1) , struck out par. (4) which read as follows: “Subparagraphs (A), (B), and (C) of section 318(a)(3) shall not be applied so as to consider a United States person as owning stock which is owned by a person who is not a United States person.”\n1996—Subsec. (a)(1).  Pub. L. 104–188, §\u202f1704(t)(7) , substituted “section 960(a)(1)” for “sections 955(b)(1)(A) and (B), 955(c)(2)(A)(ii), and 960(a)(1)” in introductory provisions.\nSubsec. (b).  Pub. L. 104–188, §\u202f1703(i)(4) , substituted “956(c)(2)” for “956(b)(2)” wherever appearing in introductory and closing provisions.\n1976—Subsec. (b).  Pub. L. 94–455  inserted “956(b)(2)” after “purposes of sections 951(b), 954(d)(3),”, “to treat the stock of a domestic corporation as owned by a United States shareholder of the controlled foreign corporation for purposes of section 956(b)(2)” after “meaning of section 954(d)(3)” and “Paragraphs (1) and (4) shall not apply for purposes of section 956(b)(2) to treat stock of a domestic corporation as not owned by a United States shareholder” following subpar. (4).\n1964—Subsec. (b).  Pub. L. 88–554  redesignated pars. (4) and (5) as (3) and (4), respectively, struck out former par. (3) which related to ownership of stock by a partnership, estate, trust, or corporation for purposes of applying first sentence of subpars. (A) and (B), and subpar. (C)(i) of  section 318(a)(2) of this title , and made amendments throughout subsec. (b) to conform to changes made in  section 318 of this title  by  Pub. L. 88–554 .\nPub. L. 115–97, title I, §\u202f14213(b) ,  Dec. 22, 2017 ,  131 Stat. 2217 , provided that:  \n “The amendments made by this section [amending this section] shall apply to— \n “(1)  the last taxable year of foreign corporations beginning before  January 1, 2018 , and each subsequent taxable year of such foreign corporations, and \n \n “(2)  taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.”\nAmendment by  section 14301(c)(31) of Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  section 1703(i)(4) of Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  Pub. L. 94–455  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1975 , and to taxable years of United States shareholders within which or with which such taxable years of such corporations end, see  section 1021(c) of Pub. L. 94–455 , set out as a note under  section 956 of this title .\nAmendment by  Pub. L. 88–554  effective  Aug. 31, 1964 , except that for purposes of sections 302 and 304 of this title, such amendments shall not apply to distributions in payment for stock acquisitions or redemptions, if such acquisitions or redemptions occurred before  Aug. 31, 1964 , see  section 4(c) of Pub. L. 88–554 , set out as a note under  section 318 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of section 951(a), the earnings and profits of a controlled foreign corporation attributable to amounts which are, or have been, included in the gross income of a United States shareholder under section 951(a), shall not, when distributed through a chain of ownership described under section 958(a), be also included in the gross income of another controlled foreign corporation in such chain for purposes of the application of section 951(a) to such other controlled foreign corporation with respect to such United States shareholder (or to any other United States shareholder who acquires from any person any portion of the interest of such United States shareholder in the controlled foreign corporation, but only to the extent of such portion, and subject to such proof of identity of such interest as the Secretary may prescribe by regulations).\nAny distribution excluded from gross income under subsection (a) shall be treated, for purposes of this chapter, as a distribution which is not a dividend; except that such distributions shall immediately reduce earnings and profits.\nFor purposes of this section and section 960(c), any amount included in the gross income of any person as a dividend by reason of subsection (a) or (f) of section 1248 shall be treated as an amount included in the gross income of such person (or, in any case to which section 1248(e) applies, of the domestic corporation referred to in section 1248(e)(2)) under section 951(a)(1)(A).\nFor purposes of this section, amounts that would be included under subparagraph (B) of section 951(a)(1) (determined without regard to this section) shall be treated as attributable first to earnings described in subsection (c)(2), and then to earnings described in subsection (c)(3).\nIn applying this section, actual distributions shall be taken into account before amounts that would be included under section 951(a)(1)(B) (determined without regard to this section).\nThe date of the enactment of the Small Business Job Protection Act of 1996, referred to in subsec. (c), is the date of enactment of  Pub. L. 104–188 , which was approved  Aug. 20, 1996 .\n2017—Subsec. (d).  Pub. L. 115–97, §\u202f14301(c)(32) , substituted “Any” for “Except as provided in section 960(a)(3), any”.\nSubsec. (e).  Pub. L. 115–97, §\u202f14301(c)(33) , substituted “section 960(c)” for “section 960(b)”.\n1996—Subsec. (a).  Pub. L. 104–188, §\u202f1501(b)(4) , (5), substituted “paragraph (2)” for “paragraphs (2) and (3)” in closing provisions, inserted “or” at end of par. (1), struck out “or” at end of par. (2), and struck out par. (3) which read as follows: “such amounts would, but for this subsection, be included under section 951(a)(1)(C) in the gross income of,”.\nSubsec. (c).  Pub. L. 104–188, §\u202f1501(b)(6) , inserted at end “References in this subsection to section 951(a)(1)(C) and subsection (a)(3) shall be treated as references to such provisions as in effect on the day before the date of the enactment of the Small Business Job Protection Act of 1996.”\nSubsec. (f)(1).  Pub. L. 104–188, §\u202f1501(b)(7) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this section—\n“(A) amounts that would be included under subparagraph (B) of section 951(a)(1) (determined without regard to this section) shall be treated as attributable first to earnings described in subsection (c)(2), and then to earnings described in subsection (c)(3), and\n“(B) amounts that would be included under subparagraph (C) of section 951(a)(1) (determined without regard to this section) shall be treated as attributable first to earnings described in subsection (c)(2) to the extent the earnings so described were accumulated in taxable years beginning after  September 30, 1993 , and then to earnings described in subsection (c)(3).”\nSubsec. (f)(2).  Pub. L. 104–188, §\u202f1501(b)(8) , substituted “section 951(a)(1)(B)” for “subparagraphs (B) and (C) of section 951(a)(1)”.\n1993—Subsec. (a).  Pub. L. 103–66, §\u202f13231(c)(2)(A) , (4)(A), substituted in introductory provisions “earnings and profits” for “earnings and profits for taxable year” and inserted at end of closing provisions “The rules of subsection (c) shall apply for purposes of paragraph (1) of this subsection and the rules of subsection (f) shall apply for purposes of paragraphs (2) and (3) of this subsection.”\nSubsec. (a)(3).  Pub. L. 103–66, §\u202f13231(c)(1) , added par. (3).\nSubsec. (b).  Pub. L. 103–66, §\u202f13231(c)(4)(A) , substituted “earnings and profits” for “earnings and profits for a taxable year”.\nSubsec. (c)(1).  Pub. L. 103–66, §\u202f13231(c)(2)(C) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “first to earnings and profits attributable to amounts included in gross income under section 951(a)(1)(B) (or which would have been included except for subsection (a)(2) of this section),”.\nSubsec. (c)(2).  Pub. L. 103–66, §\u202f13231(c)(4)(B) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “then to earnings and profits attributable to amounts included in gross income under section 951(a)(1)(A) (but reduced by amounts not included under section 951(a)(1)(B) because of the exclusion in subsection (a)(2) of this section), and”.\nSubsec. (f).  Pub. L. 103–66, §\u202f13231(c)(2)(B) , added subsec. (f).\n1988—Subsec. (e).  Pub. L. 100–647  substituted “such person (or, in any case to which section 1248(e) applies, of the domestic corporation referred to in section 1248(e)(2)) under” for “such person under”.\n1986—Subsec. (d).  Pub. L. 99–514  inserted “;\u2000except that such distributions shall immediately reduce earnings and profits”.\n1984—Subsec. (e).  Pub. L. 98–369  added subsec. (e).\n1976—Subsecs. (a), (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end, see  section 1501(d) of Pub. L. 104–188 , set out as a note under  section 904 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years of foreign corporations beginning after  Sept. 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 13231(e) of Pub. L. 103–66 , set out as a note under  section 951 of this title .\nPub. L. 100–647, title I, §\u202f1012(bb)(7)(B) ,  Nov. 10, 1988 ,  102 Stat. 3536 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply in the case of transactions to which section 1248(e) of the 1986 Code applies and which occur after  December 31, 1986 .”\nPub. L. 99–514, title XII, §\u202f1226(c)(2) ,  Oct. 22, 1986 ,  100 Stat. 2560 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 98–369, div. A, title I, §\u202f133(d)(2) , (3),  July 18, 1984 ,  98 Stat. 668 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1810(i)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2829;  Pub. L. 100–647, title I, §\u202f1018(g)(2) ,  Nov. 10, 1988 ,  102 Stat. 3582 , provided that: \n “(2)   Subsections  (b)  and  (c).— Except as provided in paragraph (3), the amendments made by subsections (b) and (c) [amending this section and  section 1248 of this title ] shall apply with respect to transactions to which subsection (a) or (f) of section 1248 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies occurring after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(3)   Election of earlier date for certain transactions.— “(A)   In general .— If the appropriate election is made under subparagraph (B), the amendments made by subsection (b) [amending this section and  section 1248 of this title ] shall apply with respect to transactions to which subsection (a) or (f) of section 1248 of such Code applies occurring after  October 9, 1975 . \n \n “(B)   Election.— “(i)  Subparagraph (A) shall apply with respect to transactions to which subsection (a) of section 1248 of such Code applies if the foreign corporation described in such subsection (or its successor in interest) so elects. \n \n “(ii)  Subparagraph (A) shall apply with respect to transactions to which subsection (f) of section 1248 of such Code applies if the domestic corporation described in section 1248(f)(1) of such Code (or its successor) so elects. \n \n “(iii)  Any election under clause (i) or (ii) shall be made not later than the date which is 1 year after the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ] and shall be made in such manner as the Secretary of the Treasury or his delegate shall prescribe.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of subpart A of this part, if there is included in the gross income of a domestic corporation any item of income under section 951(a)(1) with respect to any controlled foreign corporation with respect to which such domestic corporation is a United States shareholder, such domestic corporation shall be deemed to have paid so much of such foreign corporation’s foreign income taxes as are properly attributable to such item of income.\nEach taxpayer meeting the requirements of paragraph (1)(A) shall establish an excess limitation account. The opening balance of such account shall be zero.\nFor each taxable year beginning after  September 30, 1993 , for which the limitation under section 904 was increased under paragraph (1), the taxpayer shall reduce the amount in the excess limitation account by the amount of such increase.\nIf the taxpayer receives a distribution or amount in a taxable year beginning after  September 30, 1993 , which is excluded from gross income under section 959(a) and is attributable to any amount included in gross income under section 951(a) for a taxable year beginning before  October 1, 1993 , the limitation under section 904 for the taxable year in which such amount or distribution is received shall be increased by the amount determined under this subsection as in effect on the day before the date of the enactment of the Revenue Reconcilation\u202f 2 2 \u202fSo in original. Probably should be “Reconciliation”.  Act of 1993.\nIf an increase in the limitation under this subsection exceeds the tax imposed by this chapter for such year, the amount of such excess shall be deemed an overpayment of tax for such year.\nFor purposes of paragraph (1), the term “tested foreign income taxes” means, with respect to any domestic corporation which is a United States shareholder of a controlled foreign corporation, the foreign income taxes paid or accrued by such foreign corporation which are properly attributable to the tested income of such foreign corporation taken into account by such domestic corporation under section 951A.\nThe term “foreign income taxes” means any income, war profits, or excess profits taxes paid or accrued to any foreign country or possession of the United States.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section.\nThe date of the enactment of the Revenue Reconciliation Act of 1993, referred to in subsec. (c)(3), is the date of enactment of  Pub. L. 103–66 , which was approved  Aug. 10, 1993 .\n2017— Pub. L. 115–97, §\u202f14301(b)(1) , substituted “Deemed paid credit for subpart F inclusions” for “Special rules for foreign tax credit” in section catchline.\nSubsecs. (a) to (c).  Pub. L. 115–97, §\u202f14301(b)(1) , added subsecs. (a) and (b), redesignated former subsec. (b) as (c), and struck out former subsecs. (a) and (c) which related to taxes paid by a foreign corporation and limitation with respect to section 956 inclusions, respectively.\nSubsec. (d).  Pub. L. 115–97, §\u202f14201(b)(1) , added subsec. (d).\nSubsecs. (e), (f).  Pub. L. 115–97, §\u202f14301(b)(2) , added subsecs. (e) and (f).\n2010—Subsec. (c).  Pub. L. 111–226  added subsec. (c).\n1997—Subsec. (a)(1).  Pub. L. 105–34  amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “For purposes of subpart A of this part, if there is included, under section 951(a), in the gross income of a domestic corporation any amount attributable to earnings and profits—\n“(A) of a foreign corporation (hereafter in this subsection referred to as the ‘first foreign corporation’) at least 10 percent of the voting stock of which is owned by such domestic corporation, or\n“(B) of a second foreign corporation (hereinafter in this subsection referred to as the ‘second foreign corporation’) at least 10 percent of the voting stock of which is owned by the first foreign corporation, or\n“(C) of a third foreign corporation (hereinafter in this subsection referred to as the ‘third foreign corporation’) at least 10 percent of the voting stock of which is owned by the second foreign corporation,\nthen, except to the extent provided in regulations, such domestic corporation shall be deemed to have paid a portion of such foreign corporation’s post-1986 foreign income taxes determined under section 902 in the same manner as if the amount so included were a dividend paid by such foreign corporation (determined by applying section 902(c) in accordance with section 904(d)(3)(B)). This paragraph shall not apply with respect to any amount included in the gross income of such domestic corporation attributable to earnings and profits of the second foreign corporation or of the third foreign corporation unless, in the case of the second foreign corporation, the percentage-of-voting-stock requirement of section 902(b)(3)(A) is satisfied, and in the case of the third foreign corporation, the percentage-of-voting-stock requirement of section 902(b)(3)(B) is satisfied.”\n1993—Subsec. (b).  Pub. L. 103–66  added pars. (1) to (3), redesignated former pars. (3) and (4) as (4) and (5), respectively, and struck out former par. (1) relating to increase in section 904 limitation and former par. (2) relating to the amount of increase.\n1986—Subsec. (a)(1).  Pub. L. 99–514  substituted “then, except to the extent provided in regulations, such domestic corporation shall be deemed to have paid a portion of such foreign corporation’s post-1986 foreign income taxes determined under section 902 in the same manner as if the amount so included were a dividend paid by such foreign corporation (determined by applying section 902(c) in accordance with section 904(d)(3)(B))” for “then, under regulations prescribed by the Secretary, such domestic corporation shall be deemed to have paid the same proportion of the total income, war profits, and excess profits taxes paid (or deemed paid) by such foreign corporation to a foreign country or possession of the United States for the taxable year on or with respect to the earnings and profits of such foreign corporation which the amount of earnings and profits of such foreign corporation so included in gross income of the domestic corporation bears to the entire amount of the earnings and profits of such corporation for such taxable year”.\n1976—Subsec. (a)(1).  Pub. L. 94–455 , §§\u202f1033(b)(2), 1037(a), substituted “bears to the entire amount of the earnings and profits of such foreign corporation for such taxable year” for “bears to–” after “gross income of the domestic corporation”, struck out subpars. (C) and (D) relating to corporations which are and are not less developed country corporations, inserted in subpar. (A) “(hereafter in this subsection referred to as the ‘first foreign corporation’)” after “foreign corporation”, substituted in subpar. (B) “of a second foreign corporation (hereinafter in this subsection referred to as the ‘second foreign corporation’) at least 10 percent of the voting stock of which is owned by the first foreign corporation, or” for “of a foreign corporation at least 50 percent of the voting stock of which is owned by a foreign corporation at least 10 percent of the voting stock of which in turn owned by such domestic corporation” after “(B)”, added subpar. (C), and inserted at end “This paragraph shall not apply with respect to any amount included in the gross income of such domestic corporation attributable to earning and profits of the second foreign corporation or of the third foreign corporation unless, in the case of the second foreign corporation, the percentage-of-voting-stock requirement of section 902(b)(3)(A) is satisfied, and in the case of the third foreign corporation, the percentage-of-voting-stock requirement of section 902(b)(3)(B) is satisfied.”\nSubsec. (b).  Pub. L. 94–455, §\u202f1031(b)(1) , struck out “applicable” in par. (1) after “amount, the”, in par. (2) after “increase of the”, and in subpar. (A) of par. (2) after “by which the”.\nAmendment by  section 14201(b)(1) of Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14201(d) of Pub. L. 115–97 , set out as a note under  section 904 of this title .\nAmendment by  section 14301(b) of Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nPub. L. 111–226, title II, §\u202f214(b) ,  Aug. 10, 2010 ,  124 Stat. 2399 , provided that:  “The amendment made by this section [amending this section] shall apply to acquisitions of United States property (as defined in section 956(c) of the Internal Revenue Code of 1986) after  December 31, 2010 .”\nPub. L. 105–34, title XI, §\u202f1113(c) ,  Aug. 5, 1997 ,  111 Stat. 971 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 902 of this title ] shall apply to taxes of foreign corporations for taxable years of such corporations beginning after the date of enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Special rule .— In the case of any chain of foreign corporations described in clauses (i) and (ii) of [former] section 902(b)(2)(B) of the Internal Revenue Code of 1986 (as amended by this section), no liquidation, reorganization, or similar transaction in a taxable year beginning after the date of the enactment of this Act shall have the effect of permitting taxes to be taken into account under section 902 of the Internal Revenue Code of 1986 which could not have been taken into account under such section but for such transaction.”\nPub. L. 103–66, title XIII, §\u202f13233(b)(2) ,  Aug. 10, 1993 ,  107 Stat. 504 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after  September 30, 1993 .”\nPub. L. 99–514, title XII, §\u202f1202(e) ,  Oct. 22, 1986 ,  100 Stat. 2531 , provided that:  “The amendments made by this section [amending this section and sections 902 and 6038 of this title] shall apply to distributions by foreign corporations out of, and to inclusions under section 951(a) of the Internal Revenue Code of 1986 attributable to, earnings and profits for taxable years beginning after  December 31, 1986 .”\nAmendment by  section 1031(b)(1) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 1031(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nPub. L. 94–455, title X, §\u202f1033(c) ,  Oct. 4, 1976 ,  90 Stat. 1628 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “The amendments made by this section [amending this section and sections 78, 535, 545, and 902 of this title] shall apply— “(1)  in respect of any distribution received by a domestic corporation after  December 31, 1977 , and \n \n “(2)  in respect of any distribution received by a domestic corporation before  January 1, 1978 , in a taxable year of such corporation beginning after  December 31, 1975 , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after  December 31, 1975 . \n \n\n For purposes of paragraph (2), a distribution made by a foreign corporation out of its profits which are attributable to a distribution received from a foreign corporation to which [former] section 902(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies shall be treated as made out of the accumulated profits of a foreign corporation for a taxable year beginning before  January 1, 1976 , to the extent that such distribution was paid out of the accumulated profits of such foreign corporation for a taxable year beginning before  January 1, 1976 .”\nPub. L. 94–455, title X, §\u202f1037(b) ,  Oct. 4, 1976 ,  90 Stat. 1634 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to earnings and profits of a foreign corporation, included, under section 951(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], in the gross income of a domestic corporation in taxable years beginning after  December 31, 1976 .”\nPub. L. 100–647, title I, §\u202f1012(b)(3) ,  Nov. 10, 1988 ,  102 Stat. 3496 , provided that:  “For purposes of sections [former] 902 and 960 of the 1986 Code, the increase in earnings and profits of any foreign corporation under section 1023(e)(3)(C) of the Reform Act [ Pub. L. 99–514 , set out as an Effective Date note under  section 846 of this title ] shall be taken into account ratably over the 10-year period beginning with the corporation’s first taxable year beginning after  December 31, 1986 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Under regulations prescribed by the Secretary, the basis of a United States shareholder’s stock in a controlled foreign corporation, and the basis of property of a United States shareholder by reason of which he is considered under section 958(a)(2) as owning stock of a controlled foreign corporation, shall be increased by the amount required to be included in his gross income under section 951(a) with respect to such stock or with respect to such property, as the case may be, but only to the extent to which such amount was included in the gross income of such United States shareholder. In the case of a United States shareholder who has made an election under section 962 for the taxable year, the increase in basis provided by this subsection shall not exceed an amount equal to the amount of tax paid under this chapter with respect to the amounts required to be included in his gross income under section 951(a).\nUnder regulations prescribed by the Secretary, the adjusted basis of stock or other property with respect to which a United States shareholder or a United States person receives an amount which is excluded from gross income under section 959(a) shall be reduced by the amount so excluded. In the case of a United States shareholder who has made an election under section 962 for any prior taxable year, the reduction in basis provided by this paragraph shall not exceed an amount equal to the amount received which is excluded from gross income under section 959(a) after the application of section 962(d).\nTo the extent that an amount excluded from gross income under section 959(a) exceeds the adjusted basis of the stock or other property with respect to which it is received, the amount shall be treated as gain from the sale or exchange of property.\nIf a domestic corporation received a dividend from a specified 10-percent owned foreign corporation (as defined in section 245A) in any taxable year, solely for purposes of determining loss on any disposition of stock of such foreign corporation in such taxable year or any subsequent taxable year, the basis of such domestic corporation in such stock shall be reduced (but not below zero) by the amount of any deduction allowable to such domestic corporation under section 245A with respect to such stock except to the extent such basis was reduced under section 1059 by reason of a dividend for which such a deduction was allowable.\n2017—Subsec. (d).  Pub. L. 115–97  added subsec. (d).\n2005—Subsec. (c).  Pub. L. 109–135  amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “Under regulations prescribed by the Secretary, if a United States shareholder is treated under section 958(a)(2) as owning any stock in a controlled foreign corporation which is actually owned by another controlled foreign corporation, adjustments similar to the adjustments provided by subsections (a) and (b) shall be made to the basis of such stock in the hands of such other controlled foreign corporation, but only for the purposes of determining the amount included under section 951 in the gross income of such United States shareholder (or any other United States shareholder who acquires from any person any portion of the interest of such United States shareholder by reason of which such shareholder was treated as owning such stock, but only to the extent of such portion, and subject to such proof of identity of such interest as the Secretary may prescribe by regulations).”\n1997—Subsec. (c).  Pub. L. 105–34  added subsec. (c).\n1976—Subsecs. (a), (b)(1).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 115–97, title I, §\u202f14102(b)(2) ,  Dec. 22, 2017 ,  131 Stat. 2192 , provided that:  “The amendments made by this subsection [amending this section] shall apply to distributions made after  December 31, 2017 .”\nPub. L. 109–135, title IV, §\u202f409(d) ,  Dec. 21, 2005 ,  119 Stat. 2636 , provided that:  “The amendments made by this section [amending this section and sections 6038B, 6411, and 6601 of this title] shall take effect as if included in the provisions of the Taxpayer Relief Act of 1997 [ Pub. L. 105–34 ] to which they relate.”\nPub. L. 105–34, title XI, §\u202f1112(b)(2) ,  Aug. 5, 1997 ,  111 Stat. 969 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply for purposes of determining inclusions for taxable years of United States shareholders beginning after  December 31, 1997 .”\nBasis adjustments of this section not applicable in certain circumstances involving dual resident companies, see  section 6126 of Pub. L. 100–647 , set out as a note under  section 1502 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'An election to have the provisions of this section apply for any taxable year shall be made by a United States shareholder at such time and in such manner as the Secretary shall prescribe by regulations. An election made for any taxable year may not be revoked except with the consent of the Secretary.\nFor purposes of applying subsection (a)(1), the amount in each taxable income bracket in the tax table in section 11(b) shall not exceed an amount which bears the same ratio to such bracket amount as the amount included in the gross income of the United States shareholder under section 951(a) for the taxable year bears to such shareholder’s pro rata share of the earnings and profits for the taxable year of all controlled foreign corporations with respect to which such shareholder includes any amount in gross income under section 951(a).\nThe earnings and profits of a foreign corporation attributable to amounts which were included in the gross income of a United States shareholder under section 951(a) and with respect to which an election under this section applied shall, when such earnings and profits are distributed, notwithstanding the provisions of section 959(a)(1), be included in gross income to the extent that such earnings and profits so distributed exceed the amount of tax paid under this chapter on the amounts to which such election applied.\nSection 960, referred to in subsec. (a)(2), was amended extensively by  Pub. L. 115–97 , and, as so amended, relates to deemed paid credit for subpart F inclusions.\n2017—Subsec. (a)(1).  Pub. L. 115–97  substituted “section 11” for “sections 11 and 55”.\n1988—Subsec. (a)(1).  Pub. L. 100–647  substituted “sections 1 and 55” and “sections 11 and 55” for “section 1” and “section 11”, respectively.\n1978—Subsec. (c).  Pub. L. 95–600  substituted provisions relating to the pro ration of each section 11 bracket amount for provisions relating to the surtax exemption.\n1976—Subsecs. (a), (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\n1975—Subsec. (c).  Pub. L. 94–164  substituted “same ratio to the surtax exemption” for “same ratio to $25,000” in subsec. (c) as such subsec. (c) is in effect for taxable years ending after  Dec. 31, 1975 .\nPub. L. 94–12  substituted “$50,000” for “$25,000”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 94–164  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 4(e) of Pub. L. 94–164 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 94–12  applicable to taxable years ending after  Dec. 31, 1974 , but to cease to apply for taxable years ending after  Dec. 31, 1975 , see  section 305(b)(1) of Pub. L. 94–12 , set out as a note under  section 11 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section, added  Pub. L. 87–834, §\u202f12(a) ,  Oct. 16, 1962 ,  76 Stat. 1023 ; amended  Pub. L. 88–272, title I, §\u202f123(b) ,  Feb. 26, 1964 ,  78 Stat. 29 ;  Pub. L. 90–364, title I, §\u202f102(b) ,  June 28, 1968 ,  82 Stat. 255 ;  Pub. L. 91–53, §\u202f5(b) ,  Aug. 7, 1969 ,  83 Stat. 95 ;  Pub. L. 91–172, title VII, §\u202f701(b) ,  Dec. 30, 1969 ,  83 Stat. 659 , dealt with the receipt of minimum distributions by domestic corporations.\nRepeal effective with respect to taxable years for foreign corporations beginning after  Dec. 31, 1975 , and to taxable years of United States shareholders (within the meaning of  section 951(b) of this title ) within which or with which such taxable years of such foreign corporations end, see  section 602(f) of Pub. L. 94–12 , set out as an Effective Date note under  section 954 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Except as provided in section 312(k)(4), for purposes of this subpart, the earnings and profits of any foreign corporation, and the deficit in earnings and profits of any foreign corporation, for any taxable year shall be determined according to rules substantially similar to those applicable to domestic corporations, under regulations prescribed by the Secretary. In determining such earnings and profits, or the deficit in such earnings and profits, the amount of any illegal bribe, kickback, or other payment (within the meaning of section 162(c)) shall not be taken into account to decrease such earnings and profits or to increase such deficit. The payments referred to in the preceding sentence are payments which would be unlawful under the Foreign Corrupt Practices Act of 1977 if the payor were a United States person.\nUnder regulations prescribed by the Secretary, no part of the earnings and profits of a controlled foreign corporation for any taxable year shall be included in earnings and profits for purposes of sections 952 and 956, if it is established to the satisfaction of the Secretary that such part could not have been distributed by the controlled foreign corporation to United States shareholders who own (within the meaning of section 958(a)) stock of such controlled foreign corporation because of currency or other restrictions or limitations imposed under the laws of any foreign country.\nThe Secretary may by regulations require each person who is, or has been, a United States shareholder of a controlled foreign corporation to maintain such records and accounts as may be prescribed by such regulations as necessary to carry out the provisions of this subpart and subpart G.\nWhere, but for this paragraph, two or more United States persons would be required to maintain or furnish the same records and accounts as may by regulations be required under paragraph (1) with respect to the same controlled foreign corporation for the same period, the Secretary may by regulations provide that the maintenance or furnishing of such records and accounts by only one such person shall satisfy the requirements of paragraph (1) for such other persons.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.\nIf a controlled foreign corporation sells or exchanges stock in any other foreign corporation, gain recognized on such sale or exchange shall be included in the gross income of such controlled foreign corporation as a dividend to the same extent that it would have been so included under section 1248(a) if such controlled foreign corporation were a United States person. For purposes of determining the amount which would have been so includible, the determination of whether such other foreign corporation was a controlled foreign corporation shall be made without regard to the preceding sentence.\nClause (i) of section 954(c)(3)(A) shall not apply to any amount treated as a dividend by reason of paragraph (1).\nFor purposes of this subsection, a controlled foreign corporation shall be treated as having sold or exchanged any stock if, under any provision of this subtitle, such controlled foreign corporation is treated as having gain from the sale or exchange of such stock.\nFor purposes of this title, in the case of a sale or exchange by a controlled foreign corporation of stock in another foreign corporation in a taxable year of the selling controlled foreign corporation beginning after  December 31, 2017 , rules similar to the rules of section 961(d) shall apply.\nFor purposes of this paragraph, the foreign-source portion of any amount treated as a dividend under paragraph (1) shall be determined in the same manner as under section 245A(c).\nThe Foreign Corrupt Practices Act of 1977, referred to in subsec. (a), is title I of  Pub. L. 95–213 ,  Dec. 19, 1977 ,  91 Stat. 1494 , which enacted sections 78dd–1 to 78dd–3 of Title 15, Commerce and Trade, and amended sections 78m and 78ff of Title 15. For complete classification of this Act to the Code, see Short Title of 1977 Amendment note set out under  section 78a of Title 15  and Tables.\n2017—Subsec. (b).  Pub. L. 115–97, §\u202f14212(b)(4) , struck out “,\u2000955,” after “sections 952”.\nSubsec. (e)(4).  Pub. L. 115–97, §\u202f14102(c)(1) , added par. (4).\n1997—Subsec. (e).  Pub. L. 105–34  added subsec. (e).\n1988—Subsec. (d).  Pub. L. 100–647  added subsec. (d).\n1982—Subsec. (a).  Pub. L. 97–248  inserted provision that payments referred to in sentence beginning “In determining such earnings and profits” are payments which would be unlawful under the Foreign Corrupt Practices Act of 1977 if the payor were a United States person.\n1981—Subsec. (a).  Pub. L. 97–34  substituted “section 312(k)(4)” for “section 312(k)(3)”.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1065(b), 1901(b)(32)(B)(ii), 1906(b)(13)(A), struck out “or his delegate” after “Secretary”, inserted second sentence, and substituted “312(k)(3)” for “312(m)(3)” after “provided in section”.\nSubsecs. (b), (c)(1), (2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” whenever appearing.\n1969—Subsec. (a).  Pub. L. 91–172  inserted reference to the exception provided for in section 312(m)(3).\nPub. L. 115–97, title I, §\u202f14102(c)(2) ,  Dec. 22, 2017 ,  131 Stat. 2193 , provided that:  “The amendments made by this subsection [amending this section] shall apply to sales or exchanges after  December 31, 2017 .”\nAmendment by  section 14212(b)(4) of Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14212(c) of Pub. L. 115–97 , set out as a note under  section 851 of this title .\nPub. L. 105–34, title XI, §\u202f1111(c)(1) ,  Aug. 5, 1997 ,  111 Stat. 969 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to gain recognized on transactions occurring after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 100–647, title VI, §\u202f6129(b) ,  Nov. 10, 1988 ,  102 Stat. 3716 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years of foreign corporations beginning after  December 31, 1988 .”\nAmendment by  Pub. L. 97–248  applicable to payments made after  Sept. 3, 1982 , see  section 288(c) of Pub. L. 97–248 , set out as a note under  section 162 of this title .\nAmendment by  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 1065(b) of Pub. L. 94–455  applicable to payments described in  section 162(c) of this title  made more than 30 days after  Oct. 4, 1976 , see  section 1066(b) of Pub. L. 94–455 , set out as a note under  section 952 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'In the case of a taxpayer which is a United States shareholder with respect to at least one deferred foreign income corporation and at least one E&P deficit foreign corporation, the amount which would (but for this subsection) be taken into account under section 951(a)(1) by reason of subsection (a) as such United States shareholder’s pro rata share of the subpart F income of each deferred foreign income corporation shall be reduced by the amount of such United States shareholder’s aggregate foreign E&P deficit which is allocated under paragraph (2) to such deferred foreign income corporation.\nThe term “specified E&P deficit” means, with respect to any E&P deficit foreign corporation, the amount of the deficit referred to in subparagraph (B).\nFor purposes of applying section 959 in any taxable year beginning with the taxable year described in subsection (a), with respect to any United States shareholder of a deferred foreign income corporation, an amount equal to such shareholder’s reduction under paragraph (1) which is allocated to such deferred foreign income corporation under this subsection shall be treated as an amount which was included in the gross income of such United States shareholder under section 951(a).\nFor purposes of this title, with respect to any taxable year beginning with the taxable year described in subsection (a), a United States shareholder’s pro rata share of the earnings and profits of any E&P deficit foreign corporation under this subsection shall be increased by the amount of the specified E&P deficit of such corporation taken into account by such shareholder under paragraph (1), and, for purposes of section 952, such increase shall be attributable to the same activity to which the deficit so taken into account was attributable.\nIn the case of any affiliated group which includes at least one E&P net surplus shareholder and one E&P net deficit shareholder, the amount which would (but for this paragraph) be taken into account under section 951(a)(1) by reason of subsection (a) by each such E&P net surplus shareholder shall be reduced (but not below zero) by such shareholder’s applicable share of the affiliated group’s aggregate unused E&P deficit.\nFor purposes of this paragraph, the term “E&P net surplus shareholder” means any United States shareholder which would (determined without regard to this paragraph) take into account an amount greater than zero under section 951(a)(1) by reason of subsection (a).\nIf the group ownership percentage of any E&P net deficit shareholder is less than 100 percent, the amount of the excess described in subparagraph (C) which is taken into account under clause (i)(I) with respect to such E&P net deficit shareholder shall be such group ownership percentage of such amount.\nFor purposes of this paragraph, the term “group ownership percentage” means, with respect to any United States shareholder in any affiliated group, the percentage of the value of the stock of such United States shareholder which is held by other includible corporations in such affiliated group. Notwithstanding the preceding sentence, the group ownership percentage of the common parent of the affiliated group is 100 percent. Any term used in this subparagraph which is also used in section 1504 shall have the same meaning as when used in such section.\nThe term “8 percent rate equivalent percentage” means, with respect to any United States shareholder for any taxable year, the percentage which would result in the amount to which such percentage applies being subject to a 8 percent rate of tax determined by only taking into account a deduction equal to such percentage of such amount and the highest rate of tax specified in section 11 for such taxable year. In the case of any taxable year of a United States shareholder to which section 15 applies, the highest rate of tax under section 11 before the effective date of the change in rates and the highest rate of tax under section 11 after the effective date of such change shall each be taken into account under the preceding sentence in the same proportions as the portion of such taxable year which is before and after such effective date, respectively.\nThe term “15.5 percent rate equivalent percentage” means, with respect to any United States shareholder for any taxable year, the percentage determined under subparagraph (A) applied by substituting “15.5 percent rate of tax” for “8 percent rate of tax”.\nCash positions of a specified foreign corporation described in clause (ii), (iii)(I), or (iii)(IV) of subparagraph (B) shall not be taken into account by a United States shareholder under subparagraph (A) to the extent that such United States shareholder demonstrates to the satisfaction of the Secretary that such amount is so taken into account by such United States shareholder with respect to another specified foreign corporation.\nAn entity (other than a corporation) shall be treated as a specified foreign corporation of a United States shareholder for purposes of determining such United States shareholder’s aggregate foreign cash position if any interest in such entity is held by a specified foreign corporation of such United States shareholder (determined after application of this subparagraph) and such entity would be a specified foreign corporation of such United States shareholder if such entity were a foreign corporation.\nIf the Secretary determines that a principal purpose of any transaction was to reduce the aggregate foreign cash position taken into account under this subsection, such transaction shall be disregarded for purposes of this subsection.\nThe term “deferred foreign income corporation” means, with respect to any United States shareholder, any specified foreign corporation of such United States shareholder which has accumulated post-1986 deferred foreign income (as of the date referred to in paragraph (1) or (2) of subsection (a)) greater than zero.\nFor purposes of sections 951 and 961, a foreign corporation described in paragraph (1)(B) shall be treated as a controlled foreign corporation solely for purposes of taking into account the subpart F income of such corporation under subsection (a) (and for purposes of applying subsection (f)).\nSuch term shall not include any corporation which is a passive foreign investment company (as defined in section 1297) with respect to the shareholder and which is not a controlled foreign corporation.\nFor purposes of this section, the determination of any United States shareholder’s pro rata share of any amount with respect to any specified foreign corporation shall be determined under rules similar to the rules of section 951(a)(2) by treating such amount in the same manner as subpart F income (and by treating such specified foreign corporation as a controlled foreign corporation).\nNo credit shall be allowed under section 901 for the applicable percentage of any taxes paid or accrued (or treated as paid or accrued) with respect to any amount for which a deduction is allowed under this section.\nNo deduction shall be allowed under this chapter for any tax for which credit is not allowable under section 901 by reason of paragraph (1) (determined by treating the taxpayer as having elected the benefits of subpart A of part III of subchapter N).\nIf an election is made under paragraph (1), the first installment shall be paid on the due date (determined without regard to any extension of time for filing the return) for the return of tax for the taxable year described in subsection (a) and each succeeding installment shall be paid on the due date (as so determined) for the return of tax for the taxable year following the taxable year with respect to which the preceding installment was made.\nIf there is an addition to tax for failure to timely pay any installment required under this subsection, a liquidation or sale of substantially all the assets of the taxpayer (including in a title 11 or similar case), a cessation of business by the taxpayer, or any similar circumstance, then the unpaid portion of all remaining installments shall be due on the date of such event (or in the case of a title 11 or similar case, the day before the petition is filed). The preceding sentence shall not apply to the sale of substantially all the assets of a taxpayer to a buyer if such buyer enters into an agreement with the Secretary under which such buyer is liable for the remaining installments due under this subsection in the same manner as if such buyer were the taxpayer.\nIf an election is made under paragraph (1) to pay the net tax liability under this section in installments and a deficiency has been assessed with respect to such net tax liability, the deficiency shall be prorated to the installments payable under paragraph (1). The part of the deficiency so prorated to any installment the date for payment of which has not arrived shall be collected at the same time as, and as a part of, such installment. The part of the deficiency so prorated to any installment the date for payment of which has arrived shall be paid upon notice and demand from the Secretary. This subsection shall not apply if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax.\nAny election under paragraph (1) shall be made not later than the due date for the return of tax for the taxable year described in subsection (a) and shall be made in such manner as the Secretary shall provide.\nThe term “net income tax” means the regular tax liability reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A.\nIn the case of any S corporation which is a United States shareholder of a deferred foreign income corporation, each shareholder of such S corporation may elect to defer payment of such shareholder’s net tax liability under this section with respect to such S corporation until the shareholder’s taxable year which includes the triggering event with respect to such liability. Any net tax liability payment of which is deferred under the preceding sentence shall be assessed on the return of tax as an addition to tax in the shareholder’s taxable year which includes such triggering event.\nIn the case of a transfer of less than all of the taxpayer’s shares of stock in the S corporation, such transfer shall only be a triggering event with respect to so much of the taxpayer’s net tax liability under this section with respect to such S corporation as is properly allocable to such stock.\nA transfer described in clause (iii) of subparagraph (A) shall not be treated as a triggering event if the transferee enters into an agreement with the Secretary under which such transferee is liable for net tax liability with respect to such stock in the same manner as if such transferee were the taxpayer.\nA shareholder’s net tax liability under this section with respect to any S corporation is the net tax liability under this section which would be determined under subsection (h)(6) if the only subpart F income taken into account by such shareholder by reason of this section were allocations from such S corporation.\nIf any shareholder of an S corporation elects to defer payment under paragraph (1), such S corporation shall be jointly and severally liable for such payment and any penalty, addition to tax, or additional amount attributable thereto.\nAny limitation on the time period for the collection of a liability deferred under this subsection shall not be treated as beginning before the date of the triggering event with respect to such liability.\nAny shareholder of an S corporation which makes an election under paragraph (1) shall report the amount of such shareholder’s deferred net tax liability on such shareholder’s return of tax for the taxable year for which such election is made and on the return of tax for each taxable year thereafter until such amount has been fully assessed on such returns.\nFor purposes of this paragraph, the term “deferred net tax liability” means, with respect to any taxable year, the amount of net tax liability payment of which has been deferred under paragraph (1) and which has not been assessed on a return of tax for any prior taxable year.\nIn the case of any failure to report any amount required to be reported under subparagraph (A) with respect to any taxable year before the due date for the return of tax for such taxable year, there shall be assessed on such return as an addition to tax 5 percent of such amount.\nEach S corporation which is a United States shareholder of a specified foreign corporation shall report in its return of tax under section 6037(a) the amount includible in its gross income for such taxable year by reason of this section and the amount of the deduction allowable by subsection (c). Any copy provided to a shareholder under section 6037(b) shall include a statement of such shareholder’s pro rata share of such amounts.\nNotwithstanding section 6501, the limitation on the time period for the assessment of the net tax liability under this section (as defined in subsection (h)(6)) shall not expire before the date that is 6 years after the return for the taxable year described in such subsection was filed.\nFor purposes of this subsection, the term “expatriated entity” has the same meaning given such term under section 7874(a)(2), except that such term shall not include an entity if the surrogate foreign corporation with respect to the entity is treated as a domestic corporation under section 7874(b).\nFor purposes of this subsection, the term “surrogate foreign corporation” has the meaning given such term in section 7874(a)(2)(B).\nAny election under paragraph (1)(B) shall be made not later than the due date for the first taxable year in the 5-taxable year period described in clause (i) of paragraph (1)(B) and shall be made in such manner as the Secretary shall provide.\nIf there is a liquidation or sale of substantially all the assets of the real estate investment trust (including in a title 11 or similar case), a cessation of business by such trust, or any similar circumstance, then any amount not yet included in gross income under paragraph (1)(B) shall be included in gross income as of the day before the date of the event and the unpaid portion of any tax liability with respect to such inclusion shall be due on the date of such event (or in the case of a title 11 or similar case, the day before the petition is filed).\nAny election under this subsection shall be made not later than the due date (including extensions) for filing the return of tax for the taxable year and shall be made in such manner as the Secretary shall prescribe.\nThe date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. ( l )(1), probably means the date of the enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\n2017— Pub. L. 115–97  amended section generally. Prior to amendment, section related to temporary dividends received deduction.\n2005—Subsec. (a)(2)(B).  Pub. L. 109–135, §\u202f403(q)(1) , inserted “from another controlled foreign corporation in such chain of ownership” before “,\u2000but only to the extent”.\nSubsec. (b)(2)(A).  Pub. L. 109–135, §\u202f403(q)(2) , inserted “cash” before “dividends”.\nSubsec. (b)(3).  Pub. L. 109–135, §\u202f403(q)(3) , inserted at end “The Secretary may prescribe such regulations as may be necessary or appropriate to prevent the avoidance of the purposes of this paragraph, including regulations which provide that cash dividends shall not be taken into account under subsection (a) to the extent such dividends are attributable to the direct or indirect transfer (including through the use of intervening entities or capital contributions) of cash or other property from a related person (as so defined) to a controlled foreign corporation.”\nSubsec. (c)(1).  Pub. L. 109–135, §\u202f403(q)(4) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The term ‘applicable financial statement’ means, with respect to a United States shareholder, the most recently audited financial statement (including notes and other documents which accompany such statement) which includes such shareholder—\n“(A) which is certified on or before  June 30, 2003 , as being prepared in accordance with generally accepted accounting principles, and\n“(B) which is used for the purposes of a statement or report—\n“(i) to creditors,\n“(ii) to shareholders, or\n“(iii) for any other substantial nontax purpose.\nIn the case of a corporation required to file a financial statement with the Securities and Exchange Commission, such term means the most recent such statement filed on or before  June 30, 2003 .”\nSubsec. (d)(2).  Pub. L. 109–135, §\u202f403(q)(5) , substituted “directly allocable” for “properly allocated and apportioned”.\nSubsec. (d)(4).  Pub. L. 109–135, §\u202f403(q)(6) , added par. (4).\nSubsec. (e)(1).  Pub. L. 109–135, §\u202f403(q)(7) , inserted “which are imposed by foreign countries and possessions of the United States and are” after “taxes” in concluding provisions.\nSubsec. (f).  Pub. L. 109–135, §\u202f403(q)(8) , inserted “on or” before “before the due date” in concluding provisions.\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nSection applicable to taxable years ending on or after  Oct. 22, 2004 , see  section 422(d) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'The reduction under paragraph (1) for any taxable year shall not exceed an amount which bears the same ratio to the increase in the investments in export trade assets (as defined in section 971(c)) of such corporation for such year as the export trade income which constitutes foreign base company income of such corporation for such year bears to the entire export trade income of such corporation for such year.\nFor purposes of this section, the amount taken into account with respect to any export trade asset shall be its adjusted basis, reduced by any liability to which the asset is subject.\nA United States shareholder of an export trade corporation may, under regulations prescribed by the Secretary, make the determinations under paragraphs (2) and (3) as of the close of the 75th day after the close of the years referred to in such paragraphs in lieu of on the last day of such years. A United States shareholder of an export trade corporation may, under regulations prescribed by the Secretary, make the determinations under paragraphs (2) and (3) with respect to export trade assets described in section 971(c)(3) as of the close of the years following the years referred to in such paragraphs, or as of the close of such longer period of time as such regulations may permit, in lieu of on the last day of such years and in lieu of on the day prescribed in the preceding sentence. Any election under this paragraph made with respect to any taxable year shall apply to such year and to all succeeding taxable years unless the Secretary consents to the revocation of such election.\n2017—Subsec. (b).  Pub. L. 115–97  struck out subsec. (b). Text read as follows: “Each United States shareholder of a controlled foreign corporation which for any prior taxable year was an export trade corporation shall include in his gross income under section 951(a)(1)(A)(ii), as an amount to which section 955 (relating to withdrawal of previously excluded subpart F income from qualified investment) applies, his pro rata share of the amount of decrease in the investments in export trade assets of such corporation for such year, but only to the extent that his pro rata share of such amount does not exceed an amount equal to—\n“(1) his pro rata share of the sum of (A) the amounts by which the subpart F income of such corporation was reduced for all prior taxable years under subsection (a), and (B) the amounts not included in subpart F income (determined without regard to this subpart) for all prior taxable years by reason of the treatment (under section 972 as in effect before the date of the enactment of the Tax Reform Act of 1976) of two or more controlled foreign corporations which are export trade corporations as a single controlled foreign corporation, reduced by\n“(2) the sum of the amounts which were included in his gross income under section 951(a)(1)(A)(ii) under the provisions of this subsection for all prior taxable years.”\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1901(b)(27)(A) , substituted “treatment (under section 972 as in effect before the date of enactment of the Tax Reform Act of 1976) of two or more controlled foreign corporations which are export trade corporations as a single controlled corporation” for “application of section 972” after “reason of the”.\nSubsec. (c)(4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” in three places.\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14212(c) of Pub. L. 115–97 , set out as a note under  section 851 of this title .\nAmendment by  section 1901(b)(27)(A) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 92–178, title V, §\u202f505(a) , (b),  Dec. 10, 1971 ,  85 Stat. 551 , provided that: \n “(a)   Use of Terms .— Except as otherwise expressly provided, whenever in this section a reference is made to a section, chapter, or other provision, the reference shall be considered to be made to a section, chapter, or other provision of the Internal Revenue Code of 1954, and terms used in this section shall have the same meaning as when used in such Code. \n \n “(b)   Transfer to a DISC of Assets of Export Trade Corporation.— “(1)   In general .— If a corporation (hereinafter in this section called ‘parent’) owns all of the outstanding stock of an export trade corporation (as defined in section 971), and the export trade corporation, during a taxable year beginning before  January 1, 1976 , transfers property, without receiving consideration, to a DISC (as defined in section 992(a)) all of whose outstanding stock is owned by the parent, and if the amount transferred by the export trade corporation is not less than the amount of its untaxed subpart F income (as defined in paragraph (2) of this subsection) at the time of such transfer, then— “(A)  notwithstanding section 367 or any other provision of chapter 1, no gain or loss to the export trade corporation, the parent, or the DISC shall be recognized by reason of such transfer; \n \n “(B)  the earnings and profits of the DISC shall be increased by the amount transferred to it by the export trade corporation and such amount shall be included in the accumulated DISC income, and for purposes of section 861(a)(2)(D) shall be considered to be qualified export receipts; \n \n “(C)  the adjusted basis of the assets transferred to the DISC shall be the same in the hands of the DISC as in the hands of the export trade corporation; \n \n “(D)  the earnings and profits of the export trade corporation shall be reduced by the amount transferred to the DISC, to the extent thereof, with the reduction being applied first to the untaxed subpart F income and then to the other earnings and profits in the order in which they were most recently accumulated; \n \n “(E)  the basis of the parent’s stock in the export trade corporation shall be decreased by the amount obtained by multiplying its basis in such stock by a fraction the numerator of which is the amount transferred to the DISC and the denominator of which is the aggregate adjusted basis of all the assets of the export trade corporation immediately before such transfer; \n \n “(F)  the basis of the parent’s stock in the DISC shall be increased by the amount of the reduction under subparagraph (E) of its basis in the stock of the export trade corporation; \n \n “(G)  the property transferred to the DISC shall not be considered to reduce the investments of the export trade corporation in export trade assets for purposes of applying [former] section 970(b); and \n \n “(H)  any foreign income taxes which would have been deemed under [former] section 902 to have been paid by the parent if the transfer had been made to the parent shall be treated as foreign income taxes paid by the DISC. \n \n\n For purposes of this section, the amount transferred by the export trade corporation to the DISC shall be the aggregate of the adjusted basis of the properties transferred, with proper adjustment for any indebtedness secured by such property or assumed by the DISC in connection with the transfer. For purposes of this section, a foreign corporation which qualified as an export trade corporation for any 3 taxable years beginning before  November 1, 1971 , shall be treated as an export trade corporation. \n \n “(2)   Definition of untaxed subpart f income .— For purposes of this section, the term ‘untaxed subpart F income’ means with respect to an export trade corporation the amount by which— “(A)  the sum of the amount by which the subpart F income of such corporation was reduced for the taxable year and all prior taxable years under section 970(a) and the amounts not included in subpart F income (determined without regard to subpart G of subchapter N of chapter 1) for all prior taxable years by reason of the application of section 972, exceeds \n \n “(B)  the sum of the amounts which were included in the gross income of the shareholders of such corporation under [former] section 951(a)(1)(A)(ii) and under the provision of [former] section 970(b) for all prior taxable years, \n \n\n determined without regard to the transfer of property described in paragraph (1) of this subsection. \n \n “(3)   Special cases .— If the provisions of paragraph (1) of this subsection are not applicable solely because the export trade corporation or the DISC, or both, are not owned in the manner prescribed in such paragraph, the provisions shall nevertheless be applicable in such cases to the extent, and in accordance with such rules, as may be prescribed by the Secretary or his delegate. \n \n “(4)   Treatment of export trade assets .— If the provisions of this subsection are applicable, accounts receivable held by an export trade corporation and transferred to a DISC, to the extent such receivables were export trade assets in the hands of the export trade corporation, shall be treated as qualified export assets for purposes of section 993(b).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'If 50 percent or more of the gross income of a controlled foreign corporation in the period specified in subsection (a)(1)(A) is gross income in respect of which such corporation derived export trade income in respect of agricultural products grown in the United States, it may qualify as an export trade corporation although it does not meet the requirements of subsection (a)(1)(B).\nNo controlled foreign corporation may qualify as an export trade corporation for any taxable year beginning after  October 31, 1971 , unless it qualified as an export trade corporation for any taxable year beginning before such date. If a corporation fails to qualify as an export trade corporation for a period of any 3 consecutive taxable years beginning after such date, it may not qualify as an export trade corporation for any taxable year beginning after such period.\nFor purposes of this subpart, the term “export property” means any property or any interest in property manufactured, produced, grown, or extracted in the United States.\nFor purposes of this subpart, the term “unrelated person” means a person other than a related person as defined in section 954(d)(3).\n1971—Subsec. (a)(3).  Pub. L. 92–178  added par. (3).\nPub. L. 99–514, title XVIII, §\u202f1876(m) ,  Oct. 22, 1986 ,  100 Stat. 2901 , provided that:  \n “If— “(1)  a corporation which is not an export trading corporation for its most recent taxable year ending before the date of the enactment of the Tax Reform Act of 1984 [ July 18, 1984 ] but was an export trading corporation for any prior taxable year, and \n \n “(2) (A)  such corporation may not qualify as an export trade corporation for any taxable year beginning after  December 31, 1984 , by reason of section 971(a)(3) of the Internal Revenue Code of 1954 [now 1986], or (B) such corporation makes an election, before the date 6 months after the date of the enactment of this Act [ Oct. 22, 1986 ], not to be treated as an export trade corporation with respect to taxable years beginning after  December 31, 1984 , \n \n \n\n rules similar to the rules of paragraphs (2) and (4) of section 805(b) of the Tax Reform Act of 1984 [set out as a note under  section 991 of this title ] shall apply to such corporation. For purposes of the preceding sentence, the term ‘export trade corporation’ has the meaning given such term by section 971 of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section,  Pub. L. 87–834, §\u202f12(a) ,  Oct. 16, 1962 ,  76 Stat. 1031 , related to the consolidation of a group of export trade corporations for treatment as a single controlled foreign corporation for tax purposes.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Section,  Pub. L. 89–809, title I, §\u202f105(e)(1) ,  Nov. 13, 1966 ,  80 Stat. 1565 , related to income of certain nonresident United States citizens subject to foreign community property laws.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'If the taxpayer fails to substantially comply with any formal document request arising out of the examination of the tax treatment of any item (hereinafter in this section referred to as the “examined item”) before the 90th day after the date of the mailing of such request on motion by the Secretary, any court having jurisdiction of a civil proceeding in which the tax treatment of the examined item is an issue shall prohibit the introduction by the taxpayer of any foreign-based documentation covered by such request.\nSubsection (a) shall not apply with respect to any documentation if the taxpayer establishes that the failure to provide the documentation as requested by the Secretary is due to reasonable cause.\nFor purposes of paragraph (1), the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the requested documentation is not reasonable cause.\nNotwithstanding any other law or rule of law, any person to whom a formal document request is mailed shall have the right to begin a proceeding to quash such request not later than the 90th day after the day such request was mailed. In any such proceeding, the Secretary may seek to compel compliance with such request.\nThe United States district court for the district in which the person (to whom the formal document request is mailed) resides or is found shall have jurisdiction to hear any proceeding brought under subparagraph (A). An order denying the petition shall be deemed a final order which may be appealed.\nThe running of the 90-day period referred to in subsection (a) shall be suspended during any period during which a proceeding brought under subparagraph (A) is pending.\nThe term “foreign-based documentation” means any documentation which is outside the United States and which may be relevant or material to the tax treatment of the examined item.\nThe term “documentation” includes books and records.\nThe Secretary, and any court having jurisdiction over a proceeding under subsection (c)(2), may extend the 90-day period referred to in subsection (a).\nIf any person takes any action as provided in subsection (c)(2), the running of any period of limitations under section 6501 (relating to the assessment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be suspended for the period during which the proceeding under such subsection, and appeals therein, are pending.\n1984—Subsec. (d)(3), (4).  Pub. L. 98–369  redesignated par. (4) as (3) and struck out former par. (3) which provided that an item was to be treated as foreign connected if directly or indirectly from a source outside the United States, or the item (in whole or in part) purported to arise outside the United States, or was otherwise dependent on transactions occurring outside the United States.\nAmendment by  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nPub. L. 97–248, title III, §\u202f337(c) ,  Sept. 3, 1982 ,  96 Stat. 630 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [enacting this section] shall apply with respect to formal document requests (as defined in section 982(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by this section) mailed after the date of the enactment of this Act [ Sept. 3, 1982 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Unless otherwise provided in regulations, all determinations under this subtitle shall be made in the taxpayer’s functional currency.\nThe functional currency of any qualified business unit shall be the dollar if activities of such unit are primarily conducted in dollars.\nAny change in the functional currency shall be treated as a change in the taxpayer’s method of accounting for purposes of section 481 under procedures to be established by the Secretary.\nPub. L. 99–514, title XII, §\u202f1261(e) ,  Oct. 22, 1986 ,  100 Stat. 2591 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this subpart and amending sections 1092 and 1256 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Special rules for purposes of sections 902 and 960 .— For purposes of applying sections [former] 902 and 960 of the Internal Revenue Code of 1986, the amendments made by this section shall apply to— “(A)  earnings and profits of the foreign corporation for taxable years beginning after  December 31, 1986 , and \n \n “(B)  foreign taxes paid or accrued by the foreign corporation with respect to such earnings and profits.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of determining the amount of the foreign tax credit, in the case of a taxpayer who takes foreign income taxes into account when accrued, the amount of any foreign income taxes (and any adjustment thereto) shall be translated into dollars by using the average exchange rate for the taxable year to which such taxes relate.\nSubparagraph (A) shall not apply to any foreign income taxes the liability for which is denominated in any inflationary currency (as determined under regulations).\nAt the election of the taxpayer, subparagraph (A) shall not apply to any foreign income taxes the liability for which is denominated in any currency other than in the taxpayer’s functional currency.\nAn election under this subparagraph may apply to foreign income taxes attributable to a qualified business unit in accordance with regulations prescribed by the Secretary.\nAny such election shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.\nIn the case of a regulated investment company which takes into account income on an accrual basis, subparagraphs (A) through (D) shall not apply and foreign income taxes paid or accrued with respect to such income shall be translated into dollars using the exchange rate as of the date the income accrues.\nFor adjustments where tax is not paid within 2 years, see section 905(c).\nTo the extent prescribed in regulations, the average exchange rate for the period (specified in such regulations) during which the taxes or adjustment is paid may be used instead of the exchange rate as of the time of such payment.\nFor purposes of this subsection, the term “foreign income taxes” means any income, war profits, or excess profits taxes paid or accrued to any foreign country or to any possession of the United States.\nForeign currency gain or loss with respect to distributions of previously taxed earnings and profits (as described in section 959 or 1293(c)) attributable to movements in exchange rates between the times of deemed and actual distribution shall be recognized and treated as ordinary income or loss from the same source as the associated income inclusion.\nThe Secretary shall prescribe regulations with respect to the treatment of distributions of previously taxed earnings and profits through tiers of foreign corporations.\n2004—Subsec. (a)(1)(D).  Pub. L. 108–357, §\u202f408(a) , added subpar. (D). Former subpar. (D) redesignated (E).\nSubsec. (a)(1)(E).  Pub. L. 108–357, §\u202f408(b)(1) , added subpar. (E). Former subpar. (E) redesignated (F).\nPub. L. 108–357, §\u202f408(a) , redesignated subpar. (D) as (E).\nSubsec. (a)(1)(F).  Pub. L. 108–357, §\u202f408(b)(1) , redesignated subpar. (E) as (F).\nSubsec. (a)(2).  Pub. L. 108–357, §\u202f408(b)(2) , inserted “or (E)” after “subparagraph (A)” in introductory provisions.\n1997—Subsec. (a).  Pub. L. 105–34, §\u202f1102(a)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows:\n“(a)  Foreign Taxes.—\n“(1)  In general .—For purposes of determining the amount of the foreign tax credit—\n“(A) any foreign income taxes shall be translated into dollars using the exchange rates as of the time such taxes were paid to the foreign country or possession of the United States, and\n“(B) any adjustment to the amount of foreign income taxes shall be translated into dollars using—\n“(i) except as provided in clause (ii), the exchange rate as of the time when such adjustment is paid to the foreign country or possession, or\n“(ii) in the case of any refund or credit of foreign income taxes, using the exchange rate as of the time of original payment of such foreign income taxes.\n“(2)  Foreign income taxes .—For purposes of paragraph (1), ‘foreign income taxes’ means any income, war profits, or excess profits taxes paid to any foreign country or to any possession of the United States.”\nSubsec. (a)(3), (4).  Pub. L. 105–34, §\u202f1102(b)(1) , added par. (3) and redesignated former par. (3) as (4).\n1988— Pub. L. 100–647  substituted “foreign taxes and foreign corporation’s earnings and profits” for “foreign corporation’s earnings and profits and foreign taxes” in heading, and revised and restructured the provisions of subsecs. (a) and (b).\nPub. L. 108–357, title IV, §\u202f408(c) ,  Oct. 22, 2004 ,  118 Stat. 1500 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nPub. L. 105–34, title XI, §\u202f1102(c)(1) ,  Aug. 5, 1997 ,  111 Stat. 966 , provided that:  “The amendments made by subsections (a)(1) and (b) [amending this section and  section 989 of this title ] shall apply to taxes paid or accrued in taxable years beginning after  December 31, 1997 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1261(e) of Pub. L. 99–514 , set out as a note under  section 985 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': '1988—Par. (4).  Pub. L. 100–647  struck out par. (4) which provided for translation of foreign income taxes paid by each qualified business unit of the taxpayer in the same manner as provided under section 986(b).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1261(e) of Pub. L. 99–514 , set out as a note under  section 985 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'Except as otherwise provided in this section, any foreign currency gain or loss attributable to a section 988 transaction shall be computed separately and treated as ordinary income or loss (as the case may be).\nExcept as provided in regulations, a taxpayer may elect to treat any foreign currency gain or loss attributable to a forward contract, a futures contract, or option described in subsection (c)(1)(B)(iii) which is a capital asset in the hands of the taxpayer and which is not a part of a straddle (within the meaning of section 1092(c), without regard to paragraph (4) thereof) as capital gain or loss (as the case may be) if the taxpayer makes such election and identifies such transaction before the close of the day on which such transaction is entered into (or such earlier time as the Secretary may prescribe).\nTo the extent provided in regulations, any amount treated as ordinary income or loss under paragraph (1) shall be treated as interest income or expense (as the case may be).\nExcept as otherwise provided in regulations, in the case of any amount treated as ordinary income or loss under paragraph (1) (without regard to paragraph (1)(B)), the source of such amount shall be determined by reference to the residence of the taxpayer or the qualified business unit of the taxpayer on whose books the asset, liability, or item of income or expense is properly reflected.\nIn the case of a qualified business unit of any taxpayer (including an individual), the residence of such unit shall be the country in which the principal place of business of such qualified business unit is located.\nTo the extent provided in regulations, in the case of a partnership, the determination of residence shall be made at the partner level.\nThe term “10-percent owned foreign corporation” means any foreign corporation in which the United States person owns directly or indirectly at least 10 percent of the voting stock.\nThe term “foreign currency gain” means any gain from a section 988 transaction to the extent such gain does not exceed gain realized by reason of changes in exchange rates on or after the booking date and before the payment date.\nThe term “foreign currency loss” means any loss from a section 988 transaction to the extent such loss does not exceed the loss realized by reason of changes in exchange rates on or after the booking date and before the payment date.\nIn the case of any section 988 transaction described in subsection (c)(1)(B)(iii), any gain or loss from such transaction shall be treated as foreign currency gain or loss (as the case may be).\nFor purposes of this section, the term “nonfunctional currency” includes coin or currency, and nonfunctional currency denominated demand or time deposits or similar instruments issued by a bank or other financial institution.\nClause (iii) of subparagraph (B) shall not apply to any regulated futures contract or nonequity option which would be marked to market under section 1256 if held on the last day of the taxable year.\nThe taxpayer may elect to have clause (i) not apply to such taxpayer. Such an election shall apply to contracts held at any time during the taxable year for which such election is made or any succeeding taxable year unless such election is revoked with the consent of the Secretary.\nExcept as provided in regulations, an election under subclause (I) for any taxable year shall be made on or before the 1st day of such taxable year (or, if later, on or before the 1st day during such year on which the taxpayer holds a contract described in clause (i)).\nIn the case of a partnership, an election under subclause (I) shall be made by each partner separately. A similar rule shall apply in the case of an S corporation.\nThis subparagraph shall not apply to any income or loss of a partnership for any taxable year if such partnership made an election under subparagraph (E)(iii)(V) for such year or any preceding year.\nIn the case of a qualified fund, clause (iii) of subparagraph (B) shall not apply to any instrument which would be marked to market under section 1256 if held on the last day of the taxable year (determined after the application of clause (iv)).\nIf any partnership made an election under clause (iii)(V) for any taxable year and such partnership has a net loss for such year or any succeeding year from instruments referred to in clause (i), the rules of clauses (i) and (iv) shall apply to any such loss year whether or not such partnership is a qualified fund for such year.\nExcept as provided in regulations, in the case of a qualified fund, any bank forward contract, any foreign currency futures contract traded on a foreign exchange, or to the extent provided in regulations any similar instrument, which is not otherwise a section 1256 contract shall be treated as a section 1256 contract for purposes of section 1256.\nIn the case of any instrument treated as a section 1256 contract under subclause (I), subparagraph (A) of section 1256(a)(3) shall be applied by substituting “100 percent” for “40 percent” (and subparagraph (B) of such section shall not apply).\nThe interest of a general partner in the partnership shall not be treated as failing to meet the 20-percent ownership requirements of clause (iii)(I) for any taxable year of the partnership if, for the taxable year of the partner in which such partnership taxable year ends, such partner (and each corporation filing a consolidated return with such partner) had no ordinary income or loss from a section 988 transaction which is foreign currency gain or loss (as the case may be).\nFor purposes of clause (iii)(I), any income allocable to a general partner as incentive compensation based on profits rather than capital shall not be taken into account in determining such partner’s interest in the profits of the partnership.\nExcept as provided in regulations, the interest of a partner in the partnership shall not be treated as failing to meet the 20-percent ownership requirements of clause (iii)(I) if none of the income of such partner from such partnership is subject to tax under this chapter (whether directly or through 1 or more pass-thru entities).\nIn determining whether the requirements of clause (iii)(I) are met with respect to any partnership, except to the extent provided in regulations, any interest in such partnership held by another partnership shall be treated as held proportionately by the partners in such other partnership.\nInterests in the partnership held by persons related to each other (within the meaning of sections 267(b) and 707(b)) shall be treated as held by 1 person.\nReferences to any partnership shall include a reference to any predecessor thereof.\nRules similar to the rules of section 7704(e) shall apply.\nFor purposes of clause (iii)(IV), any debt instrument which is a section 988 transaction shall be treated as a commodity.\nThe term “payment date” means the date on which the payment is made or received.\nThe term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness. To the extent provided in regulations, such term shall include preferred stock.\nIf the taxpayer takes or makes delivery in connection with any section 988 transaction described in paragraph (1)(B)(iii), any gain or loss (determined as if the taxpayer sold the contract, option, or instrument on the date on which he took or made delivery for its fair market value on such date) shall be recognized in the same manner as if such contract, option, or instrument were so sold.\nTo the extent provided in regulations, if any section 988 transaction is part of a 988 hedging transaction, all transactions which are part of such 988 hedging transaction shall be integrated and treated as a single transaction or otherwise treated consistently for purposes of this subtitle. For purposes of the preceding sentence, the determination of whether any transaction is a section 988 transaction shall be determined without regard to whether such transaction would otherwise be marked-to-market under section 475 or 1256 and such term shall not include any transaction with respect to which an election is made under subsection (a)(1)(B). Sections 475, 1092, and 1256 shall not apply to a transaction covered by this subsection.\nThe preceding provisions of this section shall not apply to any section 988 transaction entered into by an individual which is a personal transaction.\n1999—Subsec. (d)(2)(A)(i), (ii).  Pub. L. 106–170  substituted “to manage” for “to reduce”.\n1997—Subsec. (e).  Pub. L. 105–34  amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: “This section shall apply to section 988 transactions entered into by an individual only to the extent expenses properly allocable to such transactions meet the requirements of section 162 or 212 (other than that part of section 212 dealing with expenses incurred in connection with taxes).”\n1993—Subsec. (d)(1).  Pub. L. 103–66  substituted “section 475 or 1256” for “section 1256” and “Sections 475, 1092, and 1256” for “Sections 1092 and 1256”.\n1989—Subsec. (a).  Pub. L. 101–239  inserted introductory provision “Notwithstanding any other provision of this chapter—”.\n1988—Subsec. (a)(3)(B)(i).  Pub. L. 100–647, §\u202f1012(v)(8) , inserted at end “If an individual does not have a tax home (as so defined), the residence of such individual shall be the United States if such individual is a United States citizen or a resident alien and shall be a country other than the United States if such individual is not a United States citizen or a resident alien.”\nSubsec. (a)(3)(B)(iii).  Pub. L. 100–647, §\u202f1012(v)(7) , added cl. (iii).\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1012(v)(3)(A) , added par. (3).\nSubsec. (c)(1)(B)(iii).  Pub. L. 100–647, §\u202f6130(a) , struck out “unless such instrument would be marked to market under section 1256 if held on the last day of the taxable year” after “similar financial instrument”.\nPub. L. 100–647, §\u202f1012(v)(6) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “Entering into or acquiring any forward contract, futures contract, option, or similar financial instrument if such instrument is not marked to market at the close of the taxable year under section 1256.”\nSubsec. (c)(1)(C)(i)(II).  Pub. L. 100–647, §\u202f1012(v)(3)(B) , amended subcl. (II) generally. Prior to amendment, subcl. (II) read as follows: “for purposes of determining the foreign currency gain or loss from such transaction, paragraphs (1) and (2) of subsection (b) shall be applied by substituting ‘acquisition date’ for ‘booking date’ and ‘disposition’ for ‘payment date’.”\nSubsec. (c)(1)(D), (E).  Pub. L. 100–647, §\u202f6130(b) , added subpars. (D) and (E).\nSubsec. (c)(2)(C).  Pub. L. 100–647, §\u202f1012(v)(3)(C) , struck out subpar. (C) which defined “booking date” in the case of a transaction described in par. (1)(B)(iii) as the date on which the position is entered into or acquired.\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f1012(v)(3)(D) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The term ‘payment date’ means—\n“(A) in the case of a transaction described in paragraph (1)(B)(i) or (ii), the date on which payment is made or received, or\n“(B) in the case of a transaction described in paragraph (1)(B)(iii), the date payment is made or received or the date the taxpayer’s rights with respect to the position are terminated.”\nSubsec. (c)(5).  Pub. L. 100–647, §\u202f1012(v)(2)(A) , added par. (5).\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f1012(v)(4) , substituted “this subtitle” for “this section”.\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title XI, §\u202f1104(b) ,  Aug. 5, 1997 ,  111 Stat. 967 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1997 .”\nAmendment by  Pub. L. 103–66  applicable to all taxable years ending on or after  Dec. 31, 1993 , with special rules for taxpayers required to change accounting methods and for floor specialists and market makers, see  section 13223(c) of Pub. L. 103–66 , set out as an Effective Date note under  section 475 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1012(v)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3529 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall not apply in any case in which the taxpayer takes or makes delivery before  June 11, 1987 .”\nAmendment by section 1012(v)(3), (4), (6)–(8) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6130(d) ,  Nov. 10, 1988 ,  102 Stat. 3719 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1092 of this title ] shall apply with respect to forward contracts, future contracts, options, and similar instruments entered into or acquired after  October 21, 1988 . \n \n “(2)   Time for making election .— The time for making any election under subparagraph (D) or (E) of section 988(c)(1) of the 1986 Code shall not expire before the date 30 days after the date of the enactment of this Act [ Nov. 10, 1988 ]. \n \n “(3)   Transitional rules.— “(A)  The requirements of subclause (IV) of section 988(c)(1)(E)(iii) of the 1986 Code (as added by subsection (b)) shall not apply to periods before the date of the enactment of this Act. \n \n “(B)  In the case of any partner in an existing partnership, the 20-percent ownership requirements of subclause (I) of such section 988(c)(1)(E)(iii) shall be treated as met during any period during which such partner does not own a percentage interest in the capital or profits of such partnership greater than 33⅓ percent (or, if lower, the lowest such percentage interest of such partner during any prior period after  October 21, 1988 , during which such partnership is in existence). For purposes of the preceding sentence, the term ‘existing partnership’ means any partnership if— “(i)  such partnership was in existence on  October 21, 1988 , and principally engaged on such date in buying and selling options, futures, or forwards with respect to commodities, or \n \n “(ii)  a registration statement was filed with respect to such partnership with the Securities and Exchange Commission on or before such date and such registration statement indicated that the principal activity of such partnership will consist of buying and selling instruments referred to in clause (i).”\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1261(e) of Pub. L. 99–514 , set out as a note under  section 985 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME FROM SOURCES WITHOUT THE UNITED STATES'},
  'content': 'For purposes of this subpart, the term “qualified business unit” means any separate and clearly identified unit of a trade or business of a taxpayer which maintains separate books and records.\nThe enactment of this subpart, referred to in subsec. (c)(1), probably means the date of enactment of  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\n2004—Subsec. (b)(3).  Pub. L. 108–357  struck out “,\u2000551(a),” after “section 951(a)(1)(A)”.\n1997—Subsec. (b)(3), (4).  Pub. L. 105–34, §\u202f1102(b)(3) , struck out “weighted” before “average exchange rate”.\nSubsec. (c)(6).  Pub. L. 105–34, §\u202f1102(b)(2) , added par. (6).\n1996—Subsec. (b).  Pub. L. 104–188  substituted “section 951(a)(1)(B)” for “subparagraph (B) or (C) of section 951(a)(1)” in closing provisions.\n1993—Subsec. (b).  Pub. L. 103–66  substituted “subparagraph (B) or (C) of section 951(a)(1)” for “section 951(a)(1)(B)” in last sentence.\n1988—Subsec. (b).  Pub. L. 100–647  substituted in par. (3) “section 951(a)(1)(A)” for “section 951(a)” and inserted at end “For purposes of the preceding sentence, any amount included in income under section 951(a)(1)(B) shall be treated as an actual distribution made on the last day of the taxable year for which such amount was so included.”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxes paid or accrued in taxable years beginning after  Dec. 31, 1997 , see  section 1102(c)(1) of Pub. L. 105–34 , set out as a note under  section 986 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end, see  section 1501(d) of Pub. L. 104–188 , set out as a note under  section 904 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years of foreign corporations beginning after  Sept. 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 13231(e) of Pub. L. 103–66 , set out as a note under  section 951 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1261(e) of Pub. L. 99–514 , set out as a note under  section 985 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DOMESTIC INTERNATIONAL SALES CORPORATIONS'},
  'content': 'For purposes of the taxes imposed by this subtitle upon a DISC (as defined in section 992(a)), a DISC shall not be subject to the taxes imposed by this subtitle.\n1998— Pub. L. 105–206  struck out “except for the tax imposed by chapter 5” before period at end.\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates ( section 1131(a) of Pub. L. 105–34 ), see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 92–178, title V, §\u202f507 ,  Dec. 10, 1971 ,  85 Stat. 553 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Except as provided in  section 505 of this title  [amending  section 971 of this title  and enacting provisions set out as a note under  section 970 of this title ], the amendments made by sections 501 through 504 of this title [enacting this section and sections 992 to 994, 995 to 997, and 6686 of this title and amending sections 246, 861, 901, 904, 922, 931, 1014, 1504, 6011, 6072, and 6501 of this title] shall apply with respect to taxable years ending after  December 31, 1971 , except that a corporation may not be a DISC (as defined in section 992(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], added by  section 501 of this title ) for any taxable year beginning before  January 1, 1972 .”\nPub. L. 98–369, div. A, title VIII, §\u202f805(b) ,  July 18, 1984 ,  98 Stat. 1001 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1876(h), (n),  Oct. 22, 1986 ,  100 Stat. 2095 , 2900, 2901, provided that: \n “(1)   Close of 1984 taxable years of disc’s.— “(A)   In general .— For purposes of applying the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the taxable year of each DISC which begins before  January 1, 1985 , and which (but for this paragraph) would include  January 1, 1985 , shall close on  December 31, 1984 . For purposes of such Code, the requirements of section 992(a)(1)(B) of such Code (relating to percentage of qualified export assets on last day of the taxable year) shall not apply to any taxable year ending on  December 31, 1984 . \n \n “(B)   Underpayments of estimated tax .— To the extent provided in regulations prescribed by the Secretary of the Treasury or his delegate, no addition to tax shall be made under section 6654 or 6655 of such Code with respect to any underpayment of any installment required to be paid before  April 13, 1985 , to the extent the underpayment was created or increased by reason of subparagraph (A). \n \n \n “(2)   Exemption of accumulated disc income from tax.— “(A)   In general .— For purposes of applying the Internal Revenue Code of 1986 with respect to actual distributions made after  December 31, 1984 , by a DISC or former DISC which was a DISC on  December 31, 1984 , any accumulated DISC income of a DISC or former DISC (within the meaning of section 996(f)(1) of such Code) which is derived before  January 1, 1985 , shall be treated as previously taxed income (within the meaning of section 996(f)(2) of such Code) with respect to which there had previously been a deemed distribution to which section 996(e)(1) of such Code applied. For purposes of the preceding sentence, the term ‘actual distribution’ includes a distribution in liquidation, and the earnings and profits of any corporation receiving a distribution not included in gross income by reason of the preceding sentence shall be increased by the amount of such distribution. \n \n “(B)   Exception for distribution of amounts previously disqualified .— Subparagraph (A) shall not apply to the distribution of any accumulated DISC income of a DISC or former DISC to which section 995(b)(2) of such Code applied by reason of any revocation or disqualification (other than a revocation which under regulations prescribed by the Secretary results solely from the provisions of this title [title VIII, §§\u202f801–805, of  Pub. L. 98–369 , see Effective Date of 1984 Amendment note set out under  section 245 of this title ]. \n \n “(C)   Treatment of distribution of accumulated disc income received by cooperatives .— In the case of any actual distribution received by an organization described in section 1381 of such Code and excluded from the gross income of such corporation by reason of subparagraph (A)— “(i)  such amount shall not be included in the gross income of any member of such organization when distributed in the form of a patronage dividend or otherwise, and \n \n “(ii)  no deduction shall be allowed to such organization by reason of any such distribution. \n \n \n \n “(3)   Installment treatment of certain deemed distributions of shareholders.— “(A)   In general .— Notwithstanding section 995(b) of such Code, if a shareholder of a DISC elects the application of this paragraph, any qualified distribution shall be treated, for purposes of such Code, as received by such shareholder in 10 equal installments on the last day of each of the 10 taxable years of such shareholder which begins after the first taxable year of such shareholder beginning in 1984. The preceding sentence shall apply without regard to whether the DISC exists after  December 31, 1984 . \n \n “(B)   Qualified distribution .— The term ‘qualified distribution’ means any distribution which a shareholder is deemed to have received by reason of section 995(b) of such Code with respect to income derived by the DISC in the first taxable year of the DISC beginning— “(i)  in 1984, and \n \n “(ii)  after the date in 1984 on which the taxable year of such shareholder begins. \n \n \n “(C)   Shorter period for installments .— The Secretary of the Treasury or his delegate may by regulations provide for the election by any shareholder to be treated as receiving a qualified distribution over such shorter period as the taxpayer may elect. \n \n “(D)   Elections .— Any election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe. \n \n \n “(4)   Treatment of transfers from disc to fsc .— Except to the extent provided in regulations, section 367 of such Code shall not apply to transfers made before  January 1, 1986  (or, if later, the date 1 year after the date on which the corporation ceases to be a DISC), to a FSC of qualified export assets (as defined in section 993(b) of such Code) held on  August 4, 1983 , by a DISC in a transaction described in section 351 or 368(a)(1) of such Code. \n \n “(5)   Deemed termination of a disc .— Under regulations prescribed by the Secretary, if any controlled group of corporations of which a DISC is a member establishes a FSC, then any DISC which is a member of such group shall be treated as having terminated its DISC status. \n \n “(6)   Definitions .— For purposes of this subsection, the terms ‘DISC’ and ‘former DISC’ have the respective meanings given to such terms by section 992 of such Code.”\nPub. L. 98–369, div. A, title VIII, §\u202f805(c) ,  July 18, 1984 ,  98 Stat. 1002 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— If, before  January 1, 1985 , any export trade corporation— “(A)  makes an election under [former] section 927(f)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to be treated as a FSC, or \n \n “(B)  elects not to be treated as an export trade corporation with respect to taxable years beginning after  December 31, 1984 , \n \n\n rules similar to the rules of paragraphs (2) and (4) of subsection (b) [section 805(b)(2) and (4) of  Pub. L. 98–369 , set out as a note above] shall apply to such export trade corporation. \n \n “(2)   Treatment of transfers to fsc .— In the case of any export trade corporation which— “(A)  makes an election described in paragraph (1), and \n \n “(B)  transfers before  January 1, 1986 , any portion of its property to a FSC in a transaction described in section 351 or 368(a)(1), \n \n\n then, subject to such rules as the Secretary of the Treasury or his delegate may prescribe based on principles similar to the principles of section 505(a) and (b) of the Revenue Act of 1971 [ Pub. L. 92–178 , set out as a note under  section 970 of this title ], no income, gain, or loss shall be recognized on such transfer or on the distribution of any stock of the FSC received (or treated as received) in connection with such transfer. \n \n “(3)   Export trade corporation .— For purposes of this subsection, the term ‘export trade corporation’ has the meaning given such term by section 971 of the Internal Revenue Code of 1986.”\nPub. L. 92–178, title V, §\u202f506 ,  Dec. 10, 1971 ,  85 Stat. 553 , which directed, that commencing with calendar year 1972, the Secretary of the Treasury submit annual reports to Congress on the effect and operation of title V, §§\u202f501–507, of  Pub. L. 92–178 , was probably intended by Congress to be repealed by  Pub. L. 98–369, div. A, title VIII, §\u202f804(b)(1) ,  July 18, 1984 ,  98 Stat. 1000 , which directed that  section 806 of Pub. L. 98–178  relating to submission of annual reports to Congress be repealed.  Section 804(b)(2) of Pub. L. 98–369  provided that the repeal is applicable to reports for calendar years after 1984.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DOMESTIC INTERNATIONAL SALES CORPORATIONS'},
  'content': 'The Secretary shall prescribe regulations setting forth the conditions under and the extent to which a corporation which has filed a return as a DISC for a taxable year shall be treated as a DISC for such taxable year for all purposes of this title, notwithstanding the fact that the corporation has failed to satisfy the conditions of paragraph (1).\nFor purposes of this title, the term “former DISC” means, with respect to any taxable year, a corporation which is not a DISC for such year but was a DISC in a preceding taxable year and at the beginning of the taxable year has undistributed previously taxed income or accumulated DISC income.\nIf a corporation makes an election under paragraph (1), then the provisions of this part shall apply to such corporation for the taxable year of the corporation for which made and for all succeeding taxable years and shall apply to each person who at any time is a shareholder of such corporation for all periods on or after the first day of the first taxable year of the corporation for which the election is effective.\nIf a corporation is not a DISC for each of any 5 consecutive taxable years of the corporation for which an election under this subsection is effective, the election shall be terminated and not be in effect for any taxable year of the corporation after such 5th year.\n2018—Subsec. (d)(6), (7).  Pub. L. 115–141  redesignated par. (7) as (6) and struck out former par. (6) which read as follows: “a China Trade Act corporation receiving the special deduction provided in section 941(a),”.\n2007—Subsec. (a)(1)(C) to (E).  Pub. L. 110–172  inserted “and” at end of subpar. (C), substituted period for “,\u2000and” at end of subpar. (D), and struck out subpar. (E) which read as follows: “such corporation is not a member of any controlled group of which a FSC is a member.”\n1996—Subsec. (d)(3).  Pub. L. 104–188  struck out “or 593” after “section 581”.\n1984—Subsec. (a)(1)(E).  Pub. L. 98–369  added subpar. (E).\n1982—Subsec. (d)(7).  Pub. L. 97–354  substituted “an S corporation” for “an electing small business corporation (as defined in section 1371(b))”.\n1976—Subsecs. (a)(2), (b)(1), (3), (c)(2)(B).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DOMESTIC INTERNATIONAL SALES CORPORATIONS'},
  'content': 'For purposes of this part, the term “controlled group” has the meaning assigned to the term “controlled group of corporations” by section 1563(a), except that the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears therein, and section 1563(b) shall not apply.\nIf the President determines that the supply of any property described in paragraph (1) is insufficient to meet the requirements of the domestic economy, he may by Executive order designate the property as in short supply. Any property so designated shall be treated as property not described in paragraph (1) during the period beginning with the date specified in the Executive order and ending with the date specified in an Executive order setting forth the President’s determination that the property is no longer in short supply.\nFor purposes of this part, the term “gross receipts” means the total receipts from the sale, lease, or rental of property held primarily for sale, lease, or rental in the ordinary course of trade or business, and gross income from all other sources. In the case of commissions on the sale, lease, or rental of property, the amount taken into account for purposes of this part as gross receipts shall be the gross receipts on the sale, lease, or rental of the property on which such commissions arose.\nFor purposes of this part, the term “United States” includes the Commonwealth of Puerto Rico and the possessions of the United States.\nSections 3(2)(C) and 7(a) of the Export Administration Act of 1979, referred to in subsec. (c)(2)(D), were classified, respectively, to sections 4602(2)(C) and 4606(a) of Title 50, War and National Defense, prior to repeal by  Pub. L. 115–232, div. A, title XVII, §\u202f1766(a) ,  Aug. 13, 2018 ,  132 Stat. 2232 .\n2018— Pub. L. 115–141 , inserted “and special rules” after “Definitions” in section catchline.\n1993—Subsec. (c)(2).  Pub. L. 103–66, §\u202f13239(b)(2) , inserted at end “For purposes of subparagraph (E), the term ‘unprocessed timber’ means any log, cant, or similar form of timber.”\nSubsec. (c)(2)(E).  Pub. L. 103–66, §\u202f13239(b)(1) , added subpar. (E).\n1984—Subsec. (a)(3).  Pub. L. 98–369  substituted “the term ‘controlled group of corporations’ by” for “such term by”.\n1979—Subsec. (c)(1).  Pub. L. 96–39  substituted “of the Tariff Act of 1930 ( 19 U.S.C. 1401a )” for “402a of the Tariff Act of 1930 (19 U.S.C., sec. 1401a or 1402)”.\nSubsec. (c)(2)(D).  Pub. L. 96–72  substituted “7(a) of the Export Administration Act of 1979” for “4(b) of the Export Administration Act of 1969 (50 U.S.C. App. 2403(b))” and “paragraph (2)(C)” for “paragraph (2)(A)”.\n1976—Subsecs. (a)(2), (b)(9).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c).  Pub. L. 94–455 , §§\u202f1101(b), 1906(b)(13)(A), in par. (1) in provisions following subpar. (C), struck out “or his delegate” after “Secretary”, in par. (2)(B) “or” after “like property”, and in par. (2)(C), substituted “under section 613 or 613A” for “under section 611” after “uranium products)”.\nSubsec. (d)(1)(C).  Pub. L. 94–455, §\u202f1101(c)(1) , inserted “determined without regard to subparagraph (C) or (D) of subsection (c)(2)” after “export property”.\nSubsec. (d)(2).  Pub. L. 94–455, §\u202f1101(c)(2) , inserted “(determined without regard to subparagraph (C) or (D) of subsection (c)(2))” after “would be export property”.\nSubsecs. (d)(4)(A), (e)(3)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1975—Subsec. (c)(2).  Pub. L. 94–12  added subpars. (C) and (D) and provisions following subpar. (D).\n1974—Subsec. (b)(3).  Pub. L. 93–482  inserted “or of another corporation which is a DISC and which is a member of a controlled group which includes such corporation” after “such corporation”.\nAmendment by  Pub. L. 103–66  applicable to sales, exchanges, or other dispositions after  Aug. 10, 1993 , see  section 13239(e) of Pub. L. 103–66 , set out as a note under  section 865 of this title .\nAmendment by  Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 96–72  effective upon the expiration of the Export Administration Act of 1969, which terminated on  Sept. 30, 1979 , or upon any prior date which the Congress by concurrent resolution or the President by proclamation designated, see  Pub. L. 96–72, §\u202f19(a) ,  Sept. 29, 1979 ,  93 Stat. 535 , which was classified to  section 4621 of Title 50 , War and National Defense, prior to repeal by  Pub. L. 115–232, div. A, title XVII, §\u202f1766(a) ,  Aug. 13, 2018 ,  132 Stat. 2232 .\nAmendment by  Pub. L. 96–39  effective  Jan. 1, 1981 , with provision for an earlier effective date under certain circumstances, see  section 204 of Pub. L. 96–39 , set out as a note under  section 1401a of Title 19 , Customs Duties.\nPub. L. 94–455, title XI, §\u202f1101(g)(2) ,  Oct. 4, 1976 ,  90 Stat. 1659 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to sales, exchanges, and other dispositions made after  March 18, 1975 , in taxable years ending after such date.”\nPub. L. 94–455, title XI, §\u202f1101(g)(3) ,  Oct. 4, 1976 ,  90 Stat. 1659 , provided that:  “The amendments made by subsections (c) and (f) [amending this section] shall apply to taxable years ending after  March 18, 1975 .”\nPub. L. 94–12, title VI, §\u202f603(b) ,  Mar. 29, 1975 ,  89 Stat. 65 , as amended by  Pub. L. 94–455, title XI, §\u202f1101(f) ,  Oct. 4, 1976 ,  90 Stat. 1659 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general.— Except as provided in paragraph (2), the amendments made by subsection (a) [amending this section] shall apply to sales, exchanges, and other dispositions made after  March 18, 1975 , in taxable years ending after such date. \n \n “(2)   Binding contract.— The amendments made by subsection (a) [amending this section] shall not apply to sales, exchanges, and other dispositions made after  March 18, 1975 , but before  March 19, 1980 , if such sales, exchanges, and other dispositions are made pursuant to a fixed contract. The term ‘fixed contract’ means a contract which was, on  March 18, 1975 , and is at all times thereafter binding on the DISC or a taxpayer which was a member of the same controlled group (within the meaning of section 993(a)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) as the DISC, which was entered into after the date on which the DISC qualified as a DISC and the DISC and the taxpayer became members of the same controlled group, and under which the price and quantity of the products sold, exchanged, or otherwise disposed of cannot be increased.”\nPub. L. 93–482, §\u202f3(b) ,  Oct. 26, 1974 ,  88 Stat. 1456 , provided that:  “The amendment made by subsection (a) [amending this section] applies to taxable years beginning after  December 31, 1973 . The amendment shall, at the election of the taxpayer made within 90 days after the date of enactment of this Act [ Oct. 26, 1974 ], also apply to any taxable year beginning after  December 31, 1971 , and before  January 1, 1974 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DOMESTIC INTERNATIONAL SALES CORPORATIONS'},
  'content': 'For purposes of this section, the term “export promotion expenses” means those expenses incurred to advance the distribution or sale of export property for use, consumption, or distribution outside of the United States, but does not include income taxes. Such expenses shall also include freight expenses to the extent of 50 percent of the cost of shipping export property aboard airplanes owned and operated by United States persons or ships documented under the laws of the United States in those cases where law or regulations does not require that such property be shipped aboard such airplanes or ships.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DOMESTIC INTERNATIONAL SALES CORPORATIONS'},
  'content': 'A shareholder of a DISC or former DISC shall be subject to taxation on the earnings and profits of a DISC as provided in this chapter, but subject to the modifications of this subpart.\nFor purposes of subparagraph (A), the term “military property” means any property which is an arm, ammunition, or implement of war designated in the munitions list published pursuant to section 38 of the Arms Export Control Act ( 22 U.S.C. 2778 ).\nFor purposes of applying paragraph (1)(E), all DISC’s which are members of the same controlled group shall be treated as a single corporation.\nThe dollar amount under paragraph (1)(E) shall be allocated among the DISC’s which are members of the same controlled group in a manner provided in regulations prescribed by the Secretary.\nThe amounts described in paragraph (1) shall be included in gross income as a dividend to the extent of the accumulated DISC income of the DISC or former DISC which is attributable to the stock disposed of and which was accumulated in taxable years of such corporation during the period or periods the stock disposed of was held by the shareholder which disposed of such stock.\nUnder regulations prescribed by the Secretary the determinations under this subsection shall be made on a cumulative basis with proper adjustments for amounts previously taken into account.\nThe term “tax liability” means the amount of the tax imposed by this chapter for the taxable year reduced by credits allowable against such tax (other than credits allowable under sections 31, 32, and 34).\nFor purposes of applying subparagraph (A) with respect to any taxable year of a shareholder, the computation year is the taxable year of the DISC which ends with (or within) the taxable year of the shareholder which precedes the taxable year of the shareholder for which the amount of deferred DISC income is being determined.\nFor purposes of this subsection, the term “base period T-bill rate” means the annual rate of interest determined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Federal Reserve System, for the 1-year period ending on September 30 of the calendar year ending with (or of the most recent calendar year ending before) the close of the taxable year of the shareholder.\nThe Secretary shall prescribe such regulations as may be necessary for the application of this subsection to short years of the DISC, the shareholder, or both.\nThe interest accrued during any taxable year which a shareholder is required to pay under paragraph (1) shall be treated, for purposes of this title, as interest payable under section 6601 and shall be paid by the shareholder at the time the tax imposed by this chapter for such taxable year is required to be paid.\nFor purposes of this subsection, the term “DISC” includes a former DISC.\n2002—Subsec. (b)(3)(B).  Pub. L. 107–147  substituted “Arms Export Control Act” for “International Security Assistance and Arms Export Control Act of 1976”.\n2000—Subsec. (b)(3)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f319(12)] , substituted “section 38 of the International Security Assistance and Arms Export Control Act of 1976 ( 22 U.S.C. 2778 )” for “the Military Security Act of 1954 ( 22 U.S.C. 1934 )”.\nSubsec. (f)(4).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f307(c)] , substituted “the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Federal Reserve System, for the 1-year period” for “the average investment yield of United States Treasury bills with maturities of 52 weeks which were auctioned during the 1-year period”.\n1999—Subsec. (b)(1)(C).  Pub. L. 106–170  substituted “1221(a)(1)” for “1221(1)”.\n1989—Subsec. (g).  Pub. L. 101–239  substituted “section 511 (or any other person otherwise subject to tax under section 511)” for “section 511” in introductory provisions.\n1988—Subsec. (c)(1).  Pub. L. 100–647, §\u202f1006(e)(15) , struck out subpar. (C) and last sentence which read as follows:\n“(C) a shareholder distributes, sells, or exchanges stock in a DISC or former DISC in a transaction to which section 311, 336, or 337 applies, then an amount equal to the excess of the fair market value of such stock over its adjusted basis in the hands of the shareholder shall, notwithstanding any provision of this title, be included in gross income of the shareholder as a dividend to the extent provided in paragraph (2).\nSubparagraph (C) shall not apply if the person receiving the stock in the disposition has a holding period for the stock which includes the period for which the stock was held by the shareholder disposing of such stock.”\nSubsec. (g).  Pub. L. 100–647, §\u202f1012(bb)(6)(A) , added subsec. (g).\n1986—Subsec. (b)(1)(F)(i).  Pub. L. 99–514, §\u202f1876(b)(2)(A) , inserted “in the case of a shareholder which is a C corporation,”.\nSubsec. (b)(1)(F)(ii).  Pub. L. 99–514, §\u202f1876(b)(2)(B) , substituted “ 16 ⁄ 17  of the excess referred to in clause (i),” for “the amount determined under clause (i)”.\nSubsec. (f)(4) to (6).  Pub. L. 99–514, §\u202f1876(p)(1) , redesignated as pars. (4), (5), and (6), respectively, former par. (3) relating to base period T-bill rate, (4) relating to short years, and (5) relating to payment and assessment and collection of interest.\nSubsec. (f)(7).  Pub. L. 99–514, §\u202f1876(g) , added par. (7).\n1984—Subsec. (b)(1)(E).  Pub. L. 98–369, §\u202f802(b)(1) , substituted “of the DISC attributable to qualified export receipts of the DISC for the taxable year which exceed $10,000,000” for “for the taxable year attributable to base period export gross receipts (as defined in subsection (e))”.\nSubsec. (b)(1)(F)(i).  Pub. L. 98–369, §\u202f68(d) , substituted “one-seventeenth” for “one/half”.\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f802(b)(2) , added par. (4).\nSubsec. (e).  Pub. L. 98–369, §\u202f802(a)(1) , (2), redesignated subsec. (g) as (e). Former subsec. (e), which related to definitions and special rules relating to computation of taxable income attributable to base period export gross receipts, was struck out.\nSubsec. (f).  Pub. L. 98–369, §\u202f802(a)(1) , (3), added subsec. (f). Former subsec. (f), which related to small DISCs, was struck out.\nSubsec. (g).  Pub. L. 98–369, §\u202f802(a)(2) , redesignated subsec. (g) as (e).\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f703(i)(1) , (2), substituted in subpar. (G) “subsection (d)” for “subsection (D)”, and in provisions following subpar. (G) “income” for “gross income (taxable income in the case of subparagraph (D))” and “subparagraph (G)” for “subparagraph (E)”.\nSubsec. (c)(1).  Pub. L. 95–600, §\u202f701(u)(12)(B) , inserted provision relating to application of subpar. (C).\n1976—Subsec. (b)(1)(C).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231” after “treated as”.\nSubsec. (b)(1)(D), (E).  Pub. L. 94–455, §\u202f1101(a)(1) , added subpars. (D) and (E) and redesignated former subpars. (D) and (E) as (F) and (G), respectively.\nSubsec. (b)(1)(F).  Pub. L. 94–455 , §§\u202f1063(a), 1065(a)(2), 1101(a)(1), redesignated former subpar. (D) as (F), made existing provision cl. (i), added cls. (ii) and (iii), and substituted “(C), (D), and (E)” for “(C)” after “(B), and”.\nSubsec. (b)(1)(G).  Pub. L. 94–455, §\u202f1101(a)(1) , redesignated former subpar. (E) as (G).\nSubsec. (b)(2)(B).  Pub. L. 94–455, §\u202f1101(a)(2) , substituted “more than twice the number” for “more than the number” after “no case over”.\nSubsec. (b)(3).  Pub. L. 94–455, §\u202f1101(a)(3) , added par. (3).\nSubsec. (c).  Pub. L. 94–455, §\u202f1101(d)(1) , redesignated existing provisions as pars. (1) and (2) and, as redesignated, added subpar. (1)(C).\nSubsec. (d)(5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsecs. (e) to (g).  Pub. L. 94–455, §\u202f1101(a)(4) , added subsecs. (e) to (g).\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title X, §\u202f1012(bb)(6)(B) ,  Nov. 10, 1988 ,  102 Stat. 3536 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after  December 31, 1987 .”\nAmendment by  section 1006(e)(15) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 68(d) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1984 , see  section 68(e)(1) of Pub. L. 98–369 , set out as a note under  section 291 of this title .\nAmendment by section 802(a), (b) of  Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nPub. L. 95–600, title VII, §\u202f701(u)(12)(C) ,  Nov. 6, 1978 ,  92 Stat. 2918 , provided that:  “The amendment made by subparagraph (B) [amending this section] shall apply to dispositions made after  December 31, 1976 , in taxable years ending after such date.”\nAmendment by section 703(i)(1), (2) of  Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  section 1063(a) of Pub. L. 94–455  applicable to participation in or cooperation with an international boycott more than 30 days after  Oct. 4, 1976 , with special provisions for existing contracts, see  section 1066(a) of Pub. L. 94–455 , set out as a note under  section 908 of this title .\nAmendment by  section 1065(a)(2) of Pub. L. 94–455  applicable to payments described in  section 162(c) of this title  made more than 30 days after  Oct. 4, 1976 , see  section 1066(b) of Pub. L. 94–455 , set out as a note under  section 952 of this title .\nPub. L. 94–455, title XI, §\u202f1101(g)(1) ,  Oct. 4, 1976 ,  90 Stat. 1659 , provided that:  “The amendments made by subsections (a) and (e) [amending this section and  section 996 of this title ] shall apply to taxable years beginning after  December 31, 1975 .”\nPub. L. 94–455, title XI, §\u202f1101(g)(4) ,  Oct. 4, 1976 ,  90 Stat. 1659 , as amended by  Pub. L. 95–600, title VII, §\u202f701(u)(12)(A) ,  Nov. 6, 1978 ,  92 Stat. 2918 , provided that:  “The amendments made by subsection (d) [amending this section and  section 751 of this title ] shall apply to sales, exchanges, or other dispositions after  December 31, 1976 , in taxable years ending after such date.”\nAmendment by  section 1901(b)(3)(K) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 94–455, title XI, §\u202f1101(g)(5) ,  Oct. 4, 1976 ,  90 Stat. 1659 , as amended by  Pub. L. 95–600, title VII, §\u202f703(i)(4) ,  Nov. 6, 1978 ,  92 Stat. 2940 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “For purposes of determining adjusted base period export gross receipts (under section 995(e)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this section), if any DISC has export gross receipts from export property by reason of paragraph (2) of section 603(b) of the Tax Reduction Act of 1975, [set out as an Effective Date of 1975 Amendment note under  section 993 of this title ], then the export gross receipts of such DISC for the taxable years of the base period shall be increased by an amount equal to the amount of gross receipts which were excluded from export gross receipts during each taxable year of the base period by reason of the last sentence of section 995(e)(3) of such Code multiplied by a fraction, the numerator of which is the amount of the gross receipts in the taxable year which are export gross receipts by reason of paragraph (2) of section 603(b) of the Tax Reduction Act of 1975 and the denominator of which is the amount of total gross receipts which are excluded from export gross receipts in the taxable year by reason of subparagraph (C) or (D) of paragraph (2) of section 993(c) (determined without regard to paragraph (2) of section 603(b) of the Tax Reduction Act of 1975).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DOMESTIC INTERNATIONAL SALES CORPORATIONS'},
  'content': 'Amounts distributed out of previously taxed income shall be excluded by the distributee from gross income except for gains described in subsection (e)(2), and shall reduce the amount of the previously taxed income.\nAny actual distribution made during a taxable year shall be treated as being made subsequent to any deemed distribution made during such year. Any actual distribution made pursuant to section 992(c) (relating to distributions to meet qualification requirements) shall be treated as being made before any other actual distributions during the taxable year.\nIf section 995(c) applies to a redemption of stock in a DISC or former DISC, the accumulated DISC income shall be reduced by an amount equal to the gain described in section 995(c) with respect to such stock which is (or has been) treated as ordinary income, except to the extent distributions with respect to such stock have been treated under paragraph (1).\nAmounts representing deemed distributions as provided in section 995(b) shall increase the basis of the stock with respect to which the distribution is made.\nThe portion of an actual distribution made out of previously taxed income shall reduce the basis of the stock with respect to which it is made, and to the extent that it exceeds the adjusted basis of such stock, shall be treated as gain from the sale or exchange of property. In the case of stock includible in the gross estate of a decedent for which an election is made under section 2032 (relating to alternate valuation), this paragraph shall not apply to any distribution made after the date of the decedent’s death and before the alternate valuation date provided by section 2032.\nThe earnings and profits derived by a corporation during a taxable year in which such corporation is a DISC, before reduction for any distributions during the year, but reduced by amounts deemed distributed under section 995(b)(1), shall constitute the DISC income for such year. The earnings and profits of a DISC for a taxable year include any amounts includible in such DISC’s gross income pursuant to section 951(a) for such year. Accumulated DISC income shall be reduced by deemed distributions under section 995(b)(2).\nEarnings and profits deemed distributed under section 995(b) for a taxable year shall constitute previously taxed income for such year.\nThe earnings and profits for a taxable year which are described in neither paragraph (1) nor (2) shall constitute the other earnings and profits for such year.\nIn the case of a shareholder who is a nonresident alien individual or a foreign corporation, trust, or estate, gains referred to in section 995(c) and all distributions out of accumulated DISC income including deemed distributions shall be treated as gains and distributions which are effectively connected with the conduct of a trade or business conducted through a permanent establishment of such shareholder within the United States and which are derived from sources within the United States.\n1986—Subsec. (a)(2).  Pub. L. 99–514  inserted last sentence and struck out former last sentence which read as follows: “In the case of any amount of any actual distribution made pursuant to section 992(c) which is required to satisfy the condition of section 992(a)(1)(A), the preceding sentence shall apply to one-half of such amount, and paragraph (1) shall apply to the remaining one-half of such amount.”\n1984—Subsec. (g).  Pub. L. 98–369  inserted “and which are derived from sources within the United States”.\n1978—Subsec. (a)(2).  Pub. L. 95–600  substituted “section (b)(1)(G)” for “section (b)(1)(E)”.\n1976—Subsec. (a)(2).  Pub. L. 94–455, §\u202f1101(e) , inserted at end “In the case of any amount of any actual distribution made pursuant to section 992(c) which is required to satisfy the condition of section 992(a)(1)(A), the preceding sentence shall apply to one-half of such amount, and paragraph (1) shall apply to the remaining one-half of such amount.”\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(b)(3)(I) , substituted “ordinary income” for “gain from the sale or exchange of property which is not a capital asset” in par. (1)(A) after “dividend or as” and, in par. (2), after “treated as”.\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to distributions on or after  June 22, 1984 , see  section 805(a)(3) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  section 1101(e) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 1101(g)(1) of Pub. L. 94–455 , set out as a note under  section 905 of this title .\nAmendment by  section 1901(b)(3)(I) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INTERNATIONAL BOYCOTT DETERMINATIONS'},
  'content': 'A taxpayer shall report whether he, a foreign corporation of which he is a United States shareholder, or any member of a controlled group which includes the taxpayer or such foreign corporation has participated in or cooperated with an international boycott at any time during the taxable year, or has been requested to participate in or cooperate with such a boycott, and, if so, the nature of any operation in connection with which there was participation in or cooperation with such boycott (or there was a request to participate or cooperate).\nThe Secretary shall maintain and publish not less frequently than quarterly a current list of countries which require or may require participation in or cooperation with an international boycott (within the meaning of subsection (b)(3)).\nIf the person or a member of a controlled group (within the meaning of section 993(a)(3)) which includes the person participates in or cooperates with an international boycott in the taxable year, all operations of the taxpayer or such group in that country and in any other country which requires participation in or cooperation with the boycott as a condition of doing business within that country, or with the government, a company, or a national of that country, shall be treated as operations in connection with which such participation or cooperation occurred, except to the extent that the person can clearly demonstrate that a particular operation is a clearly separate and identifiable operation in connection with which there was no participation in or cooperation with an international boycott.\nA clearly separate and identifiable operation of a person, or of a member of the controlled group (within the meaning of section 993(a)(3)) which includes that person, in or related to any country within the group of countries referred to in paragraph (1) shall not be treated as an operation in or related to a group of countries associated in carrying out an international boycott if the person can clearly demonstrate that he, or that such member, did not participate in or cooperate with the international boycott in connection with that operation.\nA taxpayer may show that different operations within the same country, or operations in different countries, are clearly separate and identifiable operations.\nFor purposes of sections 908(a), 952(a)(3), and 995(b)(1)(F)(ii), the international boycott factor is a fraction, determined under regulations prescribed by the Secretary, the numerator of which reflects the world-wide operations of a person (or, in the case of a controlled group (within the meaning of section 993(a)(3)) which includes that person, of the group) which are operations in or related to a group of countries associated in carrying out an international boycott in or with which that person or a member of that controlled group has participated or cooperated in the taxable year, and the denominator of which reflects the world-wide operations of that person or group.\nIf the taxpayer clearly demonstrates that the foreign taxes paid and income earned for the taxable year are attributable to specific operations, then, in lieu of applying the international boycott factor for such taxable year, the amount of the credit disallowed under section 908(a), the addition to subpart F income under section 952(a)(3), and the amount of deemed distribution under section 995(b)(1)(F)(ii) for the taxable year, if any, shall be the amount specifically attributable to the operations in which there was participation in or cooperation with an international boycott under section 999(b)(1).\nFor purposes of this subsection, the term “world-wide operations” means operations in or related to countries other than the United States.\nUpon a request made by the taxpayer, the Secretary shall issue a determination with respect to whether a particular operation of a person, or of a member of a controlled group which includes that person, constitutes participation in or cooperation with an international boycott. The Secretary may issue such a determination in advance of such operation in cases which are of such a nature that an advance determination is possible and appropriate under the circumstances. If the request is made before the operation is commenced, or before the end of a taxable year in which the operation is carried out, the Secretary may decline to issue such a determination before close of the taxable year.\nAny person (within the meaning of section 6671(b)) required to report under this section who willfully fails to make such report shall, in addition to other penalties provided by law, be fined not more than $25,000, imprisoned for not more than one year, or both.\n2004—Subsec. (c)(1).  Pub. L. 108–357  struck out “941(a)(5),” after “sections 908(a),”.\n2000—Subsec. (c)(1).  Pub. L. 106–519  inserted “941(a)(5),” after “908(a),”.\n1986—Subsec. (c)(1), (2).  Pub. L. 99–514  repealed  section 802(c)(3) of Pub. L. 98–369  thereby restoring former text. See 1984 Amendment note below.\n1984—Subsec. (c)(1), (2).  Pub. L. 98–369  which substituted “995(b)(1)(F)(i)” for “995(b)(1)(F)(ii)” wherever appearing was repealed. See 1986 Amendment note above.\n1978—Subsec. (c)(1).  Pub. L. 95–600, §\u202f703(h)(2) , substituted “995(b)(1)(F)(ii)” for “995(b)(3)”.\nSubsec. (c)(2).  Pub. L. 95–600, §\u202f703(h)(3) , substituted “995(b)(1)(F)(ii)” for “995(b)(1)(D)(ii)”.\nAmendment by  Pub. L. 108–357  applicable to transactions after  Dec. 31, 2004 , see  section 101(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 106–519  applicable to transactions after  Sept. 30, 2000 , with special rules relating to existing foreign sales corporations, see  section 5 of Pub. L. 106–519 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nSection applicable to participation in or cooperation with an international boycott more than 30 days after  Oct. 4, 1976 , with special provisions for existing contracts, see  section 1066(a) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 908 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 94–455, title X, §\u202f1067 ,  Oct. 4, 1976 ,  90 Stat. 1654 , as amended by  Pub. L. 98–369, div. A, title IV, §\u202f441(c) ,  July 18, 1984 ,  98 Stat. 815 , which required the Secretary to transmit a report every four years to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate relating to reports filed under  section 999(a) of this title  and describing the administration of provisions relating to international boycott activity, terminated, effective  May 15, 2000 , pursuant to  section 3003 of Pub. L. 104–66 , as amended, set out as a note under  section 1113 of Title 31 , Money and Finance. See, also, page 141 of House Document No. 103–7.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF AMOUNT OF AND RECOGNITION OF GAIN OR LOSS'},
  'content': 'The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized.\nExcept as otherwise provided in this subtitle, the entire amount of the gain or loss, determined under this section, on the sale or exchange of property shall be recognized.\nNothing in this section shall be construed to prevent (in the case of property sold under contract providing for payment in installments) the taxation of that portion of any installment payment representing gain or profit in the year in which such payment is received.\nIn determining gain or loss from the sale or other disposition of a term interest in property, that portion of the adjusted basis of such interest which is determined pursuant to section 1014, 1015, or 1041 (to the extent that such adjusted basis is a portion of the entire adjusted basis of the property) shall be disregarded.\nParagraph (1) shall not apply to a sale or other disposition which is a part of a transaction in which the entire interest in property is transferred to any person or persons.\n1993—Subsec. (f).  Pub. L. 103–66  struck out heading and text of subsec. (f). Text read as follows: “For treatment of certain expenses incident to the sale of a residence which were deducted as moving expenses by the taxpayer or his spouse under section 217(a), see section 217(e).”\n1984—Subsec. (e)(1).  Pub. L. 98–369  inserted reference to section 1041.\n1980—Subsec. (e)(1).  Pub. L. 96–223  repealed the amendment made by  Pub. L. 95–600 . See 1978 Amendment note below.\n1978—Subsec. (e)(1).  Pub. L. 95–600  inserted reference to section 1023. See Repeals note below.\n1976—Subsec. (c).  Pub. L. 94–455  substituted provision recognizing the entire amount of gain or loss, except as otherwise provided, for provision referring to section 1002 for the determination of the extent of gain or loss to be recognized.\n1969—Subsec. (e).  Pub. L. 91–172, §\u202f516(a) , added subsec. (e).\nSubsec. (f).  Pub. L. 91–172, §\u202f231(c)(2) , added subsec. (f).\nAmendment by  Pub. L. 103–66  applicable to expenses incurred after  Dec. 31, 1993 , see  section 13213(e) of Pub. L. 103–66  set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nAmendment by  Pub. L. 96–223  (repealing  section 702(c)(9) of Pub. L. 95–600  and the amendment made thereby, which had amended this section) applicable in respect of decedents dying after  Dec. 31, 1976 , and except for certain elections, this title to be applied and administered as if those repealed provisions had not been enacted, see section 401(b), (e) of  Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nAmendment by  Pub. L. 95–600  effective as if included in the amendments and additions made by, and the appropriate provisions of  Pub. L. 94–455 , see  section 702(c)(10) of Pub. L. 95–600 , set out as a note under  section 1014 of this title .\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 231(c)(2) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 231(d) of Pub. L. 91–172 , set out as a note under  section 217 of this title .\nPub. L. 91–172, title V, §\u202f516(d) ,  Dec. 30, 1969 ,  83 Stat. 648 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendment made by subsection (a) [amending this section] shall apply to sales or other dispositions after  October 9, 1969 . \n \n “(2)  The amendment made by subsection (b) [amending  section 1231 of this title ] shall apply to taxable years beginning after  December 31, 1969 . \n \n “(3)  The amendments made by subsection (c) [enacting section 1253 and amending sections 162 and 1016 of this title] shall apply to transfers after  December 31, 1969 , except that section 1253(d)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (c) shall, at the election of the taxpayer (made at such time and in such manner as the Secretary or his delegate may by regulations prescribe), apply to transfers before  January 1, 1970 , but only with respect to payments made in taxable years ending after  December 31, 1969 , and beginning before  January 1, 1980 .”\nPub. L. 95–600, §\u202f702(c)(9) , cited as a credit to this section, and the amendment made thereby, were repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  94 Stat. 299 , resulting in the text of this section reading as it read prior to enactment of section 702(c)(9). See Effective Date of 1980 Amendment and Revival of Prior Law note set out above.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DETERMINATION OF AMOUNT OF AND RECOGNITION OF GAIN OR LOSS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 295 , related to the recognition of the entire amount of gain or loss determined under section 1001 on the sale or exchange of property.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other applicable sections of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016.\nIf a deduction is allowable under section 170 (relating to charitable contributions) by reason of a sale, then the adjusted basis for determining the gain from such sale shall be that portion of the adjusted basis which bears the same ratio to the adjusted basis as the amount realized bears to the fair market value of the property.\n1969— Pub. L. 91–172  redesignated existing provisions as subsec. (a) and added subsec. (b).\nAmendment by  Pub. L. 91–172  applicable with respect to sales made after  Dec. 19, 1969 , see  section 201(g)(6) of Pub. L. 91–172 , set out as a note under  section 170 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).\nThe cost of real property shall not include any amount in respect of real property taxes which are treated under section 164(d) as imposed on the taxpayer.\nIn the case of the sale, exchange, or other disposition of a specified security on or after the applicable date, the conventions prescribed by regulations under this section shall be applied on an account by account basis.\nExcept as provided in subparagraph (B), any stock for which an average basis method is permissible under this section which is acquired before  January 1, 2012 , shall be treated as a separate account from any such stock acquired on or after such date.\nFor purposes of this section, the terms “specified security” and “applicable date” shall have the meaning given such terms in section 6045(g).\nIn the case of any stock acquired after  December 31, 2011 , in connection with a dividend reinvestment plan, the basis of such stock while held as part of such plan shall be determined using one of the methods which may be used for determining the basis of stock in a regulated investment company.\nIn the case of the transfer to another account of stock to which paragraph (1) applies, such stock shall have a cost basis in such other account equal to its basis in the dividend reinvestment plan immediately before such transfer (properly adjusted for any fees or other charges taken into account in connection with such transfer).\nRules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.\nNotwithstanding paragraph (1), in the case of an election under rules similar to the rules of subsection (c)(2)(B) with respect to stock held in connection with a dividend reinvestment plan, the average basis method is permissible with respect to all such stock without regard to the date of the acquisition of such stock.\nThe term “dividend reinvestment plan” means any arrangement under which dividends on any stock are reinvested in stock identical to the stock with respect to which the dividends are paid.\nStock shall be treated as acquired in connection with a dividend reinvestment plan if such stock is acquired pursuant to such plan or if the dividends paid on such stock are subject to such plan.\n2014—Subsec. (c)(2).  Pub. L. 113–295, §\u202f210(f)(1)(A) , substituted “regulated investment companies” for “funds” in heading.\nSubsec. (c)(2)(A).  Pub. L. 113–295, §\u202f220(n) , substituted “this section” for “section 1012”.\nSubsec. (c)(2)(B).  Pub. L. 113–295, §\u202f210(f)(1)(C) , substituted “regulated investment company” for “fund” wherever appearing.\nPub. L. 113–295, §\u202f210(f)(1)(B) , struck out “fund” after “Election” in heading.\nSubsec. (d)(1).  Pub. L. 113–295, §\u202f210(f)(2) , substituted “ December 31, 2011 ” for “ December 31, 2010 ” and “a regulated investment company” for “an open-end fund”.\nSubsec. (d)(3).  Pub. L. 113–295, §\u202f210(f)(3) , amended par. (3) generally. Prior to amendment, text read as follows: “Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.”\n2008— Pub. L. 110–343  designated first sentence as subsec. (a) and second sentence as subsec. (b), inserted headings, and added subsecs. (c) and (d).\nAmendment by section 210(f)(1)–(3) of  Pub. L. 113–295  effective as if included in the provisions of the Energy Improvement and Extension Act of 2008,  Pub. L. 110–343, div. B , to which such amendment relates, see  section 210(h) of Pub. L. 113–295 , set out as a note under  section 45 of this title .\nPub. L. 110–343, div. B, title IV, §\u202f403(e) ,  Oct. 3, 2008 ,  122 Stat. 3860 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting sections 6045A and 6045B of this title and amending this section and sections 6045 and 6724 of this title] shall take effect on  January 1, 2011 . \n \n “(2)   Extension of period for statements sent to customers .— The amendments made by subsection (a)(3) [amending  section 6045 of this title ] shall apply to statements required to be furnished after  December 31, 2008 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'If the property should have been included in the last inventory, the basis shall be the last inventory value thereof.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'This section shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691.\nIf stock owned by a decedent in a DISC or former DISC (as defined in section 992(a)) acquires a new basis under subsection (a), such basis (determined before the application of this subsection) shall be reduced by the amount (if any) which would have been included in gross income under section 995(c) as a dividend if the decedent had lived and sold the stock at its fair market value on the estate tax valuation date. In computing the gain the decedent would have had if he had lived and sold the stock, his basis shall be determined without regard to the last sentence of section 996(e)(2) (relating to reductions of basis of DISC stock). For purposes of this subsection, the estate tax valuation date is the date of the decedent’s death or, in the case of an election under section 2032, the applicable valuation date prescribed by that section.\nThe term “appreciated property” means any property if the fair market value of such property on the day it was transferred to the decedent by gift exceeds its adjusted basis.\nIn the case of any appreciated property described in subparagraph (A) of paragraph (1) sold by the estate of the decedent or by a trust of which the decedent was the grantor, rules similar to the rules of paragraph (1) shall apply to the extent the donor of such property (or the spouse of such donor) is entitled to the proceeds from such sale.\nParagraph (1) shall only apply to any property whose inclusion in the decedent’s estate increased the liability for the tax imposed by chapter 11 (reduced by credits allowable against such tax) on such estate.\nThe Secretary may by regulations provide exceptions to the application of this subsection.\nSection 811 of the Internal Revenue Code of 1939, referred to in subsec. (b)(6), was classified to section 811 of former Title 26, Internal Revenue Code. For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title . See, also,  section 7851(e) of this title  for provision that references in the 1986 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1986 Code, which is then applicable.\nThe Internal Revenue Code of 1939, referred to in subsec. (b)(9), is  act Feb. 10, 1939, ch. 2 ,  53 Stat. 1 . Prior to the enactment of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the 1939 Code was classified to former Title 26, Internal Revenue Code. For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title .\n2015—Subsec. (f).  Pub. L. 114–41  added subsec. (f).\n2014—Subsec. (a)(2).  Pub. L. 113–295, §\u202f221(a)(74)(A) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “in the case of an election under either section 2032 or section 811(j) of the Internal Revenue Code of 1939 where the decedent died after  October 21, 1942 , its value at the applicable valuation date prescribed by those sections,”.\nSubsec. (b)(7), (8).  Pub. L. 113–295, §\u202f221(a)(74)(B) , struck out pars. (7) and (8). Prior to repeal, par. (7) related to property representing a surviving spouse’s one-half share of community property held by the surviving spouse and a decedent dying after  Oct. 21, 1942 , and on or before  Dec. 31, 1947 , and par. (8) related to property representing certain interests of the survivor in a joint and survivor’s annuity in the case of a decedent dying after  Dec. 31, 1950 , and before  Jan. 1, 1954 .\n2010—Subsec. (f).  Pub. L. 111–312  amended section to read as if amendment by  Pub. L. 107–16, §\u202f541 , had never been enacted. See 2001 Amendment note below. Prior to amendment, text of subsec. (f) read as follows: “This section shall not apply with respect to decedents dying after  December 31, 2009 .”\n2004—Subsec. (b)(5).  Pub. L. 108–357  inserted “and before  January 1, 2005 ,” after “ August 26, 1937 ,”.\n2001—Subsec. (f).  Pub. L. 107–16, §\u202f541 , added subsec. (f).\n1997—Subsec. (a).  Pub. L. 105–34  struck out “or” at end of pars. (1) and (2), struck out the period at end of par. (3) and inserted “,\u2000or”, and added par. (4).\n1983—Subsec. (b)(10).  Pub. L. 97–448  added par. (10).\n1981—Subsec. (e).  Pub. L. 97–34  added subsec. (e).\n1980—Subsec. (a)(3).  Pub. L. 96–222  substituted “section 2032A” for “section 2032.1”.\nSubsec. (d).  Pub. L. 96–223  repealed the amendment made by  Pub. L. 94–455, §\u202f2005(a)(1) . See 1976 Amendment note below.\n1978—Subsec. (a).  Pub. L. 95–600, §\u202f702(c)(1)(A) , designated existing provisions as pars. (1) and (2) and added par. (3).\nSubsec. (d).  Pub. L. 95–600, §\u202f515(1) , substituted “ December 31, 1979 ” for “ December 31, 1976 ” in heading and text.\n1976—Subsec. (b)(6), (7).  Pub. L. 94–455, §\u202f1901(c)(8) , struck out “Territory,” after “under the community property laws of any State,”.\nSubsec. (d).  Pub. L. 94–455, §\u202f2005(a)(1) , substituted provision relating to the applicability of this section to decedents dying after 1976 for provision relating to a special rule with respect to DISC stock. See Repeals note below.\n1971—Subsec. (d).  Pub. L. 92–178  added subsec. (d).\n1958—Subsec. (d).  Pub. L. 85–320  repealed subsec. (d) which made section inapplicable to restricted stock options described in section 421 which the employee has not exercised at death.\nPub. L. 114–41, title II, §\u202f2004(d) ,  July 31, 2015 ,  129 Stat. 456 , provided that:  “The amendments made by this section [enacting  section 6035 of this title  and amending this section and sections 6662 and 6724 of this title] shall apply to property with respect to which an estate tax return is filed after the date of the enactment of this Act [ July 31, 2015 ].”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 105–34, title V, §\u202f508(e)(1) ,  Aug. 5, 1997 ,  111 Stat. 860 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 2031 of this title ] shall apply to estates of decedents dying after  December 31, 1997 .”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title IV, §\u202f425(b) ,  Aug. 13, 1981 ,  95 Stat. 318 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property acquired after the date of the enactment of this Act [ Aug. 13, 1981 ] by decedents dying after  December 31, 1981 .”\nAmendment by  Pub. L. 96–223  (repealing  section 2005(a)(1) of Pub. L. 94–455  and the amendment made thereby, which had amended this section) applicable in respect of decedents dying after  Dec. 31, 1976 , and except for certain elections, this title to be applied and administered as if those repealed provisions had not been enacted, see section 401(b), (e) of  Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as an Effective Date of 1980 Amendment note under  section 32 of this title .\nPub. L. 95–600, title VII, §\u202f702(c)(10) ,  Nov. 6, 1978 ,  92 Stat. 2928 , provided that:  “The amendments made by this subsection [amending this section and sections 1001, 1223, and 2614 of this title] shall take effect as if included in the amendments and additions made by, and the appropriate provisions of the Tax Reform Act of 1976 [ Pub. L. 94–455 ,  Oct. 4, 1976 , 90 Stat 1525].”\nAmendment by  section 1901(c)(8) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 2005(a)(1) of Pub. L. 94–455  applicable in respect of decedents dying after  Dec. 31, 1976 , see  section 2005(f) of Pub. L. 94–455 , set out as an Effective Date note under  section 1015 of this title .\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before Jan. 1972, see  section 507 of Pub. L. 92–178 , set out as a note under  section 991 of this title .\nAmendment by  Pub. L. 85–320  applicable with respect to taxable years ending after  Dec. 31, 1956 , but only in the case of employees dying after such date, see  section 3 of Pub. L. 85–320 , set out as a note under  section 421 of this title .\nPub. L. 94–455, §\u202f2005(a)(1) , cited as a credit to this section, and the amendment made thereby, were repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  94 Stat. 299 , resulting in the text of this section reading as it read prior to enactment of section 2005(a)(1). See Effective Date of 1980 Amendments and Revival of Prior Law note above.\nPub. L. 96–223, title IV, §\u202f401(d) ,  Apr. 2, 1980 ,  94 Stat. 300 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Notwithstanding any other provision of law, in the case of a decedent dying after  December 31, 1976 , and before  November 7, 1978 , the executor (within the meaning of section 2203 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) of such decedent’s estate may irrevocably elect, within 120 days following the date of enactment of this Act [ Apr. 2, 1980 ] and in such manner as the Secretary of the Treasury or his delegate shall prescribe, to have the basis of all property acquired from or passing from the decedent (within the meaning of section 1014(b) of the Internal Revenue Code of 1986) determined for all purposes under such Code as though the provisions of section 2005 of the Tax Reform Act of 1976 [ Pub. L. 94–455 ] (as amended by the provisions of section 702(c) of the Revenue Act of 1978 [ Pub. L. 95–600 ] applied to such property acquired or passing from such decedent.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'If the property was acquired by gift after  December 31, 1920 , the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis (adjusted for the period before the date of the gift as provided in section 1016) is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value. If the facts necessary to determine the basis in the hands of the donor or the last preceding owner are unknown to the donee, the Secretary shall, if possible, obtain such facts from such donor or last preceding owner, or any other person cognizant thereof. If the Secretary finds it impossible to obtain such facts, the basis in the hands of such donor or last preceding owner shall be the fair market value of such property as found by the Secretary as of the date or approximate date at which, according to the best information that the Secretary is able to obtain, such property was acquired by such donor or last preceding owner.\nIf the property was acquired after  December 31, 1920 , by a transfer in trust (other than by a transfer in trust by a gift, bequest, or devise), the basis shall be the same as it would be in the hands of the grantor increased in the amount of gain or decreased in the amount of loss recognized to the grantor on such transfer under the law applicable to the year in which the transfer was made.\nIf the property was acquired by gift or transfer in trust on or before  December 31, 1920 , the basis shall be the fair market value of such property at the time of such acquisition.\nFor purposes of paragraph (1), the amount of gift tax paid with respect to any gift is an amount which bears the same ratio to the amount of gift tax paid under chapter 12 with respect to all gifts made by the donor for the calendar year (or preceding calendar period) in which such gift is made as the amount of such gift bears to the taxable gifts (as defined in section 2503(a) but computed without the deduction allowed by section 2521) made by the donor during such calendar year or period. For purposes of the preceding sentence, the amount of any gift shall be the amount included with respect to such gift in determining (for the purposes of section 2503(a)) the total amount of gifts made during the calendar year or period, reduced by the amount of any deduction allowed with respect to such gift under section 2522 (relating to charitable deduction) or under section 2523 (relating to marital deduction).\nFor purposes of paragraph (1), where the donor and his spouse elected, under section 2513 to have the gift considered as made one-half by each, the amount of gift tax paid with respect to such gift under chapter 12 shall be the sum of the amounts of tax paid with respect to each half of such gift (computed in the manner provided in paragraph (2)).\nFor purposes of section 1016(b), an increase in basis under paragraph (1) shall be treated as an adjustment under section 1016(a).\nWith respect to any property acquired by gift before 1955, references in this subsection to any provision of this title shall be deemed to refer to the corresponding provision of the Internal Revenue Code of 1939 or prior revenue laws which was effective for the year in which such gift was made.\nFor purposes of paragraph (1), the net appreciation in value of any gift is the amount by which the fair market value of the gift exceeds the donor’s adjusted basis immediately before the gift.\nIn the case of any property acquired by gift in a transfer described in section 1041(a), the basis of such property in the hands of the transferee shall be determined under section 1041(b)(2) and not this section.\nSection 2521, referred to in subsec. (d)(2), was repealed by  Pub. L. 94–455, title XX, §\u202f2001(b)(3) ,  Oct. 4, 1976 ,  90 Stat. 1849 .\nThe Internal Revenue Code of 1939, referred to in subsec. (d)(5), is  act Feb. 10, 1939, ch. 2 ,  53 Stat. 1 . Prior to the enactment of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the 1939 Code was classified to former Title 26, Internal Revenue Code. For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title .\n1984—Subsec. (e).  Pub. L. 98–369  added subsec. (e).\n1981—Subsec. (d)(2).  Pub. L. 97–34  substituted “calendar year (or preceding calendar period)” for “calendar quarter (or calendar year if the gift was made before  January 1, 1971 )” and “calendar year or period” for “calendar quarter or year” in two places.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” in four places.\nSubsec. (d)(1)(A), (B).  Pub. L. 94–455, §\u202f1901(a)(122) , substituted “ September 2, 1958 ” for “the date of enactment of the Technical Amendments Act of 1958”.\nSubsec. (d)(6).  Pub. L. 94–455, §\u202f2005(c) , added par. (6).\n1970—Subsec. (d)(2).  Pub. L. 91–614  substituted “calendar quarter (or calendar year if the gift was made before  January 1, 1971 )” for “calendar year” the first place it appears and “calendar quarter or year” for “calendar year” every other place it appears.\n1958—Subsec. (d).  Pub. L. 85–866  added subsec. (d).\nAmendment by  Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nAmendment by  section 1901(a)(122) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XX, §\u202f2005(f) ,  Oct. 4, 1976 ,  90 Stat. 1878 , as amended by  Pub. L. 95–600, title V, §\u202f515(6) ,  Nov. 6, 1978 ,  92 Stat. 2884 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by this section [enacting sections 1023, 1040, 6039A, and 6694 of this title, amending sections 691, 1016, and 1246 of this title, and renumbering former section 1023 as 1024] shall apply in respect of decedents dying after  December 31, 1979 . \n \n “(2)  The amendment made by subsection (c) [amending this section] shall apply to gifts made after  December 31, 1976 .”\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'Whenever it appears that the basis of property in the hands of the taxpayer is a substituted basis, then the adjustments provided in subsection (a) shall be made after first making in respect of such substituted basis proper adjustments of a similar nature in respect of the period during which the property was held by the transferor, donor, or grantor, or during which the other property was held by the person for whom the basis is to be determined. A similar rule shall be applied in the case of a series of substituted bases.\nFor purposes of subparagraph (A), the term “partial disposition” means any disposition or cessation to which subsection (c)(2)(D), (h)(1)(B), or (i)(1)(B) of section 2032A applies.\nAny increase in basis under this subsection shall be deemed to have occurred immediately before the disposition or cessation resulting in the imposition of the tax under section 2032A(c)(1).\nIf the tax under section 2032A(c)(1) is imposed with respect to qualified replacement property (as defined in section 2032A(h)(3)(B)) or qualified exchange property (as defined in section 2032A(i)(3)), the increase in basis under paragraph (1) shall be made by reference to the property involuntarily converted or exchanged (as the case may be).\nAn election under this subsection shall be made at such time and in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.\nIf an election is made under this subsection with respect to any additional estate tax imposed under section 2032A(c)(1), for purposes of section 6601 (relating to interest on underpayments), the last date prescribed for payment of such tax shall be deemed to be the last date prescribed for payment of the tax imposed by section 2001 with respect to the estate of the decedent (as determined for purposes of section 6601).\nFor treatment of separate mineral interests as one property, see section 614.\nSection 1020, referred to in subsec. (a)(2), was repealed by  Pub. L. 94–455, title XIX, §\u202f1901(a)(125) ,  Oct. 4, 1976 ,  90 Stat. 1784 .\nThe Tax Reform Act of 1976, referred to in subsec. (a)(2), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 , which was enacted  Oct. 4, 1976 . For complete classification of this Act to the Code, see Tables.\nThe Tax Reform Act of 1986, referred to in subsec. (a)(3)(D), is  Pub. L. 99–514 ,  Oct. 22, 1986 ,  100 Stat. 2085 . Part II of subchapter L of this chapter was repealed and part III of subchapter L of this chapter was redesignated as part II by  Pub. L. 99–514, title X, §\u202f1024(a)(1) , (2),  Oct. 22, 1986 ,  100 Stat. 2405 .\nThe Revenue Act of 1918 ( 40 Stat. 1057 ), referred to in subsec. (a)(4), is  act Feb. 24, 1919, ch. 18 ,  40 Stat. 1057 . For complete classification of this Act to the Code, see Tables.\nThe Revenue Act of 1921 ( 42 Stat. 227 ), referred to in subsec. (a)(4), is  act Nov. 23, 1921, ch. 136 ,  42 Stat. 227 . For complete classification of this Act to the Code, see Tables.\nSection 218 of the Revenue Act of 1918 or 1921, referred to in subsec. (a)(4), was not classified to the Code.\nThe date of the enactment of the Taxpayer Relief Act of 1997, referred to in subsec. (a)(7), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nSection 174, referred to in subsec. (a)(14), was amended generally by  Pub. L. 115–97, title I, §\u202f13206(a) ,  Dec. 22, 2017 ,  131 Stat. 2111 . For provisions similar to those in former subsec. (b)(1) of section 174 relating to amortization of certain research and experimental expenditures, see subsecs. (a) and (b) of section 174.\nSection 10909(b)(2)(L) of Pub. L. 111–148 , which directed the amendment of section 1016(a)(26) without specifying the act to be amended, was executed to this section, which is section 1016 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2010 Amendment note below.\n2022—Subsec. (a)(33).  Pub. L. 117–169  substituted “section 25C(g)” for “section 25C(f)”.\n2018—Subsec. (a)(3)(D).  Pub. L. 115–141, §\u202f401(a)(166) , inserted “as in effect prior to its repeal by the Tax Reform Act of 1986” before “(or the corresponding provisions of prior income tax laws)”.\nSubsec. (a)(27).  Pub. L. 115–141, §\u202f401(d)(4)(B)(iv) , struck out par. (27) which read as follows: “in the case of a residence with respect to which a credit was allowed under section 1400C, to the extent provided in section 1400C(h),”.\n2017—Subsec. (a)(1).  Pub. L. 115–97, §\u202f13521(a) , substituted subpars. (A) and (B) for former subpars. (A) and (B) and concluding provisions which read as follows:\n“(A) for taxes or other carrying charges described in section 266, or\n“(B) for expenditures described in section 173 (relating to circulation expenditures),\nfor which deductions have been taken by the taxpayer in determining taxable income for the taxable year or prior taxable years;”.\nSubsec. (a)(23).  Pub. L. 115–97, §\u202f13313(b) , struck out “1044,” after “section 1043,” and “1044(d),” after “section 1043(c),”.\nSubsec. (a)(38).  Pub. L. 115–97, §\u202f13823(b) , added par. (38).\n2014—Subsec. (a)(12).  Pub. L. 113–295, §\u202f221(a)(75) , struck out par. (12) which read as follows: “to the extent provided in section 28(h) of the Internal Revenue Code of 1939 in the case of amounts specified in a shareholder’s consent made under section 28 of such code;”.\nSubsec. (a)(24).  Pub. L. 113–295, §\u202f221(a)(34)(G) , struck out par. (24) which read as follows: “to the extent provided in section 179A(e)(6)(A),”.\nSubsec. (a)(25).  Pub. L. 113–295, §\u202f221(a)(2)(D) , struck out par. (25) which read as follows: “to the extent provided in section 30(e)(1),”.\nSubsec. (a)(37).  Pub. L. 113–295, §\u202f209(j)(2) , substituted “section 30D(f)(1)” for “section 30D(e)(4)”.\n2010—Subsec. (a)(26).  Pub. L. 111–148, §\u202f10909(b)(2)(L) , (c), as amended by  Pub. L. 111–312 , temporarily substituted “36C(g)” for “23(g)”. See Codification note above and Effective and Termination Dates of 2010 Amendment note below.\n2009—Subsec. (a)(25).  Pub. L. 111–5, §\u202f1142(b)(6) , substituted “section 30(e)(1)” for “section 30(d)(1)”.\nPub. L. 111–5, §\u202f1141(b)(3) , which directed amendment of subsec. (a)(25) by substituting “section 30D(f)(1)” for “section 30D(e)(4)”, could not be executed because “section 30D(e)(4)” did not appear in text.\n2008—Subsec. (a)(37).  Pub. L. 110–343  added par. (37).\n2007—Subsec. (a)(31), (32).  Pub. L. 110–172, §\u202f7(a)(1)(C) , redesignated pars. (32) and (33) as (31) and (32), respectively, and struck out former par. (31) which read as follows: “in the case of a facility with respect to which a credit was allowed under section 45H, to the extent provided in section 45H(d),”.\nSubsec. (a)(33).  Pub. L. 110–172, §\u202f11(a)(21) , substituted “section 25C(f)” for “section 25C(e)”.\nPub. L. 110–172, §\u202f7(a)(1)(C) , redesignated par. (34) as (33). Former par. (33) redesignated (32).\nSubsec. (a)(34), (35).  Pub. L. 110–172, §\u202f7(a)(1)(C) , redesignated pars. (35) and (36) as (34) and (35), respectively. Former par. (34) redesignated (33).\nSubsec. (a)(36).  Pub. L. 110–172, §\u202f11(a)(22) , substituted “section 30C(e)(1)” for “section 30C(f)”.\nPub. L. 110–172, §\u202f7(a)(1)(C) , redesignated par. (37) as (36). Former par. (36) redesignated (35).\nSubsec. (a)(37).  Pub. L. 110–172, §\u202f7(a)(1)(C) , redesignated par. (37) as (36).\n2005—Subsec. (a)(23).  Pub. L. 109–135  substituted “1045(b)(3)” for “1045(b)(4)”.\nSubsec. (a)(32).  Pub. L. 109–58, §\u202f1331(b)(1) , added par. (32).\nSubsec. (a)(33).  Pub. L. 109–58, §\u202f1332(c) , added par. (33).\nSubsec. (a)(34).  Pub. L. 109–58, §\u202f1333(b)(1) , added par. (34).\nSubsec. (a)(35).  Pub. L. 109–58, §\u202f1335(b)(4) , added par. (35).\nSubsec. (a)(36).  Pub. L. 109–58, §\u202f1341(b)(2) , added par. (36).\nSubsec. (a)(37).  Pub. L. 109–58, §\u202f1342(b)(2) , added par. (37).\n2004—Subsec. (a)(13).  Pub. L. 108–357, §\u202f413(c)(19) , struck out par. (13) which read as follows: “to the extent provided in section 551(e) in the case of the stock of United States shareholders in a foreign personal holding company;”.\nSubsec. (a)(29).  Pub. L. 108–357, §\u202f245(c)(2) , added par. (29).\nSubsec. (a)(30).  Pub. L. 108–357, §\u202f338(b)(4) , added par. (30).\nSubsec. (a)(31).  Pub. L. 108–357, §\u202f339(d) , added par. (31).\n2001—Subsec. (a)(28).  Pub. L. 107–16  added par. (28).\n2000—Subsec. (a)(23).  Pub. L. 106–554  substituted “1045, or 1397B” for “or 1045” and “1045(b)(4), or 1397B(b)(4)” for “or 1045(b)(4)”.\n1997—Subsec. (a)(7).  Pub. L. 105–34, §\u202f312(d)(6) , inserted “(as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997)” after “section 1034” and “(as so in effect)” after “section 1034(e)”.\nSubsec. (a)(23).  Pub. L. 105–34, §\u202f313(b)(1) , substituted “,\u20001044, or 1045” for “or 1044” and “,\u20001044(d), or 1045(b)(4)” for “or 1044(d)”.\nSubsec. (a)(27).  Pub. L. 105–34, §\u202f701(b)(2) , added par. (27).\n1996—Subsec. (a)(20).  Pub. L. 104–188, §\u202f1704(t)(56) , provided that  section 11813(b)(19) of Pub. L. 101–508  shall be applied as if “Paragraph (20) of section 1016(a), as redesignated by section 11801,” appeared instead of “paragraph (21) of section 1016(a)”. See 1990 Amendment note below.\nSubsec. (a)(26).  Pub. L. 104–188, §\u202f1807(c)(5) , added par. (26).\n1993—Subsec. (a)(19) to (23).  Pub. L. 103–66, §\u202f13261(f)(3) , redesignated pars. (20) to (24) as (19) to (23), respectively, and struck out former par. (19) which read as follows: “for amounts allowed as deductions for payments made on account of transfers of franchises, trademarks, or trade names under section 1253(d)(2);”.\nSubsec. (a)(24).  Pub. L. 103–66, §\u202f13261(f)(3) , redesignated par. (25) as (24). Former par. (24) redesignated (23).\nPub. L. 103–66, §\u202f13114(b) , substituted “section 1043 or 1044” for “section 1043” and “section 1043(c) or 1044(d), as the case may be” for “section 1043(c)”.\nSubsec. (a)(25), (26).  Pub. L. 103–66, §\u202f13261(f)(3) , redesignated pars. (25) and (26) as (24) and (25), respectively.\nSubsec. (e).  Pub. L. 103–66, §\u202f13213(a)(2)(F) , amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows:\n“(1) For treatment of certain expenses incident to the purchase of a residence which were deducted as moving expenses by the taxpayer or his spouse under section 217(a), see section 217(e).\n“(2) For treatment of separate mineral interests as one property, see section 614.”\n1992—Subsec. (a)(25), (26).  Pub. L. 102–486  added pars. (25) and (26).\n1990—Subsec. (a)(2).  Pub. L. 101–508, §\u202f11812(b)(10) , substituted “under the straight line method” for “under section 167(b)(1)” in concluding provisions.\nSubsec. (a)(20).  Pub. L. 101–508, §\u202f11813(b)(19) , which directed the amendment of subsec. (a)(21) by striking “section 48(q)” and inserting “section 50(c)”, was executed to subsec. (a)(20). See 1996 Amendment note above.\nPub. L. 101–508, §\u202f11801(c)(1) , redesignated par. (21) as (20) and struck out former par. (20) which read as follows: “to the extent provided in section 23(e), in the case of property with respect to which a credit has been allowed under section 23;”.\nSubsec. (a)(21) to (25).  Pub. L. 101–508, §\u202f11801(c)(1) , redesignated pars. (21) to (25) as (20) to (24), respectively.\n1989—Subsec. (a)(25).  Pub. L. 101–194  added par. (25).\n1988—Subsec. (a)(5).  Pub. L. 100–647, §\u202f1006(j)(1)(B) , inserted “(or the amount applied to reduce interest payments under section 171(e)(2))” after “allowable pursuant to section 171(a)(1)”.\nSubsec. (a)(21) to (26).  Pub. L. 100–647, §\u202f1018(u)(22) , added pars. (21) to (24) and struck out former pars. (23) to (26) which read as follows:\n“(23) to the extent provided in section 48(q) in the case of expenditures with respect to which a credit has been allowed under section 38;\n“(24) for amounts allowed as deductions under section 59(d) (relating to optional 10-year writeoff of certain tax preferences);\n“(25) to the extent provided in section 1059 (relating to reduction in basis for extraordinary dividends); and\n“(26) in the case of qualified replacement property, the acquisition of which resulted under section 1042 in the nonrecognition of any part of the gain realized on the sale or exchange of any property, to the extent provided in section 1042(c).”\nFormer pars. (21) and (22) had been struck out previously.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1899A(25) , which directed the amendment of pars. (23) to (26) by substituting a semicolon for a comma at the end thereof was executed to pars. (24) to (26) in view of the prior repeal of par. (23).\nPub. L. 99–514, §\u202f1303(b)(3) , which directed the amendment of subsec. (a) by striking out par. (22) and redesignating pars. (23) to (27) as (22) to (26), respectively, was executed by striking out par. (21) to reflect the probable intent of Congress in view of the amendment by  section 241(b)(2) of Pub. L. 99–514 . Prior to the amendment, par. (21) read as follows: “to the extent provided in section 1395 in the case of stock of shareholders of a general stock ownership corporation (as defined in section 1391) which makes the election provided by section 1392;”.\nPub. L. 99–514, §\u202f241(b)(2) , redesignated pars. (17) to (27) as (16) to (26), respectively, and struck out former par. (16) which read as follows: “for amounts allowed as deductions for expenditures treated as deferred expenses under section 177 (relating to trademark and trade name expenditures) and resulting in a reduction of the taxpayer’s taxes under this subtitle, but not less than the amounts allowable under such section for the taxable year and prior years;”.\nSubsec. (a)(24).  Pub. L. 99–514, §\u202f701(e)(4)(D) , substituted “section 59(d)” for “section 58(i)”.\n1984—Subsec. (a)(17).  Pub. L. 98–369, §\u202f211(b)(14) , substituted “section 811(b)” for “section 818(b)” in two places.\nSubsec. (a)(21).  Pub. L. 98–369, §\u202f474(r)(23) , substituted “section 23(e)” for “section 44C(e)” and “section 23” for “section 44C”.\nSubsec. (a)(26).  Pub. L. 98–369, §\u202f53(d)(3) , added par. (26).\nSubsec. (a)(27).  Pub. L. 98–369, §\u202f541(b)(2) , added par. (27).\nSubsec. (b).  Pub. L. 98–369, §\u202f43(a)(2) , struck out “The term ‘substituted basis’ as used in this section means a basis determined under any provision of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses), or under any corresponding provision of a prior income tax law, providing that the basis shall be determined (1) by reference to the basis in the hands of a transferor, donor, or grantor, or (2) by reference to other property held at any time by the person for whom the basis is to be determined.” See  section 7701(a)(42) of this title .\n1982—Subsec. (a)(18).  Pub. L. 97–354  substituted “section 1367” for “section 1376”, “indebtedness owed to” for “indebtedness owing”, and “an S corporation” for “an electing small business corporation (as defined in section 1371(b))”.\nSubsec. (a)(24).  Pub. L. 97–248, §\u202f205(a)(5)(B) , substituted “to the extent provided in section 48(q)” for “to the extent provided in section 48(g)(5)”.\nSubsec. (a)(25).  Pub. L. 97–248, §\u202f201(c)(2) , added par. (25).\n1981—Subsec. (a)(24).  Pub. L. 97–34, §\u202f212(d)(2)(G) , added par. (24).\nSubsec. (c).  Pub. L. 97–34, §\u202f421(g) , substituted provisions respecting increase in basis of property on which additional estate tax is imposed for provisions for increase in basis in the case of certain involuntary conversions, if such compulsory or involuntary conversions are within the meaning of section 1033, and an additional estate tax is imposed under section 2032A, and provisions respecting time adjustment made.\n1980—Subsec. (a)(22).  Pub. L. 96–222, §\u202f106(a)(2) , redesignated par. (21), relating to the extent provided in section 1395 in the case of stock of shareholders of a general stock ownership corporation, as (22).\nSubsec. (a)(23).  Pub. L. 96–223, §\u202f401(a) , repealed the amendments made by  Pub. L. 94–455, §\u202f2005(a)(3) , and  Pub. L. 95–600, §\u202f702(r)(3) . See 1976 and 1978 Amendment notes below.\nSubsec. (c).  Pub. L. 96–223, §\u202f401(c)(1) , struck out provision relating to the net appreciation of in value of certain property and struck out references to  section 1023 of this title .\n1978—Subsec. (a)(21).  Pub. L. 95–618, §\u202f101(b)(3) , added par. (21) relating to an adjustment to the extent provided in section 44C.\nPub. L. 95–600, §\u202f601(b)(3) , as amended by  Pub. L. 96–222, §\u202f106(a)(3) , added par. (21) relating to an adjustment to the extent provided in section 1395.\nSubsec. (a)(23).  Pub. L. 95–600, §\u202f702(r)(3) , which redesignated par. (23) as (21), was repealed by  Pub. L. 96–222, §\u202f107(a)(2)(C) , and  Pub. L. 96–223, §\u202f401(a) . See Repeals note below.\nPub. L. 95–600, §\u202f515(2) , substituted “ December 31, 1979 ” for “ December 31, 1976 ”.\nSubsec. (c).  Pub. L. 95–472  added subsec. (c). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 95–618, §\u202f201(b) , added subsec. (d). Former subsec. (d) redesignated (e).\nPub. L. 95–472  redesignated former subsec. (c) as (d).\nSubsec. (e).  Pub. L. 95–618, §\u202f201(b) , redesignated former subsec. (d) as (e).\n1976—Subsec. (a)(2).  Pub. L. 94–455, §\u202f1901(b)(29)(A) , inserted “(as in effect before the date of the enactment of the Tax Reform Act of 1976)” after “under section 1020”.\nSubsec. (a)(10).  Pub. L. 94–455, §\u202f1901(b)(21)(G) , struck out par. (10) which related to adjustment for the amounts allowed as deductions as deferred expenses under  section 615(b) of this title .\nSubsec. (a)(13).  Pub. L. 94–455, §\u202f1901(b)(1)(F)(ii) , substituted “section 551(e)” for “section 551(f)”.\nSubsec. (a)(19).  Pub. L. 94–455, §\u202f1901(a)(123) , (b)(30)(A), redesignated par. (20) as (19). Former par. (19), which related to adjustment of section 38 property to the extent provided in sections 48(g) and 203 of this title, was struck out.\nSubsec. (a)(20).  Pub. L. 94–455, §\u202f1901(b)(30)(A) , redesignated par. (22) as (20). Former par. (20) redesignated (19).\nSubsec. (a)(21).  Pub. L. 94–455, §\u202f1901(b)(30)(A) , struck out par. (21) which related to property adjustment to the extent provided in  section 1022 of this title .\nSubsec. (a)(22).  Pub. L. 94–455, §\u202f1901(b)(30)(A) , redesignated par. (22) as (20).\nSubsec. (a)(23).  Pub. L. 94–455, §\u202f2005(a)(3) , added par. (23). See Repeals note below.\n1969—Subsec. (a)(22).  Pub. L. 91–172, §\u202f516(c)(2)(B) , added par. (22).\nSubsec. (a)(10).  Pub. L. 91–172, §\u202f504(c)(4) , limited exploration expenditures referred to in this par. to pre-1970 exploration expenditures.\nSubsec. (c).  Pub. L. 91–172, §\u202f231(c)(3) , redesignated existing provisions as par. (2) and added par. (1).\n1964—Subsec. (a)(15).  Pub. L. 88–272, §\u202f227(b)(5) , inserted “or domestic iron ore”.\nSubsec. (a)(19).  Pub. L. 88–272, §\u202f203(a)(3)(C) , inserted “and in section 203(a)(2) of the Revenue Act of 1964”.\nSubsec. (a)(21).  Pub. L. 88–272, §\u202f225(j)(2) , added par. (21).\n1962—Subsec. (a)(3)(D).  Pub. L. 87–834, §\u202f8(g)(2) , added subpar. (D).\nSubsec. (a)(19).  Pub. L. 87–834, §\u202f2(f) , added par. (19).\nSubsec. (a)(20).  Pub. L. 87–834, §\u202f12(b)(4) , added par. (20).\n1959—Subsec. (a)(3)(C).  Pub. L. 86–69, §\u202f3(d)(1) , added subpar. (C).\nSubsec. (a)(17).  Pub. L. 86–69, §\u202f3(d)(2) , added par. (17).\n1958—Subsec. (a)(6).  Pub. L. 85–866, §\u202f2(b) , struck out “short-term” before “municipal bond”.\nSubsec. (a)(18).  Pub. L. 85–866, §\u202f64(d)(2) , added par. (18).\n1956—Subsec. (a)(16). Act  June 29, 1956 , added par. (16).\nAmendment by  Pub. L. 117–169  applicable to property placed in service after  Dec. 31, 2022 , see  section 13301(i)(1) of Pub. L. 117–169 , set out in a note under  section 25C of this title .\nPub. L. 115–97, title I, §\u202f13313(c) ,  Dec. 22, 2017 ,  131 Stat. 2133 , provided that:  “The amendments made by this section [amending this section and repealing  section 1044 of this title ] shall apply to sales after  December 31, 2017 .”\nPub. L. 115–97, title I, §\u202f13521(b) ,  Dec. 22, 2017 ,  131 Stat. 2151 , provided that:  “The amendment made by this section [amending this section] shall apply to transactions entered into after  August 25, 2009 .”\nPub. L. 115–97, title I, §\u202f13823(d) ,  Dec. 22, 2017 ,  131 Stat. 2188 , provided that:  “The amendments made by this section [enacting subchapter Z of this chapter and amending this section] shall take effect on the date of the enactment of this Act [ Dec. 22, 2017 ].”\nAmendment by  section 209(j)(2) of Pub. L. 113–295  effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009,  Pub. L. 111–5 , to which such amendment relates, see  section 209(k) of Pub. L. 113–295 , set out as a note under  section 24 of this title .\nAmendment by section 221(a)(2)(D), (34)(G), (75) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  terminated applicable to taxable years beginning after  Dec. 31, 2011 , and section is amended to read as if such amendment had never been enacted, see  section 10909(c) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable to taxable years beginning after  Dec. 31, 2009 , see  section 10909(d) of Pub. L. 111–148 , set out as a note under  section 1 of this title .\nAmendment by  section 1141(b)(3) of Pub. L. 111–5  applicable to vehicles acquired after  Dec. 31, 2009 , see  section 1141(c) of Pub. L. 111–5 , set out as a note under  section 30B of this title .\nAmendment by  section 1142(b)(6) of Pub. L. 111–5  applicable to vehicles acquired after  Feb. 17, 2009 , see  section 1142(c) of Pub. L. 111–5 , set out as an Effective and Termination Dates of 2009 Amendment note under  section 24 of this title .\nAmendment by  Pub. L. 110–343  applicable to taxable years beginning after  Dec. 31, 2008 , see  section 205(e) of Pub. L. 110–343 , set out as an Effective and Termination Dates of 2008 Amendment note under  section 24 of this title .\nAmendment by  section 7(a)(1)(C) of Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 7(e) of Pub. L. 110–172 , set out as a note under  section 1092 of this title .\nAmendment by  section 1331(b)(1) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , see  section 1331(d) of Pub. L. 109–58 , set out as an Effective Date note under  section 179D of this title .\nAmendment by  section 1332(c) of Pub. L. 109–58  applicable to qualified new energy efficient homes acquired after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1332(f) of Pub. L. 109–58 , set out as a note under  section 38 of this title .\nAmendment by  section 1333(b)(1) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , see  section 1333(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 25C of this title .\nAmendment by  section 1335(b)(4) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1335(c) of Pub. L. 109–58 , set out as a note under  section 23 of this title .\nAmendment by  section 1341(b)(2) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1341(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 30B of this title .\nAmendment by  section 1342(b)(2) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , in taxable years ending after such date, see  section 1342(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 30C of this title .\nAmendment by  section 245(c)(2) of Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 245(e) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  section 338(b)(4) of Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 338(c) of Pub. L. 108–357 , set out as an Effective Date note under  section 179B of this title .\nAmendment by  section 339(d) of Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 339(f) of Pub. L. 108–357 , set out as a note under  section 38 of this title .\nAmendment by  section 413(c)(19) of Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 107–16  applicable to taxable years beginning after  Dec. 31, 2001 , see  section 205(c) of Pub. L. 107–16 , set out as a note under  section 38 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f116(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–604, provided that:  “The amendments made by this section [enacting subpart C of part III of subchapter U of this chapter, amending this section and sections 1223, 1394, 1400, and 1400B of this title, redesignating subpart C of part III of subchapter U of this chapter as subpart D of part III of subchapter U of this chapter, and renumbering sections 1397B and 1397C of this title as 1397C and 1397D, respectively, of this title] shall apply to qualified empowerment zone assets acquired after the date of the enactment of this Act [ Dec. 21, 2000 ].”\nAmendment by  section 312(d)(6) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nPub. L. 105–34, title III, §\u202f313(c) ,  Aug. 5, 1997 ,  111 Stat. 842 , provided that:  “The amendments made by this section [enacting  section 1045 of this title  and amending this section and  section 1223 of this title ] shall apply to sales after the date of enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 701(b)(2) of Pub. L. 105–34  effective  Aug. 5, 1997 , see  section 701(d) of Pub. L. 105–34 , set out as a note under  section 39 of this title .\nAmendment by  section 1807(c)(5) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1807(e) of Pub. L. 104–188 , set out as an Effective Date note under  section 23 of this title .\nPub. L. 103–66, title XIII, §\u202f13114(d) ,  Aug. 10, 1993 ,  107 Stat. 431 , provided that:  “The amendments made by this section [enacting  section 1044 of this title  and amending this section] shall apply to sales on and after the date of the enactment of this Act [ Aug. 10, 1993 ], in taxable years ending on and after such date.”\nAmendment by  section 13213(a)(2)(F) of Pub. L. 103–66  applicable to expenses incurred after  Dec. 31, 1993 , see  section 13213(e) of Pub. L. 103–66  set out as a note under  section 62 of this title .\nAmendment by  section 13261(f)(3) of Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nAmendment by  Pub. L. 102–486  applicable to property placed in service after  June 30, 1993 , see  section 1913(c) of Pub. L. 102–486 , set out as a note under  section 53 of this title .\nAmendment by  section 11812(b)(10) of Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  section 11813(b)(19) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 101–194, title V, §\u202f502(c) ,  Nov. 30, 1989 ,  103 Stat. 1755 , provided that:  “The amendments made by this section [enacting  section 1043 of this title  and amending this section and  section 1223 of this title ] shall apply to sales after the date of the enactment of this Act [ Nov. 30, 1989 ].”\nAmendment by  section 1006(j)(1)(B) of Pub. L. 100–647  applicable in the case of obligations acquired after  Dec. 31, 1987 , with exception allowing taxpayer to elect to have amendment apply to obligations acquired after  Oct. 22, 1986 , see  section 1006(j)(1)(C) of Pub. L. 100–647 , set out as a note under  section 171 of this title .\nAmendment by  section 1018(u)(22) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 241(b)(2) of Pub. L. 99–514  applicable to expenditures paid or incurred after  Dec. 31, 1986 , except as otherwise provided, see  section 241(c) of Pub. L. 99–514 , set out as an Effective Date of Repeal note under former  section 177 of this title .\nAmendment by  section 701(e)(4)(D) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 1303(b)(3) of Pub. L. 99–514  effective  Oct. 22, 1986 , see  section 1311(f) of Pub. L. 99–514 , as amended, set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 43(a)(2) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  section 53(d)(3) of Pub. L. 98–369  applicable to distribution after  Mar. 1, 1984 , in taxable years ending after such date, see  section 53(e)(1) of Pub. L. 98–369 , set out as an Effective Date note under  section 1059 of this title .\nAmendment by  section 211(b)(14) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 474(r)(23) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 541(b)(2) of Pub. L. 98–369  applicable to sales of securities in taxable years beginning after  July 18, 1984 , see  section 541(c) of Pub. L. 98–369 , set out as an Effective Date note under  section 1042 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  section 201(c)(2) of Pub. L. 97–248  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 201(e)(1) of Pub. L. 97–248 , set out as a note under  section 5 of this title .\nAmendment by  section 205(a)(5)(B) of Pub. L. 97–248  applicable to periods after  Dec. 31, 1982 , under rules similar to the rules of  section 48(m) of this title , with certain qualifications, see  section 205(c)(1) of Pub. L. 97–248 , set out as an Effective Date note under  section 196 of this title .\nAmendment by  section 212(d)(2)(G) of Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after that date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by  section 421(g) of Pub. L. 97–34  applicable with respect to the estates of decedents dying after  Dec. 31, 1981 , see  section 421(k) of Pub. L. 97–34 , set out as a note under  section 2032A of this title .\nAmendment by  section 401(a) of Pub. L. 96–223  (repealing  section 2005(a)(3) of Pub. L. 94–455  and  section 702(r)(3) of Pub. L. 96–500  and the amendments made thereby, which had amended this section) applicable in respect of decedents dying after  Dec. 31, 1976 , and except for certain elections, this title to be applied as if those repealed provisions had not been enacted, see section 401(b), (e) of  Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as an Effective Date of 1980 Amendment note under  section 32 of this title .\nPub. L. 95–618, title I, §\u202f101(c) ,  Nov. 9, 1978 ,  92 Stat. 3180 , provided that:  “The amendments made by this section [enacting  section 23 of this title  and amending this section and sections 56 and 6096 of this title] shall apply to taxable years ending on or after  April 20, 1977 .”\nAmendment by  section 201(b) of Pub. L. 95–618  applicable with respect to 1980 and later model year automobiles, see  section 201(g) of Pub. L. 95–618 , set out as an Effective Date note under  section 4064 of this title .\nAmendment by  section 601(b)(3) of Pub. L. 95–600  effective with respect to corporations chartered after  Dec. 31, 1978 , and before  Jan. 1, 1984 , see  section 601(d) of Pub. L. 95–600 , set out as a note under  section 172 of this title .\nAmendment by  section 702(r)(3) of Pub. L. 95–600  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 702(r)(5) of Pub. L. 95–600 , set out as a note under  section 2051 of this title .\nPub. L. 95–472, §\u202f4(d) ,  Oct. 17, 1978 ,  92 Stat. 1336 , provided that:  “The amendments made by this section [amending this section and  section 2032A of this title ] shall apply to involuntary conversions after  December 31, 1976 .”\nAmendment by section 1901(a)(123), (b)(1)(F)(ii), (21)(G), (29)(A) of  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XIX, §\u202f1901(b)(30)(B) ,  Oct. 4, 1976 ,  90 Stat. 1799 , provided that:  “The amendment made by subparagraph (A)(i) [amending this section] shall apply with respect to stock or securities acquired from a decedent dying after the date of the enactment of this Act [ Oct. 4, 1976 ].”\nAmendment by  section 2005(a)(3) of Pub. L. 94–455  applicable in respect of decedents dying after  Dec. 31, 1976 , see  section 2005(f) of Pub. L. 94–455  set out as an Effective Date note under  section 1015 of this title .\nAmendment by  section 231(c)(3) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 231(d) of Pub. L. 91–172 , set out as a note under  section 217 of this title .\nAmendment by  section 504(c)(4) of Pub. L. 91–172  applicable with respect to exploration expenditures paid or incurred after  Dec. 31, 1969 , see  section 504(d)(1) of Pub. L. 91–172 , set out as a note under  section 243 of this title .\nAmendment by  section 516(c)(2)(B) of Pub. L. 91–172  applicable to transfers after  Dec. 31, 1969 , see  section 516(d)(3) of Pub. L. 91–172 , set out as an Effective Date note under  section 1001 of this title .\nAmendment by  section 203(a)(3)(C) of Pub. L. 88–272  applicable in case of property placed in service after  Dec. 31, 1963 , with respect to taxable years ending after such date, and in case of property placed in service before  Jan. 1, 1964 , with respect to taxable years beginning after  Dec. 31, 1963 , see  section 203(a)(4) of Pub. L. 88–272 , set out as a note under  section 48 of this title .\nAmendment by  section 225(j)(2) of Pub. L. 88–272  applicable in respect of decedents dying after  Dec. 31, 1963 , see section 225( l ) of  Pub. L. 88–272 , set out as a note under  section 316 of this title .\nAmendment by  section 227(b)(5) of Pub. L. 88–272  applicable with respect to amounts received or accrued in taxable years beginning after  Dec. 31, 1963 , attributable to iron ore mined in such years, see  section 227(c) of Pub. L. 88–272 , set out as a note under  section 272 of this title .\nAmendment by  section 2(f) of Pub. L. 87–834  applicable with respect to taxable years ending after  Dec. 31, 1961 , see  section 2(h) of Pub. L. 87–834 , set out as an Effective Date note under  section 46 of this title .\nAmendment by  section 8(g)(2) of Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 8(h) of Pub. L. 87–834 , set out as a note under  section 501 of this title .\nAmendment by  section 12(b)(1) of Pub. L. 87–834  applicable with respect to taxable years of foreign corporations beginning after  Dec. 31, 1962 , and to taxable years of United States shareholders within which or with which such taxable years of such foreign corporations end, see  section 12(c) of Pub. L. 87–834 , set out as an Effective Date note under  section 951 of this title .\nAmendment by  Pub. L. 86–69  applicable only with respect to taxable years beginning after  Dec. 31, 1957 , see  section 4 of Pub. L. 86–69 , set out as a note under  section 381 of this title .\nAmendment by  section 2(b) of Pub. L. 85–866  applicable with respect to taxable years ending after  December 31, 1957 , but only with respect to obligations acquired after such date, see  section 2(c) of Pub. L. 85–866 , set out as a note under  section 75 of this title .\nAmendment by  section 64(d)(2) of Pub. L. 85–866  applicable only with respect to taxable years beginning after  Dec. 31, 1957 , see  section 64(e) of Pub. L. 85–866 , set out as a note under  section 172 of this title .\nSection 2005(a)(3) of Pub. L. 94–455  and  section 702(r)(3) of Pub. L. 95–600 , cited as credits to this section, and the amendments made by those sections, were repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  94 Stat. 299 , resulting in the text of this section reading as it read prior to enactment of sections 2005(a)(3) and 702(r)(3). See Effective Date of 1980 Amendments and Revival of Prior Law note above.\nAmendment by  section 401(d)(4)(B)(iv) of Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nFor provisions that nothing in amendment by  section 401(d)(4)(B)(iv) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor applicability of amendment by  section 701(e)(4)(D) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 85–866, title I, §\u202f94 ,  Sept. 2, 1958 ,  72 Stat. 1669 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Short Title .— This section may be cited as the ‘Retirement-Straight Line Adjustment Act of 1958’. \n \n “(b)   Making of Election .— Any taxpayer who held retirement-straight line property on his 1956 adjustment date may elect to have this section apply. Such an election shall be made at such time and in such manner as the Secretary shall prescribe. Any election under this section shall be irrevocable and shall apply to all retirement-straight line property as hereinafter provided in this section (including such property for periods when held by predecessors of the taxpayer). \n \n “(c)   Retirement-Straight Line Property Defined .— For purposes of this section, the term ‘retirement-straight line property’ means any property of a kind or class with respect to which the taxpayer or a predecessor (under the terms and conditions prescribed for him by the Commissioner) for any taxable year beginning after  December 31, 1940 , and before  January 1, 1956 , changed from the retirement to the straight line method of computing the allowance of deductions for depreciation. \n \n “(d)   Basis Adjustments as of  1956  Adjustment Date .— If the taxpayer has made an election under this section, then in determining the adjusted basis on his 1956 adjustment date of all retirement-straight line property held by the taxpayer, in lieu of the adjustments for depreciation provided in section 1016(a)(2) and (3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the following adjustments shall be made (effective as of his 1956 adjustment date) in respect of all periods before the 1956 adjustment date: “(1)   Depreciation sustained before  march 1, 1913 .— For depreciation sustained before  March 1, 1913 , on retirement-straight line property held by the taxpayer or a predecessor on such date for which cost was or is claimed as basis and which either— “(A)   Retired before changeover .— Was retired by the taxpayer or a predecessor before the changeover date, but only if (i) a deduction was allowed in computing net income by reason of such retirement, and (ii) such deduction was computed on the basis of cost without adjustment for depreciation sustained before  March 1, 1913 . In the case of any such property retired during any taxable year beginning after  December 31, 1929 , the adjustment under this subparagraph shall not exceed that portion of the amount attributable to depreciation sustained before  March 1, 1913 , which resulted (by reason of the deduction so allowed) in a reduction in taxes under the Internal Revenue Code of 1986 or prior income, war-profits, or excess-profits tax laws. \n \n “(B)   Held on changeover date .— Was held by the taxpayer or a predecessor on the changeover date. This subparagraph shall not apply to property to which paragraph (2) applies. \n \n\n The adjustment determined under this paragraph shall be allocated (in the manner prescribed by the Secretary) among all retirement-straight line property held by the taxpayer on his 1956 adjustment date. \n \n “(2)   Property disposed of after changeover and before 1956 adjustment date .— For that portion of the reserve prescribed by the Commissioner in connection with the changeover which was applicable to property— “(A)  sold, or \n \n “(B)  with respect to which a deduction was allowed for Federal income tax purposes by reason of casualty or ‘abnormal’ retirement in the nature of special obsolescence, \n \n\n if such sale occurred in, or such deduction was allowed for, a period on or after the changeover date and before the taxpayer’s 1956 adjustment date. \n \n “(3)   Depreciation allowable from changeover to 1956 adjustment date .— For depreciation allowable, under the terms and conditions prescribed by the Commissioner in connection with the changeover, for all periods on and after the changeover date and before the taxpayer’s 1956 adjustment date. \n \n\n This subsection shall apply only with respect to taxable years beginning after  December 31, 1955 . \n \n “(e)   Effect on Period From Changeover to  1956  Adjustment Date .— If the taxpayer has made an election under this section, then in determining the adjusted basis of any retirement-straight line property as of any time on or after the changeover date and before the taxpayer’s 1956 adjustment date, in lieu of the adjustments for depreciation provided in section 1016(a)(2) and (3) of the Internal Revenue Code of 1986 and the corresponding provisions of prior revenue laws, the following adjustments shall be made: “(1)   For prescribed reserve .— For the amount of the reserve prescribed by the Commissioner in connection with the changeover. \n \n “(2)   For allowable depreciation .— For the depreciation allowable under the terms and conditions prescribed by the Commissioner in connection with the changeover. \n \n\n This subsection shall not apply in determining adjusted basis for purposes of section 437(c) of the Internal Revenue Code of 1939. This subsection shall apply only with respect to taxable years beginning on or after the changeover date and before the taxpayer’s 1956 adjustment date. \n \n “(f)   Equity Invested Capital, etc .— If an election is made under this section, then (not withstanding the terms and conditions prescribed by the Commissioner in connection with the changeover)— “(1)   Equity invested capital .— In determining equity invested capital under sections 458 and 718 of the Internal Revenue Code of 1939, accumulated earnings and profits as of the changeover date, and as of the beginning of each taxable year thereafter, shall be reduced by the depreciation sustained before  March 1, 1913 , as computed under subsection (d)(1)(B); and \n \n “(2)   Definition of equity capital .— In determining the adjusted basis of assets for the purpose of section 437(c) of the Internal Revenue Code of 1939 (and in addition to any other adjustments required by such Code), the basis shall be reduced by depreciation sustained before  March 1, 1913  (as computed under subsection (d)), together with any depreciation allowable under subsection (e)(2) for any period before the year for which the excess profits credit is being computed. \n \n \n “(g)   Definitions .— For purposes of this section— “(1)   Depreciation .— The term ‘depreciation’ means exhaustion, wear and tear, and obsolescence. \n \n “(2)   Changeover .— The term ‘changeover’ means a change from the retirement to the straight line method of computing the allowance of deductions for depreciation. \n \n “(3)   Changeover date .— The term ‘changeover date’ means the first day of the first taxable year for which the changeover was effective. \n \n “(4)  1956  adjustment date .— The term ‘1956 adjustment date’ means, in the case of any taxpayer, the first day of his first taxable year beginning after  December 31, 1955 . \n \n “(5)   Predecessor .— The term ‘predecessor’ means any person from whom property of a kind or class to which this section refers was acquired, if the basis of such property is determined by reference to its basis in the hands of such person. Where a series of transfers of property has occurred and where in each instance the basis of the property was determined by reference to its basis in the hands of the prior holder, the term includes each such prior holder. \n \n “(6)  The term ‘Secretary’ means the Secretary of the Treasury or his delegate. \n \n “(7)  The term ‘Commissioner’ means the Commissioner of Internal Revenue.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'The amount of reduction to be applied under subsection (a) (not in excess of the portion referred to in subsection (a)), and the particular properties the bases of which are to be reduced, shall be determined under regulations prescribed by the Secretary.\nAny amount which under subsection (b)(5) or (c)(1) of section 108 is to be applied to reduce basis shall be applied only to reduce the basis of depreciable property held by the taxpayer.\nFor purposes of this section, the term “depreciable property” means any property of a character subject to the allowance for depreciation, but only if a basis reduction under subsection (a) will reduce the amount of depreciation or amortization which otherwise would be allowable for the period immediately following such reduction.\nFor purposes of this section, any interest of a partner in a partnership shall be treated as depreciable property to the extent of such partner’s proportionate interest in the depreciable property held by such partnership. The preceding sentence shall apply only if there is a corresponding reduction in the partnership’s basis in depreciable property with respect to such partner.\nAt the election of the taxpayer, for purposes of this section, the term “depreciable property” includes any real property which is described in section 1221(a)(1).\nAn election under clause (i) shall be made on the taxpayer’s return for the taxable year in which the discharge occurs or at such other time as may be permitted in regulations prescribed by the Secretary. Such an election, once made, may be revoked only with the consent of the Secretary.\nFor purposes of this paragraph, the term “qualified property” has the meaning given to such term by section 108(g)(3)(C).\nRules similar to the rules of subparagraphs (C), (D), and (E) of paragraph (3) shall apply for purposes of this paragraph and section 108(g).\nIn the case of an amount excluded from gross income under section 108(a)(1)(A), no reduction in basis shall be made under this section in the basis of property which the debtor treats as exempt property under  section 522 of title 11  of the United States Code.\nFor purposes of this title, a reduction in basis under this section shall not be treated as a disposition.\nFor purposes of section 1250(b), the determination of what would have been the depreciation adjustments under the straight line method shall be made as if there had been no reduction under this section.\n1999—Subsec. (b)(3)(E)(i).  Pub. L. 106–170  substituted “1221(a)(1)” for “1221(1)”.\n1998—Subsec. (a)(2).  Pub. L. 105–206  substituted “(b)(2)(E)” for “(b)(2)(D)”.\n1996—Subsec. (b)(4)(A).  Pub. L. 104–188  substituted “subsection (b)(2)(E)” for “subsection (b)(2)(D)”.\n1993—Subsec. (a)(2).  Pub. L. 103–66, §\u202f13150(c)(6) , substituted “,\u2000(b)(5), or (c)(1)” for “or (b)(5)”.\nSubsec. (b)(3)(A).  Pub. L. 103–66, §\u202f13150(c)(7) , inserted “or (c)(1)” after “subsection (b)(5)”.\nSubsec. (b)(3)(F).  Pub. L. 103–66, §\u202f13150(c)(8) , added subpar. (F).\n1990—Subsec. (b)(4)(C).  Pub. L. 101–508  substituted “subparagraphs” for “subparagraph”.\n1988—Subsec. (b)(4).  Pub. L. 100–647  substituted “Special rules for” for “Ordering rule in the case of” in heading, and amended text generally. Prior to amendment, text read as follows: “Any amount which is excluded from gross income under section 108(a) by reason of the discharge of qualified farm indebtedness (within the meaning of section 108(g)(2)) and which under subsection (b) of section 108 is to be applied to reduce basis shall be applied—\n“(A) first to reduce the tax attributes described in section 108(b)(2) (other than subparagraph (D) thereof),\n“(B) then to reduce basis of property other than property described in subparagraph (C), and\n“(C) then to reduce the basis of land used or held for use in the trade or business of farming.”\n1986—Subsec. (a)(2).  Pub. L. 99–514, §\u202f822(b)(4) , substituted “or (b)(5)” for “,\u2000(b)(5), or (c)(1)(A)”.\nSubsec. (b)(3)(A).  Pub. L. 99–514, §\u202f822(b)(5) , struck out “or (c)(1)(A)” after “subsection (b)(5)”.\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f405(b) , added par. (4).\n1980— Pub. L. 96–589  generally revised and expanded the section to specify the amount of reduction of basis of property under different subsections of  section 108 of this title  and the property to which such reduction is applicable, and provided for recapture of reductions for purposes of gains from depreciable property.\n1976— Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 1951(c)(1), substituted “section 108” for “section 108(a)” in three places and struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  Pub. L. 103–66  applicable to discharges after  Dec. 31, 1992 , in taxable years ending after such date, see  section 13150(d) of Pub. L. 103–66 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 405(b) of Pub. L. 99–514  applicable to discharges of indebtedness occurring after  Apr. 9, 1986 , in taxable years ending after such date, see  section 405(c) of Pub. L. 99–514 , set out as a note under  section 108 of this title .\nAmendment by section 822(b)(4), (5) of  Pub. L. 99–514  applicable to discharges after  Dec. 31, 1986 , see  section 822(c) of Pub. L. 99–514 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 96–589  applicable to transactions which occur after  Dec. 31, 1980 , other than transactions which occur in a proceeding in a bankruptcy case or similar judicial proceeding or in a proceeding under Title 11 commencing on or after  Dec. 31, 1980 , with an exception permitting the debtor to make the amendment applicable to transactions occurring after  Sept. 30, 1979  in a specified manner, see section 7(a) and (f) of  Pub. L. 96–589 , set out as a note under  section 108 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 301 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1901(a)(124) ,  90 Stat. 1784 , provided for adjustment of capital structure before  Sept. 22, 1938 .\nRepeal effective  Oct. 1, 1979 , but not to apply to proceedings under Title 11, Bankruptcy, commenced before  Oct. 1, 1979 , see  section 7(e) of Pub. L. 96–589 , set out as an Effective Date of 1980 Amendment note under  section 108 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'Neither the basis nor the adjusted basis of any portion of real property shall, in the case of the lessor of such property, be increased or diminished on account of income derived by the lessor in respect of such property and excludable from gross income under section 109 (relating to improvements by lessee on lessor’s property).\n2014— Pub. L. 113–295  struck out last sentence which read as follows: “If an amount representing any part of the value of real property attributable to buildings erected or other improvements made by a lessee in respect of such property was included in gross income of the lessor for any taxable year beginning before  January 1, 1942 , the basis of each portion of such property shall be properly adjusted for the amount so included in gross income.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 302 , related to election to have  section 1016(a)(2)(B) of this title  apply in respect of periods since  Feb. 28, 1913 , and before  Jan. 1, 1952 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'In case of the sale of an annuity contract, the adjusted basis shall in no case be less than zero.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'Section, added  Pub. L. 107–16, title V, §\u202f542(a) ,  June 7, 2001 ,  115 Stat. 76 , related to treatment of property acquired from a decedent dying after  Dec. 31, 2009 .\nA prior section 1022, added  Pub. L. 88–272, title II, §\u202f225(j)(1) ,  Feb. 26, 1964 ,  78 Stat. 92 , dealt with the increase in basis with respect to certain foreign personal holding company stock or securities, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1901(a)(126) ,  Oct. 4, 1976 ,  90 Stat. 1784 , applicable with respect to stock or securities acquired from a decedent dying after  Oct. 4, 1976 .\nAnother prior section 1022,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 302 , relating to cross references, was renumbered section 1023.\nRepeal of section applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'BASIS RULES OF GENERAL APPLICATION'},
  'content': 'A prior section 1023, added  Pub. L. 94–455, title XX, §\u202f2005(a)(2) ,  Oct. 4, 1976 ,  90 Stat. 1872 ; amended  Pub. L. 95–600, title V, §\u202f515(3) , (4), title VII, §\u202f702(c)(2)–(4), (6)–(8),  Nov. 6, 1978 ,  92 Stat. 2884 , 2926–2928, related to carryover basis for certain property acquired from a decedent dying after  Dec. 31, 1979 , prior to repeal by  Pub. L. 96–223, title IV, §\u202f401(a) ,  Apr. 2, 1980 ,  94 Stat. 299 . The repeal was achieved by repealing  section 2005(a)(2) of Pub. L. 94–455  and the amendment made thereby, which had enacted prior section 1023.\n2006—Par. (2).  Pub. L. 109–304  substituted “chapter 533 of title 46, United States Code” for “section 511 of the Merchant Marine Act, 1936, as amended ( 46 U.S.C. 1161 )”.\n1980— Pub. L. 96–589  redesignated par. (3) as (2). Former par. (2), which provided reference to sections 670, 796, and 922 of Title 11, Bankruptcy, for basis of property in case of certain reorganizations and arrangements under the Bankruptcy Act, was struck out.\n1976—Par. (4).  Pub. L. 94–455, §\u202f1901(a)(127) , struck out par. (4) which referred to section 405 of the Defense Production Act of 1950 for rules applicable in case of payments in violation of that Act.\nAmendment by  Pub. L. 96–589  effective  Oct. 1, 1979 , but not to apply to proceedings under Title 11, Bankruptcy, commenced before  Oct. 1, 1979 , see  section 7(e) of Pub. L. 96–589 , set out as an Effective Date of 1980 Amendment note under  section 108 of this title .\nPub. L. 96–223, title IV, §\u202f401(b) ,  Apr. 2, 1980 ,  94 Stat. 299 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Except to the extent necessary to carry out subsection (d) [set out as a note under  section 1014 of this title ], the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied and administered as if the provisions repealed by subsection (a), and the amendments made by those provisions [enacting this section and sections 6039A and 6698A of this title, redesignating former section 1023 as  section 1024 of this title , and amending sections 306, 691, 1001, 1014, 1016, 1223, and 1246 of this title], had not been enacted.”\nPub. L. 96–223, title IV, §\u202f401(e) ,  Apr. 2, 1980 ,  94 Stat. 301 , provided that:  “The amendments made by this section [amending sections 306, 691, 1001, 1014, 1016, 1040, 1223, 1246, and 2614 of this title, repealing former section 1023 and sections 6039A and 6698A of this title, redesignating former  section 1024 of this title  as 1023, and enacting provisions set out as notes under this section and  section 1014 of this title ] shall apply in respect of decedents dying after  December 31, 1976 .”\nAmendment by  section 1901(a)(127) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, §\u202f1901(a)(127) , cited as a credit to this section, which renumbered this section as  section 1024 of this title , was repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  Apr. 2, 1980 ,  94 Stat. 299 , resulting in the redesignation of this section as  section 1023 of this title . See Effective Date of 1980 Amendments and Revival of Prior Law note set out above.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.\nThis subsection shall not apply to any exchange of real property held primarily for sale.\nIf an exchange would be within the provisions of subsection (a), of section 1035(a), of section 1036(a), or of section 1037(a), if it were not for the fact that the property received in exchange consists not only of property permitted by such provisions to be received without the recognition of gain, but also of other property or money, then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property.\nIf an exchange would be within the provisions of subsection (a), of section 1035(a), of section 1036(a), or of section 1037(a), if it were not for the fact that the property received in exchange consists not only of property permitted by such provisions to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange shall be recognized.\nIf property was acquired on an exchange described in this section, section 1035(a), section 1036(a), or section 1037(a), then the basis shall be the same as that of the property exchanged, decreased in the amount of any money received by the taxpayer and increased in the amount of gain or decreased in the amount of loss to the taxpayer that was recognized on such exchange. If the property so acquired consisted in part of the type of property permitted by this section, section 1035(a), section 1036(a), or section 1037(a), to be received without the recognition of gain or loss, and in part of other property, the basis provided in this subsection shall be allocated between the properties (other than money) received, and for the purpose of the allocation there shall be assigned to such other property an amount equivalent to its fair market value at the date of the exchange. For purposes of this section, section 1035(a), and section 1036(a), where as part of the consideration to the taxpayer another party to the exchange assumed (as determined under section 357(d)) a liability of the taxpayer, such assumption shall be considered as money received by the taxpayer on the exchange.\nFor purposes of this section, an interest in a partnership which has in effect a valid election under section 761(a) to be excluded from the application of all of subchapter K shall be treated as an interest in each of the assets of such partnership and not as an interest in a partnership.\nFor purposes of this subsection, the term “related person” means any person bearing a relationship to the taxpayer described in section 267(b) or 707(b)(1).\nThis section shall not apply to any exchange which is part of a transaction (or series of transactions) structured to avoid the purposes of this subsection.\nIf paragraph (2) applies to any property for any period, the running of the period set forth in subsection (f)(1)(C) with respect to such property shall be suspended during such period.\nReal property located in the United States and real property located outside the United States are not property of a like kind.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2017— Pub. L. 115–97, §\u202f13303(b)(5) , substituted “real property” for “property” in section catchline.\nSubsec. (a)(1).  Pub. L. 115–97, §\u202f13303(a) , substituted “real property” for “property” wherever appearing.\nSubsec. (a)(2).  Pub. L. 115–97, §\u202f13303(b)(1)(A) , amended par. (2) generally. Prior to amendment, text read as follows: “This subsection shall not apply to any exchange of—\n“(A) stock in trade or other property held primarily for sale,\n“(B) stocks, bonds, or notes,\n“(C) other securities or evidences of indebtedness or interest,\n“(D) interests in a partnership,\n“(E) certificates of trust or beneficial interests, or\n“(F) choses in action.\nFor purposes of this section, an interest in a partnership which has in effect a valid election under section 761(a) to be excluded from the application of all of subchapter K shall be treated as an interest in each of the assets of such partnership and not as an interest in a partnership.”\nSubsec. (e).  Pub. L. 115–97, §\u202f13303(b)(2) , (3), added subsec. (e) and struck out former subsec. (e). Prior to amendment, text read as follows: “For purposes of this section, livestock of different sexes are not property of a like kind.”\nSubsec. (h).  Pub. L. 115–97, §\u202f13303(b)(4) , amended subsec. (h) generally. Prior to amendment, subsec. (h) related to special rules for foreign real and personal property.\nSubsec. (i).  Pub. L. 115–97, §\u202f13303(b)(1)(B) , struck out subsec. (i). Text read as follows: “For purposes of subsection (a)(2)(B), the term ‘stocks’ shall not include shares in a mutual ditch, reservoir, or irrigation company if at the time of the exchange—\n“(1) the mutual ditch, reservoir, or irrigation company is an organization described in section 501(c)(12)(A) (determined without regard to the percentage of its income that is collected from its members for the purpose of meeting losses and expenses), and\n“(2) the shares in such company have been recognized by the highest court of the State in which such company was organized or by applicable State statute as constituting or representing real property or an interest in real property.”\n2008—Subsec. (i).  Pub. L. 110–246  added subsec. (i).\n2005—Subsec. (h)(2)(B).  Pub. L. 109–135  substituted “subparagraphs” for “subparagraph” in introductory provisions.\n1999—Subsec. (d).  Pub. L. 106–36 , in last sentence, substituted “assumed (as determined under section 357(d)) a liability of the taxpayer” for “assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability” and struck out “or acquisition (in the amount of the liability)” after “such assumption”.\n1997—Subsec. (h).  Pub. L. 105–34  amended heading and text of subsec. (h) generally. Prior to amendment, text read as follows: “For purposes of this section, real property located in the United States and real property located outside the United States are not property of a like kind.”\n1990—Subsec. (a)(2).  Pub. L. 101–508, §\u202f11703(d)(1) , inserted at end “For purposes of this section, an interest in a partnership which has in effect a valid election under section 761(a) to be excluded from the application of all of subchapter K shall be treated as an interest in each of the assets of such partnership and not as an interest in a partnership.”\nSubsec. (f)(3).  Pub. L. 101–508, §\u202f11701(h) , substituted “section 267(b) or 707(b)(1)” for “section 267(b)”.\n1989—Subsecs. (f) to (h).  Pub. L. 101–239  added subsecs. (f) to (h).\n1986—Subsec. (a)(3)(A).  Pub. L. 99–514  substituted “on or before the day” for “before the day”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f77(a) , in amending subsec. generally, designated existing provisions as par. (1), substituted “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment” for “No gain or loss shall be recognized if property held for productive use in trade or business or for investment (not including stock in trade or other property held primarily for sale, nor stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest) is exchanged solely for property of a like kind to be held either for productive use in trade or business or for investment”, and added pars. (2) and (3).\n1969—Subsec. (e).  Pub. L. 91–172  added subsec. (e).\n1959—Subsecs. (b) to (d).  Pub. L. 86–346  inserted references to section 1037(a) in subsecs. (b) and (c) and in first two sentences of subsec. (d).\n1958—Subsec. (d).  Pub. L. 85–866  inserted in first sentence a comma between “exchanged” and “decreased” and “or decreased in the amount of loss”, and substituted in second sentence “subsection” for “paragraph”.\nPub. L. 115–97, title I, §\u202f13303(c) ,  Dec. 22, 2017 ,  131 Stat. 2124 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to exchanges completed after  December 31, 2017 . \n \n “(2)   Transition rule .— The amendments made by this section shall not apply to any exchange if— “(A)  the property disposed of by the taxpayer in the exchange is disposed of on or before  December 31, 2017 , or \n \n “(B)  the property received by the taxpayer in the exchange is received on or before  December 31, 2017 .”\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15342(b) ,  May 22, 2008 ,  122 Stat. 1518 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15342(b),  June 18, 2008 ,  122 Stat. 1664 , 2280, provided that:  “The amendment made by this section [amending this section] shall apply to exchanges completed after the date of the enactment of this Act [ June 18, 2008 ].”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nAmendment by  Pub. L. 106–36  applicable to transfers after  Oct. 18, 1998 , see  section 3001(e) of Pub. L. 106–36 , set out as a note under  section 351 of this title .\nPub. L. 105–34, title X, §\u202f1052(b) ,  Aug. 5, 1997 ,  111 Stat. 941 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to transfers after  June 8, 1997 , in taxable years ending after such date. \n \n “(2)   Binding contracts .— The amendment made by this section shall not apply to any transfer pursuant to a written binding contract in effect on  June 8, 1997 , and at all times thereafter before the disposition of property. A contract shall not fail to meet the requirements of the preceding sentence solely because— “(A)  it provides for a sale in lieu of an exchange, or \n \n “(B)  the property to be acquired as replacement property was not identified under such contract before  June 9, 1997 .”\nPub. L. 101–508, title XI, §\u202f11701(h) ,  Nov. 5, 1990 ,  104 Stat. 1388–508 , provided that the amendment made by that section is effective with respect to transfers after  Aug. 3, 1990 .\nPub. L. 101–508, title XI, §\u202f11703(d)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–517 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to transfers after  July 18, 1984 .”\nPub. L. 101–239, title VII, §\u202f7601(b) ,  Dec. 19, 1989 ,  103 Stat. 2371 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to transfers after  July 10, 1989 , in taxable years ending after such date. \n \n “(2)   Binding contract .— The amendments made by this section shall not apply to any transfer pursuant to a written binding contract in effect on  July 10, 1989 , and at all times thereafter before the transfer.”\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f77(b) ,  July 18, 1984 ,  98 Stat. 596 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to transfers made after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Binding contract exception for transfer of partnership interests .— Paragraph (2)(D) of section 1031(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a)) shall not apply in the case of any exchange pursuant to a binding contract in effect on  March 1, 1984 , and at all times thereafter before the exchange. \n \n “(3)   Requirement that property be identified within 45 days and that exchange be completed within 180 days .— Paragraph (3) of section 1031(a) of the Internal Revenue Code of 1986 (as amended by subsection (a)) shall apply— “(A)  to transfers after the date of the enactment of this Act [ July 18, 1984 ], and \n \n “(B)  to transfers on or before such date of enactment if the property to be received in the exchange is not received before  January 1, 1987 . \n \n\n In the case of any transfer on or before the date of the enactment of this Act which the taxpayer treated as part of a like-kind exchange, the period for assessing any deficiency of tax attributable to the amendment made by subsection (a) [amending this section] shall not expire before  January 1, 1988 . \n \n “(4)   Special rule where property identified in binding contract .— If the property to be received in the exchange is identified in a binding contract in effect on  June 13, 1984 , and at all times thereafter before the transfer, paragraph (3) shall be applied— “(A)  by substituting ‘ January 1, 1989 ’ for ‘ January 1, 1987 ’, and \n \n “(B)  by substituting ‘ January 1, 1990 ’ for ‘ January 1, 1988 ’. \n \n \n “(5)   Special rule for like-kind exchange of partnership interests .— Paragraph (2)(D) of section 1031(a) of the Internal Revenue Code of 1986 (as amended by subsection (a)) shall not apply to any exchange of an interest as general partner pursuant to a plan of reorganization of ownership interest under a contract which took effect on  March 29, 1984 , and which was executed on or before  March 31, 1984 , but only if all the exchanges contemplated by the reorganization plan are completed on or before  December 31, 1984 .”\nPub. L. 91–172, title II, §\u202f212(c)(2) ,  Dec. 30, 1969 ,  83 Stat. 571 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to taxable years to which the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies.”\nAmendment by  Pub. L. 86–346  effective for taxable years ending after  Sept. 22, 1959 , see  section 203 of Pub. L. 86–346 , set out as an Effective Date note under  section 1037 of this title .\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'No gain or loss shall be recognized to a corporation on the receipt of money or other property in exchange for stock (including treasury stock) of such corporation. No gain or loss shall be recognized by a corporation with respect to any lapse or acquisition of an option, or with respect to a securities futures contract (as defined in section 1234B), to buy or sell its stock (including treasury stock).\nFor basis of property acquired by a corporation in certain exchanges for its stock, see section 362.\n2000—Subsec. (a).  Pub. L. 106–554  inserted “,\u2000or with respect to a securities futures contract (as defined in section 1234B),” after “an option” in second sentence.\n1984—Subsec. (a).  Pub. L. 98–369  inserted provision that no gain or loss shall be recognized by a corporation with respect to any lapse or acquisition of an option to buy or sell its stock (including treasury stock).\nPub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(j)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–651, provided that:  “The amendments made by this section [enacting  section 1234B of this title  and amending this section and sections 1091, 1092, 1223, 1233, 1234A, 1256 and 7701 of this title] shall take effect on the date of the enactment of this Act [ Dec. 21, 2000 ].”\nPub. L. 98–369, div. A, title I, §\u202f57(b) ,  July 18, 1984 , 1984,  98 Stat. 574 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to options acquired or lapsed after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'Into property similar or related in service or use to the property so converted, no gain shall be recognized.\nIf the election provided in subparagraph (A) is made by the taxpayer and such other property or such stock was purchased before the beginning of the last taxable year in which any part of the gain upon such conversion is realized, any deficiency, to the extent resulting from such election, for any taxable year ending before such last taxable year may be assessed (notwithstanding the provisions of section 6212(c) or 6501 or the provisions of any other law or rule of law which would otherwise prevent such assessment) at any time before the expiration of the period within which a deficiency for such last taxable year may be assessed.\nThe term “control” means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation.\nThe term “disposition of the converted property” means the destruction, theft, seizure, requisition, or condemnation of the converted property, or the sale or exchange of such property under threat or imminence of requisition or condemnation.\nIn the case of property purchased by the taxpayer in a transaction described in subsection (a)(2) which resulted in the nonrecognition of any part of the gain realized as the result of a compulsory or involuntary conversion, the basis shall be the cost of such property decreased in the amount of the gain not so recognized; and if the property purchased consists of more than 1 piece of property, the basis determined under this sentence shall be allocated to the purchased properties in proportion to their respective costs.\nIf the basis of stock in a corporation is decreased under paragraph (2), an amount equal to such decrease shall also be applied to reduce the basis of property held by the corporation at the time the taxpayer acquired control (as defined in subsection (a)(2)(E)) of such corporation.\nSubparagraph (A) shall not apply to the extent that it would (but for this subparagraph) require a reduction in the aggregate adjusted bases of the property of the corporation below the taxpayer’s adjusted basis of the stock in the corporation (determined immediately after such basis is decreased under paragraph (2)).\nNo reduction in the basis of any property under this paragraph shall exceed the adjusted basis of such property (determined without regard to such reduction).\nIf more than 1 property is described in a clause of subparagraph (C), the reduction under this paragraph shall be allocated among such property in proportion to the adjusted bases of such property (as so determined).\nFor purposes of this subtitle, if property lying within an irrigation project is sold or otherwise disposed of in order to conform to the acreage limitation provisions of Federal reclamation laws, such sale or disposition shall be treated as an involuntary conversion to which this section applies.\nFor purposes of this subtitle, if livestock are destroyed by or on account of disease, or are sold or exchanged because of disease, such destruction or such sale or exchange shall be treated as an involuntary conversion to which this section applies.\nFor purposes of this subtitle, the sale or exchange of livestock (other than poultry) held by a taxpayer for draft, breeding, or dairy purposes in excess of the number the taxpayer would sell if he followed his usual business practices shall be treated as an involuntary conversion to which this section applies if such livestock are sold or exchanged by the taxpayer solely on account of drought, flood, or other weather-related conditions.\nIn the case of drought, flood, or other weather-related conditions described in paragraph (1) which result in the area being designated as eligible for assistance by the Federal Government, subsection (a)(2)(B) shall be applied with respect to any converted property by substituting “4 years” for “2 years”.\nThe Secretary may extend on a regional basis the period for replacement under this section (after the application of subparagraph (A)) for such additional time as the Secretary determines appropriate if the weather-related conditions which resulted in such application continue for more than 3 years.\nFor purposes of subsection (a), if, because of drought, flood, or other weather-related conditions, or soil contamination or other environmental contamination, it is not feasible for the taxpayer to reinvest the proceeds from compulsorily or involuntarily converted livestock in property similar or related in use to the livestock so converted, other property (including real property in the case of soil contamination or other environmental contamination) used for farming purposes shall be treated as property similar or related in service or use to the livestock so converted.\nFor purposes of subsection (a), if real property (not including stock in trade or other property held primarily for sale) held for productive use in trade or business or for investment is (as the result of its seizure, requisition, or condemnation, or threat or imminence thereof) compulsorily or involuntarily converted, property of a like kind to be held either for productive use in trade or business or for investment shall be treated as property similar or related in service or use to the property so converted.\nParagraph (1) shall not apply to the purchase of stock in the acquisition of control of a corporation described in subsection (a)(2)(A).\nA taxpayer may elect, at such time and in such manner as the Secretary may prescribe, to treat property which constitutes an outdoor advertising display as real property for purposes of this chapter. The election provided by this subparagraph may not be made with respect to any property with respect to which an election under section 179(a) (relating to election to expense certain depreciable business assets) is in effect.\nAn election made under subparagraph (A) may not be revoked without the consent of the Secretary.\nFor purposes of this paragraph, the term “outdoor advertising display” means a rigidly assembled sign, display, or device permanently affixed to the ground or permanently attached to a building or other inherently permanent structure constituting, or used for the display of, a commercial or other advertisement to the public.\nFor purposes of this subsection, an interest in real property purchased as replacement property for a compulsorily or involuntarily converted outdoor advertising display defined in subparagraph (C) (and treated by the taxpayer as real property) shall be considered property of a like kind as the property converted without regard to whether the taxpayer’s interest in the replacement property is the same kind of interest the taxpayer held in the converted property.\nIn the case of a compulsory or involuntary conversion described in paragraph (1), subsection (a)(2)(B)(i) shall be applied by substituting “3 years” for “2 years”.\nNo gain shall be recognized by reason of the receipt of any insurance proceeds for personal property which was part of such contents and which was not scheduled property for purposes of such insurance.\nSubsection (a)(2)(B) shall be applied with respect to any property so converted by substituting “4 years” for “2 years”.\nIf a taxpayer’s property held for productive use in a trade or business or for investment is located in a disaster area and is compulsorily or involuntarily converted as a result of a federally declared disaster, tangible property of a type held for productive use in a trade or business shall be treated for purposes of subsection (a) as property similar or related in service or use to the property so converted.\nThe terms “federally declared disaster” and “disaster area” shall have the respective meaning given such terms by section 165(i)(5).\nFor purposes of this subsection, the term “principal residence” has the same meaning as when used in section 121, except that such term shall include a residence not treated as a principal residence solely because the taxpayer does not own the residence.\nIf the property which is involuntarily converted is held by a taxpayer to which this subsection applies, subsection (a) shall not apply if the replacement property or stock is acquired from a related person. The preceding sentence shall not apply to the extent that the related person acquired the replacement property or stock from an unrelated person during the period applicable under subsection (a)(2)(B).\nFor purposes of this subsection, a person is related to another person if the person bears a relationship to the other person described in section 267(b) or 707(b)(1).\nFor purposes of this subtitle, if property is sold or otherwise transferred to the Federal Government, a State or local government, or an Indian tribal government to implement hazard mitigation under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (as in effect on the date of the enactment of this subsection) or the National Flood Insurance Act (as in effect on such date), such sale or transfer shall be treated as an involuntary conversion to which this section applies.\nThe Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (j), is  Pub. L. 93–288 ,  May 22, 1974 ,  88 Stat. 143 , which is classified principally to chapter 68 (§\u202f5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 5121 of Title 42  and Tables.\nThe date of the enactment of this subsection, referred to in subsec. (j), is the date of enactment of  Pub. L. 109–7 , which was approved  Apr. 15, 2005 .\nThe National Flood Insurance Act, referred to in subsec. (j), probably means the National Flood Insurance Act of 1968, title XIII of  Pub. L. 90–448 ,  Aug. 1, 1968 ,  82 Stat. 572 , which is classified principally to chapter 50 (§\u202f4001 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under  section 4001 of Title 42  and Tables.\n2018—Subsec. (h)(2).  Pub. L. 115–141  inserted “is” before “located”.\n2014—Subsec. (h)(2).  Pub. L. 113–295, §\u202f211(c)(1)(A) , inserted “is” before “compulsorily”.\nSubsec. (h)(3).  Pub. L. 113–295, §\u202f221(a)(27)(D) , substituted “section 165(i)(5)” for “section 165(h)(3)(C)”.\nSubsecs. (j) to ( l ).  Pub. L. 113–295, §\u202f221(a)(77) , redesignated subsecs. (k) and ( l ) as (j) and (k), respectively, and struck out former subsec. (j) which related to sales or exchanges to implement microwave relocation policy.\n2008—Subsec. (h).  Pub. L. 110–343, §\u202f706(a)(2)(D)(i) , amended heading generally. Prior to amendment, heading read as follows: “Special rules for property damaged by Presidentially declared disasters”.\nSubsec. (h)(1).  Pub. L. 110–343, §\u202f706(a)(2)(D)(i) , reenacted heading without change and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “If the taxpayer’s principal residence or any of its contents is compulsorily or involuntarily converted as a result of a Presidentially declared disaster—”.\nSubsec. (h)(2).  Pub. L. 110–343, §\u202f706(a)(2)(D)(ii) , substituted “investment located in a disaster area and compulsorily or involuntarily converted as a result of a federally declared disaster” for “investment is compulsorily or involuntarily converted as a result of a Presidentially declared disaster”.\nSubsec. (h)(3).  Pub. L. 110–343, §\u202f706(a)(2)(D)(iii) , amended par. (3) generally. Prior to amendment, par. (3) defined “Presidentially declared disaster” for purposes of subsec. (h).\n2005—Subsecs. (k), ( l ).  Pub. L. 109–7  added subsec. (k) and redesignated former subsec. (k) as ( l ).\n2004—Subsec. (e).  Pub. L. 108–357, §\u202f311(b) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsec. (f).  Pub. L. 108–357, §\u202f311(a) , in heading, substituted “in certain cases” for “where there has been environmental contamination” and, in text, inserted “drought, flood, or other weather-related conditions, or” after “because of” and “in the case of soil contamination or other environmental contamination” after “including real property”.\nSubsec. (h)(3).  Pub. L. 108–311  inserted “Robert T. Stafford” before “Disaster Relief and Emergency Assistance Act”.\n1997—Subsec. (e).  Pub. L. 105–34, §\u202f913(b) , inserted “,\u2000flood, or other weather-related conditions” after “drought” in heading and “,\u2000flood, or other weather-related conditions” before period at end of text.\nSubsec. (h)(4).  Pub. L. 105–34, §\u202f312(d)(1) , substituted “section 121” for “section 1034”.\nSubsec. (i).  Pub. L. 105–34, §\u202f1087(a) , amended heading and text of subsec. (i) generally. Prior to amendment, text read as follows:\n“(1)  In general .—In the case of—\n“(A) a C corporation, or\n“(B) a partnership in which 1 or more C corporations own, directly or indirectly (determined in accordance with section 707(b)(3)), more than 50 percent of the capital interest, or profits interest, in such partnership at the time of the involuntary conversion,\nsubsection (a) shall not apply if the replacement property or stock is acquired from a related person. The preceding sentence shall not apply to the extent that the related person acquired the replacement property or stock from an unrelated person during the period described in subsection (a)(2)(B).\n“(2)  Related person .—For purposes of this subsection, a person is related to another person if the person bears a relationship to the other person described in section 267(b) or 707(b)(1).”\nSubsec. (k)(3).  Pub. L. 105–34, §\u202f312(d)(7) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “For one-time exclusion from gross income of gain from involuntary conversion of principal residence by individual who has attained age 55, see section 121.”\n1996—Subsec. (b).  Pub. L. 104–188, §\u202f1610(a) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If the property was acquired, after  February 28, 1913 , as the result of a compulsory or involuntary conversion described in subsection (a)(1) or section 112(f)(2) of the Internal Revenue Code of 1939, the basis shall be the same as in the case of the property so converted, decreased in the amount of any money received by the taxpayer which was not expended in accordance with the provisions of law (applicable to the year in which such conversion was made) determining the taxable status of the gain or loss upon such conversion, and increased in the amount of gain or decreased in the amount of loss to the taxpayer recognized upon such conversion under the law applicable to the year in which such conversion was made. This subsection shall not apply in respect of property acquired as a result of a compulsory or involuntary conversion of property used by the taxpayer as his principal residence if the destruction, theft, seizure, requisition, or condemnation of such residence, or the sale or exchange of such residence under threat or imminence thereof, occurred after  December 31, 1950 , and before  January 1, 1954 . In the case of property purchased by the taxpayer in a transaction described in subsection (a)(3) which resulted in the nonrecognition of any part of the gain realized as the result of a compulsory or involuntary conversion, the basis shall be the cost of such property decreased in the amount of the gain not so recognized; and if the property purchased consists of more than one piece of property, the basis determined under this sentence shall be allocated to the purchased properties in proportion to their respective costs.”\nSubsec. (h).  Pub. L. 104–188, §\u202f1119(b)(2) , substituted “property” for “principal residences” in heading.\nSubsec. (h)(1).  Pub. L. 104–188, §\u202f1119(b)(3) , substituted “Principal residences” for “In general” in heading.\nSubsec. (h)(2).  Pub. L. 104–188, §\u202f1119(a) , added par. (2). Former par. (2) redesignated (3).\nSubsec. (h)(3).  Pub. L. 104–188, §\u202f1119(a) , (b)(1), redesignated par. (2) as (3) and substituted “property” for “residence” before “is located”. Former par. (3) redesignated (4).\nSubsec. (h)(4).  Pub. L. 104–188, §\u202f1119(a) , redesignated par. (3) as (4).\n1995—Subsec. (i).  Pub. L. 104–7, §\u202f3(a)(1) , added subsec. (i). Former subsec. (i) redesignated (j).\nSubsec. (j).  Pub. L. 104–7, §\u202f3(b)(1) , added subsec. (j). Former subsec. (j) redesignated (k).\nPub. L. 104–7, §\u202f3(a)(1) , redesignated subsec. (i) as (j).\nSubsec. (k).  Pub. L. 104–7, §\u202f3(b)(1) , redesignated subsec. (j) as (k).\n1993—Subsecs. (h), (i).  Pub. L. 103–66  added subsec. (h) and redesignated former subsec. (h) as (i).\n1990—Subsec. (g)(3)(A).  Pub. L. 101–508  struck out “with respect to which the investment credit determined under section 46(a) is or has been claimed or” after “to any property”.\n1984—Subsec. (g)(3)(A).  Pub. L. 98–369  substituted “the investment credit determined under section 46(a)” for “the credit allowed by section 38 (relating to investment in certain depreciable property)”.\n1981—Subsec. (g)(3)(A).  Pub. L. 97–34  substituted “(relating to election to expense certain depreciable business assets)” for “(relating to additional first-year depreciation allowance for small business)”.\n1978—Subsec. (a)(2)(A)(ii).  Pub. L. 95–600, §\u202f703(j)(5) , substituted “subsection (b)” for “subsection (c)”.\nSubsecs. (f), (g).  Pub. L. 95–600, §\u202f542(a) , added subsec. (f) and redesignated former subsecs. (f) and (g) as (g) and (h), respectively.\nSubsec. (h).  Pub. L. 95–600 , §§\u202f404(c)(4), 542(a), redesignated subsec. (g) as (h) and substituted in par. (3) “one-time exclusion” for “exclusion” and “age 55” for “age 65”.\n1976—Subsec. (a)(2), (3).  Pub. L. 94–455 , §§\u202f1901(a)(128)(A), (B), 1906(b)(13)(A), redesignated par. (3) as (2), struck out in heading “where disposition occurred after 1950” after “Conversion into money”, in provisions preceding subpar. (A) “and the disposition of the converted property (as defined in paragraph (2)) occurred after  December 31, 1950 ,” after “use to the converted property,” and in subpar. (B)(ii) “or his delegate” after “Secretary” wherever appearing, and added subpar. (E). Former par. (2), which related to involuntary conversions into money where dispositions occurred prior to 1951, was struck out.\nSubsec. (b).  Pub. L. 94–455, §\u202f1901(a)(128)(C) , (D), redesignated subsec. (c) as (b) and substituted “or section 112(f)(2) of the Internal Revenue Code of 1939” for “or (2)”. Former subsec. (b), which related to application of subsec. (a) in the case of property used by taxpayer as his principal residence, if the destruction, theft, etc., occurred after 1950 and before 1954, was struck out.\nSubsecs. (c) to (e).  Pub. L. 94–455, §\u202f1901(a)(128)(C) , redesignated subsecs. (d) to (f) as (c) to (e), respectively. Former subsec. (c) redesignated (b).\nSubsec. (f).  Pub. L. 94–455 , §§\u202f1901(a)(128)(C), (E), (F), 2127(a), 2140(a), redesignated subsec. (g) as (f), in par. (2) struck out provisions relating to conversion of real property before  Jan. 1, 1958 , and substituted reference to subsection (a)(2)(A) for reference to subsection (a)(3)(A), and added pars. (3) and (4). Former subsec. (f) redesignated (e).\nSubsecs. (g), (h).  Pub. L. 94–455, §\u202f1901(a)(128)(C) , redesignated subsec. (h) as (g). Former subsec. (g) redesignated (f).\n1969—Subsec. (a)(3)(B).  Pub. L. 91–172  substituted “2 years” for “one year”.\n1964—Subsec. (h)(3).  Pub. L. 88–272  added par. (3).\n1958—Subsec. (a)(2).  Pub. L. 85–866, §\u202f45 , inserted provision defining “control”.\nSubsecs. (g), (h).  Pub. L. 85–866, §\u202f46(a) , added subsec. (g) and redesignated former subsec. (g) as (h).\n1956—Subsecs. (f), (g). Act  June 29, 1956 , added subsec. (f) and redesignated former subsec. (f) as (g).\nAmendment by  section 211(c)(1)(A) of Pub. L. 113–295  effective as if included in the provisions of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008,  Pub. L. 110–343, div. C , to which such amendment relates, see  section 211(d) of Pub. L. 113–295 , set out as a note under  section 143 of this title .\nAmendment by section 221(a)(27)(D), (77) of  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 110–343  applicable to disasters declared in taxable years beginning after  Dec. 31, 2007 , see  section 706(d)(1) of Pub. L. 110–343 , set out as a note under  section 56 of this title .\nPub. L. 109–7, §\u202f1(c)(2) ,  Apr. 15, 2005 ,  119 Stat. 22 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to sales or other dispositions before, on, or after the date of the enactment of this Act [ Apr. 15, 2005 ].”\nAmendment by  Pub. L. 108–357  applicable to any taxable year with respect to which the due date (without regard to extensions) for the return is after  Dec. 31, 2002 , see  section 311(d) of Pub. L. 108–357 , set out as a note under  section 451 of this title .\nAmendment by section 312(d)(1), (7) of  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  section 913(b) of Pub. L. 105–34  applicable to sales and exchanges after  Dec. 31, 1996 , see  section 913(c) of Pub. L. 105–34 , set out as a note under  section 451 of this title .\nPub. L. 105–34, title X, §\u202f1087(b) ,  Aug. 5, 1997 ,  111 Stat. 959 , provided that:  “The amendment made by this section [amending this section] shall apply to involuntary conversions occurring after  June 8, 1997 .”\nPub. L. 104–188, title I, §\u202f1119(d)(1) ,  Aug. 20, 1996 ,  110 Stat. 1765 , provided that:  “The amendments made by this section [amending this section] shall apply to disasters declared after  December 31, 1994 , in taxable years ending after such date.”\nPub. L. 104–188, title I, §\u202f1610(b) ,  Aug. 20, 1996 ,  110 Stat. 1845 , provided that:  “The amendment made by this section [amending this section] shall apply to involuntary conversions occurring after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 104–7, §\u202f3(a)(2) ,  Apr. 11, 1995 ,  109 Stat. 95 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to involuntary conversions occurring on or after  February 6, 1995 .”\nPub. L. 104–7, §\u202f3(b)(2) ,  Apr. 11, 1995 ,  109 Stat. 95 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to sales or exchanges after  March 14, 1995 .”\nPub. L. 103–66, title XIII, §\u202f13431(b) ,  Aug. 10, 1993 ,  107 Stat. 567 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to property compulsorily or involuntarily converted as a result of disasters for which the determination referred to in section 1033(h)(2) of the Internal Revenue Code of 1986 (as added by this section) is made on or after  September 1, 1991 , and to taxable years ending on or after such date.”\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 404(c)(4) of Pub. L. 95–600  applicable to sales or exchanges after  July 26, 1978 , in taxable years ending after such date, see  section 404(d)(1) of Pub. L. 95–600 , set out as a note under  section 121 of this title .\nPub. L. 95–600, title V, §\u202f542(b) ,  Nov. 6, 1978 ,  92 Stat. 2888 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1974 .”\nAmendment by  section 703(j)(5) of Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  section 1901(a)(128) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–455, title XXI, §\u202f2127(b) ,  Oct. 4, 1976 ,  90 Stat. 1921 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1970 .”\nPub. L. 94–455, title XXI, §\u202f2140(b) ,  Oct. 4, 1976 ,  90 Stat. 1932 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to any disposition of converted property (within the meaning of section 1033(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) after  December 31, 1974 , unless a condemnation proceeding with respect to such property began before the date of the enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 91–172, title IX, §\u202f915(b) ,  Dec. 30, 1969 ,  83 Stat. 723 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by this section [amending this section] shall apply only if the disposition of the converted property (within the meaning of section 1033(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) occurs after the date of the enactment of this Act [ Dec. 30, 1969 ].”\nAmendment by  Pub. L. 88–272  applicable to dispositions after  Dec. 31, 1963 , in taxable years ending after such date, see  section 206(c) of Pub. L. 88–272 , set out as an Effective Date note under  section 121 of this title .\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nAct June 29, 1956, ch. 464, §\u202f5(b) ,  70 Stat. 407 , provided that:  “The amendment made by this section [amending this section] shall apply with respect to taxable years ending after  December 31, 1955 , but only in the case of sales and exchanges of livestock after  December 31, 1955 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 306 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f46(b) ,  72 Stat. 1642 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f206(b)(4) ,  78 Stat. 40 ;  Jan. 2, 1975 ,  Pub. L. 93–597, §\u202f6(a) ,  88 Stat. 1953 ;  Mar. 29, 1975 ,  Pub. L. 94–12, title II, §\u202f207 ,  89 Stat. 32 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX , §§\u202f1901(a)(129), 1906(b)(13)(A),  90 Stat. 1785 , 1834;  May 23, 1977 ,  Pub. L. 95–30, title I, §\u202f102(b)(13) ,  91 Stat. 138 ;  Nov. 6, 1978 ,  Pub. L. 95–600, title IV , §§\u202f404(c)(5), 405(a)–(c)(1),  92 Stat. 2870 , 2871;  Nov. 8, 1978 ,  Pub. L. 95–615, title II, §\u202f206 ,  92 Stat. 3107 ;  Aug. 13, 1981 ,  Pub. L. 97–34, title I , §§\u202f112(b)(4), 122(a), (b),  95 Stat. 195 , 197;  July 18, 1984 ,  Pub. L. 98–369, div. A, title X, §\u202f1053(a) ,  98 Stat. 1045 ;  Oct. 22, 1986 ,  Pub. L. 99–514, title XVIII, §\u202f1878(g) ,  100 Stat. 2904 ;  Nov. 10, 1988 ,  Pub. L. 100–647, title VI, §\u202f6002(a) ,  102 Stat. 3684 , related to rollover of gain on sale of principal residence.\nRepeal applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 121 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'A contract of endowment insurance is a contract with an insurance company which depends in part on the life expectancy of the insured, but which may be payable in full in a single payment during his life.\nAn annuity contract is a contract to which paragraph (1) applies but which may be payable during the life of the annuitant only in installments. For purposes of the preceding sentence, a contract shall not fail to be treated as an annuity contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.\nA contract of life insurance is a contract to which paragraph (1) applies but which is not ordinarily payable in full during the life of the insured. For purposes of the preceding sentence, a contract shall not fail to be treated as a life insurance contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.\nTo the extent provided in regulations, subsection (a) shall not apply to any exchange having the effect of transferring property to any person other than a United States person.\nAnother  section 1131(b) of Pub. L. 105–34  enacted  section 684 of this title .\n2018—Subsec. (a)(1).  Pub. L. 115–141  struck out “or” after semicolon at end.\n2006—Subsec. (a)(1).  Pub. L. 109–280, §\u202f844(b)(3)(A) , which directed amendment by inserting “or for a qualified long-term care insurance contract” before semicolon “at the end”, was executed by making the insertion before “;\u2000or” to reflect the probable intent of Congress.\nSubsec. (a)(2).  Pub. L. 109–280, §\u202f844(b)(3)(B) , which directed amendment by inserting “,\u2000or (C) for a qualified long-term care insurance contract” before semicolon “at the end”, was executed by making the insertion before “;\u2000or” to reflect the probable intent of Congress.\nSubsec. (a)(3).  Pub. L. 109–280, §\u202f844(b)(3)(C) , inserted “or for a qualified long-term care insurance contract” after “annuity contract”.\nSubsec. (a)(4).  Pub. L. 109–280, §\u202f844(b)(4) , added par. (4).\nSubsec. (b)(2).  Pub. L. 109–280, §\u202f844(b)(1) , inserted at end “For purposes of the preceding sentence, a contract shall not fail to be treated as an annuity contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.”\nSubsec. (b)(3).  Pub. L. 109–280, §\u202f844(b)(2) , inserted at end “For purposes of the preceding sentence, a contract shall not fail to be treated as a life insurance contract solely because a qualified long-term care insurance contract is a part of or a rider on such contract.”\n1997—Subsecs. (c), (d).  Pub. L. 105–34  added subsec. (c) and redesignated former subsec. (c) as (d).\n1986—Subsec. (b)(1).  Pub. L. 99–514  struck out “subject to tax under subchapter L” after “with an insurance company”.\n1984—Subsec. (b)(1).  Pub. L. 98–369, §\u202f224(a) , which directed the substitution of “an insurance company subject to tax under subchapter L” for “a life insurance company as defined in section 801”, was executed by making such substitution for “a life insurance company as defined in section 816” to reflect the probable intent of Congress and the earlier amendment by  Pub. L. 98–369, §\u202f211(b)(15) , which substituted “as defined in section 816” for “as defined in section 801”.\nPub. L. 98–369, §\u202f211(b)(15) , substituted “section 816” for “section 801”.\nAmendment by  Pub. L. 109–280  applicable to contracts issued after  Dec. 31, 1996 , but only with respect to taxable years beginning after  Dec. 31, 2009 , and to exchanges occurring after  Dec. 31, 2009 , see section 844(g)(1), (2) of  Pub. L. 109–280 , set out as a note under  section 72 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 211(b)(5) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nPub. L. 98–369, div. A, title II, §\u202f224(b) ,  July 18, 1984 ,  98 Stat. 776 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to all exchanges whether before, on, or after the date of the enactment of this Act [ July 18, 1984 ].”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'No gain or loss shall be recognized if common stock in a corporation is exchanged solely for common stock in the same corporation, or if preferred stock in a corporation is exchanged solely for preferred stock in the same corporation.\nFor purposes of this section, nonqualified preferred stock (as defined in section 351(g)(2)) shall be treated as property other than stock.\n1997—Subsecs. (b), (c).  Pub. L. 105–34  added subsec. (b) and redesignated former subsec. (b) as (c).\nAmendment by  Pub. L. 105–34  applicable, with certain exceptions, to transactions after  June 8, 1997 , see  section 1014(f) of Pub. L. 105–34 , set out as a note under  section 351 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'When so provided by regulations promulgated by the Secretary in connection with the issue of obligations of the United States, no gain or loss shall be recognized on the surrender to the United States of obligations of the United States issued under chapter 31 of title 31 in exchange solely for other obligations issued under such chapter.\nIn any case in which subsection (a) (or so much of section 1031(b) or (c) as relates to subsection (a) of this section) has applied to the exchange of a transferable obligation which was issued at not less than par for another transferable obligation, the issue price of the obligation received from the Government in the exchange shall be considered for purposes of applying subpart A of part V of subchapter P to be the same as the issue price of the obligation surrendered to the Government in the exchange, increased by the amount of other consideration (if any) paid to the United States as a part of the exchange.\nSection 1271(c), referred to in subsec. (b)(1), was repealed and section 1271(d) redesignated section 1271(c) by  Pub. L. 115–141, div. U, title IV, §\u202f401(c)(1)(A)(i) ,  Mar. 23, 2018 ,  132 Stat. 1205 .\n1984—Subsec. (b).  Pub. L. 98–369, §\u202f42(a)(11)(C) , substituted “original issue discount rules” for “section 1232” in heading.\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f42(a)(11)(A) , (B), substituted “section 1271(c)(2)” for “section 1232(a)(2)(B)”, and “subpart A of part V of subchapter P” for “section 1232”.\nSubsec. (b)(2).  Pub. L. 98–369, §\u202f42(a)(11)(B) , substituted “subpart A of part V of subchapter P” for “section 1232”.\n1983—Subsec. (a).  Pub. L. 97–452  substituted “chapter 31 of title 31” and “chapter” for “the Second Liberty Bond Act” and “Act”, respectively.\n1976—Subsec. (b)(1).  Pub. L. 94–455  substituted in introductory provisions “section 1232(a)(2)(B)” for “section 1232(a)(2)(A)” and in subpar. (A) “ordinary income” for “gain from the sale or exchange of property which is not a capital asset”.\nAmendment by  Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 86–346, title II, §\u202f203 ,  Sept. 22, 1959 ,  73 Stat. 624 , provided that:  “The amendments made by this title [enacting this section and amending  section 1031 of this title  and section 742a of former Title 31, Money and Finance] shall be effective for taxable years ending after the date of enactment of this Act [ Sept. 22, 1959 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'Except as provided in this section, the gain determined under this subsection resulting from a reacquisition to which subsection (a) applies shall be recognized, notwithstanding any other provision of this subtitle.\n1997—Subsec. (e).  Pub. L. 105–34  amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: “If—\n“(1) subsection (a) applies to a reacquisition of real property with respect to the sale of which—\n“(A) an election under section 121 (relating to one-time exclusion of gain from sale of principal residence by individual who has attained age 55) is in effect, or\n“(B) gain was not recognized under section 1034 (relating to rollover of gain on sale of principal residence); and\n“(2) within one year after the date of the reacquisition of such property by the seller, such property is resold by him,\nthen, under regulations prescribed by the Secretary, subsections (b), (c), and (d) of this section shall not apply to the reacquisition of such property and, for purposes of applying sections 121 and 1034, the resale of such property shall be treated as a part of the transaction constituting the original sale of such property.”\n1996—Subsec. (f).  Pub. L. 104–188  struck out subsec. (f) which read as follows:\n“(f)  Reacquisitions by Domestic Building and Loan Associations .—This section shall not apply to a reacquisition of real property by an organization described in section 593(a) (relating to domestic building and loan associations, etc.).”\n1980—Subsec. (g).  Pub. L. 96–471  added subsec. (g).\n1978—Subsec. (e)(1)(A).  Pub. L. 95–600, §\u202f404(c)(6) , substituted “relating to one-time exclusion of gain from sale of principal residence by individual who has attained age 55” for “relating to gain from sale or exchange of residence of an individual who has attained age 65”.\nSubsec. (e)(1)(B).  Pub. L. 95–600, §\u202f405(c)(3) , which directed the amendment of  section 1083(e)(1)(B) of this title  by substituting “(relating to rollover of gain on sale of principal residence)” for “(relating to sale or exchange of residence)”, was executed to this section to reflect the probable intent of Congress because section 1083 does not contain a subsec. (e)(1)(B).\n1976—Subsec. (e).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nPub. L. 96–471, §\u202f6(c) ,  Oct. 19, 1980 ,  94 Stat. 2256 , provided:  “The amendment made by section 4 [amending this section] shall apply to acquisitions of real property by the taxpayer after the date of the enactment of this Act [ Oct. 19, 1980 ].”\nAmendment by  section 404(c)(6) of Pub. L. 95–600  applicable to sales or exchanges after  July 26, 1978 , in taxable years ending after such date, see  section 404(d)(1) of Pub. L. 95–600 , set out as a note under  section 121 of this title .\nPub. L. 95–600, title IV, §\u202f405(d) ,  Nov. 6, 1978 ,  92 Stat. 2871 , provided that:  “The amendments made by this section [amending this section and sections 1034, 1250, 6212, and 6504 of this title] shall apply to sales and exchanges of residences after  July 26, 1978 , in taxable years ending after such date.”\nPub. L. 88–570, §\u202f2(c) ,  Sept. 2, 1964 ,  78 Stat. 856 , provided that: \n “(1)  The amendments made by this section [enacting this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Sept. 2, 1964 ]. \n \n “(2)  If the taxpayer makes an election under this paragraph, the amendments made by this section [enacting this section] shall also apply to taxable years beginning after  December 31, 1957 , except that such amendments shall not apply with respect to any reacquisition of real property in a taxable year for which the assessment of a deficiency, or the credit or refund of an overpayment, is prevented on the date of the enactment of this Act [ Sept. 2, 1964 ] by the operation of any law or rule of law. An election under this paragraph shall be made within one year after the date of the enactment of this Act and shall be made in such form and manner as the Secretary of the Treasury or his delegate shall prescribe by regulations. \n \n “(3)  If an election is made by the taxpayer under paragraph (2), and if the assessment of a deficiency, or the credit or refund of an overpayment, for any taxable year to which such election applies is not prevented on the date of the enactment of this Act [ Sept. 2, 1964 ] by the operation of any law or rule of law— “(A)  the period within which a deficiency for such taxable year may be assessed (to the extent such deficiency is attributable to the application of the amendments made by this section) shall not expire prior to one year after the date of such election; and \n \n “(B)  the period within which a claim for credit or refund of an overpayment for such taxable year may be filed (to the extent such overpayment is attributable to the application of such amendments) shall not expire prior to one year after the date of such election. \n \n\n No interest shall be payable with respect to any deficiency attributable to the application of such amendments, and no interest shall be allowed with respect to any credit or refund of any overpayment attributable to the application of such amendments, for any period prior to the date of the enactment of this Act. An election by a taxpayer under paragraph (2) shall be deemed a consent to the application of this paragraph.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'Section, added  Pub. L. 91–172, title IX, §\u202f910(a) ,  Dec. 30, 1969 ,  83 Stat. 718 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , related to the recognition of gain on certain sales of low-income housing projects.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such transfer, the fair market value of such property exceeds the value of such property for purposes of chapter 11 (determined without regard to section 2032A).\nTo the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A.\nThe basis of property acquired in a transfer with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the transfer increased by the amount of the gain recognized to the estate or trust on the transfer.\n2010— Pub. L. 111–312  amended section to read as if amendment by  Pub. L. 107–16, §\u202f542(d)(1) , had never been enacted. See 2001 Amendment note below.\n2001— Pub. L. 107–16, §\u202f542(d)(1) , amended section generally. Prior to amendment, text read as follows:\n“(a)  General rule .—If the executor of the estate of any decedent transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property with respect to which an election was made under section 2032A, then gain on such transfer shall be recognized to the estate only to the extent that, on the date of such transfer, the fair market value of such property exceeds the value of such property for purposes of chapter 11 (determined without regard to section 2032A).\n“(b)  Similar rule for certain trusts .—To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A.\n“(c)  Basis of property acquired in transfer described in subsection ( a ) or ( b).—The basis of property acquired in a transfer with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the transfer increased by the amount of the gain recognized to the estate or trust on the transfer.”\n1983—Subsec. (a).  Pub. L. 97–448, §\u202f104(b)(3)(A) , substituted “on the date of such transfer” for “on the date of such exchange”.\nSubsec. (c).  Pub. L. 97–448, §\u202f104(b)(3)(B) , substituted references to “transfer”, “a transfer”, and “the transfer” for references to “exchange”, “an exchange”, and “the exchange”, respectively, wherever appearing in heading and text.\n1981— Pub. L. 97–34  substituted “Transfer of certain farm, etc., real property” for “Use of farm, etc., real property to satisfy pecuniary bequest” in section catchline.\nSubsec. (a).  Pub. L. 97–34  revised subsec. (a) generally, substituting “transfers to a qualified heir (within the meaning of section 2032A(e)(1)) any property” for “satisfies the right of a qualified heir (within the meaning of section 2032A(e)(1)) to receive a pecuniary bequest with property” and “such transfer” for “such exchange” before “shall be recognized”.\nSubsec. (b).  Pub. L. 97–34  substituted “shall apply where the trustee of a trust (any portion of which is included in the gross estate of the decedent) transfers property with respect to which an election was made under section 2032A” for “shall apply where—\n“(1) by reason of the death of the decedent, a qualified heir has a right to receive from a trust a specific dollar amount which is the equivalent of a pecuniary bequest, and\n“(2) the trustee of the trust satisfies such right with property with respect to which an election was made under section 2032A”.\n1980— Pub. L. 96–223  substituted “Use of farm, etc., property to satisfy pecuniary bequest” for “Use of certain appreciated carryover basis property to satisfy pecuniary request” in section catchline, generally revised subsecs. (a) and (b) to reflect the repeal elsewhere in the Code of carryover basis provisions, and struck out subsec. (d) which had provided that, for purposes of this section, references to carryover basis property should be treated as including a reference to property the valuation of which is determined under section 2032A.  Pub. L. 96–222  added subsec. (d).\n1978—Subsec. (a).  Pub. L. 95–600  substituted “chapter 11 (determined without regard to section 2032A)” for “chapter 11”.\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying after  Dec. 31, 2009 , see  section 542(f)(1) of Pub. L. 107–16 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to the estates of decedents dying after  Dec. 31, 1976 , upon compliance with certain conditions relating to timely election requirement, reinstatement of elections, and statute of limitations, see  section 421(k)(5) of Pub. L. 97–34 , set out as a note under  section 2032A of this title .\nAmendment by  Pub. L. 96–223  applicable in respect of decedents dying after  Dec. 31, 1976 , see  section 401(e) of Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nPub. L. 96–222, title I, §\u202f105(a)(5)(B) ,  Apr. 1, 1980 ,  94 Stat. 219 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Notwithstanding section 515 of the Revenue Act of 1978 [ section 515 of Pub. L. 95–600  which deferred carryover basis rules until  Dec. 31, 1979 ], section 1040 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subparagraph (A) [amending this section]) shall apply with respect to the estates of decedents dying after  December 31, 1976 .”\nAmendment by  Pub. L. 95–600  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 702(d)(6) of Pub. L. 95–600 , set out as a note under  section 2032A of this title .\nSection applicable in respect of decedents dying after  Dec. 31, 1976 , see  section 2005(f)(1) of Pub. L. 94–455 , set out as a note under  section 1015 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'Subsection (a) shall not apply if the spouse (or former spouse) of the individual making the transfer is a nonresident alien.\n1988—Subsec. (d).  Pub. L. 100–647  substituted “Subsection (a)” for “Paragraph (1) of subsection (a)” and “the spouse (or former spouse)” for “the spouse”.\n1986—Subsec. (e).  Pub. L. 99–514  added subsec. (e).\nPub. L. 100–647, title I, §\u202f1018 ( l )(3),  Nov. 10, 1988 ,  102 Stat. 3584 , provided that the amendment made by that section is effective with respect to transfers after  June 21, 1988 .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f421(d) ,  July 18, 1984 ,  98 Stat. 795 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending sections 47, 72, 101, 453, 453B, 1001, 1015, and 1239 of this title] shall apply to transfers after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Election to have amendments apply to transfers after 1983 .— If both spouses or former spouses make an election under this paragraph, the amendments made by this section shall apply to all transfers made by such spouses (or former spouses) after  December 31, 1983 . \n \n “(3)   Exception for transfers pursuant to existing decrees .— Except in the case of an election under paragraph (2), the amendments made by this section shall not apply to transfers under any instrument in effect on or before the date of the enactment of this Act unless both spouses (or former spouses) elect to have such amendments apply to transfers under such instrument. \n \n “(4)   Election .— Any election under paragraph (2) or (3) shall be made in such manner, at such time, and subject to such conditions, as the Secretary of the Treasury or his delegate may by regulations prescribe.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'The taxpayer files with the Secretary the written statement described in subparagraph (B).\nThe taxpayer’s holding period with respect to the qualified securities is at least 3 years (determined as of the time of the sale).\nThe term “replacement period” means the period which begins 3 months before the date on which the sale of qualified securities occurs and which ends 12 months after the date of such sale.\nThe term “operating corporation” means a corporation more than 50 percent of the assets of which were, at the time the security was purchased or before the close of the replacement period, used in the active conduct of the trade or business.\nFor purposes of clause (i), the term “control” has the meaning given such term by section 304(c). In determining control, there shall be disregarded any qualified replacement property of the taxpayer with respect to the section 1042 sale being tested.\nFor purposes of this paragraph, the term “security” has the meaning given such term by section 165(g)(2), except that such term shall not include any security issued by a government or political subdivision thereof.\nNo sale of securities by an underwriter to an employee stock ownership plan or eligible worker-owned cooperative in the ordinary course of his trade or business as an underwriter, whether or not guaranteed, shall be treated as a sale for purposes of subsection (a).\nAn election under subsection (a) shall be filed not later than the last day prescribed by law (including extensions thereof) for filing the return of tax imposed by this chapter for the taxable year in which the sale occurs.\nSubsection (a) shall not apply to any gain on the sale of any qualified securities which is includible in the gross income of any C corporation.\nIf a taxpayer disposes of any qualified replacement property, then, notwithstanding any other provision of this title, gain (if any) shall be recognized to the extent of the gain which was not recognized under subsection (a) by reason of the acquisition by such taxpayer of such qualified replacement property.\nThis section shall apply to the sale of stock of a qualified refiner or processor to an eligible farmers’ cooperative.\nFor purposes of this section, the term “eligible farmers’ cooperative” means an organization to which part I of subchapter T applies and which is engaged in the marketing of agricultural or horticultural products.\nPub. L. 117–328, div. T, title I, §\u202f114 ,  Dec. 29, 2022 ,  136 Stat. 5296 , provided that, applicable to sales after  Dec. 31, 2027 , this section is amended:\n(a) in subsection (c)(1)(A), by striking “domestic C corporation” and inserting “domestic corporation”; and\n(b) by adding at the end the following new subsection:\n(h) Application of section to sale of stock in S corporation\nIn the case of the sale of qualified securities of an S corporation, the election under subsection (a) may be made with respect to not more than 10 percent of the amount realized on such sale for purposes of determining the amount of gain not recognized and the extent to which (if at all) the amount realized on such sale exceeds the cost of qualified replacement property. The portion of adjusted basis that is properly allocable to the portion of the amount realized with respect to which the election is made under this subsection shall be taken into account for purposes of the preceding sentence.\nSee 2022 Amendment notes below.\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (c)(1)(B)(ii), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nThe Tax Reform Act of 1986, referred to in subsec. (c)(4)(A), is  Pub. L. 99–514 , which was approved  Oct. 22, 1986 .\n2022—Subsec. (c)(1)(A).  Pub. L. 117–328, §\u202f114(a) , substituted “domestic corporation” for “domestic C corporation”.\nSubsec. (h).  Pub. L. 117–328, §\u202f114(b) , added subsec. (h).\n1997—Subsec. (g).  Pub. L. 105–34  added subsec. (g).\n1996—Subsec. (c)(1)(A).  Pub. L. 104–188, §\u202f1316(d)(3) , substituted “domestic C corporation” for “domestic corporation”.\nSubsec. (c)(1)(B)(ii).  Pub. L. 104–188, §\u202f1704(t)(50) , provided that  section 11801(c)(9)(H) of Pub. L. 101–508  shall be applied as if “section 1042(c)(1)(B)” appeared instead of “section 1042(c)(2)(B)”. See 1990 Amendment note below.\nSubsec. (c)(4)(A)(i).  Pub. L. 104–188, §\u202f1311(b)(3) , substituted “section 1362(d)(3)(C)” for “section 1362(d)(3)(D)”.\nSubsec. (c)(4)(B)(ii)(I).  Pub. L. 104–188, §\u202f1616(b)(13) , struck out “or 593” after “section 581”.\n1990—Subsec. (c)(1)(B)(ii).  Pub. L. 101–508 , which directed the amendment of subsec. (c)(2)(B)(ii) by substituting “section 83, 422, or 423 applied (or to which section 422 or 424 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) applied)” for “section 83, 422, 422A, 423, or 424 applies”, was executed to subsec. (c)(1)(B)(ii). See 1996 Amendment note above.\n1989—Subsec. (b)(4).  Pub. L. 101–239  added par. (4).\n1988—Subsec. (b)(3), (4).  Pub. L. 100–647, §\u202f1018(t)(4)(F) , made technical correction to  Pub. L. 99–514, §\u202f1854(a)(3)(B) , see 1986 Amendment notes below.\nSubsec. (c)(4)(A).  Pub. L. 100–647, §\u202f1018(t)(4)(D) , inserted “(as in effect immediately before the Tax Reform Act of 1986)” after “section 954(c)(3)” in last sentence.\nSubsec. (c)(4)(B)(i).  Pub. L. 100–647, §\u202f1018(t)(4)(E) , substituted “replacement period” for “placement period”.\n1986— Pub. L. 99–514, §\u202f1854(a)(11) , which directed that “employee” be inserted before “stock” in section catchline was executed by making the insertion before “stock” the second time that term appears as the probable intent of Congress.\nSubsec. (a).  Pub. L. 99–514, §\u202f1854(a)(1) , substituted “the taxpayer or executor elects in such form as the Secretary may prescribe” for “the taxpayer elects” in par. (1) and inserted “which would be recognized as long-term capital gain” in concluding provisions.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1854(a)(2)(A) , substituted “Plan must hold” for “Employees must own” in heading and amended text generally. Prior to amendment, par. (2) read as follows: “The plan or cooperative referred to in paragraph (1) owns, immediately after the sale, at least 30 percent of the total value of the employer securities (within the meaning of section 409( l )) outstanding as of such time.”\nSubsec. (b)(3).  Pub. L. 99–514, §\u202f1854(a)(3)(B) , as amended by  Pub. L. 100–647, §\u202f1018(t)(4)(F) , redesignated par. (4) as (3) and struck out former par. (3) which related to plans maintained for benefit of employees.\nSubsec. (b)(3)(B).  Pub. L. 99–514, §\u202f1854(f)(3)(B) , amended subpar. (B) similar to amendment by  section 1854(a)(9)(B) of Pub. L. 99–514 , inserting reference to section 4979A.\nPub. L. 99–514, §\u202f1854(a)(9)(B) , substituted “sections 4978 and 4979A” for “section 4978(a)”.\nSubsec. (b)(4).  Pub. L. 99–514, §\u202f1854(a)(3)(B) , as amended by  Pub. L. 100–647, §\u202f1018(t)(4)(F) , redesignated par. (4) as (3).\nSubsec. (c).  Pub. L. 99–514, §\u202f1899A(26) , substituted “this section—” for “this section.—” in introductory provision.\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f1854(a)(4) , substituted “stock outstanding that is” for “securities outstanding that are” in subpar. (A), redesignated subpar. (C) as (B), and struck out former subpar. (B) which read as follows: “at the time of the sale described in subsection (a)(1), have been held by the taxpayer for more than 1 year, and”.\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f1854(a)(5)(A) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “The term ‘qualified replacement property’ means any securities (as defined in section 165(g)(2)) issued by a domestic corporation which does not, for the taxable year in which such stock is issued, have passive investment income (as defined in section 1362(d)(3)(D)) that exceeds 25 percent of the gross receipts of such corporation for such taxable year.”\nSubsec. (c)(5).  Pub. L. 99–514, §\u202f1854(a)(10) , substituted “sold” for “acquired” in heading, and in text substituted “sale of securities” for “acquisition of securities” and inserted “to an employee stock ownership plan or eligible worker-owned cooperative”.\nSubsec. (c)(7).  Pub. L. 99–514, §\u202f1854(a)(6)(A) , added par. (7).\nSubsec. (d).  Pub. L. 99–514, §\u202f1854(a)(7) , inserted last sentence.\nSubsecs. (e), (f).  Pub. L. 99–514, §\u202f1854(a)(8)(A) , added subsec. (e) and redesignated former subsec. (e) as (f).\nPub. L. 117–328, div. T, title I, §\u202f114(c) ,  Dec. 29, 2022 ,  136 Stat. 5296 , provided that:  “The amendments made by this section [amending this section] shall apply to sales after  December 31, 2027 .”\nPub. L. 105–34, title IX, §\u202f968(b) ,  Aug. 5, 1997 ,  111 Stat. 896 , provided that:  “The amendment made by this section [amending this section] shall apply to sales after  December 31, 1997 .”\nAmendment by  section 1316(d)(3) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 1316(f) of Pub. L. 104–188 , set out as a note under  section 170 of this title .\nAmendment by  section 1311(b)(3) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  section 1616(b)(13) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nPub. L. 101–239, title VII, §\u202f7303(b) ,  Dec. 19, 1989 ,  103 Stat. 2352 , provided that:  “The amendment made by this section [amending this section] shall apply to sales after  July 10, 1989 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 1854(a)(1), (2)(A), (4), (5)(A), (7), (10), (11) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 1854(a)(3)(B) of Pub. L. 99–514  applicable to sales of securities after  Oct. 22, 1986 , except that a taxpayer or executor may elect to have section 1042(b)(3) of the Internal Revenue Code of 1954 (as in effect before the amendment by  section 1854(a)(3)(B) of Pub. L. 99–514 ) apply to sales before  Oct. 22, 1986 , as if section 1042(b)(3) included the last sentence of  section 409(n)(1) of this title  (as added by  section 1854(a)(3)(A) of Pub. L. 99–514 ), see  section 1854(a)(3)(C) of Pub. L. 99–514 , as amended, set out as a note under  section 409 of this title .\nPub. L. 99–514, title XVIII, §\u202f1854(a)(6)(B) –(D),  Oct. 22, 1986 ,  100 Stat. 2876 , provided that: \n “(B)  The amendment made by subparagraph (A) [amending this section] shall apply to sales after  March 28, 1985 , except that such amendment shall not apply to sales made before  July 1, 1985 , if made pursuant to a binding contract in effect on  March 28, 1985 , and at all times thereafter. \n \n “(C)  The amendment made by subparagraph (A) shall not apply to any sale occurring on  December 20, 1985 , with respect to which— “(i)  a commitment letter was issued by a bank on  October 31, 1984 , and \n \n “(ii)  a final purchase agreement was entered into on  November 5, 1985 . \n \n \n “(D)  In the case of a sale on  September 27, 1985 , with respect to which a preliminary commitment letter was issued by a bank on  April 10, 1985 , and with respect to which a commitment letter was issued by a bank on  June 28, 1985 , the amendment made by subparagraph (A) shall apply but such sale shall be treated as having occurred on  September 27, 1986 .”\nPub. L. 99–514, title XVIII, §\u202f1854(a)(8)(B) ,  Oct. 22, 1986 ,  100 Stat. 2877 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to dispositions after the date of the enactment of this Act [ Oct. 22, 1986 ], in taxable years ending after such date.”\nAmendment by  section 1854(a)(9)(B) of Pub. L. 99–514  applicable to sales of securities after  Oct. 22, 1986 , see  section 1854(a)(9)(D) of Pub. L. 99–514 , set out as an Effective Date note under  section 4979A of this title .\nAmendment by  section 1854(f)(3)(B) of Pub. L. 99–514  effective  Oct. 22, 1986 , see  section 1854(f)(4)(A) of Pub. L. 99–514 , set out as a note under  section 409 of this title .\nPub. L. 98–369, div. A, title V, §\u202f541(c) ,  July 18, 1984 ,  98 Stat. 890 , provided that:  “The amendments made by this section [enacting this section and amending sections 1016 and 1223 of this title] shall apply to sales of securities in taxable years beginning after the date of enactment of this Act [ July 18, 1984 ].”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1854(a)(2)(B) ,  Oct. 22, 1986 ,  100 Stat. 2873 , provided that: \n “(i)  The requirement that section 1042(b) of the Internal Revenue Code of 1954 [now 1986] shall be applied with regard to section 318(a)(4) of such Code shall apply to sales after  May 6, 1986 . \n \n “(ii)  In the case of sales after  July 18, 1984 , and before the date of the enactment of this Act [ Oct. 22, 1986 ], paragraph (2) of section 1042(b) of such Code shall apply as if it read as follows: “\u202f‘(2)  Employees must own 30 percent of stock after sale .—The plan or cooperative referred to in paragraph (1) owns, immediately after the sale, at least 30 percent of the employer securities or 30 percent of the value of employer securities (within the meaning of section 409(1)) outstanding at the time of sale.’\u202f”\n“\u202f‘(2)  Employees must own 30 percent of stock after sale .—The plan or cooperative referred to in paragraph (1) owns, immediately after the sale, at least 30 percent of the employer securities or 30 percent of the value of employer securities (within the meaning of section 409(1)) outstanding at the time of sale.’\u202f”\nPub. L. 99–514, title XVIII, §\u202f1854(a)(5)(B) ,  Oct. 22, 1986 ,  100 Stat. 2875 , provided that:  \n “If— “(i)  before  January 1, 1987 , the taxpayer acquired any security (as defined in section 165(g)(2) of the Internal Revenue Code of 1954 [now 1986]) issued by a domestic corporation or by any State or political subdivision thereof, \n \n “(ii)  the taxpayer treated such security as qualified replacement property for purposes of section 1042 of such Code, and \n \n “(iii)  such property does not meet the requirements of section 1042(c)(4) of such Code (as amended by subparagraph (A)), \n \n\n then, with respect to so much of any gain which the taxpayer treated as not recognized under section 1042(a) by reason of the acquisition of such property, the replacement period for purposes of such section shall not expire before  January 1, 1987 .”\nPub. L. 105–34, title IX, §\u202f968 ,  Aug. 5, 1997 ,  111 Stat. 895 , amending this section and enacting provisions set out as a note above, was subject to line item veto by the President, Cancellation No. 97–2, signed  Aug. 11, 1997 , 62 F.R. 43267,  Aug. 12, 1997 . For decision holding line item veto unconstitutional, see  Clinton v. City of New York , 524 U.S. 417, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'If an eligible person sells any property pursuant to a certificate of divestiture, at the election of the taxpayer, gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds the cost (to the extent not previously taken into account under this subsection) of any permitted property purchased by the taxpayer during the 60-day period beginning on the date of such sale.\nThe term “permitted property” means any obligation of the United States or any diversified investment fund approved by regulations issued by the Office of Government Ethics.\nThe taxpayer shall be considered to have purchased any permitted property if, but for subsection (c), the unadjusted basis of such property would be its cost within the meaning of section 1012.\nThe term “judicial officer” means the Chief Justice of the United States, the Associate Justices of the Supreme Court, and the judges of the United States courts of appeals, United States district courts, including the district courts in Guam, the Northern Mariana Islands, and the Virgin Islands, Court of Appeals for the Federal Circuit, Court of International Trade, Tax Court, Court of Federal Claims, Court of Appeals for Veterans Claims, United States Court of Appeals for the Armed Forces, and any court created by Act of Congress, the judges of which are entitled to hold office during good behavior.\nIf gain from the sale of any property is not recognized by reason of subsection (a), such gain shall be applied to reduce (in the order acquired) the basis for determining gain or loss of any permitted property which is purchased by the taxpayer during the 60-day period described in subsection (a).\n2006—Subsec. (b)(1)(A).  Pub. L. 109–432, §\u202f418(a)(1)(A) , inserted “,\u2000or a judicial officer,” after “executive branch”.\nSubsec. (b)(1)(B), (2)(A).  Pub. L. 109–432, §\u202f418(a)(1)(B) , (2)(A), inserted “judicial canon,” after “rule,”.\nSubsec. (b)(2)(B).  Pub. L. 109–432, §\u202f418(a)(2)(B) , inserted “in the case of executive branch officers or employees, or by the Judicial Conference of the United States (or its designee), in the case of judicial officers,” after “Ethics,”.\nSubsec. (b)(5)(B).  Pub. L. 109–432, §\u202f418(a)(3) , inserted “judicial canon,” after “rule,”.\nSubsec. (b)(6).  Pub. L. 109–432, §\u202f418(b) , added par. (6).\n1990—Subsec. (a).  Pub. L. 101–508  substituted “to the extent not previously taken into account under this subsection” for “reduced by any basis adjustment under subsection (c) attributable to a prior sale”.\nSubsec. (b)(5).  Pub. L. 101–280  added par. (5).\nPub. L. 109–432, div. A, title IV, §\u202f418(c) ,  Dec. 20, 2006 ,  120 Stat. 2967 , provided that:  “The amendments made by this section [amending this section] shall apply to sales after the date of enactment of this Act [ Dec. 20, 2006 ].”\nPub. L. 101–508, title XI, §\u202f11703(a)(2) ,  Nov. 5, 1990 ,  104 Stat. 1388–517 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to sales after  November 30, 1989 .”\nPub. L. 101–280, §\u202f6(a)(3) ,  May 4, 1990 ,  104 Stat. 160 , provided that:  “The amendment made by paragraph (1) [amending this section] and the provisions of paragraph (2) [set out below] shall apply to sales after  November 30, 1989 .”\nSection applicable to sales after  Nov. 30, 1989 , see  section 502(c) of Pub. L. 101–194 , set out as an Effective Date of 1989 Amendment note under  section 1016 of this title .\nPub. L. 101–280, §\u202f6(a)(2) ,  May 4, 1990 ,  104 Stat. 160 , provided that: \n “(A)  For purposes of section 1043 of such Code— “(i)  any property sold before  June 19, 1990 , shall be treated as sold pursuant to a certificate of divestiture (as defined in subsection (b)(2) thereof) if such a certificate is issued with respect to such sale before such date, and \n \n “(ii)  in any such case, the 60-day period referred to in subsection (a) thereof shall not expire before the end of the 60-day period beginning on the date on which the certificate of divestiture was issued. \n \n \n “(B)  Notwithstanding subparagraph (A), section 1043 of such Code shall not apply to any sale before  April 19, 1990 , unless— “(i)  the sale was made in order to comply with an ethics agreement or pursuant to specific direction from the appropriate agency or confirming committee, and \n \n “(ii)  the justification for the sale meets the criteria set forth in subsection (b)(2)(A) thereof as implemented by the interim regulations implementing such section 1043, published on  April 18, 1990 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'Section, added  Pub. L. 103–66, title XIII, §\u202f13114(a) ,  Aug. 10, 1993 ,  107 Stat. 430 ; amended  Pub. L. 104–188, title I, §\u202f1703(a) ,  Aug. 20, 1996 ,  110 Stat. 1875 , related to rollover of publicly traded securities gain into specialized small business investment companies.\nRepeal applicable to sales after  Dec. 31, 2017 , see  section 13313(c) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 1016 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'COMMON NONTAXABLE EXCHANGES'},
  'content': 'The term “qualified small business stock” has the meaning given such term by section 1202(c).\nA taxpayer shall be treated as having purchased any property if, but for paragraph (3), the unadjusted basis of such property in the hands of the taxpayer would be its cost (within the meaning of section 1012).\nIf gain from any sale is not recognized by reason of subsection (a), such gain shall be applied to reduce (in the order acquired) the basis for determining gain or loss of any qualified small business stock which is purchased by the taxpayer during the 60-day period described in subsection (a).\nRules similar to the rules of subsections (f), (g), (h), (i), (j), and (k) of section 1202 shall apply.\n1998—Subsec. (a).  Pub. L. 105–206, §\u202f6005(f)(1) , in introductory provisions, substituted “a taxpayer other than a corporation” for “an individual” and “such taxpayer” for “such individual”.\nSubsec. (b)(5).  Pub. L. 105–206, §\u202f6005(f)(2) , added par. (5).\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nSection applicable to sales after  Aug. 5, 1997 , see  section 313(c) of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 1016 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'Section,  Aug. 16, 1954, ch. 736 ,  68A Stat. 310 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(131), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1786 , 1834, related to property acquired by a corporation during affiliation.\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'If the property was acquired, after  February 28, 1913 , in any taxable year beginning before  January 1, 1934 , and the basis thereof, for purposes of the Revenue Act of 1932 was prescribed by section 113(a)(6), (7), or (9) of such Act ( 47 Stat. 199 ), then for purposes of this subtitle the basis shall be the same as the basis therein prescribed in the Revenue Act of 1932.\nIf the property was acquired, after  February 28, 1913 , in any taxable year beginning before  January 1, 1936 , and the basis thereof, for purposes of the Revenue Act of 1934, was prescribed by section 113(a)(6), (7), or (8) of such Act ( 48 Stat. 706 ), then for purposes of this subtitle the basis shall be the same as the basis therein prescribed in the Revenue Act of 1934.\nIf the property was acquired, after  February 28, 1913 , in a transaction to which the Internal Revenue Code of 1939 applied, and the basis thereof, for purposes of the Internal Revenue Code of 1939, was prescribed by section 113(a)(6), (7), (8), (13), (15), (18), (19), or (23) of such code, then for purposes of this subtitle the basis shall be the same as the basis therein prescribed in the Internal Revenue Code of 1939.\nRevenue Act of 1932, referred to in section catchline and subsec. (a), is  act June 6, 1932, ch. 209 ,  47 Stat. 169 . For complete classification of the Act to the Code, see Tables.\nRevenue Act of 1934, referred to in section catchline and subsec. (b), is  act May 10, 1934, ch. 277 ,  48 Stat. 680 . For complete classification of this Act to the Code, see Tables.\nThe Internal Revenue Code of 1939, referred to in section catchline and subsec. (c), is  act Feb. 10, 1939, ch. 2 ,  53 Stat. 1 . Prior to the enactment of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the 1939 Code was classified to former Title 26, Internal Revenue Code. For Table comparisons of the 1939 Code to the 1986 Code, see table I preceding  section 1 of this title .\nSection 113 of the Internal Revenue Code of 1939, referred to in subsec. (c), was classified to section 113 of former Title 26, Internal Revenue Code. Section 113 was repealed by  section 7851(a)(1)(A) of this title . For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title . See, also,  section 7851(e) of this title  for provision that references in the 1986 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1986 Code, which is then applicable.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'In the case of property acquired before  March 1, 1913 , if the basis otherwise determined under this subtitle, adjusted (for the period before  March 1, 1913 ) as provided in section 1016, is less than the fair market value of the property as of  March 1, 1913 , then the basis for determining gain shall be such fair market value. In determining the fair market value of stock in a corporation as of  March 1, 1913 , due regard shall be given to the fair market value of the assets of the corporation as of that date.\n1958— Pub. L. 85–866  substituted “subtitle” for “part”.\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'In the case of a share of stock issued pursuant to section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C., sec. 1718), the basis of such share in the hands of the initial holder shall be an amount equal to the capital contributions evidenced by such share reduced by the amount (if any) required by section 162(d) to be treated (with respect to such share) as ordinary and necessary expenses paid or incurred in carrying on a trade or business.\nA prior section 1054 was renumbered  section 1062 of this title .\nSection applicable with respect to taxable years beginning after  Dec. 31, 1959 , see  section 8(d) of Pub. L. 86–779 , set out as an Effective Date of 1960 Amendment note under  section 162 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'Subsection (a) shall take effect on the day after the date of the enactment of this section and shall apply with respect to taxable years ending after such date of enactment.\nIn determining the basis of real property held subject to liabilities under a redeemable ground rent, subsection (a) shall apply whether such real property was acquired before or after the enactment of this section.\nIn the case of a redeemable ground rent reserved or created on or before the date of the enactment of this section in connection with a transfer of the right to hold real property subject to liabilities under such ground rent, the basis of such ground rent after such date in the hands of the person who reserved or created the ground rent shall be the amount taken into account in respect of such ground rent for Federal income tax purposes as consideration for the disposition of such real property. If no such amount was taken into account, such basis shall be determined as if this section had not been enacted.\nFor treatment of rentals under redeemable ground rents as interest, see section 163(c).\nDate of the enactment of this section, referred to in subsec. (b)(1), (3), means  Apr. 10, 1963 , the date of approval of  Pub. L. 88–9 .\nA prior section 1055 was renumbered  section 1062 of this title .\nPub. L. 88–9, §\u202f2 ,  Apr. 10, 1963 ,  77 Stat. 8 , provided that:  “The amendments made by subsection (a) of the first section of this Act [amending  section 163 of this title ] shall take effect as of  January 1, 1962 , and shall apply with respect to taxable years ending on or after such date. The amendments made by subsection (b) of the first section of this Act [enacting this section] shall take effect on the day after the date of the enactment of this Act [ Apr. 10, 1963 ] and shall apply with respect to taxable years ending after such date of enactment.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'Section, added  Pub. L. 94–455, title II, §\u202f212(a)(1) ,  Oct. 4, 1976 ,  90 Stat. 1545 ; amended  Pub. L. 99–514, title VI, §\u202f631(e)(13) ,  Oct. 22, 1986 ,  100 Stat. 2275 , related to basis limitation for player contracts transferred in connection with the sale of a franchise.\nA prior section 1056 was renumbered  section 1062 of this title .\nRepeal applicable to property acquired after  Oct. 22, 2004 , see  section 886(c)(1) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendment note under  section 197 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'Section, added  Pub. L. 94–455, title X, §\u202f1015(c) ,  Oct. 4, 1976 ,  90 Stat. 1618 , related to election to treat transfer to foreign trust, etc., as taxable exchange.\nA prior section 1057 was renumbered  section 1062 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'In the case of a taxpayer who transfers securities (as defined in section 1236(c)) pursuant to an agreement which meets the requirements of subsection (b), no gain or loss shall be recognized on the exchange of such securities by the taxpayer for an obligation under such agreement, or on the exchange of rights under such agreement by that taxpayer for securities identical to the securities transferred by that taxpayer.\nProperty acquired by a taxpayer described in subsection (a), in a transaction described in that subsection, shall have the same basis as the property transferred by that taxpayer.\nA prior section 1058 was renumbered  section 1062 of this title .\nSection applicable with respect to amounts received after  Dec. 31, 1976 , as payments with respect to securities loans (as defined in  section 512(a)(5) of this title ), and transfers of securities, under agreements described in this section, occurring after such date, see  section 2(e) of Pub. L. 95–345 , set out as an Effective Date of 1978 Amendment note under  section 509 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'The basis of such corporation in such stock shall be reduced (but not below zero) by the nontaxed portion of such dividends.\nIf the nontaxed portion of such dividends exceeds such basis, such excess shall be treated as gain from the sale or exchange of such stock for the taxable year in which the extraordinary dividend is received.\nThe term “extraordinary dividend” means any dividend with respect to a share of stock if the amount of such dividend equals or exceeds the threshold percentage of the taxpayer’s adjusted basis in such share of stock.\nIf the taxpayer establishes to the satisfaction of the Secretary the fair market value of any share of stock as of the day before the ex-dividend date, the taxpayer may elect to apply paragraphs (1) and (3) by substituting such value for the taxpayer’s adjusted basis.\nAny reduction in basis under subsection (a)(1) shall be treated as occurring at the beginning of the ex-dividend date of the extraordinary dividend to which the reduction relates.\nTo the extent any dividend consists of property other than cash, the amount of such dividend shall be treated as the fair market value of such property (as of the date of the distribution) reduced as provided in section 301(b)(2).\nFor purposes of determining the holding period of stock under subsection (a), rules similar to the rules of paragraphs (3) and (4) of section 246(c) shall apply and there shall not be taken into account any day which is more than 2 years after the date on which such share becomes ex-dividend.\nThe term “ex-dividend date” means the date on which the share of stock becomes ex-dividend.\nThe term “dividend announcement date” means, with respect to any dividend, the date on which the corporation declares, announces, or agrees to the amount or payment of such dividend, whichever is the earliest.\nThis paragraph shall not apply to any extraordinary dividend to the extent such application is inconsistent with the purposes of this section.\nAn exchange described in section 356 which is treated as a dividend shall be treated as a redemption of stock for purposes of applying subparagraph (A).\nExcept as provided in regulations, the term “extraordinary dividend” does not include any qualifying dividend (within the meaning of section 243).\nThe stated rate of return shall be the annual rate of the qualified preferred dividend payable with respect to any share of stock (expressed as a percentage of the amount described in clause (i)(II)).\nIn determining the holding period for purposes of subparagraph (A)(ii), subsection (d)(3) shall be applied by substituting “5 years” for “2 years”.\nAny dividend with respect to disqualified preferred stock shall be treated as an extraordinary dividend to which paragraphs (1) and (2) of subsection (a) apply without regard to the period the taxpayer held the stock.\nA prior section 1059 was renumbered  section 1062 of this title .\n2018—Subsec. (d)(3).  Pub. L. 115–141  substituted “and there shall not be taken into account any day which is more than 2 years after the date on which such share becomes ex-dividend.” for “;\u2000except that ‘2 years’ shall be substituted for the number of days specified in subparagraph (B) of section 246(c)(3).”\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97  substituted “245, or 245A” for “or 245”.\n2014—Subsec. (b)(2)(B).  Pub. L. 113–295  struck out “,\u2000244,” after “243”.\n1998—Subsec. (g)(1).  Pub. L. 105–206  substituted “,\u2000in the case of stock held by pass-thru entities, and in the case of consolidated groups” for “and in the case of stock held by pass-thru entities”.\n1997—Subsec. (a)(2).  Pub. L. 105–34, §\u202f1011(a) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “In addition to any gain recognized under this chapter, there shall be treated as gain from the sale or exchange of any stock for the taxable year in which the sale or disposition of such stock occurs an amount equal to the aggregate nontaxed portions of any extraordinary dividends with respect to such stock which did not reduce the basis of such stock by reason of the limitation on reducing basis below zero.”\nSubsec. (d)(1).  Pub. L. 105–34, §\u202f1011(c) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows:\n“(A)  In general .—Except as provided in subparagraph (B), any reduction in basis under subsection (a)(1) shall occur immediately before any sale or disposition of the stock.\n“(B)  Special rule for computing extraordinary dividend .—In determining a taxpayer’s adjusted basis for purposes of subsection (c)(1), any reduction in basis under subsection (a)(1) by reason of a prior distribution which was an extraordinary dividend shall be treated as occurring at the beginning of the ex-dividend date for such distribution.”\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f1604(d)(1) , substituted “subsection (a)” for “subsection (a)(2)”.\nSubsec. (e)(1).  Pub. L. 105–34, §\u202f1011(b) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “Except as otherwise provided in regulations, in the case of any redemption of stock which is—\n“(A) part of a partial liquidation (within the meaning of section 302(e)) of the redeeming corporation, or\n“(B) not pro rata as to all shareholders,\nany amount treated as a dividend under section 301 with respect to such redemption shall be treated as an extraordinary dividend to which paragraphs (1) and (2) of subsection (a) apply without regard to the period the taxpayer held such stock.”\nSubsec. (e)(1)(A)(iii).  Pub. L. 105–34, §\u202f1013(b) , amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “which would not have been treated (in whole or in part) as a dividend if any options had not been taken into account under section 318(a)(4).”\n1989—Subsecs. (f), (g).  Pub. L. 101–239  added subsecs. (f) and (g) and struck out former subsec. (f) which read as follows: “ Regulations .—The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations providing for the application of this section in the case of stock dividends, stock splits, reorganizations, and other similar transactions and in the case of stock held by pass-thru entities.”\n1988—Subsec. (d)(5).  Pub. L. 100–647, §\u202f1006(c)(2) , inserted “amount or” after “agrees to the”.\nPub. L. 100–647, §\u202f1006(c)(1) , redesignated par. (6) as (5) and struck out former par. (5) which related to extension to certain property distributions.\nSubsec. (d)(6).  Pub. L. 100–647, §\u202f1006(c)(3) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “Subsection (a) shall not apply to any extraordinary dividend with respect to any share of stock of a corporation if—\n“(A) such stock was held by the taxpayer during the entire period such corporation (and any precedessor [sic] corporation) was in existence,\n“(B) except as provided in regulations, the only earnings and profits of such corporation were earnings and profits accumulated by such corporation (or any predecessor corporation) during such period, and\n“(C) the application of this paragraph to such dividend is not inconsistent with the purposes of this section.”\nPub. L. 100–647, §\u202f1006(c)(1) , redesignated par. (7) as (6). Former par. (6) redesignated (5).\nSubsec. (d)(7).  Pub. L. 100–647, §\u202f1006(c)(1) , redesignated par. (7) as (6).\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f1006(c)(4) , substituted “to which paragraphs (1) and (2) of subsection (a) apply without regard to the period the taxpayer held such stock” for “for purposes of this section (without regard to the holding period of the stock)”.\nSubsec. (e)(2).  Pub. L. 100–647, §\u202f1006(c)(5) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Except as provided in regulations, the term ‘extraordinary dividend’ shall not include any qualifying dividend (within the meaning of section 243(b)(1)).”\nSubsec. (e)(3)(A).  Pub. L. 100–647, §\u202f1006(c)(6) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “A qualified preferred dividend shall be treated as an extraordinary dividend—\n“(i) only if the actual rate of return of the taxpayer on the stock with respect to which such dividend was paid exceeds 15 percent, or\n“(ii) if clause (i) does not apply, and the taxpayer disposes of such stock before the taxpayer has held such stock for more than 5 years, only to the extent the actual rate of return exceeds the stated rate of return.”\nSubsec. (e)(3)(B).  Pub. L. 100–647, §\u202f1006(c)(8)(A) , which directed the amendment of subpar. (B) “by striking out ‘subparagraph (A)’ and the material preceding clause (i) and inserting in lieu thereof ‘this paragraph’\u202f”, was executed by striking out “subparagraph (A)” in the material preceding clause (i) and inserting in lieu thereof “this paragraph”, to reflect the probable intent of Congress.\nSubsec. (e)(3)(B)(ii).  Pub. L. 100–647, §\u202f1006(c)(8)(B) , substituted “clause (i)(II)” for “subparagraph (B)(i)(II)”.\nSubsec. (e)(3)(C)(i).  Pub. L. 100–647, §\u202f1006(c)(7) , inserted “fixed” before “dividend payable” in introductory provisions and inserted at end “Such term shall not include any dividend payable with respect to any share of stock if the actual rate of return on such stock exceeds 15 percent.”\nSubsec. (f).  Pub. L. 100–647, §\u202f1006(c)(9) , inserted “and in the case of stock held by pass-thru entities” after “other similar transactions”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f614(a)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “If any corporation—\n“(1) receives an extraordinary dividend with respect to any share of stock, and\n“(2) sells or otherwise disposes of such stock before such stock has been held for more than 1 year,\nthe basis of such corporation in such stock shall be reduced by the nontaxed portion of such dividend. If the nontaxed portion of such dividend exceeds such basis, such excess shall be treated as gain from the sale or exchange of such stock.”\nSubsec. (c)(1).  Pub. L. 99–514, §\u202f614(c)(2) , struck out “(determined without regard to this section)” after “such share of stock”.\nSubsec. (c)(4).  Pub. L. 99–514, §\u202f614(b) , added par. (4).\nSubsec. (d)(1).  Pub. L. 99–514, §\u202f614(c)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Any reduction in basis under subsection (a) by reason of any distribution which is an extraordinary dividend shall occur at the beginning of the ex-dividend date for such distribution.”\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f614(a)(3) , substituted “2 years” for “1 year”.\nSubsec. (d)(6).  Pub. L. 99–514, §\u202f614(a)(2) , added par. (6).\nSubsec. (d)(7).  Pub. L. 99–514, §\u202f614(d) , added par. (7).\nSubsecs. (e), (f).  Pub. L. 99–514, §\u202f614(e) , added subsec. (e) and redesignated former subsec. (e) as (f).\nAmendment by  Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , see  section 14101(f) of Pub. L. 115–97 , set out as an Effective Date note under  section 245A of this title .\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title X, §\u202f1011(d) ,  Aug. 5, 1997 ,  111 Stat. 913 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to distributions after  May 3, 1995 . \n \n “(2)   Transition rule .— The amendments made by this section shall not apply to any distribution made pursuant to the terms of— “(A)  a written binding contract in effect on  May 3, 1995 , and at all times thereafter before such distribution, or \n \n “(B)  a tender offer outstanding on  May 3, 1995 . \n \n \n “(3)   Certain dividends not pursuant to certain redemptions .— In determining whether the amendment made by subsection (a) applies to any extraordinary dividend other than a dividend treated as an extraordinary dividend under section 1059(e)(1) of the Internal Revenue Code of 1986 (as amended by this Act), paragraphs (1) and (2) shall be applied by substituting ‘ September 13, 1995 ’ for ‘ May 3, 1995 ’.”\nAmendment by  section 1013(b) of Pub. L. 105–34  applicable to distributions and acquisitions after  June 8, 1997 , with certain exceptions, see  section 1013(d) of Pub. L. 105–34 , set out as a note under  section 304 of this title .\nPub. L. 101–239, title VII, §\u202f7206(b) ,  Dec. 19, 1989 ,  103 Stat. 2337 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to stock issued after  July 10, 1989 , in taxable years ending after such date. \n \n “(2)   Binding contract .— The amendment made by subsection (a) shall not apply to any stock issued pursuant to a written binding contract in effect on  July 10, 1989 , and at all times thereafter before the stock is issued.”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f614(f) ,  Oct. 22, 1986 ,  100 Stat. 2254 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [amending this section] shall apply to dividends declared after  July 18, 1986 , in taxable years ending after such date. \n \n “(2)   Aggregation .— For purposes of section 1059(c)(3) of the Internal Revenue Code of 1986, dividends declared after  July 18, 1986 , shall not be aggregated with dividends declared on or before  July 18, 1986 . \n \n “(3)   Redemptions .— Section 1059(e)(1) of the Internal Revenue Code of 1986 (as added by subsection (e)) shall apply to dividends declared after the date of the enactment of this Act [ Oct. 22, 1986 ], in taxable years ending after such date.”\nPub. L. 98–369, div. A, title I, §\u202f53(e) ,  July 18, 1984 ,  98 Stat. 568 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1804(b)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2798, provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [enacting this section and amending sections 246, 1016, and 7701 of this title] shall apply to distributions after  March 1, 1984 , in taxable years ending after such date. \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending  section 246 of this title ] shall apply to stock acquired after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(3)   Related person provisions.— “(A)   In general .— Except as otherwise provided in subparagraph (B), the amendment made by subsection (c) [amending  section 7701 of this title ] shall take effect on  July 18, 1984 . \n \n “(B)   Special rule for purposes of section 265(2) .— The amendment made by subsection (c) insofar as it relates to section 265(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to— “(i)  term loans made after  July 18, 1984 , and \n \n “(ii)  demand loans outstanding after  July 18, 1984  (other than any loan outstanding on  July 18, 1984 , and repaid before  September 18, 1984 ). \n \n \n “(C)   Treatment of renegotiations, etc .— For purposes of this paragraph, any loan renegotiated, extended, or revised after  July 18, 1984 , shall be treated as a loan made after such date. \n \n “(D)   Definition of term and demand loans .— For purposes of this paragraph, the terms ‘demand loan’ and ‘term loan’ have the respective meanings given such terms by paragraphs (5) and (6) of section 7872(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], except that the second sentence of such paragraph (5) shall not apply.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'The term “customs value” means the value taken into account for purposes of determining the amount of any customs duties or any other duties which may be imposed on the importation of any property.\nExcept as provided in regulations, the term “import” means the entering, or withdrawal from warehouse, for consumption.\nPub. L. 99–514, title XII, §\u202f1248(c) ,  Oct. 22, 1986 ,  100 Stat. 2584 , provided that:  “The amendments made by this section [enacting this section] shall apply to transactions entered into after  March 18, 1986 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'The term “10-percent owner” means, with respect to any entity, any person who holds 10 percent or more (by value) of the interests in such entity immediately before the transfer.\nSection 318 shall apply in determining ownership of stock in a corporation. Similar principles shall apply in determining the ownership of interests in any other entity.\nFor purposes of this subsection, the term “related person” means any person who is related (within the meaning of section 267(b) or 707(b)(1)) to the 10-percent owner.\nFor provisions relating to penalties for failure to file a return required by this section, see section 6721.\nA prior section 1060 was renumbered  section 1062 of this title .\n1993—Subsec. (b)(1).  Pub. L. 103–66, §\u202f13261(e)(1) , substituted “section 197 intangibles” for “goodwill or going concern value”.\nSubsec. (d)(1).  Pub. L. 103–66, §\u202f13261(e)(2) , substituted “section 197 intangibles” for “goodwill or going concern value (or similar items)”.\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f11323(a) , inserted at end “If in connection with an applicable asset acquisition, the transferee and transferor agree in writing as to the allocation of any consideration, or as to the fair market value of any of the assets, such agreement shall be binding on both the transferee and transferor unless the Secretary determines that such allocation (or fair market value) is not appropriate.”\nSubsecs. (e), (f).  Pub. L. 101–508, §\u202f11323(b)(1) , added subsec. (e) and redesignated former subsec. (e) as (f).\n1988—Subsec. (b)(3).  Pub. L. 100–647, §\u202f1006(h)(1) , substituted “deems” for “may find”.\nSubsec. (d).  Pub. L. 100–647, §\u202f1006(h)(2) , added subsec. (d).\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(h)(3)(B) , added subsec. (e).\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nAmendment by  Pub. L. 101–508  applicable to acquisitions after  Oct. 9, 1990 , but not applicable to any acquisition pursuant to a written binding contract in effect on  Oct. 9, 1990 , and at all times thereafter before such acquisition, see  section 11323(d) of Pub. L. 101–508 , set out as a note under  section 338 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title VI, §\u202f641(c) ,  Oct. 22, 1986 ,  100 Stat. 2283 , provided that:  “The amendments made by this section [enacting this section and renumbering former section 1060 as 1061] shall apply to any acquisition of assets after  May 6, 1986 , unless such acquisition is pursuant to a binding contract which was in effect on  May 6, 1986 , and at all times thereafter.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'To the extent provided by the Secretary, subsection (a) shall not apply to income or gain attributable to any asset not held for portfolio investment on behalf of third party investors.\nExcept as provided in this paragraph or paragraph (4), the term “applicable partnership interest” means any interest in a partnership which, directly or indirectly, is transferred to (or is held by) the taxpayer in connection with the performance of substantial services by the taxpayer, or any other related person, in any applicable trade or business. The previous sentence shall not apply to an interest held by a person who is employed by another entity that is conducting a trade or business (other than an applicable trade or business) and only provides services to such other entity.\nThe term “specified asset” means securities (as defined in section 475(c)(2) without regard to the last sentence thereof), commodities (as defined in section 475(e)(2)), real estate held for rental or investment, cash or cash equivalents, options or derivative contracts with respect to any of the foregoing, and an interest in a partnership to the extent of the partnership’s proportionate interest in any of the foregoing.\nThe Secretary shall require such reporting (at the time and in the manner prescribed by the Secretary) as is necessary to carry out the purposes of this section.\nThe Secretary shall issue such regulations or other guidance as is necessary or appropriate to carry out the purposes of this section\u202f 2 2 \u202fSo in original. Probably should be followed by a period.\nA prior section 1061 was renumbered  section 1062 of this title .\nPub. L. 115–97, title I, §\u202f13309(c) ,  Dec. 22, 2017 ,  131 Stat. 2131 , provided that:  “The amendments made by this section [enacting this section and renumbering former section 1061 as 1062] shall apply to taxable years beginning after  December 31, 2017 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': '2017— Pub. L. 115–97  renumbered  section 1061 of this title  as this section.\n2006—Par. (1).  Pub. L. 109–304, §\u202f17(e)(5)(A) , substituted “chapter 573 of title 46, United States Code, see  section 57307 of title 46 ” for “section 510 of the Merchant Marine Act, 1936, see subsection (e) of that section, as amended  August 4, 1939  (46 U.S.C. App. 1160)”.\nPar. (2).  Pub. L. 109–304, §\u202f17(e)(5)(B) , substituted “chapter 533 of title 46, United States Code” for “section 511 of such Act, as amended (46 U.S.C. App. 1161)”.\nPar. (3).  Pub. L. 109–304, §\u202f17(e)(5)(C) , struck out par. (3), which read as follows: “For nonrecognition of gain in connection with vessels exchanged with the Maritime Administration under section 8 of the Merchant Ship Sales Act of 1946, see subsection (a) of that section (50 U.S.C. App. 1741).”\n1986— Pub. L. 99–514, §\u202f641(a) , renumbered  section 1060 of this title  as this section.\nPars. (1), (2).  Pub. L. 99–514, §\u202f1899A(27) , which directed the amendment of pars. (1) and (2) of section 1060 by substituting “46 U.S.C. App.” for “46 U.S.C.” was executed to section 1061 to reflect the probable intent of Congress in view of the renumbering of section 1060 as 1061 by  section 641(a) of Pub. L. 99–514 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 311 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f48(a) ,  72 Stat. 1642 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX , §§\u202f1901(b)(31)(E), 1906(b)(13)(A),  90 Stat. 1800 , 1834, provided for nonrecognition on FCC certified sales and exchanges.\nPub. L. 104–7, §\u202f2(d) ,  Apr. 11, 1995 ,  109 Stat. 93 , provided that: \n “(1)   In general .— The amendments made by this section [repealing this section and amending sections 1245 and 1250 of this title] shall apply to— “(A)  sales and exchanges on or after  January 17, 1995 , and \n \n “(B)  sales and exchanges before such date if the FCC tax certificate with respect to such sale or exchange is issued on or after such date. \n \n \n “(2)   Binding contracts.— “(A)   In general .— The amendments made by this section shall not apply to any sale or exchange pursuant to a written contract which was binding on  January 16, 1995 , and at all times thereafter before the sale or exchange, if the FCC tax certificate with respect to such sale or exchange was applied for, or issued, on or before such date. \n \n “(B)   Sales contingent on issuance of certificate.— “(i)   In general .— A contract shall be treated as not binding for purposes of subparagraph (A) if the sale or exchange pursuant to such contract, or the material terms of such contract, were contingent, at any time on  January 16, 1995 , on the issuance of an FCC tax certificate. The preceding sentence shall not apply if the FCC tax certificate for such sale or exchange is issued on or before  January 16, 1995 . \n \n “(ii)   Material terms .— For purposes of clause (i), the material terms of a contract shall not be treated as contingent on the issuance of an FCC tax certificate solely because such terms provide that the sales price would, if such certificate were not issued, be increased by an amount not greater than 10 percent of the sales price otherwise provided in the contract. \n \n \n \n “(3)   FCC tax certificate .— For purposes of this subsection, the term ‘FCC tax certificate’ means any certificate of the Federal Communications Commission for the effectuation of section 1071 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [ Apr. 11, 1995 ]).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 1081, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 312 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(132), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1786 , 1834, provided for nonrecognition of gain or loss on exchanges or distributions in obedience to orders of SEC.\nSection 1082, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 315 ;  Pub. L. 91–172, title VII, §\u202f704(b)(3) ,  Dec. 30, 1969 ,  83 Stat. 669 ;  Pub. L. 92–178, title III, §\u202f303(c)(5) ,  Dec. 10, 1971 ,  85 Stat. 522 ;  Pub. L. 94–455, title XIX , §§\u202f1901(b)(11)(C), 1906(b)(13)(A), 1951(c)(2)(B), title XXI, §\u202f2124(a)(3)(C),  Oct. 4, 1976 ,  90 Stat. 1795 , 1834, 1840, 1917;  Pub. L. 97–34, title II, §\u202f212(d)(2)(E) ,  Aug. 13, 1981 ,  95 Stat. 239 ;  Pub. L. 99–514, title II, §\u202f242(b)(1) ,  Oct. 22, 1986 ,  100 Stat. 2181 ;  Pub. L. 101–508, title XI, §\u202f11801(c)(6)(D) ,  Nov. 5, 1990 ,  104 Stat. 1388–524 , related to basis for determining gain or loss.\nSection 1083, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 317 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(133) ,  Oct. 4, 1976 ,  90 Stat. 1786 , related to definitions for this part.\nRepeal effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79  et seq.) before that Act’s repeal, see  section 402(m) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'WASH SALES; STRADDLES'},
  'content': 'In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term “stock or securities” shall, except as provided in regulations, include contracts or options to acquire or sell stock or securities.\nIf the amount of stock or securities acquired (or covered by the contract or option to acquire) is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the loss from the sale or other disposition of which is not deductible shall be determined under regulations prescribed by the Secretary.\nIf the amount of stock or securities acquired (or covered by the contract or option to acquire) is not less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility of the loss shall be determined under regulations prescribed by the Secretary.\nIf the property consists of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under this section or corresponding provisions of prior internal revenue laws) of the loss from the sale or other disposition of substantially identical stock or securities, then the basis shall be the basis of the stock or securities so sold or disposed of, increased or decreased, as the case may be, by the difference, if any, between the price at which the property was acquired and the price at which such substantially identical stock or securities were sold or otherwise disposed of.\nThis section shall not fail to apply to a contract or option to acquire or sell stock or securities solely by reason of the fact that the contract or option settles in (or could be settled in) cash or property other than such stock or securities.\n2002—Subsec. (e).  Pub. L. 107–147  substituted “securities and securities futures contracts to sell” for “securities” in heading, inserted “(or the sale, exchange, or termination of a securities futures contract to sell)” after “closing of a short sale of” in introductory provisions and “(or securities futures contracts to sell)” after “short sale of” in par. (2), and inserted concluding provisions.\n2000—Subsec. (f).  Pub. L. 106–554  added subsec. (f).\n1988—Subsec. (a).  Pub. L. 100–647  inserted sentence at end defining “stock or securities”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f106(b) , substituted “no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business” for “no deduction for the loss shall be allowed under section 165(c)(2); nor shall such deduction be allowed a corporation under section 165(a) unless it is a dealer in stocks or securities, and the loss is sustained in a transaction made in the ordinary course of business”.\nSubsec. (e).  Pub. L. 98–369, §\u202f106(a) , added subsec. (e).\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], to which such amendment relates, see  section 412(e) of Pub. L. 107–147 , set out as a note under  section 151 of this title .\nPub. L. 100–647, title V, §\u202f5075(b) ,  Nov. 10, 1988 ,  102 Stat. 3682 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to any sale after the date of enactment of this Act [ Nov. 10, 1988 ], in taxable years ending after such date.”\nPub. L. 98–369, div. A, title I, §\u202f106(c) ,  July 18, 1984 ,  98 Stat. 629 , provided that: \n “(1)   Subsection  (a).— The amendment made by subsection (a) [amending this section] shall apply to short sales of stock or securities after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Subsection  (b).— The amendment made by subsection (b) [amending this section] shall apply to sales after  December 31, 1984 , in taxable years ending after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'WASH SALES; STRADDLES'},
  'content': 'Any loss with respect to 1 or more positions shall be taken into account for any taxable year only to the extent that the amount of such loss exceeds the unrecognized gain (if any) with respect to 1 or more positions which were offsetting positions with respect to 1 or more positions from which the loss arose.\nAny loss which may not be taken into account under subparagraph (A) for any taxable year shall, subject to the limitations under subparagraph (A), be treated as sustained in the succeeding taxable year.\nExcept as otherwise provided by the Secretary, rules similar to the rules of clauses (ii) and (iii) of subparagraph (A) shall apply for purposes of this paragraph with respect to any position which is, or has been, a liability or obligation.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this paragraph. Such regulations or other guidance may specify the proper methods for clearly identifying a straddle as an identified straddle (and for identifying the positions comprising such straddle), the rules for the application of this section to a taxpayer which fails to comply with those identification requirements, the rules for the application of this section to a position which is or has been a liability or obligation, methods of loss allocation which satisfy the requirements of subparagraph (A)(iii), and the ordering rules in cases where a taxpayer disposes (or otherwise ceases to be the holder) of any part of any position which is part of an identified straddle.\nFor purposes of paragraph (2)(A)(ii), the unrecognized gain with respect to any offsetting position shall be the excess of the fair market value of the position at the time of the determination over the fair market value of the position at the time the taxpayer identified the position as a position in an identified straddle.\nThe Secretary shall prescribe such regulations with respect to gain or loss on positions which are a part of a straddle as may be appropriate to carry out the purposes of this section and section 263(g). To the extent consistent with such purposes, such regulations shall include rules applying the principles of subsections (a) and (d) of section 1091 and of subsections (b) and (d) of section 1233.\nIn no event shall more than 50 percent of the net gain from such account for any taxable year be treated as long-term capital gain.\nIn no event shall more than 40 percent of the net loss from such account for any taxable year be treated as short-term capital loss.\nThe regulations prescribed under paragraph (1) may treat as a mixed straddle positions not described in section 1256(d)(4).\nThe regulations prescribed under paragraph (1) shall include regulations relating to the timing and character of gains and losses in case of straddles where at least 1 position is ordinary and at least 1 position is capital.\nThe term “straddle” means offsetting positions with respect to personal property.\nA taxpayer holds offsetting positions with respect to personal property if there is a substantial diminution of the taxpayer’s risk of loss from holding any position with respect to personal property by reason of his holding 1 or more other positions with respect to personal property (whether or not of the same kind).\nIn the case of any position which is not part of an identified straddle (within the meaning of subsection (a)(2)(B)), such position shall not be treated as offsetting with respect to any position which is part of an identified straddle.\nAny presumption established pursuant to subparagraph (A) may be rebutted.\nFor purposes of subparagraph (B), the term “deep-in-the-money option” means an option having a strike price lower than the lowest qualified bench mark.\nExcept as otherwise provided in this subparagraph, for purposes of subparagraph (C), the term “lowest qualified bench mark” means the highest available strike price which is less than the applicable stock price.\nFor purposes of this paragraph, the term “strike price” means the price at which the option is exercisable.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph. Such regulations may include modifications to the provisions of this paragraph which are appropriate to take account of changes in the practices of option exchanges or to prevent the use of options for tax avoidance purposes.\nThe term “personal property” means any personal property of a type which is actively traded.\nThe term “position” means an interest (including a futures or forward contract or option) in personal property.\nFor purposes of determining whether subsection (e) applies to any transaction with respect to stock described in subparagraph (A)(ii), all includible corporations of an affiliated group (within the meaning of section 1504(a)) shall be treated as 1 taxpayer.\nIn determining whether 2 or more positions are offsetting, the taxpayer shall be treated as holding any position held by a related person.\nIf part or all of the gain or loss with respect to a position held by a partnership, trust, or other entity would properly be taken into account for purposes of this chapter by a taxpayer, then, except to the extent otherwise provided in regulations, such position shall be treated as held by the taxpayer.\nIn the case of a straddle at least 1 (but not all) of the positions of which are section 1256 contracts, the provisions of this section shall apply to any section 1256 contract and any other position making up such straddle.\nFor purposes of subsection (a)(2) (relating to identified straddles), subparagraph (A) and section 1256(a)(4) shall not apply to a straddle all of the offsetting positions of which consist of section 1256 contracts.\nThe term “section 1256 contract” has the meaning given such term by section 1256(b).\nFor purposes of paragraph (2), an obligor’s interest in a nonfunctional currency denominated debt obligation is treated as a position in the nonfunctional currency.\nFor purposes of paragraph (1), foreign currency for which there is an active interbank market is presumed to be actively traded.\nThis section shall not apply in the case of any hedging transaction (as defined in section 1256(e)).\nAny loss with respect to such option shall be treated as long-term capital loss if, at the time such loss is realized, gain on the sale or exchange of such stock would be treated as long-term capital gain.\nThe holding period of such stock shall not include any period during which the taxpayer is the grantor of such option.\nFor provision requiring capitalization of certain interest and carrying charges where there is a straddle, see section 263(g).\n2018—Subsec. (a)(2)(B).  Pub. L. 115–141, §\u202f401(a)(170) , substituted “with respect to other” for “with respect other” in concluding provisions.\nSubsec. (c)(4)(E).  Pub. L. 115–141, §\u202f401(a)(171) , struck out “(other than subparagraph (B) thereof)” after “paragraphs (3)” in concluding provisions.\n2007—Subsec. (a)(2)(A)(i).  Pub. L. 110–172, §\u202f7(d)(2)(B)(i) , substituted “positions” for “identified positions”.\nSubsec. (a)(2)(A)(ii).  Pub. L. 110–172, §\u202f7(d)(2)(B)(ii) , (iii), substituted “any position” for “any identified position” and “the offsetting positions” for “the identified offsetting positions”.\nPub. L. 110–172, §\u202f7(d)(1) , struck out “and” at end.\nSubsec. (a)(2)(A)(iii), (iv).  Pub. L. 110–172, §\u202f7(d)(1) , added cl. (iii) and redesignated former cl. (iii) as (iv).\nSubsec. (a)(2)(B).  Pub. L. 110–172, §\u202f7(d)(2)(A) , inserted concluding provisions.\nSubsec. (a)(2)(C), (D).  Pub. L. 110–172, §\u202f7(d)(3) , (4), added subpar. (C), redesignated former subpar. (C) as (D), and inserted “the rules for the application of this section to a position which is or has been a liability or obligation, methods of loss allocation which satisfy the requirements of subparagraph (A)(iii),” before “and the ordering rules” in subpar. (D).\nSubsec. (a)(3)(B).  Pub. L. 110–172, §\u202f7(d)(2)(C) , substituted “offsetting position” for “identified offsetting position”.\n2005—Subsec. (a)(2).  Pub. L. 109–135  added subpar. (C) and struck out concluding provisions of subpar. (B) which read as follows: “The Secretary shall prescribe regulations which specify the proper methods for clearly identifying a straddle as an identified straddle (and the positions comprising such straddle), which specify the rules for the application of this section for a taxpayer which fails to properly identify the positions of an identified straddle, and which specify the ordering rules in cases where a taxpayer disposes of less than an entire position which is part of an identified straddle.”\n2004—Subsec. (a)(2)(A).  Pub. L. 108–357, §\u202f888(a)(1) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “In the case of any straddle which is an identified straddle as of the close of any taxable year—\n“(i) paragraph (1) shall not apply for such taxable year, and\n“(ii) any loss with respect to such straddle shall be treated as sustained not earlier than the day on which all of the positions making up the straddle are disposed of.”\nSubsec. (a)(2)(B).  Pub. L. 108–357, §\u202f888(a)(2)(B) , inserted concluding provisions.\nSubsec. (a)(2)(B)(ii).  Pub. L. 108–357, §\u202f888(a)(2)(A) , added cl. (ii) and struck out former cl. (ii) which read as follows: “all of the original positions of which (as identified by the taxpayer) are acquired on the same day and with respect to which—\n“(I) all of such positions are disposed of on the same day during the taxable year, or\n“(II) none of such positions has been disposed of as of the close of the taxable year, and”.\nSubsec. (a)(3)(B), (C).  Pub. L. 108–357, §\u202f888(a)(3) , added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (c)(2)(B), (C).  Pub. L. 108–357, §\u202f888(a)(4) , redesignated subpar. (C) as (B) and struck out heading and text of former subpar. (B). Text read as follows: “If 1 or more positions offset only a portion of 1 or more other positions, the Secretary shall by regulations prescribe the method for determining the portion of such other positions which is to be taken into account for purposes of this section.”\nSubsec. (d)(3).  Pub. L. 108–357, §\u202f888(c)(1) , reenacted heading without change and amended text of par. (3) generally, substituting provisions directing that the term “personal property” includes stock only if it is of a certain type or of a certain type of corporation and setting forth rule for application of subsec. (e), for provisions directing that the term “personal property” includes any stock which is part of a straddle at least 1 of the offsetting positions of which is an option, a securities futures contract, or a position with respect to substantially similar or related property (other than stock), and of a certain type of corporation, and setting forth special rules relating to application of subsecs. (c), (d)(4), and (e).\nSubsec. (d)(8).  Pub. L. 108–357, §\u202f888(b) , added par. (8).\n2000—Subsec. (d)(3)(B)(i)(II), (III).  Pub. L. 106–554  added subcl. (II) and redesignated former subcl. (II) as (III).\n1999—Subsec. (a)(3)(B)(ii)(II).  Pub. L. 106–170  substituted “1221(a)” for “1221”.\n1997—Subsec. (f)(2).  Pub. L. 105–34  substituted “The” for “Except for purposes of section 851(b)(3), the”.\n1988—Subsec. (b)(2)(D).  Pub. L. 100–647  added subpar. (D).\n1986—Subsec. (c)(4)(E).  Pub. L. 99–514, §\u202f331(a) , in cl. (i), inserted “or the stock is disposed of at a loss”, in cl. (ii), substituted “or gains on such options are” for “is”, and in cl. (iii), inserted “or option” and “or the disposition of such stock”.\nSubsec. (d)(3)(A).  Pub. L. 99–514, §\u202f1808(c) , inserted at end “The preceding sentence shall not apply to any interest in stock.”\nSubsec. (d)(5), (6).  Pub. L. 99–514, §\u202f1899A(66) , amended directory language of  section 101(b)(2) of Pub. L. 98–369  to clarify general amendment by sections 101(d) and 102(e) of  Pub. L. 98–369 . See 1984 Amendment notes below.\nSubsec. (d)(7).  Pub. L. 99–514, §\u202f1261(b) , added par. (7).\n1984—Subsec. (a)(2)(B)(i).  Pub. L. 98–369, §\u202f107(a) , designated existing provisions as subcl. (I) and added subcl. (II).\nSubsec. (b).  Pub. L. 98–369, §\u202f103(a) , amended subsec. (b) generally, substituting provisions dealing with regulations for provisions dealing with character of gain or loss and wash sales.\nSubsec. (c)(4).  Pub. L. 98–369, §\u202f101(a)(2) , added par. (4).\nSubsec. (d)(1).  Pub. L. 98–369, §\u202f101(b)(1) , struck out “(other than stock)” before “of a type”.\nSubsec. (d)(2).  Pub. L. 98–369, §\u202f101(a)(1) , redesignated former subpar. (A) as entire par. (2), and struck out former subpar. (B) which provided that “position” includes any stock option which is a part of a straddle and which is an option to buy or sell stock which is actively traded, but does not include a stock option which (i) is traded on a domestic exchange or on a similar foreign exchange designated by the Secretary, and (ii) is of a type with respect to which the maximum period during which such option may be exercised is less than the minimum period for which a capital asset must be held for gain to be treated as long-term capital gain under section 1222(3).\nSubsec. (d)(3), (4).  Pub. L. 98–369, §\u202f101(b)(2) , as amended by  Pub. L. 99–514, §\u202f1899A(66) , added par. (3) and redesignated former pars. (3) and (4) as (4) and (5), respectively.\nSubsec. (d)(5).  Pub. L. 98–369, §\u202f101(d) , amended par. (4) generally, substituting provisions relating to special rules for section 1256 contracts for provisions relating to special rules for regulated futures contracts.\nPub. L. 98–369, §\u202f101(b)(2) , as amended by  Pub. L. 99–514, §\u202f1899A(66) , redesignated former par. (4) as (5). Former par. (5) redesignated (6).\nSubsec. (d)(6).  Pub. L. 98–369, §\u202f102(e)(2) , amended par. (5) generally, substituting references to section 1256 contracts for references to regulated futures contracts wherever appearing in heading and text.\nPub. L. 98–369, §\u202f101(b)(2) , as amended by  Pub. L. 99–514, §\u202f1899A(66) , redesignated former par. (5) as (6).\nSubsecs. (f), (g).  Pub. L. 98–369, §\u202f101(c) , added subsec. (f) and redesignated former subsec. (f) as (g).\n1983—Subsec. (a)(1)(A).  Pub. L. 97–448, §\u202f105(a)(1)(A) , (2), substituted “unrecognized gain” for “unrealized gain” and “which were offsetting positions with respect to 1 or more positions from which the loss arose” for “which— (i) were acquired by the taxpayer before the disposition giving rise to such loss, (ii) were offsetting positions with respect to the 1 or more positions from which the loss arose, and (iii) were not part of an identified straddle as of the close of the taxable year”.\nSubsec. (a)(3).  Pub. L. 97–448, §\u202f105(a)(1)(B) , substituted “Unrecognized gain” for “Unrealized gain” in heading.\nSubsec. (a)(3)(A).  Pub. L. 97–448, §\u202f105(a)(1)(B) , substituted “unrecognized gain” for “unrealized gain” as term defined, designated existing definition as cl. (i), and added cl. (ii).\nSubsec. (a)(3)(B)(i)(I).  Pub. L. 97–448, §\u202f105(a)(1)(C) , substituted “with respect to which, as of the close of the taxable year, there is unrecognized gain, and” for “which is held by such taxpayer as of the close of the taxable year and with respect to which there is unrealized gain, and”.\nSubsec. (a)(3)(B)(i)(II).  Pub. L. 97–448, §\u202f105(a)(1)(C) , substituted “unrecognized gain” for “unrealized gain”.\nSubsec. (c)(2)(C).  Pub. L. 97–448, §\u202f105(a)(4) , substituted “subsection (a)(2)(B)” for “subsection (a)(3)(B)”.\nSubsec. (d)(4).  Pub. L. 97–448, §\u202f105(a)(3) , substituted “a straddle at least 1 (but not all) of the positions of which are regulated futures contracts, the provisions of this section shall apply” for “a straddle— (A) at lease 1 (but not all) of the positions of which are regulated futures contracts, and (B) with respect to which the taxpayer has elected not to have the provisions of section 1256 apply, the provisions of this section shall apply”.\nPub. L. 110–172, §\u202f7(e) ,  Dec. 29, 2007 ,  121 Stat. 2483 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 45, 45H, 179B, 280C, 470, 1016, and 6501 of this title] shall take effect as if included in the provisions of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ] to which they relate. \n \n “(2)   Identification requirement of amendment related to section 888 of the american jobs creation act of 2004 .— The amendment made by subsection (d)(2)(A) [amending this section] shall apply to straddles acquired after the date of the enactment of this Act [ Dec. 29, 2007 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 108–357  applicable to positions established on or after  Oct. 22, 2004 , see  section 888(e) of Pub. L. 108–357 , set out as a note under  section 246 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning after  Aug. 5, 1997 , see  section 1271(c) of Pub. L. 105–34 , set out as a note under  section 817 of this title .\nAmendment by  Pub. L. 100–647  applicable with respect to forward contracts, future contracts, options, and similar instruments entered into or acquired after  Oct. 21, 1988 , see  section 6130(d)(1) of Pub. L. 100–647 , set out as a note under  section 988 of this title .\nPub. L. 99–514, title III, §\u202f331(b) ,  Oct. 22, 1986 ,  100 Stat. 2221 , provided that:  “The amendments made by this section [amending this section] shall apply to positions established on or after  January 1, 1987 .”\nAmendment by  section 1261(b) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1261(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 985 of this title .\nAmendment by  section 1808(c) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f101(e) ,  July 18, 1984 ,  98 Stat. 619 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to positions established after  December 31, 1983 , in taxable years ending after such date. \n \n “(2)   Special rule for offsetting position stock .— In the case of any stock of a corporation formed or availed of to take positions in personal property which offset positions taken by any shareholder, the amendments made by this section shall apply to positions established on or after  May 23, 1983 , in taxable years ending on or after such date. \n \n “(3)   Subsection  (c).— The amendment made by subsection (c) [amending this section] shall apply to positions established after  June 30, 1984 , in taxable years ending after such date. \n \n “(4)   Subsection  (d).— The amendment made by subsection (d) [amending this section] shall apply to positions established after the date of the enactment of this Act in taxable years ending after such date.”\nAmendment by  section 102(e)(2) of Pub. L. 98–369  applicable to positions established after  July 18, 1984 , in taxable years ending after that date, except as otherwise provided, see section 102(f), (g) of  Pub. L. 98–369 , set out as a note under  section 1256 of this title .\nPub. L. 98–369, div. A, title I, §\u202f103(b) , (c),  July 18, 1984 ,  98 Stat. 628 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(b)   Requirement That Regulations Be Issued Within  6  Months After the Date of Enactment .— The Secretary of the Treasury or his delegate shall prescribe initial regulations under section 1092(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (including regulations relating to mixed straddles) not later than the date 6 months after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(c)   Effective Date of Regulations With Respect to Mixed Straddles .— The regulations described in subsection (b) with respect to the application of section 1233 of the Internal Revenue Code of 1986 to mixed straddles shall not apply to mixed straddles all of the positions of which were established before  January 1, 1984 .”\nPub. L. 98–369, div. A, title I, §\u202f107(e) ,  July 18, 1984 ,  98 Stat. 630 , provided that:  “The amendments made by this section [amending this section and sections 1236 and 1256 of this title] shall apply to positions entered into after the date of the enactment of this Act [ July 18, 1984 ], in taxable years ending after such date.”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title V, §\u202f508 ,  Aug. 13, 1981 ,  95 Stat. 333 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— Except as otherwise provided in this section, the amendments made by this title [enacting this section and sections 1234A and 1256 of this title, amending sections 263, 341, 1212, 1221, 1231, 1232, 1233, 1236, and 6653 of this title, and enacting provisions set out as a note under  section 1256 of this title ] shall apply to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date. \n \n “(b)   Identification Requirements.— “(1)   Under section 1236 of code.— The amendments made by section 506 [amending  section 1236 of this title ] shall apply to property acquired by the taxpayer after the date of the enactment of this Act [ Aug. 13, 1981 ] in taxable years ending after such date. \n \n “(2)   Under section 1256 (e)(2) (c) of code.— Section 1256(e)(2)(C) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this title) shall apply to property acquired and positions established by the taxpayer after  December 31, 1981 , in taxable years ending after such date. \n \n \n “(c)   Election With Respect to Property Held on June  23, 1981.— If the taxpayer so elects (at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe) with respect to all regulated futures contracts or positions held by the taxpayer on  June 23, 1981 , the amendments made by this title shall apply to all such contracts and positions, effective for periods after such date in taxable years ending after such date. For purposes of the preceding sentence, the term ‘regulated futures contract’ has the meaning given to such term by section 1256(b) of the Internal Revenue Code of 1986, and the term ‘position’ has the meaning given to such term by section 1092(d)(2) of such Code.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 98–369, div. A, title I, §\u202f108 ,  July 18, 1984 ,  98 Stat. 630 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1808(d),  Oct. 22, 1986 ,  100 Stat. 2095 , 2817, provided that: \n “(a)   General Rule .— For purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], in the case of any disposition of 1 or more positions— “(1)  which were entered into before 1982 and form part of a straddle, and \n \n “(2)  to which the amendments made by title V of the Economic Recovery Tax Act of 1981 [ Pub. L. 97–34 , see Effective Date note above] do not apply, \n \n\n any loss from such disposition shall be allowed for the taxable year of the disposition if such loss is incurred in a trade or business, or if such loss is incurred in a transaction entered into for profit though not connected with a trade or business. \n \n “(b)   Loss Incurred in a Trade or Business .— For purposes of subsection (a), any loss incurred by a commodities dealer in the trading of commodities shall be treated as a loss incurred in a trade or business. \n \n “(c)   Net Loss Allowed .— If any loss with respect to a position described in paragraphs (1) and (2) of subsection (a) is not allowable as a deduction (after applying subsections (a) and (b)), such loss shall be allowed in determining the gain or loss from dispositions of other positions in the straddle to the extent required to accurately reflect the taxpayer’s net gain or loss from all positions in such straddle. \n \n “(d)   Other Rules .— Except as otherwise provided in subsections (a) and (c) and in sections 1233 and 1234 of such Code, the determination of whether there is recognized gain or loss with respect to a position, and the amount and timing of such gain or loss, and the treatment of such gain or loss as long-term or short-term shall be made without regard to whether such position constitutes part of a straddle. \n \n “(e)   Straddle .— For purposes of this section, the term ‘straddle’ has the meaning given to such term by section 1092(c) of the Internal Revenue Code of 1986 as in effect on the day after the date of the enactment of the Economic Recovery Tax Act of 1981 [ Aug. 13, 1981 ], and shall include a straddle all the positions of which are regulated futures contracts. \n \n “(f)   Commodities Dealer .— For purposes of this section, the term ‘commodities dealer’ means any taxpayer who— “(1)  at any time before  January 1, 1982 , was an individual described in section 1402(i)(2)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this subtitle), or \n \n “(2)  was a member of the family (within the meaning of section 704(e)(3) [now 704(e)(2)] of such Code) of an individual described in paragraph (1) to the extent such member engaged in commodities trading through an organization the members of which consisted solely of— “(A)  1 or more individuals described in paragraph (1), and \n \n “(B)  1 or more members of the families (as so defined) of such individuals. \n \n \n \n “(g)   Regulated Futures Contracts .— For purposes of this section, the term ‘regulated futures contracts’ has the meaning given to such term by section 1256(b) of the Internal Revenue Code of 1986 (as in effect before the date of enactment of this Act [ July 18, 1984 ]). \n \n “(h)   Syndicates .— For purposes of this section, any loss incurred by a person (other than a commodities dealer) with respect to an interest in a syndicate (within the meaning of section 1256(e)(3)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) shall not be considered to be a loss incurred in a trade or business.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 1101, added  May 9, 1956, ch. 240, §\u202f10(a) ,  70 Stat. 139 ; amended  Oct. 2, 1976 ,  Pub. L. 94–452, §\u202f2(a) ,  90 Stat. 1503 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  90 Stat. 1834 ;  Oct. 19, 1982 ,  Pub. L. 97–354, §\u202f5(a)(34) ,  96 Stat. 1695 , related to distributions of property pursuant to Bank Holding Company Act.\nSection 1102, added  May 9, 1956, ch. 240, §\u202f10(a) ,  70 Stat. 143 ; amended  Dec. 27, 1967 ,  Pub. L. 90–225, §\u202f1 ,  81 Stat. 730 ;  Oct. 2, 1976 ,  Pub. L. 94–452, §\u202f2(a) ,  90 Stat. 1508 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  90 Stat. 1834 , related to basis of property acquired in distributions, periods of limitation, allocation of earnings and profits, and itemization of property.\nSection 1103, added  May 9, 1956, ch. 240, §\u202f10(a) ,  70 Stat. 144 ; amended  Oct. 2, 1976 ,  Pub. L. 94–452, §\u202f2(a) ,  90 Stat. 1509 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  90 Stat. 1834 , related to definitions for this part.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, added  Pub. L. 87–403, §\u202f1(a) ,  Feb. 2, 1962 ,  76 Stat. 4 , related to distribution of stock pursuant to order enforcing antitrust laws.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CAPITAL GAINS'},
  'content': 'Section,  Aug. 16, 1954, ch. 736 ,  68A Stat. 320 ;  Mar. 13, 1956, ch. 83, §\u202f5(7) ,  70 Stat. 49 ;  Pub. L. 86–69, §\u202f3(f)(2) ,  June 25, 1959 ,  73 Stat. 140 ;  Pub. L. 87–834, §\u202f8(g)(3) ,  Oct. 16, 1962 ,  76 Stat. 999 ;  Pub. L. 91–172, title V, §\u202f511(b) ,  Dec. 30, 1969 ,  83 Stat. 635 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(135) , (b)(33)(L),  Oct. 4, 1976 ,  90 Stat. 1786 , 1801;  Pub. L. 95–600, title IV , §§\u202f401(a), 403(a), (b),  Nov. 6, 1978 ,  92 Stat. 2866 , 2868;  Pub. L. 96–222, title I, §\u202f104(a)(2)(B) , (3)(A),  Apr. 1, 1980 ,  94 Stat. 214 , 215;  Pub. L. 98–369, div. A, title II, §\u202f211(b)(16) ,  July 18, 1984 ,  98 Stat. 756 ;  Pub. L. 99–514, title III, §\u202f311(a) , title X, §\u202f1024(c)(14),  Oct. 22, 1986 ,  100 Stat. 2219 , 2408;  Pub. L. 100–647, title I, §\u202f1003(c)(1) , title II, §\u202f2004( l ),  Nov. 10, 1988 ,  102 Stat. 3384 , 3606;  Pub. L. 103–66, title XIII, §\u202f13221(c)(2) ,  Aug. 10, 1993 ,  107 Stat. 477 ;  Pub. L. 104–188, title I, §\u202f1703(f) ,  Aug. 20, 1996 ,  110 Stat. 1876 ;  Pub. L. 105–34, title III, §\u202f314(a) ,  Aug. 5, 1997 ,  111 Stat. 842 ;  Pub. L. 110–234, title XV, §\u202f15311(a) ,  May 22, 2008 ,  122 Stat. 1502 ;  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15311(a),  June 18, 2008 ,  122 Stat. 1664 , 2264;  Pub. L. 114–113, div. Q, title III, §\u202f334(a) ,  Dec. 18, 2015 ,  129 Stat. 3108 , related to alternative tax for corporations.\nRepeal applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 11 of this title .\nPub. L. 115–123, div. D, title I, §\u202f40310 ,  Feb. 9, 2018 ,  132 Stat. 147 , provided that:  “For purposes of applying section 1201(b) of the Internal Revenue Code of 1986 with respect to taxable years beginning during 2017, such section shall be applied by substituting ‘2016 or 2017’ for ‘2016’.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CAPITAL GAINS'},
  'content': 'In the case of a taxpayer other than a corporation, gross income shall not include 50 percent of any gain from the sale or exchange of qualified small business stock held for more than 5 years.\nIn the case of qualified small business stock acquired after the date of the enactment of this paragraph in a corporation which is a qualified business entity (as defined in section 1397C(b)) during substantially all of the taxpayer’s holding period for such stock, paragraph (1) shall be applied by substituting “60 percent” for “50 percent”.\nRules similar to the rules of paragraphs (5) and (7) of section 1400B(b) (as in effect before its repeal) shall apply for purposes of this paragraph.\nSubparagraph (A) shall not apply to gain attributable to periods after  December 31, 2018 .\nThe District of Columbia Enterprise Zone shall not be treated as an empowerment zone for purposes of this paragraph.\nFor purposes of this subsection, the term “eligible gain” means any gain from the sale or exchange of qualified small business stock held for more than 5 years.\nIn the case of a separate return by a married individual, paragraph (1)(A) shall be applied by substituting “$5,000,000” for “$10,000,000”.\nIn the case of any joint return, the amount of gain taken into account under subsection (a) shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years.\nFor purposes of this subsection, marital status shall be determined under section 7703.\nStock in a corporation shall not be treated as qualified small business stock unless, during substantially all of the taxpayer’s holding period for such stock, such corporation meets the active business requirements of subsection (e) and such corporation is a C corporation.\nNotwithstanding any provision of subsection (e), a corporation shall be treated as meeting the active business requirements of such subsection for any period during which such corporation qualifies as a specialized small business investment company.\nFor purposes of clause (i), the term “specialized small business investment company” means any eligible corporation (as defined in subsection (e)(4)) which is licensed to operate under section 301(d) of the Small Business Investment Act of 1958 (as in effect on  May 13, 1993 ).\nStock acquired by the taxpayer shall not be treated as qualified small business stock if, at any time during the 4-year period beginning on the date 2 years before the issuance of such stock, the corporation issuing such stock purchased (directly or indirectly) any of its stock from the taxpayer or from a person related (within the meaning of section 267(b) or 707(b)) to the taxpayer.\nStock issued by a corporation shall not be treated as qualified business stock if, during the 2-year period beginning on the date 1 year before the issuance of such stock, such corporation made 1 or more purchases of its stock with an aggregate value (as of the time of the respective purchases) exceeding 5 percent of the aggregate value of all of its stock as of the beginning of such 2-year period.\nIf any transaction is treated under section 304(a) as a distribution in redemption of the stock of any corporation, for purposes of subparagraphs (A) and (B), such corporation shall be treated as purchasing an amount of its stock equal to the amount treated as such a distribution under section 304(a).\nFor purposes of paragraph (1), the term “aggregate gross assets” means the amount of cash and the aggregate adjusted bases of other property held by the corporation.\nFor purposes of subparagraph (A), the adjusted basis of any property contributed to the corporation (or other property with a basis determined in whole or in part by reference to the adjusted basis of property so contributed) shall be determined as if the basis of the property contributed to the corporation (immediately after such contribution) were equal to its fair market value as of the time of such contribution.\nAll corporations which are members of the same parent-subsidiary controlled group shall be treated as 1 corporation for purposes of this subsection.\nFor purposes of this subsection, stock and debt in any subsidiary corporation shall be disregarded and the parent corporation shall be deemed to own its ratable share of the subsidiary’s assets, and to conduct its ratable share of the subsidiary’s activities.\nA corporation shall be treated as failing to meet the requirements of paragraph (1) for any period during which more than 10 percent of the value of its assets (in excess of liabilities) consists of stock or securities in other corporations which are not subsidiaries of such corporation (other than assets described in paragraph (6)).\nFor purposes of this paragraph, a corporation shall be considered a subsidiary if the parent owns more than 50 percent of the combined voting power of all classes of stock entitled to vote, or more than 50 percent in value of all outstanding stock, of such corporation.\nA corporation shall not be treated as meeting the requirements of paragraph (1) for any period during which more than 10 percent of the total value of its assets consists of real property which is not used in the active conduct of a qualified trade or business. For purposes of the preceding sentence, the ownership of, dealing in, or renting of real property shall not be treated as the active conduct of a qualified trade or business.\nFor purposes of paragraph (1), rights to computer software which produces active business computer software royalties (within the meaning of section 543(d)(1)) shall be treated as an asset used in the active conduct of a trade or business.\nParagraph (1) shall not apply to any amount to the extent such amount exceeds the amount to which paragraph (1) would have applied if such amount were determined by reference to the interest the taxpayer held in the pass-thru entity on the date the qualified small business stock was acquired.\nRules similar to the rules of section 1244(d)(2) shall apply for purposes of this section.\nIn the case of a transaction described in section 351 or a reorganization described in section 368, if qualified small business stock is exchanged for other stock which would not qualify as qualified small business stock but for this subparagraph, such other stock shall be treated as qualified small business stock acquired on the date on which the exchanged stock was acquired.\nThis section shall apply to gain from the sale or exchange of stock treated as qualified small business stock by reason of subparagraph (A) only to the extent of the gain which would have been recognized at the time of the transfer described in subparagraph (A) if section 351 or 368 had not applied at such time. The preceding sentence shall not apply if the stock which is treated as qualified small business stock by reason of subparagraph (A) is issued by a corporation which (as of the time of the transfer described in subparagraph (A)) is a qualified small business.\nFor purposes of this paragraph, stock treated as qualified small business stock under subparagraph (A) shall be so treated for subsequent transactions or reorganizations, except that the limitation of subparagraph (B) shall be applied as of the time of the first transfer to which such limitation applied (determined after the application of the second sentence of subparagraph (B)).\nIn the case of a transaction described in section 351, this paragraph shall apply only if, immediately after the transaction, the corporation issuing the stock owns directly or indirectly stock representing control (within the meaning of section 368(c)) of the corporation whose stock was exchanged.\nIf the adjusted basis of any qualified small business stock is adjusted by reason of any contribution to capital after the date on which such stock was originally issued, in determining the amount of the adjustment by reason of such contribution, the basis of the contributed property shall in no event be treated as less than its fair market value on the date of the contribution.\nThe Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section through split-ups, shell corporations, partnerships, or otherwise.\nThe date of the enactment of this paragraph, referred to in subsec. (a)(2)(A), is the date of enactment of  Pub. L. 106–554 , which was approved  Dec. 21, 2000 .\nSection 1400B(b), referred to in subsec. (a)(2)(B), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(4)(A) ,  Mar. 23, 2018 ,  132 Stat. 1209 .\nThe date of the enactment of this paragraph, referred to in subsec. (a)(3), is the date of enactment of  Pub. L. 111–5 , which was approved  Feb. 17, 2009 .\nThe date of the enactment of the Creating Small Business Jobs Act of 2010, referred to in subsec. (a)(3), (4), is the date of enactment of  Pub. L. 111–240 , which was approved  Sept. 27, 2010 .\nThe date of the enactment of the Revenue Reconciliation Act of 1993, referred to in subsecs. (c)(1) and (d)(1)(A), is the date of enactment of  Pub. L. 103–66 , which was approved  Aug. 10, 1993 .\nSection 301(d) of the Small Business Investment Act of 1958, referred to in subsec. (c)(2)(B)(ii), was classified to  section 681(d) of Title 15 , Commerce and Trade, prior to repeal by  Pub. L. 104–208, div. D, title II, §\u202f208(b)(3)(A) ,  Sept. 30, 1996 ,  110 Stat. 3009–742 .\nA prior section 1202, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 320 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1901(b)(33)(M) ,  90 Stat. 1802 ;  Nov. 6, 1978 ,  Pub. L. 95–600, title IV, §\u202f402(a) ,  92 Stat. 2867 ;  Apr. 1, 1980 ,  Pub. L. 96–222, title I, §\u202f104(a)(2)(A) ,  94 Stat. 214 , authorized deduction for capital gains, prior to repeal by  Pub. L. 99–514, title III, §\u202f301(a) , (c),  Oct. 22, 1986 ,  100 Stat. 2216 , 2218, applicable to taxable years beginning after  Dec. 31, 1986 .\n2018—Subsec. (a)(2)(B).  Pub. L. 115–141, §\u202f401(d)(4)(B)(v) , inserted “(as in effect before its repeal)” after “1400B(b)”.\nSubsec. (e)(4)(B) to (D).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xv) , redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: “a corporation with respect to which an election under section 936 is in effect or which has a direct or indirect subsidiary with respect to which such an election is in effect,”.\n2015—Subsec. (a)(4).  Pub. L. 114–113  substituted “and thereafter” for “,\u20002011, 2012, 2013, and 2014” in heading and struck out “and before  January 1, 2015 ” after “of the Creating Small Business Jobs Act of 2010” in introductory provisions.\n2014—Subsec. (a)(4).  Pub. L. 113–295  substituted “2013, and 2014” for “and 2013” in heading and “ January 1, 2015 ” for “ January 1, 2014 ” in introductory provisions.\n2013—Subsec. (a)(2)(C).  Pub. L. 112–240, §\u202f327(b) , substituted “2018” for “2016” in heading and “ December 31, 2018 ” for “ December 31, 2016 ” in text.\nSubsec. (a)(3).  Pub. L. 112–240, §\u202f324(b)(1) , inserted concluding provisions.\nSubsec. (a)(4).  Pub. L. 112–240, §\u202f324(b)(2) , inserted concluding provisions.\nPub. L. 112–240, §\u202f324(a) , substituted “,\u20002011, 2012, and 2013” for “and 2011” in heading and “ January 1, 2014 ” for “ January 1, 2012 ” in introductory provisions.\n2010—Subsec. (a)(2)(C).  Pub. L. 111–312, §\u202f753(b) , substituted “2016” for “2014” in heading and “ December 31, 2016 ” for “ December 31, 2014 ” in text.\nSubsec. (a)(3).  Pub. L. 111–240, §\u202f2011(b) , inserted “certain periods in” before “2010” in heading and substituted “on or before the date of the enactment of the Creating Small Business Jobs Act of 2010” for “before  January 1, 2011 ” in text.\nSubsec. (a)(4).  Pub. L. 111–312, §\u202f760(a) , inserted “and 2011” after “2010” in heading and substituted “ January 1, 2012 ” for “ January 1, 2011 ” in introductory provisions.\nPub. L. 111–240, §\u202f2011(a) , added par. (4).\n2009—Subsec. (a)(3).  Pub. L. 111–5  added par. (3).\n2004—Subsec. (e)(4)(C).  Pub. L. 108–357  substituted “or REMIC” for “REMIC, or FASIT”.\n2000— Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f117(b)(2)] , substituted “Partial” for “50-percent” in section catchline.\nSubsec. (a).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f117(a)] , amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “In the case of a taxpayer other than a corporation, gross income shall not include 50 percent of any gain from the sale or exchange of qualified small business stock held for more than 5 years.”\n1996—Subsec. (e)(4)(C).  Pub. L. 104–188  substituted “REMIC, or FASIT” for “or REMIC”.\nPub. L. 114–113, div. Q, title I, §\u202f126(b) ,  Dec. 18, 2015 ,  129 Stat. 3054 , provided that:  “The amendments made by this section [amending this section] shall apply to stock acquired after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f136(b) ,  Dec. 19, 2014 ,  128 Stat. 4019 , provided that:  “The amendments made by this section [amending this section] shall apply to stock acquired after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f324(c) ,  Jan. 2, 2013 ,  126 Stat. 2333 , provided that: \n “(1)   In general .— The amendments made by subsection (a) [amending this section] shall apply to stock acquired after  December 31, 2011 . \n \n “(2)   Subsection (b)(1) .— The amendment made by subsection (b)(1) [amending this section] shall take effect as if included in section 1241(a) of division B of the American Recovery and Reinvestment Act of 2009 [ Pub. L. 111–5 ]. \n \n “(3)   Subsection (b)(2) .— The amendment made by subsection (b)(2) [amending this section] shall take effect as if included in section 2011(a) of the Creating Small Business Jobs Act of 2010 [title II of  Pub. L. 111–240 ].”\nPub. L. 112–240, title III, §\u202f327(d) ,  Jan. 2, 2013 ,  126 Stat. 2334 , provided that:  “The amendments made by this section [amending this section and  section 1391 of this title ] shall apply to periods after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f753(d) ,  Dec. 17, 2010 ,  124 Stat. 3321 , provided that:  “The amendments made by this section [amending this section and  section 1391 of this title ] shall apply to periods after  December 31, 2009 .”\nPub. L. 111–312, title VII, §\u202f760(b) ,  Dec. 17, 2010 ,  124 Stat. 3323 , provided that:  “The amendments made by this section [amending this section] shall apply to stock acquired after  December 31, 2010 .”\nPub. L. 111–240, title II, §\u202f2011(c) ,  Sept. 27, 2010 ,  124 Stat. 2554 , provided that:  “The amendments made by this section [amending this section] shall apply to stock acquired after the date of the enactment of this Act [ Sept. 27, 2010 ].”\nPub. L. 111–5, div. B, title I, §\u202f1241(b) ,  Feb. 17, 2009 ,  123 Stat. 342 , provided that:  “The amendment made by this section [amending this section] shall apply to stock acquired after the date of the enactment of this Act [ Feb. 17, 2009 ].”\nAmendment by  Pub. L. 108–357  effective  Jan. 1, 2005 , with exception for any FASIT in existence on  Oct. 22, 2004 , to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance, see  section 835(c) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 106–554  applicable to stock acquired after  Dec. 21, 2000 , see section 1(a)(7) [title I, §\u202f117(c)] of  Pub. L. 106–554 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 104–188  effective  Sept. 1, 1997 , see  section 1621(d) of Pub. L. 104–188 , set out as a note under  section 26 of this title .\nSection applicable to stock issued after  Aug. 10, 1993 , see  section 13113(e) of Pub. L. 103–66 , set out as an Effective Date of 1993 Amendment note under  section 53 of this title .\nAmendment by  section 401(d)(4)(B)(v) of Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 96–222, title I, §\u202f104(a)(2)(C) ,  Apr. 1, 1980 ,  94 Stat. 215 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(i)   In general .— In applying sections [former] 1201(c)(2)(A)(ii) and 1202(c)(1)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to any pass-through entity, the determination of the period for which gain or loss is properly taken into account shall be made at the entity level. \n \n “(ii)   Pass-through entity defined .— For purposes of clause (i), the term ‘pass-through entity’ means— “(I)  a regulated investment company, \n \n “(II)  a real estate investment trust, \n \n “(III)  an electing small business corporation, \n \n “(IV)  a partnership, \n \n “(V)  an estate or trust, and \n \n “(VI)  a common trust fund.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CAPITAL LOSSES'},
  'content': 'In the case of a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of gains from such sales or exchanges.\n1986—Subsec. (b).  Pub. L. 99–514  amended subsec. (b) generally, substituting present provisions for provisions which had declared in: par. (1), general rule for limitation on capital losses for taxpayer other than corporation; in par. (2), meaning of term “applicable amount”; and in par. (3), rule relating to computation of taxable income.\n1977—Subsec. (b)(1)(A).  Pub. L. 95–30  inserted “reduced (but not below zero) by the zero bracket amount” after “taxable year”.\n1976—Subsec. (b)(1)(B).  Pub. L. 94–455, §\u202f1401(a) , substituted “the applicable amount” for “$1,000”.\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1401(b) , substituted provision relating to “applicable amount” for prior provision limiting amount of capital losses for married individuals and reading “In the case of a husband or wife who files a separate return, the amount specified in paragraph (1)(B) shall be $500 in lieu of $1,000.”\nSubsec. (b)(3).  Pub. L. 94–455, §\u202f501(b)(6) , struck out last sentence “If the taxpayer elects to pay the optional tax imposed by section 3, ‘taxable income’ as used in this subsection shall read as ‘adjusted gross income’.”\n1969—Subsec. (b).  Pub. L. 91–172  provided for only 50 percent of an individual’s long-term capital losses to be offset against his ordinary income up to the $1,000 limit although short-term capital losses continue to be fully deductible within the $1,000 limit and the deduction of capital losses against ordinary income for married persons filing separate returns to be limited to $500 for each spouse rather than the $1,000 formerly allowed.\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  Pub. L. 95–30  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 106(a) of Pub. L. 95–30 , set out as a note under  section 1 of this title .\nAmendment by  section 501(b)(6) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 508 of Pub. L. 94–455 , set out as a note under  section 3 of this title .\nPub. L. 94–455, title XIV, §\u202f1401(c) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 1976 .”\nPub. L. 91–172, title V, §\u202f513(d) ,  Dec. 30, 1969 ,  83 Stat. 643 , provided that:  “The amendments made by this section [amending this section and sections 1212 and 1222 of this title] shall apply to taxable years beginning after  December 31, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CAPITAL LOSSES'},
  'content': 'For purposes of paragraph (1), the portion of any net capital loss for any taxable year attributable to a foreign expropriation capital loss is the amount of the foreign expropriation capital loss for such year (but not in excess of the net capital loss for such year).\nFor purposes of paragraph (1), if a portion of a net capital loss for any taxable year is attributable to a foreign expropriation capital loss, such portion shall be considered to be a separate net capital loss for such year to be applied after the other portion of such net capital loss.\nClauses (ii) and (iii) of subparagraph (A) shall be applied without regard to any amount treated as a short-term capital loss under paragraph (1).\nParagraph (1) shall be applied by substituting “net capital loss for the loss year or any taxable year thereafter (other than a net capital loss to which paragraph (3)(A) applies)” for “net capital loss for the loss year or any taxable year thereafter”.\nThe entire amount of the net section 1256 contracts loss for any taxable year shall be carried to the earliest of the taxable years to which such loss may be carried back under paragraph (1). The portion of such loss which shall be carried to each of the 2 other taxable years to which such loss may be carried back shall be the excess (if any) of such loss over the portion of such loss which, after the application of paragraph (3), was allowed as a carryback for any prior taxable year.\nThe net section 1256 contract gain for any taxable year before the loss year shall be computed without regard to the net section 1256 contracts loss for the loss year or for any taxable year thereafter.\nAny amount carried forward as a short-term or long-term capital loss to any taxable year under subsection (b)(1) (after the application of subparagraph (A)) shall, to the extent attributable to losses from section 1256 contracts, be treated as loss from section 1256 contracts for such taxable year.\nThe term “section 1256 contract” means any section 1256 contract (as defined in section 1256(b)) to which section 1256 applies.\nThis subsection shall not apply to any estate or trust.\n2010—Subsec. (a)(1)(C).  Pub. L. 111–325, §\u202f101(b)(1) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “a capital loss carryover—\n“(i) in the case of a regulated investment company (as defined in section 851) to each of the 8 taxable years succeeding the loss year, and\n“(ii) to the extent such loss is attributable to a foreign expropriation capital loss, to each of the 10 taxable years succeeding the loss year.”\nSubsec. (a)(3), (4).  Pub. L. 111–325, §\u202f101(a) , added par. (3) and redesignated former par. (3) as (4).\n2004—Subsec. (a)(3).  Pub. L. 108–357  reenacted heading without change and amended text of par. (3) generally. Prior to amendment, par. (3) provided that a net capital loss of a corporation would not be carried back under par. (1)(A) to a taxable year for which it was a foreign personal holding company (as defined in section 552), for which it was a regulated investment company (as defined in section 851), for which it was a real estate investment trust (as defined in section 856), or for which an election made by it under section 1247 was applicable (relating to election by foreign investment companies to distribute income currently).\n1988—Subsec. (b)(2).  Pub. L. 100–647  substituted “Treatment of amounts allowed under section 1211(b)(1) or (2)” for “Special rule” as heading and amended text generally. Prior to amendment, text read as follows: “For purposes of determining the excess referred to in subparagraph (A) or (B) of paragraph (1), an amount equal to the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b) shall be treated as a short-term capital gain in such year.”\n1986—Subsec. (b)(2).  Pub. L. 99–514, §\u202f301(b)(11) , amended par. (2) generally. Prior to amendment, par. (2), special rules, read as follows:\n“(A) For purposes of determining the excess referred to in paragraph (1)(A), an amount equal to the amount allowed for the taxable year under section 1211(b)(1)(A), (B), or (C) shall be treated as a short-term capital gain in such year.\n“(B) For purposes of determining the excess referred to in paragraph (1)(B), an amount equal to the sum of—\n“(i) the amount allowed for the taxable year under section 1211(b)(1)(A), (B), or (C), and\n“(ii) the excess of the amount described in clause (i) over the net short-term capital loss (determined without regard to this subsection) for such year,\nshall be treated as a short-term capital gain in such year.”\nSubsec. (c)(6)(B), (7)(A).  Pub. L. 99–514, §\u202f1899A(67) , amended directory language of  Pub. L. 98–369, §\u202f102(e)(3)(C) , resulting in amendment of subsec. (c)(6)(B). See 1984 Amendment note below.\n1984—Subsec. (b)(3).  Pub. L. 98–369, §\u202f1002(a) , struck out par. (3) which read as follows: “In the case of any amount which, under paragraph (1) and section 1211(b) (as in effect for taxable years beginning before  January 1, 1970 ), is treated as a capital loss in the first taxable year beginning after  December 31, 1969 , paragraph (1) and section 1211(b) (as in effect for taxable years beginning before  January 1, 1970 ) shall apply (and paragraph (1) and section 1211(b) as in effect for taxable years beginning after  December 31, 1969 , shall not apply) to the extent such amount exceeds the total of any net capital gains (determined without regard to this subsection) of taxable years beginning after  December 31, 1969 .”\nSubsec. (c).  Pub. L. 98–369, §\u202f102(e)(3)(A) , (B), substituted “net section 1256 contracts loss” for “net commodity futures loss” and “section 1256 contracts” for “regulated futures contracts” wherever appearing.\nSubsec. (c)(3)(A), (5).  Pub. L. 98–369, §\u202f102(e)(3)(D) , substituted “net section 1256 contract gain” for “net commodity futures gain” wherever appearing.\nSubsec. (c)(6)(B), (7)(A).  Pub. L. 98–369, §\u202f102(e)(3)(C) , as amended by  Pub. L. 99–514, §\u202f1899A(67) , substituted “section 1256 contract” for “regulated futures contract” wherever appearing.\n1983—Subsec. (c)(4)(A).  Pub. L. 97–448  struck out “and positions to which section 1256 applies” after “losses from regulated futures contracts”.\n1982—Subsec. (a)(3), (4).  Pub. L. 97–354  struck out par. (3) relating to electing small business corporations, and redesignated par. (4) as (3).\n1981—Subsec. (c).  Pub. L. 97–34  added subsec. (c).\n1978—Subsec. (a)(1)(C)(ii).  Pub. L. 95–600  substituted “succeeding the loss year” for “exceeding the loss year”.\n1976—Subsec. (a)(1).  Pub. L. 94–455 , §§\u202f1403(a), 1901(b)(33)(O), in subpar. (B) inserted introductory text “except as provided in subparagraph (C),” and struck out “(10) taxable years to the extent such loss is attributable to a foreign expropriation capital loss)” after “5 taxable years” and added subpar. (C), and substituted “capital gain net income” for “net capital gains”, “net capital gain” and “net capital gain” in last three sentences, respectively.\n1969— Pub. L. 91–172, §\u202f512(f)(1) , substituted “carrybacks and carryovers” for “carryover” in section catchline.\nSubsec. (a)(1).  Pub. L. 91–172, §\u202f512(a) , provided for a 3-year capital loss carryback for corporations, not available for foreign expropriation capital losses for which a special 10-year carryforward is presently available, in addition to the 5–year capital loss carryforward presently allowed corporations, to the extent the carryback of such loss does not increase or produce a net operating loss for the taxable year to which it is being carried back.\nSubsec. (a)(3), (4).  Pub. L. 91–172, §\u202f512(b) , added pars. (3) and (4).\nSubsec. (b).  Pub. L. 91–172, §\u202f513(b) , struck out reference to  Dec. 31, 1963 , struck out determination of a short-term capital gain as an amount equal to the excess allowed for the taxable year under former section 1211(b) over the gains from sales or exchanges of capital assets, struck out par. (2) treating as a short-term capital loss in the first taxable year beginning after  Dec. 31, 1963 , any amount which is treated as a short-term capital loss in such year under this subchapter as in effect immediately before the enactment of the Revenue Act of 1964, added new par. (2) dealing with special rules for determining the excesses referred to in par. (1)(A) and par. (1)(B) and added par. (3).\n1964—Subsec. (a).  Pub. L. 88–571  provided that if any portion of a net capital loss is attributable to a foreign expropriation capital loss, such portion shall be a short-term capital loss in each of the 10 succeeding taxable years, defined foreign expropriation capital loss, stated what portion of loss is attributable to foreign expropriation capital loss and the priority of application of the net capital loss, and struck out provisions that net capital losses for taxable years beginning before  Oct. 20, 1951 , were to be determined under the applicable law relating to the computation of capital gains and losses in effect before such date.\nPub. L. 88–272  designated existing provisions as subsec. (a), limited such subsection to corporations, and added subsec. (b).\nPub. L. 111–325, title I, §\u202f101(c) ,  Dec. 22, 2010 ,  124 Stat. 3538 , as amended by  Pub. L. 113–295, div. A, title II, §\u202f205(a)(1) ,  Dec. 19, 2014 ,  128 Stat. 4025 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and  section 1222 of this title ] shall apply to net capital losses for taxable years beginning after the date of the enactment of this Act [ Dec. 22, 2010 ]. \n \n “(2)   Coordination rules .— Subparagraph (B) of section 1212(a)(3) of the Internal Revenue Code of 1986, as added by this section, shall apply to taxable years beginning after the date of the enactment of this Act. \n \n “(3)   Excise tax.— “(A)   In general .— Except as provided in subparagraph (B), for purposes of section 4982 of the Internal Revenue Code of 1986, paragraphs (1) and (2) shall apply by substituting ‘the 1-year periods taken into account under subsection (b)(1)(B) of such section with respect to calendar years beginning after  December 31, 2010 ’ for ‘taxable years beginning after the date of the enactment of this Act’. \n \n “(B)   Election .— A regulated investment company may elect to apply subparagraph (A) by substituting ‘2011’ for ‘2010’. Such election shall be made at such time and in such form and manner as the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe.”\nPub. L. 108–357, title IV, §\u202f413(c)(20)(B) ,  Oct. 22, 2004 ,  118 Stat. 1509 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 301(b)(11) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by  section 102(e)(3) of Pub. L. 98–369  applicable to positions established after  July 18, 1984 , in taxable years after that date, except as otherwise provided, see section 102(f), (g) of  Pub. L. 98–369 , set out as a note under  section 1256 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1002(b) ,  July 18, 1984 ,  98 Stat. 1012 , provided that:  “The repeal made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 97–34  applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as an Effective Date note under  section 1092 of this title .\nAmendment by  Pub. L. 95–600  effective  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nPub. L. 94–455, title XIV, §\u202f1403(b) ,  Oct. 4, 1976 ,  90 Stat. 1733 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall apply to loss years (within the meaning of section 1212(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) ending on or after  January 1, 1970 .”\nAmendment by  section 1901(b)(33)(O) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–172, title V, §\u202f512(g) ,  Dec. 30, 1969 ,  83 Stat. 642 , provided that:  “The amendments made by this section [amending this section and sections 246, 381, 481, 535, 1314, 6411, 6501, 6511, 6601, and 6611 of this title] shall apply with respect to net capital losses sustained in taxable years beginning after  December 31, 1969 .”\nAmendment by  section 513(b) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 513(d) of Pub. L. 91–172 , set out as a note under  section 1211 of this title .\nPub. L. 88–571, §\u202f7(b) ,  Sept. 2, 1964 ,  78 Stat. 861 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to net capital losses (to the extent attributable to foreign expropriation capital losses, as defined in section 1212(a)(2)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) sustained in taxable years ending after  December 31, 1958 .”\nPub. L. 88–272, title II, §\u202f230(c) ,  Feb. 26, 1964 ,  78 Stat. 100 , provided that:  “The amendments made by this section [amending this section and  section 1222 of this title ] shall apply to taxable years beginning after  December 31, 1963 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 91–688, §\u202f3 ,  Jan. 12, 1971 ,  84 Stat. 2073 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  For purposes of applying section 1212(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 512 of the Tax Reform Act of 1969) in the case of a corporation which makes an election under subsection (b), any net capital loss sustained in a taxable year beginning after  December 31, 1969 , may not be carried back to any taxable year beginning before  January 1, 1970 , for which it was subject to taxation under section 802 of such Code [ section 802 of this title ], if the carryback of such loss would result in an increase in such corporation’s income tax liability for any such taxable year. \n \n “(b)  An election to have the provisions of subsection (a) apply shall be made by a corporation— “(1)  in such form and manner as the Secretary of the Treasury or his delegate may prescribe, and \n \n “(2)  not later than the time prescribed by law for filing a claim for credit or refund of overpayment of income tax for the first taxable year beginning after  December 31, 1969 , in which such corporation sustains a net capital loss. \n \n \n “(c)  The Secretary of the Treasury or his delegate shall prescribe such regulations as he determines necessary to carry out the purposes of this section.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The term “commodities derivatives dealer” means a person which\u202f 1 1 \u202fSo in original. Probably should be “who”.  regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business.\nThe term “commodities derivative financial instrument” means any contract or financial instrument with respect to commodities (other than a share of stock in a corporation, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract (as defined in section 1256(b))), the value or settlement price of which is calculated by or determined by reference to a specified index.\nAt the election of the taxpayer, paragraphs (1) and (3) of subsection (a) shall not apply to musical compositions or copyrights in musical works sold or exchanged by a taxpayer described in subsection (a)(3).\nThe Secretary shall prescribe such regulations as are appropriate to carry out the purposes of paragraph (6) and (7) of subsection (a) in the case of transactions involving related parties.\n2017—Subsec. (a)(3).  Pub. L. 115–97  inserted “a patent, invention, model or design (whether or not patented), a secret formula or process,” before “a copyright” in introductory provisions.\n2010—Subsec. (a)(3)(C).  Pub. L. 111–312  amended subsec. (a)(3)(C) to read as if amendment by  Pub. L. 107–16, §\u202f542(e)(2)(A) , had never been enacted. See 2001 Amendment note below.\n2006—Subsec. (b)(3).  Pub. L. 109–432  struck out “before  January 1, 2011 ,” after “exchanged”.\nPub. L. 109–222  added par. (3). Former par. (3) redesignated (4).\nSubsec. (b)(4).  Pub. L. 109–222  redesignated par. (3) as (4).\n2002—Subsec. (b)(1)(B)(i).  Pub. L. 107–147  substituted “1256(b)))” for “1256(b))”.\n2001—Subsec. (a)(3)(C).  Pub. L. 107–16, §\u202f542(e)(2)(A) , inserted “(other than by reason of section 1022)” after “is determined”.\n1999— Pub. L. 106–170  designated existing provisions as subsec. (a), inserted heading, and added pars. (6) to (8) and subsec. (b).\n1981—Pars. (5), (6).  Pub. L. 97–34  redesignated par. (6) as (5) and struck out former par. (5), which excluded from definition of “capital asset” an obligation of the United States or any of its possessions, or of a State or any political subdivision thereof, or of the District of Columbia, issued on or after  March 1, 1941 , on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue, and is covered by  section 1232(a)(4)(B) of this title .\n1976—Par. (5).  Pub. L. 94–455, §\u202f1901(c)(9) , struck out “or Territory,” after “State”.\nPar. (6).  Pub. L. 94–455, §\u202f2132(a) , added par. (6).\n1969—Par. (3).  Pub. L. 91–172  inserted reference to a letter or memorandum, added subpar. (B) dealing with a letter or memorandum, and redesignated former subpar. (B) as (C).\nPub. L. 115–97, title I, §\u202f13314(c) ,  Dec. 22, 2017 ,  131 Stat. 2133 , provided that:  “The amendments made by this section [amending this section and  section 1231 of this title ] shall apply to dispositions after  December 31, 2017 .”\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nPub. L. 109–432, div. A, title IV, §\u202f412(b) ,  Dec. 20, 2006 ,  120 Stat. 2963 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 204 of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ].”\nAmendment by  Pub. L. 109–222  applicable to sales and exchanges in taxable years beginning after  May 17, 2006 , see  section 204(c) of Pub. L. 109–222 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying after  Dec. 31, 2009 , see  section 542(f)(1) of Pub. L. 107–16 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 97–34  applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as an Effective Date note under  section 1092 of this title .\nPub. L. 94–455, title XXI, §\u202f2132(b) ,  Oct. 4, 1976 ,  90 Stat. 1925 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to sales, exchanges, and contributions made after the date of enactment of this Act [ Oct. 4, 1976 ].”\nPub. L. 91–172, title V, §\u202f514(c) ,  Dec. 30, 1969 ,  83 Stat. 643 , provided that:  “The amendments made by this section [amending this section and sections 341 and 1231 of this title] shall apply to sales and other dispositions occurring after  July 25, 1969 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The term “short-term capital gain” means gain from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent such gain is taken into account in computing gross income.\nThe term “short-term capital loss” means loss from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.\nThe term “long-term capital gain” means gain from the sale or exchange of a capital asset held for more than 1 year, if and to the extent such gain is taken into account in computing gross income.\nThe term “long-term capital loss” means loss from the sale or exchange of a capital asset held for more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.\nThe term “net short-term capital gain” means the excess of short-term capital gains for the taxable year over the short-term capital losses for such year.\nThe term “net short-term capital loss” means the excess of short-term capital losses for the taxable year over the short-term capital gains for such year.\nThe term “net long-term capital gain” means the excess of long-term capital gains for the taxable year over the long-term capital losses for such year.\nThe term “net long-term capital loss” means the excess of long-term capital losses for the taxable year over the long-term capital gains for such year.\nThe term “capital gain net income” means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.\nThe term “net capital loss” means the excess of the losses from sales or exchanges of capital assets over the sum allowed under section 1211. In the case of a corporation, for the purpose of determining losses under this paragraph, amounts which are short-term capital losses under section 1212(a)(1) shall be excluded.\nThe term “net capital gain” means the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.\n2014— Pub. L. 113–295  struck out concluding provisions which read as follows: “For purposes of this subtitle, in the case of futures transactions in any commodity subject to the rules of a board of trade or commodity exchange, the length of the holding period taken into account under this section or under any other section amended by section 1402 of the Tax Reform Act of 1976 shall be determined without regard to the amendments made by subsections (a) and (b) of such section 1402.”\n2010—Par. (10).  Pub. L. 111–325  substituted “section 1212(a)(1)” for “section 1212”.\n1984—Pars. (1) to (4).  Pub. L. 98–369  substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1976—Pars. (1) to (4).  Pub. L. 94–455, §\u202f1402(a)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(a)(1) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nPar. (9).  Pub. L. 94–455, §\u202f1901(a)(136)(A) , substituted “Capital gain net income” and “capital gain net income” for “Net capital gain” and “net capital gain” in heading and text.\nPar. (11).  Pub. L. 94–455, §\u202f1901(a)(136)(B) , substituted “Net capital gain” and “net capital gain” for “Net section 1201 gain” and “net section 1201 gain” in heading and text.\nPub. L. 94–455, §\u202f1402(d) , inserted sentence at end relating to length of holding period in case of futures transactions in commodities.\n1969—Par. (9).  Pub. L. 91–172, §\u202f513(c) , substituted “The” for “In the case of a corporation, the”.\nPar. (11).  Pub. L. 91–172, §\u202f511(a) , added par. (11).\n1964—Pars. (9), (10).  Pub. L. 88–272  struck out provisions from par. (9) relating to taxpayers other than corporations, and inserted “In the case of a corporation” in par. (10).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nExcept as otherwise provided, amendment by  Pub. L. 111–325  applicable to net capital losses for taxable years beginning after  Dec. 22, 2010 , see  section 101(c) of Pub. L. 111–325 , set out as a note under  section 1212 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(a)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(a)(2) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by  section 1901(a)(136) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 511(a) of Pub. L. 91–172  applicable with respect to taxable years beginning after  Dec. 31, 1969 , see  section 511(d) of Pub. L. 91–172 , set out as an Effective Date note under  section 852 of this title .\nAmendment by  section 513(c) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 513(d) of Pub. L. 91–172 , set out as a note under  section 1211 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 230(c) of Pub. L. 88–272 , set out as a note under  section 1212 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'GENERAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'For special holding period provision relating to certain partnership distributions, see section 735(b).\n2018—Par. (13).  Pub. L. 115–141  substituted “subsections (a)(2) and (c)(2)(A) of section 1202” for “sections 1202(a)(2), 1202(c)(2)(A), 1400B(b), and 1400F(b)”.\n2014—Par. (1).  Pub. L. 113–295, §\u202f221(a)(80)(A) , struck out “after  March 1, 1954 ,” after “such exchanges” in introductory provisions.\nPar. (4).  Pub. L. 113–295, §\u202f221(a)(80)(B) , struck out “(or under so much of section 1052(c) as refers to section 113(a)(23) of the Internal Revenue Code of 1939)” after “section 307”. Amendment was executed to reflect the probable intent of Congress notwithstanding a second set of quotation marks around the text directed to be stricken.\nPar. (6).  Pub. L. 113–295, §\u202f221(a)(80)(C) , struck out par. (6) which read as follows: “In determining the period for which the taxpayer has held a residence, the acquisition of which resulted under section 1034 (as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) in the nonrecognition of any part of the gain realized on the sale or exchange of another residence, there shall be included the period for which such other residence had been held as of the date of such sale or exchange. For purposes of this paragraph, the term ‘sale or exchange’ includes an involuntary conversion occurring after  December 31, 1950 , and before  January 1, 1954 .”\nPar. (8).  Pub. L. 113–295, §\u202f221(a)(80)(C) , struck out par. (8) which read as follows: “Any reference in this section to a provision of this title shall, where applicable, be deemed a reference to the corresponding provision of the Internal Revenue Code of 1939, or prior internal revenue laws.”\n2005—Pars. (3) to (16).  Pub. L. 109–135  redesignated pars. (4) to (16) as (3) to (15), respectively, and struck out former par. (3) which read as follows: “In determining the period for which the taxpayer has held stock or securities received upon a distribution where no gain was recognized to the distributee under section 1081(c) (or under section 112(g) of the Revenue Act of 1928,  45 Stat. 818 , or the Revenue Act of 1932,  48 Stat. 705 ), there shall be included the period for which he held the stock or securities in the distributing corporation before the receipt of the stock or securities on such distribution.”\n2004—Pars. (10) to (17).  Pub. L. 108–357  redesignated pars. (11) to (17) as (10) to (16), respectively, and struck out former par. (10) which read as follows: “In determining the period for which the taxpayer has held trust certificates of a trust to which subsection (d) of section 1246 applies, or the period for which the taxpayer has held stock in a corporation to which subsection (d) of section 1246 applies, there shall be included the period for which the trust or corporation (as the case may be) held the stock of foreign investment companies.”\n2000—Par. (15).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f116(b)(2)] , amended par. (15) generally. Prior to amendment, par. (15) read as follows: “In determining the period for which the taxpayer has held property the acquisition of which resulted under section 1045 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property has been held as of the date of such sale.”\nPars. (16), (17).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(h)(1)] , added par. (16) and redesignated former par. (16) as (17).\n1998—Pars. (11), (12).  Pub. L. 105–206, §\u202f6005(d)(4) , substituted “18 months” for “1 year” in subpar. (B) and concluding provisions.\nPub. L. 105–206, §\u202f5001(a)(5) , substituted “1 year” for “18 months” in subpar. (B) and concluding provisions.\n1997—Par. (7).  Pub. L. 105–34, §\u202f312(d)(9) , inserted “(as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997)” after “section 1034”.\nPars. (15), (16).  Pub. L. 105–34, §\u202f313(b)(2) , added par. (15) and redesignated former par. (15) as (16).\n1989—Pars. (14), (15).  Pub. L. 101–194  added par. (14) and redesignated former par. (14) as (15).\n1988—Par. (14).  Pub. L. 100–647  amended par. (14) generally, substituting “reference” for “references” in heading, striking out “(A)” before “For special holding”, and striking out subpar. (B) which related to distributions of appreciated property to corporations.\n1984—Pars. (11), (12).  Pub. L. 98–369, §\u202f1001(b)(14) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nPar. (13).  Pub. L. 98–369, §\u202f541(b)(1) , added par. (13). Former par. (13) redesignated (14).\nPar. (14).  Pub. L. 98–369, §\u202f541(b)(1) , redesignated former par. (13) as (14).\nPub. L. 98–369, §\u202f54(c) , designated existing cross reference as subpar. (A) and added subpar. (B).\n1983—Par. (8).  Pub. L. 97–448, §\u202f105(c)(4) , inserted “(other than a commodity futures contract to which section 1256 applies)” after “acquired in satisfaction of a commodity futures contract”.\nPars. (12), (13).  Pub. L. 97–448, §\u202f104(b)(3)(C) , added par. (12) and redesignated former par. (12) as (13).\n1980—Par. (11)(A).  Pub. L. 96–223  repealed the amendment made by  Pub. L. 95–600 . See 1978 Amendment note below.\n1978—Par. (11)(A).  Pub. L. 95–600  inserted reference to determination of basis of property under section 1023. See Repeals note below.\n1976—Par. (5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nPar. (11).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(Q) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\n1970—Pars. (11), (12).  Pub. L. 91–614  added par. (11) and redesignated former par. (11) as (12).\n1962—Pars. (10), (11).  Pub. L. 87–834  added par. (10) and redesignated former par. (10) as (11).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79  et seq.) before its repeal, see  section 402(m) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by section 1(a)(7) [title I, §\u202f116(b)(2)] of  Pub. L. 106–554  applicable to qualified empowerment zone assets acquired after  Dec. 21, 2000 , see section 1(a)(7) [title I, §\u202f116(c)] of  Pub. L. 106–554 , set out as a note under  section 1016 of this title .\nAmendment by section 1(a)(7) [title IV, §\u202f401(h)(1)] of  Pub. L. 106–554  effective  Dec. 21, 2000 , see section 1(a)(7) [title IV, §\u202f401(j)] of  Pub. L. 106–554 , set out as a note under  section 1032 of this title .\nAmendment by  section 5001(a)(5) of Pub. L. 105–206  effective  Jan. 1, 1998 , see  section 5001(b)(2) of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 6005(d)(4) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 312(d)(9) of Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  section 313(b)(2) of Pub. L. 105–34  applicable to sales after  Aug. 5, 1997 , see  section 313(c) of Pub. L. 105–34 , set out as a note under  section 1016 of this title .\nAmendment by  Pub. L. 101–194  applicable to sales after  Nov. 30, 1989 , see  section 502(c) of Pub. L. 101–194 , set out as a note under  section 1016 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 541(b)(1) of Pub. L. 98–369  applicable to sales of securities in taxable years beginning after  July 18, 1984 , see  section 541(c) of Pub. L. 98–369 , set out as an Effective Date note under  section 1042 of this title .\nAmendment by  section 1001(b)(14) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 96–223  (repealing  section 702(c)(5) of Pub. L. 95–600  and the amendments made thereby, which had amended this section) applicable in respect of decedents dying after  Dec. 31, 1976 , and except for certain elections, this title to be applied and administered as if those repealed provisions had not been enacted, see section 401(b), (e) of  Pub. L. 96–223 , set out as a note under  section 1023 of this title .\nAmendment by  Pub. L. 95–600  to take effect as if included in the amendments and additions made by, and the appropriate provisions of  Pub. L. 94–455 , see  section 702(c)(10) of Pub. L. 95–600 , set out as a note under  section 1014 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by  Pub. L. 91–614  applicable with respect to decedents dying after  Dec. 31, 1970 , see  section 101(j) of Pub. L. 91–614 , set out as a note under  section 2032 of this title .\nAmendment by  Pub. L. 87–834  applicable with respect to taxable years beginning after  Dec. 31, 1962 , see  section 14(c) of Pub. L. 87–834 , set out as a note under  section 312 of this title .\nPub. L. 95–600, §\u202f702(c)(5) , cited as a credit to this section, and the amendments made thereby, were repealed by  Pub. L. 96–223, title IV, §\u202f401(a) ,  94 Stat. 299 , resulting in the text of this section reading as it read prior to enactment of section 702(c)(5). See Effective Date of 1980 Amendment and Revival of Prior Law note set out above.\nAmendment by  Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The term “section 1231 loss” means any recognized loss from a sale or exchange or conversion described in subparagraph (A).\nSuch term includes timber, coal, and iron ore with respect to which section 631 applies.\nIn the case of an unharvested crop on land used in the trade or business and held for more than 1 year, if the crop and the land are sold or exchanged (or compulsorily or involuntarily converted) at the same time and to the same person, the crop shall be considered as “property used in the trade or business.”\nThe net section 1231 gain for any taxable year shall be treated as ordinary income to the extent such gain does not exceed the non-recaptured net section 1231 losses.\nFor purposes of determining the amount of the net section 1231 gain or loss for any taxable year, the rules of paragraph (4) of subsection (a) shall apply.\n2017—Subsec. (b)(1)(C).  Pub. L. 115–97  inserted “a patent, invention, model or design (whether or not patented), a secret formula or process,” before “a copyright”.\n2014—Subsec. (c)(2)(A).  Pub. L. 113–295  struck out “beginning after  December 31, 1981 ” after “years”.\n1999—Subsec. (b)(1)(C), (D).  Pub. L. 106–170  substituted “section 1221(a)” for “section 1221”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f1001(b)(15) , (e), substituted “6 months” for “1 year” wherever appearing, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nPub. L. 98–369, §\u202f711(c)(2)(A)(iii) , amended subsec. (a) generally, substituting pars. (1) to (4), for “If, during the taxable year, the recognized gains on sales or exchanges of property used in the trade or business, plus the recognized gains from the compulsory or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property used in the trade or business and capital assets held for more than 1 year into other property or money, exceed the recognized losses from such sales, exchanges, and conversions, such gains and losses shall be considered as gains and losses from sales or exchanges of capital assets held for more than 1 year. If such gains do not exceed such losses, such gains and losses shall not be considered as gains and losses from sales or exchanges of capital assets. For purposes of this subsection—\n“(1) in determining under this subsection whether gains exceed losses, the gains described therein shall be included only if and to the extent taken into account in computing gross income and the losses described therein shall be included only if and to the extent taken into account in computing taxable income, except that section 1211 shall not apply; and\n“(2) losses (including losses not compensated for by insurance or otherwise) upon the destruction, in whole or in part, theft or seizure, or requisition or condemnation of (A) property used in the trade or business or (B) capital assets held for more than 1 year shall be considered losses from a compulsory or involuntary conversion.\nIn the case of any involuntary conversion (subject to the provisions of this subsection but for this sentence) arising from fire, storm, shipwreck, or other casualty, or from theft, of any property used in the trade or business or of any capital asset held for more than 1 year, this subsection shall not apply to such conversion (whether resulting in gain or loss) if during the taxable year the recognized losses from such conversions exceed the recognized gains from such conversions.”\nSubsec. (b)(1), (4).  Pub. L. 98–369, §\u202f1001(b)(15) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (c).  Pub. L. 98–369, §\u202f176(a) , added subsec. (c).\n1981—Subsec. (b)(1)(D).  Pub. L. 97–34  substituted “paragraph (5)” for “paragraph (6)”.\n1978—Subsec. (b)(1)(D).  Pub. L. 95–600  added subpar. (D).\n1976—Subsecs. (a), (b)(1), (4).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year” wherever appearing.\nPub. L. 94–455, §\u202f1402(b)(1)(R) , provided that in subsecs. (a), first and last sentences, (a)(2), and (b)(1), (4), “6 months” would be changed to “9 months” for taxable years beginning in 1977.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f516(b) , provided that casualty (or theft) losses with respect to depreciable property and real estate used in trade or business and capital assets held for the production of income as well as personal assets are to be consolidated with casualty (or theft) gains with respect to this type of property and if the casualty losses exceed the casualty gains, the net loss is treated as an ordinary loss without regard to whether there may be noncasualty gains under this section, but, if the casualty gains exceed the casualty losses, the net gain is treated as a gain under this section and must be consolidated with other gains and losses under this section.\nSubsec. (b)(1)(C).  Pub. L. 91–172, §\u202f514(b)(2) , inserted reference to a letter or memorandum.\nSubsec. (b)(3).  Pub. L. 91–172, §\u202f212(b)(1) , redesignated existing provisions as subpar. (B) and added subpar. (A).\n1964—Subsec. (b)(2).  Pub. L. 88–272  inserted reference to iron ore in text, and to domestic iron ore in heading.\n1958—Subsec. (a).  Pub. L. 85–866  inserted provision respecting casualty losses sustained upon certain uninsured property.\nAmendment by  Pub. L. 115–97  applicable to dispositions after  Dec. 31, 2017 , see  section 13314(c) of Pub. L. 115–97 , set out as a note under  section 1221 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 98–369, div. A, title I, §\u202f176(b) ,  July 18, 1984 ,  98 Stat. 709 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to net section 1231 gains for taxable years beginning after  December 31, 1984 .”\nAmendment by  section 711(c)(2)(A)(iii) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 711(c)(2)(A)(v) of Pub. L. 98–369 , set out as a note under  section 165 of this title .\nAmendment by  section 1001(b)(15) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–34  applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as an Effective Date note under  section 1092 of this title .\nPub. L. 95–600, title VII, §\u202f701(ee)(2) ,  Nov. 6, 1978 ,  92 Stat. 2924 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply with respect to sales, exchanges, and contributions made after  October 4, 1976 .”\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 91–172, title II, §\u202f212(b)(2) ,  Dec. 30, 1969 ,  83 Stat. 571 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply to livestock acquired after  December 31, 1969 .”\nAmendment by  section 514(b)(2) of Pub. L. 91–172  applicable to sales and other dispositions occurring after  July 25, 1969 , see  section 514(c) of Pub. L. 91–172 , set out as a note under  section 1221 of this title .\nAmendment by  section 516(b) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 516(d)(2) of Pub. L. 91–172 , set out as a note under  section 1001 of this title .\nAmendment by  Pub. L. 88–272  applicable with respect to amounts received or accrued in taxable years beginning after  Dec. 31, 1963 , attributable to iron ore mined in such years, see  section 227(c) of Pub. L. 88–272 , set out as a note under  section 272 of this title .\nPub. L. 85–866, title I, §\u202f49(b) ,  Sept. 2, 1958 ,  72 Stat. 1642 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1957 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Section 1232, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 326 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I , §§\u202f50(a), 51,  72 Stat. 1642 , 1643;  June 25, 1959 ,  Pub. L. 86–69, §\u202f3(e) ,  73 Stat. 140 ;  Sept. 2, 1964 ,  Pub. L. 88–563, §\u202f5 ,  78 Stat. 845 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title IV, §\u202f413(a) , (b),  83 Stat. 609 , 611;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIV, §\u202f1402(b)(1)(S) , (2), title XIX, §§\u202f1901(b)(3)(I), (14)(D), 1904(b)(10)(C),  90 Stat. 1732 , 1793, 1796, 1817;  Aug. 13, 1981 ,  Pub. L. 97–34, title V, §\u202f505(b) ,  95 Stat. 331 ;  Sept. 3, 1982 ,  Pub. L. 97–248, title II , §§\u202f231(c), 232(b), title III, §\u202f310(b)(6),  96 Stat. 499 , 501, 599;  Jan. 12, 1983 ,  Pub. L. 97–448, title III, §\u202f306(a)(9)(B) , (C)(i), (ii),  96 Stat. 2403 , 2404;  July 18, 1984 ,  Pub. L. 98–369, div. A, title X, §\u202f1001(b)(16) , (d), (e),  98 Stat. 1012 , related to bonds and other evidences of indebtedness. See section 1271 et seq. of this title.\nSection 1232A, added  Pub. L. 97–248, title II, §\u202f231(a) ,  Sept. 3, 1982 ,  96 Stat. 496 ; amended  Pub. L. 98–369, div. A, title II, §\u202f211(b)(17) ,  July 18, 1984 ,  98 Stat. 756 , related to original issue discount. See section 1271 et seq. of this title.\nSection 1232B, added  Pub. L. 97–248, title II, §\u202f232(a) ,  Sept. 3, 1982 ,  96 Stat. 499 , related to stripped bonds. See  section 1286 of this title .\nRepeal applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'For purposes of this subtitle, gain or loss from the short sale of property shall be considered as gain or loss from the sale or exchange of a capital asset to the extent that the property, including a commodity future, used to close the short sale constitutes a capital asset in the hands of the taxpayer.\nSubsection (b) shall not include an option to sell property at a fixed price acquired on the same day on which the property identified as intended to be used in exercising such option is acquired and which, if exercised, is exercised through the sale of the property so identified. If the option is not exercised, the cost of the option shall be added to the basis of the property with which the option is identified. This subsection shall apply only to options acquired after  August 16, 1954 .\nIf on the date of such short sale substantially identical property has been held by the taxpayer for more than 1 year, any loss on the closing of such short sale shall be considered as a loss on the sale or exchange of a capital asset held for more than 1 year (notwithstanding the period of time any property used to close such short sale has been held, and notwithstanding section 1234).\nThis section shall not apply in the case of a hedging transaction in commodity futures.\n2002—Subsec. (e)(2)(E).  Pub. L. 107–147  added subpar. (E).\n2000—Subsec. (e)(2)(D).  Pub. L. 106–554  added subpar. (D).\n1997—Subsec. (h).  Pub. L. 105–34  added subsec. (h).\n1984—Subsecs. (b), (d), (e)(4)(A)(i).  Pub. L. 98–369  substituted “6 months” for “1 year” wherever appearing, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\n1981—Subsec. (e)(2)(A).  Pub. L. 97–34  inserted “,\u2000but does not include any position to which section 1092(b) applies” after “taxpayer”.\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(T) , (2), provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (c).  Pub. L. 94–455, §\u202f1901(a)(137) , substituted “ August 16, 1954 ” for “the date of enactment of this title”.\nSubsecs. (d), (e)(4)(A)(i).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(T) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\n1958—Subsec. (a).  Pub. L. 85–866, §\u202f52(b) , struck out “,\u2000other than a hedging transaction in commodity futures,” after “sale of property”.\nSubsec. (e)(4).  Pub. L. 85–866, §\u202f52(a) , added par. (4).\nSubsec. (g).  Pub. L. 85–866, §\u202f52(b) , added subsec. (g).\n1955—Subsec. (f). Act  Aug. 12, 1955 , added subsec. (f).\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], to which such amendment relates, see  section 412(e) of Pub. L. 107–147 , set out as a note under  section 151 of this title .\nPub. L. 105–34, title X, §\u202f1003(b)(2) ,  Aug. 5, 1997 ,  111 Stat. 910 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to property which becomes substantially worthless after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–34  applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as an Effective Date note under  section 1092 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by  section 1901(a)(137) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 52(b) of Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title I, §\u202f52(c) ,  Sept. 2, 1958 ,  72 Stat. 1644 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to short sales made after  December 31, 1957 .”\nAct Aug. 12, 1955, ch. 871, §\u202f2 ,  69 Stat. 718 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply only with respect to taxable years ending after the date of the enactment of this Act [ Aug. 12, 1955 ] and only in the case of a short sale of property made by the taxpayer after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Gain or loss attributable to the sale or exchange of, or loss attributable to failure to exercise, an option to buy or sell property shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the option relates has in the hands of the taxpayer (or would have in the hands of the taxpayer if acquired by him).\nFor purposes of paragraph (1), if loss is attributable to failure to exercise an option, the option shall be deemed to have been sold or exchanged on the day it expired.\nIn the case of the grantor of the option, gain or loss from any closing transaction with respect to, and gain on lapse of, an option in property shall be treated as a gain or loss from the sale or exchange of a capital asset held not more than 1 year.\nThe term “closing transaction” means any termination of the taxpayer’s obligation under an option in property other than through the exercise or lapse of the option.\nThe term “property” means stocks and securities (including stocks and securities dealt with on a “when issued” basis), commodities, and commodity futures.\nThis subsection shall not apply to any option granted in the ordinary course of the taxpayer’s trade or business of granting options.\nGain or loss shall be recognized on the exercise of an option on a section 1256 contract (within the meaning of section 1256(b)).\nFor purposes of subsections (a) and (b), a cash settlement option shall be treated as an option to buy or sell property.\nFor purposes of subparagraph (A), the term “cash settlement option” means any option which on exercise settles in (or could be settled in) cash or property other than the underlying property.\n1999—Subsec. (a)(3)(A).  Pub. L. 106–170  substituted “section 1221(a)” for “section 1221”.\n1984—Subsec. (b)(1).  Pub. L. 98–369, §\u202f1001(b)(18) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (c).  Pub. L. 98–369, §\u202f105(a) , added subsec. (c).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f2136(a) , inserted in heading “in the case of the purchaser”; designated existing provisions as par. “(1) General rule” and substituted “an option” and “the option” for “a privilege or option” and “the option or privilege”; redesignated existing subsec. (b) as par. (2) and substituted “an option” and “the option” for “a privilege or option” and “the privilege or option”; and redesignated existing subsec. (d)(1) to (3) as par. (3)(A) to (C) and substituted in heading and introductory text “Nonapplication” and “subsection” for “Non-application” and “section”, in par. (3)(A) “an option” for “a privilege or option”, in par. (3)(B) “an option”, “such option” and “subsection” for “a privilege or option”, “such privilege or option” and “section” and in par. (3)(C) substituted a period for “; or”.\nSubsec. (b).  Pub. L. 94–455, §\u202f2136(a) , added subsec. (b), incorporating provisions of a prior subsec. (c) providing for a special rule for grantors of straddles, par. (1) relating to “gain on lapse” and reading “In the case of gain on lapse of an option granted by the taxpayer as part of a straddle, the gain shall be deemed to be gain from the sale or exchange of a capital asset held for not more than 6 months on the day that the option expired.”; par. (2) relating to “exception” and reading “This subsection shall not apply to any person who holds securities for sale to customers in the ordinary course of his trade or business.”, now covered in subsec. (b)(3); and par. (3) relating to definitions of “straddle” and “security”.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(U) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (c).  Pub. L. 94–455, §\u202f2136(a) , struck out provision respecting special rule for grantors of straddles, the paragraphs relating to: (1) gain on lapse; (2) exception, now covered in subsec. (b)(3); and (3) definitions of “straddle” and “security”, such provision now covered generally by subsec. (b) of this section.\nSubsec. (d).  Pub. L. 94–455, §\u202f2136(a) , struck out provision respecting non-application of section, pars. (1) to (3) now covered in subsec. (a)(3)(A) to (C) of this section, and par. (4) providing for such non-application to gain attributable to the sale or exchange of a privilege or option acquired by the taxpayer before  Mar. 1, 1954 , if in the hands of the taxpayer such privilege or option was a capital asset.\n1966—Subsecs. (c), (d).  Pub. L. 89–809  added subsec. (c) and redesignated former subsec. (c) as (d).\n1958— Pub. L. 85–866  amended section generally and among other changes provided in subsec. (a) that gain or loss resulting from option to buy or sell property is to be considered gain or loss arising from property which has the same character as the property underlying the option, incorporated existing provisions in subsecs. (b) and (c)(3), and inserted provisions set out in subsec. (c)(1), (2), (4).\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 98–369, div. A, title I, §\u202f105(b) ,  July 18, 1984 ,  98 Stat. 629 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to options purchased or granted after  October 31, 1983 , in taxable years ending after such date.”\nAmendment by  section 1001(b)(18) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 94–455, title XXI, §\u202f2136(b) ,  Oct. 4, 1976 ,  90 Stat. 1930 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to options granted after  September 1, 1976 .”\nPub. L. 89–809, title II, §\u202f210(b) ,  Nov. 13, 1966 ,  80 Stat. 1580 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to straddle transactions entered into after  January 25, 1965 , in taxable years ending after such date.”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': '2002—Pars. (1) to (3).  Pub. L. 107–147  inserted “or” at end of par. (1), struck out “or” at end of par. (2), and struck out par. (3) which read as follows: “a securities futures contract (as so defined) which is a capital asset in the hands of the taxpayer,”.\n2000—Par. (1).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(b)(1)] , inserted “(other than a securities futures contract, as defined in section 1234B)” after “right or obligation”.\nPar. (3).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(b)(2)–(4)] , added par. (3).\n1997—Par. (1).  Pub. L. 105–34  substituted “property” for “personal property (as defined in section 1092(d)(1))”.\n1984— Pub. L. 98–369, §\u202f102(e)(9) , inserted at end “The preceding sentence shall not apply to the retirement of any debt instrument (whether or not through a trust or other participation arrangement).”\nPar. (2).  Pub. L. 98–369, §\u202f102(e)(4) , substituted “a section 1256 contract” for “a regulated futures contract”.\n1983— Pub. L. 97–448  inserted reference to a regulated futures contract (as defined in section 1256) not described in paragraph (1) which is a capital asset in the hands of the taxpayer.\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], to which such amendment relates, see  section 412(e) of Pub. L. 107–147 , set out as a note under  section 151 of this title .\nPub. L. 105–34, title X, §\u202f1003(a)(2) ,  Aug. 5, 1997 ,  111 Stat. 910 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to terminations more than 30 days after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 102(e)(4) of Pub. L. 98–369  applicable to positions established after  July 18, 1984 , in taxable years ending after that date, except as otherwise provided, and amendment by  section 102(e)(9) of Pub. L. 98–369 , applicable as if included in the amendment made by  section 507(a) of Pub. L. 97–34 , as amended by  section 105(e) of Pub. L. 97–448 , see section 102(f), (g) of  Pub. L. 98–369 , set out as a note under  section 1256 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nSection applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as a note under  section 1092 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Gain or loss attributable to the sale, exchange, or termination of a securities futures contract shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the contract relates has in the hands of the taxpayer (or would have in the hands of the taxpayer if acquired by the taxpayer).\nExcept as provided in the regulations under section 1092(b) or this section, or in section 1233, if gain or loss on the sale, exchange, or termination of a securities futures contract to sell property is considered as gain or loss from the sale or exchange of a capital asset, such gain or loss shall be treated as short-term capital gain or loss.\nFor purposes of this section, the term “securities futures contract” means any security future (as defined in section 3(a)(55)(A) of the Securities Exchange Act of 1934, as in effect on the date of the enactment of this section). The Secretary may prescribe regulations regarding the status of contracts the values of which are determined directly or indirectly by reference to any index which becomes (or ceases to be) a narrow-based security index (as defined for purposes of section 1256(g)(6)).\nFor purposes of this title, a securities futures contract shall not be treated as a commodity futures contract.\nThe Secretary shall prescribe such regulations as may be appropriate to provide for the proper treatment of securities futures contracts under this title.\nFor special rules relating to dealer securities futures contracts, see section 1256.\nSection 3(a)(55)(A) of the Securities Exchange Act of 1934, referred to in subsec. (c), is classified to  section 78c(a)(55)(A) of Title 15 , Commerce and Trade.\nThe date of the enactment of this section, referred to in subsec. (c), is the date of enactment of  Pub. L. 106–554 , which was approved  Dec. 21, 2000 .\nPub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(a)] , which directed amendment of subpart IV of subchapter P of chapter 1 by adding this section after section 1234A, was executed by adding this section after 1234A of this part which is part IV of subchapter P of chapter 1, to reflect the probable intent of Congress.\n2004—Subsec. (c).  Pub. L. 108–311  inserted at end “The Secretary may prescribe regulations regarding the status of contracts the values of which are determined directly or indirectly by reference to any index which becomes (or ceases to be) a narrow-based security index (as defined for purposes of section 1256(g)(6)).”\n2002—Subsec. (a)(1).  Pub. L. 107–147, §\u202f412(d)(1)(B)(i) , substituted “sale, exchange, or termination of a securities futures contract” for “sale or exchange of a securities futures contract”.\nSubsec. (b).  Pub. L. 107–147, §\u202f412(d)(1)(B)(i) , (3)(B), inserted “or in section 1233,” after “or this section,” and substituted “sale, exchange, or termination of a securities futures contract” for “sale or exchange of a securities futures contract”.\nSubsec. (f).  Pub. L. 107–147, §\u202f412(d)(1)(B)(ii) , added subsec. (f).\nPub. L. 108–311, title IV, §\u202f405(b) ,  Oct. 4, 2004 ,  118 Stat. 1189 , provided that:  “The amendments made by subsection (a) [amending this section and  section 1256 of this title ] shall take effect as if included in section 401 of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  section 1(a)(7) of Pub. L. 106–554 ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–587].”\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], to which such amendment relates, see  section 412(e) of Pub. L. 107–147 , set out as a note under  section 151 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'For special rule relating to nonresident aliens, see section 871(a).\n2014—Subsec. (b)(2)(B).  Pub. L. 113–295, §\u202f221(a)(82)(B) , substituted “subsection (c)” for “subsection (d)”.\nSubsecs. (c) to (e).  Pub. L. 113–295, §\u202f221(a)(82)(A) , redesignated subsecs. (d) and (e) as (c) and (d), respectively, and struck out former subsec. (c). Prior to amendment, text of subsec. (c) read as follows: “This section shall be applicable with regard to any amounts received, or payments made, pursuant to a transfer described in subsection (a) in any taxable year to which this subtitle applies, regardless of the taxable year in which such transfer occurred.”\n1998—Subsec. (a).  Pub. L. 105–206, §\u202f6005(d)(4) , substituted “18 months” for “1 year” in introductory provisions.\nPub. L. 105–206, §\u202f5001(a)(5) , substituted “1 year” for “18 months” in introductory provisions.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f1001(b)(19) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (d).  Pub. L. 98–369, §\u202f174(b)(5)(C) , substituted “section 267(b) or persons described in section 707(b)” for “section 267(b)” and “section 267(b) and (c) and section 707(b)” for “section 267(b) and (c)” in introductory provisions, and substituted “section 267(b) or 707(b)” for “section 267(b)” in par. (1).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(V) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\n1958—Subsec. (d).  Pub. L. 85–866  substituted provisions set out as subsec. (d) for provisions reading “Subsection (a) shall not apply to any sale or exchange between an individual and any other related person (as defined in section 267(b)), except brothers and sisters, whether by the whole or half blood.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 5001 of Pub. L. 105–206  effective  Jan. 1, 1998 , see  section 5001(b)(2) of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 6000(d)(4) of Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  section 174(b)(5)(C) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1983 , in taxable years ending after that date, see  section 174(c)(2)(A) of Pub. L. 98–369 , set out as a note under  section 267 of this title .\nAmendment by  section 1001(b)(19) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nPub. L. 85–866, title I, §\u202f54(b) ,  Sept. 2, 1958 ,  72 Stat. 1644 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after the date of the enactment of this Act [ Sept. 2, 1958 ], but only with respect to transfers after such date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Loss by a dealer in securities from the sale or exchange of any security shall, except as otherwise provided in section 582(c), (relating to bond, etc., losses of banks), in no event be considered as ordinary loss if at any time the security was clearly identified in the dealer’s records as a security held for investment.\nFor purposes of this section, the term “security” means any share of stock in any corporation, certificate of stock or interest in any corporation, note, bond, debenture, or evidence of indebtedness, or any evidence of an interest in or right to subscribe to or purchase any of the foregoing.\nFor purposes of subsection (a), any security acquired by a dealer pursuant to an option held by such dealer may be treated as held for investment only if the dealer, before the close of the day on which the option was acquired, clearly identified the option on his records as held for investment. For purposes of the preceding sentence, the term “option” includes the right to subscribe to or purchase any security.\n2014—Subsec. (b).  Pub. L. 113–295  struck out “after  November 19, 1951 ,” after “time”.\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f107(b)(1) , substituted “the security was, before the close of the day on which it was acquired (or such earlier time as the Secretary may prescribe by regulations), clearly identified in the dealer’s records as a security held for investment; and” for “the security was, before the close of the day on which it was acquired (before the close of the following day in the case of an acquisition before  January 1, 1982 ), clearly identified in the dealer’s records as a security held for investment or if acquired before  October 20, 1951 , was so identified before  November 20, 1951 ; and”.\nSubsec. (a)(2).  Pub. L. 98–369, §\u202f107(b)(2) , inserted “(or such earlier time)” after “such day”.\n1983—Subsec. (e).  Pub. L. 97–448  added subsec. (e).\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f506(a) , substituted “before the close of the day on which it was acquired (before the close of the following day in the case of an acquisition before  January 1, 1982 )” for “before the expiration of the 30th day after the date of its acquisition” in par. (1) and “close of such day” for “expiration of such 30th day” in par. (2).\nSubsec. (d).  Pub. L. 97–34, §\u202f506(b) , added subsec. (d).\n1976—Subsec. (b).  Pub. L. 94–455  substituted “ordinary loss” for “loss from the sale or exchange of property which is not a capital asset”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 98–369  applicable to positions entered into after  July 18, 1984 , in taxable years ending after that date, see  section 107(e) of Pub. L. 98–369 , set out as a note under  section 1092 of this title .\nPub. L. 97–448, title I, §\u202f105(d)(2) ,  Jan. 12, 1983 ,  96 Stat. 2387 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to securities acquired after  September 22, 1982 , in taxable years ending after such date.”\nAmendment by  Pub. L. 97–34  applicable to property acquired by the taxpayer after  Aug. 13, 1981 , in taxable years ending after such date, and applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as an Effective Date note under  section 1092 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'If more than 5 lots or parcels contained in the same tract of real property are sold or exchanged, gain from any sale or exchange (which occurs in or after the taxable year in which the sixth lot or parcel is sold or exchanged) of any lot or parcel which comes within the provisions of paragraphs (1), (2) and (3) of subsection (a) of this section shall be deemed to be gain from the sale of property held primarily for sale to customers in the ordinary course of the trade or business to the extent of 5 percent of the selling price.\nFor the purpose of computing gain under paragraph (1) of this subsection, expenditures incurred in connection with the sale or exchange of any lot or parcel shall neither be allowed as a deduction in computing taxable income, nor treated as reducing the amount realized on such sale or exchange; but so much of such expenditures as does not exceed the portion of gain deemed under paragraph (1) of this subsection to be gain from the sale of property held primarily for sale to customers in the ordinary course of trade or business shall be so allowed as a deduction, and the remainder, if any, shall be treated as reducing the amount realized on such sale or exchange.\nFor purposes of this section, the term “tract of real property” means a single piece of real property, except that 2 or more pieces of real property shall be considered a tract if at any time they were contiguous in the hands of the taxpayer or if they would be contiguous except for the interposition of a road, street, railroad, stream, or similar property. If, following the sale or exchange of any lot or parcel from a tract of real property, no further sales or exchanges of any other lots or parcels from the remainder of such tract are made for a period of 5 years, such remainder shall be deemed a tract.\n1996—Subsec. (a).  Pub. L. 104–188, §\u202f1314(a) , substituted “other than a C corporation” for “other than a corporation” in introductory provisions.\nSubsec. (a)(2)(A).  Pub. L. 104–188, §\u202f1314(b) , inserted “an S corporation which included the taxpayer as a shareholder,” after “controlled by the taxpayer,”.\n1976—Subsec. (b)(3)(B), (C).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1901(a)(138) , struck out effective date provision making the section applicable only with respect to sales of property occurring after  Dec. 31, 1953 , except that for purposes of subsec. (c) defining tract of real property and for determining the number of sales under subsec. (b)(1) of this section, all sales of lots and parcels from any tract of real property during the period of 5 years before  Dec. 31, 1953 , shall be taken into account, except as provided in subsec. (c).\n1971—Subsec. (a).  Pub. L. 91–686, §\u202f2(a)(1) , substituted “other than a corporation” for “(including corporations only if no shareholder directly or indirectly holds real property for sale to customers in the ordinary course of trade or business and only in the case of property described in the last sentence of subsection (b)(3))”.\nSubsec. (b).  Pub. L. 91–686, §\u202f2(a)(2) , struck out sentence which made subpars. (B) and (C) inapplicable in the case of property acquired through the foreclosure of a lien thereon which secured the payment of an indebtedness to the taxpayer or (in the case of a corporation) to a creditor who has transferred the foreclosure bid to the taxpayer in exchange for all of its stock and other consideration and in the case of property adjacent to such property if 80 percent of the real property owned by the taxpayer was property described in the first part of the sentence.\n1958—Subsec. (a)(1).  Pub. L. 85–866  substituted “and, in the same taxable year” for “or, in the same taxable year”.\n1956—Subsec. (a). Act  Apr. 27, 1956 , §\u202f1, substituted “(including corporations only if no shareholder directly or indirectly holds real property for sale to customers in the ordinary course of trade or business and only in the case of property described in the last sentence of subsection (b)(3))” for “other than a corporation”.\nSubsec. (b)(3). Act  Apr. 27, 1956 , §\u202f2, substituted “water, sewer, or drainage facilities” for “water or sewer facilities” in subpar. (A), and inserted provision at end that requirements of subpars. (B) and (C) do not apply to certain specified property.\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  section 1901(a)(138) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–686, §\u202f2(b) ,  Jan. 12, 1971 ,  84 Stat. 2071 , provided that:  “The amendments made by subsection (a) [amending this section] shall be effective for taxable years beginning after the date of enactment of this Act [ Jan. 12, 1971 ].”\nAmendment by  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nAct Apr. 27, 1956, ch. 214, §\u202f3 ,  70 Stat. 119 , provided that:  “This Act [amending this section] shall apply to all taxable years beginning after  Dec. 31, 1954 .”\nPub. L. 91–686, §\u202f1 ,  Jan. 12, 1971 ,  84 Stat. 2070 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided:  \n\n “That  (a)  for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] any lot or parcel of real property sold or exchanged by a corporation which would, but for this Act, be treated as property held primarily for sale to customers in the ordinary course of trade or business shall not, except to the extent provided in (b), be so treated if— “(1)  no shareholder of the corporation directly or indirectly holds real property primarily for sale to customers in the ordinary course of trade or business; and \n \n “(2) (A)  such lot or parcel is a part of real property (i) held for more than twenty-five years at the time of sale or exchange, and (ii) acquired before  January 1, 1934 , by the corporation as a result of the foreclosure of a lien (or liens) thereon which secured the payment of indebtedness held by one or more creditors who transferred one or more foreclosure bids to the corporation in exchange for all its stock (with or without other consideration), or \n \n “(B) (i)  such lot or parcel is a part of additional real property acquired before  January 1, 1957 , by the corporation in the near vicinity of any real property to which subparagraph (A) applies, or \n \n “(ii)  such lot or parcel is wholly or to some extent a part of any minor acquisition made after  December 31, 1956 , by the corporation to adjust boundaries, to fill gaps in previously acquired property, to facilitate the installation of streets, utilities, and other public facilities, or to facilitate the sale of adjacent property, or \n \n “(iii)  such lot or parcel is wholly or to some extent a part of a reacquisition by the corporation after  December 31, 1956 , of property previously owned by the corporation; but only if at least 80 percent (as measured by area) of the real property sold or exchanged by the corporation within the taxable year is property described in subparagraph (A); and \n \n \n \n \n “(3)  there were no acquisitions of real property by the corporation after  December 31, 1956 , other than— “(A)  acquisitions described in paragraph (2)(B)(ii) and reacquisitions described in paragraph (2)(B)(iii), or \n \n “(B)  acquisitions of real property used in a trade or business of the corporation or held for investment by the corporation; and \n \n \n “(4)  the corporation did not after  December 31, 1957 , sell or exchange (except in condemnation or under threat of condemnation) any residential lot or parcel on which, at the time of the sale or exchange, there existed any substantial improvements (other than improvements in existence at the time the land was acquired by the corporation) except subdivision, clearing, grubbing, and grading, building or installation of water, sewer, and drainage facilities, construction of roads, streets, and sidewalks, and installation of utilities.”\nbut only if at least 80 percent (as measured by area) of the real property sold or exchanged by the corporation within the taxable year is property described in subparagraph (A); and\nIn any case in which a corporation referred to in paragraphs (1), (2), (3), and (4) is a member of an affiliated group as defined in section 1504(a) of the Internal Revenue Code of 1986, such affiliated group shall, for purposes of such paragraphs, be treated as a single corporation.\n“(b)(1) Gain from any sale or exchange described in subsection (a) shall be deemed, for purposes of such Code, to be gain from the sale of property held primarily for sale to customers in the ordinary course of trade or business to the extent of 5 percent of the selling price.\n“(2) For the purpose of computing gain under paragraph (1), expenditures incurred in connection with the sale or exchange of any lot or parcel shall neither be allowed as a deduction in computing taxable income, nor treated as reducing the amount realized on such sale or exchange; but so much of such expenditures as does not exceed the portion of gain deemed under paragraph (1) to be gain from the sale of property held primarily for sale to customers in the ordinary course of trade or business shall be so allowed as a deduction, and the remainder, if any, shall be treated as reducing the amount realized on such sale or exchange.\n“(c) The provisions of subsections (a) and (b) shall apply to taxable years beginning after  December 31, 1957 , and before  January 1, 1984 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 332 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX , §§\u202f1901(b)(3)(K), 1951(c)(2)(A),  90 Stat. 1793 , 1840, related to amortization in excess of depreciation.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'In the case of a sale or exchange of property, directly or indirectly, between related persons, any gain recognized to the transferor shall be treated as ordinary income if such property is, in the hands of the transferee, of a character which is subject to the allowance for depreciation provided in section 167.\nFor purposes of this section, ownership shall be determined in accordance with rules similar to the rules under section 267(c) (other than paragraph (3) thereof).\nFor purposes of this section, a patent application shall be treated as property which, in the hands of the transferee, is of a character which is subject to the allowance for depreciation provided in section 167.\n1997—Subsec. (b)(3).  Pub. L. 105–34  added par. (3).\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f642(a)(1)(A) , substituted “controlled entities” for “80-percent owned entities”.\nSubsec. (c).  Pub. L. 99–514, §\u202f642(a)(1)(B) , (C), in heading, substituted “Controlled entity” for “80-percent owned entity”, in par. (1), in introductory provisions, substituted “controlled entity” for “80-percent owned entity”, in subpar. (A), substituted “more than 50 percent of the value” for “80 percent or more in value”, in subpar. (B), substituted “more than 50 percent” for “80 percent or more”, and added subpar. (C), and amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of subparagraphs (A) and (B) of paragraph (1), the principles of section 318 shall apply, except that—\n“(A) the members of an individual’s family shall consist only of such individual and such individual’s spouse,\n“(B) paragraph (2)(C) of section 318(a) shall be applied without regard to the 50-percent limitation contained therein, and\n“(C) paragraph (3) of section 318(a) shall not apply.”\n1984—Subsec. (b).  Pub. L. 98–369, §\u202f421(b)(6) , redesignated pars. (2) and (3) as (1) and (2), respectively. Former par. (1), defining a husband and wife as “related persons”, was struck out.\nPub. L. 98–369, §\u202f175(b) , amended subsec. (b) generally, adding par. (3).\nSubsec. (d).  Pub. L. 98–369, §\u202f557(a) , added subsec. (d).\nSubsec. (e).  Pub. L. 98–369, §\u202f175(a) , added subsec. (e).\n1983—Subsec. (b).  Pub. L. 97–448, §\u202f301(a) , substituted provisions that “related persons” means (1) a husband and wife, and (2) a person and all entities which are 80-percent owned entities with respect to such person, for provisions which provided that “related persons” meant (1) the taxpayer and the taxpayer’s spouse, (2) the taxpayer and an 80-percent owned entity, or (3) two 80-percent owned entities.\nSubsec. (c)(1).  Pub. L. 97–448, §\u202f301(b) , inserted “,\u2000with respect to any person” after “means” in introductory provisions and substituted “such person” for “the taxpayer” in subpars. (A) and (B).\nSubsec. (c)(2).  Pub. L. 97–448, §\u202f301(b) , struck out “and” at end of subpar. (A), substituted “paragraph (2)(C)” for “paragraphs (2)(C) and (3)(C)” in subpar. (B), and added subpar. (C).\n1980—Subsec. (b)(1).  Pub. L. 96–471  substituted “the taxpayer and the taxpayer’s spouse” for “a husband and wife”.\nSubsec. (b)(2).  Pub. L. 96–471  substituted “the taxpayer and an 80-percent owned entity, or” for “an individual and a corporation 80 percent or more in value of the outstanding stock of which is owned, directly or indirectly, by or for such individual, or”.\nSubsec. (b)(3).  Pub. L. 96–471  substituted “two 80-percent owned entities” for “two or more corporations 80 percent or more in value of the outstanding stock of each of which is owned, directly or indirectly, by or for the same individual”.\nSubsec. (c).  Pub. L. 96–471  substituted provisions defining an “80-percent owned entity” for provisions relating to constructive ownership of stock.\n1978—Subsec. (a).  Pub. L. 95–600  substituted “of a character which is subject to the allowance for depreciation provided in section 167” for “subject to the allowance for depreciation provided in section 167”.\n1976— Pub. L. 94–455  substituted “sale of depreciable property between certain related taxpayers” for “sale of certain property between spouses or between an individual and a controlled corporation” in section catchline.\nSubsec. (a).  Pub. L. 94–455  substituted provisions for transactions between related persons for such transactions (1) between a husband and wife; or (2) between an individual and a corporation more than 80 percent in value of the outstanding stock of which is owned by such individual, his spouse, and his minor children and minor grandchildren and “any gain recognized to the transferee shall be treated as ordinary income if such property is, in the hands of the transferee, subject to the allowance for depreciation provided in section 167” for “any gain recognized to the transferor from the sale or exchange of such property shall be considered as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsec. (b).  Pub. L. 94–455  substituted definition of “related persons” for prior provision making section applicable only to sales or exchanges of depreciable property.\nSubsec. (c).  Pub. L. 94–455  substituted provision respecting constructive ownership of stock for prior provision making section inapplicable with respect to sales or exchanges made on or before  May 3, 1951 .\n1958—Subsec. (c).  Pub. L. 85–866  added subsec. (c).\nAmendment by  Pub. L. 105–34  applicable to taxable years beginning after  Aug. 5, 1997 , see  section 1308(c) of Pub. L. 105–34 , set out as a note under  section 267 of this title .\nPub. L. 99–514, title VI, §\u202f642(c) ,  Oct. 22, 1986 ,  100 Stat. 2284 , as amended by  Pub. L. 100–647, title I, §\u202f1006(i)(3) ,  Nov. 10, 1988 ,  102 Stat. 3411 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 453 and 707 of this title] shall apply to sales after the date of the enactment of this Act [ Oct. 22, 1986 ], in taxable years ending after such date. \n \n “(2)   Transitional rule for binding contracts .— The amendments made by this section shall not apply to sales made after  August 14, 1986 , which are made pursuant to a binding contract in effect on  August 14, 1986 , and at all times thereafter.”\nPub. L. 98–369, div. A, title I, §\u202f175(c) ,  July 18, 1984 ,  98 Stat. 708 , provided that:  “The amendments made by this section [amending this section] shall apply to sales or exchanges after  March 1, 1984 , in taxable years ending after such date.”\nAmendment by  section 421(b)(6) of Pub. L. 98–369  applicable to transfers after  July 18, 1984 , in taxable years ending after such date, subject to election to have amendment apply to transfers after 1983 or to transfers pursuant to existing decrees, see  section 421(d) of Pub. L. 98–369 , set out as an Effective Date note under  section 1041 of this title .\nPub. L. 98–369, div. A, title V, §\u202f557(b) ,  July 18, 1984 ,  98 Stat. 899 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nAmendment by  Pub. L. 97–448  applicable to dispositions made after  Oct. 19, 1980 , in taxable years ending after such date, see  section 311(a) of Pub. L. 97–448 , set out as a note under  section 453 of this title .\nPub. L. 95–600, title VII, §\u202f701(v)(2) ,  Nov. 6, 1978 ,  92 Stat. 2920 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply as if included in the amendment made to section 1239 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] by section 2129(a) of the Tax Reform Act of 1976 [ section 2129(a) of Pub. L. 94–455 ].”\nPub. L. 94–455, title XXI, §\u202f2129(b) ,  Oct. 4, 1976 ,  90 Stat. 1922 , provided that:  “The amendment made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [ Oct. 4, 1976 ]. For purposes of the preceding sentence, a sale or exchange is considered to have occurred on or before such date of enactment if such sale or exchange is made pursuant to a binding contract entered into on or before that date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 332 , related to taxability to employee of termination payments.\nRepeal applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Amounts received by a lessee for the cancellation of a lease, or by a distributor of goods for the cancellation of a distributor’s agreement (if the distributor has a substantial capital investment in the distributorship), shall be considered as amounts received in exchange for such lease or agreement.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The Small Business Investment Act of 1958, referred to in cl. (1), is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , as amended, which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under  section 661 of Title 15  and Tables.\n1976— Pub. L. 94–455  substituted “an ordinary loss” for “a loss from the sale or exchange of property which is not a capital asset”, each time appearing.\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nSection applicable with respect to taxable years beginning after  Sept. 2, 1958 , see  section 57(d) of Pub. L. 85–866 , set out as an Effective Date of 1958 Amendment note under  section 243 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The Small Business Investment Act of 1958, referred to in text, is  Pub. L. 85–699 ,  Aug. 21, 1958 ,  72 Stat. 689 , as amended, which is classified principally to chapter 14B (§\u202f661 et seq.) of Title 15, Commerce and Trade. Section 304 of the Small Business Investment Act of 1958, is classified to  section 684 of Title 15 . For complete classification of this Act to the Code, see Short Title note set out under  section 661 of Title 15  and Tables.\n1976— Pub. L. 94–455  substituted “an ordinary loss” for “a loss from the sale or exchange of property which is not a capital asset”.\n1969—Par. (1).  Pub. L. 91–172  substituted “stock received pursuant to the conversion privilege of convertible debentures” for “convertible debentures (including stock received pursuant to the conversion privilege)”.\nAmendment by  Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  July 11, 1969 , see  section 433(d) of Pub. L. 91–172 , set out as a note under  section 582 of this title .\nSection applicable with respect to taxable years beginning after  Sept. 2, 1958 , see  section 57(d) of Pub. L. 85–866 , set out as an Effective Date of 1958 Amendment note under  section 243 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'In the case of an individual, a loss on section 1244 stock issued to such individual or to a partnership which would (but for this section) be treated as a loss from the sale or exchange of a capital asset shall, to the extent provided in this section, be treated as an ordinary loss.\nFor purposes of paragraph (1)(C), gross receipts from the sales or exchanges of stock or securities shall be taken into account only to the extent of gains therefrom.\nParagraph (1)(C) shall not apply with respect to any corporation if, for the period taken into account for purposes of paragraph (1)(C), the amount of the deductions allowed by this chapter (other than by sections 172, 243, and 245) exceeds the amount of gross income.\nFor purposes of this section, a corporation shall be treated as a small business corporation if the aggregate amount of money and other property received by the corporation for stock, as a contribution to capital, and as paid-in surplus, does not exceed $1,000,000. The determination under the preceding sentence shall be made as of the time of the issuance of the stock in question but shall include amounts received for such stock and for all stock theretofore issued.\nFor purposes of subparagraph (A), the amount taken into account with respect to any property other than money shall be the amount equal to the adjusted basis to the corporation of such property for determining gain, reduced by any liability to which the property was subject or which was assumed by the corporation. The determination under the preceding sentence shall be made as of the time the property was received by the corporation.\nIn computing the amount of the loss on stock for purposes of this section, any increase in the basis of such stock (through contributions to the capital of the corporation, or otherwise) shall be treated as allocable to stock which is not section 1244 stock.\nTo the extent provided in regulations prescribed by the Secretary, stock in a corporation, the basis of which (in the hands of a taxpayer) is determined in whole or in part by reference to the basis in his hands of stock in such corporation which meets the requirements of subsection (c)(1) (other than subparagraph (C) thereof), or which is received in a reorganization described in section 368(a)(1)(F) in exchange for stock which meets such requirements, shall be treated as meeting such requirements. For purposes of paragraphs (1)(C) and (3)(A) of subsection (c), a successor corporation in a reorganization described in section 368(a)(1)(F) shall be treated as the same corporation as its predecessor.\nFor purposes of section 172 (relating to the net operating loss deduction), any amount of loss treated by reason of this section as an ordinary loss shall be treated as attributable to a trade or business of the taxpayer.\nFor purposes of this section, the term “individual” does not include a trust or estate.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.\n2014—Subsec. (c)(2)(C).  Pub. L. 113–295  struck out “244,” after “243,”.\n1984—Subsecs. (c)(1), (d)(2).  Pub. L. 98–369  substituted “stock in a” for “common stock in a”.\n1978—Subsec. (b).  Pub. L. 95–600, §\u202f345(b) , substituted in par. (1) “$50,000” for “$25,000” and in par. (2) “$100,000” for “$50,000”.\nSubsec. (c).  Pub. L. 95–600, §\u202f345(a) , (c), among other changes, substituted provisions permitting a corporation to issue common stock under the provisions of this section without a written plan for provisions requiring that a written plan to issue section 1244 stock must be adopted by the issuing corporation and increased the amount of section 1244 stock that a qualified small business corporation may issue from $500,000 to $1,000,000.\nSubsec. (d)(2).  Pub. L. 95–600, §\u202f345(d) , substituted “subparagraph (C)” for “subparagraph (E)” and “paragraphs (1)(C) and (3)(A)” for “paragraphs (1)(E) and (2)(A)”.\n1976—Subsecs. (a), (b).  Pub. L. 94–455, §\u202f1901(b)(3)(G) , substituted “an ordinary loss” for “a loss from the sale or exchange of an asset which is not a capital asset”.\nSubsec. (c)(1)(E).  Pub. L. 94–455, §\u202f1901(b)(1)(W) , struck out reference to  section 242 of this title .\nSubsec. (d)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(3).  Pub. L. 94–455, §\u202f1901(b)(3)(G) , substituted “an ordinary loss” for “a loss from the sale or exchange of an asset which is not a capital asset”.\nAmendment by  Pub. L. 113–295  not applicable to preferred stock issued before  Oct. 1, 1942  (determined in the same manner as under  section 247 of this title  as in effect before its repeal by  Pub. L. 113–295 ), see  section 221(a)(41)(K) of Pub. L. 113–295 , set out as a note under  section 172 of this title .\nExcept as otherwise provided in  section 221(a) of Pub. L. 113–295 , amendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 98–369, div. A, title IV, §\u202f481(b) ,  July 18, 1984 ,  98 Stat. 847 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to stock issued after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nPub. L. 95–600, title III, §\u202f345(e) ,  Nov. 6, 1978 ,  92 Stat. 2845 , as amended by  Pub. L. 96–222, title I, §\u202f103(a)(9) ,  Apr. 1, 1980 ,  94 Stat. 212 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to stock issued after  November 6, 1978 . \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after  December 31, 1978 . \n \n “(3)   Transitional rule for subsection  (b).— In the case of a taxable year which includes  November 6, 1978 , the amendments made by subsection (b) [amending this section] shall apply with respect to stock issued after such date.”\nAmendment by section 1901(b)(1)(W), (3)(G) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The term “recomputed basis” means, with respect to any property, its adjusted basis recomputed by adding thereto all adjustments reflected in such adjusted basis on account of deductions (whether in respect of the same or other property) allowed or allowable to the taxpayer or to any other person for depreciation or amortization.\nFor purposes of subparagraph (A), if the taxpayer can establish by adequate records or other sufficient evidence that the amount allowed for depreciation or amortization for any period was less than the amount allowable, the amount added for such period shall be the amount allowed.\nAny deduction allowable under section 179, 179B, 179C, 179D, 179E, 181, 190, 193, or 194 shall be treated as if it were a deduction allowable for amortization.\nSubsection (a) shall not apply to a disposition by gift.\nExcept as provided in section 691 (relating to income in respect of a decedent), subsection (a) shall not apply to a transfer at death.\nIf the basis of property in the hands of a transferee is determined by reference to its basis in the hands of the transferor by reason of the application of section 332, 351, 361, 721, or 731, then the amount of gain taken into account by the transferor under subsection (a)(1) shall not exceed the amount of gain recognized to the transferor on the transfer of such property (determined without regard to this section). Except as provided in paragraph (6), this paragraph shall not apply to a disposition to an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter.\nFor purposes of this section, the basis of section 1245 property distributed by a partnership to a partner shall be deemed to be determined by reference to the adjusted basis of such property to the partnership.\nThe second sentence of paragraph (3) shall not apply to a disposition of section 1245 property to an organization described in section 511(a)(2) or 511(b)(2) if, immediately after such disposition, such organization uses such property in an unrelated trade or business (as defined in section 513).\nIf any property with respect to the disposition of which gain is not recognized by reason of subparagraph (A) ceases to be used in an unrelated trade or business of the organization acquiring such property, such organization shall be treated for purposes of this section as having disposed of such property on the date of such cessation.\nIn determining, under subsection (a)(2), the recomputed basis of property with respect to which a deduction under section 194 was allowed for any taxable year, the taxpayer shall not take into account adjustments under section 194 to the extent such adjustments are attributable to the amortizable basis of the taxpayer acquired before the 10th taxable year preceding the taxable year in which gain with respect to the property is recognized.\nIf a taxpayer disposes of more than 1 amortizable section 197 intangible (as defined in section 197(c)) in a transaction or a series of related transactions, all such amortizable 197 intangibles shall be treated as 1 section 1245 property for purposes of this section.\nSubparagraph (A) shall not apply to any amortizable section 197 intangible (as so defined) with respect to which the adjusted basis exceeds the fair market value.\nThe Secretary shall prescribe such regulations as he may deem necessary to provide for adjustments to the basis of property to reflect gain recognized under subsection (a).\nThis section shall apply notwithstanding any other provision of this subtitle.\nThe Revenue Reconciliation Act of 1990, referred to in subsec. (a)(3)(C), is title XI of  Pub. L. 101–508 ,  Nov. 5, 1990 ,  104 Stat. 1388–400 . Section 11801(a)(13) of the Act repealed  section 188 of this title . For complete classification of this Act to the Code, see Short Title note set out under  section 1 of this title  and Tables.\n2018—Subsec. (a)(3)(C).  Pub. L. 115–141  struck out “,\u2000185” after “179E”.\n2014—Subsec. (a)(2)(C), (3)(C).  Pub. L. 113–295  struck out “179A,” after “179,”.\n2006—Subsec. (a)(2)(C), (3)(C).  Pub. L. 109–432  inserted “179E,” after “179D,”.\n2005—Subsec. (a)(2)(C).  Pub. L. 109–135, §\u202f403(e)(2) , (i)(2), inserted “181,” after “179B,” and substituted “193, or 194” for “or 193”.\nPub. L. 109–58, §\u202f1331(b)(2) , inserted “179D,” after “179C,”.\nPub. L. 109–58, §\u202f1323(b)(1) , inserted “179C,” after “179B,”.\nSubsec. (a)(3)(C).  Pub. L. 109–58, §\u202f1331(b)(2) , inserted “179D,” after “179C,”.\nPub. L. 109–58, §\u202f1323(b)(1) , inserted “179C,” after “179B,”.\nSubsec. (b)(3).  Pub. L. 109–135, §\u202f402(a)(6)(B) , substituted “paragraph (6)” for “paragraph (7)”.\nSubsec. (b)(5) to (8).  Pub. L. 109–135, §\u202f402(a)(6)(A) , redesignated pars. (6) to (9) as (5) to (8), respectively, and struck out heading and text of former par. (5). Text read as follows: “Under regulations prescribed by the Secretary, rules consistent with paragraphs (3) and (4) of this subsection shall apply in the case of transactions described in section 1081 (relating to exchanges in obedience to SEC orders).”\nSubsec. (b)(9).  Pub. L. 109–135, §\u202f402(a)(6)(A) , redesignated par. (9) as (8).\nPub. L. 109–58, §\u202f1363(a) , added par. (9).\n2004—Subsec. (a)(2)(C), (3)(C).  Pub. L. 108–357, §\u202f338(b)(5) , inserted “179B,” after “179A,”.\nSubsec. (a)(4).  Pub. L. 108–357, §\u202f886(b)(2) , struck out par. (4) which related to special rule for player contracts if a franchise to conduct any sports enterprise is sold or exchanged.\n1997—Subsec. (a)(2)(C), (3)(C).  Pub. L. 105–34  inserted “179A,” after “179,”.\n1996—Subsec. (a)(3).  Pub. L. 104–188  reenacted heading without change and amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “For purposes of this section, the term ‘section 1245 property’ means any property which is or has been property of a character subject to the allowance for depreciation provided in section 167 (or subject to the allowance of amortization provided in)) and is either—”.\n1995—Subsec. (b)(5).  Pub. L. 104–7  struck out “1071 and” before “1081 transactions” in heading and “section 1071 (relating to gain from sale or exchange to effectuate policies of FCC) or” before “section 1081” in text.\n1993—Subsec. (a)(2)(C).  Pub. L. 103–66, §\u202f13261(f)(4) , substituted “or 193” for “193, or 1253(d)(2) or (3)”.\nSubsec. (a)(3).  Pub. L. 103–66, §\u202f13261(f)(5) , struck out “section 185 or 1253(d)(2) or (3)” after “amortization provided in” in introductory provisions.\n1990—Subsec. (a)(3).  Pub. L. 101–508, §\u202f11704(a)(13) , substituted “or (3))” for “or (3)” in introductory provisions.\nSubsec. (a)(3)(C).  Pub. L. 101–508, §\u202f11801(c)(6)(E) , substituted “188 (as in effect before its repeal by the Revenue Reconciliation Act of 1990),” for “188,”.\nSubsec. (a)(3)(D).  Pub. L. 101–508, §\u202f11813(b)(21) , substituted “section 168(i)(13)” for “section 48(p)”.\nSubsec. (b)(3).  Pub. L. 101–508, §\u202f11801(c)(8)(H) , struck out “371(a), 374(a),” after “332, 351, 361,”.\n1989—Subsec. (a)(2)(C).  Pub. L. 101–239, §\u202f7622(b)(2)(A)[(d)(2)(A)] , substituted “193, or 1253(d)(2) or (3)” for “or 193”.\nSubsec. (a)(3).  Pub. L. 101–239, §\u202f7622(b)(2)(B)[(d)(2)(B)] , substituted “section 185 or 1253(d)(2) or (3)” for “section 185” in introductory provisions.\n1988—Subsec. (a)(3)(F).  Pub. L. 100–647  added subpar. (F).\n1986—Subsec. (a)(1).  Pub. L. 99–514, §\u202f201(d)(11)(A) , struck out “during a taxable year beginning after  December 31, 1962 , or section 1245 recovery property is disposed of after  December 31, 1980 ,” after “if section 1245 property is disposed of”.\nSubsec. (a)(2).  Pub. L. 99–514, §\u202f201(d)(11)(B) , amended par. (2) generally, restating former subpars. (A) to (E) and concluding provisions as subpars. (A) to (C).\nSubsec. (a)(3).  Pub. L. 99–514, §\u202f201(d)(11)(C) , redesignated subpars. (D), (E), and (F) as (C), (D), and (E), respectively, and struck out former subpar. (C) which read as follows: “an elevator or an escalator”.\nSubsec. (a)(5), (6).  Pub. L. 99–514, §\u202f201(d)(11)(D) , struck out par. (5) which defined “section 1245 recovery property” and par. (6) which provided special rule for qualified leased property.\n1985—Subsec. (a)(5)(A) to (C).  Pub. L. 99–121  substituted “19-year real property” for “18-year real property”.\n1984—Subsec. (a)(5)(A) to (C).  Pub. L. 98–369, §\u202f111(e)(5) , substituted “18-year real property and low-income housing” for “15-year real property”.\nSubsec. (d)(5)(D).  Pub. L. 98–369, §\u202f111(e)(10) , substituted “low-income housing (within the meaning of section 168(c)(2)(F))” for “15-year real property which is described in clause (i), (ii), (iii), or (iv) of section 1250(a)(1)(B)”.\n1983—Subsec. (a)(3)(F).  Pub. L. 97–448  inserted “(not including a building or its structural components)” after “a storage facility”.\n1981—Subsec. (a)(1).  Pub. L. 97–34, §\u202f204(a) , inserted reference to section 1245 recovery property disposed of after  Dec. 31, 1980 , in introductory provisions.\nSubsec. (a)(2).  Pub. L. 97–34 , §§\u202f202(b)(1)–(3), 204(b), inserted reference to section 179 in subpar. (D), added subpar. (E), and, in provisions following subpar. (E), and inserted references to section 179 in three places.  Pub. L. 97–34, §\u202f212(d)(2)(F) , in provisions following subpar. (E), substituted “191 (as in effect before its repeal by the Economic Recovery Tax Act of 1981)” for “191” in two places.\nSubsec. (a)(3)(D).  Pub. L. 97–34, §\u202f202(b)(3) , inserted reference to section 179.\nSubsec. (a)(3)(E), (F).  Pub. L. 97–34, §\u202f201(b) , added subpars. (E) and (F).\nSubsec. (a)(5).  Pub. L. 97–34, §\u202f204(c) , added par. (5).\nSubsec. (a)(6).  Pub. L. 97–34, §\u202f204(d) , added par. (6).\n1980—Subsec. (a)(2).  Pub. L. 96–451, §\u202f301(c)(1)(A) , (B), inserted references to section 194 in subpar. (D) and text following subpar. (D).\nPub. L. 96–223, §\u202f251(a)(2)(C)(i) –(iii), inserted references to section 193 in subpar. (D) and text following subpar. (D).\nSubsec. (a)(3)(D).  Pub. L. 96–451, §\u202f301(c)(1)(B) , inserted reference to section 194.\nPub. L. 96–223, §\u202f251(a)(2)(C)(i) , inserted reference to section 193.\nSubsec. (b)(8).  Pub. L. 96–451, §\u202f301(c)(1)(C) , added par. (8).\n1978—Subsec. (a)(2).  Pub. L. 95–600, §\u202f701(f)(3)(A) , struck out from the listed sections in subpar. (D) reference to 191 and inserted “(in the case of property described in paragraph (3)(C))” before “191” in two places in next to last sentence.\nSubsec. (a)(3)(D).  Pub. L. 95–600, §\u202f701(f)(3)(B) , struck out reference to section 191.\nSubsec. (a)(4)(B).  Pub. L. 95–600, §\u202f701(w)(2) , inserted “attributable to periods after  December 31, 1975 ,” after “for the depreciation”, “incurred after  December 31, 1975 ,” after “allowable for losses”, and “described in clause (i)” after “of the amounts”.\nSubsec. (a)(4)(C).  Pub. L. 95–600, §\u202f701(w)(1) , struck out provisions relating to the aggregate of the amounts treated as ordinary income.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsec. (a)(2)(D).  Pub. L. 94–455 , §§\u202f2122(b)(3)(B), 2124(a)(2), inserted reference to sections 190 and 191.\nSubsec. (a)(2) foll. (D).  Pub. L. 94–455 , §§\u202f1901(b)(11)(D), 1951(c)(2)(C), 2122(b)(3)(A), (C), 2124(a)(2), in text following subpar. (D): struck out reference to section 187 in two places; inserted “(as in effect before its repeal by the Tax Reform Act of 1976),” after “section 168,” in two places; inserted provision for treatment for purposes of this section of any deduction allowable under section 190 as if it were a deduction allowable for amortization; and inserted reference to section 191 in two places, respectively.\nSubsec. (a)(3)(D).  Pub. L. 94–455 , §§\u202f2122(b)(3)(A), 2124(a)(2), inserted reference to sections 190 and 191.\nSubsec. (a)(4).  Pub. L. 94–455, §\u202f212(b)(1) , added par. (4).\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b)(7)(B).  Pub. L. 94–455, §\u202f1901(a)(140) , struck out “such organization acquiring such property,” before “such organization”.\nSubsec. (c).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1975—Subsec. (b)(3), (7).  Pub. L. 94–81, §\u202f2(a)(1) , (2), inserted reference to par. (7) in par. (3), and added par. (7).\n1971—Subsec. (a)(2).  Pub. L. 92–178, §\u202f303(c)(1) , inserted reference to section 188 in two places in text following subpar. (D).\nSubsec. (a)(3)(B)(ii), (iii).  Pub. L. 92–178, §\u202f104(a)(2) , substituted “research facility” for “research or storage facility” in cl. (ii) and added cl. (iii).\nSubsec. (a)(3)(D).  Pub. L. 92–178, §\u202f303(c)(2) , inserted reference to section 188.\n1969—Subsec. (a)(2).  Pub. L. 91–172 , §§\u202f212(a)(1), 704(b)(4)(A), (B), added subpar. (C) and inserted references to sections 169, 185, and 187, and added subpar. (D).\nSubsec. (a)(3).  Pub. L. 91–172 , §§\u202f212(a)(2), 704(b)(4)(C)–(F), struck out “(other than livestock)” after “means any property” and substituted “section 167 (or subject to the allowance of amortization provided in section 185)” for “section 167” and added subpar. (D).\n1964—Subsec. (a)(2), (3)(C).  Pub. L. 88–272  redefined “recomputed basis” with respect to elevators or escalators in par. (2), and inserted subpar. (C) in par. (3).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 109–432  applicable to costs paid or incurred after  Dec. 20, 2006 , see  section 404(c) of Pub. L. 109–432 , set out as an Effective Date note under  section 179E of this title .\nAmendment by  section 402(a)(6) of Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79  et seq.) before its repeal, see  section 402(m) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendments by section 403(e)(2), (i)(2) of  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nAmendment by  section 1323(b)(1) of Pub. L. 109–58  applicable to properties placed in service after  Aug. 8, 2005 , see  section 1323(c) of Pub. L. 109–58 , set out as an Effective Date note under  section 179C of this title .\nAmendment by  section 1331(b)(2) of Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , see  section 1331(d) of Pub. L. 109–58 , set out as an Effective Date note under  section 179D of this title .\nPub. L. 109–58, title XIII, §\u202f1363(b) ,  Aug. 8, 2005 ,  119 Stat. 1060 , provided that:  “The amendment made by this section [amending this section] shall apply to dispositions of property after the date of the enactment of this Act [ Aug. 8, 2005 ].”\nAmendment by  section 338(b)(5) of Pub. L. 108–357  applicable to expenses paid or incurred after  Dec. 31, 2002 , in taxable years ending after such date, see  section 338(c) of Pub. L. 108–357 , set out as an Effective Date note under  section 179B of this title .\nAmendment by  section 886(b)(2) of Pub. L. 108–357  applicable to franchises acquired after  Oct. 22, 2004 , see  section 886(c)(2) of Pub. L. 108–357 , set out as a note under  section 197 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the amendments made by section 1913 of the Energy Policy Act of 1992,  Pub. L. 102–486 , see  section 1604(a)(4) of Pub. L. 105–34 , set out as a note under  section 263 of this title .\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  Pub. L. 104–7  applicable to sales and exchanges on or after  January 17, 1995 , and to sales and exchanges before such date if FCC tax certificate with respect to such sale or exchange was issued on or after such date, but not applicable with respect to certain binding contracts, see  section 2(d) of Pub. L. 104–7 , set out as an Effective Date of Repeal note under  section 1071 of this title .\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nAmendment by  section 11813(b)(21) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 101–239  applicable to transfers after  Oct. 2, 1989 , but not applicable to any transfer pursuant to a written binding contract in effect on  Oct. 2, 1989 , and at all times thereafter before the transfer, see section 7622(c)[(e)] of  Pub. L. 101–239 , set out as a note under  section 167 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to property placed in service after  Dec. 31, 1986 , in taxable years ending after such date, with exceptions, see sections 203 and 204 of  Pub. L. 99–514 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 99–514  not applicable to any property placed in service before  Jan. 1, 1994 , if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of  Pub. L. 99–514 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 99–121  applicable with respect to property placed in service by the taxpayer after  May 8, 1985 , with specified exceptions, see  section 105(b) of Pub. L. 99–121 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 98–369  applicable with respect to property placed in service by the taxpayer after  Mar. 15, 1984 , subject to certain exceptions, see  section 111(g) of Pub. L. 98–369 , set out as a note under  section 168 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by sections 201(b), 202(b), and 204(a)–(d) of  Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 212(d)(2)(F) of Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after such date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 96–451  applicable with respect to additions to capital account made after  Dec. 31, 1979 , see  section 301(d) of Pub. L. 96–451 , set out as an Effective Date note under  section 194 of this title .\nAmendment by  Pub. L. 96–223  applicable to taxable years beginning after  Dec. 31, 1979 , see  section 251(b) of Pub. L. 96–223 , set out as an Effective Date note under  section 193 of this title .\nAmendment by section 701(f)(3)(A), (B) of  Pub. L. 95–600  effective as if included within the amendment of subsec. (a)(2), (3)(D) by  section 2124 of Pub. L. 94–455 , see  section 701(f)(8) of Pub. L. 95–600 , set out as an Effective and Termination Dates of 1978 Amendments note under  section 167 of this title .\nPub. L. 95–600, title VII, §\u202f701(w)(3) ,  Nov. 6, 1978 ,  92 Stat. 2920 , provided that:  “The amendments made by this subsection [amending this section] shall apply to transfers of player contracts in connection with any sale or exchange of a franchise after  December 31, 1975 .”\nPub. L. 94–455, title II, §\u202f212(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1547 , provided that:  “The amendment made by this subsection [amending this section] applies to transfers of player contracts in connection with any sale or exchange of a franchise after  December 31, 1975 .”\nAmendment by section 1901(a)(140), (b)(3)(K), (11)(D) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(c)(2)(C) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nAmendment by  section 2122(b)(3) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 2122(c) of Pub. L. 94–455 , as amended, set out as an Effective Date note under  section 190 of this title .\nAmendment by  section 2124(a)(2) of Pub. L. 94–455  applicable with respect to additions to capital account made after  June 14, 1976  and before  June 15, 1981 , see  section 2124(a)(4) of Pub. L. 94–455 , set out as an Effective Date note under  section 642 of this title .\nAmendment by  Pub. L. 94–81  applicable to dispositions after  Dec. 31, 1969 , in taxable years ending after such date, with special provision for an election in the case of dispositions occurring before  Aug. 9, 1975 , see  section 2(c) of Pub. L. 94–81 , set out as a note under  section 1250 of this title .\nAmendment by  section 104(a)(2) of Pub. L. 92–178  applicable to property described in  section 50 of this title  relating to restoration of credit, see  section 104(h) of Pub. L. 92–178 , set out as a note under  section 48 of this title .\nAmendment by section 303(c)(1), (2) of  Pub. L. 92–178  applicable to taxable years ending after  Dec. 31, 1971 , see  section 303(d) of Pub. L. 92–178 , set out as a note under  section 642 of this title .\nPub. L. 91–172, title II, §\u202f212(a)(3) ,  Dec. 30, 1969 ,  83 Stat. 571 , provided that:  “The amendments made by paragraphs (1) and (2) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1969 .”\nAmendment by  section 704(b)(4) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1968 , see  section 704(c) of Pub. L. 91–172 , set out as a note under  section 169 of this title .\nAmendment by  Pub. L. 88–272  applicable with respect to dispositions after  Dec. 31, 1963 , in taxable years ending after such date, see  section 203(f)(3) of Pub. L. 88–272 , set out as a note under  section 48 of this title .\nPub. L. 87–834, §\u202f13(g) ,  Oct. 16, 1962 ,  76 Stat. 1035 , provided that:  “The amendments made by this section [enacting this section and amending sections 167, 170, 301, 312, 341, 453, 613, and 751 of this title] (other than the amendments made by subsection (c) [amending sections 167, 179, and 642 of this title]) shall apply to taxable years beginning after  December 31, 1962 . The amendments made by subsection (c) shall apply to taxable years beginning after  December 31, 1961 , and ending after the date of the enactment of this Act [ Oct. 16, 1962 ].”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by sections 11801 and 11813 of  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Section 1246, added  Pub. L. 87–834, §\u202f14(a)(1) ,  Oct. 16, 1962 ,  76 Stat. 1036 ; amended  Pub. L. 94–455, title XIV, §\u202f1402(b)(1)(W) , (2), title XIX, §§\u202f1901(a)(141), (b)(3)(I), (32)(B)(ii), 1906(b)(13)(A), title XX, §\u202f2005(a)(5),  Oct. 4, 1976 ,  90 Stat. 1732 , 1787, 1793, 1800, 1834, 1877;  Pub. L. 96–223, title IV, §\u202f401(a) ,  Apr. 2, 1980 ,  94 Stat. 299 ;  Pub. L. 97–34, title VIII, §\u202f832(a) ,  Aug. 13, 1981 ,  95 Stat. 355 ;  Pub. L. 98–369, div. A, title I, §\u202f134(a) , title X, §\u202f1001(b)(20), (e),  July 18, 1984 ,  98 Stat. 668 , 1012;  Pub. L. 99–514, title XII, §\u202f1235(b) ,  Oct. 22, 1986 ,  100 Stat. 2574 ;  Pub. L. 100–647, title I , §§\u202f1012(p)(21), 1018( o )(2),  Nov. 10, 1988 ,  102 Stat. 3519 , 3585;  Pub. L. 107–16, title V, §\u202f542(e)(5)(A) ,  June 7, 2001 ,  115 Stat. 85 ;  Pub. L. 111–312, title III, §\u202f301(a) ,  Dec. 17, 2010 ,  124 Stat. 3300 , related to treatment of gain on foreign investment company stock.\nSection 1247, added  Pub. L. 87–834, §\u202f14(a)(1) ,  Oct. 16, 1962 ,  76 Stat. 1037 ; amended  Pub. L. 94–455, title XIV, §\u202f1402(b)(1)(X) , (2), title XIX, §§\u202f1901(b)(33)(P), (R), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1732 , 1802, 1834;  Pub. L. 98–369, div. A, title X, §\u202f1001(b)(21) , (e),  July 18, 1984 ,  98 Stat. 1012 , related to election by foreign investment companies to distribute income currently.\nRepeal applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Except as provided in section 312(k)(4), for purposes of this section, the earnings and profits of any foreign corporation for any taxable year shall be determined according to rules substantially similar to those applicable to domestic corporations, under regulations prescribed by the Secretary.\nEarnings and profits of the foreign corporation attributable to any amount previously included in the gross income of such person under section 951, with respect to the stock sold or exchanged, but only to the extent the inclusion of such amount did not result in an exclusion of an amount from gross income under section 959.\nEarnings and profits of a foreign corporation which were accumulated during any taxable year beginning before  January 1, 1976 , while such corporation was a less developed country corporation under section 902(d) as in effect before the enactment of the Tax Reduction Act of 1975.\nEarnings and profits of the foreign corporation attributable to any amount previously included in the gross income of such person under section 1293 with respect to the stock sold or exchanged, but only to the extent the inclusion of such amount did not result in an exclusion of an amount under section 1293(c).\nTo the extent that earnings and profits are taken into account under this subsection, they shall be excluded and not taken into account for purposes of subsection (e).\nUnless the taxpayer establishes the amount of the earnings and profits of the foreign corporation to be taken into account under subsection (a) or (f), all gain from the sale or exchange shall be considered a dividend under subsection (a) or (f), and unless the taxpayer establishes the amount of foreign taxes to be taken into account under subsection (b), the limitation of such subsection shall not apply.\nFor purposes of this subsection, the term “10-percent corporate shareholder” means any domestic corporation which, as of the day before the exchange referred to in paragraph (1), satisfies the stock ownership requirements of subsection (a)(2) with respect to the foreign corporation.\nIn the case of the sale or exchange by a domestic corporation of stock in a foreign corporation held for 1 year or more, any amount received by the domestic corporation which is treated as a dividend by reason of this section shall be treated as a dividend for purposes of applying section 245A.\nFor provision excluding amounts previously taxed under this section from gross income when subsequently distributed, see section 959(e).\nSection 902(d) as in effect before the enactment of the Tax Reduction Act of 1975, referred to in subsec. (d)(3), means  section 902(d) of this title  as in effect before the amendment made by  Pub. L. 94–12, title VI, §\u202f602(c)(6) ,  Mar. 29, 1975 ,  89 Stat. 59 . Section 902 was subsequently amended generally by  Pub. L. 99–514, title XII, §\u202f1202(a) ,  Oct. 22, 1986 ,  100 Stat. 2528 , and repealed by  Pub. L. 115–97, title I, §\u202f14301(a) ,  Dec. 22, 2017 ,  131 Stat. 2221 .\nThe FSC Repeal and Extraterritorial Income Exclusion Act of 2000, referred to in subsec. (d)(5), is  Pub. L. 106–519 ,  Nov. 15, 2000 ,  114 Stat. 2423 . For complete classification of this Act to the Code, see Short Title of 2000 Amendments note set out under  section 1 of this title  and Tables.\n2017—Subsecs. (j), (k).  Pub. L. 115–97  added subsec. (j) and redesignated former subsec. (j) as (k).\n2007—Subsec. (d)(5).  Pub. L. 110–172  inserted “(as defined in section 922)” after “a FSC” in introductory provisions and inserted second sentence in concluding provisions.\n2004—Subsec. (d)(5) to (7).  Pub. L. 108–357  redesignated pars. (6) and (7) as (5) and (6), respectively, and struck out heading and text of former par. (5). Text read as follows: “If the United States person whose stock is sold or exchanged was a qualified shareholder (as defined in section 1247(c)) of a foreign corporation which was a foreign investment company (as described in section 1246(b)(1)), the earnings and profits of the foreign corporation for taxable years in which such person was a qualified shareholder.”\n1996—Subsec. (a).  Pub. L. 104–188, §\u202f1702(g)(1)(A)(ii) , in closing provisions inserted at end “For purposes of this section, a United States person shall be treated as having sold or exchanged any stock if, under any provision of this subtitle, such person is treated as realizing gain from the sale or exchange of such stock.”\nSubsec. (a)(1).  Pub. L. 104–188, §\u202f1702(g)(1)(A)(i) , struck out “,\u2000or if a United States person receives a distribution from a foreign corporation which, under section 302 or 331, is treated as an exchange of stock” after “in a foreign corporation”.\nSubsec. (e)(1).  Pub. L. 104–188, §\u202f1702(g)(1)(B) , struck out “,\u2000or receives a distribution from a domestic corporation which, under section 302 or 331, is treated as an exchange of stock” after “of a domestic corporation”.\nSubsec. (f)(1)(B).  Pub. L. 104–188, §\u202f1702(g)(1)(C) , substituted “355(c)(1), or 361(c)(1)” for “or 361(c)(1)”.\nSubsec. (i)(1).  Pub. L. 104–188, §\u202f1702(g)(1)(D) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If any shareholder of a 10-percent corporate shareholder of a foreign corporation exchanges stock of the 10-percent corporate shareholder for stock of the foreign corporation, for purposes of this section, the stock of the foreign corporation received in such exchange shall be treated as if it had been—\n“(A) issued to the 10-percent corporate shareholder, and\n“(B) then distributed by the 10-percent corporate shareholder to such shareholder in redemption or liquidation (whichever is appropriate).”\n1988—Subsec. (d)(2).  Pub. L. 100–647, §\u202f1006(e)(14)(A) , struck out par. (2) which related to gain realized from sale or exchange of property in pursuance of plan of complete liquidation.\nSubsec. (d)(7).  Pub. L. 100–647, §\u202f1012(p)(19) , added par. (7).\nSubsec. (f).  Pub. L. 100–647, §\u202f1006(e)(14)(E) , substituted “nonrecognition” for “section 311, 336, or 337” in heading.\nSubsec. (f)(1).  Pub. L. 100–647, §\u202f1006(e)(14)(C) , struck out “,\u2000sale, or exchange” after “(h), a distribution” in last sentence.\nSubsec. (f)(1)(B).  Pub. L. 100–647, §\u202f1006(e)(14)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “such domestic corporation distributes, sells, or exchanges stock of such foreign corporation in a transaction to which section 311, 336, or 337 applies,”.\nSubsec. (f)(3), (4).  Pub. L. 100–647, §\u202f1006(e)(14)(D) , redesignated par. (4) as (3) and struck out former par. (3) which related to nonapplication of paragraph (1) in certain cases.\n1986—Subsec. (d)(6).  Pub. L. 99–514, §\u202f1876(a)(2) , amended par. (6) generally. Prior to amendment, par. (6) read as follows: “Earnings and profits of the foreign corporation attributable to foreign trade income (within the meaning of section 923(b)) of a FSC.”\nSubsec. (e).  Pub. L. 99–514, §\u202f631(d)(2)(A) , substituted “Except as provided in regulations” for “Under regulations”.\nSubsec. (f).  Pub. L. 99–514, §\u202f631(d)(2)(B) , inserted “Except as provided in regulations prescribed by the Secretary—” after heading.\nSubsec. (g).  Pub. L. 99–514, §\u202f1875(g)(1) , inserted “or” at end of par. (1), redesignated par. (3) as (2), and struck out former par. (2) which read as follows: “gain realized on exchanges to which section 356 (relating to receipt of additional consideration in certain reorganizations) applies; or”.\nSubsec. (i)(1)(B).  Pub. L. 99–514, §\u202f1810(i)(1) , substituted “in redemption or liquidation (whichever is appropriate)” for “in redemption of his stock”.\n1984—Subsec. (b).  Pub. L. 98–369, §\u202f1001(b)(22) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (c)(2)(D).  Pub. L. 98–369, §\u202f133(c) , substituted “section 958(a)” for “section 958(a)(2)”.\nSubsec. (d)(6).  Pub. L. 98–369, §\u202f801(d)(6) , added par. (6).\nSubsec. (g)(3)(C).  Pub. L. 98–369, §\u202f1001(b)(22) , (e), substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nSubsec. (i).  Pub. L. 98–369, §\u202f133(a) , added subsec. (i).\nSubsec. (j).  Pub. L. 98–369, §\u202f133(b)(2) , added subsec. (j).\n1983—Subsec. (c)(1).  Pub. L. 97–448  substituted “section 312(k)(4)” for “section 312(k)(3)”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(Y) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (c)(1).  Pub. L. 94–455 , §§\u202f1901(b)(32)(B)(iii), 1906(b)(13(A), substituted “section 312(k)” for “section 312(m)(3)”, and struck out “or his delegate” after “Secretary”.\nSubsec. (c)(2)(A).  Pub. L. 94–455, §\u202f1042(c)(3)(A) , substituted “subsection (a) or (f) applies to a sale, exchange, or distribution” for “subsection (a) applies to a sale or exchange”.\nSubsec. (c)(2)(C).  Pub. L. 94–455, §\u202f1042(b) , inserted “(or on the date of any sale or exchange of the stock of such other foreign corporation occurring during the 5–year period ending on the date of the sale or exchange of the stock of such foreign corporation, to the extent not otherwise taken into account under this section but not in excess of the fair market value of the stock of such other foreign corporation sold or exchanged over the basis of such stock (for determining gain) in the hands of the transferor)”. §\u202f1906(b)(13)(A), struck out “or his delegate” after “Secretary”.\nSubsec. (d)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(3).  Pub. L. 94–455, §\u202f1022(a) , substituted provisions of par. (3) relating to “Less developed country corporations under prior law” and reading “Earnings and profits of a foreign corporation which were accumulated during any taxable year beginning before  January 1, 1976 , while such corporation was a less developed country corporation under section 902(d) as in effect before the enactment of the Tax Reduction Act of 1975” for prior par. (3) relating to “Less developed country corporations” and reading “Earnings and profits accumulated by a foreign corporation while it was a less developed country corporation (as defined in section 902(d)), if the stock sold or exchanged was owned for a continuous period of at least 10 years, ending with the date of the sale or exchange, by the United States person who sold or exchanged such stock. In the case of stock sold or exchanged by a corporation, if United States persons who are individuals, estates, or trusts (each of whom owned within the meaning of section 958(a), or were considered as owning by applying the rules of ownership of section 958(b), 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such corporation) owned, or were considered as owning, at any time during the 10-year period ending on the date of the sale or exchange more than 50 percent of the total combined voting power of all classes of stock entitled to vote such corporation, this paragraph shall apply only if such United States persons owned, or were considered as owning, at all times during the remainder of such 10-year period more than 50 percent of the total combined voting power of all classes of stock entitled to vote of such corporation. For purposes of this paragraph, stock owned by a United States person who is an individual, estate, or trust which was acquired by reason of the death of the predecessor in interest of such United States person shall be considered as owned by such United States person during the period such stock was owned by such predecessor in interest, and during the period such stock was owned by any other predecessor in interest if between such United States person and such other predecessor in interest there was no transfer other than by reason of the death of an individual.”\nSubsec. (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1042(c)(1) , added subsec. (f). Former subsec. (f) redesignated (g).\nSubsec. (g).  Pub. L. 94–455 , §§\u202f1042(c)(1), (3)(B), 1901(b)(3)(H), redesignated former subsec. (f) as (g); inserted “(other than an amount treated as a dividend under subsection (f))” in par. (3)(A); and substituted in par. (3)(B) “ordinary income” for “gain from the sale of an asset which is not a capital asset”, respectively. Former subsec. (g) redesignated (h).\nSubsec. (g)(3)(C).  Pub. L. 94–455, §\u202f1402(b)(2) , provided that “9 months” would be changed to “1 year”.\nPub. L. 94–455, §\u202f1402(b)(1)(Y) , provided that “6 months” would be changed to “9 months” for taxable years beginning in 1977.\nSubsec. (h).  Pub. L. 94–455, §\u202f1042(c)(1) , (3)(C), redesignated former subsec. (g) as (h) and inserted reference to subsec. (f) in two places.\n1969—Subsec. (c)(1).  Pub. L. 91–172  inserted reference to the exception provided for in section 312(m)(3).\n1966—Subsec. (d)(4).  Pub. L. 89–809  provided that for taxable years beginning after  December 31, 1966 , the earnings and profits of the foreign corporation, for purposes of this section, is not to include income effectively connected with the conduct of a trade or business within the United States, and inserted provision that the exclusion does not apply to income which is exempt from tax or subject to a reduced rate of tax pursuant to a treaty.\nPub. L. 115–97, title I, §\u202f14102(a)(2) ,  Dec. 22, 2017 ,  131 Stat. 2192 , provided that:  “The amendments made by this subsection [amending this section] shall apply to sales or exchanges after  December 31, 2017 .”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 631(d)(2) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nPub. L. 99–514, title XVIII, §\u202f1875(g)(2) ,  Oct. 22, 1986 ,  100 Stat. 2897 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to exchanges after  March 1, 1986 .”\nAmendment by sections 1810(i)(1) and 1876(a)(2) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f133(d)(1) ,  July 18, 1984 ,  98 Stat. 668 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to exchanges after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date.”\nAmendment by section 133(b)(2), (c) of  Pub. L. 98–369  applicable with respect to transactions to which subsec. (a) or (f) of this section applies occurring after  July 18, 1984 , with election of earlier date for certain transactions, see section 133(d)(2), (3) of  Pub. L. 98–369 , set out as a note under  section 959 of this title .\nAmendment by  section 801(d)(6) of Pub. L. 98–369  applicable to transactions after  Dec. 31, 1984 , in taxable years ending after such date, see  section 805(a)(1) of Pub. L. 98–369 , as amended, set out as a note under  section 245 of this title .\nAmendment by  section 1001(b)(22) of Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 94–455, title X, §\u202f1022(b) ,  Oct. 4, 1976 ,  90 Stat. 1619 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1975 .”\nFor effective date of amendment by  section 1042 of Pub. L. 94–455 , see  section 1042(e) of Pub. L. 94–455 , set out as a note under  section 367 of this title .\nPub. L. 94–455, title XIV, §\u202f1402(b)(1) ,  Oct. 4, 1976 ,  90 Stat. 1731 , provided that the amendment made by that section is effective with respect to taxable years beginning in 1977.\nPub. L. 94–455, title XIV, §\u202f1402(b)(2) ,  Oct. 4, 1976 ,  90 Stat. 1732 , provided that the amendment made by that section is effective with respect to taxable years beginning after  Dec. 31, 1977 .\nAmendment by section 1901(b)(3)(H), (32)(B)(iii) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to sales or exchanges occurring after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nPub. L. 87–834, §\u202f15(c) ,  Oct. 16, 1962 ,  76 Stat. 1044 , provided that:  “The amendments made by this section [enacting this section] shall apply with respect to sales or exchanges occurring after  December 31, 1962 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1875(g)(3) ,  Oct. 22, 1986 ,  100 Stat. 2897 , provided that:  \n “An exchange shall be treated as occurring on or before  March 1, 1986 , if— \n “(A)  on or before such date, the taxpayer adopts a plan of reorganization to which section 356 [of the Internal Revenue Code of 1986] applies, and \n \n “(B)  such plan or reorganization is implemented and distributions pursuant to such plan are completed on or before the date of enactment of this Act [ Oct. 22, 1986 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Gain from the sale or exchange of a patent, an invention, model, or design (whether or not patented), a copyright, a secret formula or process, or any other similar property right to any foreign corporation by any United States person (as defined in section 7701(a)(30)) which controls such foreign corporation shall, if such gain would (but for the provisions of this subsection) be gain from the sale or exchange of a capital asset or of property described in section 1231, be considered as ordinary income.\nFor purposes of subsection (a), control means, with respect to any foreign corporation, the ownership, directly or indirectly, of stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote. For purposes of this subsection, the rules for determining ownership of stock prescribed by section 958 shall apply.\n2014—Subsec. (a).  Pub. L. 113–295  struck out “after  December 31, 1962 ,” before “of a patent”.\n1976—Subsec. (a).  Pub. L. 94–455  substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\n1966—Subsec. (a).  Pub. L. 89–809  substituted “Gain” for “Except as provided in subsection (c), gain”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nPub. L. 87–834, §\u202f16(c) ,  Oct. 16, 1962 ,  76 Stat. 1045 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1962 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'For purposes of subparagraph (A), the term “applicable percentage” means 100 percent minus 1 percentage point for each full month the property was held after the date on which the property was held for 20 full months.\nFor purposes of this subsection, any reference to section 167(k) or 167(j)(2)(B) shall be treated as a reference to such section as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.\nFor reduction in the case of corporations on capital gain treatment under this section, see section 291(a)(1).\nThe term “additional depreciation” means, in the case of any property, the depreciation adjustments in respect of such property; except that, in the case of property held more than one year, it means such adjustments only to the extent that they exceed the amount of the depreciation adjustments which would have resulted if such adjustments had been determined for each taxable year under the straight line method of adjustment.\nThe term “depreciation adjustments” means, in respect of any property, all adjustments attributable to periods after  December 31, 1963 , reflected in the adjusted basis of such property on account of deductions (whether in respect of the same or other property) allowed or allowable to the taxpayer or to any other person for exhaustion, wear and tear, obsolescence, or amortization (other than amortization under section 168 (as in effect before its repeal by the Tax Reform Act of 1976), 169, 185 (as in effect before its repeal by the Tax Reform Act of 1986), 188 (as in effect before its repeal by the Revenue Reconciliation Act of 1990), 190, or 193). For purposes of the preceding sentence, if the taxpayer can establish by adequate records or other sufficient evidence that the amount allowed as a deduction for any period was less than the amount allowable, the amount taken into account for such period shall be the amount allowed.\nThe term “additional depreciation” also means, in the case of section 1250 property with respect to which a depreciation or amortization deduction for rehabilitation expenditures was allowed under section 167(k) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) or 191 (as in effect before its repeal by the Economic Recovery Tax Act of 1981), the depreciation or amortization adjustments allowed under such section to the extent attributable to such property, except that, in the case of such property held for more than one year after the rehabilitation expenditures so allowed were incurred, it means such adjustments only to the extent that they exceed the amount of the depreciation adjustments which would have resulted if such adjustments had been determined under the straight line method of adjustment without regard to the useful life permitted under section 167(k) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) or 191 (as in effect before its repeal by the Economic Recovery Tax Act of 1981).\nFor purposes of this section, the term “section 1250 property” means any real property (other than section 1245 property, as defined in section 1245(a)(3)) which is or has been property of a character subject to the allowance for depreciation provided in section 167.\nSubsection (a) shall not apply to a disposition by gift.\nExcept as provided in section 691 (relating to income in respect of a decedent), subsection (a) shall not apply to a transfer at death.\nIf the basis of property in the hands of a transferee is determined by reference to its basis in the hands of the transferor by reason of the application of section 332, 351, 361, 721, or 731, then the amount of gain taken into account by the transferor under subsection (a) shall not exceed the amount of gain recognized to the transferor on the transfer of such property (determined without regard to this section). Except as provided in paragraph (6), this paragraph shall not apply to a disposition to an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter.\nWith respect to any transaction, the increase provided by this subparagraph is the amount equal to the fair market value of any stock purchased in a corporation which (but for this paragraph) would result in nonrecognition of gain under section 1033(a)(2)(A).\nIn the case of any transaction described in section 1031 or 1033, the additional depreciation in respect of the section 1250 property acquired which is attributable to the section 1250 property disposed of shall be an amount equal to the amount of the gain which was not taken into account under subsection (a) by reason of the application of this paragraph.\nFor purposes of this section, the basis of section 1250 property distributed by a partnership to a partner shall be deemed to be determined by reference to the adjusted basis of such property to the partnership.\nThe second sentence of paragraph (3) shall not apply to a disposition of section 1250 property to an organization described in section 511(a)(2) or 511(b)(2) if, immediately after such disposition, such organization uses such property in an unrelated trade or business (as defined in section 513).\nIf any property with respect to the disposition of which gain is not recognized by reason of subparagraph (A) ceases to be used in an unrelated trade or business of the organization acquiring such property, such organization shall be treated for purposes of this section as having disposed of such property on the date of such cessation.\nIf any section 1250 property is disposed of by the taxpayer pursuant to a bid for such property at foreclosure or by operation of an agreement or of process of law after there was a default on indebtedness which such property secured, the applicable percentage referred to in paragraph (1)(B), (2)(B), or (3)(B) of subsection (a), as the case may be, shall be determined as if the taxpayer ceased to hold such property on the date of the beginning of the proceedings pursuant to which the disposition occurred, or, in the event there are no proceedings, such percentage shall be determined as if the taxpayer ceased to hold such property on the date, determined under regulations prescribed by the Secretary, on which such operation of an agreement or process of law, pursuant to which the disposition occurred, began.\nIf the basis of property acquired in a transaction described in paragraph (1), (2), or (3) of subsection (d) is determined by reference to its basis in the hands of the transferor, then the holding period of the property in the hands of the transferee shall include the holding period of the property in the hands of the transferor.\nIf, in the case of a disposition of section 1250 property, the property is treated as consisting of more than one element by reason of paragraph (3), then the amount taken into account under subsection (a) in respect of such section 1250 property as ordinary income shall be the sum of the amounts determined under paragraph (2).\nThe term “improvement” means, in the case of any section 1250 property, any addition to capital account for such property after the initial acquisition or after completion of the property.\nThe Secretary shall prescribe such regulations as he may deem necessary to provide for adjustments to the basis of property to reflect gain recognized under subsection (a).\nThis section shall apply notwithstanding any other provision of this subtitle.\nSections 221 and 236 of the National Housing Act, referred to in subsec. (a)(1)(B)(i), (2)(B)(ii), are classified to sections 1715 l  and 1715z–1, respectively, of Title 12, Banks and Banking.\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsecs. (a)(1)(B)(i), (2)(B)(ii), (4) and (b)(4), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\nSection 8 of the United States Housing Act of 1937, referred to in subsec. (a)(1)(B)(ii), is classified to  section 1437f of Title 42 , The Public Health and Welfare.\nThe Housing Act of 1949, referred to in subsec. (a)(1)(B)(iv), is  act July 15, 1949, ch. 338 ,  63 Stat. 413 , as amended. Title V of the Housing Act of 1949 is classified generally to subchapter III (§\u202f1471 et seq.) of chapter 8A of Title 42. For complete classification of this Act to the Code, see Short Title note set out under  section 1441 of Title 42  and Tables.\nThe Tax Reform Act of 1976, referred to in subsec. (b)(3), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 . Section 1951(a)(4)(A) of the Act repealed  section 168 of this title . For complete classification of this Act to the Code, see Tables.\nThe Tax Reform Act of 1986, referred to in subsec. (b)(3), is  Pub. L. 99–514 ,  Oct. 22, 1986 ,  100 Stat. 2085 . Section 242(a) of the Act repealed  section 185 of this title . For complete classification of this Act to the Code, see Tables.\nThe Revenue Reconciliation Act of 1990, referred to in subsec. (b)(3), is title XI of  Pub. L. 101–508 ,  Nov. 5, 1990 ,  104 Stat. 1388–400 . Section 11801(a)(13) of the Act repealed  section 188 of this title . For complete classification of this Act to the Code, see Short Title note set out under  section 1 of this title  and Tables.\nThe Economic Recovery Tax Act of 1981, referred to in subsec. (b)(4), is  Pub. L. 97–34 ,  Aug. 13, 1981 ,  95 Stat. 172 .  Section 191 of this title  was repealed by  section 212(d)(1) of Pub. L. 97–34 . For complete classification of this Act to the Code, see Tables.\nSuch sentence, referred to in subsec. (d)(4)(D), probably should be a reference to  section 1033(b)(2) of this title , following the amendment by  Pub. L. 105–206, §\u202f6023(12) , which substituted “section 1033(b)(2)” for “the last sentence of section 1033(b)” in the preceding reference. See 1998 Amendment note below.\n2018—Subsec. (d)(3).  Pub. L. 115–141  substituted “paragraph (6)” for “paragraph (9)”.\n2005—Subsec. (b)(3).  Pub. L. 109–135, §\u202f402(h) , struck out “or by section 179D” after “190, or 193)”.\nPub. L. 109–58, §\u202f1331(b)(3) , inserted “or by section 179D” after “190, or 193)”.\nSubsec. (d)(5) to (8).  Pub. L. 109–135, §\u202f402(a)(7)(A) , redesignated pars. (6) to (8) as (5) to (7), respectively, and struck out heading and text of former par. (5). Text read as follows: “Under regulations prescribed by the Secretary, rules consistent with paragraphs (3) and (4) of this subsection and with subsections (e) and (f) shall apply in the case of transactions described in section 1081 (relating to exchanges in obedience to SEC orders).”\nSubsec. (e)(2).  Pub. L. 109–135, §\u202f402(a)(7)(B) , substituted “or (3)” for “(3), or (5)”.\n1998—Subsec. (d)(4)(D).  Pub. L. 105–206  substituted “section 1033(b)(2)” for “the last sentence of section 1033(b)” in introductory provisions.\n1997—Subsec. (d)(7) to (10).  Pub. L. 105–34, §\u202f312(d)(10)(A) , redesignated pars. (9) and (10) as (7) and (8), respectively, and struck out heading and text of former par. (7). Text read as follows: “Subsection (a) shall not apply to a disposition of—\n“(A) property to the extent used by the taxpayer as his principal residence (within the meaning of section 1034, relating to rollover of gain on sale of principal residence), and\n“(B) property in respect of which the taxpayer meets the age and ownership requirements of section 121 (relating to one-time exclusion of gain from sale of principal residence by individual who has attained age 55) but only to the extent that he meets the use requirements of such section in respect of such property.”\nSubsec. (e)(3).  Pub. L. 105–34, §\u202f312(d)(10)(B) , struck out heading and text of par. (3). Text read as follows: “If the basis of property acquired in a transaction described in paragraph (7) of subsection (d) is determined by reference to the basis in the hands of the taxpayer of other property, then the holding period of the property acquired shall include the holding period of such other property.”\n1996—Subsec. (e)(4).  Pub. L. 104–188  struck out par. (4) which read as follows:\n“(4)  Qualified low-income housing .—The holding period of any section 1250 property acquired which is described in subsection (d)(8)(E)(i) shall include the holding period of the corresponding element of section 1250 property disposed of.”\n1995—Subsec. (d)(5).  Pub. L. 104–7  struck out “1071 and” before “1081 transactions” in heading and “section 1071 (relating to gain from sale or exchange to effectuate policies of FCC) or” before “section 1081” in text.\n1990—Subsec. (a)(1)(B)(i), (2)(B)(ii).  Pub. L. 101–508, §\u202f11801(c)(15)(A) , which directed the insertion of “(as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” after “section 1039(b)(1)(B)” in pars. (1)(A)(i) and (2)(B)(ii) of subsec. (a), was executed to pars. (1)(B)(i) and (2)(B)(ii) to reflect the probable intent of Congress.\nSubsec. (a)(4), (5).  Pub. L. 101–508, §\u202f11812(b)(11) , added par. (4) and redesignated former par. (4) as (5).\nSubsec. (b)(3).  Pub. L. 101–508, §\u202f11801(c)(6)(F) , substituted “188 (as in effect before its repeal by the Revenue Reconciliation Act of 1990),” for “188,”.\nSubsec. (b)(4).  Pub. L. 101–508, §\u202f11812(b)(12) , substituted “section 167(k) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)” for “section 167(k)” in two places.\nSubsec. (d)(3).  Pub. L. 101–508, §\u202f11801(c)(8)(I) , struck out “371(a), 374(a),” after “332, 351, 361,”.\nSubsec. (d)(8).  Pub. L. 101–508, §\u202f11801(c)(15)(B) , struck out par. (8) which related to the treatment of gain from the disposition of qualified low-income housing.\nSubsecs. (g) to (i).  Pub. L. 101–508, §\u202f11801(c)(15)(C) , redesignated subsecs. (h) and (i) as (g) and (h), respectively, and struck out former subsec. (g) which provided special rules for qualified low-income housing.\n1989—Subsec. (b)(5)(A).  Pub. L. 101–239, §\u202f7831(b)(1) , substituted “of property to which section 168 applies” for “of recovery property”.\nSubsec. (b)(5)(B).  Pub. L. 101–239, §\u202f7831(b)(2) , substituted “to which section 168 does not apply” for “which is not recovery property”.\n1988—Subsec. (d)(11).  Pub. L. 100–647  struck out par. (11) which related to section 1245 recovery property.\n1986—Subsec. (b)(3).  Pub. L. 99–514  inserted “(as in effect before its repeal by the Tax Reform Act of 1986)” after “185”.\n1984—Subsec. (a)(4).  Pub. L. 98–369  added par. (4).\n1983—Subsec. (b)(1).  Pub. L. 97–448, §\u202f102(a)(7)(B) , struck out last sentence providing that, for purposes of defining “additional depreciation”, if a useful life (or salvage value) was used in determining the amount allowed as a deduction for any taxable year, such life (or value) was to be used in determining the depreciation adjustments which would have resulted for such year under the straight line method.\nSubsec. (b)(5).  Pub. L. 97–448, §\u202f102(a)(7)(A) , added par. (5).\n1981—Subsec. (b)(4).  Pub. L. 97–34, §\u202f212(d)(2)(F) , inserted “(as in effect before its repeal by the Economic Recovery Tax Act of 1981)” after “section 167(k) or 191” in two places.\nSubsec. (d)(11).  Pub. L. 97–34, §\u202f204(e) , added par. (11).\n1980—Subsec. (a)(1)(B).  Pub. L. 96–222  inserted “which was allowed under section 167(k)” at end of last sentence.\nSubsec. (b)(3).  Pub. L. 96–223  inserted reference to section 193.\n1978—Subsec. (b)(3).  Pub. L. 95–600, §\u202f701(f)(3)(C) , struck out reference to section 191.\nSubsec. (b)(4).  Pub. L. 95–600, §\u202f701(f)(3)(E) , inserted reference to amortization deduction, amortization adjustments, and to section 191 in two places.\nSubsec. (d)(7)(A).  Pub. L. 95–600, §\u202f405(c)(4) , substituted “relating to rollover of gain on sale of principal residence” for “relating to sale or exchange of residence”.\nSubsec. (d)(7)(B).  Pub. L. 95–600, §\u202f404(c)(7) , inserted provisions relating to a one-time exclusion and principal residence and substituted “55” for “65”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f202(a) , in revising text generally, made the following changes:\n(1) Added par. (1).\n(2) Redesignated as pars. (2) and (3) existing pars. (1) and (2).\n(3) Made the following changes in par. (2): inserted in heading “,\u2000and before  January 1, 1976 ”; designated introductory text as subpar. “(A) In general”; inserted therein “and the amount determined under paragraph (1)(A)(ii) exceeds the amount determined under paragraph (1)(A)(i), then”; redesignated as cl. (i) existing subpar. (A); substituted therein “attributable to periods after  December 31, 1969 , and before  January 1, 1976 ” for “(as defined in subsection (b)(1) or (4) attributable to periods after  December 31, 1969 ”; substituted cl. (ii) and concluding text for subpar. (B) and concluding text which read:\n“(B) the excess of—\n“(i) the amount realized (in the case of a sale, exchange, or involuntary conversion), or the fair market value of such property (in the case of any other disposition), over\n“(ii) the adjusted basis of such property,\nshall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. Such gain shall be recognized notwithstanding any other provision of this subtitle.”; redesignated as subpar. (B) existing subpar. (C); substituted therein introductory “subparagraph (A)” for “paragraph (1)”; and deleted from cl. (ii) “constructed, reconstructed, or acquired by the taxpayer before  January 1, 1976 ,” after “section 1250 property” and “is” before “financed”, and substituted “1” for “one”.\n(4) Made the following changes in par. (3): substituted in subpar. (A) “determined under paragraph (1)(A)(ii) exceeds the sum of the amounts determined under paragraphs (1)(A)(i) and (2)(A)(i)” for “determined under paragraph (1)(B) exceeds the amount determined under paragraph (1)(A)”; and substituted subpar. (A)(ii) and concluding text for par. (2)(A)(ii), and concluding text which read:\n“(ii) the excess of the amount determined under paragraph (1)(B) over the amount determined under paragraph (1)(A),\nshall also be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. Such gain shall be recognized notwithstanding any other provisions of this subtitle.”\nSubsec. (b)(3).  Pub. L. 94–455 , §§\u202f1951(c)(2)(C), 2122(b)(4), 2124(a)(3)(D), inserted “(as in effect before its repeal by the Tax Reform Act of 1976)” after “section 168” and reference to sections 190 and 191.\nSubsec. (d)(4)(B).  Pub. L. 94–455, §\u202f1901(b)(31)(A) , substituted reference to section “1033(a)(2)(A)” for “1033(a)(3)(A)”.\nSubsec. (d)(4)(C).  Pub. L. 94–455, §\u202f1901(b)(31)(B) , substituted reference to section “1033(a)(2)” for “1033(a)(3)”.\nSubsec. (d)(4)(D).  Pub. L. 94–455 , §§\u202f1901(b)(31)(B), (E), 1906(b)(13)(A), substituted reference to sections “1033(a)(2)” and “1033(b)” for “1033(a)(3)” and “1033(c)”, respectively, and struck out “or his delegate” after “Secretary”.\nSubsec. (d)(5), (8)(F)(ii).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(10).  Pub. L. 94–455, §\u202f202(b) , added par. (10).\nSubsec. (f)(1).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsec. (f)(2).  Pub. L. 94–455, §\u202f202(c)(1) , substituted introductory text “the sum of a series of amounts determined for the periods set forth in subsection (a), with the amount for any such period being determined by multiplying” for “the sum of—(A) the amount (if any) determined by multiplying”; substituted subpar. (A) as combined text for prior subpars. (A)(i) and (B)(i) reading “(i) the amount which bears the same ratio to the lower of the amounts specified in subparagraph (A) or (B) of subsection (a)(1) for the section 1250 property as the additional depreciation for such element attributable to periods after  December 31, 1969 , bears to the sum of the additional depreciation for all elements attributable to periods after  December 31, 1969 , by” and “(i) the amount which bears the same ratio to the lower of the amounts specified in subsection (a)(2)(A)(i) or (ii) for the section 1250 property as the additional depreciation for such element attributable to periods before  January 1, 1970 , bears to the sum of the additional depreciation for all elements attributable to periods before  January 1, 1970 , by”; and substituted subpar. (B) as combined text for prior subpars. (A)(ii) and (B)(ii), inserting therein “for such period” after “for such element”.\nSubsec. (g)(1).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsec. (g)(2).  Pub. L. 94–455, §\u202f202(c)(2) , substituted “shall be determined in a manner similar to that provided by subsection (f)(2).” for “shall be the amount determined by multiplying—\n“(A) the amount which bears the same ratio to the lower of the additional depreciation or the gain recognized for the section 1250 property disposed of as the additional depreciation for such element bears to the sum of the additional depreciation for all elements disposed of, by\n“(B) the applicable percentage for such element.\nFor purposes of this paragraph, determinations with respect to any element shall be made as if it were a separate property.”\nSubsec. (h).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1975—Subsec. (a)(1)(C)(ii).  Pub. L. 93–625  substituted “ January 1, 1976 ” for “ January 1, 1975 ”.\nSubsec. (d)(3), (9).  Pub. L. 94–81, §\u202f2(b) , inserted reference to par. (9) in par. (3), and added par. (9).\n1971—Subsec. (b)(3).  Pub. L. 92–178  inserted reference to section 188.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f521(b) , modified the recapture rules pertaining to residential housing by allowing a 1 percent per month reduction in the amount to be recaptured as ordinary income after the property has been held for 100 full months, with other real property remaining subject to full recapture, applied the existing recapture rules where the sale of property was subject to a binding contract in existence prior to  July 25, 1969 , provided that changes in the recapture rules are not to apply in federally assisted projects (such as programs under section 221(d)(3) or 236 of the National Housing Act) or to other publicly assisted housing programs under which the return to the investor is limited on a comparable basis, thereby rendering these projects subject to a recapture of the depreciation in full if the sale occurs in the first 12 months and for a phaseout of the recapture of the excess of accelerated over straight-line depreciation after 20 months, the recapture being reduced at the rate of 1 percent per month until 120 months after which no recapture applies, with such recapture rules to continue to apply only with respect to such property constructed, reconstructed, or acquired before  Jan. 1, 1975 , and applied new recapture rules to depreciation attributable to periods after  Dec. 31, 1969 .\nSubsec. (b)(4).  Pub. L. 91–172, §\u202f512(c) , added par. (4).\nSubsec. (b)(3).  Pub. L. 91–172, §\u202f704(b)(5) , inserted reference to sections 169 and 185.\nSubsec. (d).  Pub. L. 91–172 , §§\u202f521(e)(1), 910(b)(1), substituted “subsection (a)” for “subsection (a)(1)” wherever it appears and added par. (8).\nSubsec. (e)(4).  Pub. L. 91–172, §\u202f910(b)(2) , added par. (4).\nSubsec. (f)(1).  Pub. L. 91–172, §\u202f521(e)(2)(A) , substituted “subsection (a)” for “subsection (a)(1)”.\nSubsec. (f)(2).  Pub. L. 91–172, §\u202f521(e)(2)(B) , redesignated subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A) and, in cls. (i) and (ii) as so redesignated, inserted reference to depreciation attributable to periods after  Dec. 31, 1969 , and added subpar. (B).\nSubsecs. (g) to (i).  Pub. L. 91–172, §\u202f910(b)(3) , added subsec. (g) and redesignated former subsecs. (g) and (h) as (h) and (i), respectively.\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the Energy Policy Act of 2005,  Pub. L. 109–58 , to which they relate, but amendment by  section 402(a)(7) of Pub. L. 109–135  not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 ( 15 U.S.C. 79  et seq.) before its repeal, see  section 402(m) of Pub. L. 109–135 , set out as an Effective and Termination Dates of 2005 Amendments note under  section 23 of this title .\nAmendment by  Pub. L. 109–58  applicable to property placed in service after  Dec. 31, 2005 , see  section 1331(d) of Pub. L. 109–58 , set out as an Effective Date note under  section 179D of this title .\nAmendment by  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 104–7  applicable to sales and exchanges on or after  January 17, 1995 , and to sales and exchanges before such date if FCC tax certificate with respect to such sale or exchange was issued on or after such date, but not applicable with respect to certain binding contracts, see  section 2(d) of Pub. L. 104–7 , set out as an Effective Date of Repeal note under  section 1071 of this title .\nAmendment by section 11812(b)(11), (12) of  Pub. L. 101–508  applicable to property placed in service after  Nov. 5, 1990 , but not applicable to any property to which  section 168 of this title  does not apply by reason of subsec. (f)(5) of section 168, and not applicable to rehabilitation expenditures described in  section 252(f)(5) of Pub. L. 99–514 , see  section 11812(c) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  Pub. L. 101–239  effective as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 7831(g) of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to that portion of the basis of any property which is attributable to expenditures paid or incurred after  Dec. 31, 1986 , except as otherwise provided, see  section 242(c) of Pub. L. 99–514 , set out as an Effective Date of Repeal note under former  section 185 of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982,  Pub. L. 97–248 , to which such amendment relates, see  section 715 of Pub. L. 98–369 , set out as a note under  section 31 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 204(e) of Pub. L. 97–34  applicable to property placed in service after  Dec. 31, 1980 , in taxable years ending after that date, see  section 209(a) of Pub. L. 97–34 , set out as an Effective Date note under  section 168 of this title .\nAmendment by  section 212(d)(2)(F) of Pub. L. 97–34  applicable to expenditures incurred after  Dec. 31, 1981 , in taxable years ending after such date, see  section 212(e) of Pub. L. 97–34 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 96–223  applicable to taxable years beginning after  Dec. 31, 1979 , see  section 251(b) of Pub. L. 96–223 , set out as an Effective Date note under  section 193 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  section 404(c)(7) of Pub. L. 95–600  applicable to sales or exchanges after  July 26, 1978 , in taxable years ending after such date, see  section 404(d)(1) of Pub. L. 95–600 , set out as a note under  section 121 of this title .\nAmendment by  section 405(c)(4) of Pub. L. 95–600  applicable to sales and exchanges of residences after  July 26, 1978 , in taxable years ending after such date, see  section 405(d) of Pub. L. 95–600 , set out as a note under  section 1038 of this title .\nAmendment by section 701(f)(3)(C), (E) of  Pub. L. 95–600  effective as if included within the amendment of subsec. (b)(3) and (4) by  section 2124 of Pub. L. 94–455 , see  section 701(f)(8) of Pub. L. 95–600 , set out as an Effective and Termination Dates of 1978 Amendments note under  section 167 of this title .\nPub. L. 94–455, title II, §\u202f202(d) ,  Oct. 4, 1976 ,  90 Stat. 1530 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section (other than subsection (b)) [amending this section and  section 167 of this title ] shall apply for taxable years ending after  December 31, 1975 . The amendment made by subsection (b) [amending this section] shall apply with respect to proceedings (and to operations of law) referred to in section 1250(d)(10) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which begin after  December 31, 1975 .”\nAmendment by section 1901(b)(3)(K), (31)(A), (B), (E) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  section 1951(c)(2)(C) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1976 , see  section 1951(d) of Pub. L. 94–455 , set out as a note under  section 72 of this title .\nAmendment by  section 2122(b)(4) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1976 , and before  Jan. 1, 1983 , see  section 2122(c) of Pub. L. 94–455 , as amended by  Pub. L. 96–167 , 9(c),  Dec. 29, 1979 ,  93 Stat. 1278 , set out as a note under  section 190 of this title .\nAmendment by  section 2124(a)(3)(D) of Pub. L. 94–455  applicable with respect to additions to capital accounts made after  June 14, 1976  and before  June 15, 1981 , see  section 2124(a)(4) of Pub. L. 94–455 , set out as an Effective Date note under  section 642 of this title .\nPub. L. 94–81, §\u202f2(c) ,  Aug. 9, 1975 ,  89 Stat. 418 , provided that: \n “(1)   In general.— Except as provided in paragraph (2) the amendments made by this section [amending this section and  section 1245 of this title ] shall apply to dispositions after  December 31, 1969 , in taxable years ending after such date. \n \n “(2)   Election for past transactions.— In the case of any disposition occurring before the date of the enactment of this Act [ Aug. 9, 1975 ], the amendments made by this section shall apply only if the organization acquiring the property elects (in the manner provided by regulations prescribed by the Secretary of the Treasury or his delegate) within 1 year after the date of the enactment of this Act to have such amendments apply with respect to such property.”\nAmendment by  Pub. L. 93–625  applicable with respect to property placed in service after  Dec. 31, 1973 , see  section 5(d) of Pub. L. 93–625 , set out as a note under  section 167 of this title .\nAmendment by  Pub. L. 92–178  applicable to taxable years ending after  Dec. 31, 1971 , see  section 303(d) of Pub. L. 92–178 , set out as a note under  section 642 of this title .\nAmendment by section 521(b), (c), (e) of  Pub. L. 91–172  applicable with respect to taxable years ending after  July 24, 1969 , see  section 521(g) of Pub. L. 91–172 , set out as a note under  section 167 of this title .\nAmendment by  section 704(b)(5) of Pub. L. 91–172  applicable to taxable years ending after  Dec. 31, 1968 , see  section 704(c) of Pub. L. 91–172 , set out as an Effective Date note under  section 169 of this title .\nPub. L. 91–172, title IX, §\u202f910(d) ,  Dec. 30, 1969 ,  83 Stat. 722 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [enacting  section 1039 of this title  and amending this section] shall apply to approved dispositions of qualified housing projects (within the meaning of section 1039 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as added by subsection (a)) after  October 9, 1969 .”\nPub. L. 88–272, title II, §\u202f231(c) ,  Feb. 26, 1964 ,  78 Stat. 105 , provided that:  “The amendments made by this section [enacting this section and amending sections 170, 301, 312, 341, 453, 751, and the analysis preceding  section 1231 of this title ] shall apply to dispositions after  December 31, 1963 , in taxable years ending after such date.”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Section, added  Pub. L. 91–172, title II, §\u202f211(a) ,  Dec. 30, 1969 ,  83 Stat. 566 ; amended  Pub. L. 92–178, title III, §\u202f305(a) ,  Dec. 10, 1971 ,  85 Stat. 524 ;  Pub. L. 94–455, title II, §\u202f206(a) , (b)(1), (2), title XIV, §\u202f1402(b)(1)(Z), (2), title XIX, §§\u202f1901(b)(3)(K), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1535 , 1732, 1793, 1834;  Pub. L. 97–354, §\u202f5(a)(36) ,  Oct. 19, 1982 ,  96 Stat. 1695 ;  Pub. L. 98–369, div. A, title X, §\u202f1001(b)(23) , (e),  July 18, 1984 ,  98 Stat. 1012 , related to gain from disposition of property used in farming where farm losses offset nonfarm income.\nRepeal applicable to taxable years beginning after  Dec. 31, 1983 , see  section 492(d) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 170 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'For purposes of this section, the term “farm land” means any land with respect to which deductions have been allowed under section 175 (relating to soil and water conservation expenditures).\nFor purposes of this section— \n \n \n \n \n \n \n If the farm land is disposed of— The applicable percentage is— \n \n \n Within 5 years after the date it was acquired 100 percent. \n Within the sixth year after it was acquired 80 percent. \n Within the seventh year after it was acquired 60 percent. \n Within the eighth year after it was acquired 40 percent. \n Within the ninth year after it was acquired 20 percent. \n 10 years or more years after it was acquired 0 percent.\nUnder regulations prescribed by the Secretary, rules similar to the rules of section 1245 shall be applied for purposes of this section.\n2018—Subsec. (a)(1).  Pub. L. 115–141, §\u202f401(b)(32)(A) , struck out “during a taxable year beginning” after “disposed of” in introductory provisions.\nSubsec. (a)(1)(A).  Pub. L. 115–141, §\u202f401(b)(32)(B) , substituted “section” for “sections” and “for expenditures” for “and 182 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986) for expenditures”.\nSubsec. (a)(2).  Pub. L. 115–141, §\u202f401(b)(32)(C) , substituted “section” for “sections” and struck out “or 182 (relating to expenditures by farmers for clearing land)” before period at end.\n2014—Subsec. (a)(1).  Pub. L. 113–295, §\u202f221(a)(85)(A) , struck out “after  December 31, 1969 ” after “beginning” in introductory provisions.\nSubsec. (a)(1)(A).  Pub. L. 113–295, §\u202f221(a)(85)(B) , struck out “after  December 31, 1969 ,” after “taxpayer”.\n1986—Subsec. (a)(1)(A).  Pub. L. 99–514  substituted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” for “(relating to expenditures by farmers for clearing land)”.\n1984—Subsec. (a)(1).  Pub. L. 98–369  struck out “,\u2000except that this section shall not apply to the extent section 1251 applies to such gain” after “of this subtitle” in last sentence.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1901(b)(3)(K) , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to amounts paid or incurred after  Dec. 31, 1985 , in taxable years ending after such date, see  section 402(c) of Pub. L. 99–514 , set out as an Effective Date of Repeal note under former  section 182 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 492(d) of Pub. L. 98–369 , set out as a note under  section 170 of this title .\nAmendment by  section 1901(b)(3)(K) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 91–172, title II, §\u202f214(c) ,  Dec. 30, 1969 ,  83 Stat. 573 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1969 .”\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'A transfer of a franchise, trademark, or trade name shall not be treated as a sale or exchange of a capital asset if the transferor retains any significant power, right, or continuing interest with respect to the subject matter of the franchise, trademark, or trade name.\nThe term “franchise” includes an agreement which gives one of the parties to the agreement the right to distribute, sell, or provide goods, services, or facilities, within a specified area.\nThe term “transfer” includes the renewal of a franchise, trademark, or trade name.\nAmounts received or accrued on account of a transfer, sale, or other disposition of a franchise, trademark, or trade name which are contingent on the productivity, use, or disposition of the franchise, trademark, or trade name transferred shall be treated as amounts received or accrued from the sale or other disposition of property which is not a capital asset.\nAny amount described in subparagraph (B) which is paid or incurred during the taxable year on account of a transfer, sale, or other disposition of a franchise, trademark, or trade name shall be allowed as a deduction under section 162(a) (relating to trade or business expenses).\nAny amount paid or incurred on account of a transfer, sale, or other disposition of a franchise, trademark, or trade name to which paragraph (1) does not apply shall be treated as an amount chargeable to capital account.\nFor purposes of determining the term of a transfer agreement under this section, there shall be taken into account all renewal options (and any other period for which the parties reasonably expect the agreement to be renewed).\n2004—Subsec. (e).  Pub. L. 108–357  struck out heading and text of subsec. (e). Text read as follows: “This section shall not apply to the transfer of a franchise to engage in professional football, basketball, baseball, or other professional sport.”\n1996—Subsec. (d)(4).  Pub. L. 104–188  provided that  section 11701(i) of Pub. L. 101–508  shall be applied as if “subsection” appeared instead of “section” in the material proposed to be stricken. See 1990 Amendment note below.\n1993—Subsec. (d)(2) to (5).  Pub. L. 103–66  added pars. (2) and (3) and struck out former pars. (2) relating to deduction of certain payments for transfer of a franchise, trademark, or trade name not treated as sale or exchange of capital asset, (3) relating to treatment of amounts paid or incurred on account of transfer, sale, or other disposition of a franchise, trademark, or trade name to which pars. (1) and (2) did not apply, (4) relating to renewals for purposes of determining term of transfer agreement under this section or period of amortization under this subtitle, and (5) relating to rules applicable to this subsection.\n1990—Subsec. (d)(4).  Pub. L. 101–508, §\u202f11701(i) , which directed the substitution of “under this section or any period of amortization under this subtitle for any payment described in this section” for “or any period of amortization under this section”, was executed by making the substitution for “or any period of amortization under this subsection”. See 1996 Amendment note above.\n1989—Subsec. (d)(1).  Pub. L. 101–239, §\u202f7622(a) , substituted “serial payments” for “payments” in heading and amended text generally. Prior to amendment, text read as follows: “Amounts paid or incurred during the taxable year on account of a transfer, sale, or other disposition of a franchise, trademark, or trade name which are contingent on the productivity, use, or disposition of the franchise, trademark, or trade name transferred shall be allowed as a deduction under section 162(a) (relating to trade or business expenses).”\nSubsec. (d)(2).  Pub. L. 101–239, §\u202f7622(b) , designated existing provisions as subpar. (A), inserted subpar. heading, redesignated former subpars. (A) to (C) as cls. (i) to (iii), respectively, and former cls. (i) and (ii) of former subpar. (B) as subcls. (I) and (II), respectively, of cl. (ii), and added subpar. (B).\nSubsec. (d)(3) to (5).  Pub. L. 101–239, §\u202f7622(c) , added pars. (3) to (5).\n1976—Subsec. (d)(2)(C).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 108–357  applicable to property acquired after  Oct. 22, 2004 , see  section 886(c)(1) of Pub. L. 108–357 , set out as a note under  section 197 of this title .\nAmendment by  Pub. L. 103–66  applicable, except as otherwise provided, with respect to property acquired after  Aug. 10, 1993 , see  section 13261(g) of Pub. L. 103–66 , set out as an Effective Date note under  section 197 of this title .\nAmendment by  Pub. L. 101–508  effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989,  Pub. L. 101–239, title VII , to which such amendment relates, see  section 11701(n) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  Pub. L. 101–239  applicable to transfers after  Oct. 2, 1989 , but not applicable to any transfer pursuant to a written binding contract in effect on  Oct. 2, 1989 , and at all times thereafter before the transfer, see section 7622(c)[(e)] of  Pub. L. 101–239 , set out as a note under  section 167 of this title .\nSection applicable to transfers after  Dec. 31, 1969 , except that subsec. (d)(1) shall, at the election of the taxpayer (made at such time and in such manner as the Secretary or his delegate may by regulations prescribe), apply to transfers before  Jan. 1, 1970 , but only with respect to payments made in taxable years ending after  Dec. 31, 1969 , and beginning before  Jan. 1, 1980 , see  section 516(d)(3) of Pub. L. 91–172 , set out as a note under  section 1001 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The amount of the expenditures referred to in paragraph (1)(A)(i) shall be properly adjusted for amounts included in gross income under section 617(b)(1)(A).\n1988—Subsec. (a)(4).  Pub. L. 100–647  added par. (4).\n1986— Pub. L. 99–514  amended section generally, substituting “geothermal, or other mineral properties” for “or geothermal property” in section catchline, revising and restating subsec. (a), pars. (1) to (4) as pars. (1) to (3), and reenacting subsec. (b) without change except for substituting “rule of subsection (g)” for “rules of subsection (g)” in par. (1).\n1982—Subsec. (b)(2).  Pub. L. 97–354  substituted “an S corporation” for “an electing small business corporation (as defined in section 1371(b))”.\n1978— Pub. L. 95–618, §\u202f402(c)(3) , substituted “oil, gas, or geothermal” for “oil or gas” in section catchline.\nSubsec. (a)(1), (2).  Pub. L. 95–618, §\u202f402(c)(1) , substituted “oil, gas, or geothermal property” for “oil or gas property” wherever appearing.\nSubsec. (a)(3).  Pub. L. 95–618, §\u202f402(c)(2) , substituted “Oil, gas, or geothermal” for “Oil or gas” in heading and in text substituted “The term ‘oil, gas, or geothermal property’ means” for “The term ‘oil or gas property’ means”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 99–514, title IV, §\u202f413(c) ,  Oct. 22, 1986 ,  100 Stat. 2229 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 617 of this title ] shall apply to any disposition of property which is placed in service by the taxpayer after  December 31, 1986 . \n \n “(2)   Exception for binding contracts .— The amendments made by this section shall not apply to any disposition of property placed in service after  December 31, 1986 , if such property was acquired pursuant to a written contract which was entered into before  September 26, 1985 , and which was binding at all times thereafter.”\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nAmendment by  Pub. L. 95–618  applicable with respect to wells commenced on or after  Oct. 1, 1978 , in taxable years ending on or after such date, see  section 402(e) of Pub. L. 95–618 , set out as a note under  section 263 of this title .\nPub. L. 94–455, title II, §\u202f205(e) ,  Oct. 4, 1976 ,  90 Stat. 1535 , provided that:  “The amendments made by this section [enacting this section and amending sections 163, 170, 301, 312, 341, 453, and 751 of this title] shall apply with respect to taxable years ending after  December 31, 1975 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'For purposes of this section, “section 126 property” means any property acquired, improved, or otherwise modified by the application of payments excluded from gross income under section 126.\nFor purposes of this section, if section 126 property is disposed of less than 10 years after the date of receipt of payments excluded from gross income under section 126, the applicable percentage is 100 percent. If section 126 property is disposed of more than 10 years after such date, the applicable percentage is 100 percent reduced (but not below zero) by 10 percent for each year or part thereof in excess of 10 years such property was held after the date of receipt of the payments.\n2018—Subsec. (b)(2).  Pub. L. 115–141  substituted “170(e)” for “170(e),”.\n2003—Subsec. (b)(2).  Pub. L. 108–27  struck out “,\u2000341(e)(12),” after “170(e)”.\n1988—Subsec. (b)(2).  Pub. L. 100–647  amended  Pub. L. 99–514, §\u202f511(d)(2)(A) , see 1986 Amendment note below.\n1986—Subsec. (b)(2).  Pub. L. 99–514, §\u202f511(d)(2)(A) , as amended by  Pub. L. 100–647 , struck out “163(d),” after “sections”.\nPub. L. 99–514, §\u202f631(e)(14) , struck out “453B(d)(2)” after “341(e)(12),”.\n1980—Subsec. (a)(1)(B).  Pub. L. 96–222, §\u202f105(a)(7)(B) , inserted following cl. (ii) provisions requiring that such gain be recognized notwithstanding any other provision of this subtitle, except that this section shall not apply to the extent such gain is recognized as ordinary income under any other provision of this part.\nSubsec. (b)(2).  Pub. L. 96–471  substituted “453B(d)(2)” for “453(d)(4)(B)”.\nPub. L. 96–222, §\u202f105(a)(7)(D) , inserted “for purposes of sections 163(d), 170(e), 341(e)(12), 453(d)(4)(B), and 751(c)” before “amounts treated as”.\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 511(d)(2)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 511(e) of Pub. L. 99–514 , set out as a note under  section 163 of this title .\nAmendment by  section 631(e)(14) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nFor effective date of amendment by  Pub. L. 96–471 , see  section 6(a)(1) of Pub. L. 96–471 , set out as an Effective Date note under  section 453 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nSection effective with respect to grants made under the programs after  Sept. 30, 1979 , see  section 543(d) of Pub. L. 95–600 , set out as a note under  section 126 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The rules of paragraphs (1), (2), and (3) of subsection (a) shall also apply to the termination (or transfer) during the taxable year of the taxpayer’s obligation (or rights) with respect to a section 1256 contract by offsetting, by taking or making delivery, by exercise or being exercised, by assignment or being assigned, by lapse, or otherwise.\nFor purposes of this subsection, fair market value at the time of the termination (or transfer) shall be taken into account.\nThe taxpayer may elect to have this section not to apply to all section 1256 contracts which are part of a mixed straddle.\nAn election under paragraph (1) shall be made at such time and in such manner as the Secretary may by regulations prescribe.\nAn election under paragraph (1) shall apply to the taxpayer’s taxable year for which made and to all subsequent taxable years, unless the Secretary consents to a revocation of such election.\nSubsection (a) shall not apply in the case of a hedging transaction.\nFor purposes of this subsection, the term “hedging transaction” means any hedging transaction (as defined in section 1221(b)(2)(A)) if, before the close of the day on which such transaction was entered into (or such earlier time as the Secretary may prescribe by regulations), the taxpayer clearly identifies such transaction as being a hedging transaction.\nNotwithstanding paragraph (2), the term “hedging transaction” shall not include any transaction entered into by or for a syndicate.\nFor purposes of subparagraph (A), the term “syndicate” means any partnership or other entity (other than a corporation which is not an S corporation) if more than 35 percent of the losses of such entity during the taxable year are allocable to limited partners or limited entrepreneurs (within the meaning of section 461(k)(4)).\nAny hedging loss for a taxable year which is allocable to any limited partner or limited entrepreneur (within the meaning of paragraph (3)) shall be allowed only to the extent of the taxable income of such limited partner or entrepreneur for such taxable year attributable to the trade or business in which the hedging transactions were entered into. For purposes of the preceding sentence, taxable income shall be determined by not taking into account items attributable to hedging transactions.\nAny hedging loss disallowed under clause (i) shall be treated as a deduction attributable to a hedging transaction allowable in the first succeeding taxable year.\nSubparagraph (A)(i) shall not apply to any hedging loss to the extent that such loss exceeds the aggregate unrecognized gains from hedging transactions as of the close of the taxable year attributable to the trade or business in which the hedging transactions were entered into.\nIn the case of any hedging transaction relating to property other than stock or securities, this paragraph shall apply only in the case of a taxpayer described in section 465(a)(1).\nThe term “unrecognized gain” has the meaning given to such term by section 1092(a)(3).\nFor purposes of this title, gain from any property shall in no event be considered as gain from the sale or exchange of a capital asset if such property was at any time personal property (as defined in section 1092(d)(1)) identified under subsection (e)(2) by the taxpayer as being part of a hedging transaction.\nParagraph (3) of subsection (a) shall not apply to any gain or loss which, but for such paragraph, would be ordinary income or loss.\nFor purposes of this title, gain or loss from trading of section 1256 contracts shall be treated as gain or loss from the sale or exchange of a capital asset.\nSubparagraph (A) shall not apply to any section 1256 contract to the extent such contract is held for purposes of hedging property if any loss with respect to such property in the hands of the taxpayer would be ordinary loss.\nFor purposes of determining whether gain or loss with respect to any property is ordinary income or loss, the fact that the taxpayer is actively engaged in dealing in or trading section 1256 contracts related to such property shall not be taken into account.\nSection 1091 (relating to loss from wash sales of stock or securities) shall not apply to any loss taken into account by reason of paragraph (1) of subsection (a).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of subparagraph (A), including regulations excluding from the application of subparagraph (A) any contract (or type of contract) if its application thereto would be inconsistent with such purposes.\nThe term “nonequity option” means any listed option which is not an equity option.\nThe term “listed option” means any option (other than a right to acquire stock from the issuer) which is traded on (or subject to the rules of) a qualified board or exchange.\nThe term “options dealer” means any person registered with an appropriate national securities exchange as a market maker or specialist in listed options.\nIn any case in which the Secretary makes a determination under subparagraph (C) of paragraph (7), the term “options dealer” also includes any person whom the Secretary determines performs functions similar to the persons described in subparagraph (A). Such determinations shall be made to the extent appropriate to carry out the purposes of this section.\nFor purposes of subparagraph (A), a person shall be treated as a dealer in securities futures contracts or options on such contracts if the Secretary determines that such person performs, with respect to such contracts or options, as the case may be, functions similar to the functions performed by persons described in paragraph (8)(A). Such determination shall be made to the extent appropriate to carry out the purposes of this section.\nThe term “securities futures contract” has the meaning given to such term by section 1234B.\nSection 3(a)(55) of the Securities Exchange Act of 1934, referred to in subsec. (g)(6)(B), is classified to  section 78c(a)(55) of Title 15 , Commerce and Trade.\nThe date of the enactment of this paragraph, referred to in subsec. (g)(6)(B), probably means the date of enactment of  Pub. L. 106–554 , which amended subsec. (g)(6) generally and which was approved  Dec. 21, 2000 .\n2018—Subsec. (e)(3)(B), (C).  Pub. L. 115–141  substituted “section 461(k)(4)” for “section 464(e)(2)”.\n2010—Subsec. (b).  Pub. L. 111–203  redesignated first sentence as par. (1), inserted heading, redesignated former pars. (1) to (5) as subpars. (A) to (E), respectively, of par. (1), added par. (2), and struck out concluding provisions which read as follows: “The term ‘section 1256 contract’ shall not include any securities futures contract or option on such a contract unless such contract or option is a dealer securities futures contract.”\n2005—Subsec. (f)(1).  Pub. L. 109–135  substituted “subsection (e)(2)” for “subsection (e)(2)(C)”.\n2004—Subsec. (g)(6).  Pub. L. 108–311  added at end of concluding provisions “The Secretary may prescribe regulations regarding the status of options the values of which are determined directly or indirectly by reference to any index which becomes (or ceases to be) a narrow-based security index (as so defined).”\n2002—Subsec. (f)(5).  Pub. L. 107–147  added par. (5).\n2000—Subsec. (b).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(g)(1)(A)] , added par. (5) and concluding provisions.\nSubsec. (f)(4).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(g)(2)] , inserted “and dealer securities futures contracts” after “dealer equity options” in heading and “,\u2000or dealer securities futures contracts,” after “dealer equity options” in introductory provisions.\nSubsec. (g)(6).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(g)(3)] , amended heading and text of par. (6) generally. Prior to amendment, text read as follows:\n“(A)  In general .—Except as provided in subparagraph (B), the term ‘equity option’ means any option—\n“(i) to buy or sell stock, or\n“(ii) the value of which is determined directly or indirectly by reference to any stock (or group of stocks) or stock index.\n“(B)  Exception for certain options regulated by commodities futures trading commission .—The term ‘equity option’ does not include any option with respect to any group of stocks or stock index if—\n“(i) there is in effect a designation by the Commodities Futures Trading Commission of a contract market for a contract based on such group of stocks or index, or\n“(ii) the Secretary determines that such option meets the requirements of law for such a designation.”\nSubsec. (g)(9).  Pub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(g)(1)(B)] , added par. (9).\n1999—Subsec. (e)(2).  Pub. L. 106–170  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘hedging transaction’ means any transaction if—\n“(A) such transaction is entered into by the taxpayer in the normal course of the taxpayer’s trade or business primarily—\n“(i) to reduce risk of price change or currency fluctuations with respect to property which is held or to be held by the taxpayer, or\n“(ii) to reduce risk of interest rate or price changes or currency fluctuations with respect to borrowings made or to be made, or obligations incurred or to be incurred, by the taxpayer,\n“(B) the gain or loss on such transactions is treated as ordinary income or loss, and\n“(C) before the close of the day on which such transaction was entered into (or such earlier time as the Secretary may prescribe by regulations), the taxpayer clearly identifies such transaction as being a hedging transaction.”\n1986—Subsec. (e)(4), (5).  Pub. L. 99–514  redesignated par. (5) as (4) and struck out former par. (4), special rule for banks, which read as follows: “In the case of a bank (as defined in section 581), subparagraph (A) of paragraph (2) shall be applied without regard to clause (i) or (ii) thereof.”\n1984— Pub. L. 98–369, §\u202f102(e)(5) , substituted “Section 1256 contracts” for “Regulated futures contracts” in section catchline.\nSubsec. (a)(1), (3), (4).  Pub. L. 98–369, §\u202f102(a)(1) , substituted “section 1256 contract” for “regulated futures contract” and “section 1256 contracts” for “regulated futures contracts” wherever appearing.\nSubsec. (b).  Pub. L. 98–369, §\u202f102(a)(2) , in par. (1), substituted “any regulated futures contract” for “with respect to which the amount required to be deposited and the amount which may be withdrawn depends on the system of marking to market; and”, in par. (2), substituted “any foreign currency contract,” for “which is traded on or subject to the rules of a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission or of any board of trade or exchange which the Secretary determines has rules adequate to carry out the purposes of this section. Such term includes any foreign currency contract.”, and added pars. (3) and (4).\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f102(a)(1)(A) , (e)(1)(A), substituted “section 1256 contracts” for “regulated futures contracts”, and “by taking or making delivery, by exercise or being exercised, by assignment or being assigned, by lapse,” for “by taking or making delivery,”.\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f102(e)(1)(C) , substituted “takes delivery on or exercises” for “takes delivery on” in heading.\nSubsec. (c)(2)(A).  Pub. L. 98–369, §\u202f102(a)(1)(B) , substituted “section 1256 contracts” for “regulated futures contracts”.\nSubsec. (c)(2)(B).  Pub. L. 98–369, §\u202f102(e)(1)(B) , substituted “takes delivery under or exercises” for “takes delivery under”.\nSubsec. (d)(1), (4)(A).  Pub. L. 98–369, §\u202f102(a)(1)(B) , substituted “section 1256 contracts” for “regulated futures contracts”.\nSubsec. (d)(4)(B).  Pub. L. 98–369, §\u202f102(a)(1)(A) , substituted “section 1256 contract” for “regulated futures contract”.\nPub. L. 98–369, §\u202f107(c) , inserted “(or such earlier time as the Secretary may prescribe by regulations)”.\nSubsec. (e)(2)(C).  Pub. L. 98–369, §\u202f107(d) , inserted “(or such earlier time as the Secretary may prescribe by regulations”.\nSubsec. (e)(5).  Pub. L. 98–369, §\u202f104(a) , added par. (5).\nSubsec. (f)(3), (4).  Pub. L. 98–369, §\u202f102(b) , added pars. (3) and (4).\nSubsec. (g).  Pub. L. 98–369, §\u202f102(a)(3) , in amending subsec. (g) generally, inserted provisions relating to regulated futures contracts as par. (1), redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, of par. (2), and added pars. (3) to (8).\nSubsec. (g)(1)(A).  Pub. L. 98–369, §\u202f722(a)(2) , inserted “,\u2000or the settlement of which depends on the value of,” after “delivery of”.\n1983—Subsec. (b).  Pub. L. 97–448, §\u202f105(c)(5)(A) , (B), struck out par. (1) which related to contracts requiring delivery of personal property (as defined in section 1092(d)(1)) or an interest in such property, redesignated pars. (2) and (3) as (1) and (2), respectively, and inserted last sentence providing that such term includes any foreign currency contract.\nSubsec. (c).  Pub. L. 97–448, §\u202f105(c)(1) , inserted “,\u2000etc.” after “Terminations” in heading and, in text, designated existing first and second sentences as pars. (1) and (3), respectively, added par. (2), inserted “(or transfer)” after “termination” and “(or rights)” after “obligation” in par. (1) as so designated, and substituted “this subsection” for “the preceding sentence” and inserted “(or transfer)” after “termination” in par. (3) as so designated.\nSubsec. (d)(4)(B).  Pub. L. 97–448, §\u202f105(c)(2) , substituted “day on which the first regulated futures contract forming part of the straddle is acquired” for “day on which such position is acquired”.\nSubsec. (e)(3)(C)(v).  Pub. L. 97–448, §\u202f105(c)(3) , inserted “(by regulations or otherwise)” after “determines”.\nSubsec. (g).  Pub. L. 97–448, §\u202f105(c)(5)(C) , added subsec. (g).\n1982—Subsec. (e)(3)(B).  Pub. L. 97–354  substituted “an S corporation” for “an electing small business corporation within the meaning of section 1371(b)”.\nAmendment by  Pub. L. 111–203  effective 1 day after  July 21, 2010 , except as otherwise provided, see  section 4 of Pub. L. 111–203 , set out as a note under  section 5301 of Title 12 , Banks and Banking.\nPub. L. 111–203, title XVI, §\u202f1601(b) ,  July 21, 2010 ,  124 Stat. 2223 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ July 21, 2010 ].”\nAmendment by  Pub. L. 108–311  effective as if included in section 401 of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by  Pub. L. 106–554 ], see  section 405(b) of Pub. L. 108–311 , set out as a note under  section 1234B of this title .\nPub. L. 107–147, title IV, §\u202f416(b)(2) ,  Mar. 9, 2002 ,  116 Stat. 55 , provided that:  “The amendment made by this subsection [amending this section] shall take effect as if included in section 5075 of the Technical and Miscellaneous Revenue Act of 1988 [ Pub. L. 100–647 ].”\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1261(e) of Pub. L. 99–514 , set out as an Effective Date note under  section 985 of this title .\nPub. L. 98–369, div. A, title I, §\u202f102(f) –(j),  July 18, 1984 ,  98 Stat. 625 , 627, as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1808(a)(1),  Oct. 22, 1986 ,  100 Stat. 2095 , 2817, provided that: \n “(f)   Effective Dates.— “(1)   In general .— Except as otherwise provided in this subsection or subsection (g), the amendments made by this section [amending this section, sections 263, 1092, 1212, 1234A, 1362, 1374, and 1402 of this title, and  section 411 of Title 42 , The Public Health and Welfare, and enacting provisions set out as a note under  section 1362 of this title ] shall apply to positions established after the date of the enactment of this Act [ July 18, 1984 ], in taxable years ending after such date. \n \n “(2)   Special rule for options on regulated futures contracts .— In the case of any option with respect to a regulated futures contract (within the meaning of section 1256 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), the amendments made by this section shall apply to positions established after  October 31, 1983 , in taxable years ending after such date. \n \n “(3)   Special rule for self-employment tax .— Except as provided in subsection (g)(2), the amendments made by subsection (c) [amending  section 1402 of this title  and  section 411 of Title 42 ] shall apply to taxable years beginning after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(4)   Gains or losses from certain terminations .— The amendment made by subsection (d)(9) [probably means subsec. (e)(9), which amended  section 1234A of this title ] shall apply as if included in the amendment made by section 505(a) [probably means section 507(a)] of the Economic Recovery Tax Act of 1981 [ Pub. L. 97–34 ], as amended by section 105(e) of the Technical Corrections Act of 1982 [ Pub. L. 97–448 ]. \n \n \n “(g)   Elections With Respect to Property Held on or Before the Date of the Enactment of This Act .— At the election of the taxpayer— “(1)  the amendments made by this section [amending this section, sections 263, 1092, 1212, 1234A, 1362, 1374, and 1402 of this title, and  section 411 of Title 42 , The Public Health and Welfare, and enacting provisions set out as a note under  section 1362 of this title ] shall apply to all section 1256 contracts held by the taxpayer on the date of the enactment of this Act [ July 18, 1984 ], effective for periods after such date in taxable years ending after such date, or \n \n “(2)  in lieu of an election under paragraph (1), the amendments made by this section shall apply to all section 1256 contracts held by the taxpayer at any time during the taxable year of the taxpayer which includes the date of the enactment of this Act. \n \n \n “(h)   Elections for Installment Payment of Tax Attributable to Stock Options.— “(1)   In general .— If the taxpayer makes an election under subsection (g)(2) and under this subsection— “(A)  the taxpayer may pay part or all the tax for the taxable year referred to in subsection (g)(2) in 2 or more (but not exceeding 5) equal installments, and \n \n “(B)  the maximum amount of tax which may be paid in installments under this subsection shall be the excess of— “(i)  the tax for such taxable year determined by taking into account subsection (g)(2), over \n \n “(ii)  the tax for such taxable year determined by taking into account subsection (g)(2) and by treating— \u2001\u2001\u2001\u2001\u2001“(I)  all section 1256 contracts which are stock options, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  any stock which was a part of a straddle including any such stock options, \n \n \n\n \u2001as having been acquired for a purchase price equal to their fair market value on the last business day of the preceding taxable year. Stock options and stock shall be taken into account under subparagraph (B)(ii) only if such options or stock were held on the last day of the preceding taxable year and only if income on such options or stock would have been ordinary income if such options or stock were sold at a gain on such last day. \n \n \n “(2)   Date for payment of installment.— “(A)  If an election is made under this subsection, the first installment under paragraph (1) shall be paid on or before the due date for filing the return for the taxable year described in paragraph (1), and each succeeding installment shall be paid on or before the date which is 1 year after the date prescribed for payment of the preceding installment. \n \n “(B)  If a bankruptcy case or insolvency proceeding involving the taxpayer is commenced before the final installment is paid, the total amount of any unpaid installments shall be treated as due and payable on the day preceding the day on which such case or proceeding is commenced. \n \n \n “(3)   Interest imposed .— For purposes of section 6601 of the Internal Revenue Code of 1986, the time for payment of any tax with respect to which an election is made under this subsection shall be determined without regard to this subsection. \n \n “(4)   Form of election .— An election under this subsection shall be made not later than the time for filing the return for the taxable year described in paragraph (1) and shall be made in the manner and form required by regulations prescribed by Secretary of the Treasury or his delegate. The election shall set forth— “(A)  the amount determined under paragraph (1)(B) and the number of installments elected by the taxpayer, \n \n “(B)  the property described in paragraph (1)(B)(ii), and the date on which such property was acquired, \n \n “(C)  the fair market value of the property described in paragraph (1)(B)(ii) on the last business day of the taxable year preceding the taxable year described in paragraph (1), and \n \n “(D)  such other information for purposes of carrying out the provisions of this subsection as may be required by such regulations. \n \n \n “(5)   Delay of identification requirement .— Section 1256(e)(2)(C) of the Internal Revenue Code of 1986 shall not apply to any stock option or stock acquired on or before the 60th day after the date of the enactment of this Act [ July 18, 1984 ]. \n \n \n “(i)   Definitions .— For purposes of subsections (g) and (h)— “(1)   Section 1256 contract .— The term ‘section 1256 contract’ has the meaning given to such term by section 1256(b) of the Internal Revenue Code of 1986 (as amended by this section). \n \n “(2)   Stock option .— The term ‘stock option’ means any option to buy or sell stock. \n \n \n “(j)   Coordination of Election Under Subsection  (d)(3)  With Elections Under Subsections  (g)  and  (h).— The Secretary of the Treasury or his delegate shall prescribe such regulations as may be necessary to coordinate the election provided by subsection (d)(3) with the elections provided by subsections (g) and (h).”\nPub. L. 98–369, div. A, title I, §\u202f104(b) ,  July 18, 1984 ,  98 Stat. 628 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1984 .”\nAmendment by section 107(c), (d) of  Pub. L. 98–369  applicable to positions entered into after  July 18, 1984 , in taxable years ending after that date, see  section 107(e) of Pub. L. 98–369  set out as a note under  section 1092 of this title .\nAmendment by  section 722(a)(2) of Pub. L. 98–369  effective as if included in the provisions of the Technical Corrections Act of 1984,  Pub. L. 97–448 , to which such amendment relates, see  section 722(a)(6) of Pub. L. 98–369 , set out as a note under  section 172 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–448, title I, §\u202f105(c)(5)(D) ,  Jan. 12, 1983 ,  96 Stat. 2386 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(i)   In general .— Except as provided in clauses (ii) and (iii), the amendments made by subparagraphs (B) and (C) [amending this section] shall apply only with respect to contracts entered into after  May 11, 1982 . \n \n “(ii)   Election by taxpayer of retroactive application.— “(I)   Retroactive application .— If the taxpayer so elects, the amendments made by subparagraphs (B) and (C) [amending this section] shall apply as if included within the amendments made by title V of the Economic Recovery Tax Act of 1981 [title V of  Pub. L. 97–34 ]. \n \n “(II)   Additional choices with respect to 1981 .— If the taxpayer held a foreign currency contract after  December 31, 1980 , and before  June 24, 1981 , and such taxpayer makes an election under subclause (I), such taxpayer may revoke any election made under section 508(c) [set out as an Effective Date note under  section 1092 of this title ] or 509(a) [set out below] of such Act, and may make an election under section 508(c) or 509(a) of such Act. \n \n “(III)   Additional choices apply to all regulated futures contracts .— Except as provided in subclause (IV), in the case of any taxpayer who makes an election under subclause (I), any election under section 508(c) or 509(a) of such Act or any revocation of such an election shall apply to all regulated futures contracts (including foreign currency contracts). \n \n “(IV)   Section 509 (a) (3) and (4) not to apply to foreign currency contracts .— Paragraphs (3) and (4) of section 509(a) of such Act shall not apply to any foreign currency contract. \n \n “(V)   Time for making election or revocation .— Any election under subclause (I) and any election or revocation under subclause (II) may be made only within the 90-day period beginning on the date of the enactment of this Act [ Jan. 12, 1983 ]. Any such action, once taken, shall be irrevocable. \n \n “(VI)   Definitions .— For purposes of this clause, the terms ‘regulated futures contract’ and ‘foreign currency contract’ have the same respective meanings as when used in section 1256 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this Act). \n \n \n “(iii)   Election by taxpayer with respect to positions held during taxable years ending after  may 11, 1982 .— In lieu of the election under clause (ii), a taxpayer may elect to have the amendments made by subparagraphs (B) and (C) [amending subsec. (b) of this section to include foreign currency contracts and enacting subsec. (g) of this section, respectively] applied to all positions held in taxable years ending after  May 11, 1982 , except that the provisions of section 509(a)(3) and (4) of the Economic Recovery Tax Act of 1981 [set out below] shall not apply.”\nAmendment by  Pub. L. 97–354  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as an Effective Date note under  section 1361 of this title .\nSection (other than subsec. (e)(2)(C)) applicable to property acquired and positions established by the taxpayer after  June 23, 1981 , in taxable years ending after such date, subsec. (e)(2)(C) of this section applicable to property acquired and positions established by the taxpayer after  Dec. 31, 1981 , in taxable years ending after such date, and section applicable when so elected with respect to property held on  June 23, 1981 , see  section 508 of Pub. L. 97–34 , set out as a note under  section 1092 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title IV, §\u202f401(g)(4)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–650, provided that:  “The Secretary of the Treasury or his delegate shall make the determinations under section 1256(g)(9)(B) of the Internal Revenue Code of 1986, as added by this Act, not later than  July 1, 2001 .”\nPub. L. 97–34, title V, §\u202f509 ,  Aug. 13, 1981 ,  95 Stat. 333 , as amended by  Pub. L. 97–448, title I, §\u202f105(c)(6) ,  Jan. 12, 1983 ,  96 Stat. 2387 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Election.— “(1)   In general .— In the case of any taxable year beginning before  June 23, 1981 , and ending after  June 22, 1981 , the taxpayer may elect, in lieu of any election under section 508(c) [set out as an Effective Date note under  section 1092 of this title ], to have this section apply to all regulated futures contracts held during such taxable year. \n \n “(2)   Application of section 1256 .— If a taxpayer elects to have the provisions of this section apply to the taxable year described in paragraph (1).— “(A)  the provisions of section 1256 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (other than section 1256(e)(2)(C)) shall apply to regulated futures contracts held by the taxpayer at any time during such taxable year, and \n \n “(B)  for purposes of determining the rate of tax applicable to gains and losses from regulated futures contracts held at any time during such year, such gains and losses shall be treated as gain or loss from a sale or exchange occurring in a taxable year beginning in 1982. \n \n \n “(3)   Determination of deferred tax liability .— If the taxpayer makes an election under this subsection.— “(A)  the taxpayer may pay part or all of the tax for such year in two or more (but not exceeding five) equal installments; \n \n “(B)  the maximum amount of tax which may be paid in installments under this section shall be the excess of— “(i)  the tax for such year, determined by taking into account paragraph (2), over \n \n “(ii)  the tax for such year, determined by taking into account paragraph (2) and by treating all regulated futures contracts which were held by the taxpayer on the first day of the taxable year described in paragraph (1), and which were acquired before the first day of such taxable year, as having been acquired for a purchase price equal to their fair market value on the last business day of the preceding taxable year. \n \n \n \n “(4)   Date for payment of installment.— “(A)  If an election is made under this subsection, the first installment under subsection (a)(3)(A) shall be paid on or before the due date for filing the return for the taxable year described in paragraph (1), and each succeeding installment shall be paid on or before the date which is one year after the date prescribed for payment of the preceding installment. \n \n “(B)  If a bankruptcy case or insolvency proceeding involving the taxpayer is commenced before the final installment is paid, the total amount of any unpaid installments shall be treated as due and payable on the day preceding the day on which such case or proceeding is commenced. \n \n \n “(5)   Interest imposed .— For purposes of section 6601 of the Internal Revenue Code of 1986, the time for payment of any tax with respect to which an election is made under this subsection shall be determined without regard to this subsection. \n \n \n “(b)   Form of Election .— An election under this section shall be made not later than the time for filing the return for the taxable year described in subsection (a)(1) and shall be made in the manner and form required by regulations prescribed by the Secretary. The election shall set forth— “(1)  the amount determined under subsection (a)(3)(B) and the number of installments elected by the taxpayer, \n \n “(2)  each regulated futures contract held by the taxpayer on the first day of the taxable year described in subsection (a)(1), and the date such contract was acquired, \n \n “(3)  the fair market value on the last business day of the preceding taxable year for each regulated futures contract described in paragraph (2), and \n \n “(4)  such other information for purposes of carrying out the provisions of this section as may be required by such regulations.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Any gain on the disposition of converted wetland or highly erodible cropland shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle, except that this section shall not apply to the extent such gain is recognized as ordinary income under any other provision of this part.\nAny loss recognized on the disposition of converted wetland or highly erodible cropland shall be treated as a long-term capital loss.\nThe term “highly erodible cropland” means any highly erodible cropland (as defined in section 1201(a)(10) of the Food Security Act of 1985 ( 16 U.S.C. 3801(10) )), if at any time the taxpayer used such land for farming purposes (other than the grazing of animals).\nIf any land is converted wetland or highly erodible cropland in the hands of any person, such land shall be treated as converted wetland or highly erodible cropland in the hands of any other person whose adjusted basis in such land is determined (in whole or in part) by reference to the adjusted basis of such land in the hands of such person.\nUnder regulations prescribed by the Secretary, rules similar to the rules applicable under section 1245 shall apply for purposes of subsection (a). For purposes of sections 170(e) and 751(c), amounts treated as ordinary income under subsection (a) shall be treated in the same manner as amounts treated as ordinary income under section 1245.\n2018—Subsec. (c)(1).  Pub. L. 115–141, §\u202f401(a)(177) , substituted “section 1201(a)(7)” for “section 1201(4)” and “ 16 U.S.C. 3801(7) ” for “ 16 U.S.C. 3801(4) ” in introductory provisions.\nSubsec. (c)(2).  Pub. L. 115–141, §\u202f401(a)(178) , substituted “section 1201(a)(10)” for “section 1201(6)” and “ 16 U.S.C. 3801(10) ” for “ 16 U.S.C. 3801(6) ”.\n2003—Subsec. (d).  Pub. L. 108–27  struck out “,\u2000341(e)(12),” after “170(e)”.\nAmendment by  Pub. L. 108–27  applicable, except as otherwise provided, to taxable years beginning after  Dec. 31, 2002 , see  section 302(f) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nPub. L. 99–514, title IV, §\u202f403(c) ,  Oct. 22, 1986 ,  100 Stat. 2222 , provided that:  “The amendments made by this section [enacting this section] shall apply to dispositions of converted wetland or highly erodible cropland (as defined in section 1257(c) of the Internal Revenue Code of 1986 as added by this section) first used for farming after  March 1, 1986 , in taxable years ending after that date.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'The term “applicable straddle” means any straddle (within the meaning of section 1092(c)).\nFor purposes of subparagraph (A), the term “built-in loss” means the loss (if any) which would have been realized if the position had been disposed of or otherwise terminated at its fair market value as of the time such position became part of the conversion transaction.\nIn determining the taxpayer’s net investment in any conversion transaction, there shall be included the fair market value of any position which becomes part of such transaction (determined as of the time such position became part of such transaction).\nThe term “options dealer” has the meaning given such term by section 1256(g)(8).\nThe term “commodities trader” means any person who is a member (or, except as otherwise provided in regulations, is entitled to trade as a member) of a domestic board of trade which is designated as a contract market by the Commodity Futures Trading Commission.\n2018—Subsec. (d)(5)(C).  Pub. L. 115–141  substituted “section 461(k)(4)” for “section 464(e)(2)” in introductory provisions.\n2004—Subsec. (d)(1).  Pub. L. 108–357  struck out “;\u2000except that the term ‘personal property’ shall include stock” before period at end.\nAmendment by  Pub. L. 108–357  applicable to positions established on or after  Oct. 22, 2004 , see  section 888(e) of Pub. L. 108–357 , set out as a note under  section 246 of this title .\nPub. L. 103–66, title XIII, §\u202f13206(a)(3) ,  Aug. 10, 1993 ,  107 Stat. 465 , as amended by  Pub. L. 104–188, title I, §\u202f1703(n)(11) ,  Aug. 20, 1996 ,  110 Stat. 1877 , provided that:  “The amendments made by this subsection [enacting this section] shall apply to conversion transactions entered into after  April 30, 1993 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'Except as provided in paragraph (2), the term “appreciated financial position” means any position with respect to any stock, debt instrument, or partnership interest if there would be gain were such position sold, assigned, or otherwise terminated at its fair market value.\nThe term “position” means an interest, including a futures or forward contract, short sale, or option.\nA taxpayer shall not be treated as having made a constructive sale solely because the taxpayer enters into a contract for sale of any stock, debt instrument, or partnership interest which is not a marketable security (as defined in section 453(f)) if the contract settles within 1 year after the date such contract is entered into.\nThe term “forward contract” means a contract to deliver a substantially fixed amount of property (including cash) for a substantially fixed price.\nFor purposes of this section, an interest in a trust which is actively traded (within the meaning of section 1092(d)(1)) shall be treated as stock unless substantially all (by value) of the property held by the trust is debt described in subsection (b)(2)(A).\nIf a taxpayer holds multiple positions in property, the determination of whether a specific transaction is a constructive sale and, if so, which appreciated financial position is deemed sold shall be made in the same manner as actual sales.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\n2004—Subsec. (c)(2).  Pub. L. 108–311, §\u202f406(e)(1) , substituted “A taxpayer shall not be treated as having made a constructive sale solely because the taxpayer enters into a contract” for “The term ‘constructive sale’ shall not include any contract”.\nSubsec. (c)(3)(A).  Pub. L. 108–311, §\u202f406(e)(2) , substituted “cause a constructive sale” for “be treated as a constructive sale” in introductory provisions.\nSubsec. (c)(3)(A)(i).  Pub. L. 108–311, §\u202f406(e)(3) , substituted “on or before” for “before the end of”.\nSubsec. (c)(3)(B).  Pub. L. 108–311, §\u202f406(e)(7) , substituted “certain closed transactions where risk of loss on appreciated financial position diminished” for “positions which are reestablished” in heading.\nSubsec. (c)(3)(B)(i).  Pub. L. 108–311, §\u202f406(e)(2) , substituted “cause a constructive sale” for “be treated as a constructive sale”.\nSubsec. (c)(3)(B)(ii).  Pub. L. 108–311, §\u202f406(e)(4) , struck out “substantially similar” after “another” in introductory provisions.\nSubsec. (c)(3)(B)(ii)(I).  Pub. L. 108–311, §\u202f406(e)(5) , amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “which also would otherwise be treated as a constructive sale of such position,”.\nSubsec. (c)(3)(B)(ii)(II).  Pub. L. 108–311, §\u202f406(e)(6) , inserted “on or” before “before the 30th day”.\n1998—Subsec. (b)(2)(A)(i) to (iii).  Pub. L. 105–206, §\u202f6010(a)(1)(A) , substituted “position” for “debt”.\nSubsec. (b)(2)(B), (C).  Pub. L. 105–206, §\u202f6010(a)(1)(B) , (C), added subpar. (B) and redesignated former subpar. (B) as (C).\nSubsec. (d)(1).  Pub. L. 105–206, §\u202f6010(a)(2) , inserted “(including cash)” after “property”.\nAmendment by  Pub. L. 108–311  effective as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 406(h) of Pub. L. 108–311 , set out as a note under  section 55 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nSection applicable to any constructive sale after  June 8, 1997 , with certain exceptions, see  section 1001(d) of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 475 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES'},
  'content': 'If any gain is treated as ordinary income for any taxable year by reason of subsection (a)(1), the tax imposed by this chapter for such taxable year shall be increased by the amount of interest determined under paragraph (2) with respect to each prior taxable year during any portion of which the constructive ownership transaction was open. Any amount payable under this paragraph shall be taken into account in computing the amount of any deduction allowable to the taxpayer for interest paid or accrued during such taxable year.\nThe amount of interest determined under this paragraph with respect to a prior taxable year is the amount of interest which would have been imposed under section 6601 on the underpayment of tax for such year which would have resulted if the gain (which is treated as ordinary income by reason of subsection (a)(1)) had been included in gross income in the taxable years in which it accrued (determined by treating the income as accruing at a constant rate equal to the applicable Federal rate as in effect on the day the transaction closed). The period during which such interest shall accrue shall end on the due date (without extensions) for the return of tax imposed by this chapter for the taxable year in which such transaction closed.\nFor purposes of paragraph (2), the applicable Federal rate is the applicable Federal rate determined under section 1274(d) (compounded semiannually) which would apply to a debt instrument with a term equal to the period the transaction was open.\nThis section shall not apply to any constructive ownership transaction if all of the positions which are part of such transaction are marked to market under any provision of this title or the regulations thereunder.\nThe term “forward contract” means any contract to acquire in the future (or provide or receive credit for the future value of) any financial asset.\nExcept as provided in regulations prescribed by the Secretary, if a constructive ownership transaction is closed by reason of taking delivery, this section shall be applied as if the taxpayer had sold all the contracts, options, or other positions which are part of such transaction for fair market value on the closing date. The amount of gain recognized under the preceding sentence shall not exceed the amount of gain treated as ordinary income under subsection (a). Proper adjustments shall be made in the amount of any gain or loss subsequently realized for gain recognized and treated as ordinary income under this subsection.\n2007—Subsec. (c)(2)(G).  Pub. L. 110–172  substituted “subsection (d)” for “subsection (e)” and inserted “and” at end.\n2004—Subsec. (c)(2)(H) to (J).  Pub. L. 108–357  redesignated subpar. (J) as (H) and struck out former subpars. (H) and (I), which included foreign personal holding company and foreign investment company (as defined in section 1246(b)) within definition of “pass-thru entity”.\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nPub. L. 106–170, title V, §\u202f534(c) ,  Dec. 17, 1999 ,  113 Stat. 1934 , provided that:  “The amendments made by this section [enacting this section] shall apply to transactions entered into after  July 11, 1999 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Amounts received by the holder on retirement of any debt instrument shall be considered as amounts received in exchange therefor.\nOn the sale or exchange of any short-term Government obligation, any gain realized which does not exceed an amount equal to the ratable share of the acquisition discount shall be treated as ordinary income.\nFor purposes of this paragraph, the term “short-term Government obligation” means any obligation of the United States or any of its possessions, or of a State or any political subdivision thereof, or of the District of Columbia, which has a fixed maturity date not more than 1 year from the date of issue. Such term does not include any tax-exempt obligation.\nFor purposes of this paragraph, the term “acquisition discount” means the excess of the stated redemption price at maturity over the taxpayer’s basis for the obligation.\nOn the sale or exchange of any short-term nongovernment obligation, any gain realized which does not exceed an amount equal to the ratable share of the original issue discount shall be treated as ordinary income.\nThis section shall not apply to any obligation issued by a natural person before  June 9, 1997 .\nParagraph (1) shall not apply to any obligation purchased (within the meaning of section 1272(d)(1))\u202f 1 1 \u202fSee References in Text note below.  after  June 8, 1997 .\nThis section and sections 1272 and 1286 shall not require the inclusion of any amount previously includible in gross income.\nSection 1272(d), referred to in subsec. (b)(2), was redesignated section 1272(c) by  Pub. L. 115–141, div. U, title IV, §\u202f401(c)(1)(B) ,  Mar. 23, 2018 ,  132 Stat. 1205 .\n2018—Subsec. (a)(2)(A)(ii).  Pub. L. 115–141, §\u202f401(c)(1)(D) , substituted “section 1272(a)(7)” for “subsection (a)(7) or (b)(4) of section 1272”.\nSubsec. (a)(2)(B).  Pub. L. 115–141, §\u202f401(c)(1)(A)(ii) , struck out “(and paragraph (2) of subsection (c))” after “This paragraph” in introductory provisions.\nSubsec. (b)(1).  Pub. L. 115–141, §\u202f401(c)(1)(E) , amended par. (1) generally. Prior to amendment, text read as follows: “This section shall not apply to—\n“(A) any obligation issued by a natural person before  June 9, 1997 , and\n“(B) any obligation issued before  July 2, 1982 , by an issuer which is not a corporation and is not a government or political subdivision thereof.”\nSubsecs. (c), (d).  Pub. L. 115–141, §\u202f401(c)(1)(A)(i) , redesignated subsec. (d) as (c) and struck out former subsec. (c) which related to special rule for certain obligations with respect to which original issue discount not currently includible.\n2014—Subsec. (c).  Pub. L. 113–295  amended subsec. (c) generally. Prior to amendment, subsec. (c) related to transition rules, including special rules for certain obligations issued before  Jan. 1, 1955 , and for certain obligations with respect to which original issue discount was not currently includible.\n1997—Subsec. (b).  Pub. L. 105–34  amended heading and text of subsec. (b) generally. Prior to amendment, text read as follows: “This section shall not apply to—\n“(1)  Natural persons .—Any obligation issued by a natural person.\n“(2)  Obligations issued before  July 2, 1982 , by certain issuers .—Any obligation issued before  July 2, 1982 , by an issuer which—\n“(A) is not a corporation, and\n“(B) is not a government or political subdivision thereof.”\n1988—Subsec. (a)(2)(A)(ii).  Pub. L. 100–647  substituted “subsection (a)(7)” for “subsection (a)(6)”.\n1986—Subsec. (a)(3)(B).  Pub. L. 99–514, §\u202f1803(a)(3) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “For purposes of this paragraph, the term ‘short-term Government obligation’ means any obligation of the United States or any of its possessions, or of a State or any political subdivision thereof, or of the District of Columbia which is—\n“(i) issued on a discount basis, and\n“(ii) payable without interest at a fixed maturity date not more than 1 year from the date of issue.\nSuch term does not include any tax-exempt obligation.”\nSubsec. (a)(3)(D).  Pub. L. 99–514, §\u202f1803(a)(2)(B) , inserted “except as provided in subparagraph (E),”.\nSubsec. (a)(3)(E).  Pub. L. 99–514, §\u202f1803(a)(2)(A) , added subpar. (E).\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1803(a)(1)(A) , added par. (4).\nAmendment by  Pub. L. 115–141  applicable to debt instruments issued on or after  July 2, 1982 , see  section 401(c)(1)(H) of Pub. L. 115–141 , set out as a note under  section 163 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title X, §\u202f1003(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 911 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to sales, exchanges, and retirements after the date of enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f44 ,  July 18, 1984 ,  98 Stat. 559 , as amended by  Pub. L. 98–612, §\u202f2 ,  Oct. 31, 1984 ,  98 Stat. 3182 ;  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1803(b),  Oct. 22, 1986 ,  100 Stat. 2095 , 2797, provided that: \n “(a)   General Rule .— Except as otherwise provided in this section, the amendments made by this subtitle [subtitle C (§§\u202f41–44) of title I of div. A of  Pub. L. 98–369 , enacting this section and sections 1272 to 1288 and 6706, amending sections 103A, 163, 165, 249, 341, 405, 409, 453B, 483, 751, 811, 871, 881, 1016, 1037, 1351, 1441, 6049, 7701, and 7805, and repealing sections 1232, 1232A, and 1232B of this title] shall apply to taxable years ending after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(b)   Treatment of Debt Instruments Received in Exchange for Property.— “(1)   In general.— “(A)  Except as otherwise provided in this subsection, section 1274 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by section 41) and the amendment made by section 41(b) (relating to amendment of section 483) shall apply to sales or exchanges after  December 31, 1984 . \n \n “(B)  Section 1274 of such Code and the amendment made by section 41(b) shall not apply to any sale or exchange pursuant to a written contract which was binding on  March 1, 1984 , and at all times thereafter before the sale or exchange. \n \n \n “(2)   Revision of section 482 regulations .— Not later than 180 days after the date of the enactment of this Act [ July 18, 1984 ], the Secretary of the Treasury or his delegate shall modify the safe harbor interest rates applicable under the regulations prescribed under section 482 of the Internal Revenue Code of 1986 so that such rates are consistent with the rates applicable under section 483 of such Code by reason of the amendments made by section 41. \n \n “(3)   Clarification of interest accrual; fair market value rule in case of potentially abusive situations.— “(A)   In general.— “(i)   Clarification of interest accrual .— In the case of any sale or exchange— \u2001\u2001\u2001\u2001\u2001“(I)  after  March 1, 1984 , nothing in section 483 of the Internal Revenue Code of 1986 shall permit any interest to be deductible before the period to which such interest is properly allocable, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  after  June 8, 1984 , notwithstanding section 483 of the Internal Revenue Code of 1986 or any other provision of law, no interest shall be deductible before the period to which such interest is properly allocable. \n \n \n “(ii)   Fair market rule .— In the case of any sale or exchange after  March 1, 1984 , such section 483 shall be treated as including provisions similar to the provisions of section 1274(b)(3) of such Code (as added by section 41). \n \n \n “(B)   Exception for binding contracts.— “(i)  Subparagraph (A)(i)(I) shall not apply to any sale or exchange pursuant to a written contract which was binding on  March 1, 1984 , and at all times thereafter before the sale or exchange. \n \n “(ii)  Subparagraph (A)(i)(II) shall not apply to any sale or exchange pursuant to a written contract which was binding on  June 8, 1984 , and at all times thereafter before the sale or exchange. \n \n \n “(C)   Interest accrual rule not to apply where substantially equal annual payments .— Clause (i) of subparagraph (A) shall not apply to any debt instrument with substantially equal annual payments. \n \n \n “(4)   Special rules for sales after  december 31, 1984 , and before  july 1, 1985 .— “(A)   In general .— In the case of any sale or exchange after  December 31, 1984 , and before  July 1, 1985 , of property other than new section 38 property— “(i)  sections 483(c)(1)(B) and 1274(c)(3) of the Internal Revenue Code of 1986 shall be applied by substituting the testing rate determined under subparagraph (B) for 110 percent of the applicable Federal rate determined under section 1274(d) of such Code, and \n \n “(ii)  sections 483(b) and 1274(b) of such Code shall be applied by substituting the imputation rate determined under subparagraph (C) for 120 percent of the applicable Federal rate determined under section 1274(d) of such Code. \n \n \n “(B)   Testing rate .— For purposes of this paragraph— “(i)   In general .— The testing rate determined under this subparagraph is the sum of— \u2001\u2001\u2001\u2001\u2001“(I)  9 percent, plus \n \n \u2001\u2001\u2001\u2001\u2001“(II)  if the borrowed amount exceeds $2,000,000, the excess determined under clause (ii) multiplied by a fraction the numerator of which is the borrowed amount to the extent it exceeds $2,000,000, and the denominator of which is the borrowed amount. \n \n \n “(ii)   Excess .— For purposes of clause (i), the excess determined under this clause is the excess of 110 percent of the applicable Federal rate determined under section 1274(d) of such Code over 9 percent. \n \n \n “(C)   Imputation rate .— For purposes of this paragraph— “(i)   In general .— The imputation rate determined under this subparagraph is the sum of— \u2001\u2001\u2001\u2001\u2001“(I)  10 percent, plus \n \n \u2001\u2001\u2001\u2001\u2001“(II)  if the borrowed amount exceeds $2,000,000, the excess determined under clause (ii) multiplied by a fraction the numerator of which is the borrowed amount to the extent it exceeds $2,000,000, and the denominator of which is the borrowed amount. \n \n \n “(ii)   Excess .— For purposes of clause (i), the excess determined under this clause is the excess of 120 percent of the applicable Federal rate determined under section 1274(d) of such Code over 10 percent. \n \n \n “(D)   Borrowed amount .— For purposes of this paragraph, the term ‘borrowed amount’ means the stated principal amount. \n \n “(E)   Aggregation rules .— For purposes of this paragraph— “(i)  all sales or exchanges which are part of the same transaction (or a series of related transactions) shall be treated as one sale or exchange, and \n \n “(ii)  all debt instruments arising from the same transaction (or a series of related transactions) shall be treated as one debt instrument. \n \n \n “(F)   Cash method of accounting .— In the case of any sale or exchange before  July 1, 1985 , of property (other than new section 38 property) used in the active business of farming and in which the borrowed amount does not exceed $2,000,000— “(i)  section 1274 of the Internal Revenue Code of 1986 shall not apply, and \n \n “(ii)  interest on the obligation issued in connection with such sale or exchange shall be taken into account by both buyer and seller on the cash receipts and disbursements method of accounting. \n \n \n\n The Secretary of the Treasury or his delegate may by regulation prescribe rules to prevent the mismatching of interest income and interest deductions in connection with obligations on which interest is computed on the cash receipts and disbursements method of accounting. \n “(G)   Clarification of application of this paragraph, etc .— This paragraph and paragraphs (5), (6), and (7) shall apply only in the case of sales or exchanges to which section 1274 or 483 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 41) applies. \n \n \n “(5)   General rule for assumptions of loans .— Except as provided in paragraphs (6) and (7), if any person— “(A)  assumes, in connection with the sale or exchange of property, any debt obligation, or \n \n “(B)  acquires any property subject to any debt obligation, \n \n\n sections 1274 and 483 of the Internal Revenue Code of 1986 shall apply to such debt obligation by reason of such assumption (or such acquisition). \n \n “(6)   Exception for assumptions of loans made on or before  october 15, 1984 .— “(A)   In general .— If any person— “(i)  assumes, in connection with the sale or exchange of property, any debt obligation described in subparagraph (B) and issued on or before  October 15, 1984 , or \n \n “(ii)  acquires any property subject to any such debt obligation issued on or before  October 15, 1984 , \n \n\n \u2001\u2001sections 1274 and 483 of the Internal Revenue Code of 1986 shall not be applied to such debt obligation by reason of such assumption (or such acquisition) unless the terms and conditions of such debt obligation are modified in connection with the assumption (or acquisition). \n \n “(B)   Obligations described in this subparagraph .— A debt obligation is described in this subparagraph if such obligation— “(i)  was issued on or before  October 15, 1984 , and \n \n “(ii)  was assumed (or property was taken subject to such obligation) in connection with the sale or exchange of property (including a deemed sale under section 338 (a)) the sales price of which is not greater than $100,000,000. \n \n \n “(C)   Regulations .— The Secretary shall prescribe such regulations as may be appropriate to effect the purpose of this paragraph and paragraph (5), including regulations relating to tax-exempt obligations, government subsidized loans, or other instruments. \n \n “(D)   Certain exempt transactions .— The Secretary shall prescribe regulations under which any transaction shall be exempt from the application of this paragraph if such exemption is not likely to significantly reduce the tax liability of the purchaser by reason of the overstatement of the adjusted basis of the acquired asset. \n \n \n “(7)   Exception for assumptions of loans with respect to certain property.— “(A)   In general .— If any person— “(i)  assumes, in connection with the sale or exchange of property described in subparagraph (B), any debt obligation, or \n \n “(ii)  acquires any such property subject to any such debt obligation, \n \n\n \u2001\u2001sections 1274 and 483 of the Internal Revenue Code of 1986 shall not be applied to such debt obligation by reason of such assumption (or such acquisition) unless the terms and conditions of such debt obligation are modified in connection with the assumption (or acquisition). \n \n “(B)   Sales or exchanges to which this paragraph applies .— This paragraph shall apply to any of the following sales or exchanges: “(i)   Residences .— Any sale or exchange of a residence by an individual, an estate, or a testamentary trust, but only if— \u2001\u2001\u2001\u2001\u2001“(I)  either— “(aa)  such residence on the date of such sale or exchange (or in the case of an estate or testamentary trust, on the date of death of the decedent) was the principal residence (within the meaning of section 1034) of the individual or decedent, or \n \n “(bb)  during the 2-year period ending on such date, no substantial portion of such residence was of a character subject to an allowance under this title [probably means the Internal Revenue Code of 1986] for depreciation (or amortization in lieu thereof) in the hands of such individual or decedent, and \n \n \n \u2001\u2001\u2001\u2001\u2001“(II)  such residence was not at any time, in the hands of such individual, estate, testamentary trust, or decedent, described in section 1221(1) (relating to inventory, etc.). \n \n \n “(ii)   Farms .— Any sale or exchange by a qualified person of— \u2001\u2001\u2001\u2001\u2001“(I)  real property which was used as a farm (within the meaning of section 6420(c)(2)) at all times during the 3-year period ending on the date of such sale or exchange, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  tangible personal property which was used in the active conduct of the trade or business of farming on such farm and is sold in connection with the sale of such farm, \n \n \n\n \u2001but only if such property is sold or exchanged for use in the active conduct of the trade or business of farming by the transferee of such property. \n “(iii)   Trades or businesses.— \u2001\u2001\u2001\u2001\u2001“(I)   In general .— Any sale or exchange by a qualified person of any trade or business. \n \n \u2001\u2001\u2001\u2001\u2001“(II)   Application with subparagraph (b) .— This subparagraph shall not apply to any sale or exchange of any property described in subparagraph (B). \n \n \u2001\u2001\u2001\u2001\u2001“(III)   New section 38 property .— This subparagraph shall not apply to the sale or exchange of any property which, in the hands of the transferee, is new section 38 property. \n \n \n “(iv)   Sale of business real estate .— Any sale or exchange of any real property used in an active trade or business by a person who would be a qualified person if he disposed of his entire interest. \n \n\n \u2001\u2001This subparagraph shall not apply to any transaction described in the last sentence of paragraph (6)(B) (relating to transaction in excess of $100,000,000). \n \n “(C)   Definitions .— For purposes of this paragraph— “(i)   Qualified person defined .— The term ‘qualified person’ means— \u2001\u2001\u2001\u2001\u2001“(I)  a person who— “(aa)  is an individual, estate, or testamentary trust, \n \n “(bb)  is a corporation which immediately prior to the date of the sale or exchange has 35 or fewer shareholders, or \n \n “(cc)  is a partnership which immediately prior to the date of the sale or exchange has 35 or fewer partners, \n \n \n \u2001\u2001\u2001\u2001\u2001“(II)  is a 10-percent owner of a farm or a trade or business, \n \n \u2001\u2001\u2001\u2001\u2001“(III)  pursuant to a plan, disposes of— “(aa)  an interest in a farm or farm property, or \n \n “(bb)  his entire interest in a trade or business and all substantially similar trades or businesses, and \n \n \n \u2001\u2001\u2001\u2001\u2001“(IV)  the ownership interest of whom may be readily established by reason of qualified allocations (of the type described in section 168(j)(9)(B), one class of stock, or the like). \n \n \n “(ii)  10- percent owner defined .— The term ‘10-percent owner’ means a person having at least a 10-percent ownership interest, applying the attribution rules of section 318 (other than subsection (a)(4)). \n \n “(iii)   Trade or business defined.— \u2001\u2001\u2001\u2001\u2001“(I)   In general .— The term ‘trade or business’ means any trade or business, including any line of business, qualifying as an active trade or business within the meaning of section 355. \n \n \u2001\u2001\u2001\u2001\u2001“(II)   Rental of real property .— For purposes of this clause, the holding of real property for rental shall not be treated as an active trade or business. \n \n \n \n \n \n “(c)   Market Discount Rules.— “(1)   Ordinary income treatment .— Section 1276 of the Internal Revenue Code of 1986 (as added by section 41) shall apply to obligations issued after the date of the enactment of this Act [ July 18, 1984 ] in taxable years ending after such date. \n \n “(2)   Interest deferral rules .— Section 1277 of such Code (as added by section 41) shall apply to obligations acquired after the date of the enactment of this Act in taxable years ending after such date. \n \n \n “(d)   Rules Relating to Discount on Short-Term Obligations .— Subpart C of part V of subchapter P of chapter 1 of such Code (as added by section 41) shall apply to obligations acquired after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(e)  5- Year Spread of Adjustments Required by Reason of Accrual of Discount on Certain Short-Term Obligations.— “(1)   Election to have section 1281 apply to all obligations held during taxable year .— A taxpayer may elect for his first taxable year ending after the date of the enactment of this Act [ July 18, 1984 ] to have section 1281 of the Internal Revenue Code of 1986 apply to all short-term obligations described in subsection (b) of such section which were held by the taxpayer at any time during such first taxable year. \n \n “(2)  5- year spread.— “(A)   In general .— In the case of any taxpayer who makes an election under paragraph (1)— “(i)  the provisions of section 1281 of the Internal Revenue Code of 1986 (as added by section 41) shall be treated as a change in the method of accounting of the taxpayer, \n \n “(ii)  such change shall be treated as having been made with the consent of the Secretary, and \n \n “(iii)  the net amount of the adjustments required by section 481(a) of such Code to be taken into account by the taxpayer in computing taxable income (hereinafter in this paragraph referred to as the ‘net adjustments’) shall be taken into account during the spread period with the amount taken into account in each taxable year in such period determined under subparagraph (B). \n \n \n “(B)   Amount taken into account during each year of spread period.— “(i)   First year .— The amount taken into account for the first taxable year in the spread period shall be the sum of— \u2001\u2001\u2001\u2001\u2001“(I)  one-fifth of the net adjustments, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the excess (if any) of— \n \n \n \n \n \n “(a)  the cash basis income over the accrual basis income, over \n \n “(b)  one-fifth of the net adjustments. \n \n “(ii)   For subsequent years in spread period .— The amount taken into account in the second or any succeeding taxable year in the spread period shall be the sum of— \u2001\u2001\u2001\u2001\u2001“(I)  the portion of the net adjustments not taken into account in the preceding taxable year of the spread period divided by the number of remaining taxable years in the spread period (including the year for which the determination is being made), and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the excess (if any) of— \n \n \n “(a)  the excess of the cash basis income over the accrual basis income, over \n \n “(b)  one-fifth of the net adjustments, multiplied by 5 minus the number of years remaining in the spread period (not including the current year). \n \n\n \u2001The excess described in subparagraph (B)(ii)(II)(a) shall be reduced by any amount taken into account under this subclause or clause (i)(II) in any prior year. \n “(C)   Spread period .— For purposes of this paragraph, the term ‘spread period’ means the period consisting of the 5 taxable years beginning with the year for which the election is made under paragraph (1). \n \n “(D)   Cash basis income .— For purposes of this paragraph, the term ‘cash basis income’ means for any taxable year the aggregate amount which would be includible in the gross income of the taxpayer with respect to short-term obligations described in subsection (b) of section 1281 of such Code if the provisions of section 1281 of such Code did not apply to such taxable year and all prior taxable years within the spread period. \n \n “(E)   Accrual basis income .— For purposes of this paragraph, the term ‘accrual basis income’ means for any taxable year the aggregate amount includible in gross income under section 1281(a) of such Code for such a taxable year and all prior taxable years within the spread period. “(f)   Treatment of Original Issue Discount on Tax-Exempt Obligations .— Section 1288 of such Code (as added by section 41) shall apply to obligations issued after  September 3, 1982 , and acquired after  March 1, 1984 . \n \n “(g)   Repeal of Capital Asset Requirement .— Section 1272 of such Code (as added by section 41) shall not apply to any obligation issued on or before  December 31, 1984 , which is not a capital asset in the hands of the taxpayer. \n \n “(h)   Reporting Requirements .— Section 1275(c) of such Code (as added by section 41) and the amendments made by section 41(c) [enacting  section 6706 of this title ] shall take effect on the day 30 days after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(i)   Other Miscellaneous Changes.— “(1)   Accrual period .— In the case of any obligation issued after  July 1, 1982 , and before  January 1, 1985 , the accrual period, for purposes of section 1272(a) of the Internal Revenue Code of 1986 (as amended by section 41(a)), shall be a 1-year period (or shorter period to maturity) beginning on the day in the calendar year which corresponds to the date of original issue of the obligation. \n \n “(2)   Change in reduction for purchase after original issue .— Section 1272(a)(6) of such Code (as so amended) shall not apply to any purchase on or before the date of the enactment of this Act [ July 18, 1984 ], and the rules of section 1232A(a)(6) of such Code (as in effect on the day before the date of the enactment of this Act) shall continue to apply to such purchase. \n \n \n “(j)   Clarification That Prior Effective Date Rules Not Affected .— Nothing in the amendment made by section 41(a) shall affect the application of any effective date provision (including any transitional rule) for any provision which was a predecessor to any provision contained in part V of subchapter P of chapter 1 of the Internal Revenue Code of 1954 (as added by section 41).”\n[Amendment of  section 44 of Pub. L. 98–369 , set out above, by  Pub. L. 98–612  (which added pars. (4) to (7) to subsec. (b)) not applicable to sales and exchanges after  June 30, 1985 , in taxable years ending after such date, see  section 105(a)(1) of Pub. L. 99–121 , set out as an Effective Date of 1985 Amendment note under  section 1274 of this title .]\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'For purposes of this title, there shall be included in the gross income of the holder of any debt instrument having original issue discount, an amount equal to the sum of the daily portions of the original issue discount for each day during the taxable year on which such holder held such debt instrument.\nAny tax-exempt obligation.\nAny United States savings bond.\nAny debt instrument which has a fixed maturity date not more than 1 year from the date of issue.\nClause (i) shall not apply if the loan has as 1 of its principal purposes the avoidance of any Federal tax.\nFor purposes of this subparagraph, a husband and wife shall be treated as 1 person. The preceding sentence shall not apply where the spouses lived apart at all times during the taxable year in which the loan is made.\nExcept as otherwise provided in regulations prescribed by the Secretary, the term “accrual period” means a 6-month period (or shorter period from the date of original issue of the debt instrument) which ends on a day in the calendar year corresponding to the maturity date of the debt instrument or the date 6 months before such maturity date.\nFor purposes of this subsection, in the case of any purchase after its original issue of a debt instrument to which this subsection applies, the daily portion for any day shall be reduced by an amount equal to the amount which would be the daily portion for such day (without regard to this paragraph) multiplied by the fraction determined under subparagraph (B).\nThe basis of any debt instrument in the hands of the holder thereof shall be increased by the amount included in his gross income pursuant to this section.\n2018—Subsec. (a).  Pub. L. 115–141, §\u202f401(c)(1)(F)(i) , struck out “on debt instruments issued after  July 1, 1982 ,” after “discount” in heading.\nSubsec. (a)(1).  Pub. L. 115–141, §\u202f401(c)(1)(F)(ii) , struck out “issued after  July 1, 1982 ” before “,\u2000an amount equal to”.\nSubsec. (a)(2)(D), (E).  Pub. L. 115–141, §\u202f401(c)(3)(A) , redesignated subpar. (E) as (D) and struck out former subpar. (D). Prior to amendment, text of subpar. (D) read as follows: “Any obligation issued by a natural person before  March 2, 1984 .”\nSubsecs. (b) to (d).  Pub. L. 115–141, §\u202f401(c)(1)(B) , redesignated subsecs. (c) and (d) as (b) and (c), respectively, and struck out former subsec. (b) which related to ratable inclusion retained for corporate debt instruments issued before  July 2, 1982 .\n1997—Subsec. (a)(6)(C).  Pub. L. 105–34  added cl. (iii) and concluding provisions.\n1986—Subsec. (a)(6), (7).  Pub. L. 99–514  added par. (6) and redesignated former par. (6) as (7).\nAmendment by section 401(c)(1)(B), (F) of  Pub. L. 115–141  applicable to debt instruments issued on or after  July 2, 1982 , see  section 401(c)(1)(H) of Pub. L. 115–141 , set out as a note under  section 163 of this title .\nAmendment by  section 401(c)(3)(A) of Pub. L. 115–141  applicable to obligations issued on or after  Mar. 2, 1984 , see  section 401(c)(3)(C) of Pub. L. 115–141 , set out as a note under  section 163 of this title .\nPub. L. 105–34, title X, §\u202f1004(b)(1) ,  Aug. 5, 1997 ,  111 Stat. 911 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 99–514  applicable to debt instruments issued after  Dec. 31, 1986 , in taxable years ending after such date, see  section 675(b) of Pub. L. 99–514 , set out as an Effective Date note under  section 860A of this title .\nSection applicable to taxable years ending after  July 18, 1984 , but not applicable to any obligation issued on or before  Dec. 31, 1984 , which is not a capital asset in the hands of the taxpayer, and subsec. (a)(6) of this section not applicable to any purchase on or before  July 18, 1984 , see  section 44 of Pub. L. 98–369 , as amended, set out as a note under  section 1271 of this title .\nPub. L. 105–34, title X, §\u202f1004(b)(2) ,  Aug. 5, 1997 ,  111 Stat. 911 , provided that:  \n “In the case of any taxpayer required by this section [amending this section and enacting provisions set out as a note above] to change its method of accounting for its first taxable year beginning after the date of the enactment of this Act [ Aug. 5, 1997 ]— \n “(A)  such change shall be treated as initiated by the taxpayer, \n \n “(B)  such change shall be treated as made with the consent of the Secretary of the Treasury, and \n \n “(C)  the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the 4-taxable year period beginning with such first taxable year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'The term “stated redemption price at maturity” means the amount fixed by the last modification of the purchase agreement and includes interest and other amounts payable at that time (other than any interest based on a fixed rate, and payable unconditionally at fixed periodic intervals of 1 year or less during the entire term of the debt instrument).\nIn the case of any issue of debt instruments not issued for property and not publicly offered, the issue price of each such instrument is the price paid by the first buyer of such debt instrument.\nIn applying this subsection, the term “property” includes services and the right to use property, but such term does not include money.\nThe terms “initial offering price” and “price paid by the first buyer” include the aggregate payments made by the purchaser under the purchase agreement, including modifications thereof.\n1986—Subsec. (b)(3)(B).  Pub. L. 99–514  amended subpar. (B) generally, designating existing provisions as cl. (i) and adding cl. (ii).\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , except as otherwise provided, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Except as provided in paragraph (3), the imputed principal amount of any debt instrument shall be equal to the sum of the present values of all payments due under such debt instrument.\nIn the case of any potentially abusive situation, the imputed principal amount of any debt instrument received in exchange for property shall be the fair market value of such property adjusted to take into account other consideration involved in the transaction.\nFor purposes of this section, there is adequate stated interest with respect to any debt instrument if the stated principal amount for such debt instrument is less than or equal to the imputed principal amount of such debt instrument determined under subsection (b).\nClause (i) shall apply only if it can be determined at the time of the sale or exchange that the sales price cannot exceed $1,000,000. For purposes of the preceding sentence, all sales and exchanges which are part of the same transaction (or a series of related transactions) shall be treated as 1 sale or exchange.\nAny debt instrument arising from the sale or exchange by an individual of his principal residence (within the meaning of section 121).\nFor purposes of clause (i), any consideration (other than a debt instrument) shall be taken into account at its fair market value.\nFor purposes of this subparagraph, all sales and exchanges which are part of the same transaction (or a series of related transactions) shall be treated as 1 sale or exchange.\nAny debt instrument to which section 1273(b)(3) applies.\nIn the case of any transfer described in section 1235(a) (relating to sale or exchange of patents), any amount contingent on the productivity, use, or disposition of the property transferred.\nAny debt instrument to the extent section 483(e) (relating to certain land transfers between related persons) applies to such instrument.\nDuring each calendar month, the Secretary shall determine the Federal short-term rate, mid-term rate, and long-term rate which shall apply during the following calendar month.\nThe Federal short-term rate shall be the rate determined by the Secretary based on the average market yield (during any 1-month period selected by the Secretary and ending in the calendar month in which the determination is made) on outstanding marketable obligations of the United States with remaining periods to maturity of 3 years or less.\nThe Federal mid-term and long-term rate shall be determined in accordance with the principles of clause (i).\nThe Secretary may by regulations permit a rate to be used with respect to any debt instrument which is lower than the applicable Federal rate if the taxpayer establishes to the satisfaction of the Secretary that such lower rate is based on the same principles as the applicable Federal rate and is appropriate for the term of such instrument.\nIn the case of any sale or exchange, the applicable Federal rate shall be the lowest 3-month rate.\nFor purposes of subparagraph (A), the term “lowest 3-month rate” means the lowest of the applicable Federal rates in effect for any month in the 3-calendar-month period ending with the 1st calendar month in which there is a binding contract in writing for such sale or exchange.\nIn determining the term of a debt instrument for purposes of this subsection, under regulations prescribed by the Secretary, there shall be taken into account options to renew or extend.\nIn the case of any debt instrument to which this subsection applies, the discount rate used under subsection (b)(2)(B) or section 483(b) shall be 110 percent of the applicable Federal rate, compounded semiannually.\nSection 1274A shall not apply to any debt instrument to which this subsection applies.\nThis subsection shall apply to any debt instrument given in consideration for the sale or exchange of any property if, pursuant to a plan, the transferor or any related person leases a portion of such property after such sale or exchange.\n2018—Subsec. (b)(3)(B)(i).  Pub. L. 115–141  substituted “section 6662(d)(2)(C)(ii)” for “section 6662(d)(2)(C)(iii)”.\n1997—Subsec. (c)(3)(B).  Pub. L. 105–34  substituted “section 121” for “section 1034”.\n1996—Subsec. (b)(3)(B)(i).  Pub. L. 104–188  substituted “section 6662(d)(2)(C)(iii)” for “section 6662(d)(2)(C)(ii)”.\n1989—Subsec. (b)(3)(B)(i).  Pub. L. 101–239  substituted “section 6662(d)(2)(C)(ii)” for “section 6661(b)(2)(C)(ii)”.\n1986—Subsec. (c)(3)(A).  Pub. L. 99–514  substituted “for $1,000,000 or less” for “for less than $1,000,000” in heading of subsec. (c)(4)(A) as so designated prior to its redesignation as subsec. (c)(3)(A) by  Pub. L. 99–121, §\u202f101(a)(1)(D) , see 1985 Amendment note below.\n1985—Subsec. (b)(2)(B).  Pub. L. 99–121, §\u202f101(a)(1)(A) , struck out “120 percent of” after “rate equal to”.\nSubsec. (c)(1)(A)(ii).  Pub. L. 99–121, §\u202f101(a)(1)(B) , amended cl. (ii) generally, substituting “the imputed principal amount of such debt instrument determined under subsection (b)” for “the testing amount”.\nSubsec. (c)(2).  Pub. L. 99–121, §\u202f101(a)(1)(C) , substituted “the imputed principal amount of such debt instrument determined under subsection (b)” for “the testing amount”.\nSubsec. (c)(3).  Pub. L. 99–121, §\u202f101(a)(1)(D) , redesignated par. (4) as (3). Former par. (3), defining “testing amount”, was struck out.\nSubsec. (c)(4).  Pub. L. 99–121, §\u202f102(b) , added par. (4). Former par. (4) redesignated (3).\nSubsec. (d)(1)(B) to (D).  Pub. L. 99–121, §\u202f101(b)(1) , amended subpars. (B) to (D) generally, in subpar. (B) substituting provisions setting a monthly schedule for the determination of Federal rates for provisions which had formerly set a semi-annual schedule for the determination of such rates, in subpar. (C) substituting provisions setting a monthly schedule for the determination of Federal short-term, mid-term, and long-term rates based on the average market yield during any 1-month period ending in the month in which the determination is made for former provisions which had directed that the Federal rate determined under subpar. (A) apply during the appropriate 6-month period, and in subpar. (D) substituting provisions allowing a lower rate in certain cases for provisions relating to the setting of the Federal rate for any 6-month period.\nSubsec. (d)(2).  Pub. L. 99–121, §\u202f101(b)(2) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “In the case of any sale or exchange, the determination of the applicable Federal rate shall be made as of the first day on which there is a binding contract in writing for the sale or exchange.”\nSubsec. (e).  Pub. L. 99–121, §\u202f101(c) , added subsec. (e).\nAmendment by  Pub. L. 105–34  applicable to sales and exchanges after  May 6, 1997 , with certain exceptions, see  section 312(d) of Pub. L. 105–34 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 101–239  applicable to returns the due date for which (determined without regard to extensions) is after  Dec. 31, 1989 , see  section 7721(d) of Pub. L. 101–239 , set out as a note under  section 461 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–121, title I, §\u202f105(a) ,  Oct. 11, 1985 ,  99 Stat. 510 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by sections 101 and 102 [enacting section 1274A and amending this section and sections 280G and 483 of this title] shall apply to sales and exchanges after  June 30, 1985 , in taxable years ending after such date. The amendment made by  section 2 of Public Law 98–612  [amending  section 44(b) of Pub. L. 98–369 , set out as a note under  section 1271 of this title ] shall not apply to sales and exchanges after  June 30, 1985 , in taxable years ending after such date. \n \n “(2)   Regulatory authority to establish lower rate .— Section 1274(d)(1)(D) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by section 101(b), shall apply as if included in the amendments made by section 41 of the Tax Reform Act of 1984 [ Pub. L. 98–369 , see Effective Date note set out under  section 1271 of this title ].”\nSection applicable to taxable years ending after  July 18, 1984 , and applicable to sales or exchanges after  Dec. 31, 1984 , but not applicable to any sale or exchange pursuant to a written contract which was binding on  Mar. 1, 1984 , and at all times thereafter before the sale or exchange, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nProvisions respecting treatment of debt instruments received in exchange for property, relating to special rules for sales after  Dec. 31, 1984 , and before  July 1, 1985 , general rule for assumptions of loans, exception for assumptions of loans made on or before  Oct. 15, 1984 , and exception for assumptions of loans with respect to certain property, see section 44(b)(4)–(7) of  Pub. L. 98–369 , as amended, set out as an Effective Date note under  section 1271 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'In the case of any qualified debt instrument, the discount rate used for purposes of sections 483 and 1274 shall not exceed 9 percent, compounded semiannually.\nFor purposes of this section, the term “qualified debt instrument” means any debt instrument given in consideration for the sale or exchange of property (other than new section 38 property within the meaning of section 48(b), as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) if the stated principal amount of such instrument does not exceed $2,800,000.\nExcept as provided in subparagraph (B), paragraph (1) shall apply to any successor to the borrower or lender with respect to a cash method debt instrument.\nIf the lender (or any successor) transfers any cash method debt instrument to a taxpayer who uses an accrual method of accounting, this paragraph shall not apply with respect to such instrument for periods after such transfer.\nIn the case of any cash method debt instrument, section 483 shall be applied as if it included provisions similar to the provisions of section 1274(b)(3).\nFor inflation adjustment of certain items in this section, see Revenue Rulings listed in a table below and Revenue Procedures listed in a table under  section 1 of this title .\nThe date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b), is the date of enactment of  Pub. L. 101–508 , which was approved  Nov. 5, 1990 .\n2017—Subsec. (d)(2).  Pub. L. 115–97  amended par. (2) generally. Prior to amendment, text read as follows:\n“(A)  In general .—In the case of any debt instrument arising out of a sale or exchange during any calendar year after 1989, each dollar amount contained in the preceding provisions of this section shall be increased by the inflation adjustment for such calendar year. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or, if such increase is a multiple of $50, such increase shall be increased to the nearest multiple of $100).\n“(B)  Inflation adjustment .—For purposes of subparagraph (A), the inflation adjustment for any calendar year is the percentage (if any) by which—\n“(i) the CPI for the preceding calendar year exceeds\n“(ii) the CPI for calendar year 1988.\nFor purposes of the preceding sentence, the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on September 30 of such calendar year.”\n1996—Subsec. (c)(1)(B).  Pub. L. 104–188  substituted “instrument” for “instument”.\n1990—Subsec. (b).  Pub. L. 101–508  inserted “,\u2000as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990” after “section 48(b)”.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nSection applicable to sales and exchanges after  June 30, 1985 , in taxable years ending after such date, see  section 105(a)(1) of Pub. L. 99–121 , set out as an Effective Date of 1985 Amendment note under  section 1274 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPer Revenue Procedure 2018–57, after 2018, a separate Revenue Ruling relating to inflation-adjusted amounts under this section will not be published. Starting with 2019, see the table of Revenue Procedures set out under  section 1 of this title . Provisions relating to inflation adjustment of items in this section for years before 2019 were contained in the following:\n2018—Revenue Ruling 2018–11.\n2017—Revenue Ruling 2016–30.\n2016—Revenue Ruling 2015–24.\n2015—Revenue Ruling 2014–30.\n2014—Revenue Ruling 2013–23.\n2013—Revenue Ruling 2012–33.\n2012—Revenue Ruling 2011–27.\n2011—Revenue Ruling 2010–30.\n2010—Revenue Ruling 2010–2.\n2009—Revenue Ruling 2008–52.\n2008—Revenue Ruling 2008–3.\n2007—Revenue Ruling 2007–4.\n2006—Revenue Ruling 2005–76.\n2005—Revenue Ruling 2004–107.\n2004—Revenue Ruling 2003–119.\n2003—Revenue Ruling 2002–79.\n2002—Revenue Ruling 2001–65.\n2001—Revenue Ruling 2000–55.\n2000—Revenue Ruling 99–50.\n1999—Revenue Ruling 98–58.\n1998—Revenue Ruling 97–56.\n1997—Revenue Ruling 96–63.\n1996—Revenue Ruling 96–4.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Except as provided in subparagraph (B), the term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness.\nIn the case of any debt instrument which is publicly offered, the term “date of original issue” means the date on which the issue was first issued to the public.\nIn the case of any debt instrument to which section 1273(b)(2) applies, the term “date of original issue” means the date on which the debt instrument was sold by the issuer.\nIn the case of any debt instrument not described in subparagraph (A) or (B), the term “date of original issue” means the date on which the debt instrument was issued in a sale or exchange.\nAny debt obligation of a corporation distributed by such corporation with respect to its stock shall be treated as if it had been issued by such corporation for property.\nIn the case of the obligor under any debt instrument given in consideration for the sale or exchange of property, sections 1274 and 483 shall not apply if such property is personal use property.\nFor purposes of this subsection, the term “personal use property” means any property substantially all of the use of which by the taxpayer is not in connection with a trade or business of the taxpayer or an activity described in section 212. The determination of whether property is described in the preceding sentence shall be made as of the time of issuance of the debt instrument.\nIn the case of any issue of debt instruments not publicly offered, the regulations prescribed under subparagraph (A) shall not require the information to be set forth on the debt instrument before any disposition of such instrument by the first buyer.\nThis subsection shall not apply to any obligation referred to in section 1272(a)(2) (relating to exceptions from current inclusion of original issue discount).\nFor civil penalty for failure to meet requirements of this subsection, see section 6706.\nThe Secretary may prescribe regulations providing that where, by reason of varying rates of interest, put or call options, indefinite maturities, contingent payments, assumptions of debt instruments, or other circumstances, the tax treatment under this subpart (or section 163(e)) does not carry out the purposes of this subpart (or section 163(e)), such treatment shall be modified to the extent appropriate to carry out the purposes of this subpart (or section 163(e)).\n2000—Subsec. (a)(1)(B)(ii).  Pub. L. 106–554 , in introductory provisions, substituted “subchapter L (or by an entity described in section 501(c) and exempt from tax under section 501(a) which would be subject to tax under subchapter L were it not so exempt)” for “subchapter L”.\n1990—Subsec. (a)(4), (5).  Pub. L. 101–508  redesignated par. (5) as (4) and struck out former par. (4) which related to a special rule for determination of issue price in case of exchange of debt instruments in re\xadorganization.\n1988—Subsec. (a)(4)(B)(ii)(I).  Pub. L. 100–647  substituted “subsection (a)(7)” for “subsection (a)(6)”.\n1986—Subsec. (a)(4), (5).  Pub. L. 99–514  redesignated par. (4), relating to treatment of obligations distributed to corporations, as (5), and substituted “by corporations” for “to corporations” in heading.\n1984—Subsec. (a)(4).  Pub. L. 98–369, §\u202f61(c)(2) , added par. (4) relating to treatment of obligations distributed to corporations.\nPub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f318(c)(2)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–645, provided that:  “The amendment made by this subsection [amending this section] shall take effect as if included in the amendments made by section 41 of the Tax Reform Act of 1984 [ Pub. L. 98–369, div. A ].”\nAmendment by  Pub. L. 101–508  applicable, with certain exceptions, to debt instruments issued and stock transferred after  Oct. 1, 1990 , in satisfaction of any indebtedness, see  section 11325(c) of Pub. L. 101–508 , set out as a note under  section 108 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable with respect to distributions declared  Mar. 15, 1984 , in taxable years ending after that date, see  section 61(e)(3) of Pub. L. 98–369 , set out as a note under  section 312 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , but subsec. (c) of this section effective on the day 30 days after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Except as otherwise provided in this section, gain on the disposition of any market discount bond shall be treated as ordinary income to the extent it does not exceed the accrued market discount on such bond. Such gain shall be recognized notwithstanding any other provision of this subtitle.\nFor purposes of paragraph (1), a person disposing of any market discount bond in any transaction other than a sale, exchange, or involuntary conversion shall be treated as realizing an amount equal to the fair market value of the bond.\nAny partial principal payment on a market discount bond shall be included in gross income as ordinary income to the extent such payment does not exceed the accrued market discount on such bond.\nIf subparagraph (A) applies to any partial principal payment on any market discount bond, for purposes of applying this section to any disposition of (or subsequent partial principal payment on) such bond, the amount of accrued market discount shall be reduced by the amount of such partial principal payment included in gross income under subparagraph (A).\nExcept for purposes of sections 103, 871(a), 881, 1441, 1442, and 6049 (and such other provisions as may be specified in regulations), any amount treated as ordinary income under paragraph (1) or (3) shall be treated as interest for purposes of this title.\nAn election under subparagraph (A), once made with respect to any bond, shall be irrevocable.\nIn the case of a bond the principal of which may be paid in 2 or more payments, the amount of accrued market discount shall be determined under regulations prescribed by the Secretary.\nFor purposes of paragraph (1), if the basis of any market discount bond in the hands of a transferee is determined under section 732(a), or 732(b), such property shall be treated as transferred basis property in the hands of such transferee.\n2018—Subsec. (a)(4).  Pub. L. 115–141  substituted “871(a),” for “871(a),,”.\n1993—Subsec. (a)(4).  Pub. L. 103–66, §\u202f13206(b)(2)(B)(i) , substituted “sections 103, 871(a),” for “sections 871(a)”.\nSubsec. (e).  Pub. L. 103–66, §\u202f13206(b)(1)(A) , struck out heading and text of subsec. (e). Text read as follows: “This section shall not apply to any market discount bond issued on or before  July 18, 1984 .”\n1988—Subsec. (b)(3).  Pub. L. 100–647  designated paragraph relating to special rule where there are partial principal payments as par. (3) and inserted period at end.\n1986—Subsec. (a)(3).  Pub. L. 99–514, §\u202f1803(a)(13)(A)(i) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1803(a)(13)(A)(i) , (ii), redesignated par. (3) as (4) and substituted “under paragraph (1) or (3)” for “under paragraph (1)”.\nSubsec. (b).  Pub. L. 99–514, §\u202f1803(a)(13)(A)(iii) , added undesignated par. at end relating to special rule where partial principal payments.\nSubsec. (c)(3).  Pub. L. 99–514, §\u202f631(e)(15) , struck out reference to section 334(c).\nSubsec. (d)(1)(C).  Pub. L. 99–514, §\u202f1803(a)(5) , added subpar. (C).\nSubsec. (e).  Pub. L. 99–514, §\u202f1899A(28) , substituted “ July 18, 1984 ” for “the date of the enactment of this section”.\nPub. L. 103–66, title XIII, §\u202f13206(b)(3) ,  Aug. 10, 1993 ,  107 Stat. 465 , provided that:  “The amendments made by this section [probably should be “subsection”, which amended this section and sections 1277 and 1278 of this title] shall apply to obligations purchased (within the meaning of section 1272(d)(1) of the Internal Revenue Code of 1986) after  April 30, 1993 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 631(e)(15) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 1803(a)(5) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1803(a)(13)(C) ,  Oct. 22, 1986 ,  100 Stat. 2797 , provided that:  “The amendments made by this paragraph [amending this section and  section 1286 of this title ] shall apply to obligations acquired after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nSection applicable to taxable years ending after  July 18, 1984 , and applicable to obligations issued after  July 18, 1984 , in taxable years ending after such date, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Except as otherwise provided in this section, the net direct interest expense with respect to any market discount bond shall be allowed as a deduction for the taxable year only to the extent that such expense exceeds the portion of the market discount allocable to the days during the taxable year on which such bond was held by the taxpayer (as determined under the rules of section 1276(b)).\nFor purposes of this paragraph, the term “net interest income” means the excess of the amount determined under paragraph (2) of subsection (c) over the amount determined under paragraph (1) of subsection (c).\nExcept as otherwise provided in this paragraph, the amount of the disallowed interest expense with respect to any market discount bond shall be treated as interest paid or accrued by the taxpayer in the taxable year in which such bond is disposed of.\nFor purposes of this paragraph, the amount of the disallowed interest expense shall not include any amount previously taken into account under paragraph (1).\nFor purposes of this subsection, the term “disallowed interest expense” means the aggregate amount disallowed under subsection (a) with respect to the market discount bond.\n1996—Subsec. (c).  Pub. L. 104–188  struck out “or to which section 593 applies” after “585(a)(2))” in closing provisions.\n1993—Subsec. (d).  Pub. L. 103–66  struck out heading and text of subsec. (d). Text read as follows: “In the case of a market discount bond issued on or before  July 18, 1984 , any gain recognized by the taxpayer on any disposition of such bond shall be treated as ordinary income to the extent the amount of such gain does not exceed the amount allowable with respect to such bond under subsection (b)(2) for the taxable year in which such bond is disposed of.”\n1988—Subsec. (c).  Pub. L. 100–647  inserted a closing parenthesis after “section 585(a)(2)”.\n1986—Subsec. (b)(1)(C).  Pub. L. 99–514, §\u202f1899A(29) , substituted “this paragraph” for “this paragaph”.\nSubsec. (b)(2)(C).  Pub. L. 99–514, §\u202f1899A(30) , substituted “paragraph (1)” for “paragraph 1” in heading.\nSubsec. (c).  Pub. L. 99–514, §\u202f901(d)(4)(F) , substituted “which is a bank (as defined in section 585(a)(2) or to which section 593 applies” for “to which section 585 or 593 applies”.\nPub. L. 99–514, §\u202f902(e)(2) , substituted “section 265(a)(5)” for “section 265(5)”.\nSubsec. (d).  Pub. L. 99–514, §\u202f1899A(31) , substituted “ July 18, 1984 ” for “the date of the enactment of this section”.\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 103–66  applicable to obligations purchased (within the meaning of section 1272(d)(1) [now 1272(c)(1)] of this title) after  Apr. 30, 1993 , see  section 13206(b)(3) of Pub. L. 103–66 , set out as a note under  section 1276 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 901(d)(4)(F) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nAmendment by  section 902(e)(2) of Pub. L. 99–514  applicable to taxable years ending after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 902(f) of Pub. L. 99–514 , set out as a note under  section 265 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , and applicable to obligations acquired after  July 18, 1984 , in taxable years ending after such date, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Except as provided in subparagraph (B), the term “market discount bond” means any bond having market discount.\nAny obligation with a fixed maturity date not exceeding 1 year from the date of issue.\nAny United States savings bond.\nAny installment obligation to which section 453B applies.\nFor purposes of section 1277, the term “market discount bond” shall not include any tax-exempt obligation (as defined in section 1275(a)(3)).\nExcept as otherwise provided in this subparagraph or in regulations, the term “market discount bond” shall not include any bond acquired by the taxpayer at its original issue.\nClause (i) shall not apply to any bond issued pursuant to a plan of reorganization (within the meaning of section 368(a)(1)) in exchange for another bond having market discount. Solely for purposes of section 1276, the preceding sentence shall not apply if such other bond was issued on or before  July 18, 1984  (the date of the enactment of section 1276) and if the bond issued pursuant to such plan of reorganization has the same term and the same interest rate as such other bond had.\nFor purposes of clause (i), if the adjusted basis of any bond in the hands of the taxpayer is determined by reference to the adjusted basis of such bond in the hands of a person who acquired such bond at its original issue, such bond shall be treated as acquired by the taxpayer at its original issue.\nIn the case of any bond having original issue discount, for purposes of subparagraph (A), the stated redemption price of such bond at maturity shall be treated as equal to its revised issue price.\nIf the market discount is less than ¼ of 1 percent of the stated redemption price of the bond at maturity multiplied by the number of complete years to maturity (after the taxpayer acquired the bond), then the market discount shall be considered to be zero.\nThe term “bond” means any bond, debenture, note, certificate, or other evidence of indebtedness.\nThe terms “original issue discount”, “stated redemption price at maturity”, and “issue price” have the respective meanings given such terms by subpart A of this part.\nAn election under this subsection shall apply to all market discount bonds acquired by the taxpayer on or after the 1st day of the 1st taxable year to which such election applies.\nAn election under this subsection shall apply to the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election.\nThe basis of any bond in the hands of the taxpayer shall be increased by the amount included in gross income pursuant to this subsection.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subpart, including regulations providing proper adjustments in the case of a bond the principal of which may be paid in 2 or more payments.\n2018—Subsec. (a)(4)(B).  Pub. L. 115–141, §\u202f401(c)(1)(G) , struck out “or (b)(4)” after “1272(a)(7)”.\nSubsec. (b)(1).  Pub. L. 115–141, §\u202f401(a)(181) , substituted “871(a),” for “871(a),,” in concluding provisions.\n1993—Subsec. (a)(1)(B)(ii)–(iv).  Pub. L. 103–66, §\u202f13206(b)(2)(A)(i) , redesignated cls. (iii) and (iv) as (ii) and (iii), respectively, and struck out heading and text of former cl. (ii). Text read as follows: “Any tax-exempt obligation (as defined in section 1275(a)(3)).”\nSubsec. (a)(1)(C), (D).  Pub. L. 103–66, §\u202f13206(b)(2)(A)(ii) , (iii), added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (a)(4)(B).  Pub. L. 103–66, §\u202f13206(b)(2)(B)(ii) , inserted before period at end “or, in the case of a tax-exempt obligation, the aggregate amount of the original issue discount which accrued in the manner provided by section 1272(a) (determined without regard to paragraph (7) thereof) during periods before the acquisition of the bond by the taxpayer”.\nSubsec. (b)(1).  Pub. L. 103–66, §\u202f13206(b)(2)(B)(i) , substituted “sections 103, 871(a),” for “sections 871(a)” in last sentence.\n1988—Subsec. (a)(4)(B).  Pub. L. 100–647, §\u202f1006(u)(2) , substituted “section 1272(a)(7)” for “section 1272(a)(6)”.\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1018(c)(3) , added par. (4).\nSubsec. (c).  Pub. L. 100–647, §\u202f1018(c)(2) , inserted before period at end “,\u2000including regulations providing proper adjustments in the case of a bond the principal of which may be paid in 2 or more payments”.\n1986—Subsec. (a)(1)(B)(i).  Pub. L. 99–514, §\u202f1878(a) , amended  Pub. L. 98–369, §\u202f1001(b) , by adding a par. (24), effective as if included in  Pub. L. 98–369 . See 1984 Amendment note below.\nSubsec. (a)(1)(C).  Pub. L. 99–514, §\u202f1803(a)(6) , added subpar. (C).\nSubsec. (a)(4).  Pub. L. 99–514, §\u202f1899A(32) , substituted “means” for “means of” in introductory provisions.\n1984—Subsec. (a)(1)(B)(i).  Pub. L. 98–369, §\u202f1001(b)(24) , as added by  Pub. L. 99–514, §\u202f1878(a) , substituted “6 months” for “1 year”, applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 . See Effective Date of 1984 Amendment note below.\nAmendment by  section 401(c)(1)(G) of Pub. L. 115–141  applicable to debt instruments issued on or after  July 2, 1982 , see  section 401(c)(1)(H) of Pub. L. 115–141 , set out as a note under  section 163 of this title .\nAmendments by  Pub. L. 103–66  applicable to obligations purchased (within the meaning of  section 1272(d)(1) of this title ) after  Apr. 30, 1993 , see  section 13206(b)(3) of Pub. L. 103–66 , set out as a note under  section 1276 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by sections 1803(a)(6) and 1878(a) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  Pub. L. 98–369  applicable to property acquired after  June 22, 1984 , and before  Jan. 1, 1988 , see  section 1001(e) of Pub. L. 98–369 , set out as a note under  section 166 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , except as otherwise provided, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'The ownership test of this subparagraph is met for any taxable year if, on at least 90 days during the taxable year, 20 percent or more of the value of the interests in the pass-thru entity are held by persons described in paragraph (1) or by other pass-thru entities to which subparagraph (A) applies.\nThe term “pass-thru entity” means any partnership, S corporation, trust, or other pass-thru entity.\nFor special rules limiting the application of this section to original issue discount in the case of nongovernmental obligations, see section 1283(c).\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1803(a)(8) , amended subsec. (a) generally, designating existing provisions as par. (1) and adding par. (2).\nSubsec. (b)(1)(F).  Pub. L. 99–514, §\u202f1803(a)(7) , added subpar. (F).\nAmendment by  section 1803(a)(7) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection 1803(a)(8)(A) of Pub. L. 99–514 , as amended by  Pub. L. 100–647, title I, §\u202f1018(c)(1) ,  Nov. 10, 1988 ,  102 Stat. 3578 , provided that the amendment made by  section 1803(a)(8)(A) of Pub. L. 99–514  is effective with respect to obligations acquired after  Dec. 31, 1985 .\nSection applicable to taxable years ending after  July 18, 1984 , and applicable to obligations acquired after that date, with certain elections available, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'This section shall not apply to any short-term obligation to which section 1281 applies.\nA taxpayer may make an election under this paragraph to have section 1281 apply to all short-term obligations acquired by the taxpayer on or after the 1st day of the 1st taxable year to which such election applies.\nAn election under this paragraph shall apply to the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election.\nRules similar to the rules of subsections (b) and (c) of section 1277 shall apply for purposes of this section.\nFor special rules limiting the application of this section to original issue discount in the case of nongovernmental obligations, see section 1283(c).\n1986—Subsec. (a).  Pub. L. 99–514  amended subsec. (a) generally, designating existing provisions as par. (1) and adding par. (2).\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , and to obligations acquired after that date, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'Except as provided in subparagraph (B), the term “short-term obligation” means any bond, debenture, note, certificate, or other evidence of indebtedness which has a fixed maturity date not more than 1 year from the date of issue.\nThe term “short-term obligation” shall not include any tax-exempt obligation (as defined in section 1275(a)(3)).\nAn election under subparagraph (A), once made with respect to any obligation, shall be irrevocable.\nA taxpayer may make an election under this paragraph to have paragraph (1) not apply to all obligations acquired by the taxpayer on or after the first day of the first taxable year to which such election applies.\nAn election under this paragraph shall apply to the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election.\nThe basis of any short-term obligation in the hands of the holder thereof shall be increased by the amount included in his gross income pursuant to section 1281.\nSection 1281 shall not require the inclusion of any amount previously includible in gross income.\nSection 454(b) and paragraphs (3) and (4) of section 1271(a) shall not apply to any short-term obligation to which section 1281 applies.\n1986—Subsec. (d)(3).  Pub. L. 99–514  substituted “paragraphs (3) and (4) of section 1271(a)” for “section 1271(a)(3)”.\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , and to obligations acquired after that date, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'The term “bond” means a bond, debenture, note, or certificate or other evidence of indebtedness.\nThe term “stripped bond” means a bond issued at any time with interest coupons where there is a separation in ownership between the bond and any coupon which has not yet become payable.\nThe term “stripped coupon” means any coupon relating to a stripped bond.\nThe term “stated redemption price at maturity” has the meaning given such term by section 1273(a)(2).\nThe term “coupon” includes any right to receive interest on a bond (whether or not evidenced by a coupon).\nThe term “purchase” has the meaning given such term by section 1272(d)(1). 1 1 \u202fSee References in Text note below.\nIn the case of an account or entity substantially all of the assets of which consist of bonds, preferred stock, or a combination thereof, the Secretary may by regulations provide that rules similar to the rules of this section and section 305(e), as appropriate, shall apply to interests in such account or entity to which (but for this subsection) this section or section 305(e), as the case may be, would not apply.\nThe Secretary may prescribe regulations providing that where, by reason of varying rates of interest, put or call options, or other circumstances, the tax treatment under this section does not accurately reflect the income of the holder of a stripped coupon or stripped bond, or of the person disposing of such bond or coupon, as the case may be, for any period, such treatment shall be modified to require that the proper amount of income be included for such period.\nSection 1272(d), referred to in subsec. (d)(6), was redesignated section 1272(c) by  Pub. L. 115–141, div. U, title IV, §\u202f401(c)(1)(B) ,  Mar. 23, 2018 ,  132 Stat. 1205 .\n2018—Subsec. (a).  Pub. L. 115–141, §\u202f401(c)(2)(B) , struck out “after  July 1, 1982 ,” before “a stripped bond” in introductory provisions.\nSubsec. (b).  Pub. L. 115–141, §\u202f401(c)(2)(B) , struck out “after  July 1, 1982 ,” before “disposes of the bond” in introductory provisions.\nSubsec. (c).  Pub. L. 115–141, §\u202f401(c)(2)(A) , redesignated subsec. (d) as (c) and struck out former subsec. (c) which related to retention of existing law for stripped bonds purchased before  July 2, 1982 .\nSubsec. (d).  Pub. L. 115–141, §\u202f401(c)(2)(A) , redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).\nSubsec. (d)(5).  Pub. L. 115–141, §\u202f401(c)(2)(C) , struck out at end “This paragraph shall apply for purposes of subsection (c) only in the case of purchases after  July 1, 1982 .”\nSubsec. (e).  Pub. L. 115–141, §\u202f401(c)(2)(A) , redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).\nSubsec. (f).  Pub. L. 115–141, §\u202f401(c)(2)(A) , redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).\nPub. L. 115–141, §\u202f401(a)(182) , substituted “and section 305(e),” for “and 305(e),”.\nSubsec. (g).  Pub. L. 115–141, §\u202f401(c)(2)(A) , redesignated subsec. (g) as (f).\n2004—Subsecs. (f), (g).  Pub. L. 108–357  added subsec. (f) and redesignated former subsec. (f) as (g).\n1988—Subsec. (d).  Pub. L. 100–647  amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “In the case of any tax-exempt obligation (as defined in section 1275(a)(3)) from which 1 or more coupons have been stripped—\n“(1) the amount of original issue discount determined under subsection (a) with respect to any stripped bond or stripped coupon from such obligation shall be the amount which produces a yield to maturity (as of the purchase date) equal to the lower of—\n“(A) the coupon rate of interest on such obligation before the separation of coupons, or\n“(B) the yield to maturity (on the basis of purchase price) of the stripped obligation or coupon,\n“(2) the amount of original issue discount determined under paragraph (1) shall be taken into account in determining the adjusted basis of the holder under section 1288,\n“(3) subsection (b)(1) shall not apply, and\n“(4) subsection (b)(2) shall be applied by increasing the basis of the bond or coupon by the interest accrued but not paid before the time such bond or coupon was disposed of (and not previously reflected in basis).”\n1986—Subsec. (b)(1).  Pub. L. 99–514, §\u202f1803(a)(13)(B)(i) , amended par. (1) generally, designating existing provisions as subpar. (A) and adding subpar. (B).\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1803(a)(13)(B)(ii) , substituted “the amount included in gross income under paragraph (1)” for “the amount of the accrued interest described in paragraph (1)”.\nSubsec. (d).  Pub. L. 99–514, §\u202f1879(s)(1) , amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “In the case of any tax-exempt obligation (as defined in section 1275(a)(3))—\n“(1) subsections (a) and (b)(1) shall not apply,\n“(2) the rules of subsection (b)(4) shall apply for purposes of subsection (c), and\n“(3) subsection (c) shall be applied without regard to the requirement that the bond be purchased before  July 2, 1982 .”\nAmendment by section 401(c)(2)(A)–(C) of  Pub. L. 115–141  applicable to bonds purchased on or after  July 2, 1982 , see  section 401(c)(2)(E) of Pub. L. 115–141 , set out as a note under  section 305 of this title .\nAmendment by  Pub. L. 108–357  applicable to purchases and dispositions after  Oct. 22, 2004 , see  section 831(c) of Pub. L. 108–357 , set out as a note under  section 305 of this title .\nPub. L. 100–647, title I, §\u202f1018(q)(4)(B) ,  Nov. 10, 1988 ,  102 Stat. 3586 , provided that: \n “(i)  Except as provided in clause (ii), the amendment made by subparagraph (A) [amending this section] shall apply to any purchase or sale after  June 10, 1987 , of any stripped tax-exempt obligation or stripped coupon from such an obligation. \n \n “(ii)  If— “(I)  any person held any obligation or coupon in stripped form on  June 10, 1987 , and \n \n “(II)  such obligation or coupon was held by such person on such date for sale in the ordinary course of such person’s trade or business, \n \n\n the amendment made by subparagraph (A) shall not apply to any sale of such obligation or coupon by such person and shall not apply to any such obligation or coupon while held by another person who purchased such obligation or coupon from the person referred to in subclause (I).”\nAmendment by  section 1803(a)(13)(B) of Pub. L. 99–514  applicable to obligations acquired after  Oct. 22, 1986 , see  section 1803(a)(13)(C) of Pub. L. 99–514 , set out as a note under  section 1276 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(s)(2) ,  Oct. 22, 1986 ,  100 Stat. 2913 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to any purchase or sale of any stripped tax-exempt obligation or stripped coupon from such an obligation after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nSection applicable to taxable years ending after  July 18, 1984 , except as otherwise provided, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'If any registration-required obligation is not in registered form, any gain on the sale or other disposition of such obligation shall be treated as ordinary income (unless the issuance of such obligation was subject to tax under section 4701).\nThe term “registration-required obligation” has the meaning given to such term by section 163(f)(2).\nThe term “registered form” has the same meaning as when used in section 163(f).\n2010—Subsec. (b)(1).  Pub. L. 111–147  struck out “except that clause (iv) of subparagraph (A), and subparagraph (B), of such section shall not apply” before period.\nAmendment by  Pub. L. 111–147  applicable to obligations issued after the date which is 2 years after  Mar. 18, 2010 , see  section 502(f) of Pub. L. 111–147 , set out as a note under  section 149 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , except as otherwise provided, see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS'},
  'content': 'The term “original issue discount” has the meaning given to such term by section 1273(a) without regard to paragraph (3) thereof. In applying section 483 or 1274, under regulations prescribed by the Secretary, appropriate adjustments shall be made to the applicable Federal rate to take into account the tax exemption for interest on the obligation.\nThe term “tax-exempt obligation” has the meaning given to such term by section 1275(a)(3).\nIn applying this section to obligations with maturity of 1 year or less, rules similar to the rules of section 1283(b) shall apply.\n1988—Subsec. (a).  Pub. L. 100–647  substituted “paragraph (7)” for “paragraph (6)” in pars. (1) and (2).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years ending after  July 18, 1984 , and applicable to obligations issued after  Sept. 3, 1982 , and acquired after  Mar. 1, 1984 , see  section 44 of Pub. L. 98–369 , set out as a note under  section 1271 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'If the taxpayer disposes of stock in a passive foreign investment company, then the rules of paragraph (1) shall apply to any gain recognized on such disposition in the same manner as if such gain were an excess distribution.\nThe term “current year” means the taxable year in which the excess distribution or disposition occurs.\nFor purposes of this section, the term “excess distribution” means any distribution in respect of stock received during any taxable year to the extent such distribution does not exceed its ratable portion of the total excess distribution (if any) for such taxable year.\nThe total excess distributions with respect to any stock shall be zero for the taxable year in which the taxpayer’s holding period in such stock begins.\nFor purposes of paragraph (1)(A), the aggregate increases in taxes shall be determined by multiplying each amount allocated under subsection (a)(1)(A) to any taxable year (other than any taxable year referred to in subsection (a)(1)(B)) by the highest rate of tax in effect for such taxable year under section 1 or 11, whichever applies.\nFor purposes of this subsection, the term “due date” means the date prescribed by law (determined without regard to extensions) for filing the return of the tax imposed by this chapter for the taxable year.\nFor purposes of clause (i), the term “post-1986 earnings and profits” means earnings and profits which were accumulated in taxable years of such company beginning after  December 31, 1986 , and during the period or periods the stock was held by the taxpayer while the company was a passive foreign investment company.\nFor purposes of section 959(e), any amount included in gross income under this subparagraph shall be treated as included in gross income under section 1248(a).\nThe term “creditable foreign taxes” means, with respect to any distribution, any withholding tax imposed with respect to such distribution, but only if the taxpayer chooses the benefits of section 901 and such taxes are creditable under section 901 (determined without regard to paragraph (1)(C)(ii)).\nThe term “excess distribution taxes” means, with respect to any distribution, the portion of the creditable foreign taxes with respect to such distribution which is attributable (on a pro rata basis) to the portion of such distribution which is an excess distribution.\nThe rules of this subsection also shall apply in the case of any gain which but for this section would be includible in gross income as a dividend under section 1248.\nThe date of the enactment of the American Jobs Creation Act of 2004, referred to in subsec. (e), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\n2018—Subsec. (e).  Pub. L. 115–141  substituted “subsections (c), (d), and (e)” for “subsections (c) and (d) (e),” in introductory provisions.\n2017—Subsec. (g)(2)(A).  Pub. L. 115–97  substituted “any distribution, any withholding tax imposed with respect to such distribution, but only if” for “any distribution—\n“(i) any foreign taxes deemed paid under section 902 with respect to such distribution, and\n“(ii) any withholding tax imposed with respect to such distribution,\nbut only if”.\n2010—Subsec. (e).  Pub. L. 111–312 , which directed that subsec. (e) be amended to read as if amendment by  Pub. L. 107–16, §\u202f542(e)(5)(B) , had never been enacted, was executed by inserting “(e),” after “subsections (c) and (d)” and substituting “;\u2000except that—” and pars. (1) and (2) for the period at end. See 2001 Amendment note below.\nPub. L. 111–147  substituted “and (d)” for “,\u2000(d), and (f)”.\n2004—Subsec. (b)(3)(F).  Pub. L. 108–357, §\u202f413(c)(24)(A) , substituted “959(a)” for “551(d), 959(a),”.\nSubsec. (e).  Pub. L. 108–357, §\u202f413(c)(24)(B) , inserted “(as in effect on the day before the date of the enactment of the American Jobs Creation Act of 2004)” after “section 1246” in introductory provisions.\n2001—Subsec. (e).  Pub. L. 107–16, §\u202f542(e)(5)(B) , struck out “(e),” after “subsections (c), (d),” and substituted period at end for “;\u2000except that—\n“(1) the reduction under subsection (e) of such section shall be the excess of the basis determined under section 1014 over the adjusted basis of the stock immediately before the decedent’s death, and\n“(2) such a reduction shall not apply in the case of a decedent who was a nonresident alien at all times during his holding period in the stock.”\n1998—Subsec. (d)(1).  Pub. L. 105–206  inserted at end “In the case of stock which is marked to market under section 475 or any other provision of this chapter, this section shall not apply, except that rules similar to the rules of section 1296(j) shall apply.”\n1997—Subsec. (a)(3)(A).  Pub. L. 105–34, §\u202f1122(b)(3) , amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “The taxpayer’s holding period shall be determined under section 1223; except that, for purposes of applying this section to an excess distribution, such holding period shall be treated as ending on the date of such distribution.”\nSubsec. (d).  Pub. L. 105–34, §\u202f1122(b)(2) , substituted “subparts B and C” for “subpart B” in heading.\nSubsec. (d)(1).  Pub. L. 105–34, §\u202f1122(b)(1) , inserted concluding provisions.\n1988—Subsec. (a)(1)(B)(ii).  Pub. L. 100–647, §\u202f1012(p)(12) , amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “any period in the taxpayer’s holding period before the 1st day of the 1st taxable year of the company for which it was a passive foreign investment company (or, if later,  January 1, 1987 ), and”.\nSubsec. (a)(3)(A).  Pub. L. 100–647, §\u202f1012(p)(14) , substituted “for purposes of applying this section to” for “in the case of”.\nSubsec. (a)(4), (5).  Pub. L. 100–647, §\u202f1012(p)(7)(A) , struck out par. (4) which related to coordination with section 904, and par. (5) which related to section 902 not applying.\nSubsec. (b)(2)(A).  Pub. L. 100–647, §\u202f1012(p)(13) , inserted at end “For purposes of clause (ii), any excess distribution received during such 3-year period shall be taken into account only to the extent it was included in gross income under subsection (a)(1)(B).”\nSubsec. (b)(3)(F).  Pub. L. 100–647, §\u202f1012(p)(3) , added subpar. (F).\nSubsec. (b)(3)(G).  Pub. L. 100–647, §\u202f1012(p)(33) , added subpar. (G).\nSubsec. (c)(1).  Pub. L. 100–647, §\u202f1012(p)(31) , inserted at end “Any increase in the tax imposed by this chapter for the current year under subsection (a) to the extent attributable to the amount referred to in subparagraph (B) shall be treated as interest paid under section 6601 on the due date for the current year.”\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f6127(b)(1) , inserted “with respect to the taxpayer” after “qualified electing fund”.\nPub. L. 100–647, §\u202f1012(p)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “This section shall not apply with respect to—\n“(A) any distribution paid by a passive foreign investment company during a taxable year for which such company is a qualified electing fund, and\n“(B) any disposition of stock in a passive foreign investment company if such company is a qualified electing fund for each of its taxable years—\n“(i) which begins after  December 31, 1986 , and for which such company is a passive foreign investment company, and\n“(ii) which includes any portion of the taxpayer’s holding period.”\nSubsec. (d)(2)(A)(i).  Pub. L. 100–647, §\u202f6127(b)(2) , inserted “with respect to the taxpayer” after “qualified electing fund”.\nSubsec. (d)(2)(B).  Pub. L. 100–647, §\u202f1012(p)(28) , added subpar. (B) and struck out former subpar. (B) which related to adjustments to basis of stock to which subpar. (A) applies.\nSubsec. (d)(2)(B)(i)(I).  Pub. L. 100–647, §\u202f6127(b)(2) , inserted “with respect to the taxpayer” after “qualified electing fund”.\nSubsec. (d)(2)(C).  Pub. L. 100–647, §\u202f1012(p)(28) , added subpar. (C).\nSubsec. (e).  Pub. L. 100–647, §\u202f1012(p)(6)(B) , substituted “Except to the extent inconsistent with the regulations prescribed under subsection (f), rules similar”.\nSubsec. (e)(2).  Pub. L. 100–647, §\u202f1012(p)(9) , struck out “not” before “a nonresident”.\nSubsec. (f).  Pub. L. 100–647, §\u202f1012(p)(6)(A) , amended subsec. (f) generally. Prior to amendment, subsec. (f), “Nonrecognition provisions”, read as follows: “To the extent provided in regulations, gain shall be recognized on any disposition of stock in a passive foreign investment company.”\nSubsec. (g).  Pub. L. 100–647, §\u202f1012(p)(7)(B) , added subsec. (g).\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nPub. L. 111–147, title V, §\u202f521(c) ,  Mar. 18, 2010 ,  124 Stat. 112 , provided that:  “The amendments made by this section [amending this section and  section 1298 of this title ] take effect on the date of the enactment of this Act [ Mar. 18, 2010 ].”\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying after  Dec. 31, 2009 , see  section 542(f)(1) of Pub. L. 107–16 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as a note under  section 532 of this title .\nAmendment by section 1012(p)(1), (3), (6), (7), (9), (12)–(14), (28), (31), (33) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 6127(b) of Pub. L. 100–647  effective as if included in the amendments made by  section 1235 of Pub. L. 99–514 , see  section 6127(c)(1) of Pub. L. 100–647 , set out as a note under  section 1295 of this title .\nPub. L. 99–514, title XII, §\u202f1235(h) ,  Oct. 22, 1986 ,  100 Stat. 2576 , provided that:  “The amendments made by this section [enacting this section and sections 1293 to 1297 of this title and amending sections 532, 542, 551, 851, 904, 951, 1246, and 6503 of this title] shall apply to taxable years of foreign corporations beginning after  December 31, 1986 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'The inclusion under paragraph (1) shall be for the taxable year of the shareholder in which or with which the taxable year of the fund ends.\nThe pro rata share referred to in subsection (a) in the case of any shareholder is the amount which would have been distributed with respect to the shareholder’s stock if, on each day during the taxable year of the fund, the fund had distributed to each shareholder a pro rata share of that day’s ratable share of the fund’s ordinary earnings and net capital gain for such year. To the extent provided in regulations, if the fund establishes to the satisfaction of the Secretary that it uses a shorter period than the taxable year to determine shareholders’ interests in the earnings of such fund, pro rata shares may be determined by using such shorter period.\nIf the taxpayer establishes to the satisfaction of the Secretary that any amount distributed by a passive foreign investment company is paid out of earnings and profits of the company which were included under subsection (a) in the income of any United States person, such amount shall be treated, for purposes of this chapter, as a distribution which is not a dividend; except that such distribution shall immediately reduce earnings and profits. If the passive foreign investment company is a controlled foreign corporation (as defined in section 957(a)), the preceding sentence shall not apply to any United States shareholder (as defined in section 951(b)) in such corporation, and, in applying section 959 to any such shareholder, any inclusion under this section shall be treated as an inclusion under section 951(a)(1)(A).\nThe term “ordinary earnings” means the excess of the earnings and profits of the qualified electing fund for the taxable year over its net capital gain for such taxable year.\nA qualified electing fund’s net capital gain for any taxable year shall not exceed its earnings and profits for such taxable year.\nThe earnings and profits of any qualified electing fund shall be determined without regard to paragraphs (4), (5), and (6) of section 312(n). Under regulations, the preceding sentence shall not apply to the extent it would increase earnings and profits by an amount which was previously distributed by the qualified electing fund.\nThe Secretary shall prescribe such adjustment to the provisions of this section as may be necessary to prevent the same item of income of a qualified electing fund from being included in the gross income of a United States person more than once.\nSection 902 (as in effect before its repeal), referred to in subsec. (f)(3), means  section 902 of this title  as in effect before its repeal by  Pub. L. 115–97, title I, §\u202f14301(a) ,  Dec. 22, 2017 ,  131 Stat. 2221 .\n2017—Subsec. (f)(3).  Pub. L. 115–97  added par. (3).\n1997—Subsecs. (a)(1), (d).  Pub. L. 105–34  substituted “section 1298(a)” for “section 1297(a)”.\n1993—Subsec. (c).  Pub. L. 103–66  inserted at end “If the passive foreign investment company is a controlled foreign corporation (as defined in section 957(a)), the preceding sentence shall not apply to any United States shareholder (as defined in section 951(b)) in such corporation, and, in applying section 959 to any such shareholder, any inclusion under this section shall be treated as an inclusion under section 951(a)(1)(A).”\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1012(p)(15) , inserted at end “To the extent provided in regulations, if the fund establishes to the satisfaction of the Secretary that it uses a shorter period than the taxable year to determine shareholders’ interests in the earnings of such fund, pro rata shares may be determined by using such shorter period.”\nSubsec. (c).  Pub. L. 100–647, §\u202f1012(p)(23) , inserted “,\u2000for purposes of this chapter,” after “shall be treated”, and “;\u2000except that such distribution shall immediately reduce earnings and profits” after “is not a dividend”.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1012(p)(18) , added par. (3).\nSubsec. (g).  Pub. L. 100–647, §\u202f1012(p)(32) , added subsec. (g).\nAmendment by  Pub. L. 115–97  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2017 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 14301(d) of Pub. L. 115–97 , set out as a note under  section 78 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as a note under  section 532 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years of foreign corporations beginning after  Sept. 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 13231(e) of Pub. L. 103–66 , set out as a note under  section 951 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as a note under  section 1291 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'At the election of the taxpayer, the time for payment of any undistributed PFIC earnings tax liability of the taxpayer for the taxable year shall be extended to the extent and subject to the limitations provided in this section.\nThe taxpayer may not make an election under paragraph (1) with respect to the undistributed PFIC earnings tax liability attributable to a qualified electing fund for the taxable year if any amount is includible in the gross income of the taxpayer under section 951 with respect to such fund for such taxable year.\nIf a distribution is not includible in gross income for the taxable year by reason of section 1293(c), then the extension under subsection (a) for payment of the undistributed PFIC earnings tax liability with respect to the earnings to which such distribution is attributable shall expire on the last date prescribed by law (determined without regard to extensions) for filing the return of tax for such taxable year.\nFor purposes of subparagraph (A), a distribution shall be treated as made from the most recently accumulated earnings and profits.\nIf the Secretary believes that collection of an amount to which an extension under this section relates is in jeopardy, the Secretary shall immediately terminate such extension with respect to such amount, and notice and demand shall be made by him for payment of such amount.\nThe election under subsection (a) shall be made not later than the time prescribed by law (including extensions) for filing the return of tax imposed by this chapter for the taxable year.\nSection 6165 shall apply to any extension under this section as though the Secretary were extending the time for payment of the tax.\nFor purposes of this section and section 1293, any loan by a qualified electing fund (directly or indirectly) to a shareholder of such fund shall be treated as a distribution to such shareholder.\nFor provisions providing for interest for the period of the extension under this section, see section 6601.\n2004—Subsec. (a)(2).  Pub. L. 108–357  amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The taxpayer may not make an election under paragraph (1) with respect to the undistributed PFIC earnings tax liability attributable to a qualified electing fund for the taxable year if—\n“(A) any amount is includible in the gross income of the taxpayer under section 551 with respect to such fund for such taxable year, or\n“(B) any amount is includible in the gross income of the taxpayer under section 951 with respect to such fund for such taxable year.”\n1988—Subsec. (c)(2).  Pub. L. 100–647, §\u202f1012(p)(4) , (34), substituted “Transfers” for “Dispositions” in heading and “is transferred” for “is disposed of” in subpar. (A), and in closing provisions substituted “such transfer” for “such disposition” in two places and inserted at end “To the extent provided in regulations, the preceding sentence shall not apply in the case of a transfer in a transaction with respect to which gain or loss is not recognized (in whole or in part), and the transferee in such transaction shall succeed to the treatment under this section of the transferor.”\nSubsec. (f).  Pub. L. 100–647, §\u202f1012(p)(25) , added subsec. (f).\nSubsec. (g).  Pub. L. 100–647, §\u202f1012(p)(8) , added subsec. (g).\nAmendment by  Pub. L. 108–357  applicable to taxable years of foreign corporations beginning after  Dec. 31, 2004 , and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end, see  section 413(d)(1) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as a note under  section 1291 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'A taxpayer may make an election under this subsection with respect to any passive foreign investment company for any taxable year of the taxpayer. Such an election, once made with respect to any company, shall apply to all subsequent taxable years of the taxpayer with respect to such company unless revoked by the taxpayer with the consent of the Secretary.\nAn election under this subsection may be made for any taxable year at any time on or before the due date (determined with regard to extensions) for filing the return of the tax imposed by this chapter for such taxable year. To the extent provided in regulations, such an election may be made later than as required in the preceding sentence where the taxpayer fails to make a timely election because the taxpayer reasonably believed that the company was not a passive foreign investment company.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f6127(a) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of this part, the term ‘qualified electing fund’ means any passive foreign investment company if—\n“(1) an election under subsection (b) applies to such company for the taxable year, and\n“(2) such company complies for such taxable year with such requirements as the Secretary may prescribe for purposes of—\n“(A) determining the ordinary earnings and net capital gain of such company for the taxable year,\n“(B) ascertaining the ownership of its outstanding stock, and\n“(C) otherwise carrying out the purposes of this subpart.”\nSubsec. (b).  Pub. L. 100–647, §\u202f6127(a) , amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows:\n“(1)  In general .—A passive foreign investment company may make an election under this subsection for any taxable year. Such an election, once made, shall apply to all subsequent taxable years of such company for which such company is a passive foreign investment company unless revoked with the consent of the Secretary.\n“(2)  When made .—An election under this subsection may be made for any taxable year at any time before the 15th day of the 3rd month of the following taxable year. To the extent provided in regulations, such an election may be made later than as required by the preceding sentence in cases where the company failed to make a timely election because it reasonably believed it was not a passive foreign investment company.”\nPub. L. 100–647, §\u202f1012(p)(37)(A) , inserted sentence at end of par. (2) permitting a later election when a company reasonably believed it was not a passive foreign investment company.\nAmendment by  section 1012(p)(37)(A) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title VI, §\u202f6127(c) ,  Nov. 10, 1988 ,  102 Stat. 3715 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1291 of this title ] shall take effect as if included in the amendments made by section 1235 of the Reform Act [ Pub. L. 99–514 ]. \n \n “(2)   Time for making election .— The period during which an election under section 1295(b) of the 1986 Code may be made shall in no event expire before the date 60 days after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nSection applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as a note under  section 1291 of this title .\nPub. L. 100–647, title I, §\u202f1012(p)(37)(B) ,  Nov. 10, 1988 ,  102 Stat. 3522 , provided that:  “The period during which an election under section 1295(b) of the 1986 Code may be made shall in no event expire before the date 60 days after the date of enactment of this Act [ Nov. 10, 1988 ].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'Any amount included in gross income under subsection (a)(1), and any gain on the sale or other disposition of marketable stock in a passive foreign investment company (with respect to which an election under this section is in effect), shall be treated as ordinary income.\nThe source of any amount included in gross income under subsection (a)(1) (or allowed as a deduction under subsection (a)(2)) shall be determined in the same manner as if such amount were gain or loss (as the case may be) from the sale of stock in the passive foreign investment company.\nIn the case of any regulated investment company which is offering for sale or has outstanding any stock of which it is the issuer and which is redeemable at its net asset value, all stock in a passive foreign investment company which it owns directly or indirectly shall be treated as marketable stock for purposes of this section. Except as provided in regulations, similar treatment as marketable stock shall apply in the case of any other regulated investment company which publishes net asset valuations at least annually.\nFor purposes of this section, stock owned, directly or indirectly, by or for a foreign partnership or foreign trust or foreign estate shall be considered as being owned proportionately by its partners or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person.\nFor purposes of section 851(b)(2), any amount included in gross income under subsection (a) shall be treated as a dividend.\nIn the case of stock of a passive foreign investment company which is acquired by bequest, devise, or inheritance (or by the decedent’s estate) and with respect to which an election under this section was in effect as of the date of the decedent’s death, notwithstanding section 1014, the basis of such stock in the hands of the person so acquiring it shall be the adjusted basis of such stock in the hands of the decedent immediately before his death (or, if lesser, the basis which would have been determined under section 1014 without regard to this subsection).\nThe requirements of this subparagraph are met if, with respect to each of such corporation’s taxable years for which such corporation was a passive foreign investment company and which begin after  December 31, 1986 , and included any portion of the taxpayer’s holding period in such stock, such corporation was treated as a qualified electing fund under this part with respect to the taxpayer.\nNo deduction shall be allowed to any regulated investment company for the increase in tax under subparagraph (A)(ii).\nIf any individual becomes a United States person in a taxable year beginning after  December 31, 1997 , solely for purposes of this section, the adjusted basis (before adjustments under subsection (b)) of any marketable stock in a passive foreign investment company owned by such individual on the first day of such taxable year shall be treated as being the greater of its fair market value on such first day or its adjusted basis on such first day.\nSection 11A of the Securities and Exchange Act of 1934, referred to in subsec. (e)(1)(A)(i), is classified to  section 78k–1 of Title 15 , Commerce and Trade.\nA prior section 1296 was renumbered  section 1297 of this title .\n2010—Subsec. (i).  Pub. L. 111–312  amended subsec. (i) to read as if amendment by  Pub. L. 107–16, §\u202f542(e)(5)(C) , had never been enacted. See 2001 Amendment note below.\n2004—Subsec. (h).  Pub. L. 108–311  substituted “section 851(b)(2)” for “paragraphs (2) and (3) of section 851(b)”.\n2001—Subsec. (i).  Pub. L. 107–16, §\u202f542(e)(5)(C) , struck out subsec. (i). Text read as follows: “In the case of stock of a passive foreign investment company which is acquired by bequest, devise, or inheritance (or by the decedent’s estate) and with respect to which an election under this section was in effect as of the date of the decedent’s death, notwithstanding section 1014, the basis of such stock in the hands of the person so acquiring it shall be the adjusted basis of such stock in the hands of the decedent immediately before his death (or, if lesser, the basis which would have been determined under section 1014 without regard to this subsection).”\n1998—Subsec. (d).  Pub. L. 105–206  inserted at end “In the case of a regulated investment company which elected to mark to market the stock held by such company as of the last day of the taxable year preceding such company’s first taxable year for which such company elects the application of this section, the amount referred to in paragraph (1) shall include amounts included in gross income under such mark to market with respect to such stock for prior taxable years.”\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying after  Dec. 31, 2009 , see  section 542(f)(1) of Pub. L. 107–16 , set out as a note under  section 121 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nSection applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as an Effective Date of 1997 Amendment note under  section 532 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'Except as provided in paragraph (2), the term “passive income” means any income which is of a kind which would be foreign personal holding company income as defined in section 954(c).\nFor purposes of this part, a corporation shall not be treated with respect to a shareholder as a passive foreign investment company during the qualified portion of such shareholder’s holding period with respect to stock in such corporation.\nExcept as provided in subparagraph (B), if the qualified portion of a shareholder’s holding period with respect to any stock ends after  December 31, 1997 , solely for purposes of this part, the shareholder’s holding period with respect to such stock shall be treated as beginning as of the first day following such period.\nSubparagraph (A) shall not apply if such stock was, with respect to such shareholder, stock in a passive foreign investment company at any time before the qualified portion of the shareholder’s holding period with respect to such stock and no election under section 1298(b)(1) is made.\nParagraph (1) shall not apply to stock treated as owned by a person by reason of section 1298(a)(4) (relating to the treatment of a person that has an option to acquire stock as owning such stock) unless such person establishes that such stock is owned (within the meaning of section 958(a)) by a United States shareholder (as defined in section 951(b)) who is not exempt from tax under this chapter.\nThe term “applicable insurance regulatory body” means, with respect to any insurance business, the entity established by law to license, authorize, or regulate such business and to which the statement described in subparagraph (A) is provided.\nSection 11A of the Securities and Exchange Act of 1934, referred to in subsec. (e)(3)(A), is classified to  section 78k–1 of Title 15 , Commerce and Trade.\nA prior section 1297 was renumbered  section 1298 of this title .\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97, §\u202f14501(a) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “derived in the active conduct of an insurance business by a corporation which is predominantly engaged in an insurance business and which would be subject to tax under subchapter L if it were a domestic corporation,”.\nSubsec. (f).  Pub. L. 115–97, §\u202f14501(b) , added subsec. (f).\n2007—Subsec. (b)(2)(D).  Pub. L. 110–172, §\u202f11(g)(18) , which directed amendment of subpar. (D) by striking out “foreign trade income of a FSC or”, was executed by striking out “foreign trade income of an FSC or” before “export trade income” to reflect the probable intent of Congress.\nSubsecs. (d) to (f).  Pub. L. 110–172, §\u202f11(a)(24)(A) , redesignated subsecs. (e) and (f) as (d) and (e), respectively, and struck out heading and text of former subsec. (d). Text read as follows: “For purposes of this part, the term ‘passive foreign investment company’ does not include any foreign investment company to which section 1247 applies.”\n1998—Subsec. (e).  Pub. L. 105–206, §\u202f6011(d) , redesignated subsec. (e), relating to methods for measuring assets, as (f).\nSubsec. (e)(4).  Pub. L. 105–206, §\u202f6011(b)(1) , added par. (4).\nSubsec. (f).  Pub. L. 105–206, §\u202f6011(d) , redesignated subsec. (e), relating to methods for measuring assets, as (f).\n1997— Pub. L. 105–34, §\u202f1122(a) , renumbered  section 1296 of this title  as this section.\nSubsec. (a).  Pub. L. 105–34, §\u202f1123(b)(2) , struck out concluding provisions which read as follows: “In the case of a controlled foreign corporation (or any other foreign corporation if such corporation so elects), the determination under paragraph (2) shall be based on the adjusted bases (as determined for purposes of computing earnings and profits) of its assets in lieu of their value. Such an election, once made, may be revoked only with the consent of the Secretary.”\nSubsec. (a)(2).  Pub. L. 105–34, §\u202f1123(b)(1) , substituted “(as determined in accordance with subsection (e))” for “(by value)”.\nSubsec. (b)(3).  Pub. L. 105–34, §\u202f1122(d)(4) , struck out par. (3) which consisted of subpars. (A) to (C) relating to treatment of certain dealers in securities.\nSubsec. (e).  Pub. L. 105–34, §\u202f1123(a) , added subsec. (e) relating to methods for measuring assets.\nPub. L. 105–34, §\u202f1121 , added subsec. (e) relating to exception for United States shareholders of controlled foreign corporations.\n1996—Subsec. (b)(2)(D).  Pub. L. 104–188  added subpar. (D).\n1993—Subsec. (a).  Pub. L. 103–66, §\u202f13231(d)(1) , substituted in closing provisions “In the case of a controlled foreign corporation (or any other foreign corporation if such corporation so elects), the determination under paragraph (2) shall be based on the adjusted bases (as determined for purposes of computing earnings and profits) of its assets in lieu of their value. Such an election, once made, may be revoked only with the consent of the Secretary.” for “A foreign corporation may elect to have the determination under paragraph (2) based on the adjusted bases of its assets in lieu of their value. Such an election, once made, may be revoked only with the consent of the Secretary.”\nSubsec. (b)(3).  Pub. L. 103–66, §\u202f13231(d)(3) , added par. (3).\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1018(u)(40) , inserted a comma after “subpart”.\nPub. L. 100–647, §\u202f1012(p)(27) , inserted at end “A foreign corporation may elect to have the determination under paragraph (2) based on the adjusted bases of its assets in lieu of their value. Such an election, once made, may be revoked only with the consent of the Secretary.”\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1012(p)(5) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “Except as provided in paragraph (2), the term ‘passive income’ has the meaning given such term by section 904(d)(2)(A) without regard to the exceptions contained in clause (iii) thereof.”\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1012(p)(26) , substituted “Exceptions” for “Exception for certain banks and insurance companies” in heading, and inserted sentence at end defining “related person”.\nSubsec. (b)(2)(B).  Pub. L. 100–647, §\u202f1012(p)(16) , inserted “is predominantly engaged in an insurance business and which” after “a corporation which”.\nSubsec. (b)(2)(C).  Pub. L. 100–647, §\u202f1012(p)(26)(A) , added subpar. (C).\nSubsec. (c).  Pub. L. 100–647, §\u202f1012(p)(2) , inserted “(directly or indirectly)” after “foreign corporation owns”.\nPub. L. 115–97, title I, §\u202f14501(c) ,  Dec. 22, 2017 ,  131 Stat. 2235 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as a note under  section 532 of this title .\nPub. L. 104–188, title I, §\u202f1704(r)(2) ,  Aug. 20, 1996 ,  110 Stat. 1887 , provided that:  “The amendments made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 1235 of the Tax Reform Act of 1986 [ Pub. L. 99–514 ].”\nAmendment by  Pub. L. 103–66  applicable to taxable years of foreign corporations beginning after  Sept. 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 13231(e) of Pub. L. 103–66 , set out as a note under  section 951 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as a note under  section 1291 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TREATMENT OF CERTAIN PASSIVE FOREIGN INVESTMENT COMPANIES'},
  'content': 'If 50 percent or more in value of the stock of a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stock owned directly or indirectly by or for such corporation in that proportion which the value of the stock which such person so owns bears to the value of all stock in the corporation.\nFor purposes of determining whether a shareholder of a passive foreign investment company is treated as owning stock owned directly or indirectly by or for such company, subparagraph (A) shall be applied without regard to the 50-percent limitation contained therein. Section 1297(d) shall not apply in determining whether a corporation is a passive foreign investment company for purposes of this subparagraph.\nStock owned, directly or indirectly, by or for a partnership, estate, or trust shall be considered as being owned proportionately by its partners or beneficiaries.\nTo the extent provided in regulations, if any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock.\nStock considered to be owned by a person by reason of the application of paragraph (2), (3), or (4) shall, for purposes of applying such paragraphs, be considered as actually owned by such person.\nStock held by a taxpayer shall be treated as stock in a passive foreign investment company if, at any time during the holding period of the taxpayer with respect to such stock, such corporation (or any predecessor) was a passive foreign investment company which was not a qualified electing fund. The preceding sentence shall not apply if the taxpayer elects to recognize gain (as of the last day of the last taxable year for which the company was a passive foreign investment company (determined without regard to the preceding sentence)) under rules similar to the rules of section 1291(d)(2).\nUnder regulations prescribed by the Secretary, where necessary to carry out the purposes of this part, separate classes of stock (or other interests) in a corporation shall be treated as interests in separate corporations.\nRules similar to the rules of section 959(b) shall apply to any amount described in subparagraph (A) and to any amount included in gross income under section 1293(a) (or which would have been so included but for section 951(c)) in respect of stock which the taxpayer is treated as owning under subsection (a).\nExcept as provided in regulations, if a taxpayer uses any stock in a passive foreign investment company as security for a loan, the taxpayer shall be treated as having disposed of such stock.\nFor purposes of subparagraph (A), the term “qualified stock” means any stock in a C corporation which is a domestic corporation and which is not a regulated investment company or real estate investment trust.\nAny amount included in gross income under section 951(a)(1)(B) shall be treated as a distribution received with respect to the stock.\nAny tangible personal property with respect to which a foreign corporation is the lessee under a lease with a term of at least 12 months shall be treated as an asset actually held by such corporation.\nThe amount taken into account under section 1297(a)(2) with respect to any asset to which paragraph (1) applies shall be the unamortized portion (as determined under regulations prescribed by the Secretary) of the present value of the payments under the lease for the use of such property.\nThe adjusted basis of the total assets of a controlled foreign corporation shall be increased by the research or experimental expenditures (within the meaning of section 174) paid or incurred by such foreign corporation during the taxable year and the preceding 2 taxable years. Any expenditure otherwise taken into account under the preceding sentence shall be reduced by the amount of any reimbursement received by the controlled foreign corporation with respect to such expenditure.\nIn the case of any intangible property (as defined in section 367(d)(4)) with respect to which a controlled foreign corporation is a licensee and which is used by such foreign corporation in the active conduct of a trade or business, the adjusted basis of the total assets of such foreign corporation shall be increased by an amount equal to 300 percent of the payments made during the taxable year by such foreign corporation for the use of such intangible property.\nFor purposes of this subsection, the term “controlled foreign corporation” has the meaning given such term by section 957(a).\nExcept as otherwise provided by the Secretary, each United States person who is a shareholder of a passive foreign investment company shall file an annual report containing such information as the Secretary may require.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this part.\n2018—Subsec. (b)(5)(B).  Pub. L. 115–141, §\u202f401(a)(184) , substituted “section 951(c)” for “section 951(f)”.\nSubsec. (d)(2)(A).  Pub. L. 115–141, §\u202f401(a)(185) , substituted “section 1297(a)(2)” for “section 1296(a)(2)”.\nSubsec. (e)(2)(A).  Pub. L. 115–141, §\u202f401(d)(1)(D)(viii)(III) , substituted “section 367(d)(4)” for “section 936(h)(3)(B)”.\nSubsec. (e)(2)(B)(ii).  Pub. L. 115–141, §\u202f401(a)(186) , substituted “provisions” for “provisons”.\n2010—Subsecs. (f), (g).  Pub. L. 111–147  added subsec. (f) and redesignated former subsec. (f) as (g).\n2007—Subsec. (a)(2)(B).  Pub. L. 110–172, §\u202f11(a)(24)(C) , substituted “Section 1297(d)” for “Section 1297(e)”.\nSubsec. (b)(7) to (9).  Pub. L. 110–172, §\u202f11(f)(2) , redesignated pars. (8) and (9) as (7) and (8), respectively, and struck out former par. (7) which read as follows: “Section 1246 shall not apply to earnings and profits of any company for any taxable year beginning after  December 31, 1986 , if such company is a passive foreign investment company for such taxable year.”\n1998—Subsec. (a)(2)(B).  Pub. L. 105–206  inserted at end “Section 1297(e) shall not apply in determining whether a corporation is a passive foreign investment company for purposes of this subparagraph.”\n1997— Pub. L. 105–34, §\u202f1122(a) , renumbered  section 1297 of this title  as this section.\nSubsec. (b)(1).  Pub. L. 105–34, §\u202f1122(e) , inserted “(determined without regard to the preceding sentence)” after “investment company” in last sentence.\n1996—Subsec. (b)(9).  Pub. L. 104–188, §\u202f1501(b)(10) , substituted “section 951(a)(1)(B)” for “subparagraph (B) or (C) of section 951(a)(1)”.\nSubsec. (d)(2).  Pub. L. 104–188, §\u202f1703(i)(5)(B) , in heading substituted “Amount taken into account” for “Determination of adjusted basis”.\nSubsec. (d)(2)(A).  Pub. L. 104–188, §\u202f1703(i)(5)(A) , substituted “The amount taken into account under section 1296(a)(2) with respect to any asset” for “The adjusted basis of any asset”.\nSubsec. (d)(3)(B).  Pub. L. 104–188, §\u202f1501(b)(11) , struck out “or section 956A” after “this part”.\nSubsec. (e).  Pub. L. 104–188, §\u202f1703(i)(6) , inserted “For purposes of this part—” after heading.\nSubsec. (e)(2)(B)(ii).  Pub. L. 104–188, §\u202f1501(b)(11) , struck out “or section 956A” after “this part”.\n1993—Subsec. (b)(9).  Pub. L. 103–66, §\u202f13231(d)(2) , added par. (9).\nSubsecs. (d) to (f).  Pub. L. 103–66, §\u202f13231(d)(4) , added subsecs. (d) and (e) and redesignated former subsec. (d) as (f).\n1989—Subsec. (b)(5).  Pub. L. 101–239, §\u202f7811(i)(4)(A) , substituted “where stock held” for “where held” in heading.\nSubsec. (b)(5)(A).  Pub. L. 101–239, §\u202f7811(i)(4)(C) , substituted “treated as a disposition by, or distribution to” for “treated as a disposition to” in concluding provisions.\nSubsec. (b)(5)(A)(ii).  Pub. L. 101–239, §\u202f7811(i)(4)(B) , substituted “any distribution of” for “any disposition of”.\n1988—Subsec. (a)(4).  Pub. L. 100–647, §\u202f1012(p)(10)(A) , added par. (4). Former par. (4) redesignated (5).\nSubsec. (a)(5).  Pub. L. 100–647, §\u202f1012(p)(10) , redesignated par. (4) as (5) and substituted “paragraph (2), (3), or (4)” for “paragraph (2) or (3)”.\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1012(p)(36) , substituted “investment company which” for “investment corporation which”.\nSubsec. (b)(3)(A).  Pub. L. 100–647, §\u202f1012(p)(22) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “such corporation (and any predecessor) was not a passive foreign investment corporation for any prior taxable year,”.\nSubsec. (b)(5).  Pub. L. 100–647, §\u202f1012(p)(17) , substituted “part where held” for “section where stock held” in heading, and amended text generally. Prior to amendment, text read as follows: “Under regulations, in any case in which a United States person is treated as holding stock in a passive foreign investment company by reason of subsection (a), any disposition by the United States person or the person holding such stock which results in the United States person being treated as no longer holding such stock, shall be treated as a disposition by the United States person with respect to stock in the passive foreign investment company.”\nSubsec. (b)(6).  Pub. L. 100–647, §\u202f1012(p)(20) , substituted “Except as provided in regulations, if a” for “If a”.\nSubsec. (b)(8).  Pub. L. 100–647, §\u202f1012(p)(24) , added par. (8).\nSubsecs. (c), (d).  Pub. L. 100–647, §\u202f1012(p)(35) , added subsec. (c) and redesignated former subsec. (c) as (d).\nAmendment by  section 11(f)(2) of Pub. L. 110–172  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 11(f)(4) of Pub. L. 110–172 , set out as a note under  section 904 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to taxable years of United States persons beginning after  Dec. 31, 1997 , and to taxable years of foreign corporations ending with or within such taxable years of United States persons, see  section 1124 of Pub. L. 105–34 , set out as a note under  section 532 of this title .\nAmendment by section 1501(b)(10), (11) of  Pub. L. 104–188  applicable to taxable years of foreign corporations beginning after  Dec. 31, 1996 , and to taxable years of United States shareholders within which or with which such taxable years of foreign corporations end, see  section 1501(d) of Pub. L. 104–188 , set out as a note under  section 904 of this title .\nAmendment by section 1703(i)(5), (6) of  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  Pub. L. 103–66  applicable to taxable years of foreign corporations beginning after  Sept. 30, 1993 , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see  section 13231(e) of Pub. L. 103–66 , set out as a note under  section 951 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to taxable years of foreign corporations beginning after  Dec. 31, 1986 , see  section 1235(h) of Pub. L. 99–514 , set out as a note under  section 1291 of this title .\nFor provisions that nothing in amendment by  section 401(d)(1)(D)(viii)(III) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCOME AVERAGING'},
  'content': 'For purposes of subparagraph (A), gain from the sale or other disposition of property (other than land) regularly used by the taxpayer in such a farming business or fishing business for a substantial period shall be treated as attributable to such a farming business or fishing business.\nThe term “individual” shall not include any estate or trust.\nThe term “farming business” has the meaning given such term by section 263A(e)(4).\nThe term “fishing business” means the conduct of commercial fishing as defined in section 3 of the Magnuson-Stevens Fishery Conservation and Management Act ( 16 U.S.C. 1802 ).\nA prior section 1301, added  Pub. L. 88–272, title II, §\u202f232(a) ,  Feb. 26, 1964 ,  78 Stat. 106 ; amended  Pub. L. 91–172, title III, §\u202f311(a) ,  Dec. 30, 1969 ,  83 Stat. 586 ;  Pub. L. 98–369, div. A, title I, §\u202f173(b) , (c)(1),  July 18, 1984 ,  98 Stat. 704 , placed a limit on the tax attributable to averagable income, prior to repeal by  Pub. L. 99–514, title I , §§\u202f141(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2117 , 2121, effective  Dec. 31, 1986 .\nAnother prior section 1301,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 334 , related to compensation from an employment, defined “an employment”, and stated the rule with respect to partners, prior to the general revision of this part by  Pub. L. 88–272 .\nA prior section 1302, added  Pub. L. 88–272, title II, §\u202f232(a) ,  Feb. 26, 1964 ,  78 Stat. 106 ; amended  Pub. L. 91–172, title III, §\u202f311(b) ,  Dec. 30, 1969 ,  83 Stat. 586 ;  Pub. L. 94–455, title VII, §\u202f701(f)(1) ,  Oct. 4, 1976 ,  90 Stat. 1580 ;  Pub. L. 95–30, title I, §\u202f102(b)(15) ,  May 23, 1977 ,  91 Stat. 138 ;  Pub. L. 95–600, title I, §\u202f101(d)(2) ,  Nov. 6, 1978 ,  92 Stat. 2770 ;  Pub. L. 95–615, §\u202f202(g)(5) , formerly §\u202f202(f)(5),  Nov. 8, 1978 ,  92 Stat. 3100 , renumbered  Pub. L. 96–222, title I, §\u202f108(a)(1)(A) ,  Apr. 1, 1980 ,  94 Stat. 223 ;  Pub. L. 97–34, title I, §\u202f111(b)(3) ,  Aug. 13, 1981 ,  95 Stat. 194 ;  Pub. L. 97–248, title II, §\u202f265(b)(2)(B) ,  Sept. 3, 1982 ,  96 Stat. 547 ;  Pub. L. 98–369, div. A, title I, §\u202f173(a) , (c)(2)–(4),  July 18, 1984 ,  98 Stat. 703 , 704, defined “averagable income” and other terms related to income averaging, prior to repeal by  Pub. L. 99–514, title I , §§\u202f141(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2117 , 2121, effective  Dec. 31, 1986 .\nAnother prior section 1302,  act Aug. 16, 1964, ch. 736 ,  68A Stat. 335 , related to income from an invention or artistic work, prior to the general revision of this part by  Pub. L. 88–272 .\nA prior section 1303, added  Pub. L. 88–272, title II, §\u202f232(a) ,  Feb. 26, 1964 ,  78 Stat. 107 ; amended  Pub. L. 91–172, title III, §\u202f311(d)(1) ,  Dec. 30, 1969 ,  83 Stat. 587 ;  Pub. L. 94–455, title XIX, §\u202f1901(b)(8)(G) ,  Oct. 4, 1976 ,  90 Stat. 1795 ;  Pub. L. 97–34, title I, §\u202f111(b)(4) ,  Aug. 13, 1981 ,  95 Stat. 194 ;  Pub. L. 99–272, title XIII, §\u202f13206(a) , (b),  Apr. 7, 1986 ,  100 Stat. 318 , 319, related to individuals eligible for income averaging, prior to repeal by  Pub. L. 99–514, title I , §§\u202f141(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2117 , 2121, effective  Dec. 31, 1986 .\nAnother prior section 1303, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 335 ,  Sept. 22, 1961 ,  Pub. L. 87–293, title II, §\u202f201(b) ,  75 Stat. 625 , related to income from back pay, prior to the general revision of this part by  Pub. L. 88–272 .\nA prior section 1304, added  Pub. L. 88–272, title II, §\u202f232(a) ,  Feb. 26, 1964 ,  78 Stat. 108 ; amended  Pub. L. 91–172, title III, §\u202f311(c) , (d)(2), title V, §\u202f515(c)(4), title VIII, §§\u202f802(c)(5), 803(d)(8),  Dec. 30, 1969 ,  83 Stat. 587 , 646, 678, 684;  Pub. L. 93–406, title II, §\u202f2005(c)(6) ,  Sept. 2, 1974 ,  88 Stat. 991 ;  Pub. L. 94–455, title III, §\u202f302(c) , title V, §\u202f501(b)(7), title XIX, §\u202f1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1555 , 1559, 1834;  Pub. L. 95–600, title IV, §\u202f401(b)(5) ,  Nov. 6, 1978 ,  92 Stat. 2867 ;  Pub. L. 95–615, §\u202f202(g)(5) , formerly §\u202f202(f)(5),  Nov. 8, 1978 ,  92 Stat. 3100 , renumbered  Pub. L. 96–222, title I, §\u202f108(a)(1)(A) ,  Apr. 1, 1980 ,  94 Stat. 223 ;  Pub. L. 97–34, title I , §§\u202f101(c)(2)(B), 111(b)(3), (4),  Aug. 13, 1981 ,  95 Stat. 183 , 194;  Pub. L. 97–248, title II, §\u202f265(b)(2)(C) ,  Sept. 3, 1982 ,  96 Stat. 547 , set out special rules for income averaging, prior to repeal by  Pub. L. 99–514, title I , §§\u202f141(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2117 , 2121, effective  Dec. 31, 1986 .\nAnother prior section 1304,  act Aug. 11, 1955, ch. 804, §\u202f1(a) ,  69 Stat. 688 , related to compensatory damages for patent infringement, prior to the general revision of this part by  Pub. L. 88–272 .\nA prior section 1305, added  Pub. L. 88–272, title II, §\u202f232(a) ,  Feb. 26, 1964 ,  78 Stat. 110 ; amended  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1834 , provided for promulgation of regulations for income averaging, prior to repeal by  Pub. L. 99–514, title I , §§\u202f141(a), 151(a),  Oct. 22, 1986 ,  100 Stat. 2117 , 2121, effective  Dec. 31, 1986 .\nAnother prior section 1305, act  Aug. 26, 1957 ,  Pub. L. 85–165, §\u202f1 ,  71 Stat. 413 , related to damages for breach of contract or fiduciary duty, prior to the general revision of this part by  Pub. L. 88–272 .\nA prior section 1306,  Pub. L. 85–866, title I, §\u202f58(a) ,  Sept. 2, 1958 ,  72 Stat. 1646 , related to damages received for injuries under the antitrust laws, prior to the general revision of this part by  Pub. L. 88–272 .\nA prior section 1307,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 336 , §\u202f1307, formerly §\u202f1304; renumbered §\u202f1305,  Aug. 11, 1955, ch. 804, §\u202f1(a) ,  69 Stat. 688 ; renumbered §\u202f1306,  Aug. 26, 1957 ,  Pub. L. 85–165, §\u202f1 ,  71 Stat. 413 ; renumbered §\u202f1307,  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f58(a) ,  72 Stat. 1646 ; amended  Oct. 16, 1962 ,  Pub. L. 87–834, §\u202f22(a) ,  76 Stat. 1064 , provided rules applicable to this part, prior to the general revision of this part by  Pub. L. 88–272 .\n2004—Subsec. (a).  Pub. L. 108–357, §\u202f314(b)(1) , substituted “farming business or fishing business” for “farming business” in introductory provisions.\nSubsec. (b)(1)(A)(i), (B).  Pub. L. 108–357, §\u202f314(b)(2) , inserted “or fishing business” after “farming business” wherever appearing.\nSubsec. (b)(4).  Pub. L. 108–357, §\u202f314(b)(3) , added par. (4).\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2003 , see  section 314(c) of Pub. L. 108–357 , set out as an Effective and Termination Dates of 2004 Amendments note under  section 55 of this title .\nPub. L. 105–34, title IX, §\u202f933(c) ,  Aug. 5, 1997 ,  111 Stat. 882 , as amended by  Pub. L. 105–277, div. J, title II, §\u202f2011 ,  Oct. 21, 1998 ,  112 Stat. 2681–902 , provided that:  “The amendments made by this section [enacting this section] shall apply to taxable years beginning after  December 31, 1997 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS'},
  'content': 'If a determination (as defined in section 1313) is described in one or more of the paragraphs of section 1312 and, on the date of the determination, correction of the effect of the error referred to in the applicable paragraph of section 1312 is prevented by the operation of any law or rule of law, other than this part and other than section 7122 (relating to compromises), then the effect of the error shall be corrected by an adjustment made in the amount and in the manner specified in section 1314.\nIn the case of a determination described in section 1312(3)(B) (relating to certain exclusions from income), adjustment shall be made under this part only if assessment of a deficiency for the taxable year in which the item is includible or against the related taxpayer was not barred, by any law or rule of law, at the time the Secretary first maintained, in a notice of deficiency sent pursuant to section 6212 or before the Tax Court, that the item described in section 1312(3)(B) should be included in the gross income of the taxpayer for the taxable year to which the determination relates.\nIn the case of a determination described in section 1312(4) (relating to disallowance of certain deductions and credits), adjustment shall be made under this part only if credit or refund of the overpayment attributable to the deduction or credit described in such section which should have been allowed to the taxpayer or related taxpayer was not barred, by any law or rule of law, at the time the taxpayer first maintained before the Secretary or before the Tax Court, in writing, that he was entitled to such deduction or credit for the taxable year to which the determination relates.\nIn case the amount of the adjustment would be assessed and collected in the same manner as a deficiency (except for cases described in section 1312(3)(B)), the adjustment shall not be made with respect to a related taxpayer unless he stands in such relationship to the taxpayer at the time the latter first maintains the inconsistent position in a return, claim for refund, or petition (or amended petition) to the Tax Court for the taxable year with respect to which the determination is made, or if such position is not so maintained, then at the time of the determination.\n1976—Subsec. (b)(2).  Pub. L. 94–455 , §§\u202f1901(a)(142), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” and “of the United States” after “Tax Court” wherever appearing.\nSubsec. (b)(3).  Pub. L. 94–455, §\u202f1901(a)(142) , struck out “of the United States” after “Tax Court”.\nAmendment by  section 1901(a)(142) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS'},
  'content': 'The determination requires the inclusion in gross income of an item which was erroneously included in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer.\nThe determination allows a deduction or credit which was erroneously allowed to the taxpayer for another taxable year or to a related taxpayer.\nThe determination requires the exclusion from gross income of an item included in a return filed by the taxpayer or with respect to which tax was paid and which was erroneously excluded or omitted from the gross income of the taxpayer for another taxable year, or from the gross income of a related taxpayer; or\nThe determination requires the exclusion from gross income of an item not included in a return filed by the taxpayer and with respect to which the tax was not paid but which is includible in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer.\nThe determination disallows a deduction or credit which should have been allowed to, but was not allowed to, the taxpayer for another taxable year, or to a related taxpayer.\nThe determination allows or disallows any of the additional deductions allowable in computing the taxable income of estates or trusts, or requires or denies any of the inclusions in the computation of taxable income of beneficiaries, heirs, or legatees, specified in subparts A to E, inclusive (secs. 641 and following, relating to estates, trusts, and beneficiaries) of part I of subchapter J of this chapter, or corresponding provisions of prior internal revenue laws, and the correlative inclusion or deduction, as the case may be, has been erroneously excluded, omitted, or included, or disallowed, omitted, or allowed, as the case may be, in respect of the related taxpayer.\nThe determination allows or disallows a deduction (including a credit) in computing the taxable income (or, as the case may be, net income, normal tax net income, or surtax net income) of a corporation, and a correlative deduction or credit has been erroneously allowed, omitted, or disallowed, as the case may be, in respect of a related taxpayer described in section 1313(c)(7).\nThe determination determines the basis of property, and in respect of any transaction on which such basis depends, or in respect of any transaction which was erroneously treated as affecting such basis, there occurred, with respect to a taxpayer described in subparagraph (B) of this paragraph, any of the errors described in subparagraph (C) of this paragraph.\n1958—Pars. (6), (7).  Pub. L. 85–866  added par. (6) and redesignated former par. (6) as (7).\nPub. L. 85–866, title I, §\u202f59(c) ,  Sept. 2, 1958 ,  72 Stat. 1647 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 1314 of this title ] shall apply to determinations (as defined in section 1313(a)) made after  November 14, 1954 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS'},
  'content': 'Notwithstanding section 7701(a)(14), the term “taxpayer” means any person subject to a tax under the applicable revenue law.\n1976—Subsec. (a)(3), (4).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS'},
  'content': 'The adjustment authorized in section 1311(a) shall be made by assessing and collecting, or refunding or crediting, the amount thereof in the same manner as if it were a deficiency determined by the Secretary with respect to the taxpayer as to whom the error was made or an overpayment claimed by such taxpayer, as the case may be, for the taxable year or years with respect to which an amount is ascertained under subsection (a), and as if on the date of the determination one year remained before the expiration of the periods of limitation upon assessment or filing claim for refund for such taxable year or years. If, as a result of a determination described in section 1313(a)(4), an adjustment has been made by the assessment and collection of a deficiency or the refund or credit of an overpayment, and subsequently such determination is altered or revoked, the amount of the adjustment ascertained under subsection (a) of this section shall be redetermined on the basis of such alteration or revocation and any overpayment or deficiency resulting from such redetermination shall be refunded or credited, or assessed and collected, as the case may be, as an adjustment under this part. In the case of an adjustment resulting from an increase or decrease in a net operating loss or net capital loss which is carried back to the year of adjustment, interest shall not be collected or paid for any period prior to the close of the taxable year in which the net operating loss or net capital loss arises.\nThe amount to be assessed and collected in the same manner as a deficiency, or to be refunded or credited in the same manner as an overpayment, under this part, shall not be diminished by any credit or set-off based upon any item other than the one which was the subject of the adjustment. The amount of the adjustment under this part, if paid, shall not be recovered by a claim or suit for refund or suit for erroneous refund based upon any item other than the one which was the subject of the adjustment.\nThis part shall not apply to any tax imposed by subtitle C (sec. 3101 and following relating to employment taxes).\n2014—Subsecs. (d), (e).  Pub. L. 113–295  redesignated subsec. (e) as (d) and struck out former subsec. (d). Prior to amendment, text of subsec. (d) read as follows: “No adjustment shall be made under this part in respect of any taxable year beginning prior to  January 1, 1932 .”\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1969—Subsec. (a).  Pub. L. 91–172, §\u202f512(f)(7) , substituted “capital loss carryback or carryover” for “capital loss carryover”.\nSubsec. (b).  Pub. L. 91–172, §\u202f512(f)(8) , inserted reference to net capital loss.\n1965—Subsec. (a)(1)(A).  Pub. L. 89–44  struck out “(b)(1) and (3)” and inserted in lieu thereof “(b)(1), (3), and (4)”.\n1958—Subsec. (c).  Pub. L. 85–866  substituted in second sentence “The” for “Other than in the case of an adjustment resulting from a determination under section 1313(a)(4), the”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to net capital losses sustained in taxable years beginning after  Dec. 31, 1969 , see  section 512(g) of Pub. L. 91–172 , set out as a note under  section 1212 of this title .\nAmendment by  Pub. L. 89–44  applicable to taxable years beginning on or after  July 1, 1965 , see  section 809(f) of Pub. L. 89–44 , set out as a note under  section 6420 of this title .\nAmendment by  Pub. L. 85–866  effective with respect to determinations made after  Nov. 14, 1954 , see  section 59(c) of Pub. L. 85–866 , set out as a note under  section 1312 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 341 , related to effective date of this part.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 342 , related to involuntary liquidation of LIFO inventories.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section 1331,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 343 , related to war loss recoveries.\nSection 1332,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 343 , related to inclusion in gross income of war loss recoveries.\nSection 1333,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 344 , related to tax adjustment measured by prior benefits.\nSection 1334,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 346 , related to restoration of value of investments referable to destroyed or seized property.\nSection 1335,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 346 , related to election by taxpayer for application of section 1333.\nSection 1336,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 347 , related to basis of recovered property.\nSection 1337,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 347 , related to applicable rules.\nPub. L. 94–455, title XIX, §\u202f1901(a)(145)(B) ,  Oct. 4, 1976 ,  90 Stat. 1788 , provided that:  “The repeal by subparagraph (A) [repealing sections 1331 to 1337 of this title] shall apply with respect to war loss recoveries in taxable years beginning after  December 31, 1976 ”.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CLAIM OF RIGHT'},
  'content': 'Chapter 1 of the Internal Revenue Code of 1939, referred to in subsec. (a), was comprised of sections 1 to 482 of former Title 26, Internal Revenue Code. Chapter 1 was repealed by  section 7851(a)(1)(A) of this title . For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title . See also  section 7851(e) of this title  for provision that references in the 1986 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1986 Code, which is then applicable.\nSubchapter E of chapter 2 of the Internal Revenue Code of 1939, referred to in subsec. (a), was comprised of sections 710 to 784 of former Title 26, Internal Revenue Code. Sections 710 to 736, 740, 742 to 744, 750, 751, 760, 761, and 780 to 784 were repealed by  act Nov. 8, 1945, ch. 453, title I, §\u202f122(a) ,  59 Stat. 568 . Section 741 was repealed by  act Oct. 21, 1942, ch. 619, title II , §§\u202f224(b), 228(b),  56 Stat. 920 , 925. Section 752 was repealed by  act Oct. 21, 1942, ch. 619, title II, §\u202f229(a)(1) ,  56 Stat. 931 , eff. as of  Oct. 8, 1940 .\n1976—Subsec. (b)(2).  Pub. L. 94–455  struck out provision relating to the applicability of this paragraph where deduction arises out of payments or repayments made pursuant to a price redetermination provision in a subcontract entered into before  Jan. 1, 1958 .\n1964—Subsec. (b)(2).  Pub. L. 88–272  substituted “7701(a)(33) without regard to the limitation continued in the last two sentences thereof)” for “1503(c) without regard to paragraph (2) thereof)”.\n1962—Subsec. (b)(4), (5).  Pub. L. 87–863  added pars. (4) and (5).\n1958—Subsec. (a).  Pub. L. 85–866, §\u202f60(a) , inserted “and subchapter E of chapter 2 of such code” in last sentence.\nSubsec. (b)(2).  Pub. L. 85–866, §\u202f60(b) , (c), in second sentence inserted “with respect to rates” and inserted “,\u2000or by an order of a court, or are made in settlement of litigation or under threat or imminence of litigation” and inserted last sentence.\nSubsec. (b)(3).  Pub. L. 85–866, §\u202f60(d) , added par. (3).\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 234(c) of Pub. L. 88–272 , set out as a note under  section 1503 of this title .\nPub. L. 87–863, §\u202f5(b) ,  Oct. 23, 1962 ,  76 Stat. 1143 , provided that:  “The amendment made by subsection (a) [amending this section] shall be effective with respect to taxable years beginning on or after  January 1, 1962 .”\nAmendment by section 60(a), (c), (d) of  Pub. L. 85–866  applicable to taxable years beginning after  Dec. 31, 1953 , and ending after  Aug. 16, 1954 , see  section 1(c)(1) of Pub. L. 85–866 , set out as a note under  section 165 of this title .\nPub. L. 85–866, title I, §\u202f60(e) ,  Sept. 2, 1958 ,  72 Stat. 1647 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1957 . No interest shall be allowed or paid on any overpayment resulting from the application of the amendment made by subsection (c) [amending this section].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'CLAIM OF RIGHT'},
  'content': 'Section, added  Aug. 12, 1955, ch. 870, §\u202f3 ,  69 Stat. 717 , related to computation of tax where taxpayer recovers substantial amount held by another under claim of right.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 349 , related to recovery of unconstitutional Federal taxes.\nRepeal effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 349 ;  Sept. 2, 1958 ,  Pub. L. 85–866, title I, §\u202f61(a) ,  72 Stat. 1648 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title VIII, §\u202f803(d)(5) ,  83 Stat. 684 , related to claims against the United States involving acquisition of property.\nPub. L. 94–455, title XIX, §\u202f1951(b)(12)(B) ,  Oct. 4, 1976 ,  90 Stat. 1840 , provided that:  “Notwithstanding subparagraph (A) [repealing this section], if amounts received in a taxable year beginning after  December 31, 1976 , would have been subject to the provisions of section 1347 if received in a taxable year beginning before such date, the tax imposed by section 1 attributable to such receipt shall be computed as if section 1347 had not been repealed.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REPEALED]'},
  'content': 'Section, added  Pub. L. 91–172, title VIII, §\u202f804(a) ,  Dec. 30, 1969 ,  83 Stat. 685 ; amended  Pub. L. 93–406, title II, §\u202f2005(c)(14) ,  Sept. 2, 1974 ,  88 Stat. 992 ;  Pub. L. 94–455, title III, §\u202f302(a) ,  Oct. 4, 1976 ,  90 Stat. 1554 ;  Pub. L. 95–600, title IV , §§\u202f441(a), 442(a), title VII, §\u202f701(x)(1), (2),  Nov. 6, 1978 ,  92 Stat. 2878 , 2920;  Pub. L. 95–600, title IV, §\u202f441(a) , as amended  Pub. L. 96–222, title I, §\u202f104(a)(5)(B) ,  Apr. 1, 1980 ,  94 Stat. 218 , provided for a 50-percent maximum rate on personal service income.\nRepeal effective for taxable years beginning after  Dec. 31, 1981 , see  section 101(f)(1) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 1 of this title .\nPub. L. 95–600, title IV, §\u202f441(b)(2) ,  Nov. 6, 1978 ,  92 Stat. 2878 , as amended by  Pub. L. 96–222, title I, §\u202f104(a)(5)(A) ,  Apr. 1, 1980 ,  94 Stat. 218 , provided that in the case of a taxable year which began before  Nov. 1, 1978 , and ended after  Oct. 31, 1978 , the amount taken into account under subsec. (b)(2)(B) of  section 1348 of this title  by reason of  section 57(a)(9) of this title  be 50 percent of the lesser of the net capital gain for the taxable year or the net capital gain taking into account only gain or loss properly taken into account for the portion of the taxable year before  Nov. 1, 1978 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'RECOVERIES OF FOREIGN EXPROPRIATION LOSSES'},
  'content': 'This section shall apply only to a recovery, by a domestic corporation subject to the tax imposed by section 11 or 801, of a foreign expropriation loss sustained by such corporation and only if such corporation was subject to the tax imposed by section 11 or 801, as the case may be, for the year of the loss and elects to have the provisions of this section apply with respect to such loss.\nAn election under paragraph (1) shall be made at such time and in such manner as the Secretary may prescribe by regulations. An election made with respect to any foreign expropriation loss shall apply to all recoveries in respect of such loss.\nFor purposes of this section, the term “foreign expropriation loss” means any loss sustained by reason of the expropriation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing. For purposes of the preceding sentence, a debt which becomes worthless shall, to the extent of any deduction allowed under section 166(a), be treated as a loss.\nThe amount of any recovery of a foreign expropriation loss is the amount of money and the fair market value of other property received in respect of such loss, determined as of the date of receipt.\nThe amount of any recovery of a foreign expropriation loss includes, in the case of a life insurance company, the amount of decrease of any item taken into account under section 807(c), to the extent such decrease is attributable to the release, by reason of such loss, of its liabilities with respect to such item.\nThat part of the amount of a recovery of a foreign expropriation loss to which this section applies which, when added to the aggregate of the amounts of previous recoveries with respect to such loss, does not exceed the allowable deductions in prior taxable years on account of such loss shall be excluded from gross income for the taxable year of the recovery for purposes of computing the tax under this subtitle; but there shall be added to, and assessed and collected as a part of, the tax under this subtitle for such taxable year an amount equal to the total increase in the tax under this subtitle for all taxable years which would result by decreasing, in an amount equal to such part of the recovery so excluded, the deductions allowable in the prior taxable years on account of such loss. For purposes of this paragraph, if the loss to which the recovery relates was taken into account as a loss from the sale or exchange of a capital asset, the amount of the loss shall be treated as an allowable deduction even though there were no gains against which to allow such loss.\nThe increase in the tax for each taxable year referred to in paragraph (1) shall be computed in accordance with regulations prescribed by the Secretary. Such regulations shall give effect to previous recoveries of any kind (including recoveries described in section 111, relating to recovery of tax benefit items) with respect to any prior taxable year, but shall otherwise treat the tax previously determined for any taxable year in accordance with the principles set forth in section 1314(a) (relating to correction of errors). Subject to the provisions of paragraph (3), all credits allowable against the tax for any taxable year, and all carryovers and carrybacks affected by so decreasing the allowable deductions, shall be taken into account in computing the increase in the tax.\nFor purposes of this subsection, any choice made under subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year may be changed.\nFor purposes of this subsection, the rates of tax specified in section 11(b) for the taxable year of the recovery shall be treated as having been in effect for all prior taxable years.\nThat part of the amount of a recovery of a foreign expropriation loss to which this section applies which is not excluded from gross income under subsection (d)(1) shall be considered for the taxable year of the recovery as gain on the involuntary conversion of property as a result of its destruction or seizure and shall be recognized or not recognized as provided in section 1033.\nThe basis of property (other than money) received as a recovery of a foreign expropriation loss to which this section applies shall be an amount equal to its fair market value on the date of receipt, reduced by such part of the gain under subsection (e) which is not recognized as provided in section 1033.\nBonds or other evidences of indebtedness received as a recovery of a foreign expropriation loss to which this section applies shall not be considered to have any original issue discount within the meaning of section 1273(a).\n2017—Subsec. (i)(3).  Pub. L. 115–97  struck out at end “or the operations loss deduction under section 810,”.\n1986—Subsec. (d)(2).  Pub. L. 99–514  substituted “relating to recovery of tax benefit items” for “relating to recovery of bad debts, etc.”.\n1984—Subsec. (a)(1).  Pub. L. 98–369, §\u202f211(b)(18)(A) , substituted “801” for “802” in two places.\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f211(b)(18)(B) , substituted “section 807(c)” for “section 810(c)”.\nSubsec. (h).  Pub. L. 98–369, §\u202f42(a)(12) , substituted “section 1273(a)” for “section 1232(a)(2)”.\nSubsec. (i)(1).  Pub. L. 98–369, §\u202f474(r)(25)(A) , substituted “section 27” for “section 33”.\nSubsec. (i)(2).  Pub. L. 98–369, §\u202f474(r)(25)(B) , substituted “section 38 (relating to general business credit)” for “section 38 (relating to investment credit)”.\nSubsec. (i)(3).  Pub. L. 98–369, §\u202f211(b)(18)(C) , substituted “section 810” for “section 812”.\n1978—Subsec. (d)(4).  Pub. L. 95–600  substituted “the rates of tax specified in section 11(b)” for “the normal tax rate provided by section 11(b) and the surtax rate provided by section 11(c) which are in effect”.\n1976—Subsecs. (a)(2), (d)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (d)(3).  Pub. L. 94–455, §\u202f1031(b)(3) , struck out provisions relating to an election to have limitation provided by section 904(a)(2) apply and to revocation of such an election previously made.\nSubsec. (i).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 115–97  applicable to losses arising in taxable years beginning after  Dec. 31, 2017 , see  section 13511(c) of Pub. L. 115–97 , set out as a note under  section 381 of this title .\nAmendment by  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 42(a)(12) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  section 211(b)(18) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 474(r)(25) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  section 1031(b)(3) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , with exceptions for certain mining operations, and for income from possessions, see  section 1031(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nPub. L. 89–384, §\u202f2 ,  Apr. 8, 1966 ,  80 Stat. 105 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by section 1 (except subsection (b)) [enacting this section and  section 6167 of this title  and amending sections 46, 901, 6503, and 6601 of this title] shall apply with respect to amounts received after  December 31, 1964 , in respect of foreign expropriation losses (as defined in section 1351(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] added by section 1(a)) sustained after  December 31, 1958 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Section applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'For purposes of this subchapter, the notional shipping income of an electing corporation shall be the sum of the amounts determined under subsection (b) for each qualifying vessel operated by such electing corporation.\nIn the case of a qualifying vessel any of the income from which is not included in gross income by reason of section 883 or otherwise, the amount of notional shipping income from such vessel for the taxable year shall be the amount which bears the same ratio to such shipping income (determined without regard to this paragraph) as the gross income from the operation of such vessel in the United States foreign trade bears to the sum of such gross income and the income so excluded.\nIf for any period 2 or more persons are operators of a qualifying vessel, the notional shipping income from the operation of such vessel for such period shall be allocated among such persons on the basis of their respective ownership, charter, and operating agreement interests in such vessel or on such other basis as the Secretary may prescribe by regulations.\n2005—Subsec. (d).  Pub. L. 109–135  substituted “ownership, charter, and operating agreement interests” for “ownership and charter interests”.\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'A qualifying vessel operator may elect the application of this subchapter.\nAn election under subsection (a) by a member of a controlled group shall apply to all qualifying vessel operators that are members of such group.\nAn election under subsection (a) may be terminated by revocation.\nIf the revocation specifies a date for revocation which is on or after the day on which the revocation is made, the revocation shall be effective for taxable years beginning on and after the date so specified.\nAn election under subsection (a) shall be terminated whenever (at any time on or after the 1st day of the 1st taxable year for which the corporation is an electing corporation) such corporation ceases to be a qualifying vessel operator.\nAny termination under this paragraph shall be effective on and after the date of cessation.\nThe Secretary shall prescribe such annualization and other rules as are appropriate in the case of a termination under this paragraph.\nIf a qualifying vessel operator has made an election under subsection (a) and if such election has been terminated under subsection (d), such operator (and any successor operator) shall not be eligible to make an election under subsection (a) for any taxable year before its 5th taxable year which begins after the 1st taxable year for which such termination is effective, unless the Secretary consents to such election.\n2015—Subsec. (d)(1)(B)(i).  Pub. L. 114–41  substituted “4th month” for “3d month”.\n2005—Subsec. (b).  Pub. L. 109–135  inserted “on or” after “only if made” in concluding provisions.\nAmendment by  Pub. L. 114–41  applicable to returns for taxable years beginning after  Dec. 31, 2015 , with special rule for certain C corporations, see  section 2006(a)(3) of Pub. L. 114–41 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'The term “electing corporation” means any corporation for which an election is in effect under this subchapter.\nThe term “electing group” means a controlled group of which one or more members is an electing corporation.\nThe term “controlled group” means any group which would be treated as a single employer under subsection (a) or (b) of section 52 if paragraphs (1) and (2) of section 52(a) did not apply.\nThe term “qualifying vessel” means a self-propelled (or a combination self-propelled and non-self-propelled) United States flag vessel of not less than 6,000 deadweight tons used exclusively in the United States foreign trade during the period that the election under this subchapter is in effect.\nThe term “United States flag vessel” means any vessel documented under the laws of the United States.\nThe term “United States domestic trade” means the transportation of goods or passengers between places in the United States.\nThe term “United States foreign trade” means the transportation of goods or passengers between a place in the United States and a foreign place or between foreign places.\nExcept as otherwise provided in this subsection, a corporation meets the shipping activity requirement of this subsection for any taxable year only if the requirement of paragraph (4) is met for each of the 2 preceding taxable years.\nA corporation meets the shipping activity requirement of this subsection for the first taxable year for which the election under section 1354(a) is in effect only if the requirement of paragraph (4) is met for the preceding taxable year.\nA corporation who is a member of a controlled group meets the shipping activity requirement of this subsection only if such requirement is met determined by treating all members of such group as 1 person.\nThe requirement of this paragraph is met for any taxable year if, on average during such year, at least 25 percent of the aggregate tonnage of qualifying vessels used by the corporation were owned by such corporation or chartered to such corporation on bareboat charter terms.\nNotice shall be deemed timely if given not later than the due date (including extensions) for the corporation’s tax return for the taxable year in which the temporary cessation begins.\nNotice shall be deemed timely if given not later than the due date (including extensions) for the corporation’s tax return for the taxable year in which the temporary cessation begins.\nParagraph (1) shall not apply to any qualifying vessel which is operated in the United States domestic trade for more than 30 days during the taxable year.\nNotice shall be deemed timely if given not later than the due date (including extensions) for the corporation’s tax return for the taxable year in which the temporary cessation begins.\nSubparagraph (A) shall not apply to any qualifying vessel which is operated in the United States domestic trade (other than qualified zone domestic trade) for more than 30 days during the taxable year.\nIn the case of a qualifying vessel to which this subsection applies, the Secretary shall prescribe rules for the proper allocation of income, expenses, losses, and deductions between the qualified shipping activities and the other activities of such vessel.\nThe term “qualified zone domestic trade” means the transportation of goods or passengers between places in the qualified zone if such transportation is in the United States domestic trade.\nThe term “qualified zone” means the Great Lakes Waterway and the St. Lawrence Seaway.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.\n2018—Subsec. (f)(3).  Pub. L. 115–141  substituted “on which” for “of which” in introductory provisions.\n2006—Subsec. (a)(4).  Pub. L. 109–432, §\u202f413(a) , substituted “6,000” for “10,000 (6,000, in the case of taxable years beginning after  December 31, 2005 , and ending before  January 1, 2011 )”.\nPub. L. 109–222  inserted “(6,000, in the case of taxable years beginning after  December 31, 2005 , and ending before  January 1, 2011 )” after “10,000”.\nSubsecs. (g), (h).  Pub. L. 109–432, §\u202f415(a) , added subsec. (g) and redesignated former subsec. (g) as (h).\n2005—Subsec. (a)(8).  Pub. L. 109–135, §\u202f403(g)(1)(B) , struck out heading and text of par. (8). Text read as follows: “The term ‘charter’ includes an operating agreement.”\nSubsec. (b)(1).  Pub. L. 109–135, §\u202f403(g)(1)(C) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Except as provided in paragraph (2), a person is treated as operating any vessel during any period if such vessel is—\n“(A) owned by, or chartered (including a time charter) to, the person, and\n“(B) is in use as a qualifying vessel during such period.”\nSubsec. (c)(3).  Pub. L. 109–135, §\u202f403(g)(2) , substituted “determined by treating all members of such group as 1 person.” for “determined—\n“(A) by treating all members of such group as 1 person, and\n“(B) by disregarding vessel charters between members of such group.”\nSubsec. (d)(3).  Pub. L. 109–135, §\u202f403(g)(1)(D) , amended par. (3) generally. Prior to amendment, par. (3) read as follows: “the extent of a partner’s ownership or charter interest in any vessel owned by or chartered to the partnership shall be determined on the basis of the partner’s interest in the partnership.”\nPub. L. 109–432, div. A, title IV, §\u202f413(b) ,  Dec. 20, 2006 ,  120 Stat. 2963 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 205 of the Tax Increase Prevention and Reconciliation Act of 2005 [ Pub. L. 109–222 ].”\nPub. L. 109–432, div. A, title IV, §\u202f415(b) ,  Dec. 20, 2006 ,  120 Stat. 2965 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Dec. 20, 2006 ].”\nPub. L. 109–222, title II, §\u202f205(b) ,  May 17, 2006 ,  120 Stat. 350 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2005 .”\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'For purposes of this subchapter, the term “core qualifying activities” means activities in operating qualifying vessels in United States foreign trade.\nThe term “qualifying secondary activities” means secondary activities but only to the extent that, without regard to this subchapter, the gross income derived by such corporation from such activities does not exceed 20 percent of the gross income derived by the corporation from its core qualifying activities.\nIn the case of an electing group, subsections (c)(1) and (d)(3) shall be applied as if such group were 1 entity, and the limitations under such subsections shall be allocated among the corporations in such group.\n2005—Subsec. (c)(2).  Pub. L. 109–135, §\u202f403(g)(3)(B) , inserted concluding provisions.\nSubsec. (c)(3).  Pub. L. 109–135, §\u202f403(g)(3)(A) , struck out heading and text of par. (3). Text read as follows:\n“(A)  In general .—Such term shall not include any core qualifying activities.\n“(B)  Nonelecting corporations .—In the case of a corporation (other than an electing corporation) which is a member of an electing group, any core qualifying activities of the corporation shall be treated as qualifying secondary activities (and not as core qualifying activities).”\nAmendments by  Pub. L. 109–135  effective as if included in the provisions of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which they relate, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Gross income of an electing corporation shall not include its income from qualifying shipping activities.\nGross income of a corporation (other than an electing corporation) which is a member of an electing group shall not include its income from qualifying shipping activities conducted by such member.\nSubject to paragraph (2), each item of loss, deduction (other than for interest expense), or credit of any taxpayer with respect to any activity the income from which is excluded from gross income under this section shall be disallowed.\nNotwithstanding paragraph (1), the adjusted basis (for purposes of determining gain) of any qualifying vessel shall be determined as if the deduction for depreciation had been allowed.\nExcept as provided in clause (ii), the straight-line method of depreciation shall apply to qualifying vessels the income from operation of which is excluded from gross income under this section.\nClause (i) shall not apply to any qualifying vessel which is subject to a charter entered into before the date of the enactment of this subchapter.\nExcept as provided in subparagraph (B), the interest expense of an electing corporation shall be disallowed in the ratio that the fair market value of such corporation’s qualifying vessels bears to the fair market value of such corporation’s total assets.\nIn the case of a corporation which is a member of an electing group, the interest expense of such corporation shall be disallowed in the ratio that the fair market value of such corporation’s qualifying vessels bears to the fair market value of the electing groups total assets.\nThe date of the enactment of this subchapter, referred to in subsec. (c)(2)(B)(ii), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'For purposes of this chapter, the qualifying shipping activities of an electing corporation shall be treated as a separate trade or business activity distinct from all other activities conducted by such corporation.\n2018—Subsec. (b)(1).  Pub. L. 115–141, §\u202f401(a)(188) , substituted “section 1352(2)” for “section 1352(a)(2)”.\nSubsec. (c)(2).  Pub. L. 115–141, §\u202f401(a)(189) , substituted “a person’s” for “an person’s”.\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'If any qualifying vessel operator sells or disposes of any qualifying vessel in an otherwise taxable transaction, at the election of such operator, no gain shall be recognized if any replacement qualifying vessel is acquired during the period specified in subsection (b), except to the extent that the amount realized upon such sale or disposition exceeds the cost of the replacement qualifying vessel.\nFor purposes of this section, the term “qualifying vessel operator” includes any person who would be a qualifying vessel operator were such person a corporation.\nIn the case of any replacement qualifying vessel purchased by the qualifying vessel operator which resulted in the nonrecognition of any part of the gain realized as the result of a sale or other disposition of a qualifying vessel, the basis shall be the cost of the replacement qualifying vessel decreased in the amount of the gain not so recognized; and if the property purchased consists of more than one piece of property, the basis determined under this sentence shall be allocated to the purchased properties in proportion to their respective costs.\nSection applicable to taxable years beginning after  Oct. 22, 2004 , see  section 248(c) of Pub. L. 108–357 , set out as an Effective Date of 2004 Amendments note under  section 56 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'IN GENERAL'},
  'content': 'For purposes of this title, the term “S corporation” means, with respect to any taxable year, a small business corporation for which an election under section 1362(a) is in effect for such year.\nFor purposes of this title, the term “C corporation” means, with respect to any taxable year, a corporation which is not an S corporation for such year.\nFor purposes of this title, if any corporation which was a qualified subchapter S subsidiary ceases to meet the requirements of subparagraph (B), such corporation shall be treated as a new corporation acquiring all of its assets (and assuming all of its liabilities) immediately before such cessation from the S corporation in exchange for its stock.\nExcept to the extent provided by the Secretary, this paragraph shall not apply to part III of subchapter A of chapter 61 (relating to information returns).\nThe term “members of a family” means a common ancestor, any lineal descendant of such common ancestor, and any spouse or former spouse of such common ancestor or any such lineal descendant.\nAn individual shall not be considered to be a common ancestor if, on the applicable date, the individual is more than 6 generations removed from the youngest generation of shareholders who would (but for this subparagraph) be members of the family. For purposes of the preceding sentence, a spouse (or former spouse) shall be treated as being of the same generation as the individual to whom such spouse is (or was) married.\nAny legally adopted child of an individual, any child who is lawfully placed with an individual for legal adoption by the individual, and any eligible foster child of an individual (within the meaning of section 152(f)(1)(C)), shall be treated as a child of such individual by blood.\nFor purposes of subsection (b)(1)(B), the term “estate” includes the estate of an individual in a case under title 11 of the United States Code.\nFor purposes of subsection (b)(1)(D), a corporation shall not be treated as having more than 1 class of stock solely because there are differences in voting rights among the shares of common stock.\nFor purposes of subsection (b)(1)(D), straight debt shall not be treated as a second class of stock.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to provide for the proper treatment of straight debt under this subchapter and for the coordination of such treatment with other provisions of this title.\nA beneficiary of a qualified subchapter S trust (or his legal representative) may elect to have this subsection apply.\nAn election under this paragraph shall be made separately with respect to each corporation the stock of which is held by the trust.\nIf there is an election under this paragraph with respect to any beneficiary, an election under this paragraph shall be treated as made by each successive beneficiary unless such beneficiary affirmatively refuses to consent to such election.\nAny election, or refusal, under this paragraph shall be made in such manner and form, and at such time, as the Secretary may prescribe.\nAn election under this paragraph, once made, may be revoked only with the consent of the Secretary.\nAn election under this paragraph shall be effective up to 15 days and 2 months before the date of the election.\nIf a qualified subchapter S trust ceases to meet any requirement of paragraph (3)(A), the provisions of this subsection shall not apply to such trust as of the date it ceases to meet such requirement.\nIf any qualified subchapter S trust ceases to meet any requirement of paragraph (3)(B) but continues to meet the requirements of paragraph (3)(A), the provisions of this subsection shall not apply to such trust as of the first day of the first taxable year beginning after the first taxable year for which it failed to meet the requirements of paragraph (3)(B).\nFor purposes of subparagraph (A), the term “purchase” means any acquisition if the basis of the property acquired is determined under section 1012.\nFor purposes of this section, the term “potential current beneficiary” means, with respect to any period, any person who at any time during such period is entitled to, or at the discretion of any person may receive, a distribution from the principal or income of the trust (determined without regard to any power of appointment to the extent such power remains unexercised at the end of such period). If a trust disposes of all of the stock which it holds in an S corporation, then, with respect to such corporation, the term “potential current beneficiary” does not include any person who first met the requirements of the preceding sentence during the 1-year period ending on the date of such disposition.\nAn election under this subsection shall be made by the trustee. Any such election shall apply to the taxable year of the trust for which made and all subsequent taxable years of such trust unless revoked with the consent of the Secretary.\nFor special treatment of electing small business trusts, see section 641(c).\nRestricted bank director stock shall not be taken into account as outstanding stock of the S corporation in applying this subchapter (other than section 1368(f)).\nFor treatment of certain distributions with respect to restricted bank director stock, see section 1368(f).\nIn the case of a bank which changes from the reserve method of accounting for bad debts described in section 585 or 593 for its first taxable year for which an election under section 1362(a) is in effect, the bank may elect to take into account any adjustments under section 481 by reason of such change for the taxable year immediately preceding such first taxable year.\nThe date of the enactment of this clause, referred to in subsec. (c)(2)(A)(vi), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\nA prior section 1361, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 350 ;  Oct. 10, 1962 ,  Pub. L. 87–792, §\u202f7(h) ,  76 Stat. 829 ;  Feb. 26, 1964 ,  Pub. L. 88–272, title II, §\u202f225(k)(5) ,  78 Stat. 94 ;  Apr. 14, 1966 ,  Pub. L. 89–389, §\u202f4(a) ,  80 Stat. 115 , related to election of certain partnerships and proprietorships to be taxed as domestic corporations, prior to repeal by  Pub. L. 89–389, §\u202f4(b)(1) ,  Apr. 14, 1966 ,  80 Stat. 116 , effective  Jan. 1, 1969 .\n2018—Subsec. (b)(2)(C), (D).  Pub. L. 115–141, §\u202f401(d)(1)(D)(xvi) , redesignated subpar. (D) as (C) and struck out former subpar. (C) which read as follows: “a corporation to which an election under section 936 applies, or”.\nSubsec. (c)(2)(B)(vi).  Pub. L. 115–141, §\u202f109(a) , substituted “the shareholder” for “a shareholder”.\nSubsec. (f)(2).  Pub. L. 115–141, §\u202f401(a)(190) , substituted “1813(w)(1))),” for “1813(w)(1)),” in introductory provisions.\n2017—Subsec. (c)(2)(B)(v).  Pub. L. 115–97  inserted at end “This clause shall not apply for purposes of subsection (b)(1)(C).”\n2007—Subsec. (b)(3)(C).  Pub. L. 110–28, §\u202f8234(a) , designated existing provisions as cl. (i), inserted cl. (i) heading, and added cl. (ii).\nSubsec. (f).  Pub. L. 110–28, §\u202f8232(a) , added subsec. (f).\nSubsec. (g).  Pub. L. 110–28, §\u202f8233(a) , added subsec. (g).\n2005—Subsec. (b)(3)(A).  Pub. L. 109–135, §\u202f413(c)(1) , struck out “and in the case of information returns required under part III of subchapter A of chapter 61” after “Secretary”.\nSubsec. (b)(3)(E).  Pub. L. 109–135, §\u202f413(c)(2) , added subpar. (E).\nSubsec. (c)(1).  Pub. L. 109–135, §\u202f403(b) , reenacted heading without change and amended text generally. Prior to amendment, text consisted of subpars. (A) to (D) relating to treatment as 1 shareholder, family members, adoption, and election.\nSubsec. (c)(2)(A)(vi).  Pub. L. 109–135, §\u202f413(a)(1) , inserted “or a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act ( 12 U.S.C. 1813(w)(1) )” after “a bank (as defined in section 581)” and “or company” after “such bank”.\n2004—Subsec. (b)(1)(A).  Pub. L. 108–357, §\u202f232(a) , substituted “100” for “75”.\nSubsec. (b)(3)(A).  Pub. L. 108–357, §\u202f239(a) , inserted “and in the case of information returns required under part III of subchapter A of chapter 61” after “Secretary”.\nSubsec. (c)(1).  Pub. L. 108–357, §\u202f231(a) , amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “For purposes of subsection (b)(1)(A), a husband and wife (and their estates) shall be treated as 1 shareholder.”\nSubsec. (c)(2)(A)(vi).  Pub. L. 108–357, §\u202f233(a) , added cl. (vi).\nSubsec. (c)(2)(B)(vi).  Pub. L. 108–357, §\u202f233(b) , added cl. (vi).\nSubsec. (d)(1)(C).  Pub. L. 108–357, §\u202f236(a) , added subpar. (C).\nSubsec. (e)(2).  Pub. L. 108–357, §\u202f234(a) , inserted “(determined without regard to any power of appointment to the extent such power remains unexercised at the end of such period)” after “of the trust” and substituted “1-year” for “60-day”.\n2000—Subsec. (e)(1)(A)(i)(IV).  Pub. L. 106–554  added subcl. (IV).\n1998—Subsec. (e)(4).  Pub. L. 105–206  substituted “section 641(c)” for “section 641(d)”.\n1997—Subsec. (b)(1)(B).  Pub. L. 105–34, §\u202f1601(c)(4)(C) , substituted “subsection (c)(6)” for “subsection (c)(7)”.\nSubsec. (b)(3)(A).  Pub. L. 105–34, §\u202f1601(c)(3) , substituted “Except as provided in regulations prescribed by the Secretary, for purposes of this title” for “For purposes of this title”.\nSubsec. (c)(6), (7).  Pub. L. 105–34, §\u202f1601(c)(4)(B) , redesignated par. (7) as (6).\nSubsec. (e)(1)(B)(iii).  Pub. L. 105–34, §\u202f1601(c)(1) , added cl. (iii).\n1996—Subsec. (b)(1)(A).  Pub. L. 104–188, §\u202f1301 , substituted “75” for “35”.\nSubsec. (b)(1)(B).  Pub. L. 104–188, §\u202f1316(a)(1) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “have as a shareholder a person (other than an estate and other than a trust described in subsection (c)(2)) who is not an individual,”.\nSubsec. (b)(2)(A).  Pub. L. 104–188, §\u202f1315 , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “a financial institution to which section 585 applies (or would apply but for subsection (c) thereof),”.\nPub. L. 104–188, §\u202f1308(a) , redesignated subpar. (B) as (A) and struck out former subpar. (A) which read as follows: “a member of an affiliated group (determined under section 1504 without regard to the exceptions contained in subsection (b) thereof),”.\nSubsec. (b)(2)(B).  Pub. L. 104–188, §\u202f1308(a) , redesignated subpar. (C) as (B). Former subpar. (B) redesignated (A).\nPub. L. 104–188, §\u202f1616(b)(15) , struck out “or to which section 593 applies” after “subsection (c) thereof)”.\nSubsec. (b)(2)(C) to (E).  Pub. L. 104–188, §\u202f1308(a) , redesignated subpars. (D) and (E) as (C) and (D), respectively. Former subpar. (C) redesignated (B).\nSubsec. (b)(3).  Pub. L. 104–188, §\u202f1308(b) , added par. (3).\nSubsec. (c)(2)(A)(ii).  Pub. L. 104–188, §\u202f1303 , substituted “2-year period” for “60-day period” in first sentence and struck out at end “If a trust is described in the preceding sentence and if the entire corpus of the trust is includible in the gross estate of the deemed owner, the preceding sentence shall be applied by substituting ‘2-year period’ for ‘60-day period’.”\nSubsec. (c)(2)(A)(iii).  Pub. L. 104–188, §\u202f1303(1) , substituted “2-year period” for “60-day period”.\nSubsec. (c)(2)(A)(v).  Pub. L. 104–188, §\u202f1302(a) , added cl. (v).\nSubsec. (c)(2)(B)(v).  Pub. L. 104–188, §\u202f1302(b) , added cl. (v).\nSubsec. (c)(5)(B)(iii).  Pub. L. 104–188, §\u202f1304 , substituted “a trust described in paragraph (2), or a person which is actively and regularly engaged in the business of lending money” for “or a trust described in paragraph (2)”.\nSubsec. (c)(6).  Pub. L. 104–188, §\u202f1308(d)(1) , struck out par. (6) which read as follows:\n“(6)  Ownership of stock in certain inactive corporations .—For purposes of subsection (b)(2)(A), a corporation shall not be treated as a member of an affiliated group during any period within a taxable year by reason of the ownership of stock in another corporation if such other corporation—\n“(A) has not begun business at any time on or before the close of such period, and\n“(B) does not have gross income for such period.”\nSubsec. (c)(7).  Pub. L. 104–188, §\u202f1316(a)(2) , added par. (7).\nSubsec. (e).  Pub. L. 104–188, §\u202f1302(c) , added subsec. (e).\nSubsec. (e)(1)(A)(i).  Pub. L. 104–188, §\u202f1316(e) , struck out “which holds a contingent interest and is not a potential current beneficiary” after “170(c)”.\n1989—Subsec. (b)(2)(B).  Pub. L. 101–239  amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “a financial institution which is a bank (as defined in section 585(a)(2)) or to which section 593 applies,”.\n1988—Subsec. (d)(3).  Pub. L. 100–647  substituted “within the meaning of” for “treated as a separate trust under” in last sentence.\n1986—Subsec. (b)(2)(B).  Pub. L. 99–514, §\u202f901(d)(4)(G) , substituted “which is a bank (as defined in section 585(a)(2)) or to which section 593 applies” for “to which section 585 or 593 applies”.\nSubsec. (d)(3).  Pub. L. 99–514, §\u202f1879(m)(1)(A) , inserted at end “A substantially separate and independent share of a trust treated as a separate trust under section 663(c) shall be treated as a separate trust for purposes of this subsection and subsection (c).”\n1984—Subsec. (c)(6).  Pub. L. 98–369, §\u202f721(c) , amended par. (6) generally, substituting “during any period within a taxable year” for “during any taxable year” in provisions preceding subpar. (A), and substituting “on or before the close of such period” for “on or after the date of its incorporation and before the close of such taxable year” in subpar. (A), and “does not have gross income for such period” for “does not have taxable income for the period included within such taxable year” in subpar. (B).\nSubsec. (d)(2)(B)(i).  Pub. L. 98–369, §\u202f721(f)(3) , substituted “corporation” for “S corporation” in heading and text.\nSubsec. (d)(2)(D).  Pub. L. 98–369, §\u202f721(f)(1) , substituted “15 days and 2 months” for “60 days”.\nSubsec. (d)(3).  Pub. L. 98–369, §\u202f721(f)(2) , in amending par. (3) generally, redesignated subpar. (C) as (A), substituted a period for “,\u2000and” at end of subpar. (B), and struck out former subpar. (A) which read “which owns stock in 1 or more S corporations”.\nSubsec. (d)(4).  Pub. L. 98–369, §\u202f721(f)(2) , in amending par. (4) generally, redesignated existing provisions as subpar. (A), inserted “Failure to meet requirements of paragraph (3)(A)” as subpar. (A) heading, substituted “of paragraph (3)(A)” for “under paragraph (3)”, and added subpar. (B).\nAmendment by  section 109(a) of Pub. L. 115–141  effective as if included in section 319 of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , see  section 109(c) of Pub. L. 115–141 , set out as a note under  section 501 of this title .\nPub. L. 115–97, title I, §\u202f13541(b) ,  Dec. 22, 2017 ,  131 Stat. 2154 , provided that:  “The amendment made by this section [amending this section] shall take effect on  January 1, 2018 .”\nPub. L. 110–28, title VIII, §\u202f8232(c) ,  May 25, 2007 ,  121 Stat. 198 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and  section 1368 of this title ] shall apply to taxable years beginning after  December 31, 2006 . \n \n “(2)   Special rule for treatment as second class of stock .— In the case of any taxable year beginning after  December 31, 1996 , restricted bank director stock (as defined in section 1361(f) of the Internal Revenue Code of 1986, as added by this section) shall not be taken into account in determining whether an S corporation has more than 1 class of stock.”\nPub. L. 110–28, title VIII, §\u202f8233(b) ,  May 25, 2007 ,  121 Stat. 198 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nPub. L. 110–28, title VIII, §\u202f8234(b) ,  May 25, 2007 ,  121 Stat. 199 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2006 .”\nAmendment by  section 403(b) of Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 403(nn) of Pub. L. 109–135 , set out as a note under  section 26 of this title .\nPub. L. 109–135, title IV, §\u202f413(d) ,  Dec. 21, 2005 ,  119 Stat. 2642 , provided that:  “The amendments made by this section [amending this section and sections 1362 and 4975 of this title] shall take effect as if included in the provisions of the American Jobs Creation Act of 2004 [ Pub. L. 108–357 ] to which they relate.”\nPub. L. 108–357, title II, §\u202f231(c)(1) ,  Oct. 22, 2004 ,  118 Stat. 1433 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nPub. L. 108–357, title II, §\u202f232(b) ,  Oct. 22, 2004 ,  118 Stat. 1434 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by section 233(a), (b) of  Pub. L. 108–357  effective  Oct. 22, 2004 , see  section 233(e) of Pub. L. 108–357 , set out as a note under  section 512 of this title .\nPub. L. 108–357, title II, §\u202f234(b) ,  Oct. 22, 2004 ,  118 Stat. 1435 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nPub. L. 108–357, title II, §\u202f236(b) ,  Oct. 22, 2004 ,  118 Stat. 1435 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers made after  December 31, 2004 .”\nPub. L. 108–357, title II, §\u202f239(b) ,  Oct. 22, 2004 ,  118 Stat. 1437 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nAmendment by  Pub. L. 106–554  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see section 1(a)(7) [title III, §\u202f316(e)] of  Pub. L. 106–554 , set out as a note under  section 51 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by sections 1301–1302(c), 1303, 1304, 1308(a), (b), (d)(1), and 1315 of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by sections 1316(a), (e) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1997 , see  section 1316(f) of Pub. L. 104–188 , set out as a note under  section 170 of this title .\nAmendment by  section 1616(b)(15) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1995 , see  section 1616(c) of Pub. L. 104–188 , set out as a note under  section 593 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 901(d)(4)(G) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 901(e) of Pub. L. 99–514 , set out as a note under  section 166 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(m)(2) ,  Oct. 22, 1986 ,  100 Stat. 2910 , provided that:  “The amendments made by this subsection [amending this section and  section 1368 of this title ] shall apply to taxable years beginning after  December 31, 1982 .”\nPub. L. 98–369, div. A, title VII, §\u202f721(y) ,  July 18, 1984 ,  98 Stat. 972 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, any amendment made by this section [amending this section, sections 48, 108, 267, 318, 465, 1362, 1363, 1367, 1368, 1371, 1374, 1375, 1378, 1379, 6362, and 6659 and provisions set out as a note under this section] shall take effect as if included in the Subchapter S Revision Act of 1982 [ Pub. L. 97–354 ]. \n \n “(2)   Amendment made by subsection  (b) (2) .— Subparagraph (C) of section 108(d)(7) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (b)(2)) shall apply to contributions to capital after  December 31, 1980 , in taxable years ending after such date. \n \n “(3)   Amendment made by subsection  (g) (1) .— If— “(A)  any portion of a qualified stock purchase is pursuant to a binding contract entered into on or after  October 19, 1982 , and before the date of the enactment of this Act [ July 18, 1984 ], and \n \n “(B)  the purchasing corporation establishes by clear and convincing evidence that such contract was negotiated on the contemplation that, with respect to the deemed sale under section 338 of the Internal Revenue Code of 1986, paragraph (2) of section 1362(e) of such Code would apply, \n \n\n then the amendment made by paragraph (1) of subsection (g) [amending  section 1362 of this title ] shall not apply to such qualified stock purchase. \n \n “(4)   Amendments made by subsection  (l ).— The amendments made by subsection ( l ) [amending  section 1362 of this title ] shall apply to any election under section 1362 of the Internal Revenue Code of 1986 (or any corresponding provision of prior law) made after  October 19, 1982 . \n \n “(5)   Amendment made by subsection  (t).— If— “(A)  on or before the date of the enactment of this Act [ July 18, 1984 ] 50 percent or more of the stock of an S corporation has been sold or exchanged in 1 or more transactions, and \n \n “(B)  the person (or persons) acquiring such stock establish by clear and convincing evidence that such acquisitions were negotiated on the contemplation that paragraph (2) of section 1362(e) of the Internal Revenue Code of 1986 would apply to the S termination year in which such sales or exchanges occur, \n \n\n then the amendment made by subsection (t) [amending  section 1362 of this title ] shall not apply to such S termination year.”\nPub. L. 97–354, §\u202f6 ,  Oct. 19, 1982 ,  96 Stat. 1697 , as amended by  Pub. L. 97–448, title III, §\u202f305(d)(1)(A) ,  Jan. 12, 1983 ,  96 Stat. 2399 ;  Pub. L. 98–369, div. A, title VII, §\u202f721(i) , (k),  July 18, 1984 ,  98 Stat. 969 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   In General .— Except as otherwise provided in this section, the amendments made by this Act [enacting this section and sections 1362, 1363, 1366 to 1368, 1371 to 1375, 1377 to 1379, and 6241 to 6245 of this title, amending sections 31, 44D to 44F, 46, 48, 50A, 50B, 52, 53, 55, 57, 58, 62, 108, 163, 168, 170, 172, 179, 183, 189, 194, 267, 280, 280A, 291, 447, 464, 465, 613A, 992, 1016, 1101, 1212, 1251, 1254, 1256, 3453, 3454, 4992, 4996, 6037, 6042, 6362, and 6661 of this title and  section 1108 of Title 29 , Labor, omitting  section 1376 of this title , and enacting provisions set out as a note under  section 1 of this title ] shall apply to taxable years beginning after  December 31, 1982 . \n \n “(b)   Transitional Rules.— “(1)   Sections 1379 and 62(9) continue to apply for 1983 .— Sections 1379 and 62(9) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the date of the enactment of this Act [ Oct. 19, 1982 ]) shall remain in effect for years beginning before  January 1, 1984 . \n \n “(2)   Allowance of exclusion of death benefit .— Notwithstanding section 241(b) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 241(b) of Pub. L. 97–248 , set out as a note under  section 416 of this title ] in the case of amounts received under a plan of an S corporation, the amendment made by section 239 of such Act [ section 239 of Pub. L. 97–248 , amending  section 101 of this title ] shall apply with respect to decedents dying after  December 31, 1982 . \n \n “(3)   New passive income rules apply to taxable years beginning during 1982 .— In the case of a taxable year beginning during 1982— “(A)  sections 1362(d)(3), 1366(f)(3), and 1375 of the Internal Revenue Code of 1986 (as amended by this Act [ Pub. L. 97–354 ]) shall apply, and \n \n “(B)  section 1372(e)(5) of such Code (as in effect on the day before the date of the enactment of this Act [ Oct. 19, 1982 ]) shall not apply. \n \n\n The preceding sentence shall not apply in the case of any corporation which elects (at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe) to have such sentence not apply. Subsection (e) shall not apply to any termination resulting from an election under the preceding sentence. \n \n \n “(c)   Grandfather Rules.— “(1)   Subsidiaries which are foreign corporations or disc’s .— In the case of any corporation which on  September 28, 1982 , would have been a member of the same affiliated group as an electing small business corporation but for paragraph (3) or (7) of section 1504(b) of the Internal Revenue Code of 1986, subparagraph (A) of section 1361(b)(2) of such Code (as amended by section 2) shall be applied by substituting ‘without regard to the exceptions contained in paragraphs (1), (2), (4), (5), and (6) of subsection (b) thereof’ for ‘without regard to the exceptions contained in subsection (b) thereof’. \n \n “(2)   Casualty insurance companies.— “(A)   In general .— In the case of any qualified casualty insurance electing small business corporation— “(i)  the amendments made by this Act shall not apply, and \n \n “(ii)  subchapter S (as in effect on  July 1, 1982 ) of chapter 1 of the Internal Revenue Code of 1986 [former sections 1371 to 1379 of this title] and part III of subchapter L of chapter 1 of such Code [section 831 et seq. of this title] shall apply. \n \n \n “(B)   Qualified casualty insurance electing small business corporation .— The term ‘qualified casualty insurance electing small business corporation’ means any corporation described in section 831(a) of the Internal Revenue Code of 1986 if— “(i)  as of  July 12, 1982 , such corporation was an electing small business corporation and was described in section 831(a) of such Code, \n \n “(ii)  such corporation was formed before  April 1, 1982 , and proposed (through a written private offering first circulated to investors before such date) to elect to be taxed as a subchapter S corporation and to be operated on an established insurance exchange, or \n \n “(iii)  such corporation is approved for membership on an established insurance exchange pursuant to a written agreement entered into before  December 31, 1982 , and such corporation is described in section 831(a) of such Code as of  December 31, 1984 . \n \n\n \u2001\u2001A corporation shall not be treated as a qualified casualty insurance electing small business corporation unless an election under subchapter S of chapter 1 of such Code is in effect for its first taxable year beginning after  December 31, 1984 . \n \n \n “(3)   Certain corporations with oil and gas production.— “(A)   In general .— In the case of any qualified oil corporation— “(i)  the amendments made by this Act shall not apply, and \n \n “(ii)  subchapter S (as in effect on  July 1, 1982 ) of chapter 1 of the Internal Revenue Code of 1986 [former sections 1371 to 1379 of this title] shall apply. \n \n \n “(B)   Qualified oil corporation .— For purposes of this paragraph, the term ‘qualified oil corporation’ means any corporation if— “(i)  as of  September 28, 1982 , such corporation— \u2001\u2001“(I)  was an electing small business corporation, or \n \n \u2001\u2001“(II)  was a small business corporation which made an election under section 1372(a) after  December 31, 1981 , and before  September 28, 1982 , \n \n \n “(ii)  for calendar year 1982, the combined average daily production of domestic crude oil or natural gas of such corporation and any one of its substantial shareholders exceeds 1,000 barrels, and \n \n “(iii)  such corporation makes an election under this subparagraph at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. \n \n \n “(C)   Average daily production .— For purposes of subparagraph (B), the average daily production of domestic crude oil or domestic natural gas shall be determined under section 613A(c)(2) of such Code without regard to the last sentence thereof. \n \n “(D)   Substantial shareholder .— For purposes of subparagraph (B), the term ‘substantial shareholder’ means any person who on  July 1, 1982 , owns more than 40 percent (in value) of the stock of the corporation. \n \n \n “(4)   Continuity required.— “(A)   In general .— This subsection shall cease to apply with respect to any corporation after— “(i)  any termination of the election of the corporation under subchapter S of chapter 1 of such Code, or \n \n “(ii)  the first day on which more than 50 percent of the stock of the corporation is newly owned stock within the meaning of section 1378(c)(2) of such Code (as amended by this Act [ Pub. L. 97–354 ]). \n \n \n “(B)   Special rules for paragraph (2).— “(i)  Paragraph (2) shall also cease to apply with respect to any corporation after the corporation ceases to be described in section 831(a) of such Code. \n \n “(ii)  For purposes of determining under subparagraph (A)(ii) whether paragraph (2) ceases to apply to any corporation, section 1378(c)(2) of such Code (as amended by this Act [ Pub. L. 97–354 ]) shall be applied by substituting ‘ December 31, 1984 ’ for ‘ December 31, 1982 ’ each place it appears therein. \n \n \n \n \n “(d)   Treatment of Existing Fringe Benefit Plans.— “(1)   In general .— In the case of existing fringe benefits of a corporation which as of  September 28, 1982 , was an electing small business corporation, section 1372 of the Internal Revenue Code of 1986 (as added by this Act [ Pub. L. 97–354 ]) shall apply only with respect to taxable years beginning after  December 31, 1987 . \n \n “(2)   Requirements .— This subsection shall cease to apply with respect to any corporation after whichever of the following first occurs: “(A)  the first day of the first taxable year beginning after  December 31, 1982 , with respect to which the corporation does not meet the requirements of section 1372(e)(5) of such Code (as in effect on the day before the date of the enactment of this Act [ Oct. 19, 1982 ]), \n \n “(B)  any termination after  December 31, 1982 , of the election of the corporation under subchapter S of chapter 1 of such Code, or \n \n “(C)  the first day on which more than 50 percent of the stock of the corporation is newly owned stock within the meaning of section 1378(c)(2) of such Code (as amended by this Act [ Pub. L. 97–354 ]). \n \n \n “(3)   Existing fringe benefit .— For purposes of this subsection, the term ‘existing fringe benefit’ means any employee fringe benefit of a type which the corporation provided to its employees as of  September 28, 1982 . \n \n \n “(e)   Treatment of Certain Elections Under Prior Law .— For purposes of section 1362(g) of the Internal Revenue Code of 1986, as amended by this Act [ Pub. L. 97–354 ] (relating to no election permitted within 5 years after termination of prior election), any termination or revocation under section 1372(e) of such Code (as in effect on the day before the date of the enactment of this Act [ Oct. 19, 1982 ]) shall not be taken into account. \n \n “(f)   Taxable Year of S Corporations .— Section 1378 of the Internal Revenue Code of 1986 (as added by this Act [ Pub. L. 97–354 ]) shall take effect on the day after the date of the enactment of this Act [ Oct. 19, 1982 ]. For purposes of applying such section, the reference in subsection (a)(2) of such section to an election under section 1362(a) shall include a reference to an election under section 1372(a) of such Code as in effect on the day before the date of the enactment of this Act [ Oct. 19, 1982 ].”\nFor provisions that nothing in amendment by  section 401(d)(1)(D)(xvi) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nPub. L. 110–28, title VIII, §\u202f8235 ,  May 25, 2007 ,  121 Stat. 199 , provided that:  \n “In the case of a corporation which is— “(1)  described in section 1311(a)(1) of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 , set out below], and \n \n “(2)  not described in section 1311(a)(2) of such Act, \n \n\n the amount of such corporation’s accumulated earnings and profits (for the first taxable year beginning after the date of the enactment of this Act [ May 25, 2007 ]) shall be reduced by an amount equal to the portion (if any) of such accumulated earnings and profits which were accumulated in any taxable year beginning before  January 1, 1983 , for which such corporation was an electing small business corporation under subchapter S of the Internal Revenue Code of 1986.”\nPub. L. 104–188, title I, §\u202f1311(a) ,  Aug. 20, 1996 ,  110 Stat. 1784 , provided that:  \n “If— “(1)  a corporation was an electing small business corporation under subchapter S of chapter 1 of the Internal Revenue Code of 1986 for any taxable year beginning before  January 1, 1983 , and \n \n “(2)  such corporation is an S corporation under subchapter S of chapter 1 of such Code for its first taxable year beginning after  December 31, 1996 , \n \n\n the amount of such corporation’s accumulated earnings and profits (as of the beginning of such first taxable year) shall be reduced by an amount equal to the portion (if any) of such accumulated earnings and profits which were accumulated in any taxable year beginning before  January 1, 1983 , for which such corporation was an electing small business corporation under such subchapter S.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 97–448, title III, §\u202f305(d)(1)(B) ,  Jan. 12, 1983 ,  96 Stat. 2399 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “If— “(i)  after  September 30, 1982 , and on or before the date of the enactment of this Act [ Jan. 12, 1983 ], stock or securities were transferred to a small business corporation (as defined in section 1361(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as amended by the Subchapter S Revision Act of 1982 [ Pub. L. 97–354 ]) in a transaction to which section 351 of such Code applies, and \n \n “(ii)  such corporation is liquidated under section 333 of such Code before  March 1, 1983 , \n \n\n then such stock or securities shall not be taken into account under section 333(e)(2) of such Code.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'IN GENERAL'},
  'content': 'Except as provided in subsection (g), a small business corporation may elect, in accordance with the provisions of this section, to be an S corporation.\nAn election under this subsection shall be valid only if all persons who are shareholders in such corporation on the day on which such election is made consent to such election.\nFor purposes of this subsection, an election for a taxable year made not later than 2 months and 15 days after the first day of the taxable year shall be treated as timely made during such year.\nAn election under subsection (a) shall be effective for the taxable year of the corporation for which it is made and for all succeeding taxable years of the corporation, until such election is terminated under subsection (d).\nAn election under subsection (a) may be terminated by revocation.\nAn election may be revoked only if shareholders holding more than one-half of the shares of stock of the corporation on the day on which the revocation is made consent to the revocation.\nIf the revocation specifies a date for revocation which is on or after the day on which the revocation is made, the revocation shall be effective on and after the date so specified.\nAn election under subsection (a) shall be terminated whenever (at any time on or after the 1st day of the 1st taxable year for which the corporation is an S corporation) such corporation ceases to be a small business corporation.\nAny termination under this paragraph shall be effective on and after the date of cessation.\nAny termination under this paragraph shall be effective on and after the first day of the first taxable year beginning after the third consecutive taxable year referred to in clause (i).\nA prior taxable year shall not be taken into account under clause (i) unless the corporation was an S corporation for such taxable year.\nExcept as otherwise provided in this subparagraph, the term “passive investment income” means gross receipts derived from royalties, rents, dividends, interest, and annuities.\nThe term “passive investment income” shall not include interest on any obligation acquired in the ordinary course of the corporation’s trade or business from its sale of property described in section 1221(a)(1).\nIf the S corporation meets the requirements of section 542(c)(6) for the taxable year, the term “passive investment income” shall not include gross receipts for the taxable year which are derived directly from the active and regular conduct of a lending or finance business (as defined in section 542(d)(1)).\nIf an S corporation holds stock in a C corporation meeting the requirements of section 1504(a)(2), the term “passive investment income” shall not include dividends from such C corporation to the extent such dividends are attributable to the earnings and profits of such C corporation derived from the active conduct of a trade or business.\nThe portion of such year ending before the 1st day for which the termination is effective shall be treated as a short taxable year for which the corporation is an S corporation.\nThe portion of such year beginning on such 1st day shall be treated as a short taxable year for which the corporation is a C corporation.\nA corporation may elect to have paragraph (2) not apply.\nAn election under this subsection shall be valid only if all persons who are shareholders in the corporation at any time during the S short year and all persons who are shareholders in the corporation on the first day of the C short year consent to such election.\nFor purposes of this subsection, the term “S termination year” means any taxable year of a corporation (determined without regard to this subsection) in which a termination of an election made under subsection (a) takes effect (other than on the 1st day thereof).\nThe taxable income for the short year described in subparagraph (B) of paragraph (1) shall be placed on an annual basis by multiplying the taxable income for such short year by the number of days in the S termination year and by dividing the result by the number of days in the short year. The tax shall be the same part of the tax computed on the annual basis as the number of days in such short year is of the number of days in the S termination year.\nSubsection (d) of section 443 shall apply to the short taxable year described in subparagraph (B) of paragraph (1).\nThe short taxable year described in subparagraph (A) of paragraph (1) shall not be taken into account for purposes of determining the number of taxable years to which any item may be carried back or carried forward by the corporation.\nThe due date for filing the return for the short taxable year described in subparagraph (A) of paragraph (1) shall be the same as the due date for filing the return for the short taxable year described in subparagraph (B) of paragraph (1) (including extensions thereof).\nParagraph (2) shall not apply with respect to any item resulting from the application of section 338.\nParagraph (2) shall not apply to an S termination year if there is a sale or exchange of 50 percent or more of the stock in such corporation during such year.\nIf a small business corporation has made an election under subsection (a) and if such election has been terminated under subsection (d), such corporation (and any successor corporation) shall not be eligible to make an election under subsection (a) for any taxable year before its 5th taxable year which begins after the 1st taxable year for which such termination is effective, unless the Secretary consents to such election.\n2018—Subsec. (d)(3)(C)(v).  Pub. L. 115–141, §\u202f401(a)(190) , substituted “1813(w)(1))),” for “1813(w)(1)),” in introductory provisions.\nSubsec. (f).  Pub. L. 115–141, §\u202f401(a)(191) , substituted “may be, during” for “may be during” in concluding provisions.\n2014—Subsec. (d)(3)(A)(iii).  Pub. L. 113–295  substituted “unless the corporation was an S corporation for such taxable year.” for “unless—\n“(I) such taxable year began after  December 31, 1981 , and\n“(II) the corporation was an S corporation for such taxable year.”\n2007—Subsec. (d)(3)(B) to (F).  Pub. L. 110–28  added subpars. (B) and (C) and struck out former subpar. (B), which related to gross receipts from dispositions of capital assets (other than stock and securities) being taken into account only to the extent of the capital gain net income therefrom, subpar. (C), which defined passive investment income, subpar. (D), which provided that, in the case of any options dealer or commodities dealer, passive investment income was to be determined by not taking into account any gain or loss from any section 1256 contract or property related to such a contract, subpar. (E), which related to certain dividends not being treated as passive investment income if an S corporation held stock in a C corporation meeting the requirements of section 1504(a)(2), and subpar. (F), which related to the exception from passive investment income for banks and depository institution holding companies.\nSubsec. (f)(1).  Pub. L. 110–172  substituted “or section 1361(b)(3)(B)(ii)” for “,\u2000section 1361(b)(3)(B)(ii), or section 1361(c)(1)(A)(ii)” in introductory provisions and “or section 1361(b)(3)(C)” for “,\u2000section 1361(b)(3)(C), or section 1361(c)(1)(D)(iii)” in subpar. (B).\n2005—Subsec. (d)(3)(F).  Pub. L. 109–135  substituted “a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act ( 12 U.S.C. 1813(w)(1) )” for “a bank holding company (within the meaning of section 2(a) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1841(a) )), or a financial holding company (within the meaning of section 2(p) of such Act)”.\n2004—Subsec. (d)(3)(F).  Pub. L. 108–357, §\u202f237(a) , added subpar. (F).\nSubsec. (f).  Pub. L. 108–357, §\u202f238(a)(5) , inserted “or a qualified subchapter S subsidiary, as the case may be” after “S corporation” in concluding provisions.\nSubsec. (f)(1).  Pub. L. 108–357, §\u202f238(a)(1) , inserted “,\u2000section 1361(b)(3)(B)(ii),” after “subsection (a)” in introductory provisions.\nPub. L. 108–357, §\u202f231(b)(1) , inserted “or section 1361(c)(1)(A)(ii)” after “section 1361(b)(3)(B)(ii),” in introductory provisions.\nSubsec. (f)(1)(B).  Pub. L. 108–357, §\u202f238(a)(2) , inserted “,\u2000section 1361(b)(3)(C),” after “subsection (d)”.\nPub. L. 108–357, §\u202f231(b)(2) , inserted “or section 1361(c)(1)(D)(iii)” after “section 1361(b)(3)(C),”.\nSubsec. (f)(3)(A).  Pub. L. 108–357, §\u202f238(a)(3) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “so that the corporation is a small business corporation, or”.\nSubsec. (f)(4).  Pub. L. 108–357, §\u202f238(a)(4) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “the corporation, and each person who was a shareholder in the corporation at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of the corporation as an S corporation) as may be required by the Secretary with respect to such period,”.\n1999—Subsec. (d)(3)(C)(ii).  Pub. L. 106–170  substituted “section 1221(a)(1)” for “section 1221(1)”.\n1996—Subsec. (b)(5).  Pub. L. 104–188, §\u202f1305(b) , added par. (5).\nSubsec. (d)(3).  Pub. L. 104–188, §\u202f1311(b)(1)(A) , in heading substituted “accumulated” for “subchapter C”.\nSubsec. (d)(3)(A)(i)(I).  Pub. L. 104–188, §\u202f1311(b)(1)(B) , substituted “accumulated” for “subchapter C”.\nSubsec. (d)(3)(B) to (E).  Pub. L. 104–188, §\u202f1311(b)(1)(C) , redesignated subpars. (C) to (F) as (B) to (E), respectively, and struck out former subpar. (B) which read as follows:\n“(B)  Subchapter c earnings and profits .—For purposes of subparagraph (A), the term ‘subchapter C earnings and profits’ means earnings and profits of any corporation for any taxable year with respect to which an election under section 1362(a) (or under section 1372 of prior law) was not in effect.”\nSubsec. (d)(3)(F).  Pub. L. 104–188, §\u202f1311(b)(1)(C) , redesignated subpar. (F) as (E).\nPub. L. 104–188, §\u202f1308(c) , added subpar. (F).\nSubsec. (f).  Pub. L. 104–188, §\u202f1305(a) , amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows:\n“(f)  Inadvertent Terminations .—If—\n“(1) an election under subsection (a) by any corporation was terminated under paragraph (2) or (3) of subsection (d),\n“(2) the Secretary determines that the termination was inadvertent,\n“(3) no later than a reasonable period of time after discovery of the event resulting in such termination, steps were taken so that the corporation is once more a small business corporation, and\n“(4) the corporation, and each person who was a shareholder of the corporation at any time during the period specified pursuant to this subsection, agrees to make such adjustments (consistent with the treatment of the corporation as an S corporation) as may be required by the Secretary with respect to such period,\nthen, notwithstanding the terminating event, such corporation shall be treated as continuing to be an S corporation during the period specified by the Secretary.”\n1988—Subsec. (d)(3)(D)(v).  Pub. L. 100–647, §\u202f1006(f)(6)(A) , struck out cl. (v) which related to special rule for options and commodities dealers.\nSubsec. (d)(3)(E).  Pub. L. 100–647, §\u202f1006(f)(6)(B) , added subpar. (E).\nSubsec. (e)(5)(B).  Pub. L. 100–647, §\u202f1007(g)(9) , substituted “Subsection (d)” for “Subsection (d)(2)”.\n1984—Subsec. (b)(3)(B).  Pub. L. 98–369, §\u202f721 ( l )(2), substituted “on or before the 15th day of the 3rd month of the following taxable year” for “on or before the last day of such taxable year”.\nSubsec. (b)(4).  Pub. L. 98–369, §\u202f721 ( l )(1), added par. (4).\nSubsec. (d)(3)(D)(v).  Pub. L. 98–369, §\u202f102(d)(2) , added cl. (v).\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f721(g)(2) , substituted “as provided in paragraph (3) and subparagraphs (C) and (D) of paragraph (6)” for “as provided in paragraph (3)”.\nSubsec. (e)(3)(B).  Pub. L. 98–369, §\u202f721(h) , struck out “All” in heading, and substituted “subsection” for “paragraph” and “S short year and all persons who are shareholders in the corporation on the first day of the C short year” for “S termination year” in text.\nSubsec. (e)(6)(C).  Pub. L. 98–369, §\u202f721(g)(1) , added subpar. (C).\nSubsec. (e)(6)(D).  Pub. L. 98–369, §\u202f721(t) , added subpar. (D).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 110–28, title VIII, §\u202f8231(b) ,  May 25, 2007 ,  121 Stat. 197 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ May 25, 2007 ].”\nAmendment by  Pub. L. 109–135  effective as if included in the provision of the American Jobs Creation Act of 2004,  Pub. L. 108–357 , to which such amendment relates, see  section 413(d) of Pub. L. 109–135 , set out as a note under  section 1361 of this title .\nPub. L. 108–357, title II, §\u202f231(c)(2) ,  Oct. 22, 2004 ,  118 Stat. 1434 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to elections and terminations made after  December 31, 2004 .”\nPub. L. 108–357, title II, §\u202f237(b) ,  Oct. 22, 2004 ,  118 Stat. 1436 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2004 .”\nPub. L. 108–357, title II, §\u202f238(b) ,  Oct. 22, 2004 ,  118 Stat. 1436 , provided that:  “The amendments made by this section [amending this section] shall apply to elections made and terminations made after  December 31, 2004 .”\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 104–188, title I, §\u202f1305(c) ,  Aug. 20, 1996 ,  110 Stat. 1780 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply with respect to elections for taxable years beginning after  December 31, 1982 .”\nAmendment by sections 1308(c) and 1311(b)(1) of  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 102(d)(2) of Pub. L. 98–369  applicable to positions established after  July 18, 1984 , in taxable years ending after that date except as otherwise provided, see section 102(f), (g) of  Pub. L. 98–369 , set out as a note under  section 1256 of this title .\nAmendment by section 721(g), (h), ( l ), (t) of  Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , except that amendment by section 721(g)(1) is not applicable to certain qualified stock purchases, amendment by section 721( l ) is applicable to any election under this section (or any corresponding provision of prior law) made after  Oct. 19, 1982 , and amendment by section 721(t) is not applicable to certain S termination years, see  section 721(y) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , except that in the case of a taxable year beginning during 1982, subsec. (d)(3) of this section and sections 1366(f)(3) and 1375 of this title shall apply, and  section 1372(e)(5) of this title  as in effect on the day before  Oct. 19, 1982 , shall not apply, see section 6(a), (b)(3) of  Pub. L. 97–354 , set out as a note under  section 1361 of this title . For additional provisions relating to the treatment of certain elections under prior law for purposes of subsec. (g) of this section, see  section 6(e) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nPub. L. 104–188, title I, §\u202f1317(b) ,  Aug. 20, 1996 ,  110 Stat. 1787 , provided that:  “For purposes of section 1362(g) of the Internal Revenue Code of 1986 (relating to election after termination), any termination under section 1362(d) of such Code in a taxable year beginning before  January 1, 1997 , shall not be taken into account.”\nPub. L. 98–369, div. A, title I, §\u202f102(d)(3) ,  July 18, 1984 ,  98 Stat. 623 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1808(a)(2),  Oct. 22, 1986 ,  100 Stat. 2095 , 2817, provided that:  \n “If a commodities dealer or an options dealer— “(A)  becomes a small business corporation (as defined in section 1361(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) at any time before the close of the 75th day after the date of the enactment of this Act [ July 18, 1984 ], and \n \n “(B)  makes the election under section 1362(a) of such Code before the close of such 75th day, \n \n\n then such dealer shall be treated as having received approval for and adopted a taxable year beginning on the first day during 1984 on which it was a small business corporation (as so defined) or such other day as may be permitted under regulations and ending on the date determined under section 1378 of such Code and such election shall be effective for such taxable year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'IN GENERAL'},
  'content': 'Except as otherwise provided in this subchapter, an S corporation shall not be subject to the taxes imposed by this chapter.\nExcept as provided in paragraph (2), any election affecting the computation of items derived from an S corporation shall be made by the corporation.\nAny increase in the tax imposed by this chapter by reason of this subsection shall be payable in 4 equal installments.\nThe first installment under subparagraph (A) shall be paid on or before the due date (determined without regard to extensions) for the return of the tax imposed by this chapter for the last taxable year for which the corporation was a C corporation and the 3 succeeding installments shall be paid on or before the due date (as so determined) for the corporation’s return for the 3 succeeding taxable years.\nNotwithstanding section 6601(b), for purposes of section 6601, the date prescribed for the payment of each installment under this paragraph shall be determined under this paragraph.\nThe term “LIFO method” means the method authorized by section 472.\nThe term “inventory assets” means stock in trade of the corporation, or other property of a kind which would properly be included in the inventory of the corporation if on hand at the close of the taxable year.\nExcept as provided in regulations, the corporation referred to in paragraph (1) shall not be treated as a member of an affiliated group with respect to the amount included in gross income under paragraph (1).\nSections 1367(a)(2)(D) and 1371(c)(1) shall not apply with respect to any increase in the tax imposed by reason of this subsection.\n2005—Subsec. (d)(5).  Pub. L. 109–135  added par. (5).\n1988—Subsec. (d).  Pub. L. 100–647, §\u202f1006(f)(7) , struck out subsec. (d) which related to distributions of appreciated property.\nSubsec. (d)(4)(D).  Pub. L. 100–647, §\u202f2004(n) , added subpar. (D).\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(f)(7) , struck out subsec. (e) which provided that subsec. (d) not apply to reorganizations, etc.\n1987—Subsec. (d).  Pub. L. 100–203  added subsec. (d) relating to recapture of LIFO benefits.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f701(e)(4)(J) , struck out “and in section 58(d)” after “this subchapter”.\nSubsec. (c)(2).  Pub. L. 99–514, §\u202f511(d)(2)(C) , redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which read as follows: “section 163(d) (relating to limitation on interest on investment indebtedness),”.\nSubsec. (e).  Pub. L. 99–514, §\u202f632(b) , amended subsec. (e) generally, substituting “reorganizations, etc.” for “complete liquidations and reorganizations”, in heading and in text struck out reference to property in complete liquidation of the corporation.\n1984—Subsec. (b)(4).  Pub. L. 98–369, §\u202f721(p) , added par. (4).\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f721(b)(1) , redesignated subpars. (B) to (D) as (A) to (C), respectively, and struck out subpar. (A) which provided “subsection (b)(5) or (d)(4) of section 108 (relating to income from discharge of indebtedness),”.\nSubsec. (d).  Pub. L. 98–369, §\u202f721(a)(2) , substituted “Except as provided in subsection (e), if” for “If”.\nSubsec. (e).  Pub. L. 98–369, §\u202f721(a)(1) , added subsec. (e).\nPub. L. 109–135, title IV, §\u202f411(b) ,  Dec. 21, 2005 ,  119 Stat. 2636 , provided that:  “The amendment made by this section [amending this section] shall take effect as if included in section 10227 of the Omnibus Budget Reconciliation Act of 1987 [ Pub. L. 100–203 ].”\nAmendment by  section 1006(f)(7) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 2004(n) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10227(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–417 , provided that: \n “(1)   In general .— Except as provided in paragraph (2) the amendment made by subsection (a) [amending this section] shall apply in the case of elections made after  December 17, 1987 . \n \n “(2)   Exception .— The amendment made by subsection (a) shall not apply in the case of any election made by a corporation after  December 17, 1987 , and before  January 1, 1989 , if, on or before  December 17, 1987 — “(A)  there was a resolution adopted by the board of directors of such corporation to make an election under subchapter S of chapter 1 of the Internal Revenue Code of 1986, or \n \n “(B)  there was a ruling request with respect to the business filed with the Internal Revenue Service expressing an intent to make such an election.”\nAmendment by  section 511(d)(2)(C) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 511(e) of Pub. L. 99–514 , set out as a note under  section 163 of this title .\nAmendment by  section 632(b) of Pub. L. 99–514  applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after  July 31, 1986 , unless such corporation is completely liquidated before  Jan. 1, 1987 , any transaction described in  section 338 of this title  for which the acquisition date occurs after  Dec. 31, 1986 , and any distribution, not in complete liquidation, made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 701(e)(4)(J) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nFor applicability of amendment by  section 701(e)(4)(J) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT OF SHAREHOLDERS'},
  'content': 'For purposes of this subchapter, the term “nonseparately computed income or loss” means gross income minus the deductions allowed to the corporation under this chapter, determined by excluding all items described in paragraph (1)(A).\nThe character of any item included in a shareholder’s pro rata share under paragraph (1) of subsection (a) shall be determined as if such item were realized directly from the source from which realized by the corporation, or incurred in the same manner as incurred by the corporation.\nIn any case where it is necessary to determine the gross income of a shareholder for purposes of this title, such gross income shall include the shareholder’s pro rata share of the gross income of the corporation.\nExcept as provided in subparagraph (B), any loss or deduction which is disallowed for any taxable year by reason of paragraph (1) shall be treated as incurred by the corporation in the succeeding taxable year with respect to that shareholder.\nIn the case of any transfer described in section 1041(a) of stock of an S corporation, any loss or deduction described in subparagraph (A) with respect such stock shall be treated as incurred by the corporation in the succeeding taxable year with respect to the transferee.\nIf for the last taxable year of a corporation for which it was an S corporation a loss or deduction was disallowed by reason of paragraph (1), such loss or deduction shall be treated as incurred by the shareholder on the last day of any post-termination transition period.\nThe aggregate amount of losses and deductions taken into account by a shareholder under subparagraph (A) shall not exceed the adjusted basis of the shareholder’s stock in the corporation (determined at the close of the last day of the post-termination transition period and without regard to this paragraph).\nThe shareholder’s basis in the stock of the corporation shall be reduced by the amount allowed as a deduction by reason of this paragraph.\nTo the extent that any increase in adjusted basis described in subparagraph (B) would have increased the shareholder’s amount at risk under section 465 if such increase had occurred on the day preceding the commencement of the post-termination transition period, rules similar to the rules described in subparagraphs (A) through (C) shall apply to any losses disallowed by reason of section 465(a).\nIf an individual who is a member of the family (within the meaning of section 704(e)(2) of one or more shareholders of an S corporation renders services for the corporation or furnishes capital to the corporation without receiving reasonable compensation therefor, the Secretary shall make such adjustments in the items taken into account by such individual and such shareholders as may be necessary in order to reflect the value of such services or capital.\nSubsection (a) shall not apply with respect to any credit allowable under section 34 (relating to certain uses of gasoline and special fuels).\nIf any tax is imposed under section 1374 for any taxable year on an S corporation, for purposes of subsection (a), the amount so imposed shall be treated as a loss sustained by the S corporation during such taxable year. The character of such loss shall be determined by allocating the loss proportionately among the recognized built-in gains giving rise to such tax.\n2018—Subsec. (e).  Pub. L. 115–141  substituted “section 704(e)(2)” for “section 704(e)(3)”.\n2007—Subsec. (d)(4).  Pub. L. 110–172  added par. (4).\n2004—Subsec. (d)(2).  Pub. L. 108–357  reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows: “Any loss or deduction which is disallowed for any taxable year by reason of paragraph (1) shall be treated as incurred by the corporation in the succeeding taxable year with respect to that shareholder.”\n1996—Subsec. (a)(1).  Pub. L. 104–188, §\u202f1302(e) , inserted “,\u2000or of a trust or estate which terminates,” after “who dies” in introductory provisions.\nSubsec. (d)(1)(A).  Pub. L. 104–188, §\u202f1309(a)(1) , substituted “paragraphs (1) and (2)(A)” for “paragraph (1)”.\nSubsec. (d)(3)(D).  Pub. L. 104–188, §\u202f1312 , added subpar. (D).\nSubsec. (g).  Pub. L. 104–188, §\u202f1307(c)(3)(A) , struck out subsec. (g) which provided a cross reference to subchapter D of chapter 63 of this title.\n1989—Subsec. (f)(2).  Pub. L. 101–239  substituted “Treatment of tax imposed on built-in gains” for “Reduction in pass-thru for tax imposed on built-in gains” in heading and amended text generally. Prior to amendment, text read as follows: “If any tax is imposed under section 1374 for any taxable year on an S corporation, for purposes of subsection (a), the amount of each recognized built-in gain (within the meaning of section 1374) for such taxable year shall be reduced by its proportionate share of such tax.”\n1988—Subsec. (f)(2).  Pub. L. 100–647  substituted “within the meaning of section 1374” for “as defined in section 1374(d)(2)”.\n1986—Subsec. (f)(2).  Pub. L. 99–514, §\u202f632(c)(2) , amended par. (2) generally. Prior to amendment, par. (2), reduction in pass-thru for tax imposed on capital gain, read as follows: “If any tax is imposed under section 1374 for any taxable year on an S corporation, for purposes of subsection (a)—\n“(A) the amount of the corporation’s long-term capital gains for the taxable year shall be reduced by the amount of such tax, and\n“(B) if the amount of such tax exceeds the amount of such long-term capital gains, the corporation’s gains from sales or exchanges of property described in section 1231 shall be reduced by the amount of such excess.\nFor purposes of the preceding sentence, the term ‘long-term capital gain’ shall not include any gain from the sale or exchange of property described in section 1231.”\nPub. L. 99–514, §\u202f701(e)(4)(K) , struck out “56 or” before “1374”.\n1984—Subsec. (f).  Pub. L. 98–369, §\u202f474(r)(26) , substituted “section 34” for “section 39” in heading and text.\nSubsec. (f)(1).  Pub. L. 98–369, §\u202f735(c)(16) , substituted “and special fuels” for “,\u2000special fuels, and lubricating oil”.\nAmendment by  Pub. L. 110–172  effective as if included in the provisions of the Pension Protection Act of 2006,  Pub. L. 109–280 , to which such amendment relates, see  section 3(j) of Pub. L. 110–172 , set out as a note under  section 170 of this title .\nPub. L. 108–357, title II, §\u202f235(b) ,  Oct. 22, 2004 ,  118 Stat. 1435 , as amended by  Pub. L. 109–135, title IV, §\u202f403(c) ,  Dec. 21, 2005 ,  119 Stat. 2620 , provided that:  “The amendment made by this section [amending this section] shall apply to transfers after  December 31, 2004 .”\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 632(c)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in cases where the return for the taxable year is filed pursuant to an S election made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 701(e)(4)(K) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  section 474(r)(26) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 735(c)(16) of Pub. L. 98–369  effective, except as otherwise provided, as if included in the provisions of the Highway Revenue Act of 1982, title V of  Pub. L. 97–424 , to which such amendment relates, see  section 736 of Pub. L. 98–369 , set out as a note under  section 4051 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , except that in the case of a taxable year beginning during 1982, subsec. (f)(3) of this section and sections 1362(d)(3) and 1375 of this title shall apply, and  section 1372(e)(5) of this title  as in effect on the day before  Oct. 19, 1982 , shall not apply, see section 6(a), (b)(3) of  Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nFor applicability of amendment by  section 701(e)(4)(K) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(2), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT OF SHAREHOLDERS'},
  'content': 'An amount which is required to be included in the gross income of a shareholder and shown on his return shall be taken into account under subparagraph (A) or (B) of subsection (a)(1) only to the extent such amount is included in the shareholder’s gross income on his return, increased or decreased by any adjustment of such amount in a redetermination of the shareholder’s tax liability.\nIf for any taxable year the amounts specified in subparagraphs (B), (C), (D), and (E) of subsection (a)(2) exceed the amount which reduces the shareholder’s basis to zero, such excess shall be applied to reduce (but not below zero) the shareholder’s basis in any indebtedness of the S corporation to the shareholder.\nIf for any taxable year beginning after  December 31, 1982 , there is a reduction under subparagraph (A) in the shareholder’s basis in the indebtedness of an S corporation to a shareholder, any net increase (after the application of paragraphs (1) and (2) of subsection (a)) for any subsequent taxable year shall be applied to restore such reduction in basis before any of it may be used to increase the shareholder’s basis in the stock of the S corporation.\nThis section and section 1366 shall be applied before the application of sections 165(g) and 166(d) to any taxable year of the shareholder or the corporation in which the security or debt becomes worthless.\nIf any person acquires stock in an S corporation by reason of the death of a decedent or by bequest, devise, or inheritance, section 691 shall be applied with respect to any item of income of the S corporation in the same manner as if the decedent had held directly his pro rata share of such item.\nThe basis determined under section 1014 of any stock in an S corporation shall be reduced by the portion of the value of the stock which is attributable to items constituting income in respect of the decedent.\n2015—Subsec. (a)(2).  Pub. L. 114–113  struck out “The preceding sentence shall not apply to contributions made in taxable years beginning after  December 31, 2014 .” at end of concluding provisions.\n2014—Subsec. (a)(2).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ” in concluding provisions.\n2013—Subsec. (a)(2).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ” in concluding provisions.\n2010—Subsec. (a)(2).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ” in concluding provisions.\n2008—Subsec. (a)(2).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ” in concluding provisions.\n2006—Subsec. (a)(2).  Pub. L. 109–280 , which directed the addition of concluding provisions to section 1367(a)(2), without specifying the act to be amended, was executed to subsec. (a)(2) of this section, which is section 1367 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.\n1996—Subsec. (a)(2)(E).  Pub. L. 104–188, §\u202f1702(h)(14) , substituted “section 613A(c)(11)(B)” for “section 613A(c)(13)(B)”.\nSubsec. (b)(4).  Pub. L. 104–188, §\u202f1313(a) , added par. (4).\n1984—Subsec. (a)(2)(E).  Pub. L. 98–369, §\u202f722(e)(2) , substituted “for any oil and gas property held by the S corporation to the extent such deduction does not exceed the proportionate share of the adjusted basis of such property allocated to such shareholder under section 613A(c)(13)(B)” for “under section 611 with respect to oil and gas wells”.\nSubsec. (b)(2)(B).  Pub. L. 98–369, §\u202f721(w) , substituted “for any taxable year beginning after  December 31, 1982 , there is” for “for any taxable year there is”.\nSubsec. (b)(3).  Pub. L. 98–369, §\u202f721(d) , inserted “and 166(d)” in heading and text.\nPub. L. 114–113, div. Q, title I, §\u202f115(b) ,  Dec. 18, 2015 ,  129 Stat. 3049 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f137(b) ,  Dec. 19, 2014 ,  128 Stat. 4020 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f325(b) ,  Jan. 2, 2013 ,  126 Stat. 2333 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2011 .”\nPub. L. 111–312, title VII, §\u202f752(b) ,  Dec. 17, 2010 ,  124 Stat. 3321 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2009 .”\nPub. L. 110–343, div. C, title III, §\u202f307(b) ,  Oct. 3, 2008 ,  122 Stat. 3869 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2007 .”\nPub. L. 109–280, title XII, §\u202f1203(b) ,  Aug. 17, 2006 ,  120 Stat. 1066 , provided that:  “The amendment made by this section [amending this section] shall apply to contributions made in taxable years beginning after  December 31, 2005 .”\nPub. L. 104–188, title I, §\u202f1313(b) ,  Aug. 20, 1996 ,  110 Stat. 1785 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply in the case of decedents dying after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nAmendment by  section 1702(h)(14) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by section 721(d), (w) of  Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nPub. L. 98–369, div. A, title VII, §\u202f722(e)(3)(B) ,  July 18, 1984 ,  98 Stat. 974 , provided that:  “The amendment made by paragraph (2) [amending this section] shall apply to taxable years beginning after  December 31, 1982 .”\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT OF SHAREHOLDERS'},
  'content': 'A distribution of property made by an S corporation with respect to its stock to which (but for this subsection) section 301(c) would apply shall be treated in the manner provided in subsection (b) or (c), whichever applies.\nThe distribution shall not be included in gross income to the extent that it does not exceed the adjusted basis of the stock.\nIf the amount of the distribution exceeds the adjusted basis of the stock, such excess shall be treated as gain from the sale or exchange of property.\nThat portion of the distribution which does not exceed the accumulated adjustments account shall be treated in the manner provided by subsection (b).\nThat portion of the distribution which remains after the application of paragraph (1) shall be treated as a dividend to the extent it does not exceed the accumulated earnings and profits of the S corporation.\nAny portion of the distribution remaining after the application of paragraph (2) of this subsection shall be treated in the manner provided by subsection (b).\nExcept as otherwise provided in this paragraph, the term “accumulated adjustments account” means an account of the S corporation which is adjusted for the S period in a manner similar to the adjustments under section 1367 (except that no adjustment shall be made for income (and related expenses) which is exempt from tax under this title and the phrase “(but not below zero)” shall be disregarded in section 1367(a)(2)) and no adjustment shall be made for Federal taxes attributable to any taxable year in which the corporation was a C corporation.\nIn the case of any redemption which is treated as an exchange under section 302(a) or 303(a), the adjustment in the accumulated adjustments account shall be an amount which bears the same ratio to the balance in such account as the number of shares redeemed in such redemption bears to the number of shares of stock in the corporation immediately before such redemption.\nIn applying this section to distributions made during any taxable year, the amount in the accumulated adjustments account as of the close of such taxable year shall be determined without regard to any net negative adjustment for such taxable year.\nThe term “S period” means the most recent continuous period during which the corporation has been an S corporation. Such period shall not include any taxable year beginning before  January 1, 1983 .\nAn S corporation may, with the consent of all of its affected shareholders, elect to have paragraph (1) of subsection (c) not apply to all distributions made during the taxable year for which the election is made.\nFor purposes of subparagraph (A), the term “affected shareholder” means any shareholder to whom a distribution is made by the S corporation during the taxable year.\n2018—Subsec. (f)(2).  Pub. L. 115–141  substituted “is included” for “in included”.\n2007—Subsec. (f).  Pub. L. 110–28  added subsec. (f).\n1996—Subsec. (d).  Pub. L. 104–188, §\u202f1309(a)(2) , inserted at end “In the case of any distribution made during any taxable year, the adjusted basis of the stock shall be determined with regard to the adjustments provided in paragraph (1) of section 1367(a) for the taxable year.”\nSubsec. (e)(1)(A).  Pub. L. 104–188, §\u202f1309(c) , substituted “as otherwise provided in this paragraph” for “as provided in subparagraph (B)” and “section 1367(a)(2)” for “section 1367(b)(2)(A)”.\nSubsec. (e)(1)(C).  Pub. L. 104–188, §\u202f1309(b) , added subpar. (C).\n1986—Subsec. (e)(1)(A).  Pub. L. 99–514  inserted “and no adjustment shall be made for Federal taxes attributable to any taxable year in which the corporation was a C corporation” before period at end.\n1984—Subsec. (c).  Pub. L. 98–369, §\u202f721(r)(2) , inserted “Except to the extent provided in regulations, if the distributions during the taxable year exceed the amount in the accumulated adjustments account at the close of the taxable year, for purposes of this subsection, the balance of such account shall be allocated among such distributions in proportion to their respective sizes.”\nSubsec. (e)(1)(A).  Pub. L. 98–369, §\u202f721(r)(1) , substituted “(except that no adjustment shall be made for income (and related expenses) which is exempt from tax under this title and the phrase ‘(but not below zero)’ shall be disregarded in section 1367(b)(2)(A))” for “(except that no adjustment shall be made for income which is exempt from tax under this title and no adjustment shall be made for any expense not deductible in computing the corporation’s taxable income and not properly chargeable to capital account)”.\n1983—Subsec. (e)(3).  Pub. L. 97–448  added par. (3).\nAmendment by  Pub. L. 110–28  applicable to taxable years beginning after  Dec. 31, 2006 , with special rule for treatment as second class of stock, see  section 8232(c) of Pub. L. 110–28 , set out as a note under  section 1361 of this title .\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1982 , see  section 1879(m)(2) of Pub. L. 99–514 , set out as a note under  section 1361 of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nPub. L. 97–448, title III, §\u202f311(c)(4) ,  Jan. 12, 1983 ,  96 Stat. 2411 , provided that:  “The amendments made by subsection (d) of section 305 [amending this section and sections 221, 1374, and 4975 of this title, enacting provisions set out as a note under  section 1361 of this title , and amending provisions set out as a note under  section 1361 of this title ] shall take effect on the date of the enactment of the Subchapter S Revision Act of 1982 [ Oct. 19, 1982 ].”\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'Except as otherwise provided in this title, and except to the extent inconsistent with this subchapter, subchapter C shall apply to an S corporation and its shareholders.\nNo carryforward, and no carryback, arising for a taxable year for which a corporation is a C corporation may be carried to a taxable year for which such corporation is an S corporation.\nNo carryforward, and no carryback, shall arise at the corporate level for a taxable year for which a corporation is an S corporation.\nNothing in paragraphs (1) and (2) shall prevent treating a taxable year for which a corporation is an S corporation as a taxable year for purposes of determining the number of taxable years to which an item may be carried back or carried forward.\nExcept as provided in paragraphs (2) and (3) and subsection (d)(3), no adjustment shall be made to the earnings and profits of an S corporation.\nIn the case of any transaction involving the application of subchapter C to any S corporation, proper adjustment to any accumulated earnings and profits of the corporation shall be made.\nParagraph (1) shall not apply with respect to that portion of a distribution which is treated as a dividend under section 1368(c)(2).\nAny election under section 1362 shall be treated as a mere change in the form of conducting a trade or business for purposes of the second sentence of section 50(a)(5).\nNotwithstanding an election under section 1362, an S corporation shall continue to be liable for any increase in tax under section 49(b) or 50(a) attributable to credits allowed for taxable years for which such corporation was not an S corporation.\nParagraph (1) of subsection (c) shall not apply to any increase in tax under section 49(b) or 50(a) for which the S corporation is liable.\nAny distribution of money by a corporation with respect to its stock during a post-termination transition period shall be applied against and reduce the adjusted basis of the stock, to the extent that the amount of the distribution does not exceed the accumulated adjustments account (within the meaning of section 1368(e)).\nAn S corporation may elect to have paragraph (1) not apply to all distributions made during a post-termination transition period described in section 1377(b)(1)(A). Such election shall not be effective unless all shareholders of the S corporation to whom distributions are made by the S corporation during such post-termination transition period consent to such election.\nIn the case of a distribution of money by an eligible terminated S corporation (as defined in section 481(d)) after the post-termination transition period, the accumulated adjustments account shall be allocated to such distribution, and the distribution shall be chargeable to accumulated earnings and profits, in the same ratio as the amount of such accumulated adjustments account bears to the amount of such accumulated earnings and profits.\nA prior section 1371, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1650 ; amended  Pub. L. 86–376, §\u202f2(a) ,  Sept. 23, 1959 ,  73 Stat. 699 ;  Pub. L. 88–272, title II, §\u202f233(a) ,  Feb. 26, 1964 ,  78 Stat. 112 ;  Pub. L. 94–455, title IX, §\u202f902(a)(1) , (2), (c)(1), (2),  Oct. 4, 1976 ,  90 Stat. 1608 , 1609;  Pub. L. 95–600, title III , §§\u202f341, 342, title VII, §\u202f701(y)(1),  Nov. 6, 1978 ,  92 Stat. 2843 , 2921;  Pub. L. 96–589, §\u202f5(d) ,  Dec. 24, 1980 ,  94 Stat. 3406 ;  Pub. L. 97–34, title II , §§\u202f233(a), 234(a), (b),  Aug. 13, 1981 ,  95 Stat. 250 , 251;  Pub. L. 97–448, title I, §\u202f102(i)(1) ,  Jan. 12, 1983 ,  96 Stat. 2372 , related to definitions applicable to election of small business corporations as to taxable status, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\n2022—Subsec. (d)(1).  Pub. L. 117–167  substituted “section 50(a)(5)” for “section 50(a)(4)”.\n2017—Subsec. (f).  Pub. L. 115–97  added subsec. (f).\n1996—Subsec. (a).  Pub. L. 104–188  reenacted heading without change and amended text generally. Prior to amendment, text read as follows:\n“(1)  In general .—Except as otherwise provided in this title, and except to the extent inconsistent with this subchapter, subchapter C shall apply to an S corporation and its shareholders.\n“(2) S  corporation as shareholder treated like individual .—For purposes of subchapter C, an S corporation in its capacity as a shareholder of another corporation shall be treated as an individual.”\n1990—Subsec. (d)(1).  Pub. L. 101–508, §\u202f11813(b)(23)(A) , substituted “section 50(a)(4)” for “section 47(b)”.\nSubsec. (d)(2), (3).  Pub. L. 101–508, §\u202f11813(b)(23)(B) , substituted “section 49(b) or 50(a)” for “section 47”.\n1986—Subsec. (e)(1).  Pub. L. 99–514, §\u202f1899A(33) , inserted “(within the meaning of section 1368(e))”.\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f1899A(34) , struck out “(within the meaning of section 1368(e))” after “to such election”.\n1984—Subsec. (c)(1).  Pub. L. 98–369, §\u202f621(e)(2) , substituted “paragraphs (2) and (3) and subsection (d)(3)” for “paragraphs (2) and (3)”.\nSubsec. (d)(3).  Pub. L. 98–369, §\u202f721(e)(1) , added par. (3).\nSubsec. (e).  Pub. L. 98–369, §\u202f721 ( o ), amended subsec. (e) generally, designating existing provisions as par. (1) and adding par. (2).\nSubsec. (e)(2).  Pub. L. 98–369, §\u202f721(x)(3) , inserted “(within the meaning of section 1368(e))”.\nAmendment by  Pub. L. 117–167  applicable to property placed in service after  Dec. 31, 2022 , and, for any property the construction of which begins prior to  Jan. 1, 2023 , only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after  Aug. 9, 2022 , see  section 107(f) of Pub. L. 117–167 , set out as a note under  section 905 of Title 2 , The Congress.\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nAmendment by  Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'For purposes of this section, the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.\nA prior section 1372, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1650 ; amended  Pub. L. 87–29, §\u202f2 ,  May 4, 1961 ,  75 Stat. 64 ;  Pub. L. 89–389 , §§\u202f2(b)(2), 3(a),  Apr. 14, 1966 ,  80 Stat. 114 ;  Pub. L. 91–683, §\u202f1(a) ,  Jan. 12, 1971 ,  84 Stat. 2067 ;  Pub. L. 94–455, title IX, §\u202f902(c)(3) , title XIX, §§\u202f1901(a)(149), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1609 , 1788, 1834;  Pub. L. 95–600, title III, §\u202f343 ,  Nov. 6, 1978 ,  92 Stat. 2843 ;  Pub. L. 95–628, §\u202f5(a) , (b),  Nov. 10, 1978 ,  92 Stat. 3628 , related to manner, effect, termination, etc., of an election not to be subject to taxes imposed under this chapter, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , except that in the case of a taxable year beginning during 1982, sections 1362(d)(3), 1366(f)(3), and 1375 of this title shall apply and subsec. (e)(5) of this section as in effect on the day before  Oct. 19, 1982 , shall not apply, see section 6(a), (b)(3), of  Pub. L. 97–354 , set out as a note under  section 1361 of this title . For additional provisions relating to the treatment of existing fringe benefit plans and the application of this section, see  section 6(d) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'For purposes of section 904(f) (relating to recapture of overall foreign loss), the making or termination of an election to be treated as an S corporation shall be treated as a disposition of the business.\nA prior section 1373, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1652 ; amended  Pub. L. 89–389, §\u202f2(b)(3) ,  Apr. 14, 1966 ,  80 Stat. 114 ;  Pub. L. 91–172, title III, §\u202f301(b)(10) ,  Dec. 30, 1969 ,  83 Stat. 586 , related to taxation of corporation undistributed taxable income to shareholders, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'If for any taxable year beginning in the recognition period an S corporation has a net recognized built-in gain, there is hereby imposed a tax (computed under subsection (b)) on the income of such corporation for such taxable year.\nThe amount of the tax imposed by subsection (a) shall be computed by applying the highest rate of tax specified in section 11(b) to the net recognized built-in gain of the S corporation for the taxable year.\nNotwithstanding section 1371(b)(1), any net operating loss carryforward arising in a taxable year for which the corporation was a C corporation shall be allowed for purposes of this section as a deduction against the net recognized built-in gain of the S corporation for the taxable year. For purposes of determining the amount of any such loss which may be carried to subsequent taxable years, the amount of the net recognized built-in gain shall be treated as taxable income. Rules similar to the rules of the preceding sentences of this paragraph shall apply in the case of a capital loss carryforward arising in a taxable year for which the corporation was a C corporation.\nExcept as provided in subparagraph (B), no credit shall be allowable under part IV of subchapter A of this chapter (other than under section 34) against the tax imposed by subsection (a).\nNotwithstanding section 1371(b)(1), any business credit carryforward under section 39 arising in a taxable year for which the corporation was a C corporation shall be allowed as a credit against the tax imposed by subsection (a) in the same manner as if it were imposed by section 11.\nSubsection (a) shall not apply to any corporation if an election under section 1362(a) has been in effect with respect to such corporation for each of its taxable years. Except as provided in regulations, an S corporation and any predecessor corporation shall be treated as 1 corporation for purposes of the preceding sentence.\nIf, for any taxable year described in subparagraph (A), the amount referred to in clause (i) of subparagraph (A) exceeds the amount referred to in clause (ii) of subparagraph (A), such excess shall be treated as a recognized built-in gain in the succeeding taxable year.\nAny item of income which is properly taken into account during the recognition period but which is attributable to periods before the 1st taxable year for which the corporation was an S corporation shall be treated as a recognized built-in gain for the taxable year in which it is properly taken into account.\nAny amount which is allowable as a deduction during the recognition period (determined without regard to any carryover) but which is attributable to periods before the 1st taxable year referred to in subparagraph (A) shall be treated as a recognized built-in loss for the taxable year for which it is allowable as a deduction.\nThe amount of the net unrealized built-in gain shall be properly adjusted for amounts which would be treated as recognized built-in gains or losses under this paragraph if such amounts were properly taken into account (or allowable as a deduction) during the recognition period.\nThe term “recognition period” means the 5-year period beginning with the 1st day of the 1st taxable year for which the corporation was an S corporation. For purposes of applying this section to any amount includible in income by reason of distributions to shareholders pursuant to section 593(e), the preceding sentence shall be applied without regard to the phrase “5-year”.\nIf an S corporation sells an asset and reports the income from the sale using the installment method under section 453, the treatment of all payments received shall be governed by the provisions of this paragraph applicable to the taxable year in which such sale was made.\nThe preceding paragraphs of this subsection shall be applied by taking into account the day on which the assets were acquired by the S corporation in lieu of the beginning of the 1st taxable year for which the corporation was an S corporation.\nSubsection (c)(1) shall not apply.\nAny reference in this section to the 1st taxable year for which the corporation was an S corporation shall be treated as a reference to the 1st taxable year for which the corporation was an S corporation pursuant to its most recent election under section 1362.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section including regulations providing for the appropriate treatment of successor corporations.\nA prior section 1374, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1653 ; amended  Pub. L. 86–376, §\u202f2(b) ,  Sept. 23, 1959 ,  73 Stat. 699 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(150) ,  Oct. 4, 1976 ,  90 Stat. 1788 , related to allowance to shareholders of corporation net operating loss, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\n2018—Subsec. (d)(2)(B).  Pub. L. 115–141  struck out at end “The preceding sentence shall apply only in the case of a corporation treated as an S corporation by reason of an election made on or after  March 31, 1988 .”\n2017—Subsec. (b)(3)(B).  Pub. L. 115–97, §\u202f12002(c) , struck out at end “A similar rule shall apply in the case of the minimum tax credit under section 53 to the extent attributable to taxable years for which the corporation was a C corporation.”\nSubsec. (b)(4).  Pub. L. 115–97, §\u202f13001(b)(2)(N) , struck out par. (4). Text read as follows: “For purposes of section 1201(a)—\n“(A) the tax imposed by subsection (a) shall be treated as if it were imposed by section 11, and\n“(B) the amount of the net recognized built-in gain shall be treated as the taxable income.”\n2015—Subsec. (d)(7).  Pub. L. 114–113  amended par. (7) generally. Prior to amendment, par. (7) defined recognition period, with special rules for certain years and for distributions to shareholders.\n2014—Subsec. (d)(7)(C).  Pub. L. 113–295  substituted “2012, 2013, and 2014” for “2012 and 2013” in heading and “2012, 2013, or 2014” for “2012 or 2013” in text.\n2013—Subsec. (d)(2)(B).  Pub. L. 112–240, §\u202f326(b) , inserted “described in subparagraph (A)” after “for any taxable year”.\nSubsec. (d)(7)(C), (D).  Pub. L. 112–240, §\u202f326(a)(1) , (2), added subpar. (C) and redesignated former subpar. (C) as (D).\nSubsec. (d)(7)(E).  Pub. L. 112–240, §\u202f326(a)(3) , added subpar. (E).\n2010—Subsec. (d)(7)(B).  Pub. L. 111–240  amended subpar. (B) generally. Prior to amendment, text read as follows: “In the case of any taxable year beginning in 2009 or 2010, no tax shall be imposed on the net recognized built-in gain of an S corporation if the 7th taxable year in the recognition period preceded such taxable year. The preceding sentence shall be applied separately with respect to any asset to which paragraph (8) applies.”\n2009—Subsec. (d)(7).  Pub. L. 111–5  amended par. (7) generally. Prior to amendment, text read as follows: “The term ‘recognition period’ means the 10-year period beginning with the 1st day of the 1st taxable year for which the corporation was an S corporation. For purposes of applying this section to any amount includible in income by reason of section 593(e), the preceding sentence shall be applied without regard to the phrase ‘10-year’.”\n1997—Subsec. (d)(7).  Pub. L. 105–34  inserted at end “For purposes of applying this section to any amount includible in income by reason of section 593(e), the preceding sentence shall be applied without regard to the phrase ‘10-year’.”\n1989—Subsec. (b)(3)(B).  Pub. L. 101–239, §\u202f7811(c)(8) , inserted at end “A similar rule shall apply in the case of the minimum tax credit under section 53 to the extent attributable to taxable years for which the corporation was a C corporation.”\nSubsec. (d)(2)(A)(i).  Pub. L. 101–239, §\u202f7811(c)(4) , struck out “(except as provided in subsection (b)(2))” after “taxable year if”.\nSubsec. (d)(5)(B).  Pub. L. 101–239, §\u202f7811(c)(5)(B)(i) , inserted “(determined without regard to any carryover)” after “during the recognition period”.\nSubsec. (d)(5)(C).  Pub. L. 101–239, §\u202f7811(c)(5)(B)(ii) , substituted “which would be treated as recognized built-in gains or losses under this paragraph if such amounts were properly taken into account (or allowable as a deduction) during the recognition period” for “treated as recognized built-in gains or losses under this paragraph”.\n1988—Subsec. (a).  Pub. L. 100–647, §\u202f1006(f)(1) , inserted “net” before “recognized”.\nSubsec. (b)(1).  Pub. L. 100–647, §\u202f1006(f)(2) , added par. (1) and struck out former par. (1) which read as follows: “The tax imposed by subsection (a) shall be a tax computed by applying the highest rate of tax specified in section 11(b) to the lesser of—\n“(A) the recognized built-in gains of the S corporation for the taxable year, or\n“(B) the amount which would be the taxable income of the corporation for such taxable year if such corporation were not an S corporation.”\nSubsec. (b)(2).  Pub. L. 100–647, §\u202f1006(f)(2) , added par. (2) and struck out former par. (2) which read as follows: “Notwithstanding section 1371(b)(1), any net operating loss carryforward arising in a taxable year for which the corporation was a C corporation shall be allowed as a deduction against the lesser of the amounts referred to in subparagraph (A) or (B) of paragraph (1). For purposes of determining the amount of any such loss which may be carried to subsequent taxable years, the lesser of the amounts referred to in subparagraph (A) or (B) of paragraph (1) shall be treated as taxable income.”\nSubsec. (b)(4)(B).  Pub. L. 100–647, §\u202f1006(f)(3) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the lower of the amounts specified in subparagraphs (A) and (B) of paragraph (1) shall be treated as the taxable income.”\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f1006(f)(4) , which directed amendment of par. (2) by substituting “net recognized built-in gain” for “recognized built-in gains” wherever appearing, was executed by making the substitution in heading as well as in introductory provisions and in subpar. (B), to reflect the probable intent of Congress.\nSubsec. (d)(2) to (9).  Pub. L. 100–647, §\u202f1006(f)(5)(A) , added pars. (2) to (9) and struck out former pars. (2), (3), and (4), which related to recognized built-in gain, recognition period, and taxable income, respectively.\nSubsec. (e).  Pub. L. 100–647, §\u202f1006(f)(5)(A) , added subsec. (e).\n1986— Pub. L. 99–514  amended section generally, substituting provisions imposing tax on certain built-in gains for provisions imposing tax on certain capital gains which had declared in: subsec. (a), general rule for capital gains tax on S corporations; subsec. (b), amount of tax; subsec. (c), general rule as to exceptions from subsec. (a) in par. (1), exception as to new corporations in par. (2), provisions relating to property with substituted basis in par. (3), and treatment of certain gains of options and commodities dealers in par. (4); and subsec. (d), determination of taxable income of corporation.\n1984—Subsec. (b).  Pub. L. 98–369, §\u202f474(r)(27) , substituted “section 34” for “section 39” in provisions following par. (2).\nSubsec. (c)(2).  Pub. L. 98–369, §\u202f721(u) , struck out “(and any predecessor corporation)” before “has been in existence” in subpar. (A), and inserted provision that to the extent provided in regulations, an S corporation and any predecessor corporation shall be treated as 1 corporation for purposes of this paragraph and paragraph (1).\nSubsec. (c)(4).  Pub. L. 98–369, §\u202f102(d)(1) , added par. (4).\n1983—Subsec. (d).  Pub. L. 97–448  substituted “this section” for “subsections (a)(2) and (b)(2)”.\nAmendment by  section 12002 of Pub. L. 115–97  applicable in general to taxable years beginning after  Dec. 31, 2017 , and amendment by section 12002(c) applicable to taxable years beginning after  Dec. 31, 2021 , see  section 12002(d) of Pub. L. 115–97 , set out as a note under  section 53 of this title .\nAmendment by  section 13001(b)(2)(N) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 114–113, div. Q, title I, §\u202f127(b) ,  Dec. 18, 2015 ,  129 Stat. 3054 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f138(b) ,  Dec. 19, 2014 ,  128 Stat. 4020 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2013 .”\nPub. L. 112–240, title III, §\u202f326(c) ,  Jan. 2, 2013 ,  126 Stat. 2334 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2011 .”\nPub. L. 111–240, title II, §\u202f2014(b) ,  Sept. 27, 2010 ,  124 Stat. 2556 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2010 .”\nPub. L. 111–5, div. B, title I, §\u202f1251(b) ,  Feb. 17, 2009 ,  123 Stat. 342 , provided that:  “The amendment made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2008 .”\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which it relates, see  section 1601(j) of Pub. L. 105–34 , set out as a note under  section 23 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in cases where the return for the taxable year is filed pursuant to an S election made after  Dec. 31, 1986 , and with provision that, in the case of any taxable year of an S corporation which begins after  Dec. 31, 1986 , and to which the amendments by section 632 (other than subsec. (b) thereof) of  Pub. L. 99–514  do not apply, subsec. (b)(1) of this section (as in effect on the date before  Oct. 22, 1986 ) shall apply as if it read as follows:  “an amount equal to 34 percent of the amount by which the net capital gain of the corporation for the taxable year exceeds $25,000, or” \n, and with other exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 102(d)(1) of Pub. L. 98–369  applicable to positions established after  July 18, 1984 , in taxable years ending after that date, except as otherwise provided, see section 102(f), (g) of  Pub. L. 98–369  set out as a note under  section 1256 of this title .\nAmendment by  section 474(r)(27) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 721(u) of Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nAmendment by  Pub. L. 97–448  effective on date of enactment of Subchapter S Revision Act of 1982 [ Oct. 19, 1982 ], see  section 311(c)(4) of Pub. L. 97–448 , set out as a note under  section 1368 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'SPECIAL RULES'},
  'content': 'The terms “passive investment income” and “gross receipts” have the same respective meanings as when used in paragraph (3) of section 1362(d).\nNotwithstanding paragraph (3), the amount of passive investment income shall be determined by not taking into account any recognized built-in gain or loss of the S corporation for any taxable year in the recognition period. Terms used in the preceding sentence shall have the same respective meanings as when used in section 1374.\nNo credit shall be allowed under part IV of subchapter A of this chapter (other than section 34) against the tax imposed by subsection (a).\nA prior section 1375, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1654 ; amended  Pub. L. 88–272, title II , §§\u202f201(d)(13), 233(b),  Feb. 26, 1964 ,  78 Stat. 32 , 112;  Pub. L. 89–389 , §§\u202f1(a), (b), 2(b)(4),  Apr. 14, 1966 ,  80 Stat. 111 , 114;  Pub. L. 91–172, title III, §\u202f301(b)(11) ,  Dec. 30, 1969 ,  83 Stat. 586 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(151), (b)(33)(Q), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1788 , 1802, 1834;  Pub. L. 95–600, title VII, §\u202f703(j)(6) ,  Nov. 6, 1978 ,  92 Stat. 2941 , related to special rules applicable to distributions of electing small business corporations, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\nA prior section 1376, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1655 , related to adjustment to basis of stock of, and indebtedness owing, shareholders, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\n2005—Subsec. (d)(1), (2).  Pub. L. 109–135  substituted “accumulated” for “subchapter C”.\n1996— Pub. L. 104–188, §\u202f1311(b)(2)(C) , substituted “accumulated” for “subchapter C” in section catchline.\nSubsec. (a)(1).  Pub. L. 104–188, §\u202f1311(b)(2)(A) , substituted “accumulated” for “subchapter C”.\nSubsec. (b)(3).  Pub. L. 104–188, §\u202f1311(b)(2)(B) , amended par. (3) generally. Prior to amendment, par. (3) read as follows:\n“(3)  Passive investment income; etc .—The terms ‘subchapter C earnings and profits’, ‘passive investment income’, and ‘gross receipts’ shall have the same respective meanings as when used in paragraph (3) of section 1362(d).”\n1988—Subsec. (b)(1)(B).  Pub. L. 100–647, §\u202f1006(f)(5)(B) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The amount of the excess net passive income for any taxable year shall not exceed the corporation’s taxable income for the taxable year (determined in accordance with section 1374(d)(4)).”\nSubsec. (b)(4).  Pub. L. 100–647, §\u202f1006(f)(5)(C) , added par. (4).\nSubsec. (c).  Pub. L. 100–647, §\u202f1006(f)(5)(D) , amended subsec. (c) generally, in heading substituting “Credits not allowable” for “Special rules”, and in text substituting “No credit” for “(1)  Disallowance of credit .—No credit”, and striking out par. (2) which related to coordination with section 1374.\n1986—Subsec. (b)(1)(B).  Pub. L. 99–514  substituted “section 1374(d)(4)” for “section 1374(d)”.\n1984—Subsec. (c)(1).  Pub. L. 98–369, §\u202f474(r)(28) , substituted “section 34” for “section 39”.\nSubsec. (d).  Pub. L. 98–369, §\u202f721(v) , added subsec. (d).\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in cases where the return for the taxable year is filed pursuant to an S election made after  Dec. 31, 1986 , with exceptions and special and transitional rules, see  section 633 of Pub. L. 99–514 , as amended, set out as an Effective Date note under  section 336 of this title .\nAmendment by  section 474(r)(28) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , and to carrybacks from such years, see  section 475(a) of Pub. L. 98–369 , set out as a note under  section 21 of this title .\nAmendment by  section 721(v) of Pub. L. 98–369  effective as if included in the Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nThis section applicable to taxable years beginning after  Dec. 31, 1982 , except that in the case of a taxable year beginning during 1982, this section and sections 1362(d)(3) and 1366(f)(3) of this title shall apply, and  section 1372(e)(5) of this title  as in effect on the day before  Oct. 19, 1982 , shall not apply, see section 6(a), (b)(3) of  Pub. L. 97–354 , set out as a note under  section 1361 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITIONS; MISCELLANEOUS'},
  'content': 'Under regulations prescribed by the Secretary, if any shareholder terminates the shareholder’s interest in the corporation during the taxable year and all affected shareholders and the corporation agree to the application of this paragraph, paragraph (1) shall be applied to the affected shareholders as if the taxable year consisted of 2 taxable years the first of which ends on the date of the termination.\nFor purposes of subparagraph (A), the term “affected shareholders” means the shareholder whose interest is terminated and all shareholders to whom such shareholder has transferred shares during the taxable year. If such shareholder has transferred shares to the corporation, the term “affected shareholders” shall include all persons who are shareholders during the taxable year.\nParagraph (1)(B) shall not apply for purposes of section 1366(d)(3).\nParagraph (1)(B) shall apply to a distribution described in section 1371(e) only to the extent that the amount of such distribution does not exceed the aggregate increase (if any) in the accumulated adjustments account (within the meaning of section 1368(e)) by reason of the adjustments referred to in such paragraph.\nAny election under this subchapter, and any revocation under section 1362(d)(1), shall be made in such manner as the Secretary shall by regulations prescribe.\nA prior section 1377, added  Pub. L. 85–866, title I, §\u202f64(a) ,  Sept. 2, 1958 ,  72 Stat. 1656 ; amended  Pub. L. 94–455, title IX, §\u202f902(b)(1) , title XIX, §\u202f1901(b)(32)(B)(iv),  Oct. 4, 1976 ,  90 Stat. 1608 , 1800, related to special rules applicable to earnings and profits of electing small business corporations, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\n2004—Subsec. (b)(3).  Pub. L. 108–311  added par. (3).\n1996—Subsec. (a)(2).  Pub. L. 104–188, §\u202f1306 , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Under regulations prescribed by the Secretary, if any shareholder terminates his interest in the corporation during the taxable year and all persons who are shareholders during the taxable year agree to the application of this paragraph, paragraph (1) shall be applied as if the taxable year consisted of 2 taxable years the first of which ends on the date of the termination.”\nSubsec. (b)(1)(A) to (C).  Pub. L. 104–188, §\u202f1307(a) , struck out “and” at end of subpar. (A)(ii), added subpar. (B), and redesignated former subpar. (B) as (C).\nSubsec. (b)(2)(A) to (C).  Pub. L. 104–188, §\u202f1307(b) , added subpar. (A), redesignated subpar. (C) as (B), and struck out former subpars. (A) and (B) which read as follows:\n“(A) a court decision which becomes final,\n“(B) a closing agreement, or”.\nAmendment by  Pub. L. 108–311  effective as if included in the provisions of the Small Business Job Protection Act of 1996,  Pub. L. 104–188 , to which such amendment relates, see  section 407(c) of Pub. L. 108–311 , set out as a note under  section 401 of this title .\nPub. L. 105–34, title XVI, §\u202f1601(c)(2) ,  Aug. 5, 1997 ,  111 Stat. 1087 , provided that: \n “(A)  Notwithstanding section 1317 of the Small Business Job Protection Act of 1996 [ Pub. L. 104–188 , enacting provisions set out as notes under sections 641 and 1362 of this title], the amendments made by subsections (a) and (b) of section 1307 of such Act [amending this section] shall apply to determinations made after  December 31, 1996 . \n \n “(B)  In no event shall the 120-day period referred to in section 1377(b)(1)(B) of the Internal Revenue Code of 1986 (as added by such section 1307) expire before the end of the 120-day period beginning on the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITIONS; MISCELLANEOUS'},
  'content': 'For purposes of this subtitle, the taxable year of an S corporation shall be a permitted year.\nA prior section 1378, added  Pub. L. 89–389, §\u202f2(a) ,  Apr. 14, 1966 ,  80 Stat. 113 ; amended  Pub. L. 91–172, title V, §\u202f511(c)(4) ,  Dec. 30, 1969 ,  83 Stat. 638 ;  Pub. L. 94–455, title XIX, §\u202f1901(a)(152) , (b)(33)(R),  Oct. 4, 1976 ,  90 Stat. 1789 , 1802, related to tax imposed on certain capital gains, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f806(b)(1) , amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of this subtitle—\n“(1) an S corporation shall not change its taxable year to any accounting period other than a permitted year, and\n“(2) no corporation may make an election under section 1362(a) for any taxable year unless such taxable year is a permitted year.”\nSubsec. (b).  Pub. L. 99–514, §\u202f806(b)(2) , inserted at end “For purposes of paragraph (2), any deferral of income to shareholders shall not be treated as a business purpose.”\nSubsec. (c).  Pub. L. 99–514, §\u202f806(b)(3) , struck out subsec. (c) which required existing S corporations to use permitted year after 50-percent shift in ownership.\n1984—Subsec. (c)(1).  Pub. L. 98–369, §\u202f721(m) , substituted “which includes  December 31, 1982  (or which is an S corporation for a taxable year beginning during 1983 by reason of an election made on or before  October 19, 1982 )” for “which includes  December 31, 1982 ”.\nSubsec. (c)(3)(B)(i).  Pub. L. 98–369, §\u202f721(q) , substituted “who (or whose estate) held” for “who held”.\nPub. L. 99–514, title VIII, §\u202f806(e) ,  Oct. 22, 1986 ,  100 Stat. 2364 , as amended by  Pub. L. 100–647, title I, §\u202f1008(e)(7) , (8), (10),  Nov. 10, 1988 ,  102 Stat. 3441 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section and sections 267, 441, and 706 of this title] shall apply to taxable years beginning after  December 31, 1986 . \n \n “(2)   Change in accounting period .— In the case of any partnership, S corporation, or personal service corporation required by the amendments made by this section to change its accounting period for the taxpayer’s first taxable year beginning after  December 31, 1986 — “(A)  such change shall be treated as initiated by the partnership, S corporation, or personal service corporation, \n \n “(B)  such change shall be treated as having been made with the consent of the Secretary, and \n \n “(C)  with respect to any partner or shareholder of an S corporation which is required to include the items from more than 1 taxable year of the partnership or S corporation in any 1 taxable year, income in excess of expenses of such partnership or corporation for the short taxable year required by such amendments shall be taken into account ratably in each of the first 4 taxable years beginning after  December 31, 1986 , unless such partner or shareholder elects to include all such income in the the [sic] partner’s or shareholder’s taxable year with or within which the partnership’s or S corporation’s short taxable year ends. \n \n\n Subparagraph (C) shall apply to a shareholder of an S corporation only if such corporation was an S corporation for a taxable year beginning in 1986. \n \n “(3)  Basis, etc. rules— “(A)   Basis rule .— The adjusted basis of any partner’s interest in a partnership or shareholder’s stock in an S corporation shall be determined as if all of the income to be taken into account ratably in the 4 taxable years referred to in paragraph (2)(C) were included in gross income for the 1st of such taxable years. \n \n “(B)   Treatment of dispositions .— If any interest in a partnership or stock in an S corporation is disposed of before the last taxable year in the spread period, all amounts which would be included in the gross income of the partner or shareholder for subsequent taxable years in the spread period under paragraph (2)(C) and attributable to the interest or stock disposed of shall be included in gross income for the taxable year in which the disposition occurs. For purposes of the preceding sentence, the term ‘spread period’ means the period consisting of the 4 taxable years referred to in paragraph (2)(C).”\nAmendment by  Pub. L. 98–369  effective as if included in Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1982 , see  section 6(a) of Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nPub. L. 100–647, title I, §\u202f1008(e)(9) ,  Nov. 10, 1988 ,  102 Stat. 3441 , provided that:  “Nothing in section 806 of the Reform Act [ Pub. L. 99–514 , amending this section and sections 267, 441, and 706 of this title and enacting provisions set out above] or in any legislative history relating thereto shall be construed as requiring the Secretary of the Treasury or his delegate to permit an automatic change of a taxable year.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITIONS; MISCELLANEOUS'},
  'content': 'Any election made under section 1372(a) (as in effect before the enactment of the Subchapter S Revision Act of 1982) shall be treated as an election made under section 1362.\nAny references in this title to a provision of this subchapter shall, to the extent not inconsistent with the purposes of this subchapter, include a reference to the corresponding provision as in effect before the enactment of the Subchapter S Revision Act of 1982.\nIf a corporation was an electing small business corporation for the last preenactment year, subsections (f) and (d) of section 1375 (as in effect before the enactment of the Subchapter S Revision Act of 1982) shall continue to apply with respect to distributions of undistributed taxable income for any taxable year beginning before  January 1, 1983 .\nIf a corporation was an electing small business corporation for the last preenactment year and is an S corporation for the 1st postenactment year, any carryforward to the 1st post\xadenactment year which arose in a taxable year for which the corporation was an electing small business corporation shall be treated as arising in the 1st postenactment year.\nThe term “last preenactment year” means the last taxable year of a corporation which begins before  January 1, 1983 .\nThe term “1st postenactment year” means the 1st taxable year of a corporation which begins after  December 31, 1982 .\nThe enactment of the Subchapter S Revision Act of 1982, referred to in subsecs. (a) to (c), is the enactment of  Pub. L. 97–354 , which was approved  Oct. 19, 1982 .\nA prior section 1379, added  Pub. L. 91–172, title V, §\u202f531(a) ,  Dec. 30, 1969 ,  83 Stat. 654 ; amended  Pub. L. 93–406, title II, §\u202f2001(b) ,  Sept. 2, 1974 ,  88 Stat. 952 ;  Pub. L. 97–34, title III, §\u202f312(c)(6) ,  Aug. 13, 1981 ,  95 Stat. 284 ;  Pub. L. 97–248, title II, §\u202f238(c) ,  Sept. 3, 1982 ,  96 Stat. 513 , related to certain qualified pension, etc., plans, prior to the general revision of this subchapter by  section 2 of Pub. L. 97–354 .\n1984—Subsec. (b).  Pub. L. 98–369  struck out “In applying this subchapter to any taxable year beginning after  December 31, 1982 ,” and substituted “Any references in this title to a provision” for “any reference in this subchapter to another provision”.\nAmendment by  Pub. L. 98–369  effective as if included in Subchapter S Revision Act of 1982,  Pub. L. 97–354 , see  section 721(y)(1) of Pub. L. 98–369 , set out as a note under  section 1361 of this title .\nSection applicable to taxable years beginning after  Dec. 31, 1983 , except that this section as in effect before  Oct. 19, 1982 , to remain in effect for years beginning before  Jan. 1, 1984 , see section 6(a), (b)(1) of  Pub. L. 97–354 , set out as a note under  section 1361 of this title .\nSubsec. (b) of this section as in effect on day before  Sept. 3, 1982 , inapplicable to any section 401(j) plan, see  section 713(d)(8) of Pub. L. 98–369 , set out as a note under  section 404 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT OF COOPERATIVES'},
  'content': 'An organization described in subsection (a)(1) shall be subject to the tax imposed by section 11.\nFor treatment of income from load loss transactions of organizations described in subsection (a)(2)(C), see section 501(c)(12)(H).\n2017—Subsec. (b).  Pub. L. 115–97  substituted “tax imposed by section 11” for “taxes imposed by section 11 or 1201”.\n2004—Subsec. (c).  Pub. L. 108–357  added subsec. (c).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Oct. 22, 2004 , see  section 319(e) of Pub. L. 108–357 , set out as a note under  section 501 of this title .\nPub. L. 87–834, §\u202f17(c) ,  Oct. 16, 1962 ,  76 Stat. 1051 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   For the cooperatives .— Except as provided in paragraph (3), the amendments made by subsections (a) and (b) [enacting this subchapter, amending sections 521 and 6072 of this title, and repealing  section 522 of this title ] shall apply to taxable years of organizations described in section 1381(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) beginning after  December 31, 1962 . \n \n “(2)   For the patrons .— Except as provided in paragraph (3), section 1385 of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply with respect to any amount received from any organization described in section 1381(a) of such Code, to the extent that such amount is paid by such organization in a taxable year of such organization beginning after  December 31, 1962 . \n \n “(3)   Application of existing law .— In the case of any money, written notice of allocation, or other property paid by any organization described in section 1381(a)— “(A)  before the first day of the first taxable year of such organization beginning after  December 31, 1962 , or \n \n “(B)  on or after such first day with respect to patronage occurring before such first day, \n \n\n the tax treatment of such money, written notice of allocation, or other property (including the tax treatment of gain or loss on the redemption, sale, or other disposition of such written notice of allocation) by any person shall be made under the Internal Revenue Code of 1986 without regard to subchapter T of chapter 1 of such Code [this subchapter].”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT OF COOPERATIVES'},
  'content': 'Except as provided in subsection (b), the gross income of any organization to which this part applies shall be determined without any adjustment (as a reduction in gross receipts, an increase in cost of goods sold, or otherwise) by reason of any allocation or distribution to a patron out of the net earnings of such organization or by reason of any amount paid to a patron as a per-unit retain allocation (as defined in section 1388(f)).\nFor purposes of subsections (b) and (c)(2), the payment period for any taxable year is the period beginning with the first day of such taxable year and ending with the fifteenth day of the ninth month following the close of such year. For purposes of subsections (b)(1) and (c)(2)(A), a qualified check issued during the payment period shall be treated as an amount paid in money during such period if endorsed and cashed on or before the 90th day after the close of such period.\nIf any portion of the earnings from business done with or for patrons is includible in the organization’s gross income for a taxable year after the taxable year during which the patronage occurred, then for purposes of applying paragraphs (1) and (2) of subsection (b) to such portion the patronage shall, to the extent provided in regulations prescribed by the Secretary, be considered to have occurred during the taxable year of the organization during which such earnings are includible in gross income.\nFor purposes of this subsection, the term “completed crop pool method of accounting” means a method of accounting under which gain or loss is computed separately for each crop year pool in the year in which the last of the products in the pool are disposed of.\n1978—Subsec. (g).  Pub. L. 95–345  added subsec. (g).\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” wherever appearing.\n1969—Subsec. (b)(3).  Pub. L. 91–172  expanded the category of per-unit retain allocations that may not be taken into account in determining the taxable income of an organization, by including per-unit retain allocations paid for in money or other property (except nonqualified per-unit retain certificates as defined in section 1388(i) of this section).\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f211(a)(1) , inserted reference to amounts paid to patrons as a per-unit retain allocation as defined in section 1388(f).\nSubsec. (b).  Pub. L. 89–809, §\u202f211(a)(2) , inserted “and per-unit retain allocations” in heading, added pars. (3) and (4), and, in text following par. (4), inserted provisions making existing text applicable only to amounts described in pars. (1) and (2) and inserted text covering the treatment of amounts described in pars. (3) and (4).\nSubsec. (e).  Pub. L. 89–809, §\u202f211(a)(3) , inserted provision that the marketing of products shall be treated as occurring during any of the taxable years in which the pool is open.\nSubsec. (f).  Pub. L. 89–809, §\u202f211(a)(4) , substituted “paragraphs (1) and (2) of subsection (b)” for “subsection (b)”.\nPub. L. 91–172, title IX, §\u202f911(c) ,  Dec. 30, 1969 ,  83 Stat. 722 , provided that:  “The amendments made by this section [amending this section and  section 1388 of this title ] shall apply to per-unit retain allocations made after  October 9, 1969 .”\nPub. L. 89–809, title II, §\u202f211(e) ,  Nov. 13, 1966 ,  80 Stat. 1584 , provided that: \n “(1)  The amendments made by subsections (a), (b), and (c) [amending this section and sections 1383, 1385, and 1388 of this title] shall apply to per-unit retain allocations made during taxable years of an organization described in section 1381(a) (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after  April 30, 1966 , with respect to products delivered during such years. \n \n “(2)  The amendments made by subsection (d) [amending  section 6044 of this title ] shall apply with respect to calendar years after 1966.”\nSection applicable, except as otherwise provided, to taxable years of organizations described in  section 1381(a) of this title  beginning after  Dec. 31, 1962 , see  section 17(c) of Pub. L. 87–834 , set out as a note under  section 1381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT OF COOPERATIVES'},
  'content': '1966— Pub. L. 89–809, §\u202f211(a)(5) , inserted “or nonqualified per-unit retain certificates” in section catchline.\nSubsec. (a).  Pub. L. 89–809, §\u202f211(a)(6) , substituted “section 1382(b)(2) or (4)” for “1382(b)(2)” and inserted references to per-unit retain certificates.\nSubsec. (b)(2).  Pub. L. 89–809, §\u202f211(a)(7) , substituted “section 1382(b)(2) or (4)” for “section 1382(b)(2)” and inserted references to per-unit retain certificates.\nAmendment by  Pub. L. 89–809  applicable to per-unit retain allocations made during taxable years of an organization described in  section 1381(a) of this title  (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after  Apr. 30, 1966 , with respect to products delivered during such years, see  section 211(e)(1) of Pub. L. 89–809 , set out as a note under  section 1382 of this title .\nSection applicable, except as otherwise provided, to taxable years of organizations described in  section 1381(a) of this title  beginning after  Dec. 31, 1962 , see  section 17(c) of Pub. L. 87–834 , set out as a note under  section 1381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX TREATMENT BY PATRONS OF PATRONAGE DIVIDENDS AND PER-UNIT RETAIN ALLOCATIONS'},
  'content': '1976—Subsec. (b).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. (c)(2)(C).  Pub. L. 94–455, §\u202f1901(b)(3)(I) , substituted “ordinary income” for “gain from the sale or exchange of property which is not a capital asset”.\n1966—Subsec. (a)(3).  Pub. L. 89–809, §\u202f211(b)(1) , added par. (3).\nSubsec. (c).  Pub. L. 89–809, §\u202f211(b)(2) –(4), inserted “and certain nonqualified per-unit retain certificates” in heading, inserted provisions to par. (1) for the application of the subsection to any nonqualified per-unit retain certificates which were paid as per-unit retain allocations, and inserted references to per-unit retain certificates in par. (2).\nAmendment by  section 1901(b)(3)(I) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 89–809  applicable to per-unit retain allocations made during taxable years of an organization described in  section 1381(a) of this title  (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after  Apr. 30, 1966 , with respect to products delivered during such years, see  section 211(e)(1) of Pub. L. 89–809 , set out as a note under  section 1382 of this title .\nSection applicable, except as otherwise provided, to taxable years of organizations described in  section 1381(a) of this title  beginning after  Dec. 31, 1962 , see  section 17(c) of Pub. L. 87–834 , set out as a note under  section 1381 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DEFINITIONS; SPECIAL RULES'},
  'content': 'For purposes of this subchapter, the term “written notice of allocation” means any capital stock, revolving fund certificate, retain certificate, certificate of indebtedness, letter of advice, or other written notice, which discloses to the recipient the stated dollar amount allocated to him by the organization and the portion thereof, if any, which constitutes a patronage dividend.\nFor purposes of this subchapter, the term “qualified check” means only a check (or other instrument which is redeemable in money) which is paid as a part of a patronage dividend, or as a part of a payment described in section 1382(c)(2)(A), to a distributee who has not given consent as provided in paragraph (2)(A) or (B) with respect to such patronage dividend or payment, and on which there is clearly imprinted a statement that the endorsement and cashing of the check (or other instrument) constitutes the consent of the payee to include in his gross income, as provided in the Federal income tax laws, the stated dollar amount of the written notice of allocation which is a part of the patronage dividend or payment of which such qualified check is also a part. Such term does not include any check (or other instrument) which is paid as part of a patronage dividend or payment which does not include a written notice of allocation (other than a written notice of allocation described in paragraph (1)(A)).\nFor purposes of this subchapter, the term “nonqualified written notice of allocation” means a written notice of allocation which is not described in subsection (c) or a qualified check which is not cashed on or before the 90th day after the close of the payment period for the taxable year for which the distribution of which it is a part is paid.\nFor purposes of this subchapter, the term “per-unit retain allocation” means any allocation, by an organization to which part I of this subchapter applies, to a patron with respect to products marketed for him, the amount of which is fixed without reference to the net earnings of the organization pursuant to an agreement between the organization and the patron.\nFor purposes of this subchapter, the term “per-unit retain certificate” means any written notice which discloses to the recipient the stated dollar amount of a per-unit retain allocation to him by the organization.\nFor purposes of this subchapter, the term “qualified per-unit retain certificate” means any per-unit retain certificate which the distributee has agreed, in the manner provided in paragraph (2), to take into account at its stated dollar amount as provided in section 1385(a).\nFor purposes of this subchapter, the term “nonqualified per-unit retain certificate” means a per-unit retain certificate which is not described in subsection (h).\nThe net earnings of such organization may, at its option, be determined by offsetting patronage losses (including any patronage loss carried to such year) which are attributable to 1 or more allocation units (whether such units are functional, divisional, departmental, geographic, or otherwise) against patronage earnings of 1 or more other such allocation units.\nFor purposes of this subsection, the terms “patronage earnings” and “patronage losses” means\u202f 1 1 \u202fSo in original. Probably should be “mean”.  earnings and losses, respectively, which are derived from business done with or for patrons of the organization.\nFor purposes of section 521 and this subchapter, the marketing of the products of members or other producers shall include the feeding of such products to cattle, hogs, fish, chickens, or other animals and the sale of the resulting animals or animal products.\n2004—Subsec. (a).  Pub. L. 108–357, §\u202f312(a) , inserted at end of concluding provisions “For purposes of paragraph (3), net earnings shall not be reduced by amounts paid during the year as dividends on capital stock or other proprietary capital interests of the organization to the extent that the articles of incorporation or bylaws of such organization or other contract with patrons provide that such dividends are in addition to amounts otherwise payable to patrons which are derived from business done with or for patrons during the taxable year.”\nSubsec. (k).  Pub. L. 108–357, §\u202f316(a) , added subsec. (k).\n1990—Subsec. (k).  Pub. L. 101–508  struck out subsec. (k) which cross-referenced section 46(h) for provisions relating to apportionment of investment credit between cooperative organizations and their patrons.\n1986—Subsecs. (j), (k).  Pub. L. 99–272  added subsec. (j) and redesignated former subsec. (j) as (k).\n1978—Subsec. (j).  Pub. L. 95–600  added subsec. (j).\n1976—Subsec. (c)(2)(B)(i).  Pub. L. 94–455, §\u202f1901  (a)(153)(A), substituted “ October 16, 1962 ” for “the date of the enactment of the Revenue Act of 1962”.\nSubsec. (h)(2)(B)(i).  Pub. L. 94–455, §\u202f1901(a)(153)(B) , substituted “ November 13, 1966 ” for “the date of the enactment of this subsection”.\n1969—Subsec. (f).  Pub. L. 91–172  struck out reference to allocations made by organizations other than by payment of money or other property except per-unit retain certificates.\n1966—Subsec. (e).  Pub. L. 89–809, §\u202f211(c)(1) , inserted references to per-unit retain certificates.\nSubsecs. (f) to (i).  Pub. L. 89–809, §\u202f211(c)(2) , added subsecs. (f) to (i).\nPub. L. 108–357, title III, §\u202f312(b) ,  Oct. 22, 2004 ,  118 Stat. 1467 , provided that:  “The amendment made by this section [amending this section] shall apply to distributions in taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nAmendment by  section 316(a) of Pub. L. 108–357  applicable to taxable years beginning after  Oct. 22, 2004 , see  section 316(c) of Pub. L. 108–357 , set out as a note under  section 521 of this title .\nAmendment by  Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 99–272, title XIII, §\u202f13210(c) ,  Apr. 7, 1986 ,  100 Stat. 324 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and  section 521 of this title ] shall apply to taxable years beginning after  December 31, 1962 . \n \n “(2)   Notification requirement .— The provisions of section 1388(j)(3) of the Internal Revenue Code of 1954 [now 1986] (as added by subsection (a)) shall apply to taxable years beginning on or after the date of the enactment of this Act [ Apr. 7, 1986 ]. \n \n “(3)   No inference .— Nothing in the amendments made by this section [amending this section and  section 521 of this title ] shall be construed to infer that a change in law is intended as to whether any patronage earnings may or not be offset by nonpatronage losses, and any determination of such issue shall be made as if such amendments had not been enacted.”\nAmendment by  Pub. L. 95–600  applicable to taxable years ending after  October 31, 1978 , see  section 316(c) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 91–172  applicable to per-unit retain allocations made after  Oct. 9, 1969 , see  section 911(c) of Pub. L. 91–172 , set out as a note under  section 1382 of this title .\nAmendment by  Pub. L. 89–809  applicable to per-unit retain allocations made during taxable years of an organization described in  section 1381(a) of this title  (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after  Apr. 30, 1966 , with respect to products delivered during such years, see  section 211(e)(1) of Pub. L. 89–809 , set out as a note under  section 1382 of this title .\nSection applicable, except as otherwise provided, to taxable years of organizations described in  section 1381(a) of this title  beginning after  Dec. 31, 1962 , see  section 17(c) of Pub. L. 87–834 , set out as a note under  section 1381 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 89–809, title II, §\u202f211(f) ,  Nov. 13, 1966 ,  80 Stat. 1584 , provided that a written agreement between a patron and a cooperative association which met certain qualifications and was entered into after  Oct. 14, 1965  and before  Nov. 13, 1966 , and which was in effect on  Nov. 13, 1966 , was to be treated for purposes of subsec. (h) of this section as if entered into after  Nov. 13, 1966 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DESIGNATION'},
  'content': 'From among the areas nominated for designation under this section, the appropriate Secretaries may designate empowerment zones and enterprise communities.\nThe appropriate Secretaries may designate in the aggregate 95 nominated areas as enterprise communities under this section, subject to the availability of eligible nominated areas. Of that number, not more than 65 may be designated in urban areas and not more than 30 may be designated in rural areas.\nThe appropriate Secretaries may designate in the aggregate 11 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than 8 may be designated in urban areas and not more than 3 may be designated in rural areas. If 8 empowerment zones are designated in urban areas, no less than 1 shall be designated in an urban area the most populous city of which has a population of 500,000 or less and no less than 1 shall be a nominated area which includes areas in 2 States and which has a population of 50,000 or less. The Secretary of Housing and Urban Development shall designate empowerment zones located in urban areas in such a manner that the aggregate population of all such zones does not exceed 1,000,000.\nA designation may be made under subsection (a) only after 1993 and before 1996.\nIn addition to the areas designated under subsection (a), the appropriate Secretaries may designate in the aggregate an additional 20 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than 15 may be designated in urban areas and not more than 5 may be designated in rural areas.\nA designation may be made under this subsection after the date of the enactment of this subsection and before  January 1, 1999 .\nA nominated area shall be eligible for designation under this subsection only if the poverty rate for each population census tract within the nominated area is not less than 20 percent and the poverty rate for at least 90 percent of the population census tracts within the nominated area is not less than 25 percent.\nClause (i) shall not apply to up to 3 noncontiguous parcels in a nominated area which may be developed for commercial or industrial purposes. The aggregate area of noncontiguous parcels to which the preceding sentence applies with respect to any nominated area shall not exceed 2,000 acres.\nSection 1392(a)(4) (and so much of paragraphs (1) and (2) of section 1392(b) as relate to section 1392(a)(4)) shall not apply to an area nominated for designation under this subsection.\nThe Secretary of Agriculture may designate not more than 1 empowerment zone in a rural area without regard to clause (i) if such area satisfies emigration criteria specified by the Secretary of Agriculture.\nThe parcels described in subparagraph (A)(iii) shall not be taken into account in determining whether the requirement of subparagraph (A) or (B) of section 1392(a)(3) is met.\nIf a population census tract (or equivalent division under section 1392(b)(4)) in a rural area exceeds 1,000 square miles or includes a substantial amount of land owned by the Federal, State, or local government, the nominated area may exclude such excess square mileage or governmentally owned land and the exclusion of that area will not be treated as violating the continuous boundary requirement of section 1392(a)(3)(B).\nThe aggregate population limitation under the last sentence of subsection (b)(2) shall not apply to a designation under paragraph (1).\nSubsection (e)(5) shall not apply to any enterprise community designated under subsection (a) that is also nominated for designation under this subsection.\nSection 1393(a)(4) shall not apply to an area nominated for designation under this subsection.\nAn area in an Indian reservation shall be treated as nominated by a State and a local government if it is nominated by the reservation governing body (as determined by the Secretary of the Interior).\nIn addition to the areas designated under subsections (a) and (g), the appropriate Secretaries may designate in the aggregate an additional 9 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than seven may be designated in urban areas and not more than 2 may be designated in rural areas.\nA designation may be made under this subsection after the date of the enactment of this subsection and before  January 1, 2002 .\nThe rules of subsection (g)(3) shall apply to designations under this subsection.\nThe number of areas which may be designated as empowerment zones under this subsection shall be increased by 1 for each area which ceases to be an empowerment zone by reason of section 1400E(e). 1 1 \u202fSee References in Text note below.  Each additional area designated by reason of the preceding sentence shall have the same urban or rural character as the area it is replacing.\nThe date of the enactment of this subsection, referred to in subsec. (g)(2), is the date of enactment of  Pub. L. 105–34 , which was approved  Aug. 5, 1997 .\nThe date of the enactment of this subsection, referred to in subsec. (h)(2), is the date of enactment of  Pub. L. 106–554 , which was approved  Dec. 21, 2000 .\nSection 1400E(e), referred to in subsec. (h)(4), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(5)(A) ,  Mar. 23, 2018 ,  132 Stat. 1210 .\nA prior section 1391, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2892 ; amended  Pub. L. 96–222, title I, §\u202f106(a)(4) ,  Apr. 1, 1980 ,  94 Stat. 221 ;  Pub. L. 96–595, §\u202f3(a)(1) , (2),  Dec. 24, 1980 ,  94 Stat. 3465 , defined terms used in former subchapter U, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .\n2020—Subsec. (d)(1)(A)(i).  Pub. L. 116–260  substituted “ December 31, 2025 ” for “ December 31, 2020 ”.\n2019—Subsec. (d)(1)(A)(i).  Pub. L. 116–94  substituted “ December 31, 2020 ” for “ December 31, 2017 ”.\n2018—Subsec. (d)(1)(A)(i).  Pub. L. 115–123  substituted “ December 31, 2017 ” for “ December 31, 2016 ”.\nSubsec. (g)(3)(E)(ii).  Pub. L. 115–141  substituted “the Interior” for “Interior”.\n2015—Subsec. (d)(1)(A)(i).  Pub. L. 114–113  substituted “ December 31, 2016 ” for “ December 31, 2014 ”.\n2014—Subsec. (d)(1)(A)(i).  Pub. L. 113–295  substituted “ December 31, 2014 ” for “ December 31, 2013 ”.\n2013—Subsec. (d)(1)(A)(i).  Pub. L. 112–240  substituted “ December 31, 2013 ” for “ December 31, 2011 ”.\n2010—Subsec. (d)(1)(A)(i).  Pub. L. 111–312, §\u202f753(a)(1) , substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\nSubsec. (h)(2).  Pub. L. 111–312, §\u202f753(a)(2) , struck out at end “Subject to subparagraphs (B) and (C) of subsection (d)(1), such designations shall remain in effect during the period beginning on  January 1, 2002 , and ending on  December 31, 2009 .”\n2000—Subsec. (d)(1)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f112] , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the close of the 10th calendar year beginning on or after such date of designation,”.\nSubsec. (g)(3)(C).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f319(13)] , substituted “paragraph (1)” for “paragraph (1)(B)”.\nSubsec. (h).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f111] , added subsec. (h).\n1997—Subsec. (b)(2).  Pub. L. 105–34, §\u202f951(a)(3) , substituted “1,000,000” for “750,000”.\nPub. L. 105–34, §\u202f951(a)(2) , which directed substitution of “8” for “6”, was executed by making the substitution both places “6” appeared, to reflect the probable intent of Congress.\nPub. L. 105–34, §\u202f951(a)(1) , substituted “11” for “9”.\nSubsec. (c).  Pub. L. 105–34, §\u202f952(d)(2) , substituted “subsection (a)” for “this section”.\nSubsecs. (e), (f).  Pub. L. 105–34, §\u202f952(d)(1) , substituted “this section” for “subsection (a)” in introductory provisions.\nSubsec. (g).  Pub. L. 105–34, §\u202f952(a) , added subsec. (g).\nPub. L. 116–260, div. EE, title I, §\u202f118(e) ,  Dec. 27, 2020 ,  134 Stat. 3051 , provided that:  “The amendments made by this section [amending this section and sections 1397A and 1397B of this title] shall apply to taxable years beginning after  December 31, 2020 .”\nPub. L. 116–94, div. Q, title I, §\u202f118(c) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2017 .”\nPub. L. 115–123, div. D, title I, §\u202f40311(b) ,  Feb. 9, 2018 ,  132 Stat. 147 , provided that:  “The amendment made by subsection (a)(1) [amending this section] shall apply to taxable years beginning after  December 31, 2016 .”\nPub. L. 114–113, div. Q, title I, §\u202f171(e)(1) ,  Dec. 18, 2015 ,  129 Stat. 3071 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 2014 .”\nPub. L. 113–295, div. A, title I, §\u202f139(c) ,  Dec. 19, 2014 ,  128 Stat. 4020 , provided that:  “The amendment made by this section [amending this section] shall apply to periods after  December 31, 2013 .”\nAmendment by  Pub. L. 112–240  applicable to periods after  Dec. 31, 2011 , see  section 327(d) of Pub. L. 112–240 , set out as a note under  section 1202 of this title .\nAmendment by  Pub. L. 111–312  applicable to periods after  Dec. 31, 2009 , see  section 753(d) of Pub. L. 111–312 , set out as a note under  section 1202 of this title .\nPub. L. 105–34, title IX, §\u202f951(c) ,  Aug. 5, 1997 ,  111 Stat. 885 , provided that:  “The amendments made by this section [amending this section and  section 1396 of this title ] shall take effect on the date of the enactment of this Act [ Aug. 5, 1997 ], except that designations of new empowerment zones made pursuant to such amendments shall be made during the 180-day period beginning on the date of the enactment of this Act. No designation pursuant to such amendments shall take effect before  January 1, 2000 .”\nPub. L. 116–260, div. EE, title I, §\u202f118(d) ,  Dec. 27, 2020 ,  134 Stat. 3051 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Dec. 27, 2020 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”\nPub. L. 116–94, div. Q, title I, §\u202f118(b) ,  Dec. 20, 2019 ,  133 Stat. 3229 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Dec. 20, 2019 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”\nPub. L. 115–123, div. D, title I, §\u202f40311(a)(2) ,  Feb. 9, 2018 ,  132 Stat. 147 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Feb. 9, 2018 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”\nPub. L. 114–113, div. Q, title I, §\u202f171(a)(2) ,  Dec. 18, 2015 ,  129 Stat. 3069 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Dec. 18, 2015 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”\nPub. L. 113–295, div. A, title I, §\u202f139(b) ,  Dec. 19, 2014 ,  128 Stat. 4020 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Dec. 19, 2014 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”\nPub. L. 112–240, title III, §\u202f327(c) ,  Jan. 2, 2013 ,  126 Stat. 2334 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Jan. 2, 2013 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”\nPub. L. 111–312, title VII, §\u202f753(c) ,  Dec. 17, 2010 ,  124 Stat. 3321 , provided that:  “In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act [ Dec. 17, 2010 ]), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section [ Dec. 17, 2010 ], the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DESIGNATION'},
  'content': 'The nominated area is one of pervasive poverty, unemployment, and general distress.\nA population census tract with a population of less than 2,000 shall be treated as having a poverty rate which meets the requirements of subparagraphs (A) and (B) of subsection (a)(4) if more than 75 percent of such tract is zoned for commercial or industrial use.\nA nominated area may not include a noncontiguous parcel unless such parcel separately meets (subject to paragraphs (1) and (2)) the criteria set forth in subsection (a)(4).\nIn the case of an area which is not tracted for population census tracts, the equivalent county divisions (as defined by the Bureau of the Census for purposes of defining poverty areas) shall be used for purposes of determining poverty rates.\nA nominated area in Alaska or Hawaii shall be treated as meeting the requirements of paragraphs (2), (3), and (4) of subsection (a) if for each census tract or block group within such area 20 percent or more of the families have income which is 50 percent or less of the statewide median family income (as determined under section 143).\nA prior section 1392, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2893 ; amended  Pub. L. 96–222, title I, §\u202f106(a)(5) ,  Apr. 1, 1980 ,  94 Stat. 221 ;  Pub. L. 96–595, §\u202f3(a)(3) , (4),  Dec. 24, 1980 ,  94 Stat. 3465 , related to election by general stock ownership corporations not to be subject to taxes imposed by this chapter, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .\n1997—Subsec. (d).  Pub. L. 105–34  added subsec. (d).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'DESIGNATION'},
  'content': 'The term “urban area” means an area which is not a rural area.\nNo empowerment zone or enterprise community may include any area within an Indian reservation.\nThe term “Indian reservation” has the meaning given such term by section 168(j)(6).\nThe term “nominated area” means an area which is nominated by 1 or more local governments and the State or States in which it is located for designation under section 1391.\nIf more than 1 State or local government seeks to nominate an area under this part, any reference to, or requirement of, this subchapter shall apply to all such governments.\nAn area shall be treated as nominated by a State and a local government if it is nominated by an economic development corporation chartered by the State.\nPopulation and poverty rate shall be determined by the most recent decennial census data available.\nFor purposes of this title, the terms “empowerment zone” and “enterprise community” mean areas designated as such under section 1391.\nA prior section 1393, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2894 ; amended  Pub. L. 96–595, §\u202f3(a)(5) , (6), (8),  Dec. 24, 1980 ,  94 Stat. 3465 , related to taxation of general stock ownership corporation taxable income to shareholders, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'TAX-EXEMPT FACILITY BONDS FOR EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES'},
  'content': 'For purposes of part IV of subchapter B of this chapter (relating to tax exemption requirements for State and local bonds), the term “exempt facility bond” includes any bond issued as part of an issue 95 percent or more of the net proceeds (as defined in section 150(a)(3)) of which are to be used to provide any enterprise zone facility.\nThe term “enterprise zone facility” means any qualified zone property the principal user of which is an enterprise zone business, and any land which is functionally related and subordinate to such property.\nExcept as modified in this paragraph, the term “enterprise zone business” has the meaning given such term by section 1397C.\nExcept as provided in subclause (II), references in section 1397C to empowerment zones shall be treated as including references to enterprise communities.\nFor purposes of subsections (b)(6) and (c)(5) of section 1397C, an employee shall be treated as a resident of an empowerment zone if such employee is a resident of an empowerment zone, an enterprise community, or a qualified low-income community within an applicable nominating jurisdiction.\nA business shall not fail to be treated as an enterprise zone business for any taxable year beginning after the testing period by reason of failing to meet any requirement of subsection (b) or (c) of section 1397C if at least 35 percent of the employees of such business for such year are residents of an empowerment zone, an enterprise community, or a qualified low-income community within an applicable nominating jurisdiction. The preceding sentence shall not apply to any business which is not a qualified business by reason of paragraph (1), (4), or (5) of section 1397C(d).\nThe Secretary shall prescribe regulations under which 1 or more targeted populations (within the meaning of section 103(20) of the Riegle Community Development and Regulatory Improvement Act of 1994) may be treated as qualified low-income communities.\nIn the case of an area which is not tracted for population census tracts, the equivalent county divisions (as defined by the Bureau of the Census for purposes of defining poverty areas) shall be used for purposes of determining poverty rates and median family income.\nIn the case of a population census tract located within a high migration rural county, clause (i)(II) shall be applied to areas not located within a metropolitan area by substituting “85 percent” for “80 percent”.\nFor purposes of this clause, the term “high migration rural county” means any county which, during the 20-year period ending with the year in which the most recent census was conducted, has a net out-migration of inhabitants from the county of at least 10 percent of the population of the county at the beginning of such period.\nThe term “testing period” means the first 3 taxable years beginning after the startup period.\nThe term “applicable nominating jurisdiction” means, with respect to any empowerment zone or enterprise community, any local government that nominated such community for designation under section 1391.\nThe term “enterprise zone business” includes any trades or businesses which would qualify as an enterprise zone business (determined after the modifications of subparagraph (B)) if such trades or businesses were separately incorporated.\nFor purposes of paragraph (1), the aggregate amount of outstanding enterprise zone facility bonds allocable to any person shall be determined under rules similar to the rules of section 144(a)(10), taking into account only bonds to which subsection (a) applies.\nThe requirements of sections 147(c)(1)(A) and 147(d) shall not apply to any bond described in subsection (a).\nParagraphs (1) and (2) shall not apply solely by reason of the termination or revocation of a designation as an empowerment zone or an enterprise community.\nParagraphs (1) and (2) shall not apply to any cessation resulting from bankruptcy.\nParagraph (1) shall apply to an empowerment zone facility bond only if such bond is designated for purposes of this subsection by the local government which nominated the area to which such bond relates.\nBonds to which paragraph (1) applies shall not be taken into account in applying the limitation of subsection (c) to other bonds.\nSection 103(20) of the Riegle Community Development and Regulatory Improvement Act of 1994, referred to in subsec. (b)(3)(C)(ii), is classified to  section 4702(20) of Title 12 , Banks and Banking.\nA prior section 1394, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2895 ; amended  Pub. L. 96–595, §\u202f3(a)(6) –(8),  Dec. 24, 1980 ,  94 Stat. 3465 , related to rules applicable to distributions of an electing general stock ownership corporation, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .\nA prior section 1395, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2895 , related to adjustment to basis of stock of shareholders, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .\n2018—Subsec. (b)(3)(B)(i)(II).  Pub. L. 115–141  substituted “subsections” for “subsection”.\n2015—Subsec. (b)(3)(B)(i).  Pub. L. 114–113, §\u202f171(b) , designated existing provisions as subcl. (I), inserted heading, substituted “Except as provided in subclause (II), references” for “References”, and added subcl. (II).\nSubsec. (b)(3)(B)(iii).  Pub. L. 114–113, §\u202f171(d)(1) , substituted “,\u2000an enterprise community, or a qualified low-income community within an applicable nominating jurisdiction” for “or an enterprise community”.\nSubsec. (b)(3)(C).  Pub. L. 114–113, §\u202f171(c)(1) , added subpar. (C). Former subpar. (C) redesignated (D).\nSubsec. (b)(3)(D).  Pub. L. 114–113, §\u202f171(c)(1) , (d)(2), redesignated subpar. (C) as (D) and substituted “Other definitions” for “Definitions” in heading. Former subpar. (D) redesignated (E).\nSubsec. (b)(3)(D)(iii).  Pub. L. 114–113, §\u202f171(c)(2) , added cl. (iii).\nSubsec. (b)(3)(E).  Pub. L. 114–113, §\u202f171(c)(1) , redesignated subpar. (D) as (E).\n2014—Subsec. (f).  Pub. L. 113–295, §\u202f220 ( o ), struck out “designated under section 1391(g)” after “empowerment zones” in heading.\nSubsec. (f)(1), (2)(A).  Pub. L. 113–295, §\u202f220(p) , substituted “an empowerment zone facility bond” for “a new empowerment zone facility bond”.\n2002—Subsec. (c)(2).  Pub. L. 107–147  substituted “paragraph (1)” for “subparagraph (A)”.\n2000—Subsec. (b)(2).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f116(b)(3)(A)] , substituted “section 1397D” for “section 1397C” in introductory provisions.\nSubsec. (b)(2)(B).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f116(b)(3)(B)] , substituted “section 1397D(a)(2)” for “section 1397C(a)(2)”.\nSubsec. (b)(3).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f116(b)(4)(A)] , substituted “section 1397C” for “section 1397B” wherever appearing.\nSubsec. (b)(3)(B)(iii).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f116(b)(4)(B)] , substituted “section 1397C(d)” for “section 1397B(d)”.\nSubsec. (f)(3).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f115(a)] , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “For purposes of this subsection, the term ‘new empowerment zone facility bond’ means any bond which would be described in subsection (a) if only empowerment zones designated under section 1391(g) were taken into account under sections 1397B and 1397C.”\n1997—Subsec. (b)(2).  Pub. L. 105–34, §\u202f955(b) , amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “The term ‘qualified zone property’ has the meaning given such term by section 1397C; except that the references to empowerment zones shall be treated as including references to enterprise communities.”\nSubsec. (b)(3).  Pub. L. 105–34, §\u202f955(b) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “The term ‘enterprise zone business’ has the meaning given to such term by section 1397B, except that—\n“(A) references to empowerment zones shall be treated as including references to enterprise communities, and\n“(B) such term includes any trades or businesses which would qualify as an enterprise zone business (determined after the modification of subparagraph (A)) if such trades or businesses were separately incorporated.”\nSubsec. (f).  Pub. L. 105–34, §\u202f953(a) , added subsec. (f).\n1996—Subsec. (e)(2).  Pub. L. 104–188 , which directed that par. (2) be amended by striking “(i)” and inserting “(A)” and by striking “(ii)” and inserting “(B)”, could not be executed, because par. (2) contained neither “(i)” nor “(ii)”.\nPub. L. 114–113, div. Q, title I, §\u202f171(e)(2) ,  Dec. 18, 2015 ,  129 Stat. 3071 , provided that:  “The amendments made by subsections (b), (c), and (d) [amending this section] shall apply to bonds issued after  December 31, 2015 .”\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f115(b)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–602, provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after  December 31, 2001 .”\nAmendment by section 1(a)(7) [title I, §\u202f116(b)(3), (4)] of  Pub. L. 106–554  applicable to qualified empowerment zone assets acquired after  Dec. 21, 2000 , see section 1(a)(7) [title I, §\u202f116(c)] of  Pub. L. 106–554 , set out as a note under  section 1016 of this title .\nPub. L. 105–34, title IX, §\u202f953(b) ,  Aug. 5, 1997 ,  111 Stat. 888 , provided that:  “The amendment made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title IX, §\u202f955(c) ,  Aug. 5, 1997 ,  111 Stat. 890 , provided that:  “The amendments made by this section [amending this section] shall apply to obligations issued after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES'},
  'content': 'For purposes of section 38, the amount of the empowerment zone employment credit determined under this section with respect to any employer for any taxable year is the applicable percentage of the qualified zone wages paid or incurred during the calendar year which ends with or within such taxable year.\nFor purposes of this section, the applicable percentage is 20 percent.\nFor purposes of this section, the term “qualified zone wages” means any wages paid or incurred by an employer for services performed by an employee while such employee is a qualified zone employee.\nWith respect to each qualified zone employee, the amount of qualified zone wages which may be taken into account for a calendar year shall not exceed $15,000.\nThe term “qualified zone wages” shall not include wages taken into account in determining the credit under section 51.\nThe $15,000 amount in paragraph (2) shall be reduced for any calendar year by the amount of wages paid or incurred during such year which are taken into account in determining the credit under section 51.\nThe Taxpayer Relief Act of 1997, referred to in subsec. (b)(2), is  Pub. L. 105–34 ,  Aug. 5, 1997 ,  111 Stat. 788 . For complete classification of this Act to the Code, see Tables.\nA prior section 1396, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2895 ; amended  Pub. L. 96–595, §\u202f3(a)(6) , (9), (10),  Dec. 24, 1980 ,  94 Stat. 3465 , related to minimum distributions by an electing general stock ownership corporation, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .\n2000—Subsec. (b).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f113(a)] , amended subsec. (b) generally, substituting provisions establishing an applicable percentage of 20 percent for provisions setting out tables for determining the applicable percentage.\nSubsec. (e).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f113(b)] , struck out heading and text of subsec. (e). Text read as follows: “This section shall be applied without regard to any empowerment zone designated under section 1391(g).”\n1997—Subsec. (b).  Pub. L. 105–34  substituted “For purposes of this section—\n“(1)  In general .—Except as provided in paragraph (2), the term ‘applicable percentage’ means the percentage determined in accordance with the following table:”\nfor “For purposes of this section, the term ‘applicable percentage’ means the percentage determined in accordance with the following table:” and added par. (2).\nSubsec. (e).  Pub. L. 105–34, §\u202f952(b) , added subsec. (e).\n1996—Subsec. (c)(3).  Pub. L. 104–188  substituted “work opportunity credit” for “targeted jobs credit” in heading.\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f113(d)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–601, provided that:  “The amendments made by this section [amending this section and  section 1400 of this title ] shall apply to wages paid or incurred after  December 31, 2001 .”\nAmendment by  section 951(b) of Pub. L. 105–34  effective  Aug. 5, 1997 , except that designations of new empowerment zones made pursuant to amendments by  section 951 of Pub. L. 105–34  to be made during 180-day period beginning  Aug. 5, 1997 , and no designation pursuant to such amendments to take effect before  Jan. 1, 2000 , see  section 951(c) of Pub. L. 105–34 , set out as a note under  section 1391 of this title .\nAmendment by  Pub. L. 104–188  applicable to individuals who begin work for the employer after  Sept. 30, 1996 , see  section 1201(g) of Pub. L. 104–188 , set out as a note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES'},
  'content': 'The term “wages” has the same meaning as when used in section 51.\nA person is related to any other person if the person bears a relationship to such other person specified in section 267(b) or 707(b)(1), or such person and such other person are engaged in trades or businesses under common control (within the meaning of subsections (a) and (b) of section 52). For purposes of the preceding sentence, in applying section 267(b) or 707(b)(1), “10 percent” shall be substituted for “50 percent”.\nFor purposes of this subpart, rules similar to the rules of section 51(k) and subsections (c), (d), and (e) of section 52 shall apply.\nA prior section 1397, added  Pub. L. 95–600, title VI, §\u202f601(a) ,  Nov. 6, 1978 ,  92 Stat. 2895 , related to special rules applicable to an electing general stock ownership corporation, prior to repeal by  Pub. L. 99–514, title XIII, §\u202f1303(a) ,  Oct. 22, 1986 ,  100 Stat. 2658 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES'},
  'content': 'Rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified zone property which ceases to be used in an empowerment zone by an enterprise zone business.\nThis section shall not apply to any property placed in service in taxable years beginning after  December 31, 2020 .\n2020—Subsec. (c).  Pub. L. 116–260  added subsec. (c).\n2000—Subsec. (a)(1)(A).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f114(a)] , substituted “$35,000” for “$20,000”.\nSubsec. (c).  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f114(b)] , struck out heading and text of subsec. (c). Text read as follows: “For purposes of this section, qualified zone property shall not include any property substantially all of the use of which is in any parcel described in section 1391(g)(3)(A)(iii).”\n1997—Subsec. (c).  Pub. L. 105–34  added subsec. (c).\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 118(e) of div. EE of Pub. L. 116–260 , set out as a note under  section 1391 of this title .\nPub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f114(c)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–601, provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after  December 31, 2001 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES'},
  'content': 'Any reference in this paragraph to section 1400F shall be treated as reference to such section before its repeal.\nA taxpayer shall be treated as having purchased any property if, but for paragraph (4), the unadjusted basis of such property in the hands of the taxpayer would be its cost (within the meaning of section 1012).\nIf gain from any sale is not recognized by reason of subsection (a), such gain shall be applied to reduce (in the order acquired) the basis for determining gain or loss of any qualified empowerment zone asset which is purchased by the taxpayer during the 60-day period described in subsection (a). This paragraph shall not apply for purposes of section 1202.\nFor purposes of determining whether the nonrecognition of gain under subsection (a) applies to any qualified empowerment zone asset which is sold, the taxpayer’s holding period for such asset and the asset referred to in subsection (a)(1) shall be determined without regard to section 1223.\nThis section shall not apply to sales in taxable years beginning after  December 31, 2020 .\nThe date of the enactment of this paragraph, referred to in subsec. (b)(1)(A)(iii), is the date of enactment of  Pub. L. 106–554 , which was approved  Dec. 21, 2000 .\nSection 1400F, referred to in subsec. (b)(1), was repealed by  Pub. L. 115–141, div. U, title IV, §\u202f401(d)(5)(A) ,  Mar. 23, 2018 ,  132 Stat. 1210 .\nA prior section 1397B was renumbered  section 1397C of this title .\n2020—Subsec. (c).  Pub. L. 116–260  added subsec. (c).\n2018—Subsec. (b)(1)(B).  Pub. L. 115–141, §\u202f401(d)(5)(B)(iv) , added subpar. (B).\nPub. L. 115–141, §\u202f401(d)(4)(B)(vii) , struck out subpar. (B). Text read as follows: “The District of Columbia Enterprise Zone shall not be treated as an empowerment zone for purposes of this section.”\nSubsec. (b)(5).  Pub. L. 115–141, §\u202f401(d)(5)(B)(v) , substituted “which is sold, the taxpayer’s holding period for such asset and the asset referred to in subsection (a)(1) shall be determined without regard to section 1223.” for “which is sold—\n“(A) the taxpayer’s holding period for such asset and the asset referred to in subsection (a)(1) shall be determined without regard to section 1223, and\n“(B) only the first year of the taxpayer’s holding period for the asset referred to in subsection (a)(1) shall be taken into account for purposes of paragraphs (2)(A)(iii), (3)(C), and (4)(A)(iii) of section 1400F(b).”\n2014—Subsec. (b)(1)(A)(iv).  Pub. L. 113–295  added cl. (iv).\nAmendment by  Pub. L. 116–260  applicable to taxable years beginning after  Dec. 31, 2020 , see  section 118(e) of div. EE of Pub. L. 116–260 , set out as a note under  section 1391 of this title .\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,  Pub. L. 111–312 , to which such amendment relates, see  section 206(d) of Pub. L. 113–295 , set out as a note under  section 32 of this title .\nSection applicable to qualified empowerment zone assets acquired after  Dec. 21, 2000 , see section 1(a)(7) [title I, §\u202f116(c)] of  Pub. L. 106–554 , set out as an Effective Date of 2000 Amendment note under  section 1016 of this title .\nAmendment by  section 401(d)(4)(B)(vii) of Pub. L. 115–141  not applicable to certain obligations issued, DC Zone assets acquired, or principal residences acquired before  Jan. 1, 2012 , see  section 401(d)(4)(C) of Pub. L. 115–141 , set out as a note under former  section 1400 of this title .\nAmendment by section 401(d)(5)(B)(iv), (v) of  Pub. L. 115–141  not applicable to certain qualified community assets acquired, wages paid or incurred, qualified revitalization buildings placed in service, or property acquired before  Jan. 1, 2010 , see  section 401(d)(5)(C) of Pub. L. 115–141 , set out as a note under former  section 1400E of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES'},
  'content': 'Except as otherwise provided in this subsection, the term “qualified business” means any trade or business.\nThe rental to others of tangible personal property shall be treated as a qualified business if and only if at least 50 percent of the rental of such property is by enterprise zone businesses or by residents of an empowerment zone.\nThe term “qualified business” shall not include any trade or business consisting predominantly of the development or holding of intangibles for sale or license.\nA prior section 1397C was renumbered  section 1397D of this title .\n2018—Subsec. (d)(5)(B).  Pub. L. 115–141  substituted “subparagraph (A) or (B)” for “subparagraphs (A) or (B)” in introductory provisions.\n2000— Pub. L. 106–554  renumbered  section 1397B of this title  as this section.\n1999—Subsec. (e)(2).  Pub. L. 106–170  substituted “section 1221(a)(4)” for “section 1221(4)”.\n1997—Subsec. (b)(2).  Pub. L. 105–34, §\u202f956(a)(1) , substituted “50 percent” for “80 percent”.\nSubsec. (b)(3).  Pub. L. 105–34, §\u202f956(a)(2) , substituted “a substantial portion” for “substantially all”.\nSubsec. (b)(4).  Pub. L. 105–34, §\u202f956(a)(2) , (3), substituted “a substantial portion” for “substantially all” and struck out “,\u2000and exclusively related to,” after “entity is used in”.\nSubsec. (b)(5).  Pub. L. 105–34, §\u202f956(a)(2) , substituted “a substantial portion” for “substantially all”.\nSubsec. (c)(1).  Pub. L. 105–34, §\u202f956(a)(1) , substituted “50 percent” for “80 percent”.\nSubsec. (c)(2).  Pub. L. 105–34, §\u202f956(a)(2) , substituted “a substantial portion” for “substantially all”.\nSubsec. (c)(3).  Pub. L. 105–34, §\u202f956(a)(2) , (3), substituted “a substantial portion” for “substantially all” and struck out “,\u2000and exclusively related to,” after “business is used in”.\nSubsec. (c)(4).  Pub. L. 105–34, §\u202f956(a)(2) , substituted “a substantial portion” for “substantially all”.\nSubsec. (d)(2).  Pub. L. 105–34, §\u202f956(a)(4) , inserted concluding provisions.\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f956(a)(5) , substituted “at least 50 percent” for “substantially all”.\nSubsec. (f).  Pub. L. 105–34, §\u202f956(a)(6) , added subsec. (f).\n1996—Subsec. (d)(5)(B).  Pub. L. 104–188  struck out “preceding” before “taxable year” in introductory provisions.\nAmendment by  Pub. L. 106–170  applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after  Dec. 17, 1999 , see  section 532(d) of Pub. L. 106–170 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title IX, §\u202f956(b) ,  Aug. 5, 1997 ,  111 Stat. 891 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to taxable years beginning on or after the date of the enactment of this Act [ Aug. 5, 1997 ]. \n \n “(2)   Special rule for enterprise zone facility bonds .— For purposes of section 1394(b) of the Internal Revenue Code of 1986, the amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.”\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES'},
  'content': 'In the case of any property which is substantially renovated by the taxpayer, the requirements of subparagraphs (A) and (B) of paragraph (1) shall be treated as satisfied. For purposes of the preceding sentence, property shall be treated as substantially renovated by the taxpayer if, during any 24-month period beginning after the date on which the designation of the empowerment zone took effect, additions to basis with respect to such property in the hands of the taxpayer exceed the greater of (i) an amount equal to the adjusted basis at the beginning of such 24-month period in the hands of the taxpayer, or (ii) $5,000.\nFor purposes of subsection (a)(1)(B), if property is sold and leased back by the taxpayer within 3 months after the date such property was originally placed in service, such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback.\nA prior section 1397D was renumbered  section 1397F of this title .\n2000— Pub. L. 106–554  renumbered  section 1397C of this title  as this section.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'INCENTIVES FOR EDUCATION ZONES'},
  'content': 'Section, added  Pub. L. 105–34, title II, §\u202f226(a) ,  Aug. 5, 1997 ,  111 Stat. 821 ; amended  Pub. L. 105–206, title VI, §\u202f6004(g)(2) –(4),  July 22, 1998 ,  112 Stat. 796 ;  Pub. L. 106–78, title VII, §\u202f752(b)(11) ,  Oct. 22, 1999 ,  113 Stat. 1169 ;  Pub. L. 106–170, title V, §\u202f509 ,  Dec. 17, 1999 ,  113 Stat. 1924 ;  Pub. L. 107–110, title X, §\u202f1076(t) ,  Jan. 8, 2002 ,  115 Stat. 2092 ;  Pub. L. 107–147, title VI, §\u202f608(a) ,  Mar. 9, 2002 ,  116 Stat. 60 ;  Pub. L. 108–311, title III, §\u202f304(a) , title IV, §\u202f406(c),  Oct. 4, 2004 ,  118 Stat. 1179 , 1189;  Pub. L. 109–58, title XIII, §\u202f1303(c)(2) , (3),  Aug. 8, 2005 ,  119 Stat. 997 ;  Pub. L. 109–432, div. A, title I, §\u202f107(a) , (b)(1),  Dec. 20, 2006 ,  120 Stat. 2938 ;  Pub. L. 110–234, title XV, §\u202f15316(c)(2) ,  May 22, 2008 ,  122 Stat. 1511 ;  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15316(c)(2),  June 18, 2008 ,  122 Stat. 1664 , 2273;  Pub. L. 110–343, div. C, title III, §\u202f313(b)(3) ,  Oct. 3, 2008 ,  122 Stat. 3872 ;  Pub. L. 111–5, div. B, title I, §\u202f1531(c)(3) ,  Feb. 17, 2009 ,  123 Stat. 360 ;  Pub. L. 114–95, title IX, §\u202f9215(uu)(3) ,  Dec. 10, 2015 ,  129 Stat. 2183 , related to credit to holders of qualified zone academy bonds.\nRepeal applicable to bonds issued after  Dec. 31, 2017 , see  section 13404(d) of Pub. L. 115–97 , set out as a note under former  section 54 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': 'REGULATIONS'},
  'content': '1998— Pub. L. 105–206  amended directory language of  Pub. L. 105–34, §\u202f226(a) . See 1997 Amendment note below.\n1997— Pub. L. 105–34, §\u202f226(a) , as amended by  Pub. L. 105–206 , renumbered  section 1397D of this title  as this section.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Except as provided in subsection (b), this section shall apply to any case under chapter 7 (relating to liquidations) or chapter 11 (relating to reorganizations) of title 11 of the United States Code in which the debtor is an individual.\nThis section shall not apply if the case under chapter 7 or 11 of title 11 of the United States Code is dismissed.\nFor purposes of subsection (a), a partnership shall not be treated as an individual, but the interest in a partnership of a debtor who is an individual shall be taken into account under this section in the same manner as any other interest of the debtor.\nExcept as otherwise provided in this section, the taxable income of the estate shall be computed in the same manner as for an individual. The tax shall be computed on such taxable income and shall be paid by the trustee.\nThe tax on the taxable income of the estate shall be determined under subsection (d) of section 1.\nIn the case of an estate which does not itemize deductions, the basic standard deduction for the estate for the taxable year shall be the same as for a married individual filing a separate return for such year.\nExcept as provided in paragraph (2), the taxable year of the debtor shall be determined without regard to the case under title 11 of the United States Code to which this section applies.\nIn the case of a married individual (within the meaning of section 7703), the spouse may elect to have the debtor’s election under subparagraph (A) also apply to the spouse, but only if the debtor and the spouse file a joint return for the taxable year referred to in subparagraph (A)(i).\nNo election may be made under subparagraph (A) by a debtor who has no assets other than property which the debtor may treat as exempt property under  section 522 of title 11  of the United States Code.\nAn election under subparagraph (A) or (B) may be made only on or before the due date for filing the return for the taxable year referred to in subparagraph (A)(i). Any such election, once made, shall be irrevocable.\nA return shall be made for each of the taxable years specified in subparagraph (A).\nFor purposes of subsections (b), (c), and (d) of section 443, a return filed for either of the taxable years referred to in subparagraph (A) shall be treated as a return made under paragraph (1) of subsection (a) of section 443.\nFor purposes of this subsection, the term “commencement date” means the day on which the case under title 11 of the United States Code to which this section applies commences.\nThe gross income of the estate for each taxable year shall include the gross income of the debtor to which the estate is entitled under title 11 of the United States Code. The preceding sentence shall not apply to any amount received or accrued by the debtor before the commencement date (as defined in subsection (d)(3)).\nThe gross income of the debtor for any taxable year shall not include any item to the extent that such item is included in the gross income of the estate by reason of paragraph (1).\nA transfer (other than by sale or exchange) of an asset from the debtor to the estate shall not be treated as a disposition for purposes of any provision of this title assigning tax consequences to a disposition, and the estate shall be treated as the debtor would be treated with respect to such asset.\nIn the case of a termination of the estate, a transfer (other than by sale or exchange) of an asset from the estate to the debtor shall not be treated as a disposition for purposes of any provision of this title assigning tax consequences to a disposition, and the debtor shall be treated as the estate would be treated with respect to such asset.\nThe net operating loss carryovers determined under section 172.\nThe carryover of excess charitable contributions determined under section 170(d)(1).\nAny amount to which section 111 (relating to recovery of tax benefit items) applies.\nThe carryovers of any credit, and all other items which, but for the commencement of the case, would be required to be taken into account by the debtor with respect to any credit.\nThe capital loss carryover determined under section 1212.\nIn the case of any asset acquired (other than by sale or exchange) by the estate from the debtor, the basis, holding period, and character it had in the hands of the debtor.\nThe method of accounting used by the debtor.\nOther tax attributes of the debtor, to the extent provided in regulations prescribed by the Secretary as necessary or appropriate to carry out the purposes of this section.\nAny administrative expense allowed under  section 503 of title 11  of the United States Code, and any fee or charge assessed against the estate under chapter 123 of title 28 of the United States Code, to the extent not disallowed under any other provision of this title, shall be allowed as a deduction.\nThere shall be allowed as a deduction for the taxable year an amount equal to the aggregate of (i) the administrative expense carryovers to such year, plus (ii) the administrative expense carrybacks to such year.\nIf a net operating loss would be created or increased for any estate taxable year if section 172(c) were applied without the modification contained in paragraph (4) of section 172(d), then the amount of the net operating loss so created (or the amount of the increase in the net operating loss) shall be an administrative expense loss for such taxable year which shall be an administrative expense carryback to each of the 3 preceding taxable years and an administrative expense carryover to each of the 7 succeeding taxable years.\nThe portion of any administrative expense loss which may be carried to any other taxable year shall be determined under section 172(b)(2), except that for each taxable year the computation under section 172(b)(2) with respect to the net operating loss shall be made before the computation under this paragraph.\nThe deductions allowable under this chapter solely by reason of paragraph (1), and the deduction provided by subparagraph (A) of this paragraph, shall be allowable only to the estate.\nIn the case of a termination of an estate, the debtor shall succeed to and take into account the items referred to in paragraphs (1), (2), (3), (4), (5), and (6) of subsection (g) in a manner similar to that provided in such paragraphs (but taking into account that the transfer is from the estate to the debtor instead of from the debtor to the estate). In addition, the debtor shall succeed to and take into account the other tax attributes of the estate, to the extent provided in regulations prescribed by the Secretary as necessary or appropriate to carry out the purposes of this section.\nNotwithstanding section 442, the estate may change its annual accounting period one time without the approval of the Secretary.\nIf any carryback year of the estate is a taxable year before the estate’s first taxable year, the carryback to such carryback year shall be taken into account for the debtor’s taxable year corresponding to the carryback year.\nThe debtor may not carry back to a taxable year before the debtor’s taxable year in which the case commences any carryback from a taxable year ending after the case commences.\nThe term “carryback” means a net operating loss carryback under section 172 or a carryback of any credit provided by part IV of subchapter A.\nThe term “carryback year” means the taxable year to which a carryback is carried.\nPart IV of subchapter A, referred to in subsec. (j)(2)(C)(i), probably means part IV of subchapter A of chapter 1 of this title.\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f104(b)(14)(A) , substituted “basic standard deduction” for “zero bracket amount” in heading.\nSubsec. (c)(3).  Pub. L. 99–514, §\u202f104(b)(14)(B) , amended par. (3) generally, substituting “Basic standard deduction” for “Amount of zero bracket amount” in heading and substituting “In the case of an estate which does not itemize deductions, the basic standard deduction for the estate” for “The amount of the estate’s zero bracket amount” in text.\nSubsec. (d)(2)(B).  Pub. L. 99–514, §\u202f1301(j)(8) , substituted “section 7703” for “section 143”.\nSubsec. (g)(3).  Pub. L. 99–514, §\u202f1812(a)(5) , amended par. (3) generally. Prior to amendment, par. (3), recovery exclusion, read as follows: “Any recovery exclusion under section 111 (relating to recovery of bad debts, prior taxes, and delinquency amounts).”\nAmendment by  section 104(b)(14) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1301(j)(8) of Pub. L. 99–514  applicable to bonds issued after  Aug. 15, 1986 , except as otherwise provided, see sections 1311 to 1318 of  Pub. L. 99–514 , set out as an Effective Date; Transitional Rules note under  section 141 of this title .\nAmendment by  section 1812(a)(5) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nSubchapter applicable to bankruptcy cases commencing more than 90 days after  Dec. 24, 1980 , see  section 7(b) of Pub. L. 96–589 , set out as an Effective Date of 1980 Amendment note under  section 108 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Except in any case to which section 1398 applies, no separate taxable entity shall result from the commencement of a case under title 11 of the United States Code.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Section 1400, added  Pub. L. 105–34, title VII, §\u202f701(a) ,  Aug. 5, 1997 ,  111 Stat. 863 ; amended  Pub. L. 105–206, title VI, §\u202f6008(a) ,  July 22, 1998 ,  112 Stat. 811 ;  Pub. L. 106–554, §\u202f1(a)(7) [title I, §§\u202f113(c), 116(b)(5), 164(a)(1)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–601, 2763A–603, 2763A–625;  Pub. L. 108–311, title III, §\u202f310(a) ,  Oct. 4, 2004 ,  118 Stat. 1180 ;  Pub. L. 109–432, div. A, title I, §\u202f110(a)(1) ,  Dec. 20, 2006 ,  120 Stat. 2939 ;  Pub. L. 110–343, div. C, title III, §\u202f322(a)(1) ,  Oct. 3, 2008 ,  122 Stat. 3873 ;  Pub. L. 111–312, title VII, §\u202f754(a) ,  Dec. 17, 2010 ,  124 Stat. 3321 , related to establishment of DC Zone.\nSection 1400A, added  Pub. L. 105–34, title VII, §\u202f701(a) ,  Aug. 5, 1997 ,  111 Stat. 864 ; amended  Pub. L. 105–206, title VI, §\u202f6008(b) ,  July 22, 1998 ,  112 Stat. 811 ;  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f164(a)(2)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–625;  Pub. L. 108–311, title III, §\u202f310(b) ,  Oct. 4, 2004 ,  118 Stat. 1180 ;  Pub. L. 109–432, div. A, title I, §\u202f110(b)(1) ,  Dec. 20, 2006 ,  120 Stat. 2939 ;  Pub. L. 110–343, div. C, title III, §\u202f322(b)(1) ,  Oct. 3, 2008 ,  122 Stat. 3873 ;  Pub. L. 111–312, title VII, §\u202f754(b) ,  Dec. 17, 2010 ,  124 Stat. 3321 , related to tax-exempt economic development bonds.\nSection 1400B, added  Pub. L. 105–34, title VII, §\u202f701(a) ,  Aug. 5, 1997 ,  111 Stat. 864 ; amended  Pub. L. 105–206, title VI, §\u202f6008(c) ,  July 22, 1998 ,  112 Stat. 811 ;  Pub. L. 106–554, §\u202f1(a)(7) [title I, §§\u202f116(b)(5), 164(b)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–603, 2763A–625;  Pub. L. 108–311, title III, §\u202f310(c)(1) –(2)(B),  Oct. 4, 2004 ,  118 Stat. 1180 ;  Pub. L. 109–432, div. A, title I, §\u202f110(c)(1) –(2)(B),  Dec. 20, 2006 ,  120 Stat. 2940 ;  Pub. L. 110–343, div. C, title III, §\u202f322(c)(1) , (2)(A), (B),  Oct. 3, 2008 ,  122 Stat. 3874 ;  Pub. L. 111–312, title VII, §\u202f754(c) ,  Dec. 17, 2010 ,  124 Stat. 3321 , related to zero percent capital gains rate.\nSection 1400C, added  Pub. L. 105–34, title VII, §\u202f701(a) ,  Aug. 5, 1997 ,  111 Stat. 867 ; amended  Pub. L. 105–206, title VI, §\u202f6008(d)(1) –(5),  July 22, 1998 ,  112 Stat. 811 , 812;  Pub. L. 106–170, title V, §\u202f510 ,  Dec. 17, 1999 ,  113 Stat. 1924 ;  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f163] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–625;  Pub. L. 107–16, title II , §§\u202f201(b)(2)(H), 202(f)(2)(C), title VI, §\u202f618(b)(2)(E),  June 7, 2001 ,  115 Stat. 46 , 49, 108;  Pub. L. 107–147, title IV, §\u202f417(23)(B) ,  Mar. 9, 2002 ,  116 Stat. 57 ;  Pub. L. 108–311, title III, §\u202f310(d) ,  Oct. 4, 2004 ,  118 Stat. 1180 ;  Pub. L. 109–58, title XIII, §\u202f1335(b)(3) ,  Aug. 8, 2005 ,  119 Stat. 1036 ;  Pub. L. 109–135, title IV, §\u202f402(i)(3)(F) , (4),  Dec. 21, 2005 ,  119 Stat. 2614 , 2615;  Pub. L. 109–432, div. A, title I, §\u202f110(d)(1) ,  Dec. 20, 2006 ,  120 Stat. 2940 ;  Pub. L. 110–343, div. B, title II, §\u202f205(d)(1)(E) , div. C, title III, §\u202f322(d)(1),  Oct. 3, 2008 ,  122 Stat. 3839 , 3874;  Pub. L. 111–5, div. B, title I , §§\u202f1004(b)(6), 1006(d)(1), 1142(b)(1)(F), 1144(b)(1)(F),  Feb. 17, 2009 ,  123 Stat. 314 , 316, 330, 332;  Pub. L. 111–92, §\u202f11(i) ,  Nov. 6, 2009 ,  123 Stat. 2991 ;  Pub. L. 111–148, title X, §\u202f10909(b)(2)(M) , (c),  Mar. 23, 2010 ,  124 Stat. 1023 ;  Pub. L. 111–312, title I, §\u202f101(b)(1) , title VII, §\u202f754(d),  Dec. 17, 2010 ,  124 Stat. 3298 , 3322;  Pub. L. 112–240, title I, §\u202f104(c)(2)(L) ,  Jan. 2, 2013 ,  126 Stat. 2322 , related to first-time homebuyer credit for District of Columbia.\nPub. L. 115–141, div. U, title IV, §\u202f401(d)(4)(C) ,  Mar. 23, 2018 ,  132 Stat. 1209 , provided that:  \n “The amendments made by this paragraph [amending sections 23, 25, 45D, 1016, 1202, 1223, and 1397B of this title and repealing sections 1400 to 1400C of this title] shall not apply to— \n “(i)  in the case of the repeal of section 1400A of the Internal Revenue Code of 1986, obligations described in section 1394 of such Code (as in effect before its repeal) which were issued before  January 1, 2012 , \n \n “(ii)  in the case of the repeal of section 1400B of such Code, DC Zone assets (as defined in such section, as in effect before its repeal) which were acquired by the taxpayer before  January 1, 2012 , and \n \n “(iii)  in the case of the repeal of section 1400C of such Code, principal residences acquired before  January 1, 2012 .”\nFor provisions that nothing in repeal by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Section 1400E, added  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–589; amended  Pub. L. 108–357, title II, §\u202f222(a) ,  Oct. 22, 2004 ,  118 Stat. 1431 ;  Pub. L. 109–135, title IV, §\u202f412(rr)(1) ,  Dec. 21, 2005 ,  119 Stat. 2640 , related to designation of renewal communities.\nSection 1400F, added  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–594; amended  Pub. L. 108–311, title III, §\u202f310(c)(2)(C) ,  Oct. 4, 2004 ,  118 Stat. 1180 ;  Pub. L. 109–432, div. A, title I, §\u202f110(c)(2)(C) ,  Dec. 20, 2006 ,  120 Stat. 2940 ;  Pub. L. 110–343, div. C, title III, §\u202f322(c)(2)(C) ,  Oct. 3, 2008 ,  122 Stat. 3874 , related to renewal community capital gain.\nSection 1400G, added  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–596, related to renewal community business defined.\nSection 1400H, added  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–596, related to renewal community employment credit.\nSection 1400I, added  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–596, related to commercial revitalization deduction.\nSection 1400J, added  Pub. L. 106–554, §\u202f1(a)(7) [title I, §\u202f101(a)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–598, related to increase in expensing under section 179.\nPub. L. 115–141, div. U, title IV, §\u202f401(d)(5)(C) ,  Mar. 23, 2018 ,  132 Stat. 1210 , provided that:  \n “The amendments made by this paragraph [amending sections 469 and 1397B of this title and repealing sections 1400E to 1400J of this title], shall not apply to— \n “(i)  in the case of the repeal of section 1400F of the Internal Revenue Code of 1986, qualified community assets (as defined in such section, as in effect before its repeal) which were acquired by the taxpayer before  January 1, 2010 , \n \n “(ii)  in the case of the repeal section 1400H of such Code, wages paid or incurred before  January 1, 2010 , \n \n “(iii)  in the case of the repeal of section 1400I of such Code, qualified revitalization buildings (as defined in such section, as in effect before its repeal) which were placed in service before  January 1, 2010 , and \n \n “(iv)  in the case of the repeal of section 1400J of such Code, property acquired before  January 1, 2010 .”\nFor provisions that nothing in repeal by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Section 1400L, added  Pub. L. 107–147, title III, §\u202f301(a) ,  Mar. 9, 2002 ,  116 Stat. 33 ; amended  Pub. L. 108–27, title II, §\u202f201(c)(2) ,  May 28, 2003 ,  117 Stat. 757 ;  Pub. L. 108–311, title III, §\u202f309(a) –(c), title IV, §\u202f403(c),  Oct. 4, 2004 ,  118 Stat. 1179 , 1180, 1187;  Pub. L. 109–135, title IV , §§\u202f405(a)(2), 412(ss),  Dec. 21, 2005 ,  119 Stat. 2634 , 2640;  Pub. L. 110–185, title I, §\u202f103(c)(8) ,  Feb. 13, 2008 ,  122 Stat. 619 ;  Pub. L. 111–240, title II, §\u202f2022(b)(6) ,  Sept. 27, 2010 ,  124 Stat. 2558 ;  Pub. L. 111–312, title IV, §\u202f401(d)(6) , title VII, §\u202f761(a),  Dec. 17, 2010 ,  124 Stat. 3306 , 3323;  Pub. L. 112–240, title III , §§\u202f328(a), 331(e)(4),  Jan. 2, 2013 ,  126 Stat. 2334 , 2337;  Pub. L. 113–295, div. A, title I, §\u202f125(d)(4) ,  Dec. 19, 2014 ,  128 Stat. 4017 , related to tax benefits for New York Liberty Zone.\nSection 1400M, added  Pub. L. 109–135, title I, §\u202f101(a) ,  Dec. 21, 2005 ,  119 Stat. 2578 , related to definitions for part relating to tax benefits for GO Zones.\nSection 1400N, added  Pub. L. 109–135, title I, §\u202f101(a) ,  Dec. 21, 2005 ,  119 Stat. 2579 ; amended  Pub. L. 109–432, div. A, title I , §§\u202f107(b)(2), 120(a), (b),  Dec. 20, 2006 ,  120 Stat. 2939 , 2943;  Pub. L. 110–28, title VIII , §§\u202f8221–8223,  May 25, 2007 ,  121 Stat. 194 , 195;  Pub. L. 110–185, title I, §\u202f103(c)(9) , (10),  Feb. 13, 2008 ,  122 Stat. 619 ;  Pub. L. 110–234, title XV, §\u202f15316(c)(1) ,  May 22, 2008 ,  122 Stat. 1511 ;  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15316(c)(1),  June 18, 2008 ,  122 Stat. 1664 , 2273;  Pub. L. 110–289, div. C, title III, §\u202f3082(b)(1) , (c)(1),  July 30, 2008 ,  122 Stat. 2907 ;  Pub. L. 110–343, div. C, title III, §\u202f320(a) ,  Oct. 3, 2008 ,  122 Stat. 3873 ;  Pub. L. 111–5, div. B, title I , §§\u202f1201(a)(2)(E), 1531(c)(3),  Feb. 17, 2009 ,  123 Stat. 333 , 360;  Pub. L. 111–240, title II, §\u202f2022(b)(7) ,  Sept. 27, 2010 ,  124 Stat. 2558 ;  Pub. L. 111–312, title IV, §\u202f401(d)(7) , title VII, §§\u202f762(a), 763, 764(a), 765(a),  Dec. 17, 2010 ,  124 Stat. 3306 , 3323, 3324;  Pub. L. 112–240, title III, §\u202f331(e)(5) ,  Jan. 2, 2013 ,  126 Stat. 2337 ;  Pub. L. 113–295, div. A, title I, §\u202f125(d)(5) , title II, §\u202f220(q),  Dec. 19, 2014 ,  128 Stat. 4017 , 4036, related to tax benefits for Gulf Opportunity Zone.\nSection 1400O, added  Pub. L. 109–135, title I, §\u202f102(a) ,  Dec. 21, 2005 ,  119 Stat. 2594 ; amended  Pub. L. 110–172, §\u202f11(a)(26) ,  Dec. 29, 2007 ,  121 Stat. 2487 , related to education tax benefits.\nSection 1400P, added  Pub. L. 109–135, title I, §\u202f103(a) ,  Dec. 21, 2005 ,  119 Stat. 2594 , related to housing tax benefits.\nSection 1400Q, added  Pub. L. 109–135, title II, §\u202f201(a) ,  Dec. 21, 2005 ,  119 Stat. 2596 , related to special rules for use of retirement funds.\nSection 1400R, added  Pub. L. 109–135, title II, §\u202f201(a) ,  Dec. 21, 2005 ,  119 Stat. 2601 , related to employment relief.\nSection 1400S, added  Pub. L. 109–135, title II, §\u202f201(a) ,  Dec. 21, 2005 ,  119 Stat. 2604 ; amended  Pub. L. 110–172, §\u202f11(a)(14)(C) ,  Dec. 29, 2007 ,  121 Stat. 2485 , related to additional tax relief provisions.\nSection 1400T, added  Pub. L. 109–135, title II, §\u202f201(a) ,  Dec. 21, 2005 ,  119 Stat. 2607 , related to special rules for mortgage revenue bonds.\nSection 1400U–1, added  Pub. L. 111–5, div. B, title I, §\u202f1401(a) ,  Feb. 17, 2009 ,  123 Stat. 348 , related to allocation of recovery zone bonds.\nSection 1400U–2, added  Pub. L. 111–5, div. B, title I, §\u202f1401(a) ,  Feb. 17, 2009 ,  123 Stat. 349 , related to recovery zone economic development bonds.\nSection 1400U–3, added  Pub. L. 111–5, div. B, title I, §\u202f1401(a) ,  Feb. 17, 2009 ,  123 Stat. 350 , related to recovery zone facility bonds.\nPub. L. 115–141, div. U, title IV, §\u202f401(d)(6)(C) ,  Mar. 23, 2018 ,  132 Stat. 1211 , provided that:  \n “The amendments made by this paragraph [amending sections 38, 280C, 6033, and 6049 of this title and repealing sections 1400L to 1400U–3 of this title] shall not apply to— \n “(i)  in the case of the repeal of section 1400L(a) of the Internal Revenue Code of 1986, qualified wages (as defined in such section, as in effect before its repeal) which were paid or incurred before  January 1, 2004 , \n \n “(ii)  in the case of the repeal of subsections (b) and (f) of section 1400L of such Code, qualified New York Liberty Zone property (as defined in section 1400L(b) of such Code, as in effect before its repeal) placed in service before  January 1, 2010 , \n \n “(iii)  in the case of the repeal of section 1400L(c) of such Code, qualified New York Liberty Zone leasehold improvement property (as defined in such section, as in effect before its repeal) placed in service before  January 1, 2007 , \n \n “(iv)  in the case of the repeal of section 1400L(d) of such Code, qualified New York Liberty bonds (as defined in such section, as in effect before its repeal) issued before  January 1, 2014 , \n \n “(v)  in the case of the repeal of section 1400L(e) of such Code, advanced refundings before  January 1, 2006 , \n \n “(vi)  in the case of the repeal of section 1400L(g) of such Code, property which is compulsorily or involuntarily converted as a result of the terrorist attacks on  September 11, 2001 , \n \n “(vii)  in the case of the repeal of section 1400N(a) of such Code, obligations issued before  January 1, 2012 , \n \n “(viii)  in the case of the repeal of section 1400N(b) of such Code, advanced refundings before  January 1, 2011 , \n \n “(ix)  in the case of the repeal of section 1400N(d) of such Code, property placed in service before  January 1, 2012 , \n \n “(x)  in the case of the repeal of section 1400N(e) of such Code, property placed in service before  January 1, 2009 , \n \n “(xi)  in the case of the repeal of subsections (f) and (g) of section 1400N of such Code, amounts paid or incurred before  January 1, 2008 , \n \n “(xii)  in the case of the repeal of section 1400N(h) of such Code, amounts paid or incurred before  January 1, 2012 , \n \n “(xiii)  in the case of the repeal of section 1400N(k)(1)(B) of such Code, losses arising in taxable years beginning before  January 1, 2008 , \n \n “(xiv)  in the case of the repeal of section 1400N( l ) of such Code, bonds issued before  January 1, 2007 , \n \n “(xv)  in the case of the repeal of section 1400Q(a) of such Code, distributions before  January 1, 2007 , \n \n “(xvi)  in the case of the repeal of section 1400Q(b) of such Code, contributions before  March 1, 2006 , \n \n “(xvii)  in the case of the repeal of section 1400Q(c) of such Code, loans made before  January 1, 2007 , \n \n “(xviii)  in the case of the repeal of section 1400R of such Code, wages paid or incurred before  January 1, 2006 , \n \n “(xix)  in the case of the repeal of section 1400S(a) of such Code, contributions paid before  January 1, 2006 , \n \n “(xx)  in the case of the repeal of section 1400T of such Code, financing provided before  January 1, 2011 , and \n \n “(xxi)  in the case of the repeal of part III [§§\u202f1400U–1 to 1400U–3] of subchapter Y of chapter 1 of such Code, obligations issued before  January 1, 2011 .”\nFor provisions that nothing in repeal by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'For the purposes of this subchapter, the term “qualified opportunity zone” means a population census tract that is a low-income community that is designated as a qualified opportunity zone.\nA chief executive officer of a State may request that the Secretary extend either the determination or consideration period, or both (determined without regard to this subparagraph), 1 1 \u202fSo in original. Probably should be “paragraph),”.  for an additional 30 days.\nEach population census tract in Puerto Rico that is a low-income community shall be deemed to be certified and designated as a qualified opportunity zone, effective on the date of the enactment of  Public Law 115–97 .\nThe term “low-income community” has the same meaning as when used in section 45D(e).\nThe term “consideration period” means the 30-day period beginning on the date on which the Secretary receives notice under subsection (b)(1)(A)(ii), as extended under subsection (b)(2).\nThe term “determination period” means the 90-day period beginning on the date of the enactment of the Tax Cuts and Jobs Act, as extended under subsection (b)(2).\nFor purposes of this section, the term “State” includes any possession of the United States.\nExcept as provided by paragraph (2) and subsection (b)(3), the number of population census tracts in a State that may be designated as qualified opportunity zones under this section may not exceed 25 percent of the number of low-income communities in the State.\nIf the number of low-income communities in a State is less than 100, then a total of 25 of such tracts may be designated as qualified opportunity zones.\nNot more than 5 percent of the population census tracts designated in a State as a qualified opportunity zone may be designated under paragraph (1).\nA designation as a qualified opportunity zone shall remain in effect for the period beginning on the date of the designation and ending at the close of the 10th calendar year beginning on or after such date of designation.\nThe date of the enactment of  Public Law 115–97 , referred to in subsec. (b)(3), is  Dec. 22, 2017 .\nThe date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (c)(2)(B), probably means the date of enactment of title I of  Pub. L. 115–97 , which was approved  Dec. 22, 2017 . Prior versions of the bill that was enacted into law as  Pub. L. 115–97  included such Short Title, but it was not enacted as part of title I of  Pub. L. 115–97 .\n2018—Subsec. (b)(3).  Pub. L. 115–123, §\u202f41115(a) , added par. (3).\nSubsec. (d)(1).  Pub. L. 115–123, §\u202f41115(b) , inserted “and subsection (b)(3)” after “paragraph (2)”.\nSection effective on  Dec. 22, 2017 , see  section 13823(d) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 1016 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'NORMAL TAXES AND SURTAXES',
   'part': ''},
  'content': 'Except as otherwise provided in this clause or subsection (c), the taxpayer’s basis in the investment shall be zero.\nThe basis in the investment shall be increased by the amount of gain recognized by reason of subsection (a)(1)(B) with respect to such property.\nIn the case of any investment held for at least 5 years, the basis of such investment shall be increased by an amount equal to 10 percent of the amount of gain deferred by reason of subsection (a)(1)(A).\nIn the case of any investment held by the taxpayer for at least 7 years, in addition to any adjustment made under clause (iii), the basis of such property shall be increased by an amount equal to 5 percent of the amount of gain deferred by reason of subsection (a)(1)(A).\nIn the case of any investment held by the taxpayer for at least 10 years and with respect to which the taxpayer makes an election under this clause, the basis of such property shall be equal to the fair market value of such investment on the date that the investment is sold or exchanged.\nA rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph.\nFor purposes of subparagraph (A)(ii), property shall be treated as substantially improved by the qualified opportunity fund only if, during any 30-month period beginning after the date of acquisition of such property, additions to basis with respect to such property in the hands of the qualified opportunity fund exceed an amount equal to the adjusted basis of such property at the beginning of such 30-month period in the hands of the qualified opportunity fund.\nFor purposes of subparagraph (A)(i), the related person rule of section 179(d)(2) shall be applied pursuant to paragraph (8) of this subsection\u202f 1 1 \u202fSo in original. This subsection does not contain a paragraph (8).  in lieu of the application of such rule in section 179(d)(2)(A).\nFor purposes of this section, persons are related to each other if such persons are described in section 267(b) or 707(b)(1), determined by substituting “20 percent” for “50 percent” each place it occurs in such sections.\nIn the case of a decedent, amounts recognized under this section shall, if not properly includible in the gross income of the decedent, be includible in gross income as provided by section 691.\nIn the case that the qualified opportunity fund is a partnership, the penalty imposed by paragraph (1) shall be taken into account proportionately as part of the distributive share of each partner of the partnership.\nNo penalty shall be imposed under this subsection with respect to any failure if it is shown that such failure is due to reasonable cause.\nSection effective on  Dec. 22, 2017 , see  section 13823(d) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 1016 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAX ON SELF-EMPLOYMENT INCOME',
   'part': ''},
  'content': 'In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax equal to 12.4 percent of the amount of the self-employment income for such taxable year.\nIn addition to the tax imposed by the preceding subsection, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax equal to 2.9 percent of the amount of the self-employment income for such taxable year.\nThe amounts under clause (i), (ii), or (iii) (whichever is applicable) of subparagraph (A) shall be reduced (but not below zero) by the amount of wages taken into account in determining the tax imposed under section 3121(b)(2) with respect to the taxpayer.\nDuring any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, the self-employment income of an individual shall be exempt from the taxes imposed by this section to the extent that such self-employment income is subject under such agreement exclusively to the laws applicable to the social security system of such foreign country.\nSection 233 of the Social Security Act, referred to in subsec. (c), is classified to  section 433 of Title 42 , The Public Health and Welfare.\n2014—Subsec. (a).  Pub. L. 113–295, §\u202f221(a)(89) , substituted “12.4 percent of the amount of the self-employment income for such taxable year.” for “the following percent of the amount of the self-employment income for such taxable year:\nSubsec. (b)(1).  Pub. L. 113–295, §\u202f221(a)(90) , substituted “2.9 percent of the amount of the self-employment income for such taxable year.” for “the following percent of the amount of the self-employment income for such taxable year:\n2010—Subsec. (b).  Pub. L. 111–148, §\u202f9015(b)(1) , designated existing provisions as par. (1), inserted heading, and added par. (2).\nSubsec. (b)(2)(A).  Pub. L. 111–152, §\u202f1402(b)(1)(B)(i) , added cl. (ii) and redesignated former cl. (ii) as (iii).\nPub. L. 111–148, §\u202f10906(b) , substituted “0.9 percent” for “0.5 percent” in introductory provisions.\nSubsec. (b)(2)(B).  Pub. L. 111–152, §\u202f1402(b)(1)(B)(ii) , substituted “under clause (i), (ii), or (iii) (whichever is applicable)” for “under clauses (i) and (ii)”.\n2004—Subsec. (c).  Pub. L. 108–203  substituted “exclusively to the laws applicable to” for “to taxes or contributions for similar purposes under”.\n1990—Subsecs. (c), (d).  Pub. L. 101–508  redesignated subsec. (d) as (c) and struck out former subsec. (c) which provided a credit against self-employment taxes imposed by this section.\n1983—Subsec. (a).  Pub. L. 98–21, §\u202f124(a) , amended subsec. (a) generally, substituting a table for former pars. (1) to (7) which had imposed a tax on the self-employment income of every individual (1) in the case of any taxable year beginning before  Jan. 1, 1978 , to be equal to 7.0 percent of the amount of the self-employment income for such taxable year; (2) in the case of any taxable year beginning after  Dec. 31, 1977 , and before  Jan. 1, 1979 , to be equal to 7.10 percent of the amount of the self-employment income for such taxable year; (3) in the case of any taxable year beginning after  Dec. 31, 1978 , and before  Jan. 1, 1981 , to be equal to 7.05 percent of the amount of the self-employment income for such taxable year; (4) in the case of any taxable year beginning after  Dec. 31, 1980 , and before  Jan. 1, 1982 , to be equal to 8.00 percent of the amount of the self-employment income for such taxable year; (5) in the case of any taxable year beginning after  Dec. 31, 1981 , and before  Jan. 1, 1985 , to be equal to 8.05 percent of the amount of the self-employment income for such taxable year; (6) in the case of any taxable year beginning after  Dec. 31, 1984 , and before  Jan. 1, 1990 , to be equal to 8.55 percent of the amount of the self-employment income for such taxable year; and (7) in the case of any taxable year beginning after  Dec. 31, 1989 , to be equal to 9.30 percent of the amount of the self-employment income for such taxable year.\nSubsec. (b).  Pub. L. 98–21, §\u202f124(a) , amended subsec. (b) generally, substituting a table for former pars. (1) to (6) which had imposed a tax on the self-employment income of every individual (1) in the case of any taxable year beginning after  Dec. 31, 1973 , and before  Jan. 1, 1978 , to be equal to 0.90 percent of the amount of the self-employment income for such taxable year; (2) in the case of any taxable year beginning after  Dec. 31, 1977 , and before  Jan. 1, 1979 , to be equal to 1.00 percent of the amount of the self-employment income for such taxable year; (3) in the case of any taxable year beginning after  Dec. 31, 1978 , and before  Jan. 1, 1981 , to be equal to 1.05 percent of the amount of the self-employment income for such taxable year; (4) in the case of any taxable year beginning after  Dec. 31, 1980 , and before  Jan. 1, 1985 , to be equal to 1.30 percent of the amount of the self-employment income for such taxable year; (5) in the case of any taxable year beginning after  Dec. 31, 1984 , and before  Jan. 1, 1986 , to be equal to 1.35 percent of the amount of the self-employment income for such taxable year; and (6) in the case of any taxable year beginning after  Dec. 31, 1985 , to be equal to 1.45 percent of the amount of the self-employment income for such taxable year.\nSubsecs. (c), (d).  Pub. L. 98–21, §\u202f124(b) , added subsec. (c) and redesignated former subsec. (c) as (d).\n1977—Subsec. (a).  Pub. L. 95–216, §\u202f101(a)(3) , substituted provisions calling for a graduated increase in the tax from 7.0 percent for taxable years beginning before  Jan. 1, 1978 , to 9.30 percent for taxable years beginning after  Dec. 31, 1989 , for provisions under which the tax had been set at 7.0 percent without any increase in the rate in future years.\nSubsec. (b).  Pub. L. 95–216, §\u202f101(b)(3) , substituted “after  December 31, 1977 , and before  January 1, 1979 ” for “after  December 31, 1977 , and before  January 1, 1981 ” and “1.00 percent” for “1.10 percent” in par. (2), substituted “after  December 31, 1978 , and before  January 1, 1981 ” for “after  December 31, 1980 , and before  January 1, 1986 ” and “1.05 percent” for “1.35 percent” in par. (3), substituted “after  December 31, 1980 , and before  January 1, 1985 ” for “after  December 31, 1985 ” and “1.30 percent” for “1.50 percent” in par. (4), and added pars. (5) and (6).\nSubsec. (c).  Pub. L. 95–216, §\u202f317(b)(1) , added subsec. (c).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1901(a)(154)(A) , among other changes, substituted provisions relating to a uniform tax rate of 7 percent on self-employment income of every individual for provisions relating to varied tax rate of 5.8 percent of the amount of self-employment income for any taxable year beginning after  Dec. 31, 1967 , and before  Jan. 1, 1969 , 6.3 percent for any taxable year beginning after  Dec. 31, 1968 , and before  Jan. 1, 1971 , 6.9 percent for any taxable year beginning after  Dec. 31, 1970 , and before  Jan. 1, 1973 , and 7.0 percent for any taxable year beginning after  Dec. 31, 1972 .\nSubsec. (b).  Pub. L. 94–455, §\u202f1901(a)(154)(B) , redesignated pars. (3) to (6) as (1) to (4). Former pars. (1) and (2), which related to a 6 percent tax rate on self-employment income for any taxable year beginning after  Dec. 31, 1967 , and before  Jan. 1, 1974 , and 1 percent tax rate on self-employment income for any taxable year beginning after  Dec. 31, 1972 , and before  Jan. 1, 1974 , were struck out.\n1973—Subsec. (b)(2).  Pub. L. 93–233  substituted “1974” for “1978”.\nSubsec. (b)(3).  Pub. L. 93–233  substituted “1973” and “1978” for “1977” and “1981” and decreased the rate of tax from 1.25 percent to 0.90 percent.\nSubsec. (b)(4).  Pub. L. 93–233  substituted “1977” and “1981” for “1980” and “1986” and decreased the rate of tax from 1.35 percent to 1.10 percent.\nSubsec. (b)(5).  Pub. L. 93–233  substituted “beginning after  December 31, 1980 , and before  January 1, 1986 ” for “beginning after  December 31, 1985 ” and decreased the rate of tax from 1.45 percent to 1.35 percent.\nSubsec. (b)(6).  Pub. L. 93–233  added par. (6).\n1972—Subsec. (a)(3).  Pub. L. 92–603, §\u202f135(a)(1)(A) , substituted “1973” for “1978”.\nSubsec. (a)(4).  Pub. L. 92–603, §\u202f135(a)(1)(B) , substituted provisions that in the case of taxable years beginning after  Dec. 31, 1972 , the tax shall be equal to 7.0 percent of the amount of the self-employment income for such taxable year, for provisions that in the case of taxable years beginning after  Dec. 31, 1977 , and before  Jan. 1, 2011 , the tax shall be equal to 6.7 percent of the amount of the self-employment income for such taxable year.\nSubsec. (a)(5).  Pub. L. 92–603, §\u202f135(a)(1)(B) , struck out par. (5) which provided that in the case of taxable years beginning after  Dec. 31, 2010 , the tax shall be equal to 7.0 percent of the amount of the self-employment income for the taxable year.\nSubsec. (a)(3) to (5).  Pub. L. 92–336, §\u202f204(a)(1) , substituted “ January 1, 1978 ” for “ January 1, 1973 ” and struck out “and” after “such taxable year” in par. (3), extended from any taxable year beginning after  December 31, 1972  to any taxable year beginning after  December 31, 1977 , and before  January 1, 2011 , and decreased from 7.0 percent to 6.7 percent the provisions relating to the tax on self-employment income in par. (4), and added par. (5).\nSubsec. (b)(2).  Pub. L. 92–603, §\u202f135(b)(1) , increased the rate of tax from 0.9 percent to 1.0 percent.\nSubsec. (b)(3).  Pub. L. 92–603, §\u202f135(b)(1) , substituted “1981” for “1986” and “1.25” for “1.0”.\nSubsec. (b)(4).  Pub. L. 92–603, §\u202f135(b)(1) , substituted “1980” for “1985”, “1986” for “1993”, and “1.35” for “1.1”.\nSubsec. (b)(5).  Pub. L. 92–603, §\u202f135(b)(1) , substituted “1985” for “1992” and “1.45” for “1.2”.\nSubsec. (b)(2) to (5).  Pub. L. 92–336, §\u202f204(b)(1) , substituted “1978” for “1976” and “0.9” for “0.65” in subsec. (b)(2), “1977” for “1975”, “1986” for “1980” and “1.0” for “0.70” in par. (3), “1985” for “1979”, “1993” for “1987” and “1.1” for “0.80” in par. (4), and “1992” for “1986” and “1.2” for “0.90” in par. (5).\n1968—Subsecs. (a)(1) to (4).  Pub. L. 90–248, §\u202f109(a)(1) , substituted “ December 31, 1967 ” and “ January 1, 1969 ” for “ December 31, 1965 ” and “ January 1, 1967 ” in par. (1), “ December 31, 1968 ”, “ January 1, 1971 ” and “6.3” for “ December 31, 1966 ”, “ January 1, 1969 ”, and “5.9” in par. (2), and “ December 31, 1970 ” and “6.9” for “ December 31, 1968 ” and “6.6” in par. (3), and reenacted par. (4) without change.\nSubsec. (b)(1) to (5).  Pub. L. 90–248, §\u202f109(b)(1) , struck out par. (1) provision for rate of 0.35 percent of amount of self-employment income for any taxable year beginning after  Dec. 31, 1965 , and before  Jan. 1, 1967 , redesignated former pars. (2) to (6) as (1) to (5), substituted “ December 31, 1967 ” for “ December 31, 1966 ” in such par. (1) and increased the rate by 0.10 percent to 0.60, 0.65, 0.70, 0.80, and 0.90 in pars. (1) to (5), respectively.\n1965— Pub. L. 89–97, §\u202f321(a) , divided the total tax imposed under the entire section for each taxable year upon the self-employment income for such taxable year into two separate taxes by dividing the section into subsecs. (a) and (b), with subsec. (a) reflecting the tax for old-age, survivors, and disability insurance and subsec. (b) reflecting a separate tax for hospital insurance; reduced from 6.2 percent to 6.15 percent the rate of total tax imposed under the entire section for taxable years beginning after  Dec. 31, 1965 , and before  Jan. 1, 1967  (resulting from a tax of 5.8 percent under subsec. (a) and 0.35 percent under subsec. (b)), increased from 6.2 percent to 6.4 percent the rate for taxable years beginning after  Dec. 31, 1966 , and before  Jan. 1, 1968  (resulting from a tax of 5.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), reduced from 6.9 percent to 6.4 percent the rate for taxable years beginning after  Dec. 31, 1967 , and before  Jan. 1, 1969  (resulting from a tax of 5.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 6.9 percent to 7.1 percent the rate for taxable years beginning after  Dec. 31, 1968 , and before  Jan. 1, 1973  (resulting from a tax of 6.6 percent under subsec. (a) and 0.50 percent under subsec. (b)), from 6.9 percent to 7.55 percent the rate for taxable years beginning after  Dec. 31, 1972 , and before  Jan. 1, 1976  (resulting from a tax of 7.0 percent under subsec. (a) and 0.55 percent under subsec. (b)), from 6.9 percent to 7.60 percent the rate for taxable years beginning after  Dec. 31, 1975 , and before  Jan. 1, 1980  (resulting from a tax of 7.0 percent under subsec. (a) and 0.60 percent under subsec. (b)), from 6.9 percent to 7.70 percent the rate for taxable years beginning after  Dec. 31, 1979 , and before  Jan. 1, 1987  (resulting from a tax of 7.0 percent under subsec. (a) and 0.70 percent under subsec. (b)), and from 6.9 percent to 7.80 percent the rate for taxable years beginning after  Dec. 31, 1986  (resulting from a tax of 7.0 percent under subsec. (a) and 0.80 percent under subsec. (b)), and provided that the exclusion of employee representatives by section 1402(c)(3) should not apply for purposes of the tax imposed by subsec. (b).\nSubsec. (b).  Pub. L. 89–97, §\u202f111(c)(4) , struck out provision that for purposes of the tax imposed by this subsection, the exclusion of employee representatives by section 1402(c)(3) shall not apply.\n1961— Pub. L. 87–64  increased the rate of tax for taxable years beginning after  Dec. 31, 1961 , and before  Jan. 1, 1963 , from 4½ to 4.7 percent, taxable years beginning after  Dec. 31, 1962 , and before  Jan. 1, 1966 , from 5¼ to 5.4 percent, taxable years beginning after  Dec. 31, 1965 , and before  Jan. 1, 1968 , from 6 to 6.2 percent, taxable year beginning after  Dec. 31, 1967 , and before  Jan. 1, 1969 , from 6 to 6.9 percent, and taxable years beginning after  Dec. 31, 1968 , from 6¾ to 6.9 percent.\n1958— Pub. L. 85–840  increased the rate of tax by substituting provisions imposing a tax of 3¾ percent for taxable years beginning after  Dec. 31, 1958 , 4½ percent for years beginning after  Dec. 31, 1959 , 5¼ percent for years beginning after  Dec. 31, 1962 , 6 percent for years beginning after  Dec. 31, 1965 , and 6¾ percent for years beginning after  Dec. 31, 1968 , for provisions which imposed a tax of 3⅜ percent for taxable years beginning after  Dec. 31, 1956 , 4⅛ percent for years beginning after  Dec. 31, 1959 , 4⅞ percent for years beginning after  Dec. 31, 1964 , 5⅝ percent for years beginning after  Dec. 31, 1969 , and 6⅜ percent for years beginning after  Dec. 31, 1974 .\n1956—Act  Aug. 1, 1956 , increased the rate of tax for all taxable years beginning after  Dec. 31, 1956 , by three-eighths percent.\n1954—Act  Sept. 1, 1954 , increased the 4⅞ percent rate of tax on self-employment income for taxable years beginning after  Dec. 31, 1969 , to 5¼ percent for taxable years beginning after  Dec. 31, 1969 , and before  Jan. 1, 1975 , and 6 percent for taxable years beginning after  Dec. 31, 1974 .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 111–152, title I, §\u202f1402(b)(3) ,  Mar. 30, 2010 ,  124 Stat. 1063 , provided that:  “The amendments made by this subsection [amending this section and sections 3101 and 6654 of this title] shall apply with respect to remuneration received, and taxable years beginning after,  December 31, 2012 .”\nAmendment by  section 9015(b)(1) of Pub. L. 111–148  applicable with respect to remuneration received, and taxable years beginning, after  Dec. 31, 2012 , see  section 9015(c) of Pub. L. 111–148 , set out as a note under  section 164 of this title .\nPub. L. 111–148, title X, §\u202f10906(c) ,  Mar. 23, 2010 ,  124 Stat. 1020 , provided that:  “The amendments made by this section [amending this section and  section 3101 of this title ] shall apply with respect to remuneration received, and taxable years beginning, after  December 31, 2012 .”\nPub. L. 98–21, title I, §\u202f124(d) ,  Apr. 20, 1983 ,  97 Stat. 91 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section, sections 32, 164, 275, 401, and 1402 of this title, and  section 411 of Title 42 , The Public Health and Welfare] shall apply to taxable years beginning after  December 31, 1983 . \n \n “(2)   Subsection  (c).— The amendments made by subsection (c) [amending sections 32, 164, 275, 401, and 1402 of this title and  section 411 of Title 42 ] shall apply to taxable years beginning after  December 31, 1989 .”\nPub. L. 95–216, title I, §\u202f104 ,  Dec. 20, 1977 ,  91 Stat. 1514 , provided that:  “The amendments made by this title [amending this section, sections 3101 and 3111 of this title, and sections 401, 415, and 430 of Title 42, The Public Health and Welfare] shall apply with respect to remuneration paid or received, and taxable years beginning, after 1977.”\nAmendment by  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see section 1901(d) set out as a note under  section 2 of this title .\nPub. L. 93–233, §\u202f6(c) ,  Dec. 31, 1973 ,  87 Stat. 955 , provided that:  “The amendment made by subsection (b)(1) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1973 . The remaining amendments made by this section [amending sections 3101 and 3111 of this title] shall apply only with respect to remuneration paid after  December 31, 1973 .”\nPub. L. 92–603, title I, §\u202f135(c) ,  Oct. 30, 1972 ,  86 Stat. 1364 , provided that:  “The amendments made by subsections (a)(1) and (b)(1) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1972 . The remaining amendments made by this section [amending sections 3101 and 3111 of this title] shall apply only with respect to remuneration paid after  December 31, 1972 .”\nPub. L. 92–336, title II, §\u202f204(c) ,  Oct. 30, 1972 ,  86 Stat. 1377 , provided that:  “The amendments made by subsections (a)(1) and (b)(1) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1972 . The remaining amendments made by this section [amending sections 3101 and 3111 of this title] shall apply only with respect to remuneration paid after  December 31, 1972 .”\nPub. L. 90–248, title I, §\u202f109(c) ,  Jan. 2, 1968 ,  81 Stat. 837 , provided that:  “The amendments made by subsections (a)(1) and (b)(1) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1967 . The remaining amendments made by this section [amending sections 3101 and 3111 of this title] shall apply only with respect to remuneration paid after  December 31, 1967 .”\nAmendment by  section 111(c)(4) of Pub. L. 89–97  applicable to calendar year 1966 or to any subsequent calendar year but only if by October 1 immediately preceding such calendar year the Railroad Retirement Tax Act [section 3201 et seq. of this title] provides for a maximum amount of monthly compensation taxable under such Act during all months of such calendar year equal to one-twelfth of maximum wages which Federal Insurance Contributions Act [section 3101 et seq. of this title] provides may be counted for such calendar year, see  section 111(e) of Pub. L. 89–97 , set out as an Effective Date note under  section 1395i–1 of Title 42 , The Public Health and Welfare.\nPub. L. 89–97, title III, §\u202f321(d) ,  July 30, 1965 ,  79 Stat. 396 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1965 . The amendments made by subsections (b) and (c) [amending sections 3101 and 3111 of this title] shall apply only with respect to remuneration paid after  December 31, 1965 .”\nPub. L. 87–64, title II, §\u202f201(d) ,  June 30, 1961 ,  75 Stat. 141 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1961 . The amendments made by subsections (b) and (c) [amending sections 3101 and 3111 of this title] shall apply with respect to remuneration paid after  December 31, 1961 .”\nPub. L. 85–840, title IV, §\u202f401(d) ,  Aug. 28, 1958 ,  72 Stat. 1042 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1958 . The amendments made by subsections (b) and (c) [amending sections 3101 and 3111 of this title] shall apply with respect to remuneration paid after  December 31, 1958 .”\nAct Aug. 1, 1956, ch. 836, title II, §\u202f202(d) ,  70 Stat. 846 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1956 . The amendments made by subsections (b) and (c) [amending sections 3101 and 3111 of this title] shall apply with respect to remuneration paid after  December 31, 1956 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 117–2, title IX, §\u202f9642 ,  Mar. 11, 2021 ,  135 Stat. 171 , provided that: \n “(a)   In General .— In the case of an eligible self-employed individual, there shall be allowed as a credit against the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for any taxable year an amount equal to the qualified sick leave equivalent amount with respect to the individual. \n \n “(b)   Eligible Self-employed Individual .— For purposes of this section— “(1)   In general .— The term ‘eligible self-employed individual’ means an individual who— “(A)  regularly carries on any trade or business within the meaning of section 1402 of the Internal Revenue Code of 1986, and \n \n “(B)  would be entitled to receive paid leave during the taxable year pursuant to the Emergency Paid Sick Leave Act [div. E (§\u202f5101 et seq.) of  Pub. L. 116–127 ,  29 U.S.C. 2601  note] if— “(i)  the individual were an employee of an employer (other than himself or herself), and \n \n “(ii)  such Act applied after  March 31, 2021 . \n \n \n \n “(2)   Rules of application .— For purposes of paragraph (1)(B), in determining whether an individual would be entitled to receive paid leave under the Emergency Paid Sick Leave Act, such Act shall be applied— “(A)  by inserting ‘, the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID–19 and such employee has been exposed to COVID–19 or is unable to work pending the results of such test or diagnosis, or the employee is obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization’ after ‘medical diagnosis’ in section 5102(a)(3) of such Act, and \n \n “(B)  by applying section 5102(b)(1) of such Act separately with respect to each taxable year. \n \n \n \n “(c)   Qualified Sick Leave Equivalent Amount .— For purposes of this section— “(1)   In general .— The term ‘qualified sick leave equivalent amount’ means, with respect to any eligible self-employed individual, an amount equal to— “(A)  the number of days during the taxable year (but not more than 10) that the individual is unable to perform services in any trade or business referred to in section 1402 of the Internal Revenue Code of 1986 for a reason with respect to which such individual would be entitled to receive sick leave as described in subsection (b), multiplied by \n \n “(B)  the lesser of— “(i)  $200 ($511 in the case of any day of paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act, applied with the modification described in subsection (b)(2)(A)) of this section, or \n \n “(ii)  67 percent (100 percent in the case of any day of paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act ) of the average daily self-employment income of the individual for the taxable year. \n \n \n \n “(2)   Average daily self-employment income .— For purposes of this subsection, the term ‘average daily self-employment income’ means an amount equal to— “(A)  the net earnings from self-employment of the individual for the taxable year, divided by \n \n “(B)  260. \n \n \n “(3)   Election to use prior year net earnings from self-employment income .— In the case of an individual who elects (at such time and in such manner as the Secretary may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting ‘the prior taxable year’ for ‘the taxable year’. \n \n “(4)   Election to not take days into account .— Any day shall not be taken into account under paragraph (1)(A) if the eligible self-employed individual elects (at such time and in such manner as the Secretary may prescribe) to not take such day into account for purposes of such paragraph. \n \n \n “(d)   Credit Refundable.— “(1)   In general .— The credit determined under this section shall be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of such Code. \n \n “(2)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, any refund due from the credit determined under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(e)   Special Rules.— “(1)   Documentation .— No credit shall be allowed under this section unless the individual maintains such documentation as the Secretary may prescribe to establish such individual as an eligible self-employed individual. \n \n “(2)   Denial of double benefit .— In the case of an individual who receives wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of such Code) paid by an employer which are required to be paid by reason of the Emergency Paid Sick Leave Act, the qualified sick leave equivalent amount otherwise determined under subsection (c) of this section shall be reduced (but not below zero) to the extent that the sum of the amount described in such subsection and in section 3131(b)(1) of such Code exceeds $2,000 ($5,110 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act). \n \n \n “(f)   Application of Section .— Only days occurring during the period beginning on  April 1, 2021 , and ending on  September 30, 2021 , may be taken into account under subsection (c)(1)(A). \n \n “(g)   Application of Credit in Certain Possessions.— “(1)   Payments to possessions with mirror code tax systems .— The Secretary shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession. \n \n “(2)   Payments to other possessions .— The Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents. \n \n “(3)   Mirror code tax system .— For purposes of this section, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(4)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(h)   Regulations .— The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— “(1)  regulations or other guidance to effectuate the purposes of this section, and \n \n “(2)  regulations or other guidance to minimize compliance and record-keeping burdens under this section.”\nPub. L. 116–127, div. G, §\u202f7002 ,  Mar. 18, 2020 ,  134 Stat. 212 , as amended by  Pub. L. 116–260, div. N, title II , §§\u202f286(a), (b)(2), 287(a),  Dec. 27, 2020 ,  134 Stat. 1989–1991 , provided that: \n “(a)   Credit Against Self-Employment Tax .— In the case of an eligible self-employed individual, there shall be allowed as a credit against the tax imposed by subtitle A of the Internal Revenue Code of 1986 for any taxable year an amount equal to the qualified sick leave equivalent amount with respect to the individual. \n \n “(b)   Eligible Self-Employed Individual .— For purposes of this section, the term ‘eligible self-employed individual’ means an individual who— “(1)  regularly carries on any trade or business within the meaning of section 1402 of such Code, and \n \n “(2)  either— “(A)  would be entitled to receive paid leave during the taxable year pursuant to the Emergency Paid Sick Leave Act [div. E (§\u202f5101 et seq.) of  Pub. L. 116–127 ,  29 U.S.C. 2601  note] if the individual were an employee of an employer (other than himself or herself), or \n \n “(B)  would be so entitled if— “(i)  such Act were applied by substituting ‘ March 31, 2021 ’ for ‘ December 31, 2020 ’ in section 5109 thereof, and \n \n “(ii)  the individual were an employee of an employer (other than himself or herself). \n \n \n \n \n “(c)   Qualified Sick Leave Equivalent Amount .— For purposes of this section— “(1)   In general .— The term ‘qualified sick leave equivalent amount’ means, with respect to any eligible self-employed individual, an amount equal to— “(A)  the number of days during the taxable year (but not more than the applicable number of days) that the individual is unable to perform services in any trade or business referred to in section 1402 of such Code for a reason with respect to which such individual would be entitled to receive sick leave as described in subsection (b), multiplied by \n \n “(B)  the lesser of— “(i)  $200 ($511 in the case of any day of paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act [ 29 U.S.C. 2601  note]), or \n \n “(ii)  67 percent (100 percent in the case of any day of paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act) of the average daily self-employment income of the individual for the taxable year. \n \n \n \n “(2)   Average daily self-employment income .— For purposes of this subsection, the term ‘average daily self-employment income’ means an amount equal to— “(A)  the net earnings from self-employment of the individual for the taxable year, divided by \n \n “(B)  260. \n \n \n “(3)   Applicable number of days .— For purposes of this subsection, the term ‘applicable number of days’ means, with respect to any taxable year, the excess (if any) of 10 days over the number of days taken into account under paragraph (1)(A) in all preceding taxable years. \n \n “(4)   Election to use prior year net earnings from self-employment income .— In the case of an individual who elects (at such time and in such manner as the Secretary, or the Secretary’s delegate, may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting ‘the prior taxable year’ for ‘the taxable year’. \n \n \n “(d)   Special Rules.— “(1)   Credit refundable.— “(A)   In general .— The credit determined under this section shall be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of such Code. \n \n “(B)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, any refund due from the credit determined under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(2)   Documentation .— No credit shall be allowed under this section unless the individual maintains such documentation as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe to establish such individual as an eligible self-employed individual. \n \n “(3)   Denial of double benefit .— In the case of an individual who receives wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of the Internal Revenue Code [of 1986]) paid by an employer which are required to be paid by reason of the Emergency Paid Sick Leave Act, the qualified sick leave equivalent amount otherwise determined under subsection (c) shall be reduced (but not below zero) to the extent that the sum of the amount described in such subsection and in section 7001(b)(1) [ 26 U.S.C. 3111  note] exceeds $2,000 ($5,110 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act). \n \n “(4)   Certain terms .— Any term used in this section which is also used in chapter 2 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter. \n \n \n “(e)   Application of Section .— Only days occurring during the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act [ Mar. 18, 2020 ], and ending on  March 31, 2021 , may be taken into account under subsection (c)(1)(A). \n \n “(f)   Application of Credit in Certain Possessions.— “(1)   Payments to possessions with mirror code tax systems .— The Secretary of the Treasury (or the Secretary’s delegate) shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section. Such amounts shall be determined by the Secretary of the Treasury (or the Secretary’s delegate) based on information provided by the government of the respective possession. \n \n “(2)   Payments to other possessions .— The Secretary of the Treasury (or the Secretary’s delegate) shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury (or the Secretary’s delegate) as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury (or the Secretary’s delegate), under which such possession will promptly distribute such payments to its residents. \n \n “(3)   Mirror code tax system .— For purposes of this section, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(4)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(g)   Regulations .— The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— “(1)  regulations or other guidance to effectuate the purposes of this Act [div. G of  Pub. L. 116–127 , enacting provisions set out as notes under this section and  section 3111 of this title ], and \n \n “(2)  regulations or other guidance to minimize compliance and record-keeping burdens under this section.”\n[ Pub. L. 116–260, div. N, title II, §\u202f286(c) ,  Dec. 27, 2020 ,  134 Stat. 1991 , provided that:  “The amendments made by this section [amending  section 7002 of Pub. L. 116–127 , set out above,  section 7004 of Pub. L. 116–127 , set out below, and sections 7001, 7003, and 7005 of  Pub. L. 116–127 , set out as notes under  section 3111 of this title ] shall take effect as if included in the provisions of the Families First Coronavirus Response Act [ Pub. L. 116–127 ] to which they relate.” \n]\n[ Pub. L. 116–260, div. N, title II, §\u202f287(c) ,  Dec. 27, 2020 ,  134 Stat. 1991 , provided that:  “The amendments made by this section [amending  section 7002 of Pub. L. 116–127 , set out above, and  section 7004 of Pub. L. 116–127 , set out below] shall take effect as if included in the provisions of the Families First Coronavirus Response Act [ Pub. L. 116–127 ] to which they relate.” \n]\nPub. L. 117–2, title IX, §\u202f9643 ,  Mar. 11, 2021 ,  135 Stat. 174 , provided that: \n “(a)   In General .— In the case of an eligible self-employed individual, there shall be allowed as a credit against the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for any taxable year an amount equal to 100 percent of the qualified family leave equivalent amount with respect to the individual. \n \n “(b)   Eligible Self-employed Individual .— For purposes of this section— “(1)   In general .— The term ‘eligible self-employed individual’ means an individual who— “(A)  regularly carries on any trade or business within the meaning of section 1402 of the Internal Revenue Code of 1986, and \n \n “(B)  would be entitled to receive paid leave during the taxable year pursuant to the Emergency Family and Medical Leave Expansion Act [div. C of  Pub. L. 116–127 , see Short Title of 2020 Amendment note set out under  section 2601 of Title 29 , Labor] if— “(i)  the individual were an employee of an employer (other than himself or herself), \n \n “(ii)  section 102(a)(1)(F) of the Family and Medical Leave Act of 1993 [ 29 U.S.C. 2612(a)(1)(F) ] applied after  March 31, 2021 . \n \n \n \n “(2)   Rules of application .— For purposes of paragraph (1)(B), in determining whether an individual would be entitled to receive paid leave under the Emergency Family and Medical Leave Act— “(A)  section 110(a)(2)(A) of the Family and Medical Leave Act of 1993 [ 29 U.S.C. 2620(a)(2)(A) ] shall be applied by inserting ‘or any reason for leave described in section 5102(a) of the Families First Coronavirus Response Act, or the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID–19 and such employee has been exposed to COVID–19 or is unable to work pending the results of such test or diagnosis, or the employee is obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization’ after ‘public health emergency’, and \n \n “(B)  section 110(b) of such Act shall be applied— “(i)  without regard to paragraph (1) thereof, and \n \n “(ii)  by striking ‘after taking leave after such section for 10 days’ in paragraph (2)(A) thereof. \n \n \n \n \n “(c)   Qualified Family Leave Equivalent Amount .— For purposes of this section— “(1)   In general .— The term ‘qualified family leave equivalent amount’ means, with respect to any eligible self-employed individual, an amount equal to the product of— “(A)  the number of days (not to exceed 60) during the taxable year that the individual is unable to perform services in any trade or business referred to in section 1402 of the Internal Revenue Code of 1986 for a reason with respect to which such individual would be entitled to receive paid leave as described in subsection (b) of this section, multiplied by \n \n “(B)  the lesser of— “(i)  67 percent of the average daily self-employment income of the individual for the taxable year, or \n \n “(ii)  $200. \n \n \n \n “(2)   Average daily self-employment income .— For purposes of this subsection, the term ‘average daily self-employment income’ means an amount equal to— “(A)  the net earnings from self-employment income of the individual for the taxable year, divided by \n \n “(B)  260. \n \n \n “(3)   Election to use prior year net earnings from self-employment income .— In the case of an individual who elects (at such time and in such manner as the Secretary may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting ‘the prior taxable year’ for ‘the taxable year’. \n \n “(4)   Coordination with credit for sick leave .— Any day taken into account in determining the qualified sick leave equivalent amount with respect to any eligible-self employed individual under section 9642 [set out above] shall not be take [sic] into account in determining the qualified family leave equivalent amount with respect to such individual under this section. \n \n \n “(d)   Credit Refundable.— “(1)   In general .— The credit determined under this section shall be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of such Code. \n \n “(2)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, any refund due from the credit determined under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(e)   Special Rules.— “(1)   Documentation .— No credit shall be allowed under this section unless the individual maintains such documentation as the Secretary may prescribe to establish such individual as an eligible self-employed individual. \n \n “(2)   Denial of double benefit .— In the case of an individual who receives wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of such Code) paid by an employer which are required to be paid by reason of the Emergency Family and Medical Leave Expansion Act, the qualified family leave equivalent amount otherwise described in subsection (c) of this section shall be reduced (but not below zero) to the extent that the sum of the amount described in such subsection and in section 3132(b)(1) of such Code exceeds $12,000. \n \n “(3)   References to emergency family and medical leave expansion act .— Any reference in this section to the Emergency Family and Medical Leave Expansion Act shall be treated as including a reference to the amendments made by such Act. \n \n \n “(f)   Application of Section .— Only days occurring during the period beginning on  April 1, 2021  and ending on  September 30, 2021 , may be taken into account under subsection (c)(1)(A). \n \n “(g)   Application of Credit in Certain Possessions.— “(1)   Payments to possessions with mirror code tax systems .— The Secretary shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession. \n \n “(2)   Payments to other possessions .— The Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents. \n \n “(3)   Mirror code tax system .— For purposes of this section, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(4)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(h)   Regulations .— The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— “(1)  regulations or other guidance to prevent the avoidance of the purposes of this section, and \n \n “(2)  regulations or other guidance to minimize compliance and record-keeping burdens under this section.”\nPub. L. 116–127, div. G, §\u202f7004 ,  Mar. 18, 2020 ,  134 Stat. 217 , as amended by  Pub. L. 116–260, div. N, title II , §§\u202f286(a), (b)(4), 287(b),  Dec. 27, 2020 ,  134 Stat. 1989 , 1991, provided that: \n “(a)   Credit Against Self-Employment Tax .— In the case of an eligible self-employed individual, there shall be allowed as a credit against the tax imposed by subtitle A of the Internal Revenue Code of 1986 for any taxable year an amount equal to 100 percent of the qualified family leave equivalent amount with respect to the individual. \n \n “(b)   Eligible Self-Employed Individual .— For purposes of this section, the term ‘eligible self-employed individual’ means an individual who— “(1)  regularly carries on any trade or business within the meaning of section 1402 of such Code, and \n \n “(2)  either— “(A)  would be entitled to receive paid leave during the taxable year pursuant to the Emergency Family and Medical Leave Expansion Act [div. C of  Pub. L. 116–127 , see Short Title of 2020 Amendment note set out under  section 2601 of Title 29 , Labor] if the individual were an employee of an employer (other than himself or herself), or \n \n “(B)  would be so entitled if— “(i)  section 102(a)(1)(F) of the Family and Medical Leave Act of 1993 [ 29 U.S.C. 2612(a)(1)(F) ], as amended by the Emergency Family and Medical Leave Expansion Act, were applied by substituting ‘ March 31, 2021 ’ for ‘ December 31, 2020 ’, and \n \n “(ii)  the individual were an employee of an employer (other than himself or herself). \n \n \n \n \n “(c)   Qualified Family Leave Equivalent Amount .— For purposes of this section— “(1)   In general .— The term ‘qualified family leave equivalent amount’ means, with respect to any eligible self-employed individual, an amount equal to the product of— “(A)  the number of days (not to exceed 50) during the taxable year that the individual is unable to perform services in any trade or business referred to in section 1402 of such Code for a reason with respect to which such individual would be entitled to receive paid leave as described in subsection (b), multiplied by \n \n “(B)  the lesser of— “(i)  67 percent of the average daily self-employment income of the individual for the taxable year, or \n \n “(ii)  $200. \n \n \n \n “(2)   Average daily self-employment income .— For purposes of this subsection, the term ‘average daily self-employment income’ means an amount equal to— “(A)  the net earnings from self-employment income of the individual for the taxable year, divided by \n \n “(B)  260. \n \n \n “(4) [(3)]   Election to use prior year net earnings from self-employment income .— In the case of an individual who elects (at such time and in such manner as the Secretary, or the Secretary’s delegate, may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting ‘the prior taxable year’ for ‘the taxable year’. \n \n \n “(d)   Special Rules.— “(1)   Credit refundable.— “(A)   In general .— The credit determined under this section shall be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of such Code. \n \n “(B)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, any refund due from the credit determined under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(2)   Documentation .— No credit shall be allowed under this section unless the individual maintains such documentation as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe to establish such individual as an eligible self-employed individual. \n \n “(3)   Denial of double benefit .— In the case of an individual who receives wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of the Internal Revenue Code [of 1986]) paid by an employer which are required to be paid by reason of the Emergency Family and Medical Leave Expansion Act, the qualified family leave equivalent amount otherwise described in subsection (c) shall be reduced (but not below zero) to the extent that the sum of the amount described in such subsection and in section 7003(b)(1) [ 26 U.S.C. 3111  note] exceeds $10,000. \n \n “(4)   Certain terms .— Any term used in this section which is also used in chapter 2 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter. \n \n “(5)   References to emergency family and medical leave expansion act .— Any reference in this section to the Emergency Family and Medical Leave Expansion Act shall be treated as including a reference to the amendments made by such Act. \n \n \n “(e)   Application of Section .— Only days occurring during the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act [ Mar. 18, 2020 ], and ending on  March 31, 2021 , may be taken into account under subsection (c)(1)(A). \n \n “(f)   Application of Credit in Certain Possessions.— “(1)   Payments to possessions with mirror code tax systems .— The Secretary of the Treasury (or the Secretary’s delegate) shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section. Such amounts shall be determined by the Secretary of the Treasury (or the Secretary’s delegate) based on information provided by the government of the respective possession. \n \n “(2)   Payments to other possessions .— The Secretary of the Treasury (or the Secretary’s delegate) shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury (or the Secretary’s delegate) as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury (or the Secretary’s delegate), under which such possession will promptly distribute such payments to its residents. \n \n “(3)   Mirror code tax system .— For purposes of this section, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. \n \n “(4)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n “(e)   Regulations .— The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— “(1)  regulations or other guidance to prevent the avoidance of the purposes of this Act [div. G of  Pub. L. 116–127 , enacting provisions set out as notes under this section and  section 3111 of this title ], and \n \n “(2)  regulations or other guidance to minimize compliance and record-keeping burdens under this section.”\nPub. L. 111–312, title VI, §\u202f601 ,  Dec. 17, 2010 ,  124 Stat. 3309 , as amended by  Pub. L. 112–78, title I, §\u202f101(a) –(d),  Dec. 23, 2011 ,  125 Stat. 1281 , 1282;  Pub. L. 112–96, title I, §\u202f1001(a) , (b),  Feb. 22, 2012 ,  126 Stat. 158 , provided that: \n “(a)   In General .— Notwithstanding any other provision of law— “(1)  with respect to any taxable year which begins in the payroll tax holiday period, the rate of tax under section 1401(a) of the Internal Revenue Code of 1986 shall be 10.40 percent, and \n \n “(2)  with respect to remuneration received during the payroll tax holiday period, the rate of tax under 3101(a) of such Code shall be 4.2 percent (including for purposes of determining the applicable percentage under sections 3201(a) and 3211(a)(1) [probably means 3211(a)] of such Code). \n \n \n “(b)   Coordination With Deductions for Employment Taxes.— “(1)   Deduction in computing net earnings from self-employment .— For purposes of applying section 1402(a)(12) of the Internal Revenue Code of 1986, the rate of tax imposed by subsection 1401(a) of such Code shall be determined without regard to the reduction in such rate under this section. \n \n “(2)   Individual deduction .— In the case of the taxes imposed by section 1401 of such Code for any taxable year which begins in the payroll tax holiday period, the deduction under section 164(f) of such Code with respect to such taxes shall be equal to the sum of— “(A)  59.6 percent of the portion of such taxes attributable to the tax imposed by section 1401(a) of such Code (determined after the application of this section), plus \n \n “(B)  one-half of the portion of such taxes attributable to the tax imposed by section 1401(b) of such Code. \n \n \n \n “(c)   Payroll Tax Holiday Period .— The term ‘payroll tax holiday period’ means calendar years 2011 and 2012. \n \n “(d)   Employer Notification .— The Secretary of the Treasury shall notify employers of the payroll tax holiday period in any manner the Secretary deems appropriate. \n \n “(e)   Transfers of Funds.— “(1)   Transfers to federal old-age and survivors insurance trust fund .— There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) amounts equal to the reduction in revenues to the Treasury by reason of the application of subsection (a). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted. \n \n “(2)   Transfers to social security equivalent benefit account .— There are hereby appropriated to the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) ) amounts equal to the reduction in revenues to the Treasury by reason of the application of subsection (a)(2). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Account had such amendments not been enacted. \n \n “(3)   Coordination with other federal laws .— For purposes of applying any provision of Federal law other than the provisions of the Internal Revenue Code of 1986, the rate of tax in effect under section 3101(a) of such Code shall be determined without regard to the reduction in such rate under this section.”\n[ Pub. L. 112–96, title I, §\u202f1001(c) ,  Feb. 22, 2012 ,  126 Stat. 159 , provided that:  “The amendments made by this section [amending  section 601 of Pub. L. 111–312 , set out above] shall apply to remuneration received, and taxable years beginning, after  December 31, 2011 .” \n]\n[ Pub. L. 112–78, title I, §\u202f101(e) ,  Dec. 23, 2011 ,  125 Stat. 1282 , provided that:\n[“(1)  In general .—Except as provided in paragraph (2), the amendments made by this section [amending  section 601 of Pub. L. 111–312 , set out above] shall apply to remuneration received, and taxable years beginning, after  December 31, 2011 .\n[“(2)  Technical amendments .—The amendments made by subsection (d) [amending  section 601(b)(2) of Pub. L. 111–312 , set out above] shall take effect as if included in the enactment of section 601 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 [ Pub. L. 111–312 ].”]\nLand diverted from production of agricultural commodities under a 1983 payment-in-kind program to be treated, for purposes of this chapter, as used during the 1983 crop year by qualified taxpayers in the active conduct of the trade or business of farming, with qualified taxpayers who materially participate in the diversion and devotion to conservation uses under a 1983 payment-in-kind program to be treated as materially participating in the operation of such land during the 1983 crop year, see  section 3 of Pub. L. 98–4 , set out as a note under  section 61 of this title .\nPub. L. 95–216, title III, §\u202f317(b)(4) ,  Dec. 20, 1977 ,  91 Stat. 1540 , provided that:  “Notwithstanding any other provision of law, taxes paid by any individual to any foreign country with respect to any period of employment or self-employment which is covered under the social security system of such foreign country in accordance with the terms of an agreement entered into pursuant to section 233 of the Social Security Act [ section 433 of Title 42 , The Public Health and Welfare] shall not, under the income tax laws of the United States, be deductible by, or creditable against the income tax of, any such individual.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAX ON SELF-EMPLOYMENT INCOME',
   'part': ''},
  'content': 'The term “employee” and the term “wages” shall have the same meaning as when used in chapter 21 (sec. 3101 and following, relating to Federal Insurance Contributions Act).\nSubject to paragraph (2), any individual who is (A) a duly ordained, commissioned, or licensed minister of a church or a member of a religious order (other than a member of a religious order who has taken a vow of poverty as a member of such order) or (B) a Christian Science practitioner, upon filing an application (in such form and manner, and with such official, as may be prescribed by regulations made under this chapter) together with a statement that either he is conscientiously opposed to, or because of religious principles he is opposed to, the acceptance (with respect to services performed by him as such minister, member, or practitioner) of any public insurance which makes payments in the event of death, disability, old age, or retirement or makes payments toward the cost of, or provides services for, medical care (including the benefits of any insurance system established by the Social Security Act) and, in the case of an individual described in subparagraph (A), that he has informed the ordaining, commissioning, or licensing body of the church or order that he is opposed to such insurance, shall receive an exemption from the tax imposed by this chapter with respect to services performed by him as such minister, member, or practitioner. Notwithstanding the preceding sentence, an exemption may not be granted to an individual under this subsection if he had filed an effective waiver certificate under this section as it was in effect before its amendment in 1967.\nThe Secretary may approve an application for an exemption filed pursuant to paragraph (1) only if the Secretary has verified that the individual applying for the exemption is aware of the grounds on which the individual may receive an exemption pursuant to this subsection and that the individual seeks exemption on such grounds. The Secretary (or the Commissioner of Social Security under an agreement with the Secretary) shall make such verification by such means as prescribed in regulations.\nAny individual who desires to file an application pursuant to paragraph (1) must file such application on or before the due date of the return (including any extension thereof) for the second taxable year for which he has net earnings from self-employment (computed without regard to subsections (c)(4) and (c)(5)) of $400 or more, any part of which was derived from the performance of service described in subsection (c)(4) or (c)(5).\nAn exemption received by an individual pursuant to this subsection shall be effective for the first taxable year for which he has net earnings from self-employment (computed without regard to subsections (c)(4) and (c)(5)) of $400 or more, any part of which was derived from the performance of service described in subsection (c)(4) or (c)(5), and for all succeeding taxable years. An exemption received pursuant to this subsection shall be irrevocable.\nThis subsection shall apply with respect to services which are described in subparagraph (B) of section 3121(b)(8) (and are not described in subparagraph (A) of such section).\nAn individual shall be deemed to be self-employed on a regular basis in a taxable year, or to be a member of a partnership on a regular basis in such year, if he had net earnings from self-employment, as defined in the first sentence of subsection (a), of not less than $400 in at least two of the three consecutive taxable years immediately preceding such taxable year from trades or businesses carried on by such individual or such partnership.\nNotwithstanding subsection (a)(3)(A), in determining the net earnings from self-employment of any options dealer or commodities dealer, there shall not be excluded any gain or loss (in the normal course of the taxpayer’s activity of dealing in or trading section 1256 contracts) from section 1256 contracts or property related to such contracts.\nThe term “options dealer” has the meaning given such term by section 1256(g)(8).\nThe term “commodities dealer” means a person who is actively engaged in trading section 1256 contracts and is registered with a domestic board of trade which is designated as a contract market by the Commodities Futures Trading Commission.\nThe term “section 1256 contract” has the meaning given to such term by section 1256(b).\nIn applying paragraph (2) of subsection (b) to church employee income, “$100” shall be substituted for “$400”.\nParagraph (1) shall not apply to any amount allowable as a deduction under subsection (a)(12), and paragraph (1) shall be applied before determining the amount so allowable.\nFor purposes of this section, the term “church employee income” means gross income for services which are described in section 3121(b)(8)(B) (and are not described in section 3121(b)(8)(A)).\nThe lower limit for any taxable year is the sum of the amounts required under section 213(d) of the Social Security Act for a quarter of coverage in effect with respect to each calendar quarter ending with or within such taxable year.\nThe upper limit for any taxable year is the amount equal to 150 percent of the lower limit for such taxable year.\nThe Social Security Act, referred to in subsecs. (a)(1), (b), (c)(1), (2)(E), (e)(1), (g)(1), and ( l )(1), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 , which is classified generally to chapter 7 (§\u202f301 et seq.) of Title 42, The Public Health and Welfare. Titles II and XVIII of the Act are classified generally to subchapters II (§\u202f401 et seq.) and XVIII (§\u202f1395 et seq.) of Title 42. Sections 202, 203, 213, 218, 222, 223, 230, and 233 of the Act are classified to sections 402, 403, 413, 418, 422, 423, 430, and 433, respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 199, referred to in subsec. (a)(16), was repealed by  Pub. L. 115–97, title I, §\u202f13305(a) ,  Dec. 22, 2017 ,  131 Stat. 2126 .\nThe Federal Insurance Contributions Act, referred to in subsec. (d), is  act Aug. 16, 1954, ch. 736 ,  68A Stat. 415 , which is classified generally to chapter 21 (§\u202f3101 et seq.) of this title. For complete classification of this Act to the Code, see  section 3128 of this title  and Tables.\nPub. L. 110–234  and  Pub. L. 110–246  made identical amendments to this section. The amendments by  Pub. L. 110–234  were repealed by  section 4(a) of Pub. L. 110–246 .\n2018—Subsec. (a)(1).  Pub. L. 115–141, §\u202f401(a)(197) , substituted “section 1233(a)(2)” for “section 1233(2)” and “ 16 U.S.C. 3833(a)(2) ” for “ 16 U.S.C. 3833(2) ”.\nSubsec. (b).  Pub. L. 115–141, §\u202f401(a)(198) , substituted “3211.” for “3211,.” in concluding provisions.\n2014—Subsec. (e)(3).  Pub. L. 113–295  struck out “whichever of the following dates is later: (A)” after “before” and “;\u2000or (B) the due date of the return (including any extension thereof) for his second taxable year ending after 1967” after “or (c)(5)”. Amendment was executed to reflect the probable intent of Congress notwithstanding an extra closing quotation mark in the directory language.\n2010—Subsec. (a)(12)(B).  Pub. L. 111–148  inserted “(determined without regard to the rate imposed under paragraph (2) of section 1401(b))” after “for such year”.\n2008—Subsec. (a).  Pub. L. 110–246, §\u202f15352(a)(1) , in concluding provisions, substituted “the upper limit” for “$2,400” wherever appearing and “the lower limit” for “$1,600” wherever appearing.\nSubsec. (a)(1).  Pub. L. 110–246, §\u202f15301(a) , inserted “,\u2000and including payments under section 1233(2) of the Food Security Act of 1985 ( 16 U.S.C. 3833(2) ) to individuals receiving benefits under section 202 or 223 of the Social Security Act” after “crop shares”.\nSubsec. ( l ).  Pub. L. 110–246, §\u202f15352(a)(2) , added subsec. ( l ).\n2007—Subsec. (a)(17).  Pub. L. 110–28  added par. (17).\n2004—Subsec. (a)(5)(A).  Pub. L. 108–203  substituted “the gross income and deductions attributable to such trade or business shall be treated as the gross income and deductions of the spouse carrying on such trade or business or, if such trade or business is jointly operated, treated as the gross income and deductions of each spouse on the basis of their respective distributive share of the gross income and deductions; and” for “all of the gross income and deductions attributable to such trade or business shall be treated as the gross income and deductions of the husband unless the wife exercises substantially all of the management and control of such trade or business, in which case all of such gross income and deductions shall be treated as the gross income and deductions of the wife; and”.\nSubsec. (a)(16).  Pub. L. 108–357  added par. (16).\n1997—Subsec. (k).  Pub. L. 105–34  added subsec. (k).\n1996—Subsec. (a)(8).  Pub. L. 104–188  inserted before semicolon at end “,\u2000but shall not include in such net earnings from self-employment the rental value of any parsonage or any parsonage allowance (whether or not excludable under section 107) provided after the individual retires, or any other retirement benefit received by such individual from a church plan (as defined in section 414(e)) after the individual retires”.\n1994—Subsec. (c)(1).  Pub. L. 103–296, §\u202f108(h)(1) , substituted “Commissioner of Social Security” for “Secretary of Health and Human Services”.\nSubsec. (c)(2)(C).  Pub. L. 103–296, §\u202f319(a)(4) , inserted at end “except service which constitutes ‘employment’ under section 3121(y),”.\nSubsecs. (c)(2)(E), (e)(2), (g)(1), (2)(A), (B).  Pub. L. 103–296, §\u202f108(h)(1) , substituted “Commissioner of Social Security” for “Secretary of Health and Human Services”.\n1993—Subsec. (b).  Pub. L. 103–66, §\u202f13207(b)(1)(C) , (D), in concluding provisions, inserted “and” after “section 3121(b),” and struck out “and (C) includes, but only with respect to the tax imposed by section 1401(b), remuneration paid for medicare qualified government employment (as defined in section 3121(u)(3)) which is subject to the taxes imposed by sections 3101(b) and 3111(b)” after “section 3201 or 3211,”.\nSubsec. (b)(1).  Pub. L. 103–66, §\u202f13207(b)(1)(A) , (B), substituted “in the case of the tax imposed by section 1401(a), that part of the net” for “that part of the net” and “contribution and benefit base (as determined under section 230 of the Social Security Act)” for “applicable contribution base (as determined under subsection (k))”.\nSubsec. (k).  Pub. L. 103–66, §\u202f13207(b)(2) , struck out subsec. (k) which defined parameters of the applicable contribution base under this chapter.\n1990—Subsec. (a).  Pub. L. 101–508, §\u202f5123(a)(3) , struck out last undesignated par. which read as follows: “Any income of an individual which results from or is attributable to the performance of services by such individual as a director of a corporation during any taxable year shall be deemed to have been derived (and received) by such individual in that year, at the time the services were performed, regardless of when the income is actually paid to or received by such individual (unless it was actually paid and received prior to that year).”\nSubsec. (b).  Pub. L. 101–508, §\u202f5130(a)(2) , amended directory language of  Pub. L. 98–21, §\u202f322(b)(2) . See 1983 Amendment note below.\nSubsec. (b)(1)(i).  Pub. L. 101–508, §\u202f11331(b)(1) , substituted “the applicable contribution base (as determined under subsection (k))” for “the contribution and benefit base (as determined under section 230 of the Social Security Act)”.\nSubsec. (k).  Pub. L. 101–508, §\u202f11331(b)(2) , added subsec. (k).\n1989—Subsec. (g)(3).  Pub. L. 101–239  substituted “to apply” for “not to apply” in heading and “shall apply” for “shall not apply” in text.\n1988—Subsec. (a)(15).  Pub. L. 100–647, §\u202f3043(c)(1) , added par. (15).\nSubsec. (g)(2) to (5).  Pub. L. 100–647, §\u202f8007(c) , struck out par. (2) which related to time for filing applications, struck out par. (4) which related to application by fiduciaries or survivors, and redesignated pars. (3) and (5) as (2) and (3), respectively.\n1987—Subsec. (a).  Pub. L. 100–203  inserted par. at end relating to income of an individual which results from or is attributable to the performance of services by such individual as a director of a corporation.\n1986—Subsec. (a)(8).  Pub. L. 99–514, §\u202f1272(d)(8) , inserted “and” after “of the employer),” and struck out “and section 931 (relating to income from sources within possessions of the United States)” after “living abroad)”.\nSubsec. (a)(9).  Pub. L. 99–514, §\u202f1272(d)(9) , amended par. (9) generally. Prior to amendment, par. (9) read as follows: “the term ‘possession of the United States’ as used in sections 931 (relating to income from sources within possessions of the United States) and 932 (relating to citizens of possessions of the United States) shall be deemed not to include the Virgin Islands, Guam, or American Samoa;”.\nSubsec. (a)(14).  Pub. L. 99–514, §\u202f1882(b)(1)(B)(i) , amended par. (14) generally. Prior to amendment, par. (14) read as follows: “with respect to remuneration for services which are treated as services in a trade or business under subsection (c)(2)(G)—\n“(A) no deduction for trade or business expenses provided under this Code (other than the deduction under paragraph (12)) shall apply;\n“(B) the provisions of subsection (b)(2) shall not apply; and\n“(C) if the amount of such remuneration from an employer for the taxable year is less than $100, such remuneration from that employer shall not be included in self-employment income.”\nSubsec. (b).  Pub. L. 99–514, §\u202f1882(b)(1)(B)(ii) , (iii), substituted “paragraph” for “clause” in second sentence and inserted at end “In the case of church employee income, the special rules of subsection (j)(2) shall apply for purposes of paragraph (2).”\nPub. L. 99–509  struck out “under an agreement entered into pursuant to the provisions of section 218 of the Social Security Act (relating to coverage of State employees), or” after “services included” in second sentence.\nPub. L. 99–272  substituted “medicare qualified government employment (as defined in section 3121(u)(3))” for “medicare qualified Federal employment (as defined in section 3121(u)(2))”.\nSubsec. (c)(2)(G).  Pub. L. 99–514, §\u202f1883(a)(11)(A) , realigned margin of subpar. (G).\nSubsec. (e)(1).  Pub. L. 99–514, §\u202f1704(a)(1) , (2)(A), substituted “Subject to paragraph (2), any individual” for “Any individual” and inserted “and, in the case of an individual described in subparagraph (A), that he has informed the ordaining, commissioning, or licensing body of the church or order that he is opposed to such insurance”.\nSubsec. (e)(2) to (4).  Pub. L. 99–514, §\u202f1704(a)(2)(B) , (C), added par. (2) and redesignated former pars. (2) and (3) as (3) and (4), respectively.\nSubsec. (g)(5).  Pub. L. 99–514, §\u202f1882(a) , added par. (5).\nSubsec. (i)(1).  Pub. L. 99–514, §\u202f301(b)(12) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “In determining the net earnings from self-employment of any options dealer or commodities dealer—\n“(A) notwithstanding subsection (a)(3)(A), there shall not be excluded any gain or loss (in the normal course of the taxpayer’s activity of dealing in or trading section 1256 contracts) from section 1256 contracts or property related to such contracts, and\n“(B) the deduction provided by section 1202 shall not apply.”\nSubsec. (j).  Pub. L. 99–514, §\u202f1882(b)(1)(A) , added subsec. (j).\n1984—Subsec. (a)(14).  Pub. L. 98–369, §\u202f2603(d)(2) , added par. (14).\nSubsec. (c)(1), (2)(E).  Pub. L. 98–369, §\u202f2663(j)(5)(B) , substituted “Secretary of Health and Human Services” for “Secretary of Health, Education, and Welfare”.\nSubsec. (c)(2)(G).  Pub. L. 98–369, §\u202f2603(c)(2) , added subpar. (G).\nSubsec. (g)(1), (3)(A), (B).  Pub. L. 98–369, §\u202f2663(j)(5)(B) , substituted “Secretary of Health and Human Services” for “Secretary of Health, Education, and Welfare”.\nSubsec. (i).  Pub. L. 98–369, §\u202f102(c)(1) , added subsec. (i).\n1983—Subsec. (a)(11).  Pub. L. 98–21, §\u202f323(b)(1) , struck out “in the case of an individual described in section 911(d)(1)(B),” before “the exclusion”.\nSubsec. (a)(12), (13).  Pub. L. 98–21, §\u202f124(c)(2) , added par. (12) and redesignated former par. (12) as (13).\nSubsec. (b).  Pub. L. 98–21, §\u202f322(b)(2) , as amended by  Pub. L. 101–508, §\u202f5130(a)(2) , inserted “,\u2000except as provided by an agreement under section 233 of the Social Security Act” in text preceding par. (1).\nPub. L. 98–21, §\u202f321(e)(3) , substituted “employees of foreign affiliates of American employers” for “employees of foreign subsidiaries of domestic corporations” in cl. (A) of provisions following par. (2).\n1982—Subsec. (b).  Pub. L. 97–248  struck out “and” before “(B)” and inserted “,\u2000and (C) includes, but only with respect to the tax imposed by section 1401(b), remuneration paid for medicare qualified Federal employment (as defined in section 3121(u)(2)) which is subject to the taxes imposed by sections 3101(b) and 3111(b)”.\n1981—Subsec. (a)(8).  Pub. L. 97–34, §\u202f111(b)(3) , substituted “relating to citizens or residents of the United States living abroad” for “relating to income earned by employees in certain camps”.\nSubsec. (a)(11).  Pub. L. 97–34, §\u202f111(b)(5) , substituted “in the case of an individual described in section 911(d)(1)(B), the exclusion from gross income provided by section 911(a)(1) shall not apply” for “in the case of an individual who has been a resident of the United States during the entire taxable year, the exclusion from gross income provided by section 911(a)(2) shall not apply”.\n1978—Subsec. (a).  Pub. L. 95–615  substituted “(relating to income earned by employees in certain camps)” for “(relating to earned income from sources without the United States)” in par. (8).\nPub. L. 95–600, §\u202f703(j)(8)(A) , substituted “subsection (h)” for “subsection (i)” wherever appearing in last par.\nSubsec. (c)(6).  Pub. L. 95–600, §\u202f703(j)(8)(B) , substituted “subsection (g)” for “subsection (h)”.\n1977—Subsec. (a)(12).  Pub. L. 95–216  added par. (12).\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1901(b)(1) (I)(iii), (X), 1906(b)(13)(A), substituted, in provisions preceding par. (1) and in two places in cl. (iv) of provisions extending the application of provisions relating to agricultural labor to trade or business carried on by individuals, self-employed or in partnership, “section 702(a)(8)” for “section 702(a)(9)” and struck out in par. (2) “(other than interest described in section 35)” after “unless such dividends and interest” and in par. (10) “or his delegate” after “Secretary”.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1901(a)(155)(A) , among other changes, struck out provisions spelling out fixed Social Security contributions and benefit base limits on wages paid during taxable years between 1955 through 1974.\nSubsec. (c)(2)(F).  Pub. L. 94–455, §\u202f1207(e)(1)(B) , added subpar. (F).\nSubsec. (g).  Pub. L. 94–455 , §§\u202f1901(a)(155)(B), (C), 1906(b)(13)(A), redesignated subsec. (h) as (g), and as so redesignated, struck out in par. (1)(A) “or his delegate” after “Secretary” and in par. (2) provisions relating to individuals who have self-employment income for taxable years ending before  Dec. 31, 1967 , on or before  Dec. 31, 1968 , and substituted in par. (2) reference to for which the individual has self-employment income (determined without regard to this subsection or subsection (c)(6)) for reference to ending on or after  Dec. 31, 1967  for which he has self-employment income (as so determined). Former subsec. (g), which related to treatment of certain remunerations erroneously reported as net earnings from self-employment, was struck out.\nSubsecs. (h), (i).  Pub. L. 94–455, §\u202f1901(a)(155)(B) , redesignated subsec. (i) as (h). Former subsec. (h) redesignated (g).\n1975—Subsec. (b).  Pub. L. 94–92  struck out from item B of second sentence the limitation of “wages” to include “compensation” solely with respect to the tax imposed by section 1401(b).\n1974—Subsec. (a)(1).  Pub. L. 93–368  inserted “(as determined without regard to any activities of an agent of such owner or tenant)” after “material participation by the owner or tenant” wherever appearing.\n1973—Subsec. (b)(1)(H).  Pub. L. 93–233  substituted “$13,200” for “$12,600”.\nPub. L. 93–66  substituted “$12,600” for “$12,000”.\n1972—Subsec. (a)(8), (11).  Pub. L. 92–603 , §§\u202f121(b)(1), 124(b), 140(b), in par. (8), struck out limitation under which provisions authorizing the computation of net earnings without regard to sections 911 and 931 were limited to citizens of the United States performing religious service as employees of an American employer or as ministers in a foreign country having a congregation predominantly of citizens of the United States, added par. (11), and extended the application of provisions relating to agricultural labor to trade or business carried on by individuals, self-employed or in partnership, with certain exceptions.\nSubsec. (b)(1)(F).  Pub. L. 92–336, §\u202f203(b)(1)(A) , inserted “and before 1973” after “1971”.\nSubsec. (b)(1)(G) to (I).  Pub. L. 92–336, §\u202f203(b)(1)(B) , added subpars. (G) to (I).\nSubsec. (i).  Pub. L. 92–603, §\u202f121(b)(2) , added subsec. (i).\n1971—Subsec. (b)(1)(E).  Pub. L. 92–5, §\u202f203(b)(1)(A) , inserted “and beginning before 1972” after “1967” and substituted “;\u2000and” for “;\u2000or”.\nSubsec. (b)(1)(F).  Pub. L. 92–5, §\u202f203(b)(1)(B) , added subpar. (F).\n1968—Subsec. (a)(10).  Pub. L. 90–248, §\u202f118(a) , added par. (10).\nSubsec. (b).  Pub. L. 90–248, §\u202f502(b)(1) , designated existing provisions of second sentence respecting “wages” as item “A” and added item “B”.\nSubsec. (b)(1)(D).  Pub. L. 90–248, §\u202f108(b)(1)(A) , inserted “and before 1968” after “1965”.\nSubsec. (b)(1)(E).  Pub. L. 90–248, §\u202f108(b)(1)(B) , added subpar. (E).\nSubsec. (c).  Pub. L. 90–248, §\u202f115(b)(1) , substituted “such order) performed by an individual unless an exemption under subsection (e) is effective with respect to him” for “such order performed by an individual during the period for which a certificate filed by him under subsection (e) is in effect” in last sentence.\nSubsec. (c)(1).  Pub. L. 90–248, §\u202f122(b)(1) , excepted from exclusion from definition of “trade or business” the functions of a public office of a State or a political division thereof with respect to fees received in any period in which the functions are performed in a position compensated solely on a fee basis and in which such functions are not covered under an agreement entered by such State and the Secretary pursuant to section 218 of the Social Security Act [ section 418 of Title 42 , The Public Health and Welfare].\nSubsec. (c)(2)(E).  Pub. L. 90–248, §\u202f122(b)(2) , added subpar. (E).\nSubsec. (e).  Pub. L. 90–248, §\u202f115(b)(2) , substituted provisions allowing clergymen, members of religious orders who have not taken a vow of poverty, and Christian Science practitioners to secure an exemption from social security self-employment tax upon meeting requirements of pars. (1) to (3) respecting such exemption, time for filing application, and effective date of exemption for provisions of former pars. (1) to (5) permitting such persons to secure social security coverage by filing a waiver certificate, prescribing time for filing certificate, effective date of certificate treatment of certain remuneration paid in 1955 and 1956 as wages, and optional provision for certain certificates filed on or before  April 15, 1967 .\nSubsec. (h)(2).  Pub. L. 90–248, §\u202f501(a) , substituted “ December 31, 1967 ” and “ December 31, 1968 ” for “ December 31, 1965 ” and “ April 15, 1966 ”, respectively, in subpar. (A) and “ December 31, 1967 ” for “ December 31, 1965 ” in subpar. (B) and inserted in such subpar. (B) exception provision as to when an application shall be deemed timely filed.\n1966—Subsec. (e)(3)(E).  Pub. L. 89–368  added subpar. (E).\n1965—Subsec. (a).  Pub. L. 89–97, §\u202f312(b) , substituted “2,400” for “$1,800” in cls. (i) to (iv) and “$1,600” for “$1,200” in cls. (ii) and (iv) of second sentence following par. (9), wherever appearing.\nSubsec. (b)(1)(C).  Pub. L. 89–97, §\u202f320(b)(1)(C) , inserted “and before 1966” after “1958” and substituted “and” for “or” after the semicolon.\nSubsec. (b)(1)(D).  Pub. L. 89–97, §\u202f320(b)(1)(B) , added subpar. (D).\nSubsec. (c).  Pub. L. 89–97 , §§\u202f311(b)(1), (2), 319(a), struck out from par. (5) “doctor of medicine, or” before and “;\u2000or the performance of such service by a partnership” after “Christian Science practitioner,” added par. (6), and consolidated into one sentence former last two sentences.\nSubsec. (e)(1).  Pub. L. 89–97, §\u202f311(b)(3)(A) , substituted “extended to service described in subsection (c)(4) or (c)(5) performed by him” for “extended to service described in subsection (c)(4), or service described in subsection (c)(5) insofar as it relates to the performance of service by an individual in the exercise of his profession as a Christian Science practitioner, as the case may be performed by him”.\nSubsec. (e)(2)(A).  Pub. L. 89–97, §\u202f311(b)(3)(B) , substituted “(computed without regard to subsections (c)(4) and (c)(5) of $400 or more, any part of which was derived from the performance of service described in subsection (c)(4) or (c)(5)” for “(computed, in the case of an individual referred to in paragraph (1)(A), without regard to subsection (c)(4), and, in the case of an individual referred to in paragraph (1)(B), without regard to subsection (c)(5) insofar as it relates to the performance of service by an individual in the exercise of his profession as a Christian Science practitioner) of $400 or more, any part of which was derived from the performance of service described in subsection (c)(4), or from the performance of service described in subsection (c)(5) insofar as it relates to the performance of service by an individual in the exercise of his profession as a Christian Science practitioner, as the case may be”.\nSubsec. (e)(2)(B).  Pub. L. 89–97, §\u202f341(a) , substituted “his second taxable year ending after 1963” for “his second taxable year ending after 1962”.\nSubsec. (e)(3)(D).  Pub. L. 89–97, §\u202f341(b) , added subpar. (D).\nSubsec. (e)(5).  Pub. L. 89–97, §\u202f331(a) , extended applicability of section to earnings in taxable years beyond those ending before 1960, extended until  April 15, 1966 , the last date for filing a certificate by an individual and until  Apr. 15, 1967 , the last date for filing a supplemental certificate by an individual, provided for filing of the certificate on or before  Apr. 15, 1967 , if the individual died on or before  April 15, 1966 , and extended to  Apr. 15, 1967 , the date on or before which the tax under section 1401 had been paid, or the overpayment, including interest under section 6611, had been repaid.\nSubsec. (e)(6).  Pub. L. 89–97, §\u202f331(a) , struck out par. (6) which dealt with filing of certificates by fiduciaries or survivors on or before  April 15, 1962 .\nSubsec. (h).  Pub. L. 89–97, §\u202f319(c) , added subsec. (h).\n1964—Subsec. (a)(3)(B).  Pub. L. 88–272  inserted reference to iron ore.\nSubsec. (e)(2)(B).  Pub. L. 88–650, §\u202f2(a) , substituted “his second taxable year ending after 1962” for “his second taxable year ending after 1959”.\nSubsec. (e)(3)(C).  Pub. L. 88–650, §\u202f2(b) , added subpar. (C).\n1961—Subsec. (e)(6).  Pub. L. 87–64  added par. (6).\n1960—Subsec. (a).  Pub. L. 86–778, §\u202f103(k) , added par. (9) and inserted references to paragraph (9) in cls. (v) and (vi) of last sentence.\nSubsec. (b).  Pub. L. 86–778, §\u202f103 ( l ), substituted “the Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American Samoa” for “the Virgin Islands or a resident of Puerto Rico” in last sentence.\nSubsec. (c)(2).  Pub. L. 86–778, §\u202f106(b) , excluded service described in section 3121(b)(11), (12), or (15) performed in the United States (as defined in section 3121(e)(2)) by a citizen of the United States.\nSubsec. (e)(2)(B).  Pub. L. 86–778, §\u202f101(a) , substituted “1959” for “1956”.\nSubsec. (e)(3).  Pub. L. 86–778, §\u202f101(b) , designated existing provisions as cl. (A), struck out provisions which related to certificates for prior taxable years which have now become inapplicable, and added cl. (B).\nSubsec. (e)(5).  Pub. L. 86–778, §\u202f101(c) , added par. (5).\nSubsec. (g).  Pub. L. 86–778, §\u202f105(c)(1) , added subsec. (g).\n1958—Subsec. (b)(1).  Pub. L. 85–840, §\u202f402(a) , increased limitation on self-employment income subject to tax, for taxable years ending after 1958, from $4,200 to $4,800.\nSubsec. (f).  Pub. L. 85–840, §\u202f403(a) , added subsec. (f).\n1957—Subsec. (a)(8).  Pub. L. 85–239, §\u202f5(b) , permitted computation of net earnings without regard to sections 107 and 119 of this title.\nSubsec. (e)(2).  Pub. L. 85–239, §\u202f1(a) , permitted a person to file a certificate on or before the due date of the return (including any extension thereof) for his second taxable year ending after 1956.\nSubsec. (e)(3).  Pub. L. 85–239, §\u202f1(b) , provided for the effective date of certificates filed after  August 30, 1957 , but on or before the due date of the return (including any extension thereof) for the second taxable year ending after 1956, for certificates filed on or before  August 30, 1957 , which are effective only for the third or fourth taxable year ending after 1954 and all succeeding taxable years, and for certificates filed after the due date of the return (including any extension thereof) for the second taxable year ending after 1956.\nSubsec. (e)(4).  Pub. L. 85–239, §\u202f2 , added par. (4).\n1956—Subsec. (a). Act  Aug. 1, 1956 , §\u202f201(i), amended generally last two sentences to include those businesses in which the income is computed under an accrual method, and partnerships, to change the method of computation of net earnings for individuals by permitting those whose gross income is not more than $1,800 to deem their net earnings to be 66⅔ percent of such gross income, and those whose gross income is more than $1,800 and the net earnings are less than $1,200, to deem the net earnings to be $1,200, and to provide for the computation of net earnings for members of partnerships.\nSubsec. (a)(1). Act  Aug. 1, 1956 , §\u202f201(e)(2), struck out from the exclusion income derived by an owner or tenant of land if such income is derived under an arrangement with another individual for the production by such other individual of agricultural or horticultural commodities if such arrangement provides for material participation by the owner or tenant in the production or the management of the production of such commodities, and there is material participation by the owner or tenant with respect to any such commodity.\nSubsec. (a)(8)(B). Act  Aug. 1, 1956 , §\u202f201(g), included citizens of the United States who are ministers in foreign countries and have congregations composed predominantly of citizens of the United States.\nSubsec. (c)(2). Act  Aug. 1, 1956 , §\u202f201(e)(3), included within “trade or business” service described in  section 3121(b)(16) of this title .\nSubsec. (c)(5). Act  Aug. 1, 1956 , §\u202f201(f), struck out exclusion of lawyers, dentists, osteopaths, veterinarians, chiropractors, naturopaths, and optometrists.\n1954—Subsec. (a). Act  Sept. 1, 1954 , §\u202f201(a), (c)(4), in par. (1) clarified the term rentals to indicate that it includes rentals paid in the form of crop shares, struck out par. (2), redesignated pars. (3) to (8) as (2) to (7), respectively, added a new par. (8), and inserted provisions at end establishing an optional method of reporting income for self-employed farmers.\nSubsec. (b). Act  Sept. 1, 1954 , §\u202f201(b), increased the limitation on self-employment income subject to tax, for taxable years ending after 1954, from $3,600 to $4,200 and included as “wages”, for purposes of computing “self-employment income,” remuneration of United States citizens employed by a foreign subsidiary of a domestic corporation which has agreed to have the Social Security insurance system extended to service performed by such citizens.\nSubsec. (c). Act  Sept. 1, 1954 , §\u202f201(c)(2), inserted two sentences at end making the provisions of par. (4) inapplicable to service performed during the period for which a certificate filed under subsec. (e) is in effect.\nSubsec. (c)(2). Act  Sept. 1, 1954 , §\u202f201(c)(1), inserted “and other than service described in paragraph (4) of this subsection” after “18”.\nSubsec. (c)(5). Act  Sept. 1, 1954 , §\u202f201(c)(5), struck out exclusions from self-employment tax in the case of architects, certified public accountants, accountants registered or licensed as accountants under State or municipal law, full-time practicing public accountants, funeral directors and professional engineers.\nSubsec. (e). Act  Sept. 1, 1954 , §\u202f201(c)(3), added subsec. (e).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–148  applicable with respect to remuneration received, and taxable years beginning, after  Dec. 31, 2012 , see  section 9015(c) of Pub. L. 111–148 , set out as a note under  section 164 of this title .\nAmendment of this section and repeal of  Pub. L. 110–234  by  Pub. L. 110–246  effective  May 22, 2008 , the date of enactment of  Pub. L. 110–234 , except as otherwise provided, see  section 4 of Pub. L. 110–246 , set out as an Effective Date note under  section 8701 of Title 7 , Agriculture.\nPub. L. 110–234, title XV, §\u202f15301(c) ,  May 22, 2008 ,  122 Stat. 1501 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15301(c),  June 18, 2008 ,  122 Stat. 1664 , 2263, provided that:  “The amendments made by this section [amending this section and  section 411 of Title 42 , The Public Health and Welfare] shall apply to payments made after  December 31, 2007 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nPub. L. 110–234, title XV, §\u202f15352(c) ,  May 22, 2008 ,  122 Stat. 1526 , and  Pub. L. 110–246, §\u202f4(a) , title XV, §\u202f15352(c),  June 18, 2008 ,  122 Stat. 1664 , 2288, provided that:  “The amendments made by this section [amending this section and sections 411 and 412 of Title 42, The Public Health and Welfare] shall apply to taxable years beginning after  December 31, 2007 .”\n[ Pub. L. 110–234  and  Pub. L. 110–246  enacted identical provisions.  Pub. L. 110–234  was repealed by  section 4(a) of Pub. L. 110–246 , set out as a note under  section 8701 of Title 7 , Agriculture.]\nAmendment by  Pub. L. 110–28  applicable to taxable years beginning after  Dec. 31, 2006 , see  section 8215(c) of Pub. L. 110–28 , set out as a note under  section 761 of this title .\nAmendment by  Pub. L. 108–357  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 102(e) of Pub. L. 108–357 , set out as a note under  section 56 of this title .\nPub. L. 105–34, title IX, §\u202f922(c) ,  Aug. 5, 1997 ,  111 Stat. 880 , provided that:  “The amendments made by this section [amending this section and  section 411 of Title 42 , The Public Health and Welfare] shall apply to payments after  December 31, 1997 .”\nPub. L. 104–188, title I, §\u202f1456(b) ,  Aug. 20, 1996 ,  110 Stat. 1818 , provided that:  “The amendments made by this section [amending this section] shall apply to years beginning before, on, or after  December 31, 1994 .”\nAmendment by  section 108(h)(1) of Pub. L. 103–296  effective  Mar. 31, 1995 , see  section 110(a) of Pub. L. 103–296 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nPub. L. 103–296, title III, §\u202f319(c) ,  Aug. 15, 1994 ,  108 Stat. 1535 , provided that:  “The amendments made by this section [amending this section, sections 3102, 3121, and 3122 of this title, and sections 410 and 411 of Title 42, The Public Health and Welfare] shall apply with respect to service performed after the calendar quarter following the calendar quarter in which the date of the enactment of this Act [ Aug. 15, 1994 ] occurs.”\nPub. L. 103–66, title XIII, §\u202f13207(e) ,  Aug. 10, 1993 ,  107 Stat. 469 , provided that:  “The amendments made by this section [amending this section and sections 3121, 3122, 3125, 3231, and 6413 of this title] shall apply to 1994 and later calendar years.”\nAmendment by  section 5123(a)(3) of Pub. L. 101–508  applicable with respect to income received for services performed in taxable years beginning after  Dec. 31, 1990 , see  section 5123(b) of Pub. L. 101–508 , set out as a note under  section 403 of Title 42 , The Public Health and Welfare.\nPub. L. 101–508, title V, §\u202f5130(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–289 , provided that:  “The amendments made by subsection (a) [amending this section,  section 3509 of this title , and sections 408, 409, and 411 of Title 42] shall be effective as if included in the enactment of the provision to which it relates.”\nPub. L. 101–508, title XI, §\u202f11331(e) ,  Nov. 5, 1990 ,  104 Stat. 1388–468 , provided that:  “The amendments made by this section [amending this section and sections 3121, 3122, 3125, 3231, and 6413 of this title] shall apply to 1991 and later calendar years.”\nPub. L. 101–239, title X, §\u202f10204(a)(2) ,  Dec. 19, 1989 ,  103 Stat. 2474 , provided that:  “The amendments made by paragraph (1) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1989 .”\nAmendment by  section 3043(c)(1) of Pub. L. 100–647  applicable to all periods beginning before, on, or after  Nov. 10, 1988 , with no inference created as to existence or nonexistence or scope of any exemption from tax for income derived from fishing rights secured as of  Mar. 17, 1988 , by any treaty, law, or Executive Order, see  section 3044 of Pub. L. 100–647 , set out as an Effective Date note under  section 7873 of this title .\nPub. L. 100–647, title VIII, §\u202f8007(d) ,  Nov. 10, 1988 ,  102 Stat. 3783 , provided that:  “The amendments made by subsection (a) [enacting  section 3127 of this title  and renumbering former  section 3127 of this title  as section 3128] shall apply to wages paid after  December 31, 1988 . The amendments made by subsection (b) [amending  section 402 of Title 42 , The Public Health and Welfare] shall apply to benefits paid for (and items and services furnished in) months after December 1988. The amendments made by subsection (c) [amending this section] shall apply to applications for exemptions filed on or after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 100–203, title IX, §\u202f9022(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–295 , provided that:  “The amendments made by this section [amending this section and  section 411 of Title 42 , The Public Health and Welfare] shall apply with respect to services performed in taxable years beginning on or after  January 1, 1988 .”\nAmendment by  section 301(b)(12) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 301(c) of Pub. L. 99–514 , set out as a note under  section 62 of this title .\nAmendment by section 1272(d)(8), (9) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nPub. L. 99–514, title XVII, §\u202f1704(a)(3) ,  Oct. 22, 1986 ,  100 Stat. 2779 , provided that:  “The amendments made by paragraphs (1) and (2) [amending this section] shall apply to applications filed after  December 31, 1986 .”\nPub. L. 99–514, title XVIII, §\u202f1882(b)(3) ,  Oct. 22, 1986 ,  100 Stat. 2915 , provided that:  “The amendments made by this subsection [amending this section and  section 411 of Title 42 , The Public Health and Welfare] shall apply to remuneration paid or derived in taxable years beginning after  December 31, 1985 .”\nAmendment by  Pub. L. 99–509  effective, except as otherwise provided, with respect to payments due with respect to wages paid after  Dec. 31, 1986 , including wages paid after such date by a State (or political subdivision thereof) that modified its agreement pursuant to  section 418(e)(2) of Title 42 , The Public Health and Welfare, see  section 9002(d) of Pub. L. 99–509 , set out as a note under  section 418 of Title 42 .\nAmendment by  Pub. L. 99–272  applicable to services performed after  Mar. 31, 1986 , see  section 13205(d)(1) of Pub. L. 99–272 , set out as a note under  section 3121 of this title .\nAmendment by  section 102(c)(1) of Pub. L. 98–369  applicable to taxable years beginning after  July 18, 1984 , except as otherwise provided, see section 102(f)(3), (g) of  Pub. L. 98–369 , set out as a note under  section 1256 of this title .\nAmendment by  section 2603(c)(2) of Pub. L. 98–369  applicable to service performed after  Dec. 31, 1983 , see  section 2603(e) of Pub. L. 98–369 , set out as a note under  section 410 of Title 42 , The Public Health and Welfare.\nAmendment by  section 2663(j)(5)(B) of Pub. L. 98–369  effective  July 18, 1984 , but not to be construed as changing or affecting any right, liability, status or interpretation which existed (under the provisions of law involved) before that date, see  section 2664(b) of Pub. L. 98–369 , set out as a note under  section 401 of Title 42 .\nAmendment by  section 124(c)(2) of Pub. L. 98–21  applicable to taxable years beginning after  Dec. 31, 1989 , see  section 124(d)(2) of Pub. L. 98–21 , set out as a note under  section 1401 of this title .\nAmendment by  section 321(e)(3) of Pub. L. 98–21  applicable to agreements entered into after  Apr. 20, 1983 , except that at the election of any American employer such amendment shall also apply to any agreement entered into on or before  Apr. 20, 1983 , see  section 321(f) of Pub. L. 98–21  set out as a note under  section 406 of this title .\nAmendment by  section 322(b)(2) of Pub. L. 98–21  effective for taxable years beginning on or after  Apr. 20, 1983 , see  section 322(c) of Pub. L. 98–21  set out as a note under  section 3121 of this title .\nPub. L. 98–21, title III, §\u202f323(c)(2) ,  Apr. 20, 1983 ,  97 Stat. 121 , provided that:  “Except as provided in subsection (b)(2)(B) [amending  section 411 of Title 42 , The Public Health and Welfare, effective with respect to taxable years beginning after  Dec. 31, 1981 , and before  Jan. 1, 1984 ], the amendments made by subsection (b) [amending this section and  section 411 of Title 42 ] shall apply to taxable years beginning after  December 31, 1983 .”\nAmendment by  Pub. L. 97–248  applicable to remuneration paid after  Dec. 31, 1982 , see  section 278(c)(1) of Pub. L. 97–248 , set out as a note under  section 3121 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to taxable years beginning after  Dec. 31, 1981 , see  section 115 of Pub. L. 97–34 , set out as a note under  section 911 of this title .\nAmendment by  Pub. L. 95–600  effective  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  Pub. L. 95–615  applicable to taxable years beginning after  Dec. 31, 1977 , with provision for election of prior law, see  section 209 of Pub. L. 95–615 , set out as an Effective Date of 1978 Amendment note under  section 911 of this title .\nAmendment by  Pub. L. 95–216  applicable with respect to taxable years beginning after  Dec. 31, 1977 , see  section 313(c) of Pub. L. 95–216 , set out as a note under  section 411 of Title 42 , The Public Health and Welfare.\nAmendment by  section 1207(e)(1)(B) of Pub. L. 94–455  applicable to taxable years ending after  Dec. 31, 1971 , see  section 1207(f)(4) of Pub. L. 94–455 , set out as a note under  section 3121 of this title .\nAmendment by section 1901(a)(155), (b)(1)(I)(iii), (X) of  Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 94–92, title II, §\u202f203(c) ,  Aug. 9, 1975 ,  89 Stat. 465 , provided that:  “The amendments made by this section [amending this section and  section 3231 of this title ] shall be effective  January 1, 1975 , and shall apply only with respect to compensation paid for services rendered on or after that date.”\nAmendment by  Pub. L. 93–368  applicable with respect to taxable years beginning after  Dec. 31, 1973 , see  section 10(c) of Pub. L. 93–368 , set out as a note under  section 411 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 93–233  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 93–66  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 .\nAmendment by  Pub. L. 92–603  applicable with respect to taxable years beginning after  Dec. 31, 1972 , see sections 121(c), 124(c), and 140(c) of  Pub. L. 92–603 , set out as notes under  section 411 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 92–336  applicable only with respect to taxable years beginning after 1972, see  section 203(c) of Pub. L. 92–336 , set out as a note under  section 409 of Title 42 .\nAmendment by  Pub. L. 92–5  applicable only with respect to taxable years beginning after 1971, see  section 203(c) of Pub. L. 92–5 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  section 108(b)(1) of Pub. L. 90–248  applicable only with respect to taxable years ending after 1967, see  section 108(c) of Pub. L. 90–248 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nPub. L. 90–248, title I, §\u202f115(c) ,  Jan. 2, 1968 ,  81 Stat. 840 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and  section 411 of Title 42 ] shall apply only with respect to taxable years ending after 1967.”\nPub. L. 90–248, title I, §\u202f118(c) ,  Jan. 2, 1968 ,  81 Stat. 842 , provided that:  “The amendments made by this section [amending this section and  section 411 of Title 42 ] shall apply only with respect to taxable years ending on or after  December 31, 1967 .”\nPub. L. 90–248, title I, §\u202f122(c) ,  Jan. 2, 1968 ,  81 Stat. 844 , provided that: \n “(1)  The amendments made by subsections (a) and (b) of this section [amending this section and  section 411 of Title 42 ] shall apply with respect to fees received after 1967. \n \n “(2)  Notwithstanding the provisions of subsections (a) and (b) of this section [amending this section and  section 411 of Title 42 ], any individual who in 1968 is in a position to which the amendments made by such subsections apply may make an irrevocable election not to have such amendments apply to the fees he receives in 1968 and every year thereafter, if on or before the due date of his income tax return for 1968 (including any extensions thereof) he files with the Secretary of the Treasury or his delegate, in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe, a certificate of election of exemption from such amendments.”\nPub. L. 90–248, title V, §\u202f501(b) ,  Jan. 2, 1968 ,  81 Stat. 933 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after  December 31, 1950 . For such purpose, chapter 2 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be treated as applying to all taxable years beginning after such date.”\nPub. L. 90–248, title V, §\u202f502(b)(2) ,  Jan. 2, 1968 ,  81 Stat. 934 , provided that:  “The amendments made by paragraph (1) [amending this section] shall be effective only with respect to taxable years ending on or after  December 31, 1968 .”\nAmendment by  Pub. L. 89–368  applicable with respect to taxable years beginning after  December 31, 1966 , see  section 102(d) of Pub. L. 89–368 , set out as a note under  section 6654 of this title .\nAmendment by section 311(b)(1)–(3) of  Pub. L. 89–97  applicable only with respect to taxable years ending on or after  Dec. 31, 1965 , see  section 311(c) of Pub. L. 89–97 , set out as a note under  section 410 of Title 42 , The Public Health and Welfare.\nAmendment by  section 312(b) of Pub. L. 89–97  applicable only with respect to taxable years beginning after  Dec. 31, 1965 , see  section 312(c) of Pub. L. 89–97 , set out as a note under  section 411 of Title 42 .\nPub. L. 89–97, title III, §\u202f319(e) ,  July 30, 1965 ,  79 Stat. 392 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and sections 402 and 411 of Title 42] shall apply with respect to taxable years beginning after  December 31, 1950 . For such purpose, chapter 2 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be treated as applying to all taxable years beginning after such date.”\nAmendment by  section 320(b)(1) of Pub. L. 89–97  applicable with respect to taxable years ending after 1965, see  section 320(c) of Pub. L. 89–97 , set out as a note under  section 3121 of this title .\nPub. L. 89–97, title III, §\u202f331(d) ,  July 30, 1965 ,  79 Stat. 403 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall be applicable (except as otherwise specifically provided therein) only to certificates with respect to which supplemental certificates are filed pursuant to section 1402(e)(5)(A) of such Code after the date of the enactment of this Act [ July 30, 1965 ], and to certificates filed pursuant to section 1402(e)(5)(B) after such date; except that no monthly benefits under title II of the Social Security Act [section 401 et seq. of Title 42] for the month in which this Act is enacted [July 1965] or any prior month shall be payable or increased by reason of such amendments, and no lump sum death payment under such title [section 401 et seq. of Title 42] shall be payable or increased by reason of such amendments in the case of any individual who died prior to the date of the enactment of this Act [ July 30, 1965 ]. The provisions of section 1402(e)(5) and (6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which were in effect before the date of enactment of this Act shall be applicable with respect to any certificate filed pursuant thereto before such date if a supplemental certificate is not filed with respect to such certificate as provided in this section.”\nPub. L. 89–97, title III, §\u202f341(c) ,  July 30, 1965 ,  79 Stat. 412 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall be applicable only with respect to certificates filed pursuant to section 1402(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] after the date of the enactment of this Act [ July 30, 1965 ]; except that no monthly benefits under title II of the Social Security Act [section 401 et seq. of Title 42] for the month in which this Act is enacted [July 1965] or any prior month shall be payable or increased by reason of such amendments.”\nPub. L. 88–650, §\u202f2(c) ,  Oct. 13, 1964 ,  78 Stat. 1077 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall be applicable only with respect to certificates filed pursuant to section 1402(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] after the date of the enactment of this Act [ Oct. 13, 1964 ]; except that no monthly benefits under title II of the Social Security Act [section 401 et seq. of Title 42, The Public Health and Welfare] for the month in which this Act [Oct. 1964] is enacted or any prior month shall be payable or increased by reason of such amendments.”\nAmendment by  Pub. L. 88–272  applicable with respect to amounts received or accrued in taxable years beginning after  Dec. 31, 1963 , attributable to iron ore mined in such years, see  section 227(c) of Pub. L. 88–272 , set out as a note under  section 272 of this title .\nPub. L. 87–64, title II, §\u202f202(b) ,  June 30, 1961 ,  75 Stat. 142 , provided that:  “The amendment made by subsection (a) [amending this section] shall take effect on the date of enactment of this Act [ June 30, 1961 ]; except that no monthly benefits under title II of the Social Security Act [section 401 et seq. of Title 42, The Public Health and Welfare] for the month in which this Act is enacted or any prior month shall be payable or increased by reason of such amendment, and no lump-sum death payment under such title shall be payable or increased by reason of such amendment in the case of any individual who died prior to the date of enactment of this Act [ June 30, 1961 ].”\nPub. L. 86–778, title I, §\u202f101(f) ,  Sept. 13, 1960 ,  74 Stat. 928 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section] shall be applicable (except as otherwise specifically indicated therein) only with respect to certificates (and supplemental certificates) filed pursuant to section 1402(e) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] after the date of the enactment of this Act [ Sept. 13, 1960 ]; except that no monthly benefits under title II of the Social Security Act [section 401 et seq. of Title 42, The Public Health and Welfare] for the month in which this Act is enacted or any prior month shall be payable or increased by reason of such amendments, and no lump-sum death payment under such title shall be payable or increased by reason of such amendments in the case of any individual who died prior to the date of the enactment of this Act [ Sept. 13, 1960 ].”\nAmendment by  section 103(k) of Pub. L. 86–778  applicable only in the case of taxable years beginning after 1960, except that, insofar as such enactment involves the nonapplication of  section 932 of this title  to the Virgin Islands for purposes of section 1401 et seq. of this title and  section 411 of Title 42 , such enactment shall be effective in the case of all taxable years with respect to which such chapter 2 (and corresponding provisions of prior law) and  section 411 of Title 42  are applicable, see  section 103(v)(1) of Pub. L. 86–778 , set out as a note under  section 402 of Title 42 .\nAmendment by section 103( l ) of  Pub. L. 86–778  applicable only in the case of taxable years beginning after 1960, see  section 103(v)(1) of Pub. L. 86–778 , set out as a note under  section 402 of Title 42 .\nAmendment by  section 106(b) of Pub. L. 86–778  applicable only with respect to taxable years ending on or after  Dec. 31, 1960 , see  section 106(c) of Pub. L. 86–778 , set out as a note under  section 411 of Title 42 .\nPub. L. 85–840, title IV, §\u202f403(b) ,  Aug. 28, 1958 ,  72 Stat. 1044 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply only with respect to individuals who die after the date of the enactment of this Act [ Aug. 28, 1958 ]. \n \n “(2)  In the case of an individual who died after 1955 and on or before the date of the enactment of this Act [ Aug. 28, 1958 ], the amendment made by subsection (a) [amending this section] shall apply only if— “(A)  before  January 1, 1960 , there is filed a return (or amended return) of the tax imposed by chapter 2 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [section 1401 et seq. of this title] for the taxable year ending as a result of his death, and \n \n “(B)  in any case where the return is filed solely for the purpose of reporting net earnings from self-employment resulting from the amendment made by subsection (a), the return is accompanied by the amount of tax attributable to such net earnings. \n \n\n In any case described in the preceding sentence, no interest or penalty shall be assessed or collected on the amount of any tax due under chapter 2 of such Code solely by reason of the operation of section 1402(f) of such Code.”\nPub. L. 85–239, §\u202f4 ,  Aug. 30, 1957 ,  71 Stat. 522 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  Section 3 [set out below], and the amendments made by the first section of this Act [amending this section], shall apply with respect to monthly insurance benefits under title II of the Social Security Act [section 401 et seq. of Title 42, The Public Health and Welfare], for months beginning after, and lump sum death payments under such title in the case of deaths occurring after, the date of the enactment of this Act [ Aug. 30, 1957 ]. \n \n “(b)  Notwithstanding subsection (a), in the case of any individual who— “(1) (A)  has remuneration which is deemed, by reason of section 3, to constitute remuneration for employment for purposes of title II of the Social Security Act [section 401 et seq. of Title 42], or \n \n “(B)  has income which constitutes net earnings from self-employment under such title by reason of the filing of a certificate pursuant to [former] section 1402(e)(3)(A) or (B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and \n \n \n “(2)  was entitled to monthly insurance benefits under title II of the Social Security Act [section 401 et seq. of Title 42] for the month in which this Act is enacted [August 1957], \n \n\n section 3 [set out below] and the amendments made by the first section of this Act [amending this section] shall apply with respect to monthly insurance benefits under such title based on his wages and self-employment income only if he, or any other person entitled to monthly insurance benefits under such title on the basis of such wages and self-employment income, files, on or after the date of enactment of this Act [ Aug. 30, 1957 ], an application for recomputation by reason of this Act. Such recomputation shall be made in the manner provided in title II of the Social Security Acts [section 401 et seq. of Title 42] as in effect at the time of the last previous computation or recomputation of such individual’s primary insurance amount and as though the application therefor was filed in the month in which the application for such last previous computation or recomputation was filed. No recomputation under this subsection shall be regarded as a recomputation under section 215(f) of the Social Security Act [ section 415(f) of Title 42 ]. Any such recomputation shall be effective for and after the twelfth month before the month in which the application therefor is filed, but in no case for any month which begins on or prior to the date of the enactment of this Act. Any such recomputation shall be effective only if it results in a higher primary insurance amount. \n \n “(c)  The preceding provisions of this section shall not render erroneous any monthly insurance benefits under title II of the Social Security Act [section 401 et seq. of Title 42] for the month in which this Act [August 1957] is enacted or any prior month.”\nPub. L. 85–239, §\u202f5(c) ,  Aug. 30, 1957 ,  71 Stat. 524 , provided that:  “The amendments made by this section [amending this section and  section 411 of Title 42 ] shall, except for purposes of section 203 of the Social Security Act [ section 403 of title 42 ], apply only with respect to taxable years ending on or after  December 31, 1957 . For purposes of section 203 of the Social Security Act [ section 403 of Title 42 ] (other than subsection (a)), such amendments shall apply only with respect to taxable years beginning after the month in which this Act is enacted [August 1957]. For purposes of subsection (a) of such section 203, such amendments shall apply only with respect to taxable years of the insured individual ending on or after  December 31, 1957 .”\nAmendment by section 201(e)(2), (f) of act  Aug. 1, 1956 , applicable with respect to taxable years ending after 1955, amendment by section 201(i) of that act applicable with respect to taxable years ending on or after  Dec. 31, 1956 , amendment by section 201(e)(3) of that act applicable with respect to taxable years ending after 1954, and, except as provided in section 201(m)(2)(B) of that act, amendment by section 201(g) of that act applicable only with respect to taxable years ending after 1956, see section 201(m) of act  Aug. 1, 1956 , set out as a under  section 3121 of this title .\nAct Sept. 1, 1954, ch. 1206, title II, §\u202f201(d) ,  68 Stat. 1089 , provided that:  “The amendments made by subsections (a), (b) and (c) of this section [amending this section] shall be applicable only with respect to taxable years ending after 1954.”\nPub. L. 106–170, title IV, §\u202f403 ,  Dec. 17, 1999 ,  113 Stat. 1910 , provided that: \n “(a)   In General .— Notwithstanding section 1402(e)(4) of the Internal Revenue Code of 1986, any exemption which has been received under section 1402(e)(1) of such Code by a duly ordained, commissioned, or licensed minister of a church, a member of a religious order, or a Christian Science practitioner, and which is effective for the taxable year in which this Act is enacted [enacted  Dec. 17, 1999 ], may be revoked by filing an application therefor (in such form and manner, and with such official, as may be prescribed by the Commissioner of Internal Revenue), if such application is filed no later than the due date of the Federal income tax return (including any extension thereof) for the applicant’s second taxable year beginning after  December 31, 1999 . Any such revocation shall be effective (for purposes of chapter 2 of the Internal Revenue Code of 1986 and title II of the Social Security Act ( 42 U.S.C. 401  et seq.)), as specified in the application, either with respect to the applicant’s first taxable year beginning after  December 31, 1999 , or with respect to the applicant’s second taxable year beginning after such date, and for all succeeding taxable years; and the applicant for any such revocation may not thereafter again file application for an exemption under such section 1402(e)(1). If the application is filed after the due date of the applicant’s Federal income tax return for a taxable year and is effective with respect to that taxable year, it shall include or be accompanied by payment in full of an amount equal to the total of the taxes that would have been imposed by section 1401 of the Internal Revenue Code of 1986 with respect to all of the applicant’s income derived in that taxable year which would have constituted net earnings from self-employment for purposes of chapter 2 of such Code (notwithstanding paragraphs (4) and (5) of section 1402(c)) except for the exemption under section 1402(e)(1) of such Code. \n \n “(b)   Effective Date .— Subsection (a) shall apply with respect to service performed (to the extent specified in such subsection) in taxable years beginning after  December 31, 1999 , and with respect to monthly insurance benefits payable under title II on the basis of the wages and self-employment income of any individual for months in or after the calendar year in which such individual’s application for revocation (as described in such subsection) is effective (and lump-sum death payments payable under such title on the basis of such wages and self-employment income in the case of deaths occurring in or after such calendar year).”\nPub. L. 103–296, title III, §\u202f306 ,  Aug. 15, 1994 ,  108 Stat. 1521 , provided that: \n “(a)   In General .— Notwithstanding any other provision of law, if— “(1)  an individual performed services described in section 1402(c)(4) of the Internal Revenue Code of 1986 which are subject to tax under section 1401 of such Code, \n \n “(2)  such services were performed in Canada at a time when no agreement between the United States and Canada pursuant to section 233 of the Social Security Act [ 42 U.S.C. 433 ] was in effect, and \n \n “(3)  such individual was required to pay contributions on the earnings from such services under the social insurance system of Canada, \n \n\n then such individual may file a certificate under this section in such form and manner, and with such official, as may be prescribed in regulations issued under chapter 2 of such Code. Upon the filing of such certificate, notwithstanding any judgment which has been entered to the contrary, such individual shall be exempt from payment of such tax with respect to services described in paragraphs (1) and (2) and from any penalties or interest for failure to pay such tax or to file a self-employment tax return as required under section 6017 of such Code. \n \n “(b)   Period for Filing .— A certificate referred to in subsection (a) may be filed only during the 180-day period commencing with the date on which the regulations referred to in subsection (a) are issued. \n \n “(c)   Taxable Years Affected by Certificate .— A certificate referred to in subsection (a) shall be effective for taxable years ending after  December 31, 1978 , and before  January 1, 1985 . \n \n “(d)   Restriction on Crediting of Exempt Self-Employment Income .— In any case in which an individual is exempt under this section from paying a tax imposed under section 1401 of the Internal Revenue Code of 1986, any income on which such tax would have been imposed but for such exemption shall not constitute self-employment income under section 211(b) of the Social Security Act ( 42 U.S.C. 411(b) ), and, if such individual’s primary insurance amount has been determined under section 215 of such Act ( 42 U.S.C. 415 ), notwithstanding section 215(f)(1) of such Act, the Secretary of Health and Human Services (prior to  March 31, 1995 ) or the Commissioner of Social Security (after  March 30, 1995 ) shall recompute such primary insurance amount so as to take into account the provisions of this subsection. The recomputation under this subsection shall be effective with respect to benefits for months following approval of the certificate of exemption.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVII, §\u202f1704(b) ,  Oct. 22, 1986 ,  100 Stat. 2779 , provided that: \n “(1)   In general .— Notwithstanding section 1402(e)(3) of the Internal Revenue Code of 1986, as redesignated by subsection (a)(2)(B) of this section, any exemption which has been received under section 1402(e)(1) of such Code by a duly ordained, commissioned, or licensed minister of a church, a member of a religious order, or a Christian Science practitioner, and which is effective for the taxable year in which this Act is enacted [enacted  Oct. 22, 1986 ], may be revoked by filing an application therefor (in such form and manner, and with such official, as may be prescribed in regulations made under chapter 2 of subtitle A of such Code), if such application is filed— “(A)  before the applicant becomes entitled to benefits under section 202(a) or 223 of the Social Security Act [ 42 U.S.C. 402(a) , 423] (without regard to section 202(j)(1) or 223(b) of such Act [ 42 U.S.C. 402(j)(1) , 423(b)]), and \n \n “(B)  no later than the due date of the Federal income tax return (including any extension thereof) for the applicant’s first taxable year beginning after the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n\n Any such revocation shall be effective (for purposes of chapter 2 of subtitle A of the Internal Revenue Code of 1986 and title II of the Social Security Act [ 42 U.S.C. 401  et seq.]), as specified in the application, either with respect to the applicant’s first taxable year ending on or after the date of the enactment of this Act [ Oct. 22, 1986 ] or with respect to the applicant’s first taxable year beginning after such date, and for all succeeding taxable years; and the applicant for any such revocation may not thereafter again file application for an exemption under such section 1402(e)(1). If the application is filed on or after the due date of the Federal income tax return for the applicant’s first taxable year ending on or after the date of the enactment of this Act [ Oct. 22, 1986 ] and is effective with respect to that taxable year, it shall include or be accompanied by payment in full of an amount equal to the total of the taxes that would have been imposed by section 1401 of the Internal Revenue Code of 1986 with respect to all of the applicant’s income derived in that taxable year which would have constituted net earnings from self-employment for purposes of chapter 2 of subtitle A of such Code (notwithstanding paragraph (4) or (5) of section 1402(c) of such Code) but for the exemption under section 1402(e)(1) of such Code. \n \n “(2)   Effective date .— Paragraph (1) of this subsection shall apply with respect to service performed (to the extent specified in such paragraph) in taxable years ending on or after the date of the enactment of this Act [ Oct. 22, 1986 ] and with respect to monthly insurance benefits payable under title II of the Social Security Act [ 42 U.S.C. 401  et seq.] on the basis of the wages and self-employment income of any individual for months in or after the calendar year in which such individual’s application for revocation (as described in such paragraph) is effective (and lump-sum death payments payable under such title on the basis of such wages and self-employment income in the case of deaths occurring in or after such calendar year).”\nPub. L. 95–216, title III, §\u202f316 ,  Dec. 20, 1977 ,  91 Stat. 1537 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)  Notwithstanding section 1402(e)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], any exemption which has been received under section 1402(e)(1) of such Code, by a duly ordained, commissioned, or licensed minister of a church or a Christian Science practitioner, and which is effective for the taxable year in which this Act [ Pub. L. 95–216 , enacted  Dec. 20, 1977 ] is enacted, may be revoked by filing an application therefor (in such form and manner, and with such official, as may be prescribed in regulations made under chapter 2 of such Code [this chapter]), if such application is filed— “(1)  before the applicant becomes entitled to benefits under section 202(a) or 223 of the Social Security Act [section 402(a) or 423 of Title 42, The Public Health and Welfare] (without regard to section 202(j)(1) or 223(b) of such Act [section 402(j)(1) or 423(b) of Title 42]), and \n \n “(2)  no later than the due date of the Federal income tax return (including any extension thereof) for the applicant’s first taxable year beginning after the date of the enactment of this Act [ Dec. 20, 1977 ]. \n \n\n Any such revocation shall be effective (for purposes of chapter 2 of the Internal Revenue Code of 1986 [this chapter] and title II of the Social Security Act [section 401 et seq. of Title 42]), as specified in the application, either with respect to the applicant’s first taxable year ending on or after the date of the enactment of this Act [ Dec. 20, 1977 ] or with respect to the applicant’s first taxable year beginning after such date, and for all succeeding taxable years; and the applicant for any such revocation may not thereafter again file application for an exemption under such section 1402(e)(1). If the application is filed on or after the due date of the applicant’s first taxable year ending on or after the date of the enactment of this Act [ Dec. 20, 1977 ] and is effective with respect to that taxable year, it shall include or be accompanied by payment in full of an amount equal to the total of the taxes that would have been imposed by section 1401 of the Internal Revenue Code of 1986 with respect to all of the applicant’s income derived in that taxable year which would have constituted net earnings from self-employment for purposes of chapter 2 of such Code [this chapter] (notwithstanding section 1402(c)(4) or (c)(5) of such Code) except for the exemption under section 1402(e)(1) of such Code. \n \n “(b)  Subsection (a) shall apply with respect to service performed (to the extent specified in such subsection) in taxable years ending on or after the date of the enactment of this Act [ Dec. 20, 1977 ], and with respect to monthly insurance benefits payable under title II of the Social Security Act [section 401 et seq. of Title 42] on the basis of the wages and self-employment income of any individual for months in or after the calendar year in which such individual’s application for revocation (as described in such subsection) is filed (and lump-sum death payments payable under such title on the basis of such wages and self-employment income in the case of deaths occurring in or after such calendar year).”\nPub. L. 90–248, title I, §\u202f122(c)(2) ,  Jan. 2, 1968 ,  81 Stat. 844 , authorized any individual affected by the amendments made by  Pub. L. 90–248  to subsecs. (c)(1), (2)(E) of this section and section 411(c)(1), (2)(E) of Title 42, The Public Health and Welfare, to make an irrevocable election not to have such amendments apply to fees received in 1968 and every year thereafter if he filed, on or before the due date of his income tax return for 1968, with the Secretary of the Treasury, a certificate of election of exemption from such amendments.\nPub. L. 90–248, title V, §\u202f501(c) ,  Jan. 2, 1968 ,  81 Stat. 933 , authorized the payment of a refund or credit of any overpayment resulting from the amendment of subsec. (h)(2), relating to the filing of applications under this section, by  section 501(a) of Pub. L. 90–248  if the claim therefore was filed on or before  Dec. 31, 1968 .\nPub. L. 89–97, title III, §\u202f319(f) ,  July 30, 1965 ,  79 Stat. 392 , authorized the payment of a refund or credit of any overpayment resulting from the amendments made to sections 402, 411, and 1402 of this title by  Pub. L. 89–97 , if the claim therefore is filed on or before  Apr. 15, 1966 .\nPub. L. 89–97, title III, §\u202f331(b) ,  July 30, 1965 ,  79 Stat. 402 , established, for purposes of computing interest,  Apr. 15, 1967 , as the due date for the payment, under  section 1401 of this title , of taxes due for any taxable year ending before  Jan. 1, 1966  solely by reason of the filing of a certificate or supplementary certificate under subsec. (e)(5) of this section, which was struck out by  section 115(b)(2) of Pub. L. 90–248 .\nPub. L. 86–778, title I, §\u202f101(d) ,  Sept. 13, 1960 ,  74 Stat. 927 , established, for purposes of computing interest,  Apr. 15, 1962 , as the due date for the payment, under  section 1401 of this title , of taxes due for any taxable year ending before 1959 solely by reason of the filing of a certificate or supplementary certificate under former subsec. (e)(3)(B) or (5) of this section.\nPub. L. 85–239, §\u202f1(c) ,  Aug. 30, 1957 ,  71 Stat. 521 , established the due date, for purposes of computing interest, for the payment of taxes, where a certificate had been filed under former subsec. (e)(3)(A) or (B) of this section after the due date of a return for any taxable year.\nPub. L. 86–778, title I, §\u202f105(c)(2) ,  Sept. 13, 1960 ,  74 Stat. 945 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Remuneration which is deemed under section 1402(g) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to constitute net earnings from self-employment and not remuneration for employment shall also be deemed, for purposes of title II of the Social Security Act [section 401 et seq. of Title 42, The Public Health and Welfare], to constitute net earnings from self-employment and not remuneration for employment. If, pursuant to the last sentence of section 1402(g) of the Internal Revenue Code of 1986, an individual is deemed to have become an employee of an organization (or to have become a member of a group) on the first day of a calendar quarter, such individual shall likewise be deemed, for purposes of clause (ii) or (iii) of section 210(a)(8)(B) of the Social Security Act [section 410(a)(18)(B)(ii), (iii) of Title 42], to have become an employee of such organization (or to have become a member of such group) on such day.”\nPub. L. 85–239, §\u202f3 ,  Aug. 30, 1957 ,  71 Stat. 522 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Remuneration which is deemed under section 1402(e)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to constitute remuneration for employment shall also be deemed, notwithstanding sections 210(a)(8)(A) and 211(c) of the Social Security Act [sections 410(a)(8)(A) and 411(c) of Title 42, The Public Health and Welfare], to constitute remuneration for employment (and not net earnings from self-employment) for purposes of title II of such Act [section 401 et seq. of Title 42].” \n See  section 4 of Pub. L. 85–239 , set out as an Effective Date of 1957 Amendment note above.\nPub. L. 86–778, title I, §\u202f105(d)(2) ,  Sept. 13, 1960 ,  74 Stat. 945 , set out as an Effective Date of 1960 Amendment note under  section 3121 of this title , provided that no monthly benefits under title II of the Social Security Act [section 401 et seq. of Title 42, The Public Health and Welfare], for September 1960 or any prior month shall be payable or increased by reason of the provisions of subsections (b) and (c) of section 105 or the amendments made by such subsections [adding subsec. (g) to this section and enacting notes under this section and  section 3121 of this title ], and no lump-sum death payment under title II of the Social Security Act shall be payable or increased by reason of such provisions or amendments in the case of any individual who died prior to  Sept. 13, 1960 .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAX ON SELF-EMPLOYMENT INCOME',
   'part': ''},
  'content': 'This chapter may be cited as the “Self-Employment Contributions Act of 1954”.\n1984—Subsec. (b)(3).  Pub. L. 98–369  struck out par. (3) referring to section 6015 for provisions relating to declarations of estimated tax on self-employment income.\n1966—Subsec. (b)(3).  Pub. L. 89–368  added par. (3).\n1960—Subsec. (b)(2).  Pub. L. 86–778  included Guam and American Samoa.\nAmendment by  Pub. L. 98–369  applicable with respect to taxable years beginning after  Dec. 31, 1984 , see  section 414(a)(1) of Pub. L. 98–369 , set out as a note under  section 6654 of this title .\nAmendment by  Pub. L. 89–368  applicable with respect to taxable years beginning after  December 31, 1966 , see  section 102(d) of Pub. L. 89–368 , set out as a note under  section 6654 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'UNEARNED INCOME MEDICARE CONTRIBUTION',
   'part': ''},
  'content': 'A rule similar to the rule of section 469(e)(1)(B) shall apply for purposes of this subsection.\nThe term “net investment income” shall not include any distribution from a plan or arrangement described in section 401(a), 403(a), 403(b), 408, 408A, or 457(b).\nNet investment income shall not include any item taken into account in determining self-employment income for such taxable year on which a tax is imposed by section 1401(b).\nPub. L. 111–152, title I, §\u202f1402(a)(4) ,  Mar. 30, 2010 ,  124 Stat. 1063 , provided that:  “The amendments made by this subsection [enacting this chapter and amending  section 6654 of this title ] shall apply to taxable years beginning after  December 31, 2012 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Except as otherwise provided in subsection (c), all persons, in whatever capacity acting (including lessees or mortgagors of real or personal property, fiduciaries, employers, and all officers and employees of the United States) having the control, receipt, custody, disposal, or payment of any of the items of income specified in subsection (b) (to the extent that any of such items constitutes gross income from sources within the United States), of any nonresident alien individual or of any foreign partnership shall (except as otherwise provided in regulations prescribed by the Secretary under section 874) deduct and withhold from such items a tax equal to 30 percent thereof, except that in the case of any item of income specified in the second sentence of subsection (b), the tax shall be equal to 14 percent of such item.\nNo deduction or withholding under subsection (a) shall be required in the case of any item of income (other than compensation for personal services) which is effectively connected with the conduct of a trade or business within the United States and which is included in the gross income of the recipient under section 871(b)(2) for the taxable year.\nThe Secretary may authorize the tax under subsection (a) to be deducted and withheld from the interest upon any securities the owners of which are not known to the withholding agent.\nThe deduction and withholding in the case of interest on bonds, mortgages, or deeds of trust or other similar obligations of a corporation, within subsections (a), (b), and (c) of section 1451 (as in effect before its repeal by the Tax Reform Act of 1984) were it not for the fact that the maturity date of such obligations has been extended on or after  January 1, 1934 , and the liability assumed by the debtor exceeds 27½ percent of the interest, shall not exceed the rate of 27½ percent per annum.\nUnder regulations prescribed by the Secretary, compensation for personal services may be exempted from deduction and withholding under subsection (a).\nIn the case of gains described in section 631(b) or (c), and gains subject to tax under section 871(a)(1)(D), the amount required to be deducted and withheld shall, if the amount of such gain is not known to the withholding agent, be such amount, not exceeding 30 percent of the amount payable, as may be necessary to assure that the tax deducted and withheld shall not be less than 30 percent of such gain.\nNo deduction or withholding under subsection (a) shall be required in the case of amounts of per diem for subsistence paid by the United States Government (directly or by contract) to any nonresident alien individual who is engaged in any program of training in the United States under the Mutual Security Act of 1954, as amended.\nNo deduction or withholding under subsection (a) shall be required in the case of any amount received as an annuity if such amount is, under section 871(f), exempt from the tax imposed by section 871(a).\nThe Secretary may prescribe such regulations as may be necessary for the deduction and withholding of the tax on original issue discount subject to tax under section 871(a)(1)(C) including rules for the deduction and withholding of the tax on original issue discount from payments of interest.\nIn the case of portfolio interest (within the meaning of section 871(h)), no tax shall be required to be deducted and withheld from such interest unless the person required to deduct and withhold tax from such interest knows, or has reason to know, that such interest is not portfolio interest by reason of section 871(h)(3) or (4).\nNo tax shall be required to be deducted and withheld under subsection (a) from any amount described in section 871(i)(2).\nNo tax shall be required to be deducted and withheld under subsection (a) from any amount exempt from the tax imposed by section 871(a)(1)(A) by reason of section 871(j).\nNo tax shall be required to be deducted and withheld under subsection (a) from any amount exempt from the tax imposed by section 871(a)(1)(A) by reason of section 871(k).\nFor purposes of subparagraph (A), clause (i) of section 871(k)(1)(B) shall not apply to any dividend unless the regulated investment company knows that such dividend is a dividend referred to in such clause. A similar rule shall apply with respect to the exception contained in section 871(k)(2)(B).\nSubject to such terms and conditions as may be provided by regulations prescribed by the Secretary, subsection (a) shall not apply in the case of a foreign partnership engaged in trade or business within the United States if the Secretary determines that the requirements of subsection (a) impose an undue administrative burden and that the collection of the tax imposed by section 871(a) on the members of such partnership who are nonresident alien individuals will not be jeopardized by the exemption.\nFor purposes of this section, the term “nonresident alien individual” includes an alien resident of Puerto Rico.\nFor sources of income derived from, or for services performed with respect to, the exploration or exploitation of natural resources on submarine areas adjacent to the territorial waters of the United States, see section 638.\nFor provision treating 85 percent of social security benefits as subject to withholding under this section, see section 871(a)(3).\nSection 101(a)(15) of the Immigration and Nationality Act, referred to in subsec. (b), is classified to  section 1101(a)(15) of Title 8 , Aliens and Nationality.\nThe Mutual Educational and Cultural Exchange Act of 1961, referred to in subsec. (b)(2)(C), is  Pub. L. 87–256 ,  Sept. 21, 1961 ,  75 Stat. 527 , which is classified principally to chapter 33 (§\u202f2451 et seq.) of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under  section 2451 of Title 22  and Tables.\nThe Tax Reform Act of 1984, referred to in subsec. (c)(3), is division A [§§\u202f5 to 1082] of  Pub. L. 98–369 ,  July 18, 1984 ,  98 Stat. 494 , which was approved  July 18, 1984 . For complete classification of this Act to the Code, see Short Title of 1984 Amendments note set out under  section 1 of this title  and Tables.\nThe Mutual Security Act of 1954, referred to in subsec. (c)(6), is  act Aug. 26, 1954, ch. 937 ,  68 Stat. 832 , as amended by acts  July 8, 1955, ch. 301 ,  69 Stat. 283 ;  July 18, 1956, ch. 627 , §§\u202f2 to 11,  70 Stat. 555 ;  Aug. 14, 1957 ,  Pub. L. 85–141 ,  71 Stat. 355 ;  June 30, 1958 ,  Pub. L. 85–477 , ch. 1, §§\u202f101 to 103, ch. II, §§\u202f201 to 205, ch. III, §\u202f301, ch. IV, §\u202f401, ch. V, §\u202f501,  72 Stat. 261 ;  July 24, 1959 ,  Pub. L. 86–108, §\u202f2 , ch. 1, §\u202f101, ch. II, §§\u202f201 to 205(a) to (i), (k) to (n), ch. III, §\u202f301, ch. IV, §\u202f401(a) to (k), (m),  73 Stat. 246 ;  May 14, 1960 ,  Pub. L. 86–472 , ch. I to V,  74 Stat. 134 , which was principally classified to chapter 24 (§\u202f1750 et seq.) of Title 22, Foreign Relations and Intercourse, and which was repealed by  act July 18, 1956, ch. 627, §\u202f8(m) ,  70 Stat. 559 ,  Pub. L. 85–141 , §§\u202f2(e), 3, 4(b), 11(d),  Aug. 14, 1957 ,  71 Stat. 356 ,  Pub. L. 86–108 , ch. II, §§\u202f205(j), ch. IV, 401(1),  July 24, 1959 ,  73 Stat. 250 ,  Pub. L. 86–472 , ch. II, §§\u202f203(d), 204(k),  May 14, 1960 ,  74 Stat. 138 ,  Pub. L. 87–195 , pt. III, §\u202f642(a)(2),  Sept. 4, 1961 ,  75 Stat. 460 ,  Pub. L. 94–329, title II, §\u202f212(b)(1) ,  June 30, 1976 , 90 Stat 745, except for sections 1754, 1783, 1796, 1853, 1922, 1928, and 1937 of Title 22. For complete classification of this Act to the Code, see Short Title note set out under  section 1754 of Title 22  and Tables.\n2014—Subsecs. (b), (c)(5).  Pub. L. 113–295  substituted “and gains subject to tax under section 871(a)(1)(D)” for “gains subject to tax under section 871(a)(1)(D), and gains on transfers described in section 1235 made on or before  October 4, 1966 ”.\n2004—Subsec. (c)(12).  Pub. L. 108–357  added par. (12).\n1997—Subsec. (g).  Pub. L. 105–34  substituted “85 percent” for “one-half”.\n1994—Subsec. (b).  Pub. L. 103–296  substituted “(J), (M), or (Q)” for “(J), or (M)”.\n1993—Subsec. (c)(9).  Pub. L. 103–66  substituted “section 871(h)(3) or (4)” for “section 871(h)(3)”.\n1992—Subsecs. (b), (c)(5).  Pub. L. 102–318  struck out “402(a)(2), 403(a)(2), or” before “631(b)”.\n1990—Subsec. (b)(2).  Pub. L. 101–508  inserted “section” before “170(b)(1)(A)(ii)”.\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f1001(d)(2)(A) , amended second sentence generally. Prior to amendment, second sentence read as follows: “The items of income referred to in subsection (a) from which tax shall be deducted and withheld at the rate of 14 percent are amounts which are received by a nonresident alien individual who is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101(a)(15) of the Immigration and Nationality Act and which are incident to a qualified scholarship to which section 117(a) applies, but only to the extent such amounts are includible in gross income.”\nSubsec. (c)(11).  Pub. L. 100–647, §\u202f6134(a)(2) , added par. (11).\n1986—Subsec. (b).  Pub. L. 99–514, §\u202f123(b)(2) , amended second sentence generally. Prior to amendment, second sentence read as follows: “The items of income referred to in subsection (a) from which tax shall be deducted and withheld at the rate of 14 percent are—\n“(1) that portion of any scholarship or fellowship grant which is received by a nonresident alien individual who is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101(a)(15) of the Immigration and Nationality Act, as amended, and which is not excluded from gross income under section 117(a)(1) solely by reason of section 117(b)(2)(B); and\n“(2) amounts described in subparagraphs (A), (B), (C), and (D) of section 117(a)(2) which are received by any such nonresident alien individual and which are incident to a scholarship or fellowship grant to which section 117(a)(1) applies, but only to the extent such amounts are includable in gross income.”\nSubsec. (c)(9).  Pub. L. 99–514, §\u202f1810(d)(3)(D) , substituted “section 871(h)” for “871(h)(2)”.\nSubsec. (c)(10).  Pub. L. 99–514, §\u202f1214(c)(3) , added par. (10).\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f474(r)(29)(G) , struck out “except in the cases provided for in section 1451 and” before “except as otherwise provided in regulations”.\nSubsec. (b).  Pub. L. 98–369, §\u202f42(a)(13) , substituted “section 1273” for “section 1232(b)”.\nSubsec. (c)(3).  Pub. L. 98–369, §\u202f474(r)(29)(H) , inserted “(as in effect before its repeal by the Tax Reform Act of 1984)”.\nSubsec. (c)(9).  Pub. L. 98–369, §\u202f127(e)(1) , added par. (9).\n1983—Subsec. (g).  Pub. L. 98–21  added subsec. (g).\n1976— Pub. L. 94–455  struck out in subsecs. (a), (c)(2), (4), (8), (d), “or his delegate” after “Secretary”.\n1971—Subsec. (b).  Pub. L. 92–178, §\u202f313(a) , inserted “(other than original issue discount as defined in section 1232(b))” after “interest”.\nSubsec. (c)(8).  Pub. L. 92–178, §\u202f313(d) , added par. (8).\n1969—Subsec. (f).  Pub. L. 91–172  added subsec. (f).\n1966—Subsec. (a).  Pub. L. 89–809, §\u202f103(h)(1) , substituted “or of any foreign partnership” for “,\u2000or of any partnership not engaged in trade or business within the United States and composed in whole or in part of nonresident aliens,”.\nSubsec. (b).  Pub. L. 89–809, §\u202f103(h)(2) –(4), struck out “(except interest on deposits with persons carrying on the banking business paid to persons not engaged in business in the United States)” after “The items of income referred to in subsection (a) are interest” and substituted “gains described in section 402(a)(2), 403(a)(2), or 631(b) or (c), amounts subject to tax under section 871(a)(1)(C), gains subject to tax under section 871(a)(1)(D), and gains on transfers described in section 1235 made on or before  October 4, 1966 ” for “and amounts described in section 402(a)(2), section 403(a)(2), section 631(b) and (c), and section 1235, which are considered to be gains from the sale or exchange of capital assets” in text preceding par. (1), and inserted provision for treatment of items of income referred to in subsec. (a) in the case of nonresident alien individuals who are members of domestic partnerships.\nSubsec. (c)(1).  Pub. L. 89–809, §\u202f103(h)(5) , substituted “in the case of any item of income (other than compensation for personal services) which is effectively connected with the conduct of a trade or business within the United States and which is included in the gross income of the recipient under section 871(b)(2) for the taxable year” for “in the case of dividends paid by a foreign corporation unless (A) such corporation is engaged in trade or business within the United States, and (B) more than 85 percent of the gross income of such corporation for the 3-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence) was derived from sources within the United States as determined under part I of subchapter N of chapter 1” after “shall be required”.\nSubsec. (c)(4).  Pub. L. 89–809, §\u202f103(h)(6) , struck out provisions which had served to limit to compensation for personal services of nonresident alien individuals who enter and leave the United States at frequent intervals and of nonresident alien individuals for the period they are temporarily present in the United States as a nonimmigrant under subparagraph (F) and (J) of section 101(a)(15) of the Immigration and Nationality Act, as amended, the application of the exemption from deduction and withholding under subsec. (a), leaving the exemption under subsec. (a) applicable to compensation for personal services without further limitation.\nSubsec. (c)(5).  Pub. L. 89–809, §\u202f103(h)(7) , substituted “gains described in section 402(a)(2), 403(a)(2), or 631(b) or (c), gains subject to tax under section 871 (a)(1)(D), and gains on transfers described in section 1235 made on or before  October 4, 1966 ,” for “amounts described in section 402(a)(2), section 403(a)(2), section 631(b) and (c), and section 1235, which are considered to be gains from the sale or exchange of capital assets,” and “amounts payable,” for “proceeds from such sale or exchange,”.\nSubsec. (c)(7).  Pub. L. 89–809, §\u202f103(h)(8) , added par. (7).\nSubsecs. (d), (e).  Pub. L. 89–809, §\u202f103(h)(9) , added subsec. (d) and redesignated former subsec. (d) as (e).\n1964—Subsecs. (a), (b).  Pub. L. 88–272  reduced the withholding rate from 18% to 14%.\n1961—Subsec. (a).  Pub. L. 87–256, §\u202f110(d)(1) , required a tax equal to 18 percent of the item in the case of any item of income specified in second sentence of subsection (b).\nSubsec. (b).  Pub. L. 87–256, §\u202f110(d)(2) , inserted provisions listing items of income from which tax shall be deducted and withheld at the rate of 18 percent.\nSubsec. (c)(4).  Pub. L. 87–256, §\u202f110(d)(3) , authorized the exemption from deduction and withholding of the compensation for personal services of a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subpar. (F) or (J) of section 101(a)(15) of the Immigration and Nationality Act, as amended.\n1958—Subsecs. (b), (c)(5).  Pub. L. 85–866  inserted “section 403(a)(2),” after “section 402(a)(2),”.\n1956—Subsec. (c)(6). Act  July 18, 1956 , added section 544(f) to act  Aug. 26, 1954 , which section amended this subsection by adding par. (6).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–357  applicable to dividends with respect to taxable years of regulated investment companies beginning after  Dec. 31, 2004 , see  section 411(d)(1) of Pub. L. 108–357 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 103–296  effective with calendar quarter following  Aug. 15, 1994 , see  section 320(c) of Pub. L. 103–296 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 103–66  applicable to interest received after  Dec. 31, 1993 , see  section 13237(d) of Pub. L. 103–66 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 1001(d)(2)(A) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 123(b)(2) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , but only in the case of scholarships and fellowships granted after  Aug. 16, 1986 , see  section 151(d) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1214(c)(3) of Pub. L. 99–514  applicable to payments made in a taxable year of the payor beginning after  Dec. 31, 1986 , except as otherwise provided, see  section 1214(d) of Pub. L. 99–514 , as amended, set out as a note under  section 861 of this title .\nAmendment by  section 1810(d)(3)(D) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 42(a)(13) of Pub. L. 98–369  applicable to taxable years ending after  July 18, 1984 , see  section 44 of Pub. L. 98–369 , set out as an Effective Date note under  section 1271 of this title .\nAmendment by  section 127(e)(1) of Pub. L. 98–369  applicable to interest received after  July 18, 1984 , with respect to obligations issued after such date, in taxable years ending after such date, see  section 127(g)(1) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by section 474(r)(29)(G), (H) of  Pub. L. 98–369  not applicable with respect to obligations issued before  Jan. 1, 1984 , see  section 475(b) of Pub. L. 98–369 , set out as a note under  section 33 of this title .\nAmendment by  Pub. L. 98–21  applicable to benefits received after  Dec. 31, 1983 , in taxable years ending after such date, except for any portion of a lump-sum payment of social security benefits received after  Dec. 31, 1983 , if the generally applicable payment date for such portion was before  Jan. 1, 1984 , see  section 121(g) of Pub. L. 98–21 , set out as an Effective Date note under  section 86 of this title .\nAmendment by  Pub. L. 92–178  applicable with respect to payments occurring on or after  Apr. 1, 1972 , see  section 313(f) of Pub. L. 92–178 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to payments made in taxable years of recipients beginning after  Dec. 31, 1966 , see  section 103(n)(2) of Pub. L. 89–809 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 88–272  applicable to payments made after seventh day following  Feb. 24, 1964 , see  section 302(d) of Pub. L. 88–272 , set out as a note under  section 3402 of this title .\nPub. L. 87–256, §\u202f110(h)(2) ,  Sept. 21, 1961 ,  75 Stat. 537 , provided that:  “The amendments made by subsection (d) of this section [amending this section] shall apply with respect to payments made after  December 31, 1961 .”\nAmendment by  Pub. L. 85–866  effective  Sept. 3, 1958 , see  section 40(c) of Pub. L. 85–866 , set out as a note under  section 871 of this title .\nSection 544(f) of act  Aug. 26, 1954 , cited as a credit to this section, was repealed by  Pub. L. 85–141 , except insofar as such section 544(f) affected this section.\nFor nonapplication of amendments by sections 123(b)(2) and 1214(c)(3) of  Pub. L. 99–514  to the extent application of such amendments would be contrary to any treaty obligation of the United States in effect on  Oct. 22, 1986 , with provision that for such purposes any amendment by title I of  Pub. L. 100–647  be treated as if it had been included in the provision of  Pub. L. 99–514  to which such amendment relates, see section 1012(aa)(3), (4) of  Pub. L. 100–647 , set out as a note under  section 861 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 97–248, title III, §\u202f342 ,  Sept. 3, 1982 ,  96 Stat. 635 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Not later than 2 years after the date of the enactment of this Act [ Sept. 3, 1982 ], the Secretary of the Treasury or his delegate shall prescribe regulations establishing certification procedures, refund procedures, or other procedures which ensure that any benefit of any treaty relating to withholding of tax under sections 1441 and 1442 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] is available only to persons entitled to such benefit.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'In the case of foreign corporations subject to taxation under this subtitle, there shall be deducted and withheld at the source in the same manner and on the same items of income as is provided in section 1441 a tax equal to 30 percent thereof. For purposes of the preceding sentence, the references in section 1441(b) to sections 871(a)(1)(C) and (D) shall be treated as referring to sections 881(a)(3) and (4), the reference in section 1441(c)(1) to section 871(b)(2) shall be treated as referring to section 842 or section 882(a)(2), as the case may be, the reference in section 1441(c)(5) to section 871(a)(1)(D) shall be treated as referring to section 881(a)(4), the reference in section 1441(c)(8) to section 871(a)(1)(C) shall be treated as referring to section 881(a)(3), the references in section 1441(c)(9) to sections 871(h) and 871(h)(3) or (4) shall be treated as referring to sections 881(c) and 881(c)(3) or (4), the reference in section 1441(c)(10) to section 871(i)(2) shall be treated as referring to section 881(d), and the references in section 1441(c)(12) to sections 871(a) and 871(k) shall be treated as referring to sections 881(a) and 881(e) (except that for purposes of applying subparagraph (A) of section 1441(c)(12), as so modified, clause (ii) of section 881(e)(1)(B) shall not apply to any dividend unless the regulated investment company knows that such dividend is a dividend referred to in such clause).\nSubject to such terms and conditions as may be provided by regulations prescribed by the Secretary, subsection (a) shall not apply in the case of a foreign corporation engaged in trade or business within the United States if the Secretary determines that the requirements of subsection (a) impose an undue administrative burden and that the collection of the tax imposed by section 881 on such corporation will not be jeopardized by the exemption.\nFor purposes of this section, the term “foreign corporation” does not include a corporation created or organized in Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands or under the law of any such possession if the requirements of subparagraphs (A), (B), and (C) of section 881(b)(1) are met with respect to such corporation.\nIf, on or after the date of the enactment of this paragraph, an increase in the rate of the Commonwealth of Puerto Rico’s withholding tax which is generally applicable to dividends paid to United States corporations not engaged in a trade or business in the Commonwealth to a rate greater than 10 percent takes effect, this paragraph shall not apply to dividends received on or after the effective date of the increase.\nThe date of the enactment of this paragraph, referred to in subsec. (c)(2)(B), is the date of enactment of  Pub. L. 108–357 , which was approved  Oct. 22, 2004 .\n2004—Subsec. (a).  Pub. L. 108–357, §\u202f411(a)(3)(B) , substituted “the reference in section 1441(c)(10)” for “and the reference in section 1441(c)(10)” and inserted before period at end “,\u2000and the references in section 1441(c)(12) to sections 871(a) and 871(k) shall be treated as referring to sections 881(a) and 881(e) (except that for purposes of applying subparagraph (A) of section 1441(c)(12), as so modified, clause (ii) of section 881(e)(1)(B) shall not apply to any dividend unless the regulated investment company knows that such dividend is a dividend referred to in such clause)”.\nSubsec. (c).  Pub. L. 108–357, §\u202f420(b) , designated existing provisions as par. (1), inserted heading, and added par. (2).\n1993—Subsec. (a).  Pub. L. 103–66  substituted “871(h)(3) or (4)” for “871(h)(3)” and “881(c)(3) or (4)” for “881(c)(3)”.\n1988—Subsec. (a).  Pub. L. 100–647  struck out “and” after “to section 881(a)(3),” and inserted before period at end “,\u2000and the reference in section 1441(c)(10) to section 871(i)(2) shall be treated as referring to section 881(d)”.\n1986—Subsec. (a).  Pub. L. 99–514, §\u202f1810(d)(3)(E) , substituted “871(h)” for “871(h)(2)”, “881(c)” for “881(c)(2)”, and “1441(c)(9)” for “1449(c)(9)”.\nSubsec. (c).  Pub. L. 99–514, §\u202f1273(b)(2)(B) , amended subsec. (c) generally, substituting reference to “certain possessions corporations” for reference to “certain Guam and Virgin Islands corporations” in heading, and in text extending “foreign corporation” exception so as to not include corporation created or organized in Guam, American Samoa, Northern Mariana Islands, or the Virgin Islands, and striking out par. (2) which declared that par. (1) not apply to tax imposed in Guam, and par. (3) which referred to sections 934 and 943a for tax imposed in Virgin Islands.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f474(r)(29)(I) , struck out “or section 1451” after “provided in section 1441” and struck out “;\u2000except that, in the case of interest described in section 1451 (relating to tax-free covenant bonds), the deduction and withholding shall be at the rate specified therein” after “a tax equal to 30 percent thereof”.\nPub. L. 98–369, §\u202f127(e)(2) , struck out “and” after “section 881(a)(4),” and inserted “,\u2000and the references in section 1449(c)(9) to sections 871(h)(2) and 871(h)(3) shall be treated as referring to sections 881(c)(2) and 881(c)(3)”.\nSubsec. (c).  Pub. L. 98–369, §\u202f130(b) , substituted provision relating to exception for certain Guam and Virgin Islands corporations for provision relating to exception for Guam corporations.\n1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” in two places.\n1972—Subsec. (c).  Pub. L. 92–606  added subsec. (c).\n1971—Subsec. (a).  Pub. L. 92–178  provided that reference in section 1441(c)(8) to section 871(a)(1)(C) shall be treated as referring to section 881(a)(3).\n1966— Pub. L. 89–809  limited the withholding of tax at the 30 percent rate to items of fixed or determinable United States source income not effectively connected with the conduct of a trade or business in the United States and authorized the granting of an exemption from the withholding requirement in the case of a foreign corporation engaged in trade or business within the United States if the Secretary or his delegate determines that the withholding imposes an undue administrative burden and that the collection of the tax will not be jeopardized by the exemption.\nAmendment by  section 411(a)(3)(B) of Pub. L. 108–357  applicable to dividends with respect to taxable years of regulated investment companies beginning after  Dec. 31, 2004 , see  section 411(d)(1) of Pub. L. 108–357 , set out as a note under  section 871 of this title .\nAmendment by  section 420(b) of Pub. L. 108–357  applicable to dividends paid after  Oct. 22, 2004 , see  section 420(d) of Pub. L. 108–357 , set out as a note under  section 881 of this title .\nAmendment by  Pub. L. 103–66  applicable to interest received after  Dec. 31, 1993 , see  section 13237(d) of Pub. L. 103–66 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 1273(b)(2)(B) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 1277 of Pub. L. 99–514 , set out as a note under  section 931 of this title .\nAmendment by  section 1810(d)(3)(E) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 127(e)(2) of Pub. L. 98–369  applicable to interest received after  July 18, 1984 , with respect to obligations issued after such date, in taxable years after such date, see  section 127(g)(1) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by  section 130(b) of Pub. L. 98–369  applicable to payments made after  Mar. 1, 1984 , in taxable years ending after such date, see  section 130(d) of Pub. L. 98–369 , set out as a note under  section 881 of this title .\nAmendment by  section 474(r)(29)(I) of Pub. L. 98–369  not applicable with respect to obligations issued before  Jan. 1, 1984 , see  section 475(b) of Pub. L. 98–369 , set out as a note under  section 33 of this title .\nPub. L. 92–606, §\u202f2 ,  Oct. 31, 1972 ,  86 Stat. 1497 , provided in part that:  “The amendment made by section 1(e)(2) [amending this section] shall take effect on the day after the date of enactment of this Act [ Oct. 31, 1972 ].”\nAmendment by  Pub. L. 92–178  applicable with respect to payments occurring on or after  Apr. 1, 1972 , see  section 313(f) of Pub. L. 92–178 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 104(n) of Pub. L. 89–809 , set out as a note under  section 11 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFor provisions relating to withholding of tax on nonresident aliens and foreign corporations, see  Pub. L. 97–248, title III, §\u202f342 ,  Sept. 3, 1982 ,  96 Stat. 635 , set out as a note under  section 1441 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'In the case of income of a foreign organization subject to the tax imposed by section 511, this chapter shall apply to income includible under section 512 in computing its unrelated business taxable income, but only to the extent and subject to such conditions as may be provided under regulations prescribed by the Secretary.\nIn the case of income of a foreign organization subject to the tax imposed by section 4948(a), this chapter shall apply, except that the deduction and withholding shall be at the rate of 4 percent and shall be subject to such conditions as may be provided under regulations prescribed by the Secretary.\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary” in two places.\n1969— Pub. L. 91–172, §\u202f101(j)(22) , designated existing provisions as subsec. (a) and added subsec. (b).\nSubsec. (a).  Pub. L. 91–172, §\u202f121(d)(2)(C) , substituted “income” for “rents” after “this chapter shall apply to”.\nAmendment by  section 101(j)(22) of Pub. L. 91–172  effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nAmendment by  section 121(d)(2)(C) of Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'For purposes of determining the withholding tax liability incurred in the Virgin Islands pursuant to this title (as made applicable to the Virgin Islands) with respect to amounts received from sources within the Virgin Islands by citizens and resident alien individuals of the United States, and corporations organized in the United States, the rate of withholding tax under sections 1441 and 1442 on income subject to tax under section 871(a)(1) or 881 shall not exceed the rate of tax on such income under section 871(a)(1) or 881, as the case may be.\n1988— Pub. L. 100–647  struck out “(as modified by section 934A)” before “shall not exceed”.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to payments made after  Jan. 12, 1983 , see  section 1(e)(2) of Pub. L. 97–455 , set out as a note under  section 934 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Except as otherwise provided in this section, in the case of any disposition of a United States real property interest (as defined in section 897(c)) by a foreign person, the transferee shall be required to deduct and withhold a tax equal to 15 percent of the amount realized on the disposition.\nNo person shall be required to deduct and withhold any amount under subsection (a) with respect to a disposition if paragraph (2), (3), (4), (5), or (6) applies to the transaction.\nExcept as provided in paragraph (7), this paragraph applies to the disposition if the transferor furnishes to the transferee an affidavit by the transferor stating, under penalty of perjury, the transferor’s United States taxpayer identification number and that the transferor is not a foreign person.\nThis paragraph applies to the disposition if the transferee receives a qualifying statement at such time, in such manner, and subject to such terms and conditions as the Secretary may by regulations prescribe.\nThis paragraph applies if the disposition is of a share of a class of stock that is regularly traded on an established securities market.\nNo person shall be required to deduct and withhold any amount under subsection (a) with respect to a disposition which is treated as a disposition of a United States real property interest solely by reason of section 897(h)(5).\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph.\nThe amount required to be withheld under this section with respect to any disposition shall not exceed the amount (if any) determined under subparagraph (B) as the transferor’s maximum tax liability.\nAt the request of the transferor or transferee, the Secretary shall determine, with respect to any disposition, the transferor’s maximum tax liability.\nSubject to such terms and conditions as the Secretary may by regulations prescribe, a transferor may seek and obtain a refund of any amounts withheld under this section in excess of the transferor’s maximum tax liability.\nAt the request of the transferor or transferee, the Secretary may prescribe a reduced amount to be withheld under this section if the Secretary determines that to substitute such reduced amount will not jeopardize the collection of the tax imposed by section 871(b)(1) or 882(a)(1).\nThe Secretary shall take action with respect to any request described in subparagraph (A) within 90 days after the Secretary receives the request.\nIf any transferor’s agent, transferee’s agent, or qualified substitute is required by paragraph (1) to furnish notice, but fails to furnish such notice at such time or times and in such manner as may be required by regulations, such agent or substitute shall have the same duty to deduct and withhold that the transferee would have had if such agent or substitute had complied with paragraph (1).\nAn agent’s or substitute’s liability under subparagraph (A) shall be limited to the amount of compensation the agent or substitute derives from the transaction.\nIn the case of any distribution by a foreign corporation on which gain is recognized under subsection (d) or (e) of section 897, the foreign corporation shall deduct and withhold under subsection (a) a tax equal to the highest rate of tax in effect for the taxable year under section 11(b) multiplied by the amount of gain recognized on such distribution under such subsection.\nIf a domestic corporation which is or has been a United States real property holding corporation (as defined in section 897(c)(2)) during the applicable period specified in section 897(c)(1)(A)(ii) distributes property to a foreign person in a transaction to which section 302 or part II of subchapter C applies, such corporation shall deduct and withhold under subsection (a) a tax equal to 15 percent of the amount realized by the foreign shareholder. The preceding sentence shall not apply if, as of the date of the distribution, interests in such corporation are not United States real property interests by reason of section 897(c)(1)(B). Rules similar to the rules of the preceding provisions of this paragraph shall apply in the case of any distribution to which section 301 applies and which is not made out of the earnings and profits of such a domestic corporation.\nA domestic or foreign partnership, the trustee of a domestic or foreign trust, or the executor of a domestic or foreign estate shall be required to deduct and withhold under subsection (a) a tax equal to 15 percent of the fair market value (as of the time of the taxable distribution) of any United States real property interest distributed to a partner of the partnership or a beneficiary of the trust or estate, as the case may be, who is a foreign person in a transaction which would constitute a taxable distribution under the regulations promulgated by the Secretary pursuant to section 897.\nTo the extent provided in regulations, the transferee of a partnership interest or of a beneficial interest in a trust or estate shall be required to deduct and withhold under subsection (a) a tax equal to 15 percent of the amount realized on the disposition.\nIf any portion of a distribution from a qualified investment entity (as defined in section 897(h)(4)) to a nonresident alien individual or a foreign corporation is treated under section 897(h)(1) as gain realized by such individual or corporation from the sale or exchange of a United States real property interest, the qualified investment entity shall deduct and withhold under subsection (a) a tax equal to the highest rate of tax in effect for the taxable year under section 11(b) (or, to the extent provided in regulations, 20 percent) multiplied by the amount so treated.\nThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations providing for exceptions from provisions of this subsection and regulations for the application of this subsection in the case of payments through 1 or more entities.\nThe term “transferor” means the person disposing of the United States real property interest.\nThe term “transferee” means the person acquiring the United States real property interest.\nThe term “transferor’s unsatisfied withholding liability” means the withholding obligation imposed by this section on the transferor’s acquisition of the United States real property interest or on the acquisition of a predecessor interest, to the extent such obligation has not been satisfied.\n2017—Subsec. (e)(1).  Pub. L. 115–97, §\u202f13001(b)(3)(A) , in introductory provisions, substituted “the highest rate of tax in effect for the taxable year under section 11(b)” for “35 percent” and “multiplied by the gain” for “of the gain”.\nSubsec. (e)(2).  Pub. L. 115–97, §\u202f13001(b)(3)(B) , substituted “the highest rate of tax in effect for the taxable year under section 11(b) multiplied by the amount” for “35 percent of the amount”.\nSubsec. (e)(6).  Pub. L. 115–97, §\u202f13001(b)(3)(C) , substituted “the highest rate of tax in effect for the taxable year under section 11(b)” for “35 percent” and “multiplied by the amount” for “of the amount”.\n2015—Subsec. (a).  Pub. L. 114–113, §\u202f324(a) , substituted “15 percent” for “10 percent”.\nSubsec. (c)(4).  Pub. L. 114–113, §\u202f324(b) , added par. (4).\nSubsec. (e)(3) to (5).  Pub. L. 114–113, §\u202f324(a) , substituted “15 percent” for “10 percent”.\nSubsec. (f)(3).  Pub. L. 114–113, §\u202f323(b) , substituted “any person other than—” for “any person other than a United States person.” and added subpars. (A) and (B).\n2013—Subsec. (e)(1).  Pub. L. 112–240, §\u202f102(c)(1)(C) , substituted “20 percent” for “15 percent” in introductory provisions.\nSubsec. (e)(6).  Pub. L. 112–240, §\u202f102(c)(3) , substituted “20 percent” for “15 percent (20 percent in the case of taxable years beginning after  December 31, 2010 )”.\n2008—Subsec. (b)(7).  Pub. L. 110–289, §\u202f3024(c)(1) , amended par. (7) generally. Prior to amendment, par. (7) related to special rules for paragraphs (2) and (3).\nSubsec. (b)(9).  Pub. L. 110–289, §\u202f3024(a) , added par. (9).\nSubsec. (d).  Pub. L. 110–289, §\u202f3024(c)(2)(C) , substituted “,\u2000transferee’s agents, or qualified substitutes” for “or transferee’s agents” in heading.\nSubsec. (d)(1).  Pub. L. 110–289, §\u202f3024(c)(2)(A) , amended par. (1) generally. Prior to amendment, par. (1) related to notice of false affidavit; foreign corporations.\nSubsec. (d)(2).  Pub. L. 110–289, §\u202f3024(c)(2)(B) , amended par. (2) generally. Prior to amendment, par. (2) related to failure to furnish notice.\nSubsec. (f)(6).  Pub. L. 110–289, §\u202f3024(b) , added par. (6).\n2006—Subsec. (b)(8).  Pub. L. 109–222, §\u202f506(b) , added par. (8).\nSubsec. (e)(6), (7).  Pub. L. 109–222, §\u202f505(b) , added par. (6) and redesignated former par. (6) as (7).\n2003—Subsec. (e)(1).  Pub. L. 108–27  substituted “15 percent” for “20 percent”.\n1997—Subsec. (e)(1).  Pub. L. 105–34  substituted “20 percent” for “28 percent” in introductory provisions.\n1996—Subsec. (e)(3).  Pub. L. 104–188  inserted at end “Rules similar to the rules of the preceding provisions of this paragraph shall apply in the case of any distribution to which section 301 applies and which is not made out of the earnings and profits of such a domestic corporation.”\n1993—Subsec. (e)(1), (2).  Pub. L. 103–66  substituted “35 percent” for “34 percent”.\n1988—Subsec. (e)(1).  Pub. L. 100–647  inserted “(or, to the extent provided in regulations, 28 percent)” after “to 34 percent”.\n1986—Subsec. (b)(3).  Pub. L. 99–514, §\u202f1810(f)(2) , amended par. (3) generally, substituting “interests in corporation not United States real property interests” for “it is not a United States real property holding corporation” in heading, striking out the comma before “if the domestic corporation” in introductory provisions, inserting subpar. (A) designation and adding subpar. (B).\nSubsec. (d)(1)(A).  Pub. L. 99–514, §\u202f1810(f)(3)(B) , substituted “paragraph (2)” for “paragraph (2)(A)”.\nSubsec. (d)(1)(B)(i).  Pub. L. 99–514, §\u202f1810(f)(3)(A) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any transferor’s agent, the transferor is a foreign corporation or such agent has actual knowledge that such affidavit is false, or”.\nSubsec. (e)(1).  Pub. L. 99–514, §\u202f311(b)(4) , substituted “34 percent” for “28 percent”.\nPub. L. 99–514, §\u202f1810(f)(4) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “A domestic partnership, the trustee of a domestic trust, or the executor of a domestic estate shall be required to deduct and withhold under subsection (a) a tax equal to 10 percent of any amount of which such partnership, trustee, or executor has custody which is—\n“(A) attributable to the disposition of a United States real property interest (as defined in section 897(c), other than a disposition described in paragraph (4) or (5)), and\n“(B) either—\n“(i) includible in the distributive share of a partner of the partnership who is a foreign person,\n“(ii) includible in the income of a beneficiary of the trust or estate who is a foreign person, or\n“(iii) includible in the income of a foreign person under the provisions of section 671.”\nSubsec. (e)(2).  Pub. L. 99–514, §\u202f311(b)(4) , substituted “34 percent” for “28 percent”.\nSubsec. (e)(3).  Pub. L. 99–514, §\u202f1810(f)(5) , inserted “The preceding sentence shall not apply if, as of the date of the distribution, interests in such corporation are not United States real property interests by reason of section 897(c)(1)(B).”\nSubsec. (e)(4).  Pub. L. 99–514, §\u202f1810(f)(6) , substituted “section 897” for “section 897(g)”.\nSubsec. (e)(6).  Pub. L. 99–514, §\u202f1810(f)(8) , inserted “and regulations for the application of this subsection in the case of payments through 1 or more entities”.\nAmendment by  Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , see  section 13001(c)(2) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 323(b) of Pub. L. 114–113  applicable to dispositions and distributions after  Dec. 18, 2015 , see  section 323(c) of Pub. L. 114–113 , set out as a note under  section 897 of this title .\nPub. L. 114–113, div. Q, title III, §\u202f324(c) ,  Dec. 18, 2015 ,  129 Stat. 3103 , provided that:  “The amendments made by this section [amending this section] shall apply to dispositions after the date which is 60 days after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nAmendment by  Pub. L. 112–240  applicable to taxable years beginning after  Dec. 31, 2012  and applicable to amounts paid on or after  Jan. 1, 2013 , see  section 102(d) of Pub. L. 112–240 , set out as a note under  section 1 of this title .\nPub. L. 110–289, div. C, title I, §\u202f3024(d) ,  July 30, 2008 ,  122 Stat. 2896 , provided that:  “The amendments made by this section [amending this section] shall apply to dispositions of United States real property interests after the date of the enactment of this Act [ July 30, 2008 ].”\nAmendment by  section 505(b) of Pub. L. 109–222  applicable to taxable years of qualified investment entities beginning after  Dec. 31, 2005 , except that no amount shall be required to be withheld under section 1441, 1442, or 1445 of the Internal Revenue Code of 1986 with respect to any distribution before  May 17, 2006  if such amount was not otherwise required to be withheld under any such section as in effect before such amendments, see  section 505(d) of Pub. L. 109–222 , set out as a note under  section 852 of this title .\nAmendment by  section 506(b) of Pub. L. 109–222  applicable to taxable years beginning after  Dec. 31, 2005 , except that such amendments shall not apply to any distribution, or substitute dividend payment, occurring before the date that is 30 days after  May 17, 2006 , see  section 506(c) of Pub. L. 109–222 , set out as a note under  section 897 of this title .\nAmendment by  Pub. L. 108–27  applicable to amounts paid after  May 28, 2003 , see  section 301(d)(2) of Pub. L. 108–27 , set out as an Effective and Termination Dates of 2003 Amendment note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable only to amounts paid after  Aug. 5, 1997 , see  section 311(d)(2) of Pub. L. 105–34 , set out as a note under  section 1 of this title .\nPub. L. 104–188, title I, §\u202f1704(c)(2) ,  Aug. 20, 1996 ,  110 Stat. 1878 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to distributions after the date of the enactment of this Act [ Aug. 20, 1996 ].”\nPub. L. 100–647, title I, §\u202f1003(b)(3) ,  Nov. 10, 1988 ,  102 Stat. 3384 , provided that the amendment made by that section is effective for taxable years beginning after  Dec. 31, 1987 .\nAmendment by  section 311(b)(4) of Pub. L. 99–514  applicable to payments made after  Dec. 31, 1986 , see  section 311(c) of Pub. L. 99–514 , as amended, set out as a note under  section 593 of this title .\nAmendment by section 1810(f)(2), (3), (5), (6), (8) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1810(f)(4)(B) ,  Oct. 22, 1986 ,  100 Stat. 2827 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to dispositions after the day 30 days after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nPub. L. 98–369, div. A, title I, §\u202f129(c)(1) ,  July 18, 1984 ,  98 Stat. 660 , provided that:  “The amendment made by subsection (a) [enacting this section] shall apply to any disposition on or after  January 1, 1985 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'The amount of the withholding tax payable by any partnership under subsection (a) shall be equal to the applicable percentage of the effectively connected taxable income of the partnership which is allocable under section 704 to foreign partners.\nEach foreign partner of a partnership shall be allowed a credit under section 33 for such partner’s share of the withholding tax paid by the partnership under this section. Such credit shall be allowed for the partner’s taxable year in which (or with which) the partnership taxable year (for which such tax was paid) ends.\nFor purposes of this section, the term “foreign partner” means any partner who is not a United States person.\nExcept as provided in this subsection, if any portion of the gain (if any) on any disposition of an interest in a partnership would be treated under section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, the transferee shall be required to deduct and withhold a tax equal to 10 percent of the amount realized on the disposition.\nNo person shall be required to deduct and withhold any amount under paragraph (1) with respect to any disposition if the transferor furnishes to the transferee an affidavit by the transferor stating, under penalty of perjury, the transferor’s United States taxpayer identification number and that the transferor is not a foreign person.\nThe rules of section 1445(d) shall apply to a transferor’s agent or transferee’s agent with respect to any affidavit described in subparagraph (A) in the same manner as such rules apply with respect to the disposition of a United States real property interest under such section.\nAt the request of the transferor or transferee, the Secretary may prescribe a reduced amount to be withheld under this section if the Secretary determines that to substitute such reduced amount will not jeopardize the collection of the tax imposed under this title with respect to gain treated under section 864(c)(8) as effectively connected with the conduct of a trade or business with in the United States.\nIf a transferee fails to withhold any amount required to be withheld under paragraph (1), the partnership shall be required to deduct and withhold from distributions to the transferee a tax in an amount equal to the amount the transferee failed to withhold (plus interest under this title on such amount).\nAny term used in this subsection which is also used under section 1445 shall have the same meaning as when used in such section.\nThe Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this subsection, including regulations providing for exceptions from the provisions of this subsection.\n2018— Pub. L. 115–141  substituted “Withholding of tax” for “Withholding tax” in section catchline.\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97, §\u202f13001(b)(3)(D) , substituted “section 11(b)” for “section 11(b)(1)”.\nSubsecs. (f), (g).  Pub. L. 115–97, §\u202f13501(b) , added subsec. (f) and redesignated former subsec. (f) as (g).\n1989—Subsec. (b)(2)(B).  Pub. L. 101–239, §\u202f7811(i)(6)(A) , substituted “section 11(b)(1)” for “section 11(b)”.\nSubsec. (d)(2).  Pub. L. 101–239, §\u202f7811(i)(6)(B) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “A foreign partner’s share of any withholding tax paid by the partnership under this section shall be treated as distributed to such partner by such partnership on the last day of the partnership’s taxable year (for which such tax was paid).”\nSubsec. (f).  Pub. L. 101–239, §\u202f7811(i)(6)(C) , amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations providing for the application of this section in the case of publicly traded partnerships.”\n1988— Pub. L. 100–647  amended section generally, substituting provisions relating to withholding tax on foreign partners’ share of effectively connected income for provisions which related to withholding tax on amounts paid by partnerships to foreign partners.\nAmendment by  section 13001(b)(3)(D) of Pub. L. 115–97  applicable to distributions made after  Dec. 31, 2017 , see  section 13001(c)(2) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nPub. L. 115–97, title I, §\u202f13501(c)(2) ,  Dec. 22, 2017 ,  131 Stat. 2141 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to sales, exchanges, and dispositions after  December 31, 2017 .”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1012(s)(1)(D) ,  Nov. 10, 1988 ,  102 Stat. 3527 , provided that:  “The amendments made by this paragraph [amending sections 1446 and 6401 of this title] shall apply to taxable years beginning after  December 31, 1987 . No amount shall be required to be deducted and withheld under section 1446 of the 1986 Code (as in effect before the amendment made by subparagraph (A)).”\nPub. L. 99–514, title XII, §\u202f1246(d) ,  Oct. 22, 1986 ,  100 Stat. 2583 , provided that:  “The amendment made by this section [enacting this section and amending  section 6401 of this title ] shall apply to distributions after  December 31, 1987  (or, if earlier, the effective date (which shall not be earlier than  January 1, 1987 ) of the initial regulations issued under section 1446 of the Internal Revenue Code of 1986 as added by this section).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 359 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1906(b)(13)(A) ,  90 Stat. 1834 , related to tax-free covenant bonds. The repeal was not applicable with respect to obligations issued before  Jan. 1, 1984 , pursuant to  section 475(b) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note under  section 33 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.\n1966— Pub. L. 89–809  struck out requirement that persons required to deduct and withhold any tax under this chapter make return thereof on or before March 15 of each year and pay the tax to the officer designated in section 6151, and substituted “Liability for withheld tax” for “Return and payment of withheld tax” in section catchline.\nAmendment by  Pub. L. 89–809  applicable with respect to payments occurring after  Dec. 31, 1966 , see  section 103(n)(3) of Pub. L. 89–809 , set out as a note under  section 871 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Income on which any tax is required to be withheld at the source under this chapter shall be included in the return of the recipient of such income, but any amount of tax so withheld shall be credited against the amount of income tax as computed in such return.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': '1996— Pub. L. 104–188  substituted “this section” for “this subsection”.\n1989— Pub. L. 101–239  amended section generally. Prior to amendment, section read as follows: “If any tax required under this chapter to be deducted and withheld is paid by the recipient of the income, it shall not be re-collected from the withholding agent; nor in cases in which the tax is so paid shall any penalty be imposed on or collected from the recipient of the income or the withholding agent for failure to return or pay the same, unless such failure was fraudulent and for the purpose of evading payment.”\nPub. L. 101–239, title VII, §\u202f7743(b) ,  Dec. 19, 1989 ,  103 Stat. 2406 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to failures after  December 31, 1989 .”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Where there has been an overpayment of tax under this chapter, any refund or credit made under chapter 65 shall be made to the withholding agent unless the amount of such tax was actually withheld by the withholding agent.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS',
   'part': ''},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 360 , defined withholding agent.\nRepeal applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS',
   'part': ''},
  'content': 'In the case of any withholdable payment to a foreign financial institution which does not meet the requirements of subsection (b), the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment.\nIn the case of a foreign financial institution which is treated as a qualified intermediary by the Secretary for purposes of section 1441 and the regulations issued thereunder, the requirements of this section shall be in addition to any reporting or other requirements imposed by the Secretary for purposes of such treatment.\nThe term “United States account” means any financial account which is held by one or more specified United States persons or United States owned foreign entities.\nThe term “United States owned foreign entity” means any foreign entity which has one or more substantial United States owners.\nThe term “foreign financial institution” means any financial institution which is a foreign entity. Except as otherwise provided by the Secretary, such term shall not include a financial institution which is organized under the laws of any possession of the United States.\nThe term “passthru payment” means any withholdable payment or other payment to the extent attributable to a withholdable payment.\nA prior section 1471,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 361 , related to recovery of excessive profits on government contracts, prior to repeal by  Pub. L. 94–455, title XIX, §\u202f1901(b)(13)(A) ,  Oct. 4, 1976 ,  90 Stat. 1840 .\nPub. L. 111–147, title V, §\u202f501(d) ,  Mar. 18, 2010 ,  124 Stat. 106 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [enacting this chapter and amending sections 6414, 6501, 6513, 6611, and 6724 of this title] shall apply to payments made after  December 31, 2012 . \n \n “(2)   Grandfathered treatment of outstanding obligations .— The amendments made by this section shall not require any amount to be deducted or withheld from any payment under any obligation outstanding on the date which is 2 years after the date of the enactment of this Act [ Mar. 18, 2010 ] or from the gross proceeds from any disposition of such an obligation. \n \n “(3)   Interest on overpayments .— The amendment made by subsection (b) [amending  section 6611 of this title ] shall apply— “(A)  in the case of such amendment’s application to paragraph (1) of section 6611(e) of the Internal Revenue Code of 1986, to returns the due date for which (determined without regard to extensions) is after the date of the enactment of this Act, \n \n “(B)  in the case of such amendment’s application to paragraph (2) of such section, to claims for credit or refund of any overpayment filed after the date of the enactment of this Act (regardless of the taxable period to which such refund relates), and \n \n “(C)  in the case of such amendment’s application to paragraph (3) of such section, to refunds paid after the date of the enactment of this Act (regardless of the taxable period to which such refund relates).”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS',
   'part': ''},
  'content': 'For purposes of this section, the term “non-financial foreign entity” means any foreign entity which is not a financial institution (as defined in section 1471(d)(5)).'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS',
   'part': ''},
  'content': 'Such term shall not include any item of income which is taken into account under section 871(b)(1) or 882(a)(1) for the taxable year.\nSubparagraph (B) of section 861(a)(1) shall not apply.\nIn the case of any financial institution described in section 1471(d)(5)(C), clauses (i), (ii), and (iii) of subparagraph (A) shall be applied by substituting “0 percent” for “10 percent”.\nThe term “withholding agent” means all persons, in whatever capacity acting, having the control, receipt, custody, disposal, or payment of any withholdable payment.\nThe term “foreign entity” means any entity which is not a United States person.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS',
   'part': ''},
  'content': 'Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.\nExcept as provided in paragraph (2), the determination of whether any tax deducted and withheld under this chapter results in an overpayment by the beneficial owner of the payment to which such tax is attributable shall be made as if such tax had been deducted and withheld under subchapter A of chapter 3.\nThe term “specified financial institution payment” means any payment if the beneficial owner of such payment is a foreign financial institution.\nNo credit or refund shall be allowed or paid with respect to any tax properly deducted and withheld under this chapter unless the beneficial owner of the payment provides the Secretary such information as the Secretary may require to determine whether such beneficial owner is a United States owned foreign entity (as defined in section 1471(d)(3)) and the identity of any substantial United States owners of such entity.\nFor purposes of this chapter, rules similar to the rules of section 3406(f) shall apply.\nThe identity of a foreign financial institution which meets the requirements of section 1471(b) shall not be treated as return information for purposes of section 6103.\nThe Secretary shall provide for the coordination of this chapter with other withholding provisions under this title, including providing for the proper crediting of amounts deducted and withheld under this chapter against amounts required to be deducted and withheld under such other provisions.\nAny tax deducted and withheld pursuant to an agreement described in section 1471(b) shall be treated for purposes of this title as a tax deducted and withheld by a withholding agent under section 1471(a).\nThe Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of, and prevent the avoidance of, this chapter.\nFor prior sections 1481 and 1482, see Prior Provisions note preceding  section 1471 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes', 'chapter': 'REPEALED]', 'part': ''},
  'content': 'Section 1491, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 365 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title X, §\u202f1015(a) ,  90 Stat. 1617 ;  Nov. 6, 1978 ,  Pub. L. 95–600, title VII, §\u202f701(u)(14)(A) ,  92 Stat. 2919 ;  Aug. 20, 1996 ,  Pub. L. 104–188, title I, §\u202f1907(b)(1) ,  110 Stat. 1916 , imposed tax on transfers to avoid income tax.\nSection 1492, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 365 ;  Jan. 12, 1971 ,  Pub. L. 91–681, §\u202f1(b) ,  84 Stat. 2066 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title X, §\u202f1015(b) , title XIX, §\u202f1906(b)(13)(A),  90 Stat. 1618 , 1834;  Nov. 6, 1978 ,  Pub. L. 95–600, title VII, §\u202f701(u)(14)(B) ,  92 Stat. 2919 ;  July 18, 1984 ,  Pub. L. 98–369, div. A, title I, §\u202f131(f)(1) ,  98 Stat. 665 , related to nontaxable transfers.'},
 {'metadata': {'subtitle': 'Income Taxes', 'chapter': 'REPEALED]', 'part': ''},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 365 , defined foreign trust.\nRepeal applicable with respect to taxable years beginning after  Dec. 31, 1966 , see  section 103(n)(1) of Pub. L. 89–809 , set out as an Effective Date of 1966 Amendment note under  section 871 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes', 'chapter': 'REPEALED]', 'part': ''},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 365 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XIX, §\u202f1906  (b)(13)(A),  90 Stat. 1834 ;  July 18, 1984 ,  Pub. L. 98–369, div. A, title I, §\u202f131(f)(2) ,  98 Stat. 665 ;  Aug. 20, 1996 ,  Pub. L. 104–188, title I, §\u202f1902(a) ,  110 Stat. 1909 , provided for payment and collection of the tax imposed under  section 1491 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': ''},
  'content': 'An affiliated group of corporations shall, subject to the provisions of this chapter, have the privilege of making a consolidated return with respect to the income tax imposed by chapter 1 for the taxable year in lieu of separate returns. The making of a consolidated return shall be upon the condition that all corporations which at any time during the taxable year have been members of the affiliated group consent to all the consolidated return regulations prescribed under section 1502 prior to the last day prescribed by law for the filing of such return. The making of a consolidated return shall be considered as such consent. In the case of a corporation which is a member of the affiliated group for a fractional part of the year, the consolidated return shall include the income of such corporation for such part of the year as it is a member of the affiliated group.'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': ''},
  'content': 'The Secretary shall prescribe such regulations as he may deem necessary in order that the tax liability of any affiliated group of corporations making a consolidated return and of each corporation in the group, both during and after the period of affiliation, may be returned, determined, computed, assessed, collected, and adjusted, in such manner as clearly to reflect the income-tax liability and the various factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability. In carrying out the preceding sentence, the Secretary may prescribe rules that are different from the provisions of chapter 1 that would apply if such corporations filed separate returns.\n2004— Pub. L. 108–357  inserted at end “In carrying out the preceding sentence, the Secretary may prescribe rules that are different from the provisions of chapter 1 that would apply if such corporations filed separate returns.”\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\nPub. L. 108–357, title VIII, §\u202f844(c) ,  Oct. 22, 2004 ,  118 Stat. 1600 , provided that:  “This section [amending this section], and the amendment made by this section, shall apply to taxable years beginning before, on, or after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 100–647, title VI, §\u202f6126 ,  Nov. 10, 1988 ,  102 Stat. 3713 , provided that: \n “(a)   General Rule .— In the case of a transaction which— “(1)  involves the transfer after the date of the enactment of this Act [ Nov. 10, 1988 ] by a domestic corporation, with respect to which there is a qualified excess loss account, of its assets and liabilities to a foreign corporation in exchange for all of the stock of such foreign corporation, followed by the complete liquidation of the domestic corporation into the common parent, and \n \n “(2)  qualifies, pursuant to Revenue Ruling 87–27, as a reorganization which is described in section 368(a)(1)(F) of the 1986 Code, \n \n\n then, solely for purposes of applying Treasury Regulation section 1.1502–19 to such qualified excess loss account, such foreign corporation shall be treated as a domestic corporation in determining whether such foreign corporation is a member of the affiliated group of the common parent. \n \n “(b)   Treatment of Income of New Foreign Corporation.— “(1)   In general .— In any case to which subsection (a) applies, for purposes of the 1986 Code— “(A)  the source and character of any item of income of the foreign corporation referred to in subsection (a) shall be determined as if such foreign corporation were a domestic corporation, \n \n “(B)  the net amount of any such income shall be treated as subpart F income (without regard to section 952(c) of the 1986 Code), and \n \n “(C)  the amount in the qualified excess loss account referred to in subsection (a) shall— “(i)  be reduced by the net amount of any such income, and \n \n “(ii)  be increased by the amount of any such income distributed directly or indirectly to the common parent described in subsection (a). \n \n \n \n “(2)   Limitation .— Paragraph (1) shall apply to any item of income only to the extent that the net amount of such income does not exceed the amount in the qualified excess loss account after being reduced under paragraph (1)(C) for prior income. \n \n “(3)   Basis adjustments not applicable .— To the extent paragraph (1) applies to any item of income, there shall be no increase in basis under section 961(a) of such Code on account of such income (and there shall be no reduction in basis under section 961(b) of such Code on account of an exclusion attributable to the inclusion of such income). \n \n “(4)   Recognition of gain .— For purposes of paragraph (1), if the foreign corporation referred to in subsection (a) transfers any property acquired by such foreign corporation in the transaction referred to in subsection (a) (or transfers any other property the basis of which is determined in whole or in part by reference to the basis of property so acquired) and (but for this paragraph) there is not full recognition of gain on such transfer, the excess (if any) of— “(A)  the fair market value of the property transferred, over \n \n “(B)  its adjusted basis, \n \n\n shall be treated as gain from the sale or exchange of such property and shall be recognized notwithstanding any other provision of law. Proper adjustment shall be made to the basis of any such property for gain recognized under the preceding sentence. \n \n \n “(c)   Definitions .— For purposes of this section— “(1)   Common parent .— The term ‘common parent’ means the common parent of the affiliated group which included the domestic corporation referred to in subsection (a)(1). \n \n “(2)   Qualified excess loss account .— The term ‘qualified excess loss account’ means any excess loss account (within the meaning of the consolidated return regulations) to the extent such account is attributable— “(A)  to taxable years beginning before  January 1, 1988 , and \n \n “(B)  to periods during which the domestic corporation was subject to an income tax of a foreign country on its income on a residence basis or without regard to whether such income is from sources in or outside of such foreign country. \n \n\n The amount of such account shall be determined as of immediately after the transaction referred to in subsection (a) and without, except as provided in subsection (b), diminution for any future adjustment. \n \n “(3)   Net amount .— The net amount of any item of income is the amount of such income reduced by allocable deductions as determined under the rules of section 954(b)(5) of the 1986 Code. \n \n “(4)   Second same country corporation may be treated as domestic corporation in certain cases .— If— “(A)  another foreign corporation acquires from the common parent stock of the foreign corporation referred to in subsection (a) after the transaction referred to in subsection (a), \n \n “(B)  both of such foreign corporations are subject to the income tax of the same foreign country on a residence basis, and \n \n “(C)  such common parent complies with such reporting requirements as the Secretary of the Treasury or his delegate may prescribe for purposes of this paragraph, \n \n\n such other foreign corporation shall be treated as a domestic corporation in determining whether the foreign corporation referred to in subsection (a) is a member of the affiliated group referred to in subsection (a) (and the rules of subsection (b) shall apply (i) to any gain of such other foreign corporation on any disposition of such stock, and (ii) to any other income of such other foreign corporation except to the extent it establishes to the satisfaction of the Secretary of the Treasury or his delegate that such income is not attributable to property acquired from the foreign corporation referred to in subsection (a)).”\nPub. L. 99–514, title VI, §\u202f647 ,  Oct. 22, 1986 ,  100 Stat. 2294 , provided that:  “If for a taxable year of an affiliated group filing a consolidated return ending on or before  December 31, 1987 , there is a disposition of stock of a subsidiary (within the meaning of Treasury Regulation section 1.1502–19), the amount required to be included in income with respect to such disposition under Treasury Regulation section 1.1502–19(a) shall, notwithstanding such section, be included in income ratably over the 15-year period beginning with the taxable year in which the disposition occurs. The preceding sentence shall apply only if such subsidiary was incorporated on  December 24, 1969 , and is a participant in a mineral joint venture with a corporation organized under the laws of the foreign country in which the joint venture mineral project is located.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': ''},
  'content': 'In any case in which a consolidated return is made or is required to be made, the tax shall be determined, computed, assessed, collected, and adjusted in accordance with the regulations under section 1502 prescribed before the last day prescribed by law for the filing of such return.\nIf an election under section 1504(c)(2) is in effect for the taxable year and the consolidated taxable income of the members of the group not taxed under section 801 results in a consolidated net operating loss for such taxable year, then under regulations prescribed by the Secretary, the amount of such loss which cannot be absorbed in the applicable carry-back periods against the taxable income of such members not taxed under section 801 shall be taken into account in determining the consolidated taxable income of the affiliated group for such taxable year to the extent of 35 percent of such loss or 35 percent of the taxable income of the members taxed under section 801, whichever is less. The unused portion of such loss shall be available as a carryover, subject to the same limitations (applicable to the sum of the loss for the carryover year and the loss (or losses) carried over to such year), in applicable carryover years.\nNotwithstanding the provisions of paragraph (1), a net operating loss for a taxable year of a member of the group not taxed under section 801 shall not be taken into account in determining the taxable income of a member taxed under section 801 (either for the taxable year or as a carryover or carryback) if such taxable year precedes the sixth taxable year such members have been members of the same affiliated group (determined without regard to section 1504(b)(2)).\nThe dual consolidated loss for any taxable year of any corporation shall not be allowed to reduce the taxable income of any other member of the affiliated group for the taxable year or any other taxable year.\nExcept as provided in subparagraph (B), the term “dual consolidated loss” means any net operating loss of a domestic corporation which is subject to an income tax of a foreign country on its income without regard to whether such income is from sources in or outside of such foreign country, or is subject to such a tax on a residence basis.\nTo the extent provided in regulations, the term “dual consolidated loss” shall not include any loss which, under the foreign income tax law, does not offset the income of any foreign corporation.\nTo the extent provided in regulations, any loss of a separate unit of a domestic corporation shall be subject to the limitations of this subsection in the same manner as if such unit were a wholly owned subsidiary of such corporation.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to prevent the avoidance of the purposes of this subsection by contributing assets to the corporation with the dual consolidated loss after such loss was sustained.\nThe term “consolidated year” means any taxable year for which the affiliated group makes a consolidated return.\nThe reference in paragraph (1) to subsection (n) of section 312 shall be treated as not including a reference to paragraph (7) of such subsection.\nNothing in the regulations prescribed under section 1502 shall permit any reduction in the amount otherwise included in gross income by reason of an excess loss account if such reduction is on account of a reduction in the basis of indebtedness.\nThe term “group credit item” means any credit allowable under part IV of subchapter A of chapter 1 (other than section 34) to any other member of the affiliated group which includes the subsidiary and any carryover or carryback of any such credit.\nThe term “disqualified separately computed income” means the portion of the separately computed taxable income of the subsidiary which does not exceed the dividends distributed by the subsidiary during the taxable year on applicable preferred stock.\nThe term “subsidiary” means any corporation which is a member of an affiliated group filing a consolidated return other than the common parent.\n1990—Subsec. (c)(1).  Pub. L. 101–508, §\u202f11802(f)(4) , struck out at end “For taxable years ending with or within calendar year 1981, ‘25 percent’ shall be substituted for ‘35 percent’ each place it appears in the first sentence of this subsection. For taxable years ending with or within calendar year 1982, ‘30 percent’ shall be substituted for ‘35 percent’ each place it appears in that sentence.”\nSubsec. (e)(3)(B).  Pub. L. 101–508, §\u202f11813(b)(25) , substituted “section 50(c)” for “section 48(q)”.\n1989—Subsec. (e)(2)(A)(ii).  Pub. L. 101–239, §\u202f7821(c) , substituted “another corporation which is or was a member” for “another member”.\nSubsec. (e)(4).  Pub. L. 101–239, §\u202f7207(a) , added par. (4).\nSubsec. (f).  Pub. L. 101–239, §\u202f7201(a) , added subsec. (f).\n1988—Subsec. (d)(3), (4).  Pub. L. 100–647, §\u202f1012(u) , added pars. (3) and (4).\nSubsec. (e)(1).  Pub. L. 100–647, §\u202f2004(j)(1)(A) , amended introductory provisions generally. Prior to amendment, introductory provisions read as follows: “Solely for purposes of determining gain or loss on the disposition of intragroup stock, in determining the adjustments to the basis of such intragroup stock on account of the earnings and profits of any member of an affiliated group for any consolidated year—”.\nSubsec. (e)(2)(C).  Pub. L. 100–647, §\u202f2004(j)(3)(A) , added subpar. (C).\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f2004(j)(2) , added par. (3).\n1987—Subsec. (e).  Pub. L. 100–203  added subsec. (e).\n1986—Subsec. (d).  Pub. L. 99–514  added subsec. (d).\n1984—Subsec. (c).  Pub. L. 98–369, §\u202f211(b)(19)(A) , (C), substituted “section 801” for “section 802” in heading, and wherever appearing in text.\nSubsec. (c)(1).  Pub. L. 98–369, §\u202f211(b)(19)(B) , struck out provision that for purposes of this subsection, in determining the taxable income of each insurance company subject to tax under section 802, section 802(b)(3) would not be taken into account.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1052(c)(5) , struck out subsec. (a) designation.\nSubsec. (b).  Pub. L. 94–455, §\u202f1052(c)(5) , struck out subsec. (b) which provided for a special rule for application of foreign tax credit when overall limitation applies.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1031(b)(4) , struck out “and if for the taxable year an election under section 904(b)(1) (relating to election of overall limitation on foreign tax credit) is in effect” after “section 921)”.\nSubsec. (b)(3)(C).  Pub. L. 94–455, §\u202f1901(b)(1)(Y) , struck out subpar. (C) which defined “consolidated taxable income”.\nSubsec. (c).  Pub. L. 94–455, §\u202f1507(b)(3) , added subsec. (c).\n1964—Subsec. (a).  Pub. L. 88–272, §\u202f234(a) , struck out provisions which increased the tax imposed under section 11(c), or section 831, by 2% of the consolidated taxable income of the affiliated group of includible corporations, and defined “consolidated taxable income”.\nSubsec. (b).  Pub. L. 88–272, §\u202f234(b)(1) , (2), redesignated subsec. (d) as (b), and substituted references to section 7701 for references to former subsection (c) of this section, in subpar. (A), and definition of “consolidated taxable income” for provisions relating to the computation of tax, for purposes of par. (1)(A), on the portion of consolidated taxable income attributable to any corporation, without regard to the increase of 2% as in subsec. (a), in subpar. (C). Former subsec. (b), which limited the 2% increase in subsec. (a) in cases where the affiliated group included one or more Western Hemisphere trade corporations or one or more regulated public utilities, to the amount by which the consolidated taxable income of the affiliated group exceed the income attributable to such corporations and utilities, was struck out.\nSubsec. (c).  Pub. L. 88–272, §\u202f234(b)(1) , struck out subsec. (c) which defined regulated public utility. See  section 7701(a)(33) of this title .\nSubsec. (d).  Pub. L. 88–272, §\u202f234(b)(1) , redesignated subsec. (d) as (b).\n1960—Subsec. (d).  Pub. L. 86–780  added subsec. (d).\nAmendment by  section 11813(b)(25) of Pub. L. 101–508  applicable to property placed in service after  Dec. 31, 1990 , but not applicable to any transition property (as defined in  section 49(e) of this title ), any property with respect to which qualified progress expenditures were previously taken into account under  section 46(d) of this title , and any property described in  section 46(b)(2)(C) of this title , as such sections were in effect on  Nov. 4, 1990 , see  section 11813(c) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 101–239, title VII, §\u202f7201(b) ,  Dec. 19, 1989 ,  103 Stat. 2329 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to taxable years ending after  November 17, 1989 . \n \n “(2)   Binding contract exception .— For purposes of section 1503(f)(3)(D) of the Internal Revenue Code of 1986, stock issued after  November 17, 1989 , pursuant to a written binding contract in effect on  November 17, 1989 , and at all times thereafter before such issuance, shall be treated as issued on  November 17, 1989 . \n \n “(3)   Special rule when subsidiary leaves group .— If, by reason of a transaction after  November 17, 1989 , a corporation ceases to be, or becomes, a member of an affiliated group, the stock of such corporation shall be treated, for purposes of section 1503(f)(3)(D) of such Code, as issued on the date of such cessation or commencement, unless such transaction is of a kind which would not result in the recognition of any deferred intercompany gain under the consolidated return regulations by reason of the acquisition of the entire group. \n \n “(4)   Retired stock.— “(A)  Except as provided in subparagraph (B), if stock issued before  November 18, 1989 , (or described in paragraph (2)), is retired or acquired after  November 17, 1989 , by the corporation or another member of the same affiliated group, such stock shall be treated, for purposes of section 1503(f)(3)(D) of such Code, as issued on the date of such retirement or acquisition. \n \n “(B)  Subparagraph (A) shall not apply to any retirement or acquisition pursuant to an obligation to reissue under a binding written contract in effect on  November 17, 1989 , and at all times thereafter before such retirement or acquisition. \n \n \n “(5)   Auction rate preferred .— For purposes of section 1503(f)(3)(D) of such Code, auction rate preferred stock shall be treated as issued when the contract requiring the auction became binding. \n \n “(6)   Special rule for certain auction rate preferred .— For purposes of section 1503(f)(3)(D) of the Internal Revenue Code of 1986, any auction rate preferred stock shall be treated as issued before  November 18, 1989 , if— “(A)  a subsidiary was incorporated before  July 10, 1989  for the special purpose of issuing such stock, \n \n “(B)  a rating agency was retained before  July 10, 1989 , and \n \n “(C)  such stock is issued before the date 30 days after the date of the enactment of this Act [ Dec. 19, 1989 ].”\nPub. L. 101–239, title VII, §\u202f7207(b) ,  Dec. 19, 1989 ,  103 Stat. 2337 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to dispositions after  July 10, 1989 , in taxable years ending after such date. \n \n “(2)   Binding contract .— The amendment made by subsection (a) shall not apply to any disposition pursuant to a written binding contract in effect on  July 10, 1989 , and at all times thereafter before such disposition.”\nAmendment by  section 7821 of Pub. L. 101–239  effective as if included in the provision of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 7823 of Pub. L. 101–239 , set out as a note under  section 26 of this title .\nAmendment by  section 1012(u) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 2004(j)(1)(A), (2), (3)(A) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nPub. L. 100–203, title X, §\u202f10222(a)(2) ,  Dec. 22, 1987 ,  101 Stat. 1330–410 , as amended by  Pub. L. 100–647, title II, §\u202f2004(j)(1)(B) ,  Nov. 10, 1988 ,  102 Stat. 3604 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to any intragroup stock disposed of after  December 15, 1987 . For purposes of determining the adjustments to the basis of such stock, such amendment shall be deemed to have been in effect for all periods whether before, on, or after  December 15, 1987 . \n \n “(B)   Exception .— The amendment made by paragraph (1) shall not apply to any intragroup stock disposed of after  December 15, 1987 , and before  January 1, 1989 , if such disposition is pursuant to a written binding contract, governmental order, letter of intent or preliminary agreement, or stock acquisition agreement, in effect on or before  December 15, 1987 . \n \n “(C)   Treatment of certain excess loss accounts.— “(i)   In general .— If— “(I)  any disposition on or before  December 15, 1987 , of stock resulted in an inclusion of an excess loss account (or would have so resulted if the amendments made by paragraph (1) had applied to such disposition), and \n \n “(II)  there is an unrecaptured amount with respect to such disposition, \n \n\n the portion of such unrecaptured amount allocable to stock disposed of in a disposition to which the amendment made by paragraph (1) applies shall be taken into account as negative basis. To the extent permitted by the Secretary of the Treasury or his delegate, the preceding sentence shall not apply to the extent the taxpayer elects to reduce its basis in indebtedness of the corporation with respect to which there would have been an excess loss account. \n \n “(ii)   Special rules .— For purposes of this subparagraph— “(I)   Unrecaptured amount .— The term ‘unrecaptured amount’ means the amount by which the inclusion referred to in clause (i)(I) would have been increased if the amendment made by paragraph (1) and [had] applied to the disposition. \n \n “(II)   Coordination with binding contract exception .— A disposition shall be treated as occurring on or before  December 15, 1987 , if the amendment made by paragraph (1) does not apply to such disposition by reason of subparagraph (B).”\nPub. L. 99–514, title XII, §\u202f1249(b) ,  Oct. 22, 1986 ,  100 Stat. 2585 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to net operating losses for taxable years beginning after  December 31, 1986 .”\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  section 1031(b)(4) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 1031(c) of Pub. L. 94–455 , set out as a note under  section 904 of this title .\nAmendment by  section 1052(c)(5) of Pub. L. 94–455  effective with respect to taxable years beginning after  Dec. 31, 1979 , see  section 1052(d) of Pub. L. 94–455 , set out as a note under  section 170 of this title .\nAmendment by  section 1507(b)(3) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1980 , see  section 1507(c) of Pub. L. 94–455 , set out as a note under  section 1504 of this title .\nAmendment by  section 1901(b)(1)(Y) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nPub. L. 88–272, title II, §\u202f234(c) ,  Feb. 26, 1964 ,  78 Stat. 116 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and sections 12, 172, 904, 1341, 1552, and 7701 of this title] shall apply with respect to taxable years beginning after  December 31, 1963 .”\nAmendment by  Pub. L. 86–780  applicable to taxable years beginning after  Dec. 31, 1960 , see  section 4 of Pub. L. 86–780 , set out as a note under  section 904 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': ''},
  'content': 'The Secretary may waive the application of subparagraph (A) to any corporation for any period subject to such conditions as the Secretary may prescribe.\nIn the case of a domestic corporation owning or controlling, directly or indirectly, 100 percent of the capital stock (exclusive of directors’ qualifying shares) of a corporation organized under the laws of a contiguous foreign country and maintained solely for the purpose of complying with the laws of such country as to title and operation of property, such foreign corporation may, at the option of the domestic corporation, be treated for the purpose of this subtitle as a domestic corporation.\nDespite the provisions of paragraph (1) of subsection (b), two or more organizations exempt from taxation under section 501, one or more of which is described in section 501(c)(2) and the others of which derive income from such 501(c)(2) organizations, shall be considered as includible corporations for the purpose of the application of subsection (a) to such organizations alone.\nSection 805(b)(2)(A) and (3) of the Tax Reform Act of 1984, referred to in subsec. (f)(1), (2), is section 805(b)(2)(A) and (3) of  Pub. L. 98–369 , which is set out as a note under  section 991 of this title .\n2018—Subsec. (b)(4) to (8).  Pub. L. 115–141  redesignated pars. (6) to (8) as (4) to (6), respectively, and struck out former par. (4) which read as follows: “Corporations with respect to which an election under section 936 (relating to possession tax credit) is in effect for the taxable year.”\n2014—Subsec. (a)(3)(A).  Pub. L. 113–295  struck out “for a taxable year which includes any period after  December 31, 1984 ” after “affiliated group” in cl. (i) and struck out “in a taxable year beginning after  December 31, 1984 ” after “such group” in cl. (ii).\n1996—Subsec. (b)(8).  Pub. L. 104–188, §\u202f1308(d)(2) , added par. (8).\nSubsec. (c)(2)(B)(i).  Pub. L. 104–188, §\u202f1702(h)(6) , inserted “section” before “243(b)(2)”.\n1990—Subsec. (c)(2)(B)(i).  Pub. L. 101–508, §\u202f11814(b) , substituted “section 243(b)(3)” for “section 243(b)(6)” and “243(b)(2)” for “section 243(b)(5)”.\n1988—Subsec. (b)(7).  Pub. L. 100–647, §\u202f1018(d)(10)(A) , amended par. (7) generally, striking out “,\u2000or any other corporation which has accumulated DISC income which is derived after  December 31, 1984 ” after “in section 992(a)(1))”.\nSubsec. (f).  Pub. L. 100–647, §\u202f1018(d)(10)(B) , added subsec. (f).\n1986—Subsec. (a)(4)(C).  Pub. L. 99–514, §\u202f1804(e)(1) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “has redemption and liquidation rights which do not exceed the paid-in capital or par value represented by such stock (except for a reasonable redemption premium in excess of such paid-in capital or par value), and”.\nSubsec. (b)(2).  Pub. L. 99–514, §\u202f1024(c)(15) , struck out “or 821” after “section 802”.\nSubsec. (b)(7).  Pub. L. 99–514, §\u202f1804(e)(10) , amended par. (7) generally. Prior to amendment, par. (7) read as follows: “A DISC or former DISC (as defined in section 992(a)).”\nSubsec. (c)(2)(A).  Pub. L. 99–514, §\u202f1899A(35) , struck out “or 821” after “section 801”.\nPub. L. 99–514, §\u202f1024(c)(16) , substituted “subsection (b)(2)) includes” for “subsection (b)(2) includes”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f60(a) , in amending subsec. (a), generally, revised existing provisions of subsec. (a) into pars. (1), (2), and (4), added pars. (3) and (5), revised definition of “affiliated group”, and expanded the enumeration of securities not included under term “stock”.\nSubsecs. (b)(2), (c)(1), (2)(A).  Pub. L. 98–369, §\u202f211(b)(20) , substituted “section 801” for “section 802”.\n1980—Subsec. (a).  Pub. L. 96–222  substituted “a tax credit employee stock ownership plan” for “an ESOP” and “employee” for “leveraged employee”.\n1978—Subsec. (a).  Pub. L. 95–600  substituted “(within the meaning for section 409A( l )) while such securities are held under an ESOP, or qualifying employer securities (within the meaning of section 4975(e)(8)) while such securities are held under a leveraged employee stock ownership plan which meets the requirements of section 4975(e)(7)” for “within the meaning of section 301(d)(9)(A) of the Tax Reduction Act of 1975, or qualifying employer securities within the meaning of section 4975(e)(8) while such securities are held under an employee stock ownership plan which meets the requirements of section 301(d) of such Act or section 4975(e)(7), respectively”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f803(b)(3) , substituted “dividends, employer securities within the meaning of section 301(d)(9)(A) of the Tax Reduction Act of 1976, or qualifying employer securities within the meaning of section 4975(e)(8) while such securities are held under an employee stock ownership plan which meets the requirements of section 301(d) of such Act or section 4975(e)(7), respectively” for “dividends” after “preferred as to”.\nSubsec. (b)(4).  Pub. L. 94–455, §\u202f1051(g) , substituted “Corporations with respect to which an election under section 936 (relating to possession tax credit) is in effect for the taxable year” for “Corporations entitled to the benefits of section 931, by reason of receiving a large percentage of their income from sources within possessions of the United States” in par. (4).\nSubsec. (b)(5).  Pub. L. 94–455, §\u202f1053(d)(2) , struck out par. (5) which included corporations organized under the China Trade Act, 1922, within term “includible corporation”.\nSubsec. (c).  Pub. L. 94–455, §\u202f1507(a) , designated existing provisions as provision preceding par. (1) and par. (1), in provision preceding par. (1) as so designated, substituted “Notwithstanding the provisions” for “Despite the provisions”, in par. (1) as so designated, substituted “tax under section 802 shall be treated” for “taxation under the same section of this subtitle shall be considered” and added par. (2).\n1971—Subsec. (b)(7).  Pub. L. 92–178  added par. (7).\n1969—Subsec. (e).  Pub. L. 91–172  added subsec. (e).\n1966—Subsec. (b)(7).  Pub. L. 89–389  struck out par. (7) exception to definition of “includible corporation” of unincorporated business enterprises subject to tax as corporations under  section 1361 of this title .\n1960—Subsec. (b)(6).  Pub. L. 86–779  inserted “and real estate investment trusts” after “Regulated investment companies”.\n1959—Subsec. (b)(2).  Pub. L. 86–69  struck out reference to section 811.\nSubsec. (b)(8).  Pub. L. 86–376  struck out par. (8) which excepted an electing small business corporation from term “includible corporation”.\n1958—Subsec. (b)(8).  Pub. L. 85–866  added par. (8).\n1956—Subsec. (b)(2), Act  Mar. 13, 1956 , inserted reference to section 811.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  section 1308(d)(2) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1317(a) of Pub. L. 104–188 , set out as a note under  section 641 of this title .\nAmendment by  section 1702(h)(6) of Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 101–508  applicable to taxable years beginning after  Dec. 31, 1990 , and for purposes of  section 243(b)(3) of this title , references to elections under such section to include references to an election under  section 243(b) of this title  as in effect on  Nov. 4, 1990 , see  section 11814(c) of Pub. L. 101–508 , set out as a note under  section 243 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by section 1024(c)(15), (16) of  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by section 1804(e)(1), (10) of  Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 98–369, div. A, title I, §\u202f60(b) ,  July 18, 1984 ,  98 Stat. 579 , as amended by  Pub. L. 99–514, §\u202f2 , title XVIII, §\u202f1804(e)(2)–(5),  Oct. 22, 1986 ,  100 Stat. 2095 , 2800, provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after  December 31, 1984 . \n \n “(2)   Special rule for corporations affiliated on  june 22, 1984 .— In the case of a corporation which on  June 22, 1984 , is a member of an affiliated group which files a consolidated return for such corporation’s taxable year which includes  June 22, 1984 , for purposes of determining whether such corporation continues to be a member of such group for taxable years beginning before  January 1, 1988 , the amendment made by subsection (a) [amending this section] shall not apply. The preceding sentence shall cease to apply as of the first day after  June 22, 1984 , on which such corporation does not qualify as a member of such group under section 1504(a) of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ]). \n \n “(3)   Special rule not to apply to certain sell-downs after  june 22, 1984 .— If— “(A)  the requirements of paragraph (2) are satisfied with respect to a corporation, \n \n “(B)  more than a de minimis amount of the stock of such corporation— “(i)  is sold or exchanged (including in a redemption), or \n \n “(ii)  is issued, \n \n\n after  June 22, 1984  (other than in the ordinary course of business), and \n \n “(C)  the requirements of the amendment made by subsection (a) are not satisfied after such sale, exchange, or issuance, \n \n\n then the amendment made by subsection (a) [amending this section] shall apply for purposes of determining whether such corporation continues to be a member of the group. The preceding sentence shall not apply to any transaction if such transaction does not reduce the percentage of the fair market value of the stock of the corporation referred to in the preceding sentence held by members of the group determined without regard to this paragraph. \n \n “(4)   Exception for certain sell-downs .— Subsection (b)(2) (and not subsection (b)(3)) will apply to a corporation if such corporation issues or sells stock after  June 22, 1984 , pursuant to a registration statement filed with the Securities and Exchange Commission on or before  June 22, 1984 , but only if the requirements of the amendment made by subsection (a) [amending this section] (substituting ‘more than 50 percent’ for ‘at least 80 percent’ in paragraph (2)(B) of section 1504(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) are satisfied immediately after such issuance or sale and at all times thereafter until the first day of the first taxable year beginning after  December 31, 1987 . For purposes of the preceding sentence, if there is a letter of intent between a corporation and a securities underwriter entered into on or before  June 22, 1984 , and the subsequent issuance or sale is effected pursuant to a registration statement filed with the Securities and Exchange Commission, such stock shall be treated as issued or sold pursuant to a registration statement filed with the Securities and Exchange Commission on or before  June 22, 1984 . \n \n “(5)   Native corporations.— “(A)  In the case of a Native Corporation established under the Alaska Native Claims Settlement Act ( 43 U.S.C. 1601  et seq.), or a corporation all of whose stock is owned directly by such a corporation, during any taxable year (beginning after the effective date of these amendments and before 1992), or any part thereof, in which the Native Corporation is subject to the provisions of section 7(h)(1) of such Act ( 43 U.S.C. 1606(h)(1) )— “(i)  the amendment made by subsection (a) [amending this section] shall not apply, and \n \n “(ii)  the requirements for affiliation under section 1504(a) of the Internal Revenue Code of 1986 before the amendment made by subsection (a) shall be applied solely according to the provisions expressly contained therein, without regard to escrow arrangements, redemption rights, or similar provisions. \n \n \n “(B)  Except as provided in subparagraph (C), during the period described in subparagraph (A), no provision of the Internal Revenue Code of 1986 (including sections 269 and 482) or principle of law shall apply to deny the benefit or use of losses incurred or credits earned by a corporation described in subparagraph (A) to the affiliated group of which the Native Corporation is the common parent. \n \n “(C)  Losses incurred or credits earned by a corporation described in subparagraph (A) shall be subject to the general consolidated return regulations, including the provisions relating to separate return limitation years, and to sections 382 and 383 of the Internal Revenue Code of 1986. \n \n “(D)  Losses incurred and credits earned by a corporation which is affiliated with a corporation described in subparagraph (A) shall be treated as having been incurred or earned in a separate return limitation year, unless the corporation incurring the losses or earning the credits satisfies the affiliation requirements of section 1504(a) without application of subparagraph (A). \n \n \n “(6)   Treatment of certain corporations affiliated on  June 22, 1984 .— In the case of an affiliated group which— “(A)  has as its common parent a Minnesota corporation incorporated on  April 23, 1940 , and \n \n “(B)  has a member which is a New York corporation incorporated on  November 13, 1969 , \n \n\n for purposes of determining whether such New York corporation continues to be a member of such group, paragraph (2) shall be applied by substituting for ‘ January 1, 1988 ,’ the earlier of  January 1, 1994 , or the date on which the voting power of the preferred stock in such New York corporation terminates. \n \n “(7)   Election to have amendments apply for years beginning after 1983 .— If the common parent of any group makes an election under this paragraph, notwithstanding any other provision of this subsection, the amendments made by subsection (a) [amending this section] shall apply to such group for taxable years beginning after  December 31, 1983 . Any such election, once made, shall be irrevocable. \n \n “(8)   Treatment of certain affiliated groups .— If— “(A)  a corporation (hereinafter in this paragraph referred to as the ‘parent’) was incorporated in 1968 and filed consolidated returns as the parent of an affiliated group for each of its taxable years ending after 1969 and before 1985, \n \n “(B)  another corporation (hereinafter in this paragraph referred to as the ‘subsidiary’) became a member of the parent’s affiliated group in 1978 by reason of a recapitalization pursuant to which the parent increased its voting interest in the subsidiary from not less than 56 percent to not less than 85 percent, and \n \n “(C)  such subsidiary is engaged (or was on  September 27, 1985 , engaged) in manufacturing and distributing a broad line of business systems and related supplies for binding, laminating, shredding, graphics, and providing secure identification, \n \n\n then, for purposes of determining whether such subsidiary corporation is a member of the parent’s affiliated group under section 1504(a) of the Internal Revenue Code of 1954 [now 1986] (as amended by subsection (a)), paragraph (2)(B) of such section 1504(a) shall be applied by substituting ‘55 percent’ for ‘80 percent’. \n \n “(9)   Treatment of certain corporations affiliated during 1971 .—  In the case of a group of corporations which filed a consolidated Federal income tax return for the taxable year beginning during 1971 and which— “(A)  included as a common parent on  December 31, 1971 , a Delaware corporation incorporated on  August 26, 1969 , and \n \n “(B)  included as a member thereof a Delaware corporation incorporated on  November 8, 1971 , \n \n\n for taxable years beginning after  December 31, 1970 , and ending before  January 1, 1988 , the requirements for affiliation for each member of such group under section 1504(a) of the Internal Revenue Code of 1954 [now 1986] (before the amendment made by subsection (a) [amending this section]) shall be limited solely to the provisions expressly contained therein and by reference to stock issued under State law as common or preferred stock. During the period described in the preceding sentence, no provision of the Internal Revenue Code of 1986 (including sections 269 and 482) or principle of law, except the general consolidated return regulations (including the provisions relating to separate return limitation years) and sections 382 and 383 of such Code, shall apply to deny the benefit or use of losses incurred or credits earned by members of such group.”\nAmendment by  section 211(b)(20) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nAmendment by  Pub. L. 95–600  effective with respect to qualified investment for taxable years beginning after  Dec. 31, 1978 , see  section 141(g)(1) of Pub. L. 95–600 , set out as a Effective Date note under  section 409 of this title .\nAmendment by  section 803(b)(3) of Pub. L. 94–455  applicable for taxable years beginning after  Dec. 31, 1974 , see  section 803(j) of Pub. L. 94–455 , set out as a note under  section 46 of this title .\nAmendment by  section 1051(g) of Pub. L. 94–455  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 1051(i) of Pub. L. 94–455 , set out as a note under  section 27 of this title .\nPub. L. 94–455, title X, §\u202f1053(e) ,  Oct. 4, 1976 ,  90 Stat. 1649 , provided that:  “The amendments made by subsections (a) and (b) [amending section 941 and 943 of this title] shall apply with respect to taxable years beginning after  December 31, 1975 . The amendments made by subsections (c) and (d) [amending this section and sections 116, 6072, and 6091 of this title and repealing sections 941–943 of this title] shall apply with respect to taxable years beginning after  December 31, 1977 .”\nPub. L. 94–455, title XV, §\u202f1507(c)(1) ,  Oct. 4, 1976 ,  90 Stat. 1740 , provided that:  “The amendments made by subsections (a) and (b) [amending this section and sections 821, 843, and 1503 of this title] shall apply to taxable years beginning after  December 31, 1980 .”\nAmendment by  Pub. L. 92–178  applicable with respect to taxable years ending after  Dec. 31, 1971 , except that a corporation may not be a DISC for any taxable year beginning before  Jan. 1, 1972 , see  section 507 of Pub. L. 92–178 , set out as an Effective Date note under  section 991 of this title .\nAmendment by  Pub. L. 91–172  applicable to taxable years beginning after  Dec. 31, 1969 , see  section 121(g) of Pub. L. 91–172 , set out as a note under  section 511 of this title .\nPub. L. 89–389, §\u202f4(b) ,  Apr. 14, 1966 ,  80 Stat. 116 , provided that the amendment made by that section is effective on  Jan. 1, 1969 .\nAmendment by  Pub. L. 86–779  applicable with respect to taxable years of real estate investment trusts beginning after  Dec. 31, 1960 , see  section 10(k) of Pub. L. 86–779 , set out as an Effective Date note under  section 856 of this title .\nPub. L. 86–376, §\u202f2(d) ,  Sept. 23, 1959 ,  73 Stat. 699 , provided that:  “The amendment made by subsection (a) [amending  section 1371 of this title ] shall apply to taxable years beginning after  December 31, 1959 . The amendments made by subsections (b) and (c) [amending this section and  section 1374 of this title ] shall take effect on the day after the date of the enactment of this Act [ Sept. 23, 1959 ].”\nAmendment by  Pub. L. 86–69  applicable only with respect to taxable years beginning after  Dec. 31, 1957 , see  section 4 of Pub. L. 86–69 , set out as an Effective Date note under  section 381 of this title .\nAmendment by  Pub. L. 85–866  applicable only with respect to taxable years beginning after  Dec. 31, 1958 , see  section 64(e) of Pub. L. 85–866 , set out as a note under  section 172 of this title .\nAmendment by act  Mar. 13, 1956 , applicable only to taxable years beginning after  Dec. 31, 1954 , see section 6 of act  Mar. 13, 1956 , set out as a note set out under  section 316 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 100–647, title V, §\u202f5021 ,  Nov. 10, 1988 ,  102 Stat. 3666 , as amended by  Pub. L. 101–239, title VII, §\u202f7815(b) ,  Dec. 19, 1989 ,  103 Stat. 2414 , provided that: \n “(a)   General Rule .— Nothing in section 60(b)(5) of the Tax Reform Act of 1984 (as amended by section 1804(e)(4) of the Tax Reform Act of 1986) [ section 60(b)(5) of Pub. L. 98–369 , set out as an Effective Date of 1984 Amendment note above]— “(1)  shall allow any loss (or credit) of any corporation which arises after  April 26, 1988 , to be used to offset the income (or tax) of another corporation if such use would not be allowable without regard to such section 60(b)(5) as so amended, or \n \n “(2)  shall allow any loss (or credit) of any corporation which arises on or before such date to be used to offset disqualified income (or tax attributable to such income) of another corporation if such use would not be allowable without regard to such section 60(b)(5) as so amended. \n \n \n “(b)   Exception for Existing Contracts.— “(1)   In general .— Subsection (a) shall not apply to any loss (or credit) of any corporation if— “(A)  such corporation was in existence on  April 26, 1988 , and \n \n “(B)  such loss (or credit) is used to offset income assigned (or attributable to property contributed) pursuant to a binding contract entered into before  July 26, 1988 . \n \n \n “(2)  $40,000,000  limitation .— The aggregate amount of losses (and the deduction equivalent of credits as determined in the same manner as under section 469(j)(5) of the 1986 Code) to which paragraph (1) applies with respect to any corporation shall not exceed $40,000,000. For purposes of this paragraph, a Native Corporation and all other corporations all of the stock of which is owned directly by such corporation shall be treated as 1 corporation. \n \n “(3)   Special rule for corporations under title 11 .— In the case of a corporation which on  April 26, 1988 , was under the jurisdiction of a Federal district court under title 11 of the United States Code— “(A)  paragraph (1)(B) shall be applied by substituting the date 1 year after the date of the enactment of this Act [ Nov. 10, 1988 ] for ‘ July 26, 1988 ’, \n \n “(B)  paragraph (1) shall not apply to any loss or credit which arises on or after the date 1 year after the date of the enactment of this Act, and \n \n “(C)  paragraph (2) shall be applied by substituting ‘$99,000,000’ for ‘$40,000,000’. \n \n \n \n “(c)   Special Administrative Rules.— “(1)   Notice to native corporations of proposed tax adjustments .— Notwithstanding section 6103 of the 1986 Code, the Secretary of the Treasury or his delegate shall notify a Native Corporation or its designated representative of any proposed adjustment— “(A)  of the tax liability of a taxpayer which has contracted with the Native Corporation (or other corporation all of the stock of which is owned directly by the Native Corporation) for the use of losses of such Native Corporation (or such other corporation), and \n \n “(B)  which is attributable to an asserted overstatement of losses by, or misassignment of income (or income attributable to property contributed) to, an affiliated group of which the Native Corporation (or such other corporation) is a member. \n \n\n Such notice shall only include information with respect to the transaction between the taxpayer and the Native Corporation. \n \n “(2)   Rights of native corporation.— “(A)   In general .— If a Native Corporation receives a notice under paragraph (1), the Native Corporation shall have the right to— “(i)  submit to the Secretary of the Treasury or his delegate a written statement regarding the proposed adjustment, and \n \n “(ii)  meet with the Secretary of the Treasury or his delegate with respect to such proposed adjustment. \n \n\n \u2001\u2001The Secretary of the Treasury or his delegate may discuss such proposed adjustment with the Native Corporation or its designated representative. \n \n “(B)   Extension of statute of limitations .— Subparagraph (A) shall not apply if the Secretary of the Treasury or his delegate determines that an extension of the statute of limitation[s] is necessary to permit the participation described in subparagraph (A) and the taxpayer and the Secretary or his delegate have not agreed to such extension. \n \n \n “(3)   Judicial proceedings .— In the case of any proceeding in a Federal court or the United States Tax Court involving a proposed adjustment under paragraph (1), the Native Corporation, subject to the rules of such court, may file an amicus brief concerning such adjustment. \n \n “(4)   Failures .— For purposes of the 1986 Code, any failure by the Secretary of the Treasury or his delegate to comply with the provisions of this subsection shall not affect the validity of the determination of the Internal Revenue Service of any adjustment of tax liability of any taxpayer described in paragraph (1). \n \n \n “(d)   Disqualified Income Defined .— For purposes of subsection (a), the term ‘disqualified income’ means any income assigned (or attributable to property contributed) after  April 26, 1988 , by a person who is not a Native Corporation or a corporation all the stock of which is owned directly by a Native Corporation. \n \n “(e)   Basis Determination .— For purposes of determining basis for Federal tax purposes, no provision in any law enacted after the date of the enactment of this Act [ Nov. 10, 1988 ] shall affect the date on which the transfer to the Native Corporation is made. The preceding sentence shall apply to all taxable years whether beginning before, on, or after such date of enactment.”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 94–455, title XV, §\u202f1507(c)(2) ,  Oct. 4, 1976 ,  90 Stat. 1740 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)   Limitations on carryovers or carrybacks for groups electing under section 1504( c )(2) .— If an affiliated group elects to file a consolidated return pursuant to section 1501(c)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] a carryover of a loss or credit from a taxable year ending before  January 1, 1981 , and losses or credits which may be carried back to taxable years ending before such date, shall be taken into account as if this section had not been enacted. \n \n “(B)   Nontermination of affiliated group .— The mere election to file a consolidated return pursuant to such section 1504(c)(2) shall not cause the termination of an affiliated group filing consolidated returns.”'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': 'IN GENERAL'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 371 ;  Pub. L. 85–866, title II, §\u202f205(a) ,  Sept. 2, 1958 ,  72 Stat. 1680 ;  Pub. L. 88–272, title II, §\u202f235(b) ,  Feb. 26, 1964 ,  78 Stat. 125 ;  Pub. L. 94–12, title III, §\u202f304(b) ,  Mar. 29, 1975 ,  89 Stat. 45 ;  Pub. L. 94–455, title XIX , §§\u202f1901(a)(158), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1790 , 1834;  Pub. L. 95–600, title III, §\u202f301(b)(18)(A) , (B),  Nov. 6, 1978 ,  92 Stat. 2823 ;  Pub. L. 97–34, title II, §\u202f232(b)(2) ,  Aug. 13, 1981 ,  95 Stat. 250 ;  Pub. L. 99–514, title XVIII, §\u202f1899A(36) ,  Oct. 22, 1986 ,  100 Stat. 2960 ;  Pub. L. 113–295, div. A, title II, §\u202f221(a)(94) ,  Dec. 19, 2014 ,  128 Stat. 4051 , related to disallowance of the benefits of the graduated corporate rates and accumulated earnings credit. Repeal was executed to this section, which is in part I of subchapter B of chapter 6, to reflect the probable intent of Congress, notwithstanding directory language of  Pub. L. 115–97 , which repealed section 1551 in part I of subchapter B of chapter 5.\nRepeal applicable to taxable years beginning after  Dec. 31, 2017 , see  section 13001(c)(1) of Pub. L. 115–97 , set out as an Effective Date of 2017 Amendment note under  section 11 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': 'IN GENERAL'},
  'content': 'If no election is made in such first return, the tax liability shall be allocated among the several members of the group pursuant to the method prescribed in subsection (a)(1).\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1901(a)(159), 1906(b)(13)(A), struck out “beginning after  December 31, 1953 , and ending after the date of enactment of this title” after “group filed for a taxable year”, and “or his delegate” after “Secretary” in two places.\n1964—Subsec. (a)(3).  Pub. L. 88–272  struck out “(determined without regard to the 2 percent increase provided by section 1503(a))”, before “based on their contributions”.\nAmendment by  section 1901(a)(159) of Pub. L. 94–455  applicable with respect to taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 88–272  applicable to taxable years beginning after  Dec. 31, 1963 , see  section 234(c) of Pub. L. 88–272 , set out as a note under  section 1503 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': 'CERTAIN CONTROLLED CORPORATIONS'},
  'content': 'The component members of a controlled group of corporations on a December 31 shall, for their taxable years which include such December 31, be limited for purposes of this subtitle to one $250,000 ($150,000 if any component member is a corporation described in section 535(c)(2)(B)) amount for purposes of computing the accumulated earnings credit under section 535(c)(2) and (3). Such amount shall be divided equally among the component members of such group on such December 31 unless the Secretary prescribes regulations permitting an unequal allocation of such amount.\nIf a corporation has a short taxable year which does not include a December 31 and is a component member of a controlled group of corporations with respect to such taxable year, then for purposes of this subtitle, the amount to be used in computing the accumulated earnings credit under section 535(c)(2) and (3) of such corporation for such taxable year shall be the amount specified in subsection (a) with respect to such group, divided by the number of corporations which are component members of such group on the last day of such taxable year. For purposes of the preceding sentence, section 1563(b) shall be applied as if such last day were substituted for December 31.\n2017— Pub. L. 115–97, §\u202f13001(b)(6)(A) , amended section generally. Prior to amendment, section related to limitations on certain multiple tax benefits in the case of certain controlled corporations.\nSubsec. (a).  Pub. L. 115–97, §\u202f12001(b)(16)(B) , struck out at end “In applying section 55(d)(3), the alternative minimum taxable income of all component members shall be taken into account and any decrease in the exemption amount shall be allocated to the component members in the same manner as under paragraph (3).”\nSubsec. (a)(3).  Pub. L. 115–97, §\u202f12001(b)(16)(A) , struck out par. (3) which read as follows: “one $40,000 exemption amount for purposes of computing the amount of the minimum tax.”\n2014—Subsec. (a).  Pub. L. 113–295, §\u202f221(a)(12)(H)(ii) , substituted “and the amount specified in paragraph (3)” for “,\u2000the amount specified in paragraph (3), and the amount specified in paragraph (4)” in concluding provisions.\nSubsec. (a)(2) to (4).  Pub. L. 113–295, §\u202f221(a)(12)(H)(i) , inserted “and” at end of par. (2), substituted a period for “,\u2000and” at end of par. (3), and struck out par. (4) which read as follows: “one $2,000,000 amount for purposes of computing the tax imposed by section 59A.”\n1996—Subsec. (a).  Pub. L. 104–188  in closing provisions substituted “last 2 sentences” for “last sentence” in two places.\n1988—Subsec. (a).  Pub. L. 100–647  substituted “section 11(b)(1)” for “section 11(b)” in par. (1) and in penultimate sentence.\n1986—Subsec. (a).  Pub. L. 99–514  added par. (3), and in concluding provisions, substituted “amounts specified in paragraph (1) (and the amount specified in paragraph (3))” for “amounts specified in paragraph (1)” and inserted “In applying section 55(d)(3), the alternative minimum taxable income of all component members shall be taken into account and any decrease in the exemption amount shall be allocated to the component members in the same manner as under paragraph (3).”\nPub. L. 99–499 , in subsec. (a) as amended by  Pub. L. 99–514  above, added par. (4), and in concluding provisions substituted “,\u2000the amount specified in paragraph (3), and the amount specified in paragraph (4)” for “(and the amount specified in paragraph (3))”.\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f211(b)(21)(A) , inserted “and” at end of par. (1), substituted a period for the comma at end of par. (2), struck out par. (3) which read as follows: “one $25,000 amount for purposes of computing the limitation on the small business deduction of life insurance companies under sections 804(a)(3) and 809(d)(10), and”, struck out par. (4) which read as follows: “one $1,000,000 amount (adjusted as provided in section 809(f)(3) for purposes of computing the limitation under paragraph (1) or (2) of section 809(f).”, and substituted “paragraph (2)” for “paragraphs (2), (3), and (4)” in concluding provisions.\nPub. L. 98–369, §\u202f66(b) , inserted provision that notwithstanding paragraph (1), in applying last sentence of section 11(b) to such component members, the taxable income of all such component members shall be taken into account and any increase in tax under the last sentence shall be divided among such component members in the same manner as amounts under paragraph (1).\nSubsec. (b).  Pub. L. 98–369, §\u202f211(b)(21)(B) , inserted “and” at end of par. (1), struck out par. (3) which read as follows: “the amount to be used in computing the limitation on the small business deduction of life insurance companies under sections 804(a)(3) and 809(d)(10), and”, struck out par. (4) which read as follows: “the amount (adjusted as provided in section 809(f)(3)) to be used in computing the limitation under paragraph (1) or (2) of section 809(f),”, and substituted “or (2)” for “,\u2000(2), (3), or (4)” in concluding provisions.\n1982—Subsec. (a).  Pub. L. 97–248, §\u202f259(b) , added par. (4) and inserted reference to par. (4) in text following par. (4).\nSubsec. (b).  Pub. L. 97–248, §\u202f259(c) , added par. (4) and inserted reference to subsec. (a)(4) in text following par. (4).\n1981—Subsec. (a)(2).  Pub. L. 97–34  substituted “$250,000 ($150,000 if any component member is a corporation described in section 535(c)(2)(B))” for “$150,000”.\n1978—Subsec. (a).  Pub. L. 95–600, §\u202f301(b)(19)(A) , in par. (1) substituted “amounts in each taxable income bracket in the tax table in section 11(b) which do not aggregate more than the maximum amount in such bracket to which a corporation is not a component member of a controlled group is entitled” for “the surtax exemption under section 11(d)” and in provisions following par. (3) substituted “amounts” for “amount” in two places and struck out provision that in applying section 11(b)(2), the first $25,000 of taxable income and the second $25,000 of taxable income each be allocated among the component members of a controlled group of corporations in the same manner as the surtax exemption is allocated.\nSubsec. (b)(1).  Pub. L. 95–600, §\u202f301(b)(19)(B) , substituted “the amount in each taxable income bracket in the tax table in section 11(b)” for “the surtax exemption under section 11(d)”.\nSubsec. (b)(3).  Pub. L. 95–600, §\u202f703(j)(7) , substituted “804(a)(3)” for “804(a)(4)”.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f901(c)(1), 1906(b)(13)(A), inserted “In applying section 11(b)(2), the first $25,000 of taxable income and the second $25,000 of taxable income shall each be allocated among the component members of a controlled group of corporations in the same manner as the surtax exemption is allocated” after “unequal allocation of such amounts” and struck out “or his delegate” after “Secretary” in two places.\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f1901(b)(1)(J)(v) , substituted “804(a)(3)” for “804(a)(4)” after “under sections”.\n1975—Subsec. (a)(1).  Pub. L. 94–164  struck out “$25,000” in par. (1) as par. (1) is in effect for taxable years ending after  Dec. 31, 1975 .\nPub. L. 94–12, §\u202f303(c)(1) , substituted “$50,000” for “$25,000”.\nSubsec. (a)(2).  Pub. L. 94–12, §\u202f304(b) , substituted “$150,000” for “$100,000”.\n1969— Pub. L. 91–172  provided, with respect to taxable years beginning after  Dec. 31, 1974 , that a controlled group of corporations is limited to one $25,000 surtax exemption under section 11(d), one $100,000 amount for purposes of computing the accumulated earnings credit under section 535(c)(2) and (3), and one $25,000 amount for purposes of computing the limitation on the small business deduction of life insurance companies under sections 804(a)(4) and 809(d)(10).\nAmendment by  section 12001(b)(16) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 12001(c) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  section 13001(b)(6)(A) of Pub. L. 115–97  applicable to transfers made after  Dec. 31, 2017 , see  section 13001(c)(3) of Pub. L. 115–97 , set out as a note under  section 11 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 104–188  effective as if included in the provision of the Revenue Reconciliation Act of 1993,  Pub. L. 103–66 , §§\u202f13001–13444, to which such amendment relates, see section 1703( o ) of  Pub. L. 104–188 , set out as a note under  section 39 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987,  Pub. L. 100–203, title X , to which such amendment relates, see  section 2004(u) of Pub. L. 100–647 , set out as a note under  section 56 of this title .\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , with certain exceptions and qualifications, see  section 701(f) of Pub. L. 99–514 , set out as an Effective Date note under  section 55 of this title .\nAmendment by  Pub. L. 99–499  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 516(c) of Pub. L. 99–499 , set out as a note under  section 26 of this title .\nAmendment by  section 66(b) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 66(c) of Pub. L. 98–369 , set out as a note under  section 11 of this title .\nAmendment by  section 211(b)(21) of Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nPub. L. 97–248, title II, §\u202f263(a)(1) ,  Sept. 3, 1982 ,  96 Stat. 541 , provided that the amendment made by section 259(b), (c) of  Pub. L. 97–248  is applicable to taxable years beginning after  Dec. 31, 1981 , and before  Jan. 1, 1984 .\nAmendment by  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 232(c) of Pub. L. 97–34 , set out as a note under  section 535 of this title .\nAmendment by  section 301(b)(19) of Pub. L. 95–600  applicable to taxable years beginning after  Dec. 31, 1978 , see  section 301(c) of Pub. L. 95–600 , set out as a note under  section 11 of this title .\nAmendment by  section 703(j)(7) of Pub. L. 95–600  effective on  Oct. 4, 1976 , see  section 703(r) of Pub. L. 95–600 , set out as a note under  section 46 of this title .\nAmendment by  section 901(c)(1) of Pub. L. 94–455  applicable to taxable years ending after  Dec. 31, 1975 , see  section 901(d) of Pub. L. 94–455 , set out as a note under  section 11 of this title .\nAmendment by  section 1901(b)(1)(J)(v) of Pub. L. 94–455  effective for taxable years beginning after  Dec. 31, 1976 , see  section 1901(d) of Pub. L. 94–455 , set out as a note under  section 2 of this title .\nAmendment by  Pub. L. 94–164  applicable to taxable years beginning after  Dec. 31, 1975 , see  section 4(e) of Pub. L. 94–164 , set out as a note under  section 11 of this title .\nAmendment by  section 303(c)(1) of Pub. L. 94–12  applicable to taxable years ending after  Dec. 31, 1974 , but to cease to apply for taxable years ending after  Dec. 31, 1975 , see  section 305(b)(1) of Pub. L. 94–12 , set out as a note under  section 11 of this title .\nAmendment by  section 304(b) of Pub. L. 94–12  applicable to taxable years beginning after  Dec. 31, 1974 , see  section 305(c) of Pub. L. 94–12 , set out as an Effective Date of 1975 Amendment note under  section 535 of this title .\nPub. L. 91–172, title IV, §\u202f401(h) ,  Dec. 30, 1969 ,  83 Stat. 604 , provided that: \n “(1)  The amendments made by subsection (a) [amending this section and repealing  section 1562 of this title ] shall apply with respect to taxable years beginning after  December 31, 1974 . \n \n “(2)  The amendments made by subsection (b) [enacting section 1564 and amending sections 11, 535, 804, and 1562] shall apply with respect to taxable years beginning after  December 31, 1969 . \n \n “(3)  The amendments made by subsections (c), (d), (e), and (f) [amending sections 46, 48, 179, and 1563] shall apply with respect to taxable years ending on or after  December 31, 1970 .”\nSection applicable with respect to taxable years ending after  Dec. 31, 1963 , see  section 235(d) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 269 of this title .\nFor applicability of amendment by  section 701(e)(2) of Pub. L. 99–514  notwithstanding any treaty obligation of the United States in effect on  Oct. 22, 1986 , see  section 1012(aa)(2) of Pub. L. 100–647 , set out as a note under  section 861 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': 'CERTAIN CONTROLLED CORPORATIONS'},
  'content': 'Section, added  Pub. L. 88–272, title II, §\u202f235(a) ,  Feb. 26, 1964 ,  78 Stat. 117 , amended  Pub. L. 91–172, title IV, §\u202f401(b)(2)(A) ,  Dec. 30, 1969 ,  83 Stat. 602 , set limits on the privilege of groups to elect multiple surtax exemptions.\nRepeal applicable with respect to taxable years beginning after  Dec. 31, 1974 , see  section 401(h)(1) of Pub. L. 91–172 , set out as an Effective Date of 1969 Amendment note under  section 1561 of this title .\nPub. L. 91–172, title IV, §\u202f401(g) ,  Dec. 30, 1969 ,  83 Stat. 604 , authorized an affiliated group of corporations making a consolidated return for the taxable year which included  Dec. 31, 1970 , to terminate the election under  section 1562 of this title  with respect to any prior Dec. 31 which was included in a taxable year of any such corporations from which there was a net operating loss carryover to the 1970 consolidated return year and provided that the termination of such election was to be valid only if in accord with subsecs. (c)(1) and (e) of  section 1562 of this title  other than the requirement of making the termination prior to the expiration of the 3 year period specified in subsec. (e) of  section 1562 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': 'CERTAIN CONTROLLED CORPORATIONS'},
  'content': 'Two or more corporations if 5 or fewer persons who are individuals, estates, or trusts own (within the meaning of subsection (d)(2)) stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation.\nTwo or more insurance companies subject to taxation under section 801 which are members of a controlled group of corporations described in paragraph (1), (2), or (3). Such insurance companies shall be treated as a controlled group of corporations separate from any other corporations which are members of the controlled group of corporations described in paragraph (1), (2), or (3).\nIf a corporation is a component member of more than one controlled group of corporations with respect to any taxable year, such corporation shall be treated as a component member of only one controlled group. The determination as to the group of which such corporation is a component member shall be made under regulations prescribed by the Secretary which are consistent with the purposes of this part.\nIf any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock.\nStock owned, directly or indirectly, by or for a partnership shall be considered as owned by any partner having an interest of 5 percent or more in either the capital or profits of the partnership in proportion to his interest in capital or profits, whichever such proportion is the greater.\nStock owned, directly or indirectly, by or for a corporation shall be considered as owned by any person who owns (within the meaning of subsection (d)) 5 percent or more in value of its stock in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation.\nAn individual shall be considered as owning stock owned, directly or indirectly, by or for his children who have not attained the age of 21 years, and, if the individual has not attained the age of 21 years, the stock owned, directly or indirectly, by or for his parents.\nAn individual who owns (within the meaning of subsection (d)(2), but without regard to this subparagraph) more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock in a corporation shall be considered as owning the stock in such corporation owned, directly or indirectly, by or for his parents, grandparents, grandchildren, and children who have attained the age of 21 years.\nFor purposes of this section, a legally adopted child of an individual shall be treated as a child of such individual by blood.\nFor purposes of this section the term “employee” has the same meaning such term is given by paragraphs (1) and (2) of section 3121(d).\nExcept as provided in subparagraph (B), stock constructively owned by a person by reason of the application of paragraph (1), (2), (3), (4), (5), or (6) of subsection (e) shall, for purposes of applying such paragraphs, be treated as actually owned by such person.\nStock constructively owned by an individual by reason of the application of paragraph (5) or (6) of subsection (e) shall not be treated as owned by him for purposes of again applying such paragraphs in order to make another the constructive owner of such stock.\nExcept as specifically provided in an applicable provision, subsection (a)(2) shall be applied to an applicable provision as if it read as follows:\nFor purposes of this paragraph, an applicable provision is any provision of law (other than this part) which incorporates the definition of controlled group of corporations under subsection (a).\n2004—Subsec. (a)(2).  Pub. L. 108–357, §\u202f900(a) , substituted “possessing” for “possessing—”, struck out “(B)” before “more than 50 percent of the total combined voting power”, and struck out subpar. (A) which read as follows: “at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of the stock of each corporation, and”.\nSubsec. (f)(5).  Pub. L. 108–357, §\u202f900(b) , added par. (5).\n1988—Subsec. (d)(1)(B).  Pub. L. 100–647  substituted “paragraphs (1), (2), and (3) of subsection (e)” for “subsection (e)(1)”.\n1986—Subsec. (b)(2)(D).  Pub. L. 99–514  struck out “or section 821” after “section 801”.\n1984—Subsecs. (a)(4), (b)(2)(D).  Pub. L. 98–369  substituted “section 801” for “section 802”.\n1976—Subsecs. (b)(4), (f)(3)(B).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1970—Subsec. (f)(1).  Pub. L. 91–373  substituted “by paragraphs (1) and (2) of section 2131(d)” for “in section 3306(i)”.\n1969—Subsec. (a)(2).  Pub. L. 91–172, §\u202f401(c) , redesignated existing provisions with minor changes as par. (A) and added par. (B).\nSubsec. (c)(2)(A)(iv).  Pub. L. 91–172, §\u202f401(d)(1) , added cl. (iv).\nSubsec. (c)(2)(B).  Pub. L. 91–172, §\u202f401(d)(2) , substituted “5 or fewer persons who are individuals, estates, or trusts (referred to in this subparagraph as ‘common owners’) own” for “a person who is an individual, estate, or trust (referred to in this paragraph as ‘common owner’) owns” and in cl. (ii), substituted “any of such common owners”, “any of the common owners” for “such common owner” and “the common owner”, respectively and added cl. (iii).\nPub. L. 108–357, title VIII, §\u202f900(c) ,  Oct. 22, 2004 ,  118 Stat. 1650 , provided that:  “The amendments made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Oct. 22, 2004 ].”\nPub. L. 100–647, title I, §\u202f1018(s)(3)(B) ,  Nov. 10, 1988 ,  102 Stat. 3587 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 1024(e) of Pub. L. 99–514 , set out as a note under  section 831 of this title .\nAmendment by  Pub. L. 98–369  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 215 of Pub. L. 98–369 , set out as an Effective Date note under  section 801 of this title .\nAmendment by  Pub. L. 91–172  applicable with respect to taxable years ending on or after  Dec. 31, 1970 , see  section 401(h)(3) of Pub. L. 91–172 , set out as a note under  section 1561 of this title .\nSection applicable with respect to taxable years ending after  Dec. 31, 1963 , see  section 235(d) of Pub. L. 88–272 , set out as an Effective Date of 1964 Amendment note under  section 269 of this title .'},
 {'metadata': {'subtitle': 'Income Taxes',
   'chapter': 'CONSOLIDATED RETURNS',
   'part': 'CERTAIN CONTROLLED CORPORATIONS'},
  'content': 'Section, added  Pub. L. 91–172, title IV, §\u202f401(b)(1) ,  Dec. 30, 1969 ,  83 Stat. 600 ; amended  Pub. L. 94–455, title XIX , §§\u202f1901(b)(1)(J)(vi), (21)(A)(ii), 1906(b)(13)(A),  Oct. 4, 1976 ,  90 Stat. 1791 , 1797, 1834, related to transitional rules in the case of certain controlled corporations.\nFor provisions that nothing in repeal by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAX IMPOSED'},
  'content': 'A tax is hereby imposed on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States.\n2017—Subsec. (g).  Pub. L. 115–97  amended subsec. (g) generally. Prior to amendment, text read as follows: “For purposes of applying subsection (b)(2) with respect to 1 or more gifts, the rates of tax under subsection (c) in effect at the decedent’s death shall, in lieu of the rates of tax in effect at the time of such gifts, be used both to compute—\n“(1) the tax imposed by chapter 12 with respect to such gifts, and\n“(2) the credit allowed against such tax under section 2505, including in computing—\n“(A) the applicable credit amount under section 2505(a)(1), and\n“(B) the sum of the amounts allowed as a credit for all preceding periods under section 2505(a)(2).”\n2013—Subsec. (c).  Pub. L. 112–240  substituted in table separate tentative tax rates for amounts over $500,000 but not over $750,000, over $750,000 but not over $1,000,000, and over $1,000,000, respectively, for single tentative tax rate for amounts over $500,000.\n2010—Subsec. (b)(2).  Pub. L. 111–312, §\u202f302(d)(1)(A) , substituted “if the modifications described in subsection (g)” for “if the provisions of subsection (c) (as in effect at the decedent’s death)”.\nSubsec. (c).  Pub. L. 111–312, §\u202f302(a)(2) , struck out par. (1) designation and heading preceding table, substituted in table a single tentative tax rate for any amount over $500,000 for separate tentative tax rates for amounts ranging from over $500,000 to over $2,500,000, and struck out par. (2) which related to phasedown of maximum rate of tax.\nSubsec. (g).  Pub. L. 111–312, §\u202f302(d)(1)(B) , added subsec. (g).\n2001—Subsec. (c)(1).  Pub. L. 107–16, §\u202f511(a) , substituted in table provisions that if the amount on which the tax is computed is over $2,500,000, then the tentative tax is $1,025,800, plus 50% of the excess over $2,500,000 for provisions that if the amount on which the tax is computed is over $2,500,000 but not over $3,000,000, then the tentative tax is $1,025,800, plus 53% of the excess over $2,500,000, and if the amount on which the tax is computed is over $3,000,000, then the tentative tax is $1,290,800, plus 55% of the excess over $3,000,000.\nSubsec. (c)(2).  Pub. L. 107–16, §\u202f511(c) , added par. (2).\nPub. L. 107–16, §\u202f511(b) , struck out heading and text of par. (2). Text read as follows: “The tentative tax determined under paragraph (1) shall be increased by an amount equal to 5 percent of so much of the amount (with respect to which the tentative tax is to be computed) as exceeds $10,000,000 but does not exceed the amount at which the average tax rate under this section is 55 percent.”\n1998—Subsec. (f).  Pub. L. 105–206, §\u202f6007(e)(2)(B) , reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If—\n“(1) the time has expired within which a tax may be assessed under chapter 12 (or under corresponding provisions of prior laws) on the transfer of property by gift made during a preceding calendar period (as defined in section 2502(b)), and\n“(2) the value of such gift is shown on the return for such preceding calendar period or is disclosed in such return, or in a statement attached to the return, in a manner adequate to apprise the Secretary of the nature of such gift,\nthe value of such gift shall, for purposes of computing the tax under this chapter, be the value of such gift as finally determined for purposes of chapter 12.”\nSubsec. (f)(2).  Pub. L. 105–277  inserted concluding provisions.\n1997—Subsec. (c)(2).  Pub. L. 105–34, §\u202f501(a)(1)(D) , substituted “the amount at which the average tax rate under this section is 55 percent” for “$21,040,000”.\nSubsec. (f).  Pub. L. 105–34, §\u202f506(a) , added subsec. (f).\n1993—Subsec. (c)(1).  Pub. L. 103–66, §\u202f13208(a) , substituted in table provisions that if the amount on which the tax is computed is over $2,500,000 but not over $3,000,000, then the tentative tax is $1,025,800, plus 53% of the excess over $2,500,000 and if the amount on which the tax is computed is over $3,000,000, then the tentative tax is $1,290,800, plus 55% of the excess over $3,000,000 for provisions that if the amount on which the tax is computed is over $2,500,000, then the tentative tax is $1,025,800, plus 50% of the excess over $2,500,000.\nSubsec. (c)(2), (3).  Pub. L. 103–66, §\u202f13208(b)(1) , (2), redesignated par. (3) as (2), struck out “($18,340,000 in the case of decedents dying, and gifts made, after 1992)” after “exceed $21,040,000”, and struck out former par. (2) which related to the rates of tax on estates under this section for the years 1982 to 1992.\n1987—Subsec. (b)(1).  Pub. L. 100–203, §\u202f10401(b)(2)(A)(i) , substituted “under subsection (c)” for “in accordance with the rate schedule set forth in subsection (c)”.\nSubsec. (b)(2).  Pub. L. 100–203, §\u202f10401(b)(2)(A)(ii) , substituted “the provisions of subsec. (c)” for “the rate schedule set forth in subsection (c)”.\nSubsec. (c)(2)(A).  Pub. L. 100–203, §\u202f10401(a)(1) , substituted “1993” for “1988”.\nSubsec. (c)(2)(D).  Pub. L. 100–203, §\u202f10401(a)(2) , (3), substituted in heading “After 1983 and before 1993” for “For 1984, 1985, 1986, or 1987”, and in text “after 1983 and before 1993” for “in 1984, 1985, 1986, or 1987”.\nSubsec. (c)(3).  Pub. L. 100–203, §\u202f10401(b)(1) , added par. (3).\n1984—Subsec. (c)(2)(A), (D).  Pub. L. 98–369  substituted “1988” for “1985” in subpar. (A) and substituted “1984, 1985, 1986, or 1987” for “1984” in heading and text of subpar. (D).\n1981—Subsec. (b)(2).  Pub. L. 97–34, §\u202f402(c) , inserted “which would have been” before “payable” and “,\u2000if the rate schedule set forth in subsection (c) (as in effect at the decedent’s death) had been applicable at the time of such gifts” after “ December 31, 1976 ,”.\nSubsec. (c).  Pub. L. 97–34, §\u202f402(a) , (b)(1), designated existing provision as par. (1), inserted heading “In general” and substituted in table provision that if the amount computed is over $2,500,000 then the tentative tax is $1,025,800 plus 50% of the excess over $2,500,000 for provisions that if the amount computed is over $2,500,000 but not over $3,000,000, then the tentative tax is $1,025,800 plus 53% of the excess over $2,500,000, over $3,000,000 but not over $3,500,000 then the tentative tax is $1,290,000 plus 57% of the excess over $3,000,000, over $3,500,000 but not over $4,000,000 then the tentative tax is $1,575,800 plus 61% of the excess over $3,500,000, over $4,000,000 but not over $4,500,000 then the tentative tax is $1,880,800 plus 65% of the excess over $4,000,000, over $4,500,000 but not over $5,000,000 then the tentative tax is $2,205,800 plus 69% of the excess over $4,500,000, over $5,000,000 then the tentative tax is $2,550,800 plus 70% of the excess over $5,000,000, and added par. (2).\n1978—Subsec. (e).  Pub. L. 95–600  added subsec. (e).\n1976— Pub. L. 94–455  substituted provisions setting a unified rate schedule for estate and gift taxes ranging from 18 percent for the first $10,000 in taxable transfers to 70 percent of taxable transfers in excess of $5,000,000, with provision for adjustments for gift taxes paid by spouses, for provisions setting an estate tax of 3 percent of the first $5,000 of the taxable estate to 77 percent of the taxable estate in excess of $10,000,000.\nPub. L. 115–97, title I, §\u202f11061(c) ,  Dec. 22, 2017 ,  131 Stat. 2091 , provided that:  “The amendments made by this section [amending this section and  section 2010 of this title ] shall apply to estates of decedents dying and gifts made after  December 31, 2017 .”\nPub. L. 112–240, title I, §\u202f101(c)(3) ,  Jan. 2, 2013 ,  126 Stat. 2318 , provided that: \n “(A)   In general .— Except as otherwise provided by in this paragraph, the amendments made by this subsection [amending this section and  section 2010 of this title ] shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after  December 31, 2012 . \n \n “(B)   Technical correction .— The amendment made by paragraph (2) [amending  section 2010 of this title ] shall take effect as if included in the amendments made by section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 [ Pub. L. 111–312 ].”\nPub. L. 111–312, title III, §\u202f302(f) ,  Dec. 17, 2010 ,  124 Stat. 3302 , as amended by  Pub. L. 113–295, div. A, title II, §\u202f206(b)(2) ,  Dec. 19, 2014 ,  128 Stat. 4027 , provided that:  “Except as otherwise provided in this section, the amendments made by this section [amending this section and sections 2010, 2502, 2505 and 2511 of this title] shall apply to estates of decedents dying, generation-skipping transfers, and gifts made, after  December 31, 2009 .”\nPub. L. 107–16, title V, §\u202f511(f)(1) , (2),  June 7, 2001 ,  115 Stat. 71 , provided that: \n “(1)   Subsections  (a)  and  (b).— The amendments made by subsections (a) and (b) [amending this section] shall apply to estates of decedents dying, and gifts made, after  December 31, 2001 . \n \n “(2)   Subsection  (c).— The amendment made by subsection (c) [amending this section] shall apply to estates of decedents dying, and gifts made, after  December 31, 2002 .”\nAmendment by  Pub. L. 105–277  effective as if included in the provision of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see section 4003( l ) of  Pub. L. 105–277 , set out as a note under  section 86 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nPub. L. 105–34, title V, §\u202f501(f) ,  Aug. 5, 1997 ,  111 Stat. 847 , as amended by  Pub. L. 105–206, title VI, §\u202f6007(a)(2) ,  July 22, 1998 ,  112 Stat. 807 , provided that:  “The amendments made by this section [amending this section and sections 2010, 2032A, 2102, 2503, 2505, 2631, 6018, and 6601 of this title] (other than the amendment made by subsection (d) [amending  section 2631 of this title ]) shall apply to the estates of decedents dying, and gifts made, after  December 31, 1997 .”\nPub. L. 105–34, title V, §\u202f506(e)(1) ,  Aug. 5, 1997 ,  111 Stat. 856 , as amended by  Pub. L. 105–206, title VI, §\u202f6007(e)(1) ,  July 22, 1998 ,  112 Stat. 809 , provided that:  “The amendments made by subsections (a), (c), and (d) [enacting  section 7477 of this title  and amending this section and  section 2504 of this title ] shall apply to gifts made after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 103–66, title XIII, §\u202f13208(c) ,  Aug. 10, 1993 ,  107 Stat. 469 , provided that:  “The amendments made by this section [amending this section and  section 2101 of this title ] shall apply in the case of decedents dying and gifts made after  December 31, 1992 .”\nPub. L. 100–203, title X, §\u202f10401(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–431 , provided that:  “The amendments made by this section [amending this section and  section 2502 of this title ] shall apply in the case of decedents dying, and gifts made, after  December 31, 1987 .”\nPub. L. 98–369, div. A, title I, §\u202f21(b) ,  July 18, 1984 ,  98 Stat. 506 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply to the estates of decedents dying after, and gifts made after,  December 31, 1983 .”\nPub. L. 97–34, title IV, §\u202f402(d) ,  Aug. 13, 1981 ,  95 Stat. 301 , provided that:  “The amendments made by this section [amending this section] shall apply to estates of decedents dying after, and gifts made after,  December 31, 1981 .”\nPub. L. 95–600, title VII, §\u202f702(h)(3) ,  Nov. 6, 1978 ,  92 Stat. 2931 , provided that:  “The amendments made by this subsection [amending this section and  section 2602 of this title ] shall apply with respect to the estates of decedents dying after  December 31, 1976 , except that such amendments shall not apply to transfers made before  January 1, 1977 .”\nPub. L. 94–455, title XX, §\u202f2001(d)(1) ,  Oct. 4, 1976 ,  90 Stat. 1854 , provided that:  “The amendments made by subsections (a) [enacting section 2010, amending this section and sections 2012 and 2035, and repealing  section 2052 of this title ] and (c)(1) [amending sections 2011, 2012, 2013, 2014, 2038, 2044, 2101, 2102, 2104, 2106, 2107, 2206, 2207, and 6018 of this title] shall apply to the estates of decedents dying after  December 31, 1976 ; except that the amendments made by subsection (a)(5) [amending  section 2035 of this title ] and subparagraphs (K) and (L) of subsection (c)(1) [amending sections 2038 and 2104 of this title] shall not apply to transfers made before  January 1, 1977 .”\nPub. L. 91–614, §\u202f1(a) ,  Dec. 31, 1970 ,  84 Stat. 1836 , provided that:  “This Act [enacting  section 6905 of this title ,  section 1232a of Title 15 , Commerce and Trade, and section 1033 of former Title 31, Money and Finance, amending sections 56, 1015, 1223, 2012, 2032, 2055, 2204, 2501, 2502, 2503, 2504, 2512, 2513, 2515, 2521, 2522, 2523, 4061, 4063, 4216, 4251, 4491, 6019, 6040, 6075, 6091, 6161, 6212, 6214, 6324, 6412, 6416, 6501, 6504, and 6512 of this title, and enacting provisions set out as notes under sections 56, 2032, 2204, 2501, 4063, 4216, 4251, 4491, and 6905 of this title] may be cited as the ‘Excise, Estate, and Gift Tax Adjustment Act of 1970’.”\nPub. L. 111–312, title III, §\u202f301(c) ,  Dec. 17, 2010 ,  124 Stat. 3300 , provided that:  “Notwithstanding subsection (a) [amending sections 121, 170, 684, 1014, 1040, 1221, 1246, 1291, 1296, 4947, 6018, 6019, 6075, and 7701 of this title and repealing sections 1022, 2210, 2664, and 6716 of this title], in the case of an estate of a decedent dying after  December 31, 2009 , and before  January 1, 2011 , the executor (within the meaning of section 2203 of the Internal Revenue Code of 1986) may elect to apply such Code as though the amendments made by subsection (a) do not apply with respect to chapter 11 of such Code and with respect to property acquired or passing from such decedent (within the meaning of section 1014(b) of such Code). Such election shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary’s delegate shall provide. Such an election once made shall be revocable only with the consent of the Secretary of the Treasury or the Secretary’s delegate. For purposes of section 2652(a)(1) of such Code, the determination of whether any property is subject to the tax imposed by such chapter 11 shall be made without regard to any election made under this subsection.”\nPub. L. 98–369, div. A, title VI, §\u202f641 ,  July 18, 1984 ,  98 Stat. 939 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— Nothing in any provision of law exempting any property (or interest therein) from taxation shall exempt the transfer of such property (or interest therein) from Federal estate, gift, and generation-skipping transfer taxes. In the case of any provision of law enacted after the date of the enactment of this Act [ July 18, 1984 ], such provision shall not be treated as exempting the transfer of property from Federal estate, gift, and generation-skipping transfer taxes unless it refers to the appropriate provisions of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(b)   Effective Date.— “(1)   In general .— The provisions of subsection (a) shall apply to the estates of decedents dying, gifts made, and transfers made on or after  June 19, 1984 . \n \n “(2)   Treatment of certain transfers treated as taxable .— The provisions of subsection (a) shall also apply in the case of any transfer of property (or interest therein) if at any time there was filed an estate or gift tax return showing such transfer as subject to Federal estate or gift tax. \n \n “(3)   No inference .— No inference shall arise from paragraphs (1) and (2) that any transfer of property (or interest therein) before  June 19, 1984 , is exempt from Federal estate and gift taxes.”\nPub. L. 98–369, div. A, title VI, §\u202f642 ,  July 18, 1984 ,  98 Stat. 939 , provided that: \n “(a)   General Rule .— With respect to transfers of public housing bonds occurring after  December 31, 1983 , and before  June 19, 1984 , the taxpayer shall report the date and amount of such transfer and such other information as the Secretary of the Treasury or his delegate shall prescribe by regulations to allow the determination of the tax and interest due if it is ultimately determined that such transfers are subject to estate, gift, or generation-skipping tax. \n \n “(b)   Penalty for Failure to Report .— Any taxpayer failing to provide the information required by subsection (a) shall be liable for a penalty equal to 25 percent of the excess of (1) the estate, gift, or generation-skipping tax that is payable assuming that such transfers are subject to tax, over (2) the tax payable assuming such transfers are not so subject.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAX IMPOSED'},
  'content': 'The tax imposed by this chapter shall be paid by the executor.\n1989— Pub. L. 101–239  substituted “The” for “Except as provided in section 2210, the”.\n1984— Pub. L. 98–369  inserted exception phrase.\nPub. L. 101–239, title VII, §\u202f7304(b)(3) ,  Dec. 19, 1989 ,  103 Stat. 2353 , provided that:  “The amendments made by this subsection [amending this section and  section 6018 of this title  and repealing  section 2210 of this title ] shall apply to estates of decedents dying after  July 12, 1989 .”\nPub. L. 98–369, div. A, title V, §\u202f544(d) ,  July 18, 1984 ,  98 Stat. 894 , provided that:  “The amendments made by this section [enacting  section 2210 of this title  and amending this section and sections 6018 and 6166 of this title] shall apply to those estates of decedents which are required to file returns on a date (including any extensions) after the date of enactment of this Act [ July 18, 1984 ].”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'A credit of the applicable credit amount shall be allowed to the estate of every decedent against the tax imposed by section 2001.\nThe amount of the credit allowable under subsection (a) shall be reduced by an amount equal to 20 percent of the aggregate amount allowed as a specific exemption under section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) with respect to gifts made by the decedent after  September 8, 1976 .\nFor purposes of this section, the applicable credit amount is the amount of the tentative tax which would be determined under section 2001(c) if the amount with respect to which such tentative tax is to be computed were equal to the applicable exclusion amount.\nFor purposes of this subsection, the basic exclusion amount is $5,000,000.\nIn the case of estates of decedents dying or gifts made after  December 31, 2017 , and before  January 1, 2026 , subparagraph (A) shall be applied by substituting “$10,000,000” for “$5,000,000”.\nA deceased spousal unused exclusion amount may not be taken into account by a surviving spouse under paragraph (2) unless the executor of the estate of the deceased spouse files an estate tax return on which such amount is computed and makes an election on such return that such amount may be so taken into account. Such election, once made, shall be irrevocable. No election may be made under this subparagraph if such return is filed after the time prescribed by law (including extensions) for filing such return.\nNotwithstanding any period of limitation in section 6501, after the time has expired under section 6501 within which a tax may be assessed under chapter 11 or 12 with respect to a deceased spousal unused exclusion amount, the Secretary may examine a return of the deceased spouse to make determinations with respect to such amount for purposes of carrying out this subsection.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subsection.\nThe amount of the credit allowed by subsection (a) shall not exceed the amount of the tax imposed by section 2001.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Tax Reform Act of 1976, referred to in subsec. (b), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 . For complete classification of this Act to the Code, see Tables.\nSection 2521 of this title , referred to in subsec. (b), was repealed by  section 2001(b)(3) of Pub. L. 94–455 , applicable to gifts made after  Dec. 31, 1976 .\n2017—Subsec. (c)(3)(B)(ii).  Pub. L. 115–97, §\u202f11002(d)(1)(CC) , substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\nSubsec. (c)(3)(C).  Pub. L. 115–97, §\u202f11061(a) , added subpar. (C).\n2013—Subsec. (c)(4)(B)(i).  Pub. L. 112–240  substituted “applicable exclusion amount” for “basic exclusion amount”.\n2010—Subsec. (c).  Pub. L. 111–312, §\u202f302(a)(1) , amended subsec. (c) generally, substituting pars. (1) and (2) for text which provided that the applicable credit amount for purposes of this section was the amount of the tentative tax which would be determined under the rate schedule set forth in section 2001(c) if the amount with respect to which such tentative tax was to be computed were the applicable exclusion amount determined in accordance with the table, covering years 2002 to 2009, included in that text.\nSubsec. (c)(2) to (6).  Pub. L. 111–312, §\u202f303(a) , added pars. (2) to (6) and struck out former par. (2). Prior to amendment, text of par. (2) read as follows:\n“(A)  In general .—For purposes of this subsection, the applicable exclusion amount is $5,000,000.\n“(B)  Inflation adjustment .—In the case of any decedent dying in a calendar year after 2011, the dollar amount in subparagraph (A) shall be increased by an amount equal to—\n“(i) such dollar amount, multiplied by\n“(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘calendar year 2010’ for ‘calendar year 1992’ in subparagraph (B) thereof.\nIf any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.”\n2001—Subsec. (c).  Pub. L. 107–16 , in table, substituted provision that in the case of estates of decedents dying during the years 2002 and 2003, the years 2004 and 2005, the years 2006, 2007, and 2008, and the year 2009, the applicable exclusion amount is $1,000,000, $1,500,000, $2,000,000, and $3,500,000, respectively, for provision that in the case of decedents dying, and gifts made, during the year 1998, the year 1999, the years 2000 and 2001, the years 2002 and 2003, the year 2004, the year 2005, and the year 2006 or thereafter, the applicable exclusion amount is $625,000, $650,000, $675,000, $700,000, $850,000, $950,000, and $1,000,000, respectively.\n1997—Subsec. (a).  Pub. L. 105–34, §\u202f501(a)(1)(A) , substituted “the applicable credit amount” for “$192,800”.\nSubsecs. (c), (d).  Pub. L. 105–34, §\u202f501(a)(1)(B) , added subsec. (c) and redesignated former subsec. (c) as (d).\n1990—Subsecs. (b) to (d).  Pub. L. 101–508  redesignated subsecs. (c) and (d) as (b) and (c), respectively, and struck out former subsec. (b) which provided for a phase-in of the unified credit against estate tax.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f401(a)(1) , substituted “$192,800” for “$47,000”.\nSubsec. (b).  Pub. L. 97–34, §\u202f401(a)(2)(A) , struck out “$47,000” before “credit” from heading and in text substituted in subsec. (a) substitutions for “$192,800” amounts of “$62,800”, “$79,300”, “$96,300”, “$121,800”, and “$155,800” in the case of decedents dying in 1982, 1983, 1984, 1985, and 1986, respectively, for subsec. (a) substitutions for “$47,000” amounts of “$30,000”, “$34,000”, “$38,000”, and “$42,500” in the case of decedents dying in 1977, 1978, 1979, and 1980, respectively.\nAmendment by  section 11002(d)(1)(CC) of Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  section 11061(a) of Pub. L. 115–97  applicable to estates of decedents dying and gifts made after  Dec. 31, 2017 , see  section 11061(c) of Pub. L. 115–97 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 112–240  effective as if included in the amendments made by section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,  Pub. L. 111–312 , see  section 101(c)(3)(B) of Pub. L. 112–240 , set out as a note under  section 2001 of this title .\nAmendment by  section 302(a)(1) of Pub. L. 111–312  applicable to estates of decedents dying, generation-skipping transfers, and gifts made, after  Dec. 31, 2009 , see  section 302(f) of Pub. L. 111–312 , set out as a note under  section 2001 of this title .\nPub. L. 111–312, title III, §\u202f303(c) ,  Dec. 17, 2010 ,  124 Stat. 3303 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 2505, 2631, and 6018 of this title] shall apply to estates of decedents dying and gifts made after  December 31, 2010 . \n \n “(2)   Conforming amendment relating to generation-skipping transfers .— The amendment made by subsection (b)(2) [amending  section 2631 of this title ] shall apply to generation-skipping transfers after  December 31, 2010 .”\nPub. L. 107–16, title V, §\u202f521(e) ,  June 7, 2001 ,  115 Stat. 72 , provided that: \n “(1)   In general .— Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 2057, 2505, and 2631 of this title] shall apply to estates of decedents dying, and gifts made, after  December 31, 2001 . \n \n “(2)   Subsection  (b)(2).— The amendments made by subsection (b)(2) [amending  section 2505 of this title ] shall apply to gifts made after  December 31, 2009 . \n \n “(3)   Subsections  (c)  and  (d).— The amendments made by subsections (c) and (d) [amending sections 2057 and 2631 of this title] shall apply to estates of decedents dying, and generation-skipping transfers, after  December 31, 2003 .”\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying, and gifts made, after  Dec. 31, 1997 , see  section 501(f) of Pub. L. 105–34 , set out as a note under  section 2001 of this title .\nPub. L. 97–34, title IV, §\u202f401(c)(1) ,  Aug. 13, 1981 ,  95 Stat. 300 , provided that:  “The amendments made by subsection (a) [amending this section and  section 6018 of this title ] shall apply to the estates of decedents dying after  December 31, 1981 ”.\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 374 ;  Feb. 20, 1956, ch. 63, §\u202f3 ,  70 Stat. 24 ;  Pub. L. 85–866, title I , §§\u202f65(a), 102(c)(1),  Sept. 2, 1958 ,  72 Stat. 1657 , 1674;  Pub. L. 86–175, §\u202f3 ,  Aug. 21, 1959 ,  73 Stat. 397 ;  Pub. L. 94–455, title XIX , §§\u202f1902(a)(12)(B), 1906(b)(13)(A), title XX, §§\u202f2001(c)(1)(A), 2004(f)(3),  Oct. 4, 1976 ,  90 Stat. 1806 , 1834, 1849, 1872;  Pub. L. 97–34, title IV, §\u202f422(e)(2) ,  Aug. 13, 1981 ,  95 Stat. 316 ;  Pub. L. 107–16, title V , §§\u202f531(a), 532(a),  June 7, 2001 ,  115 Stat. 72 , 73;  Pub. L. 107–134, title I, §\u202f103(b)(1) ,  Jan. 23, 2002 ,  115 Stat. 2431 , related to credit for State death taxes.\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'If a tax on a gift has been paid under chapter 12 (sec. 2501 and following), or under corresponding provisions of prior laws, and thereafter on the death of the donor any amount in respect of such gift is required to be included in the value of the gross estate of the decedent for purposes of this chapter, then there shall be credited against the tax imposed by section 2001 the amount of the tax paid on a gift under chapter 12, or under corresponding provisions of prior laws, with respect to so much of the property which constituted the gift as is included in the gross estate, except that the amount of such credit shall not exceed an amount which bears the same ratio to the tax imposed by section 2001 (after deducting from such tax the unified credit provided by section 2010) as the value (at the time of the gift or at the time of the death, whichever is lower) of so much of the property which constituted the gift as is included in the gross estate bears to the value of the entire gross estate reduced by the aggregate amount of the charitable and marital deductions allowed under sections 2055, 2056, and 2106(a)(2).\nFor purposes of subsection (a), the amount of tax paid on a gift under chapter 12, or under corresponding provisions of prior laws, with respect to any gift shall be an amount which bears the same ratio to the total tax paid for the calendar quarter (or calendar year if the gift was made before  January 1, 1971 ) in which the gift was made as the amount of such gift bears to the total amount of taxable gifts (computed without deduction of the specific exemption) for such quarter or year.\nFor purposes of paragraph (1), the “amount of such gift” shall be the amount included with respect to such gift in determining (for the purposes of section 2503(a), or of corresponding provisions of prior laws) the total amount of gifts made during such quarter or year, reduced by the amount of any deduction allowed with respect to such gift under section 2522, or under corresponding provisions of prior laws (relating to charitable deduction), or under section 2523 (relating to marital deduction).\nNo credit shall be allowed under this section with respect to the amount of any tax paid under chapter 12 on any gift made after  December 31, 1976 .\n2001—Subsec. (a).  Pub. L. 107–16  struck out “the credit for State death taxes provided by section 2011 and” before “the unified credit”.\n1981—Subsec. (b)(2).  Pub. L. 97–34  substituted “the amount of such value, reduced as provided in paragraph (1)” for “an amount which bears the same ratio to such value (reduced as provided in paragraph (1) of this subsection) as the aggregate amount of the marital deductions allowed under section 2056(a) bears to the aggregate amount of such marital deductions computed without regard to subsection (c) thereof”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f2001(c)(1)(B) , substituted “provided by section 2011 and the unified credit provided by section 2010” for “provided by section 2011”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1902(a)(1)(A) , added heading and substituted a comma for a dash after “deduction)” in pars. (2) and (3).\nSubsec. (c).  Pub. L. 94–455, §\u202f1902(a)(1)(B) , added heading.\nSubsec. (d).  Pub. L. 94–455, §\u202f1902(a)(1)(C) , (D), added headings for subsec. (d) and for pars. (1) and (2).\nSubsec. (e).  Pub. L. 94–455, §\u202f2001(a)(3) , added subsec. (e).\n1970—Subsec. (b)(1).  Pub. L. 91–614, §\u202f102(d)(2)(A) , substituted “the calendar quarter (or calendar year if the gift was made before  January 1, 1971 )” for “the year”.\nSubsec. (d).  Pub. L. 91–614, §\u202f102(d)(2)(B) , substituted “such quarter or year” for “such year” in two places.\nSubsec. (d)(1).  Pub. L. 91–614, §\u202f102(d)(2)(A) , substituted “the calendar quarter (or calendar year if the gift was made before  January 1, 1971 )” for “the year”.\nPub. L. 107–16, title V, §\u202f532(d) ,  June 7, 2001 ,  115 Stat. 75 , provided that:  “The amendments made by this section [enacting  section 2058 of this title  and amending this section and sections 2011, 2013 to 2016, 2053, 2056A, 2102, 2106, 2107, 2201, 2604, 6511, and 6612 of this title] shall apply to estates of decedents dying, and generation-skipping transfers, after  December 31, 2004 .”\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , but inapplicable under certain conditions under will executed before date which is 30 days after  Aug. 13, 1981 , or under trust created by such date, see  section 403(e) of Pub. L. 97–34 , set out as a note under  section 2056 of this title .\nPub. L. 94–455, title XIX, §\u202f1902(c)(1) ,  Oct. 4, 1976 ,  90 Stat. 1806 , as amended by  Pub. L. 95–600, title VII, §\u202f703(j)(12) ,  Nov. 6, 1978 ,  92 Stat. 2942 , provided that:  “The amendments made by paragraphs (1) through (8), and paragraphs (12)(A), (B), and (C), of subsection (a) and by subsection (b) [amending this section and sections 2011, 2013, 2016, 2038, 2053, 2055, 2056, 2106, 2107, 2108, 2201, 6167, and 6503 of this title, repealing  section 2202 of this title , and enacting provisions set out as a note under  section 2201 of this title ] shall apply in the case of estates of decedents dying after the date of the enactment of this Act [ Oct. 4, 1976 ], and the amendment made by paragraph (9) of subsection (a) [amending  section 2204 of this title ] shall apply in the case of estates of decedents dying after  December 31, 1970 .”\nAmendment by section 2001(a)(3), (c)(1)(B) of  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Subject to the limitation prescribed in subsection (c), the credit provided by this section shall be an amount which bears the same ratio to the estate tax paid (adjusted as indicated hereinafter) with respect to the estate of the transferor as the value of the property transferred bears to the taxable estate of the transferor (determined for purposes of the estate tax) decreased by any death taxes paid with respect to such estate. For purposes of the preceding sentence, the estate tax paid shall be the Federal estate tax paid increased by any credits allowed against such estate tax under section 2012, or corresponding provisions of prior laws, on account of gift tax, and for any credits allowed against such estate tax under this section on account of prior transfers where the transferor acquired property from a person who died within 10 years before the death of the decedent.\nIf the credit provided in this section relates to property received from 2 or more transferors, the limitation provided in paragraph (1) of this subsection shall be computed by aggregating the value of the property so transferred to the decedent. The aggregate limitation so determined shall be apportioned in accordance with the value of the property transferred to the decedent by each transferor.\nFor purposes of this section, the term “property” includes any beneficial interest in property, including a general power of appointment (as defined in section 2041).\n2001—Subsec. (c)(1)(A).  Pub. L. 107–16  struck out “2011,” after “sections 2010,”.\n1997—Subsec. (g).  Pub. L. 105–34  struck out heading and text of subsec. (g). Prior to amendment, text read as follows: “For purposes of this section, the estate tax paid shall not include any portion of such tax attributable to section 4980A(d).”\n1988—Subsec. (g).  Pub. L. 100–647  added subsec. (g).\n1986—Subsec. (g).  Pub. L. 99–514  struck out subsec. (g) which provided for treatment of tax imposed on certain generation-skipping transfers.\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f2001(c)(1)(C)(i) , struck out “and increased by the exemption provided for by section 2052 or section 2106(a)(3), or the corresponding provisions of prior laws, in determining the taxable estate of the transferor for purposes of the estate tax” after “death taxes paid with respect to such estate”.\nSubsec. (c)(1)(A).  Pub. L. 94–455, §\u202f2001(c)(1)(C)(ii) , substituted “credits provided for in sections 2010, 2011, 2012, and 2014) computed” for “credits for State death taxes, gift tax, and foreign death taxes provided for in sections 2011, 2012, and 2014) computed”.\nSubsec. (d)(3).  Pub. L. 94–455, §\u202f1902(a)(2) , struck out “,\u2000or the corresponding provision of prior law,” after “marital deductions)”.\nSubsec. (f).  Pub. L. 94–455, §\u202f2003(c) , added subsec. (f).\nSubsec. (g).  Pub. L. 94–455, §\u202f2006(b)(2) , added subsec. (g).\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying after  Dec. 31, 1996 , see  section 1073(c) of Pub. L. 105–34 , set out as an Effective Date of Repeal note under  section 4980A of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as an Effective Date note under  section 2601 of this title .\nAmendment by  section 1902(a)(2) of Pub. L. 94–455  applicable to estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'The tax imposed by section 2001 shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any foreign country in respect of any property situated within such foreign country and included in the gross estate (not including any such taxes paid with respect to the estate of a person other than the decedent). The determination of the country within which property is situated shall be made in accordance with the rules applicable under subchapter B (sec. 2101 and following) in determining whether property is situated within or without the United States.\nIn any case where a deduction is allowed under section 2053(d) for an estate, succession, legacy, or inheritance tax imposed by and actually paid to any foreign country upon a transfer by the decedent for public, charitable, or religious uses described in section 2055, the property described in subparagraphs (A), (B), and (C) of paragraphs (1) and (2) of subsection (b) of this section shall not include any property in respect of which such deduction is allowed under section 2053(d).\nFor purposes of the credits authorized by this section, each possession of the United States shall be deemed to be a foreign country.\n2001—Subsec. (b)(2).  Pub. L. 107–16  struck out “,\u20002011,” after “sections 2010” in introductory provisions.\n1976—Subsec. (b)(2).  Pub. L. 94–455, §\u202f2001(c)(1)(G) , inserted reference to section 2010 in introductory provisions.\nSubsecs. (c), (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1966—Subsec. (a).  Pub. L. 89–809  struck out provision that, if the decedent at the time of his death was not a citizen of the United States, credit would not be allowed under this section unless the foreign country of which the decedent was a citizen or subject, in imposing estate, inheritance, legacy, or succession taxes, allows a similar credit in the case of a citizen of the United States resident in such country.\nSubsec. (h).  Pub. L. 89–809  added subsec. (h).\n1959—Subsecs. (f), (g).  Pub. L. 86–175  added subsec. (f) and redesignated former subsec. (f) as (g).\n1958—Subsec. (f).  Pub. L. 85–866  added subsec. (f).\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 106(b)(4) of Pub. L. 89–809 , set out as a note under  section 901 of this title .\nAmendment by  Pub. L. 86–175  applicable with respect to estates of decedents dying on or after  July 1, 1955 , see  section 4 of Pub. L. 86–175 , set out as a note under  section 2053 of this title .\nPub. L. 85–866, title I, §\u202f102(d) ,  Sept. 2, 1958 ,  72 Stat. 1675 , provided that:  “The amendments made by this section (other than by subsection (b)) [enacting  section 2208 of this title  and amending this section and sections 2011 and 2053 of this title] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Sept. 2, 1958 ]. The amendment made by subsection (b) [amending  section 2501 of this title ] shall apply to gifts made after the date of the enactment of this Act.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'Where an election is made under section 6163(a) to postpone payment of the tax imposed by section 2001, or 2101, such part of any estate, inheritance, legacy, or succession taxes allowable as a credit under section 2014, as is attributable to a reversionary or remainder interest may be allowed as a credit against the tax attributable to such interest, subject to the limitations on the amount of the credit contained in such sections, if such part is paid, and credit therefor claimed, at any time before the expiration of the time for payment of the tax imposed by section 2001 or 2101 as postponed and extended under section 6163.\n2001— Pub. L. 107–16  struck out “2011 or” before “2014”.\n1958— Pub. L. 85–866  substituted “the time for payment of the tax imposed by section 2001 or 2101 as postponed and extended under section 6163” for “60 days after the termination of the precedent interest or interests in the property”.\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nPub. L. 85–866, title I, §\u202f66(a)(3) ,  Sept. 2, 1958 ,  72 Stat. 1658 , provided that:  “The amendments made by paragraphs (1) and (2) [amending this section and section 927 of I.R.C. 1939] shall apply in the case of any reversionary or remainder interest in property only if the precedent interest or interests in the property did not terminate before the beginning of the 60-day period which ends on the date of the enactment of this Act [ Sept. 2, 1958 ].”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'CREDITS AGAINST TAX'},
  'content': 'If any tax claimed as a credit under section 2014 is recovered from any foreign country, the executor, or any other person or persons recovering such amount, shall give notice of such recovery to the Secretary at such time and in such manner as may be required by regulations prescribed by him, and the Secretary shall (despite the provisions of section 6501) redetermine the amount of the tax under this chapter and the amount, if any, of the tax due on such redetermination, shall be paid by the executor or such person or persons, as the case may be, on notice and demand. No interest shall be assessed or collected on any amount of tax due on any redetermination by the Secretary resulting from a refund to the executor of tax claimed as a credit under section 2014, for any period before the receipt of such refund, except to the extent interest was paid by the foreign country on such refund.\n2002— Pub. L. 107–147  struck out “any State, any possession of the United States, or the District of Columbia,” after “any foreign country,”.\n2001— Pub. L. 107–16  struck out “2011 or” before “2014 is recovered”.\n1976— Pub. L. 94–455  struck out “Territory or” after “any State, any” and “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  section 1902(a)(12)(C) of Pub. L. 94–455  applicable to estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The value of the gross estate of the decedent shall be determined by including to the extent provided for in this part, the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated.\nIn the case of stock and securities of a corporation the value of which, by reason of their not being listed on an exchange and by reason of the absence of sales thereof, cannot be determined with reference to bid and asked prices or with reference to sales prices, the value thereof shall be determined by taking into consideration, in addition to all other factors, the value of stock or securities of corporations engaged in the same or a similar line of business which are listed on an exchange.\nFor purposes of paragraph (1), the term “applicable percentage” means 40 percent reduced (but not below zero) by 2 percentage points for each percentage point (or fraction thereof) by which the value of the qualified conservation easement is less than 30 percent of the value of the land (determined without regard to the value of such easement and reduced by the value of any retained development right (as defined in paragraph (5))). The values taken into account under the preceding sentence shall be such values as of the date of the contribution referred to in paragraph (8)(B).\nThe exclusion provided in paragraph (1) shall not apply to the extent that the land is debt-financed property.\nThe term “debt-financed property” means any property with respect to which there is an acquisition indebtedness (as defined in clause (ii)) on the date of the decedent’s death.\nParagraph (1) shall not apply to the value of any development right retained by the donor in the conveyance of a qualified conservation easement.\nIf every person in being who has an interest (whether or not in possession) in the land executes an agreement to extinguish permanently some or all of any development rights (as defined in subparagraph (D)) retained by the donor on or before the date for filing the return of the tax imposed by section 2001, then any tax imposed by section 2001 shall be reduced accordingly. Such agreement shall be filed with the return of the tax imposed by section 2001. The agreement shall be in such form as the Secretary shall prescribe.\nFor purposes of this paragraph, the term “development right” means any right to use the land subject to the qualified conservation easement in which such right is retained for any commercial purpose which is not subordinate to and directly supportive of the use of such land as a farm for farming purposes (within the meaning of section 2032A(e)(5)).\nThe election under this subsection shall be made on or before the due date (including extensions) for filing the return of tax imposed by section 2001 and shall be made on such return. Such an election, once made, shall be irrevocable.\nAn executor making the election described in paragraph (6) shall, for purposes of calculating the amount of tax imposed by section 2001, include the value of any development right (as defined in paragraph (5)) retained by the donor in the conveyance of such qualified conservation easement. The computation of tax on any retained development right prescribed in this paragraph shall be done in such manner and on such forms as the Secretary shall prescribe.\nThe term “qualified conservation easement” means a qualified conservation contribution (as defined in section 170(h)(1)) of a qualified real property interest (as defined in section 170(h)(2)(C)), except that clause (iv) of section 170(h)(4)(A) shall not apply, and the restriction on the use of such interest described in section 170(h)(2)(C) shall include a prohibition on more than a de minimis use for a commercial recreational activity.\nThe term “member of the decedent’s family” means any member of the family (as defined in section 2032A(e)(2)) of the decedent.\nIn any case in which the qualified conservation easement is granted after the date of the decedent’s death and on or before the due date (including extensions) for filing the return of tax imposed by section 2001, the deduction under section 2055(f) with respect to such easement shall be allowed to the estate but only if no charitable deduction is allowed under chapter 1 to any person with respect to the grant of such easement.\nThis section shall apply to an interest in a partnership, corporation, or trust if at least 30 percent of the entity is owned (directly or indirectly) by the decedent, as determined under the rules described in section 2057(e)(3) (as in effect before its repeal).\nFor executor’s right to be furnished on request a statement regarding any valuation made by the Secretary within the gross estate, see section 7517.\nSection 2057, referred to in subsec. (c)(10), was repealed by  Pub. L. 113–295, div. A, title II, §\u202f221(a)(97)(A) ,  Dec. 19, 2014 ,  128 Stat. 4051 , effective  Dec. 19, 2014 .\n2018—Subsec. (c)(1)(B).  Pub. L. 115–141, §\u202f401(a)(200) , substituted “(B) $500,000.” for “(II) $500,000.”\nSubsec. (c)(2).  Pub. L. 115–141, §\u202f401(a)(201) , substituted “paragraph (5))).” for “paragraph (5)).”\n2014—Subsec. (c)(1).  Pub. L. 113–295, §\u202f221(a)(96) , substituted “(II) $500,000.” for “(B) the exclusion limitation.”\nSubsec. (c)(3).  Pub. L. 113–295, §\u202f221(a)(96) , struck out par. (3), which set out table of exclusion limitations.\nSubsec. (c)(10).  Pub. L. 113–295, §\u202f221(a)(97)(B) , inserted “(as in effect before its repeal)” before period at end.\n2001—Subsec. (c)(2).  Pub. L. 107–16, §\u202f551(b) , inserted at end “The values taken into account under the preceding sentence shall be such values as of the date of the contribution referred to in paragraph (8)(B).”\nSubsec. (c)(8)(A)(i).  Pub. L. 107–16, §\u202f551(a) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “which is located—\n“(I) in or within 25 miles of an area which, on the date of the decedent’s death, is a metropolitan area (as defined by the Office of Management and Budget),\n“(II) in or within 25 miles of an area which, on the date of the decedent’s death, is a national park or wilderness area designated as part of the National Wilderness Preservation System (unless it is determined by the Secretary that land in or within 25 miles of such a park or wilderness area is not under significant development pressure), or\n“(III) in or within 10 miles of an area which, on the date of the decedent’s death, is an Urban National Forest (as designated by the Forest Service),”.\n1998—Subsec. (c)(6).  Pub. L. 105–206, §\u202f6007(g)(2) , substituted “on or before the due date (including extensions) for filing the return of tax imposed by section 2001 and shall be made on such return.” for “on the return of the tax imposed by section 2001.”\nSubsec. (c)(9).  Pub. L. 105–206, §\u202f6007(g)(1) , added par. (9). Former par. (9) redesignated (10).\nSubsec. (c)(10).  Pub. L. 105–277, §\u202f4006(c)(3) , substituted “section 2057(e)(3)” for “section 2033A(e)(3)”.\nPub. L. 105–206, §\u202f6007(g)(1) , redesignated par. (9) as (10).\n1997—Subsecs. (c), (d).  Pub. L. 105–34  added subsec. (c) and redesignated former subsec. (c) as (d).\n1976—Subsec. (c).  Pub. L. 94–455  added subsec. (c).\n1962—Subsec. (a).  Pub. L. 87–834  struck out provisions which excepted real property situated outside the United States.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nPub. L. 107–16, title V, §\u202f551(c) ,  June 7, 2001 ,  115 Stat. 86 , provided that:  “The amendments made by this section [amending this section] shall apply to estates of decedents dying after  December 31, 2000 .”\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying after  Dec. 31, 1997 , see  section 508(e)(1) of Pub. L. 105–34 , set out as a note under  section 1014 of this title .\nPub. L. 87–834, §\u202f18(b) ,  Oct. 16, 1962 ,  76 Stat. 1052 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by subsection (a) [amending this section and sections 2033, 2034, 2035, 2036, 2037, 2038, 2040, and 2041 of this title] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Oct. 16, 1962 ]. \n \n “(2)  In the case of a decedent dying after the date of the enactment of this Act [ Oct. 16, 1962 ] and before  July 1, 1964 , the value of real property situated outside of the United States shall not be included in the gross estate (as defined in section 2031(a)) of the decedent— “(A)  under section 2033, 2034, 2035(a), 2036(a), 2037(a), or 2038(a) to the extent the real property, or the decedent’s interest in it, was acquired by the decedent before  February 1, 1962 ; \n \n “(B)  under section 2040 to the extent such property or interest was acquired by the decedent before  February 1, 1962 , or was held by the decedent and the survivor in a joint tenancy or tenancy by the entirety before  February 1, 1962 ; or \n \n “(C)  under section 2041(a) to the extent that before  February 1, 1962 , such property or interest was subject to a general power of appointment (as defined in section 2041) possessed by the decedent. \n \n\n In the case of real property, or an interest therein, situated outside of the United States (including a general power of appointment in respect of such property or interest, and including property held by the decedent and the survivor in a joint tenancy or tenancy by the entirety) which was acquired by the decedent after  January 31, 1962 , by gift within the meaning of section 2511, or from a prior decedent by devise or inheritance, or by reason of death, form of ownership, or other conditions (including the exercise or nonexercise of a power of appointment), for purposes of this paragraph such property or interest therein shall be deemed to have been acquired by the decedent before  February 1, 1962 , if before that date the donor or prior decedent had acquired the property or his interest therein or had possessed a power of appointment in respect of the property or interest.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The election provided for in this section shall be made by the executor on the return of the tax imposed by this chapter. Such election, once made, shall be irrevocable.\nNo election may be made under this section if such return is filed more than 1 year after the time prescribed by law (including extensions) for filing such return.\n1986—Subsec. (c)(2).  Pub. L. 99–514  amended par. (2) generally. Prior to amendment, par. (2) read as follows: “the amount of the tax imposed by this chapter (reduced by credits allowable against such tax).”\n1984—Subsec. (c).  Pub. L. 98–369, §\u202f1023(a) , added subsec. (c). Former subsec. (c) redesignated (d).\nSubsec. (d).  Pub. L. 98–369, §\u202f1024(a) , substituted “Election” for “Time of election” in heading, designated existing text as par. (1), inserted heading “In general”, substituted “shall be made by the executor on the return of the tax imposed by this chapter” for “shall be exercised by the executor on his return if filed within the time prescribed by law or before the expiration of any extension of time granted pursuant to law for the filing of the return”, inserted sentence providing that an election, once made, is irrevocable, and added par. (2).\nPub. L. 98–369, §\u202f1023(a) , redesignated subsec. (c) as (d).\n1970— Pub. L. 91–614  substituted “6 months” for “1 year” in four places and substituted “6-month” for “1-year”.\nAmendment by  Pub. L. 99–514  applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as an Effective Date note under  section 2601 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1023(b) ,  July 18, 1984 ,  98 Stat. 1030 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after the date of the enactment of this Act [ July 18, 1984 ].”\nPub. L. 98–369, div. A, title X, §\u202f1024(b) ,  July 18, 1984 ,  98 Stat. 1030 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ July 18, 1984 ]. \n \n “(2)   Transitional rule .— In the case of an estate of a decedent dying before the date of the enactment of this Act [ July 18, 1984 ] if— “(A)  a credit or refund of the tax imposed by chapter 11 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] is not prevented on the date of the enactment of this Act by the operation of any law or rule of law, \n \n “(B)  the election under section 2032 of the Internal Revenue Code of 1986 would have met the requirements of such section (as amended by this section and section 1023) had the decedent died after the date of enactment of this Act, and \n \n “(C)  a claim for credit or refund of such tax with respect to such estate is filed not later than the 90th day after the date of the enactment of this Act, \n \n\n then such election shall be treated as a valid election under such section 2032. The statutory period for the assessment of any deficiency which is attributable to an election under this paragraph shall not expire before the close of the 2-year period beginning on the date of the enactment of this Act.”\nPub. L. 91–614, title I, §\u202f101(j) ,  Dec. 31, 1970 ,  84 Stat. 1838 , provided that:  “The amendments made by this section [enacting  section 6905 of this title , amending this section and sections 1223, 2055, 2204, 6040, 6075, 6091, 6161, 6314, 6324, and 6504 of this title, and enacting provisions set out as notes under this section and sections 2204 and 6905 of this title] (other than subsection (f)) [amending sections 2204 and 6905 of this title] shall apply with respect to decedents dying after  December 31, 1970 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The aggregate decrease in the value of qualified real property taken into account for purposes of this chapter which results from the application of paragraph (1) with respect to any decedent shall not exceed $750,000.\nFor purposes of subparagraph (A), an individual shall be disabled if such individual has a mental or physical impairment which renders him unable to materially participate in the operation of the farm or other business.\nFor purposes of subsection (c)(6)(B)(i), if the requirements of paragraph (1)(C)(ii) are met with respect to any decedent by reason of subparagraph (A), the period ending on the date on which the continuous period taken into account under subparagraph (A) began shall be treated as the period immediately before the decedent’s death.\nIf property is qualified real property with respect to a decedent (hereinafter in this paragraph referred to as the “first decedent”) and such property was acquired from or passed from the first decedent to the surviving spouse of the first decedent, for purposes of applying this subsection and subsection (c) in the case of the estate of such surviving spouse, active management of the farm or other business by the surviving spouse shall be treated as material participation by such surviving spouse in the operation of such farm or business.\nFor the purposes of subparagraph (A), the determination of whether property is qualified real property with respect to the first decedent shall be made without regard to subparagraph (D) of paragraph (1) and without regard to whether an election under this section was made.\nIn any case in which to do so will enable the requirements of paragraph (1)(C)(ii) to be met with respect to the surviving spouse, this subsection and subsection (c) shall be applied by taking into account any application of paragraph (4).\nFor purposes of subparagraph (B), the term “adjusted tax difference with respect to the estate” means the excess of what would have been the estate tax liability but for subsection (a) over the estate tax liability. For purposes of this subparagraph, the term “estate tax liability” means the tax imposed by section 2001 reduced by the credits allowable against such tax.\nIn the case of an interest acquired from (or passing from) any decedent, if subparagraph (A) or (B) of paragraph (1) applies to any portion of an interest, subparagraph (B) or (A), as the case may be, of paragraph (1) shall not apply with respect to the same portion of such interest.\nThe additional tax imposed by this subsection shall become due and payable on the day which is 6 months after the date of the disposition or cessation referred to in paragraph (1).\nThe qualified heir shall be personally liable for the additional tax imposed by this subsection with respect to his interest unless the heir has furnished bond which meets the requirements of subsection (e)(11).\nFor purposes of subparagraph (C), an individual shall be treated as a student with respect to periods during any calendar year if (and only if) such individual is a student (within the meaning of section 152(f)(2)) for such calendar year.\nFor purposes of this subsection, a surviving spouse or lineal descendant of the decedent shall not be treated as failing to use qualified real property in a qualified use solely because such spouse or descendant rents such property to a member of the family of such spouse or descendant on a net cash basis. For purposes of the preceding sentence, a legally adopted child of an individual shall be treated as the child of such individual by blood.\nA qualified conservation contribution (as defined in section 170(h)) by gift or otherwise shall not be deemed a disposition under subsection (c)(1)(A).\nThe election under this section shall be made on the return of the tax imposed by section 2001. Such election shall be made in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.\nThe agreement referred to in this paragraph is a written agreement signed by each person in being who has an interest (whether or not in possession) in any property designated in such agreement consenting to the application of subsection (c) with respect to such property.\nThe term “qualified heir” means, with respect to any property, a member of the decedent’s family who acquired such property (or to whom such property passed) from the decedent. If a qualified heir disposes of any interest in qualified real property to any member of his family, such member shall thereafter be treated as the qualified heir with respect to such interest.\nIn the case of real property which meets the requirements of subparagraph (C) of subsection (b)(1), residential buildings and related improvements on such real property occupied on a regular basis by the owner or lessee of such real property or by persons employed by such owner or lessee for the purpose of operating or maintaining such real property, and roads, buildings, and other structures and improvements functionally related to the qualified use shall be treated as real property devoted to the qualified use.\nThe term “farm” includes stock, dairy, poultry, fruit, furbearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards and woodlands.\nMaterial participation shall be determined in a manner similar to the manner used for purposes of paragraph (1) of section 1402(a) (relating to net earnings from self-employment).\nIf there is no comparable land from which the average annual gross cash rental may be determined but there is comparable land from which the average net share rental may be determined, subparagraph (A)(i) shall be applied by substituting “average annual net share rental” for “average annual gross cash rental”.\nIf the decedent and his surviving spouse at any time held qualified real property as community property, the interest of the surviving spouse in such property shall be taken into account under this section to the extent necessary to provide a result under this section with respect to such property which is consistent with the result which would have obtained under this section if such property had not been community property.\nIf the qualified heir makes written application to the Secretary for determination of the maximum amount of the additional tax which may be imposed by subsection (c) with respect to the qualified heir’s interest, the Secretary (as soon as possible, and in any event within 1 year after the making of such application) shall notify the heir of such maximum amount. The qualified heir, on furnishing a bond in such amount and for such period as may be required, shall be discharged from personal liability for any additional tax imposed by subsection (c) and shall be entitled to a receipt or writing showing such discharge.\nThe term “active management” means the making of the management decisions of a business (other than the daily operating decisions).\nIn the case of any qualified woodland with respect to which the executor elects to have this subparagraph apply, trees growing on such woodland shall not be treated as a crop.\nAn election under subparagraph (A) shall be made on the return of the tax imposed by section 2001. Such election shall be made in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.\nIn the case of any qualified replacement property, any period during which there was ownership, qualified use, or material participation with respect to the replaced property by the decedent or any member of his family shall be treated as a period during which there was such ownership, use, or material participation (as the case may be) with respect to the qualified replacement property.\nSubparagraph (A) shall not apply to the extent that the fair market value of the qualified replacement property (as of the date of its acquisition) exceeds the fair market value of the replaced property (as of the date of its disposition).\nThe Secretary shall prescribe regulations setting forth the application of this section and section 6324B in the case of an interest in a partnership, corporation, or trust which, with respect to the decedent, is an interest in a closely held business (within the meaning of paragraph (1) of section 6166(b)). For purposes of the preceding sentence, an interest in a discretionary trust all the beneficiaries of which are qualified heirs shall be treated as a present interest.\nThe term “involuntary conversion” means a compulsory or involuntary conversion within the meaning of section 1033.\nThe rules of the last sentence of section 1033(a)(2)(A) shall apply for purposes of paragraph (3)(B)(ii).\nIf an interest in qualified real property is exchanged solely for an interest in qualified exchange property in a transaction which qualifies under section 1031, no tax shall be imposed by subsection (c) by reason of such exchange.\nFor purposes of this subsection, the term “qualified exchange property” means real property which is to be used for the qualified use set forth in subparagraph (A) or (B) of subsection (b)(2) under which the real property exchanged therefor originally qualified under subsection (a).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nThe Social Security Act, referred to in subsec. (b)(4)(A)(i), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Social Security Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\n2017—Subsec. (a)(3)(B).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n2004—Subsec. (c)(7)(D).  Pub. L. 108–311  substituted “section 152(f)(2)” for “section 151(c)(4)”.\n1997—Subsec. (a)(3).  Pub. L. 105–34, §\u202f501(b) , added par. (3).\nSubsec. (b)(5)(A).  Pub. L. 105–34, §\u202f504(b) , struck out at end “For purposes of subsection (c), such surviving spouse shall not be treated as failing to use such property in a qualified use solely because such spouse rents such property to a member of such spouse’s family on a net cash basis.”\nSubsec. (c)(7)(E).  Pub. L. 105–34, §\u202f504(a) , added subpar. (E).\nSubsec. (c)(8).  Pub. L. 105–34, §\u202f508(c) , added par. (8).\nSubsec. (d)(3).  Pub. L. 105–34, §\u202f1313(a) , amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “The Secretary shall prescribe procedures which provide that in any case in which—\n“(A) the executor makes an election under paragraph (1) within the time prescribed for filing such election, and\n“(B) substantially complies with the regulations prescribed by the Secretary with respect to such election, but—\n“(i) the notice of election, as filed, does not contain all required information, or\n“(ii) signatures of 1 or more persons required to enter into the agreement described in paragraph (2) are not included on the agreement as filed, or the agreement does not contain all required information,\nthe executor will have a reasonable period of time (not exceeding 90 days) after notification of such failures to provide such information or agreements.”\n1990—Subsec. (a)(2).  Pub. L. 101–508  amended par. (2) generally, substituting present provisions for provisions which established graduated increase in applicable limit on aggregate reduction in fair market value from $600,000 in the case of decedents dying in 1981 to $750,000 in the case of decedents dying in 1983 or thereafter.\n1988—Subsec. (b)(5)(A).  Pub. L. 100–647  inserted at end “For purposes of subsection (c), such surviving spouse shall not be treated as failing to use such property in a qualified use solely because such spouse rents such property to a member of such spouse’s family on a net cash basis.”\n1986—Subsec. (c)(7)(D).  Pub. L. 99–514  substituted “section 151(c)(4)” for “section 151(e)(4)”.\n1984—Subsec. (d)(3).  Pub. L. 98–369  added par. (3).\n1983—Subsec. (b)(5)(C).  Pub. L. 97–448, §\u202f104(b)(1) , added subpar. (C).\nSubsec. (i)(1)(B)(ii).  Pub. L. 97–448, §\u202f104(b)(2)(A) , substituted “the qualified exchange property” for “the other property”.\nSubsec. (i)(3).  Pub. L. 97–448, §\u202f104(b)(2)(B) , substituted “subparagraph (A) or (B)” for “subparagraph (A), (B), or (C)”.\n1981—Subsec. (a)(2).  Pub. L. 97–34, §\u202f421(a) , substituted “Limit on aggregate reduction in fair market value” for “Limitation” in heading “shall not exceed the applicable limit set forth in the following table:” for “shall not exceed $500,000” in text, and inserted table.\nSubsec. (b)(1).  Pub. L. 97–34, §\u202f421(b)(1) , substituted “qualified use by the decedent or a member of the decedent’s family” for “qualified use” in provision preceding subpar. (A), and in subpars. (A)(i) and (C)(i).\nSubsec. (b)(4), (5).  Pub. L. 97–34, §\u202f421(b)(2) , added pars. (4) and (5).\nSubsec. (c)(1).  Pub. L. 97–34, §\u202f421(c)(1)(A) , substituted “10 years” for “15 years”.\nSubsec. (c)(2)(E).  Pub. L. 97–34, §\u202f421(h)(2) , added subpar. (E).\nSubsec. (c)(3).  Pub. L. 97–34, §\u202f421(c)(1)(B)(i) , redesignated par. (4) as (3) and struck out former par. (3), which provided for a phaseout of additional tax between the 10th and 15th years.\nSubsec. (c)(4), (5).  Pub. L. 97–34, §\u202f421(c)(1)(B)(i) , redesignated pars. (5) and (6) as (4) and (5), respectively. Former par. (4) redesignated (3).\nSubsec. (c)(6).  Pub. L. 97–34, §\u202f421(c)(2)(B)(ii) , in subpar. (B) substituted “more than 3 years” for “3 years or more”.\nPub. L. 97–34, §\u202f421(c)(1)(B)(i) , redesignated par. (7) as (6). Former par. (6) redesignated (5).\nSubsec. (c)(7).  Pub. L. 97–34, §\u202f421(c)(1)(B)(i) , (2)(A), added par. (7). Former par. (7) redesignated (6).\nSubsec. (d)(1).  Pub. L. 97–34, §\u202f421(j)(3) , substituted “The election under this section shall be made on the return of the tax imposed by section 2001. Such election shall be made in such manner as the Secretary shall by regulations prescribe. Such an election, once made, shall be irrevocable.” for “The election under this section shall be made not later than the time prescribed by section 6075(a) for filing the return of tax imposed by section 2001 (including extensions thereof), and shall be made in such manner as the Secretary shall by regulations prescribe.”\nSubsec. (e)(2).  Pub. L. 97–34, §\u202f421(i) , substituted provisions designated subpars. (A) through (D) for “such individual’s ancestor or lineal descendant, a lineal descendant of a grandparent of such individual, the spouse of such individual, or the spouse of any such descendant”.\nSubsec. (e)(7).  Pub. L. 97–34, §\u202f421(f) , added subpar. (B), redesignated former subpar. (B) as (C), and inserted “and that there is no comparable land from which the average net share rental may be determined” after “determined” in subpar. (C), without specifying whether the language was to be inserted in cl. (i) or (ii) of subpar. (C). In view of H. Rept. No. 97–201, 97th Cong.,  July 14, 1981 , p. 492, the language was inserted in cl. (ii) as the probable intent of Congress.\nSubsec. (e)(9).  Pub. L. 97–34, §\u202f421(j)(2)(A) , struck out from subpar. (B) “in satisfaction of the right of such person to a pecuniary bequest” after “from the estate” and in subpar. (C) substituted “(to the extent such property is includible in the gross estate of the decedent)” for “in satisfaction of a right (which such person has by reason of the death of the decedent) to receive from the trust a specific dollar amount which is the equivalent of a pecuniary bequest”.\nSubsec. (e)(12).  Pub. L. 97–34, §\u202f421(c)(2)(B)(i) , added par. (12).\nSubsec. (e)(13), (14).  Pub. L. 97–34, §\u202f421(h)(1) , (j)(4), added pars. (13) and (14).\nSubsec. (f)(1).  Pub. L. 97–34, §\u202f421(e)(2) , substituted “to which subsection (h)” for “to which an election under subsection (h)”.\nPub. L. 97–34, §\u202f421(d)(2)(A) , substituted “conversion or exchange”, “(h) or (i)”, and “replace or of the exchange of property” for “conversion”, “(h)”, and “replace”.\nSubsec. (g).  Pub. L. 97–34, §\u202f421(j)(1) , inserted provision that for purposes of the preceding sentence, an interest in a discretionary trust all the beneficiaries of which are qualified heirs shall be treated as a present interest.\nSubsec. (h)(1)(A).  Pub. L. 97–34, §\u202f421(e)(1)(A) , struck out “and the qualified heir makes an election under this subsection” after “qualified real property”.\nSubsec. (h)(2)(A).  Pub. L. 97–34, §\u202f421(c)(1)(B)(ii) , substituted “;\u2000except that” for “,\u2000except that” and “the 10-year period” for “the 15-year period”, deleted cl. (i) designation, and struck out cl. (ii), which provided the phaseout period under par. (3) of subsec. (c) be appropriately adjusted to take into account the extension referred to in cl. (i).\nSubsec. (h)(2)(C).  Pub. L. 97–34, §\u202f421(c)(1)(B)(iii) , substituted “(6)” for “(7)” in provisions preceding cl. (i).\nSubsec. (h)(5).  Pub. L. 97–34, §\u202f421(e)(1)(B) , struck out par. (5) which provided for making a subsec. (h) election at such time and in such manner as the Secretary may by regulations prescribe.\nSubsec. (i).  Pub. L. 97–34, §\u202f421(d)(1) , added subsec. (i).\n1978—Subsec. (b)(1).  Pub. L. 95–600, §\u202f702(d)(1) , inserted “which was acquired from or passed from the decedent to a qualified heir of the decedent and” after “located in the United States”.\nSubsec. (c)(6).  Pub. L. 95–600, §\u202f702(d)(5)(A) , inserted “unless the heir has furnished bond which meets the requirements of subsection (e)(11)” after “respect to his interest”.\nSubsec. (e)(9).  Pub. L. 95–600, §\u202f702(d)(2) , added par. (9).\nSubsec. (e)(10).  Pub. L. 95–600, §\u202f702(d)(4) , added par. (10).\nSubsec. (e)(11).  Pub. L. 95–600, §\u202f702(d)(5)(B) , added par. (11).\nSubsec. (f)(1).  Pub. L. 95–472, §\u202f4(c) , inserted provision relating to the expiration of the statutory period for the assessment of additional tax due under subsec. (c) in the case of an involuntary conversion to which an election under subsec. (h) is applicable.\nSubsec. (h).  Pub. L. 95–472, §\u202f4(a) , added subsec. (h).\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 108–311  applicable to taxable years beginning after  Dec. 31, 2004 , see  section 208 of Pub. L. 108–311 , set out as a note under  section 2 of this title .\nAmendment by  section 501(b) of Pub. L. 105–34  applicable to estates of decedents dying, and gifts made, after  Dec. 31, 1997 , see  section 501(f) of Pub. L. 105–34 , set out as a note under  section 2001 of this title .\nPub. L. 105–34, title V, §\u202f504(c) ,  Aug. 5, 1997 ,  111 Stat. 854 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to leases entered into after  December 31, 1976 .”\nAmendment by  section 508(c) of Pub. L. 105–34  applicable to easements granted after  Dec. 31, 1997 , see  section 508(e)(2) of Pub. L. 105–34 , set out as a note under  section 170 of this title .\nPub. L. 105–34, title XIII, §\u202f1313(b) ,  Aug. 5, 1997 ,  111 Stat. 1045 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 100–647, title VI, §\u202f6151(b) ,  Nov. 10, 1988 ,  102 Stat. 3724 , provided that: \n “(1)   In general .— The amendment made by subsection (a) [amending this section] shall apply with respect to rentals occurring after  December 31, 1976 . \n \n “(2)   Waiver of statute of limitations .— If on the date of the enactment of this Act [ Nov. 10, 1988 ] (or at any time within 1 year after such date of enactment) refund or credit of any overpayment of tax resulting from the application of the amendment made by subsection (a) is barred by any law or rule of law, refund or credit of such overpayment shall, nevertheless, be made or allowed if claim therefore is filed before the date 1 year after the date of the enactment of this Act.”\nAmendment by  Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1986 , see  section 151(a) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1025(b) ,  July 18, 1984 ,  98 Stat. 1031 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— The amendment made by this section [amending this section] shall apply to estates of decedents dying after  December 31, 1976 . \n \n “(2)   Refund or credit of overpayment barred by statute of limitations .— Notwithstanding section 6511(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] or any other period of limitation or lapse of time, a claim for credit or refund of overpayment of the tax imposed by such Code which arises by reason of this section may be filed by any person at any time within the 1-year period beginning on the date of the enactment of this Act [ July 18, 1984 ]. Sections 6511(b) and 6514 of such Code shall not apply to any claim for credit or refund filed under this subsection within such 1-year period.”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title IV, §\u202f421(k) ,  Aug. 13, 1981 ,  95 Stat. 313 , as amended by  Pub. L. 97–448, title I, §\u202f104(b)(4) ,  Jan. 12, 1983 ,  96 Stat. 2382 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 1016, 1040, and 6324B of this title] shall apply with respect to the estates of decedents dying after  December 31, 1981 . \n \n “(2)   Increase in limitation .— The amendment made by subsection (a) [amending this section] shall apply with respect to the estates of decedents dying after  December 31, 1980 . \n \n “(3)   Subsection  (d).— The amendments made by subsection (d) [amending this section and  section 6324B of this title ] shall apply with respect to exchanges after  December 31, 1981 . \n \n “(4)   Subsection  (e).— The amendments made by subsection (e) [amending this section] shall apply with respect to involuntary conversions after  December 31, 1981 . \n \n “(5)   Certain amendments made retroactive to 1976.— “(A)   In general .— The amendments made by subsections (b)(1), (j)(1), and (j)(2) [amending this section and  section 1040 of this title ] and the provisions of subparagraph (A) of section 2032A(c)(7) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (c)(2)) shall apply with respect to the estates of decedents dying after  December 31, 1976 . \n \n “(B)   Timely election required .— Subparagraph (A) shall only apply in the case of an estate if a timely election under section 2032A was made with respect to such estate. If the estate of any decedent would not qualify under section 2032A of the Internal Revenue Code of 1986 but for the amendments described in subparagraph (A) and the time for making an election under section 2032A with respect to such estate would (but for this sentence) expire after  July 28, 1980 , the time for making such election shall not expire before the close of  February 16, 1982 . \n \n “(C)   Reinstatement of elections .— If any election under section 2032A was revoked before the date of the enactment of this Act [ Aug. 13, 1981 ], such election may be reinstated at any time before  February 17, 1982 . \n \n “(D)   Statute of limitations .— If on the date of the enactment of this Act [ Aug. 13, 1981 ] (or at any time before  February 17, 1982 ) the making of a credit or refund of any overpayment of tax resulting from the amendments described in subparagraph (A) is barred by any law or rule of law, such credit or refund shall nevertheless be made if claim therefor is made before  February 17, 1982 .”\nPub. L. 95–600, title VII, §\u202f702(d)(6) ,  Nov. 6, 1978 ,  92 Stat. 2929 , provided that:  “The amendments made by this subsection [amending this section and  section 1040 of this title ] shall apply to the estates of decedents dying after  December 31, 1976 .”\nAmendment of section by  Pub. L. 95–472  applicable with respect to involuntary conversions after  Dec. 31, 1976 , see  section 4(d) of Pub. L. 95–472 , set out as a note under  section 1016 of this title .\nPub. L. 94–455, title XX, §\u202f2003(e) ,  Oct. 4, 1976 ,  90 Stat. 1862 , provided that:  “The amendments made by this section [enacting this section and  section 6324B of this title  and amending  section 2013 of this title ] shall apply to the estates of decedents dying after  December 31, 1976 .”\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .\nPub. L. 107–16, title V, §\u202f581 ,  June 7, 2001 ,  115 Stat. 93 , provided that:  “If on the date of the enactment of this Act [ June 7, 2001 ] (or at any time within 1 year after the date of the enactment) a refund or credit of any overpayment of tax resulting from the application of section 2032A(c)(7)(E) of the Internal Revenue Code of 1986 is barred by any law or rule of law, the refund or credit of such overpayment shall, nevertheless, be made or allowed if claim therefor is filed before the date 1 year after the date of the enactment of this Act.”\nPub. L. 99–514, title XIV, §\u202f1421 ,  Oct. 22, 1986 ,  100 Stat. 2716 , as amended by  Pub. L. 100–647, title I, §\u202f1014(f) ,  Nov. 10, 1988 ,  102 Stat. 3562 , provided that: \n “(a)   In General .— In the case of any decedent dying before  January 1, 1986 , if the executor— “(1)  made an election under section 2032A of the Internal Revenue Code of 1954 [now 1986] on the return of tax imposed by section 2001 of such Code, and \n \n “(2)  provided substantially all the information with respect to such election required on such return of tax, \n \n\n such election shall be a valid election for purposes of section 2032A of such Code. \n \n “(b)   Executor Must Provide Information .— An election described in subsection (a) shall not be valid if the Secretary of the Treasury or his delegate after the date of the enactment of this Act [ Oct. 22, 1986 ] requests information from the executor with respect to such election and the executor does not provide such information within 90 days of receipt of such request. \n \n “(c)   Effective Date .— The provisions of this section shall not apply to the estate of any decedent if before the date of the enactment of this Act [ Oct. 22, 1986 ] the statute of limitations has expired with respect to— “(1)  the return of tax imposed by section 2001 of the Internal Revenue Code of 1954 [now 1986], and \n \n “(2)  the period during which a claim for credit or refund may be timely filed. \n \n \n “(d)   Special Rule for Certain Estate .— Notwithstanding subsection (a)(2), the provisions of this section shall apply to the estate of an individual who died on  January 30, 1984 , and with respect to which— “(1)  a Federal estate tax return was filed on  October 30, 1984 , electing current use valuation, and \n \n “(2)  the agreement required under section 2032A was filed on  November 9, 1984 .”\nLand diverted from production of agricultural commodities under a 1983 payment-in-kind program to be treated, for purposes of this section, as used during the 1983 crop year by qualified taxpayers in the active conduct of the trade or business of farming, with qualified taxpayers who materially participate in the diversion and devotion to conservation uses under a 1983 payment-in-kind program to be treated as materially participating in the operation of such land during the 1983 crop year, see  section 3 of Pub. L. 98–4 , set out as a note under  section 61 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The value of the gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death.\n1962— Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The value of the gross estate shall include the value of all property to the extent of any interest therein of the surviving spouse, existing at the time of the decedent’s death as dower or curtesy, or by virtue of a statute creating an estate in lieu of dower or curtesy.\n1962— Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The amount of the gross estate (determined without regard to this subsection) shall be increased by the amount of any tax paid under chapter 12 by the decedent or his estate on any gift made by the decedent or his spouse during the 3-year period ending on the date of the decedent’s death.\nAn estate shall be treated as meeting the 35 percent of adjusted gross estate requirement of section 6166(a)(1) only if the estate meets such requirement both with and without the application of subsection (a).\nParagraph (1) shall not apply to any transfer (other than a transfer with respect to a life insurance policy) made during a calendar year to any donee if the decedent was not required by section 6019 (other than by reason of section 6019(2)) to file any gift tax return for such year with respect to transfers to such donee.\nSubsection (a) and paragraph (1) of subsection (c) shall not apply to any bona fide sale for an adequate and full consideration in money or money’s worth.\nFor purposes of this section and section 2038, any transfer from any portion of a trust during any period that such portion was treated under section 676 as owned by the decedent by reason of a power in the grantor (determined without regard to section 672(e)) shall be treated as a transfer made directly by the decedent.\n2000—Subsec. (c)(2).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f319(14)(A)] , substituted “subsection (a)” for “paragraph (1)”.\nSubsec. (d).  Pub. L. 106–554, §\u202f1(a)(7) [title III, §\u202f319(14)(B)] , inserted “and paragraph (1) of subsection (c)” after “Subsection (a)”.\n1997— Pub. L. 105–34  amended section catchline and text generally. Prior to amendment, section consisted of subsecs. (a) to (d) relating to adjustments for gifts made within 3 years of decedent’s death.\n1983—Subsec. (b)(2).  Pub. L. 97–448, §\u202f104(a)(9) , substituted “section 6019(2)” for “section 6019(a)(2)”.\nSubsec. (d)(2).  Pub. L. 97–448, §\u202f104(d)(2) , inserted “of this subsection and paragraph (2) of subsection (b)” after “Paragraph (1)”, and struck out “2041,” after “2038,”.\nSubsec. (d)(3)(C), (D).  Pub. L. 97–448, §\u202f104(d)(1)(C) , redesignated subpar. (D) as (C). Former subpar. (C), which referred to section 6166 (relating to extension of time for payment of estate tax where estate consists largely of interest in closely held business), was struck out.\nSubsec. (d)(4).  Pub. L. 97–448, §\u202f104(d)(1)(A) , added par. (4).\n1981—Subsec. (b)(2).  Pub. L. 97–34, §\u202f403(b)(3)(B) , inserted “(other than by reason of section 6019(a)(2))” after “section 6019”.\nSubsec. (d).  Pub. L. 97–34, §\u202f424(a) , added subsec. (d).\n1978—Subsec. (b).  Pub. L. 95–600  substituted in par. (2) provisions relating to gifts for which donee was not required by section 6019 to file gift tax returns for provisions relating to gifts excludable in computing taxable gifts by reason of section 2503(b) and inserted provisions following par. (2) relating to inapplicability of par. (2) to transfers respecting life insurance policies.\n1976— Pub. L. 94–455  substituted provisions covering adjustments for gifts made within 3 years of decedent’s death for provisions under which transfers by the decedent within 3 years of the decedent’s death were deemed to have been made in contemplation of death and included in the value of the gross estate.\n1962—Subsec. (a).  Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\nPub. L. 105–34, title XIII, §\u202f1310(c) ,  Aug. 5, 1997 ,  111 Stat. 1044 , provided that:  “The amendments made by this section [amending this section] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  section 403(b)(3)(B) of Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 403(e) of Pub. L. 97–34 , set out as a note under  section 2056 of this title .\nPub. L. 97–34, title IV, §\u202f424(b) ,  Aug. 13, 1981 ,  95 Stat. 317 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to the estates of decedents dying after  December 31, 1981 .”\nPub. L. 95–600, title VII, §\u202f702(f)(2) ,  Nov. 6, 1978 ,  92 Stat. 2930 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to the estates of decedents dying after  December 31, 1976 , except that it shall not apply to transfers made before  January 1, 1977 .”\nAmendment by  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , but not to transfers made before  Jan. 1, 1977 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .\nPub. L. 96–222, title I, §\u202f107(a)(2)(F) ,  Apr. 1, 1980 ,  94 Stat. 223 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(i)  If the executor elects the benefits of this subparagraph with respect to any estate, section 2035(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to adjustments for gifts made within 3 years of decedent’s death) shall be applied with respect to transfers made by the decedent during 1977 as if paragraph (2) of such section 2035(b) read as follows: “\u202f‘(2) to any gift to a donee made during 1977 to the extent of the amount of such gift which was excludable in computing taxable gifts by reason of section 2503(b) (relating to $3,000 annual exclusion for purposes of the gift tax) determined without regard to section 2513(a).’ \n \n \n “(ii)  The election under clause (i) with respect to any estate shall be made on or before the later of— “(I)  the due date for filing the estate tax return, or \n \n “(II)  the day which is 120 days after the date of the enactment of this Act [ Apr. 1, 1980 ].”\n“\u202f‘(2) to any gift to a donee made during 1977 to the extent of the amount of such gift which was excludable in computing taxable gifts by reason of section 2503(b) (relating to $3,000 annual exclusion for purposes of the gift tax) determined without regard to section 2513(a).’'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'For purposes of subsection (a)(1), the retention of the right to vote (directly or indirectly) shares of stock of a controlled corporation shall be considered to be a retention of the enjoyment of transferred property.\nFor purposes of paragraph (1), a corporation shall be treated as a controlled corporation if, at any time after the transfer of the property and during the 3-year period ending on the date of the decedent’s death, the decedent owned (with the application of section 318), or had the right (either alone or in conjunction with any person) to vote, stock possessing at least 20 percent of the total combined voting power of all classes of stock.\nFor purposes of applying section 2035 with respect to paragraph (1), the relinquishment or cessation of voting rights shall be treated as a transfer of property made by the decedent.\nThis section shall not apply to a transfer made before  March 4, 1931 ; nor to a transfer made after  March 3, 1931 , and before  June 7, 1932 , unless the property transferred would have been includible in the decedent’s gross estate by reason of the amendatory language of the joint resolution of  March 3, 1931  ( 46 Stat. 1516 ).\n1990—Subsecs. (c), (d).  Pub. L. 101–508  redesignated subsec. (d) as (c) and struck out former subsec. (c) which enunciated a rule that retention of retained interest would be considered to be a retention of enjoyment of transferred property if a person held a substantial interest in an enterprise, and such person in effect transferred after  Dec. 17, 1987 , property having a disproportionately large share of the potential appreciation in such person’s interest in the enterprise while retaining an interest in the income of, or rights in, the enterprise.\n1988—Subsec. (c)(1)(B).  Pub. L. 100–647, §\u202f3031(e) , substituted “an interest” for “a disproportionately large share” after “whole retaining”.\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f3031(g)(1) , substituted “consideration furnished by” for “sales to” in heading, and amended text generally. Prior to amendment, text read as follows: “The exception contained in subsection (a) for a bona fide sale shall not apply to a transfer described in paragraph (1) if such transfer is to a member of the transferor’s family.”\nSubsec. (c)(3)(C).  Pub. L. 100–647, §\u202f3031(d) , substituted “Except as provided in regulations, an” for “An”.\nSubsec. (c)(4).  Pub. L. 100–647, §\u202f3031(a)(1) , amended par. (4) generally, substituting provisions relating to treatment of certain transfers for provisions relating to coordination with section 2035.\nSubsec. (c)(5).  Pub. L. 100–647, §\u202f3031(g)(2) , amended par. (5) generally, substituting provisions relating to the making of appropriate adjustments in amounts included in gross estate for provisions relating to coordination with section 2043.\nSubsec. (c)(6).  Pub. L. 100–647, §\u202f3031(b) , added par. (6).\nSubsec. (c)(7), (8).  Pub. L. 100–647, §\u202f3031(b)[(c)] , added pars. (7) and (8).\n1987—Subsecs. (c), (d).  Pub. L. 100–203  added subsec. (c) and redesignated former subsec. (c) as (d).\n1978—Subsec. (a).  Pub. L. 95–600, §\u202f702(i)(2) , struck out provision following par. (2) relating to the retention of voting rights in retained stock.\nSubsecs. (b), (c).  Pub. L. 95–600, §\u202f702(i)(1) , added subsec. (b) and redesignated former subsec. (b) as (c).\n1976—Subsec. (a).  Pub. L. 94–455  provided that, for purposes of par. (1), the retention of voting rights in retained stock be considered to be a retention of the enjoyment of that stock.\n1962—Subsec. (a).  Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\nPub. L. 101–508, title XI, §\u202f11601(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–491 , provided that:  “The amendments made by this section [amending this section and sections 2207B and 2501 of this title] shall apply in the case of property transferred after  December 17, 1987 .”\nPub. L. 100–647, title III, §\u202f3031(h) ,  Nov. 10, 1988 ,  102 Stat. 3639 , provided that: \n “(1)   In general .— Except as provided in this subsection, any amendment made by this section [enacting  section 2207B of this title  and amending this section and  section 2501 of this title ] shall take effect as if included in the provisions of the Revenue Act of 1987 [ Pub. L. 100–203, title X ] to which such amendment relates. \n \n “(2)   Subsection  (a).— The amendments made by subsection (a) [amending this section and  section 2501 of this title ] shall apply in cases where the transfer referred to in section 2036(c)(1)(B) of the 1986 Code is on or after  June 21, 1988 . \n \n “(3)   Subsection  (f).— If an amount is included in the gross estate of a decedent under section 2036 of the 1986 Code other than solely by reason of section 2036(c) of the 1986 Code, the amendments made by subsection (f) [enacting  section 2207B of this title ] shall apply to such amount only with respect to property transferred after the date of the enactment of this Act [ Nov. 10, 1988 ]. \n \n “(4)   Correction period .— If section 2036(c)(1) of the 1986 Code would (but for this paragraph) apply to any interest arising from a transaction entered into during the period beginning after  December 17, 1987 , and ending before  January 1, 1990 , such section shall not apply to such interest if— “(A)  during such period, such actions are taken as are necessary to have such section 2036(c)(1) not apply to such transaction (and any such interest), or \n \n “(B)  the original transferor and his spouse on  January 1, 1990  (or, if earlier, the date of the original transferor’s death), does not hold any interest in the enterprise involved. \n \n \n “(5)   Clarification of effective date .— For purposes of section 10402(b) of the Revenue Act of 1987 [ Pub. L. 100–203 , set out as an Effective Date of 1987 Amendment note below], with respect to property transferred on or before  December 17, 1987 — “(A)  any failure to exercise a right of conversion, \n \n “(B)  any failure to pay dividends, and “(c)  [sic] failures to exercise other rights specified in regulations, \n \n \n\n shall not be treated as a subsequent transfer.”\nPub. L. 100–203, title X, §\u202f10402(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–432 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after  December 31, 1987 , but only in the case of property transferred after  December 17, 1987 .” \n [For clarification of this note, see  section 3031(h)(5) of Pub. L. 100–647 , set out as an Effective Date of 1988 Amendment note above.]\nPub. L. 95–600, title VII, §\u202f702(i)(3) ,  Nov. 6, 1978 ,  92 Stat. 2931 , provided that:  “The amendments made by this subsection [amending this section] shall apply to transfers made after  June 22, 1976 .”\nPub. L. 94–455, title XX, §\u202f2009(e)(1) ,  Oct. 4, 1976 ,  90 Stat. 1896 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transfers made after  June 22, 1976 .”\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': '1976—Subsec. (b).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1962—Subsec. (a).  Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'To the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power (in whatever capacity exercisable) by the decedent alone or by the decedent in conjunction with any other person (without regard to when or from what source the decedent acquired such power), to alter, amend, revoke, or terminate, or where any such power is relinquished during the 3 year period ending on the date of the decedent’s death.\nTo the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power, either by the decedent alone or in conjunction with any person, to alter, amend, or revoke, or where the decedent relinquished any such power during the 3 year period ending on the date of the decedent’s death. Except in the case of transfers made after  June 22, 1936 , no interest of the decedent of which he has made a transfer shall be included in the gross estate under paragraph (1) unless it is includible under this paragraph.\nFor purposes of this section, the power to alter, amend, revoke, or terminate shall be considered to exist on the date of the decedent’s death even though the exercise of the power is subject to a precedent giving of notice or even though the alteration, amendment, revocation, or termination takes effect only on the expiration of a stated period after the exercise of the power, whether or not on or before the date of the decedent’s death notice has been given or the power has been exercised. In such cases proper adjustment shall be made representing the interests which would have been excluded from the power if the decedent had lived, and for such purpose, if the notice has not been given or the power has not been exercised on or before the date of his death, such notice shall be considered to have been given, or the power exercised, on the date of his death.\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f2001(c)(1)(K)(i) , substituted “during the 3-year period ending on the date of the decedent’s death” for “in contemplation of decedent’s death”.\nSubsec. (a)(2).  Pub. L. 94–455, §\u202f2001(c)(1)(K)(ii) , substituted “during the 3-year period ending on the date of the decedent’s death” for “in contemplation of his death”.\nSubsec. (c).  Pub. L. 94–455, §\u202f1902(a)(3) , struck out subsec. (c) which covered the effect of a disability in certain cases by relating a mental disability to relinquish a power to a power, the relinquishment of which would be deemed not to be a transfer for purposes of chapter 4 of the Internal Revenue Code of 1939.\n1962—Subsec. (a).  Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\n1959—Subsec. (c).  Pub. L. 86–141  added subsec. (c).\nAmendment by  section 1902(a)(3) of Pub. L. 94–455  applicable to estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nAmendment by section 2001(c)(1)(K)(i), (ii) of  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976  but not to transfers made before  Jan. 1, 1977 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .\nPub. L. 86–141, §\u202f2 ,  Aug. 7, 1959 ,  73 Stat. 289 , provided that:  “The amendment made by the first section of this Act [amending this section] shall apply only with respect to estates of decedents dying after  August 16, 1954 . No interest shall be allowed or paid on any overpayment resulting from the application of the amendment made by the first section of this Act with respect to any payment made before the date of the enactment of this Act [ Aug. 7, 1959 ].”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The gross estate shall include the value of an annuity or other payment receivable by any beneficiary by reason of surviving the decedent under any form of contract or agreement entered into after  March 3, 1931  (other than as insurance under policies on the life of the decedent), if, under such contract or agreement, an annuity or other payment was payable to the decedent, or the decedent possessed the right to receive such annuity or payment, either alone or in conjunction with another for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death.\nSubsection (a) shall apply to only such part of the value of the annuity or other payment receivable under such contract or agreement as is proportionate to that part of the purchase price therefor contributed by the decedent. For purposes of this section, any contribution by the decedent’s employer or former employer to the purchase price of such contract or agreement (whether or not to an employee’s trust or fund forming part of a pension, annuity, retirement, bonus or profit sharing plan) shall be considered to be contributed by the decedent if made by reason of his employment.\n1986—Subsec. (c).  Pub. L. 99–514, §\u202f1852(e)(1) , struck out subsec. (c) which provided an exclusion from gross estate of certain annuity interests created by community property laws.\nSubsec. (e).  Pub. L. 99–514, §\u202f1848(d) , struck out “or a bond described in paragraph (3)” after “an annuity described in paragraph (2)” in concluding provisions as such provisions were applicable to obligations issued after  Dec. 31, 1983 , and prior to repeal of subsec. (e) by  Pub. L. 98–369, §\u202f525(a) , see Effective Date of 1984 Amendment note below.\n1984—Subsec. (c).  Pub. L. 98–369, §\u202f525(a) , substituted provisions relating to exception of certain annuity interests created by community property laws for provisions which related to exemption of annuities under certain trusts and plans.\nSubsec. (d).  Pub. L. 98–369, §\u202f525(a) , struck out subsec. (d) which related to exemption of certain annuity interests created by community property laws. See subsec. (c) of this section.\nSubsec. (e).  Pub. L. 98–369, §\u202f525(a) , struck out subsec. (e) which related to exclusion of individual retirement accounts.\nPub. L. 98–369, §\u202f491(d)(34) , inserted “or” at end of par. (1), substituted a period for “,\u2000or” at end of par. (2), struck out par. (3) which excluded from the value of the gross estate the value of an annuity receivable by any beneficiary, other than the executor, under a retirement bond described in section 409(a), and substituted in provision following par. (2) “or 408(d)(3)” for “405(d)(3), 408(d)(3), or 409(b)(3)(C)”, and substituted “or annuity” for “,\u2000annuity, or bond” wherever appearing.\nSubsecs. (f), (g).  Pub. L. 98–369, §\u202f525(a) , struck out subsec. (f) which related to lump sum distributions and an exception where the recipient elects not to take 10-year averaging, and subsec. (g) which related to a $100,000 limitation on the exclusions under subsecs. (c) and (e).\n1983—Subsec. (f)(1).  Pub. L. 97–448, §\u202f103(c)(9)(A) , designated existing provisions as subpar. (A), substituted “without regard to the third sentence of section 402(e)(4)(A))” for “without regard to the next to the last sentence of section 402(e)(4)(A)” in subpar. (A) as so designated, and added subpar. (B).\nSubsec. (f)(2).  Pub. L. 97–448, §\u202f103(c)(9)(B) , substituted “An amount described” for “A lump sum distribution described”.\n1982—Subsec. (c).  Pub. L. 97–248, §\u202f245(b) , substituted “Subject to the limitation of subsection (g), notwithstanding any other provision of this section” for “Notwithstanding the provisions of this section”.\nSubsec. (e).  Pub. L. 97–248, §\u202f245(b) , substituted “Subject to the limitation of subsection (g), notwithstanding any other provision of this section” for “Notwithstanding the provisions of this section”.\nSubsec. (g).  Pub. L. 97–248, §\u202f245(a) , added subsec. (g).\n1981—Subsec. (c).  Pub. L. 97–34, §\u202f311(d)(1) , provided that for purposes of subsec. (c), any deductible employee contributions, within the meaning of par. (5) of section 72( o ), shall be considered as made by a person other than the decedent.\nSubsec. (e).  Pub. L. 97–34, §\u202f313(b)(3) , inserted reference to rollover contribution described in section 405(d)(3).\nPub. L. 97–34, §\u202f311(h)(4) , substituted “section 219” for “section 219 or 220”.\n1980—Subsec. (f)(2).  Pub. L. 96–222  substituted “(without the application of paragraph (2) thereof), except to the extent that section 402(e)(4)(J) applies to such distribution” for “without the application of paragraph (2) thereof”.\n1978—Subsec. (c).  Pub. L. 95–600, §\u202f142(a) , substituted “(other than an amount described in subsection (f))” for “(other than a lump sum distribution described in section 402(e)(4), determined without regard to the next to the last sentence of section 402(e)(4)(A))” in provisions preceding par. (1).\nSubsec. (e).  Pub. L. 95–600 , §§\u202f156(c)(4), 702(j)(1), inserted “section 403(b)(8) (but only to the extent such contribution is attributed to a distribution from a contract described in subsection (c)(3)),” after “403(a)(4)” and inserted “or 220” after “section 219” wherever appearing in provisions following par. (3).\nSubsec. (f).  Pub. L. 95–600, §\u202f142(b) , added subsec. (f).\n1976—Subsec. (c).  Pub. L. 94–455, §\u202f2009(c)(2) , (3), substituted “other payment (other than a lump sum distribution described in section 402(e)(4), determined without regard to the next to the last sentence of section 402(e)(4)(A)) receivable by any beneficiary” for “other payment receivable by any beneficiary” in provisions preceding par. (1) and substituted “For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall, to the extent allowable as a deduction under section 404, be considered to be made by a person other than the decedent and, to the extent not so allowable, shall be considered to be made by the decedent” for “For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall be considered to be contributions or payments made by the decedent” in provisions following par. (4).\nSubsec. (e).  Pub. L. 94–455, §\u202f2009(c)(1) , added subsec. (e).\n1974—Subsec. (c).  Pub. L. 93–406  inserted reference to section 1452(d) in provisions following par. (4).\n1972—Subsec. (d).  Pub. L. 92–580  added subsec. (d).\n1969—Subsec. (c)(3).  Pub. L. 91–172  substituted “section 170(b)(1)(A)(ii) or (vi), or which is a religious organization (other than a trust),” for “section 503(b) (1), (2), or (3),”.\n1966—Subsec. (c).  Pub. L. 89–365  added par. (4), inserted reference to chapter 73 of title 10 of the United States Code in the enumeration of the plans and contracts set out in the prohibition against allowance of exclusion for that part of the value of the amount payable under the plan or contract in the proportion that the total payments or contributions made by the decedent bear to the total payments or contributions made, and provided that, for purposes of this section, amounts payable under chapter 73 of title 10 are attributable to payments or contributions made by the decedent only to the extent of amounts deposited by him pursuant to  section 1438 of title 10 .\n1962—Subsec. (c).  Pub. L. 87–792  substituted “was a plan described in section 403(a)” for “met the requirements of section 401(a)(3), (4), (5), and (6)” in par. (2), and inserted sentence providing, for purposes of this subsection, that contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c)(1) made under a trust or plan described in paragraph (1) or (2) shall be considered to be contributions or payments made by the decedent.\n1958—Subsec. (c)(2).  Pub. L. 85–866, §\u202f67(a) , inserted “(4), (5), and (6)” after “section 401(a)(3)”.\nSubsec. (c)(3) and closing sentences.  Pub. L. 85–866, §\u202f23(e) , added par. (3), inserted “or under contract described in paragraph (3)” in second sentence of subsec. (c) and substituted “paragraph (1) or (2) shall not be considered to be contributed by the decedent, and contributions or payments made by the decedent’s employer or former employer toward the purchase of an annuity contract described in paragraph (3) shall, to the extent excludable from gross income under section 403(b),” for “this subsection shall” in third sentence of subsec. (c).\nPub. L. 99–514, title XVIII, §\u202f1852(e)(1)(B) ,  Oct. 22, 1986 ,  100 Stat. 2868 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ Oct. 22, 1986 ].”\nAmendment by  section 1848(d) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nAmendment by  section 491(d)(34) of Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nPub. L. 98–369, div. A, title V, §\u202f525(b)(1) , (2), (4),  July 18, 1984 ,  98 Stat. 874 , as amended by  Pub. L. 99–514, title XVIII, §\u202f1852(e)(3) ,  Oct. 22, 1986 ,  100 Stat. 2868 , provided that: \n “(1)   In general .— The amendments made by this section [amending this section] shall apply to the estates of decedents dying after  December 31, 1984 . \n \n “(2)   Exception for participants in pay status .— The amendments made by this section shall not apply to the estate of any decedent who— “(A)  was a participant in any plan who was in pay status on  December 31, 1984 , and \n \n “(B)  irrevocably elected the form of the benefit before the date of the enactment of this Act [ July 18, 1984 ]. \n \n \n “(4)   Irrevocable election .— For purposes of paragraph (2) [set out above] and section 245(c) of the Tax Equity and Fiscal Responsibility Act of 1982 [see Effective Date of 1982 Amendment note below], an individual who— “(A)  separated from service before  January 1, 1985 , with respect to paragraph (2), or  January 1, 1983 , with respect to section 245(c) of the Tax Equity and Fiscal Responsibility Act of 1982, and \n \n “(B)  meets the requirements of such paragraph or such section other than the requirement that there be an irrevocable election, and that the individual be in pay status, \n \n\n shall be treated as having made an irrevocable election and as being in pay status within the time prescribed with respect to a form of benefit if such individual does not change such form of benefit before death.”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–248, title II, §\u202f245(c) ,  Sept. 3, 1982 ,  96 Stat. 525 , as amended by  Pub. L. 98–369, div. A, title V, §\u202f525(b)(3) ,  July 18, 1984 ,  98 Stat. 874 , provided that:  “The amendments made by this section [amending this section] shall apply to the estates of decedents dying after  December 31, 1982 , except that such amendments shall not apply to the estate of any decedent who was a participant in any plan who was in pay status on  December 31, 1982 , and irrevocably elected before  January 1, 1983 , the form of benefit.”\nAmendment by section 311(d)(1), (h)(4) of  Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 311(i)(1) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nAmendment by  section 313(b)(3) of Pub. L. 97–34  applicable to redemptions after  Aug. 13, 1981 , in taxable years ending after such date, see  section 313(c) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nAmendment by  Pub. L. 96–222  applicable with respect to the estates of decedents dying after  Apr. 1, 1980 , see  section 101(b)(1)(D) of Pub. L. 96–222 , set out as a note under  section 691 of this title .\nPub. L. 95–600, title I, §\u202f142(c) ,  Nov. 6, 1978 ,  92 Stat. 2796 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to the estates of decedents dying after  December 31, 1978 .”\nAmendment by  section 156(c)(4) of Pub. L. 95–600  applicable to distributions or transfers made after  Dec. 31, 1977 , in taxable years beginning after such date, see  section 156(d) of Pub. L. 95–600 , set out as a note under  section 403 of this title .\nPub. L. 95–600, title VII, §\u202f702(j)(3)(A) ,  Nov. 6, 1978 ,  92 Stat. 2932 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to the estates of decedents dying after  December 31, 1976 .”\nPub. L. 94–455, title XX, §\u202f2009(e)(3)(A) ,  Oct. 4, 1976 ,  90 Stat. 1896 , provided that:  “The amendments made by paragraphs (1), (2), and (3) of subsection (c) [amending this section] shall apply to the estates of decedents dying after  December 31, 1976 .”\nAmendment by  Pub. L. 93–406  applicable to taxable years ending on or after  Sept. 21, 1972 , with respect to individuals dying on or after  Sept. 21, 1972 , see  section 2007(c) of Pub. L. 93–406 , set out as a note under  section 122 of this title .\nPub. L. 92–580, §\u202f2(b) ,  Oct. 27, 1972 ,  86 Stat. 1276 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to estate of decedents for which the period prescribed by the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for filing of a claim for credit or refund of an overpayment of estate tax ends on or after the date of enactment of this Act [ Oct. 27, 1972 ]. No interest shall be allowed or paid on any overpayment of estate tax resulting from the application of the amendment made by subsection (a) for any period prior to the expiration of the one hundred and eightieth day following the date of the enactment of this Act.”\nAmendment by  Pub. L. 91–172  effective  Jan. 1, 1970 , see  section 101(k)(1) of Pub. L. 91–172 , set out as an Effective Date note under  section 4940 of this title .\nPub. L. 89–365, §\u202f2(c) ,  Mar. 8, 1966 ,  80 Stat. 33 , provided that:  “The amendments made by subsection (a) [amending this section] shall apply with respect to decedents dying after  December 31, 1965 . The amendments made by subsection (b) [amending  section 2517 of this title ] shall apply with respect to calendar years after 1965.”\nAmendment by  Pub. L. 87–792  applicable to taxable years beginning after  Dec. 31, 1962 , see  section 8 of Pub. L. 87–792 , set out as a note under  section 22 of this title .\nAmendment by  section 23(e) of Pub. L. 85–866  applicable with respect to estates of decedents dying after  Dec. 31, 1957 , see  section 23(g) of Pub. L. 85–866 , set out as a note under  section 403 of this title .\nPub. L. 85–866, title I, §\u202f67(b) ,  Sept. 2, 1958 ,  72 Stat. 1659 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after  December 31, 1953 .”\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The value of the gross estate shall include the value of all property to the extent of the interest therein held as joint tenants with right of survivorship by the decedent and any other person, or as tenants by the entirety by the decedent and spouse, or deposited, with any person carrying on the banking business, in their joint names and payable to either or the survivor, except such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than an adequate and full consideration in money or money’s worth:  Provided , That where such property or any part thereof, or part of the consideration with which such property was acquired, is shown to have been at any time acquired by such other person from the decedent for less than an adequate and full consideration in money or money’s worth, there shall be excepted only such part of the value of such property as is proportionate to the consideration furnished by such other person:  Provided further , That where any property has been acquired by gift, bequest, devise, or inheritance, as a tenancy by the entirety by the decedent and spouse, then to the extent of one-half of the value thereof, or, where so acquired by the decedent and any other person as joint tenants with right of survivorship and their interests are not otherwise specified or fixed by law, then to the extent of the value of a fractional part to be determined by dividing the value of the property by the number of joint tenants with right of survivorship.\nNotwithstanding subsection (a), in the case of any qualified joint interest, the value included in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f403(c)(2) , substituted “joint tenants with right of survivorship” for “joint tenants” in three places.\nSubsec. (b)(2).  Pub. L. 97–34, §\u202f403(c)(1) , in redefining “qualified joint interest” substituted provision defining term as meaning any interest in property held by the decedent and the decedent’s spouse as tenants by the entirety, or joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants for provision defining the term as meaning any interest in property held by the decedent and the decedent’s spouse as joint tenants or as tenants by the entirety, but only if such joint interest was created by the decedent, the decedent’s spouse, or both, in the case of personal property, the creation of such joint interest constituted in whole or in part a gift for purposes of chapter 12, or in the case of real property, an election under section 2515 applies with respect to the creation of such joint interest, and in the case of a joint tenancy, only the decedent and the decedent’s spouse are joint tenants.\nSubsecs. (c) to (e).  Pub. L. 97–34, §\u202f403(c)(3)(A) , repealed subsec. (c) respecting value where spouse of decedent materially participated in farm or other business, subsec. (d) relating to joint interests of husband and wife created before 1977, and subsec. (e) covering treatment of certain post-1976 terminations.\n1980—Subsec. (c)(1).  Pub. L. 96–222, §\u202f105(a)(3)(B) , substituted “subsection (a)” for “subsections (a)”.\nSubsec. (c)(2)(C).  Pub. L. 96–222, §\u202f105(a)(3)(A) , added subpar. (C).\n1978—Subsec. (c).  Pub. L. 95–600, §\u202f511(a) , added subsec. (c).\nSubsecs. (d), (e).  Pub. L. 95–600, §\u202f702(k)(2) , added subsecs. (d) and (e).\n1976— Pub. L. 94–455  designated existing provisions as subsec. (a), added heading for subsec. (a), and added subsec. (b).\n1962— Pub. L. 87–834  struck out provisions which excepted real property outside of the United States.\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 403(e) of Pub. L. 97–34 , set out as a note under  section 2056 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title V, §\u202f511(b) ,  Nov. 6, 1978 ,  92 Stat. 2882 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after  December 31, 1978 .”\nPub. L. 94–455, title XX, §\u202f2002(d)(3) ,  Oct. 4, 1976 ,  90 Stat. 1856 , provided that:  “The amendment made by subsection (c) [amending this section and  section 2515 of this title ] shall apply to joint interests created after  December 31, 1976 .”\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .\nPub. L. 101–239, title VII, §\u202f7815(d)(16) ,  Dec. 19, 1989 ,  103 Stat. 2419 , as amended by  Pub. L. 101–508, title XI, §\u202f11701 ( l )(3),  Nov. 5, 1990 ,  104 Stat. 1388–513 , provided that:  “For purposes of applying section 2040(a) of the Internal Revenue Code of 1986 with respect to any joint interest to which section 2040(b) of such Code does not apply solely by reason of section 2056(d)(1)(B) of such Code, any consideration furnished before  July 14, 1988 , by the decedent for such interest to the extent treated as a gift to the spouse of the decedent for purposes of chapter 12 of such Code (or would have been so treated if the donor were a citizen of the United States) shall be treated as consideration originally belonging to such spouse and never acquired by such spouse from the decedent.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'To the extent of any property with respect to which the decedent has at the time of his death a general power of appointment created after  October 21, 1942 , or with respect to which the decedent has at any time exercised or released such a power of appointment by a disposition which is of such nature that if it were a transfer of property owned by the decedent, such property would be includible in the decedent’s gross estate under sections 2035 to 2038, inclusive. For purposes of this paragraph (2), the power of appointment shall be considered to exist on the date of the decedent’s death even though the exercise of the power is subject to a precedent giving of notice or even though the exercise of the power takes effect only on the expiration of a stated period after its exercise, whether or not on or before the date of the decedent’s death notice has been given or the power has been exercised.\nFor purposes of this section, a power of appointment created by a will executed on or before  October 21, 1942 , shall be considered a power created on or before such date if the person executing such will dies before  July 1, 1949 , without having republished such will, by codicil or otherwise, after  October 21, 1942 .\n1976—Subsec. (a)(2).  Pub. L. 94–455  struck out provision that a disclaimer or renunciation of a power of appointment not be deemed a release of that power.\n1962—Subsec. (a).  Pub. L. 87–834  struck out provisions which excepted real property situated outside of the United States.\nAmendment by  Pub. L. 94–455  applicable to transfers creating an interest in person disclaiming made after  Dec. 31, 1976 , see  section 2009(e)(2) of Pub. L. 94–455 , set out as a note under  section 2518 of this title .\nAmendment by  Pub. L. 87–834  applicable to estates of decedents dying after  Oct. 16, 1962 , except as otherwise provided, see  section 18(b) of Pub. L. 87–834 , set out as a note under  section 2031 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'To the extent of the amount receivable by the executor as insurance under policies on the life of the decedent.\nTo the extent of the amount receivable by all other beneficiaries as insurance under policies on the life of the decedent with respect to which the decedent possessed at his death any of the incidents of ownership, exercisable either alone or in conjunction with any other person. For purposes of the preceding sentence, the term “incident of ownership” includes a reversionary interest (whether arising by the express terms of the policy or other instrument or by operation of law) only if the value of such reversionary interest exceeded 5 percent of the value of the policy immediately before the death of the decedent. As used in this paragraph, the term “reversionary interest” includes a possibility that the policy, or the proceeds of the policy, may return to the decedent or his estate, or may be subject to a power of disposition by him. The value of a reversionary interest at any time shall be determined (without regard to the fact of the decedent’s death) by usual methods of valuation, including the use of tables of mortality and actuarial principles, pursuant to regulations prescribed by the Secretary. In determining the value of a possibility that the policy or proceeds thereof may be subject to a power of disposition by the decedent, such possibility shall be valued as if it were a possibility that such policy or proceeds may return to the decedent or his estate.\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'If any one of the transfers, trusts, interests, rights, or powers enumerated and described in sections 2035 to 2038, inclusive, and section 2041 is made, created, exercised, or relinquished for a consideration in money or money’s worth, but is not a bona fide sale for an adequate and full consideration in money or money’s worth, there shall be included in the gross estate only the excess of the fair market value at the time of death of the property otherwise to be included on account of such transaction, over the value of the consideration received therefor by the decedent.\nFor purposes of this chapter, a relinquishment or promised relinquishment of dower or curtesy, or of a statutory estate created in lieu of dower or curtesy, or of other marital rights in the decedent’s property or estate, shall not be considered to any extent a consideration “in money or money’s worth”.\nFor purposes of section 2053 (relating to expenses, indebtedness, and taxes), a transfer of property which satisfies the requirements of paragraph (1) of section 2516 (relating to certain property settlements) shall be considered to be made for an adequate and full consideration in money or money’s worth.\n1984—Subsec. (b).  Pub. L. 98–369  amended subsec. (b) generally, designating existing provisions as par. (1) and adding par. (2).\nPub. L. 98–369, div. A, title IV, §\u202f425(c)(1) ,  July 18, 1984 ,  98 Stat. 804 , provided that:  “The amendments made by subsection (a) [amending this section and  section 2053 of this title ] shall apply to estates of decedents dying after the date of the enactment of this Act [ July 18, 1984 ].”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'The value of the gross estate shall include the value of any property to which this section applies in which the decedent had a qualifying income interest for life.\nFor purposes of this chapter and chapter 13, property includible in the gross estate of the decedent under subsection (a) shall be treated as property passing from the decedent.\nA prior section 2044 was renumbered  section 2045 of this title .\n1983—Subsec. (c).  Pub. L. 97–448  added subsec. (c).\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nSection applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 403(e) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 2056 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'Except as otherwise specifically provided by law, sections 2034 to 2042, inclusive, shall apply to the transfers, trusts, estates, interests, rights, powers, and relinquishment of powers, as severally enumerated and described therein, whenever made, created, arising, existing, exercised, or relinquished.\nA prior section 2045 was renumbered  section 2046 of this title .\n1976— Pub. L. 94–455  substituted “specifically provided by law” for “specifically provided therein”.\nAmendment by  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'GROSS ESTATE'},
  'content': 'For provisions relating to the effect of a qualified disclaimer for purposes of this chapter, see section 2518.\nSection applicable to transfers creating an interest in person disclaiming made after  Dec. 31, 1976 , see  section 2009(e)(2) of Pub. L. 94–455 , set out as a note under  section 2518 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate the deductions provided for in this part.\n1978— Pub. L. 95–600  struck out “exemption and” after “gross estate the”.\nPub. L. 95–600, title VII, §\u202f702(r)(5) ,  Nov. 6, 1978 ,  92 Stat. 2939 , provided that:  “The amendments made by this subsection [amending this section and sections 1016, 6324B, and 6698A of this title] shall apply to estates of decedents dying after  December 31, 1976 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 389 , provided for an exemption of $60,000 to be deducted from gross estate in determining value of taxable estate.\nRepeal applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2001 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'Subject to the limitations in paragraph (1) of subsection (c), there shall be deducted in determining the taxable estate amounts representing expenses incurred in administering property not subject to claims which is included in the gross estate to the same extent such amounts would be allowable as a deduction under subsection (a) if such property were subject to claims, and such amounts are paid before the expiration of the period of limitation for assessment provided in section 6501.\nThe deduction allowed by this section in the case of claims against the estate, unpaid mortgages, or any indebtedness shall, when founded on a promise or agreement, be limited to the extent that they were contracted bona fide and for an adequate and full consideration in money or money’s worth; except that in any case in which any such claim is founded on a promise or agreement of the decedent to make a contribution or gift to or for the use of any donee described in section 2055 for the purposes specified therein, the deduction for such claims shall not be so limited, but shall be limited to the extent that it would be allowable as a deduction under section 2055 if such promise or agreement constituted a bequest.\nAny income taxes on income received after the death of the decedent, or property taxes not accrued before his death, or any estate, succession, legacy, or inheritance taxes, shall not be deductible under this section.\nNo deduction shall be allowed under this section for a claim against the estate by a remainderman relating to any property described in section 2044.\nNo deduction shall be allowed under this section for any interest payable under section 6601 on any unpaid portion of the tax imposed by section 2001 for the period during which an extension of time for payment of such tax is in effect under section 6166.\nIn the case of the amounts described in subsection (a), there shall be disallowed the amount by which the deductions specified therein exceed the value, at the time of the decedent’s death, of property subject to claims, except to the extent that such deductions represent amounts paid before the date prescribed for the filing of the estate tax return. For purposes of this section, the term “property subject to claims” means property includible in the gross estate of the decedent which, or the avails of which, would under the applicable law, bear the burden of the payment of such deductions in the final adjustment and settlement of the estate, except that the value of the property shall be reduced by the amount of the deduction under section 2054 attributable to such property.\nNotwithstanding the provisions of subsection (c)(1)(B), for purposes of the tax imposed by section 2001, the value of the taxable estate may be determined, if the executor so elects before the expiration of the period of limitation for assessment provided in section 6501, by deducting from the value of the gross estate the amount (as determined in accordance with regulations prescribed by the Secretary) of any estate, succession, legacy, or inheritance tax imposed by and actually paid to any foreign country, in respect of any property situated within such foreign country and included in the gross estate of a citizen or resident of the United States, upon a transfer by the decedent for public, charitable, or religious uses described in section 2055. The determination under this paragraph of the country within which property is situated shall be made in accordance with the rules applicable under subchapter B (sec. 2101 and following) in determining whether property is situated within or without the United States. Any election under this paragraph shall be exercised in accordance with regulations prescribed by the Secretary.\nNo deduction shall be allowed under paragraph (1) for a foreign death tax specified therein unless the decrease in the tax imposed by section 2001 which results from the deduction provided in paragraph (1) will inure solely for the benefit of the public, charitable, or religious transferees described in section 2055 or section 2106(a)(2). In any case where the tax imposed by section 2001 is equitably apportioned among all the transferees of property included in the gross estate, including those described in sections 2055 and 2106(a)(2) (taking into account any exemptions, credits, or deductions allowed by this chapter), in determining such decrease, there shall be disregarded any decrease in the Federal estate tax which any transferees other than those described in sections 2055 and 2106(a)(2) are required to pay.\nAn election under this subsection shall be deemed a waiver of the right to claim a credit, against the Federal estate tax, under a death tax convention with any foreign country for any tax or portion thereof in respect of which a deduction is taken under this subsection.\nSee section 2014(f) for the effect of a deduction taken under this paragraph on the credit for foreign death taxes.\nFor provisions treating certain relinquishments of marital rights as consideration in money or money’s worth, see section 2043(b)(2).\n2002—Subsec. (d)(3)(B).  Pub. L. 107–134  substituted “section 2011(d)” for “section 2011(e)”.\n2001—Subsec. (d).  Pub. L. 107–16  substituted “Certain foreign death taxes” for “Certain State and foreign death taxes” in heading and amended text generally, revising and restating provisions of pars. (1) to (3) so as to eliminate provisions relating to deduction for State death taxes.\n1997—Subsec. (c)(1)(B).  Pub. L. 105–34, §\u202f1073(b)(3) , struck out at end “This subparagraph shall not apply to any increase in the tax imposed by this chapter by reason of section 4980A(d).”\nSubsec. (c)(1)(D).  Pub. L. 105–34, §\u202f503(b)(1) , added subpar. (D).\n1988—Subsec. (c)(1)(B).  Pub. L. 100–647 , inserted at end “This subparagraph shall not apply to any increase in the tax imposed by this chapter by reason of section 4980A(d).”\n1984—Subsec. (c)(1)(C).  Pub. L. 98–369, §\u202f1027(b) , added subpar. (C).\nSubsec. (e).  Pub. L. 98–369, §\u202f425(a)(2) , substituted “For provisions treating certain relinquishments of marital rights as consideration in money or money’s worth, see section 2043(b)(2)” for “For provisions that relinquishment of marital rights shall not be deemed a consideration ‘in money or money’s worth,’ see section 2043(b).”\n1976—Subsec. (d)(1).  Pub. L. 94–455  struck out “or his delegate” after “Secretary” in provisions preceding subpar. (A) and following subpar. (B) and struck out “or Territory” after “a State” in subpar. (A).\n1959—Subsec. (d).  Pub. L. 86–175  inserted a reference to foreign death taxes in heading of subsection and par. (3) and in text of par. (2), redesignated provisions of par. (1) as par. (1)(A) and sentence pertaining to exercise of privilege of election, added par. (2) and sentence for determining location of property, redesignated provisions of par. (3) as par. (3)(B) in part, and added par. (3)(A) and the part of (B) relating to foreign death taxes.\n1958—Subsec. (d)(1).  Pub. L. 85–866  struck out “or any possession of the United States,” after “District of Columbia,”.\n1956—Subsecs. (d), (e). Act  Feb. 20, 1956 , added subsec. (d) and redesignated former subsec. (d) as (e).\nPub. L. 107–134, title I, §\u202f103(d) ,  Jan. 23, 2002 ,  115 Stat. 2431 , provided that: \n “(1)   Effective date .— The amendments made by this section [amending this section and sections 2011 and 2201 of this title] shall apply to estates of decedents— “(A)  dying on or after  September 11, 2001 ; and \n \n “(B)  in the case of individuals dying as a result of the  April 19, 1995 , terrorist attack, dying on or after  April 19, 1995 . \n \n \n “(2)   Waiver of limitations .— If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [ Jan. 23, 2002 ] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period.”\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  section 503(b)(1) of Pub. L. 105–34  applicable to estates of decedents dying after  Dec. 31, 1997 , with special rule in case of estate of any decedent dying before  Jan. 1, 1998 , with respect to which there is an election under  section 6166 of this title , see  section 503(d) of Pub. L. 105–34 , set out as a note under  section 163 of this title .\nAmendment by  section 1073(b)(3) of Pub. L. 105–34  applicable to estates of decedents dying after  Dec. 31, 1996 , see  section 1073(c) of Pub. L. 105–34 , set out as an Effective Date of Repeal note under  section 4980A of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 425(a)(2) of Pub. L. 98–369  applicable to estates of decedents dying after  July 18, 1984 , see  section 425(c)(1) of Pub. L. 98–369 , set out as a note under  section 2043 of this title .\nPub. L. 98–369, div. A, title X, §\u202f1027(c) ,  July 18, 1984 ,  98 Stat. 1032 , provided that:  “The amendments made by this section [amending this section and  section 2056 of this title ] shall take effect as if included in the amendment made by section 403 of the Economic Recovery Tax Act of 1981 [ section 403 of Pub. L. 97–34 , see Effective Date of 1981 Amendment note set out under  section 2056 of this title ].”\nAmendment by  section 1902(a)(12)(B) of Pub. L. 94–455  applicable to estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nPub. L. 86–175, §\u202f4 ,  Aug. 21, 1959 ,  73 Stat. 397 , provided that:  “The amendments made by the preceding sections of this Act [amending this section and sections 2011 and 2014 of this title] shall apply with respect to the estates of decedents dying on or after  July 1, 1955 .”\nAmendment by  Pub. L. 85–866  applicable to estates of decedents dying after  Sept. 2, 1958 , see  section 102(d) of Pub. L. 85–866 , set out as a note under  section 2014 of this title .\nAct Feb. 20, 1956, ch. 63, §\u202f4 ,  70 Stat. 25 , as amended by act  Oct. 22, 1986 ,  Pub. L. 99–514, §\u202f2 ,  100 Stat. 2095 , provided that:  “The amendments to the Internal Revenue Code of 1986 [formerly I.R.C. 1954] made by sections 2 and 3 of this Act [amending this section and  section 2011 of this title ], and provisions having the same effect as this amendment, which shall be considered to be included in chapter 3 of the Internal Revenue Code of 1939, shall apply to the estates of all decedents dying after  December 31, 1953 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate losses incurred during the settlement of estates arising from fires, storms, shipwrecks, or other casualties, or from theft, when such losses are not compensated for by insurance or otherwise.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'Property includible in the decedent’s gross estate under section 2041 (relating to powers of appointment) received by a donee described in this section shall, for purposes of this section, be considered a bequest of such decedent.\nIf the tax imposed by section 2001, or any estate, succession, legacy, or inheritance taxes, are, either by the terms of the will, by the law of the jurisdiction under which the estate is administered, or by the law of the jurisdiction imposing the particular tax, payable in whole or in part out of the bequests, legacies, or devises otherwise deductible under this section, then the amount deductible under this section shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes.\nThe amount of the deduction under this section for any transfer shall not exceed the value of the transferred property required to be included in the gross estate.\nA deduction shall be allowed under subsection (a) in respect of any transfer of a qualified real property interest (as defined in section 170(h)(2)(C)) which meets the requirements of section 170(h) (without regard to paragraph (4)(A) thereof).\nSection 25 of the State Department Basic Authorities Act of 1956, referred to in subsec. (g)(6), is classified to  section 2697 of Title 22 , Foreign Relations and Intercourse.\nSections 1218(b) and 1234(b) of  Pub. L. 109–280 , which directed the amendment of section 2055 without specifying the act to be amended, were executed to this section, which is section 2055 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.\n2018—Subsec. (e)(3)(G).  Pub. L. 115–141  substituted “subparagraph (J))” for “subparagraph (J)”.\nSubsec. (g)(4).  Pub. L. 115–232, §\u202f809(h)(2)(A) , substituted “ section 8622 of title 10 , United States Code” for “ section 7222 of title 10 , United States Code”.\nSubsec. (g)(9).  Pub. L. 115–232, §\u202f809(h)(2)(B) , substituted “ section 8473 of title 10 , United States Code” for “ section 6973 of title 10 , United States Code”.\nSubsec. (g)(10).  Pub. L. 115–232, §\u202f809(h)(2)(C) , substituted “ section 8474 of title 10 , United States Code” for “ section 6974 of title 10 , United States Code”.\n2007—Subsecs. (g), (h).  Pub. L. 110–172  redesignated subsec. (h) as (g) and struck out heading and text of former subsec. (g). Text read as follows:\n“(1)  In general .—In the case of any additional contribution, the fair market value of such contribution shall be determined by using the lesser of—\n“(A) the fair market value of the property at the time of the initial fractional contribution, or\n“(B) the fair market value of the property at the time of the additional contribution.\n“(2)  Definitions .—For purposes of this paragraph—\n“(A)  Additional contribution .—The term ‘additional contribution’ means a bequest, legacy, devise, or transfer described in subsection (a) of any interest in a property with respect to which the decedent had previously made an initial fractional contribution.\n“(B)  Initial fractional contribution .—The term ‘initial fractional contribution’ means, with respect to any decedent, any charitable contribution of an undivided portion of the decedent’s entire interest in any tangible personal property for which a deduction was allowed under section 170.”\n2006—Subsec. (e)(5).  Pub. L. 109–280, §\u202f1234(b) , added par. (5). See Codification note above.\nSubsecs. (g), (h).  Pub. L. 109–280, §\u202f1218(b) , added subsec. (g) and redesignated former subsec. (g) as (h). See Codification note above.\n1997—Subsec. (a)(5).  Pub. L. 105–34, §\u202f1530(c)(7) , added par. (5).\nSubsec. (e)(3)(G).  Pub. L. 105–34, §\u202f1089(b)(5) , inserted “(or other proceeding pursuant to subparagraph (J)” after “reformation”.\nSubsec. (e)(3)(J).  Pub. L. 105–34, §\u202f1089(b)(3) , added subpar. (J).\n1996—Subsec. (g)(4).  Pub. L. 104–201  amended par. (4) generally, substituting reference to Naval Historical Center for reference to Office of Naval Records and History.\n1987—Subsec. (a)(2), (3).  Pub. L. 100–203  inserted “(or in opposition to)” after “on behalf of”.\n1986—Subsecs. (f), (g).  Pub. L. 99–514  added subsec. (f) and redesignated former subsec. (f) as (g).\n1984—Subsec. (e)(3).  Pub. L. 98–369, §\u202f1022(a) , amended par. (3) generally, substituting provisions relating to reformations to comply with par. (2), defining “qualified reformation”, “reformable interest”, and “qualified interest”, and setting forth limitations on the deduction, a special rule where the income beneficiary dies, statute of limitations, regulations prescribed by the Secretary, and reformations permitted in the case of remainder interests in a residence or farm, pooled income funds, etc., for former par. (3), which provided: “In the case of a will executed before  December 31, 1978 , or a trust created before such date, if a deduction is not allowable at the time of the decedent’s death because of the failure of an interest in property which passes from the decedent to a person, or for a use, described in subsection (a) to meet the requirements of subparagraph (A) or (B) of paragraph (2) of this subsection, and if the governing instrument is amended or conformed on or before  December 31, 1981 , or, if later, on or before the 30th day after the date on which judicial proceedings begun on or before  December 31, 1981 , (which are required to amend or conform the governing instrument), become final, so that the interest is in a trust which meets the requirements of such subparagraph (A) or (B) (as the case may be), a deduction shall nevertheless be allowed. The Secretary may, by regulation, provide for the application of the provisions of this paragraph to trusts whose governing instruments are amended or conformed in accordance with this paragraph, and such regulations may provide for any adjustments in the application of the provisions of section 508 (relating to special rules with respect to section 501(c)(3) organizations), subchapter J (relating to estates, trusts, beneficiaries, and decedents), and chapter 42 (relating to private foundations), to such trusts made necessary by the application of this paragraph. If, by the due date for the filing of an estate tax return (including any extension thereof), the interest is in a charitable trust which, upon allowance of a deduction, would be described in section 4947(a)(1), or the interest passes directly to a person or for a use described in subsection (a), a deduction shall be allowed as if the governing instrument was amended or conformed under this paragraph. If the amendment or conformation of the governing instrument is made after the due date for the filing of the estate tax return (including any extension thereof), the deduction shall be allowed upon the filing of a timely claim for credit or refund (as provided for in section 6511) of an overpayment resulting from the application of this paragraph. In the case of a credit or refund as a result of an amendment or conformation made pursuant to this paragraph, no interest shall be allowed for the period prior to the expiration of the 180th day after the date on which the claim for credit or refund is filed.”\nSubsec. (f)(2).  Pub. L. 98–369, §\u202f1032(b)(2) , added par. (2), and redesignated former pars. (2) to (11) as pars. (3) to (12), respectively.\n1983—Subsec. (f)(11).  Pub. L. 97–473  added par. (11).\n1982—Subsec. (a).  Pub. L. 97–248  inserted provision that rules similar to the rules of  section 501(j) of this title  shall apply for purposes of par. (2).\nSubsec. (f)(6).  Pub. L. 97–258, §\u202f3(f)(1) , substituted “ section 4043 of title 18 , United States Code” for “ section 2 of the Act of May 15, 1952 , as amended by the Act of  July 9, 1952  ( 31 U.S.C. 725s–4 )”.\nSubsec. (f)(7).  Pub. L. 97–258, §\u202f3(f)(2) , substituted “ section 3113(e) of title 31 , United States Code” for “section 24 of the Second Liberty Bond Act ( 31 U.S.C. 757e )”.\n1981—Subsec. (e)(4).  Pub. L. 97–34  added par. (4).\n1980—Subsec. (e)(3).  Pub. L. 96–605  substituted “ December 31, 1978 ” for “ December 31, 1977 ” and “ December 31, 1981 ” for “ December 31, 1978 ” in two places.\nPub. L. 96–222  substituted “such subparagraph (A) or (B)” for “such subparagraph (a) or (B)” and “so that the interest” for “so that interest”.\nSubsec. (f)(5).  Pub. L. 96–465 , among other changes, inserted references to the Director of the International Communication Agency and the Director of the United States International Development Cooperation Agency and substituted reference to section 25 of the State Department Basic Authorities Act of 1956 for reference to section 1021(e) of the Foreign Service Act of 1946.\n1978—Subsec. (e)(3).  Pub. L. 95–600  inserted “or (B)” before “of paragraph (2)”, substituted “on or before  December 31, 1978 ” for “on or before  December 31, 1977 ” wherever appearing and “which meets the requirements of such subparagraph (a) or (B) (as the case may be),” for “which is a charitable remainder annuity trust, a charitable remainder unitrust (described in section 664), or a pooled income fund (described in section 642(c)(5)),”.\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1307(d)(1)(B)(ii), (C), 1313(b)(2), 1902(a)(12)(A), 2009(b)(4)(B), (C), struck out “(including the interest which falls into any such bequest, legacy, devise, or transfer as a result of an irrevocable disclaimer of a bequest, legacy, devise, transfer, or power, if the disclaimer is made before the date prescribed for the filing of the estate tax return)” after “or transfers” in provisions preceding par. (1), struck out “Territory,” after “State,” in par. (1), inserted “,\u2000or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment),” after “encouragement of art” and substituted “which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation,” for “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation,” in par. (2), substituted “such trust, fraternal society, order, or association would not be disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation,” for “no substantial part of the activities of such trustee or trustees, or of such fraternal society, order, or association, is carrying on propaganda, or otherwise attempting, to influence legislation,” in par. (3), and, in provisions following par. (4), substituted “a qualified disclaimer” for “an irrevocable disclaimer” and “such qualified disclaimer” for “such irrevocable disclaimer”.\nSubsec. (b).  Pub. L. 94–455, §\u202f1902(a)(4)(A) , struck out provisions under which a bequest in trust, if the surviving spouse of the decedent was entitled for life to all of the net income from the trust and the surviving spouse had a power of appointment over the corpus of that trust exercisable by will in favor of, among others, organizations described in subsec. (a)(2), could be deemed a transfer to the organization by the decedent under certain conditions.\nSubsec. (e)(2).  Pub. L. 94–455, §\u202f2124(e)(2) , substituted “(other than an interest described in section 170(f)(3)(B))” for “(other than a remainder interest in a personal residence or farm or an undivided portion of the decedent’s entire interest in property)” in provisions preceding subpar. (A).\nSubsec. (e)(3).  Pub. L. 94–455, §\u202f1304(a) , §\u202f1906(b)(13)(A), substituted “will executed before  December 31, 1977 ,” for “will executed before  September 21, 1974 ,” and “amended or conformed on or before  December 31, 1977 , or, if later, on or before the 30th day after the date on which judicial proceedings begun on or before  December 31, 1977 ” for “amended or conformed on or before  December 31, 1975 , or, if later, on or before the 30th day after the date on which judicial proceedings begun on or before  December 31, 1975 ” and struck out “or his delegate” after “Secretary”.\nSubsec. (f).  Pub. L. 94–455, §\u202f1902(a)(4)(B) , extended par. (2) by inserting reference to gifts, struck out par. (3) which made a cross reference to  section 2 of the Act of Aug. 8, 1946  ( 60 Stat. 924 ;  5 U.S.C. 393 ) for construction of bequests for benefit of the library of the Post Office Department as bequests to or for the use of the United States, redesignated pars. (4)–(11) as (3)–(10), respectively, substituted “For treatment of gifts and bequests for the benefit of the Office of Naval Records and History as gifts or bequests to or for the use of the United States, see  section 7222 of title 10 , United States Code” for “For exemption of bequests for benefit of Office of Naval Records and Library, Navy Department, see  section 2 of the Act of March 4, 1937  ( 50 Stat. 25 ;  5 U.S.C. 419b )” in par. (3) as so redesignated, substituted “For treatment of gifts and bequests to or for the benefit of National Park Foundation as gifts or bequests to or for the use of the United States, see  section 8 of the Act of December 18, 1967  ( 16 U.S.C. 191 )” for “For exemption of bequests to or for benefit of National Park Service, see  section 5 of the Act of July 10, 1935  ( 49 Stat. 478 ;  16 U.S.C. 19c )” in par. (4) as so redesignated, and corrected obsolete and inaccurate references in pars. (5)–(10) as so redesignated.\n1974—Subsec. (e)(3).  Pub. L. 93–483  added par. (3).\n1970—Subsec. (b)(2)(C).  Pub. L. 91–614  substituted “6 months” for “one year”.\n1969—Subsec. (a)(2).  Pub. L. 91–172, §\u202f201(d)(4)(A)  (i), inserted non-participation and non-intervention in political campaigns as an additional qualification.\nSubsec. (a)(3).  Pub. L. 91–172, §\u202f201(d)(4)(A)(ii) , inserted non-participation and non-intervention in political campaigns as an additional qualification.\nSubsec. (e).  Pub. L. 91–172, §\u202f201(d)(1) , substituted substantive provisions for simple reference to sections 503 and 681 of this title in which such substantive provisions were formerly set out.\n1958—Subsec. (e).  Pub. L. 85–866  substituted “503” for “504”.\n1956—Subsec. (b). Act  Aug. 6, 1956 , designated existing provisions as par. (1) and added par. (2).\nInternational Communication Agency, and Director thereof, redesignated United States Information Agency, and Director thereof, by  section 303 of Pub. L. 97–241 , title III,  Aug. 24, 1982 ,  96 Stat. 291 , set out as a note under  section 1461 of Title 22 , Foreign Relations and Intercourse. United States Information Agency (other than Broadcasting Board of Governors and International Broadcasting Bureau) abolished and functions transferred to Secretary of State, see sections 6531 and 6532 of Title 22.\nAmendment by  Pub. L. 115–232  effective  Feb. 1, 2019 , with provision for the coordination of amendments and special rule for certain redesignations, see  section 800 of Pub. L. 115–232 , set out as a note preceding  section 3001 of Title 10 , Armed Forces.\nAmendment by  Pub. L. 110–172  effective as if included in the provisions of the Pension Protection Act of 2006,  Pub. L. 109–280 , to which such amendment relates, see  section 3(j) of Pub. L. 110–172 , set out as a note under  section 170 of this title .\nAmendment by  section 1218(b) of Pub. L. 109–280  applicable to contributions, bequests, and gifts made after  Aug. 17, 2006 , see  section 1218(d) of Pub. L. 109–280 , set out as a note under  section 170 of this title .\nAmendment by  section 1234(b) of Pub. L. 109–280  applicable to contributions made after the date which is 180 days after  Aug. 17, 2006 , see  section 1234(d) of Pub. L. 109–280 , set out as a note under  section 170 of this title .\nAmendment by section 1089(b)(3), (5) of  Pub. L. 105–34  applicable to transfers in trust after  July 28, 1997 , with special rule for certain decedents, see  section 1089(b)(6) of Pub. L. 105–34 , set out as a note under  section 664 of this title .\nAmendment by  section 1530(c)(7) of Pub. L. 105–34  applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after  Aug. 5, 1997 , see  section 1530(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nAmendment by  Pub. L. 100–203  applicable with respect to activities after  Dec. 22, 1987 , see  section 10711(c) of Pub. L. 100–203 , set out as a note under  section 170 of this title .\nPub. L. 99–514, title XIV, §\u202f1422(e) ,  Oct. 22, 1986 ,  100 Stat. 2717 , provided that:  “The amendments made by this section [amending this section and sections 2106 and 2522 of this title] shall apply to transfers and contributions made after  December 31, 1986 .”\nPub. L. 98–369, div. A, title X, §\u202f1022(e) ,  July 18, 1984 ,  98 Stat. 1029 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   Subsections  (a), (b),  and  (c).— The amendments made by subsections (a), (b), and (c) [amending this section and sections 170 and 2522 of this title] shall apply to reformations after  December 31, 1978 ; except that such amendments shall not apply to any reformation to which section 2055(e)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ]) applies. For purposes of applying clause (iii) of section 2055(e)(3)(C) of such Code (as amended by this section), the 90th day described in such clause shall be treated as not occurring before the 90th day after the date of the enactment of this Act. \n \n “(2)   Subsection  (d).— The amendment made by subsection (d) [amending  section 664 of this title ] shall apply to transfers after  December 31, 1978 . \n \n “(3)   Statute of limitations.— “(A)   In general .— If on the date of the enactment of this Act [ July 18, 1984 ] (or at any time before the date 1 year after such date of enactment), credit or refund of any overpayment of tax attributable to the amendments made by this section is barred by any law or rule of law, such credit or refund of such overpayment may nevertheless be made if claim therefor is filed before the date 1 year after the date of the enactment of this Act. \n \n “(B)   No interest where statute closed on date of enactment .— In any case where the making of the credit or refund of the overpayment described in subparagraph (A) is barred on the date of the enactment of this Act [ July 18, 1984 ], no interest shall be allowed with respect to such overpayment (or any related adjustment) for the period before the date 180 days after the date on which the Secretary of the Treasury (or his delegate) is notified that the reformation has occurred.”\nAmendment by  section 1032(b)(2) of Pub. L. 98–369  applicable to taxable years beginning after  July 18, 1984 , see  section 1032(c) of Pub. L. 98–369 , set out as a note under  section 170 of this title .\nFor effective date of amendment by  Pub. L. 97–473 , see  section 204(3) of Pub. L. 97–473 , set out as an Effective Date note under  section 7871 of this title .\nAmendment by  Pub. L. 97–248  effective  Oct. 5, 1976 , see  section 286(c) of Pub. L. 97–248 , set out as a note under  section 501 of this title .\nPub. L. 97–34, title IV, §\u202f423(c)(1) ,  Aug. 13, 1981 ,  95 Stat. 317 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to the estates of decedents dying after  December 31, 1981 .”\nPub. L. 96–605, title III, §\u202f301(b)(1) ,  Dec. 28, 1980 ,  94 Stat. 3531 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply in the case of decedents dying after  December 31, 1969 .”\nAmendment by  Pub. L. 96–465  effective  Feb. 15, 1981 , except as otherwise provided, see  section 2403 of Pub. L. 96–465 , set out as an Effective Date note under  section 3901 of Title 22 , Foreign Relations and Intercourse.\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 96–605, title III, §\u202f301(b)(2) ,  Dec. 28, 1980 ,  94 Stat. 3531 , provided that:  “Section 514(b) [ section 514(b) of Pub. L. 95–600 , set out below] (and section 514(c) [ section 514(c) of Pub. L. 95–600 , set out below] insofar as it relates to section 514(b)) of the Revenue Act of 1978 shall be applied as if the amendment made by subsection (a) [amending this section] had been included in the amendment made by section 514(a) of such Act [ section 514(a) of Pub. L. 95–600 , amending this section].”\nPub. L. 95–600, title V, §\u202f514(c) , as added by  Pub. L. 96–222, title I, §\u202f105(a)(4)(B) ,  Apr. 1, 1980 ,  94 Stat. 219 ; amended  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   For subsection  (a).— The amendment made by subsection (a) [amending this section] shall apply in the case of decedents dying after  December 31, 1969 . \n \n “(2)   For subsection  (b).— Subsection (b) [ section 514(b) of Pub. L. 95–600 , set out below]— “(A)  insofar as it relates to section 170 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to transfers in trust and contributions made after  July 31, 1969 , and \n \n “(B)  insofar as it relates to section 2522 of the Internal Revenue Code of 1986 shall apply to transfers made after  December 31, 1969 .”\nPub. L. 94–455, title XIII, §\u202f1304(c) ,  Oct. 4, 1976 ,  90 Stat. 1716 , provided that:  “The amendments made by this section [amending this section] shall apply in the case of decedents dying after  December 31, 1969 .”\nAmendment by section 1307(d)(1)(B)(ii), (C) of  Pub. L. 94–455 , applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 1307(e) of Pub. L. 94–455 , set out as a note under  section 501 of this title .\nAmendment by  section 1313(b)(2) of Pub. L. 94–455  applicable on day following  Oct. 4, 1976 , see  section 1313(d) of Pub. L. 94–455 , set out as a note under  section 501 of this title .\nAmendment by section 1902(a)(4), (12)(A) of  Pub. L. 94–455  applicable in the case of estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nAmendment by section 2009(b)(4)(B), (C) of  Pub. L. 94–455  applicable with respect to transfers creating an interest in person disclaiming made after  Dec. 31, 1976 , see  section 2009(e)(2) of Pub. L. 94–455 , set out as a note under  section 2518 of this title .\nAmendment by  section 2124(e)(2) of Pub. L. 94–455  applicable with respect to contributions or transfers made after  June 13, 1976 , see  section 2124(e)(4) of Pub. L. 94–455 , set out as a note under  section 170 of this title .\nPub. L. 93–483, §\u202f3(b) ,  Oct. 26, 1974 ,  88 Stat. 1458 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying after  December 31, 1969 .”\nAmendment by  Pub. L. 91–614  applicable with respect to decedents dying after  Dec. 31, 1970 , see  section 101(j) of Pub. L. 91–614 , set out as an Effective Date note under  section 2032 of this title .\nAmendment by  section 201(d)(1) of Pub. L. 91–172  applicable in the case of decedents dying after  Dec. 31, 1969 , with specified exceptions, see  section 201(g)(4) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAmendment by  section 201(d)(4)(A) of Pub. L. 91–172  applicable to gifts and transfers made after  Dec. 31, 1969 , see  section 201(g)(4)(E) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAct Aug. 6, 1956, ch. 1020, §\u202f3 ,  70 Stat. 1075 , provided that:  “The amendments made by this Act [amending this section and  section 6503 of this title ] shall apply in the case of decedents dying after  August 16, 1954 .”\nUnited States International Development Cooperation Agency (other than Agency for International Development and Overseas Private Investment Corporation) abolished and functions and authorities transferred, see sections 6561 and 6562 of Title 22, Foreign Relations and Intercourse.\nFor transfer of functions, personnel, assets, and liabilities of the Overseas Private Investment Corporation to the United States International Development Finance Corporation and treatment of related references, see sections 9683 and 9686(d) of Title 22, Foreign Relations and Intercourse.\nPub. L. 99–514, title XIV, §\u202f1422(d) ,  Oct. 22, 1986 ,  100 Stat. 2717 , provided that:  “If the Secretary of the Interior acquires by donation after  December 31, 1986 , a conservation easement (within the meaning of section 2(h) of S. 720, 99th Congress, 1st Session, as in effect on  August 16, 1986 ) [see  Pub. L. 99–420 ,  Sept. 25, 1986 , §\u202f102(h),  99 Stat. 955 , 957], such donation shall qualify for treatment under section 2055(f) or 2522(d) of the Internal Revenue Code of 1954 [now 1986], as added by this section.”\nPub. L. 95–600, title V, §\u202f514(b) ,  Nov. 6, 1978 ,  92 Stat. 2884 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Under regulations prescribed by the Secretary of the Treasury or his delegate, in the case of trusts created before  December 31, 1977 , provisions comparable to section 2055(e)(3) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by subsection (a)) shall be deemed to be included in sections 170 and 2522 of the Internal Revenue Code of 1986.”\nPub. L. 94–455, title XIII, §\u202f1304(b) ,  Oct. 4, 1976 ,  90 Stat. 1716 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “A claim for refund or credit of an overpayment of the tax imposed by section 2001 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] allowable under section 2055(e)(3) of such Code (as amended by subsection (a)) shall not be denied because of the expiration of the time for filing such a claim under section 6511(a) if such claim is filed not later than  June 30, 1978 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'For purposes of the tax imposed by section 2001, the value of the taxable estate shall, except as limited by subsection (b), be determined by deducting from the value of the gross estate an amount equal to the value of any interest in property which passes or has passed from the decedent to his surviving spouse, but only to the extent that such interest is included in determining the value of the gross estate.\nWhere the assets (included in the decedent’s gross estate) out of which, or the proceeds of which, an interest passing to the surviving spouse may be satisfied include a particular asset or assets with respect to which no deduction would be allowed if such asset or assets passed from the decedent to such spouse, then the value of such interest passing to such spouse shall, for purposes of subsection (a), be reduced by the aggregate value of such particular assets.\nThe term “property” includes an interest in property.\nA specific portion of property shall be treated as separate property.\nAn election under this paragraph with respect to any property shall be made by the executor on the return of tax imposed by section 2001. Such an election, once made, shall be irrevocable.\nIf the surviving spouse of the decedent is the only beneficiary of a qualified charitable remainder trust who is not a charitable beneficiary nor an ESOP beneficiary, paragraph (1) shall not apply to any interest in such trust which passes or has passed from the decedent to such surviving spouse.\nThe term “charitable beneficiary” means any beneficiary which is an organization described in section 170(c).\nThe term “ESOP beneficiary” means any beneficiary which is an employee stock ownership plan (as defined in section 4975(e)(7)) that holds a remainder interest in qualified employer securities (as defined in section 664(g)(4)) to be transferred to such plan in a qualified gratuitous transfer (as defined in section 664(g)(1)).\nThe term “qualified charitable remainder trust” means a charitable remainder annuity trust or a charitable remainder unitrust (described in section 664).\nNothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same decedent.\nFor purposes of paragraphs (5), (6), and (7)(B)(iv), the term “specific portion” only includes a portion determined on a fractional or percentage basis.\nParagraph (1) shall not apply to any property passing to the surviving spouse in a qualified domestic trust.\nIf a judicial proceeding described in subparagraph (A)(ii) is commenced with respect to any trust, the period for assessing any deficiency of tax attributable to any failure of such trust to be a qualified domestic trust shall not expire before the date 1 year after the date on which the Secretary is notified that the trust has been changed pursuant to such judicial proceeding or that such proceeding has been terminated.\n1997—Subsec. (b)(7)(C).  Pub. L. 105–34, §\u202f1311(a) , inserted “(or, in the case of an interest in an annuity arising under the community property laws of a State, included in the gross estate of the decedent under section 2033)” after “section 2039”.\nSubsec. (b)(8).  Pub. L. 105–34, §\u202f1530(c)(8) , amended par. (8) generally. Prior to amendment, par. (8) read as follows:\n“(8)  Special rule for charitable remainder trusts.—\n“(A)  In general .—If the surviving spouse of the decedent is the only noncharitable beneficiary of a qualified charitable remainder trust, paragraph (1) shall not apply to any interest in such trust which passes or has passed from the decedent to such surviving spouse.\n“(B)  Definitions .—For purposes of subparagraph (A)—\n“(i)  Noncharitable beneficiary .—The term ‘noncharitable beneficiary’ means any beneficiary of the qualified charitable remainder trust other than an organization described in section 170(c).\n“(ii)  Qualified charitable remainder trust .—The term ‘qualified charitable remainder trust’ means a charitable remainder annuity trust or charitable remainder unitrust (described in section 664).”\n1992—Subsec. (b)(10).  Pub. L. 102–486  added par. (10).\n1990—Subsec. (d)(3).  Pub. L. 101–508, §\u202f11702(g)(5) , substituted “section 2056A(b)(7)” for “section 2056A(b)(6)”.\nSubsec. (d)(4), (5).  Pub. L. 101–508, §\u202f11701 ( l )(1), redesignated par. (4) relating to reformations permitted as par. (5).\n1989—Subsec. (b)(7)(C).  Pub. L. 101–239, §\u202f7816(q) , inserted “included in the gross estate of the decedent under section 2039” after “an annuity”.\nSubsec. (d)(2)(B).  Pub. L. 101–239, §\u202f7815(d)(4)(A) , substituted “Special rule” for “Property passing outside of probate estate” in heading and amended text generally. Prior to amendment, text read as follows: “If any property passes from the decedent to the surviving spouse of the decedent outside of the decedent’s probate estate, for purposes of subparagraph (A), such property shall be treated as passing to such spouse in a qualified domestic trust if such property is transferred to such a trust before the day on which the return of the tax imposed by section 2001 is made.”\nSubsec. (d)(3).  Pub. L. 101–239, §\u202f7815(d)(6) , substituted “this chapter” for “section 2001” in subpar. (C) and inserted “and without regard to subsection (d)(3) of such section” after “first decedent died” in concluding provisions.\nSubsec. (d)(4).  Pub. L. 101–239, §\u202f7815(d)(8) , added par. (4) relating to reformations permitted.\nPub. L. 101–239, §\u202f7815(d)(5) , added par. (4) relating to special rule where resident spouse becomes citizen.\n1988—Subsec. (b)(7)(C).  Pub. L. 100–647, §\u202f6152(a) , added subpar. (C).\nSubsec. (d).  Pub. L. 100–647, §\u202f5033(a)(1) , added subsec. (d).\n1984—Subsec. (b)(7)(B)(ii)(I).  Pub. L. 98–369  inserted “,\u2000or has a usufruct interest for life in the property”.\n1983—Subsec. (b)(7)(B)(ii).  Pub. L. 97–448, §\u202f104(a)(8) , inserted provision that an annuity shall be treated in a manner similar to an income interest in property (regardless of whether the property from which the annuity is payable can be separately identified).\nSubsec. (b)(9).  Pub. L. 97–448, §\u202f104(a)(2)(A) , added par. (9).\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f403(a)(1)(B) , substituted “subsection (b)” for “subsections (b) and (c)”.\nSubsec. (b)(7), (8).  Pub. L. 97–34, §\u202f403(d)(1) , added pars. (7) and (8).\nSubsecs. (c), (d).  Pub. L. 97–34, §\u202f403(a)(1)(A) , redesignated subsec. (d) as (c) and struck out former subsec. (c) relating to limitation on aggregate of deductions.\n1978—Subsec. (c)(1)(B).  Pub. L. 95–600  inserted in cl. (ii) “required to be included in a gift tax return” after “with respect to any gift” and inserted following cl. (ii) “For purposes of this subparagraph, a gift which is includible in the gross estate of the donor by reason of section 2035 shall not be taken into account”.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f2009(b)(4)(E) , substituted “subsections (b) and (c)” for “subsections (b), (c), and (d)”.\nSubsec. (c)(1).  Pub. L. 94–455, §\u202f2002(a) , designated existing provisions as subpar. (A), substituted provisions that the aggregate amount of the deductions allowed under this section (computed without regard to this subsection) shall not exceed the greater of $250,000 or 50 percent of the value of the adjusted gross estate as defined in par. (2) for provisions that the aggregate amount of the deductions allowed under this section (computed without regard to this subsection) shall not exceed 50 percent of the value of the adjusted gross estate as defined in par. (2), and added subpars. (B) and (C).\nSubsec. (c)(2)(B).  Pub. L. 94–455, §\u202f1902(a)(12)(A) , struck out “Territory,” after “State,” in provisions preceding cl. (i).\nSubsecs. (d), (e).  Pub. L. 94–455, §\u202f2009(b)(4)(D) , redesignated subsec. (e) as (d). Former subsec. (d), which related to disclaimers by the surviving spouse or by other persons, was struck out.\n1966—Subsec. (d)(2).  Pub. L. 89–621  provided that if the disclaimer is made by the person before the date prescribed for the filing of the estate tax return and if the person does not accept the interest before making the disclaimer, the interest shall, for purposes of this section, be considered as passing from the decedent to the surviving spouse.\nPub. L. 105–34, title XIII, §\u202f1311(b) ,  Aug. 5, 1997 ,  111 Stat. 1044 , provided that:  “The amendment made by this section [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  section 1530(c)(8) of Pub. L. 105–34  applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after  Aug. 5, 1997 , see  section 1530(d) of Pub. L. 105–34 , set out as a note under  section 401 of this title .\nPub. L. 102–486, title XIX, §\u202f1941(c) ,  Oct. 24, 1992 ,  106 Stat. 3036 , provided that: \n “(1)   Subsection  (a).— “(A)   In general .— Except as provided in subparagraph (B), the amendment made by subsection (a) [amending this section] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Oct. 24, 1992 ]. \n \n “(B)   Exception .— The amendment made by subsection (a) shall not apply to any interest in property which passes (or has passed) to the surviving spouse of the decedent pursuant to a will (or revocable trust) in existence on the date of the enactment of this Act if— “(i)  the decedent dies on or before the date 3 years after such date of enactment, or \n \n “(ii)  the decedent was, on such date of enactment, under a mental disability to change the disposition of his property and did not regain his competence to dispose of such property before the date of his death. \n \n\n The preceding sentence shall not apply if such will (or revocable trust) is amended at any time after such date of enactment in any respect which will increase the amount of the interest which so passes or alters the terms of the transfer by which the interest so passes. \n \n \n “(2)   Subsection  (b).— The amendments made by subsection (b) [amending  section 2523 of this title ] shall apply to gifts made after the date of the enactment of this Act [ Oct. 24, 1992 ].”\nAmendment by section 11701( l )(1) of  Pub. L. 101–508  effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989,  Pub. L. 101–239, title VII , to which such amendment relates, see  section 11701(n) of Pub. L. 101–508 , set out as a note under  section 42 of this title .\nAmendment by  section 11702(g)(5) of Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nPub. L. 101–239, title VII, §\u202f7815(d)(4)(B) ,  Dec. 19, 1989 ,  103 Stat. 2415 , provided that:  “In the case of the estate of a decedent dying before the date of the enactment of this Act [ Dec. 19, 1989 ], the period during which the transfer (or irrevocable assignment) referred to in section 2056(d)(2)(B) of the Internal Revenue Code of 1986 (as amended by subparagraph (A)) may be made shall not expire before the date 1 year after such date of enactment.”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title V, §\u202f5033(d)(1) ,  Nov. 10, 1988 ,  102 Stat. 3673 , provided that:  “The amendments made by subsections (a) and (c) [enacting  section 2056A of this title  and amending this section and  section 2106 of this title ] shall apply to estates of the decedents dying after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nPub. L. 100–647, title VI, §\u202f6152(c) ,  Nov. 10, 1988 ,  102 Stat. 3725 , provided that: \n “(1)   In general .— Except as otherwise provided in this subsection— “(A)  the amendment made by subsection (a) [amending this section] shall apply with respect to decedents dying after  December 31, 1981 , and \n \n “(B)  the amendment made by subsection (b) [amending  section 2523 of this title ] shall apply to transfers after  December 31, 1981 . \n \n \n “(2)   Not to apply to extent inconsistent with prior return .— In the case of any estate or gift tax return filed before the date of the enactment of this Act [ Nov. 10, 1988 ], the amendments made by this section [amending this section and  section 2523 of this title ] shall not apply to the extent such amendments would be inconsistent with the treatment of the annuity on such return unless the executor or donor (as the case may be) otherwise elects under this paragraph before the day 2 years after the date of the enactment of this Act. \n \n “(3)   Extension of time for election out .— The time for making an election under section 2056(b)(7)(C)(ii) or 2523(f)(6)(B) of the 1986 Code (as added by this subsection) shall not expire before the day 2 years after the date of the enactment of this Act (and, if such election is made within the time permitted under this paragraph, the requirement of such section 2056(b)(7)(C)(ii) that it be made on the return shall not apply).”\nAmendment by  Pub. L. 98–369  effective as if included in the amendment made by section 403 of the Economic Recovery Tax Act of 1981 [ Pub. L. 97–34 , see Effective Date of 1981 Amendment note below], see  section 1027(c) of Pub. L. 98–369 , set out as a note under  section 2053 of this title .\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title IV, §\u202f403(e) ,  Aug. 13, 1981 ,  95 Stat. 305 , as amended by  Pub. L. 97–448, title I, §\u202f104(a)(10) ,  Jan. 12, 1983 ,  96 Stat. 2381 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as otherwise provided in this subsection, the amendments made by this section [enacting sections 2044 and 2207A of this title, amending this section and sections 691, 2012, 2035, 2040, 2045, 2046, 2519, 2523, 2602, and 6019 of this title, and repealing sections 2515 and 2515A of this title] shall apply to the estates of decedents dying after  December 31, 1981 . \n \n “(2)  The amendments made by paragraphs (1), (2), and (3)(A) of subsection (b) [amending sections 2523 and 6019 of this title], subparagraphs (B) and (C) of subsection (c)(3) [amending  section 6019 of this title  and repealing sections 2515 and 2515A of this title], and paragraphs (2) and (3)(B) of subsection (d), and paragraph (4)(A) of subsection (d) (to the extent related to the tax imposed by chapter 12 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) [enacting sections 2207A and 2519 of this title and amending  section 2523 of this title ] shall apply to gifts made after  December 31, 1981 . \n \n “(3)  If— “(A)  the decedent dies after  December 31, 1981 , \n \n “(B)  by reason of the death of the decedent property passes from the decedent or is acquired from the decedent under a will executed before the date which is 30 days after the date of the enactment of this Act [ Aug. 13, 1981 ], or a trust created before such date, which contains a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by Federal law, \n \n “(C)  the formula referred to in subparagraph (B) was not amended to refer specifically to an unlimited marital deduction at any time after the date which is 30 days after the date of enactment of this Act [ Aug. 13, 1981 ], and before the death of the decedent, and \n \n “(D)  the State does not enact a statute applicable to such estate which construes this type of formula as referring to the marital deduction allowable by Federal law as amended by subsection (a), \n \n\n then the amendment made by subsection (a) shall not apply to the estate of such decedent.”\nPub. L. 95–600, title VII, §\u202f702(g)(3) ,  Nov. 6, 1978 ,  92 Stat. 2930 , provided that:  “The amendment made by this subsection [amending this section] shall apply to the estates of decedents dying after  December 31, 1976 .”\nAmendment by  section 1902(a)(12)(A) of Pub. L. 94–455  applicable to estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nPub. L. 94–455, title XX, §\u202f2002(d)(1) ,  Oct. 4, 1976 ,  90 Stat. 1856 , provided that: \n “(1) (A)  Except as provided in subparagraph (B), the amendment made by subsection (a) [amending this section] shall apply with respect to the estates of decedents dying after  December 31, 1976 . \n \n “(B)  If— “(i)  the decedent dies after  December 31, 1976 , and before  January 1, 1979 , \n \n “(ii)  by reason of the death of the decedent property passes from the decedent or is acquired from the decedent under a will executed before  January 1, 1977 , or a trust created before such date, which contains a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by Federal law, \n \n “(iii)  the formula referred to in clause (ii) was not amended at any time after  December 31, 1976 , and before the death of the decedent, and \n \n “(iv)  the State does not enact a statute applicable to such estate which construes this type of formula as referring to the marital deduction allowable by Federal law as amended by subsection (a), \n \n\n then the amendment made by subsection (a) shall not apply to the estate of such decedent.”\nAmendment by section 2009(b)(4)(D), (E) of  Pub. L. 94–455  applicable with respect to transfers creating an interest in person disclaiming made after  Dec. 31, 1976 , see  section 2009(e)(2) of Pub. L. 94–455 , set out as an Effective Date note under  section 2518 of this title .\nPub. L. 89–621, §\u202f1(b) ,  Oct. 4, 1966 ,  80 Stat. 872 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to estates of decedents dying on or after the date of the enactment of this Act [ Oct. 4, 1966 ].”\nPub. L. 101–508, title XI, §\u202f11701 ( l )(2),  Nov. 5, 1990 ,  104 Stat. 1388–513 , provided that:  “The period during which a proceeding may be commenced under section 2056(d)(5)(A)(ii) of the Internal Revenue Code of 1986 (as redesignated by paragraph (1)) shall not expire before the date 6 months after the date of the enactment of this Act [ Nov. 5, 1990 ].”\nPub. L. 101–239, title VII, §\u202f7815(d)(14) ,  Dec. 19, 1989 ,  103 Stat. 2418 , provided that:  “In the case of the estate of, or gift by, an individual who was not a citizen or resident of the United States but was a resident of a foreign country with which the United States has a tax treaty with respect to estate, inheritance, or gift taxes, the amendments made by section 5033 of the 1988 Act [ Pub. L. 100–647 , enacting  section 2056A of this title  and amending this section and sections 2106 and 2523 of this title] shall not apply to the extent such amendments would be inconsistent with the provisions of such treaty relating to estate, inheritance, or gift tax marital deductions. In the case of the estate of an individual dying before the date 3 years after the date of the enactment of this Act [ Dec. 19, 1989 ], or a gift by an individual before the date 3 years after the date of the enactment of this Act, the requirement of the preceding sentence that the individual not be a citizen or resident of the United States shall not apply.”\nPub. L. 89–621, §\u202f1(c) ,  Oct. 4, 1966 ,  80 Stat. 872 , provided that in the case of a decedent dying before  Oct. 4, 1966 , for which the date prescribed for filing estate tax return was on or after  Jan. 1, 1965 , and as a result of a disclaimer, the surviving spouse became entitled to receive such interest, then such interest was to be considered as having passed from the decedent to the surviving spouse under certain conditions, with a limit on the amount of deductions allowed.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'If the tax imposed on the estate of the decedent under section 2001 is not finally determined before the taxable event, the amount of the tax imposed by paragraph (1) on such event shall be determined by using the highest rate of tax in effect under section 2001 as of the date of the decedent’s death.\nNo tax shall be imposed by paragraph (1)(A) on any distribution of income to the surviving spouse.\nNo tax shall be imposed by paragraph (1)(A) on any distribution to the surviving spouse on account of hardship.\nIf any qualified domestic trust ceases to meet the requirements of paragraphs (1) and (2) of subsection (a), the tax imposed by paragraph (1) shall apply as if the surviving spouse died on the date of such cessation.\nThe estate tax imposed by paragraph (1)(A) shall be due and payable on the 15th day of the 4th month following the calendar year in which the taxable event occurs; except that the estate tax imposed by paragraph (1)(A) on distributions during the calendar year in which the surviving spouse dies shall be due and payable not later than the date on which the estate tax imposed by paragraph (1)(B) is due and payable.\nThe estate tax imposed by paragraph (1)(B) shall be due and payable on the date 9 months after the date of such death.\nEach trustee shall be personally liable for the amount of the tax imposed by paragraph (1). Rules similar to the rules of section 2204 shall apply for purposes of the preceding sentence.\nFor purposes of section 2056(d), any tax paid under paragraph (1) shall be treated as a tax paid under section 2001 with respect to the estate of the decedent.\nFor purposes of section 6324, any tax imposed by paragraph (1) shall be treated as an estate tax imposed under this chapter with respect to a decedent dying on the date of the taxable event (and the property involved shall be treated as the gross estate of such decedent).\nThe term “taxable event” means the event resulting in tax being imposed under paragraph (1).\nIf any property remaining in the qualified domestic trust on the date of the death of the surviving spouse is includible in the gross estate of such spouse for purposes of this chapter (or would be includible if such spouse were a citizen or resident of the United States), any benefit which is allowable (or would be allowable if such spouse were a citizen or resident of the United States) with respect to such property to the estate of such spouse under section 2014, 2032, 2032A, 2055, 2056, 2058, or 6166 shall be allowed for purposes of the tax imposed by paragraph (1)(B).\nIf the estate of the surviving spouse meets the requirements of section 303 with respect to any property described in subparagraph (A), for purposes of section 303, the tax imposed by paragraph (1)(B) with respect to such property shall be treated as a Federal estate tax payable with respect to the estate of the surviving spouse.\nThe provisions of section 6161(a)(2) shall apply with respect to the tax imposed by paragraph (1)(B), and the reference in such section to the executor shall be treated as a reference to the trustees of the trust.\nFor purposes of this subsection, if any portion of the tax imposed by paragraph (1)(A) with respect to any distribution is paid out of the trust, an amount equal to the portion so paid shall be treated as a distribution described in paragraph (1)(A).\nFor purposes of section 1015, any distribution on which tax is imposed by paragraph (1)(A) shall be treated as a transfer by gift, and any tax paid under paragraph (1)(A) shall be treated as a gift tax.\nAny interest in a qualified domestic trust shall not be treated as failing to meet the requirements of paragraph (5) or (7) of section 2056(b) merely by reason of any provision of the trust instrument permitting the withholding from any distribution of an amount to pay the tax imposed by paragraph (1) on such distribution.\nNo tax shall be imposed by paragraph (1) on any distribution to the surviving spouse to the extent such distribution is to reimburse such surviving spouse for any tax imposed by subtitle A on any item of income of the trust to which such surviving spouse is not entitled under the terms of the trust.\nThe term “property” includes an interest in property.\nExcept as provided in regulations, the term “income” has the meaning given to such term by section 643(b).\nTo the extent provided in regulations prescribed by the Secretary, the term “trust” includes other arrangements which have substantially the same effect as a trust.\nAn election under this section with respect to any trust shall be made by the executor on the return of the tax imposed by section 2001. Such an election, once made, shall be irrevocable. No election may be made under this section on any return if such return is filed more than one year after the time prescribed by law (including extensions) for filing such return.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations under which there may be treated as a qualified domestic trust any annuity or other payment which is includible in the decedent’s gross estate and is by its terms payable for life or a term of years.\n2001—Subsec. (b)(10)(A).  Pub. L. 107–16  struck out “2011,” before “2014,” and inserted “2058,” after “2056,”.\n1997—Subsec. (a)(1)(A).  Pub. L. 105–34, §\u202f1314(a) , inserted “except as provided in regulations prescribed by the Secretary,” before “requires”.\nSubsec. (c)(3).  Pub. L. 105–34, §\u202f1312(a) , added par. (3).\n1990—Subsec. (a)(1).  Pub. L. 101–508, §\u202f11702(g)(2)(A) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the trust instrument requires that at least 1 trustee of the trust be an individual citizen of the United States or a domestic corporation and that no distribution from the trust may be made without the approval of such a trustee,”.\nSubsec. (b)(2)(B)(ii).  Pub. L. 101–508, §\u202f11704(a)(15) , substituted “therefor” for “therefore” in concluding provisions.\nSubsec. (b)(10)(A).  Pub. L. 101–508, §\u202f11702(g)(4) , substituted “section 2011, 2014, 2032” for “section 2032”.\nSubsec. (b)(14), (15).  Pub. L. 101–508, §\u202f11702(g)(2)(B) , added pars. (14) and (15).\nSubsec. (d).  Pub. L. 101–508, §\u202f11702(g)(3)(A) , inserted at end “No election may be made under this section on any return if such return is filed more than one year after the time prescribed by law (including extensions) for filing such return.”\n1989—Subsec. (a)(1).  Pub. L. 101–239, §\u202f7815(d)(7)(A)(i) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the trust instrument requires that all trustees of the trust be individual citizens of the United States or domestic corporations,”.\nSubsec. (a)(2) to (4).  Pub. L. 101–239, §\u202f7815(d)(7)(A)(ii) , redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: “the surviving spouse of the decedent is entitled to all the income from the property in such trust, payable annually or at more frequent intervals,”.\nSubsec. (b)(1)(A).  Pub. L. 101–239, §\u202f7815(d)(7)(C) , struck out “other than a distribution of income required under subsection (a)(2)” after “qualified domestic trust”.\nSubsec. (b)(2)(B)(ii).  Pub. L. 101–239, §\u202f7815(d)(11) , inserted “(with interest)” after “credit or refund”.\nSubsec. (b)(2)(C).  Pub. L. 101–239, §\u202f7815(d)(12) , added subpar. (C).\nSubsec. (b)(3).  Pub. L. 101–239, §\u202f7815(d)(7)(B) , added par. (3). Former par. (3) redesignated (4).\nSubsec. (b)(4).  Pub. L. 101–239, §\u202f7815(d)(7)(D) , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “If any person other than an individual citizen of the United States or a domestic corporation becomes a trustee of a qualified domestic trust (or such trust ceases to meet the requirements of subsection (a)(3)), the tax imposed by paragraph (1) shall apply as if the surviving spouse died on the date on which such person became such a trustee or the date of such cessation, as the case may be.”\nPub. L. 101–239, §\u202f7815(d)(7)(B) , redesignated par. (3) as (4). Former par. (4) redesignated (5).\nSubsec. (b)(5).  Pub. L. 101–239, §\u202f7815(d)(15) , amended par. (5) generally. Prior to amendment, par. (5) read as follows: “The estate tax imposed by paragraph (1) shall be due and payable on the 15th day of the 4th month following the calendar year in which the taxable event occurs.”\nPub. L. 101–239, §\u202f7815(d)(7)(B) , redesignated par. (4) as (5). Former par. (5) redesignated (6).\nSubsec. (b)(6) to (9).  Pub. L. 101–239, §\u202f7815(d)(7)(B) , redesignated pars. (5) to (8) as (6) to (9), respectively.\nSubsec. (b)(10) to (13).  Pub. L. 101–239, §\u202f7815(d)(9) , added pars. (10) to (13).\nSubsec. (c)(2).  Pub. L. 101–239, §\u202f7815(d)(10) , substituted “Except as provided in regulations, the term” for “The term”.\nSubsec. (e).  Pub. L. 101–239, §\u202f7815(d)(13) , added subsec. (e).\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nPub. L. 105–34, title XIII, §\u202f1312(b) ,  Aug. 5, 1997 ,  111 Stat. 1045 , provided that:  “The amendment made by this section [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nPub. L. 105–34, title XIII, §\u202f1314(b) ,  Aug. 5, 1997 ,  111 Stat. 1045 , provided that:  “The amendment made by this section [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by section 11702(g)(2), (4) of  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nPub. L. 101–508, title XI, §\u202f11702(g)(3)(B) ,  Nov. 5, 1990 ,  104 Stat. 1388–516 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall not apply to any election made before the date 6 months after the date of the enactment of this Act [ Nov. 5, 1990 ].”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nSection applicable to estates of decedents dying after  Nov. 10, 1988 , see  section 5033(d)(1) of Pub. L. 100–647 , set out as an Effective Date of 1988 Amendment note under  section 2056 of this title .\nPub. L. 105–34, title XIII, §\u202f1303 ,  Aug. 5, 1997 ,  111 Stat. 1039 , provided that: \n “(a)   General Rule .— In the case of any trust created under an instrument executed before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ], such trust shall be treated as meeting the requirements of paragraph (1) of section 2056A(a) of the Internal Revenue Code of 1986 if the trust instrument requires that all trustees of the trust be individual citizens of the United States or domestic corporations. \n \n “(b)   Effective Date .— The provisions of subsection (a) shall take effect as if included in the provisions of section 11702(g) of the Revenue Reconciliation Act of 1990 [ Pub. L. 101–508 ].”\nFor provisions directing that in the case of the estate of, or gift by, an individual who was not a citizen or resident of the United States but was a resident of a foreign country with which the United States has a tax treaty with respect to estate, inheritance, or gift taxes, this section shall not apply to the extent such section would be inconsistent with the provisions of such treaty relating to estate, inheritance, or gift tax marital deductions, but that in the case of the estate of an individual dying before the date 3 years after  Dec. 19, 1989 , or a gift by an individual before the date 3 years after  Dec. 19, 1989 , the requirement of the preceding provision that the individual not be a citizen or resident of the United States shall not apply, see  section 7815(d)(14) of Pub. L. 101–239 , set out as a note under  section 2056 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'Section, added  Pub. L. 105–34, title V, §\u202f502(a) ,  Aug. 5, 1997 ,  111 Stat. 847 , §\u202f2033A; renumbered §\u202f2057 and amended  Pub. L. 105–206, title VI, §\u202f6007(b)(1)(A) –(D), (2)–(7),  July 22, 1998 ,  112 Stat. 807–809 ;  Pub. L. 107–16, title V, §\u202f521(d) ,  June 7, 2001 ,  115 Stat. 72 ;  Pub. L. 108–311, title II, §\u202f207(23) ,  Oct. 4, 2004 ,  118 Stat. 1178 , related to deduction for qualified family-owned business interests of a decedent.\nA prior section 2057, added  Pub. L. 99–514, title XI, §\u202f1172(a) ,  Oct. 22, 1986 ,  100 Stat. 2513 ; amended  Pub. L. 100–203, title X , §§\u202f10411(a), 10412(a),  Dec. 22, 1987 ,  101 Stat. 1330–432 , 1330–433;  Pub. L. 100–647, title I, §\u202f1011B(g)(3) ,  Nov. 10, 1988 ,  102 Stat. 3490 , related to sales of employer securities to employee stock ownership plans or worker-owned cooperatives, prior to repeal by  Pub. L. 101–239, title VII, §\u202f7304(a)(1) , (3),  Dec. 19, 1989 ,  103 Stat. 2352 , 2353, applicable to estates of decedents dying after  Dec. 19, 1989 .\nAnother prior section 2057, added  Pub. L. 94–455, title XX, §\u202f2007(a) ,  Oct. 4, 1976 ,  90 Stat. 1890 ; amended  Pub. L. 95–600, title VII, §\u202f702 ( l )(1), (2),  Nov. 6, 1978 ,  92 Stat. 2934 , 2935, related to bequests, etc., to certain minor children, prior to repeal by  Pub. L. 97–34, title IV, §\u202f427(a) , (c),  Aug. 13, 1981 ,  95 Stat. 3181 , applicable to estates of decedents dying after  Dec. 31, 1981 .\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': 'TAXABLE ESTATE'},
  'content': 'For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate the amount of any estate, inheritance, legacy, or succession taxes actually paid to any State or the District of Columbia, in respect of any property included in the gross estate (not including any such taxes paid with respect to the estate of a person other than the decedent).\nSection applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as an Effective Date of 2001 Amendment note under  section 2012 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Except as provided in section 2107, a tax is hereby imposed on the transfer of the taxable estate (determined as provided in section 2106) of every decedent nonresident not a citizen of the United States.\nFor purposes of this section, the term “adjusted taxable gifts” means the total amount of the taxable gifts (within the meaning of section 2503 as modified by section 2511) made by the decedent after  December 31, 1976 , other than gifts which are includible in the gross estate of the decedent.\nFor purposes of this section, the rules of section 2001(d) shall apply.\n2002—Subsec. (b).  Pub. L. 107–147  struck out concluding provisions which read as follows: “For purposes of the preceding sentence, there shall be appropriate adjustments in the application of section 2001(c)(2) to reflect the difference between the amount of the credit provided under section 2102(c) and the amount of the credit provided under section 2010.”\n1993—Subsec. (b).  Pub. L. 103–66  substituted “section 2001(c)(2)” for “section 2001(c)(3)” in last sentence.\n1989—Subsec. (b).  Pub. L. 101–239  inserted at end “For purposes of the preceding sentence, there shall be appropriate adjustments in the application of section 2001(c)(3) to reflect the difference between the amount of the credit provided under section 2102(c) and the amount of the credit provided under section 2010.”\n1988—Subsec. (b).  Pub. L. 100–647, §\u202f5032(a) , substituted “a tentative tax computed under section 2001(c)” for “a tentative tax computed in accordance with the rate schedule set forth in subsection (d)” in pars. (1) and (2).\nSubsec. (d).  Pub. L. 100–647, §\u202f5032(c) , struck out subsec. (d) which provided a rate schedule.\n1976— Pub. L. 94–455  redesignated existing provisions as (a) to (d), inserted provisions for adjustments for taxable gifts, revised the tax rate schedule, and struck out provisions relating to property held by Alien Property Custodian.\n1966—Subsec. (a).  Pub. L. 89–809  substituted table to be used in computing the tax imposed on transfer of taxable estate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States for provisions sending taxpayer to table in section 2001 for computation of tax imposed.\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  Pub. L. 103–66  applicable in the case of decedents dying and gifts made after  Dec. 31, 1992 , see  section 13208(c) of Pub. L. 103–66 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title V, §\u202f5032(d) ,  Nov. 10, 1988 ,  102 Stat. 3670 , provided that:  “The amendments made by this section [amending this section and  section 2102 of this title ] shall apply to the estates of decedents dying after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nPub. L. 89–809, title I, §\u202f108(i) ,  Nov. 13, 1966 ,  80 Stat. 1574 , provided that:  “The amendments made by this section [amending this section and sections 2102, 2104, 2105, 2106, and 6018 of this title and enacting sections 2107 and 2108 of this title] shall apply with respect to estates of decedents dying after the date of the enactment of this Act [ Nov. 13, 1966 ].”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'The tax imposed by section 2101 shall be credited with the amounts determined in accordance with sections 2012 and 2013 (relating to gift tax and tax on prior transfers).\nA credit of $13,000 shall be allowed against the tax imposed by section 2101.\nTo the extent required under any treaty obligation of the United States, the credit allowed under this subsection shall be equal to the amount which bears the same ratio to the applicable credit amount in effect under section 2010(c) for the calendar year which includes the date of death as the value of the part of the decedent’s gross estate which at the time of his death is situated in the United States bears to the value of his entire gross estate wherever situated. For purposes of the preceding sentence, property shall not be treated as situated in the United States if such property is exempt from the tax imposed by this subchapter under any treaty obligation of the United States.\nIf a credit has been allowed under section 2505 with respect to any gift made by the decedent, each dollar amount contained in paragraph (1) or (2) or subparagraph (A) of this paragraph (whichever applies) shall be reduced by the amount so allowed.\nThe credit allowed under this subsection shall not exceed the amount of the tax imposed by section 2101.\nFor purposes of subsection (a), sections 2012 and 2013 shall be applied as if the credit allowed under this subsection were allowed under section 2010.\n2001—Subsec. (a).  Pub. L. 107–16, §\u202f532(c)(7)(A) , reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, text read as follows: “The tax imposed by section 2101 shall be credited with the amounts determined in accordance with sections 2011 to 2013, inclusive (relating to State death taxes, gift tax, and tax on prior transfers), subject to the special limitation provided in subsection (b).”\nSubsec. (b).  Pub. L. 107–16, §\u202f532(c)(7)(B) , redesignated subsec. (c) as (b) and struck out heading and text of former subsec. (b). Text read as follows: “The maximum credit allowed under section 2011 against the tax imposed by section 2101 for State death taxes paid shall be an amount which bears the same ratio to the credit computed as provided in section 2011(b) as the value of the property, as determined for purposes of this chapter, upon which State death taxes were paid and which is included in the gross estate under section 2103 bears to the value of the total gross estate under section 2103. For purposes of this subsection, the term ‘State death taxes’ means the taxes described in section 2011(a).”\nSubsec. (b)(5).  Pub. L. 107–16, §\u202f532(c)(7)(C) , substituted “2012 and 2013” for “2011 to 2013, inclusive,”.\nSubsec. (c).  Pub. L. 107–16, §\u202f532(c)(7)(B) , redesignated subsec. (c) as (b).\n1997—Subsec. (c)(3)(A).  Pub. L. 105–34  substituted “the applicable credit amount in effect under section 2010(c) for the calendar year which includes the date of death” for “$192,800”.\n1996—Subsec. (c)(3)(A).  Pub. L. 104–188  inserted at end “For purposes of the preceding sentence, property shall not be treated as situated in the United States if such property is exempt from the tax imposed by this subchapter under any treaty obligation of the United States.”\n1988—Subsec. (c)(1).  Pub. L. 100–647, §\u202f5032(b)(1)(A) , substituted “$13,000” for “$3,600”.\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f5032(b)(1) , substituted “$13,000” for “$3,600” in subpar. (A) and “$46,800” for “$15,075” in subpar. (B).\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f5032(b)(2) , amended par. (3) generally, substituting provision relating to special rules for coordination with treaties and with gift tax unified tax credit for provision relating to a phase-in of the par. (2)(B) amount for decedents dying during 1977, 1978, 1979, and 1980.\n1976—Subsec. (c).  Pub. L. 94–455  added subsec. (c).\n1966— Pub. L. 89–809  redesignated existing provisions as subsec. (a), inserted reference to special limitation provided in subsec. (b), and added subsec. (b).\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying, and gifts made, after  Dec. 31, 1997 , see  section 501(f) of Pub. L. 105–34 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 100–647  applicable to estates of decedents dying after  Nov. 10, 1988 , see  section 5032(d) of Pub. L. 100–647 , set out as a note under  section 2101 of this title .\nAmendment by  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 108(i) of Pub. L. 89–809 , set out as a note under  section 2101 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'For the purpose of the tax imposed by section 2101, the value of the gross estate of every decedent nonresident not a citizen of the United States shall be that part of his gross estate (determined as provided in section 2031) which at the time of his death is situated in the United States.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'For purposes of this subchapter shares of stock owned and held by a nonresident not a citizen of the United States shall be deemed property within the United States only if issued by a domestic corporation.\nFor purposes of this subchapter, any property of which the decedent has made a transfer, by trust or otherwise, within the meaning of sections 2035 to 2038, inclusive, shall be deemed to be situated in the United States, if so situated either at the time of the transfer or at the time of the decedent’s death.\n2014—Subsec. (c).  Pub. L. 113–295  substituted “Deposits” for “With respect to estates of decedents dying after  December 31, 1969 , deposits” in concluding provisions.\n2010—Subsec. (c).  Pub. L. 111–226 , in concluding provisions, struck out before period at end “or to a debt obligation of a domestic corporation if any interest on such obligation, were such interest received by the decedent at the time of his death, would be treated by reason of section 861(a)(1)(A) as income from sources without the United States”.\n1996—Subsec. (c).  Pub. L. 104–188  substituted “section 861(a)(1)(A)” for “subparagraph (A), (C), or (D) of section 861(a)(1)” in concluding provisions.\n1988—Subsec. (c).  Pub. L. 100–647  substituted “subparagraph (A), (C), or (D) of section 861(a)(1)” for “section 861(a)(1)(B), section 861(a)(1)(G), or section 861(a)(1)(H)”.\n1976—Subsec. (b).  Pub. L. 94–455  substituted “and transfers within 3 years of death” for “and transfers in contemplation of death” after “Revocable transfers”.\n1975—Subsec. (c).  Pub. L. 93–625  inserted reference to  section 861(a)(1)(H) of this title  in last sentence.\n1973—Subsec. (c).  Pub. L. 93–17  made subsec. (c) inapplicable to debt obligations where interest on such obligations is treated as income from sources without the United States by reason of  section 861(a)(1)(G) of this title .\n1969—Subsec. (c).  Pub. L. 91–172  substituted “ December 31, 1969 ” for “ December 31, 1972 ” in provisions deeming deposit with a domestic branch of a foreign corporation if such branch is engaged in the commercial banking business to be property within the United States.\n1966—Subsec. (c).  Pub. L. 89–809  added subsec. (c).\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–226  applicable to taxable years beginning after  Dec. 31, 2010 , with certain exceptions, see  section 217(d) of Pub. L. 111–226 , set out as a note under  section 861 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 94–455  not applicable to transfers made before  Jan. 1, 1977 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 93–625  applicable with respect to estates of decedents dying after  Jan. 3, 1975 , see  section 9(c) of Pub. L. 93–625 , set out as a note under  section 861 of this title .\nPub. L. 93–17, §\u202f3(a)(2) ,  Apr. 10, 1973 ,  87 Stat. 12 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply with respect to estates of decedents dying after  December 31, 1972 , except that in the case of the assumption of a debt obligation of a foreign corporation which is treated as issued under section 4912(c)(2) after  December 31, 1972 , and before  January 1, 1974 , the amendment made by paragraph (1) [amending this section] shall apply with respect to estates of decedents dying after  December 31, 1973 .”\nAmendment by  Pub. L. 89–809  applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 108(i) of Pub. L. 89–809 , set out as a note under  section 2101 of this title .\nPub. L. 93–17, §\u202f1(a) ,  Apr. 10, 1973 ,  87 Stat. 12 , provided that:  “This Act [enacting sections 4922 and 6689 of this title, amending this section and sections 4911, 4912, 4914, 4915, 4916, 4918, 4919, 4920, and 6611 of this title, and enacting provisions set out as notes under this section] may be cited as the ‘Interest Equalization Tax Extension Act of 1973’.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'For purposes of this subchapter, the amount receivable as insurance on the life of a nonresident not a citizen of the United States shall not be deemed property within the United States.\nFor purposes of this subchapter, stock in a regulated investment company (as defined in section 851) owned by a nonresident not a citizen of the United States shall not be deemed property within the United States in the proportion that, at the end of the quarter of such investment company’s taxable year immediately preceding a decedent’s date of death (or at such other time as the Secretary may designate in regulations), the assets of the investment company that were qualifying assets with respect to the decedent bore to the total assets of the investment company.\nThis subsection shall not apply to estates of decedents dying after  December 31, 2011 .\n2010—Subsec. (d)(3).  Pub. L. 111–312  substituted “ December 31, 2011 ” for “ December 31, 2009 ”.\n2008—Subsec. (d)(3).  Pub. L. 110–343  substituted “ December 31, 2009 ” for “ December 31, 2007 ”.\n2004—Subsec. (d).  Pub. L. 108–357  added subsec. (d).\n1997—Subsec. (b)(4).  Pub. L. 105–34  added par. (4).\n1993—Subsec. (b).  Pub. L. 103–66  substituted “this subchapter, the following shall not be deemed property within the United States” for “this subchapter” in introductory provisions, added par. (3) and concluding provisions, and struck out former par. (3) and concluding provisions which read as follows:\n“(3) debt obligations, if, without regard to whether a statement meeting the requirements of section 871(h)(4) has been received, any interest thereon would be eligible for the exemption from tax under section 871(h)(1) were such interest received by the decedent at the time of his death,\nshall not be deemed property within the United States.”\n1988—Subsec. (b)(1).  Pub. L. 100–647  substituted “section 871(i)(3), if any interest thereon would not be subject to tax by reason of section 871(i)(1)” for “section 861(c), if any interest thereon would be treated by reason of section 861(a)(1)(A) as income from sources without the United States”.\n1984—Subsec. (b).  Pub. L. 98–369 , amended subsec. (b) generally, substituting “Bank deposits and certain other debt obligations” for “Certain bank deposits, etc.” in heading and “,\u2000if any interest thereon would be treated by reason of section 861(a)(1)(A) as income from sources without the United States were such interest received by the decedent at the time of his death,” for “if any interest thereon, were such interest received by the decedent at the time of his death, would be treated by reason of section 861(a)(1)(A) as income from sources without the United States, and” in par. (1), inserting “and” after “business,” in par. (2), and adding par. (3).\n1966—Subsec. (b).  Pub. L. 89–809  substituted amounts described in section 861(c) if any interest thereon, were such interest received by the decedent at the time of his death, would be treated by reason of section 861(a)(1)(A) as income from sources without the United States, and deposits with a foreign branch of a domestic corporation or domestic partnership, if such branch is engaged in the commercial banking business for moneys deposited with any person carrying on the banking business by or for a nonresident not a citizen of the United States who was not engaged in business in the United States at the time of his death as the property not to be deemed property within the United States for purposes of this subchapter.\nPub. L. 111–312, title VII, §\u202f726(b) ,  Dec. 17, 2010 ,  124 Stat. 3317 , provided that:  “The amendment made by this section [amending this section] shall apply to estates of decedents dying after  December 31, 2009 .”\nPub. L. 110–343, div. C, title II, §\u202f207(b) ,  Oct. 3, 2008 ,  122 Stat. 3865 , provided that:  “The amendment made by this section [amending this section] shall apply to decedents dying after  December 31, 2007 .”\nAmendment by  Pub. L. 108–357  applicable to estates of decedents dying after  Dec. 31, 2004 , see  section 411(d)(2) of Pub. L. 108–357 , set out as a note under  section 871 of this title .\nPub. L. 105–34, title XIII, §\u202f1304(b) ,  Aug. 5, 1997 ,  111 Stat. 1040 , provided that:  “The amendment made by this section [amending this section] shall apply to estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nAmendment by  Pub. L. 103–66  applicable to the estates of decedents dying after  Dec. 31, 1993 , see  section 13237(d) of Pub. L. 103–66 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 98–369  applicable to obligations issued after  July 18, 1984 , with respect to the estates of decedents dying after such date, see  section 127(g)(2) of Pub. L. 98–369 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 108(i) of Pub. L. 89–809 , set out as a note under  section 2101 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'That proportion of the deductions specified in sections 2053 and 2054 (other than the deductions described in the following sentence) which the value of such part bears to the value of his entire gross estate, wherever situated. Any deduction allowable under section 2053 in the case of a claim against the estate which was founded on a promise or agreement but was not contracted for an adequate and full consideration in money or money’s worth shall be allowable under this paragraph to the extent that it would be allowable as a deduction under paragraph (2) if such promise or agreement constituted a bequest.\nProperty includible in the decedent’s gross estate under section 2041 (relating to powers of appointment) received by a donee described in this paragraph shall, for purposes of this paragraph, be considered a bequest of such decedent.\nIf the tax imposed by section 2101, or any estate, succession, legacy, or inheritance taxes, are, either by the terms of the will, by the law of the jurisdiction under which the estate is administered, or by the law of the jurisdiction imposing the particular tax, payable in whole or in part out of the bequests, legacies, or devises otherwise deductible under this paragraph, then the amount deductible under this paragraph shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes.\nThe amount of the deduction under this paragraph for any transfer shall not exceed the value of the transferred property required to be included in the gross estate.\nThe provisions of section 2055(e) shall be applied in the determination of the amount allowable as a deduction under this paragraph.\nThe amount which would be deductible with respect to property situated in the United States at the time of the decedent’s death under the principles of section 2056.\nThe amount which bears the same ratio to the State death taxes as the value of the property, as determined for purposes of this chapter, upon which State death taxes were paid and which is included in the gross estate under section 2103 bears to the value of the total gross estate under section 2103. For purposes of this paragraph, the term “State death taxes” means the taxes described in section 2058(a).\nNo deduction shall be allowed under paragraphs (1) and (2) of subsection (a) in the case of a nonresident not a citizen of the United States unless the executor includes in the return required to be filed under section 6018 the value at the time of his death of that part of the gross estate of such nonresident not situated in the United States.\n2018—Subsec. (a)(4).  Pub. L. 115–141  inserted “section” before “2058(a).”\n2014—Subsec. (a)(4).  Pub. L. 113–295  substituted “2058(a)” for “section 2011(a)”.\n2001—Subsec. (a)(4).  Pub. L. 107–16  added par. (4).\n1989—Subsec. (a)(3).  Pub. L. 101–239  struck out “allowed where spouse is citizen” after “deduction” in heading.\n1988—Subsec. (a)(3).  Pub. L. 100–647  added par. (3).\n1987—Subsec. (a)(2)(A)(ii), (iii).  Pub. L. 100–203  inserted “(or in opposition to)” after “on behalf of”.\n1986—Subsec. (a)(2)(F)(ii).  Pub. L. 99–514  substituted “section 2055(g)” for “section 2055(f)”.\n1983—Subsec. (a)(2)(F).  Pub. L. 97–473  substituted “(i)” and “(ii)” for “(1)” and “(2)”, respectively, and added cl. (iii).\n1976—Subsec. (a)(2)(A)(i).  Pub. L. 94–455, §\u202f1902(a)(12)(A) , struck out “Territory” after “any State”.\nSubsec. (a)(2)(A)(ii).  Pub. L. 94–455, §\u202f1307(d)(1)(B)(iii) , substituted “which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation” for “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation” after “stockholder or individual”.\nSubsec. (a)(2)(A)(iii).  Pub. L. 94–455, §\u202f1307(d)(1)(C) , substituted “such trust, fraternal society, order, or association would not be disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation” for “no substantial part of the activities of such trustee or trustees, or of such fraternal society, order, or association, is carrying on propaganda, or otherwise attempting, to influence legislation” after “children or animals”.\nSubsec. (a)(2)(F).  Pub. L. 94–455, §\u202f1902(a)(5)(A) , substituted “Cross references” for “Other cross references” after “(F)”, in cl. (1) “purposes of deduction under this section” for “purpose of deduction under this paragraph” after “valuation for”, in cl. (2) provision for exemption of certain bequests for benefit of United States and for rules of construction for certain bequests, for provisions of cls. (2) to (11) relating to bequests to; Library of Congress, Post Office Department, Office of Naval Records and Library, National Park Service, Department of State, Department of Justice, payment of tax on bequests of United States obligations, Naval Academy, Naval Academy Museum, and National Archives Trust Fund Board, respectively.\nSubsec. (a)(3).  Pub. L. 94–455, §\u202f2001(c)(1)(F) , struck out par. (3) relating to specific exemption in case of decedents nonresidents not citizens.\nSubsec. (c).  Pub. L. 94–455, §\u202f1902(a)(5)(B) , struck out subsec. (c) relating to treatment of United States bonds in determining gross estate of a decedent who was not engaged in business in the United States at the time of his death.\n1969—Subsec. (a)(2)(A)(ii), (iii).  Pub. L. 91–172, §\u202f201(d)(4)(B) , inserted non-participation and non-intervention in political campaigns as an additional qualification.\nSubsec. (a)(2)(E).  Pub. L. 91–172, §\u202f201(d)(2) , substituted substantive provisions for simple reference to sections 503 and 681 of this title in which such substantive provisions were formerly set out.\n1966—Subsec. (a)(3).  Pub. L. 89–809  substituted “$30,000” for “$2,000” as size of exemption in subpar. (A) and “$30,000” for “$2,000” as item (i) in formula set out in subpar. (B).\n1960—Subsec. (a)(3).  Pub. L. 86–779  designated existing provisions as subpar. (A) and added subpar. (B).\n1958—Subsec. (a)(2)(E).  Pub. L. 85–866  substituted “503” for “504”.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  applicable to estates of decedents dying after  Nov. 10, 1988 , see  section 5033(d)(1) of Pub. L. 100–647 , set out as a note under  section 2056 of this title .\nAmendment by  Pub. L. 100–203  applicable with respect to activities after  Dec. 22, 1987 , see  section 10711(c) of Pub. L. 100–203 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 99–514  applicable to transfers and contributions made after  Dec. 31, 1986 , see  section 1422(e) of Pub. L. 99–514 , set out as a note under  section 2055 of this title .\nFor effective date of amendment by  Pub. L. 97–473 , see  section 204(3) of Pub. L. 97–473 , set out as an Effective Date note under  section 7871 of this title .\nAmendment by section 1902(a)(5), (12)(A) of  Pub. L. 94–455  applicable in the case of estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nAmendment by  section 2001(c)(1)(F) of Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nAmendment by  section 201(d)(2) of Pub. L. 91–172  applicable in the case of decedents dying after  Dec. 31, 1969 , with specified exceptions, see  section 201(g)(4) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAmendment by  section 201(d)(4)(B) of Pub. L. 91–172  applicable to gifts and transfers made after  Dec. 31, 1969 , see  section 201(g)(4) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 108(i) of Pub. L. 89–809 , set out as a note under  section 2101 of this title .\nPub. L. 86–779, §\u202f4(e)(2) ,  Sept. 14, 1960 ,  74 Stat. 1000 , provided that:  “The amendments made by subsections (b) and (c) [enacting  section 2209 of this title  and amending this section] shall apply with respect to estates of decedents dying after the date of the enactment of this Act [ Sept. 14, 1960 ].”\nFor provisions directing that in the case of the estate of, or gift by, an individual who was not a citizen or resident of the United States but was a resident of a foreign country with which the United States has a tax treaty with respect to estate, inheritance, or gift taxes, the amendments made by  section 5033 of Pub. L. 100–647  shall not apply to the extent such amendments would be inconsistent with the provisions of such treaty relating to estate, inheritance, or gift tax marital deductions, but that in the case of the estate of an individual dying before the date 3 years after  Dec. 19, 1989 , or a gift by an individual before the date 3 years after  Dec. 19, 1989 , the requirement of the preceding provision that the individual not be a citizen or resident of the United States shall not apply, see  section 7815(d)(14) of Pub. L. 101–239 , set out as a note under  section 2056 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'A tax computed in accordance with the table contained in section 2001 is hereby imposed on the transfer of the taxable estate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States if the date of death occurs during a taxable year with respect to which the decedent is subject to tax under section 877(b).\nA credit of $13,000 shall be allowed against the tax imposed by subsection (a).\nThe credit allowed under this paragraph shall not exceed the amount of the tax imposed by subsection (a).\nThe tax imposed by subsection (a) shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any foreign country in respect of any property which is included in the gross estate solely by reason of subsection (b).\nIn the case of property which is included in the gross estate solely by reason of subsection (b), such property’s proportionate share is the percentage which the value of such property bears to the total value of all property included in the gross estate solely by reason of subsection (b).\nThe tax imposed by subsection (a) shall be credited with the amounts determined in accordance with subsections (a) and (b) of section 2102. For purposes of subsection (a) of section 2102, sections 2012 and 2013 shall be applied as if the credit allowed under paragraph (1) were allowed under section 2010.\nIf the Secretary establishes that it is reasonable to believe that an individual’s loss of United States citizenship would, but for this section, result in a substantial reduction in the estate, inheritance, legacy, and succession taxes in respect of the transfer of his estate, the burden of proving that such loss of citizenship did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A shall be on the executor of such individual’s estate.\nFor comparable treatment of long-term lawful permanent residents who ceased to be taxed as residents, see section 877(e).\n2004—Subsec. (a).  Pub. L. 108–357  reenacted heading without change and amended text of subsec. (a) generally, substituting provisions relating to imposition of tax on the transfer of the taxable estate of every decedent nonresident not a citizen of the United States if the date of death occurs during a taxable year with respect to which the decedent is subject to tax under section 877(b), for provisions relating to imposition of tax on the transfer of the taxable estate of every decedent nonresident not a citizen of the United States if, within the 10-year period ending with the date of death, such decedent lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes, and provisions describing individuals to be treated as having a principal purpose to avoid taxes.\n2001—Subsec. (c)(3).  Pub. L. 107–16  substituted “2012 and 2013” for “2011 to 2013, inclusive,”.\n1997—Subsec. (c)(2)(B)(i).  Pub. L. 105–34, §\u202f1602(g)(6)(A) , substituted “such foreign country as the value of the property subjected to such taxes by such foreign country and” for “such foreign country in respect of property included in the gross estate as the value of the property”.\nSubsec. (c)(2)(C).  Pub. L. 105–34, §\u202f1602(g)(6)(B) , amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “For purposes of subparagraph (B), a property’s proportionate share is the percentage of the value of the property which is included in the gross estate solely by reason of subsection (b) bears to the total value of the gross estate.”\n1996—Subsec. (a).  Pub. L. 104–191, §\u202f511(e)(1)(A) , substituted “Treatment of expatriates” for “Rate of tax” in heading and amended text generally. Prior to amendment, text read as follows: “A tax computed in accordance with the table contained in section 2001 is hereby imposed on the transfer of the taxable estate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States dying after  November 13, 1966 , if after  March 8, 1965 , and within the 10-year period ending with the date of death such decedent lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A.”\nSubsec. (b)(2).  Pub. L. 104–191, §\u202f511(e)(1)(C) , substituted “more than 50 percent of—” for “more than 50 percent of the total combined voting power of all classes of stock entitled to vote of such foreign corporation,” and added subpars. (A) and (B).\nSubsec. (c)(2), (3).  Pub. L. 104–191, §\u202f511(e)(1)(B) , added par. (2) and redesignated former par. (2) as (3).\nSubsec. (d).  Pub. L. 104–191, §\u202f511(f)(2)(A) , redesignated subsec. (e) as (d) and struck out former subsec. (d) which read as follows:\n“(d)  Exception for Loss of Citizenship for Certain Causes .—Subsection (a) shall not apply to the transfer of the estate of a decedent whose loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended ( 8 U.S.C. 1401(b) , 1482, or 1487).”\nSubsec. (e).  Pub. L. 104–191, §\u202f511(f)(2)(A) , added subsec. (e). Former subsec. (e) redesignated (d).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1902(a)(6) , substituted “ November 13, 1966 ” for “the date of enactment of this section” after “dying after”.\nSubsec. (c).  Pub. L. 94–455, §\u202f2001(c)(1)(E)(ii) , substituted provisions relating to unified credit for “The tax imposed by subsection (a) shall be credited with the amounts determined in accordance with section 2102.”\nSubsec. (e).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  Pub. L. 108–357  applicable to individuals who expatriate after  June 3, 2004 , see  section 804(f) of Pub. L. 108–357 , set out as a note under  section 877 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996,  Pub. L. 104–191 , to which such amendment relates, see  section 1602(i) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 104–191  applicable to individuals losing United States citizenship on or after  Feb. 6, 1995 , and to long-term residents of the United States with respect to whom an event described in section 877(e)(1)(A) or (B) of this title occurs on or after  Feb. 6, 1995 , with special rule for certain individuals who performed an act of expatriation specified in section 1481(a)(1)–(4) of Title 8, Aliens and Nationality, before  Feb. 6, 1995 , see  section 511(g) of Pub. L. 104–191 , set out as a note under  section 877 of this title .\nAmendment by  section 1902(a)(6) of Pub. L. 94–455  applicable in the case of estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nAmendment by  section 2001(c)(1)(E)(ii) of Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .\nSection applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 108(i) of Pub. L. 89–809 , set out as an Effective Date of 1966 Amendment note under  section 2101 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Whenever the President finds that the laws of any foreign country with respect to which the President has made a proclamation under subsection (a) have been modified so that the tax on the transfer of estates of decedents who were citizens of the United States and not residents of such foreign country is no longer more burdensome than the tax imposed by this subchapter on the transfer of estates of decedents who were residents of such foreign country, he shall proclaim that the tax on the transfer of the estate of every decedent who was a resident of such foreign country at the time of his death shall, in the case of decedents dying after the date of such proclamation, be determined under this subchapter without regard to subsection (a).\nNo proclamation shall be issued by the President pursuant to this section unless, at least 30 days prior to such proclamation, he has notified the Senate and the House of Representatives of his intention to issue such proclamation.\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to implement this section.\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1902(a)(6) , substituted “ November 13, 1976 ” for “the date of enactment of this section” after “on or after”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nAmendment by  section 1902(a)(6) of Pub. L. 94–455  applicable in the case of estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nSection applicable with respect to estates of decedents dying after  Nov. 13, 1966 , see  section 108(i) of Pub. L. 89–809 , set out as an Effective Date of 1966 Amendment note under  section 2101 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Unless the executor elects not to have this section apply, in applying sections 2001 and 2101 to the estate of a qualified decedent, the rate schedule set forth in subsection (c) shall be deemed to be the rate schedule set forth in section 2001(c).\nIn the case of an estate to which this section applies, subsection (a) shall not apply in determining the credit under section 2010.\n2003— Pub. L. 108–121, §\u202f110(c)(2)(A) , inserted “,\u2000deaths of astronauts,” after “Forces” in section catchline.\nSubsec. (b)(3).  Pub. L. 108–121, §\u202f110(c)(1) , added par. (3).\n2002— Pub. L. 107–134  amended section catchline and text of section generally, substituting present provisions for provisions which had stated that the additional estate tax as defined in former section 2011(d) should not apply to the transfer of the taxable estate of a citizen or resident of the United States dying while in active service as a member of the Armed Forces of the United States, if such decedent was killed in action while serving in a combat zone, as determined under section 112(c), or died as a result of wounds, disease, or injury suffered, while serving in a combat zone (as determined under section 112(c)), and while in line of duty, by reason of a hazard to which he was subjected as an incident of such service.\n2001— Pub. L. 107–16, §\u202f532(c)(9)(B) , which added concluding provisions which read as follows: “For purposes of this section, the additional estate tax is the difference between the tax imposed by section 2001 or 2101 and the amount equal to 125 percent of the maximum credit provided by section 2011(b), as in effect before its repeal by the Economic Growth and Tax Relief Reconciliation Act of 2001.”, was repealed by  Pub. L. 107–134, §\u202f103(b)(3) . See Effective Date of 2002 Amendment note below.\nPub. L. 107–16, §\u202f532(c)(9)(A) , which struck out “as defined in section 2011(d)” after “The additional estate tax” in introductory provisions, was repealed by  Pub. L. 107–134, §\u202f103(b)(3) . See Effective Date of 2002 Amendment note below.\n1975— Pub. L. 93–597 , as amended by  Pub. L. 94–455, §\u202f1902(a)(7)(A) , struck out “during an induction period (as defined in section 112(c)(5))” after “resident of the United States dying”, and substituted “Members of the Armed Forces dying in combat zone or by reason of combat-zone-incurred wounds, etc.” for “Members of the Armed Forces dying during an induction period” in section catchline.\nPub. L. 108–121, title I, §\u202f110(c)(3) ,  Nov. 11, 2003 ,  117 Stat. 1343 , provided that:  “The amendments made by this subsection [amending this section] shall apply to estates of decedents dying after  December 31, 2002 .”\nAmendment by  Pub. L. 107–134  applicable to estates of decedents dying on or after  Sept. 11, 2001 , and, in the case of individuals dying as a result of the  Apr. 19, 1995 , terrorist attack, dying on or after  Apr. 19, 1995 , with provisions relating to waiver of limitations, see  section 103(d) of Pub. L. 107–134 , set out as a note under  section 2053 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2004 , see  section 532(d) of Pub. L. 107–16 , set out as a note under  section 2012 of this title .\nPub. L. 94–455, title XIX, §\u202f1902(a)(7)(B) ,  Oct. 4, 1976 ,  90 Stat. 1805 , provided that:  “The amendment made by subsection (A) [amending  section 6(b)(1) of Pub. L. 93–597 ] is effective  July 1, 1973 .”\nPub. L. 93–597, §\u202f6(c) ,  Jan. 2, 1975 ,  88 Stat. 1953 , provided that:  “The amendments made by this section [amending this section and  section 1034 of this title ] shall take effect on  July 1, 1973 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 401 ;  June 25, 1959 ,  Pub. L. 86–70, §\u202f22(a) ,  73 Stat. 146 ;  July 12, 1960 ,  Pub. L. 86–624, §\u202f18(b) ,  74 Stat. 416 , related to the presumption that missionaries duly commissioned and serving under boards of foreign missions are residents of the State or the District of Columbia wherein they resided at the time of their commission and departure for service.\nRepeal applicable to estates of decedents dying after  Oct. 4, 1976 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 2012 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'The term “executor” wherever it is used in this title in connection with the estate tax imposed by this chapter means the executor or administrator of the decedent, or, if there is no executor or administrator appointed, qualified, and acting within the United States, then any person in actual or constructive possession of any property of the decedent.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'If the executor makes written application to the Secretary for determination of the amount of the tax and discharge from personal liability therefor, the Secretary (as soon as possible, and in any event within 9 months after the making of such application, or, if the application is made before the return is filed, then within 9 months after the return is filed, but not after the expiration of the period prescribed for the assessment of the tax in section 6501) shall notify the executor of the amount of the tax. The executor, on payment of the amount of which he is notified (other than any amount the time for payment of which is extended under sections 6161, 6163, or 6166), and on furnishing any bond which may be required for any amount for which the time for payment is extended, shall be discharged from personal liability for any deficiency in tax thereafter found to be due and shall be entitled to a receipt or writing showing such discharge.\nIf a fiduciary (not including a fiduciary in respect of the estate of a nonresident decedent) other than the executor makes written application to the Secretary for determination of the amount of any estate tax for which the fiduciary may be personally liable, and for discharge from personal liability therefor, the Secretary upon the discharge of the executor from personal liability under subsection (a), or upon the expiration of 6 months after the making of such application by the fiduciary, if later, shall notify the fiduciary (1) of the amount of such tax for which it has been determined the fiduciary is liable, or (2) that it has been determined that the fiduciary is not liable for any such tax. Such application shall be accompanied by a copy of the instrument, if any, under which such fiduciary is acting, a description of the property held by the fiduciary, and such other information for purposes of carrying out the provisions of this section as the Secretary may require by regulations. On payment of the amount of such tax for which it has been determined the fiduciary is liable (other than any amount the time for payment of which has been extended under section 6161, 6163, or 6166), and on furnishing any bond which may be required for any amount for which the time for payment has been extended, or on receipt by him of notification of a determination that he is not liable for any such tax, the fiduciary shall be discharged from personal liability for any deficiency in such tax thereafter found to be due and shall be entitled to a receipt or writing evidencing such discharge.\nFor purposes of the second sentence of subsection (a) and the last sentence of subsection (b), an agreement which meets the requirements of section 6324A (relating to special lien for estate tax deferred under section 6166) shall be treated as the furnishing of bond with respect to the amount for which the time for payment has been extended under section 6166.\n1981—Subsecs. (a) to (c).  Pub. L. 97–34, §\u202f422(e)(1) , (3), struck out reference to section 6166A in subsecs. (a) and (b), and two such references in subsec. (c).\n1978—Subsec. (d).  Pub. L. 95–600  added subsec. (d).\n1976—Subsec. (a).  Pub. L. 94–455 , §§\u202f1906(b)(13)(A), 2004(f)(6), substituted “6166 or 6166A” for “or 6166” after “6161, 6163” and struck out “or his delegate” in two places after “Secretary”.\nSubsec. (b).  Pub. L. 94–455 , §§\u202f1902(a)(9), 1906(b)(13)(A), 2004(f)(4), (6), substituted “6166 or 6166A” for “or 6166” after “6161, 6163”, “has been” for “has not been” after “payment of which”, and struck out “or his delegate” after “Secretary”.\nSubsec. (c).  Pub. L. 94–455, §\u202f2004(d)(2) , added subsec. (c).\n1970— Pub. L. 91–614, §\u202f101(d)(1)(A) , substituted “fiduciary” for “executor” in section catchline.\nSubsec. (a).  Pub. L. 91–614 , §§\u202f101(d)(1)(B), (C), (f), designated existing provisions as subsec. (a), inserted “General Rule—” immediately preceding first sentence and permitted a discharge of the executor even where an extension of time has been granted under sections 6161, 6163, or 6166 of this title, where a bond, if required, is provided to assure payment of taxes for which the extension was granted, and substituted “9 months” for “1 year” in two places.\nSubsec. (b).  Pub. L. 91–614, §\u202f101(d)(1)(D) , added subsec. (b).\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 422(f)(1) of Pub. L. 97–34 , set out as a note under  section 6166 of this title .\nPub. L. 95–600, title VII, §\u202f702(p)(2) ,  Nov. 6, 1978 ,  92 Stat. 2937 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply with respect to the estates of decedents dying after  December 31, 1976 .”\nAmendment by  section 1902(a)(9) of Pub. L. 94–455  applicable in the case of estates of decedents dying after  Dec. 31, 1970 , see  section 1902(c)(1) of Pub. L. 94–455 , set out as a note under  section 2012 of this title .\nAmendment by  section 2004(d)(4) of Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2004(g) of Pub. L. 94–455 , set out as a note under  section 6166 of this title .\nAmendment by  section 101(d)(1) of Pub. L. 91–614  applicable with respect to decedents dying after  Dec. 31, 1970 , see  section 101(j) of Pub. L. 91–614 , set out as a note under  section 2032 of this title .\nPub. L. 91–614, title I, §\u202f101(f) ,  Dec. 31, 1970 ,  84 Stat. 1838 , provided that the amendment made by that section is effective with respect to the estates of decedents dying after  Dec. 31, 1973 .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'If the tax or any part thereof is paid by, or collected out of, that part of the estate passing to or in the possession of any person other than the executor in his capacity as such, such person shall be entitled to reimbursement out of any part of the estate still undistributed or by a just and equitable contribution by the persons whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate or whose interest is subject to equal or prior liability for the payment of taxes, debts, or other charges against the estate, it being the purpose and intent of this chapter that so far as is practicable and unless otherwise directed by the will of the decedent the tax shall be paid out of the estate before its distribution.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Unless the decedent directs otherwise in his will, if any part of the gross estate on which tax has been paid consists of proceeds of policies of insurance on the life of the decedent receivable by a beneficiary other than the executor, the executor shall be entitled to recover from such beneficiary such portion of the total tax paid as the proceeds of such policies bear to the taxable estate. If there is more than one such beneficiary, the executor shall be entitled to recover from such beneficiaries in the same ratio. In the case of such proceeds receivable by the surviving spouse of the decedent for which a deduction is allowed under section 2056 (relating to marital deduction), this section shall not apply to such proceeds except as to the amount thereof in excess of the aggregate amount of the marital deductions allowed under such section.\n1976— Pub. L. 94–455  substituted “the taxable estate” for “the sum of the taxable estate and the amount of the exemption allowed in computing the taxable estate, determined under section 2051” after “policies bear to”.\nAmendment by  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Unless the decedent directs otherwise in his will, if any part of the gross estate on which the tax has been paid consists of the value of property included in the gross estate under section 2041, the executor shall be entitled to recover from the person receiving such property by reason of the exercise, nonexercise, or release of a power of appointment such portion of the total tax paid as the value of such property bears to the taxable estate. If there is more than one such person, the executor shall be entitled to recover from such persons in the same ratio. In the case of such property received by the surviving spouse of the decedent for which a deduction is allowed under section 2056 (relating to marital deduction), this section shall not apply to such property except as to the value thereof reduced by an amount equal to the excess of the aggregate amount of the marital deductions allowed under section 2056 over the amount of proceeds of insurance upon the life of the decedent receivable by the surviving spouse for which proceeds a marital deduction is allowed under such section.\n1976— Pub. L. 94–455  substituted “the taxable estate” for “the sum of the taxable estate and the amount of the exemption allowed in computing the taxable estate, determined under section 2052, or section 2106(a), as the case may be” after “property bears to”.\nAmendment by  Pub. L. 94–455  applicable to estates of decedents dying after  Dec. 31, 1976 , see  section 2001(d)(1) of Pub. L. 94–455 , set out as a note under  section 2001 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Paragraph (1) shall not apply with respect to any property to the extent that the decedent in his will (or a revocable trust) specifically indicates an intent to waive any right of recovery under this subchapter with respect to such property.\nFor purposes of this section, if there is more than one person receiving the property, the right of recovery shall be against each such person.\nIn the case of penalties and interest attributable to additional taxes described in subsections (a) and (b), rules similar to subsections (a), (b), and (c) shall apply.\n1997—Subsec. (a)(2).  Pub. L. 105–34  amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply if the decedent otherwise directs by will.”\nPub. L. 105–34, title XIII, §\u202f1302(c) ,  Aug. 5, 1997 ,  111 Stat. 1039 , provided that:  “The amendments made by this section [amending this section and  section 2207B of this title ] shall apply with respect to the estates of decedents dying after the date of the enactment of this Act [ Aug. 5, 1997 ].”\nSection applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 403(e) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 2056 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Paragraph (1) shall not apply with respect to any property to the extent that the decedent in his will (or a revocable trust) specifically indicates an intent to waive any right of recovery under this subchapter with respect to such property.\nFor purposes of this section, if there is more than 1 person receiving the property, the right of recovery shall be against each such person.\nIn the case of penalties and interest attributable to the additional taxes described in subsection (a), rules similar to the rules of subsections (a) and (b) shall apply.\nNo person shall be entitled to recover any amount by reason of this section from a trust to which section 664 applies (determined without regard to this section).\n1997—Subsec. (a)(2).  Pub. L. 105–34  amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply if the decedent otherwise directs in a provision of his will (or a revocable trust) specifically referring to this section.”\n1990—Subsec. (b).  Pub. L. 101–508, §\u202f11601(b)(1)(A) , redesignated former subsec. (c) as (b) and struck out former subsec. (b) which read as follows: “If for any calendar year tax is paid under chapter 12 with respect to any person by reason of property treated as transferred by such person under section 2036(c)(4), such person shall be entitled to recover from the original transferee (as defined in section 2036(c)(4)(C)(ii)) the amount which bears the same ratio to the total tax for such year under chapter 12 as—\n“(1) the value of such property for purposes of chapter 12, bears to\n“(2) the total amount of the taxable gifts for such year.”\nSubsec. (c).  Pub. L. 101–508, §\u202f11601(b)(1) , redesignated subsec. (d) as (c) and substituted “subsection (a)” for “subsections (a) and (b)” and “subsections (a) and (b)” for “subsections (a), (b), and (c)”. Former subsec. (c) redesignated (b).\nSubsecs. (d), (e).  Pub. L. 101–508, §\u202f11601(b)(1)(A) , redesignated subsecs. (d) and (e) as (c) and (d), respectively. Former subsec. (d) redesignated (c).\nAmendment by  Pub. L. 105–34  applicable with respect to estates of decedents dying after  Aug. 5, 1997 , see  section 1302(c) of Pub. L. 105–34 , set out as a note under  section 2207A of this title .\nAmendment by  Pub. L. 101–508  applicable in the case of property transferred after  Dec. 17, 1987 , see  section 11601(c) of Pub. L. 101–508 , set out as a note under  section 2036 of this title .\nSection effective as if included in provisions of Revenue Act of 1987,  Pub. L. 100–203, title X , except that if an amount is included in the gross estate of a decedent under  section 2036 of this title  other than solely by reason of  section 2036(c) of this title , section applicable to such amount only with respect to property transferred after  Nov. 10, 1988 , see section 3031(h)(1), (3) of  Pub. L. 100–647 , set out as an Effective Date of 1988 Amendment note under  section 2036 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'A decedent who was a citizen of the United States and a resident of a possession thereof at the time of his death shall, for purposes of the tax imposed by this chapter, be considered a “citizen” of the United States within the meaning of that term wherever used in this title unless he acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States.\nSection applicable to estates of decedents dying after  Sept. 2, 1958 , see  section 102(d) of Pub. L. 85–866 , set out as an Effective Date of 1958 Amendment note under  section 2014 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'A decedent who was a citizen of the United States and a resident of a possession thereof at the time of his death shall, for purposes of the tax imposed by this chapter, be considered a “nonresident not a citizen of the United States” within the meaning of that term wherever used in this title, but only if such person acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States.\nSection applicable with respect to estates of decedents dying after  Sept. 14, 1960 , see  section 4(e)(2) of Pub. L. 86–779 , set out as an Effective Date of 1960 Amendment note under  section 2106 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'ESTATE TAX',
   'part': ''},
  'content': 'Section, added  Pub. L. 107–16, title V, §\u202f501(a) ,  June 7, 2001 ,  115 Stat. 69 , related to termination of applicability of chapter to estates of decedents dying after  Dec. 31, 2009 .\nA prior section 2210, added  Pub. L. 98–369, div. A, title V, §\u202f544(a) ,  July 18, 1984 ,  98 Stat. 892 ; amended  Pub. L. 99–514, title XVIII , §§\u202f1854(d)(1)(A), (2)–(6), 1899A(37),  Oct. 22, 1986 ,  100 Stat. 2879 , 2880, 2960, related to liability for payment in case of transfer of employer securities to an employee stock ownership plan or a worker-owned cooperative, prior to repeal by  Pub. L. 101–239, title VII, §\u202f7304(b)(1) , (3),  Dec. 19, 1989 ,  103 Stat. 2353 , applicable to estates of decedents dying after  July 12, 1989 .\nRepeal of section applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'A tax, computed as provided in section 2502, is hereby imposed for each calendar year on the transfer of property by gift during such calendar year by any individual resident or nonresident.\nExcept as provided in paragraph (3), paragraph (1) shall not apply to the transfer of intangible property by a nonresident not a citizen of the United States.\nParagraph (2) shall not apply in the case of a donor to whom section 877(b) applies for the taxable year which includes the date of the transfer.\nThe tax imposed by this section solely by reason of this paragraph shall be credited with the amount of any gift tax actually paid to any foreign country in respect of any gift which is taxable under this section solely by reason of this paragraph.\nParagraph (1) shall not apply to the transfer of money or other property to a political organization (within the meaning of section 527(e)(1)) for the use of such organization.\nParagraph (1) shall not apply to the transfer of money or other property to an organization described in paragraph (4), (5), or (6) of section 501(c) and exempt from tax under section 501(a), for the use of such organization.\nA donor who is a citizen of the United States and a resident of a possession thereof shall, for purposes of the tax imposed by this chapter, be considered a “citizen” of the United States within the meaning of that term wherever used in this title unless he acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States.\nA donor who is a citizen of the United States and a resident of a possession thereof shall, for purposes of the tax imposed by this chapter, be considered a “nonresident not a citizen of the United States” within the meaning of that term wherever used in this title, but only if such donor acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States.\n2015—Subsec. (a)(6).  Pub. L. 114–113  added par. (6).\n2004—Subsec. (a)(3) to (5).  Pub. L. 108–357  added pars. (3) and (5), redesignated former par. (5) as (4), and struck out former pars. (3) and (4) which related to exception of certain individuals from taxable transfers and burden of proof.\n1997—Subsec. (a)(3)(C).  Pub. L. 105–34  substituted “donor” for “decedent”.\n1996—Subsec. (a)(3).  Pub. L. 104–191, §\u202f511(e)(2) , substituted “Exception” for “Exceptions” in heading and amended text generally. Prior to amendment, text read as follows: “Paragraph (2) shall not apply in the case of a donor who at any time after  March 8, 1965 , and within the 10-year period ending with the date of transfer lost United States citizenship unless—\n“(A) such donor’s loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended ( 8 U.S.C. 1401(b) , 1482, or 1487), or\n“(B) such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A.”\nSubsec. (a)(3)(E).  Pub. L. 104–191, §\u202f511(f)(2)(B) , added subpar. (E).\n1990—Subsec. (d)(3).  Pub. L. 101–508  struck out par. (3) which read as follows: “For treatment of certain transfers related to estate tax valuation freezes as gifts to which this chapter applies, see section 2036(c)(4).”\n1988—Subsec. (d)(3).  Pub. L. 100–647  added par. (3).\n1981—Subsec. (a)(1), (4).  Pub. L. 97–34  substituted “calendar year” for “calendar quarter” wherever appearing.\n1976—Subsec. (a)(1).  Pub. L. 94–455  inserted “for each calendar quarter” after “hereby imposed” and struck out “For the first calendar quarter of calendar year 1971 and each calendar quarter thereafter” after “General rule-”.\nSubsec. (a)(4).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\n1975—Subsec. (a)(5).  Pub. L. 93–625  added par. (5).\n1970—Subsec. (a)(1).  Pub. L. 91–614, §\u202f102(a)(1)(A) , substituted “For the first calendar quarter of the calendar year 1971 and each calendar quarter thereafter” for “For the calendar year 1955 and each calendar year thereafter” and “during such calendar quarter” for “during such calendar year”.\nSubsec. (a)(4).  Pub. L. 91–614, §\u202f102(a)(1)(B) , substituted “calendar quarter” for “calendar year”.\n1966—Subsec. (a).  Pub. L. 89–809  redesignated existing provisions as par. (1), struck out “,\u2000except transfers of intangible property by a nonresident not a citizen of the United States and who was not engaged in business in the United States during such calendar year” after “resident or nonresident”, and added pars. (2) to (4).\n1960—Subsec. (a).  Pub. L. 86–779, §\u202f4(d)(2) , struck out “who is” before “not a citizen”.\nSubsecs. (c), (d).  Pub. L. 86–779, §\u202f4(d)(1) , added subsec. (c) and redesignated former subsec. (c) as (d).\n1958—Subsec. (b).  Pub. L. 85–866, §\u202f102(b) , added subsec. (b) and redesignated former subsec. (b) as (c).\nSubsec. (c).  Pub. L. 85–866, §\u202f102(b) , redesignated former subsec. (b) as (c) and  Pub. L. 85–866, §\u202f43(b) , made the heading read in the plural, designated existing provisions as par. (2) and added par. (1).\nPub. L. 114–113, div. Q, title IV, §\u202f408(b) ,  Dec. 18, 2015 ,  129 Stat. 3121 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to gifts made after the date of the enactment of this Act [ Dec. 18, 2015 ].”\nAmendment by  Pub. L. 108–357  applicable to individuals who expatriate after  June 3, 2004 , see  section 804(f) of Pub. L. 108–357 , set out as a note under  section 877 of this title .\nAmendment by  Pub. L. 105–34  effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996,  Pub. L. 104–191 , to which such amendment relates, see  section 1602(i) of Pub. L. 105–34 , set out as a note under  section 26 of this title .\nAmendment by  Pub. L. 104–191  applicable to individuals losing United States citizenship on or after  Feb. 6, 1995 , and to long-term residents of the United States with respect to whom an event described in section 877(e)(1)(A) or (B) of this title occurs on or after  Feb. 6, 1995 , with special rule for certain individuals who performed an act of expatriation specified in section 1481(a)(1)–(4) of Title 8, Aliens and Nationality, before  Feb. 6, 1995 , see  section 511(g) of Pub. L. 104–191 , set out as a note under  section 877 of this title .\nAmendment by  Pub. L. 101–508  applicable in the case of property transferred after  Dec. 17, 1987 , see  section 11601(c) of Pub. L. 101–508 , set out as a note under  section 2036 of this title .\nAmendment by  Pub. L. 100–647  applicable in cases where transfer referred to in  section 2036(c)(1)(B) of this title  is on or after  June 21, 1988 , see  section 3031(h)(2) of Pub. L. 100–647 , set out as a note under  section 2036 of this title .\nPub. L. 97–34, title IV, §\u202f442(e) ,  Aug. 13, 1981 ,  95 Stat. 323 , provided that:  “The amendments made by this section [amending this section and sections 1015, 2502, 2503, 2504, 2505, 2512, 2513, 2522, 6019, 6075, and 6212 of this title] shall apply with respect to gifts made after  December 31, 1981 .”\nPub. L. 94–455, title XIX, §\u202f1902(c)(2) ,  Oct. 4, 1976 ,  90 Stat. 1806 , as amended by  Pub. L. 95–600, title VII, §\u202f703(j)(12) ,  Nov. 6, 1978 ,  92 Stat. 2942 , provided that:  “The amendments made by paragraphs (10), (11), and (12)(D) and (E) of subsection (a) [amending this section and sections 2522 and 2523 of this title] shall apply with respect to gifts made after  December 31, 1976 .”\nPub. L. 93–625, §\u202f14(b) ,  Jan. 3, 1975 ,  88 Stat. 2121 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transfers made after  May 7, 1974 .”\nPub. L. 91–614, title I, §\u202f102(e) ,  Dec. 31, 1970 ,  84 Stat. 1842 , provided that:  “The amendments made by this section [amending this section and sections 1015, 2012, 2502, 2503, 2504, 2512, 2513, 2515, 2521, 2522, 2523, 6019, 6075, 6212, 6214, 6324, 6501, and 6512 of this title and enacting provisions set out as a note under this section] shall apply with respect to gifts made after  December 31, 1970 .”\nPub. L. 89–809, title I, §\u202f109(c) ,  Nov. 13, 1966 ,  80 Stat. 1575 , provided that:  “The amendments made by this section [amending this section and  section 2511 of this title ] shall apply with respect to the calendar year 1967 and all calendar years there\xadafter.”\nPub. L. 86–779, §\u202f4(e)(3) ,  Sept. 14, 1960 ,  74 Stat. 1000 , provided that:  “The amendments made by subsection (d) [amending this section] shall apply with respect to gifts made after the date of the enactment of this Act [ Sept. 14, 1960 ].”\nAmendment by  Pub. L. 85–866  applicable to gifts made after  September 2, 1958 , see  section 102(d) of Pub. L. 85–866 , set out as a note under  section 2014 of this title .\nPub. L. 114–113, div. Q, title IV, §\u202f408(c) ,  Dec. 18, 2015 ,  129 Stat. 3121 , provided that:  “Nothing in the amendment made by subsection (a) [amending this section] shall be construed to create any inference with respect to whether any transfer of property (whether made before, on, or after the date of the enactment of this Act [ Dec. 18, 2015 ]) to an organization described in paragraph (4), (5), or (6) of section 501(c) of the Internal Revenue Code of 1986 is a transfer of property by gift for purposes of chapter 12 of such Code.”\nPub. L. 97–448, title I, §\u202f104(d)(3) ,  Jan. 12, 1983 ,  96 Stat. 2383 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  In the case of any decedent— “(i)  who dies before  August 13, 1984 , and \n \n “(ii)  who made a gift (before  August 13, 1981 , and during the 3-year period ending on the date of the decedent’s death) on which tax imposed by chapter 12 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] has been paid before  April 16, 1982 , \n \n\n such decedent’s executor may make an election to have subtitle B of such Code (relating to estate and gift taxes) applied with respect to such decedent without regard to any of the amendments made by title IV of the Economic Recovery Tax Act of 1981 [ Pub. L. 97–34, title IV ]. \n \n “(B)  An election under subparagraph (A) shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. \n \n “(C)  An election under subparagraph (A), once made, shall be irrevocable.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'The tax imposed by section 2501 shall be paid by the donor.\n2010—Subsec. (a).  Pub. L. 111–312  amended subsec. (a) to read as if amendment by  Pub. L. 107–16, §\u202f511(d) , had never been enacted. See 2001 Amendment note below.\n2001—Subsec. (a).  Pub. L. 107–16, §\u202f511(d) , amended subsec. (a) generally. Prior to amendment, text read as follows: “The tax imposed by section 2501 for each calendar year shall be an amount equal to the excess of—\n“(1) a tentative tax, computed under section 2001(c), on the aggregate sum of the taxable gifts for such calendar year and for each of the preceding calendar periods, over\n“(2) a tentative tax, computed under such section, on the aggregate sum of the taxable gifts for each of the preceding calendar periods.”\n1987—Subsec. (a)(1).  Pub. L. 100–203, §\u202f10401(b)(2)(B)(i) , substituted “under section 2001(c)” for “in accordance with the rate schedule set forth in section 2001(c)”.\nSubsec. (a)(2).  Pub. L. 100–203, §\u202f10401(b)(2)(B)(ii) , substituted “under such section” for “in accordance with such rate schedule”.\n1981—Subsec. (a).  Pub. L. 97–34  substituted in introductory text and par. (1) “calendar year” for “calendar quarter” and in pars. (1) and (2) “calendar periods” for “calendar years and calendar quarters”.\nSubsec. (b).  Pub. L. 97–34  substituted definition of “preceding calendar period” for “calendar quarter”, the latter including only the first calendar quarter of the calendar year 1971 and succeeding calendar quarters (covered in par. (2)), the former incorporating former subsec. (c)(1) definition of “preceding calendar years” as meaning calendar years 1932 and 1970 and all calendar years intervening between calendar year 1932 and calendar year 1970 and “calendar year 1932” as including only the portion of such year after  June 6, 1932 , and former subsec. (c)(2) definition of “preceding calendar quarters” as meaning the first calendar quarter of calendar year 1971 and all calendar quarters intervening between such calendar quarter and the calendar quarter for which the tax is being computed.\nSubsecs. (c), (d).  Pub. L. 97–34  redesignated subsec. (d) as (c). Former subsec. (c), defining “preceding calendar years” and “preceding calendar quarters”, was incorporated in subsec. (b).\n1976—Subsec. (a).  Pub. L. 94–455  inserted “tentative” after “(1) a” and “(2) a” and substituted in par. (1) “section 2001(c)” for “this subsection” after “set forth in”.\n1970—Subsec. (a).  Pub. L. 91–614, §\u202f102(a)(2)(A) , substituted a computation of tax formula based on the current calendar quarter, preceding calendar quarters, and preceding calendar years for a formula based entirely on the current and preceding calendar years.\nSubsec. (b).  Pub. L. 91–614, §\u202f102(a)(2)(B) , substituted definition of “calendar quarter” for definition of “calendar year”.\nSubsec. (c).  Pub. L. 91–614, §\u202f102(a)(2)(B) , substituted definition of “preceding calendar years and quarters” for definition of “preceding calendar years”.\nPub. L. 111–312, title III, §\u202f302(b)(2) ,  Dec. 17, 2010 ,  124 Stat. 3301 , provided that the amendment by section 302(b)(2) is effective on and after  Jan. 1, 2011 .\nPub. L. 107–16, title V, §\u202f511(f)(3) ,  June 7, 2001 ,  115 Stat. 71 , provided that:  “The amendments made by subsections (d) and (e) [amending this section and  section 2511 of this title ] shall apply to gifts made after  December 31, 2009 .”\nAmendment by  Pub. L. 100–203  applicable in the case of decedents dying, and gifts made, after  Dec. 31, 1987 , see  section 10401(c) of Pub. L. 100–203 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nPub. L. 94–455, title XX, §\u202f2001(d)(2) ,  Oct. 4, 1976 ,  90 Stat. 1854 , provided that:  “The amendments made by subsections (b) and (c)(2) [enacting  section 2505 of this title , amending this section and  section 2504 of this title , and repealing  section 2521 of this title ] shall apply to gifts made after  December 31, 1976 .”\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'The term “taxable gifts” means the total amount of gifts made during the calendar year, less the deductions provided in subchapter C (section 2522 and following).\nIn the case of gifts (other than gifts of future interests in property) made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsection (a), be included in the total amount of gifts made during such year. Where there has been a transfer to any person of a present interest in property, the possibility that such interest may be diminished by the exercise of a power shall be disregarded in applying this subsection, if no part of such interest will at any time pass to any other person.\nAny qualified transfer shall not be treated as a transfer of property by gift for purposes of this chapter.\nIf any individual waives, before the death of a participant, any survivor benefit, or right to such benefit, under section 401(a)(11) or 417, such waiver shall not be treated as a transfer of property by gift for purposes of this chapter.\nThe term “qualified work of art” means any archaeological, historic, or creative tangible personal property.\nThe term “private foundation” has the meaning given such term by section 509, except that such term shall not include any private operating foundation (as defined in section 4942(j)(3)).\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\n2017—Subsec. (b)(2)(B).  Pub. L. 115–97  substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.\n1997—Subsec. (b).  Pub. L. 105–34  designated existing provisions as par. (1), inserted par. heading, realigned margins, and added par. (2).\n1989—Subsecs. (f), (g).  Pub. L. 101–239  redesignated subsec. (f), relating to treatment of certain loans of artworks, as (g).\n1988—Subsec. (e)(2)(B).  Pub. L. 100–647, §\u202f1018(u)(52) , substituted “section 213(d)” for “section 213(e)”.\nSubsec. (f).  Pub. L. 100–647, §\u202f1018(s)(2)(A) , added subsec. (f) relating to treatment of certain loans of artworks.\n1986—Subsec. (f).  Pub. L. 99–514  added subsec. (f).\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f442(a)(3)(A) , substituted “the total amount of gifts made during the calendar year, less the deductions provided in subchapter C (section 2522 and following)” for “,\u2000in the case of gifts made after  December 31, 1970 , the total amount of gifts made during calendar quarter, less the deductions provided in subchapter C (sec. 2521 and following” and struck out provision that in the case of gifts made before  Jan. 1, 1971 , “taxable gifts” means the total amount of gifts made during the calendar year, less the deductions provided in subchapter C.\nSubsec. (b).  Pub. L. 97–34, §\u202f442(a)(3)(B) , substituted provision that in the case of gifts, other than gifts of future interests in property, made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not, for purposes of subsec. (a), be included in the total amount of gifts made during such year for provision that in computing taxable gifts for the calendar quarter, in the case of gifts, other than gifts of future interests in property, made to any person by the donor during the calendar year 1971 and subsequent calendar years, $10,000 of such gifts to such person less the aggregate of the amounts of such gifts to such person during all preceding calendar quarters of the calendar year shall not, for purposes of subsec. (a), be included in the total amount of gifts made during such quarter.\nPub. L. 97–34, §\u202f441(a) , substituted “$10,000” for “$3,000”.\nSubsec. (d).  Pub. L. 97–34, §\u202f311(h)(5) , repealed subsec. (d) which related to individual retirement accounts, etc., for spouse.\nSubsec. (e).  Pub. L. 97–34, §\u202f441(b) , added subsec. (e).\n1978—Subsec. (d).  Pub. L. 95–600  added subsec. (d).\n1970—Subsec. (a).  Pub. L. 91–614, §\u202f102(a)(3)(A) , divided definition of “taxable gifts” into gifts made after  Dec. 31, 1970 , where taxable gifts are based on the total amount of gifts made during the calendar quarter, less the applicable deductions, and gifts made before  Jan. 1, 1971 , where taxable gifts are based on the total amount of gifts made during the calendar year, less the applicable deductions.\nSubsec. (b).  Pub. L. 91–614, §\u202f102(a)(3)(B) , substituted provisions with regard to computing taxable gifts for the calendar quarter, in the case of gifts made to any persons by the donor during the calendar year 1971 and subsequent calendar years, $3,000 of such gifts to such person less the aggregate of the amounts of such gifts to such person during all preceding calendar quarters of the calendar year shall not be included in the total amount of gifts made during such quarter for provisions requiring in the case of gifts made to any person by the donor during the calendar year 1955 and subsequent calendar years, the first $3,000 of such gifts to such person shall not be included in the total amount of gifts made during such year.\nAmendment by  Pub. L. 115–97  applicable to taxable years beginning after  Dec. 31, 2017 , see  section 11002(e) of Pub. L. 115–97 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying, and gifts made, after  Dec. 31, 1997 , see  section 501(f) of Pub. L. 105–34 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1018(s)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3587 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to loans after  July 31, 1969 .”\nAmendment by  section 1018(u)(52) of Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 99–514  effective as if included in the provision of the Retirement Equity Act of 1984,  Pub. L. 98–397 , to which such amendment relates, except as otherwise provided, see  section 1898(j) of Pub. L. 99–514 , set out as a note under  section 401 of this title .\nAmendment by  section 311(h)(5) of Pub. L. 97–34  applicable to taxable years beginning after  Dec. 31, 1981 , see  section 311(i)(1) of Pub. L. 97–34 , set out as a note under  section 219 of this title .\nPub. L. 97–34, title IV, §\u202f441(c) ,  Aug. 13, 1981 ,  95 Stat. 319 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to transfers after  December 31, 1981 . \n \n “(2)   Transitional rule .— If— “(A)  an instrument executed before the date which is 30 days after the date of the enactment of this Act [ Aug. 13, 1981 ] provides for a power of appointment which may be exercised during any period after  December 31, 1981 , \n \n “(B)  such power of appointment is expressly defined in terms of, or by reference to, the amount of the gift tax exclusion under section 2503(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (or the corresponding provision of prior law), \n \n “(C)  the instrument described in subparagraph (A) has not been amended on or after the date which is 30 days after the date of the enactment of this Act [ Aug. 13, 1981 ], and \n \n “(D)  the State has not enacted a statute applicable to such gift under which such power of appointment is to be construed as being defined in terms of, or by reference to, the amount of the exclusion under such section 2503(b) after its amendment by subsection (a), \n \n\n then the amendment made by subsection (a) shall not apply to such gift.”\nAmendment by  section 442(a)(3) of Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nPub. L. 95–600, title VII, §\u202f702(j)(3)(B) ,  Nov. 6, 1978 ,  92 Stat. 2932 , provided that:  “The amendment made by paragraph (2) [amending this section] shall apply to transfers made after  December 31, 1976 .”\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'In the case of gifts made to any person by the donor during preceding calendar periods, the amount excluded, if any, by the provisions of gift tax laws applicable to the periods in which the gifts were made shall not, for purposes of subsection (a), be included in the total amount of the gifts made during such preceding calendar periods.\nThe term “net gifts” as used in the corresponding provisions of prior laws shall be read as “taxable gifts” for purposes of this chapter.\nThe Tax Reform Act of 1976, referred to in subsec. (a)(3), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 .  Section 2521 of this title  was repealed by  section 2001(b)(3) of Pub. L. 94–455 . For complete classification of this Act to the Code, see Tables.\n1998—Subsec. (c).  Pub. L. 105–206  substituted “gifts” for “certain gifts for preceding calendar periods” in heading and amended text generally. Prior to amendment, text read as follows: “If the time has expired within which a tax may be assessed under this chapter or under corresponding provisions of prior laws on the transfer of property by gift made during a preceding calendar period, as defined in section 2502(b), the value of such gift made in such preceding calendar period shall, for purposes of computing the tax under this chapter for any calendar year, be the value of such gift which was used in computing the tax for the last preceding calendar period for which a tax under this chapter or under corresponding provisions of prior laws was assessed or paid.”\n1997—Subsec. (c).  Pub. L. 105–34  struck out “,\u2000and if a tax under this chapter or under corresponding provisions of prior laws has been assessed or paid for such preceding calendar period” after “as defined in section 2502(b)”.\n1981— Pub. L. 97–34, §\u202f442(a)(4)(D) , substituted “calendar periods” for “years and quarters” in section catchline.\nSubsec. (a).  Pub. L. 97–34, §\u202f442(a)(4)(A) , substituted in introductory text “preceding calendar periods” and “calendar year” for “preceding calendar years or calendar quarters” and “calendar quarter”, incorporated existing text in provisions designated pars. (1) to (3), and substituted in par. (1) “calendar period” for “years or calendar quarters” and in par. (3) “preceding calendar periods” and “calendar year” for “calendar years or calendar quarters” and “calendar quarter”.\nSubsec. (b).  Pub. L. 97–34, §\u202f442(a)(4)(B) , substituted in heading “calendar periods” for “years and quarters” and in text “preceding calendar periods” for “preceding calendar years and calendar quarters”, “the periods” for “the years and calendar quarters”, and “such preceding calendar periods” for “such years and calendar quarters”.\nSubsec. (c).  Pub. L. 97–34, §\u202f442(a)(4)(C) , substituted in heading “calendar periods” for “calendar years and quarters” and in text “preceding calendar period” for “preceding calendar year or calendar quarter” in four places, “any calendar year” for “any calendar quarter”, and “section 2502(b)” for “section 2502(c)”.\n1976—Subsec. (a).  Pub. L. 94–455  inserted “(as in effect before its repeal by the Tax Reform Act of 1976)” after “section 2521” and “ending before  January 1, 1977 ” after “years or calendar quarters” and substituted “of” for “to previous” after “computations in respect”.\n1970— Pub. L. 91–614  substituted “Taxable gifts for preceding years and quarters” for “Taxable gifts for preceding years” in section catchline.\nSubsec. (a).  Pub. L. 91–614  substituted “In computing taxable gifts for the preceding calendar years or calendar quarters for the purpose of computing the tax for any calendar quarter,” for “In computing taxable gifts for the calendar year 1954 and preceding calendar years for the purpose of computing the tax for the calendar year 1955 or any calendar year thereafter,” provided that the laws applicable in the calendar quarters as well as the years in which the transfers in question were made shall apply, and substituted “previous calendar years or calendar quarters for the purpose of computing the tax for any calendar year or calendar quarter” for “the calendar year 1954 and previous calendar years for the purpose of computing the tax for the calendar year 1955 or any calendar year thereafter”.\nSubsec. (b).  Pub. L. 91–614  inserted reference to calendar quarters in heading, substituted “during preceding calendar years and calendar quarters,” for “during the calendar year 1954 and preceding calendar years,” made reference to the amount excluded by gift tax laws applicable to the calendar quarters as well as years in which the gifts were made, and substituted “during such years and calendar quarters” for “during such year”.\nSubsec. (c).  Pub. L. 91–614  inserted reference to calendar quarters in heading, inserted “or calendar quarter” after “calendar year” in four places, and substituted “for any calendar quarter,” for “for the calendar year 1955 and subsequent calendar years,”.\nSubsec. (d).  Pub. L. 91–614  struck out “For years before the calendar year 1955” from explanation of term “net gifts” as used in corresponding provisions of prior laws.\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable to gifts made after  Aug. 5, 1997 , see  section 506(e)(1) of Pub. L. 105–34 , as amended, set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'The amount allowable under subsection (a) shall be reduced by an amount equal to 20 percent of the aggregate amount allowed as a specific exemption under section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) with respect to gifts made by the individual after  September 8, 1976 .\nThe amount of the credit allowed under subsection (a) for any calendar year shall not exceed the amount of the tax imposed by section 2501 for such calendar year.\nThe Tax Reform Act of 1976, referred to in subsec. (b), is  Pub. L. 94–455 ,  Oct. 4, 1976 ,  90 Stat. 1520 .  Section 2521 of this title  was repealed by  section 2001(b)(3) of Pub. L. 94–455 . For complete classification of this Act to the Code, see Tables.\n2010—Subsec. (a).  Pub. L. 111–312, §\u202f302(d)(2) , inserted concluding provisions.\nSubsec. (a)(1).  Pub. L. 111–312, §\u202f303(b)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the applicable credit amount in effect under section 2010(c) for such calendar year, reduced by”.\nPub. L. 111–312, §\u202f302(b)(1)(A) , struck out “(determined as if the applicable exclusion amount were $1,000,000)” after “calendar year”.\nPub. L. 111–312, §\u202f301(b) , amended subsec. (a)(1) to read as if amendment by  Pub. L. 107–16, §\u202f521(b)(2) , had never been enacted. See 2001 Amendment note below.\n2001—Subsec. (a)(1).  Pub. L. 107–16, §\u202f521(b)(2) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “the applicable credit amount in effect under section 2010(c) for such calendar year (determined as if the applicable exclusion amount were $1,000,000), reduced by”.\nPub. L. 107–16, §\u202f521(b)(1) , inserted “(determined as if the applicable exclusion amount were $1,000,000)” after “calendar year”.\n1997—Subsec. (a)(1).  Pub. L. 105–34  substituted “the applicable credit amount in effect under section 2010(c) for such calendar year” for “$192,800”.\n1990—Subsecs. (b) to (d).  Pub. L. 101–508  redesignated subsecs. (c) and (d) as subsecs. (b) and (c), respectively, and struck out former subsec. (b) which provided for a phase-in of the unified credit against gift tax.\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f442(a)(5)(A) , substituted in provision preceding par. (1) “year” for “quarter”, and “periods” for “quarters” in par. (2).\nSubsec. (a)(1).  Pub. L. 97–34, §\u202f401(b)(1) , substituted “$192,800” for “$47,000”.\nSubsec. (b).  Pub. L. 97–34, §\u202f401(b)(2) , struck out from heading “$47,000” before “credit”, substituted subsec. (a)(1) substitutions for “$192,800” of amounts of “$62,800”, “$79,300”, “$96,300”, “$121,800”, and “$155,800” in the case of gifts made in 1982, 1983, 1984, 1985, and 1986, respectively, for subsec. (a)(1) substitutions for “$47,000” of amounts of “$6,000”, “$30,000”, “$34,000”, “$38,000”, and “$42,500” in the case of gifts made after  Dec. 31, 1976 , and before  July 1, 1977 , after  June 30, 1977 , and before  Jan. 1, 1978 ; after  Dec. 31, 1977 , and before  Jan. 1, 1979 , after  Dec. 31, 1978 , and before  Jan. 1, 1980 , and after  Dec. 31, 1979 , and before  Jan. 1, 1981 , respectively.\nSubsec. (d).  Pub. L. 97–34, §\u202f442(a)(5)(B) , substituted “year” for “quarter” in two places.\nPub. L. 111–312, title III, §\u202f301(b) ,  Dec. 17, 2010 ,  124 Stat. 3300 , provided that the amendment by section 301(b) is effective on and after  Jan. 1, 2011 .\nPub. L. 111–312, title III, §\u202f302(b)(1)(B) ,  Dec. 17, 2010 ,  124 Stat. 3301 , provided that:  “The amendment made by this paragraph [amending this section] shall apply to gifts made after  December 31, 2010 .”\nAmendment by  section 302(d)(2) of Pub. L. 111–312  applicable to estates of decedents dying, generation-skipping transfers, and gifts made, after  Dec. 31, 2009 , see  section 302(f) of Pub. L. 111–312 , set out as a note under  section 2001 of this title .\nAmendment by  section 303(b)(1) of Pub. L. 111–312  applicable to estates of decedents dying and gifts made after  Dec. 31, 2010 , see  section 303(c)(1) of Pub. L. 111–312 , set out as a note under  section 2010 of this title .\nAmendment by  section 521(b)(1) of Pub. L. 107–16  applicable to estates of decedents dying, and gifts made, after  Dec. 31, 2001 , and amendment by  section 521(b)(2) of Pub. L. 107–16  applicable to gifts made after  Dec. 31, 2009 , see section 521(e)(1), (2) of  Pub. L. 107–16 , set out as a note under  section 2010 of this title .\nAmendment by  Pub. L. 105–34  applicable to estates of decedents dying, and gifts made, after  Dec. 31, 1997 , see  section 501(f) of Pub. L. 105–34 , set out as a note under  section 2001 of this title .\nPub. L. 97–34, title IV, §\u202f401(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 300 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to gifts made after such date [ Dec. 31, 1981 ].”\nAmendment by  section 442(a)(5) of Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nFor provisions that nothing in amendment by  Pub. L. 101–508  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Nov. 5, 1990 , for purposes of determining liability for tax for periods ending after  Nov. 5, 1990 , see  section 11821(b) of Pub. L. 101–508 , set out as a note under  section 45K of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'Subject to the limitations contained in this chapter, the tax imposed by section 2501 shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible; but in the case of a nonresident not a citizen of the United States, shall apply to a transfer only if the property is situated within the United States.\n2010—Subsec. (c).  Pub. L. 111–312  struck out subsec. (c). Text read as follows: “Notwithstanding any other provision of this section and except as provided in regulations, a transfer in trust shall be treated as a transfer of property by gift, unless the trust is treated as wholly owned by the donor or the donor’s spouse under subpart E of part I of subchapter J of chapter 1.”\n2002—Subsec. (c).  Pub. L. 107–147  substituted “transfer of property by gift,” for “taxable gift under section 2503,”.\n2001—Subsec. (c).  Pub. L. 107–16  added subsec. (c).\n1966—Subsec. (b).  Pub. L. 89–809  inserted reference to nonresidents who are excepted from the application of section 2501(a)(2) and expanded section to include debt obligations of United States persons or the United States, a State or any political subdivision thereof, or the District of Columbia.\nAmendment by  Pub. L. 111–312  applicable to estates of decedents dying, generation-skipping transfers, and gifts made, after  Dec. 31, 2009 , see  section 302(f) of Pub. L. 111–312 , set out as a note under  section 2001 of this title .\nAmendment by  Pub. L. 107–147  effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 411(x) of Pub. L. 107–147 , set out as a note under  section 25B of this title .\nAmendment by  Pub. L. 107–16  applicable to gifts made after  Dec. 31, 2009 , see  section 511(f)(3) of Pub. L. 107–16 , set out as a note under  section 2502 of this title .\nAmendment by  Pub. L. 89–809  applicable with respect to calendar year 1967 and all calendar years thereafter, see  section 109(c) of Pub. L. 89–809 , set out as a note under  section 2501 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'For individual’s right to be furnished on request a statement regarding any valuation made by the Secretary of a gift by that individual, see section 7517.\n1981—Subsec. (b).  Pub. L. 97–34  substituted “calendar year” for “calendar quarters”.\n1976—Subsec. (c).  Pub. L. 94–455  added subsec. (c).\n1970—Subsec. (b).  Pub. L. 91–614  substituted “calendar quarter” for “calendar year”.\nAmendment by  Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'A gift made by one spouse to any person other than his spouse shall, for the purposes of this chapter, be considered as made one-half by him and one-half by his spouse, but only if at the time of the gift each spouse is a citizen or resident of the United States. This paragraph shall not apply with respect to a gift by a spouse of an interest in property if he creates in his spouse a general power of appointment, as defined in section 2514(c), over such interest. For purposes of this section, an individual shall be considered as the spouse of another individual only if he is married to such individual at the time of the gift and does not remarry during the remainder of the calendar year.\nParagraph (1) shall apply only if both spouses have signified (under the regulations provided for in subsection (b)) their consent to the application of paragraph (1) in the case of all such gifts made during the calendar year by either while married to the other.\nA consent under this section shall be signified in such manner as is provided under regulations prescribed by the Secretary.\nIf the consent required by subsection (a)(2) is signified with respect to a gift made in any calendar year, the liability with respect to the entire tax imposed by this chapter of each spouse for such year shall be joint and several.\n1981—Subsec. (a)(1), (2).  Pub. L. 97–34, §\u202f442(b)(2)(A) , substituted “calendar year” for “calendar quarter”.\nSubsec. (b)(2).  Pub. L. 97–34, §\u202f442(b)(2)(B) –(D), in introductory text, substituted “calendar year” for “calendar quarter”, in subpar. (A), substituted “The consent” for “the consent”, “15th day of April following the close of such year” for “15th day of the second month following the close of such calendar quarter”, and “such year” for “such calendar quarter” in two other places, and in subpar. (B) substituted “The consent” and “such year” for “the consent” and “such calendar quarter”.\nSubsec. (c).  Pub. L. 97–34, §\u202f442(b)(2)(E) , in provision preceding par. (1) substituted “calendar year” for “calendar quarter” and in par. (1) “15th day of April following the close of such year” for “15th day of the second month following the close of such quarter”.\nSubsec. (d).  Pub. L. 97–34, §\u202f442(b)(2)(F) , substituted “any calendar year” and “such year” for “any calendar quarter” and “such calendar quarter”.\n1976—Subsecs. (b)(1), (c).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1970—Subsecs. (a), (b)(2).  Pub. L. 91–614, §\u202f102(b)(2)(A) , substituted “calendar quarter” for “calendar year”.\nSubsec. (b)(2)(A).  Pub. L. 91–614, §\u202f102(b)(2)(B) , substituted “the 15th day of the second month” for “the 15th day of April” and substituted “such calendar quarter” for “such year”.\nSubsec. (b)(2)(B).  Pub. L. 91–614, §\u202f102(b)(2)(C) , substituted “such calendar quarter” for “such year”.\nSubsec. (c).  Pub. L. 91–614, §\u202f102(b)(2)(A) , substituted “calendar quarter” for “calendar year”.\nSubsec. (c)(1).  Pub. L. 91–614, §\u202f102(b)(2)(D) , substituted “15th day of the second month following the close of such calendar quarter” for “15th day of April following the close of such year”.\nSubsec. (d).  Pub. L. 91–614, §\u202f102(b)(2)(A) , (E), substituted “calendar quarter” for “calendar year” and “such calendar quarter” for “such year”.\nAmendment by  Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'The exercise or release of a general power of appointment created after  October 21, 1942 , shall be deemed a transfer of property by the individual possessing such power.\nIf a power of appointment created after  October 21, 1942 , is exercised by creating another power of appointment which, under the applicable local law, can be validly exercised so as to postpone the vesting of any estate or interest in the property which was subject to the first power, or suspend the absolute ownership or power of alienation of such property, for a period ascertainable without regard to the date of the creation of the first power, such exercise of the first power shall, to the extent of the property subject to the second power, be deemed a transfer of property by the individual possessing such power.\nFor purposes of this section a power of appointment created by a will executed on or before  October 21, 1942 , shall be considered a power created on or before such date if the person executing such will dies before  July 1, 1949 , without having republished such will, by codicil or otherwise, after  October 21, 1942 .\n1976—Subsec. (b).  Pub. L. 94–455  struck out “A disclaimer or renunciation of such a power of appointment shall not be deemed a release of such power.”\nAmendment by  Pub. L. 94–455  applicable to transfers creating an interest in person disclaiming made after  Dec. 31, 1976 , see  section 2009(e)(2) of Pub. L. 94–455 , set out as a note under  section 2518 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'In the case of any taxable gift which is a direct skip (within the meaning of chapter 13), the amount of such gift shall be increased by the amount of any tax imposed on the transferor under chapter 13 with respect to such gift.\nA prior section, acts  Aug. 16, 1954, ch. 736 ,  68A Stat. 409 ;  Dec. 31, 1970 ,  Pub. L. 91–614, title I, §\u202f102(b)(3) ,  84 Stat. 1841 ;  Oct. 4, 1976 ,  Pub. L. 94–455, title XX, §\u202f2002(c)(2) ,  90 Stat. 1855 ;  Nov. 6, 1978 ,  Pub. L. 95–600, title VII, §\u202f702(k)(1)(B) ,  92 Stat. 2932 , related to tenancies by the entirety in real property, prior to repeal applicable to gifts made after  Dec. 31, 1981 , by  Pub. L. 97–34, title IV, §\u202f403(c)(3)(B) , (e)(2),  Aug. 13, 1981 ,  95 Stat. 302 , 305.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'Section, added  Pub. L. 95–600, title VII, §\u202f702(k)(1)(A) ,  Nov. 6, 1978 ,  92 Stat. 2932 , related to tenancies by the entirety in personal property.\nRepeal applicable to gifts made after  Dec. 31, 1981 , see  section 403(e)(2) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 2056 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': '1984— Pub. L. 98–369  substituted in introductory text “within the 3-year period beginning on the date 1 year before such agreement is entered into” for “within 2 years thereafter”.\nPub. L. 98–369, div. A, title IV, §\u202f425(c)(2) ,  July 18, 1984 ,  98 Stat. 804 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to transfers after the date of the enactment of this Act [ July 18, 1984 ].”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'Section, added and amended  Pub. L. 85–866, title I , §§\u202f23(f), 68(a),  Sept. 2, 1958 ,  72 Stat. 1623 , 1659;  Pub. L. 87–792, §\u202f7(j) ,  Oct. 10, 1962 ,  76 Stat. 830 ;  Mar. 8, 1966 ,  Pub. L. 89–365, §\u202f2(b) ,  80 Stat. 33 ;  Dec. 30, 1969 ,  Pub. L. 91–172, title I, §\u202f101(j)(24) ,  83 Stat. 528 ;  Pub. L. 94–455, title XX, §\u202f2009(c)  (4), (5),  Oct. 4, 1976 ,  90 Stat. 1895 , 1896;  Pub. L. 97–34, title III, §\u202f311(d)(2) ,  Aug. 13, 1981 ,  95 Stat. 280 ;  Pub. L. 98–369, div. A, title IV, §\u202f491(d)(35) ,  July 18, 1984 ,  98 Stat. 851 , related to the transfers of certain annuities under qualified plans.\nRepeal applicable to transfers after  Oct. 22, 1986 , see  section 1852(e)(2)(E) of Pub. L. 99–514 , set out as an Effective Date of 1986 Amendment note under  section 406 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'For purposes of this subtitle, if a person makes a qualified disclaimer with respect to any interest in property, this subtitle shall apply with respect to such interest as if the interest had never been transferred to such person.\nA disclaimer with respect to an undivided portion of an interest which meets the requirements of the preceding sentence shall be treated as a qualified disclaimer of such portion of the interest.\nA power with respect to property shall be treated as an interest in such property.\n1983—Subsec. (c)(3).  Pub. L. 97–448  substituted “A written transfer” for “For purposes of subsection (a), a written transfer”.\n1981—Subsec. (c)(3).  Pub. L. 97–34  added par. (3).\n1978—Subsec. (b)(4).  Pub. L. 95–600  inserted provision relating to spouse of decedent.\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nPub. L. 97–34, title IV, §\u202f426(b) ,  Aug. 13, 1981 ,  95 Stat. 318 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply to transfers creating an interest in the person disclaiming made after  December 31, 1981 .”\nPub. L. 95–600, title VII, §\u202f702(m)(2) ,  Nov. 6, 1978 ,  92 Stat. 2935 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to transfers creating an interest in the person disclaiming made after  December 31, 1976 .”\nPub. L. 94–455, title XX, §\u202f2009(e)(2) ,  Oct. 4, 1976 ,  90 Stat. 1896 , provided that:  “The amendments made by subsection (b) [enacting this section and  section 2046 of this title  and amending sections 2041, 2055, 2056, and 2514 of this title] shall apply with respect to transfers creating an interest in the person disclaiming made after  December 31, 1976 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'For purposes of this chapter and chapter 11, any disposition of all or part of a qualifying income interest for life in any property to which this section applies shall be treated as a transfer of all interests in such property other than the qualifying income interest.\nFor right of recovery for gift tax in the case of property treated as transferred under this section, see section 2207A(b).\n1983— Pub. L. 97–448, §\u202f104(a)(3)(B) , amended directory language of  Pub. L. 97–34, §\u202f403(d)(3)(B)(i) , to clarify that this section be inserted at end of subchapter B of chapter 12, rather than at end of subchapter B of chapter 11, and did not involve any change in text.\nSubsec. (a).  Pub. L. 97–448, §\u202f104(a)(3)(A) , substituted “For purposes of this chapter and chapter 11, any disposition” for “Any disposition” and “treated as a transfer of all interests in such property other than the qualifying income interest” for “treated as a transfer of such property”.\nSubsec. (c).  Pub. L. 97–448, §\u202f104(a)(7) , added subsec. (c).\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nSection applicable to gifts made after  Dec. 31, 1981 , see  section 403(e)(2) of Pub. L. 97–34 , set out as an Effective Date of 1981 Amendment note under  section 2056 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'Section,  act Aug. 16, 1954, ch. 736 ,  68A Stat. 410 , allowed a deduction, in the case of a citizen or resident, an exemption of $30,000, less amounts claimed and allowed for calendar year 1932 and calendar years intervening between that year and year for which tax is being computed.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'A deduction shall be allowed under subsection (a) in respect of any qualified reformation (within the meaning of section 2055(e)(3)(B)).\nFor purposes of this paragraph, rules similar to the rules of section 2055(e)(3) shall apply.\nA deduction shall be allowed under subsection (a) in respect of any transfer of a qualified real property interest (as defined in section 170(h)(2)(C)) which meets the requirements of section 170(h) (without regard to paragraph (4)(A) thereof).\nThe Secretary may, by regulation, provide for exceptions to subparagraph (A) in cases where all persons who hold an interest in the property make proportional contributions of an undivided portion of the entire interest held by such persons.\nThe tax imposed under this chapter for any taxable year for which there is a recapture under subparagraph (A) shall be increased by 10 percent of the amount so recaptured.\nFor purposes of this paragraph, the term “initial fractional contribution” means, with respect to any donor, the first gift of an undivided portion of the donor’s entire interest in any tangible personal property for which a deduction is allowed under subsection (a) or (b).\nSections 1218(c) and 1234(c) of  Pub. L. 109–280 , which directed the amendment of section 2522 without specifying the act to be amended, were executed to this section, which is section 2522 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.\n2018—Subsec. (c)(1).  Pub. L. 115–141  substituted “gift to or for” for “gift to of for”.\n2007—Subsec. (e)(1)(A).  Pub. L. 110–172, §\u202f11(a)(16)(A) , in introductory provisions, substituted “all interests in the property are” for “all interest in the property is”.\nSubsec. (e)(2).  Pub. L. 110–172, §\u202f3(d)(2)(A) , (B), redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows: “In the case of any additional contribution, the fair market value of such contribution shall be determined by using the lesser of—\n“(A) the fair market value of the property at the time of the initial fractional contribution, or\n“(B) the fair market value of the property at the time of the additional contribution.”\nSubsec. (e)(2)(A)(i).  Pub. L. 110–172, §\u202f11(a)(16)(B) , substituted “interests” for “interest” and “on or before” for “before”.\nSubsec. (e)(2)(C).  Pub. L. 110–172, §\u202f3(d)(2)(C) , added subpar. (C).\nSubsec. (e)(3).  Pub. L. 110–172, §\u202f3(d)(2)(B) , redesignated par. (3) as (2).\nSubsec. (e)(4).  Pub. L. 110–172, §\u202f3(d)(2)(A) , struck out heading and text of par. (4). Text read as follows: “For purposes of this subsection—\n“(A)  Additional contribution .—The term ‘additional contribution’ means any gift for which a deduction is allowed under subsection (a) or (b) of any interest in a property with respect to which the donor has previously made an initial fractional contribution.\n“(B)  Initial fractional contribution .—The term ‘initial fractional contribution’ means, with respect to any donor, the first gift of an undivided portion of the donor’s entire interest in any tangible personal property for which a deduction is allowed under subsection (a) or (b).”\n2006—Subsec. (c)(5).  Pub. L. 109–280, §\u202f1234(c) , added par. (5). See Codification note above.\nSubsecs. (e), (f).  Pub. L. 109–280, §\u202f1218(c) , added subsec. (e) and redesignated former subsec. (e) as (f). See Codification note above.\n1987—Subsecs. (a)(2), (b)(2), (3).  Pub. L. 100–203  inserted “(or in opposition to)” after “on behalf of”.\n1986—Subsecs. (d), (e).  Pub. L. 99–514  added subsec. (d) and redesignated former subsec. (d) as (e).\n1984—Subsec. (c)(4).  Pub. L. 98–369, §\u202f1022(c) , added par. (4).\nSubsec. (d).  Pub. L. 98–369, §\u202f1032(b)(3) , added par. (1) and redesignated former pars. (1) and (2) as (2) and (3), respectively.\n1983—Subsec. (d).  Pub. L. 97–473  designated existing provisions as par. (1), substituted “bequests” for “gifts” second time appearing in par. (1) as so designated, and added par. (2).\n1982—Subsec. (a).  Pub. L. 97–248  inserted provision that rules similar to rules of section 501(j) apply for purposes of par. (2).\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f442(c) , substituted “year” for “quarter” in two places in provision preceding par. (1).\nSubsec. (b).  Pub. L. 97–34, §\u202f442(c) , substituted “year” for “quarter” in provision preceding par. (1).\nSubsec. (c)(3).  Pub. L. 97–34, §\u202f423(b) , added par. (3).\n1976—Subsec. (a)(1).  Pub. L. 94–455, §\u202f1902(a)(12)(D) , struck out “Territory” after “any State”.\nSubsec. (a)(2).  Pub. L. 94–455 , §§\u202f1307(d)(1)(B)(iv), 1313(b)(3), substituted “which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation” for “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation” after “shareholder or individual” and inserted “or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment)” after “or educational purposes”.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1902(a)(12)(D) , struck out “Territory” after “any State”.\nSubsec. (b)(2).  Pub. L. 94–455, §\u202f1307(d)(1)(B)(v) , substituted “which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation” for “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation” after “shareholder or individual”.\nSubsec. (c)(2).  Pub. L. 94–455, §\u202f2124(e)(3) , substituted “(other than an interest described in section 170(f)(3)(B))” for “(other than a remainder interest in a personal residence or farm or an undivided portion of the donor’s entire interest in property)” after “an interest in property”.\nSubsec. (d).  Pub. L. 94–455, §\u202f1902(a)(11) , substituted subsec. (d) for former subsec. (d), pars. (1) through (10), which dealt with cross references to specific exemptions and rules of construction for gifts to the United States and its instrumentalities.\n1970— Pub. L. 91–614  substituted “quarter” for “year” in three places.\n1969—Subsecs. (a)(2), (b)(2), (3).  Pub. L. 91–172, §\u202f201(d)(4)(C) , (D), inserted non-participation and non-intervention in political campaigns as an additional qualification.\nSubsec. (c).  Pub. L. 91–172, §\u202f201(d)(3) , substituted substantive provisions for simple reference to sections 503 and 681 in which such substantive provisions were formerly set out.\n1958—Subsec. (c).  Pub. L. 85–866  substituted “503” for “504”.\nAmendment by  section 3(d)(2) of Pub. L. 110–172  effective as if included in the provisions of the Pension Protection Act of 2006,  Pub. L. 109–280 , to which such amendment relates, see  section 3(j) of Pub. L. 110–172 , set out as a note under  section 170 of this title .\nAmendment by  section 1218(c) of Pub. L. 109–280  applicable to contributions, bequests, and gifts made after  Aug. 17, 2006 , see  section 1218(d) of Pub. L. 109–280 , set out as a note under  section 170 of this title .\nAmendment by  section 1234(c) of Pub. L. 109–280  applicable to contributions made after the date which is 180 days after  Aug. 17, 2006 , see  section 1234(d) of Pub. L. 109–280 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 100–203  applicable with respect to activities after  Dec. 22, 1987 , see  section 10711(c) of Pub. L. 100–203 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 99–514  applicable to transfers and contributions made after  Dec. 31, 1986 , see  section 1422(e) of Pub. L. 99–514 , set out as a note under  section 2055 of this title .\nAmendment by  section 1022(c) of Pub. L. 98–369  applicable to reformations after  Dec. 31, 1978 , but inapplicable to any reformation to which  section 2055(e)(3) of this title  as in effect before  July 18, 1984 , applies, see  section 1022(e)(1) of Pub. L. 98–369 , set out as a note under  section 2055 of this title .\nAmendment by  section 1032(b)(3) of Pub. L. 98–369  applicable to taxable years beginning after  July 18, 1984 , see  section 1032(c) of Pub. L. 98–369 , set out as a note under  section 170 of this title .\nFor effective date of amendment by  Pub. L. 97–473 , see  section 204(4) of Pub. L. 97–473 , set out as an Effective Date note under  section 7871 of this title .\nAmendment by  Pub. L. 97–248  effective  Oct. 5, 1976 , see  section 286(c) of Pub. L. 97–248 , set out as a note under  section 501 of this title .\nPub. L. 97–34, title IV, §\u202f423(c)(2) ,  Aug. 13, 1981 ,  95 Stat. 317 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to transfers after  December 31, 1981 .”\nAmendment by  section 442(c) of Pub. L. 97–34  applicable with respect to gifts made after  Dec. 31, 1981 , see  section 442(e) of Pub. L. 97–34 , set out as a note under  section 2501 of this title .\nAmendment by  section 2124(e)(3) of Pub. L. 94–455  applicable with respect to contributions or transfers made after  June 13, 1976 , see  section 2124(e)(4) of Pub. L. 94–455 , set out as a note under  section 170 of this title .\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .\nAmendment by  section 201(d)(3) of Pub. L. 91–172  applicable to gifts made after  Dec. 31, 1969 , except that the amendment of par. (2) of subsec. (c) applicable to gifts made after  July 31, 1969 , see  section 201(g)(4)(D) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nAmendment by section 201(d)(4)(C), (D) of  Pub. L. 91–172  applicable to gifts and transfers made after  Dec. 31, 1969 , see  section 201(g)(4)(E) of Pub. L. 91–172 , set out as a note under  section 170 of this title .\nFor inclusion of provisions comparable to  section 2055(e)(3) of this title  in this section, see  section 514(b) of Pub. L. 95–600 , set out as a note under  section 2055 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'Where a donor transfers during the calendar year by gift an interest in property to a donee who at the time of the gift is the donor’s spouse, there shall be allowed as a deduction in computing taxable gifts for the calendar year an amount with respect to such interest equal to its value.\nWhere the assets out of which, or the proceeds of which, the interest transferred to the donee spouse may be satisfied include a particular asset or assets with respect to which no deduction would be allowed if such asset or assets were transferred from the donor to such spouse, then the value of the interest transferred to such spouse shall, for purposes of subsection (a), be reduced by the aggregate value of such particular assets.\nIf the interest is transferred to the donee spouse as sole joint tenant with the donor or as tenant by the entirety, the interest of the donor in the property which exists solely by reason of the possibility that the donor may survive the donee spouse, or that there may occur a severance of the tenancy, shall not be considered for purposes of subsection (b) as an interest retained by the donor in himself.\nFor purposes of this subsection, rules similar to the rules of clauses (ii), (iii), and (iv) of section 2056(b)(7)(B) shall apply and the rules of section 2056(b)(10) shall apply.\nAn election under this subsection with respect to any property shall be made on or before the date prescribed by section 6075(b) for filing a gift tax return with respect to the transfer (determined without regard to section 6019(2)) and shall be made in such manner as the Secretary shall by regulations prescribe.\nAn election under this subsection, once made, shall be irrevocable.\nSubparagraph (A) shall not apply with respect to any property after the donee spouse is treated as having transferred such property under section 2519, or such property is includible in the donee spouse’s gross estate under section 2044.\nIf, after the transfer, the donee spouse is the only beneficiary who is not a charitable beneficiary (other than the donor) of a qualified charitable remainder trust, subsection (b) shall not apply to the interest in such trust which is transferred to the donee spouse.\nFor purposes of paragraph (1), the term “charitable beneficiary” and “qualified charitable remainder trust” have the meanings given to such terms by section 2056(b)(8)(B).\nNothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same donor.\nFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under  section 1 of this title .\nSections 2515 and 2515A, referred to in subsec. (i)(3), were repealed by  Pub. L. 97–34, title IV, §\u202f403(c)(3)(B) ,  Aug. 13, 1981 ,  95 Stat. 302 .\n2018—Subsec. (g)(1).  Pub. L. 115–141, §\u202f401(a)(205) , substituted “beneficiary who is not a charitable beneficiary” for “noncharitable beneficiary”.\nSubsec. (g)(2).  Pub. L. 115–141, §\u202f401(a)(206) , substituted “term ‘charitable beneficiary’\u202f” for “term ‘noncharitable beneficiary’\u202f”.\n1997—Subsec. (g)(1).  Pub. L. 105–34  substituted “qualified charitable remainder trust” for “qualified remainder trust”.\n1992—Subsec. (e).  Pub. L. 102–486, §\u202f1941(b)(1) , in closing provisions, inserted at end “For purposes of this subsection, the term ‘specific portion’ only includes a portion determined on a fractional or percentage basis.”\nSubsec. (f)(3).  Pub. L. 102–486, §\u202f1941(b)(2) , inserted before period at end “and the rules of section 2056(b)(10) shall apply”.\n1990—Subsec. (i).  Pub. L. 101–508  inserted at end “This subsection shall not apply to any transfer resulting from the acquisition of rights under a joint and survivor annuity described in subsection (f)(6).”\n1989—Subsec. (a).  Pub. L. 101–239, §\u202f7815(d)(2) , struck out “who is a citizen or resident” after “Where a donor”.\nSubsec. (i)(2).  Pub. L. 101–239, §\u202f7815(d)(1)(A) , substituted “which are made by the donor to such spouse and with respect to which a deduction would be allowable under this section but for paragraph (1)” for “made by the donor to such spouse”.\n1988—Subsec. (f)(6).  Pub. L. 100–647, §\u202f6152(b) , added par. (6).\nSubsec. (i).  Pub. L. 100–647, §\u202f5033(b) , added subsec. (i).\n1986—Subsec. (f)(4)(A).  Pub. L. 99–514  amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “An election under this subsection with respect to any property shall be made on or before the first April 15th after the calendar year in which the interest was transferred and shall be made in such manner as the Secretary shall by regulations prescribe.”\n1983—Subsec. (f)(3).  Pub. L. 97–448, §\u202f104(a)(6) , substituted “rules similar to the rules of clauses (ii)” for “the rules of clauses (ii)”.\nSubsec. (f)(4).  Pub. L. 97–448, §\u202f104(a)(4) , divided existing provisions into subpars. (A) and (B), in subpar. (A) as so designated substituted “shall be made on or before the first April 15th after the calendar year in which the interest was transferred and shall be made in such manner as the Secretary shall by regulations prescribe” for “shall be made on the return of the tax imposed by section 2501 for the calendar year in which the interest was transferred”, and in subpar. (B) as so designated substituted “An election under this subsection” for “Such an election”.\nSubsec. (f)(5).  Pub. L. 97–448, §\u202f104(a)(5) , added par. (5).\nSubsec. (h).  Pub. L. 97–448, §\u202f104(a)(2)(B) , added subsec. (h).\n1981—Subsec. (a).  Pub. L. 97–34, §\u202f403(b)(1) , struck out “(1) In general” designation for existing text and struck out par. (2) which declared that the aggregate of the allowed deductions for any calendar quarter should not exceed the sum of $100,000 reduced, but not below zero, by the aggregate of the allowed deductions for preceding calendar quarters beginning after  Dec. 31, 1976 , plus 50 percent of the lesser of the amount of the allowed deductions for such calendar quarter, determined without regard to par. (2), or the amount, if any, by which the aggregate determined under cl. (i) of par. (2) for the calendar quarter and for each preceding calendar quarter beginning after  Dec. 31, 1976 , exceeds $200,000.\nSubsec. (f).  Pub. L. 97–34, §\u202f403(b)(2) , (d)(2), substituted provision relating to election with respect to life estate for donee spouse for provision relating to community property.\nSubsec. (g).  Pub. L. 97–34, §\u202f403(d)(2) , added subsec. (g).\n1976—Subsec. (a).  Pub. L. 94–455  designated existing provisions as par. (1), struck out “one-half of” after “interest equal to”, and added par. (2) relating to limitations on aggregate amount of deductions.\nSubsec. (f)(1).  Pub. L. 94–455, §\u202f1902(a)(12)(E) , struck out “Territory” after “any State”.\n1970—Subsec. (a).  Pub. L. 91–614  substituted “quarter” for “year” in two places.\nAmendment by  Pub. L. 102–486  applicable to gifts made after  Oct. 24, 1992 , see  section 1941(c)(2) of Pub. L. 102–486 , set out as a note under  section 2056 of this title .\nAmendment by  Pub. L. 101–508  effective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 11702(j) of Pub. L. 101–508 , set out as a note under  section 59 of this title .\nPub. L. 101–239, title VII, §\u202f7815(d)(1)(B) ,  Dec. 19, 1989 ,  103 Stat. 2415 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply with respect to gifts made after  June 29, 1989 .”\nAmendment by  section 7815(d)(2) of Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title V, §\u202f5033(d)(2) ,  Nov. 10, 1988 ,  102 Stat. 3673 , provided that:  “The amendments made by subsection (b) [amending this section] shall apply to gifts on or after  July 14, 1988 .”\nAmendment by  section 6152(b) of Pub. L. 100–647  applicable to transfers after  Dec. 31, 1981 , and, in the case of any estate or gift tax return filed before  Nov. 10, 1988 , such amendment inapplicable to the extent it would be inconsistent with the treatment of the annuity on such return unless executor or donor otherwise elects before the day 2 years after  Nov. 10, 1988 , the time for making such an election not to expire before such date, see section 6152(c), of  Pub. L. 100–647 , set out as a note under  section 2056 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(n)(2) ,  Oct. 22, 1986 ,  100 Stat. 2910 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply to transfers made after  December 31, 1985 .”\nAmendment by  Pub. L. 97–448  effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981,  Pub. L. 97–34 , to which such amendment relates, see  section 109 of Pub. L. 97–448 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 97–34  applicable to gifts made after  Dec. 31, 1981 , see  section 403(e)(2) of Pub. L. 97–34 , set out as a note under  section 2056 of this title .\nPub. L. 94–455, title XX, §\u202f2002(d)(2) ,  Oct. 4, 1976 ,  90 Stat. 1856 , provided that:  “The amendment made by subsection (b) [amending this section] shall apply to gifts made after  December 31, 1976 .”\nAmendment by  Pub. L. 91–614  applicable with respect to gifts made after  Dec. 31, 1970 , see  section 102(e) of Pub. L. 91–614 , set out as a note under  section 2501 of this title .\nFor provisions directing that in the case of the estate of, or gift by, an individual who was not a citizen or resident of the United States but was a resident of a foreign country with which the United States has a tax treaty with respect to estate, inheritance, or gift taxes, the amendments made by  section 5033 of Pub. L. 100–647  shall not apply to the extent such amendments would be inconsistent with the provisions of such treaty relating to estate, inheritance, or gift tax marital deductions, but that in the case of the estate of an individual dying before the date 3 years after  Dec. 19, 1989 , or a gift by an individual before the date 3 years after  Dec. 19, 1989 , the requirement of the preceding provision that the individual not be a citizen or resident of the United States shall not apply, see  section 7815(d)(14) of Pub. L. 101–239 , set out as a note under  section 2056 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nPub. L. 99–514, title XVIII, §\u202f1879(n)(3) ,  Oct. 22, 1986 ,  100 Stat. 2910 , provided that:  \n “An election under section 2523(f) of the Internal Revenue Code of 1954 [now 1986] with respect to an interest in property which— “(A)  was transferred during October 1984, and \n \n “(B)  was transferred pursuant to a trust instrument stating that the grantor’s intention was that the property of the trust would constitute qualified terminable interest property as to which a Federal gift tax marital deduction would be allowed upon the grantor’s election, \n \n\n shall be made on the return of tax imposed by section 2501 of such Code for the calendar year 1984 which is filed on or before the due date of such return or, if a timely return is not filed, on the first such return filed after the due date of such return and before  December 31, 1986 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFT TAX',
   'part': ''},
  'content': 'The deductions provided in sections 2522 and 2523 shall be allowed only to the extent that the gifts therein specified are included in the amount of gifts against which such deductions are applied.'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'A tax is hereby imposed on every generation-skipping transfer (within the meaning of subchapter B).\n1986— Pub. L. 99–514  amended section generally, substituting “(within the meaning of subchapter B)” for “in the amount determined under section 2602”.\nPub. L. 99–514, title XIV, §\u202f1433 ,  Oct. 22, 1986 ,  100 Stat. 2731 , as amended by  Pub. L. 100–647, title I, §\u202f1014(h)(1) –(3)(A), (4),  Nov. 10, 1988 ,  102 Stat. 3567 , 3568, provided that: \n “(a)   General Rule .— Except as provided in subsection (b), the amendments made by this subtitle [subtitle D (§§\u202f1431–1433) of title XIV of  Pub. L. 99–514 , amending chapter 13 of this title, enacting  section 2515 of this title , and amending sections 164, 303, 691, 2013, 2032, and 6166 of this title] shall apply to any generation-skipping transfer (within the meaning of section 2611 of the Internal Revenue Code of 1986) made after the date of the enactment of this Act [ Oct. 22, 1986 ]. \n \n “(b)   Special Rules.— “(1)   Treatment of certain inter vivos transfers made after  september 25, 1985 .— For purposes of subsection (a) (and chapter 13 of the Internal Revenue Code of 1986 as amended by this part), any inter vivos transfer after  September 25, 1985 , and on or before the date of the enactment of this Act [ Oct. 22, 1986 ] shall be treated as if it were made on the 1st day after the date of enactment of this Act. \n \n “(2)   Exceptions .— The amendments made by this subtitle shall not apply to— “(A)  any generation-skipping transfer under a trust which was irrevocable on  September 25, 1985 , but only to the extent that such transfer is not made out of corpus added to the trust after  September 25, 1985  (or out of income attributable to corpus so added), \n \n “(B)  any generation-skipping transfer under a will or revocable trust executed before the date of the enactment of this Act [ Oct. 22, 1986 ] if the decedent dies before  January 1, 1987 , and \n \n “(C)  any generation-skipping transfer— “(i)  under a trust to the extent such trust consists of property included in the gross estate of a decedent (other than property transferred by the decedent during his life after the date of the enactment of this Act [ Oct. 22, 1986 ]), or reinvestments thereof, or \n \n “(ii)  which is a direct skip which occurs by reason of the death of any decedent; \n \n\n \u2001\u2001but only if such decedent was, on the date of the enactment of this Act [ Oct. 22, 1986 ], under a mental disability to change the disposition of his property and did not regain his competence to dispose of such property before the date of his death. \n \n \n “(3)   Treatment of certain transfers to grandchildren.— “(A)   In general .— For purposes of chapter 13 of the Internal Revenue Code of 1986, the term ‘direct skip’ shall not include any transfer before  January 1, 1990 , from a transferor to a grandchild of the transferor to the extent the aggregate transfers from such transferor to such grandchild do not exceed $2,000,000. \n \n “(B)   Treatment of transfers in trust .— For purposes of subparagraph (A), a transfer in trust for the benefit of a grandchild shall be treated as a transfer to such grandchild if (and only if)— “(i)  during the life of the grandchild, no portion of the corpus or income of the trust may be distributed to (or for the benefit of) any person other than such grandchild, \n \n “(ii)  the assets of the trust will be includible in the gross estate of the grandchild if the grandchild dies before the trust is terminated, and \n \n “(iii)  all of the income of the trust for periods after the grandchild has attained age 21 will be distributed to (or for the benefit of) such grandchild not less frequently than annually. \n \n \n “(C)   Coordination with section 2653 (a)  of the 1986 code .— In the case of any transfer which would be a generation-skipping transfer but for subparagraph (A), the rules of section 2653(a) of the Internal Revenue Code of 1986 shall apply as if such transfer were a generation-skipping transfer. \n \n “(D)   Coordination with taxable terminations and taxable distributions .— For purposes of chapter 13 of the Internal Revenue Code of 1986, the terms ‘taxable termination’ and ‘taxable distribution’ shall not include any transfer which would be a direct skip but for subparagraph (A). \n \n \n “(4)   Definitions .— Terms used in this section shall have the same respective meanings as when used in chapter 13 of the Internal Revenue Code of 1986; except that section 2612(c)(2) of such Code shall not apply in determining whether an individual is a grandchild of the transferor. \n \n \n “(c)   Repeal of Existing Tax on Generation-Skipping Transfers.— “(1)   In general .— In the case of any tax imposed by chapter 13 of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]), such tax (including interest, additions to tax, and additional amounts) shall not be assessed and if assessed, the assessment shall be abated, and if collected, shall be credited or refunded (with interest) as an overpayment. \n \n “(2)   Waiver of statute of limitations .— If on the date of the enactment of this Act [ Oct. 22, 1986 ] (or at any time within 1 year after such date of enactment) refund or credit of any overpayment of tax resulting from the application of paragraph (1) is barred by any law or rule of law, refund or credit of such overpayment shall, nevertheless, be made or allowed if claim therefore [sic] is filed before the date 1 year after the date of the enactment of this Act. \n \n \n “(d)   Election for Certain Transfers Benefiting Grandchild.— “(1)   In general .— For purposes of chapter 13 of the Internal Revenue Code of 1986 (as amended by this Act) and subsection (b) of this section, any transfer in trust for the benefit of a grandchild of a transferor shall be treated as a direct skip to such grandchild if— “(A)  the transfer occurs before the date of enactment of this Act [ Oct. 22, 1986 ], \n \n “(B)  the transfer would be a direct skip to a grandchild except for the fact that the trust instrument provides that, if the grandchild dies before vesting of the interest transferred, the interest is transferred to the grandchild’s heir (rather than the grandchild’s estate), and \n \n “(C)  an election under this subsection applies to such transfer. \n \n\n Any transfer treated as a direct skip by reason of the preceding sentence shall be subject to Federal estate tax on the grandchild’s death in the same manner as if the contingent gift over had been to the grandchild’s estate. \n \n “(2)   Election .— An election under paragraph (1) shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe. \n \n\n Unless the grandchild otherwise directs by will, the estate of such grandchild shall be entitled to recover from the person receiving the property on the death of the grandchild any increase in Federal estate tax on the estate of the grandchild by reason of the preceding sentence.”\n[ Pub. L. 101–508, title XI, §\u202f11703(c)(3) ,  Nov. 5, 1990 ,  104 Stat. 1388–517 , provided that:  “Subparagraph (C) of section 1433(b)(2) of the Tax Reform Act of 1986 [ Pub. L. 99–514 , set out above] shall not exempt any generation-skipping transfer from the amendments made by subtitle D of title XVI of such Act [probably means subtitle D (§§\u202f1431–1433) of title XIV of  Pub. L. 99–514 , amending chapter 13 of this title, enacting  section 2515 of this title , and amending sections 164, 303, 691, 2013, 2032, and 6166 of this title] to the extent such transfer is attributable to property transferred by gift or by reason of the death of another person to the decedent (or trust) referred to in such subparagraph after  August 3, 1990 .” \n]\n[ Pub. L. 100–647, title I, §\u202f1014(h)(3)(B) ,  Nov. 10, 1988 ,  102 Stat. 3568 , provided that:  “Clause (iii) of section 1443(b)(3)(B) [1433(b)(3)(B)] of the Reform Act [ Pub. L. 99–514 , set out above] (as amended by subparagraph (A)) shall apply only to transfers after  June 10, 1987 .” \n]\n[ Pub. L. 100–647, title I, §\u202f1014(h)(5) ,  Nov. 10, 1988 ,  102 Stat. 3568 , provided that:  \n “Subparagraph (C) of section 1433(b)(2) of the Reform Act [ Pub. L. 99–514 , set out above] shall not exempt any direct skip from the amendments made by subtitle D of title XIV of the Reform Act [ Pub. L. 99–514 , amending chapter 13 of this title, enacting  section 2515 of this title , and amending sections 164, 303, 691, 2013, 2032, and 6166 of this title] if— \n [“(A) such direct skip results from the application of section 2044 of the 1986 Code, and \n [“(B) such direct skip is attributable to property transferred to the trust after  October 21, 1988 .” \n \n]\n[“(A) such direct skip results from the application of section 2044 of the 1986 Code, and\n[“(B) such direct skip is attributable to property transferred to the trust after  October 21, 1988 .”\nPub. L. 94–455, title XX, §\u202f2006(c) ,  Oct. 4, 1976 ,  90 Stat. 1889 , as amended by  Pub. L. 95–600, title VII, §\u202f702(n)(1) ,  Nov. 6, 1978 ,  92 Stat. 2935 ;  Pub. L. 97–34, title IV, §\u202f428 ,  Aug. 13, 1981 ,  95 Stat. 319 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [enacting this chapter and amending sections 303, 691, and 2013 of this title] shall apply to any generation-skipping transfer (within the meaning of section 2611(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) made after  June 11, 1976 . \n \n “(2)   Exceptions .— The amendments made by this section shall not apply to any generation-skipping transfer— “(A)  under a trust which was irrevocable on  June 11, 1976 , but only to the extent that the transfer is not made out of corpus added to the trust after  June 11, 1976 , or \n \n “(B)  in the case of a decedent dying before  January 1, 1983 , pursuant to a will (or revocable trust) which was in existence on  June 11, 1976 , and was not amended at any time after that date in any respect which will result in the creation of, or increasing the amount of, any generation-skipping transfer. \n \n\n For purposes of subparagraph (B), if the decedent on  June 11, 1976 , was under a mental disability to change the disposition of his property, the period set forth in such subparagraph shall not expire before the date which is 2 years after the date on which he first regains his competence to dispose of such property. \n \n “(3)   Trust equivalents .— For purposes of paragraph (2), in the case of a trust equivalent within the meaning of subsection (d) of section 2611 of the Internal Revenue Code of 1986, the provisions of such subsection (d) shall apply.”\n[Amendment of  section 2006(c) of Pub. L. 94–455 , set out above, by  section 702(n)(1) of Pub. L. 95–600 , effective  Oct. 4, 1976 , see  section 702(n)(5) of Pub. L. 95–600 , set out as an Effective Date of 1978 Amendment note under  section 2613 of this title .]'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': '1986— Pub. L. 99–514  amended section generally, substituting provisions that amount of tax imposed by section 2601 is the taxable amount (determined under subchapter C), multiplied by the applicable rate (determined under subchapter E) for former provisions which set out in detail the calculations and formulae for determining amount of tax imposed by section 2601.\n1981—Subsec. (c)(5).  Pub. L. 97–34  redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) relating to adjustments to marital deduction and providing that if the generation-skipping transfer occurs at the same time as, or within 9 months after, the death of the deemed transferor, for purposes of section 2056, relating to bequests, etc., to surviving spouse, the value of the gross estate of the deemed transferor shall be deemed to be increased by the amount of such transfer.\n1978—Subsec. (a)(1)(C).  Pub. L. 95–600, §\u202f702(h)(2) , inserted “,\u2000as modified by section 2001(e)” after “within the meaning of section 2001(b)”.\nSubsec. (d)(1)(A).  Pub. L. 95–600, §\u202f702(n)(4)(A) , inserted “(or at the same time as the death of a beneficiary of the trust assigned to a higher generation than such deemed transferor)” after “such deemed transferor”.\nSubsec. (d)(2)(A).  Pub. L. 95–600, §\u202f702(n)(4)(B) , inserted “(or beneficiary)” after “the deemed transferor”.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , but inapplicable under certain conditions under will executed before date which is 30 days after  Aug. 13, 1981 , or under trust created by such date, see  section 403(e) of Pub. L. 97–34 , set out as a note under  section 2056 of this title .\nAmendment by  section 702(h)(2) of Pub. L. 95–600  applicable to estates of decedents dying after  Dec. 31, 1976 , except that such amendment shall not apply to transfers made before  Jan. 1, 1977 , see  section 702(h)(3) of Pub. L. 95–600 , set out as a note under  section 2001 of this title .\nAmendment by  section 702(n)(4) of Pub. L. 95–600  effective as if included in this chapter as added by  section 2006 of Pub. L. 94–455 , see  section 702(n)(5) of Pub. L. 95–600 , set out as a note under  section 2613 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'In the case of a taxable distribution, the tax imposed by section 2601 shall be paid by the transferee.\nIn the case of a taxable termination or a direct skip from a trust, the tax shall be paid by the trustee.\nIn the case of a direct skip (other than a direct skip from a trust), the tax shall be paid by the transferor.\nUnless otherwise directed pursuant to the governing instrument by specific reference to the tax imposed by this chapter, the tax imposed by this chapter on a generation-skipping transfer shall be charged to the property constituting such transfer.\nFor provisions making estate and gift tax provisions with respect to transferee liability, liens, and related matters applicable to the tax imposed by section 2601, see section 2661.\n1986— Pub. L. 99–514  amended section generally, substituting tax liability provisions consisting of language placing liability, under different circumstances, on the transferee, the trustee, or the transferor, the source of the tax, and a cross reference to section 2661 for former provisions which covered the question of liability for tax with language covering the trustee and the distributee, the limitation on personal liability of the trustee who relied on certain information furnished by the Secretary, the limitation on personal liability of distributee, and the lien on property transferred until the tax was paid in full or became unenforceable by reason of lapse of time.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Section, added  Pub. L. 99–514, title XIV, §\u202f1431(a) ,  Oct. 22, 1986 ,  100 Stat. 2718 ; amended  Pub. L. 107–16, title V, §\u202f532(c)(10) ,  June 7, 2001 ,  115 Stat. 75 , related to credit for certain State generation-skipping transfer taxes.\nRepeal effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as an Effective Date of 2014 Amendment note under  section 1 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': '1988—Subsec. (a).  Pub. L. 100–647 , §§\u202f1014(g)(1), 1018(u)(43), substituted “generation-skipping transfer” for “generation-skipping transfers” and “means” for “mean”.\nSubsec. (b).  Pub. L. 100–647, §\u202f1014(g)(2) , redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1) which read as follows: “any transfer (other than a direct skip) from a trust, to the extent such transfer is subject to a tax imposed by chapter 11 or 12 with respect to a person in the 1st generation below that of the grantor, and”.\n1986— Pub. L. 99–514  amended section generally, substituting provisions defining “generation-skipping transfers” and what that term does not include, for former provisions which defined “generation-skipping transfer”, “transfer”, and “generation-skipping trust”, contained provisions to be used in determining the ascertainment of generation, and provided for a generation-skipping trust equivalent.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'If, upon the termination of an interest in property held in trust by reason of the death of a lineal descendant of the transferor, a specified portion of the trust’s assets are distributed to 1 or more skip persons (or 1 or more trusts for the exclusive benefit of such persons), such termination shall constitute a taxable termination with respect to such portion of the trust property.\nFor purposes of this chapter, the term “taxable distribution” means any distribution from a trust to a skip person (other than a taxable termination or a direct skip).\nThe term “direct skip” means a transfer subject to a tax imposed by chapter 11 or 12 of an interest in property to a skip person.\nSolely for purposes of determining whether any transfer to a trust is a direct skip, the rules of section 2651(f)(2) shall not apply.\n1997—Subsec. (c)(2).  Pub. L. 105–34, §\u202f511(b)(2) , substituted “section 2651(f)(2)” for “section 2651(e)(2)”.\nPub. L. 105–34, §\u202f511(b)(1) , redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows: “For purposes of determining whether any transfer is a direct skip, if—\n“(A) an individual is a grandchild of the transferor (or the transferor’s spouse or former spouse), and\n“(B) as of the time of the transfer, the parent of such individual who is a lineal descendant of the transferor (or the transferor’s spouse or former spouse) is dead,\nsuch individual shall be treated as if such individual were a child of the transferor and all of that grandchild’s children shall be treated as if they were grandchildren of the transferor. In the case of lineal descendants below a grandchild, the preceding sentence may be reapplied. If any transfer of property to a trust would be a direct skip but for this paragraph, any generation assignment under this paragraph shall apply also for purposes of applying this chapter to transfers from the portion of the trust attributable to such property.”\nSubsec. (c)(3).  Pub. L. 105–34, §\u202f511(b)(1) , redesignated par. (3) as (2).\n1988—Subsec. (a)(2).  Pub. L. 100–647, §\u202f1014(g)(15) , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “If, upon the termination of an interest in property held in a trust, a specified portion of the trust assets are distributed to skip persons who are lineal descendants of the holder of such interest (or to 1 or more trusts for the exclusive benefit of such persons), such termination shall constitute a taxable termination with respect to such portion of the trust property.”\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f1014(g)(7) , in closing provisions, inserted at end “If any transfer of property to a trust would be a direct skip but for this paragraph, any generation assignment under this paragraph shall apply also for purposes of applying this chapter to transfers from the portion of the trust attributable to such property.”\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f1014(g)(5)(B) , added par. (3).\n1986— Pub. L. 99–514  amended section generally, substituting provisions covering definition and application of “taxable termination”, “taxable distribution”, and “direct skip” for former provisions which indicated who the “deemed transferor” would be for purposes of this chapter and that, for purposes of determining the person deemed the transferor, a parent related to the grantor of a trust by blood or adoption was to be deemed more closely related than a parent related to a grantor by marriage.\nPub. L. 105–34, title V, §\u202f511(c) ,  Aug. 5, 1997 ,  111 Stat. 861 , provided that:  “The amendments made by this section [amending this section and  section 2651 of this title ] shall apply to terminations, distributions, and transfers occurring after  December 31, 1997 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of this chapter, the term “non-skip person” means any person who is not a skip person.\n1988—Subsec. (a)(1).  Pub. L. 100–647  inserted “natural” before “person”.\n1986— Pub. L. 99–514  amended section generally, substituting definitions of “skip person” and “non-skip person” for former provisions which defined and applied the terms “taxable distribution”, “taxable termination”, “younger generation beneficiary”, and “related or subordinate trustee”.\n1980—Subsec. (e)(2)(A)(i).  Pub. L. 96–222, §\u202f107(a)(2)(B)(i) , inserted “(other than as a potential appointee under a power of appointment held by another)” after “trust”.\nSubsec. (e)(2)(B).  Pub. L. 96–222, §\u202f107(a)(2)(B)(ii) , redesignated cls. (iii) to (v) as (iv) to (vi), added cl. (iii), and struck out cl. (vi) which related to an employee of a corporation in which the grantor or any beneficiary of the trust is an executive.\n1978—Subsec. (b)(2)(B).  Pub. L. 95–600, §\u202f702(n)(3) , substituted “a present interest and a present power” for “an interest and a power” and “present interest or present power” for “interest or power” wherever appearing.\nSubsec. (e).  Pub. L. 95–600, §\u202f702(n)(2) , inserted provisions relating to powers of independent trustees and definition of a related or subordinate trustee.\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .\nAmendment by  Pub. L. 96–222  effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978,  Pub. L. 95–600 , to which such amendment relates, see  section 201 of Pub. L. 96–222 , set out as a note under  section 32 of this title .\nPub. L. 95–600, title VII, §\u202f702(n)(5) ,  Nov. 6, 1978 ,  92 Stat. 2936 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  Except as provided in subparagraph (B), the amendments made by this subsection [amending this section,  section 2602 of this title , and provisions set out as a note under  section 2601 of this title ] shall take effect as if included in chapter 13 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as added by section 2006 of the Tax Reform Act of 1976 [ Pub. L. 94–455, title XX, §\u202f2006 ,  Oct. 4, 1976 ,  90 Stat. 1879 ]. \n \n “(B)  The amendment made by paragraph (1) [amending provisions set out as a note under  section 2601 of this title ] shall take effect on  October 4, 1976 .”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Section, added  Pub. L. 94–455, title XX, §\u202f2006(a) ,  Oct. 4, 1976 ,  90 Stat. 1887 ; amended  Pub. L. 95–600, title VII, §\u202f702(c)(1)(B) ,  Nov. 6, 1978 ,  92 Stat. 2926 ;  Pub. L. 96–223, title IV, §\u202f401(c)(3) ,  Apr. 2, 1980 ,  94 Stat. 300 , related to special rules for generation-skipping transfers, prior to the general revision of this chapter by  Pub. L. 99–514, §\u202f1431(a) .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of this chapter, if any of the tax imposed by this chapter with respect to any taxable distribution is paid out of the trust, an amount equal to the portion so paid shall be treated as a taxable distribution.\n1986— Pub. L. 99–514  amended section generally, substituting provisions relating to taxable amount in case of a taxable distribution for former provisions which related generally to administration of this chapter. See  section 2661 of this title .\n1981—Subsec. (b).  Pub. L. 97–34  substituted “Section 6166” for “Sections 6166 and 6166A” in heading and “section 6166 (relating to extension of time” for “sections 6166 and 6166A (relating to extensions of time” in text.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .\nAmendment by  Pub. L. 97–34  applicable to estates of decedents dying after  Dec. 31, 1981 , see  section 422(f)(1) of Pub. L. 97–34 , set out as a note under  section 6166 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of subsection (a), there shall be allowed a deduction similar to the deduction allowed by section 2053 (relating to expenses, indebtedness, and taxes) for amounts attributable to the property with respect to which the taxable termination has occurred.\n1986— Pub. L. 99–514  amended section generally, substituting provisions relating to taxable amount in case of a taxable termination for former provisions which authorized the Secretary to promulgate regulations. See  section 2663 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of this chapter, the taxable amount in the case of a direct skip shall be the value of the property received by the trans\xadferee.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Except as otherwise provided in this chapter, property shall be valued as of the time of the generation-skipping transfer.\nIn the case of any direct skip of property which is included in the transferor’s gross estate, the value of such property for purposes of this chapter shall be the same as its value for purposes of chapter 11 (determined with regard to sections 2032 and 2032A).\nIf 1 or more taxable terminations with respect to the same trust occur at the same time as and as a result of the death of an individual, an election may be made to value all of the property included in such terminations in accordance with section 2032.\nFor purposes of this chapter, the value of the property transferred shall be reduced by the amount of any consideration provided by the transferee.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of determining the inclusion ratio, every individual shall be allowed a GST exemption amount which may be allocated by such individual (or his executor) to any property with respect to which such individual is the transferor.\nAny allocation under subsection (a), once made, shall be irrevocable.\nFor purposes of subsection (a), the GST exemption amount for any calendar year shall be equal to the basic exclusion amount under section 2010(c) for such calendar year.\n2010—Subsec. (c).  Pub. L. 111–312  substituted “the basic exclusion amount” for “the applicable exclusion amount”.\n2001—Subsec. (a).  Pub. L. 107–16, §\u202f521(c)(1) , substituted “amount” for “of $1,000,000”.\nSubsec. (c).  Pub. L. 107–16, §\u202f521(c)(2) , amended heading and text of subsec. (c) generally, substituting provisions relating to the GST exemption amount for any calendar year for provisions which related to inflation adjustment of the $1,000,000 amount contained in subsec. (a) in the case of any calendar year after 1998 and applicability of any increase for any such calendar year.\n1998—Subsec. (c).  Pub. L. 105–206  reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “In the case of an individual who dies in any calendar year after 1998, the $1,000,000 amount contained in subsection (a) shall be increased by an amount equal to—\n“(1) $1,000,000, multiplied by\n“(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘calendar year 1997’ for ‘calendar year 1992’ in subparagraph (B) thereof.\nIf any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the next lowest multiple of $10,000.”\n1997—Subsec. (c).  Pub. L. 105–34  added subsec. (c).\nAmendment by  Pub. L. 111–312  applicable to generation-skipping transfers after  Dec. 31, 2010 , see  section 303(c)(2) of Pub. L. 111–312 , set out as a note under  section 2010 of this title .\nAmendment by  Pub. L. 107–16  applicable to estates of decedents dying, and generation-skipping transfers, after  Dec. 31, 2003 , see  section 521(e)(3) of Pub. L. 107–16 , set out as a note under  section 2010 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Any allocation by an individual of his GST exemption under section 2631(a) may be made at any time on or before the date prescribed for filing the estate tax return for such individual’s estate (determined with regard to extensions), regardless of whether such a return is required to be filed.\nThe Secretary shall prescribe by forms or regulations the manner in which any allocation referred to in paragraph (1) is to be made.\nIf any individual makes a direct skip during his lifetime, any unused portion of such individual’s GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero. If the amount of the direct skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.\nFor purposes of paragraph (1), the unused portion of an individual’s GST exemption is that portion of such exemption which has not previously been allocated by such individual (or treated as allocated under paragraph (1) or subsection (c)(1)).\nAn individual may elect to have this subsection not apply to a transfer.\nIf any individual makes an indirect skip during such individual’s lifetime, any unused portion of such individual’s GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero. If the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.\nFor purposes of this subsection, the term “indirect skip” means any transfer of property (other than a direct skip) subject to the tax imposed by chapter 12 made to a GST trust.\nFor purposes of this subsection, an indirect skip to which section 2642(f) applies shall be deemed to have been made only at the close of the estate tax inclusion period. The fair market value of such transfer shall be the fair market value of the trust property at the close of the estate tax inclusion period.\nAn election under subparagraph (A)(i)(I) shall be deemed to be timely if filed on a timely filed gift tax return for the calendar year in which the transfer was made or deemed to have been made pursuant to paragraph (4) or on such later date or dates as may be prescribed by the Secretary.\nAn election under clause (i)(II) or (ii) of subparagraph (A) may be made on a timely filed gift tax return for the calendar year for which the election is to become effective.\nFor purposes of this subsection, a person has a future interest in a trust if the trust may permit income or corpus to be paid to such person on a date or dates in the future.\nThe allocation under paragraph (1) shall be made among the properties described in subparagraph (A) thereof and the trusts described in subparagraph (B) thereof, as the case may be, in proportion to the respective amounts (at the time of allocation) of the nonexempt portions of such properties or trusts.\nFor purposes of subparagraph (A), the term “nonexempt portion” means the value (at the time of allocation) of the property or trust, multiplied by the inclusion ratio with respect to such property or trust.\n2001—Subsec. (b)(2).  Pub. L. 107–16, §\u202f561(b) , substituted “or subsection (c)(1)” for “with respect to a prior direct skip”.\nSubsecs. (c) to (e).  Pub. L. 107–16, §\u202f561(a) , added subsecs. (c) and (d) and redesignated former subsec. (c) as (e).\n1988—Subsec. (b)(2).  Pub. L. 100–647  substituted “paragraph (1) with respect to a prior direct skip)” for “paragraph (1)) with respect to a prior direct skip”.\nPub. L. 107–16, title V, §\u202f561(c) ,  June 7, 2001 ,  115 Stat. 89 , provided that: \n “(1)   Deemed allocation .— Section 2632(c) of the Internal Revenue Code of 1986 (as added by subsection (a)), and the amendment made by subsection (b) [amending this section], shall apply to transfers subject to chapter 11 or 12 made after  December 31, 2000 , and to estate tax inclusion periods ending after  December 31, 2000 . \n \n “(2)   Retroactive allocations .— Section 2632(d) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply to deaths of non-skip persons occurring after  December 31, 2000 .”\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of subsection (a), the term “maximum Federal estate tax rate” means the maximum rate imposed by section 2001 on the estates of decedents dying at the time of the taxable distribution, taxable termination, or direct skip, as the case may be.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .\nPub. L. 111–312, title III, §\u202f302(c) ,  Dec. 17, 2010 ,  124 Stat. 3302 , provided that:  “In the case of any generation-skipping transfer made after  December 31, 2009 , and before  January 1, 2011 , the applicable rate determined under section 2641(a) of the Internal Revenue Code of 1986 shall be zero.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'If a trust is severed in a qualified severance, the trusts resulting from such severance shall be treated as separate trusts thereafter for purposes of this chapter.\nIf a trust has an inclusion ratio of greater than zero and less than 1, a severance is a qualified severance only if the single trust is divided into two trusts, one of which receives a fractional share of the total value of all trust assets equal to the applicable fraction of the single trust immediately before the severance. In such case, the trust receiving such fractional share shall have an inclusion ratio of zero and the other trust shall have an inclusion ratio of 1.\nThe term “qualified severance” includes any other severance permitted under regulations prescribed by the Secretary.\nA severance pursuant to this paragraph may be made at any time. The Secretary shall prescribe by forms or regulations the manner in which the qualified severance shall be reported to the Secretary.\nIf property is transferred as a result of the death of the transferor, the value of such property for purposes of subsection (a) shall be its value as finally determined for purposes of chapter 11; except that, if the requirements prescribed by the Secretary respecting allocation of post-death changes in value are not met, the value of such property shall be determined as of the time of the distribution concerned.\nAny allocation to property transferred as a result of the death of the transferor shall be effective on and after the date of the death of the transferor.\nIf the value of property is included in the estate of a spouse by virtue of section 2044, and if such spouse is treated as the transferor of such property under section 2652(a), the value of such property for purposes of subsection (a) shall be its value for purposes of chapter 11 in the estate of such spouse.\nIn the case of a direct skip which is a nontaxable gift, the inclusion ratio shall be zero.\nIf a transfer of property is made to a trust in existence before such transfer, the applicable fraction for such trust shall be recomputed as of the time of such transfer in the manner provided in paragraph (2).\nThe term “charitable lead annuity trust” means any trust in which there is a charitable lead annuity.\nThe term “charitable lead annuity” means any interest in the form of a guaranteed annuity with respect to which a deduction was allowed under section 2055 or 2522 (as the case may be).\nUnder regulations, appropriate adjustments shall be made in the application of subsection (d) to take into account the provisions of this subsection.\nExcept as provided in regulations, any reference in this subsection to an individual or transferor shall be treated as including a reference to the spouse of such individual or transferor.\nUnder regulations, appropriate adjustments shall be made in the application of subsection (d) to take into account the provisions of this subsection.\nIn determining whether to grant relief under this paragraph, the Secretary shall take into account all relevant circumstances, including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the Secretary deems relevant. For purposes of determining whether to grant relief under this paragraph, the time for making the allocation (or election) shall be treated as if not expressly prescribed by statute.\nAn allocation of GST exemption under section 2632 that demonstrates an intent to have the lowest possible inclusion ratio with respect to a transfer or a trust shall be deemed to be an allocation of so much of the transferor’s unused GST exemption as produces the lowest possible inclusion ratio. In determining whether there has been substantial compliance, all relevant circumstances shall be taken into account, including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the Secretary deems relevant.\n2001—Subsec. (a)(3).  Pub. L. 107–16, §\u202f562(a) , added par. (3).\nSubsec. (b)(1).  Pub. L. 107–16, §\u202f563(a) , reenacted heading without change and amended text of par. (1) generally. Prior to amendment, text read as follows: “If the allocation of the GST exemption to any property is made on a gift tax return filed on or before the date prescribed by section 6075(b) or is deemed to be made under section 2632(b)(1)—\n“(A) the value of such property for purposes of subsection (a) shall be its value for purposes of chapter 12, and\n“(B) such allocation shall be effective on and after the date of such transfer.”\nSubsec. (b)(2)(A).  Pub. L. 107–16, §\u202f563(b) , reenacted heading without change and amended text of subpar. (A) generally. Prior to amendment, text read as follows: “If property is transferred as a result of the death of the transferor, the value of such property for purposes of subsection (a) shall be its value for purposes of chapter 11; except that, if the requirements prescribed by the Secretary respecting allocation of post-death changes in value are not met, the value of such property shall be determined as of the time of the distribution concerned.”\nSubsec. (g).  Pub. L. 107–16, §\u202f564(a) , added subsec. (g).\n1990—Subsec. (b)(3).  Pub. L. 101–508, §\u202f11704(a)(36) , amended  Pub. L. 100–647, §\u202f1014(g)(4)(F)(ii) . See 1988 Amendment note below.\nSubsec. (c)(2).  Pub. L. 101–508, §\u202f11703(c)(2) , inserted at end: “Rules similar to the rules of section 2652(c)(3) shall apply for purposes of subparagraph (A).”\nSubsec. (c)(2)(B).  Pub. L. 101–508, §\u202f11703(c)(1) , substituted “the trust does not terminate before the individual dies” for “such individual dies before the trust is terminated”.\nSubsec. (d)(2)(B)(i)(I).  Pub. L. 101–508, §\u202f11704(a)(17) , substituted “State” for “state”.\n1989—Subsec. (b)(1), (3).  Pub. L. 101–239  substituted “a gift tax return filed on or before the date prescribed by section 6075(b)” for “a timely filed gift tax return required by section 6019” in introductory provisions.\n1988—Subsec. (a)(2).  Pub. L. 100–647, §\u202f1014(g)(4)(B) , struck out at end “Except as provided in paragraphs (3) and (4) of subsection (b), the value determined under subparagraph (B)(i) shall be of the property as of the time of the transfer to the trust (or the direct skip).”\nSubsec. (b).  Pub. L. 100–647, §\u202f1014(g)(4)(D) , inserted “Except as provided in subsection (f)—” as introductory provision.\nSubsec. (b)(2)(A).  Pub. L. 100–647, §\u202f1014(g)(4)(C) , inserted before period at end “;\u2000except that, if the requirements prescribed by the Secretary respecting allocation of post-death changes in value are not met, the value of such property shall be determined as of the time of the distribution concerned.”\nSubsec. (b)(2)(B).  Pub. L. 100–647, §\u202f1014(g)(4)(E) , substituted “to property transferred at death” for “at or after death” in heading and “to property transferred as a result of the death of the transferor” for “at or after the death of the transferor” in text.\nSubsec. (b)(3).  Pub. L. 100–647, §\u202f1014(g)(4)(F)(ii) , as amended by  Pub. L. 101–508, §\u202f11704(a)(36) , substituted “Allocations to inter vivos transfers” for “Inter vivos allocations” in heading.\nPub. L. 100–647, §\u202f1014(g)(4)(F)(i) , substituted “to any property not transferred as a result of the death of the transferor is” for “to any property is made during the life of the transferor but is”.\nSubsec. (c).  Pub. L. 100–647, §\u202f1014(g)(17)(A) , inserted “direct skips which are” in heading and amended text generally. Prior to amendment, text read as follows:\n“(1)  Direct skips .—In the case of any direct skip which is a nontaxable gift, the inclusion ratio shall be zero.\n“(2)  Treatment of nontaxable gifts made to trusts.—\n“(A)  In general .—Except as provided in subparagraph (B), any nontaxable gift which is not a direct skip and which is made to a trust shall not be taken into account under subsection (a)(2)(B).\n“(B)  Determination of 1st transfer to trust .—In the case of any nontaxable gift referred to in subparagraph (A) which is the 1st transfer to the trust, the inclusion ratio for such trust shall be zero.\n“(3)  Nontaxable gift .—For purposes of this section, the term ‘nontaxable gift’ means any transfer of property to the extent such transfer is not treated as a taxable gift by reason of—\n“(A) section 2503(b) (taking into account the application of section 2513), or\n“(B) section 2503(e).”\nSubsec. (d)(1).  Pub. L. 100–647, §\u202f1014(g)(17)(B) , struck out “(other than a nontaxable gift)” after “transfer of property”.\nSubsec. (d)(2)(B)(i).  Pub. L. 100–647, §\u202f1014(g)(18) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “the value of the property involved in such transfer, reduced by any charitable deduction allowed under section 2055 or 2522 with respect to such property, and”.\nSubsec. (e).  Pub. L. 100–647, §\u202f1014(g)(3)(A) , added subsec. (e).\nSubsec. (f).  Pub. L. 100–647, §\u202f1014(g)(4)(A) , added subsec. (f).\nPub. L. 107–16, title V, §\u202f562(b) ,  June 7, 2001 ,  115 Stat. 90 , provided that:  “The amendment made by this section [amending this section] shall apply to severances after  December 31, 2000 .”\nPub. L. 107–16, title V, §\u202f563(c) ,  June 7, 2001 ,  115 Stat. 91 , provided that:  “The amendments made by this section [amending this section] shall apply to transfers subject to chapter 11 or 12 of the Internal Revenue Code of 1986 made after  December 31, 2000 .”\nPub. L. 107–16, title V, §\u202f564(b) ,  June 7, 2001 ,  115 Stat. 91 , provided that: \n “(1)   Relief from late elections .— Section 2642(g)(1) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply to requests pending on, or filed after,  December 31, 2000 . \n \n “(2)   Substantial compliance .— Section 2642(g)(2) of such Code (as so added) shall apply to transfers subject to chapter 11 or 12 of the Internal Revenue Code of 1986 made after  December 31, 2000 . No implication is intended with respect to the availability of relief from late elections or the application of a rule of substantial compliance on or before such date.”\nPub. L. 101–508, title XI, §\u202f11703(c)(4) ,  Nov. 5, 1990 ,  104 Stat. 1388–517 , provided that:  “The amendments made by paragraphs (1) and (2) [amending this section] shall apply to transfers after  March 31, 1988 .”\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nPub. L. 100–647, title I, §\u202f1014(g)(3)(B) ,  Nov. 10, 1988 ,  102 Stat. 3563 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply for purposes of determining the inclusion ratio with respect to property transferred after  October 13, 1987 .”\nPub. L. 100–647, title I, §\u202f1014(g)(17)(C) ,  Nov. 10, 1988 ,  102 Stat. 3567 , provided that:  “The amendments made by this paragraph [amending this section] shall apply to transfers after  March 31, 1988 .”\nAmendment by section 1014(g)(4), (18) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'For purposes of this chapter, the generation to which any person (other than the transferor) belongs shall be determined in accordance with the rules set forth in this section.\nAn individual who is a lineal descendant of a grandparent of the transferor shall be assigned to that generation which results from comparing the number of generations between the grandparent and such individual with the number of generations between the grandparent and the transferor.\nAn individual who is a lineal descendant of a grandparent of a spouse (or former spouse) of the transferor (other than such spouse) shall be assigned to that generation which results from comparing the number of generations between such grandparent and such individual with the number of generations between such grandparent and such spouse.\nA relationship by legal adoption shall be treated as a relationship by blood.\nA relationship by the half-blood shall be treated as a relationship of the whole-blood.\nAn individual who has been married at any time to the transferor shall be assigned to the transferor’s generation.\nAn individual who has been married at any time to an individual described in subsection (b) shall be assigned to the generation of the individual so described.\nThis subsection shall not apply with respect to a transfer to any individual who is not a lineal descendant of the transferor (or the transferor’s spouse or former spouse) if, at the time of the transfer, such transferor has any living lineal descendant.\nExcept as provided in regulations, an individual who, but for this subsection, would be assigned to more than 1 generation shall be assigned to the youngest such generation.\nExcept as provided in paragraph (3), if an estate, trust, partnership, corporation, or other entity has an interest in property, each individual having a beneficial interest in such entity shall be treated as having an interest in such property and shall be assigned to a generation under the foregoing provisions of this subsection.\n1997—Subsecs. (e), (f).  Pub. L. 105–34  added subsec. (e) and redesignated former subsec. (e) as (f).\n1988—Subsec. (b)(2).  Pub. L. 100–647, §\u202f1014(g)(19) , inserted “(or former spouse)” after “a spouse”.\nSubsec. (e)(3).  Pub. L. 100–647, §\u202f1014(g)(11) , amended par. (3) generally, including governmental entities among the organizations to be assigned to transferor’s generation.\nAmendment by  Pub. L. 105–34  applicable to terminations, distributions, and transfers occurring after  Dec. 31, 1997 , see  section 511(c) of Pub. L. 105–34 , set out as a note under  section 2612 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'If, under section 2513, one-half of a gift is treated as made by an individual and one-half of such gift is treated as made by the spouse of such individual, such gift shall be so treated for purposes of this chapter.\nThe term “trust” includes any arrangement (other than an estate) which, although not a trust, has substantially the same effect as a trust.\nIn the case of an arrangement which is not a trust but which is treated as a trust under this subsection, the term “trustee” shall mean the person in actual or constructive possession of the property subject to such arrangement.\nArrangements to which this subsection applies include arrangements involving life estates and remainders, estates for years, and insurance and annuity contracts.\nFor purposes of paragraph (1), an interest which is used primarily to postpone or avoid any tax imposed by this chapter shall be disregarded.\nFor purposes of this chapter, the term “executor” has the meaning given such term by section 2203.\n1998—Subsec. (b)(1).  Pub. L. 105–206, §\u202f6013(a)(4)(A) , struck out at end “Such term shall not include any trust during any period the trust is treated as part of an estate under section 645.”\nPub. L. 105–206, §\u202f6013(a)(3) , substituted “section 645” for “section 646”.\n1997—Subsec. (b)(1).  Pub. L. 105–34  inserted at end “Such term shall not include any trust during any period the trust is treated as part of an estate under section 646.”\n1988—Subsec. (a)(1).  Pub. L. 100–647, §\u202f1014(g)(9) , substituted “any property” for “a transfer of a kind” in subpars. (A) and (B) and inserted at end “An individual shall be treated as transferring any property with respect to which such individual is the transferor.”\nSubsec. (a)(3).  Pub. L. 100–647, §\u202f1014(g)(14) , substituted “any trust” for “any property” in subpars. (A) and (B) and “may elect to treat all of the property in such trust” for “may elect to treat such property” in closing provisions.\nSubsec. (c)(2).  Pub. L. 100–647, §\u202f1014(g)(8) , struck out “nominal” before “interests” in heading and substituted “any tax” for “the tax” in text.\nSubsec. (c)(3).  Pub. L. 100–647, §\u202f1014(g)(6) , added par. (3).\nSubsec. (d).  Pub. L. 100–647, §\u202f1014(g)(20) , added subsec. (d).\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates, see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–34  applicable with respect to estates of decedents dying after  Aug. 5, 1997 , see  section 1305(d) of Pub. L. 105–34 , set out as an Effective Date note under  section 645 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Except as provided in paragraph (2), the provisions of subsection (a) shall not affect the inclusion ratio determined with respect to any trust. Under regulations prescribed by the Secretary, notwithstanding the preceding sentence, proper adjustment shall be made to the inclusion ratio with respect to such trust to take into account any tax under this chapter borne by such trust which is imposed by this chapter on the transfer described in subsection (a).\nIf the generation-skipping transfer referred to in subsection (a) involves the transfer of property from 1 trust to another trust (hereinafter in this paragraph referred to as the “pour-over trust”), the inclusion ratio for the pour-over trust shall be determined by treating the nontax portion of such distribution as if it were a part of a GST exemption allocated to such trust.\nFor purposes of subparagraph (A), the nontax portion of any distribution is the amount of such distribution multiplied by the applicable fraction which applies to such distribution.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Except as provided in paragraph (2), if property is transferred in a generation-skipping transfer, the basis of such property shall be increased (but not above the fair market value of such property) by an amount equal to that portion of the tax imposed by section 2601 with respect to the transfer which is attributable to the excess of the fair market value of such property over its adjusted basis immediately before the transfer. The preceding shall be applied after any basis adjustment under section 1015 with respect to the transfer.\nIf property is transferred in a taxable termination which occurs at the same time as and as a result of the death of an individual, the basis of such property shall be adjusted in a manner similar to the manner provided under section 1014(a); except that, if the inclusion ratio with respect to such property is less than 1, any increase or decrease in basis shall be limited by multiplying such increase or decrease (as the case may be) by the inclusion ratio.\nFor provisions relating to the effect of a qualified disclaimer for purposes of this chapter, see section 2518.\n2014—Subsec. (a)(1).  Pub. L. 113–295  struck out “(computed without regard to section 2604)” after “section 2601”.\n1998—Subsec. (b).  Pub. L. 105–206  inserted at end “For purposes of this subsection, a trust shall be treated as part of an estate during any period that the trust is so treated under section 645.”\n1989—Subsec. (a)(1).  Pub. L. 101–239  inserted at end “The preceding shall be applied after any basis adjustment under section 1015 with respect to the transfer.”\n1988—Subsec. (a)(2).  Pub. L. 100–647, §\u202f1014(g)(12) , inserted “or decrease” after “any increase” and “or decrease (as the case may be)” after “such increase”.\nSubsec. (b).  Pub. L. 100–647, §\u202f1014(g)(13) , substituted “Certain trusts” for “Separate shares” in heading and amended text generally. Prior to amendment, text read as follows: “Substantially separate and independent shares of different beneficiaries in a trust shall be treated as separate trusts.”\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 105–206  effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997,  Pub. L. 105–34 , to which such amendment relates (see  section 1305 of Pub. L. 105–34 ), see  section 6024 of Pub. L. 105–206 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 101–239  effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988,  Pub. L. 100–647 , to which such amendment relates, see  section 7817 of Pub. L. 101–239 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Section applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'The Secretary may by regulations require a return to be filed containing such information as he determines to be necessary for purposes of this chapter.\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .\nPub. L. 111–312, title III, §\u202f301(d)(2) ,  Dec. 17, 2010 ,  124 Stat. 3300 , provided that:  “In the case of any generation-skipping transfer made after  December 31, 2009 , and before the date of the enactment of this Act [ Dec. 17, 2010 ], the due date for filing any return under section 2662 of the Internal Revenue Code of 1986 (including any election required to be made on such a return) shall not be earlier than the date which is 9 months after the date of the enactment of this Act.”'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': '1988—Par. (3).  Pub. L. 100–647  added par. (3).\nAmendment by  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nSection applicable to generation-skipping transfers (within the meaning of  section 2611 of this title ) made after  Oct. 22, 1986 , except as otherwise provided, see  section 1433 of Pub. L. 99–514 , set out as a note under  section 2601 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'TAX ON GENERATION-SKIPPING TRANSFERS',
   'part': ''},
  'content': 'Section, added  Pub. L. 107–16, title V, §\u202f501(b) ,  June 7, 2001 ,  115 Stat. 69 , related to termination of applicability of chapter to generation-skipping transfers after  Dec. 31, 2009 .\nRepeal of section applicable to estates of decedents dying, and transfers made after  Dec. 31, 2009 , except as otherwise provided, see  section 301(e) of Pub. L. 111–312 , set out as an Effective and Termination Dates of 2010 Amendment note under  section 121 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'SPECIAL VALUATION RULES',
   'part': ''},
  'content': 'The value of any right described in paragraph (1), other than a distribution right which consists of a right to receive a qualified payment, shall be treated as being zero.\nIn the case of an applicable retained interest which is described in subparagraph (B)(i) but not subparagraph (B)(ii), the value of the distribution right shall be determined without regard to this section.\nThe term “junior equity interest” means common stock or, in the case of a partnership, any partnership interest under which the rights as to income and capital (or, to the extent provided in regulations, the rights as to either income or capital) are junior to the rights of all other classes of equity interests.\nThe term “equity interest” means stock or any interest as a partner, as the case may be.\nIn the case of a corporation, the term “control” means the holding of at least 50 percent (by vote or value) of the stock of the corporation.\nFor purposes of this subsection, the term “applicable family member” includes any lineal descendant of any parent of the transferor or the transferor’s spouse.\nThe term “liquidation, put, call, or conversion right” means any liquidation, put, call, or conversion right, or any similar right, the exercise or nonexercise of which affects the value of the transferred interest.\nThe term “liquidation, put, call, or conversion right” does not include any right which must be exercised at a specific time and at a specific amount.\nIf a right is assumed to be exercised in a particular manner under subsection (a)(3)(B), such right shall be treated as so exercised for purposes of clause (i).\nExcept as otherwise provided in this paragraph, the term “qualified payment” means any dividend payable on a periodic basis under any cumulative preferred stock (or a comparable payment under any partnership interest) to the extent that such dividend (or comparable payment) is determined at a fixed rate.\nFor purposes of subparagraph (A), a payment shall be treated as fixed as to rate if such payment is determined at a rate which bears a fixed relationship to a specified market interest rate.\nPayments under any interest held by a transferor which (without regard to this subparagraph) are qualified payments shall be treated as qualified payments unless the transferor elects not to treat such payments as qualified payments. Payments described in the preceding sentence which are held by an applicable family member shall be treated as qualified payments only if such member elects to treat such payments as qualified payments.\nA transferor or applicable family member holding any distribution right which (without regard to this subparagraph) is not a qualified payment may elect to treat such right as a qualified payment, to be paid in the amounts and at the times specified in such election. The preceding sentence shall apply only to the extent that the amounts and times so specified are not inconsistent with the underlying legal instrument giving rise to such right.\nAny election under this subparagraph with respect to an interest shall, once made, be irrevocable.\nFor purposes of this subparagraph, the term “equity interest” has the meaning given such term by subsection (a)(4)(B).\nFor purposes of subparagraph (A), any payment of any distribution during the 4-year period beginning on its due date shall be treated as having been made on such due date.\nSubparagraph (A)(i) shall not apply to any interest includible in the gross estate of the transferor if a deduction with respect to such interest is allowable under section 2056 or 2106(a)(3).\nIf an event is not treated as a taxable event by reason of this subparagraph, the transferee spouse or surviving spouse (as the case may be) shall be treated in the same manner as the transferor in applying this subsection with respect to the interest involved.\nFor purposes of this subsection, an applicable family member shall be treated in the same manner as the transferor with respect to any distribution right retained by such family member to which subsection (a)(3)(B) or (C) applied.\nIn the case of a taxable event described in paragraph (3)(A)(ii) involving the transfer of an applicable retained interest to an applicable family member (other than the spouse of the transferor), the applicable family member shall be treated in the same manner as the transferor in applying this subsection to distributions accumulating with respect to such interest after such taxable event.\nIn the case of a taxable event described in paragraph (3)(A)(ii) involving a transfer of an applicable retained interest from an applicable family member to a transferor, this subsection shall continue to apply to the transferor during any period the transferor holds such interest.\nFor purposes of this subsection, any termination of an interest shall be treated as a transfer.\nAn individual shall be treated as holding any interest to the extent such interest is held indirectly by such individual through a corporation, partnership, trust, or other entity. If any individual is treated as holding any interest by reason of the preceding sentence, any transfer which results in such interest being treated as no longer held by such individual shall be treated as a transfer of such interest.\nA relationship by legal adoption shall be treated as a relationship by blood.\nUnder regulations prescribed by the Secretary, if there is any subsequent transfer, or inclusion in the gross estate, of any applicable retained interest which was valued under the rules of subsection (a), appropriate adjustments shall be made for purposes of chapter 11, 12, or 13 to reflect the increase in the amount of any prior taxable gift made by the transferor or decedent by reason of such valuation or to reflect the application of subsection (d).\nThe Secretary may by regulation provide that any applicable retained interest shall be treated as 2 or more separate interests for purposes of this section.\n1996—Subsec. (a)(3)(B).  Pub. L. 104–188, §\u202f1702(f)(1)(B) , inserted “certain” before “qualified” in heading.\nSubsec. (a)(3)(C).  Pub. L. 104–188, §\u202f1702(f)(1)(A) , added subpar. (C).\nSubsec. (a)(4)(B)(i).  Pub. L. 104–188, §\u202f1702(f)(2) , inserted “(or, to the extent provided in regulations, the rights as to either income or capital)” after “income and capital”.\nSubsec. (b)(2)(C).  Pub. L. 104–188, §\u202f1702(f)(3)(A) , added subpar. (C).\nSubsec. (c)(1)(B)(i).  Pub. L. 104–188, §\u202f1702(f)(4) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “a right to distributions with respect to any junior equity interest (as defined in subsection (a)(4)(B)(i)),”.\nSubsec. (c)(3)(C)(i).  Pub. L. 104–188, §\u202f1702(f)(5)(A) , amended cl. (i) generally. Prior to amendment, cl. (i) read as follows:\n“(i)  Waiver of qualified payment treatment .—A transferor or applicable family member may elect with respect to payments under any interest specified in such election to treat such payments as payments which are not qualified payments.”\nSubsec. (c)(3)(C)(ii).  Pub. L. 104–188, §\u202f1702(f)(5)(B) , amended first sentence generally. Prior to amendment, first sentence read as follows: “A transferor or any applicable family member may elect to treat any distribution right as a qualified payment, to be paid in the amounts and at the times specified in such election.”\nSubsec. (d)(1).  Pub. L. 104–188, §\u202f1702(f)(1)(C) , substituted “subsection (a)(3)(B) or (C)” for “subsection (a)(3)(B)”.\nSubsec. (d)(3)(A)(iii).  Pub. L. 104–188, §\u202f1702(f)(6) , struck out “the period ending on the date of” after “with respect to”.\nSubsec. (d)(3)(B)(ii)(I).  Pub. L. 104–188, §\u202f1702(f)(7) , inserted “or the exclusion under section 2503(b),” after “section 2523,”.\nSubsec. (d)(4)(A).  Pub. L. 104–188, §\u202f1702(f)(1)(C) , substituted “subsection (a)(3)(B) or (C)” for “subsection (a)(3)(B)”.\nSubsec. (d)(4)(C).  Pub. L. 104–188, §\u202f1702(f)(9) , added subpar. (C).\nSubsec. (e)(3).  Pub. L. 104–188, §\u202f1702(f)(3)(B) , substituted “Attribution of indirect holdings and transfers” for “Attribution rules” in par. heading, struck out subpar. (A) designation and heading which read “Indirect holdings and transfers”, and struck out subpar. (B) which read as follows:\n“(B)  Control .—For purposes of subsections (b)(1), an individual shall be treated as holding any interest held by the individual’s brothers, sisters, or lineal descendants.”\nSubsec. (e)(5)(A).  Pub. L. 104–188, §\u202f1702(f)(8)(A) , substituted “such transaction” for “such contribution to capital or such redemption, recapitalization, or other change”.\nSubsec. (e)(5)(B).  Pub. L. 104–188, §\u202f1702(f)(8)(B) , substituted “such transaction” for “the transfer”.\nSubsec. (e)(6).  Pub. L. 104–188, §\u202f1702(f)(10) , inserted “or to reflect the application of subsection (d)” before period at end.\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .\nPub. L. 101–508, title XI, §\u202f11602(e)(1) ,  Nov. 5, 1990 ,  104 Stat. 1388–500 , provided that: \n “(A)   In general .— The amendments made by subsection (a) [enacting this chapter]— “(i)  to the extent such amendments relate to sections 2701 and 2702 of the Internal Revenue Code of 1986 (as added by such amendments), shall apply to transfers after  October 8, 1990 , \n \n “(ii)  to the extent such amendments relate to section 2703 of such Code (as so added), shall apply to— “(I)  agreements, options, rights, or restrictions entered into or granted after  October 8, 1990 , and \n \n “(II)  agreements, options, rights, or restrictions which are substantially modified after  October 8, 1990 , and \n \n \n “(iii)  to the extent such amendments relate to section 2704 of such Code (as so added), shall apply to restrictions or rights (or limitations on rights) created after  October 8, 1990 . \n \n \n “(B)   Exception .— For purposes of subparagraph (A)(i), with respect to property transferred before  October 9, 1990 — “(i)  any failure to exercise a right of conversion, \n \n “(ii)  any failure to pay dividends, and \n \n “(iii)  any failure to exercise other rights specified in regulations, \n \n\n shall not be treated as a subsequent transfer.”\nPub. L. 104–188, title I, §\u202f1702(f)(5)(C) ,  Aug. 20, 1996 ,  110 Stat. 1871 , provided that:  “The time for making an election under the second sentence of section 2701(c)(3)(C)(i) of the Internal Revenue Code of 1986 (as amended by subparagraph (A)) shall not expire before the due date (including extensions) for filing the transferor’s return of the tax imposed by section 2501 of such Code for the first calendar year ending after the date of enactment [probably means the date of enactment of  Pub. L. 104–188 ,  Oct. 20, 1996 ].”\nPub. L. 101–508, title XI, §\u202f11602(d) ,  Nov. 5, 1990 ,  104 Stat. 1388–500 , directed the Secretary of the Treasury to conduct a study of the prevalence and types of options and agreements used to distort the valuation of property for purposes of subtitle B of the Internal Revenue Code of 1986, and other methods using discretionary rights to distort this valuation, and report to Congress the results of the study, together with any legislative recommendations, not later than  Dec. 31, 1992 .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'SPECIAL VALUATION RULES',
   'part': ''},
  'content': 'Solely for purposes of determining whether a transfer of an interest in trust to (or for the benefit of) a member of the transferor’s family is a gift (and the value of such transfer), the value of any interest in such trust retained by the transferor or any applicable family member (as defined in section 2701(e)(2)) shall be determined as provided in paragraph (2).\nThe value of any retained interest which is not a qualified interest shall be treated as being zero.\nThe value of any retained interest which is a qualified interest shall be determined under section 7520.\nFor purposes of subparagraph (A), the term “incomplete gift” means any transfer which would not be treated as a gift whether or not consideration was received for such transfer.\nThe transfer of an interest in property with respect to which there is 1 or more term interests shall be treated as a transfer of an interest in a trust.\nIf 2 or more members of the same family acquire interests in any property described in paragraph (1) in the same transaction (or a series of related transactions), the person (or persons) acquiring the term interests in such property shall be treated as having acquired the entire property and then transferred to the other persons the interests acquired by such other persons in the transaction (or series of transactions). Such transfer shall be treated as made in exchange for the consideration (if any) provided by such other persons for the acquisition of their interests in such property.\nIn the case of a transfer of an income or remainder interest with respect to a specified portion of the property in a trust, only such portion shall be taken into account in applying this section to such transfer.\nFor purposes of this section, the term “member of the family” shall have the meaning given such term by section 2704(c)(2).\n1996—Subsec. (a)(3)(A)(i).  Pub. L. 104–188, §\u202f1702(f)(11)(A)(i) , (ii), (B)(i), substituted “if” for “to the extent” and “incomplete gift” for “incomplete transfer”, and struck out “or” at end.\nSubsec. (a)(3)(A)(ii).  Pub. L. 104–188, §\u202f1702(f)(11)(A)(iii) , substituted “,\u2000or” for period at end.\nSubsec. (a)(3)(A)(iii).  Pub. L. 104–188, §\u202f1702(f)(11)(A)(iv) , added cl. (iii).\nSubsec. (a)(3)(B).  Pub. L. 104–188, §\u202f1702(f)(11)(B) , substituted “incomplete gift” for “incomplete transfer” in heading and text.\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'SPECIAL VALUATION RULES',
   'part': ''},
  'content': 'The Secretary may by regulations apply this subsection to rights similar to voting and liquidation rights.\nThe Secretary may by regulations provide that other restrictions shall be disregarded in determining the value of the transfer of any interest in a corporation or partnership to a member of the transferor’s family if such restriction has the effect of reducing the value of the transferred interest for purposes of this subtitle but does not ultimately reduce the value of such interest to the transferee.\nThe term “control” has the meaning given such term by section 2701(b)(2).\nThe rule of section 2701(e)(3) shall apply for purposes of determining the interests held by any individual.\n1996—Subsec. (c)(3).  Pub. L. 104–188  substituted “section 2701(e)(3)” for “section 2701(e)(3)(A)”.\nAmendment by  Pub. L. 104–188  effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990,  Pub. L. 101–508, title XI , to which such amendment relates, see  section 1702(i) of Pub. L. 104–188 , set out as a note under  section 38 of this title .'},
 {'metadata': {'subtitle': 'Estate and Gift Taxes',
   'chapter': 'GIFTS AND BEQUESTS FROM EXPATRIATES',
   'part': ''},
  'content': 'The tax imposed by subsection (a) on any covered gift or bequest shall be paid by the person receiving such gift or bequest.\nSubsection (a) shall apply only to the extent that the value of covered gifts and bequests received by any person during the calendar year exceeds the dollar amount in effect under section 2503(b) for such calendar year.\nThe tax imposed by subsection (a) on any covered gift or bequest shall be reduced by the amount of any gift or estate tax paid to a foreign country with respect to such covered gift or bequest.\nSuch term shall not include any property with respect to which a deduction would be allowed under section 2055, 2056, 2522, or 2523, whichever is appropriate, if the decedent or donor were a United States person.\nIn the case of a covered gift or bequest made to a foreign trust, subsection (a) shall apply to any distribution attributable to such gift or bequest from such trust (whether from income or corpus) to a United States citizen or resident in the same manner as if such distribution were a covered gift or bequest.\nThere shall be allowed as a deduction under section 164 the amount of tax imposed by this section which is paid or accrued by a United States citizen or resident by reason of a distribution from a foreign trust, but only to the extent such tax is imposed on the portion of such distribution which is included in the gross income of such citizen or resident.\nSolely for purposes of this section, a foreign trust may elect to be treated as a domestic trust. Such an election may be revoked with the consent of the Secretary.\nFor purposes of this section, the term “covered expatriate” has the meaning given to such term by section 877A(g)(1).\n2014—Subsec. (a)(1).  Pub. L. 113–295  struck out “(or, if greater, the highest rate of tax specified in the table applicable under section 2502(a) as in effect on the date)” after “such receipt”.\nAmendment by  Pub. L. 113–295  effective as if included in the provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,  Pub. L. 111–312 , to which such amendment relates, see  section 206(d) of Pub. L. 113–295 , set out as a note under  section 32 of this title .\nPub. L. 110–245, title III, §\u202f301(g) ,  June 17, 2008 ,  122 Stat. 1647 , provided that: \n “(1)   In general .— Except as provided in this subsection, the amendments made by this section [enacting this chapter and  section 877A of this title  and amending sections 877, 6039G, and 7701 of this title] shall apply to any individual whose expatriation date (as so defined) is on or after the date of the enactment of this Act [ June 17, 2008 ]. \n \n “(2)   Gifts and bequests .— Chapter 15 of the Internal Revenue Code of 1986 (as added by subsection (b)) shall apply to covered gifts and bequests (as defined in section 2801 of such Code, as so added) received on or after the date of the enactment of this Act from transferors (or from the estates of transferors) whose expatriation date is on or after such date of enactment.”'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'In addition to other taxes, there is hereby imposed on the income of every individual a tax equal to 6.2 percent of the wages (as defined in section 3121(a)) received by the individual with respect to employment (as defined in section 3121(b)).\nIn addition to the tax imposed by the preceding subsection, there is hereby imposed on the income of every individual a tax equal to 1.45 percent of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b)).\nDuring any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, wages received by or paid to an individual shall be exempt from the taxes imposed by this section to the extent that such wages are subject under such agreement exclusively to the laws applicable to the social security system of such foreign country.\nSection 233 of the Social Security Act, referred to in subsec. (c), is classified to  section 433 of Title 42 , The Public Health and Welfare.\n2018—Subsec. (a).  Pub. L. 115–141  inserted period at end.\n2014—Subsec. (a).  Pub. L. 113–295  substituted “6.2 percent of the wages (as defined in section 3121(a)) received by the individual with respect to employment (as defined in section 3121(b))” for “the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b))—” and table of rates.\n2010—Subsec. (b).  Pub. L. 111–148, §\u202f9015(a)(1) , designated existing text as par. (1), inserted heading, substituted “1.45 percent of the” for “the following percentages of the” and “(as defined in section 3121(b)).” for “(as defined in section 3121(b))—”, struck out former pars. (1) to (6), which related to rates in calendar years 1974 to 1985 and after  Dec. 31, 1985 , and added par. (2).\nSubsec. (b)(2).  Pub. L. 111–152, §\u202f1402(b)(1)(A) , added subpar. (B) and redesignated former subpar. (B) as (C).\nPub. L. 111–148, §\u202f10906(a) , substituted “0.9 percent” for “0.5 percent” in introductory provisions.\n2004—Subsec. (c).  Pub. L. 108–203  substituted “exclusively to the laws applicable to” for “to taxes or contributions for similar purposes under”.\n1983—Subsec. (a).  Pub. L. 98–21  substituted table of rates for former pars. (1) to (7) which had imposed a tax on the income of every individual (1) with respect to wages received during the calendar years 1974 through 1977 at the rate of 4.95 percent; (2) with respect to wages received during the calendar year 1978 at the rate of 5.05 percent; (3) with respect to wages received during the calendar years 1979 and 1980 at the rate of 5.08 percent; (4) with respect to wages received during the calendar year 1981 at the rate of 5.35 percent; (5) with respect to wages received during the calendar years 1982 through 1984 at the rate of 5.40 percent; (6) with respect to wages received during the calendar years 1985 through 1989 at the rate of 5.70 percent; and (7) with respect to wages received after  Dec. 31, 1989 , at the rate of 6.20 percent.\n1977—Subsec. (a).  Pub. L. 95–216, §\u202f101(a)(1) , substituted “1974 through 1977” for “1974 through 2010” in par. (1), substituted “wages received during the calendar year 1978, the rate shall be 5.05 percent” for “wages received after  December 31, 2010 , the rate shall be 5.95 percent” in par. (2), and added pars. (3) to (7).\nSubsec. (b).  Pub. L. 95–216, §\u202f101(b)(1) , substituted “wages received during the calendar year 1978, the rate shall be 1.00 percent” for “wages received during the calendar years 1978 through 1980, the rate shall be 1.10 percent” in par. (2), substituted “wages received during the calendar years 1979 and 1980, the rate shall be 1.05 percent” for “wages received during the calendar years 1981 through 1985, the rate shall be 1.35 percent”, in par. (3), substituted “wages received during the calendar years 1981 through 1984, the rate shall be 1.30 percent” for “wages received after  December 31, 1985 , the rate shall be 1.50 percent” in par. (4), and added pars. (5) and (6).\nSubsec. (c).  Pub. L. 95–216, §\u202f317(b)(2) , added subsec. (c).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1903(a)(1)(A) , redesignated pars. (5) and (6) as (1) and (2), respectively. Former pars. (1) to (4), which related to a tax rate of 3.8 percent with respect to wages received during the calendar year 1968, a tax rate of 4.2 percent with respect to wages received during the calendar years 1969 and 1970, a tax rate of 4.6 percent with respect to wages received during the calendar years 1971 and 1972, and a tax rate of 4.85 percent with respect to wages received during the calendar year 1973, respectively, were struck out.\nSubsec. (b).  Pub. L. 94–455, §\u202f1903(a)(1)(B) , redesignated pars. (3) to (6) as (1) to (4), respectively. Former pars. (1) and (2), which related to a tax rate of .60 percent with respect to wages received during the calendar years 1968, 1969, 1970, 1971, and 1972 and a tax rate of 1.0 percent with respect to wages received during the calendar year 1973, respectively, were struck out.\n1973—Subsec. (a)(4).  Pub. L. 93–233, §\u202f6(a)(1) , struck out provision for application of 4.85 percent rate of tax during calendar years 1974, 1975, 1976, and 1977.\nSubsec. (a)(5).  Pub. L. 93–233, §\u202f6(a)(1) , increased rate of tax from 4.80 percent to 4.95 percent and substituted calendar year “1974” for “1978” as the initial year for application of such rate.\nSubsec. (a)(6).  Pub. L. 93–233, §\u202f6(a)(1) , increased rate of tax from 5.85 percent to 5.95 percent.\nSubsec. (b)(2).  Pub. L. 93–233, §\u202f6(b)(2) , struck out provision for application of 1.0 percent rate of tax during calendar years 1974, 1975, 1976, and 1977.\nSubsec. (b)(3).  Pub. L. 93–233, §\u202f6(b)(2) , incorporated former provision of par. (2) for taxation of wages received during calendar years 1974, 1975, 1976, and 1977, decreased the applicable rate of tax from 1.0 percent to 0.90 percent, and struck out provision for 1.25 percent rate of tax for calendar years 1978, 1979, 1980.\nSubsec. (b)(4).  Pub. L. 93–233, §\u202f6(b)(2) , incorporated former provision of par. (3) for taxation of wages received during calendar years 1978, 1979, and 1980, decreased the applicable rate of tax from 1.25 percent to 1.10 percent, and struck out provision for 1.35 percent rate of tax for calendar years 1981, 1982, 1983, 1984, and 1985.\nSubsec. (b)(5).  Pub. L. 93–233, §\u202f6(b)(2) , incorporated former provision of par. (4) for taxation of wages received during calendar years 1981 through 1985 at applicable 1.35 percent rate of tax and struck out provision for 1.45 percent rate of tax for wages received after  Dec. 31, 1985 .\nSubsec. (b)(6).  Pub. L. 93–233, §\u202f6(b)(2) , incorporated former provision of par. (5) for taxation of wages received after  Dec. 31, 1985  and increased the applicable rate of tax from 1.45 to 1.50 percent.\n1972—Subsec. (a)(3).  Pub. L. 92–603, §\u202f135(a)(2)(A) , substituted “the calendar years 1971 and 1972” for “any of the calendar years 1971 through 1977”.\nSubsec. (a)(3) to (5).  Pub. L. 92–336, §\u202f204(a)(2) , substituted “any of the calendar years 1971 through 1977” for “the calendar years 1971 and 1972” in par. (3), “any of the calendar years 1978 through 2010” for “the calendar years 1973, 1974, and 1975” and “4.5” for “5.0” in par. (4), and “ December 31, 2010 ” for “ December 31, 1975 ” and “5.35” for “5.15” in par. (5).\nSubsec. (a)(4).  Pub. L. 92–603, §\u202f135(a)(2)(B) , substituted “wages received during the calendar years 1973, 1974, 1975, 1976, and 1977, the rate shall be 4.85 percent;” for “wages paid during any of the calendar years 1978 through 2010, the rate shall be 4.5 per cent; and”.\nSubsec. (a)(5).  Pub. L. 92–603, §\u202f135(a)(2)(B) , substituted “wages received during the calendar years 1978 through 2010, the rate shall be 4.80 percent; and” for “wages paid after  December 31, 2010 , the rate shall be 5.35 percent”.\nSubsec. (a)(6).  Pub. L. 92–603, §\u202f135(a)(2)(B) , added par. (6).\nSubsec. (b)(2).  Pub. L. 92–603, §\u202f135(b)(2) , increased rate of tax from 0.9 percent to 1.0 percent.\nSubsec. (b)(2) to (5).  Pub. L. 92–336, §\u202f204(b)(2) , inserted references to 1976 and 1977 and substituted “0.9” for “0.65” in par. (2), substituted references for the calendar years 1978 through 1985 for references to the calendar years 1976 through 1979 and substituted “1.0” for “0.70” in par. (3), substituted references for the calendar years 1986 through 1992 for references to the calendar years 1980 through 1986 and substituted “1.1” for “0.80” in par. (4), and substituted “1992” for “1986” and “1.2” for “0.90” in par. (5).\nSubsec. (b)(3).  Pub. L. 92–603, §\u202f135(b)(2) , substituted “and 1980, the rate shall be 1.25 percent” for “1980, 1981, 1982, 1983, 1984, and 1985, the rate shall be 1.0 percent”.\nSubsec. (b)(4).  Pub. L. 92–603, §\u202f135(b)(2) , substituted “1981, 1982, 1983, 1984, and 1985, the rate shall be 1.35 percent; and” for “1986, 1987, 1988, 1990, 1991, and 1992, the rate shall be 1.1 percent; and”.\nSubsec. (b)(5).  Pub. L. 92–603, §\u202f135(b)(2) , substituted “ December 31, 1985 , the rate shall be 1.45 percent” for “ December 31, 1992 , the rate shall be 1.2 percent”.\n1971—Subsec. (a)(4).  Pub. L. 92–5  substituted “with respect to wages received during the calendar years 1973, 1974, and 1975, the rate shall be 5.0 percent; and” for “with respect to wages received after  December 31, 1972 , the rate shall be 5.0 percent”.\nSubsec. (a)(5).  Pub. L. 92–5  added par. (5).\n1968—Subsec. (a)(1) to (4).  Pub. L. 90–248, §\u202f109(a)(2) , substituted “1968” and “3.8” for “1966” and “3.85” in par. (1) and “1969 and 1970” and “4.2” for “1967 and 1968” and “3.9” in par. (2), struck out reference to calendar years 1969 and 1970 from par. (3) and substituted “4.6” and “4.4”, and substituted “5.0” for “4.85” in par. (4).\nSubsec. (b)(1) to (5).  Pub. L. 90–248, §\u202f109(b)(2) , struck out par. (1) provision for employee rate of 0.35 percent of wages received with respect to employment during calendar year 1966, redesignated pars. (2) to (6) as (1) to (5), struck out reference to “1967” in such par. (1) and increased the rate by 0.10 percent to 0.60, 0.65, 0.70, 0.80, and 0.90 in pars. (1) to (5), respectively.\n1965— Pub. L. 89–97, §\u202f321(b) , divided the total tax imposed under the entire section upon income through a tax equal to percentages of wages into two separate taxes by dividing the section into subsecs. (a) and (b), with subsec. (a) reflecting the tax for old-age, survivors, and disability insurance and subsec. (b) reflecting the tax for hospital insurance, but, in the case of subsec. (b), without regard to the provisions of section 3121(b)(9) insofar as it relates to employees; increased from 4⅛ percent to 4.20 percent the rate of total tax imposed by the entire section upon wages received during calendar year 1966 (resulting from a tax of 3.85 percent under subsec. (a) and 0.35 percent under subsec. (b)), increased from 4⅛ percent to 4.40 percent the rate of total tax imposed by the entire section upon wages received during calendar year 1967 (resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), reduced from 4⅝ percent to 4.40 percent the rate of total tax imposed by the entire section upon wages received during calendar year 1968, (resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 4⅝ percent to 4.90 percent the rate for calendar years 1969, 1970, 1971, and 1972 (resulting from a tax of 4.4 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 4⅝ percent to 5.40 percent the rate for calendar years 1973, 1974, and 1975, (resulting from a tax of 4.85 percent under subsec. (a) and 0.55 percent under subsec. (b)), increased from 4⅝ percent to 5.45 percent the rate for calendar years 1976, 1977, 1978, and 1979 (resulting from a tax of 4.85 percent under subsec. (a) and 0.60 percent under subsec. (b)), increased from 4⅝ percent to 5.55 percent the rate for calendar years 1980 through 1986 (resulting from a tax of 4.85 percent under subsec. (a) and 0.70 percent under subsec. (b)), and increased the rate for calendar years after  Dec. 31, 1986 , to 5.65 percent (resulting from a tax of 4.85 percent under subsec. (a) and 0.80 percent under subsec. (b)).\nSubsec. (b).  Pub. L. 89–97, §\u202f111(c)(5) , struck out “,\u2000but without regard to the provisions of paragraph (9) thereof insofar as it relates to employees” after “as defined in section 3121(b)”.\n1961— Pub. L. 87–64  increased rate of tax for calendar year 1962 from 3 to 3⅛ percent, calendar years 1963 to 1965, inclusive, from 3½ to 3⅝ percent, calendar years 1966 and 1967 from 4 to 4⅛ percent, calendar year 1968 from 4 to 4⅝ percent, and for calendar years after  December 31, 1968 , from 4½ to 4⅝ percent.\n1958— Pub. L. 85–840  increased rate of tax by substituting provisions imposing a tax of 2½% for calendar year 1959, 3% for calendar years 1960 to 1962, 3½% for calendar years 1963 to 1965, 4% for calendar years 1966 to 1968, and 4½% for calendar years beginning after  Dec. 31, 1968 , for provisions which imposed a tax of 2¼% for calendar years 1957 to 1959, 2¾% for calendar years 1960 to 1964, 3¼% for calendar years 1965 to 1969, 3¾% for calendar years 1970 to 1974, and 4¼% for calendar years beginning after  Dec. 31, 1974 .\n1956—Act  Aug. 1, 1956 , increased rate of tax with respect to wages received during calendar years 1957 to 1959, and for all calendar years thereafter, by one-quarter percent.\n1954—Act  Sept. 1, 1954 , increased the 3¼ percent rate of tax for the calendar year 1970 and subsequent years to 3½ percent for calendar years 1970 to 1974 and 4 percent for 1975 and subsequent years.\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 111–152  applicable with respect to remuneration received, and taxable years beginning after,  Dec. 31, 2012 , see  section 1402(b)(3) of Pub. L. 111–152 , set out as a note under  section 1401 of this title .\nAmendment by  section 9015(a)(1) of Pub. L. 111–148  applicable with respect to remuneration received, and taxable years beginning, after  Dec. 31, 2012 , see  section 9015(c) of Pub. L. 111–148 , set out as a note under  section 164 of this title .\nAmendment by  section 10906(a) of Pub. L. 111–148  applicable with respect to remuneration received, and taxable years beginning, after  Dec. 31, 2012 , see  section 10906(c) of Pub. L. 111–148 , set out as a note under  section 1401 of this title .\nPub. L. 98–21, title I, §\u202f123(a)(3) ,  Apr. 20, 1983 ,  97 Stat. 88 , provided that:  “The amendments made by this subsection [amending this section and  section 3111 of this title ] shall apply to remuneration paid after  December 31, 1983 .”\nAmendment by  Pub. L. 95–216  applicable with respect to remuneration paid or received, and taxable years beginning, after 1977, see  section 104 of Pub. L. 95–216 , set out as a note under  section 1401 of this title .\nPub. L. 94–455, title XIX, §\u202f1903(d) ,  Oct. 4, 1976 ,  90 Stat. 1810 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [see Tables for classification of  section 1903 of Pub. L. 94–455 ] shall apply with respect to wages paid after  December 31, 1976 , except that the amendments made to chapter 22 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] [section 3201 et seq. of this title] shall apply with respect to compensation paid for services rendered after  December 31, 1976 .”\nAmendment by  Pub. L. 93–233  applicable only with respect to remuneration paid after  December 31, 1973 , see  section 6(c) of Pub. L. 93–233 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 92–603  applicable only with respect to remuneration paid after  Dec. 31, 1972 , see  section 135(c) of Pub. L. 92–603 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 92–336  applicable only with respect to remuneration paid after  December 31, 1972 , see  section 204(c) of Pub. L. 92–336 , set out as a note under  section 1401 of this title .\nPub. L. 92–5, title II, §\u202f204(b) ,  Mar. 17, 1971 ,  85 Stat. 12 , provided that:  “The amendments made by subsection (a)(1) [amending this section] shall apply only with respect to taxable years beginning after  December 31, 1971 . The remaining amendments made by this section [amending  section 3111 of this title ] shall apply only with respect to remuneration paid after  December 31, 1971 .”\nAmendment by  Pub. L. 90–248  applicable only with respect to remuneration paid after  Dec. 31, 1967 , see  section 109(c) of Pub. L. 90–248 , set out as a note under  section 1401 of this title .\nAmendment by  section 111(c)(5) of Pub. L. 89–97  applicable to calendar year 1966 or to any subsequent calendar year but only if by October 1 immediately preceding such calendar year the Railroad Retirement Tax Act (section 3201 et seq. of this title) provides for a maximum amount of monthly compensation taxable under such Act during all months of such calendar year equal to one-twelfth of maximum wages which Federal Insurance Contributions Act (section 3101 et seq. of this title) provides may be counted for such calendar year, see  section 111(e) of Pub. L. 89–97 , set out as an Effective Date note under  section 1395i–1 of Title 42 , The Public Health and Welfare.\nAmendment by  section 321(b) of Pub. L. 89–97  applicable with respect to remuneration paid after  December 31, 1965 , see  section 321(d) of Pub. L. 89–97 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 87–64  applicable with respect to remuneration paid after  Dec. 31, 1961 , see  section 201(d) of Pub. L. 87–64 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 85–840  applicable with respect to remuneration paid after  Dec. 31, 1958 , see  section 401(d) of Pub. L. 85–840 , set out as a note under  section 1401 of this title .\nAmendment by act  Aug. 1, 1956 , applicable with respect to remuneration paid after  Dec. 31, 1956 , see section 202(d) of such act  Aug. 1, 1956 , set out as a note under  section 1401 of this title .\nNotwithstanding any other provision of law, with respect to remuneration received during calendar years 2011 and 2012, the rate of tax under  26 U.S.C. 3101(a)  to be 4.2 percent, see  section 601 of Pub. L. 111–312 , set out as a note under  section 1401 of this title .\nPub. L. 97–123, §\u202f3(f) ,  Dec. 29, 1981 ,  95 Stat. 1663 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Notwithstanding any other provision of law, no penalties or interest shall be assessed on account of any failure to make timely payment of taxes, imposed by sections 3101, 3111, 3201(b), 3211, or 3221(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to payments made for the period beginning  January 1, 1982 , and ending  June 30, 1982 , to the extent that such taxes are attributable to this section (or the amendments made by this section) [amending sections 3121 and 3231 of this title and  section 409 of Title 42 , The Public Health and Welfare, and enacting provisions set out as notes under  section 3121 of this title ] and that such failure is due to reasonable cause and not to willful neglect.”\nAct Sept. 1, 1954, ch. 1206, title IV, §\u202f402 ,  68 Stat. 1098 , as amended by act  Oct. 22, 1986 ,  Pub. L. 99–514, §\u202f2 ,  100 Stat. 2095 , provided that:  “References in the Internal Revenue Code of 1939 [former Title 26, Internal Revenue Code], the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the Railroad Retirement Act of 1937, as amended [section 231 et seq. of Title 45, Railroads], or any other law of the United States to any section or subdivision of a section of the Social Security Act [section 301 et seq. of Title 42, The Public Health and Welfare] redesignated by this Act shall be deemed to refer to such section or subdivision of a section as so redesignated.”'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'The tax imposed by section 3101 shall be collected by the employer of the taxpayer, by deducting the amount of the tax from the wages as and when paid. An employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than the applicable dollar threshold (as defined in section 3121(x)) for such year; and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(C) or (10) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than $100; and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (8)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than $150; and an employer who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to which paragraph (12)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax with respect to such tips from any wages of the employee (exclusive of tips) under his control, even though at the time such statement is furnished the total amount of the tips included in statements furnished to the employer as having been received by the employee in such calendar month in the course of his employment by such employer is less than $20.\nEvery employer required so to deduct the tax shall be liable for the payment of such tax, and shall be indemnified against the claims and demands of any person for the amount of any such payment made by such employer.\nIn the case of any tax imposed by section 3101(b)(2), subsection (a) shall only apply to the extent to which the taxpayer receives wages from the employer in excess of $200,000, and the employer may disregard the amount of wages received by such taxpayer’s spouse.\nTo the extent that the amount of any tax imposed by section 3101(b)(2) is not collected by the employer, such tax shall be paid by the employee.\nIf an employer, in violation of this chapter, fails to deduct and withhold the tax imposed by section 3101(b)(2) and thereafter the tax is paid by the employee, the tax so required to be deducted and withheld shall not be collected from the employer, but this paragraph shall in no case relieve the employer from liability for any penalties or additions to tax otherwise applicable in respect of such failure to deduct and withhold.\n2010—Subsec. (f).  Pub. L. 111–148  added subsec. (f).\n2004—Subsec. (a).  Pub. L. 108–203  struck out “and the employee has not performed agricultural labor for the employer on 20 days or more in the calendar year for cash remuneration computed on a time basis” after “less than $150”.\n1994—Subsec. (a).  Pub. L. 103–387  in second sentence substituted “An employer who in any calendar year” for “An employer who in any calendar quarter” and “remuneration paid to the employee by the employer in the calendar year is less than the applicable dollar threshold (as defined in section 3121(x)) for such year” for “remuneration paid to the employee by the employer in the calendar quarter is less than $50”.\nSubsec. (e).  Pub. L. 103–296  added subsec. (e).\n1990—Subsec. (d).  Pub. L. 101–508  added subsec. (d).\n1977—Subsec. (a).  Pub. L. 95–216, §\u202f355(a) , substituted “cash remuneration to which paragraph (7)(B) of section 3121(a) is applicable” for “cash remuneration to which paragraph (7)(B) or (C) or (10) of section 3121(a) is applicable” and inserted “and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(C) or (10) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than $100;”.\nSubsec. (c)(1), (2).  Pub. L. 95–216, §\u202f355(b)(1) , substituted “year” for “quarter” wherever appearing.\nSubsec. (c)(3)(A).  Pub. L. 95–216, §\u202f355(b)(2)(A) , substituted “in any calendar year” for “in any quarter of the calendar year”.\nSubsec. (c)(3)(B), (C).  Pub. L. 95–216, §\u202f355(b)(2)(B) , substituted “year” for “quarter” wherever appearing.\n1976—Subsec. (c)(3).  Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1965—Subsec. (a).  Pub. L. 89–97, §\u202f313(c)(2) , inserted provisions at end of second sentence allowing a deduction from any wages of an employee of an amount equivalent to the tax on tips when an employer is furnished with a written statement of tips received by an employee.\nSubsec. (c).  Pub. L. 89–97, §\u202f313(c)(1) , added subsec. (c).\n1956—Subsec. (a). Act  Aug. 1, 1956 , substituted “$150 and the employee has not performed agricultural labor for the employer on 20 days or more in the calendar year for cash remuneration computed on a time basis” for “$100”.\n1954—Subsec. (a). Act  Sept. 1, 1954 , inserted last sentence permitting in certain instances an employer to deduct employee tax even though payment to employee is less than $50 for calendar quarter or $100 for calendar year.\nAmendment by  Pub. L. 111–148  applicable with respect to remuneration received, and taxable years beginning, after  Dec. 31, 2012 , see  section 9015(c) of Pub. L. 111–148 , set out as a note under  section 164 of this title .\nPub. L. 103–387, §\u202f2(a)(3) ,  Oct. 22, 1994 ,  108 Stat. 4072 , provided that: \n “(A)   In general .— Except as provided in subparagraph (B), the amendments made by this subsection [amending this section,  section 3121 of this title , and sections 409 and 410 of Title 42, The Public Health and Welfare] shall apply to remuneration paid after  December 31, 1993 . \n \n “(B)   Excluded employment .— The amendments made by paragraphs (1)(C) and (2)(B) [amending  section 3121 of this title  and  section 410 of Title 42 ] shall apply to services performed after  December 31, 1994 .”\nAmendment by  Pub. L. 103–296  applicable with respect to service performed after calendar quarter following calendar quarter in which  Aug. 15, 1994 , occurs, see  section 319(c) of Pub. L. 103–296 , set out as a note under  section 1402 of this title .\nPub. L. 101–508, title V, §\u202f5124(c) ,  Nov. 5, 1990 ,  104 Stat. 1388–285 , provided that:  “The amendments made by this section [amending this section and  section 3202 of this title ] shall apply to coverage provided after  December 31, 1990 .”\nPub. L. 95–216, title III, §\u202f355(c) ,  Dec. 20, 1977 ,  91 Stat. 1555 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to remuneration paid and to tips received after  December 31, 1977 .”\nAmendment by  Pub. L. 89–97  applicable only with respect to tips received by employees after 1965, see  section 313(f) of Pub. L. 89–97 , set out as an Effective Date note under  section 6053 of this title .\nPub. L. 103–387, §\u202f2(a)(4) ,  Oct. 22, 1994 ,  108 Stat. 4072 , provided that:  \n “Notwithstanding the amendments made by this subsection [amending this section,  section 3121 of this title , and sections 409 and 410 of Title 42, The Public Health and Welfare], if the wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) paid during 1994 to an employee for domestic service in a private home of the employer are less than $1,000— \n “(A)  the employer shall file any return or statement required under section 6051 of such Code with respect to such wages (determined without regard to such amendments), and \n \n “(B)  the employee shall be entitled to credit under section 209 of the Social Security Act [ 42 U.S.C. 409 ] with respect to any such wages required to be included on any such return or statement.”'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 6.2 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).\nIn addition to the tax imposed by the preceding subsection, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).\nDuring any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, wages received by or paid to an individual shall be exempt from the taxes imposed by this section to the extent that such wages are subject under such agreement exclusively to the laws applicable to the social security system of such foreign country.\nIf a qualified tax-exempt organization hires a qualified veteran with respect to whom a credit would be allowable under section 38 by reason of section 51 if the organization were not a qualified tax-exempt organization, then there shall be allowed as a credit against the tax imposed by subsection (a) on wages paid with respect to employment of all employees of the organization during the applicable period an amount equal to the credit determined under section 51 (after application of the modifications under paragraph (3)) with respect to wages paid to such qualified veteran during such period.\nThe aggregate amount allowed as a credit under this subsection for all qualified veterans for any period with respect to which tax is imposed under subsection (a) shall not exceed the amount of the tax imposed by subsection (a) on wages paid with respect to employment of all employees of the organization during such period.\nThe term “applicable period” means, with respect to any qualified veteran, the 1-year period beginning with the day such qualified veteran begins work for the organization.\nThe credit allowed by paragraph (1)(A) shall not exceed the tax imposed by subsection (a) for any calendar quarter, and the credit allowed by paragraph (1)(B) shall not exceed the tax imposed by subsection (b) for any calendar quarter, on the wages paid with respect to the employment of all individuals in the employ of the employer.\nIf the amount of any credit under paragraph (1) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph (1) for such quarter.\nThe credits allowed under paragraph (1) shall not be taken into account for purposes of determining the amount of any deduction allowed under chapter 1 for taxes imposed under subsection (a) or (b).\nSection 233 of the Social Security Act, referred to in subsec. (c), is classified to  section 433 of Title 42 , The Public Health and Welfare.\n2022—Subsec. (f)(1).  Pub. L. 117–169, §\u202f13902(b)(1) , substituted “for a taxable year—” for “for a taxable year,” and designated remainder of existing provisions as subpar. (A), substituted “equal to so much of the” for “equal to the” and “as does not exceed the limitation of subclause (I) of section 41(h)(4)(B)(i) (applied without regard to subclause (II) thereof), and” for period at end, and added subpar. (B).\nSubsec. (f)(2).  Pub. L. 117–169, §\u202f13902(b)(2) , substituted “paragraph (1)(A)” for “paragraph (1)” and inserted “,\u2000and the credit allowed by paragraph (1)(B) shall not exceed the tax imposed by subsection (b) for any calendar quarter,” after “calendar quarter”.\nSubsec. (f)(3).  Pub. L. 117–169, §\u202f13902(b)(3) , substituted “any credit” for “the credit”.\nSubsec. (f)(4).  Pub. L. 117–169, §\u202f13902(b)(4) , substituted “credits” for “credit” and “subsection (a) or (b)” for “subsection (a)”.\n2018—Subsec. (d).  Pub. L. 115–141, §\u202f401(b)(34) , struck out subsec. (d) which provided for a special exemption for certain individuals hired in 2010.\nSubsec. (e)(5)(B).  Pub. L. 115–141, §\u202f401(a)(208) , substituted “has the meaning” for “has meaning”.\n2015—Subsec. (f).  Pub. L. 114–113  added subsec. (f).\n2014—Subsec. (a).  Pub. L. 113–295, §\u202f221(a)(99)(B)(i) , substituted “6.2 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).” for “the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b))—” and table of rates.\nSubsec. (b).  Pub. L. 113–295, §\u202f221(a)(99)(B)(ii) , substituted “1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).” for “the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b))—\n“(1) with respect to wages paid during the calendar years 1974 through 1977, the rate shall be 0.90 percent;\n“(2) with respect to wages paid during the calendar year 1978, the rate shall be 1.00 percent;\n“(3) with respect to wages paid during the calendar years 1979 and 1980, the rate shall be 1.05 percent;\n“(4) with respect to wages paid during the calendar years 1981 through 1984, the rate shall be 1.30 percent;\n“(5) with respect to wages paid during the calendar year 1985, the rate shall be 1.35 percent; and\n“(6) with respect to wages paid after  December 31, 1985 , the rate shall be 1.45 percent.”\n2011—Subsec. (e).  Pub. L. 112–56  added subsec. (e).\n2010—Subsec. (d).  Pub. L. 111–147  added subsec. (d).\n2004—Subsec. (c).  Pub. L. 108–203  substituted “exclusively to the laws applicable to” for “to taxes or contributions for similar purposes under”.\n1988—Subsecs. (a), (b).  Pub. L. 100–647  made technical correction to directory language of  Pub. L. 100–203, §\u202f9006(b)(1) , see 1987 Amendment note below.\n1987—Subsecs. (a), (b).  Pub. L. 100–203 , as amended by  Pub. L. 100–647 , struck out “and (t)” after “3121(a)” in introductory provisions.\n1983—Subsec. (a).  Pub. L. 98–21  substituted table of rates for pars. (1) to (7) which had imposed a tax on every employer (1) with respect to wages paid during the calendar years 1974 through 1977 at the rate of 4.95 percent, (2) with respect to wages paid during the calendar year 1978 at the rate of 5.05 percent, (3) with respect to wages paid during the calendar years 1979 and 1980 at the rate of 5.08 percent, (4) with respect to wages paid during the calendar year 1981 at the rate of 5.35 percent, (5) with respect to wages paid during the calendar years 1982 through 1984 at the rate of 5.40 percent, (6) with respect to wages paid during the calendar years 1985 through 1989 at the rate of 5.70 percent, and (7) with respect to wages paid after  Dec. 31, 1989 , at the rate of 6.20 percent.\n1977—Subsec. (a).  Pub. L. 95–216 , §§\u202f101(a)(2), 315(b), substituted “(as defined in section 3121(a) and (t))” for “(as defined in section 3121(a))” in provisions preceding par. (1), substituted “1974 through 1977” for “1974 through 2010” in par. (1), substituted “wages paid during the calendar year 1978, the rate shall be 5.05 percent” for “wages paid after  December 31, 2010 , the rate shall be 5.95 percent” in par. (2), and added pars. (3) to (7).\nSubsec. (b).  Pub. L. 95–216 , §§\u202f101(b)(2), 315(b), substituted “(as defined in section 3121(a) and (t))” for “(as defined in section 3121(a))” in provisions preceding par. (1), substituted “wages paid during the calendar year 1978, the rate shall be 1.00 percent” for “wages paid during the calendar years 1978 through 1980, the rate shall be 1.10 percent”, in par. (2), substituted “wages paid during the calendar years 1979 and 1980, the rate shall be 1.05 percent” for wages paid during the calendar years 1981 through 1985, the rate shall be 1.35 percent” in par. (3), substituted “wages paid during the calendar years 1981 through 1984, the rate shall be 1.30 percent” for “wages paid after  December 31, 1985 , the rate shall be 1.50 percent” in par. (4), and added pars. (5) and (6).\nSubsec. (c).  Pub. L. 95–216, §\u202f317(b)(2) , added subsec. (c).\n1976—Subsec. (a).  Pub. L. 94–455, §\u202f1903(a)(1)(A) , redesignated pars. (5) and (6) as (1) and (2). Former pars. (1) to (4), which related to a tax rate of 3.8 percent with respect to wages received during the taxable year 1968, a tax rate of 4.2 percent with respect to wages received during the calendar year 1969 and 1970, a tax rate of 4.6 percent with respect to wages received during the calendar years 1971 and 1972, and a tax rate of 4.85 percent with respect to wages received during the calendar year 1973, respectively, were struck out.\nSubsec. (b).  Pub. L. 94–455, §\u202f1903(a)(1)(B) , redesignated pars. (3) to (6) as (1) to (4), respectively. Former pars. (1) and (2), which related to a tax rate of .60 percent with respect to wages received during the calendar years 1968, 1969, 1970, 1971, and 1972 and a tax rate of 1.0 percent with respect to wages received during the calendar year 1973, respectively, were struck out.\n1973—Subsec. (a)(4).  Pub. L. 93–233, §\u202f6(a)(2) , struck out provision for application of 4.85 percent rate of tax during calendar years 1974, 1975, 1976, and 1977.\nSubsec. (a)(5).  Pub. L. 93–233, §\u202f6(a)(2) , increased rate of tax from 4.80 percent to 4.95 percent and substituted calendar year “1974” to “1978” as initial year for application of such rate.\nSubsec. (a)(6).  Pub. L. 93–233, §\u202f6(a)(2) , increased rate of tax from 5.85 percent to 5.95 percent.\nSubsec. (b)(2).  Pub. L. 93–233, §\u202f6(b)(3) , struck out provision for application of 1.0 percent rate of tax during calendar years 1974, 1975, 1976, and 1977.\nSubsec. (b)(3).  Pub. L. 93–233, §\u202f6(b)(3) , incorporated former provision of par. (2) for taxation of wages received during calendar years 1974, 1975, 1976, and 1977, decreased the applicable rate of tax from 1.0 percent to 0.90 percent, and struck out provision for 1.25 percent rate of tax for calendar years 1978, 1979, and 1980.\nSubsec. (b)(4).  Pub. L. 93–233, §\u202f6(b)(3) , incorporated former provision of par. (3) for taxation of wages received during calendar years 1978, 1979, and 1980, decreased the applicable rate of tax from 1.25 percent to 1.10 percent, and struck out provision for 1.35 percent rate of tax for calendar years 1981, 1982, 1983, 1984, and 1985.\nSubsec. (b)(5).  Pub. L. 93–233, §\u202f6(b)(3) , incorporated former provision of par. (4) for taxation of wages received during calendar years 1981 through 1985 at applicable 1.35 percent rate of tax and struck out provision for 1.45 percent rate of tax for wages received after  Dec. 31, 1985 .\nSubsec. (b)(6).  Pub. L. 93–233, §\u202f6(b)(3) , incorporated former provision of par. (5) for taxation of wages received after  Dec. 31, 1985  and increased the applicable rate of tax from 1.45 percent to 1.50 percent.\n1972—Subsec. (a)(3).  Pub. L. 92–603, §\u202f135(a)(3)(A) , substituted “the calendar years 1971 and 1972” for “any of the calendar years 1971 through 1977”.\nSubsec. (a)(3) to (5).  Pub. L. 92–336, §\u202f204(a)(3) , substituted “any of the calendar years 1971 through 1977” for “the calendar years 1971 and 1972” in par. (3), “any of the calendar years 1978 through 2010” for “the calendar years 1973, 1974, and 1975” and “4.5” for “5.0” in par. (4), and “ December 31, 2010 ” for “ December 31, 1975 ” and “5.35” for “5.15” in par. (5).\nSubsec. (a)(4).  Pub. L. 92–603, §\u202f135(a)(3)(B) , substituted “received during the calendar years 1973, 1974, 1975, 1976, and 1977, the rate shall be 4.85 percent;” for “received during any of the calendar years 1978 through 2010, the rate shall be 4.5 percent; and”.\nSubsec. (a)(5).  Pub. L. 92–603, §\u202f135(a)(3)(B) , substituted “received during the calendar years 1978 through 2010, the rate shall be 4.80 percent; and” for “received after  December 31, 2010 , the rate shall be 5.35 percent”.\nSubsec. (a)(6).  Pub. L. 92–603, §\u202f135(a)(3)(B) , added par. (6).\nSubsec. (b)(2).  Pub. L. 92–603, §\u202f135(b)(3) , increased rate to 1.0 percent from 0.9 percent.\nSubsec. (b)(2) to (5).  Pub. L. 92–336, §\u202f204(b)(3) , inserted references to 1976 and 1977 and substituted “0.9” for “0.65” in par. (2), substituted references for the calendar years 1978 through 1985 for references to the calendar years 1976 through 1979 and substituted “1.0” for “0.70” in par. (3), substituted references for the calendar years 1986 through 1992 for references to the calendars 1980 through 1986 and substituted “1.1” for “0.80” in par. (4), and substituted “1992” and “1986” and “1.2” for “0.9” in par. (5).\nSubsec. (b)(3).  Pub. L. 92–603, §\u202f135(b)(3) , substituted “and 1980, the rate shall be 1.25 percent” for “1980, 1981, 1982, 1983, 1984, and 1985, the rate shall be 1.0 percent”.\nSubsec. (b)(4).  Pub. L. 92–603, §\u202f135(b)(3) , substituted “1981, 1982, 1983, 1984, and 1985, the rate shall be 1.35 percent” for “1986, 1987, 1988, 1989, 1990, 1991, and 1992, the rate shall be 1.1 percent”.\nSubsec. (b)(5).  Pub. L. 92–603, §\u202f135(b)(3) , substituted “1985, the rate shall be 1.45 percent” for “1992, the rate shall be 1.2 percent”.\n1971—Subsec. (a)(4).  Pub. L. 92–5  substituted “with respect to wages paid during the calendar years 1973, 1974, and 1975, the rate shall be 5.0 percent; and” for “with respect to wages paid after  December 31, 1972 , the rate shall be 5.0 percent”.\nSubsec. (a)(5).  Pub. L. 92–5  added par. (5).\n1968—Subsec. (a)(1) to (4).  Pub. L. 90–248, §\u202f109(a)(3) , substituted “1968” and “3.8” for “1966” and “3.85” in par. (1) and “1969 and 1970” and “4.2” for “1967 and 1968” and “3.9” in par. (2), struck out reference to calendar years 1969 and 1970 from par. (3) and substituted therein “4.6” for “4.4”, and substituted “5.0” for “4.85” in par. (4).\nSubsecs. (b)(1) to (5).  Pub. L. 90–248, §\u202f109(b)(3) , struck out par. (1) provision for employer rate of 0.35 percent of wages paid with respect to employment during calendar year 1966, redesignated pars. (2) to (6) as (1) to (5), struck out reference to “1967” in such par. (1) and increased the rate by 0.10 percent to 0.60, 0.65, 0.70, 0.80, and 0.90 in pars. (1) to (5), respectively.\n1965— Pub. L. 89–97, §\u202f321(c) , divided the total excise tax imposed under the entire section upon employers through a tax equal to percentages of wages paid by him into two separate taxes by dividing the section into subsecs. (a) and (b), with subsec. (a) reflecting the tax for old-age, survivors, and disability insurance, and subsec. (b) reflecting the tax for hospital insurance, but, in the case of subsec. (b), without regard to the provisions of section 3121(b)(9) insofar as it relates to employees; increased from 4⅛ percent to 4.20 percent the rate of total tax imposed by the entire section upon wages paid during calendar year 1966 (resulting from a tax of 3.85 percent under subsec. (a) and 0.35 percent under subsec. (b)), increased from 4⅛ percent to 4.40 percent the rate of total tax imposed by the entire section upon wages paid during calendar year 1967 (resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), reduced from 4⅝ percent to 4.40 percent the rate of total tax imposed by the entire section upon wages paid during calendar year 1968 (resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 4⅝ percent to 4.90 percent the rate of total tax imposed by the entire section upon wages paid during the calendar years 1969, 1970, 1971, and 1972 (resulting from a tax of 4.4 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 4⅝ percent to 5.40 percent the rate for calendar years 1973, 1974, and 1975 (resulting from a tax of 4.85 percent under subsec. (a) and 0.55 percent under subsec. (b)), increased from 4⅝ percent to 5.45 percent the rate for calendar years 1976, 1977, 1978, and 1979 (resulting from a tax of 4.85 percent under subsec. (a) and 0.60 percent under subsec. (b)), increased from 4⅝ percent to 5.55 percent the rate for calendar years 1980 through 1986 (resulting from a tax of 4.85 percent under subsec. (a) and 0.70 percent under subsec. (b)), and increased the rate from 4⅝ percent to 5.65 percent for calendar years after  December 31, 1986  (resulting from a tax of 4.85 percent under subsec. (a) and 0.80 percent under subsec. (b)).\nSubsec. (b).  Pub. L. 89–97, §\u202f111(c)(6) , struck out “,\u2000but without regard to the provisions of paragraph (9) thereof insofar as it relates to employees” after “as defined in section 3121(b)”.\n1961— Pub. L. 87–64  increased rate of tax for calendar year 1962 from 3 to 3⅛ percent, calendar years 1963 to 1965, inclusive, from 3½ to 3⅝ percent, calendar years 1966 and 1967 from 4 to 4⅛ percent, calendar year 1968 from 4 to 4⅝ percent, and for calendar years after  December 31, 1968 , from 4½ to 4⅝ percent.\n1958— Pub. L. 85–840  increased rate of tax by substituting provisions imposing a tax of 2½ percent for calendar year 1959, 3 percent for calendar years 1960–62, 3½ percent for calendar years 1963–65, 4 percent for calendar years 1966–68, and 4½ percent for calendar years beginning after  Dec. 31, 1968 , for provisions which imposed a tax of 2¼ percent for calendar years 1957–59, 2¾ percent for calendar years 1960–64, 3¼ percent for calendar years 1965–69, 3¾ percent for calendar years 1970–74, and 4¼ percent for calendar years beginning after  Dec. 31, 1974 .\n1956—Act  Aug. 1, 1956 , increased rate of tax with respect to wages paid during calendar years 1957 to 1959, and for all calendar years thereafter, by one-quarter percent.\n1954—Act  Sept. 1, 1954 , increased 3¼ percent rate of tax for calendar year 1970 and subsequent years to 3½ percent for calendar years 1970 to 1974 and 4 percent for 1975 and subsequent years.\nAmendment by  Pub. L. 117–169  applicable to taxable years beginning after  Dec. 31, 2022 , see  section 13902(d) of Pub. L. 117–169 , set out as a note under  section 41 of this title .\nAmendment by  Pub. L. 114–113  applicable to taxable years beginning after  Dec. 31, 2015 , see  section 121(d)(3) of Pub. L. 114–113 , set out as a note under  section 38 of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 112–56  applicable to individuals who begin work for the employer after  Nov. 21, 2011 , see  section 261(g) of Pub. L. 112–56 , set out as a note under  section 51 of this title .\nAmendment by  Pub. L. 111–147  applicable to wages paid after  Mar. 18, 2010 , see  section 101(e) of Pub. L. 111–147 , set out as a note under  section 51 of this title .\nPub. L. 100–647, title VIII, §\u202f8016(b) ,  Nov. 10, 1988 ,  102 Stat. 3793 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by this section [amending this section, sections 3121 and 3306 of this title, and sections 405, 410, and 411 of Title 42, The Public Health and Welfare] shall be effective on the date of the enactment of this Act [ Nov. 10, 1988 ]. \n \n “(2)  Any amendment made by this section to a provision of a particular Public Law which is referred to by its number, or to a provision of the Social Security Act [ 42 U.S.C. 301  et seq.] or the Internal Revenue Code of 1986 as added or amended by a provision of a particular Public Law which is so referred to, shall be effective as though it had been included or reflected in the relevant provisions of that Public Law at the time of its enactment.”\nPub. L. 100–203, title IX, §\u202f9006(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–289 , provided that:  “The amendments made by this section [amending this section and  section 3121 of this title ] shall apply with respect to tips received (and wages paid) on and after  January 1, 1988 .”\nAmendment by  Pub. L. 98–21  applicable to remuneration paid after  Dec. 31, 1983 , see  section 123(a)(3) of Pub. L. 98–21 , set out as a note under  section 3101 of this title .\nAmendment by section 101(a)(2), (b)(2) of  Pub. L. 95–216  applicable with respect to remuneration paid or received, and taxable years beginning, after 1977, see  section 104 of Pub. L. 95–216 , set out as a note under  section 1401 of this title .\nPub. L. 95–216, title III, §\u202f315(c) ,  Dec. 20, 1977 ,  91 Stat. 1537 , provided that:  “The amendments made by this section [amending this section and  section 3121 of this title ] shall apply with respect to wages paid with respect to employment performed in months after December 1977.”\nAmendment by  Pub. L. 94–455  applicable with respect to wages paid after  Dec. 31, 1976 , see  section 1903(d) of Pub. L. 94–455 , set out as a note under  section 3101 of this title .\nAmendment by  Pub. L. 93–233  applicable only with respect to remuneration paid after  December 31, 1973 , see  section 6(c) of Pub. L. 93–233 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 92–603  applicable only with respect to remuneration paid after  Dec. 31, 1972 , see  section 135(c) of Pub. L. 92–603 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 92–336  applicable only with respect to remuneration paid after  December 31, 1972 , see  section 204(c) of Pub. L. 92–336 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 92–5  applicable only with respect to remuneration paid after  Dec. 31, 1971 , see  section 204(b) of Pub. L. 92–5 , set out as a note under  section 3101 of this title .\nAmendment by  Pub. L. 90–248  applicable only with respect to remuneration paid after  Dec. 31, 1967 , see  section 109(c) of Pub. L. 90–248 , set out as a note under  section 1401 of this title .\nAmendment by  section 111(c)(6) of Pub. L. 89–97  applicable to calendar year 1966 or to any subsequent calendar year but only if by October 1 immediately preceding such calendar year the Railroad Retirement Tax Act (section 3201 et seq. of this title) provides for a maximum amount of monthly compensation taxable under such Act during all months of such calendar year equal to one-twelfth of maximum wages which Federal Insurance Contributions Act (section 3101 et seq. of this title) provides may be counted for such calendar year, see  section 111(e) of Pub. L. 89–97 , set out as an Effective Date note under  section 1395i–1 of Title 42 , The Public Health and Welfare.\nAmendment by  section 321(c) of Pub. L. 89–97  applicable with respect to remuneration paid after  December 31, 1965 , see  section 321(d) of Pub. L. 89–97 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 87–64  applicable with respect to remuneration paid after  Dec. 31, 1961 , see  section 201(d) of Pub. L. 87–64 , set out as a note under  section 1401 of this title .\nAmendment by  Pub. L. 85–840  applicable with respect to remuneration paid after  Dec. 31, 1958 , see  section 401(d) of Pub. L. 85–840 , set out as a note under  section 1401 of this title .\nAmendment by act  Aug. 1, 1956 , applicable with respect to remuneration paid after  Dec. 31, 1956 , see section 202(d) of such act  Aug. 1, 1956 , set out as a note under  section 1401 of this title .\nFor provisions that nothing in amendment by  section 401(b)(34) of Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .\nFor provision that no penalties or interest shall be assessed on account of any failure to make timely payment of taxes imposed by this section with respect to payments made for the period  Jan. 1, 1982 , and ending  June 30, 1982 , to the extent that such taxes are attributable to  section 3 of Pub. L. 97–123  or the amendments made by that section, see  section 3(f) of Pub. L. 97–123 , set out as a note under  section 3101 of this title .\nPub. L. 116–136, div. A, title II, §\u202f2301 ,  Mar. 27, 2020 ,  134 Stat. 347 , as amended by  Pub. L. 116–260, div. EE, title II , §§\u202f206(a), (b), (c)(2), (d), 207(a)–(j), title III, §\u202f303(d)(3)(C)(iii),  Dec. 27, 2020 ,  134 Stat. 3059–3065 , 3077, provided that: \n “(a)   In General .— In the case of an eligible employer, there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 70 percent of the qualified wages with respect to each employee of such employer for such calendar quarter. \n \n “(b)   Limitations and Refundability.— “(1)   Wages taken into account .— The amount of qualified wages with respect to any employee which may be taken into account under subsection (a) by the eligible employer for any calendar quarter shall not exceed $10,000. \n \n “(2)   Credit limited to employment taxes .— The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the applicable employment taxes (reduced by any credits allowed under subsections (e) and (f) of section 3111 of the Internal Revenue Code of 1986, sections 7001 and 7003 of the Families First Coronavirus Response Act [ Pub. L. 116–127 , set out as notes below], and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [div. EE of  Pub. L. 116–260 ,  134 Stat. 3076 , in part amending this note and provisions set out as notes under this section; see Tables for classification]) on the wages paid with respect to the employment of all the employees of the eligible employer for such calendar quarter. \n \n “(3)   Refundability of excess credit.— “(A)   In general .— If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of the Internal Revenue Code of 1986. \n \n “(B)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, any amounts due to the employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n \n “(c)   Definitions .— For purposes of this section— “(1)   Applicable employment taxes .— The term ‘applicable employment taxes’ means the following: “(A)  The taxes imposed under section 3111(a) of the Internal Revenue Code of 1986. \n \n “(B)  So much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code. \n \n \n “(2)   Eligible employer.— “(A)   In general .— The term ‘eligible employer’ means any employer— “(i)  which was carrying on a trade or business during the calendar quarter for which the credit is determined under subsection (a), and \n \n “(ii)  with respect to any calendar quarter, for which— \u2001\u2001\u2001\u2001\u2001“(I)  the operation of the trade or business described in clause (i) is fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 2019 (COVID–19), or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  the gross receipts (within the meaning of section 448(c) of the Internal Revenue Code of 1986) of such employer for such calendar quarter are less than 80 percent of the gross receipts of such employer for the same calendar quarter in calendar year 2019. \n \n \n\n \u2001With respect to any employer for any calendar quarter, if such employer was not in existence as of the beginning of the same calendar quarter in calendar year 2019, clause (ii)(II) shall be applied by substituting “2020” for “2019”. \n \n “(B)   Election to use alternative quarter .— At the election of the employer— “(i)  subparagraph (A)(ii)(II) shall be applied— \u2001\u2001\u2001\u2001\u2001“(I)  by substituting ‘for the immediately preceding calendar quarter’ for ‘for such calendar quarter’, and \n \n \u2001\u2001\u2001\u2001\u2001“(II)  by substituting ‘the corresponding calendar quarter in calendar year 2019’ for ‘the same calendar quarter in calendar year 2019’, and \n \n \n “(ii)  the last sentence of subparagraph (A) shall be applied by substituting ‘the corresponding calendar quarter in calendar year 2019’ for ‘the same calendar quarter in calendar year 2019’. \n \n\n \u2001\u2001An election under this subparagraph shall be made at such time and in such manner as the Secretary shall prescribe. \n \n “(C)   Tax-exempt organizations .— In the case of an organization which is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code— “(i)  clauses (i) and (ii)(I) of subparagraph (A) shall apply to all operations of such organization, and \n \n “(ii)  any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033 of such Code. \n \n \n \n “(3)   Qualified wages.— “(A)   In general .— The term ‘qualified wages’ means— “(i)  in the case of an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was greater than 500, wages paid by such eligible employer with respect to which an employee is not providing services due to circumstances described in subclause (I) or (II) of paragraph (2)(A)(ii), or \n \n “(ii)  in the case of an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 500— \u2001\u2001\u2001\u2001\u2001“(I)  with respect to an eligible employer described in subclause (I) of paragraph (2)(A)(ii), wages paid by such eligible employer with respect to an employee during any period described in such clause, or \n \n \u2001\u2001\u2001\u2001\u2001“(II)  with respect to an eligible employer described in subclause (II) of such paragraph, wages paid by such eligible employer with respect to an employee during such quarter. \n \n \n \n “(B)   Exception .— The term ‘qualified wages’ shall not include any wages taken into account under section 7001 or section 7003 of the Families First Coronavirus Response Act. \n \n \n “(4)   Secretary .— The term ‘Secretary’ means the Secretary of the Treasury or the Secretary’s delegate. \n \n “(5)   Wages .— “(A)   In general .— The term ‘wages’ means wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) and compensation (as defined in section 3231(e) of such Code). For purposes of the preceding sentence, in the case of any organization or entity described in subsection (f)(2), wages as defined in section 3121(a) of the Internal Revenue Code of 1986 shall be determined without regard to paragraphs (5), (6), (7), (10), and (13) of section 3121(b) of such Code (except with respect to services performed in a penal institution by an inmate thereof). \n \n “(B)   Allowance for certain health plan expenses.— “(i)   In general .— Such term shall include amounts paid by the eligible employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code. \n \n “(ii)   Allocation rules .— For purposes of this section, amounts treated as wages under clause (i) shall be treated as paid with respect to any employee (and with respect to any period) to the extent that such amounts are properly allocable to such employee (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage. \n \n \n \n “(6)   Other terms .— Any term used in this section which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter. \n \n \n “(d)   Aggregation Rule .— All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or subsection (m) or ( o ) of section 414 of such Code, shall be treated as one employer for purposes of this section. \n \n “(e)   Certain Rules to Apply .— For purposes of this section, rules similar to the rules of sections 51(i)(1) and 280C(a) of the Internal Revenue Code of 1986 shall apply. \n \n “(f)   Certain Governmental Employers.— “(1)   In general .— This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. \n \n “(2)   Exception .— Paragraph (1) shall not apply to— “(A)  any organization described in section 501(c)(1) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, or \n \n “(B)  any entity described in paragraph (1) if — “(i)  such entity is a college or university, or \n \n “(ii)  the principal purpose or function of such entity is providing medical or hospital care. \n \n\n \u2001\u2001In the case of any entity described in subparagraph (B), such entity shall be treated as satisfying the requirements of subsection (c)(2)(A)(i). \n \n \n \n “(g)   Election to Not Take Certain Wages Into Account.— “(1)   In general .— This section shall not apply to so much of the qualified wages paid by an eligible employer as such employer elects (at such time and in such manner as the Secretary may prescribe) to not take into account for purposes of this section. \n \n “(2)   Coordination with paycheck protection program .— The Secretary, in consultation with the Administrator of the Small Business Administration, shall issue guidance providing that payroll costs paid during the covered period shall not fail to be treated as qualified wages under this section by reason of an election under paragraph (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 7A(g) of the Small Business Act [ 15 U.S.C. 636m(g) ] or the application of section 7(a)(37)(J) of the Small Business Act [ 15 U.S.C. 636(a)(37)(J) ]. Terms used in the preceding sentence which are also used in section 7A(g) or 7(a)(37)(J) of the Small Business Act shall, when applied in connection with either such section, have the same meaning as when used in such section, respectively. \n \n \n “(h)   Special Rules.— “(1)   Denial of double benefit .— Any wages taken into account in determining the credit allowed under this section shall not be taken into account as wages for purposes of sections 41, 45A, 45P, 45S, 51, and 1396 of the Internal Revenue Code of 1986. \n \n “(2)   Third party payors .— Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code. \n \n \n “(i)   Transfers to Federal Old-Age and Survivors Insurance Trust Fund .— There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 14  [sic] 231n–1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted. \n \n “(j)   Advance Payments.— “(1)   In general .— Except as provided in paragraph (2), no advance payment of the credit under subsection (a) shall be allowed. \n \n “(2)   Advance payments to small employers.— “(A)   In general .— Under rules provided by the Secretary, an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 500 may elect for any calendar quarter to receive an advance payment of the credit under subsection (a) for such quarter in an amount not to exceed 70 percent of the average quarterly wages paid by the employer in calendar year 2019. \n \n “(B)   Special rule for seasonal employers .— In the case of any employer who employs seasonal workers (as defined in section 45R(d)(5)(B) of the Internal Revenue Code of 1986), the employer may elect to substitute ‘the wages for the calendar quarter in 2019 which corresponds to the calendar quarter to which the election relates’ for ‘the average quarterly wages paid by the employer in calendar year 2019’. \n \n “(C)   Special rule for employers not in existence in 2019 .— In the case of any employer that was not in existence in 2019, subparagraphs (A) and (B) shall each be applied by substituting ‘2020’ for ‘2019’ each place it appears. \n \n \n “(3)   Reconciliation of credit with advance payments.— “(A)   In general .— The amount of credit which would (but for this subsection) be allowed under this section shall be reduced (but not below zero) by the aggregate payment allowed to the taxpayer under paragraph (2). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1) of the Internal Revenue Code of 1986. \n \n “(B)   Excess advance payments .— If the advance payments to a taxpayer under paragraph (2) for a calendar quarter exceed the credit allowed by this section (determined without regard to subparagraph (A)), the tax imposed by chapter 21 or 22 of the Internal Revenue Code of 1986 (whichever is applicable) for the calendar quarter shall be increased by the amount of such excess. \n \n \n \n “(k)   Treatment of Deposits .— The Secretary shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of any applicable employment taxes if the Secretary determines that such failure was due to the reasonable anticipation of the credit allowed under this section. \n \n “(l)   Regulations and Guidance .— The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary— “(1)  to allow the advance payment of the credit under subsection (a) as provided in subsection (j)(2), subject to the limitations provided in this section, based on such information as the Secretary shall require, \n \n “(2)  with respect to the application of the credit under subsection (a) to third party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 of the Internal Revenue Code of 1986), including regulations or guidance allowing such payors to submit documentation necessary to substantiate the eligible employer status of employers that use such payors, and \n \n “(3)  to prevent the avoidance of the purposes of the limitations under this section, including through the leaseback of employees. \n \n\n Any forms, instructions, regulations, or guidance described in paragraph (2) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third party payor to accurately report such tax credits based on the information provided by the customer. \n \n “(m)   Application .— This section shall only apply to wages paid after  March 12, 2020 , and before  July 1, 2021 . \n \n “(n)   Public Awareness Campaign.— “(1)   In general .— The Secretary shall conduct a public awareness campaign, in coordination with the Administrator of the Small Business Administration, to provide information regarding the availability of the credit allowed under this section. \n \n “(2)   Outreach .— Under the campaign conducted under paragraph (1), the Secretary shall— “(A)  provide to all employers which reported not more than 500 employees on the most recently filed return of applicable employment taxes a notice about the credit allowed under this section and the requirements for eligibility to claim the credit, and \n \n “(B)  not later than 30 days after the date of the enactment of this subsection, provide to all employers educational materials relating to the credit allowed under this section, including specific materials for businesses with not more than 500 employees.”\n[ Pub. L. 116–260, div. EE, title II, §\u202f206(e) ,  Dec. 27, 2020 ,  134 Stat. 3061 , provided that:\n[“(1)  In general .—The amendments made by this section [amending  section 2301 of Pub. L. 116–136 , set out above] shall take effect as if included in the provisions of the CARES Act [ Pub. L. 116–136 ] to which they relate.\n[“(2)  Special rule.—\n[“(A)  In general .—For purposes of section 2301 of the CARES Act, an employer who has filed a return of tax with respect to applicable employment taxes (as defined in section 2301(c)(1) of division A of such Act) before the date of the enactment of this Act [ Dec. 27, 2020 ] may elect (in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe) to treat any applicable amount as an amount paid in the calendar quarter which includes the date of the enactment of this Act.\n[“(B)  Applicable amount .—For purposes of subparagraph (A), the term ‘applicable amount’ means the amount of wages which—\n[“(i) are—\n[“(I) described in section 2301(c)(5)(B) of the CARES Act, as added by the amendments made by subsection (b), or\n[“(II) permitted to be treated as qualified wages under guidance issued pursuant to section 2301(g)(2) of the CARES Act (as added by subsection (c)), and\n[“(ii) were—\n[“(I) paid in a calendar quarter beginning after  December 31, 2019 , and before  October 1, 2020 , and\n[“(II) not taken into account by the taxpayer in calculating the credit allowed under section 2301(a) of division A of such Act for such calendar quarter.”]\n[ Pub. L. 116–260, div. EE, title II, §\u202f207(k) ,  Dec. 27, 2020 ,  134 Stat. 3065 , provided that:  “The amendments made by this section [amending  section 2301 of Pub. L. 116–136 , set out above] shall apply to calendar quarters beginning after  December 31, 2020 .” \n]\nPub. L. 116–136, div. A, title II, §\u202f2302 ,  Mar. 27, 2020 ,  134 Stat. 351 , as amended by  Pub. L. 116–142, §\u202f4(a) ,  June 5, 2020 ,  134 Stat. 643 , provided that: \n “(a)   In General.— “(1)   Taxes .— Notwithstanding any other provision of law, the payment for applicable employment taxes for the payroll tax deferral period shall not be due before the applicable date. \n \n “(2)   Deposits .— Notwithstanding section 6302 of the Internal Revenue Code of 1986, an employer shall be treated as having timely made all deposits of applicable employment taxes that are required to be made (without regard to this section) for such taxes during the payroll tax deferral period if all such deposits are made not later than the applicable date. \n \n \n “(b)   SECA.— “(1)   In general .— Notwithstanding any other provision of law, the payment for 50 percent of the taxes imposed under section 1401(a) of the Internal Revenue Code of 1986 for the payroll tax deferral period shall not be due before the applicable date. \n \n “(2)   Estimated taxes .— For purposes of applying section 6654 of the Internal Revenue Code of 1986 to any taxable year which includes any part of the payroll tax deferral period, 50 percent of the taxes imposed under section 1401(a) of such Code for the payroll tax deferral period shall not be treated as taxes to which such section 6654 applies. \n \n \n “(c)   Liability of Third Parties.— “(1)   Acts to be performed by agents .— For purposes of section 3504 of the Internal Revenue Code of 1986, in the case of any person designated pursuant to such section (and any regulations or other guidance issued by the Secretary with respect to such section) to perform acts otherwise required to be performed by an employer under such Code, if such employer directs such person to defer payment of any applicable employment taxes during the payroll tax deferral period under this section, such employer shall be solely liable for the payment of such applicable employment taxes before the applicable date for any wages paid by such person on behalf of such employer during such period. \n \n “(2)   Certified professional employer organizations .— For purposes of section 3511, in the case of a certified professional employer organization (as defined in subsection (a) of section 7705 of the Internal Revenue Code of 1986) that has entered into a service contract described in subsection (e)(2) of such section with a customer, if such customer directs such organization to defer payment of any applicable employment taxes during the payroll tax deferral period under this section, such customer shall, notwithstanding subsections (a) and (c) of section 3511, be solely liable for the payment of such applicable employment taxes before the applicable date for any wages paid by such organization to any work site employee performing services for such customer during such period. \n \n \n “(d)   Definitions .— For purposes of this section— “(1)   Applicable employment taxes .— The term ‘applicable employment taxes’ means the following: “(A)  The taxes imposed under section 3111(a) of the Internal Revenue Code of 1986. \n \n “(B)  So much of the taxes imposed under section 3211(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code. \n \n “(C)  So much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code. \n \n \n “(2)   Payroll tax deferral period .— The term ‘payroll tax deferral period’ means the period beginning on the date of the enactment of this Act [ Mar. 27, 2020 ] and ending before  January 1, 2021 . \n \n “(3)   Applicable date .— The term ‘applicable date’ means— “(A)   December 31, 2021 , with respect to 50 percent of the amounts to which subsection (a) or (b), as the case may be, apply, and \n \n “(B)   December 31, 2022 , with respect to the remaining such amounts. \n \n \n “(4)   Secretary .— The term ‘Secretary’ means the Secretary of the Treasury (or the Secretary’s delegate). \n \n \n “(e)   Trust Funds Held Harmless .— There are hereby appropriated (out of any money in the Treasury not otherwise appropriated) for each fiscal year to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) ) an amount equal to the reduction in the transfers to such fund for such fiscal year by reason of this section. Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted. \n \n “(f)   Regulatory Authority .— The Secretary shall issue such regulations or other guidance as necessary to carry out the purposes of this section, including rules for the administration and enforcement of subsection (c).”\n[ Pub. L. 116–142, §\u202f4(b) ,  June 5, 2020 ,  134 Stat. 643 , provided that:  “The amendments made by this section [amending  section 2302 of Pub. L. 116–136 , set out above] shall be effective as if included in the CARES Act ( Public Law 116–136 ) and shall apply to any loan made pursuant to section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ) or section 1109 of the CARES Act [ 15 U.S.C. 9008 ].” \n]\nPub. L. 116–127, div. G, §\u202f7001 ,  Mar. 18, 2020 ,  134 Stat. 210 , as amended by  Pub. L. 116–136, div. A, title III, §\u202f3606(a) ,  Mar. 27, 2020 ,  134 Stat. 411 ;  Pub. L. 116–260, div. N, title II , §§\u202f286(a), (b)(1), 288(a)–(c), div. EE, title III, §\u202f303(d)(3)(C)(i),  Dec. 27, 2020 ,  134 Stat. 1989 , 1990, 1992, 3076, provided that: \n “(a)   In General .— In the case of an employer, there shall be allowed as a credit against the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such calendar quarter. \n \n “(b)   Limitations and Refundability.— “(1)   Wages taken into account .— The amount of qualified sick leave wages taken into account under subsection (a) with respect to any individual shall not exceed $200 ($511 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act [div. E of  Pub. L. 116–127 ,  29 U.S.C. 2601  note]) for any day (or portion thereof) for which the individual is paid qualified sick leave wages. \n \n “(2)   Overall limitation on number of days taken into account .— The aggregate number of days taken into account under paragraph (1) for any calendar quarter shall not exceed the excess (if any) of— “(A)  10, over \n \n “(B)  the aggregate number of days so taken into account for all preceding calendar quarters. \n \n \n “(3)   Credit limited to certain employment taxes .— The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a) or 3221(a) of such Code for such calendar quarter (reduced by any credits allowed under subsections (e) and (f) of section 3111 of such Code, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [div. EE of  Pub. L. 116–260 ,  134 Stat. 3076 , in part amending this note and provisions set out as notes under this section; see Tables for classification], for such quarter) on the wages paid with respect to the employment of all employees of the employer. \n \n “(4)   Refundability of excess credit.— “(A) (i)   Credit is refundable .— If the amount of the credit under subsection (a) exceeds the limitation of paragraph (3) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of such Code. \n \n “(ii)   Advancing credit .— In anticipation of the credit, including the refundable portion under clause (i), the credit may be advanced, according to forms and instructions provided by the Secretary, up to an amount calculated under subsection (a), subject to the limits under subsection (b), both calculated through the end of the most recent payroll period in the quarter. \n \n \n “(B)   Treatment of payments .— For purposes of  section 1324 of title 31 , United States Code, any amounts due to an employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. \n \n \n \n “(c)   Qualified Sick Leave Wages .— For purposes of this section, the term ‘qualified sick leave wages’ means wages (as defined in section 3121(a) of the Internal Revenue Code of 1986, determined without regard to paragraphs (1) through (22) of section 3121(b) of such Code and section 7005(a) of this Act [set out below],) [sic] and compensation (as defined in section 3231(e) of the Internal Revenue Code [of 1986], determined without regard to the sentence in paragraph (1) thereof which begins ‘Such term does not include remuneration’ and without regard to section 7005(a) of this Act) paid by an employer— “(1)  which are required to be paid by reason of the Emergency Paid Sick Leave Act [div. E (§\u202f5101 et seq.) of  Pub. L. 116–127 ,  29 U.S.C. 2601  note], or \n \n “(2)  both— “(A)  which would be so required to be paid if such Act were applied— “(i)  by substituting ‘ March 31, 2021 ’ for ‘ December 31, 2020 ’ in section 5109 thereof, and \n \n “(ii)  without regard to section 5102(b)(3) thereof, and \n \n \n “(B)  with respect to which all requirements of such Act (other than subsections (a) and (b) of section 5105 thereof, and determined by substituting ‘To be compliant with section 5102, an employer may not’ for ‘It shall be unlawful for any employer to’ in section 5104 thereof) which would apply if so required are satisfied. \n \n \n \n “(d)   Allowance of Credit for Certain Health Plan Expenses.— “(1)   In general .— The amount of the credit allowed under subsection (a) shall be increased by so much of the employer’s qualified health plan expenses as are properly allocable to the qualified sick leave wages for which such credit is so allowed. \n \n “(2)   Qualified health plan expenses .— For purposes of this subsection, the term ‘qualified health plan expenses’ means amounts paid or incurred by the employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code. \n \n “(3)   Allocation rules .— For purposes of this section, qualified health plan expenses shall be allocated to qualified sick leave wages in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among covered employees and pro rata on the basis of periods of coverage (relative to the time periods of leave to which such wages relate). \n \n \n “(e)   Special Rules.— “(1)   Denial of double benefit .— For purposes of chapter 1 of such Code, the gross income of the employer, for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section, shall be increased by the amount of such credit. Any wages taken into account in determining the credit allowed under this section shall not be taken into account for purposes of determining the credit allowed under section 45S of such Code. \n \n “(2)   Election not to have section apply .— This section shall not apply with respect to any employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe) not to have this section apply. \n \n “(3)   Certain terms .— Except as otherwise provided in this section, any term used in this section which is also used in chapter 21 of such Code shall have the same meaning as when used in such chapter. \n \n “(4)   Certain governmental employers .— This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. \n \n “(4) [(5)]   References to railroad retirement tax .— Any reference in this section to the tax imposed by section 3221(a) of the Internal Revenue Code of 1986 shall be treated as a reference to so much of such tax as is attributable to the rate in effect under section 3111(a) of such Code. \n \n \n “(f)   Regulations .— The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— “(1)  regulations or other guidance to prevent the avoidance of the purposes of the limitations under this section, \n \n “(2)  regulations or other guidance to minimize compliance and record-keeping burdens under this section, \n \n “(3)  regulations or other guidance providing for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the credit allowed under this section, \n \n “(4)  regulations or other guidance for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a), \n \n “(5)  regulations or other guidance to ensure that the wages taken into account under this section conform with the paid sick time required to be provided under the Emergency Paid Sick Leave Act, and \n \n “(6)  regulations or other guidance to permit the advancement of the credit determined under subsection (a). \n \n \n “(g)   Application of Section .— This section shall apply only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act [ Mar. 18, 2020 ], and ending on  March 31, 2021 . \n \n “(h)   Transfers to Federal Old-Age and Survivors Insurance Trust Fund .— There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) ) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted. \n \n “(i)   Treatment of Deposits .— The Secretary of the Treasury (or the Secretary’s delegate) shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of the tax imposed by section 3111(a) or 3221(a) of such Code if the Secretary determines that such failure was due to the anticipation of the credit allowed under this section.”\n[ Pub. L. 116–260, div. N, title II, §\u202f288(f) ,  Dec. 27, 2020 ,  134 Stat. 1993 , provided that:  “The amendments made by this section [amending  section 7001 of Pub. L. 116–127 , set out above, and sections 7003 and 7005 of  Pub. L. 116–127 , set out below] shall take effect as if included in the provisions of the Families First Coronavirus Response Act [ Pub. L. 116–127 ] to which they relate.” \n]\nPub. L. 116–127, div. G, §\u202f7003 ,  Mar. 18, 2020 ,  134 Stat. 214 , as amended by  Pub. L. 116–136, div. A, title III, §\u202f3606(b) , (c),  Mar. 27, 2020 ,  134 Stat. 412 ;  Pub. L. 116–260, div. N, title II , §§\u202f286(a), (b)(3), 288(a)–(c), div. EE, title III, §\u202f303(d)(3)(C)(ii),  Dec. 27, 2020 ,  134 Stat. 1989 , 1990, 1992, 3077, provided that: \n “(a)   In General .— In the case of an employer, there shall be allowed as a credit against the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100 percent of the qualified family leave wages paid by such employer with respect to such calendar quarter. \n \n “(b)   Limitations and Refundability.— “(1)   Wages taken into account .— The amount of qualified family leave wages taken into account under subsection (a) with respect to any individual shall not exceed— “(A)  for any day (or portion thereof) for which the individual is paid qualified family leave wages, $200, and \n \n “(B)  in the aggregate with respect to all calendar quarters, $10,000. \n \n \n “(2)   Credit limited to certain employment taxes .— The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a) or 3221(a) of such Code for such calendar quarter (reduced by any credits allowed under subsections (e) and (f) of section 3111 of such Code, section 7001 of this Act [set out as a note above], and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 [div. EE of  Pub. L. 116–260 ,  134 Stat. 3076 , in part amending this note and provisions set out as notes under this section; see Tables for classification], for such quarter) on the wages paid with respect to the employment of all employees of the employer. \n \n “(3)   Refundability of excess credit.— “(A)   Credit is refundable .— If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of such Code. \n \n “(B)   Advancing credit .— In anticipation of the credit, including the refundable portion under subparagraph (A), the credit may be advanced, according to forms and instructions provided by the Secretary, up to an amount calculated under subsection (a), subject to the limits under subsection (b), both calculated through the end of the most recent payroll period in the quarter. \n \n \n \n “(c)   Qualified Family Leave Wages .— For purposes of this section, the term ‘qualified family leave wages’ means wages (as defined in section 3121(a) of such Code, determined without regard to paragraphs (1) through (22) of section 3121(b) of such Code and section 7005(a) of this Act [set out below],) [sic] and compensation (as defined in section 3231(e) of the Internal Revenue Code [of 1986], determined without regard to the sentence in paragraph (1) thereof which begins ‘Such term does not include remuneration’ and without regard to section 7005(a) of this Act) paid by an employer— “(1)  which are required to be paid by reason of the Emergency Family and Medical Leave Expansion Act [div. C of  Pub. L. 116–127 , see Short Title of 2020 Amendment note set out under  section 2601 of Title 29 , Labor] (including the amendments made by such Act), or \n \n “(2)  both— “(A)  which would be so required to be paid if section 102(a)(1)(F) of the Family and Medical Leave Act of 1993 [ 29 U.S.C. 2612(a)(1)(F) ], as amended by the Emergency Family and Medical Leave Expansion Act, were applied by substituting ‘ March 31, 2021 ’ for ‘ December 31, 2020 ’, and \n \n “(B)  with respect to which all requirements of the Family and Medical Leave Act of 1993 (other than section 107 [ 29 U.S.C. 2617 ] thereof, and determined by substituting ‘To be compliant with section 102(a)(1)(F), an employer may not’ for ‘It shall be unlawful for any employer to’ each place it appears in subsection (a) of section 105 [ 29 U.S.C. 2615 ] thereof, by substituting ‘made unlawful in this title or described in this section’ for ‘made unlawful by this title’ in paragraph (2) of such subsection, and by substituting ‘To be compliant with section 102(a)(1)(F), an employer may not’ for ‘It shall be unlawful for any person to’ in subsection (b) of such section) which relate to such section 102(a)(1)(F), and which would apply if so required, are satisfied. \n \n \n \n “(d)   Allowance of Credit for Certain Health Plan Expenses.— “(1)   In general .— The amount of the credit allowed under subsection (a) shall be increased by so much of the employer’s qualified health plan expenses as are properly allocable to the qualified family leave wages for which such credit is so allowed. \n \n “(2)   Qualified health plan expenses .— For purposes of this subsection, the term ‘qualified health plan expenses’ means amounts paid or incurred by the employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code. \n \n “(3)   Allocation rules .— For purposes of this section, qualified health plan expenses shall be allocated to qualified family leave wages in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among covered employees and pro rata on the basis of periods of coverage (relative to the time periods of leave to which such wages relate). \n \n \n “(e)   Special Rules .— “(1)   Denial of double benefit .— For purposes of chapter 1 of such Code, the gross income of the employer, for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section, shall be increased by the amount of such credit. Any wages taken into account in determining the credit allowed under this section shall not be taken into account for purposes of determining the credit allowed under section 45S of such Code. \n \n “(2)   Election not to have section apply .— This section shall not apply with respect to any employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe) not to have this section apply. \n \n “(3)   Certain terms .— Except as otherwise provided in this section, any term used in this section which is also used in chapter 21 of such Code shall have the same meaning as when used in such chapter. \n \n “(4)   Certain governmental employers .— This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. \n \n “(4) [(5)]   References to railroad retirement tax .— Any reference in this section to the tax imposed by section 3221(a) of the Internal Revenue Code of 1986 shall be treated as a reference to so much of such tax as is attributable to the rate in effect under section 3111(a) of such Code. \n \n \n “(f)   Regulations .— The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— “(1)  regulations or other guidance to prevent the avoidance of the purposes of the limitations under this section, \n \n “(2)  regulations or other guidance to minimize compliance and record-keeping burdens under this section, \n \n “(3)  regulations or other guidance providing for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the credit allowed under this section, \n \n “(4)  regulations or other guidance for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a), \n \n “(5)  regulations or other guidance to ensure that the wages taken into account under this section conform with the paid leave required to be provided under the Emergency Family and Medical Leave Expansion Act (including the amendments made by such Act), and \n \n “(6)  regulations or other guidance to permit the advancement of the credit determined under subsection (a). \n \n \n “(g)   Application of Section .— This section shall apply only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act [ Mar. 18, 2020 ], and ending on  March 31, 2021 . \n \n “(h)   Transfers to Federal Old-Age and Survivors Insurance Trust Fund .— There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) ) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted. \n \n “(i)   Treatment of Deposits .— The Secretary of the Treasury (or the Secretary’s delegate) shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of the tax imposed by section 3111(a) or 3221(a) of such Code if the Secretary determines that such failure was due to the anticipation of the credit allowed under this section.”\n[ Pub. L. 116–260, div. N, §\u202f288(a)(1)(A) , which directed amendment of  section 7003(c) of Pub. L. 116–127 , set out above, by inserting “,\u2000determined without regard to paragraphs (1) through (22) of section 3121(b) of such Code” after “as defined in section 3121(a) of the Internal Revenue Code of 1986”, was executed by making the insertion after “as defined in section 3121(a) of such Code” to reflect the probable intent of Congress.]\nPub. L. 116–127, div. G, §\u202f7005 ,  Mar. 18, 2020 ,  134 Stat. 219 , as amended by  Pub. L. 116–260, div. N, title II , §§\u202f286(b)(5), 288(d), (e),  Dec. 27, 2020 ,  134 Stat. 1991 , 1992, provided that: \n “(a)   In General .— Any wages required to be paid by reason of the Emergency Paid Sick Leave Act [div. E of  Pub. L. 116–127 ,  29 U.S.C. 2601  note] and the Emergency Family and Medical Leave Expansion Act [div. C of  Pub. L. 116–127 , see Short Title of 2020 Amendment note set out under  section 2601 of Title 29 , Labor] (or, in the case of wages paid after  December 31, 2020 , and before  April 1, 2021 , with respect to which a credit is allowed under section 7001 [set out above] or 7003 [set out above]) shall not be considered wages for purposes of section 3111(a) of the Internal Revenue Code of 1986 or compensation for purposes of section 3221(a) of such Code. Any reference in this subsection to the tax imposed by section 3221(a) of such Code shall be treated as a reference to so much of the tax as is attributable to the rate in effect under section 3111(a) of such Code. \n \n “(b)   Allowance of Credit for Hospital Insurance Taxes.— “(1)   In general .— The credit allowed by section 7001 and the credit allowed by section 7003 shall each be increased by the amount of the tax imposed by section 3111(b) of the Internal Revenue Code of 1986 and so much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(b) of such Code on qualified sick leave wages, or qualified family leave wages, for which credit is allowed under such section 7001 or 7003 (respectively). \n \n “(2)   Denial of double benefit .— For denial of double benefit with respect to the credit increase under paragraph (1), see sections 7001(e)(1) and 7003(e)(1). \n \n \n “(c)   Transfers to Federal Old-Age and Survivors Insurance Trust Fund .— There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) ) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted.”'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'Notwithstanding any other provision of law (whether enacted before or after the enactment of this section) which grants to any instrumentality of the United States an exemption from taxation, such instrumentality shall not be exempt from the tax imposed by section 3111 unless such other provision of law grants a specific exemption, by reference to section 3111 (or the corresponding section of prior law), from the tax imposed by such section.'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'Section, added  Aug. 1, 1956, ch. 836 , title II, §\u202f201(a)(1),  70 Stat. 839 , related to a restriction on exemptions from taxation for District of Columbia credit unions with respect to the tax imposed by  section 3111 of this title .\nRepeal applicable with respect to wages paid after  Dec. 31, 1976 , see  section 1903(d) of Pub. L. 94–455 , set out as an Effective Date of 1976 Amendment note under  section 3101 of this title .'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'For purposes of this chapter, if the services performed during one-half or more of any pay period by an employee for the person employing him constitute employment, all the services of such employee for such period shall be deemed to be employment; but if the services performed during more than one-half of any such pay period by an employee for the person employing him do not constitute employment, then none of the services of such employee for such period shall be deemed to be employment. As used in this subsection, the term “pay period” means a period (of not more than 31 consecutive days) for which a payment of remuneration is ordinarily made to the employee by the person employing him. This subsection shall not be applicable with respect to services performed in a pay period by an employee for the person employing him, where any of such service is excepted by subsection (b)(9).\nThe term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.\nThe term “United States” when used in a geographical sense includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.\nFor purposes of this chapter, the term “American vessel” means any vessel documented or numbered under the laws of the United States; and includes any vessel which is neither documented or numbered under the laws of the United States nor documented under the laws of any foreign country, if its crew is employed solely by one or more citizens or residents of the United States or corporations organized under the laws of the United States or of any State; and the term “American aircraft” means an aircraft registered under the laws of the United States.\nFor purposes of this chapter, in the case of domestic service described in subsection (a)(7)(B), any payment of cash remuneration for such service which is more or less than a whole-dollar amount shall, under such conditions and to such extent as may be prescribed by regulations made under this chapter, be computed to the nearest dollar. For the purpose of the computation to the nearest dollar, the payment of a fractional part of a dollar shall be disregarded unless it amounts to one-half dollar or more, in which case it shall be increased to $1. The amount of any payment of cash remuneration so computed to the nearest dollar shall, in lieu of the amount actually paid, be deemed to constitute the amount of cash remuneration for purposes of subsection (a)(7)(B).\nFor purposes of this chapter, in the case of an individual performing service, as a member of a uniformed service, to which the provisions of subsection (m)(1) are applicable, the term “wages” shall, subject to the provisions of subsection (a)(1) of this section, include as such individual’s remuneration for such service only (A) his basic pay as described in chapter 3 and  section 1009 of title 37 , United States Code, in the case of an individual performing service to which subparagraph (A) of such subsection (m)(1) applies, or (B) his compensation for such service as determined under  section 206(a) of title 37 , United States Code, in the case of an individual performing service to which subparagraph (B) of such subsection (m)(1) applies.\nFor purposes of this chapter, in the case of an individual performing service, as a volunteer or volunteer leader within the meaning of the Peace Corps Act, to which the provisions of section 3121(p) are applicable, the term “wages” shall, subject to the provisions of subsection (a)(1) of this section, include as such individual’s remuneration for such service only amounts paid pursuant to section 5(c) or 6(1) of the Peace Corps Act.\nFor purposes of this chapter, in any case where an individual is a member of a religious order (as defined in subsection (r)(2)) performing service in the exercise of duties required by such order, and an election of coverage under subsection (r) is in effect with respect to such order or with respect to the autonomous subdivision thereof to which such member belongs, the term “wages” shall, subject to the provisions of subsection (a)(1), include as such individual’s remuneration for such service the fair market value of any board, lodging, clothing, and other perquisites furnished to such member by such order or subdivision thereof or by any other person or organization pursuant to an agreement with such order or subdivision, except that the amount included as such individual’s remuneration under this paragraph shall not be less than $100 a month.\nFor purposes of this chapter, in the case of an individual performing service under the provisions of  section 294 of title 28 , United States Code (relating to assignment of retired justices and judges to active duty), the term “wages” shall not include any payment under section 371(b) of such title 28 which is received during the period of such service.\nExcept as provided in paragraph (2), all service performed in the employ of a State or political subdivision in connection with its operation of a public transportation system shall constitute covered transportation service if any part of the transportation system was acquired from private ownership after 1936 and prior to 1951.\nAll service performed in the employ of a State or political subdivision thereof in connection with its operation of a public transportation system shall constitute covered transportation service if the transportation system was not operated by the State or political subdivision prior to 1951 and, at the time of its first acquisition (after 1950) from private ownership of any part of its transportation system, the State or political subdivision did not have a general retirement system covering substantially all service performed in connection with the operation of the transportation system.\nAn agreement entered into pursuant to paragraph (1) shall be in effect for the period beginning with the first day of the calendar quarter in which such agreement is entered into or the first day of the succeeding calendar quarter, as may be specified in the agreement; except that in case such agreement is amended to include the services performed for any other affiliate and such amendment is executed after the first month following the first calendar quarter for which the agreement is in effect, the agreement shall be in effect with respect to service performed for such other affiliate only after the calendar quarter in which such amendment is executed. Notwithstanding any other provision of this subsection, the period for which any such agreement is effective with respect to any foreign entity shall terminate at the end of any calendar quarter in which the foreign entity, at any time in such quarter, ceases to be a foreign affiliate as defined in paragraph (6).\nNo agreement under this subsection may be terminated, either in its entirety or with respect to any foreign affiliate, on or after  June 15, 1989 .\nA foreign affiliate of an American employer is any foreign entity in which such American employer has not less than a 10-percent interest.\nEach American employer which enters into an agreement pursuant to paragraph (1) of this subsection shall, for purposes of this subsection and section 6413(c)(2)(C), relating to special refunds in the case of employees of certain foreign entities, be considered an employer in its capacity as a party to such agreement separate and distinct from its identity as a person employing individuals on its own account.\nRegulations of the Secretary to carry out the purposes of this subsection shall be designed to make the requirements imposed on American employers with respect to services covered by an agreement entered into pursuant to this subsection the same, so far as practicable, as those imposed upon employers pursuant to this title with respect to the taxes imposed by this chapter.\nThe term “active duty” means “active duty” as described in paragraph (21) of  section 101 of title 38 , United States Code, except that it shall also include “active duty for training” as described in paragraph (22) of such section.\nThe term “inactive duty training” means “inactive duty training” as described in paragraph (23) of such section 101.\nFor purposes of this chapter, the term “crew leader” means an individual who furnishes individuals to perform agricultural labor for another person, if such individual pays (either on his own behalf or on behalf of such person) the individuals so furnished by him for the agricultural labor performed by them and if such individual has not entered into a written agreement with such person whereby such individual has been designated as an employee of such person; and such individuals furnished by the crew leader to perform agricultural labor for another person shall be deemed to be the employees of such crew leader. For purposes of this chapter and chapter 2, a crew leader shall, with respect to service performed in furnishing individuals to perform agricultural labor for another person and service performed as a member of the crew, be deemed not to be an employee of such other person.\nFor purposes of this chapter, the term “employment” shall, notwithstanding the provisions of subsection (b) of this section, include service performed by an individual as a volunteer or volunteer leader within the meaning of the Peace Corps Act.\nFor purposes of this chapter, tips received by an employee in the course of his employment shall be considered remuneration for such employment (and deemed to have been paid by the employer for purposes of subsections (a) and (b) of section 3111). Such remuneration shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) or (if no statement including such tips is so furnished) at the time received; except that, in determining the employer’s liability in connection with the taxes imposed by section 3111 with respect to such tips in any case where no statement including such tips was so furnished (or to the extent that the statement so furnished was inaccurate or incomplete), such remuneration shall be deemed for purposes of subtitle F to be paid on the date on which notice and demand for such taxes is made to the employer by the Secretary.\nFor purposes of this subsection, a member of a religious order means any individual who is subject to a vow of poverty as a member of such order and who performs tasks usually required (and to the extent usually required) of an active member of such order and who is not considered retired because of old age or total disability.\nFor purposes of sections 3102, 3111, and 3121(a)(1), if two or more related corporations concurrently employ the same individual and compensate such individual through a common paymaster which is one of such corporations, each such corporation shall be considered to have paid as remuneration to such individual only the amounts actually disbursed by it to such individual and shall not be considered to have paid as remuneration to such individual amounts actually disbursed to such individual by another of such corporations.\nFor purposes of the taxes imposed by sections 3101(b) and 3111(b), subsection (b) shall be applied without regard to paragraph (5) thereof.\nExcept as provided in subparagraphs (B) and (C), subsection (b) shall be applied without regard to paragraph (7) thereof.\nAny amount taken into account as wages by reason of subparagraph (A) (and the income attributable thereto) shall not thereafter be treated as wages for purposes of this chapter.\nFor purposes of this paragraph, the term “nonqualified deferred compensation plan” means any plan or other arrangement for deferral of compensation other than a plan described in subsection (a)(5).\nAny church or qualified church-controlled organization (as defined in paragraph (3)) may make an election within the time period described in paragraph (2), in accordance with such procedures as the Secretary determines to be appropriate, that services performed in the employ of such church or organization shall be excluded from employment for purposes of title II of the Social Security Act and this chapter. An election may be made under this subsection only if the church or qualified church-controlled organization states that such church or organization is opposed for religious reasons to the payment of the tax imposed under section 3111.\nAn election under this subsection must be made prior to the first date, more than 90 days after  July 18, 1984 , on which a quarterly employment tax return for the tax imposed under section 3111 is due, or would be due but for the election, from such church or organization. An election under this subsection shall apply to current and future employees, and shall apply to service performed after  December 31, 1983 . The election may be revoked by the church or organization under regulations prescribed by the Secretary. The election shall be revoked by the Secretary if such church or organization fails to furnish the information required under section 6051 to the Secretary for a period of 2 years or more with respect to remuneration paid for such services by such church or organization, and, upon request by the Secretary, fails to furnish all such previously unfurnished information for the period covered by the election. Any revocation under the preceding sentence shall apply retroactively to the beginning of the 2-year period for which the information was not furnished.\nFor purposes of subsection (a)(7)(B), the term “applicable dollar threshold” means $1,000. In the case of calendar years after 1995, the Commissioner of Social Security shall adjust such $1,000 amount at the same time and in the same manner as under section 215(a)(1)(B)(ii) of the Social Security Act with respect to the amounts referred to in section 215(a)(1)(B)(i) of such Act, except that, for purposes of this paragraph, 1993 shall be substituted for the calendar year referred to in section 215(a)(1)(B)(ii)(II) of such Act. If any amount as adjusted under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.\nThe term “Federal agency” means an agency, as defined in  section 3581(1) of title 5 , United States Code.\nThe term “international organization” has the meaning provided such term by  section 3581(3) of title 5 , United States Code.\nIf any employee of a foreign person is performing services in connection with a contract between the United States Government (or any instrumentality thereof) and any member of any domestically controlled group of entities which includes such foreign person, such foreign person shall be treated for purposes of this chapter as an American employer with respect to such services performed by such employee.\nThe term “domestically controlled group of entities” means a controlled group of entities the common parent of which is a domestic corporation.\nIn the case of a foreign person who is a member of any domestically controlled group of entities, the common parent of such group shall be jointly and severally liable for any tax under this chapter for which such foreign person is liable by reason of this subsection, and for any penalty imposed on such person by this title with respect to any failure to pay such tax or to file any return or statement with respect to such tax or wages subject to such tax. No deduction shall be allowed under this title for any liability imposed by the preceding sentence.\nParagraph (1) shall not apply to any services which are covered by an agreement under subsection ( l ).\nParagraph (1) shall not apply to any services if the employer establishes to the satisfaction of the Secretary that the remuneration paid by such employer for such services is subject to a tax imposed by a foreign country which is substantially equivalent to the taxes imposed by this chapter.\nFor relief from taxes in cases covered by certain international agreements, see sections 3101(c) and 3111(c).\nThe Social Security Act, referred to in subsecs. (a)(1), (15), (b), (d)(4), (j)(2)(D), (4)(B), ( l )(1), (4), (6), (r)(3)(A), (u), (w)(1), and (x), is  act Aug. 14, 1935, ch. 531 ,  49 Stat. 620 . Title II of the Act is classified generally to subchapter II (§\u202f401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Sections 201, 210, 215, 218, 218A, 223, 230, and 233 of the Act are classified to sections 401, 410, 415, 418, 418a, 423, 430, and 433, respectively, of Title 42. For complete classification of this Act to the Code, see  section 1305 of Title 42  and Tables.\nSection 3(2)(B)(ii) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a)(5)(F), is classified to  section 1002(2)(B)(ii) of Title 29 , Labor.\nSection 104(e)(2) of the Indian Self-Determination Act, referred to in subsec. (b)(5)(B)(i)(V), is classified to  section 5323(e)(2) of Title 25 , Indians.\nLevel V of the Executive Schedule, referred to in subsec. (b)(5)(D)(iii), is set out in  section 5316 of Title 5 , Government Organization and Employees.\nSection 301 of the Federal Employees’ Retirement System Act of 1986, referred to in subsec. (b)(5)(H)(i), is  section 301 of Pub. L. 99–335 , which is set out as a note under  section 8331 of Title 5 , Government Organization and Employees.\nThe Federal Employees’ Retirement System Open Enrollment Act of 1997, referred to in subsec. (b)(5)(H)(i), is  section 642 of Pub. L. 105–61 , title VI,  Oct. 10, 1997 ,  111 Stat. 1318 , which is classified principally to a note under  section 8331 of Title 5 , Government Organization and Employees. For complete classification of this Act to the Code, see Tables.\nThe Foreign Service Act of 1980, referred to in subsec. (b)(5)(H)(ii), is  Pub. L. 96–465 ,  Oct. 17, 1980 ,  94 Stat. 2071 . Subchapter II of chapter 8 of title I of the Act is classified generally to part II (§\u202f4071 et seq.) of subchapter VIII of chapter 52 of Title 22, Foreign Relations and Intercourse. Section 860 of the Act is classified to  section 4071i of Title 22 . For complete classification of this Act to the Code, see Short Title note set out under  section 3901 of Title 22  and Tables.\nSection 101(a)(15) of the Immigration and Nationality Act, referred to in subsec. (b)(18), (19), is classified to  section 1101(a)(15) of Title 8 , Aliens and Nationality.\nSection 15(g) of the Agricultural Marketing Act, referred to in subsec. (g)(3), is classified to  section 1141j of Title 12 , Banks and Banking.\nThe Peace Corps Act, referred to in subsecs. (i)(3), (p), is  Pub. L. 87–293, title I ,  Sept. 22, 1961 ,  75 Stat. 612 , which is classified principally to chapter 34 (§\u202f2501 et seq.) of Title 22, Foreign Relations and Intercourse. Sections 5 and 6 of the Peace Corps Act are classified to sections 2504 and 2505 of Title 22. For complete classification of this Act to the Code, see Short Title note set out under  section 2501 of Title 22  and Tables.\nChapter 9 of the Internal Revenue Code of 1939, referred to in subsec. (j)(4)(B), was comprised of sections 1400 to 1636 of former Title 26, Internal Revenue Code. For table of comparisons of the 1939 Code to the 1986 Code, see Table I preceding  section 1 of this title . See also  section 7851(a)(3) of this title  for applicability of chapter 9 of former Title 26. See also  section 7851(e) of this title  for provision that references in the 1986 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1986 Code, which is then applicable.\nThe Military Selective Service Act, referred to in subsec. (n)(5)(B), is  act June 24, 1948, ch. 625 ,  62 Stat. 604 , which is classified principally to chapter 49 (§\u202f3801 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see Tables.\nFor information regarding constitutionality of certain provisions of this section, see note under  section 410 of Title 42 , The Public Health and Welfare.\n2022—Subsec. (b)(5)(E).  Pub. L. 117–328  inserted “or special trial judge” before “of the United States Tax Court”.\n2019—Subsec. (a)(23).  Pub. L. 116–94  substituted “section 139B(a)” for “139B(b)”.\n2018—Subsec. (b)(5)(B)(i)(V).  Pub. L. 115–141, §\u202f401(a)(209) , substituted “section 104(e)(2)” for “section 105(e)(2)”.\nSubsec. (b)(5)(E).  Pub. L. 115–141, §\u202f401(a)(325)(A) , substituted “United States Court of Federal Claims” for “United States Claims Court”.\nSubsec. (b)(5)(H)(i).  Pub. L. 115–141, §\u202f401(a)(210) , inserted comma after “1997”.\nSubsec. (b)(22).  Pub. L. 115–243, §\u202f2(b)(2)(A) , added par. (22).\nSubsec. (d)(4).  Pub. L. 115–243, §\u202f2(b)(2)(B) , inserted “or 218A” after “section 218”.\n2014—Subsec. (a)(17).  Pub. L. 113–295, §\u202f221(a)(19)(B)(iv) , struck out par. (17) which read as follows: “any contribution, payment, or service provided by an employer which may be excluded from the gross income of an employee, his spouse, or his dependents, under the provisions of section 120 (relating to amounts received under qualified group legal services plans);”.\nSubsec. (b)(17).  Pub. L. 113–295, §\u202f221(a)(99)(C)(i) , struck out par. (17) which read as follows: “service in the employ of any organization which is performed (A) in any year during any part of which such organization is registered, or there is in effect a final order of the Subversive Activities Control Board requiring such organization to register, under the Internal Security Act of 1950, as amended, as a Communist-action organization, a Communist-front organization, or a Communist-infiltrated organization, and (B) after  June 30, 1956 ;”.\n2008—Subsec. (a)(23).  Pub. L. 110–245, §\u202f115(a)(1) , added par. (23).\nSubsec. (b)(5)(E).  Pub. L. 110–458  struck out “or special trial judge” before “of the United States Tax Court”.\nSubsec. (z).  Pub. L. 110–245, §\u202f302(a) , added subsec. (z).\n2007—Subsec. (v)(1)(A).  Pub. L. 110–172 , which directed amendment of subpar. (A) by inserting “or consisting of designated Roth contributions (as defined in section 402A(c))” before comma at end, was executed by making the insertion before “,\u2000or”, to reflect the probable intent of Congress.\n2006—Subsec. (b)(5)(E).  Pub. L. 109–280  inserted “or special trial judge” before “of the United States Tax Court”.\n2004—Subsec. (a)(7)(B).  Pub. L. 108–203, §\u202f423(a) , substituted “on a farm operated for profit” for “described in subsection (g)(5)”.\nSubsec. (a)(18).  Pub. L. 108–375  substituted “134(b)(4), or 134(b)(5)” for “or 134(b)(4)”.\nSubsec. (a)(20).  Pub. L. 108–357, §\u202f320(b)(1) , inserted “108(f)(4),” after “74(c),”.\nSubsec. (a)(22).  Pub. L. 108–357, §\u202f251(a)(1)(A) , added par. (22).\nSubsec. (g)(5).  Pub. L. 108–203, §\u202f423(c) , struck out “or is domestic service in a private home of the employer” after “employer’s trade or business”.\nSubsec. (v)(2)(A).  Pub. L. 108–357, §\u202f802(c)(1) , inserted “or to any specified stock compensation (as defined in section 4985) on which tax is imposed by section 4985” before period at end.\n2003—Subsec. (a)(18).  Pub. L. 108–121  substituted “,\u2000129, or 134(b)(4)” for “or 129”.\n2000—Subsec. (a)(5)(G).  Pub. L. 106–554  substituted a comma for the semicolon at end.\n1998—Subsec. (a)(5)(F).  Pub. L. 105–206, §\u202f6023(13)(A) , which directed the substitution of a comma for the semicolon at end of subpar. (F), could not be executed because a semicolon did not appear at end of subpar. (F).\nSubsec. (a)(5)(G).  Pub. L. 105–206, §\u202f6023(13)(B) , struck out “or” at end.\nSubsec. (a)(5)(I).  Pub. L. 105–206, §\u202f6023(13)(C) , substituted a semicolon for the period at end.\nSubsec. (b)(7)(C).  Pub. L. 105–277  added  Pub. L. 105–33, §\u202f11246(b)(2)(A) . See 1997 Amendment note below.\n1997—Subsec. (b)(5)(H)(i).  Pub. L. 105–61  substituted “1986,” for “1986 or” and inserted “or the Federal Employees’ Retirement System Open Enrollment Act of 1997” after “( 50 U.S.C. 2157 ),”.\nSubsec. (b)(7)(C).  Pub. L. 105–33, §\u202f11246(b)(2)(A) , as added by  Pub. L. 105–277 , inserted “(other than the Federal Employees Retirement System provided in chapter 84 of title 5, United States Code)” after “law of the United States” in introductory provisions.\n1996—Subsec. (a)(5)(F).  Pub. L. 104–188, §\u202f1421(b)(8)(A) , struck out “or” at end.\nSubsec. (a)(5)(G).  Pub. L. 104–188, §\u202f1458(b)(1) , which directed that subpar. (G) be amended by striking “(or)” at the end, could not be executed because “(or)” did not appear.\nPub. L. 104–188, §\u202f1421(b)(8)(A) , inserted “or” at end.\nSubsec. (a)(5)(H).  Pub. L. 104–188, §\u202f1458(b)(1) , inserted “or” at end.\nPub. L. 104–188, §\u202f1421(b)(8)(A) , added subpar. (H).\nSubsec. (a)(5)(I).  Pub. L. 104–188, §\u202f1458(b)(1) , added subpar. (I).\nSubsec. (b).  Pub. L. 104–188, §\u202f1116(a)(1)(A) , inserted closing provisions “For purposes of paragraph (20), the operating crew of a boat shall be treated as normally made up of fewer than 10 individuals if the average size of the operating crew on trips made during the preceding 4 calendar quarters consisted of fewer than 10 individuals.”\nSubsec. (b)(20)(A).  Pub. L. 104–188, §\u202f1116(a)(1)(B) , amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “such individual does not receive any cash remuneration (other than as provided in subparagraph (B)),”.\n1994—Subsec. (a)(7)(B).  Pub. L. 103–387, §\u202f2(a)(1)(A) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “cash remuneration paid by an employer in any calendar quarter to an employee for domestic service in a private home of the employer, if the cash remuneration paid in such quarter by the employer to the employee for such service is less than $50. As used in this subparagraph, the term ‘domestic service in a private home of the employer’ does not include service described in subsection (g)(5);”.\nSubsec. (b)(7)(F)(iv).  Pub. L. 103–296, §\u202f303(a)(2) , substituted “$1,000 with respect to service performed during any calendar year commencing on or after  January 1, 1995 , ending on or before  December 31, 1999 , and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after  January 1, 2000 , with respect to service performed during such calendar year” for “$100”.\nSubsec. (b)(10)(B).  Pub. L. 103–296, §\u202f108(h)(2) , substituted “Commissioner of Social Security” for “Secretary of Health and Human Services”.\nSubsec. (b)(15).  Pub. L. 103–296, §\u202f319(a)(5) , inserted “,\u2000except service which constitutes ‘employment’ under subsection (y)” after “international organization”.\nSubsec. (b)(19).  Pub. L. 103–296, §\u202f320(a)(1)(C) , substituted “(J), (M), or (Q)” for “(J), or (M)” in two places.\nSubsec. (b)(21).  Pub. L. 103–387, §\u202f2(a)(1)(C) , added par. (21).\nSubsec. (u)(2)(B)(ii)(V).  Pub. L. 103–296, §\u202f303(b)(2) , substituted “$1,000 with respect to service performed during any calendar year commencing on or after  January 1, 1995 , ending on or before  December 31, 1999 , and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after  January 1, 2000 , with respect to service performed during such calendar year” for “$100”.\nSubsec. (x).  Pub. L. 103–387, §\u202f2(a)(1)(B) , added subsec. (x).\nSubsec. (y).  Pub. L. 103–296, §\u202f319(a)(1) , added subsec. (y).\n1993—Subsec. (a)(1).  Pub. L. 103–66, §\u202f13207(a)(1) , inserted “in the case of the taxes imposed by sections 3101(a) and 3111(a)” after “(1)”, substituted “contribution and benefit base (as determined under section 230 of the Social Security Act)” for “applicable contribution base (as determined under subsection (x))” in two places, and substituted “such contribution and benefit base” for “such applicable contribution base”.\nSubsec. (b)(5)(H)(i).  Pub. L. 103–178  substituted “section 307 of the Central Intelligence Agency Retirement Act ( 50 U.S.C. 2157 )” for “section 307 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees”.\nSubsec. (x).  Pub. L. 103–66, §\u202f13207(a)(2) , struck out subsec. (x) which defined parameters of the applicable contribution base for purposes of this chapter.\n1992—Subsec. (v)(1)(A).  Pub. L. 102–318  substituted “402(e)(3)” for “402(a)(8)”.\n1990—Subsec. (a)(1).  Pub. L. 101–508, §\u202f11331(a)(1) , substituted “applicable contribution base (as determined under subsection (x))” for “contribution and benefit base (as determined under section 230 of the Social Security Act)” wherever appearing and “such applicable contribution base” for “such contribution and benefit base”.\nSubsec. (b)(7)(F).  Pub. L. 101–508, §\u202f11332(b) , added subpar. (F).\nSubsec. (x).  Pub. L. 101–508, §\u202f11331(a)(2) , added subsec. (x).\n1989—Subsec. ( l )(1).  Pub. L. 101–239, §\u202f10201(b)(3) , substituted “paragraph (6)” for “paragraph (8)” in introductory provisions.\nSubsec. ( l )(2).  Pub. L. 101–239, §\u202f10201(a)(1) , inserted at end “Notwithstanding any other provision of this subsection, the period for which any such agreement is effective with respect to any foreign entity shall terminate at the end of any calendar quarter in which the foreign entity, at any time in such quarter, ceases to be a foreign affiliate as defined in paragraph (6).”\nSubsec. ( l )(3).  Pub. L. 101–239, §\u202f10201(a)(2) , (3), added par. (3) and struck out former par. (3) relating to termination of period by American employer.\nSubsec. ( l )(4).  Pub. L. 101–239, §\u202f10201(a)(2) , (4), redesignated par. (6) as (4) and struck out former par. (4) relating to termination of period by Secretary.\nSubsec. ( l )(5).  Pub. L. 101–239, §\u202f10201(a)(2) , (4), redesignated par. (7) as (5) and struck out former par. (5) relating to no renewal of agreement.\nSubsec. ( l )(6) to (10).  Pub. L. 101–239, §\u202f10201(a)(4) , redesignated pars. (6) to (10) as (4) to (8), respectively.\nSubsec. (x).  Pub. L. 101–140  amended this section to read as if amendments by  Pub. L. 100–647, §\u202f1011B(a)(22)(A) , had not been enacted, see 1988 Amendment note below.\n1988—Subsec. (a)(5)(G).  Pub. L. 100–647, §\u202f1011B(a)(23)(A) , inserted “if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that (if section 125 applied for purposes of this section) section 125 would not treat any wages as constructively received” after “section 125)”.\nSubsec. (a)(8)(B).  Pub. L. 100–647, §\u202f8017(b) , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “cash remuneration paid by an employer in any calendar year to an employee for agricultural labor unless (i) the cash remuneration paid in such year by the employer to the employee for such labor is $150 or more, or (ii) the employer’s expenditures for agricultural labor in such year equal or exceed $2,500;”.\nSubsec. (a)(11).  Pub. L. 100–647, §\u202f1001(g)(4)(B)(i) , inserted “(determined without regard to section 274(n))” after “section 217”.\nSubsec. (a)(21).  Pub. L. 100–647, §\u202f3043(c)(2) , added par. (21).\nSubsec. (b)(5).  Pub. L. 100–647, §\u202f8015(c)(2) , inserted “any such service performed on or after any date on which such individual performs” after “with respect to” in provision preceding subpar. (C).\nSubsec. (b)(5)(H).  Pub. L. 100–647, §\u202f8015(b)(2) , amended subpar. (H) generally. Prior to amendment, subparagraph (H) read as follows: “service performed by an individual on or after the effective date of an election by such individual under section 301(a) of the Federal Employees’ Retirement System Act of 1986, or under regulations issued under section 860 of the Foreign Service Act of 1980 or section 307 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, to become subject to chapter 84 of title 5, United States Code;”.\nSubsec. (b)(19).  Pub. L. 100–647, §\u202f1001(d)(2)(C)(i) , substituted “(F), (J), or (M)” for “(F) or (J)” in two places.\nSubsec. (b)(20).  Pub. L. 100–647, §\u202f8016(a)(4)(A) , (C), made technical correction to directory language of  Pub. L. 99–272, §\u202f13303(c)(2) , see 1986 Amendment note below.\nSubsec. (d)(3), (4).  Pub. L. 100–647, §\u202f8016(a)(3)(A) , redesignated par. (4) as (3) and substituted “;\u2000or” for a period at the end, and redesignated par. (3) as (4), substituted a period for “;\u2000or” at the end, and moved redesignated par. (4) to the end of the subsection.\nSubsec. (u)(2)(B)(ii)(VI).  Pub. L. 100–647, §\u202f1018(r)(2)(A) , added subcl. (VI).\nSubsec. (v)(3)(A).  Pub. L. 100–647, §\u202f1011(e)(8) , substituted “457(f)(1)” for “457(e)(1)”.\nSubsec. (v)(3)(C).  Pub. L. 100–647, §\u202f1018(u)(35) , substituted “Savings” for “Saving”.\nSubsec. (x).  Pub. L. 100–647, §\u202f1011B(a)(22)(A) , added subsec. (x) relating to benefits provided under certain employee benefit plans.\n1987—Subsec. (a)(2)(C).  Pub. L. 100–203, §\u202f9003(a)(2) , substituted “death, except that this paragraph does not apply to a payment for group-term life insurance to the extent that such payment is includible in the gross income of the employee” for “death”.\nSubsec. (a)(5)(F).  Pub. L. 100–203, §\u202f9023(d)(1) , substituted a comma for semicolon before “or” at end.\nSubsec. (a)(5)(G).  Pub. L. 100–203, §\u202f9023(d)(2) , substituted a semicolon for comma at end.\nSubsec. (a)(8)(B)(ii).  Pub. L. 100–203, §\u202f9002(b) , added cl. (ii) and struck out former cl. (ii) which read as follows: “the employee performs agricultural labor for the employer on 20 days or more during such year for cash remuneration computed on a time basis;”.\nSubsec. (b)(3)(A).  Pub. L. 100–203, §\u202f9005(b)(1) , substituted “18” for “21”.\nPub. L. 100–203, §\u202f9004(b)(1) , struck out “performed by an individual in the employ of his spouse, and service” after “service”.\nSubsec. (b)(3)(B).  Pub. L. 100–203, §\u202f9005(b)(2) , inserted “under the age of 21 in the employ of his father or mother, or performed by an individual” after first reference to “individual”.\nPub. L. 100–203, §\u202f9004(b)(2) , inserted introductory provisions and struck out former introductory provisions which read as follows: “service not in the course of the employer’s trade or business, or domestic service in a private home of the employer, performed by an individual in the employ of his son or daughter; except that the provisions of this subparagraph shall not be applicable to such domestic service if—”.\nSubsec. (i)(2).  Pub. L. 100–203, §\u202f9001(b)(2) , substituted “only (A) his basic pay as described in chapter 3 and  section 1009 of title 37 , United States Code, in the case of an individual performing service to which subparagraph (A) of such subsection (m)(1) applies, or (B) his compensation for such service as determined under  section 206(a) of title 37 , United States Code, in the case of an individual performing service to which subparagraph (B) of such subsection (m)(1) applies.” for “only his basic pay as described in chapter 3 and  section 1009 of title 37 , United States Code.”\nSubsec. (m)(1).  Pub. L. 100–203, §\u202f9001(b)(1) , amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘employment’ shall, notwithstanding the provisions of subsection (b) of this section, include service performed by an individual as a member of a uniformed service on active duty; but such term shall not include any such service which is performed while on leave without pay.”\nSubsec. (q).  Pub. L. 100–203, §\u202f9006(a) , in heading substituted “both employee and employer taxes” for “employee taxes”, and in text struck out “other than for purposes of the taxes imposed by section 3111” after “of this chapter”, substituted “remuneration for such employment (and deemed to have been paid by the employer for purposes of subsections (a) and (b) of section 3111)” for “remuneration for employment”, and inserted before period at end “;\u2000except that, in determining the employer’s liability in connection with the taxes imposed by section 3111 with respect to such tips in any case where no statement including such tips was so furnished (or to the extent that the statement so furnished was inaccurate or incomplete), such remuneration shall be deemed for purposes of subtitle F to be paid on the date on which notice and demand for such taxes is made to the employer by the Secretary”.\nSubsec. (t).  Pub. L. 100–203, §\u202f9006(b)(2) , struck out subsec. (t) which related to special rule for determining wages subject to employer tax in case of certain employers whose employees receive income from tips.\n1986—Subsec. (a)(5)(C).  Pub. L. 99–514, §\u202f1108(g)(7) , amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “under a simplified employee pension if, at the time of the payment, it is reasonable to believe that the employee will be entitled to a deduction under section 219(b)(2) for such payment,”.\nSubsec. (a)(5)(G).  Pub. L. 99–514, §\u202f1151(d)(2)(A) , added subpar. (G).\nSubsec. (a)(8).  Pub. L. 99–514, §\u202f1883(a)(11)(B) , realigned margin of subpar. (B).\nSubsec. (a)(20).  Pub. L. 99–514, §\u202f122(e)(1) , inserted reference to section 74(c).\nSubsec. (b)(5)(H).  Pub. L. 99–335  added subpar. (H).\nSubsec. (b)(7)(E).  Pub. L. 99–509, §\u202f9002(b)(1)(A) , added subpar. (E).\nSubsec. (b)(20).  Pub. L. 99–272, §\u202f13303(c)(2) , as amended by  Pub. L. 100–647, §\u202f8016(a)(4)(A) , (C), inserted “(other than service described in paragraph (3)(A))” after “service”.\nSubsec. (d)(3), (4).  Pub. L. 99–509, §\u202f9002(b)(2)(A) , added par. (3) and redesignated former par. (3) as (4).\nSubsec. (i)(5).  Pub. L. 99–272, §\u202f12112(b) , substituted “shall not include” for “shall, subject to the provisions of subsection (a)(1) of this section, include”.\nSubsec. (u).  Pub. L. 99–272, §\u202f13205(a)(1) , amended subsec. (u) generally, substantially expanding and revising its provisions by extending the application of hospital insurance tax to State and local employment.\nSubsec. (u)(2)(B)(ii)(V).  Pub. L. 99–514, §\u202f1895(b)(18)(A) , added subcl. (V).\nSubsec. (v)(2)(A)(ii).  Pub. L. 99–514, §\u202f1899A(38) , substituted “forfeiture” for “forefeiture”.\nSubsec. (v)(3)(C).  Pub. L. 99–514, §\u202f1147(b) , added subpar. (C).\nSubsec. (w)(1).  Pub. L. 99–514, §\u202f1899A(39) , substituted “this chapter” for “chapter 21 of this Code” in first sentence.\nSubsec. (w)(2).  Pub. L. 99–514, §\u202f1882(c) , substituted last three sentences for former last two sentences which read as follows: “The election may not be revoked by the church or organization, but shall be permanently revoked by the Secretary if such church or organization fails to furnish the information required under section 6051 to the Secretary for a period of 2 years or more with respect to remuneration paid for such services by such church or organization, and, upon request by the Secretary, fails to furnish all such previously unfurnished information for the period covered by the election. Such revocation shall apply retroactively to the beginning of the 2-year period for which the information was not furnished.”\nPub. L. 99–514, §\u202f1899A(40) , substituted “ July 18, 1984 ” for “the date of the enactment of this subsection” in first sentence.\n1985—Subsec. (b)(5)(B)(i)(V).  Pub. L. 99–221  added subcl. (V).\n1984—Subsec. (a).  Pub. L. 98–369, §\u202f531(d)(1)(A)(i) , inserted “(including benefits)” before “paid in any medium” in introductory provisions.\nSubsec. (a)(5)(C) to (G).  Pub. L. 98–369, §\u202f491(d)(36) , struck out subpar. (C) which provided: “under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a),” and redesignated subpars, (D) to (G) as (C) to (F), respectively.\nSubsec. (a)(20).  Pub. L. 98–369, §\u202f531(d)(1)(A)(ii) , added par. (20).\nSubsec. (b)(1).  Pub. L. 98–369, §\u202f2663(i)(1) , struck out “(A) under contracts entered into in accordance with title V of the Agricultural Act of 1949, as amended ( 7 U.S.C. 1461–146 8), or (B)”.\nSubsec. (b)(5)(B).  Pub. L. 98–369, §\u202f2601(b)(1) , in amending subpar. (B) generally, substituted provision broadening social security coverage for newly hired Federal civilian employees effective with remuneration paid after  Dec. 31, 1983 , by providing that persons transferring from other government service to civilian service be covered under social security, unless the other service was in an international organization, or the person is returning to civilian service after temporary military or reserve duty and is exercising his reemployment rights under chapter 43 of title 38.\nSubsec. (b)(5)(C) to (G).  Pub. L. 98–369, §\u202f2601(b)(2) , substituted subpar. designations (C) to (G) for former designations (i) to (v), respectively, in subpar. (D), as so redesignated, redesignated cls. (I) to (III) as (i) to (iii), respectively, and amended generally, subpar. (G), as so redesignated, designating provision relating to service performed by an individual who is not subject to subchapter III of chapter 83 of title 5 as cl. (i), and in cl. (i) as so designated, inserting reference to another retirement system established by a law of the United States for Federal employees, other than for members of the uniformed services and adding cls. (ii) and (iii), and provision for determining for purposes of this subparagraph whether an individual is subject to subchapter III of chapter 83 of title 5 or any other retirement system.\nSubsec. (b)(8).  Pub. L. 98–369, §\u202f2603(a)(2) , designated existing provisions as subpar. (A), substituted “this subparagraph” for “this paragraph”, and added subpar. (B).\nSubsec. (b)(10)(B).  Pub. L. 98–369, §\u202f2663(j)(5)(C) , substituted “Secretary of Health and Human Services” for “Secretary of Health, Education, and Welfare”.\nSubsec. (i)(2).  Pub. L. 98–369, §\u202f2663(i)(2) , substituted “chapter 3 and  section 1009 of title 37 , United States Code” for “section 102(10) of the Servicemen’s and Veterans’ Survivor Benefits Act”.\nSubsec. (m)(2).  Pub. L. 98–369, §\u202f2663(i)(3) , substituted “paragraph (21) of  section 101 of title 38 , United States Code” for “section 102 of the Servicemen’s and Veterans’ Survivor Benefits Act” and “paragraph (22) of such section” for “such section”.\nSubsec. (m)(3).  Pub. L. 98–369, §\u202f2663(i)(4) , substituted “paragraph (23) of such section 101” for “such section 102”.\nSubsec. (n).  Pub. L. 98–369, §\u202f2663(i)(5) , in provision preceding par. (1) substituted “a reserve component as defined in  section 101(27) of title 38 , United States Code” for “a reserve component of a uniformed service as defined in section 102(3) of the Servicemen’s and Veterans’ Survivor Benefits Act”, and inserted “,\u2000the National Oceanic and Atmospheric Administration Corps,”.\nSubsec. (n)(5).  Pub. L. 98–369, §\u202f2663(i)(5)(C) , substituted “military, naval, or air” for “military or naval” in two places.\nSubsec. (n)(5)(B).  Pub. L. 98–369, §\u202f2663(i)(5)(D) , substituted “Military Selective Service Act” for “Universal Military Training and Service Act”.\nSubsec. (v)(1)(B).  Pub. L. 98–369, §\u202f2661 ( o )(3), substituted “section 414(h)(2) where the pick up referred to in such section is pursuant to a salary reduction agreement (whether evidenced by a written instrument or otherwise)” for “section 414(h)(2)”.\nSubsec. (v)(2)(A).  Pub. L. 98–369, §\u202f67(c) , inserted provision that the preceding sentence shall not apply to any excess parachute payment (as defined in section 2801G(b)).\nSubsec. (w).  Pub. L. 98–369, §\u202f2603(b) , added subsec. (w).\n1983—Subsec. (a).  Pub. L. 98–21, §\u202f327(b)(1) , inserted in text following last numbered paragraph a provision that nothing in the regulations prescribed for purposes of chapter 24 (relating to income tax withholding) which provides an exclusion from “wages” as used in such chapter shall be construed to require a similar exclusion from “wages” in regulations prescribed for purposes of this chapter.\nPub. L. 98–21, §\u202f324(a)(3)(D) , substituted reference to subpar. (A) of par. (2) for reference to subpar. (B) thereof in text following last numbered paragraph.\nSubsec. (a)(2).  Pub. L. 98–21, §\u202f324(a)(3)(A) , struck out “(A) retirement, or”, and redesignated subpars. (B) to (D) as (A) to (C), respectively.\nSubsec. (a)(3).  Pub. L. 98–21, §\u202f324(a)(3)(B) , struck out par. (3) which related to any payment made to an employee (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) on account of retirement.\nSubsec. (a)(5)(D).  Pub. L. 98–21, §\u202f328(a) , substituted “section 219(b)(2)” for “section 219”.\nSubsec. (a)(5)(E) to (G).  Pub. L. 98–21, §\u202f324(a)(2) , added subpars. (E) to (G).\nSubsec. (a)(9).  Pub. L. 98–21, §\u202f324(a)(3)(B) , struck out par. (9) which related to any payment (other than vacation or sick pay) made to an employee after the month in which he attained age 62, if such employee did not work for the employer in the period for which such payment was made.\nSubsec. (a)(13)(A)(iii).  Pub. L. 98–21, §\u202f324(a)(3)(C) , struck out cl. (iii) which related to the case of retirement after attaining an age specified in the plan referred to in subparagraph (B) or in a pension plan of the employer.\nSubsec. (a)(19).  Pub. L. 98–21, §\u202f327(a)(1) , added par. (19).\nSubsec. (b).  Pub. L. 98–21, §\u202f323(a)(1) , substituted “a citizen or resident of the United States” for “a citizen of the United States” in text preceding par. (1).\nPub. L. 98–21, §\u202f322(a)(2) , added cl. (C) in text preceding par. (1).\nSubsec. (b)(5).  Pub. L. 98–21, §\u202f101(b)(1) , amended par. (5) generally. Prior to amendment par. (5) read as follows: “Service performed in the employ of any instrumentality of the United States, if such instrumentality is exempt from the tax imposed by section 3111 by virtue of any provision of law which specifically refers to such section (or the corresponding section of prior law) in granting such exemption;”.\nSubsec. (b)(6).  Pub. L. 98–21, §\u202f101(b)(1) , amended par. (6) generally. Prior to amendment par. (6) read as follows:\n“(A) service performed in the employ of the United States or in the employ of any instrumentality of the United States, if such service is covered by a retirement system established by a law of the United States;\n“(B) service performed, by an individual in the employ of an instrumentality of the United States if such an instrumentality was exempt from the tax imposed by section 1410 of the Internal Revenue Code of 1939 on  December 31, 1950 , and if such service is covered by a retirement system established by such instrumentality; except that the provisions of this subparagraph shall not be applicable to—\n“(i) service performed in the employ of a corporation which is wholly owned by the United States;\n“(ii) service performed in the employ of a Federal land bank, a Federal intermediate credit bank, a bank for cooperatives, a Federal land bank association, a production credit association, a Federal Reserve Bank, a Federal Home Loan Bank, or a Federal Credit Union;\n“(iii) service performed in the employ of a State, county, or community committee under the Commodity Stabilization Service;\n“(iv) service performed by a civilian employee, not compensated from funds appropriated by the Congress, in the Army and Air Force Exchange Service, Army and Air Force Motion Picture Service, Navy Exchanges, Marine Corps Exchanges, or other activities, conducted by an instrumentality of the United States subject to the jurisdiction of the Secretary of Defense, at installations of the Department of Defense for the comfort, pleasure, contentment, and mental and physical improvement of personnel of such Department; or\n“(v) service performed by a civilian employee, not compensated from funds appropriated by the Congress, in the Coast Guard Exchanges or other activities, conducted by an instrumentality of the United States subject to the jurisdiction of the Secretary of Transportation, at installations of the Coast Guard for the comfort, pleasure, contentment, and mental and physical improvement of personnel of the Coast Guard;\n“(C) service performed in the employ of the United States or in the employ of any instrumentality of the United States, if such service is performed—\n“(i) as the President or Vice President of the United States or as a Member, Delegate, or Resident Commissioner of or to the Congress;\n“(ii) in the legislative branch;\n“(iii) in a penal institution of the United States by an inmate thereof;\n“(iv) by any individual as an employee included under  section 5351(2) of title 5 , United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the Federal Government), other than as a medical or dental intern or a medical or dental resident in training;\n“(v) by any individual as an employee serving on a temporary basis in case of fire, storm, earthquake, flood, or other similar emergency; or\n“(vi) by any individual to whom subchapter III of chapter 83 of title 5, United States Code, does not apply because such individual is subject to another retirement system (other than the retirement system of the Tennessee Valley Authority);”.\nSubsec. (b)(8).  Pub. L. 98–21, §\u202f102(b)(1) , struck out the subpar. (A) designation preceding “service performed”, struck out subpar. (B) which related to service performed by employees of nonprofit organizations, and in par. (8), as so designated substituted “except that this paragraph shall not apply” for “except that this subparagraph shall not apply”.\nSubsec. (i)(5).  Pub. L. 98–21, §\u202f101(c)(2) , added par. (5).\nSubsec. (k).  Pub. L. 98–21, §\u202f102(b)(2) , struck out subsec. (k) which related to exemption of religious, charitable and certain other organizations.\nSubsec. ( l ).  Pub. L. 98–21, §\u202f321(a)(1) , substituted “Agreements entered into by American employers with respect to foreign affiliates” for “Agreements entered into by domestic corporations with respect to foreign subsidiaries” in heading.\nSubsec. ( l )(1).  Pub. L. 98–21, §\u202f321(a)(1) , substituted “affiliates” for “subsidiaries” in par. (1) heading, and in first sentence of provisions preceding subpar. (A), substituted “at the American employer’s request” for “at the request of any domestic corporation”, “any American employer (as defined in subsection (h)) who” for “any such corporation which”, “such manner and form” for “such form and manner”, and “affiliates” for “subsidiaries” after “such employer’s foreign”, and inserted “or residents” after “citizens”.\nPub. L. 98–21, §\u202f321(e)(1) , substituted “American employer” for “domestic corporation”, “affiliate” for “subsidiary” and “citizens or residents” for “citizens” wherever appearing in second and third sentences of provisions preceding subpar. (A) and substituted “American employer” for “domestic corporation” in subpars. (A) and (B).\nSubsec. ( l )(2) to (5).  Pub. L. 98–21, §\u202f321(e)(1) , substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, “affiliate” for “subsidiary”, “affiliates” for “subsidiaries”, “foreign entity” for “foreign corporation”, “foreign entities” for “foreign corporations”, and “citizens or residents” for “citizens”.\nSubsec. ( l )(8).  Pub. L. 98–21, §\u202f321(a)(2) , amended par. (8) generally, substituting provision defining a foreign affiliate for provision defining a foreign subsidiary of a domestic corporation which, for the purposes of this subsection and section 210(a) of the Social Security Act, had been defined as a foreign corporation not less than 20 percent of the voting stock of which was owned by such domestic corporation, or a foreign corporation more than 50 percent of the voting stock of which was owned by the foreign corporation described above.\nSubsec. ( l )(9), (10).  Pub. L. 98–21, §\u202f321(e)(1) , substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, and “foreign entities” for “foreign corporations”.\nSubsec. (r)(3)(A).  Pub. L. 98–21, §\u202f102(b)(3)(A) , substituted “subsection (b)(8)” and “section 210(a)(8)” for “subsection (b)(8)(A)” and “section 210(a)(8)(A)”, respectively, in provisions preceding cl. (i).\nSubsec. (r)(4).  Pub. L. 98–21, §\u202f102(b)(3)(B) , struck out par. (4) which related to coordination with coverage of lay employees.\nSubsec. (u)(1).  Pub. L. 98–21, §\u202f101(b)(2) , substituted “sections 3101(b) and 3111(b), subsection (b) shall be applied without regard to paragraph (5) thereof” for “sections 3101(b) and 3111(b)—\n“(A) paragraph (6) of subsection (b) shall be applied without regard to subparagraphs (A), (B), and (C)(i), (ii), and (vi) thereof, and\n“(B) paragraph (5) of subsection (b) (and the provisions of law referred to therein) shall not apply”.\nSubsec. (v).  Pub. L. 98–21, §\u202f324(a)(1) , added subsec. (v).\n1982—Subsec. (u).  Pub. L. 97–248  added subsec. (u).\n1981—Subsec. (a).  Pub. L. 97–123  inserted “(but, in the case of payments made to an employee or any of his dependents this subparagraph shall exclude from the term ‘wages’ only payments which are received under a workmen’s compensation law)” after “sickness or accident disability” in par. (2)(B), and inserted, after par. (18), the following provision: “Except as otherwise provided in regulations prescribed by the Secretary, any third party which makes a payment included in wages solely by reason of the parenthetical matter contained in subparagraph (B) of paragraph (2) shall be treated for purposes of this chapter and chapter 22 as the employer with respect to such wages.”\nSubsec. (a)(18).  Pub. L. 97–34  substituted “section 127 or 129” for “section 127”.\n1980—Subsec. (a)(5)(D).  Pub. L. 96–222  added subpar. (D).\nSubsec. (a)(6).  Pub. L. 96–499  struck out “(or the corresponding section of prior law)” after “section 3101” in subpar. (A) and inserted “with respect to remuneration paid to an employee for domestic service in a private home of the employer or for agricultural labor” after subpar. (B).\n1978—Subsec. (a)(17).  Pub. L. 95–472  added par. (17).\nSubsec. (a)(18).  Pub. L. 95–600  added par. (18).\n1977—Subsec. (a)(7)(C), (10).  Pub. L. 95–216, §\u202f356(a) , substituted “year” for “quarter” and “$100” for “$50”, wherever appearing.\nSubsec. (a)(16).  Pub. L. 95–216, §\u202f356(b) , added par. (16).\nSubsec. (b)(10).  Pub. L. 95–216, §\u202f356(c) , struck out subpar. (A) which related to service performed in any calendar quarter in the employ of any organization exempt from income tax under section 501(a) (other than an organization described in section 401(a) or under section 521, if the remuneration for such service was less than $50, struck out the designation “(B)” preceding the remainder of par. (10), and redesignated former cls. (i) and (ii) of former subpar. (B) as subpars. (A) and (B).\nSubsecs. (b)(17)(A), (g)(4)(B).  Pub. L. 95–216, §\u202f356(d) , substituted “year” for “quarter”.\nSubsec. (k)(4)(A).  Pub. L. 95–216, §\u202f312(b)(2) , (f), substituted “(or, if later, as of the earliest date on which it satisfies clause (ii) of this subparagraph)” for “or any subsequent date” in cl. (i) and, in provisions following cl. (ii), inserted “(subject to subparagraph (C))” after “effective”.\nSubsec. (k)(4)(B)(ii).  Pub. L. 95–216, §\u202f312(b)(4) , substituted “first day of the calendar quarter” for “date”.\nSubsec. (k)(4)(B)(iii).  Pub. L. 95–216, §\u202f312(g) , added cl. (iii).\nSubsec. (k)(4)(C).  Pub. L. 95–216, §\u202f312(b)(1) , added subpar. (C).\nSubsec. (k)(5).  Pub. L. 95–216, §\u202f312(a)(1) , substituted “prior to  April 1, 1978 ,” for “prior to the expiration of 180 days after the date of the enactment of this paragraph,” in subpar. (B), and, in provisions following subpar. (B), substituted “ April 1, 1978 ” for “the 181st day after the date of enactment of this paragraph” and substituted “ April 1, 1978 ,” for “such 181st day”.\nSubsec. (k)(6).  Pub. L. 95–216, §\u202f312(b)(3) , inserted “(except as provided in paragraph (4)(C))” after “services involved” in introductory provisions.\nSubsec. (k)(7).  Pub. L. 95–216, §\u202f312(a)(2) , substituted “prior to  April 1, 1978 ,” for “prior to the expiration of 180 days after the date of the enactment of this paragraph”, “ April 1, 1978 ,” for “the 181st day after such date,” and “prior to that date” for “prior to the first day of the calendar quarter in which such 181st day occurs”.\nSubsec. (k)(8).  Pub. L. 95–216, §\u202f312(a)(3) , (d), amended par. (8) first by substituting “prior to  April 1, 1978 ,” for “by the end of the 180-day period following the date of the enactment of this paragraph”, “prior to  April 1, 1978 ” for “within that period”, and “on that date” for “on the 181st day following that date”, and then further amending par. (8) as so amended by dividing the existing provisions into introductory provisions, subpar. (B), and closing provisions, inserting subpars. (A) and (C), substituting “by  March 31, 1978 ” for “prior to  April 1, 1978 ”, “by that date” for “prior to  April 1, 1978 ”, and “on  April 1, 1978 ” for “on that date” in subpar. (B) as so redesignated, and, in closing provisions, inserting “,\u2000or with respect to service constituting employment by reason of such request,” after “in which the date of such filing or constructive filing occurs”.\nSubsec. (s).  Pub. L. 95–216, §\u202f314(a) , added subsec. (s).\nSubsec. (t).  Pub. L. 95–216, §\u202f315(a) , added subsec. (t).\n1976—Subsec. (b).  Pub. L. 94–455, §\u202f1903(a)(3)(A) , substituted “,\u2000of whatever nature, performed” for “performed after 1936 and prior to 1955 which was employment for purposes of subchapter A of chapter 9 of the Internal Revenue Code of 1939 under the law applicable to the period in which such service was performed, and any service, of whatever nature, performed after 1954” in introductory text.\nSubsec. (b)(1).  Pub. L. 94–455, §\u202f1903(a)(3)(B) , struck out “ 65 Stat. 119 ;” before “ 7 U.S.C. 1461–146 8”.\nSubsec. (b)(6)(B)(v).  Pub. L. 94–455, §\u202f1903(a)(3)(C) , substituted “Secretary of Transportation” for “Secretary of the Treasury”.\nSubsec. (b)(8)(B).  Pub. L. 94–563, §\u202f1(b) , inserted “or deemed to have been so filed under paragraph (4) or (5) of such subsection” after “filed pursuant to subsection (k) (or the corresponding subsection of prior law)” in provisions preceding cl. (i), inserted “(or deemed to have been filed)” after “filed” in cls. (i), (ii), and (iii), and substituted “is (or is deemed to be) in effect” for “is in effect” in provisions following cl. (iii).\nSubsec. (b)(12)(B).  Pub. L. 94–455, §\u202f1906(b)(13)(C) , substituted “to the Secretary of the Treasury” for “to the Secretary”.\nSubsec. (b)(20).  Pub. L. 94–455, §\u202f1207(e)(1)(A) , added par. (20).\nSubsec. (g)(3).  Pub. L. 94–455, §\u202f1903(a)(3)(D) , struck out “ 46 Stat. 1550 , §\u202f3;” before “ 12 U.S.C. 1141j ”.\nSubsec. (k)(1).  Pub. L. 94–455, §\u202f1903(a)(3)(E) , redesignated subpar. (G) as (F). Former subpars. (F) and (H), which related to the right of an organization to request before 1960 to have a certificate effective where such certificate was filed after 1955 but prior to the enactment of this subparagraph and the right of an organization to amend a certificate filed before 1966 to make such certificate effective for an earlier date than had been originally established, respectively, were struck out.\nSubsec. (k)(2).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (k)(4) to (8).  Pub. L. 94–563, §\u202f1(c) , added pars. (4) to (8).\nPub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. ( l )(1).  Pub. L. 94–455, §\u202f1906(b)(13)(A) , struck out “or his delegate” after “Secretary”.\nSubsec. ( l )(2).  Pub. L. 94–455, §\u202f1903(a)(3)(F) , struck out “,\u2000but in no case prior to  January 1, 1955 ” after “specified in the agreement”.\nSubsec. ( l )(4) to (7), (10).  Pub. L. 94–455, §\u202f1906(b)(13)(a) , struck out “or his delegate” after “Secretary” wherever appearing.\nSubsec. (m)(1).  Pub. L. 94–455, §\u202f1903(a)(3)(G) , struck out “after December 1956” after “include service performed”.\n1973—Subsec. (a)(1).  Pub. L. 93–233, §\u202f5(b)(2) , effective with respect to remuneration paid after 1973, substituted “$13,200” for “$12,600” in two places.\nPub. L. 93–233, §\u202f5(d) , applicable only with respect to remuneration paid after 1973 (as provided in  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 ), amended section 203(b)(2)(C) of the  Pub. L. 92–336  (set out as 1973 Amendment note hereunder) substituting “$13,200” for “$12,600”.\nPub. L. 93–66, §\u202f203(b)(2) , effective with respect to remuneration paid after 1973, substituted “$12,600” for “$12,000” in two places.\nPub. L. 93–66, §\u202f203(d) , applicable only with respect to remuneration paid after, and taxable years beginning after, 1973 (as provided in  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 ), amended  section 203(b)(2)(C) of Pub. L. 92–336  (set out as 1972 Amendment note hereunder) substituting “$12,600” for “$12,000”.\n1972—Subsec. (a)(1).  Pub. L. 92–336, §\u202f203(b)(2)(A) , substituted “$10,800” for “$9,000” in two places.\nPub. L. 92–336, §\u202f203(b)(2)(B) , effective with respect to remuneration paid after 1973, substituted “$12,000” for “$10,800” in two places.\nPub. L. 92–336, §\u202f203(b)(2)(C) , effective with respect to remuneration paid after 1974, substituted “the contribution and benefit base (as determined under section 230 of the Social Security Act)” for “$12,000” in two places, and “the calendar year with respect to which such contribution and benefit base is effective” for “any calendar year”.\nSubsec. (a)(9).  Pub. L. 92–603, §\u202f104(i) , substituted uniform provision of 62 years of age, for separate provisions for men and women of 65 and 62 years, respectively.\nSubsec. (a)(14).  Pub. L. 92–603, §\u202f122(b) , added par. (14).\nSubsec. (a)(15).  Pub. L. 92–603, §\u202f138(b) , added par. (15).\nSubsec. (b)(7)(D).  Pub. L. 92–603, §\u202f128(b) , added subpar. (D).\nSubsec. (b)(8)(A).  Pub. L. 92–603, §\u202f123(a)(2) , inserted provision that this subparagraph shall not apply to service performed by a member of such religious order in the exercise of such duties if an election of coverage under subsec. (r) is in effect with respect to such order, or with respect to the autonomous subdivision thereof to which such member belongs.\nSubsec. (b)(10)(B).  Pub. L. 92–603, §\u202f129(a)(2) , inserted provisions relating to service performed in the employ of organizations described in  section 509(a)(3) of this title .\nSubsec. (i)(4).  Pub. L. 92–603, §\u202f123(c)(2) , added par. (4).\nSubsec. (r).  Pub. L. 92–603, §\u202f123(b) , added subsec. (r).\n1971—Subsec. (a)(1).  Pub. L. 92–5  substituted “$9,000” for “$7,800” in two places.\n1969—Subsec. (k)(1)(F)(i), (G)(i), (H)(i).  Pub. L. 91–172, §\u202f943(c)(1) –(3), inserted “or pay tax” after “tax return”.\n1968—Subsec. (a)(1).  Pub. L. 90–248, §\u202f108(b)(2) , substituted “$7,800” for “$6,600” wherever appearing.\nSubsec. (a)(13).  Pub. L. 90–248, §\u202f504(a) , added par. (13).\nSubsec. (b)(3)(B).  Pub. L. 90–248, §\u202f123(b) , provided for inclusion of family employment in a private home in definition of “employment,” upon compliance with conditions described in cls. (i) to (iii).\nSubsec. (b)(6)(C)(iv).  Pub. L. 90–248, §\u202f403(i)(1) , substituted “ section 5351(2) of title 5 , United States Code” for “ section 2 of the Act of August 4, 1967 ” and struck out “;\u20005 U.S.C., sec. 1052” at end of parenthetical text.\nSubsec. (b)(6)(C)(vi).  Pub. L. 90–248, §\u202f403(i)(2) , substituted “subchapter III of chapter 83 of title 5, United States Code,” for “the Civil Service Retirement Act”.\nSubsec. (b)(7)(C)(ii).  Pub. L. 90–248, §\u202f403(i)(3) , substituted “ section 5351(2) of title 5 , United States Code” for “ section 2 of the Act of August 4, 1947 ” and struck out “;\u2000 5 U.S.C. 1052 ” at end of parenthetical text.\n1965—Subsec. (a)(1).  Pub. L. 89–97, §\u202f320(b)(2) , substituted “$6,600” for “$4,800” wherever appearing.\nSubsec. (a)(12).  Pub. L. 89–97, §\u202f313(c)(3) , added par. (12).\nSubsec. (b)(6)(C)(iv).  Pub. L. 89–97, §\u202f311(b)(4) , inserted “,\u2000other than as a medical or dental intern or a medical or dental resident in training”.\nSubsec. (b)(7)(C).  Pub. L. 89–97, §\u202f317(b)(3) , added subpar. (C).\nSubsec. (b)(13).  Pub. L. 89–97, §\u202f311(b)(5) , struck out from the definition of employment the exclusion of service performed as an intern in the employ of a hospital by an individual who has completed a 4 years’ course in a medical school chartered or approved pursuant to State law.\nSubsec. (k)(1)(B)(iii).  Pub. L. 89–97, §\u202f316(a)(1) , substituted “such date may not be earlier than the first day of the twentieth” for “,\u2000in the case of a certificate filed prior to  January 1, 1960 , such date may not be earlier than  January 1, 1956 , and in the case of a certificate filed after 1959, such date may not be earlier than the first day of the fourth”.\nSubsec. (k)(1)(H).  Pub. L. 89–97, §\u202f316(b) , added subpar. (H).\nSubsec. (q).  Pub. L. 89–97, §\u202f313(c)(4) , added subsec. (q).\n1964—Subsec. (a)(11).  Pub. L. 88–650  added par. (11).\nPub. L. 88–272  substituted “is a plan described in section 403(a), or” for “meets the requirements of section 401(a)(3), (4), (5), and (6)” in subpar. (5)(B), and added subpar. (5)(C).\n1961—Subsec. (b)(19).  Pub. L. 87–256  added par. (19).\nSubsec. (i)(3).  Pub. L. 87–293, §\u202f202(a)(1) , added par. (3).\nSubsec. (p).  Pub. L. 87–293, §\u202f202(a)(2) , added subsec. (p).\n1960—Subsec. (b)(3).  Pub. L. 86–778, §\u202f104(b) , designated existing provisions as cl. (A) and struck out provisions which related to service performed by an individual in the employ of his son or daughter, and added cl. (B).\nSubsec. (b)(7).  Pub. L. 86–778, §\u202f103(n) , excluded service in the employ of the Government of Guam or the Government of American Samoa or any political subdivision thereof, or of any instrumentality of any one or more of the foregoing which is wholly owned thereby.\nSubsec. (b)(18).  Pub. L. 86–778, §\u202f103 ( o ), added par. (18).\nSubsec. (e).  Pub. L. 86–778, §\u202f103(p) , struck out a reference to Hawaii in cl. (1), and included Guam and American Samoa and cls. (1) and (2).\nPub. L. 86–624  struck out “Hawaii,” before “the District of Columbia”, in cl. (1).\nSubsec. (k)(1)(A).  Pub. L. 86–778, §\u202f105(a)(1) , (2), struck out “and that at least two-thirds of its employees concur in the filing of the certificate” after “extended to service performed by its employees”, and substituted “of each employee (if any) who concurs” for “of each employee who concurs”.\nSubsec. (k)(1)(E).  Pub. L. 86–778, §\u202f105(a)(3) , substituted “in either group, or may file a separate certificate pursuant to such subparagraph with respect to the employees in each group” for “in one of the groups if at least two-thirds of the employees in such group concur in the filing of the certificate. The organization may also file such a certificate with respect to the employees in the other group if at least two-thirds of the employees in such other group concur in the filing of such certificate.”\n1959—Subsec. (b)(6)(B)(ii).  Pub. L. 86–168  substituted “Federal land bank association” for “national farm loan association”, and included service in the employ of Federal land banks, Federal intermediate credit banks and banks for cooperatives.\nSubsec. (e).  Pub. L. 86–70  struck out “Alaska,” before “Hawaii”.\n1958—Subsec. (a)(1).  Pub. L. 85–840, §\u202f402(b) , substituted “$4,800” for “$4,200” wherever appearing.\nSubsec. (b)(1).  Pub. L. 85–840, §\u202f404(a) , struck out provisions which excluded from definition of “employment” service performed in connection with the production or harvesting of any commodity defined as an agricultural commodity in  section 1141j of title 12 .\nSubsec. (b)(8)(B).  Pub. L. 85–840, §\u202f405(b) , made subparagraph inapplicable to service performed during the period for which a certificate is in effect if such service is performed by an employee who, after the calendar quarter in which the certificate was filed with respect to a group described in  section 321(k)(1)(E) of this title , became a member of such group, and made subparagraph applicable with respect to service performed by an employee as a member of a group described in  section 3121(k)(1)(E) of this title  with respect to which no certificate is in effect.\nSubsec. (k)(1).  Pub. L. 85–840, §\u202f405(a) , permitted amendment of the list at any time prior to the expiration of the twenty-fourth month following the calendar quarter in which the certificate is filed, allowed an organization to provide that the certificate shall be in effect for the period beginning with the first day of any calendar quarter preceding the calendar quarter in which the certificate is filed, except that, in the case of a certificate filed prior to  Jan. 1, 1960 , such date may not be earlier than  Jan. 1, 1956 , and in the case of a certificate filed after 1959, such date may not be earlier than the first day of the fourth calendar quarter preceding the quarter in which such certificate is first made the certificate effective in the case of services performed by an employee whose name appears on a supplemental list only with respect to service performed by the employee for the period beginning with the first day of the calendar quarter in which the supplemental list is filed, required organizations described in subpar. (A) which employ both individuals who are in positions covered by a pension, annuity, retirement, or similar fund or system established by a State or political subdivision thereof and individuals who are not in such positions, to divide their employees into two separate groups, authorized the filing of requests by organizations which filed certificates after 1955 but prior to  Aug. 28, 1958 , to have such certificates effective, with respect to services of certain individuals, for the period beginning with the first day of any calendar quarter preceding the first calendar quarter for which they are effective and following the last calendar quarter of 1955, and provided for the due date and payment of tax for certain calendar quarters and for the expiration of the statutory period of assessment.\nSubsec. ( l )(3).  Pub. L. 85–866  substituted “by” for “be” in heading.\n1956—Subsec. (a)(8)(B).  Act Aug. 1, 1956, ch. 836, §\u202f201(h)(1) , included within definition of wages cash remuneration of $150 or more, and cash remuneration computed on a time basis where the employee performs agricultural labor for the employer on 20 days or more during the calendar year.\nSubsec. (a)(9).  Act Aug. 1, 1956, ch. 836, §\u202f201(b) , excluded payments made to a woman after she attains the age of 62.\nSubsec. (b)(1)(B).  Act Aug. 1, 1956, ch. 836, §\u202f201(c) , excepted from term “employment” services performed by foreign agricultural workers lawfully admitted from any foreign country or possession thereof, on a temporary basis to perform agricultural labor.\nSubsec. (b)(6)(B)(ii).  Act Aug. 1, 1956, ch. 836, §\u202f201(d)(1) , included service performed in the employ of a Federal Home Loan Bank.\nSubsec. (b)(6)(C)(vi).  Act Aug. 1, 1956, ch. 836, §\u202f201(d)(2) , substituted “Civil Service Retirement Act” for “Civil Service Retirement Act of 1930”, and inserted “(other than the retirement system of the Tennessee Valley Authority)” after “retirement system”.\nSubsec. (b)(16), (17).  Act Aug. 1, 1956, ch. 836 , §§\u202f201(e)(1), 121d, added pars. (16) and (17).\nSubsec. (i).  Act Aug. 1, 1956, ch. 837, §\u202f410 , designated existing provisions as par. (1) and added par. (2).\nSubsec. (k)(1).  Act Aug. 1, 1956, ch. 836, §\u202f201(k) , ( l ), inserted “or at any time prior to  January 1, 1959 , whichever is the later” after “the certificate is in effect”, and substituted “the first day of the calendar quarter in which such certificate is filed or the first day of the succeeding calendar quarter, as may be specified in the certificate,” for “the first day following the close of the calendar quarter in which such certificate is filed,”.\nSubsec. ( l )(6).  Act Aug. 1, 1956, ch. 836, §\u202f103(j) , inserted reference to the Federal Disability Insurance Trust Fund.\nSubsec. ( l )(8)(A).  Act Aug. 1, 1956, ch. 836, §\u202f201(j) , substituted “not less than 20 percent” for “more than 50 percent”.\nSubsecs. (m), (n).  Act Aug. 1, 1956, ch. 837, §\u202f411(a) , added subsecs. (m) and (n).\nSubsec. ( o ).  Act Aug. 1, 1956, ch. 836, §\u202f201(h)(2) , added subsec. ( o ).\n1954—Subsec. (a)(1). Act  Sept. 1, 1954 , §\u202f204(a), substituted “$4,200” for “$3,600” wherever appearing.\nSubsec. (a)(7)(B). Act  Sept. 1, 1954 , §\u202f204(b)(1), made coverage of domestic service dependent solely on receipt of $50 in cash wages in a calendar quarter by an employee from an employer for such service.\nSubsec. (a)(7)(C). Act  Sept. 1, 1954 , §\u202f204(b)(2), added subpar. (C).\nSubsec. (a)(8). Act  Sept. 1, 1954 , §\u202f204(b)(3), designated existing provisions as subpar. (A) and added subpar. (B).\nSubsec. (b)(1). Act  Sept. 1, 1954 , §\u202f205(a), made coverage of agricultural labor depend solely on the payment of cash remuneration of $100 or more per year, thereby eliminating the need for an agricultural laborer to have served a qualifying calendar quarter and to have worked on a full time basis for 60 days during a succeeding calendar quarter and to have received $50 or more for his labor during such succeeding calendar quarter, removed the specific exception from employment of services performed in connection with the ginning of cotton, and added an exception for services performed by West Indian agricultural workers lawfully admitted to the United States on a temporary basis.\nSubsec. (b)(3). Act  Sept. 1, 1954 , §\u202f205(b), struck out par. (3) and redesignated pars. (4) to (14) as (3) to (13), respectively.\nSubsec. (b)(4). Act  Sept. 1, 1954 , §\u202f205(c), amended par. (4), as redesignated, to make the exception with respect to services on non-American vessels or aircraft applicable only if the individual is not a United States citizen or the employer is not an American employer.\nSubsec. (b)(6)(B). Act  Sept. 1, 1954 , §\u202f205(d)(1)(A), amended par. (6), as redesignated, by inserting in subpar. (B) “by an individual” after “service is performed” and “and if such service is covered by a retirement system established by such instrumentality” after “ December 31, 1950 ”.\nSubsec. (b)(6)(B)(v). Act  Sept. 1, 1954 , §\u202f205(d)(1)(B), amended par. (6), as redesignated, by adding cl. (v) to subpar. (B).\nSubsec. (b)(6)(C). Act  Sept. 1, 1954 , §\u202f205(d)(2), struck out exception from coverage for services in the following categories: temporary employees in the Post Office Department field service; temporary census taking employees of the Bureau of the Census; Federal employees paid on a contract or fee basis; Federal employees receiving compensation of $12 a year or less; certain consular agents; individuals employed under Federal unemployment relief programs; and members of State, county, or community committees under the Commodity Stabilization Service and similar bodies, unless such bodies are composed exclusively of full-time Federal employees, and limited the exclusion of inmates or patients of United States institutions to inmates of penal institutions.\nSubsec. (b)(14) to (17). Act  Sept. 1, 1954 , §\u202f205(e), struck out par. (15) and redesignated pars. (16) and (17) as (14) and (15), respectively.\nSubsec. (c). Act  Sept. 1, 1954 , §\u202f205(b), substituted “subsection (b)(9)” for “subsection (b)(10)”.\nSubsec. (d)(3)(C). Act  Sept. 1, 1954 , §\u202f206(a), struck out requirement that performance of services of homeworkers be subject to State licensing requirements.\nSubsec. (k)(1). Act  Sept. 1, 1954 , §§\u202f205(b), 207, substituted “(b)(8)(B)” for “(b)(9)(B)” and provided that the list accompanying any certificate filed by a nonprofit organization with respect to its lay employees may be amended only within a period of two years after the certificate takes effect and provided that a supplemental list filed after the first month following the first calendar quarter for which the certificate is in effect shall be in effect only as to those services performed by an individual on the list which are performed by him after the calendar quarter in which the supplemental list is filed.\nSubsec. ( l ). Act  Sept. 1, 1954 , §\u202f209, added subsec. ( l ).\n“United States magistrate judge” substituted for “United States magistrate” in subsec. (b)(5)(E) pursuant to  section 321 of Pub. L. 101–650 , set out as a note under  section 631 of Title 28 , Judiciary and Judicial Procedure.\nReference to Reserve Corps of the Public Health Service deemed to be a reference to the Ready Reserve Corps, see  section 204(c)(3) of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 116–94  applicable to taxable years beginning after  Dec. 31, 2019 , see  section 301(d) of Pub. L. 116–94 , set out as a note under  section 139B of this title .\nAmendment by  Pub. L. 113–295  effective  Dec. 19, 2014 , subject to a savings provision, see  section 221(b) of Pub. L. 113–295 , set out as a note under  section 1 of this title .\nAmendment by  Pub. L. 110–458  effective as if included in the provisions of  Pub. L. 109–280  to which the amendment relates, except as otherwise provided, see  section 112 of Pub. L. 110–458 , set out as a note under  section 72 of this title .\nPub. L. 110–245, title I, §\u202f115(d) ,  June 17, 2008 ,  122 Stat. 1637 , provided that:  “The amendments made by this section [amending this section, sections 3306 and 3401 of this title, and  section 409 of Title 42 , The Public Health and Welfare] shall take effect as if included in section 5 of the Mortgage Forgiveness Debt Relief Act of 2007 [ Pub. L. 110–142 ].”\nPub. L. 110–245, title III, §\u202f302(c) ,  June 17, 2008 ,  122 Stat. 1648 , provided that:  “The amendment made by this section [amending this section and  section 410 of Title 42 , The Public Health and Welfare] shall apply to services performed in calendar months beginning more than 30 days after the date of the enactment of this Act [ June 17, 2008 ].”\nAmendment by  Pub. L. 110–172  effective as if included in the provision of the Economic Growth and Tax Relief Reconciliation Act of 2001,  Pub. L. 107–16 , to which such amendment relates, see  section 8(b) of Pub. L. 110–172 , set out as a note under  section 402 of this title .\nAmendment by  Pub. L. 108–375  applicable to travel benefits provided after  Oct. 28, 2004 , see  section 585(b)(3) of Pub. L. 108–375 , set out as a note under  section 134 of this title .\nAmendment by  section 251(a)(1)(A) of Pub. L. 108–357  applicable to stock acquired pursuant to options exercised after  Oct. 22, 2004 , see  section 251(d) of Pub. L. 108–357 , set out as a note under  section 421 of this title .\nAmendment by  section 320(b)(1) of Pub. L. 108–357  applicable to amounts received by an individual in taxable years beginning after  Dec. 31, 2003 , see  section 320(c) of Pub. L. 108–357 , set out as a note under  section 108 of this title .\nAmendment by  section 802(c)(1) of Pub. L. 108–357  effective  Mar. 4, 2003 , see  section 802(d) of Pub. L. 108–357 , set out as an Effective Date note under  section 4985 of this title .\nAmendment by  Pub. L. 108–121  applicable to taxable years beginning after  Dec. 31, 2002 , see  section 106(c) of Pub. L. 108–121 , set out as a note under  section 134 of this title .\nPub. L. 105–277, div. A, §\u202f101(h) [title VIII, §\u202f805] ,  Oct. 21, 1998 ,  112 Stat. 2681–480 , 2681–538, provided that:  “Except as otherwise specifically provided, this title [amending this section and  section 410 of Title 42 , The Public Health and Welfare, and amending provisions set out as a note under this section] and the amendments made by this title shall take effect as if included in the enactment of title XI of the Balanced Budget Act of 1997 [title XI of  Pub. L. 105–33 , see Effective Date of 1997 Amendment note below].”\nPub. L. 105–33, title XI, §\u202f11246(b)(4) , formerly §\u202f11246(b)(3),  Aug. 5, 1997 ,  111 Stat. 756 , renumbered §\u202f11246(b)(4), by  Pub. L. 105–277, div. A, §\u202f101(h) [title VIII, §\u202f802(a)(1)] ,  Oct. 21, 1998 ,  112 Stat. 2681–480 , 2681–532, provided that:  “The amendments made by this subsection [amending this section and  section 410 of Title 42 , The Public Health and Welfare] shall apply with respect to all months beginning after the date on which the Director of the Office of Personnel Management issues regulations to carry out section 11–1726, District of Columbia Code (as amended by paragraph (1)).”\nPub. L. 104–188, title I, §\u202f1116(a)(3) ,  Aug. 20, 1996 ,  110 Stat. 1762 , provided that: \n “(A)   In general .— The amendments made by this subsection [amending this section,  section 6050A of this title , and  section 410 of Title 42 , The Public Health and Welfare] shall apply to remuneration paid— “(i)  after  December 31, 1994 , and \n \n “(ii)  after  December 31, 1984 , and before  January 1, 1995 , unless the payor treated such remuneration (when paid) as being subject to tax under chapter 21 of the Internal Revenue Code of 1986. \n \n \n “(B)   Reporting requirement .— The amendment made by paragraph (1)(C) [amending  section 6050A of this title ] shall apply to remuneration paid after  December 31, 1996 .”\nAmendment by  section 1421(b)(8)(A) of Pub. L. 104–188  applicable to taxable years beginning after  Dec. 31, 1996 , see  section 1421(e) of Pub. L. 104–188 , set out as a note under  section 72 of this title .\nPub. L. 104–188, title I, §\u202f1458(c)(2) ,  Aug. 20, 1996 ,  110 Stat. 1820 , provided that:  “The amendments made by subsection (b) [amending this section and  section 409 of Title 42 , The Public Health and Welfare] shall apply to remuneration paid after  December 31, 1996 .”\nAmendment by section 2(a)(1)(A), (B) of  Pub. L. 103–387  applicable to remuneration paid after  Dec. 31, 1993 , and amendment by  section 2(a)(1)(C) of Pub. L. 103–387  applicable to services performed after  Dec. 31, 1994 , see  section 2(a)(3) of Pub. L. 103–387 , set out as a note under  section 3102 of this title .\nAmendment by  section 108(h)(2) of Pub. L. 103–296  effective  Mar. 31, 1995 , see  section 110(a) of Pub. L. 103–296 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nAmendment by section 303(a)(2), (b)(2) of  Pub. L. 103–296  applicable with respect to service performed on or after  Jan. 1, 1995 , see  section 303(e) of Pub. L. 103–296 , set out as a note under  section 410 of Title 42 .\nAmendment by section 319(a)(1), (5) of  Pub. L. 103–296  applicable with respect to service performed after calendar quarter following calendar quarter in which  Aug. 15, 1994 , occurs, see  section 319(c) of Pub. L. 103–296 , set out as a note under  section 1402 of this title .\nAmendment by  section 320(a)(1)(C) of Pub. L. 103–296  effective with calendar quarter following  Aug. 15, 1994 , see  section 320(c) of Pub. L. 103–296 , set out as a note under  section 871 of this title .\nAmendment by  Pub. L. 103–66  applicable to 1994 and later calendar years, see  section 13207(e) of Pub. L. 103–66 , set out as a note under  section 1402 of this title .\nAmendment by  Pub. L. 102–318  applicable to distributions after  Dec. 31, 1992 , see  section 521(e) of Pub. L. 102–318 , set out as a note under  section 402 of this title .\nAmendment by  section 11331(a) of Pub. L. 101–508  applicable to 1991 and later calendar years, see  section 11331(e) of Pub. L. 101–508 , set out as a note under  section 1402 of this title .\nPub. L. 101–508, title XI, §\u202f11332(d) ,  Nov. 5, 1990 ,  104 Stat. 1388–470 , provided that:  “The amendments made by this section [amending this section and sections 410 and 418 of Title 42, The Public Health and Welfare] shall apply with respect to service performed after  July 1, 1991 .”\nAmendment by  Pub. L. 101–239  applicable with respect to any agreement in effect under section 3121( l ) of this title on or after  June 15, 1989 , with respect to which no notice of termination is in effect on such date, see  section 10201(c) of Pub. L. 101–239 , set out as a note under  section 406 of this title .\nAmendment by  Pub. L. 101–140  effective as if included in  section 1151 of Pub. L. 99–514 , see  section 203(c) of Pub. L. 101–140 , set out as a note under  section 79 of this title .\nPub. L. 100–647, title I, §\u202f1011B(a)(22)(F) ,  Nov. 10, 1988 ,  102 Stat. 3486 , provided that:  “The amendments made by this paragraph [amending this section, sections 3231, 3306, and 3401 of this title, and  section 409 of Title 42 , The Public Health and Welfare] shall not apply to any individual who separated from service with the employer before  January 1, 1989 .”\nPub. L. 100–647, title I, §\u202f1018(r)(2)(B) ,  Nov. 10, 1988 ,  102 Stat. 3586 , provided that:  “The amendment made by subparagraph (A) [amending this section] shall apply to services performed after  March 31, 1986 .”\nAmendment by sections 1001(d)(2)(C)(i), (g)(4)(B)(i), 1011(e)(8), 1011B(a)(23)(A), and 1018(u)(35) of  Pub. L. 100–647  effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986,  Pub. L. 99–514 , to which such amendment relates, see  section 1019(a) of Pub. L. 100–647 , set out as a note under  section 1 of this title .\nAmendment by  section 3043(c)(2) of Pub. L. 100–647  applicable to all periods beginning before, on, or after  Nov. 10, 1988 , with no inference created as to existence or nonexistence or scope of any exemption from tax for income derived from fishing rights secured as of  Mar. 17, 1988 , by any treaty, law, or Executive Order, see  section 3044 of Pub. L. 100–647 , set out as an Effective Date note under  section 7873 of this title .\nPub. L. 100–647, title VIII, §\u202f8015(b)(3) ,  Nov. 10, 1988 ,  102 Stat. 3792 , provided that:  “The amendments made by this subsection [amending this section and  section 410 of Title 42 , The Public Health and Welfare] shall apply as if such amendments had been included or reflected in section 304 of the Federal Employees’ Retirement System Act of 1986 ( 100 Stat. 606 ) [ Pub. L. 99–335 ] at the time of its enactment [ June 6, 1986 ].”\nPub. L. 100–647, title VIII, §\u202f8015(c)(3) ,  Nov. 10, 1988 ,  102 Stat. 3792 , provided that:  “The amendments made by this subsection [amending this section and  section 410 of Title 42 ] shall apply to any individual only upon the performance by such individual of service described in subparagraph (C), (D), (E), (F), (G), or (H) of section 210(a)(5) of the Social Security Act ( 42 U.S.C. 410(a)(5) ) on or after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by section 8016(a)(3)(A), (4)(A), (C) of  Pub. L. 100–647  effective  Nov. 10, 1988 , except that any amendment to a provision of a particular Public Law which is referred to by its number, or to a provision of the Social Security Act [ 42 U.S.C. 301  et seq.], or to this title as added or amended by a provision of a particular Public Law which is so referred to, effective as though included or reflected in the relevant provisions of that Public Law at the time of its enactment, see  section 8016(b) of Pub. L. 100–647 , set out as a note under  section 3111 of this title .\nPub. L. 100–647, title VIII, §\u202f8017(c) ,  Nov. 10, 1988 ,  102 Stat. 3794 , provided that:  “The amendments made by this section [amending this section and  section 409 of Title 42 , The Public Health and Welfare] shall take effect as if included in the amendments made by section 9002 of the Omnibus Budget Reconciliation Act of 1987 [ Pub. L. 100–203 ].”\nPub. L. 100–203, title IX, §\u202f9001(d) ,  Dec. 22, 1987 ,  101 Stat. 1330–286 , provided that:  “The amendments made by this section [amending this section and sections 409, 410, and 429 of Title 42, The Public Health and Welfare] shall apply with respect to remuneration paid after  December 31, 1987 .”\nPub. L. 100–203, title IX, §\u202f9002(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–287 , provided that:  “The amendments made by this section [amending this section and  section 409 of Title 42 ] shall apply with respect to remuneration for agricultural labor paid after  December 31, 1987 .”\nPub. L. 100–203, title IX, §\u202f9003(b) ,  Dec. 22, 1987 ,  101 Stat. 1330–287 , as amended by  Pub. L. 100–647, title VIII, §\u202f8013(a) ,  Nov. 10, 1988 ,  102 Stat. 3789 , provided that:  “The amendments made by subsection (a) [amending this section and  section 409 of Title 42 ] shall apply with respect to group-term life insurance coverage in effect after  December 31, 1987 , except that such amendments shall not apply with respect to payments by the employer (or a successor of such employer) for group-term life insurance for such employer’s former employees who separated from employment with the employer on or before  December 31, 1988 , to the extent that such payments are not for coverage for any such employee for any period for which such employee is employed by such employer (or a successor of such employer) after the date of such separation.”\n[ Pub. L. 100–647, title VIII, §\u202f8013(b) ,  Nov. 10, 1988 ,  102 Stat. 3790 , provided that:  “The amendment made by subsection (a) [amending  section 9003(b) of Pub. L. 100–203 , set out above] shall apply as if such amendment had been included or reflected in section 9003(b) of the Omnibus Budget Reconciliation Act of 1987 [ Pub. L. 100–203 ] at the time of its enactment.” \n]\nPub. L. 100–203, title IX, §\u202f9004(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–288 , provided that:  “The amendments made by this section [amending this section and  section 410 of Title 42 ] shall apply with respect to to remuneration paid after  December 31, 1987 .”\nPub. L. 100–203, title IX, §\u202f9005(c) ,  Dec. 22, 1987 ,  101 Stat. 1330–288 , provided that:  “The amendments made by this section [amending this section and  section 410 of Title 42 ] shall apply with respect to to remuneration paid after  December 31, 1987 .”\nAmendment by section 9006(a), (b)(2) of  Pub. L. 100–203  applicable with respect to tips received and wages paid on or after  Jan. 1, 1988 , see  section 9006(c) of Pub. L. 100–203 , set out as a note under  section 3111 of this title .\nAmendment by  section 122(e)(1) of Pub. L. 99–514  applicable to prizes and awards granted after  Dec. 31, 1986 , see  section 151(c) of Pub. L. 99–514 , set out as a note under  section 1 of this title .\nAmendment by  section 1108(g)(7) of Pub. L. 99–514  applicable to years beginning after  Dec. 31, 1986 , see  section 1108(h) of Pub. L. 99–514 , set out as a note under  section 219 of this title .\nAmendment by  section 1151(d)(2)(A) of Pub. L. 99–514  applicable to taxable years beginning after  Dec. 31, 1983 , see  section 1151(k)(5) of Pub. L. 99–514 , set out as a note under  section 79 of this title .\nAmendment by  section 1882(c) of Pub. L. 99–514  effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984,  Pub. L. 98–369, div. A , to which such amendment relates, see  section 1881 of Pub. L. 99–514 , set out as a note under  section 48 of this title .\nPub. L. 99–514, title XVIII, §\u202f1895(b)(18)(C) ,  Oct. 22, 1986 ,  100 Stat. 2935 , provided that:  “The amendments made by this paragraph [amending this section and  section 410 of Title 42 , The Public Health and Welfare] shall apply to services performed after  March 31, 1986 .”\nAmendment by  Pub. L. 99–509 , except as otherwise provided, effective with respect to payments due with respect to wages paid after  Dec. 31, 1986 , including wages paid after such date by a State (or political subdivision thereof) that modified its agreement pursuant to  section 418(e)(2) of Title 42 , see  section 9002(d) of Pub. L. 99–509 , set out as a note under  section 418 of Title 42 .\nAmendment by  section 12112(b) of Pub. L. 99–272  effective with respect to service performed after  Dec. 31, 1983 , see  section 12112(c) of Pub. L. 99–272 , set out as a note under  section 409 of Title 42 .\nPub. L. 99–272, title XIII, §\u202f13205(d)(1) ,  Apr. 7, 1986 ,  100 Stat. 318 , provided that:  “The amendments made by subsection (a) [amending this section and sections 1402, 3122, 3125, 6205, and 6413 of this title] shall apply to services performed after  March 31, 1986 .”\nAmendment by  Pub. L. 99–221  applicable to any return to performance of service in employ of United States, or of an instrumentality thereof, after 1983, see  section 3(c) of Pub. L. 99–221 , set out as a note under  section 410 of Title 42 , The Public Health and Welfare.\nAmendment by  section 67(c) of Pub. L. 98–369  applicable to payments under agreements entered into or renewed after  June 14, 1984 , in taxable years ending after such date, with contracts entered into before  June 15, 1984 , which are amended after  June 14, 1984 , in any significant relevant aspect to be treated as a contract entered into after  June 14, 1984 , see  section 67(e) of Pub. L. 98–369 , set out as an Effective Date note under  section 280G of this title .\nAmendment by  section 491(d)(36) of Pub. L. 98–369  applicable to obligations issued after  Dec. 31, 1983 , see  section 491(f)(1) of Pub. L. 98–369 , set out as a note under  section 62 of this title .\nAmendment by  section 531(d)(1)(A) of Pub. L. 98–369  effective  Jan. 1, 1985 , see  section 531(h) of Pub. L. 98–369 , set out as an Effective Date note under  section 132 of this title .\nAmendment by  section 2601(b) of Pub. L. 98–369  effective with respect to service performed after  Dec. 31, 1983 , with enumerated exceptions, see  section 2601(f) of Pub. L. 98–369 , set out as a note under  section 410 of Title 42 , The Public Health and Welfare.\nAmendment by section 2603(a)(2), (b) of  Pub. L. 98–369  applicable to service performed after  Dec. 31, 1983 , see  section 2603(e) of Pub. L. 98–369 , set out as a note under  section 410 of Title 42 .\nPub. L. 98–369, div. B, title VI, §\u202f2661 ( o )(3),  July 18, 1984 ,  98 Stat. 1159 , provided that the amendment made by that section is effective  Jan. 1, 1984 .\nAmendment by  section 2663 of Pub. L. 98–369  effective  July 18, 1984 , but not to be construed as changing or affecting any right, liability, status or interpretation which existed (under the provisions of law involved) before that date, see  section 2664(b) of Pub. L. 98–369 , set out as a note under  section 401 of Title 42 .\nPub. L. 98–21, title I, §\u202f101(d) ,  Apr. 20, 1983 ,  97 Stat. 70 , as amended by  Pub. L. 98–369, div. B, title VI, §\u202f2662(a) ,  July 18, 1984 ,  98 Stat. 1159 , provided that:  “The amendments made by this section [amending this section and sections 409 and 410 of Title 42, The Public Health and Welfare] shall be effective with respect to service performed after  December 31, 1983 .”\nPub. L. 98–21, title I, §\u202f102(c) ,  Apr. 20, 1983 ,  97 Stat. 71 , provided that:  “The amendments made by the preceding provisions of this section [amending this section and  section 410 of Title 42 ] shall be effective with respect to service performed after  December 31, 1983  (but the provisions of sections 2 and 3 of  Public Law 94–563  [set out below] and  section 312(c) of Public Law 95–216  [set out below] shall continue in effect, to the extent applicable, as though such amendments had not been made).”\nAmendment by  section 321 of Pub. L. 98–21 , applicable to agreements entered into after  Apr. 20, 1983 , except that at the election of any American employer such amendment shall also apply to any agreement entered into on or before  Apr. 20, 1983 , see  section 321(f) of Pub. L. 98–21  set out as a note under  section 406 of this title .\nPub. L. 98–21, title III, §\u202f322(c) ,  Apr. 20, 1983 ,  97 Stat. 121 , provided that:  “The amendments made by this section [amending this section,  section 1402 of this title , and sections 410 and 411 of Title 42, The Public Health and Welfare] shall be effective for taxable years beginning on or after the date of the enactment of this Act [ Apr. 20, 1983 ].”\nPub. L. 98–21, title III, §\u202f323(c)(1) ,  Apr. 20, 1983 ,  97 Stat. 121 , provided that:  “The amendments made by subsection (a) [amending this section and  section 410 of Title 42 ] shall apply to remuneration paid after  December 31, 1983 .”\nPub. L. 98–21, title III, §\u202f324(d) ,  Apr. 20, 1983 ,  97 Stat. 125 , as amended by  Pub. L. 98–369, div. B, title VI, §\u202f2662(f)(2) ,  July 18, 1984 ,  98 Stat. 1159 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  Except as otherwise provided in this subsection, the amendments made by this section [amending this section,  section 3306 of this title , and sections 403 and 409 of Title 42 and enacting provisions set out as a note under  section 3306 of this title ] shall apply to remuneration paid after  December 31, 1983 . For purposes of applying such amendments to remuneration paid after  December 31, 1983 , which would have been taken into account before  January 1, 1984 , if such amendments had applied to periods before  January 1, 1984 , such remuneration shall be taken into account when paid (or, at the election of the payor, at the time which would be appropriate if such amendments had applied). \n \n “(2)  Except as otherwise provided in this subsection, the amendments made by subsection (b) [amending  section 3306 of this title  and enacting provisions set out as a note under  section 3306 of this title ] shall apply to remuneration paid after  December 31, 1984 . For purposes of applying such amendments to remuneration paid after  December 31, 1984 , which would have been taken into account before  January 1, 1985 , if such amendments had applied to periods before  January 1, 1985 , such remuneration shall be taken into account when paid (or, at the election of the payor, at the time which would be appropriate if such amendments had applied). \n \n “(3)  The amendments made by this section shall not apply to employer contributions made during 1984 and attributable to services performed during 1983 under a qualified cash or deferred arrangement (as defined in section 401(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) if, under the terms of such arrangement as in effect on  March 24, 1983 — “(A)  the employee makes an election with respect to such contribution before  January 1, 1984 , and \n \n “(B)  the employer identifies the amount of such contribution before  January 1, 1984 . \n \n\n In the case of the amendments made by subsection (b), the preceding sentence shall be applied by substituting ‘1985’ for ‘1984’ each place it appears and by substituting ‘during 1984’ for ‘during 1983’. \n \n “(4)  In the case of an agreement in existence on  March 24, 1983 , between a nonqualified deferred compensation plan (as defined in section 3121(v)(2)(C) of the Internal Revenue Code of 1986, as added by this section) and an individual— “(A)  the amendments made by this section (other than subsection (b)) shall apply with respect to services performed by such individual after  December 31, 1983 , and \n \n “(B)  the amendments made by subsection (b) shall apply with respect to services performed by such individual after  December 31, 1984 . \n \n\n The preceding sentence shall not apply in the case of a plan to which section 457(a) of such Code applies. For purposes of this paragraph, any plan or agreement to make payments described in paragraph (2), (3), or (13)(A)(iii) of section 3121(a) of such Code (as in effect on the day before the date of the enactment of this Act [ Apr. 20, 1983 ]) shall be treated as a nonqualified deferred compensation plan.”\nPub. L. 98–21, title III, §\u202f327(d) ,  Apr. 20, 1983 ,  97 Stat. 127 , as amended by  Pub. L. 98–369, div. B, title VI, §\u202f2662(g) ,  July 18, 1984 ,  98 Stat. 1160 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendment made by subsection (a) [amending this section and  section 409 of Title 42 ] shall apply to remuneration paid after  December 31, 1983 . \n \n “(2)  The amendments made by subsection (b) and subsection (c)(4) [amending this section,  section 3306 of this title , and  section 409 of Title 42 ] shall apply to remuneration (other than amounts excluded under section 119 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) paid after  March 4, 1983 , and to any such remuneration paid on or before such date which the employer treated as wages when paid. \n \n “(3)  The amendments made by paragraphs (1), (2), and (3) of subsection (c) [amending  section 3306 of this title ] shall apply to remuneration paid after  December 31, 1984 .”\nPub. L. 98–21, title III, §\u202f328(d) ,  Apr. 20, 1983 ,  97 Stat. 128 , provided that: \n “(1)  Except as provided in paragraph (2), the amendments made by this section [amending this section,  section 3306 of this title , and  section 409 of Title 42 ] shall apply to remuneration paid after  December 31, 1983 . \n \n “(2)  The amendments made by subsection (c) [amending  section 3306 of this title ] shall apply to remuneration paid after  December 31, 1984 .”\nPub. L. 97–248, title II, §\u202f278(c)(1) ,  Sept. 3, 1982 ,  96 Stat. 562 , provided that:  “The amendments made by subsection (a) [amending this section and sections 1402 and 3122 of this title] shall apply to remuneration paid after  December 31, 1982 .”\nPub. L. 97–123, §\u202f3(g) ,  Dec. 29, 1981 ,  95 Stat. 1663 , provided that: \n “(1)  Except as provided in paragraph (2), this section (and the amendments made by this section) [amending this section,  section 3231 of this title , and  section 409 of Title 42 , The Public Health and Welfare, and enacting provisions set out as notes under this section and  section 3101 of this title ] shall apply to remuneration paid after  December 31, 1981 . \n \n “(2)  This section (and the amendments made by this section) shall not apply with respect to any payment made by a third party to an employee pursuant to a contractual relationship of an employer with such third party entered into before  December 14, 1981 , if— “(A)  coverage by such third party for the group in which such employee falls ceases before  March 1, 1982 , and \n \n “(B)  no payment by such third party is made to such employee under such relationship after  February 28, 1982 .”\nAmendment by  Pub. L. 97–34  applicable to remuneration paid after  Dec. 31, 1981 , see  section 124(f) of Pub. L. 97–34 , set out as a note under  section 21 of this title .\nPub. L. 96–499, title XI, §\u202f1141(c) ,  Dec. 5, 1980 ,  94 Stat. 2694 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)   In general .— Except as provided in paragraph (2), the amendments made by this section [amending this section,  section 3306 of this title , and  section 409 of Title 42 , The Public Health and Welfare] shall apply with respect to remuneration paid after  December 31, 1980 . \n \n “(2)   Exception for state and local governments.— “(A)  The amendments made by this section (insofar as they affect the application of section 218 of the Social Security Act [ 42 U.S.C. 418 ]) shall not apply to any payment made before  January 1, 1984 , by any governmental unit for positions of a kind for which all or a substantial portion of the social security employee taxes were paid by such governmental unit (without deduction from the remuneration of the employee) under the practices of such governmental unit in effect on  October 1, 1980 . \n \n “(B)  For purposes of subparagraph (A), the term ‘social security employee taxes’ means the amount required to be paid under section 218 of the Social Security Act [ 42 U.S.C. 418 ] as the equivalent of the taxes imposed by section 3101 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(C)  For purposes of subparagraph (A), the term ‘Governmental unit’ means a State or political subdivision thereof within the meaning of section 218 of the Social Security Act [ 42 U.S.C. 418 ].”\nPub. L. 96–222, title I, §\u202f101(b)(1)(E) ,  Apr. 1, 1980 ,  94 Stat. 205 , provided that:  “The amendments made by subparagraph (B) of subsection (a)(10) [amending this section and  section 3306 of this title ] shall apply to payments made on or after  January 1, 1979 .”\nAmendment by  Pub. L. 95–600  applicable with respect to taxable years beginning after  Dec. 31, 1978 , see  section 164(d) of Pub. L. 95–600 , set out as an Effective Date note under  section 127 of this title .\nPub. L. 95–472, §\u202f3(d) ,  Oct. 17, 1978 ,  92 Stat. 1333 , provided that:  “The amendments made by this section [amending this section,  section 3306 of this title , and  section 409 of Title 42 , The Public Health and Welfare] shall apply with respect to taxable years beginning after  December 31, 1976 .”\nPub. L. 95–216, title III, §\u202f312(h) ,  Dec. 20, 1977 ,  91 Stat. 1535 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a), (b), (d), (e), (f), and (g) of this section [amending this section and provisions set out below] shall be effective as though they had been included as a part of the amendments made to section 3121(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] by the first section of  Public Law 94–563  (or, in the case of the amendments made by subsection (e), as a part of section 3 of such Public Law).”\nPub. L. 95–216, title III, §\u202f314(c) ,  Dec. 20, 1977 ,  91 Stat. 1536 , provided that:  “The amendments made by this section [amending this section and  section 3306 of this title ] shall apply with respect to wages paid after  December 31, 1978 .”\nAmendment by  section 315(a) of Pub. L. 95–216  applicable with respect to wages paid with respect to employment performed in months after Dec. 1977, see  section 315(c) of Pub. L. 95–216 , set out as a note under  section 3111 of this title .\nPub. L. 95–216, title III, §\u202f356(e) ,  Dec. 20, 1977 ,  91 Stat. 1556 , provided that:  “The amendments made by this section [amending this section] shall apply with respect to remuneration paid and services rendered after  December 31, 1977 .”\nPub. L. 94–563, §\u202f1(d) ,  Oct. 19, 1976 ,  90 Stat. 2658 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by this section [amending this section and  section 410 of Title 42 , The Public Health and Welfare], shall apply with respect to services performed after 1950, to the extent covered by waiver certificates filed or deemed to have been filed under section 3121(k)(4) or (5) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by such amendments).”\nPub. L. 94–455, title XII, §\u202f1207(f)(4) ,  Oct. 4, 1976 ,  90 Stat. 1708 , as amended by  Pub. L. 95–600, title VII, §\u202f701(z)(1) ,  Nov. 6, 1978 ,  92 Stat. 2921 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(A)  The amendments made by paragraphs (1)(A) and (2)(A) of subsection (e) [amending this section and  section 410 of Title 42 , The Public Health and Welfare] shall apply to services performed after  December 31, 1954 . The amendments made by paragraphs (1)(B), (1)(C), and (2)(B) of such subsection [amending sections 1401 and 3401 of this title and  section 411 of Title 42 ] shall apply to taxable years ending after  December 31, 1954 . The amendments made by paragraph (3) of such subsection [enacting section 6050A and amending  section 6652 of this title ] shall apply to calendar years beginning after the date of the enactment of this Act [ Oct. 4, 1976 ]. \n \n “(B)  Notwithstanding subparagraph (A), if the owner or operator of any boat treated a share of the boat’s catch of fish or other aquatic animal life (or a share of the proceeds therefrom) received by an individual after  December 31, 1954 , and before the date of the enactment of this act [ Oct. 4, 1976 ] for services performed by such individual after  December 31, 1954 , on such boat as being subject to the tax under chapter 21 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], then the amendments made by paragraphs (1)(A) and (B) and (2) of subsection (c) shall not apply with respect to such services performed by such individual (and the share of the catch, or the proceeds therefrom, received by him for such services).”\n[ Pub. L. 95–600, title VII, §\u202f701(z)(2) ,  Nov. 6, 1978 ,  92 Stat. 2921 , provided that:  “The amendments made by paragraph (1) [amending  section 1207(f)(4) of Pub. L. 94–455 , set out above] shall take effect on  October 4, 1976 .” \n]\nAmendment by  section 1903 of Pub. L. 94–455  applicable with respect to wages paid after  Dec. 31, 1976 , see  section 1903(d) of Pub. L. 94–455 , set out as a note under  section 3101 of this title .\nAmendment by  Pub. L. 93–233  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 93–66  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 .\nAmendment by  section 104(i) of Pub. L. 92–603  applicable only with respect to payments after 1974, see  section 104(j) of Pub. L. 92–603 , set out as a note under  section 414 of Title 42 , The Public Health and Welfare.\nAmendment by sections 122(b) and 138(b) of  Pub. L. 92–603  applicable in the case of any payment made after December 1972, see sections 122(c) and 138(c) of  Pub. L. 92–603 , set out as notes under  section 409 of Title 42 .\nAmendment by  section 128(b) of Pub. L. 92–603  applicable with respect to service performed on and after first day of calendar quarter which begins on or after  Oct. 30, 1972 , see  section 128(c) of Pub. L. 92–603 , set out as a note under  section 410 of Title 42 .\nAmendment by  section 129(a)(2) of Pub. L. 92–603  applicable to services performed after  Dec. 31, 1972 , see  section 129(b) of Pub. L. 92–603 , set out as a note under  section 410 of Title 42 .\nAmendment by  Pub. L. 92–336  applicable only with respect to remuneration paid after December 1972, see  section 203(c) of Pub. L. 92–336 , set out as a note under  section 409 of Title 42 .\nAmendment by  Pub. L. 92–5  applicable only with respect to remuneration paid after December 1971, see  section 203(c) of Pub. L. 92–5 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 91–172  applicable with respect to tax returns the date prescribed by law for filing of which is after  Dec. 31, 1969 , see  section 943(d) of Pub. L. 91–172 , set out as a note under  section 6651 of this title .\nAmendment by  section 108(b) of Pub. L. 90–248  applicable only with respect to remuneration paid after December 1967, see  section 108(c) of Pub. L. 90–248 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  section 123(b) of Pub. L. 90–248  applicable with respect to services performed after  Dec. 31, 1967 , see  section 123(c) of Pub. L. 90–248 , set out as a note under  section 410 of Title 42 .\nPub. L. 90–248, title V, §\u202f504(d) ,  Jan. 2, 1968 ,  81 Stat. 935 , provided that:  “The amendments made by this section [amending this section,  section 3306 of this title , and  section 409 of Title 42 ] shall apply with respect to remuneration paid after the date of the enactment of this Act [ Jan. 2, 1968 ].”\nAmendment by section 311(b)(4), (5) of  Pub. L. 89–97  applicable only with respect to services performed after 1965, see  section 311(c) of Pub. L. 89–97 , set out as an Effective Date of 1965 Amendment note under  section 410 of Title 42 , The Public Health and Welfare.\nAmendment by  section 313 of Pub. L. 89–97  applicable only with respect to tips received by employees after 1965, see  section 313(f) of Pub. L. 89–97 , set out as an Effective Date note under  section 6053 of this title .\nPub. L. 89–97, title III, §\u202f316(a)(2) ,  July 30, 1965 ,  79 Stat. 386 , provided that:  “The amendment made by paragraph (1) [amending this section] shall apply in the case of any certificate filed under section 3121(k)(1)(A) of such Code after the date of the enactment of this Act [ July 30, 1965 ].”\nAmendment by  section 317 of Pub. L. 89–97  applicable with respect to services performed after quarter ending  September 30, 1965 , and after quarter in which Secretary of the Treasury receives a certification from Commissioners of District of Columbia expressing their desire to have insurance system established by sections 401 et seq. and 1395c et seq. of Title 42 extended to the officers and employees coming under provisions of such amendments, see  section 317(g) of Pub. L. 89–97 , set out as a note under  section 410 of Title 42 .\nPub. L. 89–97, title III, §\u202f320(c) ,  July 30, 1965 ,  79 Stat. 394 , provided that:  “The amendments made by subsections (a)(1) and (a)(3)(A) [amending sections 409 and 413 of Title 42], and the amendments made by subsection (b) (except paragraph (1) thereof) [amending this section and sections 3122, 3125, and 6413 of this title], shall apply only with respect to remuneration paid after December 1965. The amendments made by subsections (a)(2), (a)(3)(B), and (b)(1) [amending  section 1402 of this title  and sections 411 and 413 of Title 42] shall apply only with respect to taxable years ending after 1965. The amendment made by subsection (a)(4) [amending  section 415 of Title 42 ] shall apply only with respect to calendar years after 1965.”\nPub. L. 88–650, §\u202f4(d) ,  Oct. 13, 1964 ,  78 Stat. 1078 , provided that:  “The amendments made by this section [amending this section,  section 3306 of this title , and  section 409 of Title 42 , The Public Health and Welfare] shall apply with respect to remuneration paid on or after the first day of the first calendar month which begins more than ten days after the date of the enactment of this Act [ Oct. 13, 1964 ].”\nAmendment by  Pub. L. 88–272  applicable to remuneration paid after  Dec. 31, 1962 , see  section 220(d) of Pub. L. 88–272 , set out as an Effective Date note under  section 406 of this title .\nPub. L. 87–293, title II, §\u202f202(c) ,  Sept. 22, 1961 ,  75 Stat. 627 , provided that:  “The amendments made by subsections (a) and (b) of this section [amending this section, sections 3122 and 6051 of this title, and sections 405, 409, and 410 of Title 42, The Public Health and Welfare] shall apply with respect to service performed after the date of the enactment of this Act [ Sept. 22, 1961 ]. In the case of any individual who is enrolled as a volunteer or volunteer leader under section 16(a) of this Act [ section 2515(a) of Title 22 , Foreign Relations and Intercourse] such amendments shall apply with respect to services performed on or after the effective date of such enrollment.” \n [ Section 202(c) of Pub. L. 87–293  repealed by  Pub. L. 89–572, §\u202f5(a) ,  Sept. 13, 1966 ,  80 Stat. 765 . Such repeal not deemed to affect amendments contained in such provisions, see  section 5(b) of Pub. L. 89–572 , set out as a note under former  section 2515 of Title 22 .]\nPub. L. 87–256, title I, §\u202f110(h)(3) ,  Sept. 21, 1961 ,  75 Stat. 537 , provided that:  “The amendments made by subsections (e) and (f) of this section [amending this section,  section 3306 of this title , and  section 410 of Title 42 , The Public Health and Welfare] shall apply with respect to service performed after  December 31, 1961 .”\nAmendment by  section 103(n) of Pub. L. 86–778  applicable only with respect to (1) service in the employ of the Government of Guam or any political subdivision thereof, or any instrumentality of any one or more of the foregoing wholly owned thereby, which is performed after 1960 and after the calendar quarter in which the Secretary of the Treasury receives a certification by the Governor of Guam that legislation has been enacted by the Government of Guam expressing its desire to have the insurance system established by title II of the Social Security Act ( 42 U.S.C. 401  et seq.) extended to the officers and employees of such Government and such political subdivisions and instrumentalities, and (2) service in the employ of the Government of American Samoa or any political subdivision thereof or any instrumentality of any one or more of the foregoing wholly owned thereby, which is performed after 1960 and after the calendar quarter in which the Secretary of the Treasury receives a certification by the Governor of American Samoa that the Government of American Samoa desires to have the insurance system established by title II of the Social Security Act extended to the officers and employees of such Government and such political subdivisions and instrumentalities, see  section 103(v)(1) of Pub. L. 86–778 , set out as a note under  section 402 of Title 42 , The Public Health and Welfare, and such amendment applicable only as expressly provided therein, see  section 103(v)(2) of Pub. L. 86–778 , set out as a note under  section 402 of Title 42 .\nAmendment by section 103( o ), (p) of  Pub. L. 86–778  applicable only with respect to service performed after 1960, see  section 103(v)(1) of Pub. L. 86–778 , set out as a note under  section 402 of Title 42 .\nAmendment by  section 104(b) of Pub. L. 86–778  applicable only with respect to services performed after 1960, see  section 104(c) of Pub. L. 86–778 , set out as a note under  section 410 of Title 42 .\nPub. L. 86–624, §\u202f18(k) ,  July 12, 1960 ,  74 Stat. 416 , provided that:  “The amendments contained in subsections (a) through (j) of this section [amending this section and sections 2202, 3306, 4221, 4233, 4262, 4502, 4774, 7653, and 7701 of this title] shall be effective as of  August 21, 1959 .”\nPub. L. 86–778, title I, §\u202f105(d) ,  Sept. 13, 1960 ,  74 Stat. 945 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The amendments made by subsection (a) [amending this section] shall apply only with respect to certificates filed under section 3121(k)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] after the date of the enactment of this Act [ Sept. 13, 1960 ]. \n \n “(2)  No monthly benefits under title II of the Social Security Act [ 42 U.S.C. 401  et seq.] for the month in which this Act is enacted or any prior month shall be payable or increased by reason of the provisions of subsections (b) and (c) of this section or the amendments made by such subsections [amending  section 1402 of this title  and enacting provisions set out as notes under this section and 1402 of this title], and no lump-sum death payment under such title shall be payable or increased by reason of such provisions or amendments in the case of any individual who died prior to the date of the enactment of this Act [ Sept. 13, 1960 ].”\nAmendment by  Pub. L. 86–168  effective  Jan. 1, 1960 , see  Pub. L. 86–168, title II, §\u202f203(c) ,  Aug. 18, 1959 ,  73 Stat. 390 .\nPub. L. 86–70, §\u202f22(i) ,  June 25, 1959 ,  73 Stat. 147 , provided that:  “The amendments contained in subsections (a) through (h) of this section [amending this section and sections 2202, 3306, 4221, 4233, 4262, 4502, 4774, 7621, 7653, and 7701 of this title] shall be effective as of  January 3, 1959 .”\nPub. L. 85–840, title IV, §\u202f402(e) ,  Aug. 28, 1958 ,  72 Stat. 1043 , provided that:  “The amendments made by subsections (b) and (c) [amending this section and  section 3122 of this title ] shall be applicable only with respect to remuneration paid after 1958.”\nPub. L. 85–840, title IV, §\u202f404(b) ,  Aug. 28, 1958 ,  72 Stat. 1044 , provided that:  “The amendment made by subsection (a) [amending this section] shall apply with respect to service performed after 1958.”\nPub. L. 85–840, title IV, §\u202f405(c) ,  Aug. 28, 1958 ,  72 Stat. 1047 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall apply with respect to certificates filed under section 3121(k)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] after the date of enactment of this Act [ Aug. 28, 1958 ] and requests filed under subparagraph (F) of such section after such date.”\nAct Aug. 1, 1956, ch. 836, title II, §\u202f201(m) ,  70 Stat. 843 , as amended by act  Oct. 22, 1986 ,  Pub. L. 99–514, §\u202f2 ,  100 Stat. 2095 , provided that: \n “(1)  The amendments made by subsection (a) [enacting  section 3113 of this title ] and paragraph (1) of subsection (h) [amending this section] shall apply with respect to remuneration paid after 1956. The amendment made by subsection (b) [amending this section] shall apply with respect to remuneration paid after October 1956. The amendments made by subsection (c) and paragraph (2) of subsection (h) [amending this section] shall apply with respect to service performed after 1956. The amendments made by paragraphs (1) and (2) of subsection (d) [amending this section] shall apply with respect to service with respect to which the amendments made by paragraphs (1) and (2) of subsection (b) of section 104 of this Act [amending  section 410 of Title 42 , The Public Health and Welfare] apply. The amendments made by paragraph (1) of subsection (e) [amending this section] shall apply with respect to service performed after 1954. The amendment made by paragraph (3) of such subsection shall [amending  section 1402 of this title ] apply with respect to taxable years ending after 1954. The amendments made by paragraph (2) of subsection (e) and by subsection (f) [amending  section 1402 of this title ] shall apply with respect to taxable years ending after 1955. The amendment made by subsection (i) [amending  section 1402 of this title ] shall apply with respect to taxable years ending on or after  December 31, 1956 . The amendment made by subsection ( l ) [amending this section] shall apply with respect to certificates filed after 1956 under section 3121(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. \n \n “(2) (A)  Except as provided in subparagraph (B), the amendment made by subsection (g) [amending  section 1402 of this title ] shall apply only with respect to taxable years ending after 1956. \n \n “(B)  Any individual who, for a taxable year ending after 1954 and prior to 1957, had income which by reason of the amendment made by subsection (g) would have been included within the meaning of ‘net earnings from self-employment’ (as such term is defined in section 1402(a) of the Internal Revenue Code of 1986), if such income had been derived in a taxable year ending after 1956 by an individual who had filed a waiver certificate under section 1402(e) of such Code, may elect to have the amendment made by subsection (g) apply to his taxable years ending after 1954 and prior to 1957. No election made by any individual under this subparagraph shall be valid unless such individual has filed a waiver certificate under section 1402(e) of such Code prior to the making of such election or files a waiver certificate at the time he makes such election. \n \n “(C)  Any individual described in subparagraph (B) who has filed a waiver certificate under section 1402(e) of such Code prior to the date of enactment of this Act [ Aug. 1, 1956 ], or who files a waiver certificate under such section on or before the due date of his return (including any extension thereof) for his last taxable year ending prior to 1957, must make such election on or before the due date of his return (including any extension thereof) for his last taxable year ending prior to 1957, or before  April 16, 1957 , whichever is the later. \n \n “(D)  Any individual described in subparagraph (B) who has not filed a waiver certificate under section 1402(e) of such Code on or before the due date of his return (including any extension thereof) for his last taxable year ending prior to 1957 must make such election on or before the due date of his return (including any extension thereof) for his first taxable year ending after 1956. Any individual described in this subparagraph whose period for filing a waiver certificate under section 1402(e) of such Code has expired at the time he makes such election may, notwithstanding the provisions of paragraph (2) of such section, file a waiver certificate at the time he makes such election. \n \n “(E)  An election under subparagraph (B) shall be made in such manner as the Secretary of the Treasury or his delegate shall prescribe by regulations. Notwithstanding the provisions of paragraph (3) of section 1402(e) of such Code, the waiver certificate filed by an individual who makes an election under subparagraph (B) (regardless of when filed) shall be effective for such individual’s first taxable year ending after 1954 in which he had income which by reason of the amendment made by subsection (g) would have been included within the meaning of ‘net earnings from self-employment’ (as such term is defined in section 1402(a) of such Code), if such income had been derived in a taxable year ending after 1956 by an individual who had filed a waiver certificate under section 1402(e) of such Code, or for the taxable year prescribed by such paragraph (3) of section 1402(e), if such taxable year is earlier, and for all succeeding taxable years. \n \n “(F)  No interest or penalty shall be assessed or collected for failure to file a return within the time prescribed by law, if such failure arises solely by reason of an election made by an individual under subparagraph (B), or for any underpayment of the tax imposed by section 1401 of such Code arising solely by reason of such election, for the period ending with the date such individual makes an election under subparagraph (B). \n \n \n “(3)  Any tax under chapter 2 of the Internal Revenue Code of 1986 [section 1401 et seq. of this title] which is due, solely by reason of the enactment of subsection (f) [amending  section 1402 of this title ], or paragraph (2) of subsection (e), of this section [amending  section 1402 of this title ], for any taxable year ending on or before the date of the enactment of this Act [ Aug. 1, 1956 ] shall be considered timely paid if payment is made in full on or before the last day of the sixth calendar month following the month in which this Act is enacted. In no event shall interest be imposed on the amount of any tax due under such chapter solely by reason of the enactment of subsection (f), or paragraph (2) of subsection (e), of this section for any period before the day after the date of enactment of this Act. \n \n “(4)  Any tax due under chapter 21 of the Internal Revenue Code of 1986 [this chapter] which is due, solely by reason of the enactment of subsection (d) [amending this section] and an effective date prescribed pursuant to paragraph (2)(B) or (2)(C) of section 104(i) [set out as a note under  section 410 of Title 42 , The Public Health and Welfare], for any calendar quarter beginning prior to the day on which the Secretary of Health, Education, and Welfare approves the plan which prescribes such effective date shall be considered timely paid if payment is made in full on or before the last day of the sixth calendar month following the month in which such plan is approved. In no event shall interest be imposed on the amount of any such tax due under such chapter for any period before the day on which the Secretary of Health, Education, and Welfare approves such plan.”\nAmendment by  act Aug. 1, 1956, ch. 837 , effective  Jan. 1, 1957 , see  act Aug. 1, 1956, ch. 837, title VI, §\u202f603(a) ,  70 Stat. 887 .\nAct Sept. 1, 1954, ch. 1206, title II, §\u202f204(c) ,  68 Stat. 1091 , provided that:  “The amendments made by subsections (a) and (b) [amending this section] shall be applicable only with respect to remuneration paid after 1954.”\nAct Sept. 1, 1954, ch. 1206, title II, §\u202f205(f) ,  68 Stat. 1092 , provided that:  “The amendments made by subsections (c), (d), and (e) [amending this section] shall be applicable only with respect to services performed after 1954. The amendments made by subsections (a) and (b) [amending this section] shall be applicable only with respect to services (whether performed after 1954 or prior to 1955) for which the remuneration is paid after 1954.”\nAct Sept. 1, 1954, ch. 1206, title II, §\u202f206(b) ,  68 Stat. 1093 , provided that:  “The amendment made by subsection (a) [amending this section] shall be applicable only with respect to services performed after 1954.”\nPub. L. 97–123, §\u202f3(d) ,  Dec. 29, 1981 ,  95 Stat. 1662 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  The regulations prescribed under the last sentence of section 3121(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and the regulations prescribed under subparagraph (D) of section 3231(e)(4) of such Code, shall provide procedures under which, if (with respect to any employee) the third party promptly— “(A)  withholds the employee portion of the taxes involved, \n \n “(B)  deposits such portion under section 6302 of such Code, and \n \n “(C)  notifies the employer of the amount of the wages or compensation involved, \n \n\n the employer (and not the third party) shall be liable for the employer portion of the taxes involved and for meeting the requirements of section 6051 of such Code (relating to receipts for employees) with respects to the wages or compensation involved. \n \n “(2)  For purposes of paragraph (1)— “(A)  the term ‘employer’ means the employer for whom services are normally rendered, \n \n “(B)  the term ‘taxes involved’ means, in the case of any employee, the taxes under chapters 21 and 22 which are payable solely by reason of the parenthetical matter contained in subparagraph (B) of section 3121(a)(2) of such Code, or solely by reason of paragraph (4) of section 3231(e) of such Code, and \n \n “(C)  the term ‘wages or compensation involved’ means, in the case of any employee, wages or compensation with respect to which taxes described in subparagraph (B) are imposed.”\nSection 202(a)(1), (2) of  Pub. L. 87–293 , cited as a credit to this section, was repealed by  Pub. L. 89–572, §\u202f5(a) ,  Sept. 13, 1966 ,  80 Stat. 765 . Such repeal not deemed to affect amendments to this section contained in such provisions, and continuation in full force and effect until modified by appropriate authority of all determinations, authorization, regulations, orders, contracts, agreements, and other actions issued, undertaken, or entered into under authority of the repealed provisions, see  section 5(b) of Pub. L. 89–572 , set out as a note under  section 2515 of Title 22 , Foreign Relations and Intercourse.\nPub. L. 115–243, §\u202f2(c) ,  Sept. 20, 2018 ,  132 Stat. 2895 , provided that:  “Nothing in this Act [see Short Title of 2018 Amendment note set out under  section 1305 of Title 42 , The Public Health and Welfare] or the amendments made by this Act shall be construed to affect application of any Federal income tax withholding requirements under the Internal Revenue Code of 1986.”\nFor transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of  November 25, 2002 , as modified, set out as a note under  section 542 of Title 6 .\nSecretary of Health, Education, and Welfare redesignated Secretary of Health and Human Services by  section 3508 of Title 20 , Education.\nThe Subversive Activities Control Board was established by  act Sept. 23, 1950, ch. 1024, §\u202f12 ,  64 Stat. 977  and ceased to operate  June 30, 1973 .\nNo inference to be drawn from amendment to subsec. (a)(18) of this section by  section 106 of Pub. L. 108–121  with respect to tax treatment of any amounts under program described in  section 134(b)(4) of this title  for any taxable year beginning before  Jan. 1, 2003 , see  section 106(d) of Pub. L. 108–121 , set out as a note under  section 134 of this title .\nPub. L. 105–34, title IX, §\u202f921 ,  Aug. 5, 1997 ,  111 Stat. 879 , provided that: \n “(a)   In General .— In determining for purposes of the Internal Revenue Code of 1986 whether a registered representative of a securities broker-dealer is an employee (as defined in section 3121(d) of the Internal Revenue Code of 1986), no weight shall be given to instructions from the service recipient which are imposed only in compliance with investor protection standards imposed by the Federal Government, any State government, or a governing body pursuant to a delegation by a Federal or State agency. \n \n “(b)   Effective Date .— Subsection (a) shall apply to services performed after  December 31, 1997 .”\nPub. L. 104–188, title I, §\u202f1802 ,  Aug. 20, 1996 ,  110 Stat. 1892 , provided that: \n “(a)   In General .— For purposes of subsection (s) of section 3121 of the Internal Revenue Code of 1986 (relating to concurrent employment by 2 or more employers)— “(1)  the following entities shall be deemed to be related corporations that concurrently employ the same individual: “(A)  a State university which employs health professionals as faculty members at a medical school, and \n \n “(B)  an agency account of a State university which is described in subparagraph (A) and from which there is distributed to such faculty members payments forming a part of the compensation that the State, or such State university, as the case may be, agrees to pay to such faculty members, but only if— “(i)  such agency account is authorized by State law and receives the funds for such payments from a faculty practice plan described in section 501(c)(3) of such Code and exempt from tax under section 501(a) of such Code, \n \n “(ii)  such payments are distributed by such agency account to such faculty members who render patient care at such medical school, and \n \n “(iii)  such faculty members comprise at least 30 percent of the membership of such faculty practice plan, and \n \n \n \n “(2)  remuneration which is disbursed by such agency account to any such faculty member of the medical school described in paragraph (1)(A) shall be deemed to have been actually disbursed by the State, or such State university, as the case may be, as a common paymaster and not to have been actually disbursed by such agency account. \n \n \n “(b)   Effective Date .— The provisions of subsection (a) shall apply to remuneration paid after  December 31, 1996 .”\nFor purposes of this chapter, the term “wages” shall not include the amount of any refund required under  section 421 of Pub. L. 100–360 ,  42 U.S.C. 1395b  note, see  section 10202 of Pub. L. 101–239 , set out as a note under  section 1395b of Title 42 , The Public Health and Welfare.\nNo monies appropriated by  Pub. L. 101–136  to be used to implement or enforce  section 1151 of Pub. L. 99–514  or the amendments made by such section, see  section 528 of Pub. L. 101–136 , set out as a note under  section 89 of this title .\nPub. L. 100–647, title VI, §\u202f6305 ,  Nov. 10, 1988 ,  102 Stat. 3756 , provided that: \n “(a)   In General .— A State may treat a person who renders dependent care or similar services as other than an employee [for] employment tax purposes for the applicable period if all of the following conditions are satisfied with respect to such person for such applicable period: “(i)  The person does not provide any dependent care or similar services in any facility owned or operated by the State. \n \n “(ii)  The person is compensated by the State for such services, directly or indirectly, out of funds provided pursuant to chapter 7 of title 42 of the United States Code [ 42 U.S.C. 301  et seq.], or the provisions and amendments made by the Family Security Act of 1988 [probably means the Family Support Act of 1988,  Pub. L. 100–485 , see Tables for classification]. \n \n “(iii)  The State does not treat the person, with respect to the provision of dependent care or similar services, as an employee for employment tax purposes. \n \n “(iv)  The State files all Federal income tax returns (including information returns) required to be filed with respect to such person on a basis consistent with the State’s treatment of such person as other than an employee beginning on the date of the enactment of this section [ Nov. 10, 1988 ]. \n \n “(v)  No more than ten percent of the State’s employees are provided with insurance under title II of the Social Security Act [ 42 U.S.C. 401  et seq.] pursuant to voluntary agreements with the Secretary of Health and Human Services under section 218 of such title [ 42 U.S.C. 418 ]. \n \n \n “(b)   State .— For purposes of this section, the term ‘State’ shall mean the government of the United States, District of Columbia, any State or political subdivision thereof, and any agency or instrumentality of any of the foregoing. \n \n “(c)   Employment Tax .— For purposes of this section, the term ‘employment tax’ means any tax imposed by subtitle C of the Internal Revenue Code of 1986. \n \n “(d)   Applicable Period .— For purposes of this section, the term ‘applicable period’ means the period beginning on  January 1, 1984  and ending on  December 31, 1990 . \n \n “(e)   Report .— The Secretary of the Treasury shall report to the Senate Committee on Finance and the House Committee on Ways and Means on the text [tax] status of day care providers compensated pursuant to the program described in the section no later than  December 31, 1989 .”\n[The due date for the report referred to in  section 6305(e) of Pub. L. 100–647 , set out above, extended to  Jan. 1, 1992 , by  Pub. L. 101–508, title XI, §\u202f11831(b) ,  Nov. 5, 1990 ,  104 Stat. 1388–559 .]\nPub. L. 100–647, title VIII, §\u202f8018 ,  Nov. 10, 1988 ,  102 Stat. 3794 , provided that:  “In the case of any State (within the meaning of section 3121(e)(1) of the Internal Revenue Code of 1986) or political subdivision thereof which received a letter ruling of the Internal Revenue Service issued after  December 31, 1983 , and before the date of the enactment of this Act [ Nov. 10, 1988 ] maintaining that any amount treated as an employer contribution under section 414(h)(2) of the Internal Revenue Code of 1986 is excluded from the definition of ‘wages’ for purposes of tax liability under section 3121(v)(1)(B) of such Code, such State or political subdivision shall be relieved of any liability for taxes under such section 3121(v)(1)(B) which, in good faith reliance on such letter ruling, were not paid and which would otherwise have been required to be paid (but for this section) on or before the earlier of the date of the enactment of this Act or the date of the receipt of a notice of revocation from the Internal Revenue Service of such letter ruling.”\nFor provisions directing that if any amendments made by subtitle D [§§\u202f1401–1465] of title I of  Pub. L. 104–188  require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after  Jan. 1, 1998 , see  section 1465 of Pub. L. 104–188 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle B [§§\u202f521–523] of title V of  Pub. L. 102–318  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1994 , see  section 523 of Pub. L. 102–318 , set out as a note under  section 401 of this title .\nFor provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§\u202f1101–1147 and 1171–1177] or title XVIII [§§\u202f1800–1899A] of  Pub. L. 99–514  require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after  Jan. 1, 1989 , see  section 1140 of Pub. L. 99–514 , as amended, set out as a note under  section 401 of this title .\nFederal employees not to be deemed subject to Federal retirement system for purposes of subsec. (b)(5)(G) of this section if employees are contributing reduced amounts by reason of Federal Employees’ Retirement Contribution Temporary Adjustment Act of 1983, see  section 2601(c) of Pub. L. 98–369 , set out as a note under  section 410 of Title 42 , The Public Health and Welfare.\nFor purposes of subsec. (b)(5) of this section as in effect in January 1983 and as in effect on and after  January 1, 1984 , service performed in the employ of a nonprofit organization described in  section 501(c)(3) of this title  by an employee who is required by law to be subject to subchapter III of chapter 83 of Title 5, Government Organization and Employees, with respect to such service, is considered to be service performed in the employ of an instrumentality of the United States, see  section 2601(e) of Pub. L. 98–369 , set out as a note under  section 410 of Title 42 , The Public Health and Welfare.\nPub. L. 98–369, div. B, title VI, §\u202f2603(f) ,  July 18, 1984 ,  98 Stat. 1130 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “In any case where a church or qualified church-controlled organization makes an election under section 3121(w) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], the Secretary of the Treasury shall refund (without interest) to such church or organization any taxes paid under sections 3101 and 3111 of such Code with respect to service performed after  December 31, 1983 , which is covered under such election. The refund shall be conditional upon the church or organization agreeing to pay to each employee (or former employee) the portion of the refund attributable to the tax imposed on such employee (or former employee) under section 3101, and such employee (or former employee) may not receive any other refund payment of such taxes.”\nPub. L. 98–118, §\u202f4 ,  Oct. 11, 1983 ,  97 Stat. 803 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Notwithstanding section 101(d) of the Social Security Amendments of 1983 [ section 101(d) of Pub. L. 98–21 , set out as an Effective Date of 1983 Amendment note above], the amendments made by section 101(c) of such Act [amending this section and  section 409 of Title 42 , The Public Health and Welfare] shall apply only with respect to remuneration paid after  December 31, 1985 . Remuneration paid prior to  January 1, 1986 , under  section 371(b) of title 28 , United States Code, to an individual performing service under section 294 of such title, shall not be included in the term “wages” for purposes of section 209 of the Social Security Act [ 42 U.S.C. 409 ] or section 3121(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].”\nPub. L. 98–21, title I, §\u202f125 ,  Apr. 20, 1983 ,  97 Stat. 91 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   General Rule .— For purposes of subsection (s) of section 3121 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to concurrent employment by 2 or more employers)— “(1)  the following entities shall be deemed to be related corporations: “(A)  a State university which employs health professionals as faculty members at a medical school, and \n \n “(B)  a faculty practice plan described in section 501(c)(3) of such Code and exempt from tax under section 501(a) of such Code— “(i)  which employs faculty members of such medical school, and \n \n “(ii)  30 percent or more of the employees of which are concurrently employed by such medical school; and \n \n \n \n “(2)  remuneration which is disbursed by such faculty practice plan to a health professional employed by both such entities shall be deemed to have been actually disbursed by such university as a common paymaster and not to have been actually disbursed by such faculty practice plan. \n \n \n “(b)   Effective Date .— The provisions of subsection (a) shall apply to remuneration paid after  December 31, 1983 .”\nPub. L. 98–21, title I, §\u202f102(d) ,  Apr. 20, 1983 ,  97 Stat. 71 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “The period for which a certificate is in effect under section 3121(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] may not be terminated under paragraph (1)(D) or (2) thereof on or after  March 31, 1983 ; but no such certificate shall be effective with respect to any service to which the amendments made by this section [amending this section and  section 410 of Title 42 , The Public Health and Welfare] apply.”\nPub. L. 97–123, §\u202f3(e) ,  Dec. 29, 1981 ,  95 Stat. 1663 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “For purposes of applying section 209 of the Social Security Act [ section 409 of Title 42 , The Public Health and Welfare], section 3121(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and section 3231(e) of such Code with respect to the parenthetical matter contained in section 209(b)(2) of the Social Security Act or section 3121(a)(2)(B) of the Internal Revenue Code of 1986, or with respect to section 3231(e)(4) of such Code (as the case may be), payments under a State temporary disability law shall be treated as remuneration for service.”\nPub. L. 96–605, title IV, §\u202f401 ,  Dec. 28, 1980 ,  94 Stat. 3531 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(a)   Waiver Certificate.— “(1)   In general .— Notwithstanding any other provision of law, any waiver certificate filed by a qualified corporation (hereinafter in this section referred to as the ‘corporation’) under section 3121(k)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to waiver of exemption from social security taxes by certain organizations) shall be deemed not to be effective, for purposes of the taxes imposed by section 3101 of such Code, with respect to any wages— “(A)  paid by the Corporation to any employee thereof after  December 31, 1972 , and before  April 1, 1975 , if the Corporation furnishes to the Secretary of the Treasury or his delegate evidence reasonably satisfactory to him that the Corporation as refunded, prior to  February 1, 1977 , to such employee (or to his survivors or estate) the full amount of the taxes imposed by section 3101 of such Code on such wages, or \n \n “(B)  paid after  March 31, 1975 , and prior to  July 1, 1977 , by the Corporation to an individual as an employee of the Corporation, if the Corporation furnishes to the Secretary of the Treasury or his delegate evidence reasonably satisfactory to him that (i) such individual was not an employee of the Corporation on  June 30, 1978 , and (ii) no amount of the taxes imposed by section 3101 of such Code on such wages were withheld by the Corporation from such wages. \n \n \n “(2)   Application of paragraph (1).— “(A)   Evidence to be submitted to secretary .— The provisions of paragraph (1) shall not apply to wages described in subparagraph (A) or (B) of such paragraph unless, prior to the close of the one-year period which begins on the date of the enactment of this Act [ Dec. 28, 1980 ], the Corporation furnishes to the Secretary of the Treasury or his delegate the evidence referred to in either such subparagraph. \n \n “(B)   Tax not imposed .— If the provisions of paragraph (1) apply with respect to any wages paid by the Corporation to an employee thereof, no taxes imposed on such wages by section 3101 of the Internal Revenue Code of 1986 shall be payable, and no interest or penalty with respect to the imposition of taxes by such section on such wages (or with respect to the imposition of taxes by such section or section 3111 of such Code on any wages paid by the Corporation prior to  January 1, 1978 ) shall be imposed or collected. \n \n “(C)   Credit against tax .— Under regulations prescribed by the Secretary, there shall be allowed as a one-time credit against the tax imposed on the Corporation under section 3101 or 3111 of the Internal Revenue Code of 1986 (and any interest or penalties imposed thereon) an amount equal to the sum of— “(i)  all amounts of tax imposed by section 3101 of such Code which have been paid by the Corporation with respect to wages to which paragraph (1) applies, and \n \n “(ii)  all amounts paid by such Corporation as a penalty or as interest with respect to the tax imposed by section 3101 or 3111 of such Code on such wages. \n \n \n \n \n “(b)   Treatment for Purposes of Social Security Act .— In the administration of titles II and XVIII of the Social Security Act [ 42 U.S.C. 401  et seq. and 1395 et seq.], any wages paid to any individual to which the provisions of subsection (a) apply shall be treated as wages (within the meaning of section 209 of such Act) [ 42 U.S.C. 409 ] for purposes of determining— “(1)  entitlement to, or amount of, any insurance benefit payable to such individual or any other person on the basis of the wages and self-employment income of such individual, or \n \n “(2)  entitlement of such individual to benefits under title XVIII of such Act [ 42 U.S.C. 1395  et seq.] or entitlement of any other person to such benefits on the basis of the wages and self-employment income of such individual. \n \n \n “(c)   Qualified Corporation Defined .— For purposes of this section, the term ‘qualified corporation’ means any corporation which— “(1)  filed a waiver certificate under section 3121 of the Internal Revenue Code of 1986 during 1968; \n \n “(2)  filed a second waiver certificate under such section during 1975 believing that no other waiver certificate had been filed; \n \n “(3)  received a refund of the taxes imposed by sections 3101 and 3111 of such Code with respect to certain wages paid to more than 120 but less than 180 employees who did not concur in the filing of the second waiver certificate; and \n \n “(4)  was notified during 1977 by the Internal Revenue Service that the certificate had been filed during 1968. \n \n \n “(d)   Liability for Taxes .— Except as provided in subsection (a)(2)(C)(ii), nothing in this section shall be construed to relieve the Corporation of any liability for the payment of the taxes imposed by section 3111 of the Internal Revenue Code of 1986 with respect to any wages paid by it to any individual for any period.”\nPub. L. 94–563, §\u202f2 ,  Oct. 19, 1976 ,  90 Stat. 2658 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  “Notwithstanding any other provision of law, no refund or credit of any tax paid under section 3101 or 3111 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] by an organization described in section 501(c)(3) of such Code which is exempt from income tax under section 501(a) of such Code shall be made on or after  September 9, 1976 , by reason of such organization’s failure to file a waiver certificate under section 3121(k)(1) of such Code (or the corresponding provision of prior law), if such organization is deemed to have filed such a certificate under section 3121(k)(4) of such Code (as added by the first section of this Act).”\nPub. L. 95–216, title III, §\u202f312(c) ,  Dec. 20, 1977 ,  91 Stat. 1533 , as amended by  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In any case where— “(1)  an individual performed service, as an employee of an organization which is deemed under section 3121(k)(4) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to have filed a waiver certificate under section 3121(k)(1) of such Code, on or after the first day of the applicable period described in subparagraph (A)(ii) of such section 3121(k)(4) and before  July 1, 1977 ; and \n \n “(2)  the service so performed does not constitute employment (as defined in section 210(a) of the Social Security Act [ 42 U.S.C. 410(a) ] and section 3121(b) of such Code) because the waiver certificate which the organization is deemed to have filed is made inapplicable to such service by section 3121(k)(4)(C) of such Code, but would constitute employment (as so defined) in the absence of such section 3121(k)(4)(C), \n \n\n the remuneration paid for such service shall, upon the request of such individual (filed on or before  April 15, 1980 , in such manner and form, and with such official, as may be prescribed by regulations made under title II of the Social Security Act [ 42 U.S.C. 401  et seq.]) accompanied by full payment of all of the taxes which would have been paid under section 3101 of such Code with respect to such remuneration but for such section 3121(k)(4)(C) (or by satisfactory evidence that appropriate arrangements have been made for the payment of such taxes in installments as provided in section 3121(k)(8) of such Code), be deemed to constitute remuneration for employment as so defined. In any case where remuneration paid by an organization to an individual is deemed under the preceding sentence to constitute remuneration for employment, such organization shall be liable (notwithstanding any other provision of such Code) for payment of the taxes which it would have been required to pay under section 3111 of such Code with respect to such remuneration in the absence of such section 3121(k)(4)(C).”\nPub. L. 94–563, §\u202f3 ,  Oct. 19, 1976 ,  90 Stat. 2658 , as amended by  Pub. L. 95–216, title III, §\u202f312(e) ,  Dec. 20, 1977 ,  91 Stat. 1535 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that:  \n “In any case where— “(1)  an individual performed service, as an employee of an organization which is deemed under section 3121(k)(5) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to have filed a waiver certificate under section 3121(k)(1) of such Code, at any time prior to the period for which such certificate is effective; \n \n “(2)  the taxes imposed by sections 3101 and 3111 of such Code were paid with respect to remuneration paid for such service, but such service (or any part thereof) does not constitute employment (as defined in section 210(a) of the Social Security Act [ 42 U.S.C. 410(a) ] and section 3121(b) of such Code because the applicable taxes so paid were refunded or credited (otherwise than through a refund or credit which would have been allowed if a valid waiver certificate filed under section 3121(k)(1) of such Code had been in effect) prior to  September 9, 1976 ; and \n \n “(3)  any portion of such service (with respect to which taxes were paid and refunded or credited as described in paragraph (2)) would constitute employment (as so defined) if the organization had actually filed under section 3121(k)(1) of such Code a valid waiver certificate effective as provided in section 3121(k)(5)(B) thereof (with such individual’s signature appearing on the accompanying list), \n \n\n the remuneration paid for the portion of such service described in paragraph (3) shall, upon the request of such individual (filed on or before  April 15, 1980 , in such manner and form, and with such official, as may be prescribed by regulations made under title II of the Social Security Act [ 42 U.S.C. 401  et seq.]) accompanied by full repayment of the taxes which were paid under section 3101 of such Code with respect to such remuneration and so refunded or credited (or by satisfactory evidence that appropriate arrangements have been made for the repayment of such taxes in installments as provided in section 3121(k)(8) of such Code), be deemed to constitute remuneration for employment as so defined. In any case where remuneration paid by an organization to an individual is deemed under the preceding sentence to constitute remuneration for employment, such organization shall be liable (notwithstanding any other provision of such Code) for repayment of any taxes which it paid under section 3111 of such Code with respect to such remuneration and which were refunded or credited to it.”\nPub. L. 86–778, title I, §\u202f105(b)(1) –(5),  Sept. 13, 1960 ,  74 Stat. 943 , 944, as amended by  Pub. L. 89–97, title III, §\u202f316(c)(1) ,  July 30, 1965 ,  79 Stat. 386 ;  Pub. L. 99–514, §\u202f2 ,  Oct. 22, 1986 ,  100 Stat. 2095 , provided that: \n “(1)  If— “(A)  an individual performed service in the employ of an organization with respect to which remuneration was paid before the first day of the calendar quarter in which the organization filed a waiver certificate pursuant to section 3121(k)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and such service is excepted from employment under section 210(a)(8)(B) of the Social Security Act [ 42 U.S.C. 410(a)(8)(B) ], \n \n “(B)  such service would have constituted employment as defined in section 210 of such Act [ 42 U.S.C. 410 ] if the requirements of section 3121(k)(1) of such Code were satisfied, \n \n “(C)  such organization paid, on or before the due date of the tax return for the calendar quarter before the calendar quarter in which the organization filed a certificate pursuant to section 3121(k)(1) of such Code, any amount, as taxes imposed by sections 3101 and 3111 of such Code with respect to such remuneration paid by the organization to the individual for such service, \n \n “(D)  such individual, or a fiduciary acting for such individual or his estate, or his survivor (within the meaning of section 205(c)(1)(C) of such Act [ 42 U.S.C. 405(c)(1)(C) ]), requests that such remuneration be deemed to constitute remuneration for employment for purposes of title II of such Act [ 42 U.S.C. 401  et seq.], and \n \n “(E)  the request is made in such form and manner, and with such official, as may be prescribed by regulations made by the Secretary of Health, Education, and Welfare, \n \n\n then, subject to the conditions stated in paragraphs (2), (3), (4), and (5), the remuneration with respect to which the amount has been paid as taxes shall be deemed to constitute remuneration for employment for purposes of title II of such Act [ 42 U.S.C. 401  et seq.]. \n \n “(2)  Paragraph (1) shall not apply with respect to an individual unless the organization referred to in paragraph (1)(A), on or before the date on which the request described in paragraph (1) is made, has filed a certificate pursuant to section 3121(k)(1) of such Code. \n \n “(3)  Paragraph (1) shall not apply with respect to an individual who is employed by the organization referred to in paragraph (2) on the date the certificate is filed. \n \n “(4)  If credit or refund of any portion of the amount referred to in paragraph (1)(C) (other than a credit or refund which would be allowed if the service constituted employment for purposes of chapter 21 of such Code) has been obtained, paragraph (1) shall not apply with respect to the individual unless the amount credited or refunded (including any interest under section 6611 of such Code) is repaid before  January 1, 1968 , or, if later, the first day of the third year after the year in which the organization filed a certificate pursuant to section 3121(k)(1) of such Code. \n \n “(5)  Paragraph (1) shall not apply to any service performed for the organization in a period for which a certificate filed pursuant to section 3121(k)(1) of such Code is not in effect.”\n[ Pub. L. 89–97, title III, §\u202f316(c)(2) ,  July 30, 1965 ,  79 Stat. 387 , provided that:  “The amendment made by paragraph (1) [amending  section 105(b) of Pub. L. 86–778 , set out above] shall take effect on the date of the enactment of this Act [ July 30, 1965 ]. The provisions of section 105(b) of the Social Security Amendments of 1960 [ section 105(b) of Pub. L. 86–778 ] which were in effect before the date of the enactment of this Act [ July 30, 1965 ] shall be applicable with respect to any request filed under section 105(b)(1) of such Amendments before such date. Nothing in the preceding sentence shall prevent the filing of a request under section 105(b)(1) of such Amendments as amended by this Act.” \n]\nPub. L. 89–97, title III, §\u202f316(d) ,  July 30, 1965 ,  79 Stat. 387 , provided that where an individual performed service for which remuneration was paid before  July 30, 1965 , by an organization which, before such date, filed a waiver certificate pursuant to subsec. (k)(1) of this section, then under certain conditions, the remuneration paid with respect to such service was to be deemed remuneration for employment for purposes of title II of the Social Security Act, sections 401 et seq, of Title 42, The Public Health and Welfare, even though normally excluded from employment under title II of the Social Security Act.\nPub. L. 86–778, title I, §\u202f105(b)(1) –(5),  Sept. 13, 1960 ,  74 Stat. 943 , 944, provided that where an individual performed service in the employ of an organization after 1950 with respect to which remuneration was paid before 1960 and such service is normally excepted from employment under title II of the Social Security Act ( 42 U.S.C. 401  et seq.), then under certain conditions, the remuneration paid with respect to such service was to be deemed remuneration for employment for purposes of title II of the Social Security Act.\nAct Sept. 1, 1954, ch. 1206, title IV, §\u202f403 ,  68 Stat. 1098 , as amended by acts  Aug. 1, 1956, ch. 836 , title IV, §\u202f401,  70 Stat. 855 ;  Aug. 27, 1958 ,  Pub. L. 85–785 , §§\u202f1–3,  72 Stat. 938 , provided that where an individual has been employed after 1950 and before  Aug. 1, 1956 , by an organization exempt from income tax under  section 501(c)(3) of this title  but which did not have in effect during the individual’s period of employment a valid waiver certificate, or, which failed to have the individual’s signature appear on the list of signatures of employees who concurred in the filing of such certificate, where one was in effect, and the service performed by the individual would have constituted employment for purposes of title II of the Social Security Act ( 42 U.S.C. 401  et seq.) had such requirements been met, then under certain conditions, the remuneration paid was to be deemed remuneration for employment for purposes of title II of the Social Security Act.\nFunctions of Public Health Service, of Surgeon General of Public Health Service, and of all other officers and employees of Public Health Service, and functions of all agencies of or in Public Health Service transferred to Secretary of Health, Education, and Welfare by 1966 Reorg. Plan No. 3, 31 F.R. 8855,  80 Stat. 1610 , effective  June 25, 1966 , set out in the Appendix to Title 5, Government Organization and Employees.\nCoast and Geodetic Survey consolidated with National Weather Bureau in 1965 to form Environmental Science Services Administration by Reorg. Plan No. 2 of 1965, eff.  July 13, 1965 , 30 F.R. 8819,  79 Stat. 1318 , set out in the Appendix to Title 5, Government Organization and Employees. Commissioned Officer Corps of Environmental Science Services Administration changed to Commissioned Officer Corps of National Oceanic and Atmospheric Administration, see 1970 Reorg. Plan No. 4, §\u202f4(d), eff.  Oct. 3, 1970 , 35 F.R. 15627,  84 Stat. 2090 , set out in the Appendix to Title 5.\nPub. L. 105–34, title IX, §\u202f968 ,  Aug. 5, 1997 ,  111 Stat. 895 , amending this section and enacting provisions set out as a note above, was subject to line item veto by the President, Cancellation No. 97–2, signed  Aug. 11, 1997 , 62 F.R. 43267,  Aug. 12, 1997 . For decision holding line item veto unconstitutional, see  Clinton v. City of New York , 524 U.S. 417, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998).'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'In the case of the taxes imposed by this chapter with respect to service performed in the employ of the United States or in the employ of any instrumentality which is wholly owned by the United States, including such service which is medicare qualified government employment (as defined in section 3121(u)(3)), including service, performed as a member of a uniformed service, to which the provisions of section 3121(m)(1) are applicable, and including service, performed as a volunteer or volunteer leader within the meaning of the Peace Corps Act, to which the provisions of section 3121(p) are applicable, the determination of the amount of remuneration for such service, and the return and payment of the taxes imposed by this chapter, shall be made by the head of the Federal agency or instrumentality having the control of such service, or by such agents as such head may designate. In the case of the taxes imposed by this chapter with respect to service performed in the employ of an international organization pursuant to a transfer to which the provisions of section 3121(y) are applicable, the determination of the amount of remuneration for such service, and the return and payment of the taxes imposed by this chapter, shall be made by the head of the Federal agency from which the transfer was made. Nothing in this paragraph shall be construed to affect the Secretary’s authority to determine under subsections (a) and (b) of section 3121 whether any such service constitutes employment, the periods of such employment, and whether remuneration paid for any such service constitutes wages. The person making such return may, for convenience of administration, make payments of the tax imposed under section 3111 with respect to such service without regard to the contribution and benefit base limitation in section 3121(a)(1), and he shall not be required to obtain a refund of the tax paid under section 3111 on that part of the remuneration not included in wages by reason of section 3121(a)(1). Payments of the tax imposed under section 3111 with respect to service, performed by an individual as a member of a uniformed service, to which the provisions of section 3121(m)(1) are applicable, shall be made from appropriations available for the pay of members of such uniformed service. The provisions of this section shall be applicable in the case of service performed by a civilian employee, not compensated from funds appropriated by the Congress, in the Army and Air Force Exchange Service, Army and Air Force Motion Picture Service, Navy Exchanges, Marine Corps Exchanges, or other activities, conducted by an instrumentality of the United States subject to the jurisdiction of the Secretary of Defense, at installations of the Department of Defense for the comfort, pleasure, contentment, and mental and physical improvement of personnel of such Department; and for purposes of this section the Secretary of Defense shall be deemed to be the head of such instrumentality. The provisions of this section shall be applicable also in the case of service performed by a civilian employee, not compensated from funds appropriated by the Congress, in the Coast Guard Exchanges or other activities, conducted by an instrumentality of the United States subject to the jurisdiction of the Secretary of the Department in which the Coast Guard is operating, at installations of the Coast Guard for the comfort, pleasure, contentment, and mental and physical improvement of personnel of the Coast Guard; and for purposes of this section the Secretary of the Department in which the Coast Guard is operating shall be deemed to be the head of such instrumentality.\nThe Peace Corps Act, referred to in text, is  Pub. L. 87–293 ,  Sept. 22, 1961 ,  75 Stat. 612 , which is classified principally to chapter 34 (§\u202f2501 et seq.) of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under  section 2501 of Title 22  and Tables.\n2006— Pub. L. 109–241  substituted “Secretary of the Department in which the Coast Guard is operating” for “Secretary of Transportation” in two places.\n1994— Pub. L. 103–296  inserted after first sentence “In the case of the taxes imposed by this chapter with respect to service performed in the employ of an international organization pursuant to a transfer to which the provisions of section 3121(y) are applicable, the determination of the amount of remuneration for such service, and the return and payment of the taxes imposed by this chapter, shall be made by the head of the Federal agency from which the transfer was made.”\n1993— Pub. L. 103–66  substituted “contribution and benefit base limitation” for “applicable contribution base limitation”.\n1990— Pub. L. 101–508  substituted “applicable contribution base limitation” for “contribution and benefit base limitation”.\n1988— Pub. L. 100–647  struck out from first sentence “the determination whether an individual has performed service which constitutes employment as defined in section 3121(b),” after “section 3121(p) are applicable,” and “which constitutes wages as defined in section 3121(a)” after “remuneration for such service”, and inserted after first sentence “Nothing in this paragraph shall be construed to affect the Secretary’s authority to determine under subsections (a) and (b) of section 3121 whether any such service constitutes employment, the periods of such employment, and whether remuneration paid for any such service constitutes wages.”\n1986— Pub. L. 99–272  substituted “including such service which is medicare qualified government employment (as defined in section 3121(u)(3))” for “including service which is medicare qualified Federal employment (as defined in section 3121(u)(2))”.\n1982— Pub. L. 97–248  inserted “including service which is medicare qualified Federal employment (as defined in section 3121(u)(2)),”.\n1976— Pub. L. 94–455  substituted “Secretary of Transportation” for “Secretary” in two places.\n1973— Pub. L. 93–233, §\u202f5(b)(3) , effective with respect to remuneration paid after 1973, substituted “$13,200” for “$12,600”.\nPub. L. 93–233, §\u202f5(d) , applicable only with respect to remuneration paid after, and taxable year beginning after, 1973 (as provided in  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 ), amended  section 203(b)(3)(C) of Pub. L. 92–336  (set out as 1973 Amendment note hereunder) substituting “$13,200” for “$12,600”.\nPub. L. 93–66, §\u202f203(b)(3) , effective with respect to remuneration paid after 1973, substituted “$12,600” for “$12,000”.\nPub. L. 93–66, §\u202f203(d) , applicable only with respect to remuneration paid after, and taxable years beginning after, 1973 (as provided in  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 ), amended  section 203(b)(3)(C) of Pub. L. 92–336  (set out as 1972 Amendment note hereunder) substituting “$12,600” for “$12,000”.\n1972— Pub. L. 92–336, §\u202f203(b)(3)(A) , substituted “$10,800” for “$9,000”.\nPub. L. 92–336, §\u202f203(b)(3)(B) , effective with respect to remuneration paid after 1973, substituted “$12,000” for “$10,800”.\nPub. L. 92–336, §\u202f203(b)(3)(C) , effective with respect to remuneration paid after 1974, substituted “contribution and benefit base” for “$12,000”.\n1971— Pub. L. 92–5  substituted “$9,000” for “$7,800”.\n1968— Pub. L. 90–248  substituted “$7,800” for “$6,600” in second sentence.\n1965— Pub. L. 89–97  substituted “$6,600” for “$4,800”.\n1961— Pub. L. 87–293  inserted “and including service, performed as a volunteer or volunteer leader within the meaning of the Peace Corps Act, to which the provisions of section 3121(p) are applicable,” after “section 3121(m)(1) are applicable,”.\n1958— Pub. L. 85–866  substituted “section” for “subsection” wherever appearing.\nPub. L. 85–840  substituted “$4,800” for $4,200”.\n1956—Act  Aug. 1, 1956 , included taxes with respect to service, performed as a member of a uniformed service, to which provisions of  section 3121(m)(1) of this title  are applicable, and authorized payment of tax imposed under  section 3111 of this title  from appropriations available for pay of members of the uniformed service.\n1954—Act  Sept. 1, 1954 , §\u202f202(c), substituted “$4,200” for “$3,600”.\nAct  Sept. 1, 1954 , §\u202f203(a), inserted provisions making section applicable to services performed by a civilian employee in the Coast Guard Exchanges or certain other activities at Coast Guard installations.\nAmendment by  Pub. L. 103–296  applicable with respect to service performed after calendar quarter following calendar quarter in which  Aug. 15, 1994 , occurs, see  section 319(c) of Pub. L. 103–296 , set out as a note under  section 1402 of this title .\nAmendment by  Pub. L. 103–66  applicable to 1994 and later calendar years, see  section 13207(e) of Pub. L. 103–66 , set out as a note under  section 1402 of this title .\nAmendment by  Pub. L. 101–508  applicable to 1991 and later calendar years, see  section 11331(e) of Pub. L. 101–508 , set out as a note under  section 1402 of this title .\nPub. L. 100–647, title VIII, §\u202f8015(a)(3) ,  Nov. 10, 1988 ,  102 Stat. 3791 , provided that:  “The amendments made by paragraphs (1) and (2) [amending this section and  section 405 of Title 42 , The Public Health and Welfare] shall apply to determinations relating to service commenced in any position on or after the date of the enactment of this Act [ Nov. 10, 1988 ].”\nAmendment by  Pub. L. 99–272  applicable to services performed after  Mar. 31, 1986 , see  section 13205(d)(1) of Pub. L. 99–272 , set out as a note under  section 3121 of this title .\nAmendment by  Pub. L. 97–248  applicable to remuneration paid after  Dec. 31, 1982 , see  section 278(c)(1) of Pub. L. 97–248 , set out as a note under  section 3121 of this title .\nAmendment by  Pub. L. 94–455  applicable with respect to wages paid after  Dec. 31, 1976 , see  section 1903(d) of Pub. L. 94–455 , set out as a note under  section 3101 of this title .\nAmendment by  Pub. L. 93–233  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 93–66  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 .\nAmendment by  Pub. L. 92–336  applicable only with respect to remuneration paid after December 1972, see  section 203(c) of Pub. L. 92–336 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 92–5  applicable only with respect to remuneration paid after December 1971, see  section 203(c) of Pub. L. 92–5 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 90–248  applicable only with respect to remuneration paid after December 1967, see  section 108(c) of Pub. L. 90–248 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 89–97  applicable with respect to remuneration paid after December, 1965, see  section 320(c) of Pub. L. 89–97 , set out as a note under  section 3121 of this title .\nAmendment by  Pub. L. 87–293  applicable with respect to service performed after  Sept. 22, 1961 , but in the case of persons serving under the Peace Corps agency established by executive order applicable with respect to service performed on or after the effective date of enrollment, see  section 202(c) of Pub. L. 87–293 , set out as a note under  section 3121 of this title .\nAmendment by  Pub. L. 85–840  applicable only with respect to remuneration paid after 1958, see  section 402(e) of Pub. L. 85–840 , set out as a note under  section 3121 of this title .\nAmendment by act  Aug. 1, 1956 , effective  Jan. 1, 1956 , see  act Aug. 1, 1956, ch. 837, title VI, §\u202f603(a) ,  70 Stat. 887 .\nAmendment by section 202(c) of act  Sept. 1, 1954 , applicable only with respect to remuneration paid after 1954, see section 202(d) of act  Sept. 1, 1954 , set out as a note under  section 1401 of this title .\nAct Sept. 1, 1954, ch. 1206, title II, §\u202f203(b) ,  68 Stat. 1091 , provided that:  “The amendment made by subsection (a) [amending this section] shall become effective  January 1, 1955 .”\nSection 202(a)(3) of Pub. L. 87–293 , cited as a credit to this section, was repealed by  Pub. L. 89–572, §\u202f5(a) ,  Sept. 13, 1966 ,  80 Stat. 765 . Such repeal not deemed to affect amendments to this section contained in such provisions, and continuation in full force and effect until modified by appropriate authority of all determinations, authorization, regulations, orders, contracts, agreements, and other actions issued, undertaken, or entered into under authority of the repealed provisions, see  section 5(b) of Pub. L. 89–572 , set out as a note under  section 2515 of Title 22 , Foreign Relations and Intercourse.'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'Whenever under this chapter or any act of Congress, or under the law of any State, an employer is required or permitted to deduct any amount from the remuneration of an employee and to pay the amount deducted to the United States, a State, or any political subdivision thereof, then for purposes of this chapter the amount so deducted shall be considered to have been paid to the employee at the time of such deduction.'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'The Secretary at intervals of not longer than 3 years shall estimate the reduction in the amount of taxes collected under this chapter by reason of the operation of section 3121(b)(9) and shall include such estimate in his annual report.\n1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”.\n1954—Act  Sept. 1, 1954 , substituted “section 3121(b)(9)” for “section 3121(b)(10)”.'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'Except as otherwise provided in this section, in the case of the taxes imposed by sections 3101(b) and 3111(b) with respect to service performed in the employ of a State or any political subdivision thereof (or any instrumentality of any one or more of the foregoing which is wholly owned thereby), the return and payment of such taxes may be made by the head of the agency or instrumentality having the control of such service, or by such agents as such head may designate. The person making such return may, for convenience of administration, make payments of the tax imposed under section 3111 with respect to the service of such individuals without regard to the contribution and benefit base limitation in section 3121(a)(1).\nThe return and payment of the taxes imposed by this chapter on the income of individuals who are officers or employees of the Government of Guam or any political subdivision thereof or of any instrumentality of any one or more of the foregoing which is wholly owned thereby, and those imposed on such Government or political subdivision or instrumentality with respect to having such individuals in its employ, may be made by the Governor of Guam or by such agents as he may designate. The person making such return may, for convenience of administration, make payments of the tax imposed under section 3111 with respect to the service of such individuals without regard to the contribution and benefit base limitation in section 3121(a)(1).\nThe return and payment of the taxes imposed by this chapter on the income of individuals who are officers or employees of the Government of American Samoa or any political subdivision thereof or of any instrumentality of any one or more of the foregoing which is wholly owned thereby, and those imposed on such Government or political subdivision or instrumentality with respect to having such individuals in its employ, may be made by the Governor of American Samoa or by such agents as he may designate. The person making such return may, for convenience of administration, make payments of the tax imposed under section 3111 with respect to the service of such individuals without regard to the contribution and benefit base limitation in section 3121(a)(1).\nIn the case of the taxes imposed by this chapter with respect to service performed in the employ of the District of Columbia or in the employ of any instrumentality which is wholly owned thereby, the return and payment of the taxes may be made by the Mayor of the District of Columbia or such agents as he may designate. The person making such return may, for convenience of administration, make payments of the tax imposed by section 3111 with respect to such service without regard to the contribution and benefit base limitation in section 3121(a)(1).\nA prior section 3125 was renumbered  section 3128 of this title .\n1993— Pub. L. 103–66  which directed the amendment of this section by substituting “contribution and benefit base limitation” for “applicable contribution base limitation” without specifying where the substitution was to be made, was executed by making the substitution in subsecs. (a) to (d) to reflect the probable intent of Congress.\n1990— Pub. L. 101–508  substituted “applicable contribution base limitation” for “contribution and benefit base limitation” in subsecs. (a) to (d).\n1986— Pub. L. 99–272  inserted “States” in section catchline, added subsec. (a), and redesignated former subsecs. (a) to (c) as (b) to (d), respectively.\n1976—Subsec. (c).  Pub. L. 94–455  substituted “Mayor of the District of Columbia or such agents as he may designate” for “Commissioners of the District of Columbia or such agents as they may designate”.\n1973— Pub. L. 93–233, §\u202f5(b)(4) , effective with respect to remuneration paid after 1973, substituted “$13,200” for “$12,600” wherever appearing.\nPub. L. 93–233, §\u202f5(d) , applicable only with respect to remuneration paid after, and taxable years beginning after, 1973 (as provided in  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 ), amended  section 203(b)(4)(C) of Pub. L. 92–336  (set out as 1973 Amendment note hereunder) substituting “$13,200” for “$12,600”.\nPub. L. 93–66, §\u202f203(b)(4) , effective with respect to remuneration paid after 1973, substituted “$12,600” for “$12,000” wherever appearing.\nPub. L. 93–66, §\u202f203(d) , applicable only with respect to remuneration paid after, and taxable years beginning after, 1973 (as provided in  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 ), amended  section 203(b)(4)(C) of Pub. L. 92–336  (set out as 1972 Amendment note hereunder) substituting “$12,600” for “$12,000”.\n1972— Pub. L. 92–336, §\u202f203(b)(4)(A) , substituted “$10,800” for “$9,000” wherever appearing.\nPub. L. 92–336, §\u202f203(b)(4)(B) , effective with respect to remuneration paid after 1973, substituted “$12,000” for “$10,800” wherever appearing.\nPub. L. 92–336, §\u202f203(b)(4)(C) , effective with respect to remuneration paid after 1974, substituted “contribution and benefit base” for “$12,000”.\n1971— Pub. L. 92–5  substituted “$9,000” for “$7,800” wherever appearing.\n1968— Pub. L. 90–248  substituted “$7,800” for “$6,600” wherever appearing.\n1965—Subsecs. (a), (b).  Pub. L. 89–97, §\u202f320(b)(4) , substituted “$6,600” for “$4,800”.\nSubsec. (c).  Pub. L. 89–97, §\u202f317(c)(1) , added subsec. (c) and inserted reference to District of Columbia in section catchline.\nAmendment by  Pub. L. 103–66  applicable to 1994 and later calendar years, see  section 13207(e) of Pub. L. 103–66 , set out as a note under  section 1402 of this title .\nAmendment by  Pub. L. 101–508  applicable to 1991 and later calendar years, see  section 11331(e) of Pub. L. 101–508 , set out as a note under  section 1402 of this title .\nAmendment by  Pub. L. 99–272  applicable to services performed after  Mar. 31, 1986 , see  section 13205(d)(1) of Pub. L. 99–272 , set out as a note under  section 3121 of this title .\nAmendment by  Pub. L. 93–233  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 5(e) of Pub. L. 93–233 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 93–66  applicable only with respect to remuneration paid after, and taxable years beginning after, 1973, see  section 203(e) of Pub. L. 93–66 , set out as a note under  section 409 of Title 42 .\nAmendment by  Pub. L. 92–336  applicable only with respect to remuneration paid after December 1972, see  section 203(c) of Pub. L. 92–336 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 92–5  applicable only with respect to remuneration paid after December 1971, see  section 203(c) of Pub. L. 92–5 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by  Pub. L. 90–248  applicable only with respect to remuneration paid after December 1967, see  section 108(c) of Pub. L. 90–248 , set out as a note under  section 409 of Title 42 , The Public Health and Welfare.\nAmendment by section 317(c)(1), (2) of  Pub. L. 89–97  applicable with respect to services performed after quarter ending  September 30, 1965 , and after quarter in which Secretary of the Treasury receives a certification from Commissioners of District of Columbia expressing their desire to have insurance system established by section 401 et seq. and 1395c et seq. of Title 42, The Public Health and Welfare, extended to officers and employees coming under provisions of such amendments, see  section 317(g) of Pub. L. 89–97 , set out as a note under  section 410 of Title 42 .\nAmendment by  section 320(b)(4) of Pub. L. 89–97  applicable with respect to remuneration paid after December 1965, see  section 320(c) of Pub. L. 89–97 , set out as a note under  section 3121 of this title .\nSection applicable only with respect to (1) service in the employ of the Government of Guam or any political subdivision thereof, or any instrumentality of any one or more of the foregoing wholly owned thereby, which is performed after 1960 and after the calendar quarter in which the Secretary of the Treasury receives a certification by the Governor of Guam that legislation has been enacted by the Government of Guam expressing its desire to have the insurance system established by title II of the Social Security Act ( 42 U.S.C. 401  et seq.) extended to the officers and employees of such Government and such political subdivisions and instrumentalities, and (2) service in the employ of the Government of American Samoa or any political subdivision thereof or any instrumentality of any one or more of the foregoing wholly owned thereby, which is performed after 1960 and after the calendar quarter in which the Secretary of the Treasury receives a certification by the Governor of American Samoa that the Government of American Samoa desires to have the insurance system established by title II of the Social Security Act extended to the officers and employees of such Government and such political subdivisions and instrumentalities, see  section 103(v)(1) of Pub. L. 86–778 , set out as an Effective Date of 1960 Amendment note under  section 402 of Title 42 , The Public Health and Welfare.'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'If the employer is a State or political subdivision thereof, or an agency or instrumentality of any one or more of the foregoing, the return of the amount deducted and withheld upon any wages under section 3101 and the amount of the tax imposed by section 3111 may be made by any officer or employee of such State or political subdivision or such agency or instrumentality, as the case may be, having control of the payment of such wages, or appropriately designated for that purpose.\nA prior section 3126 was renumbered  section 3128 of this title .\nSection, except as otherwise provided, effective with respect to payments due with respect to wages paid after  Dec. 31, 1986 , including wages paid after such date by a State (or political subdivision thereof) that modified its agreement pursuant to  section 418(e)(2) of Title 42 , The Public Health and Welfare, see  section 9002(d) of Pub. L. 99–509 , set out as an Effective Date of 1986 Amendment note under  section 418 of Title 42 .'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'Section 203 of the Social Security Act, referred to in subsec. (b)(3), is classified to  section 403 of Title 42 , The Public Health and Welfare.\nA prior section 3127 was renumbered  section 3128 of this title .\n2018—Subsec. (b)(3).  Pub. L. 115–141  struck out “or 222(b)” after “section 203”.\n1994—Subsecs. (b)(2), (c)(2).  Pub. L. 103–296  substituted “Commissioner of Social Security” for “Secretary of Health and Human Services”.\n1989—Subsec. (a).  Pub. L. 101–239, §\u202f10204(b)(1)(B) , substituted “the employees thereof” for “his employees” in concluding provisions.\nSubsec. (a)(1).  Pub. L. 101–239, §\u202f10204(b)(1)(A) , inserted “(or, if the employer is a partnership, each partner therein)” after “an employer”.\nSubsec. (b).  Pub. L. 101–239, §\u202f10204(b)(1)(C) , inserted “(or a partner)” after “an employer” in introductory provisions.\nSubsec. (c).  Pub. L. 101–239, §\u202f10204(b)(1)(D) , substituted “the employees thereof” for “his employees” in introductory provisions.\nSubsec. (c)(1).  Pub. L. 101–239, §\u202f10204(b)(1)(E) , inserted “(or, if the employer is a partnership, each partner therein)”.\nSubsec. (c)(2).  Pub. L. 101–239, §\u202f10204(b)(1)(F) , substituted “such employer (or, if the employer is a partnership, any partner therein) or the employee involved does not meet” for “such employer or the employee involved ceases to meet” in cl. (A) and inserted “(or, if the employer is a partnership, any partner therein)” after “such employer” in cl. (B).\nAmendment by  Pub. L. 103–296  effective  Mar. 31, 1995 , see  section 110(a) of Pub. L. 103–296 , set out as a note under  section 401 of Title 42 , The Public Health and Welfare.\nPub. L. 101–239, title X, §\u202f10204(b)(2) ,  Dec. 19, 1989 ,  103 Stat. 2474 , provided that:  “The amendments made by this subsection [amending this section] shall be effective as if they were included in the amendments made by section 8007(a)(1) of the Technical and Miscellaneous Revenue Act of 1988 ( 102 Stat. 3781 ) [ Pub. L. 100–647 ].”\nSection applicable to wages paid after  Dec. 31, 1988 , see  section 8007(d) of Pub. L. 100–647 , set out as an Effective Date of 1988 Amendment note under  section 1402 of this title .\nFor provisions that nothing in amendment by  Pub. L. 115–141  be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to  Mar. 23, 2018 , for purposes of determining liability for tax for periods ending after  Mar. 23, 2018 , see  section 401(e) of Pub. L. 115–141 , set out as a note under  section 23 of this title .'},
 {'metadata': {'subtitle': 'Employment Taxes',
   'chapter': 'FEDERAL INSURANCE CONTRIBUTIONS ACT',
   'part': ''},
  'content': 'This chapter may be cited as the “Federal Insurance Contributions Act.”\nAmendment by  Pub. L. 99–509 , except as otherwise provided, effective with respect to payments due with respect to wages paid after  Dec. 31, 1986 , including wages paid after such date by a State (or political subdivision thereof) that modified its agreement pursuant to  section 418(e)(2) of Title 42 , The Public Health and Welfare, see  section 9002(d) of Pub. L. 99–509 , set out as a note under  section 418 of Title 42 .'},
 ...]

Ingest & chunk data

# Wrap in LangChain Document objects
documents = [
    Document(page_content=d["content"], metadata=d["metadata"])
    for d in data_dict
]

# Split each document into smaller chunks
text_splitter = RecursiveCharacterTextSplitter(chunk_size=512, chunk_overlap=64)
chunked_docs = text_splitter.split_documents(documents)

Embed and Store

# Init the embedding model -- fine tuned 
ft_embedding_model = HuggingFaceEmbeddings(model_name="chandlerNick/sentence-transformers-usc26-bert")

# BERT BASE
bert = models.Transformer('bert-base-uncased')

pooling = models.Pooling(
    word_embedding_dimension=bert.get_word_embedding_dimension(),
    pooling_mode_cls_token=True,
    pooling_mode_mean_tokens=False,
    pooling_mode_max_tokens=False,
)

cls_model = SentenceTransformer(modules=[bert, pooling])
cls_model.save("custom-bert-cls")

pt_embedding_model = HuggingFaceEmbeddings(model_name="./custom-bert-cls")

FT Vector Store

# Create Annoy vector store from chunked docs
ft_vector_store = Annoy.from_documents(chunked_docs, ft_embedding_model)
ft_vector_store.save_local("ft_annoy_tax_code_index")

# Create FAISS vector store
ft_vector_store_2 = FAISS.from_documents(chunked_docs, ft_embedding_model)
ft_vector_store_2.save_local("faiss_ft_store")

PT Vector Store

# Create Annoy vector store from chunked docs
pt_vector_store = Annoy.from_documents(chunked_docs, pt_embedding_model)
pt_vector_store.save_local("pt_annoy_tax_code_index")

# Create FAISS vector store
pt_vector_store_2 = FAISS.from_documents(chunked_docs, pt_embedding_model)
pt_vector_store_2.save_local("faiss_pt_store")

Qualitative Comparison of Vector Stores

def inspect_query_results(
    query: str,
    vector_stores: List[VectorStore],
    labels: List[str],
    k: int = 5,
    metadata_key: str = "subtitle",
    print_content_preview_chars: int = 200,
):
    """
    Inspect the top-k results of a query across multiple vector stores.

    Args:
        query (str): The input query string.
        vector_stores (List[VectorStore]): List of LangChain vector store objects.
        labels (List[str]): List of string labels for each vector store (e.g. "FT BERT + Annoy").
        k (int): Number of top documents to retrieve per vector store.
        metadata_key (str): Key in metadata to show (e.g., "subtitle").
        print_content_preview_chars (int): Number of characters from page content to preview.

    Returns:
        None
    """
    print(f"\n🔍 Query: \"{query}\"")
    print("-" * 80)

    for store, label in zip(vector_stores, labels):
        print(f"\n📘 {label}")
        print("=" * len(label))
        try:
            results = store.similarity_search(query, k=k)
        except:
            results = store.similarity_search_with_score(query, k=k)
            results = [res[0] for res in results]  # Strip scores if needed

        for idx, doc in enumerate(results):
            subtitle = doc.metadata.get(metadata_key, "Unknown")
            content_preview = doc.page_content[:print_content_preview_chars].replace("\n", " ")
            print(f"{idx+1}. [{subtitle}] {content_preview}...")

        print("-" * 80)

vector_stores = [ft_vector_store, pt_vector_store, ft_vector_store_2, pt_vector_store_2]
labels = [
    "FT BERT + Annoy",
    "CLS BERT + Annoy",
    "FT BERT + FAISS",
    "CLS BERT + FAISS"
]
queries = [
    "A tax is hereby imposed for each taxable year on the taxable income of every corporation",  # Directly copied text from document
    "For purposes of this part, an individual shall be treated as not married at the close of the taxable year if such individual is so treated under the provisions of section 7703(b)",  # Direct quoting
    "Tax on head of household",  # Near text from the documents
    "Tree huggers are cool!"  # A garbage query, unrelated to the tax law
]

for query in queries:
    inspect_query_results(
        query=query,
        vector_stores=vector_stores,
        labels=labels,
        k=5,
        metadata_key="subtitle"
    )

🔍 Query: "A tax is hereby imposed for each taxable year on the taxable income of every corporation"
--------------------------------------------------------------------------------

📘 FT BERT + Annoy
===============
1. [Income Taxes] Subsec. (a)(5).  Pub. L. 92–603, § 135(a)(1)(B) , struck out par. (5) which provided that in the case of taxable years beginning after  Dec. 31, 2010 , the tax shall be equal to 7.0 percent of the amo...
2. [Income Taxes] In the case of a nonresident alien individual present in the United States for a period or periods aggregating 183 days or more during the taxable year, there is hereby imposed for such year a tax of ...
3. [Income Taxes] the United States as the amount upon which the existing 30 percent levy should be imposed, and added contingent income received from the sale of patents and other intangibles and amounts of original i...
4. [Income Taxes] “(B)   Computation of tax .— If subparagraph (A) applies to any lump sum distribution of any taxpayer for any taxable year, the tax imposed by section 1 of the Internal Revenue Code of 1986 on such ta...
5. [Income Taxes] Subsec. (d)(3).  Pub. L. 105–206, § 6003(a)(1)(A) , (B), (2), redesignated par. (5) as (3), substituted “paragraph (1)” for “paragraph (3)” in introductory provisions, and struck out heading and text ...
--------------------------------------------------------------------------------

📘 CLS BERT + Annoy
================
1. [Income Taxes] exchange of property shall not be considered a payment, and any payment due under such evidence of indebtedness”....
2. [Income Taxes] for “useful life of any property shall be determined as of the time such property is placed in service by the taxpayer”....
3. [Procedure and Administration] All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto....
4. [Procedure and Administration] any tax imposed by this title which is required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid....
5. [Employment Taxes] to such tax. No deduction shall be allowed under this title for any liability imposed by the preceding sentence....
--------------------------------------------------------------------------------

📘 FT BERT + FAISS
===============
1. [Income Taxes] A tax is hereby imposed for each taxable year on the taxable income of every corporation. The amount of the tax imposed by subsection (a) shall be 21 percent of taxable income. In the case of a foreig...
2. [Income Taxes] “(B)   Taxation of exempt arbitrage profits.— “(i)   In general .— In the case of an organization which elects the application of this subparagraph, there is hereby imposed a tax on the exempt arbitra...
3. [Income Taxes] “(1)  Organizations taxable at corporate rates .—If an organization is subject to tax on unrelated business taxable income pursuant to subsection (a), the tax imposed by section 56 shall apply to such...
4. [Income Taxes] “(2)  Organizations taxable as trusts .—If an organization is subject to tax on unrelated business taxable income pursuant to subsection (b), the taxes imposed by section 55 shall apply to such organi...
5. [Income Taxes] 1997—Subsec. (h).  Pub. L. 105–34  amended heading and text of subsec. (h) generally. Prior to amendment, text read as follows: “If a taxpayer has a net capital gain for any taxable year, then the tax...
--------------------------------------------------------------------------------

📘 CLS BERT + FAISS
================
1. [Income Taxes] for “useful life of any property shall be determined as of the time such property is placed in service by the taxpayer”....
2. [Income Taxes] exchange of property shall not be considered a payment, and any payment due under such evidence of indebtedness”....
3. [Employment Taxes] to such tax. No deduction shall be allowed under this title for any liability imposed by the preceding sentence....
4. [Procedure and Administration] any tax imposed by this title which is required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid....
5. [Procedure and Administration] All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto....
--------------------------------------------------------------------------------

🔍 Query: "For purposes of this part, an individual shall be treated as not married at the close of the taxable year if such individual is so treated under the provisions of section 7703(b)"
--------------------------------------------------------------------------------

📘 FT BERT + Annoy
===============
1. [Income Taxes] “(A) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, “(B) such individual has not attained the age of 17 as of the close of the calendar yea...
2. [Income Taxes] If the taxpayer is married at the close of the taxable year, the deduction shall be allowed under subsection (a) only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year...
3. [Income Taxes] 1978—Subsec. (f)(6).  Pub. L. 95–600  substituted provision disallowing a credit for any amount paid by a taxpayer to an individual with respect to whom, for the taxable year, a deduction under sectio...
4. [Income Taxes] the taxpayer to an individual bearing a relationship described in section 152(a)(1) through (8), or a dependent described in section 152(a)(9), except that a credit was allowed for an amount paid by a...
5. [Income Taxes] The term “qualifying child” means a qualifying child of the taxpayer (as defined in section 152(c), determined without regard to paragraph (1)(D) thereof and section 152(e)). The term “qualifying chil...
--------------------------------------------------------------------------------

📘 CLS BERT + Annoy
================
1. [Procedure and Administration] For purposes of this section, any failure to comply with section 6226(b)(4)(A)(ii) shall be treated as a failure to pay the amount described in subclause (II) thereof and such amount shall be treated ...
2. [Estate and Gift Taxes] For purposes of this subsection, an applicable family member shall be treated in the same manner as the transferor with respect to any distribution right retained by such family member to which subsec...
3. [Income Taxes] The amount of the credit allowed under this section to any taxpayer for any taxable year shall be reduced (but not below zero) by the aggregate amount of payments made under section 7527A to such taxp...
4. [Estate and Gift Taxes] For purposes of the second sentence of subsection (a) and the last sentence of subsection (b), an agreement which meets the requirements of section 6324A (relating to special lien for estate tax defer...
5. [Miscellaneous Excise Taxes] An individual for whose benefit an Archer MSA (within the meaning of section 220(d)) is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such...
--------------------------------------------------------------------------------

📘 FT BERT + FAISS
===============
1. [Income Taxes] Subsec. (b)(3)(B)(ii).  Pub. L. 94–455, § 1901(b)(9) , redesignated cl. (iii) as (ii) and struck out former cl. (ii) which provided that an individual who was a dependent solely by reason of par. (10)...
2. [Income Taxes] “(A) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, “(B) such individual has not attained the age of 17 as of the close of the calendar yea...
3. [Income Taxes] If the taxpayer is married at the close of the taxable year, the deduction shall be allowed under subsection (a) only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year...
4. [Income Taxes] 1978—Subsec. (f)(6).  Pub. L. 95–600  substituted provision disallowing a credit for any amount paid by a taxpayer to an individual with respect to whom, for the taxable year, a deduction under sectio...
5. [Income Taxes] the taxpayer to an individual bearing a relationship described in section 152(a)(1) through (8), or a dependent described in section 152(a)(9), except that a credit was allowed for an amount paid by a...
--------------------------------------------------------------------------------

📘 CLS BERT + FAISS
================
1. [Procedure and Administration] For purposes of this section, any failure to comply with section 6226(b)(4)(A)(ii) shall be treated as a failure to pay the amount described in subclause (II) thereof and such amount shall be treated ...
2. [Estate and Gift Taxes] For purposes of this subsection, an applicable family member shall be treated in the same manner as the transferor with respect to any distribution right retained by such family member to which subsec...
3. [Estate and Gift Taxes] For purposes of the second sentence of subsection (a) and the last sentence of subsection (b), an agreement which meets the requirements of section 6324A (relating to special lien for estate tax defer...
4. [Miscellaneous Excise Taxes] An individual for whose benefit an Archer MSA (within the meaning of section 220(d)) is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such...
5. [Income Taxes] The amount of the credit allowed under this section to any taxpayer for any taxable year shall be reduced (but not below zero) by the aggregate amount of payments made under section 7527A to such taxp...
--------------------------------------------------------------------------------

🔍 Query: "Tax on head of household"
--------------------------------------------------------------------------------

📘 FT BERT + Annoy
===============
1. [Employment Taxes] Subsec. (e)(3).  Pub. L. 98–76, § 225(c)(1)(C) , (6), substituted “taxes imposed by section 3201” for “tax imposed by section 3201”, and “such taxes” for “such tax”. Subsec. (e)(4)(A).  Pub. L. 98–76,...
2. [Income Taxes] Subsec. (m)(2)(B).  Pub. L. 98–369, § 628(a)(2) , substituted “is exempt from tax under this title without regard to any provision of law which is not contained in this title and which is not containe...
3. [Income Taxes] For purposes of clause (ii)(II), any tax paid before  January 1, 1987 , pursuant to a process in effect before  August 16, 1986 , shall be treated as paid before the date of the enactment of this Act....
4. [Trust Fund Code] Pub. L. 105–34, title IX, § 901(f) ,  Aug. 5, 1997 ,  111 Stat. 872 , provided that:  “The amendments made by this section [amending this section] shall apply to taxes received in the Treasury after  ...
5. [Trust Fund Code] Pub. L. 106–554, § 1(a)(7) [title III, § 318(e)(2)] ,  Dec. 21, 2000 ,  114 Stat. 2763 , 2763A–646, provided that:  “The amendment made by paragraph (1) [amending this section] shall apply with respec...
--------------------------------------------------------------------------------

📘 CLS BERT + Annoy
================
1. [Procedure and Administration] is entitled to the benefits of section 7508 of the Internal Revenue Code of 1986:...
2. [Income Taxes] the regular tax liability attributable to income from such partnership....
3. [Income Taxes] allowed as a deduction under section 162(a) (relating to trade or business expenses).”...
4. [Income Taxes] the corporation’s taxable income and not properly chargeable to capital account)”....
5. [Income Taxes] payable to patrons which are derived from business done with or for patrons during the taxable year.”...
--------------------------------------------------------------------------------

📘 FT BERT + FAISS
===============
1. [Employment Taxes] Subsec. (e)(3).  Pub. L. 98–76, § 225(c)(1)(C) , (6), substituted “taxes imposed by section 3201” for “tax imposed by section 3201”, and “such taxes” for “such tax”. Subsec. (e)(4)(A).  Pub. L. 98–76,...
2. [Income Taxes] Subsec. (m)(2)(B).  Pub. L. 98–369, § 628(a)(2) , substituted “is exempt from tax under this title without regard to any provision of law which is not contained in this title and which is not containe...
3. [Procedure and Administration] For purposes of subsections (a), (b), and (c), the taxes imposed by section 4041(d) shall be treated as imposed by section 4041(a)....
4. [Income Taxes] Subsec. (b).  Pub. L. 91–172  generally revised rates of tax of heads of household downwards and struck out provisions defining head of household, determination of status, and limitations. For definit...
5. [Miscellaneous Excise Taxes] Subsec. (b)(3).  Pub. L. 99–499, § 521(d)(1) , added par. (3). Subsecs. (d), (e).  Pub. L. 99–499, § 521(a)(2) , added subsec. (d) and redesignated former subsec. (d) as (e). Subsec. (f)(3).  Pub. L. ...
--------------------------------------------------------------------------------

📘 CLS BERT + FAISS
================
1. [Procedure and Administration] is entitled to the benefits of section 7508 of the Internal Revenue Code of 1986:...
2. [Income Taxes] the corporation’s taxable income and not properly chargeable to capital account)”....
3. [Income Taxes] the regular tax liability attributable to income from such partnership....
4. [Income Taxes] allowed as a deduction under section 162(a) (relating to trade or business expenses).”...
5. [Income Taxes] rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.”...
--------------------------------------------------------------------------------

🔍 Query: "Tree huggers are cool!"
--------------------------------------------------------------------------------

📘 FT BERT + Annoy
===============
1. [Income Taxes] this part by  Pub. L. 99–514 . See  section 7703 of this title ....
2. [Alcohol, Tobacco, and Certain Other Excise Taxes] (a) 5215.   (b) 5305.   (c) 5215, 5306. The prior sections,  act Aug. 16, 1954, ch. 736 , are set out in  68A Stat. 640 , 657. 1976—Subsecs. (a) to (c).  Pub. L. 94–455  struck out “or his delegate” a...
3. [Income Taxes] provisions generally, prior to the general revision of this part by  Pub. L. 98–369, § 211(a) ....
4. [Income Taxes] 1996— Pub. L. 104–188  substituted “this section” for “this subsection”....
5. [Miscellaneous Excise Taxes] (within the meaning of section 503(b) of such Code) or the corresponding provisions of prior law;...
--------------------------------------------------------------------------------

📘 CLS BERT + Annoy
================
1. [Income Taxes] “(B)  by substituting ‘13 percent’ for ‘20 percent’....
2. [Procedure and Administration] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
3. [Estate and Gift Taxes] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
4. [Employment Taxes] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
5. [Alcohol, Tobacco, and Certain Other Excise Taxes] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
--------------------------------------------------------------------------------

📘 FT BERT + FAISS
===============
1. [Income Taxes] this part by  Pub. L. 99–514 . See  section 7703 of this title ....
2. [Employment Taxes] ]...
3. [Income Taxes] 1996— Pub. L. 104–188  substituted “this section” for “this subsection”....
4. [Alcohol, Tobacco, and Certain Other Excise Taxes] (a) 5215.   (b) 5305.   (c) 5215, 5306. The prior sections,  act Aug. 16, 1954, ch. 736 , are set out in  68A Stat. 640 , 657. 1976—Subsecs. (a) to (c).  Pub. L. 94–455  struck out “or his delegate” a...
5. [Income Taxes] without regard to— “(A)  paragraph (2) of such section 453(b), and...
--------------------------------------------------------------------------------

📘 CLS BERT + FAISS
================
1. [Employment Taxes] after “such employer’s foreign”, and inserted “or residents” after “citizens”....
2. [Income Taxes] “(B)  by substituting ‘13 percent’ for ‘20 percent’....
3. [Procedure and Administration] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
4. [Estate and Gift Taxes] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
5. [Employment Taxes] 1976— Pub. L. 94–455  struck out “or his delegate” after “Secretary”....
--------------------------------------------------------------------------------

Comparison of Embedding Models' Embedding Spaces (Low dimensional projection)

def plot_two_faiss_embeddings_pca_side_by_side(
    vector_store1: FAISS,
    vector_store2: FAISS,
    color_key="subtitle",
    title1="Vector Store 1",
    title2="Vector Store 2",
    figsize=(16, 7),
):
    """
    Plot PCA projections of embeddings from two LangChain FAISS vector stores side by side.

    Args:
        vector_store1 (FAISS): First FAISS vector store.
        vector_store2 (FAISS): Second FAISS vector store.
        color_key (str): Metadata key to color points by. Default is "subtitle".
        title1 (str): Title for the first subplot.
        title2 (str): Title for the second subplot.
        figsize (tuple): Figure size.

    Returns:
        fig (matplotlib.figure.Figure): The matplotlib figure object.
        axs (np.ndarray): Array of the two subplot axes.
    """
    def extract_embeddings_and_labels(vector_store):
        faiss_index = vector_store.index
        num_vectors = faiss_index.ntotal
        dim = faiss_index.d
        embeddings = np.zeros((num_vectors, dim), dtype="float32")
        faiss_index.reconstruct_n(0, num_vectors, embeddings)
        metadatas = [doc.metadata for doc in vector_store.docstore._dict.values()]
        labels = [meta.get(color_key, "Unknown") for meta in metadatas]
        return embeddings, labels

    embeddings1, labels1 = extract_embeddings_and_labels(vector_store1)
    embeddings2, labels2 = extract_embeddings_and_labels(vector_store2)

    # Combine unique labels from both sets for consistent coloring
    unique_labels = sorted(set(labels1) | set(labels2))
    label_to_idx = {label: idx for idx, label in enumerate(unique_labels)}

    color_indices1 = [label_to_idx[label] for label in labels1]
    color_indices2 = [label_to_idx[label] for label in labels2]

    pca = PCA(n_components=2)
    # Fit PCA on combined data for consistent axes
    combined_embeddings = np.vstack([embeddings1, embeddings2])
    combined_projected = pca.fit_transform(combined_embeddings)

    projected1 = combined_projected[:len(embeddings1)]
    projected2 = combined_projected[len(embeddings1):]

    fig, axs = plt.subplots(1, 2, figsize=figsize)

    scatter1 = axs[0].scatter(projected1[:, 0], projected1[:, 1], c=color_indices1, cmap="tab10", alpha=0.7, s=5)
    axs[1].scatter(projected2[:, 0], projected2[:, 1], c=color_indices2, cmap="tab10", alpha=0.7, s=5)

    # Legend (one common legend on the right)
    handles, labels = scatter1.legend_elements()
    fig.legend(handles, unique_labels, title=color_key, loc='center right')

    axs[0].set_title(title1)
    axs[1].set_title(title2)

    var_pc1 = pca.explained_variance_ratio_[0] * 100
    var_pc2 = pca.explained_variance_ratio_[1] * 100

    for ax in axs:
        ax.set_xlabel(f"PC1 ({var_pc1:.1f}%)")
        ax.set_ylabel(f"PC2 ({var_pc2:.1f}%)")

    plt.tight_layout(rect=[0, 0, 0.75, 1])  # Leave room for legend on right

    return fig, axs

PCA

fig, axs = plot_two_faiss_embeddings_pca_side_by_side(
    ft_vector_store_2,
    pt_vector_store_2,
    color_key="subtitle",
    title1="Fine-tuned BERT FAISS Embeddings",
    title2="Pretrained BERT FAISS Embeddings"
)
plt.show()

Analysis of PC1-PC2 Embedding Space

One can see clearer grouping by subtitle in the Fine Tuned BERT's embedding space. This is presumably due to the similarity in the embedded representation induced by the document classification fine tuning task. It is worth noting that large amounts of information are lost in this visualization due to the projection from 768 dimensions to 2.